Global Indemnity Group (NASDAQ:GBLI) executives highlighted improving underwriting performance and steady investment income during the company’s year-end 2025 earnings call, while also acknowledging elevated expenses tied to a multi-year technology overhaul and a more competitive pricing environment in parts of the excess and surplus (E&S) market.
Underwriting results strengthened in the fourth quarter
Chief Executive Joseph W. Brown said fourth-quarter results extended “very strong underlying positive insurance operating trends” seen over recent quarters. The company posted a fourth-quarter combined ratio of 89.3, producing an underwriting profit of $11 million. Brown noted the result compared with a 96.6% combined ratio in the fourth quarter of the prior year and marked the company’s “first sub 90% quarterly accident year combined ratio in the past several years.”
Full-year performance shaped by California wildfire and reserve development
Management repeatedly pointed to a large California wildfire loss in the first quarter as a major factor in 2025 results. Chief Financial Officer Brian Riley said the event resulted in $15.7 million of underwriting loss, adding 4 points to the combined ratio and producing a $12 million after-tax loss.
Excluding the wildfire impact, Riley said operating income (excluding the after-tax impact of unrealized losses on equity securities) was $40.2 million, compared with $42.9 million in 2024.
Brown also described a quarter-by-quarter improvement in accident year results during 2025, excluding the wildfire loss. He said the year-to-date accident results improved each quarter, with a sequence of 94.8%, 94.7%, 93.2%, and 92.2%, and a full-year accident result of 96.2% even including the wildfire losses.
In the fourth quarter, the company recorded an adverse prior-year reserve adjustment of $9 million, which Brown said was about 1.2% of year-end carried reserves. Both Brown and Riley said the adverse development was largely tied to accident years 2020 through 2022, related to “a couple of programs” that have since been terminated and to New York City habitational risks, with Riley characterizing the pressure as “mainly severity driven.”
Riley said calendar year underwriting income increased by about $5 million as the combined ratio improved to 94.6% from 95.6% in 2024. He said the current accident year combined ratio was 92.2, an improvement of 3.2 points from 2024, with the loss ratio better by 4.1 points. Riley broke out the loss ratio improvement as property at 44.8 (better by 9.3 points) and casualty at 57.6 (better by around 1 point).
Premium growth: core lines up, but competition weighed on Penn-America
Brown said the company continued to grow its “Core Belmont” book of business at 9%, while overall reported premium growth was flat as the company continued trimming underperforming specialty programs.
Riley quantified Belmont Core gross written premiums at $401 million in 2025 compared with $400 million in 2024. Excluding terminated products, he said gross written premiums increased 9% to $401 million from $367 million in 2024.
Management cited several areas of growth within the ongoing book:
- Assumed reinsurance: Brown cited 77% growth; Riley said assumed reinsurance gross written premiums grew 77% to $45 million, driven by new treaties added in 2024 and 2025, bringing in-force treaties to 17 at year-end.
- VacantExpress: Brown cited 16% growth; Riley also reported 16% growth, driven by continued agency expansion.
- Collectibles: Brown cited 8% growth; Riley also reported 8%.
- Penn-America Wholesale: Brown cited 3% growth and called it a disappointment after 8% growth through the first nine months of 2025; Riley said Penn-America finished the year up 3% at $256 million, citing a decline in new business in the fourth quarter due to increased E&S competition and competition from “embedded markets.” Riley added that retention remained strong at 70%.
On the competitive environment, Brown told analysts he saw a “major shift” in price competition in the E&S wholesale space, driven by existing E&S competitors and the admitted market “coming back into the property markets in a big way.” He said the company anticipated “headwinds going into 2026” and was making adjustments in real time to stay aligned with competition where it could still achieve acceptable profitability.
Brown nevertheless said the company expected Belmont Core gross premiums to grow in the 15% to 20% range or more in 2026, citing underwriting discipline and product improvements following the trimming of business that did not meet underwriting criteria.
Investments, expenses, and capital deployment
On the investment portfolio, Brown said net investment income in the fourth quarter was $15.3 million, down from $16.1 million in the prior period. He emphasized the portfolio’s short duration—about 1 year—and said he was comfortable with the defensive positioning given uncertainty, citing “very high-quality fixed income investments” and flexibility to redeploy when conditions stabilize.
Riley reported full-year investment income of $62.7 million, up slightly from $62.4 million in 2024, with the average yield steady at 4.4%. He said the fixed income portfolio’s current book yield was 4.4%, with average duration of approximately 1 year and average credit quality at AA-. Riley also noted the investment portfolio’s growth was “stunted” by loss reserve runoff in the Belmont Non-Core segment, which he said declined by $67 million to $237 million at year-end.
Expenses were a recurring topic. Riley said corporate expenses were higher by $6 million, driven by personnel costs and professional fees for building out the Katalyx distribution platform and mergers and acquisitions activity. In the Q&A, he said the fourth-quarter expense ratio was “a little over 40.5,” and management indicated expense levels were expected to remain elevated through 2026, with improvement expected beginning in 2027.
Brown discussed progress on the company’s digital transformation, describing it as year two of a three-year effort spanning software, infrastructure, and data. He said the Kaleidoscope platform had worked “exactly as envisioned” for the first two deployed products and that wholesale commercial, VacantExpress, and Collectibles were expected to be fully integrated by year-end. Brown said 98% of data center servers had been moved to a cloud configuration, with remaining servers scheduled to move mid-year, and that internal data had been migrated to a cloud-based “fabric lakehouse,” with reporting being reconciled across old and new sources.
Capital and shareholder returns also came up. Riley said discretionary capital—defined as equity in excess of that required to maintain the strongest levels with rating agencies—was $284 million at year-end. Asked about return on equity expectations following modest book value per share growth, Brown said book value before dividends should increase a minimum of 6% to 7% per year with the current structure for both of the next two years. He also said that, excluding excess capital, the return on the underlying insurance and investment businesses would be in the “low- to mid-teens.”
When questioned about share repurchases with the stock trading below book value, Brown said there was no change in the company’s position, adding that the board believed investments in the business created an opportunity to deploy excess capital through new products within existing channels or by adding “additional arms” to the company. Brown said the company had been active in reviewing acquisition opportunities, but emphasized that management’s primary focus remained growing existing business, calling it “the most predictable growth” and the best way to sustain profitability.
About Global Indemnity Group (NASDAQ:GBLI)
Global Indemnity Group (NASDAQ: GBLI) is a specialty property and casualty insurance holding company headquartered in Princeton, New Jersey. Through its subsidiaries, the company focuses on underwriting commercial niche insurance products designed to meet the needs of small to mid-sized businesses and select specialty markets. Its approach centers on disciplined underwriting, customized policy structures and targeted distribution channels to address coverage gaps often underserved by standard carriers.
The company’s product portfolio encompasses surety and fidelity bonds, workers’ compensation, general liability, commercial auto, professional liability and environmental liability.
