Greenlight Capital Re (GLRE) 6 Mar 242023 Q4 Earnings call transcript

Hello, and welcome to the Greenlight Capital Re Limited's 2023 Fourth Quarter and Full Year Financial Results Conference Call and Webcast. [Operator Instructions] At this time, I'd like to turn the call over to David Sigmon, Greenlight Re's General Counsel.

You may begin.

Thank you, Kevin, and good morning. I would like to remind you that this conference call is being recorded and will be available for replay following conclusion of the event. also website under at will of Investors replay company's the www.greenlightre.com. audio be the available section An

Joining us Board, on Executive Chief Financial Executive the Faramarz Officer call today Greg Officer, Ireland, Chairman will of Richardson; Greenlight of Pat and the Romer; David Re Chief Officer, Einhorn; Chief be O'Brien. our

harbor be federal be the call and this and laws. company, of remind and covered behalf risks statements company's during the like to reflect uncertainties. the future subject you are current and intended made to provisions that These forward-looking On expectations, to I'd results forward-looking securities predictions by safe statements of may the are about estimates

As may expressed materially a implied. those actual from differ results result, or

that reports investors review SEC may impact For are on that from more company information future the time should factors the with periodic by other risks the filed time. the to performance, and

financial can XXXX. filings update reconciliations SEC, XX-K any management undertakes certain revise The recently filed XX, year to may for company's to obligation no the company measures. or forward-looking in Form the measures non-GAAP ended these with the statements. found company's December to refer The including Additionally, publicly the be

the now call that, to With Greg. it my pleasure over is turn to

the January everyone, effective David. in time. to X earnings This engage is of meeting call look you for year. Thanks, my opportunity morning, forward and Re and joining I this Good delighted first of with CEO since you thank us have to Greenlight to today. our appointment investors, I'm as

of my have been busy. impressions. My like I'd share weeks first some to X initial

shape and in is exciting with Re good prospects. Greenlight First,

in in talk home and are those London. strong, about full I'm Cayman, our able I've Our XXXX been office and time offices later. visit more to at results we Dublin based and will our Grand financial

to to I've of company chance know everyone the get to in So and had most meet the them.

January colleagues and a perception a role senior with positive February, Together in and brokers team of with is clients we and There's in its engaged that Re motivated. Greenlight Bermuda. Re marketplace. very key met reinsurance Greenlight high-quality has senior and London the in and

highly Our exposures. short-tail underwriting diversified focus portfolio on with a is

catastrophe Over been lines. cat and by the industry peers the large served material challenges casualty both years has This avoiding during property recent we have well longer-tail encountered us in some underweight several and XXXX. in losses have of years, deterioration casualty reserves our over with

Innovations is Finally, our of team. our I've key getting Innovations a spent time to overall part know Re Greenlight strategy.

early-stage insurtech We have built space. strong position in a

along differentiating with Our a team this dedicated space. is of capital model and capacity, truly experts, of us in

reported well XX.X% Turning a fifth consecutive QX XX.X% to for XX.X% since year, ratio combined our book for performance in share. growth quarter and XXXX, profitability. of results. particular. We delivered value Greenlight a Re per the strong quarter, We a full combined and our XXXX underwriting the performed best reported our in of ratio in we

over I'd to call Now turn to the Einhorn. David like

the quarter. Thanks, fund morning, and everyone. X.X% Solasglas Greg, fourth The returned in good

X.X%. added Our macro short and added long our detracted X.X%, X%, portfolio portfolio our

that the long positive our paid short were Index fourth macro and a that the in been as Green control contributors largest position Three XX.X% a October, positions quarter, Holdings. emerged XXX in were position S&P triggering has new prices stock in higher largest off in the position The Brick consensus During Partners, detractors. rates the our to interest lower Kyndryl without tied and returned long quarter recession. under inflation the brought

year in as poised margin again than home faster the The peers. orders strong the XX% appears highest in of advanced Green new recouping update, industry the well decline. quarter third quarter, Brick XXXX. another its strong quarterly company Partners during The growth released its gross as most company in for another showcasing

than mid-October, for derivatives dual rates was rates, lower This Kyndryl the a a material improved Gold advanced into the over expired the announced per the benefited during XXXX year-end. margins which largest $X.XX stocks the second quarter. both move and in Holdings share, XX% from rally and position, S&P advancing contributor. before company a start a The Our estimates smaller level position higher XXX binary interest XX-year just also positive the of Loss lower expectations. from quarter. strong expected and XX.X% was which for down the $X.XX, loss at year contributor, for ended year. at was

In bubble-like X any short the either stocks and for and went in return concentrated our the believe during saw tech and December, material fundamental the companies were companies. November we don't of is these portfolio speculative insurance to the X parabolic. unprofitable conditions period. in innovation there improvement basket Losses We positions, including most

a chemicals We Belgian positions and positions drugs. provider; a off benefits from small Syensqo, ALIT, in established X the Solvay. new during long Viatris, These of included quarter. company initiated software-based a medium-sized generic a and position branded in off-patent spun We manufacturer

We undisclosed are a large building position an company. in new materials

and We've while hand, On late. employment maintained wages net inflation recent exposure is strong, neutral peak. well remain one of off its

near wall entered other disregarding refinance, with which commercial of arranged the debt market we when the and corporations election heightened estates down real and with X. rates nearing year a were maturities On geopolitical were hand, risks, growing to

to compared It February. end return in year-to-date the exposure fund XXX. the fourth at and portfolio XXXX to X.X%. return in end S&P of X.X% at of was the XX% in negative Solasglas returned returned a the for XXXX the investment February, in Net X.X% XX% X.X% the January approximately bringing XX.X% The quarter and

is Chief team our Executive Greg It as the welcome to pleasure Officer. a to

just for he accomplished partnering to years during brings And he had from meeting. first and team you came back forward for Greg many our in from short significant that come. look transition. Greg has is Board energized You with prepare few what the in and Cayman meeting I has experience X enthusiasm the to Greg a just tell months. and to weeks. his also didn't team heard what the I that

the to Now like Faramarz results. to I'd discuss over financial to the turn call

for Thank underwriting and you, book was in the growth the David, Re, morning, income per best we delivered the best history year Greenlight years as everyone. share of our posted in value in decade. full and good XXXX largest a one

year the we Greg quarter underwriting fifth rounded consecutive As profits. with the of mentioned,

Our $X.XX net comparable income compared for in the fourth share the per quarter was diluted of or XXXX $X.XX or million share period. $XX.X diluted million $XX.X to per

$X.X quarter or XXXX, increase compared full quarter a period. income compensation percentage an per $X.XX ratio and workers' of of net reserves the a combined casualty and XX.X% of ratio ratio combined I the discuss $XX.X diluted underwriting year to related diluted to share We equivalent For fourth XX.X% income million combined million during to million per or reported XXXX contracts we that points $XX.X of on $XX.X in compared share in XXXX. X.X million earned of XXXX $X.XX and the later. included during The fourth will

XXXX a to ratio lower year, compared the ratio partially casualty event for on of and to for For points to XX.X% period XX.X% combined the or our record or loss loss in $XX book. to the our X Adjusting was percentage million combined during year during losses, XXXX current pricing underwriting XXXX, improved comparable by catastrophe improvement XXX.X% in-force compared a was improved to $XX related XXXX. partially ratio. million XX.X% ratio, combined in related losses X.X% income The

XX.X% by business. decrease transactional written adjustments our X.X% cedents reporting to based or the our quarter compared The due in from received increase net During liability to $XXX.X compared quarter premiums an million, the premium quarter, million $XXX timing related, million and million fourth decreased primarily same on on or in $XX.X same to XXXX. Net $XX.X FAL the is earned was updated premiums XXXX. of to

year, to with $XXX net across spread Casualty XX.X% increased premiums For written million, Specialty the and our the growth books. Property, full

or mainly by generated the Within XX.X%, business $X.X XX% new premiums we On small a the quarter, contract basis, our premiums a a in of on Specialty net written new and from a book, property homeowners grew contracts decrease year written our from in Innovations commercial property net portfolio. during participation mainly XXXX. driven smaller fourth full renewed saw by million

to partially in The The composite business the motor to for releases a premiums on due quarter period was for during at better in ratio was reserve partially earned compared XXX.X% fourth increase an by the comparable and XXXX. improvement driven contract Property XX.X% the margins.

year $XX of to by Casualty of move Net and decreased and primarily by by full million basis, the business. away general proportional during Moving net adjustments quarter. where partially X.X%, driven we liability, are a finding XX.X% and a attractive premiums increase the pockets the due the continue written excessive compensation during class, account relating premiums workers' extent, to year business. fourth quarter, or premium XXXX renewed booked written our book. business the On professional to offset was liability FAL increased loss new liability, This to from motor lesser to

improved for ratio compared the the to fourth quarter in composite to during XXXX. The XXX% business Casualty XXX.X% marginally

During contracts quarter, XXXX compensation casualty relating on XXXX. reserves to years, and certain we our the ranging between and workers' contracts on bolstered XXXX treaty and XXXX

was premiums book. and Marine on the classes. Turning quarter, class and liability from mainly partially the XX.X% adjustments now million transactional decrease Net written Accident within increased This to in business. by Financial our $X.X or during Health resulting Specialty fourth by offset a premium the

cyber we took primarily hard premiums marine, growing XX.X%, the year For aviation as and net our conditions, books. full the energy, XXXX, written increased advantage market of

for transactional losses by XXXX. the comparable The in partially composite business. XXXX to in to on business offset period liability the increase Specialty XX% relates fourth The on the a quarter ratio during XX.X% contract, energy increased releases the reserve compared to

interest the expense ratio the increased quarter Our in expense. deposit same for this included deposit accounted motor of retroceded expense quarter quarter. for underwriting points X.X% XXXX. arose The a contract, percentage from ratio X.X% period deposit from X.X favorable the during development fourth in expense experienced which to interest The

expense interest marginally related expense, personnel deposit the Excluding to the expenses. ratio underwriting increased

Approximately million $X.X increased expenses XXXX. to fourth transition primarily same compared headcount to quarter the quarter costs the increase in of the $XX.X million administrative related and million to higher was general increase nonrecurring the XXXX. million fourth in of due $X.X remaining to period to of compared during the by and management's $X.X the Total

and compared $XX.X of equivalents quarter XXXX. at on of We We reported and to $XX.X total during cash net restricted in our our Lloyd's. million $X.X investment the income cash funds on of million XXXX interest income earned fourth million

the million unrealized a in investment the fourth gain quarter. a million gain investments Innovations reported $X or in Solasglas of Our our $X.X X.X%, of and reported net fund

dilution shares. share. fourth per The ordinary book certain the stock book the total $XX.XX, from restricted should basic XX, and denominator share value ultimate XX, December the per unearned believe to X.X% Please the calculate Form performance-based XXXX, calculation value years, denominator of the I value prior all our mention options In add an this XXXX. basic calculating better revised release our share. share. from to per end calculated book by shares of then the filed book fully revised XX.X% earnings We calculation when an have unvested exclude At the increase outstanding to and fully of uses units increase we in-the-money per denominator September diluted to quarter, the share our any reflects that press adjusting calculations. we the and for shareholders. book diluted values revised XX-K the fully restricted yesterday for We and per to for diluted was value our refer basic

the highest increased reaching equity $XX $XXX level XX, December by XXXX, shareholders' at million Our XXXX. million, since to

year the ended value book company continue well-positioned both and very and financial to performance and a we growing the are delivering the into conclusion, perspective, a our our metrics XXXX financial for going from with capital strong In shareholders. on

X season. January Pat will the renewal now discuss

morning, The our Thank over Re, Good January for of business everyone. renewal incepts January you, key X. is Faramarz. XX% on Greenlight season X as

very took We how grow in will we an January XXXX, of to conditions 'XX advantage areas. key book remain overview X, in Market are those very conditions key provide X I segments. pleased our of progressed. our business with and attractive January

on incepts Funds our book January at Lloyd's Generally, X.

But Lloyd's attractive optimistic this for an few increase a been are our rate capital prospects the Lloyd's have volume supporting and syndicates continue found of in ongoing and where the a material market. we of in increases we player year, market. years interested the the of material leveraged see XXXX, for Lloyd's years, after the several in relationships Lloyd's at opportunities. We market in in we deep we Funds to This

space. This on We but wanted renewed accounts. result, our maintained of Specialty element general, this many competitors in book material with target In pricing as A worked our of also discipline the well. early anticipated on offered specialty and to grow competitive rates it low strategy very in January a up single X. lines this was as signings, we market digits, trend,

X our significantly at Specialty January signings a combination some book of grew and account We through wins. new increased

our over over January of and some of strong weakening in modest this We with we book. seating which combination enabled our the space X, The XXXX is in commissions capacity very third some Despite more meaningfully saw January with softening market, element book attractive. X focus commissions market entering property and the clients this, profit And portfolio new improved grew this a remains signings. through XXXX. the

improves increased season. XXX convective that a is overall caused Atlantic surplus, account X the nonrenewal homeowners large volume. reflecting North by on now pain We X basis of Our this balance XX% to one portfolio. million, the storm had hurricane heavy XXXX, our some this XXX us $XX.X the marginally. of account exposure in the increased with in The renewed Relative in occurrence decreased to exposure

In total, margin of up premium overall and to we despite volume portfolio potential. balanced the our year-on-year our homeowners better the estimate overall account, slightly with is increased be now nonrenewal

enthusiastic are for about XXXX. the of We our positioning portfolio

we indications on opportunity. focused market. to to a likely of full taking advantage we that the We of the start. the strong close are are market off are hard peak current And is XXXX seeing

the Now questions. open up will to I'll for turn who call operator, the back it

Management. DeYoung Our question Instructions] [Operator coming first from from is Daniel Columbia

compared the any I'm business? capital there the can realized fourth quarter. expect what to but have in if past Innovations not note I ask in investing, in million And I If from be would a there? source from have regarding of venture change gains I unrealized business. as then $X was gain few the which the And Do Columbia risky? you questions can the it the and been that perceive I strategy Innovations any quite Management,

CFO, for tell you with financial experience my on years. to I've over still of it getting Greg. given of question. questions. in around I'm first Faramarz, impresses Innovations some I'll for is Thanks I'd your part, me, the the that and start our This pass I'll business. the then arms my what especially space sort seen

like of insurtech flavor also it I always is it. First has strategy an for of all, -- sort to veterans. coupled is But it we about our look what experienced

experience, the insurtech the space, of I a with really combination. blend So is combination believe, in technology that winning

niche opportunities might, I'd carry our in get oriented. or thing other with The a bigger stage. It's Re in early we like say, these is something these we than investments it's Greenlight, Re. and pretty very were competing We where Hannover with head-to-head, if we smaller stick Munich size,

I not doing. a in that We of They think experts a really team aspect We've focus put in I they're dabbling it. We're it. it. So resources. of of in dedicated just know what it, lot invest we like

good entrenched we a aspect record I pretty track avoiding space. really think strong other Faramarz have incumbents there's And The that being niche. frankly, where it. scale. significant this segments about talk And have can do economies of We're in

point, to envision at change it. don't this I any So

we've think play it. sizable in a I got

sure I as the look well think we've areas that got to we're what have, but we portfolio grow I've seen, pleased to from for make that I'm expand, with or it. Faramarz? managing we

Yes.

investments X me to $X for jump let part, to the the million relates Daniel. In quarter, in about on second gains So the your unrealized regards in total.

way the the of observable is gives mentioned As based securities an round we apply our mark on price have around, the previously, same investee. investments us financing they we've holding. and closed once a price to up we're the that new we by new a And indication that's of Innovations that

an gains, for notice if realized delay valuation. quarterly And actually of of look right we that a to we there terms triggers gains impairment on some will basis. see in the any impairment, increase indication that In away. up, we evidence we'll it an write any or that until is And a allowance unrealized take versus valuation we

would To investments. realized longer-term when stage we haven't investments but These i.e., from our haven't initial portfolio. of some some invest date, any losses duration and I We we on our gains, fully positions actually gains that until moving we've in any are an of Generally, recognize we that investments. a our in are until in to hope we that they're them. number wait direction. investments, they're start-up sold any of matured older But there seed realized able in portfolio are answers question. your are the

any Greenlight This at you. no are to Should Thank The and Equity will She concludes questions, time. this Instructions] now be follow-up you questions please Quarter Earnings Conference them additional you. direct you. Re's Call. Year-end XXXX assist Thank Group [Operator happy have to Daly There ir@greenlightre.ky. Karin at Fourth of

now You disconnect. may