DUBLIN, Ireland, Aug. 04, 2016 (GLOBE NEWSWIRE) -- Global Indemnity plc (NASDAQ: GBLI ) today reported net income for the six months ended June 30, 2016 of $2.0 million or $0.11 per share and operating income of $9.1 million or $0.52 per share. As of June 30 th , book value per share was $43.91, an increase of 2.2% compared to book value per share of $42.98 at December 31, 2015.
Selected Operating and Balance Sheet Data (Dollars in millions, except per share data)
| For the Six Months Ended June 30, | As of June 30, | As of December 31, | |||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
| Gross Premiums Written | $ | 295.7 | $ | 309.4 | Book value per share | $ | 43.91 | $ | 42.98 | ||||||||||
| Net Premiums Written | $ | 242.2 | $ | 272.1 | Shareholders’ equity | $ | 770.7 | $ | 749.9 | ||||||||||
| Cash and invested assets(2) | $ | 1,533.0 | $ | 1,516.3 | |||||||||||||||
| Net income | $ | 2.0 | $ | 17.9 | |||||||||||||||
| Net income per share | $ | 0.11 | $ | 0.70 | (2) Including receivable/(payable) for securities sold/(purchased) | ||||||||||||||
| Operating income | $ | 9.1 | $ | 15.7 | |||||||||||||||
| Operating income per share | $ | 0.52 | $ | 0.61 | |||||||||||||||
| Combined ratio analysis: | |||||||||||||||||||
| Loss ratio | 59.7 | 58.2 | |||||||||||||||||
| Expense ratio (1) | 42.0 | 38.7 | |||||||||||||||||
| Combined ratio | 101.7 | 96.9 | |||||||||||||||||
| (1) The expense ratio in 2016 was approximately 1.5 points higher in 2016 primarily due to purchasing additional catastrophe reinsurance, while the 2015 ratio benefitted approximately 1.7 points from a purchase accounting adjustment. Excluding these factors, the expense ratio was consistent year-over-year. | |||||||||||||||||||
About Global Indemnity plc and its subsidiaries
Global Indemnity plc (NASDAQ: GBLI ), through its several direct and indirect wholly owned subsidiary insurance and reinsurance companies, provides both admitted and non-admitted specialty property and casualty insurance coverages and individual policyholder coverages in the United States, as well as reinsurance worldwide. Global Indemnity plc’s three primary segments are:
- United States Based Commercial Lines Operations
- United States Based Personal Lines Operations
- Bermuda Based Reinsurance Operations
For more information, visit the Global Indemnity plc website at http://www.globalindemnity.ie .
Forward-Looking Information The forward-looking statements contained in this press release 1 do not address a number of risks and uncertainties. Investors are cautioned that Global Indemnity’s actual results may be materially different from the estimates expressed in, or implied, or projected by, the forward looking statements. Factors that could cause actual results to differ materially from those contemplated in the forward-looking statements include, but are not limited to, the risk that there may be difficulties in the continued integration of American Reliable business, which could result in a failure to realize the potential benefits of the acquisition, and the risk that American Reliable’ s or Global Indemnity’s prospective insurance premiums, investment yield, or net earnings are less than anticipated (including as a result of unexpected events, competition, costs, charges or outlays whether as a consequence of the transaction or otherwise). The foregoing review of factors that could cause actual financial or operating performance to differ materially from expectations is not exhaustive. Please see Global Indemnity’s filings with the Securities and Exchange Commission for a discussion of additional risks and uncertainties which could impact the company and for a more detailed explication regarding forward-looking statements.
1 Disseminated pursuant to the "safe harbor" provisions of Section 21E of the Security Exchange Act of 1934.
Global Indemnity plc’s Combined Ratio for the Six Months Ended June 30, 2016
The combined ratio is a key measure of insurance profitability. The components comprising the combined ratio, by reportable business segment, for the six months ended June 30, 2016 are as follows:
| Commercial Lines | Personal Lines | Reinsurance Operations | ||||
| Loss Ratio | 57.3 | 65.0 | 39.4 | |||
| Expense Ratio | 41.2 | 43.4 | 37.7 | |||
| Combined Ratio | 98.5 | 108.4 | 77.1 | |||
Loss Ratio:
Commercial Lines Operations:
The calendar year loss ratio for the Company’s Commercial Lines was 57.3% for 2016 compared with 59.4% for 2015, an improvement of 2.1 points. The improvement was primarily due to lower than expected claims severity experienced across multiple prior accident years, primarily in liability lines. The current accident year loss ratio increased 5.2 points from 65.0% in 2015 to 70.2% in 2016 primarily due to catastrophes.
Personal Lines Operations:
The 2016 loss ratio was 65.0%, compared to 62.7% for the comparable period of 2015, primarily due to an increase in catastrophe losses. There were no adjustments to prior accident years for 2016 or 2015.
Reinsurance Operations:
The loss ratio for the Company’s Reinsurance Operations was 39.4% for 2016 compared with 31.8% for 2015. The current accident year loss ratio increased 11.2 points from 43.3% for the six months ended June 30, 2015 to 54.5% for the six months ended June 30, 2016, primarily due to catastrophic events in the second quarter of 2016. The improvement in the loss ratio related to prior years was driven by less than anticipated case incurred emergence on property catastrophe treaties.
Expense ratio:
For the six months ended June 30, the total expense ratio increased from 38.7% in 2015 to 42.0% in 2016. 1.7% of the increase is due to acquisition accounting adjustments related to the purchase of American Reliable Insurance Company in 2015. The remainder of the increase in the 2016 expense ratio was primarily due to a reduction in earned premium as a result of the Company reducing catastrophe exposure and purchasing additional reinsurance.
Global Indemnity plc’s Gross and Net Premiums Written Results by Segment
| Six Months Ended June 30, | ||||||||||||||||
| Gross Premiums Written | Net Premiums Written | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Commercial Lines Operations | $ | 107,121 | $ | 108,826 | $ | 96,010 | $ | 100,322 | ||||||||
| Personal Lines Operations | 163,421 | 162,215 | 121,043 | 133,483 | ||||||||||||
| Reinsurance Operations | 25,143 | 38,343 | 25,129 | 38,304 | ||||||||||||
| Total | $ | 295,685 | $ | 309,384 | $ | 242,182 | $ | 272,109 | ||||||||
Gross premiums written and net premiums written decreased 4.4% and 11.0%, respectively, compared to the same period in 2015.
Commercial Lines Operations: For the six months ended June 30, 2016, gross premiums written and net premiums written decreased 1.6% and 4.3%, respectively, compared to the same period in 2015. The reduction in net premiums written was primarily due to purchasing additional reinsurance to reduce catastrophe exposure.
Personal Lines Operations: For the six months ended June 30, 2016, gross premiums written increased 0.7% and net premiums written decreased 9.3% compared to the same period in 2015. The reduction in net premiums written is due to purchasing additional reinsurance to reduce catastrophe exposure.
Reinsurance Operations: For the six months ended June 30, 2016, gross premiums written and net premiums written both decreased 34.4% compared to the same period in 2015. This decrease is mainly due to a treaty being non-renewed in 2016 in an effort to reduce catastrophe exposure. In addition, the property catastrophe reinsurance marketplace continues to be very competitive due to excess capital.
Note: Tables Follow
| Global Indemnity plc | |||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (Dollars and shares in thousands, except per share data) | |||||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Gross premiums written | $ | 154,319 | $ | 166,515 | $ | 295,685 | $ | 309,384 | |||||||
| Net premiums written | $ | 125,310 | $ | 146,005 | $ | 242,182 | $ | 272,109 | |||||||
| Net premiums earned | $ | 117,804 | $ | 128,877 | $ | 239,440 | $ | 256,214 | |||||||
| Net investment income | 6,562 | 9,141 | 16,308 | 17,382 | |||||||||||
| Net realized investment gains (losses) | (3,492 | ) | 6,532 | (10,985 | ) | 3,562 | |||||||||
| Other income | 795 | 577 | 1,751 | 1,129 | |||||||||||
| Total revenues | 121,669 | 145,127 | 246,514 | 278,287 | |||||||||||
| Net losses and loss adjustment expenses | 78,111 | 79,560 | 142,895 | 149,179 | |||||||||||
| Acquisition costs and other underwriting expenses | 48,542 | 50,926 | 100,632 | 99,184 | |||||||||||
| Corporate and other operating expenses | 4,255 | 4,334 | 8,058 | 15,874 | |||||||||||
| Interest expense | 2,229 | 535 | 4,444 | 1,040 | |||||||||||
| Income (loss) before income taxes | (11,468 | ) | 9,772 | (9,515 | ) | 13,010 | |||||||||
| Income tax benefit | (6,303 | ) | (1,345 | ) | (11,475 | ) | (4,901 | ) | |||||||
| Net income (loss) | $ | (5,165 | ) | $ | 11,117 | $ | 1,960 | $ | 17,911 | ||||||
| Weighted average shares outstanding–basic | 17,244 | 25,455 | 17,234 | 25,447 | |||||||||||
| Weighted average shares outstanding–diluted (1) | 17,244 | 25,681 | 17,485 | 25,660 | |||||||||||
| Net income (loss) per share – basic | $ | (0.30 | ) | $ | 0.44 | $ | 0.11 | $ | 0.70 | ||||||
| Net income (loss) per share – diluted | $ | (0.30 | ) | $ | 0.43 | $ | 0.11 | $ | 0.70 | ||||||
| Combined ratio analysis (2): | |||||||||||||||
| Loss ratio | 66.3 | 61.7 | 59.7 | 58.2 | |||||||||||
| Expense ratio | 41.2 | 39.5 | 42.0 | 38.7 | |||||||||||
| Combined ratio | 107.5 | 101.2 | 101.7 | 96.9 | |||||||||||
| (1 | ) | For the quarter ended June 30, 2016, diluted loss per share is the same as basic loss per share since there was a net loss for the period. | |
| (2 | ) | The loss ratio, expense ratio and combined ratio are GAAP financial measures that are generally viewed in the insurance industry as indicators of underwriting profitability. The loss ratio is the ratio of net losses and loss adjustment expenses to net premiums earned. The expense ratio is the ratio of acquisition costs and other underwriting expenses to net premiums earned. The combined ratio is the sum of the loss and expense ratios. | |
| GLOBAL INDEMNITY PLC | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Dollars in thousands) | ||||||||||
| ASSETS | (Unaudited) June 30, 2016 | December 31, 2015 | ||||||||
| Fixed Maturities: | ||||||||||
| Available for sale securities, at fair value (amortized cost: 2016 - $1,292,785 and 2015 - $1,308,333) | $ | 1,306,955 | $ | 1,306,149 | ||||||
| Equity securities: | ||||||||||
| Available for sale, at fair value (cost: 2016 - $101,867 and 2015 - $100,157) | 119,008 | 110,315 | ||||||||
| Other invested assets | 35,798 | 32,592 | ||||||||
| Total investments | 1,461,761 | 1,449,056 | ||||||||
| Cash and cash equivalents | 70,647 | 67,037 | ||||||||
| Premiums receivable, net | 90,275 | 89,245 | ||||||||
| Reinsurance receivables, net | 115,365 | 115,594 | ||||||||
| Funds held by ceding insurers | 19,927 | 16,037 | ||||||||
| Federal income taxes receivable | 4,840 | 4,828 | ||||||||
| Deferred federal income taxes | 41,028 | 34,687 | ||||||||
| Deferred acquisition costs | 56,051 | 56,517 | ||||||||
| Intangible assets | 23,342 | 23,607 | ||||||||
| Goodwill | 6,521 | 6,521 | ||||||||
| Prepaid reinsurance premiums | 49,763 | 44,363 | ||||||||
| Receivable for securities sold | 561 | 172 | ||||||||
| Other assets | 66,013 | 49,630 | ||||||||
| Total assets | $ | 2,006,094 | $ | 1,957,294 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Liabilities: | ||||||||||
| Unpaid losses and loss adjustment expenses | $ | 683,850 | $ | 680,047 | ||||||
| Unearned premiums | 294,426 | 286,285 | ||||||||
| Ceded balances payable | 12,386 | 4,589 | ||||||||
| Contingent commissions | 9,498 | 11,069 | ||||||||
| Debt | 174,211 | 172,034 | ||||||||
| Other liabilities | 60,974 | 53,344 | ||||||||
| Total liabilities | 1,235,345 | 1,207,368 | ||||||||
| Shareholders’ equity: | ||||||||||
| Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 16,559,872 and 16,424,546 respectively; A ordinary shares outstanding: 13,420,978 and 13,313,751, respectively; B ordinary shares issued and outstanding: 4,133,366 and 4,133,366, respectively | 3 | 3 | ||||||||
| Additional paid-in capital | 531,542 | 529,872 | ||||||||
| Accumulated other comprehensive income, net of taxes | 22,076 | 4,078 | ||||||||
| Retained earnings | 320,376 | 318,416 | ||||||||
| A ordinary shares in treasury, at cost: 3,138,894 and 3,110,795 shares, respectively | (103,248 | ) | (102,443 | ) | ||||||
| Total shareholders’ equity | 770,749 | 749,926 | ||||||||
| Total liabilities and shareholders’ equity | $ | 2,006,094 | $ | 1,957,294 | ||||||
| GLOBAL INDEMNITY PLC | ||||||||
| SELECTED INVESTMENT DATA | ||||||||
| (Dollars in millions) | ||||||||
| Market Value as of | ||||||||
| (Unaudited) June 30, 2016 | December 31, 2015 | |||||||
| Fixed maturities | $ | 1,307.0 | $ | 1,306.1 | ||||
| Cash and cash equivalents | 70.6 | 67.0 | ||||||
| Total bonds and cash and cash equivalents | 1,377.6 | 1,373.1 | ||||||
| Equities and other invested assets | 154.8 | 143.0 | ||||||
| Total cash and invested assets, gross | 1,532.4 | 1,516.1 | ||||||
| Receivable/(payable) for securities sold (purchased) | 0.6 | 0.2 | ||||||
| Total cash and invested assets, net | $ | 1,533.0 | $ | 1,516.3 | ||||
| (Unaudited) Three Months Ended June 30, 2016 (a) | (Unaudited) Six Months Ended June 30, 2016 (a) | |||||||
| Net investment income | $ | 6.6 | $ | 16.3 | ||||
| Net realized investment losses | (3.5 | ) | (11.0 | ) | ||||
| Net change in unrealized investment gains | 11.5 | 23.3 | ||||||
| Net realized and unrealized investment returns | 8.0 | 12.3 | ||||||
| Total investment return | $ | 14.6 | $ | 28.6 | ||||
| Average total cash and invested assets | $ | 1,519.6 | $ | 1,524.6 | ||||
| Total investment return % annualized | 3.8 | % | 3.8 | % | ||||
| (a) | Amounts in this table are shown on a pre-tax basis. |
| (b) | Simple average of beginning and end of period, net of payable/receivable for securities. |
| GLOBAL INDEMNITY PLC | |||||||||||||||
| SUMMARY OF OPERATING INCOME (LOSS) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (Dollars and shares in thousands, except per share data) | |||||||||||||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Operating income (loss) | $ | (2,915 | ) | $ | 6,913 | $ | 9,076 | $ | 15,731 | ||||||
| Adjustments: | |||||||||||||||
| Net realized investment gains (losses), net of tax | (2,250 | ) | 4,204 | (7,116 | ) | 2,180 | |||||||||
| Net income (loss) | $ | (5,165 | ) | $ | 11,117 | $ | 1,960 | $ | 17,911 | ||||||
| Weighted average shares outstanding – basic | 17,244 | 25,455 | 17,234 | 25,447 | |||||||||||
| Weighted average shares outstanding – diluted (1) | 17,244 | 25,681 | 17,485 | 25,660 | |||||||||||
| Operating income (loss) per share – basic | $ | (0.17 | ) | $ | 0.27 | $ | 0.53 | $ | 0.62 | ||||||
| Operating income (loss) per share – diluted | $ | (0.17 | ) | $ | 0.27 | $ | 0.52 | $ | 0.61 | ||||||
Note Regarding Operating Income
Operating income, a non-GAAP financial measure, is equal to net income excluding after-tax net realized investment gains (losses). Operating income is not a substitute for net income determined in accordance with GAAP, and investors should not place undue reliance on this measure.
| (1 | ) | For the quarter ended June 30, 2016, diluted loss per share is the same as basic loss per share since there was a net loss for the period. | |
Contact: Media Stephen Ries Senior Corporate Counsel (610) 668-3270 sries@global-indemnity.com
