Greenlight Re(US:GLRE)2021-08-03 20:25Financial Performance - The company reported total equity of $466.826 million as of June 30, 2021, compared to $472.119 million at March 31, 2021[157]. - Basic book value per share increased to $13.66, reflecting a 0.8% increase from $13.55 at March 31, 2021[157]. - For the six months ended June 30, 2021, net income was $7.1 million, a recovery from a net loss of $40.3 million in the same period of 2020[168]. - Net underwriting income for the three months ended June 30, 2021, was $4.6 million, a significant increase from a net loss of $1.3 million in the same period of 2020[168]. - Total investment income for the six months ended June 30, 2021, was $20.7 million, compared to a total investment loss of $29.7 million in the equivalent 2020 period[168]. - For the six months ended June 30, 2021, net cash used in operating activities was $19.8 million, a decrease from $42.7 million in the same period of 2020[213]. Underwriting Performance - The adjusted combined ratio is used to evaluate underwriting performance, providing a clearer understanding of factors influencing results[158]. - For the three months ended June 30, 2021, the combined ratio improved to 96.5% from 101.2% in the same period of 2020, while for the six months, it was 99.0% compared to 100.0% in 2020[161]. - The adjusted combined ratio for the three months ended June 30, 2021, was 93.0%, compared to 94.7% in the same period of 2020[161]. - The total acquisition cost ratio increased to 26.5% for the six months ended June 30, 2021, compared to 22.6% in 2020[181]. - The acquisition cost ratio for the three months ended June 30, 2021, was 28.4%, compared to 16.5% in the same period of 2020[165]. Premiums and Loss Ratios - Gross premiums written for the three months ended June 30, 2021, totaled $141.6 million, up from $116.7 million in the same period of 2020, representing a growth of 21.3%[169]. - For the six months ended June 30, 2021, gross premiums written increased by $85.0 million, or 37.5%, compared to the same period in 2020[171]. - The loss ratio for the three months ended June 30, 2021, was 65.6%, improving from 82.3% in the same period of 2020[165]. - The total loss ratio for the three months ended June 30, 2021, improved to 65.6%, a decrease of 16.7 percentage points from 82.3% in the same period in 2020[176]. - Property loss ratio decreased by 23.2 percentage points to 49.2% for the three months ended June 30, 2021, due to favorable development on prior catastrophe events[177]. Investment Performance - Total investment income for the six months ended June 30, 2021, was $20.714 million, compared to a loss of $2 million in the same period of 2020[187]. - For the six months ended June 30, 2021, the investment income gained 0.5%, a significant improvement from a loss of 7.8% in the same period of 2020[189]. - The long portfolio gained 16.0% for the six months ended June 30, 2021, while the short portfolio and macro positions lost 9.1% and 5.3%, respectively[192]. Risk Management - The company expects an increase in claim frequency in the workers' compensation class post-pandemic, despite premium rates trending flat to slightly down[150]. - The company reduced its exposure to "pure catastrophe" business, despite an increase in catastrophe premium rates, as these were deemed insufficient to compensate for associated risks[151]. - The maximum exposure to credit risk is the carrying value of financial assets, with regular evaluations of the financial condition of business partners and clients[246]. - The Company is exposed to political risk from underwriting business in foreign markets, which could adversely affect its operations and investment strategy[249]. Operational Changes - The company aims to free up capacity by reducing property, motor, and workers' compensation exposure to support higher-margin underwriting opportunities[152]. - The company plans to leverage its Innovations unit to capitalize on underwriting opportunities in specialty classes[152]. - General and administrative expenses increased by $2.3 million, or 18.1%, for the six months ended June 30, 2021, primarily due to higher expenses in the Innovations unit and personnel costs[184]. Shareholder Equity and Financing - Total shareholders' equity increased by $2.0 million to $466.8 million at June 30, 2021, primarily due to a net income of $7.1 million for the six months ended June 30, 2021[208]. - The company has $100.0 million of senior convertible notes payable, maturing on August 1, 2023, with semi-annual interest payments of $2.0 million[227]. - As of June 30, 2021, the company had a letter of credit facility with an aggregate capacity of $275.0 million, unchanged from December 31, 2020[219].