EX-99.1 2 d830045dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

PRESS RELEASE

 

For release:    November 5, 2019
Contact:    Media
   Stephen W. Ries
   Senior Corporate Counsel
   (610) 668-3270
   sries@global-indemnity.com

Global Indemnity Limited Reports Third Quarter 2019 Financial Results

George Town, Cayman Islands (November 5, 2019) – Global Indemnity Limited (NASDAQ:GBLI) today reported net income for the nine months ended September 30, 2019 of $41.0 million or $2.86 per share, an increase of $24.4 million or 146.6%, compared to the same period in 2018. Gross Premiums Written increased by 14.3% to $478.7 million for the nine months ended September 30, 2019, compared to $418.7 million for the same period in 2018. The combined ratio for the first nine months of 2019 was 92.8%, a 5.5 point improvement over the same period in 2018 and total investment return was 6.2%. Book value per share increased by 12.0% (net of Company dividends of $0.75 per share to shareholders) during the nine months, from $44.21 per share at December 31, 2018 to $49.53 per share at September 30, 2019.

Selected Operating and Balance Sheet Information

(Dollars in millions, except per share data)

 

     For the Nine Months
Ended September 30,		  
     2019     2018  

Gross Premiums Written

    $  478.7     $  418.7  

Net Premiums Written

    $ 421.3     $ 360.6  
    

Net income

    $ 41.0     $ 16.6  

Net income per share

    $ 2.86     $ 1.16  
    

Combined ratio analysis:

     

Loss ratio

      52.7 %      57.1 % 

Expense ratio

      40.1 %      41.2 % 
  

 

 

    

 

 

  

Combined ratio

      92.8 %      98.3 % 
  

 

 

    

 

 

  

 

    

As of

September 30,

     

As of

December 31,

  
     2019      2018  

Book value per share (1)

    $ 49.53      $ 44.21  

Shareholders’ equity

    $ 707.4      $ 629.1  

Cash and invested assets (2)

    $  1,614.2      $  1,510.2  

 

(1)

Net of cumulative Company dividends to shareholders totaling $1.75 per share and $1.00 per share as of September 30, 2019 and December 31, 2018, respectively.

(2)

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 specialty casualty insurance coverages and individual policyholder coverages in the United States, as well as reinsurance worldwide. Global Indemnity Limited’s four primary segments are:

 

  •  

United States Based Commercial Specialty

 

  •  

United States Based Specialty Property

 

  •  

United States Based Farm, Ranch, & Stable

 

  •  

Bermuda Based Reinsurance

The Company’s Commercial Specialty segment was formerly known as Commercial Lines. During the 1st quarter of 2019, the Company re-evaluated its Personal Lines segment and determined that Personal Lines should be bifurcated into two reportable segments: Specialty Property and Farm, Ranch, & Stable.

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 Global Indemnity as of the date hereof. 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, 2019 and 2018    

For the nine months ended September 30, 2019, the Company recorded a combined ratio of 92.8% (Loss Ratio 52.7% and Expense Ratio 40.1%) compared to 98.3% (Loss Ratio 57.1% and Expense Ratio 41.2%) for the nine months ended September 30, 2018.

 

  •  

The current accident year property loss ratio improved by 7.5 points to 59.5% in 2019 from 67.0% in 2018 primarily due to lower claims frequency and severity in the U.S. Insurance Operations.

 

  •  

The current accident year casualty loss ratio improved by 3.8 points to 56.9% in 2019 compared to 60.7% in 2018 primarily due to lower claims frequency and severity in the U.S. Insurance Operations.

Calendar year results for the nine months ended September 30, 2019 include $23.0 million in favorable loss development mainly from the U.S. Insurance Operations.

Global Indemnity Limited’s Gross and Net Premiums Written Results by Segment for the Nine Months Ended September 30, 2019 and 2018

 

     Nine Months Ended September 30,  
     Gross Premiums Written     Net Premiums Written  
     2019      2018      %
Change		     2019      2018      %
Change		  

Commercial Specialty

    $  214,467      $  186,923        14.7 %    $  185,202      $  165,817        11.7 % 

Specialty Property

      128,771        132,286        (2.7 %)      110,668        101,542        9.0 % 

Farm, Ranch, & Stable

      65,872        59,496        10.7 %      55,861        53,239        4.9 % 

Reinsurance

      69,589        39,965        74.1 %      69,590        39,959        74.2 % 
  

 

 

     

 

 

       

 

 

     

 

 

     

Total

    $ 478,699      $ 418,670        14.3 %    $ 421,321      $ 360,557        16.9 % 
  

 

 

     

 

 

       

 

 

     

 

 

     

Commercial Specialty Operations: Gross premiums written and net premiums written increased 14.7% and 11.7%, respectively, for the nine months ended September 30, 2019 as compared to the same period in 2018. This increase is primarily driven by new programs and increases in excess & surplus lines submissions.

Specialty Property Operations: Gross premiums written decreased by 2.7% and net premiums written increased by 9.0% for the nine months ended September 30, 2019 as compared to the same period in 2018. The decrease in gross premiums written was primarily due to a continued reduction of catastrophe exposed business. As a result of reducing its catastrophe exposure, Specialty Property ceded less premiums to reinsurers, which contributed to the growth in net premiums written.

Farm, Ranch, & Stable Operations: Gross premiums written increased by 10.7% and net premiums written increased by 4.9% for the nine months ended September 30, 2019 as compared to the same period in 2018. The increase in gross and net premiums written was primarily due to an increase in pricing as well as new agent appointments.

Reinsurance Operations: Gross premiums written and net premiums written increased 74.1% and 74.2%, respectively, for the nine months ended September 30, 2019, as compared to the same period in 2018, mainly due to entering a new casualty treaty during 2019 and rate increases within the property catastrophe line of business.

###

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,		  
     2019     2018     2019      2018  

Gross premiums written

    $  157,177     $  135,606     $  478,699      $ 418,670  
  

 

 

    

 

 

    

 

 

     

 

 

  

Net premiums written

    $ 138,836     $ 116,233     $ 421,321      $  360,557  
  

 

 

    

 

 

    

 

 

     

 

 

  

Net premiums earned

    $ 133,312     $ 120,528     $ 383,602      $ 342,447  

Net investment income

      11,348       11,750       32,393        34,108  

Net realized investment gains (losses)

      (2,690 )      5,319       11,290        7,833  

Other income

      264       411       1,274        1,289  
  

 

 

    

 

 

    

 

 

     

 

 

  

Total revenues

      142,234       138,008       428,559        385,677  

Net losses and loss adjustment expenses (1)

      73,583       80,493       201,979        195,426  

Acquisition costs and other underwriting expenses

      53,366       48,680       153,643        141,196  

Corporate and other operating expenses

      3,858       3,475       11,702        23,653  

Interest expense

      5,023       4,924       15,088        14,725  
  

 

 

    

 

 

    

 

 

     

 

 

  

Income before income taxes

      6,404       436       46,147        10,677  

Income tax expense (benefit)

      (317 )      (3,292 )      5,163        (5,944 ) 
  

 

 

    

 

 

    

 

 

     

 

 

  

Net income

    $ 6,721     $ 3,728     $ 40,984      $ 16,621  
  

 

 

    

 

 

    

 

 

     

 

 

  

Weighted average shares outstanding–basic

      14,203       14,100       14,182        14,083  
  

 

 

    

 

 

    

 

 

     

 

 

  

Weighted average shares outstanding–diluted

      14,328       14,347       14,329        14,321  
  

 

 

    

 

 

    

 

 

     

 

 

  

Net income per share – basic

    $ 0.47     $ 0.26     $ 2.89      $ 1.18  
  

 

 

    

 

 

    

 

 

     

 

 

  

Net income per share – diluted

    $ 0.47     $ 0.26     $ 2.86      $ 1.16  
  

 

 

    

 

 

    

 

 

     

 

 

  

Cash dividends declared per share

    $ 0.25     $ 0.25     $ 0.75      $ 0.75  
  

 

 

    

 

 

    

 

 

     

 

 

  

Combined ratio analysis: (2)

         

Loss ratio

      55.2       66.8       52.7        57.1  

Expense ratio

      40.0       40.4       40.1        41.2  
  

 

 

    

 

 

    

 

 

     

 

 

  

Combined ratio

      95.2       107.2       92.8        98.3  
  

 

 

    

 

 

    

 

 

     

 

 

  

 

(1)

Includes loss reductions related to prior years of $7.0 million and $12.0 million for the three months ended September 30, 2019 and 2018, respectively and $23.0 million and $27.5 million for the nine months ended September 30, 2019 and 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)

 

     (Unaudited)
September 30, 2019		     December 31, 2018  

ASSETS

     

Fixed Maturities:

     

Available for sale securities, at fair value

(amortized cost: 2019 - $1,203,984 and 2018 - $1,257,830)

    $  1,234,435     $  1,235,155  

Equity securities, at fair value

      262,367       124,747  

Other invested assets

      40,052       50,753  
  

 

 

    

 

 

  

Total investments

      1,536,854       1,410,655  

Cash and cash equivalents

      78,181       99,497  

Premiums receivable, net

      112,992       87,679  

Reinsurance receivables, net

      83,012       114,418  

Funds held by ceding insurers

      48,751       49,206  

Federal income taxes receivable

      11,136       10,866  

Receivable for securities sold

      —         15  

Deferred federal income taxes

      36,479       48,589  

Deferred acquisition costs

      70,861       61,676  

Intangible assets

      21,623       22,020  

Goodwill

      6,521       6,521  

Prepaid reinsurance premiums

      17,763       20,594  

Other assets

      59,983       28,530  
  

 

 

    

 

 

  

Total assets

    $ 2,084,156     $ 1,960,266  
  

 

 

    

 

 

  

LIABILITIES AND SHAREHOLDERS’ EQUITY

     

Liabilities:

     

Unpaid losses and loss adjustment expenses

    $ 633,287     $ 680,031  

Unearned premiums

      316,797       281,912  

Ceded balances payable

      36,431       14,994  

Payables for securities purchased

      848       —    

Contingent commissions

      10,035       10,636  

Debt

      297,324       288,565  

Other liabilities

      82,050       55,069  
  

 

 

    

 

 

  

Total liabilities

      1,376,772       1,331,207  
  

 

 

    

 

 

  

Shareholders’ equity:

     

Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued:10,258,795 and 10,171,954, respectively; A ordinary shares outstanding: 10,148,346 and 10,095,312, respectively; B ordinary shares issued and outstanding: 4,133,366 and 4,133,366, respectively

      2       2  

Additional paid-in capital (1)

      440,695       438,182  

Accumulated other comprehensive income (loss), net of taxes

      25,314       (21,231 ) 

Retained earnings (1)

      245,346       215,132  

A ordinary shares in treasury, at cost: 110,449 and 76,642 shares, respectively

      (3,973 )      (3,026 ) 
  

 

 

    

 

 

  

Total shareholders’ equity

      707,384       629,059  
  

 

 

    

 

 

  

Total liabilities and shareholders’ equity

    $ 2,084,156     $ 1,960,266  
  

 

 

    

 

 

  

 

(1)

Since the Company’s initial public offering in 2003, the Company repurchased 20.2 million shares for a total of $488 million. These share repurchases are reflected by a $488 million reduction of the Company’s additional paid-in capital and retained earnings as of September 30, 2019 and December 31, 2018. Retained earnings are also net of $25 million and $14 million of cumulative historic Company dividends to shareholders as of September 30, 2019 and December 31, 2018, respectively.

GLOBAL INDEMNITY LIMITED

SELECTED INVESTMENT DATA

(Dollars in millions)

 

     Market Value as of  
     (Unaudited)
September 30, 2019		     December 31, 2018  

Fixed maturities

    $  1,234.4     $  1,235.2  

Cash and cash equivalents

      78.2       99.5  
  

 

 

    

 

 

  

Total bonds and cash and cash equivalents

      1,312.6       1,334.7  

Equities and other invested assets

      302.4       175.5  
  

 

 

    

 

 

  

Total cash and invested assets, gross

      1,615.0       1,510.2  

Payable for securities purchased

      (0.8 )      —    
  

 

 

    

 

 

  

Total cash and invested assets, net

    $ 1,614.2     $ 1,510.2  
  

 

 

    

 

 

  

 

     Total Investment Return (1)  
     For the Three Months
Ended September 30,
(unaudited)		     For the Nine Months
Ended September 30,
(unaudited)		  
     2019     2018     2019     2018  

Net investment income

    $ 11.3     $ 11.8     $ 32.4     $ 34.1  
  

 

 

    

 

 

    

 

 

    

 

 

  

Net realized investment gains (losses)

      (2.7 )      5.3       11.3       7.8  

Net unrealized investment gains

      10.0       (1.6 )      53.4       (25.8 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net realized and unrealized investment gains

      7.3       3.7       64.7       (18.0 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total net investment income and gains

    $ 18.6     $ 15.5     $ 97.1     $ 16.1  
  

 

 

    

 

 

    

 

 

    

 

 

  

Average total cash and invested assets

    $  1,585.2     $  1,542.0     $  1,562.2     $  1,533.8  
  

 

 

    

 

 

    

 

 

    

 

 

  

Total investment return %

      1.2 %      1.0 %      6.2 %      1.1 % 
  

 

 

    

 

 

    

 

 

    

 

 

  

 

(1)

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