Management said the elevated losses reflected timing variability, and reaffirmed its mid-40% overall loss-ratio outlook. Premiums continued to grow through specialty lines and partnerships: Gross written premiums increased 6% year over year to $1.3 billion, led by property, marine, asset-backed finance and portfolio credit. Management maintained its 2026 target for mid-single-digit premium growth despite pricing pressure in some markets.
Capital returns remained significant: Pelagos returned $73 million to shareholders during the quarter, including $60 million in share repurchases, and maintained its $0.15 quarterly dividend. First-half repurchases totaled $280 million and contributed $0.90 to diluted book value per share. Fidelis Insurance (NYSE:FIHL), operating as Pelagos Insurance Capital, reported second-quarter operating net income of $29 million, or $0.34 per diluted common share, as higher large-loss activity pushed its quarterly combined ratio to 99.5%.
For the first six months of 2026, operating net income totaled $117 million, or $1.31 per diluted common share, while annualized operating return on average equity was 10.1%, Chief Financial Officer Allan Decleir said. Book value per diluted common share rose to $26.56, and including cumulative dividends, increased 23% over the past 12 months. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be Chief Executive Officer Dan Burrows said the quarter was the company's first under the Pelagos Insurance Capital name and that the rebrand had increased clarity around its strategy as a capital allocator. He said the company is seeing wider interest from underwriting teams and an increased pipeline of partnership opportunities.
Gross premiums written increased 6% from a year earlier to $1.3 billion in the second quarter. Burrows said insurance growth was led by property, marine, asset-backed finance and portfolio credit, while the reinsurance segment expanded through targeted deployment in areas with attractive risk-adjusted returns. → Nebius' Q2 Beat Shows the AI Bottleneck Is Capacity, Not Demand Net premiums earned totaled $515 million in insurance and $66 million in reinsurance. For the third quarter, Decleir said Pelagos expects insurance net earned premiums to remain similar to the second quarter, while reinsurance net earned premiums are expected to range from $130 million to $160 million.
The company earns a larger share of its reinsurance premium in the third and fourth quarters because of its exposure to wind perils, management said. → On Holding's Price Stumble May Be an Opening for a Company Built to Run Property growth included expanded business with bundled insurance, Burrows said. He added that the company remained selective in classes where pricing no longer met its return requirements, even as it sought new opportunities through its network of underwriting partners. Marine, political-risk and political-violence business saw stronger demand and favorable pricing amid geopolitical uncertainty in the Middle East.
Burrows said Pelagos deployed capital selectively, but has become more cautious as conflict re-escalated and competition increased in those lines. During the question-and-answer session, Burrows said Middle East business written since the conflict began this year had operated at a loss ratio below 20%. Group Managing Director Jonny Strickle said the company's broader war book, including business written since the Russia-Ukraine conflict, has generated more than $1 billion in premium at a sub-20% loss ratio.
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