×

Global Indemnity Limited Reports Third Quarter 2017 Financial Results

GEORGE TOWN, Cayman Islands, Nov. 08, 2017 (GLOBE NEWSWIRE) -- 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,
As of
September 30,
As of
December 31,
2017 2016 2017 2016
Gross Premiums Written $393.7 $429.3Book value per share$ 46.91 $ 45.42
Net Premiums Written $344.3 $357.2Shareholders’ equity$ 823.9 $ 798.0
Cash and invested
assets (1)
$1,628.1 $1,498.1
Net income $ 13.4 $ 11.5
Net income per share $ 0.76 $ 0.66(1) Including receivable/(payable) for securities sold/(purchased)
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


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)


ASSETS
(Unaudited)
September 30, 2017
December 31, 2016
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.

Contact:
Media
Stephen W. Ries
Senior Corporate Counsel
(610) 668-3270
sries@global-indemnity.com

Source:Global Indemnity Limited