IGI eyes reinsurance being 25% of GWP but not chasing top line

Reinsurance is a growth focus area for International General Insurance (IGI), with its chief executive officer targeting its becoming 25 percent of its book—but only provided market conditions remain favourable, and discipline is maintained.

“I would love to get reinsurance to 20 to 25 percent of our book—but only if we can do it properly,” Waleed Jabsheh, CEO of IGI, told Monte Carlo Today. Currently, reinsurance accounts for about 10 percent of its book, with the company having gradually expanded from 5 percent two years ago. 

“We are 90 percent facultative. For us, the challenges are not on the reinsurance side. Our challenges are more on the facultative side, where the market dynamics are different from reinsurance,” he added.

Jabsheh said long tail lines are “under pressure”, while short tail lines are a “mixed bag”. The bright spots for IGI, he said, are construction, contingency, marine lines. “Not hull, but other marine lines of business,” he clarified.

Jabsheh admitted that compared with last year, “growth is more muted”. In the first six months of this year, the business grew by 3.5 to 4 percent. In the previous five years, it doubled in size.

“But we operate in a cyclical environment,” he rationalised. “Even if you shrink in size, the aim is to create value for business and our shareholders—not to write as much business as you can even if it’s not profitable.

“The environment by and large is still conducive to generating the returns we’ve seen in recent years,” he stated. But he acknowledged that the market is not as favourable as it was during the high-growth years between 2018 and 2022. “It’s a mixed bag now,” Jabsheh said.

IGI’s strategy is simple: “Stick to the business that makes sense. Sometimes you have to walk away when the environment becomes more competitive,” he said.

“We’re bottom line-focused, and we’ll walk away from the business when it doesn’t make sense,” Jabsheh said. “But as long as the business is profitable, we will take as much advantage of it as we possibly can.”

“If risk keeps you up at night, you shouldn’t be in this business.”

He believes the market for reinsurance is stable. There is ample capital, but it’s not “new” capital, which is typically associated with more aggressive market softening. “There is more hunger, but it’s a disciplined capital,” he said. 

While Jabsheh doesn’t expect any “watershed moments” in reinsurance up to the 1/1 renewals, he emphasised that the market must be prepared to tackle any changes that may arise. “A lot can happen between now and the end of the year,” he remarked.

“We operate in the business of taking risks. If risk keeps you up at night, you shouldn’t be in this business to begin with,” he said. 

For IGI, the ability to sleep well at night comes from knowing its risk appetite and tolerances and adhering to them rigorously.

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