GLRE - Earnings call transcript Q2 2020 | Greenlight Capital Re, Ltd.

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Operator

Good day and thank you for joining the Greenlight Re Conference Call for the Second Quarter of 2020 Earnings. The company reminds you that forward-looking statements that may have been made in this call are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are not statements of historical fact, but rather reflect the company's current expectations, estimates and predictions about future results and events that are subject to risks, uncertainties and assumptions, including those enumerated by the company's Form 10-K/A for the year ended December 31, 2019, and other documents filed by the company with the SEC. If one or more risks or uncertainties materialize or if the company's underlying assumptions prove to be incorrect, actual results may vary materially from what the company projects. The company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except required by law. we conducting remarks, question-and-answer prepared the will a be session. After to I Mr. conference would Instructions] turn now CEO, [Operator Re's like the Greenlight over to Burton. Simon Please go ahead, sir.

Simon Burton

am joining Good progress solid fronts call you and quarter. several report for the morning today. we thank in I pleased during made to that our

underwriting improved of repositioning results, of continues result XX.X%. impact I'll over underlying and shortly, the COVID-XX, business of reflects performance underwriting our three Our the generated past discuss of This the which excluding years. a ratio the trend combined

During business thereby this contracts our excess lines our higher-margin time, we it, have It share loss some replacing expanded participation we the of quota when of support with lower-performing years, three we of increased write the XXXX, economics of selective past the business the and have contracts in two to so acutely we renew as over that premium we keep. notable the of not thirds of that was approximately that enforced July been decided have is business.

Looking in market started now that forward, the is improvement last accelerating. year conditions

past seen specialty improved risk significantly with placements the few have classes terms. months, in Over we

capacity, have clear healthy that attempts to in pricing improvements of place sign We are often also market. with shortfalls with only a met risks seen modest a

see Given benefit movements, quarter our will income optimistic over more is are the statement the year. negligible, significant timing the these the recent we that this of next pricing impact on although we

several manageable to small whole, the continues exposure comparison be result as and a to factors. pandemic the reflects Our a industry in that to

directors' uncontested, travel exposed coverage some and exposure of minimal highly such insurance, and business, event long-term liability is to life. have as We officers' cancellation, lines trade credits, the where of

to financial our cedents. seen mortgage paid delinquencies, in has offset impact we profit market been the increase an reductions in by While our on commissions portfolio has the

as contracts. period the the therefore, shown in business we auto business to underlying US. newer mortgage we write, has the last frequency mortgage and the two cut a riskier our lockdown we through of in over reduces anticipated, years, And our on the amount back which reduction exposure Additionally, claim

Our combined multi-class $X interruption This catastrophe ratio of estimate and second primarily Lloyd's identifiable contracts our certain contributed our XXX.X%. total to with loss property exposure. quarter COVID-XX X.X estimate to net contracts points relates loss of million business

financial repurchase we Regarding our shares to key share grew opportunity value metric, the book we significant to a X.X% advantage per at book. by of took as discount

environment by $X.X And is contributing overall winners the valuation strategic notable The On side, I'm Solasglas million of about made in of our David the certain investments pandemic it's our has overall, our innovation among investment losers our progress partners. and both and broader a the moment, excited with gain to innovations in will quarter division's this potential. pleased unit. and result that exposed but discuss the a investment

recently Best with annual has AM theme with rating. concluded common months, minus notable Finally, the recent to in Ratings pressure review been industry in decision our the downgrades. A affirm ratings several our a

move to look AM into to value much our plans shareholder with are We we decision, market pleased build I as forward Best's improved conditions. and executing

Now David. call I'd to the to turn over like

David Einhorn

flat. Simon, The and everyone. second the the while shorts X.X% macro Thanks and Longs contributed quarter. detracted good Solasglas fund was morning, returned X.X%, in X.X% essentially

returned the results disruptions. The reported QX breaking company Brick quarter, Index Company Chemours Brick positions Partners the Long During Green Green XX.X%. margin XX% growth Brighthouse biggest Partners, the the winners. S&P as XXX were despite in and returned and Financial COVID-related record

very strong market allow improved earnings to climate. market first putting grow reductions product and Green On significant the diversified quarter level Brick reported has the the fierce the XX% years, geographic in its line appreciated, the quarter even of its affordability Management call, maintain and management line, ahead. economic in company Over strategically couple second both the the on product broader Shares to current the good segment. quarter anticipation footprint second entry including and earnings CapEx the share growing of past cuts Chemours announced challenging as its Green expects or Brick cost abated. climbed liquidity and in of off Tuesday, its position a to several rallied August start. stock over company's of quarters

such quarter of to Brighthouse of of buying months year. in GAAP was share, have target, of that second the the by quarter, the end four back first of a as Book market only per quarter of earnings returned Additionally, end of stock May, announced the US XX% amount total due XXXX, repurchasing XX% just the earnings. and intends that XX% weaknesses total the company's Financial an additional down purchase per helped yet and outstanding X.X in next months. other year implying reiterated remained quarter $XXX the the first June homebuilding, the shares $XX, stock company of as company automotive some the its paint the Chemours yet In more single-family share the the over the resilient in during billion end to of do-it-yourself hedges. of at to $X.X paint. markets, accelerated Management offset roughly including repurchases, its current shares times the XX at adjusted value trades demand markets Brighthouse XX. share first much than on of price entire XX% its

shutdown which customer, doesn't sales, or a regulatory as conforms reported that match accounting company sales to sales, due a detracted as the its recognized than The collections increase car credits. we regulatory sharp by a pandemic. production in credit market doubled expense Tesla the to these largely by profit by would relate a GAAP, in quarter. Our generate in cash the April stock its The was reporting more first performance it quarter profit the to Tesla Absent driven short surprised facilities the doubt the credit for the weeks-long loss. from of have despite Tesla's

to roughly XX% XXXX exposure at brining approximately Solasglas July, the portfolio long Net of was and for quarter at of in negative the end X.X% the result in end the second XX% July. X.X%. investment year-to-date returned Solasglas

While we're market, composition much the roughly the the We brought with reinsurance surplus, in to increase portfolio third surplus coupled about the while uncertainty investment rest one financial to plan the opportunities to COVID-XX throughout markets, excited the of from investment portfolio. the has our the XX% further. of Re pandemic Greenlight year diversifying of hardening

repurchases Tim markets book can are As investment quarter best share during believe make. because is as this of that made we our we value, the discuss, the XX% will substantial improving,

results. to like financial discuss turn Now call the to to I'd over Tim the

Tim Courtis

Thanks, David.

XXXX, a for net of small $XX,XXX the of reported compared quarter second in to net of Greenlight period loss the income comparable Re XXXX. For $XX.X million

business. $X.XX reported a per loss compared months the a income loss million $XX.X and specialty For the to XXX.X%. of lines, the company $XX.X in XXXX. gross period. the months of quarter business million the written first $X.XX nonrenewal certain income XXXX, the of XX, decrease fully and The for ended six of net same Partially was ratio The to gross XXXX, of of being net compared of business. share auto to $XXX.X net months and offsetting we from share was for million the million XXXX. first earned decreased combined during energy year including premiums prior in small for decrease per loss written year, $X.X net reported period due the diluted premium a crop, new prior ceded Both, primarily six June six premiums of the several were XX% underwriting cyber of Net a from

second Solasglas income on income investment reduction net XX% of office incurred during the the contributed which which than to assets, or collateral estimates of and in the $X.X million offset second X.X half of travel, XX investment As reflecting losses basis Solasglas, gain points and on quarter. A Simon mentioned, lower loss of XXX%, the The COVID-XX. combined decrease first year net Other $X quarter. investment for lesser over investment $X.X and in expenses quarter income points rate net income to net is year-to-date personnel million from COVID-XX fund. This from significant million due during reductions percentage estimated X.X the decrease period. from related million by million, $X.X gains during interest a $XX.X certain quarter's includes percentage costs was were during the was We the combined shelter-in-place of which was grew resulting during added the which on a primarily more of prior results included ratio points million, innovation on investments General lower costs valuation extent, our administrative March, net $X.X total ratio. of in the quarter includes to incurred investment approximately the XXXX orders. of XXXX,

share share of share XX, approximately a discount March fully decrease per of per X.X% During average and XX% June reported per company's at X.XX XXXX, average XXXX. value XX, $XX.XX million $XX.XX the June value. at of XX% book from as was diluted $X.XX book repurchased second from the XX XXXX, quarter, fully $XX.XX, increase approximately of The an shares the diluted on per reported a a March company XX, share cost from at

Islands. of was second take the year, shareholders' takes moved October shelter-in-place XX, the place meeting, now usually the which on annual of in to meeting the will The orders in Our logistics Cayman place quarter XXXX. due

the back the to for it questions. and turn call up operator I'll Now open

Operator

Thank Solo question Please you. [Operator Mikel come Instructions] go Abasolo from Capital with the Management. first will ahead. And

Mikel Abasolo

completing where you authorization, some for like to but believe completing what the you. concise it give you first the thank be buying? color taking short to soon? remains from and This I Will your authorization far I Thank if one. buyback is on my And intention question. the is it would will you is today. keep very on that are renew you you Well, discount

Simon Burton

Simon. the question. Mikel, for thanks This is

So as buy current discount is back to opportunity the tremendous. David shares at the said,

ultimately. heard, only the opportunities Of goes. opportunities, our But for buyback to there are discount that like are is the reverse, we'll we'd is support business, as of a you've a to whereas and the interests capital evaluate balance of tremendous improving. now, course, competing It the between it using see and market continuing amount

Mikel Abasolo

Okay, thank you.

Operator

today's [Operator conference question will this you session for this questions the there and in now you Thank appears Instructions] disconnect. queue, conference. attending today's and no it the as well may as At conclude are question-and-answer time,

Greenlight Capital Re (GLRE) 9 Aug 202020 Q2 Earnings call transcript