Greenlight Re(US:GLRE)2021-05-08 19:19Financial Data and Key Metrics Changes - The company's book value per share grew by 0.5% in Q1 2021, ending at $13.49 per share [26] - Net income for the quarter was $6.5 million, or $0.19 per share, primarily driven by investment gains [26] - The underwriting loss for the quarter was $2.0 million, with a combined ratio of 101.5% [26] Business Line Data and Key Metrics Changes - Gross written premiums increased by 55% to $170 million compared to Q1 2020, largely due to multi-line quota share contracts covering several Lloyd's syndicates [4][27] - The property catastrophe class saw disappointing results at the January 1 renewals, with rates not increasing sufficiently to compensate for risks [6] - The company intends to reduce exposure in motor liability and workers' compensation classes as business renews over the coming year [5] Market Data and Key Metrics Changes - The reinsurance market showed improved conditions, particularly in marine and specialty classes, while the property catastrophe class faced challenges due to new capital influx [5][6] - The company observed a slight slowing of rate momentum in the Florida market, which may affect affordability for carriers [33] Company Strategy and Development Direction - The company is focused on growing and repositioning its underwriting business to capitalize on improved market conditions [4] - There is a strong emphasis on capital deployment across various strategies, including innovation and core reinsurance business [39] - The company has identified opportunities for investments in innovative companies, such as Nimbla and Player's Health [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the underwriting portfolio's performance despite a small underwriting loss related to Storm Uri [15] - Concerns about social inflation were noted, but management believes their exposure is less than that of many peers [37] - The relationship with A.M. Best is strong, and management is optimistic about future ratings based on improved underwriting performance [41] Other Important Information - The company reported total general and administrative expenses of $7.5 million, an 11% increase over Q1 2020, primarily due to additional incentive compensation costs [28] - A new share repurchase plan has been approved, allowing the company to buy back up to $25 million of ordinary shares [29] - The company is committed to improving corporate governance following disappointing voting outcomes at the annual meeting [16][22] Q&A Session Summary Question: Insights on rate trends and loss cost trends - Management noted that while rates have moderated, they are observing similar trends to peers, with disappointment in the property catastrophe class [32] - There are concerns about affordability in the Florida market due to slowing rate momentum [33] Question: Capital deployment strategy - Management sees numerous opportunities for capital deployment across various strategies, including innovation and core reinsurance [39] Question: A.M. Best rating discussions - Management maintains a productive relationship with A.M. Best and is optimistic about future ratings based on improved underwriting performance [41]