FORM 10-K: ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
The report is an annual report filed by Global Indemnity Group, LLC with the Securities and Exchange Commission (SEC) for the fiscal year ended December 31, 2024. The company’s Class A Common Shares are listed on the New York Stock Exchange under the ticker symbol GBLI. The report includes financial statements and other information required by the SEC. The company’s aggregate market value of common equity held by non-affiliates was $215.6 million as of the last business day of the second fiscal quarter. As of March 11, 2025, the company had outstanding 10,464,587 Class A Common Shares and 3,793,612 Class B Common Shares.
Overview of the Company’s Financial Performance
Global Indemnity Group, LLC is a diversified insurance company that provides a range of property and casualty products. The company has two main business segments: Penn-America, which focuses on the company’s core insurance operations, and Non-Core Operations, which includes lines of business that have been de-emphasized or are no longer being written.
In 2024, the company generated net income of $43.2 million, up from $25.4 million in 2023. This improvement was driven by strong underwriting results in the Penn-America segment, as well as higher investment income due to rising interest rates. The company’s combined ratio, a key measure of underwriting profitability, improved to 95.6% in 2024 from 99.7% in 2023.
Revenue and Profit Trends
The company’s total revenues decreased by 20.3% in 2024 to $378.4 million, primarily due to a decline in net earned premiums in the Non-Core Operations segment as the company continued to wind down those businesses. However, net earned premiums in the core Penn-America segment increased by 4.3% in 2024.
Net investment income rose by 12.5% in 2024 to $62.4 million, as the company was able to take advantage of rising interest rates to improve the yields on its fixed income portfolio. The company’s book yield on fixed maturities increased from 4.0% at the end of 2023 to 4.4% at the end of 2024.
Underwriting income in the Penn-America segment improved significantly, from a loss of $11.6 million in 2023 to a gain of $19.7 million in 2024. This was driven by a 1.0 percentage point improvement in the current accident year loss ratio, as well as a $28.1 million reduction in prior year reserve strengthening.
In the Non-Core Operations segment, underwriting income declined from a gain of $14.6 million in 2023 to a loss of $1.9 million in 2024, as the company continued to wind down those businesses and experienced higher expense ratios due to lower earned premiums.
Strengths and Weaknesses
A key strength of the company is its focus on its core Penn-America insurance operations, which have demonstrated improved underwriting profitability. The company has been able to grow premiums in this segment through new product offerings, expanded distribution, and rate increases. Additionally, the company’s investment portfolio has benefited from rising interest rates, providing a boost to investment income.
However, the company continues to face challenges in its Non-Core Operations segment, as it works to wind down those businesses. The decline in earned premiums in this segment has led to higher expense ratios, putting pressure on profitability. Additionally, the company’s overall growth has been constrained by the runoff of the Non-Core Operations business.
Another potential weakness is the company’s reliance on dividends from its insurance subsidiaries to fund its holding company operations. While the company’s insurance subsidiaries are well-capitalized, regulatory restrictions on dividend payments could limit the holding company’s financial flexibility.
Outlook for the Future
Looking ahead, the company’s focus on its core Penn-America insurance operations and its ability to capitalize on rising interest rates provide a positive outlook. The company’s internal reorganization, which created separate businesses for each of Penn-America’s divisions, is expected to enhance operational efficiency and support growth.
However, the company will need to continue managing the runoff of its Non-Core Operations segment, which could continue to be a drag on overall profitability. Additionally, the company’s ability to maintain its strong underwriting performance in the Penn-America segment will be crucial, as the insurance market remains highly competitive.
The company’s liquidity and capital position appear to be strong, with the insurance subsidiaries well-capitalized and the holding company having access to dividends and other sources of funding. However, the company’s future capital needs will depend on factors such as the amount of premium it writes, the level of loss reserves, and its exposure to catastrophe events.
Overall, the company’s focus on its core insurance operations, its ability to adapt to changing market conditions, and its strong financial position provide a solid foundation for future growth and profitability.
