U.S. Markets closed

Global Indemnity Limited Reports Third Quarter 2019 Financial Results

GEORGE TOWN, Cayman Islands, Nov. 05, 2019 (GLOBE NEWSWIRE) -- Global Indemnity Limited (GBLI) today reported net income for the nine months ended September 30, 2019 of $41.0 million or $2.86 per share, an increase of $24.4 million or 146.6%, compared to the same period in 2018. Gross Premiums Written increased by 14.3% to $478.7 million for the nine months ended September 30, 2019, compared to $418.7 million for the same period in 2018. The combined ratio for the first nine months of 2019 was 92.8%, a 5.5 point improvement over the same period in 2018 and total investment return was 6.2%.  Book value per share increased by 12.0% (net of Company dividends of $0.75 per share to shareholders) during the nine months, from $44.21 per share at December 31, 2018 to $49.53 per share at September 30, 2019.

 
Selected Operating and Balance Sheet Information 
(Dollars in millions, except per share data)
 
  For the Nine Months
Ended September 30,
  As of
September 30,
  As of
December 31,
  2019
  2018
    2019     2018
                           
Gross Premiums Written $ 478.7     $ 418.7   Book value per share (1) $ 49.53   $ 44.21
Net Premiums Written $ 421.3     $ 360.6   Shareholders’ equity $ 707.4   $ 629.1
                Cash and invested assets (2) $ 1,614.2   $ 1,510.2
Net income $ 41.0     $ 16.6              
Net income per share $ 2.86     $ 1.16   (1) Net of cumulative Company dividends to shareholders totaling $1.75 per share and $1.00 per share as of September 30, 2019 and December 31, 2018, respectively.
                (2) Including receivable/(payable) for securities sold/(purchased)
Combined ratio analysis:                      
Loss ratio   52.7 %     57.1 %        
Expense ratio   40.1 %     41.2 %        
Combined ratio   92.8 %     98.3 %        
                       

About Global Indemnity Limited and its subsidiaries

Global Indemnity Limited (GBLI), through its several direct and indirect wholly owned subsidiary insurance and reinsurance companies, provides both admitted and non-admitted specialty property and specialty casualty insurance coverages and individual policyholder coverages in the United States, as well as reinsurance worldwide.  Global Indemnity Limited’s four primary segments are:

  • United States Based Commercial Specialty
     
  • United States Based Specialty Property
     
  • United States Based Farm, Ranch, & Stable
     
  • Bermuda Based Reinsurance

The Company’s Commercial Specialty segment was formerly known as Commercial Lines. During the 1st quarter of 2019, the Company re-evaluated its Personal Lines segment and determined that Personal Lines should be bifurcated into two reportable segments: Specialty Property and Farm, Ranch, & Stable.

For more information, visit the Global Indemnity Limited’s website at http://www.globalindemnity.ky.

Forward-Looking Information

The forward-looking statements contained in this press release [1] do not address a number of risks and uncertainties.  Investors are cautioned that Global Indemnity’s actual results may be materially different from the estimates expressed in, or implied, or projected by, the forward looking statements. These statements are based on estimates and information available to us at the time of this press release. All forward-looking statements in this press release are based on information available to Global Indemnity as of the date hereof. Please see Global Indemnity’s filings with the Securities and Exchange Commission for a discussion of risks and uncertainties which could impact the company and for a more detailed explication regarding forward-looking statements. Global Indemnity does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.   

 [1] Disseminated pursuant to the "safe harbor" provisions of Section 21E of the Security Exchange Act of 1934.

Global Indemnity Limited’s Combined Ratio for the Nine Months Ended September 30, 2019 and 2018           

For the nine months ended September 30, 2019, the Company recorded a combined ratio of 92.8% (Loss Ratio 52.7% and Expense Ratio 40.1%) compared to 98.3% (Loss Ratio 57.1% and Expense Ratio 41.2%)  for the nine months ended September 30, 2018.

  • The current accident year property loss ratio improved by 7.5 points to 59.5% in 2019 from 67.0% in 2018 primarily due to lower claims frequency and severity in the U.S. Insurance Operations.
     
  • The current accident year casualty loss ratio improved by 3.8 points to 56.9% in 2019 compared to 60.7% in 2018 primarily due to lower claims frequency and severity in the U.S. Insurance Operations.     

Calendar year results for the nine months ended September 30, 2019 include $23.0 million in favorable loss development mainly from the U.S. Insurance Operations. 
  
Global Indemnity Limited’s Gross and Net Premiums Written Results by Segment for the Nine Months Ended September 30, 2019 and 2018

  Nine Months Ended September 30,
  Gross Premiums Written   Net Premiums Written
    2019     2018   %
Change
    2019     2018   %
Change
Commercial Specialty $ 214,467   $ 186,923   14.7 %   $ 185,202   $ 165,817   11.7 %
Specialty Property   128,771     132,286   (2.7 %)     110,668     101,542   9.0 %
Farm, Ranch, & Stable   65,872     59,496   10.7 %     55,861     53,239   4.9 %
Reinsurance   69,589     39,965   74.1 %     69,590     39,959   74.2 %
Total $ 478,699   $ 418,670   14.3 %   $ 421,321   $ 360,557   16.9 %

Commercial Specialty Operations: Gross premiums written and net premiums written increased 14.7% and 11.7%, respectively, for the nine months ended September 30, 2019 as compared to the same period in 2018.  This increase is primarily driven by new programs and increases in excess & surplus lines submissions.

Specialty Property Operations:  Gross premiums written decreased by 2.7% and net premiums written increased by 9.0% for the nine months ended September 30, 2019 as compared to the same period in 2018. The decrease in gross premiums written was primarily due to a continued reduction of catastrophe exposed business.  As a result of reducing its catastrophe exposure, Specialty Property ceded less premiums to reinsurers, which contributed to the growth in net premiums written. 

Farm, Ranch, & Stable Operations:  Gross premiums written increased by 10.7% and net premiums written increased by 4.9% for the nine months ended September 30, 2019 as compared to the same period in 2018. The increase in gross and net premiums written was primarily due to an increase in pricing as well as new agent appointments. 

Reinsurance Operations: Gross premiums written and net premiums written increased 74.1% and 74.2%, respectively, for the nine months ended September 30, 2019, as compared to the same period in 2018, mainly due to entering a new casualty treaty during 2019 and rate increases within the property catastrophe line of business.

Note: Tables Follow


GLOBAL INDEMNITY LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and shares in thousands, except per share data)

    For the Three Months   For the Nine Months
    Ended September 30, Ended September 30,
    2019   2018   2019   2018
Gross premiums written   $ 157,177   $ 135,606   $ 478,699   $ 418,670  
                           
Net premiums written   $ 138,836   $ 116,233   $ 421,321   $ 360,557  
                           
Net premiums earned   $ 133,312   $ 120,528   $ 383,602   $ 342,447  
Net investment income     11,348     11,750     32,393     34,108  
Net realized investment gains (losses)     (2,690   5,319     11,290     7,833  
Other income     264     411     1,274     1,289  
Total revenues     142,234     138,008     428,559     385,677  
                           
Net losses and loss adjustment expenses (1)     73,583     80,493     201,979     195,426  
Acquisition costs and other underwriting expenses     53,366     48,680     153,643     141,196  
Corporate and other operating expenses     3,858     3,475     11,702     23,653  
Interest expense     5,023     4,924     15,088     14,725  
Income before income taxes     6,404     436     46,147     10,677  
Income tax expense (benefit)     (317   (3,292   5,163     (5,944 )
Net income   $ 6,721   $ 3,728   $ 40,984   $ 16,621  
                           
Weighted average shares outstanding–basic     14,203     14,100     14,182     14,083  
                           
Weighted average shares outstanding–diluted     14,328     14,347     14,329     14,321  
                           
Net income per share – basic   $ 0.47   $ 0.26   $ 2.89   $ 1.18  
                           
Net income per share – diluted   $ 0.47   $ 0.26   $ 2.86   $ 1.16  
                           
Cash dividends declared per share   $ 0.25   $ 0.25   $ 0.75   $ 0.75  
                           
Combined ratio analysis: (2)                          
Loss ratio     55.2     66.8     52.7     57.1  
Expense ratio     40.0     40.4     40.1     41.2  
Combined ratio     95.2     107.2     92.8     98.3  

(1) Includes loss reductions related to prior years of $7.0 million and $12.0 million for the three months ended September 30, 2019 and 2018, respectively and $23.0 million and $27.5 million for the nine months ended September 30, 2019 and 2018, respectively.  
(2) The loss ratio, expense ratio and combined ratio are GAAP financial measures that are generally viewed in the insurance industry as indicators of underwriting profitability.  The loss ratio is the ratio of net losses and loss adjustment expenses to net premiums earned.  The expense ratio is the ratio of acquisition costs and other underwriting expenses to net premiums earned.  The combined ratio is the sum of the loss and expense ratios.


GLOBAL INDEMNITY LIMITED
CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands)


ASSETS
  (Unaudited)
September 30, 2019
  December 31, 2018
Fixed Maturities:                
  Available for sale securities, at fair value
(amortized cost: 2019 - $1,203,984 and 2018 - $1,257,830)
  $ 1,234,435     $ 1,235,155  
Equity securities, at fair value     262,367       124,747  
Other invested assets     40,052       50,753  
    Total investments     1,536,854       1,410,655  
                     
Cash and cash equivalents     78,181       99,497  
Premiums receivable, net     112,992       87,679  
Reinsurance receivables, net     83,012       114,418  
Funds held by ceding insurers     48,751       49,206  
Federal income taxes receivable     11,136       10,866  
Receivable for securities sold     -       15  
Deferred federal income taxes     36,479       48,589  
Deferred acquisition costs     70,861       61,676  
Intangible assets     21,623       22,020  
Goodwill     6,521       6,521  
Prepaid reinsurance premiums     17,763       20,594  
Other assets     59,983       28,530  
    Total assets   $   2,084,156     $   1,960,266  
                     
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Liabilities:                
Unpaid losses and loss adjustment expenses   $   633,287     $   680,031  
Unearned premiums     316,797       281,912  
Ceded balances payable     36,431       14,994  
Payables for securities purchased     848       -  
Contingent commissions     10,035       10,636  
Debt     297,324       288,565  
Other liabilities     82,050       55,069  
    Total liabilities     1,376,772       1,331,207  
                     
Shareholders’ equity:                
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares                
authorized; A ordinary shares issued:10,258,795 and 10,171,954,
respectively; A ordinary shares outstanding: 10,148,346 and
10,095,312, respectively; B ordinary  shares issued and outstanding:
4,133,366 and 4,133,366, respectively
    2       2  
Additional paid-in capital (1)     440,695       438,182  
Accumulated other comprehensive income (loss), net of taxes     25,314       (21,231 )
Retained earnings (1)     245,346       215,132  
A ordinary shares in treasury, at cost: 110,449 and 76,642 shares, respectively     (3,973 )     (3,026 )
    Total shareholders’ equity     707,384       629,059  
                     
    Total liabilities and shareholders’ equity   $   2,084,156     $   1,960,266  

(1) Since the Company’s initial public offering in 2003, the Company repurchased 20.2 million shares for a total of $488 million. These share repurchases are reflected by a $488 million reduction of the Company’s additional paid-in capital and retained earnings as of September 30, 2019 and December 31, 2018. Retained earnings are also net of $25 million and $14 million of cumulative historic Company dividends to shareholders as of September 30, 2019 and December 31, 2018, respectively.


GLOBAL INDEMNITY LIMITED
SELECTED INVESTMENT DATA
 (Dollars in millions)

    Market Value as of
    (Unaudited)
September 30, 2019
  December 31, 2018
         
Fixed maturities   $ 1,234.4     $ 1,235.2
Cash and cash equivalents     78.2       99.5
Total bonds and cash and cash equivalents     1,312.6       1,334.7
Equities and other invested assets     302.4       175.5
Total cash and invested assets, gross     1,615.0       1,510.2
Payable for securities purchased     (0.8 )     -
Total cash and invested assets, net   $ 1,614.2     $ 1,510.2
               


    Total Investment Return (1)
 

 
  For the Three Months
Ended September 30,

(unaudited)
  For the Nine Months
Ended September 30,

(unaudited)
      2019       2018       2019       2018  
                 
Net investment income   $ 11.3     $ 11.8     $ 32.4     $ 34.1  
                                 
Net realized investment gains (losses)     (2.7 )     5.3       11.3       7.8  
Net unrealized investment gains     10.0       (1.6 )     53.4       (25.8 )
Net realized and unrealized investment gains     7.3       3.7       64.7       (18.0 )
                                 
Total net investment income and gains   $ 18.6     $ 15.5     $ 97.1     $ 16.1  
                                 
Average total cash and invested assets   $ 1,585.2     $ 1,542.0     $ 1,562.2     $ 1,533.8  
                                 
Total investment return %     1.2 %     1.0 %     6.2 %     1.1 %

(1)    Amounts in this table are shown on a pre-tax basis.

   
Contact:  Media
  Stephen W. Ries
  Senior Corporate Counsel
  (610) 668-3270
  sries@global-indemnity.com