Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- International General Insurance Holdings Ltd (IGIC, Financial) reported an impressive annualized return on average equity of 22.9% for the quarter and 25.1% for the half year.
- The company achieved a 7.3% growth in book value per share in the first half of 2024, following a 36% growth in 2023.
- Gross premiums in the reinsurance segment increased by 57.7% for the second quarter and 28.4% for the first half, showcasing strong performance.
- Investment income improved significantly, with an annualized investment yield of 4.6% for the first half of 2024.
- IGIC increased its quarterly dividend to $0.025 per share and executed a share repurchase program, reflecting strong capital management.
Negative Points
- Gross written premium growth was lower than expected, at 3% for the second quarter and 3.7% for the first half, due to competitive pressures.
- The long tail segment experienced contraction in gross premium volume, with market conditions putting pressure on rates and profitability.
- The company faced a more active loss environment, including natural events and offshore energy losses, impacting results.
- Competitive pressures are rising, with increased capacity and players seeking greater market share, challenging growth opportunities.
- The aviation and upstream energy sectors are particularly challenging, with reduced books and inadequate market reactions to losses.
Q & A Highlights
Q: Can you provide more detail on the growth outlook by segment, particularly in the long-tail areas where you're pulling back?
A: Waleed Jabsheh, President and CEO, explained that the long-tail segment is under pressure, especially in D&O and financial institutions. The company is focusing on profitability rather than volume. Reinsurance remains the brightest spot, and they are focusing on growing this segment. The short-tail segment is mixed, with engineering and onshore energy performing well, while aviation and upstream energy face challenges.
Q: With US gross written premiums up 47%, how much of this growth is from property versus other lines?
A: Waleed Jabsheh noted that the US market is seeing growth across various lines, including property, onshore energy, and contingency. The company is cautious and aims to grow its portfolio in a measured fashion. While there are competitive pressures, IGI has been able to secure attractive deals.
Q: Can you provide more detail on the favorable reserve development and where it's coming from?
A: Waleed Jabsheh stated that IGI takes a cautious approach to reserving, preferring to reserve conservatively. The releases are not tied to a specific year but span multiple years, particularly in long-tail lines. The trend of favorable reserve development is expected to continue due to healthy rates and margins.
Q: Can you provide more details on the offshore energy losses mentioned in the quarter?
A: Waleed Jabsheh clarified that the offshore energy losses were risk losses, not a single event but multiple losses, primarily in offshore construction. The operational book continues to perform well, but the construction side has seen increased frequency of losses.
Q: How is IGI handling the increased competition and capacity in the market?
A: Waleed Jabsheh emphasized that IGI focuses on profitability rather than growth for its own sake. The company is leveraging its underwriting talent and strategic positioning to capitalize on opportunities in reinsurance and attractive short-tail lines, while maintaining discipline in risk selection.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
