GlobeNewswire Inc | Aug 10, 2020 07:49AM EDT

August 10, 2020

GEORGE TOWN, Cayman Islands, Aug. 10, 2020 (GLOBE NEWSWIRE) -- Global Indemnity Limited (NASDAQ:GBLI) today reported net income of $37.6 million for the three months ended June 30, 2020 compared to $14.7 million for the same period of 2019. Underwriting income was $21.7 million for the three months ended June 30, 2020 compared to $8.1 million for the comparable period in 2019. The Companys Combined Ratio for the three months ended June 30, 2020 was 85.2%. The Companys Investment Portfolio increased $82.8 million, or 5.3%, and book value per share increased 8.7%, from $47.12 to $51.24, during the second quarter of 2020.

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

For the Three Months For the Six Months Ended June 30, Ended June 30, 2020 2019 2020 2019 Gross Written $ 164.5 $ 179.3 $ 320.3 $ 321.5 PremiumsNet Earned $ 141.8 $ 128.2 $ 286.3 $ 250.3 Premiums Net income $ 37.6 $ 14.7 $ (7.0 ) $ (loss) 34.3Net income (loss) per $ 2.61 $ 1.02 $ (0.49 ) $ 2.39 share Adjusted operating $ 7.5 $ 11.3 $ 17.5 $ 22.9 income (1)Adjustedoperating $ $ $ $ 1.60 income per 0.52 0.79 1.22share Combined ratio analysis:Loss ratio 47.4 % 54.6 % 50.6 % 51.3 %Expense ratio 37.8 % 39.4 % 38.4 % 40.1 %Combined ratio 85.2 % 94.0 % 89.0 % 91.4 % (1) Net Income exclusive of investment portfolio gains and losses. Excludingdeclines in the fair value of alternative investments during 2020, adjustedoperating income would have been $17.0 million and $26.7 million, net of tax,for the quarter and six months ended June 30, 2020, respectively.

As of As of As of June 30, March 31, December 31, 2020 2020 2019 Book value per share (2) $ 51.24 $ 47.12 $ 50.82 Shareholders? equity $ 735.2 $ 674.6 $ 726.8 Cash and invested assets (3) $ 1,633.4 $ 1,550.6 $ 1,607.0 (2) Net of cumulative Company dividends to shareholders totaling $2.50 pershare, $2.25 per share, and $2.00 per share as of June 30, 2020, March 31,2020, and December 31, 2019, respectively.(3) Including receivable/(payable) for securities sold/(purchased).

About Global Indemnity Limited and its subsidiaries

Global Indemnity Limited (NASDAQ:GBLI), through its several direct and indirect wholly owned subsidiary insurance and reinsurance 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 Limiteds four primary segments are:

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

For more information, visit theGlobal Indemnity Limiteds website at http://www.globalindemnity.ky.

Forward-Looking Information

The forward-looking statements contained in this press release1 do not address a number of risks and uncertainties including COVID-19, risks and uncertainties related to the proposed redomestication of Global Indemnity Limited, and risks and uncertainties related to the proposed redemption of the 7.75% Subordinated Notes due 2045. 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.

Global Indemnity Limiteds Combined Ratio for the Three and Six Months Ended June 30, 2020 and 2019

For the three months ended June 30, 2020, the Company recorded a combined ratio of 85.2% (Loss Ratio 47.4% and Expense Ratio 37.8%) as compared to 94.0% (Loss Ratio 54.6% and Expense Ratio 39.4%) for the three months ended June 30, 2019.

-- The accident year casualty loss ratio improved 5.7 points to 52.1% in 2020 as compared to 57.8% in 2019 primarily as a result of lower claims frequency within the U.S. 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 4.3 points to 66.9% in 2020 from 62.6% in 2019 primarily as a result of an increase in frequency and severity of catastrophe claims partially offset by reductions in frequency on non-catastrophe claims.

For the six months ended June 30, 2020, the Company recorded a combined ratio of 89.0% (Loss Ratio 50.6% and Expense Ratio 38.4%) as compared to 91.4% (Loss Ratio 51.3% and Expense Ratio 40.1%) for the six months ended June 30, 2019.

-- The accident year casualty loss ratio improved 2.3 points to 55.7% in 2020 as compared to 58.0% in 2019 period primarily as a result of lower claims frequency within the U.S. 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 1.2 points to 58.8% in 2020 from 57.6% in 2019 primarily as a result of an increase in frequency and severity of catastrophe claims partially offset by reductions in frequency and severity on non-catastrophe claims.

Global Indemnity Limiteds Gross and Net Written Premiums Results by Segment for the Three and Six Months Ended June 30, 2020 and 2019

Three Months Ended June 30, Gross Written Premiums Net Earned Premiums 2020 2019 % 2020 2019 % Change ChangeCommercial $ 87,297 $ 13.3 % $ $ 23.0 %Specialty 77,079 69,728 56,705Specialty 37,978 46,486 (18.3 %) 33,543 35,567 (5.7 %)PropertyFarm,Ranch, & 23,222 23,697 (2.0 %) 19,030 17,350 9.7 %StableReinsurance 32,059 (49.9 %) 19,546 18,579 5.2 %Operations 16,052Total $ $ 179,321 (8.2 %) $ $ 128,201 10.6 % 164,549 141,847

Six Months Ended June 30,

Gross Written Premiums Net Earned Premiums 2020 2019 % 2020 2019 % Change ChangeCommercial $ $ 19.0 % $ $ 22.3 %Specialty 168,128 141,292 137,442 112,346Specialty 73,221 (15.0 %) 67,759 70,186 (3.5 %)Property 86,160Farm, Ranch, & 45,355 44,462 2.0 % 37,713 34,472 9.4 %StableReinsurance (32.3 %) 43,401 33,286 30.4 %Operations 33,569 49,608Total $ $ 321,522 (0.4 %) $ $ 250,290 14.4 % 320,273 286,315

Commercial Specialty Operations: Gross written premiums and net earned premiums increased 13.3% and 23.0%, respectively, for the three months ended June 30, 2020 as compared to the same period in 2019. Gross written premiums and net earned premiums increased 19.0% and 22.3%, respectively, for the six months ended June 30, 2020 as compared to the same period in 2019. The increases are primarily driven by organic growth from existing agents, increased pricing, and several new programs.

Specialty Property Operations: Gross written premiums and net earned premiums decreased by 18.3% and 5.7%, respectively, for the three months ended June 30, 2020 as compared to the same period in 2019. Gross written premiums and net earned premiums decreased by 15.0% and 3.5%, respectively, for the six months ended June 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 Operations: Gross written premiums decreased 2.0% and net earned premiums increased 9.7% for the three months ended June 30, 2020 as compared to the same period in 2019. Gross written premiums and net earned premiums increased 2.0% and 9.4%, respectively, for the six months ended June 30, 2020 as compared to the same period in 2019. The decrease in gross written premiums for the three months ended June 30, 2020 was primarily due to an effort to reduce exposure in catastrophe prone areas to improve overall profitability. The increase in gross written premiums for the six months ended June 30, 2020, and the increases in net earned premiums for the three and six months ended June 30, 2020, was primarily due to an increase in pricing.

Reinsurance Operations: Gross written premiums decreased 49.9% and net earned premiums increased 5.2% for the three months ended June 30, 2020, as compared to the same period in 2019. Gross written premiums decreased 32.3% and net earned premiums increased 30.4% for the six months ended June 30, 2020, as compared to the same period in 2019. The decrease in gross written premiums was primarily due to the non-renewal of property catastrophe treaties. The increase in net earned premiums was primarily due to the growth of the new casualty treaty entered into during 2019.

Note: Tables Follow

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

For the Three Months For the Six Months Ended June 30, Ended June 30,

2020 2019 2020 2019Gross written premiums $ $ $ $ 164,549 179,321 320,273 321,522 Net written premiums $ $ $ $ 147,264 159,069 286,376 282,485 Net earned premiums $ $ $ $ 141,847 128,201 286,315 250,290Net investment income (loss) (2,359 ) 13,826 7,770 21,045Net realized investment gains 38,507 3,590 (29,655 ) 13,980(loss)Other income 766 522 931 1,010 Total revenues 178,761 146,139 265,361 286,325 Net losses and loss adjustment 67,297 70,075 144,944 128,396expenses (1)Acquisition costs and other 53,578 50,534 109,990 100,277underwriting expensesCorporate and other operating 8,618 4,639 12,841 7,844expensesInterest expense 4,712 5,042 9,577 10,065 Income (loss) before income 44,556 15,849 (11,991 ) 39,743taxesIncome tax expense (benefit) 7,005 1,186 (4,964 ) 5,480 Net income (loss) $ 37,551 $ 14,663 $ (7,027 ) $ 34,263 Weighted average shares 14,276 14,187 14,263 14,171outstanding?basic Weighted average shares 14,389 14,331 14,263 14,325outstanding?diluted Net income (loss) per share ? $ 2.63 $ 1.03 $ (0.49 ) $ 2.42basic Net income (loss) per share ? $ 2.61 $ 1.02 $ (0.49 ) $ 2.39diluted (2) Cash dividends declared per $ 0.25 $ 0.25 $ 0.50 $ 0.50share Combined ratio analysis: (3) Loss ratio 47.4 54.6 50.6 51.3Expense ratio 37.8 39.4 38.4 40.1Combined ratio 85.2 94.0 89.0 91.4

Includes loss reductions related to prior years of $19.3 million and $8.2 million for the three months ended June 30, 2020 and 2019, respectively(1) and $19.9 million and $16.1 million for the six months ended June 30, 2020 and 2019, respectively.

For the six months ended June 30, 2020, weighted average shares(2) outstanding ? basic was used to calculate diluted earnings per share due to a net loss for the period.

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(3) 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 LIMITEDCONSOLIDATED BALANCE SHEETS(Dollars in thousands)

(Unaudited) December 31, June 30, 2020 2019ASSETSFixed Maturities: Available for sale securities, at fair value (amortized cost: 2020 - $1,236,356 and 2019 - $ 1,280,116 $ 1,253,159 $1,231,568; net of allowance of: 2020 - $0)Equity securities, at fair value 220,184 263,104 Other invested assets 35,463 47,279 Total investments 1,535,763 1,563,542 Cash and cash equivalents 76,393 44,271 Premiums receivable, net of allowance for 125,300 118,035 credit losses of $2,931 at June 30, 2020Reinsurance receivables, net of allowance for 91,089 83,938 credit losses of $8,992 at June 30, 2020Funds held by ceding insurers 47,820 48,580 Federal income taxes receivable 5,511 10,989 Deferred federal income taxes 33,967 31,077 Deferred acquisition costs 70,119 70,677 Intangible assets 21,227 21,491 Goodwill 6,521 6,521 Prepaid reinsurance premiums 15,854 16,716 Receivable for securities sold 21,252 - Other assets 62,332 60,048 Total assets $ $ 2,113,148 2,075,885 LIABILITIES AND SHAREHOLDERS? EQUITY Liabilities: Unpaid losses and loss adjustment expenses $ 651,073 $ 630,181 Unearned premiums 314,061 314,861 Ceded balances payable 23,660 20,404 Payables for securities purchased - 850 Contingent commissions 8,676 11,928 Debt 297,730 296,640 Other liabilities 82,754 74,212 Total liabilities 1,377,954 1,349,076

Shareholders? equity: Ordinary shares, $0.0001 par value, 900,000,000ordinary shares authorized; A ordinary sharesissued:10,333,540 and 10,282,277, respectively;A ordinary shares outstanding: 10,213,436 and 2 2 10,167,056, respectively; B ordinary sharesissued and outstanding: 4,133,366 and4,133,366, respectivelyAdditional paid-in capital (1) 445,173 442,403 Accumulated other comprehensive income, net of 37,693 17,609 taxesRetained earnings (1) 256,442 270,768 A ordinary shares in treasury, at cost: 120,104 (4,116 ) (3,973 )and 115,221 shares, respectively Total shareholders? equity 735,194 726,809 Total liabilities and shareholders? equity $ $ 2,113,148 2,075,885

Since the Company?s initial public offering in 2003, the Company repurchased 20.2 million shares for a total of $488 million. These share repurchases are reflected by a $488 million reduction of the Company?s(1) additional paid-in capital and retained earnings as of June 30, 2020 and December 31, 2019. Retained earnings are also net of $36 million and $29 million of cumulative historic Company dividends to shareholders as of June 30, 2020 and December 31, 2019, respectively.

GLOBAL INDEMNITY LIMITEDSELECTED INVESTMENT DATA(Dollars in millions)

Market Value as of (Unaudited) December 31, June 30, 2019 2020 Fixed maturities $ 1,280.1 $ 1,253.2 Cash and cash equivalents 76.4 44.3 Total bonds and cash and cash equivalents 1,356.5 1,297.5 Equities and other invested assets 255.6 310.4 Total cash and invested assets, gross 1,612.1 1,607.9 Receivable (payable) for securities (sold)/ 21.3 (0.9 )purchasedTotal cash and invested assets, net $ 1,633.4 $ 1,607.0



Total Investment Return (1) For the Three Months For the Six Months Ended June 30, Ended June 30, (unaudited) (unaudited) 2020 2019 2020 2019 Netinvestment $ (2.4 ) $ 13.8 $ 7.8 $ 21.0 income(loss) Net realizedinvestment 38.5 3.6 (29.7 ) 14.0 gains(losses)Netunrealized 26.3 17.1 22.2 43.4 investmentgainsNet realizedandunrealized 64.8 20.7 (7.5 ) 57.4 investmentgains(losses) Total netinvestment $ 62.4 $ 34.5 $ 0.3 $ 78.4 income andgains Averagetotal cash $ $ 1,537.3 $ $ and invested 1,592.0 1,620.2 1,533.2assets Totalinvestment 3.9 % 2.2 % 0.0 % 5.1 %return %

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

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

For the Three For the Six Months Months Ended June 30, Ended June 30, 2020 2019 2020 2019 Adjusted operating income, net of $ 7,480 $ $ $ tax (1) 11,346 17,529 22,926Adjustments: Net realized investment gains 30,071 3,317 (24,556 ) 11,337(losses) Net income (loss) $ $ $ (7,027 ) $ 37,551 14,663 34,263 Weighted average shares outstanding 14,276 14,187 14,263 14,171? basic Weighted average shares outstanding 14,389 14,331 14,409 14,325? diluted Adjusted operating income per share $ $ 0.80 $ 1.23 $ 1.62? basic 0.52 Adjusted operating income per share $ 0.52 $ 0.79 $ 1.22 $ 1.60? diluted

Excluding declines in the fair value of alternative investments during(1) 2020, adjusted operating income would have been $17.0 million and $26.7 million, net of tax, for the quarter and six months ended June 30, 2020, respectively.

Note Regarding Adjusted Operating Income

Adjusted operating income, 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 is not a substitute for net income (loss) determined in accordance with GAAP, and investors should not place undue reliance on this measure.

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