Global Indemnity plc Reports Second Quarter 2015 Financial Results

DUBLIN, Aug. 04, 2015 (GLOBE NEWSWIRE) -- Global Indemnity plc (NASDAQ:GBLI) today reported net income of $17.9 million or $0.70 per share for the six months ended June 30, 2015. Operating income was $15.7 million for the six months ended June 30, 2015 compared to $18.5 million at June 30, 2014. Excluding one-time costs associated with the acquisition of American Reliable Insurance Company ("American Reliable"), operating income was $21.1 million at June 30, 2015, an improvement of 14% compared to the same period of 2014. Book value per share was $36.20 at June 30, 2015, an increase 0.9% compared to book value per share of $35.86 at December 31, 2014.   

Selected Operating and Balance Sheet Data (Dollars in millions, except per share data)

Cynthia Y. Valko, Chief Executive Officer, commented:  "American Reliable has now been a part of Global Indemnity for six months.  Premium volume compared to 2014 is almost double and the combined ratio has improved to 96.9 compared to 97.7 in 2014. We have been able to absorb many functions previously performed for American Reliable by the former parent without adding staff which has helped improve the expense ratio 1.5 points.  These factors have led to operating income of $21.1 million excluding one-time costs associated with the acquisition, an improvement of 14% compared to 2014.  In addition to the positive results related to the acquisition, the integration of American Reliable has been smooth with no disruptions to the existing business. The Commercial Lines and Reinsurance Operations are also holding up well even in this competitive environment. Book value per share continues to grow even with the rise in interest rates during the 2nd quarter. The investment portfolio is also well positioned, mainly invested in short duration investment grade bonds.  All in all, a good start for our combined companies."  

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 release¹ 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 integrating the businesses of American Reliable, which could result in a failure to realize the potential benefits of the acquisition, the risk that the transaction proves disruptive to the operations of American Reliable or Global Indemnity, 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 the Private Securities Litigation Reform Act of 1995.

Global Indemnity plc's Combined Ratio for the Six Months Ended June 30, 2015 and 2014

The combined ratio is a key measure of insurance profitability.  The components comprising the combined ratio are as follows:

For the six months ended June 30^th, the accident year loss ratio improved by 0.5 points compared to 2014.

For the six months ended June 30, 2015, the current accident year loss ratio was 61.6 compared to 62.1 for the same period in 2014.

• The current accident year casualty loss ratio improved by 4.6 points to 68.7 in 2015 from 73.3 in 2014. 
   
• The current accident year property loss ratio increased 2.9 points to 59.5 in 2015 from 56.6 in 2014 mainly due to a mix change in the business due to the acquisition of American Reliable which has a higher loss ratio.

Calendar year results for the six months ended June 30, 2015 include a 3.4 point reduction in the loss ratio related to prior accident years which was primarily driven by better than expected emergence in general liability and professional lines, and less than anticipated severity on property catastrophe losses within Reinsurance Operations.

For the six months ended June 30^th, the expense ratio improved from 40.2 in 2014 to 38.7 in 2015.

The improvement in the expense ratio is primarily attributable to synergies realized as a result of the acquisition of American Reliable.

Global Indemnity plc's Gross and Net Premiums Written Results by Segment

Gross premiums written and net premiums written increased 93% and 82%, respectively, compared to the same period in 2014.

Commercial Lines Operations:  For the six months ended June 30, 2015, gross premiums written and net premiums written decreased 4.2% and 3.3%, respectively, compared to the same period in 2014. Underwriting actions were taken to improve profitability which included non-renewing some property business to reduce catastrophe exposure.

Personal Lines Operations:  Personal lines is a new segment for the Company resulting from the acquisition of American Reliable during the first quarter of 2015.

Gross premiums written include $23.0 million of business that is currently written by American Reliable and is 100% ceded to insurance entities owned by the former parent. Net premiums written were $133.5 million for the six months ended June 30, 2015 compared to $133.6 million for the same period in 2014.

Reinsurance Operations: For the six months ended June 30, 2015, gross premiums written and net premiums written decreased 17.6% and 15.9%, respectively, compared to the same period in 2014.  The decrease in gross and net premiums written is due to competition in the property catastrophe reinsurance marketplace.

Note: Tables Follow

(1) Excluding the $5.4 million of acquisition expenses related to American Reliable Insurance Company, net income would have been $23.3 million for the six months ended June 30, 2015. 
       
(2) Please see the footnotes at the bottom of the Summary Of Operating Income for a reconciliation of net income to operating income.

(3) 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.

Note Regarding Operating Income

Operating income, a non-GAAP financial measure, is equal to net income excluding after-tax net realized investment gains. Operating income is not a substitute for net income determined in accordance with GAAP, and investors should not place undue reliance on this measure.

Media
Stephen Ries
Senior Corporate Counsel
(610) 668-3270          
sries@global-indemnity.com
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