International General Insurance Holdings Ltd. (IGI) has reported its financial results for Q1 2023, where the combined ratio of the company was 78.4%, compared to 71.8% for Q1 2022. The increase was primarily the result of a higher loss and loss adjustment expense ratio.
Wasef Jabsheh, the IGI Chairman and CEO said, “IGI had a very positive start to 2023, posting another excellent set of financial results for the first quarter. We responded decisively to improving areas of our markets with the same disciplined execution, delivering profitable growth as reflected in a 78.4% combined ratio.
“With these strong underwriting results, coupled with significantly improved investment results, driven by higher yields and increased reinvestment rates, we recorded a profit of $33.9 million, a 32.2% annualized return on average equity, and a 27.9% annualized core operating return on average equity.”
The company’s gross written premiums were $173.9 million for Q1 2023, with an increase of 37.6% compared to gross written premiums of $126.4 million for Q1 2022. The increase was largely driven by growth in both the Short-tail and Reinsurance segments of 35.3% and 187.9% respectively, partially driven by a 6% decrease in the Long-tail Segment.
Jabsheh also commented, “The operating environment remains positive, notwithstanding the broader macroeconomic, geopolitical and environmental challenges that persist. We grew our gross premiums by over 37% during the first quarter of 2023 as we took advantage of the rating momentum and improved terms in our short-tail and reinsurance segments. We are encouraged by the strong and profitable growth seen to date in the second quarter.”
The company’s profit for Q1 2023 was $33.9 million, compared to a profit of $22.2 million for Q1 2022. The increase in profit was driven by an increase of $17.8 million in net premiums earned. Along with a positive movement of $10.3 million in total investment income, and $2.7 million of favourable movement in foreign exchange as a result of currency revaluation against the U.S. Dollar.
The core operating income stands at $29.3 million for Q1 2023, compared to $23.3 million for Q1 2022. Underwriting income for the company stands at $39.8 million for Q1 2023 compared to $41.7 million for Q1 2022, This decrease was driven by a higher level of loss and loss adjustment expenses, partially offset by growth in net premiums earned.
The company’s loss ratio increased 13.3 points to 45.7% for Q1 2023, compared to 32.4% for Q1 2022, largely driven by an increased level of losses, in particular, the earthquake in Turkey as well as flooding in New Zealand from Cyclone Gabrielle, both in February 2023 and a lower level of favourable development of net loss reserves from prior accident years.
Jabsheh said, “There is a lot of positive momentum in many areas of our business and we remain optimistic and excited about our future. As we have continued to grow and evolve into a truly international specialist insurer, we remain focused on consistent, disciplined execution of our strategy so that we continue our track record of generating long-term shareholder value through excellence in underwriting.”
The Reinsurance Segment of the company, which represented approximately 23% of its gross written premiums for Q1 2023, recorded gross written premiums of $40.3 million, compared to $14 million for Q1 2022. Net premiums earned for Q1 2023 were $13.8 million, compared to $6.9 million for Q1 2022. There was a loss of $0.3 million for Q1 2023, in the underwriting segment as compared to a gain of $1.9 million for Q1 2022.
The decline in underwriting income was primarily due to a higher level of loss and loss adjustment expenses in the first quarter of 2023 compared to the first quarter of 2022, partially offset by the increase in net premiums earned.
The company’s net investment income was $12.4 million in Q1 2023, compared to $2.1 million in Q1 2022. Investment income was $8.7 million and $3.9 million for the quarters ended March 31, 2023, and 2022, respectively.
