International General Insurance Holdings Ltd. (“IGI” or the “Company”) (NASDAQ: IGIC) today reported financial results for the third quarter and first nine months of 2024.

Highlights for the third quarter and first nine months of 2024 include:

IGI President & CEO Mr. Waleed Jabsheh said, “We had another quarter of strong performance with solid underwriting margins as well as a more favorable investment environment. While the third quarter was marked by heavier catastrophe losses globally as well as varied underwriting and financial markets, we have remained focused on consistently executing our strategy, at a time when risk selection and discipline are critical. All in for the third quarter, we recorded net income of $34.5 million, and a return on average equity of 22.3%.”

“As we look ahead to 2025, we are in our strongest position ever, with a solid and consistently growing capital base. At September 30, 2024, total equity was $651.6 million, an increase of more than $100 million or 20.6% from December 31, 2023. This, in addition to our focus on building a larger and more diversified underwriting portfolio, has created a strong foundation and a level of resilience that will continue to serve us well in the future.”

“As always, consistent and sustainable value creation is at the core of everything we do at IGI. In the first nine months of 2024, we grew our book value per share by 18.6% to $14.71. In addition to paying out more than $25 million in common share dividends for the year to date to September 30, 2024, we continued to repurchase our common shares. We will continue to focus on delivering strong returns and generating value for our shareholders for the remainder of 2024 and beyond.”

Results for the Periods ended September 30, 2024 and 2023

Net income for the quarter ended September 30, 2024 was $34.5 million compared to $10.9 million for the quarter ended September 30, 2023. The increase in net income was primarily driven by an increase in net premiums earned of $17.2 million, a decrease of $15.5 million in the change in fair value of derivative financial liabilities and a change of $15.1 million in the net foreign exchange gain (loss) over the third quarter of 2023. This was partially offset by a $24.4 million increase in net loss and loss adjustment expenses, which were negatively impacted by the currency revaluation on loss reserves denominated in Pounds Sterling during the third quarter of 2024.

Return on average equity (annualized) was 22.3% for the third quarter of 2024, compared to 9.3% for the third quarter of 2023.

Core operating income, a non-GAAP measure, was $30.7 million for the quarter ended September 30, 2024, compared to $36.3 million for the same period in 2023. The core operating return on average equity (annualized) was 19.8% for the third quarter of 2024 compared to 31.0% for the third quarter of 2023.

Gross written premiums were $138.3 million for the quarter ended September 30, 2024, compared to $150.3 million for the quarter ended September 30, 2023. The decrease was reflected in all segments.

The loss ratio was 51.5% for the quarter ended September 30, 2024, an increase of 14.2 points when compared to 37.3% for the quarter ended September 30, 2023. The increase in the loss ratio was primarily driven by unfavorable development of net loss reserves from prior accident years of 5.6 points, compared to favorable development of 12.7 points for the quarter ended September 30, 2023. The unfavorable development of net loss reserves from prior accident years in the third quarter of 2024 primarily resulted from the currency revaluation on prior period loss reserves denominated in Pounds Sterling in the Long-tail Segment, while the third quarter of 2023 benefited from the currency devaluation impact on loss reserves denominated in Pounds Sterling.

The net policy acquisition expense ratio was 15.6% in the third quarter of 2024 compared to 17.1% in the same quarter of 2023.

The general & administrative expense ratio was 18.9% for the quarter ended September 30, 2024, compared to 18.8% in the prior year third quarter.

The combined ratio for the quarter ended September 30, 2024 was 86.0%, compared to 73.2% in the prior year third quarter.

Net income for the nine months ended September 30, 2024 increased 23.3% to $105.1 million compared to $85.2 million for the nine months ended September 30, 2023. The increase in net income was primarily driven by an increase in net premiums earned of $30.3 million, a decrease of $15.6 million in the change in fair value of derivative financial liabilities, and positive movement of $8.1 million in net foreign exchange. This was partially offset by an increase of $29.9 million in net loss and loss adjustment expenses in the first nine months of 2024 when compared to the same period in 2023.

Return on average equity (annualized) was 23.5% for the first nine months of 2024, compared to 25.8% for the first nine months of 2023.

Core operating income, a non-GAAP measure, was $103.9 million for the nine months ended September 30, 2024, compared to $103.7 million for the same period in 2023. The core operating return on average equity (annualized) was 23.2% for the first nine months of 2024, compared to 31.4% for the first nine months of 2023.

Underwriting income remained relatively flat at $138.7 million in the first nine months of 2024 compared to $139.5 million for the first nine months of 2023, with the increase in net premiums earned offset by a higher level of net loss and loss adjustment expenses.

Gross written premiums were $525.5 million for the nine months ended September 30, 2024 compared to gross written premiums of $523.8 million for the nine months ended September 30, 2023. The increase was driven by growth in the Reinsurance and Short-tail Segments, partially offset by the decrease in the Long-tail Segment.

The loss ratio for the nine months ended September 30, 2024 was 45.3% compared to 40.5% for the same period in 2023.

The net policy acquisition expense ratio was 16.4% in the first nine months of 2024, compared to 17.5% in the same period of 2023.

The general & administrative expense ratio was 18.8% for the first nine months of 2024 compared to 16.9% for the first nine months of 2023, largely driven by higher human resources costs in line with the Company’s growth.

The combined ratio for the nine months ended September 30, 2024 was 80.5% compared to 74.9% for the nine months ended September 30, 2023.

Segment Results

The Specialty Short-tail Segment, which represented 58% of the Company’s gross written premiums for the nine months ended September 30, 2024, generated gross written premiums of $74.7 million for the third quarter of 2024, compared to $77.4 million in the third quarter of 2023. Net premiums earned were $67.4 million, an increase of 10.7% compared to $60.9 million in the same quarter in 2023. Underwriting income was $34.7 million compared to $20.8 million for the same quarter of 2023, with the increase primarily driven by higher net premiums earned and a lower level of net loss and loss adjustment expenses during the third quarter of 2024, compared to the same period in 2023.

Gross written premiums for the nine months ended September 30, 2024 were $306.1 million, an increase of 3.5% compared to $295.5 million for the first nine months of 2023. Net premiums earned for the nine months ended September 30, 2024 were $193.6 million, an increase of 11.5% compared to $173.6 million in the same period in 2023. Underwriting income was $91.2 million for the nine months ended September 30, 2024, an increase of 14.3% compared to $79.8 million in the first nine months of 2023, primarily due to a higher level of net premiums earned, partially offset by a higher level of net loss and loss adjustment expenses in the first nine months of 2024.

The Specialty Long-tail Segment, which represented 27% of the Company’s gross written premiums for the nine months ended September 30, 2024, recorded gross written premiums of $50.1 million for the third quarter of 2024, a decrease of 13.0% compared to $57.6 million for the third quarter of 2023. Net premiums earned for the quarter ended September 30, 2024 were $36.9 million, a decrease of 2.9% compared to $38.0 million in the same quarter in 2023, primarily as a result of the lower level of gross written premiums. This segment recorded an underwriting loss of $1.0 million compared to underwriting income of $23.1 million in the third quarter of 2023, largely due to a higher volume of net loss and loss adjustment expenses. In the third quarter of 2024, net loss and loss adjustment expenses included unfavorable development of net loss reserves from prior accident years of $8.5 million. This compares to favorable development of $11.1 million in the same period in 2023. The unfavorable development of net loss reserves from prior accident years in the third quarter of 2024 was primarily attributed to the impact of currency revaluation on prior period loss reserves denominated in Pounds Sterling.

Gross written premiums for the nine months ended September 30, 2024 were $140.8 million, a decrease of 13.2% compared to $162.3 million for the first nine months of 2023. Net premiums earned for the nine months ended September 30, 2024 were $110.5 million, a decrease of 8.1% compared to $120.2 million in the same period in 2023, primarily as a result of the lower level of gross written premium. Underwriting income was $25.2 million for the nine months ended September 30, 2024, a decrease of 50.0% compared to $50.4 million in the first nine months of 2023, primarily due to a lower level of net premiums earned and a higher level of net loss and loss adjustment expenses in the first nine months of 2024.

The Reinsurance Segment, which represented 15% of the Company’s gross written premiums for the nine months ended September 30, 2024, recorded gross written premiums of $13.5 million compared to $15.3 million for the third quarter of 2023. Net premiums earned for the quarter ended September 30, 2024 were $21.8 million, an increase of $11.8 million compared to $10.0 million for the same quarter in 2023. Underwriting income increased to $7.7 million for the third quarter of 2024, compared to $5.8 million for the third quarter of 2023, primarily the result of the higher level of net premiums earned, partially offset by a higher level of net loss and loss adjustment expenses during the third quarter of 2024.

Gross written premiums for the nine months ended September 30, 2024 were $78.6 million, an increase of 19.1% compared to $66.0 million for the first nine months of 2023. Net premiums earned for the nine months ended September 30, 2024 were $58.4 million, an increase of 52.1% compared to $38.4 million in the same period in 2023, primarily as a result of the higher level of gross written premium. Underwriting income increased to $22.3 million in the first nine months of 2024, compared to $9.3 million in the first nine months of 2023, primarily due to a higher level of net premiums earned in the first nine months of 2024.

Investment Results

Investment income increased by 26.0% to $13.1 million as compared to the prior year third quarter, driven by higher yields on a larger fixed income portfolio. In total, the investment yield on average total investments and cash and cash equivalents was 4.2%, up from 3.9% in the corresponding period in 2023. Net investment income was $11.5 million for the third quarter of 2024, compared to $9.0 million for the third quarter of 2023

Investment income increased 31.9% to $38.0 million for the nine months ended September 30, 2024 as compared to $28.8 million for the same period in 2023. This represented an annualized investment yield of 4.3% compared to a 3.8% annualized investment yield in the corresponding period in 2023. Net investment income was $40.3 million in the first nine months of 2024, compared to $35.7 million in the first nine months of 2023.

Net Foreign Exchange Gain (Loss)

The net foreign exchange gain in the third quarter of 2024 was $8.6 million, compared to a loss of $6.5 million in the third quarter of 2023, both of which primarily represent currency revaluation movements. During the third quarter of 2024, we recorded positive currency movement in the Company’s major transactional currencies (mainly Pound Sterling and Euro) against the U.S. Dollar, compared to negative currency movement in the third quarter of 2023.

The net foreign exchange gain in the first nine months of 2024 was $4.7 million, compared to a loss of $3.4 million in the first nine months of 2023.

Total Shareholders’ Equity

Total shareholders’ equity at September 30, 2024 was $651.6 million, compared to $540.5 million at December 31, 2023. The movement in total shareholders’ equity during the quarter and nine months ended September 30, 2024 is illustrated below:

Book value per share was $14.71 at September 30, 2024, reflecting growth of 18.6% over book value per share of $12.40 at December 31, 2023.

* Common shares issued and outstanding as at September 30, 2024 are as follows:

International General Insurance Holdings Ltd.

Non-GAAP Financial Measures

In presenting IGI’s financial results, management has included and discussed certain non-GAAP financial measures. We believe that these non-GAAP measures, which may be defined and calculated differently by other companies, help to explain and enhance the understanding of our results of operations. However, these measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP.

Reconciliation of Combined Ratio to Accident Year Combined Ratio Prior to CAT Losses

The table below illustrates the reconciliation of the combined ratio on a financial and accident year basis.

International General Insurance Holdings Ltd.

Non-GAAP Financial Measures

The table below illustrates the split of loss ratio between current accident year, current year CAT losses, which are included in ‘Net loss and loss adjustment expenses’, and prior years’ loss development as follows:

Core Operating Income

Core operating income measures the performance of our operations without the influence of after-tax gains or losses on investments and foreign currencies and other items as noted in the table below. We exclude these items from our calculation of core operating income because the amounts of these gains and losses are heavily influenced by, and fluctuate in part according to, economic and other factors external to the Company and/or transactions or events that are typically not a recurring part of, and are largely independent of, our core underwriting activities and including them distorts the analysis of trends in our operations. We believe the reporting of core operating income enhances an understanding of our results by highlighting the underlying profitability of our core insurance operations. Our underwriting profitability is impacted by earned premiums, the adequacy of pricing, and the frequency and severity of losses. Over time, such profitability is also influenced by underwriting discipline, which seeks to manage the Company’s exposure to loss through favorable risk selection and diversification, IGI’s management of claims, use of reinsurance and the ability to manage the expense ratio, which the Company accomplishes through the management of acquisition costs and other underwriting expenses.

In addition to presenting net income for the period determined in accordance with U.S. GAAP, we believe that showing “core operating income” provides investors with a valuable measure of profitability and enables investors, rating agencies and other users of our financial information to analyze the Company’s results in a similar manner to the way in which Management analyzes the Company’s underlying business performance.

International General Insurance Holdings Ltd.

Non-GAAP Financial Measures

Core operating income is calculated by the addition or subtraction of certain line items reported in the “Consolidated Statements of Income” from net income for the period and tax effecting each line item (resulting in each item being a non-GAAP measure), as illustrated in the table below:

The Company has posted a Third Quarter 2024 investor presentation deck on its website at www.iginsure.com in the Investors section under the Presentations & Webcasts tab.

About IGI:

IGI is an international specialty risks commercial insurer and reinsurer underwriting a diverse portfolio of specialty lines. Established in 2001, IGI has a worldwide portfolio of energy, property, general aviation, construction & engineering, ports & terminals, marine cargo, marine trades, contingency, political violence, financial institutions, general third-party liability (casualty), legal expenses, professional indemnity, D&O, marine liability and reinsurance treaty business. Registered in Bermuda, with operations in Bermuda, London, Malta, Dubai, Amman, Oslo, Kuala Lumpur and Casablanca, IGI aims to deliver outstanding levels of service to clients and brokers. IGI is rated “A” (Excellent)/Stable by AM Best and “A-”(Strong)/Stable by S&P Global Ratings. For more information about IGI, please visit www.iginsure.com.

Forward-Looking Statements:

This press release contains “forward-looking statements” within the meaning of the “safe harbour” provisions of the Private Securities Litigation Reform Act of 1995. The expectations, estimates, and projections of the business of IGI may differ from its actual results and, consequently, you should not rely on forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” “commitment,” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements contained in this press release may include, but are not limited to, our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, the outcome of our strategic initiatives, our expectations regarding other market conditions, and our growth prospects. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside of the control of IGI and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) changes in demand for IGI’s services together with the possibility that IGI may be adversely affected by other economic, business, and/or competitive factors globally and in the regions in which it operates; (2) competition, the ability of IGI to grow and manage growth profitably, and IGI’s ability to retain its key employees; (3) changes in applicable laws or regulations; (4) risks related to fluctuations in global currencies including the UK Pound Sterling, the Euro, and the U.S. Dollar; (5) the outcome of any legal proceedings that may be instituted against the Company; (6) the effects of the war between Russia and Ukraine; (7) the effects of the hostilities between Israel, Hamas, Hezbollah, and Iran; (8) the inability to maintain the listing of the Company’s common shares on Nasdaq; and (9) other risks and uncertainties indicated in IGI’s filings with the SEC. The foregoing list of factors is not exclusive. In addition, forward-looking statements are inherently based on various estimates and assumptions that are subject to the judgment of those preparing them and are also subject to significant economic, competitive, industry and other uncertainties and contingencies, all of which are difficult or impossible to predict and many of which are beyond the control of IGI. There can be no assurance that IGI’s financial condition or results of operations will be consistent with those set forth in such forward-looking statements. You should not place undue reliance upon any forward-looking statements, which speak only as of the date made. IGI does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based except to the extent that is required by law.

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