Hiscox’s insurance-linked securities assets under management reached a record US$3.1 billion as of October 1, more than doubling from US$1.5 billion at the start of the year, as the specialty reinsurer simultaneously reduced its net catastrophe exposure to its lowest level since the hard market peak.
The combination of growing third-party capital and reducing its own net skin in the game reflects a deliberate strategic shift at Hiscox Re, one that has gathered pace through 2026 and carries implications for how capacity flows in the Asia-Pacific catastrophe market.
The growth in insurance-linked securities assets under management has been rapid. Hiscox Capital Partners, the division managing third-party capital within Hiscox Re, started 2026 with US$1.5 billion in assets under management. By April 1, it had reached US$2.4 billion, following approximately US$1 billion in new investor inflows. By July 1, it stood at US$2.9 billion, and by October 1 it hit US$3.1 billion, with the latest increase driven by strong retained earnings following benign loss experience in the third quarter.
Around two-thirds of those assets are held in private ILS structures, with the remainder in catastrophe bond funds. Hiscox said it continues to see robust demand from third-party capital providers, particularly quota share partners, citing confidence in its underwriting strategy and long-term partnership approach.
As Hiscox Capital Partners reported at the half-year, the broader catastrophe bond market also had a record first half in 2026, with close to US$18 billion of issuance. Hiscox’s ILS growth sits within that broader wave of investor appetite for catastrophe risk as an asset class.
The expansion in third-party capital is running alongside a deliberate reduction in Hiscox Re’s net catastrophe exposure. Retrocession positions are now 36% below peak hard-market levels. Net insurance contract written premiums in Hiscox Re declined by 7.5% to US$486.1 million for the nine months to September 30, even as gross premiums grew 4.5% to US$1.13 billion. The gap between gross and net reflects how much of the risk Hiscox is ceding or passing to third-party capital rather than retaining on its own balance sheet.
Rates in Hiscox Re declined 14% over the first nine months of the year, though they remain 55% above 2018 levels. Eighty-three percent of the portfolio was rated adequate or better at the half-year. Loss experience in Q3 was benign on the natural catastrophe side, which contributed to the retained earnings that drove the latest ILS AUM increase.
Across the wider group, insurance contract written premiums grew 9.5% to US$4.44 billion. The retail segment, which includes Hiscox’s operations in the UK, Europe and the US, grew 9.1% in constant currency, with volume rather than rate increases driving most of the expansion. In the London Market, cycle management actions in major property, upstream energy and power and renewables reduced growth by nine percentage points, as rates across those lines continued to soften.
On the technology side, Hiscox disclosed that its AI submission-to-quote tool has cut turnaround times by approximately 75% in terrorism and architects and engineers lines, with wider rollout across Retail under way. A new Group Chief Information Officer, Phil Withey, was appointed to lead the next phase of AI integration, having previously driven the expansion of AI-augmented underwriting in the London Market.
CEO Aki Hussain said the group remains on track to deliver 9% constant currency growth for the full year, with the change programme expected to generate US$75 million of profit and loss benefit in 2026.
