may be agreed by the Tiberius stockholders) is not considered a liquidation distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution.

Tiberius did not obtain an opinion from an independent investment banking or accounting firm, and consequently, you have no assurance from an independent source that the price Tiberius is paying for the business of IGI is fair to Tiberius from a financial point of view.

Tiberius is not required to obtain an opinion from an independent investment banking or accounting firm that the price Tiberius is paying for the Business Combination is fair to it from a financial point of view. Tiberius’s board of directors did not obtain a third-party valuation or fairness opinion in connection with its determination to approve the Business Combination. Its officers and directors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and have concluded that their experience and backgrounds, together with the experience and sector expertise of Tiberius’s financial advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination with IGI. In addition, Tiberius’s officers and directors and its advisors have substantial experience with mergers and acquisitions. Accordingly, investors will be relying solely on the judgment of Tiberius’s board of directors in valuing IGI’s business and assuming the risk that the board of directors may not have properly valued such business.

The grant and future exercise of registration rights may adversely affect the market price of Tiberius Common Stock and common shares of Pubco upon consummation of the Business Combination.

Pursuant to the existing registration rights agreement between Tiberius and the Sponsor, officers and directors of Tiberius, and the registration rights agreement to be entered into by Pubco in connection with the Business Combination as described elsewhere in this proxy statement/prospectus, Pubco will be required to file a resale registration statement shortly after closing which registers for resale the Pubco common shares held by the Sponsor, the officers and directors of Tiberius and the former stockholders of IGI. In addition, the Sponsor, the officers and directors of Tiberius and certain shareholders of IGI can demand that Pubco register their registrable securities under certain circumstances and will also have piggyback registration rights for their securities in connection with certain registrations of securities that Pubco undertakes. Following the consummation of the Business Combination, Pubco is also required to file and maintain an effective registration statement under the Securities Act covering securities to be issued to investors pursuant to forward purchase contracts and securities to be issued to the PIPE Investors. Pubco is also required to file a registration statement covering the issuance of Pubco common shares upon the exercise of Pubco warrants.

The registration of these securities will permit the public resale of such securities, subject to lockup agreements executed by Tiberius’s Sponsor and IGI’s largest shareholders. The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of Pubco’s common shares post-Business Combination.

Sales of a substantial number of Pubco securities in the public market following this Business Combination could adversely affect the market price of the common shares of Pubco.

Following the Business Combination, assuming no redemptions by Tiberius stockholders and based on IGI’s book value at June 30, 2019 and the Tiberius Common Stock redemption price at the anticipated closing date, the Sponsor will hold 1,060,000 Pubco common shares, excluding 1,973,300 contingent unvested shares, and will be subject to a one-year lock-up restriction post-Closing (subject to certain exceptions). In addition, based on the foregoing assumptions, (1) Wasef Jabsheh will hold 11,697,544 Pubco common shares, excluding 1 million contingent unvested shares, and warrants to purchase 4,000,000 Pubco common shares, and will be subject to a one-year lock-up restriction post-Closing, (2) Oman International Development & Investment Company SAOG (“Ominvest”) will own 6,644,044 Pubco shares, and Argo Re Limited (“Argo”) will own 4,329,614 Pubco common shares and warrants to purchase 500,000 Pubco common shares and (3) Ominvest and Argo will be subject to no lock-up restriction on one-third of their shares, a six-month lock-up restriction on one-third of their shares and a 12-month lock-up restriction on one-third of their shares (subject to certain exceptions). After the lock-up agreements expire, these common shares and common shares which are issuable upon exercise of such warrants will become eligible for future sale in the public market. Sales of a significant number of these common shares of Pubco in the public market, or the perception that such sales could occur, could reduce the market price of the common shares of Pubco.

If the Adjournment Proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the Business Combination, Tiberius’s board of directors will not have the ability to adjourn the Special Meeting to a later date in order to solicit further votes, and, therefore, the Business Combination will not be approved.

Tiberius’s board of directors is seeking approval to adjourn the Special Meeting to a later date or dates if, at the Special Meeting, based upon the tabulated votes, there are insufficient votes to approve the consummation of the Business Combination. If the Adjournment Proposal is not approved, Tiberius’s board will not have the ability to adjourn the Special Meeting to a later date and, therefore, will not have more time to solicit votes to approve the consummation of the Business Combination. In such event, the Business Combination would not be completed.

Tiberius shareholders will not be entitled to appraisal rights in the Business Combination under Delaware or Bermuda law.

Under Delaware law, Tiberius shareholders are not entitled to appraisal rights with respect to the Business Combination. Under Bermuda law, in the event of an amalgamation or merger of a Bermuda company with another company or corporation, a shareholder of the Bermuda company who did not vote in favor of the amalgamation or merger and who is not satisfied that fair value has been offered for such shareholder’s shares may, within one month of notice of the shareholders meeting, apply to the Supreme Court of Bermuda to appraise the fair value of those shares. Because Pubco is not a direct party to the merger and Pubco shareholders will continue to own their Pubco common shares, Pubco shareholders will not be entitled to appraisal rights under Bermuda law in connection with the Business Combination.

Risks Relating to Redemptions and Certain Outstanding Securities of Tiberius

If Tiberius public stockholders redeem more than 14,397,300 shares of Tiberius Common Stock, it may be more difficult to close the Business Combination absent additional financing.

Pursuant to the amended and restated certificate of incorporation of Tiberius, Tiberius must have net tangible assets of at least $5,000,001 in the Trust Account upon the consummation of the Business Combination. In addition, pursuant to the Business Combination Agreement, Tiberius must have cash of at least $100 million prior to giving effect to expenses but after giving effect to any required redemptions. If too many public stockholders exercise their redemption rights, Tiberius would not be able to meet such closing conditions and, as a result, would not be able to proceed with the Business Combination unless these conditions are waived. Furthermore, in no event will Tiberius redeem its public shares in an amount that would cause Tiberius’s net tangible assets to be less than $5,000,001 upon consummation of the Business Combination. Consequently, if accepting all properly submitted redemption requests would cause Tiberius’s net tangible assets to be less than $5,000,001, or would cause the Minimum Cash Condition to fail to be satisfied, Tiberius could not proceed with the Business Combination and may instead search for an alternate business combination. If the Business Combination is unsuccessful and Tiberius is not able to consummate another business combination by March 20, 2020 (or such later date as may be agreed by the Tiberius stockholders), Tiberius’s public shareholders will not receive their pro rata portion of the Trust Account until Tiberius liquidates the Trust Account. If Tiberius’s public shareholders are in need of immediate liquidity, they could attempt to sell their stock in the open market; however, at such time Tiberius’s stock may trade at a discount to the pro rata amount per share in the Trust Account. In either situation, Tiberius public shareholders may suffer a material loss on their investment or lose the benefit of funds expected in connection with redemption until Tiberius liquidates or they are able to sell their stock in the open market.

If Tiberius stockholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their shares of Tiberius Common Stock for a pro rata portion of the funds held in the Trust Account.

In order to exercise their redemption rights, public stockholders of Tiberius are required to submit a request in writing and deliver their stock (either physically or electronically) to Tiberius’s transfer agent at least two business days prior to the Special Meeting. Stockholders electing to redeem their shares will receive their pro rata portion of the Trust Account less franchise and income taxes payable, calculated as of two business days prior to the anticipated consummation of the Business Combination. See the section entitled “Special Meeting of Tiberius Stockholders — Redemption Rights” for additional information on how to exercise your redemption rights.

You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances. To liquidate your investment, therefore, you may be forced to sell your public shares or warrants, potentially at a loss.

Tiberius’s public stockholders will be entitled to receive funds from the Trust Account only upon the earlier to occur of: (i) the completion of the Business Combination, and then only in connection with those shares of Tiberius Common Stock that such stockholder properly elected to redeem, subject to the limitations described herein, and (ii) the redemption of Tiberius public shares if Tiberius is unable to complete its business combination by March 20, 2020 (or such later date as may be agreed by the Tiberius stockholders), subject to applicable law and as further described herein. In addition, if Tiberius is unable to complete a business combination by March 20, 2020 (or such later date as may be agreed by the Tiberius stockholders) for any reason, compliance with Delaware law may require that Tiberius submit a plan of dissolution to its then-existing stockholders for approval prior to the distribution of the proceeds held in the Trust Account. In that case, public stockholders may be forced to wait beyond March 20, 2020 (or such later date) before they receive funds from the Trust Account. In no other circumstances will a public stockholder have any right or interest of any kind in the Trust Account. Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.

Future resales of the common shares of Pubco issued to the IGI shareholders may cause the market price of Pubco’s securities to drop significantly, even if Pubco’s business is doing well.

Under the Business Combination Agreement, the IGI shareholders will receive, among other things, a significant amount of common shares of Pubco. Under a registration rights agreement, Pubco is required to register for resale all of the Pubco common shares that were issued to the former IGI shareholders. Upon the effectiveness of such registration statement, all of such shares will become freely transferable. However, notwithstanding such registration, pursuant to the Business Combination Agreement and related agreements, the three largest IGI shareholders, who collectively hold over 75% of the shares held by the IGI shareholders, will be restricted from selling any of the Pubco shares that they receive as a result of the Share Exchange (i) in the case of Wasef Jabsheh, during a twelve month period after the closing date of the Business Combination, subject to certain exceptions, and (ii) in the case of Argo and Ominvest, with respect to one-third of their shares, during a six month period after Closing, and with respect to one-third of their shares, during a 12 month period after Closing, subject to certain exceptions. See the section entitled “The Business Combination Proposal — The Business Combination Agreement and Related Agreements — Lock-up Agreements.”

In addition, subject to lock-up agreements signed by IGI’s three largest shareholders, the IGI shareholders also may sell Pubco shares pursuant to Rule 144 under the Securities Act, if available. In these cases, the resales must meet the criteria and conform to the requirements of that rule, including, because Tiberius and Pubco are currently shell companies, waiting until one year after Pubco’s filing with the SEC of a Shell Company Report on Form 20-F containing Form 10 type information reflecting the Business Combination.

Upon expiration of the applicable lock-up periods (with respect to the three largest IGI shareholders), and upon effectiveness of the registration statement Pubco files pursuant to the registration rights agreement or upon satisfaction of the requirements of Rule 144 under the Securities Act, or another applicable exemption from registration, the IGI shareholders may sell large amounts of Pubco shares in the open market or in privately negotiated transactions, which could have the effect of increasing the volatility in Pubco’s stock price or putting significant downward pressure on the price of Pubco’s securities.

If Tiberius stockholders fail to properly exercise redemption rights, they will not be entitled to redeem their shares of Tiberius Common Stock for a pro rata portion of the Trust Account.

Tiberius stockholders holding public shares may demand that Tiberius redeem their shares for a pro rata portion of the Trust Account, calculated as of two business days prior to the anticipated consummation of the Business Combination. Tiberius stockholders who seek to exercise this redemption right must deliver their Tiberius Common Stock (either physically or electronically) to Tiberius’s transfer agent prior to the vote at the meeting. Any Tiberius stockholder who fails to properly exercise redemption rights will not be entitled to redeem his or her shares for a pro rata portion of the Trust Account. See the section entitled “Special Meeting of Tiberius Stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

NASDAQ may not list Pubco’s securities on its exchange, which could limit investors’ ability to engage in transactions in Pubco’s securities and subject Pubco to additional trading restrictions.

Pubco intends to apply to have its securities listed on the Nasdaq Capital Market upon consummation of the Business Combination. Pubco will be required to meet the initial listing requirements of the Nasdaq Capital Market in order to list common shares and warrants. There can be no assurance that Pubco will be able to meet those initial listing requirements. In particular, the Nasdaq Capital Market requires listed companies to have at least 300 round lot holders, at least 50% of which must hold at least $2,500 of securities. Even if Pubco’s securities are so listed, Pubco may be unable to maintain the listing of its securities in the future.

If Pubco fails to meet the initial listing requirements and NASDAQ does not list its securities on its exchange, Pubco could face significant material adverse consequences, including:

•        a limited availability of market quotations for its securities;

•        a limited amount of news and analyst coverage for the company; and

•        a decreased ability to issue additional securities or obtain additional financing in the future.

In addition, the permission of the BMA is required, under the provisions of the Exchange Control Act, for all issuances and transfers of shares (which includes the Pubco common shares) of Bermuda companies to or from a non-resident of Bermuda for exchange control purposes, other than in cases where the BMA has granted a general permission. The BMA, in its notice to the public dated June 1, 2005, granted a general permission for the issue and subsequent transfer of any securities of a Bermuda company from and/or to a non-resident of Bermuda for exchange control purposes for so long as any “Equity Securities” of the company (which would include the Pubco common shares) are listed on an “Appointed Stock Exchange” (which would include NASDAQ). In granting the general permission the BMA accepts no responsibility for Pubco’s or IGI’s financial soundness or the correctness of any of the statements made or opinions expressed in this proxy statement/prospectus. If Pubco’s shares are delisted from the Nasdaq Capital Market and not otherwise listed on an Appointed Stock Exchange, the issue and transfer of Pubco’s equity securities (which would include the Pubco common shares) would be subject to the prior approval of the BMA, unless the BMA has granted a general permission in respect of any such issue or transfer.

Tiberius’s current directors and executive officers beneficially own shares of Tiberius Common Stock and warrants that will be worthless and have made loans and incurred reimbursable expenses that may not be reimbursed or repaid if the Business Combination is not approved. Such interests may have influenced their decision to approve the Business Combination.

Tiberius’s officers and directors and/or their affiliates beneficially own or have a pecuniary interest in founder shares and private warrants that they purchased prior to, or simultaneously with, the IPO. Tiberius’s executive officers and directors and their affiliates have no redemption rights with respect to these securities in the event a business combination is not effected in the required time period. Therefore, if the Business Combination with IGI or another business combination is not approved within the required time period, such securities held by such persons will be worthless. Furthermore, Tiberius’s officers and directors have loaned Tiberius an aggregate of $2,225,000 as of the record date and such officers and directors and their affiliates are entitled to reimbursement of out-of-pocket expenses incurred by them in connection with certain activities on Tiberius’s behalf, such as identifying and investigating possible business targets and business combinations. These loans and expenses will be repaid upon completion of the Business Combination with IGI. However, if Tiberius fails to consummate the Business Combination, they will not have any claim against the Trust Account for repayment or reimbursement. Accordingly, Tiberius may not be able to repay or reimburse these amounts if the Business Combination is not completed. See the section entitled “The Business Combination Proposal — Interests of Tiberius Directors and Officers in the Business Combination.”

These financial interests may have influenced the decision of Tiberius’s directors to approve the Business Combination with IGI and to continue to pursue such business combination. In considering the recommendations of Tiberius’s board of directors to vote for the Business Combination Proposal and other proposals, its stockholders should consider these interests.

Michael Gray, Chief Executive Officer of Tiberius, is liable to ensure that proceeds of the trust are not reduced by vendor claims in the event the Business Combination is not consummated. Such liability may have influenced his decision to approve the Business Combination.

If the Business Combination or another business combination is not consummated by Tiberius within the required time period, Michael Gray, Chief Executive Officer of Tiberius, will be personally liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Tiberius for services rendered or contracted for or products sold to Tiberius, but only if such a vendor or target business has not executed a waiver agreement. If Tiberius consummates a business combination, on the other hand, Tiberius will be liable for all such claims. Tiberius has no reason to believe that Michael Gray will not be able to fulfill his indemnity obligations to Tiberius, but there can be no assurance that he will be able to do so. See the section entitled “Other Information Related to Tiberius — Liquidation if No Business Combination” for further information.

The personal obligations of Michael Gray may have influenced Tiberius’s board of directors’ decision to approve the Business Combination and to continue to pursue such Business Combination. In considering the recommendations of Tiberius’s board of directors to vote for the Business Combination Proposal and other proposals, Tiberius’s stockholders should consider these interests.

The exercise of discretion by Tiberius officers and directors in agreeing to changes to or waivers of the terms of the Business Combination Agreement may result in a conflict of interest when determining whether such changes to the terms of the Business Combination Agreement or waivers of conditions are appropriate and in the best interest of Tiberius stockholders.

In the period leading up to the closing of the Business Combination, events may occur that, pursuant to the Business Combination Agreement, would require Tiberius to agree to amend the Business Combination Agreement, to consent to certain actions taken by IGI or to waive rights that Tiberius is entitled to under the Business Combination Agreement. Such events could arise because of changes in the course of IGI’s business, a request by IGI to undertake actions that would otherwise be prohibited by the terms of the Business Combination Agreement or the occurrence of other events that would have a material adverse effect on IGI’s business and would entitle Tiberius to terminate the Business Combination Agreement. In any of such circumstances, it would be at Tiberius’s discretion, acting through its board of directors, to grant its consent or waive those rights. The existence of the financial and personal interests of the directors described in the preceding risk factors may result in a conflict of interest on the part of one or more of the directors between what he or they may believe is best for Tiberius and what he or they may believe is best for himself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, Tiberius does not believe there will be any changes or waivers that Tiberius’s directors and officers would be likely to make after stockholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further stockholder approval, Tiberius will circulate a new or amended proxy statement/prospectus and resolicit its stockholders if changes to the terms of the transaction that would have a material impact on its stockholders are required prior to the vote on the Business Combination Proposal.

If Tiberius is unable to complete the Business Combination with IGI or another business combination by March 20, 2020 (or such later date as may be agreed by the Tiberius stockholders), Tiberius will cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, third parties may bring claims against Tiberius and, as a result, the proceeds held in the Trust Account could be reduced and the per-share liquidation price received by stockholders could be less than $10.10 per share.

Under the terms of Tiberius’s amended and restated certificate of incorporation, Tiberius must complete the Business Combination with IGI or another business combination by March 20, 2020 (or such later date as may be agreed by the Tiberius stockholders), or Tiberius must cease all operations except for the purpose of winding up, redeeming 100% of the outstanding public shares and, subject to the approval of its remaining stockholders and its board of directors, dissolving and liquidating. In such event, third parties may bring claims against Tiberius. Although Tiberius has obtained waiver agreements from certain vendors and service providers it has engaged and owes money to, and the prospective target businesses it has negotiated with, whereby such parties have waived any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account, there is no guarantee that they or other vendors who did not execute such waivers will not seek recourse against the Trust Account notwithstanding such agreements. Furthermore, there is no guarantee that a court will uphold the validity of such agreements. Accordingly,

the proceeds held in the Trust Account could be subject to claims which could take priority over those of Tiberius’s public stockholders. If Tiberius is unable to complete a business combination within the required time period, its Chief Executive Officer has agreed that he will be personally liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Tiberius for services rendered or contracted for or products sold to Tiberius, but only if such a vendor or prospective target business does not execute such a waiver. However, he may not be able to meet such obligation. Therefore, the per-share distribution from the Trust Account in such a situation may be less than $10.10 due to such claims.

Additionally, if Tiberius is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, or if Tiberius otherwise enters compulsory or court supervised liquidation, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of its stockholders. To the extent any bankruptcy claims deplete the Trust Account, Tiberius may not be able to return to its public stockholders at least $10.10 per share.

Tiberius’s stockholders may be held liable for claims by third parties against Tiberius to the extent of distributions received by them.

If Tiberius is unable to complete the Business Combination with Tiberius or another business combination within the required time period, Tiberius will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of its remaining stockholders and its board of directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to its obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. Tiberius cannot assure you that it will properly assess all claims that may be potentially brought against it. As such, Tiberius’s stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of its stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, Tiberius cannot assure you that third parties will not seek to recover from its stockholders amounts owed to them by it.

If Tiberius is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by Tiberius’s stockholders. Furthermore, because Tiberius intends to distribute the proceeds held in the Trust Account to its public stockholders promptly after the expiration of the time period to complete a business combination, this may be viewed or interpreted as giving preference to its public stockholders over any potential creditors with respect to access to or distributions from its assets. Furthermore, Tiberius’s directors may be viewed as having breached their fiduciary duties to Tiberius’s creditors and/or may have acted in bad faith, thereby exposing themselves and the company to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors. Tiberius cannot assure you that claims will not be brought against it for these reasons.

Activities taken by existing Tiberius stockholders to increase the likelihood of approval of the Business Combination Proposal and other proposals could have a depressive effect on the price of Tiberius’s securities.

At any time prior to the Special Meeting, during a period when they are not then aware of any material nonpublic information regarding Tiberius or its securities, initial stockholders, officers or directors, IGI or IGI’s shareholders and/or their respective affiliates may purchase shares from institutional and other investors who vote, or indicate an intention to vote, against the Business Combination Proposal, or execute agreements to purchase such shares from such investors in the future, or may enter into transactions with such investors and others to provide them with incentives to acquire shares of Tiberius Common Stock or vote their shares in favor of the Business Combination Proposal. The purpose of such share purchases and other transactions would be to increase the likelihood of satisfying the requirements to consummate the Business Combination where it appears that such requirements would otherwise not be met. Entering into any such arrangements may have a depressive effect on the price of Tiberius Common Stock. For example, as a result of these arrangements, an investor or holder may have the ability to effectively purchase shares at a price lower than market and may therefore be more likely to sell the shares he owns, either prior to or immediately after the Special Meeting.

Risks Related to Pubco’s Business and Operations Following the Business Combination

The value of your investment in Pubco following the consummation of the Business Combination will be subject to significant risks affecting Pubco and IGI and inherent in the industry in which IGI operates. You should carefully consider the risks and uncertainties described below and other information included in this proxy statement/prospectus. If any of the events described below occur, the post-Business Combination business and financial results could be adversely affected in a material way. This could cause the trading price of Pubco common shares to decline, perhaps significantly, and you therefore may lose all or part of your investment. As used in the risks described in this subsection, references to “we,” “us” and “our” are intended to refer to Pubco unless the context clearly indicates otherwise.

Following the consummation of the Business Combination, Pubco’s only significant asset will be its ownership of IGI (and, indirectly, IGI’s subsidiaries) and such ownership may not be sufficient to pay dividends or make distributions or loans to enable Pubco to pay any dividends on its common shares or satisfy other financial obligations.

Following the consummation of the Business Combination, Pubco will be a holding company and will not directly own any operating assets other than its ownership of interests in IGI. Pubco will depend on IGI for distributions, loans and other payments to generate the funds necessary to meet its financial obligations, including its expenses as a publicly traded company and to pay any dividends. The earnings from, or other available assets of, IGI may not be sufficient to make distributions or pay dividends, pay expenses or satisfy Pubco’s other financial obligations.

Additionally, IGI’s primary operating subsidiary is IGI Bermuda, which is subject to Bermuda regulatory constraints that affect its ability to pay dividends on its common shares and make other distributions. Under the Bermuda Insurance Act 1978, as amended (the “Insurance Act”), and related regulations, IGI Bermuda, as a Class 3B insurer, is required to maintain certain minimum solvency levels and is prohibited from declaring or paying dividends that would result in noncompliance with this requirement. In addition, a Class 3B insurer is prohibited from declaring or paying any dividends of more than 25% of its total statutory capital and surplus, as shown on its previous financial year statutory balance sheet, unless at least seven days before payment of the dividends it files an affidavit with the BMA that it will continue to meet its required solvency margins.

Fluctuations in operating results, earnings and other factors, including incidents involving IGI’s customers and negative media coverage, may result in significant decreases in the price of Pubco securities post-Business Combination.

The stock markets experience volatility that is often unrelated to operating performance. These broad market fluctuations may adversely affect the trading price of Pubco’s common shares post-Business Combination and, as a result, there may be significant volatility in the market price of Pubco’s common shares post-Business Combination. If IGI is unable to operate profitably as investors expect, the market price of Pubco’s common shares post-Business Combination will likely decline when it becomes apparent that the market expectations may not be realized. In addition to operating results, many economic and seasonal factors outside of Pubco’s or IGI’s control could have an adverse effect on the price of Pubco’s common shares post-Business Combination and increase fluctuations in its earnings. These factors include certain of the risks discussed herein, operating results of other companies in the same industry, changes in financial estimates or recommendations of securities analysts post-Business Combination, speculation in the press or investment community, negative media coverage, the risk of potential legal proceedings or government investigations, the possible effects of war, terrorism and other hostilities, adverse weather conditions, changes in general conditions in the economy or the financial markets or other developments affecting the insurance industry.

Because IGI has operated as a private company, IGI will have limited experience complying with public company obligations and fulfilling these obligations will be expensive and time consuming and may divert management’s attention from the day-to-day operation of its business.

IGI has operated historically as a privately-owned company and, accordingly, many of its senior management have limited experience managing a publicly-traded company and have limited experience complying with the increasingly complex laws pertaining to public companies. In particular, the significant regulatory oversight and reporting obligations imposed on public companies will require substantial attention from IGI’s senior management and may divert attention away from the day-to-day management of its businesses, which could have a material adverse effect on IGI’s business, financial condition and results of operations. Similarly, corporate governance obligations, including with respect to the development and implementation of appropriate corporate governance policies, and

concurrent service on the board of directors and possibly multiple board committees, will impose additional burdens on IGI’s non-executive directors.

In addition, Pubco will incur significant additional legal, accounting, insurance and other expenses, including costs associated with public company reporting requirements following completion of the Business Combination. Pubco also will incur higher costs associated with complying with the requirements of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), and related rules implemented by the SEC and NASDAQ. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. Pubco expects these laws and regulations to increase its legal and financial compliance costs after the Business Combination and to render some activities more time-consuming and costly, although Pubco is currently unable to estimate these costs with any degree of certainty. Pubco may need to hire more employees post-Business Combination or engage outside consultants to comply with these requirements, which will increase its post-Business Combination costs and expenses. Being a public company could make it more difficult or costly for Pubco to obtain certain types of insurance, including director and officer liability insurance, and Pubco may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. Being a public company could also make it more difficult and expensive for Pubco to attract and retain qualified persons to serve on Pubco’s board of directors, board committees or as executive officers. Furthermore, if Pubco is unable to satisfy its obligations as a public company, it could be subject to delisting of its common shares, fines, sanctions and other regulatory action and potentially civil litigation.

Failure to maintain effective internal controls over financial reporting could have a material adverse effect on our business, operating results and stock price.

Prior to the consummation of the Business Combination, IGI is neither a publicly listed company, nor an affiliate of a publicly listed company, and has not dedicated accounting personnel and other resources to address internal control and other procedures commensurate with those of a publicly listed company. Effective internal control over financial reporting is necessary to increase the reliability of financial reports.

In connection with the external audit of IGI’s financial statements as of and for the years ended December 31, 2016, 2017 and 2018, in preparation for the Business Combination, IGI noted certain deficiencies in financial reporting and internal control which will be deemed to be a material weakness under applicable PCAOB standards. The Public Company Accounting Oversight Board has defined a material weakness as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

Our material weakness identified relates to an entity level and financial reporting control environment that is neither designed, nor operates, with appropriate precision to prevent or detect accounting or disclosure errors that may be material to the financial statements and a lack of a fully developed accounting department infrastructure commensurate with those of a publicly listed company able to evaluate, account for and disclose complex transactions.

Neither IGI nor its auditors were required to perform an evaluation of internal control over financial reporting as of December 31, 2016, 2017 and 2018 in accordance with the provisions of the Sarbanes-Oxley Act as it was a private company. Further, neither Pubco’s nor IGI’s independent registered public accounting firm will be required to report on the effectiveness of their respective internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 until Pubco’s first annual report on Form 20-F following the date on which it ceases to qualify as an “emerging growth company,” which may be up to five full fiscal years following the date of the Closing. Had such evaluation been performed, additional control deficiencies may have been identified by our management, and those control deficiencies could have also represented one or more material weaknesses.

In addition, Pubco and IGI cannot predict the outcome of this determination and whether Pubco and/or IGI will need to implement remedial actions in order to implement effective control over financial reporting. If in subsequent years Pubco and/or IGI is unable to assert that Pubco’s and/or IGI’s internal control over financial reporting is effective, or if Pubco’s and/or IGI’s auditors express an opinion that Pubco’s and/or IGI’s internal control over financial reporting is ineffective, IGI and Pubco may fail to meet the future reporting obligations in a timely and reliable manner and our financial statements may contain material misstatements. Any such failure could also adversely cause our investors to have less confidence in the accuracy and completeness of our financial reports, which could have a material adverse effect on the price of Pubco’s securities.

Pubco and IGI will invest to significantly enhance the entity level and financial reporting control environment as well as the accounting department infrastructure. The measures Pubco and IGI will implement to address the material weakness include strengthening the resources within the accounting function, continuing to implement new systems and automating processes, conducting training for Pubco and IGI personnel with respect to IFRS and SEC financial reporting requirements and documenting and evaluating the controls over financial reporting. Pubco and IGI plan to have remediated this material weakness by December 31, 2020. In this regard, Pubco and IGI will need to dedicate internal resources, recruit personnel with public reporting experience, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of their internal control over financial reporting. This may include taking steps to improve control processes as appropriate, validating that controls are functioning as documented and implementing a continuous reporting and improvement process for internal control over financial reporting.

A market for Pubco’s securities may not develop, which would adversely affect the liquidity and price of Pubco’s securities.

An active trading market for Pubco securities following the Business Combination may never develop or, if developed, may not be sustained. In addition, the price of Pubco securities after the Business Combination could fluctuate significantly for various reasons, many of which are outside Pubco’s control, such as Pubco’s performance, large purchases or sales of the common shares, legislative changes and general economic, political or regulatory conditions. The release of Pubco’s financial results may also cause the Pubco share price to vary. If an active market for Pubco securities does not develop, it may be difficult for you to sell the Pubco common shares you own or purchase without depressing the market price for the shares or to sell the shares at all. The existence of an active trading market for Pubco’s securities will depend to a significant extent on Pubco’s ability to meet and continue to meet NASDAQ’s listing criteria, which Pubco may be unable to accomplish.

The price of Pubco common shares may be volatile.

The price of Pubco common shares may fluctuate due to a variety of factors, including:

•        actual or anticipated fluctuations in Pubco’s semi-annual and annual results and those of other public companies in the insurance and reinsurance industry;

•        mergers and strategic alliances in the insurance and reinsurance industry;

•        market prices and conditions in the insurance and reinsurance industry;

•        changes in government regulation applicable to Pubco and its subsidiaries and the industry in which IGI operates;

•        potential or actual military conflicts or acts of terrorism;

•        the failure of securities analysts to publish research about Pubco, or shortfalls in Pubco’s operating results compared to levels forecast by securities analysts;

•        announcements concerning Pubco or its competitors; and

•        the general state of the securities markets.

These market and industry factors may materially reduce the market price of Pubco common shares, regardless of Pubco’s operating performance.

Reports published by analysts, including projections in those reports that differ from Pubco’s actual results, could adversely affect the price and trading volume of Pubco’s common shares.

Pubco currently expects that securities research analysts will establish and publish their own periodic projections for its business. These projections may vary widely and may not accurately predict the results Pubco achieves. Pubco’s share price may decline if its actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on Pubco downgrades Pubco stock or publishes inaccurate or unfavorable research about Pubco’s business, Pubco’s share price could decline. If one or more of these analysts

ceases coverage of Pubco or fails to publish reports on Pubco regularly, Pubco’s share price or trading volume could decline. While Pubco expects research analyst coverage, if no analysts commence coverage of Pubco, the trading price and volume for its common shares could be adversely affected.

Pubco may issue additional common shares or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of Pubco’s common shares.

Pubco may issue additional common shares or other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions, without shareholder approval, in a number of circumstances.

Pubco’s issuance of additional common shares or other equity securities of equal or senior rank would have the following effects:

•        Pubco’s existing shareholders’ proportionate ownership interest in Pubco will decrease;

•        the amount of cash available per share, including for payment of dividends in the future, may decrease;

•        the relative voting strength of each previously outstanding common share may be diminished; and

•        the market price of Pubco’s common shares may decline.

You will have limited ability to bring an action against Pubco or against its directors and officers, or to enforce a judgment against Pubco or them, because Pubco is incorporated in Bermuda, because Pubco conducts its operations primarily outside of the United States and because a majority of Pubco’s directors and officers reside outside the United States.

Pubco is an exempted company incorporated in Bermuda and, as a result, the rights of the holders of Pubco common shares will be governed by Bermuda law and Pubco’s memorandum of association and the Amended and Restated Pubco Bye-laws. Following the Business Combination, Pubco will conduct its operations through subsidiaries which are located primarily outside the United States. All of Pubco’s current assets are located outside the United States, and substantially all of Pubco’s business is conducted outside the United States. All of Pubco’s officers and a majority of Pubco’s directors reside outside the United States and a substantial portion of the assets of those persons are located outside of the United States. As a result, it could be difficult or impossible for you to effect service of process on these individuals in the United States in the event that you believe that your rights have been infringed under applicable securities laws or otherwise or to enforce in the United States judgments obtained in U.S. courts against Pubco or those persons based on civil liability provisions of the U.S. securities laws. It is doubtful whether the courts in Bermuda will enforce judgments obtained in other jurisdictions, including the U.S., against Pubco or Pubco’s directors or officers under the securities laws of those jurisdictions or entertain actions in Bermuda against Pubco or Pubco’s directors or officers under the securities laws of other jurisdictions. In addition, the Amended and Restated Pubco Bye-laws state that all disputes arising out of the Companies Act 1981 of Bermuda or out of or in connection with the Amended & Restated Pubco Bye-laws are subject to the exclusive jurisdiction of the Supreme Court of Bermuda.

Shareholders of Bermuda exempted companies such as Pubco also have no general rights under Bermuda law to inspect corporate records and accounts other than rights to review Pubco’s memorandum of association and bye-laws, financial statements, minutes of the shareholder meetings and the shareholder register. This could make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

As a result of all of the above, public shareholders might have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a U.S. company.

The Amended and Restated Pubco Bye-laws designate the Supreme Court of Bermuda, to the fullest extent permitted by law, as the exclusive forum for certain types of actions and proceedings that may be initiated by Pubco shareholders, which could limit Pubco shareholders’ ability to bring certain actions or proceedings in a forum of their choosing.

The Amended and Restated Pubco Bye-laws provide that the Supreme Court of Bermuda will be, to the fullest extent permitted by law, the exclusive forum for any dispute that arises concerning the Companies Act or out of or in connection with the Amended and Restated Pubco Bye-laws, including any question regarding the existence and scope of any bye-law and/or whether there has been any breach of the Companies Act or the bye-laws by an officer or director (whether or not such a claim is brought in the name of a shareholder or in the name Pubco).

To the fullest extent permitted by law, the forum selection bye-law discussed above will apply to derivative actions or proceedings brought on behalf of Pubco and arising under the Securities Act or the Exchange Act, although we have been advised by the SEC that in the opinion of the SEC, the Pubco shareholders cannot waive compliance with federal securities laws and the rules and regulations thereunder. There is uncertainty as to whether a court would enforce such provision in connection with any such derivative action or proceeding arising under the Securities Act or the Exchange Act, and it is possible that a court could find the forum selection bye-law to be inapplicable or unenforceable.

This forum selection bye-law could limit the ability of Pubco shareholders to bring certain actions or proceedings involving disputes with Pubco or Pubco’s directors, officers and other employees in a forum of such Pubco shareholders’ choosing. If a court were to find the forum selection bye-law inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, Pubco may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect Pubco’s business and financial condition.

U.S. persons who own Pubco securities may have more difficulty in protecting their interests than U.S. persons who are shareholders of a U.S. corporation.

The Companies Act, which applies to Pubco, differs in some material respects from laws generally applicable to U.S. corporations and their shareholders. These differences include, but are not limited to, the manner in which directors must disclose transactions in which they have an interest, the rights of shareholders to bring class action and derivative lawsuits, the scope of indemnification available to directors and officers and provisions relating to amalgamations, mergers and acquisitions and takeovers. Holders of Pubco common shares may therefore have more difficulty protecting their interests than would shareholders of a corporation incorporated in a jurisdiction within the U.S.

Generally, the duties of directors and officers of a Bermuda company are owed to the company and not, in the absence of special circumstances, to the shareholders as individuals. Shareholders of Bermuda companies typically do not have rights to take action against directors or officers of the company and may only do so in limited circumstances. Class actions and derivative actions are typically not available to shareholders under Bermuda law. The Bermuda courts, however, would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result in the violation of the company’s memorandum of association or bye-laws. The Amended and Restated Pubco Bye-laws state that all disputes arising out of the Companies Act 1981 of Bermuda or out of or in connection with the Amended & Restated Pubco Bye-laws are subject to the exclusive jurisdiction of the Supreme Court of Bermuda. This would make it more difficult to make certain claims against Pubco or its directors or officers in jurisdictions outside of Bermuda, including the U.S. Additionally, the Amended and Restated Pubco Bye-laws contain a waiver by Pubco’s shareholders of any claim or right of action, both individually and on Pubco’s behalf, against any of Pubco’s directors or officers. The waiver applies to any action taken by an officer or director, or the failure of an officer or director to take any action, in the performance of his or her duties, except with respect to any matter involving any fraud or dishonesty on the part of the officer or director. This waiver limits the right of shareholders to assert claims against Pubco’s officers and directors unless the act or failure to act involves fraud or dishonesty.

Provisions in Pubco’s memorandum of association and the Amended and Restated Pubco Bye-laws may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for Pubco’s securities and could entrench management.

The Amended and Restated Pubco Bye-laws will contain provisions that may discourage unsolicited takeover proposals that shareholders of Pubco may consider to be in their best interests. Among other provisions, the staggered board of directors and Wasef Jabsheh’s director appointment rights may make it more difficult for Pubco’s shareholders to remove incumbent management and accordingly discourage transactions that otherwise could involve payment of a premium over prevailing market prices for Pubco’s securities. For so long as Wasef Jabsheh, together with his family and/or affiliates, own at least 10% of the issued and outstanding shares of Pubco, Wasef Jabsheh will be entitled to appoint two directors to the board of directors of Pubco. For so long as Wasef Jabsheh, together with his family and/or affiliates, own at least 5% of the issued and outstanding shares of Pubco, Wasef Jabsheh will be entitled to appoint one director to the board of directors of Pubco. Other anti-takeover provisions in the Amended and Restated Pubco Bye-laws include the ability of Pubco’s board of directors to issue preference shares with preferences and voting rights determined by the board without shareholder approval, the indemnification of Pubco’s officers and directors, the requirement that directors may only be removed from Pubco’s board of directors for cause, the provision that shareholders may take specified action by written consent only if such action is by unanimous written consent, the requirement for the affirmative vote of 66% of the directors then in office and holders of at least 66% of the voting shares to amend specified provisions in the Amended and Restated Pubco Bye-laws and the requirement that a business combination with a 15% shareholder must be approved by an affirmative vote of 66% of the voting shares owned by non-interested shareholders and the board of directors of Pubco. These provisions could also make it difficult for Pubco shareholders to take certain actions and limit the price investors might be willing to pay for Pubco’s securities.

As a “foreign private issuer” under the rules and regulations of the SEC, Pubco is permitted to, and will, file less or different information with the SEC than a company incorporated in the United States or otherwise subject to these rules, and will follow certain home country corporate governance practices in lieu of certain NASDAQ requirements applicable to U.S. issuers.

Pubco is and, after the consummation of the Business Combination will be, considered a “foreign private issuer” under the Exchange Act and is therefore exempt from certain rules under the Exchange Act. For example, Pubco is not required to file current reports on Form 8-K or quarterly reports on Form 10-Q, Pubco is exempt from the U.S. proxy rules which impose certain disclosure and procedural requirements for U.S. proxy solicitations and Pubco will not be required to file financial statements prepared in accordance with or reconciled to U.S. GAAP so long as its financial statements are prepared in accordance with IFRS as issued by the International Accounting Standards Board. Pubco is not required to comply with Regulation FD, which imposes restrictions on the selective disclosure of material information to shareholders, and Pubco’s officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions of Section 16 of the Exchange Act. In addition, Pubco is not required to file periodic reports and financial statements with the SEC as frequently or within the same time frames as U.S. companies with securities registered under the Exchange Act. Accordingly, after the Business Combination, if you continue to hold Pubco’s securities, you may receive less or different information about Pubco than you currently receive about Tiberius.

In addition, upon the approval of its listing application, as a “foreign private issuer” whose common shares will be listed on the Nasdaq Capital Market, Pubco is permitted to follow certain home country corporate governance practices in lieu of certain NASDAQ requirements. Unlike the requirements of NASDAQ, the corporate governance practice and requirements in Bermuda do not require Pubco to have a majority of independent directors; do not require Pubco to establish a nomination committee or a nomination committee consisting of only independent directors; do not require Pubco to have a compensation committee or a compensation committee consisting of only independent directors; and do not require Pubco to hold regular executive sessions of the board of directors where only independent directors shall be present. Such Bermuda home country practices may afford less protection to holders of Pubco’s common shares. Pubco intends to voluntarily comply with certain NASDAQ corporate governance requirements, including having a majority of independent directors and establishing compensation and nomination committees of the board, but it is not required to do so and may cease doing so at any time as long as it maintains its status as a “foreign private issuer.”

Pubco could lose its status as a “foreign private issuer” under current SEC rules and regulations if more than 50% of Pubco’s outstanding voting securities become directly or indirectly held of record by U.S. holders and one of

the following is true: (i) the majority of Pubco’s directors or executive officers are U.S. citizens or residents; (ii) more than 50% of Pubco’s assets are located in the United States; or (iii) Pubco’s business is administered principally in the United States. If Pubco loses its status as a foreign private issuer in the future, it will no longer be exempt from the rules described above and, among other things, will be required to file periodic reports and annual and quarterly financial statements as if it were a company incorporated in the United States (including preparation of financial statements in accordance with U.S. GAAP). If this were to happen, Pubco would likely incur substantial costs in fulfilling these additional regulatory requirements and members of Pubco’s management would likely have to divert time and resources from other responsibilities to ensuring these additional regulatory requirements are fulfilled.

Pubco could be or may become a passive foreign investment company, by reason of its subsidiaries failing to qualify as “qualified insurance corporations”, which also could result in other adverse U.S. federal income tax consequences.

A non-U.S. corporation will be considered a passive foreign investment company (a “PFIC”) for any taxable year if either at least 75% of its gross income for such taxable year is passive income or at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income. For purposes of the PFIC rules, a corporation is treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other corporation in which it owns, directly or indirectly, at least 25% (by value) of the stock (the “Look-Through Rule”). Accordingly, for purposes of these rules, Pubco will be treated as owning all the assets of IGI and as earning all of its income, and IGI will, in turn, be treated as owning all the assets of, and earning all the income of the two insurance companies through which it conducts its business (viz., IGI Bermuda (including the Labuan Branch) and IGI UK (together, the “Insurance Subs”)). Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business), passive assets generally include assets held for the production of such income, and gains from the disposition of passive assets are generally all included in passive income. Special rules apply, however, in determining whether the income of an insurance company is passive income for purposes of these rules. Specifically, income derived in the active conduct of an insurance business by a “qualified insurance corporation” is excluded from the definition of passive income, even though that income would otherwise be considered passive. Pubco expects that each of the Insurance Subs will for the current year be, and for foreseeable future years will continue to be, a qualified insurance corporation for purposes of the PFIC rules. Taking into account the income and assets of the Insurance Subs, which are treated as the income and assets of Pubco for purposes of the PFIC rules, and treating that income and assets as active, Pubco expects that less than 75% of its total income and that less than 50% of its total assets will be passive. Thus, Pubco expects that it will not be treated as a PFIC for the current year and does not expect to be so treated in foreseeable future years. However, the PFIC determination is factual in nature and is made annually. In particular, it will depend on the relative assets and insurance liabilities of each of the Insurance Subs and on the manner in which they conduct their businesses and are regulated. Accordingly, no assurance can be given that Pubco will not be a PFIC for the current year or will not become a PFIC in any future taxable year. A U.S. investor that owns Pubco common shares during any year in which Pubco is a PFIC will generally be subject to adverse U.S. federal income tax consequences. See “The Business Combination Proposal — Material United States Federal Income Tax Considerations — Certain U.S. Federal Income Tax Considerations of Owning Pubco Common Shares — Passive Foreign Investment Company (“PFIC”).”

In addition, under Section 7874 of the Code, a corporation created or organized outside the United States that acquires, directly or indirectly, substantially all of the assets held, directly or indirectly, by a U.S. corporation, may in certain circumstances be treated as a U.S. corporation, rather than treated as a foreign corporation, for U.S. federal income tax purposes, or may be subject to certain other adverse tax consequences. We do not expect these rules to apply to Pubco, notwithstanding its acquisition of Tiberius through the Merger, and we expect Pubco to be respected, for U.S. federal income tax purposes, as a foreign corporation. The rules under Section 7874 of the Code are complex, however, and their application to Pubco is not entirely free from doubt; whether they apply depends in part on the amount of Pubco’s income that is “passive” for purposes of the rules of Section 7874, which depends in turn on the amount of that income that is passive under the PFIC rules. Thus, our expectation that the rules of Section 7874 will not apply to Pubco is based on our expectation that each of the Insurance Subs will, as of the date of consummation of the Merger, be a qualified insurance corporation, so that their income will not be treated as passive, for purposes of the PFIC rules. As explained above, however, the qualification of the Insurance Subs is not entirely certain. Thus there can be no assurance that the IRS will not assert successfully that the rules of Section 7874 apply to Pubco, including with the result that Pubco is treated as a U.S. corporation for U.S. federal income tax purposes. If Pubco were to be treated

as a U.S. corporation for such purposes, which we do not expect, Pubco could be subject to substantial additional U.S. tax liability and its non-U.S. shareholders could be subject to U.S. withholding tax on any dividends.

Pubco will be deemed to be an “emerging growth company” and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, Pubco’s common shares may be less attractive to investors.

Pubco will be deemed to be an “emerging growth company” as defined in the JOBS Act and it intends to take advantage of some of the exemptions from reporting requirements that are available to emerging growth companies, including:

•        not being required to comply with the auditor attestation requirements in the assessment of Pubco’s internal control over financial reporting;

•        reduced disclosure obligations regarding executive compensation in periodic reports and registration statements; and

•        not being required to hold a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Pubco cannot predict if investors will find its common shares less attractive because it will rely on these exemptions. If some investors find Pubco common shares less attractive as a result, there may be a less active trading market for common shares and Pubco’s share price may be more volatile. Pubco may take advantage of these reporting exemptions until it is no longer an emerging growth company. Pubco will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the closing of Pubco’s initial public offering, (b) in which Pubco has total annual gross revenue of at least $1.07 billion, or (c) in which Pubco is deemed to be a large accelerated filer, which means the market value of Pubco common shares that is held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which Pubco has issued more than $1.0 billion in non-convertible debt during the prior three-year period.

Under Section 107(b) of the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. Given that Pubco currently reports and expects to continue to report under IFRS as issued by the IASB, it will not be able to use this extended transition period and, as a result, it will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required by the IASB.

Existing IGI shareholders will continue to exert significant influence over Pubco as a result of their shareholdings, and their interests may not be aligned with those of the other shareholders.

Following the Business Combination, existing IGI shareholders will own approximately 54% of Pubco’s issued and outstanding shares, assuming no redemptions by Tiberius stockholders, or 71% of Pubco’s issued and outstanding shares, assuming maximum redemption (in each case, based on IGI’s book value at June 30, 2019 and the redemption price of Tiberius Common Stock expected at Closing). The existing IGI shareholders will continue to be able to exercise a significant degree of influence over the outcome of certain matters requiring an ordinary resolution of Pubco shareholders including:

•        the appointment and removal of directors;

•        a change of control in Pubco, which could deprive shareholders of an opportunity to earn a premium for the sale of their shares over the then prevailing market price;

•        substantial mergers or other business combinations;

•        the acquisition or disposal of substantial assets;

•        the alteration of Pubco’s share capital;

•        amendments to Pubco’s organizational documents; and

•        the winding up of Pubco.

Risks Relating to the Insurance and Reinsurance Industry

If IGI’s underwriters fail to assess accurately the underwritten risks or fail to comply with internal guidelines on underwriting or their underwriting authority or if events or circumstances cause the underwriters’ risk assessment to be incorrect, IGI’s premiums may prove to be inadequate to cover the losses associated with such risks.

IGI’s underwriting results depend on whether the claims brought by policyholders are consistent with the assumptions and pricing models it uses in underwriting and pricing its insurance covers. It is not possible to predict with certainty whether a single risk or a portfolio of risks underwritten by IGI will result in a loss, or the timing and severity of any loss that does occur. If IGI’s underwriters fail to assess accurately the underwritten risks or fail to comply with internal guidelines on underwriting or their underwriting authority or if events or circumstances cause the underwriters’ risk assessment to be incorrect, IGI’s premiums may prove to be inadequate to cover the losses associated with such risks. Losses may also arise from events or exposures that are not anticipated when the coverage is priced. In addition to unanticipated events which increase losses beyond IGI’s expectations, IGI also faces the risk of the potential unanticipated expansion of its exposures, particularly in long-tail liability lines of business. Any failure by IGI to manage the risks that it underwrites could have a material adverse effect on IGI’s results of operations and financial condition.

The insurance and reinsurance industries are highly competitive; competitive pressures may result in fewer policies underwritten, lower premium rates, increased expense for customer acquisition and retention and less favorable policy terms and conditions.

IGI operates in highly competitive markets. Customers may evaluate IGI and its competitors on a number of factors, including financial strength, underwriting capacity, expertise, local presence, reputation, experience and qualifications of employees, client relationships, geographic scope of business, products and services offered (including ease of doing business over the electronic placement platforms), premiums charged, ratings assigned by independent rating agencies, contract terms and conditions and the speed of claims payment.

IGI’s competitors include independent reinsurance and insurance companies, subsidiaries or affiliates of established worldwide insurance companies, reinsurance departments of certain insurance companies and domestic and international underwriting operations. Some of these competitors have greater financial resources than IGI does and have established long term and continuing business relationships throughout the industry, which can be a significant competitive advantage. In addition, the lack of strong barriers to entry into the reinsurance business and the entry of alternative capital markets products and vehicles provide additional sources of insurance and reinsurance capacity and increased competition. IGI directly competes with large companies, smaller companies and other niche insurers and reinsurers.

IGI’s competitors vary by offered product line and covered territory. IGI also competes with new companies that enter the insurance and reinsurance markets, particularly companies with new or “disruptive” technologies or business models. Capital markets participants have created alternative products that are intended to compete with reinsurance products. Recently, the insurance industry has faced increased competition from new underwriting capacity, such as the investment of significant amounts of capital by pension funds, mutual funds, hedge funds and other sources of alternative capital primarily into the natural catastrophe insurance and reinsurance businesses. In addition, technology companies and other third parties have created, and may in the future create, technology-enabled business models, processes, platforms or alternate distribution channels that may adversely impact IGI’s competitive position.

The nature of the competition IGI faces may be affected by disruption and deterioration in global financial markets and economic downturns, as well as by governmental responses thereto. For example, (i) government intervention might result in capital or other support for IGI’s competitors, (ii) governments may provide insurance and reinsurance capacity in markets and to consumers that IGI targets or (iii) government intervention intended to protect consumers may restrict increases in premium rates.

Increased competition can result in fewer policies underwritten, lower premiums for the policies that are underwritten (over and above reductions due to favorable loss experience), increased expenses associated with acquiring and retaining business and policy terms and conditions that are less advantageous to IGI than it was able to obtain historically or that may be available to IGI’s competitors.

Consolidation in the insurance and reinsurance industry could adversely impact IGI and Pubco.

The insurance and reinsurance industry, including IGI’s competitors, customers and insurance and reinsurance brokers, has been consolidating. There has been a large amount of merger and acquisition activity in the insurance and reinsurance sector in recent years which may continue. IGI may experience increased competition as a result of that consolidation, with larger entities having enhanced market power. Increased competition could result in fewer submissions, lower premium rates, less favorable policy terms and conditions and greater costs of customer acquisition and retention.

Should the market continue to consolidate, competitors may try to use their enhanced market power to obtain a larger market share through increased line sizes or through price competition. If competitive pressures reduce IGI’s prices, this could in turn lead to reduced premiums and a reduction in expected earnings. As the insurance industry consolidates, competition for customers will become more intense and the importance of sourcing and properly servicing each customer will become greater. IGI could incur greater expenses relating to customer acquisition and retention, further reducing its operating margins. In addition, insurance companies that merge may be able to spread their risks across a larger capital base so that they require less reinsurance. The number of companies offering reinsurance to competitors may decline. Reinsurance intermediaries could also continue to consolidate, potentially adversely impacting IGI’s ability to access business and distribute its products. IGI could also experience more robust competition from larger, better capitalized competitors. As a result of the consolidation in the industry, IGI may experience rate declines and possibly write less business. Any of the foregoing could adversely affect IGI’s business, results of operations, growth and prospects.

IGI’s operating results are affected by the cyclicality of the insurance and reinsurance industry.

The insurance and reinsurance industry historically has been cyclical, with significant fluctuations in premium rates and operating results due to competition, the frequency and/or severity of catastrophic events, levels of underwriting capacity in the industry, changes in legislation, case law and prevailing concepts of liability, general economic and social conditions and other factors. Insurance and reinsurance underwriting capacity is related to prevailing premium rates, the level of insured losses and the level of surplus capacity that, in turn, might fluctuate in response to changes in return on investments earned in the insurance and reinsurance industry and other factors. These cycles, as well as other factors that influence aggregate supply and demand for insurance and reinsurance products, are outside of IGI’s control.

This cyclicality has produced periods characterized by intense price competition and widening coverage offerings due to excess underwriting capacity (a so-called “soft market”), with each line of business experiencing its own cycle. Where a line of business experiences soft market conditions, IGI may fail to obtain new insurance business in that line of business at the desired premium rates. In addition, the cycle may fluctuate as a result of changes in economic, legal, political and social factors. Since cyclicality is due in large part to the collective actions of insurers, reinsurers and general economic conditions and the occurrence of unpredictable events, IGI cannot predict the timing or duration of changes in the market cycle. If IGI fails to manage the cyclical nature of the insurance business, IGI’s operating results and financial condition could be materially adversely affected.

IGI operates a diversified business, writing insurance in a variety of lines of business and geographic markets. Different lines of business and different geographic markets can experience their own cycles and, therefore, the impact of various cycles will depend in part on the sectors of the insurance and reinsurance industry, as well as the geographic markets, in which IGI operates. In addition, increases in the frequency and severity of losses suffered by insurers can significantly amplify these cycles. The effects of such cyclicality could have a material adverse effect on IGI’s financial condition, results of operations or cash flows.

Interest rate movements can also contribute to cyclicality in insurers’ underwriting results. In a high-interest rate environment, increased investment returns may reduce insurers’ required contribution from underwriting performance to achieve an attractive overall return. This may result in a less-disciplined approach to underwriting in the market generally as some underwriters could be inclined to offer lower premium rates to generate more business. IGI may therefore have to accept lower rates or broader coverage terms in order to remain competitive in the market, with the result that IGI’s premiums may be inadequate to cover the losses associated with such risks.

Furthermore, a low-interest rate environment, with reduced investment market returns, could encourage alternative capital providers to enter the insurance market in order to achieve higher returns. This could have the effect of increasing the level of competition in the insurance market and applying pressure on premiums, which could affect the gross written premium (“GWP”) that IGI is able to generate.

IGI may from time to time, as a result of the cyclicality of certain lines of business, decide to concentrate on fewer lines of business. As a consequence, IGI may be exposed to additional risk and may be required to hold more regulatory capital on the basis that the business, and hence the associated risk, is more concentrated, which in turn may affect the efficiency of IGI’s business and have a material adverse effect on IGI’s financial condition and results of operations.

If market conditions cause reinsurance to be more costly or unavailable, IGI may be required to bear increased risks or reduce the level of IGI’s underwriting commitments.

As part of IGI’s overall risk and capacity management strategy, IGI purchases reinsurance for certain amounts of risk underwritten by its insurance company subsidiaries, especially catastrophe risks and those risks with relatively high policy limits. IGI also purchases reinsurance on risks underwritten by others which IGI reinsures. Market conditions beyond IGI’s control determine the availability and cost of the reinsurance protection IGI seeks to purchase, which may affect the level of IGI’s business and profitability. IGI’s reinsurance contracts are generally subject to annual renewal, and IGI may be unable to maintain its current reinsurance contracts or to obtain other reinsurance contracts in adequate amounts and at favorable rates. In addition, IGI may be unable to obtain reinsurance on terms acceptable to it relating to certain lines of business that IGI intends to begin underwriting. If IGI is unable to renew its expiring contracts or to obtain new reinsurance contracts, either IGI’s net exposures would increase or, if IGI is unwilling to bear an increase in net exposures, IGI would have to reduce the level of its underwriting commitments, especially catastrophe exposed risks.

IGI’s insurance and reinsurance subsidiaries are subject to extensive insurance laws and regulations. Any failure to comply with existing regulations or material changes in the regulation of IGI’s operations could have a material adverse effect on IGI.

IGI’s insurance subsidiaries are subject to the laws and regulations of a number of jurisdictions worldwide, including Bermuda, the UK, Malaysia, Jordan, Morocco and the UAE. Existing laws and regulations, among other things, limit the amount of dividends that can be paid by IGI’s insurance subsidiaries, prescribe solvency and capital adequacy standards, impose restrictions on the amount and type of investments that can be held to meet solvency and capital adequacy requirements, require the maintenance of reserve liabilities, and require pre-approval of acquisitions and certain affiliate transactions. Failure to comply with these laws and regulations or to maintain appropriate authorizations, licenses, and/or exemptions under applicable laws and regulations may cause governmental authorities to preclude or suspend IGI’s insurance subsidiaries from carrying on some or all of their activities, place one or more of them into rehabilitation or liquidation proceedings, impose monetary penalties or other sanctions on them or IGI’s affiliates, or commence insurance company delinquency proceedings against IGI’s insurance subsidiaries.

The application of these laws and regulations could affect IGI’s liquidity and ability to pay dividends, interest and other payments on securities, as applicable, and could restrict IGI’s ability to expand its business operations through acquisitions of new insurance subsidiaries. Furthermore, compliance with legal and regulatory requirements may result in significant expenses, which could have a negative impact on IGI’s profitability. IGI may not have or maintain all required licenses and approvals in every jurisdiction in which it operates and may not be able to fully comply with the wide variety of laws and regulations applicable to it or the relevant authority’s interpretation of such laws and regulations. Some regulatory authorities have relatively broad discretion to grant, renew or revoke licenses and approvals. If IGI does not have the requisite licenses and approvals or does not comply with applicable regulatory requirements, the insurance regulatory authorities could preclude or temporarily suspend IGI from carrying on some or all of its business activities or impose monetary penalties on IGI. Also, changes in the level of regulation of the insurance industry in the jurisdictions in which IGI operates, or changes in laws or regulations themselves or interpretations by regulatory authorities, may further restrict the conduct of IGI’s business. In some instances, IGI follows practices based on its interpretations of regulations or practices that it believes may be generally followed by the industry. These practices may turn out to be different from the interpretations of regulatory authorities. These types of actions could have a material adverse effect on IGI’s business.

IGI may not be able to maintain necessary licenses, permits, authorizations or accreditations in jurisdictions where IGI and its subsidiaries currently engage in business or obtain them in new jurisdictions, or may be able to do so only at significant cost. In addition, IGI may not be able to comply fully with, or obtain appropriate exemptions from, the wide variety of laws and regulations applicable to insurance or reinsurance companies. Although IGI has in place systems and controls designed to comply with applicable laws and regulations, there can be no assurance that

IGI, its employees, or its agents acting on IGI’s behalf are in full compliance with all applicable laws and regulations or their interpretation by the relevant authorities and, given the complex nature of the risks, it may not always be possible for IGI to ascertain compliance with such laws and regulations. Failure to comply with or to obtain appropriate authorizations and/or exemptions under any applicable laws or regulations could subject IGI to investigations, criminal sanctions or civil remedies, including fines, injunctions, loss of an operating license, reputational consequences, and other sanctions, all of which could have a material adverse effect on IGI’s business. Changes in the laws or regulations to which IGI and its subsidiaries are subject could also have a material adverse effect on IGI’s business. In addition, in most jurisdictions, government regulatory authorities have the power to interpret or amend applicable laws and regulations, and have discretion to grant, renew or revoke licenses and approvals IGI needs to conduct its activities. Such authorities may require IGI to incur substantial costs in order to comply with such laws and regulations.

IGI’s continued expansion into new businesses and markets has brought about additional requirements. While IGI believes that it has adopted appropriate risk management and compliance programs, compliance risks will continue to exist, particularly as IGI becomes subject to new rules and regulations. Any failure to comply with applicable laws, regulations and government interpretations of such laws and regulations could also subject IGI to fines, penalties, equitable relief and changes to its business practices. Compliance with applicable laws and regulations is time consuming and personnel-intensive. Changes in these laws and regulations could materially increase IGI’s direct and indirect compliance costs and other expenses of doing business and have a material adverse effect on IGI’s results of operations and financial condition.

IGI is subject to extensive regulatory supervision and may, from time to time, be subject to inquiries or investigations that could result in fines, sanctions, variation or revocation of permissions and authorizations, reputational damage or loss of goodwill.

The conduct of the insurance and reinsurance business is subject to significant legal and regulatory requirements as well as governmental and quasi-governmental supervision in the various jurisdictions in which the IGI group operates. IGI’s business activities are regulated by the BMA in its Bermuda operations, the Prudential Regulation Authority and Financial Conduct Authority in its UK operations, the Jordan Insurance Directorate in its Jordanian operations, the Labuan Financial Services Authority in its operations in Malaysia, the Dubai Financial Services Authority in its operations in Dubai and the Casablanca Financial City for its operations in Morocco. This supervision and regulation is generally intended for the benefit of policyholders rather than shareholders or other investors. Among other things, the insurance laws and regulations applicable to IGI may:

•        require the maintenance of certain solvency levels;

•        restrict agreements with large revenue-producing agents;

•        require obtaining licenses or authorizations from regulators;

•        regulate transactions, including transactions with affiliates and intra-group guarantees;

•        in certain jurisdictions, restrict the payment of dividends or other distributions;

•        require the disclosure of financial and other information to regulators;

•        impose restrictions on the nature, quality and concentration of investments;

•        regulate the admissibility of assets and capital;

•        provide for involvement in the payment or adjudication of catastrophe or other claims beyond the terms of the policies; and

•        establish certain minimum operational requirements or customer service standards such as the timeliness of finalized policy language or lead time for notice of non-renewal or changes in terms and conditions.

As part of regular, mandated risk assessments, regulators may take steps that have the effect of restricting the business activities of IGI, which may in turn have a material impact on the ability of IGI to achieve growth objectives and earnings targets. For example, each regulated insurance business IGI operates is subject to a number of restrictions on assets it may hold under relevant regulations and tax rules, and regulators may, as has happened in the past, alter such restrictions, thus potentially affecting IGI’s investment policy and any associated projected income or growth

return from its investments. In addition, based on the perceived risk profile of IGI, regulators may require additional regulatory capital to be held by IGI (including as part of guidance provided by the regulator to IGI on a confidential basis), which, among other things, may affect the business IGI can write and the amount of dividends IGI is able to pay out.

In addition, legislation and other regulatory initiatives taken or which may be taken in response to conditions in the financial markets, global supervision and other factors may lead to additional regulation of the insurance industry in the coming years.

The insurance and reinsurance industries have experienced substantial volatility as a result of investigations, litigation and regulatory activity by various insurance, governmental and enforcement authorities, concerning various practices within the insurance and reinsurance industry. If IGI or any of its subsidiaries were to be found to be in breach of any existing or new laws or regulations now or in the future, IGI would be exposed to the risk of intervention by regulatory authorities, including investigation and surveillance, and judicial or administrative proceedings. In addition, IGI’s reputation could suffer and IGI could be fined or prohibited from engaging in some or all of its business activities or could be sued by counterparties, as well as forced to devote significant resources to cooperate with regulatory investigations, any of which could have a material adverse effect on IGI’s results of operations.

Any future regulatory changes, litigation or failure to comply with applicable laws could result in the imposition of significant restrictions on IGI’s ability to do business, and could also result in suspensions, injunctions, monetary damages, fines or other sanctions, any or all of which could adversely affect IGI’s financial condition and results of operations. These events, if they occur, could affect the competitive market and the way IGI conducts its business and manages its capital and could result in lower revenues and higher costs. As a result, such actions could have a material adverse effect on IGI’s results of operations and financial condition.

Increasing barriers to free trade and the free flow of capital and fluctuations in the financial markets could adversely affect the insurance and reinsurance industry and IGI’s business.

Recent political initiatives to restrict free trade and close markets, such as Brexit (as defined below) and the Trump administration’s decision to withdraw from the Trans-Pacific partnership and potentially renegotiate or terminate existing bilateral and multilateral trade arrangements, could adversely affect the insurance and reinsurance industry and IGI’s business. The insurance and reinsurance industries are disproportionately impacted by restraints on the free flow of capital and risk because the value it provides depends on its ability to globally diversify risk. With respect to Brexit, IGI is in the process of creating a new insurance subsidiary in Belgium in order to make sure it continues to have access to the EU market no matter how Brexit evolves.

In addition, prolonged and severe disruptions in the overall public and private debt and equity markets, such as occurred during 2008, could result in significant realized and unrealized losses. Although financial markets have significantly improved since 2008, they could deteriorate in the future. There could also be disruption in individual market sectors, such as occurred in the energy sector in recent years.

Further, global markets may be affected by the outbreak of epidemics such as the novel coronavirus (nCoV). In the event that countries where IGI operates adopt certain hygiene measures, including quarantining visitors from places where contagious diseases are rampant, such restrictive measures can adversely affect IGI’s business. Any prolonged restrictive measures in order to control a contagious disease or other adverse public health developments in our targeted markets may have a material and adverse effect on our business operations. At this point, the extent to which the coronavirus may impact our results is uncertain.

Given ongoing global economic uncertainties, evolving market conditions may affect IGI’s results of operations, financial position and capital resources. In the event that there is additional deterioration or volatility in financial markets or general economic conditions, IGI’s results of operations, financial position, capital resources and competitive landscape could be materially and adversely affected.

Legislation enacted in Bermuda as to economic substance may affect our operations.

Pursuant to the Economic Substance Act 2018 (as amended) of Bermuda and its related regulations (together, the “ES Act”) that came into force on January 1, 2019, a registered entity other than an entity which is resident for tax purposes in certain jurisdictions outside Bermuda (“non-resident entity”) that carries on as a business any one or more

of the “relevant activities” referred to in the ES Act must comply with economic substance requirements. The ES Act may require in-scope Bermuda entities which are engaged in such “relevant activities” to be directed and managed in Bermuda, have an adequate level of qualified employees in Bermuda, incur an adequate level of annual expenditure in Bermuda, maintain physical offices and premises in Bermuda or perform core income-generating activities in Bermuda. The list of “relevant activities” includes carrying on any one or more of the following activities: banking, insurance, fund management, financing, leasing, headquarters, shipping, distribution and service center, intellectual property and holding entities. The ES Act could affect the manner in which IGI operates its business, which could adversely affect its business, financial condition and results of operations. For purposes of the ES Act, we believe that Pubco would be deemed to be a “pure equity holding company”. The economic substance requirements for a “pure equity holding company” are less onerous than those for entities which are carrying out other relevant activities (pure equity holding entities are subject to minimum economic substance requirements). As such, and as long as it does not carry on any other “relevant activity”, we would not expect to be required to take additional actions beyond the minimum economic substance requirements for the purposes of compliance with the ES Act. However, our expectations could change as the ES Act is likely to be subject to further amendment and guidance on the interpretation of the ES Act remains awaited. With respect to IGI Bermuda, for the purposes of the ES Act, IGI Bermuda is carrying on the relevant activity of “insurance”. IGI Bermuda’s compliance with its regulatory requirements under the Insurance Act 1978 of Bermuda and related regulations will assist in evidencing its compliance with the economic substance requirements under the ES Act, but may not be conclusive. Pending further amendments to the ES Act and the issuance of additional sector-specific guidance notes by the Bermuda Government, IGI Bermuda may need to continue to enhance its infrastructure in Bermuda to ensure its compliance with its economic substance requirements under the ES Act and this may result in, among other things, some additional operational cost.

Potential government intervention in the insurance industry and instability in the marketplace for insurance products could hinder IGI’s flexibility and negatively affect the business opportunities that may be available to it in the market.

Government intervention in the insurance industry and the possibility of future government intervention have created uncertainty in the insurance and reinsurance markets. Governmental authorities worldwide have become increasingly interested in potential risks posed by the insurance industry as a whole to commercial and financial systems in general, and there could be increased regulatory intervention in the insurance and reinsurance industries in the future.

Government regulators are generally concerned with the protection of policyholders to the exclusion of other constituencies, including shareholders of insurers. While IGI cannot predict the exact nature, timing or scope of possible governmental initiatives, such proposals could adversely affect its business by, among other things:

•        providing insurance and reinsurance capacity in markets and to consumers that IGI targets;

•        requiring IGI’s participation in industry pools and guaranty associations;

•        expanding the scope of coverage under existing policies (for example, following large disasters);

•        further regulating the terms of insurance and reinsurance policies;

•        mandating that insurers provide coverage for areas such as terrorism, where insurance might otherwise be difficult to obtain; or

•        disproportionately benefiting the companies of one country over those of another.

Government intervention has in the recent past taken the form of financial support of certain companies in the insurance and reinsurance industry. Governmental support of individual competitors can lead to increased pricing pressure and a distortion of market dynamics. The insurance industry is also affected by political, judicial and legal developments that may create new and expanded theories of liability, which may result in unexpected claims frequency and severity and delays or cancellations of products and services by insureds, insurers and reinsurers which could adversely affect IGI’s business.

European legislation known as “Solvency II” was introduced with effect from January 1, 2016 and governs the prudential regulation of insurers and reinsurers. Solvency II requires insurers and reinsurers in Europe to meet risk-based solvency requirements. Solvency II covers three main areas: (i) the valuation of assets and liabilities on a Solvency

II economic basis and risk-based solvency and capital requirements; (ii) governance requirements effecting the key functions of compliance, internal audit, actuarial and risk management; and (iii) new supervisory legal entity and group reporting and disclosure requirements, including public disclosures. Solvency II imposes governance requirements on groups with insurers and/or reinsurers operating in the European Economic Area and imposes significant requirements for EU-based regulated companies which require substantial documentation and implementation effort. A number of European Commission delegated acts and technical standards have been adopted, which set out more detailed requirements based on the overarching provisions of Solvency II. However, further delegated acts, technical standards and guidance are likely to be published on an ongoing basis.

The BMA has also implemented and imposed additional requirements on the commercial insurance companies it regulates, driven, in large part, by Solvency II. The European Commission has adopted a decision concluding that Bermuda meets the full equivalence criteria under Solvency II.

Additionally, governments and regulatory bodies may take unpredictable action to ensure continued supply of insurance, particularly where a given event leads to withdrawal of capacity from the market. For example, regulators may seek to force IGI to offer certain covers to (re)insureds, constrain IGI’s flexibility to apply certain terms and conditions or constrain IGI’s ability to make changes to the pricing of its contracts. There can be no assurance as to the effect that any such governmental or regulatory actions will have on the financial markets generally or on IGI’s competitive position, business and financial condition.

IGI cannot predict the exact nature, timing or scope of any possible governmental initiatives and any such proposals could adversely affect IGI’s business. IGI may not be able to comply fully with, or obtain desired exemptions from, revised statutes, regulations and policies that currently, or may in the future, govern the conduct of its business. Failure to comply with, or to obtain desired authorizations and/or exemptions under, any applicable laws could result in restrictions on IGI’s ability to do business or undertake activities that are regulated in one or more of the jurisdictions in which it operates and could subject IGI to fines and other sanctions.

Claims arising from catastrophic events are unpredictable and could be severe.

IGI’s operations expose it to claims arising out of unpredictable natural and other catastrophic events, such as hurricanes, windstorms, hailstorms, tornadoes, tsunamis, severe winter weather, earthquakes, floods, fires, explosions, political unrest, drilling, mining and other industrial accidents, cyber events and terrorism. In addition to the nature of the property business, economic and geographic trends affecting insured property, including inflation, property value appreciation and geographic concentration, tend to generally increase the size of losses from catastrophic events over time.

Actual losses from catastrophic events may vary materially from estimates due to the inherent uncertainties in making such determinations resulting from several factors, including potential inaccuracies and inadequacies in the data provided by clients, brokers and ceding companies, the modeling techniques and the application of such techniques, the contingent nature of business interruption exposures, the effects of any resultant demand surge on claims activity and attendant coverage issues.

The incidence and severity of catastrophes are inherently unpredictable and IGI’s losses from such catastrophes could be substantial. The extent of losses from such catastrophes is a function of the number, the frequency and severity of events, the total amount of insured exposure in the areas affected, the effectiveness of IGI’s catastrophe risk management program, and the adequacy of IGI’s reinsurance coverage. Increases in the value and concentrations of insured property and demographic changes more broadly, the effects of inflation and changes in weather patterns may increase the frequency or severity of claims from catastrophic events in the future. IGI may from time to time issue preliminary estimates of the impact of catastrophic events that, because of uncertainties in estimating certain losses, need to be updated as more information becomes available.

IGI’s most significant catastrophe exposures are set forth below:

Natural catastrophes.    The occurrence of natural catastrophes is inherently uncertain. Generally, over the past decade, insured losses for catastrophes have increased, due principally to weather-related catastrophes. The increasing concentrations of economic activities and people living and working in areas exposed to natural catastrophes have resulted in increased exposure for insurance providers. Increasing insurance penetration, growing technological vulnerability and higher property values have further compounded the insurance industry’s exposure. A series of

extreme weather events resulted in one of the most expensive years for natural catastrophes in 2017. Significant natural catastrophes affecting IGI in the recent past have included Hurricane Maria, Hurricane Irma and the September 2017 earthquake in Mexico. IGI’s most significant claims relating to natural catastrophes, net of reinsurance, during the recent past have included claims relating to Cyclone Mekunu in Oman in 2018, Typhoon Jebi in Japan in 2018 and the 2019 earthquake in Papua New Guinea, which amounted to gross claims of $24.2 million and net claims of $11.6 million, respectively. Possible effects of natural catastrophes could be compounded by climate change, severe weather, floods and drought, as well as adverse agricultural yields.

Man-made disasters.    Complex technology intersecting with increased population density, infrastructure and higher rates of utilization of natural resources increase the likelihood and the magnitude of catastrophic man-made events caused by accident or negligence. Man-made disasters, as well as disasters that pose significant risk to the environment, bear particularly high potential for losses. Due to the uncertainty of the occurrence of, and loss from, man-made disasters, unexpected large losses could have a material adverse effect on IGI’s financial condition, results of operations and cash flow. Man-made disasters such as oil spills from offshore drilling could give rise not only to claims due to the damage caused by such events but also claims arising from governmental sanctions and civil litigation.

Terrorism.    IGI faces risks related to terrorist and criminal acts on a significant scale (including acts intended to cause strain on financial and other critical infrastructures, which, given the state of reliance on digital technology, could be triggered by cyber threats). IGI’s exposure to terrorism and criminal acts arises mainly from the political violence line of business. However, conventions in the market limit or exclude certain terrorist acts in a number of lines of business. IGI closely monitors the amount and types of coverage it provides for terrorism risk under treaties. If IGI believes it can reasonably evaluate the risk of loss and charge an appropriate premium for such risk, it will underwrite terrorism exposure on a stand-alone basis. IGI generally seeks to exclude terrorism from non-terrorism policies.

Cyber.    IGI does not currently write explicit cyber insurance and seeks wherever possible to exclude losses resulting from cyber related events from its coverages. Notwithstanding this, IGI does have a degree of potential exposure to losses arising following cyber-attacks including where cover has been explicitly written back in to policies and exposure to ‘silent cyber’ risks, meaning risks and potential losses associated with policies where cyber risk is neither specifically included nor excluded in the policies. Even in cases where IGI attempts to exclude cybersecurity and certain other similar risks from some coverage written by it, IGI may not be successful in doing so.

Systemic events.    In addition to natural and man-made disasters, systemic financial risks have the potential to cause significant economic disruptions in a variety of geographies and sectors, due to the interconnectedness of the global economy, which could give rise to significant claims. The 2008 global financial crisis was one such event. In this context, such economic disruptions could adversely impact certain of the lines of business to which IGI is exposed including (but not necessarily limited to) its casualty and financial institutions lines of business.

In general, while IGI holds capital to cover catastrophes and uses geographic and line of business diversification and reinsurance to manage its exposure to risks, these measures may not be sufficient were IGI to face significant claims in excess of expected losses. Claims from catastrophic events could reduce IGI’s earnings and cause substantial volatility in its results of operations for any given period. A catastrophic event or multiple catastrophic events could also adversely affect IGI’s financial condition and its capital position. To meet its obligations with respect to claims from catastrophic events, IGI may be forced to liquidate some of its investments rapidly, which may involve selling a portion of its investments into a depressed market, which would decrease IGI’s returns from investments and could strain its capital position. IGI’s ability to write new insurance policies could also be impacted as a result of corresponding reductions in its capital. Any of these occurrences could have a material adverse effect on IGI’s results of operations and its financial condition.

Additionally, to help assess IGI’s exposure to losses from catastrophes IGI uses computer-based models which simulate multiple scenarios using a variety of assumptions. These models are developed in part by third party vendors and their effectiveness relies on the numerous inputs and assumptions contained within them, including, but not limited to, scientific research, historical data, exposure data provided by insureds and reinsureds, data on the terms and conditions of insurance policies and the professional judgment of IGI employees and other industry specialists. While the models have evolved considerably over time, they may not necessarily accurately measure the statistical distribution of potential future losses due to the inherent limitations of the inputs and assumptions on which they rely. These limitations are evidenced by significant variation in the results obtained from different external vendor natural

catastrophe models, material changes in model results over time due to refinement of the underlying data elements and assumptions and the uncertain predictive capability and performance of models over longer time intervals.

Due to the foregoing, it is possible that a catastrophic event or multiple catastrophic events could produce significant losses and have a material adverse effect on Pubco’s business, results of operations and financial condition.

Changing climate conditions may increase the frequency and severity of catastrophic events and thereby adversely affect Pubco’s business, financial condition and results of operations.

Over the past several years, changing weather patterns and climatic conditions, such as global warming, appear to have contributed to the unpredictability, frequency and severity of natural disasters and created additional uncertainty as to future trends and exposures. Although the loss experience of catastrophe insurers and reinsurers has historically been characterized as low frequency, climate change increases the frequency and severity of extreme weather events, such as hurricanes, tornadoes, windstorms, floods and other natural disasters. Many sectors to which IGI provides insurance and reinsurance coverage might be affected by climate change. The increased frequency and severity of extreme weather events could make it more difficult for IGI to predict and model catastrophic events, reducing its ability to accurately price its exposure to such events and mitigate its risks.

The effects of global warming and climate change cannot be predicted and may aggravate potential loss scenarios, risk modelling and financial performance. Increasing global average temperatures may continue in the future and could impact IGI’s business in the long-term. Claims for catastrophic events, or an unusual frequency of smaller losses in a particular period, could expose IGI to large losses, cause substantial volatility in its results of operations and could have a material adverse effect on its ability to write new business. Furthermore, climate change could lead to severe weather events spreading to parts of the world that have not previously experienced extreme weather conditions. Any of these occurrences may decrease the accuracy of IGI’s underwriting models and may result in IGI mispricing risk when writing its policies.

If climate change results in an increase in the frequency and severity of weather-related catastrophes, IGI may experience additional catastrophe-related losses or disruptions, which may be material. Additionally, IGI cannot predict how legal, regulatory and/or social responses to concerns around global climate change may impact its business. Although IGI attempts to manage its exposure to such events through the use of underwriting controls, risk models, and the purchase of third party reinsurance, catastrophic events are inherently unpredictable and the actual nature of such events when they occur could be more frequent or severe than contemplated in IGI’s pricing and risk management expectations. As a result, the occurrence of one or more catastrophic events could have an adverse effect on IGI’s results of operations and financial condition.

IGI’s investment portfolio and political risk underwriting exposures may be materially adversely affected by global climate change regulation and other factors.

World leaders met at the 2015 United Nations Climate Change Conference in December 2015 in Paris and agreed to limit global greenhouse gas emissions in the atmosphere to a level which would not increase the average global temperature by more than 2° Celsius, with an aspiration of limiting such increase to 1.5° Celsius (the “Paris Agreement”). In order for governments to achieve their existing and future international commitments to limit the concentration of greenhouse gases under the Paris Agreement, there is widespread consensus in the scientific community that a significant percentage of existing proven fossil fuel reserves must not be consumed. In addition, divestment campaigns, which call on asset owners to divest from direct ownership of commingled funds that include fossil fuel equities and bonds, likewise signal a change in society’s attitude towards the social and environmental externalities of doing business.

The U.S. Government confirmed in 2018 that it would cease participating in the Paris Agreement, which may create further uncertainty regarding investment and valuation for both the fossil fuel and renewable sectors. In accordance with the Paris Agreement, the earliest possible effective withdrawal date by the United States from the Paris Agreement cannot be before November 4, 2020.

As a result of the above, energy companies and other companies engaged in the production or storage of fossil fuels may experience unexpected or premature devaluations or write-offs of their fossil fuel reserves. A material change in the asset value of fossil fuels or the securities of energy companies and companies in these other sectors may therefore materially adversely affect IGI’s investment portfolio and IGI’s results of operations and financial condition.

The effects of emerging claim and coverage issues, such as (but not limited to) bad faith claims or disputed policy terms, on IGI’s business are uncertain.

As industry practices and economic, legal, judicial, social, political, technological and environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge, including new or expanded theories of liability. Claim and coverage issues can arise when the application of insurance policy language to potentially covered claims is unclear or disputed by the parties. When such issues emerge they may adversely affect IGI’s business by extending coverage beyond IGI’s underwriting intent or increasing the number or size of claims. In some instances, these coverage changes may not become apparent until after IGI has issued insurance contracts that are affected by such changes. As a result, the full extent of IGI’s liability under insurance policies may not be known for many years after the policies are issued. Emerging claim and coverage issues could therefore have an adverse effect on IGI’s operating results and financial condition. In particular, IGI’s exposure to casualty insurance lines increases IGI’s potential exposure to this risk due to the uncertainties of expanded theories of liability and the “long-tail” nature of these lines of business.

These issues may adversely affect IGI’s business by either extending coverage beyond IGI’s underwriting intent or by increasing the frequency and/or severity of claims. In some instances, these changes may not become apparent until sometime after IGI has issued the insurance or reinsurance contracts that are affected by the changes. In addition, IGI’s actual losses may vary materially from its current estimate of the loss based on a number of factors. Examples of emerging claims and coverage issues include, but are not limited to:

•        judicial expansion of policy coverage and a greater propensity to grant claimants more favorable amounts and the impact of new theories of liability;

•        plaintiffs targeting insurers, including IGI, in purported class action litigation relating to claims-handling and other practices;

•        social inflation trends, including higher and more frequent claims, more favorable judgments and legislated increases;

•        medical developments that link health issues to particular causes, resulting in liability claims;

•        claims relating to unanticipated consequences of current or new technologies, including cyber security related risks;

•        claims relating to potentially changing climate conditions; and

•        increased claims due to third party funding of litigation.

These or other changes could impose new financial obligations on IGI by extending coverage beyond its underwriting intent or otherwise require IGI to make unplanned modifications to the products and services that it provides, or cause the delay or cancellation of products and services that it provides.

The monetary impact of certain claims may be difficult to predict or ascertain upon inception and potential losses from such claims can be significant. For example, the full extent of IGI’s liability and exposure from claims of bad faith is not ascertainable until the claim has been presented and investigated. As such, a significant award in monetary terms on the basis of bad faith could adversely affect IGI’s financial condition or operating results.

With respect to IGI’s casualty and specialty reinsurance operations, these legal and social changes and their impact may not become apparent until some time after their occurrence. For example, IGI could be deemed liable for losses arising out of a matter which IGI had not anticipated or had attempted to contractually exclude. Potential efforts by IGI to exclude such exposures could, if successful, reduce the market’s acceptance of IGI’s related products. The full effects of these and other unforeseen emerging claim and coverage issues are extremely hard to predict. As a result, the full extent of IGI’s liability under its coverages may not be known for many years after a contract is issued.

In addition, the potential passage of new legislation designed to expand the right to sue, to remove limitations on recovery, to extend the statutes of limitations or otherwise to repeal or weaken tort reforms could have an adverse impact on IGI’s business. The effects of unforeseen developments or substantial government intervention could adversely impact IGI’s ability to achieve its goals. The effects of these and other unforeseen emerging claim and coverage issues are difficult to predict and could harm IGI’s business and materially and adversely affect IGI’s results of operations.

Risks Relating to the Business and Operations of IGI

A prolonged recession or a period of significant turmoil in international financial markets could adversely affect IGI’s business, liquidity and financial condition and its share price.

In recent years, global financial markets have been characterized by volatility and uncertainty. Unfavorable economic conditions could increase IGI’s funding costs, limit IGI’s access to the capital markets or make credit harder to obtain. Uncertainties in the financial and commodity markets may also affect IGI’s counterparties which could adversely affect their ability to meet their obligations to IGI.

Deterioration or volatility in the financial markets or general economic and political conditions could result in a prolonged economic downturn or trigger another recession and IGI’s operating results, financial position and liquidity could be materially and adversely affected. Further, unfavorable economic conditions could have a material adverse effect on certain of the lines of business IGI writes, including, but not limited to, political risks and professional liability.

International financial market disruptions such as the ones experienced in the last global financial crisis in 2008, along with the possibility of a prolonged recession, may potentially affect various aspects of IGI’s business, including the demand for and claims made under its products, counterparty credit risk, the ability of IGI’s customers, counterparties and others to establish or maintain their relationships with IGI, IGI’s ability to access and efficiently use internal and external capital resources and IGI’s investment performance. Volatility in the U.S. and other securities markets may also adversely affect IGI’s share price. Depending on future market conditions, IGI could incur substantial realized and unrealized losses in future periods, which may have an adverse impact on its results of operations, financial condition, credit ratings, insurance subsidiaries’ capital levels and its ability to access capital markets.

A deterioration in macroeconomic, political and other conditions, particularly in select parts of Europe, Central and South America, the Middle East and Africa, could adversely impact IGI’s financial performance.

IGI is an international business and is affected by economic, political and other macro conditions and industry specific conditions in the markets in which it operates, including the UK, continental Europe, Central and South America, the Middle East and Africa.

IGI’s international operations and investments expose it to increased political, operational and economic risks. Deterioration or volatility in foreign and international financial markets or general economic and political conditions could adversely affect IGI’s operating results, financial condition and liquidity. Economic imbalances and financial market turmoil could result in a widening of credit spreads and volatility in share prices. The publication of certain financial and economic data could indicate that global financial markets are deteriorating. These circumstances could lead to a decline in asset values and potentially reduce the demand for insurance due to limited economic growth prospects. Concerns about the economic conditions, capital markets, political and economic stability and solvency of certain countries have contributed to global market volatility. Political changes in the jurisdictions where IGI operates and elsewhere, some of which may be disruptive, can also interfere with the business of IGI’s customers and its activities in a particular location.

Economic conditions in the Middle East region affect IGI given that approximately 11% and 10% of its GWP generated in 2018 and the six months ended June 30, 2019, respectively, originated from risks in this region. In addition, a significant portion of IGI’s investment assets are located in the MENA region. Since the start of the 2008 financial crisis, there has been a dampening or reversal of the high rates of growth that had been experienced by many countries within the broader Middle East region and in particular the Gulf Co-operative Council countries, comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (the “GCC”). Since the first half of 2011 there has been significant political and social unrest in the Middle East region, including violent protests and armed conflict in a number of countries, with armed conflict in Syria ongoing as of the date of this proxy statement/prospectus. The situation has caused significant disruption to the economies of affected countries, which in some instances has led to an increase in premiums, but has overall had a destabilizing effect on insurance premiums. While the bulk of IGI’s operations are based in London, the staff is supported by back and middle-office underwriting operations in Jordan. Jordan has proven politically and socially stable, notwithstanding the recent events in the wider Middle East region. While a change in the political or social situation in Jordan could prove disruptive to IGI’s operations, IGI has the capacity to relocate its operations in Jordan to London and Dubai should the situation change.

A deterioration in macroeconomic conditions globally may affect the decisions of current and prospective policyholders as to the level of insurance or reinsurance coverage which they purchase in any given year, which in turn may, where such parties decide to reduce or otherwise limit their expenditure on such coverage, affect the amount of business underwritten by IGI. Also, the nature of insurance liabilities is one of a promise to pay claims at a point in the future, meaning that a change in macroeconomic conditions leading to increased inflation may result in an increase in the value at which claims are paid. IGI’s international operations also may be subject to a number of additional risks, particularly in emerging economies, including restrictions such as price controls, capital controls, currency exchange limits, ownership limits and other restrictive or anti-competitive governmental actions or requirements. Any of the foregoing could have a material adverse effect on IGI’s financial performance, which in turn could have a material adverse effect on its business, financial condition and results of operations.

Estimating insurance reserves is inherently uncertain and, if IGI’s loss reserves are insufficient, it will have a negative impact on IGI’s results.

To recognize liabilities for unpaid losses,1 both known or unknown, insurers establish reserves, which is a balance sheet account entry representing estimates of future amounts needed to pay claims and related expenses with respect to insured events which have occurred. Estimates and assumptions relating to reserves for net claims and claim adjustment expenses are based on complex and subjective judgments, often including the interplay of specific uncertainties with related accounting and actuarial measurements. Such estimates are susceptible to change. For example:

•        At the time of loss information available regarding the circumstances and the extent of a loss may not be fully known.

•        It may not be clear whether the circumstances of a loss are covered.

•        If a legal decision is required to resolve coverage this may take many years.

•        The actions the insured takes to remediate the loss may affect the eventual loss amount (favourably or unfavourably).

•        The availability of replacement parts, skilled labour, access to the loss site and the speed at which repairs can be undertaken many not be known for some time and may be subject to change.

•        It may be many years before the occurrence of a loss becomes known.

•        Where claims take a long time to settle, new information, changes in circumstances, legal decisions, rates of exchange and economic conditions (particularly claims inflation) may affect the value and validity of claims made.

When a claim is reported, a member of the claims team will establish a “case reserve”. The case reserve will represent an estimate of the expected settlement amount and will be based on information about the specific claim at that time. The estimate represents an informed judgment based on general industry reserving practices, the experience and knowledge of the claims handler and practices of the claims team. If insufficient information is available, the claims handler may be unable to establish an estimate and will seek further information that will allow an informed estimate to be established. Claims reserves are also established to provide for:

•        losses incurred but not reported to the insurer (“pure IBNR”);

•        potential changes in the adequacy of case reserves (“Incurred But Not Enough Reported” or “IBNER”); and

•        the estimated expenses of settling claims, both:

•        Allocated Loss Adjustment Expenses: claims specific costs (such as legal, loss adjuster fees); and

•        Unallocated Loss Adjustment Expenses: other general expenses (such as the costs of maintaining the claims handling function).

____________

​1         The term “loss” refers to a claim and the direct costs associated with claims settlement. Except where specific reference to the costs associated with claims settlement is made, the term “claim” and “loss” are used interchangeably.

The timing of IGI’s results depend in large part on the extent to which the development and settlement of claims and reinsurance recoveries are consistent with the assumptions used to establish reserves. If expectations for and/or the actual cost of settlement increase or the timing of reporting and/or settlement changes than IGI faces the risk that the reserves in IGI’s financial statements may be inadequate and need to be increased. In this event an increase in reserves would cause a reduction in IGI’s profitability and could result in operating losses and a reduction of capital.

Reserves are not an exact calculation of liability, but rather are estimates of the expected cost of settling claims. This process relies on the assumption that past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for projecting future claims development. The estimates are based on actuarial and statistical projections of facts and circumstances known at the time of the review, estimates of trends in claim frequency, severity and other variable factors, including new bases of liability and general economic conditions. These variables can be affected by many factors, including internal and external events, such as changes in claims handling procedures, economic inflation, foreign currency movements, legal trends, legislative decisions and changes and the recognition of new sources of claims.

Potentially, claims may emerge, particularly claims arising from changes in the legal and regulatory environment, the type or magnitude of which IGI is unable to predict.

Reserves for inward reinsurance may be subject to greater uncertainty than for insurance primarily because, as a reinsurer, IGI relies on (i) the original underwriting decisions made by ceding companies and (ii) information and data provided by the ceding companies. As a result, IGI is subject to the risk that its ceding companies may not have adequately evaluated the risks reinsured by IGI and the premiums ceded may not adequately compensate IGI for the risks it assumes. In addition, reinsurance reserves may be less reliable than insurance reserves because of the greater scope of losses underlying reinsurance claims, limitations in the information provided and the generally longer lapse of time from the occurrence of the event to the reporting of the loss to the reinsurer and its settlement.

The estimation of adequate reserves is more difficult and thus more uncertain for claims arising from “long-tail” policies, under which claims may not be paid until substantially beyond the end of the policy term. The estimation of such liabilities is subject to many complex variables, including the current legal environment, specific settlements that may be used as precedents to settle future claims, assumptions regarding trends with respect to claim frequency and severity, issues of coverage and the ability to locate defendants. Additional uncertainty also arises from the relative lack of development history, which limits the scope of experience on which estimates are based. This is partially mitigated by the use of and monitoring against market benchmarks.

While every effort is made to ensure IGI is reserved appropriately, changes in trends and other factors underlying IGI’s reserve estimates could result in IGI’s reserves being inadequate. Because setting reserves is inherently uncertain IGI cannot provide assurance that its current reserves will prove adequate considering subsequent events. If IGI’s loss reserves are determined to be inadequate, it will be required to increase its reserves at the time with a corresponding reduction in its net income for that period. Such adjustments could have a material adverse effect on IGI’s results and even IGI’s financial condition.

There is a degree of uncertainty and a high-risk environment for investment and business activities in certain countries in which IGI operates.

Some of the countries in which IGI operates or may operate in the future are in various stages of developing institutions and legal and regulatory systems that are not yet as firmly established as they are in Western Europe and the U.S. Some of these countries are also in the process of transitioning to a market economy and, as a result, are experiencing changes in their economies and their government policies (including, without limitation, policies relating to foreign ownership, repatriation of profits, property and contractual rights and planning and permit-granting regimes) that may affect IGI’s investments in these countries and may expose IGI to the impact of political or economic upheaval, and IGI could be subject to unforeseen administrative or fiscal burdens.

The procedural safeguards of the legal and regulatory regimes in these countries are still developing and, therefore, existing laws and regulations may be applied inconsistently. Often, fundamental contract, property and corporate laws and regulatory regimes have only recently become effective, which may result in ambiguities, inconsistencies and anomalies in their interpretation and enforcement. In addition, legislation may often contemplate implementing regulations that have not yet been promulgated, leaving substantial gaps in the regulatory infrastructure. All of these weaknesses could affect IGI’s ability to enforce contractual rights or to defend itself against claims by

others. Moreover, in certain circumstances, it may not be possible to obtain the legal remedies provided under current laws and regulations in a timely manner, or at all. The independence of the judicial systems and their immunity from economic, political and nationalistic influences in many of the countries in which IGI operates or may operate in the future remain largely untested. Instability and uncertainties relating to the legal and regulatory environment in these countries or other countries in which IGI may operate in the future could have a material adverse effect on IGI’s business, financial condition and results of operations.

IGI is subject to various laws, regulations and rules relating to sanctions, the violation of which could adversely affect IGI’s operations.

It is IGI’s policy not to underwrite any business directly in countries or for entities targeted under international sanctions of the UK, the E.U., the United States (OFAC) or the United Nations. Over the past 5 years, IGI received de minimis revenues relating to risks in Sudan, Cuba, Syria, Iran and North Korea. IGI’s business in these countries has been compliant with the applicable sanctions programs. While IGI has policies and procedures in place designed to ensure that IGI does not insure any activity that breaches applicable international sanctions, there remains the risk of an inadvertent breach which may result in lengthy and costly investigations followed by the imposition of fines or other penalties, any of which might have a material adverse effect on the financial condition and results of operations of IGI. IGI’s business has been affected by the imposition of sanctions in regions that previously were important markets for IGI, such as Iran. To the extent that sanctions are imposed on any of IGI’s key markets, Pubco’s business will be negatively impacted.

IGI is subject to various anti-corruption and anti-money laundering laws, regulations and rules, the violation of which could adversely affect IGI’s operations.

IGI’s activities are subject to applicable money laundering regulations and anti-corruption laws in the jurisdictions where it operates, including Bermuda, the UK and the European Union, among others. For example, IGI is subject to The Bribery Act 2016 of Bermuda and the UK Bribery Act 2010, which, among other matters, generally prohibit corrupt payments or unreasonable gifts to foreign governments or officials. IGI does business, and may continue to do business in the future, in countries and regions where governmental corruption has been known to exist, and where IGI may face, directly or indirectly, corrupt demands by officials, or the risk of unauthorized payments or offers of payments by one of its employees, consultants, sponsors or agents. Although IGI has in place systems and controls designed to comply with applicable laws and regulations (including continuing education and training programs), there is a risk that those systems and controls will not always be effective to achieve full compliance, as those laws and regulations are interpreted by the relevant authorities. Failure to accurately interpret or comply with or obtain appropriate authorizations and/or exemptions under such laws or regulations could subject IGI to investigations, criminal sanctions or civil remedies, including fines, injunctions, loss of an operating license, reputational consequences, and other sanctions, all of which could damage IGI’s business or reputation. Such damage could have a material adverse effect on IGI’s financial condition and results of operations.

IGI relies on brokers to source its business and its business may suffer should IGI’s relationship with brokers deteriorate.

IGI markets its insurance and reinsurance worldwide through insurance and reinsurance brokers. Brokers are independent of the insurers they deal with. IGI’s top 5 international brokers produced 59% of the gross written premiums of IGI’s underwriting operations for the year ended December 31, 2018 and 54% for the six months ended June 30, 2019. Loss of all or a substantial portion of the business provided by one or more of these brokers could have a material adverse effect on IGI’s business. Due to the concentration of IGI’s brokers, IGI’s brokers may have increasing power to dictate the terms and conditions of its arrangements with them, which could have a negative impact on IGI’s business.

Maintaining good relationships with the brokers from whom IGI sources the policies it underwrites is integral to IGI’s positive financial performance. Events could occur which may damage the relationship between IGI and a particular broker or broker group, which may result in that broker or broker group being unwilling to do business with IGI. The failure, inability or unwillingness of brokers to do business with IGI could have a material adverse effect on IGI’s financial performance.

Some of IGI’s competitors have higher financial strength ratings, offer a larger variety of products, set lower prices for insurance coverage, offer higher commissions and/or have had longer term relationships with the brokers IGI use than IGI. This may adversely impact IGI’s ability to attract and retain brokers to sell its insurance products or brokers may increasingly promote products offered by other companies. The failure or inability of brokers to market IGI’s insurance products successfully, or the loss of all or a substantial portion of the business provided by these brokers, could have a material adverse impact on IGI’s business, financial condition and results of operations.

IGI could be materially adversely affected to the extent that managing general agents, general agents and other producers exceed their underwriting authority or if IGI’s agents, its insureds or other third parties commit fraud or otherwise breach obligations owed to IGI.

For certain business conducted by IGI, following its underwriting, financial, claims and information technology due diligence reviews, IGI authorizes managing general agents, general agents and other producers to write business on its behalf within underwriting authority prescribed by IGI. IGI relies on the underwriting controls of these agents to write business within the underwriting authorities provided by it. Although IGI has contractual protections in place in virtually all instances and IGI monitors such business on an ongoing basis, IGI’s monitoring efforts may not be adequate or IGI’s agents may exceed their underwriting authority, commit fraud, or otherwise breach obligations owed to IGI. To the extent that IGI’s agents, its insureds or other third parties exceed their underwriting authority, commit fraud or otherwise breach obligations owed to IGI in the future, IGI’s financial condition and results of operations could be materially adversely affected.

IGI has a strong delegated authority risk management process established by its board of directors and directly managed via monthly meetings of its delegated authority committee which is attended by certain of its UK business directors. In particular, IGI carries out detailed due diligence on all new agents with regular reviews upon renewal, puts in place strong contracts, conducts regular on-site audits and monitors monthly reports from agents. All agents are required to carry errors and omissions insurance which would respond in the event that these agents breach their delegated authority.

IGI may be exposed to a series of claims for large losses in relation to uncorrelated events that occur at, or around, the same time, which in the aggregate may result in a material adverse effect on IGI’s operations.

IGI may be exposed to a series of claims for large losses in relation to uncorrelated and otherwise unrelated events which occur at, or around, the same time. Some of the more significant examples of large, uncorrelated events are terrorist attacks, fires, explosions or spills at a refinery, the collapse of a major office building, a series of simultaneous cyber-attacks, the collision of two ships, an explosion in a port and the loss of an airplane.

These risks are inherently unpredictable. It is difficult to predict the frequency of events of this nature and to estimate the amount of loss that any given occurrence will generate. Some of these large losses may also have the potential for exposure across multiple lines of business. While none of such claims may itself be material to IGI, in the aggregate they may result in IGI having to recognize significant losses in a single reporting period, which could have a material adverse effect on IGI’s capital position, results of operations and financial condition in that particular reporting period. It is also possible that such losses could exceed the reinstatement capacity of IGI’s reinsurance coverage, which would have a material adverse effect on IGI’s results of operations.

The availability of reinsurance, retrocessional coverage, and capital market transactions to limit IGI’s exposure to risks may be limited which could adversely affect IGI’s financial condition and results of operations.

As is common practice within the insurance industry, IGI transfers a portion of the risks insured under its policies to other companies through the purchase of reinsurance. This reinsurance is maintained to protect the insurance and reinsurance subsidiaries against the severity of losses on individual claims, an unusual series of which can produce an aggregate extraordinary loss. Although reinsurance does not discharge IGI’s subsidiaries from their primary obligation to pay for losses insured under the policies they issue, reinsurance does make the assuming reinsurer liable to the insurance subsidiaries for the reinsured portion of the risk.

IGI’s reinsurance program uses various methods, such as proportional, non-proportional and facultative reinsurance, to mitigate risks across its underwriting portfolio, in return for which IGI cedes to third party reinsurers a certain percentage of its GWP in any given year. That percentage was 33% in the year ended December 31, 2018 and

26% in the six-months ended June 30, 2019. The program is finite and absolute in the protection offered, meaning that events outside of its scope would not be covered, and does not offer unlimited protection against highly extreme but improbable events.

IGI’s reinsurance program is purchased annually, with elements of the program expiring throughout the year. The amount of coverage purchased is determined by IGI’s risk appetite and underlying exposure base together with the price, quality and availability of such coverage. Coverage purchased for one year will not necessarily conform to purchases for another year, which may result in variation as to the extent of the coverage year-on-year, even though some policies IGI issues are multi-year policies. In addition, reinsurance cessation and commencement terms, timing and cost could leave IGI with an exposure where intended reinsurance protection is either omitted or only partially effective. One or more of IGI’s reinsurers could become insolvent, which could cause a portion of IGI’s reinsurance protection to become ineffective. In addition, reinsurers may not always honor their commitments or we may have disagreements with reinsurers with respect to the extent of their obligations, which could result in IGI having greater exposure than anticipated. A failure by reinsurers to cover their portion of our liabilities, and/or disputes with reinsurers over the extent or applicability of their obligations to us, could depending on the amounts involved have a material adverse effect on our results of operations and business.

The availability and cost of reinsurance protection is subject to market conditions, which are beyond IGI’s control. Economic conditions could have a material impact on IGI’s ability to manage its risk aggregations through reinsurance or capital markets transactions. As a result of such market conditions and other factors, IGI may not be able to successfully mitigate risk through reinsurance and retrocessional arrangements. There is no guarantee that IGI’s desired amounts of reinsurance or retrocessional reinsurance will be available in the marketplace in the future. In addition to capacity risk, the remaining capacity may not be on terms IGI deems appropriate or acceptable or with companies with whom it wants to do business.

If the reinsurance industry were to suffer future substantial losses, the effect could be to limit the availability of appropriate or acceptable reinsurance coverage for IGI, which in the event of losses in IGI’s risk portfolio could have a material adverse effect on IGI’s financial condition and results of operations.

For a discussion of certain ongoing disputes with reinsurers, see “Business of IGI — Litigation.”

IGI may be faced with a liquidity shortfall following a large loss or a series of large losses due to the settlement of claims prior to the receipt of monies due under outwards reinsurance arrangements.

As with all insurance companies, IGI uses its liquidity to fund its insurance and reinsurance obligations, which may include large and unpredictable claims (including catastrophe claims). While IGI seeks to manage carefully its exposure to catastrophe risk and while it has a liquidity policy which seeks to ensure sufficient liquidity to withstand claim scenarios at the extreme end of the business plan projections by reference to actual losses in relation to catastrophe events may differ materially from the losses that IGI estimates, given the significant uncertainties with respect to the estimates and the unpredictable nature of catastrophes. In such scenarios, IGI may be faced with a shortfall where it is required to settle claims arising under insurance contracts or where it is required to increase the amount of resources required to be held. In such scenarios, IGI may be required to (a) liquidate investments (including some of its less liquid investments), which may be constrained as a consequence of macroeconomic conditions beyond IGI’s control or (b) delay or vary the implementation of its strategic plans so as to maintain appropriate liquidity. Any of the foregoing may affect the amount of business that IGI can write, its revenue and profitability.

If IGI’s risk management and loss mitigation methods fail to adequately manage its exposure to losses, the losses it incurs could be materially higher than its expectations and its financial condition and results of operations could be materially adversely affected.

IGI historically has sought and will continue to seek to manage its exposure to insurance and reinsurance losses through a number of loss limitation methods, including internal risk management procedures, writing a number of IGI’s inwards reinsurance contracts on an excess of loss basis, enforcement and oversight of its underwriting processes, outwards reinsurance protection, adhering to maximum limitations on policies whether written on a proportional, first loss, Excess of Loss (XOL) or Possible Maximum Loss (PML) Maximum Foreseeable Loss (MFL) basis, written in defined geographical zones, limiting program size for each client, establishing per risk and per occurrence limitations for each event, employing coverage restrictions and following prudent underwriting guidelines for each program written.

IGI also seeks to limit its loss exposure through geographic diversification. Geographic zone limitations involve significant underwriting judgments, including the determination of the area of the zones and the inclusion of a particular policy within a particular zone’s limits. In addition, various provisions contained in IGI’s insurance policies and reinsurance contracts, such as limitations or exclusions from coverage or choice of forum clauses negotiated to limit IGI’s risks, may not be enforceable in the manner it intends, as it is possible that a court or regulatory authority could nullify or void an exclusion or limitation, or legislation could be enacted modifying or barring the use of these exclusions and limitations. IGI cannot be sure that these loss limitation methods will effectively prevent a material loss exposure which could have a material adverse effect on IGI’s results of operations or financial condition.

Underwriting is a matter of judgment, involving assumptions about matters that are inherently unpredictable and beyond IGI’s control, and for which historical experience and probability analysis may not provide sufficient guidance. Many of IGI’s methods of managing risk and exposures are based upon observed historical market behavior and statistic-based historical models. As a result, these methods may not predict future exposures, which could be significantly greater than historical measures indicate. Other risk management methods depend on the evaluation of information regarding markets, policyholders or other matters that are publicly available or otherwise accessible to IGI. This information may not always be accurate, complete, up-to-date or properly evaluated. For example, much of the information that IGI enters into its risk modelling software is based on third party data that it does not control, and estimates and assumptions that are dependent on many variables, such as assumptions about loss adjustment expenses, insurance-to-value and post-event loss amplification (the temporary local inflation of costs for building materials and labor resulting from increased demand for rebuilding services in the aftermath of a catastrophe). Accordingly, if the estimates and assumptions that IGI enters into its risk models are incorrect, or if such models prove to be an inaccurate forecasting tool, the losses IGI might incur from an actual catastrophe could be materially higher than its expectation of losses generated from modelled catastrophe scenarios, and its financial condition and results of operations could be adversely affected.

IGI also seeks to manage its loss exposure through loss limitation provisions in the policies it issues to customers, such as limitations on the amount of losses that can be claimed under a policy, limitations or exclusions from coverage and provisions relating to choice of forum. These contractual provisions may not be enforceable in the manner that IGI expects or disputes relating to coverage may not be resolved in its favor. If the loss limitation provisions in its policies are not enforceable or disputes arise concerning the application of such provisions, the losses IGI might incur from a catastrophic event could be materially higher than its expectations and its financial condition and results of operations could be adversely affected.

In relation to catastrophe risk, IGI monitors and controls the accumulation of risk for a large number of realistic disaster scenario events. There are specific scenarios for natural, man-made and economic disasters, and for different business lines. The assumptions made in such scenarios may not be an accurate guide to actual losses that ultimately are incurred in respect of a particular catastrophe.

No assurances can be made that these loss limitation methods will be effective and mitigate IGI’s loss exposure. One or more catastrophic events, other loss events, or severe economic events could result in claims that substantially exceed IGI’s expectations, or the protections set forth in IGI policies could be voided, which, in either case, could have a material adverse effect on IGI’s financial condition or results of operations, possibly to the extent of reducing or eliminating shareholders’ equity.

A significant amount of IGI’s assets is invested in fixed maturity securities and is subject to market fluctuations.

IGI’s investment portfolio includes a substantial amount of fixed maturity securities. As of December 31, 2018, IGI’s investment in fixed maturity securities was approximately $165.6 million, or 32.8% of its total investment and cash portfolio, including cash and cash equivalents. As of that date, IGI’s portfolio of fixed maturity securities consisted of corporate securities (98.4%) and government securities (1.6%).

The fair value of these assets and the investment income from these assets fluctuate depending on general economic and market conditions. The fair value of fixed maturity securities generally decreases as interest rates rise. If significant inflation or an increase in interest rates were to occur, the fair value of IGI’s fixed maturity securities would be negatively impacted. Conversely, if interest rates decline, investment income earned from future investments in fixed maturity securities will be lower. Some fixed maturity securities, such as mortgage-backed and other asset-backed securities, also carry prepayment risk as a result of interest rate fluctuations. Additionally, given the low interest rate environment, IGI may not be able to successfully reinvest the proceeds from maturing securities at yields commensurate with its target performance goals.

The value of investments in fixed maturity securities is subject to impairment as a result of deterioration in the credit worthiness of the issuer, default by the issuer (including states and municipalities) in the performance of its obligations in respect of the securities and/or increases in market interest rates. To a large degree, the credit risk IGI faces is a function of the economy; accordingly, IGI faces a greater risk in an economic downturn or recession. During periods of market disruption, it may be difficult to value certain of IGI’s securities, particularly if trading becomes less frequent and/or market data becomes less observable. There may be certain asset classes that were acquired in active markets with significant observable data that become illiquid due to the current financial environment. In such cases, more securities may require additional subjectivity and management judgment.

Although the historical rates of default on state and municipal securities have been relatively low, IGI’s state and municipal fixed maturity securities could be subject to a higher risk of default or impairment due to declining municipal tax bases and revenue. Many states and municipalities operate under deficits or projected deficits, the severity and duration of which could have an adverse impact on both the valuation of IGI’s state and municipal fixed maturity securities and the issuer’s ability to perform its obligations thereunder. Additionally, IGI’s investments are subject to losses as a result of a general decrease in commercial and economic activity for an industry sector in which IGI invests, as well as risks inherent in particular securities.

Although IGI attempts to manage these risks through the use of investment guidelines and other oversight mechanisms and by diversifying IGI’s portfolio and emphasizing preservation of principal, IGI’s efforts may not be successful. Impairments, defaults and/or rate increases could reduce IGI’s net investment income and net realized investment gains or result in investment losses. Investment returns are currently, and will likely continue to remain, under pressure due to the continued low inflation, actions by the Federal Reserve, economic uncertainty, more generally, and the shape of the yield curve. As a result, IGI’s exposure to the risks described above could materially and adversely affect IGI’s results of operations, liquidity and financial condition.

Losses on IGI’s investments may reduce its overall capital and profitability.

IGI’s invested assets include a substantial amount of interest rate and credit sensitive instruments such as corporate debt securities. Fluctuations in interest rates may affect IGI’s future returns on such investments, as well as the market values of, and corresponding levels of capital gains or losses on, such investments. Interest rates are highly sensitive to many factors, including governmental monetary policies, domestic and international economic and political conditions and other factors beyond IGI’s control. A decline in interest rates improves the market value of existing instruments but reduces returns available on new investments, thereby negatively impacting IGI’s future investment returns. Conversely, rising interest rates reduce the market value of existing investments but should positively impact IGI’s future investment returns. During periods of declining market interest rates, IGI could be forced to reinvest the cash it receives as interest or return of principal on its investments in lower-yielding instruments. Issuers of fixed income securities could also decide to redeem such securities early in order to borrow at lower market rates, which would increase the percentage of IGI’s investment portfolio that it would have to reinvest in lower-yielding investments of comparable credit quality or in lower credit quality investments offering similar yields. Given current low interest rate levels, in the future IGI is likely to be subject to the effects of potentially increasing rates. Although IGI attempts to manage the risks of investing in a changing interest rate environment, it might not be able to mitigate interest rate sensitivity completely, and a significant or prolonged increase or decrease in interest rates could have a material adverse effect on its results of operations or financial condition.

IGI is exposed to counterparty risk in relation to its investments, including holdings of debt instruments to which IGI is a party. In particular, IGI’s business could suffer significant losses due to defaults on corporate bonds and ratings downgrades.

Furthermore, as a result of holding debt securities, IGI is exposed to changes in credit spreads. Widening credit spreads could result in a reduction in the value of fixed income securities that IGI holds but increase investment income related to purchases of new fixed income securities, whereas tightening of credit spreads will generally increase the value of fixed income securities at higher yields that it holds but decrease investment income generated through purchases of any new fixed income securities.

IGI also holds equity securities. Equity investments are subject to volatility in prices based on market movements, which can impact the gains that can be achieved. IGI periodically adjusts the accounting book values of its investment portfolio (“mark-to-market”) which could result in increased volatility and uncertainty surrounding reported profits and net asset values at any point in time.

IGI also invests to a limited extent in real estate in Jordan and Lebanon. Real estate is subject to price volatility as a result of interest rate movements and general market conditions, which can impact the value of the real estate portfolio and the rent chargeable to tenants.

Moreover, a major loss, series of losses or reduction in premium income could result in a sustained cash outflow requiring early realization, which may involve selling a portion of IGI’s investments into a depressed market, which could decrease IGI’s returns from investments and strain its capital position.

Furthermore, challenging market conditions are likely to make IGI’s assets less liquid, particularly affecting those assets which are by their nature already inherently less liquid. If, in such conditions, IGI requires significant amounts of cash on short notice in excess of normal cash requirements (for example, to meet higher-than-anticipated claims) or is required to post or return collateral in connection with certain of its reinsurance contracts, credit agreements or invested portfolio, it may have difficulty selling any of its less liquid investments in a timely manner, or may be forced to sell them for less than it otherwise would have been able to realize if sold in other circumstances.

Market volatility, changes in interest rates, changes in credit spreads and defaults, a lack of pricing transparency, market illiquidity, declines in equity prices, and foreign currency movements, alone or in combination, could have a material adverse effect on IGI’s results of operations and financial condition through realized losses, impairments or changes in unrealized positions. Although IGI attempts to protect its investment portfolio against the foregoing risks, it cannot ensure that such measures will be effective. In addition, a decrease in the value of IGI’s investments may result in a reduction in overall capital, which may have a material adverse effect on IGI’s results of operations and its financial condition.

IGI’s results of operations, liabilities and investment portfolio may be materially affected by conditions impacting the level of interest rates in the global capital markets and major economies, such as central bank policies on interest rates and the rate of inflation.

As a global insurance and reinsurance company, IGI is affected by the monetary policies of the Bank of England, the European Central Bank, the U.S. Federal Reserve Board and other central banks around the world. Since the financial crisis of 2007 and 2008 these central banks have taken a number of actions to spur economic activity such as keeping interest rates low and enacting Quantitative Easing. Unconventional monetary policy from the major central banks, and reversal of such policies, and moderate global economic growth remain key uncertainties for markets and IGI’s business.

Our exposure to interest rate risk relates primarily to the market price and cash flow variability of fixed income instruments that are associated with changes in interest rates. IGI’s investment portfolio contains interest rate sensitive instruments, such as fixed income securities which have been, and will likely continue to be, affected by changes in interest rates from central bank monetary policies, domestic and international economic and political conditions, levels of inflation and other factors beyond IGI’s control.

Interest rates are highly sensitive to many factors, including governmental monetary policies, inflation, domestic and international economic and political conditions and other factors beyond IGI’s control. For example, inflation could lead to higher interest rates causing the current unrealized gain position in IGI’s fixed maturity portfolio to decrease. As a result of the interest rate environment, IGI has diversified its investment portfolio by investing in a real estate fund and emerging market debt to enhance the returns on its investment portfolio. However, these assets are riskier in nature and could adversely impact IGI’s investment portfolio.

Steps that may be taken by central banks to raise interest rates in the future to combat higher inflation than IGI had anticipated could, in turn, lead to an increase in IGI’s loss costs. Changes in the level of inflation also could result in an increased level of uncertainty in IGI’s estimation of loss reserves for its specialty long-tail segment lines of business. As a result of the above factors, IGI’s business, financial condition, liquidity or operating results could be adversely affected.

The determination of the amount of allowances and impairments taken on IGI’s investments which are held at cost involves the estimation of uncertainties which, if they turn out to be incorrect, could have a material adverse effect on IGI’s results of operations and financial condition.

IGI performs reviews of its investments annually or whenever there is an indication of impairment in order to determine whether declines in fair value below the cost basis are considered significant or prolonged declines in the fair value below cost regarding the recognition and presentation of other-than-temporary impairments. The process of determining whether a security is other-than-temporarily impaired requires judgment and involves analyzing many factors. Assessing the accuracy of the level of impairments taken, and allowances reflected, in IGI’s financial statements is inherently uncertain given the subjective nature of the process. Furthermore, additional impairments may need to be taken or allowances provided in the future with respect to events that may impact specific investments. The determination of impairments taken on IGI’s intangible assets and loans varies by type of asset and is based upon IGI’s periodic evaluation and assessment of known and inherent risks associated with the respective asset class.

Intangible assets are originally recorded at fair value. Intangible assets are reviewed for impairment at least annually or more frequently if indicators are present and assessments are revised as conditions change and new information becomes available. Management updates its evaluations regularly and reflects impairments in operations as such evaluations are revised. Intangible asset impairment charges can result from declines in operating results, divestitures or sustained market capitalization declines and other factors. Impairment charges could materially affect IGI’s financial results in the period in which they are recognized. There can be no assurance that IGI’s management has accurately assessed the level of impairments taken in IGI’s financial statements. Furthermore, management may determine that impairments are needed in future periods and any such impairment will be recorded in the period in which it occurs, which could materially impact IGI’s financial position or results of operations. While historically IGI’s other-than-temporary impairments have not been material, historical trends may not be indicative of future impairments or allowances. As of December 31, 2018, intangible assets represented approximately 1.0% of shareholders’ equity. IGI continues to monitor relevant internal and external factors and their potential impact on the fair value of IGI’s reportable segments, and if required, IGI will update its impairment analysis.

IGI cannot guarantee that its reinsurers will pay in a timely fashion, if at all, and, as a result, IGI could experience losses.

IGI purchases reinsurance by transferring part of the risk that it has assumed, known as ceding, to a reinsurance company in exchange for part of the premium IGI receives in connection with the risk. Although reinsurance makes the reinsurer contractually liable to IGI to the extent the risk is transferred or ceded to the reinsurer, it does not relieve IGI, the reinsured, of IGI’s liability to its policyholders. IGI’s reinsurers may not pay the recoverable reinsurance that they owe to IGI or they may not pay such recoverables on a timely basis. Accordingly, IGI bears credit risk with respect to its reinsurers, and if IGI’s reinsurers fail to pay IGI, IGI’s financial results would be adversely affected. Underwriting results and investment returns of some of IGI’s reinsurers may affect their future ability to pay claims. In addition, from time to time we engage in disputes with reinsurers regarding their contractual obligations, which may involve arbitration or litigation and could involve amounts that are material. As of December 31, 2018, the amount owed to IGI from its reinsurers for paid claims was approximately $32.8 million. For a discussion of certain ongoing disputes with reinsurers, see “Business of IGI — Litigation.”

IGI’s operating subsidiaries are rated and a decline in any of these ratings could adversely affect its standing among brokers and customers and cause its premiums and earnings to decrease.

Ratings have become an increasingly important factor in establishing the competitive position of insurance and reinsurance companies. Rating agencies represent independent opinions of the financial strength of insurers and reinsurers and their ability to meet policyholder obligations. IGI currently holds financial strength ratings assigned by third party rating agencies which assess and rate the claims paying ability and financial strength of insurers and reinsurers. The ratings of IGI’s operating subsidiaries are subject to periodic review by, and may be placed on credit watch, revised downward or revoked at the sole discretion of A.M. Best Inc. or S&P. IGI currently holds a stable outlook rating of “A (Excellent)” from A.M. Best Inc. (upgraded on September 5, 2019) and a stable outlook rating of “A-” from S&P (affirmed on August 22, 2019).

If the ratings of IGI’s operating subsidiaries are reduced from their current levels by A.M. Best Inc. or S&P, IGI’s competitive position in the insurance industry might suffer and it might be more difficult for IGI to market its products, expand its insurance and reinsurance portfolio and renew its existing insurance and reinsurance policies and agreements. A downgrade may also require IGI to establish trusts or post letters of credit for ceding company clients and could trigger provisions allowing some clients to terminate their insurance and reinsurance contracts with IGI. Some contracts also provide for the return of the premium for the unexpired periods to the ceding client in the event of a rating downgrade. It is increasingly common for IGI’s reinsurance contracts to contain such terms. A significant downgrade could result in a substantial loss of business as ceding companies and brokers that place such business move to other reinsurers with higher claims-paying and financial strength ratings and therefore could have a material adverse effect on IGI’s results of operations and financial condition.

A.M. Best and S&P periodically review IGI’s ratings and may revise it downward or revoke it at their sole discretion based primarily on their analysis of IGI’s balance sheet strength (including capital adequacy and claims and claim adjustment expense reserve adequacy), operating performance and business profile. Factors that could affect such an analysis include but are not limited to:

•        if IGI changes its business practices from its organizational business plan in a manner that no longer supports its ratings;

•        if unfavorable financial, regulatory or market trends affect IGI, including excess market capacity;

•        if IGI’s losses exceed its loss reserves;

•        if IGI has unresolved issues with government regulators;

•        if IGI is unable to retain its senior management or other key personnel;

•        if a rating agency has concerns with the quality of IGI’s risk management;

•        if IGI’s investment portfolio incurs significant losses; or

•        if the rating agencies alter their capital adequacy assessment methodology in a manner that would adversely affect IGI’s ratings.

These and other factors could result in a downgrade of IGI’s ratings. A downgrade of IGI’s ratings could cause its current and future brokers and agents, retail brokers and insureds to choose other, more highly-rated competitors. A downgrade of this rating could also increase the cost or reduce the availability of reinsurance to IGI, increase collateral required for its assumed reinsurance business, or trigger termination of assumed and/or ceded reinsurance contracts. A downgrade could also adversely limit IGI’s access to the capital markets, which may increase the cost of debt.

In addition, in view of the earnings and capital pressures recently experienced by many financial institutions, including insurance companies, it is possible that rating organizations will heighten the level of scrutiny that they apply to such institutions, will increase the frequency and scope of their credit reviews, will request additional information from the companies that they rate and may increase the capital and other requirements employed in the rating organizations’ models for maintenance of certain ratings levels. It is possible that such reviews of IGI may result in adverse ratings consequences, which could have a material adverse effect on IGI’s financial condition and results of operations. A downgrade or withdrawal of any rating could severely limit or prevent IGI from writing new and renewal insurance or reinsurance contracts.

The risk associated with underwriting treaty reinsurance business could adversely affect IGI.

Like other reinsurers, IGI’s reinsurance group does not separately evaluate each of the individual risks assumed under reinsurance treaties. Therefore, IGI is largely dependent on the original underwriting decisions made by ceding companies. IGI is subject to the risk that the ceding companies may not have adequately evaluated the risks to be reinsured and that the premiums ceded may not adequately compensate IGI for the risks it assumes.

Consistent with market practice, much of IGI’s treaty reinsurance business allows the ceding company to terminate the contract below a certain threshold. Whether a cedent would exercise any of these rights could depend on various factors, such as the reason for and extent of such downgrade, the prevailing market conditions and the pricing and availability of replacement reinsurance coverage. IGI cannot predict to what extent these contractual rights would be exercised, if at all, or what effect this would have on IGI’s financial condition or future operations, but the effect could be material.

Loss of business reputation or negative publicity could negatively impact IGI’s business and results of operations.

IGI is vulnerable to adverse market perception because it operates in an industry where integrity and customer trust and confidence are paramount. In addition, any negative publicity (whether accurate or inaccurate) associated with IGI’s business or operations could result in a loss of clients and/or business and could result in decreased demand. IGI also may be negatively impacted if competitors in one or more of its markets engage in practices resulting in increased public attention to its business. Accordingly, any mismanagement, fraud or failure to satisfy fiduciary responsibilities, or the negative publicity resulting from these or other activities or any allegation of such activities, could have a material adverse effect on IGI’s business and results of operations. These factors may further increase IGI’s costs of doing business and adversely affect IGI’s profitability by impeding IGI’s ability to market its products and services, requiring it to change its products or services or by increasing the regulatory burdens under which it operates.

A failure in or damage to IGI’s operational systems or infrastructure, or those of third parties, could disrupt its businesses and have a material adverse effect on its financial condition and results of operations.

IGI’s business is highly dependent on its ability to process, on a daily basis, a large number of transactions across numerous and diverse markets in many currencies. In particular, IGI relies on the ability of its employees, its internal systems and systems operated by third parties on behalf of the London insurance market, including technology centers, to process a high volume of transactions. As IGI’s client base and geographical reach expands, developing and maintaining its operational systems and infrastructure requires continuing investment. IGI’s financial, accounting, data processing and other operating systems and facilities may fail to operate properly or become disabled as a result of events that are wholly or partially beyond its control, adversely affecting its ability to process these transactions or provide these services.

In addition, IGI’s operations rely on the secure processing, storage and transmission of confidential and other information in its computer systems and networks. IGI relies on these systems for critical elements of its business processes, including, for example, entry and retrieval of individual risk details, premium and claims processing, monitoring aggregate exposures and financial and regulatory reporting. Although IGI takes industry standard protective measures and endeavours to modify them as circumstances warrant, its computer systems, software and networks may be vulnerable to unauthorized access, computer viruses or other malicious code and other events that could have a security impact.

IGI routinely transmits and receives personal, confidential and proprietary information by email and other electronic means. IGI has discussed and worked with clients, vendors, service providers, counterparties and other third parties to develop secure transmission capabilities, but IGI does not have, and may be unable to put in place, secure capabilities with all of its clients, counterparties and other third parties and IGI may not be able to ensure that these third parties have appropriate controls in place to protect the confidentiality of the information. An interception, misuse or mishandling of personal, confidential or proprietary information being sent to or received from a client, counterparty or other third party could result in legal liability and/or regulatory action (including, without limitation, under data protection and privacy laws and standards) and reputational harm.

If one or more of such events occur, this potentially could jeopardize IGI’s or its clients’ or counterparties’ confidential and other information processed and stored in, and transmitted through, computer systems and networks, or otherwise cause interruptions or malfunctions in IGI’s, its clients’, its counterparties’ or third parties’ operations, which could result in significant losses or reputational damage. IGI may be required to expend significant additional resources to modify its protective measures or to investigate and remediate vulnerabilities or other exposures, and IGI may be subject to litigation and financial losses that are either not insured against or not fully covered through any insurance maintained by IGI. Any expansion of existing or new laws and regulations regarding data protection could further increase the liability of IGI should protected data be mishandled or misused.

While IGI maintains a disaster recovery database and is currently implementing a real-time disaster recovery system, it operates from premises and in markets that may be affected by acts of terrorism or nuclear, chemical, biological or radiological exposure. Such actions may be uninsurable and, were they to occur in IGI’s premises or those of third parties with or through which IGI conducts its business, it could prevent IGI from carrying on that business, which could have a material adverse effect on IGI’s results of operations.

IGI has outsourced certain technology and business process functions to third parties and may continue to do so in the future. IGI’s outsourcing of certain technology and business process functions to third parties may expose IGI to increased risk related to data security, service disruptions or the effectiveness of IGI’s control system, which could result in monetary and reputational damage or harm to IGI’s competitive position. These risks could grow as vendors increasingly offer cloud-based software services rather than software services which can be run within IGI’s data centers.

Any of the foregoing could have a material adverse effect on IGI’s financial condition and results of operations.

IGI could be adversely affected by the loss of one or more key employees or by an inability to attract and retain qualified personnel, which could negatively affect its financial condition, results of operations, or ability to realize its strategic business plan.

The success of IGI has depended and will continue to depend on the continued services and continuing contributions of its underwriters, management and other key personnel and its ability to continue to attract, motivate and retain the services of qualified personnel. While IGI has entered into employment contracts or letters of appointment with such key personnel, the retention of their services cannot be guaranteed. IGI may also encounter unforeseen difficulties associated with the transition of members of its senior management team to new or expanded roles necessary to execute its strategic and tactical plans from time to time.

The pool of talent from which IGI actively recruits is limited. Although, to date, IGI has not experienced difficulties in attracting and retaining key personnel, the inability to attract and retain qualified personnel could have a material adverse effect on IGI’s financial condition and results of operations. In addition, IGI’s underwriting staff is critical to its success in the production of business. While IGI does not consider any of its key executive officers or underwriters to be irreplaceable, the loss of the services of key executive officers or underwriters or the inability to hire and retain other highly qualified personnel in the future could delay or prevent IGI from fully implementing its business strategy which could affect its financial performance.

Special considerations apply to IGI’s Bermuda operations. Under Bermuda law, non-Bermudians, other than spouses of Bermudians and individuals holding permanent or working resident certificates, are not permitted to engage in any gainful occupation in Bermuda without a work permit issued by the Bermuda government. A work permit is only granted or extended if the employer can show that, after a proper public advertisement, no Bermudian, spouse of a Bermudian or individual holding a permanent or working resident certificate is available who meets the minimum standards reasonably required for the position. The Bermuda government places a six-year term limit on individuals with work permits, subject to specified exemptions for persons deemed to be key employees of businesses with a significant physical presence in Bermuda.

Offices in other jurisdictions, such as Dubai, may have residency and other mandatory requirements that affect the composition of its local boards of directors, executive teams and choice of third party service providers. Due to the competition for available talent in such jurisdictions, IGI may not be able to attract and retain personnel as required by IGI’s business plans, which could disrupt operations and adversely affect IGI’s financial performance.

The success of IGI will depend in part upon its continuing ability to recruit and retain employees of suitable skill and experience, and IGI may find that it is not able to recruit sufficient or qualified staff, or that the individuals that it would like to recruit will not be able to obtain the necessary work permits if required or that it will not be able to retain such staff. The loss of the services of one, or some of, the underwriters, management or other key personnel or the inability to recruit and retain staff of suitable quality could adversely affect the ability of IGI to continue to conduct its business, which could have a material adverse effect on IGI’s results of operations and financial condition.

Changes in employment laws, taxation and acceptable compensation practice may limit IGI’s ability to attract senior employees to its current operating platforms.

IGI’s business and operations are, by their nature, international and IGI competes for senior employees on a global basis. Changes in local employment legislation, taxation and the approach of regulatory bodies to compensation practices within IGI’s operating jurisdictions may impact IGI’s ability to recruit or retain senior employees or the cost to IGI of doing so. Any failure to retain senior employees may adversely affect the strategic growth of IGI’s business and operating results.

IGI enters into various contractual arrangements with third parties generally, including brokers, insurance, reinsurance and financing arrangements; any deterioration in the creditworthiness of, defaults by, commingling of funds by, or reputational issues related to, counterparties or other third parties with whom it transacts business could adversely impact IGI’s financial condition and results of operations.

IGI is exposed to credit risk relating to policyholders, independent agents and brokers. For example, its policyholders, independent agents or brokers may not pay a part of or the full amount of premiums owed to IGI, and its brokers or other third party claim administrators may not deliver amounts owed on claims under IGI’s insurance and reinsurance contracts for which IGI has provided funds. If the counterparties or other third parties with whom IGI transacts business default or fail to meet their payment obligations, it could materially adversely affect IGI’s financial condition and results of operations. If the counterparties or other third parties with whom IGI transacts business experience reputational issues, they may in turn cause other counterparties, third parties or customers to question IGI’s reputation in respect of choosing to enter into contractual arrangements with such counterparties.

As credit risk is generally a function of the economy, IGI faces a greater credit risk in an economic downturn. While IGI attempts to manage credit risks through underwriting guidelines, collateral requirements and other oversight mechanisms, its efforts may not be successful. For example, to reduce such credit risk, IGI may require certain third parties to post collateral for some or all of their obligations to IGI. In cases where IGI receives pledged securities and the applicable counterparty is unable to honor its obligations, IGI may be exposed to credit risk on the securities pledged and/or the risk that its access to that collateral may be stayed as a result of bankruptcy. In cases where IGI receive letters of credit from banks as collateral and one of its counterparties is unable to honor its obligations, IGI is exposed to the credit risk of the banks that issued the letters of credit. During 2018, no third parties were required to post collateral for the benefit of IGI.

Brokers present a credit risk to IGI. IGI will pay amounts owed on valid claims under its insurance and reinsurance contracts to brokers, and these brokers, in turn, will pay these amounts over to the clients making the claim under the policy underwritten by IGI. If a broker fails to make such a payment, it is possible that IGI will be liable to the client for the deficiency in a particular jurisdiction because of local laws or contractual obligations under the applicable Terms of Business Agreement in place and settlement terms and conditions as set out in the relevant contract. Likewise, in certain jurisdictions, when the insured or ceding insurer pays premiums for these policies to brokers for payment over to IGI, these premiums might be considered to have been paid and the insured or ceding insurer will no longer be liable to IGI for those amounts only where the broker was appointed as agent of IGI under the applicable Terms of Business Agreement in place and underlined terms and conditions as set out in the relevant contract, whether or not IGI has actually received the premiums from the broker, while leaving IGI at risk in respect of the underlying policy. These risks are heightened during periods characterized by financial market instability and/or an economic downturn or recession. Consequently, IGI assumes a degree of credit risk associated with its brokers. IGI has experienced some losses related to this credit risk in the past.

In addition, brokers generally are entitled to commingle payments made by, or owing to, IGI, with their other client monies. These commingled funds owing to IGI could then be claimed by other creditors or otherwise disposed of, which could prevent IGI from recovering the amount due to it. However, the majority of insurance policies have Premium Payment Warranties that enable IGI to cancel coverage in case of non-payment of premiums. Of the brokers with whom IGI transacts business, as of December 31, 2018, 84% were located in the UK, 4% were located elsewhere in Europe, 11% were located in the MENA region, Africa or Asia, the majority of which were from subsidiaries of UK brokers, and 1% were located in North, South and Central America.

IGI’s operating results may be adversely affected by the failure of policyholders, brokers or other intermediaries to honor their payment obligations.

In accordance with industry practice, IGI generally pays amounts owed on claims under its insurance and reinsurance contracts to brokers and these brokers, in turn, pay these amounts to the clients that purchased insurance and reinsurance from IGI. In some jurisdictions where IGI writes a significant amount of business, depending on whether the broker is IGI’s agent or the client’s agent, if a broker fails to make such a payment it is highly likely that IGI will be liable to the client for the deficiency because of local laws or contractual obligations. Likewise, when the client pays premiums for policies to brokers for payment to IGI, these premiums are generally considered to have been paid and, in most cases, the client will no longer be liable to IGI for those amounts whether or not IGI has actually received the premiums. Consequently, IGI assumes a degree of credit risk associated with brokers with respect to most of its (re)insurance business.

In addition, bankruptcy, liquidity problems, distressed financial conditions or the general effects of economic recession may increase the risk that policyholders may not pay a part of, or the full amount of, premiums owed to IGI despite an obligation to do so. While a majority of IGI’s policies include a premium payment warranty, it is possible that some policies may not permit IGI to cancel its insurance even if it has not received payment. If non-payment becomes widespread, whether as a result of bankruptcy, lack of liquidity, adverse economic conditions, operational failure, delay due to litigation, bad faith and fraud or other events, it could have a material adverse impact on IGI’s business and operating results.

IGI’s liquidity and counterparty risk exposures may be adversely affected by the impairment of financial institutions.

IGI routinely executes transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks and other institutions. IGI is exposed to the risk that these counterparties are unable to make payments or provide collateral to a third party when required, or that securities that IGI owns are required to be sold at a loss in order to meet liquidity, collateral or other payment requirements. In addition, IGI’s investments in various fixed income securities issued by financial institutions exposes IGI to credit risk in the event of default by these issuers. With respect to derivatives transactions that require exchange of collateral, due to mark to market movements, IGI’s risk may be exacerbated in the event of default by a counterparty. Any such losses could materially and adversely affect IGI’s business and operating results. In such an event, IGI may not receive the collateral due to IGI from the defaulted counterparty.

IGI is exposed to credit risk in certain of its business operations.

In addition to exposure to credit risk related to its investment portfolio, and reliance on brokers and other agents, IGI is subject to credit risk with respect to its reinsurance because the ceding of risk to reinsurers and retrocessionaires does not relieve IGI of its liability to the clients or companies it insures or reinsures. IGI’s reinsurers may not pay the reinsurance recoverables that they owe to IGI or they may not pay such recoverables on a timely basis. The collectability of reinsurance is subject to the solvency of the reinsurers, interpretation and application of contract language and other factors. IGI is selective in regard to its reinsurers, placing reinsurance with those reinsurers with stronger financial strength ratings from A.M. Best or S&P, a sovereign rating or a combination thereof. Despite strong ratings, the financial condition of a reinsurer may change based on market conditions. In certain instances, IGI may also require assets in trust, letters of credit or other acceptable collateral to support balances due. However, there is no certainty that it can collect on these collateral agreements in the event of a reinsurer’s default.

Additionally, IGI writes retrospectively rated policies (i.e., policies in which premiums are adjusted after the policy period based on the actual loss experience of the policyholder during the policy period). In this instance, IGI is exposed to credit risk to the extent the adjusted premium is greater than the original premium. Although IGI has not experienced any material credit losses to date, an increased inability of IGI policyholders to meet their obligations to IGI could have a material adverse effect on IGI’s financial condition and results of operations.

Although IGI has not experienced any material credit losses to date, an inability of its reinsurers or retrocessionaires to meet their obligations to IGI could have a material adverse effect on IGI’s financial condition and results of operations. IGI’s losses for a given event or occurrence may increase if IGI’s reinsurers or retrocessionaires dispute or fail to meet their obligations to IGI or the reinsurance protections purchased by IGI are exhausted or are otherwise unavailable for any reason. IGI’s failure to establish adequate reinsurance arrangements or the failure of IGI’s existing reinsurance arrangements to protect IGI from overly concentrated risk exposure could adversely affect IGI’s financial condition and results of operations.

IGI may be forced to retain a higher proportion of risks than it would otherwise prefer, incur additional expense, or purchase reinsurance from companies with a higher credit risk or it may underwrite fewer or smaller contracts or seek alternatives such as, for example, risk transfer to capital markets. Any of these factors could negatively impact IGI’s financial performance.

IGI may not be able to raise capital in the long term on favorable terms or at all.

Each of IGI’s regulated underwriting entities is required to meet stipulated regulatory capital requirements. These include capital requirements imposed by the UK Prudential Regulation Authority and the Bermuda Monetary Authority.

While the specific regulatory capital requirements vary between jurisdictions, under applicable regulatory regimes, required capital can be impacted by items such as line of business mix, product type, underwriting premium volume and reserves. The regulatory capital requirements that IGI may have to comply with are subject to change due to factors beyond its control. In general, regulatory capital requirements are expected to evolve over time as regulators continue to respond to demands for tighter controls over financial institutions, and the expectation is that these requirements will only become more stringent.

An inability to meet applicable regulatory capital requirements in the longer term due to factors beyond IGI’s control may lead to intervention by a relevant regulator which, in the interests of customer security, may require IGI to take steps to restore regulatory capital to acceptable levels, potentially by requiring IGI to raise additional funds through financings or to reduce or cease to write new business. To the extent IGI is required to raise additional external funding in the longer term, macroeconomic factors could impact IGI’s ability to access the capital markets and the bank funding market and the ability of counterparties to meet their obligations to IGI.

To the extent that cash flows generated by IGI operations are insufficient to fund future operating requirements, or that its capital position is adversely impacted by a decline in the fair value of its investment portfolio, losses from catastrophic events or otherwise, IGI may need to raise additional funds through financings or curtail its growth. Any further equity or debt financings, or capacity needed for letters of credit, if available at all, may be on terms that are unfavorable to IGI. IGI’s ability to raise such capital successfully would depend upon the facts and circumstances at the time, including IGI’s financial position and operating results, market conditions, and applicable legal issues. If IGI is unable to obtain adequate capital when needed, Pubco’s business, results of operations and financial condition would be adversely affected. It also may be required to liquidate fixed maturities or equity securities, which may result in realized investment losses.

IGI’s access to capital may be impaired if regulatory authorities or rating agencies take negative actions against it. IGI’s inability to obtain adequate capital when needed could have a negative impact on its ability to invest in, or take advantage of opportunities to expand, its businesses, such as possible acquisitions or the creation of new ventures. Any of these effects could have a material adverse effect on IGI’s results of operations and financial condition.

IGI’s future capital requirements depend on many factors, including its ability to write new business successfully, deploy capital into more profitable business lines, identify acquisition opportunities, manage investments and preserve capital in volatile markets, and establish premium rates and reserves at levels sufficient to cover losses. IGI’s operations are subject to significant volatility in capital due to its exposure to potentially significant catastrophic events. IGI monitors its capital adequacy on an ongoing basis. To the extent IGI’s funds are insufficient to fund future operating requirements or cover claims losses, IGI may need to raise additional funds through corporate finance transactions or curtail its growth and reduce its liabilities. Any such financing, if available at all, may be on terms that are not favorable to IGI. IGI’s ability to raise such capital successfully would depend upon the facts and circumstances at the time, including its financial position and operating results, market conditions and applicable regulatory filings and legal issues. If IGI cannot obtain adequate capital on favorable terms, or obtain it at all, IGI’s business, financial condition and operating results could be adversely affected.

IGI is involved in legal and other proceedings from time to time, and it may face damage to its reputation or legal liability as a result.

In the ordinary course of business, IGI is involved in lawsuits, arbitrations and other formal and informal dispute resolution procedures in a variety of jurisdictions, the outcomes of which will determine its rights and obligations under insurance, reinsurance and other contractual agreements or under tort laws or other legal obligations. Any lawsuit brought against IGI or legal proceeding that IGI may bring to enforce its rights could result in substantial costs, divert the time and attention of IGI’s management, result in counterclaims (whether meritorious or as a litigation tactic), result in substantial monetary judgments or settlement costs and harm IGI’s reputation, any of which could seriously harm IGI’s business.

From time to time, IGI may institute or be named as a defendant in legal proceedings, and it may be a claimant or respondent in arbitration proceedings. These proceedings have in the past involved, and may in the future involve, coverage or other disputes with ceding companies, disputes with parties to which IGI transfers risk under reinsurance arrangements, disputes with other counterparties or other matters. IGI is also involved, from time to time, in investigations and regulatory proceedings, certain of which could result in adverse judgments, settlements, fines and other outcomes. IGI could also be subject to litigation risks arising from potential employee misconduct, including

non-compliance with internal policies and procedures. IGI cannot determine with any certainty what new theories of recovery may evolve or what their impact may be on IGI’s business. Multi-party or class action claims may present additional exposure to substantial economic, non-economic or punitive damage awards. The loss of even one of these claims, if it results in a significant damage award or a judicial ruling that was otherwise detrimental, could create a precedent in the industry that affects a great many future or unrelated claims and so could have a material adverse effect on IGI’s operating results and financial condition.

Except as described under “Business of IGI — Litigation,” IGI is not currently subject to any pending litigation which individually or in the aggregate would reasonably be expected to have a material adverse effect on its business, financial condition or results of operations. However, in the future, substantial legal liability could materially adversely affect IGI’s business, financial condition and results of operations, and could cause significant reputational harm.

Information technology systems that IGI uses could fail or suffer a security breach, which could have a material adverse effect on IGI or result in the loss of sensitive information.

IGI’s business is dependent upon the operational effectiveness and security of its enterprise systems and those maintained by third parties. Among other things, IGI relies on these systems to interact with producers, insureds, customers, clients, and other third parties, to perform actuarial and other modeling functions, to underwrite business, to prepare policies and process premiums, to process claims and make claims payments, to prepare internal and external financial statements and information, as well as to engage in a wide variety of other business activities. A significant failure of IGI’s enterprise systems, or those of third parties upon which it may rely, whether because of a natural disaster, network outage or a cyber-attack on IGI’s systems, could compromise IGI’s personal, confidential and proprietary information as well as that of its customers and business partners, impede or interrupt its business operations and result in other negative consequences, including remediation costs, loss of revenue, additional regulatory scrutiny and fines, litigation and monetary and reputational damages.

IGI’s computer systems and network infrastructure present security risks and could be susceptible to hacking, computer viruses, data breaches, or ransomware attacks. The cyber-attack threat landscape is evolving, and there is a risk that increases in the frequency and severity of cyber-attacks on IGI’s clients could adversely affect IGI’s financial condition and operating results. Any such failure could affect IGI’s operations and could materially adversely affect IGI’s results of operations by requiring it to expend significant resources to correct the defect, as well as by exposing it to litigation or losses not covered by insurance.

IGI’s operations rely on the secure processing, transmission and storage of confidential information in its computer systems and networks and the cloud. IGI’s technologies, systems and networks may become the target of cyber-attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of IGI’s or its insureds’ or reinsureds’ confidential, proprietary and other information, or otherwise disrupt IGI’s or its insureds’, reinsureds’ or other third parties’ business operations, which in turn may result in legal claims, regulatory scrutiny and liability, reputational damage, the incurrence of costs to eliminate or mitigate further exposure and the loss of customers. Although to date IGI has not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that it will not suffer such losses in the future. While IGI makes efforts to maintain the security and integrity of its information technology networks and related systems, and it has implemented various measures and an incident response protocol to manage the risk of, or respond to, a security breach or disruption, there can be no assurance that its security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging. IGI’s risk and exposure to these matters remains heightened because of, among other things, the evolving nature of these threats and the outsourcing of some of its business operations. As a result, cyber-security and the continued development and enhancement of IGI’s controls, processes and practices designed to protect IGI’s systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority. As cyber-threats continue to evolve, IGI may be required to expend significant additional resources to continue to modify or enhance its protective measures or to investigate and remediate any information security vulnerabilities.

Although IGI has implemented controls and has taken protective actions to reduce the risk of an enterprise failure and protect against a security breach, such measures may be insufficient to prevent, or mitigate the effects of, a global natural disaster or a cyber-attack on its systems that could result in liability to IGI, cause its data to be corrupted or stolen and cause IGI to commit resources, management time and money to prevent or correct those failures.

Employee or agent negligence, error or misconduct may be difficult to detect and prevent, and certain failures, including internal or external fraud, operational errors, systems malfunctions, or cyber-security incidents, could materially adversely affect IGI’s operations.

Losses arising from employee or agent negligence, error or misconduct may result from, among other things, dealings with third party brokers, fraud, errors, failure to document transactions properly or obtain proper internal authorization, or failure to comply with regulatory requirements. It is not always possible for IGI to deter or prevent employee or agent misconduct and the precautions taken to prevent and detect this activity may not be effective in all cases. Resultant losses could have a material adverse effect on IGI’s business, results of operations and financial condition.

IGI’s business depends on its ability to process a large number of increasingly complex transactions. If any of IGI’s operational, accounting, or other data processing systems fail or have other significant shortcomings, IGI could be materially adversely affected. Similarly, IGI depends on its employees and could be materially adversely affected if one or more of its employees causes a significant operational breakdown or failure, either as a result of human error, intentional sabotage or fraudulent manipulation of its operations or systems. Third parties with whom IGI does business, including vendors that provide services or security solutions for its operations, could also be sources of operational and information security risk to IGI, including from breakdowns, failures, or capacity constraints of their own systems or employees. Any of these occurrences could diminish IGI’s ability to operate its business, or cause financial loss, potential liability to insureds, inability to secure insurance, reputational damage or regulatory intervention, which could materially adversely affect IGI.

In addition, IGI’s computer systems and network infrastructure present security risks and could be susceptible to hacking, computer viruses, data breaches, or ransomware attacks. Any such failure could affect IGI’s operations and could materially adversely affect its results of operations by requiring IGI to expend significant resources to correct the defect, as well as by exposing IGI to litigation or losses not covered by insurance. Although IGI has business continuity plans and other safeguards in place, its business operations may be materially adversely affected by significant and widespread disruption to its physical infrastructure or operating systems and those of third party service providers that support its business.

Disruptions or failures in the physical infrastructure or operating systems that support IGI’s business and customers, or cyber-attacks or security breaches of the networks, systems or devices that IGI’s customers use to access its products and services, could result in customer attrition, regulatory fines, penalties or intervention, reputational damage, reimbursement or other compensation costs, and/or additional compliance costs, any of which could materially adversely affect IGI’s financial condition or results of operations.

IGI’s operating results may be adversely affected by an unexpected accumulation of attritional losses.

In addition to IGI’s exposures to catastrophes and other large losses as discussed above, IGI’s operating results may be adversely affected by unexpectedly large accumulations of attritional losses. Attritional losses are defined as losses from claims excluding catastrophes and large one-off claims. IGI seek to manage this risk by using appropriate underwriting processes to guide the pricing, terms and acceptance of risks. These processes, which may include pricing models, are intended to ensure that premiums received are sufficient to cover the expected levels of attritional losses and a contribution to the cost of catastrophes and large losses where necessary. However, it is possible that IGI’s underwriting approaches or IGI’s pricing models may not work as intended and that actual losses from a class of risks may be greater than expected. IGI’s pricing models are also subject to the same limitations as the models used to assess IGI’s exposure to catastrophe losses noted above. Accordingly, these factors could adversely impact IGI’s business, financial condition and/or results of operations.

IGI is dependent on the use of third party software and data, and any reduction in third party product quality or any failure to comply with IGI’s licensing requirements could have a material adverse effect on IGI’s business, financial condition or results of operations.

IGI relies on third party software and data in connection with IGI’s underwriting, claims, investment, accounting and finance activity. IGI depends on the ability of third party software and data providers to deliver and support reliable products, enhance their current products, develop new products on a timely and cost-effective basis, and respond to emerging industry standards and other technological changes. Third party software and data IGI uses may become obsolete or incompatible with versions of products that it will be using in the future, or may lead to temporary or permanent data loss when upgraded to newer versions.

IGI anticipates that it will continue to rely on such third party software in the future. Although IGI believes that there are commercially reasonable alternatives to the third party software it currently licenses, this may not always be the case, or it may be difficult or costly to replace such software. In addition, integration of new third party software may require significant work and require substantial investment of IGI’s time and resources. IGI’s use of additional or alternative third party software would require it to enter into license agreements with third parties, which may not be available on commercially reasonable terms or at all. Many of the risks associated with the use of third party software cannot be eliminated, and these risks could negatively affect IGI’s business.

IGI also monitors its use of third party software and data to comply with applicable licence requirements. Despite IGI’s efforts, such third parties may challenge IGI’s use of such software and data, resulting in loss of rights or costly legal actions. IGI’s business could be materially adversely affected if IGI is not able, on a timely basis, to effectively replace the functionality provided by software or data that becomes unavailable or fails to operate effectively for any reason. Any of the foregoing could have a material adverse effect on IGI’s results of operations.

If IGI is unable to keep pace with the technological advancements in the insurance industry, its ability to compete effectively could be impaired.

IGI is committed to developing and maintaining information technology systems that will allow its insurance subsidiaries to compete effectively. There can be no assurance that the development of current technology for future use will not result in IGI being competitively disadvantaged, especially with those carriers that have greater resources. If IGI is unable to keep pace with the advancements being made in technology, its ability to compete with other insurance companies who have advanced technological capabilities will be negatively affected. Further, if IGI is unable to effectively execute and update or replace its key legacy technology systems as they become obsolete or as emerging technology renders them competitively inefficient, IGI’s competitive position and cost structure could be adversely affected.

Compliance with laws and regulations governing the processing of personal data and information may impede IGI’s services or result in increased costs. The failure to comply with such data privacy laws and regulations could result in material fines or penalties imposed by data protection or financial services conduct regulators and/or awards of civil damages and any data breach may have a material adverse effect on IGI’s reputation, results of operations or financial condition, or have other adverse consequences.

IGI’s business relies on the processing of data in many jurisdictions and the movement of data across national borders. The collection, storage, handling, disclosure, use, transfer and security of personal information that occurs in connection with IGI’s business is subject to federal, state and foreign data privacy laws. These legal requirements are not uniform and continue to evolve, and regulatory scrutiny in this area is increasing around the world. In many cases, these laws apply not only to third party transactions, but also to transfers of information among IGI and its subsidiaries. Privacy and data protection laws may be interpreted and applied differently from country to country and may create inconsistent or conflicting requirements.

The General Data Privacy Regulation (the “GDPR”) came into force throughout the European Union (the “E.U.”) in May 2018 and has extra-territorial effect. It requires all companies processing data of E.U. citizens to comply with the GDPR, regardless of the company’s location. It also imposes obligations on E.U. companies processing data of non-E.U. citizens. The GDPR imposes new requirements regarding the processing of personal data and confers new rights on data subjects including the “right to be forgotten” and the right to “portability” of personal data. The GDPR imposes significant punishments for non-compliance which could result in a penalty of up to 4% of a company’s global annual revenue.

Compliance with the enhanced obligations imposed by the GDPR requires investment in appropriate technical or organizational measures to safeguard the rights and freedoms of data subjects, may result in significant costs to IGI’s business and may require IGI from time to time to further amend certain of its business practices. Enforcement actions, investigations and the imposition of substantial fines and penalties by regulatory authorities as a result of data security incidents and privacy violations increased dramatically during 2018. The enactment of more restrictive laws, rules, regulations, or future enforcement actions or investigations could impact IGI through increased costs or restrictions on its business, and noncompliance could result in regulatory penalties, significant legal liability, and reputational damage and cause IGI to lose business.

In addition, unauthorized disclosure or transfer of sensitive or confidential client or IGI data, whether through systems failure, employee negligence, fraud or misappropriation, by IGI or other parties with whom it does business, could subject IGI to significant litigation, monetary damages, regulatory enforcement actions, fines and criminal prosecution in one or more jurisdictions. Such events could also result in negative publicity and damage to IGI’s reputation and cause IGI to lose business, which could therefore have a material adverse effect on IGI’s results of operations.

IGI is exposed to fluctuations in exchange rates which may adversely affect IGI’s operating results.

IGI is exposed to currency risk mainly on insurance written premiums and incurred claims that are denominated in a currency other than IGI’s functional currency. The currencies in which these transactions are primarily denominated are sterling (GBP) and euro (EUR). As a significant portion of IGI’s transactions are denominated in U.S. dollars, this reduces currency risk. Intra-group transactions are primarily denominated in U.S. dollars.

Part of IGI’s monetary assets and liabilities are denominated in a currency other than the functional currency of IGI and are subject to risks associated with currency exchange fluctuation. IGI reduces some of this currency exposure by maintaining some of its bank balances in foreign currencies in which some of its insurance payables are denominated.

IGI is exposed to changes in exchange rates arising from the mismatch of cash flows due to currency exchange fluctuations.

IGI is also subject to currency translation risk, which arises from the translation into its functional currency for reporting purposes of income from operations conducted in other currencies, which can cause volatility in reported earnings from IGI’s business conducted overseas and translation gains and losses. In preparing its financial statements, IGI’s uses period-end rates to translate all monetary assets and liabilities in foreign currencies in the balance sheet to its functional currency and presentational currency. The non-monetary assets and liabilities, namely unearned premium reserves, loss reserves and deferred acquisition costs, are measured at fair value and translated using the exchange rates as of the date of the measurement of fair value.

IGI writes business on a worldwide basis, and its results of operations may be affected by fluctuations in the value of currencies other than the U.S. Dollar. The primary foreign currencies in which IGI operates are the Euro, the British Pound Sterling, and the Japanese Yen. Changes in foreign currency exchange rates may reduce IGI’s revenues, increase its liabilities and costs and cause fluctuations in the valuation of its investment portfolio. IGI may therefore suffer losses solely as a result of exchange rate fluctuations. In order to mitigate IGI’s exposure to foreign currency fluctuations in its net insurance liabilities, IGI has invested and expects to continue to invest in securities denominated in currencies other than the U.S. Dollar. In addition, IGI may replicate investment positions in foreign currencies using derivative financial instruments. IGI cannot assure you that it will be able to manage these risks effectively or that they will not have an adverse effect on its business, financial condition or results of operations.

The exit of the United Kingdom from the European Union could have a material adverse effect on IGI’s business.

On January 31, 2020, the UK left the EU, commonly referred to as “Brexit”. Under the terms of the Brexit withdrawal agreement between the UK and the EU, the UK has entered a transition period whereby it is no longer a member of the EU but will remain a member of the single market and customs union until December 31, 2020. The purpose of the transition period is to provide time for the UK and the EU to negotiate their future relationship. Arrangements for trade with the EU will remain essentially unchanged until the end of the transition period. EU law will continue to apply in the UK during the transition period and therefore passporting will continue, as will consumer rights and protections derived from EU law. At the end of transition period, the UK’s relationship with the EU will be determined by the new agreements it has entered into on trade and other areas of co-operation. In the absence of the UK and the EU agreeing on a trade deal to begin when the transition period ends, or agreeing on an extension to the transition period, the UK will exit the transition period on December 31, 2020 trading on World Trade Organization terms with the EU. Other areas of co-operation between the UK and the EU may also be affected if no deal is reached.

Brexit has adversely affected global financial markets. The uncertainty surrounding the implementation and effect of Brexit could continue to have an adverse effect on markets, including foreign currency markets, and could increase market volatility and illiquidity. The uncertainty could contribute to a decline in equity markets, bond markets, interest rates and property prices.

The nature of the future relationship between the UK and the EU remains uncertain. Depending on the outcome of the negotiations, the UK could lose “passporting” rights for UK firms across the EEA and access to the EU’s single market, which could have a detrimental impact on the UK economy. Any negative change in barrier-free access between the UK and EU may affect the ability of IGI to rely on the EU’s market freedoms, in particular free movement of services. If companies based in the UK lose passporting rights throughout the EU as a result of Brexit, IGI has developed contingency plans to ensure that it will continue to be able to provide insurance services throughout Europe. This plan includes setting up a new insurance subsidiary in Belgium, IGI Europe. The application process for this subsidiary is still ongoing. IGI has evaluated the impact on its business in the event that its UK contingency plans are not implemented on a timely basis and IGI became unable to operate business in Europe through its UK operations. As of June 30, 2019, IGI’s UK subsidiary had approximately $8.2 million of European — domiciled direct business measured in terms of gross written premiums (excluding $6.2 million of business in Norway which is a member of the EEA but not the EU). Therefore, IGI has calculated that, based on its business levels at June 30, 2019, IGI’s UK subsidiary had approximately $8.2 million of business which would not be able to be renewed in the event that its UK contingency plans are not implemented on a timely basis.

Depending on the outcome of the negotiations on the future relationship between the UK and EU, the UK could lose access to the single EU market and to free trade deals with several countries that already have agreements with the EU. Such a decline in trade could affect the attractiveness of the UK and impact IGI’s UK business. IGI also faces risks associated with the potential uncertainty and consequences related to Brexit, including with respect to volatility in financial markets, exchange rates and interest rates. These uncertainties could increase the volatility of, or reduce, IGI’s investment results in particular periods or over time. Brexit could adversely affect European or worldwide political, economic or market conditions and could contribute to instability in political institutions and regulatory agencies. The regulatory landscape following Brexit also remains uncertain. Brexit could lead to divergence between UK and EU regulatory systems as the UK determines which EU laws and regulations to maintain and which to replace, which could have negative tax, accounting and financial reporting obligations.

Any of these effects of Brexit, and others IGI cannot anticipate, could have a material adverse effect on IGI’s business, results of operations and financial condition.

Intra-group arrangements found not to be on arm’s length terms may adversely affect IGI’s tax charge.

Trading relationships between members of IGI in different jurisdictions will in general be subject to the transfer pricing regimes of the jurisdictions concerned. IGI intends to operate intra-group trading arrangements and relationships on demonstrable and documented arm’s length terms. If, however, such trading arrangements were found not to be on arm’s length terms, adjustments might be required to taxable profits in the relevant jurisdictions, which could lead to an increase in IGI’s overall tax charge; this could have a material adverse effect on IGI’s results of operations and financial condition.

Legislation to adopt these standards has been enacted or is currently under consideration in a number of jurisdictions, including country-by-country reporting. As a result, IGI’s earnings may be subject to income tax, or intercompany payments may be subject to withholding tax, in jurisdictions where they are not currently taxed or at higher rates of tax than currently taxed. The applicable tax authorities could also attempt to apply such taxes to past earnings and payments. Any such additional taxes could materially increase IGI’s effective tax rate. Also, the adoption of these standards may increase the complexity and costs associated with tax compliance and adversely affect IGI’s financial position and results of operations.

Changes in accounting principles and financial reporting requirements could impact IGI’s reported financial results and reported financial condition.

IGI’s financial statements are prepared in accordance with international financial reporting standards (“IFRS”) as issued by the International Accounting Standards Board (the “IASB”). The IASB, or other regulatory bodies, periodically introduce modifications to financial accounting and reporting standards or issue new financial accounting and reporting standards under which IGI prepares its consolidated financial statements. These changes can materially impact the means by which IGI reports financial information, affecting IGI’s results of operations. Also, IGI could be required to apply new or revised standards retroactively.

The impact of unanticipated developments in accounting practices and standards, particularly those that apply to insurance companies, cannot be predicted but may affect the calculation of net earnings, shareholders’ equity and

other relevant financial statement line items. In addition, such changes may cause additional volatility in reported earnings, decrease the understandability of IGI’s financial results and affect the comparability of its reported results with the results of others.

The preparation of consolidated financial statements requires IGI to make many estimates and judgments that affect the reported amounts of assets, liabilities (including claims and claim expense reserves), shareholders’ equity, revenues and expenses, and related disclosures. IGI bases its estimates on historical experience, where possible, and on various other assumptions it believes to be reasonable under the circumstances, which form the basis for its judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. IGI’s judgments and estimates may not reflect its actual results. IGI utilizes actuarial models as well as historical insurance industry loss development patterns to establish its claims and claim expense reserves. Actual claims and claim expenses paid may deviate, perhaps materially, from the estimates reflected in its financial statements.

Additionally, IGI’s internal controls over financial reporting may have gaps or other deficiencies and there is no guarantee that significant deficiencies or material weaknesses in internal controls may not occur in the future. Any such gaps or deficiencies may require significant resources to remediate and may also expose IGI to litigation, regulatory fines or penalties, or other losses. Inadequate process design or a failure in operating effectiveness could result in a material misstatement of IGI’s financial statements due to, but not limited to, poorly designed systems, changes in end-user computing, poorly designed IT reports, ineffective oversight of outsourced processes, failure to perform relevant management reviews, accounting errors or duplicate payments, any of which could result in a restatement of financial accounts.

If actual renewals of IGI’s existing policies and contracts do not meet expectations, IGI’s gross written premiums in future fiscal periods and IGI’s future operating results could be materially adversely affected.

A majority of IGI’s insurance policies and reinsurance contracts are for a one-year term. IGI makes assumptions about the renewal rate and pricing of the prior year’s policies and contracts in IGI’s financial forecasting process. If actual renewals do not meet expectations, IGI’s gross written premiums in future fiscal periods and IGI’s future operating results and financial condition could be materially adversely affected.

IGI may be adversely impacted by inflation.

IGI monitors the risk that the principal markets in which it operates could experience increased inflationary conditions, which would, among other things, cause loss costs to increase, and impact the performance of its investment portfolio. IGI believes the risk of inflation across its key markets is increasing. The impact of inflation on loss costs could be more pronounced for those lines of business that are considered to be long-tail in nature, as they require a relatively long period of time to finalize and settle claims. Changes in the level of inflation also result in an increased level of uncertainty in IGI’s estimation of loss reserves, particularly for specialty long-tail segment lines of business. The onset, duration and severity of an inflationary period cannot be estimated with precision.

IGI’s efforts to expand in targeted geographical markets and lines of business may not be successful and may create enhanced risks.

A number of IGI’s planned business initiatives involve expanding in targeted geographical markets and lines of business. To develop new markets and business lines, IGI may need to make substantial capital and operating expenditures, which may adversely affect its results in the near term. In addition, the demand for IGI’s products in new markets and lines of business may not meet IGI’s expectations. To the extent IGI is able to expand in new markets and business lines, its risk exposures may change and the data and models IGI uses to manage such exposures may not be as sophisticated as those IGI uses in existing markets and business lines. This, in turn, could lead to losses in excess of expectations. Moreover, IGI is considering setting up new offices and increasing staff at existing offices as part of its growth strategy. Such growth, which may include hiring additional underwriters, could make it more difficult for IGI to monitor and enforce compliance with internal underwriting authorities, limits and controls. IGI cannot be certain that it will be successful or identify attractive targets in these new markets.

The announcement of the Business Combination may adversely affect the business, financial condition and results of operations of IGI.

IGI is subject to business uncertainties and contractual restrictions while the Business Combination is pending and uncertainty about the effect of the Business Combination on IGI’s employees and the brokers, insurers, cedants, customers and other third parties with whom IGI has a business relationship may have an adverse effect on the business, operations and financial condition regardless of whether or not the Business Combination is completed. These risks include the following, all of which could be exacerbated by a delay in the completion of the Business Combination:

•        IGI’s ratings may be adversely affected, which could have an adverse effect on business, financial condition and operating results;

•        Brokers, insurers, cedants, customers and other third parties with whom IGI has a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships with IGI as a result of the Business Combination, which could negatively affect IGI’s revenues, earnings and cash flows;

•        The manner in which brokers, insurers, cedants and other third parties perceive IGI may be negatively impacted, which in turn could affect IGI’s ability to compete for or write new business or obtain renewals in the marketplace;

•        Current and prospective employees may experience uncertainty about their future roles with IGI, which might adversely affect IGI’s ability to attract and retain employees who generate and service IGI’s business;

•        Time and resources committed by IGI management to matters relating to the Business Combination could otherwise have been devoted to IGI’s existing business or to pursuing other beneficial opportunities; and

•        IGI could be subject to litigation related to the Business Combination, including litigation related to any failure to complete the Business Combination or related to any enforcement proceeding commenced against IGI to perform its obligations under the Business Combination Agreement.

In addition, IGI expects to pay significant costs relating to the Business Combination, such as financial, legal, accounting, advisory and printing fees, whether or not the Business Combination is completed.