Pelagos Insurance Capital Ltd
(NYSE:PLGO)
$
24.52
+0.090 (+0.37%)
Market Cap: 2.10 Bil
Enterprise Value: 2.37 Bil
PE Ratio: 6.01
PB Ratio: 0.94
GF Score: 81/100 
Q2 2026 Pelagos Insurance Capital Ltd Earnings Call Transcript
Aug 13, 2026 / 01:00PM GMT
Release Date Price:
$22.75
(-6.46%)
Key Points
Positve
- Gross premiums written grew by over 6% in both the quarter and year-to-date, driven by strong performance from new underwriting partners and targeted deployment into attractive risk-adjusted return areas.
- Book value per diluted common share increased by 23% year-over-year, reflecting strong business performance and a continued focus on creating long-term shareholder value.
- Returned $73 million to shareholders in the quarter, including $60 million in share repurchases, which have been highly accretive to book value and earnings per share.
- The underwriting partnership strategy is gaining momentum, with new partners performing ahead of through-the-cycle targets and a strong pipeline of high-quality underwriting teams seeking to partner with the company.
- The company secured an additional whole-account quota share arrangement with a leading US insurance partner, which supports growth, optimizes capital, and validates the quality of the portfolio.
- The portfolio is well-positioned with stable probable maximum losses (PMLs), including a 1-in-250 California earthquake PML in the mid-single digits and a 1-in-100 Southeast, Gulf, and Caribbean clash exposure below 10% of shareholders' equity.
- The company demonstrated agility in capitalizing on geopolitical dislocations, such as the Middle East conflict, writing over $1 billion in war-related premium since Russia-Ukraine with a sub-20% loss ratio.
- Net favorable prior year development of $33 million was recognized in the quarter, indicating better-than-expected loss emergence across multiple lines of business.
- The company maintains a strong capital position, allowing for both growth investments and accretive capital returns, with $280 million in repurchases in the first half of 2026 contributing $0.90 to diluted book value per share.
- The company's leadership position in the market allows it to outperform peers in softening conditions, with rate decreases closer to single digits compared to the broader market's 15-20% decline in reinsurance cat renewals.
Negative
- The combined ratio for the second quarter was 99.5%, significantly higher than the first half's 93.1%, due to a higher-than-normal number of large loss events.
- Catastrophe and large losses were 27.8 points of the combined ratio, or $162 million, including a $60 million loss from the Middle East and a $34 million loss from the Ras Laffan gas plant explosion in Qatar.
- The property market remains competitive with continued rate contraction across a number of classes, requiring disciplined underwriting and selectivity that could limit growth opportunities.
- The company experienced a reescalation of conflicts in the Middle East and increased competition in those lines, leading to fewer risks aligning with its underwriting appetite.
- The policy acquisition expense ratio was higher than anticipated in the Reinsurance segment, partly due to a shift towards quota share deals which carry higher commissions.
- The company's growth is expected to moderate in the third quarter due to seasonality, with net earned premiums in Reinsurance expected to be between $130 million and $160 million, potentially impacting quarterly results.
- The company faces uncertainty in predicting future growth in Asset Backed Financing & Portfolio Credit, as other lines of business are more cyclical and dependent on market conditions.
- The company's operating return on average equity for the second quarter was only 5.1%, well below its through-the-cycle target of 13-15%, highlighting the impact of the volatile loss quarter.
- The company's effective tax rate of 16% for the quarter could be a headwind if it remains elevated, potentially impacting net income and returns.
- The company's reliance on outwards reinsurance to manage volatility and improve margins introduces counterparty risk and could be less effective if the retrocession market becomes less competitive.
Operator
Good morning, ladies and gentlemen, and welcome to the Pelagos Insurance Capital second quarter 2026 earnings conference call. As a reminder, this call is being recorded for replay purposes. (Operator Instructions)
With that, I will now turn the call over to Miranda Hunter, Group Chief Investor Relations Officer. Ms. Hunter, please go ahead.
Miranda Hunter
Pelagos Insurance Capital Ltd - Chief Investor Relations Officer
Good morning, and welcome to the Pelagos Insurance Capital's Second Quarter 2026 Earnings Conference Call. With me today are Dan Burrows, our CEO; Allan Decleir, our CFO; and Jonny Strickle, our Group Managing Director. Before we begin, I'd like to remind everyone that statements made during the call, including the question-and-answer section will include forward-looking statements.
Management's comments regarding expectations, projections, targets, and any future results are based upon our current assessments and assumptions and are subject to a number of risks, uncertainties and emerging information developing over time. It
Already have an account? Log in
Get the full story
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
7-Day Free Trial · Cancel Anytime
Subscription fee may be tax deductible.
Excellent 
4.6 out of 5 
Trustpilot
Trustpilot
Survey
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
Follow Us
Disclaimers