Q2 2023 Global Indemnity Group LLC Earnings Call
Speaker 1: be a question and answer session. And if you would like to ask a question during this time, simply press star 1 on your telephone keypad. I will now turn the conference over to Mr. Steve Rees. Please go ahead. Thank you, Sarah. Today's conference call is being recorded. And if you would like to ask a question during this time,
Session and if you would like to ask a question. During this time simply press star one on your telephone keypad I will now turn the conference over to Mr. Steve Reese. Please go ahead.
Thank you Sir today's conference call is being recorded if you realize remarks may contain forward looking statements. Some of the forward looking statements can be identified by the use of forward looking words, including without limitation beliefs expectations.
Speaker 2: Some of the forward-looking statements can be identified by the use of forward-looking words, including without limitation, beliefs, expectations, or...
Our estimates we caution you that such forward looking statements should not be regarded as a representation by us that the few.
Speaker 2: caution you that such forward-looking statements should not be regarded as a representation by us that the future plans, estimates, or expectations contemplated by us will in fact be...
Plans estimates or expectations contemplated by us will in fact be achieved please.
Speaker 2: Please refer to our annual report on Form 10-K and our other filings with the SEC for description of the business environment in which we operate. And the important factors that may materialize.
Please refer to our annual report on Form 10-K, and our other filings with the SEC for a description of the business environment in which we operate.
Important factors that may materially affect our results.
Speaker 2: Global NMD Group LLC is not under any obligation and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. It is now my pleasure to turn the call over to Mr. Jay Brown, Chief Executive Officer of Global NMD.
Well I'm going to have any group LLC is not under any obligation and expressly disclaims any obligation to update or alter its forward looking statements, whether as a result of new information future events or otherwise not my pleasure to turn the call over to Mr. Jay Brown, Chief Executive Officer of global uncertainty.
Thank you Steve.
Speaker 3: Good morning and thanks to everyone on the call for taking the time this morning to join us for our 2nd quarter results discussion.
Good morning, and thanks to everyone on the call for taking the time this morning to join us for our.
Our second quarter results discussion.
Speaker 3: Before we review, we do our results for the quarter. Let me address the elephant in the room.
Before we review with you our results for the quarter, let me address the elephant in the room.
Speaker 3: As we stated in our June 9th press release, the company is engaged in conversations that could potentially lead to a transaction to sell a portion of our insurance operations for the entire company.
As we stated in our June 9th Press release, the company has engaged in conversations that could potentially lead to a transaction to sell a portion of our insurance operations for the entire company.
Speaker 3: These conversations are continuing and as stated in our press release. We do not intend to make any further comments unless or until it has been completed or suspended.
These conversations are continuing and as stated in our press release, we do not intend to make any further comments unless or until it has been completed or suspend it.
Speaker 3: As such, we will not be making any further comments today. That said, let's try to get to the next slide.
As such we will not be making any further comments today.
That said, let's turn to the results for the second quarter.
Speaker 3: As we noted in our last two calls, the significant restructuring that has occurred in the prior two quarters.
As we noted in our last two calls the significant restructuring that has occurred in the prior two quarters.
Speaker 3: Does not make direct comparisons to prior year overall results somewhat.
Not make direct comparisons to prior year overall results somewhat difficult.
Speaker 3: Our ongoing operating segments are primarily commercial specialty and to a much lesser extent, reinsurance operations.
Our ongoing operating rating segments are primarily commercial specialty and to a much lesser extent reinsurance operations.
I will focus my comments on commercial specialty results.
Speaker 3: I will focus my comments on commercial specialty results. As this is the portion of our operation, which will dictate future underwriting results.
This is the portion of our operation, which will dictate future underwriting results.
Speaker 3: Following my comments, Tom will address all the financial aspects of our gap results.
Following my comments, Tom will address all of the financial aspects of our GAAP results.
Okay.
Speaker 3: The long term operating metrics we are focused on for ongoing commercial, our loss and loss expense ratios consistent with our long term average in the mid 50s.
The long term operating metrics, we are focused on four ongoing commercial our loss and loss expense ratios consistent with our long term average in the mid fifties.
Speaker 3: And expense ratio of below 38%. This year trending to 36% in a couple of years.
And expense ratio of below 38% this year trending to 36% and a couple of years.
Speaker 3: A combined ratio in the low 90s and growth averaging 10%.
The combined ratio in the low nineties and growth averaging 10%.
Okay.
Speaker 3: I am very encouraged by our 2nd quarter accent year results. Albeit we still have some work to do.
I am very encouraged by our second quarter accident year results, albeit we still have some work to do.
Speaker 3: For the 2nd quarter, our accident year loss and loss expense ratio was 57.5%. Our expense ratio was 36.2%. And the company back in constant in March is suffering had beenUrban product responsibility losssty
For the second quarter, our accident year loss and loss expense ratio was 57, 5%.
Our expense ratio was 36, 2%.
And the combined ratio was 93, 7%.
Speaker 3: In addition, despite the high industry catastrophic losses in the quarter, our ongoing efforts to increase the proportion of our business that's casual.
In addition, despite the high industry cat catastrophic losses in the quarter.
Our ongoing efforts to increase the proportion of our business, that's casually and continue to manage our catastrophic property exposures, we only incurred $4 1 million in cat losses, which are reflected in the 57, 5% loss and loss expense ratio I referenced above.
Speaker 3: and continue to manage our catastrophic property exposures, we only incurred $4.1 million in cat losses, which are reflected in the 57.5% loss and loss expense ratio I referenced above.
All accident, all excellent profitability figures, which are consistent with our metrics, but unfortunately, our core business had a very disappointing growth of minus 6% in the second quarter.
Speaker 3: all excellent profitability figures, which are consistent with our metrics, but unfortunately our core business had a very disappointing growth of minus 6% in the second quarter.
Okay.
Speaker 3: The lack of growth was all driven by just one of our three divisions.
The lack of growth was all driven by just one of our three divisions.
Speaker 3: This division targets specific agents with concentrated books of single class business, where substantial re-underwriting and pricing actions resulted in a loss of significant amount of premium of $15 million compared to the same period in 2022.
This division targets specific agents with concentrated books, a single class business or substantial re underwriting and pricing actions resulted in a loss of significant amount of premium up $15 million compared to the same period in 2022 and.
Speaker 3: In sharp contrast, our core package, which has been Feed magazine since last month,
In sharp contrast, our core package specialty business grew 13%.
Speaker 3: And our retail focus bacon express and collectible business group 14.
And our retail focus Bacon express on collectible business grew 14%.
Okay.
Speaker 3: As an insurance underwriter, we are consistently faced with balancing profitable pricing and underwriting with our growth objective.
As an insurance underwriter, we are consistently folks graced with balancing profitable pricing and underwriting with our growth objectives.
Speaker 3: Given our overarching objective to be a consistent, profitable underwriter, this is one of those periods where we sacrificed some unprofitable business to benefit the bottom line.
Given our over arching objective to be a consistent profitable underwriter. This is one of those periods, where we sacrificed some unprofitable business to benefit the bottom line.
Speaker 3: Tom will provide more details, but our decision to play defense on interest rates. By dramatically shortening the duration of our bond portfolio, starting 18 months ago. It's really beginning to pay dividends as our investment book yield is rising every month. With investment income coming in at 13M for the quarter. Roughly double that of a year ago.
Tom will provide more details, but our decision to play defense on interest rates by dramatically shorting shortening the duration of our bond portfolio, starting 18 months ago.
It's really beginning to pay dividends as our.
Investment book yield is rising every month with investment income coming in at 13 million for the quarter roughly double that of a year ago.
With $800 million of our investment portfolio maturing in the next six quarters.
Speaker 3: with $800 million of our investment portfolio maturing in the next six quarters.
Speaker 3: We fully expect this number should keep rising every quarter.
We fully expect this number should keep rising every quarter.
Yeah.
Yeah.
Speaker 3: During the quarter, we increased the board authorized share repurchase from 60 million to 135 million.
During the quarter.
We increased the board authorized share repurchase from $50 million to $60 million $235 million.
Because of the extremely small volume of shares traded each day are.
Speaker 3: Because of the extremely small volume of shares traded each day.
Speaker 3: Are we purchase efforts are focused on reverse inquiry opportunity?
Our repurchase efforts are focused on reverse inquiry opportunities.
Speaker 3: During the quarter, we repurchased 200,000 shares at an average price of $28.
During the quarter, we repurchased 200000 shares at an average price of $28.
Speaker 3: and have $101 million remaining available for share repurchases.
And have 101 million remaining available for share repurchases.
Standing back this is a pretty good quarter.
Speaker 3: But we obviously have more work to do to both achieve these property profitability results. On a consistent basis, quarter after quarter with higher growth to deliver an acceptable return for our shareholders. Tom.
Well, we obviously have more work to do to bulk achieve these property profitability results on a consistent basis quarter after quarter with higher growth.
Liver, an acceptable return for our shareholders.
Tom.
Thank you Jay.
And good morning, everyone.
Speaker 4: Net income for the second quarter of 2023 was $9.3 million.
Net income for the second quarter of 2020 393 million and.
Speaker 4: and adjusted operating income, which excludes realized losses and results of accident lines, was $6.9 million.
And adjusted operating income, which excludes realized losses and results of exited lines was $6 9 million.
Speaker 4: We are pleased with the direction of our results. Actions taken to focus on core business lines, reduce expenses, reduce catastrophe exposure, and reposition the investment portfolio are being realized.
We are pleased with the direction of our results.
<unk> taken to focus on core business lines reduce expenses.
<unk> catastrophe exposure and repositioned the investment portfolio are being realized.
Speaker 4: Book value per share increased from $45.68 at March 31st, 2023 to $46.03 at June 30th, 2023 due to good underwriting results. Strong investment income.
Book value per share increased from $45 68 at March 31 2023.
To $46 three.
June 32023, due to good underwriting results strong investment income and share repurchases as Jay noted during the quarter 200000 shares where required.
Speaker 4: As Jay noted, during the quarter, 200,000 shares were required.
Speaker 4: Since the share repurchase program was initiated in the fourth quarter of 2022, the company has repurchased 1,357,082 shares from third parties for an aggregate amount of 34 million.
Since the share repurchase program was initiated in the fourth quarter of 2022. The company has repurchased 1 million 357082 shares from third parties for an aggregate amount of $34 million.
I will now discuss some of the key drivers of net income starting with investment performance.
Speaker 3: I will now discuss some of the key drivers of net income, starting with investment performance.
Investment income was $13 2 million during the second quarter of 2023.
Speaker 3: Investment income was 13.2 million during the second quarter of 2023.
On a year to date basis investment income is $25 2 million comprised of $24 $1 million from fixed income investments at $1 1 million from alternative investments.
Speaker 3: Investment income is twenty five point two million comprised of twenty four point one million from fixed income investments at 1.1 million from alternative investment.
Speaker 3: This compares to 8 and a half million in 2022. Comprised of 13.3 million from fixed income investors.
This compares to eight and a half million dollars in 2022 comprised of $13 $3 million from fixed income investments and negative investment income of $4 8 million from alternatives.
Speaker 3: and negative investment income of $4.8 million from Alternr.
Speaker 3: Investment income from the fixed income portfolio is almost double what it was in 2022 due to the actions taken in early 2022 to sell longer dated securities and short duration.
Investment income from the fixed income portfolio with Zelle, most double what it was in 2020 due to the actions taken in early 2022 to sell longer dated securities and shortened duration.
Speaker 3: Book yield on the portfolio is 3.8% at June 30th, 2023. And duration is 1.4 years.
Book yield on the portfolio was three 8% at June 32023, and duration is one four years.
As a comparison.
Speaker 3: At December 31st, 2021, book yield on the fixed income portfolio was 2.2%. And duration was 3.2 years.
At December 31, 2021 book yield on the fixed income portfolio was two 2% and duration was three two years at December 31, 2022 book yield was three 5% and duration was one seven years.
Speaker 3: At December 31st, 2022, book yield was 3.5% and duration was 1.7%.
Speaker 3: between June 30th, 2023 and December 31st, 2024, we expect our investment portfolio will generate approximately 900 million of cashflow. This is comprised of 800 million from maturities and the remainder from investment in cash flows.
Between June 32023, and December 31, 2024, we expect our investment portfolio will generate approximately $900 million of cash flow. This is comprised of 800 million from maturity and the remainder from investment income.
Speaker 3: We expect these funds will be invested at rates that will further increase.
We expect these funds will be invested at rates that will further increase book yield.
Speaker 3: Realized losses in the second quarter of 2023 were 0.8 million, mainly due to selling several assets to improve overall investment returns.
Realized losses in the second quarter of 2023 were 0.8 million, mainly due to selling several assets to improve overall investment returns unrealized losses increased by $3 2 million in the second quarter of 2023 due to the rise in rates.
Speaker 3: Unrealized losses increased by 3.2 million in the second quarter of 2023 due to the rise in rates. The short duration fixed income portfolio helped minimize unrealized losses.
The short duration fixed income portfolio helped minimize unrealized losses.
Moving to underwriting.
Speaker 3: In the second quarter of 2023, our continuing lines had an accident year underwriting profit of $6.4 million compared to an underwriting profit of $4.5 million in 2022.
In the second quarter of 2023 are continuing lines had an accident year underwriting profit of six 4 million compared to an underwriting profit of $4 5 million in 2022.
Speaker 3: Continuing lines in the 2nd quarter performed in line with our expectations. The continuing lines accident, your combined ratio in the 2nd quarter was 94.9%.
Continuing lines in the second quarter performed in line with our expectations. The continuing lines accident year combined ratio in the second quarter was 94, 9%.
On a consolidated basis in the second quarter of 2023, there was an underwriting gain of $4 3 million compared to an underwriting gain of $2 1 million in 2021.
Speaker 3: In the second quarter of 2023, there was an underwriting gain of 4.3 million compared to an underwriting gain of 2.1 million in 2022.
Speaker 3: On a consolidated basis prior year reserve development was flat.
On a consolidated basis prior year reserve development was flat.
Speaker 3: Exiting lines had good development of approximately 6M, primarily for property catastrophe reserves. Within our continuing lines, loss reserves were strengthened by approximately 6M primarily related to non-renewed casualty business.
<unk> lines had good development of approximately $6 million, primarily from property catastrophe reserves within our continuing lines loss reserves were strengthened by approximately $6 million primarily related to non renewed casualty business.
In the second quarter of 2023 gross written premium in our continuing lines was $110 2 million compared to $151 5 million in 2022.
Speaker 3: In the second quarter of 2023, gross written premium and our continuing lines was 110.2 million compared to 151.5 million in 2022.
Speaker 3: Much of the decrease was planned. Reinsurance operations wrote 14.8 million in 2023, compared to 46.5 million in 2022.
Much of the decrease was planned.
Reinsurance operations wrote $14 8 million in 2023 compared to $46 5 million in 2022.
Speaker 3: This decline is mainly due to an armor knowing a casualty treaty in 2023.
This decline is mainly due to not renewing a casualty treaty in 2023.
Speaker 3: Within commercial specialty package, which is comprised of pan American business, the company's primary division within its commercial specialty.
Within commercial specialty packaging and Fs, which is comprised with Pan America business. The company's primary division within its commercial specialty segment. It increased gross written premiums from $58 3 million to $62 7 million in 2023.
Speaker 3: It increased gross written premiums from 58.3 million to 62.7 million in 2023. Package specialty grew approximately 8% driven by new agency appointments.
Packaged specialty grew approximately 8% driven by new agency appointments strong rate increases as well as exposure growth in both property and general liability.
Speaker 3: Strong rate increases as well as exposure growth in both property and general liability. Excluding underperforming business that was terminated. Package specialty group by 13%
Excluding underperforming business that was terminated packaged specialty grew by 13%.
Speaker 3: Targeted specialty, which contains the remaining business lines in commercial specialty at 32.7 million of premium in 2023, compared to 46.7 million in the 2nd quarter of 2022.
Targeted specialty which contains the remaining business lines and commercial specialty at $32 $7 million of premium in 2023 compared to $46 7 million in the second quarter of 2022.
Speaker 3: As Jay noted, this decline was mainly due to not running business from wholesale agents that were not providing an acceptable return and managing catastrophe capacity. Within targeted special
As Jay noted this decline was mainly due to not writing business from wholesale agents that we're not providing an acceptable return and managing catastrophe capacity.
Within targeted specialty several products growth.
Speaker 3: The vacant express product generated 7.9 million of premium in the 2nd, quarter of 23, which is up 23% compared to the 2nd, quarter of 22. Collector policies for private collectors grew approximately 4%.
They can express product generated $7 $9 million of premium in the second quarter of 2003, which is up 23% compared to the second quarter of 2002 collective policies for private collectors grew approximately 4%.
Okay.
Speaker 3: Accident lines include the farm business sold in August 2022.
Exited lines include the foreign business sold in August 2022.
Speaker 3: The specialty property book that was sold in the 4th quarter of 2021 as well as other lines we have.
The specialty property book that was sold in the fourth quarter of 2021 as well as other lines. We have exited exited lines are continuing to run down as expected net written premium for the quarter was negative $7 million.
Speaker 3: Accident lines are continuing to run down as expected. Net written premium for the quarter was negative 0.7 million.
Speaker 3: Corporate expenses in the second quarter of 2023 were 5 million compared to 3 million in 2022. 2022 included a 2.7 million cares act employee retention credit. We're pleased with.
Corporate expenses in the second quarter of 2023 were $5 million compared to $3 million in 2022.
2022 included a $2 7 million cares act employee retention credit.
We are pleased with our results this quarter.
Speaker 3: Our core business is providing good returns, loss ratios performed as expected. Compared to 2022, expenses are much lower due to actions taken in early 2023.
Our core business is providing good returns loss ratios performed as expected compared to 2022 expenses are much lower due to actions taken in early 2023, the companys fixed income portfolios book yield is three 8%.
Speaker 3: The company's fixed income portfolios book yield is 3.8%. 96% of the portfolio is invested in fixed maturity investments and a little bit in cash.
96% of the portfolio was invested in fixed maturity investments and a little bit in cash.
Speaker 3: The fixed income portfolio has an average rating of A and a duration of 1.4 years.
Our fixed income portfolio has an average rating of AA and a duration of one four years maturities and investment income are expected to generate $900 million of cash flow between June 32023, and December 31, 2000 and for the.
Speaker 3: Maturities and investment income are expected to generate 900 million of cash flow between June 30th, 2023 and December 31st, 2004. The funds that become available are currently being invested at yields higher than 5%.
Funds that become available are currently being invested at yields higher than 5%.
Speaker 3: the actions that have been taken are providing value to our shareholders. Thank you.
The actions that have been taken are providing value to our shareholders. Thank you.
We will now take your questions.
Speaker 1: Thank you. If you have a question, please press star 1 on your telephone keypad. If you have queued up for a question and wish to withdraw, you may simply press star 1 again. Again, it is...
Thank you if you have a question. Please press star one on your telephone keypad. If you have queued up for a question and wish to withdraw you may simply press star one again.
Again, it is star one to ask a question, we will pause for a moment.
Okay.
Okay.
Okay.
Speaker 1: And there are no questions. Oh, my apologies. We do have a question from the line of Ross Haberman with RLH Investment. Your line is OK. OK.
And there are no questions at all.
My apologies, we do have a question from the line of Ross Haberman with R. L. H.
Investment your line is open.
Speaker 5: Thank you gentlemen, I'm sorry I got on a bit late. Did you mention anything about the press release you issued, I want to say about a month ago, you said something about a number of companies approached you in an informal or formal way and can you say anything about the status of that now? Thank you. The conversations are continuing.
Thank you Chairman I'm, sorry, I got I got on a bit late.
Did you mention anything about the press release, you issued I want to say about a month ago.
You said something about a number of.
Companies have approached you in an informal or formal way.
Can you say anything about the status of that now thank you.
The conversations are continuing.
But that's all that's all we're going as fast as all banks out there.
Okay.
Go ahead.
Speaker 5: The question I had, a follow up, how much is left in terms of your buyback authorization?
Other questions.
A follow up how much is left in terms of your of your buyback authorization.
<unk> Jason.
I'm sorry could you repeat the question please I couldnt quite hear it.
Speaker 3: Sorry, could you repeat the question, please? I couldn't quite hear it.
Speaker 4: How much is left in terms of your buyback authorization in dollars? $100 to $1 million. And that lasts through the end of the calendar year.
How much is left in terms of your buyback authorization.
$101 million.
And that in that last through the end of the calendar year.
It's open for several years still.
Speaker 3: Okay, thank you very much. I greatly appreciate your help. The best of luck.
Okay. Thank you very much I really appreciate your help the best of luck.
Once again, ladies and gentlemen, if you have a question it is star one.
Speaker 1: Once again, ladies and gentlemen, if you have a question, it is star one.
Speaker 1: Our next question is from John Shafter. What forward earnings impact should we see from the reduced reinsurance cost?
Your next question is from John Shuster.
What forward earnings impact should we see from the reduced reinsurance costs.
Speaker 6: Well, our reinsurance costs last year, uh, or June 1st, renewal were approximately 10Million dollars annually. This year, when we renewed the cost dropped to approximately 5Million and that's due to the actions primarily due to the actions. That we've taken to reduce our catastrophe exposed business. We were able to buy that.
Well, our reinsurance cost last year before our June 1st renewal were approximately $10 million annually. This year, when we renewed the cost dropped to approximately $5 million and that's due to the actions primarily due to the action.
Is that we've taken to reduce our catastrophe exposed business, we were able to buy less.
Okay.
Thank you once again it is star one to ask a question.
Speaker 1: Thank you. Once again, it is star one to ask a question.
Speaker 1: your next question comes from the line of com car with fact investment yeah i mean
Your next question comes from the line of Tom <unk> with Zacks investment Your line is open.
Speaker 7: Good morning guys. Couple of quick ones here.
Good morning, guys.
Couple of quick ones here.
Speaker 7: On the Exedline business and the net earned premiums, can you give any more color on how that trends down? Will there still be earned premiums the rest of the year, maybe in the 24? I know it's going to be a small amount.
On the exited lines business in the net earned premiums can you give any more color on how that trends down a little.
They will be earned premiums the rest of the year, maybe in the 'twenty four I know, it's going to be a small amount.
Speaker 4: Yeah, it's going to be a very small amount. I mean, hang on just one second, Tom. Round numbers.
Yes, it's going to be a very small amount.
Hang on just one second time round round numbers.
Speaker 4: Um, we, uh, just bear with me for 1 2nd. We only had 6Million of, uh, 6.2Million of, uh, earned premium in the 2nd quarter. Uh, we were 18.2Million year to date, so we went from 12 to 6. We're probably going to go down somewhere between 2 and 3 and by the end of the year, it should be virtually enough.
Theyre just bear with me for one second.
We only had 6 million of <unk>.
$6 $2 million of earned premium in the second quarter.
Were $18 2 million year to date. So we went from 12 to six we're probably going to go down somewhere between two and three and by the end of the year it should be virtually nothing.
Speaker 7: Okay, that's helpful. Can you repeat on the targeted specialty lines, the decrease there? Can you kind of give color repeat what you said? I think you mentioned dropping wholesalers or was there anything else?
Okay. That's helpful.
Can you repeat on the targeted specialty lines. The decrease there can you kind of give color repeat what you said I think you had mentioned.
Dropping wholesalers or was there anything else.
Yeah.
Well, we had a couple of things in our in some of our wholesale business.
Speaker 3: Well, we had a couple of things in our in some of our wholesale business.
Speaker 3: We non-renewed a business that was not providing an adequate return on capital. We also were managing catastrophe exposure. We were able to grow in our vacant express line and we also grew our individual collector policies by 4%. So down a little bit in one area, up in a few others.
We nonrenewed.
Business that was not providing an adequate return on capital. We also were managing to.
Catastrophe exposure, we are able to grow in our vacant Express line and we also grew our <unk>.
Individual collector policies by 4%, so down a little bit one area up in a few others.
Okay.
Speaker 3: Okay, that makes all Tom was really going to increase overall profitability is Jane. No, that we had to sacrifice some business to improve overall results. When we, when we started the year after our review in the 4th quarter. We set specific targets for re, underwriting and pricing changes. Uh, for individual agents that had large blocks of business with us. And a number of those have resulted in non renewal.
Tom was really to increase overall profitability as Jay noted, we had to sacrifice some business to improve overall results. When we when we started the year. After our review in the fourth quarter, we set specific targets for re underwriting and pricing changes for.
Per individual agents that had large blocks of business with us and a number of those.
Have resulted in non renewals.
Yes.
Okay. That's helpful.
Speaker 7: And on the book yield, and I can't do the math in my head, but if you're investing that much above 5% by the end of next year, does that mean a book yield could reach 5%?
And on the book yield.
Do the math in my head, but if you're investing that much above 5% by the end of next year does that mean, a book yield could reach.
Five are over.
Speaker 3: And I know that's our portfolio today. Tom is round numbers. A 1,350,000. We have 800 maturing where the extra 100 when I noted 900,100,000 of that I'm using round numbers was investment income. You're going to get a yield that afraid to stay where they are today. We should have yields that are approaching the mid force, but that's kind of what you should be expecting.
And I know that there are no if at all.
Supply base, our portfolio today, Tom is round numbers of $1 billion to $3 50, we have 800 maturing where arrived the extra 101, I noted 900 $100 million of that I'm using round numbers was investment income youre going to get a yield that if rates stay where they are today.
We should have yields that.
We are approaching the mid fours, but.
That's kind of what you should be expecting.
Got it.
Speaker 3: All right, last question is the, and we guys have a lot of access capital, is sort of M&A or any tucking lines of business.
Alright last question is.
I know you guys have a lot of excess capital is.
Sort of <unk>.
M&A or any tuck in lines of business.
Speaker 3: On the table right now, or just focus on share buybacks and operating results.
On the table right now or are you just focus on share buybacks and operating results.
Okay.
Speaker 4: Primarily on share buybacks at this point in time, but we're always open to additional expansion if we see an opportunity out there.
Primarily on share buybacks at this point in time, but we're always open to additional expansion if we see an opportunity out there.
Okay, Great. That's all I have I'm just wondering.
Thank you.
Your next question comes from the line of Guy Baron with Spring view Your line is open.
Speaker 1: Your next question comes from the line of Guy Barron with Springview. Your line is open.
Speaker 8: Hi, Jay. Hi, folks. I had a question about excess capital similar to the...
Hi, Jay.
I had a question about excess capital similar to the.
Speaker 8: previous caller, could you give us a sense of how much excess capital, what the amount it is of your excess capital above and beyond?
The previous caller.
Could you give us a sense of how much excess capital what the amount is of your excess capital above and beyond.
What is required to support the ongoing.
Speaker 8: required to support the ongoing business.
<unk>.
Yes.
It's the training.
Between 100 $200 million right now and it's always hard to specify exactly what it is.
Speaker 4: Between 100 and 200M right now, it's always hard to specify exactly what it is. The key for us is we have excess capital and excess of the 101M that we have remaining authorization for share of buyback.
The key for us since we have excess capital in excess of $101 million that we bought have remaining authorization for share buyback.
Speaker 4: It will increase over time because of our shrinkage of our business down to the core business. So we expect our excess capital will probably grow over the next 2 years absent a substantial change in our forecast of probably another 100 million or so.
It will increase over time because of our shrinkage of their our.
Our business down to the core business.
So we expect our excess capital will probably grow over the next two years absent a substantial change in our forecast probably another $100 million or so.
Great. Thank you so much.
Youre welcome.
Speaker 1: Your next question is from Justin Saunders. Are we bullish about getting growth back in targeted specialty segments after the book was cleaned up?
Your next question is from Justin Saunders.
Are we bullish about getting growth back in targeted specialty segments. After the book was cleaned up.
Are we bullish.
Speaker 4: Are we bullish? I think we're confident that we'll shift from shrinking to growing. We will have probably a similar comparison in the second six months of the year before we roll into 24. But in 24 against the base that we'll have in 23, we assume that we'll be able to hit our targets with 10% or more.
I think we're confident that will shift from shrinking to growing.
We will have probably a similar comparison in the second six months of the year before we roll into 'twenty four but in 'twenty four against the base that we'll have in 'twenty three we assume that we'll be able to hit our targets of 10% or more.
Speaker 1: Thank you. Your next question comes from the line of Andrew Vindigni with General American Investors Company.
Thank you. Your next question comes from the line of Andrew Finn Digby with General American Investors Company. Your line is open.
Speaker 9: Hi, I noticed that there's a roughly an $8 difference between your book value and your book value X investment losses. So I think that if you take that 800 million divided by 1350, roughly speaking straight line, you might get that back as the portfolio rolls off.
Hi.
There was roughly an eight dollar difference between your book value in your book value ex investment losses.
That if you.
Take that $800 million divided by $13 50 rough.
Roughly speaking straight line you might get.
That back as the portfolio rolls off is there any kind of it.
Speaker 4: No, it's absolutely correct as I, as I noted, we have 800 million maturing between now and the end of next year. We have another. 200 and round numbers, 250M that's maturing in 2025. We're expecting that most of that unrealized loss will be recovered over that time period.
No that's absolutely correct as I as I noted, we have $800 million maturing between now and the end of next year. We have another 200 in round numbers $250 million. That's maturing in 2025, we're expecting that most of that unrealized loss will be recovered over that.
Time period.
So it's pretty it's roughly proportional roughly linear.
Speaker 9: So it's roughly proportional, roughly linear, roughly speaking.
Roughly speaking.
Speaker 4: Yeah, I haven't mapped it out month by month, but as I noted, we expect that most of the unrealized loss will be recovered over, over the time period.
Yes, I haven't mapped it out amongst by modified as I noted, we expect that most of the unrealized loss will be recovered over over that time period.
Speaker 3: Now, I noticed that you put back stock and you paid kind of in the high 20s roughly and you stock set 34 given the expected increase in real book value with the losses going away. Maybe you could be a little more aggressive and buying back stock or still be price sensitive, I guess. Thank you for your time.
And I noticed that the Q.
Bought back stock.
And you paid the kind of in the high Twenty's roughly.
These facts are 34, given given the expected increase in real real book value with the losses going away.
Maybe.
Maybe it could be a little more aggressive in buying back stock or so.
Price sensitive I guess.
I would agree with your observation.
Thank you.
As a reminder, ladies and gentlemen, it is star one to ask a question.
Speaker 1: As a reminder, ladies and gentlemen, it is star one to ask a question.
Speaker 1: There are no further questions at this time. This concludes today's conference call. Thank you for joining. You may now disconnect your line.
There are no further questions at this time. This concludes today's conference call. Thank you for joining you may now disconnect. Your.
Lines.
[music].
Yes.
[music].
Okay.
[music].
Okay.
[music].
Yes.
[music].
Yes.
[music].