International General Insurance(IGIC) - 2024 Q3 - Earnings Call Transcript

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]