Fidelis reports 25% rise in GPW and CoR of 92.7% in Q2’24

Bermuda-based Fidelis Insurance Holdings Limited has reported net income of $53.7 million for the second quarter of 2024, despite catastrophe and large losses rising 113% year-on-year as the combined ratio weakened by 10.7 percentage points to 92.7%.

The insurer and reinsurer’s Q2’24 net income decreased by 36% year-on-year, as operating income fell 26% to $63 million.

Group-wide, gross premiums written (GPW) rose 25% to almost $1.2 billion and net premiums earned increased by 17% to $501.1 million.

Catastrophe and large losses increased from $85.2 million in Q2’23 to $181.2 million in Q2’24, the majority of which, $119.5 million, hit the specialty segment, driven by events in the Property D&F line of business, the largest of which was the catastrophic tornados in Oklahoma and surrounding States together with other smaller losses.

Somewhat offsetting the rise in cat and large losses, Fidelis has reported net favorable prior-year reserve development of $68.6 million, up from just $2.4 million last year.

Fidelis’ underwriting result weakened but remained solid in Q2’24 at $36.7 million, compared with $77.5 million a year earlier, as the combined ratio moved from 82% to 92.7%.

Across the group, net investment income also rose year-on-year to $46 million, up 68% on last year’s $27.3 million.

A look at the firm’s results by segment, starting with reinsurance, reveals growth in the segment’s underwriting profit of $21.4 million to $40.5 million. Reinsurance GPW rose by over $100 million to $346.1 million, driven by rate increases as well as new business, while net premiums earned increased to $58.9 million as a result of earnings from higher net premiums written in the current year periods.

Within reinsurance, catastrophe and large losses totalled $2.1 million, down from last year’s $9.3 million, while the segment also booked $11.7 million of favorable prior year development.

In Fidelis’s specialty business, GPW increased by more than $99 million to $756.5 million in Q2’24, which the company attributes to growth from new business and increased rates in Property and Property D&F lines of business, partially offset by a decrease in Aviation and Aerospace lines. Net premiums earned rose by $42 million to $349.2 million due to earnings from higher net premiums written in the current and prior year periods.

The specialty segment’s underwriting profit came down from $92.3 million to $68.9 million as catastrophe and large losses increased to $119.5 million from $72.1 million.

Turning to the re/insurer’s bespoke business, and GPW increased from $54.7 million to $90.6 million, primarily driven by new business in the Credit and Political Risk lines. Net premiums earned rose slightly to $93 million. However, the underwriting result here also weakened year-on-year, from $37.3 million to $26.7 million, as large losses increased by $55.8 million to $59.6 million, related to intellectual property losses in the Credit & Political Risk line of business.

Dan Burrows, Group Chief Executive Officer of Fidelis Insurance Group, commented: “As we mark our first anniversary as a public company, we are proud to have built a strong team, who are focused on realizing the value of our business. Our position as a market leader focused on short-tail specialty lines is enabling us to deliver attractive growth and create value for our shareholders.

“We are well positioned to quickly respond to market conditions and continue to leverage our lead positioning to capitalize on attractive rates, terms and conditions. In tandem with underwriting, active capital management remains a cornerstone of our strategy and to that end, we are pleased to announce our Board has approved a new share repurchase program of $200 million.

“In what remains one of the best markets we have seen in recent history, I am excited for the opportunities we see ahead.”

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