Interim Condensed Consolidated Financial Statements
June 30, 2023 (Unaudited)
International General Insurance Holdings Ltd.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, 2023 |
December 31, 2022 | |||||||
USD '000 | USD '000 | |||||||
ASSETS | ||||||||
Investments | ||||||||
Fixed maturity securities available-for-sale, at fair value (amortized cost: USD 633,908 - June 30, 2023, USD 538,116 - December 31, 2022) | 589,958 | 489,081 | ||||||
Fixed maturity securities held to maturity | 1,994 | 1,994 | ||||||
Equity securities, at fair value (cost: USD 34,845 - June 30, 2023, USD 31,906 - December 31, 2022) | 42,899 | 31,410 | ||||||
Other investments, at fair value (cost: USD 12,597 - June 30, 2023, USD 12,996 - December 31, 2022) | 11,383 | 12,237 | ||||||
Short-term investments | 176,228 | 265,691 | ||||||
Term deposits | 35,889 | 31,335 | ||||||
Equity-method investments measured at fair value | 3,629 | 4,907 | ||||||
Total investments | 861,980 | 836,655 | ||||||
Cash and cash equivalents | 170,392 | 122,143 | ||||||
Accrued investment income | 11,393 | 6,301 | ||||||
Premiums receivable, net of allowance for credit losses (USD 13,617 - June 30, 2023, USD 12,714 - December 31, 2022) | 281,859 | 216,014 | ||||||
Reinsurance recoverables, net of allowance for credit losses (USD 350 - June 30, 2023, USD 325 - December 31, 2022) | 202,631 | 188,800 | ||||||
Ceded unearned premiums | 79,840 | 93,175 | ||||||
Deferred policy acquisition costs, net of ceding commission | 65,009 | 59,565 | ||||||
Deferred tax assets | 4,863 | 5,788 | ||||||
Other assets | 55,423 | 51,973 | ||||||
TOTAL ASSETS | 1,733,390 | 1,580,414 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
LIABILITIES | ||||||||
Reserve for unpaid loss and loss adjustment expenses | 684,978 | 636,245 | ||||||
Unearned premiums | 445,606 | 390,250 | ||||||
Insurance and reinsurance payables | 85,386 | 90,354 | ||||||
Other liabilities | 23,401 | 28,821 | ||||||
Derivative financial liabilities | 27,188 | 23,805 | ||||||
TOTAL LIABILITIES | 1,266,559 | 1,169,475 | ||||||
SHAREHOLDERS' EQUITY | ||||||||
Common shares (authorized: 750,000,000 shares at USD 0.01 par value per share; issued and outstanding: 43,620,534 shares - June 30, 2023, 46,013,309 shares - December 31, 2022) | 436 | 460 | ||||||
Additional paid-in capital | 125,783 | 147,893 | ||||||
Treasury shares (31,966 shares -June 30, 2023, 1,668 shares - December 31, 2022) | (286 | ) | (14 | ) | ||||
Accumulated other comprehensive loss, net of taxes | (39,425 | ) | (44,239 | ) | ||||
Retained earnings | 380,323 | 306,839 | ||||||
TOTAL SHAREHOLDERS' EQUITY | 466,831 | 410,939 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 1,733,390 | 1,580,414 |
See accompanying notes to the interim condensed consolidated financial statements
- 1 -
International General Insurance Holdings Ltd.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For the six months ended June 30, | ||||||||
2023 | 2022 | |||||||
USD '000 | USD '000 | |||||||
REVENUES: | ||||||||
Gross written premiums | 373,534 | 307,111 | ||||||
Ceded written premiums | (81,416 | ) | (85,058 | ) | ||||
Net written premiums | 292,118 | 222,053 | ||||||
Net change in unearned premiums | (68,691 | ) | (38,737 | ) | ||||
Net premiums earned | 223,427 | 183,316 | ||||||
Investment income | 18,433 | 8,557 | ||||||
Net realized gain on investments | 26 | 5 | ||||||
Net unrealized gain (loss) on investments | 7,940 | (7,203 | ) | |||||
Change in allowance for credit losses on investments | 311 | (659 | ) | |||||
Change in fair value of derivative financial liabilities | (3,383 | ) | 5,289 | |||||
Other revenues | 1,095 | 1,150 | ||||||
Total revenues | 247,849 | 190,455 | ||||||
EXPENSES: | ||||||||
Net loss and loss adjustment expenses | (93,757 | ) | (66,955 | ) | ||||
Net policy acquisition expenses | (39,665 | ) | (34,356 | ) | ||||
General and administrative expenses | (35,851 | ) | (33,261 | ) | ||||
Change in allowance for credit losses on financial assets | (928 | ) | (2,233 | ) | ||||
Other expenses | (1,592 | ) | (1,951 | ) | ||||
Net foreign exchange gain (loss) | 3,093 | (6,824 | ) | |||||
Total expenses | (168,700 | ) | (145,580 | ) | ||||
Income before income taxes | 79,149 | 44,875 | ||||||
Income tax expense | (4,786 | ) | (664 | ) | ||||
Net income | 74,363 | 44,211 | ||||||
Earnings per share | ||||||||
Basic earnings per share attributable to equity holders (US Dollars) | 1.60 | 0.92 | ||||||
Diluted earnings per share attributable to equity holders (US Dollars) | 1.59 | 0.92 |
See accompanying notes to the interim condensed consolidated financial statements
- 2 -
International General Insurance Holdings Ltd.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
For the six months ended June 30, | ||||||||
2023 | 2022 | |||||||
USD '000 | USD '000 | |||||||
Net income | 74,363 | 44,211 | ||||||
Other comprehensive income or loss, net of taxes: | ||||||||
Change in unrealized gains or losses in investments, net of tax | 4,797 | (41,854 | ) | |||||
Change in foreign currency translation adjustment | 17 | (47 | ) | |||||
Comprehensive income | 79,177 | 2,310 |
See accompanying notes to the interim condensed consolidated financial statements
- 3 -
International General Insurance Holdings Ltd.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the six months ended June 30, | ||||||||
2023 | 2022 | |||||||
USD '000 | USD '000 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net cash provided by operating activities | 87,816 | 60,909 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchase of equity securities and other investments | (11,924 | ) | (1,472 | ) | ||||
Purchase of available-for-sale debt securities | (133,449 | ) | (137,351 | ) | ||||
Proceeds from maturity of financial assets at amortized cost | 21 | 256 | ||||||
Proceeds from sale/maturity of available-for-sale debt securities | 36,426 | 38,132 | ||||||
Proceeds from sale of equity securities and other investments | 10,707 | 688 | ||||||
Purchases of property, premises and equipment and Intangible assets | (879 | ) | (610 | ) | ||||
Sale of property, premises and equipment | 16 | 203 | ||||||
Change in term deposits | (4,554 | ) | (61 | ) | ||||
Change in short-term investments | 89,463 | 24,904 | ||||||
Acquisition of a subsidiary | (1,101 | ) |
-
| |||||
Net cash used in investing activities | (15,274 | ) | (75,311 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Dividends paid | (864 | ) | (9,830 | ) | ||||
Repurchase of common shares under share repurchase program | (23,813 | ) | (118 | ) | ||||
Lease liabilities payments | (384 | ) | (531 | ) | ||||
Net cash flows used in financing activities | (25,061 | ) | (10,479 | ) | ||||
NET CHANGE IN CASH, AND CASH EQUIVALENTS AND RESTRICTED CASH | 47,481 | (24,881 | ) | |||||
Net foreign exchange differences | 2,969 | (3,352 | ) | |||||
Cash, cash equivalents and restricted cash at the beginning of the period | 137,943 | 242,146 | ||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT THE END OF THE PERIOD | 188,393 | 213,913 | ||||||
Supplemental Cash Flow Information: | ||||||||
Income tax paid | 1,770 | 2,145 |
See accompanying notes to the interim condensed consolidated financial statements
- 4 -
International General Insurance Holdings Ltd.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)
Common shares at par value |
Additional paid-in capital |
Treasury shares |
Accumulated other comprehensive income (loss) |
Retained earnings |
Total Shareholders' Equity | |||||||||||||||||||
USD '000 | USD '000 | USD '000 | USD '000 | USD '000 | USD '000 | |||||||||||||||||||
As at December 31, 2021 | 459 | 148,015 |
-
| 5,170 | 227,438 | 381,082 | ||||||||||||||||||
Net Income |
-
|
-
|
-
|
-
| 44,211 | 44,211 | ||||||||||||||||||
Other comprehensive income |
-
|
-
|
-
| (41,901 | ) |
-
| (41,901 | ) | ||||||||||||||||
Total comprehensive income |
-
|
-
|
-
| (41,901 | ) | 44,211 | 2,310 | |||||||||||||||||
Issuance of common shares under share-based compensation plan | 4 | 1,053 |
-
|
-
|
-
| 1,057 | ||||||||||||||||||
Purchase of treasury shares |
-
|
-
| (118 | ) |
-
|
-
| (118 | ) | ||||||||||||||||
Dividends paid (USD 0.20 per share) |
-
|
-
|
-
|
-
| (9,168 | ) | (9,168 | ) | ||||||||||||||||
As at June 30, 2022 | 463 | 149,068 | (118 | ) | (36,731 | ) | 262,481 | 375,163 | ||||||||||||||||
As at December 31, 2022 | 460 | 147,893 | (14 | ) | (44,239 | ) | 306,839 | 410,939 | ||||||||||||||||
Net Income |
-
|
-
|
-
|
-
| 74,363 | 74,363 | ||||||||||||||||||
Other comprehensive income |
-
|
-
|
-
| 4,814 |
-
| 4,814 | ||||||||||||||||||
Total comprehensive income |
-
|
-
|
-
| 4,814 | 74,363 | 79,177 | ||||||||||||||||||
Issuance of common shares under share-based compensation plan | 4 | 1,403 |
-
|
-
|
-
| 1,407 | ||||||||||||||||||
Purchase of treasury shares |
-
|
-
| (23,813 | ) |
-
|
-
| (23,813 | ) | ||||||||||||||||
Cancellation of treasury shares | (28 | ) | (23,513 | ) | 23,541 |
-
|
-
| - | ||||||||||||||||
Dividends paid (USD 0.01 per share) |
-
|
-
|
-
|
-
| (879 | ) | (879 | ) | ||||||||||||||||
As at June 30, 2023 | 436 | 125,783 | (286 | ) | (39,425 | ) | 380,323 | 466,831 |
See accompanying notes to the interim condensed consolidated financial statements
- 5 -
International General Insurance Holdings Ltd.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. DESCRIPTION OF BUSINESS
International General Insurance Holdings Ltd. ("the Company" or "the Group") is an exempted limited liability company registered and incorporated in Bermuda under the Companies Act of 1981 on October 28, 2019. The principal activities of the Company are to invest in companies engaged in the business of insurance and reinsurance. The Company's registered office is at Clarendon House, 2 Church Street, Hamilton, HM11, Bermuda.
The Company and its subsidiaries (together "the Group") operate in Bermuda, United Kingdom, Jordan, Morocco, Malaysia, Malta, Norway, United Arab Emirates and the Cayman Islands.
On March 25, 2023 the Group completed the acquisition of Energy Insurance Oslo AS, a Norwegian managing general agency that the Group has had an exclusive underwriting arrangement with since 2009. This acquired company was renamed IGI Nordic AS and will broaden the Group's presence in the Nordic markets across various business lines. The purchase consideration as well as the amounts recognized for assets acquired and liabilities assumed are not material to the Group.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
Effective January 1, 2023, the Company transitioned from International Financial Reporting Standards ("IFRS") accepted by the International Accounting Standards Board to accounting principles generally accepted in the United States ("U.S. GAAP"). The accompanying interim condensed consolidated financial statements and notes thereto, including prior periods presented, have been presented under U.S. GAAP, which includes accounting guidance in the Accounting Standards Codification ("ASC") and Accounting Standards Updates ("ASU") of the Financial Accounting Standards Board ("FASB").
In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain adjustments necessary for a fair statement, in all material respects, of our interim condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022, and our interim condensed consolidated statements of income, comprehensive income, changes in shareholders' equity, and cashflows for the six-month periods ended June 30, 2023 and 2022. The results of operations for the six-month period ended June 30, 2023, are not necessarily indicative of the results to be expected for the full year.
The interim condensed consolidated financial statements have been presented in United States Dollars "USD" which is also the Group's functional currency.
- 6 -
International General Insurance Holdings Ltd.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The interim consolidated financial statements comprise the financial statements of International General Insurance Holdings Ltd. and its subsidiaries.
The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, if any, at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.
To the extent actual results differs from the assumptions used, the Group's consolidated financial condition, results of operations and cash flows could be materially affected.
There have been no material changes in the significant accounting policies during the six months ended June 30, 2023, except for changes related to converting the Group's basis of accounting from IFRS to U.S. GAAP which resulted in a decrease in Shareholder's equity at December 31, 2022 to USD 410,939 thousand from the previously reported Total Equity under IFRS of USD 429,773 thousand primarily due to earnout shares previously classified as equity under IFRS now reported as a liability at fair value under U.S. GAAP with changes in fair value recognised in the interim condensed consolidated statement of income. See Note 5 below for further details.
- 7 -
International General Insurance Holdings Ltd.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent accounting pronouncements
Recently Issued Accounting Standards
There are no new recently issued U.S. GAAP accounting standards adopted, or to be adopted, by the Group, that have, or are expected to have, a material impact on the Group's consolidated financial statements.
3. RESTRICTED CASH
The following table reconciles cash and cash equivalents and restricted cash within the consolidated balance sheets to the total included within the consolidated statement of cash flows:
June 30, 2023 |
December 31, 2022 | |||||||
USD '000 | USD '000 | |||||||
Cash and cash equivalents | 170,392 | 122,143 | ||||||
Restricted cash (included in other assets) | 18,001 | 15,800 | ||||||
Total cash, cash equivalents and restricted cash | 188,393 | 137,943 |
- 8 -
International General Insurance Holdings Ltd.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
4. RESERVES FOR UNPAID LOSS AND LOSS ADJUSTMENT EXPENSES
The following table represents an analysis of loss and loss adjustment expenses and a reconciliation of the beginning and ending reserve for unpaid loss and loss adjustment expenses:
June 30, 2023 |
December 31, 2022 | |||||||
USD '000 | USD '000 | |||||||
Reserve for unpaid loss and loss adjustment expenses | 636,245 | 577,646 | ||||||
Unpaid loss and loss adjustment expenses recoverable | (188,800 | ) | (182,123 | ) | ||||
Net reserve for unpaid loss and loss adjustment expenses at beginning of period / year | 447,445 | 395,523 | ||||||
Loss and loss adjustment expenses incurred, net of reinsurance: | ||||||||
Current accident year | 121,275 | 198,044 | ||||||
Previous accident years | (27,518 | ) | (40,482 | ) | ||||
Total loss and loss adjustment expenses incurred, net of reinsurance | 93,757 | 157,562 | ||||||
Loss and loss adjustment expenses paid, net of reinsurance: | ||||||||
Current accident year | (5,336 | ) | (14,876 | ) | ||||
Prior accident years | (53,544 | ) | (90,728 | ) | ||||
Total loss and loss adjustment expenses paid, net of reinsurance | (58,880 | ) | (105,604 | ) | ||||
Change in allowance for credit losses on reinsurance recoverables | 25 | (36 | ) | |||||
Net reserve for unpaid loss and loss adjustment expenses at end of period / year | 482,347 | 447,445 | ||||||
Reinsurance recoverable on unpaid loss and loss adjustment expenses, net of allowance | (202,631 | ) | (188,800 | ) | ||||
Reserve for unpaid loss and loss adjustment expenses at end of period / year | 684,978 | 636,245 |
Development on Prior Loss Reserves:
During the six months ended June 30, 2023, net ultimate losses increased by USD 121,275 thousand for accident year 2023 and decreased by USD 27,518 thousand for accident year 2022 and prior accident years. The decrease in prior years was split between USD 19,556 thousand for the short-tail business, USD 4,647 thousand for the long-tail business, and USD 3,315 thousand for the reinsurance book.
Assumptions for future inflation have been updated to reflect the increase in the costs of goods and some services and an anticipated knock-on change in wage related costs. The decrease in the short-tail book was primarily due to favorable catastrophe experience in the 2022 accident year. The decrease in the long-tail book was driven by favorable claims experience on the 2021 and 2022 accident years.
- 9 -
International General Insurance Holdings Ltd.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
4. RESERVES FOR UNPAID LOSS AND LOSS ADJUSTMENT EXPENSES (Continued)
During the six months ended June 30, 2022, net ultimate losses increased by USD 90,012 thousand for accident year 2022 and decreased by USD 23,057 thousand for accident year 2021 and prior accident years. The decrease was split between USD 17,168 thousand for the long-tail business and USD 8,116 thousand for the short-tail lines offset by USD 2,227 thousand increase for the reinsurance book. Assumptions for future inflation have changed to reflect the increase in costs of goods and some services and an anticipated knock-on change in wage related costs. The decrease in the long-tail book was primarily due to the strengthening of the U.S. Dollar, our reporting currency, against other currencies specifically for the professional lines that are dominated by the Pound Sterling. The decrease in the short-tail book was driven by favorable claims experience. The increase in the reinsurance business is driven by adverse movement related to the 2021 accident year for the proportional line.
5. DERVIATIVE FINANCIAL LIABILITIES
Warrants
In 2020, the Group issued 17,250,000 warrants, including (i) 12,750,000 warrants issued to former stockholders of Tiberius (the "Public Warrants") and (ii) 4,500,000 warrants that were issued in exchange for 4,000,000 Tiberius warrants transferred to Wasef Jabsheh and 500,000 Tiberius warrants transferred to Argo Re Ltd., a Bermuda exempted company (the "Private Warrants").
No Public or Private Warrants (together, the "Warrants") have been exercised or redeemed since issued.
Warrants are accounted for as derivative financial instruments (a financial liability), recognized at fair value, and included in derivative financial liabilities in the consolidated balance sheet. The estimated fair value of the Warrants is determined using the quoted market price. The fair value of the warrants recorded in the interim condensed consolidated balance sheet at June 30, 2023 was USD 10,548 thousand with changes in fair value of USD 543 thousand since December 31, 2022 recorded in Change in fair value of derivative financial liabilities in the interim condensed consolidated statement of income.
The Private Warrants are registered for resale on the Group's registration statement on Form F-3 and are freely tradable into the public market if holders want to sell them.
The Public Warrants and Private Warrants broadly have similar terms. There are restrictions on the transfer of the Private Warrants. However, if they are transferred to an unrelated party, once a transfer is permitted, the terms change such that they are identical to those of a Public Warrant. Accordingly, the Private Warrants are valued using the price as deemed equivalent to the fair value of the Public Warrants listed on Nasdaq.
The Warrants lapse and expire after five years from the closing of the Business Combination between IGI and Tiberius.
- 10 -
International General Insurance Holdings Ltd.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
5. DERVIATIVE FINANCIAL LIABILITY (Continued)
The following table is a summary of the number of shares of IGI's common stock issuable upon exercise of warrants outstanding at June 30, 2023:
Number of shares | Exercise price (USD) | Redemption price (USD) | Expiration date | Classification | Loss in value (USD '000) | Fair value at (USD '000) | ||||||||||||||||||
Public warrants | 12,750,000 | 11.5 | 18.0 | March 17, 2025 | Liability | (401 | ) | 7,796 | ||||||||||||||||
Private warrants | 4,500,000 | 11.5 | 18.0 | March 17, 2025 | Liability | (142 | ) | 2,752 |
Subsequent to June 30, 2023, the Company commenced an offer to purchase its outstanding public and private warrants (See Note 9).
Earn-out shares classified as liability
Earn-out shares issued at June 30, 2023 and December 31, 2022 were 2,973,300 shares, respectively. Such earn-out shares issued to Tiberius and Wasef Jabsheh are accounted for as Derivative financial instruments (a financial liability) because the earn-out triggering events that determine the number of Earn-out shares to be earned include multiple settlements alternatives and events that are not solely indexed to the common stock of the Company.
The Earn-out shares are recognized at fair value determined using a Monte Carlo simulation model that has various significant unobservable inputs. Gains or losses arising from changes in the fair value of such derivatives are recognised in the consolidated statement of income as the Group has not designated derivative financial instruments under hedging arrangements.
This approach considers the share price as at the valuation date, the threshold price for vesting, expected volatility (estimated using historical share price movements of comparable companies), expected dividend yield, the risk-free rate, and the earn out period up to March 17, 2028.
The following table summarizes the assumptions used in estimating the fair value of the Sponsor Earn-out Shares at each of the relevant periods:
June 30, 2023 |
December 31, 2022 | |||||||
Stock price (USD) | 8.94 | 8.00 | ||||||
Expected volatility (%) | 25.0 | % | 27.5 | % | ||||
Risk free rate (%) | 4.14 | % | 3.98 | % | ||||
Expected term (in years) | 4.71 | 5.21 | ||||||
Expected dividends (%) | 0.45 | % | 0.50 | % |
The Earn-out shares previously reported in equity under IFRS has been reported as a liability at fair value upon adoption of U.S. GAAP effective January 1, 2023. The table below illustrates the movement on the Earn-out shares during the period under U.S. GAAP:
June 30, 2023 | ||||
USD '000 | ||||
Fair value of Earn-out shares at December 31, 2022 | 13,800 | |||
Change in fair value | 2,840 | |||
Fair value of Earn-out shares at June 30, 2023 | 16,640 |
- 11 -
International General Insurance Holdings Ltd.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
6. FAIR VALUE
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniques:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and
Level 3: Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
June 30, 2023 | ||||||||||||||||
Level 1 | Level 2 | Level 3 |
Total Estimated Fair Value | |||||||||||||
USD '000 | USD '000 | USD '000 | USD '000 | |||||||||||||
Assets measured at fair value: | ||||||||||||||||
Fixed maturity available for sale securities: | ||||||||||||||||
Foreign governments | 2,897 | 4,752 |
-
| 7,649 | ||||||||||||
Corporate bonds | 216,913 | 365,396 | 1,994 | 584,303 | ||||||||||||
Total | 219,810 | 370,148 | 1,994 | 591,952 | ||||||||||||
Equity securities* | 42,525 |
-
| 374 | 42,899 | ||||||||||||
Other Investments |
-
| 11,383 |
-
| 11,383 | ||||||||||||
Fair value option: | ||||||||||||||||
Equity-method investments measured at fair value |
-
|
-
| 3,629 | 3,629 | ||||||||||||
262,335 | 381,531 | 5,997 | 649,863 | |||||||||||||
Liabilities measured at fair value: | ||||||||||||||||
Derivative financial liabilities |
-
| 10,548 | 16,640 | 27,188 |
- 12 -
International General Insurance Holdings Ltd.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
6. FAIR VALUE (Continued)
During 2023, corporate bonds available for sale amounting to USD 27,013 thousand were transferred from level 1 to level 2 as at June 30, 2023. In addition, corporate bonds available for sale amounting to USD 65,208 thousand were transferred from level 2 to level 1 as at June 30, 2023. These transfers between levels 1 and 2 occur depending on the input that is significant to the fair value measurement of the financial assets.
There was a transfer amounting to USD 12,640 thousand out of Level 3 during the period ended June 30, 2023.
December 31, 2022 | ||||||||||||||||
Level 1 | Level 2 | Level 3 |
Total Estimated Fair Value | |||||||||||||
USD '000 | USD '000 | USD '000 | USD '000 | |||||||||||||
Assets measured at fair value: | ||||||||||||||||
Fixed maturity available for sale securities: | ||||||||||||||||
Foreign governments | 1,235 | 6,213 |
-
| 7,448 | ||||||||||||
Corporate bonds | 99,731 | 381,902 | 1,994 | 483,627 | ||||||||||||
Total | 100,966 | 388,115 | 1,994 | 491,075 | ||||||||||||
Equity securities* | 24,046 |
-
| 7,364 | 31,410 | ||||||||||||
Other Investments |
-
| 12,237 |
-
| 12,237 | ||||||||||||
Fair value option: | ||||||||||||||||
Equity-method investments measured at fair value |
-
|
-
| 4,907 | 4,907 | ||||||||||||
125,012 | 400,352 | 14,265 | 539,629 | |||||||||||||
Liabilities measured at fair value: | ||||||||||||||||
Derivative financial liabilities | - | 10,005 | 13,800 | 23,805 |
* | Reconciliation of fair value of the unquoted equities under level 3 fair value hierarchy is as follows: |
June 30, 2023 |
December 31, 2022 | |||||||
USD '000 | USD '000 | |||||||
Balance at the beginning of period / year | 7,364 | 7,046 | ||||||
Total gains unrealize recognized in earnings | 5,650 | 318 | ||||||
Transfer out of Level 3 | (12,640 | ) |
-
| |||||
Balance at the end of the period | 374 | 7,364 |
There are no active markets for the unquoted equities.
- 13 -
International General Insurance Holdings Ltd.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
6. FAIR VALUE (Continued)
Financial Instruments Disclosed, But Not Carried, At Fair Value:
The Company uses various financial instruments in the normal course of its business. The carrying values of cash, term deposits, short-term investments, accrued investment income, certain other assets and certain other liabilities approximated their fair values at June 30, 2023, due to their respective short maturities. As these financial instruments are not actively traded, their respective fair values are classified within Level 2.
7. TREASURY SHARES
On 23 May 2022, the Board of Directors approved a repurchase authorization of up to 5 million of its issued and outstanding common shares. This authorization, which does not have an expiration date, replaced the Group's prior authorization of an aggregate consideration of up to USD 5,000 thousand, which was terminated. The table below illustrates the movement on the treasury shares during the year:
June 30, 2023 | ||||||||
Number of shares | USD '000 | |||||||
Balance at December 31, 2022 | 1,668 | 14 | ||||||
Repurchases | 2,771,775 | 23,813 | ||||||
Cancellation | (2,741,477 | ) | (23,541 | ) | ||||
Balance at June 30, 2023 | 31,966 | 286 |
8. earnings per share
Basic earnings per share represents the net income attributable to the ordinary shareholders divided by the weighted average number of common shares outstanding during the periods.
Diluted earnings per share represents the net income attributable to the ordinary shareholders divided by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
IGI has 3,012,500 unvested earn-out shares outstanding as at and for the period ended June 30, 2023. These earn-out shares contain a non-forfeitable right to dividends and hence are considered as participating securities. The two-class method was applied to compute basic earnings per share attributable to common shareholders.
Unvested restricted shares awards have been included in the diluted weighted-average common shares outstanding using the treasury stock method.
The outstanding warrants have not been factored in diluted earnings per share computation, as the average market price of ordinary shares at the end of the period does not exceed the exercise price of the warrants.
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International General Insurance Holdings Ltd.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
8. earnings per share (Continued)
The following table reflects the income and share data used in the basic and diluted earnings per share calculations:
For the six months ended June 30, | ||||||||
2023 | 2022 | |||||||
Net Income (USD '000) | 74,363 | 44,211 | ||||||
Less: net income attributable to the Earnout Shares (USD '000) | (4,758 | ) | (2,167 | ) | ||||
Less: dividends attributable to the Restricted Shares Awards (USD '000) | (15 | ) | (135 | ) | ||||
Net income available to common shareholders (USD '000) | 69,590 | 41,909 | ||||||
Weighted average number of shares - basic | 43,513,654 | 45,616,180 | ||||||
Restricted shares awards | 242,177 | 47,931 | ||||||
Weighted average number of shares - diluted | 43,755,831 | 45,664,111 | ||||||
Basic earnings per share (USD) | 1.60 | 0.92 | ||||||
Diluted earnings per share (USD) | 1.59 | 0.92 |
9. subsequent events
The Company announced on July 28, 2023 that it has commenced an offer to purchase all of its outstanding public and private warrants at a purchase price of USD 0.95 in cash, without interest.
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International General Insurance Holdings Ltd. published this content on 07 September 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 September 2023 13:02:07 UTC.