IGI Earnings Call: Resilience Amidst Challenges

International General Insurance Holdings Ltd. ((IGIC)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for International General Insurance Holdings Ltd. (IGI) painted a picture of resilience and strategic adaptability in the face of a challenging environment. Despite significant hurdles such as increased loss activity and currency volatility, IGI showcased strong growth in premiums and maintained a solid combined ratio. The company’s strategic focus on diversification and disciplined underwriting provided a stable foundation, although the quarter’s results were tempered by lower net income and challenges in the long-tail segment.

Strong Growth in Gross Written Premiums

IGI reported a notable 13% growth in gross written premiums, surpassing $206 million. This impressive increase was primarily driven by the reinsurance segment, which experienced a remarkable growth of nearly 44%. This growth underscores the company’s robust performance in expanding its premium base.

Solid Combined Ratio Performance

The company achieved a combined ratio of 94.4%, reflecting its resilience despite a challenging quarter marked by significant market losses. This performance highlights IGI’s ability to manage its underwriting effectively, even in adverse conditions.

Return to Shareholders

For the second consecutive year, IGI demonstrated its commitment to returning value to shareholders by paying a special dividend of $0.85. This resulted in a total of $43.5 million returned to shareholders during the first quarter, reinforcing investor confidence.

Positive Prior Year Development

IGI experienced favorable prior year development of $25.8 million, primarily driven by positive outcomes in the short-tail segment. This development contributed positively to the company’s financial results.

Investment Income Growth

Investment income saw an increase of over 15% from Q1 2024, with fixed income securities generating $13.6 million at a yield of 4.3%. This growth in investment income provided a boost to IGI’s overall financial performance.

Increased Loss Activity and Catastrophes

The quarter was significantly impacted by higher natural catastrophe losses, including events like the California wildfires and Taiwan earthquakes. These events affected both the reinsurance and short-tail segments, posing challenges to the company’s underwriting results.

Currency Volatility Impact

Currency volatility had a negative impact on reserves, with a reported 10-point impact on the combined ratio due to non-U.S. dollar reserves. This volatility added an additional layer of complexity to the company’s financial management.

Underperformance in Long-Tail Segment

The long-tail segment recorded an underwriting loss of $7.5 million, driven by higher loss activity and negative development in the professional indemnity portfolio. This underperformance highlighted the challenges faced in this segment.

Decreased Net Income

Net income decreased to $27.3 million from $37.9 million in Q1 2024, attributed to lower underwriting income and increased loss activity. This decline in net income reflects the challenging conditions faced during the quarter.

Forward-Looking Guidance

Looking ahead, IGI remains focused on its diversification strategy amidst a challenging environment characterized by elevated loss events and macroeconomic volatility. The company aims to continue its growth trajectory in gross written premiums, particularly in the reinsurance segment, while managing the impacts of natural catastrophes and currency volatility. With a strong return on average shareholder equity of 16.7%, IGI is poised to navigate the challenges ahead while maintaining shareholder value.

In conclusion, the earnings call for International General Insurance Holdings Ltd. highlighted a quarter of resilience and strategic adaptability. Despite facing significant challenges, the company demonstrated strong growth in premiums and maintained a solid combined ratio. Key takeaways include the company’s commitment to shareholder returns, positive prior year development, and growth in investment income. While challenges remain, particularly in the long-tail segment and due to currency volatility, IGI’s strategic focus positions it well for future growth.