By Mia MacGregor

Aug 14 - (The Insurer) - Fidelis Insurance Holdings is pulling back from the aviation sector after group CEO Daniel Burrows called it "the most challenged part of our portfolio" during the company's second-quarter 2025 earnings call on August 14.

"We see aviation as the most challenged part of our portfolio, and we will not write business that does not meet our underwriting hurdles," Burrows said during the call.

The Bermuda-based insurer has already begun scaling back its aviation exposure, choosing not to renew certain accounts originally forecast for 2025.

"We are beginning to see signs of small pricing adjustments on select accounts in the all risk sector, given heightened loss activity and remain well positioned to take opportunity where we see margin and adequacy," Burrows said.

Additionally, the CEO made clear that Fidelis would maintain its underwriting standards regardless of market conditions.

"As a reminder, we are not willing to compromise on our underwriting discipline, and we will continue to deploy capital in more creative ways until we see signs of sustained market improvement," Burrows stated.

The aviation challenges contributed to a combined ratio of 103.7% for Q2 2025, which included the impact of an English High Court judgment on aviation and aerospace business related to Russia-Ukraine lesser policy litigation.

Despite the aviation headwinds, Fidelis reported net income of $19.7 million or $0.18 per diluted common share for the quarter and grew gross written premiums to $2.9 billion for the first half of 2025.

Excluding the Russia-Ukraine litigation impact, Burrows noted that the company would have achieved a combined ratio in the mid-70s for the quarter.

Fidelis anticipates full-year underwriting growth of 6% to 10%. Burrows highlighted a strong pipeline of deals in asset-backed finance and portfolio credit, and forecasted high retention rates, margin and profitability in property.

In the marine sector, Burrows noted stability in the market and new opportunities in marine construction.

In reinsurance, Fidelis remains focused on managing exposures in line with appetite through targeted deployments and the use of outwards for insurance, Burrows said.

Looking ahead, Burrows said the company expects to unlock compelling growth opportunities as it moves past the Russia-Ukraine litigation uncertainty.

“Our focus is now on the remainder of the year and the U.S. wind season, which will determine the trajectory of the market in 2026.”

Burrows noted that the company is continuing to actively cultivate a pipeline of new third-party partnerships, “which will be accretive to our overall underwriting strategy”.

“And finally, we are leveraging our agility and strong capital position to prioritize and expand a set of capital management initiatives to maximize shareholder value as we move forward,” he added.