International General Insurance(US:IGIC)2022-08-19 16:08Financial Data and Key Metrics Changes - The company reported a six-month combined ratio of 33.5% and a core operating return on average shareholders' equity of 26.8%, indicating strong performance and shareholder value creation [7] - The six-month combined ratio for the second quarter was 73.5%, compared to 72.2% in the first quarter, reflecting solid profitable growth [11] - The impact of foreign currency exchange movements was a negative $9.2 million for the second quarter and negative $12.7 million for the first six months [12] Business Line Data and Key Metrics Changes - The company experienced solid profitable growth across all areas of the business, with a focus on identifying new diversified opportunities [11] - The cumulative net increases for the first six months of 2022 were 11.3% in long tail lines and 4.3% in short tail lines, with moderate improvement in the reinsurance portfolio [14] Market Data and Key Metrics Changes - The company noted that the US and Europe are both growth markets, with gross premiums more than doubling in the US and close to $24 million written in Europe for the first half [15] - The company is seeing more opportunities in short tail lines than long tail lines, with a competitive landscape emerging in the UK [14] Company Strategy and Development Direction - The company is focused on expanding its underwriting portfolio and footprint into new lines of business and territories while maintaining quality [8] - The company plans to acquire Energy Insurance Oslo to expand its existing business and leverage relationships for further growth opportunities in Scandinavia [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth despite challenges from elevated inflationary pressures and rising interest rates [9] - The company is taking a conservative view on pricing and has adjusted its asset allocation to higher-rated bonds and increased cash and short-term deposits [13] Other Important Information - The company has initiated a share repurchase program, having repurchased over 335,000 common shares at an average price of $7.51 [18] - A new dividend policy was announced, reflecting the company's commitment to generating shareholder value [18] Q&A Session Summary Question: Was there a benefit or one-time item affecting the negative tax rate? - The negative tax rate is due to a deferred tax asset for the Malta operation, which recorded a loss in the first half [22] Question: Can you elaborate on reserve releases in the quarter? - Reserve releases were predominantly on long tail lines, with most reserves lying in older accident years [23] Question: What will be the focus of the Bermuda subsidiary's reinsurance treaty business? - Initially, the focus will be on property, with plans to grow based on opportunities [24] Question: Why was the rate increase in short tail lines lower than other companies? - The rate increase depends on the portfolio's composition and territorial weighting, with US property averaging just under 20% increases [27]