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PEMBROKE, Bermuda - Fidelis Insurance Holdings Limited (NYSE:FIHL) reported second quarter earnings that fell well short of analyst expectations, as the company’s results were significantly impacted by adverse development related to Russia-Ukraine aviation litigation.
Fidelis shares edged up 1% following the release
The specialty insurer posted net income of $19.7 million, or $0.18 per diluted share, for the second quarter of 2025, compared to analyst expectations of $0.79 per share. The company’s combined ratio deteriorated to 103.7%, up from 92.7% in the same period last year, primarily due to $89.2 million in net adverse prior year loss reserve development related to the English High Court judgment in the Russia-Ukraine aviation litigation. .
"Excluding the impact of this litigation, we would be outperforming our through-the-cycle targets with a combined ratio in the mid-70s for the quarter and significantly surpassing our ROAE target," said Dan Burrows, Group Chief Executive Officer of Fidelis Insurance Group.
Gross premiums written for the quarter increased slightly to $1.2 billion from $1.19 billion in the prior-year period. The company’s annualized operating return on average common equity (ROAE) fell to 2.3% from 10.0% a year earlier.
For the first half of 2025, Fidelis reported a net loss of $22.8 million, or $(0.21) per diluted share, compared to net income of $134.9 million, or $1.14 per diluted share, in the first half of 2024. The six-month results were impacted by both the aviation litigation and California wildfires.
Despite the earnings challenges, Fidelis continued its capital return program, repurchasing $88.7 million of common shares and paying $10.9 million in dividends during the quarter. The company also announced an increase in its quarterly dividend to $0.15 per share and renewed its share repurchase authorization to $200 million.
"With our exposure to the Russia-Ukraine lessor policy aviation litigation now firmly behind us, and with any remaining exposure being insignificant, we can now draw a line under this event," Burrows added.
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