Hiscox Capital Partners, the dedicated unit for insurance-linked securities within Hiscox Re, has witnessed a remarkable surge in its assets under management (AUM), reaching an unprecedented $3.1 billion by the third quarter of 2026. This impressive expansion, which includes both ILS fund investments and quota-share partnerships, represents a $200 million increase in the latest quarter alone, primarily fueled by substantial retained earnings.
Hiscox Capital Partners Achieves Record Growth in ILS Assets
As of October 1st, 2026, Hiscox Capital Partners' insurance-linked securities (ILS) assets under management (AUM) reached a new peak of $3.1 billion. This substantial figure marks a 139% increase compared to the $1.3 billion reported on September 30th, 2025. The growth trajectory for 2026 has been particularly steep, with AUM climbing by an impressive 107% from $1.5 billion at the beginning of the year. The company's third-quarter trading statement revealed that this $200 million quarterly increase from July 1st was largely due to strong retained earnings, benefiting from a period of low natural catastrophe losses.
The firm further clarified that approximately two-thirds of the $3.1 billion ILS AUM is allocated to private ILS strategies, with the remaining portion invested in catastrophe bond funds. The favorable natural catastrophe loss environment has played a crucial role in enhancing the returns generated by these strategies, directly contributing to the elevated AUM. Hiscox emphasized the robust demand from third-party capital providers, particularly from quota-share partners, underscoring confidence in its underwriting approach, strong portfolio performance, and enduring partnership models.
Earlier in the year, Hiscox secured a significant US $1 billion mandate from TCorp, an Australian institutional investor and sovereign investment manager for the New South Wales public sector. This mandate substantially boosted the firm's ILS AUM, aligning with the reported $1 billion in inflows during the first quarter of 2026, predominantly directed towards its catastrophe bond fund strategies. The success in fundraising extends further back, with $330 million in ILS inflows recorded throughout 2025.
Aki Hussain, CEO of Hiscox Ltd, highlighted in the recent trading statement that the company's major business segments, including the reinsurance arm Hiscox Re, are maintaining stringent underwriting discipline amidst competitive market conditions. He noted a deliberate strategy of avoiding underpriced business while expanding into attractive new specialty markets. Hiscox Re strategically deployed additional third-party capital during mid-year renewals, concurrently reducing net exposures to natural catastrophe risks, including retrocessional coverage. The reinsurance business saw a 4.5% increase in gross insurance contract written premium (ICWP) in the third quarter, while net premiums decreased by 7.5%, reflecting careful cycle management. The company has actively curtailed its net natural catastrophe exposure, especially in retro, which is now 36% below peak hard-market levels, while selectively supporting core cedants and pursuing new business in pro-rata property and specialty lines. Despite a 14% decline in rates over the first nine months, they remain 55% above 2018 levels, with 83% of the portfolio rated adequate or better at mid-year. The expanding AUM in the ILS fund and quota-share businesses, including sidecars, provides Hiscox with enhanced flexibility in capital deployment and cycle management.
This impressive financial performance by Hiscox Capital Partners serves as a compelling indicator of the growing appeal and resilience of the insurance-linked securities market. The ability to attract and effectively deploy significant third-party capital, especially during periods of benign natural catastrophe activity, positions the firm advantageously. For investors, this demonstrates the potential for consistent returns within the ILS space, while for the wider reinsurance sector, it highlights the increasing integration of alternative capital as a strategic tool for risk management and growth. The focus on underwriting discipline and strategic market expansion, as articulated by Hiscox's leadership, offers a valuable blueprint for navigating dynamic market environments and fostering long-term success in the evolving landscape of global reinsurance.
