International General Insurance Holdings Limited (IGI) has reported after-tax profit of $23.6 million for the full year 2019, as higher investment income partially offset a slight dip in the company’s net underwriting result for the year.
IGI’s full year profit fell by around $2 million when compared with the prior year, while total net investment income increased from $9.1 million in 2018 to $10.7 million in 2019.
At 94.1%, the company’s combined ratio deteriorated in 2019 when compared with 88.7% recorded in the previous year, reflecting an underwriting result of $52 million, against an underwriting gain of $56.1 million in 2018.
IGI states that the increase in the combined ratio year-on-year reflects higher attritional loss activity within its treaty book. At the same time, the insurer notes a higher proportion of attritional gross losses across its downstream energy and engineering books were below coverage thresholds for its reinsurance program in 2019. Furthermore, the underwriting result was also impacted by less favourable prior year development in 2019 when compared with the previous year.
IGI’s claims and claim expense ratio increased to 55% in 2019 from 47% in 2018, and included current accident year catastrophe losses of $16.1 million, which is in line with the prior year. IGI notes that catastrophe losses were confined to the second-half of the year, and included the Petronas explosion, Hurricane Dorian, and Typhoons Hagibis and Faxai in Japan.
Overall, IGI’s core operating income reached $21.1 million in 2019, which is down on the $28.6 million reported for the full year 2018.
Gross written premiums did expand in the year to $349.2 million, while reinsurers’ share of premiums fell slightly to $97.1 million. Net written premiums increased by around $50 million to $252.1 million for 2019, while net premiums earned jumped from $183.3 million in 2018, to $215.5 million in 2019.
IGI Founder, Vice Chairman and Chief Executive Officer (CEO), Wasef Jabsheh, said: “2019 was a strong year of growth for our Company. Our results reflect IGI’s ability to quickly take advantage of hardening market conditions, increasing our net written premiums by 24% year-over-year. IGI experienced rate increases of approximately 13% year-over-year across our book of business in 2019. We are experiencing continued momentum in rates, and in the fourth quarter of 2019, rate increases were above 20% on average.
“Early indications in 2020 suggest pricing momentum is continuing to accelerate. We are seeing notable opportunities in most non-U.S. long-tail specialty lines, downstream energy risks, and specialty lines across the MENA region where there is increasing dislocation and where IGI is particularly well-positioned with a strong presence on the ground. We are optimistic that these market conditions will continue to provide us with more opportunities to leverage our market position to generate continued profitable growth.
“As part of our strategy to accelerate growth, we made the decision to pursue a listing on the Nasdaq Capital Market through a business combination with Tiberius Acquisition Corporation (NASDAQ: TIBR), a U.S.-based special purpose acquisition company.
“This transaction, combined with our demonstrated track record of generating consistently strong value for our shareholders, is precisely timed to allow us to deploy new capital to take advantage of rapidly improving rates and conditions across our markets. Our specialty insurance expertise in key lines and differentiated geographic presence in the right markets uniquely positions IGI to capitalize on the opportunities ahead of us. We anticipate that the transaction will close on March 17, 2020.”
IGI obtained the final regulatory approvals it needs to move ahead with its planned business combination with Tiberius Acquisition Corp. in February, which will result in the public listing of IGI.
“Looking ahead, we are ready to put fresh capital to work while maintaining the focused and disciplined underwriting that has been a hallmark of IGI since inception. As we think about opportunities in 2020, we are awaiting regulatory approval to write U.S. excess and surplus business in what is becoming a very attractive market; we are evaluating the possibilities of opening a subsidiary company in Belgium to capture opportunities in mainland Europe, post Brexit; and we are committed to maintaining and expanding our broad physical footprint advantage in the MENA and Asian regions, at a time when many of our competitors are reducing or exiting certain classes of business, or closing down operations located within the region,” said Jabsheh.
