Global Indemnity plc Reports Second Quarter 2011 Financial Results
By Global Indemnity Plc, PRNETuesday, August 2, 2011
DUBLIN, August 3, 2011 -
Global Indemnity plc (NASDAQ:GBLI) today reported net income for the three months ended June 30, 2011 of $4.4 million or $0.15 per share and for six months ended June 30, 2011 of $18.2 million or $0.60 per share. As of June 30th, book value per share increased to $31.01 or 1.4% from $30.59 per share at December 31, 2010.
(Logo: photos.prnewswire.com/prnh/20100803/LT45156LOGO )
Selected Operating and Balance Sheet Data (Dollars in
millions, except per share data)
For the Three For the Six
Months Months
-------------- ------------
Ended June 30, Ended June 30,
-------------- --------------
2011 2010 2011 2010
---- ---- ---- ----
Gross Premiums Written $95.0 $92.1 $182.6 $184.9
Net Premiums Written $86.4 $79.5 $169.5 $161.0
Net income $4.4 $24.5 $18.2 $43.4
Net income per share $0.15 $0.81 $0.60 $1.44
Operating income (loss) $(1.8) $20.7 $3.3 $28.6
Operating income (loss)
per share $(0.06) $0.68 $0.11 $0.95
As of As of As of
June 30, March 31, December 31,
2011 2011 2010
---- ---- ----
Book value per
share $31.01 $30.96 $30.59
Shareholders'
equity $943.2 $941.4 $928.7
Cash and invested
assets $1,734.4 $1,739.3 $1,717.2
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 www.globalindemnity.ie.
Teleconference and Webcast for Interested Parties
Larry A. Frakes, President and 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 4, 2011 at 8:30 a.m. Eastern Time to discuss the second quarter 2011 results.
To participate in the teleconference, please telephone +1-(800)-288-8960 (U.S. and Canada) or +1-612-332-0226 (International) and you will be greeted by an operator. Please reference Global Indemnity plc 2nd Quarter 2011 Earnings Call.
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, download and install any necessary software. The webcast is also being distributed over AT&T’s Audio-Only Web ConferenceCast. To access live or archived event, please use this URL: 205.144.147.162/cgi-bin/confCast, Conference ID#: 211204 and click GO.
The teleconference will be available for replay beginning at 10:30 a.m. Eastern Time on August 4, 2011 and will end on 11:59 p.m. September 4, 2011. To listen to the replay, please telephone +1-(800)-475-6701 (U.S. and Canada) or +1-320-365-3844 (International) then enter 211204.
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, 2011 and 2010
The combined ratio is a key measure of insurance profitability. The components comprising the combined ratio are as follows:
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2011 2010 2011 2010
---- ---- ---- ----
Loss Ratio:
Current Accident Year
Excluding Catastrophes 68.8 55.2 67.1 56.2
Catastrophes 17.2 9.7 17.8 7.8
---- --- ---- ---
Current Accident Year 86.0 64.9 84.9 64.0
Changes to Prior
Accident Year (6.8) (21.2) (6.9) (12.8)
---- ----- ---- -----
Loss Ratio - Calendar
Year 79.2 43.7 78.0 51.2
Expense Ratio 38.7 38.8 39.0 40.7
---- ---- ---- ----
Combined Ratio 117.9 82.5 117.0 91.9
===== ==== ===== ====
For the three months ended June 30th, the calendar year loss ratio increased by 35.5 points to 79.2 in 2011 from 43.7 in 2010.
- Excluding catastrophes, the current accident year loss ratio increased by 13.6 points to 68.8 in 2011 from 55.2 in 2010.
- Excluding catastrophes, the property loss ratio increased from 34.6 in the second quarter of 2010 to 38.4 in the second quarter of 2011 mainly due to severity from fire losses and storms. Including catastrophes, the property loss ratio increased by 18.7 points to 78.6 in 2011 from 59.9 in 2010.
- The casualty loss ratio increased 23.5 points to 91.5 in 2011 from 68.0 in 2010. The increase is mainly attributable to increased losses in casualty brokerage and professional lines in our US Insurance Operations and changes in the mix of business from our Reinsurance Operations.
- Current year results include a 6.8 point reduction in the loss ratio related to prior accident years. For 2011 we reduced prior accident years by $5.3 million. This decrease was made up of (1) $9.1 million decrease from our US Insurance Operations primarily due to decreases in general liability loss reserves mitigated partially by loss reserve increases in casualty brokerage & professional lines and (2) an increase of $3.8 million from our Reinsurance Operations within the marine and property catastrophe lines.
For the three months ended June 30th, the expense ratio decreased from 38.8 in 2010 to 38.7 in 2011.
- The expense ratio decreased from 38.8 in 2010 to 38.7 in 2011 primarily due to lower employee costs from our previously disclosed Profit Enhancement Initiative and a decrease in contingent commissions related to increases in loss ratios described above, offset partially by an increase in average commission rates due to changes in our mix of business.
- Corporate expenses also decreased $0.4 million on a quarter over quarter basis.
For the six months ended June 30th, the calendar year loss ratio increased by 26.8 points to 78.0 in 2011 from 51.2 in 2010.
- Excluding catastrophes, the current accident year loss ratio increased by 10.9 points to 67.1 in 2011 from 56.2 in 2010.
- Excluding catastrophes, the property loss ratio increased from 37.9 in the second quarter of 2010 to 45.6 in the second quarter of 2011. Severity from fire losses and weather events contributed to the increase. Including catastrophes, the property loss ratio increased by 29.0 points to 87.1 in 2011 from 58.1 in 2010.
- The casualty loss ratio increased 15.5 points to 83.2 in 2011 from 67.7 in 2010. The increase is mainly attributable to increased losses in our casualty brokerage class and professional lines in our US Insurance Operations and changes in the mix of business from our Reinsurance Operations.
- Current year results include a 6.9 point reduction in the loss ratio related to prior accident years. This decrease was made up of (1) $17.8 million decrease from our US Insurance Operations primarily due to decreases in general liability loss reserves mitigated partially by loss reserve increases in casualty brokerage & professional lines and (2) an increase of $7.2 million from our Reinsurance Operations within the marine, property catastrophe, and auto liability lines.
For the six months ended June 30th, the expense ratio decreased from 40.7 in 2010 to 39.0 in 2011.
- The expense ratio decreased from 40.7 in 2010 to 39.0 in 2011 primarily due to lower employee costs from our previously disclosed Profit Enhancement Initiative and a decrease in contingent commissions related to increases in loss ratios described above, offset partially by an increase in average commission rates due to changes in our mix of business.
- Corporate expenses also decreased $2.5 million. The decrease is due to completing the redomestication to Ireland and the Profit Enhancement Initiative.
Global Indemnity plc’s three months ended June 30, 2011 and 2010 Gross and Net Premiums Written Results by Business Unit
(Dollars in
thousands)
Three Months Ended June 30,
Gross Premiums Written Net Premiums Written
---------------------- --------------------
2011 2010 2011 2010
---- ---- ---- ----
Insurance
Operations $70,375 $61,531 $61,820 $49,011
Reinsurance
Operations 24,587 30,519 24,587 30,512
Total $94,962 $92,050 $86,407 $79,523
======= ======= ======= =======
Insurance Operations: For the three months ended June 30, 2011, gross premiums written increased 14.4%, and net premiums written increased 26.1%, compared to the same period in 2010. The increase in gross premiums is mainly due to growth in Diamond State’s property and casualty brokerage units, Collectibles Insurance Services LLC, which was acquired in April of 2010, and our Vacant Express product, offset partially by decreases in Penn-America. However, we are seeing signs that the small business market where Penn-America competes is improving. The increase in net written premiums is primarily due to the cancellation of a property quota share reinsurance treaty effective January 1, 2011 and an increase in retention related to the US property excess of loss treaty which renewed on January 1, 2011.
Reinsurance Operations: For the three months ended June 30, 2011, gross and net premiums written decreased 19.4% compared to the same period in 2010. Timing of new treaties and non-renewals can cause premiums written to vary widely in this segment. The decrease in gross and net premiums written is due to the sale of a company that elected to not renew its treaty with Wind River post-acquisition and non-renewing a treaty that did not meet our return hurdles, offset partially by several new treaties.
Global Indemnity plc’s six months ended June 30, 2011 and 2010 Gross and Net Premiums Written Results by Business Unit
(Dollars in
thousands) Six Months Ended June 30,
Gross Premiums Written Net Premiums Written
---------------------- --------------------
2011 2010 2011 2010
---- ---- ---- ----
Insurance
Operations $126,842 $115,602 $114,231 $92,489
Reinsurance
Operations 55,786 69,301 55,284 68,515
Total $182,628 $184,903 $169,515 $161,004
======== ======== ======== ========
Insurance Operations: For the six months ended June 30, 2011, gross premiums written increased 9.7%, and net premiums written increased 23.5%, compared to the same period in 2010. The increase in gross premiums is mainly due to growth in Diamond State’s property and casualty brokerage units, Collectibles Insurance Services LLC, which was acquired in April of 2010, and our Vacant Express product, offset partially by decreases in Penn-America. However, we are seeing signs that the small business market where Penn-America competes is improving. The increase in net written premiums is primarily due to the cancellation of a property quota share reinsurance treaty effective January 1, 2011 and an increase in retention related to the US property excess of loss treaty which renewed on January 1, 2011.
Reinsurance Operations: For the six months ended June 30, 2011, gross premiums written decreased 19.5%, and net premiums written decreased 19.3%, compared to the same period in 2010. Timing of new treaties and non-renewals can cause gross premiums written to vary widely in this segment. The decrease in gross and net premiums written is primarily due to the sale of a company that elected to not renew its treaty with Wind River post-acquisition and non-renewing a treaty that did not meet our return hurdles, offset partially by several new treaties.
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,
-----------
2011 2010
---- ----
Gross premiums written $94,962 $92,050
======= =======
Net premiums written $86,407 $79,523
======= =======
Net premiums earned $78,055 $74,702
Investment income, net 13,930 13,941
Net realized investment
gains 8,386 5,597
Other income 163 342
--- ---
Total revenues 100,534 94,582
Net losses and loss
adjustment expenses 61,753 32,675
Acquisition costs and
other underwriting
expenses 30,197 29,008
Corporate and other
operating expenses 4,687 5,063
Interest expense 1,743 1,833
----- -----
Income before income
taxes 2,154 26,003
Income tax expense
(benefit) (2,287) 1,491
------ -----
Net income before
equity in net income
(loss) of partnership 4,441 24,512
Equity in net income
(loss) of partnership,
net of tax - -
--- ---
Net income $4,441 $24,512
====== =======
Weighted average shares
outstanding-basic 30,322 30,207
====== ======
Weighted average shares
outstanding-diluted 30,368 30,237
====== ======
Net income per share -
basic (1) $0.15 $0.81
===== =====
Net income per share -
diluted (1) $0.15 $0.81
===== =====
Combined ratio analysis: (2)
Loss ratio 79.2 43.7
Expense ratio 38.7 38.8
---- ----
Combined ratio 117.9 82.5
For the Six Months
------------------
Ended June 30,
--------------
2011 2010
---- ----
Gross premiums written $182,628 $184,903
======== ========
Net premiums written $169,515 $161,004
======== ========
Net premiums earned $154,024 $145,490
Investment income, net 28,344 28,520
Net realized investment
gains 20,383 19,801
Other income 11,832 342
------ ---
Total revenues 214,583 194,153
Net losses and loss
adjustment expenses 120,095 74,464
Acquisition costs and
other underwriting
expenses 60,049 59,156
Corporate and other
operating expenses 7,467 9,959
Interest expense 3,495 3,572
----- -----
Income before income
taxes 23,477 47,002
Income tax expense
(benefit) 5,304 3,560
----- -----
Net income before
equity in net income
(loss) of partnership 18,173 43,442
Equity in net income
(loss) of partnership,
net of tax 53 (29)
--- ---
Net income $18,226 $43,413
======= =======
Weighted average shares
outstanding-basic 30,312 30,196
====== ======
Weighted average shares
outstanding-diluted 30,350 30,219
====== ======
Net income per share -
basic (1) $0.60 $1.44
===== =====
Net income per share -
diluted (1) $0.60 $1.44
===== =====
Combined ratio
analysis: (2)
Loss ratio 78.0 51.2
Expense ratio 39.0 40.7
---- ----
Combined ratio 117.0 91.9
(1)Per share amounts for 2010 have been restated to reflect the
1-for-2 stock exchange effective July 2, 2010 when the Company
completed its redomestication to Ireland.
(2)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.
GLOBAL INDEMNITY PLC
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars and shares in thousands, except per share data)
ASSETS As of As of
June 30, December 31,
2011 2010
---- ----
Fixed Maturities:
Available for sale securities, at
fair value
(amortized cost: 2011 -
$1,414,780 and 2010 -
$1,393,655) $1,460,218 $1,444,392
Equity securities:
Available for sale, at fair value
(cost: 2011 -$129,239 and 2010 -
$121,604) 150,226 147,526
Other invested assets:
Available for sale securities, at
fair value
(cost: 2011 -$14,126 and 2010 -
$4,255) 17,579 4,268
Securities classified as trading,
at fair value
(cost: 2011 -$0 and 2010 -
$1,112) - 1,112
Total investments 1,628,023 1,597,298
Cash and cash equivalents 106,344 119,888
Premiums receivable, net 68,481 56,657
Reinsurance receivables 332,242 422,844
Deferred federal income taxes 9,414 6,926
Deferred acquisition costs 38,768 35,344
Intangible assets 18,893 19,082
Goodwill 4,820 4,820
Prepaid reinsurance premiums 8,842 11,104
Other assets 22,804 20,720
------ ------
Total assets $2,238,631 $2,294,683
========== ==========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Liabilities:
Unpaid losses and loss adjustment
expenses $975,196 $1,052,743
Unearned premiums 149,104 135,872
Ceded balances payable 6,118 12,376
Contingent commissions 4,944 9,260
Payable for securities purchased 4,536 4,768
Federal income taxes payable 1,559 55
Notes and debentures payable 121,142 121,285
Other liabilities 32,850 29,655
------ ------
Total liabilities 1,295,449 1,366,014
--------- ---------
Shareholders' equity:
Ordinary shares, $0.0001 par
value, 900,000,000 ordinary
shares authorized; Class A
ordinary shares issued:
21,401,190 and 21,340,821
respectively; Class A ordinary
shares outstanding: 18,352,985
and 18,300,544, respectively;
Class B ordinary shares issued
and outstanding: 12,061,370 and
12,061,370, respectively 3 3
Additional paid-in capital 623,751 622,725
Accumulated other comprehensive
income, net of taxes 52,639 57,211
Retained earnings 367,868 349,642
Class A ordinary shares in
treasury, at cost: 3,048,205 and
3,040,277 shares, respectively (101,079) (100,912)
Total shareholders' equity 943,182 928,669
------- -------
Total liabilities and
shareholders' equity $2,238,631 $2,294,683
========== ==========
GLOBAL INDEMNITY PLC
SELECTED INVESTMENT DATA
(Unaudited)
(Dollars in millions)
Market Value as of
June 30, 2011 Dec 31, 2010
------------- ------------
Fixed Maturities $1,460.2 $1,444.4
Cash and cash equivalents 106.4 119.9
----- -----
Total bonds and cash and cash
equivalents 1,566.6 1,564.3
Equities and other invested
assets 167.8 152.9
----- -----
Total cash and invested
assets $1,734.4 $1,717.2
======== ========
Three Months Six Months
Ended June 30, Ended June 30,
2011 (a) 2011 (a)
Net investment income $12.1 $24.6
----- -----
Net realized investment
gains 6.2 15.0
Net unrealized investment
losses (3.1) (4.6)
Net realized and
unrealized investment
returns 3.1 10.4
--- ----
Total investment return $15.2 $35.0
===== =====
Average total cash and
invested assets (b) $1,729.1 $1,721.1
======== ========
Total investment return %
annualized 3.5% 4.1%
(a)Amounts in this table are shown on an after-tax basis.
(b)Simple average of beginning and end of period, net of
payable 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,
--------------
2011 2010
---- ----
Operating income (loss) $(1,769) $20,711
Adjustments:
Net realized investment
gains, net of tax 6,210 3,801
Total after-tax adjustments 6,210 3,801
----- -----
Net income $4,441 $24,512
====== =======
Weighted average shares
outstanding - basic 30,322 30,207
====== ======
Weighted average shares
outstanding - diluted 30,368 30,237
====== ======
Operating income (loss) per
share - basic $(0.06) $0.69
====== =====
Operating income (loss) per
share - diluted $(0.06) $0.68
====== =====
For the Six Months
------------------
Ended June 30,
--------------
2011 2010
---- ----
Operating income (loss) $3,261 $28,619
Adjustments:
Net realized investment
gains, net of tax 14,965 14,794
Total after-tax adjustments 14,965 14,794
------ ------
Net income $18,226 $43,413
======= =======
Weighted average shares
outstanding - basic 30,312 30,196
====== ======
Weighted average shares
outstanding - diluted 30,350 30,219
====== ======
Operating income (loss) per
share - basic $0.11 $0.95
===== =====
Operating income (loss) per
share - diluted $0.11 $0.95
===== =====
Per share amounts for 2010 have been restated to reflect the 1-for-2 stock exchange effective July 2, 2010 when the Company completed its redomestication to Ireland.
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
.
Tags: August 3, Dublin, Global Indemnity Plc, ireland
