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Global Indemnity Group(GBLI) - 2024 Q1 - Earnings Call Transcript
GBLIGlobal Indemnity Group(GBLI)2024-05-12 03:43
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Financial Data and Key Metrics Changes - Net income increased to 11.4millioncomparedto11.4 million compared to 2.5 million in 2023, driven by improved underwriting and investment performance [36] - Book value per share rose from 47.53atyear−endto47.53 at year-end to 48.18 at March 31, 2024, reflecting positive returns to shareholders [36] - The combined ratio for the Penn-America segment improved to 94.0%, a 7.2-point improvement from 101.2% in 2023 [4][14] Business Line Data and Key Metrics Changes - Penn-America's accident underwriting income was 5.7million,comparedtoalossof5.7 million, compared to a loss of 800,000 in 2023 [14] - Consolidated gross written premiums decreased to 93.5millionin2024from93.5 million in 2024 from 123 million in 2023, primarily due to runoff business in the noncore segment [41] - InsurTech revenues grew 17% to 12.5million,withBaconExpresscontributinga2212.5 million, with Bacon Express contributing a 22% increase to 8.9 million [42] Market Data and Key Metrics Changes - The accident year combined ratio for the current year was 94.9%, compared to 100.6% in 2023, indicating improved market performance [38] - The non-catastrophe loss ratio improved to 41.9% from 59.9% in 2023, reflecting better risk management [15] Company Strategy and Development Direction - The company is focused on a digital transformation of its technology infrastructure to remain competitive [34] - There is an ongoing evaluation of the best use of approximately 200millioninexcesscapital,includingpotentialacquisitionsandsharebuybacks[22][52]−Thecompanyaimstoachievealong−termaveragepremiumwrittengrowthofover10200 million in excess capital, including potential acquisitions and share buybacks [22][52] - The company aims to achieve a long-term average premium written growth of over 10% [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the full year, citing strong current accident performance and adequate premium pricing to meet loss inflation [43] - The company anticipates continued improvement in expense ratios over the next couple of years, aiming for a target of 36% to 37% [33][59] Other Important Information - Investment income increased by 21% to 14.5 million, with a current book yield on the fixed income portfolio at 4.3% [12][10] - The company has maintained a conservative approach to equity securities, currently holding 17millionina17 million in a 1.3 billion portfolio [58] Q&A Session Summary Question: What can be done to improve ROE going forward? - Management noted that the low ROE is due to being overcapitalized, with approximately 200millioninexcesscapitalavailableforotherpurposes[22]Question:DiscussinterestinpursuingatransactionwithJamesRiverInsurance?−ManagementconfirmedconversationswithJamesRiverarecurrentlyonpausebutmaybere−examinedlater[24]Question:Plansforthe200 million in excess capital available for other purposes [22] Question: Discuss interest in pursuing a transaction with James River Insurance? - Management confirmed conversations with James River are currently on pause but may be re-examined later [24] Question: Plans for the 200 million excess capital and share buyback activity? - Management is actively considering acquisitions and has not engaged in share buybacks recently due to a narrow window for repurchase activity [52] Question: Any problematic books or programs still affecting performance? - Management indicated that the lingering effects of exiting certain businesses have impacted growth opportunities, but no serious problematic programs are currently noted [61] Question: Consideration of a special dividend? - Management explained that special dividends may not be tax-efficient due to the structure of the company as a publicly traded limited partnership [67]