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What changed in Global Indemnity Group, LLC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Global Indemnity Group, LLC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+349 added−393 removedSource: 10-K (2025-03-11) vs 10-K (2024-03-15)

Top changes in Global Indemnity Group, LLC's 2024 10-K

349 paragraphs added · 393 removed · 272 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

82 edited+21 added−14 removed97 unchanged
Biggest changeThe following table summarizes, by Standard & Poor's rating classifications, the estimated fair value of Global Indemnity’s investments in fixed maturities, as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 (Dollars in thousands) Estimated Fair Value Percent of Total Estimated Fair Value Percent of Total AAA $ 335,381 25.9 % $ 182,063 14.6 % AA 391,983 30.3 442,731 35.4 A 257,714 19.9 240,697 19.3 BBB 225,934 17.5 296,680 23.8 BB 14,537 1.1 22,057 1.8 B 1,592 0.1 1,466 0.1 CCC 4,020 0.3 4,804 0.4 CC 2,779 0.2 2,914 0.2 C 2,338 0.2 2,622 0.2 D 2,420 0.2 2,555 0.2 Not rated 55,095 4.3 49,609 4.0 Total fixed maturities $ 1,293,793 100.0 % $ 1,248,198 100.0 % The following table sets forth the expected maturity distribution of the Company’s fixed maturities portfolio at their estimated market value as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 (Dollars in thousands) Estimated Market Value Percent of Total Estimated Market Value Percent of Total Due in one year or less $ 660,141 51.0 % $ 113,491 9.1 % Due in one year through five years 270,667 20.9 747,197 59.8 Due in five years through ten years 11,619 0.9 25,594 2.1 Due after ten years 10,407 0.8 11,736 0.9 Securities with fixed maturities 952,834 73.6 898,018 71.9 Mortgaged-backed securities 58,927 4.6 62,116 5.0 Commercial mortgage-backed securities 79,080 6.1 98,664 7.9 Asset-backed securities 202,952 15.7 189,400 15.2 Total fixed maturities $ 1,293,793 100.0 % $ 1,248,198 100.0 % The value of the Company’s portfolio of bonds is inversely related to changes in market interest rates.
Biggest changeThe following table summarizes, by Standard & Poor's rating classifications, the estimated fair value of Global Indemnity’s investments in fixed maturities, as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 (Dollars in thousands) Estimated Fair Value Percent of Total Estimated Fair Value Percent of Total AAA $ 103,130 7.5 % $ 335,381 25.9 % AA 942,524 68.1 391,983 30.3 A 131,287 9.5 257,714 19.9 BBB 152,893 11.1 225,934 17.5 BB 6,938 0.5 14,537 1.1 B 2,521 0.2 1,592 0.1 CCC 1,865 0.1 4,020 0.3 CC 3,502 0.3 2,779 0.2 C 1,387 0.1 2,338 0.2 D 2,419 0.2 2,420 0.2 Not rated 33,442 2.4 55,095 4.3 Total fixed maturities $ 1,381,908 100.0 % $ 1,293,793 100.0 % The following table sets forth the expected maturity distribution of the Company’s fixed maturities portfolio at their estimated market value as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 (Dollars in thousands) Estimated Market Value Percent of Total Estimated Market Value Percent of Total Due in one year or less $ 923,861 66.8 % $ 660,141 51.0 % Due in one year through five years 180,523 13.1 270,667 20.9 Due in five years through ten years 8,600 0.6 11,619 0.9 Due after ten years 9,009 0.7 10,407 0.8 Securities with fixed maturities 1,121,993 81.2 952,834 73.6 Mortgaged-backed securities 58,920 4.3 58,927 4.6 Commercial mortgage-backed securities 65,568 4.7 79,080 6.1 Asset-backed securities 135,427 9.8 202,952 15.7 Total fixed maturities $ 1,381,908 100.0 % $ 1,293,793 100.0 % The value of the Company’s portfolio of bonds is inversely related to changes in market interest rates.
See the notes to consolidated financial statements in Item 8 of Part II of this report for a reconciliation of the Company’s liability for losses and loss adjustment expenses, net of reinsurance ceded, as well as further discussion surrounding changes to reserves for prior accident years. 12 Asbestos and Environmental (“A&E”) Exposure The Company’s environmental exposure arises from the sale of general liability and commercial multi-peril insurance.
See the notes to the consolidated financial statements in Item 8 of Part II of this report for a reconciliation of the Company’s liability for losses and loss adjustment expenses, net of reinsurance ceded, as well as further discussion surrounding changes to reserves for prior accident years. 12 Asbestos and Environmental (“A&E”) Exposure The Company’s environmental exposure arises from the sale of general liability and commercial multi-peril insurance.
See “Regulation – Statutory Accounting Principles.” Key differences relate to, among other items, deferred acquisition costs, limitations on deferred income taxes, reserve calculation assumptions and surplus notes, if any. 19 See the “Liquidity and Capital Resources” section in Item 7 of Part II of this report for a more complete description of the state dividend limitations.
See “Regulation – Statutory Accounting Principles.” Key differences relate to, among other items, deferred acquisition costs, limitations on deferred income taxes, reserve calculation assumptions and surplus notes, if any. See the “Liquidity and Capital Resources” section in Item 7 of Part II of this report for a more complete description of the state dividend limitations.
State insurance departments also conduct periodic examinations of the books and records, financial reporting, policy filings and market conduct of insurance companies domiciled in their states, generally once every three to five years, although market conduct examinations may take place at any time.
State insurance departments also conduct periodic examinations of the books and records, financial 17 reporting, policy filings and market conduct of insurance companies domiciled in their states, generally once every three to five years, although market conduct examinations may take place at any time.
VacantExpress represents a large majority of policies that Penn-America writes in this manner. In 2023, excluding Assumed Reinsurance, Penn-America wrote 89% of their business on a non-admitted basis and 11% on an admitted basis. Marketing and Distribution The Company offers its insurance products across a wide distribution network that includes wholesale general agents, retail agents, and direct-to-consumer.
VacantExpress represents a large majority of policies that Penn-America writes in this manner. In 2024, excluding Assumed Reinsurance, Penn-America wrote 89% of their business on a non-admitted basis and 11% on an admitted basis. Marketing and Distribution The Company offers its insurance products across a wide distribution network that includes wholesale general agents, retail agents, and direct-to-consumer.
Proprietary automated reports, which monitor key business performance criteria, were developed by Penn-America’s underwriting team. They measure rate, retention, new business growth, and overall profitability. Analytics are performed over a multitude of dimensions such as geography, agent, class of business, policy limits, and coverages. Proprietary automated reports are also developed to monitor key attributes of risk exposures.
Proprietary automated reports, which monitor key business performance criteria, were developed by Penn-America’s underwriting teams. They measure rate, retention, new business growth, and overall profitability. Analytics are performed over a multitude of dimensions such as geography, agent, class of business, policy limits, and coverages. Proprietary automated reports are also developed to monitor key attributes of risk exposures.
Penn-America provides incentives to certain wholesale general agents and program administrators through profit commissions that are tied directly to producing profitable business.
Penn-America generally provides incentives to certain wholesale general agents and program administrators through profit commissions that are tied directly to producing profitable business.
IBNR reserves are based on the Company's historical statistical information with respect to the expected number and nature of claims arising from occurrences that have not been reported, supplemented with industry experience when deemed appropriate. The Company also establishes its reserves based on estimates of future trends in claims severity and other subjective factors.
IBNR reserves are based on the Company's historical statistical information with respect to the expected number and nature of claims arising from occurrences that have not been reported, supplemented with industry experience when deemed appropriate. The Company also establishes its reserves based on estimates of future trends in claims severity and other judgmental factors.
The primary business divisions within the Penn-America segment include: • Wholesale Commercial distributes property and general liability products for small commercial businesses through a select network of wholesale general agents with specific binding authority using company administered systems to rate, quote and issue policies. • Programs distributes property and general liability niche products through program administrators with specific binding authority.
The primary business divisions within the Penn-America segment include: • Wholesale Commercial distributes property and general liability products for small commercial businesses through a select network of wholesale general agents with specific binding authority using company administered systems to rate, quote and issue policies. • Specialty Products distributes property and general liability niche products through program administrators with specific binding authority.
For a discussion of the variances between years, see “Results of Operations” in Item 7 of Part II of this report. PENN-AMERICA The Penn-America segment distributes specialty property and casualty insurance products in the excess and surplus lines marketplace.
For a discussion of the variances between years 2024 and 2023, see “Results of Operations” in Item 7 of Part II of this report. PENN-AMERICA The Penn-America segment distributes specialty property and casualty insurance products in the excess and surplus lines marketplace.
Regulation At December 31, 2023, the Company had five subsidiaries operating as insurance companies domiciled in the United States; United National Insurance Company, Penn-America Insurance Company, and Penn-Star Insurance Company, which are domiciled in Pennsylvania; Diamond State Insurance Company which is domiciled in Indiana; and Penn-Patriot Insurance Company, which is domiciled in Virginia.
Regulation At December 31, 2024, the Company had five subsidiaries operating as insurance companies domiciled in the United States; United National Insurance Company, Penn-America Insurance Company, and Penn-Star Insurance Company, which are domiciled in Pennsylvania; Diamond State Insurance Company which is domiciled in Indiana; and Penn-Patriot Insurance Company, which is domiciled in Virginia.
This amount is net of an allowance for expected credit losses of $9.0 million at December 31, 2023. Historically, there have been insolvencies following a period of competitive pricing in the industry.
This amount is net of an allowance for expected credit losses of $9.0 million at December 31, 2024. Historically, there have been insolvencies following a period of competitive pricing in the industry.
See Note 21 of the notes to consolidated financial statements in Item 8 of Part II of this report for the maximum amount of distributions that the Company’s insurance companies could pay as dividends in 2024.
See Note 21 of the notes to the consolidated financial statements in Item 8 of Part II of this report for the maximum amount of distributions that the Company’s insurance companies could pay as dividends in 2025.
Pricing Actuaries at Penn-America customize pricing for each product, contributing expertise in factors such as historical loss data, changes in rate levels over time, outputs from property catastrophe modeling, and individual risk and coverage attributes. Additionally, they draw valuable insights from industry data to refine pricing strategy.
Pricing Penn-America's actuaries customize pricing for each product, contributing expertise in factors such as historical loss data, changes in rate levels over time, outputs from property catastrophe modeling, and individual risk and coverage attributes. Additionally, they draw valuable insights from industry data to refine pricing strategy.
For property risks excluding cannabis property risks, this treaty provides coverage of 100% of $2.5 million per risk in excess of $2.5 million per risk and 85% of $5.0 million per risk in excess of $5.0 million per risk for the entire Company.
For property risks excluding cannabis property risks, this treaty provides coverage of 100% of $2.5 million per risk in excess of $2.5 million per risk and 95% of $5.0 million per risk in excess of $5.0 million per risk for the entire Company.
These systems allow the Company to maintain and easily change rates, policy terms & conditions, and underwriting guidelines for its products. Penn-America's agents can typically transact a piece of business in 20 minutes or less. The technology platform captures key underwriting and rating elements. This enables the Company to perform profitability and predictive risk analytics.
These systems allow the Company to maintain and easily change rates, policy terms and conditions, and underwriting guidelines for its products. Penn-America's agents can typically transact a piece of business in 20 minutes or less. The technology platforms capture key underwriting and rating elements. This enables the Company to perform profitability and predictive risk analytics.
Since August 28, 2020, Global Indemnity Group, LLC believes that it has met in previous taxable years, and intends to manage its affairs so that it will continue to meet in the current and subsequent taxable years, the qualifying income exception to maintain partnership status for U.S. federal income tax purposes.
Global Indemnity Group, LLC believes that it has met in previous taxable years, and intends to manage its affairs so that it will continue to meet in the current and subsequent taxable years, the qualifying income exception to maintain partnership status for U.S. federal income tax purposes.
Business Segments See Note 22 of the notes to consolidated financial statements in Item 8 of Part II of this report for gross and net written premiums, income, and total assets of each operating segment for the years ended December 31, 2023, 2022 and 2021.
See Note 22 of the notes to the consolidated financial statements in Item 8 of Part II of this report for gross and net written premiums, income, and total assets of each operating segment for the years ended December 31, 2024, 2023 and 2022.
In-house claims management professionals are responsible for coverage confirmation, investigation, customer service, claims adjustment, and disposition and use a network of Company-approved independent adjusters and attorneys to assist in the adjustment process. Approximately 92% of claims are handled by in-house claims management professionals and approximately 8% are handled by the Company’s assuming reinsurers.
In-house claims management professionals are responsible for coverage confirmation, investigation, customer service, claims adjustment, and disposition and use a network of Company-approved independent adjusters and attorneys to assist in the adjustment process. Approximately 93% of claims are handled by in-house claims management professionals and approximately 7% are handled by the Company’s assuming reinsurers.
As of December 31, 2023, the Company had $10.7 million of net loss reserves for asbestos-related claims and $10.4 million for environmental claims. The Company attempts to estimate the full impact of the A&E exposures by establishing specific case reserves on all known losses.
As of December 31, 2024, the Company had $10.7 million of net loss reserves for asbestos-related claims and $10.0 million for environmental claims. The Company attempts to estimate the full impact of the A&E exposures by establishing specific case reserves on all known losses.
The weighted average duration of the Company’s asset-backed, mortgage-backed and commercial mortgage-backed securities was 1.8 years as of December 31, 2023. At December 31, 2023, the Company’s embedded book yield on its fixed maturities, not including cash, was 4.0% compared with 3.5% at December 31, 2022.
The weighted average duration of the Company’s asset-backed, mortgage-backed and commercial mortgage-backed securities was 1.8 years as of December 31, 2024. At December 31, 2024, the Company’s embedded book yield on its fixed maturities, not including cash, was 4.4% compared with 4.0% at December 31, 2023.
The Company receives annual audited financial statements from each of the partnership investments it owns. 15 Net realized investment gains (losses) were ($2.1) million, ($32.9) million, and $15.9 million for the years ended December 31, 2023, 2022 and 2021, respectively.
The Company receives annual audited financial statements from each of the partnership investments it owns. 15 Net realized investment gains (losses) were $0.5 million, ($2.1) million, and ($32.9) million for the years ended December 31, 2024, 2023, and 2022, respectively.
The Company can hold fixed maturities to recovery and/or maturity; however, the Company regularly re-evaluates its positions and will sell a security if warranted by market conditions. The overall weighted average duration of the Company’s fixed maturities portfolio was 1.1 years as of December 31, 2023 compared to 1.7 years at December 31, 2022.
The Company can hold fixed maturities to recovery and/or maturity; however, the Company regularly re-evaluates its positions and will sell a security if warranted by market conditions. The overall weighted average duration of the Company’s fixed maturities portfolio was 0.8 years as of December 31, 2024 compared to 1.1 years at December 31, 2023.
The Company has sought to structure its portfolio to reduce the risk of default on collateralized commercial real estate obligations and asset-backed securities. Of the $58.9 million of mortgage-backed securities, $2.7 million is invested in U.S. agency paper and $56.2 million is invested in collateralized mortgage obligations, of which $30.5 million, or 54.4%, are rated AA- or better.
The Company has sought to structure its portfolio to reduce the risk of default on collateralized commercial real estate obligations and asset-backed securities. Of the $58.9 million of mortgage-backed securities, $4.2 million is invested in U.S. agency paper and $54.7 million is invested in collateralized mortgage obligations, of which $32.1 million, or 58.6%, are rated AA or better.
The Company seeks to mitigate its reinvestment risk by investing in securities with varied maturity dates, so that only a portion of the portfolio will mature, be called, or be prepaid at any point in time. As of December 31, 2023, the Company had aggregate equity securities of $16.5 million that consisted of preferred stocks.
The Company seeks to mitigate its reinvestment risk by investing in securities with varied maturity dates, so that only a portion of the portfolio will mature, be called, or be prepaid at any point in time. As of December 31, 2024, the Company had aggregate equity securities of $12.3 million that consisted of preferred stocks.
The Company’s investments in other invested assets is comprised of three limited partnerships.
The Company’s investments in other invested assets are comprised of three limited partnerships.
The Company will make available, free of charge on its website, the most recent annual report on Form 10-K and subsequently filed quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after the Company files such material with, or furnishes it to, the United States Securities and Exchange Commission (“SEC”). 20 The public may also read and copy any materials the Company files with the U.S.
The Company will make available, free of charge on its website, the most recent annual report on Form 10-K and subsequently filed quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after the Company files such material with, or furnishes it to, the United States Securities and Exchange Commission (“SEC”).
(2) Does not include net receivable (payable) for securities sold (purchased) of $3,858, ($66), and ($794) for 2023, 2022, and 2021, respectively. The Company does not acquire fixed maturities with the intention to sell these securities in a short period of time.
(2) Does not include net receivable (payable) for securities of $52, $3,858, and ($66) for 2024, 2023, and 2022, respectively. The Company does not acquire fixed maturities with the intention to sell these securities in a short period of time.
Duration was lowered in response to rising interest rates. The Company’s fixed maturities, excluding the asset-backed, mortgage-backed, commercial mortgage-backed and collateralized mortgage obligations, had a weighted average maturity of 1.4 years and a weighted average duration, including cash and short-term investments, of 0.9 years as of December 31, 2023.
Duration was lowered in response to rising interest rates. The Company’s fixed maturities, excluding the asset-backed, mortgage-backed, commercial mortgage-backed and collateralized mortgage obligations, had a weighted average maturity of 0.8 years and a weighted average duration, including cash and short-term investments, of 0.7 years as of December 31, 2024.
The Company also faces credit risk. 93.6% of the Company’s fixed income securities are investment grade securities. 25.9% of the Company’s fixed maturities are rated AAA. See “Quantitative and Qualitative Disclosures about Market Risk” in Item 7A of Part II of this report for a more detailed discussion of the credit market and the Company’s investment strategy.
The Company also faces credit risk. 96.2% of the Company’s fixed income securities are investment grade securities. 7.5% of the Company’s fixed maturities are rated AAA. See “Quantitative and Qualitative Disclosures about Market Risk” in Item 7A of Part II of this report for a more detailed discussion of the credit market and the Company’s investment strategy.
At December 31, 2023, a partnership that invests in stressed and distressed debt instruments was valued at $4.0 million, a partnership that invests in Real Estate Investment Trust (“REIT”) qualifying assets was valued at $8.2 million, and a partnership comprised of performing, stressed or distressed securities and loans across the global fixed income markets was valued at $26.0 million.
At December 31, 2024, a partnership that invests in stressed and distressed debt instruments was valued at $2.6 million, a partnership that invests in Real Estate Investment Trust (“REIT”) qualifying assets was valued at $8.9 million, and a partnership comprised of performing, stressed or distressed securities and loans across the global fixed income markets was valued at $17.9 million.
None of these brokers accounted for 10% or more of Penn-America’s gross written premium or 10% or more of the Company’s consolidated revenues for the year ended December 31, 2023. Technology Platform Penn-America provides its agents with rate, quote and policy issuance systems to transact business.
Penn-America’s assumed reinsurance treaties were acquired through 4 brokers. None of these brokers accounted for 10% or more of Penn-America’s gross written premium or 10% or more of the Company’s consolidated revenues for the year ended December 31, 2024. Technology Platform Penn-America provides its agents with rate, quote and policy issuance systems to transact business.
The insurance departments for the states of Indiana, Virginia, and Pennsylvania completed their most recent financial examinations of the Company’s insurance subsidiaries for the period ended December 31, 2022. No material adverse findings were reported to the Company. Their final reports are expected to be issued in 2024.
The insurance departments for the states of Indiana, Virginia, and Pennsylvania completed their most recent financial examinations of the Company’s insurance subsidiaries for the period from January 1, 2018 through December 31, 2022. No material adverse findings were reported to the Company. Their final reports were issued in 2024.
Some examples of privacy, data protection and cybersecurity laws and regulations include: The New York Department of Financial Services' (“NYDFS”) Cybersecurity Regulation which mandates detailed cybersecurity standards for all institutions, including insurance entities, authorized by the NYDFS to operate in New York.
Numerous states require the Company to certify its compliance with their data protection laws. Some examples of privacy, data protection and cybersecurity laws and regulations include: The New York Department of Financial Services' (“NYDFS”) Cybersecurity Regulation which mandates detailed cybersecurity standards for all institutions, including insurance entities, authorized by the NYDFS to operate in New York.
The Company’s financial statements reflect a net unrealized loss on fixed maturities available for sale as of December 31, 2023 of $28.3 million on a pre-tax basis.
The Company’s financial statements reflect a net unrealized loss on fixed maturities available for sale as of December 31, 2024 of $12.7 million on a pre-tax basis.
The Company’s investment policy allows it to invest in taxable and tax-exempt fixed income investments including corporate bonds as well as publicly traded equities and private equity and private debt investments. The insurance group holds $1,232.2 million of investments, of which, are comprised of 98.7% of fixed income and 1.3% of preferred stock.
The Company’s investment policy allows it to invest in taxable and tax-exempt fixed income investments including corporate bonds as well as publicly traded equities and private equity and private debt investments. The insurance group holds $1,323.4 million of investments, of which, are comprised of 99.1% of fixed income and 0.9% of preferred stock.
Penn-America prioritizes writing business with the goal of achieving a satisfactory risk-adjusted rate of return. Underwriting Penn-America’s insurance products are primarily underwritten via specific binding authority in which the Company grants delegated underwriting authority to its wholesale general agents.
Penn-America prioritizes writing business with the goal of achieving a satisfactory risk-adjusted rate of return. Underwriting Penn-America’s insurance products are primarily underwritten via specific binding authority in which the Company grants delegated underwriting authority to its wholesale general agents. The Company’s wholesale general agents and program administrators contract to underwrite submissions received in accordance with the Company’s underwriting guidelines.
The third layer provided coverage of $75 million in excess of $50 million and could be reinstated once for an additional charge. Property Per Risk Excess of Loss – Effective January 1, 2024, the Company renewed its property per risk excess of loss treaty.
The second layer provided coverage of $25 million in excess of $50 million and could be reinstated once for no additional charge. Property Per Risk Excess of Loss – Effective January 1, 2025, the Company renewed its property per risk excess of loss treaty.
Risks that are not within the specific binding authority must be submitted to Penn-America’s underwriting personnel directly for underwriting review and approval or denial. 7 The Company regularly monitors the underwriting quality of its wholesale general agents and retail agents through a disciplined system of controls, which includes one or more of the following: • automated system criteria edits and exception reports; • targeted policy reviews to measure adherence to the Company’s underwriting manual or letter of authority including: risk selection, underwriting compliance, policy issuance and pricing; • periodic on-site and virtual comprehensive audits to evaluate processes, controls, profitability and adherence to all aspects of the Company’s underwriting manual or letter of authority including: risk selection, underwriting compliance, policy issuance and pricing; • internal quarterly actuarial analysis of loss ratios produced by business underwritten by the Company’s wholesale general agents and retail agents; and • internal quarterly analysis of financial results, including premium growth and overall profitability of business produced by the Company’s wholesale general agents and retail agents.
The Company regularly monitors the underwriting quality of its wholesale general agents through a disciplined system of controls which includes one or more of the following: • automated system criteria edits and exception reports; • targeted policy reviews to measure adherence to the Company’s underwriting manual or letter of authority including: risk selection, underwriting compliance, policy issuance and pricing; • periodic on-site and virtual comprehensive audits to evaluate processes, controls, profitability and adherence to the Company’s underwriting manual or letter of authority including: risk selection, underwriting compliance, policy issuance and pricing; • internal quarterly actuarial analysis of loss ratios produced by business underwritten by the Company’s wholesale general agents and retail agents; and • internal quarterly analysis of financial results, including premium growth and overall profitability of business produced by the Company’s wholesale general agents and retail agents.
A+ 5.8 6.5 1.4 8.1 Factory Mutual Insurance Company A+ 4.4 4.9 1.3 7.6 Allianz Risk Transfer A+ 4.2 4.7 — — Westport Insurance Corporation A+ 3.0 3.4 — — Clearwater Insurance Company NR 2.6 2.9 — — Argo Re, Ltd A 2.2 2.5 — — Scor Reinsurance Company A 1.7 1.9 0.2 1.2 Hannover Rück SE A+ 1.7 1.9 2.5 14.6 Subtotal $ 76.4 85.5 % $ 8.3 48.5 % All other reinsurers 13.0 14.5 8.8 51.5 Total reinsurance receivables before allowance for expected credit losses $ 89.4 100.0 % $ 17.1 100.0 % Allowance for expected credit losses (9.0 ) Total receivables, net of allowance for expected credit losses 80.4 Collateral held in trust from reinsurers (8.8 ) Net receivables $ 71.6 At December 31, 2023, the Company carried reinsurance receivables, net of collateral held in trust, of $71.6 million.
A+ 5.7 7.5 1.3 12.2 Allianz Risk Transfer A+ 4.4 5.8 — — Westport Insurance Corporation A+ 2.2 2.9 — — Argo Re, Ltd A- 2.2 2.9 — — Clearwater Insurance Company NR 2.1 2.8 — — Factory Mutual Insurance Company A+ 1.9 2.5 1.4 13.2 Scor Reinsurance Company A 1.7 2.2 0.4 3.8 Hannover Rück SE A+ 1.6 2.1 (0.3 ) (2.8 ) Subtotal $ 67.5 88.9 % $ 8.5 80.2 % All other reinsurers 8.4 11.1 2.1 19.8 Total reinsurance receivables before allowance for expected credit losses $ 75.9 100.0 % $ 10.6 100.0 % Allowance for expected credit losses (9.0 ) Total receivables, net of allowance for expected credit losses 66.9 Collateral held in trust from reinsurers (6.5 ) Net receivables $ 60.4 At December 31, 2024, the Company carried reinsurance receivables, net of collateral held in trust, of $60.4 million.
The following table shows the average amount of fixed maturities, income earned on fixed maturities, and the book yield thereon, as well as unrealized gain (loss) for the periods indicated: Years Ended December 31, (Dollars in thousands) 2023 2022 2021 Average fixed maturities at book value $ 1,311,908 $ 1,247,735 $ 1,171,378 Gross income on fixed maturities (1) $ 49,987 $ 33,852 $ 25,751 Book yield 3.81 % 2.71 % 2.20 % Fixed maturities at book value $ 1,322,092 $ 1,301,723 $ 1,193,746 Unrealized gain (loss) $ (28,299 ) $ (53,525 ) $ 8,120 (1) Represents income earned by fixed maturities, gross of investment expenses and excluding realized gains and losses.
The following table shows the average amount of fixed maturities, income earned on fixed maturities, and the book yield thereon, as well as unrealized gain (loss) for the periods indicated: Years Ended December 31, (Dollars in thousands) 2024 2023 2022 Average fixed maturities at book value $ 1,358,366 $ 1,311,908 $ 1,247,735 Gross income on fixed maturities (1) $ 58,675 $ 49,987 $ 33,852 Book yield 4.32 % 3.81 % 2.71 % Fixed maturities at book value $ 1,394,639 $ 1,322,092 $ 1,301,723 Unrealized gain (loss) $ (12,731 ) $ (28,299 ) $ (53,525 ) (1) Represents income earned by fixed maturities, gross of investment expenses and excluding realized gains and losses.
These structures are utilized to protect the Company’s primary positions on property and casualty products. The excess of loss structures allow the Company to maximize underwriting profits over time by retaining its desired amount of risk in each product written while helping to protect against the possibility of unforeseen volatility.
The excess of loss structures allow the Company to maximize underwriting profits over time by retaining its desired amount of risk in each product written while helping to protect against the possibility of unforeseen volatility.
The respective state insurance regulators use the formula as an early warning regulatory tool to identify possible inadequately capitalized insurers for purposes of initiating regulatory action, and generally not as a means to rank insurers.
The formula takes into account the risk characteristics of the insurer, including asset risk, insurance risk, interest rate risk and business risk. The respective state insurance regulators use the formula as an early warning regulatory tool to identify possible inadequately capitalized insurers for purposes of initiating regulatory action, and generally not as a means to rank insurers.
As of December 31, 2023, the Company had $1,386.6 million of investments and cash and cash equivalent assets, including $16.5 million of preferred stock, and $38.2 million of limited partnership investments. Insurance company investments must comply with applicable statutory regulations that prescribe the type, quality, and concentration of investments.
As of December 31, 2024, the Company had $1,440.6 million of investments and cash and cash equivalent assets, including $12.3 million of preferred stock, and $29.4 million of limited partnership investments. Insurance company investments must comply with applicable statutory regulations that prescribe the type, quality, and concentration of investments.
Assumed reinsurance treaties are acquired through brokers. 5 The following table sets forth the gross written premiums for each of the primary business divisions within Penn-America: For the Years Ended December 31, 2023 2022 2021 (Dollars in thousands) Amount Percent Amount Percent Amount Percent Wholesale Commercial $ 234,941 63.6 % $ 219,688 56.6 % $ 194,196 55.5 % Programs 72,535 19.5 121,838 31.4 115,035 32.9 InsurTech 48,309 13.1 40,977 10.6 37,881 10.8 Assumed Reinsurance 13,875 3.8 5,464 1.4 2,850 0.8 Total $ 369,660 100.0 % $ 387,967 100.0 % $ 349,962 100.0 % Excess and Surplus Lines Marketplace Penn-America operates in the excess and surplus lines marketplace.
Assumed reinsurance treaties are acquired through brokers. 5 The following table sets forth the gross written premiums for each of the primary business divisions within Penn-America: For the Years Ended December 31, 2024 2023 2022 (Dollars in thousands) Amount Percent Amount Percent Amount Percent Wholesale Commercial $ 248,600 62.2 % $ 234,941 63.6 % $ 219,688 56.6 % Specialty Products 69,612 17.3 72,535 19.5 121,838 31.4 InsurTech 56,341 14.1 48,309 13.1 40,977 10.6 Assumed Reinsurance 25,423 6.4 13,875 3.8 5,464 1.4 Total $ 399,976 100.0 % $ 369,660 100.0 % $ 387,967 100.0 % Excess and Surplus Lines Marketplace Penn-America operates in the excess and surplus lines marketplace.
In addition, the Company holds $203.0 million in asset-backed securities, of which 82.2% are rated A- or better and $79.1 million in commercial mortgaged-backed securities, of which 83.0% are rated AA or better. The weighted 14 average credit enhancement for the Company’s asset-backed securities is 36.1. The Company also faces liquidity risk.
In addition, the Company holds $135.4 million in asset-backed securities, of which 79.6% are rated A- or better and $65.6 million in bonds commercial mortgaged-backed securities, of which 83.6% are rated AA- or better. The 14 weighted average credit enhancement for the Company’s asset-backed securities is 38.7. The Company also faces liquidity risk.
These regulations permit investments, within specified limits and subject to certain qualifications, in federal, state, and municipal obligations, corporate bonds, and preferred and common equity securities. 13 The following table summarizes by type the estimated fair value of Global Indemnity’s investments and cash and cash equivalents as of December 31, 2023, 2022, and 2021: December 31, 2023 December 31, 2022 December 31, 2021 (Dollars in thousands) Estimated Fair Value Percent of Total Estimated Fair Value Percent of Total Estimated Fair Value Percent of Total Cash and cash equivalents $ 38,037 2.7 % $ 38,846 2.9 % $ 78,278 5.1 % U.S. treasuries 494,223 35.6 344,103 25.6 150,118 9.8 Agency obligations — — — — 5,630 0.4 Obligations of states and political subdivisions 26,150 1.9 31,595 2.4 54,721 3.6 Mortgage-backed securities (1) 58,927 4.3 62,116 4.6 250,341 16.3 Asset-backed securities 202,952 14.6 189,400 14.1 172,642 11.3 Commercial mortgage-backed securities 79,080 5.7 98,664 7.3 136,893 8.9 Corporate bonds 291,713 21.0 338,780 25.3 292,383 19.0 Foreign corporate bonds 140,748 10.2 183,540 13.7 139,138 9.1 Total fixed maturities 1,293,793 93.3 1,248,198 93.0 1,201,866 78.4 Equity securities 16,508 1.2 17,520 1.3 99,978 6.5 Other invested assets 38,236 2.8 38,176 2.8 152,651 10.0 Total investments and cash and cash equivalents (2) $ 1,386,574 100.0 % $ 1,342,740 100.0 % $ 1,532,773 100.0 % (1) Includes collateralized mortgage obligations of $56,186, $58,773, and $101,698 for 2023, 2022, and 2021, respectively.
These regulations permit investments, within specified limits and subject to certain qualifications, in federal, state, and municipal obligations, corporate bonds, and preferred and common equity securities. 13 The following table summarizes by type the estimated fair value of Global Indemnity’s investments and cash and cash equivalents as of December 31, 2024, 2023, and 2022: December 31, 2024 December 31, 2023 December 31, 2022 (Dollars in thousands) Estimated Fair Value Percent of Total Estimated Fair Value Percent of Total Estimated Fair Value Percent of Total Cash and cash equivalents $ 17,009 1.2 % $ 38,037 2.7 % $ 38,846 2.9 % U.S. treasuries 875,246 60.7 494,223 35.6 344,103 25.6 Obligations of states and political subdivisions 16,335 1.1 26,150 1.9 31,595 2.4 Mortgage-backed securities (1) 58,920 4.1 58,927 4.3 62,116 4.6 Asset-backed securities 135,427 9.4 202,952 14.6 189,400 14.1 Commercial mortgage-backed securities 65,568 4.6 79,080 5.7 98,664 7.3 Corporate bonds 156,096 10.8 291,713 21.0 338,780 25.3 Foreign corporate bonds 74,316 5.2 140,748 10.2 183,540 13.7 Total fixed maturities 1,381,908 95.9 1,293,793 93.3 1,248,198 93.0 Equity securities 12,284 0.9 16,508 1.2 17,520 1.3 Other invested assets 29,413 2.0 38,236 2.8 38,176 2.8 Total investments and cash and cash equivalents (2) $ 1,440,614 100.0 % $ 1,386,574 100.0 % $ 1,342,740 100.0 % (1) Includes collateralized mortgage obligations of $54,750, $56,186, and $58,773 for 2024, 2023, and 2022, respectively.
The two key activities of Non-Core Operations are managing transition service agreements related to the sales of the Company’s renewal rights and handling claims activity and loss reserves on de-emphasized and terminated business.
Net earned premiums were $7.2 million in 2024 compared to $118.8 million in 2023. The two key activities of Non-Core Operations are managing transition service agreements related to the sales of the Company’s renewal rights and handling claims activity and loss reserves on de-emphasized and terminated business.
Reinsurance assists the Company in controlling exposure to severe losses and protecting capital resources. The type, cost and limits of reinsurance it purchases can vary from year to year based upon the Company’s desired retention levels and the availability of quality reinsurance at an acceptable price. The Company purchases reinsurance based on guidelines established by management.
The type, cost and limits of reinsurance it purchases can vary from year to year based upon the Company’s desired retention levels and the availability of quality reinsurance at an acceptable price. The Company purchases reinsurance based on guidelines established by management. Some of the Company’s reinsurance contracts renew on an annual basis.
Federal Reserve with supervisory authority over insurance companies that are deemed to be “systemically important.” The Company continues to monitor federal insurance regulations and any changes thereto that may impact operations. Privacy, Data Protection and Cybersecurity The Company is subject to numerous U.S. federal and state laws governing the protection of personal and confidential information.
Federal Reserve with supervisory authority over insurance companies that are deemed to be “systemically important.” 19 Privacy, Data Protection and Cybersecurity The Company is subject to numerous U.S. federal and state laws governing the protection of personal and confidential information. These laws and regulations are increasing in complexity, and the requirements are extensive and detailed.
The second layer provides coverage of $25 million in excess of $50 million and can be reinstated once at no additional charge. This replaced the treaty that was effective June 1, 2022, where the Company purchased three layers of occurrence coverage for losses of $115 million in excess of $10 million.
This replaced the treaty that was effective June 1, 2023, where the Company purchased two layers of occurrence coverage for losses of $50 million in excess of $25 million. The first layer provided coverage of 100% of $25 million in excess of $25 million and could be reinstated once for no additional charge.
Income earned by the subsidiaries of Global Indemnity Group, LLC is subject to corporate tax in the United States and, therefore, is not taxable to Global Indemnity Group, LLC’s shareholders until the income is distributed by the subsidiaries to Global Indemnity Group, LLC. The Company operates its business through two segments, Penn-America and Non-Core Operations.
Income earned by the subsidiaries of Global Indemnity Group, LLC is subject to corporate tax in the United States and, therefore, is not taxable to Global Indemnity Group, LLC’s shareholders until the income is distributed by the subsidiaries to Global Indemnity Group, LLC.
Contracts are executed for each agent reflecting key terms such as direct commissions and profit commissions. Agents are eligible for profit commissions for superior underwriting results. For Wholesale Commercial and Programs, the appointed agents’ performance is routinely monitored by Penn-America's internal underwriting staff. Production, loss results, findings from policy reviews, etc. are shared as part of Penn-America's agency management practices.
Contracts are executed for each agent reflecting key terms such as direct commissions and profit commissions. Agents are eligible for profit commissions for superior underwriting results. For Wholesale Commercial and Specialty Products, the appointed agents’ performance is routinely monitored by Penn-America's internal underwriting staff.
In 2021, the Company decided to cease writing certain Property Brokerage business which was part of the Commercial Specialty segment (now known as Penn-America), as well as non-renewing several treaties within the prior Reinsurance Operations segment which are now included in Non-Core Operations. 8 See Note 2 of the notes to consolidated financial statements in Item 8 of Part II of this report for additional information on the sales of the Company’s renewal rights.
In 2021, the Company decided to cease writing certain Property Brokerage 8 business which was part of the Commercial Specialty segment (now known as Penn-America), as well as non-renewing several treaties within the prior Reinsurance Operations segment which are now included in Non-Core Operations.
Some of the Company’s reinsurance contracts renew on an annual basis. Although reinsurance does not legally discharge an insurer from its primary liability for the full amount of limits on the policies it has written, it does make the assuming reinsurer liable to the insurer to the extent of the insurance ceded.
Although reinsurance does not legally discharge an insurer from its primary liability for the full amount of limits on the policies it has written, it does make the assuming reinsurer liable to the insurer to the extent of the insurance ceded. The Company primarily utilizes treaty reinsurance products made up of proportional and excess of loss reinsurance.
The respective state insurance regulators have explicit regulatory authority to require various actions by, or to take various actions against, insurers whose total adjusted capital does not exceed certain company action level risk-based capital levels.
The respective state insurance regulators have explicit regulatory authority to require various actions by, or to take various actions against, insurers whose total adjusted capital does not exceed certain company action level risk-based capital levels. 18 Based on the standards currently adopted, the insurance companies reported in their 2024 statutory filings that their capital and surplus are above the prescribed risk-based capital requirements.
Geographic Concentration The following table sets forth the geographic distribution of Penn-America’s gross written premiums for the periods indicated: For the Years Ended December 31, 2023 2022 2021 (Dollars in thousands) Amount Percent Amount Percent Amount Percent California $ 56,361 15.2 % $ 65,048 16.7 % $ 59,478 16.9 % Florida 46,859 12.7 49,902 12.9 39,752 11.4 New York 38,812 10.5 45,409 11.7 39,036 11.2 Texas 34,413 9.3 36,448 9.4 35,068 10.0 Massachusetts 17,940 4.9 19,283 5.0 16,022 4.6 Louisiana 13,188 3.6 11,811 3.0 11,022 3.1 North Carolina 12,338 3.3 13,891 3.6 13,978 4.0 Pennsylvania 11,413 3.1 12,289 3.2 10,404 3.0 Illinois 11,386 3.1 11,042 2.8 9,628 2.8 New Jersey 11,189 3.0 11,935 3.1 10,394 3.0 Subtotal 253,899 68.7 277,058 71.4 244,782 70.0 All other states 101,886 27.5 105,445 27.2 102,330 29.2 Assumed Reinsurance 13,875 3.8 5,464 1.4 2,850 0.8 Total $ 369,660 100.0 % $ 387,967 100.0 % $ 349,962 100.0 % NON-CORE OPERATIONS The Company’s Non-Core Operations segment represents lines of business that have been de-emphasized or are no longer being written.
Geographic Concentration The following table sets forth the geographic distribution of Penn-America’s gross written premiums for the periods indicated: For the Years Ended December 31, 2024 2023 2022 (Dollars in thousands) Amount Percent Amount Percent Amount Percent California $ 57,308 14.3 % $ 56,361 15.2 % $ 65,048 16.7 % Florida 51,295 12.8 46,859 12.7 49,902 12.9 Texas 41,478 10.4 34,413 9.3 36,448 9.4 New York 36,846 9.2 38,812 10.5 45,409 11.7 Massachusetts 18,932 4.7 17,940 4.9 19,283 5.0 Louisiana 14,494 3.6 13,188 3.6 11,811 3.0 New Jersey 14,137 3.5 11,189 3.0 11,935 3.1 Pennsylvania 12,718 3.2 11,413 3.1 12,289 3.2 Illinois 11,388 2.9 11,386 3.1 11,042 2.8 Georgia 11,372 2.8 8,148 2.2 11,011 2.9 Subtotal 269,968 67.4 249,709 67.6 274,178 70.7 All other states 104,587 26.2 106,076 28.6 108,325 27.9 Assumed Reinsurance 25,421 6.4 13,875 3.8 5,464 1.4 Total $ 399,976 100.0 % $ 369,660 100.0 % $ 387,967 100.0 % NON-CORE OPERATIONS The Company’s Non-Core Operations segment represents lines of business that have been de-emphasized or are no longer being written.
The Company primarily utilizes treaty reinsurance products made up of proportional and excess of loss reinsurance. Additionally, the Company may purchase facultative reinsurance protection on single risks when deemed necessary. The Company purchases specific types and structures of reinsurance depending upon the characteristics of the lines of business and specialty products underwritten.
Additionally, the Company may purchase facultative reinsurance protection on single risks when deemed necessary. The Company purchases specific types and structures of reinsurance depending upon the characteristics of the lines of business and specialty products underwritten. The Company will typically seek to place proportional reinsurance for umbrella and excess products, certain specialty products, or new products in the development stage.
Risk-Based Capital Regulations The state insurance departments of Pennsylvania, Indiana, and Virginia require that each domestic insurer report its risk-based capital based on a formula calculated by applying factors to various asset, premium and reserve items. The formula takes into account the risk characteristics of the insurer, including asset risk, insurance risk, interest rate risk and business risk.
These distributions resulted in increased consolidated surplus of the insurance companies and allow for more efficient management of capital and liquidity. Risk-Based Capital Regulations The state insurance departments of Pennsylvania, Indiana, and Virginia require that each domestic insurer report its risk-based capital based on a formula calculated by applying factors to various asset, premium and reserve items.
The Company seeks to compete through innovative products, appropriate pricing, niche underwriting expertise, and quality service to policyholders and general agencies. 16 Employees The Company had approximately 266 employees at December 31, 2023 as compared with 355 employees at December 31, 2022. None of the Company’s employees are covered by collective bargaining agreements as of December 31, 2023.
The Company seeks to compete through innovative products, appropriate pricing, niche underwriting expertise, and quality service to policyholders and general agencies. 16 Employees The Company had 266 employees on December 31, 2024 and 2023.
To determine a credit rating, AM Best performs quantitative and qualitative analysis which includes evaluating balance sheet strength, operating performance, enterprise risk management, and the business profile.
To determine a credit rating, AM Best performs quantitative and qualitative analysis which includes evaluating balance sheet strength, operating performance, enterprise risk management, and the business profile. These ratings are based on factors relevant to policyholders, general agencies, insurance brokers and intermediaries and are not directed to the protection of investors.
The Company will typically seek to place proportional reinsurance for umbrella and excess products, certain specialty products, or new products in the development stage. The Company believes that this approach allows it to control net exposure in these product areas most cost effectively. 9 The Company purchases reinsurance on an excess of loss basis to cover individual risk severity.
The Company believes that this approach allows it to control net exposure in these product areas most cost effectively. The Company purchases reinsurance on an excess of loss basis to cover individual risk severity. These structures are utilized to protect the Company’s primary positions on property and casualty products.
The first layer provided coverage of 40% of $10 million in excess of $10 million and could be reinstated once at no additional charge. The second layer provided coverage of $30 million in excess of $20 million and could be reinstated once for an additional charge.
The first layer provides coverage of 100% of $25 million in excess of $25 million and can be reinstated once for an additional charge. The second layer provides coverage of $25 million in excess of $50 million and can be reinstated once for an additional charge .
The Company’s insurance subsidiaries' departures from usual values of certain IRIS ratios are as follows: • Investment yields were lower than the IRIS range for Penn-Patriot Insurance Company and Penn-America Insurance Company.
The Company’s insurance subsidiaries' departures from usual values of certain IRIS ratios are as follows: • Investment yields were lower than the IRIS range for Penn-Patriot Insurance Company due to its high percentage of invested assets consisting of wholly-owned subsidiaries which did not pay dividends in 2024.
For cannabis property risks, this treaty provides coverage of 70% of $2.5 million per risk in excess of $2.5 million per risk and 55% of $5.0 million per risk in excess of $5.0 million per risk This replaced the property treaty which expired December 31, 2023 which provided coverage of 50% of $7.5 million per risk in excess of $2.5 million per risk for the entire Company and a cannabis quota share property treaty which ceded 65.45% of losses from $0 to $11 million per occurrence.
This replaced the property treaty which expired December 31, 2024 and provided coverage for property risks excluding cannabis property risks of 100% of $2.5 million per risk in excess of $2.5 million per risk and 85% of $5.0 million per risk in excess of $5.0 million per risk for the entire Company.
These laws may discourage potential acquisition proposals and may delay, deter or prevent a change of control of Global Indemnity Group, LLC, including through transactions, and in particular unsolicited transactions, that some or all of the shareholders of Global Indemnity Group, LLC might consider desirable. 18 Insurance Regulatory Information System Ratios The NAIC Insurance Regulatory Information System ("IRIS") was developed by a committee of the state insurance regulators and is intended primarily to assist state insurance departments in executing their statutory mandates to oversee the financial condition of insurance companies operating in their respective states.
Insurance Regulatory Information System Ratios The NAIC Insurance Regulatory Information System ("IRIS") was developed by a committee of the state insurance regulators and is intended primarily to assist state insurance departments in executing their statutory mandates to oversee the financial condition of insurance companies operating in their respective states.
Reinsurance Agreement – Effective August 8 th , 2022, the company entered into an agreement to cede 100% of its underwriting results related to certain agricultural business. To the extent that there may be an increase or decrease in catastrophe or casualty clash exposure in the future, the Company may increase or decrease its reinsurance protection for these exposures commensurately.
In addition, in certain circumstances, the Company holds collateral, including letters of credit, under reinsurance agreements. 9 To the extent that there may be an increase or decrease in catastrophe or casualty clash exposure in the future, the Company may increase or decrease its reinsurance protection for these exposures commensurately.
Casualty Excess of Loss – Effective December 31, 2023, the Company terminated the casualty excess of loss treaty. The contract was on a continuous basis. Effective January 1, 2024, the Company purchased a new treaty to provide coverage of 80% of $10 million per occurrence in excess of $2.5 million per occurrence for casualty lines of business.
Casualty Excess of Loss – Effective January 1, 2025, the Company renewed its treaty which provide coverage of 80% of $10 million per occurrence in excess of $2.5 million per occurrence for casualty lines of business. The treaty is subject to an aggregate limit of $20 million.
Premiums audits are performed on the Company’s casualty business rated on revenue and payroll exposure. A comprehensive, regularly updated underwriting manual that specifically outlines risk eligibility which is developed based on the type of insured, nature of exposure and overall expected profitability is used for underwriting.
A comprehensive, regularly updated underwriting manual that specifically outlines risk eligibility which is developed based on the type of insured, nature of exposure and overall expected profitability is used for underwriting. This manual also outlines (a) rates, (b) underwriting guidelines, including but not limited to policy forms, terms and conditions, and (c) policy issuance instructions.
Collectively, the Company’s insurance subsidiaries are licensed in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The Penn-America segment comprises the Company’s Insurance Operations (“Insurance Operations”).
Collectively, the Company’s insurance subsidiaries are licensed in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Business Segments The Company currently operates its business through two segments, Penn-America and Non-Core Operations. Penn-America consists of all core products from its Wholesale Commercial, Specialty Products, InsurTech, and Assumed Reinsurance divisions.
The Company’s underwriters have defined levels of authority that vary based on experience and performance. Agents have no authority to change forms or underwriting rules and have very limited discretionary pricing authority. The Company and its agents perform additional loss control activities through inspection of insured properties.
Approximately 90% of Penn-America’s policies are fully automated and are processed by the agents utilizing the Company’s technology platform to rate, quote and issue policies. The Company’s underwriters have defined levels of authority that vary based on experience and performance. Agents have no authority to change forms or underwriting rules and have very limited discretionary pricing authority.
To protect against these exposures, the Company purchases a property catastrophe treaty. Effective June 1, 2023, the Company purchased two layers of occurrence coverage for losses of $50 million in excess of $25 million. The first layer provides coverage of 100% of $25 million in excess of $25 million and can be reinstated once at no additional charge.
The Company’s material reinsurance treaties are as follows: Property Catastrophe Excess of Loss – The Company’s current property writings create exposure to catastrophic events. To protect against these exposures, the Company purchases a property catastrophe treaty. Effective June 1, 2024, the Company purchased two layers of occurrence coverage for losses of $50 million in excess of $25 million.
(Dollars in millions) AM Best Rating Gross Reinsurance Receivables Percent of Total Ceded Premiums Written Percent of Total Munich Re America Corp. A+ $ 41.2 46.1 % $ 2.1 12.3 % General Reinsurance Corp. A++ 9.6 10.7 0.8 4.7 Swiss Reinsurance America Corp.
Also shown are the amounts of premiums ceded by the Company to these reinsurers during the year ended December 31, 2024. (Dollars in millions) AM Best Rating Gross Reinsurance Receivables Percent of Total Ceded Premiums Written Percent of Total Munich Re America Corp. A+ $ 35.8 47.2 % $ 4.3 40.6 % General Reinsurance Corp.
This transaction resulted in the redomestication of the Company to the United States. Global Indemnity Group, LLC’s class A common shares are publicly traded on the New York Stock Exchange (“NYSE”). Global Indemnity Group, LLC’s predecessors have been publicly traded since 2003.
History Global Indemnity Group, LLC (“Global Indemnity” or “the Company”), is a Delaware limited liability company. Global Indemnity Group, LLC’s class A common shares are publicly traded on the New York Stock Exchange (“NYSE”). Global Indemnity Group, LLC’s predecessors have been publicly traded since 2003. Global Indemnity Group, LLC is a publicly traded partnership for U.S. federal income tax purposes.
Additionally, in-person visitations are conducted as needed by their assigned underwriter and/or manager with several additional visits conducted virtually to foster relationships. Agents are visited at various industry events. 6 Penn-America products, excluding assumed reinsurance, are distributed through approximately 360 wholesale general agents, 2,400 retail agents, and 20,000 direct-to-consumer policies. One agent provided 10.1% of Penn-America’s gross written premiums.
Agents are visited at various industry events. 6 Penn-America products, excluding assumed reinsurance, are distributed through approximately 360 wholesale general agents, 2,800 retail agents, and 20,000 direct-to-consumer policies. None of these agents accounted for more than 10% of gross written premiums within the Penn-America segment for the year ended December 31, 2024.
Global Indemnity's companies are all U.S. companies or have made elections to be taxed as a U.S. company. U.S.
Regulation General The insurance industry is regulated in most countries, although the degree and type of regulation varies significantly from one jurisdiction to another. Global Indemnity's companies are all U.S. companies or have made elections to be taxed as a U.S. company. U.S.
The Penn-America segment is mainly comprised of what was the Commercial Specialty segment. Penn-America includes all core products which include Wholesale Commercial, Programs, Assumed Reinsurance, and the InsurTech products. InsurTech products are Collectibles, VacantExpress. and smaller products which are distributed via the internet. Penn-America’s gross premiums written in 2023 was $369.7 million. The other segment is Non-Core Operations.
InsurTech products consist of Collectibles, VacantExpress, and niche products which are distributed via the internet. Penn-America’s gross premiums written in 2024 were $400.0 million. Non-Core Operations includes business that has been de-emphasized or is no longer written.
Securities and Exchange Commission at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549 or by calling the SEC at 1-800-SEC-0330. The SEC maintains, free of charge, an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
The SEC maintains, free of charge, a website (www.sec.gov) that contains reports, proxy and information statements, and other information filed or furnished electronically by the Company with the SEC.
The treaty is subject to an aggregate limit of $20 million. Amended & Restated Reinsurance Agreement – Effective October 26, 2021, the company entered into an agreement to cede 100% of its underwriting results related to certain specialty property business.
Quota Share Reinsurance Agreements for Non-Core Products: • Effective October 26, 2021, the Company entered into an agreement to cede 100% of its underwriting results related to certain specialty property business. • Effective August 8 th , 2022, the Company entered into an agreement to cede 100% of its underwriting results related to certain agricultural business. 10 The following table sets forth the ten reinsurers for which the Company has the largest reinsurance receivables as of December 31, 2024.
In the first quarter of 2023, the Company reduced its workforce by 54 employees in conjunction with the restructuring of its insurance operations. See Note 3 of the notes to the consolidated financial statements in Item 8 of Part II of this report for additional information on the restructuring.
See Note 2 of the notes to the consolidated financial statements in Item 8 of Part II of this report for additional information on the sale of the renewal rights related to the Company’s Farm, Ranch & Stable business and Note 2 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2023 Annual Report on Form 10-K for more information on the sale of renewal rights related to the Company's manufactured and dwelling homes business.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeGlobal Indemnity Group, LLC’s assets primarily consist of cash, an investment portfolio, and ownership of the shares of its direct and indirect subsidiaries.
Biggest changeThe assets of Global Indemnity Group, LLC and Belmont Holdings GX, Inc. primarily consist of cash, an investment portfolio, and ownership of the shares of its direct and indirect subsidiaries. 27 Global Indemnity Group LLC’s primary source of funds to meet ongoing liquidity needs is investment income generated by its investment portfolio, interest and principal payments on intercompany debt with Belmont Holdings GX, Inc. and reimbursement for equity awards granted to employees of Belmont Holdings GX, Inc. and Penn-America Underwriters, LLC.
The Company is subject to extensive supervision and regulation in the U.S. states in which it operates. This is particularly true in those states in which the Company’s insurance subsidiaries are licensed, as opposed to those states where its insurance subsidiaries write business on a surplus lines basis.
The Company's insurance company subsidiaries are subject to extensive supervision and regulation in the U.S. states in which it operates. This is particularly true in those states in which the Company’s insurance subsidiaries are licensed, as opposed to those states where its insurance subsidiaries write business on a surplus lines basis.
The industry's profitability can be affected significantly by: • competition; • capital capacity; • rising levels of actual costs that are not foreseen by companies at the time they price their products; • volatile and unpredictable developments, including man-made, weather-related and other natural catastrophes or terrorist attacks; • changes in loss reserves resulting from the general claims and legal environments as different types of claims arise and judicial interpretations relating to the scope of insurers' liability develop; and • fluctuations in interest rates, inflationary pressures and other changes in the investment environment, which affect returns on invested assets and may affect the ultimate payout of losses.
The industry's profitability can be affected significantly by: • competition; • capital capacity; • rising levels of actual costs that are not foreseen by companies at the time they price their products; • volatile and unpredictable developments, including man-made, weather-related and other natural catastrophes or terrorist attacks; 26 • changes in loss reserves resulting from the general claims and legal environments as different types of claims arise and judicial interpretations relating to the scope of insurers' liability develop; and • fluctuations in interest rates, inflationary pressures and other changes in the investment environment, which affect returns on invested assets and may affect the ultimate payout of losses.
As a 28 result of the foregoing, the Dodd-Frank Act, or other additional federal regulation that is adopted in the future, could impose significant burdens on the Company, including impacting the ways in which it conducts business, increasing compliance costs and duplicating state regulation, and could result in a competitive disadvantage, particularly relative to smaller insurers who may not be subject to the same level of regulation.
As a result of the foregoing, the Dodd-Frank Act, or other additional federal regulation that is adopted in the future, could impose significant burdens on the Company, including impacting the ways in which it conducts business, increasing compliance costs and duplicating state regulation, and could result in a competitive disadvantage, particularly relative to smaller insurers who may not be subject to the same level of regulation.
Holders of Global Indemnity Group, LLC’s common shares may be subject to U.S. federal, state and local taxation on their allocable share of Global Indemnity Group, LLC’s items of income, gain, loss, deduction and credit, for each of Global Indemnity Group, LLC’s taxable years ending with or within their taxable year, regardless of whether they receive any cash distributions from Global Indemnity Group, LLC.
Holders of Global Indemnity Group, LLC’s common shares may be subject to U.S. federal, state and local taxation on their allocable share of Global Indemnity Group, LLC’s items of income, gain, loss, deduction and credit, for each of Global Indemnity Group, LLC’s taxable years ending with or within their taxable year, regardless of whether they receive any cash distributions from Global Indemnity Group, 31 LLC.
For example, as industry practices and legal, judicial, social and other conditions change, unexpected and unintended exposures related to claims and coverage may emerge. These exposures may either extend coverage beyond the Company’s 21 underwriting intent or increase the frequency or severity of claims. As a result, such developments could cause the Company’s level of reserves to be inadequate.
For example, as industry practices and legal, judicial, social and other conditions change, unexpected and unintended exposures related to claims and coverage may emerge. These exposures may either extend coverage beyond the Company’s underwriting intent or increase the frequency or severity of claims. As a result, such developments could cause the Company’s level of reserves to be inadequate.
Security incidents have the potential to interrupt business, cause delays in processes and procedures directly affecting the Company, and jeopardize the Company’s, insureds’, claimants’, agents’ and others’ confidential data resulting in data loss, loss of assets, and reputational damages. If this occurs it could have a material adverse effect on the Company’s business operations and financial results.
Security incidents have the potential to interrupt business, cause delays in processes and procedures directly affecting the Company, and jeopardize the Company’s, insureds’, claimants’, agents’ and others’ confidential data resulting in data loss, 23 loss of assets, and reputational damages. If this occurs, it could have a material adverse effect on the Company’s business operations and financial results.
If any of these wholesale professional general agencies fail to comply with the Company’s underwriting guidelines and the terms of their appointment, the Company could be bound on a particular risk or number of risks that were not anticipated when it developed the insurance products or estimated losses and loss adjustment expenses.
If any of these professional general agencies fail to comply with the Company’s underwriting guidelines and the terms of their appointment, the Company could be bound on a particular risk or number of risks that were not anticipated when it developed the insurance products or estimated losses and loss adjustment expenses.
Global Indemnity Group, LLC has also agreed to pay Fox Paine & Company, LLC a transaction advisory fee of cash in an amount to be agreed upon, plus reimbursement of expenses upon the consummation 29 of a change of control transaction that does not involve Fox Paine & Company, LLC and its affiliates in exchange for advisory services to be provided by Fox Paine & Company, LLC in connection therewith.
Global Indemnity Group, LLC has also agreed to pay Fox Paine & Company, LLC a transaction advisory fee of cash in an amount to be agreed upon, plus reimbursement of expenses upon the consummation of a change of control transaction that does not involve Fox Paine & Company, LLC and its affiliates in exchange for advisory services to be provided by Fox Paine & Company, LLC in connection therewith.
Consequently, holders of Global 33 Indemnity Group, LLC’s common shares who are U.S. taxpayers may need to file annually with the IRS (and certain states) a request for an extension past the April 15 or the otherwise applicable due date of their income tax return for the taxable year.
Consequently, holders of Global Indemnity Group, LLC’s common shares who are U.S. taxpayers may need to file annually with the IRS (and certain states) a request for an extension past the April 15 or the otherwise applicable due date of their income tax return for the taxable year.
Global Indemnity Group, LLC intends to furnish holders of the common shares, as soon as reasonably practicable after the close of each calendar year, with tax information (including IRS Schedules K-1), which describes their allocable share of gross ordinary income for Global Indemnity Group, LLC’s preceding taxable year.
Global Indemnity Group, LLC intends to furnish holders of the common shares, as soon as reasonably practicable after the close of each calendar year, with tax information (including IRS Schedules K-1), which describes their allocable share of gross ordinary 33 income for Global Indemnity Group, LLC’s preceding taxable year.
These fluctuations in demand and competition could produce underwriting results that would have a negative impact on the Company’s consolidated results of operations and financial condition. 26 The Company faces significant competitive pressures in its business that could cause demand for its products to fall and adversely affect the Company’s profitability.
These fluctuations in demand and competition could produce underwriting results that would have a negative impact on the Company’s consolidated results of operations and financial condition. The Company faces significant competitive pressures in its business that could cause demand for its products to fall and adversely affect the Company’s profitability.
The U.S. insurance regulatory framework has come under increased federal scrutiny and some state legislators have considered or enacted laws that may alter or increase state regulation of insurance and reinsurance companies and holding companies. Moreover, the NAIC, which is an association of the insurance commissioners of all 50 U.S.
The U.S. insurance regulatory framework has come under increased federal scrutiny and some state legislators have considered or enacted laws that may alter or increase state regulation of insurance and reinsurance companies and holding 28 companies. Moreover, the NAIC, which is an association of the insurance commissioners of all 50 U.S.
Many of the policies issued by the Company also include conditions requiring the prompt reporting of claims to the Company and entitle the Company to decline coverage in the event of a violation of those conditions.
Many of the 21 policies issued by the Company also include conditions requiring the prompt reporting of claims to the Company and entitle the Company to decline coverage in the event of a violation of those conditions.
The Company has investments in limited partnerships which are not liquid. For several limited partnership investments, the Company does not have the contractual option to redeem its interests but receives distributions based on the liquidation of the underlying assets. During the 3rd quarter of 2023, the Company provided the Global Debt Fund, LP with a formal withdrawal request in full.
The Company has investments in limited partnerships which are not liquid. For several limited partnership investments, the Company does not have the contractual option to redeem its interests but receives distributions based on the liquidation of the underlying assets. During the third quarter of 2023, the Company provided the Global Debt Fund, LP with a formal withdrawal request in full.
The Company's ability to grow profitably could be impaired if it cannot effectively overcome these obstacles or it improperly implement new insurance products. If actual claims payments exceed the Company’s reserves for losses and loss adjustment expenses, the Company’s financial condition and results of operations could be adversely affected.
The Company's ability to grow profitably could be impaired if it cannot effectively overcome these obstacles or it improperly implements new insurance products. If actual claims payments exceed the Company’s reserves for losses and loss adjustment expenses, the Company’s financial condition and results of operations could be adversely affected.
The Company’s Penn-America products are distributed through approximately 360 wholesale general agents that have specific quoting and binding authority and that in turn sell the Company’s insurance products to insureds through retail insurance brokers. Penn-America also distributes its products through approximately 2,400 retail agents. The Company markets and distributes its reinsurance products through third-party brokers, insurance companies and reinsurance companies.
The Company’s Penn-America products are distributed through approximately 360 wholesale general agents that have specific quoting and binding authority and that in turn sell the Company’s insurance products to insureds through retail insurance brokers. Penn-America also distributes its products through approximately 2,800 retail agents. The Company markets and distributes its reinsurance products through third-party brokers, insurance companies and reinsurance companies.
See Note 10 of the notes to consolidated financial statements in Item 8 of Part II of this report for further information surrounding the Company’s reinsurance receivable balances as of December 31, 2023 and 2022.
See Note 10 of the notes to the consolidated financial statements in Item 8 of Part II of this report for further information surrounding the Company’s reinsurance receivable balances as of December 31, 2024 and 2023.
Since the Company depends on wholesale general agents and retail agents as wells as other insurance companies and reinsurance companies for a significant portion of its revenue, a loss of one or more could adversely affect the Company.
Since the Company depends on wholesale general agents and retail agents as well as other insurance companies and reinsurance companies for a significant portion of its revenue, a loss of one or more could adversely affect the Company.
See Note 5 of the notes to consolidated financial statements in Item 8 of Part II of this report for further information surrounding the Company’s investments as of December 31, 2023 and 2022.
See Note 5 of the notes to the consolidated financial statements in Item 8 of Part II of this report for further information surrounding the Company’s investments as of December 31, 2024 and 2023.
These management services arrangements may make a change of control transaction for Global Indemnity Group, LLC less attractive to a potential acquiror and may affect any economic allocation of proceeds that a potential acquiror may pay in any such transaction as between the Fox Paine Entities and the holders of class A common shares.
These management services arrangements may make a change of control transaction for Global Indemnity Group, LLC less attractive to a potential acquiror and may affect any economic allocation of proceeds that a potential acquiror may pay in any such transaction as between the Fox Paine Entities and the holders of class A common shares (including class A common shares designated as class A-2 common shares).
The percentage of Global Indemnity Group, LLC’s total voting power that the Fox Paine Entities may exercise is greater than the percentage of Global Indemnity Group, LLC’s total shares that the Fox Paine Entities beneficially own because the Fox Paine Entities beneficially own all of Global Indemnity Group, LLC’s class B common shares, which are entitled to ten votes per share as opposed to class A common shares, which are entitled to one vote per share.
The percentage of Global Indemnity Group, LLC’s total voting power that the Fox Paine Entities may exercise is greater than the percentage of Global Indemnity Group, LLC’s total shares that the Fox Paine Entities beneficially own because the Fox Paine Entities beneficially own all of Global Indemnity Group, LLC’s class B common shares, which are entitled to ten votes per share as opposed to class A common shares (including class A common shares designated as class A-2 common shares), which are entitled to one vote per share.
The Company's ability to grow profitably requires the identification of market opportunities, which may include acquisitions, and the ability to attract and retain underwriting and claims expertise to support that growth.
The Company's ability to grow profitably requires 20 the identification of market opportunities, which may include acquisitions, and the ability to attract and retain underwriting. marketing, and claims expertise to support that growth.
The Board of Directors currently consists of seven directors, all of whom were either identified and proposed for consideration for the Board of Directors by the Fox Paine Entities or appointed by the Fox Paine Entities.
The Board of Directors currently consists of six directors, all of whom were either identified and proposed for consideration for the Board of Directors by the Fox Paine Entities or appointed by the Fox Paine Entities.
Since October 2022 and through March 15, 2024, Global Indemnity Group, LLC repurchased and retired an aggregate of 1,357,082 shares of its class A common shares in the open market and in privately negotiated transactions at an aggregate price of $34.0 million or an average of $25.05 per share.
Since October 2022 and through March 11, 2025, Global Indemnity Group, LLC repurchased and retired an aggregate of 1,357,082 shares of its class A common shares in the open market and in privately negotiated transactions at an aggregate price of $34.0 million or an average of $25.05 per share.
Also, see Note 21 of the notes to consolidated 27 financial statements in Item 8 of Part II of this report for the maximum amount of dividends that could be paid by the Company’s U.S. insurance subsidiaries in 2024. The Company’s businesses are heavily regulated and changes in regulation may limit the way it operates.
Also, see Note 21 of the notes to the consolidated financial statements in Item 8 of Part II of this report for the maximum amount of dividends that could be paid by the Company’s U.S. insurance subsidiaries in 2025. The Company’s insurance company subsidiary businesses are heavily regulated and changes in regulation may limit the way it operates.
The current fee charged for the twelve month period beginning September 5, 2023 was $3.2 million.
The current fee charged for the twelve month period beginning September 5, 2024 was $3.2 million.
The ability of Global Indemnity Group, LLC’s corporate subsidiaries to use their net operating loss carryforwards to offset their future taxable income may be subject to limitations. The ability of Global Indemnity Group, LLC’s corporate subsidiaries to use their federal net operating losses and built-in losses (“NOLs”) to offset potential future taxable income and related income taxes may be limited.
The ability of Global Indemnity Group, LLC’s corporate subsidiaries to use their federal net operating losses and built-in losses (“NOLs”) to offset potential future taxable income and related income taxes may be limited.
The class A common shares and the class B common shares generally vote together as a single class on matters presented to Global Indemnity Group, LLC’s shareholders.
The class A common shares (including class A common shares designated as class A-2 common shares) and the class B common shares generally vote together as a single class on matters presented to Global Indemnity Group, LLC’s shareholders.
States and the District of Columbia, and state insurance regulators regularly re-examine existing laws and regulations. Changes in these laws and regulations or the interpretation of these laws and regulations could have a material adverse effect on the Company’s business.
States and the District of Columbia, and state insurance regulators regularly re-examine existing laws and regulations. Changes in these laws and regulations, including as a result of executive orders, or in the interpretation of these laws and regulations could have a material adverse effect on the Company’s business.
Regulation” in Item 1 of Part I of this report and “Liquidity and Capital Resources” section in Item 7 of Part II of this report for more information on state dividend limitations.
See "Regulation – U.S. Regulation” in Item 1 of Part I of this report and “Liquidity and Capital Resources” section in Item 7 of Part II of this report for more information on state dividend limitations.
Risks Related to Ownership of Global Indemnity Group, LLC’s Shares and Certain Limited Liability Company Agreement (“LLCA”) Provisions The interests of holders of class A common shares may conflict with the interests of Global Indemnity Group, LLC’s controlling shareholder. Fox Paine Capital Fund II International L.P.
Risks Related to Ownership of Global Indemnity Group, LLC’s Shares and Certain LLCA Provisions The interests of holders of class A common shares may conflict with the interests of Global Indemnity Group, LLC’s controlling shareholder. Fox Paine Capital Fund II International L.P.
This accumulation of balances due to the Company exposes it to credit risk. Insurance premiums generally flow from the insured to their retail broker, then into a trust account controlled by the Company’s professional general agencies. Several of the Company’s professional general agencies are required to forward funds, net of commissions, to the Company following the end of each month.
Insurance premiums generally flow from the insured to their retail broker, then into a trust account controlled by the Company’s professional general agencies. Several of the Company’s professional general agencies are required to forward funds, net of commissions, to the Company following the end of each month.
The ability to execute the Company’s restructuring initiative is subject to significant challenges, uncertainties, and risks. The restructuring initiative may not produce the anticipated benefits and may result in unintended consequences which could have a material adverse impact on the Company’s financial condition and results of operations. The restructuring initiative could result in an unexpected loss of key personnel.
The restructuring initiative may not produce the anticipated benefits and may result in unintended consequences which could have a material adverse impact on the Company’s financial condition and results of operations. The restructuring initiative could result in an unexpected loss of key personnel.
As a result, the Fox Paine Entities have and will continue to have control over the outcome of certain matters requiring shareholder approval, including the power to, among other things: • elect any of Global Indemnity Group, LLC’s directors not otherwise appointed by the Fox Paine Entities pursuant to the provisions of the LLCA (as defined below) (which entitles the Fox Paine Entities, in their collective capacity as the “Class B Majority Shareholder” (as defined in the LLCA), to certain Director appointment rights); • approve changes to the LLCA that require shareholder approval; and • ratify the appointment of Global Indemnity Group, LLC’s auditors.
As a result, the Fox Paine Entities have and will continue to have control over the outcome of certain matters requiring shareholder approval, including the power to, among other things: • elect any of Global Indemnity Group, LLC’s directors not otherwise appointed by the Fox Paine Entities pursuant to the provisions of the LLCA (as defined below) (which entitles the Fox Paine Entities, in their collective capacity as the “Class B Majority Shareholder” (as defined in the LLCA), to certain Director appointment rights); • approve changes to the LLCA that require shareholder approval; and • ratify the appointment of Global Indemnity Group, LLC’s auditors. 29 Subject to certain exceptions, the Fox Paine Entities may also be able to prevent or cause (either by way of a sale of their own stake or by approving the merger or sale of Global Indemnity Group, LLC as a whole) a change of control of Global Indemnity Group, LLC.
A natural or man-made disaster could increase the incidence or severity of E&O claims against the Company.
A natural or man-made disaster could increase the incidence or severity of errors and omissions claims against the Company.
Such actions could adversely affect the Company’s results of operations. Risks Related to Regulation of the Company Global Indemnity Group, LLC’s holding company structure and regulatory constraints limit its ability to receive dividends from subsidiaries in order to meet its cash requirements. Global Indemnity Group, LLC is a holding company and, as such, has no substantial operations of its own.
Such actions could adversely affect the Company’s results of operations. Risks Related to Regulation of the Company Global Indemnity Group, LLC’s regulatory constraints limit its ability to receive dividends from insurance company subsidiaries in order to meet its cash requirements.
Some of the Company’s competitors have greater financial and marketing resources than the Company does. The Company’s profitability could be adversely affected if it loses business to competitors offering similar products at or below the Company’s prices. Many of the Company’s general agencies pay the insurance premiums on business they have bound to the Company on a monthly basis.
Some of the Company’s competitors have greater financial and marketing resources than the Company does. The Company’s profitability could be adversely affected if it loses business to competitors offering similar products at or below the Company’s prices. The Company's general agencies collect insurance premiums on the Company's behalf. As a result, the Company is exposed to credit risk.
Risks Related to Employees The Company is dependent on its senior executives and the loss of any of these executives or the Company’s inability to attract and retain other key personnel could adversely affect its business.
Further, these NOLs are limited to a carryforward of 15 years and these capital losses are limited to a carryforward of 5 years. Risks Related to Employees The Company is dependent on its senior executives and the loss of any of these executives or the Company’s inability to attract and retain other key personnel could adversely affect its business.
The Company’s ability to provide competitive services to, and conduct business with, new and existing customers in a cost effective manner as well as its ability to implement the Company’s strategic initiatives could be adversely impacted if the Company does not effectively and efficiently manage and upgrade its technology portfolio or if the costs of doing so are higher than expected. 24 Investment Related Risks The Company’s investment performance may suffer as a result of adverse capital market developments or other factors, which would in turn adversely affect its financial condition and results of operations.
The Company’s ability to provide competitive services to, and conduct business with, new and existing customers in a cost effective manner as well as its ability to implement the Company’s strategic initiatives could be adversely impacted if the Company does not effectively and efficiently manage and upgrade its technology portfolio or if the costs of doing so are higher than expected.
In addition, a portion of the amount realized, whether or not representing gain, may be treated as ordinary income to such holder to the extent attributable to the holder’s allocable share of unrealized gain or loss in Global Indemnity Group, LLC’s assets that consist of certain unrealized receivables or inventory (if any). 32 Global Indemnity Group, LLC cannot match transferors and transferees of Global Indemnity Group, LLC’s common shares, and therefore, Global Indemnity Group, LLC has adopted certain income tax accounting conventions that may not conform with all aspects of applicable tax requirements.
In addition, a portion 32 of the amount realized, whether or not representing gain, may be treated as ordinary income to such holder to the extent attributable to the holder’s allocable share of unrealized gain or loss in Global Indemnity Group, LLC’s assets that consist of certain unrealized receivables or inventory (if any).
If a court were to find Global Indemnity Group, LLC’s choice of forum provision to be inapplicable or unenforceable in an action, Global Indemnity Group, LLC may incur additional costs associated with resolving such action in other jurisdictions.
If a court were to find Global Indemnity Group, LLC’s choice of forum provision to be inapplicable or unenforceable in an action, Global Indemnity Group, LLC may incur additional costs associated with resolving such action in other jurisdictions. 30 Because the Company relies on certain services provided by Fox Paine & Company, LLC, the loss of such services could adversely affect its business.
Publications of AM Best indicate that companies are assigned "A" (Excellent) ratings if, in AM Best's opinion, they have an excellent ability to meet their ongoing obligations to policyholders.
Publications of AM Best indicate that companies are assigned "A" (Excellent) ratings if, in AM Best's opinion, they have an excellent ability to meet their ongoing obligations to policyholders. These ratings are subject to periodic review by, and may be revised downward or revoked at the sole discretion of AM Best.
To the extent that Fox Paine & Company, LLC is unable or unwilling to provide similar services in the future, and the Company is unable to perform those services itself or is unable to secure replacement services, the Company’s business could be adversely affected. 30 The Company's share repurchase program may affect or increase the volatility of the price of its class A common shares.
Fox Paine & Company, LLC provides certain management services to the Company. To the extent that Fox Paine & Company, LLC is unable or unwilling to provide similar services in the future, and the Company is unable to perform those services itself or is unable to secure replacement services, the Company’s business could be adversely affected.
These ratings are subject to periodic review by, and may be revised downward or revoked at the sole discretion of AM Best. 23 A failure in the Company’s operational systems or infrastructure or those of third parties, including security breaches or cyber-attacks, could disrupt the Company’s business, its reputation, and / or cause losses which would have a material effect on the Company’s business operations and financial results.
A failure in the Company’s operational systems or infrastructure or those of third parties, including security breaches or cyber-attacks, could disrupt the Company’s business, its reputation, and / or cause losses which could have an adverse effect on the Company’s business operations and financial results.
Income earned by the subsidiaries of Global Indemnity Group, LLC is subject to corporate tax in the United States and certain foreign jurisdictions and, therefore, is not taxable to Global Indemnity Group, LLC’s shareholders until the income is distributed by the subsidiaries to Global Indemnity Group, LLC. 31 There can be no assurance that amounts paid as distributions on Global Indemnity Group, LLC’s common shares will be sufficient to cover the tax liability arising from ownership of the common shares.
Income earned by the subsidiaries of Global Indemnity Group, LLC is subject to corporate tax in the United States and certain foreign jurisdictions and, therefore, is not taxable to Global Indemnity Group, LLC’s shareholders until the income is distributed by the subsidiaries to Global Indemnity Group, LLC.
In some instances, these changes may not become apparent until sometime after the Company has issued insurance contracts that are affected by the changes.
In some instances, these changes may not become apparent until sometime after the Company has issued insurance contracts that are affected by the changes. As a result, the full extent of liability under the Company's insurance contracts may not be known for many years after a contract is issued.
The inability of Penn-Patriot to pay dividends in an amount sufficient to enable Global Indemnity Group, LLC to meet its cash requirements at the holding company level could have a material adverse effect on its operations.
In addition, the Company’s insurance subsidiaries are subject to significant regulatory restrictions limiting their ability to declare and pay dividends. The inability of the Company’s insurance subsidiaries to pay dividends in an amount sufficient to enable the Company to meet its cash requirements at the holding company level could have a material adverse effect on its operations.
As a result, it is possible that any, or a combination of all, of these factors related to natural or man-made disasters could have a material adverse effect on the Company’s business, financial condition, and results of operations.
As a result, it is possible that any, or a combination of all, of these factors related to natural or man-made disasters could have a material adverse effect on the Company’s business, financial condition, and results of operations. 22 Adverse economic factors, including recession, inflation, periods of high unemployment or lower economic activity could result in the sale of fewer policies than expected or an increase in the frequency of claims and premium defaults, or a combination of these effects, which, in turn, could affect the Company's growth and profitability.
As a result, the full extent of liability under the Company's insurance contracts may not be known for many years after a contract is issued. 22 The occurrence of natural or man-made disasters could adversely affect the Company’s business, financial condition and results of operations.
The occurrence of natural or man-made disasters could adversely affect the Company’s business, financial condition and results of operations.
Investment income generated by its investment portfolio as well as dividends and other permitted distributions from insurance subsidiaries are expected to be Global Indemnity Group, LLC's main source of funds to meet ongoing cash requirements and other expenses.
Belmont Holdings GX, Inc.’s source of funds to meet ongoing liquidity needs is investment income generated by its investment portfolio and dividends from their insurance company subsidiaries. The future liquidity of Global Indemnity Group, LLC and Belmont Holdings GX, Inc. is dependent on the ability of its subsidiaries to generate income to pay dividends.
Removed
Due to its corporate structure, most of the dividends that Global Indemnity Group, LLC receives from its subsidiaries must pass through Penn-Patriot Insurance Company (“Penn-Patriot”).
Added
Factors, such as business revenue, economic conditions, the volatility and strength of the capital markets, trade disputes, including the imposition of new or increased tariffs and inflation can affect the business and economic environment. These same factors affect the Company's ability to generate revenue and profits.
Removed
In addition, the inability of Penn-Patriot’s insurance subsidiaries to pay dividends to GBLI Holdings, LLC could limit GBLI Holdings, LLC’s ability to meet its debt obligations and corporate expense obligations and could have a material adverse effect on its operations. See "Regulation – U.S.
Added
In an economic downturn that is characterized by higher unemployment, declining spending and reduced corporate revenue, the demand for insurance products is generally adversely affected, which directly affects the Company's premium levels and profitability. These outcomes would reduce the Company's underwriting profit to the extent these factors are not reflected in the rates charged.
Removed
Subject to certain exceptions, the Fox Paine Entities may also be able to prevent or cause (either by way of a sale of their own stake or by approving the merger or sale of Global Indemnity Group, LLC as a whole) a change of control of Global Indemnity Group, LLC.
Added
Artificial intelligence is an evolving and rapidly growing technology. The rapid evolution of artificial intelligence (“AI”) could exacerbate the information technology related risks described above, as well as alter the competitive landscape.
Removed
Because the Company relies on certain services provided by Fox Paine & Company, LLC, the loss of such services could adversely affect its business. Fox Paine & Company, LLC provides certain management services to the Company.
Added
While the Company anticipates that it will continue to research and implement AI-based technology solutions in an effort to both mitigate risk and increase automation in its environment, it is possible that bad actors and/or competitors will leverage AI solutions more quickly or more effectively than the Company, and exploit vulnerabilities or take market share, which could impair the Company's ability to compete effectively and adversely affect its results of operations.
Added
AI is still in its early stages, and the introduction and incorporation of AI technologies may result in unintended consequences or other new or expanded risks and liabilities, such as unintended or inadvertent transmission of proprietary or sensitive information.
Added
Additionally, if the content, analyses or recommendations that AI applications assist in producing are, or are alleged to be, deficient, inaccurate or biased, such as due to limitations in AI algorithms, insufficient or biased base data or flawed training methodologies, the Company's business, financial condition, results of operations and reputation may be adversely affected.
Added
Further, AI technology is continuously evolving, and the Company may incur costs to adopt and deploy AI technologies that could become obsolete earlier than expected, and there can be no assurance that the Company will realize the desired or anticipated benefits from AI.
Added
In addition, technological advancements in the industry, including with respect to AI and machine learning technologies, could result in increased demand and competition for qualified professionals with such skills and technological knowledge. There can be no assurance that the Company will be successful in finding, attracting and retaining such qualified individuals.
Added
Also, there is uncertainty in the legal and regulatory landscape for AI, which is not fully developed, and any laws, regulations or industry standards adopted in response to the emergence of AI may be burdensome, could entail significant costs, and may restrict or impede the Company's ability to successfully develop, adopt and deploy AI technologies efficiently and effectively.
Added
Any of these factors could adversely impact the Company's business, financial condition and results of operations. 24 Investment Related Risks The Company’s investment performance may suffer as a result of adverse capital market developments or other factors, which would in turn adversely affect its financial condition and results of operations.
Added
Because the Company relies on these distributors as its sales channel and for some additional services that it receives from these distributors, any deterioration in the relationships with the Company's distributors or failure to provide competitive compensation could lead its distributors to place more premium with other carriers and less premium with the Company.
Added
In addition, the Company could be adversely affected if the distributors with which it does business exceed their granted authority, fail to transfer collected premium to the Company, breach the obligations that they owe to the Company or fail to perform such additional services. Although the Company routinely monitors its distribution relationships, such actions could expose the Company to liability.
Added
As the speed of digitization accelerates, the Company is subject to risks associated with both its distributors and their ability to keep pace. In an increasingly digital world, distributors who cannot provide a digital or technology-driven experience risk losing customers who demand such an experience, and such customers may choose to do business with more technology-driven distributors.
Added
Global Indemnity Group, LLC and its wholly owned subsidiary, Belmont Holdings GX, Inc., are holding companies and, as such, have no substantial operations of their own.
Added
The Company's share repurchase program may affect or increase the volatility of the price of its class A common shares.
Added
There can be no assurance that amounts paid as distributions on Global Indemnity Group, LLC’s common shares will be sufficient to cover the tax liability arising from ownership of the common shares.
Added
Global Indemnity Group, LLC cannot match transferors and transferees of Global Indemnity Group, LLC’s common shares, and therefore, Global Indemnity Group, LLC has adopted certain income tax accounting conventions that may not conform with all aspects of applicable tax requirements.
Added
The ability of Global Indemnity Group, LLC’s corporate subsidiaries to use their net operating losses to offset their future taxable income and use capital loss carryforwards to offset future capital gains may be subject to limitations.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−2 removed0 unchanged
Biggest changeItem 2. P ROPERTIES At December 31, 2023, office space leased in Bala Cynwyd, Pennsylvania, holds the Penn-America segment’s principal executive offices and headquarters. A decision has been made for employees who do not work at the Bala Cynwyd, Pennsylvania office to work remotely.
Biggest changeItem 2. P ROPERTIES At December 31, 2024, office space leased in Bala Cynwyd, Pennsylvania, holds the Penn-America segment’s principal executive offices and headquarters. The Company believes the Bala Cynwyd, Pennsylvania location is suitable and adequate to meet its needs.
The Company exercised the early lease termination clauses for its Omaha, Nebraska and Cavan, Ireland leases and intends to exercise the early termination clause for its Scottsdale, Arizona lease.
The Company exercised the early lease termination clauses for its Omaha, Nebraska and Cavan, Ireland leases and intends to exercise the early termination clause for its Scottsdale, Arizona lease. Employees at these offices work remotely.
Removed
As a result, the lease liability on the Company's consolidated balance sheet at December 31, 2023 and 2022 include $3.2 million and $4.6 million, respectively, which represents the present value of expected lease costs through the early termination date. The Company believes the Bala Cynwyd, Pennsylvania location is suitable and adequate to meet its needs.
Removed
Additionally, a number of the Company’s personnel work remotely and almost all of the Company’s personnel have the ability to work remotely.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

12 edited+1 added−2 removed5 unchanged
Biggest changeOn October 21, 2022, Global Indemnity Group, LLC announced it commenced a stock repurchase program beginning in the fourth quarter of 2022. On January 3, 2023, Global Indemnity Group, LLC announced that it had authorized an increase in the aggregate stock purchase program from $32 million, which was authorized on October 21, 2022, to $60 million.
Biggest changeDuring 2024, Global Indemnity Group, LLC purchased an aggregate 16,527 of surrendered class A common shares from employees for $0.5 million. On October 21, 2022, Global Indemnity Group, LLC announced it commenced a share repurchase program beginning in the fourth quarter of 2022.
For a discussion of factors affecting the Company’s ability to make distributions, see “Business – Regulation” in Item 1 of Part I, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Sources and Uses of Funds” in Item 7 of Part II, and Note 21 of the notes to the consolidated financial statements in Item 8 of Part II of this report. 39
For a discussion of factors affecting the Company’s ability to make distributions, see “Business – Regulation” in Item 1 of Part I, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Sources and Uses of Funds” in Item 7 of Part II, and Note 21 of the notes to the consolidated financial statements in Item 8 of Part II of this report.
The Fox Paine Entities comprise the two holders of record of Global Indemnity Group, LLC’s class B common shares as of December 31, 2023. See Note 18 to the consolidated financial statements in Item 8 of Part II of this report for information regarding securities authorized under Global Indemnity Group, LLC’s equity compensation plans.
The Fox Paine Entities comprise the two holders of record of Global Indemnity Group, LLC’s class B common shares as of December 31, 2024. See Note 18 to the consolidated financial statements in Item 8 of Part II of this report for information regarding securities authorized under Global Indemnity Group, LLC’s equity compensation plans.
See “Management’s Discussion and Analysis of Financial Condition – Liquidity and Capital Resources – Sources and Uses of Funds” in Item 7 of Part II of this report for dividend limitation and Note 21 of the notes to the consolidated financial statement in Item 8 of Part II of this report for the dividends declared and paid by the Company’s insurance subsidiaries in 2023.
See “Management’s Discussion and Analysis of Financial Condition – Liquidity and Capital Resources – Sources and Uses of Funds” in Item 7 of Part II of this report for dividend limitation and Note 21 of the notes to the consolidated financial statement in Item 8 of Part II of this report for the dividends declared and paid by the Company’s insurance subsidiaries in 2024.
See Note 15 of the consolidated financial statements in Item 8 of Part II of this report for distributions declared during the years ended December 31, 2023, 2022, and 2021. Global Indemnity Group, LLC is a holding company and has no direct operations.
See Note 15 of the consolidated financial statements in Item 8 of Part II of this report for distributions declared during the years ended December 31, 2024, 2023, and 2022. Global Indemnity Group, LLC is a holding company and has no direct operations.
Distributions Future dividends remain subject to the discretion of GBLI’s Board of Directors, including the Board of Director’s evaluation of the company’s financial performance, capital and reserve positions, liquidity, balance sheet, and other factors.
Distributions Future dividends remain subject to the discretion of Global Indemnity Group, LLC’s Board of Directors, including the Board of Director’s evaluation of the Company’s financial performance, capital and reserve positions, liquidity, balance sheet, and other factors.
The ability of Global Indemnity to pay distributions is subject to Global Indemnity Group, LLC’s Second Amended and Restated Limited Liability Company Agreement (the “LLCA”), and depends, in part, on the ability of its subsidiaries to pay dividends. The Company’s insurance subsidiaries are subject to significant regulatory restrictions limiting their ability to declare and pay dividends.
The ability of Global Indemnity to pay distributions is subject to the LLCA, and depends, in part, on the ability of its subsidiaries to pay dividends. The Company’s insurance subsidiaries are subject to significant regulatory restrictions limiting their ability to declare and pay dividends.
Performance of Global Indemnity Group, LLC’s Class A Common Shares The following graph represents a five-year comparison of the cumulative total return to shareholders for the Company’s class A common shares and stock of companies included in the NASDAQ Insurance Index and NASDAQ Composite Index. 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 GBLI $ 100.0 $ 81.8 $ 78.9 $ 69.4 $ 64.3 $ 89.0 NASDAQ Insurance Index 100.0 126.7 127.9 144.8 147.6 159.8 NASDAQ Composite Index 100.0 135.2 194.2 235.8 157.7 226.2 38 Recent Sales of Unregistered Securities There were no sales of unregistered equity securities during the year ended December 31, 2023.
Performance of Global Indemnity Group, LLC’s Class A Common Shares The following graph represents a five-year comparison of the cumulative total return to shareholders for the Company’s class A common shares and stock of companies included in the NASDAQ Insurance Index and NASDAQ Composite Index. 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Global Indemnity $ 100.0 $ 96.5 $ 84.8 $ 78.7 $ 108.8 $ 121.5 NASDAQ Insurance Index 100.0 100.9 114.3 116.5 126.1 156.5 NASDAQ Composite Index 100.0 143.6 174.4 116.6 167.3 215.2 38 Recent Sales of Unregistered Securities There were no sales of unregistered equity securities during the year ended December 31, 2024.
The timing and actual number of shares repurchased, if any, will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.
Global Indemnity Group, LLC's Board of Directors have authorized share repurchases of up to $135 million in aggregate under this program that expires on December 31, 2027. The timing and actual number of shares repurchased, if any, will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.
During 2023, Global Indemnity Group, LLC purchased an aggregate 18,860 of surrendered class A common shares from employees for $0.6 million. All shares repurchased from third parties and employees are held as treasury stock and recorded at cost until formally retired.
All shares repurchased from third parties and employees are held as treasury stock and recorded at cost until formally retired.
There is no established public trading market for Global Indemnity Group, LLC’s class B common shares. As of December 31, 2023, Global Indemnity Group, LLC’s class A common shares were held by approximately 140 shareholders of record.
There is no established public trading market for Global Indemnity Group, LLC’s class B common shares or class A common shares designated as class A-2 common shares. References to Global Indemnity Group, LLC’s class A common shares herein exclude class A common shares designated as class A-2 common shares unless otherwise noted.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Global Indemnity Group, LLC’s Class A Common Shares On August 28, 2020, Global Indemnity Group, LLC completed a scheme of arrangement and amalgamation that effected certain transactions that resulted in the shareholders of Global Indemnity Limited becoming the holders of all of the issued and outstanding common shares of Global Indemnity Group, LLC.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Global Indemnity Group, LLC’s Class A Common Shares Global Indemnity Group, LLC’s class A common shares are publicly traded on the New York Stock Exchange. Global Indemnity Group, LLC’s predecessors have been publicly traded since 2003.
Removed
Effective January 3, 2022, Global Indemnity Group, LLC voluntarily transferred the listing of its class A common shares from the NASDAQ to the NYSE and is trading under the ticker symbol GBLI. Prior to January 3, 2022, the Company’s class A common shares traded on the NASDAQ. Global Indemnity Group, LLC’s predecessors have been publicly traded since 2003.
Added
As of December 31, 2024, Global Indemnity Group, LLC’s class A common shares were held by approximately 140 shareholders of record. Because most of Global Indemnity Group, LLC’s class A common shares are held by brokers and other institutions on behalf of its shareholders, this number is not representative of Global Indemnity Group, LLC’s total shareholders.
Removed
On June 8, 2023, Global Indemnity Group, LLC's Board of Directors approved an additional increase in the existing share buyback authorization amount of $60 million to $135 million. The authorization to repurchase will expire on December 31, 2027.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

120 edited+37 added−98 removed97 unchanged
Biggest changeThe expense ratio increased 1.0 points from 36.6% for 2021 to 37.6% for 2022 primarily due to higher compensation and advertising costs. 55 Non-Core Operations The components of income (loss) from the Company’s Non-Core Operations segment and corresponding underwriting ratios are as follows: Years Ended December 31, % Years Ended December 31, % (Dollars in thousands) 2023 2022 Change 2022 2021 Change Gross written premiums $ 46,737 $ 339,636 (86.2 %) $ 339,636 $ 332,160 2.3 % Net written premiums $ 42,523 $ 221,025 (80.8 %) $ 221,025 $ 251,409 (12.1 %) Net earned premiums $ 118,839 $ 242,874 (51.1 %) $ 242,874 $ 286,934 (15.4 %) Other income 178 433 (58.9 %) 433 787 (45.0 %) Total revenues 119,017 243,307 (51.1 %) 243,307 287,721 (15.4 %) Losses and expenses: Net losses and loss adjustment expenses 55,914 144,374 (61.3 %) 144,374 200,801 (28.1 %) Acquisition costs and other underwriting expenses 48,462 101,236 (52.1 %) 101,236 109,803 (7.8 %) Underwriting income (loss) $ 14,641 $ (2,303 ) NM $ (2,303 ) $ (22,883 ) (89.9 %) Years Ended December 31, Point Years Ended December 31, Point 2023 2022 Change 2022 2021 Change Underwriting Ratios: Loss ratio: Current accident year 64.2 % 63.9 % 0.3 63.9 % 67.6 % (3.7 ) Prior accident year (17.1 %) (4.5 %) (12.6 ) (4.5 %) 2.4 % (6.9 ) Calendar year loss ratio 47.1 % 59.4 % (12.3 ) 59.4 % 70.0 % (10.6 ) Expense ratio 40.8 % 41.7 % (0.9 ) 41.7 % 38.3 % 3.4 Combined ratio 87.9 % 101.1 % (13.2 ) 101.1 % 108.3 % (7.2 ) Accident year combined ratio (1) 103.7 % 104.1 % 104.1 % 105.8 % (1) The accident year combined ratio excludes the impact of prior accident year losses and loss adjustment expenses and prior accident year contingent commission expenses.
Biggest changeYears Ended December 31, 2024 2023 2022 Losses Loss Ratio Losses Loss Ratio Losses Loss Ratio Property Non catastrophe property losses and ratio excluding the effect of prior accident year (1) $ 77,388 46.3 % $ 61,231 43.6 % $ 71,907 50.5 % Effect of prior accident year (10,581 ) (6.3 %) (2,143 ) (1.5 %) (3,624 ) (2.5 %) Non catastrophe property losses and ratio (2) $ 66,807 40.0 % $ 59,088 42.1 % $ 68,283 48.0 % Catastrophe losses and ratio excluding the effect of prior accident year (1) $ 12,696 7.6 % $ 13,839 9.8 % $ 10,979 7.7 % Effect of prior accident year 374 0.2 % 3,400 2.4 % 431 0.3 % Catastrophe losses and ratio (2) $ 13,070 7.8 % $ 17,239 12.2 % $ 11,410 8.0 % Total property losses and ratio excluding the effect of prior accident year (1) $ 90,084 53.9 % $ 75,070 53.4 % $ 82,886 58.2 % Effect of prior accident year (10,207 ) (6.1 %) 1,257 0.9 % (3,193 ) (2.2 %) Total property losses and ratio (2) $ 79,877 47.8 % $ 76,327 54.3 % $ 79,693 56.0 % Casualty Total Casualty losses and ratio excluding the effect of prior accident year (1) $ 118,389 58.4 % $ 128,289 59.9 % $ 129,172 59.5 % Effect of prior accident year 12,027 6.0 % 28,623 13.4 % 5,989 2.8 % Total Casualty losses and ratio (2) $ 130,416 64.4 % $ 156,912 73.3 % $ 135,161 62.3 % Total Total net losses and loss adjustment expense and total loss ratio excluding the effect of prior accident year (1) $ 208,473 56.4 % $ 203,359 57.4 % $ 212,058 59.0 % Effect of prior accident year 1,820 0.5 % 29,880 8.4 % 2,796 0.8 % Total net losses and loss adjustment expense and total loss ratio (2) $ 210,293 56.9 % $ 233,239 65.8 % $ 214,854 59.8 % (1) Non-GAAP financial measure / ratio (2) Most directly comparable GAAP measure / ratio 52 Non-Core Operations The components of income (loss) from the Company’s Non-Core Operations segment and corresponding underwriting ratios are as follows: Years Ended December 31, % Years Ended December 31, % (Dollars in thousands) 2024 2023 Change 2023 2022 Change Gross written premiums $ (10,218 ) $ 46,737 (121.9 %) $ 46,737 $ 339,636 (86.2 %) Net written premiums $ (10,392 ) $ 42,523 (124.4 %) $ 42,523 $ 221,025 (80.8 %) Net earned premiums $ 7,186 $ 118,839 (94.0 %) $ 118,839 $ 242,874 (51.1 %) Other income 29 178 (83.7 %) 178 433 (58.9 %) Total revenues 7,215 119,017 (93.9 %) 119,017 243,307 (51.1 %) Losses and expenses: Net losses and loss adjustment expenses 2,897 55,914 (94.8 %) 55,914 144,374 (61.3 %) Net commission expenses 2,712 36,580 (92.6 %) 36,580 64,643 (43.4 %) Other underwriting expenses 3,500 11,882 (70.5 %) 11,882 36,593 (67.5 %) Total expenses 9,109 104,376 (91.3 %) 104,376 245,610 (57.5 %) Underwriting income (loss) $ (1,894 ) $ 14,641 NM $ 14,641 $ (2,303 ) NM Years Ended December 31, Point Years Ended December 31, Point 2024 2023 Change 2023 2022 Change Underwriting Ratios: Loss ratio: Current accident year 64.6 % 64.2 % 0.4 64.2 % 63.9 % 0.3 Prior accident year (24.3 %) (17.1 %) (7.2 ) (17.1 %) (4.5 %) (12.6 ) Calendar year loss ratio 40.3 % 47.1 % (6.8 ) 47.1 % 59.4 % (12.3 ) Expense ratio 86.5 % 40.8 % 45.7 40.8 % 41.7 % (0.9 ) Combined ratio 126.8 % 87.9 % 38.9 87.9 % 101.1 % (13.2 ) Accident year combined ratio (1) 145.6 % 103.7 % 103.7 % 104.1 % (1) The accident year combined ratio excludes the impact of prior accident year losses and loss adjustment expenses and prior accident year contingent commission expenses.
See Note 4 of the notes to consolidated financial statements contained in Item 8 of Part II of this report. Actual results could differ from those estimates and assumptions. The Company believes that of the Company’s significant accounting policies, the following may involve a higher degree of judgment and estimation.
See Note 4 of the notes to the consolidated financial statements contained in Item 8 of Part II of this report. Actual results could differ from those estimates and assumptions. The Company believes that of the Company’s significant accounting policies, the following may involve a higher degree of judgment and estimation.
During 2023, Board of Directors approved a distribution payment of $0.25 per common share to all shareholders of record on the close of business on March 24, 2023, June 23, 2023, October 9, 2023, and December 22, 2023. Distributions paid to common shareholders were $14.2 million during the year ended December 31, 2023.
During 2023, the Board of Directors approved a distribution payment of $0.25 per common share to all shareholders of record on the close of business on March 24, 2023, June 23, 2023, October 9, 2023, and December 22, 2023. Distributions paid to common shareholders were $14.2 million during the year ended December 31, 2023.
The length of the loss reporting lag affects the Company’s ability to accurately predict loss frequency (loss frequencies are more predictable for short-tail lines) as well as the amount of reserves needed for IBNR. If the actual levels of loss frequency and severity are higher or lower than expected, the ultimate losses will be different than Management’s best estimate.
The length of the loss 44 reporting lag affects the Company’s ability to accurately predict loss frequency (loss frequencies are more predictable for short-tail lines) as well as the amount of reserves needed for IBNR. If the actual levels of loss frequency and severity are higher or lower than expected, the ultimate losses will be different than Management’s best estimate.
The Company continues to closely monitor its asbestos exposure and make adjustments where they are warranted. 43 Reserve analyses performed by the Company’s internal and external actuaries result in actuarial point estimates. The results of the detailed reserve reviews were summarized and discussed with the Company’s senior management to determine Management's best estimate of reserves.
The Company continues to closely monitor its asbestos exposure and make adjustments where they are warranted. Reserve analyses performed by the Company’s internal and external actuaries result in actuarial point estimates. The results of the detailed reserve reviews were summarized and discussed with the Company’s senior management to determine Management's best estimate of reserves.
For further discussion about the Company’s business divisions, see “General – Business Segments – Insurance Operations” in Item 1 of Part I of this report. Each of the Company’s business divisions contain both long-tail and short-tail exposures. Every reserve category is analyzed by the Company’s actuaries each quarter. Management is responsible for the final determination of loss reserve selections.
For further discussion about the Company’s business divisions, see “General – Business Segments – Insurance Operations” in Item 1 of Part I of this report. 41 Each of the Company’s business divisions contain both long-tail and short-tail exposures. Every reserve category is analyzed by the Company’s actuaries each quarter. Management is responsible for the final determination of loss reserve selections.
The method requires analysis of all the factors that need to be reviewed for the Expected Loss Ratio and Incurred Development methods. 42 The Average Loss method multiplies a projected number of ultimate incurred claims by an estimated ultimate average loss for each accident year to produce ultimate loss estimates.
The method requires analysis of all the factors that need to be reviewed for the Expected Loss Ratio and Incurred Development methods. The Average Loss method multiplies a projected number of ultimate incurred claims by an estimated ultimate average loss for each accident year to produce ultimate loss estimates.
A valuation allowance would be based on all available information including the Company’s assessment of uncertain tax positions and projections of future taxable income from each tax-paying component in each jurisdiction, principally derived from business plans and available tax planning strategies.
A valuation allowance would be based on all available information including the Company’s assessment of uncertain tax positions and projections 46 of future taxable income from each tax-paying component in each jurisdiction, principally derived from business plans and available tax planning strategies.
The actuarial methods used to project ultimate losses for both long-tail and short-tail reserve categories include, but are not limited to, the following: • Paid Development method; • Incurred Development method; • Expected Loss Ratio method; 41 • Bornhuetter-Ferguson method using premiums and paid loss; • Bornhuetter-Ferguson method using premiums and incurred loss; and • Average Loss method.
The actuarial methods used to project ultimate losses for both long-tail and short-tail reserve categories include, but are not limited to, the following: • Paid Development method; • Incurred Development method; • Expected Loss Ratio method; • Bornhuetter-Ferguson method using premiums and paid loss; • Bornhuetter-Ferguson method using premiums and incurred loss; and • Average Loss method.
Non-Core Operations includes manufactured and dwelling home business, farm, ranch and equine business, specialty personal lines products such as motorcycle, watercraft, and certain homeowners, property brokerage, non-renewed retrocessional reinsurance treaties, several smaller casualty lines, and terminated commercial programs.
Non-Core Operations includes manufactured and dwelling home business, farm, ranch and equine business, specialty personal lines products such as motorcycle, watercraft, and certain homeowners, property brokerage, non-renewed retrocessional reinsurance treaties, several smaller casualty lines, and terminated commercial products.
The Company believes the non-GAAP measures or ratios are useful to investors when evaluating the Company's underwriting performance as trends in the Company's Penn-America segment may be obscured by prior accident year adjustments.
The Company believes the non-GAAP financial measures or ratios are useful to investors when evaluating the Company's underwriting performance as trends in the Company's Penn-America segment may be obscured by prior accident year adjustments.
The Company believes the non-GAAP measures or ratios are useful to investors when evaluating the Company's underwriting performance as trends in the Company's Non-Core Operations segment may be obscured by prior accident year adjustments.
The Company believes the non-GAAP financial measures or ratios are useful to investors when evaluating the Company's underwriting performance as trends in the Company's Non-Core Operations segment may be obscured by prior accident year adjustments.
These non-GAAP measures or ratios should not be considered as a substitute for its most directly comparable GAAP measure or ratio and does not reflect the overall underwriting profitability of the Company.
These non-GAAP financial measures or ratios should not be considered as a substitute for its most directly comparable GAAP measure or ratio and does not reflect the overall underwriting profitability of the Company.
There are no valuation allowances as of December 31, 2023 and 2022. The deferred tax asset balance is analyzed regularly by management. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, and tax planning strategies and/or actions.
There are no valuation allowances as of December 31, 2024 and 2023. The deferred tax asset balance is analyzed regularly by management. This assessment requires significant judgment and considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of carryforward periods, and tax planning strategies and/or actions.
See Note 10 of the notes to consolidated financial statements in Item 8 of Part II of this report for further information surrounding the Company’s reinsurance receivable balances and collectability as of December 31, 2023 and 2022.
See Note 10 of the notes to the consolidated financial statements in Item 8 of Part II of this report for further information surrounding the Company’s reinsurance receivable balances and collectability as of December 31, 2024 and 2023.
On each third anniversary of this Note, the interest rate shall reset to the then applicable short-term, annual compounded AFR for such month. The Note is due on April 13, 2031. The outstanding balance on this note was $18.4 million at December 31, 2023.
On each third anniversary of this restated Note, the interest rate shall reset to the then applicable short-term, annual compounded AFR for such month. The Note is due on April 13, 2031. The outstanding balance on this note was $18.4 million at December 31, 2024.
For a listing of the ten reinsurers for which the Company has the largest reinsurance asset amounts as of December 31, 2023, see “Reinsurance of Underwriting Risk” in Item 1 of Part I of this report. 45 Investments The carrying amount of the Company’s investments approximates their fair value.
For a listing of the ten reinsurers for which the Company has the largest reinsurance asset amounts as of December 31, 2024, see “Reinsurance of Underwriting Risk” in Item 1 of Part I of this report. Investments The carrying amount of the Company’s investments approximates their fair value.
(4) The expense ratio is a GAAP financial measure that is calculated by dividing the sum of acquisition costs and other underwriting expenses by net earned premiums.
(2) The expense ratio is a GAAP financial measure that is calculated by dividing the sum of acquisition costs and other underwriting expenses by net earned premiums.
For other more complex reserve categories where the above methods may not produce reliable indications, the Company's actuaries use additional methods tailored to the characteristics of the specific situation. Such reserve categories include losses from construction defect and A&E claims.
For other more complex reserve categories where the above methods may not produce reliable indications, the Company's actuaries use additional methods tailored to the characteristics of the specific situation. Such reserve categories include losses from A&E claims.
Prior to completion of the sale of American Reliable, American Reliable comprised 30% of the pool. Due to the sale of American Reliable on December 31, 2022, the intercompany pooling agreement was amended. American Reliable was removed from the pool and its 30% participation in the business and capital was allocated to the Company’s remaining five insurance companies.
Due to the sale of American Reliable on December 31, 2022, the intercompany pooling agreement was amended. American Reliable was removed from the pool and its 30% participation in the business and capital was allocated to the Company’s remaining five insurance companies.
With a shorter duration, the investment portfolio is well positioned to increase book yield by investing maturities in higher yielding bonds. At December 31, 2023, the Company's embedded book 64 yield on its fixed maturities, not including cash, was 4.0% compared with 3.5% at December 31, 2022 and 2.2% at December 31, 2021.
With a shorter duration, the investment portfolio is well positioned to increase book yield by investing maturities in higher yielding bonds. At December 31, 2024, the Company's embedded book yield on its fixed maturities, not including cash, was 4.4% compared with 4.0% at December 31, 2023 and 3.5% at December 31, 2022.
These non-GAAP measures or ratios should not be considered as a substitute for its most directly comparable GAAP measure or ratio and does not reflect the overall underwriting profitability of the Company.
These non-GAAP financial measures or ratios should not be considered as a substitute for its most directly comparable GAAP measure or ratio and do not reflect the overall underwriting profitability of the Company.
The Company evaluates the performance of these segments based on gross and net written premiums, revenues in the form of net earned premiums, and expenses in the form of (1) net losses and loss adjustment expenses, (2) acquisition costs, and (3) other underwriting expenses.
The Company evaluates the performance of these segments based on gross and net written premiums, revenues in the form of net earned premiums, and expenses in the form of (1) net losses and loss adjustment expenses, (2) net commission expenses, and (3) other underwriting expenses.
In addition, distributions of $0.4 million were paid to Global Indemnity Group, LLC’s preferred shareholder during the year ended December 31, 2023.
In addition, 60 distributions of $0.4 million were paid to Global Indemnity Group, LLC’s preferred shareholder during the year ended December 31, 2024.
In addition, distributions of $0.4 million were paid to Global Indemnity Group, LLC’s preferred shareholder during the year ended December 31, 2021. Investment Portfolio As a result of duration shortening, the Company significantly reduced its interest rate risk with more than 80% of the fixed maturity portfolio maturing over the next three years.
In addition, distributions of $0.4 million were paid to Global Indemnity Group, LLC’s preferred shareholder during the year ended December 31, 2023. Investment Portfolio As a result of duration shortening, the Company significantly reduced its interest rate risk with 90% of the fixed maturity portfolio maturing over the next three years.
As of December 31, 2023, the Company had a deferred tax asset of approximately $5.6 million related to net unrealized losses on fixed maturity available for sale securities.
As of December 31, 2024, the Company had a deferred tax asset of approximately $2.5 million related to net unrealized losses on fixed maturity available for sale securities.
As a result of these transactions, book value per share increased by $1.69 per share since inception of the stock repurchase program in October 2022. Restructuring The Company restructured its insurance operations to strengthen its market presence and enhance its focus on GBLI’s core products.
As a result of these transactions, book value per share increased by $1.69 per share since inception of the share repurchase program in October 2022. Restructuring Related to Exited Lines of Business The Company restructured its insurance operations to strengthen its market presence and enhance its focus on core products.
Net Realized Investment Gains (Losses) The components of net realized investment gains (losses) for the years ended December 31, 2023, 2022, and 2021 were as follows: Years Ended December 31, (Dollars in thousands) 2023 2022 2021 Equity securities $ (453 ) $ (3,392 ) $ 13,440 Fixed maturities (1,654 ) (13,405 ) 342 Derivatives — 10,073 2,105 Other-than-temporary impairment losses — (26,205 ) — Net realized investment gains (losses) $ (2,107 ) $ (32,929 ) $ 15,887 In response to a rising interest rate environment, the Company took action early in April 2022 to shorten the duration of its fixed maturities portfolio.
Net Realized Investment Gains (Losses) The components of net realized investment gains (losses) for the years ended December 31, 2024, 2023, and 2022 were as follows: Years Ended December 31, (Dollars in thousands) 2024 2023 2022 Equity securities $ 1,311 $ (453 ) $ (3,392 ) Fixed maturities (856 ) (1,654 ) (13,405 ) Derivatives — — 10,073 Other-than-temporary impairment losses — — (26,205 ) Net realized investment gains (losses) $ 455 $ (2,107 ) $ (32,929 ) In response to a rising interest rate environment, the Company took action early in April 2022 to shorten the duration of its fixed maturities portfolio.
See Note 2 of the notes to the consolidated financial statements in Item 8 of Part II of this report for additional information on the sale of renewal rights related to the Company’s manufactured and dwelling homes business and the Company's Farm, Ranch & Stable business.
See Note 2 of the notes to the consolidated financial statements in Item 8 of Part II of this report for additional information on the sale of the renewal rights related to the Company’s Farm, Ranch & Stable business and Note 2 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2023 Annual Report on Form 10-K for more information on the sale of renewal rights related to the Company's manufactured and dwelling homes business.
In determining whether the dividend must be approved, undistributed net income from the second and third preceding years, not including net realized capital gains, may be carried forward. 61 Under Pennsylvania law, United National Insurance Company, Penn-America Insurance Company, and Penn-Star Insurance Company may not pay any dividend or make any distribution that, together with other dividends or distributions made within the preceding 12 consecutive months, exceeds the greater of (1) 10% of its surplus as shown on its last annual statement on file with the commissioner or (2) its net income for the period covered by such statement, not including pro rata distributions of any class of its own securities, unless the commissioner has received notice from the insurer of the declaration of the dividend and the commissioner approves the proposed payment or fails to disapprove such payment within 30 days after receiving notice of such payment.
Under Pennsylvania law, United National Insurance Company, Penn-America Insurance Company, and Penn-Star Insurance Company may not pay any dividend or make any distribution that, together with other dividends or distributions made within the preceding 12 consecutive months, exceeds the greater of (1) 10% of its surplus as shown on its last annual statement on file with the commissioner or (2) its net income for the period covered by such statement, not including pro rata distributions of any class of its own securities, unless the commissioner has received notice from the insurer of the declaration of the dividend and the commissioner approves the proposed payment or fails to disapprove such payment within 30 days after receiving notice of such payment.
The Company's most directly comparable GAAP measure is the Penn-America's underwriting income (loss) of ($11.6) million, $10.6 million, and $12.5 million for the years ended December 31, 2023, 2022, and 2021, respectively.
The Company's most directly comparable GAAP measure is the Penn-America's underwriting income (loss) of $19.7 million, ($11.6) million, and $10.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.
The restructuring plan was initiated in the fourth quarter of 2022 and was completed in the first quarter of 2023. The Company incurred restructuring charges of $3.4 million in 2022 and $2.0 million in 2023 for a total of $5.4 million. The Company anticipates recurring annual expense savings of $16.0 million.
The restructuring plan was initiated in the fourth quarter of 2022 and was completed in the first quarter of 2023. The Company incurred restructuring charges of $3.4 million in 2022 and $2.0 million in 2023 for a total of $5.4 million.
Acquisition costs consist principally of commissions and premium taxes that are typically a percentage of the premiums on the insurance policies the Company writes, net of ceding commissions earned from reinsurers. Other underwriting expenses consist primarily of personnel expenses and general operating expenses related to underwriting activities.
Net commission expenses are typically a percentage of the premiums on the insurance policies the Company writes, net of ceding commissions earned from reinsurers. Other underwriting expenses consist primarily of personnel expenses and general operating expenses related to underwriting activities.
The Company qualifies all of its forward-looking statements by these cautionary statements. The Company’s forward-looking statements speak only as of the date of this report or as of the date they were made. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. 69
The Company’s forward-looking statements speak only as of the date of this report or as of the date they were made. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. 63
See “Business Segments” in Item 1 of Part I of this report for a description of the Company’s segments. Results of Operations The Company realized net income (loss) of $25.4 million, ($0.9) million, and $29.4 million during the years ended December 31, 2023, 2022, and 2021, respectively.
See “Business Segments” in Item 1 of Part I of this report for a description of the Company’s segments. 47 Results of Operations The Company's net income (loss) was $43.2 million, $25.4 million, and ($0.9) million during the years ended December 31, 2024, 2023, and 2022, respectively.
The outstanding balance on this note was $69.4 million at December 31, 2023. On April 13, 2022, GBLI Holdings, LLC issued a promissory note to Global Indemnity Investment Inc. for the principal amount of $18.4 million. This note bears interest at a rate equal to the short-term, annual compound AFR in effect for April 2022 which was 1.26%.
On April 13, 2022, GBLI Holdings, LLC issued a promissory note to Global Indemnity Investment Inc. for the principal amount of $18.4 million. This note bore interest at a rate equal to the short-term, annual compounded AFR in effect for April 2022 which was 1.26%.
The reported value of financial instruments not carried at fair value, principally cash and cash equivalents, approximate fair value. See Note 7 of the notes to the consolidated financial statements in Item 8 of Part II of this report for further information about the fair value hierarchy and the Company’s assets that are accounted for at fair value.
See Note 7 of the notes to the consolidated financial statements in Item 8 of Part II of this report for further information about the fair value hierarchy and the Company’s assets that are accounted for at fair value.
Lease expenses for minimum lease payments are recognized on a straight-line basis over the lease term. 47 The Company’s lease agreements may contain both lease and non-lease components which are accounted separately. The Company elected the practical expedient on not separating lease components from non-lease components for its equipment leases.
The Company’s lease agreements may contain both lease and non-lease components which are accounted separately. The Company elected the practical expedient on not separating lease components from non-lease components for its equipment leases. Rental income derived from subleases are recognized on a straight-line basis over the operating lease term.
Moreover, the Company operates in a very competitive environment. New risks and uncertainties emerge from time to time and it is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report.
These risks are not exhaustive, and new risks and uncertainties emerge from time to time. It is not possible for the Company to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report.
During 2021, the Board of Directors approved a distribution payment of $0.25 per common share to all shareholders of record on the close of business on March 22, 2021, June 21, 2021, September 23, 2021, and December 20, 2021. Distributions paid to common shareholders were $14.4 million during the year ended December 31, 2021.
During 2024, the Board of Directors approved a distribution payment of $0.35 per common share to all shareholders of record on the close of business on March 21, 2024, June 21, 2024, September 30, 2024, and December 24, 2024. Distributions paid to common shareholders were $19.4 million during the year ended December 31, 2024.
The factors included, but were not limited to, the historical pattern and volatility of the actuarial indications, the sensitivity of the actuarial indications to changes in paid and incurred loss patterns, the consistency of claims handling processes, the consistency of case reserving practices, changes in the Company’s pricing and underwriting, and overall pricing and underwriting trends in the insurance market.
The factors included, but were not limited to, the historical pattern and volatility of the actuarial indications, the sensitivity of the actuarial indications to changes in paid and incurred loss patterns, the consistency of claims handling processes, the consistency of case reserving practices, changes in the Company’s pricing and underwriting, and overall pricing and underwriting trends in the insurance market. 43 Management’s best estimate at December 31, 2024 was recorded as the loss reserve.
In connection with these actions, the Company identified fixed maturities securities with a 59 weighted average life of five years or greater as having an intent to sell, the majority of which were sold in the 2nd quarter of 2022.
In connection with these actions, the Company identified fixed maturities securities with a weighted average life of five years or greater as having an intent to sell, the majority of which were sold in the second quarter of 2022. Since April 2022, the Company has been investing in securities with much shorter durations.
In light of the many uncertainties associated with establishing the estimates and making the assumptions necessary to establish reserve levels, the Company reviews its reserve estimates on a regular basis and makes adjustments in the period that the need for such adjustments is determined. 44 The key assumptions fundamental to the reserving process are often different for various reserve categories and accident years.
In light of the many uncertainties associated with establishing the estimates and making the assumptions necessary to establish reserve levels, the Company reviews its reserve estimates on a regular basis and makes adjustments in the period that the need for such adjustments is determined.
With respect to bonds, the Company’s credit exposure limit for each issuer varies with the issuer’s credit quality. The allocation between taxable and tax-exempt bonds is determined based on market conditions and tax considerations. The fixed income portfolio currently has a duration of 1.1 years.
With respect to bonds, the Company’s credit exposure limit for each issuer varies with the issuer’s credit quality. The allocation between taxable and tax-exempt bonds is determined based on market conditions and tax considerations.
Management’s best estimate at December 31, 2023 was recorded as the loss reserve. Management’s best estimate is as of a particular point in time and is based upon known facts, the Company’s actuarial analyses, current law, and the Company’s judgment. This resulted in carried gross and net reserves of $850.6 million and $777.8 million, respectively, as of December 31, 2023.
Management’s best estimate is as of a particular point in time and is based upon known facts, the Company’s actuarial analyses, current law, and the Company’s judgment. This resulted in carried gross and net reserves of $800.4 million and $739.6 million, respectively, as of December 31, 2024.
The Company’s wholesale general agents have limited quoting and binding authority. Penn-America operates in the excess and surplus lines marketplace. Penn-America offers specialty property and casualty products designed for GBLI's Wholesale Commercial, Programs, InsurTech, and Assumed Reinsurance product offerings. The Company’s Non-Core Operations segment represents lines of business that have been de-emphasized or are no longer being written.
Penn-America offers specialty property and 40 casualty products designed for its Wholesale Commercial, Specialty Products, InsurTech, and Assumed Reinsurance product offerings. The Company’s Non-Core Operations segment represents lines of business that have been de-emphasized or are no longer being written.
(5) The combined ratio is a GAAP financial measure and is the sum of the Company’s loss and expense ratios. 50 Selected Financial Data by Business Segment Premiums The following table summarizes the change in premium volume by business segment: Years Ended December 31, % Years Ended December 31, % (Dollars in thousands) 2023 2022 Change 2022 2021 Change Gross written premiums (1) Penn-America $ 369,660 $ 387,967 (4.7 %) $ 387,967 $ 349,962 10.9 % Non-Core Operations 46,737 339,636 (86.2 %) 339,636 332,160 2.3 % Total gross written premiums $ 416,397 $ 727,603 (42.8 %) $ 727,603 $ 682,122 6.7 % Ceded premiums written Penn-America $ 12,864 $ 17,661 (27.2 %) $ 17,661 $ 21,303 (17.1 %) Non-Core Operations 4,214 118,611 (96.4 %) 118,611 80,751 46.9 % Total ceded premiums written $ 17,078 $ 136,272 (87.5 %) $ 136,272 $ 102,054 33.5 % Net written premiums (2) Penn-America $ 356,796 $ 370,306 (3.6 %) $ 370,306 $ 328,659 12.7 % Non-Core Operations 42,523 221,025 (80.8 %) 221,025 251,409 (12.1 %) Total net written premiums $ 399,319 $ 591,331 (32.5 %) $ 591,331 $ 580,068 1.9 % Net earned premiums Penn-America $ 354,518 $ 359,597 (1.4 %) $ 359,597 $ 308,676 16.5 % Non-Core Operations 118,839 242,874 (51.1 %) 242,874 286,934 (15.4 %) Total net earned premiums $ 473,357 $ 602,471 (21.4 %) $ 602,471 $ 595,610 1.2 % (1) Gross written premiums represent the amount received or to be received for insurance policies written without reduction for reinsurance costs or other deductions.
(3) The combined ratio is a GAAP financial measure and is the sum of the Company’s loss and expense ratios. 48 Selected Financial Data by Business Segment Premiums The following table summarizes the change in premium volume by business segment: Years Ended December 31, % Years Ended December 31, % (Dollars in thousands) 2024 2023 Change 2023 2022 Change Gross written premiums (1) Penn-America $ 399,976 $ 369,660 8.2 % $ 369,660 $ 387,967 (4.7 %) Non-Core Operations (10,218 ) 46,737 (121.9 %) 46,737 339,636 (86.2 %) Total gross written premiums $ 389,758 $ 416,397 (6.4 %) $ 416,397 $ 727,603 (42.8 %) Ceded premiums written Penn-America $ 10,394 $ 12,864 (19.2 %) $ 12,864 $ 17,661 (27.2 %) Non-Core Operations 174 4,214 (95.9 %) 4,214 118,611 (96.4 %) Total ceded premiums written $ 10,568 $ 17,078 (38.1 %) $ 17,078 $ 136,272 (87.5 %) Net written premiums (2) Penn-America $ 389,582 $ 356,796 9.2 % $ 356,796 $ 370,306 (3.6 %) Non-Core Operations (10,392 ) 42,523 (124.4 %) 42,523 221,025 (80.8 %) Total net written premiums $ 379,190 $ 399,319 (5.0 %) $ 399,319 $ 591,331 (32.5 %) Net earned premiums Penn-America $ 369,806 $ 354,518 4.3 % $ 354,518 $ 359,597 (1.4 %) Non-Core Operations 7,186 118,839 (94.0 %) 118,839 242,874 (51.1 %) Total net earned premiums $ 376,992 $ 473,357 (20.4 %) $ 473,357 $ 602,471 (21.4 %) (1) Gross written premiums represent the amount received or to be received for insurance policies written without reduction for reinsurance costs or other deductions.
Some of these assumptions are explicit assumptions that are required of a particular method, but most of the assumptions are implicit and cannot be precisely quantified. An example of an explicit assumption is the pattern employed in the Paid Development method.
The key assumptions fundamental to the reserving process are often different for various reserve categories and accident years. Some of these assumptions are explicit assumptions that are required of a particular method, but most of the assumptions are implicit and cannot be precisely quantified. An example of an explicit assumption is the pattern employed in the Paid Development method.
See Note 5 of the notes to consolidated financial statements in Item 8 of Part II of this report for the specific methodologies and significant assumptions used by asset class as well as an analysis of the Company’s securities with gross unrealized losses as of December 31, 2023 and 2022.
See Note 5 of the notes to the consolidated financial statements in Item 8 of Part II of this report for the specific methodologies and significant assumptions used by asset class as well as an analysis of the Company’s securities with gross unrealized losses as of December 31, 2024 and 2023. 45 Fair Value Measurements The Company categorizes its invested assets that are accounted for at fair value in the consolidated statements into a fair value hierarchy.
The Company’s reconciliation of net income (loss) to net cash provided by operations is generally influenced by the following: • the fact that the Company collects premiums, net of commissions, in advance of losses paid; • the timing of the Company’s settlements with its reinsurers; and • the timing of the Company’s loss payments. 62 Net cash provided by operating activities in 2023, 2022, and 2021 was $42.9 million, $44.2 million and $90.8 million, respectively.
The reconciliation of net income (loss) to net cash provided by operations is generally influenced by the following: • the fact that the Company collects premiums, net of commissions, in advance of losses paid; • the timing of the Company’s settlements with its reinsurers; and • the timing of the Company’s loss payments.
Losses and loss adjustment expenses are estimated by management and reflect the Company’s best estimate of ultimate losses and costs arising during the reporting period and revisions of prior period estimates.
The Company’s expenses include losses and loss adjustment expenses, net commission expenses, and other underwriting expenses, corporate and other operating expenses, interest, investment expenses, and income taxes. Losses and loss adjustment expenses are estimated by management and reflect the Company’s best estimate of ultimate losses and costs arising during the reporting period and revisions of prior period estimates.
See Note 11 of the notes to the consolidated financial statements in Item 8 of Part II of this report for a comparison of income tax between periods. 60 Net Income (Loss) The factors described above resulted in net income of $25.4 million, net loss of $0.9 million, and net income of $29.4 million for the years ended December 31, 2023, 2022, and 2021, respectively.
See Note 11 of the notes to the consolidated financial statements in Item 8 of Part II of this report for a comparison of income tax between periods. Net Income (Loss) The factors described above resulted in net income of $43.2 million in 2024 compared to $25.4 million in 2023.
Funds are used primarily to pay claims and operating expenses and to purchase investments. As a result of the distribution policy, funds may also be used to pay distributions to shareholders of the Company.
As a result of the distribution policy, funds may also be used to pay distributions to shareholders of the Company.
Net Investment Income Years Ended December 31, % Years Ended December 31, % (Dollars in thousands) 2023 2022 Change 2022 2021 Change Gross investment income (1) $ 56,960 $ 29,776 91.3 % $ 29,776 $ 39,662 (24.9 %) Investment expenses (1,516 ) (2,149 ) (29.5 %) (2,149 ) (2,642 ) (18.7 %) Net investment income $ 55,444 $ 27,627 100.7 % $ 27,627 $ 37,020 (25.4 %) (1) Excludes realized gains and losses Gross investment income for 2023 increased by 91.3% and net investment income for 2023 increased by 100.7% compared to 2022.
Net Investment Income Years Ended December 31, % Years Ended December 31, % (Dollars in thousands) 2024 2023 Change 2023 2022 Change Gross investment income (1) $ 64,438 $ 56,960 13.1 % $ 56,960 $ 29,776 91.3 % Investment expenses (2,063 ) (1,516 ) 36.1 % (1,516 ) (2,149 ) (29.5 %) Net investment income $ 62,375 $ 55,444 12.5 % $ 55,444 $ 27,627 100.7 % (1) Excludes realized gains and losses Gross investment income for 2024 increased by 13.1% and net investment income for 2024 increased by 12.5% compared to 2023.
The ROU asset is calculated using the initial lease liability amount, plus any lease payments made at or before the commencement date, minus any lease incentives received, plus any initial direct costs incurred.
The ROU asset is calculated using the initial lease liability amount, plus any lease payments made at or before the commencement date, minus any lease incentives received, plus any initial direct costs incurred. Lease expenses for minimum lease payments are recognized on a straight-line basis over the lease term.
Policyholders’ surplus is calculated by subtracting total liabilities from total assets. The NAIC has risk-based capital standards that are designed to identify property and casualty insurers that may be inadequately capitalized based on the inherent risks of each insurer’s assets and liabilities and mix of net written premiums.
The NAIC has risk-based capital standards that are designed to identify property and casualty insurers that may be inadequately capitalized based on the inherent risks of each insurer’s assets and liabilities and mix of net written premiums. Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action.
These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology, and include discussions of strategy, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives, expectations or consequences of identified transactions or natural disasters, and statements about the future performance, operations, products and services of the companies.
These statements can be identified by the use of forward-looking terminology such as “believe,” “expect,” “may,” “will,” “should,” “project,” “plan,” “seek,” “intend,” or “anticipate” or the negative thereof or comparable terminology, and include discussions of strategy, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives, expectations or consequences of identified transactions or natural disasters, and statements about the future performance, operations, products and services of the companies.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and accompanying notes of Global Indemnity included elsewhere in this report.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of the Company’s financial condition and results of operations for the years ended December 31, 2024 and 2023, including year-to-year comparisons between 2024 and 2023, should be read in conjunction with the consolidated financial statements and accompanying notes of Global Indemnity included elsewhere in this report.
Trust accounts The Company established trust accounts, which are held by Penn-Patriot Insurance Company, to collateralize exposure it had to certain third-party ceding companies. The Company believes that Penn-Patriot Insurance Company will have sufficient liquidity to pay claims prospectively.
The Global Debt Fund, LP had a fair market value of $17.9 million at December 31, 2024. Trust accounts The Company established trust accounts, which are held by Penn-Patriot Insurance Company, to collateralize exposure it had to certain third-party ceding companies. The Company believes that Penn-Patriot Insurance Company will have sufficient liquidity to pay claims prospectively.
The timing and actual number of shares repurchased, if any, will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.
As of December 31, 2024, the Company’s remaining authorization to repurchase shares is $101.0 million. The timing and actual number of shares repurchased, if any, will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.
To the extent that the Company needs to raise additional funds, any equity or debt financing for this purpose, if available at all, may be on terms that are not favorable to the Company.
To the extent that the Company needs to raise additional funds, any equity or debt financing for this purpose, if available at all, may be on terms that are not favorable to the Company. If the Company cannot obtain adequate capital, its business, results of operations and financial condition could be adversely affected.
Please see Note 12 of the notes to the consolidated financial statements in Item 8 of Part II of this report for further discussion on prior accident year development.
Please see Note 12 of the notes to the consolidated financial statements in Item 8 of Part II of this report for further discussion on prior accident year development. The current accident year loss ratio improved by 1.0 points to 56.4% in 2024 from 57.4% in 2023.
Please see Note 12 of the notes to the consolidated financial statements in Item 8 of Part II of this report for further discussion on prior accident year development.
Please see Note 12 of the notes to the consolidated financial statements in Item 8 of Part II of this report for further discussion on prior accident year development. The current accident year loss ratio improved by 0.4 points to 64.6% in 2024 from 64.2% in 2023.
Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action. Based on the standards currently adopted, the policyholders’ surplus of each of the insurance companies is in excess of the prescribed minimum company action level risk-based capital requirements. Sources of operating funds consist primarily of net written premiums and investment income.
Based on the standards currently adopted, the policyholders’ surplus of each of the insurance companies is in excess of the prescribed minimum company action level risk-based capital requirements. Sources of operating funds consist primarily of net written premiums and investment income. Funds are used primarily to pay claims and operating expenses and to purchase investments.
See Note 13 of the notes to the consolidated financial statements in Item 8 of Part II of this report for details on the Company’s debt. Income Tax Benefit/ Expense The income tax expense was $7.5 million for the year ended December 31, 2023 compared with income tax expense of $2.8 million for the year ended December 31, 2022.
See Note 13 of the notes to the consolidated financial statements in Item 8 of Part II of this report for details on the Company’s debt. Income Tax Benefit/ Expense The income tax expense increased to $11.7 million in 2024 compared to $7.5 million in 2023 due to higher taxable income in the Company's U.S. subsidiaries.
The components of income (loss) from the Company’s Penn-America segment and corresponding underwriting ratios are as follows: Years Ended December 31, % Years Ended December 31, % (Dollars in thousands) 2023 2022 Change 2022 2021 Change Gross written premiums $ 369,660 $ 387,967 (4.7 %) $ 387,967 $ 349,962 10.9 % Net written premiums $ 356,796 $ 370,306 (3.6 %) $ 370,306 $ 328,659 12.7 % Net earned premiums $ 354,518 $ 359,597 (1.4 %) $ 359,597 $ 308,676 16.5 % Other income $ 1,257 $ 1,029 22.2 % $ 1,029 $ 1,028 0.1 % Total revenues 355,775 360,626 (1.3 %) 360,626 309,704 16.4 % Losses and expenses: Net losses and loss adjustment expenses 233,239 214,854 8.6 % 214,854 184,163 16.7 % Acquisition costs and other underwriting expenses 134,155 135,145 (0.7 %) 135,145 113,038 19.6 % Underwriting income (loss) $ (11,619 ) $ 10,627 (209.3 %) $ 10,627 $ 12,503 (15.0 %) Years Ended December 31, Point Years Ended December 31, Point 2023 2022 Change 2022 2021 Change Underwriting Ratios: Loss ratio: Current accident year 57.4 % 59.0 % (1.6 ) 59.0 % 59.1 % (0.1 ) Prior accident year 8.4 % 0.8 % 7.6 0.8 % 0.6 % 0.2 Calendar year loss ratio 65.8 % 59.8 % 6.0 59.8 % 59.7 % 0.1 Expense ratio 37.8 % 37.6 % 0.2 37.6 % 36.6 % 1.0 Combined ratio 103.6 % 97.4 % 6.2 97.4 % 96.3 % 1.1 Accident year combined ratio (2) 95.2 % 96.5 % 96.5 % 95.8 % (1) Penn-America's accident year underwriting income of $18.5 million, $13.5 million, and $14.1 million for the years ended December 31, 2023, 2022, and 2021, respectively, is a non-GAAP measure which excludes the impact of prior accident year losses and loss adjustment expenses and prior accident year contingent commission expenses totaling $30.1 million, $2.9 million, and $1.6 million for the years ended December 31, 2023, 2022, and 2021, respectively.
The components of income (loss) from the Company’s Penn-America segment and corresponding underwriting ratios are as follows: Years Ended December 31, % Years Ended December 31, % (Dollars in thousands) 2024 2023 Change 2023 2022 Change Gross written premiums $ 399,976 $ 369,660 8.2 % $ 369,660 $ 387,967 (4.7 %) Net written premiums $ 389,582 $ 356,796 9.2 % $ 356,796 $ 370,306 (3.6 %) Net earned premiums $ 369,806 $ 354,518 4.3 % $ 354,518 $ 359,597 (1.4 %) Other income 1,336 1,257 6.3 % 1,257 1,029 22.2 % Total revenues 371,142 355,775 4.3 % 355,775 360,626 (1.3 %) Losses and expenses: Net losses and loss adjustment expenses 210,293 233,239 (9.8 %) 233,239 214,854 8.6 % Net commission expenses 86,863 81,691 6.3 % 81,691 84,081 (2.8 %) Other underwriting expenses 54,270 52,464 3.4 % 52,464 51,064 2.7 % Total expenses 351,426 367,394 (4.3 %) 367,394 349,999 5.0 % Underwriting income (loss) $ 19,716 $ (11,619 ) 269.7 % $ (11,619 ) $ 10,627 (209.3 %) Accident year underwriting income $ 22,072 $ 18,509 19.3 % $ 18,509 $ 13,480 37.3 % Years Ended December 31, Point Years Ended December 31, Point 2024 2023 Change 2023 2022 Change Underwriting Ratios: Loss ratio: Current accident year 56.4 % 57.4 % (1.0 ) 57.4 % 59.0 % (1.6 ) Prior accident year 0.5 % 8.4 % (7.9 ) 8.4 % 0.8 % 7.6 Calendar year loss ratio 56.9 % 65.8 % (8.9 ) 65.8 % 59.8 % 6.0 Expense ratio 38.1 % 37.8 % 0.3 37.8 % 37.6 % 0.2 Combined ratio 95.0 % 103.6 % (8.6 ) 103.6 % 97.4 % 6.2 Accident year combined ratio (2) 94.4 % 95.2 % 95.2 % 96.5 % (1) Penn-America's accident year underwriting income of $22.1 million, $18.5 million, and $13.5 million for the years ended December 31, 2024, 2023, and 2022, respectively, is a non-GAAP financial measure which excludes the impact of prior accident year losses and loss adjustment expenses and prior accident year contingent commission expenses totaling $2.4 million, $30.1 million, and $2.9 million for the years ended December 31, 2024, 2023, and 2022, respectively.
The excess of the Company’s costs of acquiring new and renewal insurance and reinsurance contracts over the related ceding commissions earned from reinsurers is capitalized as deferred acquisition costs and amortized over the period in which the related premiums are earned. 46 In accordance with accounting guidance for insurance enterprises, the method followed in computing such amounts limits them to amounts recoverable from premium to be earned, related investment income, losses and loss adjustment expenses, and certain other costs expected to be incurred as the premium is earned.
In accordance with accounting guidance for insurance enterprises, the method followed in computing such amounts limits them to amounts recoverable from premium to be earned, related investment income, losses and loss adjustment expenses, and certain other costs expected to be incurred as the premium is earned.
Distributions On March 6, 2024, the Board of Directors approved a dividend rate of $0.35 per common share payable on March 28, 2024 to all shareholders of record as of the close of business on March 21, 2024, a 40% increase over the prior quarterly dividend rate of $0.25 per common share.
Distributions On March 6, 2025, the Board of Directors approved a dividend rate of $0.35 per common share payable on March 28, 2025 to all shareholders of record as of the close of business on March 21, 2025. As of March 11, 2025, there were 14,258,199 shares outstanding.
Global Indemnity Group, LLC’s current short-term and long-term liquidity needs include but are not limited to the payment of corporate expenses, distributions to shareholders, and share repurchases. The Company also has commitments in the form of operating leases, commitments to fund limited liability investments, and unpaid losses and loss expense obligations.
Global Indemnity Group, LLC’s current short-term and long-term liquidity needs include but are not limited to the payment of corporate expenses, distributions to shareholders, and share repurchases.
An additional limitation is that Indiana does not permit a domestic insurer to declare or pay a dividend except out of unassigned surplus unless otherwise approved by the commissioner before the dividend is paid. The Company’s insurance subsidiaries did not declare or pay any dividends in 2023.
An additional limitation is that Indiana does not permit a domestic insurer to declare or pay a dividend except out of unassigned surplus unless otherwise approved by the commissioner before the dividend is paid. In 2024, Penn-Patriot Insurance Company declared a dividend in the amount of $40.0 million which will be paid in the first quarter of 2025.
Net earned premiums within the Non-Core Operations segment decreased by 51.1% for the year ended December 31, 2023 as compared to the same period in 2022 primarily due to the sale of renewal rights related to the Company's Farm, Ranch & Stable business on August 8, 2022, non-renewal of a casualty treaty, and the reduction of premiums written for lines of business that have been de-emphasized or no longer written.
Net earned premiums within the Non-Core Operations segment decreased by 94.0% in 2024 as compared to the same period in 2023 primarily due to the non-renewal of a casualty treaty and a reduction in earned premiums due to the sale of Farm, Ranch & Stable renewal rights on August 8, 2022. There were no property earned premiums in 2024.
Future dividends remain subject to the discretion of GBLI’s Board of Directors, including the Board of Director’s evaluation of the company’s financial performance, capital and reserve positions, liquidity, balance sheet, and other factors. As of December 31, 2023, there are currently 13,565,041 shares outstanding.
Future dividends remain subject to the discretion of Global Indemnity Group, LLC's Board of Directors, including the Board of Director’s evaluation of the company’s financial performance, capital and reserve positions, liquidity, balance sheet, and other factors.
This note bears interest at a rate equal to the short-term, annual compound Applicable Federal Rate ("AFR") in effect for April 2022 which was 1.26%. On each third anniversary of this Note, the interest rate shall reset to the then applicable short-term, annual compounded AFR for such month. The Note is due on April 13, 2031.
On each third anniversary of this restated Note, the interest rate shall reset to the 61 then applicable short-term, annual compounded AFR for such month. The Note is due on April 13, 2031. The outstanding balance on this note was $69.4 million at December 31, 2024.
However, the inclusion of case reserves can lead to distortions if changes in case reserving practices have taken place.
The use of case incurred losses instead of paid losses can result in development patterns that are less variable than paid development patterns. However, the inclusion of case reserves can lead to distortions if changes in case reserving practices have taken place.
Net investment income was $55.4 million, $27.6 million, and $37.0 million for the years ended December 31, 2023, 2022, and 2021, respectively. Excluding investment income from alternative investments, investment income was $51 . 0 million, $33.6 million and $26.2 million during the years ended December 31, 2023, 2022, and 2021, respectively.
Net investment income was $62.4 million, $55.4 million, $27.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.
The estimate of losses yet to be paid is added to current paid losses to estimate the ultimate loss for each accident year. This method will react very slowly if actual ultimate loss ratios are different from expectations due to changes not accounted for by the Expected Loss Ratio calculation.
This method will react very slowly if actual ultimate loss ratios are different from expectations due to changes not accounted for by the Expected Loss Ratio calculation. 42 The Bornhuetter-Ferguson method using premiums and incurred losses is similar to the Bornhuetter-Ferguson method using premiums and paid losses except that it uses case incurred losses.
No amounts related to the derivative instruments were received in 2023. The Company has no interest rate swap agreements as of December 31, 2023. 67 Contractual Obligations The Company has commitments in the form of operating leases, commitments to fund limited liability investments, and unpaid losses and loss expense obligations.
Contractual Obligations The Company has commitments in the form of operating leases, commitments to fund limited liability investments, and unpaid losses and loss expense obligations.
Years Ended December 31, 2023 2022 2021 Losses Loss Ratio Losses Loss Ratio Losses Loss Ratio Property Non catastrophe property losses and ratio excluding the effect of prior accident year (1) $ 6,588 46.3 % $ 33,713 52.2 % $ 80,214 48.8 % Effect of prior accident year (9,506 ) (66.8 %) (4,096 ) (6.3 %) 4,222 2.6 % Non catastrophe property losses and ratio (2) $ (2,918 ) (20.5 %) $ 29,617 45.9 % $ 84,436 51.4 % Catastrophe losses and ratio excluding the effect of prior accident year (1) $ 3,393 23.8 % $ 11,012 17.0 % $ 35,421 21.5 % Effect of prior accident year (7,416 ) (52.1 %) (868 ) (1.3 %) 5,392 3.3 % Catastrophe losses and ratio (2) $ (4,023 ) (28.3 %) $ 10,144 15.7 % $ 40,813 24.8 % Total property losses and ratio excluding the effect of prior accident year (1) $ 9,981 70.1 % $ 44,725 69.2 % $ 115,635 70.3 % Effect of prior accident year (16,922 ) (118.9 %) (4,964 ) (7.6 %) 9,614 5.9 % Total property losses and ratio (2) $ (6,941 ) (48.8 %) $ 39,761 61.6 % $ 125,249 76.2 % Casualty Total Casualty losses and ratio excluding the effect of prior accident year (1) $ 66,269 63.3 % $ 110,515 62.0 % $ 78,356 63.9 % Effect of prior accident year (3,414 ) (3.3 %) (5,902 ) (3.3 %) (2,804 ) (2.3 %) Total Casualty losses and ratio (2) $ 62,855 60.0 % $ 104,613 58.7 % $ 75,552 61.6 % Total Total net losses and loss adjustment expense and total loss ratio excluding the effect of prior accident year (1) $ 76,250 64.2 % $ 155,240 63.9 % $ 193,991 67.6 % Effect of prior accident year (20,336 ) (17.1 %) (10,866 ) (4.5 %) 6,810 2.4 % Total net losses and loss adjustment expense and total loss ratio (2) $ 55,914 47.1 % $ 144,374 59.4 % $ 200,801 70.0 % (1) Non-GAAP measure / ratio (2) Most directly comparable GAAP measure / ratio Premiums See “Result of Operations” above for a discussion on consolidated premiums for 2023.
Years Ended December 31, 2024 2023 2022 Losses Loss Ratio Losses Loss Ratio Losses Loss Ratio Property Non catastrophe property losses and ratio excluding the effect of prior accident year (1) $ 301 (253.0 %) $ 6,588 46.3 % $ 33,713 52.2 % Effect of prior accident year (413 ) 347.1 % (9,506 ) (66.8 %) (4,096 ) (6.3 %) Non catastrophe property losses and ratio (2) $ (112 ) 94.1 % $ (2,918 ) (20.5 %) $ 29,617 45.9 % Catastrophe losses and ratio excluding the effect of prior accident year (1) $ 38 (31.9 %) $ 3,393 23.8 % $ 11,012 17.0 % Effect of prior accident year (710 ) 596.6 % (7,416 ) (52.1 %) (868 ) (1.3 %) Catastrophe losses and ratio (2) $ (672 ) 564.7 % $ (4,023 ) (28.3 %) $ 10,144 15.7 % Total property losses and ratio excluding the effect of prior accident year (1) $ 339 (284.9 %) $ 9,981 70.1 % $ 44,725 69.2 % Effect of prior accident year (1,123 ) 943.7 % (16,922 ) (118.9 %) (4,964 ) (7.6 %) Total property losses and ratio (2) $ (784 ) 658.8 % $ (6,941 ) (48.8 %) $ 39,761 61.6 % Casualty Total Casualty losses and ratio excluding the effect of prior accident year (1) $ 4,306 58.9 % $ 66,269 63.3 % $ 110,515 62.0 % Effect of prior accident year (625 ) (8.5 %) (3,414 ) (3.3 %) (5,902 ) (3.3 %) Total Casualty losses and ratio (2) $ 3,681 50.4 % $ 62,855 60.0 % $ 104,613 58.7 % Total Total net losses and loss adjustment expense and total loss ratio excluding the effect of prior accident year (1) $ 4,645 64.6 % $ 76,250 64.2 % $ 155,240 63.9 % Effect of prior accident year (1,748 ) (24.3 %) (20,336 ) (17.1 %) (10,866 ) (4.5 %) Total net losses and loss adjustment expense and total loss ratio (2) $ 2,897 40.3 % $ 55,914 47.1 % $ 144,374 59.4 % (1) Non-GAAP financial measure / ratio (2) Most directly comparable GAAP measure / ratio 55 Unallocated Corporate Items The Company’s fixed income portfolio, excluding cash, continues to maintain high quality with an AA- average rating and a duration of 0.8 years.
Penn-America's accident year underwriting income(2) was $18.5 million, $13.5 million, and $14.1 million for the years ended December 31, 2023, 2022, and 2021, respectively, and the accident year combined ratio(2) was 95.2%, 96.5%, and 95.8% for the years ended December 31, 2023, 2022, and 2021, respectively. 49 The following table summarizes the Company’s results for the years ended December 31, 2023, 2022, and 2021: Years Ended December 31, % Years Ended December 31, % (Dollars in thousands) 2023 2022 Change 2022 2021 Change Gross written premiums $ 416,397 $ 727,603 (42.8 %) $ 727,603 $ 682,122 6.7 % Net written premiums $ 399,319 $ 591,331 (32.5 %) $ 591,331 $ 580,068 1.9 % Net earned premiums $ 473,357 $ 602,471 (21.4 %) $ 602,471 $ 595,610 1.2 % Other income 1,435 1,462 (1.8 %) 1,462 1,815 (19.4 %) Total revenues 474,792 603,933 (21.4 %) 603,933 597,425 1.1 % Losses and expenses: Net losses and loss adjustment expenses 289,153 359,228 (19.5 %) 359,228 384,964 (6.7 %) Acquisition costs and other underwriting expenses 182,617 236,381 (22.7 %) 236,381 222,841 6.1 % Underwriting income (loss) 3,022 8,324 (63.7 %) 8,324 (10,380 ) (180.2 %) Net investment income 55,444 27,627 100.7 % 27,627 37,020 (25.4 %) Net realized investment gains (losses) (2,107 ) (32,929 ) (93.6 %) (32,929 ) 15,887 NM Other income — 29,903 (100.0 %) 29,903 27,936 7.0 % Corporate and other operating expenses (23,383 ) (24,421 ) (4.3 %) (24,421 ) (27,179 ) (10.1 %) Interest expense — (3,004 ) (100.0 %) (3,004 ) (10,481 ) (71.3 %) Loss on extinguishment of debt — (3,529 ) (100.0 %) (3,529 ) — 100.0 % Income before income taxes 32,976 1,971 NM 1,971 32,803 (94.0 %) Income tax expense (7,547 ) (2,821 ) 167.5 % (2,821 ) (3,449 ) (18.2 %) Net income (loss) $ 25,429 $ (850 ) NM $ (850 ) $ 29,354 (102.9 %) Underwriting Ratios: Loss ratio (3) 61.1 % 59.6 % 59.6 % 64.7 % Expense ratio (4) 38.6 % 39.2 % 39.2 % 37.4 % Combined ratio (5) 99.7 % 98.8 % 98.8 % 102.1 % NM – not meaningful (1) Net income (loss) excluding the net gain on the sale of the Company’s Manufactured Home and Dwelling renewal rights and the Company's Farm, Ranch & Stable renewal rights of ($17.3) million and $12.9 million during the years ended December 31, 2022 and 2021, respectively, is a non-GAAP measure which excludes the impact of gross proceeds of $30.0 million, impairments and expenses of $9.2 million, and tax expense of $4.4 million related to sale of Farm, Ranch & Stable renewal rights in 2022 and excludes the impact of gross proceeds of $28.0 million, impairments and expenses of $7.2 million, and tax expense of $4.4 million related to the sale of Manufactured Home and Dwelling renewal rights in 2021.
The following table summarizes the Company’s results for the years ended December 31, 2024, 2023, and 2022: Years Ended December 31, % Years Ended December 31, % (Dollars in thousands) 2024 2023 Change 2023 2022 Change Gross written premiums $ 389,758 $ 416,397 (6.4 %) $ 416,397 $ 727,603 (42.8 %) Net written premiums $ 379,190 $ 399,319 (5.0 %) $ 399,319 $ 591,331 (32.5 %) Net earned premiums $ 376,992 $ 473,357 (20.4 %) $ 473,357 $ 602,471 (21.4 %) Other income 1,365 1,435 (4.9 %) 1,435 1,462 (1.8 %) Total revenues 378,357 474,792 (20.3 %) 474,792 603,933 (21.4 %) Losses and expenses: Net losses and loss adjustment expenses 213,190 289,153 (26.3 %) 289,153 359,228 (19.5 %) Acquisition costs and other underwriting expenses 147,345 182,617 (19.3 %) 182,617 236,381 (22.7 %) Underwriting income 17,822 3,022 489.7 % 3,022 8,324 (63.7 %) Net investment income 62,375 55,444 12.5 % 55,444 27,627 100.7 % Net realized investment gains (losses) 455 (2,107 ) (121.6 %) (2,107 ) (32,929 ) (93.6 %) Other income — — — — 29,903 (100.0 %) Corporate and other operating expenses (25,696 ) (23,383 ) 9.9 % (23,383 ) (24,421 ) (4.3 %) Interest expense — — — — (3,004 ) (100.0 %) Loss on extinguishment of debt — — — — (3,529 ) (100.0 %) Income before income taxes 54,956 32,976 66.7 % 32,976 1,971 NM Income tax expense (11,715 ) (7,547 ) 55.2 % (7,547 ) (2,821 ) 167.5 % Net income (loss) $ 43,241 $ 25,429 70.0 % $ 25,429 $ (850 ) NM Underwriting Ratios: Loss ratio (1) 56.6 % 61.1 % 61.1 % 59.6 % Expense ratio (2) 39.0 % 38.6 % 38.6 % 39.2 % Combined ratio (3) 95.6 % 99.7 % 99.7 % 98.8 % NM – not meaningful (1) The loss ratio is a GAAP financial measure that is generally viewed in the insurance industry as an indicator of underwriting profitability and is calculated by dividing net losses and loss adjustment expenses by net earned premiums.
These non-GAAP measures should not be considered as a substitute for its most directly comparable GAAP measure and does not reflect the overall underwriting profitability of the Company.
The Company believes the non-GAAP financial measures are useful to investors when evaluating the Company's underwriting performance as trends within Penn-America may be obscured by prior accident year adjustments. These non-GAAP financial measures should not be considered as a substitute for its most directly comparable GAAP measure and does not reflect the overall underwriting profitability of the Company.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company continues to hold a minimal amount of preferred stocks as of December 31, 2023, however, the positions do not pose a significant equity price risk.
Biggest changeIn addition, the Company seeks to mitigate credit risk to reinsurers through the use of trusts and letters of credit for collateral. 64 Equity Price Risk The Company holds a minimal amount of preferred stocks as of December 31, 2024, however, the positions do not pose a significant equity price risk.
At period-end, the Company re-measures those non-U.S. currency financial assets to their current U.S. dollar equivalent. Financial liabilities, if any, are generally adjusted within the reserving process. However, for known losses on claims to be paid in foreign currencies, the Company re-measures the liabilities to their current U.S. dollar equivalent each period end. 71
At period-end, the Company re-measures those non-U.S. currency financial assets to their current U.S. dollar equivalent. Financial liabilities, if any, are generally adjusted within the reserving process. However, for known losses on claims to be paid in foreign currencies, the Company re-measures the liabilities to their current U.S. dollar equivalent each period end. 65
There was no credit loss recorded on these investments during the years ended December 31, 2023 or 2022. In addition, the Company has credit risk exposure to its general agencies and reinsurers.
There was no credit loss recorded on these investments during the years ended December 31, 2024 or 2023. In addition, the Company has credit risk exposure to its general agencies and reinsurers.
As of December 31, 2022, the Company had approximately $24.3 million worth of investment exposure to subprime and Alt-A investments. As of December 31, 2022, approximately $10.1 million of those investments have been rated BBB to AAA by Standard & Poor’s and $14.2 million were rated below investment grade.
As of December 31, 2024, the Company had approximately $20.5 million worth of investment exposure to subprime and Alt-A investments. As of December 31, 2024, approximately $9.7 million of those investments have been rated BBB to AAA by Standard & Poor’s and $10.8 million were rated below investment grade.
As of December 31, 2023, assuming identical shifts in interest rates for securities of all maturities, the table below illustrates the sensitivity of market value in Global Indemnity’s bonds to selected hypothetical changes in basis point increases and decreases: (Dollars in thousands) Change in Market Value Basis Point Change Market Value % (200) $ 1,322,494 28,701 2.2 % (100) 1,308,143 14,350 1.1 % No change 1,293,793 — — 100 1,279,448 (14,345 ) (1.1 %) 200 1,265,106 (28,687 ) (2.2 %) Credit Risk The Company’s investment policy requires that its investments in debt instruments are of high credit quality issuers and limit the amount of credit exposure to any one issuer based upon the rating of the security.
As of December 31, 2024, assuming identical shifts in interest rates for securities of all maturities, the table below illustrates the sensitivity of market value in Global Indemnity’s bonds to selected hypothetical changes in basis point increases and decreases: (Dollars in thousands) Change in Market Value Basis Point Change Market Value % (200) $ 1,401,644 19,736 1.4 % (100) 1,391,793 9,885 0.7 % No change 1,381,908 — — 100 1,371,995 (9,913 ) (0.7 %) 200 1,362,086 (19,822 ) (1.4 %) Credit Risk The Company’s investment policy requires that its investments in debt instruments are of high credit quality issuers and limit the amount of credit exposure to any one issuer based upon the rating of the security.
Removed
In addition, the Company seeks to mitigate credit risk to reinsurers through the use of trusts and letters of credit for collateral. 70 Equity Price Risk The Company exited its investment in the stable dividend equity portfolio during the first quarter of 2022.

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