IGI benefits from US property insurance 'dislocation' as profits surge
A scaling back in the wider insurance market has allowed the re/insurer to ‘significantly grow’ its insurance business in the US, group president says, as profits more than double in first half of the year
IGI’s surge in profits has largely been off the back of its growth in the US property and energy market, the group's president has said.
Speaking to Insurance Day, Waleed Jabsheh, president of IGI, said dislocation in the US property insurance market had driven rate increases that had helped to fuel growth for the Bermuda-based specialty re/insurer.
IGI announced it had doubled its net income in the first half of this year to $41.3m, up from $18.5m over the same period last year, as underwriting income jumped 68% to $82m.
The combined ratio improved 15 points to 73.5% in the half-year period, while gross written premiums grew 14% to $304m.
“Our growth this year so far has been more on the short-tail lines than the long-tail,” Jabsheh said. “This year so far, our property book has grown quite healthily alongside our energy book – a lot of that as a result of our growth in the US.”
He added that across the property line business, the US “was the strongest in terms of dislocation and, as a result, rate increases".
“The abundance of loss and cat activity out in the US over the last several years has put a dampener on the market's appetite, generally speaking, for that business: there is a lot more caution and this is why we see more dislocation and stronger rating momentum there,” Jabsheh said.
“Cat appetite is definitely waning, markets are a lot more selective, scaling back, not allocating as much capital or capacity to these types of risks. Whenever you see those sorts of characteristics in the market, opportunities come with it and so we've been able to significantly grow our US presence in the first half of the year.”
Almost all of IGI’s book in the US property market is insurance or direct and facultative business.
IGI had also seen “positive momentum” in its aviation book following losses that have emerged out of the war between Russia and Ukraine, Jabsheh said, adding that political violence was “definitely an area where there's plenty of dislocation” that was likely to intensify in the coming quarters.
Energy was another positive area for IGI, and Jabsheh said the firm’s recently announced plans to acquire the Norwegian managing general agent Energy Insurance Oslo would provide a “platform to expand across the Nordic region to develop other lines of business and complement our Maltese platform in the EU”.
“The Scandinavian market is vast, it's attractive [and] profitable,” he said.