Hannover Re collateralised fronting grows 10% in 2026. HCP plans two ILS fund strategies

Hannover Re has continued to expand its collateralised fronting business this year, growing it 10% so far in 2026 according to executives from the company. While we’ve also learned that under its Hannover Re Capital Partners unit two insurance-linked securities fund strategies are planned for launch.

The global reinsurance firm continues to expand its activities in the insurance-linked securities (ILS) market, among which its position as a leading-provider of collateralised fronting capabilities remains a growth area.

Patrick Horstmann, Head of ILS at Hannover Re, commented on the reinsurer’s activities in the sector, telling us, “Demand remains strong from both investors and cedants, reflecting the value ILS creates for the industry. We remain fully committed to strategically expand our capabilities across the full spectrum of ILS solutions which are diversifying our business model while continuing to explore innovative structures.

“We have deliberately built a broad ILS platform to provide structures tailored to the specific objectives of cedants and investors which was complemented by the set-up of Hannover Re Capital Partners end of last year.

“Today, we offer the full spectrum of ILS solutions with collateralised fronting being the major and a further growing part of our ILS strategy which we grew by more than 10% in 2026. We continue to invest in that area with the aim to continuously improve the services provided to our customers.

“Our other ILS offerings are catastrophe bonds transformer services, actuarial structuring for ILS Life transactions, investments in cat bonds or in private reinsurance strategies.”

The collateralised reinsurance fronting offering remains a key driver of expansion in insurance-linked securities for Hannover Re, presumably driving meaningful fee income for the reinsurance company as it continues to be a key service-provider to investors and ILS market participants.

Hannover Re also remains very active in the catastrophe bond issuance marketplace, as seen recently with the successful pricing of a $450 million Acorn Re Ltd. Series 2026-1 parametric US earthquake offering.

In addition, Michael Eberhardt, Chief Executive Officer at Hannover Re Capital Partners, provided us with an update on activities at the reinsurers Bermuda-based insurance-linked securities (ILS) platform.

“Hannover Re Capital Partners had a successful start and we are very pleased with the progress achieved so far,” Eberhardt explained.

“Through HCP, investors gain access to Hannover Re’s underwriting expertise, risk assessment capabilities and long-standing reinsurance market relationships.

“We are expanding our infrastructure to allow different forms of partnerships and will launch a fund with specific strategies for 2027. Additionally, investments into the team will further strengthen HCP and position us well to support future growth in a scalable but disciplined way.”

We had previously revealed in our reporting that Hannover Re Capital Partners had established new fund infrastructure in Bermuda to support ILS investment options for clients.

The company has registered a fund structure and a special purpose insurer (SPI), Hannover Re Capital Partners Fund Ltd. which we understand to be a co-mingled investment fund structure and Hannover Re Capital Partners SPI Ltd.which will act as a transformer for executing on risks for HCP strategies to allocate capital to and invest in.

We’ve now learned some additional details from sources about the Hannover Re Capital Partners co-mingled ILS fund plans.

Two ILS fund strategies are currently in the planning and implementation phase, although we understand that the necessary regulatory approval is still pending.

We are told by sources that the first HCP ILS fund strategy will incorporate a blended portfolio of risk-remote private reinsurance opportunities and catastrophe bonds, designed to manage through the cycle and allow for deployment of capital to the most attractive segments at any point in time.

The second ILS fund strategy from HCP is said to have a higher-return target, being closer to the risk and focused on private reinsurance investments, with more flexibility across the risk spectrum to provide enhanced return potential.

These two insurance-linked securities fund strategies will offer investors distinct access points through which to access returns from across the reinsurance market, it seems, broadening the Hannover Re Capital Partners offering.

Also read other recent articles about Hannover Re: 

– Hannover Re sees ILS capital as sustainable reinsurance addition, source of growth: Horstmann.

– Hannover Re’s E+S Rück sees more intense catastrophe risk competition, ILS options for clients.

– Third-party capital more than just complementary capacity for Hannover Re: Althoff.

– Hannover Re Capital Partners establishes new Bermuda fund structure and SPI.