FG Financial Group reported that its reinsurance division posted net underwriting income in the first quarter of 2023 of more than $1 million.
According to the company, the profit was driven by strong revenue growth in net written premiums as the company implemented its strategy to deploy capital in more structured loss-capped contracts.
In addition, the company is putting emphasis on expanding the revenue generated from payments. It expects its FG RE Solutions division to start making bills in 2023.
As previously reported, FG Financial Group reported that net reinsurance premium earned increased to $3.7 million, from $2.5 million in the year-ago quarter.
Net premiums earned increased by $8.1 million to reach $13 million for the full year of 2022. This growth, combined with prudent underwriting practices, led to a strong net underwriting income which exceeded $1 million in the first quarter of 2023 for the reinsurance division.
For the full year 2022, net underwriting profit grew to $2.35 million from a loss of $881,000 in 2021.
By 2023, the company’s primary goal is to increase fee-based revenue. The company has already established several arrangements and is actively pursuing new opportunities with the potential to generate up to $1 million in annual fee income.
FG Financial Group CEO Larry Swets, Jr. commented, “We launched our reinsurance division in 2020 with the vision of using disciplined underwriting to patiently deploy capital into niche, underserved opportunities. While still small, our and renewed reinsurance model is working well, driving strong revenue and earnings growth.”
“Looking ahead, we remain focused on continuing to grow premiums while also expanding our risk-free, premium-based revenue base through our FG RE Solutions unit. Based on our current pipeline, we will realize up to $1 million in fees this year with the opportunity for significant long-term growth in this business as the range of joint-ventures and structures expands.
“Additionally, we expect our Sponsor Protection and Coverage Risk unit, which focuses on providing D&O insurance to SPACs and small to mid-cap companies, to begin writing business in 2023. We look forward to continuing to patiently allocate capital to asymmetric risk/reward opportunities as we scale and drive long-term returns for our shareholders,” he added.
