Global Indemnity plc Reports Second Quarter 2011 Financial Results.

DUBLIN, Aug. 3, 2011 /PRNewswire/ -- Global Indemnity plc (NASDAQ:GBLI) today reported net income for the three months ended June 30, 2011 of $4.4 million or $0.15 per share and for six months ended June 30, 2011 of $18.2 million or $0.60 per share. As of June 30th, book value per share increased to $31.01 or 1.4% from $30.59 per share at December 31, 2010.  

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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 throughout the world.  Global Indemnity plc's two primary divisions are:

• United States Based Insurance Operations

• Bermuda Based Reinsurance Operations

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, 2011 at 8:30 a.m. Eastern Time to discuss the second quarter 2011 results.  

To participate in the teleconference, please telephone (800) 288-8960 (U.S. and Canada) or (612) 332-0226 (International) and you will be greeted by an operator.  Please reference Global Indemnity plc 2nd Quarter 2011 Earnings Call.

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, 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#: 211204 and click GO.

The teleconference will be available for replay beginning at 10:30 a.m. Eastern Time on August 4, 2011 and will end on 11:59 p.m. September 4, 2011. To listen to the replay, please telephone (800) 475-6701 (U.S. and Canada) or (320) 365-3844 (International) then enter 211204.

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 Three and Six Months Ended June 30, 2011 and 2010

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

For the three months ended June 30th, the calendar year loss ratio increased by 35.5 points to 79.2 in 2011 from 43.7 in 2010.

• Excluding catastrophes, the current accident year loss ratio increased by 13.6 points to 68.8 in 2011 from 55.2 in 2010.  
• Excluding catastrophes, the property loss ratio increased from 34.6 in the second quarter of 2010 to 38.4 in the second quarter of 2011 mainly due to severity from fire losses and storms.  Including catastrophes, the property loss ratio increased by 18.7 points to 78.6 in 2011 from 59.9 in 2010.
  • The casualty loss ratio increased 23.5 points to 91.5 in 2011 from 68.0 in 2010.  The increase is mainly attributable to increased losses in casualty brokerage and professional lines in our US Insurance Operations and changes in the mix of business from our Reinsurance Operations.
• Current year results include a 6.8 point reduction in the loss ratio related to prior accident years.  For 2011 we reduced prior accident years by $5.3 million.  This decrease was made up of (1) $9.1 million decrease from our US Insurance Operations primarily due to decreases in general liability loss reserves mitigated partially by loss reserve increases in casualty brokerage & professional lines and (2) an increase of $3.8 million from our Reinsurance Operations within the marine and property catastrophe lines.

For the three months ended June 30th, the expense ratio decreased from 38.8 in 2010 to 38.7 in 2011.

• The expense ratio decreased from 38.8 in 2010 to 38.7 in 2011 primarily due to lower employee costs from our previously disclosed Profit Enhancement Initiative and a decrease in contingent commissions related to increases in loss ratios described above, offset partially by an increase in average commission rates due to changes in our mix of business.

• Corporate expenses also decreased $0.4 million on a quarter over quarter basis.  

For the six months ended June 30th, the calendar year loss ratio increased by 26.8 points to 78.0 in 2011 from 51.2 in 2010.

• Excluding catastrophes, the current accident year loss ratio increased by 10.9 points to 67.1 in 2011 from 56.2 in 2010.  
• Excluding catastrophes, the property loss ratio increased from 37.9 in the second quarter of 2010 to 45.6 in the second quarter of 2011.  Severity from fire losses and weather events contributed to the increase.  Including catastrophes, the property loss ratio increased by 29.0 points to 87.1 in 2011 from 58.1 in 2010.
  • The casualty loss ratio increased 15.5 points to 83.2 in 2011 from 67.7 in 2010.  The increase is mainly attributable to increased losses in our casualty brokerage class and professional lines in our US Insurance Operations and changes in the mix of business from our Reinsurance Operations.
• Current year results include a 6.9 point reduction in the loss ratio related to prior accident years.  This decrease was made up of (1) $17.8 million decrease from our US Insurance Operations primarily due to decreases in general liability loss reserves mitigated partially by loss reserve increases in casualty brokerage & professional lines and (2) an increase of $7.2 million from our Reinsurance Operations within the marine, property catastrophe, and auto liability lines.

For the six months ended June 30th, the expense ratio decreased from 40.7 in 2010 to 39.0 in 2011.

• The expense ratio decreased from 40.7 in 2010 to 39.0 in 2011 primarily due to lower employee costs from our previously disclosed Profit Enhancement Initiative and a decrease in contingent commissions related to increases in loss ratios described above, offset partially by an increase in average commission rates due to changes in our mix of business.

• Corporate expenses also decreased $2.5 million. The decrease is due to completing the redomestication to Ireland and the Profit Enhancement Initiative.

Global Indemnity plc's three months ended June 30, 2011 and 2010 Gross and Net Premiums Written Results by Business Unit

Insurance Operations:  For the three months ended June 30, 2011, gross premiums written increased 14.4%, and net premiums written increased 26.1%, compared to the same period in 2010.  The increase in gross premiums is mainly due to growth in Diamond State's property and casualty brokerage units, Collectibles Insurance Services LLC, which was acquired in April of 2010, and our Vacant Express product, offset partially by decreases in Penn-America.  However, we are seeing signs that the small business market where Penn-America competes is improving.  The increase in net written premiums is primarily due to the cancellation of a property quota share reinsurance treaty effective January 1, 2011 and an increase in retention related to the US property excess of loss treaty which renewed on January 1, 2011.  

Reinsurance Operations:  For the three months ended June 30, 2011, gross and net premiums written decreased 19.4% compared to the same period in 2010.  Timing of new treaties and non-renewals can cause premiums written to vary widely in this segment.  The decrease in gross and net premiums written is due to the sale of a company that elected to not renew its treaty with Wind River post-acquisition and non-renewing a treaty that did not meet our return hurdles, offset partially by several new treaties.

Global Indemnity plc's six months ended June 30, 2011 and 2010 Gross and Net Premiums Written Results by Business Unit

Insurance Operations:  For the six months ended June 30, 2011, gross premiums written increased 9.7%, and net premiums written increased 23.5%, compared to the same period in 2010.  The increase in gross premiums is mainly due to growth in Diamond State's property and casualty brokerage units, Collectibles Insurance Services LLC, which was acquired in April of 2010, and our Vacant Express product, offset partially by decreases in Penn-America.  However, we are seeing signs that the small business market where Penn-America competes is improving.  The increase in net written premiums is primarily due to the cancellation of a property quota share reinsurance treaty effective January 1, 2011 and an increase in retention related to the US property excess of loss treaty which renewed on January 1, 2011.  

Reinsurance Operations:  For the six months ended June 30, 2011, gross premiums written decreased 19.5%, and net premiums written decreased 19.3%, compared to the same period in 2010.  Timing of new treaties and non-renewals can cause gross premiums written to vary widely in this segment.  The decrease in gross and net premiums written is primarily due to the sale of a company that elected to not renew its treaty with Wind River post-acquisition and non-renewing a treaty that did not meet our return hurdles, offset partially by several new treaties.

Note: Tables Follow

Per share amounts for 2010 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.

SOURCE Global Indemnity plc