Fidelis Insurance reported a net income of US$19.7 million for the second quarter ending June 30, 2025.
Operating net income was US$13.6 million which included adverse prior-year development in the Aviation & Aerospace segment tied to the Ukraine conflict and an English High Court judgment.
The company posted an underwriting loss of US$20.6 million for the quarter, compared with underwriting income of US$36.7 million a year earlier. The combined ratio rose to 103.7% from 92.7% in the prior-year period.
Net adverse prior-year loss reserve development was US$89.2 million, compared with US$68.6 million in favourable development in the second quarter of 2024. Catastrophe and large losses totalled US$74.3 million, down from US$181.2 million in the same period last year.
Net investment income for the quarter was US$44.6 million, compared with US$46 million a year earlier. Net realised and unrealised investment gains reached US$6.7 million, including US$4.5 million in net unrealised gains from a hedge fund portfolio established in late 2024. The annualised operating return on average equity was 2.3%, down from 10% in the prior-year quarter.
Fidelis had already been contending with significant catastrophe losses in the first quarter, reporting a net loss of US$42.5 million after absorbing US$166.8 million in claims tied to California wildfires. That quarter’s combined ratio stood at 115.6%, and underwriting losses totalled US$94.5 million, setting a challenging backdrop for the second quarter’s performance.
“By coupling our capital management initiatives with our continued ability to take advantage of accretive growth opportunities and optimise reinsurance purchases, we are confident we will continue delivering attractive returns for our shareholders,” group CEO Dan Burrows (pictured above) said.
For the first half of 2025, Fidelis recorded a net loss of US$22.8 million. Operating net loss was US$31.6 million, reflecting the prior-year development in Aviation & Aerospace as well as losses from California wildfires.
Underwriting loss for the six months was US$115.1 million, compared with underwriting income of US$105.9 million in the first half of 2024. The combined ratio was 110.1%, up from 89.3% in the prior-year period. Catastrophe and large losses for the period reached US$407.6 million, compared with US$284.2 million a year earlier.
Net adverse prior-year loss reserve development for the half year was US$48.4 million, compared with US$135.6 million in favourable development in the same period last year.
Net investment income rose to US$94.1 million from US$87 million, with the company purchasing US$0.9 billion in fixed income securities at an average yield of 4.7% and selling US$1.3 billion in fixed maturities at 4.6%. The fixed income portfolio had a book yield of 5% as of June 30, 2025.
In June, Fidelis also expanded its risk transfer capabilities by closing a US$90 million catastrophe bond under its Herbie Re program. The issuance covers a wide range of global perils and will remain in force through June 7, 2027.
Net realised and unrealised investment gains for the first half were US$12.6 million, including US$5.6 million in net unrealised gains from the hedge fund portfolio. The annualised operating return on average equity for the first half was (2.6)%, compared with 12.1% in the prior-year period. Book value per diluted common share stood at US$22.04 at the end of June, up from US$21.79 at year-end 2024.
In May, Fidelis also appointed Hannah Greenwood as chief underwriting officer for its Bermuda operations. Greenwood, who had previously held senior underwriting positions within the group, was tasked with overseeing underwriting strategy and execution for the Bermuda platform, with a focus on specialty lines.
What are your thoughts on this story? Please feel free to share your comments below.
