IGI hones developed market hopes; wields tools for major US & EU growth

Specialist commercial re/insurer  International General Insurance Holdings (IGI) believes it has the tools in place to leverage the market’s rate peak for cementing its foundations in core markets, company president Waleed Jabsheh (pictured) has told Intelligent Insurer.

“Rate adequacy at this point in time is healthy, and in most lines of business, more than adequate,” Jabsheh said of markets heading into an apparent peak of a multi-year hardening. “So as long as the environment stays the way it is, the opportunities for growth will be there.”

It’s a forecast largely proven in a high-growth first quarter. Gross written premium of $128 million was up 27.3% year on year with management crediting new business across “all segments and virtually all lines” on equally universal, albeit quite uneven, rate increases. That earned title as “an exceptional quarter” with all lines profitable save one, Jabsheh claimed.

Growth ambitions sound increasingly focused on the US, UK and European markets as IGI rounds out its emerging market origins with global player ambitions.

IGI built out a team in the US to deliver neighbourhood 300% business growth in Q1 and is looking to an infant platform in Europe to build new inroads. Efforts have put the North American new business book at nearly 10% of the IGI total and the European book to 12.3%, both within striking distance of the 14% still originated in the group’s initial home markets of the Middle East.

“We expect our US book will continue to grow,” Jabsheh said of the outlook. Q1’s quadrupling of new business follows just such intentions, coming “not as a reflection of our appetite to just write more, but a reflection of the growth in our team and our resources.”

New capacities likewise boosted the Q1 year on year comparison of new business in Europe following launch in March 2021 of a new subsidiary and platform in Malta. That unit has since gone “fully operational” and Jabsheh is guiding to expect “further growth in Europe.”

Add up the over 27% of its business written in the UK, over 12% written in Europe and North America’s surge to nearly 10% of total book, and IGI is hitting the 50-50 mark in diversification between developed and emerging markets. Of the remaining international units, Jabsheh claimed “most of our classes and segments showed healthy growth.”

New short-tail lines have also figured into Jabsheh’s hopes for growth and increased diversification, including a contingency line launched in March 2021 and marine cargo in 2020.

The selective slowing of the long-running hard market isn’t likely to derail the growth targeting nor would the varied pinch from inflation alter strategy, Jabsheh said.

To wit, IGI didn’t exactly lean into the runaway side of the rate story in Q1. IGI marked Q1 GWP growth in long-tail lines at 18% where average rate was up about 15%, well below the nearly 30% GWP increase IGI took in in short-tail lines delivering low-single digit rate gain.

“In terms of rate momentum, the pace of rate improvement is slowing down” on an “inevitable” increase in competition following four consecutive years of rate gain,” Jabsheh said. But eyes remain on rate adequacy, the rosier picture given how “any small rate increase you get now is on top of four years of already very healthy rate increases.”

Inflation may have had “an impact on some claims,” but nothing that rate gains haven’t been “more than commensurate to cover.”

“I think the book of business we have and the nature of our claims portfolio means it is not as big of a concern as it may be for some of the larger companies,” Jabsheh said. “At this point in time – we have seen no indication that we should be looking to modify our strategy.”

Q1’s trading statement certainly showed no reason to be concerned over claims. IGI took an eye-opening 12.4 points from its combined ratio to 72.2% on an outright drop in claims both for current and prior periods. Those improvements are considered “exceptional” and stand as no signal of trend away from longer-term averages near 90%, officials have said.