GEORGE TOWN, Cayman Islands, March 08, 2019 (GLOBE NEWSWIRE) -- Global Indemnity Limited (NASDAQ:GBLI) today reported a net loss of $56.7 million, a decrease of $47.1 million from 2017. Gross written premiums for the year ended December 31, 2018 increased 6.1%. Investment income for the year ended 2018 was $46.3 million, an increase of 17.8% compared to 2017. The combined ratio for the year ended December 31, 2018 was 112.3%. The Company declared and paid dividends of $1.00 per share during 2018.
Selected Operating and Balance Sheet Data (Dollars in millions, except per share data)
| For the Twelve Months Ended December 31, | As of December 31, | As of December 31, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Gross premiums written | $ | 547.9 | $ | 516.3 | Book value per share | $ | 44.21 | $ | 50.57 | |||||||
| Net premiums written | $ | 472.5 | $ | 450.2 | Shareholders’ equity | $ | 629.1 | $ | 718.4 | |||||||
| Net premiums earned | $ | 467.8 | $ | 438.0 | Cash and invested assets (1) | $ | 1,510.2 | $ | 1,535.4 | |||||||
| Net investment income | $ | 46.3 | $ | 39.3 | (1) Including receivable/(payable) for securities sold/(purchased) | |||||||||||
| Net loss | $ | (56.7 | ) | $ | (9.6 | ) | ||||||||||
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 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 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 Twelve Months Ended December 31, 2018 and 2017
The combined ratio was 112.3% for the twelve months ended December 31, 2018 compared to 103.4% for the twelve months ended December 31, 2017. Excluding hurricane Michael and the California wildfires, the combined ratio would have been 99.3%.
Calendar year results for the twelve months ended December 31, 2018 include $28.8 million in favorable development, which was driven by lower than expected claims severity experienced across multiple prior accident years within Commercial Lines and Personal Lines as well as a reduction related to the Company’s property treaties for multiple prior accident years within the Reinsurance Operations.
Global Indemnity Limited’s Gross and Net Premiums Written Results by Segment for the Twelve Months Ended December 31, 2018 and 2017
| Twelve Months Ended December 31, | |||||||||||||||
| Gross Premiums Written | Net Premiums Written | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Commercial Lines Operations | $ | 249,931 | $ | 212,471 | $ | 226,820 | $ | 186,322 | |||||||
| Personal Lines Operations | 250,957 | 250,044 | 196,952 | 208,776 | |||||||||||
| Reinsurance Operations | 48,043 | 53,887 | 48,033 | 53,933 | |||||||||||
| Runoff | 1,028 | 1,270 | 742 | 1,149 | |||||||||||
| Fronted Business | (2,062 | ) | (1,338 | ) | - | - | |||||||||
| Total | $ | 547,897 | $ | 516,334 | $ | 472,547 | $ | 450,180 | |||||||
Commercial Lines Operations: Gross premiums written and net premiums written increased 17.6% and 21.7%, respectively, for the twelve months ended December 31, 2018 as compared to the same period in 2017. This increase is driven by rate increases and new products.
Personal Lines Operations: Gross premiums written increased by 0.4% and net premiums written decreased by 5.7% for the twelve months ended December 31, 2018 as compared to the same period in 2017.
Reinsurance Operations: Gross premiums written and net premiums written decreased 10.8% and 10.9% for the twelve months ended December 31, 2018, respectively, as compared to the same period in 2017 due primarily to the non-renewal of a treaty offset in part by growth in other treaties.
Note: Tables Follow
GLOBAL INDEMNITY LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars and shares in thousands, except per share data)
| For the Twelve Months Ended December 31, | |||||||
| 2018 | 2017 | ||||||
| Gross premiums written | $ | 547,897 | $ | 516,334 | |||
| Net premiums written | $ | 472,547 | $ | 450,180 | |||
| Net premiums earned | $ | 467,775 | $ | 438,034 | |||
| Net investment income | 46,342 | 39,323 | |||||
| Net realized investment gains (losses) | (16,907 | ) | 1,576 | ||||
| Other income | 1,728 | 6,582 | |||||
| Total revenues | 498,938 | 485,515 | |||||
| Net losses and loss adjustment expenses | 334,625 | 269,212 | |||||
| Acquisition costs and other underwriting expenses | 190,778 | 183,733 | |||||
| Corporate and other operating expenses | 29,766 | 25,714 | |||||
| Interest expense | 19,694 | 16,906 | |||||
| Loss before income taxes | (75,925 | ) | (10,050 | ) | |||
| Income tax benefit | (19,229 | ) | (499 | ) | |||
| Net loss | $ | (56,696 | ) | $ | (9,551 | ) | |
| Weighted average shares outstanding–basic | 14,089 | 17,309 | |||||
| Weighted average shares outstanding–diluted | 14,089 | 17,309 | |||||
| Net loss per share – basic | $ | (4.02 | ) | $ | (0.55 | ) | |
| Net loss per share – diluted | $ | (4.02 | ) | $ | (0.55 | ) | |
| Combined ratio analysis: (1) | |||||||
| Loss ratio | 71.5 | % | 61.5 | % | |||
| Expense ratio | 40.8 | % | 41.9 | % | |||
| Combined ratio | 112.3 | % | 103.4 | % | |||
(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 | December 31, 2018 | December 31, 2017 | ||||||
| Fixed Maturities: | ||||||||
| Available for sale securities, at fair value (amortized cost: 2018 - $1,257,830 and 2017 - $1,243,144) | $ | 1,235,155 | $ | 1,241,437 | ||||
| Equity securities, at fair value | 124,747 | 140,229 | ||||||
| Other invested assets | 50,753 | 77,820 | ||||||
| Total investments | 1,410,655 | 1,459,486 | ||||||
| Cash and cash equivalents | 99,497 | 74,414 | ||||||
| Premiums receivable, net | 87,679 | 84,386 | ||||||
| Reinsurance receivables, net | 114,418 | 105,060 | ||||||
| Funds held by ceding insurers | 49,206 | 45,300 | ||||||
| Federal income taxes receivable | 10,866 | 10,332 | ||||||
| Receivable for securities sold | 15 | 1,543 | ||||||
| Deferred federal income taxes | 48,589 | 26,196 | ||||||
| Deferred acquisition costs | 61,676 | 61,647 | ||||||
| Intangible assets | 22,020 | 22,549 | ||||||
| Goodwill | 6,521 | 6,521 | ||||||
| Prepaid reinsurance premiums | 20,594 | 28,851 | ||||||
| Other assets | 28,530 | 75,384 | ||||||
| Total assets | $ | 1,960,266 | $ | 2,001,669 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Liabilities: | ||||||||
| Unpaid losses and loss adjustment expenses | $ | 680,031 | $ | 634,664 | ||||
| Unearned premiums | 281,912 | 285,397 | ||||||
| Ceded balances payable | 14,994 | 10,851 | ||||||
| Contingent commissions | 10,636 | 7,984 | ||||||
| Debt | 288,565 | 294,713 | ||||||
| Other liabilities | 55,069 | 49,666 | ||||||
| Total liabilities | 1,331,207 | 1,283,275 | ||||||
| Shareholders’ equity: | ||||||||
| Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 10,171,954 and 10,102,927 respectively; A ordinary shares outstanding: 10,095,312 and 10,073,376 respectively; B ordinary shares issued and outstanding: 4,133,366 and 4,133,366, respectively | 2 | 2 | ||||||
| Additional paid-in capital | 438,182 | 434,730 | ||||||
| Accumulated other comprehensive income, net of taxes | (21,231 | ) | 8,983 | |||||
| Retained earnings | 215,132 | 275,838 | ||||||
| A ordinary shares in treasury, at cost: 76,642 and 29,551 shares, respectively | (3,026 | ) | (1,159 | ) | ||||
| Total shareholders’ equity | 629,059 | 718,394 | ||||||
| Total liabilities and shareholders’ equity | $ | 1,960,266 | $ | 2,001,669 | ||||
GLOBAL INDEMNITY LIMITED
SELECTED INVESTMENT DATA
(Dollars in millions)
| Market Value as of | ||||||||
| December 31, 2018 | December 31, 2017 | |||||||
| Fixed maturities | $ | 1,235.2 | $ | 1,241.4 | ||||
| Cash and cash equivalents | 99.5 | 74.4 | ||||||
| Total bonds and cash and cash equivalents | 1,334.7 | 1,315.8 | ||||||
| Equities and other invested assets | 175.5 | 218.1 | ||||||
| Total cash and invested assets, gross | 1,510.2 | 1,533.9 | ||||||
| Receivable (payable) for securities sold/(purchased) | - | 1.5 | ||||||
| Total cash and invested assets, net | $ | 1,510.2 | $ | 1,535.4 | ||||
| Twelve Months Ended December 31, 2018 (a) | ||||
| Net investment income | $ | 46.3 | ||
| Net realized investment losses | (16.9 | ) | ||
| Net change in unrealized investment losses | (22.9 | ) | ||
| Net realized and unrealized investment returns | (39.8 | ) | ||
| Total investment return | $ | 6.5 | ||
| Average total cash and invested assets | $ | 1,522.8 | ||
| Total investment return % | 0.4 | % | ||
(a) Amounts in this table are shown on a pre-tax basis.
GLOBAL INDEMNITY LIMITED
SUMMARY OF ADJUSTED OPERATING INCOME (LOSS)
(Dollars and shares in thousands, except per share data)
| For the Twelve Months Ended December 31, | ||||||||
| 2018 | 2017 | |||||||
| Adjusted operating income (loss), net of tax | $ | (31,316 | ) | $ | 7,173 | |||
| Adjustments: | ||||||||
| Net realized investment gains (losses) | (13,497 | ) | 800 | |||||
| Expenses related to the restructuring of debt | (11,883 | ) | - | |||||
| Deferred Tax writedown due to enactment of the Tax Cuts and Jobs Act of 2017 | - | (17,524 | ) | |||||
| Net loss | $ | (56,696 | ) | $ | (9,551 | ) | ||
| Weighted average shares outstanding – basic | 14,089 | 17,309 | ||||||
| Weighted average shares outstanding – diluted | 14,089 | 17,680 | ||||||
| Adjusted operating income (loss) per share – basic | $ | (2.22 | ) | $ | 0.41 | |||
| Adjusted operating income (loss) per share – diluted | $ | (2.22 | ) | $ | 0.41 | |||
Note Regarding Adjusted Operating Income (loss)
Adjusted Operating income (loss), a non-GAAP financial measure, is equal to net loss excluding after-tax net realized investment gains (losses) and other unique charges not related to operations. Adjusted 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.
Contact:
Media
Stephen W. Ries
Senior Corporate Counsel
(610) 668-3270
sries@global-indemnity.com