International General Insurance Holdings Ltd. (IGI) has reported an increase in gross written premiums (GWP), an improved underwriting result and stronger combined ratios for both the second-quarter and first half of 2020, when compared with the prior year periods.
Despite the challenging impacts of the ongoing COVID-19 pandemic, IGI has reported underwriting profit of $23 million for Q2 and $46.1 million for H1 2020, compared with $14.3 million and $26.2 million for the same periods in 2019, respectively.
GWP jumped to $137.3 million in the second-quarter of 2020 and to $236.5 million in H1 2020, against $106.3 million in Q2 2019 and $186.3 million in H1 2019. IGI attributes the growth in premiums to new business generated across most lines, alongside better pricing at renewals. Furthermore, IGI also took advantage of firming market conditions in the period, further refining its existing portfolio to achieve improved T&Cs.
Overall, the company significantly improved its combined ratio for both periods, to 84% from 90.4% in Q2, and to 82.6% from 92.7% in H1.
The firm attributes the improved combined ratios to improved claims and claims expense ratio as a result of positive loss experience on prior accident years when compared with the same period in 2019, as well as growth in net earned premiums and reduced policy acquisition expenses.
By segment, and IGI’s reinsurance unit represented roughly 5% of the firm’s GWP for the first half of the year, which includes the firm’s treaty reinsurance portfolio. Within reinsurance, net written premiums (NWP) increased from $3.9 million in Q2 2019 to $4.5 million in Q2 2020. For H1 2020, IGI’s reinsurance operations produced NWP of $11.4 million, up from the $10.9 million announced a year earlier.
All in all, the reinsurance segment recorded an underwriting gain of $3.2 million in Q2 2020 and $5.2 million in H1 2020, compared with $1.4 million and $2.4 million for the same periods in 2019, respectively.
Turning to long-tail business, which represented around 35% of IGI’s GWP for H1 2020, the firm has reported an underwriting gain of $6.4 million for Q2, which is up on the $4.3 million posted a year earlier. For H1 2020, the net underwriting result improved year-on-year from $8.8 million to $19.5 million.
The short-tail segment, which represented roughly 60% of the company’s GWP for H1 2020, recorded an underwriting profit of $13.3 million in Q2 2020, compared with $8.6 million in Q2 2019. For the first half of the year, this part of the business recorded an underwriting gain of $21.4 million, which is up on the $14.9 million posted a year earlier.
Chairman and Chief Executive Officer (CEO) of IGI, Wasef Jabsheh, said: “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. While we are hearing and reading of new lockdown measures in some of the jurisdictions where we operate, our view of the financial impact of the COVID-19 pandemic on IGI currently remains unchanged.
“Our underwriting results, reflected in a combined ratio of 82.6% for the half year, 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. As expected, we continued to see rate increases in virtually every line of business we write during the second quarter, culminating in an overall average rate improvement of more than 19% across our book of business, enabling us to make further refinements to our existing portfolio while writing new business, including our new U.S. E&S portfolio.
“I am very proud of all our IGI colleagues whose hard work, focus and commitment over the past several months have enabled us to continue to execute our strategy seamlessly, while delivering excellent service to our clients and partners.
“You will have seen the announcement, made separately, that our Board of Directors has declared a common share dividend of $0.09. IGI has a long track record of delivering shareholder value, and we look forward to continuing to generate long-term value for our new shareholders.”