Global Indemnity Group, LLC

Good day and welcome to the Global Indemnity Group, LLC, third quarter 2022 earnings conference call. I would now like to introduce Stephen W. Reese, head of investor relations.

Thank you, operator. Today's conference call is being recorded. GBLI's remarks may contain forward-looking statements. Some of the forward-looking statements can be identified by the use of forward-looking words, including without limitation, beliefs, expectations, or estimates. We caution you that such forward-looking statements should not be regarded as a representation by us that the future plans, estimates, or expectations contemplated by us will, in fact, be achieved. Please refer to our annual report on Form 10-K and our other filings made with the SEC for a description of the business environment in which we operate and the important factors that may materially affect our results. Global Indemnity Group LLC is not under any obligation and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. Joining us are Jay Brown, CEO, Tom McGeehan, CFO, and Jonathan Altman, President. It is now my pleasure to turn the call over to Jay Brown.

Thank you, Steve. Good morning, and thank everyone for joining us today. I am sure you're all surprised to see me sitting here today as the CEO of Global. To be truthful, A few months ago, it never occurred to me either. That said, the board asked if I would step in and take on the CEO role, and I said yes without any reservations. Having served on the board for seven years, I am obviously quite familiar with GBLI, its business, and its management team. It probably makes sense if I first address the issue of David Charlton's departure. before offering my initial observations as CEO and turning the presentation over to Tom McGeehan to review the nine months results. David was recruited to Global to execute the board driven strategy of completing a transformation to an excess and surplus lines casually focused insurance organization. In the past 18 months, David recruited many outstanding seasoned executives and specialists to complement the significant talent we already had in place. I use the word season carefully here as it is a very high energy group with significant variations in years of experience. In parallel, David initiated a significant effort to develop IT tools to substantially enhance our customer focus strategies and to address some of our internal expense issues. As a result of suffering a series of both third party IT delivery delays and unacceptable product deliveries, the board requested that I step in as CEO given both my decades of CEO and chairman experience at several leading property casualty insurance companies and extensive oversight of IT procurement development, and implementation, including most recently as chairman of a highly innovative insurance tech startup. In addition to my new role, the board is fortunate to have added two experienced executives as board members to assist us in achieving our objectives, Jason Hurwitz and Gary Tolman. Jason is among the most brilliant analysts I have ever worked with. and will help us tremendously, as he has in the past, in focusing on the key areas that need to be addressed to create value at Global. Gary has served in multiple roles in his insurance career, but most notably led the teams as CEO that created two leading firms in the insure tech space, eAssurance and Nobler, Inc., where I served as chairman. His experience with contemporary technology development will be a significant asset to both the board and me as we refocus our technology efforts. Both the board and I have the utmost respect for David Charlton and will be forever thankful for David's many contributions to and enhancements to the company. We wish David nothing but the best in the future. But now that the decision has been made, it is my role to lead this organization forward. I became a modest shareholder in Global at the time of Fox Payne's initial investment in 2003. In 2015, I joined the board of Global and worked with Saul and the rest of the board and developed a long-term strategy to maximize the value of Global to all of our investors. While I have obviously been privy to much of the internal company information as a director, It is worth a minute to share my observations of Global today after just a couple of weeks on site in our executive offices as a CEO. Looking at today's insurance market, it is a terrific time for anyone to be in the E&S market. More importantly, on a relative basis, Global has an enviable competitive position in the insurance market today. We have completed a rapid transformation of our existing book of business that is comprised solely now of business consistent with our specialty ENS objective to well execute sales of businesses that didn't fit, and second, by adding teams to expand the breadth of our product offerings. From both an internal and an external assessment of our balance sheet, we have a very strong capital position. an investment portfolio that's been optimized for today's volatile investment market, and a track record stretching back 19 years to FoxPayne's 2003 acquisition of Global of maintaining strong reserves. By shifting our business mix to more than 70% casually, we have mitigated the company's disproportionate exposure to catastrophic property losses, which has made the last several years of results totally unacceptable to our owners. Given all that, the obvious question is why has the market assigned a significant discount to tangible book value per share? There are no doubts that our extremely thin daily trading volumes can create distortions in value assessment. But the longer record reflects a clear assessment that we are being valued at a significant discount to book. By definition, the market is telling us that our insurance operations subtract value from our capital base rather than enhance value. There is no doubt that our underwriting results as reported over the past five years have weighed heavily on our share price. Given the actions that we've taken over the past couple of years, the future must provide an immediate sharp contrast that allows our owners to alter their perception of the value of our insurance operations. Although the challenges and opportunities I faced in my five prior executive roles were unique to each organization, every one of them had a common objective of maximizing value for the owners. As such, my daily focus as CEO will be to work with both the board and the management team to make that happen here at Global. As I turn you over to Tom, a reminder of the principles that our management team has embraced to create value. First, our staff is our most important asset. Second, we embrace a customer-centric mentality to create value in our product for our insurers. And third, and foremost among my view of what's important, our discipline underwriting practices are the core to long-term profitable growth.