EX-99.1 2 d367393dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

PRESS RELEASE

 

For release:    August 8, 2017
  
Contact:   

Media

Stephen W. Ries

Senior Corporate Counsel

(610) 668-3270

sries@global-indemnity.com

Global Indemnity Limited Reports Second Quarter 2017 Financial Results.

George Town, Cayman Islands (August 8, 2017) – Global Indemnity Limited (NASDAQ:GBLI) today reported net income for the six months ended June 30, 2017 of $22.4 million or $1.27 per share, and operating income of $22.2 million or $1.26 per share. As of June 30th, book value per share was $47.13, an increase of 3.8% compared to book value per share of $45.42 at December 31, 2016.

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

 

     For the Six Months
Ended June 30,		           As of
June 30,
2017		      As of
December 31,
2016		  
     2017      2016             

Gross Premiums Written

    $ 267.6      $ 295.7     

Book value per share

    $ 47.13      $ 45.42  

Net Premiums Written

    $ 235.3      $ 242.2     

Shareholders’ equity

    $ 827.7      $ 798.0  
        

Cash and invested assets (1)

   $ 1,631.9      $ 1,498.1  

Net income

    $ 22.4      $ 2.0           

Net income per share

    $ 1.27      $ 0.11     

(1)    Including receivable/(payable) for securities sold/(purchased)

     

Operating income

    $ 22.2      $ 9.1           

Operating income per share

    $ 1.26      $ 0.52           

Combined ratio analysis:

               

Loss ratio

      54.6        59.7           

Expense ratio

      40.9        42.0           
  

 

 

     

 

 

           

Combined ratio

      95.5        101.7           
  

 

 

     

 

 

           

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 http://www.globalindemnity.ky.

Forward-Looking Information

The forward-looking statements contained in this press release [1] do not address a number of risks and uncertainties. Investors are cautioned that Global Indemnity’s actual results may be materially different from the estimates expressed in, or implied, or projected by, the forward looking statements. These statements are based on estimates and information available to us at the time of this press release. All forward-looking statements in this press release are based on information available to the 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, 2017 and 2016

The combined ratio is a key measure of insurance profitability. The components comprising the combined ratio are as follows:

 

     Six Months Ended
June 30,		  
     2017      2016  

Loss Ratio:

      

Current Accident Year

      

Excluding Catastrophes

      51.3        51.5  

Catastrophes

      14.9        14.7  
  

 

 

     

 

 

  

Current Accident Year

      66.2        66.2  

Changes to Prior Accident Year

      (11.6 )       (6.5 ) 
  

 

 

     

 

 

  

Loss Ratio – Calendar Year

      54.6        59.7  

Expense Ratio

      40.9        42.0  
  

 

 

     

 

 

  

Combined Ratio

      95.5        101.7  
  

 

 

     

 

 

  

For the six months ended June 30th, the calendar year loss ratio improved by 5.1 points to 54.6% in 2017 from 59.7% in 2016.

For the six months ended June 30th, the current accident year loss ratio was 66.2% in both 2017 and 2016.

 

  •   The current accident year property loss ratio increased 0.2 points to 66.9% in 2017 from 66.7% in 2016 primarily due to higher catastrophe losses from convective storms in 2017 in the agriculture product in Personal Lines offset almost entirely by an improvement in the Commercial Lines’ current accident year property loss ratio due to lower claim frequency and severity.

 

  •   The current accident year casualty loss ratio improved by 0.2 points to 64.3% in 2017 from 64.5% in 2016.

Calendar year results for the six months ended June 30, 2017 include a 11.6 point reduction in the loss ratio related to prior accident years, which was primarily driven by lower than expected claims frequency and severity experienced across multiple prior accident years within Commercial Lines, lower than expected case incurred emergence primarily related to the 2016 accident year within Personal Lines as well as a reduction related to the Company’s property treaties within the Reinsurance Operations.

For the six months ended June 30th, the expense ratio improved from 42.0% in 2016 to 40.9% in 2017.

The improvement in the expense ratio is primarily due to receiving a federal excise tax refund related to prior years as well as a reduction in compensation expense.

Global Indemnity Limited’s Gross and Net Premiums Written Results by Segment for the Six Months Ended June 30, 2017 and 2016

 

     Six Months Ended June 30,  
     Gross Premiums Written      Net Premiums Written  
     2017      2016      2017      2016  

Commercial Lines Operations

    $ 102,663      $ 106,181      $ 90,554      $ 95,125  

Personal Lines Operations

      131,589        164,361        111,372        121,928  

Reinsurance Operations

      33,393        25,143        33,377        25,129  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 267,645      $ 295,685      $ 235,303      $ 242,182  
  

 

 

     

 

 

     

 

 

     

 

 

  

Commercial Lines Operations: Gross premiums written and net premiums written decreased 3.3% and 4.8%, respectively, for the six months ended June 30, 2017 as compared to the same period in 2016. The decline in gross premiums written is mainly due to the discontinuance of one unprofitable program partially offset by the introduction of a new program. Excluding the terminated unprofitable program, gross premiums written increased by 5% compared to the same period in 2016. Net premiums written were also impacted by these changes as well as purchasing additional property reinsurance that became effective on April 15, 2017.

Personal Lines Operations: Gross premiums written and net premiums written decreased 19.9% and 8.7%, respectively, for the six months ended June 30, 2017 as compared to the same period in 2016. Gross premiums written include business written by American Reliable that is ceded to insurance entities owned by Assurant under a 100% quota share reinsurance agreement in the amount of $1.2 million and $23.6 million for the six months ended June 30, 2017 and 2016, respectively. Excluding the business that is ceded 100% to insurance entities owned by Assurant, gross premiums written decreased by 7.4% for the six months ended June 30, 2017 as compared to 2016. The decrease in gross and net written premiums was primarily due to a targeted reduction of catastrophe exposed business as well as underwriting actions taken to improve profitability.

Reinsurance Operations: Gross premiums written and net premiums written increased 32.8% for the six months ended June 30, 2017 as compared to the same period in 2016. This increase is mainly due to a new mortgage insurance treaty written in the fourth quarter of 2016.

###

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,		  
     2017     2016     2017     2016  

Gross premiums written

    $ 143,894     $ 154,319     $ 267,645     $ 295,685  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net premiums written

    $ 123,797     $ 125,310     $ 235,303     $ 242,182  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net premiums earned

    $ 107,073     $ 117,804     $ 220,199     $ 239,440  

Net investment income

      8,840       6,562       17,484       16,308  

Net realized investment gains (losses)

      (662 )      (3,492 )      113       (10,985 ) 

Other income

      1,782       795       3,150       1,751  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

      117,033       121,669       240,946       246,514  

Net losses and loss adjustment expenses

      57,700       78,111       120,261       142,895  

Acquisition costs and other underwriting expenses

      43,457       48,542       90,008       100,632  

Corporate and other operating expenses

      3,361       4,255       6,415       8,058  

Interest expense

      4,762       2,229       7,229       4,444  
  

 

 

    

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

      7,753       (11,468 )      17,033       (9,515 ) 

Income tax benefit

      (2,336 )      (6,303 )      (5,338 )      (11,475 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss)

    $ 10,089     $ (5,165 )    $ 22,371     $ 1,960  
  

 

 

    

 

 

    

 

 

    

 

 

  

Weighted average shares outstanding–basic

      17,336       17,244       17,326       17,234  
  

 

 

    

 

 

    

 

 

    

 

 

  

Weighted average shares outstanding–diluted

      17,691       17,244       17,671       17,485  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) per share – basic

    $ 0.58     $ (0.30 )    $ 1.29     $ 0.11  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) per share – diluted (1)

    $ 0.57     $ (0.30 )    $ 1.27     $ 0.11  
  

 

 

    

 

 

    

 

 

    

 

 

  

Combined ratio analysis: (2)

        

Loss ratio

      53.9       66.3       54.6       59.7  

Expense ratio

      40.6       41.2       40.9       42.0  
  

 

 

    

 

 

    

 

 

    

 

 

  

Combined ratio

      94.5       107.5       95.5       101.7  
  

 

 

    

 

 

    

 

 

    

 

 

  

 

(1) For the quarter ended June 30, 2016, diluted loss per share is the same as basic loss per share since there was 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 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, 2017		     December 31, 2016  

Fixed Maturities:

     

Available for sale securities, at fair value

(amortized cost: 2017 – $1,336,457 and 2016 – $1,241,339)

    $ 1,338,974     $ 1,240,031  

Equity securities:

     

Available for sale, at fair value

(cost: 2017 – $124,424 and 2016 – $119,515)

      130,516       120,557  

Other invested assets

      72,298       66,121  
  

 

 

    

 

 

  

Total investments

      1,541,788       1,426,709  

Cash and cash equivalents

      96,464       75,110  

Premiums receivable, net

      86,235       92,094  

Reinsurance receivables, net

      107,452       143,774  

Funds held by ceding insurers

      38,267       13,114  

Deferred federal income taxes

      43,995       40,957  

Deferred acquisition costs

      61,748       57,901  

Intangible assets

      22,814       23,079  

Goodwill

      6,521       6,521  

Prepaid reinsurance premiums

      32,048       42,583  

Other assets

      67,022       51,104  
  

 

 

    

 

 

  

Total assets

    $ 2,104,354     $ 1,972,946  
  

 

 

    

 

 

  

LIABILITIES AND SHAREHOLDERS’ EQUITY

     

Liabilities:

     

Unpaid losses and loss adjustment expenses

    $ 615,763     $ 651,042  

Unearned premiums

      291,549       286,984  

Federal income taxes payable

      299       219  

Ceded balances payable

      14,795       14,675  

Payables for securities purchased

      6,325       3,717  

Contingent commissions

      4,663       9,454  

Debt

      296,238       163,143  

Other liabilities

      47,048       45,761  
  

 

 

    

 

 

  

Total liabilities

      1,276,680       1,174,995  
  

 

 

    

 

 

  

Shareholders’ equity:

     

Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued:13,456,489 and 13,436,548 respectively; A ordinary shares outstanding: 13,426,938 and 13,436,548, respectively; B ordinary shares issued and outstanding: 4,133,366 and 4,133,366, respectively

      2       2  

Additional paid-in capital

      432,190       430,283  

Accumulated other comprehensive income, net of taxes

      5,986       (618 ) 

Retained earnings

      390,655       368,284  

A ordinary shares in treasury, at cost: 29,551 and 0 shares, respectively

      (1,159 )      —    
  

 

 

    

 

 

  

Total shareholders’ equity

      827,674       797,951  
  

 

 

    

 

 

  

Total liabilities and shareholders’ equity

    $ 2,104,354     $ 1,972,946  
  

 

 

    

 

 

  

GLOBAL INDEMNITY LIMITED

SELECTED INVESTMENT DATA

(Dollars in millions)

 

     Market Value as of  
     (Unaudited)
June 30, 2017		     December 31, 2016  

Fixed maturities

    $ 1,339.0     $ 1,240.0  

Cash and cash equivalents

      96.4       75.1  
  

 

 

    

 

 

  

Total bonds and cash and cash equivalents

      1,435.4       1,315.1  

Equities and other invested assets

      202.8       186.7  
  

 

 

    

 

 

  

Total cash and invested assets, gross

      1,638.2       1,501.8  

Payable for securities purchased

      (6.3 )      (3.7 ) 
  

 

 

    

 

 

  

Total cash and invested assets, net

    $ 1,631.9     $ 1,498.1  
  

 

 

    

 

 

  

 

     (Unaudited)
Six Months Ended
June 30, 2017 (a)		  

Net investment income

    $ 17.5  
  

 

 

  

Net realized investment gains

      0.1  

Net change in unrealized investment gains

      9.1  
  

 

 

  

Net realized and unrealized investment returns

      9.2  
  

 

 

  

Total investment return

    $ 26.7  
  

 

 

  

Average total cash and invested assets (b)

    $ 1,565.0  
  

 

 

  

Total investment return % annualized

      3.4 % 
  

 

 

  

 

(a) Amounts in this table are shown on a pre-tax basis.
(b) Simple average of beginning and end of period, net of payable/receivable for securities.

GLOBAL INDEMNITY LIMITED

SUMMARY OF OPERATING INCOME (LOSS)

(Unaudited)

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

 

     For the Three Months
Ended June 30,		     For the Six Months
Ended June 30,		  
     2017     2016     2017      2016  

Operating income (loss)

    $ 10,451     $ (2,915 )    $ 22,215      $ 9,076  

Adjustments:

       

Net realized investment gains (losses), net of tax

      (362 )      (2,250 )      156        (7,116 ) 
  

 

 

    

 

 

    

 

 

     

 

 

  

Net income (loss)

    $ 10,089     $ (5,165 )    $ 22,371      $ 1,960  
  

 

 

    

 

 

    

 

 

     

 

 

  

Weighted average shares outstanding – basic

      17,336       17,244       17,326        17,234  
  

 

 

    

 

 

    

 

 

     

 

 

  

Weighted average shares outstanding – diluted

      17,691       17,244       17,671        17,485  
  

 

 

    

 

 

    

 

 

     

 

 

  

Operating income (loss) per share – basic

    $ 0.60     $ (0.17 )    $ 1.28      $ 0.53  
  

 

 

    

 

 

    

 

 

     

 

 

  

Operating income (loss) per share – diluted (1)

    $ 0.59     $ (0.17 )    $ 1.26      $ 0.52  
  

 

 

    

 

 

    

 

 

     

 

 

  

Note Regarding Operating Income (loss)

Operating income (loss), a non-GAAP financial measure, is equal to net income (loss) excluding after-tax net realized investment gains (losses). 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.

 

(1) For the quarter ended June 30, 2016, diluted loss per share is the same as basic loss per share since there was a net loss for the period.