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Operator: Good day, and welcome to the International General Insurance Holdings Ltd.’s First Quarter 2025 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Robin Sidders, Head of Investor Relations. Please go ahead.

Robin Sidders: Thanks, Scott, and good morning, and welcome to today’s conference call. Today, we’ll be discussing our first quarter 2025 results. We issued our press release last night, which you would have seen after the market closed. If you’d like a copy of the press release, its available in the Investors section of our website. We also posted a supplementary investor presentation, which can also be found on our website on Presentations page in the Investors section. On today’s call are Executive Chairman of IGI, Wasef Jabsheh; President and CEO, Waleed Jabsheh; and Chief Financial Officer, Pervez Rizvi. As always, Wasef will begin the call with some high-level comments before handing over to Waleed to talk you through the key drivers of our results for the first quarter and finish up with our views on market conditions and our outlook for the rest of the year.

At that point, we’ll open the call up for Q&A. I’ll begin with the customary Safe Harbor language. Our speakers’ remarks may contain forward-looking statements. Some of the forward-looking statements can be identified by the use of forward-looking words. We caution you that such forward-looking statements should not be regarded as a representation by us that the future plans estimates or expectations contemplated by us will in fact be achieved. Forward-looking statements involve risks, uncertainties, and assumptions. Actual events or results may differ materially from those projected in the forward-looking statements due to a variety of factors, including the risk factors set forth in the company’s annual report on Forms 20-F for the year ended December 31st, 2024.

The company’s reports on Form 6-K, and other filings with the SEC, as well as our results press release issued yesterday evening. We undertake no obligation to update or revise publicly any forward-looking statements, which speak only as of the date they are made. During this call, we use non-GAAP financial measures. For a reconciliation of non-GAAP financial measures to the nearest GAAP measure, please see our earnings release, which has been filed with the SEC and is available on our website. With that, I will turn the call over to our Executive Chairman, Wasef Jabsheh.

Wasef Jabsheh: Thank you, Robin and good day everyone. Thank you for joining us on today’s call. As you saw from our first quarter results that we issued last night, we had a relatively good start to 2025 in spite of significantly elevated loss environment as well as macroeconomic uncertainty and much volatility. Our combined ratio of 94.4% clearly demonstrates the value of our diversification strategy and the resilience that we have built in our company. While we experienced significant volume of market losses this quarter for the first time in many quarters, we continue to deliver excellent value for our shareholders. For the second consecutive year, we paid a special dividend during the first quarter this year of $0.85 and in total, returned $43.5 million to shareholders during this period.

The events of the first quarter once again underscore why we exist. We are here to provide peace of mind in times of uncertainty. That is our purpose. We are paid to assume volatility, and we are strategically positioned to absorb it and mitigate it as much as possible for our clients and customers. At IGI, we have built a very solid platform that is designed to manage market cycles and the volatility that is the nature of our business. We have deep technical underwriting talent people who understand the dynamics of their business, who stay close to their markets and respond quickly to changes as they are okay. Our track record demonstrates our ability to maintain our discipline, execute consistently and move our capital to those areas with the strongest rate momentum and the highest margins, while always working with our risk appetite and tolerances.

I am comfortable and confident with the foundation we have at IGI to continue to deliver on our promises, not just to be stable and reliable partner to our clients and customers, but to generate good value for our shareholders over the long-term. I will now let Waleed discuss the numbers in more detail and talk about market conditions and our outlook for the year ahead. I’ll remain on the call for any questions at the end.

Waleed Jabsheh: Thank you, Wasef. Good morning, everyone, and thanks for joining us today’s call. As Wasef have noted, it’s definitely been an eventful start to the year for our industry with the significantly elevated loss activity, economic, financial market volatility and of course, the rising global tension — geopolitical tensions across many areas across the globe. Now, more than ever, the promises we’ve made to our stakeholders ring true and our purpose of providing peace of mind in times of uncertainty comes sharply into focus. Our structure and strategy at IGI is especially valuable when considered in the context of the current uncertainty and our long-term perspective. We’ve said many times that we’re not a quarter-to-quarter or even a year-to-year company.

We are here for the long haul and we’ve demonstrated our ability to navigate uncertainty and volatility many times in our history. And now is no different. We will protect our portfolio, find opportunities where we can and remain committed to servicing our clients and customers as best as we can, whilst generating the best value we can for our shareholders. On a side note, I mean, recently, we’ve had the privilege of watching the London Marathon through the streets of our city. I’m not a runner myself, but it occurred to me that what we do with IGI is very much like how a runner prepares for a marathon. They train for months, often years. They maintain a high level of discipline, strong will, and consistency in how they prepare so they can endure through any conditions when the time comes.

They stay focused and they avoid distraction. And when Marathon day arrives, they go out and they get the job done. Our business takes discipline, planning, and strong execution. It also takes a lot of patience. We stay focused on the road ahead so that we’re fully prepared when our clients need us most. It’s easy to sometimes forget just how risky the world is when we have prolonged periods without intense loss activity as we’ve had in recent years. So, the events of the first quarter certainly serve as a stark reminder for our industry, why we do what we do and why it’s absolutely critical we stay focused. Our financial results were solid in Q1 even with a higher level of natural catastrophes. We’ve had the L.A. wildfires, of course, and other global cat events as well as a generally higher level of large risk losses.

in the specialty lines we write, notably energy and property. These lines, as you’re all aware, are by nature, higher in severity. In addition to significant volatility in financial markets and a general sense of uncertainty, we also saw a heightened foreign exchange volatility. Some degree of currency volatility has been a regular feature in our financial results. And at times, it can be further amplified when the U.S. dollar, our reporting currency weakens against our major transactional currencies, the pound in particular. And we saw that in the first quarter. So, definitely some noise in our numbers and where relevant, I’ll point out currency impacts in our key metrics. From a top line perspective, we grew GWP by over 13% to just over $206 million, and this was primarily driven by growth in the reinsurance segment.

And that’s where we continue to take advantage of a healthy positive rating environment. Net earned premium was just under $113 million, and that included a charge of $7.3 million of retained premiums paid on the loss-affected accounts to our reinsurers. And that was split between short and long tail — between the short and long-tail segments. I’d just remind you that we are active buyers of reinsurance to protect against volatility in the high severity lines of business that we write. The combined ratio of 94.4% reflects the higher level of losses as well as the lower volume of net earned premium as a result of the reinstating premiums I just mentioned and the impact that had on the net earned numbers. In addition as well as approximately 10 points of currency revaluation impact on non-U.S. dollar reserves.

So, here, the comparison to Q1 of 2024 is somewhat exaggerated by the impact of currency where Q1 2025 was negatively impacted, while the Q1 2024 combined ratio benefited from approximately 4 to 5 points of currency revaluation. So, on a like-for-like basis, we’re talking about quarter-over-quarter deterioration in combined ratio of about 6 to 7 points rather than the 20 points that we see on the numbers. I mean it’s never an exact science, obviously, but this just helps to illustrate the impact that currency plays. All-in, we delivered net income of $27.3 million or $0.59 per share versus $37.9 million or $0.84 per share in Q1 of 2024. And again, this was due to a lower level of underwriting income impacted by the loss activity, higher level of — and the higher level of net reinstatement premiums paid on the losses that we’ve incurred.

Core operating income was $19.5 million or $0.42 per share compared to $40 million or $0.89 per share, again, for the same reasons of the lower level of underwriting income, heightened loss and the heightened losses specifically added 25 points of current accident year or included 25 points of current accident year cat losses. Cat losses during the quarter included the California wildfires, as we mentioned earlier, earthquakes in Taiwan and to a lesser extent, a canal breach due to severe flooding here in the U.K. These events impacted both the reinsurance and short-tail segments. In addition, we experienced a higher volume of large risk losses in our short-tail segment and an aggregation of small and medium-sized losses in our long-tail segment.

I would note that the heightened loss activity we experienced in the first three months doesn’t appear to be any — the result of anything systemic that we’re seeing. Prior year development was favorable in the quarter by $25.8 million. And again, this is where we see the impact of currency movements. The net positive development was primarily driven by positive experience in recent years in the short-tail segment, primarily in the property and energy lines, both international and U.S. and to a lesser extent, the reinsurance segment as well. This was partially offset by some negative development in the long-tail segment. Here, the negative prior year development was inflated by around $6.5 million and $8 million overall, including Q1, all a part of the currency revaluation.

As you’re aware, that business is largely transacted in pound sterling, where the short tail and reinsurance segments are predominantly transacted in U.S. dollars or dollar-pegged currencies. And I’ll talk about — a little bit more about the long-tail segment in a moment. G&A expense ratio showed marginal improvement to 19.1% from 19.5% for the same period of last year. And we expect that given the substantial growth of the previous three years, an expense ratio in the region of 18% to 19% is a more reasonable go-forward rate. Some comments on our segment results. If we start with the short-tail segment, gross premiums were up 2% in Q1. Earned premium was down 5.3% when compared to the same quarter last year, reflecting the impact of resale premiums on our reinsurance purchases, as mentioned previously.

Consequently, underwriting income was also down in the first quarter. driven largely by the higher level of losses and again, the reinstate of premiums. We continue to see business opportunities in a number of lines, specifically contingency, ports and terminals, marine cargo and to a lesser degree, property lines. We have — we’ve mentioned this on prior calls, I would also single out our engineering portfolio, which is doing extremely well and has grown significantly in the first quarter versus the Q1 of 2024. Our teams are capitalizing on opportunities in the U.S. across the MENA region and Asia-Pac regions. The reinsurance treaty segment, as you all know, is well diversified, both by geography and by underlying business lines, showed very positive top line growth of almost 44%, driven by new business.

The new business generated at 1/1 and throughout the quarter was mostly in our specialty treaty book, predominantly covering marine, energy, PV and to a lesser extent, property. While rates at 1/1 were broadly off peak by about 10% to 15%, as we said on last quarter’s call, the new business still benefited from strong rating adequacy and earned premium and underwriting income were up 48% and 53%, respectively. Long tail segment definitely remains the most challenging area of our portfolio. and this was clear again in the first quarter. Premiums were up slightly, a couple of million dollars in the first quarter, driven by essentially new marine liability business in the aftermath of the Baltimore bridge collapse last year. This segment has now — has now seen several consecutive quarters of top line contraction, and we continue to be very cautious and disciplined in risk selection here as rates continue to decline, although the pace of that decline has slowed somewhat.

We recorded an underwriting loss of $7.5 million versus an underwriting profit of around $10 million in Q1 last year. And this is driven by a number of factors. First, there’s the higher level of loss activity, including aggregation of smaller losses. Secondly, the impact of FX, which is most pronounced on this — in this segment and which elevated losses by around $8 million. And third, the impact of reinstatement premiums. I would note here, too, that we are reviewing one area of the PI portfolio, which we’re not very pleased with the performance of, and we may opt to discontinue going forward. Again, nothing really systemic that we’re seeing. If we turn to the balance sheet, total assets increased by almost 3% to $2.1 billion. Total investments in cash was $1.3 billion.

allocations to fixed income securities which makes up around 80% of our investments in cash portfolio generated $13.6 million in investment income, an increase of around — of more than 15% from Q1 of 2024 with a yield of 4.3%. And we also hedged out the duration slightly to 3.4 years during Q1 just to lock in higher rates on new bonds. In Q1, we repurchased almost 160,000 common shares, average price per share of $23.8 — as of the end of Q1, this leaves approximately 2.1 million shares outstanding or remaining under our existing 7.5 million share — $7.5 million repurchase authorization. Total equity was just over $650 million at the end of the quarter, and that included the impact of share repurchases and the payment of about just under $40 million in common share dividends, including the special dividend, as Wasef mentioned of $0.85 earlier this year.

This compared to total equity of just under $655 million at the end of 2024. Ultimately, we recorded a return on average shareholder equity of 16.7% for Q1. Book value per share was $14.65. From a total return perspective, book value per share plus dividends increased by 4.5% at the end of Q1 from end of last year, and we returned $43.5 million to shareholders in share repurchases and dividends in the first quarter. So, as I said at the outset, a relatively good quarter for IGI, notwithstanding all the moving pieces and generally tougher market conditions. What our results demonstrate is not only the resilience of the portfolio we’ve built, but also the value of our diversification strategy and the excellent and experienced teams we have. Looking ahead, I’m confident that we can continue to find good opportunities to write new business across many lines within our portfolio.

On the flip side of the equation, obviously, is some contraction in top line we are seeing and may continue to see in other areas of our portfolio where profitability and our coverages just don’t meet our thresholds. Again, our diversified strategy gives us more optionality and more levers to work with. And our on-the-ground presence in international markets really does make a difference to us in seeing emerging trends and responding quickly and decisively. I mean these markets are becoming stronger and more relevant and their ability and desire to retain more business locally within their markets is growing, and we definitely benefit from being on the ground in all these locations. Specifically on what we’re seeing in our markets, I mean, there’s no doubt there’s clearly a heightened degree of competitive pressure.

If we start with the long-tail segment, I mean, overall, net rates remain adequate in many areas despite several consecutive quarters of decline. There’s no doubt our margins are getting squeezed, and we continue to see some signs of rates — but we continue to see some signs of rates stabilizing, not broad stabilizations, but in some areas. An example is parts of our PI portfolio where the pace of the rate decline is slowing and the book overall is still rate adequate. I noted earlier that we’re reviewing an area of the PI portfolio and just with any underperforming part of the business, we’re prepared to walk away if things don’t improve. Our outlook on short tail lines continues to be fairly stable, in line with prior quarters, although the market is definitely becoming tougher.

These lines are becoming increasingly competitive, and this is putting pressure on rates, as we all know. The loss events of the first quarter, particularly the cat events, unfortunately, don’t appear to have had much impact on market conditions in any specific areas, and we continue to see more intense competition. Our construction and engineering book, as I noted a few moments ago, as well as parts of our property portfolio, marine lines, contingency, I think, will continue to present us with the most opportunities. In the reinsurance segment, we’ve renewed about two-thirds of our treaty book in the first three months of the year. and another 10% or so at the beginning of April with the rest of the book renewing over the remainder of the year.

We continue to see opportunities for new business that fall within our risk tolerances, and I expect that, that will continue throughout the remainder of the year. In the first quarter, new business in this segment was more heavily weighted towards specialty treaty business, which is pretty geographically well diversified across the U.S. and the international markets. Reinsurance markets are continuing to be from what we’re seeing relatively disciplined from a structure, from a terms and wordings perspective, though pricing pressure is continuing. And it may be off probably around 15 to 20 points by the year — by the end of the year from the 10 to 15 points we said at the start of 2025. I mean we’re continuing to see carriers pushing hard to build market share, especially the bigger players.

And this is obviously only adds to the rating pressure. In our geographical markets, U.S. has been the biggest growth area for us, and we expect that will continue. It will continue to be one of the markets with the greatest opportunity for us to write new business. And that is essentially where we are most underweight. But given that this is where the most competition is and higher concentration of cat exposed risk, we are as with anything else, taking a more cautious approach, always being mindful of our risk appetite and risk tolerances. We noted on last quarter’s call that there is a lower volume of business finding its way to the open market in London, which is where we write most of our U.S. portfolio. The U.S. domestic players are retaining greater shares on their business.

Nevertheless, there is still room for us to grow here, no doubt, but both in our specialty treaty book and in short-tail lines. And as we’ve said many times, we don’t write any casualty business in the U.S. and have no desire to start. Europe always remains a growth area for us, and the story is similar in the Middle East, North Africa, and Asia-Pac regions. And as mentioned earlier, our expanded presence and capabilities on the ground in these areas are paying benefits. So, before we open the call up for questions, just some final thoughts from my end. Like I said at the start of the call, we’re fully prepared for these headwinds, along with our fully unlevered balance sheet, our underwriting portfolio is diversified on many levels, and we have the right infrastructure with the right people and the capabilities.

We are close to our markets, and we communicate well with each other. This is the strong foundation that allows us to effectively manage all stages of the market cycle. So, we’ll continue to do what we always do to stay focused to execute well and to execute with discipline. This is how we’ve built the successful track record that we have for more than two decades now, and this is how we will continue to do so. So, I’m going to pause right there, and we’ll turn it over for questions. Operator, we’re ready to take the first question, please.

Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Michael Phillips from Oppenheimer. Please go ahead.

Waleed Jabsheh: Michael, are you there? Operator, are you there?

Operator: Yes, I am.

Robin Sidders: Did Mike disconnect?

Operator: He must have. [Operator Instructions] Our next question comes from Nick Iacoviello from Dowling Partners. Please go ahead.

Nick Iacoviello: Thanks for taking my questions. You had called out the development on a particular area of the professional indemnity portfolio. I was wondering, is that a similar area that underwent some remediation efforts in the third quarter of 2024? Or is that a different part of the book? Just any color there would be helpful.

Waleed Jabsheh: No, it’s a similar area, Nick. I mean we’ve been keeping an eye on this portfolio for quite some time now. So, it’s not performing exactly like we wanted to. And again, nothing systemic though and something we’re reviewing closely and could very much shut down at some point this year.

Nick Iacoviello: Got it. Is there a specific — right, because that book is predominantly U.K. E&O. Is there a specific underlying class there that is causing the issue? Or is there any other color around it?

Waleed Jabsheh: No, it is all U.K. and it just forms part of the portfolio. It’s a segment that we’ve identified that doesn’t really — is not really stacking up the way we want it to.

Nick Iacoviello: Okay, that’s all I had. Thank you.

Operator: Our next question comes from Michael Phillips from Oppenheimer. Please go ahead.

Michael Phillips: Hey good morning. Can you guys hear me now?

Waleed Jabsheh: Yes, yes, we can hear you.

Michael Phillips: Okay. Good. Sorry about that. I don’t know what that was. Thanks for the patience and thanks for the time. I guess I wanted to go through, Waleed, your comments on — obviously, a lot of moving parts with the cats and the reinstatement premium and the FX. But the combined ratio deterioration around 20 points. You mentioned when you back out the FX, it was more like 6 to 7. I think the 20 points and the PowerPoint said back out 10, so that gets you to around 10 points. I just wanted to clarify that. And we can take this offline if need be. But I guess really what I wanted to say — to ask was if we can clarify that is, if you look at the current accident year loss ratio, it’s up around 4.5 or 4.6 points or so. Can you talk about that by segment and where you’re seeing most of that? And I guess, going forward, is kind of that mid-50s kind of a good run rate for this year, do you think? Thanks.

Waleed Jabsheh: Yes. No, thanks for the questions, Mike. The comment about the combined ratio and a 6 7-point difference is when you compare Q1 of this year and the impact that the currency movements had on this year’s numbers against Q1 of last year and the impact that the currency movements had on the numbers of Q1 last year. This year, the pound strengthened. And so that’s impacting negatively our revaluation of reserves. In Q1 of 2024, the pound weakened, and that impacted positively our revaluation of reserves. So, if you sort of — again, as I said on the call, it’s never an exact science, but we run the exercise because it does impact us more than your typical U.S. listed company. When you take all that noise away, this year’s combined ratio would have been lower by about 10 points.

Q1 of 2024 combined ratio would have been higher by about 4 or 5 points. And then that the difference when you then compare apples-to-apples, if you want to call it that, right, is that 6 to 7 points that you asked about and questioned. So in true actuality, in reality, the difference between the performance of Q1 2024 and Q1 2025 is not as vast as the numbers point out. In terms of the current year accident loss ratio, I mean, a lot of that was in the reinsurance and the short-tail segments. We mentioned the California fires, which pretty much mostly impacted our reinsurance segment. And then you had some cat losses in the — within the short-tail segment as well as some large risk losses, especially on the onshore energy side. It was just one of those quarters where loss activity was higher.

And we’ve always said we will have these quarters, we’ve had a fantastic run of relatively manageable volatility. And this quarter wasn’t bad. I wouldn’t call it was a bad quarter. It was just the losses happened to occur in Q1, and it’s only Q1, and we’ll continue plowing through for the rest of the year.

Michael Phillips: Okay. Thank you. I guess it’s just the comment is just hard to — you talk about the impact of FX and the 6 or 7 points on an apples-to-apples. But on the loss ratio, it’s kind of hard to see where that is. So it just makes it a little confusing. That’s just a comment, I guess. Let’s fill on the topic of tariffs. When we talk here in the United States, it’s all about impacts on personal auto and physical damage and some homeowners and property. And you guys clearly have some property exposure. But I guess I was thinking more on any comments you might have, what impacts tariffs may have on your marine business, on your port business and things like that. Have you seen anything yet? Do you expect to see anything? And if so, what might that look like on those businesses, if anything at all?

Waleed Jabsheh: I mean we haven’t seen anything yet. I think the business that we are in, the tariff situation is not going to have much or a significant impact. I mean, it might impact cargo values, obviously, and thus premiums might go up as a result. But in terms of any sort of challenges that it creates or obstacles that it creates for the underwriting of our portfolios and management of our exposures, we don’t see it and have not seen anything so far that would make life more difficult for us.

Michael Phillips: Okay. And then, Waleed, it sounds like you’re — despite rates down 5% to 10% in reinsurance and maybe going to 15% as the year progresses, you’re still positive on rate adequacy and still positive on growth opportunities in reinsurance despite a softening rate environment there?

Waleed Jabsheh: Yes, I mean you’ve got to — I think — I mean, we’ve always — we talk about rate movements, we talk about rate adequacy. We’ve always said it’s not about rate movement. I mean we’ve now across many lines of business for the last five, six years, benefited from significant rate improvement. Anybody who works in this business understands and knows that, that doesn’t last and at some point, rates will stabilize and then come down. And so this is why we always say and we tell our underwriters, it’s not about rate movement. It’s all about rate adequacy. At the end of the day, if the rate is adequate, we will continue to write the business. And in many areas, the rating environment is still adequate. Yes, our rates down 100%.

Is that going to squeeze margins? 100%. It’s a simple law of numbers. But — also for us, I think that one of the advantages that we have is that in a lot of these areas, we are coming off a much lower base as well. So, our capability of growing does come a lot easier for — than it does with the larger players that have much more or significantly bigger portfolios. And we can choose to be selective. Listen, at the end of the day, we all have — the ambition is always to grow and maybe the market moves around a bit depending on what happens throughout the rest of the year. Our aim will always to go out there and fight and find the business that we want to write. If we can’t and if we — or if we find it and it’s not at the levels that are acceptable to us, we won’t write it.

And if we have to shrink in sight, then we will. I would point out, I mean, Q1 showed good growth overall, but that was more on the reinsurance side. You saw the growth in short tail and long tail was practically none, very marginal. And as you know, Q1 is a very heavy reinsurance renewal quarter. So, I would make clear that the growth that was achieved in Q1 should not be taken as an indication of what can be achieved for the rest of the year.

Michael Phillips: Okay. No, thank you. Thanks for that. I guess lastly, just one specific segment to see if there’s any changes in your commentary. It’s been over a year that you’ve been negative on this market, and there’s been lots of losses. I don’t know if that’s changed at all. Does the outlook for aviation for you change this year at all?

Waleed Jabsheh: I mean to be — I mean, aviation, I think, is still extremely challenging. our book has reduced significantly. But last year, the aviation book had a very solid profitability and Q1 this year, the same. We’ve got a good team of underwriters. We’re cutting the book back, writing the business that we’re comfortable with, sticking to the business that we’re comfortable with and letting go of the business that we’re not. There are a lot of people out there doing very silly things within this business line, but we’re not playing that game. And our results in the line so far, I mean, have not shown or given any signal that we should be exploring a change of heart with this business line. It’s performing quite well actually.

Michael Phillips: Okay. No, good. Thank you for that Waleed and thanks for everything else. Have a good day.

Waleed Jabsheh: Thank you. Thanks Miki. You too.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

Waleed Jabsheh: Just a quick thank you really for joining us all today and thank you for your continued support. As always, if you’ve got any questions, please contact Robin and she’ll be happy to help. And we look forward to speaking to you all on next quarter’s call. Have a good day.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.