EX-99.1 2 d230704dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

PRESS RELEASE

 

For release:    August 4, 2016
Contact:    Media
   Stephen Ries
   Senior Corporate Counsel
   (610) 668-3270
   sries@global-indemnity.com

Global Indemnity plc Reports Second Quarter 2016 Financial Results.

Dublin, Ireland (August 4, 2016) – Global Indemnity plc (NASDAQ:GBLI) today reported net income for the six months ended June 30, 2016 of $2.0 million or $0.11 per share and operating income of $9.1 million or $0.52 per share. As of June 30th, book value per share was $43.91, an increase of 2.2% compared to book value per share of $42.98 at December 31, 2015.

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

 

     For the Six Months
Ended June 30,
 
     2016      2015  

Gross Premiums Written

   $ 295.7       $ 309.4   

Net Premiums Written

   $ 242.2       $ 272.1   

Net income

   $ 2.0       $ 17.9   

Net income per share

   $ 0.11       $ 0.70   

Operating income

   $ 9.1       $ 15.7   

Operating income per share

   $ 0.52       $ 0.61   

Combined ratio analysis:

     

Loss ratio

     59.7         58.2   

Expense ratio (1)

     42.0         38.7   
  

 

 

    

 

 

 

Combined ratio

     101.7         96.9   
  

 

 

    

 

 

 

 

    

As of

June 30,

     As of
December 31,
 
     2016      2015  

Book value per share

   $ 43.91       $ 42.98   

Shareholders’ equity

   $ 770.7       $ 749.9   

Cash and invested assets(2)

   $ 1,533.0       $ 1,516.3   

 

(2) Including receivable/(payable) for securities sold/(purchased)
 

 

(1) The expense ratio in 2016 was approximately 1.5 points higher in 2016 primarily due to purchasing additional catastrophe reinsurance, while the 2015 ratio benefitted approximately 1.7 points from a purchase accounting adjustment. Excluding these factors, the expense ratio was consistent year-over-year.


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 Section 21E of the Security Exchange Act of 1934.


Global Indemnity plc’s Combined Ratio for the Six Months Ended June 30, 2016

The combined ratio is a key measure of insurance profitability. The components comprising the combined ratio, by reportable business segment, for the six months ended June 30, 2016 are as follows:

 

     Commercial
Lines
     Personal
Lines
     Reinsurance
Operations
 

Loss Ratio

     57.3         65.0         39.4   

Expense Ratio

     41.2         43.4         37.7   
  

 

 

    

 

 

    

 

 

 

Combined Ratio

     98.5         108.4         77.1   
  

 

 

    

 

 

    

 

 

 

Loss Ratio:

Commercial Lines Operations:

The calendar year loss ratio for the Company’s Commercial Lines was 57.3% for 2016 compared with 59.4% for 2015, an improvement of 2.1 points. The improvement was primarily due to lower than expected claims severity experienced across multiple prior accident years, primarily in liability lines. The current accident year loss ratio increased 5.2 points from 65.0% in 2015 to 70.2% in 2016 primarily due to catastrophes.

Personal Lines Operations:

The 2016 loss ratio was 65.0%, compared to 62.7% for the comparable period of 2015, primarily due to an increase in catastrophe losses. There were no adjustments to prior accident years for 2016 or 2015.

Reinsurance Operations:

The loss ratio for the Company’s Reinsurance Operations was 39.4% for 2016 compared with 31.8% for 2015. The current accident year loss ratio increased 11.2 points from 43.3% for the six months ended June 30, 2015 to 54.5% for the six months ended June 30, 2016, primarily due to catastrophic events in the second quarter of 2016. The improvement in the loss ratio related to prior years was driven by less than anticipated case incurred emergence on property catastrophe treaties.

Expense ratio:

For the six months ended June 30, the total expense ratio increased from 38.7% in 2015 to 42.0% in 2016. 1.7% of the increase is due to acquisition accounting adjustments related to the purchase of American Reliable Insurance Company in 2015. The remainder of the increase in the 2016 expense ratio was primarily due to a reduction in earned premium as a result of the Company reducing catastrophe exposure and purchasing additional reinsurance.


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

 

     Six Months Ended June 30,  
     Gross Premiums Written      Net Premiums Written  
     2016      2015      2016      2015  

Commercial Lines Operations

   $ 107,121       $ 108,826       $ 96,010       $ 100,322   

Personal Lines Operations

     163,421         162,215         121,043         133,483   

Reinsurance Operations

     25,143         38,343         25,129         38,304   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 295,685       $ 309,384       $ 242,182       $ 272,109   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross premiums written and net premiums written decreased 4.4% and 11.0%, respectively, compared to the same period in 2015.

Commercial Lines Operations: For the six months ended June 30, 2016, gross premiums written and net premiums written decreased 1.6% and 4.3%, respectively, compared to the same period in 2015. The reduction in net premiums written was primarily due to purchasing additional reinsurance to reduce catastrophe exposure.

Personal Lines Operations: For the six months ended June 30, 2016, gross premiums written increased 0.7% and net premiums written decreased 9.3% compared to the same period in 2015. The reduction in net premiums written is due to purchasing additional reinsurance to reduce catastrophe exposure.

Reinsurance Operations: For the six months ended June 30, 2016, gross premiums written and net premiums written both decreased 34.4% compared to the same period in 2015. This decrease is mainly due to a treaty being non-renewed in 2016 in an effort to reduce catastrophe exposure. In addition, the property catastrophe reinsurance marketplace continues to be very competitive due to excess capital.

###

Note: Tables Follow


GLOBAL INDEMNITY PLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

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

 

     For the Three Months
Ended June 30,
    For the Six Months
Ended June 30,
 
     2016     2015     2016     2015  

Gross premiums written

   $ 154,319      $ 166,515      $ 295,685      $ 309,384   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net premiums written

   $ 125,310      $ 146,005      $ 242,182      $ 272,109   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net premiums earned

   $ 117,804      $ 128,877      $ 239,440      $ 256,214   

Net investment income

     6,562        9,141        16,308        17,382   

Net realized investment gains (losses)

     (3,492     6,532        (10,985     3,562   

Other income

     795        577        1,751        1,129   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     121,669        145,127        246,514        278,287   

Net losses and loss adjustment expenses

     78,111        79,560        142,895        149,179   

Acquisition costs and other underwriting expenses

     48,542        50,926        100,632        99,184   

Corporate and other operating expenses

     4,255        4,334        8,058        15,874   

Interest expense

     2,229        535        4,444        1,040   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     (11,468     9,772        (9,515     13,010   

Income tax benefit

     (6,303     (1,345     (11,475     (4,901
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ (5,165   $ 11,117      $ 1,960      $ 17,911   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding–basic

     17,244        25,455        17,234        25,447   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding–diluted (1)

     17,244        25,681        17,485        25,660   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share – basic

   $ (0.30   $ 0.44      $ 0.11      $ 0.70   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share – diluted

   $ (0.30   $ 0.43      $ 0.11      $ 0.70   
  

 

 

   

 

 

   

 

 

   

 

 

 

Combined ratio analysis (2):

        

Loss ratio

     66.3        61.7        59.7        58.2   

Expense ratio

     41.2        39.5        42.0        38.7   
  

 

 

   

 

 

   

 

 

   

 

 

 

Combined ratio

     107.5        101.2        101.7        96.9   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) For the quarter ended June 30, 2016, diluted loss per share is the same as basic loss per share since there was a net loss for the period.
(2) 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)
June 30, 2016
    December 31, 2015  

ASSETS

    

Fixed Maturities:

    

Available for sale securities, at fair value (amortized cost: 2016 - $1,292,785 and 2015 - $1,308,333)

   $ 1,306,955      $ 1,306,149   

Equity securities:

    

Available for sale, at fair value (cost: 2016 - $101,867 and 2015 - $100,157)

     119,008        110,315   

Other invested assets

     35,798        32,592   
  

 

 

   

 

 

 

Total investments

     1,461,761        1,449,056   

Cash and cash equivalents

     70,647        67,037   

Premiums receivable, net

     90,275        89,245   

Reinsurance receivables, net

     115,365        115,594   

Funds held by ceding insurers

     19,927        16,037   

Federal income taxes receivable

     4,840        4,828   

Deferred federal income taxes

     41,028        34,687   

Deferred acquisition costs

     56,051        56,517   

Intangible assets

     23,342        23,607   

Goodwill

     6,521        6,521   

Prepaid reinsurance premiums

     49,763        44,363   

Receivable for securities sold

     561        172   

Other assets

     66,013        49,630   
  

 

 

   

 

 

 

Total assets

   $ 2,006,094      $ 1,957,294   
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Liabilities:

    

Unpaid losses and loss adjustment expenses

   $ 683,850      $ 680,047   

Unearned premiums

     294,426        286,285   

Ceded balances payable

     12,386        4,589   

Contingent commissions

     9,498        11,069   

Debt

     174,211        172,034   

Other liabilities

     60,974        53,344   
  

 

 

   

 

 

 

Total liabilities

     1,235,345        1,207,368   
  

 

 

   

 

 

 

Shareholders’ equity:

    

Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 16,559,872 and 16,424,546 respectively; A ordinary shares outstanding: 13,420,978 and 13,313,751, respectively; B ordinary shares issued and outstanding: 4,133,366 and 4,133,366, respectively

     3        3   

Additional paid-in capital

     531,542        529,872   

Accumulated other comprehensive income, net of taxes

     22,076        4,078   

Retained earnings

     320,376        318,416   

A ordinary shares in treasury, at cost: 3,138,894 and 3,110,795 shares, respectively

     (103,248     (102,443
  

 

 

   

 

 

 

Total shareholders’ equity

     770,749        749,926   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 2,006,094      $ 1,957,294   
  

 

 

   

 

 

 


GLOBAL INDEMNITY PLC

SELECTED INVESTMENT DATA

(Dollars in millions)

 

     Market Value as of  
     (Unaudited)
June 30, 2016
     December 31, 2015  

Fixed maturities

   $ 1,307.0       $ 1,306.1   

Cash and cash equivalents

     70.6         67.0   
  

 

 

    

 

 

 

Total bonds and cash and cash equivalents

     1,377.6         1,373.1   

Equities and other invested assets

     154.8         143.0   
  

 

 

    

 

 

 

Total cash and invested assets, gross

     1,532.4         1,516.1   

Receivable/(payable) for securities sold (purchased)

     0.6         0.2   
  

 

 

    

 

 

 

Total cash and invested assets, net

   $ 1,533.0       $ 1,516.3   
  

 

 

    

 

 

 

 

     (Unaudited)
Three Months Ended
June 30, 2016 (a)
    (Unaudited)
Six Months Ended
June 30, 2016 (a)
 

Net investment income

   $ 6.6      $ 16.3   
  

 

 

   

 

 

 

Net realized investment losses

     (3.5     (11.0

Net change in unrealized investment gains

     11.5        23.3   
  

 

 

   

 

 

 

Net realized and unrealized investment returns

     8.0        12.3   
  

 

 

   

 

 

 

Total investment return

   $ 14.6      $ 28.6   
  

 

 

   

 

 

 

Average total cash and invested assets

   $ 1,519.6      $ 1,524.6   
  

 

 

   

 

 

 

Total investment return % annualized

     3.8     3.8
  

 

 

   

 

 

 

 

(a) Amounts in this table are shown on a pre-tax basis.
(b) Simple average of beginning and end of period, net of payable/receivable for securities.


GLOBAL INDEMNITY PLC

SUMMARY OF OPERATING INCOME (LOSS)

(Unaudited)

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

 

     For the Three Months
Ended June 30,
     For the Six Months
Ended June 30,
 
     2016     2015      2016     2015  

Operating income (loss)

   $ (2,915   $ 6,913       $ 9,076      $ 15,731   

Adjustments:

         

Net realized investment gains (losses), net of tax

     (2,250     4,204         (7,116     2,180   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income (loss)

   $ (5,165   $ 11,117       $ 1,960      $ 17,911   
  

 

 

   

 

 

    

 

 

   

 

 

 

Weighted average shares outstanding – basic

     17,244        25,455         17,234        25,447   
  

 

 

   

 

 

    

 

 

   

 

 

 

Weighted average shares outstanding – diluted (1)

     17,244        25,681         17,485        25,660   
  

 

 

   

 

 

    

 

 

   

 

 

 

Operating income (loss) per share – basic

   $ (0.17   $ 0.27       $ 0.53      $ 0.62   
  

 

 

   

 

 

    

 

 

   

 

 

 

Operating income (loss) per share – diluted

   $ (0.17   $ 0.27       $ 0.52      $ 0.61   
  

 

 

   

 

 

    

 

 

   

 

 

 

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.

 

(1) For the quarter ended June 30, 2016, diluted loss per share is the same as basic loss per share since there was a net loss for the period.