International General Insurance Holdings Ltd. (“IGI” or the
“Company”) (NASDAQ: IGIC) today reported condensed and unaudited
financial results for the fourth quarter and full year 2020.
Highlights for the fourth quarter and full year 2020
include:
(in millions of U.S. Dollars, except
percentages and per share information)
Quarter Ended December
31,
Year Ended December
31,
2020
2019
2020
2019
Gross written premiums
% growth
$129.5
45.3%
$89.1
$467.3
33.8%
$349.2
Net premiums earned
$73.9
$58.1
$283.5
$215.5
Net underwriting results
$14.7
$10.4
$77.4
$52.0
Total investment income, net
(1)
$3.4
$2.7
$11.5
$11.1
Profit for the period
$10.9
$4.3
$31.6
$23.6
Combined ratio (2)
96.8%
101.0%
89.3%
94.1%
Earnings per share (Basic and
Diluted)(3)
$0.22
$0.13
$0.69
$0.69
Return on average equity
(annualized) (4)
11.3%
5.5%
9.0%
7.7%
Core operating income (loss)
(4)
$4.2
($0.1)
$34.1
$21.2
Core operating earnings per share
(4)
(Basic and Diluted)
$0.09
-
$0.74
$0.62
Core operating return on average
equity
(annualized) (4)
4.4%
(0.1%)
9.6%
6.9%
(1)
See Note (1) in the “Notes to the
Condensed Consolidated Financial Statements (Unaudited)” below.
(2)
See “Supplementary Financial Information”
below.
(3)
See Note (3) in the “Notes to the
Condensed Consolidated Financial Statements (Unaudited)” below.
(4)
See the section titled “Non-IFRS Financial
Measures” below.
IGI Chairman and CEO Mr. Wasef Jabsheh said, “2020 has been a
successful year for IGI on many levels. Our strong financial
performance, achieved during a year of significant distraction and
disruption as well as during our first year as a public company
trading in the U.S., clearly demonstrates the agility, discipline
and focus of our teams and our ability to execute and deliver on
our strategy.”
“We broadened our footprint by entering new territories and
lines of business and increased our market share, with gross
premiums up more than 33% in 2020 compared to 2019, while
maintaining underwriting profitability at a combined ratio below
90%. We expect to continue on this path in 2021, although likely at
a more measured pace, and with the same careful approach to risk
selection and portfolio balance.”
“With the first quarter of 2021 almost completed, the
indications on price momentum remain very positive, and we are
continuing to see exciting opportunities to build and diversify our
business. We will continue to be cautious in managing our net
exposures to minimize our overall risk profile so that we maintain
our long-term track record of generating strong value for our
shareholders.”
Results for the Quarters and Years ended December 31, 2020
and 2019
Net profit for the quarter ended December 31, 2020 was $10.9
million, up from a net profit of $4.3 million for the quarter ended
December 31, 2019. Net profit for the year ended December 31, 2020
increased significantly to $31.6 million compared to a net profit
of $23.6 million for the prior year.
Core operating income, a non-IFRS measure defined below, was
$4.2 million for the fourth quarter of 2020 compared to a core
operating loss of $0.1 million for the comparable quarter in 2019.
Consequently, core operating return on average equity (annualized)
was 4.4% for the quarter ended December 31, 2020, compared to
(0.1%) in the same period of 2019.
The increase in core operating income to $34.1 million for the
year ended December 31, 2020 compared to $21.1 million for the year
ended December 31, 2019, was primarily the result of a higher level
of underwriting income during 2020. While total equity increased by
26.4% due to the capital injection from the Business Combination
with Tiberius Acquisition Corp. (“Tiberius”) as well as growth in
retained earnings during the year, core operating return on average
equity also increased to 9.6% for the year ended December 31, 2020
compared to 6.9% for the same period in 2019.
Underwriting Results
Gross written premiums were $129.5 million for the quarter ended
December 31, 2020, an increase of 45.3% compared to $89.1 million
for the quarter ended December 31, 2019. For the year ended
December 31, 2020, gross written premiums were $467.3 million, up
33.8% compared to $349.2 million for the year ended December 31,
2019. The increase in gross written premiums was the result of new
business generated across virtually all lines, as well as improved
renewal pricing. While market conditions remained positive, the
Company also continued to further refine its existing portfolio,
achieving improved terms and conditions.
The claims and claims expense ratio was 59.8% for the quarter
ended December 31, 2020, an improvement of 2.7 points over the
corresponding quarter in 2019. This included current accident year
net catastrophe losses of $6.3 million or 8.5 points for the
quarter ended December 31, 2020, compared to $8.3 million or 14.3
points for the quarter ended December 31, 2019. Prior year
development on loss reserves was unfavorable amounting to $5.4
million or 7.3 points for the quarter ended December 31, 2020
driven by deterioration in prior year loss reserves in both the
Long-tail and Short-tail segments which were impacted by foreign
exchange, specifically the strengthening of the Pound Sterling, the
Company’s major transactional currency, against the U.S. Dollar.
This compares to favorable development of $1.7 million or 3.0
points for the quarter ended December 31, 2019. Catastrophe losses
during the fourth quarter of 2020 were driven primarily by
Hurricane Laura, a Category 4 storm which caused significant damage
in the mid-western U.S., and is included in the Short-tail
Segment.
The claims and claims expense ratio was 53.5% for the year ended
December 31, 2020, an improvement of 1.3 points compared to the
year ended December 31, 2019. This included current accident year
net catastrophe losses of $13.5 million or 4.8 points for the year
ended December 31, 2020, compared to $16.2 million or 7.5 points
for the year ended December 31, 2019. Catastrophe losses for the
year ended December 31, 2020 were driven primarily by the storms
that damaged cranes at the Jawaharlal Nehru port in Mumbai, India
and property damage and business interruption losses resulting from
Hurricane Laura, both of which are included in the Short-tail
Segment. Favorable development on loss reserves from prior accident
years for the year ended December 31, 2020 was $6.1 million or 2.2
points, reduced by the impact of foreign exchange, specifically the
strengthening of the Pound Sterling, the Company’s major
transactional currency, against the U.S. Dollar. This compares to
favorable development of $6.3 million or 2.9 points for the year
ended December 31, 2019, which was also impacted by strengthening
of the Pound Sterling.
The combined ratio for the quarter ended December 31, 2020 was
96.8%, compared to 101.0% for the same quarter in 2019. The
combined ratio for the year ended December 31, 2020 improved 4.8
points to 89.3% compared to 94.1% for the same period in 2019,
primarily due to the benefit of increased pricing per unit of
exposure.
Segment Results
The Long-tail Segment, which represented approximately
43% of the Company’s gross written premiums for the full year 2020,
includes all professional and financial lines written by the
Company, including D&O, professional indemnity, financial
institutions, legal expenses, as well as surety, marine liability,
and general third-party liability (casualty), all of which are
non-U.S. exposures.
Net written premiums for the quarter ended December 31, 2020 in
the Long-tail Segment were $47.6 million, compared to $37.2 million
in the comparable quarter in 2019, primarily driven by growth in
the financial and professional lines. The net underwriting result
for this segment was a loss of $2.4 million for the fourth quarter
of 2020, driven by higher incurred losses in financial and
professional lines, compared to a profit of $4.7 million in the
fourth quarter of 2019.
Net written premiums for the year ended December 31, 2020 in the
Long-tail Segment were $164.3 million, compared to $119.9 million
in the comparable period in 2019 driven by growth in the financial
and professional lines. The net underwriting result for this
segment increased by $7.1 million to $23.5 million for the full
year 2020, compared to $16.4 million for the full year 2019, again
driven by the financial and professional lines.
The Short-tail Segment, which represented approximately
53% of the Company’s gross written premiums for the full year 2020,
includes energy, property, general aviation, ports and terminals,
marine trades, marine cargo, construction and engineering, and
political violence.
Net written premiums for the quarter ended December 31, 2020 in
the Short-tail Segment were $39.7 million, compared to $22.4
million in the comparable quarter in 2019, driven by increases in
most lines, as well as the growth of the new U.S. Excess &
Surplus business. The net underwriting result for this segment was
$14.5 million for the fourth quarter of 2020, up from the $7.6
million recorded in the fourth quarter of 2019, driven by growth in
most lines in the Short-tail Segment.
Net written premiums for the year ended December 31, 2020 in the
Short-tail Segment were $154.8 million, an increase of $40.6
million compared to $114.2 million in the comparable period in
2019, primarily the result of increases in most Short-tail lines as
well growth of the new U.S. Excess & Surplus business. The net
underwriting result for this segment improved to $44.4 million for
the full year 2020, compared to $35.4 million in the full year
2019, supported by 35.5% growth in net written premiums which was
partially offset by a $ 12.7 million increase in net claims and
claims adjustment expenses driven by higher incurred losses
recorded in the Ports & Terminals, Energy, and Property lines
in the Short-tail segment.
The Reinsurance Segment, which represented approximately
4% of the Company’s gross written premiums for the full year 2020,
comprises the Company’s inwards reinsurance portfolio.
Net written premiums for the quarter ended December 31, 2020 in
the Reinsurance Segment were $2.8 million, compared to $2.9 million
in the comparable quarter in 2019. The net underwriting result for
this segment was a profit of $2.6 million for the fourth quarter of
2020, compared to a loss of $1.9 million in the fourth quarter of
2019, due to a lower level of claims and claims adjustment expenses
in the fourth quarter of 2020.
Net written premiums for the year ended December 31, 2020 in the
Reinsurance Segment were $19.3 million, compared to $18.0 million
in the comparable period in 2019. The net underwriting result
improved to $9.5 million for the full year 2020, compared to $0.2
million for the full year 2019, primarily due to a lower level of
claims and claims adjustment expenses.
Investment Results
Total investment income was $4.5 million during the fourth
quarter of 2020, compared to $2.9 million in the fourth quarter of
2019. Total investment income, net (which excludes realized and
unrealized gains and losses, expected credit losses on investments,
and the share of loss from associates) was $3.4 million and $2.7
million for the quarters ended December 31, 2020 and 2019,
respectively. This resulted in an annualized investment yield of
1.8% for the fourth quarter of 2020, compared to 1.9% for the
corresponding period in 2019.
For the full year 2020, total investment income was $8.5
million, compared to $13.0 million for the full year 2019. Total
investment income, net was $11.5 million and $11.1 million for the
full years 2020 and 2019, respectively. This resulted in an
investment yield of 1.7% for the full year 2020, compared to 2.0%
for the full year 2019.
Cash, cash equivalents and term deposits totaled $305.6 million
at December 31, 2020, representing 39.4% of the total investments
and cash portfolio, compared to $312.2 million at December 31,
2019, when it represented 51.6%. The total investment and cash
portfolio is comprised of cash, cash equivalents and term deposits
(cash portfolio), investments, investment in associates, and
investment properties.
Other
Gain on foreign exchange for the quarter ended December 31, 2020
was $6.2 million compared to $2.5 million for the fourth quarter of
2019. The gain in the fourth quarter of 2020 was primarily driven
by strengthening of the Pound Sterling, Euro and Australian Dollar
against the U.S. Dollar from September 30, 2020 to December 31,
2020, coupled with greater exposure to Pound Sterling-denominated
cash and insurance receivable balances, supported by increased
business in the Specialty Long-tail Segment when compared to the
corresponding period of 2019.
Gain on foreign exchange for the year ended December 31, 2020
was $2.5 million compared to $5.7 million for the full year 2019.
The gain in 2020 was primarily driven by strengthening of the Pound
Sterling, Euro and Australian Dollar against the U.S. Dollar from
December 31, 2019 to December 31, 2020, coupled with greater
exposure to Pound Sterling-denominated cash and insurance
receivable balances, supported by increased business in the
Specialty Long-tail Segment.
Total Equity
Total equity at December 31, 2020 was $394.6 million,
representing an increase of 26.4% compared to $312.1 million at
December 31, 2019. The movement in Total Equity during the quarter
and year ended December 31, 2020 is illustrated below:
(in millions of U.S. Dollars)
Quarter Ended December
31,
Year Ended December
31,
2020
2020
Total Equity at beginning of
period
$379.7
$312.1
Profit for the period
$10.9
$31.6
Net change in fair value reserves for
investments through other comprehensive income
$3.5
$13.9
Capital injection in connection with the
Business Combination
-
$40.8
Issuance of restricted share awards
$0.5
$0.5
Cash dividends declared during the
period
-
($4.3)
Total Equity at December 31,
2020
$394.6
$394.6
International General Insurance Holdings
Ltd.
Condensed Consolidated Statements of
Income (Unaudited)
Quarter Ended December
31,
Year Ended December
31,
(in millions of U.S. Dollars, except for
percentages and per share data)
2020
2019
2020
2019
Gross written premiums
$129.5
$89.1
$467.3
$349.2
Reinsurers’ share of insurance
premiums
($39.4)
($26.6)
($128.9)
($97.1)
Net written premiums
$90.1
$62.5
$338.4
$252.1
Net change in unearned premiums
($16.2)
($4.4)
($54.9)
($36.6)
Net premiums earned
$73.9
$58.1
$283.5
$215.5
Net claims and claim adjustment
expenses
($44.3)
($36.3)
($151.7)
($118.1)
Net Policy acquisition expenses
($14.9)
($11.4)
($54.4)
($45.4)
Net underwriting results
$14.7
$10.4
$77.4
$52.0
Net investment income (1)
$4.8
$3.4
$10.0
$13.4
Share of loss from associates (1)
($0.3)
($0.5)
($1.5)
($0.4)
General and administrative expenses
($12.5)
($11.0)
($46.9)
($39.3)
Other expenses, net (2)
($1.0)
($1.1)
($4.4)
($1.3)
Listing related expenses
-
($4.8)
($3.4)
($4.8)
Gain on foreign exchange
$6.2
$9.4
$2.5
$5.7
Profit before tax
$11.9
$5.8
$33.7
$25.3
Income tax
($1.0)
($1.5)
($2.1)
($1.7)
Profit for the period
$10.9
$4.3
$31.6
$23.6
Basic and diluted earnings per share
attributable to equity holders(3)
$0.22
$0.13
$0.69
$0.69
International General Insurance Holdings
Ltd.
Condensed Consolidated Statements of
Financial Position (Unaudited)
(in millions of U.S. Dollars)
As at
December 31,
2020
As at
December 31,
2019
ASSETS
Cash and cash equivalents
$133.4
$192.5
Term Deposits
$172.2
$119.7
Insurance receivables
$166.6
$113.0
Investments (4)
$438.1
$253.7
Investment in associates (4)
$11.6
$13.1
Reinsurance share of outstanding
claims
$187.5
$176.2
Reinsurance share of unearned premiums
$50.1
$33.9
Deferred excess of loss premiums
$17.1
$15.2
Deferred policy acquisition costs
$55.2
$41.7
Other assets
$9.5
$7.6
Investment properties (4)
$20.0
$25.7
Property, premises and equipment
$13.2
$12.7
Intangible assets
$4.7
$3.9
TOTAL ASSETS
$1,279.2
$1,009.1
LIABILITIES
Gross outstanding claims
$492.3
$413.1
Gross unearned premiums
$277.2
$206.2
Insurance payables
$83.5
$53.5
Other liabilities
$20.5
$14.9
Deferred tax liabilities
$0.1
$0.4
Unearned commissions
$11.0
$8.9
TOTAL LIABILITIES
$884.6
$697.0
EQUITY
Issued share capital
-
$143.4
Common shares at par value
$0.5
-
Additional paid in capital
-
$2.7
Share premium
$157.6
-
Warrants
$9.2
-
Treasury shares
-
($20.1)
Foreign currency translation reserve
($0.3)
($0.3)
Fair value reserves
$18.2
$4.2
Retained earnings
$209.4
$182.2
TOTAL EQUITY
$394.6
$312.1
TOTAL LIABILITIES AND EQUITY
$1,279.2
$1,009.1
International General Insurance Holdings Ltd.
Supplementary Financial Information – Condensed Consolidated
Statements of Income (Unaudited)
Quarter Ended
December 31,
Year Ended
December 31,
2020
2019
2020
2019
Ratios
Claims and claims expense ratio
(a)
59.8%
62.5%
53.5%
54.8%
Policy acquisition expense ratio (b)
20.1%
19.6%
19.2%
21.1%
General and administrative expense ratio
(c)
16.9%
18.9%
16.6%
18.2%
Expense ratio (d)
37.0%
38.5%
35.8%
39.3%
Combined ratio (e)
96.8%
101.0%
89.3%
94.1%
(a)
Represents net claims and claim adjustment
expenses as a percentage of net premiums earned.
(b)
Represents net policy acquisition expenses
as a percentage of net premiums earned.
(c)
Represents general and administrative
expenses as a percentage of net premiums earned.
(d)
Represents the sum of the policy
acquisition expense ratio and the general and administrative
expense ratio.
(e)
Represents the sum of the claims and claim
expense ratio and the expense ratio.
International General Insurance Holdings
Ltd.
Supplementary Financial Information –
Consolidated Statements of Financial Position (Unaudited)
(in millions of U.S. Dollars, except share
and per share data)
As at
December 31, 2020
As at
December 31, 2019
Cash and cash equivalents and term
deposits
$305.6
$312.2
Total investments (4)
$469.7
$292.5
Total Investments and cash
portfolio
$775.3
$604.7
Common shares outstanding (in
millions)*
48.5
34.0
Minus: Unvested shares (in millions)**
3.1
-
Number of vested common outstanding
shares (in millions) (a)
45.4
34.0
Total equity (b)
$394.6
$312.1
Book value per share (b)/(a)
$8.69
$9.18
* Common shares issued and outstanding as
at December 31, 2020:
No. of shares
Common shares
45,426,251
Earnout shares
3,012,500
Restricted shares awards
134,500
**Total unvested shares
3,147,000
Total Common shares outstanding
48,573,251
* Common shares issued and outstanding at
December 31, 2019 of 134,025,678 were adjusted at a share exchange
ratio of 0.254 used in the March 2020 Business Combination with
Tiberius Acquisition Corp. to facilitate comparison to December 31,
2020. Each of the shares above have a par value of $0.01.
** Earnout Shares are subject to vesting
at stock prices ranges from $11.50 to $15.25, are entitled to
dividends and voting rights, however, are non-transferable by their
holders until they vest. If the Earnout Shares do not vest on or
prior to March 17, 2028, they will be cancelled by the Company.
Restricted Shares awards were issued pursuant to the Company’s 2020
Omnibus Incentive Plan and are entitled to dividends, however the
Restricted Shares awards are non-transferable by their holders
until they vest as per the respective Restricted Shares Award
Agreements. As at December 31, 2020, the vesting conditions
attached to both Earnout Shares and Restricted Shares awards to
employees have not been met, therefore these shares were not
included in the weighted average number of common shares for both
the basic and diluted earnings per share.
International General Insurance Holdings Ltd.
Supplementary Financial Information - Segment Results
(Unaudited)
Segment information for IGI’s consolidated operations is as
follows:
For the quarter ended December 31,
2020
(in millions of U.S. Dollars)
Specialty Long-tail
Specialty Short-tail
Reinsurance
Total
Underwriting revenues
Gross written premiums
$65.8
$60.9
$2.8
$129.5
Reinsurers’ share of insurance
premiums
($18.2)
($21.2)
-
($39.4)
Net written premiums
$47.6
$39.7
$2.8
$90.1
Net change in unearned premiums
($11.7)
($7.1)
$2.6
($16.2)
Net premiums earned
$35.9
$32.6
$5.4
$73.9
Net claims and claim adjustment
expenses
($30.8)
($11.6)
($1.9)
($44.3)
Net policy acquisition expenses
($7.5)
($6.5)
($0.9)
($14.9)
Net underwriting results
($2.4)
$14.5
$2.6
$14.7
For the quarter ended December 31,
2019
(in millions of U.S. Dollars)
Specialty Long-tail
Specialty Short-tail
Reinsurance
Total
Underwriting revenues
Gross written premiums
$50.3
$35.9
$2.9
$89.1
Reinsurers’ share of insurance
premiums
($13.1)
($13.5)
-
($26.6)
Net written premiums
$37.2
$22.4
$2.9
$62.5
Net change in unearned premiums
($9.3)
$2.6
$2.3
($4.4)
Net premiums earned
$27.9
$25.0
$5.2
$58.1
Net claims and claim adjustment
expenses
($17.6)
($12.5)
($6.2)
($36.3)
Net policy acquisition expenses
($5.6)
($4.9)
($0.9)
($11.4)
Net underwriting results
$4.7
$7.6
($1.9)
$10.4
International General Insurance Holdings Ltd.
Supplementary Financial Information - Segment Results
(Unaudited)
For the year ended December 31,
2020
(in millions of U.S. Dollars)
Specialty Long-tail
Specialty Short-tail
Reinsurance
Total
Underwriting revenues
Gross written premiums
$201.9
$246.1
$19.3
$467.3
Reinsurers’ share of insurance
premiums
($37.6)
($91.3)
-
($128.9)
Net written premiums
$164.3
$154.8
$19.3
$338.4
Net change in unearned premiums
($26.6)
($27.9)
($0.4)
($54.9)
Net premiums earned
$137.7
$126.9
$18.9
$283.5
Net claims and claim adjustment
expenses
($88.0)
($57.4)
($6.3)
($151.7)
Net policy acquisition expenses
($26.2)
($25.1)
($3.1)
($54.4)
Net underwriting results
$23.5
$44.4
$9.5
$77.4
For the year ended December 31,
2019
(in millions of U.S. Dollars)
Specialty Long-tail
Specialty Short-tail
Reinsurance
Total
Underwriting revenues
Gross written premiums
$142.1
$189.1
$18.0
$349.2
Reinsurers’ share of insurance
premiums
($22.2)
($74.9)
-
($97.1)
Net written premiums
$119.9
$114.2
$18.0
$252.1
Net change in unearned premiums
($23.5)
($12.9)
($0.2)
($36.6)
Net premiums earned
$96.4
$101.3
$17.8
$215.5
Net claims and claim adjustment
expenses
($58.8)
($44.7)
($14.6)
($118.1)
Net policy acquisition expenses
($21.2)
($21.2)
($3.0)
($45.4)
Net underwriting results
$16.4
$35.4
$0.2
$52.0
International General Insurance Holdings Ltd.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
(1)
The following are the calculated
investment yields and the reconciliation of investment income and
share of loss from associates included in the Condensed
Consolidated Statements of Income (Unaudited) to Total investment
income net, used to calculate investment yield:
Quarter Ended December
31,
Year Ended December
31,
(in millions of U.S. Dollars, except
percentages)
2020
2019
2020
2019
Net investment income*
$4.8
$3.4
$10.0
$13.4
Share of loss from associates
($0.3)
($0.5)
($1.5)
($0.4)
Total investment income
$4.5
$2.9
$8.5
$13.0
Minus
Realized gain (loss) on investments
($0.2)
$0.1
$1.2
$0.3
Realized gain (loss) on investment
properties
($0.2)
($0.1)
($0.2)
$0.7
Unrealized gain (loss) on investments
$2.7
$0.8
($0.2)
$1.6
Fair value gain (loss) on investment
properties
($0.8)
($0.3)
($2.0)
($0.3)
Expected credit losses on investments
($0.1)
-
($0.3)
-
Share of profit (loss) from
associates**
($0.3)
($0.5)
($1.5)
($0.4)
Total investment income, net
(a)
$3.4
$2.7
$11.5
$11.1
Average investments and cash portfolio, at
cost (b)
$728.7
$576.1
$667.0
$543.4
Investment Yield (a) / (b)
annualized
1.8%
1.9%
1.7%
2.0%
* Net investment income is comprised of interest and dividend
income, realized and unrealized gain (loss) on investments,
realized and unrealized gain (loss) on investment properties,
expected credit loss on investments, investment custodian fees and
other investment expenses.
** Share of profit (loss) from associates primarily represents
fair value gain (loss) on investment properties held by associates
and has been excluded from Total investment income, net in 2020.
Accordingly, the year ended December 31, 2019 comparative of $0.4
million has also been excluded from the determination of Total
investment income, net and Investment yield to conform to the
current presentation.
(2)
Represents the sum of other revenues,
other expenses and impairment loss on insurance receivables.
Quarter Ended December
31,
Year Ended December
31,
(in millions of U.S. Dollars)
2020
2019
2020
2019
Other revenues
$0.2
$0.2
$0.4
$1.4
Other expenses
($0.9)
($0.7)
($1.9)
($2.1)
Impairment loss on insurance
receivables
($0.3)
($0.6)
($2.9)
($0.6)
Other expenses, net
($1.0)
($1.1)
($4.4)
($1.3)
(3)
Represents net profit for the period
attributable to vested common shares divided by the weighted
average number of shares – basic and diluted calculated as
follows:
Quarter Ended December
31,
Year Ended December
31,
(in millions of U.S. Dollars, except per
share information)
2020
2019
2020
2019
Profit for the period
$10.9
$4.3
$31.6
$23.6
Minus: Profit attributable to the Earnout
Shares
$0.7
-
$2.0
-
Minus: Profit attributable to the
Restricted Shares
$0.1
-
$0.1
-
Net profit for the period available to
common shareholders (a)
$10.1
$4.3
$29.5
$23.6
Weighted average number of shares – basic
and diluted (in millions of shares) (b)
45.4
34.0
43.0
34.3
Basic and diluted earnings per share
(a/b)
$0.22
$0.13
$0.69
$0.69
To facilitate a comparison of earnings per share with the
periods ending December 31, 2020, the weighted average number of
basic and diluted shares of 135.2 million for the year ended
December 31, 2019 was adjusted at a share exchange ratio of 0.254
that was used in the March 2020 Business Combination with Tiberius.
As a result, the Basic and diluted earnings per share previously
reported of $0.17 was recalculated to an adjusted basic and diluted
earnings per share of $0.69.
(4)
Includes the following:
As at
(in millions of U.S. Dollars)
December 31, 2020
December 31, 2019
Investments
$438.1
$253.7
Investment properties
$20.0
$25.7
Investments in associates
$11.6
$13.1
Total investments
$469.7
$292.5
International General Insurance Holdings Ltd.
Non-IFRS Financial Measures
In presenting IGI’s results, Management has included and
discussed certain non-IFRS financial measures. We believe that
these non-IFRS measures, which may be defined and calculated
differently by other companies, help to explain and enhance an
understanding of our results of operations. However, these measures
should not be viewed as a substitute for those determined in
accordance with IFRS.
Combined Ratio
The table below illustrates the reconciliation of the combined
ratio on a financial and accident year basis:
Quarter Ended December
31,
Year Ended December
31,
(in millions of U.S. Dollars, except
percentages)
2020
2019
2020
2019
Net premiums earned (a)
$73.9
$58.1
$283.5
$215.5
Net Claims and claims adjustment expenses
(b)
($44.3)
($36.3)
($151.7)
($118.1)
Net Policy acquisition expenses (c)
($14.9)
($11.4)
($54.4)
($45.4)
General and administrative expenses
(d)
($12.5)
($11.0)
($46.9)
($39.3)
Prior year adverse/ (favorable)
development (e)
$5.4
($1.7)
($6.1)
($6.3)
Catastrophe (CAT) losses (f)
$6.3
$8.3
$13.5
$16.2
Combined ratio ((b+c+d)/a)*
96.8%
101.0%
89.3%
94.1%
Minus: CAT losses on an accident year
basis (f/a)
8.5%
14.3%
4.8%
7.5%
Minus: Prior year development
(favorable)/unfavorable (e/a)
7.3%
(3.0%)
(2.2%)
(2.9%)
Accident year combined ratio prior to
CAT losses
81.0%
89.7%
86.7%
89.5%
* See “Supplementary Financial Information - Condensed
Consolidated Statements of Income (Unaudited).”
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 amount of these gains and losses is heavily
influenced by, and fluctuates 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 premium growth, 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 profit for the period determined in
accordance with IFRS, 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 more easily analyze the Company’s results
in a manner similar to how Management analyzes the Company’s
underlying business performance.
Core operating income is calculated by the addition or
subtraction of certain line items reported in the ‘Condensed
Consolidated Statements of Income’ from profit for the period and
tax effecting each line item (resulting in each item being a
non-IFRS measure), as illustrated in the table below:
Quarter Ended December
31,
Year Ended December
31,
(in millions of U.S. Dollars, except for
percentages and per
2020
2019
2020
2019
share data)
Profit for the period
$10.9
$4.3
$31.6
$23.6
Reconciling items between profit for the
period and core operating income (loss):
Realized (gains)/loss on investments (tax
adjusted) (i)
$0.4
($0.7)
($0.9)
($1.0)
Expected credit losses on investments
$0.1
-
$0.3
-
Unrealized loss/(gain) on investments (tax
adjusted) (i)
($2.6)
($0.8)
-
($1.6)
Loss/(gain) on investment properties
$0.8
$0.9
$2.0
$0.3
Listing related costs
-
$4.8
$3.4
$4.8
Gain on foreign exchange (tax adjusted)
(i)
($5.4)
($8.6)
($2.3)
($4.9)
Core operating income (loss)
$4.2
($0.1)
$34.1
$21.2
Average shareholders’ equity (ii)
$387.2
$313.8
$353.4
$306.7
Core operating return on average equity
(annualized) (iii)
4.4%
(0.1)%
9.6%
6.9%
Basic and diluted core operating earnings
per share (iv)
$0.09
-
$0.74
$0.62
Return on average equity (annualized)
(v)
11.3%
5.5%
9.0%
7.7%
- Represents a non-IFRS financial measure as the line-item
balances reported in “Condensed Consolidated Statements of Income
(Unaudited)” have been adjusted above for the related tax
impact.
- Average shareholders’ equity equals the total equity at the
reporting period end plus the total equity as of the beginning of
the reporting period, divided by 2.
- Represents annualized core operating income for the quarter
divided by average shareholders’ equity, and core operating income
for the year divided by average shareholders’ equity
respectively.
- Represents core operating income attributable to vested common
shares dividend by weighted average number of shares – basic and
diluted as follows:
Quarter Ended December
31,
Year Ended December
31,
(in millions of U.S. Dollars, except per
share information)
2020
2019
2020
2019
Core operating income (loss)
$4.2
($0.1)
$34.1
$21.1
Minus: Core operating income attributable
to the Earnout Shares subject to vesting
$0.2
-
$2.1
-
Minus: Core operating income attributable
to the Restricted Shares awards subject to vesting
-
-
$0.1
-
Core operating income for the
period attributable to vested equity holders (a)
$4.0
($0.1)
$31.9
$21.1
Weighted average number of common shares –
basic and diluted (in millions of shares) (b)
45.4
34.0
43.0
34.3
Basic and diluted core operating
earnings per share (a/b)
$0.09
-
$0.74
$0.62
v. Return on average equity and core operating return on average
equity, both non-IFRS financial measures, represent the returns
generated on common shareholders’ equity during the year. IGI’s
objective is to generate superior returns on capital that
appropriately reward shareholders for the risks assumed.
The Company has posted a Fourth Quarter and Full Year 2020
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, political violence, financial
institutions, general third-party liability (casualty), legal
expenses, professional indemnity, D&O, surety, marine trades,
marine liability, and reinsurance treaty business. Registered in
Bermuda, with operations in Bermuda, London, Dubai, Amman, Labuan
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-”/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,” 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, information regarding
our estimates of losses for catastrophes and other large losses
including losses related to the COVID-19 pandemic, measurements of
potential losses in the value of our investment portfolio, 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 pricing
and other market conditions, our growth prospects, and valuations
of the potential impact of movements in interest rates, credit
spreads, equity securities' prices and foreign currency rates.
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) the
outcome of any legal proceedings that may be instituted against the
Company; (5) the potential effects of the COVID-19 pandemic; (6)
the inability to maintain the listing of the Company’s common
shares or warrants on Nasdaq; and (7) other risks and uncertainties
indicated in IGI’s annual report on Form 20-F for the year ended
December 31, 2019, including those under “Risk Factors” therein,
and in the Company’s other 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210311006047/en/
IGI: Investors: Robin Sidders, Head of Investor Relations
T: + 44 (0) 2072 204937 M: + 44 (0) 7384 514785 Email:
robin.sidders@iginsure.com
Media: Aaida Abu Jaber, AVP PR & Marketing T:
+96265662082 Ext. 407 M: +962770415540 Email:
aaida.AbuJaber@iginsure.com
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