Pelagos Insurance Capital Limited KBW Insurance Conference 2026

Yeah. Thanks, Meyer. I think we've had a really exciting year trying to build out our story as a capital allocator, executing on the model that we've set out over that period. There's probably a couple of areas I'd want to touch on before we kick off. The first one of the things we've really been thinking about a lot is optionality and access to risk. I think as a capital allocator, it's one thing working out where and how you want to allocate capital, but if you don't have access to that underlying source of risk, then you can't execute on that strategy. For us, our cornerstone partner, our first partner was The Fidelis Partnership. They write over 100 lines of business. That gives us a great base to work from. We're continually trying to innovate with them.

I think one of the more recent examples would be around data center risk, where we look to engage on the construction side there, building up different sources of capacity with them, so we can go with a meaningful line size, benefit from the leverage you get by having a meaningful line size while not over-allocating ourselves in terms of net line ourselves. There's one example with them. Obviously, we've had a real focus on building out to new underwriting partners as well, and some of the examples there, Euclid Mortgage. We previously had great success with the European mortgage book with The Fidelis Partnership. Euclid accessed the U.S. mortgage market, which historically has been really difficult to get into, especially from a reinsurance point of view. So again, that's given us more options to access through.

I think the more different ways we can access market, the more different lines of business we have or access to different elements of a line of business that we're already in gives us more optionality to be more resilient as the market changes. So it's been a real focus for us. I just arrived here from Monte Carlo yesterday, and I have to say, working through with potential partners, existing partners there, the pipeline we've got over the next couple of years is really, really exciting. Lots of innovative teams there. We've said before we turn down over 90% of the risk we see, but even with that stat, I think the amount of opportunity we see is really exciting for us. The other thing I'd touch on, which I think is key to being a capital allocator, is agility. Our model is purpose-built for agility.

Got options, different top-tier underwriting teams, people accessing different bits of the market at different times. And us being able to move between them as the market moves gives you real flexibility. Again, if you've got an idea of how you want to allocate your capital, you've got the access to market, but you don't change with the market, then I think that puts you at a big disadvantage. A couple of examples of us being agile over the last year that's been really exciting for us. One is we pulled out of the aviation market 50%. As soon as we determined that that wasn't hitting the hurdles we need, we took action to correct that.

On the opposite side to that, there was opportunity post the start of the conflict in the Middle East to go in and write a niche bespoke book, picking certain risks that hit the hurdle, staying away from others, going in the market where we saw opportunity, pausing where we saw uncertainty, and going back in with a different risk appetite where appropriate. That business has run at a sub 20% loss ratio and been really great for us, given us a real boost into the year. So being agile all the time is something that's really important to us. Our whole thought process over the recent period has been about those two things, expanding optionality, being agile to move through where we see the best opportunity at a particular time, and I think that's what gives our business the resilience to move through market cycles.

Yeah. We're a reasonably new company, so we don't have legacy data. We don't have legacy operation systems. We're also structured in a way where some of that burden's taken over by our underwriting partners rather than us. So I think what you won't see is big efficiency changes and reductions in expense ratio because we never had bloat in those areas to begin with. That's not something you're going to get from Pelagos. The way we look at what AI is doing for us is it's giving us more time, and it's giving us more time to spend on making high-value strategic decisions and executing on them. Some examples of that, we use AI to process data, we use AI to come up with the first view of analytics and analysis out of that data, and then we use AI to iterate on that.

That buys the management team, for one, gets better, higher quality information to base their decision and strategic thinking on. But it's more than that. It cascades down the business, and more junior members of our business now are also getting time to think strategically. One of the things at Pelagos is I think diversity of experience in our leadership team has been one of our greatest strengths. I think my background's actuarial, as you say. I've come up through that. Dan's background, so our CEO, is as opposite as you can get to that, I think. He's come up through the broking market, senior positions in Aon. Just to get just our two perspectives together, that's really diverse. You can add up our years of experience, but it's more that those years are in completely different areas.

Add on our CFO, our CRO, and other people, and that diversity of experience really shines through when we think about underwriting opportunity. To take some of the more junior members of the team throughout the organization and add their experiences in, particularly since they started their careers, their whole life experience is in a different world to ours, has been really useful. Bringing that back to AI, that extra time that we've got through the entire organization has let more people contribute to the strategic thinking. Now you wanted concrete examples.

I did. No surprise that I don't know what the others have given you, but unless it's on expenses, it's very hard to do.

What I see it doing for us is improving decision making and strategic thought throughout the business, so that materializes with a better combined ratio, a better return than we would have had. It gives us more time to add optionality, as I said earlier, build a more robust business, think about how we're going to navigate market cycles. I think it improves the business and will improve the results as a consequence of that. But it's really difficult to split out of our result how much was because of that extra time, how much would you have had anyway?

Yeah. Lots of people in our industry talk about how it's specialist, it requires expertise, it's very difficult to disrupt the underwriting process in specialty with AI directly. I do think that's true, at least with AI in its current form, but it can enhance the existing underwriting process, and I think people that embrace that earlier are going to make better decisions than those that don't.