Q4 2023 International General Insurance Holdings Ltd Earnings Call

Operator: Good day, and welcome to the International General Insurance Holdings Ltd.'s fourth quarter and full year 2023 Financial Results Conference call. All participants are in listen-only mode.

Good day and welcome to the International General Insurance Holdings L. T D's fourth quarter and full year 2023 financial results Conference call. All participants are in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star key, then one on your touchtone phone.

Today's presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone to withdraw your question. Please press Star then two please.

Operator: To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Robin Sitters, Head of Investor Relations. Please go ahead.

Please note. This event is being recorded I would now like to turn the conference over to Robin cities head of Investor Relations. Please go ahead.

Robin Sitters: Thank you and good morning, and welcome to today's conference call. Today we'll be discussing our fourth quarter and full year 2023 results. You will have seen our press release, which we issued after the market closed yesterday. If you'd like a copy of the press release, it's available in the investor section of our website at www.iginsure.com. We've also posted a supplementary investor presentation which can be found on our website on the presentation page in the investor section. On today's call, our Executive Chairman of IGI, Wasif Jobshah. CEO, Waleed Japshah, and Chief Financial Officer, Pervez Rizvi

Yes.

Thank you and good morning, welcome to today's call today, we'll be discussing our fourth quarter and full year of 2023 result.

We'll have seen our press release, which we issued after the market close yesterday.

If you'd like a copy of the press release, it's available on the investors section of our website at Www Dot IGN ensure dotcom.

We've also posted a supplementary investor presentation, which can be found on our website on the presentation page in the investors section.

On todays call are executive chairman of <unk> G I want the job say.

D E L well eat job Shay.

And Chief Financial Officer Professor in.

Robin Sitters: Wasif will begin the call with some high-level comments before handing over to Waleed to talk you through the drivers of our results for the fourth quarter and full year 2023, also giving some insight into current market conditions and our outlook for 2024. At that point, we'll open the call up for Q&A, and I'll begin with the customary, safe harbor language.

What's if will begin the call with some high level comments before handing over to Walid to talk you through the drivers of our results for the fourth quarter and full year 2023 also giving some insight into current market conditions and our outlook for 2024 at that point, we'll open the call up for Q&A.

I'll begin with the customary.

The Safe Harbor language.

Robin Sitters: Our speaker's 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 representations by us.

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 our future plans estimates or expectations contemplated by us will in fact be achieved.

Robin Sitters: Future plans, estimates, or expectations contemplated by us may not, in fact, be achieved. Forward-looking statements involve risks, uncertainties, and assumptions. Actual events or results may differ materially from those projected in a forward-looking statement due to a variety of factors, including the risk factors that are set forth in the company's annual report on Forms 20-F for the year ended December 31st, 2022, the company's reports on Form 6K and other filings with the SEC, as well as our results press release issued yesterday. We undertake no obligation to update or revise publicly any forward In addition, as you're aware, we voluntarily changed our basis of accounting from IFRS to U.S. GAAP, effective January 1, 2023. During the conference call today, we'll use certain non-GAAP financial measures. For 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'll turn the call over to our Executive Chairman, Wasif Jobseh. Thank you, welcome, and good day, everyone.

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 that are set forth in the company's annual report on form 20-F for.

For the year ended December 31, 2020 to the company's reports on form 6K, 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.

In addition, as you're aware, we voluntarily changed our basis of accounting from IRS to U S. GAAP effective January one when he twenty-three.

During the conference call today, we'll use certain 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'll turn the call over to our executive Chairman Whatsapp job Jay.

Yes.

Thank you Albert and good day, everyone. Thank you for joining us on today's.

Today's call.

Oh just Mickey.

Wasif Jobseh: Thank you for joining us on today's call. I'll just make a few short remarks before sending the call over to Alina. I'm very proud of our achievements in 2023, both financial and non-financial. It was, very much, the year where many things came together and really demonstrated what IJI is capable of. During the year, we had our first CEO transition in our 22-year history.

In short remarks before <unk>.

The call over to I D.

I'll just.

I'm very proud of our achievements.

223, both financial and Nonfinancial.

Thanks very much.

The year, where many things came together and we needed the most.

Okay.

During the year, we had a lot.

The old transition our Glyn.

And I'm pleased with the seamless way in which this.

Wasif Jobseh: And I'm pleased with the seamless way in which this has occurred all around, not just the leadership but what it has displayed, but the support given to Ali by all our people and the cultural integrity that has been maintained throughout. You saw from our press release last night that we had a strong fourth quarter to finish this year, 2023, clearly demonstrating how our focus, discipline, and consistency in the situation are paying off. Our results for the full year 2023 are the best in our 22 years. And this is on the back of very strong results in recent prayer years.

Sure.

All of them.

Jeff.

Needless yet.

But.

Has this bleed.

But the support given to our lead by all of our people and culture.

It has been.

In school.

You saw from our press release last night.

We had strong flows.

Corp.

Thank goodness.

2023, clearly demonstrating how our focus this year.

And the closest association.

Joining the call.

Our results for fiscal year, 'twenty, two and three.

And our.

Yes.

And this is all good.

Correct.

Very strong results in recent years.

Wasif Jobseh: We recorded significant growth in all areas of our business, our underwriting portfolio, our investment portfolio, and our shareholder's equity, which is now comfortably just over half a billion dollars. We've just taken advantage of the opportunities to capitalize on what we were good at with positive conditions across our business. We continue to actively and efficiently manage our capital, deploying it first to our underwriting operations and returning capital to shareholders in the form of Share, Repurchase, and Give. During 2023, we bought 3.4 million shares for $31.1 million. We purchased all outstanding ones at a total cost of $16.3 million, and he paid 1.9 million dollars in dividends.

I really couldnt say.

Mr Ross.

And there's a bar business.

Our underwriting.

Our investment portfolio.

And our shareholders' equity, which is now gone.

Yes.

Half a billion dollars.

We took advantage of.

This project is the lives on what went wrong.

Those two conditions are costar business, we continued to actively.

And we shouldn't.

Manage our capital.

Laurie.

Our domestic operations.

It says it.

At Homegoods.

Sure.

Share repurchase and dividends.

Okay.

During 2023.

Bought back 4 million shares for $51 $1 billion.

We purchased all outstanding warrants at a total cost of $16 $3 million.

And we paid $1 9 million downloads and the dividend.

As you saw from our second milestone plus nine.

Wasif Jobseh: As you saw from our second announcement last night, I'm particularly pleased that our board has declared a special cash dividend of 50 cents per share for 2023, in addition to the regular quarterly dividend of one cent per share. We deliver 38.1% co-operating return on average, the highest and you are the core ROE we have ever recorded, and new book value per share by over 36% in 2020. These are exceptional results, and I congratulate the whole IGI family for their dedication, commitment, and hope. We are a diverse, experienced, hard-working, and call 615 at IGI. We exist at a high level in all areas of our business. Bye, where we have kept them, that is greater than.

I'm, particularly pleased.

Our board has declared especially cash dividend.

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Let's see.

In addition to the regular courses.

Oh Wow that's sure.

Ultimately.

We delivered 58, 1% core pricing grid.

Allergy.

Yeah, Hi, Andy one.

Core.

Are we.

We have as I recall.

And we grew book value per share by over 56%.

These are exceptional results and I congratulate the whole company.

Well the Acacia.

Commitment that pool.

Yeah.

This experience hardworking.

And Corey.

Uh huh.

We are exiting at their height.

Okay.

All areas of business.

Well, we have Kevin.

Wasif Jobseh: We are able to put the work in underwriting; we are returning that capital to our shareholders in the form of dividends, share repurchase, and other capital management actions, as you saw from our announcements last night. We are firmly committed to delivering on our promise to continuously generate value for our shareholders, who have put their trust in IJI and supported us. We take this promise seriously, and I'm very pleased with what we have achieved as a company, especially in 2023. I will now hand over to Ali, who will take you through the results in more detail and talk about our outlook for the remainder of 2014. I will remain on the call for any questions at the end. Thank you all for joining us today, and thank you, Walter.

Where do we have kept them.

This is Dan.

We are able to put to work.

Alrighty.

We are returning capital to our shareholders and before.

Dividends share repurchase and other capital management actions as you saw from <unk>.

<unk> announced since last night.

We are firmly committed to delivering on our promise to continuously generate value for our shareholders.

Who have put there.

And so for us.

We take this promise seriously and I'm very pleased with.

What we have achieved as a company.

Especially in 2023.

I'll now hand over to Amy who will take you through the results in more detail.

And talk about our outlook for the remainder of Q4.

I will remain on the call for any questions.

Yes.

T.

Yeah.

Thank you good morning want to thank you all for joining us today and thank you want to.

Ali: I'm just going to follow the usual agenda and start with a quick recap of the results for the fourth quarter and the full year of 2023, and then we'll move on to our markets and our outlook for the remainder of 2024. As you saw from our press release last night, and as Wasif highlighted, we produced exceptional results in both the fourth quarter and the full year. Before going through the financial highlights, I would first just like to echo Wasif's comments and congratulate our people on the high quality and consistent focus on execution throughout the year. Our results in 23 as well as in recent years are differentiated and some of the best in the specialty insurance market, and we clearly are performing in the current industry tailwind. More than this, though, is the execution behind the numbers, and that is all about our, where we are technical underwriters first and foremost. That is what we do. Every team member understands our strategy, what their individual and collective responsibility is, and also how what they do impacts the end result, with detail focused.

I'm just going to follow the usual agenda to start with a quick recap of the results for the fourth quarter and the full year 2023, and then we'll move on.

To our markets and our outlook for the remainder of 'twenty four.

As you saw from our press release last night, and there's lots of highlights it.

We produced exceptional results in both the fourth quarter and the full year.

Before going through the financial highlights I, just I would first just like to echo what types of problems and congratulate our people on the high quality and consistent focus on execution throughout the year.

Our results in 'twenty, three as well as in recent years, our differentiated than some of the best in the specialty insurance market.

And we're clearly outperforming the cards industry tailwind.

More than this though is the execution behind the numbers and that is all about our people.

Our technical underwriters first and foremost that is what we do.

Every team member understands our strategy what their individual and collective responsibility is and also how what they do impact the end result.

With detail.

For a detailed focus.

Ali: We've got a deep understanding of our markets, with people on the ground providing cultural compatibility. We communicate with transparency, and we execute with precision. And to be perfectly honest, we're passionate about the business that we're in.

They've got a deep understanding of our markets with people on the ground, providing cultural compatibility with.

We communicate with transparency and we execute with position with position.

And to be perfectly honest, we're passionate about what what about the business, but where are you.

We're in.

Ali: Just moving on to some specific highlights, growth in premium growth in the fourth quarter was six and a half percent, which is more muted than prior quarters and in line with the historical pattern. For the full year, which obviously is a better indicator, we recorded growth of just over 18%.

Just moving on to some specific highlights our gross written premium growth in the fourth quarter was six 5%.

Which is more muted than it than prior quarters and in line with the historical patterns.

For the full year, which obviously is a better indicator we recorded growth of just over 18%.

Ali: Again, the growth in 2023 is concentrated in the short-tail and reinsurance segments, while the long-tail segment remains more challenged, as we previously said. Specifically, in the short sale segment, we recorded just over 38% growth in gross premiums for the fourth quarter and just over 26% growth for the full year when compared to 2022. Growth in Q4 was in most short-tail lines, most significantly energy, engineering, and contingency; areas where we are achieving rate improvements on renewal business continue to be most evident in property, onshore energy, and political violence. Our reinsurance business, where we're seeing a continued strong pricing environment and plenty of new business opportunities, finished the year at 9% of our overall premium portfolio, almost double that of the year before. In 2023, cumulative net rate increases exceeded 25% in this segment. You will have seen the reinsurance gross written premium shortfall of $4.9 million recorded in the fourth quarter of 2023.

Again the growth in 'twenty three is concentrated in the short tail reinsurance segments, while the long tail segment remains more challenged as we previously said.

Specifically in the short tail segment, we recorded just over 38% growth in gross premiums for the fourth quarter and just over 26% growth for the full year when compared to 2022.

Growth in Q4 wasn't most short tail lines, most significantly energy engineering and contingency.

I guess, where we are achieving rate improvements on renewal business continued to be most evident in property.

Onshore energy and political violence.

Our reinsurance treaty business, where we're seeing a continued strong pricing environment and plenty of new business opportunities finished the year with 9% of our.

Overall premium portfolio.

Most double that of the year before.

In 2023 cumulative net rate increases exceeding 25% in this segment.

You will have seen the reinsurance gross written premium shortfall of $4 9 million recorded in the fourth quarter of 2023.

Ali: I think most reinsurance companies go through a true-up process in the fourth quarter where there is some differential between actual written premium against expected premium recorded earlier in the year. For us, however, given the relatively small size of our reinsurance book in dollar terms, especially in Q4, it is more difficult. That year-end tour resulted in a short, but for the third year, however, we almost doubled our reinsurance premiums to over $61 million. We expect to continue to take advantage of the many reinsurance opportunities out there while staying within our defined risk aperture. Our combined ratio of 81.8% for the fourth quarter and 76.7% for the full year were well below our long-term average, although, as I said earlier, our full-year combined ratio is the best in our history. This included 2.9 points of unpayable development of prior accident year net losses in the fourth quarter of 23 compared to 4.3 points of unfavorable development for the same period in 2012.

I think most reinsurance companies go through a true up process in the fourth quarter, where there is some differential between actual written premium against expected premiums recorded earlier in the year.

However, given the relatively small size of our reinsurance book in dollar terms and especially in Q4.

That year end true up resulted in a shortfall.

For the full year, however, we almost doubled our reinsurance premiums to over $61 million.

We expect to continue to take advantage of the many reinsurance opportunities out there while staying within.

Are they find the risk appetite.

Our combined ratio of 81, 8% for the fourth quarter and 76, 7% for the full year.

We're well below our long term averages.

But as I said earlier, our full year combined ratio was the best in our history.

This included two nine points of unfavorable development of prior accident year net losses in the fourth quarter of 23 compared to four three points of unfavorable development for the same period in 'twenty two.

Ali: Both periods were impacted by FX movements, and while I don't like to play the but-for card, both periods would have shown positive reserve developments on a neutral FX card. For the full year, we recorded 8.8 points of favorable development versus 11.2 points in 2020. Net investment income, similar to the first three quarters of 2023, showed significant improvement in Q4 as a result of the rising rates and an overall larger investment portfolio. This resulted in a 1.4% improvement in the annualized investment yield to 4.3% for Q4. For the full year, net investment income increased almost 250% with a 1.5% increase, investment yield improvement to 3.9%.

Both periods were impacted by FX movements, and Oh, Wow Wow, well, if they don't like to play the Buck for cards.

Higgins would've shown positive reserve development on a neutral FX basis.

For the full year, we recorded eight eight points of favorable development versus 11 two points in 2022.

Net investment income similar to the first three quarters of 'twenty three showed significant improvement in Q4 as a result of the rising rates and an overall a larger investment portfolio.

This resulted in a one four improvement in annualized investment yield to four 3% for Q4.

For the full year net investment income increased almost 250% with a 1.5 point.

Investment yield improvement to three 9%.

Ali: Specifically, in our fixed income portfolio, similar to the past, we maintain the overall credit rating at A, and average duration at 3.2 years. And most likely, we're probably going to see a slight duration increase over the next few quarters. Net income for the fourth quarter of 2023 was $33 million, compared to $22.5 million in the fourth quarter a year ago, and $118.2 million for the full year compared to $89.2 million

Specifically in our fixed income portfolio.

Similar to the past we maintain the overall credit rating at a average duration of three two years and.

And most likely a we're probably you're going to see a slight duration increase over the next few quarters.

Net income for the fourth quarter of 'twenty, three was 33 million compared to 22, and a half million in the fourth quarter a year ago.

And $118 $2 million for the full year compared to $89 2 million for 'twenty two.

Ali: The true measure of our performance is core operating income, which more than doubled in the fourth quarter and increased 42.5% for the full year 23 compared to the same period in 22. Just turning to the balance sheet, total assets increased more than 16%, to $1.84 billion, and total equity increased more than 31% to... $540 million for the full year. On the capital management front, we are increasingly demonstrating our ability to pull the right levers to maximize shareholder value. As we've always said, our priority is underwriting first.

The true measure of our performance in its core operating income, which more than doubled in the fourth quarter and increased 42, 5% for the full year of 23 compared to the same period in 2002.

Just turning to the balance sheet, our total assets increased more than 16%.

Two $1 $84 billion in total equity increased more than 31% to.

$540 million for the full year.

On the capital management front, we are increasingly demonstrating our ability to pull the right levers to maximize shareholder value.

As we've always said our priority is underwriting first.

Ali: And as we have said, where we have capital in excess of the opportunities to put it to work in underwriting, we will return it to shareholders. During 2023, we continue to repurchase common shares under our existing 5 million common share repurchase authorization, and you'll have the specifics in our press release issued last night. We've got around 1.3 million shares left under our existing authorization. And last night, we announced a special dividend of $0.50 per share, alongside the regular quarterly dividend of one cent per share. In addition, during the year, we redeemed all outstanding warrants for cash, at an average purchase price of $0.95 per warrant for a total cost of just over $16 million.

And as Walter said wherever you have capital in excess of the opportunities to put to work and underwriting we will return it to shareholders.

During 2023 we continued to repurchase common shares under our existing 5 million common share repurchase authorization.

And you'll have the specifics are in our press release issued last night.

Got around one 3 million shares left under our existing authorization.

Last night, we announced a special dividend of 50 cents per share.

Alongside the regular course of dividend the one cents per share.

In addition, during the year, we reserve, we redeemed all outstanding warrants for cash and.

At an average purchase price of 95 cents per warrants for a total cost of just over $16 million.

Ali: Ultimately, we recorded a core operating ROE of 23.7% for the fourth quarter and 28.1% for the full year 2020, which is the highest annual core operating ROE we've ever recorded in our 22-year history. We also grew our book value per share by almost 37% to $12.40 on December 31st. So all in, there really is a lot to be proud of in what we've achieved, and we continue to be optimistic about the year ahead. Moving on to our markets, we're seeing a continuation of the trends that we saw during 2023, and there continue to be a decent amount of profitable opportunities, most significantly in our short-tail and reinsurance segments. However, within these, rates and conditions continue to vary by line and by time. Just talking about the short-tail segment for a bit, we're most encouraged by conditions and opportunities in property engineering and PV. But all lines, really, with the exception of aviation, are holding up relatively well.

Ultimately, we recorded a core operating Roe.

Of 23, 7% for the fourth quarter and 28, 1% for the full year.

2023.

Which is the highest annual core operating ROE V. We've ever recorded in our 22 year history.

We also grew our book value per share by <unk>.

Almost 37% to $12.40.

At December 31st So I'll end, there and it really has lots to be proud of.

And what we've achieved there will be continue to be optimistic about the year right.

Moving onto our markets, we're seeing a continuation of the trends that we saw during 2023 and there continues to be a decent amount of profitable opportunities most significantly in our short tail reinsurance segments.

But within these rates and conditions continue to vary by line and by territory.

Just talking about the short tail segue for a basically we're most encouraged by conditions and opportunities in property engineering and P. P.

But all lines really with the exception of aviation are holding up well.

Relatively well.

Ali: Overall, in this segment, we've seen cumulative net rate increases of 9%, and that's fairly steady with what we saw throughout the year from the beginning. Again, there's a lot of variation by line of business, for instance, property seeing overall increases just shy of 14%, but these are higher in the US, for example, lower levels of increases in some other regions, and in some regions, we're seeing reductions. PV continues to see increases of 25% given the geopolitical events of the past few years. There is quite a bit of tension in many parts of the world.

Overall in this segment, we've seen cumulative net rate increases of 9%.

And that's fairly steady with what we saw throughout the year from the beginning.

Again, there's a lot of variation by line of business for instance property seeing overall increases just shy of 14%, but these are higher in the U S. For example.

Lower level of increases in some other regions in other and in some regions, where we're seeing reductions.

P. B continues to see increases of 25% given the you know the geopolitical events of the past few years.

There's quite a bit of attention in many parts of the world a 'twenty 'twenty four is also a happy election here.

Ali: 2024 is also a heavy election year across the globe, where more than 40% of the world will be heading to the polls. So we expect this to continue. So all in all, as we really said throughout 2023, the landscape overall for short-tail remains encouraging along with reinsurance and with continued opportunity and relatively positive rates. In our 3T reinsurance business, we saw cumulative net rate improvements of more than 25% in 23 and we expect the strong momentum to continue through our 2024, whilst most importantly keeping a close eye on our risk dollars. This is by far the most exciting area of our business, and there continues to be plenty of opportunity to write new business. We expect this portfolio to remain around 10% of our overall book for the foreseeable future, which is double historical levels. And at January 1st, rates held up quite well with continued positive momentum. The story in the long-tail segment, conversely, remains a little murkier.

<unk> across the globe are where we're more than 40% of the world will be heading to the polls.

So we expect.

This to continue.

So all in all as we really said throughout 2023, the landscape overall for short tail remains encouraging along with reinsurance.

And with continued opportunity in relative relatively positive rate momentum.

And our treaty reinsurance business, we saw cumulative net rate improvements of more than 25%.

And then in 'twenty, three and we expect the strong momentum to continue throughout 2024.

Well, most importantly, keeping a close eye on our risk tolerance.

This is by far the most exciting yeah, yeah, a bar business and there continues to be plenty of opportunity to write new business.

We expect this portfolio to remain at around 10% of our overall book for the foreseeable future, which is double our historical levels and a January 1st rates held up quite well with the continued positive momentum.

The story in the long tail segment. Conversely, it remains a little market rates continue to trend downwards, but mostly in an orderly manner adult.

Ali: Rates continue to trend downward, mostly in an orderly manner, though. Net rates overall are down slightly, but they're coming off several years of compound increases. The most important thing is that they remain broadly adequate across the board.

Net rates overall are down slightly but while they're coming off several years of compounded increases the.

The most important thing is there they remained broadly adequate across the portfolio.

Ali: Again, like the other areas of our business, there is much variety by law. We're continuing to take a cautious approach, a selective approach to this business, and I would expect growth in these lines to be quite challenging in 2020. Lastly, we've heard a lot this earnings season about social inflation, and once again, I'd just like to reiterate that IGI doesn't write any U.S. casualty business. So while we are impacted like everyone else by this environment, it doesn't impact us to the same magnitude it would impact U.S. casualties. Looking at our geographic markets, the U.S. definitely continues to outpace all other markets with rate increases of almost 20% in the lines we're writing. I'll remind you they're all short-tailed lines, including property, PV, energy, contingency, and cargo.

Again like.

Like the other areas of our business there must be obligation by line.

We're continuing to take a cautious approach a selective approach to this business and I would expect growth in these nice to be quite challenging in 2024.

Lastly, we've heard a lot this earnings season about social inflation.

Once again I'd, just like to reiterate the tide doesn't write any U S casualty business. So.

Well, while we are impacted like everyone else.

With this environment it doesn't impact us to the same magnitude you would to U S casualty underwriters.

Looking at our geographic markets the U S.

Definitely continues to outpace all other markets with rate increases of almost 20% in their lives we're writing.

I'll remind you, they're all short tailed lines, including property P V energy.

The contingency in cargo.

Ali: And these continue to be growth areas for us. In 2023, we wrote just over $94 million in GWP in the U.S., which represents growth over the same period of about 45% compared to 22. We recently also entered the U.S. construction market, but are taking a cautious approach here. We're writing small to medium-sized projects, shorter policy periods, and, as always, within strict CAT risk follow-up.

And these continue to be to be a growth area for us.

In 2023, we wrote just over $94 million in G. W. P. In the U S, which represents growth over the same periods of about 45% compared to 22.

We recently also entered the U S. Construction market, but are taking a cautious approach here, we're writing small to medium sized projects shorter policy periods.

And as always within strict cat risk tolerances.

Ali: In Europe, we rose over $80 million in GWP in 2023 versus about $62 million in 2022, and we expect to see more opportunities to show growth in the coming year ahead, especially given our newly opened platform in Oslo and Norway. In January this year, we added two new team members to our Oslo platform focusing on professional financial lines. And, as we've said before, this is in line with our expansion of relationships and product offerings in the Nordic market. In the Middle East, which makes up just under 10% of our overall GWP, conditions are quite mixed, with evidence of increasing competitive pressures in certain lines of business. But no doubt there are still pockets of opportunity, particularly in engineering and construction across the GCC countries. In summary, again, 2023 was an exceptional year for IGI. A year in which it really felt like we hit our stride.

In Europe, we wrote over $80 million in DWP in 2020 three versus about 52 million in 'twenty two and.

And we expect to see more opportunities to show growth in AR in the coming year ahead, especially given our newly open platform in the Oslo, Norway.

In January of this year, we added two tuned to two two new team members.

In Oslo platform are focusing on a professional and financial lines.

And as we've said before this is in line with our expansion of relationships and public offerings in the Nordic markets.

In the Middle East, which makes up about a under 10, just under 10% of our overall DWP conditions are quite mixed with evidence of increasing competitive pressures in certain lines of business.

But no doubt there are still pockets of opportunity, particularly in engineering and construction across the GCC.

GCC countries.

In summary, again 23 was an exceptional year for I G I Oh really.

And we really felt like we hit our stride.

Ali: We're gaining recognition from our various audiences, and all the feedback we've received has been quite positive. But we know that our work is not done, and we continue to keep our heads down. Bye, we keep our sleeves rolled up, and we remain steadfastly focused on the task at hand. That is, to continue to grow a strong, diversified, and profitable portfolio while actively managing the cyclicality and inherent volatility of our business, focusing on those lines and markets with the strongest margins, as we always say. And very importantly, pulling back when and where the conditions just aren't right. We can't control the relentless change in our markets and in the broader world around them.

We're gaining recognition for various audiences and.

All the feedback we received has been quite positive.

But we know that our work is not done and we continue to keep our heads down.

We keep our sleeves rolled up and believe me we remain steadfastly focused on the task at hand.

That is to continue to grow.

<unk> diversified and profitable portfolio, while actively managing the cyclicality.

Inherent volatility of our business.

Focusing on those lines and markets with the strongest margins as we always said.

And very importantly, pulling back when and where the conditions just aren't right for us.

We can't control, what's driving change in our markets and in the browser world around us conditions are constantly shifting.

Operator: Conditions are constantly shifting, and we're seeing more of that. Our success lies in our ability to understand and anticipate these dynamics and obviously to respond quickly and decisively and allocate our capital accordingly, which I think we're very good at, as we did throughout the last 12 months. We're going to continue to explore the best and most efficient uses of our capital so that we continue to deliver on our promise of maximizing value for our shareholders. We are very optimistic about our future and our ability to continue to deliver on that promise through consistently solid execution and prudent and active capital management underpinned by strong cooperation and collaboration from all of us at IGI. This is what is driving our success and our strong and successful track. So I'm going to pause here, and we'll turn it over for questions. Operator, we're ready to take the first question, please. We will now begin the question and answer session. To ask a question, you may press the star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

And we're seeing more of that lately.

Our success lies in our ability to understand and anticipate these dynamics.

And obviously to respond quickly and decisively and allocate our capital accordingly.

I think were very good that as.

As we did throughout.

The last 12 months.

Continue to explore the best and most efficient uses of our capital. So that we continue to deliver on our promise of maximizing value for our shareholders.

We are very optimistic about our future and our ability to continue to deliver on that promise through consistently solid execution and prudent and active capital management underpinned by strong cooperation and collaboration from all of US at the high G. Hi. This.

This is what is driving our success.

And our strong successful track records.

So I'm going to pause here and we'll turn it over for questions.

Operator, we're ready to take the first question. Please.

We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.

If youre using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press star and then two.

Operator: To withdraw your question, please press star and then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Scott Helniak with RBC Capital Markets. Please go ahead.

At this time, we will pause momentarily to assemble our roster.

Our first question comes from Scott, how would react with RBC capital markets. Please go ahead.

Scott Helniak: Good morning. Just a couple of quick questions on a few of the areas across your business. First, just the growth trends you're seeing in the U.S., E&S, and Europe for short-tail. It sounds like that's pretty promising.

Yes. Good morning, just a couple of quick questions on a few of the areas in your across your business first the just the growth trends you're seeing in U S. You would have in Europe for short tail. It sounds like that's that's pretty pretty promising I'm wondering if you could talk about just kind of a.

Ali: I'm wondering if you can talk about just kind of what sort of runway for growth you have there and whether you're seeing anything new on the competitive front. I know you mentioned some more challenging conditions in some of the other, in the long-tail, but anything new there to talk about on the competitive front? And then, you know, do you expect to see continued strong growth in that in the years ahead? Yes, Scott, thanks. Thanks for the questions. I mean, listen. There's no doubt that, you know, we're coming.

What sort of runway for growth you have there and whether you're seeing anything new on the competitive front I know you mentioned some are more challenging conditions in some of the other.

In the long tail, but anything new there to talk about on the competitive front and then and then.

Do you expect to see continued strong growth in that you.

You know in the years ahead.

Okay.

Yes, Scott Thanks for the question. So I mean, there's no doubt that.

You know where were coming.

Ali: Probably up to the tip of that hard market and a lot of these lines within the short tail segments. You know, we're not getting the rate increases we got in 22 and 21 and 20. But there are signs of more hungry competition in the market. The good sign is that it's not necessarily all new, you know; it's largely existing capacity that is getting hungrier rather than new capacity coming in, which tends to be the driver behind severe competition. So, you know, in 24, we don't expect to get the rate or achieve the rate increases in short tail that we necessarily have achieved in previous years. But again, it's all about rating adequacy rather than just rate movement.

Probably up to the to the to the tip of that a hard market and a lot of these lines within the short tail segments.

You know were not getting the rate increases we got in 'twenty, two and 'twenty, one and 'twenty. There are signs of more hungry competition are in the market.

The good sign is that it's not necessarily all need.

It's largely existing capacity that is getting hungry or rather than new capacity coming in which tends to be the driver behind severe competition. So you.

No in 'twenty four we don't expect to get the rate or achieved the rate increases and in short tail that necessarily we've achieved in previous years, but again, it's all about raising adequacy, rather than just rate movement and and I think we continue to see we will continue to see healthy opportunities throughout the.

Ali: And I think we will continue to see healthy opportunities throughout the year. I think growth in the long tail will definitely be challenged; growth in the short tail will also be more challenging, but the opportunities definitely will be there. For the US and Europe specifically, our books are relatively young, so the runway for growth in those areas for us is, I would say, more promising than the more established players in those markets. As we said, we're relatively underweight in Europe, although we are growing and investing, so we continue to expect continued growth for us in the US and Europe. So I hope that answers your question. Yeah, no, that's definitely helpful.

Gear.

I think growth in in in.

In long tail will definitely be challenged growth in short tail will also be more of a challenging but the opportunities definitely will will will will be there.

For U S and Europe, specifically, our books are are relatively young so the runway for growth in those areas for us. It is a I would say is is more promising than than than the more established players in those markets. As we said you know.

We're relatively underweight in Europe, although we are growing we are investing so we continue to expect a continued growth for us in the U S and Europe.

So I hope that answers your question.

Yeah, No. That's definitely helpful. I wanted to follow up just real quick too on the on the long tail.

Ali: I wanted to follow up just real quick, too, on the long tail, where it sounds like you're pulling back a little bit and the pricing isn't quite as good. It's maybe down a little bit. Was there any particular area that you want to call out, any areas or any lines that are specifically weaker, or is it just kind of generally a little bit weaker across the board, or is something kind of dragging that down more than any other line? I mean, but definitely, there's more competition on the finance institutions and DNO lines. The P.I. is a lot more flat, really, or was a lot more flat throughout 2023 than we saw in the F.I. and D.N.O.

For the year it sounds like you're pulling back a little bit into the pricing isn't quite as good it's maybe down a little bit was there any particular.

Area that you did you want to call out any areas or any lines that are.

Weaker or is it is it just kind of general a little bit weaker across the board or is there anything kind of dragging that down more than any any other line.

I mean, but definitely there's more competition on the finance institutions and D&O lines.

Lines the P. I you know.

There's a lot more Florida really or was it more flat throughout 2023 then.

Then we saw in the in the in the I find a D&O lines. It's P is definitely holding up better which makes up the vast majority of our long tail book So that's positive.

Ali: Lines. P.I. is definitely holding up better, which makes up the vast majority of our long-tail book, so that's positive. But as we said throughout 2023, the trends on the P.I. Both sides are in the same direction, so we will take a cautious approach. We've always said when conditions are healthy, we'll put our foot on the gas, and when they start to get more challenging, then we'll take the necessary steps and scale back if we have to. We're not necessarily quite there, per se.

But you know the trends as we said throughout 2023 the trends on the Pi side or are in the same direction. So.

You know, where we will take a cautious approach. We we've always said when when times are a win win when conditions are healthy we'll put our foot on the gas and when there are when they start to get more challenging.

And then you know, we'll we'll take the necessary steps and scaled back if we have to I don't think when necessarily quite there.

Per se I would also say that you know our.

Ali: I would also say that, you know, our renewable book is not necessarily a reflection of the market because there is a lot of business that we push away that is much more aggressively sought after that obviously does not get captured within our rate increases. So the rate increases we've mentioned are specifically for our portfolio and not necessarily a reflection of the market conditions. Okay, that's great.

Renewable book is nothing necessarily a reflection of the market because.

There is a lot of business that we push away that there's much more aggressively so sought after that obviously it does not get captured within our rate increases. So the rate increases we've mentioned are specifically to our portfolio and not necessarily a reflection of the market conditions themselves.

Okay. That's great just wanted to ask you about the.

Scott Helniak: Just wanted to ask too about the. No, you don't write about the U.S. casually, but can you just talk about what drove the accident year loss ratio improvement in the quarter year over year? I know probably some of that's mixed driven just because you're writing more short tail, but anything to comment on there, specifically on the loss trend front across your book? No, honestly, as you said, I mean, there's nothing specific that, you know, that sticks out.

You don't write U S casually, but can you can you just talk about what drove the accident year loss ratio improvement in the quarter year over year I know probably some of that's mix driven just because you were writing more short tail, but anything to comment on there specifically on the loss trend across your book.

No honestly I mean, as you said I mean, there's nothing specific that are.

Yeah that.

Sticks out I think we're just following that we've always said we will shift focus towards the are areas, where we believe margins are gonna be highest.

Ali: I think we're just following it. We've always said we'd shift focus towards the areas where we believe margins are going to be highest, and reinsurance was definitely one of them this year.

And reinsurance was definitely one of them this year and and and you know by and large it was a more benign loss.

Ali: And, you know, by and large, it was a more benign loss year as a market uh... uh... uh... as well, so we got the benefit of that along with other players. One final one, just on the special dividend, that was a nice surprise and something new for you guys. I wonder if you could talk about just some of the factors that you guys considered that led you to the special dividend versus the non-special dividend or other areas of capital return or growth. I know you mentioned excess capital, but anything more you can comment on that, how you were thinking about that in terms of ultimately declaring special business? I mean, as you know, I mean, a couple of years ago, we announced a new capital management strategy where we, where we had, announced a new ordinary dividend.

As the market as well so we got benefit of that is in line with with other players.

Okay, Great and then just one final one just on the on the special dividend that was.

I surprised not something new for you guys, but I wonder if you could talk about just some of the factors that you guys considered that led you to the special dividend versus.

Are there other areas of capital return or our growth and I know I know you mentioned excess capital, but just.

Anything more you can kind of comment on that how you. How you. How you came to how you were thinking about that in terms of ultimately declaring special dividend.

I mean as you know I mean, a couple of years ago, We announced a new capital management strategy, where we were we had.

And now it's a new a new ordinary dividend.

Ali: We saw the opportunities in the market, Scott, and as we've said, it's underwriting first and foremost. We went towards growing the portfolio when the opportunities were there, which we have done. We announced a share buyback program, which we felt would be most beneficial to shareholders, adding and creating value. We used those funds to buy back the warrants last year.

We saw the opportunities in the market, Scott and and as we've said it's underwriting first for us.

First and foremost we went towards growing the portfolio when we when the opportunities weren't there, which we have done we announced a share buyback program, which we felt would be.

Most beneficial to our shareholders and adding and creating value Ah we use those funds to buy back the warrants are lost here, but in all honesty the returns.

Ali: But in all honesty, the returns that we've achieved over the last couple of years have exceeded our expectations, and the returns we've made are extremely healthy, some of the best in the market, allowing us with the financial flexibility to be able to declare a dividend on top of all the actions that we took in 2023, and a recognition of the support that our shareholders have given us and the rewards they deserve. Capital wise, we remain very adequate, and with Great I appreciate all the answers.

We've achieved over the last couple of years have exceeded our expectations and are the returns we've made or are extremely.

Healthy some of the best in the market, allowing us with the financial flexibility to be able to declare a dividend on top of all of the actions that we took in in 2023.

And in recognition of the support of our shareholders.

Have given us and the rewards that they deserve so you know our capital wise.

Oh, you remain very adequate and with this dividend. We we are you know.

Confident we've got.

The runway and the capital to for Us to continue on that runway of growth.

Great I appreciate all the answers.

Operator: Thank you, Scott. That concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks. Thank you, and thank you all for joining us today, and thank you for your continued support of IGI. If you have any additional questions, please contact Robin, and she will be happy to assist. We look forward to speaking to you on next quarter's call. Have a good day, everyone. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Thank you Scott.

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

Okay.

Thank you and thank you all for joining us today and thank you for your continued support of <unk>. We have any if you. If you have any additional questions. Please contact Robyn and she will be happy to assist you.

We look forward to speaking to you on next quarter's call have a good day everyone. Thank you.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.