Fidelis released its Q1 2026 earnings results via a detailed conference call, outlining a rebrand to Pelagos Insurance Capital, strong underwriting performance, and active capital management. Management highlighted a combined ratio of 86.6%, meaningful book value gains, and $219 million in share repurchases, while describing growth across insurance and reinsurance lines. The call also walked through segment performance, reinsurance strategy, partner growth, and how recent geopolitical events are shaping underwriting opportunities.
Daniel Burrows: Thank you, Miranda. Good morning, everyone. And thank you for joining us today. I am pleased to welcome you to our first earnings call as Pelagos Insurance Capital.
The team emphasized that the new Pelagos name is intended to reflect a focused capital allocator that partners with specialist underwriters. Management framed Q1 as a continuation of momentum, citing disciplined underwriting and selective deployment of capital. They pointed to diversified distribution and partner-led growth as structural advantages that let them pick the most attractive risks across markets.
Financially, the quarter delivered a headline combined ratio of 86.6% and an annualized operating ROAE of 15.2%, with book value per diluted share rising to $26.22, including dividends. Management called this their strongest quarter of value creation and highlighted a 7.2% increase in book value per share for the period. They reinforced that repurchases—$219 million in Q1, including a negotiated purchase of sponsor shares—were central to their capital strategy.
The insurance segment saw 13% growth in gross premiums written, driven by new underwriters and continued momentum in property and specialty lines. Property performance was singled out for consistent margin, helped by disciplined underwriting and optimized reinsurance. Asset-backed finance and portfolio credit also contributed, offering steady margins that diversify the portfolio away from traditional cycles.
In marine and war-risk business, management described a clear uptick in demand tied to conflicts in the Middle East, with opportunities to underwrite vessel-level exposure rather than broad facilities. They stressed their risk-by-risk approach and the ability to set terms quickly as a leader in that market. Political violence and terror lines also saw selected growth where pricing and terms met the company’s thresholds.
On reinsurance, gross premiums written were about $404 million, up roughly 7% excluding last year’s California wildfire reinstatements. Management reported a strong renewal season with sustained demand and healthy margins; the three-year average loss ratio for reinsurance remains in the low-teens to sub-20% range. They emphasized that outwards reinsurance purchases have been used to reduce volatility and improve the portfolio’s risk profile.
Allan Carl Decleir: Thanks, Ian. Pelagos Insurance Capital delivered operating net income of $88 million or $0.94 per diluted common share in the first quarter resulting in an annualized operating return on average equity of 15.2%.
Executives walked through loss components in detail: catastrophe and large losses were modest this quarter at 12.7 points of the combined ratio, a marked improvement from the prior year period that was affected by California wildfire losses. Attritional loss experience held low, and prior year development was largely benign apart from some reinsurance impacts like the Baltimore bridge matter. The team noted one discrete tax benefit related to the UK Pillar 2 guidance but said normalized tax rates remain in expected ranges.
Capital management remained active. The company repurchased 11.5 million shares for $219 million during Q1 and noted $185 million still available under the authorization. Since IPO, buybacks total about $600 million, or roughly 30% of shares, at an average price around $17.66 per share. Management also redeemed junior subordinated notes to reduce debt and improve pro forma leverage.
On partner strategy, leaders described the capital allocator model as scalable but selective, aiming to onboard underwriting partners that bring differentiated market access and clear alignment. Examples cited include partners that expand access to E&S property, US mortgage markets, and specialty reinsurance niches. The company said it will continue to prioritize partners that welcome oversight and can scale without diluting underwriting discipline.
Executives discussed outwards reinsurance as both a margin management and volatility-reduction tool, noting they often reinvest pricing improvements into broader or lower-retention covers rather than pocketing cost savings. That approach, they argued, preserves attractive margins while lowering tail risk. Management reiterated guidance for mid-single-digit top-line growth across the portfolio and a disciplined underwriting focus for the full year.
During Q&A, management addressed questions about pricing pressure in direct property and retrocession markets, explaining that while some rate softening exists, rate adequacy remains intact across many of their books. They highlighted lead-market advantages and the ability to flex between partners and geographies as defensive levers. The call closed with reiteration of the company’s long-term focus on compounding book value and maintaining selective capital deployment.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
