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2nd Quarter 2026 Financial Results
On August 5, 2026, Global Indemnity (NASDAQ: GBLI) reported 2nd quarter 2026 financial and operating results which were above our expectations. The underlying insurance operating trends remain strong and consistent with recent results. Accident Year Combined Ratio was 94.7% for the quarter, producing underwriting income of $5.8 million, and the catastrophe experience was favorable, and non-catastrophe experience and results remained strong and consistent.
In the quarter, net income was $11.1 million, or $0.76 per share, compared to $10.3 million, or $0.71 per share, in the prior year period. Current accident year underwriting income increased 3% to $5.8 million, with a loss ratio of 53.8% and a combined ratio of 94.7%. Belmont Core gross written premiums grew 7% to $117.3 million. Pretax Adjusted Operating Contribution was $19.9 million and Adjusted Return on Equity was 12.1%.
The company emphasized that expense pressure tied to technology investments remains well above long-term target levels (which is approximately a 36% expense ratio). The company continues to invest in Katalyx, Kaleidoscope, and related technology platform capabilities. The company expects significant operating leverage as these initiatives drive efficiency, AI-assisted decision-making, and support future growth.
Highlights from the key Belmont Core segment (specialty P&C insurance) include gross written premiums increasing by 7% year over year to $117.3 million in the 2nd quarter of 2026 and 3% to $213.7 million for the first 6 months of the year. This was driven by growth across several specialty lines. Wholesale Commercial premiums returned to growth in the 2nd quarter, rising 2% to $70.1 million, while first half premiums declined slightly to $131.6 million as the company maintained disciplined pricing and underwriting standards amid competitive market conditions. Vacant Express and Collectibles continued to expand, with premiums increasing 5% and 13%, respectively, supported by new agency relationships, organic growth, and rate increases. Assumed Reinsurance was a key growth driver, rising 79% in the 2nd quarter and 43% for the 1st half due to new treaties launched in 2025 and 2026. Specialty Products declined 21% to $15.5 million as previously terminated business continued to run off.
In terms of capital position, shareholders’ equity increased to $706.9 million as of June 30, 2026, up from $702.6 million at year-end 2025, which was 2% growth before returning $10.3 million to shareholders, despite a temporary $2.8 million after-tax decline in the fair value of the fixed-income portfolio. Book value per share was $48.28 as of June 30, 2026, compared to $48.96 at December 31, 2025. During the first 6 months of 2026, the company returned $10.3 million to shareholders through dividends. Since its 2003 IPO, the company has returned a total of $659.8 million to shareholders, including $522.2 million through share repurchases and $137.6 million through dividends and other distributions.
Balance Sheet
At the end of the 2nd quarter, the company had unrestricted cash of $97.5 million and total investments of $1.32 billion. Approximately 97.5% of the investment portfolio consists of fixed income securities. The average credit quality of the fixed income portfolio remains at AA-. The current book yield on the fixed income portfolio increased to 4.42% with an average duration of 1.08 years as of June 30, 2026.
As a result of the current low duration on fixed income securities, the company has over $600 million of investments maturing throughout the rest of 2026 that can be reinvested in longer duration maturities to improve overall investment returns.
Estimates
Management indicated Belmont Core gross written premiums for the full year are expected to increase approximately 15% compared to 2025 levels. Based on management commentary and overall state of the E&S market, we adjust our 2026 total revenue estimate to $480.0 million, which includes $414.5 million in Net Earned Premiums and $63.7 million in net Investment Income. Our new 2026 EPS estimate is $2.37. As the consolidated expense ratio drifts down after 2027, we believe EPS of over $4.00 can be achieved in the next 2-3 years.
Valuation
GBLI book value per share was $48.28 as of June 30, 2026, compared to $48.96 as of December 31, 2025. On June 3, 2026, the Board of Directors approved a distribution (dividend) of $0.35 per common share, which was paid on June 29, 2026. The current dividend yield is approximately 4.91%.
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 59.1% of book value based on June 30, 2026 shareholders’ equity. We separate our price target into near-term and long-term objectives. Our near-term target remains at $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.
Although not a perfect comp, Bill Ackman’s Howard Hughes Holdings (HHH) recently purchased Vantage Group Holdings, a privately held P&C company, for $2.1 billion. The price/book multiple for the transaction was in the 1.4x-1.5x range. Although GBLI is not directly comparable, the transaction demonstrates the valuation premium strategic buyers may assign to high-quality specialty P&C platforms.
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