International General Insurance Holdings (IGIC) Q1 2025 Earnings Call May 07, 2025 09:00 AM ET Speaker0 Please note this event is being recorded. I would now like to turn the conference over to Robin Sidders, Head of Investor Relations. Please go ahead. Speaker1 Thanks, Scott, and good morning, and welcome to today's conference call. Today, we'll be discussing our first quarter twenty twenty five results. We issued our press release last night, which you would have seen after the market closed. If you'd lik ...

Core Viewpoint - International General Insurance Holdings Ltd. (IGIC) reported quarterly earnings of $0.42 per share, missing the Zacks Consensus Estimate of $0.47 per share, and down from $0.89 per share a year ago, indicating a -10.64% earnings surprise [1][2] Financial Performance - The company posted revenues of $129 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 4.80%, and down from $130.1 million year-over-year [2] - Over the last four quarters, IGIC has surpassed consensus EPS estimates only once [2] Stock Performance - IGIC shares have increased approximately 9.9% since the beginning of the year, contrasting with the S&P 500's decline of -3.9% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.66 on revenues of $133.8 million, and for the current fiscal year, it is $2.84 on revenues of $546.1 million [7] - The estimate revisions trend for IGIC is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Insurance - Multi line industry, to which IGIC belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

IGI Investor Presentation First Quarter 2025 May 2025 Forward Looking Statements This presentation release contains "forward-looking statements" within the meaning of the "safe harbour" provisions of the Private Securities Litigation Reform Act of 1995. The expectations, estimates, and projections of the business of IGI may differ from its actual results and, consequently, you should not rely on forward-looking statements as predictions of future events. Words such as "ability," "aim," "impact," "seek," "st ...

Industry Competition and Market Conditions - The insurance and reinsurance industry is highly competitive, leading to potential reductions in premium rates and increased customer acquisition costs[34] - Market conditions may cause reinsurance to become more costly or unavailable, impacting the level of underwriting commitments[47] - The cyclicality of the insurance and reinsurance industry can lead to significant fluctuations in premium rates and operating results[41] - Consolidation in the insurance and reinsurance industry may increase competition, resulting in fewer submissions and less favorable policy terms[39] Catastrophic Events and Climate Change - Claims arising from catastrophic events are unpredictable and could severely impact financial results[24] - The company is exposed to risks associated with climate change, which may increase the frequency and severity of catastrophic events[26] - The frequency and severity of catastrophe events may increase due to changing climate conditions, impacting the company's ability to predict and model such events[97] - Climate change may lead to increased frequency and severity of weather-related catastrophes, potentially resulting in material catastrophe-related losses[100] Financial and Operational Risks - Insufficient loss reserves could negatively impact the company's financial results[26] - The availability of reinsurance may be limited, affecting the company's risk management strategies[47] - Changes in macroeconomic conditions, such as a prolonged recession, could adversely affect the company's business[30] - The company faces risks from unpredictable claims arising from natural catastrophes, with significant claims reported from events such as Hurricane Ian and the 2022 Australia floods, totaling $11.5 million in 2024[86] Regulatory and Compliance Challenges - The company is subject to extensive regulatory supervision across multiple jurisdictions, including the US, UK, and Bermuda, which may impact its business operations[54] - Compliance with legal and regulatory requirements may result in significant expenses, negatively impacting profitability[49] - Changes in laws or regulations could materially affect the company's business operations and financial condition[51] - The company may face challenges in maintaining necessary licenses and approvals in various jurisdictions, potentially at significant cost[50] Investment and Credit Risks - The company’s investment portfolio may be adversely affected by global climate change regulations, as there is a consensus that a significant percentage of existing fossil fuel reserves must remain unconsumed to meet international commitments[101] - The company is exposed to credit risk, particularly during economic downturns, which could lead to impairments and defaults on investments[157] - The company is subject to counterparty risk related to its investments, particularly in corporate bonds, which could lead to significant losses due to defaults[161] - The company selectively engages with reinsurers that have strong financial ratings, but market conditions can change their financial stability[205] Broker and Reinsurance Relationships - The company relies on brokers for business sourcing, and deteriorating relationships could adversely affect operations[26] - The top 5 international brokers generated 64% of the gross written premiums for the year ended December 31, 2024, and 63% for the year ended December 31, 2023[132] - The company's reinsurance program ceded 30% of gross written premiums (GWP) for the year ended December 31, 2024, and 28% for the year ended December 31, 2023[140] - The company’s reliance on ceding companies for reinsurance may introduce greater uncertainty in reserve estimations, impacting financial performance[122] Economic and Political Risks - Political initiatives to restrict free trade, such as Brexit, could adversely affect the insurance and reinsurance industry and the company's business[62] - Ongoing global economic uncertainties may materially and adversely affect the company's results of operations and financial position[65] - The long-term impact of the Russian invasion of Ukraine and subsequent sanctions remains uncertain, potentially affecting the company's business operations[130] Operational and Systemic Risks - The company relies on the ability to process a high volume of transactions daily, and any failure in operational systems could disrupt business operations[183] - The company has established a strong delegated authority risk management process, but there is no assurance that safeguards will fully protect against losses[136] - The company’s operations are vulnerable to data security risks, which could lead to significant financial losses and reputational damage[186] Future Capital and Liquidity Considerations - Regulatory capital requirements are subject to change and may become more stringent, impacting the company's ability to raise capital[210] - Failure to meet regulatory capital requirements could lead to intervention by regulators, potentially requiring the company to raise additional funds[211] - The company's future capital requirements depend on its ability to write new business and manage investments effectively[214] - The company may face liquidity shortfalls following large losses due to the timing of claims settlements and reinsurance recoveries[144]

Company Overview - International General Insurance Holdings Ltd. (IGIC) shares increased by 5.4% to close at $27.01, following a significant trading volume compared to normal sessions, despite a 5.6% loss over the past four weeks [1] - The board approved an extraordinary cash dividend, indicating strong operational expertise and a focus on expanding in US and European markets while diversifying to accelerate growth [2] Financial Performance - IGIC aims to reduce volatility and catastrophe exposure through prudent reinsurance practices and maintains zero financial leverage [3] - The company is expected to report quarterly earnings of $0.58 per share, reflecting a year-over-year decline of 34.8%, while revenues are projected to be $135.5 million, an increase of 4.2% from the previous year [3] Market Sentiment - Recent trends in earnings estimate revisions show a 9.4% downward adjustment in the consensus EPS estimate over the last 30 days, which typically does not correlate with price appreciation [5] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [5] Industry Comparison - IGIC operates within the Zacks Insurance - Multi line industry, where another company, Old Republic International (ORI), has shown a slight increase of 0.2% to $37.77, with a 3% return over the past month [5] - ORI's consensus EPS estimate remains unchanged at $0.73, representing a 9% increase from the previous year, and it holds a Zacks Rank of 2 (Buy) [6]

Financial Data and Key Metrics Changes - The company reported a growth in book value per share of almost 20% and over 24% when including dividends [11] - The combined ratio for Q4 was 77.8% and 79.9% for the full year, indicating strong performance [19][29] - Record net income of $135.2 million for the full year, up almost 15% from the prior year [35] - Core operating income reached a record $40.9 million in Q4 and $144.8 million for the full year [36][40] - Total assets increased by almost 11% to over $2 billion [37] - Total equity increased by 21.1% to over $650 million [38] Business Line Data and Key Metrics Changes - Gross premiums in the short tail segment were up just shy of 3% for the full year, while underwriting income increased almost 5% despite elevated loss activity [30] - The reinsurance segment saw gross premiums up more than 36% for the full year, with significant increases in underwriting income and net earned premiums [32] - The long tail segment experienced a contraction of almost 10 points for the full year, with underwriting income down a little over 30% [34] Market Data and Key Metrics Changes - The company noted increased competition and pressure on rates in many lines and markets throughout 2024 [19] - The U.S. market remains a significant growth area, with the company writing over $120 million in gross premiums in 2024 [55] - The European market is characterized by relationship dynamics, making penetration slower but progress is being made [56] Company Strategy and Development Direction - The company aims to maintain a disciplined approach to underwriting, focusing on bottom-line profitability rather than aggressive top-line growth [70][72] - There is a commitment to finding new business opportunities while adhering to risk appetites and tolerances [70][72] - The company has expanded its presence in key markets, including the U.S., Europe, and Asia Pacific, enhancing marketing activities and collaboration [58][59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a challenging operating environment, citing a strong position and a well-defined strategy [60] - The competitive landscape is expected to remain intense, with a focus on maintaining underwriting discipline [43][46] - Management anticipates that losses from recent events, such as California wildfires, will be manageable [55][76] Other Important Information - The company repurchased over 220,000 common shares in Q4, with approximately 2.3 million shares remaining under the existing repurchase authorization [39] - The investment portfolio generated almost $52 million in income, representing a 30% increase year-over-year [37] Q&A Session Summary Question: How does the company balance growth opportunities with maintaining a strong combined ratio? - Management emphasized the importance of understanding their capabilities and staying within risk tolerances while seeking growth opportunities [70][72] Question: What impact do California wildfire losses have on growth appetite in that region? - Management stated it is too early to determine the long-term impact on reinsurance but remains open to opportunities if pricing improves [76][78] Question: Why does the company maintain a lower core loss ratio compared to peers? - Management attributed this to their disciplined approach and focus on bottom-line profitability, adjusting their portfolio based on market conditions [87][90] Question: What is the outlook for pricing in various markets? - Management noted that while competition is increasing, there are still areas with rate adequacy, particularly in construction and engineering [101][102]

IGI Investor Presentation Fourth Quarter 2024 February 2025 Forward Looking Statements This presentation contains "forward-looking statements" within the meaning of the "safe harbour" provisions of the Private Securities Litigation Reform Act of 1995. The expectations, estimates, and projections of the business of IGI may differ from its actual results and, consequently, you should not rely on forward-looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget, ...

Financial Data and Key Metrics Changes - The company reported a growth in book value per share of almost 20% and over 24% when including dividends [11] - The combined ratio for Q4 was 77.8% and for the full year was just under 80% [19][29] - Record net income of $135.2 million for the full year, up almost 15% from the prior year [35] - Core operating income reached a record $40.9 million in Q4 and $144.8 million for the full year [36][40] - Total assets increased by almost 11% to over $2 billion [37] - Total equity increased by 21.1% to over $650 million [38] Business Line Data and Key Metrics Changes - Gross premiums in the short tail segment were up marginally in Q4 and up just shy of 3% for the full year [30] - The reinsurance segment saw gross premiums up more than 36% for the full year [32] - The long tail segment experienced a contraction of about 1.5% points in Q4 and almost 10 points for the full year [33] Market Data and Key Metrics Changes - The company entered new markets, notably the U.S., and expanded its underwriting portfolio significantly [14][23] - The U.S. market remains a key growth area, with gross premiums of just over $120 million written in 2024 [55][56] - The European market dynamics are relationship-driven, requiring longer penetration times [56] Company Strategy and Development Direction - The company aims to maintain a disciplined approach to underwriting, focusing on bottom-line profitability [28][72] - There is a commitment to finding new business opportunities while adhering to risk appetites [70][72] - The company has established a presence at Lloyd's in London to enhance marketing activities [25] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging start to 2025 with elevated loss activity, particularly in short tail and reinsurance lines [46] - There are signs of rate stabilization in some long tail lines, although the overall environment remains competitive [46][47] - The company is confident in its ability to navigate market challenges and continue delivering value to shareholders [60][62] Other Important Information - The company repurchased more than 220,000 common shares in Q4, with approximately 2.3 million shares remaining under the repurchase authorization [39] - The company has maintained a strong cultural integrity despite rapid growth [15] Q&A Session Summary Question: Thoughts on competitive environment and growth opportunities - Management emphasized the importance of maintaining discipline and risk appetite while seeking growth opportunities [68][70] Question: Impact of California wildfire losses on growth appetite - Management stated it is too early to determine the long-term impact on reinsurance pricing but remains open to opportunities if conditions improve [76][78] Question: Core loss ratio performance compared to peers - Management attributed better performance to disciplined underwriting and a focus on bottom-line profitability [87][90] Question: Pricing environment in various markets - Management noted that while competition is increasing, there are still areas with rate adequacy, particularly in construction and engineering [101][102]

Financial Data and Key Metrics Changes - The company achieved a combined ratio of 80.5% for the first nine months of 2024, with net income exceeding $100 million and an annualized return on average shareholders' equity of 23.5% [9][34] - Gross written premiums decreased by 8% in Q3 2024, but were up marginally for the first nine months compared to the same period last year [18][19] - Net income for Q3 was $34.5 million, and $105.1 million for the first nine months, reflecting solid underwriting margins and improved investment income [32] Business Line Data and Key Metrics Changes - In the Short-tail segment, gross premiums were down 3% in Q3 but up more than 3% for the first nine months [25][26] - The Reinsurance segment saw gross premiums decrease by just under 12% in Q3, but both underwriting income and net earned premiums were up compared to the same period last year [27] - The Long-tail segment experienced a contraction of 13% in Q3, with both net earned premiums and underwriting income down compared to the same period last year [28][30] Market Data and Key Metrics Changes - The U.S. market has been the biggest growth area, with over $100 million in gross premiums written in the first nine months of 2024, a significant increase from the previous year [49][50] - The company continues to focus on expanding its presence in Europe, with nearly $60 million of premium written across all segments in the region [51] Company Strategy and Development Direction - The company emphasizes a disciplined approach to underwriting, focusing on profitability rather than growth for its own sake [39][40] - There is a strong focus on short-tail and reinsurance lines, which are viewed as more attractive in the current market environment [42] - The company is actively seeking opportunities in the U.S. and Europe while maintaining a cautious approach to risk management [64][65] Management's Comments on Operating Environment and Future Outlook - Management noted that the current competitive environment remains conducive for healthy underwriting, with expectations for continued growth in 2025 [58] - The company is prepared to scale back in certain lines or markets if necessary, prioritizing strong underwriting profitability [39][40] - Management highlighted the importance of relationships and understanding their capabilities in a competitive landscape [41] Other Important Information - The company repurchased over 340,000 common shares in Q3, totaling 1.26 million shares repurchased in the first nine months of 2024 [33] - The investment income improved, with an annualized investment yield of 4.3% for the first nine months [31] Q&A Session Summary Question: On gross written premiums and future growth expectations - Management indicated that the decrease in Q3 premiums is not a cause for concern and does not indicate a trend, with expectations for growth in 2025 [55][58] Question: On reinsurance unit and timing issues - Management explained that the reinsurance segment is the brightest spot and that timing issues are common, with adjustments expected in the second half of the year [59][60] Question: On U.S. business profitability and future growth plans - Management noted that the U.S. book has been extremely profitable and that there are plans to continue growing in this market, despite increased competition [62][64] Question: On net investment income levels - Management acknowledged that net investment income was relatively flat but expected slight growth in the future as yields improve [66]

IGI Investor Presentation Third Quarter 2024 | --- | --- | --- | --- | --- | --- | --- | |---------------|-------|-------|---------------|-------|-------|-------| | | | | | | | | | November 2024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | / Nasdaq lei | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PROVIDING PEACE OF MIND IN TIMES OF UNCERTAINTY ICI Forward Looking Statements This presentation contains contains "forward-looking statements" within the meaning ...