IGI steps up to hard market harvest after proving patience in 2022

Specialist commercial re/insurer  International General Insurance Holdings (IGI) says the time has come: the group has proven its flexible long-game underwriting approach by holding back from markets late 2022 before exploding back onto the scene Q1 after reinsurance costs had cemented select hard markets.

“We go after the business in the geographies and the lines of business we feel are best and the minute they turn back we are happy to find opportunities elsewhere,” company president Waleed Jabsheh has told Intelligent Insurer. He can be geography agnostic, business line agnostic, EM vs DM agnostic. But he’s a profit believer and, in Q1, author of a major growth story once the numbers added up.

“The dislocation that we saw was a lot more pronounced than we had expected,” Jabsheh said of his company’s pivot from Q4 premium erosion to a 38% annual gain in Q1. “We knew that good conditions were ahead of us, but we never expected we would grow this way.”

IGI had to wait for the first quarter of the new year for the pay off, only once rivals had begun to pay a price for not having pre-empted the 1/1 spike in reinsurance costs, then remain nimble in selection, he claims.

Vide the wide split on Q1 premium growth. Gross written premium growth of 37.5% year on year for the group masks a seemingly opportunistic mix of 188% growth in reinsurance, 35% growth in short-tail lines and a 6% contraction in long-tail.

Likewise by geography. The US has gone from just under 10% of the book a year ago following hyperbolic growth just after platform launch to upwards of 15% of the book in many lines today. Europe, also with a fresh platform, has been “a tougher nut to crack.”

“And we see a lot of runway for the rest of the year,” Jabsheh said. “We don’t expect market conditions to be any different than they were in Q1, so we are very optimistic about the next 9M remainder of the year and into 2024.”

US commercial remains high on Jabsheh’s current growth targets amid favourable supply-demand imbalances. “Property, energy, reinsurance, contingency – they are all heading in the right direction. That has been reflected in the growth in the numbers.”

Reinsurance, although taken with extra doses of caution on the cat side, will be a big part of the mix. Although traditionally a direct and facultative reinsurance writer, treaty could become “meaningfully larger” in the book, possibly doubling its total presence to 10% from a historic 5% weighting. “There is very big momentum in reinsurance - rate increases, narrow covers, tighter restrictions – all working in our favour.”

Hopes for that move into treaty reinsurance, if not already visible in the 188% reinsurance GWP growth in Q1, can be found in the group’s new office in Bermuda. IGI has employed two, sought out means to double that figure and is eyeing treaty reinsurance lines plus whatever “other opportunities we find here on the island.”

Q1’s 38% year on year GWP growth was a powerful acceleration from the muted 4.6% GWP growth IGI had reported in Q3 2022 and the 4.2% GWP erosion IGI had suffered to end the year. Both quarters had seen annual declines in long-tail primary lines, with short-tail and reinsurance segment GWP gains

“We held back in the second half of last year,” Jabsheh says now of a period when primary lines looked pretty hotly competitive for a market that supposedly knew the reinsurance hammer was coming down.

“The market was unsure what was coming,” Jabsheh said. “We felt we had a feel for what was coming and prepared ahead of time.” Watching deals escape on account of “silly behaviour” often proved “frustrating,” he admits. “Everybody knew what was coming, but very few people chose to pre-empt the situation.”

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