Good morning. Thank you for being here today and thank you, Wasef. As mentioned, we've had an excellent start to the year with impressive results. We began the year under relatively healthy but slightly more challenging conditions, and we're responding swiftly to the changes in our markets. This year, there has been an active loss environment due to natural events, which has continued into the second quarter with the earthquake in Taiwan and flooding in Oman and the United Arab Emirates, as well as some storms in the US. We also experienced a significant market loss potentially amounting to billions of dollars, which could be the largest marine loss in history when the container ship, NBW, collided with Baltimore's Francis Scott Key Bridge, leading to its collapse. As previously stated, we are observing increasing polarization and heightened tensions globally, and we anticipate this trend to persist in the near future. We are focused on specific initiatives to continue growing and strengthening our company, including our new Lloyd's presence announced this morning, expanding and diversifying our reinsurance portfolio, adding talent to our teams, and broadening the geographic reach of our products. I will provide more details on these later. Now, I will briefly recap the first-quarter results and discuss our outlook for the market and our company for the remainder of 2024. Our markets are still relatively robust, though we have noted in previous reports that we are facing more competitive pressures, mixed rating environments, and variable market conditions. Overall, we are not observing, and thus not benefiting from, the larger rate increases we experienced in previous years. However, we remain in positive territory across many of our business lines. Given the strong conditions at the start of last year, there's a great deal of competition among current players looking to grow and expand their risk appetite. Fortunately, this competition is not stemming from new capital entering the market, but rather from existing players becoming more aggressive. For IGI, gross written premium growth in the first quarter was 4.5%, building on significant growth from the same quarter last year. Similar to previous quarters, growth is coming from both the short-tail and reinsurance segments, but primarily from the reinsurance portfolio, which saw a 21% increase compared to the first quarter of 2022. The short-tail segment also presents good growth opportunities, especially in engineering, contingency property, and marine cargo, with gross premiums in this segment rising 2.8%, affected by some timing issues which I can discuss during the Q&A. In the long-tail segment, we observed some contraction in gross premiums in the first quarter as rates and conditions have reached levels that led us to decide not to renew some businesses. Given that our long-tail portfolio, like many competitors, remains small, and due to our lack of US business, the pace of decline and adequacy for us is somewhat more measured than broader market trends. The decrease in gross premiums was partially influenced by our decision to put our inherent defects portfolio into runoff as returns were not meeting our expectations. You may recall the significant growth we achieved in segments over the years since around 2018, capitalizing on strong conditions and a healthy refund rate. As those long-tail lines are now transitioning, albeit from elevated levels, we have adopted a cautious approach on a quarter-to-quarter basis. It’s essential to note that one quarter does not define a trend. We anticipate full-year 2024 growth to be in the high single digits to low double digits. There are still opportunities for growth, though perhaps not as plentiful as in previous years. I will elaborate on our goals and initiatives later. Regarding the first-quarter losses I mentioned earlier, our share of these losses was relatively minor and manageable. For the Baltimore bridge incident, we've taken a conservative view and have fully reserved for this event in Q1, which we expect to exceed initial estimates. Our combined ratio of 74.1% is well below our long-term average, showing excellent performance, including eight points of favorable development compared to the first quarter of last year. Net investment income saw significant improvement in Q1 compared to the same period last year, resulting in a 0.7 point increase in the annualized investment yield to 4.2% for the first quarter. Specifically, our fixed income portfolio will maintain an average rating of A with an average duration of 3.1 years. Net income for the first quarter was just under $38 million, up from nearly $34 million in the prior year’s first quarter. This growth was driven by increased underwriting income from a larger portfolio and a $3 million rise in net investment income, offset by $5.6 million in higher net foreign exchange losses and elevated general administrative expenses due to new talent acquisition. Core operating income, which we feel better reflects fundamental performance, was $40 million in the first quarter this year, representing an over 35% increase from $29 million in the same quarter last year. The G&A expense ratio was 2.3 points higher in the first quarter than the previous year, and we expect it to run a little elevated in the near term as IGI continues to expand, now nearing 425 employees. We are also transitioning from previously outsourced roles to dedicated in-house teams for greater control and efficiency. On the balance sheet, total assets increased about 2% to $1.88 billion, while total equity rose over 3% to $567 million at the end of Q1. During the first quarter, 600,000 burn-off shares with a vesting threshold of $12.75 vested. To date, $2 million in earn-out shares have vested, with just over one million shares remaining, which have vesting thresholds of $14 and $15.25. In capital management, we continued our common share repurchases under our existing five million shares repurchase authorization, with approximately one million shares remaining. As always, our priority is underwriting first, and any capital in excess of our underwriting opportunities will be returned to shareholders. We also declared special dividends of $0.50 per share alongside a regular quarterly dividend of $0.01, resulting in just under $24 million paid out during Q1. Ultimately, we achieved a core operating return on equity of just below 30% for the first quarter, compared to 27.9% in the same period last year. Our book value per share increased by 1.5% to $12.58 as of March 31. Overall, it was a solid quarter and start to the year, with some moving pieces, but we remain optimistic about 2024. Turning to market opportunities, we see a continuation of the trends from 2023, with favorable conditions across much of our portfolio and solid momentum. We expect growth rates to align with high single digits to low double-digit percentages. We recognize we are in a critical transitional phase where cycle management is important, focusing on areas with optimal conditions and higher returns, while withdrawing from areas that no longer meet our thresholds. This market situation presents a chance for us to demonstrate our underwriting strengths. In the short-tail segment, we are particularly encouraged by opportunities in engineering, property, contingency, and marine cargo, while other lines like aviation and upstream energy remain more challenging. Engineering and construction sectors continue to shine for us in many markets, including the Middle East and Asia. We are expanding teams and expertise across various offices, especially in the North American market as we grow our presence there while staying mindful of our risk appetite and catastrophe exposures. In our treaty reinsurance business, net price improvements exceeded 70% in the first quarter, following over 25% increases last year, making this area of our portfolio very attractive. We are also exploring ways to diversify and expand our specialty insurance offerings, which have historically represented a smaller portion of our portfolio, expecting this business to grow as conditions remain favorable. In the long-tail sector, rates in the US market are trending downward, but generally in an orderly manner. While net rates are broadly sufficient, there is considerable variation across lines, and where rates fall short, we are choosing to walk away from such business. I want to emphasize that I do not foresee much growth in this segment for 2024. Geographically, US rates are currently leading other markets. In the first quarter, we recorded over $34 million in gross premiums in the US, reflecting a 35% increase from the same period last year. We anticipate benefits from entering the US construction market, cautiously focusing on small- to medium-sized projects with manageable positive variances and controlled catastrophe exposures. In Europe, we wrote over $22 million in Q1, up from about $19 million in the same quarter last year, with expectations for further growth opportunities, particularly through our new Oslo platform, which has strengthened our underwriting team and market presence in Nordic regions for professional financial lines, along with areas like engineering. I'm excited about our announcement this morning regarding our presence at Lloyd’s of London, beginning trading tomorrow. We will offer various lines of business, including Property, Energy, Contingency, Political Violence, Ports and Terminals, Marine Cargo, along with several long-tail lines such as Marine Liability and Financial Institutions. Our underwriting teams will operate from Lloyd's on a rotational basis while our London office is conveniently located near the Lloyd's building. This initiative provides us with a significant opportunity to enhance our profile and access additional distribution channels through Lloyd's. All of our recent efforts and improvements have solidified our foundation, focusing on selective and disciplined underwriting, managing the cycle dynamically, and maintaining cautious reserving to protect our profitability and capital. We have achieved exceptional results that we believe will benefit us in the future, allowing us to fulfill our commitments to all stakeholders. I will pause now and open the floor to questions.
Yes, absolutely. I will begin with the short tail business. We have had mixed results in 2023, which reflect variations by line of business and territory. The US remains the strongest area for our short-tail business, but we are concentrating on our guarantees and selected wireless sectors, especially in onshore energy, while the others are relatively modest. In China, we observed net rate movements in Q1 of just under 3%, which we consider marginal and fairly flat. However, sectors like aviation are experiencing volume pressure, leading to a shrinking portfolio in that area. On the reinsurance side, this is the most exciting aspect of our operations. We nearly doubled our book last year, and in the first quarter, our portfolio increased by another 21%. Although we are not seeing the same level of rate increases and movements this year as in the previous year, the market does appear to remain disciplined to some extent. However, following last year's reinsurers' payments, there is noticeably more demand this year compared to last. People are eager for a larger share of the market. This is something we need to navigate, but the opportunities are plentiful. Traditionally, our business has focused on non-marine property, but we have now branched out into areas like political violence, aviation, and cyber. We aim to integrate Phoenix and their team to further diversify and expand our specialty portfolio, which has historically comprised a significant portion of our overall book. This segment is indeed the most exhilarating aspect of our operations.
