Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | May 01, 2020 | |
Document 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, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 30,886,544 | |
Common Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 6,254,715 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Investments | ||
Investment in related party investment fund | $ 189,898 | $ 240,056 |
Other investments | 17,724 | 16,384 |
Total investments | 207,622 | 256,440 |
Cash and cash equivalents | 8,094 | 25,813 |
Restricted cash and cash equivalents | 735,954 | 742,093 |
Reinsurance balances receivable (net of allowance for expected credit losses of $89) | 243,754 | 230,384 |
Loss and loss adjustment expenses recoverable (net of allowance for expected credit losses of $47) | 23,095 | 27,531 |
Deferred acquisition costs | 48,034 | 49,665 |
Unearned premiums ceded | 558 | 901 |
Notes receivable (net of allowance for expected credit losses of $1,000) | 19,200 | 20,202 |
Other assets | 1,738 | 2,164 |
Total assets | 1,288,049 | 1,355,193 |
Liabilities | ||
Loss and loss adjustment expense reserves | 455,669 | 470,588 |
Unearned premium reserves | 177,469 | 179,460 |
Reinsurance balances payable | 114,208 | 122,665 |
Funds withheld | 5,664 | 4,958 |
Other liabilities | 5,064 | 6,825 |
Convertible senior notes payable | 93,076 | 93,514 |
Total liabilities | 851,150 | 878,010 |
Shareholders' 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, 31,179,529 (2019: 30,739,395): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,715 (2019: 6,254,715)) | 3,743 | 3,699 |
Additional paid-in capital | 504,375 | 503,547 |
Retained earnings (deficit) | (71,219) | (30,063) |
Total shareholders' equity | 436,899 | 477,183 |
Total liabilities, redeemable non-controlling interest and equity | $ 1,288,049 | $ 1,355,193 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Reinsurance balances receivable, allowance | $ 89 | |
Loss and loss adjustment expenses recoverable, allowance | 47 | |
Notes receivable, allowance | $ 1,000 | $ 15,000 |
Preferred share capital, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred share capital, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred share capital, issued (in shares) | 0 | 0 |
Common Class A | ||
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) | 31,179,529 | 30,739,395 |
Ordinary share capital, outstanding (in shares) | 31,179,529 | 30,739,395 |
Common Class B | ||
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 - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | ||
Gross premiums written | $ 109,787 | $ 162,560 |
Gross premiums ceded | (678) | (21,401) |
Net premiums written | 109,109 | 141,159 |
Change in net unearned premium reserves | 1,912 | (15,797) |
Net premiums earned | 111,021 | 125,362 |
Income (loss) from investment in related party investment fund [net of related party expenses of $662 and $5,432, respectively] | (42,126) | 30,756 |
Net investment income | 6,837 | 1,567 |
Other income (expense), net | 213 | 1,069 |
Total revenues | 75,945 | 158,754 |
Expenses | ||
Net loss and loss adjustment expenses incurred | 75,697 | 122,865 |
Acquisition costs | 31,739 | 21,526 |
General and administrative expenses | 6,794 | 6,840 |
Interest expense | 1,561 | 1,544 |
Total expenses | 115,791 | 152,775 |
Income (loss) before income tax | (39,846) | 5,979 |
Income tax (expense) benefit | (424) | (73) |
Net income (loss) | $ (40,270) | $ 5,906 |
Earnings (loss) per share | ||
Basic (in dollars per share) | $ (1.11) | $ 0.16 |
Diluted (in dollars per share) | $ (1.11) | $ 0.16 |
Weighted average number of ordinary shares used in the determination of earnings and loss per share | ||
Basic (in shares) | 36,138,245 | 35,972,665 |
Diluted (in shares) | 36,138,245 | 36,364,358 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Limited Partner | Board of Directors Chairman | ||
Management fees | $ 662 | $ 5,432 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - 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, 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) | 5,906 | 5,906 | 5,906 | |||
Balance at Mar. 31, 2019 | 484,315 | 3,672 | 500,814 | (20,171) | 484,315 | 0 |
Balance at Dec. 31, 2019 | 477,183 | 3,699 | 503,547 | (30,063) | 477,183 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issue of Class A ordinary shares, net of forfeitures | 44 | 44 | 44 | |||
Share-based compensation expense | 828 | 828 | 828 | |||
Net income (loss) | (40,270) | (40,270) | (40,270) | |||
Balance at Mar. 31, 2020 | $ 436,899 | $ 3,743 | $ 504,375 | $ (71,219) | $ 436,899 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash provided by (used in) operating activities | ||
Net income (loss) | $ (40,270) | $ 5,906 |
Adjustments to reconcile net income or loss to net cash provided by (used in) operating activities | ||
Loss (income) from investments in related party investment fund | 42,126 | (30,756) |
Loss (income) from equity accounted investment | (888) | (431) |
Net change in unrealized gains and losses on investments and notes receivable | (15,771) | 14,150 |
Net realized (gains) losses on investments | 15,000 | (14,150) |
Foreign exchange (gains) losses on investments | 441 | (408) |
Current expected credit losses recognized on notes receivable and reinsurance assets | 250 | 0 |
Share-based compensation expense | 872 | 1,122 |
Amortization and interest expense, net of accruals | (438) | (389) |
Depreciation expense | 7 | 7 |
Net change in | ||
Reinsurance balances receivable | (13,459) | (26,367) |
Loss and loss adjustment expenses recoverable | 4,389 | (2,491) |
Deferred acquisition costs | 1,631 | (2,728) |
Unearned premiums ceded | 343 | 728 |
Other assets | 419 | (297) |
Loss and loss adjustment expense reserves | (14,919) | 25,269 |
Unearned premium reserves | (1,991) | 15,179 |
Reinsurance balances payable | (8,457) | 10,853 |
Funds withheld | 706 | (1,362) |
Other liabilities | (1,761) | (948) |
Net cash provided by (used in) operating activities | (31,770) | (7,113) |
Investing activities | ||
Proceeds from redemptions from related party investment fund | 19,220 | 57,169 |
Contributions to related party investment fund | (11,188) | (520) |
Change in due to related party investment fund | 0 | (9,642) |
Net change in notes receivable | 2 | (2,603) |
Non-controlling interest contribution into (withdrawal from) related party joint venture, net | 0 | (1,278) |
Net cash provided by (used in) investing activities | 8,034 | 43,126 |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (122) | 411 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (23,858) | 36,424 |
Cash, cash equivalents and restricted cash at beginning of the period (see Note 2) | 767,906 | 703,231 |
Cash, cash equivalents and restricted cash at end of the period (see Note 2) | 744,048 | 739,655 |
Supplementary information | ||
Interest paid in cash | 2,000 | 1,933 |
Non-cash transfer of investments (Note 3) | 0 | 36,673 |
Non-cash addition of right-of-use asset | $ 0 | $ 323 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2020 | |
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. 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, 2019 . 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 global pandemic related to the novel coronavirus (“COVID-19”) is expected to have a significant adverse impact on the property and casualty insurance and reinsurance industry. The Company expects that the economic consequences related to COVID-19 will negatively impact the amount of premiums written by the Company’s cedents and, in turn, by the Company. The Company expects the premium reduction will be more significant in the second quarter of 2020 and persist for the remainder of 2020 and beyond. However, the Company cannot yet quantify the impact, which will depend on the extent and duration of economic contraction, particularly in the United States. Accordingly, significant estimates used in the preparation of the Company’s consolidated financial statements including those associated with premiums, expected credit losses on amounts owed to us and the estimations of loss and loss adjustment expense reserves may be subject to significant adjustments in future periods. The results for the three months ended March 31, 2020 are not necessarily indicative of the results expected for the full calendar year. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting policies have been updated to reflect the adoption of ASU No. 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”). The ASU requires an entity to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. ASU 2016-13 was effective for public business entities for annual and interim periods beginning after December 15, 2019. The financial assets included in the captions “Reinsurance balances receivable”, “Loss and loss adjustment expenses recoverable” (collectively “Reinsurance Assets”) and “Notes receivable”, in the Company’s condensed consolidated balance sheets are carried at amortized cost and therefore affected by ASU 2016-13. Other than the changes relating to the adoption of ASU 2016-13, there have been no other changes to the Company’s significant accounting policies as described in its Annual Report on Form 10-K for the year ended December 31, 2019 . 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 The Company maintains cash and cash equivalent balances to collateralize regulatory trusts and letters of credit issued to cedents (see Note 10 ). 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, 2020 December 31, 2019 ($ in thousands) Cash and cash equivalents $ 8,094 $ 25,813 Restricted cash and cash equivalents 735,954 742,093 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows $ 744,048 $ 767,906 Reinsurance Assets Upon adoption of ASU 2016-13, the Company calculated an allowance for expected credit losses for its reinsurance balances receivable and loss and loss adjustment expenses recoverable by applying a Probability of Default (“PD”) / Loss Given Default (“LGD”) model that considers both the Company’s collectibility history on its reinsurance assets as well as representative external loss history. The external loss history that the Company used included a long-term probability of liquidation study specific to insurance companies. Additionally, the life of each of the Company’s reinsurance treaties was also considered as the probability of default was calculated over the contractual length of the reinsurance contracts. The credit worthiness of a counterparty is evaluated by considering the credit ratings assigned by independent agencies and individually evaluating all the counterparties. The Company manages its credit risk in its reinsurance assets by transacting with insurers and reinsurers that it considers financially sound. For its retrocessionaire counterparties that are unrated, the Company may hold collateral in the form of funds withheld, trust accounts and/or irrevocable letters of credit. For credit risk associated with reinsurance balances receivable, the Company considers the fact that in certain instances credit risk may be reduced by the Company's right to offset loss obligations or unearned premiums against premiums receivable. The Company regularly evaluates its net credit exposure to assess the ability of the retrocessionaires to honor their respective obligations. Upon adoption, the Company recorded an allowance for expected credit loss on its Reinsurance Assets of $0.1 million with an offset to retained earnings. At March 31, 2020 , the allowance for expected credit losses was $0.1 million . Notes Receivable Notes receivable represent promissory notes receivable from third parties. These notes are recorded at cost plus accrued interest, if any, net of valuation allowance for expected credit losses. The Company calculates the allowance for expected credit losses to provide for the risk of credit losses inherent in the lending process. Interest income, change in the allowance for expected credit losses (excluding changes due to charge-offs) and unrealized and realized gains or losses on the notes receivable are included in the caption “Net investment income (loss)” in the Company’s condensed consolidated statements of operations. The allowance for expected credit losses is calculated using a PD / LGD model that leverages the Company’s collectibility history on its notes receivable as well as representative external loss history. The expected loss, as a percentage, is calculated as the product of the PD and LGD and is calculated for each period over the life of a note. The Company evaluates the financial condition of the notes receivable counterparties and monitors its exposure on a regular basis. At March 31, 2020 , the Company considers the notes receivable balance to be collectible and has not experienced any default on payments since inception of these notes. The notes receivable originated between 2015 and 2018. At March 31, 2020 and December 31, 2019 , $0.9 million and $0.1 million , respectively, of accrued interest was included in the caption “Notes receivable” in the Company’s condensed consolidated balance sheets. When there is uncertainty as to the collection of interest contractually due, the Company places the note on non-accrual status. For notes receivable placed on non-accrual status, the notes are presented excluding any accrued interest amount. The Company resumes the accrual of interest on a note when none of the principal or interest remains past due, and the Company expects to collect the remaining contractual principal and interest. Interest collected on notes that are placed on non-accrual status is recorded as interest income when collected, provided that the recorded value of the note is deemed to be fully collectible. Where doubt exists as to the collectibility of the remaining recorded value of the notes placed on non-accrual status, the Company immediately reverses any previous accrued interest through interest income and any payments received are applied to reduce the recorded value of the notes. The allowance for expected credit losses for notes receivable is calculated on the amortized cost excluding accrued interest and interest written off due to non-accrual status. Charge offs of notes receivable are recorded when all or a portion of the financial asset is deemed uncollectible. Full or partial charge offs are recorded as reductions to the amortized cost and deducted from the allowance in the period in which the note receivable is deemed uncollectible. In instances where the Company collects cash that it has previously charged off, the recovery will be recognized through earnings or as a reduction of the amortized cost for interest and principal, respectively. The following table provides a roll-forward of the Company’s allowance for credit losses on notes receivable: Three months ended March 31 2020 2019 ($ in thousands) Balance at beginning of period $ 15,000 $ 9,012 Cumulative effect of adoption of ASU 2016-13 at January 1, 2020 750 — Charge offs (15,000 ) — Net increase (decrease) in allowance 250 — Balance at end of period $ 1,000 $ 9,012 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, 2020 , deposit assets and deposit liabilities were $5.6 million and $56.6 million , respectively ( December 31, 2019 : $5.2 million and $56.9 million , respectively). For the three months ended March 31, 2020 and 2019 , the interest income/(expense) on deposit accounted contracts was as follows: Three months ended March 31 2020 2019 ($ in thousands) Deposit interest income $ 607 $ 1,048 Deposit interest expense $ — $ (48 ) Deposit interest income/(expense), net $ 607 $ 1,000 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 legal and other 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 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 the calculation of earnings (loss) per share for the three months ended March 31, 2020 and 2019 : Three months ended March 31 2020 2019 Weighted average shares outstanding - basic 36,138,245 35,972,665 Effect of dilutive employee and director share-based awards — 391,693 Weighted average shares outstanding - diluted 36,138,245 36,364,358 Anti-dilutive stock options outstanding 875,627 935,627 Participating securities excluded from calculation of loss per share 1,326,613 — 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% ( 2019 : 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 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 this valuation allowance, 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 As discussed above, the Company adopted ASU 2016-13 during the first quarter of 2020 using a modified retrospective transition method. The adoption resulted in a cumulative-effect adjustment to retained earnings of $0.9 million as of January 1, 2020. Recently Issued Accounting Standards Not Yet Adopted In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) (“ASU 2020-01”). The amendments in ASU 2020-01 clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. ASU 2020-01 is effective for public business entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The adoption of ASU 2020-01 is not expected to have a material impact on the Company’s consolidated financial statements. |
INVESTMENT IN RELATED PARTY INV
INVESTMENT IN RELATED PARTY INVESTMENT FUND | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN RELATED PARTY INVESTMENT FUND | INVESTMENT IN RELATED PARTY INVESTMENT FUND 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. 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. On September 1, 2018, SILP also entered into a SILP investment advisory agreement (“IAA”) with DME Advisors pursuant to which DME Advisors is the investment manager for SILP. 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 in the Company’s condensed consolidated balance sheets in the caption “Investment in related party investment fund.” During 2019, SILP’s investment portfolio was de-risked in order to reduce the Company’s investment volatility in the near-term. As a result, a significant proportion of the Company’s investment assets in SILP was held in cash and short-term treasuries as of March 31, 2020 and December 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, 2020 , the net asset value of the GLRE Limited Partners’ investment in SILP was $189.9 million ( December 31, 2019 : $240.1 million ), representing 80.3% ( December 31, 2019 : 81.0% ) of SILP’s total net assets. The remaining 19.7% ( December 31, 2019 : 19.0% ) 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. As of March 31, 2020 , the majority of SILP’s long investments are composed of cash, short-term U.S. treasuries and publicly-traded equity securities, 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, 2020 and 2019 was $(42.1) million and $30.8 million , respectively, and shown in the caption “Income (loss) from investment in related party investment fund” in the Company’s condensed consolidated statements of operations. The change in the net asset value of SILP for the three months ended March 31, 2020 was primarily driven by the impact of changes in fair value primarily attributable to the recent disruptions in global financial markets associated with COVID–19. The summarized financial statements of SILP are presented below. Summarized Statement of Assets and Liabilities of Solasglas Investments, LP March 31, 2020 December 31, 2019 ($ in thousands) Assets Investments, at fair value $ 108,514 $ 162,928 Derivative contracts, at fair value 5,346 6,324 Due from brokers 84,981 68,060 Cash and cash equivalents 107,906 111,046 Interest and dividends receivable 3 47 Total assets 306,750 348,405 Liabilities and partners’ capital Liabilities Investments sold short, at fair value (44,736 ) (47,834 ) Derivative contracts, at fair value (16,969 ) (2,054 ) Due to brokers (8,306 ) (1,180 ) Interest and dividends payable (129 ) (828 ) Other liabilities (57 ) (101 ) Total liabilities (70,197 ) (51,997 ) Net Assets $ 236,553 $ 296,408 GLRE Limited Partners’ share of Net Assets $ 189,898 $ 240,056 Summarized Statement of Operations of Solasglas Investments, LP Three months ended March 31, 2020 Three months ended March 31, 2019 ($ in thousands) Investment income Dividend income (net of withholding taxes) $ 747 $ 1,240 Interest income 209 686 Total Investment income 956 1,926 Expenses Management fee (662 ) (2,014 ) Interest (17 ) (1,374 ) Dividends (145 ) (1,070 ) Professional fees and other (208 ) (380 ) Total expenses (1,032 ) (4,838 ) Net investment income (loss) (76 ) (2,912 ) Realized and change in unrealized gains (losses) Net realized gain (loss) (11,953 ) (7,175 ) Net change in unrealized appreciation (depreciation) (39,793 ) 49,753 Net gain (loss) on investment transactions (51,746 ) 42,578 Net income (loss) $ (51,822 ) $ 39,666 GLRE Limited Partners’ share of net income (loss) (1) $ (42,126 ) $ 30,756 1 Net of management fees of $0.7 million and $2.0 million for the three months ended March 31, 2020 and 2019 , respectively, and net of accrued performance allocation of nil and $3.4 million for the three months ended March 31, 2020 and 2019 , respectively. See Note 9 for further details. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS Investments Other Investments “Other investments” include unlisted securities and investments accounted for under the equity method. At March 31, 2020 , the following securities were included in the caption “Other investments”: March 31, 2020 Cost Unrealized Unrealized Fair value / carrying value ($ in thousands) Private investments and unlisted equities $ 10,420 $ 990 $ (276 ) $ 11,134 Investment accounted for under the equity method — — — 6,590 Total other investments $ 17,724 At December 31, 2019 , the following securities were included in the caption “Other investments”: December 31, 2019 Cost Unrealized Unrealized Fair value / carrying value ($ in thousands) Private investments and unlisted equities $ 10,420 $ 265 $ (4 ) $ 10,681 Investment accounted for under the equity method — — — 5,703 Total other investments $ 16,384 Private investments and unlisted equities include securities that do not have readily determinable fair values. The carrying values of these holdings are determined based on their original cost minus impairment, if any, plus or minus changes resulting from observable price changes. At March 31, 2020 , the carrying value of private investments and unlisted equities was $11.1 million (December 31, 2019 : $10.7 million ), and incorporated an upward adjustment of $0.8 million during the three months ended March 31, 2020 ( 2019 : $0.2 million ), excluding any unrealized gains or losses related to changes in foreign currency exchange rates. There were no individually significant adjustments to the carrying values of private equity securities for the three months ended March 31, 2020 . The Company’s investment accounted for under the equity method represents its investment in AccuRisk Holdings LLC (“AccuRisk”), a Chicago, Illinois-based managing general underwriter focused on employee and health insurance benefits. At March 31, 2020 , the Company held a 58% (December 31, 2019 : 58% ), interest in AccuRisk and had provided a $6.0 million credit facility. In addition to providing capital and funding in support of AccuRisk’s expansion plans, the Company also provides reinsurance capacity for business produced by AccuRisk. The Company has determined that AccuRisk is a VIE, of which the Company is not the primary beneficiary. The Company’s carrying value represents its ownership share of AccuRisk’s net assets. The Company’s maximum exposure to loss relating to AccuRisk is limited to the carrying amount of its investment, plus the credit facility extended. For the three months ended March 31, 2020 , the Company’s share of AccuRisk’s net income was $0.9 million ( 2019 : $0.4 million ), which was included in the caption “Net investment income” 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) defined as follows: • Level 1: Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. • Level 2: Observable inputs other than prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated with observable market data. • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. As of March 31, 2020 and December 31, 2019, the Company did not carry any investments at fair value that were 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.) Financial Instruments Disclosed, But Not Carried, at Fair Value The captions “Notes receivable (net of allowance for expected credit loss)” and “Convertible senior notes payable” represent financial instruments that are carried at amortized cost. The carry values of the notes receivable (net of allowance for expected credit loss) approximate their fair values, which the Company has determined on the basis of Level 3 inputs. The fair value of the convertible senior notes payable is estimated based on the bid price observed in an inactive market for the identical instrument (Level 2 input). |
LOSS AND LOSS ADJUSTMENT EXPENS
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 . At March 31, 2020 and December 31, 2019 , loss and loss adjustment expense reserves were composed of the following: March 31, 2020 December 31, 2019 ($ in thousands) Case reserves $ 198,616 $ 217,834 IBNR 257,053 252,754 Total $ 455,669 $ 470,588 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, 2020 and 2019 is as follows: Consolidated 2020 2019 ($ in thousands) Gross balance at January 1 $ 470,588 $ 482,662 Less: Losses recoverable (27,531 ) (43,705 ) Net balance at January 1 443,057 438,957 Incurred losses related to: Current year 71,525 87,812 Prior years 4,172 35,053 Total incurred 75,697 122,865 Paid losses related to: Current year (10,649 ) (13,277 ) Prior years (73,296 ) (87,375 ) Total paid (83,945 ) (100,652 ) Foreign currency revaluation (2,235 ) 565 Net balance at March 31 432,574 461,735 Add: Losses recoverable 23,095 46,196 Gross balance at March 31 $ 455,669 $ 507,931 The changes in the outstanding loss and loss adjustment expense reserves for health claims for the three months ended March 31, 2020 and 2019 are as follows: Health 2020 2019 ($ in thousands) Gross balance at January 1 $ 18,063 $ 24,502 Less: Losses recoverable — — Net balance at January 1 18,063 24,502 Incurred losses related to: Current year 8,033 11,142 Prior years 851 2,159 Total incurred 8,884 13,301 Paid losses related to: Current year (1,719 ) (1,502 ) Prior years (8,964 ) (9,972 ) Total paid (10,683 ) (11,474 ) Foreign currency revaluation — — Net balance at March 31 16,264 26,329 Add: Losses recoverable — — Gross balance at March 31 $ 16,264 $ 26,329 For the three months ended March 31, 2020 , the estimate of net losses incurred relating to prior accident years increased by $4.2 million , primarily in relation to certain general liability, health and multi-line contracts. The net financial impact of the prior year unfavorable loss development for the three months ended March 31, 2020 , 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 $3.9 million . For the three months ended March 31, 2019 , the estimate of net losses incurred relating to prior accident years increased by $35.1 million that originated primarily from private passenger automobile contracts. These unanticipated automobile 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 year 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 . |
RETROCESSION
RETROCESSION | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 , the Company’s earned ceded premiums were $1.0 million ( 2019 : $22.2 million ). For the three months ended March 31, 2020 , loss and loss adjustment expenses incurred of $75.7 million ( 2019 : $122.9 million ), reported on the condensed consolidated statements of operations are net of loss and loss expenses recovered and recoverable of $3.5 million ( 2019 : $26.3 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, 2020 , the Company’s loss reserves recoverable consisted of (i) $17.9 million ( December 31, 2019 : $21.2 million ) from unrated retrocessionaires, of which $17.4 million ( December 31, 2019 : $20.0 million ) were secured by cash, letters of credit and collateral held in trust accounts for the benefit of the Company and (ii) $5.2 million ( December 31, 2019 : $6.4 million ) from retrocessionaires rated A- or above by A.M. Best. The Company regularly evaluates its net credit exposure to assess the ability of the retrocessionaires to honor their respective obligations. At March 31, 2020 , the Company had recorded an allowance for expected credit losses of $0.1 million ( December 31, 2019 : nil ). |
SENIOR CONVERTIBLE NOTES
SENIOR CONVERTIBLE NOTES | 3 Months Ended |
Mar. 31, 2020 | |
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 the 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. If converted at March 31, 2020 , the face value of the Notes would be cash settled as the Company has assumed that the conversion option will not be exercised due to the share price at March 31, 2020 being lower than the conversion price of $17.19 per share. 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, 2020 and December 31, 2019 , the unamortized debt discount was $5.5 million and $5.9 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, 2020 , the unamortized portion of these costs attributed to the debt component was $2.1 million ( December 31, 2019 : $2.3 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 as of March 31, 2020 , including accrued interest of $0.7 million was $93.1 million ( December 31, 2019 : $93.5 million ). As of March 31, 2020 , the fair value of the Notes was estimated to be $78.6 million ( December 31, 2019 : $94.9 million (see Note 4 Financial Instruments). For the three months ended March 31, 2020 , the Company recognized interest expense of $1.6 million ( 2019 : $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, 2020 and December 31, 2019 . |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [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, 2020 , 306,264 ( 2019 : 235,701 ) Class A ordinary shares were issued to employees pursuant to the Company’s stock incentive plan. 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, 2020 , 145,089 ( 2019 : 89,945 ) Class A ordinary shares were issued to the Company’s Chief Executive Officer (“CEO”) 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. These 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 restricted shares subject to performance conditions was $6.72 ( 2019 : $10.84 ) per share. As the performance conditions associated with these restricted shares have not been met, no compensation cost was recognized relating to these shares for the three months ended March 31, 2020 and 2019 . For the three months ended March 31, 2020 , 18,701 ( 2019 : nil ) 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, 2020 , $0.1 million stock compensation expense ( 2019 : nil ) relating to the forfeited restricted shares was reversed. The Company recorded $0.6 million of share-based compensation expense, net of forfeiture reversals, relating to restricted shares for the three months ended March 31, 2020 ( 2019 : $0.8 million ). As of March 31, 2020 , there was $3.6 million (December 31, 2019 : $2.7 million ) of unrecognized compensation cost relating to non-vested restricted shares (excluding CEO’s restricted shares with performance conditions) which are expected to be recognized over a weighted average period of 2.2 years (December 31, 2019 : 1.6 years). For the three months ended March 31, 2020 , the total fair value of restricted shares vested was $2.1 million ( 2019 : $2.3 million ). The following table summarizes the activity for unvested outstanding restricted share awards during the three months ended March 31, 2020 : Number of Weighted Balance at December 31, 2019 873,087 $ 12.83 Granted 451,353 6.72 Vested (95,848 ) 21.65 Forfeited (18,701 ) 12.78 Balance at March 31, 2020 1,209,891 $ 9.85 Employee and Director Stock Options For the three months ended March 31, 2020 , 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, 2020 was $0.2 million ( 2019 : $0.3 million ). At March 31, 2020 , the total compensation cost related to non-vested options not yet recognized was $1.1 million ( December 31, 2019 : $1.9 million ) to be recognized over a weighted average period of 2.3 years ( December 31, 2019 : 2.8 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, 2020 . At March 31, 2020 and December 31, 2019 , there were 0.9 million and 0.9 million stock options outstanding, respectively, with a weighted average exercise price of $22.68 and $22.68 per share, respectively and weighted average grant date fair value of $10.25 and $10.25 per share, respectively. The weighted average remaining contractual term of the stock options was 5.6 years and 5.8 years , at March 31, 2020 and December 31, 2019 , respectively. Employee Restricted Stock Units The Company issues restricted stock units (“RSUs”) to certain employees as part of the stock incentive plan. These RSUs contain restrictions relating to vesting, forfeiture in the event of termination of employment, transferability and other matters. Each RSU grant 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, 2020 , 60,622 ( 2019 : 48,535 ) RSUs were issued to employees pursuant to the Company’s stock incentive plan. For the three months ended March 31, 2020 , no ( 2019 : 24,165 ) RSUs were forfeited by employees who left the Company prior to the expiration of the applicable vesting periods. The Company recorded $0.1 million of share-based compensation expense, net of forfeitures, relating to RSUs for the three months ended March 31, 2020 ( 2019 : $0.1 million ). Employee RSU activity during the three months ended March 31, 2020 was as follows: Number of Weighted Balance at December 31, 2019 63,582 $ 13.76 Granted 60,622 6.72 Vested (7,482 ) 21.65 Forfeited — — Balance at March 31, 2020 116,722 $ 9.60 For the three months ended March 31, 2020 and 2019 , the combined stock compensation expense (net of forfeitures), which was included in the caption “General and administrative expenses” in the Company’s statements of operations, was $0.9 million and $1.1 million , respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2020 | |
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. The Company has entered into the SILP LPA with DME II. 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 years subsequent to any year in which SILP has incurred a loss, until all losses are recouped and an additional amount equal to 150% of the loss is earned. On February 26, 2019, effective as of September 1, 2018, the Company entered into Amendment No. 1 to the SILP LPA. The amendment was intended to revise the mechanics for calculating the Carryforward Account and Performance Allocation (as defined in the LPA) to take into account withdrawals from and subsequent recontributions of capital to SILP, consistent with the treatment under the Joint Venture. For the three months ended March 31, 2020 , no accrued performance allocation ( 2019 : $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, 2020 , management fees paid by SILP to DME Advisors of $0.7 million , ( 2019 : $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. The Company has entered into a letter agreement with DME Advisors and DME II whereby during the period from June 1, 2019 to June 30, 2020, the portion of the Investment Portfolio held in cash or cash equivalents will not be subject to any management fee or performance allocation. Pursuant to the 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. As of March 31, 2020 , SILP, along with certain affiliates of DME Advisors, collectively owned 47.8% 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, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Letters of Credit and Trusts At March 31, 2020 , the Company had one letter of credit facility, which automatically renews 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) Citibank Europe plc $ 400,000 October 11, 2020 120 days prior to termination date As of March 31, 2020 , an aggregate amount of $138.4 million ( December 31, 2019 : $204.5 million ) in letters of credit were issued under the above facility. As of March 31, 2020 , total cash and cash equivalents with a fair value in the aggregate of $138.8 million ( December 31, 2019 : $213.4 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. The facility contains 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 facility, Greenlight Re will be prohibited from paying dividends to its parent company. The Company was in compliance with all the covenants of the facility as of March 31, 2020 and December 31, 2019 . The Company has also established regulatory trust arrangements for certain cedents. As of March 31, 2020 , collateral of $597.2 million ( December 31, 2019 : $528.7 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 that expires on December 31, 2020. The Company has determined that the current arrangement qualifies as a short term lease. The short-term lease expense for the three months ended March 31, 2020 was $0.1 million ( 2019 : $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 and of March 31, 2020 has recorded a right-of-use asset and a corresponding lease liability of $0.2 million (December 31, 2019 : $0.2 million ). The operating lease expense for the three months ended March 31, 2020 and 2019 was insignificant. Included in the ”Schedule of Commitments and Contingencies,” below, are the net minimum lease payment obligations relating to this lease as of March 31, 2020 . Schedule of Commitments and Contingencies The following is a schedule of future minimum payments required under the above commitments: 2020 2021 2022 2023 2024 Thereafter Total ($ in thousands) Operating lease obligations $ 507 $ 61 $ — $ — $ — $ — $ 568 Interest and convertible note payable 2,000 4,000 4,000 104,000 — — 114,000 $ 2,507 $ 4,061 $ 4,000 $ 104,000 $ — $ — $ 114,568 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, 2020 | |
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 2020 2019 ($ in thousands) Property Commercial $ 2,965 2.7 % $ 3,730 2.3 % Motor 8,233 7.5 20,183 12.4 Personal 2,961 2.7 2,893 1.8 Total Property 14,159 12.9 26,806 16.5 Casualty General Liability 168 0.1 982 0.6 Motor Liability 29,395 26.8 79,243 48.7 Professional Liability 90 0.1 82 0.1 Workers' Compensation 10,324 9.4 9,429 5.8 Multi-line 21,586 19.6 20,749 12.8 Total Casualty 61,563 56.0 110,485 68.0 Other Accident & Health 17,876 16.3 14,871 9.1 Financial 10,162 9.3 7,904 4.9 Marine 356 0.3 110 0.1 Other Specialty 5,671 5.2 2,384 1.5 Total Other 34,065 31.1 25,269 15.5 $ 109,787 100.0 % $ 162,560 100.0 % Gross Premiums Written by Geographic Area of Risks Insured Three months ended March 31 2020 2019 ($ in thousands) U.S. and Caribbean $ 86,050 78.4 % $ 137,651 84.7 % Worldwide (1) 22,796 20.7 24,909 15.3 Asia 941 0.9 — — $ 109,787 100.0 % $ 162,560 100.0 % (1) “Worldwide” is composed of contracts that reinsure risks in more than one geographic area and may include risks in the U.S. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
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 The Company maintains cash and cash equivalent balances to collateralize regulatory trusts and letters of credit issued to cedents (see Note 10 ). 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: |
Reinsurance Assets | Reinsurance Assets Upon adoption of ASU 2016-13, the Company calculated an allowance for expected credit losses for its reinsurance balances receivable and loss and loss adjustment expenses recoverable by applying a Probability of Default (“PD”) / Loss Given Default (“LGD”) model that considers both the Company’s collectibility history on its reinsurance assets as well as representative external loss history. The external loss history that the Company used included a long-term probability of liquidation study specific to insurance companies. Additionally, the life of each of the Company’s reinsurance treaties was also considered as the probability of default was calculated over the contractual length of the reinsurance contracts. The credit worthiness of a counterparty is evaluated by considering the credit ratings assigned by independent agencies and individually evaluating all the counterparties. The Company manages its credit risk in its reinsurance assets by transacting with insurers and reinsurers that it considers financially sound. For its retrocessionaire counterparties that are unrated, the Company may hold collateral in the form of funds withheld, trust accounts and/or irrevocable letters of credit. For credit risk associated with reinsurance balances receivable, the Company considers the fact that in certain instances credit risk may be reduced by the Company's right to offset loss obligations or unearned premiums against premiums receivable. The Company regularly evaluates its net credit exposure to assess the ability of the retrocessionaires to honor their respective obligations. |
Notes Receivable | When 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 collectibility of the remaining recorded value of the notes placed on non-accrual status, the Company immediately reverses any previous accrued interest through interest income and any payments received are applied to reduce the recorded value of the notes. The allowance for expected credit losses for notes receivable is calculated on the amortized cost excluding accrued interest and interest written off due to non-accrual status. Charge offs of notes receivable are recorded when all or a portion of the financial asset is deemed uncollectible. Full or partial charge offs are recorded as reductions to the amortized cost and deducted from the allowance in the period in which the note receivable is deemed uncollectible. In instances where the Company collects cash that it has previously charged off, the recovery will be recognized through earnings or as a reduction of the amortized cost for interest and principal, respectively. Notes Receivable Notes receivable represent promissory notes receivable from third parties. These notes are recorded at cost plus accrued interest, if any, net of valuation allowance for expected credit losses. The Company calculates the allowance for expected credit losses to provide for the risk of credit losses inherent in the lending process. Interest income, change in the allowance for expected credit losses (excluding changes due to charge-offs) and unrealized and realized gains or losses on the notes receivable are included in the caption “Net investment income (loss)” in the Company’s condensed consolidated statements of operations. The allowance for expected credit losses is calculated using a PD / LGD model that leverages the Company’s collectibility history on its notes receivable as well as representative external loss history. The expected loss, as a percentage, is calculated as the product of the PD and LGD and is calculated for each period over the life of a note. The Company evaluates the financial condition of the notes receivable counterparties and monitors its exposure on a regular basis. At March 31, 2020 , the Company considers the notes receivable balance to be collectible and has not experienced any default on payments since inception of these notes. The notes receivable originated between 2015 and 2018. |
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 legal and other 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 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% ( 2019 : 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 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 this valuation allowance, 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 As discussed above, the Company adopted ASU 2016-13 during the first quarter of 2020 using a modified retrospective transition method. The adoption resulted in a cumulative-effect adjustment to retained earnings of $0.9 million as of January 1, 2020. Recently Issued Accounting Standards Not Yet Adopted In January 2020, the FASB issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) (“ASU 2020-01”). The amendments in ASU 2020-01 clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments. These amendments improve current GAAP by reducing diversity in practice and increasing comparability of the accounting for these interactions. ASU 2020-01 is effective for public business entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The adoption of ASU 2020-01 is not expected to have a material impact on the Company’s consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | March 31, 2020 December 31, 2019 ($ in thousands) Cash and cash equivalents $ 8,094 $ 25,813 Restricted cash and cash equivalents 735,954 742,093 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows $ 744,048 $ 767,906 |
Restrictions on Cash and Cash Equivalents | March 31, 2020 December 31, 2019 ($ in thousands) Cash and cash equivalents $ 8,094 $ 25,813 Restricted cash and cash equivalents 735,954 742,093 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows $ 744,048 $ 767,906 |
Financing Receivable, Allowance for Credit Loss | The following table provides a roll-forward of the Company’s allowance for credit losses on notes receivable: Three months ended March 31 2020 2019 ($ in thousands) Balance at beginning of period $ 15,000 $ 9,012 Cumulative effect of adoption of ASU 2016-13 at January 1, 2020 750 — Charge offs (15,000 ) — Net increase (decrease) in allowance 250 — Balance at end of period $ 1,000 $ 9,012 |
Schedule of Interest Income and Interest Expense | For the three months ended March 31, 2020 and 2019 , the interest income/(expense) on deposit accounted contracts was as follows: Three months ended March 31 2020 2019 ($ in thousands) Deposit interest income $ 607 $ 1,048 Deposit interest expense $ — $ (48 ) Deposit interest income/(expense), net $ 607 $ 1,000 |
Schedule of Weighted Average Number of Shares | The table below presents the shares outstanding for the purposes of the calculation of earnings (loss) per share for the three months ended March 31, 2020 and 2019 : Three months ended March 31 2020 2019 Weighted average shares outstanding - basic 36,138,245 35,972,665 Effect of dilutive employee and director share-based awards — 391,693 Weighted average shares outstanding - diluted 36,138,245 36,364,358 Anti-dilutive stock options outstanding 875,627 935,627 Participating securities excluded from calculation of loss per share 1,326,613 — |
INVESTMENT IN RELATED PARTY I_2
INVESTMENT IN RELATED PARTY INVESTMENT FUND (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summarized Financial Information of Investment | The summarized financial statements of SILP are presented below. Summarized Statement of Assets and Liabilities of Solasglas Investments, LP March 31, 2020 December 31, 2019 ($ in thousands) Assets Investments, at fair value $ 108,514 $ 162,928 Derivative contracts, at fair value 5,346 6,324 Due from brokers 84,981 68,060 Cash and cash equivalents 107,906 111,046 Interest and dividends receivable 3 47 Total assets 306,750 348,405 Liabilities and partners’ capital Liabilities Investments sold short, at fair value (44,736 ) (47,834 ) Derivative contracts, at fair value (16,969 ) (2,054 ) Due to brokers (8,306 ) (1,180 ) Interest and dividends payable (129 ) (828 ) Other liabilities (57 ) (101 ) Total liabilities (70,197 ) (51,997 ) Net Assets $ 236,553 $ 296,408 GLRE Limited Partners’ share of Net Assets $ 189,898 $ 240,056 Summarized Statement of Operations of Solasglas Investments, LP Three months ended March 31, 2020 Three months ended March 31, 2019 ($ in thousands) Investment income Dividend income (net of withholding taxes) $ 747 $ 1,240 Interest income 209 686 Total Investment income 956 1,926 Expenses Management fee (662 ) (2,014 ) Interest (17 ) (1,374 ) Dividends (145 ) (1,070 ) Professional fees and other (208 ) (380 ) Total expenses (1,032 ) (4,838 ) Net investment income (loss) (76 ) (2,912 ) Realized and change in unrealized gains (losses) Net realized gain (loss) (11,953 ) (7,175 ) Net change in unrealized appreciation (depreciation) (39,793 ) 49,753 Net gain (loss) on investment transactions (51,746 ) 42,578 Net income (loss) $ (51,822 ) $ 39,666 GLRE Limited Partners’ share of net income (loss) (1) $ (42,126 ) $ 30,756 1 Net of management fees of $0.7 million and $2.0 million for the three months ended March 31, 2020 and 2019 , respectively, and net of accrued performance allocation of nil and $3.4 million for the three months ended March 31, 2020 and 2019 , respectively. See Note 9 for further details. |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Other Investments | At March 31, 2020 , the following securities were included in the caption “Other investments”: March 31, 2020 Cost Unrealized Unrealized Fair value / carrying value ($ in thousands) Private investments and unlisted equities $ 10,420 $ 990 $ (276 ) $ 11,134 Investment accounted for under the equity method — — — 6,590 Total other investments $ 17,724 At December 31, 2019 , the following securities were included in the caption “Other investments”: December 31, 2019 Cost Unrealized Unrealized Fair value / carrying value ($ in thousands) Private investments and unlisted equities $ 10,420 $ 265 $ (4 ) $ 10,681 Investment accounted for under the equity method — — — 5,703 Total other investments $ 16,384 |
Fair Value Hierarchy | The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows: • Level 1: Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. • Level 2: Observable inputs other than prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated with observable market data. • Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. |
LOSS AND LOSS ADJUSTMENT EXPE_2
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Insurance Loss Reserves [Abstract] | |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | At March 31, 2020 and December 31, 2019 , loss and loss adjustment expense reserves were composed of the following: March 31, 2020 December 31, 2019 ($ in thousands) Case reserves $ 198,616 $ 217,834 IBNR 257,053 252,754 Total $ 455,669 $ 470,588 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, 2020 and 2019 is as follows: Consolidated 2020 2019 ($ in thousands) Gross balance at January 1 $ 470,588 $ 482,662 Less: Losses recoverable (27,531 ) (43,705 ) Net balance at January 1 443,057 438,957 Incurred losses related to: Current year 71,525 87,812 Prior years 4,172 35,053 Total incurred 75,697 122,865 Paid losses related to: Current year (10,649 ) (13,277 ) Prior years (73,296 ) (87,375 ) Total paid (83,945 ) (100,652 ) Foreign currency revaluation (2,235 ) 565 Net balance at March 31 432,574 461,735 Add: Losses recoverable 23,095 46,196 Gross balance at March 31 $ 455,669 $ 507,931 The changes in the outstanding loss and loss adjustment expense reserves for health claims for the three months ended March 31, 2020 and 2019 are as follows: Health 2020 2019 ($ in thousands) Gross balance at January 1 $ 18,063 $ 24,502 Less: Losses recoverable — — Net balance at January 1 18,063 24,502 Incurred losses related to: Current year 8,033 11,142 Prior years 851 2,159 Total incurred 8,884 13,301 Paid losses related to: Current year (1,719 ) (1,502 ) Prior years (8,964 ) (9,972 ) Total paid (10,683 ) (11,474 ) Foreign currency revaluation — — Net balance at March 31 16,264 26,329 Add: Losses recoverable — — Gross balance at March 31 $ 16,264 $ 26,329 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [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, 2020 : Number of Weighted Balance at December 31, 2019 873,087 $ 12.83 Granted 451,353 6.72 Vested (95,848 ) 21.65 Forfeited (18,701 ) 12.78 Balance at March 31, 2020 1,209,891 $ 9.85 Employee RSU activity during the three months ended March 31, 2020 was as follows: Number of Weighted Balance at December 31, 2019 63,582 $ 13.76 Granted 60,622 6.72 Vested (7,482 ) 21.65 Forfeited — — Balance at March 31, 2020 116,722 $ 9.60 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Letters of Credit Facilities | At March 31, 2020 , the Company had one letter of credit facility, which automatically renews 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) Citibank Europe plc $ 400,000 October 11, 2020 120 days prior to termination date |
Schedule of Commitments and Contingencies, Fiscal Year Maturity Schedule | The following is a schedule of future minimum payments required under the above commitments: 2020 2021 2022 2023 2024 Thereafter Total ($ in thousands) Operating lease obligations $ 507 $ 61 $ — $ — $ — $ — $ 568 Interest and convertible note payable 2,000 4,000 4,000 104,000 — — 114,000 $ 2,507 $ 4,061 $ 4,000 $ 104,000 $ — $ — $ 114,568 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 2020 2019 ($ in thousands) Property Commercial $ 2,965 2.7 % $ 3,730 2.3 % Motor 8,233 7.5 20,183 12.4 Personal 2,961 2.7 2,893 1.8 Total Property 14,159 12.9 26,806 16.5 Casualty General Liability 168 0.1 982 0.6 Motor Liability 29,395 26.8 79,243 48.7 Professional Liability 90 0.1 82 0.1 Workers' Compensation 10,324 9.4 9,429 5.8 Multi-line 21,586 19.6 20,749 12.8 Total Casualty 61,563 56.0 110,485 68.0 Other Accident & Health 17,876 16.3 14,871 9.1 Financial 10,162 9.3 7,904 4.9 Marine 356 0.3 110 0.1 Other Specialty 5,671 5.2 2,384 1.5 Total Other 34,065 31.1 25,269 15.5 $ 109,787 100.0 % $ 162,560 100.0 % |
Gross Premiums Written by Geographic Area of Risks Insured | Gross Premiums Written by Geographic Area of Risks Insured Three months ended March 31 2020 2019 ($ in thousands) U.S. and Caribbean $ 86,050 78.4 % $ 137,651 84.7 % Worldwide (1) 22,796 20.7 24,909 15.3 Asia 941 0.9 — — $ 109,787 100.0 % $ 162,560 100.0 % (1) “Worldwide” is composed of contracts that reinsure risks in more than one geographic area and may include risks in the U.S. |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES Cash Flow, Supplemental Cash Equivalents Reconciliation (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 8,094 | $ 25,813 | ||
Restricted cash and cash equivalents | 735,954 | 742,093 | ||
Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows | $ 744,048 | $ 767,906 | $ 739,655 | $ 703,231 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES Schedule of Allowance For Credit Losses on Notes Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of period | $ 15,000 | $ 9,012 |
Charge offs | (15,000) | 0 |
Net increase (decrease) in allowance | 250 | 0 |
Balance at end of period | 1,000 | 9,012 |
Cumulative Effect Period Of Adoption Adjustment | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Net increase (decrease) in allowance | $ 750 | $ 0 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained earnings (deficit) | $ (71,219) | $ (30,063) | ||
Provision for uncollectible losses recoverable | 89 | $ 0 | ||
Accrued interest | 900 | 100 | ||
Deposit contracts, assets | 5,600 | 5,200 | ||
Deposit contracts, liabilities | 56,600 | $ 56,900 | ||
Cumulative Effect Period Of Adoption Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained earnings (deficit) | 100 | |||
Provision for uncollectible losses recoverable | $ 100 | |||
Cumulative Effect Period Of Adoption Adjustment | Accounting Standards Update 2016-13 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained earnings (deficit) | $ 900 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES Interest Income and Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounting Policies [Abstract] | ||
Deposit interest income | $ 607 | $ 1,048 |
Deposit interest expense | 0 | (48) |
Deposit interest income/(expense), net | $ 607 | $ 1,000 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES Earnings Per Share Reconciliation (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Weighted average shares outstanding - basic (in shares) | 36,138,245 | 35,972,665 |
Effect of dilutive employee and director share-based awards (in shares) | 0 | 391,693 |
Weighted average shares outstanding - diluted (in shares) | 36,138,245 | 36,364,358 |
Stock Options | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Anti-dilutive stock options outstanding (in shares) | 875,627 | 935,627 |
Restricted stock | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Anti-dilutive stock options outstanding (in shares) | 1,326,613 | 0 |
INVESTMENT IN RELATED PARTY I_3
INVESTMENT IN RELATED PARTY INVESTMENT FUND Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||
GLRE Limited Partners’ share of net income (loss) | $ (42,126) | $ 30,756 | |
General Partner | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investment, ownership percentage | 19.70% | 19.00% | |
SILP | |||
Schedule of Equity Method Investments [Line Items] | |||
Asset redemption notice to general partner | 3 days | ||
SILP | Greenlight Capital Re Limited Partners | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments, fair value | $ 189,900 | $ 240,100 | |
Equity method investment, ownership percentage | 80.30% | 81.00% |
INVESTMENT IN RELATED PARTY I_4
INVESTMENT IN RELATED PARTY INVESTMENT FUND Summarized Statements of Assets, Liabilities and Net Assets of SILP (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Liabilities | ||
GLRE Limited Partners’ share of Net Assets | $ 189,898 | $ 240,056 |
Solasglas Investment LP (SILP) | ||
Assets | ||
Investments, at fair value | 108,514 | 162,928 |
Derivative contracts, at fair value | 5,346 | 6,324 |
Due from brokers | 84,981 | 68,060 |
Cash and cash equivalents | 107,906 | 111,046 |
Interest and dividends receivable | 3 | 47 |
Total assets | 306,750 | 348,405 |
Liabilities | ||
Investments sold short, at fair value | (44,736) | (47,834) |
Derivative contracts, at fair value | (16,969) | (2,054) |
Due to brokers | (8,306) | (1,180) |
Interest and dividends payable | (129) | (828) |
Other liabilities | (57) | (101) |
Total liabilities | (70,197) | (51,997) |
Net Assets | 236,553 | 296,408 |
GLRE Limited Partners’ share of Net Assets | $ 189,898 | $ 240,056 |
INVESTMENT IN RELATED PARTY I_5
INVESTMENT IN RELATED PARTY INVESTMENT FUND Summarized Income Statements of SILP (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Realized and change in unrealized gains (losses) | ||
GLRE Limited Partners’ share of net income (loss) | $ (42,126,000) | $ 30,756,000 |
Solasglas Investment LP (SILP) | ||
Investment income | ||
Dividend income (net of withholding taxes) | 747,000 | 1,240,000 |
Interest income | 209,000 | 686,000 |
Total Investment income | 956,000 | 1,926,000 |
Expenses | ||
Management fee | (662,000) | (2,014,000) |
Interest | (17,000) | (1,374,000) |
Dividends | (145,000) | (1,070,000) |
Professional fees and other | (208,000) | (380,000) |
Total expenses | (1,032,000) | (4,838,000) |
Net investment income (loss) | (76,000) | (2,912,000) |
Realized and change in unrealized gains (losses) | ||
Net realized gain (loss) | (11,953,000) | (7,175,000) |
Net change in unrealized appreciation (depreciation) | (39,793,000) | 49,753,000 |
Net gain (loss) on investment transactions | (51,746,000) | 42,578,000 |
Net income (loss) | (51,822,000) | 39,666,000 |
GLRE Limited Partners’ share of net income (loss) | (42,126,000) | |
Management fee | 662,000 | 2,014,000 |
Investment Advisory Agreement | Board of Directors Chairman | ||
Realized and change in unrealized gains (losses) | ||
Incentive fee expense | $ 0 | $ 3,400,000 |
FINANCIAL INSTRUMENTS Schedule
FINANCIAL INSTRUMENTS Schedule of Other Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Fair value / carrying value | $ 17,724 | $ 16,384 |
Private investments and unlisted equity funds | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Cost | 10,420 | 10,420 |
Unrealized gains | 990 | 265 |
Unrealized losses | (276) | (4) |
Fair value / carrying value | 11,134 | 10,681 |
Investment accounted for under the equity method | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Fair value / carrying value | $ 6,590 | $ 5,703 |
FINANCIAL INSTRUMENTS Narrative
FINANCIAL INSTRUMENTS Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value / carrying value | $ 17,724 | $ 16,384 | |
Income (loss) from equity method investments | $ 888 | $ 431 | |
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% | |
line of credit facility increase accrued interest | $ 6,000 | ||
Income (loss) from equity method investments | 900 | $ 400 | |
Private investments and unlisted equity funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value / carrying value | 11,134 | $ 10,681 | |
Other investments, accumulated gross unrealized holding gain (loss) | $ 800 | $ 200 |
LOSS AND LOSS ADJUSTMENT EXPE_3
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES Change in Outstanding Loss and Loss Adjustment Expense Reserve For Health Claims (Details) - USD ($) | 3 Months Ended | |||||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Case reserves | $ 198,616,000 | $ 217,834,000 | ||||
IBNR | 257,053,000 | 252,754,000 | ||||
Total | $ 455,669,000 | $ 507,931,000 | 455,669,000 | 470,588,000 | $ 507,931,000 | $ 482,662,000 |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||||
Gross balance at January 1 | 470,588,000 | 482,662,000 | ||||
Less: Losses recoverable | (27,531,000) | (43,705,000) | ||||
Net balance at January 1 | 443,057,000 | 438,957,000 | ||||
Incurred losses related to: | ||||||
Current year | 71,525,000 | 87,812,000 | ||||
Prior years | 4,172,000 | 35,053,000 | ||||
Total incurred | 75,697,000 | 122,865,000 | ||||
Paid losses related to: | ||||||
Current year | (10,649,000) | (13,277,000) | ||||
Prior years | (73,296,000) | (87,375,000) | ||||
Total paid | (83,945,000) | (100,652,000) | ||||
Foreign currency revaluation | (2,235,000) | 565,000 | ||||
Net balance at March 31 | 432,574,000 | 461,735,000 | ||||
Add: Losses recoverable | 23,095,000 | 27,531,000 | 46,196,000 | |||
Gross balance at March 31 | 455,669,000 | 507,931,000 | ||||
Prior years adjustment increase (decrease) | 4,172,000 | 35,053,000 | ||||
Net loss reserve on prior contracts increase (decrease) | (3,900,000) | (25,700,000) | ||||
Health | ||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Total | 16,264,000 | 26,329,000 | 16,264,000 | 18,063,000 | 26,329,000 | 24,502,000 |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||||
Gross balance at January 1 | 18,063,000 | 24,502,000 | ||||
Less: Losses recoverable | $ 0 | $ 0 | ||||
Net balance at January 1 | 18,063,000 | 24,502,000 | ||||
Incurred losses related to: | ||||||
Current year | 8,033,000 | 11,142,000 | ||||
Prior years | 851,000 | 2,159,000 | ||||
Total incurred | 8,884,000 | 13,301,000 | ||||
Paid losses related to: | ||||||
Current year | (1,719,000) | (1,502,000) | ||||
Prior years | (8,964,000) | (9,972,000) | ||||
Total paid | (10,683,000) | (11,474,000) | ||||
Foreign currency revaluation | 0 | 0 | ||||
Net balance at March 31 | 16,264,000 | 26,329,000 | ||||
Add: Losses recoverable | $ 0 | $ 0 | ||||
Gross balance at March 31 | 16,264,000 | 26,329,000 | ||||
Prior years adjustment increase (decrease) | $ 851,000 | $ 2,159,000 |
RETROCESSION (Details)
RETROCESSION (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Ceded Credit Risk [Line Items] | ||||
Ceded premiums earned | $ 1,000 | $ 22,200 | ||
Net loss and loss adjustment expenses incurred | 75,697 | 122,865 | ||
Loss and loss expenses recovered and recoverable | 3,500 | 26,300 | ||
Loss and loss adjustment expenses recoverable | $ 27,531 | $ 43,705 | ||
Provision for uncollectible losses recoverable | 89 | $ 0 | ||
AM Best, A- Rating | ||||
Ceded Credit Risk [Line Items] | ||||
Loss and loss adjustment expenses recoverable | 5,200 | 6,400 | ||
Unsecured | Unrated | ||||
Ceded Credit Risk [Line Items] | ||||
Loss and loss adjustment expenses recoverable | 17,900 | 21,200 | ||
Secured | Unrated | ||||
Ceded Credit Risk [Line Items] | ||||
Loss and loss adjustment expenses recoverable | $ 17,400 | $ 20,000 |
SENIOR CONVERTIBLE NOTES (Detai
SENIOR CONVERTIBLE NOTES (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Aug. 07, 2018 | |
Debt Instrument [Line Items] | ||||
Unamortized discount | $ 8,200,000 | |||
Convertible senior notes payable | $ 93,076,000 | $ 93,514,000 | ||
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 | 5,500,000 | 5,900,000 | ||
Unamortized debt issuance expense | 2,100,000 | 2,300,000 | ||
Convertible debt, carrying amount of equity component | 7,900,000 | |||
Accrued interest | 700,000 | |||
Fair value of debt | 78,600,000 | $ 94,900,000 | ||
Recognized interest expense | $ 1,600,000 | $ 1,500,000 | ||
Senior Notes | Senior Unsecured Convertible Notes | Pro Forma | ||||
Debt Instrument [Line Items] | ||||
Debt conversion price (in dollars per share) | $ 17.19 |
SHARE-BASED COMPENSATION Narrat
SHARE-BASED COMPENSATION Narrative (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
General and Administrative Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 900,000 | $ 1,100,000 | ||
Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Fair value (in dollars per share) | $ 6.72 | |||
Stock based compensation expense | $ 600,000 | 800,000 | ||
Number of restricted shares forfeited (in shares) | 18,701 | |||
Shares forfeited | $ 100,000 | 0 | ||
Unrecognized cost | $ 3,600,000 | $ 2,700,000 | 3,600,000 | |
Period of recognition | 2 years 2 months | 1 year 7 months | ||
Fair value of options vested in period | $ 2,100,000 | $ 2,300,000 | ||
Number of RSUs issued to employees (in shares) | 451,353 | |||
Restricted stock | Chief Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 5 years | |||
Fair value (in dollars per share) | $ 6.72 | $ 10.84 | ||
Stock based compensation expense | $ 0 | |||
Restricted stock | Common Class A | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued (in shares) | 306,264 | 235,701 | ||
Number of restricted shares forfeited (in shares) | 18,701 | 0 | ||
Restricted stock | Common Class A | Chief Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued (in shares) | 145,089 | 89,945 | ||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock based compensation expense | $ 200,000 | $ 300,000 | ||
Period of recognition | 2 years 4 months | 2 years 10 months | ||
Options outstanding (in shares) | 900,000 | 900,000 | 900,000 | |
Number of stock options exercised (in shares) | 0 | |||
Vested number of shares (in shares) | 0 | |||
Cost not yet recognized | $ 1,100,000 | $ 1,100,000 | $ 1,900,000 | |
Exercise price (in dollars per share) | $ 22.68 | $ 22.68 | $ 22.68 | |
Weighted average grant date fair value, granted (in dollars per share) | $ 10.25 | $ 10.25 | ||
Weighted average remaining contractual term | 5 years 7 months | 5 years 9 months | ||
Stock Options | Common Class A | Chief Executive Officer | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options granted (in shares) | 0 | |||
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Fair value (in dollars per share) | $ 6.72 | |||
Stock based compensation expense | $ 100,000 | $ 100,000 | ||
Number of RSUs issued to employees (in shares) | 60,622 | 48,535 | ||
Shares forfeited (in shares) | 0 | 24,165 |
SHARE-BASED COMPENSATION Restri
SHARE-BASED COMPENSATION Restricted Shares (Details) - Restricted stock | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Number of non-vested restricted shares | |
Balance at December 31, 2019 (in shares) | shares | 873,087 |
Granted (in shares) | shares | 451,353 |
Vested (in shares) | shares | (95,848) |
Balance at March 31, 2020 (in shares) | shares | 1,209,891 |
Weighted average grant date fair value | |
Balance at December 31, 2019 (in dollars per share) | $ 12.83 |
Granted (in dollars per share) | 6.72 |
Vested (in dollars per share) | 21.65 |
Forfeited (in dollars per share) | 12.78 |
Balance at March 31, 2020 (in dollars per share) | $ 9.85 |
SHARE-BASED COMPENSATION Rest_2
SHARE-BASED COMPENSATION Restricted Stock Units (Details) - RSUs - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Number of non-vested RSUs | ||
Balance at December 31, 2019 (in shares) | 63,582 | |
Granted (in shares) | 60,622 | 48,535 |
Vested (in shares) | (7,482) | |
Forfeited (in shares) | 0 | (24,165) |
Balance at March 31, 2020 (in shares) | 116,722 | |
Weighted average grant date fair value | ||
Balance at December 31, 2019 (in dollars per share) | $ 13.76 | |
Granted (in dollars per share) | 6.72 | |
Vested (in dollars per share) | 21.65 | |
Forfeited (in dollars per share) | 0 | |
Balance at March 31, 2020 (in dollars per share) | $ 9.60 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Jan. 01, 2019 | Sep. 01, 2018 | Mar. 31, 2020 | Mar. 31, 2019 |
SILP | Board of Directors Chairman | ||||
Related Party Transaction [Line Items] | ||||
Performance compensation reduced rate as a percentage of investment income | 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] | ||||
Incentive fee expense | $ 0 | $ 3,400,000 | ||
Investment management fee rate - monthly | 0.125% | |||
Investment management fee rate - annual | 1.50% | |||
Automatic agreement extension, term | 3 years | |||
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 | 47.80% | |||
Solasglas Investment LP (SILP) | ||||
Related Party Transaction [Line Items] | ||||
Management fee | $ 662,000 | $ 2,014,000 |
COMMITMENTS AND CONTINGENCIES S
COMMITMENTS AND CONTINGENCIES Schedule of Letters of Credit (Details) - Citibank Europe plc - Facility | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Line of Credit Facility [Line Items] | |
Facility | $ 400,000,000 |
Notice period required for termination | 120 days |
COMMITMENTS AND CONTINGENCIES N
COMMITMENTS AND CONTINGENCIES Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | |||
Mar. 31, 2020EUR (€) | Mar. 31, 2020USD ($)facility | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | |
Line of Credit Facility [Line Items] | ||||
Number of credit facilities | facility | 1 | |||
Amount of letters of credit issued | $ 138.4 | $ 204.5 | ||
Total equity securities, restricted cash, and cash and cash equivalents fair value pledged as security against the letters of credit | 138.8 | 213.4 | ||
Collateral held in trust | 597.2 | 528.7 | ||
Short term lease cost | $ 0.1 | $ 0.1 | ||
Term of contract | 5 years | |||
Operating lease, ROU asset | $ 0.2 | 0.2 | ||
Operating lease expense | 0 | $ 0 | ||
Operating lease, liability | $ 0.2 | $ 0.2 | ||
GRIL | ||||
Line of Credit Facility [Line Items] | ||||
Short term lease cost | € | € 0.1 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES Schedule of Commitments and Contingencies (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Operating lease obligations | |
2020 | $ 507 |
2021 | 61 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total | 568 |
Total future obligations by year | |
2020 | 2,507 |
2021 | 4,061 |
2022 | 4,000 |
2023 | 104,000 |
2024 | 0 |
Thereafter | 0 |
Contractual Obligations Total | 114,568 |
Convertible Debt | |
Interest and convertible note payable | |
2020 | 2,000 |
2021 | 4,000 |
2022 | 4,000 |
2023 | 104,000 |
2024 | 0 |
Thereafter | 0 |
Total | $ 114,000 |
SEGMENT REPORTING - Gross Prem
SEGMENT REPORTING - Gross Premiums Written by Line of Business (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 1 | |
Gross premiums written | $ 109,787 | $ 162,560 |
Gross premiums written, percent | 100.00% | 100.00% |
Commercial | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 2,965 | $ 3,730 |
Gross premiums written, percent | 2.70% | 2.30% |
Motor | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 8,233 | $ 20,183 |
Gross premiums written, percent | 7.50% | 12.40% |
Personal | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 2,961 | $ 2,893 |
Gross premiums written, percent | 2.70% | 1.80% |
Total Property | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 14,159 | $ 26,806 |
Gross premiums written, percent | 12.90% | 16.50% |
General Liability | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 168 | $ 982 |
Gross premiums written, percent | 0.10% | 0.60% |
Motor Liability | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 29,395 | $ 79,243 |
Gross premiums written, percent | 26.80% | 48.70% |
Professional Liability | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 90 | $ 82 |
Gross premiums written, percent | 0.10% | 0.10% |
Workers' Compensation | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 10,324 | $ 9,429 |
Gross premiums written, percent | 9.40% | 5.80% |
Multi-line | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 21,586 | $ 20,749 |
Gross premiums written, percent | 19.60% | 12.80% |
Total Casualty | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 61,563 | $ 110,485 |
Gross premiums written, percent | 56.00% | 68.00% |
Accident & Health | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 17,876 | $ 14,871 |
Gross premiums written, percent | 16.30% | 9.10% |
Financial | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 10,162 | $ 7,904 |
Gross premiums written, percent | 9.30% | 4.90% |
Marine | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 356 | $ 110 |
Gross premiums written, percent | 0.30% | 0.10% |
Other Specialty | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 5,671 | $ 2,384 |
Gross premiums written, percent | 5.20% | 1.50% |
Total Other | ||
Segment Reporting Information [Line Items] | ||
Gross premiums written | $ 34,065 | $ 25,269 |
Gross premiums written, percent | 31.10% | 15.50% |
SEGMENT REPORTING - Geographic
SEGMENT REPORTING - Geographic information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue from External Customer [Line Items] | ||
Gross premiums written | $ 109,787 | $ 162,560 |
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 | $ 86,050 | $ 137,651 |
Gross premiums by geographical area as a percentage of total gross premiums | 78.40% | 84.70% |
Worldwide | ||
Revenue from External Customer [Line Items] | ||
Gross premiums written | $ 22,796 | $ 24,909 |
Gross premiums by geographical area as a percentage of total gross premiums | 20.70% | 15.30% |
Asia | ||
Revenue from External Customer [Line Items] | ||
Gross premiums written | $ 941 | $ 0 |
Gross premiums by geographical area as a percentage of total gross premiums | 0.90% | 0.00% |
Uncategorized Items - glre-2020
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (886,000) |