GBLI Global Indemnity Plc

Global Indemnity Limited Reports Second Quarter 2018 Financial Results

Global Indemnity Limited Reports Second Quarter 2018 Financial Results

GEORGE TOWN, Cayman Islands, Aug. 07, 2018 (GLOBE NEWSWIRE) -- Global Indemnity Limited (NASDAQ:GBLI) today reported net income for the six months ended June 30, 2018 of $12.9 million or $0.90 per share. Adjusted operating income, which excludes after-tax realized gains and expenses related to the restructuring of debt, was $22.8 million or $1.60 per share. The combined ratio was 93.5%, a 2.0 point improvement over the same period in 2017, and investment income was $22.4 million, an increase of 27.9% compared to the same period in 2017. For the first six months of 2018, gross written premiums excluding discontinued lines increased 11.7% compared to the same period in 2017. Book value per share decreased by 2.3% to $49.41 at June 30, 2018 compared to December 31, 2017 mainly due to unrealized losses on the fixed income portfolio due to rising interest rates.  During the first six months of 2018, the Company declared and paid dividends of $0.50 per share to shareholders.

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

  For the Six Months

Ended June 30,
 As of

June 30,
 As of

December 31,
  2018 2017 2018 2017
         
Gross Premiums Written $ 283.1  $267.6 Book value per share$  49.41 $50.57
Net Premiums Written $ 244.3  $235.3 Shareholders’ equity$  702.4 $718.4
     Cash and invested assets (1)$1,551.7 $1,535.4
Net income $ 12.9  $  22.4     
Net income per share $ 0.90  $  1.27 (1) Including receivable/(payable) for securities sold/(purchased)
      
Adjusted operating income $ 22.8  $22.2     
Adjusted operating income per share $1.60  $1.26     
         
Combined ratio analysis:        
Loss ratio   51.8%  54.6%    
Expense ratio  41.7%  40.9%    
Combined ratio  93.5%  95.5%    
 

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 Six Months Ended June 30, 2018 and 2017                                                                                                                                               

The combined ratio improved to 93.5% (Loss Ratio 51.8% and Expense Ratio 41.7%) for the six months ended June 30, 2018 compared to 95.5% (Loss Ratio 54.6% and Expense Ratio 40.9%) for the six months ended June 30, 2017.

  • The current accident year property loss ratio improved by 7.6 points to 59.3% in 2018 from 66.9% in 2017 primarily due to lower claims frequency for catastrophe losses within Personal Lines.

     
  • The current accident year casualty loss ratio improved by 6.7 points to 57.5% in 2018 from 64.3% in 2017 primarily due to lower reported claims frequency within Personal Lines.

Calendar year results for the six months ended June 30, 2018 include $15.5 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 Six Months Ended June 30, 2018 and 2017

 Six Months Ended June 30,
 Gross Premiums Written  Net Premiums Written
 2018 2017 2018 2017
Commercial Lines Operations$  123,746  $  102,663 $  109,656 $  90,554
Personal Lines Operations   130,566     130,347  104,062    111,372
Reinsurance Operations   30,608     33,393    30,606    33,377
Business Fronted for Assurant (1,856)  1,242  -  -
Total$  283,064  $  267,645 $  244,324 $   235,303
             

Commercial Lines Operations: Gross premiums written and net premiums written increased 20.5% and 21.1%, respectively, for the six months ended June 30, 2018 as compared to the same period in 2017.  This increase is driven by rate increases, some new programs and increased interactions with agents.

Personal Lines Operations:  Gross premiums written increased by 0.2% and net premiums written decreased 6.6%, respectively, for the six months ended June 30, 2018 as compared to the same period in 2017. The decrease in net premiums written was primarily due to additional premiums being ceded that became effective on April 15, 2017. 

Reinsurance Operations: Gross premiums written and net premiums written both decreased 8.3% for the six  months ended June 30, 2018, as compared to the same period in 2017, mainly due to the non-renewal of a treaty partially offset by growth in other treaties.

            

Note: Tables Follow



Global Indemnity Limited

Consolidated Statements of Operations

(Unaudited)

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

 For the Three Months

Ended June 30,
 For the Six Months

Ended June 30,
 2018 2017 2018 2017
Gross premiums written$  158,817  $  143,894  $  283,064  $  267,645 
        
Net premiums written$  136,454  $  123,797  $  244,324  $  235,303 
        
Net premiums earned$  113,917  $  107,073  $  221,919  $  220,199 
Net investment income 10,954   8,840   22,358   17,484 
Net realized investment gains (losses) 2,830   (662)  2,514   113 
Other income 324   1,782   878   3,150 
Total revenues 128,025   117,033   247,669   240,946 
        
Net losses and loss adjustment  expenses 58,861   57,700   114,933   120,261 
Acquisition costs and other underwriting expenses 47,513   43,457   92,516   90,008 
Corporate and other operating expenses (1) 10,918   3,361   20,178   6,415 
Interest expense 4,940   4,762   9,801   7,229 
Income before income taxes 5,793   7,753   10,241   17,033 
Income tax benefit (1,399)  (2,336)  (2,652)  (5,338)
Net income $ 7,192  $ 10,089  $ 12,893  $ 22,371 
        
Weighted average shares outstanding–basic 14,092   17,336   14,074   17,326 
        
Weighted average shares outstanding–diluted 14,335   17,691   14,308   17,671 
        
Net income per share – basic $ 0.51  $ 0.58  $ 0.92  $ 1.29 
        
Net income per share – diluted $ 0.50  $ 0.57  $ 0.90  $ 1.27 
        
Combined ratio analysis: (2)       
Loss ratio 51.7   53.9   51.8   54.6 
Expense ratio 41.7   40.6   41.7   40.9 
Combined ratio 93.4   94.5   93.5   95.5 

(1) Corporate and other operating expenses include $7.0 million and $13.3 million of expenses related to the restructuring of debt for the three and six months ending June 30, 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)

June 30, 2018
 December 31, 2017
Fixed Maturities:    
 Available for sale securities, at fair value (amortized cost: 2018 - $1,308,735 and 2017 - $1,243,144) $1,283,870  $1,241,437 
Equity securities:    
 At fair value (cost: 2018 - $137,789 and 2017 - $124,915)  137,789   140,229 
Other invested assets  83,499   77,820 
 Total investments  1,505,158   1,459,486 
     
Cash and cash equivalents  47,138   74,414 
Premiums receivable, net  92,567   84,386 
Reinsurance receivables, net  96,568   105,060 
Funds held by ceding insurers  52,110   45,300 
Federal income taxes receivable  9,991   10,332 
Receivable for securities sold  -   1,543 
Deferred federal income taxes  32,843   26,196 
Deferred acquisition costs  65,504   61,647 
Intangible assets  22,285   22,549 
Goodwill  6,521   6,521 
Prepaid reinsurance premiums  25,237   28,851 
Other assets  25,897   75,384 
 Total assets $1,981,819  $2,001,669 
     
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Liabilities:    
Unpaid losses and loss adjustment expenses $613,670  $634,664 
Unearned premiums  304,188   285,397 
Ceded balances payable  21,848   10,851 
Payables for securities purchased  553   - 
Contingent commissions  6,496   7,984 
Debt  287,324   294,713 
Other liabilities  45,323   49,666 
 Total liabilities  1,279,402   1,283,275 
     
Shareholders’ equity:    
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued:10,157,242 and 10,102,927 respectively; A ordinary shares outstanding: 10,082,458 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  436,035   434,730 
Accumulated other comprehensive income, net of taxes  (22,475)  8,983 
Retained earnings  291,827   275,838 
A ordinary shares in treasury, at cost: 74,784 and 29,551 shares, respectively  (2,972)  (1,159)
 Total shareholders’ equity  702,417   718,394 
     
 Total liabilities and shareholders’ equity $1,981,819  $2,001,669 



GLOBAL INDEMNITY LIMITED

SELECTED INVESTMENT DATA

 (Dollars in millions)

  Market Value as of
  (Unaudited)

June 30, 2018
 December 31, 2017
     
Fixed maturities $1,283.9  $1,241.4
Cash and cash equivalents  47.1   74.4
Total bonds and cash and cash equivalents  1,331.0   1,315.8
Equities and other invested assets  221.3   218.1
Total cash and invested assets, gross  1,552.3   1,533.9
Receivable (payable) for securities sold/(purchased)  (0.6)  1.5
Total cash and invested assets, net  $1,551.7  $1,535.4



 
  (Unaudited)

Six Months Ended

June 30, 2018
(a)
   
Net investment income $   22.4 
   
Net realized investment gains  2.5 
Net change in unrealized investment losses  (24.3)
Net realized and unrealized investment returns  (21.8)
   
Total investment return $   0.6 
   
Average total cash and invested assets $  1,543.6 
   
Total investment return % annualized  0.1%

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



GLOBAL INDEMNITY LIMITED

SUMMARY OF OPERATING INCOME

(Unaudited)

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

 For the Three Months

Ended June 30,

 For the Six Months

Ended June 30,

 2018 2017 2018

 2017
               
Adjusted operating income, net of tax$  11,279  $  10,451  $  22,824  $  22,215
Adjustments:              
Net realized investment gains (losses) 2,202   (362)  1,952   156
Expenses related to the restructuring of debt (6,289)  -     (11,883)  -
               
Net income $   7,192  $  10,089  $   12,893  $  22,371
               
Weighted average shares outstanding – basic 14,092   17,336   14,074   17,326
               
Weighted average shares outstanding – diluted 14,335   17,691   14,308   17,671
               
Adjusted operating income per share – basic$   0.80  $  0.60  $  1.62  $  1.28
               
Adjusted operating income per share – diluted  $  0.79  $  0.59  $   1.60  $   1.26
               

Note Regarding Adjusted Operating Income

Adjusted operating income, a non-GAAP financial measure, is equal to net income excluding after-tax net realized investment gain or losses and other unique charges not related to operations. Adjusted operating income is not a substitute for net income 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
07/08/2018

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