IGI reports improved Q2 core income and Wall Street beat

International General Insurance Holdings (IGI) has ended its first full quarter of being traded on Nasdaq by recording an increase in core income and top line growth that included business written on its new E&S platform.

IGI’s core operating income totalled $10.3mn for the second quarter of 2020, up from $8.5mn in the prior year period.

Core operating earnings per share of $0.21 was down slightly on the $0.24 the (re)insurer reported for the same period in 2019. The second quarter 2020 result was, however, ahead of the average core operating earnings per share estimate of $0.10 as compiled by S&P Global Market Intelligence.

The company posted a combined ratio of 84 percent for the three months to 30 June, 2020, down 6.4 points year on year.

Catastrophe losses on an accident year basis contributed 2.6 points to the Q2 2020 combined ratio, down from 4 points during the same three months in 2019.

This reduced combined ratio came about from an improvement in IGI’s claims and claims expense ratio which was driven by positive loss experience on prior accident years when compared with the same period last year.

Significant growth in IGI’s net earned premiums also played a part in the improved combined ratio, as did lower policy acquisition expenses, the company explained.

Net underwriting profit of $23mn for 2020’s second quarter represented an increase of $8.7mn on the same three months in 2019.

IGI’s second quarter 2020 net written premiums (NWP) totalled $91.4mn, up from $74.4mn in the prior year period.

Long-tail business accounted for $37.8mn of that total, short-tail another $49.1mn and reinsurance the final $4.5mn.

In 2019’s second quarter, IGI’s long-tail operation generated $31.9mn of NWP, short-tail a further $38.6mn and reinsurance $3.9mn.

For the three months to 30 June 2020, IGI’s long-tail unit posted an underwriting profit of $6.4mn, up from $4.3mn in the prior year’s second quarter.

Short-tail’s second quarter 2020 underwriting profit increased by 55 percent year on year to $13.3mn.

And in IGI’s reinsurance business, a net underwriting result of $3.2mn for 2020’s second quarter was more than double the $1.4mn it posted for the same period last year.

IGI’s chairman and CEO, Wasef Jabsheh (pictured), said the company’s underwriting results “clearly demonstrate the strength of our technical capabilities and our ability to respond quickly to firming rates and conditions, particularly in those markets that are seeing the most significant changes”.

The executive said that, as expected, IGI had continued to see rate increases in virtually every line of business during the second quarter. That led to IGI recording an overall average rate improvement of more than 19 percent across its book of business.

IGI therefore made further refinements to its existing portfolio while also writing new business, including through its newly launched US E&S platform, said Jabsheh.

Gross written premiums across the business totalled $137.7mn during the three months to 30 June 2020, up 29.2 percent year on year.

The increase, IGI said, “was the result of new business generated across virtually all lines, as well as improved renewal pricing”.

“We are very pleased with our strong performance in the second quarter and first half of 2020, particularly as we, along with the rest of the world, continue to navigate the effects of the Covid-19 pandemic,” said Jabsheh.