Global Indemnity (GBLI) 8 Nov 232023 Q3 Earnings call transcript

Thank you for standing by. My name is Danica, and I'll be your conference operator today. At this time, I would like to welcome everyone to the GBLI Third Quarter 2023 Earnings Call. [Operator Instructions]

Thank you. I would now like to turn the call over to Steve Ries, Head of Investor Relations. ahead. go Please

Today's may Danica. is recorded. being Thank forward-looking conference statements. remarks contain GBLI's you, call

environment Some obligation we with forward-looking results. of Executive expectations of should forward-looking caution of factors Global statements, the future that business not update Global words, to by the you turn alter to expressly a without statements be a whether under XX-K be and can regarded our that limitation, future LLC our annual information, otherwise. It now to of Group, plans, the contemplated Mr. the and and representation that refer is forward-looking result not or to beliefs, the Officer such important other in Chief or expectations which Indemnity over or any for a as We as affect Jay such by my new on may any is achieved. Please Form the us forward-looking us estimates identified Brown, will, materially description estimates. of the our statements obligation be pleasure filings operate in or by use events SEC fact, its report Indemnity. call disclaims

Thank for quarter morning for thanks results you, our call. to Good and joining Steve. third morning, everyone us this

Before I topic. me provide obvious some commentary an on let our XXXX address results,

the Advisory transaction any assist has company retained Ursano the company potentially entire a potential Partners Insurance in sell a now GBLI engaged the disclosed, of of evaluating to operations the banker, has an previously transaction. been our conversations have to Tony in we to company. for As of efficacy lead portion investment could insurance that

few will in the months. expect this likely conclude We process next

are on during not in process, Given questions call. or today anything say respond where this this to any will more we we the

results that direct noticed somewhat our the to prior calls XXXX, restructuring occurred make overall to As year this comparisons year, significant we have continues previous at difficult. of the in beginning

Our comments Operations. a primarily Specialty my all results. Tom year Commercial aspects GAAP to ongoing are Commercial address our of and, extent, year-to-date on then lesser accident operating focus will and financial the Reinsurance will Specialty segments I results,

for As metrics averaging loss XX% the to with a couple an in below expense XX% the our XX%. focused trending loss and XXs our and on reminder, ratio the expense consistent Specialty, in ratio ratios, a long-term we year, Commercial combined a and are for operating average long-term in growth of years mid-XXs, this low of

months objectives, are continue profitability continued on Although a Targeted we growth we InsurTech, in progress where of our in our some long-term Package restructuring growth primarily satisfactory X written still objectives. caused has efforts, negative in specific premium our XX%. effects more observing drop which from through consistent Specialty XX% to gross of focus against were growth results our priority our of both than make good first class these segment, XX% and Specialty are Offsetting the in with

loss recorded Lines. year expense XX.X% a of XX.X%. ratio, ratio combined our of X-month results and for to XX.X% accident ratio comprised We loss Continuing Turning expense of and our a

quarter XX.X%, results of of third ratio and comprised expense Our loss and ratio of expense a ratio of a with XX.X%. XX.X% loss were an similar combined

our more target objective. ratio to on forward, going are we means have achieve the class we Although do in long-term that work for specific expense to XX% dollars, premium bit shortfall expense targeted a

and for high in below a terminated combination another XX.X% class In target points Specialty of casualty of due Package expense terms loss of catastrophe our Targeted the ratio, X falling couple target. loss is and specific, and points business higher to continued expected about losses, of short than loss Specialty causing year-to-date, long-term ratio emergence

Specialty Targeted X% of pricing XX% expectation in is in specific, and class exceeds We strong continue loss with to expected achieve Package trends. which in our line and Speciality

Specialty. that ratio the source effect quarter net will through on the share of Although and that terminated year of million we into I have in reserve X which this calendar The the was strengthening points results, Commercial million $XX in has loss XXXX the -- the translates on report experienced GAAP quarter will months, X.X our all Tom year business was same $XX year and was our that accident observation points year-to-date. in third XX.X results, hurt

provide was rates strengthening business. by Lines, some our our of the details decision redundancy will continues play portfolio dramatically bond months shortening have this Exited to Tom starting duration offset release to XX pay more dividends. specific the in of defense we Although ago by decisions books it of reinforces but to these the made interest exit on

Our than month more year-to-date, investment $XX with overall income at a in quarter that yield investment double and is coming every the for year ago. million $XX million rising from

investment years the quarter. With from in next a this X%, million quarters, cash and should the flow every $XXX current expect of rising X we yield keep fully X.X book duration the portfolio of that of number

be to before calendar of our commence operates continuing Tom -- our questions. goals, underwriting accident both operations were future. I any -- business year underlying to over McGeehan profitability better make longer-term our our overall the progress The short now results of While we making that continue continuing objectives. it in taking before view modestly the will will of against year forthcoming of my turn CFO, our book results and

to the Loss increased of year. Actions the lines, business $X.X being share XXXX $X.X comprised gain a income in year-to-date and per $X.X net quarter year, XX, short-duration sell Even everyone. company third million in ahead securities at third fixed September at the Investment from double XXXX Net was rates million longer-dated in compared duration. Market million, was of income well of XXXX, reduce comprised to are rose, quarter interest basis, losses net short XXXX. interest share The quarter in from had million value of releases direction. compared kept for realized. which investment is last business the XXXX. million, Jay, of from moving to portfolio positive. I per on of a actions reduce income $XX.XX right taken in what $X.X Investment million $X to income of XXXX. and alternatives. good it million $XX.X was rates the due alternatives. On quarter the portfolio farm and increased were starting investment unrealized fixed in June in income fixed though of you, income at Thank average income $XX.XX Book million investments September The early reposition portfolio was was XXXX and million income The the quality XXXX This years. negative the investments of of reserve last is the in net per corresponding is is $X.X million now alternatives. million key comparable investments. the expenses, from in August from from increased XXXX, fixed the from of million and excludes from fixed comprised catastrophe was tax A+. fixed third income $X.X credit $X.X of is income income, XX, on duration income almost quarter. the performance. $XX.X third during income This the of yield $X.X compares from to of to negative million net $XX.X period was sale focus some $XX.X will 'XX exposure, discuss XXXX. the income X% was $X.X alternative $X.X the in the morning, and the core million the taken from $XXX,XXX and $XX.X to investment Investment investment to with income million, XX, of share Book significantly underwriting million portfolio portfolio of $XX.X X.X 'XX, and drivers million in of period

of fixed book-yield income years. December was December at and this was our XX, increase income expect higher In will September positioned book bonds comparison, we investment portfolio is duration as is rate XXXX, the and Between well to a cash X.X investment mature portfolio million $XXX approximately XX, yield. and X.X% portfolio environment, As realized. year flow the of XXXX, this interest generate on

XXXX. -- was third the XXXX, accident year In in Lines an Lines XX.X%. just $X.X which $X.X fires Lines underwriting ratio XX.X% in of in underwriting the XXXX, from XXXX. are underwriting of to Maui compared year had million XXXX quarter a million loss to third Continuing The The accident our of losses contains Maui quarter million $X.X of Maui Continuing of year third underwriting. had numbers. had year $X.X quarter ratio quarter third Lines profit quoted. Exited of the In the the -- quarter number I an fires million, Moving million. of of the $X had an of for the accident profit the X.X%, loss accident contained combined third Continuing our underwriting profit

income of $XX.X This Specialty company's Lines is to XXXX Much of the wrote business, $XX.X drag Lines third third is in main the underwriting [Audio the be XXXX, written $XX.X off was lost In related premium 'XX, our decline Gap] Increased million of million and $X from Operations the primarily Targeted was income $XX.X million, from $X.X $X million XXXX million underwriting compared to the in our $XX.X XXXX, million development Lines actuarial to our of reserves will required million, business The is of X releases million runs XXXX. property consolidated reserve Accident gross planned. which written and Within strengthened as in Reinsurance gross Package expect Specialty. reserve related quarter above had are accident approximately XXXX, $X.X of of is compared there of no in compared lines: business. to million indications. In quarter and million casualty year for third to from decrease remain and due Targeted treaty. Within $XX.X XXXX. were in year in provided. XXXX, XXXX $XXX.X million. of good Package Booked releases sold in Continuing the remainder prior. primary had by loss loss businesses of We up nonrenewing is to in and Continuing from the years to approximately was the a XXXX Specialty, approximately support XXXX. On this of reserves premiums product quarter Continuing 'XX. mainly third Specialty Commercial exit in Exited $XX.X Exited to comprised million Penn-America Specialty, this $X third mainly decline prior were longer reserves. basis, million. business Lines, quarter quarter

products included improve and underwriting lines rate, run in of the nonrenewing was down $XX.X XXXX had Lines XXXX. $X.X Specialty, Within as August to million several to The Net contains business, XXXX. approximately million generated primarily business which Excluding $X.X XXXX. of related the to in grew. quarter XXXX, XX% to compared Lines during underperforming Vacant businesses. Exited other to $XX.X million property reducing quarter sold to Gap] were Specialty $X.X grew business the increasing million. of compared premium by occurred of terminated in continuing the well prone specific The up quarter sale underperforming XX% XXXX. income that Specialty premium Package the to have written decline as in Specialty, the of actions in premium expenses million business the from $XX.X grew million expected. The to of $X.X for XXXX, Commercial quarter $X.X Exited farm million Targeted we in catastrophe of is are was business exposures product compared sold fourth XXXX, was which farm in [Audio the due the XXXX. Specialty, quarter. Targeted that X% quarter to third of book of million exited. the August Express class remaining XXXX third as in Specialty which Targeted in third include Collectibles

We the our of are pleased company. with direction

X%. much with being well Our in business core higher at supportive. The invested align in investments the cash portfolio maturity XX% are are can expenses business due being positioned be to managed lower the portfolio fixed and XXXX. at yields compared is returns cash. written of in flow to that being invested positive currently The invested become early XXXX, Expenses that providing is to than is to generate taken are higher available funds yields. actions

take now will we and questions. you, your Thank

Insurance. Instructions] Shift Our David comes question [Operator with first Schiff from

to it's buy -- asked wanted you at question, the to able all one ask Jay, I David. stock was are just if back present?

the of to we marketplace. program available entertain We an are don't the market -- reverse a repurchase in active small business any daily inquiries kind amount in given continue have that's basis, the we on of

question comes Tom Investment next Our from Kerr Research. Zacks from

individual other, in the mentioned Vacant strongly? InsurTech some drivers Can I what sort you detail you growing the think of and more those go back were on of growth? lines

Yes. agents Vacant it's to on the a No, appointed. business a those Both new monoline product. driving there. very it's are been We've on introduced of portals. of And are of marketing marketing have efforts, efforts. a which a side, One, lot focused liability lot growth [ new number also collect driving ], of things our

you across from? average all increase. And of the then Package that X% where Great. mentioned guys or kind or just Okay. Commercial pricing that Specialty Was came just

Package. Yes.

So the whole Package.

of books of out an worst? like books there? is that that problem business Okay. get Or process restaurant And are pretty just these Or other much business? the there problematic of to ongoing rid is the

some review XX got made or quick business decisions that combination we when thorough profitable. or weren't months where to through terms pretty exit of In products X about of of books a We ago, I went very here. we a were

exit we business made a ratios. lines also We decision in position weren't have some proper a to to of that expense

and All at of done this But was books very individual we're point underwriting. individual at risks time, the of continuous the with of underwriting year. that looking of we're at And in of book in business. business obviously, satisfied the beginning a we're process and that

cat you quick have the or more sort in how losses? you cat then left what the much exposure measure do ones. how that eliminated or Two being Okay. of reduced? future? what's in And Is Or

reduced. significantly been it's No,

of down event. our XXX reinsurance a XXX-year been X protection now tower -- significantly. limit upper able of Our in to $XX still come provides cat is buy The which million, north has of

that Our were losses quarter. of just for was losses were There -- little the several losses $X.X really Maui. only our other Continuing Lines cat during big was ones. quarter million no It $X.X million, the

this happy with taken very, that reduce company. [Audio we're to for very actions So we've the Gap]

X%? book on how more that go from looks? or is to XX-month on One a any XX- one X% you there I sort a give quick great. color That's Is to the path timing can yield. of Or process? that mean

Well, I'll be degree, let some you figure to to it not out coy.

at end million can between and being -- cash you We yields close coming now off X.X% to have very -- next invested close today. That flow treasury is get of year. of $XXX to the literally,

increase. will I of levels they eventually if [indiscernible] our it's bulk portfolio rates So we have range at -- that full will continue the to be in stay expectations that yields the range. yield realized. today, mean And are

[Operator Dowling Instructions] Mottolese Our next question comes from Anthony from & Partners.

could bit geographies? was Continuing you I'm just were the remainder Are then just Specialty color you hoping seeing certain years years Targeted the more in to and on strengthening XXXX any get understand the any I in mentioned helpful a color be -- $X prior. Targeted would there? or And what areas exactly Lines. was little specific there it in reserve Anything and Specialty on there. million

some Exited because Line decisions the Sure. business a we made of When stayed Discontinued our were Specialty, Line, of of example. Package end at they inside, created for business that or of year, did last books the certain we way the coded review an

to have we significant in small So in book York runoff a of about XX% reduction, business going in target a a be New probably XX%, -- habitational.

to primarily very affected Tom $X And rest that specifically. it XXXX occurred accident of reserve running the that continues the about prior. million of business off was of So reason referred year the to XXXX current the million. the that because $X that is that certain there tune lag The Part as or And and strengthening a year 'XX of tried an little animus to be litigation We in through and gone obviously, because claims some backlog had we've precisely big been environments. then 'XX, to we've slowdown 'XX, of in has bit reported but a estimate COVID. effect. a in is

the we so And there during prior. course the what did quarter corrections was and for of XXXX some

this was program the Targeted premium we from the to to Yes. we strengthening included is more There to adverse we this underperforming year. after and to have development -- within thing noted. also, that is quarter going that that an was but related in what specialty, program, first to did I'm just reserve in add see there program the continue first said of that which year, terminated one earned some quarter is no some numbers Jay Jay also

with question comes Polak Our from Tony Aegis. next

were questions answered. My

Thank Great. our you. back That session. will concludes I the over remarks. Q&A Ries now to call Steve turn closing for

forward continued in Indemnity. Global with after Thank We speaking interest you, you look to for Danica. your and XXXX release. joining in Thank results us you investment

Thank concludes you, That gentlemen. ladies call. today's and

disconnect. now may You