Fourth Quarter 2023
Highlights:
- Gross premiums written of $783.9 million; growth of 31.7%
from the fourth quarter of 2022
- Combined ratio of 81.4%
- Annualized operating return on opening common equity
(“Operating ROE”) of 25.2% and operating return on average common
equity (“Operating ROAE”) of 23.6%
- Net income of $228.3 million, or $1.93 per diluted common
share and operating net income of $135.4 million, or $1.15 per
diluted common share
- Book value per diluted common share was $20.69 at December
31, 2023, an increase of 13.4%, compared to September 30,
2023
Full Year 2023
Highlights:
- Gross premiums written of $3.6 billion; growth of 18.6% from
full year 2022
- Combined ratio of 82.1%; improvement of 9.8 points from full
year 2022
- Operating net income of $398.9 million, or
$3.49 per diluted common share
- Net income of $2.1 billion, or $18.65 per diluted common
share
- Operating ROE of 22.2% and Operating ROAE of 18.8%
- IPO completed on the NYSE on July 3, 2023, raising $89.4
million in net proceeds through the issuance of 7,142,857 common
shares at $14.00 per common share
Fidelis Insurance Holdings Limited (“Fidelis” or “FIHL” or “the
Group”) (NYSE: FIHL) announced today its financial results for the
fourth quarter ended December 31, 2023.
Dan Burrows, Group Chief Executive Officer, said “The fourth
quarter was a strong finish to a milestone year for Fidelis in
which we became a public company and strengthened our position as a
global specialty insurer. Utilizing our nimble yet disciplined
approach, we capitalized on attractive opportunities, achieved
strong rate increases, and delivered excellent financial
performance, including a combined ratio of 81.4% and annualized
Operating ROAE of 23.6% in the fourth quarter, as we continued to
execute against all aspects of our strategy.
“We are entering 2024 with strong momentum. Across core lines,
we expect hard market conditions to continue, and we remain focused
on actively managing our capital to foster sustainable growth and
maintain our track record of best in class underwriting
performance. With our lead market position and balance sheet
strength, we are well positioned to continue delivering long-term
profitable growth and shareholder value.”
Fourth Quarter Consolidated
Results
- Net income available to common shareholders for the fourth
quarter of 2023 was $228.3 million, or $1.93 per diluted common
share, which includes the establishment of a net deferred tax asset
of $90.0 million related to the enactment of Bermuda’s corporate
income tax. Operating net income of $135.4 million, or $1.15 per
diluted common share.
- Underwriting income for the fourth quarter of 2023 was $94.4
million and a combined ratio of 81.4%, compared to underwriting
income of $137.6 million and a combined ratio of 66.2% for the
fourth quarter of 2022.
- Net favorable prior year loss reserve development for the
fourth quarter of 2023 was $15.1 million compared to $3.9 million
in the prior year period.
- Net investment income for the fourth quarter of 2023 was $38.7
million compared to $17.1 million in the prior year period.
- Operating ROE of 6.3%, or 25.2% annualized, in the quarter
compared to 7.0%, or 28.0% annualized in the prior year
period.
- Operating ROAE of 5.9%, or 23.6% annualized, in the quarter
compared to 6.8%, or 27.2% annualized in the prior year
period.
- Book value per diluted common share was $20.69 at December 31,
2023, an increase of 13.4%, compared to September 30, 2023.
Full Year 2023 Consolidated
Results
- Net income available to common shareholders for the year ended
December 31, 2023 was $2,132.5 million, or $18.65 per diluted
common share, which includes a net gain on distribution of Fidelis
MGU of $1,639.1 million and the establishment of a net deferred tax
asset of $90.0 million related to the enactment of Bermuda’s
corporate income tax. Operating net income was $398.9 million, or
$3.49 per diluted common share.
- Underwriting income for the year ended December 31, 2023 was
$327.3 million and a combined ratio of 82.1%, compared to $120.4
million and a combined ratio of 91.9% for the year ended December
31, 2022. The improvement was driven by premium growth in our
Specialty segment together with significantly lower catastrophe and
large losses.
- Net favorable prior year loss reserve development of $62.9
million compared to $22.1 million in the prior year.
- Net investment income of $119.5 million compared to $40.7
million in the prior year.
- Operating ROE and operating ROAE increased to 22.2% and 18.8%,
respectively, in the year ended December 31, 2023, from 4.4% and
4.5%, respectively, in the year ended December 31, 2022, driven by
significant increases in both underwriting income and investment
income.
- Book value per diluted common share was $20.69 at December 31,
2023, an increase of 27.4% from the adjusted book value per diluted
common share at the time of the Separation Transactions, which were
completed on January 3, 2023, driven by net income and net
unrealized gains reported in other comprehensive income.
The following table details key financial indicators in
evaluating our performance for the three and twelve months ended
December 31, 2023 and 2022:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
($ in millions, except for per
share data)
Net income available to common
shareholders
$
228.3
$
119.9
90%
$
2,132.5
$
52.6
3,954%
Earnings per diluted common share
1.93
0.60
222%
18.65
0.26
7,073%
Operating net income(1)
135.4
129.3
5%
398.9
89.5
346%
Operating EPS(1)
1.15
0.65
77%
3.49
0.45
676%
Gross premiums written
783.9
595.2
32%
3,579.0
3,018.1
19%
Net premiums earned
507.8
407.7
25%
1,832.6
1,500.5
22%
Catastrophe and large losses
75.5
(3.3
)
NM(2)
215.3
378.9
(43)%
Net favorable prior year reserve
development
15.1
3.9
287%
62.9
22.1
185%
Net investment income
38.7
17.1
126%
119.5
40.7
194%
Combined ratio
81.4
%
66.2
%
15.2 pts
82.1
%
91.9
%
(9.8) pts
Operating ROE(1)
6.3
%
7.0
%
(0.7) pts
22.2
%
4.4
%
17.8 pts
Operating ROAE(1)
5.9
%
6.8
%
(0.9) pts
18.8
%
4.5
%
14.3 pts
(1) Operating net income,
Operating EPS, Operating ROE and Operating ROAE are non-GAAP
financial measures. See definition and reconciliation in “Non-GAAP
Financial Measures.”
(2) NM - Not meaningful
Segment Results
Specialty Segment
The following table is a summary of our Specialty segment’s
underwriting results:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
($ in millions)
Gross premiums written
$
423.0
$
371.7
$
51.3
$
2,241.3
$
1,616.2
$
625.1
Reinsurance premium ceded
(115.9
)
(116.3
)
0.4
(775.8
)
(558.8
)
(217.0
)
Net premiums written
307.1
255.4
51.7
1,465.5
1,057.4
408.1
Net premiums earned
335.3
251.4
83.9
1,203.3
849.4
353.9
Losses and loss adjustment expenses
(166.7
)
(98.8
)
(67.9
)
(583.1
)
(508.7
)
(74.4
)
Policy acquisition expenses
(61.9
)
(62.3
)
0.4
(289.1
)
(189.4
)
(99.7
)
Underwriting income
$
106.7
$
90.3
$
16.4
$
331.1
$
151.3
$
179.8
Loss ratio
49.7
%
39.3
%
10.4 pts
48.5
%
59.9
%
(11.4) pts
Policy acquisition expense ratio
18.5
%
24.8
%
(6.3) pts
24.0
%
22.3
%
1.7 pts
Underwriting ratio
68.2
%
64.1
%
4.1 pts
72.5
%
82.2
%
(9.7) pts
For the three months ended December 31, 2023, our underwriting
ratio in the Specialty segment increased by 4.1 points from the
prior year period, which was primarily driven by an increase in our
loss ratio, as described below.
For the twelve months ended December 31, 2023, our underwriting
ratio in the Specialty segment improved by 9.7 points from the
prior year, which was primarily driven by a decrease in our loss
ratio together with rate increases and improved pricing and terms
and conditions.
For the three and twelve months ended December 31, 2023, net
premiums earned increased primarily driven by an increase in net
premiums written as a result of new business, strong renewals, and
rate increases in the Property D&F, Marine and Aviation and
Aerospace lines of business.
The following table is a summary of our Specialty segment’s
losses and loss adjustment expenses:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
($ in millions)
Attritional losses
$
94.6
$
111.0
$
(16.4
)
$
381.9
$
300.9
$
81.0
Catastrophe and large losses
64.5
(9.5
)
74.0
160.9
218.8
(57.9
)
(Favorable)/adverse prior year
development
7.6
(2.7
)
10.3
40.3
(11.0
)
51.3
Losses and loss adjustment expenses
$
166.7
$
98.8
$
67.9
$
583.1
$
508.7
$
74.4
Loss ratio - attritional losses
28.2
%
44.2
%
(16.0) pts
31.7
%
35.4
%
(3.7) pts
Loss ratio - catastrophe and large
losses
19.2
%
(3.8
)%
23.0 pts
13.5
%
25.8
%
(12.3) pts
Loss ratio - prior accident years
2.3
%
(1.1
)%
3.4 pts
3.3
%
(1.3
)%
4.6 pts
Loss ratio
49.7
%
39.3
%
10.4 pts
48.5
%
59.9
%
(11.4) pts
For the three months ended December 31, 2023, our loss ratio in
the Specialty segment increased by 10.4 points. For the twelve
months ended December 31, 2023, our loss ratio in the Specialty
segment improved by 11.4 points.
The catastrophe and large losses in the three months ended
December 31, 2023 related primarily to losses in connection with
the Viasat-3 satellite deployment failure, the Sudan Conflict and
other loss events in our Property D&F line of business. This
compared to prior year period catastrophe and large losses related
to reversal of certain Hurricane Ian losses originally recorded in
the three months ended September 30, 2022.
The catastrophe and large losses in the year ended December 31,
2023 related primarily to the Sudan Conflict, losses in connection
with the Viasat-3 satellite deployment failure, losses from severe
convective storms in the U.S., and other loss events in various
lines of business including Property D&F, Energy, and Marine.
This compared to the prior year catastrophe and large losses
related to the Ukraine Conflict in our Aviation and Aerospace line
of business, and Hurricane Ian in our Property D&F line of
business.
The adverse prior year development for the three months ended
December 31, 2023 primarily related to adverse development on
Hurricane Ian in our Property D&F line of business.
The adverse prior year development for the year ended December
31, 2023 related primarily to increased estimates on two contracts
in the Energy line of business, adverse development within the
Property D&F and Aviation and Aerospace lines of business, and
updated legal expense provisions in the reserve for the Ukraine
Conflict.
Bespoke Segment
The following table is a summary of our Bespoke segment’s
underwriting results:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
($ in millions)
Gross premiums written
$
353.2
$
222.7
$
130.5
$
720.4
$
795.7
$
(75.3
)
Reinsurance premium ceded
(127.1
)
(29.9
)
(97.2
)
(304.4
)
(229.1
)
(75.3
)
Net premiums written
226.1
192.8
33.3
416.0
566.6
(150.6
)
Net premiums earned
95.2
105.1
(9.9
)
375.6
384.4
(8.8
)
Losses and loss adjustment expenses
(19.5
)
(23.1
)
3.6
(92.0
)
(118.9
)
26.9
Policy acquisition expenses
(35.3
)
(40.5
)
5.2
(140.4
)
(135.3
)
(5.1
)
Underwriting income
$
40.4
$
41.5
$
(1.1
)
$
143.2
$
130.2
$
13.0
Loss ratio
20.5
%
22.0
%
(1.5) pts
24.5
%
30.9
%
(6.4) pts
Policy acquisition expense ratio
37.1
%
38.5
%
(1.4) pts
37.4
%
35.2
%
2.2 pts
Underwriting ratio
57.6
%
60.5
%
(2.9) pts
61.9
%
66.1
%
(4.2) pts
For the three and twelve months ended December 31, 2023, our
underwriting ratio in the Bespoke segment improved by 2.9 points
and 4.2 points, respectively, from the prior year period, which was
primarily driven by a decrease in our loss ratio.
For the three months ended December 31, 2023, gross premiums
written increased as a result of new business, predominantly
structured credit deals, in addition to other contracts that had
improved terms and conditions than in the three months ended
September 30, 2023.
For the twelve months ended December 31, 2023, gross premiums
written decreased as we were more selective on new business
written. The Bespoke market is weighted towards opportunities which
are non-recurring, and a number of factors impacted our view of
risk in this segment in 2023, including geopolitical instability,
inflation and rising interest rates.
The following table is a summary of our Bespoke segment’s losses
and loss adjustment expenses:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
($ in millions)
Attritional losses
$
25.7
$
12.3
$
13.4
$
106.3
$
93.3
$
13.0
Large losses
(0.1
)
27.7
(27.8
)
20.4
54.5
(34.1
)
Favorable prior year development
(6.1
)
(16.9
)
10.8
(34.7
)
(28.9
)
(5.8
)
Losses and loss adjustment expenses
$
19.5
$
23.1
$
(3.6
)
$
92.0
$
118.9
$
(26.9
)
Loss ratio - attritional losses
27.0
%
11.7
%
15.3 pts
28.3
%
24.3
%
4.0 pts
Loss ratio - large losses
(0.1
)%
26.4
%
(26.5) pts
5.4
%
14.1
%
(8.7) pts
Loss ratio - prior accident years
(6.4
)%
(16.1
)%
9.7 pts
(9.2
)%
(7.5
)%
(1.7) pts
Loss ratio
20.5
%
22.0
%
(1.5) pts
24.5
%
30.9
%
(6.4) pts
For the three and twelve months ended December 31, 2023, our
loss ratio in the Bespoke segment improved driven by lower large
losses in the current year periods.
There were no large losses in the three months ended December
31, 2023, compared to a single large loss in our Other Bespoke line
of business in the three months ended December 31, 2022.
The large losses in the twelve months ended December 31, 2023
related to two intellectual property losses in our Credit &
Political Risk line of business. This compared to large losses in
the twelve months ended December 31, 2022 related to the Ukraine
Conflict in our Credit & Political Risk line of business and a
single loss in our Other Bespoke line of business.
The favorable prior year development for the three and twelve
months ended December 31, 2023 was driven by better than expected
loss emergence across the majority of underlying lines of
business.
Reinsurance Segment
The following table is a summary of our Reinsurance segment’s
underwriting results:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
($ in millions)
Gross premiums written
$
7.7
$
0.8
$
6.9
$
617.3
$
606.2
$
11.1
Reinsurance premium ceded
8.3
(24.8
)
33.1
(362.2
)
(371.8
)
9.6
Net premiums written
16.0
(24.0
)
40.0
255.1
234.4
20.7
Net premiums earned
77.3
51.2
26.1
253.7
266.7
(13.0
)
Losses and loss adjustment expenses
(3.0
)
2.3
(5.3
)
(23.7
)
(202.6
)
178.9
Policy acquisition expenses
(23.4
)
(18.3
)
(5.1
)
(69.0
)
(59.7
)
(9.3
)
Underwriting income
$
50.9
$
35.2
$
15.7
$
161.0
$
4.4
$
156.6
Loss ratio
3.9
%
(4.5
)%
8.4 pts
9.3
%
76.0
%
(66.7) pts
Policy acquisition expense ratio
30.3
%
35.7
%
(5.4) pts
27.2
%
22.4
%
4.8 pts
Underwriting ratio
34.2
%
31.2
%
3.0 pts
36.5
%
98.4
%
(61.9) pts
For the three months ended December 31, 2023, our underwriting
ratio in the Reinsurance segment increased by 3.0 points from the
prior year period, which was primarily driven by an increase in our
loss ratio.
For the twelve months ended December 31, 2023, our underwriting
ratio in the Reinsurance segment improved by 61.9 points from the
prior year, which was primarily driven by favorable prior year
development and a reduction in catastrophe and large losses.
For the three months ended December 31, 2023 net premiums earned
increased driven by the impact of our outwards reinsurance
contracts.
For the twelve months ended December 31, 2023 net premiums
earned decreased as 2022 benefited from the earnings of higher net
premiums written in 2021.
The following table is a summary of our Reinsurance segment’s
losses and loss adjustment expenses:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
Change
2023
2022
Change
($ in millions)
Attritional losses
$
8.5
$
3.5
$
5.0
$
58.2
$
79.2
$
(21.0
)
Catastrophe and large losses
11.1
(21.5
)
32.6
34.0
105.6
(71.6
)
(Favorable)/adverse prior year
development
(16.6
)
15.7
(32.3
)
(68.5
)
17.8
(86.3
)
Losses and loss adjustment expenses
$
3.0
$
(2.3
)
$
5.3
$
23.7
$
202.6
$
(178.9
)
Loss ratio - attritional losses
11.0
%
6.8
%
4.2 pts
22.9
%
29.7
%
(6.8) pts
Loss ratio - catastrophe and large
losses
14.4
%
(42.0
)%
56.4 pts
13.4
%
39.6
%
(26.2) pts
Loss ratio - prior accident years
(21.5
)%
30.7
%
(52.2) pts
(27.0
)%
6.7
%
(33.7) pts
Loss ratio
3.9
%
(4.5
)%
8.4 pts
9.3
%
76.0
%
(66.7) pts
The catastrophe and large losses in the Reinsurance segment for
the three months ended December 31, 2023 related to severe
convective storms in the U.S. in our Property Reinsurance line of
business. This compared to the release of incurred but not reported
losses in the prior year period related primarily to Hurricane Ian,
partially offset by losses related to Australian floods.
The catastrophe losses in the Reinsurance segment for the twelve
months December 31, 2023 related primarily to the Hawaii wildfires,
severe convective storms in the U.S., and Cyclone Gabrielle in New
Zealand, compared to prior year losses related to Hurricane Ian,
Australian floods and European storms.
For the three months ended December 31, 2023, favorable prior
year development related to loss reductions from various events and
benign claim experience.
For the twelve months December 31, 2023, favorable prior year
development related primarily to loss reductions from Hurricane Ian
as well as favorable attritional experience driven by a benign
claim experience on prior accident years.
Other Underwriting Expenses
We do not allocate Fidelis MGU commissions or general and
administrative expenses by segment.
Fidelis MGU Commissions
For the three and twelve months ended December 31, 2023, our
Fidelis MGU commissions were $77.9 million and $225.3 million,
respectively, and are comprised of ceding and profit commissions as
part of the Framework Agreement effective from January 1, 2023.
Fidelis MGU manages origination, underwriting, underwriting
administration, outwards reinsurance and claims handling under
delegated authority agreements with the Group.
The following table summarizes Fidelis MGU commissions
earned:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
($ in millions)
Ceding commission expense
$
58.8
$
—
$
166.2
$
—
Profit commission expense
19.1
—
59.1
—
Total Fidelis MGU commissions
$
77.9
$
—
$
225.3
$
—
General and Administrative Expenses
For the three and twelve months ended December 31, 2023, our
general and administrative expenses were $25.7 million and $82.7
million, respectively (2022: $29.4 million and $165.5 million). The
decreases were primarily related to the reduced headcount and
related costs following the consummation of the Separation
Transactions.
Investment Results
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
($ in millions)
Net realized and unrealized investment
gains/(losses)
$
7.3
$
3.8
$
4.9
$
(33.7
)
Net investment income
38.7
17.1
119.5
40.7
Net investment return
$
46.0
$
20.9
$
124.4
$
7.0
Net Realized and Unrealized Investment Gains/(Losses)
The net realized and unrealized investment gains in the three
months ended December 31, 2023 resulted from a decrease in our
allowance for credit losses and unrealized gains on other
investments that are recorded at fair value. The net realized and
unrealized investment gains for the year ended December 31, 2023
resulted from realized and unrealized gains on other investments,
partially offset by net realized losses on sales of fixed maturity
securities.
Net Investment Income
The increase in our net investment income in the three and
twelve months ended December 31, 2023 was due to increases in
interest rates during 2022 and 2023, where the short duration
nature of our portfolio meant that we were reinvesting at higher
rates.
Conference Call
Fidelis will host a teleconference to discuss its financial
results on Friday, March 1, 2024 at 9:00 a.m Eastern time. The call
may be accessed by dialing 1-888-886-7786 (U.S. callers), or
1-206-962-3782 (international callers), and entering the passcode
6281805 approximately 10 minutes in advance of the call. A live,
listen-only webcast of the call will also be available via the
Investor Relations section of the Company’s website at
https://investors.fidelisinsurance.com/. A recording of the webcast
will be available in the Investor Relations section of the
Company’s website approximately two hours after the event concludes
and will be archived on the site for one year.
About Fidelis
Fidelis Insurance Holdings Limited (NYSE: FIHL) is a global
specialty insurer, leveraging strategic partnerships to offer
innovative and tailored insurance solutions.
We have a highly diversified portfolio focused on three
segments: Specialty, Bespoke, and Reinsurance, which we believe
allows us to take advantage of the opportunities presented by
evolving (re)insurance markets, proactively shift our business mix
across market cycles, and produce superior underwriting
returns.
Headquartered in Bermuda, with worldwide offices including
Ireland and the UK, Fidelis Insurance operating companies have a
financial strength rating of A- (Excellent) from AM Best, S&P
and Fitch. For additional information about Fidelis Insurance, our
people, and our products please visit our website at
www.FidelisInsurance.com
Non-GAAP Financial Measures
This Press Release includes, and the related conference call
will include, certain financial measures that are not calculated in
accordance with generally accepted accounting principles in the
U.S. (“U.S. GAAP”) including Operating net income, Operating EPS,
Operating ROE and Operating ROAE, and therefore are non-U.S. GAAP
financial measures. Reconciliations of such measures to the most
comparable U.S. GAAP figures are included in the attached financial
information in accordance with Regulation G.
RPI Measure
Renewal price index (RPI) is a measure that Fidelis has used to
assess an approximate index of rate increases on a particular set
of contracts, using the base of 100% for the rates for the relevant
prior year. Although management considers RPI to be an appropriate
statistical measure, it is not a financial measure that directly
relates to the Fidelis consolidated financial results. Management’s
calculation of RPI involves a degree of judgment in relation to
comparability of contracts and the relative impacts of changes in
price, exposure, retention levels, as well as any other changing
terms and conditions on the RPI calculation. Consideration is given
to potential renewals of a comparable nature so it does not reflect
every contract in Fidelis’ portfolio. The future profitability and
performance of a portfolio of contracts expressed within the RPI is
dependent upon many factors besides the trends in premium rates,
including policy terms, conditions and wording.
Safe Harbor Regarding Forward-Looking Statements
This press release (including the documents incorporated herein)
contains, and our officers and representatives may from time to
time make (including on our related conference call),
"forward-looking statements" which include all statements that do
not relate solely to historical or current facts and which may
concern our strategy, plans, projections or intentions and are made
pursuant to the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as: "anticipate,"
"intend," "plan," "goal," "seek," "believe," "project," "estimate,"
"expect," "strategy," "predict," "potential," "assumption,"
"future," "likely," "may," "should," "could," "will" and the
negative of these and also similar terms and phrases.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are qualified by
these cautionary statements, because they are based only on our
current beliefs, expectations and assumptions regarding the future
of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions, but are subject to significant business, economic and
competitive uncertainties, many of which are beyond our control or
are subject to change. Our actual results and financial condition
may differ materially from those indicated in the forward-looking
statements. Therefore, you should not rely on any of these
forward-looking statements.
Examples of forward-looking statements include, among others,
statements we make in relation to: discussion relating to net
income and net income per share; expected operating results, such
as revenue growth and earnings; our expectations regarding our
strategy and the performance of our business; information regarding
our estimates for catastrophes and other loss events; our liquidity
and capital resources; and expectations of the effect on our
financial condition of claims, litigation, environmental costs,
contingent liabilities and governmental and regulatory
investigations and proceedings.
Our actual results in the future could differ materially from
those anticipated in any forward-looking statements as a result of
changes in assumptions, risks, uncertainties and other factors
impacting us, many of which are outside our control, including: the
ongoing trend of premium rate hardening and factors likely to drive
continued rate hardening; expected growth across our portfolio; the
availability of outwards reinsurance and capital resources as
required; the development and pattern of earned and written
premiums impacting embedded premium value; changes in accounting
principles or the application thereof; the level of underwriting
leverage; the level and timing of catastrophe and other losses and
related reserves on the business we underwrite; the performance of
our investment portfolios; our strategic relationship with Fidelis
MGU; the maintenance of financial strength ratings; the impact of
global geopolitical and economic uncertainties impacting the lines
of business we write; the impact of tax reform and insurance
regulation in the jurisdictions where our businesses are located;
and those risks, uncertainties and other factors disclosed under
the section titled ‘Risk Factors’ in Fidelis Insurance Holdings
Limited’s final IPO prospectus filed pursuant to Rule 424(b)(4)
(Registration No. 333-271270) with the SEC on June 30, 2023 (which
such section is incorporated herein by reference), as well as
subsequent filings with the SEC available electronically at
www.sec.gov.
Any forward-looking statements, expectations, beliefs and
projections made by us in this release and on our related
conference call speak only as of the date on which they are made
and are expressed in good faith and our management believes that
there is reasonable basis for them, based only on information
currently available to us. However, there can be no assurance that
management’s expectations, beliefs, and projections will be
achieved and actual results may vary materially from what is
expressed or indicated by the forward-looking statements.
Furthermore, our past performance, and that of our management team
and of Fidelis MGU, should not be construed as a guarantee of
future performance. We undertake no obligation to publicly update
any forward-looking statement, whether written or oral, that may be
made from time to time, whether as a result of new information,
future developments or otherwise.
FIDELIS INSURANCE HOLDINGS
LIMITED
Consolidated Balance
Sheets
At December 31, 2023
(Unaudited) and December 31, 2022
(Expressed in millions of U.S.
dollars, except share and per share amounts)
December 31,
2023
December 31,
2022
Assets
Fixed maturity securities,
available-for-sale, at fair value (amortized cost: $3,271.4, 2022:
$2,160.8 (net of allowances for credit losses of $1.3, 2022:
$1.1))
$
3,244.9
$
2,050.9
Short-term investments,
available-for-sale, at fair value (amortized cost: $49.0, 2022:
$257.0 (net of allowances for credit losses of $nil, 2022:
$nil))
49.0
257.0
Other investments, at fair value
(amortized cost: $50.8, 2022: $126.3)
47.5
117.1
Total investments
3,341.4
2,425.0
Cash and cash equivalents
712.4
1,222.0
Restricted cash and cash equivalents
251.7
185.9
Accrued investment income
27.2
10.9
Premiums and other receivables (net of
allowances for credit losses of $17.3, 2022: $8.8)
2,209.3
1,862.7
Amounts due from Fidelis MGU (net of
allowances for credit losses of $nil, 2022: $nil)
173.3
—
Deferred reinsurance premiums
1,061.4
823.7
Reinsurance balances recoverable on paid
losses (net of allowances for credit losses of $nil, 2022:
$nil)
182.7
159.4
Reinsurance balances recoverable on
reserves for losses and loss adjustment expenses (net of allowances
for credit losses of $1.3, 2022: $1.0)
1,108.6
976.1
Deferred policy acquisition costs
(includes deferred Fidelis MGU commissions $164.1, 2022: $nil)
786.6
515.8
Other assets
173.5
131.0
Total assets
$
10,028.1
$
8,312.5
Liabilities and shareholders'
equity
Liabilities
Reserves for losses and loss adjustment
expenses
$
2,448.9
$
2,045.2
Unearned premiums
3,149.5
2,618.6
Reinsurance balances payable
1,071.5
1,057.0
Amounts due to Fidelis MGU
334.5
—
Long term debt
448.2
447.5
Preference securities ($0.01 par,
redemption price and liquidation preference $10,000)
58.4
58.4
Other liabilities
67.3
98.7
Total liabilities
7,578.3
6,325.4
Commitments and contingencies
Shareholders' equity
Common shares ($0.01 par, issued and
outstanding: 117,914,754, 2022: 194,545,370)
1.2
1.9
Additional paid-in capital
2,039.0
2,075.2
Accumulated other comprehensive loss
(27.0
)
(100.8
)
Retained earnings
436.6
0.5
Total shareholders' equity attributable
to common shareholders
2,449.8
1,976.8
Non-controlling interests
—
10.3
Total shareholders' equity including
non-controlling interests
2,449.8
1,987.1
Total liabilities, non-controlling
interests and shareholders' equity
$
10,028.1
$
8,312.5
FIDELIS INSURANCE HOLDINGS
LIMITED
Consolidated Statements of
Income and Comprehensive Income (Unaudited)
For the three and twelve
months ended December 31, 2023 and December 31, 2022
(Expressed in millions of U.S.
dollars except for share and per share amounts)
Three Months Ended
Year Ended
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Revenues
Gross premiums written
$
783.9
$
595.2
$
3,579.0
$
3,018.1
Reinsurance premiums ceded
(234.7
)
(171.0
)
(1,442.4
)
(1,159.7
)
Net premiums written
549.2
424.2
2,136.6
1,858.4
Change in net unearned premiums
(41.4
)
(16.5
)
(304.0
)
(357.9
)
Net premiums earned
507.8
407.7
1,832.6
1,500.5
Net realized and unrealized investment
gains/(losses)
7.3
3.8
4.9
(33.7
)
Net investment income
38.7
17.1
119.5
40.7
Other income/(loss)
(0.1
)
0.3
0.1
1.9
Total revenues before net gain on
distribution of Fidelis MGU
553.7
428.9
1,957.1
1,509.4
Net gain on distribution of Fidelis
MGU
—
—
1,639.1
—
Total revenues
553.7
428.9
3,596.2
1,509.4
Expenses
Losses and loss adjustment expenses
189.2
119.6
698.8
830.2
Policy acquisition expenses (includes
Fidelis MGU commissions of $77.9 and $225.3 (2022: $nil and
$nil))
198.5
121.1
723.8
384.4
General and administrative expenses
25.7
29.4
82.7
165.5
Corporate and other expenses
0.7
18.6
4.1
20.5
Net foreign exchange (gains)/losses
4.9
(2.7
)
4.1
(6.8
)
Financing costs
8.9
8.2
35.5
35.5
Total expenses
427.9
294.2
1,549.0
1,429.3
Income before income taxes
125.8
134.7
2,047.2
80.1
Income tax (expense)/benefit
102.5
(12.1
)
85.3
(17.8
)
Net income
228.3
122.6
2,132.5
62.3
Net income attributable to non-controlling
interests
—
(2.7
)
—
(9.7
)
Net income available to common
shareholders
$
228.3
$
119.9
$
2,132.5
$
52.6
Other comprehensive
income/(loss)
Unrealized gains/(losses) on
available-for-sale investments
$
66.9
$
14.5
$
82.4
$
(96.5
)
Income tax (expense)/benefit, all of which
relates to unrealized gains/(losses) on available-for-sale
investments
(8.3
)
0.7
(9.7
)
8.1
Currency translation adjustments
—
1.4
—
(1.1
)
Total other comprehensive
income/(loss)
58.6
16.6
72.7
(89.5
)
Comprehensive income/(loss)
attributable to common shareholders
$
286.9
$
136.5
$
2,205.2
$
(36.9
)
Per share data
Earnings per common share
Earnings per common share
$
1.94
$
0.62
$
18.65
$
0.27
Earnings per diluted common share
$
1.93
$
0.60
$
18.65
$
0.26
Weighted average common shares
outstanding
117,914,754
194,465,927
114,313,971
194,290,180
Weighted average diluted common shares
outstanding
118,249,860
199,412,376
114,324,683
199,323,854
FIDELIS INSURANCE HOLDINGS
LIMITED
Consolidated Segment Data
(Unaudited)
For the three and twelve
months ended December 31, 2023 and December 31, 2022
(Expressed in millions of U.S.
dollars)
Three Months Ended December
31, 2023
Specialty
Bespoke
Reinsurance
Other
Total
Gross premiums written
$
423.0
$
353.2
$
7.7
$
—
$
783.9
Net premiums written
307.1
226.1
16.0
—
549.2
Net premiums earned
335.3
95.2
77.3
—
507.8
Losses and loss adjustment expenses
(166.7
)
(19.5
)
(3.0
)
—
(189.2
)
Policy acquisition expenses
(61.9
)
(35.3
)
(23.4
)
(77.9
)
(198.5
)
General and administrative expenses
—
—
—
(25.7
)
(25.7
)
Underwriting income
106.7
40.4
50.9
(103.6
)
94.4
Net realized and unrealized investment
gains
7.3
Net investment income
38.7
Other loss
(0.1
)
Corporate and other expenses
(0.7
)
Net foreign exchange losses
(4.9
)
Financing costs
(8.9
)
Income before income taxes
125.8
Income tax expense
102.5
Net income
228.3
Net income attributable to non-controlling
interests
—
Net income available to common
shareholders
$
228.3
Losses and loss adjustment expenses
incurred - current year
(159.1
)
(25.6
)
(19.6
)
$
(204.3
)
Losses and loss adjustment expenses
incurred - prior accident years
(7.6
)
6.1
16.6
15.1
Losses and loss adjustment expenses
incurred - total
$
(166.7
)
$
(19.5
)
$
(3.0
)
$
(189.2
)
Underwriting Ratios
Loss ratio - current year
47.4
%
26.9
%
25.4
%
40.3
%
Loss ratio - prior accident years
2.3
%
(6.4
%)
(21.5
%)
(3.0
%)
Loss ratio - total
49.7
%
20.5
%
3.9
%
37.3
%
Policy acquisition expense ratio
18.5
%
37.1
%
30.3
%
23.7
%
Underwriting ratio
68.2
%
57.6
%
34.2
%
61.0
%
Fidelis MGU commissions ratio
15.3
%
General & administrative expense
ratio
5.1
%
Combined ratio
81.4
%
Three Months Ended December
31, 2022
Specialty
Bespoke
Reinsurance
Other
Total
Gross premiums written
$
371.7
$
222.7
$
0.8
$
—
$
595.2
Net premiums written
255.4
192.8
(24.0
)
—
424.2
Net premiums earned
251.4
105.1
51.2
—
407.7
Losses and loss adjustment expenses
(98.8
)
(23.1
)
2.3
—
(119.6
)
Policy acquisition expenses
(62.3
)
(40.5
)
(18.3
)
—
(121.1
)
General and administrative expenses
—
—
—
(29.4
)
(29.4
)
Underwriting income
90.3
41.5
35.2
(29.4
)
137.6
Net realized and unrealized investment
gains
3.8
Net investment income
17.1
Other income
0.3
Corporate and other expenses
(18.6
)
Net foreign exchange gains
2.7
Financing costs
(8.2
)
Income before income taxes
134.7
Income tax expense
(12.1
)
Net income
122.6
Net income attributable to non-controlling
interests
(2.7
)
Net income available to common
shareholders
$
119.9
Losses and loss adjustment expenses
incurred - current year
(101.5
)
(40.0
)
18.0
$
(123.5
)
Losses and loss adjustment expenses
incurred - prior accident years
2.7
16.9
(15.7
)
3.9
Losses and loss adjustment expenses
incurred - total
$
(98.8
)
$
(23.1
)
$
2.3
$
(119.6
)
Underwriting Ratios
Loss ratio - current year
40.4
%
38.1
%
(35.2
%)
30.3
%
Loss ratio - prior accident years
(1.1
%)
(16.1
%)
30.7
%
(1.0
%)
Loss ratio - total
39.3
%
22.0
%
(4.5
%)
29.3
%
Policy acquisition expense ratio
24.8
%
38.5
%
35.7
%
29.7
%
Underwriting ratio
64.1
%
60.5
%
31.2
%
59.0
%
General & administrative expense
ratio
7.2
%
Combined ratio
66.2
%
Year ended December 31,
2023
Specialty
Bespoke
Reinsurance
Other
Total
Gross premiums written
$
2,241.3
$
720.4
$
617.3
$
—
$
3,579.0
Net premiums written
1,465.5
416.0
255.1
—
2,136.6
Net premiums earned
1,203.3
375.6
253.7
—
1,832.6
Losses and loss adjustment expenses
(583.1
)
(92.0
)
(23.7
)
—
(698.8
)
Policy acquisition expenses
(289.1
)
(140.4
)
(69.0
)
(225.3
)
(723.8
)
General and administrative expenses
—
—
—
(82.7
)
(82.7
)
Underwriting income
331.1
143.2
161.0
(308.0
)
327.3
Net realized and unrealized investment
gains
4.9
Net investment income
119.5
Other income
0.1
Net gain on distribution of Fidelis
MGU
1,639.1
Corporate and other expenses
(4.1
)
Net foreign exchange losses
(4.1
)
Financing costs
(35.5
)
Income before income taxes
2,047.2
Income tax expense
85.3
Net income
2,132.5
Net income attributable to non-controlling
interests
—
Net income available to common
shareholders
$
2,132.5
Losses and loss adjustment expenses
incurred - current year
(542.8
)
(126.7
)
(92.2
)
$
(761.7
)
Losses and loss adjustment expenses
incurred - prior accident years
(40.3
)
34.7
68.5
62.9
Losses and loss adjustment expenses
incurred - total
$
(583.1
)
$
(92.0
)
$
(23.7
)
$
(698.8
)
Underwriting Ratios
Loss ratio - current year
45.2
%
33.7
%
36.3
%
41.5
%
Loss ratio - prior accident years
3.3
%
(9.2
%)
(27.0
%)
(3.4
%)
Loss ratio - total
48.5
%
24.5
%
9.3
%
38.1
%
Policy acquisition expense ratio
24.0
%
37.4
%
27.2
%
27.2
%
Underwriting ratio
72.5
%
61.9
%
36.5
%
65.3
%
Fidelis MGU commissions ratio
12.3
%
General & administrative expense
ratio
4.5
%
☺Combined ratio
82.1
%
Year ended December 31,
2022
Specialty
Bespoke
Reinsurance
Other
Total
Gross premiums written
$
1,616.2
$
795.7
$
606.2
$
—
$
3,018.1
Net premiums written
1,057.4
566.6
234.4
—
1,858.4
Net premiums earned
849.4
384.4
266.7
—
1,500.5
Losses and loss adjustment expenses
(508.7
)
(118.9
)
(202.6
)
—
(830.2
)
Policy acquisition expenses
(189.4
)
(135.3
)
(59.7
)
—
(384.4
)
General and administrative expenses
—
—
—
(165.5
)
(165.5
)
Underwriting income
151.3
130.2
4.4
(165.5
)
120.4
Net realized and unrealized investment
losses
(33.7
)
Net investment income
40.7
Other income
1.9
Corporate and other expenses
(20.5
)
Net foreign exchange gains
6.8
Financing costs
(35.5
)
Income before income taxes
80.1
Income tax expense
(17.8
)
Net income
62.3
Net income attributable to non-controlling
interests
(9.7
)
Net income available to common
shareholders
$
52.6
Losses and loss adjustment expenses
incurred - current year
(519.7
)
(147.8
)
(184.8
)
$
(852.3
)
Losses and loss adjustment expenses
incurred - prior accident years
11.0
28.9
(17.8
)
22.1
Losses and loss adjustment expenses
incurred - total
$
(508.7
)
$
(118.9
)
$
(202.6
)
$
(830.2
)
Underwriting Ratios
Loss ratio - current year
61.2
%
38.4
%
69.3
%
56.8
%
Loss ratio - prior accident years
(1.3
%)
(7.5
%)
6.7
%
(1.5
%)
Loss ratio - total
59.9
%
30.9
%
76.0
%
55.3
%
Policy acquisition expense ratio
22.3
%
35.2
%
22.4
%
25.6
%
Underwriting ratio
82.2
%
66.1
%
98.4
%
80.9
%
General & administrative expense
ratio
11.0
%
Combined ratio
91.9
%
FIDELIS INSURANCE HOLDINGS LIMITED
NON-GAAP FINANCIAL MEASURES RECONCILIATION
(UNAUDITED)
Operating net income: is a non-GAAP financial measure of
our performance which does not consider the impact of certain
non-recurring and other items that may not properly reflect the
ordinary activities of our business, its performance or its future
outlook. This measure is calculated as net income available to
holders of common shares excluding net gain on distribution of
Fidelis MGU, net realized and unrealized investment gains/(losses),
net foreign exchange gains/(losses), and corporate and other
expenses which include warrant costs, reorganization expenses, any
non-recurring income and expenses, and the income tax
(benefit)/expense on these items and the 2023 establishment of a
net deferred tax asset related to the implementation of the Bermuda
corporate income tax.
Return on average common equity (“ROAE”): represents net
income divided by average common shareholders’ equity.
Operating return on average common equity (“Operating
ROAE”): is a non-GAAP financial measure that represents a
meaningful comparison between periods of our financial performance
expressed as a percentage and is calculated as operating net income
divided by adjusted average common shareholders’ equity.
Operating net income per diluted share (“Operating EPS”):
is a non-GAAP financial measure that represents a valuable measure
of profitability and enables investors, analysts, rating agencies
and other users of its financial information to more easily analyze
the Group’s results in a manner similar to how management analyzes
the Group’s underlying business performance. Operating EPS is
calculated by dividing operating net income by the diluted weighted
average common shares outstanding.
Operating return on opening common equity (“Operating
ROE”): is a non-U.S. GAAP measure that represents a meaningful
comparison between periods of our financial performance expressed
as a percentage and is calculated as operating net income divided
by adjusted opening common shareholders’ equity.
The table below sets out the calculation of the adjusted common
shareholders’ equity, operating net income, ROAE, Operating ROE,
Operating ROAE and Operating EPS, for the three and twelve months
ended December 31, 2023 and 2022.
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
($ in millions)
Average common shareholders'
equity
$
2,305.0
$
1,907.3
$
2,213.3
$
1,995.4
Opening common shareholders' equity
2,160.1
1,837.8
1,976.8
2,013.9
Adjustments related to the Separation
Transactions
—
—
(178.4
)
—
Adjusted opening common shareholders’
equity
2,160.1
1,837.8
1,798.4
2,013.9
Closing common shareholders' equity
2,449.8
1,976.8
2,449.8
1,976.8
Adjusted average common shareholders'
equity
2,305.0
1,907.3
2,124.1
1,995.4
Net income available to common
shareholders
228.3
119.9
2,132.5
52.6
Adjustment for net gain on distribution of
Fidelis MGU
—
—
(1,639.1
)
—
Adjustment for net realized and unrealized
investment (gains)/losses
(7.3
)
(3.8
)
(4.9
)
33.7
Adjustment for net foreign exchange
(gains)/losses
4.9
(2.7
)
4.1
(6.8
)
Adjustment for corporate and other
expenses
0.7
18.6
4.1
20.5
Income tax expense benefit (1)
(91.2
)
(2.7
)
(97.8
)
(10.5
)
Operating net income
$
135.4
$
129.3
$
398.9
$
89.5
ROAE
9.9
%
6.3
%
96.3
%
2.6
%
Operating ROE
6.3
%
7.0
%
22.2
%
4.4
%
Operating ROAE
5.9
%
6.8
%
18.8
%
4.5
%
Operating EPS
$
1.15
$
0.65
$
3.49
$
0.45
(1) Income tax benefit on
adjustments to Net income available to common shareholders. The
2023 Income tax benefit includes the establishment of a net
deferred tax asset of $90.0 million related to the implementation
of the Bermuda corporate income tax.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240229823745/en/
Investor Contact: Fidelis Insurance Group Miranda Hunter
(441) 279 2561 miranda.hunter@fidelisinsurance.com
Media Contacts: Fidelis Insurance Group James Dumelow 44
778 904 0954 James.Dumelow@fidelisinsurance.com
Kekst CNC Fidelis@kekstcnc.com
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