Greenlight Re(US:GLRE)2024-11-04 21:43Financial Performance - For Q3 2024, the company reported a net income of $35.2 million, an increase of $21.8 million compared to Q3 2023, primarily driven by strong investment performance [95]. - The diluted EPS for Q3 2024 was $1.01, compared to $0.39 in the same quarter last year [96]. - Net income for Q3 2024 was $35.2 million, a significant increase from $13.5 million in Q3 2023 [114]. - For the nine months ended September 30, 2024, net income was $70.2 million, compared to $69.2 million for the same period in 2023 [116]. - Total shareholders' equity rose by $67.3 million to $663.4 million, primarily due to net income of $70.2 million reported for the period [169]. Premiums and Underwriting - Gross premiums written decreased by 8.0% to $168.3 million, while net premiums earned fell by 6.9% to $151.9 million [96]. - Net underwriting income was $6.1 million, down from $14.4 million in Q3 2023, with current year CAT losses net of reinsurance amounting to $14.1 million [96]. - Gross premiums written for Q3 2024 decreased by $36.1 million, or 15.5%, compared to Q3 2023, with property premiums down by $19.3 million (58.6%) and casualty premiums down by $16.8 million (15.5%) [123]. - Net premiums written for Q3 2024 decreased by $26.5 million, or 15.8%, while YTD 2024 increased by $1.2 million, or 0.3% compared to the same periods in 2023 [128]. - Net premiums earned for Q3 2024 decreased by $11.2 million, or 6.9%, while YTD 2024 increased by $26.1 million, or 5.9% compared to the same periods in 2023 [129]. Investment Performance - Total investment income increased by $23.0 million to $28.1 million, reflecting a 5.2% net return from the investment in Solasglas [96]. - Investment income increased by $23.0 million in Q3 2024, primarily due to a gain of $19.8 million from the investment in Solasglas [115]. - Net investment income for Q3 2024 was $8.2 million, up from $7.0 million in Q3 2023 [115]. - Total investment income for Q3 2024 was $28.1 million, a significant increase from $5.1 million in Q3 2023, and YTD 2024 total investment income reached $67.0 million [152]. - Net investment-related income increased by 18.5% compared to Q3 2023, primarily due to lower net realized and unrealized gains from the Innovation portfolio [153]. Loss Ratios and Claims - The combined ratio for Q3 2024 was 95.9%, up from 91.2% in Q3 2023, driven by higher loss and acquisition cost ratios [115]. - The attritional loss ratio for the underwriting portfolio increased, contributing to the rise in the combined ratio [115]. - The total loss ratio for Q3 2024 increased by 1.9 percentage points to 61.3% compared to Q3 2023, while YTD 2024 increased by 0.7 percentage points to 64.5% [132]. - Current accident year loss ratio increased by 3.6 percentage points for Q3 2024 and 3.3 percentage points for YTD 2024 compared to the same periods in 2023 [133]. - Net losses incurred for Q3 2024 totaled $93.165 million, with property losses at $21.506 million and casualty losses at $43.799 million [134]. Operational Expenses - General and administrative expenses for Q3 2024 increased by $2.4 million or 30.9%, primarily due to an increase in headcount and professional fees related to underwriting activities [148]. - Corporate expenses increased by $1.0 million or 30.2%, mainly due to higher personnel costs and professional fees [149]. - Total acquisition costs for Q3 2024 decreased by 1.6% to $46.2 million, while YTD 2024 acquisition costs increased by 9.1% to $138.2 million, mainly due to growth in net premiums earned [140]. - The acquisition cost ratio for property increased by 2.2 points to 19.9% in Q3 2024, driven by profit commission associated with a significant quota share treaty [143]. Capital and Debt Management - Total debt decreased by $10.7 million, or 14.6%, to $62.6 million from $73.3 million at December 31, 2023 [168]. - The debt to shareholders' equity ratio improved to 9.4% as of September 30, 2024, down from 12% at the end of 2023, indicating a stronger capital structure [176]. - The company has renewed its $200 million shelf registration, effective July 5, 2024, to provide flexibility for future capital needs [178]. - Total contractual obligations and commitments amounted to $874.9 million as of September 30, 2024, with $385.3 million due in less than one year [180]. Market Outlook - The company anticipates continued primary rate increases and tightening reinsurance terms in the US Casualty market [99]. - The 2024 mid-year renewals are characterized by a healthy balance of supply and demand for reinsurance capacity, with attractive terms for growth [100]. - Anticipated interest rate cuts could favorably impact interest expenses related to floating rate term loans [101]. Miscellaneous - A.M. Best affirmed the Financial Strength Rating of A- (Excellent) and revised the outlooks to positive from stable, reflecting improved operating performance [97]. - There were no recent accounting pronouncements expected to materially impact the company's financial results as of September 30, 2024 [183].