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premiums were primarily due to selling the manufactured home & dwelling and farm businesses and the non-renewal of a casualty reinsurance treaty.

Combined Ratios

The consolidated combined ratio was 99.7% for the full year (Loss Ratio 61.1% and Expense Ratio 38.6%) as compared to 98.8% (Loss Ratio 59.6% and Expense Ratio 39.2%) for 2022. The consolidated accident year property loss ratio improved by 6.6 points to 55.0% in 2023 from 61.6% in 2022. The improvement is primarily due to lower non-catastrophe claims frequency and severity within Penn- America partially offset by higher catastrophe claims frequency. The consolidated accident year casualty loss ratio increased by 0.5 point to 61.1% in 2023 from 60.6% in 2022. Higher claims severity in the two problematic books mentioned above contributed to the increase.

In the Penn-America segment, the accident year combined ratio was 95.2% for 2023 (Loss Ratio 57.4% and Expense Ratio 37.8%) as compared to 96.5% (Loss Ratio 59.0% and Expense Ratio 37.5%) for 2022. Excluding the New York habitational book, Penn-America's accident year combined ratio was 93.8%. The calendar year combined ratio for Penn-America was 103.6% for 2023 (Loss Ratio 65.8% and Expense Ratio 37.8%) compared to 97.4% (Loss Ratio 59.8% and Expense Ratio 37.6%) in 2022. Penn- America's 2023 calendar year combined ratio was impacted by loss reserve strengthening primarily from casualty business for the 2019 through 2022 accident years. The New York habitational book comprised $13.2 million of strengthening. It also impacted results in the 2023 accident year. Excluding the New York habitational book, Penn-America's calendar year combined ratio was 98.6%.

In the Non-Core Operations segment, the calendar year combined ratio was 87.9% for 2023 (Loss Ratio 47.1% and Expense Ratio 40.8%) which compares to 101.1% (Loss Ratio 59.4% and Expense Ratio 41.7%) in 2022. The decline in the loss ratio resulted from the commutation of a reinsurance treaty and favorable development in the exited Farm, Ranch & Stable business.

Suspension of Exploration of Sale or Merger

On December 7, 2023, the company announced that it suspended the exploration of the sale or merger of Penn-America, Global Indemnity's insurance group, and Global Indemnity itself.

Global Indemnity's Chairman Saul Fox stated: "Our merger & acquisition market information that suggested we pursue a transaction at this time was not realized." Chief Executive Officer Jay Brown, added, "Given the Company's debt-free balance sheet and strong reserve base, coupled with our enviable decades-long profitability, outstanding management team, and extensive national agent and broker network, Penn-America is well-positioned to achieve exceptional financial results for our owners."

The company also announced that it increased the size of its Board of Directors to seven members to accommodate the new designation of Fred Karlinsky to the Board. Mr. Karlinsky is Co-Chair of Greenberg Traurig, LLP's global insurance practice. Greenberg Traurig is a multi-national law firm with over 2,600 professionals operating in 45 offices around the world.

Potential Acquisition

On March 15, 2024, various insurance online trade journals reported that Global Indemnity had made an offer to acquire James River Group (NASDAQ: JRVR) for $15 per share in a deal worth approximately $550 million. James River Group is a Bermuda-based insurance holding company that owns and operates a group of specialty insurance companies in the Excess & Surplus Lines and Specialty Admitted Insurance markets. In November 2023, James River announced they were exploring strategic alternatives to maximize shareholder value. Neither company has commented on this report.

Valuation and Estimates

GBLI book value per share increased $2.66 per share, or 8.2% (including $1.00 per share of dividends paid during 2023), to $47.53 as of December 31, 2023 compared to $44.87 at the end of 2022. On March 6, 2024, the Board of Directors approved a dividend of $0.35 per common share payable on March 28, 2024, a 40% increase over the prior quarterly dividend rate of $0.25 per common share. The current dividend yield is approximately 4.81%.

Or 2024 total revenue estimate is $453.7 million which includes $387.2 million in Net Earned Premiums and $66.5 million in Investment Income. Our 2024 EPS estimate is adjusted to $2.43.

GBLI stock is currently selling at 61.9% of book value based on December 31, 2023 shareholders' equity. We maintain our long-term price target of $55.00 per share based on the stock selling at a small premium to future book value per share.

KEY INVESTMENT POINTS

Source: investors.gbli.com

• Global Indemnity Group, LLC (NYSE:GBLI) is a specialty property and casualty insurance company that has been operating nationwide since the early 2000's.
• The company is led by an experienced management team, including a Chief Executive who has decades of experience in the property & casualty insurance business.
• The company operates through two primary segments: Penn-America and Non-Core Operations.
• Penn-Americatargets specific, defined groups of insureds predominantly in the excess and surplus lines, or non-admitted, small marketplace.
• The company has a solid liquidity position as of the end of 2023 with $38.0 million in unrestricted cash and equivalents and $1.35 billion in investments, primarily comprised of highly liquid fixed income investments.
• The company has no traditional debt.
• GBLI currently has a market capitalization of $400 million and generated $528.1 million in total revenues in 2023.
• Based on the most recent reported results as of 12/31/23, the company is selling at approximately 61.9% of book value. Using a future book value scenario analysis valuation methodology, we place a value for GBLI at$55.00 per share.

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.

During the 4th quarter of 2023, the company re-evaluated its segments and determined that the business should be managed through two reportable segments: Penn-America and Non-Core Operations. The Penn-America segment comprises the company's core products which include Wholesale Commercial, Programs, InsurTech, and Assumed Reinsurance. The Non-Core Operations segment contains lines of business that have been de-emphasized or are no longer being written.

SEGMENTS & BUSINESS UNITS

Penn-America

The Penn-America segment distributes specialty property and casualty insurance products in the excess and surplus lines marketplace. Penn-America targets main street Specialty Excess & Surplus Lines focusing on small businesses such as Artisan Contractors, Habitational (Landlord), General Services, Vacant Properties, Restaurants, Bars, Taverns, Commercial Buildings, and Collectibles.

Penn-America is one of the larger providers of insurance to main street businesses and built this position by focusing on this market for over 40 years. Penn-America underwrites commercial coverages for 900 classes of casualty business and 200 classes of property business. Companies within the Insurance Operations are eligible to write on a surplus lines (non-admitted) basis and others are licensed to write on an admitted basis in all 50 U.S. states and related territories.

This provides the company with flexibility in designing products and in determining rates to meet emerging risks and discontinuities in the marketplace. Penn-America's insurance products target specific, defined groups of insureds with customized coverage to meet their needs. The primary business divisions within the Penn-America segment include:

• Wholesale Commercialdistributes property and general liability products for small commercial businesses through a select network of wholesale general agents with specific binding authority using company administered systems to rate, quote and issue policies.
• Programsdistributes property and general liability niche products through program administrators with specific binding authority. Program administrators generally use their own proprietary systems, for which the Company's rates and underwriting criteria are integrated.
• InsurTechoffers property and general liability products distributed using company administered systems, and include Collectibles, digital directto-consumer insurance coverage for owners of collections, and VacantExpress, insurance coverage for owners of properties under construction, under renovation, vacant, or rented, distributed through wholesale general agents and retail agents.
• Assumed Reinsuranceis composed of individual treaties with small-to-medium sized financially sound insurers in niche product lines that are contracted through reinsurance brokers/intermediaries. These treaties are focused on the US property and casualty market and will typically involve risk sharing by either the carrier or the producer of the business. Assumed reinsurance treaties are acquired through brokers.

Non-Core Operations

The Non-Core Operations segment represents lines of business that have been de-emphasized or are no longer being written.

The two key activities of Non-Core Operations are managing transition service agreements related to the sales of the company's renewal rights and handling claims activity and loss reserves on de-emphasized and terminated business.

At the end of 2022, the Company ceased writing new business and non-renewed existing policies for its four brokerage divisions: Professional Liability, Excess Casualty, Environmental, and Middle Market Property. 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. On October 26, 2021, the Company sold the renewal rights related to its manufactured and dwelling homes business. In 2021, the Company decided to cease writing certain Property Brokerage business which was part of the Commercial Specialty segment (now known as Penn-America), as well as non-renewing several treaties within the prior Reinsurance Operations segment which are now included in Non-Core Operations.

The manufactured home, dwelling, motorcycle, watercraft, certain homeowners products, and farm, ranch & equine business within Non-Core Operations operated primarily in the standard or admitted markets and were distributed through retail agents, wholesale general agents, and brokers. These insurance products were either underwritten via limited binding authority, specific binding authority, or by internal personnel. The Property Brokerage product within Non-Core Operations operated predominantly in the excess and surplus lines or non-admitted markets and were distributed through wholesale brokers and underwritten by the Company's personnel and selected brokers with limited binding authority. The retrocessional reinsurance treaties within Non-Core Operations were distributed through brokers and on a direct basis.

Information technology development initiatives related to business lines within Non-Core Operations have been discontinued. Additional capital has and will become available as a result of de-emphasizing and exiting non-core business. This additional capital will support future growth in the company's Penn- America segment and provide capital for business initiatives including share repurchases.

Source: GBLI Investor Presentation

• IFG Companies
• James River Group Holdings
• Kinsale Capital Group, Inc.
• Markel Corporation
• Nationwide Insurance
• RLI Corporation
• RSUI Group
• Selective Insurance Group, Inc.
• The Hartford
• The Travelers Companies, Inc.
• Westchester Surplus Lines Insurance Co
• W.R. Berkley Corporation

In addition to the companies mentioned above, the company is facing competition from other standard line companies who are continuing to write risks that traditionally had been written by excess and surplus lines carriers, Bermuda companies who are establishing relationships with wholesale brokers and purchasing carriers, and other excess and surplus lines competitors.

Competition may take the form of lower prices, broader coverage, greater product flexibility, higher quality services, reputation and financial strength or higher ratings by independent rating agencies. The company differentiates itself from the competition by distributing Wholesale Commercial and InsurTech products that are not readily available in the market. Each of the company's products has its own distinct competitive environment. The company seeks to compete through innovative products, appropriate pricing, niche underwriting expertise, and quality service to policyholders, general agencies and brokers.

SUMMARY

We believe Global Indemnity is entering a new level of profitability based on new business lines and eliminating unprofitable lines of business as well as improved cost controls.

The company is currently selling at a Price/Book value that does not reflect the future growth opportunities for the company over the next 3-5 years. GBLI may likely experience multiple expansion that approaches industry averages. Even with potential volatile earnings that can often be associated with P&C insurance companies, Global Indemnity can continue to add earnings to shareholders equity and increase book value over time.

The company pays a dividend that offers an above market average dividend yield which should offer some level of stability for equity investors. The dividend yield is currently 4.81%.

Investors may be getting the rare opportunity to get in on the ground floor of a dynamic P&C insurance company that is poised for rapid growth in book value. With the company trading at such a large discount to book value, a margin of safety appears to exist at this time.