DUBLIN, Aug. 3 /PRNewswire-FirstCall/ -- Global Indemnity plc today reported net income for the three months ended June 30, 2010 of $24.5 million or $0.81 per share compared to net income of $16.3 million or $0.64 per share for the same period in 2009. Results for the six months ended June 30, 2010 include net income of $43.4 million or $1.44 per share compared to net income of $23.4 million or $1.09 per share for the same period of 2009. Operating income for the three months ended June 30, 2010 was $20.7 million or $0.69 per share compared to operating income of $12.7 million or $0.50 per share for the same period of 2009. Operating income for the six months ended June 30, 2010 was $28.6 million or $0.95 per share compared to operating income of $26.2 million or $1.22 per share for the same period of 2009.
(Logo: http://photos.prnewswire.com/prnh/20100803/LT45156LOGO ) (Logo: http://www.newscom.com/cgi-bin/prnh/20100803/LT45156LOGO ) (Dollars in millions, except per share data) For the Three Months Ended June 30, -------------- 2010 2009 ---- ---- Net income $24.5 $16.3 Net income per share $0.81 $0.64 Operating income $20.7 $12.7 Operating income per share $0.69 $0.50 (Dollars in millions, except per share data) For the Six Months Ended June 30, 2010 2009 ---- ---- Net income $43.4 $23.4 Net income per share $1.44 $1.09 Operating income $28.6 $26.2 Operating income per share $0.95 $1.22
Operating income, a non-GAAP financial measure, is equal to net income excluding after-tax net realized investment gains / (losses). A reconciliation of operating income is set forth at the end of this press release.
(Dollars in millions, except per share amounts) As of As of June 30, March 31, 2010 2010 ---- ---- Book value per share $28.73 $28.05 Shareholders' equity $872.3 $850.6 Cash and invested assets $1,683.5 $1,731.1 (Dollars in millions, except per share amounts) As of December 31, 2009 ---- Book value per share $27.48 Shareholders' equity $832.0 Cash and invested assets $1,731.3 Selected Financial Data for the Three Months Ended June 30, 2010: -- Net income of $24.5 million or $0.81 per share. -- Operating income of $20.7 million or $0.69 per share. -- Gross premiums written of $92.1 million. -- Current accident year combined ratio of 101.9. -- Calendar year combined ratio of 82.5. -- After tax investment return of 2.9%, including $3.8 million of realized investment gains, net of tax. -- Shareholders' equity growth of 2.6%. -- Book value per share growth of 2.4%. Selected Financial Data for the Six Months Ended June 30, 2010: -- Net income of $43.4 million or $1.44 per share. -- Operating income of $28.6 million or $0.95 per share. -- Gross premiums written of $184.9 million. -- Current accident year combined ratio of 102.7. -- Calendar year combined ratio of 91.9. -- After tax investment return of 4.1%, including $14.8 million of realized investment gains, net of tax. -- Shareholders' equity growth of 4.8%. -- Book value per share growth of 4.6%.
Global Indemnity plc's Combined Ratio for the Three Months Ended June 30, 2010 and 2009
The combined ratio is a key measure of insurance profitability. The components comprising the combined ratio are as follows:
Three Months Ended June 30, --------------------------- 2010 2009 ---- ---- Loss Ratio: Current Accident Year 64.9 61.8 Changes to Prior Accident Year (21.2) (2.9) ----- ---- Loss Ratio - Calendar Year 43.7 58.9 Expense Ratio 38.8 40.1 ---- ---- Combined Ratio 82.5 99.0 ---- ----
For the three months ended June 30th, the calendar year loss ratio decreased by 15.2 points to 43.7 points in 2010 from 58.9 points in 2009.
-- The current accident year loss ratio increased by 3.1 points to 64.9 points in 2010 from 61.8 in 2009. -- The property loss ratio increased by 8.4 points to 60.3 points in 2010 from 51.9 points in 2009 primarily due to increased frequency of storms and higher reinsurance costs. -- The casualty loss ratio improved 0.8 points to 68.5 points in 2010 from 69.3 points in 2009 due primarily to the growth and improved performance of the casualty business in reinsurance operations and improved performance of the casualty business in insurance operations. -- Current year results include an 18.3 point reduction in the loss ratio due to better than anticipated emergence of $15.8 million of loss and loss adjustment expenses in the insurance operation's casualty lines.
For the three months ended June 30th, the expense ratio decreased from 40.1 points in 2009 to 38.8 points in 2010.
-- The expense ratio decrease is mainly attributable to an increase in business from reinsurance operations, which has a lower expense ratio than insurance operations. Global Indemnity plc's Three Months Ended June 30, 2010 and 2009 Gross and Net Premiums Written Results by Business Unit (Dollars in thousands) Three Months Ended June 30, Gross Premiums Written ---------------------- 2010 2009 ---- ---- Insurance Operations $61,531 $72,687 Reinsurance Operations 30,519 18,793 ------ ------ Total $92,050 $91,480 ======= ======= (Dollars in thousands) Three Months Ended June 30, Net Premiums Written -------------------- 2010 2009 ---- ---- Insurance Operations $49,011 $58,791 Reinsurance Operations 30,512 18,687 ------ ------ Total $79,523 $77,478 ======= =======
Insurance Operations: Gross premiums written for the three months ended June 30, 2010 decreased 15.3%, and net premiums written for the three months ended June 30, 2010 decreased 16.6%, compared to the same period in 2009. The reduction in gross premium is comprised mainly of the following:
-- $3.4 million due to terminated programs and agents. -- Price decreases in aggregate of approximately 2.7%. -- Continued soft market conditions.
Reinsurance Operations: Gross premiums written for the three months ended June 30, 2010 increased 62.4%, and net premiums written increased 63.3%, compared to the same period in 2009. The increase in gross and net premiums written is primarily due to new excess of loss and quota share treaties.
Global Indemnity plc's Combined Ratio for the Six Months Ended June 30, 2010 and 2009 The combined ratio is a key measure of insurance profitability. The components comprising the combined ratio are as follows: Six Months Ended June 30, ------------------------- 2010 2009 ---- ---- Loss Ratio: Current Accident Year 64.0 61.8 Changes to Prior Accident Year (12.8) (1.9) ----- ---- Loss Ratio - Calendar Year 51.2 59.9 Expense Ratio 40.7 39.7 ---- ---- Combined Ratio 91.9 99.6 ==== ====
For the six months ended June 30th, the calendar year loss ratio decreased by 8.7 points to 51.2 points in 2010 from 59.9 points in 2009.
-- The current accident year loss ratio increased by 2.2 points to 64.0 points in 2010 from 61.8 in 2009. -- The property loss ratio increased by 6.4 points to 58.6 points in 2010 from 52.2 points in 2009 primarily due to increased frequency of storms and higher reinsurance costs. -- The casualty loss ratio improved 0.6 points to 68.1 points in 2010 from 68.7 points in 2009 due primarily to the growth and improved performance of the casualty business in reinsurance operations and improved performance of the casualty business in insurance operations. -- Current year results include a 10.9 point reduction in the loss ratio due to better than anticipated emergence of $17.9 million primarily in the insurance operation's casualty lines and $0.8 million in the reinsurance operations property lines.
For the six months ended June 30th, the expense ratio increased from 39.7 points in 2009 to 40.7 points in 2010.
-- The expense ratio increase is mainly attributable to a decline in net premiums earned and the incurrence of infrastructure costs related to new product development, information technology upgrades, and redomestication expenses, partially offset by an increase in business from reinsurance operations, which has a lower expense ratio than insurance operations. Global Indemnity plc's Six Months Ended June 30, 2010 and 2009 Gross and Net Premiums Written Results by Business Unit (Dollars in thousands) Six Months Ended June 30, Gross Premiums Written ---------------------- 2010 2009 ---- ---- Insurance Operations $115,602 $140,307 Reinsurance Operations 69,301 50,361 ------ ------ Total $184,903 $190,668 ======== ======== (Dollars in thousands) Six Months Ended June 30, Net Premiums Written -------------------- 2010 2009 ---- ---- Insurance Operations $92,489 $114,260 Reinsurance Operations 68,515 49,831 ------ ------ Total $161,004 $164,091 ======== ========
Insurance Operations: Gross premiums written for the six months ended June 30, 2010 decreased 17.6%, and net premiums written for the six months ended June 30, 2010 decreased 19.1%, compared to the same period in 2009. The reduction in gross premium is comprised mainly of the following:
-- $6.5 million due to terminated programs and agents. -- Price decreases in aggregate of approximately 2.5%. -- Continued soft market conditions.
Reinsurance Operations: Gross premiums written for the six months ended June 30, 2010 increased 37.6%, and net premiums written increased 37.5%, compared to the same period in 2009. The increase in gross and net premiums written is primarily due to new excess of loss and quota share treaties.
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 June 30, -------------- 2010 2009 ---- ---- Gross premiums written $92,050 $91,480 ======= ======= Net premiums written $79,523 $77,478 ======= ======= Net premiums earned $74,702 $74,732 Investment income, net 13,941 16,605 Net realized investment gains (losses) 5,597 5,398 Other income 342 - --- --- Total revenues 94,582 96,735 Net losses and loss adjustment expenses 32,675 44,047 Acquisition costs and other underwriting expenses 29,008 29,972 Corporate and other operating expenses 5,063 3,663 Interest expense 1,833 1,832 ----- ----- Income before income taxes 26,003 17,221 Income tax expense 1,491 2,758 ----- ----- Net income before equity in net income (loss) of partnership 24,512 14,463 Equity in net income (loss) of partnership, net of tax - 1,798 --- ----- Net income $24,512 $16,261 ======= ======= Weighted average shares outstanding-basic 30,207 25,401 ====== ====== Weighted average shares outstanding-diluted 30,237 25,420 ====== ====== Net income per share - basic $0.81 $0.64 ===== ===== Net income per share - diluted $0.81 $0.64 ===== ===== Combined ratio analysis: Loss ratio 43.7 58.9 Expense ratio 38.8 40.1 ---- ---- Combined ratio 82.5 99.0 ==== ==== For the Six Months Ended June 30, -------------- 2010 2009 ---- ---- Gross premiums written $184,903 $190,668 ======== ======== Net premiums written $161,004 $164,091 ======== ======== Net premiums earned $145,490 $153,272 Investment income, net 28,520 38,782 Net realized investment gains (losses) 19,801 (3,198) Other income 342 - --- --- Total revenues 194,153 188,856 Net losses and loss adjustment expenses 74,464 91,787 Acquisition costs and other underwriting expenses 59,156 60,786 Corporate and other operating expenses 9,959 7,638 Interest expense 3,572 3,686 Income before income taxes 47,002 24,959 Income tax expense 3,560 3,481 ----- ----- Net income before equity in net income (loss) of partnership 43,442 21,478 Equity in net income (loss) of partnership, net of tax (29) 1,933 --- ----- Net income $43,413 $23,411 ======= ======= Weighted average shares outstanding-basic 30,196 21,482 ====== ====== Weighted average shares outstanding-diluted 30,219 21,499 ====== ====== Net income per share - basic $1.44 $1.09 ===== ===== Net income per share - diluted $1.44 $1.09 ===== ===== Combined ratio analysis: Loss ratio 51.2 59.9 Expense ratio 40.7 39.7 ---- ---- Combined ratio 91.9 99.6 ==== ====
In computing the basic and diluted weighted share counts the number of shares outstanding prior to May 5, 2009 (the date that the common stock was issued in conjunction with the stockholders' rights offering) was adjusted by a factor of 1.114 to reflect the impact of a bonus element associated with the rights offering in accordance with GAAP.
Per share amounts have been restated to reflect the 1-for-2 stock exchange effective July 2, 2010 when the Company completed its redomestication to Ireland.
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 (Unaudited) (Dollars in thousands) As of ASSETS June 30, 2010 ---- Bonds: Available for sale securities, at fair value $1,480,834 (amortized cost: 2010 -$1,427,771 and 2009 - $1,423,052) Preferred shares: Available for sale securities, at fair value 2,098 (cost: 2010 - $930 and 2009 - $1,509) Common shares: Available for sale securities, at fair value 89,029 (cost: 2010 - $86,838 and 2009 - $50,709) Other invested assets: Available for sale securities, at fair value (cost: 2010 - $4,255 and 2009 - $4,323) Securities classified as trading, at fair value 5,390 (cost: 2010 - $1,100 and 2009 - $1,145) ----- 1,100 ----- Total investments 1,578,451 Cash and cash equivalents 105,097 Agents' balances 70,483 Reinsurance receivables 485,636 Federal income taxes receivables 3,795 Deferred federal income taxes 16,134 Deferred acquisition costs 34,727 Goodwill 4,820 Intangible assets 19,271 Prepaid reinsurance premiums 11,727 Other assets 26,076 ------ Total assets $2,356,217 ---------- LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Unpaid losses and loss adjustment expenses $1,168,759 Unearned premiums 142,278 Ceded balances payable 4,769 Contingent commissions 5,927 Notes and debentures payable 121,427 Payable for securities 8,968 Other liabilities 31,821 ------ Total liabilities 1,483,949 --------- Shareholders' equity: Common shares, $0.0001 par value, 450,000,000 common shares authorized; Class A common shares issued: 21,340,929 and 21,243,345 respectively; Class A common shares outstanding: 18,302,169 and 18,215,239, respectively; Class B common shares issued and outstanding: 12,061,372 and 12,061,372, respectively 3 Additional paid-in capital 621,294 Accumulated other comprehensive income 43,702 Class A common shares in treasury, at cost: 3,038,760 and 3,028,106 shares, respectively (100,883) Retained earnings 308,152 ------- Total shareholders' equity 872,268 ------- Total liabilities and shareholders' equity $2,356,217 ---------- As of ASSETS December 31, 2009 ---- Bonds: Available for sale securities, at fair value $1,471,572 (amortized cost: 2010 -$1,427,771 and 2009 - $1,423,052) Preferred shares: Available for sale securities, at fair value 2,599 (cost: 2010 - $930 and 2009 - $1,509) Common shares: Available for sale securities, at fair value 63,057 (cost: 2010 - $86,838 and 2009 - $50,709) Other invested assets: Available for sale securities, at fair value (cost: 2010 - $4,255 and 2009 - $4,323) Securities classified as trading, at fair value 6,854 (cost: 2010 - $1,100 and 2009 - $1,145) ----- 1,145 ----- Total investments 1,545,227 Cash and cash equivalents 186,087 Agents' balances 69,711 Reinsurance receivables 543,351 Federal income taxes receivables 3,521 Deferred federal income taxes 13,819 Deferred acquisition costs 33,184 Goodwill - Intangible assets 9,236 Prepaid reinsurance premiums 16,546 Other assets 25,098 ------ Total assets $2,445,780 ---------- LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Unpaid losses and loss adjustment expenses $1,257,741 Unearned premiums 131,582 Ceded balances payable 16,009 Contingent commissions 11,169 Notes and debentures payable 121,569 Payable for securities 37,258 Other liabilities 38,476 ------ Total liabilities 1,613,804 --------- Shareholders' equity: Common shares, $0.0001 par value, 450,000,000 common shares authorized; Class A common shares issued: 21,340,929 and 21,243,345 respectively; Class A common shares outstanding: 18,302,169 and 18,215,239, respectively; Class B common shares issued and outstanding: 12,061,372 and 12,061,372, respectively 3 Additional paid-in capital 619,473 Accumulated other comprehensive income 48,481 Class A common shares in treasury, at cost: 3,038,760 and 3,028,106 shares, respectively (100,720) Retained earnings 264,739 ------- Total shareholders' equity 831,976 ------- Total liabilities and shareholders' equity $2,445,780 ----------
Share amounts have been restated to reflect the 1-for-2 stock exchange effective July 2, 2010 when the Company completed its redomestication to Ireland.
GLOBAL INDEMNITY PLC SELECTED INVESTMENT DATA (Unaudited) (Dollars in millions) Market Value as of June 30, 2010 Dec 31, 2009 --------- ------------ Fixed Maturities $1,480.8 $1,471.6 Cash and cash equivalents 105.1 186.1 ----- ----- Total bonds and cash and cash equivalents 1,585.9 1,657.7 Equities and other invested assets 97.6 73.6 ---- ---- Total cash and invested assets $1,683.5 $1,731.3 ======== ======== June 30, 2010 (a) ----------------- Three Months Six Months Ended Ended ------------- ----------- Net investment income $11.8 $24.1 ----- ----- Net realized investment gain 3.8 14.8 Net unrealized investment (loss) (3.5) (4.6) Net realized and unrealized investment 0.3 10.2 --- ---- Total investment return $12.1 $34.3 ===== ===== Average total cash and invested assets (b) $1,684.8 $1,684.3 ======== ======== Total investment return % annualized 2.9% 4.1% (a) Amounts in this table are shown on an after-tax basis. (b) Simple average of beginning and end of period, net of payable for securities. GLOBAL INDEMNITY PLC SUMMARY OF OPERATING INCOME (Unaudited) (Dollars and shares in thousands, except per share data) For the Three Months Ended June 30, -------------- 2010 2009 ---- ---- Operating income $20,711 $12,712 Adjustments: Net realized investment gains (losses), net of tax 3,801 3,549 Total after-tax adjustments 3,801 3,549 ----- ----- Net income $24,512 $16,261 ======= ======= Weighted average shares outstanding - basic 30,207 25,401 ====== ====== Weighted average shares outstanding - diluted 30,237 25,420 ====== ====== Operating income per share - basic $0.69 $0.50 ===== ===== Operating income per share - diluted $0.68 $0.50 ===== ===== For the Six Months Ended June 30, -------------- 2010 2009 ---- ---- Operating income $28,619 $26,183 Adjustments: Net realized investment gains (losses), net of tax 14,794 (2,772) Total after-tax adjustments 14,794 (2,772) ------ ------ Net income $43,413 $23,411 ======= ======= Weighted average shares outstanding - basic 30,196 21,482 ====== ====== Weighted average shares outstanding - diluted 30,219 21,499 ====== ====== Operating income per share - basic $0.95 $1.22 ===== ===== Operating income per share - diluted $0.95 $1.22 ===== =====
In computing the basic and diluted weighted share counts the number of shares outstanding prior to May 5, 2009 (the date that the common stock was issued in conjunction with the stockholders' rights offering) was adjusted by a factor of 1.114 to reflect the impact of a bonus element associated with the rights offering in accordance with GAAP.
Per share amounts have been restated to reflect the 1-for-2 stock exchange effective July 2, 2010 when the Company completed its redomestication to Ireland.
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.
About Global Indemnity plc and its subsidiaries
Global Indemnity plc , through its several direct and indirect wholly owned subsidiary insurance and reinsurance companies, provides both admitted and nonadmitted specialty property and casualty insurance coverages in the United States, as well as reinsurance throughout the world. Global Indemnity plc's five principal divisions include:
-- United States Based Insurance Operations: -- Penn-America, which includes property and general liability products for small commercial businesses distributed through a select network of wholesale general agents with specific binding authority; -- United National, which includes property, general liability, and professional lines products distributed through program administrators with specific binding authority; -- Diamond State, which includes property, general liability, and professional lines products distributed through wholesale brokers and program administrators with specific binding authority; -- CompGlobal, which provides workers' compensation insurance. -- International Reinsurance Operations: -- Wind River Reinsurance Company, Ltd., a Bermuda based treaty and facultative reinsurer of excess and surplus lines and specialty property and casualty insurance.
For more information, visit the Global Indemnity plc website at http://www.globalindemnity.ie/.
Teleconference and Webcast for Interested Parties
Larry A. Frakes, President and 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 August 4, 2010 at 8:30 a.m. Eastern Time to discuss the second quarter 2010 results.
To participate in the teleconference, please telephone (800) 230-1059 (U.S. and Canada) or (612) 234-9959 (International) and you will be greeted by an operator. Please reference Global Indemnity plc Earnings Release Call or reference Larry Frakes.
The teleconference is being webcast by AT&T and can be accessed at the Company's website at http://www.globalindemnity.ie/. Please access the site at least 15 minutes prior to the teleconference to register, download and install any necessary software. The webcast is also being distributed over AT&T's Audio-Only Web ConferenceCast. To access live or archived event, please use this URL: http://205.144.147.162/cgi-bin/confCast, Conference ID#: 165712 and click GO.
The teleconference will be available for replay beginning at 10:30 a.m. Eastern Time on August 4, 2010 until 11:59 p.m. September 4, 2010. To listen to the replay, please telephone (800) 475-6701 (U.S. and Canada) or (320) 365-3844 (International) then enter 165712.
Forward-Looking Information
Forward-looking statements contained in this press release are made under "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. The types of risks and uncertainties which may affect the Company are set forth in its periodic reports filed with the Securities and Exchange Commission.
Contact: Media Linda Hohn Associate General Counsel (610) 660-6862 lhohn@global-indemnity.com
http://photos.prnewswire.com/prnh/20100803/LT45156LOGO
Global Indemnity plc
CONTACT: Linda Hohn, Associate General Counsel, Global Indemnity plc,
+1-610-660-6862, lhohn@global-indemnity.com
Web Site: http://www.globalindemnity.ie/
