06.08.2013 23:36:00
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Global Indemnity plc Reports Second Quarter 2013 Financial Results.
DUBLIN, Aug. 6, 2013 /PRNewswire/ -- Global Indemnity plc (NASDAQ:GBLI) today reported net income for the three months ended June 30, 2013 of $8.7 million or $0.34 per share and six months ended June 30, 2013 of $21.0 million or $0.84 per share. As of June 30th, book value per share was $32.74, a decrease of 0.5% compared to book value per share of $32.91 at March 31, 2013, and an increase of 1.8% 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 Ended June 30, | For the Six Months Ended June 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
Gross Premiums Written | $ 84.2 | $ 67.6 | $159.2 | $ 125.4 | ||||
Net Premiums Written | $ 78.3 | $ 61.1 | $149.8 | $ 111.4 | ||||
Net income | $ 8.7 | $ 9.6 | $ 21.0 | $ 20.5 | ||||
Net income per share | $ 0.34 | $ 0.35 | $ 0.84 | $ 0.72 | ||||
Operating income (1) | $ 6.8 | $ 8.2 | $ 15.4 | $ 17.2 | ||||
Operating income per share | $ 0.27 | $ 0.29 | $ 0.61 | $ 0.61 | ||||
(1) Excluding the impact of premium deficiencies recorded in 2011 which resulted in 2012 operating income being higher than it otherwise would have been, the three and six months ended June 30, 2012 operating income was $7.1 million, or $0.26 per share, and $13.9 million, or $0.49 per share, respectively.
As of June 30, 2013 | As of March 31, 2013 | As of December 31, 2012 | ||||
Book value per share | $ 32.74 | $ 32.91 | $ 32.15 | |||
Shareholders' equity | $ 824.0 | $ 827.6 | $ 806.6 | |||
Cash and invested assets | $ 1,522.0 | $ 1,539.4 | $ 1,534.0 | |||
Cynthia Y. Valko, Chief Executive Officer, commented: "I continue to be pleased with Global's development since coming on board in September 2011, including the depth and breadth of our underwriting, product, and client service teams. On a normalized basis (excluding the impact of premium deficiencies), Global generated a 100.9 combined ratio for the first six months of 2013, a marked 7.5 point improvement over 2012. Moreover, during this same period Global increased its premium volume by an impressive 34.5%. Global's primary insurance operations, Penn America, United National and Diamond State, grew practically all of their several business lines while enhancing rates and terms. Wind River, Global's reinsurance division, also experienced fine underwriting results while significantly increasing its revenue as it expanded certain key treaty relationships. Despite the recent spike in interest rates and falling bond market, Global's investment portfolio, 84% of which is invested in bonds and other fixed income instruments, produced a 3.3% return for the first six months of 2013. Quite importantly, A.M. Best, the insurance industry's most trusted and influential rating agency, also recently affirmed Global's "A" (Excellent) qualitative assessment rating across all of the Company's primary domestic and international reinsurance businesses, operations, and divisions."
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.
Teleconference and Webcast for Interested Parties
Cynthia Valko, Chief Executive Officer of Global Indemnity plc, and Thomas McGeehan, Chief Financial Officer of Global Indemnity plc, will conduct a teleconference for interested parties on August 7, 2013 at 8:30a.m. Eastern Time to discuss the second quarter 2013 results.
The Company will release its earnings after the close of business on August 6, 2013.
To participate in the teleconference, please telephone (800) 230-1085 (U.S. and Canada) or (612) 288-0337 (International) and you will be greeted by an operator. Please reference Global Indemnity plc Earnings Release Call or the host Cynthia Valko.
The teleconference is being webcast by AT&T and can be accessed at the company's website at www.globalindemnity.ie. Please access the site at least 15 minutes prior to the teleconference to register, click on the Webcast link, enter Conference ID number 299415 and click GO. Please download and install any necessary software.
The teleconference will be available for replay beginning at 10:30 a.m. Eastern Time on August 7, 2013 until 11:59 p.m. on August 7, 2014. To listen to the replay, please telephone (800) 475-6701 (U.S. and Canada) or (320) 365-3844 (International) then enter 299415.
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 Three and Six Months Ended June 30, 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 | Six Months | |||||||
2013 | 2012 | 2013 | 2012 | |||||
Loss Ratio: | ||||||||
Current Accident Year | ||||||||
Excluding Catastrophes | 46.1 | 55.6 | 49.7 | 59.5 | ||||
Catastrophes | 14.6 | 8.0 | 11.4 | 6.1 | ||||
Current Accident Year | 60.7 | 63.6 | 61.1 | 65.6 | ||||
Changes to Prior Accident Year | (1.2) | (1.1) | (2.9) | (1.7) | ||||
Loss Ratio – Calendar Year | 59.5 | 62.5 | 58.2 | 63.9 | ||||
Expense Ratio | 41.7 | 41.1 | 42.7 | 38.4 | ||||
Combined Ratio | 101.2 | 103.6 | 100.9 | 102.3 | ||||
For the three months ended June 30th, the calendar year loss ratio decreased by 3.0 points to 59.5 in 2013 from 62.5 in 2012.
Excluding the impact of premium deficiencies, the loss ratio for the three months ended June 30, 2012 was 64.5.
- Excluding catastrophes, the current accident year loss ratio decreased by 9.5 points to 46.1 in 2013 from 55.6 in 2012.
- Excluding catastrophes, the property loss ratio decreased 9.2 points from 38.5 in the second quarter of 2012 to 29.3 in the second quarter of 2013. Including catastrophes, the property loss ratio decreased by 1.9 points to 51.6 in 2013 from 53.5 in 2012.
- Excluding the impact of premium deficiencies, the casualty loss ratio decreased 1.5 points from 79.5 to 78.0 in 2013.
- Current year results include a 1.2 point reduction in the loss ratio related to prior accident years. This decrease was primarily driven by better than expected emergence in casualty lines and lower than expected severity in property lines.
For the three months ended June 30th, the expense ratio increased from 41.1 in 2012 to 41.7 in 2013.
- The expense ratio increased primarily due to the impact of premium deficiencies. Excluding the impact of premium deficiencies, the expense ratio for the three months ended June 30, 2012 was 43.2.
For the six months ended June 30th, the calendar year loss ratio decreased by 5.7 points to 58.2 in 2013 from 63.9 in 2012.
Excluding the impact of premium deficiencies, the loss ratio for the six months ended June 30, 2012 was 67.2.
- Excluding catastrophes, the current accident year loss ratio decreased by 9.8 points to 49.7 in 2013 from 59.5 in 2012.
- Excluding catastrophes, the property loss ratio decreased from 43.7 in 2012 to 36.3 in 2013. Including catastrophes, the property loss ratio decreased by 2.0 points to 53.8 in 2013 from 55.8 in 2012.
- Excluding the impact of premium deficiencies, the casualty loss ratio decreased 7.8 points to 74.7 in 2013 from 82.5 in 2012.
- Current year results include a 2.9 point reduction in the loss ratio related to prior accident years. This decrease was primarily driven by better than expected emergence in casualty and property lines.
For the six months ended June 30th, the expense ratio increased from 38.4 in 2012 to 42.7 in 2013.
- The expense ratio increased primarily due to an increase in contingent commissions as a result of profitable treaties written in the Reinsurance Operations as well as the impact of premium deficiencies. Excluding the impact of premium deficiencies, the expense ratio for the six months ended June 30, 2012 was 41.2.
Global Indemnity plc's Gross and Net Premiums Written Results by Segment
(Dollars in thousands) | Three Months Ended June 30, | ||||||||
Gross Premiums Written | Net Premiums Written | ||||||||
2013 | 2012 | 2013 | 2012 | ||||||
Insurance Operations | $ 61,879 | $ 52,371 | $ 56,387 | $ 45,874 | |||||
Reinsurance Operations | 22,366 | 15,261 | 21,959 | 15,261 | |||||
Total | $ 84,245 | $ 67,632 | $ 78,346 | $ 61,135 | |||||
Six Months Ended June 30, | |||||||||
Gross Premiums Written | Net Premiums Written | ||||||||
2013 | 2012 | 2013 | 2012 | ||||||
Insurance Operations | $ 112,967 | $ 100,205 | $ 104,015 | $ 86,780 | |||||
Reinsurance Operations | 46,217 | 25,185 | 45,809 | 24,636 | |||||
Total | $ 159,184 | $ 125,390 | $ 149,824 | $ 111,416 | |||||
Insurance Operations: For the three and six months ended June 30, 2013, gross premiums written increased 18.2% and 12.7%, respectively, and net premiums written increased 22.9% and 19.9%, respectively, compared to the same periods in 2012. These were primarily driven by an increase in the Company's small business line. Written premium increases were also realized in property brokerage, programs, and other lines. Net written premiums also increased as a result of the Company retaining more of its direct business.
Reinsurance Operations: For the three and six months ended June 30, 2013, gross premiums written increased 46.6% and 83.5%, respectively, and net premiums written increased 43.9% and 85.9%, 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 Ended June, | For the Six Months Ended June 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
Gross premiums written | $ 84,245 | $ 67,632 | $ 159,184 | $ 125,390 | ||||
Net premiums written | $ 78,346 | $ 61,135 | $ 149,824 | $ 111,416 | ||||
Net premiums earned | $ 58,671 | $ 57,859 | $ 114,667 | $ 122,329 | ||||
Net investment income | 9,765 | 11,071 | 19,799 | 22,488 | ||||
Net realized investment gains | 2,806 | 1,941 | 8,563 | 3,702 | ||||
Other income (loss) | 247 | (40) | 301 | (392) | ||||
Total revenues | 71,489 | 70,831 | 143,330 | 148,127 | ||||
Net losses and loss adjustment expenses | 34,924 | 36,158 | 66,712 | 78,167 | ||||
Acquisition costs and other underwriting expenses | 24,472 | 23,760 | 48,949 | 46,927 | ||||
Corporate and other operating expenses | 2,472 | 2,336 | 4,817 | 4,824 | ||||
Interest expense | 1,181 | 1,470 | 2,354 | 2,948 | ||||
Income before income taxes | 8,440 | 7,107 | 20,498 | 15,261 | ||||
Income tax benefit | (224) | (2,497) | (531) | (5,205) | ||||
Net income | $ 8,664 | $ 9,604 | $ 21,029 | $ 20,466 | ||||
Weighted average shares outstanding–basic | 25,050 | 27,830 | 25,052 | 28,223 | ||||
Weighted average shares outstanding–diluted | 25,119 | 27,836 | 25,121 | 28,237 | ||||
Net income per share – basic | $ 0.35 | $ 0.35 | $ 0.84 | $ 0.73 | ||||
Net income per share – diluted | $ 0.34 | $ 0.35 | $ 0.84 | $ 0.72 | ||||
Combined ratio analysis: (1) | ||||||||
Loss ratio (2) | 59.5 | 62.5 | 58.2 | 63.9 | ||||
Expense ratio (3) | 41.7 | 41.1 | 42.7 | 38.4 | ||||
Combined ratio (4) | 101.2 | 103.6 | 100.9 | 102.3 | ||||
(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 loss ratio was 64.5% and 67.2% for the quarter and six months ended June 30, 2012, respectively.
(3) Excluding the impact of premium deficiencies, the expense ratio was 43.2% and 41.2% for the quarter and six months ended June 30, 2012, respectively.
(4) Excluding the impact of premium deficiencies, the combined ratio was 107.7% and 108.4% for the quarter and six months ended June 30, 2012, respectively.
GLOBAL INDEMNITY PLC CONSOLIDATED BALANCE SHEETS (Dollars in thousands) | ||||||
ASSETS | (Unaudited) June 30, 2013 | December 31, 2012 | ||||
Fixed Maturities: | ||||||
Available for sale securities, at fair value (amortized cost: 2013 - $1,163,532 and 2012 - $1,187,094) | $ 1,184,738 | $ 1,229,322 | ||||
Equity securities: | ||||||
Available for sale, at fair value (cost: 2013 - $174,693 and 2012 - $167,179) | 222,583 | 197,075 | ||||
Other invested assets: | ||||||
Available for sale securities, at fair value | 3,226 | 3,132 | ||||
Total investments | 1,410,547 | 1,429,529 | ||||
Cash and cash equivalents | 111,440 | 104,460 | ||||
Premiums receivable, net | 74,027 | 45,162 | ||||
Reinsurance receivables, net | 232,645 | 241,827 | ||||
Receivable for securities | 5,160 | - | ||||
Deferred federal income taxes | 10,445 | 10,824 | ||||
Deferred acquisition costs | 25,980 | 18,265 | ||||
Intangible assets | 18,166 | 18,343 | ||||
Goodwill | 4,820 | 4,820 | ||||
Prepaid reinsurance premiums | 5,248 | 5,945 | ||||
Federal income taxes receivable | 1,393 | 6,844 | ||||
Other assets | 14,951 | 17,684 | ||||
Total assets | $ 1,914,822 | $ 1,903,703 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Liabilities: | ||||||
Unpaid losses and loss adjustment expenses | $ 844,918 | $ 879,114 | ||||
Unearned premiums | 128,572 | 94,114 | ||||
Ceded balances payable | 4,628 | 4,201 | ||||
Contingent commissions | 7,302 | 9,911 | ||||
Payable for securities purchased | - | 2,634 | ||||
Notes and debentures payable | 84,929 | 84,929 | ||||
Other liabilities | 20,523 | 22,182 | ||||
Total liabilities | 1,090,872 | 1,097,085 | ||||
Shareholders' equity: | ||||||
Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 16,164,587 and 16,087,939 respectively; A ordinary shares outstanding: 13,105,826 and 13,030,938, respectively; B ordinary shares issued and outstanding: 12,061,370 and 12,061,370, respectively | 3 | 3 | ||||
Additional paid-in capital | 514,422 | 512,304 | ||||
Accumulated other comprehensive income, net of taxes | 47,574 | 53,350 | ||||
Retained earnings | 363,200 | 342,171 | ||||
A ordinary shares in treasury, at cost: 3,058,761 and 3,057,001 shares, respectively | (101,249) | (101,210) | ||||
Total shareholders' equity | 823,950 | 806,618 | ||||
Total liabilities and shareholders' equity | $ 1,914,822 | $ 1,903,703 | ||||
GLOBAL INDEMNITY PLC | ||||
SELECTED INVESTMENT DATA | ||||
(Dollars in millions) | ||||
Market Value as of | ||||
(Unaudited) June 30, 2013 | December 31, 2012 | |||
Fixed Maturities | $ 1,184.7 | $ 1,229.3 | ||
Cash and cash equivalents | 111.4 | 104.5 | ||
Total bonds and cash and cash equivalents | 1,296.1 | 1,333.8 | ||
Equities and other invested assets | 225.8 | 200.2 | ||
Total cash and invested assets, gross | 1,521.9 | 1,534.0 | ||
Receivable / (payable) for securities | 5.2 | (2.6) | ||
Total cash and invested assets, net | $ 1,527.1 | $ 1,531.4 | ||
(Unaudited) Three Months Ended | (Unaudited) Six Months Ended | |||
Net investment income | $ 9.8 | $ 19.8 | ||
Net realized investment gains | 2.8 | 8.6 | ||
Net unrealized investment loss | (15.4) | (3.2) | ||
Net realized and unrealized investment returns | (12.6) | 5.4 | ||
Total investment return | $ (2.8) | $ 25.2 | ||
Average total cash and invested assets (b) | $ 1,532.6 | $ 1,529.3 | ||
Total investment return % annualized | (0.7%) | 3.3% | ||
(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 Ended June 30, | For the Six Months Ended June 30, | ||||||||
2013 | 2012 | 2013 | 2012 | ||||||
Operating income (1) | $ 6,840 | $ 8,154 | $ 15,377 | $ 17,235 | |||||
Adjustments: | |||||||||
Net realized investment gains, net of tax | 1,824 | 1,450 | 5,652 | 3,231 | |||||
Total after-tax adjustments | 1,824 | 1,450 | 5,652 | 3,231 | |||||
Net income | $ 8,664 | $ 9,604 | $ 21,029 | $ 20,466 | |||||
Weighted average shares outstanding – basic | 25,050 | 27,830 | 25,052 | 28,223 | |||||
Weighted average shares outstanding – diluted | 25,119 | 27,836 | 25,121 | 28,237 | |||||
Operating income per share – basic | $ 0.27 | $ 0.29 | $ 0.61 | $ 0.61 | |||||
Operating income per share – diluted | $ 0.27 | $ 0.29 | $ 0.61 | $ 0.61 | |||||
(1) Excluding the impact of premium deficiencies recorded in 2011 which resulted in 2012 operating income being higher than it otherwise would have been, the three and six months ended June 30, 2012 operating income was $7.1 million, or $0.26 per share, and $13.9 million, or $0.49 per share, respectively.
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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