Fidelis draft prospectus gives insight into company's plans
Fidelis Insurance Holdings, which is planning an initial public offering following the spin-off of Fidelis MGU, saw its net income drop to $52.6 million last year from $68.3 million in 2021, a new filing with the US Securities and Exchange Commission shows.
The draft IPO prospectus showed that gross premiums written rose to $3 billion in 2022, up from $2.8 billion in 2021 and $1.58 billion in 2020.
In the same period, losses and loss expenses rose to $830 million from $696 million and $324 million in the two previous years.
Its combined ration was unchanged in 2022 at 92% compared to the previous year, but up 12 per cent from 2021 when it was 80%.
Fidelis also confirmed it received a $1.639 billion distribution from Fidelis MGU in the first quarter of 2023.
The company also indicated it will have a close strategic relationship with Fidelis MGU and its chairman, Fidelis founder Richard Brindle, underpinned by a ten-year rolling agreement giving it exclusive right of first access to Fidelis MGU’s underwriting business.
Fidelis also indicated it intends to increase its presence in its bspoke and specialty segments, saying: "We expect to continue to leverage our access to Fidelis MGU’s long-standing and trusted relationships with brokers and clients, built over the years by key executives, some of whom have almost 40 years of experience in bespoke and specialty markets."
Bespoke and specialty accounted for 26.1% and 53.7% of the company's GWP in 2022, with reinsurance making up the balance.
The prospectus said the company plans to shift focus in its bespoke segment from mortgage products to other lines.
It said: "Currently, we expect a hard property reinsurance market will further continue in 2023 and into 2024 and we are planning to take advantage of reinsurers’ increased bargaining power in such a hard market to reduce our aggregate exposures.
"As a result, in our bespoke pillar, in line with the current economic outlook, we expect to limit the growth in traditional mortgage products and focus instead on lines such as intellectual property, political violence, political risk and transactional liabilities.
"In our specialty pillar, we expect the aviation market to continue the hardening of previous rates following potential losses from the Ukraine Conflict. Similarly, the property direct & facultative market is also expected to harden further following losses from Hurricane Ian, which impacted Florida and the American southeast in September 2022."
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