Fidelis celebrates IPO with $84m quarterly profit

Fidelis Insurance Group, which went public this quarter, produced a tenfold increase in net income in the second quarter as it benefited from improved underwriting and investment returns.

The Bermuda-based specialty re/insurer earned $83.9 million in the three months to June 30 compared to $8.4 million in the second quarter of 2022.

Underwriting income was $77.5 million compared to $32 million, while it slashed its combined ratio from 90.5% to 82%.

Fidelis said the improvement in underwriting came from premium growth in specialty lines while the company also reduced its exposure to property catastrophe reinsurance and reported lower catastrophe losses.

Investing income rose to $27.3 million compared to $7.4 million in the previous year.

Chief executive officer Dan Burrows (pictured) said: “It is an extremely exciting time for Fidelis Insurance Group and I’m delighted to present to you our first earnings release as a public company. Our second quarter results are a testament to the strength of our business model and the continued execution of our strategy and our ability to generate value for our shareholders.

“Our second quarter gross premiums written and combined ratio demonstrate our ability to capitalise on opportunities driven by favourable market conditions whilst remaining disciplined in our underwriting approach.

He added: “Our half year results have delivered an 80.6% combined ratio which represents annualised operating return on average common equity of 18.2%.”

Richard Brindle, chairman and CEO of the Fidelis MGU added: “The timing of the separation of our companies has been excellent, as it coincides with a broad-based hardening of both insurance and reinsurance markets. For me and my team, the ability to focus all our attention on underwriting opportunities, developing new products and widening our distribution is really energising.”

Fidelis had gross written premium of $957 million compared to $764 million, while net premiums earned were $429 million compared to $330 million.

Fidelis’ specialty segment saw an increase in gross written premium from $373 million to $657 million while net premiums earned rose from $199.8 million to $307 million.

Losses and loss adjustment expenses were virtually unchanged at $137 million, but catastrophe and large losses fell from $68.6 million to $55.2 million. Underwriting income rose to $92.3 million from $18.4 million.

Gross premiums written in the bespoke segment fell from $163 million to $55 million while underwriting income edged up from $35.5 million to $37.3 million.

The reinsurance segment’s GWP rose to $245 million from $228 million while losses fell to $4.7 million from $23 million. Underwriting income edged down from $20 million to $19 million.