Global Indemnity Group, LLC

If you'd like to withdraw your question, again, press the star and 1. We will also be taking questions from the webcast. If you would like to submit a question, please use the Q&A button located at the bottom right of your webcast screen. I would now like to turn the call over to Evan Kasowitz, President of Belmont Holdings. You may begin.

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 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 first quarter update on our 2025 financial and operational results. Consistent with our past calls, I will first provide a few overview comments to put this quarter into context. Then our Chief Financial Officer, Brian Riley, will expand on this quarter's financial numbers for our insurance and investment operations. When I joined the company two and a half years ago, we established a tactical plan to maximize long-term value for our shareholders. First, we assessed our product offerings and then spent a few months refocusing our insurance business around those core products that had consistently been underwritten profitably. 2023 was a realignment and transition year as we underwent the expense restructuring to match our slimmed-down product offerings and design a long-term competitive IT architecture. These efforts started to pay off in 2024 as we grew our core business consistent with our long-term goals, hit our underwriting targets, and deployed the first components of our proprietary underwriting and policy management software. Our insurance operations have been building momentum to consistently achieve both long-term growth and profitability metrics to create value for our shareholders. This momentum continued in the first quarter as our underlying core growth, excluding terminated products, was 16%, and our underwriting results, excluding the California wildfires, slightly outpassed last year at a combined ratio of 94.8. I will come back to the wildfires in a few moments, which obviously depressed the first quarter completely. Having stabilized our operations to achieve appropriate growth and underwriting results for existing products, we completed our project manifest strategic restructuring at the end of 2024 to facilitate efficient and controlled rapid product expansion. We anticipate that this expansion will occur over the next few years, fueled by a mixture of both organic growth, incubated new teams, and coupled with some focused purchases of existing distribution operations. As noted on our last call, we have begun to build out our agency and insurance services group with the hiring of Praveen Reddy, and he has now started to recruit a few key additional members to facilitate execution of this next stage of growth for GBLI. Given the completion of the legal restructuring at the end of last year, this quarter marks the first time we will start to report on our numbers consistent with the new structure. As we have not yet added any new products or established new carrier relationships, The results in the short term will not show any meaningful benefits from our new structure. Brian will provide more detailed comments on both overall insurance operations and the first breakdown by the new segments. Turning to a couple of key performance indicators. Our rate increases and exposure growth continued to modestly exceed our estimates of social and price inflation trends. This will continue to be a key objective for 2025, given the ongoing uncertainty on the national price inflation front. Also, our estimates for the prior year's loss results remain stable, with virtually no difference between calendar and accident year numbers. Our reserve margins also remain solid, with no change in margin estimated quarter end from last year end. Our ongoing efforts to manage catastrophe exposures for our property segments experienced a bit of a disappointment with a 15 million catastrophic loss from the recent Los Angeles wildfires. Virtually all of our loss occurred in the Palisades fire with almost no loss in the Eaton fire. Given the industry impact of the LA fires, our result was modestly below our property share in California. albeit still very significant for a company of our size in a calendar quarter. Although we expect an annual average of $17 million from all catastrophic losses given our current book of business in a calendar year, the sheer magnitude of this catastrophic loss in the Palisades Fire exceeded the different models we have used for wildfires in the more moderate wildfire risk locations like the Palisades and the LA Basin. Like most industry players, we are rethinking the validity of past severity model estimates for wildfire cat exposures and have already taken steps to further reduce our property exposures to wildfires. We continue to manage internal expenses a bit higher than our long-term targets in order to provide the best service for our customers. As noted in the past quarters, we have maintained staff numbers just slightly below 2023 as we grow our business at double-digit levels and keep expense growth at half of those growth rates. While the expense ratio for the existing business is trending in the right direction with a 2024 ratio of approximately 38%, corporate expenses associated with project manifests and the build out of our agency and insurance services staff escalated that ratio by a couple of points in the first quarter. Although we expect to make additional investments in people over the next couple of years, we still have not lost sight of our long-term expense objective and will continue to work to get expense ratios down to 37% or lower. In conclusion, our reported numbers clearly fell short of our targets. but the underlying trends remain strong and point to significant shareholder value growth going forward. I'll now turn the call over to Brian.