Global Indemnity Limited Reports First Quarter 2020 Results

GEORGE TOWN, Cayman Islands, May 07, 2020 (GLOBE NEWSWIRE) -- Global Indemnity Limited GBLI today reported that for the three months ended March 31, 2020, the Company's Gross Written Premiums increased 9.5% to $155.7 million and Net Written Premiums increased 12.7% to $139.1 million. Adjusted Operating Income for the quarter declined by $1.6 million, or 13.2%, to $10.0 million as compared to the first quarter of 2019, which quarter included a $7.9 million release of excess reserves as compared to a $0.6 million release in the current quarter. The Company's Combined Ratio for the period was 92.7%. The Company's $1.6 billion Investment Portfolio declined $56.4 million, or 3.5%, over the quarter as a result of the steep (approx. 20%) decline in U.S. equity markets related to the Covid-19 pandemic. As a result, the Company incurred a $44.6 million net loss for the quarter and a 6.8% pre-dividend decline in book value per share from $50.82 at December 31, 2019, to $47.12 at March 31, 2020. In light of the Covid-19 pandemic, the Company also reported that all of its in force business interruption insurance coverages contain a specific exclusion in respect of virus and bacteria.

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

(1) Net Income exclusive of investment portfolio gains and losses.

About Global Indemnity Limited and its subsidiaries

Global Indemnity Limited 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

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 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.

Global Indemnity Limited's Combined Ratio for the Three Months Ended March 31, 2020 and 2019 

For the three months ended March 31, 2020, the Company recorded a combined ratio of 92.7% (Loss Ratio 53.7% and Expense Ratio 39.0%) as compared to 88.5% (Loss Ratio 47.8% and Expense Ratio 40.7%) for the three months ended March 31, 2019.
             

• The Company's accident year property loss ratio for the period of 50.8% improved by 1.8 points from the 2019 first quarter primarily as a result of a reductions in claims frequency and severity within the Specialty Property and Farm, Ranch, and Stable segments.   
   
• The accident year casualty loss ratio for the period of 59.1% as compared to 58.1% in the comparable 2019 period reflects the addition of a new casualty reinsurance treaty.

  
Global Indemnity Limited's Gross and Net Written Premiums Results by Segment for the Three Months Ended March 31, 2020 and 2019

Commercial Specialty Operations: Gross written premiums and net written premiums increased 25.9% and 31.4%, respectively, for the three months ended March 31, 2020 as compared to the same period in 2019.  This increase is primarily driven by organic growth from existing agents, increased pricing, and several new programs.

Specialty Property Operations:  Gross written premiums and net written premiums decreased by 11.2% and 9.7% for the three months ended March 31, 2020 as compared to the same period in 2019. The decreases are primarily due to a continued reduction of catastrophe exposed business.   

Farm, Ranch, & Stable Operations:  Gross written premiums increased by 6.6% and net written premiums increased by 9.2% for the three months ended March 31, 2020 as compared to the same period in 2019. The increase in gross and net written premiums was primarily due to an increase in pricing.   

Reinsurance Operations: Gross written premiums and net written premiums decreased 0.2% and 0.1%, respectively, for the three months ended March 31, 2020, as compared to the same period in 2019, which was primarily due to the non-renewal of property catastrophe treaties offset by the growth of the new casualty treaty entered into during 2019.

Note: Tables Follow

GLOBAL INDEMNITY LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and shares in thousands, except per share data)

(1) Includes loss reductions related to prior years of $0.6 million and $7.9 million for the three months ended March 31, 2020 and 2019, respectively.

(2) For the quarter ended March 31, 2020, weighted average shares outstanding – basic was used to calculate diluted earnings per share due to a net loss for the period.

(3) 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 LIMITED
CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands)

(1) Since the Company's initial public offering in 2003, the Company repurchased 20.2 million shares for a total of $488 million. These share repurchases are reflected by a $488 million reduction of the Company's additional paid-in capital and retained earnings as of March 31, 2020 and December 31, 2019. Retained earnings are also net of $32 million and $29 million of cumulative historic Company dividends to shareholders as of March 31, 2020 and December 31, 2019, respectively.

GLOBAL INDEMNITY LIMITED
SELECTED INVESTMENT DATA
 (Dollars in millions)

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

GLOBAL INDEMNITY LIMITED
SUMMARY OF ADJUSTED OPERATING INCOME
(Unaudited)
 (Dollars and shares in thousands, except per share data)

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.