FG Financial Group’s Reinsurance Division Achieving Strong Financial Performance; Expects Growing Fee Revenue in 2023

FG Financial Group, Inc. (Nasdaq: FGF) (the “Company”), today announced that its reinsurance division achieved net underwriting profit¹ in the first quarter of 2023 of over $1 million, driven by strong profitable growth in net written premiums as the company executes its strategy to deploy capital to highly structured loss-capped contracts. Furthermore, the company has focused on growing its fee-based revenue and expects to realize its first fees through its FG RE Solutions unit in 2023.

FG Financial is a reinsurance and asset management holding company focused on collateralized and loss capped reinsurance and merchant banking that allocates capital in partnership with Fundamental Global, a private partnership led by Kyle Cerminara and Joe Moglia, as well as other strategic investors.

As previously reported on May 12, 2023, FG Financial’s reinsurance division achieved net premiums earned of $3.7 million for the first quarter of 2023. For the full year 2022, net premiums earned grew $8.1 million to $13 million. This growth, along with disciplined underwriting, drove strong net underwriting profit at the reinsurance division to over $1 million in the first quarter of 2023. For the full year 2022, net underwriting profit grew to $2.35 million from a loss of $881 thousand in 2021.

In 2023, the Company is focused on growing fee-based revenue. The Company has in place and or is currently negotiating opportunities that could yield up to $1 million in fee revenue in 2023.

^{1Net Premiums Earned minus Net Losses and Loss Adjustment Expenses minus Amortization of Deferred Policy Acquisition Costs.}

FG Financial Group CEO Larry Swets, Jr. commented, “We launched our reinsurance division in 2020 with the vision of utilizing disciplined underwriting to patiently deploy capital to niche, loss-capped opportunities. While still small, our differentiated and flexible reinsurance model has been working well, driving strong revenue and earnings growth. Looking forward, we remain focused on continuing to grow premiums while also broadening our revenue base with no-risk, fee-based revenue through our FG RE Solutions unit. Based on our current pipeline, we could realize up to $1 million in fees this year with the opportunity for substantial 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.”