Global Indemnity Lifts Profit as Reinsurance Premiums Accelerate
Investment income reached $16.4 million after a limited-partnership position recovered.
Global Indemnity Group (GBLI), a specialty insurer, reported an 8% increase in second-quarter net income as premium growth and investment gains outweighed higher underwriting expenses. Net income rose to $11.1 million, or $0.76 a share, from $10.3 million, or $0.71 a share, a year earlier.
The profit rebound was sharper sequentially, with net income available to common shareholders rising to $11.0 million from $4.1 million in the first quarter. Diluted earnings increased from $0.29 a share. Operating income edged up sequentially to $8.7 million from $8.3 million, though it remained below the $10.2 million recorded a year earlier.
Net earned premiums rose 3.8% to $98.7 million, slowing from 5.4% growth in the first quarter. The reported combined ratio worsened to 95.0% from 94.4% a year earlier as the expense ratio increased 2.4 percentage points, more than offsetting a 1.8-point improvement in the loss ratio. Current-accident-year underwriting income nevertheless increased to $5.8 million from $5.6 million.
Belmont Core gross written premiums rose 7% to $117.3 million, reversing a first-quarter decline. Wholesale Commercial premiums returned to growth, rising 2% to $70.1 million after falling 5.2% in the preceding quarter, while Assumed Reinsurance premiums climbed 79% to $21.5 million.
Specialty Products moved in the other direction as terminated business entered run-off, with first-half premiums falling 21% to $15.5 million. Belmont Core segment income rose 22% to $3.3 million, while Agency and Insurance Services income fell 39% to $1.4 million. Consolidated segment income declined to $4.7 million from $5.8 million.
The investment recovery helped lift quarterly earnings, though first-half net investment income declined to $28.6 million from $29.5 million as Global Indemnity increased its allocation to U.S. Treasuries. First-half reported net income rose to $15.3 million from $6.4 million, while net income available to common shareholders excluding the California wildfires fell to $15.1 million from $18.5 million.
Book value recovered to $48.28 a share from $47.92 at the end of March but remained below its year-end level of $48.96. Adjusted return on equity eased to 12.1% from 12.5% sequentially and 12.7% a year earlier. Property-rate reductions in Wholesale Commercial followed a period of flat rates in the first quarter, leaving competitive pricing as a constraint on the segment’s growth.