IGI Reports First Quarter 2024 Unaudited Financial Results
Highlights for the first quarter of 2024 include:
(in millions of |
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Quarter Ended
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2024 |
2023 |
Gross written premiums |
|
|
Net premiums earned |
|
|
Underwriting income (2) |
|
|
Net investment income (1) |
|
|
Net income for the period |
|
|
Combined ratio (2) |
74.1% |
78.4% |
Earnings per share (diluted) (3) |
|
|
Return on average equity (annualized) (4) |
27.6% |
32.2% |
Core operating income (4) |
|
|
Core operating earnings per share (diluted) (4) |
|
|
Core operating return on average equity (annualized) (4) |
29.2% |
27.9% |
(1) |
See Note (1) in the “Notes to the Consolidated Financial Statements (Unaudited)” below. |
|
(2) |
See “Supplementary Financial Information” below. |
|
(3) |
See Note (2) in the “Notes to the Consolidated Financial Statements (Unaudited)” below. |
|
(4) |
See the section titled “Non-GAAP Financial Measures” below. |
“We are continuing to see new opportunities and find new ways of accessing business. With underwriting income up more than 30% and a lower level of losses in the first quarter, we posted a healthy 74.1% combined ratio. These strong underwriting results, coupled with significantly improved investment results, resulted in net income of
“As market conditions remain varied across our portfolio, we are focused on consistent selective and disciplined underwriting and targeted growth and diversification, moving our capital to those areas with the highest risk-adjusted returns. With a number of new initiatives in place, we are well-positioned to continue to deliver on our goal of creating sustainable long-term value for our shareholders.”
Results for the Quarters Ended
Net income for the quarter ended
Core operating income, a non-GAAP measure, was
Underwriting income increased 30.7% to
Gross written premiums were
The loss ratio was 38.7% for the quarter ended
The net policy acquisition expense ratio was 15.9% in the first quarter of 2024 compared to 16.5% in the same quarter of 2023.
The general & administrative expense ratio was 3.3% higher at 19.5% in the first quarter of 2024 compared to 16.2% in the first quarter of 2023 largely driven by higher human resources costs in line with the Company’s overall growth.
The combined ratio for the quarter ended
Segment Results
The Specialty Long-tail Segment, which represented 21% of the Company’s gross written premiums for the quarter ended
The Specialty Short-tail Segment, which represented 52% of the Company’s gross written premiums for the quarter ended
The Reinsurance Segment, which represented 27% of the Company’s gross written premiums for the quarter ended
Net Foreign Exchange (Loss) Gain
The loss on foreign exchange in the first quarter of 2024 was
Investment Results
Net investment income was
Total Shareholders’ Equity
Total shareholders’ equity at
(in millions of |
Quarter Ended March 31, 2024 |
Total Shareholders’ equity at |
|
Net income for the period |
|
Unrealized losses during the period on available-for-sale investments |
( |
Purchase of treasury shares (a) |
( |
Share-based compensation expense during the period |
|
Vesting of earnout shares |
|
Cash dividends declared during the period |
( |
Total shareholders’ equity at |
|
Book value per share was
(a) |
In the first quarter of 2024, the Company repurchased approximately 275,580 common shares at an average price per share of |
Consolidated Statements of Income (Unaudited)
|
Quarter Ended
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(in millions of |
2024 |
2023 |
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Gross written premiums |
|
|
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Ceded written premiums |
( |
( |
|
Net written premiums |
|
|
|
Net change in unearned premiums |
( |
( |
|
Net premiums earned |
|
|
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Investment income(1) |
|
|
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Net realized gain on investments(1) |
- |
|
|
Net unrealized gain on investments(1) |
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Change in allowance for expected credit losses on investments(1) |
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Net investment income |
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Other revenues |
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Total revenues |
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Expenses |
|
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Net loss and loss adjustment expenses |
( |
( |
|
Net policy acquisition expenses |
( |
( |
|
General & administrative expenses |
( |
( |
|
Change in allowance for expected credit losses on receivables |
( |
|
|
Change in fair value of derivative financial liabilities |
( |
( |
|
Other expenses |
( |
( |
|
Net Foreign exchange (loss) gain |
( |
|
|
Total expenses |
( |
( |
|
Net income before tax |
|
|
|
Income tax credit (expense) |
|
( |
|
Net income for the period |
|
|
|
Diluted earnings per share attributable to equity holders (2) |
|
|
See “Notes to the Consolidated Financial Statements (Unaudited)” below.
Consolidated Balance Sheets (Unaudited)
(in millions of |
As at |
As at |
|
ASSETS |
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Investments |
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Fixed maturity securities available-for-sale, at fair value |
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Fixed maturity securities held to maturity |
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Equity securities, at fair value |
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Other investments |
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Short-term investments |
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Term deposits |
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Equity-method investments measured at fair value |
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Total investments |
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Cash and cash equivalents |
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Accrued investment income |
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Premiums receivable |
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Reinsurance recoverables |
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Ceded unearned premiums |
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Deferred policy acquisition costs, net of ceding commissions |
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Deferred tax assets, net |
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Other assets |
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TOTAL ASSETS |
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LIABILITIES |
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Reserve for unpaid loss and loss adjustment expenses |
|
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Unearned premiums |
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Other liabilities |
|
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Insurance and reinsurance payables |
|
|
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Derivative financial liabilities |
|
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TOTAL LIABILITIES |
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SHAREHOLDERS’ EQUITY |
|
|
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Common shares at par value |
|
|
|
Additional paid-in capital |
|
|
|
|
( |
- |
|
Accumulated other comprehensive income, net of taxes |
|
|
|
Foreign currency translation reserve |
( |
( |
|
Fair value reserve |
( |
( |
|
Retained earnings |
|
|
|
TOTAL SHAREHOLDERS’ EQUITY |
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
See “Notes to the Consolidated Financial Statements (Unaudited)” below.
Supplementary Financial Information – Combined Ratio (Unaudited)
|
Quarter Ended
|
||
|
2024 |
2023 |
|
|
|
|
|
Loss ratio (a) |
38.7% |
45.7% |
|
Net policy acquisition expense ratio (b) |
15.9% |
16.5% |
|
General and administrative expense ratio (c) |
19.5% |
16.2% |
|
Expense ratio (d) |
35.4% |
32.7% |
|
Combined ratio (e) |
74.1% |
78.4% |
(a) |
Represents net loss and loss 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 net policy acquisition expenses ratio and the general and administrative expense ratio. |
|
(e) |
Represents the sum of the loss ratio and the expense ratio. |
Supplementary Financial Information – Book Value per Share (Unaudited)
(in millions of |
As at |
As at |
|
Investments |
|
|
|
Cash and cash equivalents |
|
|
|
Total investments and cash and cash equivalents |
|
|
|
|
|
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Common shares outstanding (in millions)* |
46.3 |
46.1 |
|
Minus: Unvested shares (in millions)** |
2.0 |
2.5 |
|
Number of vested common outstanding shares (in millions) (a) |
44.3 |
43.6 |
|
|
|
|
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Total shareholders’ equity (b) |
|
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Book value per share (b)/(a) |
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* Common shares issued and outstanding as at |
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No. of shares as at |
|
|
Vested common shares as of |
43,584,549 |
Vested restricted share awards |
397,293 |
|
3,800 |
Vested earnout shares |
600,000 |
Cancelled treasury shares |
(55,652) |
|
(223,728) |
Total vested common shares as of |
44,306,262 |
|
|
Unvested earnout shares as of |
1,012,500 |
Unvested restricted share awards as of |
1,020,665 |
Total unvested shares as of |
2,033,165 |
Total common shares outstanding as of |
46,339,427 |
** |
Earnout Shares were subject to vesting at stock prices ranging from |
Supplementary Financial Information - Segment Results (Unaudited)
Segment information for IGI’s consolidated operations is as follows: |
For the quarter ended |
|||||||
(in millions of |
Specialty Long-tail |
|
Specialty Short-tail |
|
Reinsurance |
|
Total |
Underwriting revenues |
|
|
|
|
|
|
|
Gross written premiums |
|
|
|
|
|
|
|
Ceded written premiums |
( |
|
( |
|
( |
|
( |
Net written premiums |
|
|
|
|
|
|
|
Net change in unearned premiums |
|
|
( |
|
( |
|
( |
Net premiums earned |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and loss adjustment expenses |
( |
|
( |
|
( |
|
( |
Net policy acquisition expenses |
( |
|
( |
|
( |
|
( |
Underwriting income |
|
|
|
|
|
|
|
For the quarter ended |
|||||||
(in millions of |
Specialty Long-tail |
|
Specialty Short-tail |
|
Reinsurance |
|
Total |
Underwriting revenues |
|
|
|
|
|
|
|
Gross written premiums |
|
|
|
|
|
|
|
Ceded written premiums |
( |
|
( |
|
- |
|
( |
Net written premiums |
|
|
|
|
|
|
|
Net change in unearned premiums |
|
|
( |
|
( |
|
( |
Net premiums earned |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and loss adjustment expenses |
( |
|
( |
|
( |
|
( |
Net policy acquisition expenses |
( |
|
( |
|
( |
|
( |
Underwriting income |
|
|
|
|
( |
|
|
Notes to the Consolidated Financial Statements (Unaudited)
(1) |
The following table shows the investment yield calculation: |
|
Quarter Ended
|
||
(in millions of |
2024 |
2023 |
|
Investment income |
|
|
|
Average total investments and cash and cash equivalents |
|
|
|
Investment Yield (annualized) |
4.2% |
3.5% |
(2) |
Represents net income for the period available to common shareholders divided by the weighted average number of vested common shares – diluted calculated as follows: |
|
Quarter Ended
|
||
(in millions of |
2024 |
2023 |
|
Net income for the period |
|
|
|
Minus: Net income attributable to the earnout shares |
|
|
|
Minus: Dividends attributable to restricted share awards |
|
- |
|
Net income available to common shareholders (a) |
|
|
|
Weighted average number of shares – diluted (in millions of shares) (b)* |
44.3 |
44.4 |
|
Diluted earnings per share attributable to equity holders (a/b) |
|
|
* |
The weighted average number of common shares refers to the number of common shares calculated after adjusting for the changes in issued and outstanding common shares over a reporting period. |
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
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.
|
Quarter Ended
|
||
(In millions of |
2024 |
2023 |
|
Net premiums earned (a) |
|
|
|
Net loss and loss adjustment expenses (b) |
( |
( |
|
Net policy acquisition expenses (c) |
( |
( |
|
General and administrative expenses (d) |
( |
( |
|
Prior years favorable development (e) |
( |
( |
|
Catastrophe (“CAT”) losses (f)* |
|
|
|
|
|
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Combined ratio ((b+c+d)/a)** |
74.1% |
78.4% |
|
Minus: Prior years favorable development (e/a) |
(19.4%) |
(11.4%) |
|
Accident year combined ratio |
93.5% |
89.8% |
|
Minus: CAT losses on an accident year basis (f/a) |
9.4% |
13.7% |
|
Accident year combined ratio prior to CAT losses |
84.1% |
76.1% |
* |
The CAT losses for the first quarter ended |
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|
The CAT losses for the quarter ended |
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|
** |
See “Supplementary Financial Information - Combined Ratio (Unaudited)” |
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 is as follows:
Quarter Ended |
|||||||
2024 |
2023 |
||||||
(in millions of |
Net loss and loss adjustment expenses |
% of net premiums earned |
Net loss and loss adjustment expenses |
% of net premiums earned |
|||
Current year net incurred claims |
|
38.7% |
|
45.7% |
|||
Minus: Current accident year CAT losses |
|
9.4% |
|
13.7% |
|||
Minus: Effect of prior years’ development |
( |
(19.4%) |
( |
(11.4%) |
|||
Current Accident year (Prior to CAT losses) |
|
48.7% |
|
43.4% |
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
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:
|
Quarter Ended
|
||
(in millions of |
2024 |
2023 |
|
Net income for the period |
|
|
|
Reconciling items between net income for the period and core operating income: |
|
|
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Net realized gain on investments |
- |
( |
|
Net unrealized gain on investments |
( |
( |
|
Change in allowance for expected credit losses on investments (tax adjusted) (i) |
( |
( |
|
Change in fair value of derivative financial liabilities |
|
|
|
Net foreign exchange loss (gain) (tax adjusted) (i) |
|
( |
|
Core operating income |
|
|
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Average shareholders’ equity (ii) |
|
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Core operating return on average equity (annualized) (ii) and (v) |
29.2% |
27.9% |
|
Diluted core operating earnings per share (iv) |
|
|
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Return on average equity (annualized) (v) |
27.6% |
32.2% |
i. |
Represents a non-GAAP financial measure as line-item balances have been adjusted for the related tax impact. |
|
ii. |
Represents the total shareholders’ equity at the reporting period end plus the total shareholders’ equity as of the beginning of the reporting period, divided by 2. |
|
iii. |
Represents annualized core operating income for the period divided by average shareholders’ equity. |
|
iv. |
Represents core operating income attributable to vested equity holders divided by weighted average number of vested common shares – diluted as follows: |
|
Quarter Ended
|
||
(in millions of |
2024 |
2023 |
|
Core operating income for the period |
|
|
|
Minus: Core operating income attributable to earnout shares |
|
|
|
Minus: Dividends attributable to restricted share awards |
|
- |
|
Core operating income available to common shareholders (a) |
|
|
|
Weighted average number of shares – diluted (in millions of shares) (b) |
44.3 |
44.4 |
|
Diluted core operating earnings per share (a/b) |
|
|
v. |
Return on average equity (annualized) and core operating return on average equity (annualized), both non-GAAP financial measures, represent the returns generated on common shareholders’ equity during the period. |
The Company has posted a First Quarter 2024 investor presentation deck on its website at www.iginsure.com in the Investors section under the Presentations & Webcasts tab.
About
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
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IGI Contacts:
Investors:
M: + 44 (0) 7384 514785
Email: [email protected]
Media:
Aaida Abu Jaber, AVP PR Marketing
T: +96265662082 Ext. 407
M: +962770415540
Email: [email protected]
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