Global Indemnity's Q4 Earnings Shine, Revs Up
Global Indemnity Plc (GBLI) reported operating earnings per share (EPS) of 76 centsfor the fourth quarter of 2013. The results outpaced the Zacks Consensus Estimate of 31 cents and the year-ago figure of 18 cents. Consequently, operating net income surged over four-folds to $19.1 million from $4.5 million in the year-ago period.
Including extraordinary items, reported net income escalated to $33.7 million or $1.34 per share from $4.4 million or 17 cents a share in the prior-year quarter. Growth primarily stemmed from improved premiums’ growth in insurance operations and lower loss and loss adjusted expenses (:LAE), partially offset by lower investment income and higher-than-expected operating and underwriting expenses.
Global Indemnity’s total revenue soared 41.3% year over year to $101 million. The upside was led by a 13.7% rise in net earned premiums, bringing the figure to $69.6 million. Additionally, net realized investment gains surged to $17.2 million from a loss of $0.2 million in the year-ago quarter. However, net investment income declined 13.6% to $17.2 million, while other revenues improved to $5.3 million from $0.1 million in the year-ago quarter.
However, acquisition and underwriting expenses rose 13.4% over the prior-year quarter, whereas operating expenses grew 50%, partially offset by a 23% plunge in LAE along with 80.5% lower interest expenses. Consequently, the combined ratio improved significantly to 85.5% against 106.7% in the year-ago quarter.
Full-Year 2013 Highlights
For full-year 2013, Global Indemnity’s operating EPS stood at $1.61, exceeding the 2012 equivalent of $1.10. Operating net income soared 38.2% year over year to $40.5 million. On a GAAP basis, net income rose to an astounding $61.7 million or $2.45 per share in 2013 from $34.8 million or $1.30 per share in 2012.
Total revenue increased 8.9% year over year to $319.1 billion, primarily driven by higher premiums and net realized investment gains. Moreover, the combined ratio improved to 96.0% from 104.2% in 2012, reflecting lower loss ratio.
Financial Update
At the end of Dec 2013, Global Indemnity held cash and cash equivalents of $1.57 billion, up from $1.53 billion at 2012-end. Total assets climbed to $1.91 billion from $1.90 billion at 2012-end, whereas shareholder equity rose to $873.3 million from $806.6 million at the end of Dec 2012. Additionally, book value per share grew 7.8% from 2012-end to $34.65 at 2013-end.
Other Stocks
While Global Indemnity carries a Zacks Rank #3 (Hold), other top-ranked insurers include RLI Corp. (RLI), White Mountains Insurance Group Ltd. (WTM) and OneBeacon Insurance Group Ltd. (OB), each carrying a Zacks Rank #1 (Strong Buy).
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