Hiscox ILS raised $300m from investors in H1 2025, lifting ILS AUM to $1.4bn

Hiscox ILS, the insurance-linked securities (ILS) investment focused arm of the Hiscox Group, raised $300 million in capital from new and existing investors through the first-half of 2025, which has lifted its ILS assets under management (AUM) back to $1.4 billion at June 30th.

Having absorbed losses from the California wildfire earlier this year, Hiscox said that its reinsurance and ILS unit, Hiscox Re & ILS, continued to deliver underwriting profits through the second-quarter of the year.

In addition, Hiscox Group CEO Aki Hussain noted that capital is showing greater interest again, saying, “Hiscox Re & ILS is attracting new third-party capacity and delivered net premium growth driven by specialty classes and pro-rata business.”

Gross premiums written grew by 7% to $887.3 million for the Hiscox Re & ILS division across the first-half of 2025, which the company noted was due to, “increased third-party capital support in the form of both quota share partners and alternative capital investors.”

Commenting on the rate environment, Hiscox explained, “Rates reduced by 6% in the period and, like London Market, while rates are falling in aggregate the Hiscox Re & ILS portfolio remains very well rated, having experienced cumulative rate increase of 81% since 2018. Consequently, there remain satisfactory technical margin and selective opportunities to deploy modest amounts of additional capital.

“We are seeing a bifurcation in pricing, with very substantial rate increases on loss-impacted business, and a continuing decline in ‘clean’ business as capital in the market remains more than adequate to meet rising demand. Despite pressure on pricing, terms and conditions have continued to broadly hold.”

For the Hiscox ILS unit, where the ILS funds and related reinsurance investment strategies such as sidecar type structures and segregated accounts are managed, assets under management have fluctuated in recent quarters.

ILS AUM had stood at $1.5 billion for Hiscox ILS at December 31st 2024, but then fell to $1.3 billion by April 1st 2025.

Now, ILS AUM has increased slightly, to $1.4 billion by June 30th 2025, as new inflows of capital entered some of the Hiscox ILS strategies.

The company explained that the ILS AUM fluctuation reflected, “the impact of planned returns of capital to ongoing investors and the California wildfires.”

However, Hiscox also noted that, “This was partially offset by over $300 million of capital raised from new and existing investors in the first half.”

Which is particularly positive for Hiscox ILS, as it’s clear the ILS unit has recovered quickly since the impact of the wildfires in Los Angeles earlier this year and is benefiting from growing third-party investor interest in ILS and reinsurance investment strategies again.

The wildfires left their mark for the Hiscox Re & ILS division though, denting profit and insurance service result for the first-half, with profit falling to $54 million (down on H1 2024’s $86.5 million) and insurance service result coming out at just $8.5 million for H1 2025 (down on the prior year’s $43.5 million), each on the back of a 99.5% combined ratio for H1 due to the California fire events.

Looking ahead, CEO Aki Hussain commented, “Our priority remains profitable growth. We have the strategy, capabilities and balance sheet to capture the vast opportunities in each of our markets, enabling us to get ahead of market trends as they develop.

“In Hiscox Re & ILS, the majority of this year’s premium was written as usual in the first half, and a larger share will be earned in the second half, consistent with the risk profile of the business. We go into the second half of the year well capitalised and with an attractive portfolio of business.”

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