Global Indemnity Group LLC

11/07/2024 | Press release | Distributed by Public on 11/07/2024 07:02

Global Indemnity Group, LLC Reports Third Quarter 2024 Results

WILMINGTON, Del.--(BUSINESS WIRE)-- Global Indemnity Group, LLC (NYSE:GBLI) (the "Company") today reported an increase of 77% in net income available to shareholders to $33.9 million or $2.48 per share for the nine months ended September 30, 2024 compared to $19.2 million or $1.39 per share for the same period in 2023.

Highlights for the Nine Months Ended September 30, 2024

  • Net income available to shareholders increased 77% to $33.9 million or $2.48 per share in 2024 compared to $19.2 million or $1.39 per share in 2023.
  • Operating income increased 57% to $33.8 million in 2024 compared to $21.5 million in 2023.
  • Book value per share increased to $49.88 at September 30, 2024 from $47.53 at December 31, 2023; increased 7.1% including dividends paid of $1.05 per share in 2024.
  • Investment income increased 18% to $46.3 million in 2024 compared to $39.4 million in 2023 due to an increase in book yield on the Company's bond portfolio to 4.6% at September 30, 2024 from 4.0% at September 30, 2023 and growth of 7% in the investment portfolio to $1.47 billion driven primarily by operating cash flow.
  • Annualized return on equity, including unrealized gains on fixed-income securities included in stockholders' equity, was 9.8% in 2024 compared to 5.2% in 2023.
  • Annualized investment return was 6.1% for the first nine months of 2024.
  • GBLI's current accident year underwriting income increased to $15.3 million for 2024 compared with $5.0 million in 2023 driven by:
    • The Company's Penn-America segment that posted $17.6 million of underwriting income (combined ratio of 93.9%), higher than 2023 underwriting income of $9.7 million (combined ratio of 96.7%) driven by improved non-catastrophe and catastrophe property results.
    • GBLI's catastrophe losses declined 35%; $10.3 million in 2024 from $15.8 million in 2023. 2024 includes $1.5 million related to Hurricane Helene.
  • Penn-America gross written premiums, excluding products terminated, increased 12% to $293.0 million in 2024 compared to $262.8 million in 2023.
    • InsurTech grew 17% to $41.9 million in 2024 compared with $35.7 million in 2023 from organic agency growth, new agency appointments and new products.
    • Wholesale Commercial's policy premiums, excluding audit premiums, is higher by 12% in 2024 driven by aggregate premium rate increase of 9%.
    • Assumed Re increased 131% from $8.4 million in 2023 to $19.3 million in 2024 due to new treaties commencing in both 2023 and 2024.
  • Prior accident year loss development was slightly favorable at $0.1 million for the first nine months of 2024.
  • AM Best affirmed Global Indemnity Group, LLC's A (Excellent) rating for its U.S. insurance subsidiaries on August 1, 2024.

Selected Operating and Balance Sheet Information

(Dollars in millions, except per share data)

For the Three Months Ended
September 30,

For the Nine Months Ended
September 30,

2024

2023

2024

2023

Consolidated:

Net income available to shareholders

$

12.7

$

7.6

$

33.9

$

19.2

Net income available to shareholders per share

$

0.92

$

0.55

$

2.48

$

1.39

Operating income

$

13.2

$

7.8

$

33.8

$

21.5

Operating income per share

$

0.95

$

0.56

$

2.45

$

1.53

Underwriting income, current accident year

$

6.6

$

1.8

$

15.3

$

5.0

Underwriting income

$

5.8

$

0.7

$

14.6

$

3.9

Gross written premiums

$

99.8

$

98.9

$

294.0

$

332.0

Investment income

$

16.5

$

14.2

$

46.3

$

39.4

Annualized investment return

7.9

%

3.8

%

6.1

%

4.2

%

Combined ratio analysis:

Loss ratio

54.9

%

58.3

%

56.0

%

60.7

%

Expense ratio

39.4

%

41.4

%

39.2

%

38.5

%

Combined ratio

94.3

%

99.7

%

95.2

%

99.2

%

Combined ratio, current accident year

93.5

%

98.6

%

95.0

%

98.9

%

Penn-America Segment:

Underwriting income, current accident year

$

7.7

$

3.4

$

17.6

$

9.7

Underwriting income (loss)

$

7.3

$

(4.5

)

$

17.6

$

(1.5

)

Penn-America gross written premiums (1)

$

103.1

$

84.0

$

293.0

$

262.8

Combined ratio analysis:

Loss ratio

54.7

%

67.1

%

55.6

%

62.9

%

Expense ratio

37.9

%

38.6

%

38.3

%

38.0

%

Combined ratio

92.6

%

105.7

%

93.9

%

100.9

%

Combined ratio, current accident year

92.1

%

96.3

%

93.9

%

96.7

%

As of
September 30,
2024

As of
June 30,
2024

As of
March 31,
2024

As of
December 31,
2023

Consolidated:

Book value per share

$

49.88

$

48.56

$

48.18

$

47.53

Book value per share plus cumulative dividends and

excluding AOCI

$

57.50

$

56.58

$

56.00

$

55.22

Shareholders' equity

$

686.7

$

667.5

$

659.5

$

648.8

Cash and invested assets

$

1,468.0

$

1,435.2

$

1,417.3

$

1,390.4

Shares Outstanding (in millions)

13.7

13.7

13.6

13.6

(1) Excludes $0.2 million and $3.0 million of gross written premiums for terminated products for the three months ended September 30, 2024 and 2023, respectively, and $4.8 million and $14.7 million of gross written premiums for terminated products for the nine months ended September 30, 2024 and 2023, respectively.

GLOBAL INDEMNITY GROUP, LLC

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,

2024

2023

2024

2023

Gross written premiums

$

99,767

$

98,926

$

293,961

$

332,011

Net written premiums

$

97,177

$

95,623

$

287,013

$

317,480

Net earned premiums

$

95,413

$

111,695

$

284,806

$

380,923

Net investment income

16,488

14,200

46,319

39,424

Net realized investment gains (losses)

(512

)

(133

)

540

(2,414

)

Other income

372

299

1,074

935

Total revenues

111,761

126,061

332,739

418,868

Net losses and loss adjustment expenses

52,400

65,116

159,446

231,199

Acquisition costs and other underwriting expenses

37,553

46,202

111,790

146,781

Corporate and other operating expenses

5,923

5,280

18,662

16,638

Interest expense

-

-

17

12

Income before income taxes

15,885

9,463

42,824

24,238

Income tax expense

3,125

1,763

8,605

4,707

Net income

12,760

7,700

34,219

19,531

Less: Preferred stock distributions

110

110

330

330

Net income available to common shareholders

$

12,650

$

7,590

$

33,889

$

19,201

Per share data:

Net income available to common shareholders

Basic

$

0.93

$

0.56

$

2.49

$

1.42

Diluted

$

0.92

$

0.55

$

2.48

$

1.39

Weighted-average number of shares outstanding

Basic

13,665

13,523

13,618

13,557

Diluted

13,801

13,814

13,684

13,799

Cash distributions declared per common share

$

0.35

$

0.25

$

1.05

$

0.75

Combined ratio analysis:

Loss ratio

54.9

%

58.3

%

56.0

%

60.7

%

Expense ratio

39.4

%

41.4

%

39.2

%

38.5

%

Combined ratio

94.3

%

99.7

%

95.2

%

99.2

%

GLOBAL INDEMNITY GROUP, LLC

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

(Unaudited)
September 30,
2024

December 31,
2023

ASSETS

Fixed maturities:

Available for sale, at fair value (amortized cost: $1,404,854 and $1,322,092; net of
allowance for expected credit losses of $0 at September 30, 2024 and December 31, 2023)

$

1,395,229

$

1,293,793

Equity securities, at fair value

12,347

16,508

Other invested assets

29,459

38,236

Total investments

1,437,035

1,348,537

Cash and cash equivalents

31,019

38,037

Premium receivables, net of allowance for expected credit losses of

$3,486 at September 30, 2024 and $4,796 at December 31, 2023

73,425

102,158

Reinsurance receivables, net of allowance for expected credit losses of

$8,992 at September 30, 2024 and December 31, 2023

76,393

80,439

Funds held by ceding insurers

27,194

16,989

Deferred federal income taxes

24,491

36,802

Deferred acquisition costs

40,855

42,445

Intangible assets

14,191

14,456

Goodwill

4,820

4,820

Prepaid reinsurance premiums

3,260

4,958

Receivable for securities

19

3,858

Federal income tax receivable

1,062

-

Lease right of use assets

8,519

9,715

Other assets

18,834

26,362

Total assets

$

1,761,117

$

1,729,576

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:

Unpaid losses and loss adjustment expenses

$

840,176

$

850,599

Unearned premiums

183,362

182,852

Ceded balances payable

963

2,642

Federal income tax payable

-

1,595

Contingent commissions

5,203

5,632

Lease liabilities

10,836

12,733

Other liabilities

33,851

24,770

Total liabilities

$

1,074,391

$

1,080,823

Shareholders' equity:

Series A cumulative fixed rate preferred shares, $1,000 par value;

100,000,000 shares authorized, shares issued and outstanding:

4,000 and 4,000 shares, respectively, liquidation preference:

$1,000 per share and $1,000 per share, respectively

4,000

4,000

Common shares: no par value; 900,000,000 common shares authorized;

class A common shares issued: 11,181,998 and 11,042,670, respectively;

class A common shares outstanding: 9,894,230 and 9,771,429, respectively;

class B common shares issued and outstanding: 3,793,612 and 3,793,612, respectively

-

-

Additional paid-in capital (1)

458,714

454,791

Accumulated other comprehensive income (loss), net of tax

(7,847

)

(22,863

)

Retained earnings (1)

264,551

244,988

Class A common shares in treasury, at cost: 1,287,768 and 1,271,241 shares, respectively

(32,692

)

(32,163

)

Total shareholders' equity

686,726

648,753

Total liabilities and shareholders' equity

$

1,761,117

$

1,729,576

(1) Since the Company's initial public offering in 2003, the Company has returned $624 million to shareholders, including $522 million in share repurchases and $102 million in dividends/distributions.

Segment Data for the Nine Months Ended September 30, 2024 and 2023

(Dollars in millions)

Underwriting Income for the Nine Months Ended September 30,

Penn-America

Non-Core Operations

Consolidated

2024

2023

2024

2023

2024

2023

Revenues:

Gross written premiums

$

297.9

$

277.4

$

(3.9

)

$

54.6

$

294.0

$

332.0

Net written premiums

$

290.9

$

266.8

$

(3.9

)

$

50.7

$

287.0

$

317.5

Net earned premiums

$

272.5

$

266.7

$

12.3

$

114.2

$

284.8

$

380.9

Underwriting income (loss), current

accident year

$

17.6

$

9.7

$

(2.3

)

$

(4.7

)

$

15.3

$

5.0

Underwriting income (loss)

$

17.6

$

(1.4

)

$

(3.0

)

$

5.3

$

14.6

$

3.9

Combined ratio analysis:

Loss ratio

Current accident year

55.7

%

58.8

%

62.6

%

65.1

%

56.0

%

60.7

%

Prior accident year

(0.1

%)

4.1

%

2.5

%

(9.5

%)

-

-

Calendar year loss ratio

55.6

%

62.9

%

65.1

%

55.6

%

56.0

%

60.7

%

Expense ratio

38.3

%

38.0

%

59.4

%

39.8

%

39.2

%

38.5

%

Combined ratio

93.9

%

100.9

%

124.5

%

95.4

%

95.2

%

99.2

%

Combined ratio, current accident year

93.9

%

96.7

%

118.9

%

104.2

%

95.0

%

98.9

%

Gross Written Premiums for the Nine Months Ended September 30,

2024

2023

% Change

Penn-America:

Wholesale Commercial

$

186.9

$

174.4

7%

InsurTech

41.9

35.7

17%

Assumed Reinsurance

19.3

8.4

131%

248.1

218.5

14%

Specialty Products

49.8

58.9

(16%)

Penn-America

297.9

277.4

7%

Non-Core Operations

(3.9

)

54.6

(107%)

Total

$

294.0

$

332.0

(12%)

GLOBAL INDEMNITY GROUP, LLC

SELECTED INVESTMENT DATA

(Dollars in millions)

Market Value as of

(Unaudited)
September 30, 2024

December 31, 2023

Fixed maturities

$

1,395.2

$

1,293.8

Cash and cash equivalents

31.0

38.0

Total fixed maturities and cash and cash equivalents

1,426.2

1,331.8

Equities and other invested assets

41.8

54.7

Total cash and invested assets, gross

1,468.0

1,386.5

Receivable for securities

-

3.9

Total cash and invested assets, net

$

1,468.0

$

1,390.4

Total Pre-Tax Investment Return

For the Three Months Ended
September 30,
(Unaudited)

For the Nine Months Ended
September 30,
(Unaudited)

2024

2023

2024

2023

Net investment income

$

16.5

$

14.2

$

46.3

$

39.4

Net realized investment gains (losses)

(0.5

)

(0.1

)

0.5

(2.4

)

Net unrealized investment gains (losses)

12.8

(1.3

)

18.8

6.1

Net realized and unrealized investment return

12.3

(1.4

)

19.3

3.7

Total investment return

$

28.8

$

12.8

$

65.6

$

43.1

Average total cash and invested assets

$

1,451.6

$

1,355.1

$

1,429.3

$

1,354.7

Total annualized investment return %

7.9

%

3.8

%

6.1

%

4.2

%

SUMMARY OF OPERATING INCOME

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

For the Three Months Ended
September 30,
(Unaudited)

For the Nine Months Ended
September 30,
(Unaudited)

2024

2023

2024

2023

Operating income, net of tax (1)

$

13,162

$

7,801

$

33,790

$

21,493

Net realized investment gains (losses)

(402

)

(101

)

429

(1,962

)

Net income

$

12,760

$

7,700

$

34,219

$

19,531

Weighted average shares outstanding - diluted

13,801

13,814

13,684

13,799

Operating income per share - diluted (2)

$

0.95

$

0.56

$

2.45

$

1.53

(1) Operating income, net of tax, excludes preferred shareholder distributions of $0.1 million for each of the three months ended September 30, 2024 and 2023 and $0.3 million for each of the nine months ended September 30, 2024 and 2023.

(2) The operating income per share calculation is net of preferred shareholder distributions of $0.1 million for each of the three months ended September 30, 2024 and 2023 and $0.3 million for each of the nine months ended September 30, 2024 and 2023.

Note Regarding Operating Income

Operating income, a non-GAAP financial measure, is equal to net income excluding after-tax net realized investment gains (losses) and other unique charges not related to operations. Operating income is not a substitute for net income determined in accordance with GAAP, and investors should not place undue reliance on this measure.

About Global Indemnity Group, LLC and its subsidiaries

Global Indemnity Group, LLC (NYSE:GBLI), through its several direct and indirect wholly owned subsidiary insurance 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. The insurance companies manage the distribution of the Company's core product offerings through Penn-America. The Company also has a Non-Core Operations segment that contains lines of business that have been de-emphasized or are no longer being written.

For more information, visit the Company's website at www.gbli.com.

Forward-Looking Information

The forward-looking statements contained in this press release 3 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.

[3] Disseminated pursuant to the "safe harbor" provisions of Section 21E of the Security Exchange Act of 1934.

Stephen W. Ries
Head of Investor Relations
(610) 668-3270
[email protected]

Source: Global Indemnity Group, LLC