Global Indemnity Group, LLC (GBLI) stock intrinsic value fair value estimate & owner earnings analysis

Global Indemnity's main operating segment, Belmont Core, sells property and casualty insurance in the excess and surplus lines market, covering business risks that standard insurers often decline. Gross premiums written were $401.4 million in 2025, $400.0 million in 2024 and $369.7 million in 2023. California (13.6%), Florida (11.3%), Texas (10.1%) and New York (8.6%) are the largest states. Assumed reinsurance has grown from 3.8% of premiums in 2023 to 11.2% in 2025. A second segment, Belmont Non-Core, holds lines that are no longer written and earned only $0.4 million of premiums in 2025 versus $7.2 million in 2024. How we measure earnings. We start from operating cash flow, remove the swings in receivables, reserves and other insurance balances, and subtract stock compensation. Capital spending is not shown as a separate line in the cash flow statement. Capitalized software rose from $10.0 million to $17.3 million in 2025, so we left the 'other assets and liabilities' line inside our earnings figure rather than treat it as timing noise. Owner earnings per diluted share for 2016 to 2025 were $1.13, -$1.42, $0.05, $2.97, $0.05, -$0.58, $1.25, $1.10, $3.57 and $2.61. The record is lumpy: two years were negative, two were near zero, and the ten-year median is about $1.12. We anchor on 2022 to 2025 (median $1.93 per share, about $27 million). Revenue fell from $678 million in 2021 to $441 million in 2024, and the company recorded gross proceeds from sales of renewal rights of $28.0 million in 2021 and $30.0 million in 2022. In our view the earlier years describe a different, larger business, so we measure from 2022. Those sale proceeds are not part of our earnings. Owner earnings fell 27% in 2025 ($2.61 versus $3.57), so we assume no growth in the first year of the base case, which is below neither figure but not above the trailing rate. Base case, about $22 per share: owner earnings of $1.93 per share held flat for 20 years, then nothing. We credit no growth. Premiums were about flat in 2025 and no contract or backlog secures expansion. What continues is an operating insurance franchise that has produced positive owner earnings in eight of the last ten years, and we do not extend beyond 20 years because we can point to nothing that keeps earnings going beyond that. Bear case, about $5.90 per share: owner earnings of $0.80 per share for 10 years, then nothing. The named risk is reserve weakness in casualty lines. Prior-year casualty losses developed unfavorably by $15.9 million in 2025 and $12.0 million in 2024, roughly $1.10 per share each year, while property development was favorable by $6.1 million and $10.2 million. Total net adverse development was $9.9 million in 2025 and $1.8 million in 2024. Unpaid losses also reduced operating cash flow by about $50 million in each of 2024 and 2025. In this case casualty strengthening continues and takes most of the anchor earnings. Bull case, about $35 per share: owner earnings of about $3.10 per share, the average of 2024 and 2025, held for 20 years. This requires the recent underwriting results to persist: calendar-year combined ratio was 95.6% in 2024 and 98.6% in 2025 (94.6% excluding $15.7 million of losses from the January 2025 California wildfires). Net investment income of $62.7 million in 2025 supports earnings. What would make this wrong. If casualty reserves keep strengthening the bear case applies. If combined ratios stay in the mid-90s and premiums hold, the bull case applies. Our earnings measure leaves in bond premium and discount amortization ($11.7 million in 2025) and other non-cash items, so investment results feed into the figure. We did not credit growth from the increased reinsurance assumed or from Belmont Core's premium growth in 2023 to 2024 because neither is secured or a long-proven repeatable process. Net debt is not subtracted because the earnings are already after interest, and the company reported $0 interest paid in 2025, so no case is reduced by debt. Balance-sheet cash is not added on top of any case, so the value is that of the earnings stream alone.