Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin, and I will be your conference operator today. At this time, I would like to welcome everyone to the Global Indemnity Group Q3 2025 Earnings Call. [Operator Instructions] I would now like to turn the call over to Nathaniel DeRose, Senior Vice President and Senior Counsel. Please go ahead.

Thank you, operator. Before we begin today, I would like to remind everyone that this conference call may contain forward-looking statements. Some of the forward-looking statements can be identified by the use of forward-looking words, including, without limitation, beliefs, expectations or estimates. We caution you that such forward-looking statements should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will, in fact, be achieved. Please refer to our annual report on Form 10-K and our other filings with the SEC for a description of the business environment in which we operate and the important factors that may materially affect our results. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or otherwise, except as required by law. It is now my pleasure to turn the call over to Mr. Jay Brown, Chief Executive Officer of Global Indemnity.

Thank you, Nathaniel. Good morning, and thank you for joining us for the Global Indemnity Third Quarter Results Conference Call. With me today in addition to Nathaniel are Evan Kasowitz, President of Belmont Holdings; Praveen Reddy, President and CEO of Katalyx Holdings; and Brian Riley, our Chief Financial Officer. Following our usual format, I will first share overview comments on my assessments of this quarter's results. I will also offer some thoughts on our current positioning as a company as I conclude my third year as CEO. Then our CFO, Brian Riley, will present the highlights of our financial and operational results. After Brian's remarks, we look forward to your questions. This quarter's results continue the underlying positive insurance operating and investment trends that we have seen over the last several quarters. Our accident year combined ratio of 90.4% -- I'm going to say it twice, 90.4%, generated an underwriting profit of $10.2 million, a very nice increase over the 93.5% we recorded last year. This was our best quarterly accident year combined ratio in the past several years, reflecting underlying strong property results for both catastrophic losses and non-cat losses. Our short duration investment portfolio delivered acceptable net investment income results at $17.9 million, a 9% increase from the prior year period. However, we did see a modest short-term mark-to-market loss this quarter as we have started to shift away from a portfolio consisting substantially of shorter-term fixed income investments. The overall extremely positive insurance and investment results were slightly offset by the planned higher corporate expenses as we continue to invest in our Agency and Insurance Services segment. Brian will provide some details on the areas where corporate expenses are increasing. But as we've noted earlier in the year, these investments are intended to help drive the long-term…

Thank you, Jay. Starting with one of our most important metrics. Book value per share increased from $48.35 at June 30 to $48.88 at September 30. Including dividends paid of $0.35 per share, return to shareholders was 1.8% for the third quarter of 2025. Net income was $12.5 million for the third quarter compared to $12.8 million for that same period last year. And as Jay mentioned, operating income, which excludes after-tax impact of unrealized losses on equity securities, was $15.7 million for the third quarter, an increase of 19% over the same period last year. Key drivers came from both underwriting income and investment income. Underwriting income improved 54% to $10.2 million in the third quarter of '25 compared to $6.6 million for the same period last year. Investment income improved by 9% to $17.9 million in the third quarter of 2025 compared to $16.5 million in the same period last year. This improvement was partially offset by an increase in corporate expenses to $7.8 million in the third quarter compared to $5.9 million for the same period last year, resulting from professional fees related to the build-out of personnel at Katalyx and transaction costs related to the acquisition of Sayata. As Jay mentioned, our corporate expenses will likely remain higher than previous years as we prospect new business opportunities at Katalyx and Belmont. Let me add a little color on underwriting income and investments, starting with underwriting income. Current accident year underwriting income improved by $3.6 million overall, driven by an improvement in the combined ratio of 3.1 points to 90.4%. This consisted of a 4-point improvement on the loss ratio to 50.1%, driven by both cat and non-cat performance. This is partially offset by an increase in the expense ratio of 1.7 points. Expenses remain elevated as…

[Operator Instructions]Your first question comes from the line of Ross Haberman of RLH Investments.

Nice quarter. Could you go back to the investment losses of $4 million you took in the quarter and sort of give us an explanation of why you decided to take -- realize the loss? And will there be similar type of losses in the next couple of quarters as you say, as you restructure and/or sell some of your bond portfolio?

Yes. Ross, to be clear, the loss was not realized in the form of a sale. It's a fair value decline on $25 million in equities that we invested in the third quarter. We view it as short term.

Okay. And I think you said you're going to restructure investment portfolio. Could you elaborate on that a little bit and the reason why?

Yes. I mean, so far this year, we've deployed $200 million of our short-term investments into corporates and mortgage-backed securities right now. We're at approximately 40% of the portfolio is short term, and we're evaluating how to invest over the next quarter and/or next 5 quarters, those short-term investments.

I'm sorry, just one clarification. What percentage of your investment portfolio is equities as opposed to bonds?

Equity is about 2%...

Your next question comes from the line of Tom Kerr of Zacks SCR.

You mentioned competition is increasing. Can you give us any more color on that, where it's happening and why it's happening now?

For our current product lines, which are basically focused on small commercial or very small personal collections, et cetera, in our Collectibles business or Vacant Express, we don't see the kind of competition you'd see in larger premium where it starts earlier. We're just beginning to see some of that pressure emerge as we're selling new products to new customers. It's a little bit -- I would say it's a little bit more competitive than last year. I think the important thing is at this point in time, for the business we're writing, we're still achieving the same kind of levels that our current book is priced at. So we're very optimistic about what we have on the books and what we're earning. But we do see that there's going to be pressure as we move into '26 and '27.

Okay. And speaking of 2026, do we still have a handle that it's going to be double-digit premium growth? Or any comment looking forward on that?

I am very optimistic it will be at least double digit. It's not going to be triple digit. I'm only kidding. We're sticking with our approach, which we expect our baseline of existing products will continue to grow at 10%. However, we will see an increase in overall growth rates as we start to add new products and new operations in Katalyx.

Got it. Last question. Did you give a discretionary capital number? Sorry if I missed that.

$273 million.

All right. That's up from [ $260 million ] to $273 million.

We will now move to our web questions. Your next question comes from Michael O'Brien. One great way to get your message out and show that you believe there is real value in your stock would be able to implement and execute on a buyback program. Any thoughts?

Sure. The -- I think we've been pretty consistent for the last 2 or 3 quarters that given the amount of money we're investing to restructure our organization, the reorganization we began at the beginning of the year, we think we're going to have a significant amount of growth going into '26 and '27. As such, the Board has made the decision, at least in the short term, meaning in the next 3, 4, 5 quarters that we're going to deploy our capital into those growth opportunities rather than buy back stock. It's obviously a question that's been asked every quarter, and we have not changed our position going forward.

There are no further questions at this time. And with that, I will turn the call back over to Nathaniel DeRose for closing remarks. Please go ahead.

With that, we thank you all for joining us. We look forward to speaking with you about our year-end results at that time. Thank you.

Ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect.