20-F: Fidelis Insurance Holdings Reports Full Year 2024 Results, Announces New Share Repurchase Program

Fidelis Insurance Holdings Limited announces its financial results for the year ended December 31, 2024, highlighting growth in gross premiums written and strategic capital allocation.

Summary

• Fidelis Insurance Holdings Limited (FIHL) reported its financial results for the year ended December 31, 2024.
• Gross premiums written (GPW) increased to $4.4 billion, a 23.0% increase from 2023.
• The combined ratio was 99.7%, compared to 82.1% in the prior year, impacted by adverse prior year development and increased catastrophe losses.
• Net income available to common shareholders was $113.3 million, or $0.98 per share.
• The company returned $151.7 million of capital to shareholders through share repurchases and dividends.
• A new share repurchase program was authorized, allowing for up to $200.0 million in repurchases.
• The company is managing the ongoing Ukraine Conflict claims and litigation.
• The company is managing the impact of the January 2025 California wildfires, with estimated losses in the range of $160 million to $190 million.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While there's growth in gross premiums, the decline in net income and increase in the combined ratio indicate challenges. The company's strategic initiatives and capital management provide a slightly positive outlook.

Positives

• Gross premiums written increased by 23.0% to $4.4 billion.
• The company returned $151.7 million of capital to shareholders through share repurchases and dividends.
• A new share repurchase program was authorized, allowing for up to $200.0 million in repurchases.
• Net investment income increased to $190.5 million compared to $119.5 million in the prior year.

Negatives

• The combined ratio was 99.7%, compared to 82.1% in the prior year.
• Net income available to common shareholders was $113.3 million, or $0.98 per share.
• Net adverse prior year development of $124.6 million in the year ended December 31, 2024 compared to net favorable prior year development of $62.9 million in 2023.
• Catastrophe and large losses of $509.0 million in the year ended December 31, 2024 compared to $288.2 million in 2023.

Risks

• The full extent of the impacts of the ongoing Ukraine Conflict on the (re)insurance industry and on the Groups business, financial condition and results of operations, including in relation to claims under the Groups (re)insurance policies, are uncertain and remain unknown.
• The company is subject to litigation which could adversely affect our business and results of operations.
• The company is managing the impact of the January 2025 California wildfires, with estimated losses in the range of $160 million to $190 million.

Future Outlook

The company expects attractive underwriting conditions to persist throughout 2025 and is focused on deploying capital into attractive underwriting opportunities, optimizing its outwards reinsurance purchasing program, and returning excess capital to shareholders.

Management Comments

• The company is well positioned to capture attractive opportunities across business lines.
• The company has the ability to flex its underwriting strategy to navigate market changes.

Industry Context

The announcement reflects the ongoing hard market conditions in the (re)insurance industry, with companies seeking to capitalize on higher premium rates while managing risks effectively.

Comparison to Industry Standards

• The combined ratio of 99.7% is compared to the company's peer group, with a goal to consistently be below the peer group average.
• The company's strategy is to match superior priced risks with efficient sources of capital to produce market-leading returns for shareholders.
• The company is focused on achieving a combined ratio consistently below its peer group.

Legal Proceedings

• The company is managing the ongoing Ukraine Conflict claims and litigation, including settling claims and strengthening reserves.

Related Party Transactions

• The company has an exclusive long-term Framework Agreement with The Fidelis Partnership, where they collaborate in their strategy to match superior priced risks with efficient sources of capital to produce market-leading returns for shareholders.

Stakeholder Impact

• Shareholders will be impacted by the share repurchase program and dividend policy.
• Policyholders will be impacted by the company's ability to provide capacity and manage claims effectively.
• Employees will be impacted by the company's performance and strategic initiatives.

Next Steps

• Deploy capital into attractive underwriting opportunities.
• Optimize outwards reinsurance purchasing program.
• Continually assess investment strategy to improve risk-adjusted returns.
• Return excess capital to shareholders through share repurchase program and dividend policy.

Key Dates