International General Insurance(IGIC) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported net income of $33.5 million for Q3 2025 and $94.9 million for the first nine months, resulting in an annualized return on average equity of 20% for Q3 and 19% for the first nine months [5][24] - Book value per share grew by almost 10% to $16.23 in the first nine months of 2025, with total equity reaching just under $690 million [6][24] - The combined ratio for Q3 was 76.5%, significantly improved from 86% in Q3 of the previous year, while the combined ratio for the first nine months was just over 87% compared to 80.5% for the same period in 2024 [12][13] Business Line Data and Key Metrics Changes - Gross premiums written in Q3 were just over $131 million, a decrease of about 5%, while for the first nine months, gross premiums were up marginally to just over $525 million [10][11] - The short-tail segment saw gross premiums up 2% in Q3 but down 2.7% for the first nine months, with net premiums earned down about 10.4% and 8.1% for Q3 and the first nine months, respectively [17] - The reinsurance segment generated gross premiums of just under $98 million for the first nine months, reflecting almost 25% growth compared to the same period in 2024, with underwriting income up 35% for Q3 [19][20] Market Data and Key Metrics Changes - The company noted increasing competitive pressures across the market, particularly in the long-tail segment, which has seen declining rates and margins [20][32] - The U.S. market remains a significant focus, with opportunities for new business in specialty treaty and short-tail portfolios despite competitive pressures [33][34] - The company is optimistic about the potential for improvement in the long-tail segment by 2026 and 2027, although current conditions remain challenging [32][34] Company Strategy and Development Direction - The company emphasizes disciplined underwriting and capital management to generate high-quality returns, focusing on areas with the best risk-adjusted returns [5][25] - A new $5 million common share repurchase authorization was approved, indicating a commitment to returning value to shareholders [9][23] - The company is expanding its presence in specialty treaty business and enhancing distribution capabilities to drive additional margin [30][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the elevated level of competitive pressure but characterized it as orderly and disciplined, with confidence in finding growth opportunities [25][27] - The recent S&P upgrade to an A rating is expected to open new business opportunities and enhance the company's market position [9][27] - Management remains focused on intelligent risk selection and will not sacrifice profitability for top-line growth, emphasizing the importance of cycle management [34][35] Other Important Information - The company returned a total of about $98 million to shareholders in share repurchases and dividends in the first nine months of 2025 [24] - Total assets increased by just over 4% to $2.12 billion, with total investments and cash at $1.32 billion [22] Q&A Session Summary Question: Comments on market conditions and long-tail business - Management indicated that while competitive pressures are increasing, they are not currently considering walking away from other accounts outside of the specific non-renewed account mentioned [38][39] Question: Outlook for the reinsurance segment - Management noted that while Q1 has historically been strong, they anticipate more pressure on the top line for the reinsurance book as the market generates excess capital [40][41] Question: Perspectives on large account property in the U.S. - Management does not believe that large account property has bottomed out and expects continued pressure in that area [44]