Hiscox’s ILS assets continue to erode, but ‘potential’ investor pipeline could sway outlook

Hiscox's ILS assets under management declined further in the third quarter, reaching $1.3 billion—a continued decrease from their nearly uninterrupted fall since peaking at $1.9 billion at the end of 2022.

The Q3 decline followed a $1.4 billion reading end-Q2 and was attributed to “planned returns of capital to ongoing investors” as the group transitions and diversifies its portfolio in what it calls “a transitioning market.”

Hiscox made no mention of inflows for the third quarter, traditionally a slow quarter in fund raising given the storm season calendar.  In the first half, management had put net outflows to the combined punch of “planned returns” plus a hit, be it to valuations or flows, from the Q1 California wildfires.

Management moved to sweeten with word of pipeline for third party capital. “Looking ahead, there is a strong pipeline of future potential investors,” management said in its statement.

Across its larger reinsurance and ILS division, Hiscox showed net contract written premium growth of 4% year on year to $114.2 million in Q3, calculations between 9M and H1 data indicated. 9M YoY premium growth was pulled down to a 7.0% reading.

Rates are down 5% year on year for the 9M YTD average, “reflecting increased competition in property,” management said. Despite the softening, the portfolio “remains well-rated,” management claimed, citing cumulative rate increases of 83% since 2018.

“Attachment points and terms and conditions have broadly held firm during the year,” management said.

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