Global Indemnity Group(GBLI) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section provides the unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Financial Statements This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive income, changes in shareholders' equity, and cash flows, along with detailed explanatory notes Consolidated Balance Sheets This section details the company's financial position, showing assets, liabilities, and shareholders' equity at specific reporting dates - The company's total assets slightly decreased from $1.73 billion at December 31, 2024, to $1.72 billion at June 30, 2025[8] - Total liabilities decreased from $1.04 billion to $1.03 billion over the same period[8] - Shareholders' equity increased by $6.1 million, from $689.1 million to $695.3 million[8] Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Total Assets | $1,720.6 | $1,731.3 | $(10.7) | | Total Liabilities | $1,025.3 | $1,042.1 | $(16.8) | | Total Shareholders' Equity | $695.3 | $689.1 | $6.1 | | Cash and cash equivalents | $67.3 | $17.0 | $50.3 | | Unpaid losses and loss adjustment expenses | $776.1 | $800.4 | $(24.3) | Consolidated Statements of Operations This section presents the company's revenues, expenses, and net income for the reported periods, including earnings per share - Net income for the quarter ended June 30, 2025, increased by 2.5% to $10.3 million, while for the six months ended June 30, 2025, it decreased by 70.4% to $6.4 million[10] - Basic EPS for Q2 2025 was $0.72, a slight decrease from $0.73 in Q2 2024, and for 6M 2025, it was $0.44, a significant decrease from $1.56 in 6M 2024[10] Consolidated Statements of Operations Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | % Change (QoQ) | 6M 2025 | 6M 2024 | % Change (YoY) | | :-------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Gross written premiums | $106.8 | $100.7 | 6.1% | $205.5 | $194.2 | 5.8% | | Net earned premiums | $95.1 | $92.8 | 2.5% | $188.5 | $189.4 | (0.5%) | | Net investment income | $14.7 | $15.3 | (3.9%) | $29.5 | $29.8 | (1.1%) | | Net income | $10.3 | $10.1 | 2.5% | $6.4 | $21.5 | (70.4%) | | Basic EPS | $0.72 | $0.73 | (1.4%) | $0.44 | $1.56 | (71.8%) | Consolidated Statements of Comprehensive Income (Loss) This section reports net income and other comprehensive income components, reflecting the total change in shareholders' equity from non-owner sources - Comprehensive income for Q2 2025 was $12.6 million, an increase from $12.0 million in Q2 2024. For the six months ended June 30, 2025, it was $12.1 million, a decrease from $26.3 million in 6M 2024[13] - Other comprehensive income, net of tax, for 6M 2025 was $5.8 million, up from $4.8 million in 6M 2024, primarily driven by unrealized holding gains[13] Consolidated Statements of Comprehensive Income Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Net income | $10.3 | $10.1 | $6.4 | $21.5 | | Other comprehensive income, net of tax | $2.3 | $1.9 | $5.8 | $4.8 | | Comprehensive income, net of tax | $12.6 | $12.0 | $12.1 | $26.3 | Consolidated Statements of Changes in Shareholders' Equity This section outlines the changes in each component of shareholders' equity, including net income, distributions, and share issuances - Total shareholders' equity increased to $695.3 million at June 30, 2025, from $667.5 million at June 30, 2024[16] - The company issued 550,000 class A common shares designated as class A-2 common shares during the six months ended June 30, 2025[16] - Retained earnings increased to $264.8 million at June 30, 2025, from $256.7 million at June 30, 2024, after accounting for net income and distributions[16] Shareholders' Equity Highlights (in millions) | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Total shareholders' equity | $695.3 | $667.5 | | Additional paid-in capital | $463.8 | $457.6 | | Retained earnings | $264.8 | $256.7 | Consolidated Statements of Cash Flows This section presents the cash inflows and outflows from operating, investing, and financing activities for the reported periods - Net cash provided by operating activities significantly decreased to $9.4 million for the six months ended June 30, 2025, from $36.9 million in the same period of 2024[19] - Net cash provided by investing activities shifted from an outflow of $(17.7) million in 6M 2024 to an inflow of $51.1 million in 6M 2025, primarily due to proceeds from maturity of fixed maturities[19] - Cash and cash equivalents at the end of the period increased to $67.3 million at June 30, 2025, from $46.7 million at June 30, 2024[19] Consolidated Statements of Cash Flows Highlights (in millions) | Cash Flow Activity | 6M 2025 | 6M 2024 | Change | | :-------------------------------- | :------ | :------ | :------- | | Net cash provided by operating activities | $9.4 | $36.9 | $(27.5) | | Net cash provided by (used for) investing activities | $51.1 | $(17.7) | $68.8 | | Net cash used for financing activities | $(10.2) | $(10.6) | $0.4 | | Net change in cash and cash equivalents | $50.3 | $8.7 | $41.6 | | Cash and cash equivalents at end of period | $67.3 | $46.7 | $20.6 | Notes to Consolidated Financial Statements (Unaudited) This section provides detailed explanations of the accounting policies, significant estimates, and specific financial statement line items, offering further context to the unaudited consolidated financial statements 1. Principles of Consolidation and Basis of Presentation This note describes the basis of financial statement preparation and the entities included in the consolidated financial statements - The interim consolidated financial statements are unaudited and prepared in conformity with United States GAAP[21] - The consolidated financial statements include Global Indemnity Group, LLC and its wholly owned subsidiaries, with all intercompany balances and transactions eliminated[23] 2. Investments This note details the company's investment portfolio, including fixed maturities, equity securities, and related realized gains and net investment income - Total investments decreased to $1.37 billion at June 30, 2025, from $1.42 billion at December 31, 2024[8] - The company's fixed maturities portfolio had gross unrealized losses of $(9.6) million at June 30, 2025, and $(14.9) million at December 31, 2024[24][25] - The company concluded that the unrealized losses are non-credit losses on securities where management does not intend to sell, and it is more likely than not that the Company will not be required to sell the security before recovery[33] Net Realized Investment Gains (in thousands) | Investment Type | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :---------------- | :------ | :------ | :------ | :------ | | Fixed maturities | $(34) | $(7) | $(21) | $(32) | | Equity securities | $161 | $212 | $284 | $1,084 | | Total | $127 | $205 | $263 | $1,052 | Net Investment Income (in millions) | Source | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------- | :------ | :------ | :------ | :------ | | Fixed maturities | $14.9 | $14.6 | $29.3 | $28.2 | | Equity securities | $0.2 | $0.2 | $0.3 | $0.4 | | Cash and cash equivalents | $0.8 | $0.7 | $1.6 | $1.3 | | Other invested assets | $(0.6) | $0.3 | $(0.7) | $0.9 | | Investment expense | $(0.5) | $(0.5) | $(1.0) | $(1.0) | | Net investment income | $14.7 | $15.3 | $29.5 | $29.8 | 3. Fair Value Measurements This note explains the methodologies and hierarchy used to measure the fair value of financial instruments, categorizing assets by input observability - The company's invested assets are categorized based on a fair value hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[61][64] - As of June 30, 2025, total assets measured at fair value were $1.35 billion, with $572.4 million in Level 1 and $776.5 million in Level 2[63] - The company holds interests in three limited partnership investments with an aggregate fair value of $22.1 million at June 30, 2025, and $29.4 million at December 31, 2024[67] 4. Allowance for Expected Credit Losses - Premium Receivables and Reinsurance Receivables This note outlines the allowances established for potential credit losses on premium and reinsurance receivables, reflecting estimated uncollectible amounts - The allowance for expected credit losses related to premium receivables decreased to $3.4 million at June 30, 2025, from $3.5 million at December 31, 2024[74] - The allowance for expected credit losses related to reinsurance receivables remained stable at $9.0 million at both June 30, 2025, and December 31, 2024[75] Allowance for Expected Credit Losses - Premium Receivables (in millions) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Beginning balance | $3.5 | $4.4 | $3.5 | $4.8 | | Current period provision for expected credit losses | $(0.1) | $(0.4) | $(0.1) | $(0.2) | | Write-offs | $(0.0) | $(0.0) | $(0.1) | $(0.6) | | Ending balance | $3.4 | $4.0 | $3.4 | $4.0 | 5. Income Taxes This note discusses the company's income tax status, effective tax rates, and the impact of recent tax legislation on its financial results - Global Indemnity Group, LLC is a publicly traded partnership and generally not subject to federal income tax[77] - The effective tax rate for Q2 2025 was 21.2%, slightly higher than the statutory rate of 21%, primarily due to non-deductible executive compensation[80] - The effective tax rate for 6M 2025 was 20.9%, slightly lower than the statutory rate of 21%, primarily due to the partnership tax treatment of Global Indemnity Group, LLC's income[81] - The company is assessing the impact of the U.S. enacted One Big Beautiful Bill Act on July 4, 2025, but does not expect a material effect[83] 6. Liability for Unpaid Losses and Loss Adjustment Expenses This note details the company's reserves for future payments of claims and related expenses, including changes from prior accident years - The balance of liability for unpaid losses and loss adjustment expenses at June 30, 2025, was $776.1 million, a decrease from $800.4 million at December 31, 2024[84] - Net losses and loss adjustment expenses related to prior years resulted in an increase of less than $0.1 million for both Q2 and 6M 2025, compared to decreases in the prior year periods[85][87] Liability for Unpaid Losses and Loss Adjustment Expenses (in millions) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Balance at beginning of period | $794.8 | $853.6 | $800.4 | $850.6 | | Total net losses and loss adjustment expenses | $52.9 | $53.7 | $119.7 | $107.0 | | Total paid net losses and loss adjustment expenses | $68.4 | $61.6 | $142.7 | $111.0 | | Balance at end of period | $776.1 | $844.2 | $776.1 | $844.2 | 7. Shareholders' Equity This note describes the components of shareholders' equity, including common shares, additional paid-in capital, retained earnings, and share repurchase authorizations - The company amended its LLCA effective January 16, 2025, authorizing 5,000,000 class A common shares designated as class A-2 common shares[89] - On March 6, 2025, 550,000 class A-2 common shares were issued to Fox Paine & Company, LLC, with a grant date fair value of $11.0 million[91][102] - No class A common shares were repurchased during the quarter and six months ended June 30, 2025, with a remaining authorization of $101.0 million[92] Common Share Distributions (in millions) | Period | Total Distributions Declared | | :-------------------------------- | :--------------------------- | | Six Months Ended June 30, 2025 | $10.0 | | Six Months Ended June 30, 2024 | $9.5 | 8. Related Party Transactions This note discloses transactions and relationships with related parties, including management fees and advisory fees paid to controlling entities - Fox Paine Entities beneficially own approximately 83.8% of the voting power of Global Indemnity Group, LLC as of June 30, 2025, and control the appointment of all directors[98] - Management fee expense of $0.8 million was incurred for each of Q2 2025 and Q2 2024, and $1.6 million for each of 6M 2025 and 6M 2024[99] - An advisory fee of $11.0 million (grant date fair value of Class A-2 common shares) and $0.2 million in cash was approved for Fox Paine & Company, LLC for services related to the company's internal corporate reorganization[102] 9. Commitments and Contingencies This note outlines the company's legal proceedings, unfunded investment commitments, and other contractual obligations that may impact future financial results - 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[104] - The company has an unfunded commitment of $14.2 million to an alternative investment vehicle (European non-performing loans) as of June 30, 2025, with no expected future capital calls[107] - The company is party to a Management Agreement with Fox Paine & Company, LLC, for which an annual management fee is paid[108] 10. Share-Based Compensation Plans This note details the company's share-based compensation arrangements, including stock options and share grants to employees and directors - During the six months ended June 30, 2025, the company granted 50,000 Time-Based Stock Options at a strike price of $36.25, vesting on December 31, 2028[109] - No restricted class A common shares or restricted stock units were granted or forfeited during the quarters and six months ended June 30, 2025[111] - The company granted 38,129 class A common shares to non-employee directors during the six months ended June 30, 2025, at a weighted average grant date value of $32.05 per share[113] 11. Earnings Per Share This note provides the calculation of basic and diluted earnings per share, including the reconciliation of net income to common shareholders Earnings Per Share (EPS) Data (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Net income available to common shareholders | $10.2 | $10.0 | $6.1 | $21.2 | | Basic EPS | $0.72 | $0.73 | $0.44 | $1.56 | | Diluted EPS | $0.71 | $0.73 | $0.43 | $1.55 | - Weighted average shares for basic EPS were 14.3 million for Q2 2025 and 14.1 million for 6M 2025[114] 12. Segment Information This note presents financial data for the company's new reportable segments, reflecting the impact of a recent internal business reorganization - The company underwent an extensive internal business reorganization on December 31, 2024, leading to new reportable segments[115] - The three new reportable segments are Agency and Insurance Services, Belmont Insurance Companies - Core, and Belmont Insurance Companies - Non-Core[116][121] - Agency and Insurance Services recorded $28.9 million in commission and service fee income for the six months ended June 30, 2025, with no comparable revenue in 2024 due to new affiliated service agreements[128][119] Segment Underwriting Income (Loss) (in millions) | Segment | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Agency and Insurance Services | $2.3 | $0 | $4.1 | $0 | | Belmont Core | $2.7 | $4.7 | $(8.8) | $10.3 | | Belmont Non-Core | $0.8 | $(1.1) | $0.0 | $(1.5) | | Total Underwriting Income (Loss) | $5.8 | $3.5 | $(4.7) | $8.8 | 13. New Accounting Pronouncements This note discusses the adoption status of new accounting pronouncements and their potential impact on the company's financial statements - The Company did not adopt any new accounting pronouncements during the six months ended June 30, 2025[132] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance and condition, highlighting key operational and financial trends, segment results, and significant changes for the reported periods Financial Highlights This section summarizes key financial metrics and performance indicators for the reported periods, including premiums, underwriting income, and equity - Gross written premiums increased 6.1% to $106.8 million for Q2 2025 and 5.8% to $205.5 million for 6M 2025[138][146] - Current accident year underwriting income increased 61% to $5.6 million for Q2 2025[138] - Net investment income for Q2 2025 was $14.7 million, a 3.9% decrease from Q2 2024, primarily due to losses from limited partnerships[138] - The current accident year combined ratio improved to 94.6% in Q2 2025 from 96.7% in Q2 2024[138] - Net income for Q2 2025 was $10.3 million ($0.71 diluted EPS), compared to $10.1 million ($0.73 diluted EPS) in Q2 2024[138] - Total cash and investments remained at $1.4 billion at June 30, 2025, with fixed maturities and cash comprising 98% of total investments[143] - Shareholders' equity increased by $6.1 million to $695.3 million at June 30, 2025, from $687.1 million at March 31, 2025[143] - Book value per common share increased to $48.35 at June 30, 2025, from $47.85 at March 31, 2025[143] Results of Operations This section analyzes the company's operational performance, detailing changes in premiums, underwriting income, investment income, and net income Premiums This section analyzes changes in gross and net written premiums across different business segments, highlighting growth drivers and product terminations - Gross written premiums increased by 6.1% to $106.8 million for the quarter ended June 30, 2025, and by 5.8% to $205.5 million for the six months ended June 30, 2025[146] - Direct written premiums for Wholesale Commercial, Vacant Express, and Collectibles collectively grew by 10.3% (Q2) and 9.5% (6M) due to premium rate increases, new agency appointments, organic growth, and new products[147] - Direct written premiums for Specialty Products declined by 26.1% (Q2) and 42.0% (6M) due to the termination of products not meeting profitability expectations[147] - Belmont Core's assumed business grew by 85.5% (Q2) and 144.1% (6M) due to new treaties incepting in 2024 and 2025[148] Premium Volume by Segment (in millions) | Metric | Q2 2025 | Q2 2024 | % Change (QoQ) | 6M 2025 | 6M 2024 | % Change (YoY) | | :-------------------------------- | :------ | :------ | :------------- | :------ | :------ | :------------- | | Gross written premiums | $106.8 | $100.7 | 6.1% | $205.5 | $194.2 | 5.8% | | Net written premiums | $103.9 | $97.8 | 6.3% | $199.8 | $189.8 | 5.2% | | Belmont Core Gross written premiums | $109.8 | $100.6 | 9.2% | $208.2 | $194.6 | 7.0% | | Belmont Non-Core Gross written premiums | $(3.0) | $0.2 | NM | $(2.7) | $(0.4) | NM | Underwriting Income (Loss) This section discusses the company's underwriting performance, including income, losses, and combined ratios, with specific attention to catastrophe impacts - Underwriting income for Q2 2025 was $5.8 million, a 64.4% increase from $3.5 million in Q2 2024[141] - The company reported an underwriting loss of $4.7 million for 6M 2025, compared to an underwriting income of $8.8 million for 6M 2024, primarily due to $15.7 million in net losses from California Wildfires[156] - The current accident year combined ratio improved by 2.1 points to 94.6% for Q2 2025[152] - Excluding California Wildfires, the current accident year combined ratio for 6M 2025 was 94.7%, an improvement from 95.8% in 6M 2024[158] Underwriting Ratios | Ratio | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Loss ratio | 55.6% | 57.8% | 63.5% | 56.5% | | Expense ratio | 38.8% | 38.8% | 39.5% | 39.2% | | Combined ratio | 94.4% | 96.6% | 103.0% | 95.7% | | Current accident year combined ratio | 94.6% | 96.7% | 103.0% | 95.8% | Net investment income This section analyzes the trends in net investment income, detailing contributions from fixed maturities, equity securities, and limited partnerships - Net investment income decreased by 3.9% to $14.7 million for Q2 2025 and by 1.1% to $29.5 million for 6M 2025, mainly due to performance in limited partnerships[164] - Net investment income from the fixed maturities portfolio increased by 2.3% (Q2) and 4.4% (6M) due to an improved yield[167] - The book yield on the fixed maturities portfolio increased to 4.54% at June 30, 2025, from 4.47% at June 30, 2024[167] - Approximately $400 million of the fixed maturities portfolio was reinvested at 5.5% during 6M 2025, increasing duration to 1.2 years[167] Net Investment Income by Source (in millions) | Source | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------- | :------ | :------ | :------ | :------ | | Fixed maturities | $15.3 | $15.0 | $30.2 | $28.9 | | Limited partnerships | $(0.6) | $0.3 | $(0.7) | $0.9 | | Net investment income | $14.7 | $15.3 | $29.5 | $29.8 | Net Realized Investment Gains This section reports on the realized gains and losses from the sale of investment securities, categorized by investment type - Net realized investment gains decreased by 38.0% to $0.1 million for Q2 2025 and by 75.0% to $0.3 million for 6M 2025[170] - Equity securities contributed $0.2 million in net realized gains for Q2 2025 and $0.3 million for 6M 2025[170] Net Realized Investment Gains (in thousands) | Investment Type | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :---------------- | :------ | :------ | :------ | :------ | | Equity securities | $161 | $212 | $284 | $1,084 | | Fixed maturities | $(34) | $(7) | $(21) | $(32) | | Total | $127 | $205 | $263 | $1,052 | Corporate Expenses This section explains changes in corporate expenses, including professional fees and advisory fees related to internal reorganizations - Corporate expenses increased by $1.1 million to $7.5 million for Q2 2025, primarily due to increased professional fees related to newly formed agency and insurance services companies[172] - For 6M 2025, corporate expenses increased by $4.3 million to $17.0 million, driven by $2.9 million in advisory fees (stock compensation) related to the internal reorganization and increased employee/professional fees[173] Income Tax Expense This section details the company's income tax expense, effective tax rates, and the factors influencing tax liabilities for the reported periods - Income tax expense for Q2 2025 was $2.8 million on pre-tax income of $13.1 million, compared to $2.6 million on $12.7 million in Q2 2024[174] - For 6M 2025, income tax expense was $1.7 million on pre-tax income of $8.0 million, a significant decrease from $5.5 million on $26.9 million in 6M 2024[174] Net Income This section presents the company's net income for the reported periods, including the impact of significant events like the California Wildfires - Net income for Q2 2025 was $10.3 million, a slight increase from $10.1 million in Q2 2024[176] - Net income for 6M 2025 was $6.4 million. Excluding the after-tax impact of California Wildfires ($12.2 million), net income would have been $18.8 million[176] Reserves This section discusses the company's gross and net reserves for unpaid losses and loss adjustment expenses, including the impact of frequency and severity changes - Carried gross reserves for unpaid losses and loss adjustment expenses were $776.1 million at June 30, 2025, down from $800.4 million at December 31, 2024[177] - Net reserves were $716.6 million at June 30, 2025, compared to $739.6 million at December 31, 2024[177] - Gross and net reserves related to Belmont Non-Core are declining as it services the run-off of de-emphasized and terminated business[178] Impact of Frequency and Severity Changes on Current Accident Year Net Losses (in millions) | Frequency Change | -10% Severity | -5% Severity | 0% Severity | 5% Severity | 10% Severity | | :--------------- | :------------ | :----------- | :---------- | :---------- | :----------- | | -5% | $(17.4) | $(11.7) | $(6.0) | $(0.3) | $5.4 | | 0% | $(12.0) | $(6.0) | $0 | $6.0 | $12.0 | | 5% | $(6.6) | $(0.3) | $6.0 | $12.3 | $18.6 | Reconciliation of non-GAAP financial measures and ratios The company provides non-GAAP financial measures to exclude the impact of prior accident year adjustments and the California Wildfires for a clearer evaluation of underwriting performance - The company provides non-GAAP financial measures to exclude the impact of prior accident year adjustments and the California Wildfires for a clearer evaluation of underwriting performance[182] - Current accident year underwriting income, excluding California Wildfires, was $10.9 million for the six months ended June 30, 2025[185] - Net income, excluding California Wildfires (net of tax), was $18.8 million for the six months ended June 30, 2025[185] - The current accident year combined ratio, excluding California Wildfires, was 94.7% for the six months ended June 30, 2025[185] Non-GAAP Reconciliation Highlights (6M Ended June 30, 2025, in millions) | Metric | GAAP | Non-GAAP (Excl. CA Wildfires) | | :-------------------------------- | :----- | :---------------------------- | | Underwriting income (loss) | $(4.7) | $11.0 | | Net income | $6.4 | $18.8 | | Current accident year combined ratio | 103.0% | 94.7% | Critical Accounting Estimates and Policies This section identifies the key accounting policies and estimates that require significant judgment and their potential impact on the financial statements - The company's critical accounting policies involve significant estimates for liability for unpaid losses, reinsurance receivables, investments, fair value measurements, goodwill, intangible assets, deferred acquisition costs, and taxation[189] - There have been no significant changes to these critical accounting policies or underlying methodologies during the current year[189] Liquidity and Capital Resources This section analyzes the company's ability to generate and manage cash, including sources and uses of funds, cash flows, and capital adequacy Sources and Uses of Funds This section outlines the primary sources of the company's funds and how they are utilized, including intercompany dividends and ownership structures - Global Indemnity Group, LLC's principal assets are ownership in Belmont Holdings GX, Inc. and Penn-America Underwriters, LLC[191] - Insurance subsidiaries declared extraordinary dividends of $100.0 million in June 2025, approved in July 2025, for distribution to Belmont Holdings GX, Inc. in Q3 2025[198] - Dividend limitations are imposed by state laws based on statutory financial results, which differ from GAAP[197] Cash Flows This section details the changes in cash flows from operating, investing, and financing activities, explaining significant fluctuations - Net cash provided by operating activities decreased by $27.5 million to $9.4 million for the six months ended June 30, 2025, compared to $36.9 million in the same period of 2024[199] - The decline in operating cash flows was primarily driven by an increase in current accident year catastrophe property net losses and prior accident year casualty net losses paid from the Belmont Non-Core Casualty lines of business[199] Operating Cash Flow Components (in millions) | Cash Flow Activity | 6M 2025 | 6M 2024 | Change | | :-------------------------------- | :------ | :------ | :------- | | Net premiums collected | $210.9 | $199.6 | $11.2 | | Net losses and loss adjustment expenses paid | $(150.5) | $(108.6) | $(41.9) | | Underwriting and corporate expenses | $(90.5) | $(72.6) | $(18.0) | | Net investment income | $41.6 | $21.0 | $20.6 | | Net cash provided by operating activities | $9.4 | $36.9 | $(27.5) | Liquidity This section assesses the company's short-term financial flexibility, including distribution payments and proceeds from investment redemptions - Quarterly distribution payments of $0.35 per common share were declared, totaling $10.0 million paid to common shareholders during the six months ended June 30, 2025[200] - Distributions of $0.2 million were paid to preferred shareholders during the six months ended June 30, 2025[200] - Partial redemption proceeds of $4.4 million were received from the Global Debt Fund, LP during the six months ended June 30, 2025[201] - No material changes to the company's liquidity were reported during the quarter and six months ended June 30, 2025, other than the discussed items[203] Capital Resources This section discusses the company's capital structure and any material changes to its capital resources during the reporting period - There have been no material changes to the company's capital resources during the quarter and six months ended June 30, 2025[204] Off Balance Sheet Arrangements This section confirms the absence of any off-balance sheet arrangements that could materially affect the company's financial position - The Company has no off balance sheet arrangements[206] Cautionary Note Regarding Forward-Looking Statements This section advises readers that the report contains forward-looking statements subject to risks and uncertainties, and the company disclaims any obligation to update them - Forward-looking statements in the report are based on current expectations and projections, subject to various risks and uncertainties[209] - Key risks include legislative/regulatory actions, natural disasters, sufficiency of reserves, adverse capital market developments, cyber-attacks, and other factors detailed in the 2024 Annual Report on Form 10-K[209] - The Company undertakes no obligation to publicly update or review any forward-looking statement[210] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section discusses the company's exposure to market risks, primarily interest rate, credit, equity price, and foreign exchange risks, confirming no material changes and highlighting portfolio quality - The company's primary market risks are interest rate risk, credit risk (fixed maturities), equity price risk (equity securities), and foreign exchange risk[211] - There have been no material changes to the company's market risk since December 31, 2024[212] - The investment grade fixed income portfolio maintains an AA- average rating and a duration of 1.2 years[212] Item 4. Controls and Procedures This section reports on the evaluation of disclosure controls and procedures, concluding their effectiveness and stating no material changes in internal control over financial reporting - Management, with the participation of the CEO and CFO, concluded that the design and operation of the company's disclosure controls and procedures were effective as of June 30, 2025[213] - There have been no changes in the company's internal control over financial reporting during Q2 2025 that have materially affected, or are reasonably likely to materially affect, these controls[214] PART II – OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity sales, and exhibits Item 1. Legal Proceedings This section states that the company is involved in various legal proceedings in the ordinary course of business but does not expect them to have a material adverse effect on its financial condition or operations - 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 business, results of operations, cash flows, or financial condition[216] - The company closely monitors relationships with reinsurers in runoff due to a greater potential for disputes[217] Item 1A. Risk Factors This section refers to the company's 2024 Annual Report on Form 10-K for a detailed discussion of risk factors and confirms that no material changes have occurred since that filing - The risk factors identified in the company's 2024 Annual Report on Form 10-K have not materially changed[218] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports no unregistered sales of equity securities, no share repurchases from third parties, and no shares surrendered by employees during the reporting period - There were no sales of unregistered equity securities during the quarter ended June 30, 2025[219] - Global Indemnity Group, LLC did not repurchase any shares from third parties under its repurchase program during the quarter and six months ended June 30, 2025[219] - No shares were surrendered by the company's employees during the quarter and six months ended June 30, 2025[220] Item 3. Defaults Upon Senior Securities This section confirms that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities during the reporting period[221] Item 4. Mine Safety Disclosures This section states that there are no mine safety disclosures to report for the company - There are no mine safety disclosures to report[222] Item 5. Other Information This section reports that none of the company's directors or Section 16 officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - None of the company's directors or Section 16 officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[223] Item 6. Exhibits This section lists the exhibits filed with the 10-Q report, including various certifications from the CEO and CFO, as well as Inline XBRL documents - The report includes certifications from the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[227] - Inline XBRL documents (101.INS, 101.SCH, 104) are also filed as exhibits[227] Signature This section contains the official signature block for the registrant, Global Indemnity Group, LLC, confirming the filing of the report - The report was signed on behalf of Global Indemnity Group, LLC by Brian J. Riley, Chief Financial Officer, on August 6, 2025[229]