Executive Summary / Key Takeaways

• International General Insurance Holdings Ltd. (IGIC) demonstrates a robust investment thesis centered on disciplined, specialized underwriting and proactive cycle management, consistently delivering strong profitability and shareholder value despite increasing market competition and macroeconomic volatility.
• The company reported excellent financial results for the first half of 2025, including net income of $61.4 million and an annualized return on average equity of 18.6%, underscoring fundamental strength even as foreign currency movements significantly impacted reported underwriting figures.
• IGIC's strategic focus on bottom-line profitability over top-line growth is evident in its willingness to contract underperforming portfolios, such as the non-renewal of a professional indemnity book, to enhance overall segment profitability.
• A diversified portfolio across specialty short-tail, long-tail, and reinsurance segments, coupled with a global footprint and deep technical underwriting expertise, provides IGIC with critical flexibility to pivot capital to areas with the highest risk-adjusted returns.
• Despite a challenging competitive landscape and geopolitical uncertainties, IGIC's unlevered balance sheet, consistent shareholder returns (including a 100% dividend increase in Q2 2025), and strategic expansion in key growth regions position it for sustainable long-term value creation.

The Specialist's Edge in a Dynamic Market

International General Insurance Holdings Ltd. (IGIC), founded in Amman, Jordan in 2001, has evolved into a truly global specialty insurer and reinsurer. Operating across three distinct segments—Specialty Short-tail, Specialty Long-tail, and Reinsurance—IGIC underwrites a diverse portfolio of complex risks, including energy, property, construction, marine, and political violence. The company's overarching strategy is rooted in disciplined underwriting and proactive cycle management, a philosophy honed over 18 years as a private entity before its NASDAQ listing in March 2020. This foundational approach prioritizes bottom-line profitability and sustainable value creation over aggressive top-line growth, a critical differentiator in the increasingly competitive global insurance landscape.

The competitive environment for specialty insurance and reinsurance is marked by intense pressure from large multinational carriers like Chubb Limited (CB), American International Group (AIG), and Allianz SE (ALIZY), as well as from Managing General Agents (MGAs). While these larger players often benefit from immense scale and broader technological capabilities, IGIC distinguishes itself through its deep technical underwriting talent and specialized expertise. This human-centric differentiation allows IGIC to excel in complex, niche markets, offering tailored solutions and agile responses that larger, more generalized competitors may struggle to match. Its physical presence in key regions worldwide, including London, Bermuda, Oslo, Malta, Dubai, Amman, Kuala Lumpur, and Casablanca, further enables it to identify emerging trends and capture domestic business that might otherwise bypass the traditional London market. This expertise acts as a crucial competitive advantage, enabling sophisticated risk assessment and strategic capital allocation.

A History of Strategic Transformation and Resilience

IGI's journey to a public company in 2020 coincided with the onset of a global pandemic, forcing the company to prove its mettle under unprecedented conditions. Despite these initial hurdles and the complexities of the de-SPACing process, IGIC embarked on a remarkable transformation. Over the past five years, it has doubled the size of its underwriting portfolio, significantly expanded its asset base to over $2 billion, and grown its workforce from approximately 225 to over 450 professionals. This expansion included entering the lucrative U.S. market, adding new lines like Contingency, and establishing new European platforms in Oslo and Malta. By the end of 2024, gross premiums surpassed $700 million, a testament to its strategic execution.

The company's commitment to active cycle management is a recurring theme throughout its history. For instance, IGIC purposefully contracted its aviation book by over 25% in 2024, building on a 10-15% reduction in 2023, in response to challenging market conditions. Similarly, the long-tail segment has seen a contraction of approximately 15% since 2021, reflecting a disciplined approach to risk selection and profitability. This strategic flexibility, supported by a robust balance sheet, allows IGIC to pivot capital to areas with the strongest rate momentum and highest margins, ensuring consistent, high-quality results across market cycles.

Robust Financial Performance Amidst Headwinds

IGIC has consistently delivered strong financial results, showcasing its resilience in a dynamic market. For the second quarter of 2025, the company reported net income of $34.1 million, contributing to a first-half net income of $61.4 million. This performance translated into an impressive annualized return on average equity (ROAE) of 20.8% for Q2 and 18.6% for the first half of the year. These figures underscore the strength of IGIC's underlying operations, particularly when considering the significant impact of foreign currency movements.

The reported combined ratio for Q2 2025 was 90.5%, and 92.4% for the first half. However, these figures were negatively impacted by approximately 21 points in Q2 and 15 points in the first half due to the revaluation of non-U.S. dollar loss reserves, primarily in the long-tail segment where about 80% of the portfolio is transacted in British Pounds. On a constant FX basis, the underlying performance would have been considerably stronger, highlighting the fundamental profitability of the business. Core operating income for Q2 2025 was $22.8 million, and $42.2 million for the first half, also affected by currency devaluation and higher loss activity, including 16.9 points for current accident year CAT losses in Q1.

Looking at the full year 2024, IGIC achieved record net income of $135.2 million and record core operating income of $144.8 million, with a very healthy combined ratio of 79.9%. Book value per share grew by nearly 20% to $14.85 by year-end 2024. The company's investment portfolio, with fixed income securities making up approximately 80% of its $1.3 billion investments and cash, generated over $27.5 million in investment income in the first half of 2025, representing a more than 10% increase year-over-year, with an average annualized yield of 4.4%. IGIC strategically extended its duration slightly to 3.5 years in Q2 2025 to lock in higher rates.

IGIC's commitment to shareholder returns is evident in its capital management. In the first half of 2025, the company returned a total of $77 million to shareholders through dividends and share repurchases. This included the repurchase of over 1.34 million common shares in Q2 at an average price of $23.28. The Board of Directors also increased the quarterly ordinary common share dividend to $0.05 per share, a 100% increase, signaling confidence in future profitability. The company maintains a fully unlevered balance sheet, with total equity standing at $662.2 million at the end of Q2 2025.

Segment-Specific Strategies and Competitive Dynamics

IGIC's diversified portfolio allows for strategic shifts in focus based on market conditions across its three segments:

• Reinsurance Segment: This segment remains a bright spot, demonstrating strong growth with gross premiums up approximately 33% in the first half of 2025, primarily driven by new business in marine, energy, PV terror, and property lines. Underwriting income surged by 55-60% in Q2 and H1 2025, reflecting a successful pivot to higher-margin business. While competitive pressures are increasing, the reinsurance market has maintained relative discipline in terms, structure, and wordings. However, growth in the second half of 2025 is expected to be more muted as major renewal periods have passed.
• Specialty Short-tail Segment: This segment experienced a decline in gross premiums by 8.5% in Q2 2025 and 4.2% in H1 2025, reflecting increased competitive pressures and a lower volume of written premiums. Despite this, underwriting income rose by almost 21% in Q2 2025 due to lower losses. IGIC continues to find opportunities in engineering and construction, marine lines, and contingency, with engineering standing out as a significant growth area due. The market is becoming tougher, especially in property and downstream energy lines, with intense competition from large multinational carriers and MGAs.
• Specialty Long-tail Segment: This remains the most challenging area of IGIC's portfolio, with gross premiums down almost 12% in Q2 2025 and 5% in H1 2025. The segment recorded underwriting losses of approximately $3 million in Q2 and $10 million in H1 2025, heavily impacted by foreign currency revaluation. On a currency-neutral basis, this segment would have shown underwriting income. In a decisive move to enhance profitability, IGIC has decided to non-renew an underperforming area of its professional indemnity portfolio. This is expected to result in a $60 million decline in gross premium over the coming quarters, but a minimal net impact of $6-7 million due to reinsurance restructuring, ultimately aiming to improve the segment's overall profitability profile. The company maintains no appetite for U.S. liability business, focusing exclusively on non-U.S. long-tail lines.

In the broader competitive landscape, IGIC's smaller scale compared to industry giants like Chubb and AIG means it must leverage its agility and specialized expertise. While larger players may have advantages in operational efficiency and technological innovation, IGIC's deep understanding of niche markets and its on-the-ground presence allow it to capture opportunities that larger, more bureaucratic organizations might miss. The company's strategy of expanding its footprint in Europe, MENA, and Asia-Pac regions, coupled with its growing U.S. short-tail book, positions it to capitalize on regional growth dynamics and counter the trend of domestic markets retaining more business locally.

Outlook and Risk Considerations

IGIC's management remains cautiously optimistic, anticipating continued opportunities for profitable new business across its portfolio. However, they expect some top-line contraction in areas where profitability targets are not met, reinforcing their commitment to the bottom line. The company forecasts revenue to grow 7.5% per annum on average over the next two years, outpacing the broader U.S. insurance industry forecast of 5.5% growth.

Key growth areas include engineering and construction, marine lines, and specific property and contingency lines. Geographically, the U.S. remains a significant growth market for IGIC's specialty treaty and short-tail business, despite increasing competition and a cautious approach to CAT-exposed regions. Europe, MENA, and Asia-Pac regions are also targeted for expansion, benefiting from enhanced local capabilities.

However, IGIC operates within an environment of inherent risks. Geopolitical and macroeconomic uncertainties, coupled with heightened foreign currency volatility, can significantly impact reported results, as demonstrated by the Q2 and H1 2025 figures. Increasing competitive pressures across all segments, particularly from large carriers pushing for market share and less disciplined MGAs, pose ongoing challenges to pricing and margins. While recent loss events have not drastically altered market conditions, the potential for elevated catastrophe activity remains a constant risk in the insurance industry. IGIC mitigates these risks through its diversified portfolio, strategic reinsurance purchases, and unwavering underwriting discipline.

Conclusion

International General Insurance Holdings Ltd. (NASDAQ:IGIC) presents a compelling investment case built on a foundation of disciplined underwriting, strategic diversification, and a relentless focus on profitability. Despite operating in a highly competitive and volatile global market, IGIC's ability to consistently generate strong financial results, as evidenced by its robust net income, high ROAE, and proactive capital management in the first half of 2025, underscores its operational strength. The company's strategic pivots, such as the purposeful contraction of underperforming segments and the expansion into high-potential niche markets, demonstrate a clear commitment to long-term value creation over short-term top-line pursuits.

While challenges such as foreign currency fluctuations and intense competition persist, IGIC's unlevered balance sheet, deep technical expertise, and global footprint provide the resilience and flexibility needed to navigate these headwinds. For discerning investors, IGIC's track record of superior underwriting performance, combined with its strategic agility and commitment to shareholder returns, positions it as a compelling opportunity in the specialty insurance and reinsurance sector. The company's ability to maintain its disciplined approach and capitalize on targeted growth opportunities will be key to sustaining its trajectory of profitable specialization.