Fidelis Insurance (FIHL -1.89%) reported its Q2 2025 results on Aug. 13, 2025, with 2% gross written premium growth to $1.2 billion, 9% year-to-date growth to $2.9 billion, a combined ratio of 103.7% (impacted by Russia-Ukraine legal costs), and continued share repurchase and dividend increases. The call highlighted the resolution of legacy litigation, an expanded capital management program, and ongoing underwriting discipline.
The following insights detail key strategic developments and their implications for long-term investors.
Legacy risks resolved support Fidelis' growth
Fidelis finalized the Russia-Ukraine aviation litigation, removing a major uncertainty and enabling management to focus on core business profitability. Excluding litigation impacts, the company achieved a mid-70s combined ratio and exceeded its through-the-cycle return on average equity (ROAE) targets, reflecting portfolio resilience.
"First, any remaining exposure to the Russia-Ukraine lesser policy litigation is insignificant. We can now draw a line under this. Secondly, we continue to take advantage of profitable growth, supported by very attractive margins across the portfolio as a whole. Finally, our capital position remains strong, giving us the flexibility to enhance shareholder returns as demonstrated by the recent expansion of our capital management initiatives announced last week. With this in mind, we grew our gross written premiums through the first half of 2025"
— Dan Burrows, CEO
With this legacy overhang removed, investors can now focus on the underlying profitability and growth in high-margin business segments, improving the clarity of long-term earnings power and capital return potential.
Capital management accelerates amid market undervaluation for Fidelis
Management increased its share repurchase authorization to $200 million in August 2025 and raised the quarterly dividend to $0.15 per share, a 3.6% yield. Year-to-date, Fidelis repurchased 6.9 million shares at an average cost of $16.01, or 73% of current diluted book value per share, supported by a $400 million subordinated debt issuance.
"In the second quarter, we repurchased 5.5 million common shares for $88.7 million at an average price of $16.17 per common share. This includes 3.1 million common shares that were repurchased through a privately negotiated transaction with CVC, who remains one of our long-standing shareholders having owned our shares since our founding. This brings our shares repurchased year-to-date to 6.9 million common shares at an average price of $16.01, which is approximately 73% of our current diluted book value per share and thus highly accretive on both the book value and earnings per share basis to our shareholders. Since the commencement of our share repurchase program in 2024, our strategic approach to share repurchases has provided $79 million to shareholders or 73¢ to our book value per share. Additionally, last week, we announced that our board approved a renewal of our repurchase authorization given the strength of our balance sheet, which brings our total current authorization to $200 million. The board also approved an increase to our quarterly common dividend to $0.15 per share, bringing our dividend yield to 3.6%. Also on the capital management front, we successfully completed a $400 million issuance of fixed-rate thirty-year subordinated notes during the quarter."
— Allan Decleir, CFO
This stepped-up buyback and dividend strategy directly boosts per-share value while demonstrating management's conviction in the firm's intrinsic worth, distinguishing Fidelis in a sector where capital deployment discipline is a critical long-term differentiator.
Portfolio optimization and disciplined pricing sustain Fidelis underwriting edge
Fidelis achieved direct property book retention rates of approximately 90% year-to-date, with 7% premium growth in the insurance segment and resilient pricing despite competitive market pressures. Active management and lead positioning have enabled the company to maintain pricing power and avoid underpriced business as some market participants engage in aggressive rate-cutting.
"So for leaders, and we're one of the bigger players in that market, we've seen flat to maybe off 10 on some business. But what we're able to do is kind of reallocate capacity into different structures, different areas of structures to maximize the margin. We're not going to follow the market down. We're not prepared to write inadequately priced business. So I think we are seeing high retention rates, something around 90% for the year. We're very relevant to the brokers and clients, which really gives us strength in terms of our distribution network. That's a real driver to our success."
— Dan Burrows, CEO
This disciplined approach to risk selection and a willingness to sacrifice top-line growth for margin protection underscores the company’s ability to maintain profitability through market cycles, reinforcing the quality of earnings for long-term shareholders.
Looking Ahead
Management expects full-year underwriting growth of approximately 6% to 10% for fiscal 2025 (ending December 31, 2025), and forecasts continued strong profitability in property, asset-backed finance, and portfolio credit lines given robust pipelines and high retention rates. Effective tax rate guidance for calendar 2025 is 19%, reflecting a shift in profit mix toward higher-tax jurisdictions during the first half of 2025, with 2026 tax expectations to be provided after further planning. No additional concrete forward-looking financial guidance was provided for net income or combined ratio beyond these ranges.
