EX-99.1 2 d143741dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

PRESS RELEASE

 

For release:    March 1, 2016
Contact:    Media
   Stephen Ries
   Senior Corporate Counsel
   (610) 668-3270
   sries@global-indemnity.com

Global Indemnity plc Reports 2015 Financial Results.

Dublin, Ireland (March 1, 2016) – Global Indemnity plc (NASDAQ:GBLI) today reported net income for the year ended December 31, 2015 of $41.5 million or $1.69 per share. Operating income was $44.0 million for the year ended December 31, 2015. Excluding one-time costs associated with the acquisition of American Reliable Insurance Company (“American Reliable”), operating income was $49.4 million at December 31, 2015. As of December 31st, book value per share was $42.98, an increase of 19.9% compared to book value per share of $35.86 at December 31, 2014.

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

 

     For the Twelve Months
Ended December 31,
 
     2015      2014  

Gross Premiums Written

   $ 590.2       $ 291.3   

Net Premiums Written

   $ 501.2       $ 273.2   

Net income

   $ 41.5       $ 62.9   

Net income per share

   $ 1.69       $ 2.48   

Operating income

   $ 44.0       $ 43.2   

Operating income per share

   $ 1.80       $ 1.71   

Combined ratio analysis:

     

Loss ratio

     54.6         51.2   

Expense ratio

     39.9         40.8   
  

 

 

    

 

 

 

Combined ratio

     94.5         92.0   
  

 

 

    

 

 

 
     As of
December 31,
 
     2015      2014  

Book value per share

   $ 42.98       $ 35.86   

Shareholders’ equity

   $ 749.9       $ 908.3   

Cash and invested assets (1)

   $ 1,516.3       $ 1,611.8   

 

(1) Including receivable for securities sold
 

 

Cynthia Y. Valko, Chief Executive Officer, commented: “Gross written premiums for the year 2015 doubled compared to 2014 as a result of the acquisition of American Reliable in January 2015, and operating income, excluding acquisition costs related to the acquisition, was $49.4 million compared to $45.3 million for 2014. Both commercial and reinsurance had excellent results for 2015, and although American Reliable property suffered several fire catastrophes, the overall combined ratio was still good at 94.5%. Book value per share also grew 19.9%, aided by the share redemption executed in the fourth quarter. Overall, a very busy but successful year now that the integration of American Reliable is complete.”


About Global Indemnity plc and its subsidiaries

Global Indemnity plc (NASDAQ:GBLI), through its several direct and indirect wholly owned subsidiary insurance and reinsurance companies, provides both admitted and non-admitted specialty property and casualty insurance coverages and individual policyholder coverages in the United States, as well as reinsurance worldwide. Global Indemnity plc’s three primary segments are:

 

    United States Based Commercial Lines Operations

 

    United States Based Personal Lines Operations

 

    Bermuda Based Reinsurance Operations

For more information, visit the Global Indemnity plc website at http://www.globalindemnity.ie.

Forward-Looking Information

The forward-looking statements contained in this press release1 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. Factors that could cause actual results to differ materially from those contemplated in the forward-looking statements include, but are not limited to, the risk that there may be difficulties in the continued integration of American Reliable business, which could result in a failure to realize the potential benefits of the acquisition, and the risk that American Reliable’ s or Global Indemnity’s prospective insurance premiums, investment yield, or net earnings are less than anticipated (including as a result of unexpected events, competition, costs, charges or outlays whether as a consequence of the transaction or otherwise). The foregoing review of factors that could cause actual financial or operating performance to differ materially from expectations is not exhaustive. Please see Global Indemnity’s filings with the Securities and Exchange Commission for a discussion of additional risks and uncertainties which could impact the company and for a more detailed explication regarding forward-looking statements.

 

1 Disseminated pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.


Global Indemnity plc’s Combined Ratio for the Twelve Months Ended December 31, 2015

The combined ratio is a key measure of insurance profitability. The components comprising the combined ratio, by reportable business segment, for the twelve months ended December 31, 2015 are as follows:

 

     Commercial
Lines
     Personal
Lines
     Reinsurance
Operations
 

Loss Ratio

     48.9         64.8         26.8   

Expense Ratio

     41.7         39.2         36.7   
  

 

 

    

 

 

    

 

 

 

Combined Ratio

     90.6         104.0         63.5   
  

 

 

    

 

 

    

 

 

 

Loss Ratio:

Commercial Lines Operations:

The loss ratio for the Company’s Commercial Lines was 48.9% for 2015 compared with 55.7% for 2014. The loss ratio for the twelve months ended December 31, 2015 was lower than the comparable period in 2014 due to lower than expected claims severity experienced across multiple prior accident years in general liability, and better than anticipated claims frequency and severity in professional lines related to prior years. Current accident year results for 2015 were consistent with the same period in 2014.

Personal Lines Operations:

The Personal Lines are a new segment in 2015 resulting from the acquisition of American Reliable Insurance Company. The loss ratio for the Company’s Personal Lines was 64.8% for 2015. Losses for 2015 were higher than anticipated due to wild fires in California.

Reinsurance Operations:

The loss ratio for the Company’s Reinsurance Operations was 26.8% for 2015 compared with 34.8% for 2014. The improvement in the loss ratio for the twelve months ended December 31, 2015 was driven by less than anticipated case incurred emergence on property and legacy contracts related to prior years. Current accident year losses increased slightly compared to 2014 primarily due to slightly higher premium volume in professional lines, which generally has a higher loss ratio than property.

Expense ratio:

For the twelve months ended December 31st, the expense ratio improved 0.9 points from 40.8 in 2014 to 39.9 in 2015. The improvement in the expense ratio is primarily attributable to synergies realized as a result of the acquisition of American Reliable.


Global Indemnity plc’s Gross and Net Premiums Written Results by Segment

 

     Twelve Months Ended December 31,  
     Gross Premiums Written      Net Premiums Written  
     2015      2014      2015      2014  

Commercial Lines Operations

   $ 214,218       $ 229,978       $ 197,526       $ 212,965   

Personal Lines Operations

     326,282         —           254,035         —     

Reinsurance Operations

     49,733         61,275         49,683         60,216   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 590,233       $ 291,253       $ 501,244       $ 273,181   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross premiums written and net premiums written increased 102.7% and 83.5%, respectively, compared to the same period in 2014.

Commercial Lines Operations: For the twelve months ended December 31, 2015, gross premiums written and net premiums written decreased 6.9% and 7.2%, respectively, compared to the same period in 2014. The decline was the result of underwriting actions taken to improve profitability.

Personal Lines Operations: Personal lines is a new segment for the Company resulting from the acquisition of American Reliable during the first quarter of 2015.

Gross premiums written include $55.8 million of business that is currently written by American Reliable and is 100% ceded to insurance entities owned by the former parent. Net premiums written were $254.0 million for the twelve months ended December 31, 2015 compared to $255.2 million for the same period in 2014.

Reinsurance Operations: For the twelve months ended December 31, 2015, gross premiums written and net premiums written decreased 18.8% and 17.5%, respectively, compared to the same period in 2014. The decrease in gross and net premiums written is due to rate pressure experienced in the property catastrophe reinsurance marketplace.

###

Note: Tables Follow


GLOBAL INDEMNITY PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars and shares in thousands, except per share data)

 

     For the Three Months
Ended December 31,
    For the Twelve Months
Ended December 31,
 
     (Unaudited)            (Unaudited)        
     2015      2014     2015     2014  

Gross premiums written

   $ 130,701       $ 64,053      $ 590,233      $ 291,253   
  

 

 

    

 

 

   

 

 

   

 

 

 

Net premiums written

   $ 106,638       $ 60,686      $ 501,244      $ 273,181   
  

 

 

    

 

 

   

 

 

   

 

 

 

Net premiums earned

   $ 123,222       $ 66,930      $ 504,143      $ 268,519   

Net investment income

     8,375         6,333        34,609        28,821   

Net realized investment gains (losses)

     3,842         (4,366     (3,374     35,860   

Other income

     992         106        3,400        555   
  

 

 

    

 

 

   

 

 

   

 

 

 

Total revenues

     136,431         69,003        538,778        333,755   

Net losses and loss adjustment expenses

     48,498         24,065        275,368        137,561   

Acquisition costs and other underwriting expenses

     51,185         28,505        201,303        109,619   

Corporate and other operating expenses

     5,007         4,945        24,448        14,559   

Interest expense

     2,278         194        4,913        822   
  

 

 

    

 

 

   

 

 

   

 

 

 

Income before income taxes

     29,463         11,294        32,746        71,194   

Income tax expense (benefit)

     2,159         230        (8,723     8,338   
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income

   $ 27,304       $ 11,064      $ 41,469      $ 62,856   
  

 

 

    

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding–basic

     20,695         25,147        24,254        25,132   
  

 

 

    

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding–diluted

     20,957         25,353        24,506        25,331   
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income per share – basic

   $ 1.32       $ 0.44      $ 1.71      $ 2.50   
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income per share – diluted

   $ 1.30       $ 0.44      $ 1.69      $ 2.48   
  

 

 

    

 

 

   

 

 

   

 

 

 

Combined ratio analysis:

         

Loss ratio

     39.4         36.0        54.6        51.2   

Expense ratio

     41.5         42.6        39.9        40.8   
  

 

 

    

 

 

   

 

 

   

 

 

 

Combined ratio

     80.9         78.6        94.5        92.0   
  

 

 

    

 

 

   

 

 

   

 

 

 

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 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.


GLOBAL INDEMNITY PLC

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 

     (Unaudited)
December 31, 2015
    December 31, 2014  

ASSETS

    

Fixed Maturities:

    

Available for sale securities, at fair value (amortized cost: 2015 - $1,308,333 and 2014 - $1,272,948)

   $ 1,306,149      $ 1,283,475   

Equity securities:

    

Available for sale, at fair value (cost: 2015 - $100,157 and 2014 - $99,297)

     110,315        122,048   

Other invested assets:

    

Available for sale securities, at fair value (cost: 2015 - $30,059 and 2014 - $33,174)

     32,592        33,663   
  

 

 

   

 

 

 

Total investments

     1,449,056        1,439,186   

Cash and cash equivalents

     67,037        58,823   

Restricted cash

     —          113,696   

Premiums receivable, net

     89,245        56,586   

Reinsurance receivables, net

     115,594        125,718   

Funds held by ceding insurers

     16,037        25,176   

Deferred federal income taxes

     34,687        20,250   

Deferred acquisition costs

     56,517        25,238   

Intangible assets

     23,607        17,636   

Goodwill

     6,521        4,820   

Prepaid reinsurance premiums

     44,363        4,725   

Receivable for securities sold

     172        60   

Federal income taxes receivable

     4,828        3,139   

Other assets

     49,630        34,980   
  

 

 

   

 

 

 

Total assets

   $ 1,957,294      $ 1,930,033   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities:

    

Unpaid losses and loss adjustment expenses

   $ 680,047      $ 675,472   

Unearned premiums

     286,285        120,815   

Ceded balances payable

     4,589        2,800   

Contingent commissions

     11,069        12,985   

Debt

     172,034        174,673   

Other liabilities

     53,344        34,998   
  

 

 

   

 

 

 

Total liabilities

     1,207,368        1,021,743   
  

 

 

   

 

 

 

Shareholders’ equity:

    

Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 16,424,546 and 16,331,577 respectively; A ordinary shares outstanding: 13,313,751 and 13,266,762, respectively; B ordinary shares issued and outstanding: 4,133,366 and 12,061,370, respectively

     3        3   

Additional paid-in capital

     529,872        519,590   

Accumulated other comprehensive income, net of taxes

     4,078        23,384   

Retained earnings

     318,416        466,717   

A ordinary shares in treasury, at cost: 3,110,795 and 3,064,815 shares, respectively

     (102,443     (101,404
  

 

 

   

 

 

 

Total shareholders’ equity

     749,926        908,290   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 1,957,294      $ 1,930,033   
  

 

 

   

 

 

 


GLOBAL INDEMNITY PLC

SELECTED INVESTMENT DATA

(Dollars in millions)

 

     Market Value as of  
     (Unaudited)
December 31, 2015
     December 31, 2014  

Fixed maturities

   $ 1,306.1       $ 1,283.5   

Cash and cash equivalents

     67.0         172.5   
  

 

 

    

 

 

 

Total bonds and cash and cash equivalents

     1,373.1         1,456.0   

Equities and other invested assets

     143.0         155.7   
  

 

 

    

 

 

 

Total cash and invested assets, gross

     1,516.1         1,611.7   

Receivable for securities sold

     0.2         0.1   
  

 

 

    

 

 

 

Total cash and invested assets, net

   $ 1,516.3       $ 1,611.8   
  

 

 

    

 

 

 

 

     (Unaudited)
Twelve Months Ended
December 31, 2015 (a)
 

Net investment income

   $ 34.6   
  

 

 

 

Net realized investment losses

     (3.4

Net change in unrealized investment gains and losses

     (25.6
  

 

 

 

Net realized and unrealized investment returns

     (29.0
  

 

 

 

Total investment return

   $ 5.6   
  

 

 

 

Average total cash and invested assets

   $ 1,752.8   
  

 

 

 

Total investment return %

     0.3
  

 

 

 

 

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


GLOBAL INDEMNITY PLC

SUMMARY OF OPERATING INCOME

(Unaudited)

(Dollars and shares in thousands, except per share data)

 

     For the Three Months
Ended December 31,
    For the Twelve Months
Ended December 31,
 
     2015      2014     2015     2014  

Operating income

   $  24,596       $  14,574      $  44,026 (1)    $  43,194 (2) 

Adjustments:

         

Net realized investment gains/(losses), net of tax

     2,708         (3,510     (2,557     19,662   
  

 

 

    

 

 

   

 

 

   

 

 

 

Net income

   $ 27,304       $ 11,064      $ 41,469      $ 62,856   
  

 

 

    

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding – basic

     20,695         25,147        24,254        25,132   
  

 

 

    

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding – diluted

     20,957         25,353        24,506        25,331   
  

 

 

    

 

 

   

 

 

   

 

 

 

Operating income per share – basic

   $ 1.19       $ 0.58      $ 1.82      $ 1.72   
  

 

 

    

 

 

   

 

 

   

 

 

 

Operating income per share – diluted

   $ 1.17       $ 0.57      $ 1.80      $ 1.71   
  

 

 

    

 

 

   

 

 

   

 

 

 

 

(1) Excluding $5.4 million of acquisition expenses related to American Reliable Insurance Company, operating income would have been $49.4 million for the twelve months ended December 31, 2015.
(2) Excluding $2.1 million of acquisition expenses related to American Reliable Insurance Company, operating income would have been $45.3 million for the twelve months ended December 31, 2014.

Note Regarding Operating Income

Operating income, a non-GAAP financial measure, is equal to net income excluding after-tax net realized investment gains (losses). Operating income is not a substitute for net income determined in accordance with GAAP, and investors should not place undue reliance on this measure.