Hiscox ILS puts $300m raised capital towards property cat: CFO Cooper

According to Hiscox Chief Financial Officer (CFO) Paul Cooper, the majority of the $300 million of third-party capital raised by Hiscox ILS, the insurance-linked securities (ILS) investment focused arm of Hiscox Group, during the first half of 2025, has gone into the organisation’s property catastrophe exposed business.

As we reported earlier, Hiscox ILS raised $300 million in capital from new and existing investors through the first-half of 2025, which lifted its ILS assets under management (AUM) back to $1.4 billion at June 30th.

Speaking during an analyst call on Hiscox’s H1’25 results, group CFO Paul Cooper explained. “In terms of third-party capital, we raised about $300 million in the first six months of the year. That has really all gone into sort of property cat exposed business.”

Concurrently, Cooper also affirmed that the ILS capital fees are on typical terms.

“So, the way that the fees break down, this is for quota share partners and ILS, you’ve got a fixed component dependent on volume, and then a performance component depending on underwriting profitability,” Cooper explained.

“The new capital that we put up or signed up, both from existing and new partners, the terms are broadly consistent. There’s no material change in that. It’s really about the blend of for the full year and how the economics lies. How do you deliver your fixed? It’s steady overall, and then the variable is the profitability.

“Last year we had a 69% combined. Let’s see where we get through the wind season and see how that impacts the P&C component of the ILS fees and quota share partners.”

During the analyst presentation today, Hiscox also disclosed that its ILS fee income fell to $21 million for the first-half of 2025 due to the California wildfire loss event, down from $41 million in H1 2024.

Moreover, Hiscox was also asked about efforts to improve capital efficiency in the second half of 2025, with one analyst questioning whether this would include de-risking within Hiscox Re & ILS.

“In terms of the sort of options that we’ve got, you’ll see from the strength of the balance sheet and the way that we’ve managed that, as Aki has highlighted, very proactive. I’m very pleased with the position that we have going into the second half of the year,” Cooper said.

“Now, of course, we’ve always got active mechanisms to control volatility and manage that. So, you would see that we issued the cat bond at the start of the year. That’s one of the means that we had available, for example,”

Readers may recall, that Hiscox returned to the catastrophe bond market in February with a $200 million Ocelot Re Ltd. (Series 2025-1) transaction, covering named storms and earthquakes in the US and Canada, the company’s second under the Ocelot Re Ltd. special purpose insurer (SPI), which provides the firm with multi-year retrocession reinsurance protection.

Also, during the call, Hiscox Group’s Chief Executive Officer, Aki Hussain stated that market conditions within Hiscox Re & ILS remain attractive, however rates have reduced from the peaks of 2023 and 2024.

“We have selectively deployed modest amounts of additional capital for the mid-year renewals and this, combined with inflows into the ILS funds, and increasing quota share support has enabled our gross and net premiums to increase. And the business has achieved a robust combined ratio of 99.5%, absorbing the significant loss from the wildfires at the start of the year,” Hussain said.