Pelagos CEO Burrows hails “capital allocator model” as Q1 profit rebounds after wildfire-hit 2025
Bermuda-based specialty re/insurer Pelagos Insurance Capital, formerly Fidelis Insurance, swung back to profit in the first quarter of 2026 as group CEO Dan Burrows said the company’s “unique capital allocator model” continued to deliver value, although comparisons were heavily influenced by catastrophe losses from the prior year period.
The combined ratio swung to 86.6% compared to 115.6% in the same period of the previous year. However, this “improvement” is largely a by-product of a historically bad Q1 2025, which was devastated by California wildfire claims.
Last year’s catastrophes forced the company to collect reinstatement premiums. The absence of these this year caused reinsurance premiums to appear to shrink by $51.6 million, despite the segment returning to significant underwriting profit.
The most notable driver of this quarter’s success was the total loss ratio of -7.5%. This negative ratio was achieved because favourable prior year development, $18.3 million, more than offset the losses incurred during the current period.
In the Insurance segment, the company reported a 6.8% increase in gross premiums written (GPW), driven by new underwriting partnerships. Yet, net premiums earned (NPE) remained essentially flat at $514.9 million. This growth gap suggests Pelagos is ceding a larger portion of its new business to external reinsurance partners to manage risk.
Furthermore, the attritional loss ratio ticked up by 3.4 points. This indicates that while the company avoided major catastrophes this quarter, the cost of standard, daily claims is quietly rising.
In consolidated results, GPW increased from $1.72 billion in the first quarter of 2025 to $1.84 billion in the first quarter of 2026. Net income rebounded from a loss of $42 million in the first quarter of 2025 to $108 million in the same period this year.
Dan Burrows (pictured), group CEO of Pelagos Insurance Capital, said: “We remain focused on balancing profitable underwriting with meaningful capital returns. During the quarter, we returned $219 million through continued share repurchases. We also grew book value per diluted share including dividends by more than 7%, representing our strongest ever quarter of book value growth. At a time when market access and risk selection matter more than ever, we are well positioned to continue delivering significant value to shareholders.”
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