The shares of Global Indemnity plc (GBLI) scaled a 52-week high of $29.93 on Jan 6, 2015. This bullish run came on the back of the buyout of American Reliable Insurance Company from Assurant, Inc. (AIZ). With roughly 0.03 million shares traded in the last session, the stock finally closed at $27.71 per share.
According to Nasdaq, the one-year return from the stock came in at 13.1%, ahead of other property and casualty insurers like AXIS Capital Holdings Limited (AXS) and RenaissanceRe Holdings Ltd. (RNR) whose one-year return were 6.4% and 3.9%, respectively.
Global Indemnity started the year 2015 with the acquisition of American Reliable Insurance which was announced in Oct 2014. The consideration value was set at $394 million of which $114 million was paid in cash and remaining was assumed in customary insurance related liabilities, obligations, and mandates.
American Reliable Insurance specializes in writing specialty personal lines and agricultural property and casualty insurance in Scottsdale, AZ, and Omaha, NE. With this acquisition, the property and casualty insurer will not only be able to increase its footprint in the United States but also bring value to its employees, wholesale and MGA partners with its complimentary products, infrastructure as well as underwriting expertise.
Additionally, Global Indemnity expects the completion of this acquisition to double both the premiums and revenues of the company as well as be accretive to earnings in 2015.
Notably, with respect to earnings performance, this property and casualty insurer reported third-quarter operating income of 40 cents per share, improving from 24 cents in the year-ago quarter. The upside was backed by improved gross premiums written at Reinsurance Operations.
Currently, Global Indemnity carries a Zacks Rank #3 (Hold). Going forward, we expect the momentum to continue based on improved gross premiums written.
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