Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 03, 2019 | |
Document and Entity Information [Line Items] | ||
Entity Registrant Name | GREENLIGHT CAPITAL RE, LTD. | |
Entity Central Index Key | 0001385613 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Class A | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 30,463,046 | |
Common Class B | ||
Document and Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 6,254,715 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Investments | ||
Investment in related party investment fund | $ 246,392 | $ 235,612 |
Equity securities, trading, at fair value | 0 | 36,908 |
Other investments | 11,172 | 11,408 |
Total investments | 257,564 | 283,928 |
Cash and cash equivalents | 9,500 | 18,215 |
Restricted cash and cash equivalents | 730,155 | 685,016 |
Reinsurance balances receivable | 326,618 | 300,251 |
Loss and loss adjustment expenses recoverable | 46,196 | 43,705 |
Deferred acquisition costs | 52,657 | 49,929 |
Unearned premiums ceded | 24,253 | 24,981 |
Notes receivable | 29,464 | 26,861 |
Other assets | 2,849 | 2,559 |
Total assets | 1,479,256 | 1,435,445 |
Liabilities | ||
Due to related party investment fund | 0 | 9,642 |
Loss and loss adjustment expense reserves | 507,931 | 482,662 |
Unearned premium reserves | 226,968 | 211,789 |
Reinsurance balances payable | 150,071 | 139,218 |
Funds withheld | 15,056 | 16,418 |
Other liabilities | 4,119 | 5,067 |
Convertible senior notes payable | 90,796 | 91,185 |
Total liabilities | 994,941 | 955,981 |
Redeemable non-controlling interest in related party joint venture | 0 | 1,692 |
Equity | ||
Preferred share capital (par value $0.10; authorized, 50,000,000; none issued) | 0 | 0 |
Ordinary share capital (Class A: par value $0.10; authorized, 100,000,000; issued and outstanding, 30,463,046 (2018: 30,130,214): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,715 (2018: 6,254,715)) | 3,672 | 3,638 |
Additional paid-in capital | 500,814 | 499,726 |
Retained earnings (deficit) | (20,171) | (26,077) |
Shareholders’ equity attributable to Greenlight Capital Re, Ltd. | 484,315 | 477,287 |
Non-controlling interest in related party joint venture | 0 | 485 |
Total equity | 484,315 | 477,772 |
Total liabilities, redeemable non-controlling interest and equity | $ 1,479,256 | $ 1,435,445 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Stockholders’ Equity: | ||
Preferred share capital, par value (in dollars per share) | $ 0.1 | $ 0.1 |
Preferred share capital, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred share capital, issued (in shares) | 0 | 0 |
Common Class A | ||
Stockholders’ Equity: | ||
Ordinary share capital, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Ordinary share capital, authorized (in shares) | 100,000,000 | 100,000,000 |
Ordinary share capital, issued (in shares) | 30,463,046 | 30,130,214 |
Ordinary share capital, outstanding (in shares) | 30,463,046 | 30,130,214 |
Common Class B | ||
Stockholders’ Equity: | ||
Ordinary share capital, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Ordinary share capital, authorized (in shares) | 25,000,000 | 25,000,000 |
Ordinary share capital, issued (in shares) | 6,254,715 | 6,254,715 |
Ordinary share capital, outstanding (in shares) | 6,254,715 | 6,254,715 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | ||
Gross premiums written | $ 162,560 | $ 175,125 |
Gross premiums ceded | (21,401) | (29,843) |
Net premiums written | 141,159 | 145,282 |
Change in net unearned premium reserves | (15,797) | 562 |
Net premiums earned | 125,362 | 145,844 |
Income (loss) from investment in related party investment fund [net of related party expenses of $5,432 and $0, respectively] | 30,756 | 0 |
Net investment income (loss) [net of related party expenses of $0 and $4,454, respectively] | 1,567 | (145,216) |
Other income (expense), net | 1,069 | (487) |
Total revenues | 158,754 | 141 |
Expenses | ||
Net loss and loss adjustment expenses incurred | 122,865 | 95,824 |
Acquisition costs | 21,526 | 44,209 |
General and administrative expenses | 6,840 | 5,956 |
Interest expense | 1,544 | 0 |
Total expenses | 152,775 | 145,989 |
Income (loss) before income tax | 5,979 | (145,848) |
Income tax (expense) benefit | (73) | 770 |
Net income (loss) | 5,906 | (145,078) |
Loss (income) attributable to non-controlling interest in related party joint venture | 0 | 2,326 |
Net income (loss) attributable to Greenlight Capital Re, Ltd. | $ 5,906 | $ (142,752) |
Earnings (loss) per share | ||
Basic (in dollars per share) | $ 0.16 | $ (3.85) |
Diluted (in dollars per share) | $ 0.16 | $ (3.85) |
Weighted average number of ordinary shares used in the determination of earnings and loss per share | ||
Basic (in shares) | 35,972,665 | 37,087,169 |
Diluted (in shares) | 36,364,358 | 37,087,169 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Parenthetical) - Board of Directors Chairman - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Limited Partner | ||
Management fees | $ 5,432 | $ 0 |
Investment Advisory Agreement | ||
Management fees | $ 0 | $ 4,454 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Ordinary share capital | Additional paid-in capital | Retained earnings (deficit) | Shareholders’ equity attributable to Greenlight Capital Re, Ltd. | Non-controlling interest in joint venture |
Balance at Dec. 31, 2017 | $ 844,257 | $ 3,736 | $ 503,316 | $ 324,272 | $ 831,324 | $ 12,933 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issue of Class A ordinary shares, net of forfeitures | 19 | 19 | 19 | |||
Share-based compensation expense | 1,254 | 1,254 | 1,254 | |||
Change in non-controlling interest in related party joint venture | 1,862 | 1,862 | ||||
Net income (loss) attributable to Greenlight Capital Re, Ltd. | (142,752) | (142,752) | (142,752) | |||
Balance at Mar. 31, 2018 | 700,916 | 3,755 | 504,570 | 181,520 | 689,845 | 11,071 |
Balance at Dec. 31, 2018 | 477,772 | 3,638 | 499,726 | (26,077) | 477,287 | 485 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issue of Class A ordinary shares, net of forfeitures | 34 | 34 | 34 | |||
Share-based compensation expense | 1,088 | 1,088 | 1,088 | |||
Change in non-controlling interest in related party joint venture | 485 | 485 | ||||
Net income (loss) attributable to Greenlight Capital Re, Ltd. | 5,906 | 5,906 | 5,906 | |||
Balance at Mar. 31, 2019 | $ 484,315 | $ 3,672 | $ 500,814 | $ (20,171) | $ 484,315 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash provided by (used in) operating activities | ||
Net income (loss) | $ 5,906 | $ (145,078) |
Adjustments to reconcile net income or loss to net cash provided by (used in) operating activities | ||
Income (loss) from equity method investments | (431) | 0 |
Net change in unrealized gains and losses on investments and financial contracts | 14,150 | 3,695 |
Net realized (gains) losses on investments and financial contracts | (14,150) | 140,255 |
Foreign exchange (gains) losses on investments | (408) | 387 |
Share-based compensation expense | 1,122 | 1,273 |
Amortization and interest expense | (389) | 0 |
Depreciation expense | 7 | 92 |
Net change in | ||
Reinsurance balances receivable | (26,367) | (24,494) |
Loss and loss adjustment expenses recoverable | (2,491) | (10,023) |
Deferred acquisition costs | (2,728) | 2,087 |
Unearned premiums ceded | 728 | (330) |
Other assets | (297) | (680) |
Loss and loss adjustment expense reserves | 25,269 | 20,219 |
Unearned premium reserves | 15,179 | (60) |
Reinsurance balances payable | 10,853 | (4,946) |
Funds withheld | (1,362) | (7,969) |
Other liabilities | (948) | (3,599) |
Net cash provided by (used in) operating activities | (7,113) | (29,171) |
Investing activities | ||
Proceeds from redemptions from related party investment fund | 57,169 | 0 |
Contributions to related party investment fund | (520) | 0 |
Purchases of investments | 0 | (167,809) |
Sales of investments, trading | 0 | 431,737 |
Payments for financial contracts | 0 | (85,146) |
Proceeds from financial contracts | 0 | 18,665 |
Securities sold, not yet purchased | 0 | 139,683 |
Dispositions of securities sold, not yet purchased | 0 | (448,376) |
Change in due to related party investment fund | (9,642) | 0 |
Change in due to prime brokers and other financial institutions | 0 | (97,900) |
Net change in notes receivable | (2,603) | (2,511) |
Non-controlling interest contribution into (withdrawal from) related party joint venture, net | (1,278) | 0 |
Net cash provided by (used in) investing activities | 43,126 | (211,657) |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 411 | 1,239 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 36,424 | (239,589) |
Cash, cash equivalents and restricted cash at beginning of the period (see Note 2) | 703,231 | 1,531,098 |
Cash, cash equivalents and restricted cash at end of the period (see Note 2) | 739,655 | 1,291,509 |
Supplementary information | ||
Interest paid in cash | 1,933 | 3,867 |
Non-cash transfer of investments (Note 3) | 36,673 | 0 |
Non-cash addition of right-of-use asset | 323 | 0 |
Limited Partner | ||
Adjustments to reconcile net income or loss to net cash provided by (used in) operating activities | ||
Income (loss) from equity method investments | $ (30,756) | $ 0 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION Greenlight Capital Re, Ltd. (“GLRE”) was incorporated as an exempted company under the Companies Law of the Cayman Islands on July 13, 2004. GLRE’s principal wholly-owned subsidiary, Greenlight Reinsurance, Ltd. (“Greenlight Re”), provides global specialty property and casualty reinsurance. Greenlight Re has a Class D insurer license issued in accordance with the terms of The Insurance Law, 2010 and underlying regulations thereto (the “Law”) and is subject to regulation by the Cayman Islands Monetary Authority, in terms of the Law. Greenlight Re commenced underwriting in April 2006. Verdant Holding Company, Ltd. (“Verdant”), a wholly-owned subsidiary of GLRE, was incorporated in 2008 in the state of Delaware. During 2010, GLRE established Greenlight Reinsurance Ireland, Designated Activity Company (“GRIL”), a wholly-owned reinsurance subsidiary based in Dublin, Ireland. GRIL is authorized as a non-life reinsurance undertaking in accordance with the provisions of the European Union (Insurance and Reinsurance) Regulations 2015. GRIL provides multi-line property and casualty reinsurance capacity to the European broker market and provides GLRE with an additional platform to serve clients located in Europe and North America. As used herein, the “Company” refers collectively to GLRE and its consolidated subsidiaries. Prior to January 2, 2019, the Company and its reinsurance subsidiaries were party to a joint venture agreement (the “venture agreement”) with DME Advisors, LP (“DME Advisors”) and DME Advisors LLC (“DME”) under which the Company, its reinsurance subsidiaries and DME were participants in a joint venture (the “Joint Venture”) for the purpose of managing certain jointly held assets. The Joint Venture was consolidated in accordance with ASC 810, Consolidation (ASC 810). DME and DME Advisors are related to the Company and each is an affiliate of David Einhorn, Chairman of the Company’s Board of Directors. On September 1, 2018, the Company entered into an amended and restated exempted limited partnership agreement (the “SILP LPA”) of Solasglas Investments, LP (“SILP”), with DME Advisors II, LLC (“DME II”), as General Partner, Greenlight Re, GRIL and the initial limited partner (each, a “Partner”). The SILP LPA, in conjunction with a participation agreement, replaced the venture agreement and assigned and/or transferred Greenlight Re’s and GRIL’s invested assets in the Joint Venture to SILP. The Joint Venture was terminated on January 2, 2019 by which date all assets were transferred to SILP (see Note 3 for details). The Class A ordinary shares of GLRE are listed on Nasdaq Global Select Market under the symbol “GLRE.” These unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2018 . In the opinion of management, these unaudited condensed consolidated financial statements reflect all of the normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position and results of operations as of the dates and for the periods presented. The results for the three months ended March 31, 2019 are not necessarily indicative of the results expected for the full calendar year. Reclassifications and changes in description Changes in the condensed consolidated statements of operations and statements of cash flows The Company’s condensed consolidated statements of operations previously used the caption “Net income (loss) including non-controlling interest” to represent the net income (loss) before deducting non-controlling interest. Similarly, the caption “Net income (loss)” was used to represent the net income (loss) available to the Company after deducting non-controlling interest. Effective from the year ended December 31, 2018, the Company amended the captions as follows: • The caption “Net income (loss) including non-controlling interest” was renamed “Net income (loss).” • The caption “Net income (loss)” was renamed “Net income (loss) attributable to Greenlight Capital Re, Ltd.” In addition, the Company’s condensed consolidated statements of cash flows previously started with net income (loss) excluding income (loss) from non-controlling interest. The net income (loss) from non-controlling interest was presented as a reconciling item to the net cash flow from operating activities. Effective from the year ended December 31, 2018, the Company amended the presentation to start with “Net income (loss)” which includes income from non-controlling interest. The prior period comparative information has been reclassified to conform to the current period presentation. The reclassification had no impact on the Company’s results of operations, financial position, earnings (loss) per share or net cash provided by (used in) operating activities. Other reclassification Effective from the second quarter of 2018, contracts that cover more than one line of business are grouped as “multi-line.” The prior period comparative information in Note 11 has been reclassified to conform to the current period presentation. There was no material impact on the presentation of the Company’s results of operations or financial condition as a result of this reclassification. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES There have been no changes to the Company’s significant accounting policies as described in its Annual Report on Form 10-K for the year ended December 31, 2018 . Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the period. Actual results could differ from these estimates. Restricted Cash and Cash Equivalents Restricted cash and cash equivalent balances are held to collateralize regulatory trusts and letters of credit issued to cedents (see Note 10 ). The amount of cash encumbered varies depending on the collateral required by those cedents. The following table reconciles the cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total presented in the condensed consolidated statements of cash flows: March 31, 2019 December 31, 2018 ($ in thousands) Cash and cash equivalents $ 9,500 $ 18,215 Restricted cash and cash equivalents 730,155 685,016 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows $ 739,655 $ 703,231 Notes Receivable Notes receivable represent promissory notes receivable from third parties. These notes are recorded at cost plus accrued interest, if any, which approximates the fair value. Interest income and realized gains or losses on the sale of notes receivable are included in the caption “Net investment income (loss)” in the Company’s condensed consolidated statements of operations. The Company regularly reviews all notes receivable individually for impairment and records valuation allowance provisions for uncollectible and non-performing notes. When the recorded value of a note receivable is not considered impaired but there is uncertainty as to the collection of interest contractually due, the Company places the note on non-accrual status. For notes receivable placed on non-accrual status, the notes are presented excluding any accrued interest amount. The Company resumes the accrual of interest on a note when none of the principal or interest remains past due, and the Company expects to collect the remaining contractual principal and interest. Interest collected on notes that are placed on non-accrual status is recorded as interest income when collected, provided that the recorded value of the note is deemed to be fully collectible. Where doubt exists as to the collectability of the remaining recorded value of the notes placed on non-accrual status, any payments received are applied to reduce the recorded value of the notes. At March 31, 2019 , $8.7 million of notes receivable (net of any valuation allowance) were on non-accrual status ( December 31, 2018 : $9.8 million ) and payments received were applied to reduce the recorded value of the notes. At March 31, 2019 and December 31, 2018 , $0.2 million of accrued interest was included in the caption “Notes receivable” in the Company’s condensed consolidated balance sheets. Management has assessed the recorded values of the notes receivable, net of valuation allowance, at March 31, 2019 and December 31, 2018 , to be fully collectible. Deposit Assets and Liabilities The Company applies deposit accounting to reinsurance contracts that do not transfer sufficient insurance risk to merit reinsurance accounting. Under deposit accounting, an asset or liability is recognized based on the consideration paid or received. The deposit asset or liability balance is subsequently adjusted using the interest method with a corresponding income or expense recorded in the Company’s condensed consolidated statements of operations under the caption “Other income (expense).” The Company’s deposit assets and liabilities are recorded in the Company’s condensed consolidated balance sheets in the caption “Reinsurance balances receivable” and “Reinsurance balances payable,” respectively. At March 31, 2019 , deposit assets and deposit liabilities were $12.2 million and $57.3 million , respectively ( December 31, 2018 : $11.9 million and $52.9 million , respectively). For the three months ended March 31, 2019 , interest income and expense on deposit accounted contracts was $0.0 million and $1.0 million , respectively For three months ended March 31, 2018 , interest income and expense on deposit accounted contracts was $0.2 million and $0.1 million , respectively. Other Assets Other assets consist primarily of prepaid expenses, fixed assets, right-of-use lease assets, other receivables and deferred tax assets. Other Liabilities Other liabilities consist primarily of accruals for professional fees, employee bonuses and lease liabilities. Earnings (Loss) Per Share The Company’s unvested restricted stock awards, which contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are considered “participating securities” for the purposes of calculating earnings (loss) per share. Basic earnings (loss) per share is calculated on the basis of the weighted average number of common shares and participating securities outstanding during the period. Diluted earnings (or loss) per share includes the dilutive effect of the following: • Restricted Stock Units (“RSUs”) issued that would convert to common shares upon vesting; • additional potential common shares issuable when stock options are exercised, determined using the treasury stock method; and • those common shares with the potential to be issued by virtue of convertible debt and other such convertible instruments, determined using the treasury stock method. Diluted earnings (or loss) per share contemplates a conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share. In the event of a net loss, all RSUs, stock options outstanding, convertible debt and participating securities are excluded from the calculation of both basic and diluted loss per share as their inclusion would be anti-dilutive. The table below presents the shares outstanding for the purposes of its calculation of earnings (loss) per share for the three months ended March 31, 2019 and 2018: Three months ended March 31 2019 2018 Weighted average shares outstanding - basic 35,972,665 37,087,169 Effect of dilutive employee and director share-based awards 391,693 — Weighted average shares outstanding - diluted 36,364,358 37,087,169 Anti-dilutive stock options outstanding 935,627 1,015,627 Participating securities excluded from calculation of loss per share — 460,155 Taxation Under current Cayman Islands law, no corporate entity, including GLRE and Greenlight Re, is obligated to pay taxes in the Cayman Islands on either income or capital gains. The Company has an undertaking from the Governor-in-Cabinet of the Cayman Islands, pursuant to the provisions of the Tax Concessions Law, as amended, that, in the event that the Cayman Islands enacts any legislation that imposes tax on profits, income, gains or appreciations, or any tax in the nature of estate duty or inheritance tax, such tax will not be applicable to GLRE, Greenlight Re nor their respective operations, or to the Class A or Class B ordinary shares or related obligations, before February 1, 2025. Verdant is incorporated in Delaware and therefore is subject to taxes in accordance with the U.S. federal rates and regulations prescribed by the U.S. Internal Revenue Service (“IRS”). Verdant’s taxable income is generally expected to be taxed at a marginal rate of 21% ( 2018 : 21% ). Verdant’s tax years 2014 and beyond remain open and subject to examination by the IRS. GRIL is incorporated in Ireland and therefore is subject to the Irish corporation tax rate of 12.5% on its trading income, and 25% on its non-trading income. The Company evaluates its deferred tax assets and records a valuation allowance to the extent that the Company considers it more likely than not that all or a portion of the deferred tax asset will not be realized in the future. Other than the evaluation of a valuation allowance for deferred tax assets, the Company has not taken any income tax positions that are subject to significant uncertainty that is reasonably likely to have a material impact on the Company. Recent Accounting Pronouncements Recently Issued Accounting Standards Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” . Under the new guidance, lessees are required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Leases (Topic 842) is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted Leases (Topic 842) during the first quarter of 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company has adopted the following practical expedients: • Carry forward of historical lease classifications and current accounting treatment for existing land easements; • Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less; and • Hindsight practical expedient for remeasuring the lease terms on the basis of information obtained between entering into the lease and adopting Leases (Topic 842). Adoption of Leases (Topic 842) resulted in the recognition of operating lease right-of-use asset and corresponding lease liability of $0.3 million which were included in the Company’s condensed consolidated balance sheets under the captions “Other Assets” and “Other Liabilities” as of March 31, 2019. Recently Issued Accounting Standards Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments” (“ASU 2016-13”) . ASU 2016-13 amended the guidance on reporting credits losses and affects loans, debt securities, trade receivables, reinsurance recoverables and other financial assets that have the contractual right to receive cash. The amendment is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for any organization for annual periods beginning after December 15, 2018 and interim periods within those annual periods. The Company is in the process of evaluating the impact of the requirements of ASU 2016-13 on the Company’s consolidated financial statements and anticipates implementing ASU 2016-13 during 2020. |
INVESTMENT IN RELATED PARTY INV
INVESTMENT IN RELATED PARTY INVESTMENT FUND | 3 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN RELATED PARTY INVESTMENT FUND | INVESTMENT IN RELATED PARTY INVESTMENT FUND Effective September 1, 2018, Greenlight Re and GRIL entered into the SILP LPA with DME II. In accordance with the SILP LPA, DME II serves as the general partner of SILP. On September 1, 2018, SILP entered into a SILP investment advisory agreement (“IAA”) with DME Advisors pursuant to which DME Advisors is the investment manager for SILP. In addition, on September 1, 2018, Greenlight Re and GRIL, together the “GLRE Limited Partners,” and SILP executed a Participation Agreement pursuant to which the GLRE Limited Partners transferred a participation interest in the assets that were subject to the Joint Venture (except for certain assets that were mutually agreed and excluded from participating) to SILP (collectively referred to as the “LP Transaction.”) SILP issued limited partner interests to the GLRE Limited Partners proportionate to and based on the net asset value transferred by each such entity effective September 1, 2018. The Joint Venture was terminated on January 2, 2019, the date by which all assets were transferred to SILP in accordance with the SILP LPA. The Company has concluded that SILP qualifies as a variable interest entity (“VIE”) under U.S. GAAP. In assessing its interest in SILP, the Company noted the following: • DME II serves as SILP’s general partner and has the power of appointing the investment manager. The Company does not have the power to appoint, change or replace the investment manager or the general partner except “for cause.” Neither of the GLRE Limited Partners can participate in the investment decisions of SILP as long as SILP adheres to the investment guidelines provided within the SILP LPA. For these reasons, the GLRE Limited Partners are not considered to have substantive participating rights or kick-out rights • DME II holds an interest in excess of 10% of SILP’s net assets which the Company considers to represent an obligation to absorb losses and a right to receive benefits of SILP that are significant to SILP. Consequently, the Company has concluded that DME II’s interests, and not the Company’s, meet both the “power” and “benefits” criteria associated with VIE accounting guidance, and therefore DME II is SILP’s primary beneficiary. The Company’s investment in SILP is presented on the condensed consolidated balance sheets in the caption “Investment in related party investment fund.” The Company accounted for the transfer of the investment assets to SILP as a sale. The underlying investment liabilities were extinguished from the Company’s condensed consolidated balance sheet as they were either settled, novated or legally transferred to SILP as part of the LP Transaction. There were no net gains or losses resulting from the transfer of net assets, and there was no cash paid or received by the Company as part of the LP Transaction. At December 31, 2018, certain assets that were subject to the Participation Agreement for which the GLRE Limited Partners received an interest in SILP had not transferred legal title to SILP. The Company accounted for those assets as collateralized borrowing and recorded a liability in the caption, “Due to related party investment fund,” relating to the Company’s obligation to transfer the assets to SILP. These assets were transferred to SILP during the three months ended March 31, 2019. The Company’s maximum exposure to loss relating to SILP is limited to the net asset value of the GLRE Limited Partners’ investment in SILP. As of March 31, 2019 , the net asset value of the GLRE Limited Partners’ investment in SILP was $246.4 million , representing 82.8% of SILP’s total net assets. The remaining 17.2% of SILP’s total net assets was held by DME II. The investment in SILP is recorded at the GLRE Limited Partners’ share of the net asset value of SILP as reported by SILP’s third-party administrator. The GLRE Limited Partners can redeem their assets from SILP for operational purposes by providing three business days’ notice to DME II. The majority of SILP’s long investments are composed of publicly-traded equity securities and other holdings, which can be readily liquidated to meet any GLRE Limited Partner’s redemption requests. The Company’s share of the change in the net asset value of SILP for the three months ended March 31, 2019 was income of $30.8 million , and shown in the caption “Income (loss) from investment in related party investment fund” in the Company’s condensed consolidated statements of operations. During the three months ended March 31, 2019 , the Company transferred the rights to $36.7 million of remaining net investments from Greenlight RE and GRIL’s Joint Venture investment accounts to SILP in exchange for limited partnership interests of the same amount, resulting in no net gain or loss. The summarized financial information of SILP is presented below. Summarized Statement of Operations of Solasglas Investments, LP Three months ended March 31, 2019 ($ in thousands) Investment income Dividend income (net of withholding taxes) $ 1,240 Interest income 686 Total Investment income 1,926 Expenses Management fee (2,014 ) Interest (1,374 ) Dividends (1,070 ) Professional fees and other (380 ) Total expenses (4,838 ) Net investment income (loss) (2,912 ) Realized and change in unrealized gains (losses) on investments Net realized gain (loss) on investments (7,175 ) Net change in unrealized appreciation on investments 49,753 Net gain (loss) on investments 42,578 Net income (loss) $ 39,666 GLRE Limited Partners’ share of net income (loss) 1 $ 30,756 1 Net of management fees of $2.0 million and a performance allocation of $3.4 million . See Note 9 for further details. Summarized Statement of Assets and Liabilities of Solasglas Investments, LP March 31, 2019 December 31, 2018 ($ in thousands) Assets Investments, at fair value $ 506,080 $ 464,461 Due from brokers 110,699 77,821 Cash and cash equivalents 1,705 13,200 Interest and dividends receivable 1,910 2,358 Total assets 620,394 557,840 Liabilities and partners’ capital Liabilities Investments sold, not yet purchased, at fair value (284,087 ) (225,072 ) Notes Payable (30,000 ) (30,000 ) Due to brokers (7,069 ) (23,951 ) Interest and dividends payable (1,456 ) (1,238 ) Other liabilities (79 ) (169 ) Total liabilities (322,691 ) (280,430 ) Net Assets $ 297,703 $ 277,410 GLRE Limited Partners’ share of Net Assets $ 246,392 $ 235,612 |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS Investments Equity securities, trading At December 31, 2018 , the following long positions were included in the caption “Equity securities, trading”: Cost Unrealized Unrealized Fair ($ in thousands) Equities – listed $ 50,521 $ 1,015 $ (14,628 ) $ 36,908 Total equity securities $ 50,521 $ 1,015 $ (14,628 ) $ 36,908 During the three months ended March 31, 2019 , these equity positions were transferred to SILP. Other Investments “Other investments” include private securities and unlisted funds and investment accounted for under the equity method. The tables below present the Company’s other investments as at March 31, 2019 and December 31, 2018 : March 31, 2019 Cost Unrealized Unrealized Fair ($ in thousands) Private investments and unlisted equity funds $ 5,718 $ 23 $ (3 ) $ 5,738 Investment accounted for under the equity method NA NA NA 5,434 Total Other investments $ 11,172 December 31, 2018 Cost Unrealized Unrealized Fair ($ in thousands) Private investments and unlisted equity funds $ 6,672 $ — $ (267 ) $ 6,405 Investment accounted for under the equity method NA NA NA 5,003 Total Other investments $ 6,672 $ — $ (267 ) $ 11,408 The Company has invested in AccuRisk Holdings LLC (“AccuRisk”), a Chicago, Illinois-based managing general underwriter (MGU) focused on employee and health insurance benefits. The Company’s involvement in AccuRisk includes providing capital and funding for its expansion and providing reinsurance to business produced by the MGU. At March 31, 2019 and December 31, 2018 , the Company held a 58% interest in AccuRisk, and had also provided it with a $6.0 million credit facility. The Company has determined that AccuRisk is a variable interest entity, of which the Company is not the primary beneficiary. The Company has accounted for its investment in AccuRisk under the equity method and included it in the caption “Other Investments” in Company’s condensed consolidated balance sheets. The Company’s maximum exposure to loss relating to AccuRisk is limited to the carrying amount of its investment in the entity plus any loans outstanding to it (see Note 10 ). For the three months ended March 31, 2019 , the Company’s share of AccuRisk’s net income (loss) was 0.4 million ( 2018 : nil ) which was included in the caption “Net investment income (loss)” in the Company’s condensed consolidated statements of operations. Fair Value Hierarchy The fair value of a financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels, with Level 3 being the lowest. As of March 31, 2019 , the Company did not hold any instruments assigned a Level within the fair value hierarchy. The Company’s investment in the related party investment fund is measured at fair value using the net asset value practical expedient, and is therefore not classified within the fair value hierarchy. (See Note 3 for further details.) The Company carries its private investments and unlisted equity funds in accordance with the measurement alternative under ASU 2016-01 and ASU 2018-03, which permits entities to measure certain types of equity securities without readily determinable fair values at their cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. At March 31, 2019 , the carrying value of these private equity securities was $5.7 million (December 31, 2018 : $5.7 million ). There were no meaningful upward or downward adjustments to the carrying values of the private equity securities for the three months ended March 31, 2019 . The carrying value of investments accounted for under the equity method is based on the Company's share of the investees’ net assets. The following table presents the Company’s investments, categorized by the level of the fair value hierarchy as of December 31, 2018 : Fair value measurements as of December 31, 2018 Description Quoted prices in Significant other Significant Total ($ in thousands) Assets: Listed equity securities $ 36,908 $ — $ — $ 36,908 Private and unlisted equity securities — — 664 664 $ 36,908 $ — $ 664 $ 37,572 Investment in related party investment fund measured at net asset value (1) (2) 235,612 Equities without readily determinable fair values for which measurement alternative is applied 5,741 Investment accounted for under the equity method 5,003 Total investments $ 283,928 (1) Investments measured at fair value using the net asset value practical expedient have not been classified in the fair value hierarchy. The fair value amounts are presented in the above table to facilitate reconciliation to the condensed consolidated balance sheets. (2) See Note 3 “Investment in related party investment fund.” During the three months ended March 31, 2019 , the Company’s securities measured at fair value using Level 3 inputs, which had a fair value of $0.6 million , were transferred to SILP in connection with the LP Transaction. (See Note 3.) The following tables present the reconciliation of the balances for all investments measured at fair value using significant unobservable inputs (Level 3) for the three months ended March 31, 2018 : Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Three months ended March 31, 2018 Assets Debt instruments Private and unlisted equity securities Total ($ in thousands) Beginning balance $ 880 $ 6,108 $ 6,988 Purchases — — — Total realized and unrealized gains (losses) and amortization included in earnings, net 5 27 32 Transfers into Level 3 — — — Transfers out of Level 3 — — — Ending balance $ 885 $ 6,135 $ 7,020 There were no transfers between Level 1, Level 2 or Level 3 during the three months ended March 31, 2019 or the three months ended March 31, 2018 . |
LOSS AND LOSS ADJUSTMENT EXPENS
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES | 3 Months Ended |
Mar. 31, 2019 | |
Insurance Loss Reserves [Abstract] | |
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES | LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES There were no significant changes in the actuarial methodology or assumptions relating to the Company’s loss and loss adjustment expense reserves for the three months ended March 31, 2019 . At March 31, 2019 and December 31, 2018 , loss and loss adjustment expense reserves were composed of the following: Consolidated March 31, 2019 December 31, 2018 ($ in thousands) Case reserves $ 197,483 $ 211,910 IBNR 310,448 270,752 Total $ 507,931 $ 482,662 At March 31, 2019 and December 31, 2018 , the loss and loss adjustment expense reserves relating to health were $26.3 million and $24.5 million , respectively. The changes in the outstanding loss and loss adjustment expense reserves for health claims for the three months ended March 31, 2019 and 2018 are as follows: Health 2019 2018 ($ in thousands) Gross balance at January 1 $ 24,502 $ 22,181 Less: Losses recoverable — — Net balance at January 1 24,502 22,181 Incurred losses related to: Current year 11,142 11,992 Prior years 2,159 830 Total incurred 13,301 12,822 Paid losses related to: Current year (1,502 ) (1,872 ) Prior years (9,972 ) (9,231 ) Total paid (11,474 ) (11,103 ) Foreign currency revaluation — — Net balance at March 31 26,329 23,900 Add: Losses recoverable — — Gross balance at March 31 $ 26,329 $ 23,900 A summary of changes in outstanding loss and loss adjustment expense reserves for all lines of business consolidated for the three months ended March 31, 2019 and 2018 is as follows: Consolidated 2019 2018 ($ in thousands) Gross balance at January 1 $ 482,662 $ 464,380 Less: Losses recoverable (43,705 ) (29,459 ) Net balance at January 1 438,957 434,921 Incurred losses related to: Current year 87,812 98,558 Prior years 35,053 (2,734 ) Total incurred 122,865 95,824 Paid losses related to: Current year (87,375 ) (17,161 ) Prior years (13,277 ) (69,703 ) Total paid (100,652 ) (86,864 ) Foreign currency revaluation 565 1,236 Net balance at March 31 461,735 445,117 Add: Losses recoverable 46,196 39,482 Gross balance at March 31 $ 507,931 $ 484,599 For the three months ended March 31, 2019 , the estimate of net losses incurred relating to prior accident years increased by $35.1 million , an increase that originated primarily from private passenger automobile contracts. These unanticipated auto losses were the result of adverse rulings that affected a significant number of loss events that occurred in Florida between 2015 and early 2018, including many claims that had previously been considered closed. The net financial impact of the prior period adverse loss development for the three months ended March 31, 2019 , taking into account earned reinstatement premiums assumed and ceded, adjustments to assumed and ceded acquisition costs and adjustments to deposit accounted contracts, was a loss of $25.7 million . For the three months ended March 31, 2018 , the estimate of net losses incurred relating to prior accident years decreased by $2.7 million , which primarily related to favorable loss development relating to 2017 hurricanes resulting from updated reporting received from cedents and, to a lesser extent, resulting from favorable claims experience associated with mortgage contracts. The net financial impact of the prior period favorable loss development for the three months ended March 31, 2018 , taking into account earned reinstatement premiums assumed and ceded, adjustments to assumed and ceded acquisition costs and adjustments to deposit accounted contracts associated with the prior period contracts, was a loss of $1.7 million . |
RETROCESSION
RETROCESSION | 3 Months Ended |
Mar. 31, 2019 | |
Reinsurance Disclosures [Abstract] | |
RETROCESSION | RETROCESSION The Company, from time to time, purchases retrocessional coverage for one or more of the following reasons: to manage its overall exposure, to reduce its net liability on individual risks, to obtain additional underwriting capacity and to balance its underwriting portfolio. Loss and loss adjustment expenses recoverable from retrocessionaires are recorded as assets. For the three months ended March 31, 2019 , the Company’s earned ceded premiums were $22.2 million ( 2018 : $29.5 million ). For the three months ended March 31, 2019 , loss and loss adjustment expenses incurred of $122.9 million ( 2018 : $95.8 million ) reported on the condensed consolidated statements of operations are net of loss and loss expenses recovered of $26.3 million ( 2018 : $19.4 million ). Retrocession contracts do not relieve the Company from its obligations to the insureds. Failure of retrocessionaires to honor their obligations could result in losses to the Company. At March 31, 2019 , the Company’s loss reserves recoverable consisted of (i) $34.6 million ( December 31, 2018 : $34.3 million ) from unrated retrocessionaires, which were secured by cash and collateral held in trust accounts for the benefit of the Company and (ii) $11.6 million ( December 31, 2018 : $9.4 million ) from retrocessionaires rated A- or above by A.M. Best. The Company regularly evaluates the financial condition of its retrocessionaires to assess the ability of the retrocessionaires to honor their respective obligations. At March 31, 2019 and December 31, 2018 , no provision for uncollectible losses recoverable was considered appropriate. |
SENIOR CONVERTIBLE NOTES
SENIOR CONVERTIBLE NOTES | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
SENIOR CONVERTIBLE NOTES | SENIOR CONVERTIBLE NOTES On August 7, 2018, the Company issued $100.0 million of senior unsecured convertible notes (the “Notes”), which mature on August 1, 2023. The Notes bear interest at 4.0% payable semi-annually on February 1 and August 1 of each year beginning on February 1, 2019. Note holders have the option, under certain conditions, to redeem the Notes prior to maturity. If converted at March 31, 2019 , the face value of the Notes would be cash settled and conversion settlement would result in no shares issued by the Company due to the share price at March 31, 2019 being lower than the conversion price of $17.19 per share. If Notes are converted by the holder, the Company shall have the option to settle the conversion obligation in cash, ordinary shares of the Company, or a combination thereof pursuant to the terms of the indenture governing the Notes. The Company has therefore bifurcated the Notes into liability and equity components. The Company’s effective borrowing rate for non-convertible debt at the time of issuance of the Notes was estimated to be 6.0% , which equated to an $8.2 million discount. As of March 31, 2019 and December 31, 2018 , the unamortized debt discount was $7.1 million and $7.5 million , respectively, and is expected to be amortized through the maturity date. The debt discount also represents the portion of the Note’s principal amount allocated to the equity component. The Company incurred issuance costs in connection with the issuance of the Notes. As of March 31, 2019 , the unamortized portion of these costs attributed to the debt component was $2.7 million ( December 31, 2018 : $2.9 million ), which are expected to be amortized through the maturity date. The portion of these issuance costs attributed to the equity component was netted against the gross proceeds allocated to equity, resulting in $7.9 million being included in the caption “Additional paid-in capital” in the Company’s condensed consolidated balance sheets. The carrying value of the Notes including accrued interest as of March 31, 2019 was $90.8 million ( December 31, 2018 : $91.2 million ), which approximates their fair value. For the three months ended March 31, 2019 , the Company recognized interest expense of $1.5 million in connection with the interest coupon, amortization of issuance costs and amortization of the discount. The Company was in compliance with all covenants relating to the Notes as of March 31, 2019 and December 31, 2018 . |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The Company has a stock incentive plan for directors, employees and consultants that is administered by the Compensation Committee of the Board of Directors. Employee and Director Restricted Shares For the three months ended March 31, 2019 , 235,701 ( 2018 : 158,669 ) Class A ordinary shares were issued to employees pursuant to the Company’s stock incentive plan. The majority of these shares contain certain restrictions relating to, among other things, vesting, forfeiture in the event of termination of employment and transferability. The restricted shares cliff vest three years after the date of issuance, subject to the grantee’s continued service with the Company. During the vesting period, the holder of the restricted shares retains voting rights and is entitled to any dividends declared by the Company. For the three months ended March 31, 2019 , 89,945 ( 2018 : 30,660 ) Class A ordinary shares were issued to the Company’s Chief Executive Officer pursuant to the Company’s stock incentive plan. These shares contain performance and service conditions and certain restrictions relating to, among other things, vesting, forfeiture in the event of termination of employment and transferability. The restricted shares cliff vest 5 years after the date of issuance, subject to the performance condition being met and the grantee’s continued service with the Company. During the vesting period, the holder of the restricted shares retains voting rights and is entitled to any dividends declared by the Company. The weighted average grant date fair value of these shares was $10.84 ( 2018 : $15.90 ) per share. As of March 31, 2019 , the performance condition was not expected to be met and no compensation cost was recognized relating to these shares for the three months ended March 31, 2019 . For the three months ended March 31, 2019 , no ( 2018 : 2,279 ) restricted shares were forfeited by employees who left the Company prior to the expiration of the applicable vesting periods. For the three months ended March 31, 2019 , no stock compensation expense ( 2018 : $0.0 million ) relating to the forfeited restricted shares was reversed. The Company recorded $0.8 million of share-based compensation expense, net of forfeiture reversals, relating to restricted shares for the three months ended March 31, 2019 ( 2018 : $0.8 million ). As of March 31, 2019 , there was $4.0 million (December 31, 2018 : $2.6 million ) of unrecognized compensation cost relating to non-vested restricted shares which are expected to be recognized over a weighted average period of 2.3 years (December 31, 2018 : 1.6 years). For the three months ended March 31, 2019 , the total fair value of restricted shares vested was $2.3 million ( 2018 : $1.9 million ). The following table summarizes the activity for unvested outstanding restricted share awards during the three months ended March 31, 2019 : Number of Weighted Balance at December 31, 2018 432,457 $ 18.58 Granted 325,646 10.84 Vested (105,135 ) 21.56 Forfeited — — Balance at March 31, 2019 652,968 $ 14.24 Employee and Director Stock Options For the three months ended March 31, 2019 , no Class A ordinary share purchase options were granted, no stock options were exercised by directors or employees, and no stock options vested. When stock options are granted, the Company reduces the corresponding number from the shares authorized for issuance as part of the Company’s stock incentive plan. The total compensation cost expensed relating to stock options for the three months ended March 31, 2019 was $0.3 million ( 2018 : $0.5 million ). At March 31, 2019 , the total compensation cost related to non-vested options not yet recognized was $1.9 million (December 31, 2018: $2.2 million ) to be recognized over a weighted average period of 2.8 years (December 31, 2018: 2.9 years ) assuming the grantee completes the service period for vesting of the options. There was no activity in employee and director stock options during the three months ended March 31, 2019 . At March 31, 2019 and December 31, 2018 , there were 0.9 million stock options outstanding with a weighted average exercise price of $23.05 per share and weighted average grant date fair value of $10.00 per share. The weighted average remaining contractual term of the stock options was 6.2 years and 6.4 years , at March 31, 2019 and December 31, 2018 , respectively. Employee Restricted Stock Units The Company issues RSUs to certain employees as part of the stock incentive plan. These shares contain restrictions relating to vesting, forfeiture in the event of termination of employment, transferability and other matters. Each RSU cliff vests three years after the date of issuance, subject to the grantee’s continued service with the Company. On the vesting date, the Company converts each RSU into one Class A ordinary share and issues new Class A ordinary shares from the shares authorized for issuance as part of the Company’s stock incentive plan. For the three months ended March 31, 2019 , 48,535 ( 2018 : 28,301 ) RSUs were issued to employees pursuant to the Company’s stock incentive plan. The Company recorded $0.1 million of share-based compensation expense (recovery), net of forfeitures, relating to RSUs for the three months ended March 31, 2019 ( 2018 : $0.0 million ). Employee RSU activity during the three months ended March 31, 2019 was as follows: Number of Weighted Balance at December 31, 2018 46,398 $ 18.13 Granted 48,535 10.84 Vested (7,186 ) 21.56 Forfeited — — Balance at March 31, 2019 87,747 $ 13.82 For the three months ended March 31, 2019 and 2018 , the combined stock compensation expense (net of forfeitures), which was included in general and administrative expenses, was $1.1 million and $1.3 million , respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Investment Advisory Agreement DME, DME II and DME Advisors are related to the Company and each is an affiliate of David Einhorn, Chairman of the Company’s Board of Directors. Prior to September 1, 2018, the Company and its reinsurance subsidiaries were party to the venture agreement with DME Advisors under which the Company, its reinsurance subsidiaries and DME were participants of the Joint Venture for the purpose of managing certain jointly held assets. In addition, prior to September 1, 2018, the Company, its reinsurance subsidiaries and DME had entered into a separate investment advisory agreement with DME Advisors (the “advisory agreement”). On September 1, 2018, the Company, DME and DME Advisors entered into a termination agreement to terminate the Joint Venture and the advisory agreement on January 2, 2019. On September 1, 2018, the Company entered into the SILP LPA with DME II, as General Partner. DME II receives a performance allocation equal to (with capitalized terms having the meaning provided under the SILP LPA) (a) 10% of the portion of the Positive Performance Change for each limited partner’s capital account that is less than or equal to the positive balance in such limited partner’s Carryforward Account, plus (b) 20% of the portion of the Positive Performance Change for each limited partner’s capital account that exceeds the positive balance in such limited partner’s Carryforward Account. The Carryforward Account for Greenlight Re and GRIL include the amount of losses that were to be recouped under the Joint Venture as well as any loss generated on the assets invested in SILP, subject to adjustments for redemptions. The loss carry forward provision contained in the SILP LPA allows DME II to earn a reduced performance allocation of 10% of profits in any year subsequent to any years in which SILP has incurred a loss, until all losses are recouped and an additional amount equal to 150% of the loss is earned. For the three months ended March 31, 2019 , performance allocation of $3.4 million was deducted from the Company’s investment in SILP and allocated to DME II. In accordance with the SILP LPA, DME Advisors constructs a levered investment portfolio as agreed by the Company (the “Investment Portfolio” as defined in the SILP LPA). On September 1, 2018, SILP entered into the IAA with DME Advisors which entitles DME Advisors to a monthly management fee equal to 0.125% ( 1.5% on an annual basis) of each limited partner’s Investment Portfolio. The IAA has an initial term ending on August 31, 2023 subject to an automatic extension for successive three -year terms. For the three months ended March 31, 2019 , management fees paid by SILP to DME Advisors of $2.0 million were included in the caption “Income (loss) from investment in related party investment fund” in the Company’s condensed consolidated statement of operations. Pursuant to the venture agreement, a performance allocation equal to 20% of the net investment income of the Company’s share of the Joint Venture was allocated, subject to a loss carry forward provision, to DME’s account. The loss carry forward provision required DME to earn a reduced performance allocation of 10% on net investment income in any year subsequent to the year in which the investment account incurred a loss, until all the losses were recouped and an additional amount equal to 150% of the aggregate investment loss was earned. DME was not entitled to earn a performance allocation in a year in which the investment portfolio under the Joint Venture incurred a loss. For the three months ended March 31, 2019 , no performance allocation was deducted due to the Joint Venture being terminated. During the three months ended March 31, 2018 , no performance allocation was deducted as a result of the investment losses incurred during that period. Pursuant to the advisory agreement, a monthly management fee, equal to 0.125% ( 1.5% on an annual basis) of the Company’s investment account managed by DME Advisors, was paid to DME Advisors. During the three months ended March 31, 2019 , the Joint Venture was terminated and no management fees were paid or accrued relating to the Joint Venture ( 2018 : $4.5 million ). Pursuant to the venture agreement, advisory agreement, SILP LPA and the IAA, the Company has agreed to indemnify DME, DME II and DME Advisors for any expense, loss, liability, or damage arising out of any claim asserted or threatened in connection with DME Advisors serving as the Company’s or SILP’s investment advisor. The Company will reimburse DME, DME II and DME Advisors for reasonable costs and expenses of investigating and/or defending such claims, provided such claims were not caused due to gross negligence, breach of contract or misrepresentation by DME, DME II or DME Advisors. There were no indemnification amounts incurred by the Company during any of the periods presented. Green Brick Partners, Inc. David Einhorn also serves as the Chairman of the Board of Directors of Green Brick Partners, Inc. (“GRBK”), a publicly traded company. SILP, along with certain affiliates of DME Advisors, collectively own 47.7% of the issued and outstanding common shares of GRBK. Under applicable securities laws, DME Advisors may be limited at times in its ability to trade GRBK shares on behalf of SILP. Service Agreement The Company has entered into a service agreement with DME Advisors, pursuant to which DME Advisors provides certain investor relations services to the Company for compensation of five thousand dollars per month (plus expenses). The agreement is automatically renewed annually until terminated by either the Company or DME Advisors for any reason with 30 days prior written notice to the other party. Collateral Assets Investment Management Agreement Effective January 1, 2019, the Company (and its subsidiaries) entered into a collateral assets investment management agreement (the “CMA”) with DME Advisors, pursuant to which DME Advisors manages certain assets of the Company that are not subject to the SILP LPA and are held by the Company to provide collateral required by the cedents in the form of trust accounts and letters of credit. In accordance with the CMA, DME Advisors receives no fees and is required to comply with the collateral investment guidelines. The CMA can be terminated by any of the parties upon 30 days ’ prior written notice to the other parties. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Letters of Credit and Trusts At March 31, 2019 , the Company had the following letter of credit facilities, which automatically renew each year unless terminated by either party in accordance with the applicable required notice period: Facility Termination Date Notice period required for termination ($ in thousands) Butterfield Bank (Cayman) Limited $ 492 June 30, 2020 90 days prior to termination date Citibank Europe plc 400,000 October 11, 2019 120 days prior to termination date $ 400,492 The Butterfield Bank facility is being wound down and will be terminated once the remaining outstanding letter of credit is returned. As of March 31, 2019 , an aggregate amount of $247.8 million ( December 31, 2018 : $208.3 million ) in letters of credit were issued under the above facilities. As of March 31, 2019 , total cash and cash equivalents with a fair value in the aggregate of $249.3 million ( December 31, 2018 : $221.7 million ) were pledged as collateral against the letters of credit issued and included in the caption “Restricted cash and cash equivalents” in the Company’s condensed consolidated balance sheets. Each of the facilities contain customary events of default and restrictive covenants, including but not limited to, limitations on liens on collateral, transactions with affiliates, mergers and sales of assets, as well as solvency and maintenance of certain minimum pledged equity requirements, and restricts issuance of any debt without the consent of the letter of credit provider. Additionally, if an event of default exists, as defined in the letter of credit facilities, Greenlight Re will be prohibited from paying dividends to its parent company. The Company was in compliance with all the covenants of each of these facilities as of March 31, 2019 and December 31, 2018 . The Company has also established regulatory trust arrangements for certain cedents. As of March 31, 2019 , collateral of $480.9 million ( December 31, 2018 : $463.4 million ) was provided to cedents in the form of regulatory trust accounts and included in the caption “Restricted cash and cash equivalents” in the Company’s condensed consolidated balance sheets. Lease Obligations Greenlight Re has entered into lease agreements for office space in the Cayman Islands. The leases expired on June 30, 2018. The Company is currently in negotiations with the lessor for renewal of the lease and meanwhile has agreed to a monthly lease until June 30, 2019. The Company has determined that the current arrangement qualifies as a short term lease upon adoption of Leases (Topic 842) on January 1, 2019. The short-term lease expense for the three months ended March 31, 2019 was $0.1 million . GRIL has entered into a lease agreement for office space in Dublin, Ireland. Under the terms of this lease agreement, GRIL is committed to minimum annual rent payments denominated in Euros approximating €0.1 million until May 2021, and adjusted to the prevailing market rates for the subsequent five -year term. GRIL has the option to terminate the lease agreement in 2021. The Company has determined that this lease was an operating lease on January 1, 2019 and has recorded a right-of-use asset and a corresponding lease liability of $0.3 million . The operating lease expense for the three months ended March 31, 2019 and 2018 was insignificant. Included in the schedule below are the net minimum lease payment obligations relating to this lease as of March 31, 2019 . Loan Facility From time to time, the Company makes investments in the form of equity or debt in private entities as part of its strategic investments and innovation initiatives. As part of the Company’s participation in such investments, the Company may make funding commitments. As of March 31, 2019 , the Company had committed to a loan facility (the “Loan Facility”) of $6.0 million to AccuRisk (see Note 4 ). As of March 31, 2019 , $0.5 million of the Loan Facility was available to AccuRisk. Included in the schedule below is the minimum obligation relating to the Loan Facility as of March 31, 2019 on the assumption that the entire Loan Facility will be drawn by AccuRisk during 2019. Schedule of Commitments and Contingencies The following is a schedule of future minimum payments required under the above commitments: 2019 2020 2021 2022 2023 Thereafter Total ($ in thousands) Operating lease obligations $ 124 $ 165 $ 62 $ — $ — $ — $ 351 Interest and convertible note payable 2,000 4,000 4,000 4,000 104,000 — 118,000 Loan facility 450 — — — — — 450 $ 2,574 $ 4,165 $ 4,062 $ 4,000 $ 104,000 $ — $ 118,801 Litigation From time to time in the normal course of business, the Company may be involved in formal and informal dispute resolution procedures, which may include arbitration or litigation, the outcomes of which determine the rights and obligations under the Company’s reinsurance contracts and other contractual agreements. In some disputes, the Company may seek to enforce its rights under an agreement or to collect funds owing to it. In other matters, the Company may resist attempts by others to collect funds or enforce alleged rights. While the final outcome of legal disputes cannot be predicted with certainty, the Company 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. |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company manages its business on the basis of one operating segment, Property & Casualty Reinsurance. The following tables provide a breakdown of the Company’s gross premiums written by line of business and by geographic area of risks insured for the periods indicated: Gross Premiums Written by Line of Business Three months ended March 31 2019 2018 ($ in thousands) Property Commercial $ 3,730 2.3 % $ 2,644 1.5 % Motor 20,183 12.4 22,422 12.8 Personal 2,893 1.8 2,441 1.4 Total Property 26,806 16.5 27,507 15.7 Casualty General Liability 982 0.6 1,232 0.7 Motor Liability 79,243 48.7 83,562 47.7 Professional Liability 82 0.1 438 0.3 Workers' Compensation 9,429 5.8 3,559 2.0 Multi-line * 20,749 12.8 17,015 9.7 Total Casualty 110,485 68.0 105,806 60.4 Other Accident & Health 14,871 9.1 29,577 16.9 Financial 7,904 4.9 11,214 6.4 Marine 110 0.1 371 0.2 Other Specialty 2,384 1.5 650 0.4 Total Other 25,269 15.5 41,812 23.9 $ 162,560 100.0 % $ 175,125 100.0 % * The prior period comparative information has been reclassified to conform to the current period presentation. See Note 1 for further details. Gross Premiums Written by Geographic Area of Risks Insured Three months ended March 31 2019 2018 ($ in thousands) U.S. and Caribbean $ 137,651 84.7 % $ 157,707 90.1 % Worldwide (1) 24,909 15.3 17,278 9.8 Europe — — 186 0.1 Asia (2) — — (46 ) — $ 162,560 100.0 % $ 175,125 100.0 % (1) “Worldwide” is comprised of contracts that reinsure risks in more than one geographic area and do not specifically exclude the U.S. (2) The negative balance represents reversal of premiums due to premium adjustments, termination of contracts or premium returned upon novation or commutation of contracts. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Reclassifications and changes in description and Other reclassification | Reclassifications and changes in description Changes in the condensed consolidated statements of operations and statements of cash flows The Company’s condensed consolidated statements of operations previously used the caption “Net income (loss) including non-controlling interest” to represent the net income (loss) before deducting non-controlling interest. Similarly, the caption “Net income (loss)” was used to represent the net income (loss) available to the Company after deducting non-controlling interest. Effective from the year ended December 31, 2018, the Company amended the captions as follows: • The caption “Net income (loss) including non-controlling interest” was renamed “Net income (loss).” • The caption “Net income (loss)” was renamed “Net income (loss) attributable to Greenlight Capital Re, Ltd.” In addition, the Company’s condensed consolidated statements of cash flows previously started with net income (loss) excluding income (loss) from non-controlling interest. The net income (loss) from non-controlling interest was presented as a reconciling item to the net cash flow from operating activities. Effective from the year ended December 31, 2018, the Company amended the presentation to start with “Net income (loss)” which includes income from non-controlling interest. The prior period comparative information has been reclassified to conform to the current period presentation. The reclassification had no impact on the Company’s results of operations, financial position, earnings (loss) per share or net cash provided by (used in) operating activities. Other reclassification Effective from the second quarter of 2018, contracts that cover more than one line of business are grouped as “multi-line.” The prior period comparative information in Note 11 has been reclassified to conform to the current period presentation. There was no material impact on the presentation of the Company’s results of operations or financial condition as a result of this reclassification. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the period. Actual results could differ from these estimates. |
Restricted Cash and Cash Equivalents | Restricted Cash and Cash Equivalents Restricted cash and cash equivalent balances are held to collateralize regulatory trusts and letters of credit issued to cedents (see Note 10 ). The amount of cash encumbered varies depending on the collateral required by those cedents. |
Notes Receivable | Notes Receivable Notes receivable represent promissory notes receivable from third parties. These notes are recorded at cost plus accrued interest, if any, which approximates the fair value. Interest income and realized gains or losses on the sale of notes receivable are included in the caption “Net investment income (loss)” in the Company’s condensed consolidated statements of operations. The Company regularly reviews all notes receivable individually for impairment and records valuation allowance provisions for uncollectible and non-performing notes. When the recorded value of a note receivable is not considered impaired but there is uncertainty as to the collection of interest contractually due, the Company places the note on non-accrual status. For notes receivable placed on non-accrual status, the notes are presented excluding any accrued interest amount. The Company resumes the accrual of interest on a note when none of the principal or interest remains past due, and the Company expects to collect the remaining contractual principal and interest. Interest collected on notes that are placed on non-accrual status is recorded as interest income when collected, provided that the recorded value of the note is deemed to be fully collectible. Where doubt exists as to the collectability of the remaining recorded value of the notes placed on non-accrual status, any payments received are applied to reduce the recorded value of the notes. |
Deposit Assets and Liabilities | Deposit Assets and Liabilities The Company applies deposit accounting to reinsurance contracts that do not transfer sufficient insurance risk to merit reinsurance accounting. Under deposit accounting, an asset or liability is recognized based on the consideration paid or received. The deposit asset or liability balance is subsequently adjusted using the interest method with a corresponding income or expense recorded in the Company’s condensed consolidated statements of operations under the caption “Other income (expense).” The Company’s deposit assets and liabilities are recorded in the Company’s condensed consolidated balance sheets in the caption “Reinsurance balances receivable” and “Reinsurance balances payable,” respectively. |
Other Assets | Other Assets Other assets consist primarily of prepaid expenses, fixed assets, right-of-use lease assets, other receivables and deferred tax assets. |
Other Liabilities | Other Liabilities Other liabilities consist primarily of accruals for professional fees, employee bonuses and lease liabilities. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The Company’s unvested restricted stock awards, which contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are considered “participating securities” for the purposes of calculating earnings (loss) per share. Basic earnings (loss) per share is calculated on the basis of the weighted average number of common shares and participating securities outstanding during the period. Diluted earnings (or loss) per share includes the dilutive effect of the following: • Restricted Stock Units (“RSUs”) issued that would convert to common shares upon vesting; • additional potential common shares issuable when stock options are exercised, determined using the treasury stock method; and • those common shares with the potential to be issued by virtue of convertible debt and other such convertible instruments, determined using the treasury stock method. Diluted earnings (or loss) per share contemplates a conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share. In the event of a net loss, all RSUs, stock options outstanding, convertible debt and participating securities are excluded from the calculation of both basic and diluted loss per share as their inclusion would be anti-dilutive. |
Taxation | Taxation Under current Cayman Islands law, no corporate entity, including GLRE and Greenlight Re, is obligated to pay taxes in the Cayman Islands on either income or capital gains. The Company has an undertaking from the Governor-in-Cabinet of the Cayman Islands, pursuant to the provisions of the Tax Concessions Law, as amended, that, in the event that the Cayman Islands enacts any legislation that imposes tax on profits, income, gains or appreciations, or any tax in the nature of estate duty or inheritance tax, such tax will not be applicable to GLRE, Greenlight Re nor their respective operations, or to the Class A or Class B ordinary shares or related obligations, before February 1, 2025. Verdant is incorporated in Delaware and therefore is subject to taxes in accordance with the U.S. federal rates and regulations prescribed by the U.S. Internal Revenue Service (“IRS”). Verdant’s taxable income is generally expected to be taxed at a marginal rate of 21% ( 2018 : 21% ). Verdant’s tax years 2014 and beyond remain open and subject to examination by the IRS. GRIL is incorporated in Ireland and therefore is subject to the Irish corporation tax rate of 12.5% on its trading income, and 25% on its non-trading income. The Company evaluates its deferred tax assets and records a valuation allowance to the extent that the Company considers it more likely than not that all or a portion of the deferred tax asset will not be realized in the future. Other than the evaluation of a valuation allowance for deferred tax assets, the Company has not taken any income tax positions that are subject to significant uncertainty that is reasonably likely to have a material impact on the Company. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Standards Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” . Under the new guidance, lessees are required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Leases (Topic 842) is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted Leases (Topic 842) during the first quarter of 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company has adopted the following practical expedients: • Carry forward of historical lease classifications and current accounting treatment for existing land easements; • Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less; and • Hindsight practical expedient for remeasuring the lease terms on the basis of information obtained between entering into the lease and adopting Leases (Topic 842). Adoption of Leases (Topic 842) resulted in the recognition of operating lease right-of-use asset and corresponding lease liability of $0.3 million which were included in the Company’s condensed consolidated balance sheets under the captions “Other Assets” and “Other Liabilities” as of March 31, 2019. Recently Issued Accounting Standards Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses on Financial Instruments” (“ASU 2016-13”) . ASU 2016-13 amended the guidance on reporting credits losses and affects loans, debt securities, trade receivables, reinsurance recoverables and other financial assets that have the contractual right to receive cash. The amendment is effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. Early adoption is permitted for any organization for annual periods beginning after December 15, 2018 and interim periods within those annual periods. The Company is in the process of evaluating the impact of the requirements of ASU 2016-13 on the Company’s consolidated financial statements and anticipates implementing ASU 2016-13 during 2020. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table reconciles the cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total presented in the condensed consolidated statements of cash flows: March 31, 2019 December 31, 2018 ($ in thousands) Cash and cash equivalents $ 9,500 $ 18,215 Restricted cash and cash equivalents 730,155 685,016 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows $ 739,655 $ 703,231 |
Restrictions on Cash and Cash Equivalents | The following table reconciles the cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total presented in the condensed consolidated statements of cash flows: March 31, 2019 December 31, 2018 ($ in thousands) Cash and cash equivalents $ 9,500 $ 18,215 Restricted cash and cash equivalents 730,155 685,016 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows $ 739,655 $ 703,231 |
Schedule of Weighted Average Number of Shares | The table below presents the shares outstanding for the purposes of its calculation of earnings (loss) per share for the three months ended March 31, 2019 and 2018: Three months ended March 31 2019 2018 Weighted average shares outstanding - basic 35,972,665 37,087,169 Effect of dilutive employee and director share-based awards 391,693 — Weighted average shares outstanding - diluted 36,364,358 37,087,169 Anti-dilutive stock options outstanding 935,627 1,015,627 Participating securities excluded from calculation of loss per share — 460,155 |
INVESTMENT IN RELATED PARTY I_2
INVESTMENT IN RELATED PARTY INVESTMENT FUND (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized Financial Information of Investment | The summarized financial information of SILP is presented below. Summarized Statement of Operations of Solasglas Investments, LP Three months ended March 31, 2019 ($ in thousands) Investment income Dividend income (net of withholding taxes) $ 1,240 Interest income 686 Total Investment income 1,926 Expenses Management fee (2,014 ) Interest (1,374 ) Dividends (1,070 ) Professional fees and other (380 ) Total expenses (4,838 ) Net investment income (loss) (2,912 ) Realized and change in unrealized gains (losses) on investments Net realized gain (loss) on investments (7,175 ) Net change in unrealized appreciation on investments 49,753 Net gain (loss) on investments 42,578 Net income (loss) $ 39,666 GLRE Limited Partners’ share of net income (loss) 1 $ 30,756 1 Net of management fees of $2.0 million and a performance allocation of $3.4 million . See Note 9 for further details. Summarized Statement of Assets and Liabilities of Solasglas Investments, LP March 31, 2019 December 31, 2018 ($ in thousands) Assets Investments, at fair value $ 506,080 $ 464,461 Due from brokers 110,699 77,821 Cash and cash equivalents 1,705 13,200 Interest and dividends receivable 1,910 2,358 Total assets 620,394 557,840 Liabilities and partners’ capital Liabilities Investments sold, not yet purchased, at fair value (284,087 ) (225,072 ) Notes Payable (30,000 ) (30,000 ) Due to brokers (7,069 ) (23,951 ) Interest and dividends payable (1,456 ) (1,238 ) Other liabilities (79 ) (169 ) Total liabilities (322,691 ) (280,430 ) Net Assets $ 297,703 $ 277,410 GLRE Limited Partners’ share of Net Assets $ 246,392 $ 235,612 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Trading securities, debt and equities | At December 31, 2018 , the following long positions were included in the caption “Equity securities, trading”: Cost Unrealized Unrealized Fair ($ in thousands) Equities – listed $ 50,521 $ 1,015 $ (14,628 ) $ 36,908 Total equity securities $ 50,521 $ 1,015 $ (14,628 ) $ 36,908 |
Other investments | The tables below present the Company’s other investments as at March 31, 2019 and December 31, 2018 : March 31, 2019 Cost Unrealized Unrealized Fair ($ in thousands) Private investments and unlisted equity funds $ 5,718 $ 23 $ (3 ) $ 5,738 Investment accounted for under the equity method NA NA NA 5,434 Total Other investments $ 11,172 December 31, 2018 Cost Unrealized Unrealized Fair ($ in thousands) Private investments and unlisted equity funds $ 6,672 $ — $ (267 ) $ 6,405 Investment accounted for under the equity method NA NA NA 5,003 Total Other investments $ 6,672 $ — $ (267 ) $ 11,408 |
Fair value hierarchy | The following table presents the Company’s investments, categorized by the level of the fair value hierarchy as of December 31, 2018 : Fair value measurements as of December 31, 2018 Description Quoted prices in Significant other Significant Total ($ in thousands) Assets: Listed equity securities $ 36,908 $ — $ — $ 36,908 Private and unlisted equity securities — — 664 664 $ 36,908 $ — $ 664 $ 37,572 Investment in related party investment fund measured at net asset value (1) (2) 235,612 Equities without readily determinable fair values for which measurement alternative is applied 5,741 Investment accounted for under the equity method 5,003 Total investments $ 283,928 (1) Investments measured at fair value using the net asset value practical expedient have not been classified in the fair value hierarchy. The fair value amounts are presented in the above table to facilitate reconciliation to the condensed consolidated balance sheets. (2) See Note 3 “Investment in related party investment fund.” |
Fair value measurements using significant unobservable inputs | The following tables present the reconciliation of the balances for all investments measured at fair value using significant unobservable inputs (Level 3) for the three months ended March 31, 2018 : Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Three months ended March 31, 2018 Assets Debt instruments Private and unlisted equity securities Total ($ in thousands) Beginning balance $ 880 $ 6,108 $ 6,988 Purchases — — — Total realized and unrealized gains (losses) and amortization included in earnings, net 5 27 32 Transfers into Level 3 — — — Transfers out of Level 3 — — — Ending balance $ 885 $ 6,135 $ 7,020 |
LOSS AND LOSS ADJUSTMENT EXPE_2
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Insurance Loss Reserves [Abstract] | |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | At March 31, 2019 and December 31, 2018 , loss and loss adjustment expense reserves were composed of the following: Consolidated March 31, 2019 December 31, 2018 ($ in thousands) Case reserves $ 197,483 $ 211,910 IBNR 310,448 270,752 Total $ 507,931 $ 482,662 At March 31, 2019 and December 31, 2018 , the loss and loss adjustment expense reserves relating to health were $26.3 million and $24.5 million , respectively. The changes in the outstanding loss and loss adjustment expense reserves for health claims for the three months ended March 31, 2019 and 2018 are as follows: Health 2019 2018 ($ in thousands) Gross balance at January 1 $ 24,502 $ 22,181 Less: Losses recoverable — — Net balance at January 1 24,502 22,181 Incurred losses related to: Current year 11,142 11,992 Prior years 2,159 830 Total incurred 13,301 12,822 Paid losses related to: Current year (1,502 ) (1,872 ) Prior years (9,972 ) (9,231 ) Total paid (11,474 ) (11,103 ) Foreign currency revaluation — — Net balance at March 31 26,329 23,900 Add: Losses recoverable — — Gross balance at March 31 $ 26,329 $ 23,900 A summary of changes in outstanding loss and loss adjustment expense reserves for all lines of business consolidated for the three months ended March 31, 2019 and 2018 is as follows: Consolidated 2019 2018 ($ in thousands) Gross balance at January 1 $ 482,662 $ 464,380 Less: Losses recoverable (43,705 ) (29,459 ) Net balance at January 1 438,957 434,921 Incurred losses related to: Current year 87,812 98,558 Prior years 35,053 (2,734 ) Total incurred 122,865 95,824 Paid losses related to: Current year (87,375 ) (17,161 ) Prior years (13,277 ) (69,703 ) Total paid (100,652 ) (86,864 ) Foreign currency revaluation 565 1,236 Net balance at March 31 461,735 445,117 Add: Losses recoverable 46,196 39,482 Gross balance at March 31 $ 507,931 $ 484,599 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table summarizes the activity for unvested outstanding restricted share awards during the three months ended March 31, 2019 : Number of Weighted Balance at December 31, 2018 432,457 $ 18.58 Granted 325,646 10.84 Vested (105,135 ) 21.56 Forfeited — — Balance at March 31, 2019 652,968 $ 14.24 Employee RSU activity during the three months ended March 31, 2019 was as follows: Number of Weighted Balance at December 31, 2018 46,398 $ 18.13 Granted 48,535 10.84 Vested (7,186 ) 21.56 Forfeited — — Balance at March 31, 2019 87,747 $ 13.82 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Letters of Credit Facilities | At March 31, 2019 , the Company had the following letter of credit facilities, which automatically renew each year unless terminated by either party in accordance with the applicable required notice period: Facility Termination Date Notice period required for termination ($ in thousands) Butterfield Bank (Cayman) Limited $ 492 June 30, 2020 90 days prior to termination date Citibank Europe plc 400,000 October 11, 2019 120 days prior to termination date $ 400,492 |
Schedule of Commitments and Contingencies, Fiscal Year Maturity Schedule | Schedule of Commitments and Contingencies The following is a schedule of future minimum payments required under the above commitments: 2019 2020 2021 2022 2023 Thereafter Total ($ in thousands) Operating lease obligations $ 124 $ 165 $ 62 $ — $ — $ — $ 351 Interest and convertible note payable 2,000 4,000 4,000 4,000 104,000 — 118,000 Loan facility 450 — — — — — 450 $ 2,574 $ 4,165 $ 4,062 $ 4,000 $ 104,000 $ — $ 118,801 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Gross Premiums Written by Line of Business | The following tables provide a breakdown of the Company’s gross premiums written by line of business and by geographic area of risks insured for the periods indicated: Gross Premiums Written by Line of Business Three months ended March 31 2019 2018 ($ in thousands) Property Commercial $ 3,730 2.3 % $ 2,644 1.5 % Motor 20,183 12.4 22,422 12.8 Personal 2,893 1.8 2,441 1.4 Total Property 26,806 16.5 27,507 15.7 Casualty General Liability 982 0.6 1,232 0.7 Motor Liability 79,243 48.7 83,562 47.7 Professional Liability 82 0.1 438 0.3 Workers' Compensation 9,429 5.8 3,559 2.0 Multi-line * 20,749 12.8 17,015 9.7 Total Casualty 110,485 68.0 105,806 60.4 Other Accident & Health 14,871 9.1 29,577 16.9 Financial 7,904 4.9 11,214 6.4 Marine 110 0.1 371 0.2 Other Specialty 2,384 1.5 650 0.4 Total Other 25,269 15.5 41,812 23.9 $ 162,560 100.0 % $ 175,125 100.0 % * The prior period comparative information has been reclassified to conform to the current period presentation. |
Gross Premiums Written by Geographic Area of Risks Insured | Gross Premiums Written by Geographic Area of Risks Insured Three months ended March 31 2019 2018 ($ in thousands) U.S. and Caribbean $ 137,651 84.7 % $ 157,707 90.1 % Worldwide (1) 24,909 15.3 17,278 9.8 Europe — — 186 0.1 Asia (2) — — (46 ) — $ 162,560 100.0 % $ 175,125 100.0 % (1) “Worldwide” is comprised of contracts that reinsure risks in more than one geographic area and do not specifically exclude the U.S. (2) The negative balance represents reversal of premiums due to premium adjustments, termination of contracts or premium returned upon novation or commutation of contracts. |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES Cash Flow, Supplemental cash equivalents reconciliation (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 9,500 | $ 18,215 | ||
Restricted cash and cash equivalents | 730,155 | 685,016 | ||
Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows | $ 739,655 | $ 703,231 | $ 1,291,509 | $ 1,531,098 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Notes receivable balance related to note placed on non-accrual status | $ 8.7 | $ 9.8 | |
Accrued interest | 0.2 | 0.2 | |
Deposit contracts, assets | 12.2 | 11.9 | |
Deposit contracts, liabilities | 57.3 | $ 52.9 | |
Interest income | 0 | $ 0.2 | |
Interest expense | 1 | $ 0.1 | |
Operating lease, liability | 0.3 | ||
Operating lease, ROU asset | $ 0.3 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES Earnings Per Share Reconciliation (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Weighted average shares outstanding - basic (in shares) | 35,972,665 | 37,087,169 |
Effect of dilutive employee and director share-based awards (in shares) | 391,693 | 0 |
Weighted average shares outstanding - diluted (in shares) | 36,364,358 | 37,087,169 |
Stock Options | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Anti-dilutive stock options outstanding (in shares) | 935,627 | 1,015,627 |
Restricted stock | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Anti-dilutive stock options outstanding (in shares) | 0 | 460,155 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES Income taxes (Details) - GRIL - Ireland | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes [Line Items] | |
Tax rate on trading income | 12.50% |
Tax rate on non-trading income | 25.00% |
INVESTMENT IN RELATED PARTY I_3
INVESTMENT IN RELATED PARTY INVESTMENT FUND Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Sep. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investments, fair value | $ 5,003 | |||
GLRE Limited Partners’ share of net income (loss) | $ 30,756 | $ 0 | ||
Transfer from investments | $ 36,700 | |||
DME II | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment, ownership percentage | 17.20% | |||
SILP | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investments, fair value | $ 246,400 | |||
Equity method investment, ownership percentage | 82.80% | |||
Asset redemption notice to general partner | 3 days |
INVESTMENT IN RELATED PARTY I_4
INVESTMENT IN RELATED PARTY INVESTMENT FUND Summarized Income Statements of SILP (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Realized and change in unrealized gains (losses) on investments | ||
GLRE Limited Partners’ share of net income (loss) | $ 30,756 | $ 0 |
Solasglas Investment LP (SILP) | ||
Investment income | ||
Dividend income (net of withholding taxes) | 1,240 | |
Interest income | 686 | |
Total Investment income | 1,926 | |
Expenses | ||
Management fee | (2,014) | |
Interest | (1,374) | |
Dividends | (1,070) | |
Professional fees and other | (380) | |
Total expenses | (4,838) | |
Net investment income (loss) | (2,912) | |
Realized and change in unrealized gains (losses) on investments | ||
Net realized gain (loss) on investments | (7,175) | |
Net change in unrealized appreciation on investments | 49,753 | |
Net gain (loss) on investments | 42,578 | |
Net income (loss) | 39,666 | |
Investment Advisory Agreement | Board of Directors Chairman | ||
Realized and change in unrealized gains (losses) on investments | ||
Incentive fee expense | $ 3,400 |
INVESTMENT IN RELATED PARTY I_5
INVESTMENT IN RELATED PARTY INVESTMENT FUND Summarized Statements of Assets, Liabilities and Net Assets of SILP (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Liabilities | ||
GLRE Limited Partners’ share of Net Assets | $ 246,392 | $ 235,612 |
Solasglas Investment LP (SILP) | ||
Assets | ||
Investments, at fair value | 506,080 | 464,461 |
Due from brokers | 110,699 | 77,821 |
Cash and cash equivalents | 1,705 | 13,200 |
Interest and dividends receivable | 1,910 | 2,358 |
Total assets | 620,394 | 557,840 |
Liabilities | ||
Investments sold, not yet purchased, at fair value | (284,087) | (225,072) |
Notes Payable | (30,000) | (30,000) |
Due to brokers | (7,069) | (23,951) |
Interest and dividends payable | (1,456) | (1,238) |
Other liabilities | (79) | (169) |
Total liabilities | (322,691) | (280,430) |
Net Assets | $ 297,703 | $ 277,410 |
FINANCIAL INSTRUMENTS Equity Se
FINANCIAL INSTRUMENTS Equity Securities, Trading (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Investment [Line Items] | |
Cost | $ 50,521 |
Unrealized gains | 1,015 |
Unrealized losses | (14,628) |
Fair value | 36,908 |
Equities – listed | |
Investment [Line Items] | |
Cost | 50,521 |
Unrealized gains | 1,015 |
Unrealized losses | (14,628) |
Fair value | $ 36,908 |
FINANCIAL INSTRUMENTS Narrative
FINANCIAL INSTRUMENTS Narrative (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Income (loss) from equity method investments | $ 431,000 | $ 0 | ||
Equities without readily determinable fair values for which measurement alternative is applied | $ 5,700,000 | $ 5,741,000 | 5,700,000 | |
Transfer of assets | 0 | |||
AccuRisk Holdings LLC | Variable Interest Entity, Not Primary Beneficiary | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity method investment, ownership percentage | 58.00% | 58.00% | ||
SILP | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Transfer of assets | 600,000 | |||
AccuRisk Holdings LLC | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Income (loss) from equity method investments | 400,000 | $ 0 | ||
Affiliated Entity | AccuRisk Holdings LLC | Variable Interest Entity, Not Primary Beneficiary | Credit Facility | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Due from related parties | $ 6,000,000 | $ 6,000,000 |
FINANCIAL INSTRUMENTS Schedule
FINANCIAL INSTRUMENTS Schedule of Other Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost | $ 6,672 | |
Unrealized gains | 0 | |
Unrealized losses | (267) | |
Fair value / carrying value | $ 11,172 | 11,408 |
Private investments and unlisted equity funds | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Cost | 5,718 | 6,672 |
Unrealized gains | 23 | 0 |
Unrealized losses | (3) | (267) |
Fair value / carrying value | 5,738 | 6,405 |
Investment accounted for under the equity method | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Fair value / carrying value | $ 5,434 | $ 5,003 |
FINANCIAL INSTRUMENTS Schedul_2
FINANCIAL INSTRUMENTS Schedule of Investments Categorized by Level of Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | $ 37,572 | |
Investment in related party investment fund measured at net asset value | 235,612 | |
Equities without readily determinable fair values for which measurement alternative is applied | $ 5,700 | 5,741 |
Investment accounted for under the equity method | 5,003 | |
Total investments | $ 257,564 | 283,928 |
Quoted prices in active markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 36,908 | |
Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | |
Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 664 | |
Listed equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 36,908 | |
Listed equity securities | Quoted prices in active markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 36,908 | |
Listed equity securities | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | |
Listed equity securities | Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | |
Private and unlisted equity securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 664 | |
Private and unlisted equity securities | Quoted prices in active markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | |
Private and unlisted equity securities | Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | 0 | |
Private and unlisted equity securities | Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets: | $ 664 |
FINANCIAL INSTRUMENTS Level 3 r
FINANCIAL INSTRUMENTS Level 3 reconciliation (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |
Beginning balance | $ 6,988 |
Purchases | 0 |
Total realized and unrealized gains (losses) and amortization included in earnings, net | 32 |
Transfers into Level 3 | 0 |
Transfers out of Level 3 | 0 |
Ending balance | 7,020 |
Debt instruments | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |
Beginning balance | 880 |
Purchases | 0 |
Total realized and unrealized gains (losses) and amortization included in earnings, net | 5 |
Transfers into Level 3 | 0 |
Transfers out of Level 3 | 0 |
Ending balance | 885 |
Private and unlisted equity securities | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | |
Beginning balance | 6,108 |
Purchases | 0 |
Total realized and unrealized gains (losses) and amortization included in earnings, net | 27 |
Transfers into Level 3 | 0 |
Transfers out of Level 3 | 0 |
Ending balance | $ 6,135 |
LOSS AND LOSS ADJUSTMENT EXPE_3
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Case reserves | $ 197,483 | $ 211,910 | ||||
IBNR | 310,448 | 270,752 | ||||
Total | $ 482,662 | $ 464,380 | 507,931 | 482,662 | $ 484,599 | $ 464,380 |
Loss and loss adjustment expense reserve | 482,662 | 464,380 | 507,931 | 482,662 | 484,599 | 464,380 |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||||
Gross balance at beginning of period | 482,662 | 464,380 | ||||
Less: Losses recoverable | (46,196) | (43,705) | (39,482) | (29,459) | ||
Net balance at beginning of period | 438,957 | 434,921 | ||||
Current year | 87,812 | 98,558 | ||||
Prior years | 35,053 | (2,734) | ||||
Total incurred | 122,865 | 95,824 | ||||
Current year | (87,375) | (17,161) | ||||
Prior years | (13,277) | (69,703) | ||||
Total paid | (100,652) | (86,864) | ||||
Foreign currency revaluation | 565 | 1,236 | ||||
Net balance at end of period | 461,735 | 445,117 | ||||
Gross balance at end of period | 507,931 | 484,599 | ||||
Prior years adjustment increase (decrease) | 35,053 | (2,734) | ||||
Net loss reserve on prior contracts increase (decrease) | (25,700) | (1,700) | ||||
Health | ||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Total | 24,502 | 22,181 | 26,329 | 24,502 | 23,900 | 22,181 |
Loss and loss adjustment expense reserve | 24,502 | 22,181 | 26,329 | 24,502 | 23,900 | 22,181 |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||||
Gross balance at beginning of period | 24,502 | 22,181 | ||||
Less: Losses recoverable | $ 0 | $ 0 | $ 0 | $ 0 | ||
Net balance at beginning of period | 24,502 | 22,181 | ||||
Current year | 11,142 | 11,992 | ||||
Prior years | 2,159 | 830 | ||||
Total incurred | 13,301 | 12,822 | ||||
Current year | (1,502) | (1,872) | ||||
Prior years | (9,972) | (9,231) | ||||
Total paid | (11,474) | (11,103) | ||||
Foreign currency revaluation | 0 | 0 | ||||
Net balance at end of period | 26,329 | 23,900 | ||||
Gross balance at end of period | 26,329 | 23,900 | ||||
Prior years adjustment increase (decrease) | $ 2,159 | $ 830 |
RETROCESSION (Details)
RETROCESSION (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Ceded Credit Risk [Line Items] | ||||
Ceded premiums earned | $ 22,200,000 | $ 29,500,000 | ||
Net loss and loss adjustment expenses incurred | 122,865,000 | 95,824,000 | ||
Loss and loss expenses recovered and recoverable | 26,300,000 | 19,400,000 | ||
Loss and loss adjustment expenses recoverable | 46,196,000 | $ 39,482,000 | $ 43,705,000 | $ 29,459,000 |
Provision for uncollectible losses recoverable | 0 | 0 | ||
Unrated | ||||
Ceded Credit Risk [Line Items] | ||||
Loss and loss adjustment expenses recoverable | 34,600,000 | 34,300,000 | ||
AM Best, A- Rating | ||||
Ceded Credit Risk [Line Items] | ||||
Loss and loss adjustment expenses recoverable | $ 11,600,000 | $ 9,400,000 |
SENIOR CONVERTIBLE NOTES (Detai
SENIOR CONVERTIBLE NOTES (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Aug. 07, 2018 | |
Debt Instrument [Line Items] | |||
Unamortized discount | $ 7,500,000 | $ 8,200,000 | |
Convertible senior notes payable | $ 90,796,000 | 91,185,000 | |
Senior Notes | Senior Unsecured Convertible Notes | |||
Debt Instrument [Line Items] | |||
Convertible debt, amount | $ 100,000,000 | ||
Debt interest rate | 4.00% | ||
Effective interest rate | 6.00% | ||
Unamortized discount | 7,100,000 | ||
Unamortized debt issuance expense | 2,700,000 | $ 2,900,000 | |
Convertible debt, carrying amount of equity component | 7,900,000 | ||
Amortization of debt issuance costs | $ 1,500,000 | ||
Senior Notes | Senior Unsecured Convertible Notes | Pro Forma | |||
Debt Instrument [Line Items] | |||
Conversion of stock, shares converted (in shares) | 0 | ||
Debt conversion price (in dollars per share) | $ 17.19 |
SHARE-BASED COMPENSATION Narrat
SHARE-BASED COMPENSATION Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
General and Administrative Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 1.1 | $ 1.3 | ||
Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Shares forfeited | $ 0 | 0 | ||
Stock based compensation expense | 0.8 | 0.8 | ||
Unrecognized cost | $ 4 | $ 2.6 | 4 | |
Period of recognition | 2 years 3 months | 1 year 7 months | ||
Fair value of options vested in period | $ 2.3 | $ 1.9 | ||
Number of RSUs issued to employees (in shares) | 325,646 | |||
Restricted stock | Common Class A | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued (in shares) | 235,701 | 158,669 | ||
Number of restricted shares forfeited (in shares) | 0 | 2,279 | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 0.3 | $ 0.5 | ||
Period of recognition | 2 years 10 months 24 days | 2 years 10 months | ||
Number of stock options exercised (in shares) | 0 | |||
Vested number of shares (in shares) | 0 | |||
Cost not yet recognized | $ 1.9 | $ 2.2 | $ 1.9 | |
Number of options nonvested (in shares) | 900,000 | 900,000 | 900,000 | |
Exercise price (in dollars per share) | $ 23.05 | $ 23.05 | $ 23.05 | |
Weighted average grant date fair value, granted (in dollars per share) | $ 10 | $ 10 | ||
Weighted average remaining contractual term | 6 years 2 months | 6 years 5 months | ||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Fair value (in dollars per share) | $ 10.84 | |||
Stock based compensation expense | $ 0.1 | $ 0 | ||
Number of RSUs issued to employees (in shares) | 48,535 | 28,301 | ||
Chief Executive Officer | Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 5 years | |||
Fair value (in dollars per share) | $ 10.84 | $ 15.90 | ||
Chief Executive Officer | Restricted stock | Common Class A | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued (in shares) | 89,945 | 30,660 | ||
Chief Executive Officer | Stock Options | Common Class A | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options granted (in shares) | 0 |
SHARE-BASED COMPENSATION Restri
SHARE-BASED COMPENSATION Restricted Shares (Details) - Restricted stock | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Number of non-vested restricted shares | |
Balance at December 31, 2018 (in shares) | 432,457 |
Granted (in shares) | 325,646 |
Vested (in shares) | (105,135) |
Forfeited (in shares) | 0 |
Balance at March 31, 2019 (in shares) | 652,968 |
Weighted average grant date fair value | |
Balance at December 31, 2018 (in dollars per share) | $ / shares | $ 18.58 |
Vested (in dollars per share) | $ / shares | 21.56 |
Forfeited (in dollars per share) | $ / shares | 0 |
Balance at March 31, 2019 (in dollars per share) | $ / shares | $ 14.24 |
SHARE-BASED COMPENSATION Rest_2
SHARE-BASED COMPENSATION Restricted Stock Units (Details) - RSUs - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Number of non-vested restricted shares | ||
Balance at December 31, 2018 (in shares) | 46,398 | |
Granted (in shares) | 48,535 | 28,301 |
Vested (in shares) | (7,186) | |
Forfeited (in shares) | 0 | |
Balance at March 31, 2019 (in shares) | 87,747 | |
Weighted average grant date fair value | ||
Balance at December 31, 2018 (in dollars per share) | $ 18.13 | |
Granted (in dollars per share) | 10.84 | |
Vested (in dollars per share) | 21.56 | |
Forfeited (in dollars per share) | 0 | |
Balance at March 31, 2019 (in dollars per share) | $ 13.82 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Jan. 01, 2019 | Sep. 01, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
SILP | Board of Directors Chairman | ||||
Related Party Transaction [Line Items] | ||||
Performance compensation rate if partners' account is less or equal positive carryforward account | 10.00% | |||
Performance compensation full rate | 20.00% | |||
Performance compensation reduced rate | 10.00% | |||
Loss carry forward recoupment required | 150.00% | |||
Investment Advisory Agreement | Board of Directors Chairman | ||||
Related Party Transaction [Line Items] | ||||
Performance compensation full rate | 20.00% | |||
Performance compensation reduced rate | 10.00% | |||
Loss carry forward recoupment required | 150.00% | |||
Incentive fee expense | $ 3,400,000 | |||
Investment management fee rate - monthly | 0.125% | |||
Investment management fee rate - annual | 1.50% | |||
Automatic agreement extension, term | 3 years | |||
Payment for management fee | 0 | $ 4,500,000 | ||
Service Agreement | Board of Directors Chairman | ||||
Related Party Transaction [Line Items] | ||||
Investor relations monthly fee | $ 5,000 | |||
Contract termination prior notice period | 30 days | |||
Collateral Assets Investment Management Agreement | Board of Directors Chairman | ||||
Related Party Transaction [Line Items] | ||||
Contract termination prior notice period | 30 days | |||
Green Bricks Partners Inc (GRBK) | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 47.70% | |||
Solasglas Investment LP (SILP) | ||||
Related Party Transaction [Line Items] | ||||
Management fee | $ 2,014,000 |
COMMITMENTS AND CONTINGENCIES S
COMMITMENTS AND CONTINGENCIES Schedule of Letters of Credit (Details) - Facility | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Line of Credit Facility [Line Items] | |
Facility | $ 400,492,000 |
Butterfield Bank (Cayman) Limited | |
Line of Credit Facility [Line Items] | |
Facility | $ 492,000 |
Notice period required for termination | 90 days |
Citibank Europe plc | |
Line of Credit Facility [Line Items] | |
Facility | $ 400,000,000 |
Notice period required for termination | 120 days |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) € in Millions, $ in Millions | 3 Months Ended | |||
Mar. 31, 2019EUR (€) | Mar. 31, 2019USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Line of Credit Facility [Line Items] | ||||
Amount of letters of credit issued | $ 247.8 | $ 208.3 | ||
Total equity securities, restricted cash, and cash and cash equivalents fair value pledged as security against the letters of credit | 249.3 | 221.7 | ||
Collateral held in trust | 480.9 | $ 463.4 | ||
Short term lease cost | $ 0.1 | |||
Term of contract | 5 years | 5 years | ||
Operating lease, ROU asset | $ 0.3 | |||
Operating lease, liability | 0.3 | |||
Credit facility maximum lending capacity | 6 | |||
Unused commitments to extend credit | $ 0.5 | |||
GRIL | ||||
Line of Credit Facility [Line Items] | ||||
Short term lease cost | € | € 0.1 | |||
ASU 2016-02 | ||||
Line of Credit Facility [Line Items] | ||||
Operating lease, ROU asset | $ 0.3 | |||
Operating lease, liability | $ 0.3 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES Schedule of Commitments and Contingencies (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Operating lease obligations | |
2019 | $ 124 |
2020 | 165 |
2021 | 62 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total | 351 |
Total future obligations by year | |
2019 | 2,574 |
2020 | 4,165 |
2021 | 4,062 |
2022 | 4,000 |
2023 | 104,000 |
Thereafter | 0 |
Contractual Obligations Total | 118,801 |
Convertible Debt | |
Interest and convertible note payable | |
2019 | 2,000 |
2020 | 4,000 |
2021 | 4,000 |
2022 | 4,000 |
2023 | 104,000 |
Thereafter | 0 |
Total | 118,000 |
Loans | |
Loan facility | |
2019 | 450 |
2020 | 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total | $ 450 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)Segment | Mar. 31, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | Segment | 1 | |
Gross premiums written | $ 162,560 | $ 175,125 |
Gross premiums written, percent | 100.00% | 99.99% |
Commercial | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 3,730 | $ 2,644 |
Gross premiums written, percent | 2.30% | 1.50% |
Motor | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 20,183 | $ 22,422 |
Gross premiums written, percent | 12.40% | 12.80% |
Personal | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 2,893 | $ 2,441 |
Gross premiums written, percent | 1.80% | 1.40% |
Total Property | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 26,806 | $ 27,507 |
Gross premiums written, percent | 16.50% | 15.70% |
General Liability | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 982 | $ 1,232 |
Gross premiums written, percent | 0.60% | 0.70% |
Motor Liability | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 79,243 | $ 83,562 |
Gross premiums written, percent | 48.70% | 47.70% |
Professional Liability | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 82 | $ 438 |
Gross premiums written, percent | 0.10% | 0.30% |
Workers' Compensation | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 9,429 | $ 3,559 |
Gross premiums written, percent | 5.80% | 2.00% |
Multi-line | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 20,749 | $ 17,015 |
Gross premiums written, percent | 12.80% | 9.70% |
Total Casualty | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 110,485 | $ 105,806 |
Gross premiums written, percent | 68.00% | 60.40% |
Accident & Health | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 14,871 | $ 29,577 |
Gross premiums written, percent | 9.10% | 16.90% |
Financial | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 7,904 | $ 11,214 |
Gross premiums written, percent | 4.90% | 6.40% |
Marine | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 110 | $ 371 |
Gross premiums written, percent | 0.10% | 0.20% |
Other Specialty | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 2,384 | $ 650 |
Gross premiums written, percent | 1.50% | 0.40% |
Total Other | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 25,269 | $ 41,812 |
Gross premiums written, percent | 15.50% | 23.90% |
SEGMENT REPORTING Geographic in
SEGMENT REPORTING Geographic information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue from External Customer [Line Items] | ||
Gross premiums written | $ 162,560 | $ 175,125 |
Gross premiums by geographical area as a percentage of total gross premiums | 100.00% | 100.00% |
U.S. and Caribbean | ||
Revenue from External Customer [Line Items] | ||
Gross premiums written | $ 137,651 | $ 157,707 |
Gross premiums by geographical area as a percentage of total gross premiums | 84.70% | 90.10% |
Worldwide | ||
Revenue from External Customer [Line Items] | ||
Gross premiums written | $ 24,909 | $ 17,278 |
Gross premiums by geographical area as a percentage of total gross premiums | 15.30% | 9.80% |
Europe | ||
Revenue from External Customer [Line Items] | ||
Gross premiums written | $ 0 | $ 186 |
Gross premiums by geographical area as a percentage of total gross premiums | 0.00% | 0.10% |
Asia | ||
Revenue from External Customer [Line Items] | ||
Gross premiums written | $ 0 | $ (46) |
Gross premiums by geographical area as a percentage of total gross premiums | 0.00% | 0.00% |