Market Overview

AM Best Affirms Credit Ratings of Global Indemnity Limited and Its Subsidiaries

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AM Best has affirmed the Financial Strength Rating (FSR) of A
(Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of
"a" of Global Indemnity Reinsurance Company, Ltd. (Global Indemnity Re)
(Hamilton, Bermuda) and its U.S. subsidiaries. Concurrently, AM Best has
affirmed the Long-Term ICR of "bbb" of Global Indemnity Re's ultimate
parent holding company, Global Indemnity Limited (Global Indemnity)
(Cayman Islands) (NASDAQ:GBLI).

Additionally, AM Best has affirmed the Long-Term Issue Credit Rating
(Long-Term IR) of "bbb-" on Global Indemnity's $100 million 7.75%
subordinated notes offering due 2045, and the $130 million 7.875%
subordinated note offering due 2047, as well as the indicative Long-Term
IRs on its shelf registration of "bbb" on senior unsecured debt, "bbb-"
on subordinated unsecured debt and "bb+" on the preferred stock. The
outlook of these Credit Ratings (ratings) is stable. (See below for a
detailed listing of the companies.)

The ratings reflect Global Indemnity Re's balance sheet strength, which
AM Best categorizes as strongest, as well as its adequate operating
performance, neutral business profile and appropriate enterprise risk
management.

The balance sheet strength assessment is based on Global Indemnity Re's
BCAR score at the strongest level supported by a conservative investment
portfolio, conservative reserving practices and added financial
flexibility through its access to the capital markets. Through its six
member intercompany pool, the group targets a diverse mix of specialty
niche business that is generally not offered in the standard insurance
marketplace. Each company serves a specific market or distribution
channel, which provides the group access to a substantial amount of
commercial and personal lines business in the United States.
U.S.-sourced business accounts for the largest share of the group's
revenues.

The group's operating earnings has performed generally in line with its
peers over the past five years, although catastrophe losses dampened its
earnings in 2017 and 2018. The acquisition of American Reliable
Insurance Company (American Reliable) in 2015 nearly doubled its
writings, but at the same time also significantly increased its U.S.
property exposures. AM Best believes that ongoing execution of
management's recently implemented initiatives should continue to
positively impact underwriting and operating results going forward.

Positive rating actions could occur if the company can demonstrate
sustainable fundamental operating results at levels that exceed that of
its peers while maintaining balance sheet strength at the strongest
level. Downward pressure on the ratings or outlooks could result if
there is material deterioration in the organization's risk-adjusted
capital or a significant decline in underwriting and operating
performance, brought on by aggregate catastrophe losses, significant
unanticipated loss reserve development, a sudden shift in the group's
business strategy or the loss of a major distribution partner.

The FSR of A (Excellent) and the Long-Term ICRs of "a" have been
affirmed with stable outlooks for Global Indemnity Reinsurance Company,
Ltd. and its following subsidiaries:

  • American Reliable Insurance Company
  • Diamond State Insurance Company
  • Penn-America Insurance Company
  • Penn-Patriot Insurance Company
  • Penn-Star Insurance Company
  • United National Insurance Company

This press release relates to Credit Ratings that have been published
on AM Best's website. For all rating information relating to the release
and pertinent disclosures, including details of the office responsible
for issuing each of the individual ratings referenced in this release,
please see AM Best's
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and AM Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and AM Best Rating
Action Press Releases
.

AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit
www.ambest.com
for more information
.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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