Global Indemnity Group, LLC

Ladies and gentlemen, thank you for standing by. My name is Kate and I will be your conference operator today. At this time, I would like to welcome everyone to the Global Indemnity Group 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, simply press star followed with the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. We will also be taking questions from the webcast. If you would like to submit a question via the web, please use the Q&A button located at the bottom right side of your webcast screen. Thank you. I would now like to call over to Evan Kasowitz. Please go ahead.

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, believes, 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 with the SEC for descriptions 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 is now my pleasure to turn the call over to Mr. Jay Brown, Chief Executive of Global Indemnity.

Thank you, Evan. Good morning, and thank you all for joining us. for the GBLI year-end update on our 2024 financial and operational results. Consistent with our past calls, I will first provide a few overview comments on the ongoing results in our PEN America segment. Given the fact that year-end numbers are consistent with prior quarters, I will keep my comments to a minimum. Then our Chief Financial Officer, Brian Riley, will expand on the 2024 financial highlights for both our insurance operations and the holding company. It gives me great pleasure to report that the GBLI team achieved solid insurance results consistent with the goals we had established for 2024. They continue building momentum to consistently hit the long-term metrics for revenue growth and underwriting profits that we had established to great value for our shareholders. Pan America insurance revenue momentum, as measured by gross premium, maintained the pattern we saw in the third quarter with total premium, excluding terminated programs, having finished up 12% through 2024. This was driven by the excellent 17% growth we achieved in InsureTech, coupled with 12% growth in our largest division, Wholesale Commercial. Our assumed reinsurance operation finished up 83% in its second full year of operations. We expect these segment-wide positive trends to continue in 2025. Turning to insurance underwriting performance, I am very delighted to report a full year 94.4% underwriting results for the PEN America segment. This result was modestly better than the 95.2% we recorded in 2023. The good results continue for both our casualty and property coverages. Importantly, our rate increases continue to modestly exceed our own estimates of inflation trends. This will continue to be a key objective for 2025, given the continued uncertainty on the national inflation front. Also, our estimates for the past year results remain stable, with virtually no difference between calendar and accident year numbers. Our reserve margins remain solid with modest improvement recorded throughout the year. The ongoing efforts to manage catastrophe exposures for our property segments continue to be reflected in our modest losses from catastrophes in 2024. Total cap losses for the full year were down roughly 26% from 2023. I will note that we experienced 15 million in cat catastrophic losses from the recent Los Angeles wildfires. Given the magnitude of the LA fires, this result was modestly below our property market share in California, albeit still significant for a company of our size. Although we expect an annual average of around 17 million from cat losses given our current book of business, The sheer magnitude of this single loss exceeded the different models we have used for wildfires in the LA basin. Like most industry players, we are rethinking the validity of our past severity model estimates for wildfire cat exposures. We continue to manage internal expenses a bit higher than our long-term targets to provide the best service to our customers. As noted in past quarters, We have maintained PEN America staff numbers just slightly below 2023 as we grow our business at double digit levels and keep expense growth at roughly half of that growth rate. Our PEN America expense ratio is starting to trend in the right direction with the 2024 ratio of 38.1%, but we still have significant work to do in order to get this down to 37% or lower. As noted last quarter, a key factor in growing our business is attaining outstanding underwriting results, achieving competitive expense levels, and utilizing technology effectively across all dimensions. We have just completed the first full year of a multi-year effort to transform our technology platforms, transactions, and information software and data storage. These investments are well underway, with our transition to the cloud about 75% completed, with the remaining migration to be completed in 2025. As I mentioned last quarter, the first transactional application went live in September, and we are now processing all aspects of our wholesale commercial excess liability policies in the new technology environment. We recently added similar capabilities for special events in wholesale commercial and are on schedule to add transaction processing for all the remaining products for wholesale commercial this year. An additional module is in development, which is focused on our agents, underwriters, and operations staff. They will receive an integrated underwriting workstation in the next few months to improve the time to handle referral business and service for our wholesale commercial agents. As a follow-up to my comments from last quarter, the decision to focus on the underwriting areas where we can excel has begun to pay dividends. We completed a legal and operational transformation that was announced in January labeled project manifest. One of the main objectives of this project was to enhance our ability to attract additional talent to compliment our existing teams. These efforts will provide the expertise needed to accelerate our ability to use our growing excess capital in order to expand our product offerings for both existing and new customers. I am very, very pleased that we kicked off this talent expansion with the hiring of Praveen Reddy to head up Penn American Underwriters LLC, which is comprised of all of our existing underwriting and service teams. Praveen joined us last week and has begun his efforts to rapidly expand our current product offerings. I am thankful that we have the support of the full board and Fox Payne as our financial advisor to effect these structural changes. which I personally believe will yield significant future results for our company. Equally important, I remain blessed to benefit from the superb efforts of all the managers and staff at Global. We are all looking forward to 2025 and beyond as we enhance and implement our tactical and strategic plans. Brian?