Ireland | 001-34809 | 98-0664891 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
Arthur Cox Building Earlsfort Terrace Dublin 2, Ireland |
None |
|
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits |
Global Indemnity plc |
||||
May 5, 2011 | By: | /s/ Thomas M. McGeehan | ||
Name: | Thomas M. McGeehan | |||
Title: | Chief Financial Officer |
Exhibit No. | Description | |
99.1
|
Press Release dated May 5, 2011. |
For release:
|
May 5, 2011 | |
Contact:
|
Media Linda Hohn Associate General Counsel (610) 660-6862 lhohn@global-indemnity.com |
For the Three Months | ||||||||
Ended March 31, | ||||||||
2011 | 2010 | |||||||
Gross Premiums Written |
$ | 87.7 | $ | 92.9 | ||||
Net Premiums Written |
$ | 83.1 | $ | 81.5 | ||||
Net income |
$ | 13.8 | $ | 18.9 | ||||
Net income per share |
$ | 0.45 | $ | 0.63 | ||||
Operating income |
$ | 5.0 | $ | 7.9 | ||||
Operating income per share |
$ | 0.17 | $ | 0.26 |
As of | As of | |||||||
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
Book value per share |
$ | 30.96 | $ | 30.59 | ||||
Shareholders equity |
$ | 941.4 | $ | 928.7 | ||||
Cash and invested assets |
$ | 1,739.3 | $ | 1,717.2 |
1
| United States Based Insurance Operations | ||
| Bermuda Based Reinsurance Operations |
2
Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Loss Ratio: |
||||||||
Current Accident Year |
||||||||
Excluding Catastrophes |
65.5 | 57.1 | ||||||
Catastrophes |
18.3 | 5.9 | ||||||
Current Accident Year |
83.8 | 63.0 | ||||||
Changes to Prior Accident Year |
(7.0 | ) | (4.0 | ) | ||||
Loss Ratio Calendar Year |
76.8 | 59.0 | ||||||
Expense Ratio |
39.3 | 42.6 | ||||||
Combined Ratio |
116.1 | 101.6 | ||||||
| Excluding catastrophes, the current accident year loss ratio increased by 8.4 points to 65.5 in 2011 from 57.1 in 2010. |
| Excluding catastrophes, the property loss ratio increased from 41.3 in the first quarter of 2010 to 53.0 in the first quarter of 2011. Severity from fire losses and a tornado contributed to the increase. Including catastrophes, the property loss ratio increased by 39.6 points to 95.9 in 2011 from 56.3 in 2010. This increase was driven primarily from catastrophe losses in our Reinsurance Operations including $3.0 million and $8.8 million related to earthquakes in New Zealand and Japan, respectively. | ||
| The casualty loss ratio increased 7.3 points to 74.7 in 2011 from 67.4 in 2010. The increase is attributable to changes in the mix of business from our Reinsurance Operations, a large loss in professional lines from a class of business that we are exiting, and increased loss trends in several of our casualty classes. |
| Current year results include a 7.0 point reduction in the loss ratio related to prior accident years. For 2011 we reduced prior accident years by $5.3 million primarily relating to general liability within our Insurance Operations for accident years 2004 through 2010, offset partially by an increase to prior accident year 2010 at our Reinsurance Operations within the general liability, auto liability and workers compensation lines. |
| The expense ratio decreased from 42.6 in 2010 to 39.3 in 2011 primarily due to lower employee costs from our previously disclosed Profit Enhancement Initiative and a decrease in contingent commissions related to increases in loss ratios described above. | ||
| Corporate expenses also decreased $2.1 million on a quarter over quarter basis. The decrease is due to completing the redomestication to Ireland and the Profit Enhancement Initiative. |
3
Three Months Ended March 31, | ||||||||||||||||
Gross Premiums Written | Net Premiums Written | |||||||||||||||
(Dollars in thousands) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Insurance Operations |
$ | 56,467 | $ | 54,071 | $ | 52,411 | $ | 43,478 | ||||||||
Reinsurance Operations |
31,199 | 38,782 | 30,697 | 38,003 | ||||||||||||
Total |
$ | 87,666 | $ | 92,853 | $ | 83,108 | $ | 81,481 | ||||||||
4
For the Three Months | ||||||||
Ended March 31, | ||||||||
2011 | 2010 | |||||||
Gross premiums written |
$ | 87,666 | $ | 92,853 | ||||
Net premiums written |
$ | 83,108 | $ | 81,481 | ||||
Net premiums earned |
$ | 75,969 | $ | 70,788 | ||||
Investment income, net |
14,414 | 14,579 | ||||||
Net realized investment gains |
11,997 | 14,204 | ||||||
Other income |
11,669 | | ||||||
Total revenues |
114,049 | 99,571 | ||||||
Net losses and loss adjustment expenses |
58,342 | 41,789 | ||||||
Acquisition costs and other underwriting expenses |
29,852 | 30,148 | ||||||
Corporate and other operating expenses |
2,780 | 4,896 | ||||||
Interest expense |
1,752 | 1,739 | ||||||
Income before income taxes |
21,323 | 20,999 | ||||||
Income tax expense |
7,591 | 2,069 | ||||||
Net income before equity in net income (loss) of partnership |
13,732 | 18,930 | ||||||
Equity in net income (loss) of partnership, net of tax |
53 | (29 | ) | |||||
Net income |
$ | 13,785 | $ | 18,901 | ||||
Weighted average shares outstandingbasic (1) |
30,301 | 30,185 | ||||||
Weighted average shares outstandingdiluted (1) |
30,338 | 30,204 | ||||||
Net income per share basic (1) |
$ | 0.45 | $ | 0.63 | ||||
Net income per share diluted (1) |
$ | 0.45 | $ | 0.63 | ||||
Combined ratio analysis: (2) |
||||||||
Loss ratio |
76.8 | 59.0 | ||||||
Expense ratio |
39.3 | 42.6 | ||||||
Combined ratio |
116.1 | 101.6 | ||||||
(1) | Shares outstanding and per share amounts for 2010 have been restated to reflect the 1-for-2 stock exchange effective July 2, 2010 when the Company completed its redomestication to Ireland. | |
(2) | The loss ratio, expense ratio and combined ratio are non-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. |
5
As of | As of | |||||||
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
ASSETS |
||||||||
Fixed Maturities: |
||||||||
Available for sale securities, at fair value
(amortized cost: 2011 $1,414,836 and 2010 $1,393,655) |
$ | 1,457,717 | $ | 1,444,392 | ||||
Preferred shares: |
||||||||
Available for sale securities, at fair value
(cost: 2011 $930 and 2010 $930) |
2,346 | 2,252 | ||||||
Common shares: |
||||||||
Available for sale securities, at fair value
(cost: 2011 $126,691 and 2010 $120,674) |
154,325 | 145,274 | ||||||
Other invested assets: |
||||||||
Available for sale securities, at fair value
(cost: 2011 $14,126 and 2010 $4,255) |
16,724 | 4,268 | ||||||
Securities classified as trading, at fair value
(cost: 2011 $0 and 2010 $1,112) |
| 1,112 | ||||||
Total investments |
1,631,112 | 1,597,298 | ||||||
Cash and cash equivalents |
108,170 | 119,888 | ||||||
Accounts receivable, net |
68,097 | 56,657 | ||||||
Reinsurance receivables |
390,574 | 422,844 | ||||||
Deferred federal income taxes |
8,044 | 6,926 | ||||||
Deferred acquisition costs |
38,037 | 35,344 | ||||||
Goodwill |
4,820 | 4,820 | ||||||
Intangible assets |
18,987 | 19,082 | ||||||
Prepaid reinsurance premiums |
8,046 | 11,104 | ||||||
Other assets |
25,911 | 20,720 | ||||||
Total assets |
$ | 2,301,798 | $ | 2,294,683 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Liabilities: |
||||||||
Unpaid losses and loss adjustment expenses |
$ | 1,035,088 | $ | 1,052,743 | ||||
Unearned premiums |
139,957 | 135,872 | ||||||
Federal income taxes payable |
8,128 | 55 | ||||||
Ceded balances payable |
9,531 | 12,376 | ||||||
Contingent commissions |
4,819 | 9,260 | ||||||
Notes and debentures payable |
121,214 | 121,285 | ||||||
Payable for securities |
10,916 | 4,768 | ||||||
Other liabilities |
30,780 | 29,655 | ||||||
Total liabilities |
1,360,433 | 1,366,014 | ||||||
Shareholders equity: |
||||||||
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; Class A ordinary shares issued: 21,388,550
and 21,340,821 respectively; Class A ordinary shares outstanding: 18,341,910 and 18,300,544, respectively; Class B
ordinary shares issued and outstanding: 12,061,370 and 12,061,370, respectively |
3 | 3 | ||||||
Additional paid-in capital |
623,181 | 622,725 | ||||||
Accumulated other comprehensive income |
55,787 | 57,211 | ||||||
Class A ordinary shares in treasury, at cost: 3,046,640 and 3,040,277 shares, respectively |
(101,033 | ) | (100,912 | ) | ||||
Retained earnings |
363,427 | 349,642 | ||||||
Total shareholders equity |
941,365 | 928,669 | ||||||
Total liabilities and shareholders equity |
$ | 2,301,798 | $ | 2,294,683 | ||||
6
Market Value as of | ||||||||
March 31, | Dec 31, | |||||||
2011 | 2010 | |||||||
Fixed Maturities |
$ | 1,457.7 | $ | 1,444.4 | ||||
Cash and cash equivalents |
108.2 | 119.9 | ||||||
Total bonds and cash and cash equivalents |
1,565.9 | 1,564.3 | ||||||
Equities and other invested assets |
173.4 | 152.9 | ||||||
Total cash and invested assets |
$ | 1,739.3 | $ | 1,717.2 | ||||
Three Months Ended | ||||
March 31, 2011 (a) | ||||
Net investment income |
$ | 12.5 | ||
Net realized investment gains |
8.8 | |||
Net unrealized investment losses |
(1.4 | ) | ||
Net realized and unrealized investment returns |
7.4 | |||
Total investment return |
$ | 19.9 | ||
Average total cash and invested assets (b) |
$ | 1,720.4 | ||
Total investment return % annualized |
4.6 | % |
(a) | Amounts in this table are shown on an after-tax basis. | |
(b) | Simple average of beginning and end of period, net of payable for securities. |
7
For the Three Months | ||||||||
Ended March 31, | ||||||||
2011 | 2010 | |||||||
Operating income |
$ | 5,030 | $ | 7,908 | ||||
Adjustments: |
||||||||
Net realized investment gains, net of tax |
8,755 | 10,993 | ||||||
Total after-tax adjustments |
8,755 | 10,993 | ||||||
Net income |
$ | 13,785 | $ | 18,901 | ||||
Weighted average shares outstanding basic (1) |
30,301 | 30,185 | ||||||
Weighted average shares outstanding diluted (1) |
30,338 | 30,204 | ||||||
Operating income per share basic (1) |
$ | 0.17 | $ | 0.26 | ||||
Operating income per share diluted (1) |
$ | 0.17 | $ | 0.26 | ||||
(1) | Shares outstanding and per share amounts for 2010 have been restated to reflect the 1-for-2 stock exchange effective July 2, 2010 when the Company completed its redomestication to Ireland. |
8
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