GRAND CAYMAN, Cayman Islands, March 05, 2024 (GLOBE NEWSWIRE) — Greenlight Capital Re, Ltd. (NASDAQ:GLRE) (“Greenlight Re” or the “Company”) today reported its financial results for the fourth quarter and year-ended December 31, 2023.
Fourth Quarter 2023 Highlights (all comparisons are to fourth quarter 2022 unless noted otherwise):
Gross premiums written decreased 11.8% to $112.3 million;
Net premiums earned increased 23.4% to $137.4 million;
Underwriting income of $11.8 million compared to $6.5 million;
Net income of $17.6 million, or $0.50 per diluted ordinary share, compared to $34.8 million, or $0.91 per diluted ordinary share;
Combined ratio of 91.4%, compared to 94.2%;
Total investment income of $13.6 million, compared to $32.5 million; and
Fully diluted book value per share increased $0.59, or 3.7%, to $16.74, from $16.15 at September 30, 2023.
Full Year 2023 Highlights (all comparisons are to full year 2022):
Gross premiums written increased 13.1% to $636.8 million;
Net premiums earned increased 24.2% to $583.1 million;
Underwriting income of $32.0 million compared to an underwriting loss of $10.7 million;
Net income of $86.8 million, or $2.50 per diluted ordinary share, compared to $25.3 million, or $0.73 per diluted ordinary share;
Combined ratio of 94.5%, compared to 102.3%;
Total investment income of $66.1 million, compared to $69.0 million; and
Fully diluted book value per share increased $2.41, or 16.8%, to $16.74, from $14.33 at December 31, 2022.
Greg Richardson, Chief Executive Officer of Greenlight Re, stated, “The Company ended the year with robust growth in fully diluted book value per share, driven by strong performance on both sides of the balance sheet.”
David Einhorn, Chairman of the Board of Directors, said, “2023 was a milestone year for the company with solid returns on both our underwriting and investing activities. We successfully executed several executive management transitions and believe we are well positioned going into 2024.”
Fourth Quarter 2023 Results
Gross premiums written in the fourth quarter of 2023 were $112.3 million, compared to $127.4 million in the fourth quarter of 2022. The $15.1 million decrease, or 11.8%, was timing-related primarily due to premium adjustments recorded in the fourth quarter based on revised premium estimates and updated reporting received from cedents. Earned premiums increased by $26.1 million, or 23.4%, to $137.4 million as the growth in premiums written throughout 2023 continued to earn out.
The Company recognized net underwriting income of $11.8 million in the fourth quarter of 2023. By comparison, the equivalent period in 2022 recognized net underwriting income of $6.5 million. The combined ratio for the fourth quarter of 2023 was 91.4%, compared to 94.2% for the equivalent period in 2022. The current-year loss ratio improved by 3.8%, driven by improved pricing on the in-force underwriting book.
The Company’s total investment income during the fourth quarter of 2023 was $13.6 million. The Company’s investment in the Solasglas fund, managed by DME Advisors, returned 0.3%, representing net income of $0.9 million. The Company reported $12.7 million of other investment income, primarily from interest earned on its restricted cash and cash equivalents.
The Company reported foreign exchange gains $3.9 million during the fourth quarter of 2023, due primarily to the pound sterling strengthening.
The net income of $17.6 million contributed to the 3.7% increase in fully diluted book value per share for the quarter, which increased to $16.74 per share at December 31, 2023.
Full Year 2023 Results
Gross premiums written were $636.8 million for the year ended December 31, 2023, an increase of $73.6 million, or 13.1%, compared to the comparable 2022 period. The increase was across all three categories as Property, Casualty, and Specialty premiums written increased 32.8%, 8.0%, and 12.9%, respectively.
Net premiums earned were $583.1 million for the year ended December 31, 2023, an increase of $113.7 million, or 24.2%, compared to the equivalent 2022 period.
The Company reported an underwriting income for the year ended December 31, 2023, of $32.0 million, which equates to a combined ratio of 94.5%. The equivalent 2022 period incurred an underwriting loss of $10.7 million, representing a combined ratio of 102.3%. The underwriting income for the year ended December 31, 2023, was driven primarily by lower catastrophe losses and favorable pricing in 2023, partially offset by strengthened reserves relating to prior years. By comparison, the underwriting loss for the year ended December 31, 2022, included losses related to the Russian-Ukrainian conflict and various natural catastrophe events.
Total investment income for the year ended December 31, 2023, was $66.1 million, compared to $69.0 million during the equivalent 2022 period. The Company’s investment in the Solasglas fund generated income of $28.7 million for the year ended December 31, 2023, compared to $54.8 million during the equivalent 2022 period.
The Company reported foreign exchange gains of $11.6 million during the year ended December 31, 2023, due primarily to the pound sterling strengthening.
The net income of $86.8 million contributed to the 16.8% increase in fully diluted book value per share for the year, which increased to $16.74 per share at December 31, 2023.
The following table summarizes the components of our combined ratio.
Fourth Quarter
Full Year
Underwriting ratios
2023
2022
2023
2022
Loss ratio – current year
54.7
%
58.5
%
59.8
%
67.4
%
Loss ratio – prior year
0.5
%
(1.3)
%
1.9
%
—
%
Loss ratio
55.2
%
57.2
%
61.7
%
67.4
%
Acquisition cost ratio
30.7
%
33.3
%
29.0
%
30.5
%
Composite ratio
85.9
%
90.5
%
90.7
%
97.9
%
Underwriting expense ratio
5.5
%
3.7
%
3.8
%
4.4
%
Combined ratio
91.4
%
94.2
%
94.5
%
102.3
%
Greenlight Capital Re, Ltd. Fourth Quarter and Year-End 2023 Earnings Call
Greenlight Re will host a live conference call to discuss its financial results on Wednesday, March 6, 2024, at 9:00 a.m. Eastern Time. Dial-in details:
U.S. toll free 1-877-407-9753
International 1-201-493-6739
The conference call can also be accessed via webcast at:
https://event.webcasts.com/starthere.jsp?ei=1654363&tp_key=08652ad3de
A telephone replay will be available following the call through March 11, 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 13744164. An audio file of the call will also be available on the Company’s website, www.greenlightre.com.
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 basic book value per share, 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
GREENLIGHT CAPITAL RE, LTD.
CONSOLIDATED BALANCE SHEETS
(expressed in thousands of U.S. dollars, except per share and share amounts)
December 31,
2023
December 31,
2022
Assets
Investments
Investment in related party investment fund, at fair value
$
258,890
$
178,197
Other investments
73,293
70,279
Total investments
332,183
248,476
Cash and cash equivalents
51,082
38,238
Restricted cash and cash equivalents
604,648
668,310
Reinsurance balances receivable (net of allowance for expected credit losses)
619,401
505,555
Loss and loss adjustment expenses recoverable (net of allowance for expected credit losses)
25,687
13,239
Deferred acquisition costs
79,956
82,391
Unearned premiums ceded
17,261
18,153
Other assets
5,089
6,019
Total assets
$
1,735,307
$
1,580,381
Liabilities and equity
Liabilities
Loss and loss adjustment expense reserves
$
661,554
$
555,468
Unearned premium reserves
306,310
307,820
Reinsurance balances payable
68,983
105,135
Funds withheld
17,289
21,907
Other liabilities
11,795
6,397
Debt
73,281
80,534
Total liabilities
1,139,212
1,077,261
Shareholders’ equity
Ordinary share capital (par value $0.10; authorized, 125,000,000; issued and outstanding, 35,336,732 (2022: Class A: par value $0.10; authorized, 100,000,000; issued and outstanding, 28,569,346: Class B: 2022: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,715)
$
3,534
$
3,482
Additional paid-in capital
484,532
478,439
Retained earnings
108,029
21,199
Total shareholders’ equity
596,095
503,120
Total liabilities and equity
$
1,735,307
$
1,580,381
GREENLIGHT CAPITAL RE, LTD.
CONSOLIDATED RESULTS OF OPERATIONS
(UNAUDITED)
(expressed in thousands of U.S. dollars, except percentages and per share amounts)
Three months ended December 31
Year ended December 31
2023
2022
2023
2022
Underwriting revenue
Gross premiums written
$
112,338
$
127,359
$
636,810
$
563,171
Gross premiums ceded
(7,022
)
(11,456
)
(42,762
)
(33,429
)
Net premiums written
105,316
115,903
594,048
529,742
Change in net unearned premium reserves
32,129
(4,518
)
(10,901
)