EX-99.1 2 d486431dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

PRESS RELEASE

 

For release:    November 8, 2017
Contact:    Media
   Stephen W. Ries
   Senior Corporate Counsel
   (610) 668-3270
   sries@global-indemnity.com

Global Indemnity Limited Reports Third Quarter 2017 Financial Results.

George Town, Cayman Islands (November 8, 2017) – Global Indemnity Limited (NASDAQ:GBLI) today reported net income for the nine months ended September 30, 2017 of $13.4 million or $0.76 per share, an increase of $1.9 million or 17% compared to the same period of 2016. Operating income was $14.0 million or $0.79 per share for the period ending September 30, 2017, and book value per share was $46.91 as of September 30, 2017, an increase of 3.3% 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 Nine Months
Ended September 30,		  
     2017     2016  

Gross Premiums Written

    $ 393.7     $ 429.3  

Net Premiums Written

    $ 344.3     $ 357.2  

Net income

    $ 13.4     $ 11.5  

Net income per share

    $ 0.76     $ 0.66  

Operating income

    $ 14.0     $ 17.3  

Operating income per share

    $ 0.79     $ 0.99  

Combined ratio analysis:

     

Loss ratio

      61.6       59.9  

Expense ratio

      41.1       41.4  
  

 

 

    

 

 

  

Combined ratio

      102.7       101.3  
  

 

 

    

 

 

  

Impact of hurricanes Harvey, Irma and Maria

      (9.3 )      —    
  

 

 

    

 

 

  

Combined ratio excluding hurricanes Harvey, Irma and Maria

      93.4       101.3  
  

 

 

    

 

 

  
    

As of

September 30,

     

As of

December 31,

  
     2017      2016  

Book value per share

    $ 46.91      $ 45.42  

Shareholders’ equity

    $ 823.9      $ 798.0  

Cash and invested assets (1)

    $ 1,628.1      $ 1,498.1  

 

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

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 Nine Months Ended September 30, 2017 and 2016

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

 

     Nine Months Ended
September 30,		  
     2017      2016  

Loss Ratio:

      

Current Accident Year

      

Excluding Catastrophes

      52.1        53.0  

Catastrophes

      20.1        13.9  
  

 

 

     

 

 

  

Current Accident Year

      72.2        66.9  

Changes to Prior Accident Year

      (10.6 )       (7.0 ) 
  

 

 

     

 

 

  

Loss Ratio – Calendar Year

      61.6        59.9  

Expense Ratio

      41.1        41.4  
  

 

 

     

 

 

  

Combined Ratio

     102.7        101.3  
  

 

 

     

 

 

  

The combined ratio increased 1.4 points to 102.7% for the nine months ended September 30, 2017 compared to 101.3% for the nine months ended September 30, 2016. Excluding hurricanes Harvey, Irma, and Maria, the combined ratio would have been 93.4%.

For the nine months ended September 30th, the calendar year loss ratio increased by 1.7 points to 61.6% in 2017 from 59.9% in 2016. Excluding hurricanes Harvey, Irma, and Maria, the calendar year loss ratio for the nine month ended September 30, 2017 would have been 52.3%.

For the nine months ended September 30th, the current accident year loss ratio increased by 5.3 points in 2017 to 72.2% compared to 66.9% for the same period in 2016.

 

  •   The current accident year property loss ratio increased 8.7 points to 75.2% in 2017 from 66.5% in 2016 primarily due to higher catastrophe losses within the Company’s U.S. Insurance Operations and Reinsurance Operations. Hurricanes Harvey, Irma and Maria impacted U.S. Insurance Operations by $12.9 million and Reinsurance Operations by $17.7 million and increased the property loss ratio by 13.0%.

 

  •   The current accident year casualty loss ratio improved by 3.0 points to 64.8% in 2017 from 67.8% in 2016. The improvement in the loss ratio reflects lower reported claims frequency in 2017.

Calendar year results for the nine months ended September 30, 2017 include a 10.6 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 2015 and 2016 accident years within Personal Lines as well as a reduction related to the Company’s property treaties within the Reinsurance Operations.

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

 

     Nine Months Ended September 30,  
     Gross Premiums Written      Net Premiums Written  
     2017      2016      2017      2016  

Commercial Lines Operations

    $ 155,555      $ 142,865      $ 136,868      $ 128,164  

Personal Lines Operations

      191,857        204,164        161,142        178,736  

Reinsurance Operations

      45,372        34,941        45,344        34,927  

Runoff

      1,100        16,374        994        15,406  

Business Fronted for Assurant

      (185 )       30,910        —          —    
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 393,699      $ 429,254      $ 344,348      $ 357,233  
  

 

 

     

 

 

     

 

 

     

 

 

  

Commercial Lines Operations: Gross premiums written increased 8.9% and net premiums written increased 6.8% compared to the same period in 2016 mainly due to the introduction of a new program as well as increased production within two existing programs.

Personal Lines Operations: Gross premiums written and net premiums written decreased 6.0% and 9.8%, respectively, for the nine months ended September 30, 2017 as compared to the same period in 2016. The decrease in gross premiums written was primarily due to a targeted reduction of catastrophe exposed business. Net premiums written were also impacted by this change as well as ceding additional premiums under property catastrophe treaties.

Reinsurance Operations: Gross premiums written and net premiums written increased 29.9% and 29.8% for the nine months ended September 30, 2017, respectively, as compared to the same period in 2016 mainly due to a new 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 September 30,		      For the Nine Months
Ended September 30,		  
     2017     2016      2017     2016  

Gross premiums written

    $ 126,054     $ 133,569      $ 393,699     $ 429,254  
  

 

 

    

 

 

     

 

 

    

 

 

  

Net premiums written

    $ 109,045     $ 115,051      $ 344,348     $ 357,233  
  

 

 

    

 

 

     

 

 

    

 

 

  

Net premiums earned

    $ 108,619     $ 119,553      $ 328,818     $ 358,993  

Net investment income

      10,134       8,795        27,618       25,103  

Net realized investment gains (losses)

      (963 )      1,928        (850 )      (9,057 ) 

Other income

      2,294       7,852        5,444       9,603  
  

 

 

    

 

 

     

 

 

    

 

 

  

Total revenues

      120,084       138,128        361,030       384,642  

Net losses and loss adjustment expenses

      82,395       72,162        202,656       215,057  

Acquisition costs and other underwriting expenses

      45,002       48,129        135,010       148,761  

Corporate and other operating expenses

      4,630       5,006        11,045       13,064  

Interest expense

      4,836       2,233        12,065       6,677  
  

 

 

    

 

 

     

 

 

    

 

 

  

Income (loss) before income taxes

      (16,779 )      10,598        254       1,083  

Income tax expense (benefit)

      (7,855 )      1,063        (13,193 )      (10,412 ) 
  

 

 

    

 

 

     

 

 

    

 

 

  

Net income (loss)

    $ (8,924 )    $ 9,535      $ 13,447     $ 11,495  
  

 

 

    

 

 

     

 

 

    

 

 

  

Weighted average shares outstanding–basic

      17,343       17,255        17,332       17,241  
  

 

 

    

 

 

     

 

 

    

 

 

  

Weighted average shares outstanding–diluted

      17,343       17,540        17,685       17,516  
  

 

 

    

 

 

     

 

 

    

 

 

  

Net income (loss) per share – basic

    $ (0.51 )    $ 0.55      $ 0.78     $ 0.67  
  

 

 

    

 

 

     

 

 

    

 

 

  

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

    $ (0.51 )    $ 0.54      $ 0.76     $ 0.66  
  

 

 

    

 

 

     

 

 

    

 

 

  

Combined ratio analysis: (2)

         

Loss ratio

      75.9       60.3        61.6       59.9  

Expense ratio

      41.4       40.3        41.1       41.4  
  

 

 

    

 

 

     

 

 

    

 

 

  

Combined ratio

      117.3       100.6        102.7       101.3  
  

 

 

    

 

 

     

 

 

    

 

 

  

 

(1) For the quarter ended September 30, 2017, 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)

 

     (Unaudited)
September 30, 2017		     December 31, 2016  

ASSETS

     

Fixed Maturities:

     

Available for sale securities, at fair value
(amortized cost: 2017 - $1,355,690 and 2016 - $1,241,339)

    $ 1,360,163     $ 1,240,031  

Equity securities:

     

Available for sale, at fair value
(cost: 2017 - $124,064 and 2016 - $119,515)

      133,462       120,557  

Other invested assets

      73,553       66,121  
  

 

 

    

 

 

  

Total investments

      1,567,178       1,426,709  

Cash and cash equivalents

      60,087       75,110  

Premiums receivable, net

      84,462       92,094  

Reinsurance receivables, net

      123,769       143,774  

Funds held by ceding insurers

      40,274       13,114  

Receivable for securities sold

      785       —    

Deferred federal income taxes

      50,549       40,957  

Deferred acquisition costs

      62,297       57,901  

Intangible assets

      22,682       23,079  

Goodwill

      6,521       6,521  

Prepaid reinsurance premiums

      30,827       42,583  

Other assets

      81,259       51,104  
  

 

 

    

 

 

  

Total assets

    $ 2,130,690     $ 1,972,946  
  

 

 

    

 

 

  

LIABILITIES AND SHAREHOLDERS’ EQUITY

     

Liabilities:

     

Unpaid losses and loss adjustment expenses

    $ 649,726     $ 651,042  

Unearned premiums

      290,760       286,984  

Federal income taxes payable

      533       219  

Ceded balances payable

      12,867       14,675  

Payables for securities purchased

      —         3,717  

Contingent commissions

      5,552       9,454  

Debt

      298,935       163,143  

Other liabilities

      48,404       45,761  
  

 

 

    

 

 

  

Total liabilities

      1,306,777       1,174,995  
  

 

 

    

 

 

  

Shareholders’ equity:

     

Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued:13,458,465 and 13,436,548 respectively; A ordinary shares outstanding: 13,428,914 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

      433,254       430,283  

Accumulated other comprehensive income, net of taxes

      10,085       (618 ) 

Retained earnings

      381,731       368,284  

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

      (1,159 )      —    
  

 

 

    

 

 

  

Total shareholders’ equity

      823,913       797,951  
  

 

 

    

 

 

  

Total liabilities and shareholders’ equity

    $ 2,130,690     $ 1,972,946  
  

 

 

    

 

 

  

GLOBAL INDEMNITY LIMITED

SELECTED INVESTMENT DATA

(Dollars in millions)

 

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

Fixed maturities

    $ 1,360.2      $ 1,240.0  

Cash and cash equivalents

      60.1        75.1  
  

 

 

     

 

 

  

Total bonds and cash and cash equivalents

      1,420.3        1,315.1  

Equities and other invested assets

      207.0        186.7  
  

 

 

     

 

 

  

Total cash and invested assets, gross

      1,627.3        1,501.8  

Receivable (payable) for securities sold/(purchased)

      0.8        (3.7 ) 
  

 

 

     

 

 

  

Total cash and invested assets, net

    $ 1,628.1      $ 1,498.1  
  

 

 

     

 

 

  

 

     (Unaudited)
Nine Months Ended
September 30, 2017 (a)		  

Net investment income

    $ 27.6  
  

 

 

  

Net realized investment losses

      (0.8 ) 

Net change in unrealized investment gains

      14.7  
  

 

 

  

Net realized and unrealized investment returns

      13.9  
  

 

 

  

Total investment return

    $ 41.5  
  

 

 

  

Average total cash and invested assets

    $ 1,587.6  
  

 

 

  

Total investment return % annualized

      3.5 % 
  

 

 

  

 

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

GLOBAL INDEMNITY LIMITED

SUMMARY OF 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,		  
     2017     2016      2017     2016  

Operating income (loss)

    $ (8,246 )    $ 8,262      $ 13,969     $ 17,337  

Adjustments:

          

Net realized investment gains (losses), net of tax

      (678 )      1,273        (522 )      (5,842 ) 
  

 

 

    

 

 

     

 

 

    

 

 

  

Net income (loss)

    $ (8,924 )    $ 9,535      $ 13,447     $ 11,495  
  

 

 

    

 

 

     

 

 

    

 

 

  

Weighted average shares outstanding – basic

      17,343       17,255        17,332       17,241  
  

 

 

    

 

 

     

 

 

    

 

 

  

Weighted average shares outstanding – diluted

      17,343       17,540        17,685       17,516  
  

 

 

    

 

 

     

 

 

    

 

 

  

Operating income (loss) per share – basic

    $ (0.48 )    $ 0.48      $ 0.81     $ 1.01  
  

 

 

    

 

 

     

 

 

    

 

 

  

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

   $ (0.48 )    $ 0.47      $ 0.79     $ 0.99  
  

 

 

    

 

 

     

 

 

    

 

 

  

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 September 30, 2017, diluted loss per share is the same as basic loss per share since there was a net loss for the period.