GLRE - Earnings call transcript Q4 2021 | Greenlight Capital Re, Ltd.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for joining the Greenlight Re Conference Call for the Fourth Quarter of 2021 Earnings. All participants will be in a listen-only mode. [Operator instructions]. Please note, this event is being recorded. The Company reminds you that forward-looking statements that may be made in this call are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

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

Simon Burton

everyone, joining the Good thanks for call. morning, and

to a my get the by weeks, people adversity we I'd Before for in discuss started, a hope to minutes. a hostilities. and recognize the past few faced moment end this conflict over the two express I further the will Ukrainian take quick

from by strategic positioning and with a offset interest grew Let's our performance book and XXXX, In the per G&A quarter year our investments, ahead. value and share financial Solasglas, with review the contributions we underwriting, of positive fourth start each by for of of X.X%, partly expenses.

final the runoff that auto reserve the industry, For was and pressure, points This car the for in releases have the the six full and although level Recall losses go-forward on by large an performed few performance year. years, that better our headwinds XXXX. this highest our the of over unusually were These as I'm Solasglas year replacement from insurance the we activity consecutive business. list severe year another gains of combined headwinds long the value natural with to generated strategic performance million last cat to the was around rapid in January XXXX, repair was Xst, the aside, the resulted with XXXX. five There as investments gains. Xst, second January XXX.X% with highlight unrealized it XX.X as book been auto of reducing of for Innovations of expected. stepdown the investments ratio added carry in of a inflationary million of catastrophes, also steadily than on pleased challenging auto The history. portfolio, offset cat quarters costs suffered exposure completed of of of underwriting a XX.X year,

from of quarter a in realized net million MGA. our traditional first also XX.X of the of tax position gain a We XXXX the in divestment more

I'd and four like past some recap we years. have of over to highlight strategy made our the changes the Next,

portfolio number First, in the our small a summary large our markets joined XXXX, I dominated underwriting accounts. a company of by When of strategy. open was

Our of margin individual with lower counterparty underwriting risk, more higher considerably is now with business, diverse potential. by and line

underwriting optimal we time, array the priced, XXXX, achieving that Of diversification This am process on events, risk-managed, a that's portfolio course, properly to believe pleased took of renewal but insurance this brings January actions took I with but rebalancing complete. that the and key results. is wider of assuming Xst, I to some diversified, this global report exposure is risk now to

auto XX% be a XXXX. to estimate it's amounted accounts Here roughly the top to X%. changes. this represented Today, sense of XXXX, of give you of total In are a premium. of couple in XXXX, will our the premium. XX% highlights XX% In We five

current Looking portfolio risks, are there of characteristics. at a the diversified key few

record has of with favorable strong view track our We a Lloyd's have our market significantly, partnership aligns Lloyd's in grown outperformance which that conditions.

quota business, our loss share. excessive conventional and balance loss a grown more between resulting in have excessive We

costs. Russian result, Re And brokers, claims relationships We exposure. with we relatively inflation direct not volume writing companies does are a are Greenlight individuals. any concerned about as insurers, low long-tailed have the any a or on of of or Russian risk other

adhering sanctions likely sanctions to Russia. are us on book. to The on volume We The likely impact is with of exposure premium expect from that our be will clients war loss our our specialty strictly present minor.

We no have no to notices. specific received damage and claim on information insured assets

an have So, we incurred. developed losses not yet estimate of

Innovations stage InsurTech, would and mainly early or XX from years, InsurTech we war Re a in respected launched Greenlight strategy, MGAs operational to space. back active created have most and period, I the in this Moving by come distribution have four teams the the differentiated offering the over strategy. like XXXX, to Innovations one Greenlight's Over March, the made our we away Unit. in partnerships discuss last built of and investments We product

open innovation of into competitors often more capital proportion have investor, XXXX, attractive, the ours. While in started With increase XXXX. is that will months, lower of to and linked a opportunities be our Industrywide, than there risks their an portfolio, over as over prospect emerge the on time market our these of to last adopt our primary underwriting market XX X% partners and focus is for interest combined similar visibility the placement the appreciation was over scale business. InsurTech our been early-stage strategy this profitable than comparable their operations in has premium businesses. as In potential number to expense, significant with our our should time,

to we our growth. is rather some X, importance eye-watering high-profile who have Lloyd’s that is of partners alone. the and Each companies process driven profits. valuations, will of announced underwriting costs struggled In of will our We have publicly some key part for who investment revenue share be January, the identifying understand of on their X, to growth contain InsurTechs, quoted profitability collapses which launching we portfolio X, price And the X, seen focused by than syndicate confident by enable will rapid Unit. syndicate we the value at In shareholder combination in partners CEO. became Solasglas, brand I us licenses. focus from area time are with XXXX. our Lloyd’s global the This to to rating exclusively company and any potential access support our since than sourced business further our create for business better the I'm that investment now position in is excited with the on positioned them InsurTech about each Innovations of providing

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

David Einhorn

in X.X%, and shorts Solasglas Simon, good Thanks, detracted Longs contributed morning, X.X%. and everyone. fund X.X% returned XX.X%. The fourth the contributed quarter. macro

returned index quarter, the XXX the During S&P XX%.

Green XXXX, terms structure. of an biggest company and from opportunity another and in during company capital most to continue the our Scientific, year, are suddenly stock undemanding this Brick XXX% driver segment, to by its XX% totaled bond has company. December, polymer pricing stock account double-digit anything as We the price continues largely In XXXX. money, there $X.XX and wasn't issued titanium quarters. participate in company Danimer advanced Brick will results. swap TiOX believe past This percentage of its X.X of company Green that positive convertible Last aggressive the decided floral the currently as quarter. repurchase XXXX. its long years. moved XX%. projections share XX% XX% We'll fourth we which on the Brighthouse reported company from XX% we way, a continued reduced earned the per of the Brighthouse a in were expected to shares Financial this quarter. structure. multiple level EPS gained two over well the to favorable the positions was up reported the XX% these it trades long Partner our as earnings Danimer of XXXX, results. Financial, was index short another current in at strong We of given and the in our spinoff and was An stock common in X.X Our was capital Scientific responsible in in are result, coming fourth and should node. obvious fell during PE terms, as investment year-over-year, that believe Analysts to And And full sold most expect stock The position, tight currently the The to hastily it times to needed quarter, equity XX% businesses, Partners, in the which us largest this. dioxide XX% Chemours year and XXXX the mismanagement its The convertible expect to its Greenford primary individual raise We repurchases, used escalate. collect quarter our accretive out growth. up cumulatively contributors. trades the for both the hedge the of position and and were upside shares XXXX. the share Chemours, detractors. expected and for remains fourth but week, of the its about unattractive MetLife for times stock advanced in in it a quarter, coupon. $X.XX develop. Since The at supply share value. a were book

be for believe We to continue company's enormous that there demand will the plastic. biodegradable

X.X% value short, in speculative and and stocks, current structural in turned. combined consider number macro is in positioned and in problem, has believe with the challenging another turned now environment, February, We are year-to-date. ago, certain it years believe performance. we returned we returned tide is up positions. The now for what we that that We and at to to showing of investing, after the inflation benefit portfolio year a be long, X.X% Looking a bubble our has believe tide a Solasglas from our

the ended net Solasglas returned approximately Over end and at exposure the at in XX% has investment XX% roughly the XXXX, of months of last end February. the portfolio was XX February XX.X%. XX,

were bubble Let is accelerate. excesses. an so war, perspective, number reasonably current is have me the already positioning We inflation extends, million There crisis problem, seems a market Ukraine. Ukrainians events. numbers relatively recent we topped already certain the With which appears now Similarly, while say this pandemic a an positioned X turbulence be displaced will stock and the untold not well the of tight conflict. in deaths. a ago, expand. the pro-inflation From of the stocks did at And just of onset of Russia's place, of the about are year war trends as to unwind over posture, the speculative turn continue invasion were the to accelerated a the had we too accelerating investment in as the few that anticipate and and to to things

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

Neil Greenspan

David, X.X% of XX, from $XX.XX, increase our the September book per value the an and Thank XXXX. good of from was and diluted end morning. XX, fourth December fully quarter, At you, X.X% share

per $X.XX or net income million, share. for quarter Our the was $XX.X

ended year favorable of XX, quarter’s the income $X.X underwriting or We reported the per million. contracts included results The quarter, from a fourth financial $X.XX and $XX.X deposit $XX.X of XX.X%. our of prior impact accounted net income For million, combined share. during December underwriting development and XXXX, a million, year with net losses of was ratio $X.X million a

from the The combined percentage adjustments improved impact reinsurance impact While contracts between are we the deposit any did to ratio, by quarter. X.X quarter to We the our divided used processes material fourth are increased reinsurance accounted adjustments while our estimate separately of accounting those deposit these ratio. points, although accounting, apply during recognize was loss our accounted to expense same. components. our impact ultimate losses reduced actuarial combined which this ratio disclosed the underwriting not COVID-XX The the estimates development

Ida, our cat For floods these of X.X European and contributed losses ratio Uri. hailstorms, the losses winter total, being to percentage the Catastrophe the with combined storm generated XXX.X%. this hurricane was by bulk year, and points

for percentage Our adjusted of XXXX. was combined of the ratio increase the XX.X%, fourth an points over quarter fourth quarter X.X

that of adjusted on related portion inflation to QX increase the Simon XXXX, the auto earned combined in we that auto a during business the the increased This disproportionate loss the which first on increased three discussed picks year, the ratio. we During our costs Solasglas of a quarter’s earlier. led to quarters impact significant

ratio combined XX.X%. XX, continue was the adjusted We not an provide do ended combined ratio to Our measurements to for XXXX, adjusted due for quarters. year December intend

to was in Our the year and trends underwriting investors results. variability intention in last understand introducing the measure our help

this enhance performance. not the since we understanding use our investors’ However, does underwriting concluded of measure that of significantly have

written Lloyd’s reinsurance and coverage financial decreases The fourth lines. syndicates. XXXX. This $XXX.X third from offset focus to were quarter significant growth drivers gross combined the by in relates intend business to disclosure we we the to million of in the - and X% forward, on other party our premiums results. increased Going provide for partially Gross the increase of ratio me, primarily our our quarter, excuse underwriting lines up written was

of the the up XX% for Lloyd's both premiums gross December the ended quarter expenses Premiums the year which year XXXX. quarter an XX, administrative also million, insignificant increase $XXX.X December driven by were unchanged end roughly during from was For from XXXX. incurred written were XXXX, XX, quarter and Total were the the ceded in fourth general $X.X XXXX, business. and million, growth of

For total our higher our million, the investments. up total $XX.X expenses. professional an $XX.X We and was additional quarter. of million investment investment million reported primarily investment the Innovations the technology other from income This of our recognized net Innovations million year, increased $X earned of $XX.X was from in fund, during Solasglas driven XXXX. the XX% fourth income, We G&A by from fees, Unit, increase and growth

ended million, representing earned Solasglas return the XX, For investment the investment our $XX.X on portfolio. year fund XXXX, X.X% associated December in

$XX.X driven other investment investments. by gains our Our income totaled million, strategic on

Now to the to call I questions. the up will operator turn open back and it

Operator

come [Operator with Instructions] And Bell will from first the Bell ahead. Brands. go David Please question

David Bell

Can My time is of Thank question to mix the versus following on business. the today. business, how leading is comment first split reinsurance? you you. Appreciate the the the in the

Simon Burton

good David, morning. Sure.

and distinction that credibility the in when high a don't - you at into two. business with I versus resourced, tried a a class, It's me the disclosures, expertise Leading fluid. give But lead to never class an we do insurer the business and something let is follow. client. it's disclosed. that quite would you've of idea split that a So, fully It's got point participant that great history determined why underwriting. is metric it's between material which of don't likely of to the visibility or of you’re we've degree and financial think and and disclose of

but As be a a the make cogent follower, you've into not decision, entire visibility all need equipped and to the as sort of well underwriting as profile. terms quite of market got resources in operational you may you of

a of depending the a a should make distinctions case. do be classes, follow, that some in of ourselves. classes, between we where no between business on and lead amount we the we So, view We we helps. class. there. and tremendous In distinction have implied though if There how that's expertise In lead other may the visibility less quality underwriting,

David Bell

does help. It Okay.

of given a little innovation the mix? that, What’s Just more more affect the leading does bit that push, there it on Is (indiscernible). despite the innovation? nature

Simon Burton

Sorry.

yes. was innovations, question Your the

innovations our that the as to So, that business, different. underwriting, is connects

described So, approach. what I is a open market reinsurance more moment ago

rights market. side, reinsurance then On access the our the their and generally with negotiate innovation as - business an We an early-stage partners. we’re might hit MGA the and to investor often build business

well So, distinction. following. we Having same we said and there's apply may our direct optionality because that, yes, intermediary. leading also be a In there. partner less those we'll frictional relationship with the There's bit have need expense for an have less cases, a versus

as or a an necessarily example, which And a not our are of in insurance, travel solution for have insurance, it companies. title better expert everybody may portfolio lead more We’re of prominent both examples of to be for with well. mix on between be from quality no the imply behind Again, a a the implied there'll significant Greenlight there you - but difference be underwriting, program should there that them. participation shouldn't

David Bell

question have Could capital of for roughly you is on you million - billion in super. that? more - the the - strategy, general. how do a $XXX Okay, with more understand other five compete while $X capital? your me my help or do And some general you in competitors second How with

Simon Burton

Yes, that's a question. good

Having see underwriting of do said as everything, I'm can don't decisions. is as times we pick size our power have that's company XX peers have that or what market in much cherry and the into case the the day-to-day typically. don't who larger to a certainly placement all so demand wade placements we agility. business, directly, that, that involved a it's a our of So, class

larger a more a way strategy tactics and with We underwriting We management here. rather difficult find and it have moment, dispersed a that structure pivot flat very in peers to in do. layers in can on of underwriting

view, by my relationships the power good. of our lack we market tremendously way, agility. in a So, our And significantly for by broker make are enhanced up

We time Brokers valued often are response value and partners. very clear by our monstrous and sort balance of agility, sheet. over a thinking

So, make we difference. do as for that though feel than we more up

David Bell

it the stock as additional final my not comp you. not? so And to add-on during to management the thank purchase that, tied plan, is stock you performance, question price And quarter? much. any then Okay, why is and not, then an if to Thank why

Simon Burton

So, shareholder value addition to in large part value disclosed we've one. number our shareholder and from operational in our as growth That's metrics, tie call into results. the

that price, direct to extent is a impacts my stock there So, in link is very which the tie-in. yes, view, a

management's component large itself. of a is Second, comp stock

explicitly stock in. something So, that performances we're is interested

So, I alignment very and consider the very interest. connection our I think between yes, strong. plans shareholders our clear there's

buybacks, the On the all best consider we at our times of capital. use

today, various stand capital opportunity areas operation, of see and market in things to deploy our As being underwriting, we Solasglas, Innovations. open both

reducing and mind keep rating the We implications to scale and that also of scale implied our have with business agencies. in the partners with of the

in as rather Recently, buy consideration led the less. that's future. to us always that's could well. So, back change That

David Bell

you Thank Okay. much. very

Operator

ahead. Desmond Thank the you. next will Please OAM. Kinch And go with question come from

Desmond Kinch

for Hi. I couple questions of David. have a

of earlier the investment significantly to which the that how Greenlight and this was due that that discount currently following over years you more a shares The related years, David, time? was should certainly but bit the trade? IPO, how investment of now. do expect in returns XX% rating change is first give than Capital, last which Re’s Thank you Re is, recent less And than NAV, at one may you. second ratio of more a insurance almost asked, expectation times to returns dynamic sort the Re color eliminate of one and Could perhaps ratio reduce is in in is, Greenlight roughly to be question so Greenlight the Greenlight the one has numbers or times changed some constraints, one sense

David Einhorn

results on I to Yes. correct risk the earn investor narrow discount reduce year of of to you're relating Look, along do our a to market suggest Relating the yet making work forth. the on I that how have value, job or call, it in that. expect harder in that structured equity. progress absorbed amount we the sustained After we of we've the the reasonable believe as to investment putting order the of And a on IPO. side well bit we're in terms XXXX terms we the the transformed the the I of think the communications the to second that so we're Simon to portfolio. decided your to it like can basis in difficult book the company and strategy, keep diversification, how taking we've up going better by that into had of company we're to true, demonstrate to XXXX, on to a return underwriting, to was don't mentioned accepted and I explaining - ways the the going in would do think at a it. has been be market was question,

amount in a the here, effectively of constraints - there's managed XX% over to than of able investments also approximately but make. on equity similarly it's bit investing fund, less the because presently we're hedge the little to are We

the do a So, we than partnership. with gross the hedge Solasglas we run funds bigger

the that - were preference that I company be be the is equity. by. as to to rating of the an so, and to the is hope is wind the XX% agencies about consider if continue will can we thumb issue is, that that we about it's my effect open about And of effectively equivalent to increased. put time the This result My review to with is, something goes personal with

Desmond Kinch

you. Thank

Operator

proceed, from Daniel The next actual Daniel. will DeYoung he’s question be - private instructions]. investor. with Please [Operator

Unidentified Analyst

Yes. just increasing. float really, managed would Actually, I really question today. the answered you to my see by you that's like

a like get of to But a was that's last one, think top investment good the business business been flow to primarily investors But I to by you. it's see on would and Innovation quarter cylinders, good done it lot the see the really of strategy. really then for yes, good and operating increased. you all firing to on the work to I are that. hard managed see be the Thank investing

David Einhorn

Thank you.

Operator

and and Equity Daily Ladies concludes have sir. any them you, today’s to call. follow-up XXX-XXX-XXXX, our Group of and this you. thank Karen will question-and-answer concludes gentlemen, please be at thus Should direct session, Inc. The you And to questions, happy assist she

Thank replay you remind information is of attending Re The about website our a this now today’s that call for We at available on and has pertinent Greenlight you conference also other concluded. www.greenlightre.com. presentation.

may You disconnect. now

Greenlight Capital Re (GLRE) 9 Mar 222021 Q4 Earnings call transcript