Fidelis Insurance Holdings Limited Q4 FY2025 earnings call

Key managerial messages include progress in expanding underwriting partner network, underwriting approach focusing on differentiated portfolio and selective partnerships, use of outwards reinsurance to enhance risk profile and optimize portfolio, strong capital management with share repurchases contributing to book value, fourth quarter and full year financial results with top line growth, combined ratio improvement, and detailed segment dynamics like growth in certain lines and decline in aviation due to not meeting hurdles.

The firm's portfolio is approximately 80% specialty insurance and 20% reinsurance. In insurance, gross premiums written grew 6% in 2025, with asset-backed finance and portfolio credit comprising over 11% of total premium, having longer earning patterns. Reinsurance delivered 11% premium growth for the year.

Expects net earned premiums in first quarter: insurance segment $450 - $500 million, reinsurance segment $50 - $60 million. Anticipates 2026 investment results broadly in line with 2025, generating ~4% - 4.5% return. Full year effective tax rate in 2026 expected to be ~16%. Board approved increased share repurchase authorization to $400 million.

Risks include the firm walking away from business in lines not meeting pricing hurdles, such as aviation where gross premiums written declined 50% year over year. Also, macroeconomic shifts and geopolitical disruptions creating an evolving risk landscape that could impact the business.

Q: Regarding new underwriting partners, should we think more about lines of business, geographies, or bespoke products?

A: It's a mix of everything, focusing on quality of underwriter, track record, leadership team, diversification, and margin creation.

Q: How does the shift to longer duration contracts affect investment portfolio duration?

A: Considered as part of capital allocation, but not immediate, looking at how new underwriting partners and asset-backed portfolio evolve.

Q: Stock undervaluation and potential for higher valuation?

A: Firm believes stock is undervalued, with strong performance and book value growth, expecting valuation to come through with continued strong performance.

Q: Changes to reinsurance renewal attentions and ag cover?

A: Rates declined, bought aggregate cover not available before, market conditions different, and IP line in ABF/portfolio credit has minimal exposures.