DUBLIN, Nov. 5, 2013 /PRNewswire/ -- Global Indemnity plc (NASDAQ:GBLI) today reported net income for the nine months ended September 30, 2013 of $28.0 million or $1.11 per share. As of September 30th, book value per share was $33.30, an increase of 3.6% 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 Nine Months |
As of |
As of |
||||||||
2013 |
2012 |
2013 |
2012 |
|||||||
Gross Premiums Written |
$ 228.0 |
$ 182.3 |
Book value per share |
$ 33.30 |
$ 32.15 |
|||||
Net Premiums Written |
$ 213.9 |
$ 162.9 |
Shareholders' equity |
$ 838.9 |
$ 806.6 |
|||||
Cash and invested assets |
$ 1,548.9 |
$ 1,534.0 |
||||||||
Net income |
$ 28.0 |
$ 30.4 |
||||||||
Net income per share |
$ 1.11 |
$ 1.11 |
||||||||
Operating income |
$ 21.3 |
$ 24.9 |
||||||||
Operating income per share |
$ 0.85 |
$ 0.91 |
||||||||
During the nine months ended September 30, 2013, the Company incurred a prepayment charge related to the retirement of debt, and a premium deficiency charge. During the nine months ended September 30, 2012, the Company received the benefit of a limited partnership distribution and net losses and loss adjustment expenses and acquisition costs and other underwriting expenses were also lower than they otherwise would have been as a result of premium deficiency charges recorded in 2011. Excluding these non-routine events, results would have been as follows;
Net Income |
Operating Income |
||||||||
For the Nine Months |
For the Nine Months |
||||||||
(Dollars in millions, except per share data) |
2013 |
2012 |
2013 |
2012 |
|||||
Net/Operating income |
$ 28.0 |
$ 30.4 |
$ 21.3 |
$ 24.9 |
|||||
Prepayment charge |
2.9 |
- |
2.9 |
- |
|||||
Limited partnership distribution |
- |
(4.3) |
- |
(4.3) |
|||||
Impact of 2011 premium deficiency |
- |
(8.0) |
- |
(8.0) |
|||||
Impact of 2013 premium deficiency |
1.2 |
- |
1.2 |
- |
|||||
Tax effect assuming applicable statutory rates |
(1.2) |
0.8 |
(1.2) |
0.8 |
|||||
Adjusted net/operating income |
$ 30.9 |
$ 18.9 |
$ 24.2 |
$ 13.4 |
|||||
Adjusted per share amounts |
$ 1.23 |
$ 0.69 |
$ 0.96 |
$ 0.49 |
|||||
See the notes following the "Summary of Operating Income" table for information regarding the presentation of income excluding non-routine events
Cynthia Y. Valko, Chief Executive Officer, commented: "Global's insurance and reinsurance premium volume grew by a combined 25% during the first three quarters of 2013 (as compared to 2012). Moreover, the company significantly enhanced operating profitability during the first nine months of 2013 recording a combined ratio[1] of 99% (vs. 108% during the 2012 comparable period) as a result of better underwriting, better pricing, and better weather (absence of a major North American hurricane)."
[1] See the notes on the bottom of the "Consolidated Statements of Operations" table regarding the Combined Ratio
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 worldwide. Global Indemnity plc's two primary segments 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. We caution investors that our actual results may be materially different from the estimates expressed in, or implied, or projected by, the forward looking statements. Please see our periodic reports filed with the Securities and Exchange Commission for a discussion of the risks and uncertainties which may affect us and for a more detailed discussion of our cautionary note regarding forward-looking statements.
Global Indemnity plc's Combined Ratio for the Nine Months Ended September 30, 2013 and 2012
The combined ratio is a key measure of insurance profitability. The components comprising the combined ratio are as follows:
Nine Months Ended |
|||||
2013 |
2012 |
||||
Loss Ratio: |
|||||
Current Accident Year |
|||||
Excluding Catastrophes |
49.1 |
57.9 |
|||
Catastrophes |
10.7 |
7.6 |
|||
Current Accident Year |
59.8 |
65.5 |
|||
Changes to Prior Accident Year |
(2.8) |
(1.6) |
|||
Loss Ratio – Calendar Year |
57.0 |
63.9 |
|||
Expense Ratio |
43.0 |
39.5 |
|||
Combined Ratio |
100.0 |
103.4 |
|||
For the nine months ended September 30th, the calendar year loss ratio decreased by 6.9 points to 57.0 in 2013 from 63.9 in 2012.
Excluding the impact of the 2011 premium deficiency charges, the loss ratio for the nine months ended September 30, 2013 and 2012 was 57.0% and 66.2%.
- Excluding catastrophes, the current accident year loss ratio decreased by 8.8 points to 49.1 in 2013 from 57.9 in 2012.
- Excluding catastrophes, the property loss ratio decreased 8.0 points to 33.9 in 2013 from 41.9 in 2012. Including catastrophes, the property loss ratio decreased 5.7 points to 50.4 in 2013 from 56.1 in 2012.
- Excluding the impact of 2011 premium deficiency charges, the casualty loss ratio decreased 3.6 points from 81.1 to 77.5 in 2013.
- Current year results include a 2.8 point reduction in the loss ratio related to prior accident years. This decrease was primarily driven by better than expected development from accident year 2012 catastrophes as well as lower than expected non-catastrophe severity in property lines.
For the nine months ended September 30th, the expense ratio increased from 39.5 in 2012 to 43.0 in 2013.
- Excluding the impact of premium deficiency charges, the expense ratio for the nine months ended September 30, 2013 and 2012 was 42.3 and 41.7, respectively.
Global Indemnity plc's Gross and Net Premiums Written Results by Segment
(Dollars in thousands) |
Three Months Ended September 30, |
|||||||
Gross Premiums Written |
Net Premiums Written |
|||||||
2013 |
2012 |
2013 |
2012 |
|||||
Insurance Operations |
$ 59,747 |
$ 51,205 |
$ 54,995 |
$ 45,710 |
||||
Reinsurance Operations |
9,038 |
5,744 |
9,035 |
5,745 |
||||
Total |
$ 68,785 |
$ 56,949 |
$ 64,030 |
$ 51,455 |
||||
Nine Months Ended September 30, |
||||||||
Gross Premiums Written |
Net Premiums Written |
|||||||
2013 |
2012 |
2013 |
2012 |
|||||
Insurance Operations |
$ 172,714 |
$ 151,410 |
$ 159,010 |
$ 132,490 |
||||
Reinsurance Operations |
55,255 |
30,929 |
54,844 |
30,381 |
||||
Total |
$ 227,969 |
$ 182,339 |
$ 213,854 |
$ 162,871 |
||||
Insurance Operations: For the three and nine months ended September 30, 2013, gross premiums written increased 16.7% and 14.1%, respectively, and net premiums written increased 20.3% and 20.0%, respectively, compared to the same periods in 2012. These were primarily driven by an increase in the Company's small business binding authority lines. Written premium increases were also realized in property brokerage, programs, and other lines. Net written premiums also increased as a result of an increase in retention in property excess of loss and property catastrophe.
Reinsurance Operations: For the three and nine months ended September 30, 2013, gross premiums written increased 57.3% and 78.7%, respectively, and net premiums written increased 57.3% and 80.5%, respectively, compared to the same periods in 2012. These increases were primarily due to several new treaties written during 2013.
Note: Tables Follow
Global Indemnity plc |
||||||||
Consolidated Statements of Operations |
||||||||
(Unaudited) |
||||||||
(Dollars and shares in thousands, except per share data) |
||||||||
For the Three Months |
For the Nine Months |
|||||||
2013 |
2012 |
2013 |
2012 |
|||||
Gross premiums written |
$ 68,785 |
$ 56,949 |
$ 227,969 |
$ 182,339 |
||||
Net premiums written |
$ 64,030 |
$ 51,455 |
$ 213,854 |
$ 162,871 |
||||
Net premiums earned |
$ 64,469 |
$ 55,329 |
$ 179,136 |
$ 177,658 |
||||
Net investment income |
8,486 |
14,777 |
28,285 |
37,265 |
||||
Net realized investment gains |
1,641 |
3,211 |
10,204 |
6,913 |
||||
Other income (loss) |
183 |
101 |
484 |
(291) |
||||
Total revenues |
74,779 |
73,418 |
218,109 |
221,545 |
||||
Net losses and loss adjustment expenses |
35,483 |
35,407 |
102,195 |
113,574 |
||||
Acquisition costs and other underwriting expenses |
28,028 |
23,223 |
76,977 |
70,150 |
||||
Corporate and other operating expenses |
2,627 |
2,039 |
7,444 |
6,863 |
||||
Interest expense |
3,585 |
1,265 |
5,939 |
4,213 |
||||
Income before income taxes |
5,056 |
11,484 |
25,554 |
26,745 |
||||
Income tax expense (benefit) |
(1,892) |
1,571 |
(2,423) |
(3,634) |
||||
Net income |
$ 6,948 |
$ 9,913 |
$ 27,977 |
$ 30,379 |
||||
Weighted average shares outstanding–basic |
25,082 |
25,392 |
25,066 |
27,263 |
||||
Weighted average shares outstanding–diluted |
25,189 |
25,413 |
25,151 |
27,281 |
||||
Net income per share – basic |
$ 0.28 |
$ 0.39 |
$ 1.12 |
$ 1.11 |
||||
Net income per share – diluted |
$ 0.28 |
$ 0.39 |
$ 1.11 |
$ 1.11 |
||||
Combined ratio analysis: (1) |
||||||||
Loss ratio (2) |
55.1 |
64.0 |
57.0 |
63.9 |
||||
Expense ratio (3) |
43.5 |
42.0 |
43.0 |
39.5 |
||||
Combined ratio (4) |
98.6 |
106.0 |
100.0 |
103.4 |
||||
(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 the 2011 premium deficiency charges, the loss ratio was 64.2% and 66.2% for the three months and nine months ended September 30, 2012, respectively.
(3) Excluding the impact of the 2011 and 2013 premium deficiency charges, the expense ratio was 41.0% and 42.7% for the three months ended September 30, 2013 and 2012, respectively. Excluding the impact of 2011 and 2013 premium deficiency charges, the expense ratio was 42.3% and 41.7% for the nine months ended September 30, 2013 and 2012, respectively.
(4) Excluding the impact of the 2011 and 2013 premium deficiency charges, the combined ratio was 96.1% and 107.0% for the three months ended September 30, 2013 and 2012, respectively. Excluding the impact of the 2011 and 2013 premium deficiency charges, the combined ratio was 99.4% and 107.9% for the nine months ended September 30, 2013 and 2012, respectively.
GLOBAL INDEMNITY PLC |
|||||||
CONSOLIDATED BALANCE SHEETS |
|||||||
(Dollars in thousands) |
|||||||
|
(Unaudited) |
|
|||||
Fixed Maturities: |
|||||||
Available for sale securities, at fair value |
|
|
|||||
Equity securities: |
|||||||
Available for sale, at fair value |
233,415 |
197,075 |
|||||
Other invested assets: |
|||||||
Available for sale securities, at fair value |
3,269 |
3,132 |
|||||
Total investments |
1,432,959 |
1,429,529 |
|||||
Cash and cash equivalents |
115,953 |
104,460 |
|||||
Premiums receivable, net |
40,132 |
37,752 |
|||||
Reinsurance receivables, net |
221,751 |
241,827 |
|||||
Funds held by ceding reinsurers |
30,825 |
7,410 |
|||||
Deferred federal income taxes |
6,338 |
10,824 |
|||||
Deferred acquisition costs |
24,178 |
18,265 |
|||||
Intangible assets |
18,078 |
18,343 |
|||||
Goodwill |
4,820 |
4,820 |
|||||
Prepaid reinsurance premiums |
5,227 |
5,945 |
|||||
Federal income taxes receivable |
3,830 |
6,844 |
|||||
Other assets |
14,339 |
17,684 |
|||||
Total assets |
$ 1,918,430 |
$ 1,903,703 |
|||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||
Liabilities: |
|||||||
Unpaid losses and loss adjustment expenses |
$ 823,063 |
$ 879,114 |
|||||
Unearned premiums |
128,113 |
94,114 |
|||||
Ceded balances payable |
5,093 |
4,201 |
|||||
Contingent commissions |
9,652 |
9,911 |
|||||
Payable for securities purchased |
4,882 |
2,634 |
|||||
Margin borrowing facility |
65,009 |
- |
|||||
Notes and debentures payable |
20,619 |
84,929 |
|||||
Other liabilities |
23,096 |
22,182 |
|||||
Total liabilities |
1,079,527 |
1,097,085 |
|||||
Shareholders' equity: |
|||||||
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 16,190,894 and 16,087,939 respectively; A ordinary shares outstanding: 13,132,133 and 13,030,938, respectively; B ordinary shares issued and outstanding: 12,061,370 and 12,061,370, respectively |
|
|
|||||
Additional paid-in capital |
515,545 |
512,304 |
|||||
Accumulated other comprehensive income, net of taxes |
54,456 |
53,350 |
|||||
Retained earnings |
370,148 |
342,171 |
|||||
A ordinary shares in treasury, at cost: 3,058,761 and 3,057,001 shares, respectively |
|
|
|||||
Total shareholders' equity |
838,903 |
806,618 |
|||||
Total liabilities and shareholders' equity |
$ 1,918,430 |
$ 1,903,703 |
|||||
GLOBAL INDEMNITY PLC |
||||
SELECTED INVESTMENT DATA |
||||
(Dollars in millions) |
||||
Market Value as of |
||||
(Unaudited) |
|
|||
Fixed Maturities |
$ 1,196.3 |
$ 1,229.3 |
||
Cash and cash equivalents |
116.0 |
104.5 |
||
Total bonds and cash and cash equivalents |
1,312.3 |
1,333.8 |
||
Equities and other invested assets |
236.7 |
200.2 |
||
Total cash and invested assets, gross |
1,549.0 |
1,534.0 |
||
Receivable / (payable) for securities |
(4.9) |
(2.6) |
||
Total cash and invested assets, net |
$ 1,544.1 |
$ 1,531.4 |
||
(Unaudited) |
(Unaudited) |
|||
Net investment income |
$ 8.5 |
$ 28.3 |
||
Net realized investment gains |
1.6 |
10.2 |
||
Net unrealized investment gain |
10.5 |
7.3 |
||
Net realized and unrealized investment returns |
12.1 |
17.5 |
||
Total investment return |
$ 20.6 |
$ 45.8 |
||
Average total cash and invested assets (b) |
$ 1,535.6 |
$ 1,537.7 |
||
Total investment return % annualized |
5.4% |
4.0% |
||
(a) Amounts in this table are shown on a pre-tax basis.
(b) Simple average of beginning and end of period, net of payable/receivable for securities.
GLOBAL INDEMNITY PLC |
||||||||
SUMMARY OF OPERATING INCOME |
||||||||
(Unaudited) |
||||||||
(Dollars and shares in thousands, except per share data) |
||||||||
For the Three Months |
For the Nine Months |
|||||||
2013 |
2012 |
2013 |
2012 |
|||||
Operating income (1) |
$ 5,944 |
$ 7,621 |
$ 21,321 |
$ 24,856 |
||||
Adjustments: |
||||||||
Net realized investment gains, net of tax |
1,004 |
2,292 |
6,656 |
5,523 |
||||
Total after-tax adjustments |
1,004 |
2,292 |
6,656 |
5,523 |
||||
Net income |
$ 6,948 |
$ 9,913 |
$ 27,977 |
$ 30,379 |
||||
Weighted average shares outstanding – basic |
25,082 |
25,392 |
25,065 |
27,263 |
||||
Weighted average shares outstanding – diluted |
25,189 |
25,413 |
25,151 |
27,281 |
||||
Operating income per share – basic |
$ 0.24 |
$ 0.30 |
$ 0.85 |
$ 0.91 |
||||
Operating income per share – diluted |
$ 0.24 |
$ 0.30 |
$ 0.85 |
$ 0.91 |
||||
(1) Please see page 1 of this release for a discussion of events impacting operating income.
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.
Note Regarding Presentation of Income Excluding Non-Routine Events
The presentation of income excluding non-routine events, including adjusted net income, adjusted operating income and adjusted per share amounts metrics, is a non-GAAP financial measure. These metrics were presented to show comparable results between periods without the impact of non-routine events. It 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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