Q2 2025 International General Insurance Holdings Ltd Earnings Call

Question You May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two please note that this event is being recorded.

I would now like to turn the conference over to Robyn <unk> head of Investor Relations. Please go ahead.

Speaker #1: Good day and welcome to the International General Insurance Holdings Ltd. 2nd Quarter and 1st Half 2025 Financial Results Conference call. All participants are in a listen-only mode.

Thanks, Nick and good morning, and welcome to today's conference call today, we'll be discussing our financial results for the second quarter and first half of 2025.

Speaker #1: Should you need assistance,

You've seen our press release that we issued after the market closed yesterday.

That press release can be found on our website at www dot.

E insure dot com, we've also posted a supplementary investor presentation, which can be found also on our website on the presentations page in the investors section.

On todays call are executive chairman have Agi, Wassa jumped Shea president and CEO, <unk>, <unk> and Chief financial officer for beds risky as always <unk> will begin the call with some high level comments before handing over to Walid to talk you through the key drivers of our results for the second quarter and first half and finish up.

With our views on the market on market conditions and your outlook for the remainder of 2025 at that point, we will open up the call for questions.

Are any of the Dialers may have I'll begin with the customary safe 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 that the future plans estimates or expectations contemplated.

By Us will in fact be achieved.

Forward looking statements involve risks uncertainties and assumptions actual events and 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.

30, <unk> December 2024.

Company's reports on form 6K, and other filings with the SEC as well as our results press release that we issued yesterday evening.

We undertake no obligation to update or revise publicly any forward looking statements statements, which speak only of as of the date. They are made.

During this call we use certain non-GAAP financial measures for a reconciliation.

Of non-GAAP measures to the nearest GAAP measure please see our earnings release, which has been filed with the SEC and as I said it is available on our website.

With that I'll turn the call over to our executive Chairman walk with job site.

What's it.

<unk> to once again deliver extend dissolves or both second quarter and six months.

Thank you Greg Barnes.

We generated net income of 34.

$1 1 million.

And $64 million for the second quarter to six months.

Good.

And this is obvious.

Annualized return average equity of 12% for the second quarter.

And 51, 6%.

It will be.

I'm very pleased with our strong performance.

Our service team our focus is there.

By discipline.

Existing participants.

Mhm.

Very interesting nature of our affordable.

Our business in many regions.

We are often directly exposed to some.

Joseph again.

Or macroeconomic uncertainty.

All of our more than 20 years, we have consistently demonstrated our strength.

Both subsea and managing through all stages of the site.

Moving our capital to those areas.

Historically is great.

And the highest margins.

Did you see in other areas where conditions are such that we have not.

Felipe.

Productivity gains.

That is the bandwidth and the benefit of having a very diverse clients.

Therefore.

And all of us working with them.

And bonuses.

That's correct.

Our efforts to generate consistently high quality results and stage of market size.

Speaker #4: reducing in other areas where conditions are such that we're not able to meet our profitable targets. That is the balance and the benefit of having a very diversified platform and always working within our risk appetite and policies.

So as we continue to reward our shareholders, who have put their trust in us and supported us.

So far in.

The decline in addition to strong.

Our proactive capital management as a result.

This is a growing.

Growing book value per share by <unk>, 4%.

Steve.

<unk> per share.

Baird.

As we begin to get those on a series of $7 million to shareholders in <unk>.

And share repurchases.

I will now briefly discuss the numbers in more detail.

Overall market conditions are.

Outlook for the remainder of the year's a revision of the groom or panic Richard again.

Thank you Melissa good morning, everyone and thank you for joining us.

David.

We had an excellent second quarter.

First half of 2025.

As Walter indicated we're in a strong position as we continue through the second half of the year.

We're still seeing decent conditions and great adequacy across much of our portfolio.

In pursuing opportunities to enhance our distribution capabilities that will ultimately, which ultimately could generate.

Additional value.

Our model and our promise is to create opportunities that will generate consistent and sustainable value for the long term and we've demonstrated over more than 20 year history.

Our strength is our ability to do this throughout the market cycle.

Yeah.

In 2025, while conditions remained generally healthy there are areas of our portfolio, which are facing slightly more of a benefit pressures, replacing those in previous calls. So we're focusing on those lines and markets that remain healthier and reduce their exposures in areas, where we can generate.

The acceptable level of risk.

Great.

At the end of the day. This is what if I can manage its all about.

But before I go through the numbers in detail.

It's important to note upfront.

Meaningful impact that foreign currency will be based on our results once again this quarter.

And that is specifically on the revaluation of our non U S. Dollar denominated most reserves and how this flows through a number of line items in our results.

Most significantly in our underwriting results.

As you saw for both.

And you saw that in both the second quarter and the first.

Six months of the year.

As you know our underwriting portfolio as Walter mentioned is very international in nature. Similarly, our investment portfolio is also very geographically diversified.

Is yours.

We are always striving to achieve is pass through as the launch that's possible between our assets and our liabilities.

Although it's never an exact science.

Now roughly half of our underwriting portfolio was transacted in either non U S or non U S dollar pegged currencies.

And this is by far was most pronounced in our long tail type.

Speaker #5: As you know, our underwriting specifically on the portfolio, as Wasef mentioned, is very international in nature. Similarly, our investment portfolio is also very geographically diversified.

Which as.

<unk> services at around 22% of total gross peak.

About 80% of this portfolio.

Speaker #5: This ensures however that we're ways striving to achieve as accurate a match as possible between our assets and our liabilities. Although it's never an exact science.

Transacted in a totally integrated British pounds, but more importantly.

Hum.

The group's total reserves.

Speaker #5: Now, roughly half of our underwriting portfolio is transacted in either non-US dollars or non-US dollar paid currencies. And this by far is most pronounced in our long-tail sector.

Against the wholesale side.

And the sheer nature of long tail business being these reserves are held for longer periods of time and for IV iron up being about six to eight years.

On average.

So in the U S dollar our financial reporting currency.

Speaker #5: Which, as is due in therapy services, is around 22% of total gross revenue. About 80% of this portfolio is transacted in sterling, in British pounds.

In the U S dollar weakened meaningfully against the pound as it did at the start of the year.

Even more so during the second quarter, the resulting impact of the revaluation of our reserves.

Speaker #5: But more importantly, almost half of the group's total reserves are held against the long-tail sector. And the sheer nature of long-tail business means these reserves are held for a longer period of time.

Okay.

Let's do a somewhat distorted view of the.

Underwriting results, specifically, our loss ratio and obviously, therefore and ultimately to our combined ratio and also our core operating results.

Speaker #5: And for IGI, that means about 6 to 8 years, on average. So when the US dollar, our financial reporting currency, when the US dollar weakens, meaningfully against the pound, as it did at the start of the year, and even more so during the 2nd Quarter, the resulting impact on the revaluation of our reserves undoubtedly led to a ewhat distorted view the underwriting results, specifically our loss ratio.

As I go through the results I'll try and provide a dollar or percentage value impact weird meaningfully destroy this toward a period over period comparisons in our results.

Now specifically on the numbers starting with the top line.

Gross premiums.

In the second quarter of 2025.

Just under a $119 million, reflecting a decrease of eight 7% and this is reflected in both the short tail on the long tail segments, where competitive pressures are more preferred.

Speaker #5: And obviously, therefore, an ultimately our bined ratio and also our core operating results. So as I go through the results, 'll try and provide the dollar or percentage value impact where it meaningfully distorts period over period comparisons in our ults.

For the first six months growth pillars are up almost 2% to around $395 million, primarily driven by growth in the reinsurance segment, where we continue to take advantage of the more positive market conditions, which I'll talk about them more.

Speaker #5: Now, specifically on the numbers and starting with the top line, gross premiums in the 2nd Quarter of 2025 were just under 190 million dollars, reflecting a decrease of 8.7%.

In a moment.

Net earned premium was up $3 million for the second quarter of <unk>.

75 versus around 122 million for the same period last year for.

Speaker #5: And this is reflected in both the short-tail and the long-tail segments where competitive pressures are more prevalent. For the first 6 months, gross premiums were up almost 2%, to around 395 million dollars.

For the first six months net premiums earned were $227 8 billion person is approximately $236 million.

For both the second quarter and first six months of.

Speaker #5: Primarily, it's driven by growth in the reinsurance segment where we continue to take advantage the more positive market conditions, more in a moment. Net term premium was at 15 million for the 2nd Quarter of 2025.

This year in N. P. Newsround included the impact of reinstatement premiums you mentioned on the last quarter's call on loss affected business amounting to $2 6 million this quarter against a $9 9 billion for the first half.

Again, I will note that we are strategic buyers of reinsurance.

Speaker #5: Versus around 122 million for the same period last year. For the first 6 months, net premiums earned were 227.8 million. Versus approximately 236 million for both the 2nd Quarter and 1st 6 months of this year, net premiums earned included the impact of reinstatement premiums, which we mentioned on the last quarter's call, on loss-effective business amounting to 2.6 million this quarter against 9.9 million for the first half.

To help mitigate volatility and the high severity lines of business.

So we participate.

The combined ratio for the second quarter was 95%.

Our combined ratio for the first half was <unk> 92.

4% now these were negatively impacted by the revaluation of those non U S dollar.

Bulk reserves.

The impact amounted to approximately 21 points in Q2 and 15 points.

Speaker #5: Again, I would note that we are strategic buyers of reinsurance to help mitigate volatility in the high severity lines of business. That we participate in.

The first half.

You hear these numbers in this really underscores the strength of our fundamental performance in what is becoming a more competitive environment.

Speaker #5: The combined ratio for the 2nd Quarter was 90.5%. The combined ratio for the first half was 92.4%. Now, these were negatively impacted by the revaluation of those non-US dollar loss reserves.

The first six months of also saw higher volumes with losses, when compared to the same period in 2000 and for especially in Q1 as well as the lower volume of net earned premium problem.

Reinstatement premium impact I mentioned.

A couple of minutes.

Speaker #5: The impact amounted to approximately 21 points in Q2. And 15 points in the first half. You hear these numbers and this really underscores the strength of our fundamental performance and what is becoming a more competitive environment.

All in we delivered net income of $34 $1 million or 77 cents per share for the second quarter.

Versus $32 $8 billion 73 per share for the second quarter of last year.

It is important to note here that when you when you when you look at the second quarter specifically.

Speaker #5: The first 6 months also saw a higher volume of losses when compared to the same period in '24, especially in Q1. As well as a lower volume of net earned from the reinstatement premium impact I mentioned at the couple of minutes ago.

Even though our combined ratio was almost 10% 10 points higher than our net earned premium base.

Almost six 6% lower we still produced a net income number was higher by 4% towards the second quarter of 2004, clearly illustrating the strength of our underlying performance.

Speaker #5: Always, we delivered net income of 34.1 million dollars or 77 cents per share for the 2nd Quarter. Versus 32.8 million dollars or 73 cents per share for the 2nd Quarter of last year.

For the first half of this year, we generated net income of.

$51 $4 million or $1 36.

Speaker #5: It's important to note here that when you when you look at the 2nd Quarter specifically, even though our combined ratio was almost 10 points high and our net earned premium base was almost 6% lower, we still produced a net income that was higher by 4% over the 2nd Quarter of '24.

<unk> per share growth of $7 $77 million or lower 55 per share.

Of last year.

The period over period decline in net income in the first half of the results of a lower level of underwriting income again due to currency revaluation movements in large part.

But also a greater level of loss activity and the higher level of nuclear safety agency.

Speaker #5: Clearly illustrating the strength of our underlying performance in the. For the first half of this year, we generated net income of 61.4 million dollars or $1.36 per share.

Operating income was 22 point million covered or <unk> 51 per share in Q2, compared to 32, $33 2 million or <unk> 74 per share.

Speaker #5: Versus 7.7 million dollars or $1.55 per share for the first half of last year. The period over period decline in net income in the first half was a result of a lower level of underwriting income, again, due to currency revaluation movements in large part.

In Q2 last year.

For the first six months of 'twenty five.

Core operating income was $42 2 million.

Or <unk> 93 per share versus $73 3 million or $1 61.

<unk> per share.

Speaker #5: But also a greater level of loss activity in the higher level of net reinstatement premiums, which is cooperating income of 22.8 million dollars or 51 cents per share in Q2.

With the difference again.

Primarily attributable to a lower level of underwriting income impacted by the currency devaluation.

And there was a heightened loss activity, specifically $15 nine points to the current taxes capital losses that remain we saw in the first quarter.

Speaker #5: Compared to 33.2 million or 74 cents per share in Q2 last year. For the first 6 months of '25, cooperating income was 42.2 million.

Prior year development was unfavorable again in Q2 amounted to $6 3 million.

Speaker #5: Or 93 cents per share versus 73.3 million or $1.61 per share with a difference, again, primarily attributable to a lower level underwriting income impacted by the currency revaluation.

Primarily driven by the impact of about just under $20 million currency revaluation.

Positive, which is the majority that we mentioned earlier is in the long tail segment came up to about.

Almost $14 billion business as he said is largely transacted in pounds.

Speaker #5: And there was a higher loss activity, specifically 16.9 points of current activity impact losses that remain we saw in the first quarter. Prior year development was unfavorable in Q2, amounting to 6.3 million.

In pound Sterling.

For the first six months prior year development was favorable.

Favorable by just under $20 million versus $41 5 billion for the first half of last year.

With the lower volume primarily attribute.

Speaker #5: Primarily driven by the impacts of about just under 20 million dollars of currency revaluation. Out of which, and the majority, as we mentioned earlier, is in the long-tail segment, came up to about almost 14 million dollars since that business, as we said, has largely transacted in pound sterling.

<unk> attributable to the to currency revaluation, which might have been the first half amounted to about $32 million.

So on a constant FX basis or on an apples to apples basis.

We would have seen favorable development of just under $13 million for the second quarter and about $52 million for the first six months.

Speaker #5: For the first 6 months, prior year development was favorable by just under 20 million dollars versus 41.5 million for the first half of last year.

Of this year.

I'll talk more about the long tail segment tunnel.

The G&A expense ratio was 21% in Q2 versus 'twenty one 'twenty.

Speaker #5: With the lower volume primarily attributed to the currency revaluation, which in the first half amounted to about 32 million dollars. So on a constant effect basis or on an apples-to-apples basis, we would have seen favorable developments of just under 13 million dollars for the 2nd Quarter and about 52 million dollars for the first 6 months of this year.

Uh huh.

21% for the first half.

Now a few comments on our segment results.

In our short tail segment gross premiums were down eight 5% and four 2% for the second quarter and first half respectively, because consequently aren't being able to also down eight 4% and six 9% for Q2 and H one of 25 as compared to the same periods.

Speaker #5: And I'll talk more about the long-tail segment in a ent. The G&E expense ratio was 21% in Q2 versus 21% and 28.1% for the first half.

24.

The decline in both periods reflects the lower level of written premiums as well as the impact of reinstatement premiums on our reinsurance purchases.

Speaker #5: Now, a few comments on our segment results. In our short-tail segment, gross premiums were down 8.5% and 4.2% for the 2nd Quarter and first half, respectively.

As a result of underwriting income was up almost 21% to $25 6 million in the second quarter largely due to a lower level of losses recorded in Q2 versus the same period.

Speaker #5: Consequently, earned premiums were also down 8.4% and 6.9% for Q2 and H1 of '25 compared to the same periods in '24. The decline in both periods reflects the lower level of risen premiums as well as the impact of reinstatement premiums on our reinsurance purchases.

This year.

For the first six months underwriting income was just over $50 million.

Down about 10 points when compared to the first half of 'twenty four.

I mean, we continue to see new business opportunities in a number of lines, particularly in engineering and construction.

In our marine lines and to a lesser degree contingency and property lines.

Speaker #5: The results underwriting income was up almost 21% to 25.6 million in the 2nd Quarter. Largely due to a lower level of losses recorded in Q2 versus the same period previous year.

Although broadly speaking you know the rating environment and pricing remains adequate.

But engineering continued to stand up as an excellent growth opportunity youre seeing a lot of infrastructure projects and opportunities coming to many.

Speaker #5: For the first 6 months, underwriting income was just over 50 million. Down about 10 points when compared to the first half of '24. I mean, we continue to see new business opportunities in a number of lines, particularly engineering and construction, in marine lines, and to a esser degree, contingency and property lines.

Many of our markets across the us.

Across the globe.

Gross premiums in the reinsurance segment, the <unk> segment, which.

As we always say is very well diversified geographically were flat compared to the second quarter of last year. One of the first six months of 'twenty five showed growth of about 33%.

Speaker #5: Although broadly speaking, you know the rating environment and pricing remains adequate. But engineering continues to stand out as an excellent growth opportunity seeing a lot of infrastructure projects and opportunities coming to many of our markets across the globe.

Versus the same period in 2012, primarily driven by strong renewal.

The business generated.

In Q1 and more alone.

First of January.

Okay.

Most of it mainly in marine.

Speaker #5: Gross premiums in the reinsurance segment, the treaty segment, which is, as we always say, is very well diversified geographically. We're flat compared to the 2nd Quarter of last year.

Energy PV tailored and to a lesser extent.

Property lines now conditions generally remains strong and pricing and liquidity this business.

Speaker #5: While the first 6 months of '25 showed growth of about 33% versus the same period in '24. Primarily driven by strong renewal and new business generated in Q1 and more around the 1st of January.

The decline in this segment, but there is.

There is increasing evidence of competitive pressures.

India was up.

Just over 21% in Q2.

And about a third in the first half of 'twenty five compared to the same periods.

The previous year.

Speaker #5: Growth was mainly in marine energy PV terror and to a esser extent the property lines. Now, conditions generally remain strong and pricing adequate in this business.

Underwriting income with it but the underwriting income was up.

Almost 60%.

In the second quarter and about 55% in the first half of this year compared to the same period last year.

Speaker #5: In this line, in this segment, but there is definitely increasing evidence of competitive pressures. Apparently, was up just over 21% in Q2 and about a third in the first half of '25 compared to the same periods the previous year.

The significant increase.

In that underwriting income in the segment.

Clearly illustrates the shift of focus with chip and focus because we always talk about that we made a year ago to higher margin reinsurance business and we're now seeing this flow through the <unk>.

Financial results.

Speaker #5: Underwriting income was underwriting income was up almost 60% in the 2nd Quarter and about 55% in first half of this year compared to the same periods last year.

The long tail segment continues to be the area of our portfolio 70 more challenging.

This has been the name of the number for many quarters.

At this time and time again.

And I expect we will continue to be the case or the royalties that near term.

Speaker #5: The significant increase in the underwriting income in the segment clearly illustrates the shifts of focus, which shift in focus, which we always talk about, that we made a year ago to higher margin reinsurance business.

I mean this is the segment, where our cycle management capabilities are duly noted.

As we purposely constructed the book by around 15% in 2021.

After several years of growth.

Speaker #5: And we're now seeing this flow through the financial results. The long-tail segment continues to be the area of our portfolio that is definitely most challenging.

Healthy top line growth when market conditions were very much in our favor.

<unk> been talking big level, even while we've been taking a very close Portugal right now.

Speaker #5: This has been the case now for many quarters. We've said this time and time again. And I expect we'll continue to be the case for at least a near term.

The consistency in our declining for many many quarters.

Albeit from very high level.

The pace of decline is not alone.

Showing signs of slowdown.

Speaker #5: I mean, this is the segment where our cycle management capabilities are. Here in US. As we purposely transacted the book by around 15% since 2021, after several years of healthy top-line growth when markets conditions were very much in our favor.

In the second quarter and first half of 'twenty five gross premiums were down.

One 4% of normal 5% respectively segment.

We recorded an underwriting loss of about $3 million for Q2.

Speaker #5: And we've been talking pretty well, but we've been taking a very cautious approach to this, right? That the consistency now declining for many, many quarters albeit from very high levels.

Versus an underwriting profit of $15 million in Q2 last year and for the first half we recorded an underwriting loss of about $10 million.

As an underwriting profit of about $26 million last year.

Speaker #5: But the pace of decline is now showing signs of slowing down. In the 2nd Quarter and first half of '25, gross premiums were down almost 12% and almost 5% respectively in the segment.

Now I'll take a moment to add some context here.

Again first it's FX you know the currency value of the revaluation of non U S. Total reserves, which I said as I said.

Further impact this thank you Mr long tail segment, the most by far.

Speaker #5: We recorded underwriting loss of about $3 million per Q2 versus an underwriting profit of about $15 million in Q2 last year. And for the first half, we recorded an underwriting loss of about $10 million versus an underwriting profit of about $26 million last year.

As the vast majority of our business is transacted in pounds, so on them on a currency neutral basis.

Underwriting income would have been just under 12 million in the second quarter.

And just over 13 million in the first half.

Now turning to the first.

Factoring in a second.

Speaker #5: Now, I'll take a moment to add some context here. Again, first, it affects the currency value of the revaluation of non-US dollar reserves, which I said as I said earlier, impact this segment, the long-tail segment, the most by far.

As we've been saying we've been contracting this portfolio purposefully as competitive pressures in these clients have led to reductions in rates and lower margins. So we're generating less written and earned premiums.

And finally, we saw a higher level of losses in the segment specific, especially in the first quarter and specifically within our professional microphone.

Speaker #5: And as the vast majority our business is transacted in pounds. So on a currency neutral basis, underwriting income would have been just under 12 million in the 2nd Quarter.

This has led to higher level of reinstatement brea.

Yeah.

Speaker #5: And just over 13 million in the first half. Now, that's the first factor here. Second, as we've been saying, we've been contracting this portfolio purposefully as competitive pressures in these lines.

We've indicated on our last two calls that we were reviewing one area of our professional indemnity portfolio, which has not been performing up to par.

And.

So we.

We we have now made that decision to non renew this.

Speaker #5: Have led to reductions in rates and lower margins. And so we're generating less written and earned premium. And finally, we saw a higher level of losses in this segment, specifically especially in the first quarter and specifically within our professional management platform.

As I've said nothing systemic just generally poor performance, whereas the results certainly arent meeting our targets.

What's the outlook unlikely to.

Speaker #5: And this has led to higher level of reinstatement rates. We've indicated on our last two calls that we were reviewing one area of our professional indemnity portfolio.

To improve enough.

Uh huh.

For us in the near term to change our view.

We stood at just being able to use it to continue from stability to renew with us.

Speaker #5: Which has not been performing up to par. And we have now made that decision to not renew this as I've said, nothing systemic just generally poor performance.

The portfolio now.

Now the effect of it will be a.

Declining gross premium of about $60 million.

About 10% that that would be reflected in Q3, 50% in Q4 and the remainder will be spent over the first half.

Speaker #5: Whereas the results simply aren't meeting our targets. And with the outlook unlikely to improve enough for us in the near term, you know, to change our view.

Next year.

Now while the impact overall is very pronounced the top line.

The way that we can actually start.

Speaker #5: Which just it just isn't conducive to the continued profitability to renew this part of the portfolio. Now, the effect of this will be a decline in gross premium of about $50 million dollars in total about 10% of that will be reflected in Q3.

Restructure this business over the past few years means that the actual impact of net written premium.

Is only around six or $7 billion.

Ultimately, we're taking this action now.

Shouldnt, we expect that it will improve the overall profitability profile of the loan sale off the long tail segment going forward, which ultimately is the whole point.

Speaker #5: 50% in Q4. And the remainder will be spread over the first half of next year. Now, while the impact overall feels very pronounced on the top line, the way that we actually restructured this business over the past few years means that the actual impact on net written premium is only around 6 or 7 million dollars.

Now turning to the balance sheet total assets increased.

Budgets over 4% to plus $2 1 billion total investments and cash flow $1 3 billion.

Our recent income securities, which made up approximately 80% of our investment portfolio generated just under $14 million.

Speaker #5: Ultimately, taking this action now should, and we expect that it will improve the overall profitability profile of the long-tail segment going forward. Which ultimately is the whole point.

<unk> income in the second quarter, which deliveries over the Q.

Q2 of last year of about just over 5%.

For the first six months of the year investment income increased more than 10% to $27 $5 million with an average annualized yield of.

Speaker #5: Now, turning to the balance sheet, total assets increased by just over 4% to about 2.1 million dollars. Total investments and cash were 1.3. Billion.

Four four.

Percent.

And we also edged out the duration slightly to three and a half to use during the quarters, the bulk and a pilot rates on U box.

Speaker #5: Our allocation income securities which makes approximately 80% of our investments and cash portfolio generated just under 14 million in investment income in the second quarter.

Boats.

And the second quarter, we repurchased.

Speaker #5: Which is an increase over the Q2 of last year of about just over 5%. Now, for the first 6 months of the year, investment income increased more than 10%.

Just over $1 three 4 million common shares at an average price per share of $23 28.

As of.

At the end of Q2. This leaves approximately 800000 shares remaining on our existing set.

Speaker #5: To about 27.5 million dollars. With an average annualized yield of 4.4 percent. And we also edged out the duration slightly to 3.5 years during the quarter to lock in higher rates on some new bonds.

Sure enough, we can repurchase authorization.

Total equity was two.

$2 2 million at the end of Q2.

And that includes the impact of share repurchases and the payment both.

$42 million and common share dividend, including the special dividend are paid.

Speaker #5: In the second quarter, we urchased just over 1.34 million common shares at an average price per share of $23 and 28 cents. As of the end of Q2, this leaves approximately 800,000 shares remaining on our existing 7.5 million repurchase authorization.

<unk> repaid back in April.

This compares total equity of $654 8 million at the end of last year.

Ultimately, we recorded a return on average shareholders' equity of 28% for the second quarter and 18, 6% for the first six months of this year.

Speaker #5: Total equity was 62.2 million. At the end of Q2, and that includes an impact of share repurchases and the payment of 42 million dollars in common share dividends including the special dividend of 8 to 5 cents that we paid back in April.

So from a tariff from a total return perspective.

We grew book value per share by three 4% in the first six months.

And we returned a total of $77 million to shareholders in share repurchases and dividends in the first half of the year.

So I mean, all of the voice from currency movements aside.

Speaker #5: This compares to total equity of 654.8 million at the end of last year. Ultimately, we recorded a return on average shareholder's equity of 20.8% for the second quarter.

It was an excellent quarter and an excellent first half.

Of 2025.

Now specifically on what we're seeing in our markets.

Speaker #5: And 18.6% for the first 6 months of this year. So from a return perspective, we grew book value per share by 3.4% in the first 6 months.

The elevated competitive pressures there and in some areas.

Increasing more than others.

Uh huh.

And in spite of the headwinds.

Using our sector, we continue to seek and find.

Speaker #5: And we returned a total of 77 million dollars to shareholders in share repurchases and dividends in the first half of the year. So I mean, all the noise from currency movements aside, it was an excellent quarter and an excellent first half of 2025.

Profitable opportunities to write new business across many lines within our portfolio.

And I expect with.

Overall, we will continue to see some contraction in your top line in certain areas of our portfolio where profitability and coverages.

Speaker #5: Now, specifically on we're seeing in our markets, that elevated competitive pressure is there. And in some areas, it's increasing more than others. In spite of the hedge winds facing our sector, we continue to seek and find profitable opportunities to write new business across many lines within ur portfolio.

Just don't meet our required targets.

This is <unk>.

Very much the benefit of having a multi faceted diversification strategy specialist expertise and people on the ground in our regional markets.

It gives us more optionality and more levers to work with so on market conditions in one line or any one region are particularly competitive.

The other lines in other regions, where the market remains robust.

Speaker #5: And I expect overall we will continue see some contraction in the top line in certain areas of our portfolio where profitability and coverages just don't meet our required targets.

The individual elements of our portfolio don't move in units because we all know and I said on last quarter's call the domestic markets across the world are becoming stronger and more.

Speaker #5: And this is, you know, very much in the benefit of having a multifaceted diversification strategy, specialist expertise, and people on the ground in our regional market.

More resilient and theirs.

Much iron desire growing desire to retain it.

As you know within those local markets so being situated in these regions and having local talent.

Speaker #5: It just gives us more optionality and more levers to work with. So when market conditions in one line or in one region are particularly competitive, there will be other lines and other regions where the market remains robust.

We can still access domestic business that is no longer coming.

Hum.

We are seeing mixed conditions across much of our portfolio consistent with what we've said on previous quarters call.

Speaker #5: The individual elements of our portfolio don't include unison because we all know I said on last quarter's call that domestic markets across the world are becoming stronger.

Some years when the environment is quite healthy.

On the other areas are seeing a little more competition.

Speaker #5: And more resilient. And there's much higher desire growing desire to retain business, you know, within those local markets. So being situated in these regions and having local talent means that we can still access domestic business that is no longer coming to London, for ample.

As such our racing pressure generally speaking.

In our reinsurance lines remains healthy.

As you saw in the short tail lines were clearly.

So that's a stage of the broader cycle, where portfolio and exposure management is absolutely critical.

Speaker #5: We're seeing which conditions across much of our portfolio consistent with what 've said on previous quarters' calls. Some areas remain quite resident, quite healthy.

And I'll make one thing very very clear <unk>, we will not sacrifice the bottomline to benefit the top line.

Speaker #5: While another area is experiencing a little more competition and, as such, rating pressure. Generally speaking, reinsurance lines remain healthy. As we saw in the short-tail lines, we are clearly at the stage of the broader cycle where portfolio and exposure management is absolutely critical.

Our primary goal province to generate sustainable value for the long term.

Almost exceeded that if we give it to solve the more pervasive pressures that are driving rates and ultimately profitability.

Governance.

Now in our long tail segment, and that's the rates of overall relate to remain adequate in most areas and the pace of ratings decline.

As I said.

A few moments ago has slowed down moderately so.

Speaker #5: And I'll make one thing very, very clear. At IGI, we will not sacrifice the bottom line to benefit the top line. Our primary goal, and our promise is to generate sustainable value for the long term.

So we are seeking new opportunities that we're taking action to expand our footprint in specific markets.

In mind that we have no appetite to write any new aesthetics.

And both of those.

Speaker #5: And we won't succeed at that if we give in to some of the more pervasive pressures that are driving rates and ultimately profitability. Downwards.

And long term.

We're a beneficiary of this slower process.

We've expanded our capabilities over a year ago and these efforts are starting now to bear fruits.

Speaker #5: Now, in our long-tail segment, net rates overall remain do remain adequate in most areas. And the pace of rating decline as I said a few moments ago has slowed down moderately.

Our outlook on short tail lines continues to be fairly consistent with what we've been saying in prior quarters, although the market is.

It is definitely becoming tougher to grow the hog harvest season.

Speaker #5: So we're seeking new opportunities and we're taking action to expand our footprint in specific markets. Keeping in mind that we have no appetite to write any US liability business.

We're seeing greater pressure and appropriate season, especially energy lines, particularly downstream energy.

Speaker #5: In both Hong Kong and Malta, you know, we're finishing business slower process. We've expanded our capabilities over a year ago and these efforts are starting now to bear fruit.

Where we're seeing the most opportunities in a more.

Specialist site.

Construction engineering as I mentioned earlier, some marine lines.

And in the marine lines certain business.

Speaker #5: Our outlook on short-tail lines continues to be fairly consistent with what 've been saying in prior quarters. Although the market is definitely becoming tougher as you heard on other calls this time of the season.

Bunch of that differences renewing the fleet.

Flat for up to four basis, if not slightly higher.

Hi, great.

I would also events. Unfortunately over the first few months of 'twenty five.

Speaker #5: We're seeing greatest pressure in property and especially energy lines, particularly downstream energy. Where we're seeing the most opportunities and the more specialist lines like construction, engineering, as I mentioned earlier, some marine lines, and in those marine lines, certain businesses, a bunch of that business is renewing at least, you know, on a flat or as before basis, if not slightly higher rates.

Don't appear to have had much impact on market conditions and any specific client.

As you know again, Unfortunately, we continue to see more intense competition from both the large multinational carriers spend from the <unk>.

When you heard comments from other carriers. This earnings season on the leased occupancy days on the hold.

We are supporters of and users of facility business, where we signed backs up the business ourselves and re business strong delegated authority team internally to set and manage that.

Speaker #5: The loss events, unfortunately, of the first few months of '25, you know, don't appear to have had much impact on market conditions in any specific lines.

But there are certainly elements of <unk> business that are less disciplined.

Speaker #5: And, you ow, again, unfortunately, we continue to see more intense competition from both the large multinational carriers and from the MGAs. I mean, you heard comments from other carriers of earnings season on the impact of MGAs.

Now just on pricing, but also on terms conditions and most importantly.

On coverage.

Now in the reinsurance segment.

We're still seeing a visa probe opportunities.

Speaker #5: On the whole, you know, we are supporters of and users of facilitized business. Where we can't access the business ourselves. And we've built a strong delegated authority team internally to vet and manage that business.

That's all within our risk tolerances and I expect that that will continue for the remainder of the need now that said that said the major one one in four one renewals are behind us. So you know.

Significant growth in this segment in the second half of the year will be a lot more viewed.

Speaker #5: But there are certain elements of that facilitized business that are less disciplined in not just on pricing but also on terms, conditions, and most importantly, on coverages.

Like all areas of our business, we are pursuing opportunities.

Enhance our distribution capabilities in this segment and that should help us continue to expand our portfolio.

Speaker #5: Now, in the reinsurance segment, we're still seeing a decent flow of opportunities. That fall within our risk tolerances. And I expect that that will continue for the remainder of the year.

I mean overall the markets are the reinsurance reinsurance market seem to still be behaving.

In a.

Speaker #5: Now, that said, the major 1, 1, and 4, 1 renewals are behind us. So you ow, significant growth in this segment in the second half of the year will be a lot more muted.

Relatively disciplined manner from a structured terms towards his perspective.

Pricing pressure.

Is that.

So with initial holding steady, but they're still perceive margin in the business. Some carriers are willing to give up on price.

Speaker #5: Like all areas of our business, we're pursuing opportunities you know to enhance our distribution capabilities in this segment. And that should help us continue to expand our portfolio.

We are again continuing to see the large carriers pushing hard to maintain and visit that market share revision.

<unk>, obviously added to the briefing session.

Speaker #5: I mean, overall, the markets, the reinsurance markets seem to still be behaving in a relatively disciplined manner from a structure terms, wordings perspective. No pricing pressure is evident.

In our geographic markets, we've always been underway in the U S and we expect that it will continue to be on the market with the greatest opportunity for us to write new business, but like always we're mindful of our risk appetite, our tolerances, particularly in the high cat exposed.

Speaker #5: So, with conditions holding steady, there's still perceived margin in the business. Some carriers are willing to give up more on price. We're again continuing to see the large carriers pushing hard to maintain and build that market share we mentioned earlier.

Regions themselves. So there is room for us to grow up year, both in our specialty Treaty book and in our short favorable lung.

Now Europe, although volatile remains a growth area for us.

Speaker #5: And that's obviously adding to the rating pressure. In our geographic markets, we've always been underweight in the U.S., and we expect that it'll continue to be in the markets with the greatest opportunity for us to write new business.

Story is similar in Mena and Asia Pac.

<unk> and.

And our expanded presence in your business on the ground in those regions are paying.

Benefits.

Now.

Speaker #5: But like always, we're mindful of our risk appetite and our tolerances. Particularly in the high cash exposed regions and zones. So there's room for us to grow here both in our specialty treaty book and in our short-tail lines.

Before we open the call for questions just some final thoughts from my end.

Like I said it started the call we were absolutely including preparing for any headwinds.

They're all part and parcel of our business our industry.

I mean, our strategy our expertise and footprint.

Speaker #5: Now, Europe also remains a growth area for us. Stories similar in MENA, Asia-Pac, regions. And our expanded presence and capabilities on the ground in those regions are paying benefits.

Theyre, all specifically geared towards managing the cyclicality and the volatility of our business lines and markets being a large independent of each other.

We've got a fully unlevered balance sheet.

Speaker #5: Now, before we open the call for questions, just some final thoughts from my end. I mean, like I said at the start of the call, we're absolutely fully prepared for any hedge winds.

Underwriting portfolios diversified many levels and with our physical presence in key regions worldwide, we stay very close to our markets.

We have the right infrastructure with the right experience and.

Speaker #5: You know, they're all part and parcel of our business, of our industry. Our strategy, our expertise, and our footprint are all specifically geared towards managing the cyclicality and the volatility of our business.

And capabilities and our team have successfully execute on our strategy and navigate any and all stages of assignments.

This is the foundation that we have built upon and what gives us the resilience to succeed through market cycles.

Speaker #5: You know, where lines and markets behave largely independent of each other. We've got a fully unlevered balance sheet. Our underwriting portfolios diversify the many levels.

Clearly evidenced in our track records. So we're looking ahead with a healthy dose dose of optimism that we will continue our track records of generating superior value.

Speaker #5: And with our physical presence in key regions worldwide, we stay very close to our markets. We have the right infrastructure with the right experience and capabilities in our people to successfully execute on our strategy and navigate any and all stages the cycle.

For the long term.

So I will pause here and we will turn it over for questions.

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

Thank you we will now begin the question and answer session again to ask a question you May Press Star then one on your Touchtone phone.

Speaker #5: This is the foundation that we are built upon and what gives us the resilience to succeed through market cycles. As clearly evident in our track record.

If you are using a speakerphone please pick up your handset before pressing any keys.

Speaker #5: So we're looking ahead with a healthy dose of optimism. That we will continue our track record of generating superior value for the long term.

If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

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

Speaker #5: So I will pause here and we will turn it over for questions. Operator, when ready to take the first question?

Okay.

Speaker #6: Thank you. We will now begin the question and answer session. Again, to ask a estion, you may press star, then one on your touch tone phone.

Speaker #6: If you are using a speaker phone, please pick up your handset before pressing any keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two.

Your first question today will come from Nick Yakov Heller with domain and partners. Please go ahead.

Okay.

Speaker #6: At this time, we will pause momentarily to assemble our roster.

Hi, great quarter, considering the FX impact.

Curious on that.

Gross retention on a written premium basis was 64% in the quarter was down from 73% year over year.

Can you speak a bit to that I was wondering if that was mix driven in any way or was there just additional opportunistic outwards bye.

<unk>.

Hi, Nathan Thanks for the question.

Speaker #7: Your first question today will come from Nick Iacovello with Dolin & Partners. Please go head.

No. It really is more of a more opportunistic we've been buying a higher level of facultative reinsurance and in the software market.

Speaker #8: Hi. Great quarter. Considering the FX impact. I was curious on the net-to-gross retention on a written premium basis was 64% in the quarter. It was down from 73% year over year.

Again more opportunistic.

Trying to generate business sentiment, but higher millimeter of more fee income or overwriting.

Income as.

Speaker #8: Can you speak a bit to that? I was wondering if that was mixed-driven in any way or was there just, you know, additional opportunistic outwards buying in the quarter?

As well.

Uh huh.

We've expanded.

Also.

Our capabilities in certain lines of business.

Speaker #9: Hi, Nick. Thanks for the question. You know, it really is more of a more opportunistic. We've been buying a higher level of facultative reinsurance in the software market.

On the back of <unk>.

Reinsurance support from the likes of the largest European economy.

We matures.

Our salt.

Speaker #9: Again, more opportunistic. Trying to generate a higher element of more fee income or overriding income as well. You know, we've expanded also our capabilities in certain lines of business.

A piece of the pie from our portfolio so.

Some of it is strategic.

But a big element of it is opportunistic.

Thanks, and then I was just curious Doug that one area of the professional indemnity portfolio that sounds like it will be non renewed.

Speaker #9: On the back of, you ow, reinsurance support from the likes of the large European reinsurers that have sought a piece of the pie from our portfolio.

Based on the domestic gross figure you gave it sounds like there was around 85% quota share on the book as it always been as debt levels or has that.

<unk> increased in recent years or can you just help me think about maybe what the.

Speaker #9: So some of it is strategic. But a big element of it is opportunistic.

Session was a couple of years ago versus now would be helpful. Thanks.

And we moved another two years, it's hovered between sort of the 62 to 80, 85% session. It wasn't always like that is in Israel years, because a much smaller book that.

Speaker #6: Thanks. And then I was just curious though, that one area of the professional indemnity portfolio that sounds like we'll be non-renewed. Based on the net-to-gross figure you gave, it sounds like there's around 85% quota share on the book.

That vehicle, we retained fully for the first couple of years and then we started as we develop the book.

Speaker #6: Has it always been at that level or has that speed increased in recent years? Or could ou just help me think about maybe what the the session was a couple of years ago versus now would be helpful?

Prudent we did it on the back of reinsurance.

Support now.

Last year was around 80 82, 5%.

Speaker #6: Thanks.

And as you know.

Speaker #9: I mean, with the last few years, it's hovered between sort of the 60 to 80, 85% session. It wasn't always like that. In the initial years, it was a much smaller book.

Net impact the gross number.

Looks like it.

Yeah.

It's a big one in the high one but once it took us down through your net numbers and balance of your bottom line.

At the end of the day is it's not material.

Speaker #9: That what do you call it? We retained for the first couple of years and then we started as we developed the book and and grew it.

And ultimately what we're doing by non renewing not by non renewing the book of this size, which I think takes.

Speaker #9: We did it on the back of reinsurance support. Now, you know, that last year was around 80, 82.5 cents. And hence, you know, the net impact, the gross number, you know, looks like it's a big one and a high one.

Volumes as to the discipline.

And the power of that.

Laser sharp focus on the bottom line.

You know with the non renewal of this.

Size portfolio.

The intent here is to improve overall profitability.

Speaker #9: But once it trickles down through your net numbers and down to your bottom line, you know, at the end of the day, it's it's not material.

And that's what we would expect overtime.

With automotive growth.

Speaker #9: And ultimately, what we're ing by non-renewing, not by non-renewing a book of this size, which I think takes, you know, speaks volumes as to the discipline and our razor-sharp focus the bottom line.

That makes sense. Thanks, that's all I have.

Thank you thank you Nick.

Seeing no further questions. This will conclude our question and answer session I would like to turn the conference back over to management for any closing remarks.

Speaker #9: You know, with the non-renewal of this size portfolio, you ow, the intent here is to improve overall profitability. And that's what we expect from with our indemnity authority.

Thank you.

Thank you all for joining us today and thank you for your continued support of <unk>.

As always any additional questions. Please get in touch with Robin.

And she'll be happy to.

To assist them and we all look forward to speaking with you on.

Speaker #6: That makes sense. Thanks. That's all I had. Thank you.

The Q3 call and have a good day, everyone. Thank you very much.

Speaker #9: Thank you, .

Speaker #6: Seeing no further questions, this will conclude our estion and answer session. I like to turn the conference back over to management for any closing remarks.

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

Speaker #9: Thank ou, Nick. And just thank you all for joining us today. And thank you for your continued support of IGI. As always, any additional questions, please get in touch with Robin.

Speaker #9: And she'll be happy assist. And we all look forward to speaking with you on the Q3 call. Have a good day, everyone. Thank you very much.

Speaker #10: Thank you.