Fidelis Insurance NYSE: FIHL, which management referred to on the call as Pelagos Insurance Capital following its rebrand, reported a strong first quarter of 2026, with executives emphasizing underwriting profitability, book value growth and continued share repurchases.
Chief Executive Officer Dan Burrows said the company’s first earnings call under the Pelagos name marked “an exciting milestone” and described the rebrand as a reflection of its strategy as a capital allocator combining strategic capital with underwriting expertise through specialist partners.
Pelagos reported a combined ratio of 86.6% for the quarter, annualized operating return on average equity of 15.2%, and book value per diluted share of $26.22. Including dividends, book value per diluted share rose 7.2% in the quarter, which Burrows called the company’s “best ever quarter of value creation for our shareholders.”
Premiums Rise as New Underwriting Partnerships Contribute
Gross premiums written increased 7% from the prior-year quarter to $1.8 billion. Chief Financial Officer Allan Decleir said the company’s Insurance segment grew gross premiums written by 13%, supported by new underwriting partnerships across several lines of business.
In Reinsurance, gross premiums written were $404 million. Management said that represented 7% growth when excluding reinstatement premiums tied to the California wildfires in the first quarter of 2025.
Decleir said net premiums earned were $515 million in Insurance and $54 million in Reinsurance. For the second quarter, the company expects Insurance net earned premiums to be similar to the first quarter, while Reinsurance net earned premiums are expected to be between $65 million and $75 million.
Burrows said growth in the quarter highlighted the benefits of the company’s model, including its ability to allocate capital across a broader set of distribution networks and respond quickly to market opportunities.
Underwriting Results Improve From Wildfire-Impacted Prior Year
Operating net income was $88 million, or $0.94 per diluted common share, in the first quarter. The combined ratio of 86.6% improved by 29 points compared with the first quarter of 2025.
Catastrophe and large losses accounted for 12.7 points of the combined ratio, or $72 million. That compared with 55.3 points, or $333 million, in the prior-year period, which was primarily related to the California wildfires.
The attritional loss ratio was 27.2 points, which Decleir said was consistent with recent low levels. Pelagos recorded $3 million of favorable prior-year development, compared with $41 million a year earlier.
Decleir said the quarter included favorable development from catastrophe losses and benign prior-year attritional experience in Reinsurance, as well as better-than-expected loss emergence in multiple Insurance lines. He also said the company, like others, increased loss estimates related to the Baltimore Bridge collapse.
In response to an analyst question, Group Managing Director Jonny Strickle said the Baltimore reserve increase followed a settlement announced by the State of Maryland with the International Group. Strickle said Pelagos provides reinsurance for the group and adjusted reserves in line with the underlying market loss. Despite that, he said the company ended the quarter with favorable prior-year development when factoring in reinsurance coverage.
Management Points to Property, Marine and Political Violence Opportunities
Burrows said the Insurance segment’s property business continued to perform strongly, supported by new business momentum and disciplined underwriting despite a competitive environment and rate pressure. He said the company has run an average sub-40% loss ratio over the past three years in property, despite active catastrophe and secondary peril activity.
Construction also had a strong start to the year, with growth in the open market, particularly in complex and post-loss accounts where pricing and terms were more attractive, according to Burrows.
Asset-backed finance and portfolio credit continued to perform strongly, with Burrows saying those products are helping diversify the portfolio and are “insulated from traditional market cycles.” Strickle highlighted the company’s partnership with Euclid Mortgage as a way to expand its U.S. mortgage book and diversify geographically beyond its European mortgage portfolio.
In Marine, Burrows said the company saw strong new business flow and a “step change” in marine war rates driven by conflict in the Middle East. He said Pelagos and its underwriting partners assess risks vessel by vessel, considering factors such as vessel, journey, crew origination, cargo and beneficial ownership, rather than relying on broader facilities.
Burrows also said political violence and terror lines presented growth opportunities in the quarter, with pricing in the Middle East remaining strong. In the question-and-answer session, he said the immediate opportunities from the conflict environment were concentrated in war breach, political violence and terror. Strickle added that the related premium opportunity would be more weighted toward the second quarter than the first.
Share Repurchases Remain a Major Capital Management Tool
Pelagos repurchased 11.5 million common shares for $219 million in the first quarter at an average price of $19 per share. That included a previously disclosed privately negotiated repurchase of all remaining shares held by CVC, one of the company’s original private equity sponsors.
Burrows said approximately 65% of shares are now in the public float and that, at current market valuation, the company does not anticipate further secondary follow-on offerings with remaining original and long-term private equity sponsors in the near term.
Decleir said the first-quarter repurchases added $0.75 to diluted book value per share. Through May 8, Pelagos repurchased an additional $14 million of common shares, leaving $185 million remaining under its share repurchase authorization. Since its IPO, the company has repurchased $600 million of common shares, or 30% of its shares, at an average price of $17.66 per share.
The company also continued its quarterly common dividend. Decleir said Pelagos announced a $0.15 dividend payable in June. In April, the company redeemed $125 million of junior subordinated notes, reducing debt and resulting in a pro forma debt-to-capital ratio of 24.2% as of March 31.
Executives Reiterate Mid-Single-Digit Growth Outlook
Strickle said new underwriting partnerships are becoming an increasingly meaningful part of Pelagos’ business and that the company has a strong pipeline of potential partners. He said management continues to expect mid-single-digit top-line growth across the full portfolio for the year.
He also said Pelagos has secured the majority of its outward reinsurance for the year and has improved its risk profile by moving where possible to aggregate structures on natural catastrophe protections, reducing quota share cessions on attractive lines and purchasing a new whole-account aggregate excess-of-loss cover.
On pricing, Burrows said the market is competitive in certain areas, particularly retrocession, but emphasized that the company focuses on underwriting margin rather than rate-change metrics alone. He said Pelagos remains confident in its targets for the rest of the year.
“Our diversified portfolio, deep relationships and ability to allocate capital dynamically give us clear advantages in navigating an evolving risk environment,” Burrows said in closing remarks.
About Fidelis Insurance NYSE: FIHL
Fidelis Insurance Holdings Ltd is a Bermuda‐incorporated specialty insurer and reinsurer that underwrites a broad range of liability and property risks. Founded in 2015, the company completed its initial public offering on the New York Stock Exchange in 2016 under the ticker FIHL. Fidelis focuses on providing tailored solutions for complex risks that traditional insurers may find difficult to accommodate, leveraging data analytics and underwriting expertise to structure policies across diverse industry segments.
The company’s product portfolio spans casualty lines—including general liability, excess and umbrella, professional indemnity, and management liability—alongside property, marine, energy and specialty programs.
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