Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that registrant was required to submit such files.). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~October 28, 2021,~~April 29, 2022, the registrant had outstanding ~~10,534,245~~10,592,278 Class A Common Shares and 3,947,206 Class B Common Shares.

	(Unaudited) September 30, 2021			December 31, 2020		(Unaudited) March 31, 2022			December 31, 2021
ASSETS
Fixed maturities:
Available for sale, at fair value (amortized cost: $1,181,112 and $1,149,009; net of allowance for expected credit losses of $0 at September 30, 2021 and December 31, 2020)	$	1,199,969		$	1,191,186
Available for sale, at fair value (amortized cost: $1,145,141 and $1,193,746; net of allowance for expected credit losses of $0 at March 31, 2022 and December 31, 2021)						$	1,129,276		$	1,201,866
Equity securities, at fair value		90,294			98,990		22,822			99,978
Other invested assets		155,346			97,018		147,490			152,651
Total investments		1,445,609			1,387,194		1,299,588			1,454,495

Cash and cash equivalents		40,578			67,359		157,896			78,278
Premium receivables, net of allowance for expected credit losses of $3,090 at September 30, 2021 and $2,900 at December 31, 2020		126,170			109,431
Reinsurance receivables, net of allowance for expected credit losses of $8,992 at September 30, 2021 and December 31, 2020		92,898			88,708
Premium receivables, net of allowance for expected credit losses of $2,937 at March 31, 2022 and $2,996 at December 31, 2021							134,278			128,444
Reinsurance receivables, net of allowance for expected credit losses of $8,992 at March 31, 2022 and December 31, 2021							99,678			99,864
Funds held by ceding insurers		31,334			45,480		26,644			27,958
Deferred federal income taxes		39,852			34,265		45,410			37,329
Deferred acquisition costs		70,269			65,195		65,333			60,331
Intangible assets		20,565			20,962		20,164			20,261
Goodwill		6,521			6,521		5,398			5,398
Prepaid reinsurance premiums		14,431			12,881		52,619			53,494
Receivable for securities sold		86			0		7,080			0
Lease right of use assets		19,963			21,077		15,607			16,051
Other assets		42,345			45,835		29,801			30,906
Total assets	$	1,950,621		$	1,904,908	$	1,959,496		$	2,012,809

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Unpaid losses and loss adjustment expenses	$	731,765		$	662,811	$	770,332		$	759,904
Unearned premiums		313,007			291,495		326,350			316,566
Ceded balances payable		9,411			8,943		13,247			35,340
Payable for securities purchased		0			4,667		0			794
Contingent commissions		8,206			10,832		4,958			7,903
Debt		126,394			126,288		126,465			126,430
Lease liabilities		21,700			22,950		18,589			19,079
Other liabilities		44,952			58,598		29,900			40,172
Total liabilities	$	1,255,435		$	1,186,584	$	1,289,841		$	1,306,188

Commitments and contingencies (Note 12)		—			—
Commitments and contingencies (Note 10)							—			—

Shareholders’ equity:
Series A cumulative fixed rate preferred shares, $1,000 par value; 100,000,000 shares authorized, shares issued and outstanding: 4,000 and 4,000 shares, respectively, liquidation preference: $1,000 per share and $1,000 per share, respectively		4,000			4,000		4,000			4,000
Common shares: no par value; 900,000,000 common shares authorized; class A common shares issued: 10,551,338 and 10,263,722 respectively; class A common shares outstanding: 10,534,245, and 10,263,722, respectively; class B common shares issued and outstanding: 3,947,206 and 4,133,366, respectively		0			0
Common shares: no par value; 900,000,000 common shares authorized; class A common shares issued: 10,614,555 and 10,574,589 respectively; class A common shares outstanding: 10,592,278 and 10,557,093, respectively; class B common shares issued and outstanding: 3,947,206 and 3,947,206, respectively							0			0
Additional paid-in capital		448,776			445,051		448,266			447,406
Accumulated other comprehensive income, net of tax		15,036			34,308
Accumulated other comprehensive income (loss), net of tax							(12,772	)		6,404
Retained earnings		227,853			234,965		230,771			249,301
Class A common shares in treasury, at cost: 17,093 and 0 shares, respectively		(479	)		0
Class A common shares in treasury, at cost: 22,277 and 17,496 shares, respectively							(610	)		(490	)
Total shareholders’ equity		695,186			718,324		669,655			706,621
Total liabilities and shareholders’ equity	$	1,950,621		$	1,904,908	$	1,959,496		$	2,012,809

	(Unaudited) Quarters Ended September 30,						(Unaudited) Nine Months Ended September 30,						(Unaudited) Quarters Ended March 31,
	2021			2020			2021			2020			2022			2021
Revenues:
Gross written premiums	$	174,303		$	143,749		$	513,097		$	464,022		$	190,983		$	163,558

Net written premiums	$	162,299		$	130,611		$	470,635		$	416,987		$	159,482		$	147,683

Net earned premiums	$	157,565		$	140,302		$	450,673		$	426,617		$	148,823		$	143,700
Net investment income		9,344			11,746			29,813			19,516			6,592			9,836
Net realized investment gains (losses)		(310	)		7,323			7,342			(22,332	)		(25,385	)		3,819
Other income		389			542			1,287			1,473			426			377
Total revenues		166,988			159,913			489,115			425,274			130,456			157,732

Losses and Expenses:
Net losses and loss adjustment expenses		109,195			97,148			290,916			242,092			84,695			90,783
Acquisition costs and other underwriting expenses		59,282			53,268			171,259			163,258			56,692			54,764
Corporate and other operating expenses		5,387			21,196			15,992			34,037			4,660			4,276
Interest expense		2,596			3,620			7,887			13,197			2,595			2,595
Loss on extinguishment of debt		0			3,060			0			3,060
Income (loss) before income taxes		(9,472	)		(18,379	)		3,061			(30,370	)		(18,186	)		5,314
Income tax benefit		(1,759	)		(3,209	)		(1,118	)		(8,173	)		(3,413	)		(203	)
Net income (loss)	$	(7,713	)	$	(15,170	)	$	4,179		$	(22,197	)	$	(14,773	)	$	5,517
Less: preferred stock distributions		110			42			330			42			110			110
Net income (loss) available to common shareholders	$	(7,823	)	$	(15,212	)	$	3,849		$	(22,239	)	$	(14,883	)	$	5,407

Per share data:
Net income (loss) available to common shareholders (1)
Basic	$	(0.54	)	$	(1.06	)	$	0.27		$	(1.56	)	$	(1.03	)	$	0.38
Diluted	$	(0.54	)	$	(1.06	)	$	0.26		$	(1.56	)	$	(1.03	)	$	0.37
Weighted-average number of shares outstanding
Basic		14,445,434			14,304,426			14,413,006			14,276,594			14,514,950			14,380,423
Diluted		14,445,434			14,304,426			14,650,599			14,276,594			14,514,950			14,640,658
Cash dividends/distributions declared per common share	$	0.25		$	0.25		$	0.75		$	0.75
Cash distributions declared per common share													$	0.25		$	0.25

(Unaudited)
Quarters Ended September 30,

(Unaudited)
Nine Months Ended September 30,

2021

2020

2021

2020

Net income (loss)

$
(7,713
)

$
(15,170
)

$
4,179

$
(22,197
)

Other comprehensive income (loss), net of tax:

Unrealized holding gains (losses)

(2,636
)

(448
)

(18,337
)

30,748

Reclassification adjustment for (gains) included in net income (loss)

(1,132
)

(2,104
)

(611
)

(13,205
)
Unrealized foreign currency translation gains (losses)

(164
)

579

(324
)

568

Other comprehensive income (loss), net of tax

(3,932
)

(1,973
)

(19,272
)

18,111

Comprehensive income (loss), net of tax

$
(11,645
)

$
(17,143
)

$
(15,093
)

$
(4,086
)

	(Unaudited) Quarters Ended March 31,
	2022			2021
Net income (loss)	$	(14,773	)	$	5,517

Other comprehensive income (loss), net of tax:
Unrealized holding losses		(42,372	)		(25,178	)
Reclassification adjustment for losses included in net income (loss)		23,085			816
Unrealized foreign currency translation gains (losses)		111			(93	)
Other comprehensive loss, net of tax		(19,176	)		(24,455	)

Comprehensive loss, net of tax	$	(33,949	)	$	(18,938	)

	(Unaudited) Quarters Ended September 30,						(Unaudited) Nine Months Ended September 30,						(Unaudited) Quarters Ended March 31,
	2021			2020			2021			2020			2022			2021
Number of Series A Cumulative Fixed Rate Preferred Shares
Number at beginning of period		4,000			0			4,000			0
Preferred shares issued		0			4,000			0			4,000
Number at end of period		4,000			4,000			4,000			4,000
Number at beginning and end of period														4,000			4,000
Number of class A common shares issued:
Number at beginning of period		10,532,270			10,333,540			10,263,722			10,282,277			10,574,589			10,263,722
Common shares issued under share incentive plans, net of forfeitures		(2,404	)		(230	)		40,240			(576	)		15,156			20,104
Common shares issued to directors		21,472			29,893			61,216			81,502			24,810			20,006
Reduction in treasury shares due to redomestication		0			(120,500	)		0			(120,500	)
Share conversion		0			0			186,160			0
Number at end of period		10,551,338			10,242,703			10,551,338			10,242,703			10,614,555			10,303,832
Number of class B common shares issued:
Number at beginning of period		3,947,206			4,133,366			4,133,366			4,133,366
Share conversion		0			0			(186,160	)		0
Number at end of period		3,947,206			4,133,366			3,947,206			4,133,366
Number at beginning and end of period														3,947,206			4,133,366
Par value of Series A Cumulative Fixed Rate Preferred Shares
Balance at beginning of period	$	4,000		$	0		$	4,000		$	0
Preferred shares issued		0			4,000			0			4,000
Balance at end of period	$	4,000		$	4,000		$	4,000		$	4,000
Par value of class A common shares:
Balance at beginning and end of period	$	0		$	1		$	0		$	1		$	4,000		$	4,000
Reduction in par due to redomestication		0			(1	)		0			(1	)
Balance at end of period	$	0		$	0		$	0		$	0
Par value of class B common shares:
Balance at beginning of period	$	0		$	1		$	0		$	1
Reduction in par due to redomestication		0			(1	)		0			(1	)
Balance at end of period	$	0		$	0		$	0		$	0
Additional paid-in capital:
Balance at beginning of period	$	447,804		$	445,173		$	445,051		$	442,403		$	447,406		$	445,051
Reduction in treasury shares due to redomestication		0			(4,126	)		0			(4,126	)
Share compensation plans		972			2,390			3,725			5,160			860			1,148
Balance at end of period	$	448,776		$	443,437		$	448,776		$	443,437		$	448,266		$	446,199
Accumulated other comprehensive income, net of deferred income tax:
Accumulated other comprehensive income (loss), net of deferred income tax:
Balance at beginning of period	$	18,968		$	37,693		$	34,308		$	17,609		$	6,404		$	34,308
Other comprehensive income (loss):
Change in unrealized holding gains (losses)		(3,768	)		(2,552	)		(18,948	)		17,543			(19,287	)		(24,362	)
Unrealized foreign currency translation gains (losses)		(164	)		579			(324	)		568			111			(93	)
Other comprehensive income (loss)		(3,932	)		(1,973	)		(19,272	)		18,111			(19,176	)		(24,455	)
Balance at end of period	$	15,036		$	35,720		$	15,036		$	35,720		$	(12,772	)	$	9,853
Retained earnings:
Balance at beginning of period	$	239,272		$	256,442		$	234,965		$	270,768		$	249,301		$	234,965
Net income (loss)		(7,713	)		(15,170	)		4,179			(22,197	)		(14,773	)		5,517
Preferred share distributions		(110	)		(42	)		(330	)		(42	)		(110	)		(110	)
Dividends / distributions to shareholders ($0.25 per share per quarter in 2021 and 2020)		(3,596	)		(3,674	)		(10,961	)		(10,973	)
Distributions to shareholders ($0.25 per share per quarter in 2022 and 2021)														(3,647	)		(3,684	)
Balance at end of period	$	227,853		$	237,556		$	227,853		$	237,556		$	230,771		$	236,688
Number of treasury shares:
Number at beginning of period		17,093			120,104			0			115,221			17,496			0
Class A common shares purchased		0			396			16,915			5,120			4,781			9,815
Retirement of shares		0			0			0			159
Forfeited shares		0			0			178			0			0			178
Reduction in treasury shares due to redomestication		0			(120,500	)		0			(120,500	)
Number at end of period		17,093			0			17,093			0			22,277			9,993
Treasury shares, at cost:
Balance at beginning of period	$	(479	)	$	(4,116	)	$	0		$	(3,973	)	$	(490	)	$	0
Class A common shares purchased, at cost		0			(10	)		(479	)		(153	)		(120	)		(283	)
Reduction in treasury shares due to redomestication		0			4,126			0			4,126
Balance at end of period	$	(479	)	$	0		$	(479	)	$	0		$	(610	)	$	(283	)
Total shareholders’ equity	$	695,186		$	720,713		$	695,186		$	720,713		$	669,655		$	696,457

	(Unaudited) Nine Months Ended September 30,						(Unaudited) Quarters Ended March 31,
	2021			2020			2022			2021
Cash flows from operating activities:
Net income (loss)	$	4,179		$	(22,197	)	$	(14,773	)	$	5,517
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Amortization and depreciation		6,080			5,121			1,605			1,956
Amortization of debt issuance costs		106			182			35			35
Restricted stock and stock option expense		3,725			5,157			860			1,148
Deferred federal income taxes		(1,129	)		(8,303	)		(3,413	)		(203	)
Amortization of bond premium and discount, net		4,734			4,828			1,461			1,395
Net realized investment (gains) losses		(7,342	)		22,332			25,385			(3,819	)
Loss on extinguishment of debt		0			3,060
(Income) loss from equity method investments, net of distributions		(2,512	)		8,004			483			(584	)
Changes in:
Premium receivables, net		(16,739	)		8,215			(5,834	)		(7,276	)
Reinsurance receivables, net		(4,190	)		(28,695	)		186			3,277
Funds held by ceding insurers		13,736			2,132			1,455			8,672
Unpaid losses and loss adjustment expenses		68,954			39,749			10,428			13,097
Unearned premiums		21,512			(10,787	)		9,784			5,517
Ceded balances payable		468			(10,828	)		(22,093	)		1,358
Other assets and liabilities		(16,278	)		1,211			(8,559	)		(10,329	)
Contingent commissions		(2,626	)		(599	)		(2,945	)		(6,353	)
Federal income tax receivable/payable		0			10,989
Deferred acquisition costs		(5,074	)		3,207			(5,002	)		(503	)
Prepaid reinsurance premiums		(1,550	)		1,158			875			(1,533	)
Net cash provided by operating activities		66,054			33,936
Net cash provided by (used for) operating activities								(10,062	)		11,372
Cash flows from investing activities:
Proceeds from sale of fixed maturities		889,080			600,962			140,150			364,277
Proceeds from sale of equity securities		48,661			563,926			86,173			37,475
Proceeds from maturity of fixed maturities		71,137			89,875			16,312			28,721
Proceeds from maturity of preferred stock		666			0
Proceeds from other invested assets		14,183			1,823			4,679			2,080
Amounts received (paid) in connection with derivatives		685			(20,130	)		2,567			(262	)
Purchases of fixed maturities		(1,001,066	)		(702,727	)		(145,955	)		(441,964	)
Purchases of equity securities		(34,530	)		(393,963	)		(10,362	)		(17,566	)
Purchases of other invested assets		(70,000	)		(297	)
Net cash provided by (used for) investing activities		(81,184	)		139,469			93,564			(27,239	)
Cash flows from financing activities:
Net repayments under margin borrowing facility		0			(73,629	)
Dividends / distributions paid to common shareholders		(10,842	)		(10,683	)
Distributions paid to common shareholders								(3,654	)		(3,634	)
Distributions paid to preferred shareholders		(330	)		0			(110	)		(110	)
Issuance of series A cumulative fixed rate preferred shares		0			4,000
Purchases of class A common shares		(479	)		(153	)		(120	)		(283	)
Redemption of subordinated notes		0			(100,000	)
Net cash used for financing activities		(11,651	)		(180,465	)		(3,884	)		(4,027	)
Net change in cash and cash equivalents		(26,781	)		(7,060	)		79,618			(19,894	)
Cash and cash equivalents at beginning of period		67,359			44,271			78,278			67,359
Cash and cash equivalents at end of period	$	40,578		$	37,211		$	157,896		$	47,465

References to “the Company” refer to Global Indemnity Group, LLC and its subsidiaries. If prior to August 28, 2020, references to the Company refer to Global Indemnity Limited and its subsidiaries.

Global Indemnity Group, LLC (“Global Indemnity” or “the Company”), a Delaware limited liability company formed on June 23, 2020, replaced Global Indemnity Limited, incorporated in the Cayman Islands as an exempted company with limited liability, as the ultimate parent company of the Global Indemnity group of companies as a result of a redomestication transaction completed on August 28, 2020. Global Indemnity Group, LLC’s class A common shares are publicly traded on the ~~NASDAQ Global Select Market~~New York Stock Exchange under the ticker symbol GBLI. Global Indemnity Group, LLC’s predecessors have been publicly traded since 2003. See Note 2 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s ~~2020~~2021 Annual Report on Form 10-K for additional information regarding the redomestication.

On October 26, 2021, the Company sold the renewal rights related to its manufactured and dwelling homes products which was part of the Specialty Property segment. The Company previously decided to cease writing certain Property Brokerage business which was part of the Commercial Specialty segment, as well as exit certain property and catastrophe lines within the Reinsurance Operations segment. Based on the decisions to exit these lines of business, the Company changed the way it manages and analyzes its operating results. The chief operating decision makers, the Chief Executive as well as the Chief Operating Officer, decided they will be reviewing the specific results of the exited lines separately. The chief operating decision makers also determined that the small amount of specialty property business that remained from the Specialty Property segment would be included as programs in the Commercial Specialty segment for purpose of reviewing results and allocating resources. The Reinsurance Operations segment will continue to write casualty and professional treaties as well as individual excess policies. The Farm, Ranch & Stable segment was not impacted by these decisions and will continue to be reported as a segment. Accordingly, the Company will have four reportable segments: Commercial Specialty, Reinsurance Operations, Farm, Ranch & Stable, and Exited Lines. Management believes these segments will allow users of the Company’s financial statements to better understand the Company's performance, better assess prospects for future net cash flows and to make more informed judgments about the Company as a whole. The segment results for the quarter ended March 31, 2021 have been revised to reflect these changes. See Note 13 for additional information regarding segments.

Global Indemnity Group, LLC is a holding company that is classified as a publicly traded partnership for U.S. federal income tax purposes and meets the qualifying income exception to maintain partnership status.

Global Indemnity Group, LLC owns all shares of its direct and indirect subsidiaries, including those of its insurance companies: United National Insurance Company, Diamond State Insurance Company, Penn-America Insurance Company, Penn-Star Insurance Company, Penn-Patriot Insurance Company, and American Reliable Insurance Company.

The insurance companies’ primary activity is providing insurance products across a distribution network that includes binding authority, program, brokerage and reinsurance. The insurance companies are managed through 4 business segments: Commercial Specialty, ~~Specialty Property,~~Reinsurance Operations, Farm, Ranch & Stable, and ~~Reinsurance Operations.~~Exited Lines. The Company’s Commercial Specialty segment offers specialty property and casualty insurance products in the excess and surplus lines marketplace. The Company manages Commercial Specialty by differentiating them into 4 product classifications: 1) Penn-America, which markets property and general liability products to small commercial businesses through a select network of wholesale general agents with specific binding authority; 2) United National, which markets insurance products for targeted insured segments, including specialty products, such as property, general liability, and professional lines through program administrators with specific binding authority; 3) Diamond State, which markets property, casualty, and professional lines products, which are developed by the Company’s underwriting department by individuals with expertise in those lines of business, through wholesale brokers and also markets through program administrators having specific binding authority; and 4) Vacant Express, which primarily insures dwellings which are currently vacant, undergoing renovation, or are under construction and is marketed through aggregators, brokers, and retail agents. The Company has also created several start-up business lines which distribute professional, environmental, and excess casualty products. These product classifications comprise the Company’s Commercial Specialty business segment and are not considered individual business segments because each product has similar economic characteristics, distribution, and coverage. The Company’s ~~Specialty Property~~Reinsurance Operations segment ~~offers specialty personal lines property~~provides reinsurance solutions through brokers and ~~casualty~~primary writers including insurance ~~products through general~~ and ~~specialty agents with specific binding authority.~~reinsurance companies. The Company’s Farm, Ranch & Stable segment provides specialized property and casualty coverage including Commercial Farm Auto and Excess/Umbrella Coverage for the agriculture industry as well as specialized insurance products for the equine mortality and equine major medical industry. These insurance products are sold through wholesalers and retail agents, with a selected number having specific binding authority. Exited Lines represents lines of business that are no longer being written or are in runoff. Exited Lines includes specialty personal lines property and casualty products such as manufactured home, dwelling, motorcycle, watercraft and certain homeowners business, certain business within Property

Brokerage, and property and catastrophe reinsurance treaties. Collectively, the Company’s insurance subsidiaries are licensed in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The Company’s Reinsurance Operations segment provides reinsurance solutions through brokers and primary writers including insurance and reinsurance companies. Prior to the redomestication transactions, the Company’s Reinsurance Operations consisted solely of the operations of its Bermuda-based wholly-owned subsidiary, Global Indemnity Reinsurance Company, Ltd. (“Global Indemnity Reinsurance”). As part of the redomestication transactions, Global Indemnity Reinsurance was merged with and into Penn-Patriot Insurance Company ("Penn-Patriot"), with Penn-Patriot surviving, resulting in the assumption of Global Indemnity Reinsurance's business by the Global Indemnity group of companies’ existing U.S. insurance company subsidiaries.

The Commercial Specialty ~~Specialty Property,~~and Farm, Ranch & Stable ~~and Reinsurance Operations~~ segments comprise the Company’s ~~insurance operations.~~ Insurance Operations (“Insurance Operations”).

The interim consolidated financial statements are unaudited, but have been prepared in conformity with United States of America generally accepted accounting principles (“GAAP”), which differs in certain respects from those principles followed in reports to insurance regulatory authorities. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The unaudited consolidated financial statements include all adjustments that are, in the opinion of management, of a normal recurring nature and are necessary for a fair statement of results for the interim periods. Results of operations for the quarters ended March 31, 2022 and ~~nine months ended September 30,~~ 2021 ~~and 2020~~ are not necessarily indicative of the results of a full year. The accompanying notes to the unaudited consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements contained in the Company’s ~~2020~~2021 Annual Report on Form 10-K.

The consolidated financial statements include the accounts of Global Indemnity Group, LLC and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. An adjustment has been made to the Consolidated Balance Sheets for the fiscal year ended December 31, 2020 to present the lease right of use assets and lease liabilities separately from other assets and other liabilities, respectively. This change in classification does not affect previously reported Assets or Liabilities in the Consolidated Balance Sheet.

~~There have been no significant changes to the Company's accounting policies during the current year except for the following:~~

The receipt of results for investments in limited partnerships and limited liability companies may vary. If results are received on a timely basis, they are included in current results. If they are not received on a timely basis, they are recorded on a one quarter lag. The recording of such results are applied consistently for each investment once the timing of receiving the results has been established.

Please see Note 3 of the notes to the consolidated financial statements in Item 8 Part II of the Company's 2020 Annual Report on Form 10-K for more information on the Company's summary of significant accounting policies.

The amortized cost and estimated fair value of the Company’s fixed maturities securities were as follows as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

(Dollars in thousands)	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
As of September 30, 2021
As of March 31, 2022
Fixed maturities:
U.S. treasuries	$	115,319	$	0	$	990	$	(1,632	)	$	114,677	$	137,804	$	0	$	153	$	(1,490	)	$	136,467
Agency obligations		8,781		0		1		(151	)		8,631		1,336		0		0		0			1,336
Obligations of states and political subdivisions		53,188		0		1,916		(163	)		54,941		47,470		0		214		(588	)		47,096
Mortgage-backed securities		268,484		0		3,686		(1,417	)		270,753		226,077		0		695		(1,279	)		225,493
Asset-backed securities		174,837		0		1,121		(436	)		175,522		164,308		0		132		(3,385	)		161,055
Commercial mortgage-backed securities		124,137		0		3,623		(266	)		127,494		134,669		0		113		(2,074	)		132,708
Corporate bonds		298,722		0		9,628		(1,249	)		307,101		293,615		0		722		(6,118	)		288,219
Foreign corporate bonds		137,644		0		3,548		(342	)		140,850		139,862		0		237		(3,197	)		136,902
Total fixed maturities	$	1,181,112	$	0	$	24,513	$	(5,656	)	$	1,199,969	$	1,145,141	$	0	$	2,266	$	(18,131	)	$	1,129,276

(Dollars in thousands)	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
As of December 31, 2020
As of December 31, 2021
Fixed maturities:
U.S. treasuries	$	195,444	$	0	$	3,125	$	(1,089	)	$	197,480	$	149,934	$	0	$	603	$	(419	)	$	150,118
Agency obligations													5,697		0		1		(68	)		5,630
Obligations of states and political subdivisions		58,140		0		3,170		(67	)		61,243		53,637		0		1,385		(301	)		54,721
Mortgage-backed securities		351,453		0		7,876		(551	)		358,778		250,007		0		2,618		(2,284	)		250,341
Asset-backed securities		116,349		0		1,890		(646	)		117,593		172,916		0		700		(974	)		172,642
Commercial mortgage-backed securities		105,509		0		6,094		(644	)		110,959		135,017		0		2,503		(627	)		136,893
Corporate bonds		223,387		0		17,703		(373	)		240,717		288,866		0		5,571		(2,054	)		292,383
Foreign corporate bonds		98,727		0		5,716		(27	)		104,416		137,672		0		2,370		(904	)		139,138
Total fixed maturities	$	1,149,009	$	0	$	45,574	$	(3,397	)	$	1,191,186	$	1,193,746	$	0	$	15,751	$	(7,631	)	$	1,201,866

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company’s investments in equity securities consist of the following:

(Dollars in thousands)	September 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Common stock	$	67,209	$	60,379	$	873	$	75,987
Preferred stock		23,085		11,683		21,949		23,991
Index funds that invest in fixed maturities		0		26,928
Total	$	90,294	$	98,990	$	22,822	$	99,978

~~As of September 30, 2021 and December 31, 2020, the Company held mortgage pools that totaled 2.1% and 3.9% of shareholders’ equity, respectively.~~ Excluding ~~the mortgage pools,~~ U.S. treasuries, ~~agency bonds, index funds,~~ limited liability companies, and limited partnerships, the Company did not hold any debt or equity investments in a single issuer in excess of ~~2.0%~~2.1% and ~~1.9%~~2.0% of shareholders' equity at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

The amortized cost and estimated fair value of the Company’s fixed maturities portfolio classified as available for sale at ~~September 30, 2021,~~March 31, 2022, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

(Dollars in thousands)	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	37,578	$	37,927	$	55,361	$	55,403
Due in one year through five years		263,900		271,239		347,255		339,895
Due in five years through ten years		238,060		240,139		178,800		176,877
Due in ten years through fifteen years		20,287		20,681		8,449		8,322
Due after fifteen years		53,829		56,214		30,222		29,523
Mortgage-backed securities		268,484		270,753		226,077		225,493
Asset-backed securities		174,837		175,522		164,308		161,055
Commercial mortgage-backed securities		124,137		127,494		134,669		132,708
Total	$	1,181,112	$	1,199,969	$	1,145,141	$	1,129,276

The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses that are not deemed to have credit losses, categorized by the period that the securities were in a continuous loss position as of ~~September 30, 2021.~~March 31, 2022. The fair value amounts reported in the table are estimates that are prepared using the process described in Note 5.4.

	Less than 12 months					12 months or longer					Total					Less than 12 months					12 months or longer					Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Fixed maturities:
U.S. treasuries	$	76,255	$	(1,587	)	$	325	$	(45	)	$	76,580	$	(1,632	)	$	56,292	$	(1,418	)	$	927	$	(72	)	$	57,219	$	(1,490	)
Agency obligations		8,067		(151	)		0		0			8,067		(151	)		300		0			0		0			300		0
Obligations of states and political subdivisions		10,161		(163	)		0		0			10,161		(163	)		13,251		(588	)		0		0			13,251		(588	)
Mortgage-backed securities		130,731		(1,387	)		3,043		(30	)		133,774		(1,417	)		42,236		(1,147	)		2,712		(132	)		44,948		(1,279	)
Asset-backed securities		75,071		(178	)		10,755		(258	)		85,826		(436	)		107,065		(2,592	)		16,896		(793	)		123,961		(3,385	)
Commercial mortgage-backed securities		22,412		(117	)		1,314		(149	)		23,726		(266	)		96,794		(1,936	)		1,239		(138	)		98,033		(2,074	)
Corporate bonds		82,439		(1,155	)		3,269		(94	)		85,708		(1,249	)		147,000		(5,584	)		5,794		(534	)		152,794		(6,118	)
Foreign corporate bonds		41,891		(335	)		367		(7	)		42,258		(342	)		78,946		(3,091	)		1,210		(106	)		80,156		(3,197	)
Total fixed maturities	$	447,027	$	(5,073	)	$	19,073	$	(583	)	$	466,100	$	(5,656	)	$	541,884	$	(16,356	)	$	28,778	$	(1,775	)	$	570,662	$	(18,131	)

The following table contains an analysis of the Company’s fixed income securities with gross unrealized losses that are not deemed to have credit losses, categorized by the period that the securities were in a continuous loss position as of December 31, ~~2020.~~2021. The fair value amounts reported in the table are estimates that are prepared using the process described in Note 5.4.

	Less than 12 months					12 months or longer					Total					Less than 12 months					12 months or longer					Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Fixed maturities:
U.S. treasuries	$	81,999	$	(1,089	)	$	0	$	0		$	81,999	$	(1,089	)	$	114,894	$	(390	)	$	970	$	(29	)	$	115,864	$	(419	)
Agency obligations																	5,380		(68	)		0		0			5,380		(68	)
Obligations of states and political subdivisions		2,588		(67	)		0		0			2,588		(67	)		13,346		(301	)		0		0			13,346		(301	)
Mortgage-backed securities		57,350		(551	)		4		0			57,354		(551	)		143,674		(2,222	)		3,009		(62	)		146,683		(2,284	)
Asset-backed securities		22,268		(389	)		13,354		(257	)		35,622		(646	)		102,309		(703	)		10,662		(271	)		112,971		(974	)
Commercial mortgage-backed securities		10,294		(526	)		1,154		(118	)		11,448		(644	)		50,448		(466	)		1,286		(161	)		51,734		(627	)
Corporate bonds		7,783		(373	)		0		0			7,783		(373	)		129,146		(1,954	)		2,633		(100	)		131,779		(2,054	)
Foreign corporate bonds		885		(27	)		0		0			885		(27	)		67,915		(893	)		412		(11	)		68,327		(904	)
Total fixed maturities	$	183,167	$	(3,022	)	$	14,512	$	(375	)	$	197,679	$	(3,397	)	$	627,112	$	(6,997	)	$	18,972	$	(634	)	$	646,084	$	(7,631	)

The Company regularly performs various analytical valuation procedures with respect to its investments, including reviewing each available for sale debt security in an unrealized loss position to assess whether the decline in fair value below amortized cost basis has resulted from a credit loss or other factors. In assessing whether a credit loss exists, the Company compares the present value of the cash flows expected to be collected from the security to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis of the security, a credit loss exists and an allowance for expected credit losses is recorded. Subsequent changes in the allowances are recorded in the period of change as either credit loss expense or reversal of credit loss expense. Any impairments related to factors other than credit losses and the intent to sell are recorded through other comprehensive income, net of taxes.

For fixed maturities, the factors considered in reaching the conclusion that a credit loss exists include, among others, whether:

According to accounting guidance for debt securities in an unrealized loss position, the Company is required to assess whether it has the intent to sell the debt security or more likely than not will be required to sell the debt security before the anticipated recovery. If either of these conditions is met, any allowance for expected credit losses is written off and the amortized cost basis is written down to the fair value of the fixed maturity security with any incremental impairment reported in earnings. That new amortized cost basis shall not be adjusted for subsequent recoveries in fair value.

The Company elected the practical expedient to exclude accrued interest from both the fair value and the amortized cost basis of the available for sale debt securities for the purposes of identifying and measuring an impairment and to not measure an allowance for expected credit losses for accrued interest receivables. Accrued interest receivable is written off through net realized investment gains (losses) at the time the issuer of the bond defaults or is expected to default on payment. The Company made an accounting policy election to present the accrued interest receivable balance with other assets on the Company’s consolidated statements of financial position. Accrued interest receivable related to fixed maturities was $5.5 million and ~~$5.7~~$5.2 million as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

The following is a description, by asset type, of the methodology and significant inputs that the Company used to measure the amount of credit loss recognized in earnings, if any:

U.S. treasuries – As of ~~September 30, 2021,~~March 31, 2022, gross unrealized losses related to U.S. treasuries were ~~$1.632~~$1.490 million. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, macroeconomic and market analysis is conducted in evaluating these securities. Consideration is given to the interest rate environment, duration and yield curve management of the portfolio, sector allocation and security selection. Based on the analysis performed, the Company did not recognize a credit loss on U.S. treasuries during the period.

Agency obligations – As of ~~September 30, 2021,~~March 31, 2022, gross unrealized losses related to agency obligations were ~~$0.151~~less than $0.001 million. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, macroeconomic and market analysis is conducted in evaluating these securities. Consideration is given to the interest rate environment, duration and yield curve management of the portfolio, sector allocation and security selection. Based on the analysis performed, the Company did not recognize a credit loss on agency obligations during the period.

Obligations of states and political subdivisions – As of ~~September 30, 2021,~~March 31, 2022, gross unrealized losses related to obligations of states and political subdivisions were ~~$0.163~~$0.588 million. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, elements that may influence the performance of the municipal bond market are considered in evaluating these securities such as investor expectations, supply and demand patterns, and current versus historical yield and spread relationships. The analysis relies on the output of fixed income credit analysts, as well as dedicated municipal bond analysts who perform extensive in-house fundamental analysis on each issuer, regardless of their rating by the major agencies. Based on the analysis performed, the Company did not recognize a credit loss on obligations of states and political subdivisions during the period.

Mortgage-backed securities (“MBS”) – As of ~~September 30, 2021,~~March 31, 2022, gross unrealized losses related to mortgage-backed securities were ~~$1.417~~$1.279 million. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, mortgage-backed securities are modeled to project principal losses under downside, base, and upside scenarios for the economy and home prices. The primary assumption that drives the security and loan level modeling is the Home Price Index (“HPI”) projection. These forecasts incorporate not just national macro-economic trends, but also regional impacts to arrive at the most granular and accurate projections. These assumptions are incorporated into the model as a basis to generate delinquency probabilities, default curves, loss severity curves, and voluntary prepayment curves at the loan level within each deal. The model utilizes HPI-adjusted current loan to value, payment history, loan terms, loan modification history, and borrower characteristics as inputs to generate expected cash flows and principal loss for each bond under various scenarios. Based on the analysis performed, the Company did not recognize a credit loss on mortgage-backed securities during the period.

Asset backed securities (“ABS”) - As of ~~September 30, 2021,~~March 31, 2022, gross unrealized losses related to asset backed securities were ~~$0.436~~$3.385 million. The weighted average credit enhancement for the Company’s asset backed portfolio is ~~32.4.~~33.3. This represents the percentage of pool losses that can occur before an asset backed security will incur its first dollar of principal losses. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, every ABS transaction is analyzed on a stand-alone basis. This analysis involves a thorough review of the collateral, prepayment, and structural risk in each transaction. Additionally, the analysis includes an in-depth credit analysis of the originator and servicer of the collateral. The analysis projects an expected loss for a deal given a set of assumptions specific to the asset type. These assumptions are used to calculate at what level of losses the deal will incur its first dollar of principal loss. The major assumptions used to calculate this ratio are loss severities, recovery lags, and no advances on principal and interest. Based on the analysis performed, the Company did not recognize a credit loss on asset backed securities during the period.

Commercial mortgage-backed securities (“CMBS”) - As of ~~September 30, 2021,~~March 31, 2022, gross unrealized losses related to the CMBS portfolio were ~~$0.266~~$2.074 million. The weighted average credit enhancement for the Company’s CMBS portfolio is ~~39.4.~~41.1. This represents the percentage of pool losses that can occur before a commercial mortgage-backed security will incur its first dollar of principal loss. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, a loan level analysis is utilized where every underlying CMBS loan is re-underwritten based on a set of assumptions reflecting expectations for the future path of the economy. Each loan is analyzed over time using a series of tests to determine if a credit event will occur during the life of the loan. Inherent in this process are several economic scenarios and their corresponding rent/vacancy and capital market states. The five primary credit events that frame the analysis include loan modifications, term default, balloon default, extension, and ability to pay off at balloon. The resulting output is the expected loss adjusted cash flows for each bond under the base case and distressed scenarios. Based on the analysis performed, the Company did not recognize a credit loss on commercial mortgage-backed securities during the period.

Corporate bonds - As of ~~September 30, 2021,~~March 31, 2022, gross unrealized losses related to corporate bonds were ~~$1.249~~$6.118 million. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, analysis for this asset class includes maintaining detailed financial models that include a projection of each issuer’s future financial performance, including prospective debt servicing capabilities, capital structure composition, and the value of the collateral. The analysis incorporates the macroeconomic environment, industry conditions in which the issuer operates, the issuer’s current competitive position, its vulnerability to changes in the competitive and regulatory environment, issuer liquidity, issuer commitment to bondholders, issuer creditworthiness, and asset protection. Part of the process also includes running downside scenarios to evaluate the expected likelihood of default as well as potential losses in the event of default. Based on the analysis performed, the Company did not recognize a credit loss on corporate bonds during the period.

Foreign bonds – As of ~~September 30, 2021,~~March 31, 2022, gross unrealized losses related to foreign bonds were ~~$0.342~~$3.197 million. To assess whether the decline in fair value below amortized cost has resulted from a credit loss or other factors, detailed financial models are maintained that include a projection of each issuer’s future financial performance, including prospective debt servicing capabilities, capital structure composition, and the value of the collateral. The analysis incorporates the macroeconomic environment, industry conditions in which the issuer operates, the issuer’s current competitive position, its vulnerability to changes in the competitive and regulatory environment, issuer liquidity, issuer commitment to bondholders, issuer creditworthiness, and asset protection. Part of the process also includes running downside scenarios to evaluate the expected likelihood of default as well as potential losses in the event of default. Based on the analysis performed, the Company did not recognize a credit loss on foreign bonds during the period.

The Company has evaluated its investment portfolio and has determined that an allowance for expected credit losses on its investments is not required.

The Company recorded the following impairments on its investment portfolio for the quarters ended March 31, 2022 and 2021 and are related to securities in an unrealized loss position where the Company had an intent to sell the securities:

In response to a rising interest rate environment, the Company took action early in April 2022 to shorten the duration of its fixed maturities portfolio. The Company identified fixed maturities securities with a weighted average life of five years or greater as having an intent to sell. These securities had a fair market value of $365.3 million and a book value of $390.8 million at March 31, 2022 prior to impairment. Most of the proceeds from the sale of these securities will be reinvested into fixed income investments with maturities of two years and less.

Accumulated other comprehensive income, net of tax, as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 was as follows:

(Dollars in thousands)	September 30, 2021			December 31, 2020			March 31, 2022			December 31, 2021
Net unrealized gains (losses) from:
Fixed maturities	$	18,857		$	42,177		$	(15,865	)	$	8,120
Foreign currency fluctuations		(249	)		161			(4	)		(145	)
Deferred taxes		(3,572	)		(8,030	)		3,097			(1,571	)
Accumulated other comprehensive income, net of tax	$	15,036		$	34,308
Accumulated other comprehensive income (loss), net of tax							$	(12,772	)	$	6,404

The following tables present the changes in accumulated other comprehensive income, net of tax, by components, for the quarters ended March 31, 2022 and ~~nine months ended September 30, 2021 and 2020:~~2021:

Nine Months Ended September 30, 2020 (Dollars In Thousands)	Unrealized Gains and Losses on Available for Sale Securities			Foreign Currency Items			Accumulated Other Comprehensive Income
Quarter Ended March 31, 2021 (Dollars In Thousands)										Unrealized Gains and Losses on Available for Sale Securities			Foreign Currency Items			Accumulated Other Comprehensive Income
Beginning balance, net of tax	$	18,641		$	(1,032	)	$	17,609		$	34,181		$	127		$	34,308
Other comprehensive income before reclassification, before tax		38,773			445			39,218			(31,186	)		(118	)		(31,304	)
Amounts reclassified from accumulated other comprehensive income, before tax		(17,028	)		0			(17,028	)		1,159			0			1,159
Other comprehensive income, before tax		21,745			445			22,190			(30,027	)		(118	)		(30,145	)
Income tax (expense) benefit		(4,202	)		123			(4,079	)
Income tax benefit											5,665			25			5,690
Ending balance, net of tax	$	36,184		$	(464	)	$	35,720		$	9,819		$	34		$	9,853

The reclassifications out of accumulated other comprehensive income for the quarters ended March 31, 2022 and ~~nine months ended September 30,~~ 2021 ~~and 2020~~ were as follows:

		Amounts Reclassified from Accumulated Other Comprehensive Income							Amounts Reclassified from Accumulated Other Comprehensive Income
(Dollars in thousands)		Nine Months Ended September 30,							Quarters Ended March 31,
Details about Accumulated Other Comprehensive Income Components	Affected Line Item in the Consolidated Statements of Operations	2021			2020			Affected Line Item in the Consolidated Statements of Operations	2022			2021
Unrealized gains and losses on available for sale securities	Other net realized investment (gains) losses	$	(741	)	$	(17,028	)	Other net realized investment (gains) losses	$	28,764		$	1,159
	Income tax expense (benefit)		130			3,823		Income tax expense (benefit)		(5,679	)		(343	)
	Total reclassifications, net of tax	$	(611	)	$	(13,205	)	Total reclassifications, net of tax	$	23,085		$	816

The components of net realized investment gains (losses) for the quarters ended March 31, 2022 and ~~nine months ended September 30,~~ 2021 ~~and 2020~~ were as follows:

	Quarters Ended September 30,						Nine Months Ended September 30,						Quarters Ended March 31,
(Dollars in thousands)	2021			2020			2021			2020			2022			2021
Fixed maturities:
Gross realized gains	$	3,364		$	2,705		$	9,042		$	21,685		$	206		$	3,378
Gross realized losses		(1,917	)		(429	)		(8,301	)		(4,657	)		(28,970	)		(4,537	)
Net realized gains (losses)		1,447			2,276			741			17,028			(28,764	)		(1,159	)
Equity securities:
Gross realized gains		1,629			4,942			8,577			14,669			1,806			5,673
Gross realized losses		(3,291	)		(55	)		(2,476	)		(31,870	)		(3,151	)		(1,305	)
Net realized gains (losses)		(1,662	)		4,887			6,101			(17,201	)		(1,345	)		4,368
Derivatives:
Gross realized gains		1,267			1,520			4,985			19,514			6,088			2,353
Gross realized losses		(1,362	)		(1,360	)		(4,485	)		(41,673	)		(1,364	)		(1,743	)
Net realized gains (losses) ₍₁₎		(95	)		160			500			(22,159	)		4,724			610
Total net realized investment gains (losses)	$	(310	)	$	7,323		$	7,342		$	(22,332	)	$	(25,385	)	$	3,819

The following table shows the calculation of the portion of realized gains and losses related to equity securities held as of ~~September 30, 2021~~March 31, 2022 and ~~2020:~~2021:

	Quarters Ended September 30,					Nine Months Ended September 30,					Quarters Ended March 31,
(Dollars in thousands)	2021			2020		2021		2020			2022			2021
Net gains (losses) recognized during the period on equity securities	$	(1,662	)	$	4,887	$	6,101	$	(17,201	)	$	(1,345	)	$	4,368
Less: net gains (losses) recognized during the period on equity securities sold during the period		1,005			3,419		3,810		(366	)		11,114			1,376
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date	$	(2,667	)	$	1,468	$	2,291	$	(16,835	)
Unrealized gains (losses) recognized during the reporting period on equity securities											$	(12,459	)	$	2,992

The proceeds from sales and redemptions of available for sale and equity securities resulting in net realized investment gains (losses) for the ~~nine months~~quarters ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ were as follows:

	Nine Months Ended September 30,				Quarters Ended March 31,
(Dollars in thousands)	2021		2020		2022		2021
Fixed maturities	$	889,080	$	600,962	$	140,150	$	364,277
Equity securities		48,661		563,926		86,173		37,475

The sources of net investment income for the quarters ended March 31, 2022 and ~~nine months ended September 30,~~ 2021 ~~and 2020~~ were as follows:

	Quarters Ended September 30,						Nine Months Ended September 30,						Quarters Ended March 31,
(Dollars in thousands)	2021			2020			2021			2020			2022			2021
Fixed maturities	$	6,197		$	7,421		$	19,672		$	25,013		$	6,404		$	6,827
Equity securities		699			1,390			1,992			4,161			334			675
Cash and cash equivalents		64			260			328			492			32			50
Other invested assets		3,050			3,485			9,835			(8,004	)		426			2,997
Total investment income		10,010			12,556			31,827			21,662			7,196			10,549
Investment expense		(666	)		(810	)		(2,014	)		(2,146	)		(604	)		(713	)
Net investment income	$	9,344		$	11,746		$	29,813		$	19,516		$	6,592		$	9,836

The Company’s total investment return on a pre-tax basis for the quarters ended March 31, 2022 and ~~nine months ended September 30,~~ 2021 ~~and 2020~~ were as follows:

	Quarters Ended September 30,						Nine Months Ended September 30,						Quarters Ended March 31,
(Dollars in thousands)	2021			2020			2021			2020			2022			2021
Net investment income	$	9,344		$	11,746		$	29,813		$	19,516		$	6,592		$	9,836
Net realized investment gains (losses)		(310	)		7,323			7,342			(22,332	)		(25,385	)		3,819
Change in unrealized holding gains (losses)		(4,845	)		32			(23,730	)		22,190			(23,844	)		(30,145	)
Net realized and unrealized investment returns		(5,155	)		7,355			(16,388	)		(142	)		(49,229	)		(26,326	)
Total investment return	$	4,189		$	19,101		$	13,425		$	19,374		$	(42,637	)	$	(16,490	)
Total investment return % ₍₁₎		0.3	%		1.2	%		0.9	%		1.3	%		(2.8	%)		(1.1	%)
Average investment portfolio ₍₂₎	$	1,481,220		$	1,541,227		$	1,468,080		$	1,528,005		$	1,498,272		$	1,439,613

As of ~~September 30, 2021 and~~March 31, 2022, the Company owned fixed maturity securities with a market value of $0.2 million that were non-income producing for the preceding twelve months. As of December 31, ~~2020,~~2021, the Company did 0t own any fixed maturity securities that were non-income producing for the preceding twelve months.

As of ~~September 30, 2021,~~March 31, 2022, the Company held insurance enhanced bonds with a market value of approximately ~~$28.3~~$22.6 million which represented ~~1.9%~~1.5% of the Company’s total cash and invested assets, net of payable/ receivable for securities purchased and sold.

The insurance enhanced bonds are comprised of ~~$13.7~~$10.0 million of municipal bonds, ~~$6.8~~$4.8 million of commercial mortgage-backed securities, and $7.8 million of collateralized mortgage obligations. The financial guarantors of the Company’s ~~$28.3~~$22.6 million of insurance enhanced commercial-mortgage-backed, municipal securities, and collateralized mortgage obligations include Municipal Bond Insurance Association ($~~2.7~~0.3 million), Assured Guaranty Corporation ($~~8.2~~7.9 million), Federal Home Loan Mortgage Corporation ($~~14.6~~12.6 million), ~~Federal National Mortgage Association ($0.3 million),~~and Ambac Financial Group ($~~1.9 million), School Bond Guaranty Program ($0.1 million), and Higher Education State Aid Intercept Program ($0.5~~1.8 million).

The Company had no direct investments in the entities that have provided financial guarantees or other credit support to any security held by the Company at ~~September 30, 2021.~~March 31, 2022.

Certain cash balances, cash equivalents, and bonds available for sale were deposited with various governmental authorities in accordance with statutory requirements, were held as collateral, or were held in trust. The fair values were as follows as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

	Estimated Fair Value				Estimated Fair Value
(Dollars in thousands)	September 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
On deposit with governmental authorities	$	26,468	$	26,966	$	25,472	$	26,093
Held in trust pursuant to third party requirements		79,947		100,234		112,367		119,513
Letter of credit held for third party requirements		2,512		3,970		1,187		2,512
Securities held as collateral		0		494
Total	$	108,927	$	131,664	$	139,026	$	148,118

A Variable Interest Entity (“VIE”) refers to an investment in which an investor holds a controlling interest that is not based on the majority of voting rights. Under the VIE model, the party that has the power to exercise significant management influence and maintain a controlling financial interest in the entity’s economics is said to be the primary beneficiary, and is required to consolidate the entity within their results. Other entities that participate in a VIE, for which their financial interests fluctuate with changes in the fair value of the investment entity’s net assets but do not have significant management influence and the ability to direct the VIE’s significant economic activities are said to have a variable interest in the VIE but do not consolidate the VIE in their financial results.

The Company has variable interests in 4 VIE’s for which it is not the primary beneficiary. These investments are accounted for under the equity method of accounting as their ownership interest exceeds 3% of their respective investments.

The carrying value of one of the Company’s VIE’s, which invests in distressed securities and assets, was ~~$9.3~~$6.4 million and ~~$10.8~~$8.6 million as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The Company’s maximum exposure to loss from this VIE, which factors in future funding commitments, was ~~$23.5~~$20.7 million and ~~$25.0~~$22.8 million at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The carrying value of a second VIE that also invests in distressed securities and assets was ~~$2.9 million and $15.7~~$0.3 million at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The Company’s maximum exposure to loss from this VIE, which factors in future funding commitments, was ~~$19.9 million and $32.7~~$17.3 million at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The carrying value and maximum exposure to loss of a third VIE that invests in Real Estate Investment Trust (“REIT”) qualifying assets was ~~$11.6~~$9.7 million and ~~$10.5~~$11.7 million as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The carrying value and maximum exposure to loss of a fourth VIE, which invests in a broad portfolio of non-investment grade loans, was ~~$106.2~~$105.4 million and ~~$60.0~~$106.2 million as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The Company’s investment in VIEs is included in other invested assets on the consolidated balance ~~sheet~~sheets with changes in carrying value recorded in the consolidated statements of operations.

Derivatives are used by the Company to reduce risks from changes in interest rates and limit exposure to severe equity market changes. The Company has interest rate swaps with terms to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional amount. The Company has also ~~utilizes~~used exchange-traded futures contracts, which give the holder the right and obligation to participate in market movements at a future date, to allow the Company to react faster to market conditions. ~~The~~When using derivatives, the Company posts collateral and settles variation margin in cash on a daily basis equal to the amount of the ~~futures contracts’~~derivatives’ change in ~~value scaled by a multiplier.~~value.

The Company accounts for the interest rate swaps and futures as non-hedge instruments and recognizes the fair value of the interest rate swaps in other assets or other liabilities on the consolidated balance sheets with the changes in fair value recognized as net realized investment gains or losses in the consolidated statements of operations. The Company is ultimately responsible for the valuation of the interest rate swaps. To aid in determining the estimated fair value of the interest rate swaps, the Company relies on the forward interest rate curve and information obtained from a third party financial institution.

The following table summarizes information on the location and the gross amount of the derivatives on the consolidated balance sheets as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020:~~2021:

(Dollars in thousands)		September 30, 2021					December 31, 2020						March 31, 2022					December 31, 2021
Derivatives Not Designated as Hedging Instruments under ASC 815	Balance Sheet Location	Notional Amount		Fair Value			Notional Amount		Fair Value			Balance Sheet Location	Notional Amount		Fair Value			Notional Amount		Fair Value
Interest rate swap agreements	Other assets/liabilities	$	213,022	$	(11,445	)	$	213,022	$	(16,430	)	Other assets/liabilities	$	213,022	$	(2,307	)	$	213,022	$	(8,395	)
Futures contracts on bonds ₍₁₎	Other assets/liabilities		0		0			28,996		0
Total ₍₂₎		$	213,022	$	(11,445	)	$	242,018	$	(16,430	)
Total ₍₁₎													$	213,022	$	(2,307	)	$	213,022	$	(8,395	)

The following table summarizes the net gains (losses) included in the consolidated statements of operations for changes in the fair value of the derivatives and the periodic net interest settlements under the derivatives for the quarters ended March 31, 2022 and ~~nine months ended September 30, 2021 and 2020:~~2021:

		Quarters Ended September 30,					Nine Months Ended September 30,							Quarters Ended March 31,
(Dollars in thousands)	Consolidated Statements of Operations Line	2021			2020		2021			2020			Consolidated Statements of Operations Line	2022		2021
Interest rate swap agreements	Net realized investment gains (losses)	$	(95	)	$	45	$	819		$	(10,827	)	Net realized investment gains (losses)	$	4,724	$	929
Futures contracts on bonds	Net realized investment gains (losses)		0			115		(319	)		(2,343	)	Net realized investment gains (losses)		0		(319	)
Futures contracts on equities	Net realized investment gains (losses)		0			0		0			(8,989	)
Total		$	(95	)	$	160	$	500		$	(22,159	)		$	4,724	$	610

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company is due ~~$1.8~~$2.4 million and ~~$2.8~~$1.8 million, respectively, for funds it needed to post to execute the swap transaction and ~~$13.1~~$5.1 million and ~~$17.5~~$9.8 million, respectively, for margin calls made in connection with the interest rate swaps. These amounts are included in other assets on the consolidated balance sheets.

As of September 30, 2021, the Company was 0t utilizing futures contracts. As of December 31, 2020, the Company posted initial margin of $0.5 million in securities for trading futures contracts with a mark-to-market receivable of less than $0.1 million. Variation margin is included in other assets on the consolidated balance sheets.

The accounting standards related to fair value measurements define fair value, establish a framework for measuring fair value, outline a fair value hierarchy based on inputs used to measure fair value, and enhance disclosure requirements for fair value measurements. These standards do not change existing guidance as to whether or not an instrument is carried at fair value. The Company has determined that its fair value measurements are in accordance with the requirements of these accounting standards.

The Company’s invested assets and derivative instruments are carried at their fair value and are categorized based upon a fair value hierarchy:

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset.

The following table presents information about the Company’s invested assets and derivative instruments measured at fair value on a recurring basis as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value.

	Fair Value Measurements								Fair Value Measurements
As of September 30, 2021 (Dollars in thousands)	Level 1		Level 2		Level 3		Total
As of March 31, 2022 (Dollars in thousands)									Level 1		Level 2		Level 3		Total
Assets:
Fixed maturities:
U.S. treasuries	$	114,677	$	0	$	0	$	114,677	$	136,467	$	0	$	0	$	136,467
Agency obligations		0		8,631		0		8,631		0		1,336		0		1,336
Obligations of states and political subdivisions		0		54,941		0		54,941		0		47,096		0		47,096
Mortgage-backed securities		0		270,753		0		270,753		0		224,515		978		225,493
Commercial mortgage-backed securities		0		127,494		0		127,494		0		132,708		0		132,708
Asset-backed securities		0		174,751		771		175,522		0		159,891		1,164		161,055
Corporate bonds		0		306,334		767		307,101		0		286,339		1,880		288,219
Foreign corporate bonds		0		140,850		0		140,850		0		136,902		0		136,902
Total fixed maturities		114,677		1,083,754		1,538		1,199,969		136,467		988,787		4,022		1,129,276
Equity securities		67,209		23,085		0		90,294		0		22,556		266		22,822
Total assets measured at fair value	$	181,886	$	1,106,839	$	1,538	$	1,290,263	$	136,467	$	1,011,343	$	4,288	$	1,152,098
Liabilities:
Derivative instruments	$	0	$	11,445	$	0	$	11,445	$	0	$	2,307	$	0	$	2,307
Total liabilities measured at fair value	$	0	$	11,445	$	0	$	11,445	$	0	$	2,307	$	0	$	2,307

	Fair Value Measurements								Fair Value Measurements
As of December 31, 2020 (Dollars in thousands)	Level 1		Level 2		Level 3		Total
As of December 31, 2021 (Dollars in thousands)									Level 1		Level 2		Level 3		Total
Assets:
Fixed maturities:
U.S. treasuries	$	197,480	$	0	$	0	$	197,480	$	150,118	$	0	$	0	$	150,118
Agency obligations										0		5,630		0		5,630
Obligations of states and political subdivisions		0		61,243		0		61,243		0		54,721		0		54,721
Mortgage-backed securities		0		358,778		0		358,778		0		250,341		0		250,341
Commercial mortgage-backed securities		0		110,959		0		110,959		0		136,893		0		136,893
Asset-backed securities		0		117,593		0		117,593		0		171,686		956		172,642
Corporate bonds		0		240,717		0		240,717		0		290,807		1,576		292,383
Foreign corporate bonds		0		104,416		0		104,416		0		139,138		0		139,138
Total fixed maturities		197,480		993,706		0		1,191,186		150,118		1,049,216		2,532		1,201,866
Equity securities		87,307		11,683		0		98,990		75,750		23,991		237		99,978
Total assets measured at fair value	$	284,787	$	1,005,389	$	0	$	1,290,176	$	225,868	$	1,073,207	$	2,769	$	1,301,844
Liabilities:
Derivative instruments	$	0	$	16,430	$	0	$	16,430	$	0	$	8,395	$	0	$	8,395
Total liabilities measured at fair value	$	0	$	16,430	$	0	$	16,430	$	0	$	8,395	$	0	$	8,395

The securities classified as Level 1 in the above table consist of U.S. treasuries and equity securities actively traded on an exchange.

The securities classified as Level 2 in the above table consist ~~primarily~~ of fixed ~~maturity~~maturities, equity securities, and derivative instruments. Based on the typical trading volumes and the lack of quoted market prices for fixed maturities, security prices are derived through recent reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. If there are no recent reported trades, matrix or model processes are used to develop a security price where future cash flow expectations are developed based upon collateral performance and discounted at an estimated market rate. Included in the pricing of asset-backed securities, collateralized mortgage obligations, and mortgage-backed securities are estimates of the rate of future prepayments of principal over the remaining life of the securities. Such estimates are derived based on the characteristics of the underlying structure and prepayment speeds previously experienced at the interest rate levels projected for the underlying collateral. The estimated fair value of the derivative instruments, consisting of interest rate swaps, is obtained from a third party financial institution that utilizes observable inputs such as the forward interest rate curve.

The investments classified as Level 3 in the above table consist of fixed maturities and equity securities with unobservable inputs. The Company does not have access to daily valuations; therefore, market trades, performance of the underlying assets, and key risks are considered in order to estimate fair values of these debt instruments.

The following table presents changes in Level 3 investments measured at fair value on a recurring basis for the quarters ended March 31, 2022 and ~~nine months ended September 30, 2021 and 2020:~~2021:

	Quarters Ended September 30,					Nine Months Ended September 30,					Quarters Ended March 31,
(Dollars in thousands)	2021			2020		2021			2020		2022			2021
Beginning balance	$	1,235		$	0	$	0		$	0	$	2,769		$	0
Total gains (realized / unrealized):
Included in accumulated other comprehensive income		66			0		34			0		(8	)		(39	)
Included in earnings attributable to realized												(68	)
Transfers into level 3		96			0		798			0		250			0
Transfers out of level 3		0			0		(1,720	)		0		0			0
Amortization of bond premium and discount, net		1			0		1			0		0			0
Purchases		201			0		2,486			0		1,424			2,242
Sales		(61	)		0		(61	)		0		(79	)		0
Ending balance	$	1,538			0	$	1,538			0	$	4,288			2,203

Gains (losses) included in earnings attributable to the change in unrealized gains (losses) related to assets still held at end of reporting period											$	(5	)	$	0

For the Company’s material debt arrangements, the current fair value of the Company’s debt at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 was as follows:

	September 30, 2021				December 31, 2020				March 31, 2022				December 31, 2021
(Dollars in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
7.875% Subordinated Notes due 2047 ₍₁₎	$	126,394	$	132,582	$	126,288	$	132,008	$	126,465	$	126,309	$	126,430	$	129,238
Total	$	126,394	$	132,582	$	126,288	$	132,008	$	126,465	$	126,309	$	126,430	$	129,238

The subordinated notes due 2047 are publicly traded instruments and are classified as Level 1 in the fair value hierarchy.

Other invested assets consist of limited liability companies and limited partnerships whose carrying value approximates fair value. The following table provides the fair value and future funding commitments related to these investments at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

	September 30, 2021				December 31, 2020				March 31, 2022				December 31, 2021
(Dollars in thousands)	Fair Value		Future Funding Commitment		Fair Value		Future Funding Commitment		Fair Value		Future Funding Commitment		Fair Value		Future Funding Commitment
European Non-Performing Loan Fund, LP ₍₁₎	$	9,280	$	14,214	$	10,808	$	14,214	$	6,440	$	14,214	$	8,636	$	14,214
Distressed Debt Fund, LP ₍₂₎		2,858		17,000		15,721		17,000		303		17,000		349		17,000
Mortgage Debt Fund, LP ₍₃₎		11,590		0		10,489		0		9,687		0		11,707		0
Credit Fund, LLC ₍₄₎		106,224		0		60,000		0		105,400		0		106,162		0
Global Debt Fund, LP ₍₅₎		25,394		0		0		0		25,660		0		25,797		0
Total	$	155,346	$	31,214	$	97,018	$	31,214	$	147,490	$	31,214	$	152,651	$	31,214

Limited Liability Companies and Limited Partnerships with ownership interest exceeding 3%

The Company uses the equity method to account for investments in limited liability companies and limited partnerships where its ownership interest exceeds 3%. The equity method of accounting for an investment in limited liability companies and limited partnerships requires that its cost basis be updated to account for the income or loss earned on the investment. In the Fair Value of Alternative Investments table above, all of the investments, except for the Credit Fund, LLC, are booked on a one quarter lag due to non-availability of data at the time the financial statements are prepared. Information for the Credit Fund, LLC is received on a timely basis and is included in current results. The investment income (loss) associated with the limited liability companies and limited partnerships whose ownership interest exceeds 3% is reflected in the consolidated statements of operations in the amounts of ~~$2.6~~$(0.1) million and ~~$3.5~~$3.0 million for the quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $9.3 million and ($8.0) million for the nine months ended September 30, 2021 and 2020,~~ respectively.

The Company’s pricing vendors provide prices for all investment categories except for investments in limited liability companies and limited partnerships. Two primary vendors are utilized to provide prices for equity and fixed maturity securities.

The following is a description of the valuation methodologies used by the Company’s pricing vendors for investment securities carried at fair value:

The Company performs certain procedures to validate whether the pricing information received from the pricing vendors is reasonable, to ensure that the fair value determination is consistent with accounting guidance, and to ensure that its assets are properly classified in the fair value hierarchy. The Company’s procedures include, but are not limited to:

During the quarters ended March 31, 2022 and ~~nine months ended September 30,~~ 2021, ~~and 2020,~~ the Company has not adjusted quotes or prices obtained from the pricing vendors.

For premium receivables, the allowance is based upon the Company’s ongoing review of key aspects of amounts outstanding, including but not limited to, length of collection periods, direct placement with collection agencies, solvency of insured or agent, terminated agents, and other relevant factors.

The following table is an analysis of the allowance for expected credit losses related to the Company's premium receivables for the quarters ended March 31, 2022 and ~~nine months ended September 30, 2021 and 2020:~~2021:

	Quarters Ended September 30,					Nine Months Ended September 30,						Quarters Ended March 31,
(Dollars in thousands)	2021		2020			2021			2020			2022			2021
Beginning balance	$	2,822	$	2,931		$	2,900		$	2,754		$	2,996		$	2,900
Current period provision for expected credit losses		217		476			477			951			83			88
Write-offs		51		(538	)		(287	)		(836	)		(142	)		(216	)
Ending balance	$	3,090	$	2,869		$	3,090		$	2,869		$	2,937		$	2,772

For reinsurance receivables, the allowance is based upon the Company’s ongoing review of key aspects of amounts outstanding, including but not limited to, length of collection periods, disputes, applicable coverage defenses, insolvent reinsurers, financial strength of solvent reinsurers based on AM Best Ratings and other relevant factors.

The following table is an analysis of the allowance for expected credit losses related to the Company's reinsurance receivables for the quarters ended March 31, 2022 and ~~nine months ended September 30, 2021 and 2020:~~2021:

	Quarters Ended September 30,				Nine Months Ended September 30,				Quarters Ended March 31,
(Dollars in thousands)	2021		2020		2021		2020		2022		2021
Beginning balance	$	8,992	$	8,992	$	8,992	$	8,992	$	8,992	$	8,992
Current period provision for expected credit losses		0		0		0		0		0		0
Write-offs		0		0		0		0		0		0
Recoveries of amounts previously written off										0		0
Ending balance	$	8,992	$	8,992	$	8,992	$	8,992	$	8,992	$	8,992

~~Effective August 28, 2020,~~ Global Indemnity Group, LLC ~~became~~is a publicly traded partnership for U.S. federal income tax purposes and meets the qualifying income exception to maintain partnership status. As a publicly traded partnership, Global Indemnity Group, LLC is generally not subject to federal income tax and most state income taxes. However, income earned by the subsidiaries of Global Indemnity Group, LLC is subject to corporate tax in the United States and certain foreign jurisdictions.

As of ~~September 30, 2021,~~March 31, 2022, the statutory income tax rates of the countries where the Company conducts or conducted business are 21% in the United States, 0% in Bermuda, ~~19% in the United Kingdom,~~ and 25% on non-trading income, 33% on capital gains and 12.5% on trading income in the Republic of Ireland. The statutory income tax rate of each country is applied against the expected annual taxable income of the Company in each country to estimate the annual income tax expense.

The Company’s income (loss) before income taxes is derived from its ~~non-U.S. subsidiaries and~~ U.S. subsidiaries for the quarters ended March 31, 2022 and ~~nine months ended September 30, 2021 and 2020 were as follows:~~2021.

Quarter Ended September 30, 2020
(Dollars in thousands)

Non-U.S.
Subsidiaries

U.S.
Subsidiaries

Eliminations

Total

Revenues:

Gross written premiums

$
13,085

$
130,664

$
0

$
143,749

Net written premiums

$
13,085

$
117,526

$
0

$
130,611

Net earned premiums

$
9,983

$
130,319

$
0

$
140,302

Net investment income

4,054

9,851

(2,159
)

11,746

Net realized investment gains

1,511

5,812

0

7,323

Other income

164

378

0

542

Total revenues

15,712

146,360

(2,159
)

159,913

Losses and Expenses:

Net losses and loss adjustment expenses

519

96,629

0

97,148

Acquisition costs and other underwriting expenses

3,584

49,684

0

53,268

Corporate and other operating expenses

17,283

3,913

0

21,196

Interest expense

193

5,586

(2,159
)

3,620

Loss on extinguishment of debt

3,060

0

0

3,060

Loss before income taxes

$
(8,927
)

$
(9,452
)

$
0

$
(18,379
)

Nine Months Ended September 30, 2020
(Dollars in thousands)

Non-U.S.
Subsidiaries

U.S.
Subsidiaries

Eliminations

Total

Revenues:

Gross written premiums

$
46,654

$
417,368

$
0

$
464,022

Net written premiums

$
46,654

$
370,333

$
0

$
416,987

Net earned premiums

$
53,384

$
373,233

$
0

$
426,617

Net investment income

17,336

11,324

(9,144
)

19,516

Net realized investment losses

(3,867
)

(18,465
)

0

(22,332
)
Other income

148

1,325

0

1,473

Total revenues

67,001

367,417

(9,144
)

425,274

Losses and Expenses:

Net losses and loss adjustment expenses

12,874

229,218

0

242,092

Acquisition costs and other underwriting expenses

17,828

145,430

0

163,258

Corporate and other operating expenses

23,357

10,680

0

34,037

Interest expense

869

21,472

(9,144
)

13,197

Loss on extinguishment of debt

3,060

0

0

3,060

Income (loss) before income taxes

$
9,013

$
(39,383
)

$
0

$
(30,370
)

The following table summarizes the components of income tax ~~expense (benefit):~~benefit:

	Quarters Ended September 30,						Nine Months Ended September 30,						Quarters Ended March 31,
(Dollars in thousands)	2021			2020			2021			2020			2022			2021
Current income tax expense:
U.S. Federal	$	11		$	0		$	11		$	0
Foreign		0			130			0			130
Total current income tax expense	$	11		$	130		$	11		$	130
Deferred income tax benefit:
U.S. Federal	$	(1,770	)	$	(3,339	)	$	(1,129	)	$	(8,303	)	$	(3,413	)	$	(203	)
Total deferred income tax benefit		(1,770	)		(3,339	)		(1,129	)		(8,303	)		(3,413	)		(203	)
Total income tax benefit	$	(1,759	)	$	(3,209	)	$	(1,118	)	$	(8,173	)
Total income tax expense benefit													$	(3,413	)	$	(203	)

The weighted average expected tax provision has been calculated using income (loss) before income taxes in each jurisdiction multiplied by that jurisdiction’s applicable statutory tax rate.

The following table summarizes the differences between the tax provision for financial statement purposes and the expected tax provision at the weighted average tax rate:

	Quarters Ended September 30,												Quarters Ended March 31,
	2021						2020						2022						2021
(Dollars in thousands)	Amount			% of Pre- Tax Income			Amount			% of Pre- Tax Income			Amount			% of Pre- Tax Income			Amount			% of Pre- Tax Income
Expected tax provision at weighted average tax rate	$	(1,989	)		21.0	%	$	(1,985	)		10.8	%	$	(3,819	)		21.0	%	$	1,116			21.0	%
Adjustments:
Tax exempt interest		0			0			(1	)		0
Dividend exclusion		(20	)		0.2			(86	)		0.5			(22	)		0.1			(17	)		(0.3	)
Non-deductible interest		0			0			416			(2.3	)
Change in tax status		0			0			(1,704	)		9.3
Parent income treated as partnership for tax		41			(0.4	)		(146	)		0.8			243			(1.3	)		(1,367	)		(25.7	)
Other		209			(2.2	)		297			(1.6	)		185			(1.0	)		65			1.2
Effective income tax benefit	$	(1,759	)		18.6	%	$	(3,209	)		17.5	%	$	(3,413	)		18.8	%	$	(203	)		(3.8	%)

The effective income tax benefit rate for the quarter ended ~~September 30, 2021 increased to 18.6%,~~March 31, 2022 was 18.8% compared to an effective income tax benefit rate of ~~17.5%~~3.8% for the quarter ended ~~September 30, 2020.~~ March 31, 2021. The pre-tax loss attributed to U.S. subsidiaries was $9.5 million for both periods. For 2020, the effective tax rate was impacted by offsetting factors: (i) pre-tax loss attributed to non-U.S. subsidiaries of $8.9 milliondifference between 2022 and ~~(ii) recognition of tax benefit of $1.7 million for a change in tax status for net insurance liabilities that were redomiciled from Bermuda at 0% tax rate to the United States.~~

The effective income tax benefit rate for the nine months ended September 30, 2021 was 36.5%, compared with an effective income tax benefit rate of 26.9% for the nine months ended September 30, 2020. The effective tax benefit rate in 2021 is ~~primarily driven by the 70% adjustment to the expected tax provision~~ due to ~~the contribution to consolidated~~a decline in net income ~~by Global Indemnity Group, LLC.~~at Global Indemnity Group, LLC which is treated as a partnership for purposes of U.S. tax for which income passes through to its shareholders. The effective tax benefit rate in 2020 is primarily driven by the $9.0 million of pre-tax income from non-U.S. subsidiaries with no U.S. federal taxes.tax.

The Company has a net operating loss (“NOL”) carryforward of ~~$30.7~~$21.8 million as of ~~September 30, 2021,~~March 31, 2022, which begins to expire in 2036 based on when the original NOL was generated. The Company’s NOL carryforward as of December 31, ~~2020~~2021 was ~~$26.2~~$28.6 million.

The Company has a Section 163(j) (“163(j)”) carryforward of $3.5 million and $5.6 million as of September 30, 2021 and December 31, 2020, respectively, which can be carried forward indefinitely. The 163(j) carryforward relates to the limitation on the deduction for business interest expense paid or accrued.

Activity in the liability for unpaid losses and loss adjustment expenses is summarized as follows:

	Quarters Ended September 30,						Nine Months Ended September 30,					Quarters Ended March 31,
(Dollars in thousands)	2021			2020			2021		2020			2022			2021
Balance at beginning of period	$	697,618		$	651,073		$	662,811	$	630,181		$	759,904		$	662,811
Less: Ceded reinsurance receivables		87,151			87,221			82,158		76,273			94,443			82,158
Net balance at beginning of period		610,467			563,852			580,653		553,908			665,461			580,653
Incurred losses and loss adjustment expenses related to:
Current year		110,644			108,859			290,247		273,709			87,758			94,194
Prior years		(1,449	)		(11,711	)		669		(31,617	)		(3,063	)		(3,411	)
Total incurred losses and loss adjustment expenses		109,195			97,148			290,916		242,092			84,695			90,783
Paid losses and loss adjustment expenses related to:
Current year		46,501			60,114			106,778		119,541			13,315			21,719
Prior years		30,128			29,612			121,758		105,185			59,703			53,230
Total paid losses and loss adjustment expenses		76,629			89,726			228,536		224,726			73,018			74,949
Net balance at end of period		643,033			571,274			643,033		571,274			677,138			596,487
Plus: Ceded reinsurance receivables		88,732			98,656			88,732		98,656			93,194			79,421
Balance at end of period	$	731,765		$	669,930		$	731,765	$	669,930		$	770,332		$	675,908

When analyzing loss reserves and prior year development, the Company considers many factors, including the frequency and severity of claims, loss trends, case reserve settlements that may have resulted in significant development, and any other additional or pertinent factors that may impact reserve estimates.

During the ~~third~~first quarter of ~~2021,~~2022, the Company decreased its prior accident year loss reserves by ~~$1.4~~$3.1 million, which consisted of a ~~$0.1~~$0.3 million ~~decrease~~increase related to Commercial Specialty, ~~a $0.4 million decrease related to Specialty Property,~~ a $0.4 million decrease related to Farm, Ranch & Stable, and a ~~$0.5~~$3.0 million decrease related to ~~Reinsurance Operations.~~Exited Lines.

The ~~$0.1~~$0.3 million ~~decrease~~increase of prior accident year loss reserves related to Commercial Specialty primarily consisted of the following:

~~The $0.4 million decrease of prior accident year loss reserves related to Specialty Property primarily consisted of the following:~~

The $0.4 million reduction of prior accident year loss reserves related to Farm, Ranch & Stable primarily consisted of the following:

The ~~$0.5~~$3.0 million ~~decrease in~~reduction of prior accident year loss reserves related to ~~Reinsurance Operations were based on a review~~Exited Lines consisted of the experience reported from cedants. There was a $0.5 million decrease in the property lines mainly in the 2015, 2017, 2018 and 2020 accident years, partially offset by increases in the 2012 and 2019 accident years.following:

During the ~~third~~first quarter of ~~2020,~~2021, the Company reduced its prior accident year loss reserves by ~~$11.7~~$3.4 million, which consisted of a ~~$3.5~~$2.6 million decrease related to Commercial Specialty, a ~~$2.0 million decrease related to Specialty Property, a $1.3~~$0.7 million decrease related to Farm, Ranch & Stable, and a ~~$4.9~~$0.1 million decrease related to ~~Reinsurance Operations.~~Exited Lines.

The ~~$3.5~~$2.6 million ~~reduction~~decrease of prior accident year loss reserves related to Commercial Specialty primarily consisted of the following:

The ~~$2.0 million decrease of prior accident year loss reserves related to Specialty Property primarily consisted of the following:~~

~~The $1.3~~$0.7 million reduction of prior accident year loss reserves related to Farm, Ranch & Stable primarily consisted of the following:

~~The $4.9 million decrease in prior accident year loss reserves related to Reinsurance Operations were based on~~primarily recognizing a review of the experience reported from cedants. There was a $3.2 million decrease in the property lines primarily in the 2009 through 2012 and 2014 through 2018 accident years, partially offset by an increase in the 2019 accident year. In addition, there was a reduction of $1.7 million in the professional lines in the 2014 and 2015 accident years.

During the first nine months of 2021, the Company increased its prior accident year loss reserves by $0.7 million, which consisted of a $5.5 million increase related to Commercial Specialty, a $2.0 million decrease related to Specialty Property, a

~~$1.3 million decrease related to Farm, Ranch & Stable, and a $1.5 million decrease related to Reinsurance Operations.~~

~~The $5.5 million increase in prior accident year loss reserves related to Commercial Specialty primarily consisted of the following:~~

~~The $2.0 million decrease in prior accident year loss reserves related to Specialty Property primarily consisted of the following:~~

The ~~$1.3~~$0.1 million decrease ~~in prior accident year loss reserves related to Farm, Ranch & Stable primarily consisted of the following:~~

~~The $1.5 million reduction~~ of prior accident year loss reserves related to Reinsurance Operations were based on a review of the experience reported from cedants. The decrease was in the property lines and primarily in the 2011, 2015, 2017, 2018 and 2020 accident years, partially offset by increases in the 2010, 2012 and 2019 accident years.

During the first nine months of 2020, the Company reduced its prior accident year loss reserves by $31.6 million, which consisted of a $17.8 million decrease related to Commercial Specialty, a $6.6 million decrease related to Specialty Property, a $2.1 million decrease related to Farm, Ranch, & Stable, and a $5.1 million decrease related to Reinsurance Operations.

~~The $17.8 million decrease in prior accident year loss reserves related to Commercial Specialty~~Exited Lines primarily consisted of the following:

~~The $6.6 million decrease in prior accident year loss reserves related to Specialty Property primarily consisted of the following:~~

~~The $2.1 million decrease in prior accident year loss reserves related to Farm, Ranch, & Stable primarily consisted of the following:~~

The $5.1 million decrease in prior accident year loss reserves related to Reinsurance Operations were based on a review of the experience reported from cedants. There was a $3.4 million decrease in the property lines primarily in the 2009 through 2010 and 2012 through 2017 accident years, partially offset by an increase in the 2019 accident year. In addition, there was a reduction of $1.7 million in the professional lines in the 2014 and 2015 accident years.

The Company determines if an arrangement is a lease at inception. Leases with a term of 12 months or less are not recorded on the consolidated balance sheets. For leases with a term of greater than 12 months, lease right-of-use assets (“ROU”) and lease liabilities are included on the consolidated balance sheets.

Lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company’s leases do not provide an implicit rate; therefore, the Company uses its incremental borrowing rate at the commencement date in determining the present value of future payments. The ROU assets are calculated using the initial lease liability amount, plus any lease payments made at or before the commencement date, minus any lease incentives received, plus any initial direct costs incurred.

The Company’s lease agreements may contain both lease and non-lease components which are accounted separately. The Company elected the practical expedient on not separating lease components from non-lease components for its equipment leases.

The Company leases office space and equipment under various operating lease arrangements. The Company’s leases have remaining lease terms ranging from 3 months to 9 years. Some building leases have options to extend, terminate, or retract the leased area. During the nine months ended September 30, 2021, the Company exercised the contraction clause of 1 of its leases. The Company incurred a $0.3 million contraction fee in conjunction with exercising the contraction clause. The related ROU asset and lease liability were revalued when the Company exercised the contraction clause. The Company did not factor in any other term extension, terminations, or space retractions into the lease terms used to calculate the right-of-use assets and lease liabilities since it was uncertain as to whether these options would be executed.

~~Lease expenses for minimum lease payments are recognized on a straight-line basis over the lease term.~~

~~There was 0 sublease income for the quarters and nine months ended September 30, 2021 and 2020.~~

~~The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheets.~~

~~At September 30, 2021, future minimum lease payments under non-cancelable operating leases were as follows:~~

There were 0 A common shares that were surrendered or repurchased during the quarter ended September 30, 2021. There were 396 class A common shares that were surrendered or repurchased during the quarter ended September 30, 2020 with an average price paid per share of $24.95.

The following table provides information with respect to the class A common shares that were surrendered or repurchased during the ~~nine months~~quarter ended ~~September 30, 2021:~~March 31, 2022:

The following table provides information with respect to the class A common shares that were surrendered or repurchased during the ~~nine months~~quarter ended ~~September 30, 2020:~~March 31, 2021:

~~On April 5, 2021, Global Indemnity Group, LLC converted 186,160 of class B common shares to class A common shares.~~ There were 0 ~~other~~ class B common shares that were surrendered or repurchased during the quarters ~~and nine months~~ ended ~~September 30, 2021~~March 31, 2022 or ~~2020.~~2021.

As of ~~September 30, 2021,~~March 31, 2022, Global Indemnity Group, LLC’s class A common shares were held by approximately ~~170~~165 shareholders of record. There were 43 holders of record of Global Indemnity Group, LLC’s class B common shares, all of whom are affiliated investment funds of Fox Paine & Company, LLC, as of ~~September 30, 2021.~~March 31, 2022. Global Indemnity Group, LLC’s preferred shares were held by 1 holder of record, an affiliate of Fox Paine & Company, LLC, as of ~~September 30, 2021.~~March 31, 2022.

Please see Note 1415 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s ~~2020~~2021 Annual Report on Form 10-K for more information on the Company’s repurchase program.

Distribution payments of $0.25 per common share were declared during the ~~nine months~~quarter ended ~~September 30, 2021~~March 31, 2022 as follows:

Approval Date

Record Date

Payment Date

Total Distributions Declared

(Dollars in thousands)

Record Date

Payment Date

Total Distributions Declared

(Dollars in thousands)

February 14, 2021

March 22, 2021

March 31, 2021

3,570

June 5, 2021

June 21, 2021

June 30, 2021

3,579

September 11, 2021

September 23, 2021

September 30, 2021

3,583

March 3, 2022

March 21, 2022

March 31, 2022

3,597

Various ₍₁₎

Various

229

Various

Total

10,961

3,647

~~Dividend & distribution~~Distribution payments of $0.25 per common share were declared during the ~~nine months~~quarter ended ~~September 30, 2020~~March 31, 2021 as follows:

~~As of September 30, 2021 and December 31, 2020, accrued~~Accrued distributions on unvested shares, which were included in other liabilities on the consolidated balance sheets were ~~$0.8~~$0.9 million as of both March 31, 2022 and ~~$0.7 million, respectively.~~December 31, 2021. Accrued preferred distributions were less than $0.1 million as of both ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 and were included in other liabilities on the consolidated balance sheets.

Pursuant to Global Indemnity Group, LLC’s Limited Liability Company Agreement (“LLCA”), Fox Paine Capital Fund II International, L.P. and certain of its affiliates (the “Fox Paine Funds”), together with Fox Mercury Investments, L.P. and

certain of its affiliates (the “FM Entities”), and Fox Paine & Company LLC (collectively, the “Fox Paine Entities”) currently constitute a Class B Majority Shareholder (as defined in the LLCA) and, as such, have the right to appoint a number of Global Indemnity Group, LLC’s directors equal in aggregate to the pro rata percentage of the voting power in Global Indemnity Group, LLC beneficially held by the Fox Paine Entities, rounded up to the nearest whole number of directors. The Fox Paine Entities beneficially own shares representing approximately 82.9% of the voting power of Global Indemnity Group, LLC as of ~~September 30, 2021.~~March 31, 2022. The Fox Paine Entities control the appointment or election of all of Global Indemnity Group, LLC’s Directors due to the LLCA and their controlling share ownership. Global Indemnity Group, LLC’s Chairman is the chief executive and founder of Fox Paine & Company, LLC.

On August 27, 2020, Global Indemnity Group, LLC issued and sold to Wyncote LLC, an affiliate of Fox Paine & Company, LLC, 4,000 Series A Cumulative Fixed Rate Preferred Interests at a price of $1,000 per Series A Preferred Interest, for the aggregate purchase price of $4,000,000. While these preferred interests are non-voting, the preferred shareholders are entitled to appoint two additional members to Global Indemnity Group, LLC’s Board of Directors whenever the “Unpaid Targeted Priority Return” with respect to the preferred interests exceed zero immediately following six or more “Distribution Dates”, whether or not such Distribution Dates occur consecutively. Global Indemnity Group, LLC’s Board of Directors is obligated to take, and cause Global Indemnity Group, LLC’s officers to take, any necessary actions to effectuate such appointments, including expanding the size of the Board of Directors, in connection with any exercise of the foregoing provisions.

Management fee expense of $0.7 million ~~and $0.6 million was incurred during the quarters ended September 30, 2021 and 2020, respectively, and management fee expense of $2.0 million~~ was incurred during each of the ~~nine months~~quarters ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021. Prepaid management fees, which were included in other assets on the consolidated balance sheets, were ~~$2.6~~$1.2 million and ~~$1.8~~$1.9 million as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

In addition, Fox Paine & Company, LLC may also propose and negotiate transaction fees with the Company subject to the provisions of the Company’s related party transaction and conflict matter policies, including approval of Global Indemnity Group, LLC’s Conflicts Committee of the Board of Directors, ~~or Global Indemnity Limited’s Audit Committee of the Board of Directors,~~ for those services from time to time. Each of the Company’s transactions with Fox Paine & Company, LLC are reviewed and approved by either Global Indemnity Group, LLC’s Conflicts ~~Committee or Audit~~ Committee, which is composed of independent directors, and the Board of Directors (other than Saul A. Fox, Chairman of the Board of Directors of Global Indemnity Group, LLC and Chief Executive of Fox Paine & Company, LLC, who is not a member of the Conflicts Committee and ~~was not a member of Global Indemnity Limited’s Audit Committee and~~ recused himself from the Board of Directors’ deliberations related to fees paid to Fox Paine & Company, LLC or its affiliates).

Pursuant to the Management Agreement, Fox Paine & Company, LLC performed extensive financial advisory services for the Company in connection with the conceptualization, design, structuring and implementation of the redomestication plan. In accordance with the Management Agreement, Fox Paine & Company, LLC may propose and negotiate advisory fees for such services with the Company, subject to the provisions of the Company’s related party transaction policies. The Company agreed to pay an advisory fee to Fox Paine & Company, LLC for such services in an amount of $10.0 million during the quarter and nine months ended September 30, 2020. The $10.0 million fee was approved by the Conflicts Committee.

The Company is, from time to time, involved in various legal proceedings in the ordinary course of business. The Company maintains insurance and reinsurance coverage for such risks in amounts that it considers adequate. However, there can be no assurance that the insurance and reinsurance coverage that the Company maintains is sufficient or will be available in adequate amounts or at a reasonable cost. The Company does not believe that the resolution of any currently pending legal proceedings, either individually or taken as a whole, will have a material adverse effect on its business, results of operations, cash flows, or financial condition.

that, similar to the rest of the insurance and reinsurance industry, it will continue to be subject to litigation and arbitration proceedings in the ordinary course of business.

In 2014, the Company entered into a $50 million commitment to purchase an alternative investment vehicle which is comprised of European non-performing loans. As of ~~September 30, 2021,~~March 31, 2022, the Company has funded $35.8 million of this commitment leaving $14.2 million as unfunded. Since the investment period has concluded, the Company expects minimal capital calls will be made prospectively.

In 2017, the Company entered into a $50 million commitment to purchase an alternative investment vehicle comprised of stressed and distressed securities and structured products. As of ~~September 30, 2021,~~March 31, 2022, the Company has funded $33.0 million of this commitment leaving $17.0 million as unfunded. Since the investment period has concluded, the Company expects minimal capital calls will be made prospectively.

In 2021, the Company entered into a $25 million commitment to purchase an alternative investment vehicle comprised of performing, stressed or distressed securities and loans across the global fixed income markets. As of ~~September 30, 2021,~~March 31, 2022, the Company has fully funded this commitment.

The Company is party to a Management Agreement, as amended, with Fox Paine & Company, LLC, whereby in connection with certain management services provided to it by Fox Paine & Company, LLC, the Company agreed to pay an annual management fee to Fox Paine & Company, LLC. See Note 119 above for additional information pertaining to this management agreement.

There is risk that legislation could be passed or there could be a court ruling which would require the Company to cover business interruption claims regardless of terms, exclusions including the virus exclusions contained within the Company’s Commercial Specialty and Farm, Ranch & Stable policies, or other conditions included in policies that would otherwise preclude coverage.

During the first quarter of 2021, the Company granted 140,000 Performance-Based Options under the Plan. The Performance-Based Options vest in 33% increments over a three-year period subject to the achievement of certain underwriting results and expire ten years after the grant date or the occurrence of certain events specified in the agreement, whichever is earlier. Of these options, 46,667 options, which were due to vest on April 1, 2022, were recorded as forfeitures in the year ended December 31, 2021 as a result of not meeting performance requirements related to 2021. NaN stock options were awarded during the quarter ended ~~September 30, 2021 or~~March 31, 2022. 300,000 unvested stock options were forfeited during the quarter ~~and nine months~~ ended ~~September 30, 2020.~~March 31, 2021. NaN unvested stock options were forfeited during the quarter ended September 30, 2021. 300,000 unvested stock options were forfeited during the nine months ended September 30, 2021. NaN unvested stock options were forfeited during the quarter and nine months ended September 30, 2020.March 31, 2022.

There were 0 restricted class A common shares ~~granted to key employees during the quarters and nine months ended September 30, 2021 and 2020 and there were 0~~or restricted stock units granted to key employees during the quarters ended ~~September 30, 2021 and 2020 or the nine months ended September 30, 2021.~~

During the nine months ended September 30, 2020, the Company granted 161,238 restricted stock units, with a weighted average grant date value of $30.32 per share, to key employees under the Plan. 3,375 of these restricted stock units will vest evenly over the next three years on January 1, 2021, January 1,March 31, 2022 and ~~January 1, 2023.~~2021.

There were 026,080 and 20,437 restricted stock units that vested during the ~~quarter~~quarters ended ~~September 30, 2021. There were 42,977 restricted stock units that vested during the nine months ended September 30, 2021.~~March 31, 2022 and 2021, respectively. Upon vesting, the restricted stock units converted to restricted class A common shares. ~~During the quarter and nine months ended September 30, 2020, there were 0 restricted stock units that vested.~~

During the quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company granted ~~21,472~~24,810 and ~~29,893~~20,006 class A common shares, respectively, at a weighted average grant date value of ~~$26.39~~$25.64 and ~~$22.58~~$28.32 per share, respectively, to non-employee directors of the Company under the Plan. Of the shares granted during the quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the vesting of ~~5,263 shares~~7,313 and ~~8,304~~4,903 shares, respectively, is deferred until January 1, 2024 or a change of control, whichever is earlier. The remaining shares granted to non-employee directors of the Company in ~~2021~~2022 and ~~2020~~2021 were fully vested but are subject to certain restrictions.

During the nine months ended September 30, 2021 and 2020, the Company granted 61,216 and 81,502 class A common shares, respectively, at a weighted average grant date value of $27.77 and $24.85 per share, respectively, to non-employee directors of the Company under the Plan. Of the shares granted during the nine months ended September 30, 2021 and 2020, the vesting of 15,004 shares and 22,638 shares, respectively, is deferred until January 1, 2024 or a change of control, whichever is earlier. The remaining shares granted to non-employee directors of the Company in 2021 and 2020 were fully vested but are subject to certain restrictions. During the quarter and nine months ended September 30, 2020, the Company also granted 41,667 restricted stock units to a non-employee director that vest ratably over three years on January 1, 2022, January 1, 2023, and January 1, 2024.

During the nine months ended September 30, 2021, the Company granted 2,500,000 Penn-Patriot BVARs with an aggregate initial notional value equal to approximately 5% of Penn-Patriot’s book value, which entitles the holder to a payment based on the value of the per-BVAR appreciation in Penn-Patriot’s book value over the initial notional value. The BVARs will vest by December 31, 2026, subject to the achievement of certain performance goals and continued employment as of the vesting date, with half of the applicable appreciation value of the BVARs payable on April 1, 2027 and an additional amount payable on April 1, 2030 following a true-up of underwriting results for the applicable performance period. The BVARs will vest in full in the event of a “change in control” of Penn-Patriot and a specified portion may vest in the event the holder is terminated by Penn-Patriot without cause.

During the nine months ended September 30, 2021, the Company also granted 400,000 Penn-Patriot BVARS with an aggregate initial notional value equal to approximately 0.8% of Penn-Patriot’s book value, which entitles the holder to a payment based on the value of the per-BVAR appreciation in Penn-Patriot’s book value over the initial notional value. The

BVARs will vest by December 31, 2026, subject to the achievement of certain performance goals and continued employment as of the vesting date, with half of the applicable appreciation value of the BVARs payable on April 1, 2027 and an additional amount payable on April 1, 2030 following a true-up of underwriting results for the applicable performance period. The BVARs will vest in full in the event of a “Change in Control” of Penn-Patriot and a specified portion may vest in the event the holder is terminated by Penn-Patriot without cause.

~~There were 0 BVARs granted during the quarter ended September 30, 2021 or the quarter and nine months ended September 30, 2020.~~

During the quarter and nine months ended September 30, 2021, the Company granted 48,250 shares and 58,250 shares of Penn-Patriot Book Value Rights, respectively, with an initial notional value of $482,500 and $582,500, respectively. These shares have a three year cliff vesting period and are payable in either cash or Global Indemnity Group, LLC’s class A common shares at the discretion of Global Indemnity Group, LLC’s Board of Directors. There were 0 book value rights issued during the quarter and nine months ended September 30, 2020.

Earnings per share have been computed using the weighted average number of common shares and common share equivalents outstanding during the period.

The following table sets forth the computation of basic and diluted earnings per share:

	Quarters Ended September 30,						Nine Months Ended September 30,					Quarters Ended March 31,
(Dollars in thousands, except share and per share data)	2021			2020			2021		2020			2022			2021
Numerator:
Net income (loss)	$	(7,713	)	$	(15,170	)	$	4,179	$	(22,197	)	$	(14,773	)	$	5,517
Less: preferred stock distributions		110			42			330		42			110			110
Net income (loss) available to common shareholders	$	(7,823	)	$	(15,212	)	$	3,849	$	(22,239	)	$	(14,883	)	$	5,407

Denominator:
Weighted average shares for basic earnings per share		14,445,434			14,304,426			14,413,006		14,276,594			14,514,950			14,380,423
Non-vested restricted stock		0			0			10,339		0			0			10,065
Non-vested restricted stock units		0			0			117,750		0			0			137,839
Options		0			0			109,504		0			0			112,331
Weighted average shares for diluted earnings per share ₍₁₎		14,445,434			14,304,426			14,650,599		14,276,594			14,514,950			14,640,658

Earnings per share - Basic	$	(0.54	)	$	(1.06	)	$	0.27	$	(1.56	)	$	(1.03	)	$	0.38
Earnings per share - Diluted	$	(0.54	)	$	(1.06	)	$	0.26	$	(1.56	)	$	(1.03	)	$	0.37

If the Company had not incurred a loss in the ~~quarters~~quarter ended ~~September 30, 2021 and 2020, 14,708,389 and 14,444,326~~March 31, 2022, 14,701,350 weighted average shares ~~respectively,~~ would have been used to compute the diluted loss per share calculation. In addition to the basic shares, weighted average shares for the diluted calculation would have included 11,974 and 18,218 shares of non-vested restricted stock, respectively, 151,538 and 48,846 shares of non-vested restricted stock units, respectively, and 99,442 and 72,836 share equivalents for options, respectively.

If the Company had not incurred a loss in the nine months ended September 30, 2020, 14,421,393 weighted average shares would have been used to compute the diluted loss per share calculation. In addition to the basic shares, weighted average shares for the diluted calculation for the nine months ended September 30, 2020 would have included 15,366 shares of non-vested restricted stock, 36,79691,435 shares of non-vested restricted stock units and ~~92,637~~94,965 share equivalents for options.

The weighted average shares outstanding used to determine dilutive earnings per share does not include ~~540,000~~393,333 shares ~~for both the quarter~~ and ~~nine months ended September 30, 2021 and 572,957~~540,000 shares for ~~both~~ the ~~quarter~~quarters ended March 31, 2022 and ~~nine months ended September 30, 2020~~2021, respectively, which were deemed to be anti-dilutive.

On October 26, 2021, the Company sold the renewal rights related to its manufactured and dwelling homes products which was part of the Specialty Property segment. The ~~insurance companies are managed~~Company previously decided to cease writing certain Property Brokerage business which was part of the Commercial Specialty segment, as well as exit certain property and catastrophe lines within the Reinsurance Operations segment. Based on the decisions to exit these lines of business, the Company changed the way it manages and analyzes its operating results. The chief operating decision makers, the Chief Executive as well as the Chief Operating Officer, decided they will be reviewing the specific results of the Exited Lines separately. The chief operating decision makers also determined that the small amount of specialty property business that remained from the Specialty Property segment would be included as programs in the Commercial Specialty segment for purpose of reviewing results and allocating resources. The Reinsurance Operations segment will continue to write casualty and professional treaties as well as individual excess policies. The Farm, Ranch & Stable segment was not impacted by these decisions and will continue to be reported as a segment. Accordingly, the Company has 4 reportable segments: Commercial Specialty, Reinsurance

Operations, Farm, Ranch & Stable, and Exited Lines. Management believes these segments will allow users of the Company’s financial statements to better understand the Company's performance, better assess prospects for future net cash flows and to make more informed judgments about the Company as a whole. The segment results for the quarter ended March 31, 2021 have been revised to reflect these changes.

The Company manages its business through 4 business segments. Commercial Specialty offers specialty property and casualty products designed for product lines such as Small Business Binding Authority, Property Brokerage, and Programs. ~~Specialty Property offers specialty personal lines property~~Reinsurance Operations provides reinsurance solutions through brokers and ~~casualty~~primary writers including insurance ~~products.~~and reinsurance companies. Farm, Ranch & Stable offers specialized property and casualty coverage including Commercial Farm Auto and Excess/Umbrella Coverage for the agriculture industry as well as specialized insurance products for the equine mortality and equine major medical industry. ~~Reinsurance Operations provides reinsurance solutions through brokers and primary writers including insurance and reinsurance companies.~~Exited Lines represents lines of business that are no longer being written or are in runoff.

The following are tabulations of business segment information for the quarters ended March 31, 2022 and ~~nine months ended September 30, 2021 and 2020:~~2021:

Quarter Ended September 30, 2021 (Dollars in thousands)	Commercial Specialty			Specialty Property			Farm, Ranch & Stable		Reinsurance Operations			(1)	Total
Quarter Ended March 31, 2022 (Dollars in thousands)																Commercial Specialty		Reinsurance Operations			(1)	Farm, Ranch & Stable			Exited Lines		Total
Revenues:
Gross written premiums	$	95,734		$	30,504		$	18,500	$	29,565			$	174,303		$	104,266	$	41,445			$	22,676		$	22,596	$	190,983
Net written premiums	$	89,160		$	27,204		$	16,370	$	29,565			$	162,299		$	98,313	$	41,445			$	19,012		$	712	$	159,482
Net earned premiums	$	84,209		$	29,343		$	17,936	$	26,077			$	157,565		$	91,763	$	34,963			$	17,643		$	4,454	$	148,823
Other income (loss)		0			435			37		(58	)			414			259		(20	)			38			162		439
Total revenues		84,209			29,778			17,973		26,019				157,979			92,022		34,943				17,681			4,616		149,262
Losses and Expenses:
Net losses and loss adjustment expenses		62,545			20,516			10,678		15,456				109,195			52,053		21,457				10,958			227		84,695
Acquisition costs and other underwriting expenses		30,257			12,127			7,267		9,631				59,282			33,689		12,177				6,814			4,012		56,692
Income (loss) from segments	$	(8,593	)	$	(2,865	)	$	28	$	932			$	(10,498	)	$	6,280	$	1,309			$	(91	)	$	377	$	7,875
Unallocated Items:
Net investment income														9,344														6,592
Net realized investment loss														(310	)													(25,385	)
Other loss														(25	)													(13	)
Corporate and other operating expenses														(5,387	)													(4,660	)
Interest expense														(2,596	)													(2,595	)
Loss before income taxes														(9,472	)													(18,186	)
Income tax benefit														1,759														3,413
Net loss													$	(7,713	)												$	(14,773	)

Segment assets	$	904,050		$	201,589		$	134,854	$	305,107			$	1,545,600		$	967,718	$	267,466			$	142,492		$	250,735	$	1,628,411
Corporate assets														405,021														331,085
Total assets													$	1,950,621													$	1,959,496

Quarter Ended September 30, 2020 (Dollars in thousands)	Commercial Specialty		Specialty Property			Farm, Ranch & Stable			Reinsurance Operations		(1)	Total
Quarter Ended March 31, 2021 (Dollars in thousands)															Commercial Specialty		Reinsurance Operations			(1)	Farm, Ranch & Stable			Exited Lines			Total
Revenues:
Gross written premiums	$	74,971	$	34,730		$	19,443		$	14,605		$	143,749		$	89,334	$	21,951			$	21,002		$	31,271		$	163,558
Net written premiums	$	69,074	$	29,971		$	16,961		$	14,605		$	130,611		$	82,172	$	21,951			$	17,603		$	25,957		$	147,683
Net earned premiums	$	73,887	$	31,388		$	19,978		$	15,049		$	140,302		$	78,692	$	16,798			$	18,141		$	30,069		$	143,700
Other income		0		450			35			112			597
Other income (loss)																244		(56	)			34			186			408
Total revenues		73,887		31,838			20,013			15,161			140,899			78,936		16,742				18,175			30,255			144,108
Losses and Expenses:
Net losses and loss adjustment expenses		42,879		34,430			14,649			5,190			97,148			49,790		10,875				11,801			18,317			90,783
Acquisition costs and other underwriting expenses		26,943		13,364			7,443			5,518			53,268			29,052		5,779				6,986			12,947			54,764
Income (loss) from segments	$	4,065	$	(15,956	)	$	(2,079	)	$	4,453		$	(9,517	)	$	94	$	88			$	(612	)	$	(1,009	)	$	(1,439	)
Unallocated Items:
Net investment income													11,746															9,836
Net realized investment gains													7,323															3,819
Other loss													(55	)														(31	)
Corporate and other operating expenses													(21,196	)														(4,276	)
Interest expense													(3,620	)														(2,595	)
Loss on extinguishment of debt													(3,060	)
Loss before income taxes													(18,379	)
Income before income taxes																												5,314
Income tax benefit													3,209															203
Net loss												$	(15,170	)
Net income																											$	5,517

Segment assets	$	752,002	$	207,831		$	137,697		$	269,771		$	1,367,301		$	845,760	$	165,672			$	146,777		$	365,866		$	1,524,075
Corporate assets													572,456															373,571
Total assets												$	1,939,757														$	1,897,646

Nine Months Ended September 30, 2021
(Dollars in thousands)

Commercial
Specialty

Specialty Property

Farm, Ranch & Stable

Reinsurance
Operations

(1)
Total

Revenues:

Gross written premiums

$
279,746

$
96,875

$
60,353

$
76,123

$
513,097

Net written premiums

$
256,007

$
86,652

$
51,853

$
76,123

$
470,635

Net earned premiums

$
240,505

$
89,826

$
54,037

$
66,305

$
450,673

Other income (loss)

0

1,323

111

(100
)

1,334

Total revenues

240,505

91,149

54,148

66,205

452,007

Losses and Expenses:

Net losses and loss adjustment expenses

167,598

50,296

33,640

39,382

290,916

Acquisition costs and other underwriting expenses

88,067

37,745

21,440

24,007

171,259

Income (loss) from segments

$
(15,160
)

$
3,108

$
(932
)

$
2,816

$
(10,168
)
Unallocated Items:

Net investment income

29,813

Net realized investment gains

7,342

Other loss

(47
)
Corporate and other operating expenses

(15,992
)
Interest expense

(7,887
)
Income before income taxes

3,061

Income tax benefit

1,118

Net income

$
4,179

Segment assets

$
904,050

$
201,589

$
134,854

$
305,107

$
1,545,600

Corporate assets

405,021

Total assets

$
1,950,621

Nine Months Ended September 30, 2020
(Dollars in thousands)

Commercial
Specialty

Specialty Property

Farm, Ranch & Stable

Reinsurance
Operations

(1)
Total

Revenues:

Gross written premiums

$
243,099

$
107,951

$
64,798

$
48,174

$
464,022

Net written premiums

$
219,437

$
93,053

$
56,323

$
48,174

$
416,987

Net earned premiums

$
211,329

$
99,147

$
57,691

$
58,450

$
426,617

Other income

0

1,306

107

96

1,509

Total revenues

211,329

100,453

57,798

58,546

428,126

Losses and Expenses:

Net losses and loss adjustment expenses

109,191

65,619

37,698

29,584

242,092

Acquisition costs and other underwriting expenses

79,452

41,357

22,687

19,762

163,258

Income (loss) from segments

$
22,686

$
(6,523
)

$
(2,587
)

$
9,200

$
22,776

Unallocated Items:

Net investment income

19,516

Net realized investment loss

(22,332
)
Other loss

(36
)
Corporate and other operating expenses

(34,037
)
Interest expense

(13,197
)
Loss on extinguishment of debt

(3,060
)
Loss before income taxes

(30,370
)
Income tax benefit

8,173

Net loss

$
(22,197
)

Segment assets

$
752,002

$
207,831

$
137,697

$
269,771

$
1,367,301

Corporate assets

572,456

Total assets

$
1,939,757

~~Accounting Standards Adopted in 2021~~The Company did not adopt any new accounting pronouncements during the quarter ended March 31, 2022.

~~In December, 2019,~~Please see Note 24 of the ~~FASB issued updated guidance related~~notes to the ~~accounting for income taxes. The updated guidance is intended to simplify the accounting for income taxes by removing several exceptions contained~~consolidated financial statements in existing guidance and amending other existing guidance to simplify several other income tax accounting matters. The updated guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. The Company adopted this guidance on January 1, 2021. The adoptionItem 8 Part II of ~~this new accounting guidance did not have a material impact on~~ the Company’s ~~financial condition, results of operations, or cash flows.~~2021 Annual Report on Form 10-K for more information on accounting pronouncements issued but not yet adopted.

On ~~October 26, 2021~~April 15, 2022, the Company ~~announced~~redeemed the sale of its manufactured and dwelling homes business lines to K2 Insurance Services and American Family Mutual Insurance Company. Pursuant to the tripartite transaction, the Company will receive $30.4entire $130 million in ~~cash as well as retain~~aggregate principal amount of the ~~American Reliable 50-state licensed operating unit, $65 million~~outstanding 2047 Notes plus accrued and unpaid interest on the 2047 Notes redeemed to, but not including, the Redemption Date of ~~net capital supporting the business, and~~April 15, 2022.

Effective April 13, 2022, James D. Wehr is no longer a ~~related $42 million unearned premium reserve. The sales price of manufactured and dwelling homes business lines was $28 million. In addition, K2 is subleasing approximately a third~~Designated Director of the Company’s ~~Scottsdale Arizona office. Payments from~~Board of Directors and his service to the ~~sublease are expected to be $2.4 million between October 2021 and November 2029. To facilitate~~Company’s Board of Directors ended on the transaction, American Reliable retained the specialty residential property business in Florida and Louisiana and also retained business that was previously placed in runoff. American Reliable plans to cease writing manufactured home and dwelling insurance in Florida and Louisiana as soon as possible. American Family is assuming 100% of the risks for all policies covered under the renewal rights agreement which are written or renewed after October 26,same date.

~~2021, except for policies covering properties in the state of Florida. For the nine months ended September 30, 2021, Manufactured Home and Dwelling gross written premium was $79.6 million.~~

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and accompanying notes of the Company included elsewhere in this report. Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to the Company’s plans and strategy, constitutes forward-looking statements that involve risks and uncertainties. Please see "Cautionary Note Regarding Forward-Looking Statements" at the end of this Item 2 for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained herein. For more information regarding the Company’s business and operations, please see the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

~~On October 26, 2021~~The Board of Directors approved a distribution payment of $0.25 per common share to all shareholders of record on the ~~Company announced~~close of business on March 21, 2022. Distributions paid to common shareholders were $3.7 million during the sale of its manufactured and dwelling homes business lines to K2 Insurance Services and American Family Mutual Insurance Company. Pursuant to the tripartite transaction, the Company will receive $30.4 million in cash as well as retain the American Reliable 50-state licensed operating unit, $65 million of net capital supporting the business, and a related $42 million unearned premium reserve. The sales price of manufactured and dwelling homes business lines was $28 million.quarter ended March 31, 2022. In addition, ~~K2 is subleasing approximately~~distributions of $0.1 million were paid to Global Indemnity Group, LLC’s preferred shareholder during the quarter ended March 31, 2022.

Effective January 1, 2022, Bruce R. Lederman ceased to be a ~~third~~Fox Paine Entities’ appointed member of the Company’s ~~Scottsdale Arizona office. Payments from the sublease are expected~~Board of Directors. Effective January 22, 2022, Jason B. Hurwitz ceased to be $2.4 million between October 2021 and November 2029. To facilitate the transaction, American Reliable retained the specialty residential property business in Florida and Louisiana and also retained business that was previously placed in runoff. American Reliable plans to cease writing manufactured home and dwelling insurance in Florida and Louisiana as soon as possible. American Family is assuming 100%a Fox Paine Entities’ appointed member of the ~~risks for all policies covered under the renewal rights agreement which are written or renewed after October 26, 2021, except for policies covering properties in the state~~Company’s Board of ~~Florida. For the nine months ended September 30, 2021, Manufactured Home and Dwelling gross written premium was $79.6 million.~~Directors.

~~Appointment~~Effective February 9, 2022, James R. Holt, Jr. became a Fox Paine Entities’ appointed member of ~~Chief Executive~~the Company’s Board of Directors. Mr. Holt is a member of the Audit Committee, the Nomination, Compensation & Governance Committee, the Enterprise Risk Management Committee, and the Technology Committee.

Effective April 13, 2022, James D. Wehr is no longer a Designated Director of the Company’s Board of Directors and his service to the Company’s Board of Directors ended on the same date.

On April ~~19, 2021,~~15, 2022, the Company ~~announced that David S. Charlton was named chief executive~~redeemed the entire $130 million in aggregate principal amount of the ~~Company’s insurance operations~~outstanding 2047 Notes plus accrued and ~~was appointed~~unpaid interest on the 2047 Notes redeemed to, ~~serve as~~but not including the ~~principal executive officer~~Redemption Date of the Company. Furthermore, in connection with Mr. Charlton’s appointment, the board of directors of Global Indemnity Group, LLC (the “Board”) has increased the size of the Board from six to seven directors and appointed Mr. Charlton to fill the newly-created directorship, in each case, with effect as of execution of the CEO Agreement.

~~On May 17, 2021, the Company announced that Reiner R. Mauer was named Chief Operations Officer of the Company’s insurance business and will serve as the principal operating officer of the Company.~~April 15, 2022.

The global outbreak of COVID-19 continues to present significant risks to the Company. The COVID-19 pandemic may affect the Company’s operations indefinitely. The Company may experience reductions in premium volume, delays in the collection of premiums, and increases in COVID-19 related claims. Any resulting volatility in the global financial markets may negatively impact the market value of the Company’s investment portfolio and may result in net realized investment losses as well as a decline in the liquidity of the investment portfolio. All of these factors may have far reaching impacts on the Company’s business, operations, and financial results and conditions, directly and indirectly, including without limitation impacts on the health of the Company’s management and employees, distribution, marketing, customers and agents, and on the overall economy. The scope and nature of these impacts, most of which are beyond the Company’s control, continue to evolve and such effects could exist for an extended period of time even after the pandemic ends.

During 2021, the Board of Directors approved a distribution payment of $0.25 per common share to all shareholders of record on the close of business on March 22, 2021, June 21, 2021, and September 23, 2021. Distributions paid to common shareholders were $10.8 million during the nine months ended September 30, 2021. In addition, distributions of $0.3 million were paid to Global Indemnity Group, LLC’s preferred shareholder during the nine months ended September 30, 2021.

AM Best has seven Rating Categories in the AM Best Financial Strength Rating Scale. The categories ranging from best to worst are Superior, Excellent, Good, Fair, Marginal, Weak and Poor. Within each rating category, there are rating notches of plus or minus to show additional gradation of the ratings. On April 21, 2021, AM Best affirmed the financial strength rating of "A" (Excellent) for the U.S. operating subsidiaries of Global Indemnity Group, LLC.

The Company’s Commercial Specialty segment sells its property and casualty insurance products through a group of approximately ~~205~~195 professional general agencies that have limited quoting and binding authority, as well as a number of wholesale insurance brokers who in turn sell the Company’s insurance products to insureds through retail insurance brokers. Commercial Specialty operates predominantly in the excess and surplus lines marketplace. The Company manages its Commercial Specialty segment via product classifications. These product classifications are: 1) Penn-America, which includes property and general liability products for small commercial businesses sold through a select network of wholesale general agents with specific binding authority; 2) United National, which includes property, general liability, and professional lines products sold through program administrators with specific binding authority; 3) Diamond State, which includes property, casualty, and professional lines products sold through wholesale brokers and program administrators with specific binding authority; and 4) Vacant Express, which primarily insures dwellings which are currently vacant, undergoing renovation, or are under construction and is sold through aggregators, brokers, and retail agents. The Company has also created several start-up business lines which distribute professional, environmental, and excess casualty products.

The Company’s ~~Specialty Property segment, primarily via American Reliable, offers specialty personal lines property~~Reinsurance Operations provides reinsurance solutions through brokers and ~~casualty~~primary writers including insurance ~~products through a group of approximately 205 agents, primarily comprised of wholesale general agents, with specific binding authority.~~and reinsurance companies. It uses its capital capacity to write niche and casualty-focused treaties and business which meet the Company’s risk tolerance and return thresholds.

The Company’s Farm, Ranch & Stable segment, primarily via American Reliable, provides specialized property and casualty coverage including Commercial Farm Auto and Excess/Umbrella Coverage for the agriculture industry as well as specialized insurance products for the equine mortality and equine major medical industry. These insurance products are sold through a group of approximately ~~230~~240 agents, primarily comprised of wholesalers and retail agents, with a selected number having specific binding authority.

The Company’s ~~Reinsurance Operations provides~~Exited Lines segment represents lines of business that are no longer being written or are in runoff. Exited Lines includes specialty personal lines property and casualty products such as manufactured home, dwelling, motorcycle, watercraft and certain homeowners business, certain business within Property Brokerage, and property and catastrophe reinsurance ~~solutions~~treaties. These insurance products were distributed through a group of approximately 205 wholesale general agents, wholesale insurance brokers, program administrators, and on a direct basis. It uses its capital capacity to write niche and specialty-focused treaties and business which meet the Company’s risk tolerance and return thresholds. Prior to the redomestication, the Company’s Reinsurance Operations consisted solely of the operations of Global Indemnity Reinsurance. In connection with the redomestication, Global Indemnity Reinsurance merged into Penn-Patriot Insurance Company and all of its business was assumed by the Company’s existing insurance company subsidiaries.retail agents.

The Company derives its revenues primarily from premiums paid on insurance policies that it writes and from income generated by its investment portfolio, net of fees paid for investment management services. The amount of insurance premiums that the Company receives is a function of the amount and type of policies it writes, as well as prevailing market prices.

The Company’s expenses include losses and loss adjustment expenses, acquisition costs and other underwriting expenses, corporate and other operating expenses, interest, investment expenses, and income taxes. Losses and loss adjustment expenses are estimated by management and reflect the Company’s best estimate of ultimate losses and costs arising during the reporting period and revisions of prior period estimates. The Company records its best estimate of losses and loss

adjustment expenses considering both internal and external actuarial analyses of the estimated losses the Company expects to incur on the insurance policies it writes. The ultimate losses and loss adjustment expenses will depend on the actual costs to resolve claims. Acquisition costs consist principally of commissions and premium taxes that are typically a percentage of the premiums on the insurance policies the Company writes, net of ceding commissions earned from reinsurers. Other underwriting expenses consist primarily of personnel expenses and general operating expenses related to underwriting activities. Corporate and other operating expenses are comprised primarily of outside legal fees, other professional and accounting fees, directors’ fees, management fees & advisory fees, and salaries and benefits for company personnel whose services relate to the support of corporate activities. Interest expense is primarily comprised of amounts due on outstanding debt.

The Company’s consolidated financial statements are prepared in conformity with GAAP, which require it to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and assumptions.

The most critical accounting policies involve significant estimates and include those used in determining the liability for unpaid losses and loss adjustment expenses, recoverability of reinsurance receivables, investments, fair value measurements, goodwill and intangible assets, deferred acquisition costs, and taxation. For a detailed discussion on each of these policies, please see the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. There have been no significant changes to any of these policies or underlying methodologies during the current ~~year except for the following:~~year.

The receipt of results for investments in limited partnerships and limited liability companies may vary. If results are received on a timely basis, they are included in current results. If they are not received on a timely basis, they are recorded on a one quarter lag. The recording of such results is applied consistently for each investment once the timing of receiving the results has been established.

The following table summarizes the Company’s results for the quarters ended March 31, 2022 and ~~nine months ended September 30, 2021 and 2020:~~2021:

	Quarters Ended September 30,						%			Nine Months Ended September 30,						%			Quarters Ended March 31,						%
(Dollars in thousands)	2021			2020			Change			2021			2020			Change			2022			2021			Change
Gross written premiums	$	174,303		$	143,749			21.3	%	$	513,097		$	464,022			10.6	%	$	190,983		$	163,558			16.8	%

Net written premiums	$	162,299		$	130,611			24.3	%	$	470,635		$	416,987			12.9	%	$	159,482		$	147,683			8.0	%

Net earned premiums	$	157,565		$	140,302			12.3	%	$	450,673		$	426,617			5.6	%	$	148,823		$	143,700			3.6	%
Other income		414			597			(30.7	%)		1,334			1,509			(11.6	%)		439			408			7.6	%
Total revenues		157,979			140,899			12.1	%		452,007			428,126			5.6	%		149,262			144,108			3.6	%

Losses and expenses:
Net losses and loss adjustment expenses		109,195			97,148			12.4	%		290,916			242,092			20.2	%		84,695			90,783			(6.7	%)
Acquisition costs and other underwriting expenses		59,282			53,268			11.3	%		171,259			163,258			4.9	%		56,692			54,764			3.5	%
Underwriting income (loss)		(10,498	)		(9,517	)		(10.3	%)		(10,168	)		22,776			(144.6	%)		7,875			(1,439	)	NM

Net investment income		9,344			11,746			(20.4	%)		29,813			19,516			52.8	%		6,592			9,836			(33.0	%)
Net realized investment gains (losses)		(310	)		7,323			(104.2	%)		7,342			(22,332	)		132.9	%		(25,385	)		3,819		NM
Other loss		(25	)		(55	)		54.5	%		(47	)		(36	)		(30.6	%)		(13	)		(31	)		58.1	%
Corporate and other operating expenses		(5,387	)		(21,196	)		(74.6	%)		(15,992	)		(34,037	)		(53.0	%)		(4,660	)		(4,276	)		9.0	%
Interest expense		(2,596	)		(3,620	)		(28.3	%)		(7,887	)		(13,197	)		(40.2	%)		(2,595	)		(2,595	)		—
Loss on extinguishment of debt		—			(3,060	)		(100.0	%)		—			(3,060	)		(100.0	%)
Income (loss) before income taxes		(9,472	)		(18,379	)		(48.5	%)		3,061			(30,370	)		110.1	%		(18,186	)		5,314		NM

Income tax benefit		(1,759	)		(3,209	)		(45.2	%)		(1,118	)		(8,173	)		(86.3	%)		(3,413	)		(203	)	NM
Net income (loss)	$	(7,713	)	$	(15,170	)		49.2	%	$	4,179		$	(22,197	)		118.8	%	$	(14,773	)	$	5,517		NM

Underwriting Ratios:
Loss ratio ₍₁₎:		69.3	%		69.2	%					64.5	%		56.7	%					56.9	%		63.1	%
Expense ratio ₍₂₎		37.6	%		38.0	%					38.0	%		38.3	%					38.1	%		38.1	%
Combined ratio ₍₃₎		106.9	%		107.2	%					102.5	%		95.0	%					95.0	%		101.2	%

The following table summarizes the change in premium volume by business segment:

	Quarters Ended September 30,							Nine Months Ended September 30,							Quarters Ended March 31,
(Dollars in thousands)	2021		2020		% Change			2021		2020		% Change			2022		2021		% Change
Gross written premiums ₍₁₎
Commercial Specialty	$	95,734	$	74,971		27.7	%	$	279,746	$	243,099		15.1	%	$	104,266	$	89,334		16.7	%
Specialty Property		30,504		34,730		(12.2	%)		96,875		107,951		(10.3	%)
Reinsurance Operations ₍₃₎																41,445		21,951		88.8	%
Farm, Ranch & Stable		18,500		19,443		(4.9	%)		60,353		64,798		(6.9	%)		22,676		21,002		8.0	%
Reinsurance ₍₃₎		29,565		14,605		102.4	%		76,123		48,174		58.0	%
Continuing Lines																168,387		132,287		27.3	%
Exited Lines																22,596		31,271		(27.7	%)
Total gross written premiums	$	174,303	$	143,749		21.3	%	$	513,097	$	464,022		10.6	%	$	190,983	$	163,558		16.8	%

Ceded written premiums
Commercial Specialty	$	6,574	$	5,897		11.5	%	$	23,739	$	23,662		0.3	%	$	5,953	$	7,162		(16.9	%)
Specialty Property		3,300		4,759		(30.7	%)		10,223		14,898		(31.4	%)
Reinsurance Operations ₍₃₎																—		—		—
Farm, Ranch & Stable		2,130		2,482		(14.2	%)		8,500		8,475		0.3	%		3,664		3,399		7.8	%
Reinsurance ₍₃₎		—		—		—			—		—		—
Continuing Lines																9,617		10,561		(8.9	%)
Exited Lines																21,884		5,314	NM
Total ceded written premiums	$	12,004	$	13,138		(8.6	%)	$	42,462	$	47,035		(9.7	%)	$	31,501	$	15,875		98.4	%

Net written premiums ₍₂₎
Commercial Specialty	$	89,160	$	69,074		29.1	%	$	256,007	$	219,437		16.7	%	$	98,313	$	82,172		19.6	%
Specialty Property		27,204		29,971		(9.2	%)		86,652		93,053		(6.9	%)
Reinsurance Operations ₍₃₎																41,445		21,951		88.8	%
Farm, Ranch & Stable		16,370		16,961		(3.5	%)		51,853		56,323		(7.9	%)		19,012		17,603		8.0	%
Reinsurance ₍₃₎		29,565		14,605		102.4	%		76,123		48,174		58.0	%
Continuing Lines																158,770		121,726		30.4	%
Exited Lines																712		25,957		(97.3	%)
Total net written premiums	$	162,299	$	130,611		24.3	%	$	470,635	$	416,987		12.9	%	$	159,482	$	147,683		8.0	%

Net earned premiums
Commercial Specialty	$	84,209	$	73,887		14.0	%	$	240,505	$	211,329		13.8	%	$	91,763	$	78,692		16.6	%
Specialty Property		29,343		31,388		(6.5	%)		89,826		99,147		(9.4	%)
Reinsurance Operations ₍₃₎																34,963		16,798		108.1	%
Farm, Ranch & Stable		17,936		19,978		(10.2	%)		54,037		57,691		(6.3	%)		17,643		18,141		(2.7	%)
Reinsurance ₍₃₎		26,077		15,049		73.3	%		66,305		58,450		13.4	%
Continuing Lines																144,369		113,631		27.1	%
Exited Lines																4,454		30,069		(85.2	%)
Total net earned premiums	$	157,565	$	140,302		12.3	%	$	450,673	$	426,617		5.6	%	$	148,823	$	143,700		3.6	%

Gross written premiums increased by ~~21.3% and 10.6%~~16.8% for the quarter ~~and nine months~~ ended ~~September 30, 2021, respectively,~~March 31, 2022 as compared to same ~~periods~~period in ~~2020.~~2021. The increase in gross written premiums ~~for both the quarter and nine months ended September 30, 2021~~ is mainly due to the continued growth of existing programs, increased pricing, and several new programs within Commercial Specialty, ~~as well as~~ the organic growth of an existing ~~casualty treaty and the assumption of three new smaller~~ casualty treaties within Reinsurance ~~Operations. This~~Operations, and growth ~~in premiums was partially offset by the continued reduction~~ of ~~catastrophe exposed~~mortality business and increased pricing within ~~both Specialty Property and~~ Farm, Ranch & Stable ~~the continued~~partially offset by a reduction in ~~business not providing an adequate return on capital~~premiums within Specialty Property, and the non-renewal of its property catastrophe treaties within Reinsurance Operations. In addition, the gross written premiums for the nine months ended September 30, 2021 were also further reduced by actions taken by Commercial Specialty to reduce risk and increase profitability of Property Brokerage.Exited Lines.

	Quarters Ended March 31,						Point
	2022			2021			Change
Loss ratio
Commercial Specialty		56.7	%		63.3	%		(6.6	)
Reinsurance Operations		61.4	%		64.7	%		(3.3	)
Farm, Ranch & Stable		62.1	%		65.1	%		(3.0	)
Continuing Lines		58.5	%		63.8	%		(5.3	)
Exited Lines		5.0	%		61.0	%		(56.0	)
Total loss ratio		56.9	%		63.1	%		(6.2	)
Expense ratio
Commercial Specialty		36.7	%		36.9	%		(0.2	)
Reinsurance Operations		34.8	%		34.4	%		0.4
Farm, Ranch & Stable		38.6	%		38.5	%		0.1
Continuing Lines		36.5	%		36.8	%		(0.3	)
Exited Lines		90.1	%		43.1	%		47.0
Total expense ratio		38.1	%		38.1	%		—
Combined ratio
Commercial Specialty		93.4	%		100.2	%		(6.8	)
Reinsurance Operations		96.2	%		99.1	%		(2.9	)
Farm, Ranch & Stable		100.7	%		103.6	%		(2.9	)
Continuing Lines		95.0	%		100.6	%		(5.6	)
Exited Lines		95.1	%		104.1	%		(9.0	)
Total combined ratio		95.0	%		101.2	%		(6.2	)

The ratio of net written premiums to gross written premiums is referred to as the Company’s net premium retention. The Company’s net premium retention is summarized by segments as follows:

	Quarters Ended September 30,						Point		Nine Months Ended September 30,						Point			Quarters Ended March 31,						Point
(Dollars in thousands)	2021			2020			Change		2021			2020			Change			2022			2021			Change
Commercial Specialty		93.1	%		92.1	%		1.0		91.5	%		90.3	%		1.2			94.3	%		92.0	%		2.3
Specialty Property		89.2	%		86.3	%		2.9		89.4	%		86.2	%		3.2
Reinsurance Operations																			100.0	%		100.0	%		—
Farm, Ranch & Stable		88.5	%		87.2	%		1.3		85.9	%		86.9	%		(1.0	)		83.8	%		83.8	%		—
Reinsurance		100.0	%		100.0	%		—		100.0	%		100.0	%		—
Continuing Lines																			94.3	%		92.0	%		2.3
Exited Lines																			3.2	%		83.0	%		(79.8	)
Total		93.1	%		90.9	%		2.2		91.7	%		89.9	%		1.8			83.5	%		90.3	%		(6.8	)

The net premium retention for the quarter ~~and nine months~~ ended ~~September 30, 2021 increased~~March 31, 2022 decreased by ~~2.3~~6.8 points ~~and 1.9 points, respectively,~~ as compared to the same ~~periods~~period in ~~2020. This increase~~2021. The reduction in retention is primarily driven by the ~~restructuring~~Company entering into an agreement effective November 30, 2021 where American Family Mutual Insurance Company agreed to reinsure 100% of the Company’s ~~catastrophe~~unearned premium reserves of the same types as the policies included in the sale of the renewal rights of the Company’s manufactured and dwelling homes products that were in force as of November 30, 2021. See Note 3 of the notes to the consolidated financial statements in Item 8 Part II of the Company’s 2021 Annual Report on Form 10-K for additional information on this reinsurance ~~treaties which occurred on June 1, 2020~~agreement as well as ~~a change in~~ the ~~mix~~sale of ~~business.~~renewal rights related to the Company’s manufactured and dwelling home products.

Net earned premiums within the Commercial Specialty segment increased by ~~14.0% and 13.8%~~16.6% for the quarter ~~and nine months~~ ended ~~September 30, 2021, respectively,~~March 31, 2022 as compared to the same ~~periods~~period in ~~2020.~~2021. The increase in net earned premiums was primarily due to a growth in premiums

written as a result of organic growth from existing agents, pricing increases, and several new ~~programs partially offset by a reduction in Property Brokerage’s net earned premiums as a result of actions taken to reduce risk and increase profitability.~~programs. Property net earned premiums were ~~$34.8~~$35.5 million and $37.1 million for ~~each of~~ the quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020 and $102.3 million and $97.2 million for the nine months ended September 30, 2021 and 2020,~~ respectively. Casualty net earned premiums were ~~$49.5~~$56.3 million and ~~$39.1~~$41.6 million for the quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $138.2 million and $114.1 million for the nine months ended September 30, 2021 and 2020,~~ respectively.

Net earned premiums within the ~~Specialty Property~~Reinsurance Operations segment ~~decreased~~increased by ~~6.5% and 9.4%~~108.1% for the quarter ~~and nine months~~ ended ~~September 30, 2021, respectively,~~March 31, 2022 as compared to the same ~~periods~~period in ~~2020~~2021 primarily due to ~~a continued reduction~~organic growth of ~~catastrophe exposed business and a reduction in business not providing an adequate return on capital.~~existing casualty treaties. Property net earned premiums were ~~$27.7~~less than $0.1 million for the quarter ended March 31, 2022. There was no property net earned premiums for the quarter ended March 31, 2021. Casualty net earned premiums were $34.9 million and ~~$29.3~~$16.8 million for the quarters ended ~~September 30,~~March 31, 2022 and 2021, and 2020, respectively, and $84.6 million and $92.2 million for the nine months ended September 30, 2021 and 2020, respectively. Casualty net earned premiums were $1.7 million and $2.1 million for the quarters ended September 30, 2021 and 2020, respectively, and $5.3 million and $7.0 million for the nine months ended September 30, 2021 and 2020, respectively.

Net earned premiums within the Farm, Ranch & Stable segment decreased by ~~10.2% and 6.3%~~2.7% for the quarter ~~and nine months~~ ended ~~September 30, 2021, respectively,~~March 31, 2022 as compared to the same periods in ~~2020.~~2021. The decrease in net earned premiums was primarily due to the continued reduction of catastrophe exposed ~~business.~~business in prior periods. Property net earned premiums were ~~$13.4~~$13.3 million and ~~$15.0~~$13.6 million for the quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $40.4 million and $42.1 million for the nine months ended September 30, 2021 and 2020,~~ respectively. Casualty net earned premiums were ~~$4.5~~$4.3 million and ~~$5.0~~$4.6 million for the quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $13.7 million and $15.6 million for the nine months ended September 30, 2021 and 2020,~~ respectively.

Net earned premiums within the ~~Reinsurance Operations~~Exited Lines segment ~~increased~~decreased by ~~73.3% and 13.4%~~85.2% for the quarter ~~and nine months~~ ended ~~September 30, 2021~~March 31, 2022 as compared to the same ~~period~~periods in ~~2020~~2021 primarily due to ~~organic growth~~the sale of ~~an existing casualty treaty partially offset by a reduction~~the renewal rights related to the Company’s manufactured and dwelling home products on October 26, 2021. The decrease in net earned premiums ~~written~~is also due to exiting lines of business unrelated to the ~~non-renewal of its property catastrophe treaties.~~ company’s continuing businesses.Property net earned premiums were ~~$1.8~~$4.3 million and ~~$5.5~~$28.3 million for the quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $7.2 million and $24.5 million for the nine months ended September 30, 2021 and 2020,~~ respectively. Casualty net earned premiums were ~~$24.2~~$0.1 million and ~~$9.6~~$1.7 million for the quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $59.1 million and $33.9 million for the nine months ended September 30, 2021 and 2020,~~ respectively.

Management’s best estimate at ~~September 30, 2021~~March 31, 2022 was recorded as the loss reserve. Management’s best estimate is as of a particular point in time and is based upon known facts, the Company’s actuarial analyses, current law, and the Company’s judgment. This resulted in carried gross and net reserves of ~~$731.8~~$770.3 million and ~~$643.0~~$677.1 million, respectively, as of ~~September 30, 2021.~~March 31, 2022. A breakout of the Company’s gross and net reserves, as of ~~September 30, 2021,~~March 31, 2022, is as follows:

	Gross Reserves						Gross Reserves
(Dollars in thousands)	Case		IBNR ₍₁₎		Total		Case		IBNR ₍₁₎		Total
Commercial Specialty	$	187,198	$	293,508	$	480,706	$	154,338	$	311,048	$	465,386
Specialty Property		12,541		27,378		39,919
Reinsurance Operations								6,275		116,552		122,827
Farm, Ranch & Stable		12,144		33,227		45,371		13,446		33,730		47,176
Reinsurance Operations		41,197		124,572		165,769
Continuing Lines								174,059		461,330		635,389
Exited Lines								71,755		63,188		134,943
Total	$	253,080	$	478,685	$	731,765	$	245,814	$	524,518	$	770,332

	Net Reserves ₍₂₎						Net Reserves ₍₂₎
(Dollars in thousands)	Case		IBNR₍₁₎		Total		Case		IBNR₍₁₎		Total
Commercial Specialty	$	146,769	$	260,756	$	407,525	$	129,971	$	279,718	$	409,689
Specialty Property		10,461		24,184		34,645
Reinsurance Operations								6,275		116,552		122,827
Farm, Ranch & Stable		9,898		25,196		35,094		10,734		24,778		35,512
Reinsurance Operations		41,197		124,572		165,769
Continuing Lines								146,980		421,048		568,028
Exited Lines								53,640		55,470		109,110
Total	$	208,325	$	434,708	$	643,033	$	200,620	$	476,518	$	677,138

Each reserve category has an implicit frequency and severity for each accident year as a result of the various assumptions made. If the actual levels of loss frequency and severity are higher or lower than expected, the ultimate losses will be different than management’s best estimate. For most of its reserve categories, the Company believes that frequency can be predicted with greater accuracy than severity. Therefore, the Company believes management’s best estimate is more likely

influenced by changes in severity than frequency. The following table, which the Company believes reflects a reasonable range of variability around its best estimate based on historical loss experience and management’s judgment, reflects the impact of changes (which could be favorable or unfavorable) in frequency and severity on the Company’s current accident year net loss estimate of ~~$290.2~~$87.8 million for claims occurring during the ~~nine months~~quarter ended ~~September 30, 2021:~~March 31, 2022:

			Severity Change																Severity Change
(Dollars in thousands)	(Dollars in thousands)		-10%			-5%			0%			5%			10%		(Dollars in thousands)		-10%			-5%			0%			5%			10%
Frequency Change		-5%		(42,079	)		(28,295	)		(14,510	)		(726	)		13,059		-5%		(12,731	)		(8,561	)		(4,390	)		(220	)		3,951
		-3%		(36,855	)		(22,781	)		(8,706	)		5,369			19,443		-3%		(11,151	)		(6,892	)		(2,634	)		1,624			5,883
		-2%		(34,244	)		(20,024	)		(5,804	)		8,416			22,636		-2%		(10,360	)		(6,058	)		(1,756	)		2,546			6,848
		-1%		(31,632	)		(17,267	)		(2,902	)		11,463			25,828		-1%		(9,570	)		(5,224	)		(878	)		3,468			7,814
		0%		(29,020	)		(14,510	)		—			14,510			29,020		0%		(8,780	)		(4,390	)		—			4,390			8,780
		1%		(26,408	)		(11,753	)		2,902			17,557			32,212		1%		(7,990	)		(3,556	)		878			5,312			9,746
		2%		(23,796	)		(8,996	)		5,804			20,604			35,404		2%		(7,200	)		(2,722	)		1,756			6,234			10,712
		3%		(21,185	)		(6,239	)		8,706			23,651			38,597		3%		(6,409	)		(1,888	)		2,634			7,156			11,677
		5%		(15,961	)		(726	)		14,510			29,746			44,981		5%		(4,829	)		(220	)		4,390			9,000			13,609

The Company’s net reserves for losses and loss adjustment expenses of ~~$643.0~~$677.1 million as of ~~September 30, 2021~~March 31, 2022 relate to multiple accident years. Therefore, the impact of changes in frequency and severity for more than one accident year could be higher or lower than the amounts reflected above.

The components of income and loss from the Company’s Commercial Specialty segment and corresponding underwriting ratios are as follows:

	Quarters Ended September 30,					%			Nine Months Ended September 30,					%			Quarters Ended March 31,				%
(Dollars in thousands)	2021			2020		Change			2021			2020		Change			2022		2021		Change
Gross written premiums	$	95,734		$	74,971		27.7	%	$	279,746		$	243,099		15.1	%	$	104,266	$	89,334		16.7	%

Net written premiums	$	89,160		$	69,074		29.1	%	$	256,007		$	219,437		16.7	%	$	98,313	$	82,172		19.6	%

Net earned premiums	$	84,209		$	73,887		14.0	%	$	240,505		$	211,329		13.8	%	$	91,763	$	78,692		16.6	%
Other income																		259	$	244		6.1	%
Total revenues		84,209			73,887		14.0	%		240,505			211,329		13.8	%		92,022		78,936		16.6	%

Losses and expenses:
Net losses and loss adjustment expenses		62,545			42,879		45.9	%		167,598			109,191		53.5	%		52,053		49,790		4.5	%
Acquisition costs and other underwriting expenses		30,257			26,943		12.3	%		88,067			79,452		10.8	%		33,689		29,052		16.0	%
Underwriting income (loss)	$	(8,593	)	$	4,065	NM			$	(15,160	)	$	22,686		(166.8	%)	$	6,280	$	94	NM

	Quarters Ended September 30,						Point			Nine Months Ended September 30,						Point			Quarters Ended March 31,						Point
	2021			2020			Change			2021			2020			Change			2022			2021			Change
Underwriting Ratios:
Loss ratio:
Current accident year		74.4	%		62.8	%		11.6			67.4	%		60.1	%		7.3			56.4	%		66.6	%		(10.2	)
Prior accident year		(0.1	%)		(4.8	%)		4.7			2.3	%		(8.4	%)		10.7			0.3	%		(3.3	%)		3.6
Calendar year loss ratio		74.3	%		58.0	%		16.3			69.7	%		51.7	%		18.0			56.7	%		63.3	%		(6.6	)
Expense ratio		35.9	%		36.5	%		(0.6	)		36.6	%		37.6	%		(1.0	)		36.7	%		36.9	%		(0.2	)
Combined ratio		110.2	%		94.5	%		15.7			106.3	%		89.3	%		17.0			93.4	%		100.2	%		(6.8	)

The table below reconciles the non-GAAP measures or ratios, which excludes the impact of prior accident year adjustments, to its most directly comparable GAAP measure or ratio. The Company believes the non-GAAP measures or ratios are useful to investors when evaluating the Company's underwriting performance as trends within Commercial Specialty may be obscured by prior accident year adjustments. These non-GAAP measures or ratios should not be considered as a substitute for its most directly comparable GAAP measure or ratio and does not reflect the overall underwriting profitability of the Company.

	Quarters Ended September 30,												Nine Months Ended September 30,												Quarters Ended March 31,
	2021						2020						2021						2020						2022						2021
(Dollars in thousands)	Losses			Loss Ratio			Losses			Loss Ratio			Losses			Loss Ratio			Losses			Loss Ratio			Losses			Loss Ratio			Losses			Loss Ratio
Property
Non catastrophe property losses and ratio excluding the effect of prior accident year ₍₁₎	$	18,936			54.5	%	$	14,769			42.4	%	$	55,321			54.1	%	$	41,581			42.8	%	$	17,580			49.5	%	$	20,572			55.4	%
Effect of prior accident year		6,385			18.4	%		(568	)		(1.6	%)		5,046			4.9	%		(238	)		(0.2	%)		(757	)		(2.1	%)		(1,538	)		(4.1	%)
Non catastrophe property losses and ratio ₍₂₎	$	25,321			72.9	%	$	14,201			40.8	%	$	60,367			59.0	%	$	41,343			42.6	%	$	16,823			47.4	%	$	19,034			51.3	%

Catastrophe losses and ratio excluding the effect of prior accident year₍₁₎	$	11,911			34.3	%	$	9,537			27.4	%	$	24,881			24.3	%	$	23,116			23.8	%	$	2,233			6.3	%	$	8,718			23.5	%
Effect of prior accident year		1,283			3.7	%		626			1.8	%		9,385			9.2	%		6,063			6.2	%		981			2.8	%		(906	)		(2.4	%)
Catastrophe losses and ratio ₍₂₎	$	13,194			38.0	%	$	10,163			29.2	%	$	34,266			33.5	%	$	29,179			30.0	%	$	3,214			9.1	%	$	7,812			21.1	%

Total property losses and ratio excluding the effect of prior accident year ₍₁₎	$	30,847			88.8	%	$	24,306			69.8	%	$	80,202			78.4	%	$	64,697			66.6	%	$	19,813			55.8	%	$	29,290			78.9	%
Effect of prior accident year		7,668			22.1	%		58			0.2	%		14,431			14.1	%		5,825			6.0	%		224			0.7	%		(2,444	)		(6.5	%)
Total property losses and ratio₍₂₎	$	38,515			110.9	%	$	24,364			70.0	%	$	94,633			92.5	%	$	70,522			72.6	%	$	20,037			56.5	%	$	26,846			72.4	%

Casualty
Total casualty losses and ratio excluding the effect of prior accident year ₍₁₎	$	31,773			64.2	%	$	22,119			56.6	%	$	81,919			59.3	%	$	62,289			54.6	%	$	31,963			56.8	%	$	23,094			55.6	%
Effect of prior accident year		(7,743	)		(15.7	%)		(3,604	)		(9.2	%)		(8,954	)		(6.5	%)		(23,620	)		(20.7	%)		53			0.1	%		(150	)		(0.4	%)
Total casualty losses and ratio₍₂₎	$	24,030			48.5	%	$	18,515			47.4	%	$	72,965			52.8	%	$	38,669			33.9	%	$	32,016			56.9	%	$	22,944			55.2	%

Total
Total net losses and loss adjustment expense and total loss ratio excluding the effect of prior accident year ₍₁₎	$	62,620			74.4	%	$	46,425			62.8	%	$	162,121			67.4	%	$	126,986			60.1	%	$	51,776			56.4	%	$	52,384			66.6	%
Effect of prior accident year		(75	)		(0.1	%)		(3,546	)		(4.8	%)		5,477			2.3	%		(17,795	)		(8.4	%)		277			0.3	%		(2,594	)		(3.3	%)
Total net losses and loss adjustment expense and total loss ratio ₍₂₎	$	62,545			74.3	%	$	42,879			58.0	%	$	167,598			69.7	%	$	109,191			51.7	%	$	52,053			56.7	%	$	49,790			63.3	%

Other income was $0.3 million and $0.2 million for the quarters ended March 31, 2022 and 2021, respectively. Other income is primarily comprised of fee income.

	Quarters Ended September 30,				%			Nine Months Ended September 30,				%			Quarters Ended March 31,				%
(Dollars in thousands)	2021		2020		Change			2021		2020		Change			2022		2021		Change
Property losses
Non-catastrophe	$	18,936	$	14,769		28.2	%	$	55,321	$	41,581		33.0	%	$	17,580	$	20,572		(14.5	%)
Catastrophe		11,911		9,537		24.9	%		24,881		23,116		7.6	%		2,233		8,718		(74.4	%)
Property losses		30,847		24,306		26.9	%		80,202		64,697		24.0	%		19,813		29,290		(32.4	%)
Casualty losses		31,773		22,119		43.6	%		81,919		62,289		31.5	%		31,963		23,094		38.4	%
Total accident year losses	$	62,620	$	46,425		34.9	%	$	162,121	$	126,986		27.7	%	$	51,776	$	52,384		(1.2	%)

	Quarters Ended September 30,						Point		Nine Months Ended September 30,						Point		Quarters Ended March 31,						Point
	2021			2020			Change		2021			2020			Change		2022			2021			Change
Current accident year loss ratio:
Property
Non-catastrophe		54.5	%		42.4	%		12.1		54.1	%		42.8	%		11.3		49.5	%		55.4	%		(5.9	)
Catastrophe		34.3	%		27.4	%		6.9		24.3	%		23.8	%		0.5		6.3	%		23.5	%		(17.2	)
Property loss ratio		88.8	%		69.8	%		19.0		78.4	%		66.6	%		11.8		55.8	%		78.9	%		(23.1	)
Casualty loss ratio		64.2	%		56.6	%		7.6		59.3	%		54.6	%		4.7		56.8	%		55.6	%		1.2
Total accident year loss ratio		74.4	%		62.8	%		11.6		67.4	%		60.1	%		7.3		56.4	%		66.6	%		(10.2	)

The current accident year non-catastrophe property loss ratio ~~increased~~improved by ~~12.1~~5.9 points during the quarter ended ~~September 30, 2021~~March 31, 2022 as compared to the same period in ~~2020~~2021 reflecting ~~higher~~lower claims ~~severity.~~

~~The current~~frequency in the first accident ~~year non-catastrophe property loss ratio increased by 11.3 points during the nine months ended September 30, 2021 as~~quarter compared to ~~the same period in 2020 due to higher claims severity.~~last year.

The current accident year catastrophe loss ratio ~~increased~~improved by ~~6.9~~17.2 points during the quarter ended ~~September 30, 2021~~March 31, 2022 as compared to the same period in ~~2020~~2021 recognizing ~~higher~~much lower claims ~~severity. The impact from Hurricane Ida on~~frequency in the ~~third~~first accident quarter ~~loss ratio was 27.4 points which was the main driver of the higher loss ratio in 2021.~~

~~The current accident year catastrophe loss ratio increased by 0.5 points during the nine months ended September 30, 2021 as~~ compared to ~~the same period in 2020 due to higher claims severity. The impact from Hurricane Ida and the February Texas winter storms (PCS Catastrophes 2160 and 2117) on the 2021 loss ratio was 16.3 points.~~last year.

The current accident year casualty loss ratio increased by ~~7.6~~1.2 points during the quarter ended ~~September 30, 2021~~March 31, 2022 as compared to the same period in ~~2020~~2021 reflecting slightly higher claims ~~frequency.~~

~~The current~~frequency in the first accident ~~year casualty loss ratio increased by 4.7 points during the nine months ended September 30, 2021 as~~quarter compared to ~~the same period in 2020 due to higher claims frequency.~~last year.

The calendar year loss ratio for the quarter ~~and nine months~~ ended ~~September 30, 2021~~March 31, 2022 includes ~~a decrease of $0.1 million, or 0.1 percentage points, and~~ an increase of ~~$5.5~~$0.3 million, or ~~2.3~~0.3 percentage points ~~respectively,~~ related to reserve development on prior accident years. The calendar year loss ratio for the quarter ~~and nine months~~ ended ~~September 30, 2020~~March 31, 2021 includes aan decrease of ~~$3.5~~$2.6 million, or ~~4.8~~3.3 percentage points ~~and a decrease of $17.8 million, or 8.4 percentage points, respectively,~~ related to reserve development on prior accident years. Please see Note 87 of the notes to the consolidated financial statements in Item 1 of Part I of this report for further discussion on prior accident year development.

The expense ratio for the Company’s Commercial Specialty segment improved by ~~0.6~~0.2 points from ~~36.5%~~36.9% for the quarter ended ~~September 30, 2020~~March 31, 2021 to ~~35.9%~~36.7% for the quarter ended ~~September 30, 2021 and improved by 1.0 points from 37.6% for the nine months ended September 30, 2020 to 36.6% for the nine months ended September 30, 2021.~~March 31, 2022. The improvement in the expense ratio is primarily due to higher earned premiums.

COVID-19’s lasting impacts could result in declines in business, non-payment of premiums, and increases in claims that could adversely affect Commercial Specialty’s business, financial condition, and results of operation.

There is continued risk that legislation could be passed or there could be a court ruling which would require the Company to cover business interruption claims regardless of terms, exclusions including the virus exclusions contained within the Company’s Commercial Specialty policies, or other conditions included in these policies that would otherwise preclude coverage.

The components of income from the Company’s ~~Specialty Property~~Reinsurance Operations segment and corresponding underwriting ratios are as follows:

	Quarters Ended September 30,						%			Nine Months Ended September 30,					%			Quarters Ended March 31,						%
(Dollars in thousands)	2021			2020			Change			2021		2020			Change			2022 (1)			2021 (1)			Change
Gross written premiums	$	30,504		$	34,730			(12.2	%)	$	96,875	$	107,951			(10.3	%)	$	41,445		$	21,951			88.8	%

Net written premiums	$	27,204		$	29,971			(9.2	%)	$	86,652	$	93,053			(6.9	%)	$	41,445		$	21,951			88.8	%

Net earned premiums	$	29,343		$	31,388			(6.5	%)	$	89,826	$	99,147			(9.4	%)	$	34,963		$	16,798			108.1	%
Other income		435			450			(3.3	%)		1,323		1,306			1.3	%
Other loss																			(20	)		(56	)		(64.3	%)
Total revenues		29,778			31,838			(6.5	%)		91,149		100,453			(9.3	%)		34,943			16,742			108.7	%

Losses and expenses:
Net losses and loss adjustment expenses		20,516			34,430			(40.4	%)		50,296		65,619			(23.4	%)		21,457			10,875			97.3	%
Acquisition costs and other underwriting expenses		12,127			13,364			(9.3	%)		37,745		41,357			(8.7	%)		12,177			5,779			110.7	%
Underwriting income (loss)	$	(2,865	)	$	(15,956	)		82.0	%	$	3,108	$	(6,523	)		147.6	%
Underwriting income																		$	1,309		$	88		NM

	Quarters Ended September 30,						Point			Nine Months Ended September 30,						Point			Quarters Ended March 31,						Point
	2021			2020			Change			2021			2020			Change			2022			2021			Change
Underwriting Ratios:
Loss ratio:
Current accident year(2)		71.3	%		116.1	%		(44.8	)		58.3	%		72.8	%		(14.5	)		61.4	%		64.7	%		(3.3	)
Prior accident year		(1.4	%)		(6.4	%)		5.0			(2.3	%)		(6.6	%)		4.3			—	%		—	%		—
Calendar year loss ratio(3)		69.9	%		109.7	%		(39.8	)		56.0	%		66.2	%		(10.2	)		61.4	%		64.7	%		(3.3	)
Expense ratio		41.3	%		42.6	%		(1.3	)		42.0	%		41.7	%		0.3			34.8	%		34.4	%		0.4
Combined ratio		111.2	%		152.3	%		(41.1	)		98.0	%		107.9	%		(9.9	)		96.2	%		99.1	%		(2.9	)

The table ~~below~~above reconciles the non-GAAP ~~measures or~~ ratios, which excludes the impact of prior accident year adjustments, to its most directly comparable GAAP ~~measure or~~ ratio. The Company believes the non-GAAP ~~measures or~~ ratios are useful to investors when evaluating the Company's underwriting performance as trends within ~~Specialty Property~~Reinsurance Operations may be obscured by prior accident year adjustments. These non-GAAP ~~measures or~~ ratios should not be considered as a substitute for its most directly comparable GAAP ~~measure or~~ ratio and does not reflect the overall underwriting profitability of the Company.

Quarters Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

(Dollars in thousands)

Losses

Loss Ratio

Losses

Loss Ratio

Losses

Loss Ratio

Losses

Loss Ratio

Property

Non catastrophe property losses and ratio excluding the effect of prior accident year ₍₁₎

$
10,988

39.7
%

$
15,264

52.0
%

$
34,374

40.6
%

$
40,689

44.2
%
Effect of prior accident year

(108
)

(0.4
%)

66

0.2
%

(448
)

(0.5
%)

(2,979
)

(3.2
%)
Non catastrophe property losses and ratio ₍₂₎

$
10,880

39.3
%

$
15,330

52.2
%

$
33,926

40.1
%

$
37,710

41.0
%

Catastrophe losses and ratio excluding the effect of prior accident year ₍₁₎

$
8,968

32.4
%

$
20,060

68.4
%

$
15,043

17.8
%

$
28,367

30.8
%
Effect of prior accident year

(196
)

(0.7
%)

(1,828
)

(6.2
%)

(253
)

(0.3
%)

(1,619
)

(1.8
%)
Catastrophe losses and ratio₍₂₎

$
8,772

31.7
%

$
18,232

62.2
%

$
14,790

17.5
%

$
26,748

29.0
%

Total property losses and ratio excluding the effect of prior accident year ₍₁₎

$
19,956

72.1
%

$
35,324

120.4
%

$
49,417

58.4
%

$
69,056

75.0
%
Effect of prior accident year

(304
)

(1.1
%)

(1,762
)

(6.0
%)

(701
)

(0.8
%)

(4,598
)

(5.0
%)
Total property losses and ratio ₍₂₎

$
19,652

71.0
%

$
33,562

114.4
%

$
48,716

57.6
%

$
64,458

70.0
%

Casualty

Total casualty losses and ratio excluding the effect of prior accident year ₍₁₎

$
967

57.9
%

$
1,109

53.9
%

$
2,911

55.3
%

$
3,154

45.1
%
Effect of prior accident year

(103
)

(6.2
%)

(241
)

(11.7
%)

(1,331
)

(25.3
%)

(1,993
)

(28.5
%)
Total casualty losses and ratio ₍₂₎

$
864

51.7
%

$
868

42.2
%

$
1,580

30.0
%

$
1,161

16.6
%

Total

Total net losses and loss adjustment expense and total loss ratio excluding the effect of prior accident year ₍₁₎

$
20,923

71.3
%

$
36,433

116.1
%

$
52,328

58.3
%

$
72,210

72.8
%
Effect of prior accident year

(407
)

(1.4
%)

(2,003
)

(6.4
%)

(2,032
)

(2.3
%)

(6,591
)

(6.6
%)
Total net losses and loss adjustment expense and total loss ratio ₍₂₎

$
20,516

69.9
%

$
34,430

109.7
%

$
50,296

56.0
%

$
65,619

66.2
%

Other ~~income~~loss was ~~$0.4~~less than $0.1 million and ~~$0.5~~$0.1 million for the quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $1.3 million for both the nine months ended September 30, 2021 and 2020.~~respectively. Other income is primarily comprised of ~~fee income.~~foreign exchange gains and losses.

~~The current accident year non-catastrophe property~~ loss ratio improved by ~~12.3~~3.3 points during the quarter ended ~~September 30, 2021~~March 31, 2022 as compared to the same period in ~~2020~~2021 reflecting a mix of business change and growth in a treaty that has a lower ~~claims frequency.~~

~~The current accident year non-catastrophe property~~expected loss ratio ~~improved by 3.6 points during the nine months ended September 30, 2021 as compared to the same period in 2020 due to lower claims frequency.~~

The current accident year catastrophe loss ratio improved by 36.0 points during the quarter ended September 30, 2021 as compared to the same period in 2020 recognizing lower claims frequency and severity in the current calendar quarter. The impact from Hurricane Ida on the current quarter loss ratio was 18.6 points and the impact from Hurricane Laura on the 2020 third quarter loss ratio was 36.2 points.

The current accident year catastrophe loss ratio improved by 13.0 points during the nine months ended September 30, 2021 as compared to the same period in 2020 due to lower claims frequency and severity. The impact from Hurricane Ida on the current nine month loss ratio was 6.1 points and the impact from Hurricane Laura on the 2020 nine month loss ratio was 11.5 points.

~~The current accident year casualty loss ratio increased by 4.0 points during the quarter ended September 30, 2021 as compared to the same period in 2020 reflecting higher claims severity.~~

~~The current accident year casualty loss ratio increased by 10.2 points during the nine months ended September 30, 2021 as compared to the same period in 2020 due to higher claims severity.~~than last year.

The calendar year loss ~~ratio~~ratios for the ~~quarter~~quarters ended March 31, 2022 and ~~nine months ended September 30,~~ 2021 ~~includes a decrease of $0.4 million, or 1.4 percentage points, and a decrease of $2.0 million, or 2.3 percentage points, respectively,~~does not include any adjustment related to reserve development on prior accident years. The calendar year loss ratio for the quarter and nine months ended September 30, 2020 includes a decrease of $2.0 million, or 6.4 percentage points, and a decrease of $6.6 million, or 6.6 percentage points, respectively,

related to reserve development on prior accident years. Please see Note 8 of the notes to the consolidated financial statements in Item 1 of Part I of this report for further discussion on prior accident year development.

The expense ratio for the Company’s ~~Specialty Property~~Reinsurance Operations segment ~~improved 1.3~~increased 0.4 points from ~~42.6%~~34.4% for the quarter ended ~~September 30, 2020~~March 31, 2021 to ~~41.3%~~34.8% for the quarter ended ~~September 30, 2021~~March 31, 2022 primarily due to ~~a reduction~~an increase in commission expense which was partially offset by ~~an increase~~a reduction in the expense ratio as a result of a ~~reduction~~growth in net earned premiums.

The expense ratio for the Company’s Specialty Property segment increased by 0.3 points from 41.7% for the nine months ended September 30, 2020 to 42.0% for the nine months ended September 30, 2021. The increase in the expense ratio is primarily due to a reduction in earned premiums partially offset by a reduction in commission expense.

COVID-19’s lasting impacts could result in declines in business, ~~and~~ non-payment of premiums, and increases in claims that could adversely affect ~~Specialty Property’s~~Reinsurance Operations’ business, financial condition, and results of operation.

The components of loss from the Company’s Farm, Ranch & Stable segment and corresponding underwriting ratios are as follows:

	Quarters Ended September 30,					%			Nine Months Ended September 30,						%			Quarters Ended March 31,						%
(Dollars in thousands)	2021		2020			Change			2021			2020			Change			2022			2021			Change
Gross written premiums	$	18,500	$	19,443			(4.9	%)	$	60,353		$	64,798			(6.9	%)	$	22,676		$	21,002			8.0	%

Net written premiums	$	16,370	$	16,961			(3.5	%)	$	51,853		$	56,323			(7.9	%)	$	19,012		$	17,603			8.0	%

Net earned premiums	$	17,936	$	19,978			(10.2	%)	$	54,037		$	57,691			(6.3	%)	$	17,643		$	18,141			(2.7	%)
Other income		37		35			5.7	%		111			107			3.7	%		38			34			11.8	%
Total revenues		17,973		20,013			(10.2	%)		54,148			57,798			(6.3	%)		17,681			18,175			(2.7	%)

Losses and expenses:
Net losses and loss adjustment expenses		10,678		14,649			(27.1	%)		33,640			37,698			(10.8	%)		10,958			11,801			(7.1	%)
Acquisition costs and other underwriting expenses		7,267		7,443			(2.4	%)		21,440			22,687			(5.5	%)		6,814			6,986			(2.5	%)
Underwriting income (loss)	$	28	$	(2,079	)		101.3	%	$	(932	)	$	(2,587	)		64.0	%
Underwriting loss																		$	(91	)	$	(612	)		(85.1	%)

	Quarters Ended September 30,						Point			Nine Months Ended September 30,						Point			Quarters Ended March 31,						Point
	2021			2020			Change			2021			2020			Change			2022			2021			Change
Underwriting Ratios:
Loss ratio:
Current accident year		62.0	%		79.9	%		(17.9	)		64.7	%		69.0	%		(4.3	)		64.1	%		69.2	%		(5.1	)
Prior accident year		(2.5	%)		(6.5	%)		4.0			(2.4	%)		(3.7	%)		1.3			(2.0	%)		(4.1	%)		2.1
Calendar year loss ratio		59.5	%		73.4	%		(13.9	)		62.3	%		65.3	%		(3.0	)		62.1	%		65.1	%		(3.0	)
Expense ratio		40.5	%		37.3	%		3.2			39.7	%		39.3	%		0.4			38.6	%		38.5	%		0.1
Combined ratio		100.0	%		110.7	%		(10.7	)		102.0	%		104.6	%		(2.6	)		100.7	%		103.6	%		(2.9	)

The table below reconciles the non-GAAP measures or ratios, which excludes the impact of prior accident year adjustments, to its most directly comparable GAAP measure or ratio. The Company believes the non-GAAP measures or ratios are useful to investors when evaluating the Company's underwriting performance as trends within Farm, Ranch & Stable may be obscured by prior accident year adjustments. These non-GAAP measures or ratios should not be considered as a substitute for its most directly comparable GAAP measure or ratio and does not reflect the overall underwriting profitability of the Company.

	Quarters Ended September 30,												Nine Months Ended September 30,												Quarters Ended March 31,
	2021						2020						2021						2020						2022						2021
(Dollars in thousands)	Losses			Loss Ratio			Losses			Loss Ratio			Losses			Loss Ratio			Losses			Loss Ratio			Losses			Loss Ratio			Losses			Loss Ratio
Property
Non catastrophe property losses and ratio excluding the effect of prior accident year ₍₁₎	$	7,400			55.2	%	$	6,292			41.9	%	$	20,824			51.6	%	$	16,106			38.2	%	$	7,426			55.8	%	$	5,967			44.0	%
Effect of prior accident year		6			—			(850	)		(5.7	%)		307			0.8	%		(2,115	)		(5.0	%)		(220	)		(1.7	%)		315			2.3	%
Non catastrophe property losses and ratio ₍₂₎	$	7,406			55.2	%	$	5,442			36.2	%	$	21,131			52.4	%	$	13,991			33.2	%	$	7,206			54.1	%	$	6,282			46.3	%

Catastrophe losses and ratio excluding the effect of prior accident year ₍₁₎	$	1,432			10.7	%	$	6,970			46.4	%	$	6,931			17.2	%	$	15,488			36.8	%	$	1,833			13.8	%	$	4,127			30.4	%
Effect of prior accident year		685			5.1	%		(472	)		(3.1	%)		(350	)		(0.9	%)		89			0.2	%		(7	)		(0.1	%)		(1,045	)		(7.7	%)
Catastrophe losses and ratio ₍₂₎	$	2,117			15.8	%	$	6,498			43.3	%	$	6,581			16.3	%	$	15,577			37.0	%	$	1,826			13.7	%	$	3,082			22.7	%

Total property losses and ratio excluding the effect of prior accident year ₍₁₎	$	8,832			65.9	%	$	13,262			88.3	%	$	27,755			68.8	%	$	31,594			75.0	%	$	9,259			69.6	%	$	10,094			74.4	%
Effect of prior accident year		691			5.1	%		(1,322	)		(8.8	%)		(43	)		(0.1	%)		(2,026	)		(4.8	%)		(227	)		(1.8	%)		(730	)		(5.4	%)
Total property losses and ratio ₍₂₎	$	9,523			71.0	%	$	11,940			79.5	%	$	27,712			68.7	%	$	29,568			70.2	%	$	9,032			67.8	%	$	9,364			69.0	%

Casualty
Total casualty losses and ratio excluding the effect of prior accident year ₍₁₎	$	2,297			50.6	%	$	2,693			54.4	%	$	7,188			52.5	%	$	8,213			52.7	%	$	2,057			47.5	%	$	2,452			53.6	%
Effect of prior accident year		(1,142	)		(25.2	%)		16			0.3	%		(1,260	)		(9.2	%)		(83	)		(0.5	%)		(131	)		(3.0	%)		(15	)		(0.3	%)
Total casualty losses and ratio ₍₂₎	$	1,155			25.4	%	$	2,709			54.7	%	$	5,928			43.3	%	$	8,130			52.2	%	$	1,926			44.5	%	$	2,437			53.3	%

Total
Total net losses and loss adjustment expense and total loss ratio excluding the effect of prior accident year ₍₁₎	$	11,129			62.0	%	$	15,955			79.9	%	$	34,943			64.7	%	$	39,807			69.0	%	$	11,316			64.1	%	$	12,546			69.2	%
Effect of prior accident year		(451	)		(2.5	%)		(1,306	)		(6.5	%)		(1,303	)		(2.4	%)		(2,109	)		(3.7	%)		(358	)		(2.0	%)		(745	)		(4.1	%)
Total net losses and loss adjustment expense and total loss ratio ₍₂₎	$	10,678			59.5	%	$	14,649			73.4	%	$	33,640			62.3	%	$	37,698			65.3	%	$	10,958			62.1	%	$	11,801			65.1	%

Other income was less than $0.1 million in each of the quarters ended ~~September 30, 2021~~March 31, 2022 and ~~2020 and $0.1 million in each of the nine months ended September 30, 2021 and 2020.~~2021. Other income is primarily comprised of fee income.

	Quarters Ended September 30,				%			Nine Months Ended September 30,				%			Quarters Ended March 31,				%
(Dollars in thousands)	2021		2020		Change			2021		2020		Change			2022		2021		Change
Property losses
Non-catastrophe	$	7,400	$	6,292		17.6	%	$	20,824	$	16,106		29.3	%	$	7,426	$	5,967		24.5	%
Catastrophe		1,432		6,970		(79.5	%)		6,931		15,488		(55.2	%)		1,833		4,127		(55.6	%)
Property losses		8,832		13,262		(33.4	%)		27,755		31,594		(12.2	%)		9,259		10,094		(8.3	%)
Casualty losses		2,297		2,693		(14.7	%)		7,188		8,213		(12.5	%)		2,057		2,452		(16.1	%)
Total accident year losses	$	11,129	$	15,955		(30.2	%)	$	34,943	$	39,807		(12.2	%)	$	11,316	$	12,546		(9.8	%)

	Quarters Ended September 30,						Point			Nine Months Ended September 30,						Point			Quarters Ended March 31,						Point
	2021			2020			Change			2021			2020			Change			2022			2021			Change
Current accident year loss ratio:
Property
Non-catastrophe		55.2	%		41.9	%		13.3			51.6	%		38.2	%		13.4			55.8	%		44.0	%		11.8
Catastrophe		10.7	%		46.4	%		(35.7	)		17.2	%		36.8	%		(19.6	)		13.8	%		30.4	%		(16.6	)
Property loss ratio		65.9	%		88.3	%		(22.4	)		68.8	%		75.0	%		(6.2	)		69.6	%		74.4	%		(4.8	)
Casualty loss ratio		50.6	%		54.4	%		(3.8	)		52.5	%		52.7	%		(0.2	)		47.5	%		53.6	%		(6.1	)
Total accident year loss ratio		62.0	%		79.9	%		(17.9	)		64.7	%		69.0	%		(4.3	)		64.1	%		69.2	%		(5.1	)

The current accident year non-catastrophe property loss ratio increased by ~~13.3~~11.8 points during the quarter ended ~~September 30, 2021~~March 31, 2022 as compared to the same period in ~~2020 reflecting higher claims severity.~~

~~The current accident year non-catastrophe property loss ratio increased by 13.4 points during the nine months ended September 30,~~ 2021 ~~as compared to the same period in 2020~~ due to higher claims frequency and ~~severity.~~severity in the first accident quarter compared to last year.

The current accident year catastrophe loss ratio improved by ~~35.7~~16.6 points during the quarter ended ~~September 30, 2021~~March 31, 2022 as compared to the same period in ~~2020~~2021 recognizing much lower claims frequency ~~and severity. The impact from~~in the ~~Midwest derecho on the 2020 third~~first accident quarter ~~loss ratio was 30.1 points.~~

~~The current accident year catastrophe loss ratio improved by 19.6 points during the nine months ended September 30, 2021 as~~ compared to ~~the same period in 2020 due to lower claims frequency and severity in the current calendar~~last year. ~~The impact from the Midwest derecho on the 2020 nine-month loss ratio was 10.7 points.~~

The current accident year casualty loss ratio improved by ~~3.8~~6.1 points during the quarter ended ~~September 30, 2021~~March 31, 2022 as compared to the same period in ~~2020~~2021 reflecting lower claims ~~severity.~~

~~The current~~severity in the first accident ~~year casualty loss ratio improved by 0.2 points during the nine months ended September 30, 2021 as~~quarter compared to ~~the same period in 2020 due to lower claims severity.~~last year.

The calendar year loss ratio for the quarter ~~and nine months~~ ended ~~September 30, 2021~~March 31, 2022 includes a decrease of ~~$0.5~~$0.4 million, or ~~2.5~~2.0 percentage points ~~and a decrease of $1.3 million, or 2.4 percentage points, respectively,~~ related to reserve development on prior accident years. The calendar year loss ratio for the quarter ~~and nine months~~ ended ~~September 30, 2020~~March 31, 2021 includes a decrease of ~~$1.3~~$0.7 million, or ~~6.5~~4.1 percentage points ~~and a decrease of $2.1 million, or 3.7 percentage points, respectively,~~ related to reserve development on prior accident years. Please see Note 87 of the notes to the consolidated financial statements in Item 1 of Part I of this report for further discussion on prior accident year development.

The expense ratio for the Company’s Farm, Ranch & Stable Segment increased by ~~3.2~~0.1 points from ~~37.3%~~38.5% for the quarter ended ~~September 30, 2020~~March 31, 2021 to ~~40.5%~~38.6% for the quarter ended September 30, 2021 and increased 0.4 points from 39.3% for the nine months ended September 30, 2020 to 39.7% for the nine months ended September 30, 2021. The increase in the expense ratio is primarily due to a reduction in earned premiums partially offset by a reduction in the commission rate partially driven by a change in agent distribution.March 31, 2022.

There is continued risk that legislation could be passed or there could be a court ruling which would require the Company to cover business interruption claims regardless of terms, exclusions including the virus exclusions contained within the Company’s Farm, Ranch & Stable policies, or other conditions included in these policies that would otherwise preclude coverage.

COVID-19’s lasting impacts could result in declines in business, non-payment of premiums, and increases in claims that could adversely affect Farm, Ranch & Stable’s business, financial condition, and results of operation.

The components of income from the Company’s ~~Reinsurance Operations~~Exited Lines segment and corresponding underwriting ratios are as follows:

	Quarters Ended September 30,					%			Nine Months Ended September 30,					%			Quarters Ended March 31,					%
(Dollars in thousands)	2021 (1)			2020 (1)		Change			2021 (1)			2020 (1)		Change			2022		2021			Change
Gross written premiums	$	29,565		$	14,605		102.4	%	$	76,123		$	48,174		58.0	%	$	22,596	$	31,271			(27.7	%)

Net written premiums	$	29,565		$	14,605		102.4	%	$	76,123		$	48,174		58.0	%	$	712	$	25,957			(97.3	%)

Net earned premiums	$	26,077		$	15,049		73.3	%	$	66,305		$	58,450		13.4	%	$	4,454	$	30,069			(85.2	%)
Other income (loss)		(58	)		112		(151.8	%)		(100	)		96	NM
Other income																		162		186			(12.9	%)
Total revenues		26,019			15,161		71.6	%		66,205			58,546		13.1	%		4,616		30,255			(84.7	%)

Losses and expenses:
Net losses and loss adjustment expenses		15,456			5,190		197.8	%		39,382			29,584		33.1	%		227		18,317			(98.8	%)
Acquisition costs and other underwriting expenses		9,631			5,518		74.5	%		24,007			19,762		21.5	%		4,012		12,947			(69.0	%)
Underwriting income	$	932		$	4,453		(79.1	%)	$	2,816		$	9,200		(69.4	%)	$	377	$	(1,009	)		(137.4	%)

	Quarters Ended September 30,						Point			Nine Months Ended September 30,						Point		Quarters Ended March 31,						Point
	2021			2020			Change			2021			2020			Change		2022			2021			Change
Underwriting Ratios:
Loss ratio:
Current accident year ₍₂₎		61.2	%		66.8	%		(5.6	)		61.6	%		59.4	%		2.2		72.0	%		61.2	%		10.8
Prior accident year		(2.0	%)		(32.3	%)		30.3			(2.2	%)		(8.8	%)		6.6		(67.0	%)		(0.2	%)		(66.8	)
Calendar year loss ratio ₍₃₎		59.2	%		34.5	%		24.7			59.4	%		50.6	%		8.8		5.0	%		61.0	%		(56.0	)
Expense ratio		36.9	%		36.7	%		0.2			36.2	%		33.8	%		2.4		90.1	%		43.1	%		47.0
Combined ratio		96.1	%		71.2	%		24.9			95.6	%		84.4	%		11.2		95.1	%		104.1	%		(9.0	)

The table ~~above includes a reconciliation~~below reconciles the non-GAAP measures or ratios, which excludes the impact of ~~the current~~prior accident year ~~loss ratio, which is a non-GAAP ratio,~~adjustments, to ~~its calendar year loss ratio, which is~~ its most directly comparable GAAP measure or ratio. The Company believes the non-GAAP ~~ratio is~~measures or ratios are useful to investors when evaluating the Company's underwriting performance as trends ~~in the Company's Reinsurance Operations~~within Exited Lines may be obscured by prior accident year adjustments. ~~This~~These non-GAAP ~~ratio~~measures or ratios should not be considered as a substitute for its most directly comparable GAAP measure or ratio and does not reflect the overall underwriting profitability of the Company.

	Quarters Ended March 31,
	2022						2021
(Dollars in thousands)	Losses			Loss Ratio			Losses			Loss Ratio
Property
Non catastrophe property losses and ratio excluding the effect of prior accident year ₍₁₎	$	2,589			60.2	%	$	13,370			47.2	%
Effect of prior accident year		(1,317	)		(30.6	%)		1,726			6.1	%
Non catastrophe property losses and ratio ₍₂₎	$	1,272			29.6	%	$	15,096			53.3	%

Catastrophe losses and ratio excluding the effect of prior accident year ₍₁₎	$	238			5.5	%	$	4,065			14.4	%
Effect of prior accident year		(1,349	)		(31.3	%)		(562	)		(2.0	%)
Catastrophe losses and ratio₍₂₎	$	(1,111	)		(25.8	%)	$	3,503			12.4	%

Total property losses and ratio excluding the effect of prior accident year ₍₁₎	$	2,827			65.7	%	$	17,435			61.6	%
Effect of prior accident year		(2,666	)		(61.9	%)		1,164			4.1	%
Total property losses and ratio ₍₂₎	$	161			3.8	%	$	18,599			65.7	%

Casualty
Total casualty losses and ratio excluding the effect of prior accident year ₍₁₎	$	382			256.2	%	$	954			54.7	%
Effect of prior accident year		(316	)		(211.8	%)		(1,236	)		(70.9	%)
Total casualty losses and ratio ₍₂₎	$	66			44.4	%	$	(282	)		(16.2	%)

Total
Total net losses and loss adjustment expense and total loss ratio excluding the effect of prior accident year ₍₁₎	$	3,209			72.0	%	$	18,389			61.2	%
Effect of prior accident year		(2,982	)		(67.0	%)		(72	)		(0.2	%)
Total net losses and loss adjustment expense and total loss ratio ₍₂₎	$	227			5.0	%	$	18,317			61.0	%

~~The Company recognized other loss of $0.1 million and other~~Other income ~~of $0.1 million during the quarter ended September 30, 2021 and 2020, respectively, and recognized other loss of $0.1 million and other income of $0.1~~was $0.2 million for each of the ~~nine months~~quarters ended ~~September 30, 2021~~March 31, 2022 and ~~2020, respectively.~~2021. Other income ~~(loss)~~ is primarily comprised of ~~foreign exchange gains and losses.~~fee income.

The current accident year losses and loss ratio ~~improved~~is summarized as follows:

The current accident year non-catastrophe property loss ratio increased by ~~5.6~~13.0 points during the quarter ended ~~September 30, 2021~~March 31, 2022 as compared to the same period in ~~2020. The decrease~~2021 recognizing higher claims frequency in the ~~current accident year loss ratio reflects an improvement~~specialty property lines and higher claims severity in ~~both~~ the property ~~and casualty loss ratios.~~brokerage lines.

The current accident year catastrophe loss ratio ~~increased~~improved by ~~2.2~~8.9 points during the ~~nine months~~quarter ended ~~September 30, 2021~~March 31, 2022 as compared to the same period in ~~2020. The increase~~2021 recognizing lower claims frequency in the specialty property lines and lower claims frequency and severity in the property brokerage lines.

The current accident year casualty loss ratio increased by 201.5 points during the quarter ended March 31, 2022 as compared to the same period in 2021 which reflects ~~a mix of business shift~~that the premium has been running off and is down to ~~more casualty premium which has a higher expected loss ratio than property.~~$0.1 million in net earned premiums in the quarter.

The calendar year loss ratio for the quarter ~~and nine months~~ ended ~~September 30, 2021~~March 31, 2022 includes a decrease of ~~$0.5~~$3.0 million, or ~~2.0~~67.0 percentage points ~~and a decrease of $1.5 million, or 2.2 percentage points, respectively,~~ related to reserve development on prior accident years. The calendar year loss ratio for the quarter ~~and nine months~~ ended ~~September 30, 2020~~March 31, 2021 includes a decrease of ~~$4.9~~$0.1 million, or ~~32.3~~0.2 percentage points ~~and a decrease of $5.1 million, or 8.8 percentage points, respectively,~~ related to reserve development on prior accident years. Please see Note 87 of the notes to the consolidated financial statements in Item 1 of Part I of this report for further discussion on prior accident year development.

The expense ratio for the Company’s ~~Reinsurance Operations~~Exited Lines increased by ~~0.2~~47.0 points from ~~36.7%~~43.1% for the quarter ended ~~September 30, 2020~~March 31, 2021 to ~~36.9%~~90.1% for the quarter ended ~~September 30, 2021.~~

The expense ratio for the Company’s Reinsurance Operations increased by 2.4 points from 33.8% for the nine months ended September 30, 2020 to 36.2% for the nine months ended September 30, 2021. The increase in the expense ratio isMarch 31, 2022 primarily due to ~~a change~~the reduction in earned premiums resulting from the runoff of lines of business ~~mix as well as an increase in profit commissions.~~ that the Company is no longer writing.

COVID-19’s lasting impacts could result in declines in business, non-payment of premiums, and increases in claims that could adversely affect the ~~Reinsurance Operations’~~Exited Lines’ business, financial condition, and results of operation.

The Company’s fixed income portfolio, excluding cash, continues to maintain high quality with an A average rating and a duration of ~~3.3~~3.0 years.

	Quarters Ended September 30,						%			Nine Months Ended September 30,						%			Quarters Ended March 31,						%
(Dollars in thousands)	2021			2020			Change			2021			2020			Change			2022			2021			Change
Gross investment income ₍₁₎	$	10,010		$	12,556			(20.3	%)	$	31,827		$	21,662			46.9	%	$	7,196		$	10,549			(31.8	%)
Investment expenses		(666	)		(810	)		(17.8	%)		(2,014	)		(2,146	)		(6.2	%)		(604	)		(713	)		(15.3	%)
Net investment income	$	9,344		$	11,746			(20.4	%)	$	29,813		$	19,516			52.8	%	$	6,592		$	9,836			(33.0	%)

Gross investment income decreased by ~~20.3%~~31.8% for the quarter ~~and increased by 46.9% for the nine months~~ ended ~~September 30, 2021, respectively,~~March 31, 2022 as compared to the same period in ~~2020. The decrease for the quarter was~~2021 primarily due to ~~a decrease in yield within the fixed maturities portfolio. The increase for nine months ended was primarily due to increased~~decreased returns from alternative investments ~~offset by~~and a decrease in ~~yield within~~dividend income as a result of the ~~fixed maturities portfolio.~~liquidation of the Company’s common stock portfolio during the quarter.

Investment expenses decreased by ~~17.8% and 6.2%~~15.3% for the quarter ~~and nine months~~ ended ~~September 30, 2021, respectively,~~March 31, 2022 as compared to the same period in ~~2020~~2021 due to decreased investment management expenses as a result of ~~a reduction in~~ the ~~size~~liquidation of the ~~investment portfolio.~~Company’s common stock portfolio during the quarter.

At ~~September 30, 2021,~~March 31, 2022, the Company held agency mortgage-backed securities with a market value of ~~$170.8~~$129.2 million. Excluding the agency mortgage-backed securities, the average duration of the Company’s fixed maturities portfolio was ~~3.8~~3.2 years as of ~~September 30, 2021,~~March 31, 2022, compared with ~~4.8~~4.9 years as of ~~September 30, 2020.~~March 31, 2021. Including cash and short-term investments, the average duration of the Company’s fixed maturities portfolio, excluding agency mortgage-backed securities, was ~~3.6~~2.8 years and ~~4.6~~4.7 years as of ~~September 30,~~March 31, 2022 and March 31, 2021, ~~and September 30, 2020,~~ respectively. Changes in interest rates can cause principal payments on certain investments to extend or shorten which can impact duration. The Company’s embedded book yield on its fixed maturities, not including cash, was ~~2.1%~~2.6% as of ~~September 30, 2021,~~March 31, 2022, compared to ~~2.4%~~2.3% as of ~~September 30, 2020.~~March 31, 2021. The embedded book yield on the ~~$54.4~~$47.0 million of taxable municipal bonds in the Company’s portfolio, was ~~2.7%~~3.2% at ~~September 30, 2021,~~March 31, 2022, compared to an embedded book yield of 3.0% on the Company’s taxable municipal bonds of ~~$62.0~~$63.7 million at ~~September 30, 2020.~~March 31, 2021.

The components of net realized investment gains (losses) for the quarters ended March 31, 2022 and ~~nine months ended September 30,~~ 2021 ~~and 2020~~ were as follows:

	Quarters Ended September 30,					Nine Months Ended September 30,					Quarters Ended March 31,
(Dollars in thousands)	2021			2020		2021		2020			2022			2021
Equity securities	$	(1,662	)	$	4,887	$	6,101	$	(17,201	)	$	(1,345	)	$	4,368
Fixed maturities		1,447			2,276		741		17,028			(3,239	)		(1,159	)
Derivatives		(95	)		160		500		(22,159	)		4,724			610
Other-than-temporary impairment losses												(25,525	)		—
Net realized investment gains (losses)	$	(310	)	$	7,323	$	7,342	$	(22,332	)	$	(25,385	)	$	3,819

In response to a rising interest rate environment, the Company took action early in April 2022 to shorten the duration of its fixed maturities portfolio. The Company identified fixed maturities securities with a weighted average life of five years or greater as having an intent to sell. These securities had a fair market value of $365.3 million and a book value of $390.8 million at March 31, 2022 prior to impairment. Most of the proceeds from the sale of these securities are being reinvested into fixed income investments with maturities of two years and less.

See Note 32 of the notes to the consolidated financial statements in Item 1 of Part I of this report for an analysis of total investment return on a pre-tax basis for the quarters ended March 31, 2022 and ~~nine months ended September 30, 2021 and 2020.~~2021.

Corporate and other operating expenses consist of outside legal fees, other professional fees, directors’ fees, management fees & advisory fees, salaries and benefits for holding company personnel, development costs for new products, and taxes incurred which are not directly related to operations. Corporate and other operating expenses were ~~$5.4~~$4.7 million and ~~$21.2~~$4.3 million during the quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $16.0 million and $34.0 million during the nine months ended September 30, 2021 and 2020,~~ respectively. ~~Corporate~~The increase in corporate expenses ~~were higher in 2020~~was primarily due to ~~incurring additional professional fees related to the redomestication.~~an increase in compensation cost.

Interest expense ~~decreased 28.3% and 40.2%~~was $2.6 million during ~~the quarter and nine months ended September 30, 2021, respectively, as compared to the same period in 2020 primarily due to the redemption~~each of the ~~Company’s~~ ~~7.75% Subordinated Notes due in 2045~~quarters ended March 31, 2022 and ~~the repayment of the margin borrowing facility in August, 2020.~~2021.

Income tax benefit was ~~$1.8~~$3.4 million and ~~$3.2~~$0.2 million for the quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. The ~~reduction~~increase in the income tax benefit is primarily due to the ~~recognition of a tax benefit of $1.7 million for a change in tax status for~~ net ~~insurance liabilities that were redomiciled from Bermuda at 0% tax rate~~realized investment losses recognized due to the ~~United States in 2020.~~

~~Income tax benefit was $1.1 million and $8.2 million for~~impairment of the ~~nine months ended September 30, 2021 and 2020, respectively. The reduction~~investment portfolio as discussed above in the ~~income tax benefit is primarily due to an increase in pre-tax income of the Company’s U.S. subsidiaries.~~net realized investment gains (losses) section.

See Note 76 of the notes to the consolidated financial statements in Item 1 of Part I of this report for a comparison of income tax between periods.

The factors described above resulted in a net loss of ~~$7.7~~$14.8 million and ~~$15.2~~net income of $5.5 million for the quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and a net income of $4.2 million and net loss of $22.2 million for the nine months ended September 30, 2021 and 2020,~~ respectively.

Global Indemnity Group, LLC is a holding company. Its principal asset is its ownership of the shares of its direct and indirect subsidiaries, including those of its insurance companies: United National Insurance Company, Diamond State Insurance Company, Penn-America Insurance Company, Penn-Star Insurance Company, Penn-Patriot Insurance Company, and American Reliable Insurance Company.

Global Indemnity Group, LLC’s short term and long term liquidity needs include but are not limited to the payment of corporate expenses, debt service payments, distributions to shareholders, and share repurchases. The Company also has commitments in the form of operating leases, commitments to fund limited liability investments, subordinated notes, and unpaid losses and loss expense obligations. In order to meet ~~their~~its short term and long term needs, Global Indemnity Group, LLC’s principal sources of cash includes investment income, dividends from subsidiaries, other permitted disbursements from its direct and indirect subsidiaries, reimbursement for equity awards granted to employees and intercompany borrowings. The principal sources of funds at these direct and indirect subsidiaries include underwriting operations, investment income, proceeds from sales and redemptions of investments, capital contributions, intercompany borrowings, and dividends from subsidiaries. Funds are used principally by these operating subsidiaries to pay claims and operating expenses, to make debt payments, fund margin requirements on interest rate swap agreements, to purchase investments, and to make distribution payments. In addition, the Company periodically reviews opportunities related to business acquisitions and as a result, liquidity may be needed in the future.

GBLI Holdings, LLC is a holding company which is a wholly-owned subsidiary of Penn-Patriot Insurance Company. GBLI Holdings, LLC’s principal asset is its ownership of the shares of its direct and indirect subsidiaries which include United National Insurance Company, Diamond State Insurance Company, Penn-America Insurance Company, Penn-Star Insurance Company, and American Reliable Insurance Company. GBLI Holdings, LLC is dependent on dividends from its subsidiaries to meet its debt obligations as well as corporate expense obligations.

As of ~~September 30, 2021,~~March 31, 2022, the Company also had future funding commitments of $31.2 million related to investments that are currently in their harvest period and it is unlikely that a capital call will be made.

The future liquidity of both Global Indemnity Group, LLC and GBLI Holdings, LLC is dependent on the ability of its subsidiaries to pay dividends. Global Indemnity Group, LLC and GBLI Holdings, LLC’s insurance companies are restricted by statute as to the amount of dividends that they may pay without the prior approval of regulatory authorities. The dividend limitations imposed by state laws are based on the statutory financial results of each insurance company that are determined by using statutory accounting practices that differ in various respects from accounting principles used in financial statements prepared in conformity with GAAP. See “Regulation - Statutory Accounting Principles” in Item 1 of Part I of the Company’s ~~2020~~2021 Annual Report on Form 10-K. Key differences relate to, among other items, deferred acquisition costs, limitations on deferred income taxes, reserve calculation assumptions and surplus notes. See Note 2021 of the notes to the consolidated financial statements in Item 8 of Part II of the Company’s ~~2020~~2021 Annual Report on Form 10-K for further information on dividend limitations related to the Insurance Companies. ~~The Insurance Companies did not declare or pay any dividends during~~During the quarter ended March 31, 2022, the United National insurance companies, Penn-America insurance companies, and ~~nine months ended September 30, 2021.~~ American Reliable Insurance Company declared dividends in the amount of $4.5 million, $7.5 million, and $22.5 million, respectively. These dividends were in April, 2022.

Sources of operating funds consist primarily of net written premiums and investment income. Funds are used primarily to pay claims and operating expenses and to purchase investments. As a result of the distribution policy, funds may also be used ~~in the future~~ to pay distributions to shareholders of the Company.

The Company’s reconciliation of net income (loss) to net cash provided by (used for) operations is generally influenced by the following:

Net cash provided by (used for) operating activities was ~~$66.1~~($10.1) million and ~~$33.9~~$11.4 million for the ~~nine months~~quarters ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. The ~~increase~~decrease in operating cash flows of approximately ~~$32.1~~$21.4 million from the prior year was primarily a net result of the following items:

	Nine Months Ended September 30,									Quarters Ended March 31,
(Dollars in thousands)	2021			2020			Change			2022			2021			Change
Net premiums collected	$	464,650		$	418,598		$	46,052		$	132,367		$	148,915		$	(16,548	)
Net losses paid		(226,152	)		(231,038	)		4,886			(74,081	)		(74,409	)		328
Underwriting and corporate expenses		(192,147	)		(183,883	)		(8,264	)		(74,087	)		(69,968	)		(4,119	)
Net investment income		27,495			33,428			(5,933	)		8,299			9,360			(1,061	)
Net federal income taxes recovered (paid)		(11	)		10,859			(10,870	)
Interest paid		(7,781	)		(14,028	)		6,247			(2,560	)		(2,526	)		(34	)
Net cash provided by operating activities	$	66,054		$	33,936		$	32,118
Net cash provided by (used for) operating activities										$	(10,062	)	$	11,372		$	(21,434	)

See the consolidated statements of cash flows in the consolidated financial statements in Item 1 of Part I of this report for details concerning the Company’s investing and financing activities.

The Company’s liquidity could be negatively impacted by the cancellation, delays, or non-payment of premiums related to the ongoing COVID-19 pandemic and its lasting impacts. There is continued risk that legislation could be passed or there could be a court ruling which would require the Company to cover business interruption claims regardless of terms, exclusions including the virus exclusions contained within the Company’s Commercial Specialty and Farm, Ranch & Stable policies, or other conditions included in policies that would otherwise preclude coverage which would negatively impact liquidity. In addition, the liquidity of the Company’s investment portfolio could be negatively impacted by disruption experienced in global financial markets. Management is taking actions it considers prudent to minimize the impact on the

Company’s liquidity. However, given the ongoing uncertainty surrounding the duration, magnitude and geographic reach of COVID-19, the Company is regularly evaluating the impact of COVID-19 on its liquidity.

~~During 2021, the~~The Board of Directors approved a distribution payment of $0.25 per common share to all shareholders of record on the close of business on March ~~22, 2021, June~~ 21, ~~2021, and September 23, 2021.~~2022. Distributions paid to common shareholders were ~~$10.8~~$3.7 million during the ~~nine months~~quarter ended ~~September 30, 2021.~~March 31, 2022. In addition, distributions of ~~$0.3~~$0.1 million were paid to Global Indemnity Group, LLC’s preferred shareholder during the ~~nine months~~quarter ended ~~September 30, 2021.~~March 31, 2022.

On ~~October 26, 2021~~April 15, 2022, the Company ~~announced~~redeemed the entire $130 million in aggregate principal amount of the outstanding 2047 Notes plus accrued and unpaid interest on the 2047 Notes redeemed to, but not including the Redemption Date of April 15, 2022. The funds to redeem the debt were primarily obtained through the sale of ~~its manufactured and dwelling homes business lines to K2 Insurance Services and American Family Mutual Insurance Company. Pursuant to~~ the ~~tripartite transaction,~~Company’s equity portfolio in the ~~Company will receive $30.4~~amount of $75.9 million, $32.0 million in ~~cash as well as retain~~dividends from insurance company subsidiaries, $18.4 million from distributions received from private equity investments, and the American Reliable 50-state licensed operating unit, $65 million of net capital supporting the business, and a related $42 million unearned premium reserve. The sales price of manufactured and dwelling homes business lines was $28 million. In addition, K2 is subleasing approximately a thirdremainder from its subsidiary, GBLI Holdings, LLC.

Due to shortening duration, significantly more of the Company’s Scottsdale Arizona office. Payments from the sublease are expected to be $2.4 million between October 2021 and November 2029. To facilitate the transaction, American Reliable retained the specialty residential property business in Florida and Louisiana and also retained business that was previously placed in runoff. American Reliable plans to cease writing manufactured home and dwelling insurance in Florida and Louisiana as soon as possible. American Family is assuming 100% of the risks for all policies covered under the renewal rights agreement which are written or renewed after October 26, 2021, except for policies covering properties in the state of Florida. For the nine months ended September 30, 2021, Manufactured Home and Dwelling gross written premium was $79.6 million.investment portfolio will mature annually.

Other than the items discussed in the preceding paragraphs, there have been no material changes to the Company’s liquidity during the quarter ~~and nine months~~ ended ~~September 30, 2021.~~March 31, 2022. Please see Item 7 of Part II in the Company’s ~~2020~~2021 Annual Report on Form 10-K for information regarding the Company’s liquidity.

~~On September 27, 2021, Global Indemnity Investments Inc. repaid~~In response to a rising interest rate environment, the Company took action early in April 2022 to shorten the duration of its ~~promissory note~~fixed maturities portfolio. The Company identified fixed maturities securities with ~~Global Indemnity Group, LLC. As~~a weighted average life of ~~September 30, 2021, there~~five years or greater as having an intent to sell. These securities had a fair market value of $365.3 million and a book value of $390.8 million at March 31, 2022 prior to impairment. Most of the proceeds from the sale of these securities are ~~no intercompany notes outstanding.~~being reinvested into fixed income investments with maturities of two years and less.

Other than the item discussed in the preceding paragraph, there have been no material changes to the Company’s capital resources during the quarter ~~and nine months~~ ended ~~September 30, 2021.~~March 31, 2022. Please see Item 7 of Part II in the Company’s ~~2020~~2021 Annual Report on Form 10-K for information regarding the Company’s capital resources.

The Company is providing the following information in compliance with Rule 13-01 of Regulation S-X, “Financial Disclosures about Guarantors and Issuers of Guaranteed Securities” with respect to the Company’s 7.875% Subordinated Notes due in 2047 (“2047 Notes”). Global Indemnity Group, LLC (parent co-obligor) and GBLI Holdings, LLC (subsidiary co-obligor) are co-obligors of the 2047 Notes. GBLI Holdings, LLC is a wholly-owned indirect subsidiary of Global Indemnity Group, LLC. The 2047 Notes are subordinated unsecured obligations and rank (i) senior to the companies’

existing and future capital stock, (ii) senior in right of payment to the companies’ future junior subordinated debt, (iii) equally in right of payment with any existing unsecured, subordinated debt that the companies have issued or may issue in the future that ranks equally with the 2047 Notes, and (iv) subordinate in right of payment to any of the companies’ future senior debt. In addition, the 2047 Notes are structurally subordinated to all existing and future indebtedness, liabilities and other obligations of Global Indemnity Group, LLC’s subsidiaries, except for GBLI Holdings, LLC.

GBLI Holdings, LLC is a subordinated co-obligor with respect to the 2047 Notes with the same obligations and duties as Global Indemnity Group, LLC under the Indenture (including the due and punctual performance and observance of all of the covenants and conditions to be performed by Global Indemnity Group, LLC, including, without limitation, the obligation to pay the principal of, and interest on, the 2047 Notes when due whether at maturity, by acceleration, redemption or otherwise), and with the same rights, benefits and privileges of Global Indemnity Group, LLC thereunder. Notwithstanding the

foregoing, GBLI Holdings, LLC's obligations (including the obligation to pay the principal of and interest in respect of the 2047 Notes) are subject to subordination to all monetary obligations or liabilities of GBLI Holdings, LLC owing to any regulated reinsurance or insurance company that is a direct or indirect subsidiary of Global Indemnity Group, LLC, in addition to indebtedness of GBLI Holdings, LLC for borrowed money. If Global Indemnity Group, LLC pays any amount with respect to the subordinated note obligations, Global Indemnity Group, LLC is entitled to be reimbursed by GBLI Holdings, LLC within 10 business days after a demand is made to GBLI Holding, LLC by Global Indemnity Group, LLC.

The following tables present summarized financial information for Global Indemnity Group, LLC (Parent co-obligor) and GBLI Holdings, LLC (Subsidiary co-obligor) on a combined basis after transactions and balances within the combined entities have been eliminated.

The following table presents the summarized balance sheet information as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.


(Dollars in thousands)	September 30, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Intercompany note receivable	$	—	$	11,283	$	—	$	—
Intercompany receivables		654		57		852		1,079
Investments		242,565		250,863		155,848		246,863
Total assets excluding investment in subsidiaries		305,180		324,229		324,722		308,541
Intercompany note payable						2,800		2,800
Intercompany payables		7,450		5,515		15,542		15,567
Total liabilities		156,649		158,423		158,459		165,711

The following table presents the summarized statement of operations information for the ~~nine months~~quarter ended ~~September 30, 2021.~~March 31, 2022.


(Dollars in thousands)
Total revenue	$	12,754		$	2,784
Intercompany interest income		64			—
Intercompany interest expense		—			2
Loss before income taxes ₍₁₎		(10,631	)		(4,386	)
Net loss ₍₁₎		(6,654	)		(3,881	)

Some of the statements under “Management's Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report may include forward-looking statements within the meaning of Section 21E of the Security Exchange Act of 1934, as amended, that reflect the Company’s current views with respect to future events and financial

performance. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology, and include discussions of strategy, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives, expectations or consequences of identified transactions or natural disasters, and statements about the future performance, operations, products and services of the companies.

The Company’s business and operations are and will be subject to a variety of risks, uncertainties and other factors. Consequently, actual results and experience may materially differ from those contained in any forward-looking statements. See “Risk Factors” in Item 1A of Part I in the Company’s ~~2020~~2021 Annual Report on Form 10-K for risks, uncertainties and

other factors that could cause actual results and experience to differ from those projected. The Company’s forward-looking statements speak only as of the date of this report or as of the date they were made. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

For the quarter ending ~~September 30, 2021,~~March 31, 2022, global equities fell approximately ~~1.0%~~5.0% with U.S. equities outperforming, ~~returning~~losing approximately ~~0.6%~~4.6%. Most assets experienced elevated volatility over the quarter as Russia’s invasion of Ukraine and the subsequent imposition of financial sanctions added stress to already fragile global supply chains and raised concerns over commodity supplies. This amplified inflationary fears and contributed to more hawkish stances from central banks, higher global yields and flattening curves. U.S. fixed income ~~returned~~lost approximately ~~0.1%~~5.9% with the average spread ~~nearly unchanged while 10 year treasury rates declined to start~~moving wider during the ~~quarter before retracing all of~~quarter. In the ~~decline by quarter end. As market participants gain confidence around~~U.S., yields rose and the curve inverted along several key tenors as the Federal ~~Reserve’s plans to taper asset purchases~~Reserve hiked interest rates by approximately 25 basis points and signaled larger hikes going forward. Unemployment remains at very low levels and the ~~end~~consumer balance sheet is strong, two factors that should help mitigate the stresses of ~~the year, the focus begins to shift toward tightening, and with that a renewed emphasis on data dependency, particularly regarding potentially elevated levels of~~higher inflation and ~~unemployment metrics. In terms~~rising rates.

During the 1^st quarter of fiscal policy, democrats struggle to work with their thin majorities in both houses to pass an infrastructure and social spending plan as well as an extension of the debt ceiling. With economic growth softening, plagued by supply-chain bottlenecks and elevated unemployment, the requisite tax plans that will accompany large spending deserve close attention as they could serve to dampen growth going forward. While we have seen heightened market volatility of late, spreads remain at tight levels.

~~The Company’s investment grade fixed income~~2022, portfolio ~~continues to maintain high quality with an A average rating and a duration of 3.3 years. Portfolio~~ purchases were focused within US Treasury, ~~asset backed,~~agency, and investment grade credit securities. These purchases were funded primarily through cash inflows, sales of US Treasury, ~~MBS,~~agency, and investment grade credit securities, as well as maturities and paydowns. During the ~~third~~first quarter, the portfolio’s allocation to ~~asset backed and~~ investment grade credit increased, while the portfolio’s exposure to Asset Backed, MBS, and US Treasuries decreased. ~~There~~During the 2^nd quarter of 2022, in response to a rising interest rate environment, the Company took action to shorten the duration of its fixed maturities portfolio. The Company identified fixed maturities securities with a weighted average life of five years or greater as having an intent to sell. Most of the proceeds from the sale of these securities are being reinvested into fixed income investments with maturities of two years and less.

Other than the changes described in the preceding paragraph, there have been no other material changes to the Company’s market risk since December 31, ~~2020.~~2021. Please see Item 7A of Part II in the Company’s ~~2020~~2021 Annual Report on Form 10-K for information regarding the Company’s market risk.

The Company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of ~~September 30, 2021.~~March 31, 2022. Based upon that evaluation, and subject to the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, as of ~~September 30, 2021,~~March 31, 2022, the design and operation of the Company’s disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

There have been no changes in the Company’s internal controls over financial reporting that occurred during the quarter ended ~~September 30, 2021~~March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

The Company is, from time to time, involved in various legal proceedings in the ordinary course of business. The Company maintains insurance and reinsurance coverage for risks in amounts that it considers adequate. However, there can be no assurance that the insurance and reinsurance coverage that the Company maintains is sufficient or will be available in adequate amounts or at a reasonable cost. The Company does not believe that the resolution of any currently pending legal proceedings, either individually or taken as a whole, will have a material adverse effect on its business, results of operations, cash flows, or financial condition.

There is a greater potential for disputes with reinsurers who are in runoff. Some of the Company’s reinsurers’ have operations that are in runoff, and therefore, the Company closely monitors those relationships. The Company anticipates that, similar to the rest of the insurance and reinsurance industry, it will continue to be subject to litigation and arbitration proceedings in the ordinary course of business.

The Company’s results of operations and financial condition are subject to numerous risks and uncertainties described in Item 1A of Part I in the Company’s ~~2020~~2021 Annual Report on Form 10-K, filed with the SEC on March ~~12, 2021 as supplemented by the Company’s Quarterly Report on Form 10Q for the quarterly period ending June 30, 2021 filed on August 6, 2021.~~16, 2022. The risk factors identified therein have not materially changed.

The Company’s Share Incentive Plan allows employees to surrender the Company’s class A common shares as payment for the tax liability incurred upon the vesting of restricted stock. There were no4,781 shares surrendered by the Company’s employees during the quarter ended ~~September 30, 2021.~~March 31, 2022. All class A common shares surrendered by the Company’s employees are held as treasury stock and recorded at cost until formally retired.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Large accelerated filer	☐;	Accelerated filer	☒;

Non-accelerated filer	☐;	Smaller reporting company	☐;

Emerging growth company	☐

			Page
	PART I – FINANCIAL INFORMATION

Item 1.		Financial Statements:	3

		Consolidated Balance Sheets As of ~~September 30, 2021~~March 31, 2022 (Unaudited) and December 31, ~~2020~~2021	3

		Consolidated Statements of Operations Quarters ~~and Nine Months~~ Ended ~~September 30, 2021~~March 31, 2022 (Unaudited) and ~~September 30, 2020~~March 31, 2021 (Unaudited)	4

		Consolidated Statements of Comprehensive Income (Loss) Quarters ~~and Nine Months~~ Ended ~~September 30, 2021~~March 31, 2022 (Unaudited) and ~~September 30, 2020~~March 31, 2021 (Unaudited)	5

		Consolidated Statements of Changes in Shareholders’ Equity Quarters ~~and Nine Months~~ Ended ~~September 30, 2021~~March 31, 2022 (Unaudited) and ~~September 30, 2020~~March 31, 2021 (Unaudited)	6

		Consolidated Statements of Cash Flows ~~Nine Months~~Quarters Ended ~~September 30, 2021~~March 31, 2022 (Unaudited) and ~~September 30, 2020~~March 31, 2021 (Unaudited)	7

		Notes to Consolidated Financial Statements (Unaudited)	8

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	4433

Item 3.		Quantitative and Qualitative Disclosures about Market Risk	6856

Item 4.		Controls and Procedures	6856

	PART II – OTHER INFORMATION

Item 1.		Legal Proceedings	7057

Item 1A.		Risk Factors	7057

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	7057

Item 3.		Defaults Upon Senior Securities	7057

Item 4.		Mine Safety Disclosures	7057

Item 5.		Other Information	7057

Item 6.		Exhibits	7158

Signature			7259

Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Shares	GBLI	~~NASDAQ Global Select Market~~New York Stock Exchange
7.875% Subordinated Notes due 2047	~~GBLIL~~GBLL	~~NASDAQ Global Select Market~~New York Stock Exchange

Quarter Ended September 30, 2021 (Dollars in thousands)	Non-U.S. Subsidiaries		U.S. Subsidiaries			Eliminations		Total
Revenues:
Gross written premiums	$	0	$	174,303		$	0	$	174,303
Net written premiums	$	0	$	162,299		$	0	$	162,299
Net earned premiums	$	0	$	157,565		$	0	$	157,565
Net investment income		0		9,344			0		9,344
Net realized investment losses		0		(310	)		0		(310	)
Other income		0		389			0		389
Total revenues		0		166,988			0		166,988
Losses and Expenses:
Net losses and loss adjustment expenses		0		109,195			0		109,195
Acquisition costs and other underwriting expenses		0		59,282			0		59,282
Corporate and other operating expenses		0		5,387			0		5,387
Interest expense		0		2,596			0		2,596
Loss before income taxes	$	0	$	(9,472	)	$	0	$	(9,472	)

(Dollars in thousands)	Classification on the consolidated balance sheets	September 30, 2021			December 31, 2020
Assets:
Operating lease assets	Lease right of use assets	$	19,963		$	21,077

Liabilities:
Operating lease liabilities	Lease liabilities	$	21,700		$	22,950

Weighted-average remaining lease term:
Operating leases		8.0 years			8.8 years

Weighted-average discount rate:
Operating leases ₍₁₎			1.5	%		2.6	%

(Dollars in thousands)
2021 ₍₁₎	$	853
2022		2,766
2023		2,797
2024		2,759
2025		2,791
Thereafter		11,049
Total future minimum lease payments	$	23,015
Less: amount representing interest		1,315
Present value of minimum lease payments	$	21,700

Period (1)	Total Number of Shares Purchased			Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan or Program		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1-31, 2021		6,720	(2)	$	28.59		0		0
March 1-31, 2021		3,095	(2)	$	29.40		0		0
June 1-30, 2021		7,100	(2)	$	27.64		0		0
Total		16,915		$	28.34		0		0


22.1		List of Co-Issuer Subsidiaries (incorporated by reference to Exhibit 22.1 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (File No. 001-34809)).

31.1+		Certification of Principal Executive Officer pursuant to Rule 13a-14 (a) / 15d-14 (a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2+		Certification of Chief Financial Officer pursuant to Rule 13a-14 (a) / 15d-14 (a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1+		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2+		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

	GLOBAL INDEMNITY GROUP, LLC
	Registrant


Dated: ~~November 9, 2021~~May 10, 2022	By:	/s/ Thomas M. McGeehan
		Thomas M. McGeehan
		Chief Financial Officer
		(Authorized Signatory and Principal Financial and Accounting Officer)