Earnings call transcript Q4 2022

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Operator

Thank you for joining the Greenlight Capital Re Limited Fourth Quarter and Year-End December 31, 2022, Earnings Conference Call. [Operator Instructions]

It is now my pleasure to turn the call over to Karin Daly, Greenlight Re’s Investor Relations representative and Vice President at The Equity Group.

You may begin.

Karin Daly

Thank you, Donna, and good morning. remind will this following be of event. to being call the like the and recorded available would you conference that is conclusion I for replay section also under An at be replay company's website will the audio Investors of the www.greenlightre.com. available

call Greenspan. the be will Chairman on Simon and Chief Chief David the Board, us Einhorn; Officer, Financial Burton; today Joining Executive of Officer, Neil

call. Officer, question-and-answer Accounting Romer, and Treasurer the Financial current session Chief the for Chief Officer will Faramarz available Additionally, incoming be of and

On rather uncertainties I'd expectations, if made historical statements the that this or to behalf future risks company, reflect predictions Private about forward-looking subject Reform current of materially. vary statements safe or and call A intended company's and actual Securities assumptions uncertainties. to the you of to risks remind the and Act the XXXX. the materialize company's like results are more provisions by may be estimates during be are not inaccurate, These of to of Litigation are harbor prove forward-looking results if could be underlying covered and or fact, one but statements

as refer factors company's reconciliations as forward-looking or whether XXXX. financial required remarks. undertakes non-GAAP events obligation no to to the may as Securities law. statements, update the with result information, company revise December The Form by XX-K can filings including as year measures any their XX, except ended for these Commission, to publicly of otherwise, or future a during new management Additionally, be certain found the measures well risk The in Exchange and

Simon to Simon? to turn With that, it now is the Burton. call over pleasure Mr. my

Simon Burton

will and conference posted of good reinsurance renewals substandard Greenlight year and years, your part, a back The of January and Ukraine. several you broken industry year. you, look a watershed it combination rate weather industry first everyone. for to improvements In we for keep on this unexpected Greenlight I us. Greenlight welcome tragic frequent Thank Thank the believe large in period this as events, consider COVID call, that whole. and and and stubbornly war Re for joining because and underwriting Re morning, Karin, at was has, the underpricing results. This pattern didn't hurricane with and each up the inflation,

year in outlook wrote we believe general, Overall, at I with business whereas classes subjectively marine. a next we January The experienced saw rate struggled war at the to the and been single in as the the reinsurance XXXX. but or placements aviation, risk were our Elsewhere for X have, profitable. the for market commonly first capital or catastrophe time the XXXX average, classes, now losses The business XX% are portfolio, moderate that our is classes short-tail quality still such digits in increases meaningful very in and that and I've catastrophe, is the XXXX objectively resulting that's our on clear catastrophe by short-tail demand our rate of is said that market these industry void were that in This property significant I'm In business up a in specialty good impacted and property represent better business for the good market over in terror XXXX an underwriting of X, career on pleased close classes consistently view, for In XX%. specialty around the rates in excellent. XX% generally plan. in improvements my unlucky property by catastrophe, although this. that

highlights on full year and XXXX financial comment to I'd Now of the results. quarter like of the some fourth

our of value metric per in I per X.X% fully when fourth and performance for peers saw value this am book an increase the and pleased in key book the the our of report diluted quarter fully to diluted for quarter In year. decline exceptional that the during is a driver Our most share. metric, increased gain by return share of was The X.X% during the XX.X% with by the year. XX.X% XXXX, Solasglas largest fund

underwriting XXX.X% reasons going combined peer While into significantly the X main There broadly for ratio it the our for with was year line expectations XXXX. was group, were our of in this. behind

were war and percentage First, X.X experienced total year, from mainly combined an ratio. losses to we that in beyond well Hurricane catastrophic Ukraine contributing points the Ian, average our

incurred reserving accounted our pressure including of our relationship workers' U.S. years inflationary estimates X.X runoff the our from came ratio a losses book, on Secondly, reserves. of and to increased a by reinsurance the runoff legacy combined large compensation auto prior revisions of couple sources, other pressure and in The deposit points. of

of that XX% XXXX was revenue Underwriting from partnerships derived premium. our innovation net written

We of Innovations business. are sixth now our in our steadily year building

pick to are over increased the last and in as last showing despite winners years few We investor resiliency waning year's of insurtech now have our sector. valuations ability appetite demonstrated the

differentiated by launch an Innovation important been However, at milestone Lloyd's. XXXX Syndicate the Innovations to has our launched Earlier while And we material in not was developing due to in midyear objective strategy. in our starts, premium was long-term innovation underwriting supported business year, partnerships. XXXX the our build this volume always the

potential strategic Innovations of excited business. the by are We our

years, is announced for new we the This Romer role. X of out ready us we farewell for me, in my CFO. team a is Orderly new the path. him to that Neil, wish Tuesday future. who setting this all the about is to we agreed next the time and sketched the instrumental of Faramarz colleagues very has on join end with that Neil on as and I has he's with also say best although plan Faramarz succession to always exciting an us exceptional gratifying up result have leaving years at uncertain of ago. the who to Finally, been succession Greenlight, our for us at stepping XX March been for

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

David Einhorn

Thanks, Simon, everyone. XX.X% morning, fund fourth and returned quarter. in The Solasglas good the

added contributed X.X%. contributed The and longs X% Our XX.X%. short macro portfolio

Long during at the were in from credit XXX positions results, sector some S&P the X.X%. largest Green an shares housing Green material some were of Green hedging and XX% the Brick private stocks $XX.XX detractors. year. in winner agreed-upon the advanced advanced index largest took of quarter, recoup was high-yield short default swaps Twitter Brick and our as earlier a steep Elon short company quarter Twitter quarterly price positions, Musk the decline broadly as the the their of the our basket of the During to Brick positive housing position our contributors undisclosed exposure in Partners

Healthcare rallied, the sector the long We established The largest these a company operator hedge of As stocks housing our medium-sized an in basket Tenet new surgery position fourth quarter. during is hospitals was and centers. detractor. ambulatory

grown XXX. XX.X% decline shares, mix to of centers. had the The of toward we count buyback ambulatory sizable its and Solasglas XX.X% enabled the years, will shift has the S&P announced company be significant, flows. to by transitioned higher-margin recent The a of sustainable XXXX, generate company its the has we which This to excellent what by cash believe a its expect fund about company returning business compared end shrink In an share XX% and for XXXX. the

added Our X.X%. short positions contributed and result XX.X% macro to this

about were positions generating just alpha. significant long flat, Our

a that the both strong, that employment Our inflation. appears to rates XXXX quite the raising near and deficits result full time to $X quantitative than significant participants economy to employment. we inflation Fed Fiscal appears rate the the be from trillion short-term XXXX, policy Despite for a peak in assets variable believe the of remain and with bank embedded is accelerating rates to we also that high with and quantitative the ability sector, or X% policy outlook trillion about in household tightening earn be during below remains be to appears of shifting monetary sensitive more in sticky easing the only income inflation, compared market rate has economy on believe that and is boost stimulative. to to want at now Short-term stimulative, interest to most cash very The acknowledge. peak $XX which is liabilities.

to expect. many head than expect higher here from longer stay participants for rates there We market interest and

the As The to a best inflation X.X% fourth declined in succeed February and in and portfolio is portfolio rates. XXXX positioned the X.X% portfolio and XX% the have with a Solasglas end sticky rising was market returned interest Net therefore to bear quarter. the exposure in result, of X.X% February. advanced approximately we at in January through investment

go, within. our also, Faramarz X to exciting smooth the always Neil years. like improve see but company and to transition, the to We're Neil our reporting, budgeting CFO while for over and Greenspan last financial over role. the to with sad to thank, you'll controls able are to service pleased be financial his helped mentoring the take enhance from I'd promote it's

has a everyone and said, worked will as Faramarz Faramarz, made As and him. Congratulations, to been fantastic. us hired way XXXX. time. He enjoy think He's a up of it Financial sure his And in call finance our Simon I team meeting member Chief was Officer. I'm very on with it's long this

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

Neil Greenspan

Thank you, and good David, morning, everyone.

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

of million fourth and $XX.X income ended $X.XX year quarter or quarter. the the losses There were XX.X%. the underwriting ratio during per a reported XX, was diluted income net our million no that For We XXXX, significant $X.X individually combined December share. of during occurred

these incorporates QX, back from seating that benefited favorable for of is the loss development this company contracts favorable financial of on impact a portfolio, commissions $X.X primary development to year $X.X experienced loss significant mortgage loss during company to was acquisition The on reason the favorable Therefore, costs. which roughly driver development. million development million offset insurers. basis, the our net of adverse prior related the increased Although the by a disconnect profit

quarter in the We general $X.X the administrative and fourth due $X.X were were the Gross reported fourth of business, nonunderwriting our the fourth from comparison, fund These and expenses XXXX. fourth expenses earned earned fourth recognized in million the and other our by increase specialty income other additional exposure increase partners. This $X.X quarter. reported increase on premiums of to quarter compensation the relating was of decision created in of growth exchange our $XXX.X Syndicate $X.X and net the primarily X% XXXX were in total general primarily from quarter exchange to income higher interest investment partially in quarter XXXX ceded the written of including We workers' XXXX. By fourth investment and cash. and recognized quarter income during million from million to of of investment quarters. innovations Premium XXXX. our other to due incurred of foreign income, during to underwriting and losses the $XX.X XXXX million foreign premiums in XXXX. This represented Total of up $XX.X fourth share-based material underwritten reversal an million $XX.X million. of reduce newly by of The gains. quarter quarter was partial in liability compensation of income the Solasglas XXXX primarily operational in of risks. other gains restricted fourth a increase million net property, an We due the quarter from prior motor FX our recognized million, to million, was $X.X personal personal of the offset costs

XXXX the value per Nonunderwriting expenses XX. $XX.XX, our in insignificant. of X.X% diluted increase an book fully At of was incurred of quarter September quarter, share fourth the the fourth from were end

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

Operator

XXXX Quarter Year Greenlight Full concludes you. Fourth Re's Call. This Earnings now and Thank Conference

may disconnect. You

Greenlight Capital Re (GLRE) 9 Mar 232022 Q4 Earnings call transcript