IGI combined ratio takes hit due to treaty book attritional losses

International General Insurance Holdings (IGI) reported a deteriorated combined ratio for 2019, driven by higher year-over-year attritional loss activity in its treaty book written on a net basis.

Its gross written premiums rose while its profit fell slightly. In order to accelerate growth, the company intends to pursue a listing on the Nasdaq Capital Market through a business combination with Tiberius Acquisition Corporation, which is expected to close on March 17.

The company’s gross written premiums were $349.2 million for the year ended December 31, 2019, compared to $301.6 million for the year ended December 31, 2018. The company said the increase in gross written premiums was the result of a number of factors including new business generated, improved renewal pricing, and further refinement of its existing portfolio, all resulting from hardening markets and superior underwriting.

IGI reported profit after tax of $23.5 million for the year ended December 31, 2019, compared to $25.5 million for the year ended December 31, 2018. The combined ratio for the year ended December 31, 2019 was 94.1 percent, compared to 88.7 percent for the year ended December 31, 2018.

The company said the increase in the combined ratio was driven by higher year-over-year attritional loss activity in its treaty book written on a net basis.

“Additionally, a higher proportion of attritional gross losses across the downstream energy and engineering books were below coverage thresholds for our reinsurance program during 2019 and there was a smaller benefit from prior year favorable development across the entire short-tail portfolio,” it said. “Catastrophe loss events in 2019 were concentrated in the second half of the year and consisted of, among others, the Petronas explosion, Hurricane Dorian and Typhoons Hagibis and Faxai.”

IGI founder, vice chairman and CEO Wasef Jabsheh, said: “2019 was a strong year of growth for our company. Our results reflect IGI’s ability to quickly take advantage of hardening market conditions, increasing our net written premiums by 24 percent year-over-year. IGI experienced rate increases of approximately 13 percent year-over-year across our book of business in 2019. We are experiencing continued momentum in rates, and in the fourth quarter of 2019, rate increases were above 20 percent on average. Early indications in 2020 suggest pricing momentum is continuing to accelerate. We are seeing notable opportunities in most non-US long-tail specialty lines, downstream energy risks, and specialty lines across the MENA region where there is increasing dislocation and where IGI is particularly well-positioned with a strong presence on the ground. We are optimistic that these market conditions will continue to provide us with more opportunities to leverage our market position to generate continued profitable growth.

“As part of our strategy to accelerate growth, we made the decision to pursue a listing on the Nasdaq Capital Market through a business combination with Tiberius Acquisition Corporation, a US-based special purpose acquisition company. This transaction, combined with our demonstrated track record of generating consistently strong value for our shareholders, is precisely timed to allow us to deploy new capital to take advantage of rapidly improving rates and conditions across our markets. Our specialty insurance expertise in key lines and differentiated geographic presence in the right markets uniquely positions IGI to capitalise on the opportunities ahead of us. We anticipate that the transaction will close on March 17, 2020.”