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 MonthsEnded
September 30, |
|
As ofSeptember
30, |
|
As ofDecember
31, |
|
|
2017 |
|
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
Gross
Premiums Written |
|
$ |
393.7 |
|
|
$ |
429.3 |
Book
value per share |
$ |
46.91 |
|
$ |
45.42 |
Net
Premiums Written |
|
$ |
344.3 |
|
|
$ |
357.2 |
Shareholders’ equity |
$ |
823.9 |
|
$ |
798.0 |
|
|
|
|
|
Cash and
investedassets (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
hurricanesHarvey, Irma and Maria |
|
|
(9.3 |
) |
|
|
- |
|
|
|
|
Combined
ratio excludinghurricanes Harvey, Irma andMaria |
|
|
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
LimitedConsolidated Statements of
Operations(Unaudited)(Dollars and shares in thousands,
except per share data) |
|
|
For the Three MonthsEnded
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
LIMITEDCONSOLIDATED 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
LIMITEDSELECTED 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
EndedSeptember 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
LIMITEDSUMMARY OF OPERATING INCOME
(LOSS)(Unaudited) (Dollars and shares in thousands, except
per share data) |
|
|
For the Three MonthsEnded
September 30, |
|
|
For the Nine MonthsEnded
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:MediaStephen W.
RiesSenior Corporate Counsel(610)
668-3270sries@global-indemnity.com
Global Indemnity (NASDAQ:GBLI)
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