GBLI Global Indemnity Plc

Global Indemnity Limited Reports 2018 Financial Results

Global Indemnity Limited Reports 2018 Financial Results

GEORGE TOWN, Cayman Islands, March 08, 2019 (GLOBE NEWSWIRE) -- Global Indemnity Limited (NASDAQ:GBLI) today reported a net loss of $56.7 million, a decrease of $47.1 million from 2017. Gross written premiums for the year ended December 31, 2018 increased 6.1%. Investment income for the year ended 2018 was $46.3 million, an increase of 17.8% compared to 2017. The combined ratio for the year ended December 31, 2018 was 112.3%. The Company declared and paid dividends of $1.00 per share during 2018.

Selected Operating and Balance Sheet Data (Dollars in millions, except per share data)

 For the Twelve Months

Ended December 31,
  As of

December 31,
 As of

December 31,
 2018 2017  2018 2017
         
Gross premiums written$547.9  $516.3  Book value per share$44.21  $50.57 
Net premiums written$472.5  $450.2  Shareholders’ equity$629.1  $718.4 
Net premiums earned$467.8  $438.0  Cash and invested assets (1)$1,510.2  $1,535.4 
Net investment income$46.3  $39.3  (1) Including receivable/(payable) for securities sold/(purchased)

Net loss$(56.7) $(9.6)     

About Global Indemnity Limited and its subsidiaries

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

  • United States Based Commercial Lines Operations

     
  • United States Based Personal Lines Operations

     
  • Bermuda Based Reinsurance Operations

For more information, visit the Global Indemnity Limited’s website at .

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. The foregoing review of factors that could cause actual financial or operating performance to differ materially from expectations is not exhaustive. 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 Twelve Months Ended December 31, 2018 and 2017

The combined ratio was 112.3% for the twelve months ended December 31, 2018 compared to 103.4% for the twelve months ended December 31, 2017. Excluding hurricane Michael and the California wildfires, the combined ratio would have been 99.3%.

Calendar year results for the twelve months ended December 31, 2018 include $28.8 million in favorable development, which was driven by lower than expected claims severity experienced across multiple prior accident years within Commercial Lines and Personal Lines as well as a reduction related to the Company’s property treaties for multiple prior accident years within the Reinsurance Operations. 

Global Indemnity Limited’s Gross and Net Premiums Written Results by Segment for the Twelve Months Ended December 31, 2018 and 2017

 Twelve Months Ended December 31,
  Gross Premiums Written  Net Premiums Written
  2018   2017   2018   2017 
Commercial Lines Operations$249,931  $212,471  $226,820  $186,322 
Personal Lines Operations 250,957   250,044   196,952   208,776 
Reinsurance Operations 48,043   53,887   48,033   53,933 
Runoff 1,028   1,270   742   1,149 
Fronted Business (2,062)  (1,338)  -   - 
Total$547,897  $516,334  $472,547  $450,180 

Commercial Lines Operations: Gross premiums written and net premiums written increased 17.6% and 21.7%, respectively, for the twelve months ended December 31, 2018 as compared to the same period in 2017. This increase is driven by rate increases and new products.

Personal Lines Operations: Gross premiums written increased by 0.4% and net premiums written decreased by 5.7% for the twelve months ended December 31, 2018 as compared to the same period in 2017.

Reinsurance Operations: Gross premiums written and net premiums written decreased 10.8% and 10.9% for the twelve months ended December 31, 2018, respectively, as compared to the same period in 2017 due primarily to the non-renewal of a treaty offset in part by growth in other treaties.

Note: Tables Follow

GLOBAL INDEMNITY LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

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

 For the Twelve Months

Ended December 31,
  2018   2017 
Gross premiums written$547,897  $516,334 
    
Net premiums written$472,547  $450,180 
    
Net premiums earned$467,775  $438,034 
Net investment income 46,342   39,323 
Net realized investment gains (losses) (16,907)  1,576 
Other income 1,728   6,582 
Total revenues 498,938   485,515 
    
Net losses and loss adjustment expenses 334,625   269,212 
Acquisition costs and other underwriting expenses 190,778   183,733 
Corporate and other operating expenses 29,766   25,714 
Interest expense 19,694   16,906 
Loss before income taxes (75,925)  (10,050)
Income tax benefit (19,229)  (499)
Net loss$(56,696) $ (9,551)
    
Weighted average shares outstanding–basic 14,089   17,309 
    
Weighted average shares outstanding–diluted 14,089   17,309 
    
Net loss per share – basic $ (4.02) $ (0.55)
    
Net loss per share – diluted $ (4.02) $ (0.55)
    
Combined ratio analysis: (1)   
Loss ratio 71.5%  61.5%
Expense ratio 40.8%  41.9%
Combined ratio 112.3%  103.4%

(1) 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 December 31, 2018 December 31, 2017
Fixed Maturities:    
Available for sale securities, at fair value

(amortized cost: 2018 - $1,257,830 and 2017 - $1,243,144)
 $1,235,155  $1,241,437 
Equity securities, at fair value  124,747   140,229 
Other invested assets  50,753   77,820 
Total investments  1,410,655   1,459,486 
     
Cash and cash equivalents  99,497   74,414 
Premiums receivable, net  87,679   84,386 
Reinsurance receivables, net  114,418   105,060 
Funds held by ceding insurers  49,206   45,300 
Federal income taxes receivable  10,866   10,332 
Receivable for securities sold  15   1,543 
Deferred federal income taxes  48,589   26,196 
Deferred acquisition costs  61,676   61,647 
Intangible assets  22,020   22,549 
Goodwill  6,521   6,521 
Prepaid reinsurance premiums  20,594   28,851 
Other assets  28,530   75,384 
Total assets $1,960,266  $2,001,669 
     
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Liabilities:    
Unpaid losses and loss adjustment expenses $680,031  $634,664 
Unearned premiums  281,912   285,397 
Ceded balances payable  14,994   10,851 
Contingent commissions  10,636   7,984 
Debt  288,565   294,713 
Other liabilities  55,069   49,666 
Total liabilities  1,331,207   1,283,275 
     
Shareholders’ equity:    
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 10,171,954 and 10,102,927 respectively; A ordinary shares outstanding: 10,095,312 and 10,073,376 respectively; B ordinary shares issued and outstanding: 4,133,366 and 4,133,366, respectively  2   2 
Additional paid-in capital  438,182   434,730 
Accumulated other comprehensive income, net of taxes  (21,231)  8,983 
Retained earnings  215,132   275,838 
A ordinary shares in treasury, at cost: 76,642 and 29,551 shares, respectively  (3,026)  (1,159)
Total shareholders’ equity  629,059   718,394 
     
Total liabilities and shareholders’ equity $1,960,266  $2,001,669 

GLOBAL INDEMNITY LIMITED

SELECTED INVESTMENT DATA

 (Dollars in millions)

  Market Value as of
  December 31, 2018 December 31, 2017
     
Fixed maturities $1,235.2  $1,241.4 
Cash and cash equivalents  99.5   74.4 
Total bonds and cash and cash equivalents  1,334.7   1,315.8 
Equities and other invested assets  175.5   218.1 
Total cash and invested assets, gross  1,510.2   1,533.9 
Receivable (payable) for securities sold/(purchased)  -   1.5 
Total cash and invested assets, net $1,510.2  $1,535.4 



  Twelve Months Ended

December 31, 2018
(a)
   
Net investment income $46.3 
   
Net realized investment losses  (16.9)
Net change in unrealized investment losses  (22.9)
Net realized and unrealized investment returns  (39.8)
   
Total investment return $6.5 
   
Average total cash and invested assets $1,522.8 
   
Total investment return %  0.4%

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

GLOBAL INDEMNITY LIMITED

SUMMARY OF ADJUSTED OPERATING INCOME (LOSS)

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

 For the Twelve Months

Ended December 31,
  2018   2017 
    
Adjusted operating income (loss), net of tax$(31,316) $7,173 
Adjustments:   
Net realized investment gains (losses) (13,497)  800 
Expenses related to the restructuring of debt (11,883)  - 
Deferred Tax writedown due to enactment of the Tax Cuts and Jobs Act of 2017 -   (17,524)
    
Net loss$(56,696) $(9,551)
    
Weighted average shares outstanding – basic 14,089   17,309 
    
Weighted average shares outstanding – diluted 14,089   17,680 
    
Adjusted operating income (loss) per share – basic$(2.22) $  0.41 
    
Adjusted operating income (loss) per share – diluted $(2.22) $  0.41 

Note Regarding Adjusted Operating Income (loss)

Adjusted Operating income (loss), a non-GAAP financial measure, is equal to net 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.

Contact:

Media

Stephen W. Ries

Senior Corporate Counsel

(610) 668-3270



EN
08/03/2019

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