FG Financial Group reported that its reinsurance division posted net underwriting profit in the first quarter of 2023 of over $1 million.
According to the firm, the profit was driven by strong profitable growth in net written premiums as the company executes its strategy to deploy capital to highly structured loss-capped contracts.
In addition, the company has placed its emphasis on expanding its revenue generated from fees. It anticipates that its FG RE Solutions division will start generating fees in 2023.
As previously reported, FG Financial Group reported that net reinsurance premiums earned increased to $3.7 million, from $2.5 million in the prior year quarter.
Net premiums earned increased by $8.1 million to reach $13 million for the full year of 2022. This growth, coupled with careful underwriting practices, led to a robust net underwriting profit exceeding $1 million in the first quarter of 2023 for the reinsurance division.
For the full year 2022, net underwriting profit grew to $2.35 million from a loss of $881,000 in 2021.
In 2023, the company’s primary goal is to increase its fee-based revenue. The company has already established certain arrangements and is actively pursuing new opportunities that have the potential to generate up to $1 million in fee revenue during the year.
FG Financial Group CEO Larry Swets, Jr. commented, “We launched our reinsurance division in 2020 with the vision of utilizing disciplined underwriting to patiently deploy capital to niche, loss-capped opportunities. While still small, our differentiated and flexible reinsurance model has been working well, driving strong revenue and earnings growth.”
“Looking forward, we remain focused on continuing to grow premiums while also broadening our revenue base with no-risk, fee-based revenue through our FG RE Solutions unit. Based on our current pipeline, we could realize up to $1 million in fees this year with the opportunity for substantial long-term growth in this business as the range of joint-ventures and structures expands.”
“Additionally, we expect our Sponsor Protection and Coverage Risk unit, which focuses on providing D&O insurance to SPACs and small to mid-cap companies, to begin writing business in 2023. We look forward to continuing to patiently allocate capital to asymmetric risk/reward opportunities as we scale and drive long-term returns for our shareholders,” he added.
