GBLI - Earnings call transcript Q1 2024 | Global Indemnity Group, LLC

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Operator

Thank you for standing by. My name is [ Kathleen], and I will be your conference operator today. At this time, I would like to welcome everyone to the Global Indemnity Group First Quarter 2024 Earnings Call. [Operator Instructions]. After the speaker's remarks, there will be a question-and-answer session. Instructions]. [Operator like Investor call Relations. now Ries, to turn of Head to would over the Steve I Please ahead. go

Stephen Ries

Thank you, Kathleen.

As a remarks statements. some being recorded, reminder, today's conference may call contain is and forward-looking

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

any Please to or our otherwise. and our over report the whether of Form information, such forward-looking other statements, any of Global which update pleasure a or factors to future on of Jay events filings environment results. Group Chief descriptions our important obligation we my Indemnity business its turn under refer to obligation as for now that Executive LLC annual alter to affect result Officer not new Brown, XX-K Global may call operate and Indemnity. with and the Mr. is the materially expressly in It SEC is disclaims

Joseph Brown

first comments our our Financial Thank morning, joining a months for you I of and first review Officer, and overview provide will we quarter restructuring all were you, highlights Riley, a us midst activities. few for then our call. XX Chief a for thank Good Steve. financial year the significant new makes? ago, Brian difference in will our insurance a operations. What of the insurance

assess average of for management. The plus goal to investors annual our guidelines the achieve as objectives, premium difficult expense revenue of simple current growth, revenue insurance ongoing written have exited underwriting metrics a XX%. for growth long-term metric performance results for to making and of on our gauge X it and of consisting was operations, reaffirmed performance we long-term To then of a a performance. mix assist set progress, ongoing Our were how to businesses, measuring

underwriting to we over want see a a we to And in current time then our combined ratio achieve underwriting XX% have our performance, given performance, ratio XXs. mix. expense to to Our desired XX% the low need

As we ago, substantial the progress for real first our value quarter and a to comparison these highlight, from against goals Brian results have demonstrates shareholders. made will year creation

In terms of insurance are double-digit revenues, divisions most against of tracking our growth. long-term

of the assumed expect We Penn-America by reinsurance commercial target combination this and that will InsurTech wholesale year-end. achieve

However, a XXXX. a the lag expansion progress behind work in of and remains bit division our will program in

target see than combined Looking higher property loss for casualty at loss XX.X%. bit ratio a was the to a underwriting of achievement XX.X% the quarter. ratios. a quarter super a ratio and ratios first the a gratified Penn-America of segment driven was performance, solid extremely in this of of performance I was by continuation Offsetting for This expense

at have in of year reflects we customers. this ratio. to hitting reduction our order XXXX in levels the internal to from drop expense meet last costs XXXX couple XXXX in a for very dramatic start to to kept another decision service Penn-America While XXXX, we experienced This maintain for conscious targets our of check our premium will our take from it to the long-term year us after years from the after needs staff substantial continue

and historically. to are to allow that the are currently trends. technology markets do full us We existing we achieve competitive infrastructure increases both continue rate modestly serve. to of in results, should assessment excess having of investing We transformation our the long-term This loss maintain ratio are also consistent in a experienced underlying heavily we achieving stay of our digital inflation in

in should in returns investment continue short-term the to has to of dramatic Book modestly increase investment advantage of take improved continue Brian saw deliver over the place half very of existing that the the yield next months. Overall, numbers. will a year more our to now I with as pleased turn repositioning roughly outstanding increase to XX we provide review was also it mature this taken results We following to interest throughout portfolio rates. the quarter, detailed of investments the our I will

Brian Riley

of to in Thank $X.XX inception $XX.X the first increase Net at in income of was XXXX, value in fixed March per shareholders million was paid Book the combination for XXXX. portfolio. X.X% over quarter, a in income paid paid income $XX.XX $X XXXX. Dividends XXXX. and value of share during $X.X from quarter to return at to share million $X.XX increased the you, of per The Jay. share $XX.XX compared were XX. Including the since XX% increase of million an dividends net year-end per market quarterly

and higher And AA at noting of $XX fixed X.XX $XXX income yielding of points last fixed income million X at in down quarter yield This much the the the months. that is a our at fixed yield is quarter, translated income magnitude both was sell have matured is yields. of fixed X.X X.X%, with XX credit change 'XX, now the portfolio ago. an remains investment and the reinvested duration current worth portfolio in portfolio contributed XX% Investment $XX.X the from X.XX% duration of years income. Starting XX, on portfolio in years, million The of was the average March, minus. duration X.X year Comparing of performance year-end. It income increase book X.X% at to XXXX, the at income into X shortened taken with X.X% investments. on at the income fixed the current to flows Cash in of Duration quarters. securities duration securities X.X% quality of years. of the underwriting December last XX, the book yield years. net improvement yield million increased current December X.X% an were since to early with longer-dated book 'XX average plus X%. The basis Actions during of that book yield X.XX

'XX, remainder generate will expect million For maturities. investment $XXX an we cash of of from portfolio flow investment the income and additional

in investments portfolio remainder environment is current on through maturing For X%. to average well returns. fixed investment continues year-end, increase rate the 'XX remains the our the reference, positioned the interest entire If book of income further yield approximately

combined We income loss driven very compared Now current to underwriting million performance. to strong $X.X let's had the in XXXX. loss to accident consolidated start compared $X.X million current $XXX,XXX [ extra underwriting to in by XX.X in core was accident a consolidated a business, income move a year. This improvement $XXX,XXX year XXX.X XXXX. compared was The to performance accident a year ratio our of of underwriting underwriting in Penn-America's income was of XXXX. The [ of strong ] due Penn-America. to in the ]

noted, XX.X% in loss year excellent accident XXXX. XXXX. due ratio the ratio loss the Penn-America's As of have cat of loss on overall is to line casualty due in driver year with effect XX.X% expectations. Unlike X.X% to compared XX%, [ losses large an primary [ ratio to improved number of XXXX. XX.X% diminished XXXX. improvement The ] X.X points compared loss business. The slightly accident Jay ratio was a combined ] in operations The was performance. to to XXXX XX.X% to performance from Non-catastrophe mainly property -- The diminished our property we the our of ratio non-cat in noncore compared The decline in in X.X% have improved XX.X% improved to ratio remains XXXX. experienced in loss fire to overall of performance in the XX.X%

assumed in $XX.X dropped net earned end 'XX. million premiums noncore XXXX million casual retrocession was from premium of earned to from which $X.X Our an determinated XXXX. mainly compared treaty, drop in operations, The at is

was ratio but in bit with runoff $XXX,XXX. The portfolios. ratio high, expenses were at we down underwriting XX.X%, number client expectations For XXX.X. of XXXX, the The underwriting loss loss as wind line only smaller a was was a

year current calendar Moving years above The XXXX. accident year the underwriting $X,XXX compares to identical by in to XXXX. indications. $X.X of Booked was in loss than virtually reserves to our year of $X.X with accident calendar million in changed This solidly actuarial impact remain underwriting income prior income. less XXXX. million a Consolidated

insurance business compared noncore from decrease written plan growth due our Penn-America's revenues. in was premiums was $XXX $XX.X in million XXXX. $XX.X our that million compared $XX.X million in our in to premiums segment, is with to runoff and written gross and in long-term did XXXX year-over-year. to programs 'XX which expectations. declined Turning meet is XXXX. million $XX The line to terminated This in decrease the not of million Consolidated our in gross XXXX majority underwriting

Excluding these $XX to million million written from XXXX, increase. gross $XX.X terminated programs, X% in premiums in XXXX a grew Penn-America's

Rate X% compared line states and Street to first, has in in the we the As close for expectation. wholesale Overall, to is short-term quarter commercial, first to expect which million the in X%, to increases $XX.X suppressed of XXXX. business, within first divisions XX% focuses small with were full Penn-America, for million quarter. but $XX.X grew growth to Underwriting in the exposure rate year. -- on actions to improve Main each close XX% income growth underwriting certain

consists and in to XX% [indiscernible] InsurTech, million $XX.X of Second, million which grew XXXX. compared collectibles $XX.X to

Let X those break down me products.

growth to from XX% appointments. by organic and driven million, grew ] $X.X existing Express [ agents [indiscernible] First agency

to growth producing. Collectibles third written monoline in expansion technical liability gross agents in million. our product our X% of ] premiums XXXX [ dwelling the vacant general implemented $X.X are quarter including the of to New products, grew automation for contributes premium

assumed to book significant continues grow with reinsurance at XXXX. see Our growth plan of to a tracking nice business in our pace

$XX.X commencing least at XXXX. Programs, mentioned expect in was $X.X than earlier, lower We by terminated X million new the $XX excluding million. programs trees I million,

growth inflation. performance. strong the We are corporate to needs believe for to to the during year, and outlook due XXXX. start premium we capital our noncore for $XXX,XXX meeting In contributed [indiscernible] business. show pricing This with positive. programs of continues other is full will capital current and very increase Penn-America New reduced Further, the support quarter. loss closing, the income opportunities. pleased continues runoff Discretionary

investment increase continued invested portfolio XXXX. maturities as flows the book X% of yielding rates the Thank on and be the expect cash million in will We income currently during remainder higher you. from fixed yield $XXX at income

now will your questions. We take

Operator

Instructions]. [Operator

question from first line of of Your Auburn the ]. Baldini Dan comes [

Unknown Analyst

the combined and pedestrian. And ROE Say I'm the what of can improve going income. the remains to do forward. has ratio nicely the company's sort improved But so investment very you ROE wondering is

Joseph Brown

that overcapitalized reason -- biggest We question. It's degree. be have to reported simple fact The available at to approximately for is that excess our a results purposes. in good is a these the ROE even estimate continues million other we low, good significant capital $XXX is we're

to evaluate best alternatives the that what Our are Board Board. continues for

use best of going we're this to the and that XX% in continue on we our basis. around to noted increase look determine what's XX% year press to the that last quarter in increase did to As of throughout release, dividend XX%, a at cash ongoing an our

Operator

webcast GBLI We please [indiscernible]. one pursuing says [ with comment have from a River in Chimes It transaction discuss Insurance. interest ] in

Joseph Brown

in read that terms I've about papers. heard the in what I've of

James have there's had part point. Those reexamine pursue to conversation are on We at [ We River]. on that with conversations continued both something. parties' this interest later on if may pause

Operator

for that. the Thank Investment from you Kerr next of question Tom line of And Zacks your Research. comes

Thomas Kerr

Can you XX% organically the target grow to expense and get again? expense understand I'm XX%, completely. I declined, issue go it your ratio to didn't sure to would take programs continues or why over years it sequentially not ratio. Penn-America down If

missing maybe I'm something. So

Joseph Brown

still depends of we terms that we're year will experienced drop the in determine premium a over in premium as on result we company a through steep in the accurate. It written as works system. that earned becomes earned and you're as years next premiums that which of much last decline a the growth when X because have No, how

of little terms down in cruising a still we're earned So bit premium.

premium-related basically In based of of associated percentage dollars on ratio. expenses X/X Most charges. a with our premium and expense other commissions set are as terms the of written

time is in a where about those The run makes modestly costs our staff. $XX of for expense. they Penn-America, terms that up million, were So operating That's over around year. $XX They will year. million increase the X/X staff internal of big roughly variable currently last

assuming forward, of have that X% go have to that And to kind of X% change come down. kind to so we actually ratio we in growth greater salaries, a we as for with overcome

by XXXX into We throughout expect by in of year increments this that year, terms quarterly marking hopefully and quarterly. should be achieved shown that, progress with next that

Thomas Kerr

Okay.

incremental to be reiterate but is a point, not improvement last for Just years. to just target of sequentially, quarter-over-quarter that the going there couple

Joseph Brown

as the of -- premium, to will percentage the be going the each down 'XX modestly terms progresses. year of We're should in Right. comparison for quarters But 'XX. it its going for in of higher start actual earned

Thomas Kerr

it. Got

we time problematic in any talked that question. serious worth programs more still? out a One horizon there on out about lot Anything you books last there. Okay. The are nagging of discussing problematic the

Joseph Brown

we're At result development, reserve which beginning [indiscernible] book the pretty those this very That last which reserve the has quarter. little this year, The was a at point, our We we No. had of with down. happy business. businesses effect of during the 'XX. past book experienced in of volatility in died

We terms business example, growth down bit during of we are giving opportunities when in lingering business, New agents' experiencing of of little portion take effect time period. York down some takes that the other us for it a a habitational, in of our because interest

we time our almost is for West period. region whereas region, during flat So year-over-year, East example, saw our relatively same the is up XX%

have does on so So a on effect, it premium necessarily effect lingering it but that's has an -- revenue. not losses,

Operator

the from Haberman line Ross question comes Investments. Your of of RLH next

Ross Haberman

quick prior you of the little that of excess potential you talk -- to questions. a shares it River were that number [ million What In to acquisitions your in related them? currently about went James talk up put in I actually doing about that, earlier work questions you like are And Could general? had capital? the about shares, stock do One think you bit about Could Are back of to for you ] plans them? the actively talking $XXX X looking about you talked your your yield. buying now? looked quarter. calls,

Joseph Brown

terms latter buyback. of Let question me take in the first share

entertaining in are We of inquiries. reverse terms active

did in-market repurchase quarter, the narrow any very window not have first which partially we have open. is activity, During a quarter, actually in the because past we

it's that less I think we shares. buying than feel XX back days comfortable

eventually our we capital rate. generating but obviously, for In with growth, a terms growth happen of $XXX to the the at want million, keep comfortable we're disposition always will or internal what current cushion positive

to us. going be an is for question this So ongoing

have in years, and active careful making of most companies had out make extremely like those been investments terms and when acquisitions. There had you always find sideways success in looking to other at the have We results some there. are are of you active We, acquisitions. over terms potential We've decisions. we've from opportunities be some

operations. a Pain has XX-year Fox, Mr. investing Fox Chairman, Our of [ ] insurance record in

it's don't or actively we're a So announce them from now, to continue approach current anything entertain we right to of to lot time at like and different ideas, with just we time people But have everything, on looking that those. time. working

Ross Haberman

vis-a-vis opposed you're do of of continuing option? weigh better is Just own for looking books when which connected in a or your aggressive business more buying that to to be new other you companies, that terms back as maybe option shares, to

Joseph Brown

what down of a continuously terms faster is that putting back question the in buying shares perfect grow benefits are to our trying debate potentially accelerator versus the at That we of and Board books adding either of or organically business.

is to that share I price, that at shareholders where anything at for this to close time, back occurs. it very, resembling very accretive value create in point book all obviously, and buy now, could right when value we shares think this any are

try over the So we're our to that excess continue and for capital. short to a term portion going explore of

Operator

from We proactive Obrien]. have another not a is no-brainer the webcast at on seems [ this program It from question like more a level. buyback be Why buyback? Michael

Joseph Brown

the I that with kind of think I last question. answered

already I answered. think So with we'll ride unless it I what there's follow-on, let a

Operator

dividend next The not Any that a Vindigni efficient is Andrew may be a from though? consideration understanding for ] special on [ tax this

Joseph Brown

capital, most there that a is basis. a our given partnership, return are we things a as The dividend? most majority and traded distribute that publicly of question the of unique about special shareholders is, in investors deemed of dividends structure interest is any as One doing the limited

not where that's tax that's continuously by thing special look lot other a with whether of that different is a unlike again, efficient So through evaluated lens slightly that to companies do Board. excess capital it necessarily a of evaluating do. the And to our dividends. We at sits uses good in

Operator

follow-up a question Oberon]. of have Dan [ we Baldini And from

Unknown Analyst

in alternatives you ] that came at I that acquisition? shares a under agree any in valuation year, which River imagine James [ announced James And valuation those remember a because at point, interest didn't current some of and you'd any part considering in, you months sort Penn-America mentioned believe. entire I then reviewing announced you were maybe you And company, circumstances few in with were that announced that was are then that you they're these in stock. last the and So now there you what received this an ended. it's with? And I you were Penn-America can't that [ in of ] discussions interest give for And paying inbound I'm stories for later, the away interest just curious, out River there, wrong, that that

Joseph Brown

shares unusual acquisition. given of in very to shares a currently use takes an where It trading are situation our our any kind

amount We issuance, consider tap a reasons, have that's stock to a have capital, the want would but might before excess across we a -- would which thing share for obviously, run variety first you that, be transaction pretty use any a we we of occurrence. rare of large

offer James comments potentially to was that As at a was any transaction I discussed commentary. about with any River, can't or

Operator

We Zacks Investment Kerr have Research. question Tom follow-up from of another

Thomas Kerr

Yes.

increasing billion in million on on the investment. comment time, one heard at a level I've long guys you quick level, investments? a equity a equity low that thinking the in Just Any change securities on remains securities portfolio. of $X.X $XX on

Joseph Brown

-- been has is Board defense. Our we played playing --

making ago, our decision then from to shorten securities. of know liquidate our you our think I dramatically to and As portion portfolio years X investment a history in equity

what period down sideways. stay more look our even income portfolio I you'll eventually fixed bit short-duration are And that place [ securities. equity right see like ] and should composition starting is to as to perhaps portfolio. Personally, or maybe the stabilize of XXX% have in interest in portion that what a next in We likely point, start from come of a now, are looking in makes -- our At through making expect redeployment portfolio sense years my we that your from this essentially which it portfolio. becomes to couple kind us of would portfolio it always behooves at rates, long-term of take sometime our perspective, go that changes

Operator

conference I the will at remarks. There are time. for back no this Instructions]. [Operator closing turn Ries Steve further over now to questions

Stephen Ries

thank our first joining you, Thank quarter for us and call. 'XX everybody, for you, Kathleen,

questions, you look forward and If out have the after second talking any to additional we quarter. you please reach to me, to

Operator

and that gentlemen, Ladies you concludes call. joining. all today's Thank for

now disconnect. may You

Global Indemnity (GBLI) 8 May 242024 Q1 Earnings call transcript