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1 March 2024News

Fidelis reports $2.1 billion annual profit

The company expects hard market conditions to continue.

Fidelis Insurance Holdings celebrated its first full year of results as a public company by announcing a 346% increase in operating net income. 

Operating net income for the year rose to $398.9 million for the year from $89.5 million. 

The Bermuda-based company also announced net income of $2.1 billion, largely driven by the spin-off of affiliate Fidelis MGU. 

Proceeds from the distribution of Fidelis MGU were $1.6 billion while the company also recorded a deferred tax benefit of $90 million relating to the introduction of Bermuda corporate income tax in 2025. 

For the fourth quarter of 2022, Fidelis reported a 90% rise in net income of  $228 million compared to $119 million, but this would have included the Bermuda tax provision. Operating net income rose to $135.4 million from $129.3 million. 

Dan Burrows, group chief executive officer, said: “The fourth quarter was a strong finish to a milestone year for Fidelis in which we became a public company and strengthened our position as a global specialty insurer. 

“Utilising our nimble yet disciplined approach, we capitalized on attractive opportunities, achieved strong rate increases, and delivered excellent financial performance, including a combined ratio of 81.4% and annualized Operating ROAE of 23.6% in the fourth quarter, as we continued to execute against all aspects of our strategy.”

Burrows said the company expected hard market conditions to continue across its core lines. 

“We remain focused on actively managing our capital to foster sustainable growth and maintain our track record of best in class underwriting performance,” he said. “With our lead market position and balance sheet strength, we are well positioned to continue delivering long-term profitable growth and shareholder value.”

Gross written premiums were $783.9 million for the quarter, up 32% from $595.2 million while they rose 19% to $3.6 billion for the year. 

The company also enjoyed a favourable prior year reserve development of $15 million for the quarter and $69 million for the year while net investment incomes rose 126% to $38.7 million for the quarters and 194% to $119.5 million for the year. 

The combined ratio for the quarter worsened to 81.4% for the quarter from 66.2% but improved from 91.9% to 82.1% for the year.

By segment, Fidelis’ specialty underwriting increased its profit to 106.7 million from $90,3 million as its underwriting  ratio worsened to 68.2% from 64.1% although it improved from 82.2% to 72.5%. 

The company’s bespoke segment, the underwriting income fell from 41.5 million  to 40.4 million while its underwriting ratio fell from 60.5% to 57.6%.  However, for the year, Fidelis said its underwriting profit rose to $143 million from $130 million and its underwriting ratio rose to 62% from 66%, 

The company noted that for the year, gross written premium declined from $795 million to $720 million as it became more selective on new  business written. 

“The bespoke market is weighted towards opportunities which are non-recurring, and a number of factors impacted our view of risk in this segment in 2023, including geopolitical instability, inflation and rising interest rates.”

In the reinsurance segment, the company reported an underwriting profit for the year of $161 million, up from $4 million in 2022 as the underwriting ration improved dramatically from 98.4% to 36.5%. 

The improvement was largely driven by a heft drop in losses, which fell from $203 million to $23.7 million.  

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More on this story

News
5 December 2023   The re/insurance veteran will engage with investor community for newly public company.
News
21 November 2023   The re/insurer is confident the hard market will continue into 2024.
News
23 August 2023   The re/insurer says shift to specialty lines paid off.