International General Insurance Holdings Ltd

NASDAQ:IGIC

Earnings Call Transcript 2020-Q2

[Operator]

Good day, and welcome to the International General Insurance Holdings Ltd. Second Quarter and Half Year 2020 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Robin Sidders, Head of Investor Relations. Please go ahead.

[Robin Sidders, executive]

Thank you, and good morning and good afternoon, and welcome to today's conference call. This is the first time that we've had the opportunity to host a call to discuss results, and we -- you can expect that we'll continue to do this on a half and full year basis from here on.

Today, we'll be discussing our second quarter and half year 2020 financial results. You will have seen our press release which we issued after the market closed yesterday. If you'd like a copy of the press release, it's available in the Investors section of our website at www.iginsure.com.

On today's call are Wasef Jabsheh, Chairman and CEO; Waleed Jabsheh, President; and Pervez Rizvi, Chief Financial Officer. Wasef will begin the call with some high-level comments before handing over to Waleed to talk through the results for the second quarter and first 6 months of 2020 before giving some insight into current market conditions and opportunities that we're seeing. Then Wasef will come back to provide some closing thoughts. At that point, we'll open the call up to Q&A.

As we're doing this call from different locations, Waleed will take all the questions in the first instance and then instruct the relevant person on our team to respond. I'll begin with the customary safe harbor language.

Our speakers' remarks may contain forward-looking statements. Some of the forward-looking statements can be identified by the use of forward-looking words. We caution you that such forward-looking statements should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will, in fact, be achieved.

Forward-looking statements involve risks, uncertainties and assumptions. Actual events or results may differ from those projected in the forward-looking statements due to a variety of factors including the risk factors set forth in the company's annual report on Form 20-F for the year ended December 31, 2019, the company's reports on Form 6-K and other filings with the SEC as well as our earnings press release issued yesterday evening.

We undertake no obligation to update or revise publicly any forward-looking statements, which speak only as of the date on which they are made. In addition, we use non-IFRS financial measures in this conference call. For a reconciliation of non-IFRS financial measures to the nearest IFRS measure, please see our earnings release, which has been filed with the SEC and is available on our website.

With that, I'll turn the call over to our Chairman and CEO, Wasef Jabsheh.

[Wasef Jabsheh, executive]

Thank you, Robin, and good day to everyone. Thank you for joining us on today's call. Since we last communicated with you after our first quarter results, the world, at least in the jurisdictions where we operate, is slowly and carefully returning to some form of normal, a different normal. When we began the process of becoming a public company and first visited with many of you in person last year at the beginning of 2020, I would never have imagined we would be in the situation we find ourselves in today.

We have not been able to travel and see you in person. And for me that is a disappointment. It was always our intention to come and meet with you face-to-face. That's how strong relationships are built. So I assure you that when we are able to travel again and when the way in which we do business returns to something more normal, we will visit you in person.

On the subject of COVID and the pandemic, I'm very proud of our people at IGI. They have done a very good job of staying calm and focused and continuing to run our business seamlessly, while providing the same high-quality client service that we are known for. In our communities around us, while governments and first responders and medical workers have been doing their part, we at IGI are continuing to do our part, keeping close contact with clients and partners, paying for services and paying claims expeditiously while taking care of our people.

You see the results that we published last night. I'm very pleased with this result. They are a very good indication of what we can do at IGI even in these very uncertain times. Waleed will talk to you about the results in more detail, so I'll just highlight 2 things.

First, we have grown our total book of business by almost 27% since the beginning of the year. We are seeing many opportunities in all of the lines of business we are writing. And we are writing a new class of business, such as U.S. excess and surplus property and energy business as well as some new marine lines. These are market conditions that have been a long time coming, and IGI is in the right place at the right time with the right people.

Second, you would have seen that we announced a dividend last night. This is the third dividend that we have announced as a public company and represents a 40% payout ratio. We are grateful for the support of all our shareholders, many of whom have supported IGI for many years, and in particular, our new shareholders. IGI has a long track record of generating shareholder value, and this is something we intend to continue to do.

Lastly, before I hand the call to Waleed, I would like to express our deepest sympathies to the people of Lebanon following the devastation, destruction and loss of life caused by the explosion in the Port of Beirut. We have long-standing relationships in Beirut and throughout Lebanon as we do across the Middle East and MENA region, and our thoughts remain with Lebanon and the Lebanese people in what a horrific time and a fully humanitarian crisis for the country.

With that, I'm going to now ask Waleed to talk to you about the results and our market outlook. Again, thank you. Thank you.

[Waleed Jabsheh, executive]

Thank you, Wasef. Before I start on the results, I will expand upon 2 points made by Wasef. First, on the subject of COVID-19, as you saw from our press release, our views of IGI's potential exposure to the COVID-19 pandemic remains unchanged at this time, and we continue to hold $2 million reserve.

As we've said previously, we do not participate in most of the lines of business or markets that have been most affected by the pandemic so far. But given the impact is fluid and ongoing, and we continue to see cities and whole countries reimpose lockdown measures, we're continuing to take a cautious view. At this time, we're comfortable with our view, but we will continue to monitor the impacts, evaluate our position and respond appropriately.

Secondly, Wasef mentioned Beirut. You will have seen the news of the explosion last week. As you know, we do write business in many MENA markets. We do have some exposure in Beirut, although no direct exposure within a 2-kilometer radius of the explosion site. We do expect some level of loss through incidental exposures in our treaty business written outside of Lebanon. At this time, it is too early to quantify the loss, but we will communicate as and when we have a clearer view as we would on any large loss.

I'll start with a high-level recap of the numbers as you have the press release, and the story is fairly straightforward. As Wasef said, so far in 2020, we've grown our total portfolio by $50.2 million to $236.5 million of gross written premium, which represents an increase of 26.9% for the first 6 months of 2020 compared to the first half of 2019. For the second quarter of 2020, gross written premium increased 29.2% when compared with the second quarter of 2019.

In the second quarter of 2020, gross premium growth was driven primarily by our long tail lines, with growth in each line of business, but particularly the professional lines, while growth in the short tail segment was driven by new and renewal business in most lines, but particularly in energy and property, a direct result of our entry into the U.S. excess and surplus lines market starting April 1 of this year. To date, we have written around $5 million on an E&S basis. But in total, in the U.S., we've written a little more than $12 million.

In the first half of 2020, the most significant growth was in the long tail segment, which recorded gross written premium growth of 38.5% for the period. Growth was primarily driven by professional lines, where rates were up on average around 30%, and specifically in professional indemnity and D&O, where rates are up on average by more than 35%.

As you've read in the news, capacity has been shrinking as many players have either exited the business altogether, significantly reduced their lines or stopped writing new business. A large proportion of our business in these lines is written on an excess-of-loss basis. In the professional indemnity book, which is predominantly U.K.-based, about 1/3 is XOL; while our D&O book, which is much more geographically diverse, is more than 3/4 XOL. It is worth reiterating that we do not write this business in the U.S. It's primarily made of business within the U.K. and, to a lesser extent, Europe and the Middle East region.

In the short tail segment, growth in the first 6 months of 2020 was primarily in the energy, engineering and construction and property lines. Here, we saw rate increases on average of more than 18%. Although it is worth noting the rate increases were seen in every line of business.

In the treaty reinsurance book, we wrote gross premiums of $4.5 million and $11.4 million in the second quarter and first 6 months of 2020, respectively. This represents growth of 15.4% and 4.6% over the second quarter and first half of 2019. The treaty reinsurance business accounts for approximately 4.8% of total gross written premium.

Net underwriting income was $22.9 million for the second quarter and $46.1 million for the first half of 2020. This compares with prior year underwriting income of $14.3 million for the second quarter and $26.1 million for the first 6 months of 2019. The reported combined ratio was 84% for the second quarter of 2020 and 82.6% for the first half of 2020. This represents improvement of 6.4 points for the second quarter and 10.1 points for the half year.

As you saw from our press release, the claims and claims expense ratios were down for the second quarter and first half of 2020. Policy acquisition costs were also down, resulting in lower acquisition ratios by 2.9 points for the second quarter and 2.3 points for the first half of 2020 when compared with the corresponding periods in 2019.

General and administrative expenses were slightly higher during the quarter and first half of 2020, driven primarily by professional fees and expenses and salary costs related to new hires, offset slightly by reduced travel expenses. The G&A expense ratio was up 0.9 points in the second quarter but down 1.5 points for the first half of 2020, reflecting a higher net earned premium base.

In our investment portfolio, we saw some recovery on foreign currency and mark-to-market adjustments for the first quarter of 2020. Total investment income net decreased in both the second quarter and the first half of 2020 versus 2019, primarily the result of lower interest and coupon rates on both term deposits as well as fixed income bonds.

Total investment income net was $2.2 million in the second quarter compared to $3.6 million in Q2 2019. However, including realized and unrealized mark-to-market movement, total investment income was $4.7 million during the second quarter of 2020. For the first 6 months of 2020, investment income net was $4.8 million as compared to $6 million in June 2019. Including realized and unrealized mark-to-market movement, total investment income was $2.7 million compared to total investment income of $7.4 million in the first 6 months of 2019.

You'll recall in the first quarter of 2020, we reported foreign exchange losses of $11.9 million. During the first half of 2020, total foreign exchange losses were $8.7 million, reflecting a gain of $3.2 million during the second quarter of 2020, primarily the result of proactive action to reduce our exposure to the pound sterling and the Australian dollar. Income from the core interest-bearing portfolio was down by 5% in the second quarter but remains unchanged for the first half of 2020 when compared with the corresponding periods in 2019.

The yield for the fixed maturity bond portfolio was 2.5% for the second quarter of 2020 and 2.6% for the first half of 2020 compared with 3.21% and 3.1% for the second quarter and first half of 2019. The yield for the bank term deposits was 2.5% and 2.9% for the second quarter and first half of 2020 compared with 3.6% and 3.4% for the second quarter and first half of 2019.

Combined interest income on both the fixed maturity bonds and term deposits were $2.7 million and $5.4 million for the second quarter and first 6 months of 2020, respectively, compared with $2.9 million and $5.4 million in the second quarter and half year of 2019.

Our investment portfolio remains well positioned to deal with the level of market downturn that we saw during the second quarter and first half of 2020 due to the high-quality and diversified nature of bonds and term deposits. The average duration of the fixed maturity securities is 3 years. In our total fixed income portfolio, 74% is A rated and above. In our total term deposit portfolio, 71% is held with A-rated and above banks.

Core operating income was $10.3 million and $8.5 million for the quarters ended June 30, 2020, and June 30, 2019, respectively. For the 6 months to June 30, core operating income was $23.7 million and $13.1 million for the 6 months ended June 30, 2020, and June 30, 2019, respectively. Core operating return on average equity annualized was 11.6% for the quarter ended June 30, 2020, and 14% for the 6 months ended June 30, 2020.

Shareholders' equity was approximately $366.3 million. Book value per share was $8.06 at June 30, 2020, representing a 6.5% increase from March 31, 2020. The company is returning capital to shareholders through an ordinary common share dividend of approximately $4.4 million or $0.09 per share.

Now I'll spend some time discussing market conditions, our position in the market and our outlook in terms of opportunities.

To reiterate as Wasef said at the beginning of the call, this is the market we've been waiting for, for some time. We're certainly in the right place at the right time that we're seeing rate improvement in most lines of business and markets we write. While June and July are important renewal dates for us, we don't really have one specific major renewal for our overall book of business, and much of it renews throughout the year. Although the majority of our portfolio renews on or before July 1.

For IGI specifically, as you know, we received our license from the NAIC to write excess surplus lines business in the U.S. as of the 1st of April. Our entry into this market has been well received, and we've had a significant number of inquiries. To date, we have written just over $12 million of premium in the U.S., primarily in energy and property lines, which are our 2 biggest lines in terms of premium dollars in our short tail business. We will only concentrate on short tail business in the U.S., and while this is a new territory for us, these are lines we -- of business we know well. Both of these lines have seen significant rate firming, and we expect that to continue for the near term. Consistent with our approach to all business, we are remaining cautious in our risk selection.

During the second quarter, we also introduced a new line of business to our marine portfolio. Marine trades is a small but growing book. It covers a smaller recreational marine market across the U.K. and complements the company's existing ports and terminals insurance book. Earlier in August, we hired a senior cargo underwriter to begin writing a niche portfolio of general cargo business, again, strengthening our marine insurance offering. This market has undergone a period of correction and hardening, following withdrawal of capacity and poor market results. We are focusing on specific elements of the general cargo market, specifically, medium-sized accounts and largely transit only.

In other short tail business, rates are anywhere from flattish to slightly up in upstream energy and political violence, following several quarters of declining rates to significant double-digit rate movement in downstream energy, including power and utilities, ports and terminals and aviation. And in our property book, which is the second largest short tail line of business for us, rates are up on average just over 10% in 2020.

In the long tail lines, rate momentum has been significant and is continuing to increase, particularly in D&O and professional indemnity. The impact of COVID-19 on these lines remain somewhat uncertain, although it is likely to become clearer as recessionary pressures increase. We are well positioned in these markets as some of the bigger players have stopped writing new business in the U.K... I'll note again that we don't and we have no intention of writing any of this business in the U.S., and the majority of our long tail business is written on a claims-made basis.

Our reinsurance portfolio, which is well-spread geographically, is seeing moderate rate improvement overall, except in loss-affected accounts where rates are up over 20%. There's a wide variation in rate improvement by geography with Caribbean cat-exposed business up significantly and the Middle East, where rates are up on average around 14%. We have previously talked about how we are benefiting from dislocation in the MENA markets, where a number of players have shut down their offices in the region. Given the recent events in Lebanon, we expect there to be further dislocation in the region.

Finally, current market conditions have provided us an excellent opportunity to refine our existing portfolio and improve terms and conditions. Our underwriting teams have done an excellent job of staying focused over the past several months, and I expect we will continue to find new opportunities to add to our existing risk portfolio.

So I'm going to pause there, and we will turn it over for questions. Operator, we're ready to take the first question.

[Operator]

[Operator Instructions] Our first question will come from Scott Heleniak of RBC.

[Scott Heleniak, analyst]

Yes, good morning. Wondering if you could talk about the appetite for growing the long tail business. You had pretty significant growth there. And I know you mentioned D&O and P&I and some really good rate increases on the long tail side. And obviously, you're getting them on the short tail side as well. But just wondering if you could talk through how you're thinking about the mix in terms of where you find the most attractive opportunities long tail versus short tail.

[Waleed Jabsheh, executive]

Thanks, Scott, for the question. Our appetite, obviously from what we've said already, we're seeing the highest increases and rate movements on the long tail side. I mean this is an element of the market that is moving harder and stronger than others. We have used this opportunity not just to grow but to refine the portfolio and the business mix. We want to take advantage of the environment. However, we are also mindful that we need to maintain and would want -- would like to maintain a mix or a balance between short tail and long tail. And anything we do, we're doing it cautiously. We're doing it within our risk appetite. But as long as the market continues in the way -- behaves the way it does and we've seen no letdown in rate movements or slowdown in rate movements at all, we will continue to take advantage of the opportunities that we find attractive.

[Scott Heleniak, analyst]

Okay. That's helpful. And then I wanted to follow up. In your comment you made about the dislocation particularly because of the Beirut explosion, and I think you mentioned parts of Europe. Can you talk a little more on just those specifically, and if there's any other areas where you're seeing a lot more dislocation because of COVID-19 losses, which you don't have but others do, and there's some capacity being pulled back because of this?

[Waleed Jabsheh, executive]

Yes, sure. I mean in terms of dislocation from a geographical perspective, I mean we've seen a lot of it in the Middle East over the last 12 to 18 months. Our operation in Dubai has had a great first half of the year and registered significant growth in excess of 90% from last year. We're seeing opportunities from that market because of the withdrawal of certain companies, the scaling back of capacities, reduction in line sizes, and we're taking full advantage of them. We are not necessarily seeing the same sort of strength in that dislocation in other of our geographical hubs, but we expect similar trends to follow in the near to mid -- in the near term to midterm.

In respect of the dislocation that we are seeing most impacted by COVID-19, it's across the board. I mean underwriting margins are a lot lower in the first 6 months across the market this year so far. I mean we just mentioned our entry into a niche segment of the cargo market. The reason we've entered into that market is because of the dislocation and the results that, that market has experienced. Obviously, event cancellation is a market that is hit hard. It's not an area we're involved in, but potentially could be one in the future. And we're looking for opportunities where there is dislocation because that's where you will see the biggest movement and improvement in terms of conditions.

Again, whatever we do, wherever we go, we'll all be within the company's risk appetite and only in areas where we are confident of achieving the profitability levels that we seek to achieve.

[Scott Heleniak, analyst]

Okay. That's helpful. It sounds like there's a lot of dislocation, and it sounds like the opportunities are still evolving. So we'll definitely look for that. I wanted to touch on the -- yes, I just want to touch on the investment side for a minute. The company continues to hold a pretty high cash balance, which you have for a while and wondering if there's any updated plans to redeploy that on the investment side. I know this is a very tough yield environment right now. But just wondering if you had any updated thoughts or plans on when that might happen and what areas of investment side you might look at when you redeploy that.

[Waleed Jabsheh, executive]

Let me pass this -- the answer to that question over to Wasef or Pervez.

[Pervez Rizvi, executive]

Wasef, you want to call it?

[Wasef Jabsheh, executive]

Yes, I'll -- it's a very tough investment environment nowadays. And you can hardly get any yield on whatever you do, really. We're lucky that we built a portfolio of investments for good number of years in the future. At the moment, I mean our main currencies are really trading currently, our dollar, U.K. pound and the euro. On the euro, you get negative interest rate. On the pound, it's very, very little, and it even might go to negative. On the dollar, what do you get? Just over 1%.

So we're really concentrated on the dollar. We concentrate to a certain extent on dollar FX currencies like Saudi riyal, UAE dirham, Qatar riyal, these deposits where we get better return. But we will not really go anywhere where there is a risk that we can't take. I mean we always say we have to operate this company. We've taken up risk on the -- our core business, which is insurance. We will not take any risk on the investment side. Investment is there to support the operation.

[Pervez Rizvi, executive]

And to add to Wasef's explanation, we continue to look for opportunities on the bond market, wherever we found. But of late, opportunities are very less, but we are targeting wherever we get an opportunity to invest.

[Scott Heleniak, analyst]

Okay. No, that's fair. Totally understand. That makes sense. And then the last question, just on the expense ratio, it was down pretty significantly. I know that's helped by some of the premium leverage. I imagine you got maybe some benefits on the expense side from some lower travel, entertainment, that kind of thing. Do you think a mid-30s expense ratio like you saw in the first half, is that something that is sustainable for the next -- for the second half of the year?

[Waleed Jabsheh, executive]

I think you'll see the expense ratio maybe track upwards a little bit because of the additional expenses that we're now incurring as a public company. Our -- we're building the workforce. Our D&O cover, for example, this year has increased significantly as a result of us being a public company, professional fees. So I think you'll probably see a little bit of an uptick in the second half but well within our budgeted sort of numbers. The good thing is that we continue to grow the book of business and our net earned premiums continue to increase, so that will alleviate the ratio with the increase in the dollar expenses. And we expect these conditions to stay with us for a little bit longer than -- for the next few quarters.

[Operator]

Our next question will come from [ Ted Blake ] of Walleye.

[Unknown Analyst]

Great quarter. I think I heard you earlier frame the $0.09 dividend as a 40% payout ratio, which would imply you're looking at it as a sort of a quarterly dividend. How should we think about that? Is this a semiannual dividend? Or is this something we should expect quarterly and kind of 40% to be the target rate for the short term future?

[Waleed Jabsheh, executive]

Thanks, [ Ted ], for the question. No, the plan is to distribute a dividend on a semiannual basis and on the basis of a 40% payout of net profit.

[Operator]

Our next question comes from Mohammed Al-Rahbi of U Capital.

[Mohammed Al-Rahbi;U Capital;Analyst, analyst]

Congratulations for the Q2 results of this year. My question is regarding the listing related expenses. Is it recurring or it's just onetime high this year because of the listing?

[Waleed Jabsheh, executive]

Thank you for the question. Sorry for the delay. It's the same answer that I answered previously. I mean some expenses will be recurring definitely. I mean our expense base will go up as a public company with all the additional costs and professional fees that come with operating as a public company.

[Mohammed Al-Rahbi;U Capital;Analyst, analyst]

Okay, clear. The second question is regarding the foreign exchange loss of $8.7 million. What's the IGI plan to reduce the impact of the currency fluctuations on your financials?

[Waleed Jabsheh, executive]

I'm going to pass that over to Wasef or Pervez to answer, please.

[Wasef Jabsheh, executive]

Do you want to take that, Pervez?

[Pervez Rizvi, executive]

Okay. We are seeing already the impact is getting lower by July and August. Now what our main currency was -- which was exposed was Great Britain pound, and we are already seeing a good improvement. But going forward, we are also exploring the opportunity, and we are talking to a number of financial institutions to provide a hedging cover for us. And I think by third quarter to -- by the half or by the second half of this year, we'll be addressing this issue.

[Mohammed Al-Rahbi;U Capital;Analyst, analyst]

Okay, sure. Last question is if you can give us your outlook for the second half of this year how you're seeing your business or profitability, if you can provide some guidance on that.

[Wasef Jabsheh, executive]

Yes. Sure, Mohammed. I mean as I mentioned before, I mean we're seeing rate increases and positive -- significant positive rate movements across the board. In the first 6 months, of the year, the long tail segment registered rate increases of almost 30%. The short tail segment registered rate increases of almost 20%. As I mentioned earlier and Wasef as well, we haven't seen conditions like this in a long time. The dislocation that we've seen in the first 6 months of this year indicates that these conditions will continue for the foreseeable future. And so we're -- we are here ready and have the full team and resources to take advantage of the opportunities that come.

[Operator]

Our next question will come from Will Allen of WFSA Capital.

[Will Allen;WFSA Capital;Analyst, analyst]

Firstly, thank you for another excellent call. Great job, guys, in this difficult time.

[Waleed Jabsheh, executive]

Thank you.

[Will Allen;WFSA Capital;Analyst, analyst]

So firstly, I have a number of questions. But firstly, can you just talk about the reinsurance protection that you guys have in place currently? Obviously, the events in Beirut are tragic, but just wondering what protections you might have in place to kick in on that front? Yes, let's start with that one.

[Waleed Jabsheh, executive]

I mean the reinsurance protections are -- I mean that was covered in events like this are those that would cover any other events. So on the nonmarine side, so if you look at your property, energy, engineering, it's straightforward. There's a small sort of quota share reinsurance support and then the rest is predominantly on excess-of-loss basis. Our program this year hasn't really changed much from last year. Unfortunately, the pricing has gone up, but you would expect that in a market like this.

On our inwards treaty book, that is a net book, we have strict guidelines around how that book is written with strict guidelines around the aggregates that -- what do you call it, that we write around. But as we mentioned earlier, we've got no direct reinsurance business or treaty business in Lebanon. Our potential exposures will be from Middle Eastern treaties that will have incidental exposures in Lebanon.

[Will Allen;WFSA Capital;Analyst, analyst]

Okay. Understood. Just a separate topic, just wondering in terms of your index inclusion in the U.S., obviously, the headquarters seem to be the primary aspect being used by Russell. I was wondering if you were considering any changes to improve your index inclusion or even disclosures on where your assets are, because I think your Bermudan assets should have allowed you to be included. Are you making any considerations on that front?

[Waleed Jabsheh, executive]

Thanks, Will. I mean these are still things that we're looking at and well within on our radar, and we're hoping to qualify, hopefully, sometime next year for it.

[Will Allen;WFSA Capital;Analyst, analyst]

Okay. Just on the time of the IPO, you -- one of the reasons for going public was to also improve your access to the debt markets. Obviously, you've had the rating agencies reaffirm your rating. Do you expect to be coming to the market to [ access ] capital on that front?

[Waleed Jabsheh, executive]

I mean for the time being, I don't see a need for us to access any capital markets. I mean we've got -- we raised capital through this transaction back in March and we've got a pretty solid capital base. But when the time comes that we feel we would like that, it's definitely one of the top options for us.

[Will Allen;WFSA Capital;Analyst, analyst]

And then I guess my final question was just on your investment portfolio and the FX element, but I guess on both aspects, when I look at where we ended the quarter relative to where we are now, I believe [ you're still ] small in the group context but chunky exposures on the equity side, which have meaningfully increased since -- into this quarter and same on the FX. And so is it right to think that you should have decent positive marks on both your investment portfolio and FX going into the third quarter?

[Waleed Jabsheh, executive]

I mean we'll wait and see. Obviously, the pound has recovered a lot since the 30th of June and is back at around levels seen at the 31st of December of 2019. So that's positive. But we continue to monitor the market and explore ways of sort of minimizing any volatility in those numbers.

[Will Allen;WFSA Capital;Analyst, analyst]

And your listed equities?

[Waleed Jabsheh, executive]

Sorry, what about them?

[Will Allen;WFSA Capital;Analyst, analyst]

Well, just thinking like being of a significant stake in MetLife Saudi Arabia.

[Waleed Jabsheh, executive]

Let me pass the -- to answer for that, I'll pass to Wasef.

[Wasef Jabsheh, executive]

Yes, yes. The equities -- some of these companies that we have over there, we are a founding member of that company when it started. And now we acquired MetLife over there, and it's been good. The -- to be honest with you, the best thing about the Saudi market is that there are too many companies fighting over a certain size of book of business. And so what we've done, we made some good money in the past and we're still making money, and we are reducing our position over there gradually. And we started last week. The price was attractive and we started reducing our position. So you will find that in the near future, by the end of the year maybe, our total equity position is less than what it is now.

[Will Allen;WFSA Capital;Analyst, analyst]

Cool. And that should result in significant realized gains then?

[Wasef Jabsheh, executive]

Yes. It is with a nice profit.

[Operator]

This will conclude our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

[Waleed Jabsheh, executive]

Closing remarks.

[Wasef Jabsheh, executive]

Thank you all for joining us today. We appreciate your continued support. We look forward to speaking with you again soon, and we'll visit in person when we are next able. If you have any additional questions, please contact Robin and she'll be happy to assist. Have a great day.

[Operator]

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.