Greenlight Capital Re (GLRE) 8-K Third Quarter 2010 Financial Results

GREENLIGHT RE ANNOUNCES

THIRD QUARTER 2010 FINANCIAL RESULTS

GRAND CAYMAN, Cayman Islands (November 2, 2010) - Greenlight Capital Re, Ltd. (NASDAQ: GLRE) today announced financial results for the third quarter ending September 30, 2010.  Greenlight Re reported a net income of $29.0 million for the third quarter of 2010 compared to net income of $32.3 million for the same period in 2009.  The fully diluted earnings per share were $0.78 for the third quarter of 2010, compared to $0.88 for the same period in 2009.

Fully diluted adjusted book value per share was $19.87 as of September 30, 2010, a 14.1% increase from $17.41 per share as of September 30, 2009.

For the nine months ended September 30, 2010, net income was $34.3 million, compared to $152.3 million for the same period in 2009.  On a fully diluted basis, net income per share was $0.92 for the nine months ended September 30, 2010, compared to $4.16 for the same period in 2009.

“We are pleased that our growth continues to come from focused opportunities identified by our underwriting team despite a challenging pricing environment,” said David Einhorn, Chairman of the Board of Directors of Greenlight Re.  “At the same time, our investment portfolio generated a reasonable return in the quarter.”

Highlights of Greenlight Re’s performance for the third quarter and nine months ended September 30, 2010 include:

·   Gross written premiums in the third quarter of 2010 were $151.2 million compared to $66.0 million in the same prior year period, while net earned premiums were $79.4 million during the third quarter of 2010 compared to $56.7 million in the comparable period in 2009.

·   The combined ratio for the nine months ended September 30, 2010 was 101.4% compared to 97.8% for the same period last year.

·   Net investment income in the third quarter of 2010 was $33.9 million, a return of 3.6% on the investment portfolio.  This compares to $32.6 million in the third quarter of 2009, when the Company reported a 4.3% return on its investment portfolio.  For the first nine months of 2010, net investment income was $39.7 million compared to $148.7 million during the comparable period in 2009.

“Our team continues to target attractive opportunities in select markets and has demonstrated success in attracting top tier clients and brokers,” said Len Goldberg, Chief Executive Officer of Greenlight Re. “Looking at the broader market, we do not anticipate a turn in general pricing in the near future.  We believe we are focused on the right sectors and are pleased with the quality of our underwriting portfolio.”

Conference Call Details

Greenlight Re will hold a live conference call to discuss its financial results for the third quarter of 2010 on Wednesday, November 3, 2010 at 9:00 a.m. Eastern time.  The conference call title is Greenlight Capital Re, Ltd. Third Quarter 2010 Earnings Call.

To participate, please dial in to the conference call at:

U.S. toll free                                1-877-317-6789

International                               1-412-317-6789

The conference call can also be accessed via webcast at:

http://www.talkpoint.com/viewer/starthere.asp?Pres=132902

A telephone replay of the call will be available from 11:00 a.m. Eastern time on November 3, 2010 until 9:00 a.m. Eastern time on November 17, 2010.  The replay of the call may be accessed by dialing 1-877-344-7529 (U.S. toll free) or 1-412-317-0088 (international), access code 445483. An audio file of the call will also be available on the Company’s website, www.greenlightre.ky.

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Regulation G

Fully diluted adjusted book value per share is a non-GAAP measure and represents basic adjusted book value per share combined with the impact from dilution of share based compensation including in-the-money stock options as of any period end.  Book value is adjusted by subtracting the amount of the non-controlling interest in joint venture from total shareholders’ equity to calculate adjusted book value.  We believe that long term growth in fully diluted adjusted book value per share is the most relevant measure of our financial performance.  In addition, fully diluted adjusted book value per share may be of benefit to our investors, shareholders and other interested parties to form a basis of comparison with other companies within the reinsurance industry.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company. These risks and uncertainties include the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market fluctuations, trends in insured and paid losses, catastrophes, regulatory and legal u ncertainties and other factors described in our annual report on Form 10-K filed with the Securities Exchange Commission.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Greenlight Capital Re, Ltd.

Greenlight Re (www.greenlightre.ky) is a NASDAQ listed company with A.M. Best "A-" (Excellent) rated specialist property and casualty reinsurance companies based in the Cayman Islands and Ireland.  Greenlight Re provides a variety of custom-tailored reinsurance solutions to the insurance, risk retention group, captive and financial marketplaces.  Established in 2004, Greenlight Re selectively offers customized reinsurance solutions in markets where capacity and alternatives are limited.  With a focus on deriving superior returns from both sides of the balance sheet, Greenlight Re's assets are managed according to a value-oriented equity-focused strategy that complements the Company's business goal of long-term growth in book value per share.

Contact:

Alex Stanton

Stanton Public Relations & Marketing

(212) 780-0701

astanton@stantonprm.com

GREENLIGHT CAPITAL RE, LTD.

 CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2010 and December 31, 2009

(expressed in thousands of U.S. dollars, except per share and share amounts)

		September 30,  2010  (unaudited)		December 31, 2009
Assets
Investments
Debt instruments, trading, at fair value	$	20,060	$		95,838
Equity securities, trading, at fair value		744,292			593,201
Other investments, at fair value		172,936			141,561
Total investments		937,288			830,600
Cash and cash equivalents		9,726			31,717
Restricted cash and cash equivalents		631,758			590,871
Financial contracts receivable, at fair value		16,491			30,117
Reinsurance balances receivable		147,745			82,748
Loss and loss adjustment expense recoverable		9,518			7,270
Deferred acquisition costs, net		85,172			34,401
Unearned premiums ceded		6,325			6,478
Notes receivable		14,491			15,424
Other assets		2,947			4,754
Total assets	$	1,861,461	$		1,634,380
Liabilities and shareholders’ equity
Liabilities
Securities sold, not yet purchased, at fair value	$	578,790	$		570,875
Financial contracts payable, at fair value		25,653			16,200
Due to prime brokers		22,822			—
Loss and loss adjustment expense reserves		161,180			137,360
Unearned premium reserves		233,491			118,899
Reinsurance balances payable		35,239			34,301
Funds withheld		22,482			14,711
Other liabilities		10,859			12,796
Performance compensation payable to related party		4,145			—
Total liabilities		1,094,661			905,142
Shareholders’ equity
Preferred share capital (par value $0.10; authorized, 50,000,000; none issued)		—			—
Ordinary share capital (Class A: par value $0.10; authorized, 100,000,000; issued and outstanding, 30,200,835 (2009: 30,063,893); Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,949 (2009: 6,254,949))		3,646			3,632
Additional paid-in capital		484,535			481,449
Non-controlling interest in joint venture		30,784			30,597
Retained earnings		247,835			213,560
Total shareholders’ equity		766,800			729,238
Total liabilities and shareholders’ equity	$	1,861,461	$		1,634,380

GREENLIGHT CAPITAL RE, LTD.

 CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 (UNAUDITED)

For the three and nine months ended September 30, 2010 and 2009

 (expressed in thousands of U.S. dollars, except per share and share amounts)

		Three months ended  September 30,				Nine months ended  September 30,
		2010		2009		2010			2009
Revenues
Gross premiums written	$	151,247	$	65,983	$	307,091		$	207,901
Gross premium ceded		(3,639	)	(2,894	)	(8,228	)		(10,725	)
Net premium written		147,608		63,089		298,863			197,176
Change in net unearned premium reserves		(68,207	)	(6,432	)	(114,745	)		(44,979	)
Net premiums earned		79,401		56,657		184,118			152,197
Net investment income		33,881		32,628		39,682			148,667
Other income (expense), net		(474	)	(145	)	(1,002	)		1,909
Total revenues		112,808		89,140		222,798			302,773
Expenses
Loss and loss adjustment expenses incurred, net		50,257		34,643		114,936			88,386
Acquisition costs, net		28,807		17,767		60,183			46,591
General and administrative expenses		3,392		4,081		11,633			13,788
Total expenses		82,456		56,491		186,752			148,765
Net income before non-controlling interest and income tax expense		30,352		32,649		36,046			154,008
Non-controlling interest in income of joint venture		(1,313	)	(380	)	(1,687	)		(1,716	)
Net income before income tax expense		29,039		32,269		34,359			152,292
Income tax expense		(25	)	(11	)	(84	)		(28	)
Net income	$	29,014	$	32,258	$	34,275		$	152,264
Earnings per share
Basic	$	0.80	$	0.89	$	0.94		$	4.21
Diluted	$	0.78	$	0.88	$	0.92		$	4.16
Weighted average number of ordinary shares used in the determination of:
Basic		36,452,224		36,286,514		36,408,859			36,202,860
Diluted		37,218,906		36,828,726		37,174,558			36,627,849

The following table provides the ratios for the nine months ended September 30, 2010 and 2009:

	Nine months ended September 30, 2010									Nine months ended September 30, 2009
	Frequency			Severity			Total			Frequency			Severity			Total
Loss ratio		68.7	%		18.5	%		62.4	%		60.8	%		49.0	%		58.1	%
Acquisition cost ratio		35.6	%		12.3	%		32.7	%		37.4	%		8.0	%		30.6	%
Composite ratio		104.3	%		30.8	%		95.1	%		98.2	%		57.0	%		88.7	%
Internal expense ratio								6.3	%								9.1	%
Combined ratio								101.4	%								97.8	%