Global Indemnity Group, LLC

Ladies and gentlemen, thank you for standing by and welcome to the Global Amenity Group Q3 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, press star followed by the number one on your telephone keypad. We will also be taking questions from the webcast. If you would like to submit a question, please use the Q&A button on the bottom right of your webcast screen. Thank you. I will now turn today's call over to Steve Reese, Head of Investor Relations. Please go ahead, sir.

Thank you, Tamika. As a reminder, today's conference call is being recorded, as some 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 representations 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 other filings with the SEC for 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. It's now my pleasure to turn the call over to Mr. Jay Brown, Chief Executive Officer of GBLI.

Thank you, Steve. Good morning, and thank you all for joining us for the GBLI nine-month update on our 2024 financial and operational results. Consistent with our past calls, I will first provide a few overview comments, and then our Chief Financial Officer, Brian Riley, will review the 2024 financial highlights for both our insurance operations and holding company. Let's start with the big picture. Through nine months, our team has continued to achieve results that are both consistent with our plan for 2024 and are building momentum to hit the long-term metrics I have established great value for our shareholders. I will again remind you that our overall goals remain. First, growing our insurance business at a compound annual growth rate of at least 10%. Second, achieve a combined ratio in the low 90s. And third, manage our insurance expenses to a competitive level of 36 to 37%. The results for nine months track very close to what we reported last quarter for the first six months of 2024. Insurance revenue momentum, as measured by gross premium, improved on the pattern we saw in the second quarter, with total premium, excluding terminated products, now up 12% through nine months. This is driven by the strong year-to-date 14% growth we saw in wholesale commercial InsureTech, and Assume3 Insurance. I should note that momentum continues to build as these operations grew by 23% in the year-over-year numbers for the third quarter. Our efforts to turn around our specialty products business remains a work in progress as gross premium, excluding terminated products, remain flat through nine months. Turning to insurance underwriting performance. I am very delighted to report a nine-month combined ratio of 93.9 for the PEN America segment. The good results continue for both our casualty and property coverages. Importantly, our rate increases continue to modestly exceed our estimates of inflation trends. Also, our estimates for the past year results remain stable with de minimis differences between calendar and accident year numbers. Our efforts to manage cap exposures for our property segments continues to be reflected in our modest losses from catastrophes in 2024. Total cap losses through nine months are down roughly 35% from 2023. As a point of reference, gross losses for both the two most recent hurricanes, Helene and Milton, are both expected to each come in around $1.5 million. We continue to manage expenses a bit higher than our long-term targets to provide the best possible service to our customers. As noted in the past quarters, we are maintaining PEN America staff numbers just slightly below last year as we grow our business at double-digit levels and keep expense growth at half of that growth rate. Our PEN America expense ratio is starting to trend in the right direction with a nine-month ratio of 38.2%, but we still have work to do in order to get this down to 37% or lower. A key factor in growing our business, achieving outstanding underwriting results, and achieving competitive expense levels is utilizing technology as an effective competitive weapon across all dimensions. As noted in the last few quarters, we have embarked on a multi-year effort to transform our technology platforms, transaction, excuse me, and information software and data storage. These investments are well underway with about two-thirds of our servers moved to the cloud from onsite locations, and our data stores now move to a cloud-based lake house. Our first transactional replacement application went live in September, and we are now processing all aspects of our wholesale commercial excess liability policies in the new environment. We are targeting this year end to add special events for wholesale commercial and to add all the remaining products for wholesale mid next year. An additional first quarter module is focused on our underwriters and operations staff who will be receiving an integrated underwriting workstation to both improve the time to handle referral business and to improve service for our agents. As Brian will review in more detail, our decision to go very short and high quality in our bond investment continue to pay off with additional favorable comparisons to prior year in both our investment returns and an improvement in the market value of our investments. Our board continues to canvas with outside investment advisors to plan our return to a more conventional insurance investment portfolio as we hope to see some clarity in the investment horizon as we move past the election. As we now approach the year end and are updating our plans for next year, I will note that I just completed the end of my second year as the CEO of Global. The first six months of my tenure were very choppy as we repositioned the company as a smaller but much more focused E&S company. However, as the results for the subsequent six quarters have emerged, the decision to focus on areas where we can excel is really beginning to pay dividends. I am thankful that I had both the support of the Board to effect these changes, and more importantly, the superb efforts of the managers and staff at JBLI. We are all looking forward to 2025 and beyond as we enhance and implement both our tactical and strategic plans. Brian?