Core Viewpoint - Fidelis Insurance Holdings reported quarterly earnings of $0.12 per share, surpassing the Zacks Consensus Estimate of a loss of $0.12 per share, but down from earnings of $0.54 per share a year ago [1][2] Earnings Performance - The earnings surprise for the quarter was +200.00%, with the company previously expected to post a loss of $0.43 per share but actually reporting a loss of $0.41, resulting in a surprise of +4.65% [2] - Over the last four quarters, Fidelis Insurance has exceeded consensus EPS estimates each time [2] Revenue Analysis - The company reported revenues of $582.6 million for the quarter ended June 2025, which was 9.71% below the Zacks Consensus Estimate and an increase from $547.1 million year-over-year [3] - Fidelis Insurance has not met consensus revenue estimates in the last four quarters [3] Stock Performance - Since the beginning of the year, Fidelis Insurance shares have declined by approximately 6.3%, contrasting with the S&P 500's gain of 9.6% [4] Future Outlook - The future performance of Fidelis Insurance stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][5] - Current consensus EPS estimates for the upcoming quarter are $0.80 on revenues of $787.36 million, and for the current fiscal year, $1.25 on revenues of $2.87 billion [8] Industry Context - The Zacks Industry Rank indicates that the Insurance - Multi line sector is in the top 39% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [9]

FIDELIS INSURANCE HOLDINGS LIMITED Unaudited Consolidated Financial Statements For the Three and Six Months Ended June 30, 2025 and 2024 1 FIDELIS INSURANCE HOLDINGS LIMITED TABLE OF CONTENTS | Page | | | --- | --- | | Financial Statements | | | Consolidated Balance Sheets at June 30, 2025 (Unaudited) and December 31, 2024 | 3 | | Consolidated Statements of Income and Comprehensive Income (Unaudited) for the three and six months ended June 30, 2025 | 4 | | and 2024 | | | Consolidated Statements of Changes i ...

Core Viewpoint - Fidelis Insurance Holdings (FIHL) is expected to report a quarterly loss of -$0.12 per share, a decline of 122.2% year-over-year, while revenues are forecasted to increase by 17.9% to $645.23 million [1] Earnings Estimates - The consensus EPS estimate for the quarter has been revised upward by 6.7% in the past 30 days, indicating a reassessment by covering analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong relationship between earnings estimate revisions and short-term stock price performance [3] Revenue Projections - Analysts project 'Revenues- Net premiums earned' to reach $597.55 million, reflecting a 19.3% increase from the previous year [5] - The consensus for 'Revenues- Net investment income' is estimated at $47.68 million, indicating a 3.7% increase year-over-year [5] Key Metrics - The expected 'Combined Ratio' is 108.9%, significantly higher than the year-ago figure of 92.7% [5] - Analysts predict a 'Loss Ratio' of 61.8%, compared to 44.4% from the previous year [6] Market Performance - Shares of Fidelis Insurance have returned +3% over the past month, outperforming the Zacks S&P 500 composite's +1.9% change [6] - With a Zacks Rank 4 (Sell), FIHL is anticipated to underperform the overall market in the near future [6]

Core Insights - The company experienced a challenging quarter with a reported loss of $42.5 million, leading to a decline in stock price to approximately $16, which has not recovered since [1] - Despite the stock performance, the core business remains intact, indicating potential resilience and stability [1] - The shift in market attention presents an opportunity for the company to capitalize on, suggesting that investor sentiment may be changing [1]

Group 1 - Fidelis Insurance Holdings (NYSE: FIHL) has underperformed over the past year, losing approximately 2% while the insurance sector has seen strong performance [1] - The company's shares are currently valued low compared to its peers, indicating a potential investment opportunity [1] - The underperformance may be attributed to the company's specific challenges, despite the overall favorable conditions in the insurance industry [1]

Financial Highlights - Total assets reached $12.8 billion as of March 31, 2025[8, 24] - Shareholders' equity stood at $2.4 billion as of March 31, 2025[8, 24] - Cash and invested assets amounted to $4.4 billion as of March 31, 2025[8, 38] - Gross premiums written (GPW) for the trailing twelve months (TTM) ended March 31, 2025, totaled $4.6 billion[8, 12] Performance Analysis - The combined ratio for Q1 2025 was 115.6%, impacted by $333 million in catastrophe and large losses, primarily from the California wildfires[23, 24, 26] - The annualized operating ROAE for Q1 2025 was (7.6%)[24, 26] - Net investment income increased by 21% from Q1 2024 to $50 million[24, 26] Portfolio Composition - Insurance segment accounted for $3.619 billion (78%) of the gross premiums written[13] - Reinsurance segment accounted for $993 million (22%) of the gross premiums written[11] Capital Management - The company returned $33 million of capital to common shareholders in the three months ended March 31, 2025, including $22 million in share repurchases and $11 million in dividends[26] - The company has $103 million remaining available for repurchase under the $200 million common share repurchase authorization as of May 9, 2025[47]

Financial Performance - Gross premiums written increased to $1,722.9 million for the three months ended March 31, 2025, up from $1,514.3 million in the same period of 2024, representing a growth of 13.8%[7] - Net premiums earned rose to $603.0 million, compared to $488.0 million in the prior year, reflecting a year-over-year increase of 23.5%[7] - Total revenues for the quarter reached $658.4 million, a significant increase of 26.6% from $520.0 million in Q1 2024[7] - The company reported a net loss of $42.5 million for the three months ended March 31, 2025, compared to a net income of $81.2 million in the same period of 2024[7] - Earnings per common share for Q1 2025 was $(0.38), compared to $0.69 in Q1 2024, indicating a significant decline in profitability[7] - Comprehensive loss for the quarter was $25.0 million, compared to a comprehensive income of $81.0 million in the prior year[8] Assets and Liabilities - Total assets as of March 31, 2025, amounted to $12,771.6 million, up from $11,765.9 million at the end of 2024, indicating a growth of 8.5%[5] - Total liabilities increased to $10,380.2 million, compared to $9,317.5 million at the end of 2024, marking an increase of 11.4%[5] - The company’s cash and cash equivalents stood at $733.4 million as of March 31, 2025, slightly down from $743.0 million at the end of 2024[5] - Cash, restricted cash, and cash equivalents at the end of the period totaled $927.7 million, slightly down from $892.2 million a year earlier[13] Losses and Expenses - Losses and loss adjustment expenses surged to $429.2 million, up from $182.3 million in Q1 2024, reflecting an increase of 135.5%[7] - The underwriting loss for the three months ended March 31, 2025, was $94.5 million, a significant decline from an underwriting income of $69.2 million in 2024, representing a change of $163.7 million[133] - The loss ratio for the insurance segment was 55.0%, while the reinsurance segment had a loss ratio of 162.2%[29] - The combined ratio for the Group was 115.6%, indicating a challenging underwriting environment[29] Investment Performance - The Group's net investment income for the three months ended March 31, 2025, was $49.5 million, an increase of 20.7% from $41.0 million in the same period in 2024[43] - The total realized and unrealized investment gains and net investment income for the three months ended March 31, 2025, was $55.4 million, compared to $32.0 million in the prior year, reflecting a significant increase[43] - The net investment return for the three months ended March 31, 2025, was $55.4 million, an increase of $23.4 million compared to the prior year[149] Shareholder Actions - During Q1 2025, the company repurchased 1,438,278 common shares at a total cost of $22.1 million, with a weighted average price of $15.37 per share[119] - The unutilized amount of the share repurchase authorization at March 31, 2025, was $122.5 million[104] - The company declared cash dividends of $11.2 million, a slight decrease from $11.8 million in the same quarter of 2024[13] Reinsurance and Premiums - Gross premiums written in the Insurance segment increased to $1,267.0 million in Q1 2025, up from $1,186.8 million in Q1 2024, a growth of 6.8%[136] - The Reinsurance segment's gross premiums written increased by $128.4 million to $455.9 million for the three months ended March 31, 2025, primarily due to reinstatement premiums related to California wildfires[142] - Net premiums written in the Reinsurance segment rose by $119.4 million to $217.5 million for the same period[142] Capital and Debt - The company reported total capital of $2.9 billion as of March 31, 2025, with a debt-to-total capital ratio of 17.5%[162] - The Group's total debt, including Senior Notes and Junior Notes, was $455.0 million as of March 31, 2025[84] Other Financial Metrics - The annualized operating return on average equity (ROAE) was (7.6)% in Q1 2025, compared to 14.0% in Q1 2024[119] - The effective tax rate for Q1 2025 was (15.5)%, compared to 14.6% in Q1 2024, resulting in an income tax benefit of $(7.8) million[105]

Financial Data and Key Metrics Changes - The company recorded top line growth of 14% for Q1 2025, with gross premiums written amounting to $1.7 billion, compared to the same quarter last year [21][9] - The combined ratio for the quarter was 115.6%, impacted significantly by catastrophe losses, particularly from California wildfires, which accounted for $333 million in losses [23][24] - Net premiums written increased by 32% year-over-year, while net premiums earned rose by 24% [22][23] Business Line Data and Key Metrics Changes - In the insurance segment, gross premiums written increased by 7% to $1.3 billion, driven by new business and asset-backed finance [22] - The reinsurance segment saw a 39% increase in gross premiums written to $456 million, largely due to new business and reinstatement premiums related to wildfire losses [22] - The attritional loss ratio improved to 22.7% from 30% in the prior year, indicating better performance in the overall portfolio [23] Market Data and Key Metrics Changes - The company noted a favorable trading environment with strong margins across various lines of business, despite increasing competition in some areas [10][11] - The marine portfolio continued to grow year-on-year, primarily driven by new construction business [11] - The aviation and aerospace premiums saw a reduction year-on-year due to the timing of a line slip renewal [13] Company Strategy and Development Direction - The company remains committed to pursuing profitable underwriting opportunities and strategic capital management, focusing on a diversified portfolio with no casualty exposure [7][8] - Management emphasized the importance of active exposure management and the strategic use of outward reinsurance to navigate current market conditions [10][14] - The company is exploring new opportunities in highly accretive and profitable business segments to maximize returns [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to achieve approximately 10% growth in gross premiums written for the year, citing a strong trading environment [39][45] - The company is actively monitoring global economic conditions and adjusting its underwriting strategy accordingly, particularly in response to inflation and political risks [31][33] - Management highlighted the importance of maintaining a strong balance sheet to support profitable growth and capital management initiatives [30][41] Other Important Information - The company repurchased $41.5 million of common shares at an average cost of $15.63 per share year-to-date [17][29] - The company has settled or is in various stages of settlement discussions for approximately 80% of its total exposure related to the Russia-Ukraine aviation litigation [18][19] - The average rating of fixed income securities remains high at A+, with a book yield of 5% [27] Q&A Session Summary Question: Growth opportunities in the second half of the year - Management acknowledged a timing headwind in the aviation line and expressed confidence in achieving 10% growth for the year despite the challenges [43][45] Question: Drivers of favorable reserve movement - Management noted strong performance in the attritional book and reserve releases from prior catastrophe events as key drivers of the favorable prior year development [47][48] Question: Explanation for stock trading at a discount to book value - Management agreed on the undervaluation and emphasized the need to continue performing well to build investor confidence [52][54] Question: Impact of UK aviation litigation on share repurchases - Management indicated that they would continue to repurchase shares opportunistically, depending on market conditions and share prices [56][90] Question: Competitive environment in property insurance - Management highlighted the ability to implement pricing adjustments in real-time and noted strong demand in the market, allowing for continued growth [97][100]

Financial Data and Key Metrics Changes - The company recorded top line growth of 14% for Q1 2025, with gross premiums written amounting to $1.7 billion, compared to the same quarter last year [18][7] - The combined ratio for the quarter was 115.6%, impacted significantly by catastrophe losses, particularly from California wildfires, which accounted for $333 million in losses [20][21] - Net investment income increased to $50 million, up from $41 million in the prior year, reflecting a higher yield on cash and fixed income portfolios [25] Business Line Data and Key Metrics Changes - In the insurance segment, gross premiums written increased by 7% to $1.3 billion, driven by new business and asset-backed finance [19] - The reinsurance segment saw a 39% increase in gross premiums written to $456 million, largely due to new business and reinstatement premiums related to wildfire losses [19] - The attritional loss ratio improved to 22.7% from 30% in the prior year, indicating better performance in the overall portfolio [20] Market Data and Key Metrics Changes - The company noted a favorable trading environment with strong margins across various lines of business, despite increasing competition in some areas [9][8] - The marine portfolio continued to grow year-on-year, primarily driven by new construction business [10] - The aviation and aerospace premiums saw a reduction year-on-year due to the timing of a line slip renewal [11] Company Strategy and Development Direction - The company remains committed to pursuing profitable underwriting opportunities and strategic capital management, focusing on a diversified portfolio with no casualty exposure [6] - The management emphasized the importance of active exposure management and the strategic use of outward reinsurance to navigate current market conditions [8][12] - The company is exploring new opportunities in highly accretive business segments to maximize returns and access new risks [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to achieve approximately 10% growth in gross premiums written for the year, citing a strong trading environment [36][42] - The company is actively monitoring global economic conditions and adjusting its underwriting strategy accordingly, particularly in response to inflation and political risks [30][29] - Management highlighted the importance of maintaining strong relationships with clients and brokers to access business at preferential terms [34] Other Important Information - The company repurchased $41.5 million of common shares at an average cost of $15.63 per share year-to-date, indicating a commitment to returning capital to shareholders [14][27] - The company has settled or is in various stages of settlement discussions for approximately 80% of its total exposure related to the Russia-Ukraine aviation litigation [15][90] Q&A Session Summary Question: What are the growth opportunities in the second half of the year? - Management acknowledged a timing headwind in the aviation line and expressed confidence in achieving 10% growth for the year, citing a diversified portfolio [40][42] Question: Can you discuss the drivers behind the favorable reserve movement? - Management noted that the favorable prior year development of $41 million was driven by strong performance in the attritional book and reserve releases from prior catastrophe events [44][45] Question: Why is the stock trading at a discount to book value? - Management agreed on the undervaluation and emphasized the need to continue performing well to build investor confidence [48][50] Question: What is the impact of the pending UK aviation litigation on share repurchases? - Management indicated that the strong capital position allows for both profitable underwriting and share repurchases, with plans to continue buying back shares if prices remain attractive [82][85] Question: How is the company addressing the competitive environment in property insurance? - Management highlighted the ability to implement pricing adjustments in real-time and the strong demand from the admitted market, allowing for continued growth [92][94]

Core Insights - Fidelis Insurance Holdings (FIHL) reported revenue of $652.5 million for Q1 2025, reflecting a year-over-year increase of 25.5% [1] - The company's EPS was -$0.41, a decline from $0.74 in the same quarter last year, with an EPS surprise of +4.65% against the consensus estimate of -$0.43 [1] - The revenue fell short of the Zacks Consensus Estimate by -0.55% [1] Financial Metrics - The combined ratio for Fidelis Insurance was reported at 115.6%, better than the estimated 116.9% [4] - The loss ratio was 71.2%, slightly worse than the estimated 70.2% [4] - Net premiums earned were $603 million, closely matching the average estimate of $603.48 million, with a year-over-year increase of 23.6% [4] - Net investment income was reported at $49.5 million, below the estimated $52.61 million, but showed a year-over-year increase of 20.7% [4] Stock Performance - Over the past month, shares of Fidelis Insurance have returned +6.3%, compared to a +9.9% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]