Markel’s Nephila ups cessions in Q3, ILS boosts revenue
During the typically slow third quarter, Global re/insurer Markel significantly boosted reinsurance cessions to its ILS unit Nephila, raising the year-to-date total to $1.8 billion. This marks a 50% increase over the same period last year and contributed directly to higher ILS revenues for the group.
The $163 million ceded in the third quarter is a sizable 73% increase on the prior period, but still a tiny fraction of the $1.8 billion ceded year-to-date, highlighting the low issuance common to the peak hurricane season.
Management again failed to offer end-period assets under management for its stable of ILS funds grouped in and managed by Nephila, once the market's top player by AuM.
But rising cessions would at least seem to be kicking over into Nephila revenues. Total fund management revenues attributed to unconsolidated entities managed by Nephila rose 21% year on year to $30 million in the third quarter, the highest quarterly reading in two years. The 9M tally is likewise up 21% year on year.
New changes to Markel segment reporting from Q3 2025 blurred the view to Nephila’s broader finances even further; the ILS managing unit was blended with operations at State National, including its lender-facing collateral/portfolio protection insurance, into a new ‘Financials’ segment.
Notes to that segment’s revenues listed “a higher effective management fee rate for our ILS investment management services” amongst revenue drivers.
Within Markel, Nephila serves as the investment manager to several Bermuda-based private funds (the Nephila Funds) and funnels reinsurance ILS into the funds via Bermuda- and Lloyd's-based insurance managers (the Nephila Reinsurers).
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