Pelagos Insurance Capital (PLGO) Q1 2026 earnings summary

Executive summary

• Achieved record quarterly value creation with a 7.2% increase in book value per diluted share to $26.22, driven by strong underwriting, disciplined capital allocation, and new partnerships.

• Gross premiums written grew 7% year-over-year to $1.84 billion, with Insurance segment up 13% and growth fueled by new underwriting partners.

• Operating net income reached $88.4 million ($0.94 per diluted share), with annualized operating ROAE of 15.2%.

• Returned $233 million to shareholders through $219 million in share repurchases and $13.3 million in dividends, including buyback from original PE sponsor.

• Completed rebrand to Pelagos Insurance Capital, emphasizing capital allocation and specialist partnerships.

Financial highlights

• Combined ratio improved to 86.6%, a 29-point improvement from Q1 2025, reflecting better underwriting and lower catastrophe losses.

• Catastrophe and large losses were $72 million, down from $333 million last year.

• Net investment income was $44 million, with 92% of portfolio in cash and fixed maturity securities yielding 4.4%.

• Total assets reached $13.7 billion and shareholders’ equity was $2.3 billion as of March 31, 2026.

• Effective tax rate was -4.8% due to a one-time UK tax law benefit; normalized rate is 16%.

Outlook and guidance

• Management emphasizes continued focus on profitable underwriting, capital returns, and leveraging a flexible capital allocator model for growth.

• Expect net earned premiums in Q2 to be similar to Q1 for Insurance, and $65–$75 million for Reinsurance.

• Maintain full-year outlook for mid-single digit top-line growth across the portfolio.

• Continue to target mid-40s loss ratio for the year, despite recent quarters running below that.

• Strategic capital allocation and expanding underwriting partnerships are expected to support ongoing book value growth.