Global Indemnity Group, LLC Reports First Quarter 2024 Results

Rhea-AI Summary

Global Indemnity Group, reported net income available to shareholders of $11.3 million for Q1 2024, a significant increase from $2.4 million in Q1 2023. The rise was due to strong underwriting results in the Penn-America business and a 21% increase in investment income. Gross written premiums declined by 24.0% to $93.5 million due to runoff in the Non-Core segment. Book value per share increased to $48.18 in March 2024, with a 2.1% rise from December 2023. Dividend per share increased by 40% to $0.35 in 2024.

Positive

• Significant increase in net income available to shareholders from $2.4 million in Q1 2023 to $11.3 million in Q1 2024.

• Strong underwriting results in the Penn-America business drove the increase in net income.

• 21% increase in investment income to $14.5 million in 2024.

• Book value per share saw a 2.1% increase to $48.18 in March 2024.

• Dividend per share surged by 40% to $0.35 in 2024.

Negative

• Gross written premiums declined by 24.0% to $93.5 million in 2024.

• Runoff of business in the Company's Non-Core segment attributed to the decline in gross written premiums.

Insights

Financial Analyst

The first quarter results for Global Indemnity Group demonstrate a robust increase in net income, rising from $2.4 million in Q1 2023 to $11.3 million in Q1 2024. A key driver for this improvement is a solid performance from the Penn-America excess and surplus lines business, evidenced by a healthy Loss Ratio of 54.8% and a Combined Ratio of 94.0%, both indicators of underwriting efficiency. Additionally, investment income has seen a boost due to interest rates, suggesting proactive treasury management. However, a 24% drop in gross written premiums signals a reduction in new business in the Non-Core segment, which investors should keep an eye on as it might impact future revenue.

From a shareholder value perspective, the increase in dividends per share by 40% and an uplift in book value per share reflects a strong return to investors. This performance presents a positive signal for shareholder confidence. Though there is a concerning decline in gross written premiums, the significant improvement in profitability and shareholder returns could suggest a strategic shift towards more profitable business lines, which may benefit the company in the long-term.

Insurance Industry Analyst

The reported underwriting and investment gains by Global Indemnity Group indicate a strategic refinement in their operations, particularly within the Penn-America line. The significant improvement in the combined ratio from 101.0% last year to 94.9% this year indicates better control of expenses relative to premiums earned, which is a positive sign for operational efficiency in the insurance sector. The company's decision to reshape its portfolio, by running off the Non-Core segment, appears to have positively influenced underwriting results.

We must also note the improvement in property loss ratios, a reflection of reduced claim expenses or improved pricing accuracy. However, the unchanged catastrophe losses year over year indicate that the company's risk exposure to catastrophic events remains constant, which is an essential consideration for long-term stability. Investors should appreciate the mix of outcomes, from operational refinements to investment income adjustments and how these elements contribute to the overall financial health of an insurance company.

Investment Strategist

The actions taken by Global Indemnity Group to reposition their investment portfolio in anticipation of rising interest rates have borne fruit with a 21% increase in investment income. This strategic maneuver is indicative of a forward-thinking management team capable of adjusting asset allocations to maximize returns. Furthermore, the increased book value per share, including dividends, suggests that the intrinsic value of the company is growing, which can be considered a strong indicator of the company's underlying financial health.

Though net written premiums have decreased, due to the runoff in Non-Core operations, the growth segments such as InsurTech and Assumed Reinsurance within the Penn-America business demonstrate the company's ability to innovate and adapt to market changes. This balance between maintaining underwriting discipline and exploring growth avenues may provide resilience against market volatilities. For investors, the strategic allocation in rising interest environments and the disciplined underwriting suggest a management team that is both prudent and proactive—an attractive trait for long-term investment considerations.

WILMINGTON, Del.--(BUSINESS WIRE)-- Global Indemnity Group, LLC (NYSE:GBLI) (the “Company”) today reported net income available to shareholders of $11.3 million for the three months ended March 31, 2024 compared to $2.4 million for the same period in 2023.

Highlights for the 1st quarter of 2024

• The increase in net income available to shareholders was driven by strong underwriting results in the Penn-America excess and surplus lines business, reflected in a 54.8% Loss Ratio and 94.0% Combined Ratio, and a 21% increase in investment income to $14.5 million in 2024 due to steps taken by the Company to position it to take advantage of rising interest rates.
• Gross written premiums declined 24.0% to $93.5 million for 2024 from $123.0 in the same period in 2023 due to runoff of business in the Company’s Non-Core segment.
• Book value per share increased to $48.18 at March 31, 2024 from $47.53 at December 31, 2023, an increase of 2.1% including dividends paid of $0.35 per share in 2024.
• Dividend per share increased 40% to $0.35 in 2024 from $0.25 in the same period in 2023.

Consolidated Selected Operating and Balance Sheet Information
(Dollars in millions, except per share data)
		For the Three Months Ended
		March 31,
		2024				2023
Net income available to shareholders		$	11.3			$	2.4
Net income available to shareholders per share		$	0.82			$	0.17
Adjusted operating income		$	10.7			$	3.7
Adjusted operating income per share		$	0.77			$	0.26
Underwriting income (loss)		$	5.3			$	(1.1	)
Investment income		$	14.5			$	12.0
Gross written premiums		$	93.5			$	123.0
Combined ratio analysis:
Loss ratio			55.3	%			62.8	%
Expense ratio			39.6	%			38.2	%
Combined ratio (1)			94.9	%			101.0	%

		As of March 31,				As of December 31,
		2024				2023
Book value per share (2)		$	48.18			$	47.53
Book value per share plus cumulative dividends and excluding AOCI		$	56.00			$	55.22
Shareholders’ equity (3)		$	659.5			$	648.8
Cash and invested assets (4)		$	1,417.3			$	1,390.4
Shares Outstanding (in millions)			13.6				13.6

(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 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.

(2) Net of cumulative Company distributions to common shareholders totaling $6.35 per share and $6.00 per share as of March 31, 2024 and December 31, 2023, respectively.

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

(4) Including receivable for securities matured.

Business Highlights for the Three Months Ended March 31, 2024 and 2023
(Dollars in millions)
Select Underwriting Income Results
		For the Three Months Ended March 31,
		Penn-America								Non-Core Operations								Consolidated
		2024				2023				2024				2023				2024				2023
Revenues:
Gross written premiums		$	94.0			$	95.4			$	(0.5	)		$	27.6			$	93.5			$	123.0
Net written premiums		$	92.6			$	91.2			$	(0.5	)		$	24.7			$	92.1			$	115.9
Net earned premiums		$	89.1			$	90.6			$	7.5			$	49.5			$	96.6			$	140.1
Underwriting income (loss), current accident year		$	5.7			$	(0.8	)		$	(0.4	)		$	0.2			$	5.3			$	(0.6	)
Underwriting income (loss)		$	5.6			$	(3.1	)		$	(0.3	)		$	2.0			$	5.3			$	(1.1	)
Combined ratio analysis:
Loss ratio
Current accident year			54.8	%			63.0	%			60.6	%			62.5	%			55.3	%			62.8	%
Prior accident year			0.1	%			2.4	%			(0.5	%)			(4.4	%)			0.0	%			0.0	%
Calendar year loss ratio			54.9	%			65.4	%			60.1	%			58.1	%			55.3	%			62.8	%
Expense ratio			39.2	%			38.3	%			44.9	%			37.9	%			39.6	%			38.2	%
Combined ratio			94.1	%			103.7	%			105.0	%			96.0	%			94.9	%			101.0	%
Combined ratio, current accident year			94.0	%			101.2	%			105.5	%			99.7	%			94.9	%			100.6	%

Select Premium Data
	Three Months Ended March 31,
	Gross Written Premiums										Net Written Premiums
	2024				2023				% Change		2024				2023				% Change
Penn-America:
Wholesale Commercial	$	61.0			$	58.3			4.7%		$	59.0			$	56.8			4.0%
InsurTech		12.5				10.7			17.0%			12.0				9.6			24.6%
Assumed Reinsurance		2.9				2.4			20.9%			2.9				2.4			20.9%
		76.4				71.4			7.1%			73.9				68.8			7.5%
Programs		17.6				24.0			(26.7%)			18.7				22.4			(16.5%)
Penn-America		94.0				95.4			(1.4%)			92.6				91.2			1.6%
Non-Core Operations		(0.5	)			27.6			(102.0%)			(0.5	)			24.7			(102.1%)
Total	$	93.5			$	123.0			(24.0%)		$	92.1			$	115.9			(20.5%)

• Penn-America’s gross written premiums for the 2024 was $94.0 million slightly below $95.4 million in 2023.
  • In aggregate for Wholesale Commercial, InsurTech, and Assumed Reinsurance gross written premiums business grew by 7.1% in 2024. Growth is driven by organic agency growth, new agents, and new products.
  • Programs’ gross written premiums declined 26.7%; Excluding programs terminated in 2023 that did not meet our long-term growth and underwriting income expectations, Programs’ gross written premiums declined 11.9% in 2024.
• Penn-Amerca’s current accident year underwriting income improved to $5.7 million in 2024 compared to an underwriting loss of $0.8 million in 2023 mainly driven by improved experience on non-catastrophe related property business. Combined ratio improved to 94.0% in 2024 from 101.2% in 2023.
• Penn-America’s current accident year loss ratio improved 8.2 points to 54.8% in 2024.
  • Property loss ratio improved 18.6 points to 50.1% due to improved performance on non-catastrophe related business; catastrophe losses were $3.3 million in 2024 and 2023.
  • Casualty loss ratio was 58.6% in 2024 compared to 58.9% in 2023.

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,
		2024				2023
Gross written premiums		$	93,488			$	122,985
Net written premiums		$	92,085			$	115,861
Net earned premiums		$	96,579			$	140,072
Net investment income			14,520				12,008
Net realized investment gains (losses)			847				(1,520	)
Other income			345				354
Total revenues			112,291				150,914
Net losses and loss adjustment expenses			53,384				88,001
Acquisition costs and other underwriting expenses			38,269				53,478
Corporate and other operating expenses			6,373				6,368
Income before income taxes			14,265				3,067
Income tax expense			2,899				573
Net income			11,366				2,494
Less: Preferred stock distributions			110				110
Net income available to common shareholders		$	11,256			$	2,384
Per share data:
Net income available to common shareholders
Basic		$	0.83			$	0.17
Diluted		$	0.82			$	0.17
Weighted-average number of shares outstanding
Basic			13,579				13,671
Diluted			13,687				13,929
Cash distributions declared per common share		$	0.35			$	0.25
Combined ratio analysis:
Loss ratio			55.3	%			62.8	%
Expense ratio			39.6	%			38.2	%
Combined ratio			94.9	%			101.0	%

GLOBAL INDEMNITY GROUP, LLC
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
		(Unaudited)
		March 31, 2024				December 31, 2023
ASSETS
Fixed maturities:
Available for sale, at fair value (amortized cost: $1,250,975 and $1,322,092; net of allowance for expected credit losses of $0 at March 31, 2024 and December 31, 2023)		$	1,226,309			$	1,293,793
Equity securities, at fair value			17,045				16,508
Other invested assets			34,021				38,236
Total investments			1,277,375				1,348,537
Cash and cash equivalents			38,857				38,037
Premium receivables, net of allowance for expected credit losses of
$4,423 at March 31, 2024 and $4,796 at December 31, 2023			92,440				102,158
Reinsurance receivables, net of allowance for expected credit losses of
$8,992 at March 31, 2024 and December 31, 2023			77,664				80,439
Funds held by ceding insurers			17,395				16,989
Deferred federal income taxes			33,224				36,802
Deferred acquisition costs			40,231				42,445
Intangible assets			14,368				14,456
Goodwill			4,820				4,820
Prepaid reinsurance premiums			3,229				4,958
Receivable for securities matured			101,091				3,858
Lease right of use assets			9,288				9,715
Other assets			18,260				26,362
Total assets		$	1,728,242			$	1,729,576
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Unpaid losses and loss adjustment expenses		$	853,602			$	850,599
Unearned premiums			176,630				182,852
Ceded balances payable			1,651				2,642
Federal income tax payable			1,600				1,595
Contingent commissions			2,598				5,632
Lease liabilities			11,910				12,733
Other liabilities			20,756				24,770
Total liabilities		$	1,068,747			$	1,080,823
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 per share 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: 11,082,004 and 11,042,670, respectively;
class A common shares outstanding: 9,810,763 and 9,771,429, respectively;
class B common shares issued and outstanding: 3,793,612 and 3,793,612, respectively			—				—
Additional paid-in capital (1)			456,179				454,791
Accumulated other comprehensive income (loss), net of tax			(19,995	)			(22,863	)
Retained earnings (1)			251,474				244,988
Class A common shares in treasury, at cost: 1,271,241 and 1,271,241 shares, respectively			(32,163	)			(32,163	)
Total shareholders’ equity			659,495				648,753
Total liabilities and shareholders’ equity		$	1,728,242			$	1,729,576

(1)

Since the Company’s initial public offering in 2003, the Company has returned $614 million to shareholders, including $522 million in share repurchases and $92 million in dividends/distributions.

GLOBAL INDEMNITY GROUP, LLC
SELECTED INVESTMENT DATA
(Dollars in millions)
		Market Value as of
		(Unaudited)
		March 31, 2024				December 31, 2023
Fixed maturities		$	1,226.3			$	1,293.8
Cash and cash equivalents			38.9				38.0
Total bonds and cash and cash equivalents			1,265.2				1,331.8
Equities and other invested assets			51.0				54.7
Total cash and invested assets, gross			1,316.2				1,386.5
Receivable for securities matured			101.1				3.9
Total cash and invested assets, net		$	1,417.3			$	1,390.4

		Total Investment Return (1)
		For the Three Months Ended
		March 31,
		(Unaudited)
		2024				2023
Net investment income		$	14.5			$	12.0
Net realized investment gains (losses)			0.8				(1.5	)
Net unrealized investment gains (losses)			3.6				10.5
Net realized and unrealized investment return			4.4				9.0
Total investment return		$	18.9			$	21.0
Average total cash and invested assets		$	1,403.9			$	1,344.9
Total quarterly investment return %			1.3	%			1.6	%
Total annualized investment return %			5.4	%			6.2	%

(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,
		2024				2023
Adjusted operating income, net of tax (1)		$	10,692			$	3,716
Net realized investment gains (losses)			674				(1,222	)
Net income		$	11,366			$	2,494
Weighted average shares outstanding – basic			13,579				13,671
Weighted average shares outstanding – diluted			13,687				13,929
Adjusted operating income per share – basic (2)		$	0.78			$	0.26
Adjusted operating income per share – diluted (2)		$	0.77			$	0.26

(1)		Adjusted operating income, net of tax, excludes preferred shareholder distributions of $0.1 million for each of the three months ended March 31, 2024 and 2023.
(2)		The adjusted operating income per share calculation is net of preferred shareholder distributions of $0.1 million for each of the three months ended March 31, 2024 and 2023.

Note Regarding Adjusted Operating Income

Adjusted operating income, a non-GAAP financial measure, is equal to net income 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 determined in accordance with GAAP, and investors should not place undue reliance on this measure.

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. The insurance companies manage the distribution of the Company's core product offerings through Penn-America. The Company also has a Non-Core Operations segment that contains lines of business that have been de-emphasized or are no longer being written.

Forward-Looking Information

The forward-looking statements contained in this press release³ 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.

[3] Disseminated pursuant to the "safe harbor" provisions of Section 21E of the Security Exchange Act of 1934.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240507667883/en/

Stephen W. Ries

Head of Investor Relations

(610) 668-3270

sries@gbli.com

Source: Global Indemnity Group, LLC

FAQ

What was Global Indemnity Group, 's net income available to shareholders for Q1 2024?

Global Indemnity Group, reported net income available to shareholders of $11.3 million for the first quarter of 2024.

What caused the increase in net income for Global Indemnity Group, in Q1 2024?

The increase in net income was driven by strong underwriting results in the Penn-America business and a 21% rise in investment income.

What was the change in gross written premiums for Global Indemnity Group, in Q1 2024?

Gross written premiums declined by 24.0% to $93.5 million in Q1 2024 due to runoff of business in the Non-Core segment.

How much did the book value per share increase by for Global Indemnity Group, in March 2024?

The book value per share increased to $48.18 in March 2024, marking a 2.1% rise from December 2023.

What was the dividend per share increase for Global Indemnity Group, in 2024?

The dividend per share increased by 40% to $0.35 in 2024 compared to the same period in 2023.