FIHL - Earnings call transcript Q1 2024 | Fidelis Insurance Holdings Limited

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Operator

Good morning, ladies and gentlemen, and welcome to the Fidelis Insurance Holdings First Quarter 2024 Earnings Conference Call. [Operator Instructions]. With that, I'll now turn the call over to Miranda Hunter, Head of Investor Relations. Ms. Hunter, please go ahead.

Miranda Hunter

to conference Insurance call. welcome of first and earnings XXXX morning the Group Fidelis quarter Good With CEO; our and today Allan me are Decleir, CFO. Dan Burrows, our

on in everyone the Before a in statements report with basis looking SEC number subject uncertainties. assessments or statements. expressed have our based and section differ annual to to and I'd give are we filed XXXX forward Form These that achieved. remind prove the implied. of will can reasonable be statements uncertainties management's on may XX-F begin, materially may include risks believe made including are call, no Consequently, we risks to from upon the a during expectations results These assurance the when we assumptions question-and-answer like those March forward-looking are XXth.Although made, expectations described that these and reflected current statements and actual

affect available call non-GAAP turn each our US I'll GAAP is factors performance. be Dan. including For filed furnished on our found website in information, also may report financial that, from measure that with reports review by to certain more for fidelisinsurance.com. to with investors time and the us on are Management to the measures the yesterday, non-GAAP the other should make on time. financial reconciliation press will which and earnings periodic release can SEC SEC of also that current future And The to risks reference with X-K Form over contains performance, our

Daniel Burrows

XX.X% that position delivered the first quarter our written lead core increased underwriting and ratio of quarter, welcome diversified generate expectations. excellent of and pleased were a our alpha everyone, strong XX.X%, growing business.In the These into sustained deliver we footprint which growth, Fidelis and hard business. premiums our achieving leaning earnings both and capabilities results, and to combined capitalized our to year growth conditions, morning, reflect with of the across successfully as Group first profitable very of book to Good by results on we broadening continued market Insurance Miranda. the you, selection lines, Thank our line our well start call. leveraging I'm the we risk mature report in to strong

see the of market. We XX%. of XXX%, line verticalized with Again, also first for across demonstrating share preferential continue our with ability achieve value RPI to an strong another to positive diluted portfolio returns quarter in ROAE book delivered operating an for of pricing in our expectations, course terms common $XX.XX. we annualized with our a We per grew

the XX% year, in on capacity remain of greater exposed full to as premium the of we in the year. a generate half range the we XX% our ROAE For track portion to earn second

and As and the underwriters, what be we the you cross strength our casualty respond positioning underwriting capitalize us and attended our the Each discipline, our well each is working opportunities and calls, throughout individual the a we reward reminder, a to would and demonstrate, lead market brokers lines. there to in discuss relationships scale, of XXs flexibility, and opportunity. to grow the decades.We across and combined Group positioned to risk giving our in seen help our deep we we results They partnership. ratios structure deliver clients risk. write quickly are our all across have and have to And strategy market Insurance ability cycle. insight are of offering which both believe not lines, our our entire sell portfolio, by dynamics have short the provide which enhance leveraging calls daily portfolio, to business strategy risks, specialty a target is are on on in with held diversified constructed high Fidelis areas mid exactly deploy attractive forum believe continues as Fidelis access to where capital were best to the intended, market as These

continue We attractive XX -- where with participation our and and capitalizing the the we and across lines broadening partnership delivered prior within the execute Lloyd's Syndicate portfolio.In direct our quarter, we investment announced capital with XX.X% underwriting opportunities pricing the see of business. of growth first to broader a strategy in new data and being footprint period, great our our and faculty property to example core our are we compared on XX

share For of strategy targeted providing across additional insurance a is why launch with the platform Lloyd's long-term and right access to access to to expertise the to and Insurance well. This business The that enables a licensing which so multiple add underwriting taking the ratings Fidelis a to more to our positions. of to be take risk expected date business enhanced example business. relationship by lead portfolio, credit perfect Group vehicle Fidelis our align the our variable July across current of us below this works policies appetite. only our will Syndicate channels than Xst, is extension reinsurance growth partnership leverage

to to that, refusal the consider we in allows right us air participating of March wanted which the appetite.As we market. this the term will capital, lines enable on impact have industry Baltimore risk do the designed long with Bridge the first specialty match risk in process right more XXth quarter, variable collapse, the we events Our touch right to exercising where insurance agreement to our was with us just

years complexities Given event, fully take surrounding resolve. to it could the the

through performance, be another growth, walk to any pass resulting financial manageable bridge to I'll I'm We our from loss and monitor quarter in within positions continue our first more pleased which strong results the us to and will of summary, over return.With collapse developments diversified for our year In portfolio. profitability, with believe it Allan that, very detail.

Allan Decleir

earnings everyone quarter welcome first also Thanks, like call. and Dan, I'd joining our to

As an on return Dan million quarter we common average an XX%. excellent had equity $X.XX first of net operating or share diluted income annualized to per of operating mentioned, XX.X and

this or expectations what aerospace of class growth reminder, at and Our XX.X book period, saw which being XX.X% year. in weighted XX% Specialty saw marine excellent at in from driven or the of our other billion our line had property. year property common from within million, XX.X for our benefiting prior we within saw we by segment, X.X the business. with specialty drivers line billion. XXXX. across growth by book seasonality saw quarter to large an DNF, specialty more and growth specialty We we This XXX.X overall a Marines key there first of and March million.As to quarter book with across our X prior in an with XX.X% value gross Other of heavily quarter aviation and gross is increase XX the the in $X.XX.Looking in to the of were growth was in of quarter included XXXX. while primarily in part of increase and was compared diluted saw premiums continued million year. increase year, the top of of We the property rating a Bespoke with consistent this year. the be was the more premiums growth even million, growth environment X.X% DNF, quarters. which premiums with expect specialty premium to versus of periods half first anticipate is line the driver grew $XX last written, by we driven which the an This consistent be million of an for first to broadly written with we strong to The growth new distribution XX.X% prior XX.X is share XXX.X increase

grew or property XX.X segment driven XX.X% by reinsurance reinsurance. by Our million

book we strong segments. variable As in three our at our a our new call, end and XXXX, ahead, XX Dan our Lloyd of from of RPIs discussed share, and will of one-one in through XXX%.Looking X.X% each we XX third Syndicate write flow quarter approximately one-one, achieving the the saw renewals in Syndicate premiums year investment reinsurance

in XX.X% growth the year to materially consistent with quarter our first XXXX the written. in expectations On growth Our premium's year. we earned impact basis, for the premiums Syndicate from a net and growth XXX million of delivered prior of increase participation won't our this an

noted catastrophe premiums As property of the our by heavily more basis, Dan, premiums earned on the are line straight a weighted half back not year.

which composed combined a at million, Bridge and we This a had were attritional Our which year of or million compared for in period. excellent underwriting XX.X% the losses, prior XX.X% of the quarter attritional resulted catastrophe, development.Looking XX.X%. XXX first ratio Baltimore XX% quarter, XXX.X of XXX.X for million XX% million for prior in year performance XX.X the in losses, fee and and or quarter, to losses large a Catastrophe is first loss provision first collapse. the the ratio large losses, included includes

to addition have and and play any IBNR is that few exposure we based anticipate other a including line lines probabilistic to our aerospace, in settlement DNF. and smaller will take market position. various marine of collapse, to property our on our events and Baltimore business, set We the in as aviation Bridge years out In Specific a with that provision model.

XX.X for by specialty XX.X prior the million versus of was period. driven primarily quarter, And million, bespoke and better-than-expected in Of activity. was the all million, net quarter have prior XX favorable loss million X.X We was this the for year million. X.X million reinsurance year development XX the was

parties general the The in profit XX.X ratio of points X.X for investment quarter for quarter policy due period. consistent combined strong combined expenses now points ratio XXXX, ratio the acquisition the which to quarter. expenses period. year.Looking X.X Turning for the expenses, of our at Net and from the first quarter the compared the the investments. the prior related partnership were results of the increased to commissions with accrued of million to the And underwriting points X.X compared XX points combined for finally, to points of prior prior XX.X income were million ratio with XX.X combined year year in commissions the to of Fidelis in quarter were administrative the third

XXXX, resulting the realized with with of yield lengthened of XXst, remains $X.X securities We rating of approximately years. we the $XXX.X the slightly of high a with March securities XXXX, proceeds yield securities sold X.X%. At first loss Duration of to average X.X%. minus yield quarter very of income During in an million average fixed an X.X%, at a book average AA of reinvested X.X purchase in million. has book

Turning maintaining balance committed a sheet. management, remain to strong to we capital

and of business outwards using Second, source in reinsurance capital As I of support mentioned aligned management combination grew lines share and and a finally, grow of last allocating dividends.Specifically, XX.X%. a the quarter, as attractive our through and first our the strategy capital and premiums buybacks market; returning capital of growth excess includes our we across our to capital; segments flexible as quarter, premium overall we during mentioned, to shareholders first book targeted seeing

reinsurance, US, events in XX.X Subsequent million repurchases cover --of another outwards capacity of of outwards have sponsored of bond earthquake and repurchased common to through March main protection and Regarding storm of million our returned million $XXX we $XX.X our Herbie and shareholders we to we new Re $X XX, two for million. program, to the $X.X share. enhancing overall million dividends

$XX.X I'm excellent pleased quarter our share today, of very remaining repurchase XXXX. of As in summary, first in financial performance In the we authorization. have our with million

focus additional and turn remarks. to we continue ahead, underwriting value now confident profitable to I'll the delivering Dan back future are Looking for on we book it about growth. as

Daniel Burrows

Thanks, Allan.

you entered position. strong incredibly we As an see, in XXXX can

our market and opportunities are capitalize portfolio We operating on our actively across look are pricing quarter, hard a significant first at levels this the attractive XXX%. segment, is largest with and lines, in in attractive conditions pricing practically in across specialty remain of presents.Taking which specialty, sustained our closer achieved a remains RPIs and we the to of our core

top our of classes. is specialty for our As marine three properties, direct these be to a reminder, of a and key aim and market drivers aerospace, and faculty,

levels demand in and response climate facultative Our coming and property an natural a and severe billion XXXX, XXXX remained no with several meaningful including attractive and of catastrophe the since driven carriers.Following pricing increased has direct events, XXXX and market dislocated start capital given to larger the number US of supply of by $XXX appetite of new increased losses to events, natural in. the exit capacity frequency in of has weather late for active

seeing quarter. performance deploy across Marine us during to see also of sell business selection continue where of with leadership clients. ability We multiple key line with cross this and leverage and to market and and several line offer opportunities required we've this the this lines.We our in we're continued terms we particularly our significant to strong to solutions year. attractive innovate, across wins business and capacity meaningful opportunities capacity the conditions for ourselves had tried position We've targeted construction line are remains us are attractive set is to pleased in pricing approach, significant able where marine large to new risk our our to a enabling

established an in, participate are create in looking We leader classes we performance. the to alpha always

position nature with considering ahead, as at expect to when expertise In growth specialty underwriting to the in with along commoditized, regular underwriting barriers attractive a nature product premiums highly relationship our our us specialty to this business enables bespoke, schedule. The predictable typical this market to risks. low an across the made our unique to continues do Looking for contribute a established of offer the lines to growth more continue particularly leader, returns, high clients exposure less we less the to follow that volatility throughout market and our brokers industry portfolio, nature of our four underlying and maintain XXXX. performance given results with others the not tailored of cycle.Given delivers tailor entry

The portfolio with line fiscal solid was with in first for a premium expectations. the quarter start

pipeline the line risk of and year the continue political our is XXXX. ahead, expect risk we Looking quarter the transfer deals for prior second of structured to and period opportunities rest for with in

and driver for of targeted points at attachment deploying continue practice we a quarter segment. was and clients, for pricing to of capacity strategies an environment, reinsurance, this with terms excellent core execute Rate our enhanced this in an remains an Finally, quarter, we adjustment past achieve conditions was given and growth able higher the few were and XXX% our year. the there leadership.RPI year increases to for price portfolio premium was over for from main the thoughts across rate on years, our

to US whilst for layers. we and looking clients no been private see an buy beginning more capacity. to the new influx our to limits place our in in there's offer secure programs, us continue We ability major and are uptick Europe Helped of see to demand, on

positive with our in with of view manage to on April and position our our movement rate into the portfolio one, continue in driven a by where the We heading risk saw our line continuing portfolio of year.[indiscernible] happy renewals. briefly of rest four future are we is Japanese

in to We on the in enhance our our create broaden established the region to fees opportunities relationships continue and growth of our portfolio.

deploy to As the on create returns new of for shareholders. are deliver to cycle the compelling consistently the we look rest the underwriting ahead One year, we opportunities our with value an aligning as best further and start. -- Lloyd excellent through we capital Syndicate, will on and our capital -- the this additional focused is Lloyd example to risk.In to door closing, focus the the term, believe up XXXX which exploring opens will opportunities to to within lead opportunities broader is globally continue longer right our enhance we

with coming we for out our capitalize and to had the portfolio. quarter our across the are and momentum first ability opportunities We pleased

deliver in track remain confident the are in and year, range long XX% target. our full ROAE outlook We on operating the which to for is business term XX% our above the for to

operator. dedicated profitable our to turn the to scale, meaning our execution continue I'll for current growth it balance our sustainable strength the market positioning, to deliver sheet growth teams from shareholders. and expert We create wealth and With off lead see value back in potential that, long-term positions and

Operator

question first of [Operator Carletti line Matt Instructions] With JMP. our from comes Citizens the that, with

Matthew Carletti

but us I of of what particularly you is question a Baltimore you loss translate And on how kind related to industry loss. marine do related if think terms. you you kind of secondly, bridge your those loss could more even what wanted little the if if just view loss kind one, have start, markets? or might specifically, of impact perspective on guess I set the in able guess reserve two-part to you that on I that give a can,

Daniel Burrows

market think expectation Baltimore at say firstly and our I we given profile. within it's look

approach, in we it's we We've very portfolio. sort know, the billion complex very that the therefore think loss But take of a standard dollars against over written a outcomes. manageable range is of any quarter, you loss, would weight probabilistic specialty the full limits very As reserving we and it's within diversified of early.

develop market? So about think I the pricing what so and to see future. too We'll will for think your exactly it be affected. think question, to about, part will in early I talk impact will wait second the the just of to we it market the be the about think impact to how it's how just

Matthew Carletti

of just segment there anything there mix and you just follow-up I question. by where more any maybe had there would modeling different for commissions. is year to forward seeding kind kind like -- or should there looking guess quarterly-to-quarterly Is business â€˜XX. kind referenced some of on of we and asked by then â€˜XX think in a reinsurance other sat costs year Policy Is reason level? And it materially segment any full a acquisition fluctuation we full about? look some of It way. is think variation

Allan Decleir

think is in and the and the basis, I commission quarter we answers. seeding is first on quarter. business business fluctuate in quarter written to buy that the a of depending overall, on it. rate outwards have XXXX the that that is and book we quarter, way us. significantly share to earned there's on I buy to can comes on of a think impact important the a It to quarter the quarter-to-quarter consider that our If it's think mix costs do No, that profit commission One amount significant of in But post-acquisition about can always a outwards factor reinsurance, basis. run also and an back back, you right business

Operator

next comes Mike from Your question with BMO. Zaremski

Michael Zaremski

are the I think the to Baltimore what Just us track each following-up, of all bridge because trying thinking on losses. some company's

Some the X X at companies have reserving is the billion, said billion to they're like upper end. range

wanted any Just kind next If on just curious to provide you on question. if the move of color can to that. I not,

Daniel Burrows

some probabilistic bang heard end commentary peers. we think all be it'll against of I of top I said, think, I as the the if and from the think our with of range, our line weigh you in of outcomes, you've

Michael Zaremski

but Is to increasing think that of gears at pricing, don't record helpful. you kind about but kind RPI off in what's as looking of also KPIs -- the Switching power your decelerating, look, property in directionally, coming overall cases of I'm and are levels looks are recent a pricing still of bespoke in like out months lot talk many marketplace? guys some is thought it that what RPIs process broken power I seeing? and that's often, your of

Daniel Burrows

question. It's a really good

the of because Bespoke, cycles. nature insulated of it market be product that tends more on against Firstly, line, to

of see terms best do think it's still market. or for still five improvement in pricing compound years. had to the or about lines, market kind we to opposed we last years, of duration, but It's a the the a four, So as very reinsurance three some seen market flatter But when in verticalized generally specialty. on the the over it we've and we've market. those XX Still best some XX increases

about we've this before. So talked

the starts everyone in place. So not same

how about, movement. reserves, demand driving and the we've new talked have a business there's leverage. terms. get better seeing but what get about Having that well. hard, brokers across those of We're into seen clients, There's terms, the that really the better significant uh, on in to XX% to of inflation the capacity early differential climate that alpha. we able creates demand the and market a lead election factors a we're to pricing, the long line, the That's of change that. but market, portfolio, us We're we inflation, coverage.Obviously, no influx secular been opportunities -- then we've and risk As we're is and lot positive despite we better basis, see as that's relevant still scalable, conditions, gives able and think, and on and the a that's it important leader dictate

Michael Zaremski

just are how lastly, And since we you think anything going the should announced of it all terms kind on of the going to on just outperformed share about you valuation? meaningfully forward that pace and authorization, in based stocks

Allan Decleir

December program. accretive of certainly certainly announced of when in think I part be shares. shareholders. We buyback measured, it at was our No, a was It program XX the but latter the values we XXXX, to said million we'd the add

I XXXX. if, and will I still so on buy. $XX.XX our we book given and a the to executing I XX the was month current it's authorization, accretive pacing on It program we was in share market continue the book think throughout think be right, could value; think price whether depending

Operator

Your Kinar next question Jefferies. Yaron with comes from

Yaron Kinar

with I segment the could. start want if we to bespoke

quarter relatively offered helpful very was You some last year flat over year. talking about a guidance pipeline that

I the book and seating can think fluctuations. thumb the guessing in on guess is session all you any the year quarter, where thinking every resulted in significant there's rule offer of should I the A of because can maybe or what still a over maybe you proper session bit of as guidance it's I'm year And about opposed there But composition pretty portfolio terms you B renewed fluctuation differences in to talk there. of see new in therefore is rate B, rate rate? change and a the would've us is there? that be of can essentially

Daniel Burrows

start. I'll

premium business on of relationship this around, specifically a lot as we difference if proportional this had, that see was and the think I we reinsurance rate cyber a it. Allan we in and is time said about And mix earlier, that session that a proportional our buy seeding we're of helps it's if on out buy instance we the because a of particular capital leader. gives that scale line. But that of us And as it. in scale really the very leverage program fungible form because

Yaron Kinar

fluctuation think be number sure going session to about Obviously, make rate to there's quarter, for think way like, is a reasonable to And it quarter to just going some we're want a about to is a XX% correctly. thinking us but there forward? about,

Allan Decleir

mentioned at Bespoke has general, in your question, some would on they necessarily of we be start As all sort business more as and They're fluctuations XX%, be the its but type with -- around the the unique. as think session on of the you go of tend not session. nature to renewals, overall we the the segment in XXXX maybe high Again, of as of yearly range it'd XX%. rates, more but which depending XX% the deal, by

Yaron Kinar

maybe second release anyway. I about that but are I reserves books question, my a specifically And the Can I of you the I'll was reserve this reviewed? at significant realize as this the what look talk this quarterly that largest try remember. may year third, reviews very course how be my release over of drove well? think timing you it maybe the The and quarter, What disclosed

Allan Decleir

I'll take write note not that question. any From for business. context, again casualty I we would do that

We are company. duration short

is two reserves of our duration years. average Our

timely quarter-to-quarter. a result, looking we had process have basis, at always a reserves of a As our on

the no experience. years results based quarter. the on that three was through in all particular in And It was prior quarter do see for or on the XXXX, segments. We wait that change again, that review. or you'll based so activity across fairly year-end for activity quarter each benign purely the do results reserves reserve assumptions. based There was flow release actual In QX loss purely a not flow particular for through And reserves strengthen on are quarter. of we would

Operator

Shields comes from Meyer KBW. question with next Your

Meyer Shields

syndicate make whatever pricing Dan, in to to understand It writing question, is Fidelis as more the willing sure one on going the syndicate Should is assume just reinsurance first sounds I that it. reinsurance momentum? like be to take addition well. to exposure want I through in we

Daniel Burrows

a really It's question. good

As less approach we'll variable do you a so and, and smaller share, shares. appetite have into lines take have appetite, where know, where we we have we'll we lean

exposure in rather positive in of increases I pricing we increases. seen as premium we taken we've And have portfolio. think some the terms movement reinsurance on the than script, very said

that. is combined There business. not in of it. is whole not monitor -- every only the it. attritional deal. are, think We we into we we're whole, the the match deals our Syndicate to that's are we'll Lloyd's some access of Uh, have originate to an So like risk, to stay That's but with it appetite, there away and we flow can't that access purposes our one that that get on to won't looks a really from it's to we'd getting key now. this is But the If around Depending I those if appetite. the capital thing attractive see Lloyd's risks.

Meyer Shields

And on maybe the side -- flip then

Daniel Burrows

sorry, have impact out put just no say I think small -- to we Whatever XXXX. sorry there have for premium I of whatever you. -- kind on going that, would XXXX. for to It's Meyer, that's interrupt we you our do no very a item premium

Meyer Shields

purchasing pricing, current property reinsurance faculty midyear on hoping an on guess expectations strategy property based pricing. for was directing reinsurance I update the book, to regard I With for

Daniel Burrows

actually timely. question, Another good and very

It's more time very So suite X/X as bought as index actually within and proportional We expectation. range tend you know, is buy we DNF broad coming non-proportional a limit. bit there. of We've a program busy buy or products to a both X/X. the is very

tranches, just and Re we've million know You'll total XXX bonds, for quake. US renewed that storm, Herbie US XXX the or and in million name gives protection two us

gives differential in reinsurance to leader market So a scale a the look very, verticalized know, very grown, portfolio's especially like in you you help opportunity if we'll And being and DNF, a advantage line. Once to the market result. our as of again, just that take market, take then as can. us we'll we

Operator

with comes Instructions] Citigroup. from Mike [Operator Ward next Your question

Michael Ward

the the technical if the is rest to just -- seating of was comparable I structure sourced Lloyd of wondering, commission business? MGU

Allan Decleir

participation. Lloyd's Lloyd's the until overall, overall currently we is expect expense any think the as result how have a and of our material I I wouldn't expenses similar to change structure

Michael Ward

is And out. there's potential, coming then there forecast hurricane

could some you relatively if Just exposure do of extreme see your remind guys we if us wondering the forecasts.

Daniel Burrows

I give details on out mean, PMLs. we don't

just mentioned, protection know, the and you suite and one both Southeast buy, broad a we exposed proportional Clash, we I we are And D&F. buy then XXX Truity to in lot what very we we say, that portfolio of products. have but the As and on as would of a -- at do,

non-proportional, We products, renew bonds, just said the index I have as we have moment a ago.

think we in very portfolio. that So we're protected well

Operator

concludes for This question Dan turn the closing to back session. you. I'd to answer today's Burrows Thank remarks. and like call

Daniel Burrows

Thank for be you have interest to questions, up us in you company around We if appreciate your today. our we'll everyone take follow your and call. any joining do

day. very have great you thank a So much and

Operator

you Thank Thank you. conference concludes That for call. today's participating.

You may now disconnect.

Fidelis Insurance Holdings Limited (FIHL) 10 May 242024 Q1 Earnings call transcript