Global Indemnity to shed 25 percent of U.S. workforce

When I last wrote about Global Indemnity P.L.C., it was one of several companies incorporating in the more tax-friendly climate of Ireland.

In May, shareholders overwhelmingly approved the move at a special meeting in Bermuda, and Global Indemnity “re-domesticated” in Ireland from the Cayman Islands.

But most of the property and casualty insurer’s 390 employees continued to work out of Bala Cynwyd, where it leases about 71,150 square feet of office space.

According to its 2009 annual report, when it was known as United America Indemnity Ltd., the company had just two people working in its Bermuda office and 67 in field offices in Arizona, California, Georgia, Illinois, New York, North Carolina, and Texas.

However, cuts are now coming to the U.S. workforce, according to its third-quarter financial results released Tuesday.

Global Indemnity said it planned to reduce its “U.S.-based census” about 25 percent by the end of 2010, close underperforming offices, and add to staffing in Bermuda and Ireland.

Based on the 388 U.S. employees it had as of Dec. 31, that would mean the loss of 97 jobs. It was not clear how many of those cuts would be made in Montgomery County.

Property and casualty insurance is a cyclical business, and the recession and its aftermath have teamed up to make this an extended down cycle. That is what led Global Indemnity to implement what it is calling a “profitability enhancement initiative.”

In a filing with the Securities and Exchange Commission, the company said it would “streamline” its operations because of the continuing effect of the U.S. recession. It also cited the “competitive landscape” within its end of the P&C business: the excess and surplus lines market that provides coverage to businesses that don’t fit normal underwriting criteria.

Global Indemnity estimates the annual savings from its restructuring at between $9 million and $11 million on a pretax basis. Employee termination and severance costs are expected to be up to $2.1 million.

For its third quarter, Global Indemnity reported net income of $19.76 million, or 65 cents a share, down from $27.35 million, or 91 cents a share, for the same quarter of 2009.

Net premiums for its U.S. operations were $53.19 million for the quarter ended Sept. 30, down slightly from $54.51 million a year earlier. In contrast, net premiums written by its Wind River reinsurance business increased to $20.02 million for the third quarter, up from $8.42 million a year earlier.

Raising capital

UniTek Global Services Inc., Blue Bell, found a way to go public in January when it merged with the smaller Berliner Communications Inc.

On Thursday, UniTek tapped the public markets with a secondary offering of 19 million shares at $4.75 a share.

Of the $82.6 million in net proceeds it raised, UniTek intended to repay about $62 million of its outstanding debt. The rest would be used for working capital.

While UniTek’s name may not ring a bell, the primary customers for its “outsourced infrastructure services” will. Satellite-television service provider DirecTV Group Inc. accounted for 64 percent of its $278.1 million in 2009 revenue. Comcast Corp. was responsible for 13 percent, and Verizon Communications Inc. was responsible for 8 percent.

UniTek’s headquarters are in 21,233 square feet of office space in Montgomery County, but most of the 5,200 people who work for the engineering and construction-management firm are based out of 102 field offices around the country.

The size and price of the offering changed a few times since September, when UniTek first sought to sell 6.25 million shares.