Earnings call transcript Q4 2022

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Operator

Good morning, and welcome to Global Indemnity Group 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer. [Operator Instructions] Thank you.

Stephen Ries, Head of Investor Relations, you may begin your conference.

Stephen Ries

operator. you, Thank is call Today's being conference recorded. may remarks statements. forward-looking GBLI's contain

We forward-looking can of in limitation, by a such representation estimates. future regarded the will, that estimates not Some statements beliefs, you identified should forward-looking or by without use statements us as including, achieved. or be expectations the fact, be by that be words, of expectations the us caution plans, forward-looking contemplated

a SEC other our operate to Form report a filings our business Indemnity future made events of otherwise. the Global to any such annual the factors new not under and or that we our obligation refer Please may XX-K obligation as and environment with update materially or results. on forward-looking result for LLC important disclaims its which of description any Group, information, affect expressly alter is and in whether the statements,

the Executive to my is over Jay to call GBLI. Chief turn Brown, of It pleasure now Officer

Joseph Brown

taken. and for explanation detailed results based Good I you, to to on on an by fourth will first compiled, call our then this call. how transpired how Global the last for future Tom taking prior of join implications to be since recently update CFO, thanks us provide at providing they year full the Thank year the McGeehan, our we a will what our for compared and morning. results time of quarter were and This has the Steve. morning have on followed everyone some actions

questions. take then will We

now to time. expected than that will far been that joined November, the the Looking change organization after I I brought week has have of amount last I that back to I the at admit just a greater company,

new major documented of and product our lines existing GBLI's with expansion a was last as of Day both business added product XXXX lines. products to new As offerings fall, planned our at Investor

including shareholders needed that the few our next was for the presented major and significant risks year evaluating plan for be and of and/or years. business clear with that that best staff back In planned needed GBLI business stand to acquired the the dependencies the began either highlighted associated we technology we technology to Board our three what became As on a XXXX, Board plans costs assess process It expansion technology our offerings. December, the with with our of and was product developed. over

what substantially management team different dramatic our change the Following a the a put business. would have excess that position plan positive risk business my that associated to historical costs meeting, reduced surplus radically been with together and lines and in

failure first In was and the businesses associated party the terminated that immediately based decision was essentially four opinion, that staff was, launched from scratch. we of an in four prior these achieve and with under environmental. economic we January, back we technology the management: to breakeven on exit the that excess lines. fall to starting project liability, casualty would years The property vendor in fact have was absolute four five for our of a month all assessment we to decision professional not brokerage, XXXX XX third due my would be This another

also assessment these and casualty book fundamentally appetite decided not retrocession liability renew overall was of to large that simply a of treaty Bermuda space and to addition insurance large disappointing of decisions professional of capital. and the reinsurance an we lines. In costs decision, business. do altered to our results None and excess high with these our in in underwriting anything a use It had

it our running the was overall overall in February and staff expense to prior significant early of decisions GBLI, As these we bring reduction the where American in a Reliable on acquisition. a XXXX expense to result of headcount to had back

what is historical those past with in We core our we for that defined realigned needed ongoing business, resources The shareholders. in business consistent over ratios are net we profitable produce the including consistent to goal to plan have performed XX for now associated back months. to of a which exited our changes to with low the these activities mid-XXs the combined to time has is our business with growth result have our manage now lines that

a There are a we differences year ago. key just where were few from positioned

to generate a years First, ago contrast starting immediately to the our our capital next capital that year over excess to probably growth. to in add we belief we fuel few expect need

duration took and months to years to has past we actions from liquidate portfolio portfolio investment the equity over of XX our almost the value traded started publicly under to our owners. for significant X.X the Second, our years to bear shorten already five

almost We be will investment expect that in in our what coming the income double year prior was XX months. the it

a reinsurance with greater risk with associated to property the mix of from have catastrophic is much significant we Third, as our transition now cost dispersion our remaining on XX:XX our achieved exposure and risks. insurance property casualty company complete geographical goal an a property

quarter, leaving million in year Importantly, end shareholders of we After by $XX buybacks. returned and million dividends we authorization. to purchased shares the during remaining around another in the year, way $XX this our the of share XXX,XXX XXXX, approximately buyback first

our Tom, XXXX above that valued to recognition repeat I my operations I value book results fellow last get to it owners. are company objective to what over is on being our insurance said turn in My value I call. adding our Before for will

term. and both be to happen As such, with continue in the the focus relentless daily make my will team as near that CEO board to the management to work

I over will now Tom. it turn With to that,

Thomas McGeehan

from at and $XX.XX morning, Book everyone. Jay, XX, to decreased XXXX. at value Thank share per good you, XX, $XX.XX December XXXX December

income would of rising The was the the interest XXXX. book rates, share $X.XX increased value due in the per fourth partially book value per offset share to repurchases quarter due decreases Excluding share decrease by rising portfolio per rates during to market fixed value of have interest share. in by

During income Global distribution income, a of shares XXX,XXX Adjusted million realized our acquired. a quarter, $XXX,XXX. to lower excludes investment of book was duration. realized $XX.X share There share the gains XXXX onetime $X.XX incurred during loss were which $XX.X per operating fourth to paid restructured Share the that losses, losses operations was increased buybacks quarter as Indemnity were shareholders. events million includes the by portfolio each was net versus Net and quarter value in per XXXX. fourth in and discontinued $X.XX.

realizing cash reinvested. flows of We yielding increase short benefits since continue a higher to are portfolio. are the yields having Book duration

Consolidated generated million. $X.X underwriting lines continuing underwriting $XX.X was an Our profit income million. of

the Penn-America noted, in XXXX and specialty specialty As the selected Indemnity business, were Programs fourth and to quarter on which taken were Global XXXX focus of quarter lines. first lines, InsurTech, small commercial actions to its of Jay enable

amount stop As XXXX recently The million. Jay a was proper during Charges $X.X time business were have new formed of these investment long. was also XXXX return fourth noted, a it of decision units. the incurred too units these units from to rate writing to quarter exit achieve taken would fourth from and made of of quarter the to in

fourth million were quarter, In $X.X asset approximately of recognized. addition, impairments during the

lower insurance expense actions base were to other the the dwelling the additional to manufactured Approximately In result as operating to million actions farm Due costs stop well actions of XXXX, $X.X taken make home, businesses, of business, $XX were commensurate decisions incurred of quarter to expenses annual and the a and to savings premium million with first quarter amount XXXX. approximately taken. severance as selling quarter of in annually. fourth expected the first be The is written. quarter were ongoing the as of first writing

Moving at The million in Book portfolio of December versus excluding XX, XXXX. X.X% Net income benefits paying in repositioning to yield alternative the X.X% investments was increased XXXX. investment has to were off. from investments. $XX.X $XX.X XXXX million

in of fully alternatives, investment $X.X incurred for be Excluding reposition to realized the are the recovered the versus XXXX quarter The were fourth XXXX. during $XX.X fourth XXXX. losses was of portfolio that million net XXXX to anticipated during quarter million income

the were in was December to December mature comprehensive the Accumulated flows dates. rate quarter Approximately downside $XXX were rates. negative will action The on from was XXXX. rise increase risk in of The the X.X as a of of end mitigates taken income XX, yield towards of will will XXXX, They portfolio, due in income are and The another The now all interest had the in of at $X.X mature XXXX. portfolio of versus the December to the change the recovered maturity cash XXXX the continues move December is during million million XX, duration portfolio portfolio their rate investments Another million invested. that be $XXX portfolio XXXX. in impact the the duration fourth of not $XX.X swaps was exited shortening mature but the the between million years as XXXX, at much, on interest unrealized loss fixed significant XX, of XXXX. XXXX. other as

consolidated XXXX incurred taken million entire to comprised lines exited XX.X%. from combined million for $X.X Actions book million the Cat lines. an on income in The XXXX. million $XX are million for compared in working. catastrophe was Underwriting million continuing our were XX.X%. compared Catastrophes $XX.X from was XXXX. loss continuing exposure continuing $X.X $XX lines was lines in to $XX.X were reduce in to losses underwriting $XX of The basis of million and ratio combined XXXX a ratio

For gross XX% premium lines $XXX.X XXXX. of written lines, compared continuing the in premium to in Casualty XXXX. million continuing our million comprised earned to XX.X% $XXX.X by grew net

and and On $XX through The we XXXX specialty a rate not as not, this exposure on well. exposure products (ph) are higher America are result assure as rate do grew did by collectibles, million. this grew of X.X% programs America to $XXX.X growth by pressure We Much rate obtained remained Penn XX.X% relatively improve increases but actions to they increases date from monitor values. of Programs added XXXX. performing and growth. book flat to X.X%. to comprised of insurance X.X%, taken When growth obtain lines, another year have exposure lines was December, other these continually express] are a due Penn to to We InsurTech rate much million. [vacated returns. to of basis

rate division increases through and Our to of changes exposure year had X.X%. date X.X% December of program

$XXX.X million XXXX, were to XXXX. focus reinsurance Our written in million operations on casualty in reinsurance. primarily premiums compared Gross $XXX.X

forward, buybacks. be capital well Going This providing including writing be share can for reinsurance. lines, specialty less deployed will up capital initiatives, other commercial free to corporate will the we as as that

exited million. On XXXX, August the the January of from million. sold share Prospectively, will that was $XX fourth specialty been in premiums shares X, net XXXX, as time low. the the of premiums Through announced the to $X of million very lines quarter were as repurchased we exited. written other in include for fourth Net for quarter the $XX.X in to we this $XX increased property lines written exited have have lines million well that XXXX. lines Exited sold buyback X,XXX,XXX down we business call, the be farm authorization book

rightsized were flexibility on return market the on liquidity, taken focused investment summary, premium being businesses lines. In was that investment enhance efforts and was proportionate provide GBLI value. new significant its to not be shareholder been very with been provide portfolio core capital to and sold, good The written. repositioned jettisoned units to business have the a were going is create buffer to expense have volatility. base Non-core

flow a expected tremendous to XXXX. at is generate end at it our of the The operations and end XXXX. yield now income the amount of between X.X% XX, and from Book X.X% December years. X.X of XXXX was Majorities duration cash fixed cash will increased portfolio of flows has and

book continue back year shorter been We two the into X.XX%. mainly the is the to close closed X.XX%, increase. at yesterday, treasuries one have There to At opportunity rate treasuries. tremendous for of proceeds these was deploying term business maturities year from treasury yields

you, now we take your will and Thank questions.

Operator

And Instructions] we Zacks question do Investment the [Operator Tom from from of Research. have line a Kerr

Your line is open.

Thomas Kerr

go can of A charge $X.X the fourth couple again. nothing here, of quarter million ones to you over in-depth, but quick

were those you are three that what I of components think misunderstood and them? or said there missed

Joseph Brown

one on spread was the the actually It Yes. the quarter. fourth between million and second. first was Hang $X.X -- quarter

$X.X the XXXX quarter a Tom, costs. had they During remainder severance of of in the million of and severance charges, and the million impairments fourth actually the we incurred of cost were $XX and were we quarter, first mainly asset had

Thomas Kerr

sort I of it. release fourth A expense from of Okay. ratio two Got Difficulty] years, XX. question big [indiscernible] quarter -- it XX quarter. first the increased the to last the basically. picture took press on [Technical for

Joseph Brown

please? You repeat bit, broke Could up a you your Tom. question

Thomas Kerr

forget early But was. lines the I been might year, have the last from the continuing last restructuring delta XX.X% severance, on to thought The ratio different. expense XX.X% went when year. I what you and that begin

Thomas McGeehan

been business right, Jay the going And necessary book, ratio will actions eliminate has in took return We as have took. the that as improve we again the as very of we why significant would selling would expenses where proper a it forward we manufactured get of our ahead I expense were expense in some felt We but units and looked on just basis. was took of and it selling taken new long our forward ratio took to -- that long. were you're that We're the costs homes it as and new too that's up capital. we're to have those going we taken some we the too lines actions making those people farm we investments we the were our investing with lines, in said to look noted, that technology when those a

Thomas Kerr

comes it the the down So ratio expense of fair say Is the from equally loss? or get it to XX% that ratio most expense from to to and is combined goal. low the with was like stated fair you your XXs, the

Thomas McGeehan

The about ratio. loss rest from XX% will side. from the Probably come underwriting the just on ratio be expense side will

Thomas Kerr

Okay.

change, Or out? good. or Is current of you will at this capital forward. looking think any Day still Sounds surplus going $XXX sort million right. the that I One that and have All number? more, a is Investor have mentioned

Thomas McGeehan

no. Well,

rates, it expect that equity. now, it We'll range. continue capital, in will at continue as interest that Right increase. million have and will to share to The As discretionary out, look buybacks increase. in to we which we lowered rises that $XXX $XXX look million our we're

As capital see capital, immediate have took discretionary will Jay going see noted, discretionary capital, forward. increases excess our benefit we we the to expect to actions an in -- we

Thomas Kerr

right. All

all That's good. now. for Sounds got I

Joseph Brown

you. Thank

Operator

conclude questions Thank call. you. this at [Operator does your today's This Thank Instructions] And you time. there are participation. no for further conference

now may You disconnect.

Global Indemnity (GBLI) 9 Mar 232022 Q4 Earnings call transcript