Beazley and Fidelis mid-year results

Beazley showing profitability through discipline in a softening market whilst Fidelis reports mixed first half of 2025 amid legal and natural disaster challenges.

Specialty insurer Beazley has reported a profit before tax of $502.5 million for the first half of 2025, down 31% from last year’s exceptional $728.9 million. While clearly lower, the result underscores a continued focus on profitability and tight underwriting control, with the decline reflecting a deliberate pullback in growth to preserve underwriting discipline amid softening market conditions.

Insurance written premiums edged up 2% to US$3.19 billion, with net premiums rising 1% to US$2.60 billion. The undiscounted combined ratio slipped slightly to 84.9%, compared to 80.7% in the previous year which is still a strong position taking into account the prevailing market headwinds. On an annualised basis, return on equity came in at 18.2%, down from 28.4% in H1 2024.

CEO Adrian Cox emphasised prioritising rate adequacy and sustainable profitability over short-term premium growth, citing a market characterised by elevated loss frequency and severity from climate-driven events, cyber attacks, and social inflation.

The message highlighted some business classes where they remain confident of continued positive performance. In property, despite heavy catastrophe losses (California wildfires, Texas flooding), the division delivered a discounted combined ratio of 74.2%. This reflects selective underwriting, higher attachment points, reduced exposure to high-risk geographies (e.g., California), and additional reinsurance protection. Margins remain strong, although rate pressure is emerging. In marine, accident and political risks (MAP) strong demand driven by geopolitical uncertainty, with contingency (events) and specialist terrorism cover performing well. Strategic expansion in renewables underwriting (e.g., new Madrid hires) points to growth potential. Lastly, in cyber, while the broader book saw rate declines, they are moderating and stabilising, particularly in Europe where Beazley is focusing for better risk/reward. The aggregate rate movement across all their lines of business for the half-year was a negative 3.9%, as opposed to a 0% movement for the same period in 2024.

Premium growth guidance has been revised to low-to-mid single digits, with the combined ratio target maintained in the mid-80s. The insurer sees sustained demand for specialist products in areas such as climate risk, cyber, and political instability, alongside continued innovation in new coverages and risk solutions.

Argenta view : Beazley’s first-half performance underscores its ability to navigate the insurance cycle with precision. By pulling back where rates are inadequate and focusing on underwriting quality, it maintains strong profitability, robust capitalisation, and readiness for long-term growth.

Fidelis Insurance Holdings, the parent company of the Fidelis group and a publicly listed holding company on the NYSE, who owns and manages the operations of its Lloyd’s syndicates, including s3123, also released its financial results for the first half of 2025. The results showed growth in premiums but highlighted some setbacks from legal rulings and natural disasters.

A positive was that they wrote $2.9 billion in insurance premiums in the first six months, up nearly 9% from the same period last year. However, the company reported a net loss of $22.8 million for the half-year, which on an operational basis, after adjusting for one-off events, increased the total loss to $31.6 million. This resulted in an undiscounted combined ratio for the period of 110.1%, compared to 89.3% for the same period in 2024. It’s important to note that these results are for Fidelis Insurance Holdings and are not for syndicate 3123, which was formed in 2024 and has a separate capital base. We will report forecasts for Syndicate 3123 separately.

A large portion of these losses came from legal claims related to the Russia-Ukraine aviation dispute and from damages caused by California wildfires. Despite these challenges, Fidelis continued to return capital to its shareholders, distributing $132.8 million through share buybacks and dividends.

The company’s book value per share—essentially the underlying value of the company—rose slightly to $22.04.

Dan Burrows, the CEO of Fidelis, highlighted that the company is focused on balancing profitable insurance opportunities with returning value to shareholders. He noted that the aviation litigation is largely resolved and that, excluding these one-off events, Fidelis’ performance would have exceeded its long-term targets.

Argenta view: Fidelis has clearly faced some challenges in the first six months of the year but remains focused on targeted growth, disciplined underwriting, and careful risk management. The company expects to continue leveraging its strengths to navigate market conditions and deliver value to shareholders.

The full H1 results presentation for Beazley can be found here:

www.beazley.com/en-US/investor-relations/report-presentation-webinars/

The full H1 results presentation for Fidelis can be found here:

www.investors.fidelisinsurance.com/events-and-presentations/presentations/