Pelagos Q2 GWP rises 6.4% to $1.3bn, net income doubles

Pelagos Insurance Capital Limited, the Bermuda-based insurer formerly known as Fidelis Insurance Holdings, reported second-quarter gross written premiums of $1.3 billion, up 6.4% from a year earlier, the company said in a statement. Net income more than doubled to $44.4 million from $19.7 million.

The combined ratio, a measure of underwriting profitability, improved to 99.5% from 103.7% in the same quarter last year. Underwriting income swung to $2.8 million from a $20.6 million loss. For the first half, the combined ratio fell to 93.1% from 110.1%, with underwriting income of $79 million compared with a $115.1 million loss.

Catastrophe and large losses rose to $161.8 million in the second quarter from $74.3 million a year earlier. The increase was driven by claims from the Middle East conflict and an explosion at the Ras Laffan gas facility in Qatar, along with other property and marine losses, Pelagos said. For the first half, such losses declined to $234.1 million from $407.6 million, helped by the absence of California wildfire claims that hit the prior year.

The quarter included a net favorable prior-year loss reserve development of $32.7 million, reversing a $89.2 million adverse development in the same period a year ago. For the half, favorable development was $35.8 million versus an adverse $48.4 million.

In the reinsurance segment, gross written premiums grew to $383.3 million from $316.7 million in the second quarter. Net premiums written rose to $225.7 million from $152.7 million, while net premiums earned fell to $66.4 million from $79.1 million, reflecting a shift in business mix. The segment's underwriting income was flat at $53 million in the quarter, the company said.

The insurance segment posted gross written premiums of $913.5 million in the second quarter, up from $902.3 million. Net premiums earned rose to $514.7 million from $458.9 million. Underwriting income grew to $49.6 million.

Net investment income was $44 million in the second quarter, little changed from $44.6 million a year earlier.

Pelagos returned $73 million to shareholders in the quarter through dividends and share repurchases. Book value per diluted common share rose 9.1% in the first half and 22.6% over the trailing 12 months.

Dan Burrows, Group Chief Executive Officer, said: “Our first-half performance reflects the continued success of our capital allocator model and our underwriting discipline. We returned $73 million to shareholders in the second quarter through dividends and repurchases, underscoring our commitment to balancing profitable growth with accretive capital management.”