IGI reaps benefits of decision to shun event cancellation before COVID-19
International General Insurance (IGI) is confident that it can take advantage of the hardening market, stressing the role of careful market analysis in keeping it out of many of the businesses that have been most affected by the impact of COVID-19.
IGI is not involved in event cancellation, travel, health or small and medium-sized enterprise (SME) property re/insurance, all of which have been particularly hard hit by the impact of the pandemic.
“You always need a bit of luck on your side,” said Waleed Jabsheh, president at IGI, speaking to Intelligent Insurer.
“We have looked at event cancellation but we decided the market was too soft and it wasn’t the right time. We have also looked at the SME space we considered supporting managing general agents in that market, especially in the UK but again in the end it didn’t feel like the right time, so it is not all down to luck.”
COVID-19 has put a strain on results across the re/insurance sector and created capacity crunches, but IGI has performed relatively well in 2020, delivering profit for the first half and second quarter of 2020.
Net profit after tax for H1 2020 was down to $11.2 million compared with $14.9 million for the first six months of 2019, but Q2 net profit rose to $12 million compared with $8.4 million for the same period a year earlier.
Jabsheh said: “We were pleased with our performance across the entire portfolio. The magnitude of COVID-19’s impact varied across business lines, with the heaviest rate increases seen in the longer tail classes of business, especially professional indemnity and D&O.”
He noted that the market had already been hardening before COVID-19 struck, but said the pandemic will prolong and intensify the trend.
“The market looks set to continue hardening throughout 2021 and into 2022,” Jabsheh predicted. “There are so many factors contributing to that trend, it is difficult to see it change before then.”
Opportunities
Jabsheh stressed the opportunities the current market environment creates for IGI.
“We have been writing US E&S since April and we were very conscious about the timing of that move,” he said.
“We watched the market for years but did not want to enter there when there was an abundance of capacity.”
IGI is also re-entering the cargo business, which Jabsheh believes can generate returns going forward.
“The key to this business is to be aware of your own risk appetite and to adjust it when the need arises,” explained Jabsheh.
“The reinsurance strategy and the underwriting strategy may need to change in a hardening market, but there have been no radical changes, it is more about being nimble to take advantage of circumstances.
“You have to focus on managing the portfolio and maintaining discipline.”
Jabsheh agreed that becoming a public company, listed on Nasdaq, has changed a lot for IGI, but stressed it did not change the underwriting philosophy of the business, nor its fundamental approach.
“We have more regulatory, legal and compliance responsibilities, which increases operational expenses,” said Jabsheh.
“But in terms of the underwriting, and the type of business we want to do, nothing has changed. Investors believe in that story and our track record. Being a public company will not change our underwriting appetite.”
Jabsheh praised IGI staff for the way they have adapted to the new working conditions created by the pandemic.
“The transition from office to home working in recent months has been challenging but fruitful,” he said. “We are proud that service levels were maintained throughout.”
