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Global Indemnity's Q4 Earnings Shine, Revs Up - Analyst Blog

Posted
2/21/2014 1:52:00 PM
By: Zacks.com
Referenced Stocks:EPS;GBLI;OB;RLI;WTM

Global Indemnity Plc ( GBLI ) reported operating earnings per share (EPS) of 76 centsfor the fourth quarter of 2013. The results outpaced the Zacks Consensus Estimate of 31 cents and the year-ago figure of 18 cents. Consequently, operating net income surged over four-folds to $19.1 million from $4.5 million in the year-ago period.

Including extraordinary items, reported net income escalated to $33.7 million or $1.34 per share from $4.4 million or 17 cents a share in the prior-year quarter. Growth primarily stemmed from improved premiums' growth in insurance operations and lower loss and loss adjusted expenses (LAE), partially offset by lower investment income and higher-than-expected operating and underwriting expenses.

Global Indemnity's total revenue soared 41.3% year over year to $101 million. The upside was led by a 13.7% rise in net earned premiums, bringing the figure to $69.6 million. Additionally, net realized investment gains surged to $17.2 million from a loss of $0.2 million in the year-ago quarter. However, net investment income declined 13.6% to $17.2 million, while other revenues improved to $5.3 million from $0.1 million in the year-ago quarter.

However, acquisition and underwriting expenses rose 13.4% over the prior-year quarter, whereas operating expenses grew 50%, partially offset by a 23% plunge in LAE along with 80.5% lower interest expenses. Consequently, the combined ratio improved significantly to 85.5% against 106.7% in the year-ago quarter.

Full-Year 2013 Highlights

For full-year 2013, Global Indemnity's operating EPS stood at $1.61, exceeding the 2012 equivalent of $1.10. Operating net income soared 38.2% year over year to $40.5 million. On a GAAP basis, net income rose to an astounding $61.7 million or $2.45 per share in 2013 from $34.8 million or $1.30 per share in 2012.

Total revenue increased 8.9% year over year to $319.1 billion, primarily driven by higher premiums and net realized investment gains. Moreover, the combined ratio improved to 96.0% from 104.2% in 2012, reflecting lower loss ratio.

Financial Update

At the end of Dec 2013, Global Indemnity held cash and cash equivalents of $1.57 billion, up from $1.53 billion at 2012-end. Total assets climbed to $1.91 billion from $1.90 billion at 2012-end, whereas shareholder equity rose to $873.3 million from $806.6 million at the end of Dec 2012. Additionally, book value per share grew 7.8% from 2012-end to $34.65 at 2013-end.

Other Stocks

While Global Indemnity carries a Zacks Rank #3 (Hold), other top-ranked insurers include RLI Corp. ( RLI ), White Mountains Insurance Group Ltd. ( WTM ) and OneBeacon Insurance Group Ltd. ( OB ), each carrying a Zacks Rank #1 (Strong Buy).



GLOBAL INDEMNTY (GBLI): Get Free Report

ONEBEACON INSUR (OB): Free Stock Analysis Report

RLI CORP (RLI): Free Stock Analysis Report

WHITE MTN INS (WTM): Free Stock Analysis Report

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