Fidelis Insurance (NYSE:FIHL) reported a strong fourth quarter as management pointed to improved underwriting results, continued expansion of its underwriting partner network, and an active share repurchase program as key drivers of shareholder returns in 2025.
Fourth-quarter performance and full-year context
Chief Executive Officer Dan Burrows said the fourth quarter “further validation” of the company’s business model, highlighted by an 80.6% combined ratio, which he said represented a 47-point improvement from the prior-year period. Burrows said it was the second consecutive quarter that exceeded long-term targets and that the second half of the year showcased the strength of the portfolio and risk management after the company worked through legacy issues tied to Russia-Ukraine aviation litigation exposure earlier in 2025.
For the full year, the company posted operating net income of $205 million, or $1.92 per diluted common share, translating to an operating ROAE of 8.5%. Decleir said full-year results included actions taken in the first half of 2025 to address uncertainty connected to the Russia-Ukraine aviation litigation, including the impact of an English High Court judgment. Burrows said the company would have been “well ahead” of through-the-cycle combined ratio targets in 2025 and since the IPO if not for the impact of that litigation.
Premium growth and portfolio shifts
Management reported premium growth alongside a shift in mix driven by selective underwriting decisions. Gross premiums written increased 3% in the fourth quarter to $978 million, and 7% for the year to $4.7 billion.
Burrows described the overall portfolio as approximately 80% specialty insurance and 20% reinsurance. Within insurance, he said gross premiums written grew 6% in 2025, with a continued focus on opportunities where price and structure met return hurdles.
A key growth driver was asset-backed finance and portfolio credit. Burrows said the company continued to see strong margins in these products and highlighted growth in the mortgage portfolio through a partnership with Euclid Mortgage that began at the start of 2025. He said asset-backed finance and portfolio credit now comprises over 11% of total premium, and noted these products have longer earning patterns than much of the company’s predominantly short-tail portfolio.
In direct property, Burrows said the company maintained overall income year-over-year while navigating market conditions with disciplined portfolio management, including expansion into areas such as data centers and new underwriting partner onboarding. He also cited specialty marine strength and opportunities to convert “large capacity-driven construction risks.”
Management emphasized underwriting discipline in aviation. Burrows reiterated caution on terms, conditions, and jurisdictional issues, and said the company walked away from risks that did not meet hurdles. Both Burrows and Decleir said aviation gross written premium declined by approximately 50% year-over-year, with capital reallocated to other areas.
Underwriting results, loss drivers, and expense items
Decleir broke down components of the 80.6% combined ratio in the quarter:
- Catastrophe and large losses: $51 million, or 9.1 points of the combined ratio, compared with $133 million, or 21 points, in the prior-year quarter. The insurance segment was impacted by Hurricane Melissa, a satellite loss in aerospace, and an event in political risk, violence, and terror. Reinsurance had no catastrophe and large losses and benefited from the sale of certain subrogation rights related to the California wildfires.
- Attritional loss ratio: 30.4%, which management described as continuing to come in at a low level.
- Prior-year development: $35 million net favorable in the quarter, versus $270 million net adverse in the prior-year quarter. Decleir said a key driver was $25.6 million of favorable development in insurance tied to prior cat events and benign attritional development.
On expenses, third-party policy acquisition expenses were 26.2 points of the combined ratio in the quarter, down from 33.6 points a year earlier. Policy acquisition expenses to The Fidelis Partnership were 16.8 points. General and administrative expenses were $25 million, including benefits from Bermuda’s substance-based tax credits, compared to $24 million in the prior-year quarter. Looking ahead, Decleir said the company expects strategic investments to lift G&A to approximately $29 million per quarter in 2026.
Decleir also provided a loss ratio view for 2026, saying the company sees its overall loss ratio in the mid-40% range, inclusive of attritional and catastrophe/large losses, with the split differing between insurance and reinsurance.
Investment results, capital returns, and 2026 outlook
Net investment income and net realized/unrealized gains on other investments totaled $47 million for the quarter. As of Dec. 31, management said the fixed income portfolio had an A+ average rating, a 4.9% book yield, and 2.7 years of average duration. Decleir said the company expects 2026 investment returns to be broadly in line with 2025, with the portfolio (including funds) expected to generate approximately 4% to 4.5%.
On capital management, Burrows and Decleir highlighted significant share repurchases. The company repurchased 6.4 million shares in the fourth quarter for $119 million at an average price of $18.47, including $83 million in privately negotiated transactions. For 2025, the company repurchased 15.2 million shares at an average price of $17.22. Decleir said repurchases contributed $0.90 to book value per share in 2025, and Burrows said the repurchase program has contributed $1.24 to book value per share since it began in 2024. After year-end through Feb. 20, the company repurchased an additional 967,000 shares for $18 million at an average price of $19.12. Management also noted the board increased the common share repurchase authorization to $400 million.
Looking into 2026, Burrows said the company is seeing moderation in pricing in some areas but does not view it as a return to a “soft cycle,” citing higher attachment points and tighter terms and conditions that he said have largely remained intact. He said the company expects mid-single-digit top-line growth in 2026.
Separately, Burrows said the company announced a new brand identity, Pelagos Insurance Capital, intended to reflect its positioning as a capital allocator working with underwriting partners. He said the company expects the brand to launch in May.
About Fidelis Insurance (NYSE:FIHL)
Fidelis Insurance Holdings Ltd is a Bermuda‐incorporated specialty insurer and reinsurer that underwrites a broad range of liability and property risks. Founded in 2015, the company completed its initial public offering on the New York Stock Exchange in 2016 under the ticker FIHL. Fidelis focuses on providing tailored solutions for complex risks that traditional insurers may find difficult to accommodate, leveraging data analytics and underwriting expertise to structure policies across diverse industry segments.
The company’s product portfolio spans casualty lines—including general liability, excess and umbrella, professional indemnity, and management liability—alongside property, marine, energy and specialty programs.
