International General Insurance(IGIC) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a combined ratio of 94.4%, indicating a deterioration primarily due to elevated loss activity and reinstatement premiums [7][19][20] - Net income for Q1 2025 was $27.3 million or $0.59 per share, down from $37.9 million or $0.84 per share in Q1 2024 [20][21] - Core operating income decreased to $19.5 million or $0.42 per share compared to $40 million or $0.89 per share in the same quarter last year [21] - Total assets increased by almost 3% to $2.1 billion, with total investments in cash at $1.3 billion [30] Business Line Data and Key Metrics Changes - Gross written premiums (GWP) grew by over 13% to just over $206 million, driven mainly by the reinsurance segment [18] - The short tail segment saw gross premiums up 2% but earned premiums down 5.3% due to reinstatement premiums [24] - The reinsurance treaty segment experienced a top line growth of almost 44%, primarily from new business in specialty treaty lines [26] - The long tail segment faced challenges with premiums up slightly but recorded an underwriting loss of $7.5 million compared to a profit of $10 million in Q1 2024 [29] Market Data and Key Metrics Changes - The company noted heightened foreign exchange volatility impacting financial results, particularly with the U.S. Dollar weakening against major currencies [17] - The U.S. market remains the biggest growth area, with expectations for continued opportunities despite increased competition [38][39] Company Strategy and Development Direction - The company emphasizes a long-term perspective, focusing on stability and resilience amid market volatility [12][13] - A diversified strategy is highlighted as a key strength, allowing the company to navigate market cycles effectively [10][32] - The company is committed to maintaining discipline in underwriting and risk selection, particularly in challenging segments like long tail [28][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the elevated loss environment and macroeconomic uncertainties but expressed confidence in the company's ability to manage these challenges [7][12] - The outlook for the remainder of the year includes a cautious approach to new business, particularly in competitive markets [36][38] - Management noted that while rates are declining, many areas still exhibit rate adequacy, allowing for continued business writing [62] Other Important Information - The company paid a special dividend of $0.85, returning a total of $43.5 million to shareholders during the quarter [8][31] - The G&A expense ratio showed marginal improvement to 19.1% from 19.5% year-over-year [24] Q&A Session Summary Question: Inquiry about the professional indemnity portfolio - Management confirmed that the area under review is similar to one previously remediated, indicating ongoing performance issues but no systemic problems [46][47] Question: Clarification on combined ratio deterioration - Management explained that the combined ratio deterioration was influenced by currency impacts, with a more accurate comparison showing a 6 to 7 point deterioration when adjusted for currency [51][53] Question: Impact of tariffs on marine and port business - Management stated that there has been no significant impact from tariffs on their marine business, although cargo values might be affected [60] Question: Outlook for aviation market - Management indicated that the aviation market remains challenging, with a reduced book size but solid profitability in recent quarters [68]