UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Transition Period from to
Commission File Number
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive office including zip code)
Registrant's telephone number, including area code: (
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that registrant was required to submit such files.).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol |
Name of each exchange on which registered |
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As of July 28, 2020, the registrant had outstanding
TABLE OF CONTENTS
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Item 1. |
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3 |
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Consolidated Balance Sheets |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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49 |
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Item 3. |
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70 |
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Item 4. |
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70 |
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Item 1. |
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71 |
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Item 1A. |
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71 |
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Item 2. |
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71 |
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Item 3. |
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71 |
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Item 4. |
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71 |
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Item 5. |
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71 |
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Item 6. |
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72 |
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73 |
2
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
GLOBAL INDEMNITY LIMITED
Consolidated Balance Sheets
(In thousands, except share amounts)
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(Unaudited) June 30, 2020 |
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December 31, 2019 |
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ASSETS |
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Fixed maturities: |
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Available for sale, at fair value (amortized cost: $ |
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$ |
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$ |
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Equity securities, at fair value |
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Other invested assets |
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Total investments |
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Cash and cash equivalents |
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Premiums receivable, net of allowance for credit losses of $ |
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Reinsurance receivables, net of allowance for credit losses of $ |
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Funds held by ceding insurers |
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Federal income taxes receivable |
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Deferred federal income taxes |
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Deferred acquisition costs |
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Intangible assets |
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Goodwill |
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Prepaid reinsurance premiums |
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Receivable for securities sold |
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— |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Liabilities: |
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Unpaid losses and loss adjustment expenses |
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$ |
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$ |
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Unearned premiums |
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Ceded balances payable |
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Payable for securities purchased |
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Contingent commissions |
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Debt |
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Other liabilities |
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Total liabilities |
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Commitments and contingencies (Note 11) |
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Shareholders’ equity: |
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Ordinary shares, $ |
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Additional paid-in capital |
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Accumulated other comprehensive income, net of taxes |
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Retained earnings |
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A ordinary shares in treasury, at cost: |
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Total shareholders’ equity |
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Total liabilities and shareholders’ equity |
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$ |
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$ |
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See accompanying notes to consolidated financial statements.
3
GLOBAL INDEMNITY LIMITED
Consolidated Statements of Operations
(In thousands, except shares and per share data)
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(Unaudited) Quarters Ended June 30, |
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(Unaudited) Six Months Ended June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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Revenues: |
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Gross written premiums |
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$ |
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$ |
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$ |
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$ |
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Net written premiums |
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$ |
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$ |
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$ |
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$ |
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Net earned premiums |
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$ |
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$ |
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$ |
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$ |
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Net investment income (loss) |
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( |
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Net realized investment gains (losses): |
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Other than temporary impairment losses on investments |
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( |
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Other net realized investment gains (losses) |
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Total net realized investment gains (losses) |
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Other income |
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Total revenues |
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Losses and Expenses: |
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Net losses and loss adjustment expenses |
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Acquisition costs and other underwriting expenses |
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Corporate and other operating expenses |
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Interest expense |
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Income (loss) before income taxes |
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( |
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Income tax expense (benefit) |
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( |
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Net income (loss) |
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$ |
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$ |
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$ |
( |
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$ |
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Per share data: |
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Net income (loss) (1) |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted-average number of shares outstanding |
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Basic |
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Diluted |
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Cash dividends declared per share |
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$ |
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$ |
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$ |
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$ |
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(1) |
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See accompanying notes to consolidated financial statements.
4
GLOBAL INDEMNITY LIMITED
Consolidated Statements of Comprehensive Income
(In thousands)
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(Unaudited) Quarters Ended June 30, |
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(Unaudited) Six Months Ended June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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Net income (loss) |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income, net of tax: |
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Unrealized holding gain |
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Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) |
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Reclassification adjustment for gains included in net income (loss) |
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( |
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( |
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( |
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Unrealized foreign currency translation gain (loss) |
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( |
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Other comprehensive income, net of tax |
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Comprehensive income, net of tax |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes to consolidated financial statements.
5
GLOBAL INDEMNITY LIMITED
Consolidated Statements of Changes in Shareholders’ Equity
(In thousands, except share amounts)
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(Unaudited) Quarters Ended June 30, |
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(Unaudited) Six Months Ended June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
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Number of A ordinary shares issued: |
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Number at beginning of period |
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Ordinary shares issued / (forfeited) under share incentive plans |
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Ordinary shares issued to directors |
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Number at end of period |
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Number of B ordinary shares issued: |
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Number at beginning and end of period |
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Par value of A ordinary shares: |
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Number at beginning and end of period |
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$ |
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$ |
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$ |
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$ |
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Par value of B ordinary shares: |
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Balance at beginning and end of period |
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$ |
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$ |
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$ |
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$ |
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Additional paid-in capital: |
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Balance at beginning of period |
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$ |
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$ |
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$ |
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$ |
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Share compensation plans |
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Balance at end of period |
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$ |
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$ |
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$ |
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$ |
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Accumulated other comprehensive income, net of deferred income tax: |
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Balance at beginning of period |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive income: |
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Change in unrealized holding gains |
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Change in other than temporary impairment losses recognized in other comprehensive income |
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( |
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( |
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Unrealized foreign currency translation gains (losses) |
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( |
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( |
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Other comprehensive income |
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Balance at end of period |
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$ |
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$ |
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$ |
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$ |
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Retained earnings: |
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Balance at beginning of period |
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$ |
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$ |
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$ |
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$ |
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Cumulative effect adjustment resulting from adoption of new accounting guidance |
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( |
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Net income (loss) |
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( |
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Dividends to shareholders ($ |
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( |
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( |
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( |
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( |
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Balance at end of period |
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$ |
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$ |
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$ |
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$ |
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Number of treasury shares: |
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Number at beginning of period |
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A ordinary shares purchased |
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Retirement of shares |
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Number at end of period |
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Treasury shares, at cost: |
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Balance at beginning of period |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
) |
A ordinary shares purchased, at cost |
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|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
Balance at end of period |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Total shareholders’ equity |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
See accompanying notes to consolidated financial statements.
6
GLOBAL INDEMNITY LIMITED
Consolidated Statements of Cash Flows
(In thousands)
|
|
(Unaudited) Six Months Ended June 30, |
|
|||||
|
|
2020 |
|
|
2019 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
( |
) |
|
$ |
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: |
|
|
|
|
|
|
|
|
Amortization and depreciation |
|
|
|
|
|
|
|
|
Amortization of debt issuance costs |
|
|
|
|
|
|
|
|
Restricted stock and stock option expense |
|
|
|
|
|
|
|
|
Deferred federal income taxes |
|
|
( |
) |
|
|
|
|
Amortization of bond premium and discount, net |
|
|
|
|
|
|
|
|
Net realized investment (gains) loss |
|
|
|
|
|
|
( |
) |
Equity in the earnings of equity method limited liability investments |
|
|
|
|
|
|
|
|
Changes in: |
|
|
|
|
|
|
|
|
Premiums receivable, net |
|
|
( |
) |
|
|
( |
) |
Reinsurance receivables, net |
|
|
( |
) |
|
|
|
|
Funds held by ceding insurers |
|
|
|
|
|
|
|
|
Unpaid losses and loss adjustment expenses |
|
|
|
|
|
|
( |
) |
Unearned premiums |
|
|
( |
) |
|
|
|
|
Ceded balances payable |
|
|
|
|
|
|
|
|
Other assets and liabilities, net |
|
|
|
|
|
|
( |
) |
Contingent commissions |
|
|
( |
) |
|
|
( |
) |
Federal income tax receivable/payable |
|
|
|
|
|
|
( |
) |
Deferred acquisition costs, net |
|
|
|
|
|
|
( |
) |
Prepaid reinsurance premiums |
|
|
|
|
|
|
|
|
Net cash provided by (used for) operating activities |
|
|
|
|
|
|
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Proceeds from sale of fixed maturities |
|
|
|
|
|
|
|
|
Proceeds from sale of equity securities |
|
|
|
|
|
|
|
|
Proceeds from maturity of fixed maturities |
|
|
|
|
|
|
|
|
Proceeds from other invested assets |
|
|
|
|
|
|
|
|
Amounts paid in connection with derivatives |
|
|
( |
) |
|
|
( |
) |
Purchases of fixed maturities |
|
|
( |
) |
|
|
( |
) |
Purchases of equity securities |
|
|
( |
) |
|
|
( |
) |
Purchases of other invested assets |
|
|
( |
) |
|
|
( |
) |
Net cash used for investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Net borrowings (repayments) under margin borrowing facility |
|
|
|
|
|
|
|
|
Dividends paid to shareholders |
|
|
( |
) |
|
|
( |
) |
Purchases of A ordinary shares |
|
|
( |
) |
|
|
( |
) |
Net cash used for financing activities |
|
|
( |
) |
|
|
( |
) |
Net change in cash and cash equivalents |
|
|
|
|
|
|
( |
) |
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
|
|
|
$ |
|
|
See accompanying notes to consolidated financial statements.
7
GLOBAL INDEMNITY LIMITED
1. |
Principles of Consolidation and Basis of Presentation |
Global Indemnity Limited (“Global Indemnity” or “the Company”) was incorporated on
The Company manages its business through
The interim consolidated financial statements are unaudited, but have been prepared in conformity with United States of America generally accepted accounting principles (“GAAP”), which differs in certain respects from those principles followed in reports to insurance regulatory authorities. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The unaudited consolidated financial statements include all adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair statement of results for the interim periods. Results of operations for the quarters and six months ended June 30, 2020 and 2019 are not necessarily indicative of the results of a full year. The accompanying notes to the unaudited consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements contained in the Company’s 2019 Annual Report on Form 10-K.
The consolidated financial statements include the accounts of Global Indemnity and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
2.Proposed Redomestication
On
8
GLOBAL INDEMNITY LIMITED
and approve the redomestication plan. The preliminary proxy was filed on
If the Company’s shareholders approve the redomestication plan at the
If approved by its shareholders and regulatory approval is received, the Company anticipates that the redomestication will close on or around 12:01am (Eastern Time) on
The Company does not expect a material impact to its financial position as a result of the proposed redomestication.
3. |
Investments |
The Company implemented new accounting guidance on January 1, 2020 related to the measurement of credit losses on financial instruments. For financial assets held at amortized cost basis, the new guidance requires a forward-looking methodology for in-scope financial assets that reflects expected credit losses and requires consideration of a broader range of information for credit loss estimates, including historical experience, current economic conditions and supportable forecasts that affect the collectability of the financial asset. For available for sale debt securities, credit losses are still measured similar to the old guidance; however, the new guidance requires that credit losses be presented as an allowance rather than as a write-down of the amortized cost basis of the impaired security and allows for the reversal of credit losses in the current period net income. Any impairments related to factors other than credit losses continue to be recorded through other comprehensive income, net of taxes.
The Company elected the practical expedient to exclude accrued interest from both the fair value and the amortized cost basis of the available for sale debt securities for the purposes of identifying and measuring an impairment and to not measure an allowance for credit losses for accrued interest receivables. Accrued interest receivable is written off through net realized investment gains (losses) at the time the issuer of the bond defaults or is expected to default on payment. The Company made an accounting policy election to present the accrued interest receivable balance with other assets on the Company’s consolidated statements of financial position. Accrued interest receivable was $
The amortized cost and estimated fair value of the Company’s fixed maturities securities were as follows as of June 30, 2020 and December 31, 2019:
9
GLOBAL INDEMNITY LIMITED
(Dollars in thousands) |
|
Amortized Cost |
|
|
Allowance for Credit Losses |
|
|
Gross Unrealized Gains |
|
|
Gross Unrealized Losses |
|
|
Estimated Fair Value |
|
|||||
As of June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and agency obligations |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Obligations of states and political subdivisions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Asset-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Commercial mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Corporate bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Foreign corporate bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Total fixed maturities |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
(Dollars in thousands) |
|
Amortized Cost |
|
|
Gross Unrealized Gains |
|
|
Gross Unrealized Losses |
|
|
Estimated Fair Value |
|
||||
As of December 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and agency obligations |
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Obligations of states and political subdivisions |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Asset-backed securities |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Commercial mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Corporate bonds |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Foreign corporate bonds |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Total fixed maturities |
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
As of June 30, 2020 and December 31, 2019, the Company’s investments in equity securities consist of the following:
(Dollars in thousands) |
|
June 30, 2020 |
|
|
December 31, 2019 |
|
||
Common stock |
|
$ |
|
|
|
$ |
|
|
Preferred stock |
|
|
|
|
|
|
|
|
Index funds that invest in fixed maturities |
|
|
|
|
|
|
|
|
Index funds that invest in common stock |
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
|
$ |
|
|
As of June 30, 2020 and December 31, 2019, the Company held Fannie Mae mortgage pools that totaled as much as
10
GLOBAL INDEMNITY LIMITED
The amortized cost and estimated fair value of the Company’s fixed maturities portfolio classified as available for sale at June 30, 2020, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
(Dollars in thousands) |
|
Amortized Cost |
|
|
Estimated Fair Value |
|
||
Due in one year or less |
|
$ |
|
|
|
$ |
|
|
Due in one year through five years |
|
|
|
|
|
|
|
|
Due in five years through ten years |
|
|
|
|
|
|
|
|
Due in ten years through fifteen years |
|
|
|
|
|
|
|
|
Due after fifteen years |
|
|
|
|
|
|
|
|
Mortgage-backed securities |
|
|
|
|
|
|
|
|
Asset-backed securities |
|
|
|
|
|
|
|
|
Commercial mortgage-backed securities |
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
|
$ |
|
|
The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses that are not deemed to have credit losses, categorized by the period that the securities were in a continuous loss position as of June 30, 2020. The fair value amounts reported in the table are estimates that are prepared using the process described in Note 5 of the notes to the consolidated financial statements in Item 1 of Part I of this report:
|
|
Less than 12 months |
|
|
12 months or longer |
|
|
Total (1) |
|
|||||||||||||||
(Dollars in thousands) |
|
Fair Value |
|
|
Gross Unrealized Losses |
|
|
Fair Value |
|
|
Gross Unrealized Losses |
|
|
Fair Value |
|
|
Gross Unrealized Losses |
|
||||||
Fixed maturities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and agency obligations |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
Obligations of states and political subdivisions |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Mortgage-backed securities |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Asset-backed securities |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Commercial mortgage-backed securities |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Corporate bonds |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Foreign corporate bonds |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Total fixed maturities |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
(1) |
|
11
GLOBAL INDEMNITY LIMITED
The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses, categorized by the period that the securities were in a continuous loss position as of December 31, 2019. The fair value amounts reported in the table are estimates that are prepared using the process described in Note 5 of the notes to the consolidated financial statements in Item 1 of Part I of this report:
|
|
Less than 12 months |
|
|
12 months or longer |
|
|
Total (1) |
|
|||||||||||||||
(Dollars in thousands) |
|
Fair Value |
|
|
Gross Unrealized Losses |
|
|
Fair Value |
|
|
Gross Unrealized Losses |
|
|
Fair Value |
|
|
Gross Unrealized Losses |
|
||||||
Fixed maturities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and agency obligations |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
Obligations of states and political subdivisions |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Mortgage-backed securities |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Asset-backed securities |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Commercial mortgage-backed securities |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Corporate bonds |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Foreign corporate bonds |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Total fixed maturities |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
(1) |
Fixed maturities in a gross unrealized loss position are comprised of non-credit losses on investment grade securities where management does not intend to sell, and it is more likely than not that the Company will not be forced to sell the security before recovery. |
The Company regularly performs various analytical valuation procedures with respect to its investments, including reviewing each available for sale debt security in an unrealized loss position to assess whether the decline in fair value below amortized cost basis has resulted from a credit loss or other factors. In assessing whether a credit loss exists, the Company compares the present value of the cash flows expected to be collected from the security to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis of the security, a credit loss exists and an allowance for credit losses is recorded. Subsequent changes in the allowances are recorded in the period of change as either credit loss expense or reversal of credit loss expense. Any impairments related to factors other than credit losses are recorded through other comprehensive income, net of taxes.
For fixed maturities, the factors considered in reaching the conclusion that a credit loss exists include, among others, whether:
|
(1) |
the extent to which the fair value is less than the amortized cost basis; |
|
(2) |
the issuer is in financial distress; |
|
(3) |
the investment is secured; |
|
(4) |
a significant credit rating action occurred; |
|
(5) |
scheduled interest payments were delayed or missed; |
|
(6) |
changes in laws or regulations have affected an issuer or industry; |
|
(7) |
the investment has an unrealized loss and was identified by the Company’s investment manager as an investment to be sold before recovery or maturity; |
|
(8) |
the investment failed cash flow projection testing to determine if anticipated principal and interest payments will be realized; and |
|
(9) |
changes in US Treasury rates and/or credit spreads since original purchase to identify whether the unrealized loss is simply due to interest rate movement. |
According to accounting guidance for debt securities in an unrealized loss position, the Company is required to assess whether it has the intent to sell the debt security or more likely than not will be required to sell the debt security before the anticipated recovery. If either of these conditions is met, any allowance for credit losses is written off and the amortized cost basis is written down to the fair value of the fixed maturity security with any incremental impairment reported in earnings. That new amortized cost basis shall not be adjusted for subsequent recoveries in fair value.
12
GLOBAL INDEMNITY LIMITED
The following is a description, by asset type, of the methodology and significant inputs that the Company used to measure the amount of credit loss recognized in earnings, if any:
U.S. treasury and agency obligations – As of June 30, 2020, gross unrealized losses related to U.S. treasury and agency obligations were $
Obligations of states and political subdivisions – As of June 30, 2020, gross unrealized losses related to obligations of states and political subdivisions were $
Mortgage-backed securities (“MBS”) – As of June 30, 2020, gross unrealized losses related to mortgage-backed securities were $
Asset backed securities (“ABS”) - As of June 30, 2020, gross unrealized losses related to asset backed securities were $
Commercial mortgage-backed securities (“CMBS”) - As of June 30, 2020, gross unrealized losses related to the CMBS portfolio were $
Corporate bonds - As of June 30, 2020, gross unrealized losses related to corporate bonds were $
13
GLOBAL INDEMNITY LIMITED
including prospective debt servicing capabilities, capital structure composition, and the value of the collateral. The analysis incorporates the macroeconomic environment, industry conditions in which the issuer operates, the issuer’s current competitive position, its vulnerability to changes in the competitive and regulatory environment, issuer liquidity, issuer commitment to bondholders, issuer creditworthiness, and asset protection. Part of the process also includes running downside scenarios to evaluate the expected likelihood of default as well as potential losses in the event of default. Based on the analysis performed, the Company did not recognize a credit loss on corporate bonds during the period.
Foreign bonds – As of June 30, 2020, gross unrealized losses related to foreign bonds were $
The Company recorded the following other than temporary impairments (“OTTI”) on its investment portfolio for the quarter and six months ended June 30, 2019:
|
|
Quarter Ended June 30, |
|
|
Six Months Ended June 30, |
|
||
(Dollars in thousands) |
|
2019 |
|
|
2019 |
|
||
Fixed maturities: |
|
|
|
|
|
|
|
|
OTTI losses, gross |
|
$ |
|
|
|
$ |
( |
) |
Portion of loss recognized in other comprehensive income (pre-tax) |
|
|
|
|
|
|
|
|
Net impairment losses on fixed maturities recognized in earnings |
|
$ |
|
|
|
$ |
( |
) |
The following table is an analysis of the credit losses recognized in earnings on fixed maturities held by the Company for the quarter and six months ended June 30, 2019 for which a portion of the OTTI loss was recognized in other comprehensive income.
|
|
Quarter Ended June 30, |
|
|
Six Months Ended June 30, |
|
||
(Dollars in thousands) |
|
2019 |
|
|
2019 |
|
||
Balance at beginning of period |
|
$ |
|
|
|
$ |
|
|
Additions where no OTTI was previously recorded |
|
|
|
|
|
|
|
|
Additions where an OTTI was previously recorded |
|
|
|
|
|
|
|
|
Reductions for securities for which the company intends to sell or more likely than not will be required to sell before recovery |
|
|
|
|
|
|
|
|
Reductions reflecting increases in expected cashflows to be collected |
|
|
|
|
|
|
|
|
Reductions for securities sold during the period |
|
|
|
|
|
|
|
|
Balance at end of period |
|
$ |
|
|
|
$ |
|
|
Accumulated Other Comprehensive Income, Net of Tax
Accumulated other comprehensive income, net of tax, as of June 30, 2020 and December 31, 2019 was as follows:
(Dollars in thousands) |
|
June 30, 2020 |
|
|
December 31, 2019 |
|
||
Net unrealized gains (losses) from: |
|
|
|
|
|
|
|
|
Fixed maturities |
|
$ |
|
|
|
$ |
|
|
Foreign currency fluctuations |
|
|
( |
) |
|
|
( |
) |
Deferred taxes |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive income, net of tax |
|
$ |
|
|
|
$ |
|
|
14
GLOBAL INDEMNITY LIMITED
The following tables present the changes in accumulated other comprehensive income, net of tax, by component for the quarters and six months ended June 30, 2020 and 2019:
Quarter Ended June 30, 2020 (Dollars In Thousands) |
|
Unrealized Gains and Losses on Available for Sale Securities |
|
|
Foreign Currency Items |
|
|
Accumulated Other Comprehensive Income |
|
|||
Beginning balance, net of tax |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Other comprehensive income before reclassification, before tax |
|
|
|
|
|
|
|
|
|
|
|
|
Amounts reclassified from accumulated other comprehensive income, before tax |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Other comprehensive income, before tax |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Ending balance, net of tax |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Quarter Ended June 30, 2019 (Dollars In Thousands) |
|
Unrealized Gains and Losses on Available for Sale Securities |
|
|
Foreign Currency Items |
|
|
Accumulated Other Comprehensive Income |
|
|||
Beginning balance, net of tax |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Other comprehensive income (loss) before reclassification, before tax |
|
|
|
|
|
|
( |
) |
|
|
|
|
Amounts reclassified from accumulated other comprehensive income, before tax |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Other comprehensive income (loss), before tax |
|
|
|
|
|
|
( |
) |
|
|
|
|
Income tax expense |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Ending balance, net of tax |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Six Months Ended June 30, 2020 (Dollars In Thousands) |
|
Unrealized Gains and Losses on Available for Sale Securities |
|
|
Foreign Currency Items |
|
|
Accumulated Other Comprehensive Income |
|
|||
Beginning balance, net of tax |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Other comprehensive income before reclassification, before tax |
|
|
|
|
|
|
( |
) |
|
|
|
|
Amounts reclassified from accumulated other comprehensive income, before tax |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Other comprehensive income, before tax |
|
|
|
|
|
|
( |
) |
|
|
|
|
Income tax expense |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Ending balance, net of tax |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Six Months Ended June 30, 2019 (Dollars In Thousands) |
|
Unrealized Gains and Losses on Available for Sale Securities |
|
|
Foreign Currency Items |
|
|
Accumulated Other Comprehensive Income |
|
|||
Beginning balance, net of tax |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Other comprehensive income before reclassification, before tax |
|
|
|
|
|
|
|
|
|
|
|
|
Amounts reclassified from accumulated other comprehensive income, before tax |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Other comprehensive income, before tax |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Ending balance, net of tax |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
15
GLOBAL INDEMNITY LIMITED
The reclassifications out of accumulated other comprehensive income for the quarters and six months ended June 30, 2020 and 2019 were as follows:
|
|
|
|
Amounts Reclassified from Accumulated Other Comprehensive Income |
|
|||||
(Dollars in thousands) |
|
|
|
Quarters Ended June 30, |
|
|||||
Details about Accumulated Other Comprehensive Income Components |
|
Affected Line Item in the Consolidated Statements of Operations |
|
2020 |
|
|
2019 |
|
||
Unrealized gains and losses on available for sale securities |
|
Other net realized investment (gains) losses |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
Other than temporary impairment losses on investments |
|
|
|
|
|
|
|
|
|
|
Total before tax |
|
|
( |
) |
|
|
( |
) |
|
|
Income tax expense (benefit) |
|
|
|
|
|
|
|
|
|
|
Unrealized gains and losses on available for sale securities, net of tax |
|
|
( |
) |
|
|
( |
) |
Foreign currency items |
|
Other net realized investment (gains) losses |
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
Foreign currency items, net of tax |
|
|
|
|
|
|
|
|
Total reclassifications |
|
Total reclassifications, net of tax |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
Amounts Reclassified from Accumulated Other Comprehensive Income |
|
|||||
(Dollars in thousands) |
|
|
|
Six Months Ended June 30, |
|
|||||
Details about Accumulated Other Comprehensive Income Components |
|
Affected Line Item in the Consolidated Statements of Operations |
|
2020 |
|
|
2019 |
|
||
Unrealized gains and losses on available for sale securities |
|
Other net realized investment (gains) losses |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
Other than temporary impairment losses on investments |
|
|
|
|
|
|
|
|
|
|
Total before tax |
|
|
( |
) |
|
|
( |
) |
|
|
Income tax expense (benefit) |
|
|
|
|
|
|
|
|
|
|
Unrealized gains and losses on available for sale securities, net of tax |
|
|
( |
) |
|
|
( |
) |
Foreign currency items |
|
Other net realized investment (gains) losses |
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
Foreign currency items, net of tax |
|
|
|
|
|
|
|
|
Total reclassifications |
|
Total reclassifications, net of tax |
|
$ |
( |
) |
|
$ |
( |
) |
16
GLOBAL INDEMNITY LIMITED
Net Realized Investment Gains (Losses)
The components of net realized investment gains (losses) for the quarters and six months ended June 30, 2020 and 2019 were as follows:
|
|
Quarters Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Fixed maturities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross realized gains |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Gross realized losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net realized gains (losses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross realized gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross realized losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net realized gains (losses) |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross realized gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross realized losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net realized gains (losses) (1) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total net realized investment gains (losses) |
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
(1) |
|
Net realized investment gains (losses) for the quarter and six months ended June 30, 2020 were primarily due to the impact of changes in fair value due to the recent disruption in the global financial markets.
The following table shows the calculation of the portion of realized gains and losses related to equity securities held as of June 30, 2020 and 2019:
|
|
Quarters Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Net gains and (losses) recognized during the period on equity securities |
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Less: Net gains (losses) recognized during the period on equity securities sold during the period |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Unrealized gains and (losses) recognized during the reporting period on equity securities still held at the reporting date |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
The proceeds from sales and redemptions of available for sale and equity securities resulting in net realized investment gains (losses) for the six months ended June 30, 2020 and 2019 were as follows:
|
|
Six Months Ended June 30, |
|
|||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
||
Fixed maturities |
|
$ |
|
|
|
$ |
|
|
Equity securities |
|
|
|
|
|
|
|
|
17
GLOBAL INDEMNITY LIMITED
Net Investment Income
The sources of net investment income for the quarters and six months ended June 30, 2020 and 2019 were as follows:
|
|
Quarters Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Fixed maturities |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Equity securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other invested assets |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
Total investment income |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Investment expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net investment income |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
The Company’s total investment return on a pre-tax basis for the quarters and six months ended June 30, 2020 and 2019 were as follows:
|
|
Quarters Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Net investment income |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net realized investment gains (losses) |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Change in unrealized holding gains and losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized investment returns |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Total investment return |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Total investment return % (1) |
|
|
|
% |
|
|
|
% |
|
|
|
% |
|
|
|
% |
Average investment portfolio (2) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
(1) |
|
(2) |
|
As of June 30, 2020 and December 31, 2019, the Company did
Insurance Enhanced Asset-Backed and Credit Securities
As of June 30, 2020, the Company held insurance enhanced bonds with a market value of approximately $
The insurance enhanced bonds are comprised of $
The Company had no direct investments in the entities that have provided financial guarantees or other credit support to any security held by the Company at June 30, 2020.
18
GLOBAL INDEMNITY LIMITED
Bonds Held on Deposit
Certain cash balances, cash equivalents, equity securities, and bonds available for sale were deposited with various governmental authorities in accordance with statutory requirements, were held as collateral, or were held in trust pursuant to intercompany reinsurance agreements.
|
|
Estimated Fair Value |
|
|||||
(Dollars in thousands) |
|
June 30, 2020 |
|
|
December 31, 2019 |
|
||
On deposit with governmental authorities |
|
$ |
|
|
|
$ |
|
|
Intercompany trusts held for the benefit of U.S. policyholders |
|
|
|
|
|
|
|
|
Held in trust pursuant to third party requirements |
|
|
|
|
|
|
|
|
Letter of credit held for third party requirements |
|
|
|
|
|
|
|
|
Securities held as collateral |
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
|
$ |
|
|
Variable Interest Entities
A Variable Interest Entity (VIE) refers to an investment in which an investor holds a controlling interest that is not based on the majority of voting rights. Under the VIE model, the party that has the power to exercise significant management influence and maintain a controlling financial interest in the entity’s economics is said to be the primary beneficiary, and is required to consolidate the entity within their results. Other entities that participate in a VIE, for which their financial interests fluctuate with changes in the fair value of the investment entity’s net assets but do not have significant management influence and the ability to direct the VIE’s significant economic activities are said to have a variable interest in the VIE but do not consolidate the VIE in their financial results.
The Company has variable interests in
The carrying value of one of the Company’s VIE’s, which invests in distressed securities and assets, was $
4. |
Derivative Instruments |
Derivatives are used by the Company to reduce risks from changes in interest rates and limit exposure to severe equity market changes. The Company has interest rate swaps with terms to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional amount. In 2019, the Company began to utilize exchange-traded futures contracts, which give the holder the right and obligation to participate in market movements at a future date, to allow the Company to react faster to market conditions. The Company posts collateral and settles variation margin in cash on a daily basis equal to the amount of the futures contracts’ change in value scaled by a multiplier.
The Company accounts for the interest rate swaps and futures as non-hedge instruments and recognizes the fair value of the interest rate swaps in other assets or other liabilities on the consolidated balance sheets with the changes in fair value recognized as net realized investment gains or losses in the consolidated statements of operations. The Company is ultimately responsible for the valuation of the interest rate swaps. To aid in determining the estimated fair value of the
19
GLOBAL INDEMNITY LIMITED
interest rate swaps, the Company relies on the forward interest rate curve and information obtained from a third party financial institution.
The following table summarizes information on the location and the gross amount of the derivatives on the consolidated balance sheets as of June 30, 2020 and December 31, 2019:
(Dollars in thousands) |
|
|
|
June 30, 2020 |
|
|
December 31, 2019 |
|
||||||||||
Derivatives Not Designated as Hedging Instruments under ASC 815 |
|
Balance Sheet Location |
|
Notional Amount |
|
|
Fair Value |
|
|
Notional Amount |
|
|
Fair Value |
|
||||
Interest rate swap agreements |
|
Other assets/liabilities |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
Futures contracts on bonds (1) |
|
Other assets/liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures contracts on equities (1) |
|
Other assets/liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
(1) |
|
The following table summarizes the net gains (losses) included in the consolidated statements of operations for changes in the fair value of the derivatives and the periodic net interest settlements under the derivatives for the quarters and six months ended June 30, 2020 and 2019:
|
|
|
|
Quarters Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(Dollars in thousands) |
|
Consolidated Statements of Operations Line |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Interest rate swap agreements |
|
Net realized investment gains (losses) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Futures contracts on bonds |
|
Net realized investment gains (losses) |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
Futures contracts on equities |
|
Net realized investment gains (losses) |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
Total |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
As of June 30, 2020 and December 31, 2019, the Company is due $
As of June 30, 2020 and December 31, 2019, the Company posted initial margin of $
5. |
Fair Value Measurements |
The accounting standards related to fair value measurements define fair value, establish a framework for measuring fair value, outline a fair value hierarchy based on inputs used to measure fair value, and enhance disclosure requirements for fair value measurements. These standards do not change existing guidance as to whether or not an instrument is carried at fair value. The Company has determined that its fair value measurements are in accordance with the requirements of these accounting standards.
The Company’s invested assets and derivative instruments are carried at their fair value and are categorized based upon a fair value hierarchy:
|
• |
Level 1 – inputs utilize quoted prices (unadjusted) in active markets for identical assets that the Company has the ability to access at the measurement date. |
|
• |
Level 2 – inputs utilize other than quoted prices included in Level 1 that are observable for similar assets, either directly or indirectly. |
20
GLOBAL INDEMNITY LIMITED
|
• |
Level 3 – inputs are unobservable for the asset, and include situations where there is little, if any, market activity for the asset. |
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset.
The following table presents information about the Company’s invested assets and derivative instruments measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value.
|
|
Fair Value Measurements |
|
|||||||||||||
As of June 30, 2020 (Dollars in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and agency obligations |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Obligations of states and political subdivisions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign corporate bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fixed maturities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets measured at fair value |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative instruments |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Total liabilities measured at fair value |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
Fair Value Measurements |
|
|||||||||||||
As of December 31, 2019 (Dollars in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. treasury and agency obligations |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Obligations of states and political subdivisions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign corporate bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fixed maturities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets measured at fair value |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative instruments |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Total liabilities measured at fair value |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
The securities classified as Level 1 in the above table consist of U.S. Treasuries and equity securities actively traded on an exchange.
21
GLOBAL INDEMNITY LIMITED
The securities classified as Level 2 in the above table consist primarily of fixed maturity securities and derivative instruments. Based on the typical trading volumes and the lack of quoted market prices for fixed maturities, security prices are derived through recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. If there are no recent reported trades, matrix or model processes are used to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Included in the pricing of asset-backed securities, collateralized mortgage obligations, and mortgage-backed securities are estimates of the rate of future prepayments of principal over the remaining life of the securities. Such estimates are derived based on the characteristics of the underlying structure and prepayment speeds previously experienced at the interest rate levels projected for the underlying collateral. The estimated fair value of the derivative instruments, consisting of interest rate swaps, is obtained from a third party financial institution that utilizes observable inputs such as the forward interest rate curve.
For the Company’s material debt arrangements, the current fair value of the Company’s debt at June 30, 2020 and December 31, 2019 was as follows:
|
|
June 30, 2020 |
|
|
December 31, 2019 |
|
||||||||||
(Dollars in thousands) |
|
Carrying Value |
|
|
Fair Value |
|
|
Carrying Value |
|
|
Fair Value |
|
||||
Margin Borrowing Facility |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
7.75% Subordinated Notes due 2045 (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.875% Subordinated Notes due 2047 (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
(1) |
|
(2) |
|
The fair value of the margin borrowing facility approximates its carrying value due to the facility being due on demand. The subordinated notes due
Fair Value of Alternative Investments
Other invested assets consist of limited liability partnerships whose carrying value approximates fair value.
|
|
June 30, 2020 |
|
|
December 31, 2019 |
|
||||||||||
(Dollars in thousands) |
|
Fair Value |
|
|
Future Funding Commitment |
|
|
Fair Value |
|
|
Future Funding Commitment |
|
||||
European Non-Performing Loan Fund, LP (1) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Distressed Debt Fund, LP (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage Debt Fund, LP (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
(1) |
|
(2) |
|
(3) |
|
Limited Partnerships with ownership interest exceeding 3%
The Company uses the equity method to account for investments in limited partnerships where its ownership interest exceeds
22
GLOBAL INDEMNITY LIMITED
account for the income or loss earned on the investment. The investment income associated with these limited partnerships, which is booked on a one quarter lag, is reflected in the consolidated statements of operations in the amounts of ($
Pricing
The Company’s pricing vendors provide prices for all investment categories except for investments in limited partnerships. Two primary vendors are utilized to provide prices for equity and fixed maturity securities.
The following is a description of the valuation methodologies used by the Company’s pricing vendors for investment securities carried at fair value:
|
• |
Equity security prices are received from primary and secondary exchanges. |
|
• |
Corporate and agency bonds are evaluated by utilizing a spread to a benchmark curve. Bonds with similar characteristics are grouped into specific sectors. Inputs for both asset classes consist of trade prices, broker quotes, the new issue market, and prices on comparable securities. |
|
• |
Data from commercial vendors is aggregated with market information, then converted into an option adjusted spread (“OAS”) matrix and prepayment model used for commercial mortgage obligations (“CMO”). CMOs are categorized with mortgage-backed securities in the tables listed above. For asset-backed securities, spread data is derived from trade prices, dealer quotations, and research reports. For both asset classes, evaluations utilize standard inputs plus new issue data, and collateral performance. The evaluated pricing models incorporate cash flows, broker quotes, market trades, historical prepayment speeds, and dealer projected speeds. |
|
• |
For obligations of state and political subdivisions, an attribute-based modeling system is used. The pricing model incorporates trades, market clearing yields, market color, and fundamental credit research. |
|
• |
U.S. treasuries are evaluated by obtaining feeds from a number of live data sources including primary and secondary dealers as well as inter-dealer brokers. |
|
• |
For mortgage-backed securities, various external analytical products are utilized and purchased from commercial vendors. |
The Company performs certain procedures to validate whether the pricing information received from the pricing vendors is reasonable, to ensure that the fair value determination is consistent with accounting guidance, and to ensure that its assets are properly classified in the fair value hierarchy. The Company’s procedures include, but are not limited to:
|
• |
Reviewing periodic reports provided by the Investment Manager that provides information regarding rating changes and securities placed on watch. This procedure allows the Company to understand why a particular security’s market value may have changed or may potentially change. |
|
• |
Understanding and periodically evaluating the various pricing methods and procedures used by the Company’s pricing vendors to ensure that investments are properly classified within the fair value hierarchy. |
|
• |
On a quarterly basis, the Company corroborates investment security prices received from its pricing vendors by obtaining pricing from a second pricing vendor for a sample of securities. |
During the quarters and six months ended June 30, 2020 and 2019, the Company has not adjusted quotes or prices obtained from the pricing vendors.
6.Allowance for Credit Losses - Premiums Receivable and Reinsurance Receivables
The Company implemented new accounting guidance on January 1, 2020 related to the measurement of credit losses on financial instruments. Please see Note 16 for further discussion on this new accounting guidance.
23
GLOBAL INDEMNITY LIMITED
For premiums receivables, the allowance is based upon the Company’s ongoing review of key aspects of amounts outstanding, including but not limited to, length of collection periods, direct placement with collection agencies, solvency of insured or agent, terminated agents, and other relevant factors.
For reinsurance receivables, the allowance is based upon the Company’s ongoing review of key aspects of amounts outstanding, including but not limited to, length of collection periods, disputes, applicable coverage defenses, insolvent reinsurers, financial strength of solvent reinsurers based on A.M Best Ratings and other relevant factors.
The following table is an analysis of the allowance for credit losses related to the Company's premiums receivable and reinsurance receivables for the quarter and six months ended June 30, 2020:
|
|
Quarter Ended June 30, 2020 |
|
|
Six Months Ended June 30, 2020 |
|
||||||||||
(Dollars in thousands) |
|
Premiums Receivable |
|
|
Reinsurance Receivables |
|
|
Premiums Receivable |
|
|
Reinsurance Receivables |
|
||||
Beginning balance |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Current period provision for expected credit losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-offs |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
Ending balance |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
7.Income Taxes
As of June 30, 2020, the statutory income tax rates of the countries where the Company conducts business are
The Company’s income (loss) before income taxes from its non-U.S. subsidiaries and U.S. subsidiaries for the quarters and six months ended June 30, 2020 and 2019 were as follows:
Quarter Ended June 30, 2020 (Dollars in thousands) |
|
Non-U.S. Subsidiaries |
|
|
U.S. Subsidiaries |
|
|
Eliminations |
|
|
Total |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net earned premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net investment income (loss) |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net realized investment gains (losses) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Losses and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income before income taxes |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
24
GLOBAL INDEMNITY LIMITED
Quarter Ended June 30, 2019 (Dollars in thousands) |
|
Non-U.S. Subsidiaries |
|
|
U.S. Subsidiaries |
|
|
Eliminations |
|
|
Total |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net earned premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Net realized investment gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (loss) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Losses and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income before income taxes |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Six Months Ended June 30, 2020 (Dollars in thousands) |
|
Non-U.S. Subsidiaries |
|
|
U.S. Subsidiaries |
|
|
Eliminations |
|
|
Total |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net earned premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Net realized investment losses |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Other income (loss) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Losses and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income (loss) before income taxes |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
Six Months Ended June 30, 2019 (Dollars in thousands) |
|
Non-U.S. Subsidiaries |
|
|
U.S. Subsidiaries |
|
|
Eliminations |
|
|
Total |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net earned premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Net realized investment gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (loss) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Losses and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income before income taxes |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
25
GLOBAL INDEMNITY LIMITED
The following table summarizes the components of income tax expense (benefit):
|
|
Quarters Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Current income tax benefit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
U.S. Federal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current income tax benefit |
|
$ |
|
|
|
|
( |
) |
|
$ |
|
|
|
|
( |
) |
Deferred income tax expense (benefit): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Federal |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Total deferred income tax expense (benefit) |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Total income tax expense (benefit) |
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
The weighted average expected tax provision has been calculated using income (loss) before income taxes in each jurisdiction multiplied by that jurisdiction’s applicable statutory tax rate.
The following table summarizes the differences between the tax provision for financial statement purposes and the expected tax provision at the weighted average tax rate:
|
|
Quarters Ended June 30, |
|
|||||||||||||
|
|
2020 |
|
|
2019 |
|
||||||||||
(Dollars in thousands) |
|
Amount |
|
|
% of Pre- Tax Income |
|
|
Amount |
|
|
% of Pre- Tax Income |
|
||||
Expected tax provision at weighted average tax rate |
|
$ |
|
|
|
|
|
% |
|
$ |
|
|
|
|
|
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax exempt interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend exclusion |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
%) |
Non-deductible interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% |
Other |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
% |
Effective income tax expense |
|
$ |
|
|
|
|
|
% |
|
$ |
|
|
|
|
|
% |
The effective income tax expense rate for the quarter ended June 30, 2020 was
|
|
Six Months Ended June 30, |
|
|||||||||||||
|
|
2020 |
|
|
2019 |
|
||||||||||
(Dollars in thousands) |
|
Amount |
|
|
% of Pre- Tax Income |
|
|
Amount |
|
|
% of Pre- Tax Income |
|
||||
Expected tax provision at weighted average tax rate |
|
$ |
( |
) |
|
|
|
% |
|
$ |
|
|
|
|
|
% |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax exempt interest |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
% |
Dividend exclusion |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
( |
%) |
Non-deductible interest |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
% |
Other |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
%) |
Effective income tax expense (benefit) |
|
$ |
( |
) |
|
|
|
% |
|
$ |
|
|
|
|
|
% |
The effective income tax benefit rate for the six months ended June 30, 2020 was
The Company has a net operating loss (“NOL”) carryforward of $
26
GLOBAL INDEMNITY LIMITED
The Company has a Section 163(j) (“163(j)”) carryforward of $
The Company has an alternative minimum tax (“AMT”) credit carryforward of $
8.Liability for Unpaid Losses and Loss Adjustment Expenses
Activity in the liability for unpaid losses and loss adjustment expenses is summarized as follows:
|
|
Quarters Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Balance at beginning of period |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Less: Ceded reinsurance receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net balance at beginning of period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incurred losses and loss adjustment expenses related to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior years |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total incurred losses and loss adjustment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paid losses and loss adjustment expenses related to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current year |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total paid losses and loss adjustment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net balance at end of period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plus: Ceded reinsurance receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of period |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
When analyzing loss reserves and prior year development, the Company considers many factors, including the frequency and severity of claims, loss trends, case reserve settlements that may have resulted in significant development, and any other additional or pertinent factors that may impact reserve estimates.
During the second quarter of 2020, the Company reduced its prior accident year loss reserves by $
The $
|
• |
General Liability: An $ |
|
• |
Commercial Auto Liability: A $ |
|
• |
Property: An increase of $ |
27
GLOBAL INDEMNITY LIMITED
|
in the 2018 accident year which reflects a higher estimated ultimate for Hurricane Michael. The increase in ultimate resulted from receiving additional information in the quarter for a Property Brokerage claim. |
|
• |
Professional: A $ |
The $
|
• |
General Liability: A $ |
|
• |
Property: A $ |
The $
|
• |
Property: A $ |
|
• |
General Liability: A $ |
The $
During the second quarter of 2019, the Company reduced its prior accident year loss reserves by $
The $
|
• |
Professional: A $ |
|
• |
General Liability: A $ |
The $
|
• |
General Liability: A $ |
|
• |
Property: A $ |
28
GLOBAL INDEMNITY LIMITED
The $
|
• |
Property: A $ |
The $
|
• |
Property: A $ |
|
• |
Professional: A $ |
During the first six months of 2020, the Company reduced its prior accident year loss reserves by $
The $
|
• |
General Liability: An $ |
|
• |
Workers Compensation: A $ |
|
• |
Property: An increase of $ |
|
• |
Professional: A $ |
|
• |
Commercial Auto Liability: A $ |
The $
|
• |
General Liability: A $ |
|
• |
Property: A $ |
29
GLOBAL INDEMNITY LIMITED
The $
|
• |
Property: A $ |
|
• |
General Liability: A $ |
The $
During the first six months of 2019, the Company reduced its prior accident year loss reserves by $
The $
|
• |
General Liability: A $ |
|
• |
Commercial Auto Liability: A $ |
|
• |
Property: A $ |
|
• |
Professional: A $ |
The $
|
• |
Property: A $ |
The $
|
• |
Liability: A $ |
30
GLOBAL INDEMNITY LIMITED
|
• |
Property: $ |
The $
|
• |
Property: A $ |
|
• |
Professional: A $ |
9.Shareholders’ Equity
There were
The following table provides information with respect to the A ordinary shares that were surrendered or repurchased during the six months ended June 30, 2020:
Period (1) |
|
Total Number of Shares Purchased |
|
|
Average Price Paid Per Share |
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program |
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs |
|
||||
January 1-31, 2020 |
|
|
|
|
(2) |
$ |
|
|
|
|
|
|
|
|
|
|
February 1-29, 2020 |
|
|
|
|
(2) |
$ |
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
(1) |
|
(2) |
|
The following table provides information with respect to the A ordinary shares that were surrendered or repurchased during the six months ended June 30, 2019:
Period (1) |
|
Total Number of Shares Purchased |
|
|
Average Price Paid Per Share |
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program |
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs |
||
January 1-31, 2019 |
|
|
|
|
(2) |
$ |
|
|
|
|
|
|
February 1-28, 2019 |
|
|
|
|
(2) |
$ |
|
|
|
|
|
|
Total |
|
|
|
|
|
$ |
|
|
|
|
|
|
(1) |
Based on settlement date. |
(2) |
Surrendered by employees as payment of taxes withheld on the vesting of restricted stock. |
There were
As of June 30, 2020, the Company’s A ordinary shares were held by approximately
Please see Note 12 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2019 Annual Report on Form 10-K for more information on the Company’s repurchase program.
31
GLOBAL INDEMNITY LIMITED
Dividends
Dividend payments of $
Approval Date |
|
Record Date |
|
Payment Date |
|
Total Dividends Declared (Dollars in thousands) |
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
$ |
|
|
|
(1) |
Represents dividends declared on unvested shares, net of forfeitures. |
Dividend payments of $
Approval Date |
|
Record Date |
|
Payment Date |
|
Total Dividends Declared (Dollars in thousands) |
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
$ |
|
|
|
(1) |
|
As of June 30, 2020 and December 31, 2019, accrued dividends on unvested shares, which were included in other liabilities on the consolidated balance sheets, were $
Please see Note 12 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2019 Annual Report on Form 10-K for more information on the Company’s dividend program.
10. |
Related Party Transactions |
Fox Paine Entities
As of June 30, 2020, Fox Paine Capital Fund II International, L.P. and certain of its affiliates (collectively, the “Fox Paine Funds”), which are managed by Fox Paine & Company, LLC, beneficially own approximately
The Company relies on Fox Paine & Company, LLC to provide management services and other services related to the operations of the Company. Starting in 2014, the management fee is adjusted annually to reflect the percentage change in the CPI-U. On May 6, 2020, the Company and Fox Paine & Company, LLC entered into the Second Amended and Restated Management Agreement, effective as of September 5, 2019 (the “Agreement”), to: (i) eliminate the Company’s obligation to reimburse Fox Paine & Company, LLC for its travel, lodging, meals, and other items relating to attendance at regularly scheduled meetings of the Board of Directors, which have averaged approximately $
Management fee expense of $
32
GLOBAL INDEMNITY LIMITED
In addition, Fox Paine & Company, LLC may also propose and negotiate transaction fees with the Company subject to the provisions of the Company’s related party transaction policies, including approval of the Company’s Audit Committee of the Board of Directors, for those services from time to time. Each of the Company’s transactions with Fox Paine & Company, LLC described below was reviewed and approved by the Company’s Audit Committee, which is composed of independent directors, and the Board of Directors (other than Saul A. Fox, Chairman of the Board of Directors of the Company and Chief Executive of Fox Paine & Company, LLC, who is not a member of the Audit Committee and recused himself from the Board of Directors’ deliberations).
Illiquid Investment Fund Divestiture Fee
On December 21, 2018, GBLI Holdings, LLC (formerly known as “Global Indemnity Group, LLC”) exited an investment in a private credit fund pursuant to a sale of GBLI Holdings, LLC’s investment to third parties at par plus accrued interest. Fox Paine & Company, LLC provided services to GBLI Holdings, LLC in connection with the sale, including conducting due diligence to evaluate the private fund, recommending that GBLI Holdings, LLC withdraw from the private fund, and conducting extended negotiations with the private fund to secure GBLI Holdings, LLC’s withdrawal from the private fund on favorable terms. Fox Paine & Company, LLC’s services for GBLI Holdings, LLC in connection with the sale were performed during the second, third, and fourth quarters of 2018. The total fee for these services was $
Redomestication Fee
Pursuant to the Agreement, Fox Paine & Company, LLC performed extensive financial advisory services for the Company in connection with the conceptualization, design, structuring and implementation of the redomestication plan. In accordance with the Agreement, Fox Paine & Company, LLC may propose and negotiate advisory fees for such services with the Company, subject to the provisions of the Company’s related party transaction policies, including approval of the Audit Committee. Any such advisory fees would be accrued in the period in which the transactions contemplated by the redomestication plan are consummated and would be payable following the consummation of such transactions.
11.Commitments and Contingencies
Legal Proceedings
The Company is, from time to time, involved in various legal proceedings in the ordinary course of business. The Company maintains insurance and reinsurance coverage for such risks in amounts that it considers adequate. However, there can be no assurance that the insurance and reinsurance coverage that the Company maintains is sufficient or will be available in adequate amounts or at a reasonable cost. The Company does not believe that the resolution of any currently pending legal proceedings, either individually or taken as a whole, will have a material adverse effect on its business, results of operations, cash flows, or financial condition.
There is a greater potential for disputes with reinsurers who are in runoff. Some of the Company’s reinsurers’ have operations that are in runoff, and therefore, the Company closely monitors those relationships. The Company anticipates that, similar to the rest of the insurance and reinsurance industry, it will continue to be subject to litigation and arbitration proceedings in the ordinary course of business.
Commitments
In 2014, the Company entered into a $
In 2017, the Company entered into a $
33
GLOBAL INDEMNITY LIMITED
In 2019, the Company entered into a $
Other Commitments
The Company is party to a Management Agreement, as amended, with Fox Paine & Company, LLC, whereby in connection with certain management services provided to it by Fox Paine & Company, LLC, the Company agreed to pay an annual management fee to Fox Paine & Company, LLC. See Note 10 above for additional information pertaining to this management agreement.
COVID-19
There is risk that legislation could be passed which would require the Company to cover business interruption claims regardless of terms, exclusions including the virus exclusions contained within the Company’s Commercial Specialty and Farm, Ranch & Stable policies, or other conditions included in policies that would otherwise preclude coverage.
12. |
Share-Based Compensation Plans |
Options
Restricted Shares / Restricted Stock Units
There were
During the six months ended June 30, 2019, the Company granted
|
• |
|
|
• |
Subject to Board approval, |
There were
During the six months ended June 30, 2020, the Company granted
|
• |
|
The remaining
|
• |
|
|
• |
Subject to Board approval, |
34
GLOBAL INDEMNITY LIMITED
During the quarter and six months ended June 30, 2019, the Company granted
|
• |
|
During the quarters ended June 30, 2020 and 2019, the Company granted
13.Earnings Per Share
Earnings per share have been computed using the weighted average number of ordinary shares and ordinary share equivalents outstanding during the period.
The following table sets forth the computation of basic and diluted earnings per share:
|
|
Quarters Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(Dollars in thousands, except share and per share data) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Net income (loss) |
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Basic earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding – basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share |
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
Diluted earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding – diluted (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share |
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
(1) |
For the six months ended June 30, 2020, weighted average shares outstanding – basic was used to calculate diluted earnings per share due to a net loss for the period. |
A reconciliation of weighted average shares for basic earnings per share to weighted average shares for diluted earnings per share is as follows:
|
|
Quarters Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Weighted average shares for basic earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-vested restricted stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-vested restricted stock units |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares for diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
If the Company had not incurred a loss in the six months ended June 30, 2020,
The weighted average shares outstanding used to determine dilutive earnings per share does not include
35
GLOBAL INDEMNITY LIMITED
14. |
Segment Information |
The Company manages its business through
The following are tabulations of business segment information for the quarters and six months ended June 30, 2020 and 2019:
Quarter Ended June 30, 2020 (Dollars in thousands) |
|
Commercial Specialty |
|
(1) |
Specialty Property |
|
(1) |
Farm, Ranch, & Stable |
|
(1) |
Reinsurance Operations |
|
(2) |
Total |
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net earned premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from segments |
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
Unallocated Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Net realized investment gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Corporate assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
(1) |
|
(2) |
|
36
GLOBAL INDEMNITY LIMITED
Quarter Ended June 30, 2019 (Dollars in thousands) |
|
Commercial Specialty |
|
(1) |
Specialty Property |
|
(1) |
Farm, Ranch, & Stable |
|
(1) |
Reinsurance Operations |
|
(2) |
Total |
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net earned premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Other income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from segments |
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
Unallocated Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized investment gain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Corporate assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
(1) |
Includes business ceded to the Company’s Reinsurance Operations. This quota share agreement was cancelled effective January 1, 2018. |
(2) |
External business only, excluding business assumed from affiliates. |
37
GLOBAL INDEMNITY LIMITED
Six Months Ended June 30, 2020 (Dollars in thousands) |
|
Commercial Specialty |
|
(1) |
Specialty Property |
|
(1) |
Farm, Ranch, & Stable |
|
(1) |
Reinsurance Operations |
|
(2) |
Total |
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net earned premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Other income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from segments |
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
Unallocated Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized investment loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Loss before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Corporate assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
(1) |
Includes business ceded to the Company’s Reinsurance Operations. This quota share agreement was cancelled effective January 1, 2018. |
(2) |
External business only, excluding business assumed from affiliates. |
38
GLOBAL INDEMNITY LIMITED
Six Months Ended June 30, 2019 (Dollars in thousands) |
|
Commercial Specialty |
|
(1) |
Specialty Property |
|
(1) |
Farm, Ranch, & Stable |
|
(1) |
Reinsurance Operations |
|
(2) |
Total |
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net written premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net earned premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from segments |
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
Unallocated Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized investment gain |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Corporate assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
(1) |
Includes business ceded to the Company’s Reinsurance Operations. This quota share agreement was cancelled effective January 1, 2018. |
(2) |
External business only, excluding business assumed from affiliates. |
15.Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries
The following tables present condensed consolidating balance sheets at June 30, 2020 and December 31, 2019, condensed consolidating statements of operations and condensed consolidating statements of comprehensive income for the quarters and six months ended June 30, 2020 and 2019 and condensed consolidating statements of cash flows for the six months ended June 30, 2020 and 2019. GBLI Holdings, LLC is a
39
GLOBAL INDEMNITY LIMITED
Condensed Consolidating Balance Sheets at June 30, 2020 (Dollars in thousands) |
|
Global Indemnity Limited (Parent co- obligor) |
|
|
GBLI Holdings, LLC (Subsidiary co-obligor) |
|
|
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1) |
|
|
Consolidating Adjustments (2) |
|
|
Global Indemnity Limited Consolidated |
|
|||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Due from subsidiaries and affiliates |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Notes receivable – affiliate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Interest receivable – affiliate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Premiums receivable, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinsurance receivables, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds held by ceding insurers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income taxes receivable |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
Deferred federal income taxes |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
Deferred acquisition costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid reinsurance premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivable for securities sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Total assets |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid losses and loss adjustment expenses |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Unearned premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceded balances payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent commissions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Notes payable – affiliates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Accrued interest payable – affiliates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Other liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
(1) |
|
(2) |
|
40
GLOBAL INDEMNITY LIMITED
Condensed Consolidating Balance Sheets at December 31, 2019 (Dollars in thousands) |
|
Global Indemnity Limited (Parent co-obligor) |
|
|
GBLI Holdings, LLC (Subsidiary co-obligor) |
|
|
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1) |
|
|
Consolidating Adjustments (2) |
|
|
Global Indemnity Limited Consolidated |
|
|||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Due from subsidiaries and affiliates |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Notes receivable – affiliate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Interest receivable – affiliate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Premiums receivable, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinsurance receivables, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds held by ceding insurers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal income taxes receivable |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
Deferred federal income taxes |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
Deferred acquisition costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid reinsurance premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Total assets |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unpaid losses and loss adjustment expenses |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Unearned premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceded balances payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable for securities purchased |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent commissions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Notes payable – affiliates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Accrued interest payable – affiliates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Other liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders’ equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
(1) |
Includes all other subsidiaries of Global Indemnity Limited and eliminations |
(2) |
Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
41
GLOBAL INDEMNITY LIMITED
Condensed Consolidating Statements of Operations for the Quarter Ended June 30, 2020 (Dollars in thousands) |
|
Global Indemnity Limited (Parent co-obligor) |
|
|
GBLI Holdings, LLC (Subsidiary co-obligor) |
|
|
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1) |
|
|
Consolidating Adjustments (2) |
|
|
Global Indemnity Limited Consolidated |
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earned premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net investment income (loss) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
Net realized investment gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Losses and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income (loss) before equity in net income (loss) of subsidiaries and income taxes |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net income of subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
(1) |
Includes all other subsidiaries of Global Indemnity Limited and eliminations |
(2) |
Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
Condensed Consolidating Statements of Operations for the Quarter Ended June 30, 2019 (Dollars in thousands) |
|
Global Indemnity Limited (Parent co-obligor) |
|
|
GBLI Holdings, LLC (Subsidiary co-obligor) |
|
|
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1) |
|
|
Consolidating Adjustments (2) |
|
|
Global Indemnity Limited Consolidated |
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earned premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Net realized investment gains (losses) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Losses and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income (loss) before equity in net income of subsidiaries and income taxes |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net income of subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income tax expense (benefit) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
(1) |
Includes all other subsidiaries of Global Indemnity Limited and eliminations |
(2) |
Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
42
GLOBAL INDEMNITY LIMITED
Condensed Consolidating Statements of Operations for the Six Months Ended June 30, 2020 (Dollars in thousands) |
|
Global Indemnity Limited (Parent co-obligor) |
|
|
GBLI Holdings, LLC (Subsidiary co-obligor) |
|
|
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1) |
|
|
Consolidating Adjustments (2) |
|
|
Global Indemnity Limited Consolidated |
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earned premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net investment income (loss) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
Net realized investment gains (losses) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
Losses and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income (loss) before equity in net income of subsidiaries and income taxes |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
Equity in net income (loss) of subsidiaries |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Income (loss) before income taxes |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
Income tax expense (benefit) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
Net income (loss) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
(1) |
Includes all other subsidiaries of Global Indemnity Limited and eliminations |
(2) |
Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
Condensed Consolidating Statements of Operations for the Six Months Ended June 30, 2019 (Dollars in thousands) |
|
Global Indemnity Limited (Parent co-obligor) |
|
|
GBLI Holdings, LLC (Subsidiary co-obligor) |
|
|
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1) |
|
|
Consolidating Adjustments (2) |
|
|
Global Indemnity Limited Consolidated |
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earned premiums |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Net realized investment gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Losses and Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income (loss) before equity in net income of subsidiaries and income taxes |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net income of subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Income tax expense (benefit) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
(1) |
Includes all other subsidiaries of Global Indemnity Limited and eliminations |
(2) |
Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
43
GLOBAL INDEMNITY LIMITED
Condensed Consolidating Statements of Comprehensive Income for the Quarter Ended June 30, 2020 (Dollars in thousands) |
|
Global Indemnity Limited (Parent co-obligor) |
|
|
GBLI Holdings, LLC (Subsidiary co-obligor) |
|
|
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1) |
|
|
Consolidating Adjustments (2) |
|
|
Global Indemnity Limited Consolidated |
|
|||||
Net income |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized holding gains (losses) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Equity in other comprehensive income of unconsolidated subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Reclassification adjustment for gains included in net income |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Unrealized foreign currency translation gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss), net of tax |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
(1) |
Includes all other subsidiaries of Global Indemnity Limited and eliminations |
(2) |
Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
Condensed Consolidating Statements of Comprehensive Income for the Quarter Ended June 30, 2019 (Dollars in thousands) |
|
Global Indemnity Limited (Parent co-obligor) |
|
|
GBLI Holdings, LLC (Subsidiary co-obligor) |
|
|
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1) |
|
|
Consolidating Adjustments (2) |
|
|
Global Indemnity Limited Consolidated |
|
|||||
Net income |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized holding gains (losses) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Equity in other comprehensive income of unconsolidated subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Portion of other-than-temporary impairment losses recognized in other comprehensive income |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Reclassification adjustment for gains included in net income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Unrealized foreign currency translation losses |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income, net of tax |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
(1) |
Includes all other subsidiaries of Global Indemnity Limited and eliminations |
(2) |
Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
44
GLOBAL INDEMNITY LIMITED
Condensed Consolidating Statements of Comprehensive Income for the Six Months Ended June 30, 2020 (Dollars in thousands) |
|
Global Indemnity Limited (Parent co-obligor) |
|
|
GBLI Holdings, LLC (Subsidiary co-obligor) |
|
|
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1) |
|
|
Consolidating Adjustments (2) |
|
|
Global Indemnity Limited Consolidated |
|
|||||
Net income (loss) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized holding gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in other comprehensive income (loss) of unconsolidated subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Reclassification adjustment for (gains) losses included in net income |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Unrealized foreign currency translation gains |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income, net of tax |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
(1) |
Includes all other subsidiaries of Global Indemnity Limited and eliminations |
(2) |
Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
Condensed Consolidating Statements of Comprehensive Income for the Six Months Ended June 30, 2019 (Dollars in thousands) |
|
Global Indemnity Limited (Parent co-obligor) |
|
|
GBLI Holdings, LLC (Subsidiary co-obligor) |
|
|
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1) |
|
|
Consolidating Adjustments (2) |
|
|
Global Indemnity Limited Consolidated |
|
|||||
Net income |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized holding gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in other comprehensive income of unconsolidated subsidiaries |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Portion of other-than-temporary impairment losses recognized in other comprehensive losses |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Reclassification adjustment for (gains) losses included in net income |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Unrealized foreign currency translation gains |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income, net of tax |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
(1) |
Includes all other subsidiaries of Global Indemnity Limited and eliminations |
(2) |
Includes Parent co-obligor and subsidiary co-obligor consolidating adjustments |
45
GLOBAL INDEMNITY LIMITED
Condensed Consolidating Statements of Cash Flows for the Six Months Ended June 30, 2020 (Dollars in thousands) |
|
Global Indemnity Limited (Parent co-obligor) |
|
|
GBLI Holdings, LLC (Subsidiary co-obligor) |
|
|
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1) |
|
|
Global Indemnity Limited Consolidated |
|
||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used for) operating activities |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of fixed maturities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of equity securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from maturity of fixed maturities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from other invested assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts paid in connection with derivatives |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Purchases of fixed maturities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Purchases of equity securities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Purchases of other invested assets |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Net cash provided by (used for) investing activities |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net borrowings under margin borrowing facility |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of note to affiliates |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
Dividends paid to shareholders |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
Dividends from subsidiary |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Purchase of A ordinary shares |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
Net cash provided by (used for) financing activities |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
(1) |
Includes all other subsidiaries of Global Indemnity Limited and eliminations |
46
GLOBAL INDEMNITY LIMITED
Condensed Consolidating Statements of Cash Flows for the Six Months Ended June 30, 2019 (Dollars in thousands) |
|
Global Indemnity Limited (Parent co-obligor) |
|
|
GBLI Holdings, LLC (Subsidiary co-obligor) |
|
|
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) (1) |
|
|
Global Indemnity Limited Consolidated |
|
||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used for) operating activities |
|
$ |
|
|
|
$ |
( |
) |
|
$ |
|
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of fixed maturities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of equity securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from maturity of fixed maturities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from other invested assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts paid in connection with derivatives |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Purchases of fixed maturities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Purchases of equity securities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Purchases of other invested assets |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
( |
) |
Net cash provided by (used for) investing activities |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net borrowings under margin borrowing facility |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid to shareholders |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
Purchase of A ordinary shares |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
Net cash provided by (used for) financing activities |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
(1) |
Includes all other subsidiaries of Global Indemnity Limited and eliminations |
16. |
New Accounting Pronouncements |
Accounting Standards Adopted in 2020
In March, 2020, the FASB issued new accounting guidance that affected a variety of topics in the Codification. The amendments in this update are meant to make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarification. This guidance is effective for all fiscal years beginning after December 15, 2019 including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2020. The adoption of this new accounting guidance did not have a material impact on the Company’s financial condition, results of operations, or cash flows.
In August, 2018, the FASB issued new accounting guidance which removed, modified, and added certain disclosures related to Topic 820, Fair Value. The affected disclosures are related to transfers between fair value levels, level 3 assets, and investments in certain entities that calculate net asset value. This guidance is effective for all fiscal years beginning after December 15, 2019 including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2020. The adoption of this new accounting guidance did not have a material impact on the Company’s financial condition, results of operations, or cash flows.
47
GLOBAL INDEMNITY LIMITED
In January, 2017, the FASB issued updated guidance that simplifies how an entity is required to test goodwill for impairment by eliminating the requirement to calculate the implied fair value of goodwill (i.e. Step 2 of the current goodwill impairment test). Under the new amendments, an entity may still first assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. If determined to be necessary, the quantitative impairment test shall be used to identify goodwill impairment and measure the amount of a goodwill impairment loss to be recognized, if any. A goodwill impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. This guidance is effective for public business entities’ annual or interim goodwill impairment testing in fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020. The adoption of this new accounting guidance did not have a material impact on the Company’s financial condition, results of operations, or cash flows.
In June, 2016, the FASB issued new accounting guidance addressing the measurement of credit losses on financial instruments. The new guidance requires financial assets measured at amortized cost, which includes but are not limited to premiums receivable and reinsurance receivables, to be presented at the net amount expected to be collected over the life of the asset using an allowance for credit losses. Changes in the allowance are charged to earnings. The measurement of expected credit losses should consider relevant information about past events, including historical experience, current information, as well as reasonable and supportable forecasts that affect the collectability of the financial assets. For available for sale debt securities, credit losses should be measured similar to the old guidance; however, the new guidance requires that credit losses be presented as an allowance rather than as a write-down of the amortized cost basis of the impaired securities and allows for the reversal of credit losses in the current period net income. In addition, the Company made certain accounting policy elections related to accrued interest receivables which are described in Note 3. The Company adopted this new accounting guidance on January 1, 2020 using a modified-retrospective approach. The adoption of this new accounting guidance and the impact on the Company’s financial condition, results of operations, and cash flows is described primarily within Note 3 and Note 6.
Please see Note 22 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2019 Annual Report on Form 10-K for more information on accounting pronouncements issued but not yet adopted.
17.Subsequent Events
Please see Note 10 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2019 Annual Report on Form 10-K for more information on the Company’s 2045 Notes.
48
GLOBAL INDEMNITY LIMITED
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and accompanying notes of Global Indemnity included elsewhere in this report. Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to the Company’s plans and strategy, constitutes forward-looking statements that involve risks and uncertainties. Please see "Cautionary Note Regarding Forward-Looking Statements" at the end of this Item 2 for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained herein. For more information regarding the Company’s business and operations, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
Recent Developments
COVID-19
The global outbreak of COVID-19 presents significant risks to the Company which the Company is not able to fully evaluate at the current time. The COVID-19 pandemic may affect the Company’s operations in the third quarter and may continue to do so indefinitely, thereafter. The Company may experience reductions in premium volume, delays in the collection of premiums, and increases in COVID-19 related claims. The volatility in the global financial markets may negatively impact the market value of the Company’s investment portfolio and may result in net realized investment losses as well as a decline in the liquidity of the investment portfolio. All of these factors may have far reaching impacts on the Company’s business, operations, and financial results and conditions, directly and indirectly, including without limitation impacts on the health of the Company’s management and employees, distribution, marketing, customers and agents, and on the overall economy. The scope and nature of these impacts, most of which are beyond the Company’s control, continue to evolve and such effects could exist for an extended period of time even after the pandemic ends.
Proposed Redomestication
On June 23, 2020, the Company announced that the Company’s Board of Directors approved a plan to redomesticate the Company and its Bermuda subsidiary, Global Indemnity Reinsurance, to the United States. The Board also approved the filing of a preliminary proxy statement with the U.S. Securities and Exchange Commission in connection with a special meeting of the Company’s shareholders that will be called to consider and approve the redomestication plan. The preliminary proxy was filed on June 23, 2020. This plan to redomesticate is also awaiting regulatory approval. If approved by its shareholders and regulatory approval is received, the Company anticipates that the redomestication will close on or around 12:01am (Eastern Time) on August 28, 2020. Please see Note 2 of the notes to the consolidated financial statements in Item 1 of Part I of this report for additional information on the proposed redomestication.
Redemption of Debt
In July 2020, the Company notified the Trustee of the 7.75% Subordinated Notes due 2045 (“2045 Notes”) that it has elected to redeem the entire $100 million in aggregate principal amount of the outstanding 2045 Notes plus accrued and unpaid interest on the 2045 Notes redeemed to, but not including, the Redemption Date of August 15, 2020.
Dividend
During 2020, the Board of Directors approved a dividend payment of $0.25 per ordinary share to all shareholders of record on the close of business on March 24, 2020 and June 23, 2020. Dividends paid were $7.1 million during the six months ended June 30, 2020.
Overview
The Company’s Commercial Specialty segment sells its property and casualty insurance products through a group of approximately 180 professional general agencies that have limited quoting and binding authority, as well as a number of wholesale insurance brokers who in turn sell the Company’s insurance products to insureds through retail insurance brokers. Commercial Specialty operates predominantly in the excess and surplus lines marketplace. The Company manages its
49
GLOBAL INDEMNITY LIMITED
Commercial Specialty segment via product classifications. These product classifications are: 1) Penn-America, which includes property and general liability products for small commercial businesses sold through a select network of wholesale general agents with specific binding authority; 2) United National, which includes property, general liability, and professional lines products sold through program administrators with specific binding authority; 3) Diamond State, which includes property, casualty, and professional lines products sold through wholesale brokers and program administrators with specific binding authority; and 4) Vacant Express, which primarily insures dwellings which are currently vacant, undergoing renovation, or are under construction and is sold through aggregators, brokers, and retail agents.
The Company’s Specialty Property segment, via American Reliable, offers specialty personal lines property and casualty insurance products through a group of approximately 230 agents, primarily comprised of wholesale general agents, with specific binding authority in the admitted marketplace.
The Company’s Farm, Ranch, & Stable segment, via American Reliable, provides specialized property and casualty coverage including Commercial Farm Auto and Excess/Umbrella Coverage for the agriculture industry as well as specialized insurance products for the equine mortality and equine major medical industry on an admitted basis. These insurance products are sold through a group of approximately 210 agents, primarily comprised of wholesalers and retail agents, with a selected number having specific binding authority.
The Company’s Reinsurance Operations, consisting solely of the operations of Global Indemnity Reinsurance, currently provides reinsurance solutions through brokers and on a direct basis. Global Indemnity Reinsurance is a Bermuda based treaty reinsurer for specialty property and casualty insurance and reinsurance companies. Global Indemnity Reinsurance conducts business in Bermuda and is focused on using its capital capacity to write niche and specialty-focused treaties and business which meet the Company’s risk tolerance and return thresholds. Assuming the Company redomesticates, which is expected to occur in the third quarter of 2020, Global Indemnity Reinsurance’s business will be assumed by the Company’s existing U.S. insurance company subsidiaries.
The Company derives its revenues primarily from premiums paid on insurance policies that it writes and from income generated by its investment portfolio, net of fees paid for investment management services. The amount of insurance premiums that the Company receives is a function of the amount and type of policies it writes, as well as prevailing market prices.
The Company’s expenses include losses and loss adjustment expenses, acquisition costs and other underwriting expenses, corporate and other operating expenses, interest, investment expenses, and income taxes. Losses and loss adjustment expenses are estimated by management and reflect the Company’s best estimate of ultimate losses and costs arising during the reporting period and revisions of prior period estimates. The Company records its best estimate of losses and loss adjustment expenses considering both internal and external actuarial analyses of the estimated losses the Company expects to incur on the insurance policies it writes. The ultimate losses and loss adjustment expenses will depend on the actual costs to resolve claims. Acquisition costs consist principally of commissions and premium taxes that are typically a percentage of the premiums on the insurance policies the Company writes, net of ceding commissions earned from reinsurers. Other underwriting expenses consist primarily of personnel expenses and general operating expenses related to underwriting activities. Corporate and other operating expenses are comprised primarily of outside legal fees, other professional and accounting fees, directors’ fees, management fees & advisory fees, and salaries and benefits for company personnel whose services relate to the support of corporate activities. Interest expense is primarily comprised of amounts due on outstanding debt.
Critical Accounting Estimates and Policies
The Company’s consolidated financial statements are prepared in conformity with GAAP, which require it to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and assumptions.
The most critical accounting policies involve significant estimates and include those used in determining the liability for unpaid losses and loss adjustment expenses, recoverability of reinsurance receivables, investments, fair value measurements, goodwill and intangible assets, deferred acquisition costs, and taxation. For a detailed discussion on each of these policies,
50
GLOBAL INDEMNITY LIMITED
please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. There have been no significant changes to any of these policies or underlying methodologies during the current year except for the following.
Effective January 1, 2020, the Company adopted new accounting guidance related to the measurement of credit losses on financial instruments. In conjunction with implementing this new guidance, the Company modified its impairment process as well as made certain accounting policy elections related to accrued interest receivables. Please see Note 3 of the notes to the consolidated financial statements in Item 1 of Part I of this report for a discussion on the Company’s impairment process and accounting policy elections related to accrued interest receivable. Please see Note 6 for a discussion on the Company’s policies related to the evaluation process when estimating expected credit losses for premiums receivable and reinsurance receivables.
Results of Operations
The following table summarizes the Company’s results for the quarters and six months ended June 30, 2020 and 2019:
|
|
Quarters Ended June 30, |
|
|
% |
|
|
Six Months Ended June 30, |
|
|
% |
|
||||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
||||||
Gross written premiums |
|
$ |
164,549 |
|
|
$ |
179,321 |
|
|
|
(8.2 |
%) |
|
$ |
320,273 |
|
|
$ |
321,522 |
|
|
|
(0.4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net written premiums |
|
$ |
147,264 |
|
|
$ |
159,069 |
|
|
|
(7.4 |
%) |
|
$ |
286,376 |
|
|
$ |
282,485 |
|
|
|
1.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earned premiums |
|
$ |
141,847 |
|
|
$ |
128,201 |
|
|
|
10.6 |
% |
|
$ |
286,315 |
|
|
$ |
250,290 |
|
|
|
14.4 |
% |
Other income |
|
|
766 |
|
|
|
522 |
|
|
|
46.7 |
% |
|
|
931 |
|
|
|
1,010 |
|
|
|
(7.8 |
%) |
Total revenues |
|
|
142,613 |
|
|
|
128,723 |
|
|
|
10.8 |
% |
|
|
287,246 |
|
|
|
251,300 |
|
|
|
14.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
67,297 |
|
|
|
70,075 |
|
|
|
(4.0 |
%) |
|
|
144,944 |
|
|
|
128,396 |
|
|
|
12.9 |
% |
Acquisition costs and other underwriting expenses |
|
|
53,578 |
|
|
|
50,534 |
|
|
|
6.0 |
% |
|
|
109,990 |
|
|
|
100,277 |
|
|
|
9.7 |
% |
Underwriting income |
|
|
21,738 |
|
|
|
8,114 |
|
|
|
167.9 |
% |
|
|
32,312 |
|
|
|
22,627 |
|
|
|
42.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income (loss) |
|
|
(2,359 |
) |
|
|
13,826 |
|
|
|
(117.1 |
%) |
|
|
7,770 |
|
|
|
21,045 |
|
|
|
(63.1 |
%) |
Net realized investment gains (losses) |
|
|
38,507 |
|
|
|
3,590 |
|
|
NM |
|
|
|
(29,655 |
) |
|
|
13,980 |
|
|
NM |
|
||
Corporate and other operating expenses |
|
|
(8,618 |
) |
|
|
(4,639 |
) |
|
|
85.8 |
% |
|
|
(12,841 |
) |
|
|
(7,844 |
) |
|
|
63.7 |
% |
Interest expense |
|
|
(4,712 |
) |
|
|
(5,042 |
) |
|
|
(6.5 |
%) |
|
|
(9,577 |
) |
|
|
(10,065 |
) |
|
|
(4.8 |
%) |
Income (loss) before income taxes |
|
|
44,556 |
|
|
|
15,849 |
|
|
|
181.1 |
% |
|
|
(11,991 |
) |
|
|
39,743 |
|
|
|
(130.2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) |
|
|
7,005 |
|
|
|
1,186 |
|
|
NM |
|
|
|
(4,964 |
) |
|
|
5,480 |
|
|
NM |
|
||
Net income (loss) |
|
$ |
37,551 |
|
|
$ |
14,663 |
|
|
|
156.1 |
% |
|
$ |
(7,027 |
) |
|
$ |
34,263 |
|
|
|
(120.5 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio (1): |
|
|
47.4 |
% |
|
|
54.6 |
% |
|
|
|
|
|
|
50.6 |
% |
|
|
51.3 |
% |
|
|
|
|
Expense ratio (2) |
|
|
37.8 |
% |
|
|
39.4 |
% |
|
|
|
|
|
|
38.4 |
% |
|
|
40.1 |
% |
|
|
|
|
Combined ratio (3) |
|
|
85.2 |
% |
|
|
94.0 |
% |
|
|
|
|
|
|
89.0 |
% |
|
|
91.4 |
% |
|
|
|
|
NM – not meaningful
(1) |
The loss ratio is a GAAP financial measure that is generally viewed in the insurance industry as an indicator of underwriting profitability and is calculated by dividing net losses and loss adjustment expenses by net earned premiums. |
(2) |
The expense ratio is a GAAP financial measure that is calculated by dividing the sum of acquisition costs and other underwriting expenses by net earned premiums. |
(3) |
The combined ratio is a GAAP financial measure and is the sum of the Company’s loss and expense ratios. |
51
GLOBAL INDEMNITY LIMITED
Premiums
The following table summarizes the change in premium volume by business segment:
|
|
Quarters Ended June 30, |
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
% Change |
|
|
2020 |
|
|
2019 |
|
|
% Change |
|
||||||
Gross written premiums (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Specialty (3) |
|
$ |
87,297 |
|
|
$ |
77,079 |
|
|
|
13.3 |
% |
|
$ |
168,128 |
|
|
$ |
141,292 |
|
|
|
19.0 |
% |
Specialty Property (3) |
|
|
37,978 |
|
|
|
46,486 |
|
|
|
(18.3 |
%) |
|
|
73,221 |
|
|
|
86,160 |
|
|
|
(15.0 |
%) |
Farm, Ranch, & Stable (3) |
|
|
23,222 |
|
|
|
23,697 |
|
|
|
(2.0 |
%) |
|
|
45,355 |
|
|
|
44,462 |
|
|
|
2.0 |
% |
Reinsurance (4) |
|
|
16,052 |
|
|
|
32,059 |
|
|
|
(49.9 |
%) |
|
|
33,569 |
|
|
|
49,608 |
|
|
|
(32.3 |
%) |
Total gross written premiums |
|
$ |
164,549 |
|
|
$ |
179,321 |
|
|
|
(8.2 |
%) |
|
$ |
320,273 |
|
|
$ |
321,522 |
|
|
|
(0.4 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ceded written premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Specialty (3) |
|
$ |
9,417 |
|
|
$ |
9,972 |
|
|
|
(5.6 |
%) |
|
$ |
17,765 |
|
|
$ |
19,015 |
|
|
|
(6.6 |
%) |
Specialty Property (3) |
|
|
4,903 |
|
|
|
6,658 |
|
|
|
(26.4 |
%) |
|
|
10,139 |
|
|
|
13,120 |
|
|
|
(22.7 |
%) |
Farm, Ranch, & Stable (3) |
|
|
2,965 |
|
|
|
3,622 |
|
|
|
(18.1 |
%) |
|
|
5,993 |
|
|
|
6,895 |
|
|
|
(13.1 |
%) |
Reinsurance (4) |
|
|
— |
|
|
|
— |
|
|
|
— |
% |
|
|
— |
|
|
|
7 |
|
|
|
(100.0 |
%) |
Total ceded written premiums |
|
$ |
17,285 |
|
|
$ |
20,252 |
|
|
|
(14.7 |
%) |
|
$ |
33,897 |
|
|
$ |
39,037 |
|
|
|
(13.2 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net written premiums (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Specialty (3) |
|
$ |
77,880 |
|
|
$ |
67,107 |
|
|
|
16.1 |
% |
|
$ |
150,363 |
|
|
$ |
122,277 |
|
|
|
23.0 |
% |
Specialty Property (3) |
|
|
33,075 |
|
|
|
39,828 |
|
|
|
(17.0 |
%) |
|
|
63,082 |
|
|
|
73,040 |
|
|
|
(13.6 |
%) |
Farm, Ranch, & Stable (3) |
|
|
20,257 |
|
|
|
20,075 |
|
|
|
0.9 |
% |
|
|
39,362 |
|
|
|
37,567 |
|
|
|
4.8 |
% |
Reinsurance (4) |
|
|
16,052 |
|
|
|
32,059 |
|
|
|
(49.9 |
%) |
|
|
33,569 |
|
|
|
49,601 |
|
|
|
(32.3 |
%) |
Total net written premiums |
|
$ |
147,264 |
|
|
$ |
159,069 |
|
|
|
(7.4 |
%) |
|
$ |
286,376 |
|
|
$ |
282,485 |
|
|
|
1.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earned premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Specialty (3) |
|
$ |
69,728 |
|
|
$ |
56,705 |
|
|
|
23.0 |
% |
|
$ |
137,442 |
|
|
$ |
112,346 |
|
|
|
22.3 |
% |
Specialty Property (3) |
|
|
33,543 |
|
|
|
35,567 |
|
|
|
(5.7 |
%) |
|
|
67,759 |
|
|
|
70,186 |
|
|
|
(3.5 |
%) |
Farm, Ranch, & Stable (3) |
|
|
19,030 |
|
|
|
17,350 |
|
|
|
9.7 |
% |
|
|
37,713 |
|
|
|
34,472 |
|
|
|
9.4 |
% |
Reinsurance (4) |
|
|
19,546 |
|
|
|
18,579 |
|
|
|
5.2 |
% |
|
|
43,401 |
|
|
|
33,286 |
|
|
|
30.4 |
% |
Total net earned premiums |
|
$ |
141,847 |
|
|
$ |
128,201 |
|
|
|
10.6 |
% |
|
$ |
286,315 |
|
|
$ |
250,290 |
|
|
|
14.4 |
% |
(1) |
Gross written premiums represent the amount received or to be received for insurance policies written without reduction for reinsurance costs, ceded premiums, or other deductions. |
(2) |
Net written premiums equal gross written premiums less ceded written premiums. |
(3) |
Includes business ceded to the Company’s Reinsurance Operations under a quota share agreement. This quota share agreement was cancelled effective January 1, 2018. |
(4) |
External business only, excluding business assumed from affiliates. |
Gross written premiums decreased by 8.2% and 0.4% for the quarter and six months ended June 30, 2020 as compared to same period in 2019. The decrease is mainly due to the reduction of catastrophe exposed business within both Specialty Property and Farm, Ranch, & Stable, reduction in business not providing an adequate return on capital within Specialty Property, and Reinsurance Operations’ non-renewal of its property catastrophe treaties. This reduction in premiums was partially offset by organic growth from existing agents, increased pricing, and several new programs within Commercial Specialty, rate increases and new agent appointments within Farm, Ranch, & Stable, and growth of the new casualty treaty entered into by Reinsurance Operations in 2019.
52
GLOBAL INDEMNITY LIMITED
Net Retention
The ratio of net written premiums to gross written premiums is referred to as the Company’s net premium retention. The Company’s net premium retention is summarized by segments as follows:
|
|
Quarters Ended June 30, |
|
|
Point |
|
|
Six Months Ended June 30, |
|
|
Point |
|
||||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
||||||
Commercial Specialty |
|
|
89.2 |
% |
|
|
87.1 |
% |
|
|
2.1 |
|
|
|
89.4 |
% |
|
|
86.5 |
% |
|
|
2.9 |
|
Specialty Property |
|
|
87.1 |
% |
|
|
85.7 |
% |
|
|
1.4 |
|
|
|
86.2 |
% |
|
|
84.8 |
% |
|
|
1.4 |
|
Farm, Ranch, & Stable |
|
|
87.2 |
% |
|
|
84.7 |
% |
|
|
2.5 |
|
|
|
86.8 |
% |
|
|
84.5 |
% |
|
|
2.3 |
|
Reinsurance |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
— |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
— |
|
Total |
|
|
89.5 |
% |
|
|
88.7 |
% |
|
|
0.8 |
|
|
|
89.4 |
% |
|
|
87.9 |
% |
|
|
1.5 |
|
The net premium retention for the quarter and six months ended June 30, 2020 increased by 0.8 points and 1.5 points, respectively, as compared to the same period in 2019. This increase in retention is primarily driven by the restructuring of the Company’s catastrophe reinsurance treaties as well as a change in the mix of business.
Net Earned Premiums
Net earned premiums within the Commercial Specialty segment increased by 23.0% and 22.3% for the quarter and six months ended June 30, 2020, respectively, as compared to the same period in 2019. The increase in net earned premiums was primarily due to a growth in premiums written as a result of organic growth from existing agents, pricing increases, and several new programs. Property net earned premiums were $31.9 million and $25.9 million for the quarters ended June 30, 2020 and 2019, respectively, and $62.4 million and $54.0 million for the six months ended June 30, 2020 and 2019, respectively. Casualty net earned premiums were $37.8 million and $30.8 million for the quarters ended June 30, 2020 and 2019, respectively, and $75.0 million and $58.3 million for the six months ended June 30, 2020 and 2019, respectively.
Net earned premiums within the Specialty Property segment decreased by 5.7% and 3.5% for the quarter and six months ended June 30, 2020, respectively, as compared to the same period in 2019 primarily due to a continued reduction of catastrophe exposed business and a reduction in business not providing an adequate return on capital. Property net earned premiums were $31.2 million and $32.8 million for the quarters ended June 30, 2020 and 2019, respectively, and $62.8 million and $64.7 million for the six months ended June 30, 2020 and 2019, respectively. Casualty net earned premiums were $2.4 million and $2.8 million for the quarters ended June 30, 2020 and 2019, respectively, and $4.9 million and $5.5 million for the six months ended June 30, 2020 and 2019, respectively.
Net earned premiums within the Farm, Ranch, & Stable segment increased by 9.7% and 9.4% for the quarter and six months ended June 30, 2020, respectively, as compared to the same period in 2019. The increase in net earned premiums was primarily due to a growth in premiums written in prior periods as a result of rate increases and new agent appointments. Property net earned premiums were $13.7 million and $12.3 million for the quarters ended June 30, 2020 and 2019, respectively, and $27.1 million and $24.6 million for the six months ended June 30, 2020 and 2019, respectively. Casualty net earned premiums were $5.3 million and $5.0 million for the quarters ended June 30, 2020 and 2019, respectively, and $10.6 million and $9.9 million for the six months ended June 30, 2020 and 2019, respectively.
Net earned premiums within the Reinsurance Operations segment increased by 5.2% and 30.4% for the quarter and six months ended June 30, 2020, respectively, as compared to the same period in 2019 primarily due to the new casualty treaty entered into during 2019 partially offset by the non-renewal of its property catastrophe treaties. Property net earned premiums were $9.1 million and $14.4 million for the quarters ended June 30, 2020 and 2019, respectively, and $19.0 million and $26.8 million for the six months ended June 30, 2020 and 2019, respectively. Casualty net earned premiums were $10.5 million and $4.2 million for the quarters ended June 30, 2020 and 2019, respectively, and $24.4 million and $6.5 million for the six months ended June 30, 2020 and 2019, respectively.
53
GLOBAL INDEMNITY LIMITED
Reserves
Management’s best estimate at June 30, 2020 was recorded as the loss reserve. Management’s best estimate is as of a particular point in time and is based upon known facts, the Company’s actuarial analyses, current law, and the Company’s judgment. This resulted in carried gross and net reserves of $651.1 million and $563.9 million, respectively, as of June 30, 2020. A breakout of the Company’s gross and net reserves, as of June 30, 2020, is as follows:
|
|
Gross Reserves |
|
|||||||||
(Dollars in thousands) |
|
Case |
|
|
IBNR (1) |
|
|
Total |
|
|||
Commercial Specialty |
|
$ |
129,107 |
|
|
$ |
278,698 |
|
|
$ |
407,805 |
|
Specialty Property |
|
|
13,872 |
|
|
|
29,682 |
|
|
|
43,554 |
|
Farm, Ranch, & Stable |
|
|
14,128 |
|
|
|
36,652 |
|
|
|
50,780 |
|
Reinsurance Operations |
|
|
58,221 |
|
|
|
90,713 |
|
|
|
148,934 |
|
Total |
|
$ |
215,328 |
|
|
$ |
435,745 |
|
|
$ |
651,073 |
|
|
|
Net Reserves (2) |
|
|||||||||
(Dollars in thousands) |
|
Case |
|
|
IBNR (1) |
|
|
Total |
|
|||
Commercial Specialty |
|
$ |
103,823 |
|
|
$ |
236,916 |
|
|
$ |
340,739 |
|
Specialty Property |
|
|
9,627 |
|
|
|
24,871 |
|
|
|
34,498 |
|
Farm, Ranch, & Stable |
|
|
10,913 |
|
|
|
28,768 |
|
|
|
39,681 |
|
Reinsurance Operations |
|
|
58,221 |
|
|
|
90,713 |
|
|
|
148,934 |
|
Total |
|
$ |
182,584 |
|
|
$ |
381,268 |
|
|
$ |
563,852 |
|
(1) |
Losses incurred but not reported, including the expected future emergence of case reserves. |
(2) |
Does not include reinsurance receivable on paid losses. |
Each reserve category has an implicit frequency and severity for each accident year as a result of the various assumptions made. If the actual levels of loss frequency and severity are higher or lower than expected, the ultimate losses will be different than management’s best estimate. For most of its reserve categories, the Company believes that frequency can be predicted with greater accuracy than severity. Therefore, the Company believes management’s best estimate is more likely influenced by changes in severity than frequency. The following table, which the Company believes reflects a reasonable range of variability around its best estimate based on historical loss experience and management’s judgment, reflects the impact of changes (which could be favorable or unfavorable) in frequency and severity on the Company’s current accident year net loss estimate of $164.9 million for claims occurring during the six months ended June 30, 2020:
|
|
|
|
|
|
Severity Change |
|
|||||||||||||||||
(Dollars in thousands) |
|
|
-10% |
|
|
-5% |
|
|
0% |
|
|
5% |
|
|
10% |
|
||||||||
Frequency Change |
|
-5% |
|
|
$ |
(23,911 |
) |
|
$ |
(16,078 |
) |
|
$ |
(8,245 |
) |
|
$ |
(412 |
) |
|
$ |
7,420 |
|
|
|
|
-3% |
|
|
|
(20,942 |
) |
|
|
(12,945 |
) |
|
|
(4,947 |
) |
|
|
3,051 |
|
|
|
11,048 |
|
|
|
|
-2% |
|
|
|
(19,458 |
) |
|
|
(11,378 |
) |
|
|
(3,298 |
) |
|
|
4,782 |
|
|
|
12,862 |
|
|
|
|
-1% |
|
|
|
(17,974 |
) |
|
|
(9,812 |
) |
|
|
(1,649 |
) |
|
|
6,514 |
|
|
|
14,676 |
|
|
|
|
0% |
|
|
|
(16,490 |
) |
|
|
(8,245 |
) |
|
|
— |
|
|
|
8,245 |
|
|
|
16,490 |
|
|
|
|
1% |
|
|
|
(15,006 |
) |
|
|
(6,678 |
) |
|
|
1,649 |
|
|
|
9,976 |
|
|
|
18,304 |
|
|
|
|
2% |
|
|
|
(13,522 |
) |
|
|
(5,112 |
) |
|
|
3,298 |
|
|
|
11,708 |
|
|
|
20,118 |
|
|
|
|
3% |
|
|
|
(12,038 |
) |
|
|
(3,545 |
) |
|
|
4,947 |
|
|
|
13,439 |
|
|
|
21,932 |
|
|
|
|
5% |
|
|
|
(9,069 |
) |
|
|
(412 |
) |
|
|
8,245 |
|
|
|
16,902 |
|
|
|
25,560 |
|
The Company’s net reserves for losses and loss adjustment expenses of $563.9 million as of June 30, 2020 relate to multiple accident years. Therefore, the impact of changes in frequency and severity for more than one accident year could be higher or lower than the amounts reflected above.
54
GLOBAL INDEMNITY LIMITED
Underwriting Results
Commercial Specialty
The components of income from the Company’s Commercial Specialty segment and corresponding underwriting ratios are as follows:
|
|
Quarters Ended June 30, |
|
|
% |
|
|
Six Months Ended June 30, |
|
|
% |
|
||||||||||||
(Dollars in thousands) |
|
2020 (1) |
|
|
2019 (1) |
|
|
Change |
|
|
2020 (1) |
|
|
2019 (1) |
|
|
Change |
|
||||||
Gross written premiums |
|
$ |
87,297 |
|
|
$ |
77,079 |
|
|
|
13.3 |
% |
|
$ |
168,128 |
|
|
$ |
141,292 |
|
|
|
19.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net written premiums |
|
$ |
77,880 |
|
|
$ |
67,107 |
|
|
|
16.1 |
% |
|
$ |
150,363 |
|
|
$ |
122,277 |
|
|
|
23.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earned premiums |
|
$ |
69,728 |
|
|
$ |
56,705 |
|
|
|
23.0 |
% |
|
$ |
137,442 |
|
|
$ |
112,346 |
|
|
|
22.3 |
% |
Total revenues |
|
|
69,728 |
|
|
|
56,705 |
|
|
|
23.0 |
% |
|
|
137,442 |
|
|
|
112,346 |
|
|
|
22.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
28,877 |
|
|
|
32,691 |
|
|
|
(11.7 |
%) |
|
|
66,312 |
|
|
|
54,342 |
|
|
|
22.0 |
% |
Acquisition costs and other underwriting expenses |
|
|
26,516 |
|
|
|
22,890 |
|
|
|
15.8 |
% |
|
|
52,509 |
|
|
|
45,702 |
|
|
|
14.9 |
% |
Underwriting income |
|
$ |
14,335 |
|
|
$ |
1,124 |
|
|
NM |
|
|
$ |
18,621 |
|
|
$ |
12,302 |
|
|
|
51.4 |
% |
|
|
Quarters Ended June 30, |
|
|
Point |
|
|
Six Months Ended June 30, |
|
|
Point |
|
||||||||||||
|
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
||||||
Underwriting Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year |
|
|
61.8 |
% |
|
|
58.0 |
% |
|
|
3.8 |
|
|
|
58.6 |
% |
|
|
54.5 |
% |
|
|
4.1 |
|
Prior accident year |
|
|
(20.4 |
%) |
|
|
(0.4 |
%) |
|
|
(20.0 |
) |
|
|
(10.4 |
%) |
|
|
(6.1 |
%) |
|
|
(4.3 |
) |
Calendar year loss ratio |
|
|
41.4 |
% |
|
|
57.6 |
% |
|
|
(16.2 |
) |
|
|
48.2 |
% |
|
|
48.4 |
% |
|
|
(0.2 |
) |
Expense ratio |
|
|
38.0 |
% |
|
|
40.4 |
% |
|
|
(2.4 |
) |
|
|
38.2 |
% |
|
|
40.7 |
% |
|
|
(2.5 |
) |
Combined ratio |
|
|
79.4 |
% |
|
|
98.0 |
% |
|
|
(18.6 |
) |
|
|
86.4 |
% |
|
|
89.1 |
% |
|
|
(2.7 |
) |
NM – not meaningful
(1) |
Includes business ceded to the Company’s Reinsurance Operations under a quota share agreement. This quota share agreement was cancelled effective January 1, 2018. |
55
GLOBAL INDEMNITY LIMITED
Reconciliation of non-GAAP financial measures and ratios
The table below reconciles the non-GAAP measures or ratios, which excludes the impact of prior accident year adjustments, to its most directly comparable GAAP measure or ratio. The Company believes the non-GAAP measures or ratios are useful to investors when evaluating the Company's underwriting performance as trends within Commercial Specialty may be obscured by prior accident year adjustments. These non-GAAP measures or ratios should not be considered as a substitute for its most directly comparable GAAP measure or ratio and does not reflect the overall underwriting profitability of the Company.
|
|
Quarters Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||||||||||||||||||
|
|
Losses $ |
|
|
Loss Ratio |
|
|
Losses $ |
|
|
Loss Ratio |
|
|
Losses $ |
|
|
Loss Ratio |
|
|
Losses $ |
|
|
Loss Ratio |
|
||||||||
Property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non catastrophe property losses and ratio excluding the effect of prior accident year (1) |
|
$ |
14,563 |
|
|
|
45.6 |
% |
|
$ |
11,322 |
|
|
|
43.6 |
% |
|
$ |
26,812 |
|
|
|
42.9 |
% |
|
$ |
22,053 |
|
|
|
40.8 |
% |
Effect of prior accident year |
|
|
689 |
|
|
|
2.2 |
% |
|
|
138 |
|
|
|
0.5 |
% |
|
|
330 |
|
|
|
0.5 |
% |
|
|
(975 |
) |
|
|
(1.8 |
%) |
Non catastrophe property losses and ratio (2) |
|
$ |
15,252 |
|
|
|
47.8 |
% |
|
$ |
11,460 |
|
|
|
44.1 |
% |
|
$ |
27,142 |
|
|
|
43.4 |
% |
|
$ |
21,078 |
|
|
|
39.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe losses and ratio excluding the effect of prior accident year (1) |
|
$ |
9,866 |
|
|
|
30.9 |
% |
|
$ |
3,891 |
|
|
|
15.0 |
% |
|
$ |
13,579 |
|
|
|
21.8 |
% |
|
$ |
5,357 |
|
|
|
9.9 |
% |
Effect of prior accident year |
|
|
5,099 |
|
|
|
16.0 |
% |
|
|
(99 |
) |
|
|
(0.4 |
%) |
|
|
5,437 |
|
|
|
8.7 |
% |
|
|
48 |
|
|
|
0.1 |
% |
Catastrophe losses and ratio (2) |
|
$ |
14,965 |
|
|
|
46.9 |
% |
|
$ |
3,792 |
|
|
|
14.6 |
% |
|
$ |
19,016 |
|
|
|
30.5 |
% |
|
$ |
5,405 |
|
|
|
10.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property losses and ratio excluding the effect of prior accident year (1) |
|
$ |
24,429 |
|
|
|
76.5 |
% |
|
$ |
15,213 |
|
|
|
58.6 |
% |
|
$ |
40,391 |
|
|
|
64.7 |
% |
|
$ |
27,410 |
|
|
|
50.7 |
% |
Effect of prior accident year |
|
|
5,788 |
|
|
|
18.2 |
% |
|
|
39 |
|
|
|
0.1 |
% |
|
|
5,767 |
|
|
|
9.2 |
% |
|
|
(927 |
) |
|
|
(1.7 |
%) |
Total property losses and ratio (2) |
|
$ |
30,217 |
|
|
|
94.7 |
% |
|
$ |
15,252 |
|
|
|
58.7 |
% |
|
$ |
46,158 |
|
|
|
73.9 |
% |
|
$ |
26,483 |
|
|
|
49.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casualty |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Casualty losses and ratio excluding the effect of prior accident year (1) |
|
$ |
18,697 |
|
|
|
49.4 |
% |
|
$ |
17,698 |
|
|
|
57.5 |
% |
|
$ |
40,170 |
|
|
|
53.6 |
% |
|
$ |
33,818 |
|
|
|
58.0 |
% |
Effect of prior accident year |
|
|
(20,037 |
) |
|
|
(53.0 |
%) |
|
|
(259 |
) |
|
|
(0.8 |
%) |
|
|
(20,016 |
) |
|
|
(26.7 |
%) |
|
|
(5,959 |
) |
|
|
(10.2 |
%) |
Total Casualty losses and ratio (2) |
|
$ |
(1,340 |
) |
|
|
(3.6 |
%) |
|
$ |
17,439 |
|
|
|
56.7 |
% |
|
$ |
20,154 |
|
|
|
26.9 |
% |
|
$ |
27,859 |
|
|
|
47.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net losses and loss adjustment expense and total loss ratio excluding the effect of prior accident year (1) |
|
$ |
43,126 |
|
|
|
61.8 |
% |
|
$ |
32,911 |
|
|
|
58.0 |
% |
|
$ |
80,561 |
|
|
|
58.6 |
% |
|
$ |
61,228 |
|
|
|
54.5 |
% |
Effect of prior accident year |
|
|
(14,249 |
) |
|
|
(20.4 |
%) |
|
|
(220 |
) |
|
|
(0.4 |
%) |
|
|
(14,249 |
) |
|
|
(10.4 |
%) |
|
|
(6,886 |
) |
|
|
(6.1 |
%) |
Total net losses and loss adjustment expense and total loss ratio (2) |
|
$ |
28,877 |
|
|
|
41.4 |
% |
|
$ |
32,691 |
|
|
|
57.6 |
% |
|
$ |
66,312 |
|
|
|
48.2 |
% |
|
$ |
54,342 |
|
|
|
48.4 |
% |
(1) |
Non-GAAP measure / ratio |
(2) |
Most directly comparable GAAP measure / ratio |
Premiums
See “Result of Operations” above for a discussion on consolidated premiums.
56
GLOBAL INDEMNITY LIMITED
Loss Ratio
The current accident year losses and loss ratio is summarized as follows:
|
|
Quarters Ended June 30, |
|
|
% |
|
|
Six Months Ended June 30, |
|
|
% |
|
||||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
||||||
Property losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-catastrophe |
|
$ |
14,563 |
|
|
$ |
11,322 |
|
|
|
28.6 |
% |
|
$ |
26,812 |
|
|
$ |
22,053 |
|
|
|
21.6 |
% |
Catastrophe |
|
|
9,866 |
|
|
|
3,891 |
|
|
|
153.6 |
% |
|
|
13,579 |
|
|
|
5,357 |
|
|
|
153.5 |
% |
Property losses |
|
|
24,429 |
|
|
|
15,213 |
|
|
|
60.6 |
% |
|
|
40,391 |
|
|
|
27,410 |
|
|
|
47.4 |
% |
Casualty losses |
|
|
18,697 |
|
|
|
17,698 |
|
|
|
5.6 |
% |
|
|
40,170 |
|
|
|
33,818 |
|
|
|
18.8 |
% |
Total accident year losses |
|
$ |
43,126 |
|
|
$ |
32,911 |
|
|
|
31.0 |
% |
|
$ |
80,561 |
|
|
$ |
61,228 |
|
|
|
31.6 |
% |
|
|
Quarters Ended June 30, |
|
|
Point |
|
|
Six Months Ended June 30, |
|
|
Point |
|
||||||||||||
|
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
||||||
Current accident year loss ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-catastrophe |
|
|
45.6 |
% |
|
|
43.6 |
% |
|
|
2.0 |
|
|
|
42.9 |
% |
|
|
40.8 |
% |
|
|
2.1 |
|
Catastrophe |
|
|
30.9 |
% |
|
|
15.0 |
% |
|
|
15.9 |
|
|
|
21.8 |
% |
|
|
9.9 |
% |
|
|
11.9 |
|
Property loss ratio |
|
|
76.5 |
% |
|
|
58.6 |
% |
|
|
17.9 |
|
|
|
64.7 |
% |
|
|
50.7 |
% |
|
|
14.0 |
|
Casualty loss ratio |
|
|
49.4 |
% |
|
|
57.5 |
% |
|
|
(8.1 |
) |
|
|
53.6 |
% |
|
|
58.0 |
% |
|
|
(4.4 |
) |
Total accident year loss ratio |
|
|
61.8 |
% |
|
|
58.0 |
% |
|
|
3.8 |
|
|
|
58.6 |
% |
|
|
54.5 |
% |
|
|
4.1 |
|
The current accident year non-catastrophe property loss ratio increased by 2.0 points during the quarter ended June 30, 2020 as compared to the same period in 2019 reflecting a higher claims frequency for the second accident quarter compared to last year.
The current accident year non-catastrophe property loss ratio increased by 2.1 points during the six months ended June 30, 2020 as compared to the same period in 2019 reflecting a higher claims frequency for the first six months compared to last year.
The current accident year catastrophe loss ratio increased by 15.9 points during the quarter ended June 30, 2020 as compared to the same period in 2019 due to a higher claims frequency and severity for the second accident quarter compared to last year.
The current accident year catastrophe loss ratio increased by 11.9 points during the six months ended June 30, 2020 as compared to the same period in 2019 due to a higher claims frequency and severity for the first six months compared to last year.
The current accident year casualty loss ratio improved by 8.1 points during the quarter ended June 30, 2020 as compared to the same period in 2019 due to a lower claims frequency for the second accident quarter compared to last year.
The current accident year casualty loss ratio improved by 4.4 points during the six months ended June 30, 2020 as compared to the same period in 2019 due to a lower claims frequency through the first six months compared to last year.
The calendar year loss ratio for the quarter and six months ended June 30, 2020 includes a decrease of $14.2 million, or 20.4 percentage points, and a decrease of $14.2 million, or 10.4 percentage points, respectively, related to reserve development on prior accident years. The calendar year loss ratio for the quarter and six months ended June 30, 2019 includes a decrease of $0.2 million, or 0.4 percentage points, and a decrease of $6.9 million, or 6.1 percentage points, respectively, related to reserve development on prior accident years. Please see Note 8 of the notes to the consolidated financial statements in Item 1 of Part I of this report for further discussion on prior accident year development.
57
GLOBAL INDEMNITY LIMITED
Expense Ratios
The expense ratio for the Company’s Commercial Specialty segment improved by 2.4 points from 40.4% for the quarter ended June 30, 2019 to 38.0% for the quarter ended June 30, 2020 and improved by 2.5 points from 40.7% for the six months ended June 30, 2019 to 38.2% for the six months ended June 30, 2020. The improvement in the expense ratio is primarily due to higher earned premiums.
COVID-19
COVID-19 could result in declines in business, non-payment of premiums, and increases in claims that could adversely affect Commercial Specialty’s business, financial condition, and results of operation.
There is risk that legislation could be passed which would require the Company to cover business interruption claims regardless of terms, exclusions including the virus exclusions contained within the Company’s Commercial Specialty policies, or other conditions included in these policies that would otherwise preclude coverage.
Specialty Property
The components of income and loss from the Company’s Specialty Property segment and corresponding underwriting ratios are as follows:
|
|
Quarters Ended June 30, |
|
|
% |
|
|
Six Months Ended June 30, |
|
|
% |
|
||||||||||||
(Dollars in thousands) |
|
2020 (1) |
|
|
2019 (1) |
|
|
Change |
|
|
2020 (1) |
|
|
2019 (1) |
|
|
Change |
|
||||||
Gross written premiums |
|
$ |
37,978 |
|
|
$ |
46,486 |
|
|
|
(18.3 |
%) |
|
$ |
73,221 |
|
|
$ |
86,160 |
|
|
|
(15.0 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net written premiums |
|
$ |
33,075 |
|
|
$ |
39,828 |
|
|
|
(17.0 |
%) |
|
$ |
63,082 |
|
|
$ |
73,040 |
|
|
|
(13.6 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earned premiums |
|
$ |
33,543 |
|
|
$ |
35,567 |
|
|
|
(5.7 |
%) |
|
$ |
67,759 |
|
|
$ |
70,186 |
|
|
|
(3.5 |
%) |
Other income |
|
|
429 |
|
|
|
498 |
|
|
|
(13.9 |
%) |
|
|
856 |
|
|
|
941 |
|
|
|
(9.0 |
%) |
Total revenues |
|
|
33,972 |
|
|
|
36,065 |
|
|
|
(5.8 |
%) |
|
|
68,615 |
|
|
|
71,127 |
|
|
|
(3.5 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
13,691 |
|
|
|
11,111 |
|
|
|
23.2 |
% |
|
|
31,189 |
|
|
|
31,614 |
|
|
|
(1.3 |
%) |
Acquisition costs and other underwriting expenses |
|
|
13,761 |
|
|
|
14,939 |
|
|
|
(7.9 |
%) |
|
|
27,993 |
|
|
|
29,592 |
|
|
|
(5.4 |
%) |
Underwriting income |
|
$ |
6,520 |
|
|
$ |
10,015 |
|
|
|
(34.9 |
%) |
|
$ |
9,433 |
|
|
$ |
9,921 |
|
|
|
(4.9 |
%) |
|
|
Quarters Ended June 30, |
|
|
Point |
|
|
Six Months Ended June 30, |
|
|
Point |
|
||||||||||||
|
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
||||||
Underwriting Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year |
|
|
54.5 |
% |
|
|
59.8 |
% |
|
|
(5.3 |
) |
|
|
52.8 |
% |
|
|
58.2 |
% |
|
|
(5.4 |
) |
Prior accident year |
|
|
(13.7 |
%) |
|
|
(28.5 |
%) |
|
|
14.8 |
|
|
|
(6.8 |
%) |
|
|
(13.2 |
%) |
|
|
6.4 |
|
Calendar year loss ratio |
|
|
40.8 |
% |
|
|
31.3 |
% |
|
|
9.5 |
|
|
|
46.0 |
% |
|
|
45.0 |
% |
|
|
1.0 |
|
Expense ratio |
|
|
41.0 |
% |
|
|
42.0 |
% |
|
|
(1.0 |
) |
|
|
41.3 |
% |
|
|
42.2 |
% |
|
|
(0.9 |
) |
Combined ratio |
|
|
81.8 |
% |
|
|
73.3 |
% |
|
|
8.5 |
|
|
|
87.3 |
% |
|
|
87.2 |
% |
|
|
0.1 |
|
(1) |
Includes business ceded to the Company’s Reinsurance Operations under a quota share agreement. This quota share agreement was cancelled effective January 1, 2018. |
58
GLOBAL INDEMNITY LIMITED
Reconciliation of non-GAAP financial measures and ratios
The table below reconciles the non-GAAP measures or ratios, which excludes the impact of prior accident year adjustments, to its most directly comparable GAAP measure or ratio. The Company believes the non-GAAP measures or ratios are useful to investors when evaluating the Company's underwriting performance as trends within Specialty Property may be obscured by prior accident year adjustments. These non-GAAP measures or ratios should not be considered as a substitute for its most directly comparable GAAP measure or ratio and does not reflect the overall underwriting profitability of the Company.
|
|
Quarters Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||||||||||||||||||
|
|
Losses $ |
|
|
Loss Ratio |
|
|
Losses $ |
|
|
Loss Ratio |
|
|
Losses $ |
|
|
Loss Ratio |
|
|
Losses |
|
|
Loss Ratio |
|
||||||||
Property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non catastrophe property losses and ratio excluding the effect of prior accident year (1) |
|
$ |
11,032 |
|
|
|
35.4 |
% |
|
$ |
17,274 |
|
|
|
52.7 |
% |
|
$ |
25,425 |
|
|
|
40.5 |
% |
|
$ |
34,013 |
|
|
|
52.5 |
% |
Effect of prior accident year |
|
|
(3,383 |
) |
|
|
(10.9 |
%) |
|
|
(124 |
) |
|
|
(0.4 |
%) |
|
|
(3,045 |
) |
|
|
(4.8 |
%) |
|
|
(180 |
) |
|
|
(0.3 |
%) |
Non catastrophe property losses and ratio (2) |
|
$ |
7,649 |
|
|
|
24.5 |
% |
|
$ |
17,150 |
|
|
|
52.3 |
% |
|
$ |
22,380 |
|
|
|
35.7 |
% |
|
$ |
33,833 |
|
|
|
52.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe losses and ratio excluding the effect of prior accident year (1) |
|
$ |
6,228 |
|
|
|
20.0 |
% |
|
$ |
2,394 |
|
|
|
7.3 |
% |
|
$ |
8,307 |
|
|
|
13.2 |
% |
|
$ |
4,084 |
|
|
|
6.3 |
% |
Effect of prior accident year |
|
|
178 |
|
|
|
0.6 |
% |
|
|
(9,838 |
) |
|
|
(30.0 |
%) |
|
|
209 |
|
|
|
0.3 |
% |
|
|
(8,989 |
) |
|
|
(13.9 |
%) |
Catastrophe losses and ratio (2) |
|
$ |
6,406 |
|
|
|
20.6 |
% |
|
$ |
(7,444 |
) |
|
|
(22.7 |
%) |
|
$ |
8,516 |
|
|
|
13.5 |
% |
|
$ |
(4,905 |
) |
|
|
(7.6 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property losses and ratio excluding the effect of prior accident year (1) |
|
$ |
17,260 |
|
|
|
55.4 |
% |
|
$ |
19,668 |
|
|
|
60.0 |
% |
|
$ |
33,732 |
|
|
|
53.7 |
% |
|
$ |
38,097 |
|
|
|
58.8 |
% |
Effect of prior accident year |
|
|
(3,205 |
) |
|
|
(10.3 |
%) |
|
|
(9,962 |
) |
|
|
(30.4 |
%) |
|
|
(2,836 |
) |
|
|
(4.5 |
%) |
|
|
(9,169 |
) |
|
|
(14.2 |
%) |
Total property losses and ratio (2) |
|
$ |
14,055 |
|
|
|
45.1 |
% |
|
$ |
9,706 |
|
|
|
29.6 |
% |
|
$ |
30,896 |
|
|
|
49.2 |
% |
|
$ |
28,928 |
|
|
|
44.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casualty |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Casualty losses and ratio excluding the effect of prior accident year (1) |
|
$ |
1,019 |
|
|
|
43.1 |
% |
|
$ |
1,591 |
|
|
|
57.7 |
% |
|
$ |
2,045 |
|
|
|
41.5 |
% |
|
$ |
2,761 |
|
|
|
50.6 |
% |
Effect of prior accident year |
|
|
(1,383 |
) |
|
|
(58.5 |
%) |
|
|
(186 |
) |
|
|
(6.7 |
%) |
|
|
(1,752 |
) |
|
|
(35.6 |
%) |
|
|
(75 |
) |
|
|
(1.4 |
%) |
Total Casualty losses and ratio (2) |
|
$ |
(364 |
) |
|
|
(15.4 |
%) |
|
$ |
1,405 |
|
|
|
51.0 |
% |
|
$ |
293 |
|
|
|
5.9 |
% |
|
$ |
2,686 |
|
|
|
49.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net losses and loss adjustment expense and total loss ratio excluding the effect of prior accident year (1) |
|
$ |
18,279 |
|
|
|
54.5 |
% |
|
$ |
21,259 |
|
|
|
59.8 |
% |
|
$ |
35,777 |
|
|
|
52.8 |
% |
|
$ |
40,858 |
|
|
|
58.2 |
% |
Effect of prior accident year |
|
|
(4,588 |
) |
|
|
(13.7 |
%) |
|
|
(10,148 |
) |
|
|
(28.5 |
%) |
|
|
(4,588 |
) |
|
|
(6.8 |
%) |
|
|
(9,244 |
) |
|
|
(13.2 |
%) |
Total net losses and loss adjustment expense and total loss ratio (2) |
|
$ |
13,691 |
|
|
|
40.8 |
% |
|
$ |
11,111 |
|
|
|
31.3 |
% |
|
$ |
31,189 |
|
|
|
46.0 |
% |
|
$ |
31,614 |
|
|
|
45.0 |
% |
(1) |
Non-GAAP measure / ratio |
(2) |
Most directly comparable GAAP measure / ratio |
Premiums
See “Result of Operations” above for a discussion on consolidated premiums.
Other Income
Other income was $0.4 million and $0.5 million for the quarters ended June 30, 2020 and 2019, respectively, and $0.9 million for both of the six months ended June 30, 2020 and 2019. Other income is primarily comprised of fee income.
59
GLOBAL INDEMNITY LIMITED
Loss Ratio
The current accident year losses and loss ratio is summarized as follows:
|
|
Quarters Ended June 30, |
|
|
% |
|
|
Six Months Ended June 30, |
|
|
% |
|
||||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
||||||
Property losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-catastrophe |
|
$ |
11,032 |
|
|
$ |
17,274 |
|
|
|
(36.1 |
%) |
|
$ |
25,425 |
|
|
$ |
34,013 |
|
|
|
(25.2 |
%) |
Catastrophe |
|
|
6,228 |
|
|
|
2,394 |
|
|
|
160.2 |
% |
|
|
8,307 |
|
|
|
4,084 |
|
|
|
103.4 |
% |
Property losses |
|
|
17,260 |
|
|
|
19,668 |
|
|
|
(12.2 |
%) |
|
|
33,732 |
|
|
|
38,097 |
|
|
|
(11.5 |
%) |
Casualty losses |
|
|
1,019 |
|
|
|
1,591 |
|
|
|
(36.0 |
%) |
|
|
2,045 |
|
|
|
2,761 |
|
|
|
(25.9 |
%) |
Total accident year losses |
|
$ |
18,279 |
|
|
$ |
21,259 |
|
|
|
(14.0 |
%) |
|
$ |
35,777 |
|
|
$ |
40,858 |
|
|
|
(12.4 |
%) |
|
|
Quarters Ended June 30, |
|
|
Point |
|
|
Six Months Ended June 30, |
|
|
Point |
|
||||||||||||
|
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
||||||
Current accident year loss ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-catastrophe |
|
|
35.4 |
% |
|
|
52.7 |
% |
|
|
(17.3 |
) |
|
|
40.5 |
% |
|
|
52.5 |
% |
|
|
(12.0 |
) |
Catastrophe |
|
|
20.0 |
% |
|
|
7.3 |
% |
|
|
12.7 |
|
|
|
13.2 |
% |
|
|
6.3 |
% |
|
|
6.9 |
|
Property loss ratio |
|
|
55.4 |
% |
|
|
60.0 |
% |
|
|
(4.6 |
) |
|
|
53.7 |
% |
|
|
58.8 |
% |
|
|
(5.1 |
) |
Casualty loss ratio |
|
|
43.1 |
% |
|
|
57.7 |
% |
|
|
(14.6 |
) |
|
|
41.5 |
% |
|
|
50.6 |
% |
|
|
(9.1 |
) |
Total accident year loss ratio |
|
|
54.5 |
% |
|
|
59.8 |
% |
|
|
(5.3 |
) |
|
|
52.8 |
% |
|
|
58.2 |
% |
|
|
(5.4 |
) |
The current accident year non-catastrophe property loss ratio improved by 17.3 points during the quarter ended June 30, 2020 as compared to the same period in 2019 reflecting a lower claims frequency in the second accident quarter and lower claims severity in the calendar quarter compared to last year.
The current accident year non-catastrophe property loss ratio improved by 12.0 points during the six months ended June 30, 2020 as compared to the same period in 2019 due to a lower claims frequency and severity through six months compared to last year.
The current accident year catastrophe loss ratio increased by 12.7 points during the quarter ended June 30, 2020 as compared to the same period in 2019 due to a higher claims frequency for the second accident quarter compared to last year.
The current accident year catastrophe loss ratio increased by 6.9 points during the six months ended June 30, 2020 as compared to the same period in 2019 due to a higher claims frequency and severity for the first six months compared to last year.
The current accident year casualty loss ratio improved by 14.6 points during the quarter ended June 30, 2020 as compared to the same period in 2019 reflecting a lower claims frequency in the second accident quarter compared to last year.
The current accident year casualty loss ratio improved by 9.1 points during the six months ended June 30, 2020 as compared to the same period in 2019 due to a lower claims frequency through six months compared to last year.
The calendar year loss ratio for the quarter and six months ended June 30, 2020 includes a decrease of $4.6 million, or 13.7 percentage points, and a decrease of $4.6 million, or 6.8 percentage points, respectively, related to reserve development on prior accident years. The calendar year loss ratio for the quarter and six months ended June 30, 2019 includes an decrease of $10.1 million, or 28.5 percentage points, and a decrease of $9.2 million, or 13.2 percentage points, respectively, related to reserve development on prior accident years. Please see Note 8 of the notes to the consolidated financial statements in Item 1 of Part I of this report for further discussion on prior accident year development.
Expense Ratios
The expense ratio for the Company’s Specialty Property segment improved 1.0 points from 42.0% for the quarter ended June 30, 2019 to 41.0% for the quarter ended June 30, 2020 and improved by 0.9 points from 42.2% for the six months ended
60
GLOBAL INDEMNITY LIMITED
June 30, 2019 to 41.3% for the six months ended June 30, 2020. The improvement in the expense ratio is primarily due to a reduction in travel and entertainment cost as well as advertising expenses.
COVID-19
COVID-19 could result in declines in business and non-payment of premiums that could adversely affect Specialty Property’s business, financial condition, and results of operation.
Farm, Ranch, & Stable
The components of income and loss from the Company’s Farm, Ranch, & Stable segment and corresponding underwriting ratios are as follows:
|
|
Quarters Ended June 30, |
|
|
% |
|
|
Six Months Ended June 30, |
|
|
% |
|
||||||||||||
(Dollars in thousands) |
|
2020 (1) |
|
|
2019 (1) |
|
|
Change |
|
|
2020 (1) |
|
|
2019 (1) |
|
|
Change |
|
||||||
Gross written premiums |
|
$ |
23,222 |
|
|
$ |
23,697 |
|
|
|
(2.0 |
%) |
|
$ |
45,355 |
|
|
$ |
44,462 |
|
|
|
2.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net written premiums |
|
$ |
20,257 |
|
|
$ |
20,075 |
|
|
|
0.9 |
% |
|
$ |
39,362 |
|
|
$ |
37,567 |
|
|
|
4.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earned premiums |
|
$ |
19,030 |
|
|
$ |
17,350 |
|
|
|
9.7 |
% |
|
$ |
37,713 |
|
|
$ |
34,472 |
|
|
|
9.4 |
% |
Other income |
|
|
36 |
|
|
|
32 |
|
|
|
12.5 |
% |
|
|
72 |
|
|
|
62 |
|
|
|
16.1 |
% |
Total revenues |
|
|
19,066 |
|
|
|
17,382 |
|
|
|
9.7 |
% |
|
|
37,785 |
|
|
|
34,534 |
|
|
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
13,439 |
|
|
|
13,126 |
|
|
|
2.4 |
% |
|
|
23,049 |
|
|
|
21,264 |
|
|
|
8.4 |
% |
Acquisition costs and other underwriting expenses |
|
|
7,606 |
|
|
|
7,345 |
|
|
|
3.6 |
% |
|
|
15,244 |
|
|
|
14,627 |
|
|
|
4.2 |
% |
Underwriting income |
|
$ |
(1,979 |
) |
|
$ |
(3,089 |
) |
|
|
35.9 |
% |
|
$ |
(508 |
) |
|
$ |
(1,357 |
) |
|
|
62.6 |
% |
|
|
Quarters Ended June 30, |
|
|
Point |
|
|
Six Months Ended June 30, |
|
|
Point |
|
||||||||||||
|
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
||||||
Underwriting Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year |
|
|
74.8 |
% |
|
|
80.0 |
% |
|
|
(5.2 |
) |
|
|
63.2 |
% |
|
|
69.9 |
% |
|
|
(6.7 |
) |
Prior accident year |
|
|
(4.2 |
%) |
|
|
(4.4 |
%) |
|
|
0.2 |
|
|
|
(2.1 |
%) |
|
|
(8.2 |
%) |
|
|
6.1 |
|
Calendar year loss ratio |
|
|
70.6 |
% |
|
|
75.6 |
% |
|
|
(5.0 |
) |
|
|
61.1 |
% |
|
|
61.7 |
% |
|
|
(0.6 |
) |
Expense ratio |
|
|
40.0 |
% |
|
|
42.3 |
% |
|
|
(2.3 |
) |
|
|
40.4 |
% |
|
|
42.4 |
% |
|
|
(2.0 |
) |
Combined ratio |
|
|
110.6 |
% |
|
|
117.9 |
% |
|
|
(7.3 |
) |
|
|
101.5 |
% |
|
|
104.1 |
% |
|
|
(2.6 |
) |
(1) |
Includes business ceded to the Company’s Reinsurance Operations under a quote share agreement. The quota share agreement was terminated effective January 1, 2018. |
61
GLOBAL INDEMNITY LIMITED
Reconciliation of non-GAAP financial measures and ratios
The table below reconciles the non-GAAP measures or ratios, which excludes the impact of prior accident year adjustments, to its most directly comparable GAAP measure or ratio. The Company believes the non-GAAP measures or ratios are useful to investors when evaluating the Company's underwriting performance as trends within Farm, Ranch, & Stable may be obscured by prior accident year adjustments. These non-GAAP measures or ratios should not be considered as a substitute for its most directly comparable GAAP measure or ratio and does not reflect the overall underwriting profitability of the Company.
|
|
Quarters Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||||||||||||||||||
|
|
Losses $ |
|
|
Loss Ratio |
|
|
Losses $ |
|
|
Loss Ratio |
|
|
Losses $ |
|
|
Loss Ratio |
|
|
Losses |
|
|
Loss Ratio |
|
||||||||
Property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non catastrophe property losses and ratio excluding the effect of prior accident year (1) |
|
$ |
4,737 |
|
|
|
34.6 |
% |
|
$ |
7,651 |
|
|
|
62.1 |
% |
|
$ |
9,814 |
|
|
|
36.2 |
% |
|
$ |
14,401 |
|
|
|
58.5 |
% |
Effect of prior accident year |
|
|
(707 |
) |
|
|
(5.2 |
%) |
|
|
(300 |
) |
|
|
(2.4 |
%) |
|
|
(1,265 |
) |
|
|
(4.7 |
%) |
|
|
(431 |
) |
|
|
(1.8 |
%) |
Non catastrophe property losses and ratio (2) |
|
$ |
4,030 |
|
|
|
29.4 |
% |
|
$ |
7,351 |
|
|
|
59.7 |
% |
|
$ |
8,549 |
|
|
|
31.5 |
% |
|
$ |
13,970 |
|
|
|
56.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Catastrophe losses and ratio excluding the effect of prior accident year (1) |
|
$ |
7,117 |
|
|
|
52.0 |
% |
|
$ |
3,799 |
|
|
|
30.9 |
% |
|
$ |
8,518 |
|
|
|
31.4 |
% |
|
$ |
4,725 |
|
|
|
19.2 |
% |
Effect of prior accident year |
|
|
11 |
|
|
|
0.1 |
% |
|
|
(409 |
) |
|
|
(3.3 |
%) |
|
|
561 |
|
|
|
2.1 |
% |
|
|
(695 |
) |
|
|
(2.8 |
%) |
Catastrophe losses and ratio (2) |
|
$ |
7,128 |
|
|
|
52.1 |
% |
|
$ |
3,390 |
|
|
|
27.6 |
% |
|
$ |
9,079 |
|
|
|
33.5 |
% |
|
$ |
4,030 |
|
|
|
16.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property losses and ratio excluding the effect of prior accident year (1) |
|
$ |
11,854 |
|
|
|
86.6 |
% |
|
$ |
11,450 |
|
|
|
93.0 |
% |
|
$ |
18,332 |
|
|
|
67.6 |
% |
|
$ |
19,126 |
|
|
|
77.7 |
% |
Effect of prior accident year |
|
|
(696 |
) |
|
|
(5.1 |
%) |
|
|
(709 |
) |
|
|
(5.7 |
%) |
|
|
(704 |
) |
|
|
(2.6 |
%) |
|
|
(1,126 |
) |
|
|
(4.6 |
%) |
Total property losses and ratio (2) |
|
$ |
11,158 |
|
|
|
81.5 |
% |
|
$ |
10,741 |
|
|
|
87.3 |
% |
|
$ |
17,628 |
|
|
|
65.0 |
% |
|
$ |
18,000 |
|
|
|
73.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casualty |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Casualty losses and ratio excluding the effect of prior accident year (1) |
|
$ |
2,388 |
|
|
|
44.7 |
% |
|
$ |
2,431 |
|
|
|
48.3 |
% |
|
$ |
5,520 |
|
|
|
52.0 |
% |
|
$ |
4,959 |
|
|
|
50.3 |
% |
Effect of prior accident year |
|
|
(107 |
) |
|
|
(2.0 |
%) |
|
|
(46 |
) |
|
|
(0.9 |
%) |
|
|
(99 |
) |
|
|
(0.9 |
%) |
|
|
(1,695 |
) |
|
|
(17.2 |
%) |
Total Casualty losses and ratio (2) |
|
$ |
2,281 |
|
|
|
42.7 |
% |
|
$ |
2,385 |
|
|
|
47.4 |
% |
|
$ |
5,421 |
|
|
|
51.1 |
% |
|
$ |
3,264 |
|
|
|
33.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net losses and loss adjustment expense and total loss ratio excluding the effect of prior accident year (1) |
|
$ |
14,242 |
|
|
|
74.8 |
% |
|
$ |
13,881 |
|
|
|
80.0 |
% |
|
$ |
23,852 |
|
|
|
63.2 |
% |
|
$ |
24,085 |
|
|
|
69.9 |
% |
Effect of prior accident year |
|
|
(803 |
) |
|
|
(4.2 |
%) |
|
|
(755 |
) |
|
|
(4.4 |
%) |
|
|
(803 |
) |
|
|
(2.1 |
%) |
|
|
(2,821 |
) |
|
|
(8.2 |
%) |
Total net losses and loss adjustment expense and total loss ratio (2) |
|
$ |
13,439 |
|
|
|
70.6 |
% |
|
$ |
13,126 |
|
|
|
75.6 |
% |
|
$ |
23,049 |
|
|
|
61.1 |
% |
|
$ |
21,264 |
|
|
|
61.7 |
% |
(1) |
Non-GAAP measure / ratio |
(2) |
Most directly comparable GAAP measure / ratio |
Premiums
See “Result of Operations” above for a discussion on consolidated premiums.
Other Income
Other income was less than $0.1 million for each of the quarters and six months ended June 30, 2020 and 2019. Other income is primarily comprised of fee income.
62
GLOBAL INDEMNITY LIMITED
Loss Ratio
The current accident year losses and loss ratio is summarized as follows:
|
|
Quarters Ended June 30, |
|
|
% |
|
|
Six Months Ended June 30, |
|
|
% |
|
||||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
||||||
Property losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-catastrophe |
|
$ |
4,737 |
|
|
$ |
7,651 |
|
|
|
(38.1 |
%) |
|
$ |
9,814 |
|
|
$ |
14,401 |
|
|
|
(31.9 |
%) |
Catastrophe |
|
|
7,117 |
|
|
|
3,799 |
|
|
|
87.3 |
% |
|
|
8,518 |
|
|
|
4,725 |
|
|
|
80.3 |
% |
Property losses |
|
|
11,854 |
|
|
|
11,450 |
|
|
|
3.5 |
% |
|
|
18,332 |
|
|
|
19,126 |
|
|
|
(4.2 |
%) |
Casualty losses |
|
|
2,388 |
|
|
|
2,431 |
|
|
|
(1.8 |
%) |
|
|
5,520 |
|
|
|
4,959 |
|
|
|
11.3 |
% |
Total accident year losses |
|
$ |
14,242 |
|
|
$ |
13,881 |
|
|
|
2.6 |
% |
|
$ |
23,852 |
|
|
$ |
24,085 |
|
|
|
(1.0 |
%) |
|
|
Quarters Ended June 30, |
|
|
Point |
|
|
Six Months Ended June 30, |
|
|
Point |
|
||||||||||||
|
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
||||||
Current accident year loss ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-catastrophe |
|
|
34.6 |
% |
|
|
62.1 |
% |
|
|
(27.5 |
) |
|
|
36.2 |
% |
|
|
58.5 |
% |
|
|
(22.3 |
) |
Catastrophe |
|
|
52.0 |
% |
|
|
30.9 |
% |
|
|
21.1 |
|
|
|
31.4 |
% |
|
|
19.2 |
% |
|
|
12.2 |
|
Property loss ratio |
|
|
86.6 |
% |
|
|
93.0 |
% |
|
|
(6.4 |
) |
|
|
67.6 |
% |
|
|
77.7 |
% |
|
|
(10.1 |
) |
Casualty loss ratio |
|
|
44.7 |
% |
|
|
48.3 |
% |
|
|
(3.6 |
) |
|
|
52.0 |
% |
|
|
50.3 |
% |
|
|
1.7 |
|
Total accident year loss ratio |
|
|
74.8 |
% |
|
|
80.0 |
% |
|
|
(5.2 |
) |
|
|
63.2 |
% |
|
|
69.9 |
% |
|
|
(6.7 |
) |
The current accident year non-catastrophe property loss ratio improved by 27.5 points during the quarter ended June 30, 2020 as compared to the same period in 2019 due to a lower claims frequency for the second accident quarter and lower claims severity in the calendar quarter compared to last year.
The current accident year non-catastrophe property loss ratio improved by 22.3 points during the six months ended June 30, 2020 as compared to the same period in 2019 reflecting a lower claims frequency and severity for the first six months compared to last year.
The current accident year catastrophe loss ratio increased by 21.1 points during the quarter ended June 30, 2020 as compared to the same period in 2019 reflecting a higher claims frequency and severity for the second accident quarter compared to last year.
The current accident year catastrophe loss ratio increased by 12.2 points during the six months ended June 30, 2020 as compared to the same period in 2019 reflecting a higher claims frequency and severity through six months compared to last year.
The current accident year casualty loss ratio improved by 3.6 points during the quarter ended June 30, 2020 as compared to the same period in 2019 primarily due to a lower claims frequency for the second accident quarter compared to last year.
The current accident year casualty loss ratio increased by 1.7 points during the six months ended June 30, 2020 as compared to the same period in 2019. The increase in the loss ratio reflects a higher claims severity through six months compared to last year.
The calendar year loss ratio for the quarter and six months ended June 30, 2020 includes a decrease of $0.8 million, or 4.2 percentage points, and a decrease of $0.8 million, or 2.1 percentage points, respectively, related to reserve development on prior accident years. The calendar year loss ratio for the quarter and six months ended June 30, 2019 includes a decrease of $0.8 million, or 4.4 percentage points, and a decrease of $2.8 million, or 8.2 percentage points, respectively, related to reserve development on prior accident years. Please see Note 8 of the notes to the consolidated financial statements in Item 1 of Part I of this report for further discussion on prior accident year development.
63
GLOBAL INDEMNITY LIMITED
Expense Ratios
The expense ratio for the Company’s Farm, Ranch, & Stable Segment improved 2.3 points from 42.3% for the quarter ended June 30, 2019 to 40.0% for the quarter ended June 30, 2020 and improved 2.0 points from 42.4% for the six months ended June 30, 2019 to 40.4% for the six months ended June 30, 2020. The improvement in the expense ratio is primarily due to higher earned premiums.
COVID-19
There is risk that legislation could be passed which would require the Company to cover business interruption claims regardless of terms, exclusions including the virus exclusions contained within the Company’s Farm, Ranch & Stable policies, or other conditions included in these policies that would otherwise preclude coverage.
COVID-19 could result in declines in business, non-payment of premiums, and increases in claims that could adversely affect Farm, Ranch, & Stable’s business, financial condition, and results of operation.
Reinsurance Operations
The components of income from the Company’s Reinsurance Operations segment and corresponding underwriting ratios are as follows:
|
|
Quarters Ended June 30, |
|
|
% |
|
|
Six Months Ended June 30, |
|
|
% |
|
||||||||||||
(Dollars in thousands) |
|
2020 (1) |
|
|
2019 (1) |
|
|
Change |
|
|
2020 (1) |
|
|
2019 (1) |
|
|
Change |
|
||||||
Gross written premiums |
|
$ |
16,052 |
|
|
$ |
32,059 |
|
|
|
(49.9 |
%) |
|
$ |
33,569 |
|
|
$ |
49,608 |
|
|
|
(32.3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net written premiums |
|
$ |
16,052 |
|
|
$ |
32,059 |
|
|
|
(49.9 |
%) |
|
$ |
33,569 |
|
|
$ |
49,601 |
|
|
|
(32.3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earned premiums |
|
$ |
19,546 |
|
|
$ |
18,579 |
|
|
|
5.2 |
% |
|
$ |
43,401 |
|
|
$ |
33,286 |
|
|
|
30.4 |
% |
Other income (loss) |
|
|
279 |
|
|
|
(8 |
) |
|
NM |
|
|
|
(16 |
) |
|
|
7 |
|
|
NM |
|
||
Total revenues |
|
|
19,825 |
|
|
|
18,571 |
|
|
|
6.8 |
% |
|
|
43,385 |
|
|
|
33,293 |
|
|
|
30.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net losses and loss adjustment expenses |
|
|
11,290 |
|
|
|
13,147 |
|
|
|
(14.1 |
%) |
|
|
24,394 |
|
|
|
21,176 |
|
|
|
15.2 |
% |
Acquisition costs and other underwriting expenses |
|
|
5,695 |
|
|
|
5,360 |
|
|
|
6.3 |
% |
|
|
14,244 |
|
|
|
10,356 |
|
|
|
37.5 |
% |
Underwriting income |
|
$ |
2,840 |
|
|
$ |
64 |
|
|
NM |
|
|
$ |
4,747 |
|
|
$ |
1,761 |
|
|
|
169.6 |
% |
|
|
Quarters Ended June 30, |
|
|
Point |
|
|
Six Months Ended June 30, |
|
|
Point |
|
||||||||||||
|
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
||||||
Underwriting Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year (2) |
|
|
56.1 |
% |
|
|
54.8 |
% |
|
|
1.3 |
|
|
|
56.8 |
% |
|
|
55.0 |
% |
|
|
1.8 |
|
Prior accident year |
|
|
1.7 |
% |
|
|
15.9 |
% |
|
|
(14.2 |
) |
|
|
(0.6 |
%) |
|
|
8.6 |
% |
|
|
(9.2 |
) |
Calendar year loss ratio (3) |
|
|
57.8 |
% |
|
|
70.7 |
% |
|
|
(12.9 |
) |
|
|
56.2 |
% |
|
|
63.6 |
% |
|
|
(7.4 |
) |
Expense ratio |
|
|
29.1 |
% |
|
|
28.8 |
% |
|
|
0.3 |
|
|
|
32.8 |
% |
|
|
31.1 |
% |
|
|
1.7 |
|
Combined ratio |
|
|
86.9 |
% |
|
|
99.5 |
% |
|
|
(12.6 |
) |
|
|
89.0 |
% |
|
|
94.7 |
% |
|
|
(5.7 |
) |
NM – not meaningful
(1) |
External business only, excluding business assumed from affiliates |
(2) |
Non-GAAP ratio |
(3) |
Most directly comparable GAAP ratio |
64
GLOBAL INDEMNITY LIMITED
Reconciliation of non-GAAP financial measures and ratios
The table above includes a reconciliation of the current accident year loss ratio, which is a non-GAAP ratio, to its calendar year loss ratio, which is its most directly comparable GAAP ratio. The Company believes the non-GAAP ratio is useful to investors when evaluating the Company's underwriting performance as trends in the Company's Reinsurance Operations may be obscured by prior accident year adjustments. This non-GAAP ratio should not be considered as a substitute for its most directly comparable GAAP ratio and does not reflect the overall underwriting profitability of the Company.
Premiums
See “Result of Operations” above for a discussion on premiums.
Other Income
The Company recognized income of $0.3 million and a loss of less than $0.1 million for the quarters ended June 30, 2020 and 2019, respectively, and recognized a loss of less than $0.1 million and income of less of $0.1 million for the six months ended June 30, 2020 and 2019, respectively. Other income is comprised of foreign exchange gains and losses.
Loss Ratio
The current accident year loss ratio increased by 1.3 points during the quarter ended June 30, 2020 as compared to the same period in 2019. The current accident year loss ratio increased for the property non-catastrophe business compared to the same period last year. Also, the increase in the total loss ratio reflects a mix of business shift to more casualty premium which has a higher expected loss ratio than property.
The current accident year loss ratio increased by 1.8 points during the six months ended June 30, 2020 as compared to the same period in 2019 primarily due to an increase in the property non-catastrophe loss ratio and the change in mix of business, as there is more casualty premium being written which has a higher expected loss ratio than property.
The calendar year loss ratio for the quarter and six months ended June 30, 2020 includes an increase of $0.3 million, or 1.7 percentage points, and a decrease of $0.3 million, or 0.6 percentage points, respectively, related to reserve development on prior accident years. The calendar year loss ratio for the quarter and six months ended June 30, 2019 includes an increase of $3.0 million, or 15.9 percentage points, and an increase of $2.9 million, or 8.6 percentage points, respectively, related to reserve development on prior accident years. Please see Note 8 of the notes to the consolidated financial statements in Item 1 of Part I of this report for further discussion on prior accident year development.
Expense Ratio
The expense ratio for the Company’s Reinsurance Operations increased by 0.3 points from 28.8% for the quarter ended June 30, 2019 to 29.1% for the quarter ended June 30, 2020 and increased by 1.7 points from 31.1% for the six months ended June 30, 2019 to 32.8% for the six months ended June 30, 2020. The increase in the expense ratio for the six months ended June 30, 2020 is primarily due to an increase in commission expense resulting from a change in business mix.
COVID-19
COVID-19 could result in declines in business, non-payment of premiums, and increases in claims that could adversely affect the Reinsurance Operations’ business, financial condition, and results of operation.
Unallocated Corporate Items
The Company’s fixed income portfolio, excluding cash, continues to maintain high quality with an AA- average rating and a duration of 4.2 years.
65
GLOBAL INDEMNITY LIMITED
Net Investment Income
|
|
Quarters Ended June 30, |
|
|
% |
|
|
Six Months Ended June 30, |
|
|
% |
|
||||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
||||||
Gross investment income (loss) (1) |
|
$ |
(2,012 |
) |
|
$ |
14,748 |
|
|
|
(113.6 |
%) |
|
$ |
9,106 |
|
|
$ |
22,550 |
|
|
|
(59.6 |
%) |
Investment expenses |
|
|
(347 |
) |
|
|
(922 |
) |
|
|
(62.4 |
%) |
|
|
(1,336 |
) |
|
|
(1,505 |
) |
|
|
(11.2 |
%) |
Net investment income |
|
$ |
(2,359 |
) |
|
$ |
13,826 |
|
|
|
(117.1 |
%) |
|
$ |
7,770 |
|
|
$ |
21,045 |
|
|
|
(63.1 |
%) |
(1) |
Excludes realized gains and losses |
Gross investment income decreased by 113.6% and 59.6% for the quarter and the six months ended June 30, 2020, respectively, as compared to the same period in 2019. The decrease for the quarter and six months ended was primarily due to decreased returns from alternative investments which are booked on a one quarter lag due to the limited partnerships typically not reporting results until one to three months following the end of the reporting period.
Investment expenses decreased by 62.4% and 11.2% for the quarter ended and six months ended June 30, 2020, respectively, as compared to the same period in 2019 due to including investment expenses related to mutual funds as a direct offset to investment income.
At June 30, 2020, the Company held agency mortgage-backed securities with a market value of $262.8 million. Excluding the agency mortgage-backed securities, the average duration of the Company’s fixed maturities portfolio was 4.8 years as of June 30, 2020, compared with 3.7 years as of June 30, 2019. Including cash and short-term investments, the average duration of the Company’s fixed maturities portfolio, excluding agency mortgage-backed securities, was 4.5 years as of June 30, 2020, compared with 3.5 years as of June 30, 2019. Changes in interest rates can cause principal payments on certain investments to extend or shorten which can impact duration. The Company’s embedded book yield on its fixed maturities, not including cash, was 2.5% as of June 30, 2020, compared to 3.0% as of June 30, 2019. The embedded book yield on the $64.3 million of municipal bonds in the Company’s portfolio, which includes $63.8 million of taxable municipal bonds, was 3.1% at June 30, 2020, compared to an embedded book yield of 3.5% on the Company’s municipal bond portfolio of $40.9 million at June 30, 2019.
Net Realized Investment Gains (Losses)
The components of net realized investment gains (losses) for the quarters and six months ended June 30, 2020 and 2019 were as follows:
|
|
Quarters Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Equity securities |
|
$ |
27,894 |
|
|
$ |
4,173 |
|
|
$ |
(22,088 |
) |
|
$ |
19,325 |
|
Fixed maturities |
|
|
12,820 |
|
|
|
4,083 |
|
|
|
14,752 |
|
|
|
3,785 |
|
Derivatives |
|
|
(2,207 |
) |
|
|
(4,666 |
) |
|
|
(22,319 |
) |
|
|
(7,233 |
) |
Other than temporary impairment losses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,897 |
) |
Net realized investment gains (losses) |
|
$ |
38,507 |
|
|
$ |
3,590 |
|
|
$ |
(29,655 |
) |
|
$ |
13,980 |
|
Net realized investment gains/(losses) for the quarter ended and six months ended June 30, 2020 were primarily due to the impact of changes in fair value on equity securities and derivatives due to the recent disruption in the global financial markets as a result of COVID-19.
See Note 3 of the notes to the consolidated financial statements in Item 1 of Part I of this report for an analysis of total investment return on a pre-tax basis for the quarters and six months ended June 30, 2020 and 2019.
66
GLOBAL INDEMNITY LIMITED
Corporate and Other Operating Expenses
Corporate and other operating expenses consist of outside legal fees, other professional fees, directors’ fees, management fees & advisory fees, salaries and benefits for holding company personnel, development costs for new products, and taxes incurred which are not directly related to operations. Corporate and other operating expenses were $8.6 million and $4.6 million during the quarters ended June 30, 2020 and 2019, respectively, and $12.8 million and $7.8 million during the six months ended June 30, 2020 and 2019, respectively. The increase in corporate expenses is primarily due to an increase in legal and professional fees related to the proposed redomestication.
Interest Expense
Interest expense decreased 6.5% and 4.8% during the quarter and six months ended June 30, 2020, respectively, as compared to the same period in 2019 primarily due to a reduction in the Fed Funds effective interest rate in March, 2020.
Income Tax Expense / Benefit
Income tax expense was $7.0 million for the quarter ended June 30, 2020 compared with an income tax expense of $1.2 million for the quarter ended June 30, 2019. The increase in income tax expense is primarily due to higher pre-tax income for the Company’s U.S. subsidiaries for the quarter ended June 30, 2020 as compared to the same period in 2019.
Income tax benefit was $5.0 million for the six months ended June 30, 2020 compared with an income tax expense of $5.5 million for the six months ended June 30, 2019. The increase in the income tax benefit is primarily due to investment losses incurred by the Company’s U.S. subsidiaries during the six months ended June 30, 2020.
See Note 7 of the notes to the consolidated financial statements in Item 1 of Part I of this report for a comparison of income tax between periods.
Net Income
The factors described above resulted in net income of $37.6 million and $14.7 million for the quarters ended June 30, 2020 and 2019, respectively, and a net loss of $7.0 million and net income of $34.3 million for the six months ended June 30, 2020 and 2019, respectively.
Liquidity and Capital Resources
Sources and Uses of Funds
Global Indemnity is a holding company. Its principal asset is its ownership of the shares of its direct and indirect subsidiaries, including those of its U.S. insurance companies: United National Insurance Company, Diamond State Insurance Company, Penn-America Insurance Company, Penn-Star Insurance Company, Penn-Patriot Insurance Company, and American Reliable Insurance Company; and its Reinsurance Operations: Global Indemnity Reinsurance.
Global Indemnity’s short term and long term liquidity needs include but are not limited to the payment of corporate expenses, debt service payments, dividend payments to shareholders, and share repurchases. In order to meet their short term and long term needs, the Company’s principal sources of cash includes dividends from subsidiaries, other permitted disbursements from its direct and indirect subsidiaries, reimbursement for equity awards granted to employees and intercompany borrowings. The principal sources of funds at these direct and indirect subsidiaries include underwriting operations, investment income, proceeds from sales and redemptions of investments, capital contributions, intercompany borrowings, and dividends from subsidiaries. Funds are used principally by these operating subsidiaries to pay claims and operating expenses, to make debt payments, fund margin requirements on interest rate swap agreements, to purchase investments, and to make dividend payments. In addition, the Company periodically reviews opportunities related to business acquisitions and as a result, liquidity may be needed in the future.
As of June 30, 2020, the Company also had future funding commitments of $31.2 million related to investments. However, the related investments are currently in their harvest period and it is unlikely that a capital call will be made.
The future liquidity of Global Indemnity is dependent on the ability of its subsidiaries to pay dividends. Global Indemnity’s U.S. insurance companies are restricted by statute as to the amount of dividends that they may pay without the prior approval
67
GLOBAL INDEMNITY LIMITED
of regulatory authorities. The dividend limitations imposed by state laws are based on the statutory financial results of each insurance company within the Insurance Operations that are determined by using statutory accounting practices that differ in various respects from accounting principles used in financial statements prepared in conformity with GAAP. See “Regulation - Statutory Accounting Principles” in Item 1 of Part I of the Company’s 2019 Annual Report on Form 10-K. Key differences relate to, among other items, deferred acquisition costs, limitations on deferred income taxes, reserve calculation assumptions and surplus notes. See Note 18 of the notes to the consolidated financial statements in Item 8 of Part II of the Company’s 2019 Annual Report on Form 10-K for further information on dividend limitations related to the U.S. Insurance Companies. The U.S. Insurance Companies did not declare or pay any dividends during the quarter and six months ended June 30, 2020.
Global Indemnity Reinsurance is prohibited, without the approval of the Bermuda Monetary Authority (“BMA”), from reducing by 15% or more its total statutory capital or 25% or more of its total statutory capital and surplus as set out in its previous year’s statutory financial statements, and any application for such approval must include such information as the BMA may require. See “Regulation—Bermuda Insurance Regulation” in Item 1 of Part I of the Company’s 2019 Annual Report on Form 10-K. In June, 2020, the Board of Directors of Global Indemnity Reinsurance declared and paid a dividend of $226 million to its parent company, Global Indemnity Limited.
Cash Flows
Sources of operating funds consist primarily of net written premiums and investment income. Funds are used primarily to pay claims and operating expenses and to purchase investments. As a result of the dividend policy established in 2017, funds may also be used in the future to pay dividends to shareholders of Global Indemnity Limited.
The Company’s reconciliation of net income (loss) to net cash provided by (used for) operations is generally influenced by the following:
|
• |
the fact that the Company collects premiums, net of commissions, in advance of losses paid; |
|
• |
the timing of the Company’s settlements with its reinsurers; and |
|
• |
the timing of the Company’s loss payments. |
Net cash provided by (used for) operating activities was $52.4 million and ($3.1) million for the six months ended June 30, 2020 and 2019, respectively. The increase in operating cash flows of approximately $55.5 million from the prior year was primarily a net result of the following items:
|
|
Six Months Ended June 30, |
|
|
|
|
|
|||||
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
Change |
|
|||
Net premiums collected |
|
$ |
285,317 |
|
|
$ |
259,650 |
|
|
$ |
25,667 |
|
Net losses paid |
|
|
(131,203 |
) |
|
|
(160,315 |
) |
|
|
29,112 |
|
Underwriting and corporate expenses |
|
|
(120,897 |
) |
|
|
(118,001 |
) |
|
|
(2,896 |
) |
Net investment income |
|
|
23,138 |
|
|
|
25,705 |
|
|
|
(2,567 |
) |
Net federal income taxes recovered (paid) |
|
|
5,478 |
|
|
|
(250 |
) |
|
|
5,728 |
|
Interest paid |
|
|
(9,423 |
) |
|
|
(9,924 |
) |
|
|
501 |
|
Net cash provided by (used for) operating activities |
|
$ |
52,410 |
|
|
$ |
(3,135 |
) |
|
$ |
55,545 |
|
See the consolidated statements of cash flows in the consolidated financial statements in Item 1 of Part I of this report for details concerning the Company’s investing and financing activities.
Liquidity
COVID-19
The Company’s liquidity could be negatively impacted by the cancellation, delays, or non-payment of premiums related to the ongoing COVID-19 pandemic. There is risk that legislation could be passed which would require the Company to cover business interruption claims regardless of terms, exclusions including the virus exclusions contained within the Company’s
68
GLOBAL INDEMNITY LIMITED
Commercial Specialty and Farm, Ranch & Stable policies, or other conditions included in policies that would otherwise preclude coverage which would negatively impact liquidity. In addition, the liquidity of the Company’s investment portfolio could be negatively impacted by the disruption experienced in global financial markets. The COVID-19 pandemic negatively impacted the fair value of the Company’s equity securities and derivative instruments during the six months ended June 30, 2020. Management is taking actions it considers prudent to minimize the impact on the Company’s liquidity. However, given the ongoing uncertainty surrounding the duration, magnitude and geographic reach of COVID-19, the Company is regularly evaluating the impact of COVID-19 on its liquidity.
Dividends
During 2020, the Board of Directors approved a dividend payment of $0.25 per ordinary share to all shareholders of record on the close of business on March 24, 2020 and June 23, 2020. Dividends paid were $7.1 million during the six months ended June 30, 2020.
Redemption of Debt
In July 2020, the Company notified the Trustee of the 7.75% Subordinated Notes due 2045 (“2045 Notes”) that it has elected to redeem the entire $100 million in aggregate principal amount of the outstanding 2045 Notes plus accrued and unpaid interest on the 2045 Notes redeemed to, but not including, the Redemption Date of August 15, 2020.
Other than the items discussed in the preceding paragraphs, there have been no material changes to the Company’s liquidity during the quarter and six months ended June 30, 2020. Please see Item 7 of Part II in the Company’s 2019 Annual Report on Form 10-K for information regarding the Company’s liquidity.
Repayment of Margin Borrowing Facility
The Company plans to pay down to zero the margin borrowing facility in August, 2020. The margin borrowing facility has an outstanding balance of $74.6 million at June 30, 2020.
Capital Resources
Intercompany Dividends
In June, 2020, Global Indemnity Reinsurance declared and paid a dividend of $226.0 million to its parent, Global Indemnity Limited.
Intercompany Loan
On June 16, 2020, GBLI Holdings, LLC entered into a loan agreement with Global Indemnity Reinsurance. Under the terms of the loan agreement, GBLI Holdings, LLC agreed to lend $40.0 million to Global Indemnity Reinsurance by transferring cash and / or securities to Global Indemnity Reinsurance. This loan bears interest at a rate of 0.18% and is due on June 16, 2023. A portion of this loan was repaid during June, 2020. Balance outstanding was $18.5 million at June 30, 2020.
Other than the items discussed in the preceding paragraphs, there have been no material changes to the Company’s capital resources during the quarter and six months ended June 30, 2020. Please see Item 7 of Part II in the Company’s 2019 Annual Report on Form 10-K for information regarding the Company’s capital resources.
Off Balance Sheet Arrangements
The Company has no off balance sheet arrangements.
Cautionary Note Regarding Forward-Looking Statements
Some of the statements under “Management's Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report may include forward-looking statements within the meaning of Section 21E of the Security Exchange Act of 1934, as amended, that reflect the Company’s current views with respect to future events and financial performance. Forward-looking statements are statements that are not historical facts. These statements can be identified by
69
GLOBAL INDEMNITY LIMITED
the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology, and include discussions of strategy, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives, expectations or consequences of identified transactions or natural disasters, and statements about the future performance, operations, products and services of the companies.
The Company’s business and operations are and will be subject to a variety of risks, uncertainties and other factors. Consequently, actual results and experience may materially differ from those contained in any forward-looking statements. See “Risk Factors” in Item 1A of Part I in the Company’s 2019 Annual Report on Form 10-K, as supplemented by the Company’s Quarterly Report on Form 10Q for the quarterly period ending March 31, 2020 and the Company’s definitive proxy statement on Schedule 14A filed July 23, 2020, for risks, uncertainties and other factors that could cause actual results and experience to differ from those projected. The Company’s forward-looking statements speak only as of the date of this report or as of the date they were made. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
Item 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
For the quarter ending June 30, 2020, global equities rose approximately 18.8% with US equities leading the charge and erasing first quarter losses. Despite skyrocketing unemployment, widespread social unrest, and a rising number of COVID-19 cases, the U.S. economy has been supported by nearly $2.9 trillion in fiscal stimulus and the expansion of historically accommodative monetary policy.
The US fixed income market rose approximately 2.9% as spreads in nearly all sectors compressed. Many economic indicators have shown positive results of late but not to the point consistent enough to suggests a trend. The market will continue to focus on the massive amount of fiscal stimulus and monetary policy actions, but will need to monitor the scale of virus-driven shut downs and the volatility that may be introduced with the upcoming U.S. elections.
The Company’s investment grade fixed income portfolio continues to maintain high quality with an AA- average rating and a duration of 4.2 years. Portfolio purchases were focused within US Treasuries and MBS securities. These purchases were funded primarily through cash inflows, sales of CMBS, Asset Backed, and MBS securities, as well as maturities and paydowns. During the second quarter, the portfolio’s allocation to MBS, investment grade credit and US Treasuries increased, while the portfolio’s exposure to CMBS decreased. There have been no other material changes to the Company’s market risk since December 31, 2019. Please see Item 7A of Part II in the Company’s 2019 Annual Report on Form 10-K for information regarding the Company’s market risk.
Item 4. |
CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of June 30, 2020. Based upon that evaluation, and subject to the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2020, the design and operation of the Company’s disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company’s internal controls over financial reporting that occurred during the quarter ended June 30, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.
70
GLOBAL INDEMNITY LIMITED
PART II-OTHER INFORMATION
Item 1. |
Legal Proceedings |
The Company is, from time to time, involved in various legal proceedings in the ordinary course of business. The Company maintains insurance and reinsurance coverage for risks in amounts that it considers adequate. However, there can be no assurance that the insurance and reinsurance coverage that the Company maintains is sufficient or will be available in adequate amounts or at a reasonable cost. The Company does not believe that the resolution of any currently pending legal proceedings, either individually or taken as a whole, will have a material adverse effect on its business, results of operations, cash flows, or financial condition.
There is a greater potential for disputes with reinsurers who are in runoff. Some of the Company’s reinsurers’ have operations that are in runoff, and therefore, the Company closely monitors those relationships. The Company anticipates that, similar to the rest of the insurance and reinsurance industry, it will continue to be subject to litigation and arbitration proceedings in the ordinary course of business.
Item 1A. |
Risk Factors |
The Company’s results of operations and financial condition are subject to numerous risks and uncertainties described in Item 1A of Part I in the Company’s 2019 Annual Report on Form 10-K, filed with the SEC on March 6, 2020, as supplemented by the Company’s Quarterly Report on Form 10Q for the quarterly period ending March 31, 2020 filed on May 8, 2020, and the Company’s definitive proxy statement on Schedule 14A filed July 23, 2020. The risk factors identified therein have not materially changed.
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
The Company’s Share Incentive Plan allows employees to surrender the Company’s A ordinary shares as payment for the tax liability incurred upon the vesting of restricted stock. There were no shares surrendered by the Company’s employees during the quarter ended June 30, 2020. All A ordinary shares surrendered by the employees by the Company are held as treasury stock and recorded at cost until formally retired.
Item 3. |
Defaults upon Senior Securities |
None.
Item 4. |
Mine Safety Disclosures |
None.
Item 5. |
Other Information |
None
71
GLOBAL INDEMNITY LIMITED
Item 6. |
Exhibits |
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31.1+ |
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31.2+ |
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32.1+ |
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32.2+ |
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101.INS |
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Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema Document |
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101.CAL |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF |
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Inline XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB |
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Inline XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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Filed or furnished herewith, as applicable. |
72
GLOBAL INDEMNITY LIMITED
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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GLOBAL INDEMNITY LIMITED |
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Registrant |
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August 10, 2020 |
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By: |
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/s/ Thomas M. McGeehan |
Date: August 10, 2020 |
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Thomas M. McGeehan |
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Chief Financial Officer |
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(Authorized Signatory and Principal Financial and Accounting Officer) |
73
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULE 13a-14(a)/15d-14(a),
AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Cynthia Y. Valko, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Global Indemnity Limited;
2. |
Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Quarterly Report; |
4. |
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared; |
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b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and |
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d) |
Disclosed in this Quarterly Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. |
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s independent registered public accounting firm and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: August 10, 2020
/s/ Cynthia Y. Valko
Cynthia Y. Valko
Chief Executive Officer
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULE 13a-14(a)/15d-14(a),
AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Thomas M. McGeehan, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Global Indemnity Limited;
2. |
Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Quarterly Report; |
4. |
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared; |
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b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and |
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d) |
Disclosed in this Quarterly Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. |
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s independent registered public accounting firm and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: August 10, 2020
/s/ Thomas M. McGeehan
Thomas M. McGeehan
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Global Indemnity Limited (the "Company") on Form 10-Q for the quarterly period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Cynthia Y. Valko, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
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(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: August 10, 2020
/s/ Cynthia Y. Valko
Cynthia Y. Valko
Chief Executive Officer
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Global Indemnity Limited (the "Company") on Form 10-Q for the quarterly period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas M. McGeehan, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
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(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: August 10, 2020
/s/ Thomas M. McGeehan
Thomas M. McGeehan
Chief Financial Officer
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Available for sale, amortized cost | $ 1,236,356 | $ 1,231,568 |
Available-for-sale, net of allowance | 0 | |
Premiums receivable, allowance for credit loss | 2,931 | 2,754 |
Reinsurance receivable, allowance for credit loss | $ 8,992 | $ 8,992 |
Ordinary shares, par value | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized | 900,000,000 | 900,000,000 |
Ordinary Shares A | ||
Ordinary shares, shares issued | 10,333,540 | 10,282,277 |
Ordinary shares, shares outstanding | 10,213,436 | 10,167,056 |
Treasury shares, shares | 120,104 | 115,221 |
Ordinary Shares B | ||
Ordinary shares, shares issued | 4,133,366 | 4,133,366 |
Ordinary shares, shares outstanding | 4,133,366 | 4,133,366 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Revenues: | ||||||
Gross written premiums | $ 164,549 | $ 179,321 | $ 320,273 | $ 321,522 | ||
Net written premiums | 147,264 | 159,069 | 286,376 | 282,485 | ||
Net earned premiums | 141,847 | 128,201 | 286,315 | 250,290 | ||
Net investment income (loss) | (2,359) | 13,826 | 7,770 | 21,045 | ||
Net realized investment gains (losses): | ||||||
Other than temporary impairment losses on investments | 0 | 0 | 0 | (1,897) | ||
Other net realized investment gains (losses) | 38,507 | 3,590 | (29,655) | 15,877 | ||
Total net realized investment gains (losses) | 38,507 | 3,590 | (29,655) | 13,980 | ||
Other income | 766 | 522 | 931 | 1,010 | ||
Total revenues | 178,761 | 146,139 | 265,361 | 286,325 | ||
Losses and Expenses: | ||||||
Net losses and loss adjustment expenses | 67,297 | 70,075 | 144,944 | 128,396 | ||
Acquisition costs and other underwriting expenses | 53,578 | 50,534 | 109,990 | 100,277 | ||
Corporate and other operating expenses | 8,618 | 4,639 | 12,841 | 7,844 | ||
Interest expense | 4,712 | 5,042 | 9,577 | 10,065 | ||
Income (loss) before income taxes | 44,556 | 15,849 | (11,991) | 39,743 | ||
Income tax expense (benefit) | 7,005 | 1,186 | (4,964) | 5,480 | ||
Net income (loss) | $ 37,551 | $ 14,663 | $ (7,027) | $ 34,263 | ||
Net income (loss) | ||||||
Basic | [1] | $ 2.63 | $ 1.03 | $ (0.49) | $ 2.42 | |
Diluted | [1] | $ 2.61 | $ 1.02 | $ (0.49) | $ 2.39 | |
Weighted-average number of shares outstanding | ||||||
Basic | 14,275,500 | 14,187,276 | 14,262,525 | 14,170,689 | ||
Diluted | 14,389,400 | 14,331,286 | 14,262,525 | 14,324,614 | ||
Cash dividends declared per share | $ 0.25 | $ 0.25 | $ 0.50 | $ 0.50 | ||
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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 37,551 | $ 14,663 | $ (7,027) | $ 34,263 |
Other comprehensive income, net of tax: | ||||
Unrealized holding gain | 33,229 | 18,677 | 31,196 | 39,462 |
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) | 0 | (1) | 0 | (2) |
Reclassification adjustment for gains included in net income (loss) | (9,388) | (3,740) | (11,101) | (1,818) |
Unrealized foreign currency translation gain (loss) | 1,292 | (63) | (11) | 131 |
Other comprehensive income, net of tax | 25,133 | 14,873 | 20,084 | 37,773 |
Comprehensive income, net of tax | $ 62,684 | $ 29,536 | $ 13,057 | $ 72,036 |
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
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Retained Earnings | ||
Dividend payable, per share | $ 0.25 | $ 0.25 |
Principles of Consolidation and Basis of Presentation |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2020 | |||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Principles of Consolidation and Basis of Presentation |
Global Indemnity Limited (“Global Indemnity” or “the Company”) was incorporated on February 9, 2016 and is domiciled in the Cayman Islands. On November 7, 2016, Global Indemnity replaced Global Indemnity plc as the ultimate parent company as a result of a redomestication transaction. The Company’s A ordinary shares are publicly traded on the NASDAQ Global Select Market under the ticker symbol GBLI.
The Company manages its business through four business segments: Commercial Specialty, Specialty Property, Farm, Ranch, & Stable, and Reinsurance Operations. The Company’s Commercial Specialty segment offers specialty property and casualty insurance products in the excess and surplus lines marketplace. The Company manages Commercial Specialty by differentiating them into four product classifications: 1) Penn-America, which markets property and general liability products to small commercial businesses through a select network of wholesale general agents with specific binding authority; 2) United National, which markets insurance products for targeted insured segments, including specialty products, such as property, general liability, and professional lines through program administrators with specific binding authority; 3) Diamond State, which markets property, casualty, and professional lines products, which are developed by the Company’s underwriting department by individuals with expertise in those lines of business, through wholesale brokers and also markets through program administrators having specific binding authority; and 4) Vacant Express, which primarily insures dwellings which are currently vacant, undergoing renovation, or are under construction and is marketed through aggregators, brokers, and retail agents. These product classifications comprise the Company’s Commercial Specialty business segment and are not considered individual business segments because each product has similar economic characteristics, distribution, and coverage. The Company’s Specialty Property segment offers specialty personal lines property and casualty insurance products through general and specialty agents with specific binding authority on an admitted basis. The Company’s Farm, Ranch, & Stable segment provides specialized property and casualty coverage including Commercial Farm Auto and Excess/Umbrella Coverage for the agriculture industry as well as specialized insurance products for the equine mortality and equine major medical industry on an admitted basis. These insurance products are sold through wholesalers and retail agents, with a selected number having specific binding authority. Collectively, the Company’s U.S. insurance subsidiaries are licensed in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The Commercial Specialty, Specialty Property, and Farm, Ranch, & Stable segments comprise the Company’s U.S. Insurance Operations (“Insurance Operations”). The Company’s Reinsurance Operations consist solely of the operations of its Bermuda-based wholly-owned subsidiary, Global Indemnity Reinsurance Company, Ltd. (“Global Indemnity Reinsurance”). Global Indemnity Reinsurance is a treaty reinsurer of specialty property and casualty insurance and reinsurance companies. The Company’s Reinsurance Operations segment provides reinsurance solutions through brokers and primary writers including insurance and reinsurance companies.
The interim consolidated financial statements are unaudited, but have been prepared in conformity with United States of America generally accepted accounting principles (“GAAP”), which differs in certain respects from those principles followed in reports to insurance regulatory authorities. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The unaudited consolidated financial statements include all adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair statement of results for the interim periods. Results of operations for the quarters and six months ended June 30, 2020 and 2019 are not necessarily indicative of the results of a full year. The accompanying notes to the unaudited consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements contained in the Company’s 2019 Annual Report on Form 10-K.
The consolidated financial statements include the accounts of Global Indemnity and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Proposed Redomestication |
6 Months Ended |
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Jun. 30, 2020 | |
Proposed Redomestication Disclosure [Abstract] | |
Proposed Redomestication |
2.Proposed Redomestication
On June 23, 2020, the Company announced that the Company’s Board of Directors approved a plan to redomesticate Global Indemnity Limited and its Bermuda subsidiary, Global Indemnity Reinsurance Company, Ltd., to the United States (the “redomestication plan”). The Board also approved the filing of a preliminary proxy statement with the U.S. Securities and Exchange Commission in connection with a special meeting of the Company’s shareholders that will be called to consider and approve the redomestication plan. The preliminary proxy was filed on June 23, 2020 and the definitive proxy statement was filed on July 23, 2020. The redomestication plan is also awaiting regulatory approval.
If the Company’s shareholders approve the redomestication plan at the August 25, 2020 scheme meeting and extraordinary general meeting and regulatory approval is received, Global Indemnity Group, LLC, a Delaware limited liability company (that will be taxed as a partnership for U.S. federal income tax purposes), will replace the Company, a Cayman Islands corporation, as the publicly listed parent company of the Company’s affiliated group, and the business of the Company’s Bermuda subsidiary will be assumed by the Company’s existing U.S. insurance company subsidiaries. Pursuant to the redomestication plan, the Company’s class A ordinary shares outstanding at the scheme record time (expected to be 5:00 p.m. (Eastern Time) on August 27, 2020 (the “Scheme Record Time”)) will be converted on a one-for-one basis into class A common shares of the new publicly listed parent company, Global Indemnity Group, LLC, that will trade on NASDAQ under the Company’s existing ticker symbol (“GBLI”). Only for U.S. tax purposes, (i) Global Indemnity Group, LLC will be treated as a partnership and (ii) shareholders of Global Indemnity Group, LLC will be treated as partners in such partnership.
If approved by its shareholders and regulatory approval is received, the Company anticipates that the redomestication will close on or around 12:01am (Eastern Time) on August 28, 2020.
The Company does not expect a material impact to its financial position as a result of the proposed redomestication. |
Investments |
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Investments Debt And Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments |
The Company implemented new accounting guidance on January 1, 2020 related to the measurement of credit losses on financial instruments. For financial assets held at amortized cost basis, the new guidance requires a forward-looking methodology for in-scope financial assets that reflects expected credit losses and requires consideration of a broader range of information for credit loss estimates, including historical experience, current economic conditions and supportable forecasts that affect the collectability of the financial asset. For available for sale debt securities, credit losses are still measured similar to the old guidance; however, the new guidance requires that credit losses be presented as an allowance rather than as a write-down of the amortized cost basis of the impaired security and allows for the reversal of credit losses in the current period net income. Any impairments related to factors other than credit losses continue to be recorded through other comprehensive income, net of taxes.
The Company elected the practical expedient to exclude accrued interest from both the fair value and the amortized cost basis of the available for sale debt securities for the purposes of identifying and measuring an impairment and to not measure an allowance for credit losses for accrued interest receivables. Accrued interest receivable is written off through net realized investment gains (losses) at the time the issuer of the bond defaults or is expected to default on payment. The Company made an accounting policy election to present the accrued interest receivable balance with other assets on the Company’s consolidated statements of financial position. Accrued interest receivable was $6.2 million and $7.0 million as of June 30, 2020 and December 31, 2019, respectively.
The amortized cost and estimated fair value of the Company’s fixed maturities securities were as follows as of June 30, 2020 and December 31, 2019:
As of June 30, 2020 and December 31, 2019, the Company’s investments in equity securities consist of the following:
As of June 30, 2020 and December 31, 2019, the Company held Fannie Mae mortgage pools that totaled as much as 4.8% and 4.2% of shareholders’ equity, respectively. Excluding the Fannie Mae pools, U.S. treasuries, agency bonds, index funds, and limited partnerships, the Company did not hold any debt or equity investments in a single issuer in excess of 2% and 3% of shareholders' equity at June 30, 2020 and December 31, 2019, respectively.
The amortized cost and estimated fair value of the Company’s fixed maturities portfolio classified as available for sale at June 30, 2020, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses that are not deemed to have credit losses, categorized by the period that the securities were in a continuous loss position as of June 30, 2020. The fair value amounts reported in the table are estimates that are prepared using the process described in Note 5 of the notes to the consolidated financial statements in Item 1 of Part I of this report:
The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses, categorized by the period that the securities were in a continuous loss position as of December 31, 2019. The fair value amounts reported in the table are estimates that are prepared using the process described in Note 5 of the notes to the consolidated financial statements in Item 1 of Part I of this report:
The Company regularly performs various analytical valuation procedures with respect to its investments, including reviewing each available for sale debt security in an unrealized loss position to assess whether the decline in fair value below amortized cost basis has resulted from a credit loss or other factors. In assessing whether a credit loss exists, the Company compares the present value of the cash flows expected to be collected from the security to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis of the security, a credit loss exists and an allowance for credit losses is recorded. Subsequent changes in the allowances are recorded in the period of change as either credit loss expense or reversal of credit loss expense. Any impairments related to factors other than credit losses are recorded through other comprehensive income, net of taxes.
For fixed maturities, the factors considered in reaching the conclusion that a credit loss exists include, among others, whether:
According to accounting guidance for debt securities in an unrealized loss position, the Company is required to assess whether it has the intent to sell the debt security or more likely than not will be required to sell the debt security before the anticipated recovery. If either of these conditions is met, any allowance for credit losses is written off and the amortized cost basis is written down to the fair value of the fixed maturity security with any incremental impairment reported in earnings. That new amortized cost basis shall not be adjusted for subsequent recoveries in fair value.
The following is a description, by asset type, of the methodology and significant inputs that the Company used to measure the amount of credit loss recognized in earnings, if any:
U.S. treasury and agency obligations – As of June 30, 2020, gross unrealized losses related to U.S. treasury and agency obligations were $0.088 million. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, macroeconomic and market analysis is conducted in evaluating these securities. Consideration is given to the interest rate environment, duration and yield curve management of the portfolio, sector allocation and security selection. Based on the analysis performed, the Company did not recognize a credit loss on U.S. treasury and agency obligations during the period.
Obligations of states and political subdivisions – As of June 30, 2020, gross unrealized losses related to obligations of states and political subdivisions were $0.125 million. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, elements that may influence the performance of the municipal bond market are considered in evaluating these securities such as investor expectations, supply and demand patterns, and current versus historical yield and spread relationships. The analysis relies on the output of fixed income credit analysts, as well as dedicated municipal bond analysts who perform extensive in-house fundamental analysis on each issuer, regardless of their rating by the major agencies. Based on the analysis performed, the Company did not recognize a credit loss on obligations of states and political subdivisions during the period.
Mortgage-backed securities (“MBS”) – As of June 30, 2020, gross unrealized losses related to mortgage-backed securities were $1.245 million. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, mortgage-backed securities are modeled to project principal losses under downside, base, and upside scenarios for the economy and home prices. The primary assumption that drives the security and loan level modeling is the Home Price Index (“HPI”) projection. These forecasts incorporate not just national macro-economic trends, but also regional impacts to arrive at the most granular and accurate projections. These assumptions are incorporated into the model as a basis to generate delinquency probabilities, default curves, loss severity curves, and voluntary prepayment curves at the loan level within each deal. The model utilizes HPI-adjusted current LTV, payment history, loan terms, loan modification history, and borrower characteristics as inputs to generate expected cash flows and principal loss for each bond under various scenarios. Based on the analysis performed, the Company did not recognize a credit loss on mortgage-backed securities during the period.
Asset backed securities (“ABS”) - As of June 30, 2020, gross unrealized losses related to asset backed securities were $2.131 million. The weighted average credit enhancement for the Company’s asset backed portfolio is 33.8. This represents the percentage of pool losses that can occur before an asset backed security will incur its first dollar of principal losses. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, every ABS transaction is analyzed on a stand-alone basis. This analysis involves a thorough review of the collateral, prepayment, and structural risk in each transaction. Additionally, the analysis includes an in-depth credit analysis of the originator and servicer of the collateral. The analysis projects an expected loss for a deal given a set of assumptions specific to the asset type. These assumptions are used to calculate at what level of losses the deal will incur its first dollar of principal loss. The major assumptions used to calculate this ratio are loss severities, recovery lags, and no advances on principal and interest. Based on the analysis performed, the Company did not recognize a credit loss on asset backed securities during the period.
Commercial mortgage-backed securities (“CMBS”) - As of June 30, 2020, gross unrealized losses related to the CMBS portfolio were $1.157 million. The weighted average credit enhancement for the Company’s CMBS portfolio is 29.9. This represents the percentage of pool losses that can occur before a mortgage-backed security will incur its first dollar of principal loss. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, a loan level analysis is utilized where every underlying CMBS loan is re-underwritten based on a set of assumptions reflecting expectations for the future path of the economy. Each loan is analyzed over time using a series of tests to determine if a credit event will occur during the life of the loan. Inherent in this process are several economic scenarios and their corresponding rent/vacancy and capital market states. The five primary credit events that frame the analysis include loan modifications, term default, balloon default, extension, and ability to pay off at balloon. The resulting output is the expected loss adjusted cash flows for each bond under the base case and distressed scenarios. Based on the analysis performed, the Company did not recognize a credit loss on commercial mortgage-backed securities during the period.
Corporate bonds - As of June 30, 2020, gross unrealized losses related to corporate bonds were $1.398 million. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, analysis for this asset class includes maintaining detailed financial models that include a projection of each issuer’s future financial performance, including prospective debt servicing capabilities, capital structure composition, and the value of the collateral. The analysis incorporates the macroeconomic environment, industry conditions in which the issuer operates, the issuer’s current competitive position, its vulnerability to changes in the competitive and regulatory environment, issuer liquidity, issuer commitment to bondholders, issuer creditworthiness, and asset protection. Part of the process also includes running downside scenarios to evaluate the expected likelihood of default as well as potential losses in the event of default. Based on the analysis performed, the Company did not recognize a credit loss on corporate bonds during the period.
Foreign bonds – As of June 30, 2020, gross unrealized losses related to foreign bonds were $0.398 million. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, detailed financial models are maintained that include a projection of each issuer’s future financial performance, including prospective debt servicing capabilities, capital structure composition, and the value of the collateral. The analysis incorporates the macroeconomic environment, industry conditions in which the issuer operates, the issuer’s current competitive position, its vulnerability to changes in the competitive and regulatory environment, issuer liquidity, issuer commitment to bondholders, issuer creditworthiness, and asset protection. Part of the process also includes running downside scenarios to evaluate the expected likelihood of default as well as potential losses in the event of default. Based on the analysis performed, the Company did not recognize a credit loss on foreign bonds during the period. The Company recorded the following other than temporary impairments (“OTTI”) on its investment portfolio for the quarter and six months ended June 30, 2019:
The following table is an analysis of the credit losses recognized in earnings on fixed maturities held by the Company for the quarter and six months ended June 30, 2019 for which a portion of the OTTI loss was recognized in other comprehensive income.
Accumulated Other Comprehensive Income, Net of Tax
Accumulated other comprehensive income, net of tax, as of June 30, 2020 and December 31, 2019 was as follows:
The following tables present the changes in accumulated other comprehensive income, net of tax, by component for the quarters and six months ended June 30, 2020 and 2019:
The reclassifications out of accumulated other comprehensive income for the quarters and six months ended June 30, 2020 and 2019 were as follows:
Net Realized Investment Gains (Losses)
The components of net realized investment gains (losses) for the quarters and six months ended June 30, 2020 and 2019 were as follows:
Net realized investment gains (losses) for the quarter and six months ended June 30, 2020 were primarily due to the impact of changes in fair value due to the recent disruption in the global financial markets. The following table shows the calculation of the portion of realized gains and losses related to equity securities held as of June 30, 2020 and 2019:
The proceeds from sales and redemptions of available for sale and equity securities resulting in net realized investment gains (losses) for the six months ended June 30, 2020 and 2019 were as follows:
Net Investment Income
The sources of net investment income for the quarters and six months ended June 30, 2020 and 2019 were as follows:
The Company’s total investment return on a pre-tax basis for the quarters and six months ended June 30, 2020 and 2019 were as follows:
As of June 30, 2020 and December 31, 2019, the Company did not own any fixed maturity securities that were non-income producing for the preceding twelve months.
Insurance Enhanced Asset-Backed and Credit Securities
As of June 30, 2020, the Company held insurance enhanced bonds with a market value of approximately $28.2 million which represented 1.7% of the Company’s total cash and invested assets, net of payable/ receivable for securities purchased and sold.
The insurance enhanced bonds are comprised of $16.4 million of municipal bonds, $11.8 million of commercial mortgage-backed securities, and less than $0.1 million of collateralized mortgage obligations. The financial guarantors of the Company’s $28.2 million of insurance enhanced commercial-mortgage-backed, municipal securities, and collateralized mortgage obligations include Municipal Bond Insurance Association ($3.6 million), Assured Guaranty Corporation ($10.6 million), Federal Home Loan Mortgage Corporation ($11.8 million), Ambac Financial Group ($2.1 million), and Federal Deposit Insurance Corporation (less than $0.1 million).
The Company had no direct investments in the entities that have provided financial guarantees or other credit support to any security held by the Company at June 30, 2020. Bonds Held on Deposit
Certain cash balances, cash equivalents, equity securities, and bonds available for sale were deposited with various governmental authorities in accordance with statutory requirements, were held as collateral, or were held in trust pursuant to intercompany reinsurance agreements. The fair values were as follows as of June 30, 2020 and December 31, 2019:
Variable Interest Entities
A Variable Interest Entity (VIE) refers to an investment in which an investor holds a controlling interest that is not based on the majority of voting rights. Under the VIE model, the party that has the power to exercise significant management influence and maintain a controlling financial interest in the entity’s economics is said to be the primary beneficiary, and is required to consolidate the entity within their results. Other entities that participate in a VIE, for which their financial interests fluctuate with changes in the fair value of the investment entity’s net assets but do not have significant management influence and the ability to direct the VIE’s significant economic activities are said to have a variable interest in the VIE but do not consolidate the VIE in their financial results.
The Company has variable interests in three VIE’s for which it is not the primary beneficiary. These investments are accounted for under the equity method of accounting as their ownership interest exceeds 3% of their respective investments.
The carrying value of one of the Company’s VIE’s, which invests in distressed securities and assets, was $12.6 million and $13.5 million as of June 30, 2020 and December 31, 2019, respectively. The Company’s maximum exposure to loss from this VIE, which factors in future funding commitments, was $26.8 million and $27.7 million at June 30, 2020 and December 31, 2019, respectively. The carrying value of a second VIE that also invests in distressed securities and assets was $14.2 million and $24.0 million at June 30, 2020 and December 31, 2019, respectively. The Company’s maximum exposure to loss from this VIE, which factors in future funding commitments, was $31.2 million and $41.0 million at June 30, 2020 and December 31, 2019, respectively. The carrying value of a third VIE that invests in REIT qualifying assets was $8.7 million and $9.8 million as of June 30, 2020 and December 31, 2019, respectively. The Company’s maximum exposure to loss from this VIE, which factors in future funding commitments, was $8.7 million and $10.3 million at June 30, 2020 and December 31, 2019, respectively. The Company’s investment in VIEs is included in other invested assets on the consolidated balance sheet with changes in carrying value recorded in the consolidated statements of operations. |
Derivative Instruments |
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Derivative Instruments And Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments |
Derivatives are used by the Company to reduce risks from changes in interest rates and limit exposure to severe equity market changes. The Company has interest rate swaps with terms to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional amount. In 2019, the Company began to utilize exchange-traded futures contracts, which give the holder the right and obligation to participate in market movements at a future date, to allow the Company to react faster to market conditions. The Company posts collateral and settles variation margin in cash on a daily basis equal to the amount of the futures contracts’ change in value scaled by a multiplier.
The Company accounts for the interest rate swaps and futures as non-hedge instruments and recognizes the fair value of the interest rate swaps in other assets or other liabilities on the consolidated balance sheets with the changes in fair value recognized as net realized investment gains or losses in the consolidated statements of operations. The Company is ultimately responsible for the valuation of the interest rate swaps. To aid in determining the estimated fair value of the interest rate swaps, the Company relies on the forward interest rate curve and information obtained from a third party financial institution.
The following table summarizes information on the location and the gross amount of the derivatives on the consolidated balance sheets as of June 30, 2020 and December 31, 2019:
The following table summarizes the net gains (losses) included in the consolidated statements of operations for changes in the fair value of the derivatives and the periodic net interest settlements under the derivatives for the quarters and six months ended June 30, 2020 and 2019:
As of June 30, 2020 and December 31, 2019, the Company is due $3.5 million and $3.0 million, respectively, for funds it needed to post to execute the swap transaction and $19.4 million and $12.5 million, respectively, for margin calls made in connection with the interest rate swaps. These amounts are included in other assets on the consolidated balance sheets.
As of June 30, 2020 and December 31, 2019, the Company posted initial margin of $0.6 million and $3.0 million, respectively, in securities for trading futures contracts and has a mark-to-market payable of less than $0.1 million and receivable of $0.3 million, respectively, in connection with the futures contracts. Variation margin is included in other assets on the consolidated balance sheets. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
The accounting standards related to fair value measurements define fair value, establish a framework for measuring fair value, outline a fair value hierarchy based on inputs used to measure fair value, and enhance disclosure requirements for fair value measurements. These standards do not change existing guidance as to whether or not an instrument is carried at fair value. The Company has determined that its fair value measurements are in accordance with the requirements of these accounting standards.
The Company’s invested assets and derivative instruments are carried at their fair value and are categorized based upon a fair value hierarchy:
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset.
The following table presents information about the Company’s invested assets and derivative instruments measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value.
The securities classified as Level 1 in the above table consist of U.S. Treasuries and equity securities actively traded on an exchange.
The securities classified as Level 2 in the above table consist primarily of fixed maturity securities and derivative instruments. Based on the typical trading volumes and the lack of quoted market prices for fixed maturities, security prices are derived through recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. If there are no recent reported trades, matrix or model processes are used to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Included in the pricing of asset-backed securities, collateralized mortgage obligations, and mortgage-backed securities are estimates of the rate of future prepayments of principal over the remaining life of the securities. Such estimates are derived based on the characteristics of the underlying structure and prepayment speeds previously experienced at the interest rate levels projected for the underlying collateral. The estimated fair value of the derivative instruments, consisting of interest rate swaps, is obtained from a third party financial institution that utilizes observable inputs such as the forward interest rate curve.
For the Company’s material debt arrangements, the current fair value of the Company’s debt at June 30, 2020 and December 31, 2019 was as follows:
The fair value of the margin borrowing facility approximates its carrying value due to the facility being due on demand. The subordinated notes due 2045 and 2047 are publicly traded instruments and are classified as Level 1 in the fair value hierarchy. Fair Value of Alternative Investments
Other invested assets consist of limited liability partnerships whose carrying value approximates fair value. The following table provides the fair value and future funding commitments related to these investments at June 30, 2020 and December 31, 2019.
Limited Partnerships with ownership interest exceeding 3%
The Company uses the equity method to account for investments in limited partnerships where its ownership interest exceeds 3%. The equity method of accounting for an investment in a limited partnership requires that its cost basis be updated to account for the income or loss earned on the investment. The investment income associated with these limited partnerships, which is booked on a one quarter lag, is reflected in the consolidated statements of operations in the amounts of ($12.0) million and $3.8 million for the quarters ended June 30, 2020 and 2019, respectively, and ($11.5) million and $0.1 million for the six months ended June 30, 2020 and 2019, respectively. Pricing
The Company’s pricing vendors provide prices for all investment categories except for investments in limited partnerships. Two primary vendors are utilized to provide prices for equity and fixed maturity securities.
The following is a description of the valuation methodologies used by the Company’s pricing vendors for investment securities carried at fair value:
The Company performs certain procedures to validate whether the pricing information received from the pricing vendors is reasonable, to ensure that the fair value determination is consistent with accounting guidance, and to ensure that its assets are properly classified in the fair value hierarchy. The Company’s procedures include, but are not limited to:
During the quarters and six months ended June 30, 2020 and 2019, the Company has not adjusted quotes or prices obtained from the pricing vendors. |
Allowance for Credit Losses - Premiums Receivable and Reinsurance Receivables |
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Allowance For Credit Loss [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Losses - Premiums Receivable and Reinsurance Receivables |
6.Allowance for Credit Losses - Premiums Receivable and Reinsurance Receivables
The Company implemented new accounting guidance on January 1, 2020 related to the measurement of credit losses on financial instruments. Please see Note 16 for further discussion on this new accounting guidance. For premiums receivables, the allowance is based upon the Company’s ongoing review of key aspects of amounts outstanding, including but not limited to, length of collection periods, direct placement with collection agencies, solvency of insured or agent, terminated agents, and other relevant factors. For reinsurance receivables, the allowance is based upon the Company’s ongoing review of key aspects of amounts outstanding, including but not limited to, length of collection periods, disputes, applicable coverage defenses, insolvent reinsurers, financial strength of solvent reinsurers based on A.M Best Ratings and other relevant factors.
The following table is an analysis of the allowance for credit losses related to the Company's premiums receivable and reinsurance receivables for the quarter and six months ended June 30, 2020:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
7.Income Taxes As of June 30, 2020, the statutory income tax rates of the countries where the Company conducts business are 21% in the United States, 0% in Bermuda, 0% in the Cayman Islands, 19% in the United Kingdom, and 25% on non-trading income, 33% on capital gains and 12.5% on trading income in the Republic of Ireland. The statutory income tax rate of each country is applied against the expected annual taxable income of the Company in each country to estimate the annual income tax expense. The Company’s income (loss) before income taxes from its non-U.S. subsidiaries and U.S. subsidiaries for the quarters and six months ended June 30, 2020 and 2019 were as follows:
The following table summarizes the components of income tax expense (benefit):
The weighted average expected tax provision has been calculated using income (loss) before income taxes in each jurisdiction multiplied by that jurisdiction’s applicable statutory tax rate. The following table summarizes the differences between the tax provision for financial statement purposes and the expected tax provision at the weighted average tax rate:
The effective income tax expense rate for the quarter ended June 30, 2020 was 15.7%, compared with an effective income tax expense rate of 7.5% for the quarter ended June 30, 2019. The increase in income tax expense for the quarter ended June 30, 2020 was primarily due to higher pre-tax income for the Company’s U.S. subsidiaries for the quarter ended June 30, 2020 as compared to the same period in 2019.
The effective income tax benefit rate for the six months ended June 30, 2020 was 41.4%, compared with an effective income tax expense rate of 13.8% for the six months ended June 30, 2019. The increase in the income tax benefit for the six months ended June 30, 2020 was primarily due to investment losses incurred by the Company’s U.S. subsidiaries. The Company has a net operating loss (“NOL”) carryforward of $21.5 million as of June 30, 2020, which begins to expire in 2036 based on when the original NOL was generated. The Company’s NOL carryforward as of December 31, 2019 was $21.9 million. The Company has a Section 163(j) (“163(j)”) carryforward of $8.1 million and $9.0 million as of June 30, 2020 and December 31, 2019, respectively, which can be carried forward indefinitely. The 163(j) carryforward relates to the limitation on the deduction for business interest expense paid or accrued. The Company has an alternative minimum tax (“AMT”) credit carryforward of $5.5 million and $11.0 million as of June 30, 2020 and December 31, 2019, respectively. The Company received $5.5 million of the AMT credit carryforward during the first quarter of 2020. Under provisions of the CARES Act, the Company filed a request for a full refund of the remaining $5.5 million which is expected to be received in the third quarter of 2020. |
Liability for Unpaid Losses and Loss Adjustment Expenses |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liability for Unpaid Losses and Loss Adjustment Expenses |
8.Liability for Unpaid Losses and Loss Adjustment Expenses Activity in the liability for unpaid losses and loss adjustment expenses is summarized as follows:
When analyzing loss reserves and prior year development, the Company considers many factors, including the frequency and severity of claims, loss trends, case reserve settlements that may have resulted in significant development, and any other additional or pertinent factors that may impact reserve estimates. During the second quarter of 2020, the Company reduced its prior accident year loss reserves by $19.3 million, which consisted of a $14.2 million decrease related to Commercial Specialty, a $4.6 million decrease related to Specialty Property, a $0.8 million decrease related to Farm, Ranch, & Stable, and a $0.3 million increase related to Reinsurance Operations.
The $14.2 million reduction of prior accident year loss reserves related to Commercial Specialty primarily consisted of the following:
The $4.6 million decrease of prior accident year loss reserves related to Specialty Property primarily consisted of the following:
The $0.8 million reduction of prior accident year loss reserves related to Farm, Ranch, & Stable primarily consisted of the following:
The $0.3 million increase in prior accident year loss reserves related to Reinsurance Operations was from the property lines. Based on a review of the experience reported from cedants, increases were in the 2011 and 2019 accident years, partially offset by decreases in the 2012 through 2018 accident years. During the second quarter of 2019, the Company reduced its prior accident year loss reserves by $8.2 million, which consisted of a $0.2 million decrease related to Commercial Specialty, a $10.1 million decrease related to Specialty Property, a $0.8 million decrease related to Farm, Ranch, & Stable, and a $3.0 million increase related to Reinsurance Operations.
The $0.2 million reduction of prior accident year loss reserves related to Commercial Specialty primarily consisted of the following:
The $10.1 million reduction of prior accident year loss reserves related to Specialty Property primarily consisted of the following:
The $0.8 million reduction of prior accident year loss reserves related to Farm, Ranch, & Stable primarily consisted of the following:
The $3.0 million increase in prior accident year loss reserves related to Reinsurance Operations primarily consisted of the following:
During the first six months of 2020, the Company reduced its prior accident year loss reserves by $19.9 million, which consisted of a $14.2 million decrease related to Commercial Specialty, a $4.6 million decrease related to Specialty Property, a $0.8 million decrease related to Farm, Ranch, & Stable, and a $0.3 million decrease related to Reinsurance Operations.
The $14.2 million decrease in prior accident year loss reserves related to Commercial Specialty primarily consisted of the following:
The $4.6 million decrease in prior accident year loss reserves related to Specialty Property primarily consisted of the following:
The $0.8 million decrease in prior accident year loss reserves related to Farm, Ranch, & Stable primarily consisted of the following:
The $0.3 million reduction of prior accident year loss reserves related to Reinsurance Operations was from the property lines. Based on a review of the experience reported from cedants, decreases were in the 2012 through 2017 accident years, partially offset by increases in the 2011, 2018 and 2019 accident years.
During the first six months of 2019, the Company reduced its prior accident year loss reserves by $16.1 million, which consisted of a $6.9 million decrease related to Commercial Specialty, a $9.2 million decrease related to Specialty Property, a $2.8 million decrease related to Farm, Ranch, & Stable, and a $2.9 million increase related to Reinsurance Operations. The $6.9 million reduction of prior accident year loss reserves related to Commercial Specialty primarily consisted of the following:
The $9.2 million reduction of prior accident year loss reserves related to Specialty Property primarily consisted of the following:
The $2.8 million reduction of prior accident year loss reserves related to Farm, Ranch, & Stable primarily consisted of the following:
The $2.9 million increase in prior accident year loss reserves related to Reinsurance Operations primarily consisted of the following:
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Shareholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity |
9.Shareholders’ Equity
There were no A ordinary shares that were surrendered or repurchased during the quarters ended June 30, 2020 and 2019.
The following table provides information with respect to the A ordinary shares that were surrendered or repurchased during the six months ended June 30, 2020:
The following table provides information with respect to the A ordinary shares that were surrendered or repurchased during the six months ended June 30, 2019:
There were no B ordinary shares that were surrendered or repurchased during the quarters and six months ended June 30, 2020 or 2019. As of June 30, 2020, the Company’s A ordinary shares were held by approximately 205 shareholders of record. There were four holders of record of the Company’s B ordinary shares, all of whom are affiliated investment funds of Fox Paine & Company, LLC, as of June 30, 2020. Please see Note 12 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2019 Annual Report on Form 10-K for more information on the Company’s repurchase program. Dividends
Dividend payments of $0.25 per ordinary share were declared during the six months ended June 30, 2020 as follows:
Dividend payments of $0.25 per ordinary share were declared during the six months ended June 30, 2019 as follows:
As of June 30, 2020 and December 31, 2019, accrued dividends on unvested shares, which were included in other liabilities on the consolidated balance sheets, were $0.5 million and $0.3 million, respectively. Please see Note 12 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2019 Annual Report on Form 10-K for more information on the Company’s dividend program. |
Related Party Transactions |
6 Months Ended | ||
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Jun. 30, 2020 | |||
Related Party Transactions [Abstract] | |||
Related Party Transactions |
Fox Paine Entities
As of June 30, 2020, Fox Paine Capital Fund II International, L.P. and certain of its affiliates (collectively, the “Fox Paine Funds”), which are managed by Fox Paine & Company, LLC, beneficially own approximately 77.5% of the Company’s total voting power. As of June 30, 2020, Fox Mercury Investments, L.P. and certain of its affiliates (collectively, the “FM Entities”) separately beneficially own approximately 4.8% of the Company’s total voting power. The Fox Paine Funds have the right to appoint a number of the Company’s Directors equal in aggregate to the pro rata percentage of the voting power in the Company beneficially held by the Fox Paine Funds, FM Entities and Fox Paine & Company, LLC (collectively, “Fox Paine Entities”) so long as the Fox Paine Entities beneficially own shares representing an aggregate 25% or more of the total voting power in the Company. The Fox Paine Funds control the election of all of the Company’s Directors due to its controlling share ownership. The Company’s Chairman is the chief executive and founder of Fox Paine & Company, LLC.
The Company relies on Fox Paine & Company, LLC to provide management services and other services related to the operations of the Company. Starting in 2014, the management fee is adjusted annually to reflect the percentage change in the CPI-U. On May 6, 2020, the Company and Fox Paine & Company, LLC entered into the Second Amended and Restated Management Agreement, effective as of September 5, 2019 (the “Agreement”), to: (i) eliminate the Company’s obligation to reimburse Fox Paine & Company, LLC for its travel, lodging, meals, and other items relating to attendance at regularly scheduled meetings of the Board of Directors, which have averaged approximately $550,000 per year (since execution of the Agreement in 2013), and (ii) increase Fox Paine & Company, LLC’s base Annual Service Fee by $550,000 per year.
Management fee expense of $0.8 million and $0.5 million was incurred during the quarters ended June 30, 2020 and 2019, respectively, and management fee expense of $1.4 million and $1.0 million was incurred during the six months ended June 30, 2020 and 2019, respectively. Prepaid management fees, which were included in other assets on the consolidated balance sheets, were $0.4 million and $1.4 million as of June 30, 2020 and December 31, 2019, respectively.
In addition, Fox Paine & Company, LLC may also propose and negotiate transaction fees with the Company subject to the provisions of the Company’s related party transaction policies, including approval of the Company’s Audit Committee of the Board of Directors, for those services from time to time. Each of the Company’s transactions with Fox Paine & Company, LLC described below was reviewed and approved by the Company’s Audit Committee, which is composed of independent directors, and the Board of Directors (other than Saul A. Fox, Chairman of the Board of Directors of the Company and Chief Executive of Fox Paine & Company, LLC, who is not a member of the Audit Committee and recused himself from the Board of Directors’ deliberations).
Illiquid Investment Fund Divestiture Fee
On December 21, 2018, GBLI Holdings, LLC (formerly known as “Global Indemnity Group, LLC”) exited an investment in a private credit fund pursuant to a sale of GBLI Holdings, LLC’s investment to third parties at par plus accrued interest. Fox Paine & Company, LLC provided services to GBLI Holdings, LLC in connection with the sale, including conducting due diligence to evaluate the private fund, recommending that GBLI Holdings, LLC withdraw from the private fund, and conducting extended negotiations with the private fund to secure GBLI Holdings, LLC’s withdrawal from the private fund on favorable terms. Fox Paine & Company, LLC’s services for GBLI Holdings, LLC in connection with the sale were performed during the second, third, and fourth quarters of 2018. The total fee for these services was $2.0 million which was accrued in the 4th quarter of 2018, which is the period in which the transaction was completed, and was paid in May 2019.
Redomestication Fee
Pursuant to the Agreement, Fox Paine & Company, LLC performed extensive financial advisory services for the Company in connection with the conceptualization, design, structuring and implementation of the redomestication plan. In accordance with the Agreement, Fox Paine & Company, LLC may propose and negotiate advisory fees for such services with the Company, subject to the provisions of the Company’s related party transaction policies, including approval of the Audit Committee. Any such advisory fees would be accrued in the period in which the transactions contemplated by the redomestication plan are consummated and would be payable following the consummation of such transactions. |
Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies |
11.Commitments and Contingencies Legal Proceedings
The Company is, from time to time, involved in various legal proceedings in the ordinary course of business. The Company maintains insurance and reinsurance coverage for such risks in amounts that it considers adequate. However, there can be no assurance that the insurance and reinsurance coverage that the Company maintains is sufficient or will be available in adequate amounts or at a reasonable cost. The Company does not believe that the resolution of any currently pending legal proceedings, either individually or taken as a whole, will have a material adverse effect on its business, results of operations, cash flows, or financial condition.
There is a greater potential for disputes with reinsurers who are in runoff. Some of the Company’s reinsurers’ have operations that are in runoff, and therefore, the Company closely monitors those relationships. The Company anticipates that, similar to the rest of the insurance and reinsurance industry, it will continue to be subject to litigation and arbitration proceedings in the ordinary course of business. Commitments
In 2014, the Company entered into a $50 million commitment to purchase an alternative investment vehicle which is comprised of European non-performing loans. As of June 30, 2020, the Company has funded $35.8 million of this commitment leaving $14.2 million as unfunded.
In 2017, the Company entered into a $50 million commitment to purchase an alternative investment vehicle comprised of stressed and distressed securities and structured products. As of June 30, 2020, the Company has funded $33.0 million of this commitment leaving $17.0 million as unfunded.
In 2019, the Company entered into a $10 million commitment to purchase an alternative investment vehicle which is comprised of mortgage loans and other real-estate related investments. As of June 30, 2020, the Company has fully funded this commitment.
Other Commitments
The Company is party to a Management Agreement, as amended, with Fox Paine & Company, LLC, whereby in connection with certain management services provided to it by Fox Paine & Company, LLC, the Company agreed to pay an annual management fee to Fox Paine & Company, LLC. See Note 10 above for additional information pertaining to this management agreement.
COVID-19
There is risk that legislation could be passed which would require the Company to cover business interruption claims regardless of terms, exclusions including the virus exclusions contained within the Company’s Commercial Specialty and Farm, Ranch & Stable policies, or other conditions included in policies that would otherwise preclude coverage. |
Share-Based Compensation Plans |
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Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||||||||||||||||||
Share-Based Compensation Plans |
Options No stock options were awarded during the quarters and six months ended June 30, 2020 and 2019. No unvested stock options were forfeited during the quarters and six months ended June 30, 2020 or 2019. Restricted Shares / Restricted Stock Units There were no restricted A ordinary shares granted to key employees during the quarters ended June 30, 2020 and 2019 or the six months ended June 30, 2020. During the six months ended June 30, 2019, the Company granted 36,180 restricted A ordinary shares, with a weighted average grant date value of $35.82 per share, to key employees under the Plan. 9,063 of these shares vested immediately. 27,117 of these shares will vest as follows:
There were no restricted stock units granted to key employees during the quarter ended June 30, 2020. During the six months ended June 30, 2020, the Company granted 161,238 restricted stock units, with a weighted average grant date value of $30.32 per share, to key employees under the Plan. 3,375 of these restricted stock units will vest evenly over the next three years on January 1, 2021, January 1, 2022 and January 1, 2023. 66,957 of these restricted stock units will vest as follows:
The remaining 90,906 restricted stock units will vest as follows:
During the quarter and six months ended June 30, 2019, the Company granted 175,498 restricted stock units, with a weighted average grant date value of $30.18 per unit, to key employees under the Plan. These restricted stock units will vest as follows:
During the quarters ended June 30, 2020 and 2019, the Company granted 28,482 and 15,544 A ordinary shares, respectively, at a weighted average grant date value of $23.70 and $30.96 per share, respectively, to non-employee directors of the Company under the Plan. During the six months ended June 30, 2020 and 2019, the Company granted 51,609 and 31,386 A ordinary shares, respectively, at a weighted average grant date value of $26.16 and $30.67 per share, respectively, to non-employee directors of the Company under the Plan. All of the shares granted to non-employee directors of the Company in 2020 and 2019 were fully vested but are subject to certain restrictions. |
Earnings Per Share |
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Earnings Per Share |
13.Earnings Per Share Earnings per share have been computed using the weighted average number of ordinary shares and ordinary share equivalents outstanding during the period. The following table sets forth the computation of basic and diluted earnings per share:
A reconciliation of weighted average shares for basic earnings per share to weighted average shares for diluted earnings per share is as follows:
If the Company had not incurred a loss in the six months ended June 30, 2020, 14,408,907 weighted average shares would have been used to compute the diluted loss per share calculation. In addition to the basic shares, weighted average shares for the diluted calculation would have included 15,195 shares of non-vested restricted stock, 29,691 shares of non-vested restricted stock units, and 101,496 share equivalents for options.
The weighted average shares outstanding used to determine dilutive earnings per share does not include 570,332 shares and 500,000 shares for the quarters ended June 30, 2020 and 2019, respectively, and 566,957 shares and 500,000 shares for the six months ended June 30, 2020 and 2019, respectively, which were deemed to be anti-dilutive.
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Segment Information |
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Segment Information |
The Company manages its business through four business segments. Commercial Specialty offers specialty property and casualty products designed for product lines such as Small Business Binding Authority, Property Brokerage, and Programs. Specialty Property offers specialty personal lines property and casualty insurance products. Farm, Ranch, & Stable offers specialized property and casualty coverage including Commercial Farm Auto and Excess/Umbrella Coverage for the agriculture industry as well as specialized insurance products for the equine mortality and equine major medical industry. Reinsurance Operations provides reinsurance solutions through brokers and primary writers including insurance and reinsurance companies.
The following are tabulations of business segment information for the quarters and six months ended June 30, 2020 and 2019:
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Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries |
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Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries |
15.Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries The following tables present condensed consolidating balance sheets at June 30, 2020 and December 31, 2019, condensed consolidating statements of operations and condensed consolidating statements of comprehensive income for the quarters and six months ended June 30, 2020 and 2019 and condensed consolidating statements of cash flows for the six months ended June 30, 2020 and 2019. GBLI Holdings, LLC is a 100% owned subsidiary of the Company. See Note 10 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2019 Annual Report on Form 10-K for information on the Company’s debt obligations.
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New Accounting Pronouncements |
6 Months Ended | ||
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Jun. 30, 2020 | |||
Accounting Changes And Error Corrections [Abstract] | |||
New Accounting Pronouncements |
Accounting Standards Adopted in 2020
In March, 2020, the FASB issued new accounting guidance that affected a variety of topics in the Codification. The amendments in this update are meant to make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarification. This guidance is effective for all fiscal years beginning after December 15, 2019 including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2020. The adoption of this new accounting guidance did not have a material impact on the Company’s financial condition, results of operations, or cash flows. In August, 2018, the FASB issued new accounting guidance which removed, modified, and added certain disclosures related to Topic 820, Fair Value. The affected disclosures are related to transfers between fair value levels, level 3 assets, and investments in certain entities that calculate net asset value. This guidance is effective for all fiscal years beginning after December 15, 2019 including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2020. The adoption of this new accounting guidance did not have a material impact on the Company’s financial condition, results of operations, or cash flows. In January, 2017, the FASB issued updated guidance that simplifies how an entity is required to test goodwill for impairment by eliminating the requirement to calculate the implied fair value of goodwill (i.e. Step 2 of the current goodwill impairment test). Under the new amendments, an entity may still first assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. If determined to be necessary, the quantitative impairment test shall be used to identify goodwill impairment and measure the amount of a goodwill impairment loss to be recognized, if any. A goodwill impairment loss is recognized for the amount that the carrying amount of a reporting unit, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. This guidance is effective for public business entities’ annual or interim goodwill impairment testing in fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020. The adoption of this new accounting guidance did not have a material impact on the Company’s financial condition, results of operations, or cash flows. In June, 2016, the FASB issued new accounting guidance addressing the measurement of credit losses on financial instruments. The new guidance requires financial assets measured at amortized cost, which includes but are not limited to premiums receivable and reinsurance receivables, to be presented at the net amount expected to be collected over the life of the asset using an allowance for credit losses. Changes in the allowance are charged to earnings. The measurement of expected credit losses should consider relevant information about past events, including historical experience, current information, as well as reasonable and supportable forecasts that affect the collectability of the financial assets. For available for sale debt securities, credit losses should be measured similar to the old guidance; however, the new guidance requires that credit losses be presented as an allowance rather than as a write-down of the amortized cost basis of the impaired securities and allows for the reversal of credit losses in the current period net income. In addition, the Company made certain accounting policy elections related to accrued interest receivables which are described in Note 3. The Company adopted this new accounting guidance on January 1, 2020 using a modified-retrospective approach. The adoption of this new accounting guidance and the impact on the Company’s financial condition, results of operations, and cash flows is described primarily within Note 3 and Note 6. Please see Note 22 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2019 Annual Report on Form 10-K for more information on accounting pronouncements issued but not yet adopted. |
Subsequent Events |
6 Months Ended |
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Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events |
17.Subsequent Events
In July 2020, the Company notified the Trustee of the 7.75% Subordinated Notes due 2045 (“2045 Notes”) that it has elected to redeem the entire $100 million in aggregate principal amount of the outstanding 2045 Notes plus accrued and unpaid interest on the 2045 Notes redeemed to, but not including, the Redemption Date of August 15, 2020. Please see Note 10 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2019 Annual Report on Form 10-K for more information on the Company’s 2045 Notes. |
Principles of Consolidation and Basis of Presentation (Policies) |
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Jun. 30, 2020 | ||||||||||||||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||||||||||||||||||||||||||||
Business Segments |
The Company manages its business through four business segments: Commercial Specialty, Specialty Property, Farm, Ranch, & Stable, and Reinsurance Operations. The Company’s Commercial Specialty segment offers specialty property and casualty insurance products in the excess and surplus lines marketplace. The Company manages Commercial Specialty by differentiating them into four product classifications: 1) Penn-America, which markets property and general liability products to small commercial businesses through a select network of wholesale general agents with specific binding authority; 2) United National, which markets insurance products for targeted insured segments, including specialty products, such as property, general liability, and professional lines through program administrators with specific binding authority; 3) Diamond State, which markets property, casualty, and professional lines products, which are developed by the Company’s underwriting department by individuals with expertise in those lines of business, through wholesale brokers and also markets through program administrators having specific binding authority; and 4) Vacant Express, which primarily insures dwellings which are currently vacant, undergoing renovation, or are under construction and is marketed through aggregators, brokers, and retail agents. These product classifications comprise the Company’s Commercial Specialty business segment and are not considered individual business segments because each product has similar economic characteristics, distribution, and coverage. The Company’s Specialty Property segment offers specialty personal lines property and casualty insurance products through general and specialty agents with specific binding authority on an admitted basis. The Company’s Farm, Ranch, & Stable segment provides specialized property and casualty coverage including Commercial Farm Auto and Excess/Umbrella Coverage for the agriculture industry as well as specialized insurance products for the equine mortality and equine major medical industry on an admitted basis. These insurance products are sold through wholesalers and retail agents, with a selected number having specific binding authority. Collectively, the Company’s U.S. insurance subsidiaries are licensed in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The Commercial Specialty, Specialty Property, and Farm, Ranch, & Stable segments comprise the Company’s U.S. Insurance Operations (“Insurance Operations”). The Company’s Reinsurance Operations consist solely of the operations of its Bermuda-based wholly-owned subsidiary, Global Indemnity Reinsurance Company, Ltd. (“Global Indemnity Reinsurance”). Global Indemnity Reinsurance is a treaty reinsurer of specialty property and casualty insurance and reinsurance companies. The Company’s Reinsurance Operations segment provides reinsurance solutions through brokers and primary writers including insurance and reinsurance companies.
The interim consolidated financial statements are unaudited, but have been prepared in conformity with United States of America generally accepted accounting principles (“GAAP”), which differs in certain respects from those principles followed in reports to insurance regulatory authorities. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
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Intercompany Balances and Transactions |
The unaudited consolidated financial statements include all adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair statement of results for the interim periods. Results of operations for the quarters and six months ended June 30, 2020 and 2019 are not necessarily indicative of the results of a full year. The accompanying notes to the unaudited consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements contained in the Company’s 2019 Annual Report on Form 10-K.
The consolidated financial statements include the accounts of Global Indemnity and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
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Investments |
The Company regularly performs various analytical valuation procedures with respect to its investments, including reviewing each available for sale debt security in an unrealized loss position to assess whether the decline in fair value below amortized cost basis has resulted from a credit loss or other factors. In assessing whether a credit loss exists, the Company compares the present value of the cash flows expected to be collected from the security to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis of the security, a credit loss exists and an allowance for credit losses is recorded. Subsequent changes in the allowances are recorded in the period of change as either credit loss expense or reversal of credit loss expense. Any impairments related to factors other than credit losses are recorded through other comprehensive income, net of taxes.
For fixed maturities, the factors considered in reaching the conclusion that a credit loss exists include, among others, whether:
According to accounting guidance for debt securities in an unrealized loss position, the Company is required to assess whether it has the intent to sell the debt security or more likely than not will be required to sell the debt security before the anticipated recovery. If either of these conditions is met, any allowance for credit losses is written off and the amortized cost basis is written down to the fair value of the fixed maturity security with any incremental impairment reported in earnings. That new amortized cost basis shall not be adjusted for subsequent recoveries in fair value. |
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Derivative Instruments |
The Company accounts for the interest rate swaps and futures as non-hedge instruments and recognizes the fair value of the interest rate swaps in other assets or other liabilities on the consolidated balance sheets with the changes in fair value recognized as net realized investment gains or losses in the consolidated statements of operations. The Company is ultimately responsible for the valuation of the interest rate swaps. To aid in determining the estimated fair value of the interest rate swaps, the Company relies on the forward interest rate curve and information obtained from a third party financial institution. |
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Fair Value Measurement |
The Company’s invested assets and derivative instruments are carried at their fair value and are categorized based upon a fair value hierarchy:
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset.
The following is a description of the valuation methodologies used by the Company’s pricing vendors for investment securities carried at fair value:
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Statutory Income Tax Rates | The statutory income tax rate of each country is applied against the expected annual taxable income of the Company in each country to estimate the annual income tax expense. | |||||||||||||||||||||||||||
Loss Reserves and Prior Year Development |
When analyzing loss reserves and prior year development, the Company considers many factors, including the frequency and severity of claims, loss trends, case reserve settlements that may have resulted in significant development, and any other additional or pertinent factors that may impact reserve estimates. |
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Earnings Per Share |
Earnings per share have been computed using the weighted average number of ordinary shares and ordinary share equivalents outstanding during the period. |
Investments (Tables) |
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Investments Debt And Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortized Cost and Estimated Fair Value of Company's Fixed Maturities Securities |
The amortized cost and estimated fair value of the Company’s fixed maturities securities were as follows as of June 30, 2020 and December 31, 2019:
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Schedule Of Investments In Equity Securities |
As of June 30, 2020 and December 31, 2019, the Company’s investments in equity securities consist of the following:
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Summary of Amortized Cost and Estimated Fair Value Through Fixed Maturities |
The amortized cost and estimated fair value of the Company’s fixed maturities portfolio classified as available for sale at June 30, 2020, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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Summary of Securities With Gross Unrealized Losses |
The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses that are not deemed to have credit losses, categorized by the period that the securities were in a continuous loss position as of June 30, 2020. The fair value amounts reported in the table are estimates that are prepared using the process described in Note 5 of the notes to the consolidated financial statements in Item 1 of Part I of this report:
The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses, categorized by the period that the securities were in a continuous loss position as of December 31, 2019. The fair value amounts reported in the table are estimates that are prepared using the process described in Note 5 of the notes to the consolidated financial statements in Item 1 of Part I of this report:
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Schedule of Other Than Temporary Impairments on Investments |
The Company recorded the following other than temporary impairments (“OTTI”) on its investment portfolio for the quarter and six months ended June 30, 2019:
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Schedule of Credit Losses Recognized in Earnings |
The following table is an analysis of the credit losses recognized in earnings on fixed maturities held by the Company for the quarter and six months ended June 30, 2019 for which a portion of the OTTI loss was recognized in other comprehensive income.
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Schedule of Accumulated Other Comprehensive Income, Net of Tax |
Accumulated other comprehensive income, net of tax, as of June 30, 2020 and December 31, 2019 was as follows:
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Changes In Accumulated Other Comprehensive Income |
The following tables present the changes in accumulated other comprehensive income, net of tax, by component for the quarters and six months ended June 30, 2020 and 2019:
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Reclassifications Out of Accumulated Other Comprehensive Income |
The reclassifications out of accumulated other comprehensive income for the quarters and six months ended June 30, 2020 and 2019 were as follows:
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Components of Net Realized Investment Gains (Losses) |
The components of net realized investment gains (losses) for the quarters and six months ended June 30, 2020 and 2019 were as follows:
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Summary of Calculation of Realized Gains and Losses |
The following table shows the calculation of the portion of realized gains and losses related to equity securities held as of June 30, 2020 and 2019:
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Proceeds from Sales and Redemptions of Available-for-Sale Securities |
The proceeds from sales and redemptions of available for sale and equity securities resulting in net realized investment gains (losses) for the six months ended June 30, 2020 and 2019 were as follows:
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Schedule of Investment Income |
The sources of net investment income for the quarters and six months ended June 30, 2020 and 2019 were as follows:
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Schedule of Total Investment Return |
The Company’s total investment return on a pre-tax basis for the quarters and six months ended June 30, 2020 and 2019 were as follows:
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Summary of Estimated Fair Values of Bonds Held on Deposit | The fair values were as follows as of June 30, 2020 and December 31, 2019:
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Derivative Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Information on Location and Gross Amount of Derivatives on Consolidated Balance Sheets |
The following table summarizes information on the location and the gross amount of the derivatives on the consolidated balance sheets as of June 30, 2020 and December 31, 2019:
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Summary of Net Gain (Loss) Included in Consolidated Statements of Operations for Changes in Fair Value of Derivatives and Periodic Net Interest Settlements Under Derivatives |
The following table summarizes the net gains (losses) included in the consolidated statements of operations for changes in the fair value of the derivatives and the periodic net interest settlements under the derivatives for the quarters and six months ended June 30, 2020 and 2019:
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company's Invested Assets and Derivative Instruments Measured at Fair Value on Recurring Basis |
The following table presents information about the Company’s invested assets and derivative instruments measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value.
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Current Fair Value of Debt |
For the Company’s material debt arrangements, the current fair value of the Company’s debt at June 30, 2020 and December 31, 2019 was as follows:
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Fair Value and Future Funding Commitments Related to These Investments | The following table provides the fair value and future funding commitments related to these investments at June 30, 2020 and December 31, 2019.
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Allowance for Credit Losses - Premiums Receivable and Reinsurance Receivables (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance For Credit Loss [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Allowance for Credit Losses Related to Premiums Receivable and Reinsurance Receivables |
The following table is an analysis of the allowance for credit losses related to the Company's premiums receivable and reinsurance receivables for the quarter and six months ended June 30, 2020:
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Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (Loss) before Income Taxes from its Non-U.S. Subsidiaries and U.S. Subsidiaries |
The Company’s income (loss) before income taxes from its non-U.S. subsidiaries and U.S. subsidiaries for the quarters and six months ended June 30, 2020 and 2019 were as follows:
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Components of Income Tax Expense (Benefit) |
The following table summarizes the components of income tax expense (benefit):
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Differences in Tax Provision for Financial Statement Purposes and Expected Tax Provision at Weighted Average Tax Rate |
The following table summarizes the differences between the tax provision for financial statement purposes and the expected tax provision at the weighted average tax rate:
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Liability for Unpaid Losses and Loss Adjustment Expenses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Activity in Liability for Unpaid Losses and Loss Adjustment Expenses |
Activity in the liability for unpaid losses and loss adjustment expenses is summarized as follows:
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Shareholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information with Respect to A Ordinary Shares that were Surrendered or Repurchased |
The following table provides information with respect to the A ordinary shares that were surrendered or repurchased during the six months ended June 30, 2020:
The following table provides information with respect to the A ordinary shares that were surrendered or repurchased during the six months ended June 30, 2019:
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Schedule of Dividends Declared |
Dividend payments of $0.25 per ordinary share were declared during the six months ended June 30, 2020 as follows:
Dividend payments of $0.25 per ordinary share were declared during the six months ended June 30, 2019 as follows:
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Earnings Per Share (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share |
The following table sets forth the computation of basic and diluted earnings per share:
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Reconciliation of Weighted Average Shares for Basic and Diluted Earnings Per Share |
A reconciliation of weighted average shares for basic earnings per share to weighted average shares for diluted earnings per share is as follows:
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Business Segment Information |
The following are tabulations of business segment information for the quarters and six months ended June 30, 2020 and 2019:
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Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Condensed Consolidating Balance Sheets |
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Schedule of Condensed Consolidating Statements of Operations |
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Schedule of Condensed Consolidating Statements of Comprehensive Income |
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Schedule of Condensed Consolidating Statements of Cash Flows |
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Principles of Consolidation and Basis of Presentation - Additional Information (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2020
Segment
Product
| |
Organization And Basis Of Presentation [Line Items] | |
Date of incorporation | Feb. 09, 2016 |
State of incorporation | E9 |
Kind of listing | A ordinary shares |
Number of business segments | Segment | 4 |
Commercial Specialty | |
Organization And Basis Of Presentation [Line Items] | |
Number of product classifications | Product | 4 |
Proposed Redomestication - Additional Information (Detail) - shares |
6 Months Ended | |
---|---|---|
Jun. 23, 2020 |
Jun. 30, 2020 |
|
Proposed Redomestication [Line Items] | ||
Announcement of approved redomestication date | Jun. 23, 2020 | |
Preliminary proxy date | Jun. 23, 2020 | |
Plan of redomestication definitive proxy | Jul. 23, 2020 | |
Scheme meeting and extraordinary general meeting date | Aug. 25, 2020 | |
Proposed redomestication anticipated close | Aug. 28, 2020 | |
Global Indemnity Group, LLC | ||
Proposed Redomestication [Line Items] | ||
Plan of redomestication ordinary shares conversion basis | Pursuant to the redomestication plan, the Company’s class A ordinary shares outstanding at the scheme record time (expected to be 5:00 p.m. (Eastern Time) on August 27, 2020 (the “Scheme Record Time”)) will be converted on a one-for-one basis into class A common shares of the new publicly listed parent company | |
Plan of redomestication ordinary shares converted into common shares | 1 |
Schedule of Investments in Equity Securities (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Equity securities, at fair value | $ 220,184 | $ 263,104 |
Common Stock | ||
Debt Securities, Available-for-sale [Line Items] | ||
Equity securities, at fair value | 0 | 135,329 |
Preferred Stock | ||
Debt Securities, Available-for-sale [Line Items] | ||
Equity securities, at fair value | 10,747 | 11,656 |
Index Funds that Invest in Common Stock | ||
Debt Securities, Available-for-sale [Line Items] | ||
Equity securities, at fair value | 0 | 61,471 |
Index Funds that Invest in Fixed Maturities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Equity securities, at fair value | $ 209,437 | $ 54,648 |
Schedule of Other Than Temporary Impairments on Investments (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Investments Debt And Equity Securities [Abstract] | ||
OTTI losses, gross | $ 0 | $ (1,897) |
Portion of loss recognized in other comprehensive income (pre-tax) | 0 | 0 |
Net impairment losses on fixed maturities recognized in earnings | $ 0 | $ (1,897) |
Schedule of Credit Losses Recognized in Earnings (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Investments Debt And Equity Securities [Abstract] | ||
Balance at beginning of period | $ 13 | $ 13 |
Additions where no OTTI was previously recorded | 0 | 0 |
Additions where an OTTI was previously recorded | 0 | 0 |
Reductions for securities for which the company intends to sell or more likely than not will be required to sell before recovery | 0 | 0 |
Reductions reflecting increases in expected cash flows to be collected | 0 | 0 |
Reductions for securities sold during the period | 0 | 0 |
Balance at end of period | $ 13 | $ 13 |
Schedule of Accumulated Other Comprehensive Income, Net of Tax (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|---|---|
Investments Debt And Equity Securities [Abstract] | ||||||
Fixed maturities | $ 43,760 | $ 21,591 | ||||
Foreign currency fluctuations | (1,043) | (1,032) | ||||
Deferred taxes | (5,024) | (2,950) | ||||
Accumulated other comprehensive income, net of tax | $ 37,693 | $ 12,560 | $ 17,609 | $ 16,542 | $ 1,669 | $ (21,231) |
Changes in Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, net of tax | $ 12,560 | $ 1,669 | $ 17,609 | $ (21,231) |
Other comprehensive income (loss) before reclassification, before tax | 39,097 | 21,223 | 36,910 | 45,324 |
Amounts reclassified from accumulated other comprehensive income, before tax | (12,820) | (4,083) | (14,752) | (1,888) |
Other comprehensive income (loss), before tax | 26,277 | 17,140 | 22,158 | 43,436 |
Income tax expense | (1,144) | (2,267) | (2,074) | (5,663) |
Ending balance, net of tax | 37,693 | 16,542 | 37,693 | 16,542 |
Unrealized Gains and Losses on Available for Sale Securities | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, net of tax | 14,895 | 2,809 | 18,641 | (19,897) |
Other comprehensive income (loss) before reclassification, before tax | 37,805 | 21,286 | 36,921 | 45,193 |
Amounts reclassified from accumulated other comprehensive income, before tax | (12,820) | (4,083) | (14,752) | (1,888) |
Other comprehensive income (loss), before tax | 24,985 | 17,203 | 22,169 | 43,305 |
Income tax expense | (1,144) | (2,267) | (2,074) | (5,663) |
Ending balance, net of tax | 38,736 | 17,745 | 38,736 | 17,745 |
Foreign Currency Items | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, net of tax | (2,335) | (1,140) | (1,032) | (1,334) |
Other comprehensive income (loss) before reclassification, before tax | 1,292 | (63) | (11) | 131 |
Amounts reclassified from accumulated other comprehensive income, before tax | 0 | 0 | 0 | 0 |
Other comprehensive income (loss), before tax | 1,292 | (63) | (11) | 131 |
Income tax expense | 0 | 0 | 0 | 0 |
Ending balance, net of tax | $ (1,043) | $ (1,203) | $ (1,043) | $ (1,203) |
Reclassifications Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other net realized investment (gains) losses | $ (38,507) | $ (3,590) | $ 29,655 | $ (15,877) |
Total before tax | (44,556) | (15,849) | 11,991 | (39,743) |
Income tax expense (benefit) | 7,005 | 1,186 | (4,964) | 5,480 |
Net income (loss) | (37,551) | (14,663) | 7,027 | (34,263) |
Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total reclassifications, net of tax | (9,388) | (3,740) | (11,101) | (1,818) |
Reclassification out of Accumulated Other Comprehensive Income | Unrealized Gains and Losses on Available for Sale Securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other net realized investment (gains) losses | (12,820) | (4,083) | (14,752) | (3,785) |
Other than temporary impairment losses on investments | 0 | 0 | 0 | 1,897 |
Total before tax | (12,820) | (4,083) | (14,752) | (1,888) |
Income tax expense (benefit) | 3,432 | 343 | 3,651 | 70 |
Net income (loss) | (9,388) | (3,740) | (11,101) | (1,818) |
Reclassification out of Accumulated Other Comprehensive Income | Foreign Currency Items | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other net realized investment (gains) losses | 0 | 0 | 0 | 0 |
Income tax expense (benefit) | 0 | 0 | 0 | 0 |
Net income (loss) | $ 0 | $ 0 | $ 0 | $ 0 |
Components of Net Realized Investment Gains (Losses) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||
Debt Securities, Available-for-sale [Line Items] | ||||||
Total net realized investment gains (losses) | $ 38,507 | $ 3,590 | $ (29,655) | $ 13,980 | ||
Equity securities, Gross realized gains | 29,402 | 8,570 | 11,507 | 25,255 | ||
Equity securities, Gross realized losses | (1,508) | (4,397) | (33,595) | (5,930) | ||
Equity securities, Total net realized investment gains (losses) | 27,894 | 4,173 | (22,088) | 19,325 | ||
Not Designated as Hedging Instrument | Interest Rate Swap | ||||||
Debt Securities, Available-for-sale [Line Items] | ||||||
Gross realized gains | 7,625 | 0 | 19,401 | 0 | ||
Gross realized losses | (9,832) | (4,666) | (41,720) | (7,233) | ||
Total net realized investment gains (losses) | [1] | (2,207) | (4,666) | (22,319) | (7,233) | |
Fixed Maturities | ||||||
Debt Securities, Available-for-sale [Line Items] | ||||||
Gross realized gains | 16,738 | 4,685 | 18,980 | 4,711 | ||
Gross realized losses | (3,918) | (602) | (4,228) | (2,823) | ||
Total net realized investment gains (losses) | $ 12,820 | $ 4,083 | $ 14,752 | $ 1,888 | ||
|
Components of Net Realized Investment Gains (Losses) (Parenthetical) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Debt Securities, Available-for-sale [Line Items] | ||||
Net interest settlements | $ (2,207) | $ (4,666) | $ (22,319) | $ (7,233) |
Interest Rate Swap | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Net interest settlements | $ 1,100 | $ 200 | $ 1,700 | $ 400 |
Summary of Calculation of Realized Gains and Losses (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Investments Debt And Equity Securities [Abstract] | ||||
Equity securities, Total net realized investment gains (losses) | $ 27,894 | $ 4,173 | $ (22,088) | $ 19,325 |
Less: Net gains (losses) recognized during the period on equity securities sold during the period | 436 | 8,416 | (3,785) | 10,450 |
Unrealized gains and (losses) recognized during the reporting period on equity securities still held at the reporting date | $ 27,458 | $ (4,243) | $ (18,303) | $ 8,875 |
Schedule of Proceeds From Sales and Redemptions of Available for Sale Securities (Detail) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Investments Debt And Equity Securities [Abstract] | ||
Fixed maturities | $ 427,111 | $ 569,529 |
Equity securities | $ 378,915 | $ 167,028 |
Schedule of Investment Income (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Debt Securities, Available-for-sale [Line Items] | ||||
Investment income | $ 14,748 | $ 9,106 | $ 22,550 | |
Investment income (loss) | $ (2,012) | |||
Investment expense | (347) | (922) | (1,336) | (1,505) |
Net investment income | (2,359) | 13,826 | 7,770 | 21,045 |
Fixed Maturities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Investment income | 8,551 | 8,918 | 17,592 | 18,886 |
Equity Securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Investment income | 1,407 | 1,543 | 2,771 | 2,680 |
Cash and Cash Equivalents | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Investment income | 52 | 469 | 232 | 870 |
Other Invested Assets | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Investment income | $ (12,022) | $ 3,818 | $ (11,489) | $ 114 |
Schedule of Total Investment Return (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||||
Investments Debt And Equity Securities [Abstract] | ||||||||
Net investment income (loss) | $ (2,359) | $ 13,826 | $ 7,770 | $ 21,045 | ||||
Net realized investment gains (losses) | 38,507 | 3,590 | (29,655) | 13,980 | ||||
Change in unrealized holding gains and losses | 26,277 | 17,140 | 22,158 | 43,436 | ||||
Net realized and unrealized investment returns | 64,784 | 20,730 | (7,497) | 57,416 | ||||
Total investment return | $ 62,425 | $ 34,556 | $ 273 | $ 78,461 | ||||
Total investment return % | [1] | 3.90% | 2.20% | 0.00% | 5.10% | |||
Average investment portfolio | [2] | $ 1,591,987 | $ 1,537,280 | $ 1,620,186 | $ 1,533,155 | |||
|
Summary of Estimated Fair Values of Bonds Held on Deposit (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | $ 400,162 | $ 431,356 |
On Deposit With Governmental Authorities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 27,202 | 26,431 |
Intercompany Trusts Held For Benefit Of U.S. Policyholders | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 149,639 | 179,116 |
Held In Trust Pursuant To Third Party Requirements | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 129,020 | 133,122 |
Letter Of Credit Held For Third Party Requirements | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | 1,458 | 1,458 |
Securities Held As Collateral | ||
Debt Securities, Available-for-sale [Line Items] | ||
Estimated Fair Value | $ 92,843 | $ 91,229 |
Summarized Information on Location and Gross Amount of Derivatives on Consolidated Balance Sheets (Detail) - Not Designated as Hedging Instrument - Other Assets Liabilities - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
||
---|---|---|---|---|
Derivatives, Fair Value [Line Items] | ||||
Notional Amount | $ 234,932 | $ 274,710 | ||
Fair Value | (19,337) | (10,275) | ||
Interest Rate Swap | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional Amount | 200,000 | 200,000 | ||
Fair Value | (19,337) | (10,275) | ||
Futures Contracts on Bonds | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional Amount | [1] | 34,932 | 16,894 | |
Fair Value | [1] | 0 | 0 | |
Futures Contracts on Equities | ||||
Derivatives, Fair Value [Line Items] | ||||
Notional Amount | [1] | 0 | 57,816 | |
Fair Value | [1] | $ 0 | $ 0 | |
|
Summary of Net Gain (Loss) Included in Consolidated Statements of Operations for Changes in Fair Value of Derivatives and Periodic Net Interest Settlements Under Derivatives (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net gain (loss) for changes in fair value and net settlements of derivatives | $ (2,207) | $ (4,666) | $ (22,319) | $ (7,233) |
Interest Rate Swap | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net gain (loss) for changes in fair value and net settlements of derivatives | 1,100 | 200 | 1,700 | 400 |
Interest Rate Swap | Net Realized Investment Gains (Losses) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net gain (loss) for changes in fair value and net settlements of derivatives | (1,449) | (4,666) | (10,872) | (7,233) |
Futures Contracts on Bonds | Net Realized Investment Gains (Losses) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net gain (loss) for changes in fair value and net settlements of derivatives | (59) | 0 | (2,458) | 0 |
Futures Contracts on Equities | Net Realized Investment Gains (Losses) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net gain (loss) for changes in fair value and net settlements of derivatives | $ (699) | $ 0 | $ (8,989) | $ 0 |
Derivative Instruments - Additional Information (Detail) - USD ($) |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Trading Futures Contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Initial margin in securities | $ 600,000 | $ 3,000,000.0 |
Mark-to-market receivable | 300,000 | |
Trading Futures Contracts | Maximum | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Mark-to-market payable | 100,000 | |
Other Assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Funds needed to post execute swap transaction | 3,500,000 | 3,000,000.0 |
Other Assets | Interest Rate Swap | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Margin calls made in connection with interest rate swaps | $ 19,400,000 | $ 12,500,000 |
Company's Invested Assets and Derivative Instruments Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | $ 1,280,116 | $ 1,253,159 |
Equity securities | 220,184 | 263,104 |
U.S. Treasury and Agency Obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 223,091 | 156,689 |
Obligations of States and Political Subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 64,258 | 63,838 |
Mortgage Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 380,431 | 328,374 |
Commercial Mortgage-Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 139,556 | 188,104 |
Asset-backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 129,790 | 168,537 |
Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 242,181 | 248,259 |
Foreign Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 100,809 | 99,358 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 1,280,116 | 1,253,159 |
Equity securities | 220,184 | 263,104 |
Total invested assets | 1,500,300 | 1,516,263 |
Total invested liabilities | 19,337 | 10,275 |
Fair Value, Measurements, Recurring | Derivative instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested liabilities | 19,337 | 10,275 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 221,691 | 156,689 |
Equity securities | 209,437 | 251,448 |
Total invested assets | 431,128 | 408,137 |
Total invested liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Derivative instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 1,058,425 | 1,096,470 |
Equity securities | 10,747 | 11,656 |
Total invested assets | 1,069,172 | 1,108,126 |
Total invested liabilities | 19,337 | 10,275 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Derivative instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested liabilities | 19,337 | 10,275 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | 0 |
Equity securities | 0 | 0 |
Total invested assets | 0 | 0 |
Total invested liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Derivative instruments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | U.S. Treasury and Agency Obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 223,091 | 156,689 |
Fair Value, Measurements, Recurring | U.S. Treasury and Agency Obligations | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 221,691 | 156,689 |
Fair Value, Measurements, Recurring | U.S. Treasury and Agency Obligations | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 1,400 | 0 |
Fair Value, Measurements, Recurring | U.S. Treasury and Agency Obligations | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | 0 |
Fair Value, Measurements, Recurring | Obligations of States and Political Subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 64,258 | 63,838 |
Fair Value, Measurements, Recurring | Obligations of States and Political Subdivisions | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | 0 |
Fair Value, Measurements, Recurring | Obligations of States and Political Subdivisions | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 64,258 | 63,838 |
Fair Value, Measurements, Recurring | Obligations of States and Political Subdivisions | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | 0 |
Fair Value, Measurements, Recurring | Mortgage Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 380,431 | 328,374 |
Fair Value, Measurements, Recurring | Mortgage Backed Securities | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | 0 |
Fair Value, Measurements, Recurring | Mortgage Backed Securities | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 380,431 | 328,374 |
Fair Value, Measurements, Recurring | Mortgage Backed Securities | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | 0 |
Fair Value, Measurements, Recurring | Commercial Mortgage-Backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 139,556 | 188,104 |
Fair Value, Measurements, Recurring | Commercial Mortgage-Backed Securities | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | 0 |
Fair Value, Measurements, Recurring | Commercial Mortgage-Backed Securities | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 139,556 | 188,104 |
Fair Value, Measurements, Recurring | Commercial Mortgage-Backed Securities | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | 0 |
Fair Value, Measurements, Recurring | Asset-backed Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 129,790 | 168,537 |
Fair Value, Measurements, Recurring | Asset-backed Securities | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | 0 |
Fair Value, Measurements, Recurring | Asset-backed Securities | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 129,790 | 168,537 |
Fair Value, Measurements, Recurring | Asset-backed Securities | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | 0 |
Fair Value, Measurements, Recurring | Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 242,181 | 248,259 |
Fair Value, Measurements, Recurring | Corporate Bonds | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | 0 |
Fair Value, Measurements, Recurring | Corporate Bonds | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 242,181 | 248,259 |
Fair Value, Measurements, Recurring | Corporate Bonds | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | 0 |
Fair Value, Measurements, Recurring | Foreign Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 100,809 | 99,358 |
Fair Value, Measurements, Recurring | Foreign Corporate Bonds | Fair Value, Inputs, Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 0 | 0 |
Fair Value, Measurements, Recurring | Foreign Corporate Bonds | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | 100,809 | 99,358 |
Fair Value, Measurements, Recurring | Foreign Corporate Bonds | Fair Value, Inputs, Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total invested assets | $ 0 | $ 0 |
Current Fair Value of Debt (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
||||
---|---|---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Debt | $ 297,730 | $ 296,640 | ||||
Debt, fair value | 297,958 | 308,355 | ||||
7.75% Subordinated Notes due 2045 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Debt | [1] | 96,925 | 96,864 | |||
Debt, fair value | [1] | 97,725 | 100,264 | |||
7.875% Subordinated Notes due 2047 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Debt | [2] | 126,217 | 126,147 | |||
Debt, fair value | [2] | 125,645 | 134,462 | |||
Margin borrowing facilities | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Debt | 74,588 | 73,629 | ||||
Debt, fair value | $ 74,588 | $ 73,629 | ||||
|
Current Fair Value of Debt (Parenthetical) (Detail) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
7.75% Subordinated Notes due 2045 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Subordinated Notes percentage | 7.75% | 7.75% |
Subordinated Notes due date | 2045 | 2045 |
Unamortized Debt Issuance Costs | $ 3.1 | $ 3.1 |
7.875% Subordinated Notes due 2047 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Subordinated Notes percentage | 7.875% | 7.875% |
Subordinated Notes due date | 2047 | 2047 |
Unamortized Debt Issuance Costs | $ 3.8 | $ 3.9 |
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Equity in the earnings of liability companies or partnerships | $ 0 | $ 0 | $ 0 | $ 0 | |
Equity Method Investments | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Equity in the earnings of liability companies or partnerships | $ (12,000) | $ 3,800 | $ (11,500) | $ 100 | |
Variable Interest Entity, Not Primary Beneficiary | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Ownership interest exceeds respective investments | 3.00% | 3.00% | |||
7.75% Subordinated Notes due 2045 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Subordinated Notes due date | 2045 | 2045 | |||
7.875% Subordinated Notes due 2047 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Subordinated Notes due date | 2047 | 2047 | |||
Fair Value, Inputs, Level 1 | 7.75% Subordinated Notes due 2045 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Subordinated Notes due date | 2045 | ||||
Fair Value, Inputs, Level 1 | 7.875% Subordinated Notes due 2047 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Subordinated Notes due date | 2047 |
Fair Value and Future Funding Commitments Related to These Investments (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
||||||
---|---|---|---|---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value | $ 35,463 | $ 47,279 | ||||||
Future Funding Commitments | 31,214 | 31,720 | ||||||
European Non-Performing Loan Fund, LP | Fair Value, Inputs, Level 3 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value | [1] | 12,569 | 13,530 | |||||
Future Funding Commitments | [1] | 14,214 | 14,214 | |||||
Distressed Debt Fund, LP | Fair Value, Inputs, Level 3 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value | [2] | 14,212 | 23,966 | |||||
Future Funding Commitments | [2] | 17,000 | 17,000 | |||||
Mortgage Debt Fund, LP | Fair Value, Inputs, Level 3 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Fair Value | [3] | 8,682 | 9,783 | |||||
Future Funding Commitments | [3] | $ 0 | $ 506 | |||||
|
Allowance for Credit Losses - Premiums Receivable and Reinsurance Receivables - Schedule of Allowance for Credit Losses Related to Premiums Receivable and Reinsurance Receivables (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
|
Premiums Receivable | ||
Beginning balance | $ 2,746 | $ 2,754 |
Current period provision for expected credit losses | 313 | 475 |
Write-offs | (128) | (298) |
Ending balance | 2,931 | 2,931 |
Reinsurance Receivables | ||
Beginning balance | 8,992 | 8,992 |
Current period provision for expected credit losses | 0 | 0 |
Write-offs | 0 | 0 |
Ending balance | $ 8,992 | $ 8,992 |
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Income Tax [Line Items] | |||||
Effective income tax expense (benefit) rate | 15.70% | 7.50% | 41.40% | 13.80% | |
Alternative minimum tax credit carry forward | $ 5.5 | $ 5.5 | $ 11.0 | ||
Tax credit carryforwards, alternative minimum tax, amount of refund filed under CARES Act | 5.5 | 5.5 | |||
Net operating loss carryforwards | 21.5 | 21.5 | 21.9 | ||
Section 163(j) carryforward | $ 8.1 | 8.1 | $ 9.0 | ||
Alternative Minimum Tax Credits | |||||
Income Tax [Line Items] | |||||
Income tax refunds received | $ 5.5 | ||||
UNITED STATES | |||||
Income Tax [Line Items] | |||||
Statutory income tax rates | 21.00% | ||||
BERMUDA | |||||
Income Tax [Line Items] | |||||
Statutory income tax rates | 0.00% | ||||
CAYMAN ISLANDS | |||||
Income Tax [Line Items] | |||||
Statutory income tax rates | 0.00% | ||||
UNITED KINGDOM | |||||
Income Tax [Line Items] | |||||
Statutory income tax rates | 19.00% | ||||
IRELAND | Non Trading Income | |||||
Income Tax [Line Items] | |||||
Statutory income tax rates | 25.00% | ||||
IRELAND | Capital Gain | |||||
Income Tax [Line Items] | |||||
Statutory income tax rates | 33.00% | ||||
IRELAND | Trading Income | |||||
Income Tax [Line Items] | |||||
Statutory income tax rates | 12.50% |
Income (Loss) Before Income Taxes from its Non-U.S. Subsidiaries and U.S. Subsidiaries (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Revenues: | ||||
Gross written premiums | $ 164,549 | $ 179,321 | $ 320,273 | $ 321,522 |
Net written premiums | 147,264 | 159,069 | 286,376 | 282,485 |
Net earned premiums | 141,847 | 128,201 | 286,315 | 250,290 |
Net investment income (loss) | (2,359) | 13,826 | 7,770 | 21,045 |
Net realized investment gains (losses) | 38,507 | 3,590 | (29,655) | 13,980 |
Other income (loss) | 766 | 522 | 931 | 1,010 |
Total revenues | 178,761 | 146,139 | 265,361 | 286,325 |
Losses and Expenses: | ||||
Net losses and loss adjustment expenses | 67,297 | 70,075 | 144,944 | 128,396 |
Acquisition costs and other underwriting expenses | 53,578 | 50,534 | 109,990 | 100,277 |
Corporate and other operating expenses | 8,618 | 4,639 | 12,841 | 7,844 |
Interest expense | 4,712 | 5,042 | 9,577 | 10,065 |
Income (loss) before income taxes | 44,556 | 15,849 | (11,991) | 39,743 |
Non-U.S. Subsidiaries | ||||
Revenues: | ||||
Gross written premiums | 16,052 | 32,059 | 33,569 | 49,608 |
Net written premiums | 16,052 | 32,059 | 33,569 | 49,601 |
Net earned premiums | 19,546 | 18,579 | 43,401 | 33,286 |
Net investment income (loss) | 6,906 | 10,672 | 13,282 | 15,042 |
Net realized investment gains (losses) | (1,668) | 2,285 | (5,378) | 1,393 |
Other income (loss) | 302 | (38) | (16) | (23) |
Total revenues | 25,086 | 31,498 | 51,289 | 49,698 |
Losses and Expenses: | ||||
Net losses and loss adjustment expenses | (207) | |||
Net losses and loss adjustment expenses | 11,468 | 12,355 | 16,448 | |
Acquisition costs and other underwriting expenses | 5,695 | 5,360 | 14,244 | 10,355 |
Corporate and other operating expenses | 4,947 | 1,779 | 6,074 | 3,306 |
Interest expense | 334 | 355 | 676 | 708 |
Income (loss) before income taxes | 14,317 | 12,536 | 17,940 | 18,881 |
U.S. Subsidiaries | ||||
Revenues: | ||||
Gross written premiums | 148,497 | 147,262 | 286,704 | 271,914 |
Net written premiums | 131,212 | 127,010 | 252,807 | 232,884 |
Net earned premiums | 122,301 | 109,622 | 242,914 | 217,004 |
Net investment income (loss) | (5,777) | 9,956 | 1,473 | 13,092 |
Net realized investment gains (losses) | 40,175 | 1,305 | (24,277) | 12,587 |
Other income (loss) | 464 | 560 | 947 | 1,033 |
Total revenues | 157,163 | 121,443 | 221,057 | 243,716 |
Losses and Expenses: | ||||
Net losses and loss adjustment expenses | 67,504 | 58,607 | 132,589 | 111,948 |
Acquisition costs and other underwriting expenses | 47,883 | 45,174 | 95,746 | 89,922 |
Corporate and other operating expenses | 3,671 | 2,860 | 6,767 | 4,538 |
Interest expense | 7,866 | 11,489 | 15,886 | 16,446 |
Income (loss) before income taxes | 30,239 | 3,313 | (29,931) | 20,862 |
Eliminations | ||||
Revenues: | ||||
Gross written premiums | 0 | 0 | 0 | 0 |
Net written premiums | 0 | 0 | 0 | 0 |
Net earned premiums | 0 | 0 | 0 | 0 |
Net investment income (loss) | (3,488) | (6,802) | (6,985) | (7,089) |
Net realized investment gains (losses) | 0 | 0 | 0 | 0 |
Other income (loss) | 0 | 0 | 0 | 0 |
Total revenues | (3,488) | (6,802) | (6,985) | (7,089) |
Losses and Expenses: | ||||
Net losses and loss adjustment expenses | 0 | 0 | 0 | 0 |
Acquisition costs and other underwriting expenses | 0 | 0 | 0 | 0 |
Corporate and other operating expenses | 0 | 0 | 0 | 0 |
Interest expense | (3,488) | (6,802) | (6,985) | (7,089) |
Income (loss) before income taxes | $ 0 | $ 0 | $ 0 | $ 0 |
Components of Income Tax Expenses (Benefit) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Current income tax benefit: | ||||
Foreign | $ 0 | $ (64) | $ 0 | $ (18) |
U.S. Federal | 0 | 0 | 0 | 0 |
Total current income tax benefit | 0 | (64) | 0 | (18) |
Deferred income tax expense (benefit): | ||||
U.S. Federal | 7,005 | 1,250 | (4,964) | 5,498 |
Total deferred income tax expense (benefit) | 7,005 | 1,250 | (4,964) | 5,498 |
Total income tax expense (benefit) | $ 7,005 | $ 1,186 | $ (4,964) | $ 5,480 |
Differences in Tax Provision for Financial Statement Purposes and Expected Tax Provision at Weighted Average Tax Rate (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Expected tax provision at weighted average tax rate | $ 6,348 | $ 649 | $ (6,287) | $ 4,381 |
Adjustments: | ||||
Tax exempt interest | 0 | 0 | (1) | (1) |
Dividend exclusion | (41) | (146) | (112) | (223) |
Non-deductible interest | 678 | 688 | 1,357 | 1,368 |
Other | 20 | (5) | 79 | (45) |
Total income tax expense (benefit) | $ 7,005 | $ 1,186 | $ (4,964) | $ 5,480 |
Expected tax provision at weighted average | 14.20% | 4.10% | 52.40% | 11.00% |
Adjustments: | ||||
Tax exempt interest, % of Pre-Tax Income | 0.00% | 0.00% | 0.00% | 0.00% |
Dividend exclusion, % of Pre-Tax Income | (0.10%) | (0.90%) | (0.90%) | (0.60%) |
Non-deductible interest, % of Pre-Tax Income | 1.60% | 4.30% | (11.30%) | 3.50% |
Other, % of Pre-Tax Income | 0.00% | 0.00% | (0.60%) | (0.10%) |
Effective income tax expense (benefit) | 15.70% | 7.50% | 41.40% | 13.80% |
Summarized Activity in Liability for Unpaid Losses and Loss Adjustment Expenses (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Insurance [Abstract] | ||||
Balance at beginning of period | $ 639,468 | $ 645,959 | $ 630,181 | $ 680,031 |
Less: Ceded reinsurance receivables | 78,753 | 97,065 | 76,273 | 109,342 |
Net balance at beginning of period | 560,715 | 548,894 | 553,908 | 570,689 |
Incurred losses and loss adjustment expenses related to: | ||||
Current year | 86,603 | 78,238 | 164,850 | 144,489 |
Prior years | (19,306) | (8,163) | (19,906) | (16,093) |
Total incurred losses and loss adjustment expenses | 67,297 | 70,075 | 144,944 | 128,396 |
Paid losses and loss adjustment expenses related to: | ||||
Current year | 37,393 | 37,176 | 59,427 | 55,516 |
Prior years | 26,767 | 32,854 | 75,573 | 94,630 |
Total paid losses and loss adjustment expenses | 64,160 | 70,030 | 135,000 | 150,146 |
Net balance at end of period | 563,852 | 548,939 | 563,852 | 548,939 |
Plus: Ceded reinsurance receivables | 87,221 | 59,834 | 87,221 | 59,834 |
Balance at end of period | $ 651,073 | $ 608,773 | $ 651,073 | $ 608,773 |
Liability for Unpaid Losses and Loss Adjustment Expenses - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | $ (19,306) | $ (8,163) | $ (19,906) | $ (16,093) |
Commercial Specialty | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (14,200) | (200) | (14,200) | (6,900) |
Commercial Specialty | General Liability | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (18,300) | 1,000 | (18,000) | (4,100) |
Commercial Specialty | General Liability | Reinsurance Recoverable Allowance | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | 1,000 | |||
Commercial Specialty | General Liability | Accident Years 2005 through 2009 and 2015 through 2017 | Construction Defect | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (4,700) | (4,700) | ||
Commercial Specialty | General Liability | Accident Years 2005 through 2017 and 2019 | Other General Liability | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (13,600) | |||
Commercial Specialty | General Liability | Accident Years 2005 through 2015 and 2016 through 2019 | Other General Liability | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (13,300) | |||
Commercial Specialty | General Liability | Accident Years 2005 Through 2018 | Construction Defect | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (500) | |||
Commercial Specialty | General Liability | Accident Years 2001, 2005 Through 2017 | Other General Liability | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (4,600) | |||
Commercial Specialty | Commercial Auto Liability | Accident Years 2010 through 2016 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (1,000) | (1,000) | ||
Commercial Specialty | Commercial Auto Liability | Accident Years 2010, 2012 and 2013 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (800) | |||
Commercial Specialty | Property Lines | Accident Year 2016, 2017 through 2019 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | 5,800 | |||
Commercial Specialty | Property Lines | Accident Years 2017 through 2019 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | 5,800 | |||
Commercial Specialty | Property Lines | Accident Years 2010, 2012 Through 2018 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (900) | |||
Commercial Specialty | Professional Liability | Accident Years 2009 and 2010 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (700) | (1,100) | (1,000) | |
Commercial Specialty | Professional Liability | Accident Years 2006, 2009, 2010 and 2019 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (700) | |||
Commercial Specialty | Workers Compensation | Accident Years Prior to 2004 and 2012 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (200) | |||
Reinsurance Operations | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | 300 | 3,000 | (300) | 2,900 |
Reinsurance Operations | Property Lines | Accident years 2011, 2012 through 2019 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | 300 | (300) | ||
Reinsurance Operations | Property Lines | Accident Years 2018 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | 8,100 | |||
Reinsurance Operations | Property Lines | Accident Years 2018 | Typhoon Jebi | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | 6,500 | 6,500 | ||
Reinsurance Operations | Property Lines | Accident Years 2010 through 2015 and 2018 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | 3,200 | |||
Reinsurance Operations | Property Lines | Accident years 2010 through 2018 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | 3,100 | |||
Reinsurance Operations | Professional Liability | Accident Years 2008 and 2010 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (300) | (300) | ||
Specialty Property | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (4,600) | (10,100) | (4,600) | (9,200) |
Specialty Property | General Liability | Accident Years 2015 through 2018 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (1,400) | |||
Specialty Property | General Liability | Accident Years 2015 through 2019 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (1,800) | |||
Specialty Property | General Liability | Accident Years 2010, 2014 and 2017 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (200) | |||
Specialty Property | Property Lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (10,000) | |||
Specialty Property | Property Lines | Accident Years 2015 through 2019 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (3,200) | (2,800) | ||
Specialty Property | Property Lines | Accident Years 2018 | Catastrophe | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (8,300) | (8,300) | ||
Specialty Property | Property Lines | Accident Years 2016 Through 2018 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (1,700) | (9,200) | ||
Farm, Ranch & Stable | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (800) | (800) | (800) | (2,800) |
Farm, Ranch & Stable | General Liability | Accident Years 2013, 2015 through 2017, and 2019 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (100) | |||
Farm, Ranch & Stable | General Liability | Accident Years 2013, 2015 through 2017 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (100) | |||
Farm, Ranch & Stable | Property Lines | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (700) | (1,100) | ||
Farm, Ranch & Stable | Property Lines | Accident Years 2016 through 2019 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | $ (700) | $ (700) | ||
Farm, Ranch & Stable | Property Lines | Accident Years 2018 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | (200) | (200) | ||
Farm, Ranch & Stable | Property Lines | Accident Years 2017 and 2018 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | $ (500) | (900) | ||
Farm, Ranch & Stable | Liability Lines | Accident Years 2013, 2016 and 2017 | ||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | ||||
Changes in prior year reserve | $ (1,700) |
Shareholders' Equity - Additional Information (Detail) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020
USD ($)
Stockholder
$ / shares
shares
|
Jun. 30, 2019
$ / shares
shares
|
Jun. 30, 2020
USD ($)
Stockholder
$ / shares
shares
|
Jun. 30, 2019
$ / shares
shares
|
Dec. 31, 2019
USD ($)
|
|
Equity [Line Items] | |||||
Dividend payable, per share | $ / shares | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | |
Accrued dividends | $ | $ 0.5 | $ 0.5 | $ 0.3 | ||
Ordinary Shares A | |||||
Equity [Line Items] | |||||
Shares repurchased | shares | 0 | 0 | 4,724 | 27,028 | |
Number of shareholders | Stockholder | 205 | 205 | |||
Ordinary Shares B | |||||
Equity [Line Items] | |||||
Shares repurchased | shares | 0 | 0 | 0 | 0 | |
Number of shareholders | Stockholder | 4 | 4 |
Information with Respect to A Ordinary Shares that were Surrendered or Repurchased (Detail) - Ordinary Shares A - USD ($) |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Total Number of Shares Purchased | 0 | 0 | 4,724 | 27,028 | ||||
Average Price Paid Per Share | $ 30.14 | $ 35.07 | ||||||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | 0 | 0 | ||||||
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | $ 0 | $ 0 | $ 0 | $ 0 | ||||
January 1-31, 2020 | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Total Number of Shares Purchased | [1],[2] | 3,124 | ||||||
Average Price Paid Per Share | [1] | $ 29.63 | ||||||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | [1] | 0 | ||||||
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | [1] | 0 | $ 0 | |||||
February 1-29, 2020 | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Total Number of Shares Purchased | [1],[2] | 1,600 | ||||||
Average Price Paid Per Share | [1] | $ 31.13 | ||||||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | [1] | 0 | ||||||
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | [1] | $ 0 | $ 0 | |||||
January 1-31, 2019 | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Total Number of Shares Purchased | [1],[2] | 7,945 | ||||||
Average Price Paid Per Share | [1] | $ 36.23 | ||||||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | [1] | 0 | ||||||
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | [1] | 0 | $ 0 | |||||
February 1-28, 2019 | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Total Number of Shares Purchased | [1],[2] | 19,083 | ||||||
Average Price Paid Per Share | [1] | $ 34.59 | ||||||
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program | [1] | 0 | ||||||
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | [1] | $ 0 | $ 0 | |||||
|
Schedule of Dividends Declared (Detail) - USD ($) $ in Thousands |
6 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 07, 2020 |
Mar. 31, 2020 |
Feb. 09, 2020 |
Jun. 28, 2019 |
Jun. 02, 2019 |
Mar. 29, 2019 |
Feb. 10, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||
Dividends Payable [Line Items] | ||||||||||||
Approval Date | Jun. 07, 2020 | Feb. 09, 2020 | Jun. 02, 2019 | Feb. 10, 2019 | ||||||||
Record Date | Jun. 23, 2020 | Mar. 24, 2020 | Jun. 21, 2019 | Mar. 22, 2019 | ||||||||
Payment Date | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 28, 2019 | Mar. 29, 2019 | ||||||||
Payment of dividends | $ 3,545 | $ 3,539 | $ 3,525 | $ 3,521 | $ 7,299 | $ 7,156 | ||||||
Unvested Shares, Net of Forfeitures | ||||||||||||
Dividends Payable [Line Items] | ||||||||||||
Approval Date | Various | Various | ||||||||||
Record Date | Various | Various | ||||||||||
Payment Date | Various | Various | ||||||||||
Payment of dividends | [1] | $ 215 | $ 110 | |||||||||
|
Related Party Transactions - Additional Information (Detail) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|---|
May 06, 2020 |
May 31, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Fox Paine Funds | |||||||
Related Party Transaction [Line Items] | |||||||
Company's total voting power | 77.50% | 77.50% | |||||
FM Entities | |||||||
Related Party Transaction [Line Items] | |||||||
Company's total voting power | 4.80% | 4.80% | |||||
Fox Paine Entities | |||||||
Related Party Transaction [Line Items] | |||||||
Minimum voting power required to nominate Directors | 25.00% | 25.00% | |||||
Fox Paine and Company | |||||||
Related Party Transaction [Line Items] | |||||||
Elimination of reimbursable expenses | $ 550,000 | ||||||
Increase in management fee | $ 550,000 | ||||||
Management fees | $ 800,000 | $ 500,000 | $ 1,400,000 | $ 1,000,000.0 | |||
Prepaid management fees | $ 400,000 | $ 400,000 | $ 1,400,000 | ||||
Advisory services fees estimated | $ 2,000,000.0 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
Dec. 31, 2017 |
Dec. 31, 2014 |
---|---|---|---|---|
Commitments and Contingencies [Line Items] | ||||
Commitment to purchase alternative investment | $ 10,000 | $ 50,000 | $ 50,000 | |
Future Funding Commitments | $ 31,214 | $ 31,720 | ||
European Non-Performing Loan Fund, LP | ||||
Commitments and Contingencies [Line Items] | ||||
Funded commitment amount | 35,800 | |||
Distressed Debt Fund, LP | ||||
Commitments and Contingencies [Line Items] | ||||
Funded commitment amount | 33,000 | |||
Unfunded Commitments | European Non-Performing Loan Fund, LP | ||||
Commitments and Contingencies [Line Items] | ||||
Future Funding Commitments | 14,200 | |||
Unfunded Commitments | Distressed Debt Fund, LP | ||||
Commitments and Contingencies [Line Items] | ||||
Future Funding Commitments | $ 17,000 |
Share-Based Compensation Plans - Additional Information (Detail) - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options awarded | 0 | 0 | 0 | 0 |
Unvested stock options forfeited | 0 | 0 | 0 | 0 |
Restricted Stock | Key Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted | 0 | 0 | 0 | 36,180 |
Weighted average fair value per share | $ 35.82 | |||
Shares vested | 9,063 | |||
Stock options, vested and expected to vest | 27,117 | 27,117 | ||
Restricted Stock | Key Employees | Share-based Payment Arrangement, Tranche 1 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares vested on each anniversary of the grant date | 16.50% | |||
Vesting date | Jan. 01, 2020 | |||
Restricted Stock | Key Employees | Share-based Compensation Award, Tranche 2 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares vested on each anniversary of the grant date | 16.50% | |||
Vesting date | Jan. 01, 2021 | |||
Restricted Stock | Key Employees | Share-based Compensation Award, Tranche 3 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares vested on each anniversary of the grant date | 17.00% | |||
Vesting date | Jan. 01, 2022 | |||
Restricted Stock | Key Employees | Vesting Schedule Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares vested on each anniversary of the grant date | 100.00% | |||
Vesting date | Mar. 15, 2022 | |||
Percentage of stock award subject to vesting | 50.00% | |||
Restricted Stock | Non Employee Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted | 28,482 | 15,544 | 51,609 | 31,386 |
Weighted average fair value per share | $ 23.70 | $ 30.96 | $ 26.16 | $ 30.67 |
Restricted Stock Units | Key Employees | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted | 0 | 175,498 | 161,238 | 175,498 |
Weighted average fair value per share | $ 30.18 | $ 30.32 | $ 30.18 | |
Shares vested | 3,375 | |||
Vesting year | 3 years | |||
Restricted Stock Units | Key Employees | Share-based Payment Arrangement, Tranche 1 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares vested on each anniversary of the grant date | 10.00% | 10.00% | ||
Vesting date | Jun. 18, 2021 | Jun. 18, 2021 | ||
Restricted Stock Units | Key Employees | Share-based Compensation Award, Tranche 2 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares vested on each anniversary of the grant date | 20.00% | 20.00% | ||
Vesting date | Jun. 18, 2022 | Jun. 18, 2022 | ||
Restricted Stock Units | Key Employees | Share-based Compensation Award, Tranche 3 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares vested on each anniversary of the grant date | 30.00% | 30.00% | ||
Vesting date | Jun. 18, 2023 | Jun. 18, 2023 | ||
Restricted Stock Units | Key Employees | Vesting Schedule Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options, vested and expected to vest | 90,906 | 90,906 | ||
Percentage of shares vested on each anniversary of the grant date | 100.00% | |||
Vesting date | Mar. 15, 2023 | |||
Percentage of stock award subject to vesting | 50.00% | |||
Restricted Stock Units | Key Employees | Vesting Schedule One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options, vested and expected to vest | 66,957 | 66,957 | ||
Restricted Stock Units | Key Employees | Share-based Compensation Award, Tranche 4 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares vested on each anniversary of the grant date | 40.00% | 40.00% | ||
Vesting date | Jun. 18, 2024 | Jun. 18, 2024 | ||
Restricted Stock Units | Key Employees | Share-based Payment Arrangement, Tranche 5 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares vested on each anniversary of the grant date | 16.50% | |||
Vesting date | Jan. 01, 2021 | |||
Restricted Stock Units | Key Employees | Share-based Compensation Award, Tranche 6 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares vested on each anniversary of the grant date | 16.50% | |||
Vesting date | Jan. 01, 2022 | |||
Restricted Stock Units | Key Employees | Share-based Compensation Award, Tranche 7 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of shares vested on each anniversary of the grant date | 17.00% | |||
Vesting date | Jan. 01, 2023 |
Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||
Earnings Per Share [Abstract] | ||||||
Net income (loss) | $ 37,551 | $ 14,663 | $ (7,027) | $ 34,263 | ||
Weighted average shares outstanding – basic | 14,275,500 | 14,187,276 | 14,262,525 | 14,170,689 | ||
Net income (loss) per share | [1] | $ 2.63 | $ 1.03 | $ (0.49) | $ 2.42 | |
Weighted average shares outstanding – diluted | 14,389,400 | 14,331,286 | 14,262,525 | 14,324,614 | ||
Net income (loss) per share | [1] | $ 2.61 | $ 1.02 | $ (0.49) | $ 2.39 | |
|
Reconciliation of Weighted Average Shares for Basic and Diluted Earnings Per Share (Detail) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Reconciliation Of Basic Weighted Average Shares To Diluted Weighted Average Shares [Line Items] | ||||
Weighted average shares for basic earnings per share | 14,275,500 | 14,187,276 | 14,262,525 | 14,170,689 |
Weighted average shares for diluted earnings per share | 14,389,400 | 14,331,286 | 14,262,525 | 14,324,614 |
Restricted Stock | ||||
Reconciliation Of Basic Weighted Average Shares To Diluted Weighted Average Shares [Line Items] | ||||
Non-vested restricted stock, units and options | 14,112 | 21,293 | 0 | 17,783 |
Restricted Stock Units | ||||
Reconciliation Of Basic Weighted Average Shares To Diluted Weighted Average Shares [Line Items] | ||||
Non-vested restricted stock, units and options | 24,293 | 117 | 0 | 949 |
Stock Options | ||||
Reconciliation Of Basic Weighted Average Shares To Diluted Weighted Average Shares [Line Items] | ||||
Non-vested restricted stock, units and options | 75,495 | 122,600 | 0 | 135,193 |
Earning Per Share - Additional Information (Detail) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Incremental shares included in calculation of diluted EPS | 14,408,907 | |||
Shares excluded from calculation of diluted earnings per share | 570,332 | 500,000 | 566,957 | 500,000 |
Restricted Stock Diluted | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Non-vested restricted stock, units and options | 15,195 | |||
Restricted Stock Units Diluted | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Non-vested restricted stock, units and options | 29,691 | |||
Stock Options Diluted | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Non-vested restricted stock, units and options | 101,496 |
Segment Information - Additional Information (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2020
Segment
| |
Segment Reporting [Abstract] | |
Number of reportable business segments managed | 4 |
Summary of Business Segment Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|||||
Revenues: | |||||||||
Gross written premiums | $ 164,549 | $ 179,321 | $ 320,273 | $ 321,522 | |||||
Net written premiums | 147,264 | 159,069 | 286,376 | 282,485 | |||||
Net earned premiums | 141,847 | 128,201 | 286,315 | 250,290 | |||||
Other income (loss) | 744 | 522 | 912 | 1,010 | |||||
Total revenues | 142,591 | 128,723 | 287,227 | 251,300 | |||||
Losses and Expenses: | |||||||||
Net losses and loss adjustment expenses | 67,297 | 70,075 | 144,944 | 128,396 | |||||
Acquisition costs and other underwriting expenses | 53,578 | 50,534 | 109,990 | 100,277 | |||||
Income from segments | 21,716 | 8,114 | 32,293 | 22,627 | |||||
Unallocated Items: | |||||||||
Net investment income (loss) | (2,359) | 13,826 | 7,770 | 21,045 | |||||
Net realized investment gains (losses) | 38,507 | 3,590 | (29,655) | 13,980 | |||||
Other income | 22 | 19 | |||||||
Corporate and other operating expenses | (8,618) | (4,639) | (12,841) | (7,844) | |||||
Interest expense | (4,712) | (5,042) | (9,577) | (10,065) | |||||
Income (loss) before income taxes | 44,556 | 15,849 | (11,991) | 39,743 | |||||
Income tax expense (benefit) | (7,005) | (1,186) | 4,964 | (5,480) | |||||
Net income (loss) | 37,551 | 14,663 | (7,027) | 34,263 | |||||
Total assets | 2,113,148 | 2,015,472 | 2,113,148 | 2,015,472 | $ 2,075,885 | ||||
Segment Assets | |||||||||
Unallocated Items: | |||||||||
Total assets | 1,374,771 | 1,415,626 | 1,374,771 | 1,415,626 | |||||
Corporate Assets | |||||||||
Unallocated Items: | |||||||||
Total assets | 738,377 | 599,846 | 738,377 | 599,846 | |||||
Commercial Specialty | |||||||||
Revenues: | |||||||||
Gross written premiums | [1] | 87,297 | 77,079 | 168,128 | 141,292 | ||||
Net written premiums | [1] | 77,880 | 67,107 | 150,363 | 122,277 | ||||
Net earned premiums | [1] | 69,728 | 56,705 | 137,442 | 112,346 | ||||
Other income (loss) | [1] | 0 | 0 | 0 | 0 | ||||
Total revenues | [1] | 69,728 | 56,705 | 137,442 | 112,346 | ||||
Losses and Expenses: | |||||||||
Net losses and loss adjustment expenses | [1] | 28,877 | 32,691 | 66,312 | 54,342 | ||||
Acquisition costs and other underwriting expenses | [1] | 26,516 | 22,890 | 52,509 | 45,702 | ||||
Income from segments | [1] | 14,335 | 1,124 | 18,621 | 12,302 | ||||
Unallocated Items: | |||||||||
Net investment income (loss) | [1] | 0 | 0 | 0 | 0 | ||||
Net realized investment gains (losses) | [1] | 0 | 0 | 0 | 0 | ||||
Other income | [1] | 0 | 0 | ||||||
Corporate and other operating expenses | [1] | 0 | 0 | 0 | 0 | ||||
Interest expense | [1] | 0 | 0 | 0 | 0 | ||||
Income (loss) before income taxes | [1] | 0 | 0 | 0 | 0 | ||||
Income tax expense (benefit) | [1] | 0 | 0 | 0 | 0 | ||||
Net income (loss) | [1] | 0 | 0 | 0 | 0 | ||||
Total assets | [1] | 0 | 0 | 0 | 0 | ||||
Commercial Specialty | Segment Assets | |||||||||
Unallocated Items: | |||||||||
Total assets | [1] | 753,310 | 698,466 | 753,310 | 698,466 | ||||
Commercial Specialty | Corporate Assets | |||||||||
Unallocated Items: | |||||||||
Total assets | [1] | 0 | 0 | 0 | 0 | ||||
Specialty Property | |||||||||
Revenues: | |||||||||
Gross written premiums | [1] | 37,978 | 46,486 | 73,221 | 86,160 | ||||
Net written premiums | [1] | 33,075 | 39,828 | 63,082 | 73,040 | ||||
Net earned premiums | [1] | 33,543 | 35,567 | 67,759 | 70,186 | ||||
Other income (loss) | [1] | 429 | 498 | 856 | 941 | ||||
Total revenues | [1] | 33,972 | 36,065 | 68,615 | 71,127 | ||||
Losses and Expenses: | |||||||||
Net losses and loss adjustment expenses | [1] | 13,691 | 11,111 | 31,189 | 31,614 | ||||
Acquisition costs and other underwriting expenses | [1] | 13,761 | 14,939 | 27,993 | 29,592 | ||||
Income from segments | [1] | 6,520 | 10,015 | 9,433 | 9,921 | ||||
Unallocated Items: | |||||||||
Net investment income (loss) | [1] | 0 | 0 | 0 | 0 | ||||
Net realized investment gains (losses) | [1] | 0 | 0 | 0 | 0 | ||||
Other income | [1] | 0 | 0 | ||||||
Corporate and other operating expenses | [1] | 0 | 0 | 0 | 0 | ||||
Interest expense | [1] | 0 | 0 | 0 | 0 | ||||
Income (loss) before income taxes | [1] | 0 | 0 | 0 | 0 | ||||
Income tax expense (benefit) | [1] | 0 | 0 | 0 | 0 | ||||
Net income (loss) | [1] | 0 | 0 | 0 | 0 | ||||
Total assets | [1] | 0 | 0 | 0 | 0 | ||||
Specialty Property | Segment Assets | |||||||||
Unallocated Items: | |||||||||
Total assets | [1] | 203,561 | 230,351 | 203,561 | 230,351 | ||||
Specialty Property | Corporate Assets | |||||||||
Unallocated Items: | |||||||||
Total assets | [1] | 0 | 0 | 0 | 0 | ||||
Farm, Ranch & Stable | |||||||||
Revenues: | |||||||||
Gross written premiums | [1] | 23,222 | 23,697 | 45,355 | 44,462 | ||||
Net written premiums | [1] | 20,257 | 20,075 | 39,362 | 37,567 | ||||
Net earned premiums | [1] | 19,030 | 17,350 | 37,713 | 34,472 | ||||
Other income (loss) | [1] | 36 | 32 | 72 | 62 | ||||
Total revenues | [1] | 19,066 | 17,382 | 37,785 | 34,534 | ||||
Losses and Expenses: | |||||||||
Net losses and loss adjustment expenses | [1] | 13,439 | 13,126 | 23,049 | 21,264 | ||||
Acquisition costs and other underwriting expenses | [1] | 7,606 | 7,345 | 15,244 | 14,627 | ||||
Income from segments | [1] | (1,979) | (3,089) | (508) | (1,357) | ||||
Unallocated Items: | |||||||||
Net investment income (loss) | [1] | 0 | 0 | 0 | 0 | ||||
Net realized investment gains (losses) | [1] | 0 | 0 | 0 | 0 | ||||
Other income | [1] | 0 | 0 | ||||||
Corporate and other operating expenses | [1] | 0 | 0 | 0 | 0 | ||||
Interest expense | [1] | 0 | 0 | 0 | 0 | ||||
Income (loss) before income taxes | [1] | 0 | 0 | 0 | 0 | ||||
Income tax expense (benefit) | [1] | 0 | 0 | 0 | 0 | ||||
Net income (loss) | [1] | 0 | 0 | 0 | 0 | ||||
Total assets | [1] | 0 | 0 | 0 | 0 | ||||
Farm, Ranch & Stable | Segment Assets | |||||||||
Unallocated Items: | |||||||||
Total assets | [1] | 140,658 | 140,154 | 140,658 | 140,154 | ||||
Farm, Ranch & Stable | Corporate Assets | |||||||||
Unallocated Items: | |||||||||
Total assets | [1] | 0 | 0 | 0 | 0 | ||||
Reinsurance Operations | |||||||||
Revenues: | |||||||||
Gross written premiums | [2] | 16,052 | 32,059 | 33,569 | 49,608 | ||||
Net written premiums | [2] | 16,052 | 32,059 | 33,569 | 49,601 | ||||
Net earned premiums | [2] | 19,546 | 18,579 | 43,401 | 33,286 | ||||
Other income (loss) | [2] | 279 | (8) | (16) | 7 | ||||
Total revenues | [2] | 19,825 | 18,571 | 43,385 | 33,293 | ||||
Losses and Expenses: | |||||||||
Net losses and loss adjustment expenses | [2] | 11,290 | 13,147 | 24,394 | 21,176 | ||||
Acquisition costs and other underwriting expenses | [2] | 5,695 | 5,360 | 14,244 | 10,356 | ||||
Income from segments | [2] | 2,840 | 64 | 4,747 | 1,761 | ||||
Unallocated Items: | |||||||||
Net investment income (loss) | [2] | 0 | 0 | 0 | 0 | ||||
Net realized investment gains (losses) | [2] | 0 | 0 | 0 | 0 | ||||
Other income | [2] | 0 | 0 | ||||||
Corporate and other operating expenses | [2] | 0 | 0 | 0 | 0 | ||||
Interest expense | [2] | 0 | 0 | 0 | 0 | ||||
Income (loss) before income taxes | [2] | 0 | 0 | 0 | 0 | ||||
Income tax expense (benefit) | [2] | 0 | 0 | 0 | 0 | ||||
Net income (loss) | [2] | 0 | 0 | 0 | 0 | ||||
Total assets | [2] | 0 | 0 | 0 | 0 | ||||
Reinsurance Operations | Segment Assets | |||||||||
Unallocated Items: | |||||||||
Total assets | [2] | 277,242 | 346,655 | 277,242 | 346,655 | ||||
Reinsurance Operations | Corporate Assets | |||||||||
Unallocated Items: | |||||||||
Total assets | [2] | $ 0 | $ 0 | $ 0 | $ 0 | ||||
|
Condensed Consolidating Financial Information Provided in Connection with Outstanding Debt of Subsidiaries - Additional Information (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
GBLI Holdings, LLC | |
Condensed Financial Statements, Captions [Line Items] | |
Ownership percentage in subsidiary | 100.00% |
Schedule of Condensed Consolidating Balance Sheets (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
||||
---|---|---|---|---|---|---|---|---|---|---|
ASSETS | ||||||||||
Total investments | $ 1,535,763 | $ 1,563,542 | ||||||||
Cash and cash equivalents | 76,393 | 44,271 | $ 56,215 | $ 99,497 | ||||||
Investments in subsidiaries | 0 | 0 | ||||||||
Due from subsidiaries and affiliates | 0 | 0 | ||||||||
Notes receivable – affiliate | 0 | 0 | ||||||||
Interest receivable – affiliate | 0 | 0 | ||||||||
Premiums receivable, net | 125,300 | 118,035 | ||||||||
Reinsurance receivables, net | 91,089 | 83,938 | ||||||||
Funds held by ceding insurers | 47,820 | 48,580 | ||||||||
Federal income taxes receivable | 5,511 | 10,989 | ||||||||
Deferred federal income taxes | 33,967 | 31,077 | ||||||||
Deferred acquisition costs | 70,119 | 70,677 | ||||||||
Intangible assets | 21,227 | 21,491 | ||||||||
Goodwill | 6,521 | 6,521 | ||||||||
Prepaid reinsurance premiums | 15,854 | 16,716 | ||||||||
Receivable for securities sold | 21,252 | |||||||||
Other assets | 62,332 | 60,048 | ||||||||
Total assets | 2,113,148 | 2,075,885 | 2,015,472 | |||||||
Liabilities: | ||||||||||
Unpaid losses and loss adjustment expenses | 651,073 | $ 639,468 | 630,181 | 608,773 | $ 645,959 | 680,031 | ||||
Unearned premiums | 314,061 | 314,861 | ||||||||
Ceded balances payable | 23,660 | 20,404 | ||||||||
Payable for securities purchased | 0 | 850 | ||||||||
Contingent commissions | 8,676 | 11,928 | ||||||||
Debt | 297,730 | 296,640 | ||||||||
Notes payable – affiliates | 0 | 0 | ||||||||
Accrued interest payable – affiliates | 0 | 0 | ||||||||
Other liabilities | 82,754 | 74,212 | ||||||||
Total liabilities | 1,377,954 | 1,349,076 | ||||||||
Shareholders’ equity | ||||||||||
Total shareholders’ equity | 735,194 | 726,809 | 694,512 | |||||||
Total liabilities and shareholders’ equity | 2,113,148 | 2,075,885 | ||||||||
Global Indemnity Limited (Parent co-obligor) | Reportable Legal Entities | ||||||||||
ASSETS | ||||||||||
Total investments | 252,209 | 44,468 | ||||||||
Cash and cash equivalents | 7,361 | 977 | 132 | 2,221 | ||||||
Investments in subsidiaries | 1,003,701 | 1,218,491 | ||||||||
Due from subsidiaries and affiliates | (110) | (3,612) | ||||||||
Notes receivable – affiliate | 0 | 0 | ||||||||
Interest receivable – affiliate | 0 | 0 | ||||||||
Premiums receivable, net | 0 | 0 | ||||||||
Reinsurance receivables, net | 0 | 0 | ||||||||
Funds held by ceding insurers | 0 | 0 | ||||||||
Federal income taxes receivable | 0 | 0 | ||||||||
Deferred federal income taxes | 0 | 0 | ||||||||
Deferred acquisition costs | 0 | 0 | ||||||||
Intangible assets | 0 | 0 | ||||||||
Goodwill | 0 | 0 | ||||||||
Prepaid reinsurance premiums | 0 | 0 | ||||||||
Receivable for securities sold | 0 | |||||||||
Other assets | 17,950 | 9,394 | ||||||||
Total assets | 1,281,111 | 1,269,718 | ||||||||
Liabilities: | ||||||||||
Unpaid losses and loss adjustment expenses | 0 | 0 | ||||||||
Unearned premiums | 0 | 0 | ||||||||
Ceded balances payable | 0 | 0 | ||||||||
Payable for securities purchased | 0 | |||||||||
Contingent commissions | 0 | 0 | ||||||||
Debt | 0 | 0 | ||||||||
Notes payable – affiliates | 520,498 | 520,498 | ||||||||
Accrued interest payable – affiliates | 20,764 | 20,343 | ||||||||
Other liabilities | 4,655 | 2,068 | ||||||||
Total liabilities | 545,917 | 542,909 | ||||||||
Shareholders’ equity | ||||||||||
Total shareholders’ equity | 735,194 | 726,809 | ||||||||
Total liabilities and shareholders’ equity | 1,281,111 | 1,269,718 | ||||||||
GBLI Holdings, LLC (Subsidiary co-obligor) | Reportable Legal Entities | ||||||||||
ASSETS | ||||||||||
Total investments | 189,461 | 257,317 | ||||||||
Cash and cash equivalents | 3,043 | 2,663 | 353 | 26,039 | ||||||
Investments in subsidiaries | 395,644 | 355,777 | ||||||||
Due from subsidiaries and affiliates | (5,588) | (3,965) | ||||||||
Notes receivable – affiliate | 98,549 | 80,049 | ||||||||
Interest receivable – affiliate | 5,557 | 5,014 | ||||||||
Premiums receivable, net | 0 | 0 | ||||||||
Reinsurance receivables, net | 0 | 0 | ||||||||
Funds held by ceding insurers | 0 | 0 | ||||||||
Federal income taxes receivable | 9,961 | 14,197 | ||||||||
Deferred federal income taxes | 35,828 | 31,833 | ||||||||
Deferred acquisition costs | 0 | 0 | ||||||||
Intangible assets | 0 | 0 | ||||||||
Goodwill | 0 | 0 | ||||||||
Prepaid reinsurance premiums | 0 | 0 | ||||||||
Receivable for securities sold | 0 | |||||||||
Other assets | 20,335 | 12,622 | ||||||||
Total assets | 752,790 | 755,507 | ||||||||
Liabilities: | ||||||||||
Unpaid losses and loss adjustment expenses | 0 | 0 | ||||||||
Unearned premiums | 0 | 0 | ||||||||
Ceded balances payable | 0 | 0 | ||||||||
Payable for securities purchased | 0 | |||||||||
Contingent commissions | 0 | 0 | ||||||||
Debt | 304,587 | 303,629 | ||||||||
Notes payable – affiliates | 0 | 0 | ||||||||
Accrued interest payable – affiliates | 0 | 0 | ||||||||
Other liabilities | 25,989 | 17,600 | ||||||||
Total liabilities | 330,576 | 321,229 | ||||||||
Shareholders’ equity | ||||||||||
Total shareholders’ equity | 422,214 | 434,278 | ||||||||
Total liabilities and shareholders’ equity | 752,790 | 755,507 | ||||||||
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) | ||||||||||
ASSETS | ||||||||||
Total investments | [1] | 1,094,093 | 1,261,757 | |||||||
Cash and cash equivalents | [1] | 65,989 | 40,631 | $ 55,730 | $ 71,237 | |||||
Investments in subsidiaries | [1] | 422,214 | 434,278 | |||||||
Due from subsidiaries and affiliates | [1] | 5,698 | 7,577 | |||||||
Notes receivable – affiliate | [1] | 445,498 | 445,498 | |||||||
Interest receivable – affiliate | [1] | 17,259 | 17,258 | |||||||
Premiums receivable, net | [1] | 125,300 | 118,035 | |||||||
Reinsurance receivables, net | [1] | 91,089 | 83,938 | |||||||
Funds held by ceding insurers | [1] | 47,820 | 48,580 | |||||||
Federal income taxes receivable | [1] | (4,450) | (3,208) | |||||||
Deferred federal income taxes | [1] | (1,861) | (756) | |||||||
Deferred acquisition costs | [1] | 70,119 | 70,677 | |||||||
Intangible assets | [1] | 21,227 | 21,491 | |||||||
Goodwill | [1] | 6,521 | 6,521 | |||||||
Prepaid reinsurance premiums | [1] | 15,854 | 16,716 | |||||||
Receivable for securities sold | [1] | 21,252 | ||||||||
Other assets | [1] | 30,904 | 45,021 | |||||||
Total assets | [1] | 2,474,526 | 2,614,014 | |||||||
Liabilities: | ||||||||||
Unpaid losses and loss adjustment expenses | [1] | 651,073 | 630,181 | |||||||
Unearned premiums | [1] | 314,061 | 314,861 | |||||||
Ceded balances payable | [1] | 23,660 | 20,404 | |||||||
Payable for securities purchased | [1] | 850 | ||||||||
Contingent commissions | [1] | 8,676 | 11,928 | |||||||
Debt | [1] | 0 | 0 | |||||||
Notes payable – affiliates | [1] | 23,549 | 5,049 | |||||||
Accrued interest payable – affiliates | [1] | 2,052 | 1,929 | |||||||
Other liabilities | [1] | 52,110 | 54,544 | |||||||
Total liabilities | [1] | 1,075,181 | 1,039,746 | |||||||
Shareholders’ equity | ||||||||||
Total shareholders’ equity | [1] | 1,399,345 | 1,574,268 | |||||||
Total liabilities and shareholders’ equity | [1] | 2,474,526 | 2,614,014 | |||||||
Consolidation Adjustments | ||||||||||
ASSETS | ||||||||||
Total investments | [2] | 0 | 0 | |||||||
Cash and cash equivalents | [2] | 0 | 0 | |||||||
Investments in subsidiaries | [2] | (1,821,559) | (2,008,546) | |||||||
Due from subsidiaries and affiliates | [2] | 0 | 0 | |||||||
Notes receivable – affiliate | [2] | (544,047) | (525,547) | |||||||
Interest receivable – affiliate | [2] | (22,816) | (22,272) | |||||||
Premiums receivable, net | [2] | 0 | 0 | |||||||
Reinsurance receivables, net | [2] | 0 | 0 | |||||||
Funds held by ceding insurers | [2] | 0 | 0 | |||||||
Federal income taxes receivable | [2] | 0 | 0 | |||||||
Deferred federal income taxes | [2] | 0 | 0 | |||||||
Deferred acquisition costs | [2] | 0 | 0 | |||||||
Intangible assets | [2] | 0 | 0 | |||||||
Goodwill | [2] | 0 | 0 | |||||||
Prepaid reinsurance premiums | [2] | 0 | 0 | |||||||
Receivable for securities sold | [2] | 0 | ||||||||
Other assets | [2] | (6,857) | (6,989) | |||||||
Total assets | [2] | (2,395,279) | (2,563,354) | |||||||
Liabilities: | ||||||||||
Unpaid losses and loss adjustment expenses | [2] | 0 | 0 | |||||||
Unearned premiums | [2] | 0 | 0 | |||||||
Ceded balances payable | [2] | 0 | 0 | |||||||
Payable for securities purchased | [2] | 0 | ||||||||
Contingent commissions | [2] | 0 | 0 | |||||||
Debt | [2] | (6,857) | (6,989) | |||||||
Notes payable – affiliates | [2] | (544,047) | (525,547) | |||||||
Accrued interest payable – affiliates | [2] | (22,816) | (22,272) | |||||||
Other liabilities | [2] | 0 | 0 | |||||||
Total liabilities | [2] | (573,720) | (554,808) | |||||||
Shareholders’ equity | ||||||||||
Total shareholders’ equity | [2] | (1,821,559) | (2,008,546) | |||||||
Total liabilities and shareholders’ equity | [2] | $ (2,395,279) | $ (2,563,354) | |||||||
|
Schedule of Condensed Consolidating Statements of Operations (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||||
Revenues: | ||||||||
Net earned premiums | $ 141,847 | $ 128,201 | $ 286,315 | $ 250,290 | ||||
Net investment income (loss) | (2,359) | 13,826 | 7,770 | 21,045 | ||||
Net realized investment gains (losses) | 38,507 | 3,590 | (29,655) | 13,980 | ||||
Other income | 766 | 522 | 931 | 1,010 | ||||
Total revenues | 178,761 | 146,139 | 265,361 | 286,325 | ||||
Losses and Expenses: | ||||||||
Net losses and loss adjustment expenses | 67,297 | 70,075 | 144,944 | 128,396 | ||||
Acquisition costs and other underwriting expenses | 53,578 | 50,534 | 109,990 | 100,277 | ||||
Corporate and other operating expenses | 8,618 | 4,639 | 12,841 | 7,844 | ||||
Interest expense | 4,712 | 5,042 | 9,577 | 10,065 | ||||
Income (loss) before income taxes | 44,556 | 15,849 | (11,991) | 39,743 | ||||
Equity in net income (loss) of subsidiaries | 0 | 0 | 0 | 0 | ||||
Income (loss) before income taxes | 44,556 | 15,849 | (11,991) | 39,743 | ||||
Income tax expense (benefit) | 7,005 | 1,186 | (4,964) | 5,480 | ||||
Net income (loss) | 37,551 | 14,663 | (7,027) | 34,263 | ||||
Global Indemnity Limited (Parent co-obligor) | Reportable Legal Entities | ||||||||
Revenues: | ||||||||
Net earned premiums | 0 | 0 | 0 | 0 | ||||
Net investment income (loss) | 800 | 729 | 598 | 1,371 | ||||
Net realized investment gains (losses) | 1,857 | 406 | (2,746) | 399 | ||||
Other income | 0 | 0 | 0 | 0 | ||||
Total revenues | 2,657 | 1,135 | (2,148) | 1,770 | ||||
Losses and Expenses: | ||||||||
Net losses and loss adjustment expenses | 0 | 0 | 0 | 0 | ||||
Acquisition costs and other underwriting expenses | 0 | 0 | 0 | 0 | ||||
Corporate and other operating expenses | 4,969 | 1,657 | 6,142 | 2,986 | ||||
Interest expense | 277 | 277 | 553 | 551 | ||||
Income (loss) before income taxes | (2,589) | (799) | (8,843) | (1,767) | ||||
Equity in net income (loss) of subsidiaries | 40,140 | 15,462 | 1,816 | 36,030 | ||||
Income (loss) before income taxes | 37,551 | 14,663 | (7,027) | 34,263 | ||||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||||
Net income (loss) | 37,551 | 14,663 | (7,027) | 34,263 | ||||
GBLI Holdings, LLC (Subsidiary co-obligor) | Reportable Legal Entities | ||||||||
Revenues: | ||||||||
Net earned premiums | 0 | 0 | 0 | 0 | ||||
Net investment income (loss) | (10,583) | 5,020 | (8,512) | 2,945 | ||||
Net realized investment gains (losses) | 23,484 | (582) | (40,707) | 11,494 | ||||
Other income | 0 | 2 | 19 | 30 | ||||
Total revenues | 12,901 | 4,440 | (49,200) | 14,469 | ||||
Losses and Expenses: | ||||||||
Net losses and loss adjustment expenses | 0 | 0 | 0 | 0 | ||||
Acquisition costs and other underwriting expenses | 0 | 0 | 0 | 0 | ||||
Corporate and other operating expenses | 3,527 | 2,681 | 6,481 | 4,247 | ||||
Interest expense | 4,637 | 4,961 | 9,436 | 9,918 | ||||
Income (loss) before income taxes | 4,737 | (3,202) | (65,117) | 304 | ||||
Equity in net income (loss) of subsidiaries | 22,683 | 7,005 | 32,821 | 14,898 | ||||
Income (loss) before income taxes | 27,420 | 3,803 | (32,296) | 15,202 | ||||
Income tax expense (benefit) | 1,632 | (1,503) | (12,431) | (163) | ||||
Net income (loss) | 25,788 | 5,306 | (19,865) | 15,365 | ||||
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) | ||||||||
Revenues: | ||||||||
Net earned premiums | [1] | 141,847 | 128,201 | 286,315 | 250,290 | |||
Net investment income (loss) | [1] | 7,690 | 8,366 | 16,227 | 17,305 | |||
Net realized investment gains (losses) | [1] | 13,166 | 3,766 | 13,798 | 2,087 | |||
Other income | [1] | 766 | 520 | 912 | 980 | |||
Total revenues | [1] | 163,469 | 140,853 | 317,252 | 270,662 | |||
Losses and Expenses: | ||||||||
Net losses and loss adjustment expenses | [1] | 67,297 | 70,075 | 144,944 | 128,396 | |||
Acquisition costs and other underwriting expenses | [1] | 53,578 | 50,534 | 109,990 | 100,277 | |||
Corporate and other operating expenses | [1] | 122 | 301 | 218 | 611 | |||
Interest expense | [1] | 64 | 93 | 131 | 172 | |||
Income (loss) before income taxes | [1] | 42,408 | 19,850 | 61,969 | 41,206 | |||
Equity in net income (loss) of subsidiaries | [1] | 25,788 | 5,306 | (19,865) | 15,365 | |||
Income (loss) before income taxes | [1] | 68,196 | 25,156 | 42,104 | 56,571 | |||
Income tax expense (benefit) | [1] | 5,373 | 2,689 | 7,467 | 5,643 | |||
Net income (loss) | [1] | 62,823 | 22,467 | 34,637 | 50,928 | |||
Consolidation Adjustments | ||||||||
Revenues: | ||||||||
Net earned premiums | [2] | 0 | 0 | 0 | 0 | |||
Net investment income (loss) | [2] | (266) | (289) | (543) | (576) | |||
Net realized investment gains (losses) | [2] | 0 | 0 | 0 | 0 | |||
Other income | [2] | 0 | 0 | 0 | 0 | |||
Total revenues | [2] | (266) | (289) | (543) | (576) | |||
Losses and Expenses: | ||||||||
Net losses and loss adjustment expenses | [2] | 0 | 0 | 0 | 0 | |||
Acquisition costs and other underwriting expenses | [2] | 0 | 0 | 0 | 0 | |||
Corporate and other operating expenses | [2] | 0 | 0 | 0 | 0 | |||
Interest expense | [2] | (266) | (289) | (543) | (576) | |||
Income (loss) before income taxes | [2] | 0 | 0 | 0 | 0 | |||
Equity in net income (loss) of subsidiaries | [2] | (88,611) | (27,773) | (14,772) | (66,293) | |||
Income (loss) before income taxes | [2] | (88,611) | (27,773) | (14,772) | (66,293) | |||
Income tax expense (benefit) | [2] | 0 | 0 | 0 | 0 | |||
Net income (loss) | [2] | $ (88,611) | $ (27,773) | $ (14,772) | $ (66,293) | |||
|
Schedule of Condensed Consolidating Statements of Comprehensive Income (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||||
Condensed Financial Statements, Captions [Line Items] | ||||||||
Net income (loss) | $ 37,551 | $ 14,663 | $ (7,027) | $ 34,263 | ||||
Other comprehensive income, net of tax: | ||||||||
Unrealized holding gains (losses) | 33,229 | 18,677 | 31,196 | 39,462 | ||||
Equity in other comprehensive income of unconsolidated subsidiaries | 0 | 0 | 0 | 0 | ||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) | 0 | (1) | 0 | (2) | ||||
Reclassification adjustment for (gains) losses included in net income | (9,388) | (3,740) | (11,101) | (1,818) | ||||
Unrealized foreign currency translation gain (loss) | 1,292 | (63) | (11) | 131 | ||||
Other comprehensive income, net of tax | 25,133 | 14,873 | 20,084 | 37,773 | ||||
Comprehensive income, net of tax | 62,684 | 29,536 | 13,057 | 72,036 | ||||
Global Indemnity Limited (Parent co-obligor) | Reportable Legal Entities | ||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||
Net income (loss) | 37,551 | 14,663 | (7,027) | 34,263 | ||||
Other comprehensive income, net of tax: | ||||||||
Unrealized holding gains (losses) | 1,632 | 221 | 1,632 | 880 | ||||
Equity in other comprehensive income of unconsolidated subsidiaries | 23,501 | 15,220 | 18,452 | 37,454 | ||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) | 0 | 0 | ||||||
Reclassification adjustment for (gains) losses included in net income | 0 | (568) | 0 | (561) | ||||
Unrealized foreign currency translation gain (loss) | 0 | 0 | 0 | 0 | ||||
Other comprehensive income, net of tax | 25,133 | 14,873 | 20,084 | 37,773 | ||||
Comprehensive income, net of tax | 62,684 | 29,536 | 13,057 | 72,036 | ||||
GBLI Holdings, LLC (Subsidiary co-obligor) | Reportable Legal Entities | ||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||
Net income (loss) | 25,788 | 5,306 | (19,865) | 15,365 | ||||
Other comprehensive income, net of tax: | ||||||||
Unrealized holding gains (losses) | (64) | (480) | 792 | 1,567 | ||||
Equity in other comprehensive income of unconsolidated subsidiaries | 4,402 | 9,165 | 7,047 | 19,490 | ||||
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) | 0 | 0 | ||||||
Reclassification adjustment for (gains) losses included in net income | (37) | (159) | (37) | 243 | ||||
Unrealized foreign currency translation gain (loss) | 0 | 0 | 0 | 0 | ||||
Other comprehensive income, net of tax | 4,301 | 8,526 | 7,802 | 21,300 | ||||
Comprehensive income, net of tax | 30,089 | 13,832 | (12,063) | 36,665 | ||||
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) | ||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||
Net income (loss) | [1] | 62,823 | 22,467 | 34,637 | 50,928 | |||
Other comprehensive income, net of tax: | ||||||||
Unrealized holding gains (losses) | [1] | 31,661 | 18,936 | 28,772 | 37,015 | |||
Equity in other comprehensive income of unconsolidated subsidiaries | [1] | 4,301 | 8,526 | 7,802 | 21,300 | |||
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) | [1] | (1) | (2) | |||||
Reclassification adjustment for (gains) losses included in net income | [1] | (9,351) | (3,013) | (11,064) | (1,500) | |||
Unrealized foreign currency translation gain (loss) | [1] | 1,292 | (63) | (11) | 131 | |||
Other comprehensive income, net of tax | [1] | 27,903 | 24,385 | 25,499 | 56,944 | |||
Comprehensive income, net of tax | [1] | 90,726 | 46,852 | 60,136 | 107,872 | |||
Consolidation Adjustments | ||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||
Net income (loss) | [2] | (88,611) | (27,773) | (14,772) | (66,293) | |||
Other comprehensive income, net of tax: | ||||||||
Unrealized holding gains (losses) | [2] | 0 | 0 | 0 | 0 | |||
Equity in other comprehensive income of unconsolidated subsidiaries | [2] | (32,204) | (32,911) | (33,301) | (78,244) | |||
Portion of other-than-temporary impairment losses recognized in other comprehensive income (loss) | [2] | 0 | 0 | |||||
Reclassification adjustment for (gains) losses included in net income | [2] | 0 | 0 | 0 | 0 | |||
Unrealized foreign currency translation gain (loss) | [2] | 0 | 0 | 0 | 0 | |||
Other comprehensive income, net of tax | [2] | (32,204) | (32,911) | (33,301) | (78,244) | |||
Comprehensive income, net of tax | [2] | $ (120,815) | $ (60,684) | $ (48,073) | $ (144,537) | |||
|
Schedule of Condensed Consolidating Statements of Cash Flows (Detail) - USD ($) $ in Thousands |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|||
Cash flows from operating activities: | ||||
Net cash provided by (used for) operating activities | $ 52,410 | $ (3,135) | ||
Cash flows from investing activities: | ||||
Proceeds from sale of fixed maturities | 427,111 | 569,529 | ||
Proceeds from sale of equity securities | 378,915 | 167,028 | ||
Proceeds from maturity of fixed maturities | 15,651 | 95,994 | ||
Proceeds from other invested assets | 623 | 2,349 | ||
Amounts paid in connection with derivatives | (20,060) | (8,022) | ||
Purchases of fixed maturities | (457,841) | (573,878) | ||
Purchases of equity securities | (358,085) | (284,984) | ||
Purchases of other invested assets | (297) | (3,500) | ||
Net cash used for investing activities | (13,983) | (35,484) | ||
Cash flows from financing activities: | ||||
Net borrowings (repayments) under margin borrowing facility | 958 | 3,409 | ||
Issuance of note to affiliates | 0 | |||
Dividends paid to shareholders | (7,120) | (7,125) | ||
Dividends from subsidiary | 0 | |||
Purchases of A ordinary shares | (143) | (947) | ||
Net cash used for financing activities | (6,305) | (4,663) | ||
Net change in cash and cash equivalents | 32,122 | (43,282) | ||
Cash and cash equivalents at beginning of period | 44,271 | 99,497 | ||
Cash and cash equivalents at end of period | 76,393 | 56,215 | ||
Global Indemnity Limited (Parent co-obligor) | Reportable Legal Entities | ||||
Cash flows from operating activities: | ||||
Net cash provided by (used for) operating activities | (12,069) | 1,521 | ||
Cash flows from investing activities: | ||||
Proceeds from sale of fixed maturities | 475 | 48,393 | ||
Proceeds from sale of equity securities | 69,502 | 3,600 | ||
Proceeds from maturity of fixed maturities | 0 | 0 | ||
Proceeds from other invested assets | 500 | 2,349 | ||
Amounts paid in connection with derivatives | 0 | 0 | ||
Purchases of fixed maturities | (167,316) | (10,548) | ||
Purchases of equity securities | (103,445) | (39,332) | ||
Purchases of other invested assets | 0 | 0 | ||
Net cash used for investing activities | (200,284) | 4,462 | ||
Cash flows from financing activities: | ||||
Net borrowings (repayments) under margin borrowing facility | 0 | 0 | ||
Issuance of note to affiliates | 0 | |||
Dividends paid to shareholders | (7,120) | (7,125) | ||
Dividends from subsidiary | 226,000 | |||
Purchases of A ordinary shares | (143) | (947) | ||
Net cash used for financing activities | 218,737 | (8,072) | ||
Net change in cash and cash equivalents | 6,384 | (2,089) | ||
Cash and cash equivalents at beginning of period | 977 | 2,221 | ||
Cash and cash equivalents at end of period | 7,361 | 132 | ||
GBLI Holdings, LLC (Subsidiary co-obligor) | Reportable Legal Entities | ||||
Cash flows from operating activities: | ||||
Net cash provided by (used for) operating activities | (1,380) | (14,207) | ||
Cash flows from investing activities: | ||||
Proceeds from sale of fixed maturities | 18,125 | 101,584 | ||
Proceeds from sale of equity securities | 309,413 | 163,428 | ||
Proceeds from maturity of fixed maturities | 0 | 0 | ||
Proceeds from other invested assets | 123 | 0 | ||
Amounts paid in connection with derivatives | (20,060) | (8,022) | ||
Purchases of fixed maturities | (33,362) | (22,726) | ||
Purchases of equity securities | (254,640) | (245,652) | ||
Purchases of other invested assets | (297) | (3,500) | ||
Net cash used for investing activities | 19,302 | (14,888) | ||
Cash flows from financing activities: | ||||
Net borrowings (repayments) under margin borrowing facility | 958 | 3,409 | ||
Issuance of note to affiliates | (18,500) | |||
Dividends paid to shareholders | 0 | 0 | ||
Dividends from subsidiary | 0 | |||
Purchases of A ordinary shares | 0 | 0 | ||
Net cash used for financing activities | (17,542) | 3,409 | ||
Net change in cash and cash equivalents | 380 | (25,686) | ||
Cash and cash equivalents at beginning of period | 2,663 | 26,039 | ||
Cash and cash equivalents at end of period | 3,043 | 353 | ||
Other Global Indemnity Limited Subsidiaries and Eliminations (non-co-obligor subsidiaries) | ||||
Cash flows from operating activities: | ||||
Net cash provided by (used for) operating activities | [1] | 65,859 | 9,551 | |
Cash flows from investing activities: | ||||
Proceeds from sale of fixed maturities | [1] | 408,511 | 419,552 | |
Proceeds from sale of equity securities | [1] | 0 | 0 | |
Proceeds from maturity of fixed maturities | [1] | 15,651 | 95,994 | |
Proceeds from other invested assets | [1] | 0 | 0 | |
Amounts paid in connection with derivatives | [1] | 0 | 0 | |
Purchases of fixed maturities | [1] | (257,163) | (540,604) | |
Purchases of equity securities | [1] | 0 | 0 | |
Purchases of other invested assets | [1] | 0 | 0 | |
Net cash used for investing activities | [1] | 166,999 | (25,058) | |
Cash flows from financing activities: | ||||
Net borrowings (repayments) under margin borrowing facility | [1] | 0 | 0 | |
Issuance of note to affiliates | [1] | 18,500 | ||
Dividends paid to shareholders | [1] | 0 | 0 | |
Dividends from subsidiary | [1] | (226,000) | ||
Purchases of A ordinary shares | [1] | 0 | 0 | |
Net cash used for financing activities | [1] | (207,500) | 0 | |
Net change in cash and cash equivalents | [1] | 25,358 | (15,507) | |
Cash and cash equivalents at beginning of period | [1] | 40,631 | 71,237 | |
Cash and cash equivalents at end of period | [1] | $ 65,989 | $ 55,730 | |
|
Subsequent Events - Additional Information (Detail) - 7.75% Subordinated Notes due 2045 - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jul. 31, 2020 |
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Subsequent Event [Line Items] | |||
Subordinated notes interest percentage | 7.75% | 7.75% | |
Subordinated Notes due date | 2045 | 2045 | |
Debt instrument, redemption description | In July 2020, the Company notified the Trustee of the 7.75% Subordinated Notes due 2045 (“2045 Notes”) that it has elected to redeem the entire $100 million in aggregate principal amount of the outstanding 2045 Notes plus accrued and unpaid interest on the 2045 Notes redeemed to, but not including, the Redemption Date of August 15, 2020. | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Subordinated notes interest percentage | 7.75% | ||
Subordinated Notes due date | 2045 | ||
Redemption of aggregate principal amount | $ 100 | ||
Redemption date | Aug. 15, 2020 |
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