GlobeNewswire Inc | Nov 9, 2020 08:02AM EST

November 09, 2020

BALA CYNWYD, Pa., Nov. 09, 2020 (GLOBE NEWSWIRE) -- Global Indemnity Group, LLC (NASDAQ:GBLI) (the Company) today reported a net loss of $22.2 million for the nine months ended September 30, 2020 compared to net income of $41.0 million for the corresponding period in 2019. Adjusted operating income was $16.8 million for the nine months ended September 30, 2020 compared to $31.7 million for the corresponding period in 2019.

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

For the Three Months For the Nine Months Ended September 30, Ended September 30, 2020 2019 2020 2019 Gross Written $ 143.7 $ 157.2 $ 464.0 $ 478.7 PremiumsNet Earned Premiums $ 140.3 $ 133.3 $ 426.6 $ 383.6 Net income (loss) available to $ (15.2 ) $ 6.7 $ (22.2 ) $ 41.0 shareholdersNet income (loss)available to $ ) $ 0.47 $ (1.56 ) $ 2.86 shareholders per (1.06share Adjusted operating $ (4.4 ) $ $ 16.8 $ 31.7 income (loss) 8.8Adjusted operating $ (0.30 ) $ 0.61 $ 1.16 $ 2.21 income per share Combined ratio analysis:Loss ratio 69.2 % 55.2 % 56.7 % 52.7 %Expense ratio % % % 40.1 % 38.0 40.0 38.3Combined ratio % 95.2 % % 92.8 % 107.2 95.0

As of As of As of As of September June 30, March 31, December 30, 2020 2020 31, 2020 2019 Book value per share (1) $ 49.85 $ 51.24 $ 47.12 $ 50.82 Shareholders? equity (2) $ 720.7 $ 735.2 $ 674.6 $ 726.8 Cash and invested assets (3) $ 1,449.1 $ 1,633.4 $ 1,550.6 $ 1,607.0 (1) Net of cumulative Company dividends to common shareholders totaling $2.75per share, $2.50 per share, $2.25 per share, and $2.00 per share as of September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019,respectively.(2) September 30, 2020 shareholders? equity includes $4 million of series A cumulative fixed rate preferred shares.(3) Including receivable/(payable) for securities sold/(purchased).

Selected Financial Data for the Three Months Ended September 30, 2020:

-- Underwriting income / (loss) ($9.5) million in 2020 mainly due to catastrophes compared to $6.6 million in 2019. -- Investment Income - $11.7 million in 2020 compared to $11.3 million in 2019. In 2020 lower yields on fixed income were offset by improved performance on alternative investments. -- Realized gains / (loss) - $7.3 million in 2020 compared to ($2.7) million in 2019. -- Corporate expenses - $21.2 million in 2020 compared to $3.9 million in 2019 mainly due to expenses incurred related to the redomestication of the Company completed on August 28, 2020. -- Loss on extinguishment of debt $3.1 million of prepaid debt issuance costs were written off when $100 million of subordinated debt was retired on August 15, 2020. -- Tax benefit $3.2 million in 2020 compared to $0.3 million in 2019.

Selected Financial Data for the Nine Months Ended September 30, 2020:

-- Underwriting income - $22.8 million in 2020 compared to $29.3 million in 2019. -- Investment Income - $19.5 million in 2020 compared to $32.4 million in 2019. In 2020 alternative investments performed poorly in the early part of the year and book yields on the fixed income portfolio have declined. -- Realized gains / (loss) ($22.3) million in 2020 due to common stock sales in early 2020 and interest rate hedges compared to $11.3 million in 2019. -- Corporate expenses - $34.0 million in 2020 compared to $11.7 million in 2019 mainly due to expenses incurred related to the redomestication of the Company completed on August 28, 2020. -- Loss on extinguishment of debt $3.1 million of prepaid debt issuance costs were written off when $100 million of subordinated debt was retired on August 15, 2020. -- Tax benefit / (expense) $8.2 million in 2020 compared to ($5.2) million in 2019.

About Global Indemnity Group, LLC and its subsidiaries

Global Indemnity Group, LLC (NASDAQ:GBLI), through its several direct and indirect wholly owned subsidiary insurance companies, provides both admitted and non-admitted specialty property and specialty casualty insurance coverages and individual policyholder coverages in the United States, as well as reinsurance worldwide. Global Indemnity Group, LLCs four primary segments are:

-- Commercial Specialty -- Specialty Property -- Farm, Ranch, & Stable -- Reinsurance Operations

Forward-Looking Information

The forward-looking statements contained in this press release1do not address a number of risks and uncertaintiesincluding COVID-19. Investors are cautioned that Global Indemnitys actual results may be materially different from the estimates expressed in, or implied, or projected by, the forward looking statements. These statements are based on estimates and information available to us at the time of this press release. All forward-looking statements in this press release are based on information available to Global Indemnity as of the date hereof. Please see Global Indemnitys filings with the Securities and Exchange Commission for a discussion of risks and uncertainties which could impact the company and for a more detailed explication regarding forward-looking statements. Global Indemnity does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

[1] Disseminated pursuant to the "safe harbor" provisions of Section 21E of the Security Exchange Act of 1934.

Contact: Media Stephen W. Ries Senior Corporate Counsel (610) 668-3270 sries@global-indemnity.com

Global Indemnity Group LLCs Combined Ratio for the Three and NineMonths Ended September 30, 2020and 2019

For the three months ended September 30, 2020, the Company recorded a combined ratio of 107.2% (Loss Ratio 69.2% and Expense Ratio 38.0%) as compared to 95.2% (Loss Ratio 55.2% and Expense Ratio 40.0%) for the three months ended September 30, 2019.

-- The accident year casualty loss ratio increased 3.4 points to 58.3% in 2020 as compared to 54.9% in 2019 primarily as a result of an increase in the Reinsurance Operations casualty loss ratio due to the addition of a new casualty reinsurance treaty. -- The Companys accident year property loss ratio increased by 27.0 points to 90.3% in 2020 from 63.3% in 2019 primarily as a result of an increase in frequency and severity of catastrophe claims including the impact of Hurricane Laura and the Midwest Derecho. This increase was partially offset by reductions in frequency and severity on non-catastrophe claims.

For the nine months ended September 30, 2020, the Company recorded a combined ratio of 95.0% (Loss Ratio 56.7% and Expense Ratio 38.3%) as compared to 92.8% (Loss Ratio 52.7% and Expense Ratio 40.1%) for the nine months ended September 30, 2019.

-- The accident year casualty loss ratio improved 0.4 points to 56.5% in 2020 as compared to 56.9% in 2019 primarily as a result of lower claims frequency and severity within the Insurance Operations partially offset by an increase in the Reinsurance Operations casualty loss ratio due to the addition of a new casualty reinsurance treaty. -- The Companys accident year property loss ratio increased by 9.7 points to 69.2% in 2020 from 59.5% in 2019 primarily as a result of an increase in frequency and severity of catastrophe claims including the impact of Hurricane Laura and the Midwest Derecho. This increase was partially offset by reductions in frequency and severity on non-catastrophe claims.

Global Indemnity Group, LLCs Gross Written and Net EarnedPremiums Results by Segmentfor the Three and NineMonths EndedSeptember 30, 2020and 2019

Three Months Ended September 30, Gross Written Premiums Net Earned Premiums 2020 2019 % 2020 2019 % Change ChangeCommercial $ 74,971 $ 73,175 2.5% $ 73,887 $ 60,869 21.4%SpecialtySpecialty Property 34,730 42,611 (18.5%) 31,388 34,554 (9.2%)Farm, Ranch, & 19,443 21,410 (9.2%) 19,978 18,377 8.7%StableReinsurance 14,605 19,981 (26.9%) 15,049 19,512 (22.9%)OperationsTotal $ 143,749 $ 157,177 (8.5%) $ 140,302 $ 133,312 5.2%

Nine Months Ended September 30, Gross Written Premiums Net Earned Premiums 2020 2019 % 2020 2019 % Change ChangeCommercial $ 243,099 $ 214,467 13.4% $ 211,329 $ 173,215 22.0%SpecialtySpecialty 107,951 (16.2%) 99,147 104,740 (5.3%)Property 128,771Farm,Ranch, & 64,798 65,872 (1.6%) 57,691 52,849 9.2%StableReinsurance (30.8%) 58,450 52,798 10.7%Operations 48,174 69,589Total $ 464,022 $ 478,699 (3.1%) $ 426,617 $ 383,602 11.2%

Commercial Specialty: Gross written premiums and net earned premiums increased 2.5% and 21.4%, respectively, for the three months ended September 30, 2020 as compared to the same period in 2019. Gross written premiums and net earned premiums increased 13.4% and 22.0%, respectively, for the nine months ended September 30, 2020 as compared to the same period in 2019. The increases are primarily driven by organic growth in our excess and surplus lines business from existing agents as well as increased pricing, and several new programs.

Specialty Property: Gross written premiums and net earned premiums decreased by 18.5% and 9.2%, respectively, for the three months ended September 30, 2020 as compared to the same period in 2019. Gross written premiums and net earned premiums decreased by 16.2% and 5.3%, respectively, for the nine months ended September 30, 2020 as compared to the same period in 2019. The decreases are primarily due to a continued reduction of catastrophe exposed business.

Farm, Ranch, & Stable Gross written premiums decreased 9.2% and net earned premiums increased 8.7% for the three months ended September 30, 2020 as compared to the same period in 2019. Gross written premiums decreased 1.6% and net earned premiums increased 9.2%, respectively, for the nine months ended September 30, 2020 as compared to the same period in 2019. The decrease in gross written premiums was primarily due to an effort to reduce exposure in catastrophe prone areas to improve overall profitability. The increase in net earned premiums was primarily due to an increase in pricing and new agent appointments.

Reinsurance Operations Gross written premiums and net earned premiums decreased 26.9% and 22.9% for the three months ended September 30, 2020, as compared to the same period in 2019. Gross written premiums decreased 30.8% and net earned premiums increased 10.7% for the nine months ended September 30, 2020, as compared to the same period in 2019. The decrease in gross written premiums as well as the decrease in net earned premiums for the three months ended September 30, 2020 was primarily due to the non-renewal of property catastrophe treaties. The increase in net earned premiums for the nine months ended September 30, 2020 was primarily due to the growth of the new casualty treaty entered into during 2019.



GLOBAL INDEMNITY GROUP, LLCCONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)(Dollars and shares in thousands, except per share data)

For the Three Months For the Nine Months Ended September 30, Ended September 30, 2020 2019 2020 2019 Gross written $ 143,749 $ 157,177 $ 464,022 $ 478,699 premiums Net written $ 130,611 $ 138,836 $ 416,987 $ 421,321 premiums Net earned $ 140,302 $ 133,312 $ 426,617 $ 383,602 premiumsNet investment 11,746 11,348 19,516 32,393 incomeNet realizedinvestment gains 7,323 (2,690 ) (22,332 ) 11,290 (loss)Other income 542 264 1,473 1,274 Total revenues 159,913 142,234 425,274 428,559 Net losses andloss adjustment 97,148 73,583 242,092 201,979 expensesAcquisitioncosts and other 53,268 53,366 163,258 153,643 underwritingexpensesCorporate andother operating 21,196 3,858 34,037 11,702 expensesInterest expense 3,620 5,023 13,197 15,088 Loss onextinguishment 3,060 - 3,060 - of debtIncome (loss)before income (18,379 ) 6,404 (30,370 ) 46,147 taxesIncome taxexpense (3,209 ) (317 ) (8,173 ) 5,163 (benefit)Net income (15,170 ) 6,721 (22,197 ) 40,984 (loss) Less: Preferredstock 42 - 42 - distributions Net income(loss) available $ (15,212 ) $ 6,721 $ (22,239 ) $ 40,984 to commonshareholders Per share data: Net income(loss) available to commonshareholdersBasic $ (1.06 ) $ 0.47 $ (1.56 ) $ 2.89 Diluted (1) $ (1.06 ) $ 0.47 $ (1.56 ) $ 2.86 Weighted-averagenumber of shares outstandingBasic 14,304 14,203 14,277 14,182 Diluted (1) 14,304 14,328 14,277 14,329 Cash dividends/distributions $ 0.25 $ 0.25 $ 0.75 $ 0.75 declared percommon share Combined ratio analysis: (2)Loss ratio 69.2 55.2 56.7 52.7 Expense ratio 38.0 40.0 38.3 40.1 Combined ratio 107.2 95.2 95.0 92.8

(1)For the three and nine months ended September 30, 2020, weighted-average number of shares outstanding basic was used to calculate diluted earnings per share due to a net loss for these periods.

(2)The loss ratio, expense ratio and combined ratio are 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 earned premiums. The expense ratio is the ratio of acquisition costs and other underwriting expenses to net earned premiums. The combined ratio is the sum of the loss and expense ratios.

GLOBAL INDEMNITY GROUP, LLCCONSOLIDATED BALANCE SHEETS (Dollars in thousands)

(Unaudited) December 31, September 2019ASSETS 30, 2020Fixed Maturities: Available for sale securities, at fair value (amortized cost: 2020 - $1,260,439 and 2019 - $ 1,303,775 $ 1,253,159 $1,231,568; net of allowance of: 2020 - $0)Equity securities, at fair value 75,941 263,104 Other invested assets 37,749 47,279 Total investments 1,417,465 1,563,542 Cash and cash equivalents 37,211 44,271 Premiums receivable, net of allowance for credit 109,820 118,035 losses of $2,869 at September 30, 2020Reinsurance receivables, net of allowance for 112,633 83,938 credit losses of $8,992 at September 30, 2020Funds held by ceding insurers 46,894 48,580 Federal income taxes receivable - 10,989 Deferred federal income taxes 35,300 31,077 Deferred acquisition costs 67,470 70,677 Intangible assets 21,094 21,491 Goodwill 6,521 6,521 Prepaid reinsurance premiums 15,558 16,716 Other assets 69,791 60,048 Total assets $ 1,939,757 $ 2,075,885 LIABILITIES AND SHAREHOLDERS? EQUITY Liabilities: Unpaid losses and loss adjustment expenses $ 669,930 $ 630,181 Unearned premiums 304,074 314,861 Ceded balances payable 9,576 20,404 Payables for securities purchased 5,630 850 Contingent commissions 11,329 11,928 Debt 126,253 296,640 Other liabilities 92,252 74,212 Total liabilities 1,219,044 1,349,076 Shareholders? equity: Series A cumulative fixed rate preferred shares, $1,000 par value;100,000,000 shares authorized, shares issued andoutstanding: 4,000 and 0 shares, respectively, 4,000 - liquidation preference: $1,000 per share and $0,respectivelyCommon shares, par value: no par at September 30, 2020 and$0.0001 at December 31, 2019, 900,000,000 commonshares authorized; class A common shares issued:10,242,703 and 10,282,277 respectively; class Acommon shares outstanding: 10,242,703 and - 2 10,167,056, respectively; class B common sharesissued and outstanding: 4,133,366 and 4,133,366,respectivelyAdditional paid-in capital (1) 443,437 442,403 Accumulated other comprehensive income, net of 35,720 17,609 taxesRetained earnings (1) 237,556 270,768 Class A common shares in treasury, at cost: 0 and - (3,973 )115,221 shares, respectively Total shareholders? equity 720,713 726,809 Total liabilities and shareholders? equity $ 1,939,757 $ 2,075,885

(1)Since the Companys initial public offering in 2003, the Company repurchased 20.2 million shares for a totalof $488 million.These share repurchases are reflected by a $488 million reduction of the Companys additional paid-in capital and retained earnings as of September 30, 2020 and December 31, 2019. Retained earnings are also net of $40 million and $29 million of cumulative historic Company dividends to shareholders as of September 30, 2020 and December 31, 2019, respectively.

GLOBAL INDEMNITY GROUP, LLCSELECTED INVESTMENT DATA (Dollars in millions)

Market Value as of (Unaudited) December 31, 201 September 30, 9 2020 Fixed maturities $ 1,303.8 $ 1,253.2 Cash and cash equivalents 37.2 44.3 Total bonds and cash and cash 1,341.0 1,297.5 equivalentsEquities and other invested assets 113.7 310.4 Total cash and invested assets, gross 1,454.7 1,607.9 Payable for securities purchased (5.6 ) (0.9 )Total cash and invested assets, net $ 1,449.1 $ 1,607.0

Total Investment Return (1) For the Three Months Ended For the Nine Months Ended September 30, September 30, (unaudited) (unaudited) 2020 2019 2020 2019 Netinvestment $ 11.7 $ 11.3 $ 19.5 $ 32.4 income Netrealizedinvestment 7.3 (2.7 ) (22.3 ) 11.3 gains(losses)Netunrealized 0.1 10.0 22.2 53.4 investmentgainsNetrealizedandunrealized 7.4 7.3 (0.1 ) 64.7 investmentgains(losses) Total netinvestment $ 19.1 $ 18.6 $ $ 97.1 income and 19.4gains Averagetotal cashand $ 1,541.2 $ 1,585.2 $ 1,528.0 $ 1,562.2 investedassets Totalinvestment 1.2 % 1.2 % 1.3 % 6.2 %return %

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

GLOBAL INDEMNITY GROUP, LLCSUMMARY OF ADJUSTED OPERATING INCOME (LOSS)(Unaudited) (Dollars and shares in thousands, except per share data)

For the Nine For the Three Months Months Ended September 30, Ended September 30, 2020 2019 2020 2019 Adjusted operating income $ (4,3 ) $ 8,768 $ 16,777 $ 31,694(loss), net of tax 56Adjustments: Net realized investment 6,102 (2,047 ) (18,454 ) 9,290gains (losses)Expenses related to (16,958 ) - (20,562 ) -redomestication Net income (loss) available $ (15,212 ) $ 6,721 $ (22,239 ) $ 40,984to common shareholders Weighted average shares 14,304 14,203 14,277 14,182outstanding ? basic Weighted average shares 14,304 14,328 14,421 14,329outstanding ? diluted (1) Adjusted operating income $ (0.30 ) $ 0.62 $ 1.18 $ 2.23(loss) per share ? basic Adjusted operating income (loss) per share ? diluted ( $ (0.30 ) $ 0.61 $ 1.16 $ 2.211)

(1)For the three months ended September 30, 2020, weighted-average number of shares outstanding basic was used to calculate adjusted operating income per share -diluted due to a net loss for the period.

Note Regarding Adjusted Operating Income (Loss)

Adjusted operating income (loss), a non-GAAP financial measure, is equal to net income (loss) excluding after-tax net realized investment gains (losses) and other unique charges not related to operations. Adjusted operating income (loss) is not a substitute for net income (loss) determined in accordance with GAAP, and investors should not place undue reliance on this measure.