Greenlight Re(GLRE)

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Greenlight Re(GLRE) - 2020 Q2 - Quarterly Report
2020-08-05 20:48
PART I — FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, Shareholders' Equity, and Cash Flows, for the periods ended June 30, 2020 and 2019 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 (unaudited) | December 31, 2019 (audited) | | :--- | :--- | :--- | | **Total Assets** | **$1,279,456** | **$1,355,193** | | Total Investments | $199,703 | $256,440 | | Restricted Cash and Cash Equivalents | $731,292 | $742,093 | | **Total Liabilities** | **$849,552** | **$878,010** | | Loss and Loss Adjustment Expense Reserves | $467,655 | $470,588 | | **Total Shareholders' Equity** | **$429,904** | **$477,183** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Key Operating Results (in thousands, except per share data) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Premiums Earned | $108,414 | $120,441 | $219,435 | $245,803 | | Total Revenues | $114,745 | $140,349 | $190,690 | $299,103 | | Net Income (Loss) | $(63) | $15,314 | $(40,333) | $21,220 | | Diluted EPS | $0.00 | $0.42 | $(1.12) | $0.58 | [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) - Total shareholders' equity decreased from **$477.2 million** at the end of 2019 to **$429.9 million** as of June 30, 2020. The decrease was primarily driven by a net loss of **$40.3 million** and the repurchase of Class A ordinary shares for **$7.8 million** during the six-month period[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(42,724) | $(5,775) | | Net Cash Provided by Investing Activities | $21,322 | $63,466 | | Net Cash Used in Financing Activities | $(7,772) | $0 | | **Net (Decrease) Increase in Cash** | **$(29,296)** | **$57,611** | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) - The COVID-19 pandemic is expected to have a significant adverse impact on the property and casualty insurance industry. The company has included its best estimate of losses in its reserves, but notes considerable uncertainty remains, and significant adjustments may be required in future periods[25](index=25&type=chunk) - In Q1 2020, the company adopted ASU 2016-13 regarding expected credit losses, resulting in a cumulative-effect adjustment to retained earnings of **$0.9 million** as of January 1, 2020[27](index=27&type=chunk)[49](index=49&type=chunk) - The company's investment in the related party investment fund, Solasglas Investments, LP (SILP), had a net asset value of **$177.7 million** as of June 30, 2020, down from **$240.1 million** at year-end 2019. The company recognized a loss of **$40.5 million** from this investment for the six months ended June 30, 2020, primarily due to market disruptions from the COVID-19 pandemic[55](index=55&type=chunk)[56](index=56&type=chunk) - For the six months ended June 30, 2020, the company recognized a **$5.7 million** increase in estimated net losses related to prior accident years, primarily from general liability, health, and multi-line contracts[74](index=74&type=chunk) - During the six months ended June 30, 2020, the company repurchased **1.2 million** Class A ordinary shares. As of June 30, 2020, **3.8 million** shares remained available for repurchase under the plan[92](index=92&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results for the three and six months ended June 30, 2020, noting a **$40.3 million net loss** driven by investment losses, improved underwriting with a **100.0% combined ratio**, and the impact of COVID-19 on liquidity and capital [Results of Operations](index=32&type=section&id=Results%20of%20Operations) - For the six months ended June 30, 2020, the company reported a net loss of **$40.3 million**, a significant shift from the **$21.2 million** net income in the same period of 2019. The loss was primarily driven by a net investment loss of **$29.7 million**, compared to a **$51.1 million** gain in the prior year[163](index=163&type=chunk) - Fully diluted book value per share decreased by **8.3%** to **$11.81** in the first six months of 2020, down from **$12.88** at the end of 2019[162](index=162&type=chunk) Underwriting Ratio Summary | Ratio | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Loss Ratio | 75.1% | 81.9% | | Acquisition Cost Ratio | 22.6% | 23.9% | | Composite Ratio | 97.7% | 105.8% | | **Combined Ratio** | **100.0%** | **108.3%** | - Gross premiums written decreased by **28.1%** to **$226.5 million** for the first six months of 2020, primarily due to the non-renewal of certain motor contracts in both the Property and Casualty segments[166](index=166&type=chunk) - The investment portfolio managed by DME Advisors (SILP) returned a loss of **7.8%** for the first six months of 2020, compared to a gain of **9.1%** in the same period of 2019. The loss was driven by disruptions in global financial markets associated with the COVID-19 pandemic[183](index=183&type=chunk) [Financial Condition](index=43&type=section&id=Financial%20Condition) - Total investments decreased by **22.1%** to **$199.7 million** as of June 30, 2020, from **$256.4 million** at year-end 2019, mainly due to investment losses in SILP and withdrawals for claim payments[193](index=193&type=chunk) - Total shareholders' equity fell by **$47.3 million** to **$429.9 million** as of June 30, 2020. The decline was caused by the **$40.3 million** net loss and **$7.8 million** used for share repurchases[205](index=205&type=chunk) - As of July 1, 2020, the company's estimated probable maximum loss (PML) for a single 1-in-250 year catastrophe event was **$90.9 million**, with the peak exposure in the United States, Canada, and the Caribbean[204](index=204&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) - The company believes it has sufficient cash flow from operations and investments to meet its foreseeable liquidity needs for the next twelve months, including potential impacts from the COVID-19 pandemic[211](index=211&type=chunk) - As of June 30, 2020, the company provided **$731.7 million** in collateral to cedents through letters of credit and trust arrangements, secured by **$731.3 million** in restricted cash and cash equivalents[214](index=214&type=chunk) - The Board extended the share repurchase plan to June 30, 2021, authorizing the repurchase of up to **5.0 million** Class A shares and **$25.0 million** of its convertible senior notes. During the first six months of 2020, **1.2 million** shares were repurchased[217](index=217&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are equity price and foreign currency, with a **$7.0 million loss** for a 10% equity decline and a **$1.2 million loss** for a 10% USD/GBP change - The company's primary market risk exposure is equity price risk through its investment in SILP. A hypothetical **10% decline** in the price of underlying listed equity securities and derivatives would result in a loss of **$7.0 million**, or **1.5%** of the Investment Portfolio[228](index=228&type=chunk) - The company is exposed to foreign currency risk, with a net exposure to GBP-denominated balances of **£9.8 million**. A **10% adverse change** in the U.S. dollar against the GBP would result in an estimated **$1.2 million** foreign exchange loss[234](index=234&type=chunk) - As of June 30, 2020, a **100 basis point change** in interest rates or a **10% change** in the value of the U.S. dollar against other foreign currencies would have no meaningful impact on the value of the Investment Portfolio[236](index=236&type=chunk)[238](index=238&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[244](index=244&type=chunk) - No changes were made to the company's internal control over financial reporting during the fiscal quarter ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, these controls[247](index=247&type=chunk) PART II — OTHER INFORMATION [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company may face legal disputes in the normal course of business, but management does not anticipate any material adverse effects - The company states that while it may be involved in legal disputes in the normal course of business, it does not expect any existing disputes to have a material adverse effect on its financial condition or results[250](index=250&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the Form 10-K/A filing for the fiscal year ended December 31, 2019 - The report states there have been no material changes to the risk factors previously disclosed in the Form 10-K/A filed on April 29, 2020[252](index=252&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **1,161,659 Class A ordinary shares** at an average of **$6.69 per share** in Q2 2020, with **3,838,341 shares** remaining for repurchase Issuer Purchases of Equity Securities (Q2 2020) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2020 | 292,985 | $6.46 | | May 2020 | 344,776 | $6.50 | | June 2020 | 523,898 | $6.77 | | **Total** | **1,161,659** | **$6.69** | - The Board of Directors extended the share repurchase plan to June 30, 2021, and increased the authorization to **5.0 million** Class A ordinary shares and up to **$25.0 million** of its convertible senior notes[253](index=253&type=chunk) [Other Information](index=53&type=section&id=Item%205.%20Other%20Information) An amended agreement with investment advisors limits gross long exposure to **50% of surplus** and waives management fees on cash and short-term government securities until June 30, 2021 - Effective July 1, 2020, the company amended its agreement with DME Advisors to limit the gross long exposure of its investment portfolio to **50%** of the company's surplus[258](index=258&type=chunk) - Under the amended agreement, until June 30, 2021, cash, cash equivalents, and short-term U.S. government securities held in the investment portfolio will not be subject to management or performance fees[258](index=258&type=chunk) [Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including employment agreements, bonus agreements, an advisor letter agreement, and CEO/CFO certifications
Greenlight Re(GLRE) - 2020 Q1 - Earnings Call Transcript
2020-05-09 15:14
Greenlight Capital Re, Ltd. (NASDAQ:GLRE) Q1 2020 Earnings Conference Call May 6, 2020 9:00 AM ET Company Participants Simon Burton - Chief Executive Officer David Einhorn - Chairman Tim Courtis - Chief Financial Officer Conference Call Participants Michael Katz - Glenrock Advisory Associates Operator Thank you for joining the Greenlight Re conference call for the First Quarter 2020 Earnings. The company reminds you that forward-looking statements that may be made in this call are intended to be covered by ...
Greenlight Re(GLRE) - 2020 Q1 - Quarterly Report
2020-05-05 20:22
FORM 10-Q __________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 or UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________ ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to GREENLIGHT CAPITAL RE, LTD. (Exact name of registrant as specified in its charter) __________________ ...
Greenlight Re(GLRE) - 2019 Q3 - Earnings Call Transcript
2019-11-07 20:07
Greenlight Capital Re, Ltd. (NASDAQ:GLRE) Q3 2019 Earnings Conference Call November 7, 2019 9:00 AM ET Company Participants Simon Burton - CEO David Einhorn - Chairman Tim Courtis - CFO Conference Call Participants Ethan Sharvit - Argos Capital Management Mikel Abasolo - Solo Capital Management Operator Thank you for joining the Greenlight Re Conference Call for the Third Quarter of 2019 Earnings. The company reminds you that forward-looking statements that may be made in this call are intended to be covere ...
Greenlight Re(GLRE) - 2019 Q2 - Earnings Call Transcript
2019-08-06 18:57
Greenlight Capital Re, Ltd. (NASDAQ:GLRE) Q2 2019 Earnings Conference Call August 6, 2019 9:00 AM ET Company Participants Simon Burton - Chief Executive Officer David Einhorn - Chairman Tim Courtis - Chief Financial Officer Conference Call Participants Brett Reece - Janney Montgomery Scott Mikel Abasolo - Solo Capital Management Operator Thank you for joining the Greenlight Re Conference Call for Second Quarter 2019 Earnings. [Operator Instructions] After today's presentation, there will be an opportunity t ...
Greenlight Re(GLRE) - 2019 Q2 - Quarterly Report
2019-08-05 20:33
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________ FORM 10-Q __________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-33493 _____________________________________________________________________ ...
Greenlight Re(GLRE) - 2019 Q1 - Earnings Call Transcript
2019-05-07 18:58
Financial Data and Key Metrics Changes - The company recorded net income of $5.9 million for Q1 2019, a significant improvement compared to a net loss of $142.8 million in Q1 2018 [22] - Fully diluted net income per share was $0.16 for Q1 2019, compared to a net loss per share of $3.85 for the same period in 2018 [22] - Gross premium written decreased by approximately 7% to $162.6 million in Q1 2019, primarily due to a medical stop-loss contract not renewed and the commutation of a mortgage reinsurance contract [23] - The composite ratio for Q1 2019 was 115.2%, up from 96% in the comparable period in 2018, mainly due to adverse developments in the auto business [25] - The fully diluted adjusted book value per share as of March 31, 2019, was $13.16, reflecting a 0.5% increase for the quarter but a 28.3% decrease from $18.35 per share reported in March 31, 2018 [28] Business Line Data and Key Metrics Changes - The auto class experienced unanticipated losses due to adverse rulings affecting claims in Florida, overshadowing otherwise successful performance in other business lines [6][8] - The company has ceded over $150 million of auto premium to align ongoing net exposure with its risk appetite [7] - Workers' compensation class is showing flat or slightly lower rates, but with a downward trend in claim frequency, leading to compelling risk-adjusted returns [12] Market Data and Key Metrics Changes - The public health market conditions are improving, with a 20% rate increase observed in recent Japanese windstorm renewals [10] - In the U.S., conditions in the private passenger auto class are generally good, with stabilized claim frequency and manageable claim severity [11] Company Strategy and Development Direction - The company is focused on diversifying its portfolio and improving underwriting returns, particularly in the London Market Specialty classes where capacity withdrawal has created upward pricing pressure [9] - The company aims to balance its portfolio between quota share and excessive loss divisions, enhancing integrity and diversity [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that no other underwriting periods will be impacted by the recent adverse developments in the auto class [7] - The core portfolio is performing well, and management sees positive earnings potential moving forward despite potential bumps in the road [36] - Management is optimistic about the overall improving environment and tailwinds for diversifying revenue sources [12] Other Important Information - The Board approved a renewal of the company's share repurchase plan, allowing for the repurchase of 2.5 million shares, which expires on June 30, 2020 [29] - There were no share repurchases during Q1 2019 [29] Q&A Session Summary Question: How long until the combined ratio is below 100? - Management indicated that while the recent reserve charge is a bump in the road, they are optimistic about the core portfolio's performance and potential for improvement [33][36] Question: Explanation of adverse rulings affecting closed cases? - Management preferred not to delve into specifics but indicated that the unusual nature of the claims and the shifting legal landscape in Florida contributed to the unexpected developments [38][63] Question: Approach to catastrophe exposure and insurance portfolio? - Management stated that while catastrophe exposure is compelling from a margin standpoint, it is not a major driver of risk and return, and they are mindful of overall risk in the portfolio [47][51] Question: Outlook for Tesla? - Management expressed a negative view on Tesla, citing overvaluation and deteriorating business performance, expecting to benefit from their short position [53][56] Question: Will share buybacks only occur if stock price is below book value? - Management emphasized flexibility in decision-making regarding share buybacks, considering multiple factors including share price and capital deployment opportunities [41][42] Question: Plans for increasing analyst coverage? - Management acknowledged ongoing relationships with analysts and expressed hope for increased coverage in the future [43]
Greenlight Re(GLRE) - 2018 Q4 - Earnings Call Transcript
2019-02-28 18:23
Greenlight Capital Re, Ltd. (NASDAQ:GLRE) Q4 2018 Results Earnings Conference Call February 28, 2019 9:00 AM ET Company Participants David Einhorn - Chairman Simon Burton - CEO Tim Courtis - CFO Conference Call Participants Meyer Shields - KBW Operator Thank you for joining the Greenlight Re Conference Call for the Fourth Quarter and Full Year 2018 Earnings. Please note this event is being recorded. The company reminds you that forward-looking statements that may be made in this call are intended to be cove ...