Greenlight Re(GLRE) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Greenlight Re reported gross written premiums of $169 million, up 9.1$8 million, equating to 1.5% growth in fully diluted book value per share during the quarter, or 6% on an annualized basis [4] - The combined ratio for the quarter was reported at 99.8% [4] - Net income decreased significantly from $49.9 million in Q2 2023 to$8 million in Q2 2024 [11] - Total net investment income was $12.6 million, down from$42.2 million in Q2 last year [14] - Fully diluted book value per share grew 11.9% over the last 12 months, reaching $17.65 as of June 30, 2024 [14] Business Line Data and Key Metrics Changes - Net written premiums increased by$8.9 million, or 6.2%, to $154.1 million compared to Q2 2023, driven by the specialty book [11] - Specialty book net premiums written increased by$25.9 million, or 76.4%, mainly within marine and energy classes, with a composite ratio decreasing to 72.2% [12] - Casualty book net premiums written decreased by $7.4 million, or 8.7$9.6 million, or 36.2%, with a composite ratio of 127.5% [13] Market Data and Key Metrics Changes - U.S. convective storm losses in Q2 were estimated at over $30 billion, roughly twice the 10-year average, impacting underwriting results [5] - The renewal season as of July 1 was in line with expectations, with reinsurers remaining disciplined and pricing attractive [6] Company Strategy and Development Direction - The company remains positive about growth opportunities in property and specialty classes while being cautious in casualty lines [6] - Greenlight Re is focusing on optimizing and driving return on equity (ROE) as a primary goal [20] - The allocation to the Solace Glass fund was increased from 60$40.7 million of cash from operations during the first half of the year [14] - Total G&A expenses increased to $10.5 million, primarily due to headcount growth [13] - The company will host its 2024 Investor Day on November 19 in New York City [15] Q&A Session Summary Question: How is the company thinking about growing the insurance portfolio in light of macroeconomic conditions? - Management noted the macro backdrop includes heightened uncertainty, but the company feels resilient due to its portfolio strategies [16][17] Question: What are the perspectives on current capital allocation and the higher allocation to the investment portfolio? - Management highlighted the superior risk-adjusted returns of the investment portfolio and the decision to increase the allocation to Solace Glass as economically smart [22][23] Question: What is the outlook for further increases in the Solace Glass allocation? - Management indicated that future increases would be gradual, contingent on continued improvement in liquidity and performance [28]