[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported a $22.2 million net loss for the nine months ended September 30, 2020, and completed its redomestication to Delaware [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $1.94 billion as of September 30, 2020, primarily due to a significant reduction in debt Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Total investments | $1,417,465 | $1,563,542 | | Cash and cash equivalents | $37,211 | $44,271 | | **Total assets** | **$1,939,757** | **$2,075,885** | | **Liabilities & Equity** | | | | Unpaid losses and loss adjustment expenses | $669,930 | $630,181 | | Debt | $126,253 | $296,640 | | Total liabilities | $1,219,044 | $1,349,076 | | Total shareholders' equity | $720,713 | $726,809 | | **Total liabilities and shareholders' equity** | **$1,939,757** | **$2,075,885** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a $22.2 million net loss for the nine months ended September 30, 2020, primarily due to investment losses Key Operating Results (in thousands, except per share data) | Metric | Q3 2020 | Q3 2019 | Nine Months 2020 | Nine Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Net earned premiums | $140,302 | $133,312 | $426,617 | $383,602 | | Total revenues | $159,913 | $142,234 | $425,274 | $428,559 | | Net losses and loss adjustment expenses | $97,148 | $73,583 | $242,092 | $201,979 | | Net income (loss) | $(15,170) | $6,721 | $(22,197) | $40,984 | | Diluted EPS | $(1.06) | $0.47 | $(1.56) | $2.86 | - The company incurred a **$3.06 million loss** on the extinguishment of debt in Q3 2020, which was not present in 2019[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to $33.9 million, with investing activities providing $139.5 million and financing using $180.5 million Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $33,936 | $45,930 | | Net cash provided by (used for) investing activities | $139,469 | $(67,730) | | Net cash provided by (used for) financing activities | $(180,465) | $484 | | **Net change in cash and cash equivalents** | **$(7,060)** | **$(21,316)** | - Financing activities in 2020 included a **$100 million redemption** of subordinated notes and a **$73.6 million net repayment** under the margin borrowing facility[21](index=21&type=chunk) [Notes to Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) Key notes detail the company's redomestication to a Delaware LLC, significant debt reduction, and a $10 million advisory fee - On **August 28, 2020**, the company completed a redomestication, changing its ultimate parent from a Cayman Islands entity to Global Indemnity Group, LLC, a **Delaware limited liability company**[23](index=23&type=chunk)[29](index=29&type=chunk) - The company manages its business through four segments: Commercial Specialty, Specialty Property, Farm, Ranch, & Stable, and Reinsurance Operations[24](index=24&type=chunk) - The company redeemed the entire **$100 million principal amount** of its 7.75% Subordinated Notes due 2045 in August 2020, resulting in a **$3.1 million loss** on extinguishment of debt[143](index=143&type=chunk) - A **$10.0 million advisory fee** was agreed to be paid to Fox Paine & Company, LLC for services related to the redomestication plan[188](index=188&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 2020 net loss to investment volatility and a $10 million advisory fee, with the combined ratio increasing - Recent developments include the completion of the redomestication to the U.S., redemption of **$100 million** in 2045 Notes, and maintaining an **"A" (Excellent)** financial strength rating from A.M. Best[262](index=262&type=chunk)[263](index=263&type=chunk)[265](index=265&type=chunk) - The global outbreak of COVID-19 presents significant risks, including potential reductions in premium volume, delays in premium collection, and increases in related claims[261](index=261&type=chunk) Consolidated Underwriting Ratios | Ratio | Nine Months 2020 | Nine Months 2019 | | :--- | :--- | :--- | | Loss ratio | 56.7% | 52.7% | | Expense ratio | 38.3% | 40.1% | | **Combined ratio** | **95.0%** | **92.8%** | [Results of Operations by Segment](index=59&type=section&id=MD%26A%20-%20Results%20of%20Operations%20by%20Segment) Segment results show varied premium changes, with Commercial Specialty growth offsetting declines in Specialty Property and Reinsurance Net Written Premiums by Segment (Nine Months Ended Sep 30, in thousands) | Segment | 2020 | 2019 | % Change | | :--- | :--- | :--- | :--- | | Commercial Specialty | $219,437 | $185,202 | 18.5% | | Specialty Property | $93,053 | $110,668 | (15.9%) | | Farm, Ranch, & Stable | $56,323 | $55,861 | 0.8% | | Reinsurance | $48,174 | $69,590 | (30.8%) | | **Total** | **$416,987** | **$421,321** | **(1.0%)** | Underwriting Income (Loss) by Segment (Nine Months Ended Sep 30, in thousands) | Segment | 2020 | 2019 | | :--- | :--- | :--- | | Commercial Specialty | $22,686 | $20,962 | | Specialty Property | $(6,523) | $4,372 | | Farm, Ranch, & Stable | $(2,587) | $(1,661) | | Reinsurance Operations | $9,200 | $5,581 | | **Total** | **$22,776** | **$29,254** | [Unallocated Corporate Items](index=73&type=section&id=MD%26A%20-%20Unallocated%20Corporate%20Items) Net investment income decreased 39.8%, and corporate expenses rose sharply due to redomestication costs and investment losses - Corporate expenses for the nine months of 2020 increased by **$22.3 million** year-over-year, primarily due to a **$10.0 million advisory fee** and increased legal/professional fees for the redomestication[375](index=375&type=chunk) - Net realized investment losses were **$22.3 million** for the first nine months of 2020, compared to a gain of **$11.3 million** in 2019, largely due to the impact of COVID-19 on equity securities and derivatives[372](index=372&type=chunk) - Interest expense decreased by **12.5%** for the nine-month period due to lower interest rates and the redemption of the 2045 Notes[376](index=376&type=chunk) [Liquidity and Capital Resources](index=75&type=section&id=MD%26A%20-%20Liquidity%20and%20Capital%20Resources) The company enhanced liquidity by redeeming $100 million in notes and repaying margin borrowings, and paid a $226 million dividend - In August 2020, the company redeemed the entire **$100 million** of its 2045 Notes and repaid all outstanding debt on its margin borrowing facility[393](index=393&type=chunk)[394](index=394&type=chunk) - In June 2020, Global Indemnity Reinsurance paid a **$226.0 million dividend** to its parent, Global Indemnity Limited, prior to the redomestication[387](index=387&type=chunk)[396](index=396&type=chunk) - Net cash from operations decreased to **$33.9 million** for the nine months of 2020 from **$45.9 million** in 2019, a decline of **$12.0 million**[389](index=389&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=78&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's investment portfolio maintains high quality with an AA- average rating and a 4.2-year duration, shifting towards MBS - The company's investment grade fixed income portfolio maintains a high quality with an **AA- average rating** and a duration of **4.2 years** as of September 30, 2020[407](index=407&type=chunk) - Portfolio purchases in **Q3 2020** were focused on Mortgage-Backed Securities (MBS) and US Treasury securities, funded by cash inflows and sales of other securities[407](index=407&type=chunk) [Controls and Procedures](index=79&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of September 30, 2020, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of **September 30, 2020**[410](index=410&type=chunk) - No material changes to the company's internal controls over financial reporting occurred during the quarter ended **September 30, 2020**[411](index=411&type=chunk) [PART II – OTHER INFORMATION](index=80&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=80&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings but does not expect a material adverse effect on its financial condition - The company does not believe that any currently pending legal proceedings will have a **material adverse effect** on its business, results of operations, cash flows, or financial condition[414](index=414&type=chunk) [Risk Factors](index=80&type=section&id=Item%201A.%20Risk%20Factors) New risk factors include shareholders being taxed on income regardless of dividends and more complex K-1 tax reporting - A new risk factor is that shareholders will be **taxed on their share of the company's income**, even if they do not receive corresponding **cash dividends**[417](index=417&type=chunk) - Shareholders will receive more complicated **IRS Schedules K-1** instead of **Forms 1099** and may need to file for tax extensions due to the timing of information[418](index=418&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=81&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2020, 396 Class A common shares were surrendered by employees to cover tax liabilities on vested restricted stock - In **Q3 2020**, **396 Class A common shares** were surrendered by employees to cover taxes on vested restricted stock[422](index=422&type=chunk) [Exhibits](index=82&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including governance documents related to the August 2020 redomestication - Exhibits filed include the Second Amended and Restated LLC Agreement, supplemental indentures for debt, and the Third Amended and Restated Management Agreement with Fox Paine & Company, LLC, all related to the **August 2020 redomestication**[426](index=426&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to 001-34809 Commission File Number GLOBAL INDEMNITY LIMITED (Exact name of registrant as specified in its charter) Cayman Islands 98-1304287 (State or other jurisdiction ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to 001-34809 Commission File Number GLOBAL INDEMNITY LIMITED (Exact name of registrant as specified in its charter) Cayman Islands 98-1304287 (State or other jurisdiction of incorporation or organization) (I.R.S. Em ...

[Part I](index=3&type=section&id=PART%20I) [Business](index=3&type=section&id=Item%201.%20BUSINESS) Global Indemnity Limited is a holding company providing specialty property and casualty insurance and reinsurance products across four segments, distributing through wholesale agents and brokers with a focus on disciplined underwriting and diversified investments [Business Segments](index=3&type=section&id=Business%20Segments) The company operates through four segments: Commercial Specialty, Specialty Property, Farm, Ranch, & Stable, and Reinsurance Operations, with a recent restructuring in Q1 2019 - In the first quarter of 2019, the Company bifurcated its Personal Lines segment into two new reportable segments: Specialty Property and Farm, Ranch, & Stable, and the Commercial Lines segment was also renamed to Commercial Specialty[17](index=17&type=chunk) Gross Written Premiums by Segment (2019 vs 2018) | Segment | 2019 GWP ($M) | 2018 GWP ($M) | Change | | :--- | :--- | :--- | :--- | | Commercial Specialty | $297.3 | $249.9 | +19.0% | | Specialty Property | $163.5 | $170.2 | -3.9% | | Farm, Ranch, & Stable | $87.7 | $79.7 | +10.0% | | Reinsurance Operations (Third Party) | $88.3 | $48.0 | +83.9% | [Geographic Concentration](index=6&type=section&id=Geographic%20Concentration) The company's gross written premiums are significantly concentrated in a few key states, with California, Texas, and Florida collectively accounting for 24.6% of the total in 2019 Geographic Distribution of Gross Written Premiums | State | 2019 Amount ($ thousands) | 2019 Percent | 2018 Amount ($ thousands) | 2018 Percent | | :--- | :--- | :--- | :--- | :--- | | California | $54,850 | 8.5% | $58,744 | 10.8% | | Texas | $54,381 | 8.5% | $49,544 | 9.1% | | Florida | $48,093 | 7.6% | $42,116 | 7.7% | | New York | $37,288 | 5.9% | $28,718 | 5.2% | | All other states | $237,039 | 37.2% | $214,212 | 39.1% | | Reinsurance Operations | $88,281 | 13.9% | $48,043 | 8.8% | | **Total** | **$636,861** | **100.0%** | **$547,897** | **100.0%** | [Marketing and Distribution](index=6&type=section&id=Marketing%20and%20Distribution) The company distributes products through wholesale general agents, program administrators, and brokers, with some concentration among its top non-affiliated partners - The company's distribution strategy focuses on maintaining strong relationships with a limited number of high-quality wholesale professional general agents and brokers[40](index=40&type=chunk) - In 2019, the top five non-affiliated partners accounted for **35.5%** of Commercial Specialty's gross written premiums and **37.9%** of Specialty Property's gross written premiums[36](index=36&type=chunk)[37](index=37&type=chunk) - Global Indemnity Reinsurance's 2019 gross written premiums were highly concentrated, with three treaties from three cedants accounting for **91%** of the segment's total[39](index=39&type=chunk) [Reinsurance of Underwriting Risk](index=9&type=section&id=Reinsurance%20of%20Underwriting%20Risk) The company utilizes third-party reinsurance to limit liability and protect against catastrophe losses, with significant receivables from highly-rated reinsurers - Effective June 1, 2019, the company purchased a new property catastrophe treaty providing three layers of coverage for losses of **$275 million** in excess of **$25 million**, replacing the previous treaty that provided **$250 million** in excess of **$50 million**[59](index=59&type=chunk)[60](index=60&type=chunk) - The Casualty Excess of Loss treaty, effective since January 1, 2018, provides coverage of **$10 million** per occurrence in excess of a **$2 million** retention, subject to a **$20 million** aggregate limit[64](index=64&type=chunk) Top Reinsurers by Gross Reinsurance Receivables (as of Dec 31, 2019) | Reinsurer | A.M. Best Rating | Gross Reinsurance Receivables ($M) | Percent of Total | | :--- | :--- | :--- | :--- | | Munich Re America Corp. | A+ | $44.1 | 47.4% | | General Reinsurance Corp. | A++ | $7.5 | 8.0% | | Arch Reinsurance Company | A+ | $5.1 | 5.5% | | Westport Insurance Corporation | A+ | $4.8 | 5.1% | | **Subtotal (Top 10)** | | **$74.6** | **80.0%** | [Reserves for Unpaid Losses and Loss Adjustment Expenses](index=12&type=section&id=Reserves%20for%20Unpaid%20Losses%20and%20Loss%20Adjustment%20Expenses) The company establishes and reviews reserves for unpaid losses and loss adjustment expenses quarterly by in-house actuaries and annually by independent external actuaries, with specific exposure to Asbestos and Environmental claims - The company's reserves are reviewed quarterly by in-house actuarial staff and annually by independent external actuaries, with management responsible for the final determination of loss reserve selections[75](index=75&type=chunk)[76](index=76&type=chunk) Net A&E Loss Reserves (as of Dec 31, 2019) | Exposure Type | Net Loss Reserves ($M) | | :--- | :--- | | Asbestos-related claims | $15.8 | | Environmental claims | $13.2 | [Investments](index=13&type=section&id=Investments) The company's $1.61 billion investment portfolio, managed by third-party advisors, is primarily composed of high-quality fixed maturities and equity securities Investment Portfolio Summary (as of Dec 31, 2019) | Asset Class | Estimated Fair Value ($ thousands) | Percent of Total | | :--- | :--- | :--- | | Total fixed maturities | $1,253,159 | 77.9% | | Equity securities | $263,104 | 16.4% | | Other invested assets | $47,279 | 2.9% | | Cash and cash equivalents | $44,271 | 2.8% | | **Total** | **$1,607,813** | **100.0%** | - As of December 31, 2019, **94.9%** of the company's fixed income securities are investment grade, with **12.7%** rated AAA[92](index=92&type=chunk)[93](index=93&type=chunk) - Net realized investment gains were **$35.3 million** in 2019, a significant increase from **$16.9 million** in 2018 and **$1.6 million** in 2017[96](index=96&type=chunk) [Regulation](index=17&type=section&id=Regulation) The company is subject to extensive regulation by state insurance departments in the U.S. and the Bermuda Monetary Authority for its reinsurance subsidiary, covering solvency, investments, and capital requirements - The company's U.S. insurance subsidiaries are subject to state insurance holding company laws, which regulate transactions among affiliates and require prior approval for any acquisition of control (presumed at **10%** or more of voting securities)[106](index=106&type=chunk)[109](index=109&type=chunk) - The U.S. subsidiaries' capital and surplus levels were above the prescribed risk-based capital requirements in their 2019 statutory filings[114](index=114&type=chunk) - Global Indemnity Reinsurance is registered as a Class 3B insurer in Bermuda and is regulated by the BMA, whose regulatory framework has been granted full "Solvency II equivalence" by the European Commission[126](index=126&type=chunk)[130](index=130&type=chunk) [Risk Factors](index=26&type=page&id=Item%201A.%20RISK%20FACTORS) The company faces numerous material risks, including potential for claims to exceed reserves, catastrophic losses, operational failures, rating downgrades, reinsurer credit risk, investment volatility, competitive pressures, distribution partner dependence, and adverse tax law changes - The company's success is highly dependent on accurately assessing risks and establishing adequate loss reserves, as an underestimation could materially harm financial condition and results[172](index=172&type=chunk) - A decline in the "A" (Excellent) rating from A.M. Best for its insurance or reinsurance subsidiaries could significantly harm the company's competitive position and reduce premium volume[187](index=187&type=chunk) - The Tax Cuts and Jobs Act of 2017 (TCJA) introduced changes, including a Base Erosion Minimum Tax (BEAT), that could materially affect the tax treatment of U.S. subsidiaries and reduce the benefits of being a non-U.S. company[239](index=239&type=chunk) [Unresolved Staff Comments](index=39&type=section&id=Item%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved staff comments from the SEC - None[258](index=258&type=chunk) [Properties](index=39&type=section&id=Item%202.%20PROPERTIES) The company leases office space for its principal executive offices in Pennsylvania and additional offices in Arizona, Nebraska, Bermuda, and Ireland, having closed field offices in California and Georgia in Q1 2020 - The company's principal executive offices are in leased space in Bala Cynwyd, Pennsylvania, and it also leases offices in Arizona, Nebraska, Bermuda, and Ireland to support its various segments[259](index=259&type=chunk) [Legal Proceedings](index=40&type=section&id=Item%203.%20LEGAL%20PROCEEDINGS) The company is involved in various legal proceedings in the ordinary course of business, but management does not expect a material adverse effect on its financial condition or operations - The company does not expect any currently pending legal proceedings to have a material adverse effect on its business or financial condition[260](index=260&type=chunk) [Mine Safety Disclosures](index=40&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) The company reports no mine safety disclosures - None[262](index=262&type=chunk) [Part II](index=41&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=41&type=section&id=Item%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's A ordinary shares trade on NASDAQ, and it adopted a dividend program in 2017, paying $0.25 per share quarterly in 2019 and 2018, while also repurchasing shares for tax withholding purposes - The company's A ordinary shares are traded on the NASDAQ under the symbol "GBLI", with no public market for its B ordinary shares[265](index=265&type=chunk)[266](index=266&type=chunk) Annual Dividends Paid | Year | Dividend per Share | Total Dividends Paid ($M) | | :--- | :--- | :--- | | 2019 | $1.00 | $14.2 | | 2018 | $1.00 | $14.0 | | 2017 | $0.00 | $0.0 | - In 2019, the company purchased **27,028** of its A ordinary shares from employees for **$0.9 million** to cover tax liabilities upon the vesting of restricted stock[271](index=271&type=chunk) [Selected Financial Data](index=44&type=section&id=Item%206.%20SELECTED%20FINANCIAL%20DATA) The company's financial performance in 2019 showed a strong recovery with net income of $70.0 million and a combined ratio of 92.2%, indicating a return to underwriting profitability and growth in gross written premiums Selected Consolidated Financial Data (2017-2019) | Metric (in thousands, except per share data) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Gross written premiums | $636,861 | $547,897 | $516,334 | | Total revenues | $604,472 | $498,938 | $485,515 | | Net income (loss) | $70,015 | $(56,696) | $(9,551) | | Diluted EPS | $4.88 | $(4.02) | $(0.55) | | Total assets | $2,075,885 | $1,960,266 | $2,001,669 | | Total shareholders' equity | $726,809 | $629,059 | $718,394 | | Book value per share | $50.82 | $44.21 | $50.57 | Consolidated Insurance Operating Ratios (2017-2019) | Ratio | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Loss ratio | 52.5% | 71.5% | 61.5% | | Expense ratio | 39.7% | 40.8% | 41.9% | | Combined ratio | 92.2% | 112.3% | 103.4% | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) In 2019, Global Indemnity achieved a significant turnaround with net income of $70.0 million, driven by a 16.2% increase in gross written premiums and a substantial improvement in underwriting results due to lower catastrophe losses and favorable prior year reserve development [Critical Accounting Estimates and Policies](index=47&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) The company's most critical accounting estimates involve significant judgment, particularly the liability for unpaid losses and loss adjustment expenses, along with other key estimates like reinsurance recoverability, investment fair value, and impairment testing - The liability for unpaid losses and loss adjustment expenses is considered the most significant accounting estimate, requiring complex actuarial analysis and management judgment[306](index=306&type=chunk) Gross and Net Loss Reserves by Segment (as of Dec 31, 2019) | Segment (in thousands) | Gross Reserves | Net Reserves | | :--- | :--- | :--- | | Commercial Specialty | $390,148 | $330,944 | | Specialty Property | $50,334 | $40,245 | | Farm, Ranch, & Stable | $45,601 | $38,621 | | Reinsurance Operations | $144,098 | $144,098 | | **Total** | **$630,181** | **$553,908** | - A hypothetical **5%** increase in both frequency and severity for the current accident year would increase net losses by approximately **$31.6 million**[330](index=330&type=chunk) [Results of Operations](index=55&type=section&id=Results%20of%20Operations) The company's 2019 results showed a strong recovery with underwriting income of $43.3 million, driven by a 16.2% increase in gross written premiums and a significant improvement in the loss ratio due to lower catastrophe losses and favorable prior year development Consolidated Results Summary (2019 vs 2018) | Metric (in thousands) | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | Gross written premiums | $636,861 | $547,897 | 16.2% | | Net earned premiums | $525,262 | $467,775 | 12.3% | | Underwriting income (loss) | $43,273 | $(55,900) | NM | | Net income (loss) | $70,015 | $(56,696) | NM | Underwriting Ratios (2019 vs 2018) | Ratio | 2019 | 2018 | | :--- | :--- | :--- | | Loss ratio | 52.5% | 71.5% | | Expense ratio | 39.7% | 40.8% | | Combined ratio | 92.2% | 112.3% | [Liquidity and Capital Resources](index=70&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary funds come from underwriting and investment income, with net cash from operations at $32.4 million in 2019, and its subsidiaries maintain capital levels exceeding regulatory requirements despite dividend limitations - Net cash provided by operating activities was **$32.4 million** in 2019, compared to **$42.1 million** in 2018[446](index=446&type=chunk) - The company's U.S. insurance subsidiaries have a maximum dividend capacity of approximately **$29.6 million** in 2020 without prior regulatory approval[438](index=438&type=chunk)[439](index=439&type=chunk)[441](index=441&type=chunk)[442](index=442&type=chunk) Contractual Obligations (as of Dec 31, 2019) | Obligation (in thousands) | Total | Less than 1 year | 1 – 3 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | | Operating leases | $26,959 | $1,931 | $5,438 | $14,142 | | Subordinated notes due 2045 | $299,563 | $7,750 | $15,500 | $260,813 | | Subordinated notes due 2047 | $411,531 | $10,238 | $20,475 | $360,343 | | Unpaid losses & loss adjustment expenses | $630,181 | $273,499 | $207,960 | $64,909 | [Quantitative and Qualitative Disclosures About Market Risk](index=76&type=section&id=Item%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks include interest rate risk, credit risk, and equity price risk, with a hypothetical 100 basis point increase in interest rates decreasing the fixed income portfolio's market value by 4.4% and a 10% decrease in equity prices reducing shareholders' equity by 2.3% Interest Rate Sensitivity of Fixed Income Portfolio (as of Dec 31, 2019) | Basis Point Change | Change in Market Value ($ thousands) | % Change | | :--- | :--- | :--- | | (100) | $55,711 | 4.4% | | 100 | $(55,716) | (4.4%) | | 200 | $(111,444) | (8.9%) | Equity Price Risk Sensitivity (as of Dec 31, 2019) | Hypothetical Price Change | Hypothetical % Change in Shareholders' Equity | | :--- | :--- | | (20%) | (4.5%) | | (10%) | (2.3%) | | 10% | 2.3% | | 20% | 4.5% | [Financial Statements and Supplementary Data](index=79&type=section&id=Item%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents the company's audited consolidated financial statements for the fiscal year ended December 31, 2019, including balance sheets, statements of operations, comprehensive income, changes in shareholders' equity, and cash flows, along with accompanying notes and supplementary schedules [Consolidated Financial Statements](index=81&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show Global Indemnity Limited's financial position and performance, with total assets of $2.08 billion, total liabilities of $1.35 billion, total shareholders' equity of $726.8 million, total revenues of $604.5 million, and net income of $70.0 million for 2019 Consolidated Balance Sheet Highlights (as of Dec 31, 2019) | Account (in thousands) | Amount | | :--- | :--- | | Total investments | $1,563,542 | | Total assets | $2,075,885 | | Unpaid losses and loss adjustment expenses | $630,181 | | Total liabilities | $1,349,076 | | Total shareholders' equity | $726,809 | Consolidated Statement of Operations Highlights (Year Ended Dec 31, 2019) | Account (in thousands) | Amount | | :--- | :--- | | Net earned premiums | $525,262 | | Total revenues | $604,472 | | Net losses and loss adjustment expenses | $275,402 | | Net income | $70,015 | [Notes to Consolidated Financial Statements](index=86&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of accounting policies and financial statement line items, covering investments, reinsurance, income taxes, loss reserves, debt, shareholders' equity, related party transactions, share-based compensation, statutory information, and segment details - Note 9 details the activity in the liability for unpaid losses, showing a net favorable prior year development of **$32.8 million** in 2019, primarily from the Commercial Specialty, Specialty Property, and Farm, Ranch, & Stable segments[658](index=658&type=chunk)[659](index=659&type=chunk) - Note 10 describes the company's outstanding debt, including **$100.0 million** of 7.75% Subordinated Notes due 2045, **$130.0 million** of 7.875% Subordinated Notes due 2047, and a **$73.6 million** balance on a margin borrowing facility as of year-end 2019[714](index=714&type=chunk) - Note 13 discloses transactions with Fox Paine Entities, including an annual management fee of **$2.1 million** in 2019 and a **$12.5 million** advisory fee paid in 2018 related to a corporate reorganization[754](index=754&type=chunk)[757](index=757&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=151&type=section&id=Item%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[846](index=846&type=chunk) [Controls and Procedures](index=151&type=section&id=Item%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2019, with an unqualified opinion from Ernst & Young LLP - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2019[846](index=846&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2019, with no material weaknesses identified[850](index=850&type=chunk) [Other Information](index=153&type=section&id=Item%209B.%20OTHER%20INFORMATION) The company reports no other information - None[860](index=860&type=chunk) [Part III](index=154&type=section&id=PART%20III) [Directors, Executive Officers, and Corporate Governance](index=154&type=section&id=Item%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%2C%20AND%20CORPORATE%20GOVERNANCE) Information regarding directors, executive officers, and corporate governance practices is incorporated by reference from the company's definitive proxy statement for its 2020 Annual Meeting of Shareholders - Information is incorporated by reference from the Registrant's Proxy Statement for the 2020 Annual Meeting of Shareholders[863](index=863&type=chunk) [Executive Compensation](index=154&type=section&id=Item%2011.%20EXECUTIVE%20COMPENSATION) Information regarding executive compensation is incorporated by reference from the company's definitive proxy statement for its 2020 Annual Meeting of Shareholders - Information is incorporated by reference from the Registrant's Proxy Statement for the 2020 Annual Meeting of Shareholders[864](index=864&type=chunk) [Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters](index=154&type=section&id=Item%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%2C%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Information concerning security ownership of certain beneficial owners, management, and related stockholder matters is incorporated by reference from the company's definitive proxy statement for its 2020 Annual Meeting of Shareholders - Information is incorporated by reference from the Registrant's Proxy Statement for the 2020 Annual Meeting of Shareholders[865](index=865&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=154&type=section&id=Item%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Information regarding certain relationships, related party transactions, and director independence is incorporated by reference from the company's definitive proxy statement for its 2020 Annual Meeting of Shareholders - Information is incorporated by reference from the Registrant's Proxy Statement for the 2020 Annual Meeting of Shareholders[866](index=866&type=chunk) [Principal Accountant Fees and Services](index=154&type=section&id=Item%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) Information concerning principal accountant fees and services is incorporated by reference from the company's definitive proxy statement for its 2020 Annual Meeting of Shareholders - Information is incorporated by reference from the Registrant's Proxy Statement for the 2020 Annual Meeting of Shareholders[867](index=867&type=chunk) [Part IV](index=155&type=section&id=PART%20IV) [Exhibits, Financial Statement Schedules](index=155&type=section&id=Item%2015.%20EXHIBITS%2C%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists the financial statements, financial statement schedules, and exhibits filed as part of the Form 10-K report, including consents and certifications - This section contains a list of all financial statements, schedules, and exhibits filed with the Form 10-K[871](index=871&type=chunk) [Form 10-K Summary](index=158&type=section&id=Item%2016.%20FORM%2010-K%20SUMMARY) The company reports no Form 10-K summary - None[875](index=875&type=chunk)

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Global Indemnity Limited as of and for the periods ended September 30, 2019 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of September 30, 2019, total assets increased to $2.08 billion from $1.96 billion at year-end 2018, driven by a rise in total investments Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2019 (Unaudited) | Dec 31, 2018 | | :--- | :--- | :--- | | **Total Assets** | **$2,084,156** | **$1,960,266** | | Total Investments | $1,536,854 | $1,410,655 | | Cash and cash equivalents | $78,181 | $99,497 | | **Total Liabilities** | **$1,376,772** | **$1,331,207** | | Unpaid losses and loss adjustment expenses | $633,287 | $680,031 | | Debt | $297,324 | $288,565 | | **Total Shareholders' Equity** | **$707,384** | **$629,059** | | Accumulated other comprehensive income (loss) | $25,314 | $(21,231) | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For the nine months ended September 30, 2019, net income surged to $41.0 million from $16.6 million in the prior-year period, driven by higher net premiums earned and a significant increase in net realized investment gains Key Operating Results (in thousands, except per share data) | Metric | Q3 2019 | Q3 2018 | 9 Months 2019 | 9 Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Gross Premiums Written | $157,177 | $135,606 | $478,699 | $418,670 | | Net Premiums Earned | $133,312 | $120,528 | $383,602 | $342,447 | | Total Revenues | $142,234 | $138,008 | $428,559 | $385,677 | | Net Losses and LAE | $73,583 | $80,493 | $201,979 | $195,426 | | **Net Income** | **$6,721** | **$3,728** | **$40,984** | **$16,621** | | Diluted EPS | $0.47 | $0.26 | $2.86 | $1.16 | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for the nine months ended September 30, 2019 was $87.5 million, a significant turnaround from a comprehensive loss of $6.2 million in the same period of 2018 Comprehensive Income (Loss) (in thousands) | Component | Q3 2019 | Q3 2018 | 9 Months 2019 | 9 Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $6,721 | $3,728 | $40,984 | $16,621 | | Other Comprehensive Income (Loss) | $8,772 | $(1,354) | $46,545 | $(22,784) | | **Comprehensive Income (Loss)** | **$15,493** | **$2,374** | **$87,529** | **$(6,163)** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2019, net cash provided by operating activities was stable at $45.9 million Cash Flow Summary (in thousands) | Activity | 9 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $45,930 | $45,871 | | Net cash used for investing activities | $(67,730) | $(54,491) | | Net cash provided by (used for) financing activities | $484 | $(25,148) | | **Net change in cash and cash equivalents** | **$(21,316)** | **$(33,768)** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's accounting policies and financial data - In Q1 2019, the company bifurcated its Personal Lines segment into two new reportable segments: **Specialty Property** and **Farm, Ranch, & Stable**, and renamed Commercial Lines to **Commercial Specialty**[25](index=25&type=chunk) - The company adopted new lease accounting guidance on January 1, 2019, recognizing right-of-use lease assets of **$25.3 million** and lease liabilities of **$25.4 million** upon adoption[218](index=218&type=chunk) - For the nine months ended September 30, 2019, the company experienced favorable prior year loss reserve development of **$23.0 million**, primarily from the **Commercial Specialty** and **Specialty Property** segments[115](index=115&type=chunk)[121](index=121&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=51&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for the third quarter and first nine months of 2019, covering underwriting results by segment, investment performance, and liquidity Consolidated Results Summary (in thousands) | Metric | 9 Months 2019 | 9 Months 2018 | % Change | | :--- | :--- | :--- | :--- | | Gross Premiums Written | $478,699 | $418,670 | 14.3% | | Underwriting Income | $29,254 | $7,114 | 311.2% | | Net Income | $40,984 | $16,621 | 146.6% | | Combined Ratio | 92.8% | 98.3% | (5.5) pts | - The increase in net income for the first nine months of 2019 was driven by improved underwriting results and a **$12.5 million** advisory fee incurred in 2018 but not in 2019[339](index=339&type=chunk)[343](index=343&type=chunk) - The Reinsurance Operations segment saw gross premiums written increase by **74.1%** in the first nine months of 2019, largely due to a new casualty treaty which contributed **$20.1 million**[252](index=252&type=chunk)[257](index=257&type=chunk) [Underwriting Results: Commercial Specialty](index=57&type=section&id=MD%26A_Underwriting_Results_Commercial_Specialty) The Commercial Specialty segment reported strong underwriting income of $21.0 million for the first nine months of 2019, up 87.9% from the prior year Commercial Specialty Underwriting Ratios | Ratio | 9 Months 2019 | 9 Months 2018 | Point Change | | :--- | :--- | :--- | :--- | | Calendar Year Loss Ratio | 47.2% | 52.6% | (5.4) | | Expense Ratio | 40.7% | 40.3% | 0.4 | | **Combined Ratio** | **87.9%** | **92.9%** | **(5.0)** | - The segment's calendar year loss ratio for the nine months of 2019 included **$12.1 million (7.0 points)** of favorable prior year reserve development[282](index=282&type=chunk)[284](index=284&type=chunk) [Underwriting Results: Specialty Property](index=60&type=section&id=MD%26A_Underwriting_Results_Specialty_Property) The Specialty Property segment swung from an underwriting loss of $11.8 million in the first nine months of 2018 to an underwriting income of $4.4 million in 2019 Specialty Property Underwriting Ratios | Ratio | 9 Months 2019 | 9 Months 2018 | Point Change | | :--- | :--- | :--- | :--- | | Calendar Year Loss Ratio | 55.1% | 70.2% | (15.1) | | Expense Ratio | 42.2% | 43.0% | (0.8) | | **Combined Ratio** | **97.3%** | **113.2%** | **(15.9)** | - The current accident year catastrophe loss ratio improved by **10.8 points** for the nine-month period, reflecting lower claims frequency and severity[298](index=298&type=chunk) - The segment recognized **$10.5 million (10.0 points)** of favorable prior year reserve development in the first nine months of 2019[300](index=300&type=chunk) [Underwriting Results: Farm, Ranch, & Stable](index=63&type=section&id=MD%26A_Underwriting_Results_Farm%2C%20Ranch%2C%20%26%20Stable) The Farm, Ranch, & Stable segment reported an underwriting loss of $1.7 million for the first nine months of 2019, compared to income of $0.2 million in the prior year Farm, Ranch, & Stable Underwriting Ratios | Ratio | 9 Months 2019 | 9 Months 2018 | Point Change | | :--- | :--- | :--- | :--- | | Calendar Year Loss Ratio | 60.9% | 56.1% | 4.8 | | Expense Ratio | 42.4% | 43.7% | (1.3) | | **Combined Ratio** | **103.3%** | **99.8%** | **3.5** | - The current accident year non-catastrophe property loss ratio increased by **13.4 points** in the first nine months of 2019 due to higher claims frequency and severity[315](index=315&type=chunk) [Underwriting Results: Reinsurance Operations](index=66&type=section&id=MD%26A_Underwriting_Results_Reinsurance_Operations) The Reinsurance Operations segment's underwriting income decreased to $5.6 million for the first nine months of 2019 from $7.6 million in 2018 Reinsurance Operations Underwriting Ratios | Ratio | 9 Months 2019 | 9 Months 2018 | Point Change | | :--- | :--- | :--- | :--- | | Calendar Year Loss Ratio | 57.7% | 41.1% | 16.6 | | Expense Ratio | 31.4% | 36.9% | (5.5) | | **Combined Ratio** | **89.1%** | **78.0%** | **11.1** | - The current accident year loss ratio improved by **12.4 points** for the nine-month period, reflecting better performance in both property and casualty treaties[329](index=329&type=chunk) [Liquidity and Capital Resources](index=68&type=section&id=MD%26A_Liquidity%20and%20Capital%20Resources) The company maintains liquidity through its holding company structure, with principal sources of cash being dividends from subsidiaries, underwriting operations, and investment income - Global Indemnity is a holding company whose liquidity depends on dividends from its subsidiaries, which are subject to regulatory restrictions[345](index=345&type=chunk)[350](index=350&type=chunk) - As of September 30, 2019, the company had future funding commitments of **$43.2 million** related to alternative investments[349](index=349&type=chunk) - Net cash provided by operating activities was **$45.9 million** for the nine months ended September 30, 2019, consistent with the prior year period[354](index=354&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) In Q3 2019, global equity and fixed income markets generated positive returns amidst sluggish global growth, geopolitical tensions, and monetary easing by central banks - The company's investment grade fixed income portfolio has an average rating of **A+** and a duration of **3.7 years** as of September 30, 2019[368](index=368&type=chunk) - During Q3 2019, the portfolio's allocation to **Mortgage-Backed Securities (MBS)** and investment grade credit increased, while exposure to government securities decreased[368](index=368&type=chunk) [Controls and Procedures](index=71&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of September 30, 2019 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2019[369](index=369&type=chunk) - No material changes to internal controls over financial reporting occurred during the quarter ended September 30, 2019[370](index=370&type=chunk) [PART II – OTHER INFORMATION](index=72&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=72&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings in the ordinary course of business but does not believe their resolution will have a material adverse effect on its financial condition - The company does not expect any currently pending legal proceedings to have a material adverse effect on its business, results of operations, or financial condition[373](index=373&type=chunk) [Risk Factors](index=72&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2018 Annual Report on Form 10-K - Risk factors identified in the 2018 Annual Report on Form 10-K have not materially changed[375](index=375&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter ended September 30, 2019, no A ordinary shares were surrendered by employees as payment for tax liabilities on vested restricted stock - No shares were surrendered by employees for tax payments during the quarter ended September 30, 2019[376](index=376&type=chunk) [Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications from the CEO and CFO pursuant to the Sarbanes-Oxley Act of 2002 and the XBRL interactive data files - Exhibits filed include CEO and CFO certifications under **Sarbanes-Oxley Sections 302 and 906**, and **XBRL financial data**[380](index=380&type=chunk)

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Global Indemnity Limited's unaudited consolidated financial statements for Q2 and H1 2019, covering balance sheets, income, and cash flow, with detailed accounting notes [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The company's total assets increased to **$2.02 billion** as of June 30, 2019, driven by investments, while net income significantly rose in Q2 and H1 2019, despite a decrease in net cash from operating activities Consolidated Balance Sheet Highlights | Financial Metric | June 30, 2019 (Unaudited, thousands USD) | December 31, 2018 (thousands USD) | | :--- | :--- | :--- | | Total Investments | $1,509,777 | $1,410,655 | | Cash and cash equivalents | $56,215 | $99,497 | | Total Assets | $2,015,472 | $1,960,266 | | Total Liabilities | $1,320,960 | $1,331,207 | | Total Shareholders' Equity | $694,512 | $629,059 | Consolidated Statements of Operations Highlights | Income Statement Highlights | Q2 2019 (thousands USD) | Q2 2018 (thousands USD) | Six Months 2019 (thousands USD) | Six Months 2018 (thousands USD) | | :--- | :--- | :--- | :--- | :--- | | Gross Premiums Written | $179,321 | $158,817 | $321,522 | $283,064 | | Net Premiums Earned | $128,201 | $113,917 | $250,290 | $221,919 | | Total Revenues | $146,139 | $128,025 | $286,325 | $247,669 | | Net Income | $14,663 | $7,192 | $34,263 | $12,893 | | Diluted EPS | $1.02 | $0.50 | $2.39 | $0.90 | Consolidated Statements of Cash Flows Highlights | Cash Flow Highlights (Six Months Ended June 30) | 2019 (thousands USD) | 2018 (thousands USD) | | :--- | :--- | :--- | | Net cash provided by (used for) operating activities | $(3,135) | $58,960 | | Net cash used for investing activities | $(35,484) | $(69,901) | | Net cash used for financing activities | $(4,663) | $(16,335) | | Net change in cash and cash equivalents | $(43,282) | $(27,276) | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies and provide breakdowns of financial statement items, including business re-segmentation, investment portfolio analysis, favorable prior-year loss development, and new lease accounting standard adoption - In Q1 2019, the Company re-evaluated its segments, bifurcating the Personal Lines segment into '**Specialty Property**' and '**Farm, Ranch, & Stable**', and renaming Commercial Lines to '**Commercial Specialty**', reflecting a shift in management and reporting structure[27](index=27&type=chunk)[189](index=189&type=chunk) - The company's investment portfolio totaled **$1.51 billion** at fair value as of June 30, 2019, up from **$1.41 billion** at year-end 2018, primarily composed of **$1.20 billion** in fixed maturities and **$262.0 million** in equity securities[32](index=32&type=chunk) - For the six months ended June 30, 2019, the company reduced its prior accident year loss reserves by **$16.1 million**, indicating **favorable development**, driven by decreases in **Commercial Specialty ($6.9M)**, **Specialty Property ($9.2M)**, and **Farm, Ranch, & Stable ($2.8M)**, partially offset by a **$2.9 million increase** in Reinsurance Operations[125](index=125&type=chunk) - Effective January 1, 2019, the company adopted a **new lease accounting standard**, resulting in the recognition of right-of-use lease assets of **$25.3 million** and lease liabilities of **$25.4 million** on the balance sheet[136](index=136&type=chunk)[232](index=232&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a **13.6% increase** in gross premiums written and significant growth in underwriting and net income for H1 2019, while detailing segment performance and cash flow trends Key Financial Performance Metrics | Key Metrics (Six Months Ended June 30) | 2019 (Millions USD) | 2018 (Millions USD) | % Change | | :--- | :--- | :--- | :--- | | Gross Premiums Written | $321.5M | $283.1M | 13.6% | | Net Premiums Earned | $250.3M | $221.9M | 12.8% | | Underwriting Income | $22.6M | $15.3M | 47.4% | | Net Income | $34.3M | $12.9M | 165.7% | | Combined Ratio | 91.4% | 93.5% | (2.1 pts) | - The increase in gross premiums written was driven by new programs in **Commercial Specialty**, rate increases and a new watercraft product in **Specialty Property**, new agents in **Farm, Ranch, & Stable**, and growth in the **Reinsurance segment's** property catastrophe book and a new casualty treaty[266](index=266&type=chunk) - Corporate and other operating expenses **decreased significantly** to **$7.8 million** for the first six months of 2019 from **$20.2 million** in 2018, primarily due to a **$12.5 million advisory fee** in the prior period related to a co-obligor transaction[352](index=352&type=chunk) - Net cash from operating activities **decreased by $62.1 million** year-over-year, primarily due to a **$45.0 million recovery** on loss indemnification received in 2018 that did not recur in 2019, and higher net losses paid in 2019[367](index=367&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's investment grade fixed income portfolio maintains high quality with a **3.6-year duration**, and no material changes to market risk have occurred since year-end 2018 - The company's investment grade fixed income portfolio had an average rating of **A+** and a duration of **3.6 years** as of Q2 2019[381](index=381&type=chunk) - During the second quarter, the portfolio's allocation to **governments, MBS, and CMBS increased**, while exposure to **investment grade credit and taxable municipals decreased**[381](index=381&type=chunk) [Item 4. Controls and Procedures](index=71&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2019, with **no material changes** to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2019[382](index=382&type=chunk) - **No material changes** in internal controls over financial reporting occurred during the quarter ended June 30, 2019[383](index=383&type=chunk) [PART II – OTHER INFORMATION](index=72&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=72&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings but does **not expect** a **material adverse effect** on its financial condition, noting potential disputes with runoff reinsurers - The company does **not expect** any currently pending legal proceedings to have a **material adverse effect** on its business, results of operations, cash flows, or financial condition[385](index=385&type=chunk) [Item 1A. Risk Factors](index=72&type=section&id=Item%201A.%20Risk%20Factors) **No material changes** have occurred to the risk factors previously disclosed in the company's 2018 Annual Report on Form 10-K - The risk factors identified in the Company's 2018 Annual Report on Form 10-K have **not materially changed**[387](index=387&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company's Share Incentive Plan allows employees to surrender A ordinary shares for tax liabilities, but **no A ordinary shares were surrendered** during Q2 2019 - **No A ordinary shares were surrendered** by employees as payment for tax liability during the quarter ended June 30, 2019[388](index=388&type=chunk) [Item 6. Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL-formatted financial information

Premiums and Income - Gross premiums written increased by 14.5% to $142.2 million for the quarter ended March 31, 2019, compared to $124.2 million in the same period of 2018[216]. - Net premiums written rose by 14.4% to $123.4 million in Q1 2019, up from $107.9 million in Q1 2018[216]. - Net premiums earned increased by 13.0% to $122.1 million for the quarter ended March 31, 2019, compared to $108.0 million in the prior year[216]. - Underwriting income surged by 94.0% to $14.5 million in Q1 2019, compared to $7.5 million in Q1 2018[216]. - Net income for the quarter reached $19.6 million, a significant increase of 243.8% from $5.7 million in the same quarter of 2018[216]. Loss Ratios and Operational Efficiency - The loss ratio improved to 47.8% in Q1 2019 from 51.9% in Q1 2018, indicating better underwriting profitability[217]. - The combined ratio decreased to 88.5% in Q1 2019 from 93.6% in Q1 2018, reflecting improved operational efficiency[218]. - The current accident year loss ratio for the Commercial Specialty segment improved to 50.9% in Q1 2019 from 58.6% in Q1 2018[236]. - The Company’s total net losses and loss adjustment expenses for Q1 2019 were $21.7 million, down from $25.0 million in Q1 2018, resulting in a loss ratio of 38.9%[240]. - The total accident year losses for the quarter ended March 31, 2019, were $28,317 million, a 2.1% increase from $27,734 million in 2018[244]. Segment Performance - A new casualty treaty contributed $4.2 million in gross premiums written during the quarter ended March 31, 2019[199]. - The Commercial Specialty segment saw a 19.4% increase in gross premiums written, reaching $64.2 million in Q1 2019[221]. - The Reinsurance segment experienced a substantial growth of 70.2% in gross premiums written, totaling $17.5 million in Q1 2019[221]. - Net premiums earned in the Commercial Specialty segment increased by 17.5% to $55.6 million in Q1 2019 from $47.4 million in Q1 2018[226]. - Specialty Property segment net premiums earned rose by 1.9% to $31.9 million in Q1 2019 compared to $31.1 million in Q1 2018[227]. Reserves and Ratios - The total gross reserves as of March 31, 2019, were recorded at $646.0 million, with net reserves at $548.9 million[232]. - The combined ratio for the Commercial Specialty segment improved to 79.9% in Q1 2019 from 93.4% in Q1 2018, reflecting a 13.5% decrease[236]. - The expense ratio for the Company's Commercial Specialty segment increased by 0.5 points to 41.0% in Q1 2019 from 40.5% in Q1 2018[248]. - The current accident year loss ratio for the Farm, Ranch, & Stable segment increased by 10.3 points to 59.6% in Q1 2019 from 49.3% in Q1 2018[267]. Investment and Expenses - Net investment income decreased by 36.7% to $7,219 million in Q1 2019 from $11,404 million in Q1 2018, attributed to decreased returns from alternative investments[291][292]. - The Company reported net realized investment gains of $10,390 million in Q1 2019, a significant improvement compared to a loss of $316 million in Q1 2018[294]. - Corporate and other operating expenses decreased to $3.2 million in Q1 2019 from $9.3 million in Q1 2018, mainly due to a prior year advisory fee of $6.3 million[296]. - Interest expense increased by 3.3% in Q1 2019 compared to Q1 2018, primarily due to higher interest rates on the Margin Borrowing Facility[297]. Cash Flow and Dividends - Net cash used for operating activities was ($23.2) million for the quarter, a decrease of approximately $64.4 million compared to $41.2 million provided in the same quarter of 2018[307]. - The company paid dividends of $3.5 million on March 29, 2019, following a Board approval for a dividend payment of $0.25 per ordinary share[309]. - The company did not declare or pay any dividends during the quarter ended March 31, 2019, for its U.S. insurance companies due to regulatory restrictions[304]. Market Performance - Global equities surged by 12.4% in Q1 2019, marking the best quarterly return since September 2009, driven by trade negotiations and central bank policies[319].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2018 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ___________ to ___________ 001-34809 Commission File Number GLOBAL INDEMNITY LIMITED (Exact name of registrant as specified in its charter) Cayman Islands (State or other jur ...