Q1 2025 International General Insurance Holdings Ltd Earnings Call
Operator: Good day and welcome to the International General Holdings LTD's first quarter 2025 financial results conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero.
Good day and welcome to the International General Holdings.
Speaker Change: L. T DS first quarter 2025 financial results conference call all participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star then 2.
Speaker Change: After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad.
Speaker Change: To withdraw your question. Please press Star then two.
Operator: Please note this event is being recorded.
Speaker Change: Please note. This event is being recorded I would now like to turn the conference over to Robyn Sitters head of Investor Relations. Please go ahead.
Robin Sidders: I would now like to turn the conference over to Robin Sidders, Head of Investor Relations. Please go ahead. Thanks, Scott, and good morning and welcome to today's conference call.
Robyn Sitters: Thanks, Scott and good morning, and welcome to today's conference call today, we'll be discussing our first quarter 2025 result.
Robin Sidders: Today, we'll be discussing our first quarter 2025 results. We issued our press release last night, which you would have seen after the market closed. If you'd like a copy of the press release, it's available in the investor section of our website. We also posted a supplementary investor presentation, which can be found on our website on the presentation page in the investor section.
Speaker Change: Our press release last night.
Speaker Change: But you would have seen after the market closed.
Speaker Change: If you'd like a copy of the press release is available in the investors section of our website. We also posted an investor presentation, which can be found on our website on the purchase presentation in the investor.
Speaker Change: Yes.
Robin Sidders: On today's call are Executive Chairman of IGI, Wasef Jabsheh, President and CEO, Waleed Jabsheh, and Chief Financial Officer, Pervez Rizvi. As always, Wasef will begin the call with some high-level comments before handing over to Waleed to talk through the key drivers of the results for the first quarter and finish up with our views on market conditions and our outlook for the rest of the year.
Speaker Change: On todays call are executive chairman of Hershey, I lost a job site, president and CEO, while the job say Chief financial Officer progressed risky as always Watson will begin the call. Some high level comments before handing over to Walid to talk through the key drivers of the results for the first quarter and finish up with our view.
Speaker Change: On market conditions, and our outlook for the rest of the year at that point, we'll open the call up for Q&A I'll begin with some customary safe Harbor language.
Robin Sidders: At that point, we'll open the call up for Q&A.
Robin Sidders: I'll begin with some customary harbor language. Our speakers' remarks may contain forward-looking statements. Some of the forward-looking statements can be identified by the use of forward-looking words. We caution you that such forward-looking statements should not be regarded as a representation by us. The future plans, estimates, or expectations contemplated by us will, in fact, be achieved. Forward-looking statements involve risks, uncertainties, and assumptions. Actual events or results may differ materially from those projected in the forward-looking statements due to a variety of factors, including the risk factors set forth in the company's annual report on Forms 20-F for the year end of December 31, 2024, the company's reports on Form 6-K, and other filings with the SEC, as well as our results press release issued yesterday evening.
Speaker Change: Our speakers remarks may contain forward looking statements. Some of the forward looking statements can be identified by the use of forward looking words.
Speaker Change: Caution you that such forward looking statements should not be regarded as a representation by us that the future plans estimates or expectations contemplated by us will in fact be achieved.
Speaker Change: Forward looking statements involve risks uncertainties and assumptions actual events or results may differ materially from those projected in the forward looking statements due to a variety of factors, including the risk factors set forth in the company's annual report on form 20-F for the year ended December 31 for the company's reports on form 6K.
Speaker Change: <unk> and other filings with the SEC as well as our results press release issued yesterday evening.
Robin Sidders: We undertake no obligation to update or revise publicly any forward-looking statements which speak only as of the date they are made.
Speaker Change: We undertake no obligation to update or revise publicly any forward looking statements, which speak only as of the date. They are made.
Robin Sidders: During this conference call, we 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.
Speaker Change: During this conference call, we use certain non-GAAP financial measures for a reconciliation of non-GAAP financial measures measures to the nearest GAAP measure. Please see our earnings release, which has been filed with the SEC and is available on our website.
Wasef Jabsheh: And with that, I'll turn the call over to our Executive Chairman, Wasef Jabsheh. Thank you, Robin, and good day, everyone. Thank you for joining us on today's call. as you saw from our first quarter results that we issued last night. We had a relatively good start to 2025 in spite of significantly elevated loss environment as well as macroeconomic uncertainty and much volatility. Our combined ratio of 94.4% clearly demonstrates the value of our diversification strategy and the resilience that we have built in our company. While we experienced significant volume of market losses this quarter, for the first time in many quarters.
Speaker Change: And with that I'll turn the call over to our executive Chairman wants a gesture.
Speaker Change: Thank you Robert.
Speaker Change: Good day, everyone. Thank.
Speaker Change: Thank you for joining us on today's call.
Speaker Change: As you saw from our first quarter results that we issued last night.
Speaker Change: We had a good start to 2025 as part of significantly elevated loss environment as well as macroeconomic uncertainty and market volatility.
Speaker Change: Our combined ratio of 94, 4% clearly the wall streets.
Speaker Change: Value of our diversification strategy.
Speaker Change: And the resilience that we have been.
Speaker Change: Great.
Speaker Change: Yeah.
Speaker Change: Why do we experienced significant volume market losses this quarter for the first time in many quarters.
Wasef Jabsheh: We continue to deliver excellent value for our shareholders. For the second consecutive year, we paid a special dividend during the first quarter, this year of $0.85. and in total returned $43.5 million to shareholders during this period.
Speaker Change: We continue to deliver excellent value for our shareholders.
Speaker Change: For the second consecutive year, we bid special dividend during the first quarter.
Speaker Change: This year of 85 cents.
Speaker Change: And in total.
Speaker Change: $43 5 million downloads.
Speaker Change: Shareholders during this period.
Speaker Change: Yes.
Wasef Jabsheh: The events of the first quarter once again underscore why we exist. We are here to provide peace of mind in times of uncertainty. That is our purpose. We are paid to assume volatility and we are strategically positioned to absorb it and mitigate it as much as possible for our clients and customers. At IGI, we have built a very solid platform that is designed to manage market cycles and the volatility that is the nature of our business. We have deep technical underwriting talent. people who understand the dynamics of their business. who stay close to their markets and respond quickly to changes as they are occurring.
Speaker Change: The events of the first quarter once again underscore why we exist. We are here to provide peace of mind in times of a surcharge.
Speaker Change: This is our purpose we are paid to assume.
Speaker Change: Our activity and we are strategically positioned.
Speaker Change: Absorbing and mitigated as much as possible four O R.
Speaker Change: <unk> customers.
Speaker Change: At the RG I we.
Speaker Change: We have built a very solid last fall that is designed to manage market cycles and devoted to that is the nature of our business.
Speaker Change: We have deep technical and direct downloads.
Speaker Change: People, who understand the dynamics of that business.
Speaker Change: Whose stay close to their markets and respond quickly to changes.
Speaker Change: Okay.
Wasef Jabsheh: Our track record demonstrates our ability to maintain our discipline, execute consistently and move our capital to those areas with the strongest rate momentum and the highest margins while always working with our risk appetite and tolerance. I am comfortable and confident with the foundation we have at IJI to continue to deliver on our promise. not just to be stable and reliable partner to our clients and customers. but to generate good value for our shareholders over the long term.
Speaker Change: Our track record demonstrates our ability to maintain our discipline.
Zach Koff: Zach Koff astutely.
Zach Koff: And more are kept them to those areas with the strongest three momentum.
Zach Koff: And the highest margins.
Zach Koff: Why all of us working with our risk appetite and tolerances.
Zach Koff: Okay.
Zach Koff: I am comfortable and confident with the foundation, we have Ari continues to deliver.
Zach Koff: Our promises.
Zach Koff: Not just to be stable.
Zach Koff: And reliable partner to our clients and customers.
Zach Koff: But to generate good value for our shareholders over the long term.
Wasef Jabsheh: I will now.
Zach Koff: I will now.
Wasef Jabsheh: Let Waleed discuss the numbers in more detail and talk about market conditions and our outlook for the year ahead. I will remain on the call for any questions at the end.
Zach Koff: Literally discuss the numbers in more detail and talk about market conditions.
Zach Koff: Our outlook for the year ahead.
Speaker Change: I will remain on the call for any questions Dan.
Zach Koff: Okay.
Waleed Jabsheh: Thank you, Wasef.
Speaker Change: Thank you Austin, good morning, everyone and thanks for joining us.
Waleed Jabsheh: Good morning, everyone. And thanks for joining us on today's call. As Wasef noted, it's definitely been an eventful start to the year for our industry, with the significantly elevated loss activity, economic, financial, market volatility, and of course, the rising global geopolitical tensions across many areas across the globe. Now more than ever the promises we've made to our stakeholders ring true and our purpose of providing peace of mind in times of uncertainty comes sharply into focus. Our structure and strategy at IGI is especially valuable when considering the context of the current uncertainty and our long-term perspective.
Speaker Change: Today's call as lots of noted it's definitely been an eventful start to the year for our industry.
Speaker Change: With the significantly elevated loss activity economic financial market volatility.
Speaker Change: And of course, the rising global tension geopolitical tensions across many areas across the globe.
Speaker Change: Now more than ever the promises we've made to our stakeholders ring true.
Speaker Change: The purpose of providing peace of mind and consequent certainly become sharply into focus.
Speaker Change: Our structure and strategy at Agi, especially valuable when considered in the context of the current uncertainty and our long term perspective, we've said many times there were not a quarter to quarter or even a year to year company. We're here for the long haul.
Waleed Jabsheh: We've said many times that we're not a quarter-to-quarter or even a year-to-year company. We are here for the long haul. and we've demonstrated our ability to navigate uncertainty and volatility many times in our history and now is no different. We will protect our portfolio, find opportunities where we can and remain committed to servicing our clients and customers as best as we can whilst generating the best value we can for our shareholders.
Speaker Change: And we've demonstrated our ability to navigate uncertainty and volatility many times.
Speaker Change: Our history and now is no different.
Speaker Change: We will protect our portfolio find opportunities where we can.
Speaker Change: And remain committed to servicing our clients and customers as best as we can.
Speaker Change: Whilst generating the best value, we can for our shareholders.
Waleed Jabsheh: Thank you.
Waleed Jabsheh: Bye-bye.
Speaker Change: Mhm.
Waleed Jabsheh: And as a side note, recently we had the privilege of watching the London Marathon through the streets of our city. I'm not a runner myself, but it occurred to me that what we do with IGR is very much like how a runner prepares for a marathon. They train for months, often years. They maintain a high level of discipline, strong will, and consistency in how they prepare so they can endure through any conditions when the time comes. They stay focused and they avoid distraction. And when marathon day arrives, they go out and they get the job done.
Speaker Change: On a side note I mean read recently, we had the privilege of watching the London marathon through the streets of by city.
Speaker Change: I'm not a runner myself, but.
Speaker Change: It occurred to me that but we do with <unk> is very much like how I run a prepared for marathon to train for months often years to maintain a high level of discipline strong well and consistency in how they prepare so they can endure through any conditions when the time comes they.
Speaker Change: Please stay focused and they avoid distraction and when marathon day arrived they go out and they get the job done.
Waleed Jabsheh: Our business takes discipline, planning and strong execution. It also takes a lot of patience. We stay focused on the road ahead so that we're fully prepared when our clients need us most. It's easy to sometimes forget just how risky the world is when we have prolonged periods without intense loss activity as we've had in recent years. So the events of the first quarter certainly serve as a stark reminder for our industry, why we do what we do, and why it's absolutely critical we stay focused. Our financial results were solid in Q1, even with a higher level of natural catastrophes.
Speaker Change: Our business takes discipline planning and strong execution.
Speaker Change: It also takes a lot of patients with.
Speaker Change: Stay focused on the road ahead, so that we're fully prepared when our clients need us most.
Speaker Change: It's easy to sometimes forget just how risky the world is when we have prolonged periods without intense loss activity as we've had in recent years.
Speaker Change: So the events of the first quarter certain distributors stock reminder, for our industry why we do what we do and why is absolutely critical we stay focused.
Speaker Change: Our financial results were solid in Q1, EBIT with the higher level of natural catastrophes, we've had the a.
Waleed Jabsheh: We've had the LA wildfires, of course, and other global cat events, as well as a generally higher level of large risk loss. in the specialty lines we write, notably energy and property. These lines, as you're all aware, are by nature higher in severity. in addition to significant volatility in financial markets and a general sense of uncertainty. We also saw a heightened foreign exchange volatility. Some degree of currency volatility has been a regular feature in our financial results. and at times it can be further amplified when the US dollar, our reporting currency, weakens against our major transactional currencies, the pound in particular.
Speaker Change: And the wildfires of course in other global Cat event.
Speaker Change: Well in a generally a higher level of large risk losses.
Speaker Change: In the specialty Brian the lines, we are right, notably energy and property.
Speaker Change: These lines as you're all aware are by nature higher severity.
Speaker Change: In addition to significant volatility in financial markets in a general sense of uncertainty.
Speaker Change: We also saw a heightened foreign exchange volatility.
Speaker Change: Some degree of currency balances he had been a regular feature in our financial results.
Speaker Change: Times it can be further amplified when the U S dollar our.
Speaker Change: Our reporting currency weakens against.
Speaker Change: Our major transactional currencies the pound in particular.
Waleed Jabsheh: and we saw that in the first quarter. So definitely some noise in our numbers and where relevant, I'll point out currency impacts in our key metrics. From a top line perspective, we grew GWP by over 13% to just over $260 million. And this was primarily driven by growth in the reinsurance segment. and that's where we continue to take advantage of a healthy, positive rating environment. Net earned premium was just under $113 million, and that included a charge of $7.3 million of retail premiums paid on loss-affected accounts to our reinsurers. That was split between the short and long-tail segments.
Speaker Change: And we saw that in the first quarter.
Speaker Change: So definitely some noise in our numbers and where relevant I will point out currency impacts and our key metrics.
Speaker Change: From a top line perspective, we grew GW P by over 13% to just over $206 million and this was primarily driven by growth in the reinsurance segments.
Speaker Change: And that's why we continue to take advantage of a healthy positive rating environment.
Speaker Change: Net earned premium was just under $113 million and that's included a charge of $7 3 million of reading the tea opinions paint on loss affected accounts to our reinsurers and that was split between short and long tail between the short and long tail segments.
Waleed Jabsheh: I just remind you that we are active buyers of reinsurance to protect against volatility in the high severity lines of business that we write. Combined ratio of 94.4% reflects the higher level of losses. as well as the lower volume of net earned premium as a result of the real estate premiums I just mentioned and the impact that had on the net earned numbers. in addition as well as approximately 10 points of currency revaluation impact on non-U.S. dollar reserves. So here, the comparison to Q1 of 2024 is somewhat exaggerated by the impact of currency where Q1 2025 was negatively impacted.
Speaker Change: I'd just remind you that we are active buyers of reinsurance to protect against volatility and the high severity lines lines of business that we write.
Speaker Change: Combined ratio of 94.4% reflects the higher level of losses.
Speaker Change: As well as the lower volume of net earned premium as a result of the restatement themes I just mentioned and the impact that had on the internet turned numbers.
Speaker Change: In addition, as well as approximately 10 points of Coke of currency revaluation impact on non U S dollar reserves.
Speaker Change: So here the comparison to Q1 of 'twenty 'twenty four is somewhat exaggerated by the impact of currency, where Q1 2025 was negatively impacted.
Waleed Jabsheh: while the Q1 2024 combined ratio benefited from approximately four to five points of currency revaluation. So on a like-for-like basis we're talking about quarter over quarter deterioration in the combined ratio of about six to seven points rather than the 20 points that we see on the numbers. I mean, it's never an exact science, obviously, but this just helps to illustrate the impact that currency plays. All in, we delivered net income of $27.3 million or $0.59 per share versus $37.9 million or $0.84 per share in Q1 of 2024. And again, this was due to a lower level of underwriting income impacted by the loss activity and the higher level of net green statement premiums paid on the losses that we've incurred.
Speaker Change: The Q1 2024 combined ratio benefited from approximately four to five points of currency revaluation. So on a like for like basis, we're talking about quarter over quarter deterioration in combined ratio of about six to seven points rather than the 20 points.
Speaker Change: We see in the numbers.
Speaker Change: I mean, it's never an exact science, obviously, but this just helps.
Speaker Change: It's straight the impact that currency plays.
Speaker Change: All in we delivered net income of $27 3 million or 59 cents per share versus 37, 9 million or 84 cents per share in Q1 of 2024 and again. This was due to a lower level of underwriting income impacted by the loss activity higher level of.
Speaker Change: And the higher level of bonds.
Speaker Change: Net reinstatement premiums paid on the losses that we've incurred.
Waleed Jabsheh: Co-operating income was 19.5 million or 42 cents per share, compared to 40 million or 89 cents per share. Again, for the same reasons of the lower level of underwriting income, heightened loss, and the heightened losses specifically added 25 points of current accident year or included 25 points of current accident year cat loss. Catastrophes during the quarter included the California wildfires as we mentioned earlier, earthquakes in Taiwan, and to a lesser extent a canal breach due to severe flooding here in the UK. These events impacted both the reinsurance and short-tail segments. In addition, we experienced a higher volume of large risk losses in our short-tailed segment and an aggregation of small and medium-sized losses in our long-tailed segment.
Speaker Change: Core operating income was $19 5 million or 42 cents per share.
<unk> 240 million or 89 cents per share again for the same reasons of the.
Speaker Change: Lower level of underwriting income heightened loss.
Speaker Change: And the heightened losses, specifically added 25 points of current accident year.
Speaker Change: <unk> included 25 points of current accident year cat losses.
Speaker Change: Cat losses during the quarter included the California wildfires as we mentioned earlier earthquakes in Taiwan and to a lesser extent a canal breach due to severe flooding here in the U K.
Speaker Change: These events impacted both the reinsurance and short tail segment.
Speaker Change: In addition, we experienced a higher volume of large risk losses in our short tail segments.
Speaker Change: And aggregation of small medium sized losses in our local segment.
Waleed Jabsheh: I would note that the heightened loss activity we experienced in the first three months doesn't appear to be the result of anything systemic that we're seeing. A prior year development was favorable in the quarter by $25.8 million. And again, this is where we see the impact of currency movements. The net positive development was primarily driven by positive experience in recent years in the short-tail segment, primarily in the property and energy lines, both international and U.S., and to a lesser extent, the reinsurance segment as well. This was partially offset by some negative development in the long-tail segment.
Speaker Change: I would note that the the heightened loss activity we.
Speaker Change: We experienced in the first three months.
Speaker Change: It doesn't appear to be any the result of anything systemic that we see.
Speaker Change: Prior year development was favorable in the quarter by 25.
Speaker Change: $8 billion.
Speaker Change: And again this is where we see the impact of currency movements.
Speaker Change: The net positive development was primarily driven by positive experience in recent years and the short tail segment.
Speaker Change: Primarily in the property and energy lines, both international and U S. A.
Speaker Change: And to a lesser extent the reinsurance segments as well.
Speaker Change: This was partially offset by some negative development in the long tail.
Waleed Jabsheh: Here, the negative prior year development was inflated by around $6.5 million and $8 million overall, including Q1, all a part of the currency revaluation. As you're aware, that business is largely transacted in pound sterling, where the short-tail and reinsurance segments are predominantly transacted in US dollars or dollar-pegged currencies.
Speaker Change: Segments ear the negative prior year development was inflated by around six and a half million dollars in.
Speaker Change: An $8 million overall, including Q1.
Speaker Change: All are part of the currency devaluation.
Speaker Change: As you are aware that this is largely transacted in pounds Sterling, where the shortcut on reinsurance segments are predominantly transaction dollar U S dollar resort or dollar pegged currencies.
Waleed Jabsheh: And I'll talk a little bit more about the long-tail segment in a moment. Scott Heleniak, Waleed Jabsheh, Robin Sidders, Wasef Jabsheh, Waleed Jabsheh, Robin Sidders, The G&A expense ratio showed marginal improvement to 19.1% from 19.5% for the same period of last year, and we expect that given the substantial growth of the previous three years, an expense ratio in the region of 18 to 19% is a more reasonable go-forward rate.
Speaker Change: And I'll talk about a little bit more about the long tail segment.
Speaker Change: Moment.
Speaker Change: Yeah.
Speaker Change: G&A expense ratio.
Speaker Change: Showed marginal improvement to 19.1.
Speaker Change: Your sense from 19.
Speaker Change: 5% for the same period last year, and we expect that given the substantial growth of the previous three years and.
Speaker Change: On the expense ratio in the region of 18% to 19% is a more reasonable go forward with.
Waleed Jabsheh: Some comments on our segment results. If we start with the short tail segment, gross premiums were up 2% in Q1. Earned premium was down 5.3% when compared to the same quarter last year, reflecting the impact of reinstated premiums on our reinsurance purchases, as mentioned previously. Consequently, underwriting income was also down in the first quarter, driven largely by the higher level of losses and, again, the reinstated premiums. We continue to see business opportunities in a number of lines, specifically contingency, ports and terminals, marine cargo, and, to a lesser degree, property lines.
Speaker Change: Some comments on our segment results.
Speaker Change: If we start with a short tail segment.
Speaker Change: Gross premiums were up 2% in Q1.
Speaker Change: Premium was down five 3% when compared to same quarter last year.
Speaker Change: Reflecting the impact of Brinci in premiums in our reinsurance purchases as mentioned previously.
Speaker Change: Consequently.
Speaker Change: Underwriting income was also down in the first quarter.
Speaker Change: Driven largely by the higher level of losses, and again W has taken premiums we continue to see business opportunities in a number of lines specifically contingency.
Speaker Change: Ports and terminals marine cargo and to a lesser degree a property lines.
Waleed Jabsheh: We've mentioned this on prior calls. I would also single out our engineering portfolio, which is doing extremely well and has grown significantly in the first quarter versus the Q1 of 2024. Our teams are capitalizing on opportunities in the US, across the MENA region and Asia-Pacific region. The reinsurance treaty segment, as you all know, is well diversified both by geography and by underlying business lines, showed very positive top-line growth of almost 44% driven by new business. The new business generated at 1.1 and throughout the quarter was mostly in our specialty treaty book, predominantly governing marine energy, PV terror, and to a lesser extent property.
Speaker Change: We have we've mentioned this on prior calls our I would also single aisle our engineering portfolio.
Speaker Change: Which is doing extremely well and has grown significantly in the first quarter versus the Q1 of 'twenty four.
Speaker Change: Our teams are capitalizing on opportunities in the U S across.
Speaker Change: Across the Mena region and Asia.
Speaker Change: Asia Pac regions.
Speaker Change: The reinsurance Treaty segment as you all know is well diversified both by geography and by our underlying business lines showed very positive topline growth of almost 44% driven by our new business new business generated at a one one and throughout the quarter.
Speaker Change: It was mostly in our specialty Treaty book.
Speaker Change: Predominantly governed marine energy PV terror and to a lesser extent property.
Waleed Jabsheh: While rates at 1.1 were broadly off-peak by about 10 to 15 percent as we said on last quarter's call, the new business still benefited from strong rating adequacy and earned premium and underwriting income were up 48 and 53 percent respectively.
Speaker Change: While race at one one rolls the off peak by about a 10th.
Speaker Change: 10% to 15% as we said on our last.
Speaker Change: Last quarter's call. This the the new business still benefiting from.
Speaker Change: Strong rating adequacy.
Speaker Change: And one team underwriting.
Speaker Change: Earned premium and underwriting income were up 48.
Speaker Change: And 53% respectively.
Waleed Jabsheh: Long tail segment definitely remains the most challenging area of our portfolio and this was clear again in the first quarter. Premiums were up slightly, a couple of million dollars in the first quarter driven by essentially new marine liability business in the aftermath of the Baltimore Bridge collapse last year. This segment has now seen several consecutive quarters of top line contraction and we continue to be very cautious and disciplined in risk selection here as rates continue to decline, although the pace of that decline has slowed somewhat. We record an underwriting loss of seven and a half million dollars versus an underwriting profit of around 10 million dollars in Q1 last year and this is driven by a number of factors.
Speaker Change: Long tail segment definitely remains the most challenging area of our portfolio and this was clear again in the.
Speaker Change: The first quarter.
Speaker Change: Premiums were up slightly couple of million dollars in the first quarter driven by essentially new marine liability business in the aftermath of the Baltimore Bridge collapsed last year.
Speaker Change: This segment has seen now is now seen.
Speaker Change: Several consecutive quarters of top line contraction and we continue to be very cautious and disciplined in risk selection here as rates continue to decline.
Speaker Change: Although the pace of that decline has slowed somewhat.
Speaker Change: We recorded an underwriting loss of $7 $5 million versus an underwriting profit.
Speaker Change: Around $10 million.
Speaker Change: Q1 last year and is driven by a number of factors first.
Waleed Jabsheh: First, is the highest higher level of loss activity, including aggregation of smaller losses. Secondly, the impact of effects, which is most pronounced on this in this segment, and which elevated losses by around $8 million. And third, the impact of reinstatement premiums. I would note here, too, that we are reviewing one area of the PR portfolio, which we're not very pleased with the performance of and we may opt to discontinue going forward.
Speaker Change: This is the highest the higher level of loss activity.
Speaker Change: The aggregation of smaller losses.
Speaker Change: Secondly, the impact of FX, which is more.
Speaker Change: Most pronounced on this in this segment and which elevated losses by from $8 million.
Speaker Change: And third the.
Speaker Change: The impact of reinstatement premiums.
Speaker Change: Of note here too that we are.
Speaker Change: Reviewing one area of the Ti portfolio, which were not very pleased with the performance.
Speaker Change: We may opt to.
Speaker Change: Discontinued going forward again, nothing really systemic that we see.
Waleed Jabsheh: Again, nothing really systemic that we're seeing.
Waleed Jabsheh: If we turn to the balance sheet, total assets increased by almost 3% to $2.1 billion. Total investments in cash was $1.3 billion. Allocations fixed income securities, which makes up around 80% of our investments in cash portfolio, generated $13.6 million in an increase of more than 15% from Q1 of 2024, with a yield of 4.3%. We also edged out the duration slightly to 3.4 years during Q1, just to lock in higher rates on new bonds.
Speaker Change: If we turn to the balance sheet total assets increased by almost 3% to $2 1 billion.
Speaker Change: Total investments and cash was $1 3 billion.
Speaker Change: Allocations to fixed income securities.
Speaker Change: Seven which makes up around 80% of our Uh huh.
Speaker Change: Our investments in cash portfolio generated a $13 6 million in investment income.
Speaker Change: An increase of around more than 15% from Q1 of 2024.
Speaker Change: With a yield of four 3% and we urge also edged out the duration slightly to three four years.
Speaker Change: During Q1, just to lock in higher rates.
Speaker Change: Newborn.
Waleed Jabsheh: in Q1 repurchased almost 160,000 common shares. Average price per share of $23.80. As of the end of Q1, this leaves approximately 2.1 million shares outstanding or remaining under our existing 7.5 million repurchase authorization. Total equity was just over $650 million at the end of the quarter and that included the impact of share repurchases and the payment of about just under $40 million in common share dividends, including the special dividends as Wasef mentioned of $0.85 earlier this year. This compares total equity of just under $655 million at the end of 2024. Ultimately, we recorded a return on average shareholder equity of 16.7% for Q1, book value per share was $14.65.
Speaker Change: In Q1, we repurchased almost 160000.
Speaker Change: Common shares.
Speaker Change: Average price per share of $23, an 80 cents.
Speaker Change: As of the end of Q.
Speaker Change: Q1 is.
Speaker Change: Leaves approximately $2 1 million shares outstanding our remaining under our existing seven 5 million shares.
Speaker Change: Seven 5 billion repurchase Butler.
Speaker Change: A lot of our nation.
Speaker Change: Total equity was just over $650 million at the end of the quarter.
Speaker Change: And that included the impact of share repurchases and the payment of about just under $40 million and common share dividends, including the special dividends as Bob had mentioned that maybe folks since earlier this year.
Speaker Change: This compared to total equity.
Speaker Change: Just under $655 million at the end of 2024.
Speaker Change: Ultimately we recorded a return on average our shareholders' equity of 16, 7% for Q1 book value per share was $14 65.
Waleed Jabsheh: From a total return perspective, book value per share plus dividends increased by 4.5% at the end of Q1 from end of last year, and we returned $43.5 million to shareholders in share repurchases and dividends in the first quarter. So as I said at the outset, a relatively good quarter for IGR notwithstanding all the moving pieces and generally tougher market conditions. What our results demonstrate is not only the resilience of the portfolio we've built, but also the value of our diversification strategy and the excellent and experienced teams we have. Looking ahead, I'm confident that we can continue to find good opportunities to write new business across many lines within our portfolio.
Speaker Change: From a total return perspective book value per share plus dividends increased by four 5%.
Speaker Change: At the end of Q1 from from.
End of last year, and we returned 43 and a half billion dollars to shareholders in.
Speaker Change: Share repurchases and dividends in the first quarter.
Speaker Change: So as I said at the outset, a relatively good quarter for Agi, notwithstanding all the moving pieces and generally tougher market conditions.
Speaker Change: What our results demonstrate not only the resilience of the portfolio, we built but also the value of our diversification strategy and the excellent.
Speaker Change: Experienced teams we behalf.
Speaker Change: Looking ahead I'm confident.
Speaker Change: We can continue to find good opportunities to write new business across many lines within our portfolio.
Waleed Jabsheh: On the flip side of the equation, obviously, is some contraction in top line we are seeing and may continue to see in other areas of our portfolio where profitability and or coverages just don't meet our thresholds. Again, our diversified strategy gives us more optionality and more levers to work with, and our on-the-ground presence in international markets really does make A difference to us in seeing emerging trends and responding quickly and decisively. I mean, these markets are becoming stronger and more relevant, and their ability and desire to retain more business locally within their markets is growing.
Speaker Change: On the flip side of the equation, obviously is some contraction in top line, we are seeing and May continue to see in other areas of our portfolio where profitability.
Speaker Change: And or coverages, just don't meet our thresholds.
Speaker Change: Our diversified strategy gives us more optionality in more level more levers.
Speaker Change: To work with and our on the ground presence in international markets really does make.
Speaker Change: A difference to us in seeing emerging trends in responding quickly and decisively.
Speaker Change: I mean, these markets are becoming stronger and more relevant and their ability and desire to retain more business locally within their markets is growing and we definitely benefit from being on the ground in all these locations.
Waleed Jabsheh: And we definitely benefit from being on the ground in all these locations.
Waleed Jabsheh: specifically on what we're seeing in our markets. I mean, there's no doubt there's clearly a heightened degree of competitive pressure. If we start with the long tail segment, I mean, overall, net rates remain adequate in many areas despite several consecutive quarters of decline. there's no doubt our margins are getting squeezed and we continue to see some signs of rates but we continue to see some signs of rates stabilizing, not broad stabilizations but in some areas. An example is parts of our PI portfolio where the pace of the rate decline is slowing and the book overall is still rate adequate.
Speaker Change: Specifically on what we're seeing in our markets.
Speaker Change: I mean, there's no doubt there's clearly a heightened.
Speaker Change: Agree a competitive pressure.
Speaker Change: If we start with the long tail segment, I mean overall net rates remain.
Speaker Change: Adequate and in many area despite several consecutive quarters of decline.
Speaker Change: Hum.
Speaker Change: There's no doubt our margins are getting squeezed and we continued to see some signs of rates, but we continue to see some signs of stabilizing stably.
Speaker Change: Stabilizing not not broad stabilization, but in some areas.
Speaker Change: An example is parts of our PR portfolio, where the pace of the rate decline is slowing in the book.
Speaker Change: Overall is still is still rate adequate.
Waleed Jabsheh: I noted earlier that we're reviewing an area of the PI portfolio and just with any underperforming part of the business we're prepared to walk away if things don't improve. Our outlook on short-tail lines continues to be fairly stable in line with prior quarters, although the market is definitely becoming tougher. These lines are becoming increasingly competitive, and this is putting pressure on rates, as we all know. The loss events of the first quarter, particularly the cat events, unfortunately don't appear to have had much impact on market conditions in any specific areas. and we continue to see more intense competition.
Speaker Change: I noted earlier that we review an area with the PCI portfolio and.
Speaker Change: Just with any underperforming parts of the business, we're prepared to walk away.
Speaker Change: If things don't improve.
Speaker Change: Our outlook on short tail lines.
Speaker Change: <unk> continues to be fairly stable in line with prior quarters, although the market is definitely becoming tougher.
Speaker Change: These lines are becoming increasingly competitive and this is putting pressure on rates.
Speaker Change: As we all know.
Speaker Change: I'll also events of the fourth quarter.
Speaker Change: The cat events.
Speaker Change: Unfortunately don't appear to have had.
Speaker Change: Much impact on market conditions and in specific areas.
Speaker Change: And and we continue to see more intense competition.
Speaker Change: Our construction and engineering focus I know a few months ago as well as parts of our.
Waleed Jabsheh: Our construction and engineering book, as I noted a few moments ago, as well as parts of our property portfolio, marine lines, contingency, I think will continue to present us with the most opportunities. In the reinsurance segment, we've renewed about two-thirds of our treaty book in the first three months of the year, another 10% or so at the beginning of April, with the rest of the book renewing over the remainder of the year. We continue to see opportunities for new business that fall within our risk tolerances and I expect that that will continue throughout the remainder of the year.
Speaker Change: Property portfolio of Marine lines contingency I think will continue to present us with the most opportunities.
Speaker Change: In the reinsurance segment.
Speaker Change: We've renewed about two thirds of our three people in the first three months of the year.
Speaker Change: Another 10% or so.
Speaker Change: At the beginning of April with the rest of the book renewing over the remainder of the year.
Speaker Change: We continue to see opportunities for new business that fall within our risk tolerances, and I and I expect that that will continue throughout the remainder of the year.
Waleed Jabsheh: In the first quarter, new business in the segment was more heavily weighted towards specialty treaty business, which is pretty geographically well diversified across the US and the international market. Reinsurance markets are continuing to be, from what we're seeing, relatively disciplined from a structure, from terms and wordings perspective, though pricing pressure is continuing and it may be off probably around 15 to 20 points by the year, by the end of the year, from the 10 to 15 points we set at the start of 2025. I mean we're continuing to see carriers pushing hard to build market share, especially the bigger players, and this is obviously only adds to the rating pressure.
Speaker Change: I mean in.
Speaker Change: In the first quarter.
Speaker Change: New business in this segment was more heavily weighted towards specialty.
Speaker Change: Treaty business.
Speaker Change: She is in pretty geographically, well diversed, Oh, well diversified.
Speaker Change: Across the U S and international markets.
Speaker Change: Reinsurance markets are continuing to be from what we're seeing relatively disciplined from a structure or terms wordings perspective, so pricing pressure is continuing in <unk>.
Speaker Change: It may be off probably around 15 to 20 points by the year by the end of the year from the 10 to 15 points, we said that startup.
Speaker Change: 2025.
Speaker Change: I mean, we're continuing to see carriers pushing hard to build market share, especially the bigger players and this is obviously a only adds to the rating.
Speaker Change: Pressure.
Waleed Jabsheh: In our geographical markets, US has been the biggest growth area for us and we expect that that will continue. It will continue to be one of the markets with the greatest opportunity for us to write new business. And that is essentially where we are most underweight. But given that this is where the most competition is and high concentration of cat exposed risk, we are, as with anything else, taking a more cautious approach, always being mindful about risk appetite and risk tolerance. We noted on last quarter's call that there is a lower volume of business finding its way to the open market in London, which is where we write most of our U.S.
Speaker Change: In our geographical markets.
Speaker Change: U S has been the biggest growth area for us and we expect that that will continue.
Speaker Change: We will continue to be one of the markets with the greatest opportunity for us to write new business and that is essentially where we are most underweight.
Speaker Change: But given that this is where the most competition is in high concentration of cat exposed risk.
Speaker Change: We are as.
Speaker Change: As with anything else takes them.
Speaker Change: Our cautious approach always being mindful of our risk appetite.
Speaker Change: And risk tolerances.
Speaker Change: We noted on last quarter's call that there is a lower volume business finding its way to the open market in London, which is where we are right most of our U.
Waleed Jabsheh: portfolio. The U.S. domestic players are attaining greater shares on their business. Nevertheless, there's still room for us to grow here, no doubt, but both in our specialty treaty book and in short-tail lines. And as we've said many times, we don't like any casualty business in the U.S. and have no desire to start. Europe always remains a growth area for us and the story is similar in the Middle East, North Africa and Asia-Pac regions and as mentioned earlier our expanded presence and capabilities on the ground in these areas are paying benefits.
Speaker Change: U S portfolio.
Speaker Change: Are you with the domestic players are routine and greatest shares owned shares on.
Speaker Change: On their business.
Speaker Change: Over the last there is still room for us to grow here no doubt, but both in our specialty Treaty book and in our short tail lines and as we've said many times, we don't write any casualty business in the U S and has no desire.
Speaker Change: To start.
Speaker Change: Europe always remains a growth area for us and the story is similar in Middle East North Africa, and Asia Pac.
Speaker Change: Regions.
Speaker Change: Mentioned earlier, our expanded presence and capabilities on the ground.
Speaker Change: In these areas are paying benefits.
Speaker Change: So before we open the call up for questions. Just some final thoughts from my end.
Waleed Jabsheh: Before we open the call up for questions, just some final thoughts from my end. Like I said at the start of the call, we're fully prepared for these headwinds. Along with our fully unleveraged balance sheet, our underwriting portfolio is diversified on many levels and we have the right infrastructure with the right people and the capabilities. We are close to our markets and we communicate well with each other. This is the strong foundation that allows us to effectively manage all stages of the market. So we'll continue to do what we always do. to stay focused, to execute well, and to execute with discipline.
Speaker Change: Like I said at the start of the call where we were.
Speaker Change: Fully prepared for these headwinds.
Speaker Change: Along with our fully Unlevered balance.
Speaker Change: Balance sheet, our underwriting portfolios that is diversified on many levels.
Speaker Change: And we have the right infrastructure with the right people and the capabilities.
Speaker Change: We are close to our markets and we communicate well with each other this is the strong foundation that allows us to effectively manage all stages of the market cycle.
Speaker Change: So we'll continue to do what we always do.
Speaker Change: To stay focused to execute well and to execute with discipline. This is how we bill.
Waleed Jabsheh: This is how we built the successful track record that we have for more than two decades now, and this is how we will continue to do so.
Speaker Change: Successful track record that we have for more than two decades now and this is how we will continue to do so.
Waleed Jabsheh: So I'm going to pause right there and we'll turn it over for questions.
Speaker Change: So I'm going to pause right, there and we'll turn it over for questions. Operator, we're ready to take the first question. Please.
Operator: Operator, we're ready to take the first question. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two.
Speaker Change: 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.
Speaker Change: To withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.
Operator: At this time, we'll pause momentarily to assemble our raw.
Speaker Change: Yeah.
Michael Phillips: Our first question comes from Michael Phillips from Oppenheimer. Please go ahead. Michael, are you there? Operator, are you there? Yes, I am. He must help. Again, if you'd like to... To ask a question, please press star then 1.
Speaker Change: Our first question comes from Michael Phillips from Oppenheimer. Please go ahead.
Speaker Change: Michael you there.
Speaker Change: Okay.
Speaker Change: Right.
Speaker Change: Operator are you there.
Speaker Change: Yes, I am.
Speaker Change: Yes.
Speaker Change: Mike.
Speaker Change: But mike disconnect.
Speaker Change: He must have.
Again, if you'd like to go.
To ask a question. Please press Star then one.
Speaker Change: Yeah.
Nick: Our next question comes from Nick.
Speaker Change: Our next question comes from Nick.
Nick: El Covigo Doleen Partners, please go ahead. Thanks for taking my question. You had called out the development on a particular area of the professional indemnity portfolio. I'm just wondering, is that a similar area that underwent some remediation efforts in the third quarter of 24, or is that a different part of the book? Just any color there would be helpful. No, it's a it's a similar area, Nick. I mean, we've been keeping an eye on this portfolio for quite some time now, so it's not performing exactly like we wanted it to, and again, nothing systemic though, and something we're reviewing closely and could very much, you know, shut down at some point this year.
Speaker Change: Alka Vigo from Boeing partners. Please go ahead.
Speaker Change: Thanks for taking my question you had called out the development on that particular area of the professional and the new portfolio. I was wondering is that a similar area.
Speaker Change: Under when some remediation efforts in the third quarter of 24 or is that a different part of the bulk just any color there would be helpful.
Speaker Change: No. It's just it's a similar area.
Speaker Change: Nick I mean, we've.
Speaker Change: And keeping an eye on this portfolio for quite some time now.
Speaker Change: So it's not performing exactly like we wanted to.
Speaker Change: Sure.
Speaker Change: Hum.
Speaker Change: Again, nothing systemic so.
Speaker Change: And something we review and close to them and could very much shut down.
Speaker Change: At some point this year.
Nick: Now, is there a specific, right, because that book is predominantly UK E&O, is there a specific, you know, underlying class there that is causing the issue or is there any other color around it? No, it is all UK and it just forms part of the portfolio. It's a segment that we've identified that doesn't really, is not really stacking up the way we want it to.
Speaker Change: Got it is there a specific break that book is predominantly U K no is there.
Speaker Change: Our specific underlying class there that is causing issuers or any other color around it.
Speaker Change: No. It's it's it's.
Speaker Change: It is all a U K.
Speaker Change: And it just forms part of the portfolio. It's a it's a segment that we've identified so it doesn't really.
Speaker Change: There's not really stacking up the way we wanted it to.
Speaker Change: Yes.
Speaker Change: Yeah.
Nick: Okay, that's all I have.
Speaker Change: Okay. That's all I had thank you.
Nick: Thank you.
Michael Phillips: Our next question comes from Michael Phillips from Oppenheimer. Please go ahead. Hey, good morning. Can you guys hear me now? Yeah, yeah, we can hear you. Okay, good. Sorry about that. I don't know what that was. Thanks for your patience. And thanks for your time.
Speaker Change: Our next question comes from Michael Phillips from Oppenheimer. Please go ahead.
Michael Phillips: Hey, Good morning can you guys hear me now.
Yeah, Yeah, Yeah. We can hear you. Okay go ahead, sorry, but that number what that was thanks for your patience.
Michael Phillips: I guess I want to go through, Waleed, your comments on obviously a lot of moving parts with the CAHPS and the Reinstatement Premium and the FX, but the combined ratio deterioration around 20 points. You mentioned when you back out the FX, it was more like six to seven. I think the 20 points and the PowerPoint said back out 10, so that gets you to around 10 points. I just wanted to clarify that. And we can take this but I guess really what I want to say, to ask was, if we can clarify that is, if you look at the current action, your loss ratio, it's up around four and a half or 4.6 points or so.
Michael Phillips: And thanks for the time I guess I wanted to go through what your comments on.
Michael Phillips: After a lot of moving parts with the cats and the reinstatement premium in the FX, but.
Michael Phillips: The combined ratio deterioration around 20 points.
Michael Phillips: You mentioned when you back out the FX is more like six to seven.
Michael Phillips: I think the 20 points in the Powerpoint sent back out 10. So it gets you to around 10 points I just wanted to clarify that when we can take this offline.
Speaker Change: But I guess really what I want to shake that to ask was if we can clarify that is if you look at the current accident your loss ratio, it's up around four and a half or four six points yourself can you talk about that by segment.
Waleed Jabsheh: Can you talk about that by segment and where you're seeing most of that? And I guess going forward is kind of a mid 50s, kind of a good run rate for this year, do you think? Thanks. Yeah, no, thanks for the questions, Mike. The comment about the combined ratio and the 67 point difference is when you compare Q1 of this year and the impact that the currency movements had on this year's numbers against Q1 of last year, and the impact that the currency movements had on the numbers of Q1 last year. This year, the pound strengthened.
Speaker Change: And where you're seeing most of that and I guess going forward is kind of a mid fifties kind of a good run rate for this year do you think thanks.
Speaker Change: Yeah.
Speaker Change: Yeah, no thanks for the questions.
Speaker Change: Mike.
Speaker Change: The comment about the combined ratio and a six to seven point difference is when you compare Q1 of this year and the impact that the currency movements had on this year's numbers against Q1 of last year and the impact of the currency.
Speaker Change: Movements had on the numbers of Q1 last year. This year, the pumps strengthened and so that's impacting negatively our.
Waleed Jabsheh: And so that's impacting negatively our revaluation of reserves. In Q1 of 2024, the pound weakened, and that impacted positively our revaluation of reserves. So if you sort of, again, as I said on the call, it was never an exact science, but we run the exercise because it does impact us more than your typical US-listed company. When you take all that noise away, this year's combined ratio would have been lower by about 10 points. Q1 of 24 combined ratio would have been higher by about 4 or 5 points. and then the difference when you then compare apples to apples, if you want to call it that, right, is that 67 points that you asked about and questioned.
Speaker Change: Revaluation of reserves in Q1 of 'twenty 'twenty, four the pound weakened and that impacted.
Speaker Change: Positively our revaluation of our reserves. So if you sort of you know again as I've said on the call there's never an exact science.
Speaker Change: We run the exercise.
Speaker Change: US more than your typical.
Speaker Change: Our U S listed company.
Speaker Change: When you when you take that all that noise away.
Speaker Change: This year's combined ratio would've.
Speaker Change: Been lower by about 10 points.
Speaker Change: Q1 of 'twenty four combined ratio would have been higher by about four five points.
Speaker Change: And then that the difference when you then compare apples to apples if you want to call. It that right is that six to seven points.
Speaker Change: You asked about <unk> and.
Speaker Change: And questions.
Waleed Jabsheh: So in true actuality, in reality, the difference between the performance of Q124 and Q125 is not as vast as the numbers point out. In terms of the current year accident loss ratio, I mean, a lot of that was in the reinsurance and the short-tail segments. We mentioned the California fires, which pretty much mostly impacted our reinsurance segment. And then you had some cat losses in the, within the short-tail segment, as well as some large risk losses, especially on the energy side. It was just one of those quarters where loss activity was higher, you know, and we've always said, you know, we will have these quarters.
Speaker Change: So so.
Speaker Change: True actuality in reality.
Speaker Change: The difference between the performance of Q1 24 in Q1 25 is not as bad as the numbers.
Speaker Change: Hum.
Speaker Change: Point out.
Speaker Change: In terms of the current year accident loss ratio.
Speaker Change: A lot of that was in the reinsurance and the.
Speaker Change: Short tail segments.
Speaker Change: We mentioned, the California fires, which pretty much mostly impacted our reinsurance segment and then you had some some cat losses in the two week within the short tail segment as well as some large risk losses, especially on the onshore energy side. It was just one of those quarters, where loss activity was higher you know.
Speaker Change: And we've always said.
Speaker Change: We will have these quarters, we have we've had a fantastic run of relatively manageable volatility.
Michael Phillips: We've had a fantastic run of relatively manageable volatility. And this quarter wasn't, you know, bad. I wouldn't call it, you know, was a bad quarter. It was just, the losses happened to occur in Q1 and, you know, it's only Q1 and we'll continue plowing through, you know, for the rest of the year. No, okay, thank you. I guess it's just a side, the comment is towards you talk about the impact of FX and the six or seven points on apples to apples, but on the loss ratio, it's kind of hard to see where that is.
Speaker Change: And this quarter wasn't bad.
Speaker Change: Bad I Wouldnt call it was a.
Speaker Change: Uh Huh, a bad quarter. It was just the losses happened to occur in Q1, and you know, it's only Q1 and will Uh huh.
Speaker Change: We will continue plowing through you know for the rest of the year.
Speaker Change: Okay. Thank you I guess, it's just a side comment it's just hard to eat you talk about the impact of FX in the six to seven points on an apples to apples, but.
Speaker Change: On the loss ratio, it's kind of hard to see where that is so.
Michael Phillips: So it just makes it a little confusing. That's just a comment, I guess.
Speaker Change: It just makes a little a little confusing.
Speaker Change: That's just a comment I guess.
Michael Phillips: Let's throw in the topic of tariffs. We talk here in the United States, it's all about impacts on personal auto and physical damage and some homeowners and property. And you guys clearly have some property exposure, but I guess I was thinking more on any comments you might have on impacts tariffs may have on your marine business, on your port business and things like that. Have you seen anything yet? Do you expect to see anything? And if so, what might that look like on those businesses, if anything at all? I mean, we haven't seen anything yet.
Speaker Change: Let's start on the topic of tariffs, we talked to you in United States. It's all about impacts on personal auto in physical damage and some homeowners and property.
Speaker Change: And you guys clearly have some property exposure, but I guess I was thinking more on.
Speaker Change: Any comments you might have what impacts tariffs may have on your marine business on your pork business and things like that have you seen anything yet do you expect to see anything and if so what might that look like on those business if anything at all.
Speaker Change: I mean, we haven't seen anything yet I think the business that we are in the tariff situation.
Waleed Jabsheh: I think the business that we are in, the tariff situation is not going to have much or a significant impact. I mean, it might impact cargo values, obviously, and thus premiums might go up as a result. But in terms of any sort of, you know, challenges that it creates or obstacles that it creates for the underwriting of our portfolios and management of our exposures, we don't see it and have not seen anything so far that would make life more difficult for us. Okay. And then, Waleed, it sounds like you're, despite rates down, you know, five to ten in reinsurance and maybe going to 15 as the year progresses, you're still positive on rate adequacy and still positive on growth opportunities in reinsurance despite a softening rate environment there.
He is not going to have much or a significant impact.
Speaker Change: I mean, it might impact cargo values, obviously, and thus premiums might go up as a result, but in terms of any sort of.
Speaker Change: You know challenges that it creates or obstacles that it creates for the underwriting of our portfolios and management of our exposures are we don't see it.
Speaker Change: And have not seen anything so far.
Speaker Change: Let you know.
Speaker Change: Make life more difficult for us.
Speaker Change: Okay and then.
Speaker Change: It sounds like you're.
Speaker Change: <unk> rates down five to 10 net reinsurance and maybe go into 15 as the year progresses, you're still positive on rate adequacy and still positive on growth opportunities in reinsurance despite a.
Speaker Change: Softening rate environment there.
Waleed Jabsheh: Yeah, I mean, you've got to, I think I think I mean You know, we've always we talk about rate movement. We talk about rate adequacy. We've always said it's not it's not about rate movement. I mean, we've we've we've now across many lines of business for the past five, six years benefited from significant rate improvement. you know, anybody who works in this business understands and knows that that doesn't last and at some point rates will stabilize and then come down. And so that's why we always say, and we tell our underwriters, it's not about rate movement, it's all about rate adequacy.
Speaker Change: Yeah, I mean, you've got to I think.
Speaker Change: I think I mean.
Speaker Change: We've always we talk about rate movements, we talk about rate adequacy. We've always said is look it's not about rate movements I mean, we've.
Speaker Change: We've now across many lines of business for the last five six years benefited from significant rate improvements.
Speaker Change: Anybody who works in this business.
Speaker Change: Understands and knows that doesn't last and at some point rates will stabilize and then come down.
Speaker Change: And so this is why we always say and we tell our underwriters to sort of batteries.
Speaker Change: Great movement is all about rate adequacy at the end of the day. If the rate is the rate as adequate we will continue to rise.
Waleed Jabsheh: At the end of the day, if the rate is adequate, we will continue to write the business. And in many areas the rating environment is still adequate. Yes, are rates down? 100%. Is that going to squeeze margins? 100%. It's a, you know, simple law of numbers. But also for us, I think that one of the advantages that we have is that in a lot of these areas, you know, we're coming off a much lower base as well. So our, you know, capability of growing does come a lot easier for than it does with the larger, you know, players that have much more or significantly bigger portfolios.
Speaker Change: The business and in many areas the rating environment is still adequate yes, our rates down 100% are those is that going to squeeze margins, 100%. It's the you know.
Speaker Change: Simple law of numbers.
Speaker Change: But also for US I think that one of the advantages that we have is that in a lot of these areas.
Speaker Change: We're coming off a much lower base as well so our.
Speaker Change:
Speaker Change: Capability of.
Speaker Change: Of growing does come a lot easier for them.
Speaker Change: Then than it does with the larger players.
Speaker Change: Players that have much more.
Speaker Change: Our significantly bigger portfolios.
Waleed Jabsheh: And we can choose to be selective. Listen, at the end of the day, we all have, you know, the ambition is always to grow. And maybe the market, you know, moves around a bit, you know, depending on what happens throughout the rest of the year. Our aim will always to go out there and fight and find the business that we want to write. If we can't, or if we find it and it's not at the levels that are acceptable to us, we won't write And if we have to shrink inside, then we will. I would point out, I mean, Q1 showed good growth overall, but that was more on the reinsurance side, you saw, you know, the growth in short tail and long tail was practically none.
Speaker Change: Portfolio was and we can choose to be selective and at the end of the day, we sit we've.
Speaker Change: We all the you know.
Speaker Change: The ambition is always to grow and maybe the market you know.
Speaker Change: Moves around a bit you know depending on what happens throughout the rest of the year.
Speaker Change: Our aim will always to go out there and fight and find the business and we want to right. If we can't and if we find blood or if we find it in the stock.
Speaker Change: The levels.
Speaker Change: That are acceptable to us we won't try it and if we have to shrink in size and we will I would point out on in Q1 showed.
Speaker Change: Good growth overall, but that was more on the reinsurance side you saw the growth in short tail and long tail was.
Speaker Change: Practically none.
Michael Phillips: Very marginal. And as you know, Q1 is a very heavy reinsurance renewal quarter. So I would make clear that the growth that was achieved in Q1 should not be taken as an indication of what can be achieved for the rest of the year. Okay, no, thank you. I guess, thanks for that.
Speaker Change: Some are very marginal and as you know Q1 is a very heavy.
Speaker Change: Reinsurance renewal quarter so.
Speaker Change: I would make clear that.
Speaker Change: The growth there.
Speaker Change: Was achieved in Q1.
Speaker Change: Should not be taken as an indication of what can be achieved for the rest of the year.
Speaker Change: Okay. Yeah. Thank you I guess, thanks for that lastly, just one specific segment, but see if there's any changes in your commentary it's been over a year that you've been negative on all its market and there's been lots of losses I don't know if thats changed at all or does the outlook for aviation for you changed this year at all.
Waleed Jabsheh: Lastly, just one specific segment, see if there's any changes in your commentary. It's been over a year that you've been, you know, negative on this market and there's been lots of losses. I don't know if that's changed at all. Does the outlook for aviation for you change this year at all? I mean out to be... I mean, I mean, aviation, I think it's still extremely challenging. Our book has reduced significantly. But, you know, last year the aviation book had a very solid profitability and Q1 this year the same. You know, we've got a good team of underwriters.
Speaker Change: I mean to me.
Speaker Change: I mean, I mean aviation I think it's still extremely challenging.
Speaker Change: Our book has reduced significantly.
Speaker Change: But you know last year, the aviation book had a very solid profitability and Q1 this year the same.
Speaker Change: You know we've got a good team of.
Waleed Jabsheh: We're cutting the book back, writing the business that we're comfortable with, sticking to the business that we're comfortable with and letting go of the business that we're not. There are a lot of people out there doing very silly things within this business line, but we're not playing that game. And our results in the line so far, I mean, have not... shown or given any signal that we should be exploring a change of heart with this business line. It's performing quite well actually. Okay. No, good. Thank you for that, Waleed, and thanks for everything else. Have a good day.
Speaker Change: Underwriters, who are cutting the book back writing the business that we are comfortable with sticking to the business that we're comfortable with and letting go.
Speaker Change: Of the business that were not there are a lot of people out there doing very silly things within this business line, but we're not playing that game.
Speaker Change: And our results in the line so far I mean have not.
Speaker Change: Shown.
Speaker Change: Yeah.
Speaker Change: Or given any.
Speaker Change: Signal that debt.
Speaker Change: We should be exploring a change.
Speaker Change: Of heart with this business line is performing.
Speaker Change: Quite quite quite well actually.
Speaker Change: Okay. Good. Thank you for that are willing to and thanks for everything else have a good day.
Michael Phillips: Thank you. Thanks, Mike. You too.
Speaker Change: Thank you thanks, Mike.
Operator: This concludes our question and answer session.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to management for closing remarks.
Operator: I would like to turn the conference back over to management for closing remarks. Just a quick thank you really for joining us all today and thank you for your continued support. As always, if you've got any questions, please contact Robin and she'll be happy to help. And we look forward to speaking to you all on next quarter's call. Have a good day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: Just a quick thank you really for joining us all today and thank you for your continued <unk>.
Speaker Change: Support as always if you've got any questions. Please contact Robyn and she'll be happy to to help and we look forward to speaking to you on our next quarter's call.
Speaker Change: Have a good day.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.