Nephila Capital ILS fund management revenues rise 59% for Markel in Q1 2026

Nephila Capital’s insurance-linked securities (ILS) fund management revenues reported within parent Markel’s results rose by an impressive 59% year-on-year, to reach $40.5 million in the first-quarter of 2026.

It marks another meaningful step up in the fund management revenues generated by Nephila Capital’s ILS management business in the first-quarter of the year.

Looking back, Nephila Capital’s ILS investment management business generated $19.2 million in fund management revenues in Q1 2024, which marked a doubling of the level earned in the year prior to that.

The Nephila fund management revenues figure then rose by 33% for Q1 2025, reaching $25.5 million.

Now, the figure has risen by a further 59% for Q1 2026, to reach $40.5 million.

The continuing expansion of the insurance and reinsurance premium base underwritten by the Nephila Capital entities has been driving these increases over-time, especially as the ILS manager has been able to write more business without dramatically increasing its managed capital base, thanks to the way it leverages the infrastructure it has created and the synergies it has within the Markel Group.

In full-year 2025, Markel fronted 42% more in gross premiums for Nephila entities and ILS structures, as the manager expanded its stature further in the reinsurance market.

Nephila Capital’s third-party investor assets under management reached $7.7 billion at the start of this year.

As we’ve highlighted before, the ILS manager is now able to originate far more in premiums per-dollar of assets these days, thanks to the efficiency of the risk origination infrastructure it now utilises and the way that can lever its capital base.

However, market conditions are also a consideration and Markel has reported that in the first-quarter of 2026 gross premiums written through its fronted programs and ceded to Nephila’s reinsurance structures declined to $267.4 million, from $389.3 million in Q1 2025.

Markel stated the cause of the decline as being, “Lower premiums on our property catastrophe programs with Nephila driven by the impact of rate decreases, which is reflective of the broader property market.”

Finally, the reinsurance recoverable that Markel reports on its balance sheet as due from Nephila Capital’s reinsurance entities has continued to decline, a signal of the commutation of certain prior year contracts in the second-half of 2025 and as any losses have been realised and accounted for, which cleans up prior year effects and reduces any drag.

Markel had reported the reinsurance recoverables on its balance sheets due from Nephila’s reinsurance entities at $968.9 million as of the end of 2024, which had fallen to $604.3 million by the end of the third-quarter last year.

The reinsurance recoverables due to Markel from Nephila reinsurers fell again to $496 million by the end of 2025 and has now declined even further to $267.6 million by March 31st 2026.

The fund management revenues increase for the first-quarter implies strong fee income generated by the Nephila Capital ILS business in the quarter and while rate declines are now a factor in reducing premium volumes, the ILS managers infrastructure and integration with Markel should mean strong revenues continue, dependent on major catastrophe loss activity that occurs.

View information on dedicated ILS fund managers, as well as reinsurers offering ILS style investment opportunities, in our Insurance-Linked Securities Investment Managers & Funds Directory.