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Global Indemnity Group, LLC Reports Second Quarter 2022 Results

  • Farm, Ranch and Stable renewal rights sold for $30.0 million to Everett Cash Mutual to reinsure 100% of the business effective August 8, 2022. Everett Cash Mutual will also purchase American Reliable for book value which is expected to be $10 million at the time of close, which, subject to regulatory approvals and customary closing conditions, is expected to close in or before the first quarter of 2023. Farm, Ranch and Stable is now included in Exited Lines.
  • Growth in Gross Written Premium - An increase of 26.1% and 28.4% in gross written premiums for Continuing Lines for the three and six months ended June 30, 2022, respectively, compared to the corresponding periods in 2021.
  • The combined ratio for Continuing Lines was 95.4% for the six months ended June 30, 2022 (Loss Ratio 58.4% and Expense Ratio 37.0%).
  • Lower Catastrophes – Catastrophe losses for Continuing Lines were $5.4 million in 2022 compared to $11.6 million in 2021.
  • Investment income for the three and six months ended June 30, 2022, was $1.9 million and $8.5 million, respectively, compared to $10.6 million and $20.5 million for the three and six months ended June 30, 2021. One alternative investment negatively impacted investment income $6.0 million and $7.2 million for the three months and six months ended 2022, respectively, compared to the corresponding periods in 2021. This investment was exited early in the third quarter of 2022.
  • On April 15, 2022, the Company prepaid its remaining $130 million of outstanding debt, resulting in a $3.5 million write off of deferred debt costs.
  • Global Indemnity continued to reduce the duration of its fixed income portfolio in response to rising interest rates. The Company has sold approximately $360 million of fixed income securities with maturities of 5 years and greater that had an average yield of 2.3%. These securities were redeployed into corporate and securitized investments. Duration at June 30, 2022 was to 1.7 years compared to duration of 3.0 at December 31, 2021 and book yield on the portfolio increased from 2.2% at December 31, 2021 to 2.7% at June 30, 2022. In reducing duration and increasing yield, GBLI realized losses of $9.9 million for the second quarter of 2022 and realized losses of $35.3 million for the six months ended June 30, 2022.
  • Primarily as a result of substantially shortening the duration of the Company’s fixed income securities in its investment portfolio, the impact of an alternative investment, and the write off related to debt redemption, the Company generated a net loss to shareholders of $12.3 million, or $0.84 per share, for the three months ended June 30, 2022, compared to net income available to shareholders of $6.3 million, or $0.43 per share, for the corresponding period in 2021. Net loss for the six months ended June 30, 2022, was $27.2 million, or $1.87 per share, compared to net income available to shareholders of $11.7 million, or $0.80 per share, for the corresponding period in 2021.
  • Book value decreased $65.3 million from $706.6 million at December 31, 2021 to $641.3 million at June 30, 2022. Book value per share decreased $4.76 from $48.44 at December 31, 2021 to $43.68 at June 30, 2022.

Global Indemnity Group, LLC (NYSE:GBLI) (the “Company”) today reported adjusted operating income, which excludes realized gains and losses, the results of Exited Lines and the loss on the extinguishment of debt, of $7.3 million for the six months ended June 30, 2022, compared to $11.4 million for the corresponding period in 2021. Adjusted operating income, was $1.8 million for the three months ended June 30, 2022, compared to $8.7 million for the corresponding period in 2021. Net loss available to shareholders for the six months ended June 30, 2022, was $27.2 million compared to net income available to shareholders of $11.7 million for the corresponding period in 2021. Net loss available to shareholders for the three months ended June 30, 2022 was $12.3 million, compared to net income available to shareholders of $6.3 million for the corresponding period in 2021.

Selected Operating and Balance Sheet

(Dollars in millions, except per share data)

 

For the Three Months

Ended June 30,

 

For the Six Months

Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

Gross Written Premiums

$

196.8

 

 

$

175.2

 

 

$

387.8

 

 

$

338.8

 

Net Written Premiums

$

167.2

 

 

$

160.7

 

 

$

326.6

 

 

$

308.3

 

Net Earned Premiums

$

155.7

 

 

$

149.4

 

 

$

304.6

 

 

$

293.1

 

 

 

 

 

 

 

 

 

Net income (loss) available to shareholders

$

(12.3

)

 

$

6.3

 

 

$

(27.2

)

 

$

11.7

 

Net income (loss) from Continuing Lines

$

(9.7

)

 

$

13.7

 

 

$

(24.8

)

 

$

20.8

 

Net loss from Exited Lines (1)

$

(2.6

)

 

$

(7.4

)

 

$

(2.4

)

 

$

(9.1

)

Net income (loss) available to shareholders per share

$

(0.84

)

 

$

0.43

 

 

$

(1.87

)

 

$

0.80

 

 

 

 

 

 

 

 

 

Adjusted operating income

$

1.8

 

 

$

8.7

 

 

$

7.3

 

 

$

11.4

 

Adjusted operating income per share

$

0.12

 

 

$

0.58

 

 

$

0.48

 

 

$

0.76

 

 

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

 

Loss ratio

 

59.5

%

 

 

60.9

%

 

 

58.2

%

 

 

62.0

%

Expense ratio

 

39.2

%

 

 

38.3

%

 

 

38.7

%

 

 

38.2

%

Combined ratio

 

98.7

%

 

 

99.2

%

 

 

96.9

%

 

 

100.2

%

(1)

Underwriting income (loss) from Exited Lines, net of tax.

 

As of

June 30,

2022

 

As of

March 31,

2022

 

As of

December 31,

2021

 

 

 

 

 

 

Book value per share (1)

$

43.68

 

$

45.78

 

$

48.44

Shareholders’ equity (2)

$

641.3

 

 

$

669.7

 

 

$

706.6

 

Cash and invested assets (3)

$

1,326.5

 

 

$

1,464.6

 

 

$

1,532.0

 

(1)

Net of cumulative Company distributions/dividends to common shareholders totaling $4.50 per share, $4.25 per share and $4.00 per share as of June 30, 2022, March 31, 2022 and December 31, 2021, respectively.

(2)

Shareholders’ equity includes $4 million of series A cumulative fixed rate preferred shares.

(3)

Including receivable/(payable) for securities sold/(purchased). 

Global Indemnity Group, LLC’s Business Segment Information for the Three and Six Months Ended June 30, 2022 and 2021

 

 

For the Three Months Ended June 30, 2022



(Dollars in thousands)

 

Continuing

Lines

 

Exited

Lines

 

Total

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

Gross written premiums

$

156,191

 

$

40,632

 

$

196,823

 

Net written premiums

$

147,565

 

$

19,593

 

$

167,158

 

 

 

 

 

 

 

 

Net earned premiums

$

133,768

 

$

21,981

 

$

155,749

 

Other income (loss)

 

199

 

 

(25

)

 

174

 

Total revenues

 

133,967

 

 

21,956

 

 

155,923

 

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

78,523

 

 

14,095

 

 

92,618

 

Acquisition costs and other underwriting expenses

 

50,591

 

 

10,507

 

 

61,098

 

Income (loss) from segments

$

4,853

 

$

(2,646

)

$

2,207

 

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

Loss ratio

 

58.7

%

 

64.1

%

 

59.5

%

Expense ratio

 

37.8

%

 

47.8

%

 

39.2

%

Combined ratio

 

96.5

%

 

111.9

%

 

98.7

%

 

 

For the Three Months Ended June 30, 2021



(Dollars in thousands)

 

Continuing

Lines

 

Exited

Lines

 

Total

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

Gross written premiums

$

123,893

 

$

51,343

 

$

175,236

 

Net written premiums

$

116,134

 

$

44,519

 

$

160,653

 

 

 

 

 

 

 

 

Net earned premiums

$

100,026

 

$

49,382

 

$

149,408

 

Other income

 

222

 

 

290

 

 

512

 

Total revenues

 

100,248

 

 

49,672

 

 

149,920

 

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

54,269

 

 

36,669

 

 

90,938

 

Acquisition costs and other underwriting expenses

 

36,775

 

 

20,438

 

 

57,213

 

Income (loss) from segments

$

9,204

 

$

(7,435

)

$

1,769

 

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

Loss ratio

 

54.3

%

 

74.2

%

 

60.9

%

Expense ratio

 

36.8

%

 

41.4

%

 

38.3

%

Combined ratio

 

91.1

%

 

115.6

%

 

99.2 

%

 

 

For the Six Months Ended June 30, 2022



(Dollars in thousands)

 

Continuing

Lines

 

Exited

Lines

 

Total

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

Gross written premiums

$

301,902

 

$

85,904

 

$

387,806

 

Net written premiums

$

287,323

 

$

39,317

 

$

326,640

 

 

 

 

 

 

 

 

Net earned premiums

$

260,494

 

$

44,078

 

$

304,572

 

Other income

 

438

 

 

175

 

 

613

 

Total revenues

 

260,932

 

 

44,253

 

 

305,185

 

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

152,033

 

 

25,280

 

 

177,313

 

Acquisition costs and other underwriting expenses

 

96,457

 

 

21,333

 

 

117,790

 

Income (loss) from segments

$

12,442

 

$

(2,360

)

$

10,082

 

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

Loss ratio

 

58.4

%

 

57.4

%

 

58.2

%

Expense ratio

 

37.0

%

 

48.4

%

 

38.7

%

Combined ratio

 

95.4

%

 

105.8

%

 

96.9

%

 

 

For the Six Months Ended June 30, 2021



(Dollars in thousands)

 

Continuing

Lines

 

Exited

Lines

 

Total

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

Gross written premiums

$

235,178

 

$

103,616

 

$

338,794

 

Net written premiums

$

220,257

 

$

88,079

 

$

308,336

 

 

 

 

 

 

 

 

Net earned premiums

$

195,516

 

$

97,592

 

$

293,108

 

Other income

 

410

 

 

510

 

 

920

 

Total revenues

 

195,926

 

 

98,102

 

 

294,028

 

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

114,934

 

 

66,787

 

 

181,721

 

Acquisition costs and other underwriting expenses

 

71,606

 

 

40,371

 

 

111,977

 

Income (loss) from segments

$

9,386

 

$

(9,056

)

$

330

 

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

Loss ratio

 

58.8

%

 

68.4

%

 

62.0

%

Expense ratio

 

36.6

%

 

41.4

%

 

38.2

%

Combined ratio

 

95.4

%

 

109.8

%

 

100.2

%

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. Global Indemnity Group, LLC’s Continuing Lines segments are Commercial Specialty and Reinsurance Operations. The Exited Lines segment is comprised of business which the Company has decided it will no longer write.

Forward-Looking Information

The forward-looking statements contained in this press release1 do not address a number of risks and uncertainties including COVID-19. 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.

Selected Financial Data for the Three Months Ended June 30, 2022:

  • Gross written premiums, net written premiums, and net earned premiums excluding the Exited Lines (“Continuing Lines”), increased 26.1%, 27.1% and 33.7%, respectively. Consolidated gross written premiums, net written premiums, and net earned premiums increased 12.3%, 4.0%, and 4.2%, respectively.
  • Underwriting income/(loss) – For the Continuing Lines business, underwriting income was $4.9 million in 2022 compared to $9.2 million in 2021.
    • Excluding prior year development, underwriting income (loss) from Continuing Lines was $3.9 million compared to $8.7 million in 2021.
    • Consolidated underwriting income / (loss) was $2.2 million in 2022 compared to $1.8 million in 2021.
  • Investment income – $1.9 million in 2022 compared to $10.6 million in 2021. The decrease was primarily due to decreased returns from alternative investments and a decrease in dividend income as a result of the liquidation of the Company’s common stock portfolio during the first quarter of 2022.
  • Realized gains/(losses) – ($9.9) million in 2022 compared to $3.8 million in 2021. Realized losses in 2022 were primarily due to the Company selling certain securities to offset anticipated rising interest rates by shortening duration and accelerating future maturities.
  • Book value per share – Decrease of $2.10 per share mainly due to rising interest rates. In addition to realized losses, shareholders’ equity includes $13.9 million of net after-tax unrealized losses.
  • Tax expense/(benefit) – ($0.6) million tax benefit in 2022 compared to $0.8 million tax expense in 2021.

Selected Financial Data for the Six Months Ended June 30, 2022:

  • Gross written premiums, net written premiums, and net earned premiums excluding the Exited Lines (“Continuing Lines”), increased 28.4%, 30.4% and 33.2%, respectively. Consolidated gross written premiums, net written premiums, and net earned premiums increased 14.5%, 5.9%, and 3.9%, respectively.
  • Underwriting income/(loss) – For the Continuing Lines business, underwriting income (loss) was $12.4 million in 2022 compared to $9.4 million in 2021.
    • Excluding prior year development, underwriting income (loss) from Continuing Lines was $11.8 million compared to $6.2 million in 2021.
    • Consolidated underwriting income was $10.1 million in 2022 compared to $0.3 million in 2021.
  • Investment income – $8.5 million in 2022 compared to $20.5 million in 2021. The decrease was primarily due to decreased returns from alternative investments and a decrease in dividend income as a result of the liquidation of the Company’s common stock portfolio during the first quarter of 2022.
  • Realized gains/(losses) – ($35.3) million in 2022 compared to $7.7 million in 2021. Realized losses in 2022 were primarily due to the Company selling certain securities to offset anticipated rising interest rates by shortening duration and accelerating future maturities.
  • Book value per share – Decrease of $4.76 per share mainly due to rising interest rates. In addition to realized losses, shareholders’ equity includes $33.0 million of net after-tax unrealized losses.
  • Tax expense/(benefit)– ($4.0) million tax benefit in 2022 compared to $0.6 million tax expense in 2021.

Global Indemnity Group, LLC’s Gross Written and Net Written Premiums Results by Segment for the Three and Six Months Ended June 30, 2022 and 2021

Three Months Ended June 30,

 

Gross Written Premiums

 

Net Written Premiums

 

2022

 

2021

 

%

Change

 

2022

 

2021

 

%

Change

Commercial Specialty

$

109,797

 

 

$

99,406

 

 

10.5

%

 

$

101,171

 

 

$

91,647

 

 

10.4

%

Reinsurance Operations

 

46,394

 

 

 

24,487

 

 

89.5

%

 

 

46,394

 

 

 

24,487

 

 

89.5

%

Continuing Lines

 

156,191

 

 

 

123,893

 

 

26.1

%

 

 

147,565

 

 

 

116,134

 

 

27.1

%

Exited Lines

 

40,632

 

 

 

51,343

 

 

(20.9

%)

 

 

19,593

 

 

 

44,519

 

 

(56.0

%)

Total

$

196,823

 

 

$

175,236

 

 

12.3

%

 

$

167,158

 

 

$

160,653

 

 

4.0

%

Six Months Ended June 30,

 

Gross Written Premiums

 

Net Written Premiums

 

2022

 

2021

 

%

Change

 

2022

 

2021

 

%

Change

Commercial Specialty

$

214,063

 

 

$

188,740

 

 

13.4

%

 

$

199,484

 

 

$

173,819

 

 

14.8

%

Reinsurance Operations

 

87,839

 

 

 

46,438

 

 

89.2

%

 

 

87,839

 

 

 

46,438

 

 

89.2

%

Continuing Lines

 

301,902

 

 

 

235,178

 

 

28.4

%

 

 

287,323

 

 

 

220,257

 

 

30.4

%

Exited Lines

 

85,904

 

 

 

103,616

 

 

(17.1

%)

 

 

39,317

 

 

 

88,079

 

 

(55.4

%)

Total

$

387,806

 

 

$

338,794

 

 

14.5

%

 

$

326,640

 

 

$

308,336

 

 

5.9

%

Commercial Specialty: Gross written premiums and net written premiums increased 10.5% and 10.4%, respectively, for the three months ended June 30, 2022 as compared to the same period in 2021. Gross written premiums and net written premiums increased 13.4% and 14.8%, respectively, for the six months ended June 30, 2022 as compared to the same period in 2021. The growth in gross written premiums and net written premiums was primarily driven by organic growth in existing programs, increased pricing, and several new programs.

Reinsurance Operations: Gross written premiums and net written premiums both increased 89.5% for the three months ended June 30, 2022 as compared to the same period in 2021. Gross written premiums and net written premiums both increased 89.2% for the six months ended June 30, 2022 as compared to the same period in 2021. The growth in gross written premiums and net written premiums was primarily due to organic growth of existing casualty treaties.

Exited Lines: Gross written premiums and net written premiums decreased 20.9% and 56.0%, respectively, for the three months ended June 30, 2022 as compared to the same period in 2021. Gross written premiums and net written premiums decreased 17.1% and 55.4%, respectively, for the six months ended June 30, 2022 as compared to the same period in 2021. The decrease in gross written premiums and net written premiums was primarily due to exiting lines of business unrelated to the Company’s continuing businesses.

Global Indemnity Group, LLC’s Combined Ratio for the Three and Six Months Ended June 30, 2022 and 2021

For the Continuing Lines business, the combined ratio was 96.5% for the three months ended June 30, 2022, (Loss Ratio 58.7% and Expense Ratio 37.8%) as compared to 91.1% (Loss Ratio 54.3% and Expense Ratio 36.8%) for the three months ended June 30, 2021. The consolidated combined ratio was 98.7% for the three months ended June 30, 2022, (Loss Ratio 59.5% and Expense Ratio 39.2%) as compared to 99.2% (Loss Ratio 60.9% and Expense Ratio 38.3%) for the three months ended June 30, 2021.

  • For the continuing lines business, the accident year casualty loss ratio increased by 0.6 points to 60.0% in 2022 from 59.4% in 2021. The consolidated accident year casualty loss ratio increased by 0.2 points to 59.1% in 2022 from 58.9% in 2021. This increase in the continuing lines and the consolidated accident year casualty loss ratio is primarily due to a change in the mix of business.
  • For the continuing lines business, the accident year property loss ratio increased by 11.6 points to 57.9% in 2022 from 46.3% in 2021. The consolidated accident year property loss ratio increased by 11.2 points to 66.8% in 2022 from 55.6% in 2021. The increase in the continuing lines and the consolidated accident year property loss ratio is primarily due to higher non-catastrophe claims severity.

For the Continuing Lines business, the combined ratio was 95.4% for the six months ended June 30, 2022, (Loss Ratio 58.4% and Expense Ratio 37.0%) as compared to 95.4% (Loss Ratio 58.8% and Expense Ratio 36.6%) for the six months ended June 30, 2021. The consolidated combined ratio was 96.9% for the six months ended June 30, 2022, (Loss Ratio 58.2% and Expense Ratio 38.7%) as compared to 100.2% (Loss Ratio 62.0% and Expense Ratio 38.2%) for the six months ended June 30, 2021.

  • For the continuing lines business, the accident year casualty loss ratio increased by 0.5 points to 59.3% in 2022 from 58.8% in 2021. The consolidated accident year casualty loss ratio increased by 0.5 points to 58.8% in 2022 from 58.3% in 2021. This increase in the continuing lines and the consolidated accident year casualty loss ratio is primarily due to a change in the mix of business.
  • For the continuing lines business, the accident year property loss ratio improved by 6.2 points to 56.9% in 2022 from 63.1% in 2021. The consolidated accident year property loss ratio improved by 0.6 points to 63.3% in 2022 from 63.9% in 2021. The improvement in the continuing lines and the consolidated accident year property loss ratio is primarily due to lower catastrophe claims frequency.

GLOBAL INDEMNITY GROUP, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

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

 

 

For the Three Months

Ended June 30,

 

For the Six Months

Ended June 30,

 

2022

 

2021

 

2022

 

2021

Gross written premiums

$

196,823

 

 

$

175,236

 

 

$

387,806

 

 

$

338,794

 

Ceded written premiums

 

(29,665

)

 

 

(14,583

)

 

 

(61,166

)

 

 

(30,458

)

Net written premiums

$

167,158

 

 

$

160,653

 

 

$

326,640

 

 

$

308,336

 

 

 

 

 

 

 

 

 

Net earned premiums

$

155,749

 

 

$

149,408

 

 

$

304,572

 

 

$

293,108

 

Net investment income

 

1,930

 

 

 

10,633

 

 

 

8,522

 

 

 

20,469

 

Net realized investment gains (losses)

 

(9,916

)

 

 

3,833

 

 

 

(35,301

)

 

 

7,652

 

Other income

 

97

 

 

 

521

 

 

 

523

 

 

 

898

 

Total revenues

 

147,860

 

 

 

164,395

 

 

 

278,316

 

 

 

322,127

 

 

 

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

92,618

 

 

 

90,938

 

 

 

177,313

 

 

 

181,721

 

Acquisition costs and other underwriting expenses

 

61,098

 

 

 

57,213

 

 

 

117,790

 

 

 

111,977

 

Corporate and other operating expenses

 

2,993

 

 

 

6,329

 

 

 

7,653

 

 

 

10,605

 

Interest expense

 

410

 

 

��

2,696

 

 

 

3,005

 

 

 

5,291

 

Loss on extinguishment of debt

 

3,529

 

 

 

-

 

 

 

3,529

 

 

 

-

 

Income (loss) before income taxes

 

(12,788

)

 

 

7,219

 

 

 

(30,974

)

 

 

12,533

 

Income tax expense (benefit)

 

(626

)

 

 

844

 

 

 

(4,039

)

 

 

641

 

Net income (loss)

 

(12,162

)

 

 

6,375

 

 

 

(26,935

)

 

 

11,892

 

 

 

 

 

 

 

 

 

Less: Preferred stock distributions

 

110

 

 

 

110

 

 

 

220

 

 

 

220

 

 

 

 

 

 

 

 

 

Net income (loss) available to common shareholders

$

(12,272

)

 

$

6,265

 

 

$

(27,155

)

 

$

11,672

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

Net income (loss) available to common shareholders

 

 

 

 

 

 

 

Basic

$

(0.84

)

 

$

0.43

 

 

$

(1.87

)

 

$

0.81

 

Diluted (1)

$

(0.84

)

 

$

0.43

 

 

$

(1.87

)

 

$

0.80

 

Weighted-average number of shares outstanding

 

 

 

 

 

 

 

Basic

 

14,543

 

 

 

14,412

 

 

 

14,529

 

 

 

14,397

 

Diluted (1)

 

14,543

 

 

 

14,682

 

 

 

14,529

 

 

 

14,651

 

 

 

 

 

 

 

 

 

Cash distributions declared per common share

$

0.25

 

 

$

0.25

 

 

$

0.50

 

 

$

0.50

 

 

 

 

 

 

 

 

 

Combined ratio analysis: (2)

 

 

 

 

 

 

 

Loss ratio

 

59.5

%

 

 

60.9

%

 

 

58.2

%

 

 

62.0

%

Expense ratio

 

39.2

%

 

 

38.3

%

 

 

38.7

%

 

 

38.2

%

Combined ratio

 

98.7

%

 

 

99.2

%

 

 

96.9

%

 

 

100.2

%

(1)

For the three and six months ended June 30, 2022, “weighted-average shares outstanding – basic” was used to calculate “diluted earnings per share” due to a net loss for each 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 earned premiums.  The expense ratio is the ratio of acquisition costs and other underwriting expenses to net earned premiums.  The combined ratio is the sum of the loss and expense ratios.

GLOBAL INDEMNITY GROUP, LLC

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

ASSETS

(Unaudited)

June 30, 2022

 

December 31, 2021

Fixed Maturities:

 

 

 

Available for sale, at fair value (amortized cost: 2022 - $1,151,195 and 2021 - $1,193,746; net of allowance for expected credit losses of: $0 in 2022 and 2021)

$

1,118,129

 

 

$

1,201,866

 

Equity securities, at fair value

 

17,870

 

 

 

99,978

 

Other invested assets

 

140,197

 

 

 

152,651

 

Total investments

 

1,276,196

 

 

 

1,454,495

 

 

 

 

 

Cash and cash equivalents

 

59,842

 

 

 

78,278

 

Premium receivables, net of allowance for expected credit losses of $2,919 at June 30, 2022 and $2,996 at December 31, 2021

 

161,959

 

 

 

128,444

 

Reinsurance receivables, net of allowance for expected credit losses of $8,992 at June 30, 2022 and December 31, 2021

 

104,064

 

 

 

99,864

 

Funds held by ceding insurers

 

23,906

 

 

 

27,958

 

Deferred federal income taxes

 

49,671

 

 

 

37,329

 

Deferred acquisition costs

 

70,089

 

 

 

60,331

 

Intangible assets

 

20,068

 

 

 

20,261

 

Goodwill

 

5,398

 

 

 

5,398

 

Prepaid reinsurance premiums

 

51,538

 

 

 

53,494

 

Lease right of use assets

 

15,040

 

 

 

16,051

 

Other assets

 

24,008

 

 

 

30,906

 

Total assets

$

1,861,779

 

 

$

2,012,809

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Liabilities:

 

 

 

Unpaid losses and loss adjustment expenses

$

804,661

 

 

$

759,904

 

Unearned premiums

 

336,677

 

 

 

316,566

 

Ceded balances payable

 

14,755

 

 

 

35,340

 

Payable for securities purchased

 

9,564

 

 

 

794

 

Contingent commissions

 

6,328

 

 

 

7,903

 

Debt

 

-

 

 

 

126,430

 

Lease liabilities

 

17,912

 

 

 

19,079

 

Other liabilities

 

30,602

 

 

 

40,172

 

Total liabilities

 

1,220,499

 

 

 

1,306,188

 

 

 

 

 

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 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: 10,675,757 and 10,574,589, respectively; class A common shares outstanding: 10,642,307 and 10,557,093, respectively; class B common shares issued and outstanding: 3,947,206 and 3,947,206, respectively

 

-

 

 

 

-

 

Additional paid-in capital (1)

 

450,052

 

 

 

447,406

 

Accumulated other comprehensive income, net of taxes

 

(26,625

)

 

 

6,404

 

Retained earnings (1)

 

214,757

 

 

 

249,301

 

Class A common shares in treasury, at cost: 33,450 and 17,496 shares, respectively

 

(904

)

 

 

(490

)

Total shareholders’ equity

 

641,280

 

 

 

706,621

 

 

 

 

 

Total liabilities and shareholders’ equity

$

1,861,779

 

 

$

2,012,809

 

(1)

Since the Company’s initial public offering in 2003, the Company has returned $554 million to shareholders, including $488 million in share repurchases and $66 million in dividends/distributions.

GLOBAL INDEMNITY GROUP, LLC

SELECTED INVESTMENT DATA

(Dollars in millions)

 

 

Market Value as of

 

 

(Unaudited)

June 30, 2022

 

 

December 31, 2021

 

 

 

 

 

Fixed maturities

 

$

1,118.1

 

 

$

1,201.9

 

Cash and cash equivalents

 

 

59.8

 

 

 

78.3

 

Total bonds and cash and cash equivalents

 

 

1,177.9

 

 

 

1,280.2

 

Equities and other invested assets

 

 

158.1

 

 

 

252.6

 

Total cash and invested assets, gross

 

 

1,336.0

 

 

 

1,532.8

 

Payable for securities purchased

 

 

(9.5

)

 

 

(0.8

)

Total cash and invested assets, net

 

$

1,326.5

 

 

$

1,532.0

 

 

 

Total Investment Return (1)

 

 

 

For the Three Months

Ended June 30,

(unaudited)

 

For the Six Months

Ended June 30,

(unaudited)

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

Net investment income

 

$

1.9

 

 

$

10.6

 

 

$

8.5

 

 

$

20.4

 

 

 

 

 

 

 

 

 

 

Net realized investment gains (losses)

 

 

(9.9

)

 

 

3.8

 

 

 

(35.3

)

 

 

7.7

 

Net unrealized investment gains (losses)

 

 

(17.5

)

 

 

11.3

 

 

 

(41.3

)

 

 

(18.9

)

Net realized and unrealized investment return

 

 

(27.4

)

 

 

15.1

 

 

 

(76.6

)

 

 

(11.2

)

 

 

 

 

 

 

 

 

 

Total investment return

 

$

(25.5

)

 

$

25.7

 

 

$

(68.1

)

 

$

9.2

 

 

 

 

 

 

 

 

 

 

Average total cash and invested assets

 

$

1,395.5

 

 

$

1,452.8

 

 

$

1,429.2

 

 

$

1,463.0

 

 

 

 

 

 

 

 

 

 

Total investment return %

 

 

(1.8

%)

 

 

1.8

%

 

 

(4.8

%)

 

 

0.6

%

(1)

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

GLOBAL INDEMNITY GROUP, LLC

SUMMARY OF ADJUSTED OPERATING INCOME

(Unaudited)

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

 

 

For the Three Months

Ended June 30,

 

For the Six Months

Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

 

 

 

 

 

 

 

Adjusted operating income, net of tax

 

$

1,827

 

 

$

8,686

 

 

$

7,257

 

 

$

11,419

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

Underwriting loss from Exited Lines, net of tax

 

 

(2,090

)

 

 

(5,874

)

 

 

(1,864

)

 

 

(7,154

)

Adjusted operating income (loss) including Exited Lines, net of tax (1)

 

 

(263

)

 

 

2,812

 

 

 

5,393

 

 

 

4,265

 

 

 

 

 

 

 

 

 

 

Net realized investment gains (losses)

 

 

(8,370

)

 

 

3,563

 

 

 

(28,799

)

 

 

7,627

 

Loss on extinguishment of debt

 

 

(3,529

)

 

 

-

 

 

 

(3,529

)

 

 

-

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(12,162

)

 

$

6,375

 

 

$

(26,935

)

 

$

11,892

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – basic

 

 

14,543

 

 

 

14,412

 

 

 

14,529

 

 

 

14,397

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – diluted

 

 

14,749

 

 

 

14,682

 

 

 

14,728

 

 

 

14,651

 

 

 

 

 

 

 

 

 

 

Adjusted operating income per share – basic (2)

 

$

0.12

 

 

$

0.60

 

 

$

0.48

 

 

$

0.78

 

 

 

 

 

 

 

 

 

 

Adjusted operating income per share – diluted (2)

 

$

0.12

 

 

$

0.58

 

 

$

0.48

 

 

$

0.76

 

(1)

Adjusted operating income (loss) including Exited Lines, net of tax, excludes preferred shareholder distributions of $0.11 million for both the three months ended June 30, 2022 and 2021 and $0.22 million for both the six months ended June 30, 2022 and 2021.

(2)

The adjusted operating income (loss) per share calculation is net of preferred shareholder distributions of $0.11 million for both the three months ended June 30, 2022 and 2021 and $0.22 million for both the six months ended June 30, 2022 and 2021.

Note Regarding Adjusted Operating Income

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

Contacts

Media

Stephen W. Ries

Head of Investor Relations

(610) 668-3270

sries@gbli.com

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