IGI, 2Q2020: Net profit after tax increased to USD 12 million

19 August 2020 — press.release
International General Insurance (IGI) ended the second quarter of 2020 with a net profit (after tax) of USD 12 million, 43% higher year-on-year.

Core operating income was USD 10.3 million for the quarter ended June 30, 2020 (2Q2019: USD 8.5 million). The increase in core operating income during the second quarter of 2020 was primarily the result of the lower combined ratio, which was 6.4 points better in 2Q2020 when compared to 2Q2019.

Core operating return on average equity (annualized) was 11.6% for the quarter ended June 30, 2020 (2Q2019: 10.8%).

IGI 2Q2020 preliminary figures, y-o-y changes

  • Gross written premiums: USD 137.3 million (+29%)
  • Net underwriting profit: USD 23.0 million (+61%)
  • Combined ratio: 84.0% (+6.4 pp.)
  • Net investment income: USD 2.2 million (-39%)
  • Return on average equity: 11.6% (+0.8 pp.)
  • Net profit after tax: USD 12.0 million (+43%)

Gross written premiums were USD 137.3 million for the quarter ended June 30, 2020, an increase of 29.2% (2Q2019: USD 106.3 million). The increase in gross written premiums during the quarter was the result of new business generated across virtually all lines, as well as improved renewal pricing.

Claims and claims expense ratio was 48.1% for the quarter ended June 30, 2020 (2Q2019: 52.5%). The claims and claims expense ratio included current accident year net catastrophe losses of USD 1.8 million, or 2.6 points, for the quarter ended June 30, 2020. Favorable development on loss reserves from prior accident years was USD 1.2 million or 1.7 points for the quarter ended June 30, 2020 (2Q2019: unfavorable development of USD 5.4 million or 9.9 points).

Investment results for the second quarter of 2020 showed some positive recovery in mark-to-market and foreign currency adjustments from the impact of market turbulence related to the COVID-19 pandemic during the first quarter of 2020. The fixed income and equity portfolios both benefitted by USD 7.5 million and USD 1.3 million, respectively, during the second quarter of 2020. The combined benefit of foreign currency and investment valuation recoveries during the second quarter of 2020 was USD 12.0 million to Shareholders' Equity at June 30, 2020.

Including an unrealized mark-to-market gain of USD 1.0 million, total investment income was USD 4.7 million during the second quarter of 2020 (2Q2019: USD 3.7 million). Excluding realized and unrealized gains and losses, total investment income, net, was USD 2.2 million for the quarter ended June 30, 2020 (2Q2019: USD 3.6 million) and resulting net investment yields were 1.4% for the second quarter of 2020 (2Q2019: 2.8%).

Cash, cash equivalents and term deposits totaled USD 318.7 million at June 30, 2020, representing just under 46.5% of the total investment and cash portfolio (2Q2019: USD 312.2 million / 51.3%).

WasefJabsheh, IGI Chairman and CEO, said:

"We are very pleased with our strong performance in the second quarter and first half of 2020, particularly as we, along with the rest of the world, continue to navigate the effects of the COVID-19 pandemic. While we are hearing and reading of new lockdown measures in some of the jurisdictions where we operate, our view of the financial impact of the COVID-19 pandemic on IGI currently remains unchanged. (...)

I am very proud of all our IGI colleagues whose hard work, focus and commitment over the past several months have enabled us to continue to execute our strategy seamlessly, while delivering excellent service to our clients and partners."

More financial information about International General Insurance (IGI) can be found at www.iginsure.com/investors

Source: iginsure.com

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