Global Indemnity Limited Reports First Quarter 2019 Financial Results

Global Indemnity Limited (NASDAQ:GBLI) today reported net income for the three months ended March 31, 2019 of $19.6 million or $1.37 per share, an increase of $13.9 million or 244%, compared to the same period in 2018. Gross Premiums Written increased by 14.5% to $142.2 million for the three months ended March 31, 2019, from $124.2 million for the same period in 2018. The combined ratio was 88.5%, a 5.1 point improvement over the same period in 2018. Book value per share increased by 6.0% (net of Company dividends of $0.25 per share to shareholders) during the quarter, from $44.21 per share at December 31, 2018 to $46.86 per share at March 31, 2019.


Selected Operating and Balance Sheet Information
(Dollars in millions, except per share data)

	For the Three MonthsEnded March 31,							As ofMarch 31,		As ofDecember 31,
	2019			2018				2019		2018

Gross Premiums Written	$	142.2		$	124.2		Book value per share	$	46.86	$	44.21
Net Premiums Written	$	123.4		$	107.9		Shareholders’ equity	$	667.7	$	629.1
							Cash and invested assets (1)	$	1,518.4	$	1,510.2
Net income	$	19.6		$	5.7
Net income per share	$	1.37		$	0.40		(1) Including receivable/(payable) for securities sold/(purchased)

Combined ratio analysis:
Loss ratio		47.8	%		51.9	%
Expense ratio		40.7	%		41.7	%
Combined ratio		88.5	%		93.6	%

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 Three Months Ended March 31, 2019 and 2018

For the three months ended March 31, 2019, the Company recorded a combined ratio of 88.5% compared to 93.6% for the three months ended March 31, 2018. The results for the three months ended March 31, 2019 include $7.9 million in favorable development of prior year loss reserves, compared to $5.9 million in favorable development of prior year loss reserves for the three months ended March 31, 2018.


Global Indemnity Limited’s Gross and Net Premiums Written Results by Segment for the Three Months Ended March 31, 2019 and 2018

	Three Months Ended March 31,
	Gross Premiums Written						Net Premiums Written
	2019		2018		%Change		2019		2018		%Change
Commercial Specialty	$	64,213	$	53,773	19.4	%	$	55,170	$	48,306	14.2	%
Specialty Property		39,674		41,344	(4.0	%)		33,212		33,010	0.6	%
Farm, Ranch, & Stable		20,765		18,821	10.3	%		17,492		16,245	7.7	%
Reinsurance		17,549		10,309	70.2	%		17,542		10,309	70.2	%
Total	$	142,201	$	124,247	14.5	%	$	123,416	$	107,870	14.4	%

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,
	2019			2018

Gross premiums written	$	142,201		$	124,247

Net premiums written	$	123,416		$	107,870

Net premiums earned	$	122,089		$	108,002
Net investment income		7,219			11,404
Net realized investment gains (losses)		10,390			(316	)
Other income		488			554
Total revenues		140,186			119,644

Net losses and loss adjustment expenses		58,321			56,072
Acquisition costs and other underwriting expenses		49,743			45,003
Corporate and other operating expenses		3,205			9,260
Interest expense		5,023			4,861
Income before income taxes		23,894			4,448
Income tax expense (benefit)		4,294			(1,253	)
Net income	$	19,600		$	5,701

Weighted average shares outstanding–basic		14,154			14,055

Weighted average shares outstanding–diluted		14,315			14,286

Net income per share – basic	$	1.38		$	0.41

Net income per share – diluted	$	1.37		$	0.40

Cash dividends declared per share	$	0.25		$	0.25

Combined ratio analysis: (1)
Loss ratio		47.8	%		51.9	%
Expense ratio		40.7	%		41.7	%
Combined ratio		88.5	%		93.6	%

(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, 2019			December 31, 2018
Fixed Maturities:
Available for sale securities, at fair value(amortized cost: 2019 - $1,291,128 and 2018 - $1,257,830)	$	1,294,555		$	1,235,155
Equity securities, at fair value		142,534			124,747
Other invested assets		48,705			50,753
Total investments		1,485,794			1,410,655

Cash and cash equivalents		37,874			99,497
Premiums receivable, net		92,477			87,679
Reinsurance receivables, net		102,346			114,418
Funds held by ceding insurers		44,902			49,206
Federal income taxes receivable		11,069			10,866
Receivable for securities sold		-			15
Deferred federal income taxes		40,943			48,589
Deferred acquisition costs		62,854			61,676
Intangible assets		21,888			22,020
Goodwill		6,521			6,521
Prepaid reinsurance premiums		19,041			20,594
Other assets		59,199			28,530
Total assets	$	1,984,908		$	1,960,266

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Unpaid losses and loss adjustment expenses	$	645,959		$	680,031
Unearned premiums		281,684			281,912
Ceded balances payable		14,573			14,994
Payables for securities purchased		5,252			-
Contingent commissions		7,170			10,636
Debt		294,581			288,565
Other liabilities		68,034			55,069
Total liabilities		1,317,253			1,331,207

Shareholders’ equity:
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued:10,223,976 and 10,171,954, respectively; A ordinary shares outstanding: 10,113,527 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)		438,783			438,182
Accumulated other comprehensive income (loss), net of taxes		1,669			(21,231	)
Retained earnings (1)		231,176			215,132
A ordinary shares in treasury, at cost: 110,449 and 76,642 shares, respectively		(3,975	)		(3,026	)
Total shareholders’ equity		667,655			629,059

Total liabilities and shareholders’ equity	$	1,984,908		$	1,960,266

(1) The Company historically repurchased and redeemed 20.2 million shares for a total of $488 million. These share repurchases and redemptions are reflected through a $488 million reduction of the Company’s additional paid-in capital and retained earnings as of March 31, 2019 and December 31, 2018. Retained earnings are also net of $18 million and $14 million of cumulative historic Company dividends to shareholders as of March 31, 2019 and December 31, 2018, respectively.


GLOBAL INDEMNITY LIMITED
SELECTED INVESTMENT DATA
(Dollars in millions)

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

Fixed maturities	$	1,294.6		$	1,235.2
Cash and cash equivalents		37.9			99.5
Total bonds and cash and cash equivalents		1,332.5			1,334.7
Equities and other invested assets		191.2			175.5
Total cash and invested assets, gross		1,523.7			1,510.2
Payable for securities purchased		(5.3	)		-
Total cash and invested assets, net	$	1,518.4		$	1,510.2


	Total Investment Return (1)For the Three Months Ended March 31, (unaudited)
	2019			2018

Net investment income	$	7.2		$	11.4

Net realized investment gains		10.4			(0.3	)
Net unrealized investment gains		26.3			(17.6	)
Net realized and unrealized investment gains		36.7			(17.9	)

Total net investment income and gains	$	43.9		$	(6.5	)

Average total cash and invested assets	$	1,514.3		$	1,538.7

Total quarterly investment return %		2.9	%		(0.4	%)

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