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AlphaCat alone in reporting Q3 2019 AuM rise

AIG’s AlphaCat-managed ILS funds increased assets under management (AuM) by $200mn in the third quarter to reach $4.3bn, while assets at peers Nephila, Hiscox ILS and Mt Logan were down during the same period.

AIG recognised $8mn of net investment income in Q3 from its $146mn holding in AlphaCat, up from the $5mn generated in the year-ago period. Fee income of $8mn was also an increase on the $6mn reported for the third quarter of 2018.

Markel’s Q3 results showed ILS revenues for the period tripled year on year to $54.9mn, as the carrier benefited from its purchase of Nephila in November of last year.

Nephila contributed the bulk of ILS fee income at $42.7mn, but the Bermudian manager’s asset base dipped slightly during the quarter to $10.5bn from $10.6bn at 30 June 2019.

Markel’s other ILS platform Markel Catco, now in run-off, posted a drop in AuM to $3.0bn from $3.1bn.

Alongside the increased income, Markel posted a significant year-on-year uplift in ILS expenses, which reached $46.1mn for Q3 due to the impact of reviews and litigation costs connected to Markel Catco. 

Inquiries being conducted by the US Department of Justice, US Securities and Exchange Commission and Bermuda Monetary Authority into Markel Catco’s loss reserves are ongoing.

Despite the strong third-quarter result, over the nine months to 30 September Markel’s ILS expenses of $159.0mn outweighed its ILS income of $158.6mn.

Hiscox ILS AuM shrank by up to $100mn in the third quarter, from $1.6bn to “above $1.5bn” at 30 September, as the division reported rate rises on loss-affected accounts.

The unit reported AuM of $1.7bn at this point last year.

This came as Hiscox Re ILS lifted gross written premiums by 6.1 percent year on year to $823.6mn for the first nine months of the year. 

The unit said rates were up approximately 6 percent across the portfolio, but added that increases were confined to loss-affected accounts such as retrocession and wildfire liability.

Widespread rate improvement is still hampered by the fluidity of reinsurance capacity available from traditional and alternative sources, Hiscox said.

Mt Logan’s AuM dropped to $934mn at the end of the third quarter, down incrementally from the $940mn it reported at the end of Q2 2019.

The Everest Re sidecar has shrunk by 10.7 percent since the start of 2019, when AuM stood at $1.046bn. 

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