Markel fronts 42% more premiums for Nephila Capital in 2025, fee income lifts revenues

Markel Group has attributed meaningful growth in fronting by its insurance division in 2025 to the premium growth of property catastrophe programs for its insurance-linked securities management unit Nephila Capital, while ILS fee income also increased for the year.

Nephila Capital’s property catastrophe and specialty programs have been growing rapidly in recent years, with parent Markel utilising its insurance infrastructure to channel risks through to Nephila programs supported by its range of ILS funds and third-party investor capital.

A year ago, Markel reported that premiums ceded to Nephila reinsurance structures rose by 55% year-on-year, with the total premium volume fronted for the ILS operation increasing to more than $1.306 billion for full-year 2024.

Now, in Markel’s latest results announced late yesterday, the company said, “The increase in fronting gross premium volume was driven by growth within our property catastrophe programs with Nephila and resulted in an increase in services and other revenues and income.”

For 2025, Markel reported gross fronting premium volumes reached almost $1.855 billion for the year, which it cites as a 42% increase on the $1.306 billion of 2024.

Which suggests these figures are reflective of the premium volumes ceded through to Nephila Capital managed reinsurers, which in turn pass on the catastrophe reinsurance as investments to the manager’s ILS strategies and funds.

It’s another year of really significant expansion in the amount of catastrophe risk flowing through the Markel machine to Nephila and its investors and as we’ve been reporting, the ILS manager has been able to originate far more in premiums with less assets thanks to the efficiency of the risk origination infrastructure it now leverages.

Notably, these fronted cat program premiums that flow to Nephila Capital structures have been rising meaningfully for a number of years now, having increased from $554 million in 2022, to $841 million in 2023, then over $1.3 billion in 2024 and now more than $1.85 billion in 2025.

The returns of the risk business underwritten flows to the benefit of the third-party investors backing the Nephila ILS structures, while Markel itself also generates ceding fee income as well.

On fee income, Markel said in its results, “Organic revenue growth was primarily attributable to the impact of performance fees earned in 2025 and a higher effective management fee rate for our insurance-linked securities investment management services, as well as higher premium volume within our program services and lender services offerings.”

Which suggests that the ILS fund management fee income that Nephila Capital generates towards the Markel result has also increased year-on-year.

Recall that, Nephila Capital’s assets under management (AUM) reached $7.6 billion as of September 30th 2025, an increase of $600 million over the prior twelve months.

Those higher assets under management being deployed through risk origination infrastructure that allows every dollar to source more units of risk to derive returns from, will also have been delivering benefits to the third-party investors, as well as to Markel in the fee income it generates.

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