Reinsurance and investment management holding company FG Financial Group has reported an increase in its reinsurance premiums despite seeing a net loss in the second quarter of 2022.
FGF’s net premiums earned increased from $0.9mn in Q2 2021, to $3.0mn in this year’s second quarter. The group’s net loss increased to $5.9mn, compared to a net loss of $0.7 million in Q2 2021.
The company also reported a net investment loss of $3.7mn compared to net investment income of $2.2mn in the prior year second quarter.
Additionally, FGF paid the 8% Series A Preferred Share dividend of $0.45mn, which represents the company’s 17th consecutive quarter of paying the full dividend due on the 8% Series A Preferred Shares since their issuance in February 2018.
General and administrative expense for this year’s second quarter was $2.3mn, compared to the $1.7mn reported in the same period last year.
According to FGF, this increase was primarily due to salaries and wages relating to headcount increases and fees related to new reinsurance agreements as the company expands its SPAC platform and reinsurance businesses.
Larry Swets Jr., FG Financial Group CEO commented: “In the second quarter, we continued to execute our strategy to grow long-term intrinsic value through a strategic focus on our SPAC and reinsurance businesses. The reinsurance market is the strongest we have seen in many years, presenting many opportunities to write attractive niche contracts.
“Since launching our reinsurance business we have entered six contracts, with three added this quarter driving significant reinsurance premium growth. We also continue to grow our FG SPAC platform and closed a $115mn IPO for FG Acquisition Corp. in April.
“Our SPAC business has now completed two de-SPACs with OppFi and Hagerty, and currently has two funded SPACs evaluating acquisition opportunities. While we recorded a non-cash unrealized loss from investments in the first half of the year primarily due to valuation discounts attributed to SPAC investments at pre-merger stage, we remain extremely optimistic about the long-term growth opportunity in these businesses.”
FG Financial Group Chairman Kyle Cerminara added, “We continue to see asymmetric risk/reward opportunities across our markets, and remain focused on patiently allocating capital to drive long-term shareholder value.”
