Global Indemnity Group, LLC Reports First Quarter 2022 Results

  • Growth in Gross Written Premium - An increase of 27.3% in gross written premiums in its Continuing Lines in the 1st quarter of 2022 compared to the corresponding period in 2021.
  • Strong Underwriting Results - The consolidated combined ratio was 95.0% for the 1st quarter of 2022 (Loss Ratio 56.9% and Expense Ratio 38.1%) as compared to 101.2% (Loss Ratio 63.1% and Expense Ratio 38.1%) for the first quarter of 2021.
  • Lower Catastrophes – Catastrophe losses of $4.3 million for the 1st quarter of 2022 compared to $16.9 million in the 1st quarter of 2021.
  • Adjusted operating income of $5.4 million compared to adjusted operating income of $2.3 million for the corresponding period in 2021.
  • Early January 2022, sold substantially all of the company’s $76 million common equity portfolio resulting in a gain of $10.9 million. The majority of this gain was recognized in 2021 due to mark-to-market accounting rules.
  • Early 2nd quarter of 2022, Global Indemnity further substantially reduced the duration of its fixed income portfolio to 1.8 years compared to duration at May 31, 2021 of 4.4 years, and duration at December 31, 2021 of 3 years.
  • Early 2nd quarter of 2022, approximately all $360 million of the company’s fixed income securities with maturities of 5 years and greater that had an average yield of 2.3% were sold. Approximately $195 million of the proceeds have been reinvested in corporate and securitized debt with an average duration of 1.3 years yielding 3.2%. Approximately $165 million of the remaining proceeds are temporarily invested in 2 year U.S. Treasuries yielding 2.5% - these funds will be redeployed to corporate and securitized investments. In reducing duration of its fixed income portfolio, GBLI realized losses of $25.4 million in the 1st quarter of 2022.
  • Primarily as a result of substantially shortening the duration of the company’s fixed income securities in its investment portfolio, the company generated a net loss to shareholders of $14.9 million, or $1.03 per share, for the 1st quarter of 2022 compared to net income available to shareholders of $5.4 million, or $0.37 per share, for the corresponding period in 2021. Book value decreased $36.9 million from $706.6 million at December 31, 2021 to $669.7 million at March 31, 2022. Book value per share decreased $2.66 from $48.44 at December 31, 2021 to $45.78 at March 31, 2022.
  • Also early in the 2nd quarter, the company prepaid its remaining $130 million of outstanding debt.

BALA CYNWYD, Pa.--()--Global Indemnity Group, LLC (NYSE:GBLI) (the “Company”) today reported a net loss to shareholders of $14.9 million for the three months ended March 31, 2022, compared to net income to shareholders of $5.4 million for the corresponding period in 2021. The company generated adjusted operating income of $5.4 million during the first quarter of 2022, which excludes realized losses and the results of Exited Lines, compared to adjusted operating income of $2.3 million for the corresponding period in 2021.

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

 

For the Three Months

Ended March 31,

 

2022

 

2021

 

 

 

 

Gross Written Premiums

$

191.0

 

 

$

163.6

 

Net Written Premiums

$

159.5

 

 

$

147.7

 

Net Earned Premiums

$

148.8

 

 

$

143.7

 

 

 

 

 

Net income (loss) available to shareholders

$

(14.9

)

 

$

5.4

 

Net income (loss) from Continuing Lines

$

(15.2

)

 

$

6.2

 

Net income (loss) from Exited Lines (1)

$

0.3

 

 

$

(0.8

)

Net income (loss) available to shareholders per share

$

(1.03

)

 

$

0.37

 

 

 

 

 

Adjusted operating income

$

5.4

 

 

$

2.3

 

Adjusted operating income per share

$

0.36

 

 

$

0.15

 

 

 

 

 

Combined ratio analysis:

 

 

 

Loss ratio

 

56.9

%

 

 

63.1

%

Expense ratio

 

38.1

%

 

 

38.1

%

Combined ratio

 

95.0

%

 

 

101.2

%

(1)

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

 

As of

March 31,

2022

 

As of

December 31,

2021

 

 

 

 

Book value per share (1)

$

45.78

 

$

48.44

Shareholders’ equity (2)

$

669.7

 

 

$

706.6

 

Cash and invested assets (3)

$

1,464.6

 

 

$

1,532.0

 

(1)

Net of cumulative Company distributions/dividends to common shareholders totaling $4.25 per share and $4.00 per share as of 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 Months Ended March 31, 2022 and 2021

 

 

For the Three Months Ended March 31, 2022

(Dollars in thousands)

 

Continuing

Lines

 

Exited

Lines

 

Total

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Gross written premiums

$

168,387

 

$

22,596

 

$

190,983

 

Net written premiums

$

158,770

 

$

712

 

$

159,482

 

 

 

 

 

 

 

 

 

 

 

Net earned premiums

$

144,369

 

$

4,454

 

$

148,823

 

Other income

 

277

 

 

162

 

 

439

 

Total revenues

 

144,646

 

 

4,616

 

 

149,262

 

 

 

 

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

84,468

 

 

227

 

 

84,695

 

Acquisition costs and other underwriting expenses

 

52,680

 

 

4,012

 

 

56,692

 

Income from segments

$

7,498

 

$

377

 

$

7,875

 

 

 

 

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

 

 

 

Loss ratio

 

58.5%

 

 

5.0%

 

 

56.9%

 

Expense ratio

 

36.5%

 

 

90.1%

 

 

38.1%

 

Combined ratio

 

95.0%

 

 

95.1%

 

 

95.0%

 

 

 

For the Three Months Ended March 31, 2021

(Dollars in thousands)

 

Continuing

Lines

 

Exited

Lines

 

Total

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

Gross written premiums

$

132,287

 

$

31,271

 

$

163,558

 

Net written premiums

$

121,726

 

$

25,957

 

$

147,683

 

 

 

 

 

 

 

 

Net earned premiums

$

113,631

 

$

30,069

 

$

143,700

 

Other income

 

222

 

 

186

 

 

408

 

Total revenues

 

113,853

 

 

30,255

 

 

144,108

 

 

 

 

 

 

 

 

Losses and Expenses:

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

72,466

 

 

18,317

 

 

90,783

 

Acquisition costs and other underwriting expenses

 

41,817

 

 

12,947

 

 

54,764

 

Loss from segments

$

(430

)

$

(1,009

)

$

(1,439

)

 

 

 

 

 

 

 

Combined ratio analysis:

 

 

 

 

 

 

Loss ratio

 

63.8%

 

 

61.0%

 

 

63.1%

Expense ratio

 

36.8%

 

 

43.1%

 

 

38.1%

Combined ratio

100.6%

 

 

104.1%

 

 

101.2%

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, Reinsurance Operations, and Farm, Ranch & Stable. 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 March 31, 2022:

  • Gross written premiums, net written premiums, and net earned premiums excluding the Exited Lines (“continuing lines”), increased 27.3%, 30.4% and 27.1%, respectively. Consolidated gross written premiums, net written premiums, and net earned premiums increased 16.8%, 8.0%, and 3.6%, respectively.
  • Underwriting income/(loss) – For the continuing lines business, underwriting income (loss) was $7.5 million in 2022 compared to ($0.4) million in 2021.
    • Excluding prior year development, underwriting income (loss) from continuing lines was $7.4 million compared to ($3.7) million in 2021.
    • Consolidated underwriting income / (loss) was $7.9 million in 2022 compared to ($1.4) million in 2021.
  • Investment income – $6.6 million in 2022 compared to $9.8 million in 2021. The decrease was primarily due to decreased returns from alternative investments.
  • Realized gains/(losses) – ($25.4) million in 2022 compared to $3.8 million in 2021. Realized losses in 2022 were primarily due to the Company’s intent to sell certain securities to offset anticipated rising interest rates by shortening duration and accelerating future maturities.
  • Book value per share – Decrease of $2.66 per share mainly due to rising interest rates. In addition to realized losses, shareholders’ equity includes $19.2 million of net after-tax unrealized losses.
  • Tax benefit – $3.4 million tax benefit in 2022 compared to $0.2 million tax benefit in 2021.

Global Indemnity Group, LLC’s Gross Written and Net Written Premiums Results by Segment for the Three Months Ended March 31, 2022 and 2021

 

Three Months Ended March 31,

 

Gross Written Premiums

 

Net Written Premiums

 

2022

 

 

2021

 

 

%

Change

 

2022

 

 

2021

 

 

%

Change

Commercial Specialty

$

104,266

 

 

$

89,334

 

 

16.7

%

 

$

98,313

 

 

$

82,172

 

 

19.6

%

Reinsurance Operations

 

41,445

 

 

 

21,951

 

 

88.8

%

 

 

41,445

 

 

 

21,951

 

 

88.8

%

Farm, Ranch & Stable

 

22,676

 

 

 

21,002

 

 

8.0

%

 

 

19,012

 

 

 

17,603

 

 

8.0

%

Continuing Lines

 

168,387

 

 

 

132,287

 

 

27.3

%

 

 

158,770

 

 

 

121,726

 

 

30.4

%

Exited Lines

 

22,596

 

 

 

31,271

 

 

(27.7

%)

 

 

712

 

 

 

25,957

 

 

(97.3

%)

Total

$

190,983

 

 

$

163,558

 

 

16.8

%

 

$

159,482

 

 

$

147,683

 

 

8.0

%

Commercial Specialty: Gross written premiums and net written premiums increased 16.7% and 19.6%, respectively, for the three months ended March 31, 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 of 26.9% in the Company’s Penn America binding business, increased pricing, and several new programs.

Reinsurance Operations: Gross written premiums and net written premiums both increased 88.8% for the three months ended March 31, 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.

Farm, Ranch & Stable: Gross written premiums and net written premiums both increased 8.0% for the three months ended March 31, 2022 as compared to the same period in 2021. The growth in gross written premiums and net written premiums is primarily due to growth of the mortality business and increased pricing.

Exited Lines: Gross written premiums and net written premiums decreased 27.7% and 97.3%, respectively, for the three months ended March 31, 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 Months Ended March 31, 2022 and 2021

For the continuing lines business, the combined ratio was 95.0% for the three months ended March 31, 2022, (Loss Ratio 58.5% and Expense Ratio 36.5%) as compared to 100.6% (Loss Ratio 63.8% and Expense Ratio 36.8%) for the three months ended March 31, 2021. The consolidated combined ratio was 95.0% for the three months ended March 31, 2022, (Loss Ratio 56.9% and Expense Ratio 38.1%) as compared to 101.2% (Loss Ratio 63.1% and Expense Ratio 38.1%) for the three months ended March 31, 2021.

  • For the continuing lines business, the accident year casualty loss ratio increased by 0.2 points to 58.1% in 2022 from 57.9% in 2021. The consolidated accident year casualty loss ratio increased by 0.6 points to 58.4% in 2022 from 57.8% in 2021 primarily due to a change in the mix of business.
  • For the continuing lines business, the accident year property loss ratio improved by 18.2 points to 59.5% in 2022 from 77.7% in 2021. The consolidated accident year property loss ratio improved by 11.9 points to 60.0% in 2022 from 71.9% 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 March 31,

 

 

2022

 

2021

Gross written premiums

 

$

190,983

 

 

$

163,558

 

 

 

 

 

 

Net written premiums

 

$

159,482

 

 

$

147,683

 

 

 

 

 

 

Net earned premiums

 

$

148,823

 

 

$

143,700

 

Net investment income

 

 

6,592

 

 

 

9,836

 

Net realized investment gains (losses)

 

 

(25,385

)

 

 

3,819

 

Other income

 

 

426

 

 

 

377

 

Total revenues

 

 

130,456

 

 

 

157,732

 

 

 

 

 

 

Net losses and loss adjustment expenses

 

 

84,695

 

 

 

90,783

 

Acquisition costs and other underwriting expenses

 

 

56,692

 

 

 

54,764

 

Corporate and other operating expenses

 

 

4,660

 

 

 

4,276

 

Interest expense

 

 

2,595

 

 

 

2,595

 

Income (loss) before income taxes

 

 

(18,186

)

 

 

5,314

 

Income benefit

 

 

(3,413

)

 

 

(203

)

Net income (loss)

 

 

(14,773

)

 

 

5,517

 

 

 

 

 

 

Less: Preferred stock distributions

 

 

110

 

 

 

110

 

 

 

 

 

 

Net income (loss) available to common shareholders

 

$

(14,883

)

 

$

5,407

 

 

 

 

 

 

Per share data:

 

 

 

 

Net income (loss) available to common shareholders

 

 

 

 

Basic

 

$

(1.03

)

 

$

0.38

 

Diluted (1)

 

$

(1.03

)

 

$

0.37

 

Weighted-average number of shares outstanding

 

 

 

 

Basic

 

 

14,515

 

 

 

14,380

 

Diluted (1)

 

 

14,515

 

 

 

14,641

 

 

 

 

 

 

Cash distributions declared per common share

 

$

0.25

 

 

$

0.25

 

 

 

 

 

 

 

 

 

 

 

Combined ratio analysis: (2)

 

 

 

 

Loss ratio

 

 

56.9

%

 

 

63.1

%

Expense ratio

 

 

38.1

%

 

 

38.1

%

Combined ratio

 

 

95.0

%

 

 

101.2

%

(1)

For the three months ended March 31, 2022, “weighted-average shares outstanding – basic” was used to calculate “diluted earnings per share” due to 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 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)

March 31, 2022

 

December 31, 2021

Fixed Maturities:

 

 

 

Available for sale, at fair value

 

 

 

(amortized cost: 2022 - $1,145,141 and 2021 - $1,193,746; net of allowance for expected credit losses of: $0 in 2022 and 2021)

$

1,129,276

 

 

$

1,201,866

 

Equity securities, at fair value

 

22,822

 

 

 

99,978

 

Other invested assets

 

147,490

 

 

 

152,651

 

Total investments

 

1,299,588

 

 

 

1,454,495

 

 

 

 

 

Cash and cash equivalents

 

157,896

 

 

 

78,278

 

Premium receivables, net of allowance for expected credit losses of $2,937 at March 31, 2022 and $2,996 at December 31, 2021

 

134,278

 

 

 

128,444

 

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

 

99,678

 

 

 

99,864

 

Funds held by ceding insurers

 

26,644

 

 

 

27,958

 

Deferred federal income taxes

 

45,410

 

 

 

37,329

 

Deferred acquisition costs

 

65,333

 

 

 

60,331

 

Intangible assets

 

20,164

 

 

 

20,261

 

Goodwill

 

5,398

 

 

 

5,398

 

Prepaid reinsurance premiums

 

52,619

 

 

 

53,494

 

Receivable for securities sold

 

7,080

 

 

 

-

 

Lease right of use assets

 

15,607

 

 

 

16,051

 

Other assets

 

29,801

 

 

 

30,906

 

Total assets

$

1,959,496

 

 

$

2,012,809

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

Liabilities:

 

 

 

Unpaid losses and loss adjustment expenses

$

770,332

 

 

$

759,904

 

Unearned premiums

 

326,350

 

 

 

316,566

 

Ceded balances payable

 

13,247

 

 

 

35,340

 

Payable for securities purchased

 

-

 

 

 

794

 

Contingent commissions

 

4,958

 

 

 

7,903

 

Debt

 

126,465

 

 

 

126,430

 

Lease liabilities

 

18,589

 

 

 

19,079

 

Other liabilities

 

29,900

 

 

 

40,172

 

Total liabilities

 

1,289,841

 

 

 

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: 10,614,555 and 10,574,589,

 

 

 

respectively; class A common shares outstanding: 10,592,278 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)

 

448,266

 

 

 

447,406

 

Accumulated other comprehensive income, net of taxes

 

(12,772

)

 

 

6,404

 

Retained earnings (1)

 

230,771

 

 

 

249,301

 

Class A common shares in treasury, at cost: 22,277 and 17,496 shares, respectively

 

(610

)

 

 

(490

)

Total shareholders’ equity

 

669,655

 

 

 

706,621

 

 

 

 

 

Total liabilities and shareholders’ equity

$

1,959,496

 

 

$

2,012,809

 

(1)

Since the Company’s initial public offering in 2003, the Company has returned $550 million to shareholders, including $488 million in share repurchases and $62 million in dividends/distributions.

GLOBAL INDEMNITY GROUP, LLC
SELECTED INVESTMENT DATA
(Dollars in millions)

 

Market Value as of

 

(Unaudited)

March 31, 2022

 

 

December 31, 2021

 

 

 

 

Fixed maturities

$

1,129.3

 

$

1,201.9

 

Cash and cash equivalents

 

157.9

 

 

 

78.3

 

Total bonds and cash and cash equivalents

 

1,287.2

 

 

 

1,280.2

 

Equities and other invested assets

 

170.3

 

 

 

252.6

 

Total cash and invested assets, gross

 

1,457.5

 

 

 

1,532.8

 

Receivable (payable) for securities purchased

 

7.1

 

 

 

(0.8

)

Total cash and invested assets, net

$

1,464.6

 

 

$

1,532.0

 

 

Total Investment Return (1)

 

 

For the Three Months

Ended March 31,

(unaudited)

 

2022

 

2021

 

 

 

 

Net investment income

$

6.6

 

 

$

9.8

 

 

 

 

 

Net realized investment gains (losses)

 

(25.4

)

 

 

3.8

 

Net unrealized investment losses

 

(23.8

)

 

 

(30.1

)

Net realized and unrealized investment return

 

(49.2

)

 

 

(26.3

)

 

 

 

 

Total investment return

$

(42.6

)

 

$

(16.5

)

 

 

 

 

Average total cash and invested assets

$

1,498.3

 

 

$

1,439.6

 

 

 

 

 

Total investment return %

 

(2.8

%)

 

 

(1.1

%)

(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 March 31,

 

2022

 

2021

 

 

 

 

Adjusted operating income, net of tax

$

5,358

 

 

$

2,250

 

 

 

 

 

Adjustments:

 

 

 

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

 

298

 

 

 

(797

)

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

 

5,656

 

 

 

1,453

 

 

 

 

 

Net realized investment gains (losses)

 

(20,429

)

 

 

4,064

 

 

 

 

 

Net income (loss)

$

(14,773

)

 

$

5,517

 

 

 

 

 

Weighted average shares outstanding – basic

 

14,515

 

 

 

14,380

 

 

 

 

 

Weighted average shares outstanding – diluted

 

14,701

 

 

 

14,641

 

 

 

 

 

Adjusted operating income per share – basic (2)

$

0.36

 

 

$

0.15

 

 

 

 

 

Adjusted operating income per share – diluted (2)

$

0.36

 

 

$

0.15

 

(1)

Adjusted operating income including Exited Lines, net of tax, excludes preferred shareholder distributions of $0.11 million for each of the three months ended March 31, 2022 and 2021.

(2)

The adjusted operating income per share calculation is net of preferred shareholder distributions of $0.11 million for each of the three months ended March 31, 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

Release Summary

Global Indemnity Group, LLC Reports First Quarter 2022 Results

Contacts

Media
Stephen W. Ries
Head of Investor Relations
(610) 668-3270
sries@gbli.com