Global Indemnity Group, LLC

Good morning, ladies and gentlemen, and thank you for standing by and welcome to the Global Indemnity Group 2025 Earnings Call. My name is Jonathan, and I will be your conference operator today. During the speaker's presentation, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. For web questions, select questions from the toolbar to submit your web questions. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Evan Kasowitz, President of Belmont Holdings. 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 for joining us for the GBLI year-end 2025 results conference call. With me today are Evan Kazowitz and Brian Riley, our Chief Financial Officer. Following our usual format, I will first provide overview comments on my assessments of both the fourth quarter and the full year's results. Then our CFO, Brian Riley, will provide the highlights of our financial and operating results. Following Brian's comments, we look forward to your questions. This quarter results continue the very strong underlying positive insurance operating trends that we have seen for the last several quarters. Our accident quarter combined ratio of 89.3 produced an underwriting profit of $11 million, a very nice increase over the 96.6% we recorded in the fourth quarter last year. This was our first sub-90% quarterly accident year combined ratio in the past several years, reflecting both exceptional property results for non-CAT losses and solid casualty results. Our short duration investment portfolio delivered acceptable net investment income results at $15.3 million, down a tad from the prior period of $16.1 million. As Brian will provide more details on the investment portfolio, I would just observe that we are sitting at an extremely short duration of one year with very high quality fixed income investments. Given where we are in a very uncertain world today, I am personally happy that we are playing defense and have the ability to redeploy into a more attractive portfolio once things settle down. As we noted in our press release, excluding the largest ever California wildfire loss that we experienced in the first quarter, Our quarterly year-to-date accident results improved each quarter with a sequence of 94.8%, 94.7%, 93.2%, and 92.2% for the full year. Even including the wildfire losses which occurred in the first quarter, we still had an okay full-year accident result of 96.2%. I would also note that we did make a modest adjustment to prior year loss reserves in the fourth quarter of $9 million. That's about 1.2% of year-end carried reserves. The adverse development continues as it has over the past few years to be largely attributed to the accident years 2020, 2021, and 2022. These are the three years where we had an extraordinarily poor loss experience in a couple of programs, both since terminated, and our New York City habitational risk. We continue to grow our ongoing book of business, which we label as core Belmont, at 9%. The press release mentioned our overall reported premium growth was flat as we continue to trim back our remaining underperforming specialty programs. I will note that the 9% growth was driven by a 77% growth in our assumed reinsurance book, 16% in vacant express, 8% in collectibles, and 3% in PEN America wholesale. The modest 3% growth in PEN was a disappointment given that we had grown at 8% for the first nine months of 2025. This was driven by a major drop in new business submissions, resulting in a very weak fourth quarter as we observed a major shift in the level of price competition in the E&S wholesale space. This heightened competition has been fueled by both our existing E&S competitors and the admitted market coming back into the property markets in a big way. Given the work we have put into improving our current products and the discipline to trim everything that didn't meet our underwriting criteria, we feel very strongly that we should now see Belmont Core gross premiums grow in the 15 to 20% range or more in 2026. As we expected, our restructuring expenses remain high. This is due to the combination of number one, ongoing investments including year two of the three-year digital transformation of our technology stack that includes software infrastructure and data and number two our investment in talent to grow our catalects distribution platform I recognize that this focus combination along with normal operating costs leaves our overall expenses too high as such we are deeply focused on minimizing the effect on our competitiveness within each product channel. Having established that our Kaleidoscope platform is working for our first two deployed products exactly as envisioned two years ago, building on this momentum, we are confident that all three of our existing direct product groups, that would be wholesale, commercial, vacant, express, and collectibles, will be fully integrated on the platform by year end. Not only will our customers see a difference in both our service levels and responsiveness, but our organization will finally be structured to benefit from scale over the next few years. In addition to the progress we have made in our software development, 98% of our data center servers have now been moved into our cloud configuration, with the remaining few servers scheduled to move mid-year. As we have previously commuted, all our internal data has now been moved to a modern cloud-based Fabric Lakehouse. We are currently running a large number of our existing reporting packages against both the old and the new data sources to verify that the mapping is 100% reconciled. Equally important, the data has been structured and stored to prepare us for the significant number of emerging AI projects that are being identified across all aspects of our company. Reflecting on the last three years of significant IT investment and our renewed focus on core business, it can be challenging to see just how far we've come. However, our ongoing commitment to underwriting excellence has resulted in an exceptionally attractive book of enforced business. As the year progresses, we're set to start seeing the business rationale for our digital transformation unfold in real time. I want to reaffirm my personal belief in the strength of our existing core business. With our reorganized structure and the strategic efforts we've been putting in place, I am very confident that we are well positioned to deliver substantial value to our owners in the near future. At this point, I'll turn it over to Brian.