Nephila cat rises, AuM is low at $8.5bn, revenue falls on MGA sale –

Markel’s flagship insurance-linked securities (ILS) fund management Nephila Capital has seen another increase in casualty insurance premiums recorded in the second quarter of 2022.

Markel has been increasing the number of small businesses that have been revealed through the insurance vehicles managed by the insurance linked (ILS) Nephila Capital, after a strategic change in which Markel moved all cat businesses to be registered with Nephila.

Back in 2020, Markel announced that Nephila Capital would be the single point of entry for Markel to access financial reinsurance.

As a result, the number of accidents reported to Nephila vehicles has been on the rise.

Markel said yesterday that the programs, which focus on risks that can cause property damage, saw the largest payments written through Markel’s insurers and then paid to Nephila’s Lloyd’s Syndicate 2357 and other recovery vehicles managed by Nephila reached $317.7 million in the second quarter of 2022, a slight increase from Q1, which was much larger than the $186.7 million recorded a year ago.

For the first half, casualty insurance premiums paid to Nephila vehicles through these programs reached $633.3 million, up from $304 million a year earlier.

This all-risk approach to Nephila, sees Markel use all of its insurance to effectively shift risk to vehicles managed by an ILS manager.

It creates a better way to bring risk from the front of the chain to the Nephila ILS system and uses the documentation and management of the Markel project, thus also providing funds to the State National unit, enabling the company to realize synergies. through a new way that Markel can get profit from the notes that have the risk of goods.

Nephila Capital’s total ILS assets under management (AuM) were flat through the second quarter of this year, falling slightly to $8.5 billion on June 30th 2022.

This is a decrease of $ 100 million in the last quarter, which shows that some of the money was there because of the excess of money from the previous years that the damage around the world is still going on.

Markel’s revenue through Nephila Capital’s ILS operations has declined, possibly reflecting the sale of MGA’s, Velocity Risk and Volante Global.

In 2022, net income from unincorporated entities managed by Nephila was $17.5 million and $39.9 million for the second quarter and first half of the year, respectively. A year ago these numbers were $42 million and $70.7 million, respectively.

But, with Nephila Capital now managing the ILS fund, since the sale of the Velocity MGA project, which earned Markel $107.3 million, there is a great deal of cooperation between Nephila and Markel’s business going forward, it seems. .

This is reflected in the amount of written payments from other leading products of Markel, which includes the business written by its writing platform on behalf of Nephila ILS, was $ 41.4 million and $ 214.5 million for the quarter and six months ended June 30 2022, respectively, until now. higher than the $21.8 million and $44 million of previous years.

This is also partially due to the growth of Nephila’s risk payments through Markel, which is part of the most effective mousetrap for disaster risk that the group has developed.

The total amount insured and insured (ILS) in Markel $ 23.2 million for the second quarter, and $ 60.2 million for the first half, which also decreased last year due to the sale of Velocity Risk MGA, but was offset by $ 107.3 million of other benefits provided.

Going forward, it will be interesting to see if the Markel ILS platform will be established, with Nephila as the group’s ILS asset manager.

The growing revenue provided to Nephila through Markel’s infrastructure, including its software and leading business, will provide revenue and if Nephila can return its AuM to grow, we should see revenue grow again, losses permitting, yes.

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