Global Indemnity Group, LLC Reports Third Quarter 2024 Results

Rhea-AI Summary

Global Indemnity Group (NYSE:GBLI) reported strong financial results for the nine months ended September 30, 2024. Net income available to shareholders increased 77% to $33.9 million ($2.48 per share) compared to $19.2 million in 2023. Operating income rose 57% to $33.8 million. Book value per share grew to $49.88, while investment income increased 18% to $46.3 million. The company's Penn-America segment posted $17.6 million in underwriting income with a 93.9% combined ratio. Catastrophe losses declined 35% to $10.3 million. AM Best affirmed GBLI's A (Excellent) rating for its U.S. insurance subsidiaries.

Positive

• Net income increased 77% to $33.9 million
• Operating income grew 57% to $33.8 million
• Investment income rose 18% to $46.3 million
• Catastrophe losses decreased 35% to $10.3 million
• Penn-America gross written premiums grew 12% to $293.0 million
• InsurTech segment grew 17% to $41.9 million
• Combined ratio improved to 95.2% from 99.2%

Negative

• Total gross written premiums decreased 12% to $294.0 million from $332.0 million
• Specialty Products premiums declined 16%

Insights

Financial Analyst

The Q3 2024 results demonstrate robust financial performance with several key improvements. Net income surged by 77% to $33.9 million ($2.48 per share), while operating income increased 57% to $33.8 million. The company's book value per share grew to $49.88, marking a 7.1% increase including dividends.

Notable strengths include an 18% increase in investment income to $46.3 million, driven by improved bond portfolio yields and a 7% growth in the investment portfolio to $1.47 billion. The Penn-America segment showed particularly strong results with $17.6 million in underwriting income and a favorable combined ratio of 93.9%.

The reduction in catastrophe losses by 35% and favorable prior accident year development indicate improved risk management. The A.M. Best rating affirmation further validates the company's financial strength.

Insurance Industry Analyst

The underwriting performance shows significant improvement, with the combined ratio improving to 95.2% from 99.2% year-over-year. The Penn-America segment's growth in various channels is particularly impressive:

• InsurTech grew 17% to $41.9 million
• Wholesale Commercial saw 12% higher policy premiums
• Assumed Re increased 131% to $19.3 million

The reduction in catastrophe losses to $10.3 million from $15.8 million, despite including Hurricane Helene impacts, indicates improved risk management and portfolio optimization. The expense ratio remains well-controlled at 39.2%.

WILMINGTON, Del.--(BUSINESS WIRE)-- Global Indemnity Group, LLC (NYSE:GBLI) (the “Company”) today reported an increase of 77% in net income available to shareholders to $33.9 million or $2.48 per share for the nine months ended September 30, 2024 compared to $19.2 million or $1.39 per share for the same period in 2023.

Highlights for the Nine Months Ended September 30, 2024

• Net income available to shareholders increased 77% to $33.9 million or $2.48 per share in 2024 compared to $19.2 million or $1.39 per share in 2023.
• Operating income increased 57% to $33.8 million in 2024 compared to $21.5 million in 2023.
• Book value per share increased to $49.88 at September 30, 2024 from $47.53 at December 31, 2023; increased 7.1% including dividends paid of $1.05 per share in 2024.
• Investment income increased 18% to $46.3 million in 2024 compared to $39.4 million in 2023 due to an increase in book yield on the Company’s bond portfolio to 4.6% at September 30, 2024 from 4.0% at September 30, 2023 and growth of 7% in the investment portfolio to $1.47 billion driven primarily by operating cash flow.
• Annualized return on equity, including unrealized gains on fixed-income securities included in stockholders' equity, was 9.8% in 2024 compared to 5.2% in 2023.
• Annualized investment return was 6.1% for the first nine months of 2024.
• GBLI’s current accident year underwriting income increased to $15.3 million for 2024 compared with $5.0 million in 2023 driven by:
  • The Company’s Penn-America segment that posted $17.6 million of underwriting income (combined ratio of 93.9%), higher than 2023 underwriting income of $9.7 million (combined ratio of 96.7%) driven by improved non-catastrophe and catastrophe property results.
  • GBLI's catastrophe losses declined 35%; $10.3 million in 2024 from $15.8 million in 2023. 2024 includes $1.5 million related to Hurricane Helene.
• Penn-America gross written premiums, excluding products terminated, increased 12% to $293.0 million in 2024 compared to $262.8 million in 2023.
  • InsurTech grew 17% to $41.9 million in 2024 compared with $35.7 million in 2023 from organic agency growth, new agency appointments and new products.
  • Wholesale Commercial's policy premiums, excluding audit premiums, is higher by 12% in 2024 driven by aggregate premium rate increase of 9%.
  • Assumed Re increased 131% from $8.4 million in 2023 to $19.3 million in 2024 due to new treaties commencing in both 2023 and 2024.
• Prior accident year loss development was slightly favorable at $0.1 million for the first nine months of 2024.
• AM Best affirmed Global Indemnity Group, LLC’s A (Excellent) rating for its U.S. insurance subsidiaries on August 1, 2024.

Selected Operating and Balance Sheet Information
(Dollars in millions, except per share data)
		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2024				2023				2024				2023
Consolidated:
Net income available to shareholders		$	12.7			$	7.6			$	33.9			$	19.2
Net income available to shareholders per share		$	0.92			$	0.55			$	2.48			$	1.39
Operating income		$	13.2			$	7.8			$	33.8			$	21.5
Operating income per share		$	0.95			$	0.56			$	2.45			$	1.53
Underwriting income, current accident year		$	6.6			$	1.8			$	15.3			$	5.0
Underwriting income		$	5.8			$	0.7			$	14.6			$	3.9
Gross written premiums		$	99.8			$	98.9			$	294.0			$	332.0
Investment income		$	16.5			$	14.2			$	46.3			$	39.4
Annualized investment return			7.9	%			3.8	%			6.1	%			4.2	%
Combined ratio analysis:
Loss ratio			54.9	%			58.3	%			56.0	%			60.7	%
Expense ratio			39.4	%			41.4	%			39.2	%			38.5	%
Combined ratio			94.3	%			99.7	%			95.2	%			99.2	%
Combined ratio, current accident year			93.5	%			98.6	%			95.0	%			98.9	%
Penn-America Segment:
Underwriting income, current accident year		$	7.7			$	3.4			$	17.6			$	9.7
Underwriting income (loss)		$	7.3			$	(4.5	)		$	17.6			$	(1.5	)
Penn-America gross written premiums (1)		$	103.1			$	84.0			$	293.0			$	262.8
Combined ratio analysis:
Loss ratio			54.7	%			67.1	%			55.6	%			62.9	%
Expense ratio			37.9	%			38.6	%			38.3	%			38.0	%
Combined ratio			92.6	%			105.7	%			93.9	%			100.9	%
Combined ratio, current accident year			92.1	%			96.3	%			93.9	%			96.7	%

		As of September 30, 2024				As of June 30, 2024				As of March 31, 2024				As of December 31, 2023
Consolidated:
Book value per share		$	49.88			$	48.56			$	48.18			$	47.53
Book value per share plus cumulative dividends and
excluding AOCI		$	57.50			$	56.58			$	56.00			$	55.22
Shareholders’ equity		$	686.7			$	667.5			$	659.5			$	648.8
Cash and invested assets		$	1,468.0			$	1,435.2			$	1,417.3			$	1,390.4
Shares Outstanding (in millions)			13.7				13.7				13.6				13.6
(1) Excludes $0.2 million and $3.0 million of gross written premiums for terminated products for the three months ended September 30, 2024 and 2023, respectively, and $4.8 million and $14.7 million of gross written premiums for terminated products for the nine months ended September 30, 2024 and 2023, respectively.

GLOBAL INDEMNITY GROUP, LLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars and shares in thousands, except per share data)
		For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2024				2023				2024				2023
Gross written premiums		$	99,767			$	98,926			$	293,961			$	332,011
Net written premiums		$	97,177			$	95,623			$	287,013			$	317,480
Net earned premiums		$	95,413			$	111,695			$	284,806			$	380,923
Net investment income			16,488				14,200				46,319				39,424
Net realized investment gains (losses)			(512	)			(133	)			540				(2,414	)
Other income			372				299				1,074				935
Total revenues			111,761				126,061				332,739				418,868
Net losses and loss adjustment expenses			52,400				65,116				159,446				231,199
Acquisition costs and other underwriting expenses			37,553				46,202				111,790				146,781
Corporate and other operating expenses			5,923				5,280				18,662				16,638
Interest expense			—				—				17				12
Income before income taxes			15,885				9,463				42,824				24,238
Income tax expense			3,125				1,763				8,605				4,707
Net income			12,760				7,700				34,219				19,531
Less: Preferred stock distributions			110				110				330				330
Net income available to common shareholders		$	12,650			$	7,590			$	33,889			$	19,201
Per share data:
Net income available to common shareholders
Basic		$	0.93			$	0.56			$	2.49			$	1.42
Diluted		$	0.92			$	0.55			$	2.48			$	1.39
Weighted-average number of shares outstanding
Basic			13,665				13,523				13,618				13,557
Diluted			13,801				13,814				13,684				13,799
Cash distributions declared per common share		$	0.35			$	0.25			$	1.05			$	0.75
Combined ratio analysis:
Loss ratio			54.9	%			58.3	%			56.0	%			60.7	%
Expense ratio			39.4	%			41.4	%			39.2	%			38.5	%
Combined ratio			94.3	%			99.7	%			95.2	%			99.2	%

GLOBAL INDEMNITY GROUP, LLC
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
		(Unaudited) September 30, 2024				December 31, 2023
ASSETS
Fixed maturities:
Available for sale, at fair value (amortized cost: $1,404,854 and $1,322,092; net of allowance for expected credit losses of $0 at September 30, 2024 and December 31, 2023)		$	1,395,229			$	1,293,793
Equity securities, at fair value			12,347				16,508
Other invested assets			29,459				38,236
Total investments			1,437,035				1,348,537
Cash and cash equivalents			31,019				38,037
Premium receivables, net of allowance for expected credit losses of
$3,486 at September 30, 2024 and $4,796 at December 31, 2023			73,425				102,158
Reinsurance receivables, net of allowance for expected credit losses of
$8,992 at September 30, 2024 and December 31, 2023			76,393				80,439
Funds held by ceding insurers			27,194				16,989
Deferred federal income taxes			24,491				36,802
Deferred acquisition costs			40,855				42,445
Intangible assets			14,191				14,456
Goodwill			4,820				4,820
Prepaid reinsurance premiums			3,260				4,958
Receivable for securities			19				3,858
Federal income tax receivable			1,062				—
Lease right of use assets			8,519				9,715
Other assets			18,834				26,362
Total assets		$	1,761,117			$	1,729,576
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Unpaid losses and loss adjustment expenses		$	840,176			$	850,599
Unearned premiums			183,362				182,852
Ceded balances payable			963				2,642
Federal income tax payable			—				1,595
Contingent commissions			5,203				5,632
Lease liabilities			10,836				12,733
Other liabilities			33,851				24,770
Total liabilities		$	1,074,391			$	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: 11,181,998 and 11,042,670, respectively;
class A common shares outstanding: 9,894,230 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)			458,714				454,791
Accumulated other comprehensive income (loss), net of tax			(7,847	)			(22,863	)
Retained earnings (1)			264,551				244,988
Class A common shares in treasury, at cost: 1,287,768 and 1,271,241 shares, respectively			(32,692	)			(32,163	)
Total shareholders’ equity			686,726				648,753
Total liabilities and shareholders’ equity		$	1,761,117			$	1,729,576
(1) Since the Company’s initial public offering in 2003, the Company has returned $624 million to shareholders, including $522 million in share repurchases and $102 million in dividends/distributions.

Segment Data for the Nine Months Ended September 30, 2024 and 2023
(Dollars in millions)
Underwriting Income for the Nine Months Ended September 30,
		Penn-America								Non-Core Operations								Consolidated
		2024				2023				2024				2023				2024				2023
Revenues:
Gross written premiums		$	297.9			$	277.4			$	(3.9	)		$	54.6			$	294.0			$	332.0
Net written premiums		$	290.9			$	266.8			$	(3.9	)		$	50.7			$	287.0			$	317.5
Net earned premiums		$	272.5			$	266.7			$	12.3			$	114.2			$	284.8			$	380.9
Underwriting income (loss), current
accident year		$	17.6			$	9.7			$	(2.3	)		$	(4.7	)		$	15.3			$	5.0
Underwriting income (loss)		$	17.6			$	(1.4	)		$	(3.0	)		$	5.3			$	14.6			$	3.9
Combined ratio analysis:
Loss ratio
Current accident year			55.7	%			58.8	%			62.6	%			65.1	%			56.0	%			60.7	%
Prior accident year			(0.1	%)			4.1	%			2.5	%			(9.5	%)			—				—
Calendar year loss ratio			55.6	%			62.9	%			65.1	%			55.6	%			56.0	%			60.7	%
Expense ratio			38.3	%			38.0	%			59.4	%			39.8	%			39.2	%			38.5	%
Combined ratio			93.9	%			100.9	%			124.5	%			95.4	%			95.2	%			99.2	%
Combined ratio, current accident year			93.9	%			96.7	%			118.9	%			104.2	%			95.0	%			98.9	%

Gross Written Premiums for the Nine Months Ended September 30,
	2024				2023				% Change
Penn-America:
Wholesale Commercial	$	186.9			$	174.4			7%
InsurTech		41.9				35.7			17%
Assumed Reinsurance		19.3				8.4			131%
		248.1				218.5			14%
Specialty Products		49.8				58.9			(16%)
Penn-America		297.9				277.4			7%
Non-Core Operations		(3.9	)			54.6			(107%)
Total	$	294.0			$	332.0			(12%)

GLOBAL INDEMNITY GROUP, LLC
SELECTED INVESTMENT DATA
(Dollars in millions)
		Market Value as of
		(Unaudited) September 30, 2024				December 31, 2023
Fixed maturities		$	1,395.2			$	1,293.8
Cash and cash equivalents			31.0				38.0
Total fixed maturities and cash and cash equivalents			1,426.2				1,331.8
Equities and other invested assets			41.8				54.7
Total cash and invested assets, gross			1,468.0				1,386.5
Receivable for securities			—				3.9
Total cash and invested assets, net		$	1,468.0			$	1,390.4

		Total Pre-Tax Investment Return
		For the Three Months Ended September 30, (Unaudited)								For the Nine Months Ended September 30, (Unaudited)
		2024				2023				2024				2023
Net investment income		$	16.5			$	14.2			$	46.3			$	39.4
Net realized investment gains (losses)			(0.5	)			(0.1	)			0.5				(2.4	)
Net unrealized investment gains (losses)			12.8				(1.3	)			18.8				6.1
Net realized and unrealized investment return			12.3				(1.4	)			19.3				3.7
Total investment return		$	28.8			$	12.8			$	65.6			$	43.1
Average total cash and invested assets		$	1,451.6			$	1,355.1			$	1,429.3			$	1,354.7
Total annualized investment return %			7.9	%			3.8	%			6.1	%			4.2	%

SUMMARY OF OPERATING INCOME
(Dollars and shares in thousands, except per share data)
		For the Three Months Ended September 30, (Unaudited)								For the Nine Months Ended September 30, (Unaudited)
		2024				2023				2024				2023
Operating income, net of tax (1)		$	13,162			$	7,801			$	33,790			$	21,493
Net realized investment gains (losses)			(402	)			(101	)			429				(1,962	)
Net income		$	12,760			$	7,700			$	34,219			$	19,531
Weighted average shares outstanding – diluted			13,801				13,814				13,684				13,799
Operating income per share – diluted (2)		$	0.95			$	0.56			$	2.45			$	1.53
(1) Operating income, net of tax, excludes preferred shareholder distributions of $0.1 million for each of the three months ended September 30, 2024 and 2023 and $0.3 million for each of the nine months ended September 30, 2024 and 2023.
(2) The operating income per share calculation is net of preferred shareholder distributions of $0.1 million for each of the three months ended September 30, 2024 and 2023 and $0.3 million for each of the nine months ended September 30, 2024 and 2023.

Note Regarding Operating Income

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. 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.

For more information, visit the Company’s website at www.gbli.com.

Forward-Looking Information

The forward-looking statements contained in this press release³ 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. 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/20241105002086/en/

Stephen W. Ries

Head of Investor Relations

(610) 668-3270

sries@gbli.com

Source: Global Indemnity Group, LLC

FAQ

What was Global Indemnity's (GBLI) net income for Q3 2024?

Global Indemnity reported net income of $12.7 million or $0.92 per share for the third quarter of 2024.

How much did GBLI's investment income increase in the first nine months of 2024?

GBLI's investment income increased 18% to $46.3 million in the first nine months of 2024 compared to $39.4 million in 2023.

What was GBLI's book value per share as of September 30, 2024?

GBLI's book value per share was $49.88 as of September 30, 2024, up from $47.53 at December 31, 2023.

What was GBLI's combined ratio for the first nine months of 2024?

GBLI's combined ratio for the first nine months of 2024 was 95.2%, an improvement from 99.2% in the same period of 2023.