Greenlight Re Announces Second Quarter 2024 Financial Results

GRAND CAYMAN, Cayman Islands, Aug. 06, 2024 (GLOBE NEWSWIRE) -- Greenlight Capital Re, Ltd. (NASDAQ: GLRE) (“Greenlight Re” or the “Company”) today reported its financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Highlights (all comparisons are to second quarter 2023 unless noted otherwise):

• Gross premiums written increased 9.1% to $169.0 million;
• Net premiums earned increased 13.2% to $158.4 million;
• Underwriting income of $0.3 million, compared to $5.4 million;
• Total investment income of $12.6 million, compared to $42.2 million;
• Net income of $8.0 million, or $0.23 per diluted ordinary share, compared to $49.9 million, or $1.32 per diluted ordinary share;
• Combined ratio of 99.8%, compared to 96.2%; and
• Fully diluted book value per share increased $0.26, or 1.5%, to $17.65, from $17.39 at March 31, 2024.
  

Greg Richardson, Chief Executive Officer of Greenlight Re, stated, “This quarter Greenlight Re continued its measured growth by taking advantage of attractive opportunities. While our underwriting results were negatively impacted by U.S. severe convective storm losses from a single run-off contract, we are pleased with the performance of our overall book of business.”

David Einhorn, Chairman of the Board of Directors, said, “Solasglas had a positive result in a relatively uneventful quarter, with small gains in short and macro positions offset by a small loss in our long positions.”

Second Quarter 2024 Results

Gross premiums written in the second quarter of 2024 were $169.0 million, compared to $154.9 million in the second quarter of 2023. The $14 million increase, or 9.1%, was primarily due to growth in financial, general liability and specialty lines. Earned premiums increased by $18.5 million, or 13.2%, to $158.4 million as the growth in premiums written during 2023 and 2024 continued to earn out.

The Company recognized net underwriting income of $0.3 million in the second quarter of 2024, compared to net underwriting income of $5.4 million during the equivalent period in 2023. The combined ratio for the second quarter of 2024 was 99.8%, compared to 96.2% for the equivalent period in 2023. The current-period catastrophe losses, primarily related to the U.S. severe convective storms, added 8.4% to the combined ratio during the second quarter of 2024.

The Company’s total investment income during the second quarter of 2024 was $12.6 million. The Company’s investment in the Solasglas fund, managed by DME Advisors, returned 1.2%, representing net income of $4.3 million. The Company reported $8.2 million of other investment income, primarily from interest earned on its restricted cash and cash equivalents.

The net income of $8.0 million contributed to the 1.5% increase in fully diluted book value per share for the quarter, which increased to $17.65 per share at June 30, 2024 from $17.39 at March 31, 2024.

The following table summarizes the components of the Company’s combined ratio.

Greenlight Capital Re, Ltd. Second Quarter 2024 Earnings Call

Greenlight Re will host a live conference call to discuss its financial results on Wednesday, August 7, 2024, at 9:00 a.m. Eastern Time. Dial-in details:

The conference call can also be accessed via webcast at:

https://event.webcasts.com/starthere.jsp?ei=1681118&tp_key=126229da94

A telephone replay will be available following the call through August 12, 2024.  The replay of the call may be accessed by dialing 1-877-660-6853 (U.S. toll free) or 1-201-612-7415 (international), access code 13748042. An audio file of the call will also be available on the Company’s website, www.greenlightre.com.

2024 Investor Day

The Company is set to host its 2024 Investor Day in New York City on Tuesday, November 19, 2024, at 12:00 noon Eastern Time. The event will include a luncheon, detailed presentation from members of the executive management team, and opportunities for live interaction during the Q&A segment.

Attendees must register in advance. To register, please contact Karin Daly, Greenlight Capital Re’s investor relations representative at IR@greenlightre.ky.

The 2024 Investor Day will be held exclusively in-person. An archived webcast will become available on the Company’s website following the event.

Non-GAAP Financial Measures
In presenting the Company’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures, including fully diluted book value per share and net underwriting income (loss), are referred to as non-GAAP measures. These non-GAAP measures may be defined or calculated differently by other companies. Management believes these measures allow for a more thorough understanding of the underlying business. These non-GAAP measures may not be comparable to similarly titled measures reported by other companies and should be used to monitor our results and should be considered in addition to, and not viewed as a substitute for those measures determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included in the attached financial information in accordance with Regulation G.

Forward-Looking Statements
This news release contains forward-looking statements concerning Greenlight Capital Re, Ltd. and/or its subsidiaries (the “Company”) within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on the Company’s behalf. These risks and uncertainties include a downgrade or withdrawal of our A.M. Best ratings; any suspension or revocation of any of our licenses; losses from catastrophes; the loss of significant brokers; the performance of Solasglas Investments, LP; the carry values of our investments made under our Greenlight Re Innovations pillar may differ significantly from those that would be used if we carried these investments at fair value; and other factors described in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 5, 2024, as those factors may be updated from time to time in our periodic and other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. The Company undertakes no obligation to publicly update or revise any forward-looking statements, which speak only as to the date of this release, whether as a result of new information, future events, or otherwise, except as provided by law.

About Greenlight Capital Re, Ltd.
Greenlight Re (www.greenlightre.com) provides multiline property and casualty insurance and reinsurance through its licensed and regulated reinsurance entities in the Cayman Islands and Ireland, and its Lloyd’s platform, Greenlight Innovation Syndicate 3456. The Company complements its underwriting activities with a non-traditional investment approach designed to achieve higher rates of return over the long term than reinsurance companies that exclusively employ more traditional investment strategies. The Company’s innovations unit, Greenlight Re Innovations, supports technology innovators in the (re)insurance space by providing investment capital, risk capacity, and access to a broad insurance network.

Investor Relations Contact
Karin Daly
Vice President, The Equity Group Inc.
(212) 836-9623
IR@greenlightre.ky

The following tables present the Company’s net premiums earned and underwriting ratios by line of business: 

GREENLIGHT CAPITAL RE, LTD.
KEY FINANCIAL MEASURES AND NON-GAAP MEASURES

Management uses certain key financial measures, some of which are not prescribed under U.S. GAAP rules and standards (“non-GAAP financial measures”), to evaluate our financial performance, financial position, and the change in shareholder value. Generally, a non-GAAP financial measure, as defined in SEC Regulation G, is a numerical measure of a company’s historical or future financial performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented under U.S. GAAP. We believe that these measures, which may be calculated or defined differently by other companies, provide consistent and comparable metrics of our business performance to help shareholders understand performance trends and facilitate a more thorough understanding of the Company’s business. Non-GAAP financial measures should not be viewed as substitutes for those determined under U.S. GAAP.

The key non-GAAP financial measures used in this news release are:

• Fully diluted book value per share; and
• Net underwriting income (loss).

These non-GAAP financial measures are described below.

Fully Diluted Book Value Per Share

Our primary financial goal is to increase fully diluted book value per share over the long term. We use fully diluted book value as a financial measure in our incentive compensation plan.

We believe that long-term growth in fully diluted book value per share is the most relevant measure of our financial performance because it provides management and investors a yardstick to monitor the shareholder value generated. Fully diluted book value per share may also help our investors, shareholders, and other interested parties form a basis of comparison with other companies within the property and casualty reinsurance industry. Fully diluted book value per share should not be viewed as a substitute for the most comparable U.S. GAAP measure, which in our view is the basic book value per share.

We calculate basic book value per share as (a) ending shareholders' equity, divided by (b) the total ordinary shares issued and outstanding, as reported in the consolidated financial statements. Fully diluted book value per share represents basic book value per share combined with any dilutive impact of in-the-money stock options (assuming net exercise) and all outstanding restricted stock units “RSUs”. We believe these adjustments better reflect the ultimate dilution to our shareholders.

The following table presents a reconciliation of the fully diluted book value per share to basic book value per share (the most directly comparable U.S. GAAP financial measure):

⁽¹⁾ Assuming net exercise by the grantee.

Net Underwriting Income (Loss)

One way that we evaluate the Company’s underwriting performance is by measuring net underwriting income (loss). We do not use premiums written as a measure of performance. Net underwriting income (loss) is a performance measure used by management to evaluate the fundamentals underlying the Company’s underwriting operations. We believe that the use of net underwriting income (loss) enables investors and other users of the Company’s financial information to analyze our performance in a manner similar to how management analyzes performance. Management also believes this measure follows industry practice and allows the users of financial information to compare the Company’s performance with that of our industry peer group.

Net underwriting income (loss) is considered a non-GAAP financial measure because it excludes items used to calculate net income before taxes under U.S. GAAP. We calculate net underwriting income (loss) as net premiums earned less net loss and loss adjustment expenses, acquisition costs, underwriting expenses (including related G&A expenses), and deposit interest expense, plus deposit interest income. The measure excludes, on a recurring basis: (1) investment income (loss); (2) other income (expense) not related to underwriting, including foreign exchange gains or losses, and Lloyd’s interest income and expense; (3) corporate G&A expenses; and (4) interest expense. We exclude total investment income or loss, foreign exchange gains or losses, and Lloyd’s interest income or expense as we believe these items are influenced by market conditions and other factors unrelated to underwriting decisions. Additionally, we exclude corporate G&A and interest expenses because these costs are generally fixed and not incremental to or directly related to our underwriting operations. We believe all of these amounts are largely independent of our underwriting process, and including them could hinder the analysis of trends in our underwriting operations. Net underwriting income (loss) should not be viewed as a substitute for U.S. GAAP net income before income taxes.

The reconciliations of net underwriting income to income before income taxes (the most directly comparable U.S. GAAP financial measure) on a consolidated basis are shown below: