Aug 13, 2026 earnings call — Underwriting partnerships and capital allocation
Returned $73 million to shareholders this quarter, including repurchasing $60 million of common shares.
Key quotes
"Our growing network of new underwriting partners continues to perform well, delivering results both in the quarter and year-to-date that beat our through-the-cycle targets."
"This was due to a higher-than-normal number of large loss events."
"During the quarter, we returned $73 million to shareholders, including repurchasing $60 million of common shares."
Analyst Q&A 8
Middle East underwriting and expenses
Q (Meyer Shields · KBW): How do you evaluate underwriting profitability and risk for the Middle East conflict? Also, why was the Reinsurance acquisition expense ratio higher than expected?
A: They set a risk framework and partnered with The Fidelis Partnership to write risk-by-risk (per vessel, voyage, cargo). Management said the business has been very profitable and is running at about a sub-20% loss ratio. On acquisition expense, they said more cost is in the acquisition line because there is no Fidelis Partnership commission and more quota share premium earning with higher commission, but overall they still expect mid- to high 80s combined ratio.
"I think we've written our business and it is running at something like a sub-20% loss ratio." — Daniel Burrows (CEO)
Cat losses, seasonality, growth pipeline
Q (David Motemaden · Evercore): How does the Q2 catastrophe and large loss ratio compare to a typical Q2 and seasonality? Also, can you update on the partnership pipeline and whether premium growth from partnerships can accelerate?
A: They manage to an annual plan and said the trailing 12-month combined ratio is 86.4%, in line with expectations. For large and cat they think about a mid-40s loss ratio overall for insurance with about a third from large and cat, and they expect more dollar cat and large load in the second half because more premium is earned then. On growth, they remain comfortable with mid-single-digit growth for 2026, delivered 6.4% in the quarter and 6.6% year-to-date, and noted many new partnerships are portfolio-level deals weighted to Q1.
"So how we think about it is a mid-40s loss ratio overall for insurance and about 1/3 of that coming from large and cat." — Jonathan Strickle
Profitability test for new partners
Q (Pablo Singzon · JPMorgan): What profitability threshold do you apply to new underwriting partners and lines? And was the new quota share struck to boost premium growth or for surplus management?
A: They apply the same profitability lens to new underwriting partnerships as to existing partners; new partners must compete with incumbents. They said early results from new partners are beating performance hurdles. The quota share was described as a strategic, long-term relationship that covers all business and positions them to scale over time.
"We apply exactly the same lens to the new underwriting partnerships." — Jonathan Strickle
Alternative capital and data centers
Q (Brian Meredith · UBS): How is alternative capital affecting the market and your use of it? Also, what's your view on data center (hyperscale) risk opportunities?
A: They see abundant alternative capital including ILS and funds, and said buying retrocession has been competitive and is enhancing their outwards reinsurance program, improving margin and managing volatility. On hyperscale data centers, their appetite is for vanilla construction risk only; they avoid chip-related business interruption covers and will participate where the exposure is vanilla.
"But as a buyer, that's enhancing our outwards reinsurance program improving margin and managing volatility." — Daniel Burrows (CEO)
Size of new quota share
Q (Karol Chmiel · Citizens JMP): How large is the new quota share agreement?
A: They said they are not able to disclose the size of the quota share at this time. Management said they will provide more color as the arrangement evolves over time.
"That's not something that we're able to disclose at this point in time, but we will continue to give color on that as it evolves over time." — Jonathan Strickle
ROAE targets and share buybacks
Q (Michael Zaremski · BMO): Given cycle changes, should we expect ROAE targets to change? Also, will share buybacks continue via private versus public markets?
A: They remain confident in guidance and targets: trailing 12-month combined ratio is 86.4% and they expect to hit 13% to 15% ROAE with mid- to high 80s combined ratio for 2026. On buybacks, they repurchased $280 million in H1, with $216 million through privately negotiated transactions, and they will continue to use the open market and work with private shareholders as needed.
"We would expect those quarters to bring us in line with our targets, 13% to 15% ROAE, mid- to high 80s combined ratio." — Daniel Burrows (CEO)
Asset-backed finance growth
Q (Chongwook Lee · Barclays): Is growth in Asset Backed Financing & Portfolio Credit coming from existing partners? And should we expect ABF's portfolio share to keep growing into 2027?
A: They have been growing consistently with The Fidelis Partnership in ABF and expect that to continue. The new partner targets a different client base and geography and is complementary. They said ABF has grown steadily over the last 4 or 5 years and they expect it to continue at the same rate while other, more cyclical lines will depend on market conditions.
"Yes, we've been growing pretty consistently with The Fidelis Partnership over the last few years in Asset Backed Financing & Portfolio Credit, and we think we'll continue to do so." — Jonathan Strickle
Lead-follow market split and loss frequency
Q (Andrew Andersen · Jefferies): How has the lead versus follow market split evolved and will it last? Also, should frequency or severity assumptions change after this quarter's losses?
A: They see a widening spread between lead and follow over the last 12 months and being a leader gives a distinct advantage via enhanced outwards reinsurance and ability to pivot capacity; for reinsurance renewals they expect the rate impact for them to be closer to single digits versus peers reporting mid-teens to 20% declines. They do not see a change in frequency assumptions; they expect the same run rate of large events and do not see a reason to change guidance.
"No, we don't see a change in frequency assumption." — Jonathan Strickle