Adverse aviation ruling and California wildfires push Fidelis to H1’25 loss

Despite a $22.8 million H1 2025 net loss and a 110.1% combined ratio stemming from the English High Court’s Russia aviation ruling and California wildfires, Fidelis’s CEO has said the lessor policy dispute is effectively resolved, with only minimal exposure remaining.

The court case centred on claims under aviation hull and liability policies held by aircraft lessors whose planes were stranded in Russia after the Ukraine invasion.

Fidelis has now disclosed an underwriting loss of $115.1 million for H1 2025, compared to an underwriting income of $105.9 million and a combined ratio of 89.3% in H1 2024.

Notably, catastrophe and large losses for H1 2025 totalled $407.6 million, a considerable increase from the $284.2 million reported in H1 2024.

With the court case in mind, Fidelis saw an adverse prior year loss reserve development of $48.4 million in H1 2025, compared to net favourable development of $135.6 million in H1 2024.

However, the firm’s gross premiums written rose 8.7% year-on-year to $2.9 billion in H1 2025, while net investment income climbed to $94.1 million from $87 million.

The Insurance segment contributed $2.17 billion in premiums, and the Reinsurance segment $772.6 million.

Fidelis noted that gross premiums written in H1 2025 in the Insurance segment increased primarily due to new business opportunities, including newly onboarded third-party partnerships, in the Asset Backed Finance & Portfolio Credit and Cyber lines of business.

The firm added that these increases were partially offset by a decrease in the Aviation & Aerospace line of business, where certain deals did not meet its underwriting criteria and rating hurdles.

At the same time, gross premiums written increased in the Reinsurance segment in H1 2025 primarily due to reinstatement premiums related to the California wildfires, as well as growth from new business, while net premiums earned increased from the acceleration of earnings on contracts with exposure to the California wildfires.

Dan Burrows, Group Chief Executive Officer of Fidelis Insurance Group, commented on the figures, “We have continued to successfully execute on our strategy of balancing the pursuit of profitable underwriting opportunities with returning meaningful capital to shareholders.

“Year-to-date, we grew gross premiums written by 9%, reflecting our focus on targeted deployment of capacity into areas of higher margin in what remains a favourable trading environment.

“Our exposure to the Russia-Ukraine lessor policy aviation litigation is now firmly behind us, and with any remaining exposure being insignificant, we can now draw a line under this event. 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.

“With our recently announced expansion of our capital management initiatives, including the $200 million renewal of our share repurchase program and increase in our quarterly dividend to $0.15 per share, we have enhanced flexibility to capitalise on the considerable dislocation in our current share price.

“By coupling our capital management initiatives with our continued ability to take advantage of accretive growth opportunities and optimise reinsurance purchases, we are confident we will continue delivering attractive returns for our shareholders.”

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