IGI reports net income of $35m for Q3’24 amid rise in net premiums earned

International General Insurance Holdings Ltd. (IGI), in its Q3 2024 results, has reported net income of $34.5 million compared to $10.9 million last year, driven primarily by an increase in net premiums earned (NPE) of $17.2 million.

The increase in net income also included a decrease of $15.5 million in the change in fair value of derivative financial liabilities and a change of $15.1 million in the net foreign exchange gain over the third quarter of 2023, partially offset by a $24.4 million increase in net loss and loss adjustment expenses.

IGI’s gross written premiums (GWP) for Q3 2024 were $138.3 million, compared to Q3 2023’s $150.3 million, with the decrease reflected across all operating segments. NPE increased from $108.9 million to $126.1 million in Q3 2024.

The firm’s loss ratio increased by 14.2 points to 51.5% in Q3 2024, compared to 37.3% last year. The increase was attributed to unfavourable development of net loss reserves from prior accident years of 5.6 points, compared to favourable development of 12.7 points for Q3 2023.

On the back of a higher loss ratio, underwriting income decreased from $49.7 million to $41.4 million, as the combined ratio rose from 73.2% to 86%.

Net investment income improved by $2.5 million to $11.5 million for Q3 2024, as net income increased to the aforementioned $34.5 million, while core operating income decreased slightly to $30.7 million from $36.3 million.

Looking at the 9M 2024 performance, the firm has reported a net income increase of 23.3% to $105.1 million compared to $85.2 million for 9M 2023, due to an increase in net premiums earned of $30.3 million, a decrease of $15.6 million in the change in fair value of derivative financial liabilities, and positive movement of $8.1 million in net foreign exchange. This was partially offset by an increase of $29.9 million in net loss and loss adjustment expenses in the period, explains IGI.

GWP was reported at $525.5 million for 9M 2024 compared to $523.8 million last year. The increase was driven by growth in the reinsurance and short-tail segments, and a decrease in the long-tail segment. 9M 2024 NPE rose from $332.2 million to $362.5 million.

Underwriting income remained relatively flat at $138.7 million for 9M 2024 compared to $139.5 million for 9M 2023, with the increase in net premiums earned offset by a higher level of net loss and loss adjustment expenses.

The net loss ratio for 9M 2024 increased to 45.3% compared to 40.5% for the same period in 2023, as the combined ratio for 9M 2024 hit 80.5%, compared to 74.9% the year prior.

Net investment income for the nine month period rose from $35.7 million to $40.3 million, as net income strengthened to $105.1 million from $85.2 million, and core operating income was flat at $103.9 million.

By segment, the reinsurance unit represented 15% of IGI’s GWP for 9M 2024 at $78.6 million, an increase of 19.1% compared to $66 million for 9M 2023. Q3 2024’s GWP was $13.5 million compared to $15.3 million last year. The segment’s underwriting income increased to $7.7 million for Q3 2024, compared to $5.8 million last year, and increased to $22.3 million from $9.3 million for 9M 2024.

The specialty short-tail segment represented 58% of IGI’s GWP for 9M 2024 at $306.1 million, an increase of 3.5% compared to $295.5 million for 9M 2023, and generated a GWP of $74.7 million for Q3 2024, compared to $77.4 million in Q3 2023. The segment’s underwriting income was $34.7 million compared to $20.8 million for the same quarter of 2023.

Lastly, the specialty long-tail segment, which represented 27% of the firm’s GWP for 9M 2024, recorded a GWP of $50.1 million for Q3 2024, a decrease of 13% compared to $57.6 million for the third quarter of 2023. This segment recorded an underwriting loss of $1 million compared to an underwriting income of $23.1 million in Q3 2023, largely due to a higher volume of net loss and loss adjustment expenses.

Waleed Jabsheh, President & Chief Executive Officer, IGI, commented, “We had another quarter of strong performance with solid underwriting margins as well as a more favourable investment environment. While the third quarter was marked by heavier catastrophe losses globally as well as varied underwriting and financial markets, we have remained focused on consistently executing our strategy, at a time when risk selection and discipline are critical. All in for the third quarter, we recorded net income of $34.5 million, and a return on average equity of 22.3%.”

“As we look ahead to 2025, we are in our strongest position ever, with a solid and consistently growing capital base. At September 30, 2024, total equity was $651.6 million, an increase of more than $100 million or 20.6% from December 31, 2023. This, in addition to our focus on building a larger and more diversified underwriting portfolio, has created a strong foundation and a level of resilience that will continue to serve us well in the future.

“As always, consistent and sustainable value creation is at the core of everything we do at IGI. In the first nine months of 2024, we grew our book value per share by 18.6% to $14.71. In addition to paying out more than $25 million in common share dividends for the year to date to September 30, 2024, we continued to repurchase our common shares. We will continue to focus on delivering strong returns and generating value for our shareholders for the remainder of 2024 and beyond.”

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