Release Date: February 26, 2025
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 a solid growth in book value per share of almost 20% for 2024, with dividends included, the growth was over 24%.
- The company achieved a record core operating income of $40.9 million in Q4 and $144.8 million for the full year 2024.
- IGIC maintained a strong combined ratio of 77.8% for Q4 and 79.9% for the full year, reflecting strong performance.
- The company has doubled its underwriting portfolio size and entered new markets, including the United States, enhancing its global presence.
- IGIC has a strong balance sheet with total assets increasing by almost 11% to over $2 billion, and a 14% growth in its investments and cash portfolio.
Negative Points
- IGIC faced increased competition in many markets, which pressured rates and limited top-line growth to just under 2% for the full year 2024.
- The long tail segment of IGIC's portfolio experienced contraction, with underwriting income down over 30% for the full year.
- The company noted a challenging start to 2025 with elevated loss activity, particularly in short tail and reinsurance lines.
- IGIC's aviation book contracted by more than 25% due to several quarters of rate reductions.
- The company experienced a mark-to-market loss of about $22 million on its bond portfolio during Q4, impacting total equity.
Q & A Highlights
Q: How does IGI balance the competitive environment with maintaining a strong combined ratio, and are there opportunities for growth despite current rate pressures?
A: Waleed Jabsheh, President and CEO, emphasized that IGI's approach is to maintain discipline and focus on bottom-line profitability. The company is constantly seeking new opportunities but remains cautious about its risk appetite. Jabsheh highlighted that IGI prefers generating an 80% combined ratio on a $700 million book rather than a 90% ratio on a billion-dollar book, prioritizing profitability over sheer growth.
Q: Given the recent California wildfires, how does IGI view its exposure and potential changes in reinsurance?
A: Waleed Jabsheh noted that while it's too early to predict changes in reinsurance, IGI expects the losses from the California wildfires to be manageable. The company will look for opportunities in markets where pricing improves due to dislocation, including California, if conditions become more favorable.
Q: How does IGI's use of Managing General Agents (MGAs) change with market conditions?
A: Jabsheh explained that IGI is cautious with MGAs, ensuring they add value and do not compete directly with IGI's existing business. The company supports MGAs that offer differentiated business and have the necessary distribution and infrastructure, regardless of market conditions.
Q: What factors contribute to IGI's core loss ratio being lower than peers, and what trends are observed in the long tail book?
A: Jabsheh attributed IGI's strong core loss ratio to its disciplined approach and focus on bottom-line profitability. The company has been selective, contracting in areas like aviation where the market is inadequate, while expanding in more attractive segments like treaty reinsurance.
Q: Can you comment on the pricing environment outside the US, particularly in Europe, the Middle East, and Asia?
A: Jabsheh stated that while each region has its dynamics, the overall trend is increased competition. However, IGI sees opportunities in construction and engineering, which remain strong. The focus is on rate adequacy rather than rate movements, and IGI is prepared to work harder to find profitable business.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
