Hiscox Capital Partners, the dedicated unit for insurance-linked securities (ILS) and quota-share partnerships within Hiscox Re, has successfully attracted considerable new capital from external investors in recent months. As a result, its overall ILS assets under management (AUM) reached an impressive $2.9 billion by July 1, 2026.
This growth represents a remarkable 93% increase in Hiscox Capital Partners' ILS assets since the beginning of 2026, when the figure stood at $1.5 billion. The unit's previous report indicated $2.4 billion in assets as of April 1, highlighting consistent expansion.
Significant Capital Inflows Boost Performance
Hiscox Capital Partners experienced a substantial influx of third-party capital, particularly boosted by a significant US $1 billion mandate secured from TCorp, Australia’s sovereign investment manager for the New South Wales public sector. This major investment, alongside other capital injections, has been a key driver in the success of Hiscox’s ILS strategies, leading to a significant increase in third-party capital and ILS fee income.
In the first half of 2026, gross inflows into Hiscox’s ILS strategies totaled $1.4 billion, with $1 billion specifically directed towards its catastrophe bond funds. This strong performance translated into soaring fee income, reaching $53 million for the first half of the year, a substantial increase from $21 million in the same period of 2025. Although the previous year's fee income was impacted by California wildfires, the current year's figures demonstrate robust growth.
Strategic Management Amidst Softening Reinsurance Market
CEO Aki Hussain noted that the inflows of third-party capital into quota share arrangements and ILS funds significantly contributed to a 6.4% increase in Hiscox Re’s insurance contract written premium during the first half of the year, supporting the growth of its reinsurance business. However, the reinsurance market has experienced a softening trend, with rates falling by 16% in the period and some modest adjustments in terms and conditions.
Despite the softened market, Hussain emphasized Hiscox’s disciplined and proactive cycle management. He stated that 83% of the portfolio remains adequately rated, with rates having increased by 54% since 2018. Hiscox Re is strategically managing its net natural catastrophe exposures by focusing on high-quality cedants and declining more opportunistic business that is less attractive in a softening market. The increased availability of third-party capital through ILS funds, sidecars, and quota share arrangements provides Hiscox with greater flexibility in deploying its own capital and distributing risk, enabling it to navigate the current market environment effectively.