International General Insurance Holdings Ltd. Q1 FY2025 earnings call

• Wasef noted that in Q1 2025, despite elevated loss environment and macroeconomic uncertainty, the combined ratio of 94.4% showed the value of diversification strategy. Paid a special dividend of $0.85 and returned $43.5 million to shareholders. - Waleed mentioned the industry had an eventful start to the year with elevated loss activity, economic and financial market volatility. GWP grew by over 13% to over $206 million, driven by reinsurance segment growth. Net earned premium was just under $113 million. Combined ratio of 94.4% was impacted by losses, reinstatement premiums, and currency. Core operating income was $19.5 million or $0.42 per share. G&A expense ratio showed marginal improvement to 19.1%. Total assets increased by almost 3% to $2.1 billion. - Comments on segment results: Short-tail gross premiums up 2%, earned premium down 5.3%; reinsurance segment had strong growth; long-tail segment had slight premium growth but underwriting loss.

Short-tail segment: Gross premiums were up 2% in Q1. Earned premium was down 5.3% compared to the same quarter last year, driven largely by higher losses. Underwriting income was also down. Reinsurance segment: GWP grew by over 13% in Q1, primarily driven by growth in the reinsurance segment taking advantage of a healthy positive rating environment. Long-tail segment: Premiums were up slightly in Q1, but the segment has seen several consecutive quarters of top line contraction. Recorded an underwriting loss of $7.5 million versus an underwriting profit of around $10 million in Q1 last year, driven by higher loss activity, FX impact, and reinstatement premiums.

• Expect G&A expense ratio in the region of 18% to 19% as a more reasonable go-forward rate. - Reinsurance markets continue to face pricing pressure, expected to be off by around 15 to 20 points by the end of the year from the 10 to 15 points at the start of 2025. - U.S. is the biggest growth area and expected to continue, but with caution due to competition and cat exposed risk. Europe, Middle East, North Africa, and Asia-Pac regions also remain growth areas.

• Macro-economic uncertainty. - Elevated loss environment. - Foreign exchange volatility, especially impact on the long-tail segment which is largely transacted in pound sterling. - Intense competition in reinsurance markets with carriers pushing hard to build market share. - Underperformance of certain parts of the long-tail PI portfolio.

Q: Nick Iacoviello asked about a particular area of the professional indemnity portfolio, whether it was a similar area to remediation efforts in Q3 2024 and about underlying classes.

A: Waleed Jabsheh said it was a similar area, not systemic, and they are reviewing it closely and may shut it down.

Q: Michael Phillips asked about combined ratio deterioration, FX impact, current accident year loss ratio by segment, tariffs on marine business, reinsurance rate environment, and aviation business outlook.

A: On combined ratio, FX adjustment makes it around 6-7 points deterioration. Tariffs not seen to have significant impact on marine business. Reinsurance still sees rating adequacy in many areas but pricing pressure continues. Aviation business is still challenging but performing well with a cut back book and sticking to comfortable business.