Earnings call transcript Q2 2023

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Operator

Thank you for joining the Greenlight Capital Re's Second Quarter Earnings Conference. [Operator Instructions] I would like to remind you that this conference call is being recorded and will be available for replay following the conclusion of the event. An audio replay will also be available under the Investors section of the company's website at www.greenlightre.com.

It is now my pleasure to turn the call over to David Sigmon, General Counsel at Greenlight Re.

You may begin.

David Sigmon

Diego. you, Thank

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

the results company's during this forward-looking securities future and you predictions of are On the to covered to laws. current statements call to risks and I'd of Safe about may made statements These Harbor are remind provisions behalf expectations, subject be estimates that company, uncertainties. and be forward-looking the by intended reflect like federal the and

those As or results a result, may actual differ materially from expressed implied.

For time should other factors review to time. information with filed that investors reports the periodic company performance, are that future more risks the by on from may SEC and the impact the

financial for filings SEC, with ended second be any reconciliations certain may these to to or update XX-Q can the June forward-looking company's obligation XXXX. Additionally, company management revise statements. Form found the refer the company's undertakes measures. The no in The to quarter publicly XX, the non-GAAP including measures

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

Simon Burton

Thanks, Thank morning, for joining David. Good you us. everyone.

XXXX, second book per income growth other income. along funds, of our operations strong For quarter from underwriting value led net This we and of investment in X.X% in and result million. SILP the the share $XX.X was of outperformance reported by with contributions

claims as exposure X.X impacted large we in single Instead, with property our QX of combined the Starting was aren't to these of losses, by seeing Individually, we storms program. are our attach on a enough catastrophe points the primarily the underwriting these call, storm U.S. results; through catastrophe mentioned XX.X% homeowners' to to severe layers. losses ratio

has The severe of storm XXXX. in late December U.S. been extraordinarily since the high activity

storm performance exactly Severe a of would improvement as aside, performance our expect. the abates accelerate rate as increases see this is and storms expect half the we in year. class frequency to severe in Although rapid second I

have the and hard of full catastrophes. our market to starting see in taken improvement reflected excluding advantage in conditions We ratio, the rates we are combined

We earns through few the expect in quarters. to business written next continued as see XXXX improvements over

in Turning We to is not XX.X% to all XXXX. second however, an spread quarter quarter written is million, $XXX.X compared premium our top Important of second to increase across to grew growth the net that production. the line evenly classes. of the note,

grew to We other have Conversely, marine includes specific quarter opportunities premium margin identified exceptional net an in written areas. written of net XX%, average X compared in which reduced we materially In by such in catastrophe specialty as and property of and areas premium lines. classes, our XXXX. commercial these second property the

future driven First, second, business is which in can imply. compensation, of about tranches be periodically reduction in lumpy risk seems maturing than we our cautious and the workers' inflationary price And clearing a by perspective we more exposure. to as replace are top market line class financial the timing the more from mortgage

expect class generally exposure coming add new the about still are We over mortgage and year. positive the to

outlook, underwriting excellent it our consider is we As overall.

demand property due or seen there that And will of not latent have we performance cat historic revisions by as ILS for supply vendor is unlock We bolstered rates increase upward demand a by insurance concerns. believe increase. appears which the be in catastrophe model constrained assumptions. in which be affordability rated to significant reinsurance issues should capital to This

characterized during differentiated products update a made vision on underwriting Turning that quarter; we new X insurance for strengthen each a We by our believe could the to business. innovation brief our ultimately investments business.

few the their quarter business to measurement change plans. as there our did values although not execute partners carried Our events, during were investment materially continue

element of strategy. business our is differentiating a key and attractive model it Our our an of long-term driver innovations is platform and

re-election the I'd will to passing plan last our directors, of directly for Annual years improves of our This the shareholders confidence in General previous linking included the of vote of all promote which our elimination company simplifies share like week. incentive Meeting new the company performance with by all proposals that continue and stock compensation shareholders Finally, And of of structure. dual-class thank structure for reflected approval interests to to capital our company's and a come.

addition our also to subsidiary. financial in of already with Daniel company, services to working our as this Dan a his leadership and is, capacity. as a Irish welcome an of Dan look who congratulate well years of forward brings service alternate new and decades director course, I intimately our Reitman, Director We familiar to senior him experience as as Board. of thanks with valuable

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

David Einhorn

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

loans and Our XX% added contributed macro X.X%.

shorts and X.X%, X.X% Our index detracted and single-name short portfolio respectively.

Tenet analysts up During positions interest year the Sell-side line all advanced second XXX new began earnings the advanced U.S. XXXX XX% largest quarter Partners, return to Healthcare $X.XX its shares estimates current bringing consensus at Energy, single quarterly per in were Gold company $X.XX were An quarter, been share and yesterday, the result. of to in as closings Long contributors derivatives posted were year S&P the exceptional largest another our EPS. S&P XXX expectations short, on two quarter half Brick short Brick lane Green the [indiscernible] bottom rate orders, and our positive CONSOL X.X%. taking as first share. XXXX results, have index Green Index per The XXX%. first beating detractors. and

guided With Energy and release, during CONSOL the quarter its numbers preference the for with to estimates. buybacks and quarter. second new a again this a updated over dramatically cash returning least dividends. free The company stock cash allocation investors to capital company of its strategy second XX% XX% earnings returned exceeded consensus flow of night policy last reported at

the estimates results quarter and beat year. company raised healthcare first And the quarter expectations of the shares that announced also XX% during remainder the gained the as for

continues service show to progress. strategy As the center ambulatory

the this our benefited the came to quarter, U.S. is cut position. that rates belief around macro the which share Reserve our Federal year market interest unlikely to During rates

band We maintained within net be that our we neutral. deem exposure to a

half an spirits as first market. was of animal The the for period to shorting of return anti-value extremely XXXX pockets the difficult

we re-evaluated year it the has inflation will that the the been of from in reaccelerate stickier chance will this the the of moderating, a to market. inflation expect than growing adds If job remain and complacency that so, While by half could to be risks Fed expects market the and second need reasonable on has complicate the here.

equity added we've result, a As some index shorts.

Net returned was portfolio in the in the XXXX. July. X.XXX% XX% investment Solasglas has exposure The in X.X% portfolio year-to-date lost and approximately at of July end

simplified vote, a As the the dual-class of shareholder convertible capital result collapsed structure the structure repaying by and the further notes. company's we

range I while hold the in wide there's good ordinary ability a remain at in Re markets with XX.X% potential risk-adjusted shares. Greenlight juncture the we've made XXXX. returns. constructive now We're current generate equity at And to of outcomes with pleased the of our progress the

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

Faramarz Romer

David and good Thank morning, everyone. you,

per was the share. income million $XX.X $X.XX of or net the diluted XXXX. Our $X.XX share to per in Compared XXXX quarter or period second of in comparable a net diluted million income for $XX.X

$X.XX half we of million first per net a half net income first diluted to or share $XX.X XXXX, of the compared $X.XX or of million in of income per $X.X share the earned For XXXX. diluted

or the We points events ratio to XXXX losses an the ratio quarter X.X% during impacted income XXXX. we million By the period. during equivalent during of combined Adjusting XX.X%, a underwriting compared the United $X.X during catastrophe the no catastrophe losses, million to during $XX.X XX.X% to comparable reported ratio X.X of compared combined second cat points decreased current severe quarter and underwriting related storms of income year XX.X% same of the weather States combined quarter XXXX. to of $X.X a ratio XXXX. had period for underwriting XX.X% was of event the and and in The loss income an our comparison, in second million of by percentage

XX.X%, million to to $XXX.X by Our net the compared premiums same million written in quarter increased $XX.X XXXX. or

in of saw XX.X% in for million property, by second written net negatively discuss was storms, we book book, earned million U.S. by premiums same compared category, or Within briefly mainly property increased casualty net The I Simon and property specialty. business. an primarily performance as now premiums the to or impacted one quarter XXXX. severe $X.X property the our The quarter program, driven increase to each by $XX.X XX% the will commercial related mentioned.

the result, compared to XX.X% composite XXX.X% Property XXXX. a ratio the As business for was in quarter the for

Our driven by written grew primarily million $X or casualty net liability business. general by premiums XX.X%,

as This XXXX. improved ratio our XXXX. by partially in general business compensation second the bound the was mentioned. to and casualty liability compared of in in during of increase the contracts business driven The quarter through The growth Simon was composite in workers' line, quarter to XX.X% innovation XX.X% the reduction new this partnerships net partially for

decrease Our million fluctuations in slightly earlier. specialty due mentioned written The Simon net was as premiums down mortgage X.X%. by or to was our $X premiums,

XXXX. However, XXXX for by compared business income XX.X% for business. the We quarter $XX.X $XX.X total of second The of to investment ratio in of improved the offset second this specialty composite during Marine growth decrease to million to million XXXX. of quarter during and was XX.X% quarter mostly the reported our second the Energy net and compared

million which the earned from earned in income compared $XX.X higher earned investment our in million to interest $X.X our primarily from investment restricted and benefited on XXXX. from We other fund Solasglas rates interest the period income same of cash

increase pound million and primarily to to during withheld costs, quarter of $X.X in on quarter million general of was quarter were and fees syndicates technology primarily investment expenses. quarter. $X.X driven exchange $XX.X professional gains foreign the during strengthening income during by incurred the from Total the the XXXX. administrative second income the the related of XXXX. up by the income The million non-underwriting expenses Other funds Other second related and personnel sterling Deloitte

diluted quarter, At from the of $XX.XX, book an the XX, increase fully per XXXX. was June of XX, second an XX% value X.X% XXXX March and share end of increase our from

X, X-K June previously the included the convertible the facility X-year loan purpose of agreement of Form on primary secured details were August XXXX. announced, loan company As we XX, the The XXXX. our for has a on filed that in notes matured term repaying

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

Operator

from [Operator Billiard Instructions] Our first with comes [indiscernible]. Benjamin question

Unidentified Analyst

can questions, I hope fine. hear me Two you please.

development. reserve on question First

I million level in QX. over like new You QX. comment a question. X.X the from assumptions; of -- the adjustment adjustments negative prudence the on of That's booked embedded in in that's first would try set you to so $XX get to

Jan the in continued was pricing to Second basically I July in X X whether sequential curious improvement question, renewal conditions. this the the you season. in improvement a release, noted was compared

improving in wherever is as Jan. So yes, your good Can priority you final And for basically growing And all question share noted environment business -- the me. allocation. environment the further the between and buyback? us a rank capital from that's for on

Simon Burton

is This Simon.

time or in on point low reserves inflation our in on observation evaluate X because and more, We're every years at ago. So valuation. get the we They question or first not causes to our inflation Everybody industry we've period today. objective. at consistency best new a excess But a for inflation estimate add us which pricing what data I from which products to best is that experienced time at reserve we that on year redundancy, time, is the one the reserves is around be write your strive of in abating consistent we in excess to the reserves we over quality amend our estimate I side. of gets somewhat look appears time, wrong, in best X usually in appreciate simply our estimates. vary And every which or as adequacy last point will estimate.

other in At back pressure point answer. strive period of every for of things you bit good all But original estimate. we expect So to excess on all time, best in might equal, my upward reasons. that the a inflation, for reserves

whether it's one. the at question, a July second January, the from on good there's X a So sequential and improvement pricing

in The characteristic July in is tends January, to be except particularly business fact be Southeast. that's and which tends June is cat X July for a April the and July is to on to a Florida business -- the global of Japan cat different The January side. cat,

and were Camp July June dominated Florida, Southeast by placements, So primarily.

changes sequential compare pricing So it's of business. difficult different very in to of in quality tranches

January significant were subjectively be judge improvements perhaps. and doubt there than in above and in Florida, July So year. last Would over June better those sequentially no to I

There's as remains. prepared sorts not said the flooded in pricing on market, remarks. demand, supply of all think I upwards reasons pressure still I my into that is back for the

our are full late ticking we've June did re-emergence for ILS Florida. seen that up, vendor in of the capacity too although a So in not a bit come models renewals

So and there constrained combination from of improved why demand of investor up and propped a both is supply number affordability are is reasons re-estimation. model a by sentiment

optimistic to be or as a go, or here they the months. good great may two fine. perfectly will very business and were our -- class XX equal in business next in there. not areas prospects other notably about would spot. In assessment. renewals through for Certainly, be across we're sequential one smaller So of a an some way year the that are ago, just our We're had of that go Whether sort as manifest we to of cat as X as one satellite. book, two words, some There improvements

So large class which us July small at the is will there's satellite us. currently that I tailwind for loss in give very of beginning very expect which a significant

So I'm very optimistic overall.

On Directors benefit interest the is at answered believe, for versus equation a of last times standing Board operational a which always which way number conversation entirely each we've same stage. all on at deployment and the this in evaluate is the this the I that and of, our It's in points buybacks. had is of capital our of we best share of what We've question the with your determine shareholders we truthfully priority question shareholders and allocation time.

no through that. that the And good. been have process I over mindful an exceptionally the buyback we're XX operational that increased. to opportunity has multiple last share and There's observation appreciate improved X has doubt has the we proposition And is But about somewhat. months only

So always performing we basis objectives minds. the little and at we on conversation might again, of expect commit interest and a a assessment easier in to year a But to the our shareholder favor opportunity that be will on relative to relative basis, ago. of that ongoing operational front an you keep

Operator

at Greenlight time. Group of [Operator to be and this XXXX questions please she you. Daily second have conference them Should direct call. the assist quarter happy Instructions] There you. are you Equity additional no earnings to at will This questions, concludes Re's follow-up ir@greenlightre.ky Thank any Karen now

You may disconnect. now

Greenlight Capital Re (GLRE) 3 Aug 232023 Q2 Earnings call transcript