GLOBAL INDEMNITY GROUP, LLC – 10-K – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the consolidated
financial statements and accompanying notes of Global Indemnity included
elsewhere in this report. Some of the information contained in this discussion
and analysis or set forth elsewhere in this report, including information with
respect to the Company's plans and strategy, constitutes forward-looking
statements that involve risks and uncertainties. Please see "Cautionary Note
Regarding Forward-Looking Statements" at the end of this Item 7 and "Risk
Factors" in Item 1A above for more information. You should review "Risk Factors"
in Item 1A above for a discussion of important factors that could cause actual
results to differ materially from the results described in or implied by the
forward-looking statements contained herein.

                              Recent Developments

Restructuring

The Company is restructuring its insurance operations in an effort to strengthen
its market presence and enhance its focus on GBLI's core Wholesale Commercial
and InsurTech products. As a result, the Company is exiting its four brokerage
divisions: Professional Liability, Excess Casualty, Environmental, and Middle
Market Property. The Company will cease writing new business and existing
renewals will be placed in run-off for these four divisions. To support growth
in the Company's Commercial Specialty segment and provide capital for business
initiatives including share repurchases, a decision was made to reduce writings
in its Reinsurance Operations. The Company anticipates that its Reinsurance
Operations will comprise a smaller percentage of the Company's overall business
prospectively. The restructuring plan was initiated in the fourth quarter of
2022 and is expected to be completed in the first quarter of 2023. The Company
incurred restructuring charges of $3.4 million in the fourth quarter of 2022 and
$2.1 million in the first quarter of 2023 for a total of $5.5 million. The
Company anticipates recurring annual expense savings of $16.0 million beginning
in 2023.

Professional Liability, Excess Casualty, Environmental, and Middle Market
Property will be reported in the Exited Lines Segment. Any information
technology initiatives related to business lines within Exited Lines have been
discontinued.

Sale of Renewal Rights related to Farm, Ranch & Stable and Sale of American
Reliable Insurance Company.

On August 8, 2022, the Company sold the renewal rights related to its Farm,
Ranch & Stable business for policies written on or after August 8, 2022 to
Everett Cash Mutual Insurance Company for $30.0 million. The Company retained
the unearned premium reserves for business written prior to August 8, 2022.
Everett Cash Mutual Insurance Company also acquired the Company's wholly-owned
subsidiary, American Reliable Insurance Company, on December 31, 2022 for an
amount equal to book value, which was $10.0 million, at the time of closing.

Appointment of new Chief Executive Officer

Effective October 21, 2022, David S. Charlton, Chief Executive Officer, and Reiner R. Mauer, Chief Operations Officer, are no longer officers or directors
of Global Indemnity Group, LLC (including its subsidiaries).

Global Indemnity Group, LLC's Board of Directors appointed Joseph W. Brown as
its Chief Executive Officer. Mr. Brown has served as a Global Indemnity Group,
LLC director since December 2015 and will remain on Global Indemnity Group,
LLC's Board of Directors. Mr. Brown has close to 50 years of insurance industry
experience, including prior tenures as a Director, Chairman, and Chief Executive
Officer of MBIA, Inc. (NYSE: MBI), Chairman of the Board of Safeco, Chairman of
the Board of Talegen Holdings, Inc., Chairman of Noblr, Inc., and President and
Chief Executive Officer of Fireman's Fund Insurance Company.

Board of Directors

Effective October 21, 2022, Jason B. Hurwitz rejoined Global Indemnity Group,
LLC's Board of Directors. Mr. Hurwitz had previously served on Global Indemnity
Group, LLC's Board from September 2017 to January 2022. Mr. Hurwitz is a partner
with Osier Capital LLC, an investment firm focused on insurance and other
long-term investments. As a principal and advisor during his career, Mr. Hurwitz
completed 28 corporate acquisitions or divestitures totaling over $5 billion and
served on the Boards of Directors of eight of these companies. Mr. Hurwitz
joined Global Indemnity Group, LLC's Audit Committee.


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Effective November 1, 2022, Gary Tolman joined the Board of Directors of Global
Indemnity Group, LLC pursuant to the Class B Majority Shareholder's rights under
Global Indemnity Group, LLC's Second Amended and Restated Limited Liability
Company Agreement. Mr. Tolman has over 45 years of experience in the property
and casualty insurance and reinsurance industry. He was the chief executive
officer and co-founder of Noblr, Inc. and previously served as the chief
executive officer and president of Esurance Holdings, Inc. He also served as the
chairman of Answer Financial, Inc. and president and treasurer of Talegen
Holdings, Inc. Mr. Tolman spent 15 years at the Fireman's Fund Insurance
Company, ultimately serving as senior vice president. He previously served on
the board of directors of the White Mountains Insurance Group, Ltd. (NYSE: WTM).
Mr. Tolman is a member of the Audit Committee.

On November 1, 2022, James R. Holt, Jr. resigned from Global Indemnity Group,
LLC's Board of Directors by providing notice to Global Indemnity Group, LLC. Mr.
Holt's decision to resign was due to the time demands presented by his primary
commercial activities.

Effective December 16, 2022, Fred Donner joined the Board of Directors of Global
Indemnity Group, LLC pursuant to the Class B Majority Shareholder's rights under
GBLI's Second Amended and Restated Limited Liability Company Agreement. Mr.
Donner served as the Audit Committee chair and a member of the Risk & Capital
Committee of the Board of Directors of Argo Group International Holdings Ltd.
(NYSE:ARGO). Mr. Donner has nearly 40 years of insurance industry experience. He
previously served as the former Executive Vice President, Enterprise Risk
Management for Travelers Insurance Co. ("Travelers") (NYSE: TRV) and Chief
Financial Officer for its Business and International Insurance segment from 2014
until his retirement in 2017. Prior to that, Mr. Donner was Traveler's Senior
Vice President and Chief Financial Officer of its Personal Lines Insurance
segment and then the Chief Financial Officer and Chief Operating Officer of its
Business Insurance segment. Prior thereto, Mr. Donner served as Executive Vice
President and Chief Financial Officer of RenaissanceRe Ltd. (NYSE: RNR),
Bermuda-based international reinsurance company. Prior to that, Mr. Donner
served as the National Partner-in-Charge of KPMG's Insurance Practice. Mr.
Donner will serve on the Audit Committee and chair the Nomination, Compensation,
and Governance Committee and the Enterprise Risk Management Committee.

Stock Repurchase

On October 21, 2022, GBLI announced that it would commence a stock repurchase
program beginning in the fourth quarter of 2022. On January 3, 2023, Global
Indemnity Group, LLC announced that it had authorized an increase in the
aggregate stock purchase program from $32 million, which was authorized on
October 21, 2022, to $60 million. The authorization to repurchase will expire on
December 31, 2027. The timing and actual number of shares repurchased, if any,
will depend on a variety of factors, including price, general business and
market conditions, and alternative investment opportunities.

Under the repurchase program, repurchases may be made from time to time using a
variety of methods, including open market purchases or privately negotiated
transactions, all in compliance with Global Indemnity Group, LLC's Insider
Trading Policy, the United States Securities and Exchange Commission, and other
applicable legal requirements. The repurchase program does not obligate Global
Indemnity Group, LLC to acquire any particular amount of class A common shares,
and the repurchase program may be suspended or discontinued at any time at
Global Indemnity Group, LLC's discretion.

Through March 15, 2023, the Company repurchased 1,157,082 shares from third
parties under this program for an aggregate amount of $28.4 million, or $24.54
per share. As a result of these transactions, book value per share increased by
$1.44 per share.

Distributions

The Board of Directors approved a distribution payment of $0.25 per common share
to all shareholders of record on the close of business on March 21, 2022, June
20, 2022, October 4, 2022, and December 23, 2022. Distributions paid to common
shareholders were $14.4 million during the year ended December 31, 2022. In
addition, distributions of $0.4 million were paid to Global Indemnity Group,
LLC's preferred shareholder during the year ended December 31, 2022.

AM Best Rating

AM Best has seven Rating Categories in the AM Best Financial Strength Rating
Scale. The categories ranging from best to worst are Superior, Excellent, Good,
Fair, Marginal, Weak and Poor. Within each rating category, there are rating
notches of plus or minus to show additional gradation of the ratings. On May 19,
2022, AM Best affirmed the financial strength rating of "A" (Excellent) for the
U.S. operating subsidiaries of Global Indemnity Group, LLC.


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Redemption of Debt

On April 15, 2022, the Company redeemed the entire $130 million in aggregate
principal amount of the outstanding 7.875% Subordinated Notes due 2047 ("2047
Notes") plus accrued and unpaid interest on the 2047 Notes redeemed to, but not
including the Redemption Date of April 15, 2022. As a result of this redemption,
the Company no longer has any outstanding debt with third parties.


                                    Overview

The Company operates and manages its business through three business segments:
Commercial Specialty, Reinsurance Operations, and Exited Lines.

The Company's Commercial Specialty products are distributed through
approximately 360 wholesale general agent and wholesale broker offices. The
Company's wholesale general agents have limited quoting and binding authority.
Commercial Specialty operates predominantly in the excess and surplus lines
marketplace. Commercial Specialty offers specialty property and casualty
products designed for GBLI's Wholesale Commercial and InsurTech product
offerings.

The Company's Reinsurance Operations provides reinsurance and insurance
solutions through brokers and primary writers including insurance and
reinsurance companies. It uses its capital capacity to write niche and
casualty-focused treaties and business which meet the Company's risk tolerance
and return thresholds. Prior to the redomestication, the Company's Reinsurance
Operations consisted solely of the operations of Global Indemnity Reinsurance.
In connection with the redomestication, Global Indemnity Reinsurance merged into
Penn-Patriot Insurance Company and all of its business was assumed by the
Company's existing insurance company subsidiaries. To support growth in the
Company's Commercial Specialty segment and provide capital for business
initiatives including share repurchases, a decision was made to reduce writings
in its Reinsurance Operations. The Company anticipates that its Reinsurance
Operations will comprise a smaller percentage of the Company's overall business
prospectively.

The Company's Exited Lines segment represents lines of business that are no
longer being written or are in runoff. Exited Lines includes specialty personal
lines property and property and casualty products such as manufactured home,
dwelling, motorcycle, watercraft, certain homeowners business, property
brokerage, property and catastrophe reinsurance treaties, several smaller
casualty lines, and the farm, ranch and equine business. These insurance
products were distributed through wholesale general agents, wholesale brokers,
and retail agents.

The Company derives its revenues primarily from premiums paid on insurance
policies that it writes and from income generated by its investment portfolio,
net of fees paid for investment management services. The amount of insurance
premiums that the Company receives is a function of the amount and type of
policies it writes, as well as prevailing market prices.

The Company's expenses include losses and loss adjustment expenses, acquisition
costs and other underwriting expenses, corporate and other operating expenses,
interest, investment expenses, and income taxes. Losses and loss adjustment
expenses are estimated by management and reflect the Company's best estimate of
ultimate losses and costs arising during the reporting period and revisions of
prior period estimates. The Company records its best estimate of losses and loss
adjustment expenses considering both internal and external actuarial analyses of
the estimated losses the Company expects to incur on the insurance policies it
writes. The ultimate losses and loss adjustment expenses will depend on the
actual costs to resolve claims. Acquisition costs consist principally of
commissions and premium taxes that are typically a percentage of the premiums on
the insurance policies the Company writes, net of ceding commissions earned from
reinsurers. Other underwriting expenses consist primarily of personnel expenses
and general operating expenses related to underwriting activities. Corporate and
other operating expenses are comprised primarily of outside legal fees, other
professional and accounting fees, directors' fees, management fees & advisory
fees, and salaries and benefits for company personnel whose services relate to
the support of corporate activities. Interest expense is primarily comprised of
amounts due on outstanding debt.

                   Critical Accounting Estimates and Policies

The Company's consolidated financial statements are prepared in conformity with
GAAP, which require it to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. See Note 5 of the notes to consolidated financial statements
contained in Item 8 of Part II of this report. Actual results could differ from
those estimates and assumptions.

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The Company believes that of the Company's significant accounting policies, the
following may involve a higher degree of judgment and estimation.

Liability for Unpaid Losses and Loss Adjustment Expenses

Although variability is inherent in estimates, the Company believes that the
liability for unpaid losses and loss adjustment expenses reflects Management's
best estimate for future amounts needed to pay losses and related loss
adjustment expenses and the impact of its reinsurance coverage with respect to
insured events.

In developing losses and loss adjustment expense ("loss" or "losses") reserve
estimates, the Company's actuaries perform detailed reserve analyses each
quarter. To perform the analysis, the data is organized at a "reserve category"
level. A reserve category can be a line of business such as commercial
automobile liability, or it can be a particular type of claim such as
construction defect. The reserves within a reserve category level are
characterized as long-tail or short-tail. For long-tail business, it will
generally be several years between the time the business is written and the time
when all claims are settled. The Company's long-tail exposures include general
liability, professional liability, products liability, commercial automobile
liability, and excess and umbrella. Short-tail exposures include property,
commercial automobile physical damage, and equine mortality. The Company also
reviews assumed reinsurance segments each quarter by treaty and treaty year
which is comprised primarily of long-tailed business. To manage its Insurance
Operations, the Company's insurance products target specific, defined groups of
insureds with customized coverage to meet their needs. The primary business
divisions include Wholesale Commercial and InsurTech. For further discussion
about the Company's business divisions, see "General - Business Segments -
Insurance Operations" in Item 1 of Part I of this report. Each of the Company's
business divisions contain both long-tail and short-tail exposures. Every
reserve category is analyzed by the Company's actuaries each quarter. Management
is responsible for the final determination of loss reserve selections.

In addition to the Company's internal reserve analysis, independent external
actuaries perform a full, detailed review of the reserves annually. The Company
reviews both the internal and external actuarial analyses in determining its
reserve position.

The actuarial methods used to project ultimate losses for both long-tail and
short-tail reserve categories include, but are not limited to, the following:

•
Paid Development method;

•

Incurred Development method;

•

Expected Loss Ratio method;

•

Bornhuetter-Ferguson method using premiums and paid loss;

•

Bornhuetter-Ferguson method using premiums and incurred loss; and

•

Average Loss method.

The Paid Development method estimates ultimate losses by reviewing paid loss
patterns and applying them to accident years with further expected changes in
paid loss. Selection of the paid loss pattern requires analysis of several
factors including the impact of inflation on claims costs, the rate at which
claims professionals make claim payments and close claims, the impact of
judicial decisions, the impact of underwriting changes, the impact of large
claim payments, and other factors. Claim cost inflation requires evaluation of
changes in the cost of repairing or replacing property, changes in the cost of
medical care, changes in the cost of wage replacement, judicial decisions,
legislative changes, and other factors. Because this method assumes that losses
are paid at a consistent rate, changes in any of these factors can impact the
results. Since the method does not rely on case reserves, it is not directly
influenced by changes in the adequacy of case reserves.

For many reserve categories, paid loss data for recent periods may be too
immature or erratic for reliable loss projections. This situation often exists
for long-tail exposures. In addition, changes in the factors described above may
result in inconsistent payment patterns. Finally, estimating the paid loss
pattern subsequent to the most mature point available in the data analyzed often
involves considerable uncertainty for long-tail reserve categories.

The Incurred Development method is similar to the Paid Development method, but
it uses case incurred losses instead of paid losses. Since this method uses more
data (case reserves in addition to paid losses) than the Paid Development
method, the incurred development patterns may be less variable than paid
development patterns. However, selection of the incurred loss pattern requires
analysis of all of the factors listed in the description of the Paid Development
method. In addition, the

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inclusion of case reserves can lead to distortions if changes in case reserving
practices have taken place and the use of case incurred losses may not eliminate
the issues associated with estimating the incurred loss pattern subsequent to
the most mature point available.

The Expected Loss Ratio method multiplies premiums by an expected loss ratio to
produce ultimate loss estimates for each accident year. This method may be
useful if loss development patterns are inconsistent, losses emerge very slowly,
or there is relatively little loss history from which to estimate future losses.
The selection of the expected loss ratio requires analysis of loss ratios from
earlier accident years or pricing studies and analysis of inflationary trends,
frequency trends, rate changes, underwriting changes, and other applicable
factors.

The Bornhuetter-Ferguson method using premiums and paid losses is a combination
of the Paid Development method and the Expected Loss Ratio method. This method
normally determines expected loss ratios similar to the method used for the
Expected Loss Ratio method and requires analysis of the same factors described
above. The method assumes that only future losses will develop at the expected
loss ratio level. The percent of paid loss to ultimate loss implied from the
Paid Development method is used to determine what percentage of ultimate loss is
yet to be paid. The use of the pattern from the Paid Development method requires
consideration of all factors listed in the description of the Paid Development
method. The estimate of losses yet to be paid is added to current paid losses to
estimate the ultimate loss for each accident year. This method will react very
slowly if actual ultimate loss ratios are different from expectations due to
changes not accounted for by the Expected Loss Ratio calculation.

The Bornhuetter-Ferguson method using premiums and incurred losses is similar to
the Bornhuetter-Ferguson method using premiums and paid losses except that it
uses case incurred losses. The use of case incurred losses instead of paid
losses can result in development patterns that are less variable than paid
development patterns. However, the inclusion of case reserves can lead to
distortions if changes in case reserving practices have taken place. The method
requires analysis of all the factors that need to be reviewed for the Expected
Loss Ratio and Incurred Development methods.

The Average Loss method multiplies a projected number of ultimate incurred
claims by an estimated ultimate average loss for each accident year to produce
ultimate loss estimates. Since projections of the ultimate number of claims are
often less variable than projections of ultimate loss, this method can provide
more reliable results for reserve categories where loss development patterns are
inconsistent or too variable to be relied on exclusively. In addition, this
method can more directly account for changes in coverage that impact the number
and size of claims. However, this method can be difficult to apply to situations
where very large claims or a substantial number of unusual claims result in
volatile average claim sizes. Projecting the ultimate number of claims requires
analysis of several factors including the rate at which policyholders report
claims to the Company, the impact of judicial decisions, the impact of
underwriting changes, and other factors. Estimating the ultimate average loss
requires analysis of the impact of large losses and claim cost trends based on
changes in the cost of repairing or replacing property, changes in the cost of
medical care, changes in the cost of wage replacement, judicial decisions,
legislative changes, and other factors.

For many reserve categories, especially those that can be considered long-tail,
a particular accident year may not have a sufficient volume of paid losses to
produce a statistically reliable estimate of ultimate losses. In such a case,
the Company's actuaries typically assign more weight to the Incurred Development
method than to the Paid Development method. As claims continue to settle and the
volume of paid losses increases, the Company's actuaries may assign additional
weight to the Paid Development method. For most of the Company's reserve
categories, even the case incurred losses for accident years that are early in
the claim settlement process will not be of sufficient volume to produce a
reliable estimate of ultimate losses. In these cases, the Company's actuaries
will not assign any weight to the Paid and Incurred Development methods and will
use the Bornhuetter-Ferguson and Expected Loss Ratio methods. For short-tail
exposures, the Paid and Incurred Development methods can often be relied on
sooner primarily because the Company's history includes a sufficient number of
accident years to cover the entire period over which paid and incurred losses
are expected to change. However, the Company's actuaries may also assign weights
to the Expected Loss Ratio, Bornhuetter-Ferguson, and Average Loss methods for
short-tail exposures when developing estimates of ultimate losses.

Generally, reserves for long-tail lines give more weight to the Expected Loss
Ratio method in the more recent immature years. As the accident years mature,
weight shifts to the Bornhuetter-Ferguson methods and eventually to the Incurred
and/or Paid Development method. Claims related to umbrella business are usually
reported later than claims for other long-tail lines. For umbrella business, the
shift from the Expected Loss Ratio method to the Bornhuetter-Ferguson methods to
the Loss Development method may be more protracted than for most long-tailed
lines. Reserves for short-tail lines tend to make the shift across methods more
quickly than the long-tail lines.

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For other more complex reserve categories where the above methods may not
produce reliable indications, the Company's actuaries uses additional methods
tailored to the characteristics of the specific situation. Such reserve
categories include losses from construction defect and A&E claims.

For construction defect losses, the Company's actuaries organize losses by the
year in which they were reported to develop an IBNR provision for development on
known cases. To estimate losses from claims that have occurred but have not yet
been reported to the Company ("pure IBNR"), various extrapolation techniques are
applied to the pattern of claims that have been reported to estimate the number
of claims yet to be reported. This process requires analysis of several factors
including the rate at which policyholders report claims to the Company, the
impact of judicial decisions, the impact of underwriting changes, and other
factors. An estimated average claim size is determined from past experience and
applied to the estimated number of unreported claims to estimate reserves for
these claims.

Establishing reserves for A&E and other mass tort claims involves considerably
more judgment than other types of claims due to factors including, but not
limited to, inconsistent court decisions, bankruptcy filings as a result of
asbestos-related liabilities, and judicial interpretations that often expand
theories of recovery and broaden the scope of coverage. The insurance industry
continues to receive a substantial number of asbestos-related bodily injury
claims, with an increasing focus being directed toward other parties, including
installers of products containing asbestos rather than against asbestos
manufacturers. This shift has resulted in significant insurance coverage
litigation implicating applicable coverage defenses or determinations, if any,
including but not limited to, determinations as to whether or not an
asbestos-related bodily injury claim is subject to aggregate limits of liability
found in most comprehensive general liability policies. The Company continues to
closely monitor its asbestos exposure and make adjustments where they are
warranted.

Reserve analyses performed by the Company's internal and external actuaries
result in actuarial point estimates. The results of the detailed reserve reviews
were summarized and discussed with the Company's senior management to determine
management's best estimate of reserves. Management considered many factors in
making this decision. The factors included, but were not limited to, the
historical pattern and volatility of the actuarial indications, the sensitivity
of the actuarial indications to changes in paid and incurred loss patterns, the
consistency of claims handling processes, the consistency of case reserving
practices, changes in the Company's pricing and underwriting, and overall
pricing and underwriting trends in the insurance market.

Management's best estimate at December 31, 2022 was recorded as the loss
reserve. Management's best estimate is as of a particular point in time and is
based upon known facts, the Company's actuarial analyses, current law, and the
Company's judgment. This resulted in carried gross and net reserves of $832.4
million and $759.4 million, respectively, as of December 31, 2022. A breakout of
the Company's gross and net reserves as of December 31, 2022 is as follows:

                                    Gross Reserves

(Dollars in thousands) Case IBNR (1) Total
Commercial Specialty $ 169,316 $ 328,786 $ 498,102
Reinsurance Operations 9,419 170,784 180,203
Exited Lines

                72,338        81,761       154,099
Total                    $ 251,073     $ 581,331     $ 832,404



                                   Net Reserves (2)

(Dollars in thousands) Case IBNR (1) Total
Commercial Specialty $ 148,901 $ 298,019 $ 446,920
Reinsurance Operations 9,419 170,784 180,203
Exited Lines

                55,783        76,477       132,260
Total                    $ 214,103     $ 545,280     $ 759,383



(1)
Losses incurred but not reported, including the expected future emergence of
case reserves.
(2)
Does not include reinsurance receivables on paid losses.

The Company regularly reviews these estimates and, based on new developments and
information, includes adjustments of the estimated ultimate liability in the
operating results for the periods in which the adjustments are made. The
establishment of losses and loss adjustment expense reserves makes no provision
for the possible broadening of coverage by legislative action or judicial
interpretation, or the emergence of new types of losses not sufficiently
represented in the Company's historical experience or that cannot yet be
quantified or estimated. The Company regularly analyzes its reserves and reviews
reserving methodologies so that future adjustments to prior accident year
reserves can be minimized. However, given the complexity of this process,
reserves require continual updates and the ultimate liability may be higher or
lower than previously indicated. Changes in estimates for losses and loss
adjustment expense reserves are recorded in the period that the

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change in these estimates is made. See Note 13 to the consolidated financial
statements in Item 8 of Part II of this report for details concerning the
changes in the estimate for incurred losses and loss adjustment expenses related
to prior accident years.

The detailed reserve analyses that the Company's internal and external actuaries
complete use a variety of generally accepted actuarial methods and techniques to
produce a number of estimates of ultimate loss. The Company determines its best
estimate of ultimate loss by reviewing the various estimates provided by its
actuaries and other relevant information. The reserve estimate is the difference
between the estimated ultimate loss and the losses paid to date. The difference
between the estimated ultimate loss and the case incurred loss (paid loss plus
case reserve) is considered to be IBNR. IBNR calculated as such includes a
provision for IBNER, or development on known cases as well as a provision for
pure IBNR, or claims that have occurred but have not yet been reported to the
Company.

In light of the many uncertainties associated with establishing the estimates
and making the assumptions necessary to establish reserve levels, the Company
reviews its reserve estimates on a regular basis and makes adjustments in the
period that the need for such adjustments is determined.

The key assumptions fundamental to the reserving process are often different for
various reserve categories and accident years. Some of these assumptions are
explicit assumptions that are required of a particular method, but most of the
assumptions are implicit and cannot be precisely quantified. An example of an
explicit assumption is the pattern employed in the Paid Development method.
However, the assumed pattern is itself based on several implicit assumptions
such as the impact of inflation on medical costs and the rate at which claim
professionals close claims. Loss frequency is a measure of the number of claims
per unit of insured exposure, and loss severity is a measure of the average size
of claims. Each reserve category has an implicit frequency and severity for each
accident year as a result of the various assumptions made.

Previous reserve analyses have resulted in the Company's identification of
information and trends that have caused it to increase or decrease frequency and
severity assumptions in prior periods and could lead to the identification of a
need for additional material changes in losses and loss adjustment expense
reserves, which could materially affect results of operations, equity, business
and insurer financial strength and debt ratings. Factors affecting loss
frequency include, but are not limited to, the effectiveness of loss controls
and safety programs and changes in economic activity or weather patterns.
Factors affecting loss severity include, but are not limited to, changes in
policy limits and deductibles, rate of inflation, and judicial interpretations.
Another factor affecting estimates of loss frequency and severity is the loss
reporting lag, which is the period of time between the occurrence of a loss and
the date the loss is reported to the Company. The length of the loss reporting
lag affects the Company's ability to accurately predict loss frequency (loss
frequencies are more predictable for short-tail lines) as well as the amount of
reserves needed for IBNR.

If the actual levels of loss frequency and severity are higher or lower than
expected, the ultimate losses will be different than management's best estimate.
For most of its reserve categories, the Company believes that frequency can be
predicted with greater accuracy than severity. Therefore, the Company believes
management's best estimate is more likely influenced by changes in severity than
frequency. The following table, which the Company believes reflects a reasonable
range of variability around its best estimate based on historical loss
experience and management's judgment, reflects the impact of changes (which
could be favorable or unfavorable) in frequency and severity on the Company's
current accident year net loss estimate of $367.3 million for claims occurring
during the year ended December 31, 2022:

                                                       Severity Change
(Dollars in thousands)           -10%           -5%           0%            5%          10%
Frequency Change         -5%   $ (53,258 )   $ (35,812 )   $ (18,365 )   $   (918 )   $ 16,528
                         -3%     (46,647 )     (28,833 )     (11,019 )      6,795       24,609
                         -2%     (43,341 )     (25,344 )      (7,346 )     10,652       28,649
                         -1%     (40,036 )     (21,854 )      (3,673 )     14,508       32,690
                         0%      (36,730 )     (18,365 )           -       18,365       36,730
                         1%      (33,424 )     (14,876 )       3,673       22,222       40,770
                         2%      (30,119 )     (11,386 )       7,346       26,078       44,810
                         3%      (26,813 )      (7,897 )      11,019       29,935       48,851
                         5%      (20,201 )        (918 )      18,365       37,648       56,931



The Company's net reserves for losses and loss adjustment expenses of $759.4
million as of December 31, 2022 relate to multiple accident years. Therefore,
the impact of changes in frequency and severity for more than one accident year
could be higher or lower than the amounts reflected above.

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Recoverability of Reinsurance Receivables

The Company regularly reviews the collectability of its reinsurance receivables,
and includes adjustments resulting from this review in earnings in the period in
which the adjustment arises. An allowance for expected credit losses for
reinsurance receivables is recognized based upon the Company's ongoing review of
key aspects of amounts outstanding, including but not limited to, length of
collection periods, disputes, applicable coverage defenses, insolvent
reinsurers, financial strength of solvent reinsurers based on AM Best Ratings
and other relevant factors. Changes in loss reserves can also affect the
valuation of reinsurance receivables if the change is related to loss reserves
that are ceded to reinsurers. Certain amounts may be uncollectible if the
Company's reinsurers dispute a loss or if the reinsurer is unable to pay. If its
reinsurers do not pay, the Company remains legally obligated to pay the loss.

See Note 11 of the notes to consolidated financial statements in Item 8 of Part
II of this report for further information surrounding the Company's reinsurance
receivable balances and collectability as of December 31, 2022 and 2021. For a
listing of the ten reinsurers for which the Company has the largest reinsurance
asset amounts as of December 31, 2022, see "Reinsurance of Underwriting Risk" in
Item 1 of Part I of this report.

Investments

The carrying amount of the Company's investments approximates their fair value.
The Company regularly performs various analytical valuation procedures with
respect to investments, including reviewing each fixed maturity security in an
unrealized loss position to determine whether the decline in fair value below
amortized cost basis has resulted from a credit loss or other factors, such as
changes in interest rates. In assessing whether a credit loss exists, the
Company compares the present value of the cash flows expected to be collected
from the security to the amortized cost basis of the security. If the present
value of the cash flows expected to be collected is less than the amortized cost
basis of the security, a credit loss exists and an allowance for expected credit
losses is recorded. Subsequent changes in the allowances are recorded in the
period of change as either credit loss expense or reversal of credit loss
expense. Any impairments related to factors other than credit losses or the
intent to sell are recorded through other comprehensive income, net of taxes.
During its review, the Company considers credit rating, market price, and issuer
specific financial information, among other factors, to assess the likelihood of
collection of all principal and interest as contractually due. See Note 6 of the
notes to consolidated financial statements in Item 8 of Part II of this report
for the specific methodologies and significant assumptions used by asset class
as well as an analysis of the Company's securities with gross unrealized losses
as of December 31, 2022 and 2021.

Fair Value Measurements

The Company categorizes its invested assets and derivative instruments that are
accounted for at fair value in the consolidated statements into a fair value
hierarchy. The fair value hierarchy is directly related to the amount of
subjectivity associated with the inputs utilized to determine the fair value of
these assets. The reported value of financial instruments not carried at fair
value, principally cash and cash equivalents and margin borrowing facility,
approximate fair value. See Note 8 of the notes to the consolidated financial
statements in Item 8 of Part II of this report for further information about the
fair value hierarchy and the Company's assets that are accounted for at fair
value.

Goodwill and Intangible Assets

The Company tests for impairment of goodwill at least annually and more
frequently as circumstances warrant in accordance with applicable accounting
guidance. Accounting guidance allows for the testing of goodwill for impairment
using both qualitative and quantitative factors. Impairment of goodwill is
recognized only if the carrying amount of the reporting unit, including
goodwill, exceeds the fair value of the reporting unit. The amount of the
impairment loss would be equal to the excess carrying value of the goodwill over
the implied fair value of the reporting unit goodwill.

Impairment of intangible assets with indefinite useful lives is tested at least
annually and more frequently as circumstances warrant in accordance with
applicable accounting guidance. Accounting guidance allows for the testing of
intangible assets for impairment using both qualitative and quantitative
factors. Impairment of indefinite lived intangible assets is recognized only if
the carrying amount of the intangible assets exceeds the fair value of said
assets. The amount of the impairment loss would be equal to the excess carrying
value of the assets over the fair value of said assets.

Intangible assets that are not deemed to have an indefinite useful life are
amortized over their estimated useful lives. The carrying amounts of definite
lived intangible assets are regularly reviewed for indicators of impairment in
accordance with applicable accounting guidance. Impairment is recognized only if
the carrying amount of the intangible asset is in excess of its undiscounted
projected cash flows. The impairment is measured as the difference between the
carrying amount and the estimated fair value of the asset.

                                       44
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See Note 9 of the notes to the consolidated financial statements in Item 8 of
Part II of this report for more details concerning the Company's goodwill and
intangible assets as well as the result of its impairment testing.

Deferred Acquisition Costs

The costs of acquiring new and renewal insurance and reinsurance contracts
primarily include commissions, premium taxes and certain other costs that are
directly related to the successful acquisition of new and renewal insurance and
reinsurance contracts. The excess of the Company's costs of acquiring new and
renewal insurance and reinsurance contracts over the related ceding commissions
earned from reinsurers is capitalized as deferred acquisition costs and
amortized over the period in which the related premiums are earned.

In accordance with accounting guidance for insurance enterprises, the method
followed in computing such amounts limits them to amounts recoverable from
premium to be earned, related investment income, losses and loss adjustment
expenses, and certain other costs expected to be incurred as the premium is
earned. A premium deficiency is recognized if the sum of expected losses and
loss adjustment expenses and unamortized acquisition costs exceeds related
unearned premium. This evaluation is done at a distribution and product line
level for Insurance Operations and Exited Lines and at a treaty level for
Reinsurance Operations. Any future expected loss on the related unearned premium
is recorded first by impairing the unamortized acquisition costs on the related
unearned premium followed by an increase to losses and loss adjustment expense
reserves on additional expected loss in excess of unamortized acquisition costs.
The Company calculates deferred acquisition costs for Insurance Operations and
Exited Lines separately by distribution lines and for its Reinsurance Operations
separately for each treaty.

Taxation

The Company provides for income taxes in accordance with applicable accounting
guidance. The Company's deferred tax assets and liabilities primarily result
from temporary differences between the amounts recorded in the consolidated
financial statements and the tax basis of the Company's assets and liabilities.

At each balance sheet date, management assesses the need to establish a
valuation allowance that reduces deferred tax assets when it is more likely than
not that all, or some portion, of the deferred tax assets will not be realized.
A valuation allowance would be based on all available information including the
Company's assessment of uncertain tax positions and projections of future
taxable income from each tax-paying component in each jurisdiction, principally
derived from business plans and available tax planning strategies.

As of December 31, 2022, the Company had a deferred tax asset of approximately
$10.6 million related to net unrealized losses on a fixed maturity available for
sale securities. In the assessment of the future realizability of this deferred
tax asset, management considered tax planning strategies and concluded that
unrealized losses were caused by factors other than credit loss, and the Company
have the intent and ability to hold these securities to recovery and collect all
of the contractual cash flows.

There are no valuation allowances as of December 31, 2022 and 2021. The deferred
tax asset balance is analyzed regularly by management. This assessment requires
significant judgment and considers, among other matters, the nature, frequency
and severity of current and cumulative losses, forecasts of future
profitability, the duration of carryforward periods, and tax planning strategies
and/or actions. Based on these analyses, the Company has determined that its
deferred tax asset is recoverable. Projections of future taxable income
incorporate several assumptions of future business and operations that are apt
to differ from actual experience. If, in the future, the Company's assumptions
and estimates that resulted in the forecast of future taxable income for each
tax-paying component prove to be incorrect, a valuation allowance may be
required. This could have a material adverse effect on the Company's financial
condition, results of operations, and liquidity.

The Company applies a more likely than not recognition threshold for all tax
uncertainties, only allowing the recognition of those tax benefits that have a
greater than 50% likelihood of being sustained upon examination by relevant
taxing authorities. Please see Note 12 of the notes to the consolidated
financial statements in Item 8 of Part II of this report for a discussion of the
Company's tax uncertainties.

Leases

The Company determines if an arrangement is a lease at inception. Leases with a
term of 12 months or less are not recorded on the consolidated balance sheets.
Lease right-of-use assets ("ROU") and lease liabilities are included on the
consolidated balance sheets.


                                       45
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Lease ROU assets and lease liabilities are recognized based on the present value
of the future minimum lease payments over the lease term at the commencement
date. The Company's leases do not provide an implicit rate; therefore, the
Company uses its incremental borrowing rate at the commencement date in
determining the present value of future payments. The ROU asset is calculated
using the initial lease liability amount, plus any lease payments made at or
before the commencement date, minus any lease incentives received, plus any
initial direct costs incurred. Lease expenses for minimum lease payments are
recognized on a straight-line basis over the lease term.

The Company's lease agreements may contain both lease and non-lease components
which are accounted separately. The Company elected the practical expedient on
not separating lease components from non-lease components for its equipment
leases.

Rental income derived from subleases are recognized on a straight-line basis
over the operating lease term.

                                       46
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                               Business Segments

The Company manages its business through two ongoing business segments:
Commercial Specialty and Reinsurance Operations. The Commercial Specialty
segment comprises the Company's Insurance Operations, which currently includes
the operations of United National Insurance Company, Diamond State Insurance
Company, Penn-America Insurance Company, Penn-Star Insurance Company,
Penn-Patriot Insurance Company, American Insurance Adjustment Agency, Inc.,
Collectibles Insurance Services, LLC, Global Indemnity Insurance Agency, LLC,
and J.H. Ferguson & Associates, LLC. Prior to the redomestication, the Company's
Reinsurance Operations consisted solely of the operations of Global Indemnity
Reinsurance. In connection with the redomestication, Global Indemnity
Reinsurance merged into Penn-Patriot Insurance Company and all of its business
was assumed by the Company's existing insurance company subsidiaries. In
addition, the Company also has an Exited Lines segment that contains lines of
business that are no longer being written or are in runoff.

The Company evaluates the performance of these segments based on gross and net
written premiums, revenues in the form of net earned premiums, and expenses in
the form of (1) net losses and loss adjustment expenses, (2) acquisition costs,
and (3) other underwriting expenses.

During the fourth quarter of 2022, the Company decided to restructure its
insurance operations in an effort to strengthen its market presence and enhance
its focus on GBLI's core Wholesale Commercial and InsurTech products. As a
result, the Company will be exiting its four brokerage divisions: Professional
Liability, Excess Casualty, Environmental, and Middle Market Property. The
Company will cease writing new business and existing renewals will be placed in
run-off for these four divisions. On August 8, 2022, the Company sold the
renewal rights related to its Farm, Ranch & Stable business for policies written
on or after August 8, 2022 to Everett Cash Mutual Insurance Company. During the
2nd quarter of 2022, the Company decided that Farm, Ranch & Stable would not be
a core business and a decision was made to not allocate additional resources to
this segment. Previously, on October 26, 2021, the Company sold the renewal
rights related to its manufactured and dwelling homes business which were part
of the Specialty Property segment. In 2021, the Company decided to cease writing
certain Property Brokerage business which was part of the Commercial Specialty
segment, as well as exit certain property and catastrophe lines within the
Reinsurance Operations segment. In the fourth quarter of 2022, the Company also
decided it will reduce writings within its Reinsurance Operations segment. Based
on the decisions to exit or downsize these lines of business, the Company
changed the way it manages and analyzes its operating results. The chief
operating decision makers decided they will be reviewing the specific results of
the Exited Lines in a separate segment. The chief operating decision makers also
determined that the small amount of specialty property business that remained
from the Specialty Property segment would be included as a product offering in
the Commercial Specialty segment for purpose of reviewing results and allocating
resources. Several smaller reinsurance treaties have also been reclassified from
Reinsurance to Commercial Specialty. The Reinsurance Operations segment writes
casualty treaties as well as individual excess policies. Accordingly, the
Company has three reportable segments: Commercial Specialty, Reinsurance
Operations, and Exited Lines. Management believes these segments allow users of
the Company's financial statements to better understand the Company's
performance, better assess prospects for future net cash flows, and make more
informed judgments about the Company as a whole. The segment results for the
years ended December 31, 2021 and 2020 have been revised to reflect these
changes.

See "Business Segments" in Item 1 of Part I of this report for a description of
the Company's segments.

                                       47
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                             Results of Operations

The following table summarizes the Company's results for the years ended
December 31, 2022, 2021, and 2020:

                                    Years Ended                               Years Ended
                                   December 31,              %               December 31,              %
(Dollars in thousands)          2022          2021         Change         2021          2020         Change
Gross written premiums        $ 727,603     $ 682,122          6.7 %    $ 682,122     $ 606,603         12.4 %
Net written premiums          $ 591,331     $ 580,068          1.9 %    $ 580,068     $ 548,167          5.8 %

Net earned premiums           $ 602,471     $ 595,610          1.2 %    $ 595,610     $ 567,699          4.9 %
Other income                      1,462         1,815        (19.4 %)       1,815         2,038        (10.9 %)
Total revenues                  603,933       597,425          1.1 %      597,425       569,737          4.9 %
Losses and expenses:
Net losses and loss
adjustment expenses             359,228       384,964         (6.7 %)     384,964       336,201         14.5 %
Acquisition costs and other
underwriting expenses           236,381       222,841          6.1 %      222,841       215,607          3.4 %
Underwriting income (loss)        8,324       (10,380 )     (180.2 %)     (10,380 )      17,929       (157.9 %)
Net investment income            27,627        37,020        (25.4 %)      37,020        28,392         30.4 %
Net realized investment
gains (losses)                  (32,929 )      15,887           NM         15,887       (14,662 )     (208.4 %)
Other income                     29,903        27,936          7.0 %       27,936            80           NM
Corporate and other
operating expenses              (24,421 )     (27,179 )      (10.1 %)     (27,179 )     (41,998 )      (35.3 %)
Interest expense                 (3,004 )     (10,481 )      (71.3 %)     (10,481 )     (15,792 )      (33.6 %)
Loss on extinguishment of
debt                             (3,529 )           -           NM              -        (3,060 )         NM
Income (loss) before income
taxes                             1,971        32,803        (94.0 %)      32,803       (29,111 )     (212.7 %)
Income tax (expense)
benefit                          (2,821 )      (3,449 )      (18.2 %)      (3,449 )       8,105       (142.6 %)
Net income (loss)             $    (850 )   $  29,354       (102.9 %)   $  29,354     $ (21,006 )     (239.7 %)
Underwriting Ratios:
Loss ratio (1)                     59.6 %        64.7 %                      64.7 %        59.2 %
Expense ratio (2)                  39.2 %        37.4 %                      37.4 %        38.0 %
Combined ratio (3)                 98.8 %       102.1 %                     102.1 %        97.2 %



NM - not meaningful

(1)
The loss ratio is a GAAP financial measure that is generally viewed in the
insurance industry as an indicator of underwriting profitability and is
calculated by dividing net losses and loss adjustment expenses by net earned
premiums.
(2)
The expense ratio is a GAAP financial measure that is calculated by dividing the
sum of acquisition costs and other underwriting expenses by net earned premiums.
(3)
The combined ratio is a GAAP financial measure and is the sum of the Company's
loss and expense ratios.

                                       48
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Selected Financial Data by Business Segment

The following table summarizes selected financial data by business segment.

                                                       Years Ended December 31,
(Dollars in thousands)               2022          2021          2020          2019          2018
Gross written premiums (1)
Commercial Specialty               $ 401,025     $ 373,552     $ 310,354     $ 280,472     $ 221,869
Reinsurance Operations (3)           158,711       103,690        55,616        34,837         6,915
Continuing Lines                     559,736       477,242       365,970       315,309       228,784
Exited Lines                         167,867       204,880       240,633       321,552       319,113
Total gross written premiums       $ 727,603     $ 682,122     $ 606,603     $ 636,861     $ 547,897
Ceded premiums written
Commercial Specialty               $  17,343     $  20,447     $  21,609     $  19,998     $  15,873
Reinsurance Operations (3)                 -             -             -             -             -
Continuing Lines                      17,343        20,447        21,609        19,998        15,873
Exited Lines                         118,929        81,607        36,827        54,774        59,477
Total ceded premiums written       $ 136,272     $ 102,054     $  58,436     $  74,772     $  75,350
Net written premiums (2)
Commercial Specialty               $ 383,682     $ 353,105     $ 288,745     $ 260,474     $ 205,996
Reinsurance Operations (3)           158,711       103,690        55,616        34,837         6,915
Continuing Lines                     542,393       456,795       344,361       295,311       212,911
Exited Lines                          48,938       123,273       203,806       266,778       259,636
Total net written premiums         $ 591,331     $ 580,068     $ 548,167     $ 562,089     $ 472,547
Net earned premiums
Commercial Specialty               $ 377,953     $ 331,503     $ 277,892     $ 234,064     $ 197,085
Reinsurance Operations (3)           141,287        76,663        46,105        19,154         6,172
Continuing Lines                     519,240       408,166       323,997       253,218       203,257
Exited Lines                          83,231       187,444       243,702       272,044       264,518
Total net earned premiums          $ 602,471     $ 595,610     $ 567,699     $ 525,262     $ 467,775
Underwriting income (loss)
Commercial Specialty               $  12,122     $   9,478     $  35,712     $  41,718     $  14,163
Reinsurance Operations (3)             4,099         1,806         1,430         3,061          (490 )
Continuing Lines                      16,221        11,284        37,142        44,779        13,673
Exited Lines                          (7,897 )     (21,664 )     (19,213 )      (1,506 )     (69,577 )
Total underwriting income (loss)   $   8,324     $ (10,380 )   $  17,929     $  43,273     $ (55,904 )



(1)
Gross written premiums represent the amount received or to be received for
insurance policies written without reduction for reinsurance costs or other
deductions.
(2)
Net written premiums equal gross written premiums less ceded premiums written.
(3)
External business only, excluding business assumed from affiliates.

                                       49
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                                        Years Ended December 31,
Loss ratio                2022        2021        2020        2019        2018
Commercial Specialty        59.6 %      61.0 %      50.5 %      41.4 %      51.9 %
Reinsurance Operations      60.4 %      62.7 %      62.3 %      56.8 %      90.3 %
Continuing Lines            59.9 %      61.3 %      52.2 %      42.5 %      53.0 %
Exited Lines                58.2 %      71.9 %      68.6 %      61.6 %      85.8 %
Total loss ratio            59.6 %      64.7 %      59.2 %      52.5 %      71.5 %
Expense ratio
Commercial Specialty        37.4 %      36.5 %      36.9 %      41.2 %      41.3 %
Reinsurance Operations      36.6 %      34.8 %      35.0 %      26.5 %      14.2 %
Continuing Lines            37.2 %      36.2 %      36.7 %      40.1 %      40.5 %
Exited Lines                51.9 %      40.2 %      39.7 %      39.3 %      41.0 %
Total expense ratio         39.2 %      37.4 %      38.0 %      39.7 %      40.8 %
Combined ratio
Commercial Specialty        97.0 %      97.5 %      87.4 %      82.6 %      93.2 %
Reinsurance Operations      97.0 %      97.5 %      97.3 %      83.3 %     104.5 %
Continuing Lines            97.1 %      97.5 %      88.9 %      82.6 %      93.5 %
Exited Lines               110.1 %     112.1 %     108.3 %     100.9 %     126.8 %
Total combined ratio        98.8 %     102.1 %      97.2 %      92.2 %     112.3 %


Premiums

The following table summarizes the change in premium volume by business segment:

                                     Years Ended                              Years Ended
                                    December 31,              %              December 31,              %
(Dollars in thousands)           2022          2021        Change         2021          2020        Change

Gross written premiums (1)
Commercial Specialty           $ 401,025     $ 373,552         7.4 %    $ 373,552     $ 310,354        20.4 %
Reinsurance Operations (3)       158,711       103,690        53.1 %      103,690        55,616        86.4 %
Continuing Lines                 559,736       477,242        17.3 %      477,242       365,970        30.4 %
Exited Lines                     167,867       204,880       (18.1 %)     204,880       240,633       (14.9 %)
Total gross written premiums   $ 727,603     $ 682,122         6.7 %    $ 682,122     $ 606,603        12.4 %
Ceded premiums written
Commercial Specialty           $  17,343     $  20,447       (15.2 %)   $  20,447     $  21,609        (5.4 %)
Reinsurance Operations (3)             -             -           -              -             -           -
Continuing Lines                  17,343        20,447       (15.2 %)      20,447        21,609        (5.4 %)
Exited Lines                     118,929        81,607        45.7 %       81,607        36,827       121.6 %
Total ceded premiums written   $ 136,272     $ 102,054        33.5 %    $ 102,054     $  58,436        74.6 %
Net written premiums (2)
Commercial Specialty           $ 383,682     $ 353,105         8.7 %    $ 353,105     $ 288,745        22.3 %
Reinsurance Operations (3)       158,711       103,690        53.1 %      103,690        55,616        86.4 %
Continuing Lines                 542,393       456,795        18.7 %      456,795       344,361        32.7 %
Exited Lines                      48,938       123,273       (60.3 %)     123,273       203,806       (39.5 %)
Total net written premiums     $ 591,331     $ 580,068         1.9 %    $ 580,068     $ 548,167         5.8 %
Net earned premiums
Commercial Specialty           $ 377,953     $ 331,503        14.0 %    $ 331,503     $ 277,892        19.3 %
Reinsurance Operations (3)       141,287        76,663        84.3 %       76,663        46,105        66.3 %
Continuing Lines                 519,240       408,166        27.2 %      408,166       323,997        26.0 %
Exited Lines                      83,231       187,444       (55.6 %)     187,444       243,702       (23.1 %)
Total net earned premiums      $ 602,471     $ 595,610         1.2 %    $ 595,610     $ 567,699         4.9 %



(1)
Gross written premiums represent the amount received or to be received for
insurance policies written without reduction for reinsurance costs or other
deductions.
(2)
Net written premiums equal gross written premiums less ceded premiums written.
(3)
External business only, excluding business assumed from affiliates.

Gross written premiums increased by 6.7% for year ended December 31, 2022 as
compared to 2021. The increase in gross written premiums is mainly due to the
continued growth of existing wholesale agent relationships and increased pricing
from

                                       50
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both rate and exposure growth within Commercial Specialty and the organic growth
of existing casualty treaties within Reinsurance Operations. This increase was
partially offset by actions taken within Commercial Specialty to improve
underwriting results by not renewing underperforming business as well as a
reduction in premiums within Exited Lines.

Gross written premiums increased by 12.4% for year ended December 31, 2021 as
compared to 2020. The increase in gross written premiums is mainly due to the
continued growth from existing wholesale agent relationships, increased pricing,
and several new wholesale agent relationships within Commercial Specialty as
well as the organic growth of an existing casualty treaty within Reinsurance
Operations. This growth in premiums was partially offset by the reduction of
premiums within Exited Lines due to reducing catastrophe exposed business,
reduction in business not providing an adequate return on capital, and the
non-renewal of the Company's property catastrophe treaties.

To support growth in the Company's Commercial Specialty segment and provide
capital for business initiatives including share repurchases, a decision was
made to reduce writings in its Reinsurance Operations. The Company anticipates
that its Reinsurance Operations will comprise a smaller percentage of the
Company's overall business prospectively.

Net Retention

The ratio of net written premiums to gross written premiums is referred to as
the Company's net premium retention. The Company's net premium retention is
summarized by segments as follows:

                             Years Ended                         Years Ended
                            December 31,                        December 31,
(Dollars in thousands)    2022        2021       Change       2021        2020       Change
Commercial Specialty        95.7 %      94.5 %       1.2        94.5 %      93.0 %       1.5
Reinsurance                100.0 %     100.0 %         -       100.0 %     100.0 %         -
Continuing Lines            96.9 %      95.7 %       1.2        95.7 %      94.1 %       1.6
Exited Lines                29.2 %      60.2 %     (31.0 )      60.2 %      84.7 %     (24.5 )
Total                       81.3 %      85.0 %      (3.7 )      85.0 %      90.4 %      (5.4 )



The net premium retention for the year ended December 31, 2022 decreased by 3.7
points as compared to 2021. The reduction in retention is primarily due to all
of the Company's manufactured and dwelling homes policies, except for Florida
and Louisiana which are in run-off, were ceded to American Family Mutual
Insurance Company in 2022 and all policies written with an effective date of
August 8, 2022 and later within the Company's Farm, Ranch & Stable business were
ceded to Everett Cash Mutual Insurance Company. See Note 3 of the notes to the
consolidated financial statements in Item 8 of Part II of this report for
additional information on the sale of renewal rights related to the Company's
manufactured and dwelling homes business and the Company's Farm, Ranch & Stable
business.

The net premium retention for the year ended December 31, 2021 decreased by 5.4
points as compared to 2020. This decrease is primarily due to ceding the
majority of the manufactured home and dwelling policies that were in force on
November 30, 2021.

Net Earned Premiums

Net earned premiums within the Commercial Specialty segment increased by 14.0%
for the year ended December 31, 2022 as compared to the same period in 2021. The
increase in net earned premiums was primarily due to a growth in premiums
written as a result of organic growth from existing agents and pricing
increases. Property net earned premiums were $143.1 million and $139.6 million
for the years ended December 31, 2022 and 2021, respectively. Casualty net
earned premiums were $234.9 million and $191.9 million for the years ended
December 31, 2022 and 2021, respectively.

Net earned premiums within the Commercial Specialty segment increased by 19.3%
for the year ended December 31, 2021 as compared to the same period in 2020. The
increase in net earned premiums was primarily due to a growth in premiums
written as a result of organic growth from existing agents, pricing increases,
and several new wholesale agent relationships. Property net earned premiums were
$139.6 million and $122.9 million for the years ended December 31, 2021 and
2020, respectively. Casualty net earned premiums were $191.9 million and $155.0
million for the years ended December 31, 2021 and 2020, respectively.


                                       51
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Net earned premiums within the Reinsurance Operations segment increased by 84.3%
for the year ended December 31, 2022 as compared to the same period in 2021
primarily due to organic growth of existing casualty treaties. Casualty net
earned premiums were $141.3 million and $76.7 million for the years ended
December 31, 2022 and 2021, respectively. There was no property net earned
premiums for the years ended December 31, 2022 and 2021. To support growth in
the Company's Commercial Specialty segment and provide capital for business
initiatives including share repurchases, a decision was made to reduce writings
in its Reinsurance Operations. The Company anticipates that its Reinsurance
Operations will comprise a smaller percentage of the Company's overall business
prospectively.

Net earned premiums within the Reinsurance Operations segment increased by 66.3%
for the year ended December 31, 2021 as compared to the same period in 2020
primarily due to organic growth of an existing casualty treaty. Casualty net
earned premiums were $76.7 million and $46.1 million for the years ended
December 31, 2020 and 2019, respectively. There was no property net earned
premiums for the years ended December 31, 2021 and 2020.

Net earned premiums within the Exited Lines segment decreased by 55.6% for the
year ended December 31, 2022 as compared to the same period in 2021 primarily
due to the sale of the renewal rights related to the Company's manufactured and
dwelling homes business on October 26, 2021 and the sale of renewal rights
related to the Company's Farm, Ranch & Stable business on August 8, 2022. The
decrease in net earned premiums is also due to exiting lines of business
unrelated to the company's continuing businesses. Property net earned premiums
were $63.9 million and $163.4 million for the years ended December 31, 2022 and
2021, respectively. Casualty net earned premiums were $19.3 million and $24.1
million for the years ended December 31, 2022 and 2021, respectively.

Net earned premiums within the Exited Lines segment decreased by 23.1% for the
year ended December 31, 2021 as compared to the same period in 2020 primarily
due to a continued reduction of catastrophe exposed business, a reduction in
business not providing an adequate return on capital, and the non-renewal of the
Company's property catastrophe treaties. Property net earned premiums were
$163.4 million and $214.9 million for the years ended December 31, 2021 and
2020, respectively. Casualty net earned premiums were $24.1 million and $28.8
million for the years ended December 31, 2021 and 2020, respectively.

Underwriting Results

Commercial Specialty

The components of income from the Company's Commercial Specialty segment and
corresponding underwriting ratios are as follows:

                                        Years Ended                              Years Ended
                                       December 31,              %              December 31,              %
(Dollars in thousands)              2022          2021         Change        2021          2020        Change
Gross written premiums            $ 401,025     $ 373,552          7.4 %   $ 373,552     $ 310,354        20.4 %
Net written premiums              $ 383,682     $ 353,105          8.7 %   $ 353,105     $ 288,745        22.3 %
Net earned premiums               $ 377,953     $ 331,503         14.0 %   $ 331,503     $ 277,892        19.3 %
Other income                      $   1,029     $   1,028          0.1 %   $   1,028     $     888        15.8 %
Total revenues                      378,982       332,531         14.0 %     332,531       278,780        19.3 %
Losses and expenses:
Net losses and loss adjustment
expenses                            225,389       202,176         11.5 %     202,176       140,388        44.0 %
Acquisition costs and other
underwriting expenses               141,471       120,877         17.0 %     120,877       102,680        17.7 %
Underwriting income               $  12,122     $   9,478         27.9 %   $   9,478     $  35,712       (73.5 %)



                              Years Ended                        Years Ended
                              December 31,         Point        December 31,          Point
                            2022        2021      Change       2021       2020       Change
Underwriting Ratios:
Loss ratio:
Current accident year        60.0 %      60.5 %      (0.5 )     60.5 %     59.0 %        1.5
Prior accident year          (0.4 %)      0.5 %      (0.9 )      0.5 %     (8.5 %)       9.0
Calendar year loss ratio     59.6 %      61.0 %      (1.4 )     61.0 %     50.5 %       10.5
Expense ratio                37.4 %      36.5 %       0.9       36.5 %     36.9 %       (0.4 )
Combined ratio               97.0 %      97.5 %      (0.5 )     97.5 %     87.4 %       10.1




                                       52

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Reconciliation of non-GAAP financial measures and ratios

The table below reconciles the non-GAAP measures or ratios, which excludes the
impact of prior accident year adjustments, to its most directly comparable GAAP
measure or ratio. The Company believes the non-GAAP measures or ratios are
useful to investors when evaluating the Company's underwriting performance as
trends in the Company's Commercial Specialty segment may be obscured by prior
accident year adjustments. These non-GAAP measures or ratios should not be
considered as a substitute for its most directly comparable GAAP measure or
ratio and does not reflect the overall underwriting profitability of the
Company.

                                                           Years Ended December 31,
                                         2022                        2021                        2020
                                                Loss                        Loss                        Loss
                                 Losses        Ratio         Losses        Ratio         Losses        Ratio
Property
Non catastrophe property
losses and ratio excluding
the effect of prior accident
year (1)                        $  73,054         51.1 %    $  65,556         47.0 %    $  53,951         43.9 %
Effect of prior accident year      (3,608 )       (2.5 %)       1,703          1.2 %       (1,124 )       (0.9 %)
Non catastrophe property
losses and ratio (2)            $  69,446         48.6 %    $  67,259         48.2 %    $  52,827         43.0 %
Catastrophe losses and ratio
excluding the effect of prior
accident year (1)               $  10,979          7.7 %    $  19,404         13.9 %    $  23,621         19.2 %
Effect of prior accident year         504          0.4 %          181          0.1 %        1,064          0.9 %
Catastrophe losses and ratio
(2)                             $  11,483          8.1 %    $  19,585         14.0 %    $  24,685         20.1 %
Total property losses and
ratio excluding the effect of
prior accident year (1)         $  84,033         58.8 %    $  84,960         60.9 %    $  77,572         63.1 %
Effect of prior accident year      (3,104 )       (2.1 %)       1,884          1.3 %          (60 )       (0.0 %)
Total property losses and
ratio (2)                       $  80,929         56.7 %    $  86,844         62.2 %    $  77,512         63.1 %
Casualty
Total Casualty losses and
ratio excluding the effect of
prior accident year (1)         $ 142,800         60.8 %    $ 115,646         60.3 %    $  86,305         55.7 %
Effect of prior accident year       1,660          0.7 %         (314 )       (0.2 %)     (23,429 )      (15.1 %)
Total Casualty losses and
ratio (2)                       $ 144,460         61.5 %    $ 115,332         60.1 %    $  62,876         40.6 %
Total
Total net losses and loss
adjustment expense and total
loss ratio excluding the
effect of prior accident year
(1)                             $ 226,833         60.0 %    $ 200,606         60.5 %    $ 163,877         59.0 %
Effect of prior accident year      (1,444 )       (0.4 %)       1,570          0.5 %      (23,489 )       (8.5 %)
Total net losses and loss
adjustment expense and total
loss ratio (2)                  $ 225,389         59.6 %    $ 202,176         61.0 %    $ 140,388         50.5 %



(1)
Non-GAAP measure / ratio
(2)
Most directly comparable GAAP measure / ratio

Premiums

See "Result of Operations" above for a discussion on consolidated premiums.

Other Income

Other income was $1.0 million, $1.0 million, and $0.9 million for the years
ended December 31, 2022, 2021, and 2020, respectively. Other income is primarily
comprised of fee income.

                                       53
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Loss Ratio

The current accident year losses and loss ratio is summarized as follows:

                                      Years Ended                              Years Ended
                                     December 31,              %              December 31,              %
(Dollars in thousands)            2022          2021        Change         2021          2020         Change
Property losses
Non-catastrophe                 $  73,054     $  65,556        11.4 %    $  65,556     $  53,951         21.5 %
Catastrophe                        10,979        19,404       (43.4 %)      19,404        23,621        (17.9 %)
Property losses                    84,033        84,960        (1.1 %)      84,960        77,572          9.5 %
Casualty losses                   142,800       115,646        23.5 %      115,646        86,305         34.0 %
Total accident year losses      $ 226,833     $ 200,606        13.1 %    $ 200,606     $ 163,877         22.4 %



                                       Years Ended                       Years Ended
                                      December 31,         Point        December 31,         Point
                                     2022       2021      Change       2021       2020      Change
Current accident year loss ratio:
Property
Non-catastrophe                       51.1 %     47.0 %       4.1       47.0 %     43.9 %       3.1
Catastrophe                            7.7 %     13.9 %      (6.2 )     13.9 %     19.2 %      (5.3 )
Property loss ratio                   58.8 %     60.9 %      (2.1 )     60.9 %     63.1 %      (2.2 )
Casualty loss ratio                   60.8 %     60.3 %       0.5       

60.3 % 55.7 % 4.6
Total accident year loss ratio 60.0 % 60.5 % (0.5 ) 60.5 % 59.0 % 1.5

The current accident year property non-catastrophe loss ratio for 2022 increased
by 4.1 points compared to 2021 primarily due to higher claims severity resulting
from inflation and other factors. The current accident year property
non-catastrophe loss ratio for 2021 increased by 3.1 points compared to 2020
primarily due to higher claims severity resulting from inflation and other
factors.

The current accident year property catastrophe loss ratio for 2022 improved by
6.2 points compared to 2021 due to lower claims frequency and severity as a
result of taking underwriting actions to reduce catastrophe exposure. The
current accident year property catastrophe loss ratio for 2021 improved by 5.3
points compared to 2020 due to lower claims frequency.

The current accident year casualty loss ratio for 2022 increased by 0.5 points
compared to 2021 due to higher claims severity resulting from inflation and
other factors. The current accident year casualty loss ratio for 2021 increased
by 4.6 points compared to 2020 due to higher claims frequency.

The calendar year loss ratio for the years ended December 31, 2022, 2021, and
2020 includes a decrease of $1.4 million, or 0.4%, an increase of $1.6 million
or 0.5%, and a decrease of $23.5 million or 8.5%, respectively, related to
reserve development on prior accident years. Please see Note 13 of the notes to
the consolidated financial statements in Item 8 of Part II of this report for
further discussion on prior accident year development.

Expense Ratios

The expense ratio increased 0.9 points from 36.5% for 2021 to 37.4% for 2022
primarily due to higher compensation cost.

The expense ratio improved 0.4 points from 36.9% for 2020 to 36.5% for 2021
primarily due to higher earned premiums.

COVID-19

COVID-19 could result in declines in business, non-payment of premiums, and
increases in claims that could adversely affect Commercial Specialty's business,
financial condition, and results of operation.

There is risk that legislation could be passed or there could be a court ruling
which would require the Company to cover business interruption claims regardless
of terms, exclusions including the virus exclusions contained within the
Company's Commercial Specialty policies, or other conditions included in these
policies that would otherwise preclude coverage.



                                       54
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Reinsurance Operations

The components of income from the Company's Reinsurance Operations segment and
corresponding underwriting ratios are as follows:

                                        Years Ended                              Years Ended
                                       December 31,              %              December 31,              %
(Dollars in thousands)            2022 (1)      2021 (1)      Change       2021 (1)      2020 (1)       Change
Gross written premiums            $ 158,711     $ 103,690        53.1 %    $ 103,690     $  55,616         86.4 %
Net written premiums              $ 158,711     $ 103,690        53.1 %    $ 103,690     $  55,616         86.4 %
Net earned premiums               $ 141,287     $  76,663        84.3 %    $  76,663     $  46,105         66.3 %
Other income (loss)                     (82 )         (95 )     (13.7 %)         (95 )         191       (149.7 %)
Total revenues                      141,205        76,568        84.4 %       76,568        46,296         65.4 %
Losses and expenses:
Net losses and loss adjustment
expenses                             85,385        48,064        77.6 %       48,064        28,718         67.4 %
Acquisition costs and other
underwriting expenses                51,721        26,698        93.7 %       26,698        16,148         65.3 %
Underwriting income               $   4,099     $   1,806       127.0 %    $   1,806     $   1,430         26.3 %



                                         Years Ended                                  Years Ended
                                         December 31,              Point              December 31,              Point
                                   2022 (1)        2021 (1)        Change       2021 (1)        2020 (1)        Change
Underwriting Ratios:
Loss ratio:
Current accident year (2)               61.5 %          64.1 %        (2.6 )         64.1 %          65.9 %        (1.8 )
Prior accident year                     (1.1 %)         (1.4 %)        0.3           (1.4 %)         (3.6 %)        2.2
Calendar year loss ratio (3)            60.4 %          62.7 %        (2.3 )         62.7 %          62.3 %         0.4
Expense ratio                           36.6 %          34.8 %         1.8           34.8 %          35.0 %        (0.2 )
Combined ratio                          97.0 %          97.5 %        (0.5 )         97.5 %          97.3 %         0.2



(1)
External business only, excluding business assumed from affiliates
(2)
Non-GAAP ratio
(3)
Most directly comparable GAAP ratio

Reconciliation of non-GAAP financial ratios

The table above includes a reconciliation of the current accident year loss
ratio, which is a non-GAAP ratio, to its calendar year loss ratio, which is its
most directly comparable GAAP ratio. The Company believes this non-GAAP ratio is
useful to investors when evaluating the Company's underwriting performance as
trends in the Company's Reinsurance Operations may be obscured by prior accident
year adjustments. This non-GAAP ratio should not be considered as a substitute
for its most directly comparable GAAP ratio and does not reflect the overall
underwriting profitability of the Company.

Premiums

See "Result of Operations" above for a discussion on consolidated premiums.

Other Income (Loss)

Reinsurance Operations recognized other loss of $0.1 million in 2022, other loss
of $0.1 million in 2021, and other income of $0.2 million in 2020. Other income
(loss) is comprised of foreign exchange gains and losses.

Loss Ratio

The current accident year loss ratio for 2022 improved by 2.6 points compared to
2021 reflecting a mix of business change and growth in a treaty that has a lower
expected loss ratio than last year. The current accident year loss ratio for
2021 improved by 1.8 points compared to 2020 reflecting a mix of business change
and growth in a treaty that has a lower expected loss ratio.


                                       55
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The calendar year loss ratio for the years ended December 31, 2022, 2021, and
2020 includes a decrease of $1.5 million, or 1.1%, a decrease of $1.1 million or
1.4%, and a decrease of $1.7 million or 3.6%, respectively, related to reserve
development on prior accident years. Please see Note 13 of the notes to the
consolidated financial statements in Item 8 of Part II of this report for
further discussion on prior accident year development.

Expense Ratio

The expense ratio increased 1.8 points from 34.8% for 2021 to 36.6% for 2022.
This increase in the expense ratio was primarily due to an increase in
commission expense which was partially offset by a reduction in the expense
ratio as a result of a growth in net earned premiums.

The expense ratio improved 0.2 points from 35.0% for 2020 to 34.8% for 2021.

COVID-19

COVID-19 could result in declines in business, non-payment of premiums, and
increases in claims that could adversely affect the Reinsurance Operations'
business, financial condition, and results of operation.

Exited Lines

The components of loss from the Company's Exited Lines segment and corresponding
underwriting ratios are as follows:

                                        Years Ended                              Years Ended
                                       December 31,              %              December 31,              %
(Dollars in thousands)              2022          2021        Change         2021          2020        Change
Gross written premiums            $ 167,867     $ 204,880       (18.1 %)   $ 204,880     $ 240,633       (14.9 %)
Net written premiums              $  48,938     $ 123,273       (60.3 %)   $ 123,273     $ 203,806       (39.5 %)
Net earned premiums               $  83,231     $ 187,444       (55.6 %)   $ 187,444     $ 243,702       (23.1 %)
Other income                            515           882       (41.6 %)         882           959        (8.0 %)
Total revenues                       83,746       188,326       (55.5 %)     188,326       244,661       (23.0 %)
Losses and expenses:
Net losses and loss adjustment
expenses                             48,454       134,724       (64.0 %)     134,724       167,095       (19.4 %)
Acquisition costs and other
underwriting expenses                43,189        75,266       (42.6 %)      75,266        96,779       (22.2 %)
Underwriting loss                 $  (7,897 )   $ (21,664 )     (63.5 %)   $ (21,664 )   $ (19,213 )      12.8 %



                               Years Ended                          Years Ended
                               December 31,          Point         December 31,           Point
                            2022         2021       Change       2021        2020        Change
Underwriting Ratios:
Loss ratio:
Current accident year         64.4 %       67.5 %      (3.1 )      67.5 %      71.2 %       (3.7 )
Prior accident year           (6.2 %)       4.4 %     (10.6 )       4.4 %      (2.6 %)       7.0
Calendar year loss ratio      58.2 %       71.9 %     (13.7 )      71.9 %      68.6 %        3.3
Expense ratio                 51.9 %       40.2 %      11.7        40.2 %      39.7 %        0.5
Combined ratio               110.1 %      112.1 %      (2.0 )     112.1 %     108.3 %        3.8





                                       56

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Reconciliation of non-GAAP financial measures and ratios

The table below reconciles the non-GAAP measures or ratios, which excludes the
impact of prior accident year adjustments, to its most directly comparable GAAP
measure or ratio. The Company believes the non-GAAP measures or ratios are
useful to investors when evaluating the Company's underwriting performance as
trends in the Company's Exited Lines segment may be obscured by prior accident
year adjustments. These non-GAAP measures or ratios should not be considered as
a substitute for its most directly comparable GAAP measure or ratio and does not
reflect the overall underwriting profitability of the Company.

                                                          Years Ended December 31,
                                        2022                        2021                        2020
                                               Loss                        Loss                        Loss
                                 Losses       Ratio         Losses        Ratio         Losses        Ratio
Property
Non catastrophe property
losses and ratio excluding
the effect of prior accident
year (1)                        $ 32,562         50.9 %    $  79,146         48.5 %    $  89,033         41.4 %
Effect of prior accident year     (4,262 )       (6.7 %)       5,090          3.1 %       (7,257 )       (3.4 %)
Non catastrophe property
losses and ratio (2)            $ 28,300         44.2 %    $  84,236         51.6 %    $  81,776         38.0 %
Catastrophe losses and ratio
excluding the effect of prior
accident year (1)               $ 11,011         17.2 %    $  34,274         21.0 %    $  69,092         32.2 %
Effect of prior accident year       (391 )       (0.6 %)       5,608          3.4 %        3,228          1.5 %
Catastrophe losses and ratio
(2)                             $ 10,620         16.6 %    $  39,882         24.4 %    $  72,320         33.7 %
Total property losses and
ratio excluding the effect of
prior accident year (1)         $ 43,573         68.1 %    $ 113,420         69.5 %    $ 158,125         73.6 %
Effect of prior accident year     (4,653 )       (7.3 %)      10,698          6.5 %       (4,029 )       (1.9 %)
Total property losses and
ratio (2)                       $ 38,920         60.8 %    $ 124,118         76.0 %    $ 154,096         71.7 %
Casualty
Total Casualty losses and
ratio excluding the effect of
prior accident year (1)         $ 10,052         52.0 %    $  13,103         54.4 %    $  15,340         53.2 %
Effect of prior accident year       (518 )       (2.7 %)      (2,497 )      (10.4 %)      (2,341 )       (8.1 %)
Total Casualty losses and
ratio (2)                       $  9,534         49.3 %    $  10,606         44.0 %    $  12,999         45.1 %
Total
Total net losses and loss
adjustment expense and total
loss ratio excluding the
effect of prior accident year
(1)                             $ 53,625         64.4 %    $ 126,523         67.5 %    $ 173,465         71.2 %
Effect of prior accident year     (5,171 )       (6.2 %)       8,201          4.4 %       (6,370 )       (2.6 %)
Total net losses and loss
adjustment expense and total
loss ratio (2)                  $ 48,454         58.2 %    $ 134,724         71.9 %    $ 167,095         68.6 %



(1)
Non-GAAP measure / ratio
(2)
Most directly comparable GAAP measure / ratio

Premiums

See "Result of Operations" above for a discussion on consolidated premiums for
2022.

Other Income

Other income was $0.5 million, $0.9 million, and $1.0 million for the years
ended December 31, 2022, 2021, and 2020, respectively. Other income is primarily
comprised of fee income.

                                       57
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Loss Ratio

The current accident year losses and loss ratio is summarized as follows:

                                   Years Ended                              Years Ended
                                  December 31,              %              December 31,              %
(Dollars in thousands)         2022          2021        Change         2021          2020        Change
Property losses
Non-catastrophe              $  32,562     $  79,146       (58.9 %)   $  79,146     $  89,033       (11.1 %)
Catastrophe                     11,011        34,274       (67.9 %)      34,274        69,092       (50.4 %)
Property losses                 43,573       113,420       (61.6 %)     113,420       158,125       (28.3 %)
Casualty losses                 10,052        13,103       (23.3 %)      13,103        15,340       (14.6 %)
Total accident year losses   $  53,625     $ 126,523       (57.6 %)   $ 126,523     $ 173,465       (27.1 %)



                                       Years Ended                       Years Ended
                                      December 31,         Point        December 31,         Point
                                     2022       2021      Change       2021       2020      Change
Current accident year loss ratio:
Property
Non-catastrophe                       50.9 %     48.5 %       2.4       48.5 %     41.4 %       7.1
Catastrophe                           17.2 %     21.0 %      (3.8 )     21.0 %     32.2 %     (11.2 )
Property loss ratio                   68.1 %     69.5 %      (1.4 )     69.5 %     73.6 %      (4.1 )
Casualty loss ratio                   52.0 %     54.4 %      (2.4 )     

54.4 % 53.2 % 1.2
Total accident year loss ratio 64.4 % 67.5 % (3.1 ) 67.5 % 71.2 % (3.7 )

The current accident year property non-catastrophe loss ratio for 2022 increased
by 2.4 points compared to 2021 primarily due to higher claims frequency. The
current accident year property non-catastrophe loss ratio for 2021 increased by
7.1 points compared to 2020 primarily reflecting higher claims frequency, a
higher loss ratio in the property reinsurance treaties, and higher claims
severity in both the specialty property lines and the Farm, Ranch & Stable lines
resulting from inflation and other factors.

The current accident year property catastrophe loss ratio for 2022 improved by
3.8 points compared to 2021 recognizing lower claims frequency. The current
accident year property catastrophe loss ratio for 2021 improved by 11.2 points
compared to 2020 reflecting lower claims frequency and severity in the specialty
property and Farm, Ranch & Stable lines and an improvement in the property
catastrophe reinsurance treaties loss ratios.

The current accident year casualty loss ratio for 2022 improved by 2.4 points
compared to 2021 mainly due to lower claims severity in the Farm, Ranch & Stable
business lines. The current accident year casualty loss ratio for 2021 increased
by 1.2 points compared to 2020 primarily due to higher claims severity resulting
from inflation and other factors.

The calendar year loss ratio for the years ended December 31, 2022, 2021, and
2020 includes a decrease of $5.2 million, or 6.2%, an increase of $8.2 million,
or 4.4%, and a decrease of $6.4 million, or 2.6%, respectively, related to
reserve development on prior accident years. Please see Note 13 of the notes to
the consolidated financial statements in Item 8 of Part II of this report for
further discussion on prior accident year development.

Expense Ratios

The expense ratio increased 11.7 points from 40.2% for 2021 to 51.9% for 2022.
The increase in the expense ratio is primarily due to the reduction in earned
premiums resulting from the runoff of lines of business that the Company is no
longer writing.

The expense ratio increased 0.5 points from 39.7% for 2020 to 40.2% for 2021.
The increase in the expense ratio is primarily due to a reduction in earned
premiums partially offset by a reduction in commission expense.

COVID-19

COVID-19 could result in declines in business and non-payment of premiums that
could adversely affect Exited Lines' business, financial condition, and results
of operation.


                                       58

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Unallocated Corporate Items

The Company's fixed income portfolio, excluding cash, continues to maintain high
quality with an A average rating and a duration of 1.7 years.

Net Investment Income

                             Years Ended                               Years Ended
                            December 31,              %               December 31,              %
(Dollars in
thousands)                2022         2021         Change          2021         2020         Change
Gross investment
income (1)              $ 29,776     $ 39,662          (24.9 %)   $ 39,662     $ 31,487           26.0 %

Investment expenses (2,149 ) (2,642 ) (18.7 %) (2,642 ) (3,095 ) (14.6 %)
Net investment income $ 27,627 $ 37,020 (25.4 %) $ 37,020

   $ 28,392           30.4 %



(1)

Excludes realized gains and losses

Gross investment income for 2022 decreased by 24.9% and net investment income
for 2022 decreased by 25.4% compared to 2021. The decrease was primarily due to
decreased returns from alternative investments and lowered invested assets due
to the liquidation of the Company's common stock portfolio and a portion of the
bond portfolio in order to raise funds to retire the 2047 Notes in April 2022.
This decrease was partially offset by an increase in yield within the fixed
maturities portfolio due to the rise in rates. Gross investment income for 2021
increased by 26.0% and net investment income for 2021 increased by 30.4%
compared to 2020. The increase was primarily due to increased returns from
alternative investments offset by a decrease in yield within the fixed
maturities portfolio.

At December 31, 2022, the Company held agency mortgage-backed securities with a
market value of $3.3 million. Excluding the agency mortgage-backed securities,
the average duration of the Company's fixed maturities portfolio was 1.7 years
as of December 31, 2022, compared with 3.3 years as of December 31, 2021.
Including cash and short-term investments, the average duration of the Company's
fixed maturities portfolio, excluding agency mortgage-backed securities, was 1.6
years as of December 31, 2022, compared to 3.1 years as of December 31, 2021.
Changes in interest rates can cause principal payments on certain investments to
extend or shorten which can impact duration. At December 31, 2022, the Company's
embedded book yield on its fixed maturities, not including cash, was 3.5%
compared with 2.2% at December 31, 2021. The embedded book yield on the $31.6
million of taxable municipal bonds in the Company's portfolio was 3.1% at
December 31, 2022, compared to an embedded book yield of 2.8% on the Company's
taxable municipal bonds of $54.6 million at December 31, 2021.

At December 31, 2021, the Company held agency mortgage-backed securities with a
market value of $148.6 million. Excluding the agency mortgage-backed securities,
the average duration of the Company's fixed maturities portfolio was 3.3 years
as of December 31, 2021, compared with 4.8 years as of December 31, 2020.
Including cash and short-term investments, the average duration of the Company's
fixed maturities portfolio, excluding agency mortgage-backed securities, was 3.1
years as of December 31, 2021, compared to 4.4 years as of December 31, 2020.
Changes in interest rates can cause principal payments on certain investments to
extend or shorten which can impact duration. At December 31, 2021, the Company's
embedded book yield on its fixed maturities, not including cash, was 2.2%
compared with 2.3% at December 31, 2020. The embedded book yield on the $54.6
million of taxable municipal bonds in the Company's portfolio was 2.8% at
December 31, 2021, compared to an embedded book yield of 3.0% on the Company's
taxable municipal bonds of $61.2 million at December 31, 2020.

Net Realized Investment Gains (Losses)

The components of net realized investment gains (losses) for the years ended
December 31, 2022, 2021, and 2020 were as follows:

                                               Years Ended December 31,
(Dollars in thousands)                     2022          2021         2020
Equity securities                        $  (3,392 )   $ 13,440     $ (15,250 )
Fixed maturities                           (13,405 )        342        23,604
Derivatives                                 10,073        2,105       (22,256 )
Other-than-temporary impairment losses     (26,205 )          -          (760 )
Net realized investment gains (losses)   $ (32,929 )   $ 15,887     $ (14,662 )




                                       59

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In response to a rising interest rate environment, the Company took action early
in April 2022 to shorten the duration of its fixed maturities portfolio. In
connection with these actions, the Company identified fixed maturities
securities with a weighted average life of five years or greater as having an
intent to sell, the majority of which were sold in the 2nd quarter of 2022. Most
of the proceeds from the sale of these securities were reinvested into fixed
income investments with maturities of approximately two years. As a result of
these actions, book yield increased from 2.2% at December 31, 2021 to 3.5% at
December 31, 2022.

See Note 6 of the notes to the consolidated financial statements in Item 8 of
Part II of this report for an analysis of total investment return on a pre-tax
basis for the years ended December 31, 2022, 2021, and 2020.

Corporate and Other Operating Expenses

                                                       Years Ended December 

31,

(Dollars in thousands)                           2022            2021       

2020

Corporate expenses - nondisposition related $ 13,959 $ 19,977

   $    41,998
Impairments and expenses related to
dispositions within Exited Lines                   10,462           7,202               -

Corporate and Other Operating Expenses $ 24,421 $ 27,179

$ 41,998

Corporate expenses - nondisposition related consist of outside legal fees, other
professional fees, directors' fees, management fees & advisory fees, salaries
and benefits for holding company personnel, development costs for new products,
impairment losses, and taxes incurred which are not directly related to
operations. The decrease in corporate expenses - nondisposition related for 2022
as compared to 2021 was primarily due to the Company receiving an employee
retention credit under the CARES Act of $5.5 million. Corporate expenses in 2020
were higher primarily due to incurring expenses related to the redomestication
which included an advisory fee of $10.0 million and legal and professional fees.

Impairments and expenses related to dispositions within Exited Lines represent
impairments of goodwill, intangible assets, software, and lease costs as well as
legal expenses and merger and acquisition fees related to the sale of renewal
rights related to the Company's Farm, Ranch & Stable business and the Company's
manufactured and dwelling homes business. Impairments and expenses related to
dispositions within Exited Lines were $10.5 million and $7.2 million during the
years ended December 31, 2022 and 2021, respectively. There was no impairments
and expenses related to dispositions within Exited Lines during the year ended
December 31, 2020. See Note 3 of the notes to the consolidated financial
statements in Item 8 of Part II of this report for additional information on the
sale of the renewal rights related to the Company's Farm, Ranch & Stable
business and the Company's manufactured and dwelling homes business.

Interest Expense

Interest expense was $3.0 million, $10.5 million, and $15.8 million during the
years ended December 31, 2022, 2021, and 2020, respectively. The reduction in
interest expense is primarily due to the redemption of the Company's 7.75%
Subordinated Notes due in 2045 and the repayment of the margin borrowing
facility in August 2020 as well as the redemption of the 7.875% subordinated
notes on April 15, 2022.

See Note 14 of the notes to the consolidated financial statements in Item 8 of
Part II of this report for details on the Company's debt.

Income Tax Benefit/ Expense

The income tax expense was $2.8 million for the year ended December 31, 2022
compared with income tax expense of $3.4 million for the year ended December 31,
2021. The decrease in income tax expense is primarily due to lower taxable
income in the Company's U.S. subsidiaries.

The income tax expense was $3.4 million for the year ended December 31, 2021
compared with income tax benefit of $8.1 million for the year ended December 31,
2020. The difference between 2021 and 2020 is due to the increase in net income
at Global Indemnity Group, LLC which is treated as a partnership for tax.

See Note 12 of the notes to the consolidated financial statements in Item 8 of
Part II of this report for a comparison of income tax between periods.

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Net Income (Loss)

The factors described above resulted in a net loss of $0.9 million, net income
of $29.4 million, and a net loss of $21.0 million for the years ended December
31, 2022, 2021, and 2020, respectively.

                        Liquidity and Capital Resources

Sources and Uses of Funds

Global Indemnity Group, LLC is a holding company. Its principal asset is its
ownership of the shares of its direct and indirect subsidiaries, including those
of its insurance companies: United National Insurance Company, Diamond State
Insurance Company, Penn-America Insurance Company, Penn-Star Insurance Company,
and Penn-Patriot Insurance Company.

Global Indemnity Group, LLC's short-term and long-term liquidity needs include
but are not limited to the payment of corporate expenses, debt service payments,
distributions to shareholders, and share repurchases. The Company also has
commitments in the form of operating leases, commitments to fund limited
liability investments, and unpaid losses and loss expense obligations. See the
contractual obligation table below for additional information on these
commitments.

In order to meet its short-term and long-term needs, Global Indemnity Group,
LLC's principal sources of cash includes investment income, dividends from
subsidiaries, other permitted disbursements from its direct and indirect
subsidiaries, reimbursement for equity awards granted to employees and
intercompany borrowings. The principal sources of funds at these direct and
indirect subsidiaries include underwriting operations, investment income,
proceeds from sales and redemptions of investments, capital contributions,
intercompany borrowings, and dividends from subsidiaries. Funds are used
principally by these operating subsidiaries to pay claims and operating
expenses, to make debt payments, fund margin requirements on interest rate swap
agreements, to purchase investments, and to make distribution payments. In
addition, the Company periodically reviews opportunities related to business
acquisitions and as a result, liquidity may be needed in the future.

GBLI Holdings, LLC is a holding company which is a wholly-owned subsidiary of
Penn-Patriot Insurance Company. GBLI Holdings, LLC's principal asset is its
ownership of the shares of its direct and indirect subsidiaries which include
United National Insurance Company, Diamond State Insurance Company, Penn-America
Insurance Company, and Penn-Star Insurance Company. GBLI Holdings, LLC is
dependent on dividends from its subsidiaries as well as reimbursements from its
subsidiaries for utilization of net operating losses and other tax attributes in
order to meet its corporate expense obligations and intercompany financing
obligations.

The future liquidity of both Global Indemnity Group, LLC and GBLI Holdings, LLC
is dependent on the ability of its subsidiaries to generate income to pay
dividends. Global Indemnity Group, LLC and GBLI Holdings, LLC's insurance
companies are restricted by statute as to the amount of dividends that they may
pay without the prior approval of regulatory authorities. The dividend
limitations imposed by state laws are based on the statutory financial results
of each insurance company that are determined by using statutory accounting
practices that differ in various respects from accounting principles used in
financial statements prepared in conformity with GAAP. See "Regulation-Statutory
Accounting Principles." Key differences relate to, among other items, deferred
acquisition costs, limitations on deferred income taxes, reserve calculation
assumptions and surplus notes.

Under Virginia law, Penn-Patriot Insurance Company may not pay any dividend or
make any distribution of cash or other property, the fair market value of which,
together with that of any other dividends or distributions made within the
preceding 12 consecutive months exceeds the lesser of either (1) 10% of its
surplus as of the 31st day of December of the last preceding year, or (2) its
net income, not including net realized capital gains, for the 12 month period
ending on the 31st day of December of the last preceding year, not including pro
rata distributions of any class of its securities, unless the commissioner
approves the proposed payment or fails to disapprove such payment within 30 days
after receiving notice of such payment. In determining whether the dividend must
be approved, undistributed net income from the second and third preceding years,
not including net realized capital gains, may be carried forward.

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Under Pennsylvania law, United National Insurance Company, Penn-America
Insurance Company, and Penn-Star Insurance Company may not pay any dividend or
make any distribution that, together with other dividends or distributions made
within the preceding 12 consecutive months, exceeds the greater of (1) 10% of
its surplus as shown on its last annual statement on file with the commissioner
or (2) its net income for the period covered by such statement, not including
pro rata distributions of any class of its own securities, unless the
commissioner has received notice from the insurer of the declaration of the
dividend and the commissioner approves the proposed payment or fails to
disapprove such payment within 30 days after receiving notice of such payment.
An additional limitation is that Pennsylvania does not permit a domestic insurer
to declare or pay a dividend except out of unassigned funds (surplus) unless
otherwise approved by the commissioner before the dividend is paid. Furthermore,
no dividend or other distribution may be declared or paid by a Pennsylvania
insurance company that would reduce its total capital and surplus to an amount
that is less than the amount required by the Insurance Department for the kind
or kinds of business that it is authorized to transact. Pennsylvania law allows
loans to affiliates up to 10% of statutory surplus without prior regulatory
approval.

Under Indiana law, Diamond State Insurance Company may not pay any dividend or
make any distribution of cash or other property, the fair market value of which,
together with that of any other dividends or distributions made within the 12
consecutive months ending on the date on which the proposed dividend or
distribution is scheduled to be made, exceeds the greater of (1) 10% of its
surplus as of the 31st day of December of the last preceding year, or (2) its
net income for the 12 month period ending on the 31st day of December of the
last preceding year, unless the commissioner approves the proposed payment or
fails to disapprove such payment within 30 days after receiving notice of such
payment. An additional limitation is that Indiana does not permit a domestic
insurer to declare or pay a dividend except out of unassigned surplus unless
otherwise approved by the commissioner before the dividend is paid.

In 2022, the United National insurance companies, Penn-America insurance
companies, and American Reliable Insurance Company paid dividends in the amount
of $4.5 million, $7.5 million, and $124.8 million, respectively, during the year
ended December 31, 2022. The $124.8 million of dividends paid by American
Reliable Insurance Company represented two extraordinary dividends approved by
the Arizona Department of Insurance. An extraordinary dividend in the amount of
$22.5 million was paid in April 2022 and an extraordinary dividend in the amount
of $102.3 million, which was contingent on the sale of American Reliable
Insurance Company to Everett Cash Mutual, was paid in December 2022. See Note 22
of the notes to consolidated financial statements in Item 8 of Part II of this
report for the maximum amount of distributions that U.S. insurance companies
could pay as dividends in 2023.

Surplus Levels

Global Indemnity's insurance companies are required by law to maintain a certain
minimum level of policyholders' surplus on a statutory basis. Policyholders'
surplus is calculated by subtracting total liabilities from total assets. The
NAIC has risk-based capital standards that are designed to identify property and
casualty insurers that may be inadequately capitalized based on the inherent
risks of each insurer's assets and liabilities and mix of net written premiums.
Insurers falling below a calculated threshold may be subject to varying degrees
of regulatory action. Based on the standards currently adopted, the
policyholders' surplus of each of the insurance companies is in excess of the
prescribed minimum company action level risk-based capital requirements.

Sources of operating funds consist primarily of net written premiums and
investment income. Funds are used primarily to pay claims and operating expenses
and to purchase investments. As a result of the dividend / distribution policy,
funds may also be used to pay distributions to shareholders of the Company.

The Company's reconciliation of net income (loss) to net cash provided by
operations is generally influenced by the following:

•

the fact that the Company collects premiums, net of commissions, in advance of
losses paid;

•

the timing of the Company's settlements with its reinsurers; and

•

the timing of the Company's loss payments.

Net cash provided by operating activities in 2022, 2021, and 2020 was $44.2
million, $90.8 million and $32.7 million, respectively.

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In 2022, the decrease in operating cash flows of approximately $46.6 million
from the prior year was primarily a net result of the following items:

(Dollars in thousands)                         2022           2021         Change
Net premiums collected                      $  541,087     $  599,870     $ (58,783 )
Net losses paid                               (272,585 )     (299,027 )      26,442
Underwriting and corporate expenses           (251,031 )     (241,017 )     (10,014 )
Net investment income                           32,316         41,367        (9,051 )
Net federal income taxes paid                     (426 )          (54 )        (372 )
Interest paid                                   (5,125 )      (10,340 )     

5,215

Net cash provided by operating activities $ 44,236 $ 90,799 $ (46,563 )

In 2021, the increase in operating cash flows of approximately $58.1 million
from the prior year was primarily a net result of the following items:

(Dollars in thousands)                         2021           2020         Change
Net premiums collected                      $  599,870     $  552,692     $  47,178
Net losses paid                               (299,027 )     (308,341 )       9,314
Underwriting and corporate expenses           (241,017 )     (241,906 )     

889

Net investment income                           41,367         36,002       

5,365

Net federal income taxes recovered (paid) (54 ) 10,825 (10,879 )
Interest paid

                                  (10,340 )      (16,602 )     

6,262

Net cash provided by operating activities $ 90,799 $ 32,670 $

58,129

See the consolidated statements of cash flows in the consolidated financial
statements in Item 8 of Part II of this report for details concerning the
Company's investing and financing activities.

Liquidity

Currently, the Company believes each of its insurance companies maintains
sufficient liquidity to pay claims through cash generated by operations and
liquid investments. The holding companies also maintain sufficient liquidity to
meet their obligations. The Company monitors its investment portfolios to assure
liability and investment durations are closely matched.

Prospectively, as fixed income investments mature and new cash is obtained, the
cash available to invest will be invested in accordance with the Company's
investment policy. The Company's investment policy allows the Company to invest
in taxable and tax-exempt fixed income investments as well as publicly traded
and private equity investments. With respect to bonds, the Company's credit
exposure limit for each issuer varies with the issuer's credit quality. The
allocation between taxable and tax-exempt bonds is determined based on market
conditions and tax considerations. The fixed income portfolio currently has a
duration of 1.7 years.

As of December 31, 2022, the Company also had future funding commitments of
$14.2 million related to investments that are currently in their harvest period
and it is unlikely that a capital call will be made.

The Company has access to various capital sources including dividends from
insurance subsidiaries and access to the debt and equity capital markets. The
Company believes it has sufficient liquidity to meet its capital needs. See Note
22 of the notes to the consolidated financial statements in Item 8 of Part II of
this report for a discussion of the Company's dividend capacity. However, the
Company's future capital requirements depend on many factors, including the
amount of premium it writes, the amount of loss reserves by lines of business,
and catastrophe exposure. To the extent that the Company needs to raise
additional funds, any equity or debt financing for this purpose, if available at
all, may be on terms that are not favorable to the Company. If the Company
cannot obtain adequate capital, its business, results of operations and
financial condition could be adversely affected.

Sale of Renewal Rights related to Farm, Ranch & Stable and Sale of American
Reliable Insurance Company

On August 8, 2022, the Company sold the renewal rights related to its Farm,
Ranch & Stable business for policies written on or after August 8, 2022 to
Everett Cash Mutual Insurance Company for $30.0 million. The Company retained
the unearned premium reserves for business written prior to August 8, 2022.
Everett Cash Mutual Insurance Company also acquired the

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Company's wholly-owned subsidiary, American Reliable Insurance Company, on
December 31, 2022 for an amount equal to book value, which was $10.0 million, at
the time of closing.

Stock Repurchase

On October 21, 2022, GBLI announced that it would commence a stock repurchase
program beginning in the fourth quarter of 2022. On January 3, 2023, Global
Indemnity Group, LLC announced that it had authorized an increase in the
aggregate stock purchase program from $32 million, which was authorized on
October 21, 2022, to $60 million. The authorization to repurchase will expire on
December 31, 2027. The timing and actual number of shares repurchased, if any,
will depend on a variety of factors, including price, general business and
market conditions, and alternative investment opportunities.

Under the repurchase program, repurchases may be made from time to time using a
variety of methods, including open market purchases or privately negotiated
transactions, all in compliance with Global Indemnity Group, LLC's Insider
Trading Policy, the United States Securities and Exchange Commission, and other
applicable legal requirements. The repurchase program does not obligate Global
Indemnity Group, LLC to acquire any particular amount of class A common shares,
and the repurchase program may be suspended or discontinued at any time at
Global Indemnity Group, LLC's discretion.

Through March 15, 2023, the Company repurchased 1,157,082 shares from third
parties under this program for an aggregate amount of $28.4 million, or $24.54
per share. As a result of these transactions, book value per share increased by
$1.44 per share.

Restructuring

The Company is restructuring its insurance operations in an effort to strengthen
its market presence and enhance its focus on GBLI's core Wholesale Commercial
and InsurTech products. The restructuring plan was initiated in the fourth
quarter of 2022 and is expected to be completed in the first quarter of 2023.
The Company incurred restructuring charges of $3.4 million in the fourth quarter
of 2022 and $2.1 million in the first quarter of 2023 for a total of $5.5
million. The Company anticipates recurring annual expense savings of $16.0
million beginning in 2023.

COVID-19

The Company's liquidity could be negatively impacted by the cancellation,
delays, or non-payment of premiums related to the ongoing COVID-19 pandemic and
its lasting impacts. There is continued risk that legislation could be passed or
there could be a court ruling which would require the Company to cover business
interruption claims regardless of terms, exclusions including the virus
exclusions contained within the Company's Commercial Specialty and Farm, Ranch &
Stable policies, or other conditions included in policies that would otherwise
preclude coverage which would negatively impact liquidity. In addition, the
liquidity of the Company's investment portfolio could be negatively impacted by
disruption experienced in global financial markets. Management is taking actions
it considers prudent to minimize the impact on the Company's liquidity. However,
given the ongoing uncertainty surrounding the duration, magnitude and geographic
reach of COVID-19, the Company is regularly evaluating the impact of COVID-19 on
its liquidity.

Distributions

Global Indemnity has adopted a distribution program. Although subject to the
absolute discretion of the Board of Directors and factors, conditions, and
prospects as such may exist from time to time when the Board of Directors
considers the advisability of declaring a quarterly distribution, Global
Indemnity Group, LLC currently anticipates a distribution rate of $0.25 per
share per quarter ($1.00 per share per year). As of December 31, 2022, there are
currently 13,867,272 shares outstanding.

During 2022, the Board of Directors approved a distribution payment of $0.25 per
common share to all shareholders of record on the close of business on March 21,
2022, June 20, 2022, October 4, 2022, and December 23, 2022. Distributions paid
to common shareholders were $14.4 million during the year ended December 31,
2022. In addition, distributions of $0.4 million were paid to Global Indemnity
Group, LLC's preferred shareholder during the year ended December 31, 2022.

During 2021, the Board of Directors approved a distribution payment of $0.25 per
common share to all shareholders of record on the close of business on March 22,
2021, June 21, 2021, September 23, 2021, and December 20, 2021. Distributions
paid to common shareholders were $14.4 million during the year ended December
31, 2021. In addition, distributions of $0.4 million were paid to Global
Indemnity Group, LLC's preferred shareholder during the year ended December 31,
2021.

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During 2020, the Board of Directors approved a dividend payment of $0.25 per
common share to all shareholders of record on the close of business on March 24,
2020 and June 23, 2020 and approved a distribution payment of $0.25 per common
share to all shareholders of record on the close of business on September 25,
2020 and December 24, 2020. Dividends / distributions paid to common
shareholders were $14.3 million during the year ended December 31, 2020. In
addition, distributions of $0.1 million were paid to Global Indemnity Group,
LLC's preferred shareholder during the year ended December 31, 2020.

Investment Portfolio

As a result of duration shortening, the Company significantly reduced its
interest rate risk with more than 80% of the fixed maturity portfolio maturing
over the next three years. With a shorter duration, the investment portfolio is
well positioned to increase book yield by investing maturities in higher
yielding bonds. At December 31, 2022, the Company's embedded book yield on its
fixed maturities, not including cash, was 3.5% compared with 2.2% at December
31, 2021.

On May 18, 2022, the Company provided the Credit Fund, LLC with formal
withdrawal request in full. Proceeds of $99.6 million were received on July 29,
2022 and were invested in fixed income investments with maturities of two years
and less.

Sale of Renewal Rights Related to Manufactured & Dwelling Homes Business

On October 26, 2021, the Company sold the renewal rights related to its
manufactured and dwelling homes business to K2 Insurance Services ("K2") and
American Family Mutual Insurance Company ("American Family"). Pursuant to the
tripartite transaction, the Company received $28.0 million in cash in October
2021. The Company also retained the American Reliable 50-state licensed
operating unit, $65 million of net capital supporting the business, and a
related $42 million unearned premium reserve. The Company currently leases
office space in Scottsdale, Arizona. As part of this sale, K2 is subleasing
approximately one third of the Scottsdale, Arizona office space. Currently, the
Company intends to exercise the early termination clause in their Scottsdale,
Arizona lease. If the Company exercises the early termination clause, it will
receive $1.6 million in sublease payments from K2. If it does not exercise the
early termination clause, it will receive $2.4 million in sublease payments from
K2 between October 2021 and November 2029.

To facilitate the transaction, American Reliable retained the specialty
residential property business in Florida and Louisiana and also retained
business that was previously placed in runoff. American Reliable commenced the
non-renewal of manufactured home insurance in Florida beginning on March 11,
2022, for policies expiring on or after July 10, 2022. American Reliable and
United National non-renewed manufactured home and dwelling insurance in
Louisiana beginning on or about January 31, 2022, for policies renewing on or
after March 7, 2022. American Family assumed 100% of the risks for all policies
covered under the renewal rights agreement which are written or renewed after
October 26, 2021, except for policies covering properties in the state of
Florida. The Company also retained risk for business previously placed in runoff
and policies in Louisiana.

In addition, effective November 30, 2021, the Company and American Family
reached an agreement where American Family agreed to reinsure 100% of the
Company's unearned premium reserves of the same types as the policies comprising
the manufactured and dwelling homes business lines noted above that were in
force as of November 30, 2021. The approximate amount of the unearned premium
reserves at November 30, 2021 was $33.8 million. The Company received a 40%
ceding commission which included a provision for a 4% claims administration fee
to be paid by the Company directly to K2 Claims.

Trust accounts

Global Indemnity Reinsurance established trust accounts to collateralize
exposure it had to certain third-party ceding companies. As a result of the
redomestication, Penn-Patriot Insurance Company now holds these trust accounts.
The Company invests the funds in securities that have durations that closely
match the expected duration of the liabilities assumed. The Company believes
that Penn-Patriot Insurance Company will have sufficient liquidity to pay claims
prospectively.

Capital Resources

Investment Portfolio

In response to a rising interest rate environment, the Company took action early
in April 2022 to shorten the duration of its fixed maturities portfolio. The
Company identified fixed maturities securities with a weighted average life of
five years or

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greater as having an intent to sell. Most of the proceeds from the sale of these
securities are being reinvested into fixed income investments with maturities of
two years and less. As a result of these actions, book yield increased from 2.2%
at December 31, 2021 to 3.5% at December 31, 2022.

Redemption of Debt

On April 15, 2022, the Company redeemed the entire $130 million in aggregate
principal amount of the outstanding 2047 Notes plus accrued and unpaid interest
on the 2047 Notes redeemed to, but not including the Redemption Date of April
15, 2022. The funds to redeem the debt were primarily obtained through the sale
of the Company's equity portfolio in the amount of $75.9 million, $32.0 million
in dividends from insurance company subsidiaries, $18.4 million from
distributions received from private equity investments, and the remainder from
its subsidiary, GBLI Holdings, LLC.

As a result of this redemption, the Company no longer has any outstanding debt
with third parties.

Intercompany Pooling Arrangement

The Company's U.S. insurance companies participate in an intercompany pooling
arrangement whereby premiums, losses, and expenses are shared pro rata amongst
the U.S. insurance companies. Prior to completion of the sale of American
Reliable, American Reliable comprised 30% of the pool. Due to the sale of
American Reliable on December 31, 2022, the intercompany pooling agreement was
amended. American Reliable was removed from the pool and its 30% participation
in the business and capital was allocated to the Company's remaining five
insurance companies.

The intercompany reinsurance agreement was updated in 2022 to require each
company in the reinsurance pool to fund its proportionate share of collateral
required to fund certain third party ceding companies.

For additional information on the Sale of American Reliable, please see the
liquidity section above.

Intercompany Loan

On August 28, 2020, Global Indemnity Investments, Inc. entered into a promissory
note with Global Indemnity Group, LLC for the principal amount of $11.3 million.
This note was issued in conjunction with Global Indemnity Investment Inc.'s
purchase of limited liability partnership interests from Global Indemnity Group,
LLC. The note bears interest at a rate of 1.47% and is due on August 28, 2030.
This loan was fully repaid at December 31, 2021.

On December 15, 2021, Global Indemnity Investments, Inc. entered into a $10.0
million discretionary line of credit demand note with Global Indemnity Group,
LLC, as borrower. Each advance outstanding under this note will bear interest at
an annual interest rate equal to the short-term applicable federal rate in
effect at the time the advance was granted and will reset once a month. The
outstanding principal amount of each advance shall be payable on the last day of
the applicable interest period of such advance and on demand. There is no
balance outstanding on this note at December 31, 2022.

On April 13, 2022, GBLI Holdings, LLC issued a promissory note to Global
Indemnity Group, LLC for the principal amount of $69.4 million. This note bears
interest at a rate equal to the short-term, annual compound Applicable Federal
Rate ("AFR") in effect for April 2022 which was 1.26%. On each third anniversary
of this Note, the interest rate shall reset to the then applicable short-term,
annual compounded AFR for such month. The Note is due on April 13, 2031. The
outstanding balance on this note was $69.4 million at December 31, 2022.

On April 13, 2022, GBLI Holdings, LLC issued a promissory note to Global
Indemnity Investment Inc. for the principal amount of $18.4 million. This note
bears interest at a rate equal to the short-term, annual compound AFR in effect
for April 2022 which was 1.26%. On each third anniversary of this Note, the
interest rate shall reset to the then applicable short-term, annual compounded
AFR for such month. The Note is due on April 13, 2031. The outstanding balance
on this note was $18.4 million at December 31, 2022.

Intercompany Dividends and Capital Contributions

In addition to intercompany dividends that are paid in the ordinary course of
business, American Reliable Insurance Company paid an extraordinary dividend in
December 2022, which was approved by the Arizona Department of Insurance, in the
amount of $102.3 million which was treated as one of a series of liquidating
distributions of American Reliable Insurance Company. In conjunction with the
liquidation of American Reliable Insurance Company, a series of capital

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contributions were made downstream within GBLI Holdings, LLC and subsidiaries in
an effort to reallocate the capital from the sale of American Reliable Insurance
Company.

All of the intercompany transactions discussed above eliminate in consolidation
and have no impact on the consolidating financial statements.

Margin Borrowing Facility

As of December 31, 2022, the Company had available a margin borrowing facility.
The Company did not have any amounts outstanding on the margin borrowing
facility as of December 31, 2022 and 2021. The borrowing rate for this facility
was tied to the Fed Funds Effective rate and was approximately 5.1% and 0.8% at
December 31, 2022 and 2021, respectively. This facility is due on demand. The
borrowings are subject to maintenance margin, which is a minimum account balance
that must be maintained. A decline in market conditions could require an
additional deposit of collateral. The Company did not have any securities that
were deposited as collateral at December 31, 2022 or 2021. The amount borrowed
against the margin account may fluctuate as routine investment transactions,
such as dividends received, investment income received, maturities and
pay-downs, impact cash balances. The margin facility contains customary events
of default, including, without limitation, insolvency, failure to make required
payments, failure to comply with any representations or warranties, failure to
adequately assure future performance, and failure of a guarantor to perform
under its guarantee.

Derivative Instruments

The Company entered into derivative instruments related to interest rate swaps.
Due to fluctuations in interest rates, the Company received $12.7 million and
$2.7 million in connection with these derivative instruments for the years ended
December 31, 2022 and 2021, respectively. The Company terminated its outstanding
interest rate swaps in the fourth quarter of 2022. As of December 31, 2022, the
Company has no interest rate swap agreements.


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                            Contractual Obligations

The Company has commitments in the form of operating leases, commitments to fund
limited liability investments, subordinated notes, and unpaid losses and loss
expense obligations. As of December 31, 2022, contractual obligations related to
Global Indemnity's commitments, including any principal and interest payments,
were as follows:

                                                                      Payment Due by Period
                                                      Less than        1 - 3         3 - 5       More than
(Dollars in thousands)                    Total         1 year         years         years        5 years
Operating leases (1)                    $  16,106     $    2,995     $   5,630     $   4,240     $    3,241
Commitments to fund limited
partnership investment (2)                 14,214         14,214             -             -              -
Unpaid losses and loss adjustment
expenses obligations (3)                  832,404        322,972       284,682       122,364        102,386
Total                                   $ 862,724     $  340,181     $ 290,312     $ 126,604     $  105,627



(1)
The Company leases office space and equipment as part of its normal operations.
The amounts shown above represent future commitments under such operating
leases.
(2)
Represents future funding commitment of the Company's participation in a limited
partnership investment. See Note 18 of the notes to the consolidated financial
statements in Item 8 of Part II of this report for additional information on
this commitment.
(3)
These amounts represent the gross future amounts needed to pay losses and
related loss adjustment expenses and do not reflect amounts that are expected to
be recovered from the Company's reinsurers. See discussion in "Liability for
Unpaid Losses and Loss Adjustment Expenses" for more details.

                                   Inflation

Property and casualty insurance premiums are established before the Company
knows the amount of losses and loss adjustment expenses or the extent to which
inflation may affect such amounts. The Company attempts to anticipate the
potential impact of inflation in establishing its reserves.

Future increases in inflation could result in future increases in interest
rates, which in turn are likely to result in a decline in the market value of
the investment portfolio and resulting in unrealized losses and reductions in
shareholders' equity.

              Cautionary Note Regarding Forward-Looking Statements

Some of the statements under "Business," "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and elsewhere in this report
may include forward-looking statements within the meaning of Section 21E of the
Security Exchange Act of 1934, as amended, that reflect the Company's current
views with respect to future events and financial performance. Forward-looking
statements are statements that are not historical facts. These statements can be
identified by the use of forward-looking terminology such as "believe,"
"expect," "may," "will," "should," "project," "plan," "seek," "intend," or
"anticipate" or the negative thereof or comparable terminology, and include
discussions of strategy, financial projections and estimates and their
underlying assumptions, statements regarding plans, objectives, expectations or
consequences of identified transactions or natural disasters, and statements
about the future performance, operations, products and services of the
companies.

The Company's business and operations are and will be subject to a variety of
risks, uncertainties and other factors. Consequently, actual results and
experience may materially differ from those contained in any forward-looking
statements. See "Risk Factors" in Item 1A of Part I of this report for risks,
uncertainties and other factors that could cause actual results and experience
to differ from those projected.

The forward-looking statements contained in this report are primarily based on
the Company's current expectations and projections about future events and
trends that it believes may affect the Company's business, financial condition,
results of operations, prospects, business strategy and financial needs. The
outcome of the events described in these forward-looking statements is subject
to risks, uncertainties, assumptions and other factors described in the section
captioned "Risk Factors" and elsewhere in this report. These risks are not
exhaustive. Other sections of this report include additional factors that could
adversely impact the Company's business and financial performance. Moreover, the
Company operates in a very competitive environment. New risks and uncertainties
emerge from time to time and it is not possible for the Company to predict all
risks and uncertainties that could have an impact on the forward-looking
statements contained in this report. The Company cannot provide assurance that
the results, events and circumstances reflected in the forward-looking
statements will be achieved or occur, and actual results, events or
circumstances could differ materially from those described in the
forward-looking statements.

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In addition, statements that "the Company believes" and similar statements
reflect the Company's beliefs and opinions on the relevant subject. These
statements are based upon information available to the Company as of the date of
this report, and while the Company believes such information forms a reasonable
basis for such statements, such information may be limited or incomplete, and
these statements should not be read to indicate that the Company have conducted
an exhaustive inquiry into, or review of, all potentially available relevant
information. These statements are inherently uncertain and investors are
cautioned not to unduly rely upon these statements.

This report and the documents that are referenced in this report and have filed
as exhibits to this report should be read with the understanding that actual
future results, levels of activity, performance and achievements may be
materially different from what the Company expects. The Company qualifies all of
its forward-looking statements by these cautionary statements.

The Company's forward-looking statements speak only as of the date of this
report or as of the date they were made. The Company undertakes no obligation to
publicly update or review any forward-looking statement, whether as a result of
new information, future developments or otherwise.

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