Good morning, ladies and gentlemen, and welcome to the Fidelis Insurance Holdings First Quarter 2024 Earnings Conference Call. With that, I'll now turn the call over to Miranda Hunter, Head of Investor Relations. Ms. Hunter, please go ahead.

Good morning and welcome to the Fidelis Insurance Group first quarter of 2024 earnings conference call. With me today are Dan Burrows, our CEO; and Allan Decleir, our CFO. Before we begin, I'd like to remind everyone that statements made during the call, including the question-and-answer section may include forward-looking statements. These statements are based upon management's current assessments and assumptions and are subject to a number of risks and uncertainties. These risks and uncertainties are described in our 2023 annual report on Form 20-F filed with the SEC on March 15th. Although we believe that the expectations reflected in forward-looking statements have a reasonable basis when made, we can give no assurance these expectations will prove to be achieved. Consequently, actual results may differ materially from those expressed or implied. For more information, including on the risks and other factors that may affect future performance, investors should also review periodic reports that are filed by us with the SEC from time to time. Management will also make reference to certain non-GAAP measures of financial performance. The reconciliation to US GAAP for each non-GAAP financial measure can be found in our current report on Form 6-K furnished with the SEC yesterday, which contains our earnings press release and is available on our website fidelisinsurance.com. And with that, I'll turn the call over to Dan.

Thank you, Miranda. Good morning everyone, and welcome to the Fidelis Insurance Group first quarter earnings call. I'm very pleased to report that we delivered a strong start to the year as we successfully capitalized on the continued mature hard market conditions, leaning into our core lines, achieving sustained profitable growth, leveraging our lead position to generate alpha results, and broadening the footprint of our business. In the first quarter, we increased growth premiums written by 21.6% and delivered a combined ratio of 85.8%, both of which were in line with our expectations. These excellent results reflect our strong underwriting and risk selection capabilities across our growing and well diversified book of business. We continue to see positive pricing across our portfolio with an RPI for the first quarter of 112%, demonstrating our ability to achieve preferential terms in a verticalized market. We delivered another strong course of returns with an annualized operating ROAE of 14%. Again, in line with our expectations, we also grew book value per diluted common share to $21.22. For the full year, we remain on track to generate ROAE in the 14% to 16% range as we earn a greater portion of our capacity exposed premium in the second half of the year. As our results demonstrate, our strategy and structure are working exactly as intended. We have the flexibility, discipline, and market access to deploy capital where we believe there are attractive risk-reward opportunities in what continues to be the best market we have seen in decades. We are leveraging our scale, lead positioning and deep relationships with brokers and clients to grow our business and have constructed a diversified portfolio of short held specialty risks, which we believe is well positioned to deliver combined ratios in the mid to high 80s throughout the cycle. And as a reminder, we do not write casualty lines. Each strength of our strategy is the daily underwriting calls, which are attended by all underwriters, both from the Fidelis Insurance Group and the Fidelis partnership. These calls provide insight across our entire portfolio, giving a forum to discuss our offering on each individual risk. They enhance our ability to cross-sell across target lines, and help us quickly respond to market dynamics and capitalize on areas of opportunity. We continue to see opportunities across our core lines with property direct and faculty being a great example, where we delivered growth of 36.5% compared to the prior period, and we are capitalizing on attractive pricing within our broader portfolio. In the first quarter, we announced our participation in the investment in the new Lloyd's Syndicate 3123 with the data partnership to execute our capital and underwriting strategy and broaden the footprint of our business. This vehicle is expected to add to long-term growth by providing access to enhanced ratings platform below the licensing and Lloyd's only business. The Syndicate will write business across multiple insurance and reinsurance policies as an extension of our strategy to leverage our expertise to take lead positions. Fidelis Insurance Group will be taking a variable credit share across the portfolio, which enables us to access additional business channels that align with our current risk appetite. This is a perfect example of why our underwriting relationship with the Fidelis partnership works so well. Our long-term agreement was designed to enable us to match the right risk with the right capital, exercising our right of first refusal with this variable process which allows us to do just that, participating in the lines where we have more risk appetite. As we consider industry events in the quarter, we wanted to touch on the March 26th Baltimore Bridge collapse, which will impact the specialty insurance market. Given the complexities surrounding the event, it could take years to fully resolve. We continue to monitor developments and believe any loss resulting from the bridge collapse will be manageable within our diversified portfolio. In summary, I'm very pleased with our first quarter performance, which positions us for another year of strong profitability, growth, and returns. With that, I'll pass it over to Allan to walk through our financial results in more detail.

Thanks, Dan, and I'd also like to welcome everyone joining our first quarter earnings call. As Dan mentioned, we had an excellent first quarter with operating net income of $87.3 million or $0.74 per diluted common share and an annualized operating return on average equity of 14%. Our book value for diluted common share at March 31 was $21.22. Looking at our gross premiums written, we had excellent top line growth of 21.6% in the quarter to $1.5 billion compared to the first quarter of 2023. This was driven in large part by the specialty segment, which grew by $199.9 million or 24% to $1 billion. This is consistent with our expectations for growth to be broadly in line with what we saw last year. Specialty growth was primarily driven by property direct and facultative, which saw an increase of $62.4 million or 36.5% from the prior year period, benefiting from the continued strong rating environment and new business. The growth is in line with the overall 38.7% growth we saw in this class across 2023. Other drivers of growth within our specialty book in the quarter included other property, which saw an increase of $55.7 million, and marine which saw an increase of $49.9 million. As a reminder, there is seasonality within our specialty book with marine and aviation and aerospace being more heavily weighted to the first half of the year, while in property direct and facultative, which we expect to be the key driver of specialty growth this year. We anticipate a more even distribution of premium across the quarters. Bespoke premiums were consistent with prior periods with first quarter gross premiums written of $153.5 million, an increase of 1.8% versus the prior year. Our reinsurance segment grew by $66.4 million or 25.5% driven by property reinsurance. As Dan discussed in our year-end call, we write approximately a third of our reinsurance book at January 1st, and in 2024, we saw strong January 1st renewals achieving RPIs of 118%. Looking ahead, premiums from the new Lloyd Syndicate 3123 variable quota share, and our 9.9% investment in the Syndicate will flow through each of our three segments. Our participation in the Syndicate won't materially impact our expectations for growth this year. On a net premiums earned basis, we delivered an increase of 26.4% from the prior year to $488 million in the first quarter of 2024 consistent with our growth in gross premiums written. As noted by Dan, our premiums are not earned on a straight-line basis; property catastrophe premiums are more heavily weighted to the back half of the year. Our excellent underwriting performance resulted in a combined ratio of 85.8% for the first quarter, which included a loss ratio of 37.4%. This 37.4% is composed of attritional losses, catastrophe, and large losses, and prior year development. Looking at attritional losses, in the first quarter, we had $146.3 million or 30% compared to $139.5 million or 36% in the prior year period. Catastrophe and large losses for the first quarter were $103 million, which includes a $51.2 million provision for the Baltimore Bridge collapse. In addition to other IBNR and smaller events in various lines of business, including aviation and aerospace, marine, and property direct and facultative. Specific to the Baltimore Bridge collapse, our exposure is in line with our market position. We anticipate that any settlement will take a few years to play out and as such we have set our provision based on a probabilistic model. We have net favorable prior year development of $67 million for the quarter versus $2.1 million in the prior year period. Of the $67 million for the quarter, specialty was $34.4 million, reinsurance was $24.3 million, and bespoke was $8.3 million. This was all primarily driven by better-than-expected loss activity. Turning to expenses, policy acquisition expenses from third parties were 27.9 points of the combined ratio for the quarter consistent with the prior year period. The Fidelis partnership commissions were 15.7 points of the combined ratio for the quarter, of which 1.8 points related to accrued profit commissions due to the strong underwriting results in the quarter. And finally, our general and administrative expenses were 4.8 points of the combined ratio for the quarter compared to 4.3 points of the combined ratio in the prior year. Looking now at investments. Net investment income increased to $41 million for the first quarter of 2024, compared with $20.4 million in the prior year period. During the first quarter of 2024, we sold $201.2 million of securities with an average book yield of 0.9%, resulting in a realized loss of $7.4 million. We reinvested the proceeds in securities with an average purchase yield of approximately 4.9%. At March 31st, 2024, the average rating of fixed income securities remains very high at AA- with a book yield of 4.2%. Duration has lengthened slightly to 2.2 years. Turning to capital management, we remain committed to maintaining a strong balance sheet. As I mentioned last quarter, our capital management strategy includes first allocating capital to support and grow our business in attractive segments of the market; second, using outwards reinsurance as a flexible and aligned source of capital; and finally, returning excess capital to shareholders through a combination of share buybacks and dividends. Specifically, during the first quarter, as we mentioned, we grew our premiums and targeted lines seeing overall premium growth across our book of 21.6%. Regarding outwards reinsurance, we sponsored two new tranches of our Herbie Re capacity bond for $150 million of protection to cover earthquake and storm events in the US, enhancing our overall outwards program, and we returned $16.8 million to shareholders through $11.8 million of common dividends and repurchases of $5 million. Subsequent to March 31, we have repurchased another $8.3 million of shares. As of today, we have $36.7 million remaining in our share repurchase authorization. In summary, I'm very pleased with our excellent financial performance in the first quarter of 2024. Looking ahead, we are confident about the future as we continue to focus on delivering profitable underwriting and book value growth. I'll now turn it back to Dan for additional remarks.

Thanks, Allan. As you can see, we entered 2024 in an incredibly strong position. We are operating in a sustained hard market with attractive levels of pricing across our portfolio and are practically positioned to actively capitalize on the significant opportunities this presents. Taking a closer look at our segments, in specialty, which is our largest, conditions and pricing remain attractive across our core lines, and in the first quarter, we achieved specialty RPIs of 111%. As a reminder, our key drivers of specialty are property direct and facultative, marine, and aerospace, and our aim is to be a top three market for these classes. Our appetite for property direct and facultative has increased since late 2019 in response to attractive pricing levels given by the frequency of natural catastrophes and climate-driven events, and the exit of several larger carriers. Following $120 billion of natural capacity losses in 2023 and an active start to 2024, including several severe weather events in the US, the market has remained dislocated with increased demand and no new meaningful supply of capital coming in. We continue to see attractive opportunities to deploy capacity across this key line of business in line with our targeted risk selection approach, and we are pleased with the continued strong performance of this line during the quarter. Marine also remains a significant market for us where we're able to leverage our leadership position to cross-sell and set pricing terms and conditions across multiple lines. We are seeing particularly attractive opportunities in large marine construction where significant capacity is required and we've had several new business wins this year. We've proven ourselves and our ability to innovate, enabling us to offer meaningful solutions to our clients. We are an established leader in the classes we participate in, always looking to create alpha performance. Looking ahead, the specialty market continues to offer growth across our four lines at attractive returns, and we expect specialty to continue to contribute to our growth throughout 2024. In bespoke, our established relationship with clients and brokers along with our underwriting expertise enables us to maintain our position as an industry leader, particularly when considering the high barriers to entry for others given the nature of the underlying risks. The unique nature of this business results in a less commoditized, more tailor-made product that delivers low volatility underwriting performance with less exposure to typical market cycles. Given the highly tailored nature of this portfolio, premiums do not follow a regular predictable schedule. The first quarter was a solid start for the fiscal portfolio with premiums in line with expectations. Looking ahead, our pipeline of structured risk transfer and political risk deals for the second quarter is in line with the prior year period, and we expect opportunities to continue for the rest of 2024. Finally, in reinsurance, we continue to execute our strategies of deploying capacity at targeted attachment points with core clients, and this was an excellent quarter for this segment. Rate remains attractive in an enhanced pricing environment, and we were able to achieve higher rate increases across our portfolio given our thoughts from price leadership. RPI for the quarter was 118% and was the main driver for premium growth year on year. We continue to see clients looking to buy more limits in the US and Europe, and our ability to offer private layers helped us secure our place on programs. While we are beginning to see an uptick in demand, there's been no major influx of new capacity. We continue to manage our portfolio in line with our view of risk and are happy with our position heading into the rest of the year. Briefly on April renewals, we saw positive rate movement continuing where our portfolio is driven by Japanese future renewals. We continue to enhance our broadened and established relationships in the region to create opportunities on our fees of the growth in our portfolio. As we look ahead to the rest of the year, we are focused on deploying capital with the best underwriting opportunities, which will further enhance our ability to deliver consistently compelling returns through the cycle and create value for our shareholders. One example is the new Lloyd's Syndicate, which opens the door to exploring additional opportunities within Lloyd's, and longer term, we believe this will lead to broader opportunities globally as we continue our focus on aligning our capital to the right risk. In closing, 2024 is off to an excellent start. We are pleased with the momentum we had coming out of the first quarter and our ability to capitalize on opportunities across our portfolio. We are confident in the outlook for our business and remain on track to deliver operating ROAE in the 14% to 16% range for the full year, which is above our long-term target. We continue to see growth potential in the current market and our scale, lead positioning, balance sheet strength and expert execution from our dedicated teams position us well to deliver sustainable long-term profitable growth and create meaningful value for our shareholders. With that, I'll turn it back to the operator.

With that, our first question comes from the line of Matt Carletti with Citizens JMP.

I wanted to start, I guess, a two-part question on the Baltimore bridge loss. I guess one, if you could give us a little more perspective on kind of how you set that loss reserve specifically, if you can, kind of what your view of industry loss is or if you are even able to kind of translate in those terms. And secondly, just what impact do you think that loss might have on the related, particularly marine but related markets?

I think firstly we look at Baltimore and say it's within expectation given our market profile. As you know, we take a standard reserving approach, we would weight limits against the full range of probabilistic outcomes. We've written over a billion dollars of specialty in the quarter, and we think therefore the loss, any loss is very manageable within that sort of diversified portfolio. But it's very complex and it's very early. So I think to talk about, so the second part of your question, how we think about it will impact the market, we'll just wait for it to develop and see what the impact to the market will be in the future. I just think it's too early to think about exactly how pricing will be affected.

I have a follow-up question regarding modeling. The policy acquisition costs by segment showed some variation, and you mentioned a mix of business along with some reinsurance seeding commissions. Is this just a typical quarterly fluctuation, or is there something more forward-looking we should consider? In other words, should we expect any significant differences in our segment performance between the full year of 2023 and full year 2024?

No, I think you have the right answers. One important factor to always consider on our book of business is that we do buy a significant amount of outwards reinsurance, and that can also significantly impact the post-acquisition costs on a quarter-to-quarter basis. If it's quarter share business that we buy on an outwards basis, there's a seeding commission and a profit commission that comes back to us. It can fluctuate quarter to quarter depending on the mix of business that is written and earned in the quarter. But I think overall, the run rate in the first quarter and in 2023 is the way to think about it.

Your next question comes from Mike Zaremski with BMO.

Just following up, because I think some of us are trying to track what each company's thinking on the Baltimore bridge losses. Some companies have said like the range is 1 billion to 3 billion, they're reserving at the upper end. Just curious if you wanted to provide any kind of color on that. If not, I can just move on to the next question.

I think, as I said, we weigh against all of the probabilistic outcomes, and I think if you think of the top end of our range, it will be in line with the commentary you've heard from some of our peers.

There has been a lot of discussion lately about property pricing, which is slowing down but still on the rise, coming off record levels in many cases. I'm reviewing some of your RPI KPIs, which seem to reflect that trend. Is this what you are also observing? I know bespoke RPIs aren't often broken out, but I'd like to hear your thoughts on pricing power in the overall marketplace.

It's a really good question. Firstly, on Bespoke, because of the nature of that product line, it tends to be more insulated against market cycles. So we do see some improvement in terms on some of those lines, but generally it flattens as opposed to the reinsurance and the specialty. But when we think about market duration, it's still the best pricing in the market. It’s still the best market we've seen for 20 to 25 years, we've had compound increases over the last three or four, five years. It's still a very verticalized market. So we've talked about this before. Not everyone starts in the same place. As a leader across the portfolio, about 90% of the business then we're able to dictate terms, conditions, and we get better pricing and better coverage. Obviously, we see the opportunities early as well. We're able to have a think, better risk selection on that basis, but we're still seeing positive movement. There's a lot of demand in the market and despite those secular factors that we've talked about, climate change reserves, inflation, there's really been no new influx of significant capacity into the market, but inflation is driving demand and we've seen that. Having that lead line, that's scalable gives us leverage. We're important and relevant to the brokers and clients, and that's how we get the differential terms. That's what creates the alpha.

And just lastly, on the share authorization, the stock has outperformed meaningfully since you announced that just and anything we should think about in terms of how you all kind of are going to pace it going forward based on valuation?

No, I think when we announced the program in the latter part of December 2023, it was a $50 million buyback program. We said we'd be measured, but it would certainly add value to our shares. It was certainly accretive to shareholders. I think given our current $21.22 book value; we could still continue executing the program throughout 2024. It was a 12-month authorization, so I think the pacing was right, and I think we will be in the market depending on share price and whether it's accretive to the buyback.

Your next question comes from Yaron Kinar with Jefferies.

I want to start with the bespoke segment if we could. You offered some very helpful guidance last quarter talking about a pipeline that was relatively flat year over year. I think where there's still a bit of fluctuation is on the session rate there. And I'm guessing it's because the book is essentially all new as opposed to renewed every quarter, and therefore you can see pretty significant fluctuations. But is there any I guess guidance or rule of thumb you can offer us in terms of thinking of what a proper seating rate should be there? A and B, maybe you can talk about maybe the differences in the composition of the portfolio year over year that would have resulted in a change in session rate?

I'll start. I think specifically if this is about business mix and the difference in session rate this time was around a cyber relationship that we had, and we buy a lot of proportional reinsurance on it. And Allan said earlier, we see that as a very fungible form of capital that helps scale our line. And it really gives us leverage as a leader. But in that particular instance, it's because we're seeding out premium because of the scale of the proportional program that we buy on it.

And is there a way for us to think about, like, is a 50% session rate a reasonable number to think about going forward? Obviously, there's going to be some fluctuation quarter to quarter, but just want to make sure we're thinking about it correctly.

As you mentioned at the beginning of your question, the Bespoke segment has inherent fluctuations and tends to be unique. They are not necessarily all renewals, but generally, we would expect the overall yearly session rates for 2023 to be around 40%, possibly up to 50%. This can vary depending on the type of deal, but typically, it's close to the 40% range.

I have a second question, which might be my third, but I'll ask it anyway. Regarding the timing of reserve reviews, this quarter saw a significant release, likely the largest quarterly release I can recall. Could you discuss what specifically drove that and how you assess the reserves throughout the year? Which books are reviewed?

I'll take that question. For context, I would note again that we do not write any casualty business. We are a short-duration company. Our average duration of our reserves is two years. As a result, we have always had a process of looking at our reserves on a timely basis, quarter to quarter. And so each quarter you'll see that we do release reserves or strengthen reserves based on loss activity for that particular quarter. We do not wait for a particular quarter or year-end reserve review. In Q1 2024, the activity in prior years was fairly benign across all three segments. And again, the results that would flow through are purely based on experience. There was no change in assumptions; it was purely based on the actual flow through of results for the quarter.

Your next question comes from Meyer Shields with KBW.

Dan, one first question, I just want to make sure I understand it. It sounds like the syndicate is going to be writing reinsurance as well. Should we assume that Fidelis is willing to take on more exposure in reinsurance through the syndicate in addition to whatever pricing momentum?

It's a really good question. As you know, we have a variable approach share, so we'll lean into lines where we do have appetite and where we have less appetite. We'll take smaller shares. I think we have seen some very positive movement in terms of pricing on the reinsurance portfolio. And as we said in the script, we've taken premium increases rather than exposure increases. So we're monitoring it. There are some deals that flow into Lloyd's and Lloyd's only that we'd like to have access to. That's one of the whole purposes of the Syndicate: getting access to business we can't originate now. But we'll stay away from attritional that's not really in our appetite. Depending on the risk, I think this is the key thing around the Syndicate: we get to see every deal, and if it looks attractive, we will combine it. But if it's not with an appetite, we won't match our capital to those risks.

And then maybe on the flip side.

I think I just want to put out there that, sorry to interrupt you. Whatever we say you, that's going to have no impact on our kind of premium for 2024. It's a very small premium item for 2024.

With regard to the direct and faculty book, I was hoping for an update on reinsurance purchasing strategy based on current expectations for midyear property pricing and property reinsurance pricing.

Another good question, and actually very timely. So as you know, we buy a very broad range or suite of products both proportional non-proportional index and January is a very busy time as is April. We tend to buy the direct and facultative program there. It's coming within expectation. We've actually bought a bit more limit. You'll know we've just renewed the Herbie Re bonds, two tranches, $150 million or in total $150 million, and that gives us protection for US name storm, and US quake. So as the portfolio has grown, then we'll look to take opportunity in the reinsurance market just to help us scale our line. Once again, being a leader in a verticalized market, especially like DNF, gives you a very differential result. And we'll take advantage of that market if we can.

Your next question comes from Mike Ward with Citigroup.

I was curious if the Lloyd structure of seeding commission is similar to the other MGU sourced business.

I think overall, the Lloyd's expense structure is similar to how we have currently and I wouldn't expect any material change until our expenses overall as a result of the Lloyd's participation.

And then there is potential, there's hurricane forecast coming out. Just wondering if you guys could remind us your exposure if we do see some of the relatively extreme forecasts.

We don't provide specifics on PMLs. As you're aware, we have exposure at one in 150, along with Southeast Clash. However, as I mentioned earlier, we have considerable proportional protection for that portfolio in both Truity and D&F. We utilize a comprehensive range of products, including non-proportional and index products, and we just renewed the bonds. Therefore, we believe we are well protected in that portfolio.

Thank you. This concludes today's question and answer session. I'd like to turn the call back to Dan Burrows for closing remarks.

Thank you everyone for joining us today. We appreciate your interest in our company. If you do have any follow-up questions, we'll be around to take your call. So thank you very much and have a great day.

Thank you. That concludes today's conference call. Thank you for participating. You may now disconnect.