Global Indemnity Group, Llc · NASDAQ:GBLI
Global Indemnity — Investor Presentation (September 2018)
20 slides from Global Indemnity's investor presentation, Sep 18, 2018
Slide 1: Investor Review September 2018
INVESTOR REVIEW SEPTEMBER 2018
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may include forward -looking statements, both with respect to Global Indemnity Limited (the “Company”) and its industry, that reflect our current views with respect to future events and financial performance. These statements are made pursuant to the safe
Slide 3: Global Indemnity – A Unique Investment Opportunity
Global Indemnity –A Unique Investment Opportunity • $49.41 of Book Value Per Share as of June 30, 2018 • Trading at $35.19 per share* (0.7x Book Value Per Share, a 51% discount to the median 1.4x Price/Book Value Multiple of U.S. Property & Casualty insurance companies) • Global has a 15-year track
Slide 4: Pristine Balance Sheet
Pristine Balance Sheet • Conservatively invested, $1.6 billion Investment Portfolio • 86% held in investment grade, ‘A+’ rated average credit quality, 3-year short duration U.S. Treasury, U.S. Agency, U.S. State & Municipal, and corporate debt securities, and cash • 9% in publicly traded Equities an
Slide 5: Overcapitalized to Respond Rapidly to Opportunities
Overcapitalized to Respond Rapidly to Opportunities Net Premiums Written / Tangible Book Capital • Over-capitalized Balance Sheet positions 1.0x 0.84x Global to respond rapidly to opportunities 0.8x on ‘Main Street’ (Insurance Pricing –‘Hard 0.6x 0.48x Market’) as well as on ‘Wall Street’ 0.4x (Inve
Slide 6: Capital Management
Capital Management • Global’s total equity capital grew from $300 million to $1.3 billion (including capital returned to shareholders) since Fox Paine organized Global in 2003 • Capital milestones: 2003 2007–08 2009 2011–12 2015–17 $170 million IPO $100 million share Rights Offering for $113 million
Slide 7: Business Segments
Business Segments EBIT By Business Segment ($ in millions) 1. Specialty Commercial Specialty Commercial Long-established, highly profitable Commercial $100 Insurance franchises United National and Penn $59 $64 America, Global’s core businesses, were each $50 $38 $24 $28 organized in the mid 1950’s a
Slide 8: Specialty Insurance for Small Accounts
Specialty Insurance for Small Accounts GBLI Consolidated 2017 • Global Indemnity Ltd is a U.S. domestic insurer and Gross Written Premium by* Segment Business a Bermuda -based international reinsurer Specialty Specialty • $518 million of Gross Written Premium in 2017 Commercial Property $213m 34% $1
Slide 9: Business Units & Product Mix
Business Units & Product Mix U.S. INSURANCE OPERATIONS BERMUDA Specialty Commercial Specialty Personal Agriculture Reinsurance GLOBAL DIAMOND UNITED COLLECTIBLES INDEMNITY PENN-AMERICA VACANT ® STATE NATIONAL ® INSURANCE PROPERTY AGRICULTURE REINSURANCE GROUP ® ® EXPRESS. COM ™ GROUP GROUP SERVICES,
Slide 10: GBLI Stock Performance
GBLI Stock Performance • GBLI’s publicly traded shares performed in line with its peers through 2017 and increased +9% annually over the past 5 years • GBLI is down -17% YTD 2018 while its peers rose +17%, a 34% negative variance that may be a result of losses associated with the Specialty Personal
Slide 11: Acquisitions & Premium Growth
Acquisitions & Premium Growth • Global acquires slow-growth insurance businesses and books of business, pares back unattractive business segments, and works to improve underwriting, enhance profitability, and accelerate growth • Improving profitability, however, is prioritized over premium growth •
Slide 12: EBIT By Business Segment
EBIT By Business Segment • Flat premiums and declines in EBIT in 2016 & 2017 are primarily attributable to losses incurred in Global’s newly acquired Specialty Personal Lines & Agriculture businesses, including the costs associated with restructuring and revamping these businesses • By year end 2018
Slide 13: Specialty Commercial
Specialty Commercial Includes Small Business, Large Property, Programs & Vacant 2017 Gross Written Premium by Business Class – • Specialty Commercial is Global’s historical $213 Million Total business, with roots to the mid-1950s Property Programs • The book of business has been curated Brokerage 14
Slide 14: Specialty Commercial – Historical Loss Ratio
Specialty Commercial – Historical Loss Ratio • Global’s Specialty Commercial Lines Loss Ratio averaged 56.6% for the past 10 years (2008–2017) • Global’s average Loss Ratio over this 10-year period is 3.6 points lower than the E&S Industry’s Commercial Lines Loss Ratio and 13.5 points lower than the
Slide 15: Specialty Commercial – Strong Growth
Specialty Commercial – Strong Growth • Specialty Commercial grew Gross Written Premium +20% year-over-year during the first six months of 2018 Gross Written Premium ($ in millions) $150 $124 2018 $125 $103 REVIEW $100 $75 INVESTOR $50 $25 $0 JUN 2017 JUN 2018 15
Slide 16: Agriculture Farm/Ranch & Equine Mortality
Agriculture Farm/Ranch & Equine Mortality 2017 Gross Written Premium by • GBLI is the 14th largest writer of farm and agriculture in the Business Class –$76 Million Total United States • Significant investment in a new product update (rates and coverages) and policy administration system; catastroph
Slide 17: Specialty Personal Specialty Property
Specialty Personal Specialty Property 2017 Gross Written Premium by • Brand and systems competitive advantage Business Class –$175 Million Total • Integrated systems, consolidated operations, claims and IT under new leadership since purchase to address excess overhead as well as Boats Collectibles p
Slide 18: Reinsurance Operations
Reinsurance Operations Property and Professional Liability 2017 Gross Written Premium by • Two main areas of focus: Business Class –$39 Million Total* – Retrocession with Bermudian Reinsurers in property focus area Professional – Insurance/reinsurance very high excess of loss coverage for profession
Slide 19: Return on Equity is Key Determinant to Trading Prices of P&C Companies
Return on Equity is Key Determinant toTrading Prices of P&C Industry Companies • Trading prices for peer companies correlate closely with their Return on Equity (ROE) • Global’s current Price -to-Book Value trading multiple is consistent with this correlation, however, Global’s ROE has been inhibite
Slide 20: Global Indemnity – A Unique Investment Opportunity
Global Indemnity –A Unique Investment Opportunity • Global Indemnity trades at 0.7x Book Value, a 51% discount to publicly traded U.S. Property $71.82 & Casualty companies • 15-year, 8% annual Book Value Per Share growth track record $50.00 • Pristine, over-capitalized Balance Sheet positions Global
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