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 31st, 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.  (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                                 As of                     Ended December 31,                        December 31,                      2013      2012                        2013       2012 Gross Premiums                         Book value per Written             $ 290.7   $ 244.1  share              $ 34.65   $ 32.15 Net Premiums                           Shareholders' Written             $ 272.0   $ 219.5  equity             $ 873.3   $ 806.6                                        Cash and invested                                        assets            $ 1,567.4  $ 1,534.0 Net income           $ 61.7   $ 34.8 Net income per share                $ 2.45   $ 1.30 Operating income     $ 40.5   $ 29.3 Operating income per share            $ 1.61   $ 1.10  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 share data)                        2013         2012      2013         2012 Net/Operating income                $ 61.7      $ 34.8     $ 40.5      $ 29.3 Prepayment charge on retirement of debt                                2.9           -        2.9           - Limited partnership distributions                        (0.1)       (4.8)      (0.1)       (4.8) Sale of subsidiary                   (5.2)           -      (5.2)           - Impact of premium deficiency adjustments                            1.2       (7.6)        1.2       (7.6) Tax effect assuming applicable statutory rates                        0.6         0.8        0.6         0.8 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:    *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 21, 2014 at 8:30 a.m. Eastern Time to discuss the fourth quarter 2013 results.  To participate in the teleconference, please telephone +1-877-260-8900 (U.S. and Canada) or +1-612-332-7516 (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 +1-800-475-6701 (U.S. and Canada) or +1-320-365-3844 (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 31st, 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 31st, 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 Ended  For the Twelve Months                                   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 (losses)                    17,208        (158)       27,412      6,755 Other income (loss)                5,307          133        5,791      (158)  Total revenues              101,025       71,471      319,134    293,016 Net losses and loss adjustment expenses               30,796       40,054      132,991    153,628 Acquisition costs and other underwriting expenses                          28,674       25,253      105,651     95,403 Corporate and other operating expenses                 4,170        2,828       11,614      9,691 Interest expense                     230        1,180        6,169      5,393  Income before income taxes                             37,155        2,156       62,709     28,901 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 outstanding–basic                 25,094       25,113       25,073     26,723 Weighted average shares outstanding–diluted               25,218       25,141       25,174     26,749 Net income per share – basic                            $ 1.34      $ 0.17      $ 2.46    $ 1.30 Net income per share – diluted                          $ 1.34      $ 0.17      $ 2.45    $ 1.30 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,  December 31, ASSETS                                                 2013          2012 Fixed Maturities:          Available for sale securities, at fair          value           (amortized cost: 2013 - $1,187,685 and          2012 - $1,187,094)                        $ 1,204,364   $ 1,229,322 Equity securities:          Available for sale, at fair value           (cost: 2013 - $191,425 and 2012 -          $167,179)                                      254,070       197,075 Other invested assets:          Available for sale securities, at fair          value           (cost: 2013 - $3,065 and 2012 - $3,049)          3,489         3,132           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 13,030,938, respectively; B ordinary shares issued and outstanding: 12,061,370 and 12,061,370, respectively                                      3             3 Additional paid-in capital                              516,653       512,304 Accumulated other comprehensive income, net of taxes                                                    54,028        53,350 Retained earnings                                       403,861       342,171 A ordinary shares in treasury, at cost: 3,059,371 and 3,057,001 shares, respectively                    (101,265)     (101,210)           Total shareholders' equity               873,280       806,618           Total liabilities and          shareholders' equity                       $ 1,911,779   $ 1,903,703                              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 of tax                           11,223       (75)     17,879       5,448 Gain on disposition of subsidiary, net of tax                3,358          -      3,358           - Total after-tax adjustments          14,581       (75)     21,237       5,448 Net income                         $ 33,713    $ 4,378   $ 61,690    $ 34,757 Weighted average shares outstanding –basic                  25,094     25,113     25,073      26,723 Weighted average shares outstanding –diluted                25,218     25,141     25,174      26,749 Operating income per share – basic                               $ 0.76    $ 0.18    $ 1.61     $ 1.10 Operating income per share – diluted                             $ 0.76    $ 0.18    $ 1.61     $ 1.10  (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 HohnAssociate General Counsel +1-610-660-6862 lhohn@global-indemnity.com   Website: http://www.globalindemnity.ie