Pelagos Insurance Capital Limit

Pelagos Insurance Capital reported operating net income of $88 million, or $0.94 per diluted common share, for Q1 2026. The company’s combined ratio was 86.6%, compared with 115.6% in Q1 2025, an improvement of 29 points. Gross premiums written grew 7% year over year to $1.8 billion; Insurance GPW increased 13%, and Reinsurance GPW was $404 million, up 7% excluding 2025 California wildfire reinstatement premiums. Net premiums earned were $515 million in Insurance and $54 million in Reinsurance. Book value per diluted common share reached $26.22, up 7.2% including dividends. For guidance, management expects Q2 net earned premiums to be similar to Q1 in Insurance and $65 million to $75 million in Reinsurance. Jonny Strickle said the full-year outlook still assumes top-line growth of mid-single digits across the portfolio, while loss ratios remain expected in the mid-40s ex-PYD.

Dan Burrows framed the quarter as a validation of the company’s rebrand and capital allocator model, calling it a “best ever quarter of value creation.” He emphasized that Pelagos is a “price maker, not taker,” with the ability to shift capital across partners, geographies, and lines as market conditions change. His tone was upbeat and confident, especially around new partnerships, market access, and the view that the stock remains undervalued.

Allan Decleir focused on the hard numbers and capital actions. He highlighted $88 million of operating net income, a 86.6% combined ratio, and book value per share of $26.22, along with $219 million of share repurchases in the quarter at an average price of $19 per share. He said net investment income was $44 million, 92% of the portfolio was in cash and fixed maturity securities yielding 4.4%, and G&A was $29 million, which he said should continue through 2026. He also noted the quarterly tax rate was negative 4.8% because of a one-time U.K. Pillar Two tax-law benefit, with the underlying rate still around 16%, and that the company redeemed its $125 million junior subordinated notes, leaving a pro forma debt-to-capital ratio of 24.2%.

Analysts pressed on the Baltimore Bridge reserve increase, and management said the event reflected a market-wide reserve adjustment rather than a broader deterioration, with favorable prior-year development still positive overall after factoring in reinsurance. They also explained that growth in reinsurance is coming mainly from property cat reinsurance through a new partner, OAK Global, alongside Fidelis. On pricing, management said property rates are down in the single digits to low double digits, retrocession is more competitive, and outwards reinsurance has been used to improve risk rather than just bank savings. On cyber, management said they walked away from a nonrenewal because the loss cap/structure no longer met their risk appetite.