Swiss Re Insurance-Linked Fund Management

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Risk / return of property “as compelling as ever”. Nephila capital raising ongoing: Markel’s Noble


Jeremy Noble, President of Insurance at Markel Corporation, said during the re/insurer’s Q1 2023 earnings call yesterday that the combination of the current rate environment in the property sector and its own initiatives, points to a compelling risk / return proposition as the firm continues to work hard to raise capital across its Nephila Capital strategies.

nephila-capital-logoYesterday, in reporting its first quarter 2023 results, Markel revealed that Nephila, one of the world’s largest insurance-linked securities (ILS) fund management operations, saw a dip in assets under management (AUM) to $7.2 billion as at the end of the quarter.

The parent also reported that gross premiums written through its program services and other fronting platforms on behalf of Nephila’s ILS strategies declined from $315.6 million in Q1 2022 to $236.9 million in Q1 2023.

“Within the Nephila ILS operations, revenues and expenses for the year were down to the impact of selling our Velocity and Volante MGA operations last year, as well as from the impact of lower assets under management, which stands at $7.2 billion at the end of the period,” said Noble. “As a reminder, we realised a gain of $107 million in the first quarter last year related to the sale of a majority stake in our Velocity MGA operations.”

Markel’s Nephila ILS operation includes three strategies: property catastrophe, climate, and specialty lines, and while the current results of the ILS fund manager reflect the lower AuM, which came down by $200 million from January 2023, Noble asserted that the carrier “continues to work hard to raise capital” across all of the strategies.

Expanding on this, Noble provided an optimistic outlook on the property segment in particular.

“Current pricing environment in property, when combined with our initiatives around transparency of risk assessment and portfolio construction, leads us to conclude that the risk / return proposition is as compelling as it has ever been,” he said.

According to Noble, the team at Nephila and within State National program services are focused on capturing market opportunities, as they continue to build their value proposition to clients and partner with the wider Markel underwriting units to capitalise on synergies.

Providing more colour on the program services and other fronting operations, Noble explained that, “The good news is we continue to see a strong pipeline of opportunities in the current market and our ability to handle more complex transactions in this space differentiates us from competitors.”

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