Global Indemnity plc Reports Second Quarter 2014 Financial Results

DUBLIN, Ireland, Aug. 6, 2014 /PRNewswire/ -- Global Indemnity plc (NASDAQ: GBLI) today reported net income for the three months ended June 30, 2014 of $33.2 million or $1.31 per share compared to net income of $8.7 million or $0.34 per share at June 30, 2013. Net income for the six months ended June 30, 2014 was $42.0 million or $1.66 per share compared to net income of $21.0 million or $0.84 per share at June 30, 2013. As of June 30^th, book value per share was $35.43, an increase of 1.8% compared to book value per share of $34.82 at March 31, 2014, and an increase of 2.3% compared to book value per share of $34.65 at December 31, 2013.    

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

Cynthia Y. Valko, Chief Executive Officer, commented: "For the first six months of 2014, despite numerous weather related losses suffered by clients as a result of this year's unusually harsh winter, Global Indemnity continued to enhance profitability, as reflected by its 98% combined ratio and 20% increase in Operating Income (which excludes the company's substantial realized and unrealized investment portfolio capital gains). While premium revenue from small business property and general liability lines increased 10% and program lines grew by 7%, overall revenue growth was muted as a result of challenging competitive pressures, particularly in respect of catastrophe exposed property risks."

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.

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, 2014 at 8:30 a.m. Eastern Time to discuss the second quarter 2014 results.

To participate in the teleconference, please telephone (800) 288-8967 (U.S. and Canada) or (612) 332-0523 (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 333025 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, 2014 until 11:59 p.m. August 7, 2015. To listen to the replay, please telephone (800) 475-6701 (U.S. and Canada) or (320) 365-3844 (International) then enter 333025.

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 Six Months Ended June 30, 2014 and 2013

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

For the three months ended June 30^th, the calendar year loss ratio decreased by 1.5 points to 58.0 in 2014 from 59.5 in 2013.

For the three months ended June 30, 2014, the current accident year loss ratio increased to 64.1 compared to 60.7 for the same period in 2013. Excluding catastrophes, the current accident year loss ratio decreased 1.7 points, from 46.1 in 2013 to 44.4 in 2014.

• The current accident year property loss ratio increased 6.9 points to 58.6 in 2014 from 51.7 in 2013. Excluding catastrophes the current accident year property loss ratio decreased 0.6 points, from 29.9 in 2013 to 29.3 in 2014.
• The current accident year casualty loss ratio decreased 2.0 points to 75.3 in 2014 from 77.3 in 2013.

Calendar year results for the three months ended include a 6.1 point reduction in the loss ratio related to prior accident years, which was primarily driven by better than expected emergence in the professional and general liability lines. 

For the three months ended June 30^th, the expense ratio decreased from 41.7 in 2013 to 41.2 in 2014.

The decrease is primarily due to growth in earned premium volume in the Insurance Operations.

For the six months ended June 30^th, the calendar year loss ratio decreased by 0.7 points to 57.5 in 2014 from 58.2 in 2013.

For the six months ended June 30, 2014, the current accident year loss ratio increased 1.0 points to 62.1 compared to 61.1 for the same period in 2013. Excluding catastrophes, the current accident year loss ratio decreased 2.3 points, from 49.7 in 2013 to 47.4 in 2014.

• The current accident year property loss ratio increased 2.8 points to 56.6 in 2014 from 53.8 in 2013. Excluding catastrophes the current accident year property loss ratio decreased 1.7 points, from 36.3 in 2013 to 34.6 in 2014.
• The current accident year casualty loss ratio decreased 1.4 points to 73.3 in 2014 from 74.7 in 2013.

Calendar year results for the six months ended include a 4.6 point reduction in the loss ratio related to prior accident years, which was primarily driven by better than expected emergence in the professional and general liability lines.

For the six months ended June 30^th, the expense ratio decreased from 42.7 in 2013 to 40.2 in 2014.

The decrease in the expense ratio is primarily due to growth in earned premium volume in both the Insurance and Reinsurance Operations.

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

Insurance Operations:  For the three months ended June 30, 2014, gross premiums written and net premiums written decreased 2.1% and 2.4%, respectively, compared to the same period in 2013. Excluding commercial auto business ($0.7 million in 2014), gross premiums written and net premiums written increased approximately 5.0% compared to the same period in 2013. Growth was realized in small business, property brokerage, and programs.

For the six months ended June 30, 2014, gross premiums written increased 0.5% and net written premiums decreased by 0.3% compared to the same period in 2013. Excluding commercial auto business ($2.0 million in 2014), gross premiums written and net premiums written increased approximately 6.0% compared to the same period in 2013. Growth was realized in small business and programs.

Reinsurance Operations:  For the three months ended June 30, 2014, gross premiums written and net premiums written decreased 0.1% and 2.9%, respectively, compared to the same period in 2013.

For the six months ended June 30, 2014, gross premiums written increased 0.7% and net written premiums decreased 0.6% compared to the same period in 2013. 

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 (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.

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SOURCE Global Indemnity plc