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Global Indemnity plc Reports Fourth Quarter 2012 Financial Results

      Global Indemnity plc Reports Fourth Quarter 2012 Financial Results

  PR Newswire

  DUBLIN, Ireland, Feb. 25, 2013

DUBLIN, Ireland, Feb. 25, 2013 /PRNewswire/ -- Global Indemnity plc (NASDAQ:
GBLI) today reported net income for the year ended December 31, 2012 of $34.8
million or $1.30 per share. As of December 31st, book value per share was
$32.15, an increase of 10.6% compared to book value per share of $29.06 at
December 31, 2011.

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

Selected Operating and Balance Sheet Data (Dollars in millions, except per
share data)
                  For the Twelve Months
                   Ended December 31,                     As of December 31,
                    2012        2011                       2012     2011 (2)
                                         Book Value per        $         $ 
                                         share              32.15     29.06
Gross Premiums                           Shareholders'         $         $ 
Written             $ 244.1    $ 307.9  equity             806.6     839.1
Net Premiums                             Cash and
Written             $ 219.5    $ 280.6  invested assets $ 1,534.0  $ 1,647.7
Net income (loss)
(1)(2)             $  34.8   $ (38.3)
Net income (loss)
per share (1)(2)   $  1.30   $ (1.27)
Operating income
(loss) (1)(2)      $  29.3   $ (53.1)
Operating income
(loss) per share
(1)(2)             $  1.10   $ (1.76)

(1) Results include the impact of an out-of-period adjustment which reduced
    net income and operating income by $1.6 million, or $0.06 per diluted
    share.
(2) 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, "During 2012, in our
domestic primary insurance business, we continued executing upon our long-term
strategy focused on serving small business entrepreneurs as well as further
contracting in lines where we were not providing a differentiated product.
Also during 2012, we further expanded our international business that is
focused on providing catastrophe reinsurance."

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 theGlobal 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 February 26, 2013 at 8:30a.m. Eastern
Time to discuss the fourth quarter 2012 results. 

The Company will release its earnings after the close of business on February
25, 2013.

To participate in the teleconference, please telephone (800) 230-1074 (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 283460 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 February 26, 2013 until 11:59 p.m.March 26, 2013. To listen to
the replay, please telephone (800) 475-6701 (U.S. and Canada) or (320)
365-3844 (International) then enter 283460.

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 Twelve Months Ended December 31
, 2012 and 2011

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

                               Twelve Months Ended

                                  December 31,
                                2012 (1)     2011
Loss Ratio:
Current Accident Year
 Excluding Catastrophes             53.7     75.8
 Catastrophes                       10.4     16.6
 Current Accident Year              64.1     92.4
Changes to Prior Accident Year        0.2      1.1
Loss Ratio – Calendar Year           64.3     93.5
Expense Ratio                        39.9     40.8
Combined Ratio                      104.2    134.3

(1) Net premiums earned includes $6.0 million related to reinsurance treaties
    written in 2009 and 2010 that became due as a result of additional losses
    incurred on these treaties. The impact of these premiums are included in
    the "Changes to Prior Accident Year" ratios.

For the twelve months ended December 31st, the calendar year loss ratio
improved by 29.2 points to 64.3 in 2012 from 93.5 in 2011.

  *Excluding catastrophes, the current accident year loss ratio improved by
    22.1 points to 53.7 in 2012 from 75.8 in 2011. 

       *Excluding catastrophes, the property loss ratio improved by 6.7
         points from 43.7 in the fourth quarter of 2011 to 37.0 in the fourth
         quarter of 2012. Including catastrophes, the property loss ratio
         improved by 25.9 points to 55.8 in 2012 from 81.7 in 2011. Results
         for 2012 included $12 million related to Super Storm Sandy while 2011
         included Hurricane Irene and Tropical Storm Lee.
       *The casualty loss ratio improved by 26.4 points to 74.3 in 2012 from
         100.7 in 2011. The improvement is mainly attributable to actions
         taken to increase profitability that were implemented in the latter
         half of 2011.

  *Current year results include a 0.2 point increase in the loss ratio
    related to prior accident years. This increase was mainly related to the
    Reinsurance Operations and resulted primarily from unfavorable emergence
    in workers compensation and marine lines partially offset by favorable
    emergence in property lines.

For the twelve months ended December 31st, the expense ratio decreased from
40.8 in 2011 to 39.9 in 2012.

  *The expense ratio decreased primarily due to changes in the mix of
    business in the Reinsurance Operations.
  *Corporate expenses decreased $4.3 million mainly due to a decrease in
    outside legal and other professional fees.

Global Indemnity plc's Three Months Ended December 31 , 2012 and 2011 Gross
and Net Premiums Written Results by Business Unit

(Dollars in thousands)        Three Months Ended December 31,
                       Gross Premiums Written  Net Premiums Written
                          2012        2011       2012       2011
Insurance Operations    $ 50,380   $ 47,046  $ 45,342  $ 40,984
Reinsurance Operations     11,334       5,137     11,334      5,137
Total                   $ 61,714   $ 52,183  $ 56,676  $ 46,121

Insurance Operations:  For the three months ended December 31, 2012, gross
premiums written increased 7.1%, and net premiums written increased 10.6%,
compared to the same period in 2011. This was primarily driven by increases
in the Company's small business, commercial auto and property brokerage
classes.

Reinsurance Operations:  For the three months ended December 30, 2012, gross
and net premiums written increased 120.6% compared to the same period in 2011.
This increase is primarily due to a $6.0 million premium adjustment that
became due as a result of adverse loss development on two workers compensation
treaties that were written in 2009 and 2010.

Global Indemnity plc's Twelve Months Ended December 31 , 2012 and 2011 Gross
and Net Premiums Written Results by Business Unit

(Dollars in thousands)        Twelve Months Ended December 31,
                       Gross Premiums Written   Net Premiums Written
                          2012        2011        2012        2011
Insurance Operations   $ 201,790  $ 229,148  $ 177,832  $ 202,317
Reinsurance Operations     42,263      78,755      41,715      78,253
Total                  $ 244,053  $ 307,903  $ 219,547  $ 280,570

Insurance Operations:  For the twelve months ended December 31, 2012, gross
premiums written decreased 11.9%, and net premiums written decreased 12.1%,
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 twelve months ended December 31, 2012, gross
premiums written decreased 46.3%, and net premiums written decreased 46.7%,
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

          (Dollars and shares in thousands, except per share data)
                              For the Three Months     For the Twelve Months

                               Ended December 31,       Ended December 31,
                            (Unaudited)               (Unaudited)

                             2012 (1)       2011       2012 (1)       2011
Gross premiums written        $ 61,714    $ 52,183   $ 244,053  $ 307,903
Net premiums written          $ 56,676    $ 46,121   $ 219,547  $ 280,570
Net premiums earned           $ 61,204    $ 66,740   $ 238,862  $ 297,854
Net investment income            10,292       11,888       47,557      53,112
Net realized investment
gains (losses)                    (158)        (198)        6,755      21,473
Other income (loss)                 133           42        (158)      12,581
  Total revenues               71,471       78,472      293,016     385,020
Net losses and loss
adjustment expenses              40,054       72,355      153,628     278,684
Acquisition costs and other
underwriting expenses            25,253       28,681       95,403     121,491
Corporate and other
operating expenses                2,828        3,104        9,691      13,973
Interest expense                  1,180        1,456        5,393       6,476
  Income (loss) before
income taxes                      2,156     (27,124)       28,901    (35,604)
Income tax expense
(benefit)                       (2,222)      (3,614)      (5,856)       2,787
Net income (loss) before
equity in net income of
partnership                       4,378     (23,510)       34,757    (38,391)
Equity in net income of
partnership, net of tax               -            -            -          53
  Net income (loss)           $ 4,378   $ (23,510)     $ 34,757  $ (38,338)
Weighted average shares
outstanding–basic                25,113       29,995       26,723      30,246
Weighted average shares
outstanding–diluted              25,141       29,995       26,749      30,246
Net income (loss) per share                                               $ 
– basic                       $  0.17  $  (0.78)    $  1.30     (1.27)
Net income (loss) per share                                               $ 
– diluted                     $  0.17  $  (0.78)    $  1.30     (1.27)
Combined ratio analysis:
(2)
Loss ratio                         65.4        108.4         64.3        93.5
Expense ratio                      41.3         43.0         39.9        40.8
Combined ratio                    106.7        151.4        104.2       134.3

(1) Results for the quarter and year to date 2012 include the impact of an
    out-of-period adjustment which reduced net income by $1.6 million, or
    $0.06 per diluted share.
(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

                           (Dollars in thousands)
ASSETS                                           (Unaudited)     December 31,
                                              December 31, 2012    2011 (1)
Fixed Maturities:
       Available for sale securities, at
       fair value(amortized cost: 2012 -
       $1,187,094 and 2011 - $1,258,533)            $ 1,229,322   $ 1,296,885
Equity securities:
       Available for sale, at fair
       value(cost: 2012 - $167,179 and 2011
       - $155,390)                                      197,075       168,361
Other invested assets:
       Available for sale securities, at
       fair value (cost: 2012 - $3,049 and
       2011 - $4,150)                                     3,132         6,617
         Total investments                         1,429,529     1,471,863
Cash and cash equivalents                               104,460       175,860
Premiums receivable, net                                 45,162        47,844
Reinsurance receivables                                 241,827       287,986
Deferred federal income taxes                            10,824        14,642
Deferred acquisition costs                               18,265        21,564
Intangible assets                                        18,343        18,704
Goodwill                                                  4,820         4,820
Prepaid reinsurance premiums                              5,945         6,555
Receivable for securities sold                                -         1,484
Federal income taxes receivable                           6,844         2,223
Other assets                                             17,684        19,371
       Total assets                                 $ 1,903,703   $ 2,072,916
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Unpaid losses and loss adjustment expenses         $  879,114  $  971,377
Unearned premiums                                        94,114       114,041
Ceded balances payable                                    4,201         8,887
Contingent commissions                                    9,911         7,473
Payable for securities purchased                          2,634             -
Notes and debentures payable                             84,929       103,000
Other liabilities                                        22,182        29,075
       Total liabilities                              1,097,085     1,233,853
Shareholders' equity:
Ordinary shares, $0.0001 par value,                           3             3
900,000,000 ordinary shares authorized; A
ordinary shares issued: 16,087,939 and
21,429,683 respectively; A ordinary shares
outstanding: 13,030,938 and 16,810,678,
respectively; B ordinary shares issued and
outstanding: 12,061,370 and 12,061,370,
respectively
Additional paid-in capital                              512,304       621,917
Accumulated other comprehensive income, net              53,350        40,174
of taxes
Retained earnings                                       342,171       307,413
A ordinary shares in treasury, at cost:               (101,210)     (130,444)
3,057,001 and 4,619,005 shares, respectively
       Total shareholders' equity                       806,618       839,063
       Total liabilities and shareholders'          $ 1,903,703   $ 2,072,916
       equity

(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)

                                         December 31, 2012  December 31, 2011
Fixed Maturities                                 $ 1,229.3          $ 1,296.9
Cash and cash equivalents                            104.5              175.8
Total bonds and cash and cash
equivalents                                        1,333.8            1,472.7
Equities and other invested assets                   200.2              175.0
Total cash and invested assets, gross              1,534.0            1,647.7
Receivable / (payable) for securities                (2.6)                1.5
Total cash and invested assets, net             $ 1,531.4          $ 1,649.2

                                                    (Unaudited)

                                                Twelve Months Ended

                                               December 31, 2012 (a)
Net investment income (b)                                $   47.5
Net realized investment gains                                    6.8
Net unrealized investment gain                                  18.4
Net realized and unrealized investment returns                  25.2
 Total investment return                              $    72.7
 Average total cash and invested assets (c)               $ 1,590.3
 Total investment return %                                     4.6%

(a) Amounts in this table are shown on a pre-tax basis.
(b) Includes $4.8 million 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     For the Twelve Months

                               Ended December 31,       Ended December 31,
                              2012 (1)      2011      2012 (1)      2011
Operating income (loss)        $ 4,453  $ (22,761)  $ 29,309  $ (53,149)
Adjustments:
Net realized investment
gains (losses), net of tax         (75)        (749)      5,448       14,811
Total after-tax adjustments        (75)        (749)      5,448       14,811
Net income (loss)            $  4,378  $ (23,510)  $ 34,757  $ (38,338)
Weighted average shares
outstanding – basic              25,113       29,995     26,723       30,246
Weighted average shares
outstanding – diluted            25,141       29,995     26,749       30,246
Operating income (loss) per
share – basic                 $  0.18  $  (0.76)  $  1.10  $  (1.76)
Operating income (loss) per
share – diluted               $  0.18  $  (0.76)  $  1.10  $  (1.76)

(1) Results for the quarter and year to date 2012 include the impact of an
    out of period adjustment which reduced net income and operating income by
    $1.6 million, or $0.06 per diluted share.

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

Website: http://www.globalindemnity.ie
 
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