Fidelis Insurance Holdings Limited Q1 FY2025 earnings call

• Top line growth: 14% growth in gross premiums written in Q1 2025, driven by strong retention and new business. - Combined ratio: 115.6% for the quarter, impacted by California wildfires ($167 million net of recoveries, etc.). - Insurance segment: Growth in property, marine, structured credit; disciplined underwriting; strong retention. - Reinsurance segment: Favorable market dynamics, 39% growth in gross premiums written, including reinstatement premiums from California wildfires. - Capital management: Focus on reinvesting in growth, share repurchases (year-to-date $41.5 million repurchased), strong balance sheet. - Russia-Ukraine aviation litigation: 80% of lesser policy claims settled, English trial judgment pending; potential $150 million adverse impact if judgment is unfavorable. - Leadership: Jonny Strickle promoted to Group Managing Director.

In the first quarter, Fidelis Insurance Group had strong top line growth. Gross premiums written totaled $1.7 billion, a 14% increase from the prior year. The Insurance segment saw gross premiums written increase by 7% to $1.3 billion, driven by new business in asset-backed finance, portfolio credit, and other lines, while taking a disciplined approach to underwriting. The Reinsurance segment grew gross premiums written by 39% to $456 million, fueled by new business and reinstatement premiums related to California wildfires. Excluding reinstatement premiums, reinsurance growth was 15%. The Insurance segment contributed approximately 76% of the total gross premiums written ($1.3 billion out of $1.7 billion), and the Reinsurance segment contributed about 27% ($456 million).

• Expect to achieve approximately 10% growth in gross premiums written for 2025. - Confident in navigating market conditions and capitalizing on attractive underwriting opportunities.

• Climate change impacts: Increasing frequency and severity of secondary perils, such as California wildfires. - Financial market volatility: Global political uncertainty causing volatility. - Russia-Ukraine aviation litigation: Uncertainty around English trial judgment, potential adverse impact on results. - Market competition: Increasing competition in some lines of business.

Q: Backing out reinstatement premiums, what's the underlying growth?

A: Allan Decleir noted one aviation contract moved from March to April renewal, and reinstatement premiums were ~$80 million, mostly in Reinsurance. Dan Burrows emphasized confidence in 10% growth for the year with diversified portfolio.

Q: On reserve movement, $41 million favorable. What are the drivers?

A: Allan Decleir said positive prior year development driven by strong attritional book performance and reserve releases from prior cat reserves. Also, continued settlement activity in Russia-Ukraine litigation contributed.

Q: Stock undervaluation and share repurchases?

A: Dan Burrows stated the business is undervalued, and they will continue share repurchases as capital allows, with $103 million remaining under the authorization.

Q: Russia-Ukraine litigation remaining exposure?

A: Jonny Strickle explained most remaining exposure relates to English trial, with a hard stop on potential adverse impact; 80% of lesser policy claims settled, 90% paid.

Q: Aviation incidents and underwriting?

A: Dan Burrows mentioned clustering effects in aviation, monitoring pricing/terms, and leveraging leader position with multi-class offering to manage margin.

Q: Property market competitive environment?

A: Dan Burrows discussed real-time underwriting adjustments for tariff impacts, short-tail book allowing quick pricing, and demand shift from admitted to E&S market.

Q: California Wildfire recoveries?

A: Allan Decleir clarified recoveries refer to outward reinsurance collections, with net of recoveries considered in results.

Q: Construction market commentary?

A: Dan Burrows clarified construction reference was marine construction, not U.S. property construction, with strong pipeline in marine construction.

Q: Tariff impacts on property and ceding commissions?

A: Dan Burrows discussed factoring tariff impacts in real-time, Allan Decleir explained ceding commission mix adjustments related to business mix in Fidelis Partnership.