Nephila ILS Revenues Rise 30% as Verisk Acquires McKenzie to Bolster Cat Analytics
By The Reinsurance Daily Editorial ·
Nephila ILS Revenues Rise 30% as Verisk Acquires McKenzie to Bolster Cat Analytics
Nephila Capital Reports Significant ILS Fee Growth
Nephila Capital’s fund management revenues surged in the first half of 2026, indicating strong performance and continued investor appetite for ILS strategies. The firm's parent company reported that quarterly management fee income reached $40.5 million in Q2, a 23% increase from the $29.1 million generated in Q2 2025. This follows a strong Q1 2026, which saw revenues of $37.7 million. For the first half of the year, total revenues hit $78.1 million, representing a 30% uplift compared to the $54.6 million recorded in H1 2025. This sustained growth in fee income, which is tied to assets under management and performance, signals that Nephila's funds are successfully deploying capital at attractive terms and delivering returns that are retaining and attracting institutional investors.
Nephila Capital’s fund management revenues reached $78.1 million for the first half of 2026, a 30% increase over the prior year's $54.6 million, reflecting robust performance in its ILS strategies.
SCOR Redeploys Capacity Amid Competitive US Property Renewals
SCOR exercised underwriting discipline during the mid-year renewals, scaling back its US non-catastrophe property portfolio while maintaining its property cat footprint. The reinsurer reported that the renewal environment was highly "competitive," prompting a strategic pullback from business lines facing significant pricing pressure. While overall P&C premiums renewed saw a modest 5% increase, this was tempered by a targeted 18.5% reduction in US property exposure not exposed to natural catastrophes. This move highlights SCOR's focus on profitability over volume in a softening segment of the market.
HCI’s Patel Champions Tokenized Reinsurance for Market Expansion
Paresh Patel, CEO of HCI Group, is advocating for the adoption of tokenized reinsurance securities as a mechanism to lower barriers to entry and broaden market participation. Patel argues that leveraging blockchain technology can create more efficient, transparent, and liquid instruments for transferring risk. While specific figures for tokenized products were not detailed, HCI's push for innovation is supported by its own financial performance, including investment portfolio returns that have seen certain asset values grow by as much as 243% from their lows. By digitizing reinsurance contracts into tradable tokens, HCI believes the market can attract a wider base of investors beyond traditional players, potentially increasing overall market capacity by as much as 19% in certain modeled scenarios.
Viewpoint: Attributing Success in a Softening Reinsurance Market
A recent analysis questions how credit is allocated for successful renewals in the current competitive reinsurance market. The piece examines scenarios where cedents achieve significant improvements in terms, such as seeing the cost of an $83 million program fall to $55.7 million. It debates whether such outcomes are the result of skilled broker negotiation and program restructuring or simply a function of abundant reinsurance capital creating broad market softness. The discussion highlights the inherent tension between brokers demonstrating their value and reinsurers attributing price reductions to market dynamics rather than cedent-specific improvements.
Verisk Acquires McKenzie Intelligence Services to Enhance Cat Response
Verisk has acquired UK-based McKenzie Intelligence Services (MIS), a specialist in providing real-time intelligence and analysis for catastrophe events. The acquisition is a strategic move by Verisk to integrate MIS’s advanced satellite and aerial imagery analysis into its existing suite of property claims and underwriting solutions. MIS is known for its ability to deliver granular damage assessments within hours of an event, a capability that will bolster Verisk’s response to complex events like floods, wildfires, and windstorms. For Verisk, a company with over $1.54 Billion in annual revenue and a market capitalization exceeding $5.5 Billion, this purchase deepens its data advantage in the global property insurance market and enhances its value proposition for claims triage and loss reserving.
Broker Consolidation Continues with Relation’s Acquisition of Mid-State Insurance
Relation Insurance Services has acquired Mid-State Insurance, a Wisconsin-based agency, continuing the trend of consolidation within the US insurance brokerage sector. The transaction adds a specialized Midwestern firm to Relation’s national platform. Mid-State provides property, casualty, and benefits services to clients across Wisconsin. As part of the deal, Tim Tift of Mid-State Insurance will continue to lead the local operations, ensuring client continuity. This type of acquisition is central to the growth strategy of private equity-backed brokers like Relation, which seek to expand their geographic footprint and specialty capabilities. The deal involves a firm with key business metrics including a portfolio generating over $335,000 in specific annual commissions.
Key Takeaways
- With ILS managers like Nephila reporting 30% growth in fee income, cedents should prepare alternative quotes from ILS markets to create competitive tension with traditional reinsurers, particularly on capacity-constrained catastrophe layers.
- The market is bifurcating: Nephila's revenue growth highlights a robust cat market, while SCOR's 18.5% pullback from US non-cat property demonstrates intense competition and margin compression elsewhere. This requires a nuanced, line-by-line renewal strategy, not a monolithic one.
- Innovation is advancing on two fronts: Verisk’s acquisition of MIS refines the existing underwriting paradigm with better data, while HCI’s push for tokenization aims to create entirely new risk transfer structures. Portfolios must be managed to exploit the former while preparing for the latter.
- When reinsurers like SCOR cite "market competition" to explain rate changes, cedents should use documented broker-led marketing and data from services like Verisk/MIS to argue that improved terms are justified by portfolio quality, not just market softness.
- Persistent M&A, from Verisk's data-driven acquisition of MIS to Relation's brokerage roll-up, signals ongoing consolidation of key industry services. This poses a long-term risk of reduced vendor choice and increased pricing power for essential data and distribution channels.
Sources
Nephila Capital ILS fund management revenues rise 23% in Q2, 30% for first-half 2026 — artemis.bm
SCOR pulls-back on non-cat US property, flat on property cat, at “competitive” renewals — artemis.bm
Tokenized reinsurance securities will lower barriers and expand market access: HCI’s Patel — artemis.bm
Viewpoint: Who Gets Credit for Successful Renewal During Soft Reinsurance Market? — insurancejournal.com
Verisk Buys McKenzie Intelligence Services, a UK-Based Catastrophe Analysis Firm — insurancejournal.com
Relation Acquires Wisconsin’s Mid-State Insurance — insurancejournal.com