By Thomas Kerr, CFA
NASDAQ: GBLI
READ THE FULL GBLI RESEARCH REPORT
Full Year 2025 Financial Results
Global Indemnity Group (NASDAQ: GBLI) reported 2025 financial and operating results, which showed solid accident-year underwriting income growth. Current accident year underwriting income increased 73.9% to $32.7 million from $18.8 million in the prior year period (excluding California wildfires). The current accident year underwriting income as reported was $16.9 million. As a reminder, losses from the California wildfires were approximately $15.7 million (pre-tax).
For 2025, Belmont Core gross written premiums were$401.4 million compared to $400.0 million in 2024.
Excluding terminated products in 2024, Belmont Core gross written premiums grew 9.2%. Operating income (non-GAAP) was $40.2 million in 2025 compared to $42.9 million in 2024 (excluding California wildfires). The decline was primarily due to higher corporate expenses resulting from increased personnel and professional costs for the build-out of Katalyx, as well as merger & acquisition activity.
Net income for the year was $24.9 million, or $1.75 per share, compared to $42.8 million, or $3.12 per share in 2024. This decline reflects the $12.0 million, or $0.84 per share, after-tax impact of the California wildfire losses.
Net investment income was $62.7 million, which was roughly flat from $62.4 million in 2024. Fixed maturities income was flat at $59.5 million in both years, reflecting a stable portfolio duration and reinvestment activity that offset small yield changes. The income-generating core of the portfolio remains stable with an average 1.0-year duration and average AA- rated bond portfolio.
Total investment return was $67.0 million, or 4.7%, compared to $78.3 million, or 5.5%, in 2024. The year-over-year decline is the result of lower net unrealized gains ($8.0 million versus $15.4 million) and net realized losses of $3.7 million versus gains of $0.5 million in 2024, both mark-to-market items that do not affect recurring investment income. Average invested assets were $1.43 billion for the year.
Book yield on the investment portfolio was 4.4% at the end of 2025.
As a result of the current low duration on fixed income securities (approximately 1.0 year), the company has a large amount of investments maturing throughout the rest of 2026 that can be reinvested in longer duration maturities to improve overall investment returns.
Segment Review
Belmont Insurance Companies, or “Belmont Core,” was previously known as the Penn-America segment and consists of five state-regulated insurance carriers: Penn-Patriot Insurance Company, Diamond State Insurance Company, Penn-Star Insurance Company, Penn-America Insurance Company, and United National Insurance Company. Each of these carriers holds an “A” (Excellent) financial strength rating from AM Best.
Belmont Core reported gross written premiums of $401.4 million, compared to $400.0 million in 2024. Excluding terminated products in 2024, Belmont Core gross written premiums increased 9.2%. Wholesale Commercial premiums rose 3.0% to $256.0 million, primarily due to rate increases, but also faced increased competition in the E&S segment. This was lower than the 8.0% premium growth experienced in the 1st nine months of 2025.
Vacant Express grew 15.5% to $46.8 million, supported by organic growth, new agency appointments, and new product introductions. Assumed written premiums increased 76.7% to $44.9 million for the full year, reflecting 17 new treaties that started in 2024 and 2025. However, the assumed book remains a growing but still modest portion of total premiums as the Valyn Re platform continues to scale. Collectibles premiums increased 8.4% to $17.2 million, driven by organic growth and new product offerings.
Combined Ratios
The calendar year combined ratio was 98.6%, compared to 95.6% in 2024. The increase reflects a four-point impact from wildfires, partially offset by a one-point improvement in the combined ratio excluding wildfire losses. The loss ratio was 58.7%, compared to 56.6% in 2024, which reflected a four-point impact from wildfires and was offset by a 1.9-point improvement in the loss ratio excluding wildfires. The expense ratio was 39.9%, compared to 39.0% in 2024. The increase was consistent across all quarterly periods and reflects the continued build-out of the Katalyx platform. The company was also spending more than its historical business development fees to find new opportunities for growth.
The current accident year combined ratio excluding California Wildfires improved in each period throughout 2025, reaching 92.2% for the full yearcompared to 95.4% in 2024. The progression was: 94.8% in the 1st quarter, 94.7% for the 1st half, 93.2% for the first nine months, and 92.2% for the full year.
Balance Sheet
At the end of 2025, the company had unrestricted cash of $65.5 million and total investments of $1.38 billion. Approximately 96.3% of the investment portfolio consists of fixed income securities. The average credit quality of the fixed income portfolio remains at AA-. Shareholders’ equity increased to $706.6 million.
New Estimates
The company expects Belmont Core gross premiums to increase approximately 15%-20% in 2026 as the product set has improved and the company has done a good job of reducing lines that didn’t meet underwriting criteria.
We adjust our 2026 total revenue estimate to $504.3 million, which includes $436.9 million in Net Earned Premiums and $64.2 million in net Investment Income. Our new 2026 EPS estimate is $2.62. As the consolidated expense ratio continues to drift down, we believe EPS of over $4.00 can be achieved in the next 2-3 years.
Valuation
GBLI book value per share increased to $48.96 as of December 31, 2025, compared to $48.88 as of September 30, 2025. On March 5, 2026, the Board of Directors approved a distribution (dividend) of $0.35 per common share to be paid on March 30, 2026. The current dividend yield is approximately 4.87%.
Management stated its long-term financial goals, which are:
1) Grow the overall business at a rate of 10% or higher,
2) Achieve a combined ratio in the low 90’s,
3) Manage the expense ratio to a competitive level of 36%-37%.
GBLI stock is currently selling at 58.8% of book value based on December 31, 2025, shareholders’ equity. We separate our price target into near-term and long-term objectives. Our near-term target is $49.00, which assumes GBLI stock will trade near book value per share. 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.
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