International General Insurance(US:IGIC)2025-05-07 14:02Financial Data and Key Metrics Changes - The company reported a combined ratio of 94.4%, indicating a deterioration compared to previous quarters due to elevated loss activity and macroeconomic uncertainties [6][19]. - 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, primarily due to lower underwriting income and higher reinstatement premiums [19][30]. - Core operating income decreased to $19.5 million or $0.42 per share from $40 million or $0.89 per share year-over-year [20]. Business Line Data and Key Metrics Changes - Gross written premiums (GWP) increased by over 13% to just over $206 million, driven mainly by growth in the reinsurance segment [16]. - The short tail segment saw gross premiums rise by 2%, but earned premiums fell by 5.3% due to reinstatement premiums impacting reinsurance purchases [23][24]. - The long tail segment experienced slight premium growth but recorded an underwriting loss of $7.5 million compared to a profit of $10 million in Q1 2024, attributed to higher loss activity and FX impacts [28]. Market Data and Key Metrics Changes - The reinsurance treaty segment showed significant top-line growth of almost 44%, driven by new business in specialty treaty lines [25]. - The company noted heightened competitive pressure in various markets, particularly in the long tail segment, where net rates remain adequate despite several quarters of decline [32][33]. - The U.S. market was highlighted as a key growth area, with expectations for continued opportunities despite increased competition [36][38]. Company Strategy and Development Direction - The company emphasized its diversification strategy as a key strength in navigating market volatility and uncertainty [6][8]. - Management expressed confidence in the ability to find new business opportunities while maintaining a disciplined approach to underwriting [11][31]. - The focus remains on long-term growth rather than short-term results, with a commitment to protecting the portfolio and servicing clients effectively [10][11]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by elevated loss activity and geopolitical tensions but remained optimistic about the company's resilience and strategic positioning [10][14]. - The outlook for the remainder of the year includes a cautious approach to new business in competitive markets, particularly in the U.S. and Europe [36][38]. - Management reiterated the importance of maintaining adequate rates and being selective in underwriting to ensure profitability [62][66]. Other Important Information - The company paid a special dividend of $0.85, returning a total of $43.5 million to shareholders during the quarter [7][30]. - Total assets increased by almost 3% to $2.1 billion, with total equity just over $650 million at the end of the quarter [29][30]. 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 reported deterioration was influenced by currency impacts, with a more accurate comparison showing a 6 to 7 point deterioration when adjusted for FX [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, but their book has shown solid profitability despite a reduced portfolio [68].