International General Insurance Holdings reported a 63 per cent fall in second-quarter earnings after seeing losses linked to the war in the Middle East.

The Bermuda-based speciality insurer posted second-quarter net income of $20.9 million, down from $34.1 million a year earlier, while diluted earnings per share fell to 49 cents from 77 cents. Gross written premiums increased 7.4 per cent to $201.7 million from $187.8 million.

Waleed Jabsheh, IGI president and chief executive officer, stressed the war’s historic impact on the Nasdaq-listed company.

“These results were delivered against a backdrop of significant loss activity, mostly stemming from war in the Middle East, which in aggregate represents one of the largest single-event losses in IGI's almost 25-year history,” Mr Jabsheh said.

“Our results clearly show the resilience and strength that we have built in IGI. To be able to absorb this level of loss … while posting net income of $42.5 million, a combined ratio of 92.2 per cent, and returning $72.9 million to shareholders, demonstrates that our strategy is not only working very well, but also as it was designed to work.”

Second-quarter underwriting income declined to $29.5 million from $35 million a year earlier as catastrophe losses increased significantly.

The combined ratio, a key measure of underwriting profitability, deteriorated to 95.1 per cent from 90.5 per cent, although it remained below 100 per cent, indicating an underwriting profit.

The company's loss ratio rose to 57.9 per cent from 53.2 per cent, with catastrophe losses accounting for 18.8 percentage points compared with 9 percentage points a year earlier. IGI said losses related to the war in the Middle East were the primary driver of the elevated claims activity.

Despite the higher losses, premium growth continued across much of the business.

The speciality short-tail segment, IGI's largest division, increased gross written premiums to $134.3 million from $125.6 million, although underwriting income fell to $16 million from $25.6 million because of higher claims arising from the Middle East conflict.

The reinsurance segment grew quarterly gross written premiums to $24.7 million from $16.3 million, reflecting new business written in India after the company received approval to operate in GIFT City. Underwriting income in the segment declined to $8 million from $12.3 million because of higher loss costs.

The speciality long-tail division returned to profit, generating underwriting income of $5.5 million compared with an underwriting loss of $2.9 million in the same quarter last year.

Net investment income edged up to $17.5 million from $17.1 million, while annualised investment yield improved slightly to 4.6 per cent from 4.5 per cent.

The board declared a quarterly dividend of 7.5 cents per common share, payable on September 2 to shareholders of record on August 18.

• See the full earnings release under Related Media

• This story was generated by machine and edited by The Royal Gazette newsroom

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IGI Q2 earnings press release