Reinsurance News

Fidelis sees 9M underwriting income soar as combined ratio improves to 82.4%

21st November 2023 - Author: Kane Wells

Fidelis Insurance Group has reported that underwriting income for the 9M ended September 30, 2023, was $232.9 million, with a combined ratio of 82.4%, much improved compared to an underwriting loss of $17.2 million and a combined ratio of 101.6% for the same period last year.

fidelis-insurance-group-logoFidelis’ net income available to common shareholders for the first 9M of 2023 was $1,904.2 million, which includes a net gain on distribution of Fidelis MGU of $1,639.1 million.

Excluding the net gain on distribution of Fidelis MGU, the firm’s net income for the first 9M of 2023 was $265.1 million. This compares to a net loss available to common shareholders of $67.3 million in the same period of 2022.

Meanwhile, Fidelis’ gross premiums written in the first 9M of 2023 were $2.8 billion, marking a growth of 15.4% from the same period last year. Net investment income for the first 9M was $80.8 million, compared to $23.6 million in the prior year period.

Operating return on average common equity increased to 13.3%, or 17.7% annualized, for the first 9M of 2023, from (2.1)% or (2.8)% annualized, in 2022, driven by the aforementioned “significant increases in both underwriting income and investment income.”

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Fidelis’ catastrophe and large losses were also down in the first 9M to $139.8 million from $382.2 million for the same period last year.

The firm explained that catastrophe losses in the Reinsurance segment for the first 9M of 2023 related primarily to the wildfires in Hawaii and Cyclone Gabrielle in its Property Reinsurance line of business, compared to prior year period losses related to Hurricane Ian, European storms and Australian floods.

Dan Burrows, Group Chief Executive Officer, commented, “I am pleased with another strong quarter for Fidelis which produced excellent results across multiple key metrics. We continue to deliver our strategy of generating superior underwriting returns with a year-to-date combined ratio of 82.4%.

“Our results demonstrate our ability to be nimble and opportunistic across our three pillars to react to market conditions and evidence the strength of the alignment with our partners at Fidelis MGU who are able to fully focus on underwriting activities.”

Burrows continued, “During the year we looked to preserve underwriting integrity across the portfolio, and given the economic and geopolitical conditions, maximize the bottom line, delivering an annualized operating ROAE of 17.7%.

“We believe market duration is set to continue and there is still considerable opportunity within the portfolio following a number of years of compound increases across multiple lines of business.

“Our market-leading Specialty portfolio remains an important driver of growth within the business given strong prevailing market conditions, as evidenced by the strong year-to-date premium growth.

“We take a measured approach in Bespoke, where we continually assess market dynamics and evaluate opportunities based on the current risk environment. While this had led to a reduction in Bespoke premium year to date, we have a robust pipeline and are well-positioned to pursue long-term growth in this pillar.”

He concluded, “As we approach the end of the year we remain focused on delivering value for our shareholders, optimizing our portfolio and targeting profitable underwriting opportunities in line with the Fidelis view of risk.”

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