Property cat to remain very attractive, incremental capital deployment to continue: Hiscox CFO

Hiscox is expecting property catastrophe reinsurance to remain a “very attractive” market in 2025, according to group CFO Paul Cooper, who speaking this morning said the firm expects to continue incrementally deploying capital to that space.

Within the Hiscox Re & ILS division of the company, this will likely include deploying incremental capital from the Hiscox ILS fund strategies as well.

As we reported earlier, the insurance-linked securities (ILS) business Hiscox ILS sees a robust pipeline of investor opportunities for the coming months.

Speaking during an analyst call on Hiscox’s third-quarter results, group CFO Paul Cooper explained, “The reinsurance market has remained disciplined throughout the year, with rates flat on average across our books and attachment points and T&C broadly holding firm.

“The active natural catastrophe environment, including Helene and Milton, looks likely to arrest or slow the reduction of rates forecast for 1/1. Hiscox ILS AUM was $1.5 billion at the 30th of September 2024 and we see a robust pipeline of potential investors ahead of the 2025 renewal.”

Cooper went on to highlight the opportunity to deploy more capital, while property catastrophe reinsurance market conditions remain so attractive.

He explained, “If I talk about growth, with Re and ILS, what you see, given the cat activity of Q3 and going into Q4 with Milton, is, I think rate was expected to come off a bit, sort of post Monte Carlo, and then, essentially, since those events, we’ve seen the expectation that rates will remain firm, and that’s against the backdrop of ’23 being the best conditions in, you know, 10, 20 years, and ’24 being the second best.

“So, if that prevailed into 2025 we see the conditions for property cat remaining very attractive and we expect to incrementally deploy capital into that space, consistent with what we’ve done over the past several years.”