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2016-05-09

Global Indemnity plc Reports First Quarter 2016 Financial Results

t Quarter 2016 Financial Results

DUBLIN, Ireland, 2016-05-09 06:26 CEST (GLOBE NEWSWIRE) -- Global Indemnity plc
(NASDAQ:GBLI) today reported net income for the three months ended March 31,
2016 of $7.1 million or $0.41 per share, compared to net income of $6.8 million
or $0.26 per share for the same period of 2015. Operating income was $12.0
million or $0.69 per share for the three months ended March 31, 2016 compared
to $8.8 million or $0.34 per share for the first quarter of 2015. As of March
31st, book value per share was $43.66, an increase of 1.6% compared to book
value per share of $42.98 at December 31, 2015.

Selected Operating and Balance Sheet Data (Dollars in millions, except per
share data)

For the Three As of As of
Months March 31, December
Ended March 31, 31,
2016 2015 2016 2015

Gross Premiums $ 141.4 $ 142.9 Book value per $ 43.66 $ 42.98
Written share
Net Premiums $ 116.9 $ 126.1 Shareholders’ $ 766.1 $ 749.9
Written equity
Cash and $ 1,506.1 $ 1,516.3
invested
assets(1)
Net income $ 7.1 $ 6.8
Net income per $ 0.41 $ 0.26 (1) Including receivable/(payable) for
share securities sold/(purchased)

Operating $ 12.0 $ 8.8
income
Operating $ 0.69 $ 0.34
income per
share

Combined ratio
analysis:
Loss ratio 53.3 54.7
Expense ratio 42.8 37.9
Combined ratio 96.1 92.6

Cynthia Y. Valko, Chief Executive Officer, commented: "I am pleased that our
focus on profitable growth has resulted in year over year growth in net income
and operating income. Premiums at American Reliable grew 4.7% compared to the
prior year, and all of our operating segments were profitable in the first
quarter of 2016. While the overall combined ratio reflects continued
profitability, our combined ratio is slightly higher than the same period of
2015 due to a higher expense ratio. The increase in the expense ratio was
primarily due to a reduction in earned premiums, which was the result of the
Company reducing the amount of catastrophe business it writes and purchasing
additional reinsurance. As the year continues, we expect the expense ratio to
improve due to the completion of the integration of American Reliable.”

About Global Indemnity plc and its subsidiaries

Global Indemnity plc (NASDAQ:GBLI), through its several direct and indirect
wholly owned subsidiary insurance and reinsurance companies, provides both
admitted and non-admitted specialty property and casualty insurance coverages
and individual policyholder coverages in the United States, as well as
reinsurance worldwide. Global Indemnity plc’s three primary segments are:

-- United States Based Commercial Lines Operations
-- United States Based Personal Lines Operations
-- Bermuda Based Reinsurance Operations

For more information, visit the Global Indemnity plc website at
http://www.globalindemnity.ie.

Forward-Looking Information

The forward-looking statements contained in this press release1 do not address
a number of risks and uncertainties. Investors are cautioned that Global
Indemnity’s actual results may be materially different from the estimates
expressed in, or implied, or projected by, the forward looking statements.
Factors that could cause actual results to differ materially from those
contemplated in the forward-looking statements include, but are not limited to,
the risk that there may be difficulties in the continued integration of
American Reliable business, which could result in a failure to realize the
potential benefits of the acquisition, and the risk that American Reliable’ s
or Global Indemnity’s prospective insurance premiums, investment yield, or net
earnings are less than anticipated (including as a result of unexpected events,
competition, costs, charges or outlays whether as a consequence of the
transaction or otherwise). The foregoing review of factors that could cause
actual financial or operating performance to differ materially from
expectations is not exhaustive. Please see Global Indemnity’s filings with the
Securities and Exchange Commission for a discussion of additional risks and
uncertainties which could impact the company and for a more detailed
explication regarding forward-looking statements.

1 Disseminated pursuant to the "safe harbor" provisions of Section 21E of the
Security Exchange Act of 1934.

Global Indemnity plc’s Combined Ratio for the Three Months Ended March 31, 2016

The combined ratio is a key measure of insurance profitability. The components
comprising the combined ratio, by reportable business segment, for the three
months ended March 31, 2016 are as follows:

Commercial Personal Reinsurance
Lines Lines Operations
Loss Ratio 52.8 56.7 37.7
Expense Ratio 43.2 43.7 36.7
Combined Ratio 96.0 100.4 74.4

Loss Ratio:

Commercial Lines Operations:

The loss ratio for the Company’s Commercial Lines was 52.8% for 2016 compared
with 58.4% for 2015. The loss ratio for the three months ended March 31, 2016
was lower than the comparable period in 2015 due to lower than anticipated
claims severity in general liability and lower than expected case incurred
emergence on non-catastrophe property claims. The current accident year loss
ratio increased 2.2 points from 62.4% in 2015 to 64.6% in 2016. This increase
was primarily due to two large property brokerage fire losses in 2016 offset by
lower severity in catastrophe claims.

Personal Lines Operations:

The loss ratio for the Company’s Personal Lines was consistent year over year.
The 2016 loss ratio was 56.7% compared with 56.6% for 2015. There were no
adjustments to prior accident years.

Reinsurance Operations:

The loss ratio for the Company’s Reinsurance Operations was 37.7% for 2016
compared with 31.1% for 2015. The increase in the loss ratio was primarily due
to the Company reducing the amount of catastrophe business it writes. The 2016
loss ratio includes an improvement of 8.2 points due to reductions in prior
accident year loss reserves resulting from ultimate losses being lower than
expected for property lines. The current accident year loss ratio increased 3.7
points from 42.2% in 2015 to 45.9% in 2016 due to the reduction in catastrophe
business written as well as a change in business mix. Professional liability
premiums increased slightly, which historically have a higher loss ratio than
property treaties.

Expense ratio:

For the three months ending March 31, the total expense ratio increased from
37.9% in 2015 to 42.8% in 2016. The increase in the 2016 expense ratio was
primarily due to a reduction in earned premium as a result of the Company
reducing catastrophe exposure and purchasing additional reinsurance.

Global Indemnity plc’s Gross and Net Premiums Written Results by Segment

Three Months Ended March 31,
Gross Premiums Written Net Premiums Written
2016 2015 2016 2015
Commercial Lines Operations $ 49,091 $ 49,793 $ 43,558 $ 45,622
Personal Lines Operations 79,540 73,211 60,579 60,656
Reinsurance Operations 12,735 19,865 12,735 19,826
Total $ 141,366 $ 142,869 $ 116,872 $ 126,104

Gross premiums written and net premiums written decreased 1.1% and 7.3%,
respectively, compared to the same period in 2015.

Commercial Lines Operations: For the three months ended March 31, 2016, gross
premiums written and net premiums written both decreased 1.4% and 4.5%,
respectively, compared to the same period in 2015. The reduction in net
premiums written was primarily due to ceding at a higher rate as a result of
increasing property reinsurance.

Personal Lines Operations: For the three months ended March 31, 2016, gross
premiums written increased 8.6% and net premiums written decreased 0.1%
compared to the same period in 2015. $3.3 million of the increase in gross
premiums written relates to business that is ceded to insurance entities owned
by American Reliable’s former parent, Assurant, under a 100% quota share
reinsurance agreement. Excluding the portion of gross premiums written that
were ceded to affiliates of Assurant, gross premiums written increased $3.0
million or 4.7% compared to 2015. The increase in gross premiums written not
ceded to affiliates of Assurant was offset by an increase in catastrophe
reinsurance.

Reinsurance Operations: For the three months ended March 31, 2016, gross
premiums written and net premiums written decreased 35.9% and 35.8%,
respectively, compared to the same period in 2015. This decrease in gross and
net premiums written is mainly due to a reduction in catastrophe exposure. In
addition, the property catastrophe reinsurance marketplace continues to be very
competitive due to excess capital.

...

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