Second Quarter 2024
Highlights:
- Gross premiums written of $1.2 billion; growth of 24.7% from
the second quarter of 2023
- Combined ratio of 92.7%
- Annualized operating return on opening common equity
(“Operating ROE”) of 10.0% and annualized operating return on
average common equity (“Operating ROAE”) of 10.0%
- Net income of $53.7 million, or $0.46 per diluted common
share and operating net income of $63.0 million, or $0.54 per
diluted common share
- Book value per diluted common share was $21.71 at June 30,
2024
- Repurchased 1,932,418 shares for $33.7 million
Half Year 2024
Highlights:
- Gross premiums written of $2.7 billion; growth of 22.9% from
first half of 2023
- Combined ratio of 89.3%
- Annualized Operating ROE of 12.2% and annualized Operating
ROAE of 12.0%
- Net income of $134.9 million, or $1.14 per diluted common
share and operating net income of $150.2 million, or $1.27 per
diluted common share
- Repurchased 2,290,020 shares for $38.7 million
Fidelis Insurance Holdings Limited (“Fidelis” or “FIHL” or “the
Group”) (NYSE: FIHL) announced today its financial results for the
second quarter ended June 30, 2024.
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.”
Second Quarter Consolidated
Results
- Net income for the second quarter of 2024 was $53.7 million, or
$0.46 per diluted common share. Operating net income was $63.0
million, or $0.54 per diluted common share.
- Underwriting income for the second quarter of 2024 was $36.7
million and the combined ratio was 92.7%, compared to underwriting
income of $77.5 million and a combined ratio of 82.0% for the
second quarter of 2023.
- Net favorable prior year loss reserve development for the
second quarter of 2024 was $68.6 million compared to $2.4 million
in the prior year period.
- Catastrophe and large losses for the second quarter of 2024
were $181.2 million compared to $85.2 million in the prior year
period.
- Net investment income for the second quarter of 2024 was $46.0
million compared to $27.3 million in the prior year period.
Purchased $677.7 million of fixed income securities at an average
yield of 5.2% and had sales of $220.4 million at an average yield
of 1.6%.
- Operating ROE of 2.5%, or 10.0% annualized, in the quarter
compared to 4.5%, or 18.0% annualized in the prior year
period.
- Operating ROAE of 2.5%, or 10.0% annualized, in the quarter
compared to 4.4%, or 17.6% annualized in the prior year
period.
- Book value per diluted common share was $21.71 at June 30, 2024
(dilutive shares at June 30, 2024 of 540,256).
Half Year 2024 Consolidated
Results
- Net income for the six months ended June 30, 2024 was $134.9
million, or $1.14 per diluted common share. Operating net income
was $150.2 million, or $1.27 per diluted common share.
- Underwriting income for the six months ended June 30, 2024 was
$105.9 million and the combined ratio was 89.3%, compared to
underwriting income of $158.1 million and a combined ratio of 80.6%
for the six months ended June 30, 2023.
- Net favorable prior year loss reserve development of $135.6
million compared to $4.5 million in the prior year period.
- Catastrophe and large losses for the six months ended June 30,
2024 were $284.2 million compared to $107.4 million in the prior
year period.
- Net investment income of $87.0 million compared to $47.7
million in the prior year period. Purchased $1.1 billion of fixed
income securities at an average yield of 5.1% and had sales of
$429.0 million at an average yield of 1.2%.
- Operating ROE of 6.1%, or 12.2% annualized, in the six months
ended June 30, 2024 compared to 9.6%, or 19.2% annualized in the
prior year period.
- Operating ROAE of 6.0%, or 12.0% annualized, in the six months
ended June 30, 2024 compared to 9.1%, or 18.2% annualized in the
prior year period.
The following table details key financial indicators in
evaluating our performance for the three and six months ended June
30, 2024 and 2023:
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
Change
2024
2023
Change
($ in millions, except for per
share data)
Net income
$
53.7
$
83.9
(36
)%
$
134.9
$
1,816.5
(93
)%
Operating net income(1)
63.0
85.3
(26
)%
150.2
172.8
(13
)%
Gross premiums written
1,193.2
957.2
25
%
2,707.5
2,202.5
23
%
Net premiums earned
501.1
429.1
17
%
989.1
815.1
21
%
Catastrophe and large losses
181.2
85.2
113
%
284.2
107.4
165
%
Net favorable prior-year reserve
development
68.6
2.4
2,758
%
135.6
4.5
2,913
%
Net investment income
$
46.0
$
27.3
68
%
$
87.0
$
47.7
82
%
Combined ratio
92.7
%
82.0
%
10.7 pts
89.3
%
80.6
%
8.7 pts
Operating ROE(1)
2.5
%
4.5
%
(2.0) pts
6.1
%
9.6
%
(3.5) pts
Operating ROAE(1)
2.5
%
4.4
%
(1.9) pts
6.0
%
9.1
%
(3.1) pts
Earnings per diluted common share
$
0.46
$
0.76
(39
)%
$
1.14
$
16.39
(93
)%
Operating EPS(1)
$
0.54
$
0.77
(30
)%
$
1.27
$
1.56
(19
)%
(1) Operating net income, Operating ROE,
Operating ROAE and Operating EPS are non-GAAP financial measures.
See definition and reconciliation in “Non-GAAP Financial
Measures.”
Segment Results
Specialty Segment
The following table is a summary of our Specialty segment’s
underwriting results:
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
Change
2024
2023
Change
($ in millions)
Gross premiums written
$
756.5
$
657.3
$
99.2
$
1,790.5
$
1,491.4
$
299.1
Reinsurance premium ceded
(331.9
)
(195.5
)
(136.4
)
(738.2
)
(536.6
)
(201.6
)
Net premiums written
424.6
461.8
(37.2
)
1,052.3
954.8
97.5
Net premiums earned
349.2
307.2
42.0
701.4
573.4
128.0
Losses and loss adjustment expenses
(189.1
)
(137.4
)
(51.7
)
(363.6
)
(278.1
)
(85.5
)
Policy acquisition expenses
(91.2
)
(77.5
)
(13.7
)
(191.0
)
(143.8
)
(47.2
)
Underwriting income
$
68.9
$
92.3
$
(23.4
)
$
146.8
$
151.5
$
(4.7
)
Loss ratio
54.2
%
44.7
%
9.5 pts
51.8
%
48.5
%
3.3 pts
Policy acquisition expense ratio
26.1
%
25.2
%
0.9 pts
27.2
%
25.1
%
2.1 pts
Underwriting ratio
80.3
%
69.9
%
10.4 pts
79.0
%
73.6
%
5.4 pts
For the three months ended June 30, 2024, our GPW increased
primarily driven by growth from new business and increased rates in
our Property and Property D&F lines of business partially
offset by a decrease in our Aviation and Aerospace line of
business.
For the six months ended June 30, 2024, our GPW increased
primarily driven by growth from new business and improved rates in
our Property, Property D&F and Marine lines of business,
partially offset by a decrease in our Aviation and Aerospace line
of business.
For the three and six months ended June 30, 2024, our NPE
increased due to earnings from higher net premiums written in the
current and prior year periods.
For the three and six months ended June 30, 2024, our policy
acquisition expense ratio increased due to changes in the mix of
business written and ceded, and commissions earned from reinsurance
partners.
Our underwriting ratio in the Specialty segment increased by
10.4 points and 5.4 points compared to the three and six month
prior year periods, respectively, driven primarily by an increase
in the loss ratio.
The following table is a summary of our Specialty segment’s
losses and loss adjustment expenses:
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
Change
2024
2023
Change
($ in millions)
Attritional losses
$
83.7
$
60.4
$
23.3
$
194.7
$
152.2
$
42.5
Catastrophe and large losses
119.5
72.1
47.4
217.4
90.5
126.9
(Favorable)/adverse prior year
development
(14.1
)
4.9
(19.0
)
(48.5
)
35.4
(83.9
)
Losses and loss adjustment expenses
$
189.1
$
137.4
$
51.7
$
363.6
$
278.1
$
85.5
Loss ratio - attritional losses
24.0
%
19.7
%
4.3 pts
27.8
%
26.5
%
1.3 pts
Loss ratio - catastrophe and large
losses
34.2
%
23.4
%
10.8 pts
30.9
%
15.8
%
15.1 pts
Loss ratio - prior accident years
(4.0
)%
1.6
%
(5.6) pts
(6.9
)%
6.2
%
(13.1) pts
Loss ratio
54.2
%
44.7
%
9.5 pts
51.8
%
48.5
%
3.3 pts
For the three months ended June 30, 2024, our loss ratio in the
Specialty segment increased by 9.5 points. For the six months ended
June 30, 2024, our loss ratio in the Specialty segment increased by
3.3 points.
The attritional loss ratio in the three months and six months
ended June 30, 2024, increased by 4.3 points and 1.3 points,
respectively, compared to the prior year periods due to a higher
level of small losses in the current year period.
The catastrophe and large losses in the three months ended June
30, 2024 were driven by events in our Property D&F line of
business, the largest of which was the catastrophic tornados in
Oklahoma and surrounding States together with other smaller
losses.
The catastrophe and large losses in the six months ended June
30, 2024 related to losses from the Baltimore Bridge collapse in
our Marine line of business, severe convective storms in the
Property D&F line of business, together with other smaller
losses in various lines of business. This compared to prior year
period catastrophe and large losses related to our Aviation and
Aerospace line of business which included losses related to the
Sudan conflict, and our Property D&F line of business where we
experienced losses from severe convective storms in the U.S.
The favorable prior year development for the three and six
months ended June 30, 2024 was driven primarily by better than
expected loss emergence in the Marine and Property D&F lines of
business.
Bespoke Segment
The following table is a summary of our Bespoke segment’s
underwriting results:
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
Change
2024
2023
Change
($ in millions)
Gross premiums written
$
90.6
$
54.7
$
35.9
$
244.1
$
205.5
$
38.6
Reinsurance premium ceded
(62.7
)
(24.6
)
(38.1
)
(163.4
)
(93.7
)
(69.7
)
Net premiums written
27.9
30.1
(2.2
)
80.7
111.8
(31.1
)
Net premiums earned
93.0
90.4
2.6
182.9
181.6
1.3
Losses and loss adjustment expenses
(32.9
)
(16.2
)
(16.7
)
(56.3
)
(29.3
)
(27.0
)
Policy acquisition expenses
(33.4
)
(36.9
)
3.5
(63.7
)
(70.2
)
6.5
Underwriting income
$
26.7
$
37.3
$
(10.6
)
$
62.9
$
82.1
$
(19.2
)
Loss ratio
35.4
%
17.9
%
17.5 pts
30.8
%
16.1
%
14.7 pts
Policy acquisition expense ratio
35.9
%
40.8
%
(4.9) pts
34.8
%
38.7
%
(3.9) pts
Underwriting ratio
71.3
%
58.7
%
12.6 pts
65.6
%
54.8
%
10.8 pts
For the three and six months ended June 30, 2024, our GPW
increased primarily driven by new business in our Credit and
Political Risk line of business.
For the three and six months ended June 30, 2024, our NPE
remained consistent compared to the prior year periods.
Our policy acquisition expense ratio for the three and six
months ended June 30, 2024 decreased due to changes in the mix of
business written and ceded, and commissions earned from reinsurance
partners.
Our underwriting ratio in the Bespoke segment increased by 12.6
points and 10.8 points for the three and six months ended June 30,
2024, respectively, from the prior year periods, driven by an
increase in our loss ratio.
The following table is a summary of our Bespoke segment’s losses
and loss adjustment expenses:
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
Change
2024
2023
Change
($ in millions)
Attritional losses
$
16.1
$
19.9
$
(3.8
)
$
43.6
$
38.8
$
4.8
Large losses
59.6
3.8
55.8
63.8
6.8
57.0
Favorable prior year development
(42.8
)
(7.5
)
(35.3
)
(51.1
)
(16.3
)
(34.8
)
Losses and loss adjustment expenses
$
32.9
$
16.2
$
16.7
$
56.3
$
29.3
$
27.0
Loss ratio - attritional losses
17.3
%
22.0
%
(4.7) pts
23.8
%
21.4
%
2.4 pts
Loss ratio - large losses
64.1
%
4.2
%
59.9 pts
34.9
%
3.7
%
31.2 pts
Loss ratio - prior accident years
(46.0
)%
(8.3
)%
(37.7) pts
(27.9
)%
(9.0
)%
(18.9) pts
Loss ratio
35.4
%
17.9
%
17.5 pts
30.8
%
16.1
%
14.7 pts
For the three and six months ended June 30, 2024, our loss ratio
in the Bespoke segment increased by 17.5 points and 14.7 points,
respectively, compared to the prior year periods, driven by an
increase in our large loss ratio.
The attritional loss ratio for the three months ended June 30,
2024 improved by 4.7 points compared to the prior year period due
to a lower level of small losses in the current year period.
The attritional loss ratio for the six months ended June 30,
2024 increased by 2.4 points compared to the prior year period due
to a higher level of small losses in the current year period.
The large losses in the three months and six months ended June
30, 2024 related to intellectual property losses in our Credit
& Political Risk line of business compared to minimal large
losses in the three and six months ended June 30, 2023.
The favorable prior year development for the three and six
months ended June 30, 2024 was driven by benign attritional
experience and favorable claims settlements.
Reinsurance Segment
The following table is a summary of our Reinsurance segment’s
underwriting results:
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
Change
2024
2023
Change
($ in millions)
Gross premiums written
$
346.1
$
245.2
$
100.9
$
672.9
$
505.6
$
167.3
Reinsurance premium ceded
(128.7
)
(122.0
)
(6.7
)
(357.9
)
(297.4
)
(60.5
)
Net premiums written
217.4
123.2
94.2
315.0
208.2
106.8
Net premiums earned
58.9
31.5
27.4
104.8
60.1
44.7
Losses and loss adjustment expenses
(0.7
)
(4.7
)
4.0
14.9
(10.5
)
25.4
Policy acquisition expenses
(17.7
)
(7.7
)
(10.0
)
(23.8
)
(13.1
)
(10.7
)
Underwriting income
$
40.5
$
19.1
$
21.4
$
95.9
$
36.5
$
59.4
Loss ratio
1.2
%
14.9
%
(13.7) pts
(14.2
)%
17.5
%
(31.7) pts
Policy acquisition expense ratio
30.1
%
24.4
%
5.7 pts
22.7
%
21.8
%
0.9 pts
Underwriting ratio
31.3
%
39.3
%
(8.0) pts
8.5
%
39.3
%
(30.8) pts
For the three and six months ended June 30, 2024, GPW increased
driven by rate increases as well as new business, while NPE
increased driven by earnings from higher net premiums written in
the current year periods.
For the three and six months ended June 30, 2024, our policy
acquisition expense ratio increased due to lower commissions earned
from ceded reinsurance partners.
For the three and six months ended June 30, 2024, our
underwriting ratio in the Reinsurance segment improved by 8.0
points and 30.8 points, respectively, from the prior year periods,
driven by an improvement in our loss ratio.
The following table is a summary of our Reinsurance segment’s
losses and loss adjustment expenses:
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
Change
2024
2023
Change
($ in millions)
Attritional losses
$
10.3
$
(4.8
)
$
15.1
$
18.1
$
24.0
$
(5.9
)
Catastrophe and large losses
2.1
9.3
(7.2
)
3.0
10.1
(7.1
)
(Favorable)/adverse prior year
development
(11.7
)
0.2
(11.9
)
(36.0
)
(23.6
)
(12.4
)
Losses and loss adjustment expenses
$
0.7
$
4.7
$
(4.0
)
$
(14.9
)
$
10.5
$
(25.4
)
Loss ratio - attritional losses
17.5
%
(15.2
)%
32.7 pts
17.3
%
40.0
%
(22.7) pts
Loss ratio - catastrophe and large
losses
3.6
%
29.5
%
(25.9) pts
2.9
%
16.8
%
(13.9) pts
Loss ratio - prior accident years
(19.9
)%
0.6
%
(20.5) pts
(34.4
)%
(39.3
)%
4.9 pts
Loss ratio
1.2
%
14.9
%
(13.7) pts
(14.2
)%
17.5
%
(31.7) pts
For the three months ended June 30, 2024, our loss ratio in the
Reinsurance segment improved by 13.7 points compared to the prior
year period, driven by favorable prior year development and an
improvement in the catastrophe and large loss ratio, partially
offset by an increase in the attritional loss ratio.
The loss ratio improved by 31.7 points for the six months ended
June 30, 2024. This was due to improvements in our attritional and
catastrophe and large loss ratios.
The attritional loss ratio in the three months ended June 30,
2024 increased by 32.7 points compared to the prior year period,
which was particularly benign in terms of attritional losses.
The attritional loss ratio in the six months ended June 30, 2024
improved by 22.7 points due to favorable experience compared to the
prior year period which included storm losses in our Property
Reinsurance line of business.
For the three and six months ended June 30, 2024, favorable
prior year development was driven by positive development on
catastrophe losses and benign prior year attritional
experience.
Other Underwriting Expenses
We do not allocate The Fidelis Partnership commissions or
general and administrative expenses by segment.
The Fidelis Partnership Commissions
For the three and six months ended June 30, 2024, The Fidelis
Partnership commissions were $75.0 million and $151.7 million,
respectively, or 15.0% and 15.3% of the combined ratio,
respectively, (2023: $52.6 million and $76.8 million or 12.3% and
9.4% of the combined ratio) and comprise ceding and profit
commissions as part of the Framework Agreement effective from
January 1, 2023. The increase was due to the full impact of earning
such commissions since January 1, 2023 together with the increase
in net premiums earned. The Fidelis Partnership manages
origination, underwriting, underwriting administration, outwards
reinsurance and claims handling under delegated authority
agreements with the Group.
The following table summarizes The Fidelis Partnership
commissions earned:
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
($ in millions)
Ceding commission expense
$
73.4
$
39.0
$
141.1
$
51.1
Profit commission expense
1.6
13.6
10.6
25.7
Total commissions
$
75.0
$
52.6
$
151.7
$
76.8
General and Administrative Expenses
For the three and six months ended June 30, 2024, general and
administrative expenses were $24.4 million and $48.0 million,
respectively, or 4.9% and 4.9% of the combined ratio, respectively
(2023: $18.6 million and $35.2 million or 4.3% and 4.3% of the
combined ratio). The increase was driven primarily by employment
costs relating to increased head count to support the growth of the
business.
Investments
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
($ in millions)
Net realized and unrealized investment
gains/(losses)
$
(7.0
)
$
0.1
$
(16.0
)
$
2.9
Net investment income
46.0
27.3
87.0
47.7
Net investment return
$
39.0
$
27.4
$
71.0
$
50.6
Net Realized and Unrealized Investment Gains/(Losses)
The net realized and unrealized investment losses in the three
and six months ended June 30, 2024 resulted primarily from realized
losses on the sale of $220.4 million and $429.0 million,
respectively, of fixed maturity securities with an average yield of
1.6% and 1.2%, respectively, the proceeds of which were reinvested
at higher yields.
Net Investment Income
The increase in our net investment income in the three and six
months ended June 30, 2024 was due to the increase in investible
assets and a higher yield achieved on the fixed income portfolio
and cash balances. During the three and six months ended June 30,
2024, we purchased $677.7 million and $1.1 billion, respectively,
of fixed maturity securities at an average yield of 5.2% and 5.1%,
respectively.
Conference Call
Fidelis will host a teleconference to discuss its financial
results on Thursday, August 15, 2024, at 9:00 a.m Eastern time. The
call may be accessed by dialing 1-800-549-8228 (U.S. callers), or
1-289-819-1520 (international callers), and entering the passcode
79393 approximately 10 minutes in advance of the call. A live,
listen-only webcast of the call will also be available via the
Investor Relations section of the Company’s website at
https://investors.fidelisinsurance.com. A recording of the webcast
will be available in the Investor Relations section of the
Company’s website approximately two hours after the event concludes
and will be archived on the site for one year.
About Fidelis Insurance Group
Fidelis Insurance Group is a global specialty insurer,
leveraging strategic partnerships to offer innovative and tailored
insurance solutions.
We have a highly diversified portfolio focused on three
segments: Specialty, Bespoke, and Reinsurance, which we believe
allows us to take advantage of the opportunities presented by
evolving (re)insurance markets, proactively shift our business mix
across market cycles, and produce superior underwriting
returns.
Headquartered in Bermuda, with worldwide offices including
Ireland and the UK, Fidelis Insurance Group operating companies
have a financial strength rating of A from AM Best, A- from S&P
and A3 from Moody’s. For additional information about Fidelis
Insurance, our people, and our products please visit our website at
www.FidelisInsurance.com.
Non-GAAP Financial Measures
This Press Release includes, and the related conference call
will include, certain financial measures that are not calculated in
accordance with generally accepted accounting principles in the
U.S. (“U.S. GAAP”) including Operating net income, Operating EPS,
Operating ROE and Operating ROAE, attritional loss ratio and
catastrophe and large loss ratio, and therefore are non-U.S. GAAP
financial measures. Reconciliations of such measures to the most
comparable U.S. GAAP figures are included in the attached financial
information in accordance with Regulation G.
RPI Measure
Renewal price index (“RPI”) is a measure that Fidelis has used
to assess an approximate index of rate increases on a particular
set of contracts, using the base of 100% for the rates for the
relevant prior year. Although management considers RPI to be an
appropriate statistical measure, it is not a financial measure that
directly relates to the Fidelis consolidated financial results.
Management’s calculation of RPI involves a degree of judgment in
relation to comparability of contracts and the relative impacts of
changes in price, exposure, retention levels, as well as any other
changing terms and conditions on the RPI calculation. Consideration
is given to potential renewals of a comparable nature so it does
not reflect every contract in Fidelis’ portfolio. The future
profitability and performance of a portfolio of contracts expressed
within the RPI is dependent upon many factors besides the trends in
premium rates, including policy terms, conditions and wording.
Safe Harbor Regarding Forward-Looking Statements
This press release (including the documents referenced herein,
such as our financial results for the second quarter ended June 30,
2024) and the related post on LinkedIn contains, and our officers
and representatives may from time to time make (including on our
related conference call), “forward-looking statements" which
include all statements that do not relate solely to historical or
current facts and which may concern our strategy, plans,
projections or intentions and are made pursuant to the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements can be identified by words such
as: “continue,” “grow,” “opportunity,” “create,” “anticipate,”
“intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,”
“target,” “expect,” “evolve,” “achieve,” “remain,” “proactive,”
“pursue,” “optimize,” “emerge,” “seek,” “build,” “looking ahead,”
“commit,” “strategy,” “predict,” “potential,” “assumption,”
“future,” “likely,” “may,” “should,” “could,” “will” and the
negative of these and also similar terms and phrases.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are qualified by
these cautionary statements, because they are based only on our
current beliefs, expectations and assumptions regarding the future
of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions, but are subject to significant business, economic and
competitive uncertainties, many of which are beyond our control or
are subject to change. Our actual results and financial condition
may differ materially from those indicated in the forward-looking
statements. Therefore, you should not rely on any of these
forward-looking statements.
Examples of forward-looking statements include, among others,
statements we make in relation to: discussion relating to net
income and net income per share; expected operating results, such
as revenue growth and earnings; our expectations regarding our
strategy and the performance of our business; information regarding
our estimates for catastrophes and other loss events; our liquidity
and capital resources; and expectations of the effect on our
financial condition of claims, litigation, environmental costs,
contingent liabilities and governmental and regulatory
investigations and proceedings.
Our actual results in the future could differ materially from
those anticipated in any forward-looking statements as a result of
changes in assumptions, risks, uncertainties and other factors
impacting us, many of which are outside our control, including: the
ongoing trend of premium rate hardening and factors likely to drive
continued rate hardening; expected growth across our portfolio; the
availability of outwards reinsurance and capital resources as
required; the development and pattern of earned and written
premiums impacting embedded premium value; changes in accounting
principles or the application thereof; the level of underwriting
leverage; the level and timing of catastrophe and other losses and
related reserves on the business we underwrite; the performance of
our investment portfolios; our strategic relationship with The
Fidelis Partnership; the maintenance of financial strength ratings;
the impact of global geopolitical and economic uncertainties
impacting the lines of business we write; the impact of tax reform
and insurance regulation in the jurisdictions where our businesses
are located; and those risks, uncertainties and other factors
disclosed under the section titled ‘Risk Factors’ in Fidelis
Insurance Holdings Limited’s Form 20-F filed with the SEC on March
15, 2024 (which such section is incorporated herein by reference),
as well as subsequent filings with the SEC available electronically
at www.sec.gov.
Any forward-looking statements, expectations, beliefs and
projections made by us in this release and on our related
conference call speak only as of the date on which they are made
and are expressed in good faith and our management believes that
there is reasonable basis for them, based only on information
currently available to us. However, there can be no assurance that
management’s expectations, beliefs, and projections will be
achieved and actual results may vary materially from what is
expressed or indicated by the forward-looking statements.
Furthermore, our past performance, and that of our management team
and of The Fidelis Partnership, should not be construed as a
guarantee of future performance. We undertake no obligation to
publicly update any forward-looking statement, whether written or
oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise.
FIDELIS INSURANCE HOLDINGS
LIMITED
Consolidated Balance
Sheets
At June 30, 2024 (Unaudited)
and December 31, 2023
(Expressed in millions of U.S.
dollars, except share and per share amounts)
June 30, 2024
December 31, 2023
Assets
Fixed maturity securities,
available-for-sale, at fair value (amortized cost: $3,431.8, 2023:
$3,271.4 (net of allowances for credit losses of $3.2, 2023:
$1.3))
$
3,410.2
$
3,244.9
Short-term investments,
available-for-sale, at fair value (amortized cost: $86.9, 2023:
$49.0 (net of allowances for credit losses of $nil, 2023:
$nil))
86.9
49.0
Other investments, at fair value
(amortized cost: $50.7, 2023: $50.8)
46.8
47.5
Total investments
3,543.9
3,341.4
Cash and cash equivalents
628.6
712.4
Restricted cash and cash equivalents
230.5
251.7
Accrued investment income
33.6
27.2
Premiums and other receivables (net of
allowances for credit losses of $18.4, 2023: $17.3)
3,039.5
2,209.3
Amounts due from The Fidelis Partnership
(net of allowances for credit losses of $nil, 2023: $nil)
251.6
173.3
Deferred reinsurance premiums
1,648.1
1,061.4
Reinsurance balances recoverable on paid
losses (net of allowances for credit losses of $nil, 2023:
$nil)
149.7
182.7
Reinsurance balances recoverable on
reserves for losses and loss adjustment expenses (net of allowances
for credit losses of $1.3, 2023: $1.3)
1,154.8
1,108.6
Deferred policy acquisition costs
(includes Fidelis Partnership deferred commissions $240.2, 2023:
$164.1)
1,029.5
786.6
Other assets
219.1
173.5
Total assets
$
11,928.9
$
10,028.1
Liabilities and shareholders'
equity
Liabilities
Reserves for losses and loss adjustment
expenses
$
2,702.7
$
2,448.9
Unearned premiums
4,193.4
3,149.5
Reinsurance balances payable
1,536.5
1,071.5
Amounts due to The Fidelis Partnership
362.3
334.5
Long term debt
448.6
448.2
Preference securities ($0.01 par,
redemption price and liquidation preference $10,000)
58.4
58.4
Other liabilities
97.1
67.3
Total liabilities
9,399.0
7,578.3
Commitments and contingencies
Shareholders' equity
Common shares ($0.01 par, issued and
outstanding: 116,006,345, 2023: 117,914,754)
1.2
1.2
Additional paid-in capital
2,041.7
2,039.0
Accumulated other comprehensive loss
(22.3
)
(27.0
)
Retained earnings
548.0
436.6
Common shares held in treasury, at cost
(shares held: 2,290,020, 2023: nil)
(38.7
)
—
Total shareholders' equity
2,529.9
2,449.8
Total liabilities and shareholders'
equity
$
11,928.9
$
10,028.1
FIDELIS INSURANCE HOLDINGS
LIMITED
Consolidated Statements of
Income and Comprehensive Income (Unaudited)
For the three and six months
ended June 30, 2024 and June 30, 2023
(Expressed in millions of U.S.
dollars, except for share and per share amounts)
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Revenues
Gross premiums written
$
1,193.2
$
957.2
$
2,707.5
$
2,202.5
Reinsurance premiums ceded
(523.3
)
(342.1
)
(1,259.5
)
(927.7
)
Net premiums written
669.9
615.1
1,448.0
1,274.8
Change in net unearned premiums
(168.8
)
(186.0
)
(458.9
)
(459.7
)
Net premiums earned
501.1
429.1
989.1
815.1
Net realized and unrealized investment
gains/(losses)
(7.0
)
0.1
(16.0
)
2.9
Net investment income
46.0
27.3
87.0
47.7
Other income/(loss)
—
(3.3
)
—
0.2
Total revenues before net gain on
distribution of The Fidelis Partnership
540.1
453.2
1,060.1
865.9
Net gain on distribution of The Fidelis
Partnership
—
—
—
1,639.1
Total revenues
540.1
453.2
1,060.1
2,505.0
Expenses
Losses and loss adjustment expenses
222.7
158.3
405.0
317.9
Policy acquisition expenses (includes The
Fidelis Partnership commissions of $75.0 and $151.7 (2023: $52.6
and $76.8))
217.3
174.7
430.2
303.9
General and administrative expenses
24.4
18.6
48.0
35.2
Corporate and other expenses
1.6
1.5
1.6
3.0
Net foreign exchange losses
2.6
0.1
0.1
1.6
Financing costs
8.6
9.0
17.2
17.6
Total expenses
477.2
362.2
902.1
679.2
Income before income taxes
62.9
91.0
158.0
1,825.8
Income tax expense
(9.2
)
(7.1
)
(23.1
)
(9.3
)
Net income
53.7
83.9
134.9
1,816.5
Other comprehensive
income/(loss)
Unrealized gains/(losses) on
available-for-sale investments
$
(0.4
)
$
(9.9
)
$
(8.6
)
$
15.0
Reclassification of net realized losses
recognized in net income
6.1
0.4
13.5
0.4
Income tax (expense)/benefit, all of which
relates to unrealized gains/(losses) on available-for-sale
investments
(0.8
)
0.4
(0.2
)
(1.6
)
Total other comprehensive
income/(loss)
4.9
(9.1
)
4.7
13.8
Comprehensive income
$
58.6
$
74.8
$
139.6
$
1,830.3
Per share data
Earnings per common share
Earnings per common share
$
0.46
$
0.76
$
1.15
$
16.40
Earnings per diluted common share
$
0.46
$
0.76
$
1.14
$
16.39
Weighted average common shares
outstanding
117,089,293
110,771,897
117,373,655
110,771,897
Weighted average diluted common shares
outstanding
117,625,022
110,825,698
117,860,982
110,807,764
FIDELIS INSURANCE HOLDINGS
LIMITED
Consolidated Segment Data
(Unaudited)
For the three and six months
ended June 30, 2024 and June 30, 2023
(Expressed in millions of U.S.
dollars)
Three Months Ended June 30,
2024
Specialty
Bespoke
Reinsurance
Other
Total
Gross premiums written
$
756.5
$
90.6
$
346.1
$
—
$
1,193.2
Net premiums written
424.6
27.9
217.4
—
669.9
Net premiums earned
349.2
93.0
58.9
—
501.1
Losses and loss adjustment expenses
(189.1
)
(32.9
)
(0.7
)
—
(222.7
)
Policy acquisition expenses
(91.2
)
(33.4
)
(17.7
)
(75.0
)
(217.3
)
General and administrative expenses
—
—
—
(24.4
)
(24.4
)
Underwriting income
68.9
26.7
40.5
(99.4
)
36.7
Net realized and unrealized investment
losses
(7.0
)
Net investment income
46.0
Corporate and other expenses
(1.6
)
Net foreign exchange losses
(2.6
)
Financing costs
(8.6
)
Income before income taxes
62.9
Income tax expense
(9.2
)
Net income
$
53.7
Losses and loss adjustment expenses
incurred - current year
(203.2
)
(75.7
)
(12.4
)
$
(291.3
)
Losses and loss adjustment expenses
incurred - prior accident years
14.1
42.8
11.7
68.6
Losses and loss adjustment expenses
incurred - total
$
(189.1
)
$
(32.9
)
$
(0.7
)
$
(222.7
)
Underwriting Ratios(1)
Loss ratio - current year
58.2
%
81.4
%
21.1
%
58.1
%
Loss ratio - prior accident years
(4.0
%)
(46.0
%)
(19.9
%)
(13.7
%)
Loss ratio - total
54.2
%
35.4
%
1.2
%
44.4
%
Policy acquisition expense ratio
26.1
%
35.9
%
30.1
%
28.4
%
Underwriting ratio
80.3
%
71.3
%
31.3
%
72.8
%
The Fidelis Partnership commissions
ratio
15.0
%
General and administrative expense
ratio
4.9
%
Combined ratio
92.7
%
________________
(1) Underwriting ratios are calculated by
dividing the related expense by net premiums earned.
Three Months Ended June 30,
2023
Specialty
Bespoke
Reinsurance
Other
Total
Gross premiums written
$
657.3
$
54.7
$
245.2
$
—
$
957.2
Net premiums written
461.8
30.1
123.2
—
615.1
Net premiums earned
307.2
90.4
31.5
—
429.1
Losses and loss adjustment expenses
(137.4
)
(16.2
)
(4.7
)
—
(158.3
)
Policy acquisition expenses
(77.5
)
(36.9
)
(7.7
)
(52.6
)
(174.7
)
General and administrative expenses
—
—
—
(18.6
)
(18.6
)
Underwriting income
92.3
37.3
19.1
(71.2
)
77.5
Net realized and unrealized investment
gains
0.1
Net investment income
27.3
Other loss
(3.3
)
Corporate and other expenses
(1.5
)
Net foreign exchange losses
(0.1
)
Financing costs
(9.0
)
Income before income taxes
91.0
Income tax expense
(7.1
)
Net income
$
83.9
Losses and loss adjustment expenses
incurred - current year
(132.5
)
(23.7
)
(4.5
)
$
(160.7
)
Losses and loss adjustment expenses
incurred - prior accident years
(4.9
)
7.5
(0.2
)
2.4
Losses and loss adjustment expenses
incurred - total
$
(137.4
)
$
(16.2
)
$
(4.7
)
$
(158.3
)
Underwriting Ratios(1)
Loss ratio - current year
43.1
%
26.2
%
14.3
%
37.5
%
Loss ratio - prior accident years
1.6
%
(8.3
%)
0.6
%
(0.6
%)
Loss ratio - total
44.7
%
17.9
%
14.9
%
36.9
%
Policy acquisition expense ratio
25.2
%
40.8
%
24.4
%
28.5
%
Underwriting ratio
69.9
%
58.7
%
39.3
%
65.4
%
The Fidelis Partnership commissions
ratio
12.3
%
General and administrative expense
ratio
4.3
%
Combined ratio
82.0
%
________________
(1) Underwriting ratios are calculated by
dividing the related expense by net premiums earned.
Six months ended June 30,
2024
Specialty
Bespoke
Reinsurance
Other
Total
Gross premiums written
$
1,790.5
$
244.1
$
672.9
$
—
$
2,707.5
Net premiums written
1,052.3
80.7
315.0
—
1,448.0
Net premiums earned
701.4
182.9
104.8
—
989.1
Losses and loss adjustment expenses
(363.6
)
(56.3
)
14.9
—
(405.0
)
Policy acquisition expenses
(191.0
)
(63.7
)
(23.8
)
(151.7
)
(430.2
)
General and administrative expenses
—
—
—
(48.0
)
(48.0
)
Underwriting income
146.8
62.9
95.9
(199.7
)
105.9
Net realized and unrealized investment
losses
(16.0
)
Net investment income
87.0
Corporate and other expenses
(1.6
)
Net foreign exchange losses
(0.1
)
Financing costs
(17.2
)
Income before income taxes
158.0
Income tax expense
(23.1
)
Net income
$
134.9
Losses and loss adjustment expenses
incurred - current year
(412.1
)
(107.4
)
(21.1
)
$
(540.6
)
Losses and loss adjustment expenses
incurred - prior accident years
48.5
51.1
36.0
135.6
Losses and loss adjustment expenses
incurred - total
$
(363.6
)
$
(56.3
)
$
14.9
$
(405.0
)
Underwriting Ratios(1)
Loss ratio - current year
58.7
%
58.7
%
20.2
%
54.6
%
Loss ratio - prior accident years
(6.9
%)
(27.9
%)
(34.4
%)
(13.7
%)
Loss ratio - total
51.8
%
30.8
%
(14.2
%)
40.9
%
Policy acquisition expenses ratio
27.2
%
34.8
%
22.7
%
28.2
%
Underwriting ratio
79.0
%
65.6
%
8.5
%
69.1
%
The Fidelis Partnership commissions
ratio
15.3
%
General and administrative expenses
ratio
4.9
%
Combined ratio
89.3
%
________________
(1) Underwriting ratios are calculated by
dividing the related expense by net premiums earned.
Six months ended June 30,
2023
Specialty
Bespoke
Reinsurance
Other
Total
Gross premiums written
$
1,491.4
$
205.5
$
505.6
$
—
$
2,202.5
Net premiums written
954.8
111.8
208.2
—
1,274.8
Net premiums earned
573.4
181.6
60.1
—
815.1
Losses and loss adjustment expenses
(278.1
)
(29.3
)
(10.5
)
—
(317.9
)
Policy acquisition expenses
(143.8
)
(70.2
)
(13.1
)
(76.8
)
(303.9
)
General and administrative expenses
—
—
—
(35.2
)
(35.2
)
Underwriting income
151.5
82.1
36.5
(112.0
)
158.1
Net realized and unrealized investment
gains
2.9
Net investment income
47.7
Other income
0.2
Net gain on distribution of The Fidelis
Partnership
1,639.1
Corporate and other expenses
(3.0
)
Net foreign exchange losses
(1.6
)
Financing costs
(17.6
)
Income before income taxes
1,825.8
Income tax expense
(9.3
)
Net income
$
1,816.5
Losses and loss adjustment expenses
incurred - current year
(242.7
)
(45.6
)
(34.1
)
$
(322.4
)
Losses and loss adjustment expenses
incurred - prior accident years
(35.4
)
16.3
23.6
4.5
Losses and loss adjustment expenses
incurred - total
$
(278.1
)
$
(29.3
)
$
(10.5
)
$
(317.9
)
Underwriting Ratios(1)
Loss ratio - current year
42.3
%
25.1
%
56.8
%
39.6
%
Loss ratio - prior accident years
6.2
%
(9.0
%)
(39.3
%)
(0.6
%)
Loss ratio - total
48.5
%
16.1
%
17.5
%
39.0
%
Policy acquisition expenses ratio
25.1
%
38.7
%
21.8
%
27.9
%
Underwriting ratio
73.6
%
54.8
%
39.3
%
66.9
%
The Fidelis Partnership commissions
ratio
9.4
%
General and administrative expenses
ratio
4.3
%
Combined ratio
80.6
%
________________
(1) Underwriting ratios are calculated by
dividing the related expense by net premiums earned.
FIDELIS INSURANCE HOLDINGS LIMITED
NON-GAAP FINANCIAL MEASURES RECONCILIATION
(UNAUDITED)
Operating net income: is a non-GAAP financial measure of
our performance which does not consider the impact of certain
non-recurring and other items that may not properly reflect the
ordinary activities of our business, its performance or its future
outlook. This measure is calculated as net income excluding net
gain on distribution of The Fidelis Partnership, net realized and
unrealized investment gains/(losses), net foreign exchange
gains/(losses), and corporate and other expenses which include
warrant costs, reorganization expenses, any non-recurring income
and expenses, and the income tax effect on these items.
Return on average common equity (“ROAE”): represents net
income divided by average common shareholders’ equity.
Operating return on opening common equity (“Operating
ROE”): is a non-U.S. GAAP measure that represents a meaningful
comparison between periods of our financial performance expressed
as a percentage and is calculated as operating net income divided
by adjusted opening common shareholders’ equity.
Operating return on average common equity (“Operating
ROAE”): is a non-GAAP financial measure that represents a
meaningful comparison between periods of our financial performance
expressed as a percentage and is calculated as operating net income
divided by adjusted average common shareholders’ equity.
Operating net income per diluted share (“Operating EPS”):
is a non-GAAP financial measure that represents a valuable measure
of profitability and enables investors, analysts, rating agencies
and other users of Fidelis Insurance Group’s financial information
to more easily analyze Fidelis Insurance Group’s results in a
manner similar to how management analyzes Fidelis Insurance Group’s
underlying business performance. It is calculated by dividing
operating net income by the weighted average diluted Common Shares
outstanding.
The table below sets out the calculation of the adjusted common
shareholders’ equity, operating net income, ROAE, Operating ROE,
Operating ROAE and Operating EPS, for the three and six months
ended June 30, 2024 and 2023.
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
($ in millions)
Net income
$
53.7
$
83.9
$
134.9
$
1,816.5
Adjustment for net gain on distribution of
The Fidelis Partnership
—
—
—
(1,639.1
)
Adjustment for net realized and unrealized
investment (gains)/losses
7.0
(0.1
)
16.0
(2.9
)
Adjustment for net foreign exchange
losses
2.6
0.1
0.1
1.6
Adjustment for corporate and other
expenses
1.6
1.5
1.6
3.0
Income tax effect of the above items
(1.9
)
(0.1
)
(2.4
)
(6.3
)
Operating net income
$
63.0
$
85.3
$
150.2
$
172.8
Average common shareholders'
equity
$
2,523.5
$
1,942.6
$
2,489.9
$
1,978.7
Opening common shareholders' equity
2,517.1
1,904.5
2,449.8
1,976.8
Adjustments related to the Separation
Transactions
—
—
—
(178.4
)
Adjusted opening common shareholders’
equity
2,517.1
1,904.5
2,449.8
1,798.4
Closing common shareholders' equity
2,529.9
1,980.6
2,529.9
1,980.6
Adjusted average common shareholders'
equity
$
2,523.5
$
1,942.6
$
2,489.9
$
1,889.5
Weighted average Common Shares
outstanding
117,089,293
110,771,897
117,373,655
110,771,897
Share-based compensation plans
535,729
53,801
487,327
35,867
Weighted average diluted Common Shares
outstanding
117,625,022
110,825,698
117,860,982
110,807,764
ROAE
2.1
%
4.3
%
5.4
%
91.8
%
Operating ROE
2.5
%
4.5
%
6.1
%
9.6
%
Operating ROAE
2.5
%
4.4
%
6.0
%
9.1
%
Earnings per diluted Common
Share
$
0.46
$
0.76
$
1.14
$
16.39
Operating EPS
$
0.54
$
0.77
$
1.27
$
1.56
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240814938671/en/
Fidelis Insurance Group Investor Contact:
Fidelis Insurance Group Miranda Hunter +1 (441) 279 2561
miranda.hunter@fidelisinsurance.com
Fidelis Insurance Group Media Contacts:
Rein4ce Sarah Hills +44 (0)7718 882011
sarah.hills@rein4ce.co.uk
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