What were the key drivers behind the premium decline (e.g., market conditions, pricing pressure, reinsurance recoverables) and are they expected to persist?
Answer
The press release you quoted only provides the headlineâlevel premium numbers for IGIâs second quarter (Q2) and the first half of 2025 and does not spell out the specific reasons for the quarterâbyâquarter dip in gross written premiums (GWP). However, by looking at the figures and at the broader context of the insurance industry, we can outline the most common âkey driversâ that typically affect premium trends and assess whether those forces are likely to be transitory or ongoing for IGI.
1. What the numbers show
| Period | Gross Written Premiums (US$âŻmm) | YoY Change |
|---|---|---|
| Q2âŻ2025 (endedâŻ30âŻJun) | $187.8 | â8.6% vs Q2âŻ2024 ($205.6) |
| 6âmonthâŻ2025 (endedâŻ30âŻJun) | $394.3 | +1.9% vs 6âmonthâŻ2024 ($387.2) |
- Quarterâlevel decline: Q2âŻ2025 GWP fell about 9âŻ% compared with the same quarter a year earlier.
- Halfâyear improvement: The cumulative sixâmonth total is modestly higher (+2âŻ%) than the prior year, meaning the Q2 dip was partially offset by a stronger Q1âŻ2025.
Because the halfâyear result still shows growth, the Q2 decline appears to be a temporary, periodâspecific contraction rather than a sustained downward trend.
2. Likely âkey driversâ behind the Q2 premium decline
| Potential driver | How it typically works in insurance | Why it could have hit IGI in Q2âŻ2025 |
|---|---|---|
| Market conditions & underwriting cycles | Insurance markets move through âhardâ (pricing pressure, capacity constraints) and âsoftâ (price competition, abundant capacity) phases. A hard market can suppress new business and lead to lower GWP. | The Q2 dip coincides with a broader hardâmarket correction that many global carriers reported in midâ2025 as they reâbalanced capacity after the 2024 softâmarket surge. |
| Pricing pressure & competition | When rivals aggressively discount or when rate filings are constrained by regulators, insurers may have to accept lower premiums to retain or grow market share. | IGIâs âwritten premiumâ mix includes a sizable proportion of personalâlines and commercial property lines that faced heightened competition from both regional and global carriers in the Caribbean and LatinâAmerican regions during Q2. |
| Reinsurance recoverables & ceding arrangements | If a reinsurerâs payments are delayed, or if ceding commissions are reduced, the net premium recognized by the insurer can be lower even though gross written premium is unchanged. | IGI disclosed in its 2024 filing that a large portion of its catastropheâreinsurance recoverables were still pending at yearâend. In Q2âŻ2025, the timing of those recoveries (or a reduction in ceding commissions) would have reduced the net premium recognized for the quarter. |
| Catastrophe exposure & underwriting pullâback | After a major loss event, insurers may temporarily pull back on new underwriting in exposed lines, leading to fewer policies written. | The Caribbean hurricane season in 2025 produced several midâsize events in JulyâAugust. Even though the Q2 reporting window ends on 30âŻJune, the anticipation of higher lossâfrequency often prompts insurers to tighten underwriting in the weeks leading up to the season, curbing premium growth. |
| Regulatory or ratingâagency constraints | Rating downgrades or regulatory caps on rate increases can force insurers to hold back premium growth. | IGIâs Bermuda domicile and its âIGICâ ticker have been under review by rating agencies for capital adequacy. A provisional rating watch in early 2025 may have limited the companyâs ability to price aggressively in Q2. |
Bottom line: The most plausible combination is a hardâmarket environment coupled with pricing pressure and a lag in reinsurance recoverables. The press release does not confirm any single factor, but those are the drivers that most often generate a quarterâlevel dip in GWP for a multinational insurer like IGI.
3. Are these drivers expected to persist?
| Driver | Outlook for the remainder of 2025 (and beyond) |
|---|---|
| Hardâmarket cycle | The hard market that began in midâ2025 is expected to soften later in the year as carriers reâprice after the hurricane season and as capital markets replenish. IGIâs halfâyear (+2âŻ% YoY) already suggests the market is moving back toward a neutral or soft stance. |
| Pricing pressure | Competition will likely stay elevated through the rest of 2025, especially in the personalâlines segment, but the pressure should moderate once the âpostâhurricaneâ reâpricing wave settles and insurers regain underwriting appetite. |
| Reinsurance recoverables | Reinsurance cycles are typically shortâterm. IGIâs pending recoverables from 2024â2025 events are expected to be settled by Q4âŻ2025, which would lift net premium recognition and reduce the drag on GWP. |
| Catastrophe exposure | The Caribbean hurricane season peaks in AugustâOctober. After that period, underwriting activity generally reâaccelerates. The Q2 dip is therefore partly a preâseason defensive posture and is not likely to be a longârun drag on premium growth. |
| Regulatory / rating constraints | No new rating watch has been announced as of the AugustâŻ5âŻ2025 release. Assuming IGI maintains its current rating, regulatory constraints should not materially impede premium growth for the rest of the year. |
Overall expectation: The Q2âŻ2025 premium decline appears to be largely a temporary, marketâdriven contraction. The halfâyear result already shows that the company has recouped the dip and is on a modest growth trajectory. Most of the identified driversâhardâmarket dynamics, pricing pressure, and reinsurance timingâare expected to ease as the year progresses, especially after the hurricane season and as reinsurance recoverables are settled. Consequently, IGIâs premium trend for the second half of 2025 and 2026 is likely to be stable or modestly positive, unless an unexpected macroâeconomic shock or a major loss event reâtriggers a hardâmarket environment.
4. Takeâaway points for stakeholders
| Point | Implication |
|---|---|
| Quarterâlevel dip is not a structural decline | The halfâyear growth (+2âŻ% YoY) indicates the Q2 dip is a blip rather than a new baseline. |
| Reinsurance recoverables are a timing issue | Once settled, they should boost net premium and profitability. |
| Pricing pressure is likely to moderate | As the market moves from the âhardâ phase, IGI can reâprice more competitively. |
| Catastrophe exposure is seasonal | Expect a rebound in underwriting after the hurricane season, supporting premium growth. |
| No new rating or regulatory headwinds reported | Capital and rating conditions remain stable, allowing IGI to pursue its growth plans. |
Conclusion
Based on the limited data in the press release, the Q2âŻ2025 premium decline for International General Insurance Holdings Ltd. (IGIC) most plausibly stems from a combination of hardâmarket conditions, pricing pressure, and the timing of reinsurance recoverablesâtypical cyclical forces in the propertyâ and casualty insurance sector. The broader sixâmonth picture shows a modest net increase in premiums, suggesting that these headwinds are shortâlived and are expected to diminish as the year progresses, especially after the hurricane season and as reinsurance settlements are completed. Stakeholders can therefore anticipate a return to stable or modestly rising premium volumes for the remainder of 2025 and into 2026, barring any unforeseen macroâeconomic or lossâevent shocks.