Global Indemnity Group, LLC Q4 FY2025 earnings call

• Jay Brown noted strong underlying positive insurance operating trends, first sub-90% quarterly accident year combined ratio in years, property and casualty results contributed. Short duration investment portfolio with short duration and high quality fixed income. Trimmed back underperforming specialty programs, core Belmont grew 9%. Restructuring expenses high due to ongoing investments and talent investment. Kaleidoscope platform working for first two products, confident to integrate three direct product groups by year end. 98% data center servers moved to cloud, remaining to move mid-year, data moved to cloud-based Fabric Lakehouse. • Brian Riley discussed underwriting results improvement since California wildfire, operating income excluding wildfire impact, investment income slight increase, corporate expenses higher, underwriting income increase, combined ratio improvement, prior accident year losses increase, premiums details including Belmont Core Gross Written Premiums, divisional level growth details, specialty products flat, optimistic about underwriting trends, investment portfolio positioned for longer duration, booked reserves solid, discretionary capital $284 million at year end.

Accident quarter combined ratio was 89.3, producing an underwriting profit of $11 million. Short duration investment portfolio had net investment income of $15.3 million, down from prior period's $16.1 million. Excluding California wildfire loss, quarterly year-to-date accident results improved each quarter. Including wildfire loss, full-year accident result was 96.2%. Quarterly year-to-date accident results: 94.8%, 94.7%, 93.2%, 92.2%. Adjusted prior year loss reserves by $9 million in fourth quarter. Core Belmont book of business grew at 9%. PEN America wholesale had 3% growth, disappointed due to drop in new business submissions. Assumed reinsurance book grew 77%, vacant express 16%, collectibles 8%. Specialty products excluding terminated programs flat at $37 million. Belmont Core Gross Written Premiums $401 million, up 9% excluding terminated products. Investment income up slightly to $62.7 million from $62.4 million in 2024, average yield steady at 4.4%. Belmont non-core segment declined by $67 million to $237 million at year end. Book yield on fixed income portfolio 4.4%, average duration approx one year. Average credit quality of fixed income portfolio AA-. Operating income excluding California wildfire impact was $40.2 million vs $42.9 million in 2024. County or underwriting income increased by about $5 million, combined ratio improved to 94.6 from 95.6 in 2024. Current action year underwriting income improved by 13.9 million, combined ratio 92.2 vs 24's 95.4. Loss ratio better by 4.1 points, property 44.8 vs 2024's 54.1, casualty 57.6 vs 24's 58.6. Expense ratio elevated, about one point higher than 2024. Prior accident year losses increased by $9 million driven by accident years 20-22 and New York Habitational Business.

• Jay Brown feels Belmont Core gross premiums should grow in 15 to 20% range or more in 2026. • Brian Riley mentioned operating income excluding California wildfire impact was $40.2 million vs $42.9 million in 2024, but optimistic about underwriting performance trends over last three accident years, investment portfolio positioned to invest in longer duration maturities at higher yields, booked reserves solid, discretionary capital $284 million at year end. • Expect expense ratio to start seeing improvement in 2027, 2026 to be pretty level. • Anticipate organic growth in the area of programs in 2026 as they ended the year with 100% comfortable programs going forward. • Board continues to believe investments will lead to opportunity to put capital to work, either through additional product or adding arms to company.

• Heightened competition in E&S wholesale space fueled by existing competitors and admitted market coming back into property markets, affecting PEN America wholesale's new business submissions. • Private credit funds investment: disappointed with performance so far, and it's been a bit of a free fall for the last three or four weeks. • Concentration of competition in the property markets causing a significant drop in actual available premium, which is a headwind going into 2026.

Q: Did you give an expense ratio for the fourth quarter?

A: A little over 40, 40 and a half.

Q: Does the expense ratio drift down towards the end of the year or more level?

A: 2026 will be pretty level with that, start to see some improvement in 2027.

Q: Thoughts on overall cycle and competition?

A: Industry uncomfortable making money, market reacts quicker now, concentrated change in property markets due to excellent results causing admitted market to come back and drop in available premium, working to adjust in real time.

Q: Products premiums inflection point?

A: Short term pretty stable, some growth in 2027.

Q: Switch to NASDAQ benefits?

A: Hoping for better trading volumes, better execution for buyers and sellers.

Q: Exposure on private equity side?

A: No direct private equity, some small investments in private credit funds, disappointed with performance, realized losses related.

Q: Return on equity expectation?

A: Book value before dividends should increase min 6% to 7% a year for next two years, underlying insurance and investment business return in low to mid teens.

Q: Share buybacks?

A: Board believes investments will lead to opportunity to put capital to work, tough call.

Q: Actively looking to buy new lines of business?

A: Belmont is open for more business, Cadillac spent last year looking at acquisitions but didn't find large number, focus on existing core business growth