Global Indemnity plc Reports Fourth Quarter 2013 Financial Results

      Global Indemnity plc Reports Fourth Quarter 2013 Financial Results

PR Newswire

DUBLIN, Feb. 20, 2014

DUBLIN, Feb. 20, 2014 /PRNewswire/ --Global Indemnity plc (NASDAQ:GBLI) today
reported net income for the year ended December 31, 2013 of $61.7 million or
$2.45 per share. As of December 31^st, book value per share was $34.65, an
increase of 7.8% compared to book value per share of $32.15 at December 31,
2012.

Global Indemnity plc logo.

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

                  For the Twelve                        As of
                  Months
                                                        December 31,
                  Ended December 31,
                  2013      2012                        2013        2012
Gross Premiums    $ 290.7   $ 244.1   Book value per    $  34.65  $  32.15
Written                               share
Net Premiums      $ 272.0   $ 219.5   Shareholders'     $  873.3  $  806.6
Written                               equity
                                      Cash and invested $ 1,567.4   $ 1,534.0
                                      assets
Net income        $ 61.7   $  34.8
Net income per    $ 2.45   $  1.30
share
Operating income  $ 40.5   $  29.3
Operating income  $ 1.61   $  1.10
per share

Various events occurred in 2013 and 2012 that the Company would consider
infrequent or non-routine. The table below reflects the Company's results
excluding these non-routine charges and (benefits).

                                  Net Income             Operating Income
                                  For the Twelve Months  For the Twelve Months

                                  Ended December 31,     Ended December 31,
(Dollars in millions, except per  2013         2012      2013         2012
share data)
Net/Operating income              $ 61.7       $ 34.8   $ 40.5       $ 29.3
Prepayment charge on retirement   2.9          -         2.9          -
of debt
Limited partnership distributions (0.1)        (4.8)     (0.1)        (4.8)
Sale of subsidiary                (5.2)        -         (5.2)        -
Impact of premium deficiency      1.2          (7.6)     1.2          (7.6)
adjustments
Tax effect assuming applicable    0.6          0.8       0.6          0.8
statutory rates
Adjusted net/operating income     $ 61.1       $ 23.2    $ 39.9       $ 17.7
Adjusted per share amounts        $ 2.43      $ 0.87    $ 1.58       $ 0.66

See the notes following the "Summary of Operating Income" table for
information regarding the presentation of income excluding non-routine events

Cynthia Y. Valko, Chief Executive Officer, commented: "We are pleased with
our final results for 2013. Global Indemnity's insurance and reinsurance
premium volume grew 19% compared to 2012 and our calendar year combined ratio
improved 8.2 points to 96%. Low catastrophes coupled with better pricing and
underwriting were factors in improved year over year results. Our operating
income results improved to $40.5 million for 2013 versus $29.3 million in
2012. Net income results were also enhanced by investment returns primarily
driven by strong performance of the common stock portfolio. Overall, book
value per share was $34.65, an increase of 7.8% compared to last year."

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:

  oUnited States Based Insurance Operations
  oBermuda 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 21, 2014 at 8:30 a.m.
Eastern Time to discuss the fourth quarter 2013 results.

To participate in the teleconference, please telephone (877) 260-8900 (U.S.
and Canada) or (612) 332-7516 (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 319959 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 21, 2014 until 11:59 p.m. February 21, 2015. To
listen to the replay, please telephone (800) 475-6701 (U.S. and Canada) or
(320) 365-3844 (International) then enter 319959.

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,
2013 and 2012

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

                                Twelve Months Ended
                                December 31,
                                2013      2012 (1)
Loss Ratio:
Current Accident Year
 Excluding Catastrophes       47.7      53.7
 Catastrophes                 8.9       10.4
 Current Accident Year        56.6      64.1
Changes to Prior Accident Year  (3.1)     0.2
Loss Ratio – Calendar Year      53.5      64.3
Expense Ratio                   42.5      39.9
Combined Ratio                  96.0      104.2

(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 is included
in the "Changes to Prior Accident Year" ratios.

For the twelve months ended December 31^st, the calendar year loss ratio
decreased by 10.8 points to 53.5 in 2013 from 64.3 in 2012.

For the twelve months  ended December 31, 2013, the current accident year loss
ratio improved to 56.6 compared to 64.1 for the same period in 2012. Total
calendar year results in 2013 include a 3.1 point reduction in the loss ratio
related to prior accident years, which was primarily driven by lower than
expected severity in property lines. The property accident year loss ratio
decreased 11.9 points to 43.9 in 2013 from 55.8 in 2012. 2012's results
included $12 million related to Super Storm Sandy. The casualty loss ratio,
excluding premium deficiency charges, increased 6.9 points from 74.0 to 80.9
in 2013, primarily due to poor performance in commercial auto lines. Other
casualty lines in 2013 performed comparably to 2012.

For the twelve months ended December 31^st, the expense ratio increased from
39.9 in 2012 to 42.5 in 2013.

The expense ratio for the twelve months ended December 31, 2013 and 2012 was
42.0 and 41.4, respectively excluding premium deficiency charges. The increase
is primarily due to an increase in profit commissions as a result of better
than expected performance within Reinsurance Operations.

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

(Dollars in thousands) Three Months Ended December 31,
                       Gross Premiums Written  Net Premiums Written
                       2013         2012       2013        2012
Insurance Operations   $ 59,659    $ 50,380  $  54,695  $  45,342
Reinsurance Operations 3,095        11,334     3,435       11,334
Total                  $ 62,754     $ 61,714   $ 58,130    $ 56,676



                       Twelve Months Ended December 31,
                       Gross Premiums Written  Net Premiums Written
                       2013        2012        2013         2012
Insurance Operations   $ 232,373  $ 201,790  $  213,705  $  177,832
Reinsurance Operations 58,350      42,263      58,279       41,715
Total                  $ 290,723   $ 244,053   $ 271,984    $ 219,547

Insurance Operations: For the twelve months  ended December 31, 2013, gross
premiums written and net premiums written increased 15.2% and 20.2%,
respectively, compared to the same period in 2012. Gross written premiums
increased as a result of growth in small business binding authority lines as
well as growth in the property brokerage, programs and other lines. Growth
was driven by new business, pricing increases, and increased agent
relationships. Net written premiums increased as a result of an increase in
gross premiums written and a reduction of ceded premiums written as a result
of an increase in retention in property excess of loss and property
catastrophe. For the three months  ended December 31, 2013, gross premiums
written and net premiums written increased 18.4% and 20.6%, respectively,
compared to the same period in 2012 for the same reasons as noted above.

Reinsurance Operations: For the twelve months ended December 31, 2013, gross
premiums written and net premiums written increased 38.1% and 39.7%,
respectively, compared to the same periods in 2012. These increases were
primarily due to several new treaties written during 2013. For the three
months ended December 31, 2013, gross premiums written and net premiums
written decreased 72.7% and 69.7%, respectively, compared to the same periods
in 2012. 2012 included a premium increase of $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.

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)
                              2013         2012 (5)    2013         2012 (5)
Gross premiums written        $ 62,754    $ 61,714   $ 290,723   $ 244,053
Net premiums written          $ 58,130    $ 56,676   $ 271,984   $ 219,547
Net premiums earned           $ 69,586    $ 61,204   $ 248,722   $ 238,862
Net investment income         8,924        10,292      37,209       47,557
Net realized investment gains 17,208       (158)       27,412       6,755
(losses)
Other income (loss)           5,307        133         5,791        (158)
 Total revenues           101,025      71,471      319,134      293,016
Net losses and loss           30,796       40,054      132,991      153,628
adjustment expenses
Acquisition costs and other   28,674       25,253      105,651      95,403
underwriting expenses
Corporate and other operating 4,170        2,828       11,614       9,691
expenses
Interest expense              230          1,180       6,169        5,393
 Income before income     37,155       2,156       62,709       28,901
taxes
Income tax expense (benefit)  3,442        (2,222)     1,019        (5,856)
 Net income               $ 33,713     4,378       $ 61,690     34,757
Weighted average shares       25,094       25,113      25,073       26,723
outstanding–basic
Weighted average shares       25,218       25,141      25,174       26,749
outstanding–diluted
Net income per share – basic  $  1.34    $  0.17   $  2.46    $  1.30
Net income per share –        $  1.34    $  0.17   $  2.45    $  1.30
diluted
Combined ratio analysis: (1)
Loss ratio (2)                44.3         65.4        53.5         64.3
Expense ratio (3)             41.2         41.3        42.5         39.9
Combined ratio (4)            85.5         106.7       96.0         104.2

(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.

(2) Excluding the impact of the 2011 premium deficiency charges, the loss
ratio was 65.5% and 66.0% for the three months and twelve months ended
December 31, 2012, respectively.

(3) Excluding the impact of 2011 and 2013 premium deficiency charges, the
expense ratio was 41.2% and 40.6% for the three months ended December 31, 2013
and 2012, respectively. Excluding the impact of 2011 and 2013 premium
deficiency charges, the expense ratio was 42.0% and 41.4% for the twelve
months ended December 31, 2013 and 2012, respectively.

(4) Excluding the impact of the 2011 and 2013 premium deficiency charges,
the combined ratio was 85.5 and 106.1 for the three months ended December 31,
2013 and 2012, respectively. Excluding the impact of the 2011 and 2013
premium deficiency charges, the combined ratio was 95.5% and 107.4% for the
twelve months ended December 31, 2013 and 2012, respectively.

(5) 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.

GLOBAL INDEMNITY PLC
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
                                                  (Unaudited)
                                                                  December 31,
ASSETS                                             December 31,   2012
                                                   2013
Fixed Maturities:
      Available for sale securities, at fair
      value
                                                   $  1,204,364  $ 1,229,322
      (amortized cost: 2013 - $1,187,685 and 2012
      - $1,187,094)
Equity securities:
      Available for sale, at fair value
                                                   254,070        197,075
      (cost: 2013 - $191,425 and 2012 - $167,179)
Other invested assets:
      Available for sale securities, at fair                      
      value                                        3,489
                                                                  3,132
      (cost: 2013 - $3,065 and 2012 - $3,049)
               Total investments              1,461,923      1,429,529
Cash and cash equivalents                          105,492        104,460
Premiums receivable, net                           49,888         37,752
Reinsurance receivables, net                       197,887        241,827
Funds held by ceding reinsurers                    18,662         7,410
Federal income taxes receivable                    -              6,844
Deferred federal income taxes                      4,206          10,824
Deferred acquisition costs                         22,177         18,265
Intangible assets                                  17,990         18,343
Goodwill                                           4,820          4,820
Prepaid reinsurance premiums                       5,199          5,945
Receivable for securities sold                     723            -
Other assets                                       22,812         17,684
              Total assets                         $ 1,911,779    $ 1,903,703
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Unpaid losses and loss adjustment expenses         $ 779,466      $ 879,114
Unearned premiums                                  116,629        94,114
Federal income taxes payable                       1,595          -
Ceded balances payable                             5,177          4,201
Contingent commissions                             12,677         9,911
Payable for securities purchased                   -              2,634
Margin borrowing facility                          100,000        -
Notes and debentures payable                       -              84,929
Other liabilities                                  22,955         22,182
              Total liabilities                    1,038,499      1,097,085
Shareholders' equity:
Ordinary shares, $0.0001 par value, 900,000,000
ordinary shares authorized; A ordinary shares
issued: 16,200,406 and 16,087,939 respectively; A
ordinary shares outstanding: 13,141,035 and        3              3
13,030,938, respectively; B ordinary shares
issued and outstanding: 12,061,370 and
12,061,370, respectively
Additional paid-in capital                         516,653        512,304
Accumulated other comprehensive income, net of     54,028         53,350
taxes
Retained earnings                                  403,861        342,171
A ordinary shares in treasury, at cost: 3,059,371  (101,265)      (101,210)
and 3,057,001 shares, respectively
              Total shareholders' equity           873,280        806,618
              Total liabilities and shareholders'  $ 1,911,779    $ 1,903,703
              equity



GLOBAL INDEMNITY PLC
SELECTED INVESTMENT DATA
(Dollars in millions)
                                          Market Value as of
                                          (Unaudited)        

                                          December 31, 2013  December 31, 2012
Fixed Maturities                          $ 1,204.4          $ 1,229.3
Cash and cash equivalents                 105.5              104.5
Total bonds and cash and cash equivalents 1,309.9            1,333.8
Equities and other invested assets        257.5              200.2
Total cash and invested assets, gross     1,567.4            1,534.0
Receivable / (payable) for securities     0.7                (2.6)
Total cash and invested assets, net      $ 1,568.1          $ 1,531.4



                                               (Unaudited)

                                               Twelve Months Ended

                                               December 31, 2013 (a)
Net investment income                          $   37.2
Net realized investment gains                  27.4
Net unrealized investment gain                 7.3
Net realized and unrealized investment returns 34.7
 Total investment return                     $    71.9
 Average total cash and invested assets (b)  $ 1,549.7
 Total investment return %                   4.6%

(a) Amounts in this table are shown on a pre-tax basis.

(b) 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,
                                   2013       2012 (2)   2013        2012 (1)
Operating income                   $ 19,132  $ 4,453   $ 40,453   $ 29,309
Adjustments:
Net realized investment gains, net 11,223     (75)       17,879      5,448
of tax
Gain on disposition of subsidiary, 3,358      -          3,358       -
net of tax
Total after-tax adjustments        14,581     (75)       21,237      5,448
Net income                         $ 33,713  $ 4,378   $ 61,690   $ 34,757
Weighted average shares            25,094     25,113     25,073      26,723
outstanding –basic
Weighted average shares            25,218     25,141     25,174      26,749
outstanding –diluted
Operating income per share – basic $  0.76   $  0.18  $  1.61   $  1.10
Operating income per share –       $  0.76   $  0.18  $  1.61   $  1.10
diluted

(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) and after-tax gain
on disposition of subsidiary. Operating income is not a substitute for net
income determined in accordance with GAAP, and investors should not place
undue reliance on this measure.

Note Regarding Presentation of Income Excluding Non-Routine Events

The presentation of income excluding non-routine events, including adjusted
net income, adjusted operating income and adjusted per share amounts metrics,
is a non-GAAP financial measure. These metrics were presented to show
comparable results between periods without the impact of non-routine events.
It 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
(610) 660-6862
lhohn@global-indemnity.com

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

SOURCE Global Indemnity plc

Website: http://www.globalindemnity.ie
 
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