Release Date: November 06, 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) achieved a combined ratio of 80.5% and net income of over $100 million for the first nine months of 2024, indicating strong profitability.
- The company reported an annualized return on average shareholders' equity of 23.5%, showcasing effective capital management.
- IGIC has demonstrated significant growth since becoming a public company, with a compounded annual growth in book value per share plus dividends of 12.3% since 2020.
- The company has expanded its global footprint, opening new offices in Malta, Bermuda, and Oslo, and entering new territories, notably the US.
- IGIC's reinsurance segment remains a bright spot, with positive rate movement and expectations for continued growth.
Negative Points
- Gross premiums were down 8% in Q3 across all three reporting segments, reflecting challenges in maintaining top-line growth.
- The long tail segment continues to be challenging, with a 13% contraction in Q3 and reserve strengthening required due to development in the professional indemnity portfolio.
- Currency movements negatively impacted the financial results, contributing to unfavorable reserve development.
- The aviation book has seen contraction, and upstream energy is becoming more challenging, indicating pressure in specific lines of business.
- Competitive pressures persist in many markets, with capacity still plentiful, leading to challenges in maintaining pricing power.
Q & A Highlights
Q: The gross written premiums for long tail lines have been down for a while. Are you viewing the pullback in short tail and reinsurance as temporary, and do you expect overall premium growth in 2025?
A: Waleed Jabsheh, President and CEO: The decrease in Q3 premiums is not a concern and not indicative of a trend. We expect continued growth and profitability in short tail and reinsurance lines. The market remains conducive for healthy underwriting, and we anticipate growth in 2025.
Q: Is there lumpiness in the reinsurance unit's revenues due to timing of contract renewals? Was there any timing issue this quarter?
A: Waleed Jabsheh, President and CEO: The first half of the year is the biggest period for reinsurance, with adjustments coming in the second half. Q3 can be tricky, but reinsurance remains the brightest spot in our portfolio, and we aim to continue growing this segment.
Q: Can you discuss the profitability and future growth plans for the US business, which has over $100 million in premiums?
A: Waleed Jabsheh, President and CEO: The US book has been extremely profitable and has improved over the years. We plan to continue growing, focusing on short tail lines, and exploring direct approaches from the US or Bermuda. The US market remains a significant growth focus.
Q: The net investment income level for Q3 was similar to Q2. Should we expect growth in investment income over the next few quarters?
A: Waleed Jabsheh, President and CEO: While yields are slightly increasing, significant growth in investment income is not expected. We have likely reached a peak in the interest rate environment, and any growth will be gradual.
Q: How is the company managing competitive pressures in the US market, particularly in E&S lines?
A: Waleed Jabsheh, President and CEO: The US market is becoming more competitive, with domestic markets pushing for larger shares. We are exploring ways to tackle business directly from the US or Bermuda to maintain growth and profitability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
