IGI hacks 17.5pts off Q2 CoR, grows into short-tail & reinsurance

Specialist commercial re/insurer  International General Insurance Holdings (IGI) nearly doubled its second quarter net underwriting profit to $40.4 million, hacking an eye-opening 17.5 percentage points (pps) from its combined ratio to 74.8%.

The group’s preferred profit measure of core operating income more than tripled to $29.4 million.

“We continue to see attractive rate increases and favourable market conditions across a number of business lines and territories providing excellent opportunities to further grow our portfolio,” CEO Wasef Jabsheh said.

With caveat for rising uncertainties, Jabsheh vows to “continue to execute on our ‘underwriting first’ strategy to grow in the lines and territories where we see the most attractive returns.”

For the latest period, that has meant short-tail and the baby segment of reinsurance at the expense of longer-tail lines where IGI has nonetheless worked to trim loss ratios.

For the group as a whole, gross written premiums rose 6.2% to $176.4 million in the second quarter to bring the H1 tally to $304.4 million, a 14.1% annual gain. Earned in premiums after reinsurance cede grew at twice the pace.

But premium in the long-tail lines, some 34% of the group’s business, were down 3.5% year on year. Net underwriting profits in the segment more than doubled to $20.2 million. Management gave credit to a lower level of net claims and claim adjustment expenses in Q2 2022 including more favourable prior year reserve developments in all lines except for marine liability and inherent defects insurance plus the impact of FX on reserves.

Gross written premium in short-tail lines, some 59% of the group business, rose 14.5% from the prior year period. Underwriting profits rose 87% y/y with management chiefly crediting the top line gain.

The smaller reinsurance segment took the larger 18% annual increase in second quarter gross written premium.

On the claims side, management could trace 5.7 pps of the loss ratio improvement to the hefty $5.5 million favourable prior year developments versus net reserve building seen in Q2 2021.

IGI has been leaning into developed markets including the US, the UK and Europe as IGI rounds out its emerging market origins with global player ambitions.

Speaking to Intelligent Insurer at end-May, company president Waleed Jabsheh (pictured) had bragged of 300% business growth in the US in Q1 with expectation that the US book would continue to grow at substantial rates while an infant European platform started to take off.

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.