Greenlight Re(GLRE) - 2025 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION Note on Forward-Looking Statements This section provides a standard disclaimer for forward-looking statements, detailing their nature, underlying assumptions, and factors that could cause actual results to differ materially - Forward-looking statements are identified by words such as "believe," "project," "expect," "anticipate," "estimate," "intend," "plan," "may," "should," "will," and similar expressions[8] - These statements cover estimates for catastrophe and weather-related losses, potential losses in investment fair value, business performance, financial results, liquidity, capital resources, strategic initiatives, pricing, and market/economic conditions[9] - Key risk factors include license suspension/revocation, losses from catastrophes, A.M. Best rating downgrades, loss of significant brokers, and other risks detailed in the 2024 Form 10-K[12] Item 1. Financial Statements This section presents unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity changes, cash flows, and explanatory notes Condensed Consolidated Balance Sheets The balance sheets show the company's financial position, with total assets and shareholders' equity increasing due to investments and reinsurance balances | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | |:---|:---|:---|:---|:---| | Total assets | $2,188,024 | $2,016,223 | $171,801 | 8.5% | | Total liabilities | $1,524,706 | $1,380,344 | $144,362 | 10.5% | | Total shareholders' equity | $663,318 | $635,879 | $27,439 | 4.3% | | Investment in related party investment fund | $461,265 | $387,144 | $74,121 | 19.1% | | Loss and loss adjustment expense reserves | $944,985 | $860,969 | $84,016 | 9.8% | Condensed Consolidated Statements of Operations Statements of operations show a significant net income decrease for Q2 2025, driven by investment losses despite increased net premiums earned | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | |:---|:---|:---|:---|:---| | Net premiums earned | $161,641 | $158,398 | $3,243 | 2.0% | | Income (loss) from investment in related party investment fund | $(18,276) | $4,330 | $(22,606) | -522.1% | | Net income | $329 | $7,978 | $(7,649) | -95.9% | | Diluted EPS | $0.01 | $0.23 | $(0.22) | -95.7% | | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | |:---|:---|:---|:---|:---| | Net premiums earned | $330,104 | $319,934 | $10,170 | 3.2% | | Income (loss) from investment in related party investment fund | $13,921 | $22,578 | $(8,657) | -38.3% | | Net income | $29,956 | $34,997 | $(5,041) | -14.4% | | Diluted EPS | $0.87 | $1.01 | $(0.14) | -13.9% | Condensed Consolidated Statements of Changes in Shareholders' Equity This statement details shareholders' equity movements, showing an overall increase for H1 2025, driven by net income and share-based compensation | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | |:---|:---|:---| | Balance - beginning of period (Ordinary share capital) | $3,483 | $3,534 | | Repurchase of ordinary shares | $(36) | — | | Balance - end of period (Ordinary share capital) | $3,420 | $3,532 | | Balance - beginning of period (Additional paid-in capital) | $481,551 | $484,532 | | Repurchase of ordinary shares | $(4,964) | — | | Share-based compensation expense | $2,510 | $2,930 | | Balance - end of period (Additional paid-in capital) | $479,097 | $487,462 | | Balance - beginning of period (Retained earnings) | $150,845 | $108,029 | | Net income | $29,956 | $34,997 | | Balance - end of period (Retained earnings) | $180,801 | $143,026 | | Total shareholders' equity | $663,318 | $634,020 | Condensed Consolidated Statements of Cash Flows The cash flow statement highlights a substantial increase in operating cash flow for H1 2025, with decreased cash used in investing and financing | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | |:---|:---|:---| | Net cash provided by operating activities | $78,819 | $40,669 | | Net cash used in investing activities | $(62,932) | $(70,246) | | Net cash used in financing activities | $(6,875) | $(11,876) | | Increase (decrease) in cash, cash equivalents and restricted cash | $9,973 | $(41,560) | | Cash, cash equivalents and restricted cash at end of the period | $659,060 | $614,170 | Notes to the Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering key financial areas 1. Organization and Basis of Presentation This note describes Greenlight Capital Re, Ltd. as a global specialty reinsurer and clarifies the basis of presentation for unaudited financial statements - Greenlight Capital Re, Ltd. (GLRE) is a global specialty property and casualty reinsurer headquartered in the Cayman Islands[24] - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and SEC instructions[24] 2. Significant Accounting Policies No material changes to significant accounting policies since 2024 Form 10-K, with reclassifications, an updated CAT loss definition, and ongoing evaluation of new ASUs - No material changes to significant accounting policies since the 2024 Form 10-K[27] - Reclassified "Underwriting expenses" and "Corporate and other expenses" separately, and investment-related income from Lloyd's syndicates to "Net investment income"[28] - Updated the definition of CAT event loss to any individual CAT loss exceeding $5 million, net of reinsurance recoveries[28] - The company is evaluating the disclosure impact of new ASUs, including ASU 2023-09 (Income Taxes) and ASU 2024-03 (Disaggregation of Income Statement Expenses)[29][30][31] 3. Investment in Related Party Investment Fund This note details the company's investment in Solasglas Investments, LP, showing an increase in GLRE's share of partners' capital | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | |:---|:---|:---| | GLRE's share of Partners' capital in Solasglas | $461,265 | $387,144 | | Solasglas' total assets | $977,658 | $743,939 | | Solasglas' Partners' capital | $578,785 | $497,112 | | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | |:---|:---|:---| | GLRE's share of net increase in Partners' capital | $13,921 | $22,578 | | Solasglas' net increase (decrease) in Partners' capital | $21,472 | $35,024 | 4. Other Investments This note breaks down other investments, primarily private and unlisted equities, and summarizes net realized and unrealized gains or losses | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | |:---|:---|:---| | Private investments and unlisted equities | $74,372 | $71,867 | | Debt and convertible debt securities | $1,664 | $1,293 | | Total other investments | $76,036 | $73,160 | | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | |:---|:---|:---| | Net realized and unrealized gains (losses) on other investments | $144 | $(324) | 5. Restricted Cash and Cash Equivalents This note details restricted cash and cash equivalents, primarily held for trust accounts and letters of credit, and reconciles these amounts | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | |:---|:---|:---| | Cash securing trust accounts | $253,125 | $256,796 | | Cash securing letters of credit issued | $307,463 | $312,855 | | Total restricted cash and cash equivalents | $576,698 | $584,402 | | Total cash, cash equivalents, and restricted cash | $659,060 | $649,087 | 6. Fair Value Measurements This note outlines fair value measurements for assets, distinguishing nonrecurring and recurring bases, and their classification within the fair value hierarchy - At June 30, 2025, the company held $67.2 million in private investments and unlisted equities measured at fair value on a nonrecurring basis, classified as Level 3[44] - Interest rate swaps, used to hedge 50% of Term Loans interest rate risk, are carried at fair value (Level 2) and are not designated as accounting hedges[46] - For the six months ended June 30, 2025, a nominal unrealized loss was recognized for derivatives, compared to a $0.6 million unrealized gain in 2024[47] 7. Loss and Loss Adjustment Expense Reserves This note details the roll-forward of loss and LAE reserves, including incurred and paid losses, CAT estimates, and prior year reserve development by segment | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | |:---|:---|:---| | Case reserves | $242,033 | $230,633 | | IBNR | $702,952 | $630,336 | | Total loss and LAE reserves | $944,985 | $860,969 | | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | |:---|:---|:---| | Net balance at January 1 | $775,179 | $635,867 | | Total incurred losses | $222,963 | $211,359 | | Total paid losses | $(176,706) | $(150,393) | | Net balance at June 30 | $851,014 | $694,110 | - In H1 2025, the company incurred $27.0 million in CAT losses primarily from California wildfires, compared to $17.7 million in H1 2024 from events like the Baltimore Bridge collapse and U.S. tornadoes[52][53] | Segment | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | |:---|:---|:---| | Open Market | $(5,919) | $109 | | Innovations | $(1,346) | $(4,821) | | Consolidated Net Prior Year Reserve Development | $(7,265) | $(4,712) | - Open Market segment experienced $32.0 million adverse development in H1 2025, mainly from casualty lines due to inflation and worse-than-expected loss emergence in financial and multiline business, partially offset by favorable property and specialty lines[59] - Innovations segment had $2.3 million adverse development in H1 2025, predominantly in the financial line due to higher claim volume[59] 8. Retrocession This note summarizes ceded reinsurance activities, including premiums and losses, and details losses recoverable, highlighting credit risk concentration | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | |:---|:---|:---| | Gross ceded premiums | $43,649 | $38,013 | | Earned ceded premiums | $36,601 | $27,091 | | Loss and loss adjustment expenses ceded | $15,662 | $37,849 | | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | |:---|:---|:---| | Total loss and loss adjustment expenses recoverable, net | $93,971 | $85,790 | | Gross recoverable (A- or better by A.M. Best) | $91,323 | $82,181 | | Gross recoverable (Not rated) | $3,148 | $4,109 | - At June 30, 2025, three reinsurers accounted for 10% or more of the total net losses recoverable, with an aggregate gross amount of $53.3 million[61] 9. Debt and Credit Facilities This note details outstanding debt, primarily Term Loans, and LC facilities, confirming partial debt repayment and compliance with covenants | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | |:---|:---|:---| | Term loans | $58,438 | $60,313 | | Total debt | $58,889 | $60,749 | - The company partially repaid $1.9 million of outstanding Term Loans during the six months ended June 30, 2025[63] | LC Facility | Capacity (in thousands) | LCs issued (in thousands) | Termination Date | |:---|:---|:---|:---| | Citibank | $275,000 | $191,150 | December 19, 2025 | | CIBC | $200,000 | $116,121 | December 31, 2025 | | HSBC | $100,000 | — | December 17, 2025 | | Total | $575,000 | $307,271 | | - At June 30, 2025, the company was in compliance with all LC facilities covenants[64] 10. Share Capital This note outlines share capital, detailing changes in issued and outstanding ordinary shares, including repurchases under the re-approved plan | Metric | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | Ordinary shares issued and outstanding | 34,198,153 | 34,831,324 | | Repurchase of ordinary shares (H1 2025) | 357,278 | — | | Value of repurchased shares (H1 2025) | $5.0 million | — | - The Board re-approved a share repurchase plan until June 30, 2026, authorizing repurchases of up to $25.0 million of ordinary shares[67] 11. Share-Based Compensation This note summarizes unvested restricted share awards and units activity for employees and directors, reporting total share-based compensation expense | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | |:---|:---|:---| | Total stock compensation expense | $2,500 | $2,900 | | Total fair value of Performance and Service RSs vested | $4,200 | $1,900 | | Total fair value of Performance and Service RSUs vested | $1,400 | $700 | 12. Earnings Per Share This note reconciles net income and weighted average shares for basic and diluted EPS for the three and six months ended June 30, 2025 and 2024 | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | |:---|:---|:---| | Basic EPS | $0.01 | $0.23 | | Diluted EPS | $0.01 | $0.23 | | Weighted average shares outstanding - basic | 33,969,716 | 34,238,863 | | Weighted average shares outstanding - diluted | 34,423,679 | 34,699,182 | | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | |:---|:---|:---| | Basic EPS | $0.88 | $1.02 | | Diluted EPS | $0.87 | $1.01 | | Weighted average shares outstanding - basic | 33,960,643 | 34,255,454 | | Weighted average shares outstanding - diluted | 34,479,351 | 34,679,325 | 13. Net Investment Income This note breaks down net investment income, including interest, dividends, Lloyd's income, other investment gains/losses, and Solasglas' net income (loss) | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | |:---|:---|:---| | Net investment income | $10,470 | $10,948 | | Share of Solasglas' net income (loss) | $(18,276) | $4,330 | | Total investment income (loss) | $(7,806) | $15,278 | | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | |:---|:---|:---| | Net investment income | $18,757 | $24,126 | | Share of Solasglas' net income (loss) | $13,921 | $22,578 | | Total investment income (loss) | $32,678 | $46,704 | 14. Related Party Transactions This note details agreements with DME Advisors for investment advisory, investor relations, and collateral asset management, and Solasglas' investment in Green Brick Partners - The company has an investment advisory agreement with Solasglas, managed by DME Advisors[78] - A service agreement with DME Advisors provides investor relations services for $5,000 per month[81] - A collateral assets investment management agreement with DME Advisors manages certain company assets without fees[82] - Solasglas, along with DME Advisors affiliates, collectively owned 23.5% of Green Brick Partners, Inc. (GRBK) common shares at June 30, 2025[79] 15. Commitments and Contingencies This note addresses credit risk concentrations in cash, investments, and reinsurance balances, and mentions lease obligations and litigation with no material adverse effects expected | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | |:---|:---|:---| | Premiums receivable | $273,902 | $253,627 | | Funds held by cedants | $51,402 | $58,183 | | Funds at Lloyd's | $112,732 | $113,324 | | Reinsurance balances receivable, net | $755,296 | $704,483 | - Reinsurance balances receivable increased by $50.8 million (7.2%) to $755.3 million at June 30, 2025, driven by increased premiums receivable and funds withheld[174] - The company does not believe any existing legal dispute will have a material adverse effect on its business, financial condition, or operating results[89] 16. Segment Reporting This note provides financial information for Open Market, Innovations, and Corporate segments, detailing gross premiums, net premiums earned, and underwriting results - The company operates in two segments: Open Market (treaty reinsurance via brokers and Lloyd's) and Innovations (reinsurance capacity to startups/MGAs, including Syndicate 3456)[91][92] | Metric (Q2 2025, in thousands) | Open Market | Innovations | Corporate | Total Consolidated | |:---|:---|:---|:---|:---| | Gross premiums written | $152,333 | $27,596 | $(301) | $179,628 | | Net premiums earned | $140,554 | $21,386 | $(299) | $161,641 | | Underwriting income (loss) | $11,194 | $(1,490) | $(1,595) | $8,109 | | Metric (H1 2025, in thousands) | Open Market | Innovations | Corporate | Total Consolidated | |:---|:---|:---|:---|:---| | Gross premiums written | $373,042 | $55,062 | $(531) | $427,573 | | Net premiums earned | $290,195 | $40,391 | $(482) | $330,104 | | Underwriting income (loss) | $2,245 | $(425) | $(1,505) | $315 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's discussion and analysis of financial condition and results of operations for Q2 and H1 2025, including overview, outlook, segment analysis, liquidity, and capital resources Overview The overview introduces Greenlight Capital Re and summarizes Q2 2025 performance, noting decreased net income due to investment losses, partially offset by improved underwriting - Net income for Q2 2025 was $0.3 million, a $7.6 million decrease from Q2 2024, mainly due to an investment loss from Solasglas[108] - Fully diluted book value per share increased by 5.7% to $18.97 at June 30, 2025, from December 31, 2024[109] | Metric (Q2 2025) | Value | Change vs Q2 2024 | |:---|:---|:---| | Gross premiums written | $179.6 million | +6.3% | | Net premiums earned | $161.6 million | +2.0% | | Net underwriting income | $8.1 million | vs $0.3 million | | Current period CAT losses | Nil | vs $7.7 million | | Prior year adverse loss development | $3.0 million | vs $0.7 million favorable | | Total investment loss | $7.8 million | vs $15.3 million income | | Diluted EPS | $0.01 | vs $0.23 | Business Overview The company reiterates its core business as a global specialty property and casualty reinsurer, focused on delivering risk management solutions and shareholder value - Greenlight Capital Re is a global specialty property and casualty reinsurer headquartered in the Cayman Islands[107] - The company aims to build long-term shareholder value by providing risk management solutions to the insurance, reinsurance, and other risk marketplaces[107] Outlook and Trends Increased competition in the Open Market segment leads to rate pressure, while persistent inflation and an uncertain global economic outlook prompt a bearish repositioning of Solasglas' investment portfolio - Increased competition in the Open Market segment is putting pressure on headline rates, though attachment points and other terms & conditions remain largely firm[110] - Inflationary trends are expected to persist, and the company continues to assess their impact on its underwriting portfolio[111] - DME Advisors pivoted Solasglas' investment portfolio from conservatively positioned to bearish in Q1 2025, maintaining this stance in Q2 2025 by lowering gross/net exposure and adding market hedges[111] - Aggressive U.S. trade policies have introduced additional uncertainty and volatility to the economic outlook[112] Key Financial Measures and Non-GAAP Measures This section confirms no changes to key financial measures, including non-GAAP, and reconciles fully diluted to basic book value per share, showing an increase - There have been no changes to the company's key financial measures, including non-GAAP financial measures, as described in the 2024 Form 10-K[114] | Metric | June 30, 2025 | December 31, 2024 | Increase (decrease) | |:---|:---|:---|:---| | Basic book value per share | $19.40 | $18.26 | $1.14 (5.9%) | | Fully diluted book value per share | $18.97 | $17.95 | $1.02 (5.7%) | Consolidated Results of Operations Consolidated results show a significant net income decrease for Q2 and YTD 2025, driven by Solasglas investment losses and higher CAT losses, partially offset by improved underwriting | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (in thousands) | |:---|:---|:---|:---| | Net underwriting income | $8,109 | $333 | $7,776 | | Income from investment in Solasglas | $(18,276) | $4,330 | $(22,606) | | Foreign exchange gains (losses) | $6,271 | $(932) | $7,203 | | Net income | $329 | $7,978 | $(7,649) | | Diluted earnings per share | $0.01 | $0.23 | $(0.22) | | Combined ratio | 95.0% | 99.9% | -4.9 pts | | Metric | YTD 2025 (in thousands) | YTD 2024 (in thousands) | Change (in thousands) | |:---|:---|:---|:---| | Net underwriting income | $315 | $3,718 | $(3,403) | | Income from investment in Solasglas | $13,921 | $22,578 | $(8,657) | | Foreign exchange gains (losses) | $10,626 | $(2,581) | $13,207 | | Net income | $29,956 | $34,997 | $(5,041) | | Diluted earnings per share | $0.87 | $1.01 | $(0.14) | | Combined ratio | 99.9% | 98.9% | +1.0 pts | - The definition of CAT event loss was updated to any individual CAT event loss of $5 million or more, net of reinsurance recoveries, with prior year disclosures recast to conform[118] Results by Segment This section analyzes financial performance for Open Market, Innovations, Corporate runoff, and Solasglas investment income, highlighting segment-specific drivers for premiums, losses, and underwriting Open Market Segment Open Market segment saw increased premiums for Q2 and YTD 2025; Q2 underwriting income improved, but YTD income decreased due to lower investment income and higher CAT losses | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (in thousands) | |:---|:---|:---|:---| | Gross premiums written | $152,333 | $143,311 | $9,022 (6.3%) | | Net premiums earned | $140,554 | $125,865 | $14,689 (11.7%) | | Underwriting income | $11,194 | $7,368 | $3,826 | | Combined ratio | 92.0% | 94.1% | -2.1 pts | | Loss ratio | 59.4% | 58.3% | +1.1 pts | | Metric | YTD 2025 (in thousands) | YTD 2024 (in thousands) | Change (in thousands) | |:---|:---|:---|:---| | Gross premiums written | $373,042 | $330,372 | $42,670 (12.9%) | | Net premiums earned | $290,195 | $257,475 | $32,720 (12.7%) | | Underwriting income | $2,245 | $12,345 | $(10,100) | | Combined ratio | 99.2% | 95.2% | +4.0 pts | | Loss ratio | 67.6% | 62.2% | +5.4 pts | - YTD 2025 current year loss ratio increased by 4.6 points, mainly due to $27.0 million in CAT losses from California wildfires, compared to $10.0 million in YTD 2024[135] - Income before income taxes for YTD 2025 decreased to $13.6 million from $34.7 million in YTD 2024, primarily due to lower investment income and higher CAT losses[143] Innovations Segment Innovations segment reported increased Q2 gross premiums but YTD decrease, with underwriting losses and overall losses driven by higher expenses and loss ratio from reserve strengthening | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (in thousands) | |:---|:---|:---|:---| | Gross premiums written | $27,596 | $25,319 | $2,277 (9.0%) | | Net premiums earned | $21,386 | $25,348 | $(3,962) (-15.6%) | | Underwriting income (loss) | $(1,490) | $2,313 | $(3,803) | | Combined ratio | 107.0% | 90.9% | +16.1 pts | | Loss ratio | 71.3% | 53.8% | +17.5 pts | | Metric | YTD 2025 (in thousands) | YTD 2024 (in thousands) | Change (in thousands) | |:---|:---|:---|:---| | Gross premiums written | $55,062 | $55,387 | $(325) (-0.6%) | | Net premiums earned | $40,391 | $45,545 | $(5,154) (-11.3%) | | Underwriting income (loss) | $(425) | $2,469 | $(2,894) | | Combined ratio | 101.1% | 94.6% | +6.5 pts | | Loss ratio | 63.4% | 58.8% | +4.6 pts | - Prior year reserve development ratio increased by 18.3 points in Q2 2025 and 8.5 points in YTD 2025, driven by reserve strengthening in the financial line due to higher claim volume[157] - Loss before income taxes for YTD 2025 was $(720)K, compared to income of $1,252K in YTD 2024, due to weaker underwriting performance from increased expenses and higher loss ratio[161] Other Corporate This section covers runoff underwriting, with decreased net premiums and losses, and Solasglas' investment performance, showing a Q2 loss but YTD gain Runoff Underwriting Business Non-renewal of an Innovations-related property contract led to decreased net premiums earned and underwriting losses for Q2 and YTD 2025, including adverse reserve development - The non-renewal of an Innovations-related property business contract decreased consolidated net premiums earned by $7.5 million in Q2 2025 and $17.4 million in YTD 2025[162] | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | |:---|:---|:---| | Underwriting loss | $(1,600) | $(9,300) | | Prior year adverse reserve development | $1,500 | $900 | | Metric | YTD 2025 (in thousands) | YTD 2024 (in thousands) | |:---|:---|:---| | Underwriting loss | $(1,500) | $(11,100) | | Prior year adverse reserve development | $1,300 | $4,800 | Income from Investment in Solasglas Solasglas reported a 4.0% net investment loss for Q2 2025 but a 2.9% net gain for YTD 2025, driven by gold, Kyndryl, and S&P 500 short positions | Metric | Q2 2025 | Q2 2024 | |:---|:---|:---| | Net investment return (loss) | (4.0)% | 1.2% | | Long portfolio gains (losses) | 1.2% | (1.0)% | | Short portfolio gains (losses) | (8.9)% | 1.6% | | Macro gains (losses) | 3.5% | 0.9% | | Metric | YTD 2025 | YTD 2024 | |:---|:---|:---| | Net investment return (loss) | 2.9% | 6.4% | | Long portfolio gains (losses) | (0.2)% | 3.4% | | Short portfolio gains (losses) | (4.2)% | 1.7% | | Macro gains (losses) | 8.2% | 2.9% | - Significant contributors to Solasglas' investment return for Q2 and YTD 2025 were long positions in gold and Kyndryl Holdings (KD), and a short position in the S&P 500 index[165][166] Financial Condition The company's financial condition at June 30, 2025, shows increased total investments and gross loss/LAE reserves, reduced debt, and increased PML estimates | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | |:---|:---|:---|:---| | Total investments | $537,301 | $460,304 | $76,997 (16.7%) | | Investment in Solasglas | $461,265 | $387,144 | $74,121 (19.1%) | | Restricted cash and cash equivalents | $576,700 | $584,400 | $(7,700) (-1.3%) | | Reinsurance balances receivable | $755,300 | $704,500 | $50,800 (7.2%) | | Total gross loss and LAE reserves | $945,000 | $861,000 | $84,000 (9.8%) | | Total debt | $58,900 | $60,700 | $(1,800) (-3.1%) | | Total shareholders' equity | $663,300 | $635,900 | $27,400 (4.3%) | | Peril (July 1, 2025) | Net 1-in-250 Year Return Period Single Event Loss (in thousands) | Net 1-in-250 Year Return Period Aggregate Loss (in thousands) | |:---|:---|:---| | North Atlantic Hurricane | $132,534 | $145,809 | | North America Earthquake | $126,814 | $127,708 | | Europe Windstorm | $68,621 | $73,912 | Liquidity and Capital Resources This section discusses liquidity and capital structure, highlighting increased operating cash flow, decreased investing/financing cash usage, debt-to-equity ratio, and share changes Liquidity The company's liquidity significantly improved in YTD 2025, with increased operating cash flow and reduced cash usage in investing and financing activities | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | |:---|:---|:---| | Total cash provided by (used in) operating activities | $78,819 | $40,669 | | Total cash provided by (used in) investing activities | $(62,932) | $(70,246) | | Total cash provided by (used in) financing activities | $(6,875) | $(11,876) | | Net cash inflows (outflows) | $9,973 | $(41,560) | | Cash, end of period | $659,060 | $614,170 | - The $38.2 million increase in cash from operating activities in YTD 2025 was driven by the ebb and flow of underwriting activities[185] - Cash used in investing activities decreased by $7.3 million due to lower net contributions to Solasglas[186] - Cash used in financing activities decreased due to $5.0 million in share repurchases in YTD 2025, compared to none in YTD 2024, and a smaller repayment of Term Loans[187] Capital Resources The company's capital structure shows an 8.9% debt-to-shareholders' equity ratio, with decreased ordinary shares due to repurchases, and sufficient capital for future operations | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | |:---|:---|:---| | Term Loans - outstanding principal | $58,438 | $60,313 | | Shareholders' equity | $663,318 | $635,879 | | Ratio of debt to shareholders' equity | 8.9% | 9.5% | - Ordinary shares outstanding decreased by 633,171 to 34,198,153 at June 30, 2025, primarily due to share repurchases and forfeited performance restricted stock awards[189] - The company expects its existing capital base and internally generated funds to be sufficient to implement its business strategy for the foreseeable future[189] Critical Accounting Estimates This section identifies critical accounting estimates, including premium revenues, loss/LAE reserves, investment impairments, credit loss allowances, and share-based compensation, noting potential material differences - The most significant estimates relate to premium revenues and risk transfer, loss and loss adjustment expense reserves, investment impairments, allowances for credit losses, and share-based compensation[192] - These estimates are inherently subjective, and actual events or results could differ materially from underlying assumptions, potentially impacting financial results[192] Recent Accounting Pronouncements No recently issued accounting pronouncements not yet adopted are expected to materially impact the company's financial results as of June 30, 2025 - No recently issued accounting pronouncements not yet adopted are expected to have a material impact on the company's financial results as of June 30, 2025[194] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section details the company's exposure to equity price, commodity price, foreign currency, and interest rate risks, with hypothetical impact scenarios on its investment portfolio - At June 30, 2025, a 10% decline in the price of underlying listed equity securities and equity-based derivative instruments would result in a $0.5 million unrealized gain on the investment in Solasglas, as SILP was net short[196] | Commodity (June 30, 2025) | 10% increase in prices (in millions) | 10% decrease in prices (in millions) | |:---|:---|:---| | Gold | $9.1 | $(7.7) | | Copper | $3.2 | $(1.6) | | Uranium | $0.5 | $(0.5) | | Crude oil | $0.1 | $(0.1) | | Total | $12.9 | $(9.9) | - A 10% increase in the value of the U.S. dollar against foreign currencies (mostly Euro) would result in a $3.0 million unrealized loss on the investment in Solasglas[199] | Currency (June 30, 2025) | Net Asset (Liability) Exposure | 10% increase in currency rate (in thousands) | 10% decrease in currency rate (in thousands) | |:---|:---|:---|:---| | British Pound | £107,409 | $(14,758) | $14,758 | | Euro | €(11,796) | $1,391 | $(1,391) | | Total foreign exchange gain (loss) | | $(13,367) | $13,367 | - A 100 basis points increase in interest rates would result in a $19.6 million unrealized loss on the investment in Solasglas due to interest rate derivatives[201] Item 4. Controls and Procedures This section confirms the effectiveness of disclosure controls and procedures as of June 30, 2025, acknowledging inherent limitations, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[202] - Control systems provide only reasonable, not absolute, assurance, and can be subject to inherent limitations such as faulty judgments, simple errors, circumvention by individuals, collusion, or management override[203][204] - There have been no material changes to the company's internal control over financial reporting during the fiscal quarter ended June 30, 2025[205] PART II — OTHER INFORMATION Item 1. Legal Proceedings The company is routinely involved in legal disputes but does not anticipate any existing dispute to materially adversely affect its business or financial condition - The company may be involved in formal and informal dispute resolution procedures, including arbitration or litigation, in the ordinary course of business[207] - Management does not believe that any existing dispute, when finally resolved, will have a material adverse effect on the company's business, financial condition, or operating results[207] Item 1A. Risk Factors This section refers to risk factors in the 2024 Form 10-K and confirms no other material changes as of June 30, 2025 - Factors that could cause actual results to differ materially are described in "Part I. Item 1A. Risk Factors" of the 2024 Form 10-K[208] - As of June 30, 2025, there have been no other material changes to the risk factors disclosed in the 2024 Form 10-K[209] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section refers to Note 10 for share repurchase plan details and summarizes ordinary shares repurchased during Q2 2025 - The company repurchased 357,278 ordinary shares for a total of $5.0 million at an average price of $13.99 per share during the three months ended June 30, 2025[211] - As of June 30, 2025, $20,000,012 remained available under the publicly announced share repurchase program[211] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities for the period - There were no defaults upon senior securities[212] Item 4. Mine Safety Disclosures This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[213] Item 5. Other Information This section discusses Rule 10b5-1 Trading Plans and confirms no such insider trading arrangements were in place for directors and officers during Q2 2025 - Directors and executive officers may purchase or sell ordinary shares through Rule 10b5-1 Trading Plans, which pre-establish trade amounts, prices, and dates[215] - During the three months ended June 30, 2025, no Rule 10b5-1 trading arrangements or "non-Rule 10b5-1 arrangements" were in place for the company's directors and officers[216] Item 6. Exhibits This section lists all exhibits filed with Form 10-Q, including CEO/CFO certifications and financial statements formatted in Inline XBRL - Exhibits include certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[217] - The Condensed Consolidated Financial Statements are formatted in Inline XBRL (Extensible Business Reporting Language)[217] SIGNATURES Signatures This section contains the official signatures of the company's Director, CEO, and CFO, certifying the report filing on behalf of Greenlight Capital Re, Ltd - The report was signed by Gregory Richardson, Director and Chief Executive Officer, and Faramarz Romer, Chief Financial Officer, on August 4, 2025[220]