DUBLIN, May 7, 2013 /PRNewswire/ -- Global Indemnity plc (NASDAQ:GBLI) today reported net income for the three months ended March 31, 2013 of $12.4 million or $0.49 per share. As of March 31st, book value per share was $32.91, an increase of 2.4% compared to book value per share of $32.15 at December 31, 2012.
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Selected Operating and Balance Sheet Data (Dollars in millions, except per share data)
For the Three Months |
As of |
As of |
|||||||
2013 |
2012 |
2013 |
2012 |
||||||
Gross premiums written |
$ 74.9 |
$ 57.8 |
Book value per share |
$ 32.91 |
$ 32.15 |
||||
Net premiums written |
$ 71.5 |
$ 50.3 |
Shareholders' equity |
$ 827.6 |
$ 806.6 |
||||
Cash and invested assets |
$ 1,539.4 |
$ 1,534.0 |
|||||||
Net income |
$ 12.4 |
$ 10.9 |
|||||||
Net income per share |
$ 0.49 |
$ 0.38 |
|||||||
Operating income |
$ 8.5 |
$ 9.1 |
|||||||
Operating income per share |
$ 0.34 |
$ 0.32 |
|||||||
Cynthia Y. Valko, Chief Executive Officer, stated, "I am pleased with our 1st quarter results. We experienced growth in both our Insurance and Reinsurance segments. We continued to see rate increases on renewal business in the U.S. and Wind River signed several new property treaties. Our loss ratio improved due to actions that were taken to exit unprofitable business in late 2011. Although yields are down, our portfolio had an annualized return of 7.5% largely driven by the performance of our common stock portfolio."
About Global Indemnity plc and its subsidiaries
Global Indemnity plc (NASDAQ:GBLI), through its several direct and indirect wholly owned subsidiary insurance and reinsurance companies, provides both admitted and non-admitted specialty property and casualty insurance coverages in the United States, as well as reinsurance throughout the world. Global Indemnity plc's two primary divisions are:
- United States Based Insurance Operations
- Bermuda Based Reinsurance Operations
For more information, visit the Global Indemnity plc website at http://www.globalindemnity.ie.
Forward-Looking Information
Forward-looking statements contained in this press release are made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. Investors should take caution that actual results may be materially different from the estimates expressed in, or implied, or projected by, the forward looking statements. Please see the Company's periodic reports filed with the Securities and Exchange Commission for a discussion of the risks and uncertainties which may affect it and for a more detailed discussion of the cautionary note regarding forward-looking statements.
Global Indemnity plc's Combined Ratio for the Three Months Ended March 31, 2013 and 2012
The combined ratio is a key measure of insurance profitability. The components comprising the combined ratio are as follows:
Three Months Ended |
||||
2013 |
2012 |
|||
Loss Ratio: |
||||
Current Accident Year |
||||
Excluding Catastrophes |
53.1 |
63.0 |
||
Catastrophes |
8.4 |
4.5 |
||
Current Accident Year |
61.5 |
67.5 |
||
Changes to Prior Accident Year |
(4.7) |
(2.3) |
||
Loss Ratio – Calendar Year |
56.8 |
65.2 |
||
Expense Ratio |
43.7 |
35.9 |
||
Combined Ratio |
100.5 |
101.1 |
||
For the three months ended March 31st, the calendar year loss ratio decreased by 8.4 points to 56.8 points in 2013 from 65.2 points in 2012.
- Excluding catastrophes, the current accident year loss ratio decreased by 9.9 points to 53.1 points in 2013 from 63.0 points in 2012.
- Excluding catastrophes, the property loss ratio decreased from 48.9 points in the first quarter of 2012 to 43.0 points in the first quarter of 2013. Including catastrophes, the property loss ratio decreased by 2.1 points to 55.9 points in 2013 from 58.0 points in 2012.
- The casualty loss ratio decreased 4.4 points to 72.0 points in 2013 from 76.4 points in 2012.
- Current year results include a 4.7 point reduction in the loss ratio related to prior accident years. This decrease was primarily driven by better than expected emergence in the Insurance Operations' property lines for accident years 2008 through 2012.
For the three months ended March 31st, the expense ratio increased from 35.9 points in 2012 to 43.7 points in 2013.
- The expense ratio increased primarily due to a decrease in earned premium volume and an increase in contingent commissions as a result of profitable treaties written in the Reinsurance Operations, as well as a premium deficiency charge recorded in 2011 which resulted in the 2012 expense ratio being lower than it otherwise would have been. Excluding the impact of the premium deficiency charges, the three month ended March 31, 2012 expense ratio was 39.4%.
Global Indemnity plc's Three Months Ended March 31, 2013 and 2012 Gross and Net Premiums Written Results by Segment
(Dollars in thousands) |
Three Months Ended March 31, |
||||||||
Gross Premiums Written |
Net Premiums Written |
||||||||
2013 |
2012 |
2013 |
2012 |
||||||
Insurance Operations |
$ 51,088 |
$ 47,834 |
$ 47,628 |
$ 40,906 |
|||||
Reinsurance Operations |
23,851 |
9,924 |
23,850 |
9,375 |
|||||
Total |
$ 74,939 |
$ 57,758 |
$ 71,478 |
$ 50,281 |
|||||
Insurance Operations: For the three months ended March 31, 2013, gross premiums written increased 6.8%, and net premiums written increased 16.4%, compared to the same period in 2012. This was primarily driven by an increase in the Company's small business classes, as well as a reduction in ceded premiums written as a result of the Company retaining more of its direct business.
Reinsurance Operations: For the three months ended March 31, 2013, gross premiums written increased 140.3%, and net premiums written increased 154.4% compared to the same period in 2012. This increase is primarily due to several new treaties written during 2013.
GLOBAL INDEMNITY PLC |
||||
For the Three Months |
||||
2013 |
2012 |
|||
Gross premiums written |
$ 74,939 |
$ 57,758 |
||
Net premiums written |
$ 71,478 |
$ 50,281 |
||
Net premiums earned |
$ 55,996 |
$ 64,470 |
||
Net investment income |
10,034 |
11,417 |
||
Net realized investment gains |
5,757 |
1,761 |
||
Other income (loss) |
54 |
(352) |
||
Total revenues |
71,841 |
77,296 |
||
Net losses and loss adjustment expenses |
31,788 |
42,009 |
||
Acquisition costs and other underwriting expenses |
24,477 |
23,167 |
||
Corporate and other operating expenses |
2,345 |
2,488 |
||
Interest expense |
1,173 |
1,478 |
||
Income before income taxes |
12,058 |
8,154 |
||
Income tax benefit |
(307) |
(2,708) |
||
Net income |
$ 12,365 |
$ 10,862 |
||
Weighted average shares outstanding–basic |
25,055 |
28,617 |
||
Weighted average shares outstanding–diluted |
25,099 |
28,639 |
||
Net income per share – basic |
$ 0.49 |
$ 0.38 |
||
Net income per share – diluted |
$ 0.49 |
$ 0.38 |
||
Combined ratio analysis: (1) |
||||
Loss ratio |
56.8 |
65.2 |
||
Expense ratio (2) |
43.7 |
35.9 |
||
Combined ratio |
100.5 |
101.1 |
||
(1) The loss ratio, expense ratio and combined ratio are non-GAAP financial measures that are generally viewed in the insurance industry as indicators of underwriting profitability. The loss ratio is the ratio of net losses and loss adjustment expenses to net premiums earned. The expense ratio is the ratio of acquisition costs and other underwriting expenses to net premiums earned. The combined ratio is the sum of the loss and expense ratios.
(2) Excluding the impact of premium deficiencies, the expense ratio was 39.4% for the quarter ended March 31, 2012.
GLOBAL INDEMNITY PLC |
|||||
ASSETS |
(Unaudited) |
December 31, 2012 |
|||
Fixed Maturities: |
|||||
Available for sale securities, at fair value |
$ 1,250,110 |
$ 1,229,322 |
|||
Equity securities: |
|||||
Available for sale, at fair value |
216,863 |
197,075 |
|||
Other invested assets: |
|||||
Available for sale securities, at fair value |
3,105 |
3,132 |
|||
Total investments |
1,470,078 |
1,429,529 |
|||
Cash and cash equivalents |
69,321 |
104,460 |
|||
Premiums receivable, net |
56,732 |
45,162 |
|||
Reinsurance receivables, net |
239,684 |
241,827 |
|||
Deferred federal income taxes |
5,770 |
10,824 |
|||
Deferred acquisition costs |
22,261 |
18,265 |
|||
Intangible assets |
18,255 |
18,343 |
|||
Goodwill |
4,820 |
4,820 |
|||
Prepaid reinsurance premiums |
4,726 |
5,945 |
|||
Federal income taxes receivable |
7,493 |
6,844 |
|||
Other assets |
18,541 |
17,684 |
|||
Total assets |
$ 1,917,681 |
$ 1,903,703 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Liabilities: |
|||||
Unpaid losses and loss adjustment expenses |
$ 864,167 |
$ 879,114 |
|||
Unearned premiums |
108,378 |
94,114 |
|||
Ceded balances payable |
2,843 |
4,201 |
|||
Contingent commissions |
8,174 |
9,911 |
|||
Payable for securities purchased |
1,269 |
2,634 |
|||
Notes and debentures payable |
84,929 |
84,929 |
|||
Other liabilities |
20,273 |
22,182 |
|||
Total liabilities |
1,090,033 |
1,097,085 |
|||
Shareholders' equity: |
|||||
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares |
3 |
3 |
|||
Additional paid-in capital |
513,548 |
512,304 |
|||
Accumulated other comprehensive income, net of taxes |
60,799 |
53,350 |
|||
Retained earnings |
354,536 |
342,171 |
|||
A ordinary shares in treasury, at cost: 3,058,254 and 3,057,001 shares, respectively |
(101,238) |
(101,210) |
|||
Total shareholders' equity |
827,648 |
806,618 |
|||
Total liabilities and shareholders' equity |
$ 1,917,681 |
$ 1,903,703 |
|||
GLOBAL INDEMNITY PLC |
||||
Market Value as of |
||||
(Unaudited) |
|
|||
Fixed Maturities |
$ 1,250.1 |
$ 1,229.3 |
||
Cash and cash equivalents |
69.3 |
104.5 |
||
Total bonds and cash and cash equivalents |
1,319.4 |
1,333.8 |
||
Equities and other invested assets |
220.0 |
200.2 |
||
Total cash and invested assets, gross |
1,539.4 |
1,534.0 |
||
Receivable / (payable) for securities |
(1.3) |
(2.6) |
||
Total cash and invested assets, net |
$ 1,538.1 |
$ 1,531.4 |
||
(Unaudited) |
||
Net investment income |
$ 10.0 |
|
Net realized investment gains |
5.8 |
|
Net unrealized investment gains |
12.8 |
|
Net realized and unrealized investment returns |
18.6 |
|
Total investment return |
$ 28.6 |
|
Average total cash and invested assets (b) |
$ 1,534.7 |
|
Total investment return % annualized |
7.5% |
|
(a) Amounts in this table are shown on a pre-tax basis.
(b) Simple average of beginning and end of period, net of receivable/payable for securities.
GLOBAL INDEMNITY PLC |
||||
For the Three Months |
||||
2013 |
2012 |
|||
Operating income |
$ 8,537 |
$ 9,081 |
||
Adjustments: |
||||
Net realized investment gains, net of tax |
3,828 |
1,781 |
||
Total after-tax adjustments |
3,828 |
1,781 |
||
Net income |
$ 12,365 |
$ 10,862 |
||
Weighted average shares outstanding – basic |
25,055 |
28,617 |
||
Weighted average shares outstanding – diluted |
25,099 |
28,639 |
||
Operating income per share – basic |
$ 0.34 |
$ 0.32 |
||
Operating income per share – diluted |
$ 0.34 |
$ 0.32 |
||
Note Regarding Operating Income
Operating income, a non-GAAP financial measure, is equal to net income excluding after-tax net realized investment gains (losses). Operating income is not a substitute for net income determined in accordance with GAAP, and investors should not place undue reliance on this measure.
Contact: Media
Linda Hohn
Associate General Counsel
+1-610-660-6862
lhohn@global-indemnity.com
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