International General Insurance Holdings Ltd. improved its combined ratio by 13.8 points to 81.3% in the first quarter of 2020, even as the COVID-19 pandemic drove losses on the investment side of the business.
Unrealized mark-to-market adjustments of $4.6 million led to an overall investment portfolio loss of $2.0 million in Q1, which ultimately caused IGI to post a loss after tax of $0.9 million, compared to a profit of $6.5 million for the same period last year.
But the company did not record material underwriting losses due to the pandemic, and continued to generate new business across most lines during the first quarter of the year, as well as improved renewal pricing.
Gross written premiums were $99.2 million in Q1 2020, compared to $80.0 million for the same period in the previous year.
IGI’s claims and claims expense ratios were 46.3% and 54.7% for Q1 2020 and 2019, respectively, including current accident year net catastrophe losses of $0.8 million and $3.7 million. Favorable development on reserves from prior accident years was $10.0 this year, versus $4.1 million previously.
The company attributed the improvement in its combined ratio to lower acquisition and G&A expense ratios, growth in net earned premiums, and improvement in the claims and claims expense ratio, driven by relatively benign catastrophe activity and partly by foreign exchange fluctuations.
IGI Chairman and CEO Mr. Wasef Jabsheh commented on the results: “The first three months of 2020 have been extraordinary across the globe but particularly for IGI: we became a public company and began trading on Nasdaq in mid-March while the world was experiencing unprecedented turmoil from the outbreak of the COVID-19 pandemic. We have seen significant turbulence across global financial and capital markets, disruption in (re)insurance markets, and the way we do business has been upended.
“Notwithstanding the uncertainty, IGI remains strong,” Jabsheh continued. “I am particularly pleased with the strong underwriting performance achieved during this period, and also that we were able to leverage our long-standing relationships and market position to take advantage of opportunities to refine our portfolio in our core lines and geographies, while writing profitable new business.
“During the quarter, we continued to see rate increases of more than 13% across our book of business, with price momentum continuing to build in most lines of business. We are optimistic this will continue throughout 2020, and with our entry into the U.S. E&S markets in April, we will maintain our focus and discipline as we strive to continue to generate attractive risk-adjusted returns for our shareholders.”
