Third Quarter 2024
Highlights:
- Gross premiums written of $741.9 million; growth of 25.2%
from the third quarter of 2023
- Combined ratio of 87.4%
- Annualized operating return on opening common equity
(“Operating ROE”) of 16.8% and annualized operating return on
average common equity (“Operating ROAE”) of 16.4%
- Net income of $100.6 million, or $0.88 per diluted common
share and operating net income of $105.1 million, or $0.92 per
diluted common share
- Repurchased 4,279,983 common shares for $66.8 million, at a
weighted average cost per share, including commission expenses, of
$15.61
Nine Months Ended September 30, 2024
Highlights:
- Gross premiums written of $3.4 billion; growth of 23.4% from
nine months ended September 30, 2023
- Combined ratio of 88.6%
- Annualized Operating ROE of 13.9% and annualized Operating
ROAE of 13.3%
- Net income of $235.5 million, or $2.02 per diluted common
share and operating net income of $255.3 million, or $2.18 per
diluted common share
- Book value per diluted common share was $23.43 at September
30, 2024, an increase of 13.2% from December 31, 2023 of
$20.69
- Repurchased 6,570,003 common shares for $105.5 million, at a
weighted average cost per share, including commission expenses, of
$16.06
Fidelis Insurance Holdings Limited (“Fidelis” or “FIHL” or “the
Group”) (NYSE: FIHL) announced today its financial results for the
third quarter ended September 30, 2024.
Dan Burrows, Group Chief Executive Officer of Fidelis Insurance
Group, commented, “The results of the third quarter once again
demonstrate the strength of our business, the steps we have taken
to optimize our risk-adjusted returns, and our disciplined approach
to capital management. We delivered 25% growth in gross premiums
written, a combined ratio of 87.4% and annualized Operating ROAE of
16.4%. In addition, given the strength of our capital position, we
have continued to return excess capital to shareholders, including
repurchases of $66.8 million of common shares, demonstrating our
commitment to enhancing shareholder value.
"Looking ahead, we remain focused on leveraging our scale and
positioning, capitalizing on our ability to identify compelling
opportunities and produce superior underwriting results. We are
pleased with the momentum in our business and continue to pursue
attractive growth and value creation for shareholders.”
Third Quarter 2024 Consolidated
Results
- Net income for the third quarter of 2024 was $100.6 million, or
$0.88 per diluted common share. Operating net income was $105.1
million, or $0.92 per diluted common share.
- Underwriting income for the third quarter of 2024 was $80.0
million and the combined ratio was 87.4%, compared to underwriting
income of $74.8 million and a combined ratio of 85.4% for the third
quarter of 2023.
- Catastrophe and large losses for the third quarter of 2024 were
$91.6 million compared to $79.9 million in the prior year
period.
- Net favorable prior year loss reserve development for the third
quarter of 2024 was $10.1 million compared to $43.3 million in the
prior year period.
- Net investment income for the third quarter of 2024 was $52.1
million compared to $33.1 million in the prior year period.
Purchased $437.6 million of fixed income securities at an average
yield of 4.6%.
- Operating ROE of 4.2%, or 16.8% annualized, in the quarter
compared to 4.6%, or 18.4% annualized in the prior year
period.
- Operating ROAE of 4.1%, or 16.4% annualized, in the quarter
compared to 4.4%, or 17.6% annualized in the prior year
period.
Nine Months Ended September 30, 2024
Consolidated Results
- Net income for the nine months ended September 30, 2024, was
$235.5 million, or $2.02 per diluted common share. Operating net
income was $255.3 million, or $2.18 per diluted common share.
- Underwriting income for the nine months ended September 30,
2024, was $185.9 million and the combined ratio was 88.6%, compared
to underwriting income of $232.9 million and a combined ratio of
82.4% for the nine months ended September 30, 2023.
- Catastrophe and large losses for the nine months ended
September 30, 2024, were $375.8 million compared to $187.3 million
in the prior year period.
- Net favorable prior year loss reserve development of $145.7
million compared to $47.8 million in the prior year period.
- Net investment income of $139.1 million compared to $80.8
million in the prior year period. Purchased $1.5 billion of fixed
income securities at an average yield of 4.9%. At September 30,
2024 the current book yield was 4.9%.
- Operating ROE of 10.4%, or 13.9% annualized, in the nine months
ended September 30, 2024, compared to 14.7%, or 19.6% annualized in
the prior year period.
- Operating ROAE of 10.0%, or 13.3% annualized, in the nine
months ended September 30, 2024, compared to 13.3%, or 17.7%
annualized in the prior year period.
- Book value per diluted common share was $23.43 at September 30,
2024 (dilutive shares at September 30, 2024 of 636,971), compared
to $20.69 at December 31, 2023.
The following table details key financial indicators in
evaluating our performance for the three and nine months ended
September 30, 2024 and 2023:
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
($ in millions, except for per
share data)
Net income
$
100.6
$
87.7
$
235.5
$
1,904.2
Operating net income(1)
105.1
90.7
255.3
263.5
Gross premiums written
741.9
592.6
3,449.4
2,795.1
Net premiums earned
634.5
509.7
1,623.6
1,324.8
Catastrophe and large losses
91.6
79.9
375.8
187.3
Net favorable prior-year reserve
development
10.1
43.3
145.7
47.8
Net investment income
$
52.1
$
33.1
$
139.1
$
80.8
Combined ratio
87.4
%
85.4
%
88.6
%
82.4
%
Operating ROE(1)
4.2
%
4.6
%
10.4
%
14.7
%
Operating ROAE(1)
4.1
%
4.4
%
10.0
%
13.3
%
Earnings per diluted common share
$
0.88
$
0.74
$
2.02
$
16.82
Operating EPS(1)
$
0.92
$
0.77
$
2.18
$
2.33
________________
(1) Operating net income, Operating ROE,
Operating ROAE and Operating EPS are non-GAAP financial measures.
See definition and reconciliation in “Non-GAAP Financial
Measures.”
Segment Results
Specialty Segment
The following table is a summary of our Specialty segment’s
underwriting results:
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
Change
2024
2023
Change
($ in millions)
Gross premiums written
$
398.4
$
326.9
$
71.5
$
2,188.9
$
1,818.3
$
370.6
Reinsurance premium ceded
(113.2
)
(123.3
)
10.1
(851.4
)
(659.9
)
(191.5
)
Net premiums written
285.2
203.6
81.6
1,337.5
1,158.4
179.1
Net premiums earned
372.0
294.6
77.4
1,073.4
868.0
205.4
Losses and loss adjustment expenses
(182.3
)
(138.3
)
(44.0
)
(545.9
)
(416.4
)
(129.5
)
Policy acquisition expenses
(122.4
)
(83.4
)
(39.0
)
(313.4
)
(227.2
)
(86.2
)
Underwriting income
$
67.3
$
72.9
$
(5.6
)
$
214.1
$
224.4
$
(10.3
)
Loss ratio
49.0
%
46.9
%
2.1 pts
50.9
%
48.0
%
2.9 pts
Policy acquisition expense ratio
32.9
%
28.3
%
4.6 pts
29.2
%
26.2
%
3.0 pts
Underwriting ratio
81.9
%
75.2
%
6.7 pts
80.1
%
74.2
%
5.9 pts
For the three months ended September 30, 2024, our GPW increased
primarily driven by growth from new business and increased rates in
our Property D&F and Marine lines of business, partially offset
by decreases in our Property and Energy lines of business as a
result of timing of certain renewals.
For the nine months ended September 30, 2024, our GPW increased
primarily driven by growth from new business and improved rates in
our Property D&F, Property, and Marine lines of business,
partially offset by a decrease in our Aviation and Aerospace line
of business where certain deals did not meet our underwriting
criteria and rating hurdles.
For the three and nine months ended September 30, 2024, our NPE
increased due to earnings from higher net premiums written in the
current and prior year periods.
For the three and nine months ended September 30, 2024, our
policy acquisition expense ratio increased due to higher variable
commissions in certain lines of business and changes in the mix of
business written and ceded.
The following table is a summary of our Specialty segment’s
losses and loss adjustment expenses:
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
Change
2024
2023
Change
($ in millions)
Attritional losses
$
105.3
$
103.7
$
1.6
$
300.0
$
255.9
$
44.1
Catastrophe and large losses
63.0
37.3
25.7
280.4
127.8
152.6
(Favorable)/adverse prior year
development
14.0
(2.7
)
16.7
(34.5
)
32.7
(67.2
)
Losses and loss adjustment expenses
$
182.3
$
138.3
$
44.0
$
545.9
$
416.4
$
129.5
Loss ratio - attritional losses
28.3
%
35.2
%
(6.9) pts
27.9
%
29.5
%
(1.6) pts
Loss ratio - catastrophe and large
losses
16.9
%
12.6
%
4.3 pts
26.2
%
14.7
%
11.5 pts
Loss ratio - prior accident years
3.8
%
(0.9
)%
4.7 pts
(3.2
)%
3.8
%
(7.0) pts
Loss ratio
49.0
%
46.9
%
2.1 pts
50.9
%
48.0
%
2.9 pts
For the three and nine months ended September 30, 2024, our loss
ratio in the Specialty segment increased by 2.1 points and 2.9
points, respectively, compared to the prior year periods.
The attritional loss ratio in the three months and nine months
ended September 30, 2024, improved by 6.9 points and 1.6 points,
respectively, compared to the prior year periods due to a lower
level of small losses in the current year periods.
The catastrophe and large losses in the three months ended
September 30, 2024, were primarily attributable to Hurricane Helene
and European storm Boris, impacting our Property D&F and Marine
lines of business. This compared to the prior period catastrophe
and large losses related primarily to loss events in various lines
of business including, Energy, Marine, and Aviation and Aerospace,
and losses related to the Hawaii wildfires in our Property D&F
line of business.
The catastrophe and large losses in the nine months ended
September 30, 2024 related to losses from the Baltimore Bridge
collapse in our Marine line of business, severe convective storms,
Hurricane Helene and European storm Boris in the Property D&F
and Marine lines of business, together with other smaller losses in
various lines of business. This compared to prior year period
catastrophe and large losses related to our Property D&F line
of business where we experienced losses from severe convective
storms in the U.S. and the Hawaii wildfires, our Aviation and
Aerospace line of business where we experienced losses from the
Sudan conflict, and loss events in various lines of business
including, Energy, Marine, and Aviation and Aerospace.
The adverse prior year development for the three months ended
September 30, 2024, was driven by increased estimates in our
Aviation and Aerospace line of business, partially offset by better
than expected loss emergence in our Property D&F line of
business.
The favorable prior year development for the nine months ended
September 30, 2024, was driven primarily by better than expected
loss emergence in our Property D&F and Marine lines of
business, partially offset by an increase in our Aviation and
Aerospace line of business.
Bespoke Segment
The following table is a summary of our Bespoke segment’s
underwriting results:
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
Change
2024
2023
Change
($ in millions)
Gross premiums written
$
185.8
$
161.7
$
24.1
$
429.9
$
367.2
$
62.7
Reinsurance premium ceded
(76.7
)
(83.6
)
6.9
(240.1
)
(177.3
)
(62.8
)
Net premiums written
109.1
78.1
31.0
189.8
189.9
(0.1
)
Net premiums earned
105.0
98.8
6.2
287.9
280.4
7.5
Losses and loss adjustment expenses
(19.4
)
(43.2
)
23.8
(75.7
)
(72.5
)
(3.2
)
Policy acquisition expenses
(37.4
)
(34.9
)
(2.5
)
(101.1
)
(105.1
)
4.0
Underwriting income
$
48.2
$
20.7
$
27.5
$
111.1
$
102.8
$
8.3
Loss ratio
18.5
%
43.7
%
(25.2) pts
26.3
%
25.9
%
0.4 pts
Policy acquisition expense ratio
35.6
%
35.3
%
0.3 pts
35.1
%
37.5
%
(2.4) pts
Underwriting ratio
54.1
%
79.0
%
(24.9) pts
61.4
%
63.4
%
(2.0) pts
For the three and nine months ended September 30, 2024, our GPW
increased primarily driven by new business in our Bespoke Other
line of business, partially offset by timing of renewals in our
Credit & Political Risk line of business. Gross premiums
written in Bespoke can be opportunistic in nature and premiums
written may fluctuate on a quarterly basis due to the timing and
selection of the contracts we underwrite.
For the three and nine months ended September 30, 2024, our NPE
remained consistent compared to the prior year periods.
Our policy acquisition expense ratio for the three and nine
months ended September 30, 2024 changed due to changes in the mix
of business written and ceded, and commissions earned from
reinsurance partners.
The following table is a summary of our Bespoke segment’s losses
and loss adjustment expenses:
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
Change
2024
2023
Change
($ in millions)
Attritional losses
$
17.1
$
28.3
$
(11.2
)
$
60.7
$
67.1
$
(6.4
)
Large losses
13.4
27.2
(13.8
)
77.2
34.0
43.2
Favorable prior year development
(11.1
)
(12.3
)
1.2
(62.2
)
(28.6
)
(33.6
)
Losses and loss adjustment expenses
$
19.4
$
43.2
$
(23.8
)
$
75.7
$
72.5
$
3.2
Loss ratio - attritional losses
16.3
%
28.6
%
(12.3) pts
21.1
%
23.9
%
(2.8) pts
Loss ratio - large losses
12.8
%
27.5
%
(14.7) pts
26.8
%
12.2
%
14.6 pts
Loss ratio - prior accident years
(10.6
)%
(12.4
)%
1.8 pts
(21.6
)%
(10.2
)%
(11.4) pts
Loss ratio
18.5
%
43.7
%
(25.2) pts
26.3
%
25.9
%
0.4 pts
For the three months ended September 30, 2024, our loss ratio in
the Bespoke segment improved by 25.2 points compared to the prior
year period, driven by a decrease in our large loss ratio and lower
attritional losses in the period.
For the nine months ended September 30, 2024, our loss ratio in
the Bespoke segment increased by 0.4 points compared to the prior
year period, driven by an increase in our large loss ratio,
partially offset by higher prior year favorable development in the
period.
The attritional loss ratio for the three and nine months ended
September 30, 2024, improved by 12.3 points and 2.8 points compared
to the prior year periods due to a lower level of small losses in
the current year periods.
The large losses in the three months ended September 30, 2024
related to our Bespoke Other line of business. The large losses in
the nine months ended September 30, 2024 related to intellectual
property losses in our Credit & Political Risk line of
business. The large losses in the three and nine months ended
September 30, 2023 related to intellectual property losses in our
Credit & Political Risk line of business.
The favorable prior year development for the three and nine
months ended September 30, 2024 was driven by benign attritional
experience and favorable claims settlements.
Reinsurance Segment
The following table is a summary of our Reinsurance segment’s
underwriting results:
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
Change
2024
2023
Change
($ in millions)
Gross premiums written
$
157.7
$
104.0
$
53.7
$
830.6
$
609.6
$
221.0
Reinsurance premium ceded
(84.1
)
(73.1
)
(11.0
)
(442.0
)
(370.5
)
(71.5
)
Net premiums written
73.6
30.9
42.7
388.6
239.1
149.5
Net premiums earned
157.5
116.3
41.2
262.3
176.4
85.9
Losses and loss adjustment expenses
(36.1
)
(10.2
)
(25.9
)
(21.2
)
(20.7
)
(0.5
)
Policy acquisition expenses
(36.9
)
(32.5
)
(4.4
)
(60.7
)
(45.6
)
(15.1
)
Underwriting income
$
84.5
$
73.6
$
10.9
$
180.4
$
110.1
$
70.3
Loss ratio
22.9
%
8.8
%
14.1 pts
8.1
%
11.7
%
(3.6) pts
Policy acquisition expense ratio
23.4
%
27.9
%
(4.5) pts
23.1
%
25.9
%
(2.8) pts
Underwriting ratio
46.3
%
36.7
%
9.6 pts
31.2
%
37.6
%
(6.4) pts
For the three and nine months ended September 30, 2024, GPW
increased driven by new business as well as rate increases, while
NPE increased driven by earnings from higher net premiums written
in the current year periods.
For the three and nine months ended September 30, 2024, our
policy acquisition expense ratio decreased, primarily due to change
in business mix and the impact of commissions on outwards
reinsurance.
The following table is a summary of our Reinsurance segment’s
losses and loss adjustment expenses:
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
Change
2024
2023
Change
($ in millions)
Attritional losses
$
33.9
$
23.1
$
10.8
$
52.0
$
47.1
$
4.9
Catastrophe and large losses
15.2
15.4
(0.2
)
18.2
25.5
(7.3
)
Favorable prior year development
(13.0
)
(28.3
)
15.3
(49.0
)
(51.9
)
2.9
Losses and loss adjustment expenses
$
36.1
$
10.2
$
25.9
$
21.2
$
20.7
$
0.5
Loss ratio - attritional losses
21.5
%
19.9
%
1.6 pts
19.9
%
26.6
%
(6.7) pts
Loss ratio - catastrophe and large
losses
9.7
%
13.2
%
(3.5) pts
6.9
%
14.5
%
(7.6) pts
Loss ratio - prior accident years
(8.3
)%
(24.3
)%
16.0 pts
(18.7
)%
(29.4
)%
10.7 pts
Loss ratio
22.9
%
8.8
%
14.1 pts
8.1
%
11.7
%
(3.6) pts
For the three months ended September 30, 2024, our loss ratio in
the Reinsurance segment increased by 14.1 points compared to the
prior year period, as a result of lower favorable prior year
development.
The loss ratio improved by 3.6 points for the nine months ended
September 30, 2024, compared to the prior year period, due to
improvements in our attritional and catastrophe and large loss
ratios, partially offset by lower favorable prior year
development.
The attritional loss ratio in the three months ended September
30, 2024 increased by 1.6 points compared to the prior year period,
both of which were benign in terms of attritional losses.
The attritional loss ratio in the nine months ended September
30, 2024, improved by 6.7 points due to favorable experience
compared to the prior year period.
The catastrophe and large losses in the three and nine months
ended September 30, 2024 were primarily from Hurricane Helene.
For the three and nine months ended September 30, 2024,
favorable prior year development was driven by positive development
on catastrophe losses and benign prior year attritional
experience.
Other Underwriting Expenses
We do not allocate The Fidelis Partnership commissions or
general and administrative expenses by segment.
The Fidelis Partnership Commissions
For the three and nine months ended September 30, 2024, The
Fidelis Partnership commissions were $97.3 million and $249.0
million, respectively, or 15.3% and 15.3% of the combined ratio,
respectively, (2023: $70.6 million and $147.4 million or 13.9% and
11.1% of the combined ratio) and comprise ceding and profit
commissions as part of the Framework Agreement effective from
January 1, 2023. The increase was due to the full impact of earning
such commissions since January 1, 2023 together with the increase
in net premiums earned. The Fidelis Partnership manages
origination, underwriting, underwriting administration, outwards
reinsurance and claims handling under delegated authority
agreements with the Group.
The following table summarizes The Fidelis Partnership
commissions earned:
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
($ in millions)
Ceding commission expense
$
84.2
$
56.3
$
225.3
$
107.4
Profit commission expense
13.1
14.3
23.7
40.0
Total commissions
$
97.3
$
70.6
$
249.0
$
147.4
Ceding commission expense ratio
13.2
%
11.1
%
13.8
%
8.1
%
Profit commission expense ratio
2.1
%
2.8
%
1.5
%
3.0
%
Total Fidelis Partnership commissions
ratio
15.3
%
13.9
%
15.3
%
11.1
%
General and Administrative Expenses
For the three and nine months ended September 30, 2024, general
and administrative expenses were $22.7 million and $70.7 million,
respectively, or 3.6% and 4.4% of the combined ratio, respectively
(2023: $21.8 million and $57.0 million or 4.3% and 4.3% of the
combined ratio). For the three months ended, the general and
administrative expense remained consistent compared to the prior
year period. For the nine months ended, the increase was driven
primarily by employment costs relating to increased head count to
support the growth of the business.
Investments
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
($ in millions)
Net investment income
$
52.1
$
33.1
$
139.1
$
80.8
Net realized and unrealized investment
losses
(0.5
)
(5.3
)
(16.5
)
(2.4
)
Net investment return
$
51.6
$
27.8
$
122.6
$
78.4
Net Investment Income
The increase in our net investment income in the three and nine
months ended September 30, 2024, was due to the increase in
investible assets and a higher yield achieved on the fixed income
portfolio and cash balances. During the three and nine months ended
September 30, 2024, we purchased $437.6 million and $1.5 billion,
respectively, of fixed maturity securities at an average yield of
4.6% and 4.9%, respectively.
Net Realized and Unrealized Investment Gains/(Losses)
The net realized and unrealized investment losses in the three
and nine months ended September 30, 2024 resulted primarily from
realized losses on the sale of $203.0 million and $632.0 million,
respectively, of fixed maturity securities with an average yield of
1.0% and 1.1%, respectively, the proceeds of which were reinvested
at higher yields.
Conference Call
Fidelis will host a teleconference to discuss its financial
results on Wednesday, November 13, 2024, at 9:00 a.m. Eastern time.
The call can be accessed by dialing 1-800-549-8228 (U.S. callers),
or 1-289-819-1520 (international callers), and entering the
passcode 83511 approximately 10 minutes in advance of the call. A
live, listen-only webcast of the call will also be available via
the Investors section of the Company’s website at
https://investors.fidelisinsurance.com. A recording of the webcast
will be available in the Investor Relations section of the
Company’s website approximately two hours after the event concludes
and will be archived on the site for one year.
About Fidelis Insurance Group
Fidelis Insurance Group is a global specialty insurer,
leveraging strategic partnerships to offer innovative and tailored
insurance solutions.
We have a highly diversified portfolio focused on three
segments: Specialty, Bespoke, and Reinsurance, which we believe
allows us to take advantage of the opportunities presented by
evolving (re)insurance markets, proactively shift our business mix
across market cycles, and produce superior underwriting
returns.
Headquartered in Bermuda, with worldwide offices including
Ireland and the UK, Fidelis Insurance Group operating companies
have a financial strength rating of A from AM Best, A- from S&P
and A3 from Moody’s. For additional information about Fidelis
Insurance, our people, and our products please visit our website at
www.FidelisInsurance.com.
Non-GAAP Financial Measures
This Press Release includes, and the related conference call
will include, certain financial measures that are not calculated in
accordance with generally accepted accounting principles in the
U.S. (“U.S. GAAP”) including Operating net income, Operating EPS,
Operating ROE and Operating ROAE, attritional loss ratio and
catastrophe and large loss ratio, and therefore are non-U.S. GAAP
financial measures. Reconciliations of such measures to the most
comparable U.S. GAAP figures are included in the attached financial
information in accordance with Regulation G.
RPI Measure
Renewal price index (“RPI”) is a measure that Fidelis has used
to assess an approximate index of rate increases on a particular
set of contracts, using the base of 100% for the rates for the
relevant prior year. Although management considers RPI to be an
appropriate statistical measure, it is not a financial measure that
directly relates to the Fidelis consolidated financial results.
Management’s calculation of RPI involves a degree of judgment in
relation to comparability of contracts and the relative impacts of
changes in price, exposure, retention levels, as well as any other
changing terms and conditions on the RPI calculation. Consideration
is given to potential renewals of a comparable nature so it does
not reflect every contract in Fidelis’ portfolio. The future
profitability and performance of a portfolio of contracts expressed
within the RPI is dependent upon many factors besides the trends in
premium rates, including policy terms, conditions and wording.
Safe Harbor Regarding Forward-Looking Statements
This press release, related posts on our website and LinkedIn
and the related discussion and analysis relating to our financial
results for the third quarter ended September 30, 2024, contain,
and our officers and representatives may from time to time make
(including on our related earnings conference call),
“forward-looking statements" which include all statements that do
not relate solely to historical or current facts and which may
concern our strategy, plans, targets, projections or intentions and
are made pursuant to the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as: “continue,” “grow,”
“opportunity,” “create,” “anticipate,” “intend,” “plan,” “goal,”
“seek,” “believe,” “project,” “estimate,” “target,” “expect,”
“evolve,” “achieve,” “remain,” “proactive,” “pursue,” “optimize,”
“emerge,” “seek,” “build,” “looking ahead,” “commit,” “strategy,”
“predict,” “potential,” “assumption,” “future,” “likely,” “may,”
“should,” “could,” “will” and the negative of these and also
similar terms and phrases. Forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
they are qualified by these cautionary statements, because they are
based only on our current beliefs, expectations and assumptions
regarding the future of our business, future plans and strategies,
targets, projections, anticipated events and trends, the economy
and other future conditions, but are subject to significant
business, economic and competitive uncertainties, many of which are
beyond our control or are subject to change. Our actual results and
financial condition may differ materially from those indicated in
the forward-looking statements. Therefore, you should not rely on
any of these forward-looking statements.
Examples of forward-looking statements include, among others,
statements we make in relation to: targeted operating results such
as return on equity, net earnings and net earnings per share,
underwriting profitability and target combined, loss and expense
ratios, growth in gross written premiums and book value; our
expectations regarding our business and capital management strategy
and the performance of our business; information regarding our
estimates for catastrophes and other loss events; our liquidity and
capital resources; and expectations of the effect on our financial
condition of claims, litigation, environmental costs, contingent
liabilities and governmental and regulatory investigations and
proceedings.
Our actual results in the future could differ materially from
those anticipated in any forward-looking statements as a result of
changes in assumptions, risks, uncertainties and other factors
impacting us, many of which are outside our control, including:
- the recent trend of premium rate hardening and factors likely
to drive continued rate hardening or a softening leading to a
cyclical downturn of pricing in the (re)insurance industry;
- the development and pattern of earned and written premiums
impacting embedded premium value;
- our ability to manage risks associated with macroeconomic
conditions resulting from any public health crisis, rising energy
prices, inflation and interest rates, current or anticipated
military conflict or terrorism, including the ongoing Ukraine
Conflict and the escalation of conflict in the Middle East,
sanctions and other geopolitical events globally;
- changes to our strategic relationship with The Fidelis
Partnership and our dependence on the Delegated Underwriting
Authority Agreements for our underwriting and claims-handling
operations;
- our ability to successfully implement our long-term strategy
and compete successfully with more established competitors and
increased competition relating to consolidation in the reinsurance
and insurance industries;
- the possibility of greater frequency or severity of claims and
loss activity than our underwriting, reserving or investment
practices have anticipated;
- the reliability of pricing, accumulation and estimated loss
models;
- the impact of complex causation and coverage issues associated
with attribution of losses;
- the actual development of losses and expenses impacting
estimates for claims which arose as a result of loss activity,
particularly for events where estimates are preliminary until the
development of such reserves based on emerging information over
time;
- any downgrades, potential downgrades or other negative actions
by rating agencies relating to us or our industry;
- our dependence on key executives and ability to attract
qualified personnel;
- our dependence on letter of credit facilities that may not be
available on commercially acceptable terms;
- our potential inability to pay dividends or distributions in
accordance with our current dividend policy, due to changing
conditions;
- availability of outwards reinsurance on commercially acceptable
terms;
- the recovery of losses and reinstatement premiums from our
reinsurance providers;
- our potential need for additional capital in the future and the
potential unavailability of such capital to us on favorable terms
or at all;
- our dependence on clients’ evaluation of risks associated with
such clients’ insurance underwriting;
- the suspension or revocation of our subsidiaries’ insurance
licenses;
- our potentially being subject to certain adverse tax or
regulatory consequences in the U.S., U.K. or Bermuda;
- risks associated with our investment strategy such as market
risk, interest rate risk, currency risk and credit default
risk;
- the impact of tax reform and changes in the regulatory
environment and the potential for greater regulatory scrutiny of
the Group as a result of the outsourcing arrangements;
- heightened risk of cybersecurity incidents and their potential
impact on our business;
- the impact of inflation or deflation in relevant economies in
which we operate;
- our ability to evaluate and measure our business, prospects and
performance metrics and respond accordingly;
- the failure of our risk management policies and procedures to
be adequate to identify, monitor and manage risks, which may leave
us exposed to unidentified or unanticipated risks;
- operational failures, including the operational risk associated
with outsourcing to The Fidelis Partnership, failure of information
systems or failure to protect the confidentiality of customer
information, including by service providers, or losses due to
defaults, errors or omissions by third parties and affiliates;
- risks relating to our ability to identify and execute
opportunities for growth or our ability to complete transactions as
planned or realize the anticipated benefits of our acquisitions or
other investments; and
- and those risks, uncertainties and other factors disclosed
under the section titled ‘Risk Factors’ in Fidelis Insurance
Holdings Limited’s Form 20-F filed with the SEC on March 15, 2024
(which such section is incorporated herein by reference), as well
as subsequent filings with the SEC available electronically at
www.sec.gov.
Any forward-looking statements, expectations, beliefs and
projections made by us in this release and on our related
conference call speak only as of the date referenced on such date
on which they are made and are expressed in good faith and our
management believes that there is reasonable basis for them, based
only on information currently available to us. However, there can
be no assurance that management’s expectations, beliefs, and
projections will be achieved and actual results may vary materially
from what is expressed or indicated by the forward-looking
statements. Furthermore, our past performance, and that of our
management team and of The Fidelis Partnership, should not be
construed as a guarantee of future performance. We undertake no
obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
FIDELIS INSURANCE HOLDINGS
LIMITED
Consolidated Balance
Sheets
At September 30, 2024
(Unaudited) and December 31, 2023
(Expressed in millions of U.S.
dollars, except share and per share amounts)
September 30,
2024
December 31, 2023
Assets
Fixed maturity securities,
available-for-sale, at fair value
(amortized cost: $3,471.8, 2023: $3,271.4
(net of allowances for credit losses of $0.3, 2023: $1.3))
$
3,535.3
$
3,244.9
Short-term investments,
available-for-sale, at fair value
(amortized cost: $133.1, 2023: $49.0 (net
of allowances for credit losses of $nil, 2023: $nil))
133.3
49.0
Other investments, at fair value
(amortized cost: $50.1, 2023: $50.8)
48.7
47.5
Total investments
3,717.3
3,341.4
Cash and cash equivalents
806.8
712.4
Restricted cash and cash equivalents
212.3
251.7
Accrued investment income
27.4
27.2
Premiums and other receivables (net of
allowances for credit losses of $13.4, 2023: $17.3)
2,808.1
2,209.3
Amounts due from The Fidelis Partnership
(net of allowances for credit losses of $nil, 2023: $nil)
248.5
173.3
Deferred reinsurance premiums
1,405.5
1,061.4
Reinsurance balances recoverable on paid
losses (net of allowances for credit losses of $nil, 2023:
$nil)
194.1
182.7
Reinsurance balances recoverable on
reserves for losses and loss adjustment expenses (net of allowances
for credit losses of $1.3, 2023: $1.3)
1,164.9
1,108.6
Deferred policy acquisition costs
(includes The Fidelis Partnership deferred
commissions of $220.8, 2023: $164.1)
926.3
786.6
Other assets
173.9
173.5
Total assets
$
11,685.1
$
10,028.1
Liabilities and shareholders'
equity
Liabilities
Reserves for losses and loss adjustment
expenses
$
2,800.8
$
2,448.9
Unearned premiums
3,789.3
3,149.5
Reinsurance balances payable
1,402.9
1,071.5
Amounts due to The Fidelis Partnership
410.7
334.5
Long term debt
448.8
448.2
Preference securities ($0.01 par,
redemption price and liquidation preference $10,000)
58.4
58.4
Other liabilities
141.9
67.3
Total liabilities
9,052.8
7,578.3
Commitments and contingencies
Shareholders' equity
Common shares ($0.01 par, issued and
outstanding: 111,726,363, 2023: 117,914,754)
1.2
1.2
Additional paid-in capital
2,043.6
2,039.0
Accumulated other comprehensive
income/(loss)
56.1
(27.0
)
Retained earnings
636.9
436.6
Common shares held in treasury, at cost
(shares held: 6,570,003, 2023: nil)
(105.5
)
—
Total shareholders' equity
2,632.3
2,449.8
Total liabilities and shareholders'
equity
$
11,685.1
$
10,028.1
FIDELIS INSURANCE HOLDINGS
LIMITED
Consolidated Statements of
Income and Comprehensive Income (Unaudited)
For the three and nine months
ended September 30, 2024 and September 30, 2023
(Expressed in millions of U.S.
dollars, except for share and per share amounts)
Three Months Ended
Nine Months Ended
September 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
Revenues
Gross premiums written
$
741.9
$
592.6
$
3,449.4
$
2,795.1
Reinsurance premiums ceded
(274.0
)
(280.0
)
(1,533.5
)
(1,207.7
)
Net premiums written
467.9
312.6
1,915.9
1,587.4
Change in net unearned premiums
166.6
197.1
(292.3
)
(262.6
)
Net premiums earned
634.5
509.7
1,623.6
1,324.8
Net investment income
52.1
33.1
139.1
80.8
Net realized and unrealized investment
losses
(0.5
)
(5.3
)
(16.5
)
(2.4
)
Other income
—
—
—
0.2
Total revenues before net gain on
distribution of The Fidelis Partnership
686.1
537.5
1,746.2
1,403.4
Net gain on distribution of The Fidelis
Partnership
—
—
—
1,639.1
Total revenues
686.1
537.5
1,746.2
3,042.5
Expenses
Losses and loss adjustment expenses
237.8
191.7
642.8
509.6
Policy acquisition expenses (includes The
Fidelis Partnership commissions of $97.3 and $249.0 (2023: $70.6
and $147.4))
294.0
221.4
724.2
525.3
General and administrative expenses
22.7
21.8
70.7
57.0
Corporate and other expenses
—
0.4
1.6
3.4
Net foreign exchange (gains)/losses
4.8
(2.4
)
4.9
(0.8
)
Financing costs
8.9
9.0
26.1
26.6
Total expenses
568.2
441.9
1,470.3
1,121.1
Income before income taxes
117.9
95.6
275.9
1,921.4
Income tax expense
(17.3
)
(7.9
)
(40.4
)
(17.2
)
Net income
$
100.6
$
87.7
$
235.5
$
1,904.2
Other comprehensive income
Unrealized gains/(losses) on
available-for-sale investments
$
79.0
$
(0.1
)
$
70.4
$
14.9
Reclassification of net realized losses
recognized in net income
6.0
0.2
19.5
0.6
Income tax (expense)/benefit, all of which
relates to unrealized gains/(losses) on available-for-sale
investments
(6.6
)
0.2
(6.8
)
(1.4
)
Total other comprehensive
income
78.4
0.3
83.1
14.1
Comprehensive income
$
179.0
$
88.0
$
318.6
$
1,918.3
Per share data
Earnings per common share
Earnings per common share
$
0.88
$
0.75
$
2.02
$
16.84
Earnings per diluted common share
$
0.88
$
0.74
$
2.02
$
16.82
Weighted average common shares
outstanding
114,445,447
117,681,835
116,390,461
113,100,521
Weighted average diluted common shares
outstanding
114,734,526
117,975,099
116,845,991
113,232,930
FIDELIS INSURANCE HOLDINGS
LIMITED
Consolidated Segment Data
(Unaudited)
For the three and nine months
ended September 30, 2024 and September 30, 2023
(Expressed in millions of U.S.
dollars)
Three Months Ended September
30, 2024
Specialty
Bespoke
Reinsurance
Other
Total
Gross premiums written
$
398.4
$
185.8
$
157.7
$
—
$
741.9
Net premiums written
285.2
109.1
73.6
—
467.9
Net premiums earned
372.0
105.0
157.5
—
634.5
Losses and loss adjustment expenses
(182.3
)
(19.4
)
(36.1
)
—
(237.8
)
Policy acquisition expenses
(122.4
)
(37.4
)
(36.9
)
(97.3
)
(294.0
)
General and administrative expenses
—
—
—
(22.7
)
(22.7
)
Underwriting income
67.3
48.2
84.5
(120.0
)
80.0
Net investment income
52.1
Net realized and unrealized investment
losses
(0.5
)
Corporate and other expenses
—
Net foreign exchange losses
(4.8
)
Financing costs
(8.9
)
Income before income taxes
117.9
Income tax expense
(17.3
)
Net income
$
100.6
Losses and loss adjustment expenses
incurred - current year
(168.3
)
(30.5
)
(49.1
)
$
(247.9
)
Losses and loss adjustment expenses
incurred - prior accident years
(14.0
)
11.1
13.0
10.1
Losses and loss adjustment expenses
incurred - total
$
(182.3
)
$
(19.4
)
$
(36.1
)
$
(237.8
)
Underwriting Ratios(1)
Loss ratio - current year
45.2
%
29.1
%
31.2
%
39.1
%
Loss ratio - prior accident years
3.8
%
(10.6
%)
(8.3
%)
(1.6
%)
Loss ratio - total
49.0
%
18.5
%
22.9
%
37.5
%
Policy acquisition expense ratio
32.9
%
35.6
%
23.4
%
31.0
%
Underwriting ratio
81.9
%
54.1
%
46.3
%
68.5
%
The Fidelis Partnership commissions
ratio
15.3
%
General and administrative expense
ratio
3.6
%
Combined ratio
87.4
%
________________
(1) Underwriting ratios are calculated by
dividing the related expense by net premiums earned.
Three Months Ended September
30, 2023
Specialty
Bespoke
Reinsurance
Other
Total
Gross premiums written
$
326.9
$
161.7
$
104.0
$
—
$
592.6
Net premiums written
203.6
78.1
30.9
—
312.6
Net premiums earned
294.6
98.8
116.3
—
509.7
Losses and loss adjustment expenses
(138.3
)
(43.2
)
(10.2
)
—
(191.7
)
Policy acquisition expenses
(83.4
)
(34.9
)
(32.5
)
(70.6
)
(221.4
)
General and administrative expenses
—
—
—
(21.8
)
(21.8
)
Underwriting income
72.9
20.7
73.6
(92.4
)
74.8
Net investment income
33.1
Net realized and unrealized investment
losses
(5.3
)
Corporate and other expenses
(0.4
)
Net foreign exchange gains
2.4
Financing costs
(9.0
)
Income before income taxes
95.6
Income tax expense
(7.9
)
Net income
$
87.7
Losses and loss adjustment expenses
incurred - current year
(141.0
)
(55.5
)
(38.5
)
$
(235.0
)
Losses and loss adjustment expenses
incurred - prior accident years
2.7
12.3
28.3
43.3
Losses and loss adjustment expenses
incurred - total
$
(138.3
)
$
(43.2
)
$
(10.2
)
$
(191.7
)
Underwriting Ratios(1)
Loss ratio - current year
47.8
%
56.1
%
33.1
%
46.1
%
Loss ratio - prior accident years
(0.9
%)
(12.4
%)
(24.3
%)
(8.5
%)
Loss ratio - total
46.9
%
43.7
%
8.8
%
37.6
%
Policy acquisition expense ratio
28.3
%
35.3
%
27.9
%
29.6
%
Underwriting ratio
75.2
%
79.0
%
36.7
%
67.2
%
The Fidelis Partnership commissions
ratio
13.9
%
General and administrative expense
ratio
4.3
%
Combined ratio
85.4
%
________________
(1) Underwriting ratios are calculated by
dividing the related expense by net premiums earned.
Nine months ended September
30, 2024
Specialty
Bespoke
Reinsurance
Other
Total
Gross premiums written
$
2,188.9
$
429.9
$
830.6
$
—
$
3,449.4
Net premiums written
1,337.5
189.8
388.6
—
1,915.9
Net premiums earned
1,073.4
287.9
262.3
—
1,623.6
Losses and loss adjustment expenses
(545.9
)
(75.7
)
(21.2
)
—
(642.8
)
Policy acquisition expenses
(313.4
)
(101.1
)
(60.7
)
(249.0
)
(724.2
)
General and administrative expenses
—
—
—
(70.7
)
(70.7
)
Underwriting income
214.1
111.1
180.4
(319.7
)
185.9
Net investment income
139.1
Net realized and unrealized investment
losses
(16.5
)
Corporate and other expenses
(1.6
)
Net foreign exchange losses
(4.9
)
Financing costs
(26.1
)
Income before income taxes
275.9
Income tax expense
(40.4
)
Net income
$
235.5
Losses and loss adjustment expenses
incurred - current year
(580.4
)
(137.9
)
(70.2
)
$
(788.5
)
Losses and loss adjustment expenses
incurred - prior accident years
34.5
62.2
49.0
145.7
Losses and loss adjustment expenses
incurred - total
$
(545.9
)
$
(75.7
)
$
(21.2
)
$
(642.8
)
Underwriting Ratios(1)
Loss ratio - current year
54.1
%
47.9
%
26.8
%
48.6
%
Loss ratio - prior accident years
(3.2
%)
(21.6
%)
(18.7
%)
(9.0
%)
Loss ratio - total
50.9
%
26.3
%
8.1
%
39.6
%
Policy acquisition expenses ratio
29.2
%
35.1
%
23.1
%
29.3
%
Underwriting ratio
80.1
%
61.4
%
31.2
%
68.9
%
The Fidelis Partnership commissions
ratio
15.3
%
General and administrative expenses
ratio
4.4
%
Combined ratio
88.6
%
________________
(1) Underwriting ratios are calculated by
dividing the related expense by net premiums earned.
Nine months ended September
30, 2023
Specialty
Bespoke
Reinsurance
Other
Total
Gross premiums written
$
1,818.3
$
367.2
$
609.6
$
—
$
2,795.1
Net premiums written
1,158.4
189.9
239.1
—
1,587.4
Net premiums earned
868.0
280.4
176.4
—
1,324.8
Losses and loss adjustment expenses
(416.4
)
(72.5
)
(20.7
)
—
(509.6
)
Policy acquisition expenses
(227.2
)
(105.1
)
(45.6
)
(147.4
)
(525.3
)
General and administrative expenses
—
—
—
(57.0
)
(57.0
)
Underwriting income
224.4
102.8
110.1
(204.4
)
232.9
Net investment income
80.8
Net realized and unrealized investment
gains
(2.4
)
Other income
0.2
Net gain on distribution of The Fidelis
Partnership
1,639.1
Corporate and other expenses
(3.4
)
Net foreign exchange losses
0.8
Financing costs
(26.6
)
Income before income taxes
1,921.4
Income tax expense
(17.2
)
Net income
$
1,904.2
Losses and loss adjustment expenses
incurred - current year
(383.7
)
(101.1
)
(72.6
)
$
(557.4
)
Losses and loss adjustment expenses
incurred - prior accident years
(32.7
)
28.6
51.9
47.8
Losses and loss adjustment expenses
incurred - total
$
(416.4
)
$
(72.5
)
$
(20.7
)
$
(509.6
)
Underwriting Ratios(1)
Loss ratio - current year
44.2
%
36.1
%
41.1
%
42.1
%
Loss ratio - prior accident years
3.8
%
(10.2
%)
(29.4
%)
(3.6
%)
Loss ratio - total
48.0
%
25.9
%
11.7
%
38.5
%
Policy acquisition expenses ratio
26.2
%
37.5
%
25.9
%
28.5
%
Underwriting ratio
74.2
%
63.4
%
37.6
%
67.0
%
The Fidelis Partnership commissions
ratio
11.1
%
General and administrative expenses
ratio
4.3
%
Combined ratio
82.4
%
________________
(1) Underwriting ratios are calculated by
dividing the related expense by net premiums earned.
FIDELIS INSURANCE HOLDINGS LIMITED
NON-GAAP FINANCIAL MEASURES RECONCILIATION
(UNAUDITED)
Attritional loss ratio and catastrophe and large loss
ratio: The attritional loss ratio is a non-GAAP measure of the
loss ratio excluding the impact of catastrophe and large losses.
Management believes that the attritional loss ratio is a
performance measure that is useful to investors as it excludes
losses that are not as predictable as to timing and amount. The
attritional loss ratio is calculated by dividing the current year
losses and loss adjustment expenses, excluding catastrophe and
large losses, by NPE. The catastrophe and large loss ratio is a
non-GAAP measure that is calculated by dividing the current year
catastrophe and large loss expense by NPE. The reconciliation of
these non-GAAP measures is included in each segment’s summary of
losses and loss adjustment expenses table.
Operating net income: is a non-GAAP financial measure of
our performance which does not consider the impact of certain
non-recurring and other items that may not properly reflect the
ordinary activities of our business, its performance or its future
outlook. This measure is calculated as net income excluding net
gain on distribution of The Fidelis Partnership, net realized and
unrealized investment gains/(losses), net foreign exchange
gains/(losses), and corporate and other expenses which include
warrant costs, reorganization expenses, any non-recurring income
and expenses, and the income tax effect on these items.
Return on average common equity (“ROAE”): represents net
income divided by average common shareholders’ equity.
Operating return on opening common equity (“Operating
ROE”): is a non-U.S. GAAP measure that represents a meaningful
comparison between periods of our financial performance expressed
as a percentage and is calculated as operating net income divided
by adjusted opening common shareholders’ equity.
Operating return on average common equity (“Operating
ROAE”): is a non-GAAP financial measure that represents a
meaningful comparison between periods of our financial performance
expressed as a percentage and is calculated as operating net income
divided by adjusted average common shareholders’ equity.
Operating net income per diluted share (“Operating EPS”):
is a non-GAAP financial measure that represents a valuable measure
of profitability and enables investors, analysts, rating agencies
and other users of Fidelis Insurance Group’s financial information
to more easily analyze Fidelis Insurance Group’s results in a
manner similar to how management analyzes Fidelis Insurance Group’s
underlying business performance. It is calculated by dividing
operating net income by the weighted average diluted Common Shares
outstanding.
The table below sets out the calculation of the adjusted common
shareholders’ equity, operating net income, ROAE, Operating ROE,
Operating ROAE and Operating EPS, for the three and nine months
ended September 30, 2024 and 2023.
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
($ in millions)
Net income
$
100.6
$
87.7
$
235.5
$
1,904.2
Adjustment for net gain on distribution of
The Fidelis Partnership
—
—
—
(1,639.1
)
Adjustment for net realized and unrealized
investment losses
0.5
5.3
16.5
2.4
Adjustment for net foreign exchange
(gains)/losses
4.8
(2.4
)
4.9
(0.8
)
Adjustment for corporate and other
expenses
—
0.4
1.6
3.4
Income tax effect of the above items
(0.8
)
(0.3
)
(3.2
)
(6.6
)
Operating net income
$
105.1
$
90.7
$
255.3
$
263.5
Average common shareholders'
equity
$
2,581.1
$
2,070.4
$
2,541.1
$
2,068.5
Opening common shareholders' equity
2,529.9
1,980.6
2,449.8
1,976.8
Adjustments related to the Separation
Transactions
—
—
—
(178.4
)
Adjusted opening common shareholders’
equity
2,529.9
1,980.6
2,449.8
1,798.4
Closing common shareholders' equity
2,632.3
2,160.1
2,632.3
2,160.1
Adjusted average common shareholders'
equity
$
2,581.1
$
2,070.4
$
2,541.1
$
1,979.3
Weighted average Common Shares
outstanding
114,445,447
117,681,835
116,390,461
113,100,521
Share-based compensation plans
289,079
293,264
455,530
132,409
Weighted average diluted Common Shares
outstanding
114,734,526
117,975,099
116,845,991
113,232,930
ROAE
3.9
%
4.2
%
9.3
%
92.1
%
Operating ROE
4.2
%
4.6
%
10.4
%
14.7
%
Operating ROAE
4.1
%
4.4
%
10.0
%
13.3
%
Earnings per diluted Common
Share
$
0.88
$
0.74
$
2.02
$
16.82
Operating EPS
$
0.92
$
0.77
$
2.18
$
2.33
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241112254817/en/
Fidelis Insurance Group Investor Contact: Fidelis
Insurance Group Miranda Hunter +1 (441) 279 2561
miranda.hunter@fidelisinsurance.com Fidelis Insurance Group
Media Contacts: Rein4ce Sarah Hills +44 (0)7718 882011
sarah.hills@rein4ce.co.uk
Fidelis Insurance (NYSE:FIHL)
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