International General Insurance Holdings Ltd Aktie

Good day, and welcome to the International General Insurance Holdings Ltd. First Quarter 2026 Financial Results and Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Robin Sidders, Head of Corporate Relations. Please go ahead.

Thank you, John. And good morning, and welcome to today's conference call. Today, we'll be discussing the financial results for the first quarter 2026, which you will have seen in our press release, which we issued after the market closed yesterday. You can find a copy of the press release in the Investors section of our website at iginsure.com, and we've also posted a supplementary investor presentation, which can be found on our website as well on the Presentations page in the Investors section.

On today's call, our 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 walk through the drivers of the results for the first quarter of 2026 and finish up with our views on market conditions and our outlook for the remainder of the year. Then we'll open the call up for Q&A.

I'll begin with some 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.

These forward-looking statements involve risks, uncertainties and assumptions. While 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, 2025.

The company's reports on Form 6-K and other filings with the SEC as well as our results press release issued yesterday evening. And we take no -- we undertake no obligation to update or revise publicly any forward-looking statements, which speak only as of the date they are made.

During this call, we'll use certain non-GAAP financial measures. For a reconciliation of these measures to the nearest GAAP measure, please see our earnings release, which has been filed with the SEC and is available on our website. With that, I'll turn the call over to our Executive Chairman, 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 financial results that we issued last night, we are off to a strong start in 2026. On their own, these results are excellent, but viewed in the context of our long-term performance, they underscore the value of consistency and discipline in executing our strategy.

Long-term success in our business depends heavily on consistency and discipline. No matter what is going on in the world around us -- this is particularly true for IGI given the scope of our portfolio, the high severity lines of business we are writing and our global footprint.

Our value proposition and promise is to provide peace of mind in times of uncertainty to maximize shareholders' returns over time while being a stable, reliable and fair partner to our customers. The first quarter of 2026 has certainly seen its fair share of uncertainty with the ongoing conflict in the Middle East, socially, politically and economically. It is not just impacting the region, but is having global ramifications as well. Already, we are hearing insured market loss estimate upwards of the EUR 3 billion mark. When we established IGI in Amman, Jordan, almost 25 years ago, our initial focus was almost exclusively on the Middle East region.

It's a region we know and understand well and where our relationships are some of the longest in our history. I'll leave it to Waleed to talk more about our Middle East exposures and the dynamics of what is happening in the region. But before I do, I want to reiterate our -- how pleased I am with our performance in the first quarter, notwithstanding the tragic consequences of the war.

As we look ahead to our 25 anniversary year in 2027, I'm immensely proud of all that we have accomplished at IGI. We are a relatively small player in the global insurance landscape, yet we are definitely punching well above our weight in terms of expertise and execution.

This is clearly demonstrated in our financial performance and the significant value that we generate for our shareholders consistently year after year. I will now hand over to Waleed to discuss the numbers in more detail and talk about market conditions and our outlook. And I'll remain on the call for any questions at the end. Waleed?

Good morning. Thank you, Wasef, and thank you all for joining us today. As Wasef or like Wasef, I'm very pleased with our performance in the first quarter. In the face of increasing competitive pressures and heightened global uncertainty, our results are a clear demonstration of our resilience and also stability. Our diversified platform and strong and consistent execution provide us with a lot of optionality, as we've said in the past, and I truly commend all of our people for their focus and skill in capitalizing on the opportunities that are coming out for this uncertainty.

Just turning specifically to the results for the first quarter. I'm going to focus on the key points, the drivers behind the numbers, and then we'll open it up for any questions you may have at the end. And I'll start with some key highlights for the first quarter. We recorded gross written premiums of $197.2 million. That's a 4.5% decline from Q1 '25 and reflects our cycle management actions in the face of increasingly tough market conditions.

We recorded new business across our portfolio, but this was offset somewhat by the nonrenewal of two reinsurance programs. One non-renewed, which was our decision and the other one where the cedent decided to retain and not buy the reinsurance anymore. Underwriting income came in at $37.7 million. That's an increase of 35.1% over the first quarter of 2025, and that resulted in a combined ratio of 89.1% for the quarter. That's 5.3 points better than Q1 of last year and in line with our long-term averages. Combined ratio for Q1 includes about $15 million of net losses related to the Middle East conflict, and I'll talk about that more in a moment. Return on average equity was 12.7%, and the core ROE was 14.3%, both also in line with our long-term averages.

Book value per share was $15.60. That's a slight decline from year-end 2025, but that includes total capital return to shareholders of almost $65 million. That's made up of $51.5 million in dividends, that includes the special dividend of $1.15 that we paid out in April. And then further share repurchases amounted to just over $13.1 million.

Net premiums earned were $111.2 million, relatively flat with the same period of last year. Combined ratio of 89.1% for the first quarter, that includes 19.2 points of cat losses, primarily related to the Middle East war losses and 29 points of favorable prior year reserve development. That compares to Q1 of last year, where the combined ratio was 94.4%, which included 25 points of accident year cat losses and just under 23 points of favorable reserve development.

One thing to point out is that this -- during the first quarter of this year, currency revaluation movements were much less of a feature than some prior quarters and especially compared to the first quarter of last year. All in, we delivered core operating income of $24.4 million or $0.56 per share for the first -- for Q1 of this year versus $19.5 million or $0.42 per share for the first quarter of last year. Specifically on our segment results, we'll start off with the short-tail segment, where conditions continue to be quite mixed. And that's evident in our results for the first quarter.

Rates are still adequate overall, but there's a lot of variation in the level of adequacy from one line to another. And I'll expand on this in a few minutes. Top line was down just by 4%. Underwriting income was down considerably year-over-year, but still in very positive territory at $9.5 million. This is in spite of the level of losses related to the war, again, amounting to about $15 million, mainly recorded in the political violence line, as well as an energy loss in the Persian Gulf.

This ultimately really speaks to how we manage risk and the resilience we've built in our portfolio. In the reinsurance segment, where conditions are becoming more competitive in the business we write, underwriting income was up just under 6% for the first quarter. That's on a lower level of gross written premium and net earned premiums. As I said, there were two programs we non-renewed. But on the flip side, we're starting to see some decent opportunities in the specialty treaty lines. I'll also talk about that in a moment. The long-tail segment was a bright spot in our segment results. We posted 22% increase in top line, driven by new business in most lines, but most notably within the professional indemnity and marine liability lines. You'll recall that this has been the more challenging area of our portfolio for the past 2, 3 years and where we took the decision to nonrenew business with the expectation that in doing so, the overall profitability profile of the segment would improve. Ultimately, underwriting income was up significantly by about $25 million, and that's on a slightly higher net earned premiums due to a higher volume of premiums written. Just quickly to the balance sheet. Total assets were $2.1 billion. Total investments in cash, $1.3 billion. Allocation to fixed income securities generated just over $14 million investment income in the first quarter, and that's a yield of 4.3%. And the average duration came down very slightly to 3.5 years.

During Q1, we repurchased a little over 545,000 common shares. Average price per share was $24.11. At the end of the quarter, we had about 4.1 million shares still outstanding under our existing 5 million common share repurchase authorization. Total equity was $653.6 million at the end of the quarter, and that includes the almost 65 million share repurchases, the common share dividend mentioned earlier, including the special that was paid in April. Now that compares to total equity of just over $710 million at the end of 2025.

Ultimately, we recorded a return on average equity of 12.7% and a core operating ROE of 14.3%. So very strong results, especially considering the overall market softening and the heightened level of uncertainty around the globe. Now before I turn to our market outlook, I'd just like to expand on some of Wasef's comments about the Middle East as it continues to be an important region for us. And I think that in some pockets, there's still a bit of a perception that IGI is predominantly a Middle Eastern company. Now in reality, we're a truly global company with a strong presence and understanding of all our markets. Now that's particularly true in the Middle East through the -- through our offices in Amman and Dubai, where we've been serving clients for decades now.

Specific losses incurred in the first quarter of the year were primarily in the political violence book and predominantly in the UAE and Bahrain relating to physical damage as well as the energy loss I mentioned earlier on the upstream side relating to damage to an oil facility in the Persian Gulf. Now this provides a good pivot for me to turn to our view of the market. The world is clearly a lot more uncertain today than even a year ago. I mean we're seeing instability in many regions around the world, and this is leading to an interesting dynamic in that we're seeing some decent opportunities come out of this uncertainty and dislocation.

Now it's an unfortunate fact, but a reality or the reality of our business that market corrections and improving conditions only happen after significant loss and tragedy. So what this represents really is a little short-term pain for a longer-term gain. The elevated level of competitive pressure across the market that we talked about on the last quarter's call is still very much prevalent, but our vast diversification, broad product offering, global footprint and the local knowledge that we have provides us with a level of resilience and, as we always say, optionality. Turning a bit to our geographic markets and the opportunities we're seeing. I'll start with the Middle East. As I mentioned earlier, we've got teams in Amman and Dubai.

They work closely with our London teams to capitalize on the opportunities arising from the current dynamic. Where we're seeing the most opportunity here is obviously in the PV line, as that is where the bulk of the losses are. And that's in a market, also, which is long overdue for a risk-adjusted pricing correction. Pricing is now many, many multiples of where it was before the war. And when I say that, I mean in some cases, the rate increases we're achieving are amounting to -- in the thousands of percentage point increases. Policy structures are improving. Limits are shrinking significantly.

And where there's historically been an overabundance of Middle East PV capacity, it's now much, much less ample. There's very clearly a changing perception of war risk in the region. And we can capitalize on that effectively and efficiently because we've already -- we already have the experience, significant experience. We already have the relationships, and we have the presence in the region. Now in other -- in other geographic regions like the U.S., Europe, Asia-Pac, the story is fairly similar to what we've said on prior calls.

I'm not going to spend too much time on this, but we're continuing as always to look at these markets in a bigger way and look at new markets at the same time. Now turning to specific lines of business. I'll start with our reinsurance segment, our treaty portfolio. Margins here are still healthy, but competitive pressures are becoming increasingly prevalent as we've been hearing from everybody else. The opportunities here are more concentrated in specialty treaty lines. And that's where there have been significant losses. So, basically, marine, energy and terror and political violence. You'll recall that we added a new senior specialty treaty reinsurance underwriter last October. So we're well positioned at the right time to develop and diversify this part of the portfolio.

In our long-tail segment, we continue to be cautiously optimistic as we've been saying for the last couple of quarters. We're seeing some new opportunities and good deal flow, and you saw that in our first quarter results, especially in the more niche segments like marine liability. Specifically relating to the Baltimore bridge collapse, back in 2024, we've all seen in the news reports that losses are now estimated to be as high, if not in excess, $2.8 billion. And that makes it the single largest loss in the history of the marine market.

This is affecting marine markets globally, particularly the liability side. I want to be clear that IGI doesn't expect any material change in our loss estimates related to this event that we recorded 2 years ago. Instead, I think this is very clearly an opportunity for us to capitalize on improved pricing and demand for capital to grow and expand our direct liability book. We've already seen some of that in 2026, and it's widely expected that renewal rates for the remainder of this year and into 2027 will continue to improve.

Now turning to our short-tail portfolio. I've already spoken about PV. Short-tail marine lines like cargo and specifically cargo war and war on land. We're seeing some positive traction coming out of the war in the Middle East in these areas. Our energy book and certain areas of our property book, 2 of our largest lines are clearly tougher than a year ago.

And even since the beginning of this year, we've seen those competitive pressures further increase to the point of honestly being quite irrational in some cases. Having said that, we continue to see relatively healthy conditions in the more specialist lines like construction and engineering, a continued excellent deal flow and contingency also continues to be a bright spot, and that's a book that continues to grow for us.

So definitely some very good opportunities in the pipeline for us. And this is in spite of the competitive pressures in some of the pockets we spoke about. I mean -- but that, of course, is the nature of our business. In the context of our size, breadth of offering, global footprint, financial strength and ultimately, the expertise of our people, it is a little easier for us to move the dial and write new healthy margin business. We've got a lot of levers to work with, and we're in the position we need to be in right now to take advantage of the opportunities in front of us. Now the underpinning of our strategy and what our track record is built upon, as we've always said, is our disciplined execution. This is embedded in our DNA. We are a resilient company with an almost quarter of a decade history -- a quarter of a century history, excuse me, of consistency and stability.

Our position in the market is much stronger today, and we've shown that we won't compromise on our principles or values under pressure. We've demonstrated clearly that we're not afraid to say no when business doesn't meet our terms or profitability thresholds. And we won't, under any circumstances, sacrifice the bottom line to benefit the top line. Our focus is on intelligence risk selection, paying attention to the small print and being aware of what's going on around us. It's embedded in our corporate culture.

So we will continue to do what we do best. that is to deliver on our promise of being a fair partner to all our stakeholders while generating superior value for our shareholders. So I'm going to pause here, and we will turn it over for questions.

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

[Operator Instructions]

Our first question comes from the line of Rowland Mayor with RBC Capital Markets.

I wanted to quickly say that given all that's going on in the Middle East, I hope everyone at IGIC's family is safe and then congrats on a strong year given all the moving pieces.

Thank you, Rowland. No, I'm glad to say that everybody is in good shape and spirits.

Could you help me with this large non-cat energy loss? And what was the size of it and what happened there?

Yes. Basically, I mean, this is an event that actually was a direct -- indirect consequence of the war where a large support vessel in the energy industry collided into an offshore oil platform. The circumstances around it are not the precautions, but I believe the unfortunate actions that were taken to -- because of the war and the circumstances around the fighting, where, not enough safety measures were taken, and GPS was turned off, lights were turned off and they decided to make a run for it and ended up colliding with an offshore platform.

So it was an unfortunate incident, but that's what we're here for. In terms of the amount for us, that loss amounted to about $10.5 million net to us in the quarter. So those were the circumstances of the loss.

Okay. That's very helpful. And then I wanted to ask on the durability of the opportunity in the political violence and war market. With all the excess capital in the industry today, would you expect that to be durable? Or do you think people will start to rush in once there's some signs of stability in the region?

I mean it depends on your perception of the region. I mean if you're asking me, I can't control what the rest of the market does. I don't think if a political agreement is -- comes to fruition, I don't think that necessarily should or would result in the market piling back in and ignoring what's happened over the last couple of months. I think there's a lot of pain. I mentioned or -- Wasef mentioned the estimated market losses are upwards of EUR 3 billion, and some are talking close to EUR 4 billion. You take that into -- put that into context, the global political violence market premium is estimated to be around $1.5 billion.

So it's been -- this event on its own in one of the smallest PV markets actually in the world, has created so much pain and agony for those involved. So I think regardless of what happens politically, the uncertainty will continue to be there. And I think this -- I'm hoping is a long-term opportunity where, we could quickly make back a lot of the losses that we've incurred and the market can as a whole.

As I mentioned earlier, I mean, we're seeing huge, huge multiples in rate increases. And like I said, in some cases, over in the thousands of percent. And so as I mentioned as well, short-term pain for longer term gain, and I truly believe that is the case on this occasion.

And then if I could squeeze in one more. It looks like the first quarter had bigger reserve releases than other quarters. Can you maybe just walk through what drove the development this quarter?

Yes. I mean I think that's just reinforces what we've always said on of how we approach the reserving side. I mean, if -- putting aside the events of the quarter, I mean, it was an unbelievable quarter for us and prior years continue to perform ahead of expectation. Now the releases weren't concentrated in any specific segment. It was pretty much across the board. But I think it's just a testament to the cautious approach that we always said we take to reserve releases. And we expect that pattern to continue in the coming quarters and years.

As the market deteriorates, I mean, just to give you an idea, as the market -- as we plan, as we update our plans every 6 to 12 months, we update our plan loss ratios, based on our expectation and based on the changing market conditions. And so with the competitive pressures that we've been seeing recently, obviously, our approach will become more cautious. And in the initial 12 months of any accident here, we're pretty much reserving to plan. And following that, we start to take a hard look at actual true incurred performance. And on that basis, that dictates the -- what you call it, the amount or level of reserve development that occurs.

Our next question comes from the line of Michael Phillips with Oppenheimer.

I guess first quick numbers question. Can you give a dollar impact of the two reinsurance contracts that roll off in the quarter?

From from -- I mean, these are portfolios of business that we reinsure. Now one of them -- I mean, it combined, it's probably in the mid to high single-digit millions of dollars in terms of GWP. Now one of them, just to give you some clarity around that, Mike, is that the one we chose to walk away from was because obviously, as we mentioned, we had -- we brought in a specialty treaty underwriter tail end of last year. And that is the book that he would write is something similar to -- what you call it, is similar to what the book that we walked away from.

So it's basically bringing that in-house capability in-house rather than relying on -- or piggybacking on somebody else's portfolio. And then the second one, as I said, the cedent would you call it, decided they wanted to retain the portfolio rather than reinsure part of it out, plain and simple.

Okay. And I just kind of want to circle over on the Middle East stuff. Opportunity is obviously going to come from this. Waleed, when you talk about multiples of rate increases that are in the thousands. I guess I'm trying to get a sense of -- I think political violence for you is in terms of premium is, low single-digit, but other lines that could be affected to create opportunity. Is there a way you can help us think about what's your mix of overall premium that could be affected by this in terms of these opportunities?

Political violence, again, is a big loss line, but I think, again, it's only, what, 2% or 3% of your premium. So what other lines when you talk about these rate increases that are so strong because of what's happened in the Middle East could be affected by your book?

In terms of giving an idea on premium, I think it's very difficult and very early to be able to give any sort of ideas. But I mean, by far, the most -- what do you call it, the line that will have -- will be impacted in the conditions -- terms and conditions will be impacted the most and 100% based on what we've seen and experienced so far is on the political violence side. Not only are the rates multiplying by 10, 15, 20x, but the limits are shrinking, capacity is dwindling. Line sizes are being adjusted by all the players.

Now where I think there's definitely opportunity is again on the marine side, especially on marine -- anything to do related with war, hull war, cargo war, war on land. But we haven't seen the activity in those areas come to fruition in the same -- to the same level that we see in the political violence side. I think it will come. Ultimately, the Strait of Hormuz is effectively still shut with a limited number of ships going in and out. And until those ships are able to now to sail freely, you're not going to see the abundance of that business. So when that happens, I think that you're going to be seeing plenty of opportunity in those lines of business.

But our big focus right now is on the political violence side. And I think that's the -- what you call it, the hanging fruit, if you want to call it that. And I think that will continue. And as I reiterate in my response to Roland's question, I think this is going to be a prolonged opportunity. Where markets will be making their money back, I believe, in quite a short period of time because the conditions regardless of what political agreements or resolutions, I think there were always following these last couple of months, there always the heightened level of uncertainty and cautiousness by the market will stick around for quite a bit, and it should.

The type -- I guess next question is a little weird, but the type of losses that you experienced from these events in the Middle East, do they offer -- they are different kind of losses that we're sort of used to given the infrequent nature of these kind of things. But do these offer any different opportunity for you to have recoverables later? The example you gave of the non-cat loss and the oil rig, made me think of this. But are there different types of opportunities for recoverables from war events down the road?

Nothing outside of the ordinary. I mean, war is war, nobody -- there's no sort of recovery in terms of subrogation or anything like that, that you can think I don't see that happening. Now in terms of the energy loss itself, obviously, the owners of the platform can recover or so look to recover from the owners of the vessel. Now we ensure the platform. We don't -- we have nothing to do with the vessel itself. So over time, we may be able to recover from the owners of the vessel. And it's pretty clear what happened.

The issue you have here is there are statute limitations based on maritime law that limit how much you can recover regardless of the extent of the damage. And that depends on the vessel and its size and its various characteristics of the vessel. We're not 100% certain what those limitations are in this case. But my suspicion is that there will be an element of recovery. I'm not confident that it will be a significant element relative to the size of the actual loss in 100% terms.

Okay. And then maybe just last one, kind of on the same topic. 1Q, we had March. Is there -- is it fair for us to maybe just extrapolate? -- I guess the question is really, what since 1Q look like for those type of losses since the end of the quarter?

Sorry, I didn't get that, Mike.

Yes. Just as we think about 2Q and cat losses for you guys, given the exposure in the Middle East, is it fair for us to kind of think about you had 1 month of losses in March and maybe just extrapolate from there what the second quarter might look like once we see that?

I mean, March was definitely the busiest month. And will there be a continued development of these losses in Q2? Undoubtedly, of course. I mean, any losses that happen will continue to develop. And the -- there was further activity in April. Now most of April was fairly quiet, except for the first week, 10 days. So the event is not necessarily over. And obviously, if there is no political solution to all of this, I'm hoping there is, but if there isn't, then the situation will continue to evolve and develop.

I think the positive thing about political violence business is that the coverages are all provided on an aggregate basis. So once you -- once -- if you get -- as a loss impacts a specific policy that erodes all the limit purchased, there is no second or third event that can happen. It's an aggregate policy and that coverage is exhausted and you're not exposed to it anymore. So that's the positive aspect. So in answer to your question, will there be continued development? Yes. I would expect that development to be more limited than it was in Q1.

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

Well, thank you all for joining us today, as always, and thanks for your continued support for IGI. If anybody has any additional questions, please contact Robin and she'll be happy to assist. And we look forward to speaking to you all on the Q2 call. Have a good day, everyone. Thank you.

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

Good day, and welcome to the International General Insurance Holdings Fourth Quarter and Full Year 2025 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Robin Sidders, Head of Corporate Relations. Please go ahead.

Thank you, Danielle, and good morning. Welcome to today's conference call. Today, we'll be discussing the financial results for the fourth quarter and full year 2025. We issued a press release after the close yesterday, and you can find that on our website in the Investor Relations section at iginsure.com.

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

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 our results for the fourth quarter and full year 2025 and finish up with our views on market conditions and our outlook for the remainder of 2026, and then we'll open the call up for Q&A.

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 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, 2024, the company's reports on Form 6-K and other filings with the SEC as well as our press release issued last evening.

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

During this call, we will 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 is available on our website, as I said.

With that, I'll turn the call over to Executive Chairman, Wasef Jabsheh.

Thank you, Robin, and good day, everyone. Thank you for joining us on today's call. I'm very pleased with the outstanding results we achieved in 2025. Next year will be IGI's 25th anniversary year, which is quite a milestone for us. We have built a successful track record of consistently strong performance, generating significant value for our shareholders over this time.

I'm delighted that in addition to our solid financial results, highlighted by roughly 14% growth in book value, plus the return of more than $108 million to shareholders through our capital management actions that we announced a special dividend of $1.15 per share this morning. This is the third consecutive year that we have taken decision to pay a special dividend in addition to our regular quarterly dividend.

Our ability to do this really shows how our confidence in the strength of our balance sheet and our capital position is. And it rewards our shareholders for their trust and support of IGI over the years. I want to congratulate all of our people whose focus, dedication and loyalty not only produced these results, but who have helped to build our track record for over more than 2 decades. I'm very proud of the people we have at IGI. It is their passion for our business and their belief in what we have built and continue to build at IGI that continues to drive our success.

With this excellent foundation, I'm confident that we will continue to serve as a stable market for our customers and generate strong value for our shareholders in '26 and beyond.

I will now hand over to Waleed to discuss the numbers in more detail and talk about market conditions and our outlook, and I'll remain on the call for any questions at the end. Go ahead, Waleed.

Thank you, Wasef. Good morning, everyone, and thanks for joining us on the call today. As Wasef said, we had an excellent fourth quarter, capping off what was another exceptional year for IGI. Strong underwriting execution, strong investment performance, all of which leading to a very solid bottom line result. This adds a further set of data points to what is a very strong and consistent track record that we've built now over the past 24 years.

To begin with, I'm just going to run through the key highlights of our performance for 2025 before delving into detail into the results. In the last 12 months, we delivered more than $161 million in underwriting income, leading to a combined ratio of just under 86% for the year. That's well below our 10-year average. Delivered a return on average equity of 18.6%, also well below our -- well above our 10-year average. Book value per share growth of almost 14% to $16.91. And finally, capital return to shareholders of more than $108 million in dividends and share repurchases.

And as Wasef mentioned, we announced our ordinary common share dividend in our press release last night and declared another extraordinary special cash dividend this morning, this time, $1.15 per common share, marking the third consecutive year now that we've paid a special cash dividend.

This level of performance is the result of a very well laid out, well-understood strategy that's executed at a very high level consistently year after year. And our history has shown that this strategy is what works for us and drives sustainable value to our business partners, shareholders and our employees. We have what we believe are strategic advantages and attributes that are unique to IGI and that underpin the results we are able to achieve. One, we have a high-performance profitability-driven culture underpinned by strict discipline in underwriting. Two, we've got deep specialist and technical expertise driven by years of experience and an on-the-ground presence in our core regions, allowing us to do business in a manner that is culturally compatible with our markets. Three, we're value-driven, we're long-term focused. And finally, four, our significant insider ownership and founder manager mindset aligns directly with shareholder interest.

Our view of success, as we've said time and time again is not over a 1- or 2-year period, but a much longer-term period encompassing ever-changing conditions, dynamics in our market and more broadly, global social and economic environments that are constantly shifting.

Now I'll move on to the results for the fourth quarter and full year of 2025. I'm going to do this just a little bit differently and really focus on the key points for the quarter and the year and what the drivers are behind the numbers. And then I'm happy to answer any questions any of you may have at the end. Starting with the top line, and as we said would be the case on prior calls, gross premiums written in the fourth quarter were down $33.4 million or just over 19%. Similarly, gross premiums for the full year were down by the same dollar amount, $33.4 million, and that's equivalent to about 4.8 percentage points. This predominantly relates to the nonrenewal of a large professional indemnity binder in our long-tail portfolio that we disclosed to you on our Q2 call last year.

At that time, we said the impact would flow through 4 consecutive quarters starting with Q3 and that the largest portion, which is about half of the total, would be reflected in Q4. So that's what you're predominantly seeing in the top line movements for the quarter.

Net premiums earned were $111.4 million for Q4 '25 versus $120.6 million for the same period in the year before. For the full year, net premiums earned were $453.8 million versus $483.1 million. For the full year, also net premiums earned included the impact of reinstatement premiums on loss-affected business amounting to $10.2 million. We've mentioned this on previous calls. And as I've said before, our reinsurance buying approach is very strategic, aiming really to help mitigate volatility in the high severity lines of business that we write.

It's important to note that our reinsurance purchasing patterns vary depending on where we are in the market cycle. For example, we tend to buy more facultative coverage during periods of softer market conditions, and we retain more risk in harder market conditions. Now this is all part of our cycle management strategy, but it can definitely sometimes result in some distortion in the component parts of our combined ratio, and I'll talk more about that in a moment.

Now the combined ratio for Q4 of '25 was 82%, and that included 18.1 points of accident year cat losses and 5.2 points of favorable reserve development. This compares to 77.8% for Q4 of '24, which included 6 points of accident year cat losses and 2.3 points of favorable reserve development. The Q4 2024 combined ratio also benefited from the impact of about 18.3 points of foreign currency revaluation.

The full year ' 25 combined ratio was just under 86% and included 14.5 points of accident year cat losses and just under 8 points of favorable reserve development. The full year combined ratio was also negatively impacted by about 6 points of negative currency revaluation movement.

Now this compares to a full year 2024 combined ratio of 79.9%, which included 9 points of accident year cat losses, 7.7 points of favorable reserve development and just under 2 points of positive currency revaluation. So if you're looking at it on an FX-neutral basis, we're comparing 79.9% combined ratio for the full year 2025 to 81.8% for 2024.

Now during the fourth quarter of 2025, currency revaluation movements played very tiny miniscule part on our results. But for the full year, in line with the first 3 quarters' results and the commentary there, the volatility of the U.S. dollar during that -- those 3 quarters against our major transactional currencies impacted a number of line items in the results.

Now just a few comments on the G&A expense ratio. For the fourth quarter and full year of '25 versus the same period in '24, we saw increases of 5.9 points or $4.8 million and 2.7 points or $6.6 billion, respectively. Now this is largely the result of new hires, systems costs and a number of other items, which are all part of the investments we've made in the build-out of our business and in our visibility in the market. So you're seeing a higher dollar expense load in the fourth quarter versus Q4 in 2024. The higher fourth quarter '25 expense ratio is then compounded by the lower level of period-over-period net premiums earned.

I would also say that the fourth quarter 2024 G&A ratio -- expense ratio benefited from a reclassification of expenses from the G&A line to the acquisition cost line. So the Q4 year-over-year comparison isn't really on an apples-to-apples basis.

For the full year, you're also seeing the effect of the strengthening of the pound versus our dollar reporting currency during '25. And this directly reflects and impacts the level of G&A expenses that are transacted in pounds, which for our business is fairly chunky. Generally speaking, the total expense ratio provides a true reflection of overall expenses as a component part. And I'm talking here about G&A combined with acquisition costs. And that would -- but that will move around a bit at this stage of the cycle depending upon the cycle management actions that we take.

All in, we delivered net income of $32.3 million or $0.76 per share for Q4 of '25 versus $30 million or $0.65 per share for the same quarter in 2024. For the full year, in 2025, we generated net income of $127.2 million or $2.89 per share versus $135 million or $2.98 per share in 2024.

Moving on to our segment results. In the Short-tail segment, conditions are somewhat mixed, but rates remain broadly adequate. Underwriting income in this segment improved by over 14% for the fourth quarter and declined a little over 7% for the full year, and that's largely due to a lower level of net premiums earned as well as a higher level of ceded premiums.

As I mentioned a moment ago, part and parcel of our cycle management is taking advantage of reduced reinsurance pricing with the aim always to protect and mitigate the volatility in our portfolio. And this definitely becomes more pronounced as the cycle softens.

In the Reinsurance segment, conditions generally remain strong and pricing more than adequate in the business that we write. Underwriting income was down about 4.5% in Q4, predominantly due to a lower level of net earned premiums. But for the full year, underwriting was up almost 30%, and this is a better measure of the true performance of this segment in 2025 and also reflects a shift in focus we made in late 2022 to the higher-margin reinsurance business as part of our cycle management actions, which we've spoken about previously.

Now the Long-tail segment continued -- well, Long-tail segment has continued to be the area of our portfolio that has definitely been the most challenging for several years now. But it's also where we're hopeful for some improvement in 2026 or at least a bottoming out in pricing and conditions. This is the area where we also took action in the second quarter of the year when we've nonrenewed the large account, the PI binder that I mentioned -- we mentioned before, and that's what impacted the top line, both in Q4 and full year for this segment.

Underwriting income for both the fourth quarter and full year of '25 was impacted by lower net earned premiums and more pronounced here is also by the currency valuation movements since this portfolio is primarily transacted in British pounds. Underwriting income of $10 million for Q4 '25. That compares to $14.3 million in Q4 '24. For the full year, we recorded underwriting income of $10.9 million versus $39.5 million for the full year in 2024. Now again, going back to the foreign exchange on an FX-neutral basis, that would have been $29.2 million for '25 versus $34.3 million for '24.

If we turn to the balance sheet, total assets were $2.1 billion. Total investments, cash were $1.32 billion. The allocation to fixed income securities makes up a little over 80% of our investments and cash portfolio. That generated $14.2 million in investment income in Q4 and just under $55 million for the full year. That's a yield of about 4.2%. And we held the duration fairly steady at about 3.6 years.

During the fourth quarter, we repurchased just under 344,000 common shares, average price per share $23.51. At the end of the year, we had about 4.65 million common shares remaining under the new $5 million common share repurchase authorization that we announced before last quarter's call. For us, share repurchases are a strong value generation lever for us, and we view them as highly accretive and excellent value for our shareholders.

At the end of the year, total equity was $710 million, and that includes the share repurchases and common share dividends, including the special dividend of $0.85 that we distributed back in April. This compares to total equity of about $655 million at the end of 2024. Ultimately, we recorded a return on average shareholders' equity of 18.5% for Q4 and 18.6% for the full year. From a total return perspective, we grew book value per share by almost 14% in 2025, and we returned a total of about $62 million to shareholders in share repurchases and just over $46 million in common share dividends.

So all in, an excellent quarter and full year for IGI. Now if I turn to our view on the market briefly, I mean, there isn't a whole lot more that is new or groundbreaking that you haven't really heard -- already heard from others. We've heard various iterations from across the market that things are getting more competitive, and that's entirely accurate. There's very clearly an elevated level of competitive pressure across much of the market, but it continues to be fairly disciplined, but I'll admit, a little less disciplined than anticipated at 1/1. Most important right now is context and the reality is that while rates are under pressure, they do remain adequate in many of the lines of business that we write. And just as an indication, we saw declines averaging around 10% at 1/1.

Looking at specific segments of our portfolio, I'll start with the Reinsurance lines and segments. I mean, margins here are still very healthy. And because of this, this is also the area where we're seeing the greatest push for market share, particularly from the larger carriers. And -- but for us, this is where our S&P upgrade has definitely helped us raise our profile. And as a result, we're seeing more business that we may not have seen otherwise.

Short-tail portfolio remains mixed. Our energy book and certain areas of our property book, which, as you're aware, are 2 of our largest lines, those continue to be tougher than a year ago, and I would say is the areas where we're seeing the most significant pressure.

Having said that, I mean, we're continuing to see relatively healthy conditions in the more specialist lines such as construction and engineering. I mean, in that line, there's a strong pipeline of opportunities out there, particularly with the increase in infrastructure projects and also the number of data centers being built in various geographies around the world.

Similarly, in the marine lines that we write, such as cargo and liability, in these areas, terms and conditions are still holding up reasonably well, and they continue to present new opportunities for us. As I've mentioned before as well, contingency is also still very much a bright spot for us.

In our Long-tail segment, we're cautiously optimistic in our outlook as we're seeing some leveling off in the professional financial lines after several sequential quarters of pricing deterioration. Obviously, this is a little different to what you may be hearing from some U.S. carriers. But remember, we don't write any long-tail U.S. business.

Now in our PI, Professional Indemnity portfolio, which is predominantly U.K.-based, the pace of decline appears to be leveling off. Our relationships across this business are providing us with some new opportunities and a good and healthy deal flow, especially in the more niche segments of the [ market ].

Similarly, in both FI, Financial Institutions, and D&O, we're still seeing some reductions, but the magnitude of decline is definitely narrowing and the pace is slowing. In our geographic markets, similar -- very similar commentary to what we said before, continued focus on the U.S. and specialty treaty and short-tail portfolios, and we're continuing to build up our profile and presence across various geographies, including Europe, MENA region and Asia-Pac.

Now for IGI specifically, context is really critical here. Now for a company of our size, our global strategy and footprint are quite unique. Over the past several years, as is natural to do when market conditions are in your favor and conducive, we've invested heavily in growing our top line, and we've taken actions to strengthen and fortify our business in preparation for when conditions change and become less favorable.

One of our most important achievements coming out of this has been our recent financial strength rating upgrade by S&P, which not only underscores the quality of our results and the strength of our balance sheet, but the confidence that S&P have in our ability to continue doing this consistently into the future. Our level of diversification and our strategy of having local talent with high levels of local knowledge positioned in our core regions means we've got much better chance of success in competing for business that isn't necessarily coming to London.

I said on prior calls that domestic markets across the globe are becoming stronger, making our local operations even more important. Our people on the ground in these markets have specialist technical and marketing expertise. They've got strong network of relationships. And they've got the ability to interact face-to-face and understand the dynamics of how business is transacted in these local markets. For us, that is a clear benefit that provides a lot of leverage.

In the context of our size, footprint and our financial strength, it's a little easier for us relative to our larger competitors to move the dial. That means -- what I mean by that is that we can still find profitable opportunities to write new business across many lines and many geographies within our portfolio whilst maintaining healthy margins. Now while it's perhaps a little harder in today's environment, we have given ourselves a lot more levers to work with in mitigating and managing these conditions better than even 18 months ago.

Especially important is that all of our actions are aimed at protecting the book we've built while continuing to generate healthy margins and add to our value proposition. And that is, in essence, all part of the dynamic cycle management which we're constantly banging the drums of and is the nature of our business and something we have successfully navigated numerous times in our almost now 25-year history.

Having said all that and given where we are in the cycle, it wouldn't be unreasonable to assume that we're likely to see some contraction in top line in certain areas of the portfolio where we decide to walk away from business that, as we've said before, simply doesn't meet our embedded profitability or coverage targets. We've seen this in our general aviation book, which over the last couple of years, we've virtually halved in size due to the tough market conditions. And we're seeing it today in some other lines. But it's this strict discipline that we always talk about that drives us to take these sorts of actions and puts us in a position of optimal strength to make the most of opportunities when they come without being encumbered by short-term thinking decisions of the past.

Looking at 2026, the key focus remains the same: focus, consistency, discipline. This is exactly what underpins successful cycle management and leads to consistent high-quality results and value creation that is sustainable through all stages of the cycle.

Just in closing, I mean, we have outstanding teams at IGI and our track record over almost now 25 years clearly demonstrates not only that we're not just a fair-weather company, but that we won't compromise our principles or values under pressure. We have the experience and we've built a level of resilience in IGI that has put us in a much stronger position than we were going into the last soft cycle, and that is what will continue to drive our success forward for the benefit of all stakeholders.

So I'm going to pause there, and we'll turn it over for questions. Operator, we're ready to take the first question, please.

[Operator Instructions] The first question comes from Michael Phillips from Oppenheimer.

The next question comes from Rowland Mayor from RBC Capital Markets.

Could you maybe walk through the state of competition? And I heard all your comments on it, but I just wanted to understand, do you think the durability of maybe the pricing competition, particularly in property, are we reaching a sort of bottom here? Or do you expect to continue throughout 2026?

Rowland, thanks for the question. I mean, the competition is in line with what we've been really seeing now for many -- quite a few quarters. I mentioned earlier that energy and property lines seem to be the most pressured. I guess, at some point, I don't anticipate that pressure easing off, although there has been talk in the market about the refining aspect of the downstream book and how poorly the results were in 2025 in that area. The hunger seems to still be out there.

That being said, I think there's a lot of hunger on the reinsurance side. And in part of the cycle management, it's not just a discipline on the inwards business, but trading in this environment and taking advantage of the opportunities that a soft market provides and leveraging those opportunities against that inwards business, making it attractive and adequate to get involved with.

So do I see any sort of short-term let down in the competition? In all honesty, I don't. But we can deal with that. We can manage it. We've managed it on the long-tail lines now for quite a few years. And as I mentioned, on the aviation side as well. But yes, the competition is expected to remain at least in the near term.

Yes, that makes sense. And I'm wondering just on the type of insurers you're running into. Is it traditional capital that has always been in the market? Or is it new capital coming in with maybe alternative backing that is creating all the competition right now?

No, no, no. It's pretty much all traditional. And a lot of it is coming from the larger carriers, both within the short-tail lines, the property and energy lines that we were just talking about as well as the reinsurance lines. I think the market is in a state where it has performed well now for several years in a row, by and large. And the market is sitting on a lot of excess capital that they're potentially pressuring themselves to feed. We don't put ourselves in a position like that. As you know, we've got the buyback program, and we're returning capital via special dividends as well. It's just -- it's all about that discipline and writing the business that makes sense and not putting yourself under pressure to go -- to move with the herd.

That's super helpful. And then I did want to talk about the capital. So in the past few years, you've done some M&A to reach into new markets. Is there any opportunity to do that here or multiples just not making sense?

At this point in time, I would say there's nothing really strong on our radar for any of that. I think you've got to be mindful at the same time of the market that we are in and what that means from a capital management and M&A perspective. We're just focused on our business. We're focused on -- as you know, I mean, if you look at our history, we're pretty much almost entirely a story of organic growth. And that is honestly how we prefer to do it.

We're always on the lookout for new opportunities, and I think there are growth opportunities for a company like IGI, both this year and in the years ahead despite the market being tougher. And we're out there fighting hard to find and capitalize on those opportunities. I'm confident we will. But the short answer to your question on the M&A side is nothing solid at the present time.

And then I did want to just try to squeeze one more in on the special dividend announcement this morning. Can you just walk through how you decide the size of the dividend versus buyback and your approach to capital management here?

I mean, by and large, the buyback is something that we're doing throughout the year, right? And a lot of it depends on what ability we have and how much of that we are able to buy. I mean in terms of the special dividend, I mean, when we announced our sort of new at the time capital strategy a few years ago, we said it was basically a focus on the business, underwriting first. Capital position was a lot weaker than what it is, of course, today. But we saw the opportunities at the time in the market. And we said that when we don't see those same opportunities and we don't feel we can feed that capital or need that capital, then we would return it to shareholders. And you started seeing that a couple of years ago from a dividend perspective.

Essentially, we want to make sure we are in a comfortable place from a capital adequacy perspective. Obviously, we've got the upgrade from S&P. That's a huge asset for us that needs protection. We always will. But we've had another fantastic year, generating just under $130 million of profit, growing book value. And the business from a top line perspective has not grown. And as a result, the required amount of capital where we stand hasn't increased, yet you've managed to grow the balance sheet in that regard.

So we tend to wait until the end of the year, see what the results are like, see what our capital position is like and then assess whether we are in a position to give back to shareholders. And if we are, then the amount that we are able to give back to ensure that our capital position remains strong, protecting all our interests, internal and external.

Best of luck in your 25th year.

The next question comes from Michael Phillips from Oppenheimer.

I apologize if any repeats, I was dropped for about 10 minutes here. So hopefully, no repeats. Congrats on the quarter. I guess, Waleed, I wanted to start with maybe just to what extent on the long-tail line business in the fourth quarter did you feel you had to walk away from business that didn't meet your hurdles more so than maybe you did earlier parts of the year?

To be totally honest...

And by the way, let me say this, I apologize. I'm asking not so much on the margins because you -- I think there's lots of confidence in your ability to maintain margins as the soft market maybe continues. But just maybe more so if you consciously walk away, what impact that might have on top line. So if you've already done that, should that continue?

I mean if there's -- thanks, Mike, for the question. The long-tail business has now been in a downward trajectory for a good 3 years plus now. So a lot of that sort of walking away from business. I mentioned on the call that we're seeing a leveling off in a sense or indications of a leveling off in the softening or in the rate reductions. And hopefully, what we'll see in 2026 is a bottoming out of that. Most of that walking away, we're pretty much done.

Now obviously, there's always going to be business here and there that you're going to walk away from. There's going to be new business that comes in. The impact that, that will have on the overall size of the portfolio, I don't think will be material in any shape or form, at least not negatively, once we're done with the PI portfolio that we walked away from. So you're going to continue to see in Q1 and Q2 of this year, the impact of the reduced premiums from the runoff of that portfolio. But we are replacing that with new business.

As I said on the call, we've got a good deal flow with good partners, and we're working hard to make those or to get those materialized. So I think once we're done with the runoff of that PI portfolio and the lost income you'll see in Q1 and Q2 of this year, then you'll see a much more stable and potentially positive trajectory for the long-tail portfolio.

Okay. And then -- I appreciate your comments on the G&A and your opening comments. I guess, some of the pressure on the quarter, obviously, was from the hires that you mentioned and the system build-out. Is that stuff done going forward? Are there any more additional pressure on the dollar amount in the next couple of quarters?

I would say that there will be, I think, more -- definitely more stability. Now this is a big chunk of our expenses are incurred in pounds, right? So if the pound does strengthen, there's nothing we can do about what that means and not a lot we can do about what that means and translates into dollars. So there are certain things that we've got to keep in mind.

Now I think if there's going to be growth from an HR perspective in terms of teams, et cetera, it's going to be more on the underwriting side. If we find new opportunities, bring in new teams to develop new portfolios, build out -- bring in new business, then we will not hesitate to spend the money on that.

I mean that being said, on the -- and I tried to address it and explain it in my own way on the call in my commentary. But I know I understand how, obviously, the combined ratio components of the G&A ratio, the acquisition cost ratio and then obviously, the loss ratio all come together, and we look at them individually, and we do very much so ourselves, 100%. The one thing I would say, though, is that as you -- depending on where you are in the market cycle, your strategy of underwriting, both underwriting the inwards business and then buying the reinsurance that you feel provides you with the optimum protection, right, is going to have an impact and distort some of these ratios depending on which stage you are in the cycle.

So if you notice, we're -- as I mentioned earlier, for example, now, we're buying a lot more facultative reinsurance, offloading elements of risk and exposure that we're happy to offload. And ultimately, what that does is it impacts your net earned premium numbers. But we're doing that very much knowing that, okay, maybe that may result in a higher expense ratio, right? But if it keeps that loss ratio, most importantly, under wrap or under control and helps to reduce and control that loss ratio, then overall, your combined ratio is still going to be healthy and still going to be good.

So it's pulling the different -- taking different actions at different times, pulling the different levers when you see you need to pull them that may distort a couple of numbers. But then overall, when it all comes together, which is the most important thing, when it all comes together, it still looks great.

No, that's perfect. Last one for me. You mentioned the construction business and infrastructure and data centers around the world. One of the things that I think we're seeing here in the U.S. is some of that stuff has been delayed and impacting some insurance companies' top line business. And I wonder if you've seen that in any parts of your construction business at all? Any concerns there?

Do you mean delay in starting the projects or delays in completion of the projects?

Well, both, probably more so on starting, but kind of both.

Yes. I think -- I mean, a lot of these projects, Mike, are quite chunky. The smallest projects in this area meaningfully is in the low single-digit billion sort of contract values. And we've seen projects upwards of $20 billion, depending on which part of the world we're talking about. And these types of projects always tend to take -- they'll come to the market and they take time to be finalized and completed. And you've got all stakeholders, bankers, financing sign off, and that does take time. We haven't -- I mean -- and so that's natural in our -- in the construction portfolio. What we haven't seen is projects being pulled, which -- so that's the positive sign.

So it might take time for them to actually get finalized. But all in all, I mean, this is a big, big -- and you hear everybody talking about. I mean you've seen other carriers go in quite heavily in facilities being set up, et cetera, et cetera, because it's no doubt a big area for everybody going forward.

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

Just want to say thank you to everyone for joining us today, and thanks for your continued support of IGI. As always, any additional questions, please contact Robin. She'll be happy to assist.

I wish you all a great day, and we look forward to speaking with you on next quarter's call. Thank you, everybody.

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

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" Oppenheimer & Co. Inc., Research Division

Good day, and welcome to the International General Insurance Holdings Third Quarter and Nine-Month 2025 Financial Results Conference Call.

[Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Robin Sidders, Head of Corporate Relations. Please go ahead.

Thanks, Bailey, and good morning, and welcome to today's conference call. Today, we'll be discussing the financial results for the third quarter and the first nine months of 2025.

You will have seen our results press release, which we issued after the market closed yesterday. If you'd like a copy of the press release, it's available in the Investors section of our website.

We have also posted a supplementary investor presentation, which can be found on our website on the Presentations page in the Investors section. 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 our results for the third quarter and the first nine months of 2025 and finish up with our views on the market conditions and outlook for the remainder of this year and the upcoming January 1, 2026, renewals.

At that point, we'll open the call up to Q&A. I'll begin with some 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 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 out in the company's annual report on Form 20-F for the year ended 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. 

We undertake no obligation to update or revise publicly any forward-looking statements, which speak only as of the date they are made. 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 also available on our website. 

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. IGI once again delivered excellent results both for the third quarter and the first nine months of 2025.

We generated net income of $33.5 million and $94.9 million for the third quarter and first nine months, respectively. And this resulted in an annualized return on average equity of 20% for the third quarter and 19% for the first nine months of the year.

We continue to outperform and deliver superior results even in what is becoming a more competitive marketplace. We have consistently demonstrated our ability to perform well no matter where we are in the market cycle through focus, discipline, and consistent execution. 

That really is the hallmark of our strategy and why we have successfully managed the cyclicality of our business for well over two decades. Our value at IGI is in our ability to actively manage our capital so that we generate consistently high-quality returns in any stage of the market cycle.

So far, in 2025, in addition to strong earnings, our active capital management has resulted in us growing book value per share by almost 10% to $16.23 per share in the first nine months of the year and returning a total close to $100 million to shareholders in dividends and share repurchases. 

Before I hand over to Waleed, I want to congratulate all of our people at IGI on the tremendous news of our S&P financial grade upgrade to A with a stable outlook.

When we started writing business back in 2002, we were unrated. It was only three years later, in 2005, that we assigned our first rating of BBB from S&P.

To see how far we have come since the early days of IGI through sheer hard work and decision focus gives me immense pride. We have grown largely organically from $25 million of initial capital to almost $700 million in shareholders' equity. This is quite an achievement. 

I will now let Waleed discuss the numbers in more detail and talk about market conditions and our outlook for the remainder of the year, and I will remain on the call for any questions at the end. Waleed, please go ahead.

Thank you, Wasef, and good morning, everyone. Thank you all for joining us on today's call.

Just reiterating what Wasef emphasized at the beginning, we had an excellent third quarter with strong underwriting and investment performance, leading to a very solid bottom-line result.

As Wasef indicated, I mean, we're in our strongest position ever as we close out 2025 and look ahead into 2026 in what is becoming a more challenging environment.

But before I go through the numbers in detail, I'd like to highlight a couple of important points to begin with. First, as Wasef mentioned, the recent announcement from S&P that they've upgraded our financial rating to full A, I mean, this really is a fantastic achievement for us.

And while it's very difficult to quantify the short-term benefit, the upgrade undoubtedly will open more doors for us to new business and more clients and cedents as well.

Like Wasef, I'm also extremely proud of this outstanding achievement. And I congratulate all our teams on the strong track record and the foundation that we have built together at IGI.

I would note that this doesn't really change anything about the level of capital we hold. We've always held capital to the highest level of S&P's capital adequacy and confidence level requirements, and we'll continue to do so.

Second, you will have seen our announcement this morning that our Board has authorized a new $5 million common share repurchase authorization, now that we've exhausted the prior program of 7.5 million shares.

We view share repurchases as a strong value generation lever. And at current levels, we believe that repurchasing our shares is highly accretive and excellent value for our shareholders.

So as always, we're working with all the tools we have in our toolbox, and that's really what cycle management comes down to.

Now moving on to the results of the third quarter and the first 9 months. We'll start with the top line, where gross premiums written in Q3 were just over $131 million, reflecting a decrease of about 5%, driven by a slightly lower volume of GWP in our reinsurance segment and much more so in our long-tail segment.

And now this is a segment, as we've been saying for several quarters now. It's a segment where competitive pressures are more prevalent and where we also made a decision, as mentioned on last quarter's call, to non-renewal large PI account.

For the first 9 months, gross premiums were up marginally to just over EUR 525 million, and that was primarily driven by growth in the reinsurance segment and, to a lesser extent, the short-tail segment.

Net premiums earned were just under $115 million for Q3 versus just over $126 million for the same period last year. For the first 9 months, net premiums earned were $342.5 million versus $362.5 million for the previous year.

For the first 9 months of 2025, the net premiums earned included the impact of reinstatement premiums. We've mentioned on previous calls, reinstating premiums is are loss-affected business, mainly on losses incurred in the early part of the year, which amounted to just over $11 million.

I'll say again that we are strategic buyers of reinsurance to help mitigate really the volatility in some of the high-severity lines of business we write.

Combined ratio for Q3 was 76.5%, and that had the benefit of about 4.5 points of positive currency revaluation in the quarter due to the strengthening of the U.S. dollar.

The third quarter was also relatively benign from a large loss perspective. That's versus the 86% combined ratio for Q3 of last year. We noted the impact of currency revaluation on our results during last quarter's call as well as the previous quarter's call.

During Q3, the U.S. dollar strengthened against our major transactional currencies. So this had the opposite impact during the quarter than what it did during the first 2 quarters of the year when the U.S. dollar weakened.

The impact, however, during the third quarter is much less significant and much more immaterial.

For the first 9 months, the combined ratio was just over 87% with a combined ratio of just over 87% includes the negative impact of about 7.5 points of currency revaluation, which, as I said a moment ago, had a negative currency impact for the first 2 quarters, slightly offset by the positive one in the third quarter.

Again, as well as the lower volume of net premiums earned, from the reinsurance impact I mentioned earlier. This is versus an 80.5% combined ratio for the first 9 months of 2024.

All in, we delivered net income of $33.5 million per share for the quarter versus $34.5 million for the same period in 2024. That resulted in $0.75 for both quarters per share, net income of $0.75 per share.

For the first 9 months of the year, we generated net income of just under $95 million or $2.14 per share, versus just over $105 million or $2.31 per share for the first 9 months of last year.

The period-over-period decline in net income for the same reasons in the first 9 months results lower level of underwriting income due to the currency revaluation movements and again, the higher level of net reinstatement premiums paid on our outwards reinsurance programs.

Core operating income was $38.6 million or $0.87 per share in Q3, compared to $30.7 million or $0.67 per share for the same period the year before.

First nine months of '25 core operating income was just under $81 million or $1.82 per share, versus just under $104 million or $2.29 per share.

With the difference primarily attributable to the lower level of underwriting income, which for that period was negatively impacted by almost $24 million of currency revaluation movements, as well as heightened loss activity from the beginning of the year, which amounted to about 13.4 points of current accident year CAT losses in 2025.

Prior year development was favorable in Q3, amounting to about $10.5 million versus unfavorable development of $7 million for Q3 of 2024. For the first nine months, prior year development was favorable by $30 million versus $34.4 million for the same period last year, with the lower volume in 2025, primarily attributable to currency revaluation of about $20 million.

So on a constant FX basis, we would have seen favorable development of approximately $50 million for the first nine months of this year.

The G&A expense ratio was 21.3% and 20.5% for the third quarter and first nine months of '25, respectively, which, when compared to the same period in 2024, were just impacted by the lower level of net premiums earned.

A few comments on our segment results. I'll start with the short-tail segment. Gross premiums were up 2% in Q3, down 2.7% for the first nine months of the year when compared to the same periods in 2024.

Net premiums earned were down about 10.4% and 8.1% for Q3 and the first nine months of '25, respectively, compared to the same period last year.

The decline for the nine-month period reflects the lower level of written premiums as well as the impact of the reinstatement premiums on our reinsurance purchases.

Underwriting income was down 14.7% in Q3 versus the same period last year, largely due to the lower level of net premiums earned again. For the first nine months, underwriting income was just over $80 million, down 12% when compared to the first nine months of last year.

I mean, similar to what we said on last quarter's call, we continue to see new business opportunities in a number of lines, particularly engineering and construction, and marine lines, and to a lesser degree, contingency and property lines. Broadly speaking, pricing remains adequate.

Engineering, in particular, continues as a healthy growth opportunity with infrastructure projects and opportunities coming to many of our markets across the globe. And we're seeing a healthy pipeline of deal flow in this line of business, though competitive pressures are there.

The reinsurance segment, as we've said, is well diversified geographically and by business line, and generated gross written premiums of just over $11 million in Q3, slightly below the same period in the same quarter last year.

In the first nine months now Q3 is not a significant renewal quarter for us. So in the first nine months, which is a more accurate representation, gross written premium growth was almost 25% on the reinsurance segment to just under $98 million when compared to the same period in 2024.

Conditions generally remain strong, pricing adequate in the business that we write here. But as I'm sure you've heard from everybody else, there's increasing evidence of competitive pressures, which is also what I noted in my comments earlier.

Earned premium was generally flat in Q3 this year versus last year, but more than 21% in the first nine months of this year when compared to the same period last year.

Underwriting income was up 35% and almost 50% for Q3 and the first nine months of '25, respectively, when compared to the same period last year.

The significant increase in underwriting income in this segment reflects really the shift in focus, which we always talk about that we made a year ago to higher margin areas of the business, in this case, obviously, the reinsurance business, and we're now seeing this flow through the financial results.

Long-tail segment continues to be the area of our portfolio that has definitely been the most challenging for the past several years, with increasing competitive pressures and consistently declining rates and thus, obviously, margins, albeit from high levels.

We, as you can see in the numbers, have steadily contracted the book during that time. I mean, you'll recall on last quarter's call, we announced the decision to non-renewal a roughly $50 million GWP professional indemnity account where the profitability profile was simply not meeting our requirements, was out of step with our required threshold, and unlikely to improve in the near-term.

From a top-line perspective, this had some effect in the third quarter and resulted in a big chunk of the overall decrease in GWP in Q3. But the most significant top-line impact of this, which is roughly going to be about $25 million, will be seen in the fourth quarter of 2025.

And as we said on last quarter's call, the rest will be spread out over the first 2 quarters of next year. In the third quarter and first 9 months of '25, gross premiums in this segment were down 12.6% and 7.5%, respectively.

We recorded underwriting income of around $11.5 million for the third quarter versus an underwriting loss of $1 million for the same quarter last year.

For the first 9 months, we recorded underwriting income of $1 million versus just over $25 million for the same period in 2024. And as we mentioned in the first 2 quarters with the difference was largely due to the negative impact of currency revaluation movements, and that amounted to about $17.5 million in the first 9 months of the year.

The one thing I would say here is that the pace of rating decline continues to slow in the lines of business that we're writing. And whilst it would be a bit premature to predict any turnaround in these markets, we're hopeful that there will be signs of improvement in 2026 and into 2027.

Obviously, that comes with a big caveat.

Turning to the balance sheet. Total assets increased by just over 4% to $2.12 billion. Total investment cash was $1.32 billion. Our allocation to fixed income securities, which makes up approximately 80% of our investments in the cash portfolio, generated just over $13 million in investment income in Q3, which was flat in the same period in '24.

For the first 9 months, investment income increased just under 7% to $40.6 million with an average annualized yield of 4.2%. And we hedged out our duration slightly to 3.7 years during the quarter just to lock in higher rates on new bonds.

In Q3, we repurchased almost 800,000 common shares at an average price per share of $23.79. As of the end of Q3, we had exhausted the $7.5 million repurchase authorization.

And as I noted at the start of the call, we announced that our Board has approved a new repurchase authorization of 5 million common shares. Total equity was just under $690 million at the end of Q3, and that includes the impact of $53.8 million in share repurchases and the payment of just over $44 million in common share dividends, including the special dividend that we distributed earlier this year in April of $0.85.

This compares to the total equity of just under $655 million at the end of last year.

Ultimately, we recorded a return on average shareholders' equity of about 20% for the third quarter and about 19% for the first 9 months of 2025.

So from a total return perspective, we grew book value per share by almost 10% in the first 9 months up to September 30, and we returned a total of about $98 million to shareholders in share repurchases and dividends in that same period.

So all in, it was an excellent and great quarter and first 9 months of the year for us. Now turning to our outlook for the remainder of the year and the next major renewal period at 1/1, which is only a few weeks away now. The story is fairly similar to what we've said on last quarter's calls.

There's very clearly an elevated level of competitive pressure across much of the market. But I would characterize it mostly as orderly and quite disciplined up until now.

Given our size, our relative position in the market, the makeup of our portfolio, and the actions we've taken in recent years to enhance our visibility and our scope of offering, we're confident that we will continue to find opportunities to grow our portfolio, write new business.

Obviously, there are pockets where there's more pressure than others. But as we've always said, we have that ability to shift focus to those areas where we believe the best returns are going to be generated. And that's always part and parcel of how we conduct our underwriting business.

We continue to see rate adequacy across much of our portfolio. And I think with our strong network of relationships, we're continuing to pursue opportunities to enhance our distribution capabilities, and that will ultimately generate additional margin and add value to our proposition.

We're focusing on those lines and markets that remain healthier. And where necessary, we're reducing our exposures in areas where we can't generate an acceptable level of risk-adjusted return.

Again, all part and parcel of the dynamic cycle management required. I mean the benefit of our diversified strategy, both by line of business and geographical territory, means that we can still and will still find profitable opportunities to write new business across many lines and geographies within our portfolio.

I mean, we've done a good job of uncovering these opportunities, and I commend our underwriters for their efforts on really getting out there and working their relationships and pushing to find those opportunities.

And without a doubt, the rating upgrade from S&P will benefit us here and again; it surely will open doors for us and move us up the so-called league tables and what is acceptable security, which is critical, given where we are currently in the market cycle.

So the timing of this upgrade is not lost on us. And I would say it is particularly fortuitous. 

Having said all that, given that the market, broadly speaking, is softening, it would definitely be a reasonable assumption that we're likely to see some contraction in top line in certain areas of our portfolio where we decide to walk away from business that simply does not meet our embedded profitability and/or coverage targets. And that's the discipline we talk about so often. 

We've talked on prior calls about the strengthening of domestic markets across the world and the growing desire and the ability to retain business in those domestic and local markets.

Our strategy, as we've said all along, has our people with the required expertise, a specialist expertise situated in most major regions across the globe, which is a clear benefit when we're on the ground, have the ability to interact face-to-face, and understand the dynamics of how business is transacted in those local markets. 

I mean, if we look at specific segments of our portfolio, I'll start with the reinsurance lines. Margins here remain very healthy and carriers are mostly behaving, as I mentioned earlier, in a relatively disciplined manner from a structure, terms, and wording perspective.

Because of this, this is also where we're seeing the greatest push for market share. You may recall our recent announcement that we brought on board a seasoned London market specialty treaty underwriter last week, and this will complement our existing U.S. and international treaty team, while also developing our specialty treaty business with a focus on certain lines such as marine, energy, terror, PV, as well as aviation and cyber. 

This is where we've had a limited presence, and we haven't really had any dedicated resources to focus on these areas. And definitely, again, here, in particular, the S&P upgrade will help quite a bit.

Our short-tail portfolio, as you know, is traditional property, energy, marine books, as well as some other pure specialty and niche lines. That remains a bit of a mixed bag as it has been for several quarters now, and overall continues to be a little tougher than a year ago.

I mean, similar to reinsurance, where carriers tend to take big lines, the most significant pressures continue to be on property and energy, where the line sizes in those lines of business are, by nature, larger. 

We recently added senior talent to our property team focusing on the U.S., and we're adding to our energy team, specifically in downstream and power, and renewables. And that is a reflection of the opportunity we believe continues to be there in these lines of business. 

As I mentioned earlier, I mean, we continue to see healthy opportunities in some of the more specialist lines like construction and engineering, specifically some of the smaller projects in the U.S. and also in other regions like Asia Pac and the Middle East as well.

Elements of the marine book, cargo, in particular, continue to be steady and present new opportunities to us, especially in the niche segment of the cargo market that we focus on. 

Contingency has been a great line of business for us in a very bright spot. And you'll recall that we entered that market after COVID. And since then, we've built a market-leading book with an amazing team.

In our long-tail segment, net rates overall are still relatively adequate, but that adequacy is reducing as rates come down. But as I said earlier, the pace of rating decline continues to slow at a modest rate.

And again, I don't want to go out of the NIM here, but there are indications there may be some brighter news later in 2026 and in 2027. Again, this comes with a big caveat. 

The PI business, which is the largest portfolio in this segment, is, as we've said before, largely facilitized. But I mean, there's been a fair bit of talent movement here with underwriters moving or setting up shops.

And that with our relationships across this business, that's providing us some new opportunities and a good deal of flow, especially in the more niche segments of the PI market. 

In the geographic markets, I'll say a few words here. Again, a similar story as last quarter. The U.S., whilst competitive pressures are increasing, remains a big focus for us and presents probably one of the bigger opportunities for us to write new business, especially in our specialty treaty and short-tail portfolios.

I mean, simply also because of the sheer size of IGI compared to the sheer size of the market. 

We also remain focused on building our profile, as we've mentioned many times before, across Europe and growing the profile in the MENA region and Asia Pac markets.

As I mentioned earlier, they're all retaining more business locally, and we've got the network to capitalize on that. So our expanded presence and capabilities on the ground here will definitely continue to pay benefits. 

So we're clearly, I mean, at the stage of the broader cycle where portfolio and exposure management is critical. I mean, I cannot emphasize this enough, so I'll keep saying this again that we will not sacrifice the bottom line for the benefit of the top line.

It really is all about discipline right now. intelligent risk selection, paying attention to the small print, and being aware of what's going on around us. 

That's what the prudent management of the cycle and sound management of the cycle is all about. I mean, we're coming off 5 years of excellent profitability. And I say that not just about IGI, but the broader market as well.

It's not difficult, in all honesty, to do well during a hard market. But good underwriters don't just do well in hard markets. They do well throughout any and all stages of the cycle. 

And that is what we have at IGI, and that is the talent we attract and retain, and that is the discipline we exercise. We have the right strategy and the right footprint.

We've built great teams and put the right people in the right places, and we've built a very solid foundation, a very well-diversified portfolio, particularly given our size. 

And all this is backed by a fully unlevered and solid balance sheet. We have a proven track record, and IGI's visibility in the market has improved dramatically over the last few years. That is what's earned us our recent upgrade, and that is what gives us the resilience to succeed throughout market cycles. 

So, rest assured, we'll continue doing what we do best, which is to focus on generating superior value for the long term with a razor-sharp focus on underwriting profitability, quality, and bottom line.

I'm going to pause here, and we're going to turn it over for questions. So, operator, we're ready to take the first question, please.

[Operator Instructions]

The first question comes from Michael Phillips with Oppenheimer.

Well, I always appreciate all your comments on the market conditions. I guess another good quarter on the margin side, you're fighting the tape that the industry is fighting on the top line.

I guess with that, on the long-tail side of your business, the segment there, can you talk about are you closer to the point with rates declining? 

I think you said in your ending comments there that the pace of decline is starting to slow; maybe it's not good news. But are you closer to the point where the nonrenewal account that you did last quarter? I know you constantly look at that.

Are you close to the point where there might be others that are not meeting your threshold that you kind of have to walk away from?

Michael Phillips, thanks for the question. The simple answer is no. That book of business that we walked away from had its particular characteristics and segment that you can simply isolate in terms of the niches and the behavior of the market in that regard.

So outside of that, no, there isn't anything on our screens that we are contemplating walking away from. If anything, we're identifying other segments of the PI market. 

As I mentioned on the call, people moving shops, wanting support, whilst I can't go into lots of details at the moment, but these are underwriters that we know very well, have some of the strongest track records in the market, understand their businesses inside out, and are looking for support. 

We're trying to capitalize on those opportunities where we can access portfolios of businesses that we deem extremely healthy that can more than make up, especially on a net written premium basis, can more than make up for the PI account that we walked away from.

I guess maybe turn to the reinsurance segment for a second. There, it seems like we're getting closer to 1/1 renewals here. And as you said, year-to-date, you're up, and the third quarter is not a big renewal period for you. 

But as you look at the beginning of the year here, do you think that there's going to be more pressure on the top line for your reinsurance book than what you've seen in 1Q each quarter each year for the past couple of years has been pretty strong. This quarter this year might challenge that. I guess what are your thoughts on reinsurance if we enter 1/1?

I mean, listen, Q1 this year was strong. Q1 last year and the year before were very, very strong because we were in a different stage within the cycle for the reinsurance market.

There's no doubt about that. Is that going to continue? Of course, it's not going to continue because you're seeing pressure coming in, where, following a very benign wind season this year, we've got less than 2 months left in the year. 

If barring any major events in that time period and ahead of discussions and negotiations for the 1/1 business, the market is going to generate another great set of results, generate excess capital, and that's going to put pressure on feeling that capital. Is Hunger going to increase as we stand today at 1/1? I have no doubt that it will. 

One thing that you need to take into consideration, number one, we're adding the specialty bit. So that's a new source or relatively new source of income for IGI.

And number two, our book is so diverse by business line, by geography. It's not your traditional large reinsurer type portfolio, not your traditional European reinsurance portfolio, traditional Bermudan reinsurance portfolio, or U.S. reinsurance portfolio. 

So, we've got a lot of levers to pull here. And we've said this before, and I'll say it again, Mike, ultimately, this is not a top-line game. We are in this for underwriting quality, underwriting profitability.

And I think I recall a comment I said to you a couple of quarters ago, I'd rather write a $700 million book generating 80% combined ratio rather than $1 billion book generating a 90% or 95% combined ratio. 

We are underwriters, plain and simple. We manage the cycle. But I do see runway for us in reinsurance, definitely, as we, would you call it, enter into new areas, not just in specialty, but others. We've got a team across the globe, honestly, that pretty much understands what they're doing. 

And you can see that in the results. We put emphasis on reinsurance a couple of years ago, and we said that's where the area where we think the healthiest returns will be generated. And as you're seeing now, that's exactly what's happening.

And I'm glad you reminded me of the quote that you gave a couple of quarters ago. That was one of my favorite quotes all the time. You'd rather focus on the bottom line, and you guys do that. I guess, given your comments, your reinsurance book, as you said, is not traditional large reinsurance. 

So maybe just lastly, to the extent you can comment on industry comment here, in the U.S., we're hearing a mixed story. Some reinsurers are saying that large account property has reached a floor and will start to improve from here.

Others are saying, heck, a way, it's still going to continue to decelerate from here on large account property in the U.S. I don't know if you have any perspective on that or not. I appreciate it. 

By large account property, you mean risk covers or cat covers?

Risk covers, yes.

Risk covers.

I don't think it's bottoming out, to be totally honest with you. That's not what we're seeing.

But again, that's not an area we play in hugely, especially on a reinsurance basis. But I think the hunger will continue to be there at 1/1. I don't anticipate things turning in the opposite direction in that area. But again, I would say I'm not the best person to answer that question.

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

Just some final words. Again, thank you for joining us today. Thank you all for your continued support of IGI.

If you have any questions, as always, you can contact Robin, and she'll be happy to assist. And we look forward to speaking to you on next quarter's call. In the meantime, I wish everybody a Merry Christmas and happy holidays. I know it's a bit early, and happy New Year to all. Thank you.

The conference has now concluded. You may now disconnect.

Good day, and welcome to the International General Insurance Holdings Limited Second Quarter and First Half 2025 Financial Results Conference Call. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Robin Sidders, Head of Investor Relations. Please go ahead.

Thanks, Nick, and good morning, and welcome to today's conference call. Today we'll be discussing the financial results for the second quarter and first half of 2025. You will have seen our press release that we issued after the market closed yesterday. That press release can be found on our website at www.iginsure.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 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 you through the key drivers of our results for the second quarter and first half and finish up with our views on market conditions and the outlook for the remainder of 2025. At that point, we'll open up the call for questions that any of the dialers may have.

So 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 31st of December 2024, the company's reports on Form 6-K, 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, which speak only 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, is available on our website.

With that, I'll turn the call over to our Executive Chairman, Wasef Jabsheh. Wasef?

IGI once again delivered excellent results both for the second quarter and first 6 months of 2025. We generated net income of $34.1 million and $61.4 million for the second quarter and first 6 months, respectively. And this resulted in an annualized return on average equity of 20.8% for the second quarter and 18.6% first half of the year. I'm very pleased with our strong performance, particularly our ability to maintain our focus, exercise discipline, and execute consistently.

Given the very integrated nature of our portfolio as well as our presence in many regions, we are often directly exposed to some form of geopolitical and/or macroeconomic uncertainty. Over more than 20 years, we have consistently demonstrated our strength and proficiency in managing through all stages of cycle, moving our capital to those areas with the strongest rate momentum and the highest margins and reducing in other areas where conditions are such that we are not able to meet our profitability targets. That is the tail wind and the benefit of having a very diversified platform and always working within our risk appetite and tolerances.

Our value at IGI is in our ability to generate consistently high-quality results in any stage of market cycle so that we continue to reward our shareholders who have put their trust in us and supported us. So far in 2025, in addition to strong earnings, our proactive capital management has resulted in us growing book value per share by 3.4% to $15.36 per share in the first half of the year and returning a total of $77 million to shareholders in dividends and share repurchases.

I will now let Waleed discuss the numbers in more detail and talk about market conditions and our outlook for the remainder of the year. I will remain on the call for any questions at the end.

Thank you, Wasef. Good morning, everyone, and thank you for joining us on call today. We had an excellent second quarter and first half of 2025. And as Wasef indicated, we're in a strong position as we continue through the second half of the year. We're still seeing decent additions and rate adequacy across much of our portfolio and pursuing opportunities to enhance our distribution capabilities that will ultimately generate additional value. Our goal 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.

In 2025, while conditions remain generally healthy, there are areas of our portfolio, which are facing slightly more competitive pressures. We've mentioned those in previous calls. So we're focusing on those lines and markets that remain healthier and reducing our exposures in areas where we can't generate the acceptable level of risk-adjusted return. At the end of the day, this is what cycle management is all about. So before I go through the numbers in detail, it's important to note upfront the meaningful impact that foreign currency movements has on our results once again this quarter.

And that is specifically on the revaluation of our non-U.S. dollar-denominated loss reserves and how this flows through a number of line items in our results, most significantly on our underwriting results as you saw for both -- you saw that in both the second quarter and the first 6 months of the year.

As you know, our underwriting portfolio, as Wasef mentioned, is very international in nature. Similarly, our investment portfolio is also very geographically diversified. This ensures, however, that we're always striving to achieve as accurate a match as possible between our assets and our liabilities, although it's never an exact science.

Now roughly half of our underwriting portfolio is transacted in either non-U.S. dollars or non-U.S. dollar based currencies. And this by far is most pronounced in our long-tail segment, which as of June 30 represented around 22% of total gross premium. About 80% of this portfolio is transacted in sterling, in British pounds. But more importantly, almost half of the group's total reserves are held against the long-tail segment. And the sheer nature of long-tail business means these reserves are held for a longer period of time. And for IGI, that means about 6 to 8 years on average.

So when the U.S. dollar, our financial reporting currency, when the U.S. dollar weakens meaningfully against the pound as it did at the start of the year, and even more so during the second quarter, the resulting impact on the revaluation of our reserves undoubtedly led to a somewhat distorted view of the underwriting results, specifically our loss ratio and obviously, therefore, ultimately our combined ratio and also our core operating results. So as I go through the results, I'll try and provide the dollar or percentage value impact where it meaningfully distorts period-over-period comparisons in our results.

Now specifically on the numbers and starting with the top line. Gross premiums in the second quarter of 2025 were just under $190 million, reflecting a decrease of 8.7% 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, primarily driven by growth in the reinsurance segment where we continue to take advantage of both, the more positive market conditions, which I'll talk about more in a moment.

Net earned premium was $115 million for the second quarter of 2025 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 second quarter and first 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-affected business amounting to $2.6 million this quarter against $9.9 million for the first half. 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 combined ratio for the second 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-U.S. dollar loss reserves. The impact amounted to approximately 21 points in Q2 and 15 points in the first half. Here are these numbers, and this really underscores the strength of our fundamental performance in what is becoming a more competitive environment. 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 premium from the reinstatement premium impact I mentioned a couple of minutes ago.

All in, we delivered net income of $34.1 million or $0.77 per share for the second quarter versus $32.8 million or $0.73 per share for the second quarter of last year. It's important to note here that when you look at the second quarter specifically, even though our combined ratio was almost 10 points higher and our net earned premium base was almost 6.6% lower, we still produced a net income that was higher by 4% over the second quarter of '24, clearly illustrating the strength of our underlying performance.

For the first half of this year, we generated net income of $61.4 million or $1.36 per share versus $70.7 million 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, but also a greater level of loss activity and the higher level of [indiscernible].

Core operating income was $22.8 million or $0.51 per share in Q2 compared to $33.2 million or $0.74 per share in Q2 last year. For the first 6 months of '25, core operating income was $42.2 million or $0.93 per share versus $73.3 million or $1.61 per share, with the difference again primarily attributable to a lower level of underwriting income impacted by the currency devaluation. And there was a higher loss activity, specifically 16.9 points for current accident year CAT losses that we mainly saw in the first quarter.

Prior year development was unfavorable in Q2, amounting to $6.3 million, primarily driven by the impact of about just under $20 million currency revaluation. Out of which, and the majority, as we mentioned earlier, in the long-tail segment came up to about almost $14 million as that business, as we said, is largely transacted in pound sterling.

For the first 6 months, prior year development was favorable by just under $20 million versus $41.5 million for the first half of last year, with the lower volume primarily attributable to the currency revaluation, which in 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 6 months of this year. And I'll talk more about the long-tail segment in a moment. The G&A expense ratio was 21% in Q2 versus 20.1% for the first half.

Now a few comments on our segment results. In our short-tail segment, gross premiums were down 8.5% and 4.2% for the second quarter and first half, respectively. Consequently, earned premiums were also down 8.4% and 6.9% for Q2 and H1 of '25 compared to the same period in '24. The decline in both periods reflects the lower level of written premiums as well as the impact of reinstated premiums on our reinsurance purchases. The 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 the previous year. For the first 6 months, underwriting income was just over $50 million, down about 10 points when compared to the first half of '24.

And we continue to see new business opportunities in a number of lines, particularly engineering and construction, in marine lines and to a lesser degree, contingency and property lines. Although broadly speaking, 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.

Gross premiums in the Reinsurance segment, the Treaty segment, which is, as we always say, is very well diversified geographically, were flat compared to the second quarter of last year, 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 1st of January.

Growth was mainly in marine, energy, PV terror, and to a lesser extent, the property lines. Now conditions generally remain strong and pricing adequate in this business in this line, in this segment, but there is definitely increasing evidence of competitive pressures.

Earned premium was up just over 21% in Q2 and about 1/3 in the first half of '25 compared to the same period the previous year. 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. The significant increase in that underwriting income in the segment clearly illustrates the shift of focus -- shift in focus, which we always talk about that we made a year ago to higher-margin reinsurance business. 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. This has been the case now for many quarters. We've said time and time again, and I expect will continue to be the case for at least the near term. And this is the segment where our cycle management capabilities are clearly evident as we purposely contracted the book by around 15% since 2021 after several years of healthy top line growth when market conditions were very much in our favor. And we've been talking -- we've been taking a very cautious approach to rates, have been consistently now declining for many, many quarters, albeit from very high levels, but the pace of decline is now showing signs of slowing down.

In the second quarter and first half of '25, gross premiums were down almost 12% and almost 5%, respectively, in the segment. We recorded an underwriting loss of about $3 million for 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.

Now I'll take a moment to add some context here. Again, first is FX. The currency value, the revaluation of non-U.S. dollar reserves, which I said -- as I said earlier, impact this segment, the long-tail segment the most by far as the vast majority of our business is transacted in pounds. So 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 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 have led to reductions in rates and lower margins. So we're generating less written and earned premium. And finally, we saw a higher level of losses in this segment, especially in the first quarter and specifically within our professional hedge fund. And this has led to a higher level of reinstatement.

We've indicated on our last 2 calls that we were reviewing one area of our professional indemnity portfolio, which has not been performing up to par. And we have now made that decision to not review this. As I said, nothing systemic, generally poor performance where the results simply aren't meeting our targets and with the outlook unlikely to improve enough for us in the near term to change our view, which just isn't due 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 $60 million in total. About 10% of that will be reflected in Q3, 50% in Q4, and the remainder will be spread over the first half of next year. Now while the impact overall seems 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 million or $7 million. 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.

Now turning to the balance sheet. Total assets increased by just over 4% to about $2.1 billion. Total investments in cash were $1.3 billion. Our fixed income securities, which makes approximately 80% of our investments and cash portfolio generated just under $14 million in investment income in the second quarter, which is an increase over the Q2 of last year of about just over 5%. For the first 6 months of the year, investment income increased more than 10% to about $27.5 million with an average annualized yield of 4.4%. And we also edged out the duration slightly to 3.5 years during the quarter to lock in higher rates on some new bonds.

In the second quarter, we repurchased just over 1.34 million common shares at an average price per share of $23.28. As of the end of Q2, this leaves approximately 800,000 shares remaining on our existing 7.5 million repurchase authorization.

Total equity was $662.2 million at the end of Q2, and that includes the impact of share repurchases and the payment of $42 million in common share dividends, including the special dividend of $0.85 that we paid back in April. This compares to total equity of $654.8 million at the end of last year.

Ultimately, we recorded a return on average shareholders' equity of 20.8% for the second quarter and 18.6% for the first 6 months of this year. So from a total return perspective, we grew book value per share by 3.4% in the first 6 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 the noise from currency movement aside, it was an excellent quarter and an excellent first half of 2025.

Now specifically on what we're seeing in our markets, that elevated competitive pressure is there. And in some areas, it is increasing more than others. In spite of the headwinds facing our sector, we continue to seek and find profitable opportunities to write new business across many lines within our portfolio. And I expect overall, we will continue to see some contraction in top line in certain areas of our portfolio where profitability and coverages just don't meet our required targets.

This is very much the benefit of having a multifaceted diversification strategy, specialist expertise, and people on the ground in our regional markets. 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.

The individual elements of our portfolio don't move in unison as we all know. I said on last quarter's call that domestic markets across the world are becoming stronger and more resilient, and there's much higher desire, growing desire to retain business 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.

We're seeing mixed conditions across much of our portfolio, consistent with what we said on previous quarters' calls. Some areas remain quite -- relatively quite healthy, while other areas are seeing a little more competition and as such, rating pressure. Generally speaking, reinsurance lines remain healthy as we saw on the short-tail lines. We're clearly at the stage of the broader cycle where portfolio and exposure management is absolutely critical.

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. And we won't succeed at that if we give into some of the more pervasive pressures that are driving rates and ultimately profitability downwards. Now in our long-tail segment, net rates overall do remain adequate in most areas. And the pace of rating decline, as I said a few moments ago, has slowed down moderately.

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 U.S. liability business. In both Oslo and Malta, where registration is a slower process, we've expanded our capabilities over a year ago, and these efforts are starting now to bear fruit.

Our outlook on short-tail lines continues to be fairly consistent with what we've been saying in prior quarters, although the market is definitely becoming tougher as we [indiscernible] this earnings season. We're seeing greatest pressure in property and especially energy lines, particularly downstream energy. Where we're seeing the most opportunities in the more specialist lines like construction, engineering, as I mentioned earlier, some marine lines. And in those marine lines, certain business, much of that business is renewing at least on a flat or as before basis, if not slightly higher rates.

The loss events, unfortunately, of the first few months of '25 don't appear to have had much impact on market conditions in any specific line. And again, unfortunately, we continue to see more intense competition from both the large multinational carriers and from the MGAs. And you heard comments from other carriers this earnings season on the impact of MGAs.

On the whole, we are supporters of and users of [indiscernible] business where we can access the business ourselves. And we've built a strong dedicated insurance team internally to invest and manage that business. But there are certain elements of that [indiscernible] business that are less disciplined, not just on pricing, but also on terms, conditions and most importantly, on coverages.

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. Now that said, the major 1/1 and 4/1 renewals are behind us. So significant growth in the segment in the second half of the year will be a lot more muted. Like all areas of our business, we're pursuing opportunities to enhance our distribution capabilities in this segment, and that should help us continue to expand our portfolio.

I mean, overall, the markets -- the reinsurance market seems to still be behaving in a relatively disciplined manner from a structure, terms, wordings perspective. So pricing pressure is -- so with conditions holding steady and there's still perceived margin in the business, some carriers are willing to give up more on price. We are again continuing to see the large carriers pushing hard to maintain and build that market share we mentioned earlier, and that's obviously adding to the rate pressure.

In our geographic markets, we've always been underweight in the U.S., and we expect that it will continue to be on the markets 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 regions and zones. So there's room for us to grow here, both in our specialty treaty book and in our short-tail lines.

Now Europe also remains a growth area for us. Story similar in MENA and Asia Pac regions and our expanded presence and capabilities on the ground in those regions are paying benefits.

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 headwinds. They're all part and parcel of our business, our industry. I mean, our strategy, our expertise, and footprint, all specifically geared towards managing the cyclicality and the volatility of our business, where lines and markets behave largely independent of each other. We've got a fully unlevered balance sheet. Our underwriting portfolio is diversified at 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 capabilities in our people to successfully execute on our strategy and navigate any and all stages of the cycle. 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. 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.

So I will pause here, and we will turn it over for questions. Operator, we're ready to take the first question.

[Operator Instructions] First question today will come from Nic Iacoviello with Dowling & Partners.

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. 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 buying in the quarter?

Nic, thanks for the question. No, it really is more of the -- more opportunistic. We've been buying a higher level of facultative reinsurance in the softer market, again, more opportunistic, trying to generate higher little bit of more fee income or overwriting income as well. We expanded also our capabilities in certain lines of business on the back of reinsurer support from the likes of the large European reinsurers that have sought a piece of the pie from our portfolio. So some of it is strategic, but I think elements of it is opportunistic.

And then I was just curious that one area of the professional indemnity portfolio that sounds like will be non-renewed. Based on the net to gross figure you gave, it sounds like there was around 85% quota share on the book. Has it always been at that level? Or has that feed increased in recent years? Or can you just help me think about maybe what the session was a couple of years ago versus now, would be helpful?

I mean over 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 that we retained for the first couple of years and then we started. As we developed the book and grew it, we did it on the back of reinsurance support. Now that last year was around 80%, 82.5%. And hence, the net impact, the gross number looks like it's a big one, a high one. But once it trickles down through your net numbers and down to your bottom line, at the end of the day, it's not material. And ultimately, what we're doing by non-renewing a book of this size, which I think takes -- speaks volumes as to the discipline and our razor sharp focus on the bottom line. With the nonrenewal of this size portfolio, the intent here is to improve overall profitability, and that's what we expect will ultimately occur.

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.

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

Thank you.

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