Click here to close now.

SYS-CON MEDIA Authors: Liz McMillan, Elizabeth White, Carmen Gonzalez, Plutora Blog, Pat Romanski

News Feed Item

Global Indemnity plc Reports Third Quarter 2012 Financial Results

DUBLIN, Nov. 7, 2012 /PRNewswire/ -- Global Indemnity plc (NASDAQ:GBLI) today reported net income for the three months ended September 30, 2012 of $9.9 million or $0.39 per share and net income for the nine months ended September 30, 2012 of $30.4 million or $1.11 per share. As of September 30th, book value per share was $32.02, an increase of 2.7% compared to book value per share of $31.19 at June 30, 2012, and an increase of 10.2% compared to book value per share of $29.06 at December 31, 2011. The Company also repurchased 266 thousand of its shares in the open market for $5.5 million during the quarter.

(Logo: http://photos.prnewswire.com/prnh/20100803/LT45156LOGO)

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



For the Three Months
Ended September 30,


For the Nine Months
Ended September 30,


2012


2011


2012


2011









Gross Premiums Written

$  56.9


$     73.1


$182.3


$   255.7

Net Premiums Written

$  51.5


$     64.9


$162.9


$   234.4









Net income (loss)

$    9.9


$  (33.4)


$  30.4


$  (14.8)

Net income (loss) per share

$  0.39


$  (1.10)


$  1.11


$  (0.49)









Operating income (loss)

$    7.6


$  (34.0)


$  24.9


$  (30.4)

Operating income (loss) per share

$  0.30


$  (1.12)


$  0.91


$  (1.00)






As of
September 30,
2012

As of
June 30,
2012


As of
March 31,
2012


As of
December 31,
2011(1)








Book value per share

$    32.02

$    31.19


$    30.19


$    29.06

Shareholders' equity

$    807.4

$    795.2


$    859.4


$    839.1

Cash and invested assets

$ 1,565.8

$ 1,572.8


$ 1,666.7


$ 1,647.7


(1)  Retrospective adoption of new accounting guidance limiting acquisition costs that can be deferred decreased shareholders' equity by $2.6 million or $0.09 per share



Cynthia Y. Valko, Chief Executive Officer, stated, "Book value per share has increased 10.2% since 2011 primarily due to growing more profitable lines, exiting unprofitable classes of business, and share repurchases.  We are working closely with our agents and are investing in our business to further enhance the value proposition.  In regard to Hurricane Sandy, which struck on October 29, 2012 (approximately a month after the close of the Third Quarter), the Company does not yet have a reliable estimate of the storm's impact on its financial results."

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.

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 Nine Months Ended September 30, 2012 and 2011

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



Three Months Ended
September 30,


Nine Months Ended
September 30,


2012


2011


2012


2011

Loss Ratio:








Current Accident Year








  Excluding Catastrophes

54.5


86.8


57.9


73.7

  Catastrophes

10.7


21.7


7.6


19.1

  Current Accident Year

65.2


108.5


65.5


92.8

Changes to Prior Accident Year

(1.2)


3.3


(1.6)


(3.5)

Loss Ratio – Calendar Year

64.0


111.8


63.9


89.3

Expense Ratio

42.0


43.2


39.5


40.2

Combined Ratio

106.0


155.0


103.4


129.5




For the three months ended September 30th, the calendar year loss ratio decreased by 47.8 points to 64.0 in 2012 from 111.8 in 2011.

  • Excluding catastrophes, the current accident year loss ratio decreased by 32.3 points to 54.5 in 2012 from 86.8 in 2011.  
    • Excluding catastrophes, the property loss ratio decreased from 50.0 in the third quarter of 2011 to 38.4 in the third quarter of 2012 mainly due to decreased severity from fire losses and severe weather during 2012.  Including catastrophes, the property loss ratio decreased by 42.0 points to 56.8 in 2012 from 98.8 in 2011.
    • The casualty loss ratio decreased 39.4 points to 76.9 in 2012 from 116.3 in 2011.  The decrease is mainly attributable to actions taken to improve profitability that were implemented in the latter half of 2011.
  • Current year results include a 1.2 point reduction in the loss ratio related to prior accident years.  This decrease was mainly related to Insurance Operations and resulted primarily from favorable emergence in professional liability lines partially offset by increases to auto liability lines in both Insurance and Reinsurance Operations.

For the three months ended September 30th, the expense ratio decreased from 43.2 in 2011 to 42.0 in 2012.

  • The expense ratio decreased from 43.2 in 2011 to 42.0 in 2012 primarily due to changes in the mix of business in the Reinsurance Operations.
  • Corporate expenses decreased $1.0 million on a quarter over quarter basis mainly due to a decrease in outside legal and other professional fees.  

For the nine months ended September 30th, the calendar year loss ratio decreased by 25.4 points to 63.9 in 2012 from 89.3 in 2011.

  • Excluding catastrophes, the current accident year loss ratio decreased by 15.8 points to 57.9 in 2012 from 73.7 in 2011.  
    • Excluding catastrophes, the property loss ratio decreased from 47.1 in the third quarter of 2011 to 41.9 in the third quarter of 2012 mainly due to decreased severity from fire losses and severe weather during 2012.  Including catastrophes, the property loss ratio decreased by 35.0 points to 56.1 in 2012 from 91.1 in 2011.
    • The casualty loss ratio decreased 17.9 points to 76.1 in 2012 from 94.0 in 2011.  The decrease is mainly attributable to actions taken to improve profitability that were implemented in the latter half of 2011.
  • Current year results include a 1.6 point reduction in the loss ratio related to prior accident years. This decrease was primarily related to Insurance Operations and resulted primarily from favorable emergence in general and professional liability lines partially offset by increases to property and marine lines in Insurance Operations and auto liability lines in both Insurance and Reinsurance Operations.

For the nine months ended September 30th, the expense ratio decreased from 40.2 in 2011 to 39.5 in 2012.

  • The expense ratio remained consistent, decreasing marginally from 40.2 in 2011 to 39.5 in 2012 primarily due to changes in the mix of business in the Reinsurance Operations.
  • Corporate expenses decreased $4.0 million mainly due to a decrease in outside legal and other professional fees.

Global Indemnity plc's three months ended September 30, 2012 and 2011 Gross and Net Premiums Written Results by Business Unit


(Dollars in thousands)

Three Months Ended September 30,


Gross Premiums Written


Net Premiums Written


2012


2011


2012


2011

Insurance Operations

$  51,205


$  55,260


$   45,710


$   47,102

Reinsurance Operations

5,744


17,832


5,745


17,832

Total

$ 56,949


$ 73,092


$ 51,455


$ 64,934




Insurance Operations:  For the three months ended September 30, 2012, gross premiums written decreased 7.3%, and net premiums written decreased 3.0%, compared to the same period in 2011.  In the second half of 2011 the Company began exiting certain unprofitable classes of business which contributed to the decrease.  This was partially offset by increases in the Company's small business, commercial auto and vacant property classes.

Reinsurance Operations:  For the three months ended September 30, 2012, gross and net premiums written decreased 67.8% compared to the same period in 2011.  The decrease was primarily due to the cancellation of several unprofitable treaties during 2012.  

Global Indemnity plc's nine months ended September 30, 2012 and 2011 Gross and Net Premiums Written Results by Business Unit


(Dollars in thousands)

Nine Months Ended September 30,


Gross Premiums Written


Net Premiums Written


2012


2011


2012


2011

Insurance Operations

$  151,410


$  182,102


$   132,490


$   161,333

Reinsurance Operations

30,929


73,618


30,381


73,116

Total

$ 182,339


$ 255,720


$ 162,871


$ 234,449




Insurance Operations:  For the nine months ended September 30, 2012, gross premiums written decreased 16.9%, and net premiums written decreased 17.9%, compared to the same period in 2011.  In the second half of 2011 the Company began exiting certain unprofitable classes of business which contributed to the decrease.  This was partially offset by increases in the Company's small business, property brokerage and commercial auto classes.

Reinsurance Operations:  For the nine months ended September 30, 2012, gross premiums written decreased 58.0%, and net premiums written decreased 58.4%, compared to the same period in 2011.  The decrease was primarily due to the cancellation of several unprofitable treaties during 2012.

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 September 30,


For the Nine Months
Ended September 30,


2012


2011


2012


2011

Gross premiums written

$  56,949


$  73,092


$  182,339


$  255,720









Net premiums written

$  51,455


$  64,934


$  162,871


$  234,449









Net premiums earned

$  55,329


$  77,090


$  177,658


$  231,114

Investment income, net

14,777


12,880


37,265


41,224

Net realized investment gains

3,211


1,288


6,913


21,671

Other income (loss)

101


372


(291)


12,539

    Total revenues

73,418


91,630


221,545


306,548









Net losses and loss adjustment expenses

35,407


86,234


113,574


206,329

Acquisition costs and other underwriting expenses

23,223


33,327


70,150


92,810

Corporate and other operating expenses

2,039


3,067


6,863


10,869

Interest expense

1,265


1,525


4,213


5,020

    Income (loss) before income taxes

11,484


(32,523)


26,745


(8,480)

Income tax expense (benefit)

1,571


899


(3,634)


6,401

Net income (loss) before equity in net income of partnership

9,913


(33,422)


30,379


(14,881)

Equity in net income of partnership, net of tax

-


-


-


53

    Net income (loss)

$ 9,913


$ (33,422)


$ 30,379


$ (14,828)









Weighted average shares outstanding–basic

25,392


30,338


27,263


30,321









Weighted average shares outstanding–diluted

25,413


30,353


27,281


30,342









Net income (loss) per share – basic

$    0.39


$    (1.10)


$    1.11


$    (0.49)









Net income (loss) per share – diluted

$    0.39


$    (1.10)


$    1.11


$    (0.49)









Combined ratio analysis: (1)








Loss ratio

64.0


111.8


63.9


89.3

Expense ratio

42.0


43.2


39.5


40.2

Combined ratio

106.0


155.0


103.4


129.5


(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.



GLOBAL INDEMNITY PLC
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

ASSETS


(Unaudited)
September 30,
2012


December 31,
2011 (1)

Fixed Maturities:






Available for sale securities, at fair value

(amortized cost: 2012 - $1,212,179 and 2011 - $1,258,533)


$ 1,259,845


$ 1,296,885

Equity securities:






Available for sale, at fair value

(cost: 2012 - $165,095 and 2011 - $155,390)


194,553


168,361

Other invested assets:






Available for sale securities, at fair value

(cost: 2012 - $3,049 and 2011 - $4,150)



2,937




6,617


     Total investments


1,457,335


1,471,863






Cash and cash equivalents


108,490


175,860

Premiums receivable, net


42,439


47,844

Reinsurance receivables


273,993


287,986

Deferred federal income taxes


5,352


14,642

Deferred acquisition costs


19,438


21,564

Intangible assets


18,431


18,704

Goodwill


4,820


4,820

Prepaid reinsurance premiums


6,390


6,555

Receivable for securities sold


-


1,484

Federal income taxes receivable


8,600


2,223

Other assets


19,059


19,371


Total assets


$ 1,964,347


$ 2,072,916






LIABILITIES AND SHAREHOLDERS' EQUITY





Liabilities:





Unpaid losses and loss adjustment expenses


$    923,778


$    971,377

Unearned premiums


99,087


114,041

Ceded balances payable


3,050


8,887

Contingent commissions


7,843


7,473

Payable for securities purchased


16,089


-

Notes and debentures payable


84,929


103,000

Other liabilities


22,184


29,075


Total liabilities


1,156,960


1,233,853






Shareholders' equity:





Ordinary shares, $0.0001 par value, 900,000,000 ordinary shares authorized; A ordinary shares issued: 16,208,439 and 21,429,683 respectively; A ordinary shares outstanding: 13,151,919 and 16,810,678, respectively; B ordinary  shares issued and outstanding: 12,061,370 and 12,061,370, respectively


3


3

Additional paid-in capital


514,124


621,917

Accumulated other comprehensive income, net of taxes


56,667


40,174

Retained earnings


337,792


307,413

A ordinary shares in treasury, at cost: 3,056,520 and 4,619,005 shares, respectively


(101,199)


(130,444)


Total shareholders' equity


807,387


839,063







Total liabilities and shareholders' equity


$ 1,964,347


$ 2,072,916


(1)  Retrospective adoption of new accounting guidance limiting acquisition costs that can be deferred decreased deferred acquisition costs by $4.0 million and shareholders' equity by $2.6 million



GLOBAL INDEMNITY PLC
SELECTED INVESTMENT DATA
(Dollars in millions)



Market Value as of


(Unaudited)
September 30, 2012



December 31, 2011





Fixed Maturities

$ 1,259.8


$ 1,296.9

Cash and cash equivalents

108.5


175.8

Total bonds and cash and cash equivalents

1,368.3


1,472.7

Equities and other invested assets

197.5


175.0

Total cash and invested assets, gross

1,565.8


1,647.7

Receivable / (payable) for securities

(16.1)


1.5

Total cash and invested assets, net  

$ 1,549.7


$ 1,649.2






(Unaudited)
Three Months Ended
September 30, 2012 (a)


(Unaudited)
Nine Months Ended
September 30, 2012 (a)





Net investment income (b)

$      14.8


$      37.3





Net realized investment gains

3.2


6.9

Net unrealized investment gain

11.4


23.2

Net realized and unrealized investment returns

14.6


30.1





  Total investment return

$      29.4


$      67.4





  Average total cash and invested assets (c)

$ 1,556.5


$ 1,599.5





  Total investment return % annualized

7.5%


5.6%


(a)  Amounts in this table are shown on a pre-tax basis.
(b)  Quarter to date and year to date results include $4.3 million and $4.5 million, respectively, of partnership distributions.
(c)  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 September 30,


For the Nine Months
Ended September 30,


2012


2011


2012


2011









Operating income (loss)

$  7,621


$  (34,017)


$  24,856


$  (30,388)

Adjustments:








Net realized investment gains, net of tax

2,292


595


5,523


15,560









Total after-tax adjustments

2,292


595


5,523


15,560









Net income (loss)

$    9,913


$  (33,422)


$  30,379


$  (14,828)









Weighted average shares outstanding –  basic

25,392


30,338


27,263


30,321









Weighted average shares outstanding –  diluted

25,413


30,353


27,281


30,342









Operating income (loss) per share – basic

$    0.30


$    (1.12)


$    0.91


$    (1.00)









Operating income (loss) per share – diluted

$    0.30


$    (1.12)


$    0.91


$    (1.00)












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.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Containers Expo Blog covers the world of containers, as this lightweight alternative to virtual machines enables developers to work with identical dev environments and stacks. Containers Expo Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Bookmark Containers Expo Blog ▸ Here Follow new article posts on Twitter at @ContainersExpo
The true value of the Internet of Things (IoT) lies not just in the data, but through the services that protect the data, perform the analysis and present findings in a usable way. With many IoT elements rooted in traditional IT components, Big Data and IoT isn’t just a play for enterprise. In fact, the IoT presents SMBs with the prospect of launching entirely new activities and exploring innovative areas. CompTIA research identifies several areas where IoT is expected to have the greatest impac...
There is little doubt that Big Data solutions will have an increasing role in the Enterprise IT mainstream over time. 8th International Big Data Expo, co-located with 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - has announced its Call for Papers is open. As advanced data storage, access and analytics technologies aimed at handling high-volume and/or fast moving data all move center stage, aided by the cloud computing bo...
The 4th International Internet of @ThingsExpo, co-located with the 17th International Cloud Expo - to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA - announces that its Call for Papers is open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
The 5th International DevOps Summit, co-located with 17th International Cloud Expo – being held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the...
You use an agile process; your goal is to make your organization more agile. But what about your data infrastructure? The truth is, today's databases are anything but agile - they are effectively static repositories that are cumbersome to work with, difficult to change, and cannot keep pace with application demands. Performance suffers as a result, and it takes far longer than it should to deliver new features and capabilities needed to make your organization competitive. As your application an...
Move from reactive to proactive cloud management in a heterogeneous cloud infrastructure. In his session at 16th Cloud Expo, Manoj Khabe, Innovative Solution-Focused Transformation Leader at Vicom Computer Services, Inc., will show how to replace a help desk-centric approach with an ITIL-based service model and service-centric CMDB that’s tightly integrated with an event and incident management platform. Learn how to expand the scope of operations management to service management. He will al...
Over the years, a variety of methodologies have emerged in order to overcome the challenges related to project constraints. The successful use of each methodology seems highly context-dependent. However, communication seems to be the common denominator of the many challenges that project management methodologies intend to resolve. In this respect, Information and Communication Technologies (ICTs) can be viewed as powerful tools for managing projects. Few research papers have focused on the way...
As the world moves from DevOps to NoOps, application deployment to the cloud ought to become a lot simpler. However, applications have been architected with a much tighter coupling than it needs to be which makes deployment in different environments and migration between them harder. The microservices architecture, which is the basis of many new age distributed systems such as OpenStack, Netflix and so on is at the heart of CloudFoundry – a complete developer-oriented Platform as a Service (PaaS...
The Industrial Internet revolution is now underway, enabled by connected machines and billions of devices that communicate and collaborate. The massive amounts of Big Data requiring real-time analysis is flooding legacy IT systems and giving way to cloud environments that can handle the unpredictable workloads. Yet many barriers remain until we can fully realize the opportunities and benefits from the convergence of machines and devices with Big Data and the cloud, including interoperability, ...
High-performing enterprise Software Quality Assurance (SQA) teams validate systems that are ready for use - getting most actively involved as components integrate and form complete systems. These teams catch and report on defects, making sure the customer gets the best software possible. SQA teams have leveraged automation and virtualization to execute more thorough testing in less time - bringing Dev and Ops together, ensuring production readiness. Does the emergence of DevOps mean the end of E...
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
Amazon and Google have built software-defined data centers (SDDCs) that deliver massively scalable services with great efficiency. Yet, building SDDCs has proven to be a near impossibility for companies without hyper-scale resources. In his session at 15th Cloud Expo, David Cauthron, CTO and Founder of NIMBOXX, highlighted how a mid-sized manufacturer of global industrial equipment bridged the gap from virtualization to software-defined services, streamlining operations and costs while connect...
The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete at launch. DevOps may be disruptive, but it is essential. The DevOps Summit at Cloud Expo – to be held June 3-5, 2015, at the Javits Center in New York City – will expand the DevOps community, enable a wide...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...