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Global Indemnity Group, LLC Reports Third Quarter 2022 Results

  • Growth in Gross Written Premium - An increase of 13.0% and 23.0% in gross written premiums for Continuing Lines for the three and nine months ended September 30, 2022, respectively, compared to the corresponding periods in 2021.
  • The combined ratio for Continuing Lines was 96.9% for the three months ended September 30, 2022 (Loss Ratio 58.3% and Expense Ratio 38.6%) and 96.0% for the nine months ended September 30, 2022 (Loss Ratio 58.4% and Expense Ratio 37.6%).
  • Lower Catastrophes – Strategy to lower catastrophe exposure resulted in catastrophe losses for Continuing Lines of $9.3 million for the nine months ended September 30, 2022 compared to $20.5 million in 2021. Losses related to hurricane Ian are estimated to be $1.5 million.
  • Farm, Ranch and Stable renewal rights sold for $30.0 million to Everett Cash Mutual to reinsure 100% of the business effective August 8, 2022. Everett Cash Mutual will also purchase American Reliable for book value which is expected to be $10 million at the time of close, which, subject to regulatory approvals and customary closing conditions, is expected to close in or before the first quarter of 2023. Impairments and third party legal and advisory expenses of $9.2 million related to these transactions were recorded in the third quarter. Farm, Ranch and Stable is now included in Exited Lines.
  • Investment income for the three months ended September 30, 2022, was $8.4 million compared to $9.3 million for the three months ended September 30, 2021. Investment income, excluding alternative investments was $9.5 million for the three months ended September 30, 2022, compared to $6.3 million for the three months ended September 30, 2021. Investment income for the nine months ended September 30, 2022 was $16.9 million compared to $29.8 million for the nine months ended September 30, 2021. Investment income, excluding alternative investments was $22.8 million for the nine months ended September 30, 2022, compared to $20.0 million for the nine months ended September 30, 2021.
    • Duration of the fixed income portfolio at September 30, 2022 was 1.7 years compared to duration of 3.0 years at December 31, 2021 and book yield on the portfolio increased from 2.2% at December 31, 2021 to 3.1% at September 30, 2022. In reducing duration and increasing yield, GBLI realized losses $33.1 million for the nine months ended September 30, 2022. However, the Company had realized gains of $2.2 million for the third quarter of 2022.
  • The Company generated net income to shareholders of $23.6 million, or $1.60 per share, for the three months ended September 30, 2022, compared to net loss available to shareholders of $7.8 million, or $0.54 per share, for the corresponding period in 2021. Net loss for the nine months ended September 30, 2022, was $3.5 million, or $0.24 per share, compared to net income available to shareholders of $3.8 million, or $0.26 per share, for the corresponding period in 2021. The net loss for the nine months ended September 30, 2022 of $3.5 million was primarily the result of substantially shortening the duration of the Company’s fixed income securities in its investment portfolio, the impact of an underperforming alternative investment, and the write off of debt issuance costs related to debt redemption of $130 million in April 2022 partially offset by proceeds of $30.0 million from the sale of Farm, Ranch & Stable renewal rights.
  • Book value increased $2.3 million from $641.3 million at June 30, 2022 to $643.6 million at September 30, 2022. Book value decreased $63.0 million from $706.6 million at December 31, 2021 to $643.6 million at September 30, 2022. Book value per share increased to $43.76 from $43.68 at June 30, 2022 and decreased from $48.44 at December 31, 2021 to $43.76 at September 30, 2022.

Other Items:

  • On October 21, 2022 Joseph W. Brown was appointed as Chief Executive Officer. Mr. Brown has served as a GBLI director since December 2015 and will remain on GBLI’s board of directors. Mr. Brown also has close to 50 years of insurance industry experience, including prior tenures as a director, chairman, and chief executive officer of MBIA, Inc., chairman of the board of Safeco, chairman of the board of Talegen Holdings, Inc., chairman of Noblr, Inc. and president and chief executive officer of Fireman’s Fund Insurance Company.
  • On October 21, 2022 GBLI also announced a stock repurchase program beginning in the fourth quarter of 2022. Repurchases of up to $32 million of GBLI’s currently outstanding A Common Shares have been authorized. The authorization to repurchase expires on December 31, 2027.
  • Effective October 21, 2022, Jason B. Hurwitz rejoined the Company’s Board of Directors.
  • Effective November 1, 2022, James R. Holt, Jr. ceased to be a Fox Paine Entities’ appointed member of the Company’s Board of Directors.
  • Effective November 1, 2022, Gary Tolman became a Fox Paine Entities’ appointed member of the Company’s Board of Directors.

Global Indemnity Group, LLC (NYSE:GBLI) (the “Company”) today reported adjusted operating income, which excludes realized gains and losses, the results of Exited Lines, the loss on the extinguishment of debt, and the impact of the sale of the Farm, Ranch & Stable renewal rights, of $12.5 million for the nine months ended September 30, 2022, compared to $12.0 million for the nine months ended September 30, 2021. Adjusted operating income, was $5.3 million for the three months ended September 30, 2022, compared to $0.6 million for the corresponding period in 2021. Net loss available to shareholders for the nine months ended September 30, 2022, was $3.5 million compared to net income available to shareholders of $3.8 million for the corresponding period in 2021. Net income available to shareholders for the three months ended September 30, 2022 was $23.6 million, compared to net loss available to shareholders of $7.8 million for the corresponding period in 2021.

Selected Operating and Balance Sheet

Consolidated Results Including Continuing Lines and Exited Lines

(Dollars in millions, except per share data)

 

 

 

 

 

For the Three Months

Ended September 30,

 

For the Nine Months

Ended September 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Gross Written Premiums

$

175.8

 

 

$

174.3

 

 

$

563.6

 

 

$

513.1

 

Net Written Premiums

$

142.8

 

 

$

162.3

 

 

$

469.5

 

 

$

470.6

 

Net Earned Premiums

$

153.6

 

 

$

157.6

 

 

$

458.2

 

 

$

450.7

 

 

 

 

 

 

 

 

 

Net income (loss) available to shareholders

$

23.6

 

 

$

(7.8

)

 

$

(3.5

)

 

$

3.8

 

Net income (loss) from Continuing Lines

$

23.4

 

 

$

(0.1

)

 

$

(1.9

)

 

$

18.7

 

Net income (loss) from Exited Lines (1)

$

0.2

 

 

$

(7.7

)

 

$

(1.6

)

 

$

(14.9

)

Net income (loss) available to shareholders per share

$

1.60

 

 

$

(0.54

)

 

$

(0.24

)

 

$

0.26

 

 

 

 

 

 

 

 

 

Adjusted operating income

$

5.3

 

 

$

0.6

 

 

$

12.5

 

 

$

12.0

 

Adjusted operating income per share

$

0.35

 

 

$

0.03

 

 

$

0.83

 

 

$

0.80

 

 

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

 

Loss ratio

 

57.6

%

 

 

69.3

%

 

 

58.0

%

 

 

64.5

%

Expense ratio

 

39.6

%

 

 

37.6

%

 

 

39.0

%

 

 

38.0

%

Combined ratio

 

97.2

%

 

 

106.9

%

 

 

97.0

%

 

 

102.5

%

 

(1) Underwriting income (loss) from Exited Lines, net of tax.

 

As of

September 30,

2022

 

As of

June 30,

2022

 

As of

March 31,

2022

 

As of

December 31,

2021

 

 

 

 

 

 

 

 

 

 

Book value per share (1)

$

43.76

 

$

43.68

 

$

45.78

 

$

48.44

 

Shareholders’ equity (2)

$

643.6

 

$

641.3

 

$

669.7

 

$

706.6

 

Cash and invested assets (3)

$

1,356.1

 

$

1,326.5

 

$

1,464.6

 

$

1,532.0

 

(1) Net of cumulative Company distributions/dividends to common shareholders totaling $4.75 per share, $4.50 per share, $4.25 per share and $4.00 per share as of September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, respectively.

(2) Shareholders’ equity includes $4 million of series A cumulative fixed rate preferred shares.

(3) Including receivable/(payable) for securities sold/(purchased).

Global Indemnity Group, LLC’s Business Segment Information for the Three and Nine Months Ended September 30, 2022 and 2021

 

 

For the Three Months Ended September 30, 2022

 

 

Continuing

 

Exited

 

 

(Dollars in thousands)

Lines

 

Lines

 

Total

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

Gross written premiums

$

144,315

$

31,512

$

175,827

Net written premiums

$

139,634

$

3,201

$

142,835

 

 

 

 

 

 

 

Net earned premiums

$

135,970

$

17,674

$

153,644

Other income

 

234

 

145

 

379

Total revenues

 

136,204

 

17,819

 

154,023

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

79,312

 

9,147

 

88,459

Acquisition costs and other underwriting expenses

 

52,513

 

8,363

 

60,876

Income (loss) from segments

$

4,379

$

309

$

4,688

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

Loss ratio

 

58.3%

 

51.8%

 

57.6%

Expense ratio

 

38.6%

 

47.3%

 

39.6%

Combined ratio

 

96.9%

 

99.1%

 

97.2%

 

 

For the Three Months Ended September 30, 2021

 

 

Continuing

 

Exited

 

 

(Dollars in thousands)

Lines

Lines

Total

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

Gross written premiums

$

127,698

$

46,605

$

174,303

Net written premiums

$

122,570

$

39,729

$

162,299

 

 

 

 

 

 

 

Net earned premiums

$

113,042

$

44,523

$

157,565

Other income

 

169

 

245

 

414

Total revenues

 

113,211

 

44,768

 

157,979

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

73,413

 

35,782

 

109,195

Acquisition costs and other underwriting expenses

 

40,535

 

18,747

 

59,282

Loss from segments

$

(737)

$

(9,761)

$

(10,498)

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

Loss ratio

 

64.9%

 

80.4%

 

69.3%

Expense ratio

 

35.9%

 

42.1%

 

37.6%

Combined ratio

100.8%

 

122.5%

 

106.9%

 

 

For the Nine Months Ended September 30, 2022

 

 

Continuing

 

Exited

 

 

(Dollars in thousands)

Lines

Lines

Total

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

Gross written premiums

$

446,217

$

117,416

$

563,633

Net written premiums

$

426,957

$

42,518

$

469,475

 

 

 

 

 

 

 

Net earned premiums

$

396,464

$

61,752

$

458,216

Other income

 

672

 

320

 

992

Total revenues

 

397,136

 

62,072

 

459,208

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

231,345

 

34,427

 

265,772

Acquisition costs and other underwriting expenses

 

148,970

 

29,696

 

178,666

Income (loss) from segments

$

16,821

$

(2,051)

$

14,770

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

Loss ratio

 

58.4%

 

55.8%

 

58.0%

Expense ratio

 

37.6%

 

48.1%

 

39.0%

Combined ratio

 

96.0%

 

103.9%

 

97.0%

 

 

For the Nine Months Ended September 30, 2021

 

 

Continuing

 

Exited

 

 

(Dollars in thousands)

Lines

 

Lines

 

Total

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

Gross written premiums

$

362,876

$

150,221

$

513,097

Net written premiums

$

342,827

$

127,808

$

470,635

 

 

 

 

 

 

 

Net earned premiums

$

308,558

$

142,115

$

450,673

Other income

 

579

 

755

 

1,334

Total revenues

 

309,137

 

142,870

 

452,007

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

188,347

 

102,569

 

290,916

Acquisition costs and other underwriting expenses

 

112,111

 

59,148

 

171,259

Income (loss) from segments

$

8,679

$

(18,847)

$

(10,168)

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

Loss ratio

 

61.0%

 

72.2%

 

64.5%

Expense ratio

 

36.3%

 

41.6%

 

38.0%

Combined ratio

 

97.3%

 

113.8%

 

102.5%

About Global Indemnity Group, LLC and its subsidiaries

Global Indemnity Group, LLC (NYSE:GBLI), through its several direct and indirect wholly owned subsidiary insurance 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 Group, LLC’s Continuing Lines segments are Commercial Specialty and Reinsurance Operations. The Exited Lines segment is comprised of business which the Company has decided it will no longer write.

Forward-Looking Information

The forward-looking statements contained in this press release1 do not address a number of risks and uncertainties including COVID-19. 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.

Selected Financial Data for the Three Months Ended September 30, 2022:

  • Gross written premiums, net written premiums, and net earned premiums excluding the Exited Lines (“Continuing Lines”), increased 13.0%, 13.9% and 20.3%, respectively. Consolidated gross written premiums, net written premiums, and net earned premiums increased/(decreased) 0.9%, (12.0%), and (2.5%), respectively.
  • Underwriting income (loss) – For the Continuing Lines business, underwriting income was $4.4 million in 2022 compared to underwriting loss of $0.7 million in 2021.
    • Excluding prior year development, underwriting income (loss) from Continuing Lines was $2.9 million compared to ($2.8) million in 2021.
    • Consolidated underwriting income (loss) was $4.7 million in 2022 compared to ($10.5) million in 2021.
  • Investment income – $8.4 million in 2022 ($9.5 million excluding alternatives investments) compared to $9.3 million in 2021 ($6.3 million excluding alternative investments). The decrease was primarily due to decreased returns from alternative investments and a decrease in dividend income as a result of the liquidation of the Company’s common stock portfolio during the first quarter of 2022. This reduction in investment income was partially offset by an increase in investment income from fixed maturities.
  • Realized gains/(losses) – $2.2 million in 2022 compared to ($0.3) million in 2021.
  • Book value per share – Increase of $0.08 per share. Gain on sale of Farm, Ranch & Stable renewals rights was offset by the impact of rising interest rates.
  • Tax expense/(benefit) – $7.4 million tax expense in 2022 compared to ($1.8) million tax benefit in 2021.

Selected Financial Data for the Nine Months Ended September 30, 2022:

  • Gross written premiums, net written premiums, and net earned premiums excluding the Exited Lines (“Continuing Lines”), increased 23.0%, 24.5% and 28.5%, respectively. Consolidated gross written premiums, net written premiums, and net earned premiums increased/(decreased) 9.8%, (0.2%), and 1.6%, respectively.
  • Underwriting income – For the Continuing Lines business, underwriting income was $16.8 million in 2022 compared to $8.7 million in 2021.
    • Excluding prior year development, underwriting income (loss) from Continuing Lines was $14.6 million compared to $3.5 million in 2021.
    • Consolidated underwriting income (loss) was $14.8 million in 2022 compared to ($10.2) million in 2021.
  • Investment income – $16.9 million in 2022 ($22.8 million excluding alternative investments) compared to $29.8 million in 2021 ($20.0 million excluding alternative investments). The decrease was primarily due to decreased returns from alternative investments and a decrease in dividend income as a result of the liquidation of the Company’s common stock portfolio during the first quarter of 2022. This reduction in investment income was partially offset by an increase in investment income from fixed maturities.
  • Realized gains/(losses) – ($33.1) million in 2022 compared to $7.3 million in 2021. Realized losses in 2022 were primarily due to the Company selling certain securities to offset anticipated rising interest rates by shortening duration and accelerating future maturities.
  • Book value per share – Decrease of $4.68 per share mainly due to rising interest rates. In addition to realized losses, shareholders’ equity includes $51.7 million of net after-tax unrealized losses.
  • Tax expense/(benefit)– $3.4 million tax expense in 2022 compared to ($1.1) million tax benefit in 2021.

Global Indemnity Group, LLC’s Gross Written and Net Written Premiums Results by Segment for the Three and Nine Months Ended September 30, 2022 and 2021

 

Three Months Ended September 30,

 

Gross Written Premiums

 

Net Written Premiums

 

2022

 

2021

 

%

Change

 

2022

 

2021

 

%

Change

Commercial Specialty

$

100,598

 

$

97,950

 

2.7

%

 

$

95,917

 

$

92,822

 

3.3

%

Reinsurance Operations

43,717

29,748

47.0

%

43,717

29,748

47.0

%

Continuing Lines

 

144,315

 

 

127,698

 

13.0

%

 

 

139,634

 

 

122,570

 

13.9

%

Exited Lines

 

31,512

 

 

46,605

 

(32.4

%)

 

 

3,201

 

 

39,729

 

(91.9

%)

Total

$

175,827

 

$

174,303

 

0.9

%

 

$

142,835

 

$

162,299

 

(12.0

%)

 

Nine Months Ended September 30,

 

Gross Written Premiums

 

Net Written Premiums

 

2022

 

2021

 

%

Change

 

2022

 

2021

 

%

Change

Commercial Specialty

$

314,661

 

$

286,690

 

9.8

%

 

$

295,401

 

$

266,641

 

10.8

%

Reinsurance Operations

 

131,556

 

 

76,186

 

72.7

%

 

 

131,556

 

 

76,186

 

72.7

%

Continuing Lines

 

446,217

 

 

362,876

 

23.0

%

 

 

426,957

 

 

342,827

 

24.5

%

Exited Lines

 

117,416

 

 

150,221

 

(21.8

%)

 

 

42,518

 

 

127,808

 

(66.7

%)

Total

$

563,633

 

$

513,097

 

9.8

%

 

$

469,475

 

$

470,635

 

(0.2

%)

Commercial Specialty: Gross written premiums and net written premiums increased 2.7% and 3.3%, respectively, for the three months ended September 30, 2022 as compared to the same period in 2021. Gross written premiums and net written premiums increased 9.8% and 10.8%, respectively, for the nine months ended September 30, 2022 as compared to the same period in 2021. The growth in gross written premiums and net written premiums was primarily driven by organic growth in existing programs, increased pricing, and several new lines and programs. This growth in premiums was partially offset by actions taken within Commercial Specialty to improve underwriting results by not renewing underperforming business.

Reinsurance Operations: Gross written premiums and net written premiums both increased 47.0% for the three months ended September 30, 2022 as compared to the same period in 2021. Gross written premiums and net written premiums both increased 72.7% for the nine months ended September 30, 2022 as compared to the same period in 2021. The growth in gross written premiums and net written premiums was primarily due to organic growth of existing casualty treaties.

Exited Lines: Gross written premiums and net written premiums decreased 32.4% and 91.9%, respectively, for the three months ended September 30, 2022 as compared to the same period in 2021. Gross written premiums and net written premiums decreased 21.8% and 66.7%, respectively, for the nine months ended September 30, 2022 as compared to the same period in 2021. The decrease in gross written premiums and net written premiums was primarily due to exiting lines of business unrelated to the Company’s continuing businesses.

Global Indemnity Group, LLC’s Combined Ratio for the Three and Nine Months Ended September 30, 2022 and 2021

For the Continuing Lines business, the combined ratio was 96.9% for the three months ended September 30, 2022, (Loss Ratio 58.3% and Expense Ratio 38.6%) as compared to 100.8% (Loss Ratio 64.9% and Expense Ratio 35.9%) for the three months ended September 30, 2021. The consolidated combined ratio was 97.2% for the three months ended September 30, 2022, (Loss Ratio 57.6% and Expense Ratio 39.6%) as compared to 106.9% (Loss Ratio 69.3% and Expense Ratio 37.6%) for the three months ended September 30, 2021.

  • For the continuing lines business, the accident year casualty loss ratio improved by 3.9 points to 60.0% in 2022 from 63.9% in 2021. The consolidated accident year casualty loss ratio improved by 3.8 points to 59.2% in 2022 from 63.0% in 2021. The improvement in the continuing lines accident year casualty loss ratio is primarily due to lower claims frequency as well as a change in the mix of business. The improvement in the consolidated accident year casualty loss ratio is primarily due to lower claims frequency and severity as well as a change in the mix of business.

  • For the continuing lines business, the accident year property loss ratio improved by 14.1 points to 58.1% in 2022 from 72.2% in 2021. The consolidated accident year property loss ratio improved by 17.6 points to 60.1% in 2022 from 77.7% in 2021. The improvement in the continuing lines and the consolidated accident year property loss ratio is primarily due to lower catastrophe claims frequency.

For the Continuing Lines business, the combined ratio was 96.0% for the nine months ended September 30, 2022, (Loss Ratio 58.4% and Expense Ratio 37.6%) as compared to 97.3% (Loss Ratio 61.0% and Expense Ratio 36.3%) for the nine months ended September 30, 2021. The consolidated combined ratio was 97.0% for the nine months ended September 30, 2022, (Loss Ratio 58.0% and Expense Ratio 39.0%) as compared to 102.5% (Loss Ratio 64.5% and Expense Ratio 38.0%) for the nine months ended September 30, 2021.

  • For the continuing lines business, the accident year casualty loss ratio improved by 1.2 points to 59.5% in 2022 from 60.7% in 2021. The consolidated accident year casualty loss ratio improved by 0.9 points to 59.1% in 2022 from 60.0% in 2021. The improvement in the continuing lines accident year casualty loss ratio is primarily due to lower claims frequency as well as a change in the mix of business. The improvement in the consolidated accident year casualty loss ratio is primarily due to lower claims frequency and severity as well as a change in the mix of business.

  • For the continuing lines business, the accident year property loss ratio improved by 9.0 points to 57.3% in 2022 from 66.3% in 2021. The consolidated accident year property loss ratio improved by 6.5 points to 62.0% in 2022 from 68.5% in 2021. The improvement in the continuing lines accident year property loss ratio is primarily due to lower catastrophe claims frequency partially offset by higher non-catastrophe claims severity. The improvement in the consolidated accident year property loss ratio is primarily due to lower catastrophe claims frequency.

Note: Tables Follow

GLOBAL INDEMNITY GROUP, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars and shares in thousands, except per share data)

 

 

 

For the Three Months

Ended September 30,

 

For the Nine Months

Ended September 30,

 

2022

 

2021

 

2022

 

2021

Gross written premiums

$

175,827

 

 

$

174,303

 

 

$

563,633

 

 

$

513,097

 

Ceded written premiums

 

(32,992

)

 

 

(12,004

)

 

 

(94,158

)

 

 

(42,462

)

Net written premiums

$

142,835

 

 

$

162,299

 

 

$

469,475

 

 

$

470,635

 

 

 

 

 

 

 

 

 

Net earned premiums

$

153,644

 

 

$

157,565

 

 

$

458,216

 

 

$

450,673

 

Net investment income

 

8,389

 

 

 

9,344

 

 

 

16,911

 

 

 

29,813

 

Net realized investment gains (losses)

 

2,234

 

 

 

(310

)

 

 

(33,067

)

 

 

7,342

 

Other income

 

30,316

 

 

 

389

 

 

 

30,839

 

 

 

1,287

 

Total revenues

 

194,583

 

 

 

166,988

 

 

 

472,899

 

 

 

489,115

 

 

 

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

88,459

 

 

 

109,195

 

 

 

265,772

 

 

 

290,916

 

Acquisition costs and other underwriting expenses

 

60,876

 

 

 

59,282

 

 

 

178,666

 

 

 

171,259

 

Corporate and other operating expenses

 

14,064

 

 

 

5,387

 

 

 

21,718

 

 

 

15,992

 

Interest expense

 

-

 

 

 

2,596

 

 

 

3,004

 

 

 

7,887

 

Loss on extinguishment of debt

 

-

 

 

 

-

 

 

 

3,529

 

 

 

-

 

Income (loss) before income taxes

 

31,184

 

 

 

(9,472

)

 

 

210

 

 

 

3,061

 

Income tax expense (benefit)

 

7,438

 

 

 

(1,759

)

 

 

3,399

 

 

 

(1,118

)

Net income (loss)

 

23,746

 

 

 

(7,713

)

 

 

(3,189

)

 

 

4,179

 

 

 

 

 

 

 

 

 

Less: Preferred stock distributions

 

110

 

 

 

110

 

 

 

330

 

 

 

330

 

 

 

 

 

 

 

 

 

Net income (loss) available to common shareholders

$

23,636

 

 

$

(7,823

)

 

$

(3,519

)

 

$

3,849

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

Net income (loss) available to common shareholders

 

 

 

 

 

 

 

Basic

$

1.62

 

 

$

(0.54

)

 

$

(0.24

)

 

$

0.27

 

Diluted (1)

$

1.60

 

 

$

(0.54

)

 

$

(0.24

)

 

$

0.26

 

Weighted-average number of shares outstanding

 

 

 

 

 

 

 

Basic

 

14,590

 

 

 

14,445

 

 

 

14,550

 

 

 

14,413

 

Diluted (1)

 

14,796

 

 

 

14,445

 

 

 

14,550

 

 

 

14,651

 

 

 

 

 

 

 

 

 

Cash distributions declared per common share

$

0.25

 

 

$

0.25

 

 

$

0.75

 

 

$

0.75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Combined ratio analysis: (2)

 

 

 

 

 

 

 

Loss ratio

 

57.6

%

 

 

69.3

%

 

 

58.0

%

 

 

64.5

%

Expense ratio

 

39.6

%

 

 

37.6

%

 

 

39.0

%

 

 

38.0

%

Combined ratio

 

97.2

%

 

 

106.9

%

 

 

97.0

%

 

 

102.5

%

(1)

For the three months ended September 30, 2021 and nine months ended September 30, 2022, “weighted-average shares outstanding – basic” was used to calculate “diluted earnings per share” due to a net loss for each period.

 

(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 earned premiums. The expense ratio is the ratio of acquisition costs and other underwriting expenses to net earned premiums. The combined ratio is the sum of the loss and expense ratios.

GLOBAL INDEMNITY GROUP, LLC

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 

ASSETS

(Unaudited)

September 30,

2022

December 31, 2021

Fixed Maturities:

 

 

Available for sale, at fair value

 

 

(amortized cost: 2022 - $1,337,014 and 2021 - $1,193,746; net

 

 

 

 

of allowance for expected credit losses of: $0 in 2022 and 2021)

$

1,281,074

$

1,201,866

Equity securities, at fair value

 

18,006

 

 

99,978

 

Other invested assets

 

38,222

 

 

152,651

 

Total investments

 

1,337,302

 

 

1,454,495

 

 

 

 

Cash and cash equivalents

 

18,891

 

 

78,278

 

Premium receivables, net of allowance for expected credit losses of

 

 

 

 

 

 

$2,851 at September 30, 2022 and $2,996 at December 31, 2021

160,714

128,444

Reinsurance receivables, net of allowance for expected credit losses of

 

 

 

 

 

 

$8,992 at September 30, 2022 and December 31, 2021

108,541

99,864

Funds held by ceding insurers

 

21,780

 

 

27,958

 

Deferred federal income taxes

 

46,540

 

 

37,329

 

Deferred acquisition costs

 

70,164

 

 

60,331

 

Intangible assets

 

14,898

 

 

20,261

 

Goodwill

 

4,820

 

 

5,398

 

Prepaid reinsurance premiums

 

56,205

 

 

53,494

 

Lease right of use assets

 

13,461

 

 

16,051

 

Other assets

 

25,821

 

 

30,906

 

Total assets

$

1,879,137

 

$

2,012,809

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

Liabilities:

 

 

Unpaid losses and loss adjustment expenses

$

825,594

 

$

759,904

 

Unearned premiums

 

330,536

 

 

316,566

 

Ceded balances payable

 

16,607

 

 

35,340

 

Payable for securities purchased

 

98

 

 

794

 

Contingent commissions

 

8,357

 

 

7,903

 

Debt

 

-

 

 

126,430

 

Lease liabilities

 

16,734

 

 

19,079

 

Other liabilities

 

37,617

 

 

40,172

 

Total liabilities

 

1,235,543

 

 

1,306,188

 

 

 

 

Shareholders’ equity:

 

 

Series A cumulative fixed rate preferred shares, $1,000 par value;

 

 

100,000,000 shares authorized, shares issued and outstanding:

 

 

4,000 and 4,000 shares, respectively, liquidation preference:

 

 

$1,000 and $1,000 per share, respectively

 

4,000

 

 

4,000

 

Common shares: no par value; 900,000,000 common shares authorized;

 

 

class A common shares issued: 10,701,873 and 10,574,589,

 

 

respectively; class A common shares outstanding: 10,668,423 and

 

 

10,557,093, respectively; class B common shares issued and

 

 

outstanding: 3,947,206 and 3,947,206, respectively

 

-

 

 

-

 

Additional paid-in capital (1)

 

451,142

 

 

447,406

 

Accumulated other comprehensive income, net of taxes

 

(45,337

)

 

6,404

 

Retained earnings (1)

 

234,693

 

 

249,301

 

Class A common shares in treasury, at cost: 33,450 and 17,496 shares, respectively

 

(904

)

 

(490

)

Total shareholders’ equity

 

643,594

 

 

706,621

 

 

 

 

Total liabilities and shareholders’ equity

$

1,879,137

 

$

2,012,809

 

 

(1)

Since the Company’s initial public offering in 2003 the Company has returned $558 million to shareholders including $488 million in share repurchases and $70 million in dividends/distributions.

GLOBAL INDEMNITY GROUP, LLC

SELECTED INVESTMENT DATA

(Dollars in millions)

 

 

 

 

 

Market Value as of

 

 

(Unaudited)

September 30, 2022

 

December 31, 2021

 

 

 

 

 

Fixed maturities

 

$

1,281.1

 

 

$

1,201.9

 

Cash and cash equivalents

 

 

18.9

 

 

 

78.3

 

Total bonds and cash and cash equivalents

 

 

1,300.0

 

 

 

1,280.2

 

Equities and other invested assets

 

 

56.2

 

 

 

252.6

 

Total cash and invested assets, gross

 

 

1,356.2

 

 

 

1,532.8

 

Payable for securities purchased

 

 

(0.1

)

 

 

(0.8

)

Total cash and invested assets, net

 

$

1,356.1

 

 

$

1,532.0

 

 

 

 

Total Investment Return (1)

 

 

 

For the Three Months

Ended September 30,

(unaudited)

 

For the Nine Months

Ended September 30,

(unaudited)

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

Net investment income

 

$

8.4

 

 

$

9.3

 

 

$

16.9

 

 

$

29.8

 

 

 

 

 

 

 

 

 

 

Net realized investment gains (losses)

 

 

2.2

 

 

 

(0.3

)

 

 

(33.0

)

 

 

7.3

 

Net unrealized investment losses

 

 

(23.0

)

 

 

(4.8

)

 

 

(64.4

)

 

 

(23.7

)

Net realized and unrealized investment return

 

 

(20.8

)

 

 

(5.1

)

 

 

(97.4

)

 

 

(16.4

)

 

 

 

 

 

 

 

 

 

Total investment return

 

$

(12.4

)

 

$

4.2

 

 

$

(80.5

)

 

$

13.4

 

 

 

 

 

 

 

 

 

 

Average total cash and invested assets

 

$

1,341.3

 

 

$

1,481.2

 

 

$

1,444.0

 

 

$

1,468.1

 

 

 

 

 

 

 

 

 

 

Total investment return %

 

 

(0.9

%)

 

 

0.3

%

 

 

(5.6

%)

 

 

0.9

%

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

GLOBAL INDEMNITY GROUP, LLC

SUMMARY OF ADJUSTED OPERATING INCOME

(Unaudited)

(Dollars and shares in thousands, except per share data)

 

 

 

 

 

 

 

For the Three Months

Ended September 30,

 

For the Nine Months

Ended September 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

Adjusted operating income, net of tax

 

$

5,263

 

$

593

 

 

$

12,520

 

 

$

12,036

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

Underwriting income (loss) from Exited Lines, net of tax

 

 

244

 

 

(7,711

)

 

 

(1,620

)

 

 

(14,889

)

Adjusted operating income (loss) including Exited Lines, net of tax (1)

 

 

5,507

 

 

 

 

(7,118

 

)

 

 

10,900

 

 

 

(2,853

)

Impact of the sale of Farm, Ranch & Stable renewal rights

 

 

16,469

 

 

-

 

 

 

16,469

 

 

 

-

 

Net realized investment gains (losses)

 

 

1,770

 

 

(595

)

 

 

(27,029

)

 

 

7,032

 

Loss on extinguishment of debt

 

 

-

 

 

-

 

 

 

(3,529

)

 

 

-

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

23,746

 

$

(7,713

)

 

$

(3,189

)

 

$

4,179

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – basic

 

 

14,590

 

 

14,445

 

 

 

14,550

 

 

 

14,413

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – diluted

 

 

14,796

 

 

14,708

 

 

 

14,749

 

 

 

14,651

 

 

 

 

 

 

 

 

 

 

Adjusted operating income per share – basic (2)

 

$

0.35

 

$

0.03

 

 

$

0.84

 

 

$

0.81

 

 

 

 

 

 

 

 

 

 

Adjusted operating income per share – diluted (2)

 

$

0.35

 

$

0.03

 

 

$

0.83

 

 

$

0.80

 

(1)

Adjusted operating income including Exited Lines, net of tax, excludes preferred shareholder distributions of $0.11 million for both the three months ended September 30, 2022 and 2021 and $0.33 million for both the nine months ended September 30, 2022 and 2021.

 

(2)

The adjusted operating income per share calculation is net of preferred shareholder distributions of $0.11 million for both the three months ended September 30, 2022 and 2021 and $0.33 million for both the nine months ended September 30, 2022 and 2021.

Note Regarding Adjusted Operating Income

Adjusted operating income, a non-GAAP financial measure, is equal to net income (loss) excluding after-tax net realized investment gains (losses) and other unique charges not related to operations. Adjusted operating income is not a substitute for net income (loss) determined in accordance with GAAP, and investors should not place undue reliance on this measure.

Contacts

Media

Stephen W. Ries

Head of Investor Relations

(610) 668-3270

sries@gbli.com

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