Global Indemnity Limited Reports First Quarter 2017 Financial Results
May 08 2017 - 4:25PM
GEORGE TOWN, Cayman Islands, May 08, 2017 (GLOBE
NEWSWIRE) -- Global Indemnity Limited (NASDAQ:GBLI) today reported
net income for the three months ended March 31, 2017 of $12.3
million or $0.70 per share, and operating income of $11.8 million
or $0.67 per share. As of March 31st, book value
per share was $46.44, an increase of 2.3% 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 Three
Months
Ended March 31, |
|
|
As
of
March 31,
|
|
As
of
December 31, |
|
|
2017 |
|
2016 |
|
|
2017
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Premiums Written |
|
$ |
123.8 |
|
$ |
141.4 |
|
Book value per share |
$ |
46.44 |
|
|
$ |
45.42 |
|
Net Premiums Written |
|
$ |
111.5 |
|
$ |
116.9 |
|
Shareholders' equity |
$ |
815.2 |
|
|
$ |
798.0 |
|
|
|
|
|
|
|
Cash and invested
assets(1) |
$ |
1,621.8 |
|
|
$ |
1,498.1 |
|
Net income |
|
$ |
12.3 |
|
$ |
7.1 |
|
|
|
|
|
|
|
|
|
Net income per share |
|
$ |
0.70 |
|
$ |
0.41 |
|
(1)
Including receivable/(payable) for securities
sold/(purchased)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
11.8 |
|
$ |
12.0 |
|
|
|
|
|
|
|
|
|
Operating income per
share |
|
$ |
0.67 |
|
$ |
0.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio analysis: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio |
|
|
55.3 |
|
|
53.3 |
|
|
|
|
|
|
|
|
|
Expense ratio |
|
|
41.1 |
|
|
42.8 |
|
|
|
|
|
Combined ratio |
|
|
96.4 |
|
|
96.1 |
|
|
|
|
|
|
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 release1 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 Three Months
Ended March 31, 2017 and 2016
The combined ratio is a key measure of insurance
profitability. The components comprising the combined ratio
are as follows:
|
|
Three Months Ended March
31, |
|
2017 |
|
2016 |
Loss
Ratio: |
|
|
|
Current
Accident Year |
|
|
|
Excluding Catastrophes |
49.5 |
|
|
49.2 |
|
Catastrophes |
14.8 |
|
|
9.5 |
|
Current Accident Year |
64.3 |
|
|
58.7 |
|
Changes
to Prior Accident Year |
(9.0 |
) |
|
(5.4 |
) |
Loss
Ratio - Calendar Year |
55.3 |
|
|
53.3 |
|
Expense
Ratio |
41.1 |
|
|
42.8 |
|
Combined
Ratio |
96.4 |
|
|
96.1 |
|
|
For the
three months ended March 31st, the
calendar year loss ratio increased by 2.0 points to 55.3 in 2017
from 53.3 in 2016 and the expense ratio improved by 1.7
points.
For the three months ended March 31, 2017, the
current accident year loss ratio increased by 5.6 points in 2017 to
64.3 compared to 58.7 for the same period in 2016.
- The current accident year property loss ratio
increased by 7.7 points to 64.8 in 2017 from 57.1 in 2016 primarily
due to higher losses in the agriculture reserve category from
convective storms within the Personal Lines Operations in 2017
partially offset by lower claims frequency and severity within the
Commercial Lines Operations in 2017.
- The current accident year casualty loss ratio
improved by 0.7 points to 62.9 in 2017 from 63.6 in 2016 primarily
due to a decrease in reported claims frequency in 2017.
Calendar year results for the three months ended
March 31, 2017 include a 9.0 point reduction in the loss ratio
related to prior accident years. This was primarily driven by
lower than expected claims severity experienced in Commercial Lines
across multiple prior accident years and lower than expected case
incurred emergence experienced in Personal Lines, as well as a
reduction related to the Company's property treaties within the
Reinsurance Operations.
For the
three months ended March 31st, the expense
ratio improved from 42.8 in 2016 to 41.1 in 2017.
The improvement in the expense ratio is primarily
due to a reduction in compensation cost and lower acquisition
costs.
Global Indemnity Limited's
Gross and Net Premiums Written Results by Segment
|
|
Three Months Ended March 31, |
|
Gross Premiums
Written |
|
Net Premiums
Written |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Commercial Lines
Operations |
$ |
45,911 |
|
$ |
48,480 |
|
$ |
41,115 |
|
$ |
42,966 |
Personal Lines Operations |
$ |
62,017 |
|
$ |
80,151 |
|
$ |
54,583 |
|
$ |
61,171 |
Reinsurance Operations |
$ |
15,823 |
|
$ |
12,735 |
|
$ |
15,808 |
|
$ |
12,735 |
Total |
$ |
123,751 |
|
$ |
141,366 |
|
$ |
111,506 |
|
$ |
116,872 |
|
Commercial Lines
Operations: For the three months ended March 31,
2017, gross premiums written and net premiums written both
decreased 5.3% and 4.3%, respectively, compared to the same period
in 2016. The reduction in gross premiums and net premiums written
was primarily due to the discontinuance of one unprofitable
program.
Personal Lines
Operations: 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 $1.1 million and $13.4 million for the
three months ended March 31, 2017 and 2016, respectively.
Excluding the business that is ceded 100% to insurance entities
owned by Assurant, gross premiums written decreased by 8.6% for the
three months ended March 31, 2017 as compared to 2016. The decrease
in gross and net written premiums was primarily due to a targeted
reduction of catastrophe exposed business. For the three
months ended March 31, 2017, gross premiums written, including
business that is ceded to insurance entities owned by Assurant,
decreased 22.6% and net premiums written decreased 10.8% compared
to the same period in 2016.
Reinsurance
Operations: For the three months ended March 31,
2017, gross premiums written and net premiums written increased
24.2% and 24.1%, respectively, as compared to the same period in
2016. This increase in gross and net premiums written is mainly due
to a new treaty written in the fourth quarter of 2016 partially
offset by a slight reduction in property writings.
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 March 31, |
|
2017 |
|
2016 |
|
|
|
|
Gross premiums written |
$ |
123,751 |
|
|
$ |
141,366 |
|
|
|
|
|
Net premiums written |
$ |
111,506 |
|
|
$ |
116,872 |
|
|
|
|
|
Net premiums earned |
$ |
113,126 |
|
|
$ |
121,636 |
|
Net investment income |
|
8,644 |
|
|
|
9,746 |
|
Net realized investment gains
(losses) |
|
775 |
|
|
|
(7,493 |
) |
Other income |
|
1,368 |
|
|
|
956 |
|
Total revenues |
|
123,913 |
|
|
|
124,845 |
|
|
|
|
|
Net losses and loss adjustment
expenses |
|
62,561 |
|
|
|
64,784 |
|
Acquisition costs and other
underwriting expenses |
|
46,551 |
|
|
|
52,090 |
|
Corporate and other operating
expenses |
|
3,054 |
|
|
|
3,803 |
|
Interest expense |
|
2,467 |
|
|
|
2,215 |
|
Income before income taxes |
|
9,280 |
|
|
|
1,953 |
|
Income tax benefit |
|
(3,002 |
) |
|
|
(5,172 |
) |
Net income |
$ |
12,282 |
|
|
$ |
7,125 |
|
|
|
|
|
Weighted average shares
outstanding-basic |
|
17,316 |
|
|
|
17,224 |
|
|
|
|
|
Weighted average shares
outstanding-diluted |
|
17,646 |
|
|
|
17,444 |
|
|
|
|
|
Net
income per share - basic |
$ |
0.71 |
|
|
$ |
0.41 |
|
|
|
|
|
Net
income per share - diluted |
$ |
0.70 |
|
|
$ |
0.41 |
|
|
|
|
|
Combined
ratio analysis: (1) |
|
|
|
Loss ratio |
|
55.3 |
|
|
|
53.3 |
|
Expense ratio |
|
41.1 |
|
|
|
42.8 |
|
Combined ratio |
|
96.4 |
|
|
|
96.1 |
|
|
|
|
|
|
|
|
|
(1) 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)
March 31, 2017 |
|
December 31, 2016 |
Fixed Maturities: |
|
|
|
|
|
Available for sale securities,
at fair value (amortized cost: 2017 - $1,309,245 and 2016 -
$1,241,339) |
|
$ |
1,309,753 |
|
|
$ |
1,240,031 |
|
Equity securities: |
|
|
|
|
|
Available for sale, at fair
value (cost: 2017 - $122,559 and 2016 - $119,515) |
|
|
128,705 |
|
|
|
120,557 |
|
Other invested assets |
|
|
64,213 |
|
|
|
66,121 |
|
|
Total investments |
|
|
1,502,671 |
|
|
|
1,426,709 |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
127,543 |
|
|
|
75,110 |
|
Premiums receivable, net |
|
|
80,727 |
|
|
|
92,094 |
|
Reinsurance receivables,
net |
|
|
106,432 |
|
|
|
143,774 |
|
Funds held by ceding
insurers |
|
|
31,862 |
|
|
|
13,114 |
|
Deferred federal income
taxes |
|
|
41,989 |
|
|
|
40,957 |
|
Deferred acquisition
costs |
|
|
58,090 |
|
|
|
57,901 |
|
Intangible assets |
|
|
22,946 |
|
|
|
23,079 |
|
Goodwill |
|
|
6,521 |
|
|
|
6,521 |
|
Prepaid reinsurance
premiums |
|
|
33,108 |
|
|
|
42,583 |
|
Other assets |
|
|
60,496 |
|
|
|
51,104 |
|
|
Total assets |
|
$ |
2,072,385 |
|
|
$ |
1,972,946 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
Liabilities: |
|
|
|
|
Unpaid losses and loss
adjustment expenses |
|
$ |
622,088 |
|
|
$ |
651,042 |
|
Unearned premiums |
|
|
275,884 |
|
|
|
286,984 |
|
Ceded balances payable |
|
|
7,550 |
|
|
|
14,675 |
|
Payables for securities
purchased |
|
|
8,387 |
|
|
|
3,717 |
|
Contingent commissions |
|
|
3,553 |
|
|
|
9,454 |
|
Debt |
|
|
296,454 |
|
|
|
163,143 |
|
Federal income taxes
payable |
|
|
220 |
|
|
|
219 |
|
Other liabilities |
|
|
43,082 |
|
|
|
45,761 |
|
|
Total liabilities |
|
|
1,257,218 |
|
|
|
1,174,995 |
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
Ordinary shares, $0.0001 par
value, 900,000,000 ordinary shares authorized; A ordinary shares
issued:13,449,721 and 13,436,548 respectively; A ordinary shares
outstanding: 13,420,756 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 |
|
|
431,404 |
|
|
|
430,283 |
|
Accumulated other
comprehensive income, net of taxes |
|
|
4,332 |
|
|
|
(618 |
) |
Retained earnings |
|
|
380,566 |
|
|
|
368,284 |
|
A ordinary shares in treasury,
at cost: 28,965 and 0 shares, respectively |
|
|
(1,137 |
) |
|
|
- |
|
|
Total shareholders'
equity |
|
|
815,167 |
|
|
|
797,951 |
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity |
|
$ |
2,072,385 |
|
|
$ |
1,972,946 |
|
GLOBAL INDEMNITY LIMITED |
SELECTED INVESTMENT DATA |
(Dollars in
millions) |
|
|
|
Market Value as of |
|
|
(Unaudited)
March 31, 2017 |
|
December 31, 2016 |
|
|
|
|
|
Fixed maturities |
|
$ |
1,309.8 |
|
|
$ |
1,240.0 |
|
Cash and cash equivalents |
|
|
127.5 |
|
|
|
75.1 |
|
Total bonds and cash and cash
equivalents |
|
|
1,437.3 |
|
|
|
1,315.1 |
|
Equities and other invested
assets |
|
|
192.9 |
|
|
|
186.7 |
|
Total cash and invested
assets, gross |
|
|
1,630.2 |
|
|
|
1,501.8 |
|
Payable for securities
purchased |
|
|
(8.4 |
) |
|
|
(3.7 |
) |
Total cash and invested
assets, net |
|
$ |
1,621.8 |
|
|
$ |
1,498.1 |
|
|
|
(Unaudited)
Three Months Ended
March 31, 2017 (a) |
|
|
|
Net investment income |
|
$ |
8.6 |
|
|
|
|
Net realized investment
gains |
|
|
0.8 |
|
Net change in unrealized
investment gains |
|
|
7.0 |
|
Net realized and unrealized
investment returns |
|
|
7.8 |
|
|
|
|
Total investment return |
|
$ |
16.4 |
|
|
|
|
Average total cash and
invested assets (b) |
|
$ |
1,560.0 |
|
|
|
|
Total investment return %
annualized |
|
|
4.2 |
% |
|
(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 |
(Unaudited) |
(Dollars and shares in
thousands, except per share data) |
|
|
For the Three
Months
Ended March 31, |
|
2017 |
|
2016 |
|
|
|
|
Operating income |
$ |
11,764 |
|
|
$ |
11,991 |
|
Adjustments: |
|
|
|
Net realized investment
gains/(losses), net of tax |
|
518 |
|
|
|
(4,866 |
) |
|
|
|
|
Net
income |
$ |
12,282 |
|
|
$ |
7,125 |
|
|
|
|
|
Weighted average shares
outstanding - basic |
|
17,316 |
|
|
|
17,224 |
|
|
|
|
|
Weighted average shares
outstanding - diluted |
|
17,646 |
|
|
|
17,444 |
|
|
|
|
|
Operating income per share - basic |
$ |
0.68 |
|
|
$ |
0.70 |
|
|
|
|
|
Operating income per share - diluted |
$ |
0.67 |
|
|
$ |
0.69 |
|
|
|
|
|
Note Regarding Operating
Income
Operating income, a non-GAAP
financial measure, is equal to net income excluding after-tax net
realized investment gains (losses). Operating income is not a
substitute for net income determined in accordance with GAAP, and
investors should not place undue reliance on this measure.
Contact:
Media
Stephen W. Ries
Senior Corporate Counsel
(610) 668-3270
sries@global-indemnity.com
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Global Indemnity Limited via Globenewswire
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