International General Insurance's 2025 Q1 Earnings Call: Navigating Contradictions in MGAs, FX Impact, and Aviation Outlook

Strategy for MGAs, impact of FX on combined ratio, outlook on the aviation market, aviation market profitability and strategy are the key contradictions discussed in International General Insurance's latest 2025Q1 earnings call.



Financial Performance and Market Conditions:
- International General Insurance Holdings Ltd. reported a combined ratio of 94.4% for Q1 2025, demonstrating resilience in the face of elevated loss environments and macroeconomic uncertainty.
- This resilience is attributed to the company's diversification strategy and the disciplined execution of its underwriters.

Currency Volatility Impact:
- The company experienced an approximate 10 points currency revaluation impact on non-U.S. dollar reserves, negatively affecting the Q1 2025 combined ratio.
- This impact was due to the strengthening of the U.S. dollar against major transactional currencies like the British pound.

Reinsurance Segment Growth:
- The reinsurance treaty segment showed positive top-line growth of almost 44%, driven by new business.
- Growth was primarily due to strong rating adequacy and new business in specialty treaty lines, particularly marine, energy, and property.

Short-Tail and Long-Tail Segment Challenges:
- Short-tail segment premiums were up 2%, while earned premiums decreased 5.3%, reflecting the impact of reinstated premiums on reinsurance purchases.
- The long-tail segment remains challenging with top-line contraction, driven by a higher level of loss activity, foreign exchange volatility, and reinstatement premiums.

Special Dividend and Shareholder Returns:
- The company paid a special dividend of $0.85 per share during Q1, returning a total of $43.5 million to shareholders.
- This action reflects the company's strong financial position and commitment to shareholder value despite market challenges.