Large losses drive down Fidelis net income
Bermuda-based Fidelis Insurance Group posted a 36% drop in second quarter earnings, driven largely by an increase in catastrophe and large losses.
The specialty and property re/insurer earned $53.7 million compared to $83.9 million in the prior year period, despite gross written premiums growing 25% to $1.19 billion.
Catastrophe and large losses rose to $181 million from $85.2 million. The company’s combined ratio rose from 82% to 92.7%.
"As we mark our first anniversary as a public company, we are proud to have built a strong team, who are focused on realising the value of our business,” said Dan Burrows, group chief executive officer. “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 capitalise on attractive rates, terms and conditions.”
He added: “In what remains one of the best markets we have seen in recent history, I am excited for the opportunities we see ahead.”
Burrows also said the board had also announced a new share repurchase programme of $200 million.
The company was buoyed by an increase in net investment income, which rose 68% to $46 million while net favourable prior year reserve development also soared from $2.4 million to $68.6 million.
The company’s specialty segment saw underwriting income drop 23.4% to $68.9 million as GWP rose to $756.5 million to $657.3 million and losses rose to $189.1 million from $137.4 million.
Catastrophe and large losses rose to $119.5 million from $72.1 million, of which the largest was from catastrophic tornados in Oklahoma and surrounding states.
The company’s bespoke segment saw underwriting income drop to $26.7 million from $37.3 million as GWP rose to $90.6 million from $54.7 million. The rise in GWP was driven by increases in the company’s credit and political risk line.
However, losses doubled from $16.2 million to $32.9 million due largely to intellectual property losses in the credit and political risk line.
The reinsurance segment had a good period, with underwriting income more than doubling to $40.5 million from $19.1 million.
GWP rose from $245 million to $346 million, and losses were almost minimal at $700,000, down from $4.7 million in the same period in 2023.
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