Newly public IGI's business 'upended' by COVID-19 turmoil
International General Insurance Holdings (IGI) reported a small loss but improved its combined ratio in an "extraordinary" quarter, shortly after becoming a publicly traded company amidst the COVID-19 outbreak that caused significant turbulence across global financial and capital markets.
For the first quarter of 2020, IGI recorded a net loss of $0.9 million, compared with a profit of $6.5 million in the same period of 2019.
Gross written premiums increased to $99.2 million in Q1 2020, compared with $80 million for Q1 2019, reflecting a year on year growth of 24 percent.
The company's combined ratio was 81.3 percent in Q1, compared with 95.1 percent in Q1 2019, an improvement it attributed to lower acquisition and general and administrative expenses, as well as growth in earned premiums.
However, its investment results were impacted by market turbulence related to the COVID-19 pandemic, with unrealised mark-to-market adjustments of $4.6 million leading to an overall investment portfolio loss of $2.0 million in Q1 2020, compared to total investment income of $3.7 million in Q1 2019.
In mid-March, IGI common shares started trading on the Nasdaq Capital Market, following the completion of business combination with Tiberius Acquisition Corporation, a publicly traded special purpose acquisition company.
IGI chairman and CEO Wasef Jabsheh said: “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.
“Our results for the first quarter of 2020 – similar to other (re)insurance companies – clearly show the impacts of this crisis. While we recorded unrealized investment losses and significant fluctuations in our operating currencies, to date we have not recorded material underwriting losses as a direct result of the pandemic, but we are constantly monitoring this as the situation continues to evolve."
Jabsheh added: “Notwithstanding the uncertainty, IGI remains strong. I am very proud of the performance and resilience of all our people who have had to adjust to a whole new way of working. 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.”
Commenting on the business outlook, Jabsheh said: “All our teams at IGI are continuing to forge ahead with the same consistency of focus and discipline as always, despite the distraction and market disruption created by the COVID-19 pandemic. We are seeing significant opportunities in our underwriting operations as well as our investment operations, but as always we remain judicious in evaluating these and maintaining balance in our portfolio.”