GBLI - Earnings call transcript Q2 2024 | Global Indemnity Group, LLC

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Operator

Thank you for standing by. My name is Christa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Global Indemnity Group Second Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Stephen Ries, Head of Investor Relations. Stephen, you may begin.

Stephen Ries

Christa. you, Thank

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

SEC Some of that expectations the use forward-looking as forward-looking statements can be be not report other fact, factors us plans, words, achieved. our Please caution operate that the annual will, filings regarded without our our estimates statements We and expectations in should of by we be identified including limitation, descriptions future results. business estimates. on by that beliefs, the XX-K us contemplated to Form or representations which you such the affect forward-looking of by environment for the or with refer may in materially important and

any obligation whether any the my expressly It's Chief Global Indemnity. under to Global new pleasure obligation result and to Officer Mr. otherwise. of turn Jay or statements, forward-looking Indemnity future such Group as its a information, now to alter of disclaims is or update Executive over LLC events call Brown, not

Joseph Brown

Steve. you us midyear all GBLI the and for on you, Good thank financial for results. update morning, operational joining Thank and

Following to first, They low a our few second, Chief comments expenses review our for and XX% our metrics achieving XXXX continues team year. a the manage ratio established that at Officer, remain: combined XX%. in consistent of first usual results third, level XXs; will our growing are long-term around tracking towards our to per operations. will for then a the business competitive last with and the plan the XX% insurance annum; we I Brian Riley, highlights our year, our provide Financial financial and insurance overview through format, Halfway to achieve

that the on material While no from having year's longer certain ago a are this financial effect segments we enter results. months business XX exits

do significant when As later, this last year. note you Brian results to effect compare a will have they year's

our insurance most divisions in noted long-term double-digit press growth. are revenues, of terms against our In tracking of release, as

be that of this increase combination at commercial, after wholesale will year-end XXXX. close to of months assumed reinsurance first X% expect We target X a the Penn-America through the InsurTech and recording

However, a continue XXXX division growth months, program in a with and lag flat our programs. to expansion is excluding work in bit will through revenue progress XXXX the of terminated X still

Brian will provide detailed revenue few of a more in growth breakdown moments. a

loss with was performance. X-month to Turning again performance very the combined seeing property ratios to good the from loss quarter, our industry was by this for continuation for I by XX% XX.X% a driven line year. catastrophic X-month Despite losses underwriting of achievement ratio another our and solid record dropped pleased quarter Penn-America segment. of last casualty ratios. first again of catastrophic losses, In a property

a continue record higher the quarter, in target level XX.X%. the ratio first saw to we to of Similar than expense we

As we take hitting our keep to of premium us I year last kept after XXXX staff internal will last couple the for the meet in to after same it for noted reduction in continue our our as from since year to expense level drop Penn-America needs last premium a customers. targets to order substantial XXXX, in quarter, and have reflects from at This years long-term check start dollar of dramatic of decision our 'XX service levels ratio. conscious another the the costs

of full existing competitive our are stay infrastructure investing in to we the markets heavily digital We transformation technology also a in serve.

The our special our into excess be products year. of of our production products. cloud-based next liability infrastructure event first releases for this will remaining of in go business, will modular year, added commercial The new and agent partners binding half commercial our the wholesale of transaction wholesale couple second supporting

inflation underlying are modestly that assessment of to increases continue achieve We excess our trends. rate in of

are few still While years. of level past are achieved markets saw in rate -- hard the that what increases the the that tempered we market serve, we being somewhat is now question there is the that now we in is no from

should support historically. results this long-term allow the consistent and have currently are achieving ratio loss us However, to experienced we

We deliver Book of increase XX and the X.X%. favorable at since following dramatic beginning interest on of continued of the to portfolio place also yields now the year continue taken increases sit to to our portfolio rates take investment over investment repositioning short-term advantage returns have our past the the in months.

duration that X.X higher-yielding election XXXX. flow just get maturities years, longer-dated, the cash to investments the we our well into as portfolio we enter at of now Given and past redeploy is remain our positioned and

As strong position. we capital extraordinarily to ahead, an expect we continue increase excess an from our look in

improved again As constantly high have in is we strongest am more always we'll over rating firm my a strength excess Brian of colleagues That were the recorded the the pleased X review to sheet and was it -- I our very first to numbers. XXXX, in results the detailed of of best eyes I level. am at our that turn pleased provide capital AM months note Overall, balance to with A reminded, beholder. rated said, the to for now Best and have very the

Brian Riley

the the to X-month for are the on X As quarter, results focus first tracking my first results will months. similarly commentary

per 'XX shareholders was quarter increase income in of paid in fixed from can $XX.XX of per the questions including 'XX. million the of increased $X.XX $X we $XX.X value million at in the on you market combination share at to for and income first $XX.XX a half compared The to have X.X% income 'XX. book net value second 'XX Net Return of was $XX.X any answer to dividends year-end the numbers. XX, share. portfolio, Of may in June course, million

to 'XX, first the net the both and For contributed improvement underwriting X in investment income. months performance of

average translated yields. million at of of shortened million income much investments. year early ago. rate flows securities during million have X% into an plus XXXX a that were current taken longer-dated Investments securities of XX% $XXX duration Actions book increased fixed to Starting X.X%. with sell $XX $XX.X year income from yielding since matured higher to and the Cash reinvested

at income of years. earlier, fixed December 'XX, duration a income noted duration at credit X.X% X.X yield was Comparatively, with XXXX. a quality As AA a is portfolio a the X.X minus. remains with yield average Jay December XX, book book years. And now The fixed at X.X% of of XX at yield XX, X.X% of current on with was the June X-year book duration portfolio 'XX, our

Jay our earlier, well is As portfolio duration mentioned short-term positioned.

XXXX. second We have $XXX the in maturing of of million half investments

interest to further increase the in in returns invest maturities soften rate environment We investing securities to if low-risk to longer or continue this have environment interest investment significantly. rate flexibility the in higher were

to Now X underwriting the of the months first let's move year. performance for

as to improvement compared 'XX. consolidated ratio current was XX.X% accident was in accident in performance income million in due compared accident Penn-America. results underwriting year year strong our to in in good combined see 'XX. to business, was $X.X million 'XX continue underwriting driven The core Penn-America's accident $X.X year income to compared the year in to in 'XX 'XX by This income current 'XX. million the $X.X underwriting consolidated was of in a $X.X We million XX.X%

accident points last XX.X% improvement combined Penn-America's of is same period the from 'XX, in ratio X As Jay XX.X% year. noted, in an

to 'XX The performance both improved ratio to The The in compared we at business. year of property losses the XX.X% year to our was accident in in experienced ratio loss property number fire cat 'XX ratio to ago compared ratio catastrophe XX.X% non-catastrophe and 'XX. excellent due The to overall 'XX due improved decline the and in loss of compared XX.X% improved performance. loss loss large X.X% in noncatastrophe XXXX XX.X% XX.X% XX% mainly of in a due to to to XXXX.

remains the XXXX, operations our overall diminished of loss it ratio, noncore effect line on in with expectations XX.X%. casualty performance. As have our a for Unlike

million ago. $X.X dropped in the compared mainly net in of which year earned Property $XX.X retrocession compared was Further, The exit the is ratio a million an noncore XXXX. of The but at XX.X%, XXXX better business million down $X compared no has expenses a The losses end to from 'XX, a was ratio our portfolios. Our in loss year. in the runoff XXXX, million in overall $X.X number line catastrophe at with smaller of XXX.X%. premium treaty XXXX million combined runoff in to the last XXXX Specialty bit operations we high million casualty for in remain expectations to wind was loss $XX.X resulted $X.X underwriting assumed terminated to underwriting than as

current by underwriting actuarial year The 'XX. year Consolidated income years $X.X was slightly the accident impact remained calendar income. was XX,XXX. compares Moving million in reserves above results at better ago. accident million solidly our a favorable $X.X to underwriting year Booked calendar indications. prior This of to than

compared Turning in to in is written declined segment, from in premiums This a 'XX. our insurance $XX business to which $XXX.X million runoff Consolidated revenues. million due million $XXX.X entirely was decrease ago. noncore gross year to the 'XX

fourth Penn-America's not and growth written programs plan compared due with in million to in 'XX. underwriting 'XX premiums XXXX and $XXX.X gross of $XXX.X million did expectations. line our long-term to in that quarter was This is terminated meet in the our

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

X% mentioned of Assumed Jay and on InsurTech reinsurance was the business. growth and As commercial earlier, achieved wholesale aggregate

million Main which those business Let of Street color me X% divisions. grew $XXX.X million focuses add on compared to $XXX on a little bit XXXX. in Commercial, to small Wholesale

rate audit of rate short-term in X%. growth XX%, expectation. our premium underlying indicator year policy Overall, which the year these growth increases Excluding line of trends, was best calendar with includes the in is numbers,

for which 'XX. full $XX.X grew million XXXX expressing expect compared to the X% to of $XX.X calendar InsurTech, in collectibles million to We XX% vacant exceed in year. consists

grew those XX% appointments. our growth as Vacant $XX.X me X well existing driven products. Let organic agents down from as by Express agency million, break to

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

first business significant grow plan on 'XX $XX.X treaty lastly, store premiums months of X the to tracking year. with $X.X quarter. nice $X.X the by signed grew signed book our earlier, mentioned million, We new the growth $X.X XXXX. X in second contributed million in of Gross lower million. see at treaties $XXX,XXX to compared a new million continues in We business pace, than written XXXX in excluding X reinsurance on XXXX. And Assumed for terminated Our we to was that programs,

of the to at next We Penn-America for new believe or And show is of noncore closing, needed in increase higher is business. interest last, Further, due have strong the premium investment of will runoff positive. We very months expect the our capital continues to X with pleased on environment to take income other programs months. advantage capital In higher first X were invest Discretionary in to our growth year to longer significantly. pricing 'XX. environment performance. maturities positioned to loss inflation. continues full rate is opportunities. year XX the at over are This corporate signed you. for X interest and the accident rate outlook yields Thank soften we reduced support this portfolio to meaning well

We now questions. your will take

Operator

Bronchick [Operator Jeffrey Cove of Instructions] Your first Capital. question comes Street from line the with

Jeffrey Bronchick

Thank you your for today. time

it? Just Do the you going you -- but add kind you and you -- could your you where describe executing thought of XXnd reinsurance value you're would -- is in general how X what version, what about dollars think of questions. you had you saw what the efforts

Joseph Brown

in insurance us Sure. directly. That's the States it then we reinsurance basis decision margin Bermuda company, subsequently, into reinsurers. the a been to better reinsuring we the operation question. to market had moved we originally to last attractive, made and actually a our back offered had Prior arrived of other United be good out reinsurance efforts while on retrocession the our for When I that shift that to year, the it at business, would in carriers basically

right we or probably XX% and set, look program participating an X up XX% in expanded a number We We've set different with on niche in with a decided think we're now. of the tiny of return where that provides space we believe thought then to and and our that little XX had we grow months and the so emphasize cannabis year treaties. the multitude continue market skill a appropriate an achieve book of far. the the reinsurance feel that operation that's We good on starting what per in been to took treaties, doubled up areas some would We the capital, small able and was we've at to where start comfortable market next business going to for to what X years. is lines attractive them of expect operating we the

Jeffrey Bronchick

tend out. Or is And Or just be is property -- oriented? ] to weather? what [ this this and ENSE help me

Joseph Brown

It's we underwrite ]. description. good types Absolutely. ENSE [ products that to very direct a we're The the basis. It's very are reinsuring of on much products similar a

the reasons we that comfortable of One in space. feel

X are keep from We achieved away given we've to tended or and last have exposures. X years, our background get -- large over what the weather-related we

seen was haven't or based in were and any We losses where book. related X heavy We in were This Bermuda. X when that the much in contrast ago. catastrophic business, we significant in years on terms we is of very catastrophe to retrocession were to really positioned

Jeffrey Bronchick

is that spread? insurer just Or of lastly, this it piece. to you're latched sort widely And on on there here? any primary Is

Joseph Brown

we're It's in expect the this time probably to dealing -- widely -- expand think that XX customers I point to we're years. of and continue over with next spread. about couple at We're to see different

Jeffrey Bronchick

question would us? Next what that care about be, with you share you James What's a would -- River over year. there over would this Ventures is conclusion the -- that today to say

Joseph Brown

of that to River. don't lawyers James my As any terms make for with comments I probably it's we River, appropriate had in James agreements

experience In for that looking opportunities. any It's we the XX something have actual constantly of done terms years. the of particular last at

in, we we of it types a currently in that of in engaged at able to we'd for deploy have returns might point deploy. to like time M&A be this excess that certain activity We are businesses our create increases substantial capital shareholders. amount in If can't

type And and of the to unfolds that's we're at to going so thing going year look that as continue forward. this

Jeffrey Bronchick

episode say that Would complete? you is

Joseph Brown

No comment.

Jeffrey Bronchick

continuing can an sort you truly of opportunities, of -- running or Would is a Team to team, as the entity. nature where Global reverse comment in sale these -- acquisition the is

Joseph Brown

asking. you sure exactly not Not can what a bit little sure. Maybe that you're clarify I'm But more.

Jeffrey Bronchick

just were if making enable had The were the get company on spring the the run no using Or who in perceive on management clearly, the capital what's you next issues I'm River age this your Was a this and is don't to the companies call trying trample which sale buying just get team which as that to and it's that running about run -- sale, know, of James control spring lawyers hands no that wait But was gentleman to path. River chicken, a talking concept. leaving? structure, a and James I may the would I one owner effectively you interesting on insurance guys of show. a actually could chicken, here. sense the is has an sort I'm structured is you and no, it. couldn't --

Joseph Brown

you seriously. guess I no take too don't comment the

question here. So I'll let to move that the go, next on and we'll

Operator

Board? recently why Your comes next the left Can Hurwitz question Joel line the explain you Straka. from of Jason

Joseph Brown

was a out has the while he in place. a on XX-plus area and now because Officer, Jason Jason us the asked my had the would for help long as certain Board insurance Board I the or time did of a time joined served Executive there the mind I year friend. to that became long-term if that. quite Sure. expect coming on period for and the years going at roles change specifically I a lot for various here so that in time in back when as I board take CEO, first of Chief he was Jason the Jason company I've before CEO the is I actually had I've left the was known

different understand But now Board to in have he contributor already other do a go he's And has interests, to property our to things. pursue conflicts missed had joined he which been incredible doing back pursue time. the an somebody didn't has to think other and of I for started casualty them. I he Jason might also in space. before any to elected I our company long choose and want when things terms

Operator

Investments. Ross from comes with of the Your line go next ahead. Haberman question RLH Please

Ross Haberman

just had follow-up question. quick I a

and you guess, I your in want Could were them get expenses referred them you [ do to that a back lose would you or down would the You it business And X how you little them explain got ] you -- you to more? to. year take, line quicker? a think if

Brian Riley

Brian. is This Yes.

to fixed. is points As top our XX, continue kept levels we customer I service ensure XX mentioned that at we're variable. we think were our points in previous staffing -- levels is We're be to exceed about -- about XX calls, currently a expectations. when combined our to XX increase XX expect fixed to In to expenses. that growth, from that to combination double-digit that a we'd It's X% of costs. really remain premium our X% decline get inflationary achieve on with to XX a to XX, XX in

Operator

from Zacks comes question Tom Kerr next Your Small-Cap line Research. the with of

Thomas Kerr

Most my have questions been answered. of

Just comments, capital. you the is range. still dollar million missed if Did amount a $XXX mention it in your one I the discretionary a quick on that, in

Brian Riley

Yes.

As Jay mentioned, is beholder. the capital discretionary

as -- probably maintain adequacy about So I X One the about excess agency to of that we're a BCAR. we by capital growth capital. $XXX really And $XX over million in would capital year-over-year, strong of deploy scores. ways. regulatory million of through measured rating to Yes. to is would our RBC able are we say expect as authority well --

Thomas Kerr

to sheet the That's a has just from maintain rating? comments, previous stronger. the reduction got Is even that balance though

Joseph Brown

where highest currently want operate. That's to be -- we if absolute the we at rating

the over X could that's where has X XX% million operate the last from. $XXX that, historically of used kind that come And and we obviously, quarters we've below so number down or

ways. at reminded people the But same. always look capital in we're that different excess position different stays Our again,

Operator

Chris Your next comes Koranda. from question

be on shareholder way back would that stock as those You've also open a the reconcile are to offer reluctance What expressed good to opinion use the capital, a thoughts buying market. so but do tender of your issues? X in

Joseph Brown

we'll we look something business eventually different we'll good at to something at tender points capital dividend if something a And do provide shareholders... to continue the can't the special our no to historically way. things deploy it's along certainly things into of way company a going to we think that that used the It's and X or X happen, is other arise, has I in returns a either offer the do if

Operator

you. Thank

Anthony next discuss book is assumptions Can from position trends, impacts? Mottolese. comes your confidence social Your your question trends? How company inflation and casualty from you loss reserve in

Joseph Brown

Sure. points. operating over past years, the upped We X% with business, for or in trends of X%. have We're X X% They probably casualty be this probably probably long-term X% to probably the used to couple at time. range point or the our a in loss X

This We've In how up terms nice where our over in seen actually of the we're positioned are reserves past of from were couple a the quarters. and exposures where had XXXX it you is a back was holding expansion to casualty X if our of some at that margin a result -- causing and problems. the 'XX, mainly us go of last year. the beginning we

either [ book program. ] substantially reduced. Both have York exposures those are of those New one eliminated capitational -- Our particular or in

in book area behaved of the today. the point looks the the casualty impact our to read Otherwise, industry this things reserves time, and reduced compared significantly. overall pretty our well at exposure that about has in So we some historical been in on their

I mainly we that of reflection think of the small a is company. the traditionally which type focus commercial underwritten, of a that's business have

those it bad areas, in of that exposures exist casualty social certainly as are the in but in affected industry. by some larger We as appears not the it's inflation

Operator

excess tender back market from when Why and buying Dutch price investment in comes the repurchase? have your and the higher multiple multiples you Straka. substantial conducting price and your of Joel question believe Why the stock are open or you forward. in now? next projections, line going increase capital substantially you stock share should return Your is until wait the If on lower are a own

Joseph Brown

Basically, But repeat. a we substantial question the were I out through doing the believe will to questionnaire, operation this able tender, don't at in Dutch currently not would a I timing still It's I'll buy place is now, add right that if either market the -- from the in value. particular stock it another of take disagree answered to book our amount but future. I with an time. something when out that market earlier observation that open of or we're

Operator

will Steven that Ladies and to conference does remarks. the gentlemen, I back conclude now for session. our question-and-answer Ries over closing turn

Stephen Ries

second you questions. you the In everybody, in Thank joining with speaking forward call. please Thank have look our you, the if We to for interim, for quarter us reach any you. third out to me quarter.

Operator

for This disconnect. conference Thank call. you may and concludes today's your you participation, now

Global Indemnity (GBLI) 7 Aug 242024 Q2 Earnings call transcript