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 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 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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