International General Insurance Holdings Ltd. (IGI) has reported a 10.3 percentage point improvement in its combined ratio for Q4 2023 to 81.8% and growth in underwriting income to $43.5 million, as net income increased to $33 million in the period.
For the quarter, gross written premiums (GWP) were $164.9 million, an increase of 6.5% compared to $154.8 million for Q4 2022, driven by growth in the Short-tail Segment, which reported GWP growth of 38.2% to $105.2 million.
Group-wide, net premiums earned jumped from $96.7 million in Q4 2022 to $114.9 million in Q4 2023, as the insurer’s loss ratio declined to 47.6% from 55.6% in Q4 2022.
The insurer’s core operating income for Q4 2023 was $30 million compared to $13.6 million a year earlier, with a core operating return on average equity of 23.7% in Q4 2023 compared to 13.7% in Q4 2022.
IGI attributes the increase in net income to $33 million to an improvement of $18.8 million in underwriting income and the positive movement of $6.4 million in net investment income to $14.5 million.
By segment, the short-tail business saw a 33% rise in net premiums earned to $62.5 million, while underwriting income increased from $11.4 million to $27.2 million.
In the long-tail segment, GWP fell 14% in the quarter to $64.6 million, while net earned premiums declined 9.4% to $41.5 million. Underwriting income decreased more than 30% year-on-year to $7 million, driven by a lower level of net premiums earned in the period.
In the reinsurance segment, GWP in the quarter was impacted by prior period premium adjustments, resulting in GWP of negative $4.9 million, compared to $3.6 million for the fourth quarter of 2022. Net premiums earned increased from $8.2 million to $14.8 million, as underwriting income increased from $3.2 million to $9.3 million, driven by an increase of 80.5% in net premiums earned in the fourth quarter of 2023 compared to the fourth quarter of 2022.
For full-year 2023, Group-wide underwriting income increased 23.2% to $183.1 million, driven by higher net premiums earned of $70.8 million as a result of the growth in the short-tail and reinsurance Segments, partially offset by $31.5 million higher net loss and loss adjustment expenses across all segments.
GWP were $688.7 million for FY 2023, representing an increase of 18.3% compared to $582 million for FY 2022, driven by growth in the reinsurance and short-tail segments.
Net income for FY 2023 increased by 32.5% to $118.2 million from $89.2 million in 2022, driven by an increase of $34.5 million in underwriting income, and a positive movement of $35.8 million in net investment income. The reported return on average equity was 24.8% for FY 2023 compared to 22.5% in the prior year.
The insurer’s core operating income was $133.8 million for FY 2023, compared to $93.9 million for the same period in 2022, with a core operating return on average equity of 28.1% for FY 2023 compared to 23.7% in 2022.
All in all, the combined ratio reported for FY 2023 improved by 1.8 points to 76.7% compared to 78.5% in 2022.
Waleed Jabsheh, Chief Executive Officer, IGI, said, “During the fourth quarter of 2023, we continued on the trajectory of the first nine months of 2023, with strong performance to finish the year with record results across a number of metrics. These excellent results culminated in a combined ratio of 76.7%, the lowest full year combined ratio in IGI’s history, and a core operating return on average equity of 28.1% for the full year 2023, demonstrating consistent selective and disciplined underwriting, focusing on those lines with the strongest margins.
“Market conditions remained positive through the January 1 renewal period, and we are continuing to see healthy opportunities in reinsurance and many short-tail lines. Pricing in our long-tail lines remains adequate by and large, although conditions in these lines are becoming more challenging. Overall in 2023, we achieved net rate increases of 6.5% across our portfolio, with strong premium growth of 18.3%.
“While the world around us has become increasingly polarized and our industry increasingly challenged, IGI, as always, remains focused on consistently executing our strategy, growing our company, and being a reliable and trusted partner to our brokers and clients. We are committed to our strategic priority of managing the cyclicality and inherent volatility of our business, and focused on maximizing shareholder value through active and efficient capital management.”
