Net earned premiums within the Farm, Ranch, & Stable segment increased by 4.6% for the year ended December 31, 2018 as compared to the same period in 2017 primarily due to a growth in gross written premiums. Property net earned premiums were $49.6 million and $45.8 million for the years ended December 31, 2018 and 2017, respectively. Casualty net earned premiums were $19.6 million and $20.4 million for the years ended December 31, 2018 and 2017, respectively.
Includes business written by American Reliable that is ceded to insurance companies owned by Assurant under a 100% quota share reinsurance agreement of ($0.3) million, ($2.1) million, and ($1.3) million during the years ended December 31, 2019, 2018, and 2017, respectively.
The current accident year property non-catastrophe loss ratio for 2019 improved by 5.7 points compared to 2018. The decrease in the loss ratio reflects a lower claims frequency through twelve months compared to last year. The current accident year property non-catastrophe loss ratio for 2018 increased by 3.9 point compared to 2017 mainly due to a higher claims severity compared to last year.
The components of income from the Company’s Farm, Ranch, & Stable segment and corresponding underwriting ratios are as follows:
As of December 31, 2018, Global Indemnity Group, LLC owed $402.3 million on non-interest bearing notes to Global Indemnity Group Limited. In 2019, these notes were repaid through a series of transactions when the intercompany financing arrangements were restructured.
Impairment of intangible assets with an indefinite useful life is tested at least annually and more frequently as circumstances warrant in accordance with applicable accounting guidance. Accounting guidance allows for the testing of indefinite lived intangible assets for impairment using both qualitative and quantitative factors. Impairment of indefinite lived intangible assets is recognized only if the carrying amount of the intangible assets exceeds the fair value of said assets. The amount of the impairment loss would be equal to the excess carrying value of the assets over the fair value of said assets. Based on the qualitative assessment performed, there were no impairments of indefinite lived intangible assets as of December 31, 2019.
The amortized cost and estimated fair value of the Company’s fixed maturities portfolio classified as available for sale at December 31, 2019, 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.
The Company recorded the following other than temporary impairments (“OTTI”) on its investment portfolio for the years ended December 31, 2019, 2018, and 2017:
The following table is an analysis of the credit losses recognized in earnings on fixed maturities held by the Company as of December 31, 2019, 2018, and 2017 for which a portion of the OTTI loss was recognized in other comprehensive income.
The following tables present the changes in accumulated other comprehensive income, net of tax, by component for the years ended December 31, 2019 and 2018:
The Company has a net operating loss (“NOL”) carryforward of $21.9 million as of December 31, 2019, which begins to expire in 2036 based on when the original NOL was generated. The Company’s NOL carryforward as of December 31, 2018 was $29.5 million.
On April 25, 2018, Global Indemnity Group, LLC, an indirect wholly owned subsidiary of the Company, became a subordinated co-obligor with respect to the 2045 Notes and the 2047 Notes with the same obligations and duties as the Company under the Indenture (including the due and punctual performance and observance of all of the covenants and conditions to be performed by the Company, including, without limitation, the obligation to pay the principal of, and interest on, the Notes of either series when due whether at maturity, by acceleration, redemption or otherwise), and with the same rights, benefits and privileges of the Company thereunder. Notwithstanding the foregoing, Global Indemnity Group, LLC's obligations (including the obligation to pay the principal of and interest in respect of the Notes of any series) are subject to subordination to all monetary obligations or liabilities of Global Indemnity Group, LLC owing to Global Indemnity Reinsurance, Ltd., a wholly owned subsidiary of the Company, and/or any other regulated reinsurance or insurance company that is a direct or indirect subsidiary of the Company, in addition to indebtedness of Global Indemnity Group, LLC for borrowed money. If the Company pays any amount with respect to the subordinated note obligations, the Company is entitled to be reimbursed by Global Indemnity Group, LLC within 10 business days after a demand is made to Global Indemnity Group, LLC by the Company. In consideration for becoming a subordinated co-obligor on the subordinated notes, Global Indemnity Group, LLC received a promissory note from the Company with a principal amount of $230 million due April 15, 2047 that has since been assigned to an affiliate. This promissory note is eliminated in consolidation.
On April 25, 2018, the Company and its indirect wholly owned subsidiaries (including Global Indemnity Group, LLC and Global Indemnity Reinsurance) entered into a series of recapitalization and reorganization transactions (collectively, the “Reorganization”) designed to improve the Company’s annual results and long-term financial performance. Pursuant to the Reorganization, the Company’s affiliated group implemented the following, among other things: (i) Global Indemnity Group, LLC became a subordinated co-obligor with the Company under the Company’s 7.75% Subordinated Notes due in 2045 and its 7.875% Subordinated Notes due in 2047, (ii) Global Indemnity Group, LLC agreed to provide capital to Global Indemnity Reinsurance from time to time to satisfy Global Indemnity Reinsurance’s obligations incurred in connection with its insurance and reinsurance business and (iii) Global Indemnity Group, LLC received a promissory note from the Company, which was subsequently assigned within the Company’s affiliated group in connection with the settlement of certain intra-group indebtedness.
In 2014, 300,000 options were granted. On March 6, 2018, the existing vesting provisions of these options were eliminated and replaced with new vesting provisions related to return on equity targets for 2018, 2019, and 2020 (“Bonus Years”). 100,000 options were related to the 2018 Bonus Year. Return on equity targets for the 2018 bonus year were not met and therefore, these 100,000 options have been forfeited. 200,000 options remain outstanding. 100,000 options, which were related to return on equity targets for the 2019 bonus year, vested on December 31, 2019. These options are subject to remeasurement of 2019 bonus year results after the third full calendar year following the bonus year. 100,000 options are related to return on equity targets for the 2020 bonus year. These options are subject to remeasurement of 2020 bonus year results after the third full calendar year following the bonus year.
Compensation expense related to options outstanding under the Plan is anticipated to be $1.3 million during the year ended December 31, 2020.
The following table summarizes the non-vested restricted stock units activity for the years ended December 31, 2019, 2018, and 2017:
16.5%, 16.5%, and 17.0% of the restricted stock will vest on January 1, 2020, January 1, 2021, and January 1, 2022, respectively.
During the 1st quarter of 2019, the Company re-evaluated its Personal Lines segment and determined that Personal Lines should be bifurcated into two reportable segments: Specialty Property and Farm, Ranch, & Stable. In addition, the Company has changed the name of its Commercial Lines segment to Commercial Specialty to better align with its key product offerings. The segment results for the years ended December 31, 2018 and 2017 have been revised to reflect these changes. Please see Note 1 for additional information related to these segment changes.
In April, 2019, the FASB issued new accounting guidance that affected a wide variety of topics in the Codification. The amendments in this update represent changes to clarify certain aspects in the Codification as it relates to Topic 326, Financial Instruments, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The amendments in this update are meant to make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarification. Some of the amendments in this guidance are effective immediately with the remainder effective for fiscal years beginning after December 31, 2019, including interim periods within those fiscal years. The adoption of this new accounting guidance did not have a material impact to the Company’s financial condition, results of operation, or cash flows.
On February 9, 2020, the Company’s Board of Directors approved a dividend payment of $0.25 per ordinary share to be paid on March 31, 2020 to all shareholders of record as of the close of business on March 24, 2020.