MARC has affirmed its insurer financial strength rating of AA+ with a stable outlook on International General Insurance Co Ltd (IGI). The Bermuda-based insurer’s strong premium growth, well-diversified underwriting portfolio and strong capitalisation remain key rating drivers. A key moderating factor is IGI’s moderate asset size which stood at US$1.3 billion as at end-2020.

IGI is a specialty insurer operating across several established business lines and geographies. Gross written premiums (GWP) grew to US$467.3 million as at end-2020 from US$349.3 million in the previous year. The higher GWP growth of 33.8% y-o-y (2019: 15.8%) was supported by strong underwriting performance in the casualty and property lines. Notwithstanding the strong performance, IGI is exposed to catastrophic events although this is mitigated by its reinsurance strategy and management expertise to manage risk. This has been evident in the recent catastrophic flooding across parts of Europe where IGI has indicated that its exposure to the event is estimated at a modest USD7.9 million, which would be adequately covered by its high capital surplus. In regard to the impact from the COVID-19 pandemic, the insurer has not been affected by significant claims as its underwriting policies normally exclude non-physical damage to business.

Despite the higher GWP growth, net profit only grew marginally y-o-y to US$33.3 million mainly due to higher expenses from listing on Nasdaq in 2020.  Net combined ratio stood at 89.9% while return on assets and equity were 2.8% and 9.7%. IGI maintains a strong capital base as reflected by a regulatory solvency ratio of 180% as at end-2020, higher than the Bermuda Monetary Authority’s minimum solvency margin of 120%. Its statutory capital and surplus at US$359 million as at end-2020 provides a strong buffer to absorb losses. IGI maintains healthy cash and short-term deposits of US$305.2 million or 39.4% of the insurer’s portfolio while liquidity position remains sound with a liquid assets-to-net technical reserves ratio of 142.5%.

Farhan Darham,;
Haziq Najmuddin,;
Mohd Izazee Ismail, 

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