20-F: Fidelis Insurance Reports Strong 2025 Growth, Plans Rebrand

Fidelis Insurance Holdings Limited reported significant growth in gross premiums written and improved underwriting profitability in 2025, alongside a planned rebranding to Pelagos Insurance Capital Limited.

Summary

• Gross premiums written (GPW) increased by 7.1% to $4.7 billion in 2025, driven by new business and strong retention.
• Net income for 2025 was $225.5 million, a substantial increase from $113.3 million in 2024.
• Operating net income rose to $205.2 million in 2025 from $137.0 million in 2024.
• The combined ratio improved to 94.8% in 2025 from 99.7% in 2024, indicating enhanced underwriting profitability.
• Return on average common equity (ROAE) increased to 9.3% in 2025 from 4.6% in 2024.
• Operating ROAE improved to 8.5% in 2025 from 5.6% in 2024.
• Earnings per diluted common share (EPS) increased to $2.11 in 2025 from $0.98 in 2024.
• The company returned $313.7 million of capital to common shareholders in 2025 through $261.4 million in share repurchases and $52.3 million in dividends.
• The Board approved an increase to the common share repurchase authorization to $400 million on February 20, 2026.
• The company intends to change its name to Pelagos Insurance Capital Limited and trade under the new ticker symbol PLGO on the NYSE in May 2026.
• Net investment return was 4.4% in 2025, up from 3.5% in 2024.
• The company issued $400.0 million of 7.750% Fixed-Rate Reset Subordinated Notes due June 15, 2055, and redeemed its Series A Preference Securities for $58.4 million plus a $1.2 million make-whole payment in June 2025.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this filing positively, reflecting strong financial performance with significant improvements in net income, operating income, and combined ratio. The strategic capital allocation and shareholder returns are favorable, despite ongoing challenges from catastrophe losses and increased financing costs.

Positives

• Gross premiums written grew by 7.1% to $4.7 billion in 2025, indicating successful business expansion and client retention.
• Net income significantly increased to $225.5 million in 2025 from $113.3 million in 2024.
• Operating net income improved to $205.2 million in 2025 from $137.0 million in 2024.
• The combined ratio improved to 94.8% in 2025, reflecting strong underwriting profitability (under 100%).
• Return on average common equity (ROAE) increased to 9.3% in 2025, demonstrating improved capital efficiency.
• Operating ROAE also improved to 8.5% in 2025, highlighting better core business performance.
• Earnings per diluted common share (EPS) more than doubled to $2.11 in 2025 from $0.98 in 2024.
• Net favorable prior year reserve development of $3.0 million in 2025 contributed to improved underwriting results, contrasting with adverse development in 2024.
• Net investment return increased to 4.4% in 2025, indicating effective investment management.
• The company returned a substantial $313.7 million to shareholders in 2025 through repurchases and dividends, demonstrating commitment to shareholder value.
• The Board approved an increased share repurchase authorization of $400 million, signaling confidence in future capital generation.
• The company maintains a strong capital position, enhancing flexibility for underwriting and capital deployment.

Negatives

• Catastrophe and large losses remained high at $515.5 million in 2025, comparable to $509.0 million in 2024, indicating continued exposure to high-severity events.
• Net cash provided by operating activities was negative $408.3 million in 2025, primarily due to large claim payments for aviation litigation settlements related to the Ukraine Conflict and California wildfires.
• Financing costs increased to $47.7 million in 2025 from $33.8 million in 2024, due to higher debt levels from the June 2025 issuance.
• Income tax expense significantly increased to $50.1 million in 2025 from $23.1 million in 2024, partly due to a U.K. Pillar Two top-up tax expense of $21.4 million.
• The Insurance segment experienced adverse prior year development of $77.6 million, mainly from increased reserves in Aviation & Aerospace related to the Ukraine Conflict.
• The Reinsurance segment's loss ratio increased by 8.4 points to 23.7% in 2025, primarily due to higher catastrophe and large losses from the California wildfires.

Risks

• Underwriting of (re)insurance can be volatile and unpredictable, with a focus on low-frequency, high-severity events potentially leading to substantial losses.
• Catastrophic or other large-scale losses may exceed modeled expectations, impacting financial condition.
• Catastrophe and other analytical models may be inaccurate or incomplete, especially for perils like wildfires and flooding, and may not fully reflect climate change impacts.
• Losses may exceed loss reserves or available liquidity, particularly due to the inherent uncertainties in estimating loss reserves for reinsurance business.
• Unexpected accumulations of attritional losses could adversely affect operating results.
• Failure of risk management and loss limitation methods, including reinsurance and retrocessional protections, could have a material adverse effect.
• Retrocessional coverage may be exhausted, and additional coverage may not be available on acceptable terms or respond as expected, exposing the company to creditworthiness of retrocessionaires.
• Dependence on renewals and outwards reinsurance, coupled with exposure to the (re)insurance market cycle, may cause volatility in premiums and financial results.
• The Insurance segment is vulnerable to global economic and geopolitical uncertainty, including conflicts and sanctions, which can reduce demand or increase claims.
• Acquisitions, strategic investments, or new platforms may expose the Group to integration risks and may not be successful.
• Competition and consolidation in the (re)insurance industry could adversely impact market share, pricing, and profitability.
• Inability to write expected premium volumes at projected profitability levels could adversely affect business.
• A downgrade, withdrawal, or other negative action relating to financial strength ratings could materially adversely affect the business.
• Failure to appreciate and respond effectively to ESG trends and risks could adversely affect stakeholder relationships and business plans.
• Changes in law relating to certain perils (e.g., wildfire consumer protection laws) could increase exposure or alter policy obligations.
• Cyber threats are an evolving risk, affecting both specific cyber insurance and other liability coverages, with potential for silent cyber risk.
• Writing quota share reinsurance policies exposes the company to underlying reinsureds' underwriting judgment and claims management.
• Coverage disputes, emerging claims trends, and social inflation could increase losses and affect reserving practices.
• Reliance on TFP for critical services means termination or failure to perform could cause material disruption.
• Inadequate monitoring of TFP's outsourced activities could have an adverse effect.
• Terms of the Separation Transactions and TFP Framework may not be as favorable as if negotiated with an unaffiliated third party, and limited recourse against TFP exists.
• Conflicts of interest may arise due to TFP HoldCo's ownership and shared shareholders/employees with TFP.
• Dependence on policyholders' evaluations or disclosures of exposures may subject the Group to disputes or liability.
• Operational risks, including IT, human, or systems failures (including outsourcing), are inherent and may result in losses.
• Technology breaches or failures, including cyber-attacks on the Group or its partners, could disrupt business, cause legal liability, or reputational harm.
• Use or anticipated use of artificial intelligence (AI) technologies may introduce new risks, including misuse, flawed models, and regulatory compliance challenges.
• Inability to attract, retain, and manage key employees could restrict business strategy implementation.
• Bermuda employment restrictions may adversely affect the ability to retain key Bermuda-based employees.
• Failure to retain letter of credit facilities or the need to provide assets directly as collateral may significantly and negatively affect financial condition and strategy.
• Adverse adjustments under U.K. or Irish transfer pricing regimes could impact tax liability.
• Changes in tax legislation, including BEPS, Pillar One, and Pillar Two initiatives, could materially affect the Group's tax liability and returns to shareholders.
• The EU's blacklist of non-cooperative tax jurisdictions could adversely affect the Group.
• FIHL and/or its non-U.S. subsidiaries may be subject to U.S. federal income taxation if deemed engaged in a U.S. trade or business.
• U.S. Holders will be subject to adverse tax consequences if FIHL is considered a PFIC (Passive Foreign Investment Company) for U.S. federal income tax purposes.
• U.S. Holders of 10% or more of FIHL's common shares may be subject to U.S. income taxation under the CFC (Controlled Foreign Corporation) rules.
• U.S. Persons owning common shares may be subject to U.S. income taxation at ordinary income rates on their proportionate share of the Group's RPII (Related Person Insurance Income).
• U.S. tax-exempt organizations that own common shares may recognize unrelated business taxable income.
• U.S. Holders who dispose of shares may be subject to U.S. federal income taxation at rates applicable to dividends on a portion of any gain realized.
• The declaration of any dividends is at the sole discretion of the Board and may be constrained by the Group's structure, Bermuda law, and indebtedness terms.
• If securities or industry analysts do not publish research or downgrade common shares, the price and trading volume could decline.
• FIHL's foreign private issuer status means less publicly available information and potentially less protection for investors.
• Loss of foreign private issuer status would require compliance with U.S. domestic company reporting, increasing costs.
• Adopting certain home country corporate governance practices may afford investors less protection than NYSE standards.
• Sale of additional common shares by FIHL or existing shareholders could cause the market price to decline.
• Certain securities rank senior to common shares, affecting capital attributable to common shares and dividend likelihood.
• The Group may require additional capital in the future, which may not be available on satisfactory terms or could dilute ownership.
• Provisions in Amended and Restated Bye-Laws could impede attempts to replace the Board or delay/prevent a sale of FIHL.
• Share voting limitations in Amended and Restated Bye-Laws may result in fewer or greater voting rights for certain holders.
• TFP HoldCo's consent rights under the Amended and Restated Common Shareholders Agreement allow it to exercise control over key corporate actions.
• Enforcement of civil liabilities against the Group may be difficult due to its Bermuda incorporation and non-U.S. resident directors/officers.

Future Outlook

The company is focused on allocating capital to create long-term shareholder value by deploying capital into attractive underwriting opportunities, optimizing outwards reinsurance, enhancing risk-adjusted investment returns, and returning excess capital to shareholders. It aims to be a market leader for specialist solutions, leveraging its underwriting partnerships and disciplined approach to navigate moderating market rates while maintaining robust and profitable pricing. The strategy includes increasing exposure to non-peak catastrophe business for diversification and attractive risk-adjusted returns.

Management Comments

• "We are focused on allocating capital to create long-term value to our shareholders. This includes deploying capital into attractive underwriting opportunities, optimizing our outwards reinsurance purchasing, continually assessing our investment strategy to enhance risk-adjusted returns, and returning excess capital to shareholders through a combination of our share repurchase program and our dividend policy."
• "Our goal is to take the lead in setting rates, terms and conditions, and to position ourselves as the market of choice for specialist solutions across both our existing portfolio and new-sub lines of specialty products."
• "The Group has a strong track record of underwriting performance and profitable growth and we are well positioned to capture attractive opportunities across business lines."
• "While market rates are moderating in certain industry segments, overall dynamics remain favorable and our disciplined underwriting approach ensures that overall pricing available to us remains adequate."
• "In aviation, we have deliberately scaled back premium in response to the current risk environment and prevailing market conditions. We remain highly disciplined in how we assess opportunities, particularly in light of recent loss activity, with a clear focus on price adequacy and adherence to non-negotiable terms and conditions."
• "Our Asset Backed Finance & Portfolio Credit portfolio includes products where the driver for specific risk transfer is often different to traditional insurance products, including regulatory capital relief, capital efficiency and transaction facilitation. These products are largely insulated from traditional insurance market cycles, due to their specialized, deal-specific risk profiles."
• "Our disciplined and active approach to managing our portfolio and our strong client relationships continue to differentiate our portfolio, as pricing pressure increases across the market."
• "We believe the effects of climate change on perils such as hurricanes, convective storms, floods and wildfires are not fully captured in current vendor models. As such, we overlay our own assumptions around frequency and severity on third-party vendor models to form a base for exposure and aggregation tracking."

Industry Context

StockSavvy.ai notes that the specialty insurance and reinsurance market continues to present attractive opportunities, despite moderating rates in some segments. The company's strategic focus on disciplined underwriting, active capital management, and diversification into non-peak catastrophe business aligns with broader industry trends emphasizing risk-adjusted returns and resilience against increasing loss volatility. The reliance on strategic underwriting partnerships like TFP is a common model in the industry to leverage expertise and expand reach without significant internal infrastructure costs. The increasing regulatory scrutiny on outsourcing, cybersecurity, and ESG factors reflects a global trend towards enhanced governance and risk management in the financial services sector.

Comparison to Industry Standards

• The company's combined ratio of 94.8% in 2025 is generally considered strong for the P&C insurance industry, indicating underwriting profitability. For comparison, many top-tier global reinsurers often target combined ratios in the low to mid-90s, while some specialty insurers may operate slightly higher depending on their risk profile.
• The 2025 net investment return of 4.4% is competitive, especially given the company's focus on high-quality fixed maturity securities. This compares favorably to the average investment returns reported by many P&C insurers in a rising interest rate environment, though specific benchmarks vary by portfolio composition.
• The increase in ROAE to 9.3% in 2025, while positive, is still below the double-digit ROAE targets often sought by leading global insurers and reinsurers, which can range from 10% to 15% or higher in favorable market conditions. However, it represents a significant improvement over the prior year.
• The company's debt-to-total capital ratio of 26.0% is within acceptable ranges for the insurance industry, demonstrating a balanced capital structure. This is generally in line with or slightly below the leverage ratios of many publicly traded insurance holding companies, which often manage to maintain strong credit ratings.

Management Changes

Corporate Governance

Legal Proceedings

• The company is subject to litigation, arbitration, and other dispute resolution proceedings in the ordinary course of business, primarily related to insurance/reinsurance coverage questions, policy interpretation, and claims handling.
• Following Russia's invasion of Ukraine, aircraft lessors instituted proceedings in the U.K., U.S., and Ireland against numerous (re)insurers, including certain Group entities, regarding unreturned aircraft from Russia.
• The majority of claims related to the Ukraine Conflict aviation proceedings have been settled out of court.
• In June 2025, the English High Court issued a judgment in connection with related proceedings in England, with a consequential hearing on interest and costs held in September 2025.
• Provision has been made in the Group's reserves for losses and loss adjustment expenses for potential exposures related to the Ukraine Conflict, including leased aircraft claims, litigation, and settlements.
• The company is not a party to any litigation or governmental proceeding believed to have a material adverse impact on its financial position, results of operations, or liquidity, but acknowledges inherent uncertainty and potential costs/diversion of management resources.

Related Party Transactions

• The Fidelis Partnership (TFP) acquired 9.9% of the common shares of the Group on January 3, 2023.
• The Group and TFP entered into a rolling 10-year Framework Agreement, effective January 1, 2023, governing the outsourced underwriting relationship, which the Group elected to roll for 2026.
• TFP manages origination, underwriting, underwriting administration, and claims handling under delegated authority agreements with the Group.
• TFP provides other services including sourcing outwards reinsurance, business planning, capital management, insurance contract accounting, and IT support.
• TFP is entitled to ceding commissions (11.5% for open market business, 3.0% for third-party MGA business) and a 3.0% portfolio management fee on net premiums written.
• TFP receives a profit commission of 20.0% of the aggregate operating profit above a 5.0% underwriting return on equity hurdle rate.
• Commissions on ceded business paid to TFP were $115.9 million in 2025 (2024: $104.8 million, 2023: $54.4 million).
• Profit commissions paid to TFP were $27.5 million in 2025 (2024: $68.6 million, 2023: $31.6 million).
• Charges from TFP for support services (business planning, accounting, IT) were $4.5 million in 2025 (2024: $6.5 million, 2023: $5.6 million).
• Amounts receivable from TFP were $174.8 million at December 31, 2025 (2024: $208.9 million), primarily collected premiums not yet remitted.
• Amounts payable to TFP were $457.7 million at December 31, 2025 (2024: $385.8 million), primarily for commissions and claims paid on the Group's behalf.
• The Group continues to be the rental guarantor for a historical lease in Dublin, now occupied by TFP, with no payments expected.
• TFP HoldCo has the right to nominate one director to the Board and certain consent rights over key corporate actions as long as it holds at least 4.9% of common shares and the Framework Agreement is in effect.
• TFP HoldCo has the right to sell a pro rata portion of its common shares in connection with the Group's share repurchases to maintain its beneficial ownership below 9.8752%.
• In 2025, the Group repurchased 1,487,359 common shares from TFP for $25.6 million.
• Subsequent to December 31, 2025, the Group repurchased 942,014 common shares from TFP HoldCo for $17.9 million in a pro rata repurchase.
• FIBL participates in TFP's Lloyds Syndicate 3123 by reinsuring a portion of business and indirectly provides funds at Lloyds via its wholly-owned subsidiary, Fidelis IG Corporate Member, supporting 7.4% of the Syndicate's capacity for 2025 and 2026.

Stakeholder Impact

• **Shareholders:** Benefit from increased net income, improved ROAE, and significant capital returns through share repurchases ($261.4 million) and dividends ($52.3 million) in 2025. The increased share repurchase authorization signals continued commitment to shareholder value. However, the classified board structure and TFP HoldCo's consent rights may limit other shareholders' influence.
• **Employees:** Benefit from a performance-driven, collaborative culture and a retention program that included one-time grants of restricted share units in 2025. Increased headcount and higher employment costs reflect growth. The company's commitment to ESG, diversity, and inclusion, and a zero-tolerance approach to modern slavery and harassment, aim to create a positive work environment.
• **Customers/Policyholders:** Benefit from the company's strategic focus on disciplined underwriting, diversified portfolio, and ability to provide specialist solutions. The company's strong financial strength ratings are important for customer confidence in claims-paying ability. However, evolving cyber threats and potential coverage disputes could impact customer experience.
• **Suppliers/Partners:** The strategic partnership with TFP is critical for underwriting and claims handling, ensuring continued business for TFP. The company's reliance on brokers for distribution highlights their importance. Compliance with anti-bribery and anti-corruption policies impacts all business dealings.
• **Creditors:** The issuance of $400.0 million in subordinated notes increases the company's debt, but the debt-to-total capital ratio of 26.0% remains within customary limits. The redemption of preference securities simplifies the capital structure. The company's strong capital position and liquidity management are favorable for creditors.
• **Regulatory Authorities:** The company is subject to extensive regulation in Bermuda, the U.K., and Ireland, with ongoing changes in tax laws (e.g., Bermuda CIT Act, Pillar Two) and insurance prudential regimes (Solvency UK, Solvency II amendments). Compliance with these evolving regulations, including those for outsourcing, cybersecurity, and data protection, is a continuous focus and may incur additional costs.

Next Steps

• The company intends to change its name to Pelagos Insurance Capital Limited and begin trading under the new ticker symbol PLGO in May 2026, subject to regulatory and legal approvals.
• The Board of Directors approved an increase to the common share repurchase authorization to $400 million on February 20, 2026, with $217.7 million unutilized as of March 3, 2026.
• The Board of Directors approved and declared a dividend of $0.15 per share, payable on March 27, 2026, to common shareholders of record on March 16, 2026.
• The company will continue to assess the scope of application, impact, and risk of new AI and cyber developments in the E.U. and U.K. on its business.
• The PRA expects firms to conduct an internal assessment of their current arrangements against revised climate-related risk expectations and develop an appropriate implementation plan by early June 2026.
• The company anticipates reversing the accrued U.K. Pillar Two top-up tax liability upon enactment of the proposed U.K. legislation aligning with OECD guidance.

Key Dates

Recommendation

The filing indicates strong operational and financial improvements in 2025, with significant growth in gross premiums written, a notable increase in net income and operating income, and an improved combined ratio. The company's strategic capital allocation, including substantial share repurchases and dividends, demonstrates a commitment to shareholder returns. While catastrophe losses remain a factor, the favorable prior year reserve development and increased net investment return are positive indicators. The planned rebranding to Pelagos Insurance Capital Limited could also refresh market perception. The overall trajectory suggests continued profitable growth and effective capital management, making it an attractive investment.

Keywords

Specialty Insurance, Reinsurance, SEC Filing, Financial Performance, Gross Premiums Written, Combined Ratio, Underwriting Profit, Capital Allocation, Share Repurchase, Dividends, Risk Management, Catastrophe Losses, Investment Income, Corporate Governance, Regulatory Compliance, Bermuda Monetary Authority, Solvency II, Solvency UK, Cybersecurity, Artificial Intelligence, Related Party Transactions, TFP, Pelagos Insurance Capital, NYSE: FIHL, NYSE: PLGO