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Global Indemnity Group, LLC Reports Third Quarter 2023 Results

Global Indemnity Group, LLC (NYSE:GBLI) (the “Company”) today reported net income available to shareholders for the nine months ended September 30, 2023, of $19.2 million compared to net loss available to shareholders of $3.5 million(1) for the corresponding period in 2022. Net income available to shareholders for the three months ended September 30, 2023 was $7.6 million, compared to net income available to shareholders of $23.6 million(1) for the corresponding period in 2022.

Selected Operating and Balance Sheet Information

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,

 

 

2023

 

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Gross Written Premiums

 

$

98.9

 

 

$

175.8

 

 

$

332.0

 

 

$

563.6

Net Written Premiums

 

$

95.6

 

 

$

142.8

 

 

$

317.5

 

 

$

469.5

Net Earned Premiums

 

$

111.7

 

 

$

153.6

 

 

$

380.9

 

 

$

458.2

 

 

 

 

 

 

 

 

 

 

Net income (loss) available to shareholders

 

$

7.6

 

 

$

23.6

 

 

$

19.2

 

 

$

(3.5)

Net income (loss) available to shareholders per share

 

$

0.55

 

 

$

1.60

 

 

$

1.39

 

 

$

(0.24)

 

 

 

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

 

 

 

Loss ratio

 

 

58.3

%

 

 

57.6

%

 

 

60.7

%

 

 

58.0%

Expense ratio

 

 

41.4

%

 

 

39.6

%

 

 

38.5

%

 

 

39.0%

Combined ratio

 

 

99.7

%

 

 

97.2

%

 

 

99.2

%

 

 

97.0%

 

 

As of

September 30,

2023

 

 

As of

June 30,

2023

 

 

As of

March 31,

2023

 

 

As of

December 31,

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share (2)

 

$

46.27

 

 

$

46.03

 

 

$

45.68

 

 

$

44.87

 

Book value per share plus cumulative dividends and excluding AOCI

 

$

54.84

 

 

$

54.28

 

 

$

53.46

 

 

$

52.98

 

Shareholders’ equity (3)

 

$

630.7

 

 

$

626.4

 

 

$

628.2

 

 

$

626.2

 

Cash and invested assets (4)

 

$

1,366.8

 

 

$

1,343.4

 

 

$

1,347.1

 

 

$

1,342.6

 

Shares Outstanding (in millions)

 

 

13.5

 

 

 

13.5

 

 

 

13.7

 

 

 

13.9

 

(1) Includes a net gain of $16.5 million for the sale of the Company's Farm, Ranch, & Stable renewal rights.

(2) Net of cumulative Company distributions to common shareholders totaling $5.75 per share, $5.50 per share, $5.25 per share and $5.00 per share as of September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.

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

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

Business Highlights

  • Underwriting income was $0.7 million for the three months ended September 30, 2023 compared to $4.6 million for the same period in 2022 and $3.9 million for the nine months ended September 30, 2023 compared to $14.6 million for the same period in 2022. (Please see tables which follow.) The Company's Continuing Lines and Consolidated accident year combined ratios were 97.8% and 98.6%, respectively, for the three months ended September 30, 2023 and 97.6% and 98.9%, respectively, for the nine months ended September 30, 2023.
  • Commercial Specialty, excluding terminated business1 2, performed as follows:
    • Package Specialty E&S, the Company’s primary division within its Commercial Specialty segment, increased gross written premiums by 6.1% to $53.5 million for the three months ended September 30, 2023 from $50.4 million for the same period in 2022 and increased by 12.4% to $173.4 million for the nine months ended September 30, 2023 from $154.3 million for the same period in 2022 driven by new agency appointments, strong rate increases as well as exposure growth in both property and general liability.
    • Targeted Specialty E&S decreased gross written premiums by 21.7% to $33.5 million for the three months ended September 30, 2023 from $42.8 million for the same period in 2022 and decreased by 20.4% to $102.8 million for the nine months ended September 30, 2023 from $129.1 million for the same period in 2022. Targeted Specialty includes the Company's InsurTech business and its class specific business.
      • Targeted Specialty InsurTech increased gross written premiums by 22.7% to $13.4 million for the three months ended September 30, 2023 from $10.9 million for the same period in 2022 and increased by 16.8% to $35.7 million for the nine months ended September 30, 2023 from $30.6 million for the same period in 2022 primarily due to new agent appointments and focused marketing efforts.
      • Targeted Specialty Class Specific decreased gross written premiums by 36.9% to $20.2 million for the three months ended September 30, 2023 from $31.9 million for the same period in 2022 and decreased by 31.9% to $67.1 million for the nine months ended September 30, 2023 from $98.5 million for the same period in 2022 primarily due to actions taken to improve underwriting results through increased rates, reduced exposures to catastrophe prone business and non-renewal of underperforming business.
    • Commercial Specialty incurred accident year gross loss ratios of 56.5% and 57.1% for the three and nine months ended September 30, 2023, respectively, which are 5.0 points lower and 0.6 points higher, respectively, than the same periods in 2022.
  • Net investment income increased to $14.2 million for the three months ended September 30, 2023 from $8.4 million for the three months ended September 30, 2022 and increased to $39.4 million for the nine months ended September 30, 2023 from $16.9 million for the nine months ended September 30, 2022.
    • The increase in net investment income was primarily due to the strategies employed by the Company in April 2022 to take advantage of rising interest rates, which resulted in a 74% increase in book yield over time on the fixed income portfolio to 4.0% at September 30, 2023 from 2.3% at March 31, 2022, while the average duration of these securities was shortened to 1.2 years at September 30, 2023 from 3.3 years at March 31, 2022.
    • Approximately $800 million of cash flow, or approximately 60%, of the Company’s fixed income portfolio, will be generated from maturities and investment income between September 30, 2023 and December 31, 2024, positioning the Company to continue to increase book yield by investing maturities in higher yielding bonds.
  • Book value per share increased $1.40 per share, or 3.1%, to $46.27 at September 30, 2023 from $44.87 at December 31, 2022.

1 Reflecting the Company's focus on “Main Street Specialty E&S” clients and continuing efforts to terminate business that does not meet the Company's underwriting criteria, which are continuously refined. References to gross written premiums and loss ratios in this Business Highlights section that exclude terminated business within the Commercial Specialty segment contained in Continuing Lines do not include (i) terminated gross written premiums within Package Specialty E&S of $2.3 million for the three months ended September 30, 2022 and $1.1 million and $8.1 million for the nine months ended September 30, 2023 and 2022, respectively, in habitational lines in New York City and (ii) terminated gross written premiums within Targeted Specialty E&S of less than $0.1 million and $0.5 million for the three months ended September 30, 2023 and 2022, respectively, and $0.7 million and $12.5 million for the nine months ended September 30, 2023 and 2022, respectively, concentrated in a large corporate restaurant account. There were no terminated gross written premiums within Package Specialty E&S for the three months ended September 30, 2023.

2 Represents Non-GAAP financial measures or ratios. See “Reconciliation of Non-GAAP Financial Measures and Ratios” at the end of this press release.

Global Indemnity Group, LLC’s Business Segment Information for the Three and Nine Months Ended September 30, 2023 and 2022

 

 

For the Three Months Ended September 30, 2023

 

 

Continuing Lines

 

Exited Lines

 

Total

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

Gross written premiums

 

$

98,893

 

 

$

33

 

 

$

98,926

 

Net written premiums

 

$

95,967

 

 

$

(344

)

 

$

95,623

 

 

 

 

 

 

 

 

Net earned premiums

 

$

110,350

 

 

$

1,345

 

 

$

111,695

 

Other income

 

 

275

 

 

 

24

 

 

 

299

 

Total revenues

 

 

110,625

 

 

 

1,369

 

 

 

111,994

 

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

 

 

 

 

 

Current accident year

 

 

65,456

 

 

 

(289

)

 

 

65,167

 

Prior accident year

 

 

11,841

 

 

 

(11,892

)

 

 

(51

)

Total net losses and loss adjustment expenses

 

 

77,297

 

 

 

(12,181

)

 

 

65,116

 

Acquisition costs and other underwriting expenses

 

 

43,224

 

 

 

2,978

 

 

 

46,202

 

Income (loss) from segments

 

$

(9,896

)

 

$

10,572

 

 

$

676

 

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

Loss ratio

 

 

 

 

 

 

Current accident year

 

 

59.3

%

 

 

(21.5

%)

 

 

58.3

%

Prior accident year

 

 

10.7

%

 

 

(884.2

%)

 

 

 

Calendar year loss ratio

 

 

70.0

%

 

 

(905.7

%)

 

 

58.3

%

Expense ratio

 

 

39.2

%

 

 

221.4

%

 

 

41.4

%

Combined ratio

 

 

109.2

%

 

 

(684.3

%)

 

 

99.7

%

 

 

 

 

 

 

 

Accident year combined ratio(1)

 

 

97.8

%

 

 

169.9

%

 

 

98.6

%

 

 

For the Three Months Ended September 30, 2022

 

 

Continuing Lines

 

Exited Lines

 

Total

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

Gross written premiums

 

$

139,111

 

 

$

36,716

 

 

$

175,827

 

Net written premiums

 

$

136,227

 

 

$

6,608

 

 

$

142,835

 

 

 

 

 

 

 

 

Net earned premiums

 

$

133,643

 

 

$

20,001

 

 

$

153,644

 

Other income

 

 

272

 

 

 

44

 

 

 

316

 

Total revenues

 

 

133,915

 

 

 

20,045

 

 

 

153,960

 

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

 

 

 

 

 

Current accident year

 

 

79,590

 

 

 

11,861

 

 

 

91,451

 

Prior accident year

 

 

(2,441

)

 

 

(551

)

 

 

(2,992

)

Total net losses and loss adjustment expenses

 

 

77,149

 

 

 

11,310

 

 

 

88,459

 

Acquisition costs and other underwriting expenses

 

 

50,830

 

 

 

10,046

 

 

 

60,876

 

Income (loss) from segments

 

$

5,936

 

 

$

(1,311

)

 

$

4,625

 

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

Loss ratio

 

 

 

 

 

 

Current accident year

 

 

59.6

%

 

 

59.3

%

 

 

59.5

%

Prior accident year

 

 

(1.9

%)

 

 

(2.8

%)

 

 

(1.9

%)

Calendar year loss ratio

 

 

57.7

%

 

 

56.5

%

 

 

57.6

%

Expense ratio

 

 

38.0

%

 

 

50.2

%

 

 

39.6

%

Combined ratio

 

 

95.7

%

 

 

106.7

%

 

 

97.2

%

 

 

 

 

 

 

 

Accident year combined ratio(1)

 

 

97.7

%

 

 

106.6

%

 

 

98.9

%

(1) Excludes the impact of net losses and loss adjustment expenses and contingent commissions related to prior accident years.

 

 

For the Nine Months Ended September 30, 2023

 

 

Continuing Lines

 

 

Exited Lines

 

Total

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

Gross written premiums

 

$

328,008

 

 

$

4,003

 

 

$

332,011

 

Net written premiums

 

$

317,357

 

 

$

123

 

 

$

317,480

 

 

 

 

 

 

 

 

 

Net earned premiums

 

$

361,372

 

 

$

19,551

 

 

$

380,923

 

Other income

 

 

808

 

 

 

127

 

 

 

935

 

Total revenues

 

 

362,180

 

 

 

19,678

 

 

 

381,858

 

 

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

 

 

 

 

 

 

Current accident year

 

 

217,557

 

 

 

13,642

 

 

 

231,199

 

Prior accident year

 

 

19,296

 

 

 

(19,296

)

 

 

-

 

Total net losses and loss adjustment expenses

 

 

236,853

 

 

 

(5,654

)

 

 

231,199

 

Acquisition costs and other underwriting expenses

 

 

136,275

 

 

 

10,506

 

 

 

146,781

 

Income (loss) from segments

 

$

(10,948

)

 

$

14,826

 

 

$

3,878

 

 

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

 

Loss ratio

 

 

 

 

 

 

 

Current accident year

 

 

60.2

%

 

 

69.8

%

 

 

60.7

%

Prior accident year

 

 

5.3

%

 

 

(98.7

%)

 

 

 

Calendar year loss ratio

 

 

65.5

%

 

 

(28.9

%)

 

 

60.7

%

Expense ratio

 

 

37.7

%

 

 

53.7

%

 

 

38.5

%

Combined ratio

 

 

103.2

%

 

 

24.8

%

 

 

99.2

%

 

 

 

 

 

 

 

 

Accident year combined ratio(1)

 

 

97.6

%

 

 

122.9

%

 

 

98.9

%

 

 

For the Nine Months Ended September 30, 2022

 

 

Continuing Lines

 

Exited Lines

 

Total

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

Gross written premiums

 

$

434,489

 

 

$

129,144

 

 

$

563,633

 

Net written premiums

 

$

421,577

 

 

$

47,898

 

 

$

469,475

 

 

 

 

 

 

 

 

Net earned premiums

 

$

392,297

 

 

$

65,919

 

 

$

458,216

 

Other income

 

 

791

 

 

 

48

 

 

 

839

 

Total revenues

 

 

393,088

 

 

 

65,967

 

 

 

459,055

 

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

 

 

 

 

 

Current accident year

 

 

231,549

 

 

 

43,849

 

 

 

275,398

 

Prior accident year

 

 

(4,085

)

 

 

(5,541

)

 

 

(9,626

)

Total net losses and loss adjustment expenses

 

 

227,464

 

 

 

38,308

 

 

 

265,772

 

Acquisition costs and other underwriting expenses

 

 

146,413

 

 

 

32,253

 

 

 

178,666

 

Income (loss) from segments

 

$

19,211

 

 

$

(4,594

)

 

$

14,617

 

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

Loss ratio

 

 

 

 

 

 

Current accident year

 

 

59.0

%

 

 

66.5

%

 

 

60.1

%

Prior accident year

 

 

(1.0

%)

 

 

(8.4

%)

 

 

(2.1

%)

Calendar year loss ratio

 

 

58.0

%

 

 

58.1

%

 

 

58.0

%

Expense ratio

 

 

37.3

%

 

 

48.9

%

 

 

39.0

%

Combined ratio

 

 

95.3

%

 

 

107.0

%

 

 

97.0

%

 

 

 

 

 

 

 

Accident year combined ratio(1)

 

 

96.3

%

 

 

109.9

%

 

 

98.3

%

(1) Excludes the impact of net losses and loss adjustment expenses and contingent commissions related to prior accident years.

Global Indemnity Group, LLC’s Gross Written and Net Written Premiums Results by Segment for the Three and Nine Months Ended September 30, 2023 and 2022

 

Three Months Ended September 30,

 

Gross Written Premiums

 

Net Written Premiums

 

2023

 

 

2022

 

 

% Change

 

2023

 

 

2022

 

 

% Change

Commercial Specialty

$

87,029

 

 

$

96,056

 

 

(9.4%)

 

$

84,103

 

 

$

93,172

 

 

(9.7%)

Reinsurance Operations

 

11,864

 

 

 

43,055

 

 

(72.4%)

 

 

11,864

 

 

 

43,055

 

 

(72.4%)

Continuing Lines

 

98,893

 

 

 

139,111

 

 

(28.9%)

 

 

95,967

 

 

 

136,227

 

 

(29.6%)

Exited Lines

 

33

 

 

 

36,716

 

 

(99.9%)

 

 

(344

)

 

 

6,608

 

 

(105.2%)

Total

$

98,926

 

 

$

175,827

 

 

(43.7%)

 

$

95,623

 

 

$

142,835

 

 

(33.1%)

 

Nine Months Ended September 30,

 

Gross Written Premiums

 

Net Written Premiums

 

2023

 

 

2022

 

 

% Change

 

2023

 

 

2022

 

 

% Change

Commercial Specialty

$

277,884

 

 

$

303,914

 

 

(8.6%)

 

$

267,233

 

 

$

291,002

 

 

(8.2%)

Reinsurance Operations

 

50,124

 

 

 

130,575

 

 

(61.6%)

 

 

50,124

 

 

 

130,575

 

 

(61.6%)

Continuing Lines

 

328,008

 

 

 

434,489

 

 

(24.5%)

 

 

317,357

 

 

 

421,577

 

 

(24.7%)

Exited Lines

 

4,003

 

 

 

129,144

 

 

(96.9%)

 

 

123

 

 

 

47,898

 

 

(99.7%)

Total

$

332,011

 

 

$

563,633

 

 

(41.1%)

 

$

317,480

 

 

$

469,475

 

 

(32.4%)

Commercial Specialty: Gross written premiums and net written premiums decreased 9.4% and 9.7%, respectively, for the three months ended September 30, 2023 as compared to the same period in 2022. Gross written premiums and net written premiums decreased 8.6% and 8.2%, respectively, for the nine months ended September 30, 2023 as compared to the same period in 2022. The decrease in gross written premiums and net written premiums was primarily driven by the non-renewal of a restaurant book of business as well as actions taken to improve underwriting results by nonrenewing underperforming business partially offset by increased pricing.

Package Specialty E&S, the Company’s primary division within its Commercial Specialty segment, increased gross written premiums excluding terminated business1 by 6.1% and 12.4% for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022 driven by new agency appointments, strong rate increases as well as exposure growth in both property and general liability.

Targeted Specialty E&S, a division within the Company’s Commercial Specialty segment, decreased gross written premiums excluding terminated business1 by 21.7% and 20.4% for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022. Targeted Specialty includes the Company's InsurTech business and its class specific business.

  • Targeted Specialty InsurTech increased gross written premiums by 22.7% and 16.8% for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022 primarily due to new agent appointments and focused marketing efforts.
  • Targeted Specialty Class Specific decreased gross written premiums excluding terminated business by 36.9% and 31.9% for the three and nine months ended September 30, 2023, respectively, as compared to the same periods in 2022 primarily due to actions taken to improve underwriting results through increased rates, reduced exposures to catastrophe prone business and non-renewal of underperforming business.

Reinsurance Operations: Gross written premiums and net written premiums both decreased 72.4% for the three months ended September 30, 2023 as compared to the same period in 2022. Gross written premiums and net written premiums both decreased 61.6% for the nine months ended September 30, 2023 as compared to the same period in 2022. The reduction in gross written premiums and net written premiums was primarily due to the non-renewal of a casualty treaty.

Exited Lines: Gross written premiums and net written premiums decreased 99.9% and 105.2%, respectively, for the three months ended September 30, 2023 as compared to the same period in 2022. Gross written premiums and net written premiums decreased 96.9% and 99.7%, respectively, for the nine months ended September 30, 2023 as compared to the same period in 2022. The decrease in gross written premiums and net written premiums was primarily due to selling the manufactured home & dwelling and farm businesses.

1 Represents Non-GAAP financial measures or ratios. See “Reconciliation of Non-GAAP Financial Measures and Ratios” at the end of this press release.

Global Indemnity Group, LLC’s Combined Ratio for the Three and Nine Months Ended September 30, 2023 and 2022

The consolidated combined ratio was 99.7% for the three months ended September 30, 2023, (Loss Ratio 58.3% and Expense Ratio 41.4%) as compared to 97.2% (Loss Ratio 57.6% and Expense Ratio 39.6%) for the three months ended September 30, 2022. The accident year combined ratio for Continuing Lines was 97.8% for the three months ended September 30, 2023, (Loss Ratio 59.3% and Expense Ratio 38.5%) as compared to 97.7% (Loss Ratio 59.6% and Expense Ratio 38.1%) for the three months ended September 30, 2022. The calendar year combined ratio for Continuing Lines was 109.2% for the three months ended September 30, 2023, (Loss Ratio 70.0% and Expense Ratio 39.2%) as compared to 95.7% (Loss Ratio 57.7% and Expense Ratio 38.0%) for the three months ended September 30, 2022.

  • The calendar year combined ratio for Continuing Lines for 2023 was impacted by loss reserve strengthening primarily driven by the restaurant book of business that was not renewed and other terminated business, as well as for accident year 2020. Reserve decreases in Exited Lines resulted from the commutation of a reinsurance treaty and favorable development in the Farm, Ranch & Stable business.
  • For the Continuing Lines business, the accident year casualty loss ratio increased by 3.7 points to 63.7% in 2023 from 60.0% in 2022. The consolidated accident year casualty loss ratio increased by 3.4 points to 62.9% in 2023 from 59.5% in 2022. The increase in the Continuing Lines and the Consolidated accident year casualty loss ratios is primarily due to higher claims severity.
  • For the Continuing Lines business, the accident year property loss ratio improved by 8.9 points to 49.4% in 2023 from 58.3% in 2022. The consolidated accident year property loss ratio improved by 11.5 points to 48.1% in 2023 from 59.6% in 2022. The improvement in the Continuing Lines and the Consolidated accident year property loss ratios is primarily due to lower non-catastrophe claims severity partially offset by higher catastrophe claims frequency.

The consolidated combined ratio was 99.2% for the nine months ended September 30, 2023, (Loss Ratio 60.7% and Expense Ratio 38.5%) as compared to 97.0% (Loss Ratio 58.0% and Expense Ratio 39.0%) for the nine months ended September 30, 2022. The accident year combined ratio for Continuing Lines was 97.6% for the nine months ended September 30, 2023, (Loss Ratio 60.2% and Expense Ratio 37.4%) as compared to 96.3% (Loss Ratio 59.0% and Expense Ratio 37.3%) for the nine months ended September 30, 2022. The calendar year combined ratio for Continuing Lines was 103.2% for the nine months ended September 30, 2023, (Loss Ratio 65.5% and Expense Ratio 37.7%) as compared to 95.3% (Loss Ratio 58.0% and Expense Ratio 37.3%) for the nine months ended September 30, 2022.

  • The calendar year combined ratio for Continuing Lines for 2023 was impacted by loss reserve strengthening primarily driven by the restaurant book of business that was not renewed and other terminated business, as well as for accident year 2020. Reserve decreases in Exited Lines resulted from the commutation of a reinsurance treaty and favorable development in the Farm, Ranch & Stable business.
  • For the Continuing Lines business, the accident year casualty loss ratio increased by 1.4 points to 60.9% in 2023 from 59.5% in 2022. The consolidated accident year casualty loss ratio increased by 1.7 point to 60.8% in 2023 from 59.1% in 2022. The increase in the Continuing Lines and the Consolidated accident year casualty loss ratios is primarily due to higher claims severity.
  • For the Continuing Lines business, the accident year property loss ratio increased by 0.8 points to 58.5% in 2023 from 57.7% in 2022. The consolidated accident year property loss ratio improved by 1.6 points to 60.4% in 2023 from 62.0% in 2022. The improvement in the Consolidated accident year property loss ratios is mainly due to lower non-catastrophe claims frequency partially offset by higher claims frequency.
 

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,

 

 

2023

 

2022

 

 

2023

 

 

2022

Gross written premiums

 

$

98,926

 

 

$

175,827

 

 

$

332,011

 

 

$

563,633

 

 

 

 

 

 

 

 

 

 

 

 

Net written premiums

 

$

95,623

 

 

$

142,835

 

 

$

317,480

 

 

$

469,475

 

 

 

 

 

 

 

 

 

 

 

 

Net earned premiums

 

$

111,695

 

 

$

153,644

 

 

$

380,923

 

 

$

458,216

 

Net investment income

 

 

14,200

 

 

 

8,389

 

 

 

39,424

 

 

 

16,911

 

Net realized investment gains (losses)

 

 

(133

)

 

 

2,234

 

 

 

(2,414

)

 

 

(33,067

)

Other income

 

 

299

 

 

 

30,316

 

 

 

935

 

 

 

30,839

 

Total revenues

 

 

126,061

 

 

 

194,583

 

 

 

418,868

 

 

 

472,899

 

 

 

 

 

 

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

 

65,116

 

 

 

88,459

 

 

 

231,199

 

 

 

265,772

 

Acquisition costs and other underwriting expenses

 

 

46,202

 

 

 

60,876

 

 

 

146,781

 

 

 

178,666

 

Corporate and other operating expenses

 

 

5,280

 

 

 

14,064

 

 

 

16,638

 

 

 

21,718

 

Interest expense

 

 

 

 

 

 

 

 

12

 

 

 

3,004

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

3,529

 

Income before income taxes

 

 

9,463

 

 

 

31,184

 

 

 

24,238

 

 

 

210

 

Income tax expense

 

 

1,763

 

 

 

7,438

 

 

 

4,707

 

 

 

3,399

 

Net income (loss)

 

 

7,700

 

 

 

23,746

 

 

 

19,531

 

 

$

(3,189

)

Less: Preferred stock distributions

 

 

110

 

 

 

110

 

 

 

330

 

 

 

330

 

Net income (loss) available to common shareholders

 

$

7,590

 

 

$

23,636

 

 

$

19,201

 

 

$

(3,519

)

 

 

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

 

 

 

Net income (loss) available to common shareholders

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.56

 

 

$

1.62

 

 

$

1.42

 

 

$

(0.24

)

Diluted (1)

 

$

0.55

 

 

$

1.60

 

 

$

1.39

 

 

$

(0.24

)

Weighted-average number of shares outstanding

 

 

 

 

 

 

 

 

 

 

Basic

 

 

13,523

 

 

 

14,590

 

 

 

13,557

 

 

 

14,550

 

Diluted (1)

 

 

13,814

 

 

 

14,796

 

 

 

13,799

 

 

 

14,550

 

 

 

 

 

 

 

 

 

 

 

 

Cash distributions declared per common share

 

$

0.25

 

 

$

0.25

 

 

$

0.75

 

 

$

0.75

 

 

 

 

 

 

 

 

 

 

 

 

Combined ratio analysis: (2)

 

 

 

 

 

 

 

 

 

 

Loss ratio

 

 

58.3

%

 

 

57.6

%

 

 

60.7

%

 

 

58.0

%

Expense ratio

 

 

41.4

%

 

 

39.6

%

 

 

38.5

%

 

 

39.0

%

Combined ratio

 

 

99.7

%

 

 

97.2

%

 

 

99.2

%

 

 

97.0

%

(1)

For the 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 the 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)

 

 

 

(Unaudited)

September 30,

2023

 

 

December 31,

2022

 

ASSETS

 

 

 

 

 

 

Fixed maturities:

 

 

 

 

 

 

Available for sale, at fair value (amortized cost: $1,334,130 and $1,301,723; net of allowance for expected credit losses of $0 at September 30, 2023 and December 31, 2022)

 

$

1,287,095

 

 

$

1,248,198

 

Equity securities, at fair value

 

 

16,954

 

 

 

17,520

 

Other invested assets

 

 

36,868

 

 

 

38,176

 

Total investments

 

 

1,340,917

 

 

 

1,303,894

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

46,470

 

 

 

38,846

 

Premium receivables, net of allowance for expected credit losses of $4,120 at September 30, 2023 and $3,322 at December 31, 2022

 

 

131,107

 

 

 

168,743

 

Reinsurance receivables, net of allowance for expected credit losses of $8,992 at September 30, 2023 and December 31, 2022 

 

 

85,581

 

 

 

85,721

 

Funds held by ceding insurers

 

 

19,884

 

 

 

19,191

 

Deferred federal income taxes

 

 

41,220

 

 

 

47,099

 

Deferred acquisition costs

 

 

45,942

 

 

 

64,894

 

Intangible assets

 

 

14,545

 

 

 

14,810

 

Goodwill

 

 

4,820

 

 

 

4,820

 

Prepaid reinsurance premiums

 

 

7,190

 

 

 

17,421

 

Lease right of use assets

 

 

10,115

 

 

 

11,739

 

Other assets

 

 

20,055

 

 

 

23,597

 

Total assets

 

$

1,767,846

 

 

$

1,800,775

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Unpaid losses and loss adjustment expenses

 

$

861,803

 

 

$

832,404

 

Unearned premiums

 

 

195,680

 

 

 

269,353

 

Ceded balances payable

 

 

3,532

 

 

 

17,241

 

Payable for securities purchased

 

 

20,607

 

 

 

66

 

Contingent commissions

 

 

4,801

 

 

 

8,816

 

Lease liabilities

 

 

13,515

 

 

 

15,701

 

Other liabilities

 

 

37,253

 

 

 

30,965

 

Total liabilities

 

$

1,137,191

 

 

$

1,174,546

 

 

 

 

 

 

 

 

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 per share 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: 11,020,174 and 10,876,041 respectively; class A common shares outstanding: 9,748,933 and 10,073,660, respectively; class B common shares issued and outstanding: 3,793,612 and 3,793,612, respectively

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional paid-in capital (1)

 

 

454,416

 

 

 

451,305

 

Accumulated other comprehensive income (loss), net of tax

 

 

(38,117

)

 

 

(43,058

)

Retained earnings (1)

 

 

242,519

 

 

 

233,468

 

Class A common shares in treasury, at cost: 1,271,241 and 802,381 shares, respectively

 

 

(32,163

)

 

 

(19,486

)

Total shareholders’ equity

 

 

630,655

 

 

 

626,229

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

1,767,846

 

 

$

1,800,775

 

(1)

 

Since the Company’s initial public offering in 2003, the Company has returned $606 million to shareholders, including $522 million in share repurchases and $84 million in dividends/distributions.

 

GLOBAL INDEMNITY GROUP, LLC

SELECTED INVESTMENT DATA

(Dollars in millions)

 

 

 

Market Value as of

 

 

(Unaudited)

September 30, 2023

 

December 31, 2022

 

 

 

 

 

Fixed maturities

 

$

1,287.1

 

 

$

1,248.2

 

Cash and cash equivalents

 

 

46.5

 

 

 

38.8

 

Total bonds and cash and cash equivalents

 

 

1,333.6

 

 

 

1,287.0

 

Equities and other invested assets

 

 

53.8

 

 

 

55.7

 

Total cash and invested assets, gross

 

 

1,387.4

 

 

 

1,342.7

 

Payable for securities purchased

 

 

(20.6

)

 

 

(0.1

)

Total cash and invested assets, net

 

$

1,366.8

 

 

$

1,342.6

 

 

 

Total Investment Return (1)

 

 

For the Three Months Ended

September 30,

(Unaudited)

 

For the Nine Months Ended

September 30,

(Unaudited)

 

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

Net investment income

 

$

14.2

 

 

$

8.4

 

 

$

39.4

 

 

$

16.9

 

 

 

 

 

 

 

 

 

 

Net realized investment gains (losses)

 

 

(0.1

)

 

 

2.2

 

 

 

(2.4

)

 

 

(33.0

)

Net unrealized investment gains (losses)

 

 

(1.3

)

 

 

(23.0

)

 

 

6.1

 

 

 

(64.4

)

Net realized and unrealized investment return

 

 

(1.4

)

 

 

(20.8

)

 

 

3.7

 

 

 

(97.4

)

 

 

 

 

 

 

 

 

 

Total investment return

 

$

12.8

 

 

$

(12.4

)

 

$

43.1

 

 

$

(80.5

)

 

 

 

 

 

 

 

 

 

Average total cash and invested assets

 

$

1,355.1

 

 

$

1,341.3

 

 

$

1,354.7

 

 

$

1,444.0

 

 

 

 

 

 

 

 

 

 

Total annualized investment return %

 

 

3.8

%

 

 

(3.7

%)

 

 

4.2

%

 

 

(7.4

%)

(1)

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

 

GLOBAL INDEMNITY GROUP, LLC

SUMMARY OF ADJUSTED OPERATING INCOME (LOSS)

(Unaudited)

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

 

 

 

For the Three Months

Ended September 30,

 

For the Nine Months

Ended September 30,

 

 

 

2023

 

2022

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income (loss), net of tax

 

$

(551

)

 

$

6,543

 

 

$

9,780

 

 

$

14,529

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

Underwriting income (loss) from Exited Lines

 

 

8,352

 

 

 

(1,036

)

 

 

11,713

 

 

 

(3,629

)

Adjusted operating income including Exited Lines,

 

 

 

 

 

 

 

 

 

net of tax (1)

 

 

7,801

 

 

 

5,507

 

 

 

21,493

 

 

 

10,900

 

 

 

 

 

 

 

 

 

 

 

Net realized investment gains (losses)

 

 

(101

)

 

 

1,770

 

 

 

(1,962

)

 

 

(27,029

)

Impact of the sale of renewal rights

 

 

 

 

 

16,469

 

 

 

 

 

 

16,469

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

(3,529

)

Net income (loss)

 

$

7,700

 

 

$

23,746

 

 

$

19,531

 

 

$

(3,189

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – basic

 

 

13,523

 

 

 

14,590

 

 

 

13,557

 

 

 

14,550

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – diluted

 

 

13,523

 

 

 

14,796

 

 

 

13,799

 

 

 

14,749

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income per share – basic (2)

 

$

(0.05

)

 

$

0.44

 

 

$

0.70

 

 

$

0.98

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income per share – diluted (2)

 

$

(0.05

)

 

$

0.43

 

 

$

0.68

 

 

$

0.96

 

(1)

Adjusted operating income including Exited Lines, net of tax, excludes preferred shareholder distributions of $0.11 million for each of the three months ended September 30, 2023 and 2022 and $0.33 million for each of the nine months ended September 30, 2023 and 2022.

(2)

 

The adjusted operating income (loss) per share calculation is net of preferred shareholder distributions of $0.11 million for each of the three months ended September 30, 2023 and 2022 and $0.33 million for each of the nine months ended September 30, 2023 and 2022.

Note Regarding Adjusted Operating Income (Loss)

Adjusted operating income (loss), 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 (loss) is not a substitute for net income (loss) determined in accordance with GAAP, and investors should not place undue reliance on this measure.

Reconciliation of non-GAAP financial measures and ratios

The table below, which contains incurred losses and loss adjustment expenses for the Commercial Specialty segment within Continuing Lines, reconciles the non-GAAP measures or ratios, which excludes the impact of prior accident year adjustments and ceded losses and loss adjustment expenses, to its most directly comparable GAAP measure or ratio. The Company believes the non-GAAP measures or ratios are useful to investors when evaluating the Company's underwriting performance as trends within Commercial Specialty may be obscured by prior accident year adjustments and ceded losses and loss adjustment expenses. These non-GAAP measures or ratios should not be considered as a substitute for its most directly comparable GAAP measure or ratio and does not reflect the overall underwriting profitability of the Company.

 

For the Three Months Ended

September 30,

 

For the Nine Months Ended

September 30,

 

2023

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

Losses

$

 

Loss

Ratio

 

Losses

$

 

Loss

Ratio

 

Losses

$

 

Loss

Ratio

 

Losses

$

 

Loss

Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Casualty

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross losses and loss adjustment expenses excluding terminated business (1)

$

30,414

 

 

61.6

%

 

$

37,117

 

 

64.3

%

 

$

89,931

 

 

57.4

%

 

$

91,682

 

 

58.2

%

Gross losses and loss adjustment expenses on terminated business (1)

 

2,576

 

 

256.3

%

 

 

576

 

 

9.4

%

 

 

10,050

 

 

128.2

%

 

 

12,838

 

 

58.1

%

Gross losses and loss adjustment expenses (1)

$

32,990

 

 

65.5

%

 

$

37,693

 

 

59.0

%

 

$

99,981

 

 

60.7

%

 

$

104,520

 

 

58.2

%

Ceded losses and loss adjustment expenses

 

(716

)

 

 

 

 

(483

)

 

 

 

 

(1,474

)

 

 

 

 

(1,142

)

 

 

Net losses and loss adjustment expenses (2)

$

32,274

 

 

65.1

%

 

$

37,210

 

 

59.2

%

 

$

98,507

 

 

60.6

%

 

$

103,378

 

 

58.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross losses and loss adjustment expenses excluding terminated business (1)

$

17,696

 

 

49.3

%

 

$

21,037

 

 

57.1

%

 

$

65,061

 

 

56.7

%

 

$

62,578

 

 

54.2

%

Gross losses and loss adjustment expenses on terminated business (1)

 

37

 

 

6.6

%

 

 

157

 

 

25.3

%

 

 

391

 

 

23.5

%

 

 

990

 

 

54.1

%

Gross losses and loss adjustment expenses (1)

$

17,733

 

 

48.7

%

 

$

21,194

 

 

56.5

%

 

$

65,452

 

 

56.2

%

 

$

63,568

 

 

54.2

%

Ceded losses and loss adjustment expenses

 

(898

)

 

 

 

 

(356

)

 

 

 

 

(2,526

)

 

 

 

 

(2,031

)

 

 

Net losses and loss adjustment expenses (2)

$

16,835

 

 

49.4

%

 

$

20,838

 

 

58.3

%

 

$

62,926

 

 

58.5

%

 

$

61,537

 

 

57.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Specialty

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross losses and loss adjustment expenses excluding terminated business (1)

$

48,110

 

 

56.5

%

 

$

58,154

 

 

61.5

%

 

$

154,992

 

 

57.1

%

 

$

154,260

 

 

56.5

%

Gross losses and loss adjustment expenses on terminated business (1)

 

2,613

 

 

167.2

%

 

 

733

 

 

10.9

%

 

 

10,441

 

 

109.9

%

 

 

13,828

 

 

57.8

%

Gross losses and loss adjustment expenses (1)

$

50,723

 

 

58.4

%

 

$

58,887

 

 

58.1

%

 

$

165,433

 

 

58.9

%

 

$

168,088

 

 

56.6

%

Ceded losses and loss adjustment expenses

 

(1,614

)

 

 

 

 

(839

)

 

 

 

 

(4,000

)

 

 

 

 

(3,173

)

 

 

Net losses and loss adjustment expenses (2)

$

49,109

 

 

58.7

%

 

$

58,048

 

 

58.9

%

 

$

161,433

 

 

59.7

%

 

$

164,915

 

 

58.1

%

(1)

Non-GAAP measure / ratio

(2)

Most directly comparable GAAP measure / ratio

 

The table below, which contains gross written premiums for the Commercial Specialty segment within Continuing Lines, reconciles the non-GAAP measures, which excludes the impact of terminated business, to its most directly comparable GAAP measure. The Company believes the non-GAAP measures are useful to investors when evaluating the Company's underwriting performance as trends within Commercial Specialty may be obscured by the terminated business. These non-GAAP measures should not be considered as a substitute for its most directly comparable GAAP measure and does not reflect the overall underwriting profitability of the Company.

 

 

For the Three Months

Ended September 30,

 

 

For the Nine Months

Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Package Specialty E&S

 

 

 

 

 

 

 

 

 

 

 

 

Gross written premiums excluding terminated business (1)

 

$

53,486

 

 

$

50,389

 

 

$

173,399

 

 

$

154,305

 

Gross written premiums from terminated business (1)

 

 

 

 

 

2,332

 

 

 

1,058

 

 

 

8,095

 

Total gross written premiums (2)

 

$

53,486

 

 

$

52,721

 

 

$

174,457

 

 

$

162,400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Targeted Specialty E&S

 

 

 

 

 

 

 

 

 

 

 

 

Gross written premiums excluding terminated business (1)

 

$

33,533

 

 

$

42,835

 

 

$

102,767

 

 

$

129,058

 

Gross written premiums from terminated business (1)

 

 

10

 

 

 

500

 

 

 

660

 

 

 

12,456

 

Total gross written premiums (2)

 

$

33,543

 

 

$

43,335

 

 

$

103,427

 

 

$

141,514

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Specialty

 

 

 

 

 

 

 

 

 

 

 

 

Gross written premiums excluding terminated business (1)

 

$

87,019

 

 

$

93,224

 

 

$

276,166

 

 

$

283,363

 

Gross written premiums from terminated business (1)

 

 

10

 

 

 

2,832

 

 

 

1,718

 

 

 

20,551

 

Total gross written premiums (2)

 

$

87,029

 

 

$

96,056

 

 

$

277,884

 

 

$

303,914

 

(1)

Non-GAAP measure / ratio

(2)

Most directly comparable GAAP measure / ratio

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 release3 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.

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

Contacts

Stephen W. Ries

Head of Investor Relations

(610) 668-3270

sries@gbli.com

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