Market Overview

Greenlight Re Announces Second Quarter 2019 Financial Results

Share:

Increase in fully diluted book value per share of 3.2% and fully diluted net income per share of $0.42 for second quarter of 2019

Company to Hold Conference Call at 9:00 a.m. ET on Tuesday, August 6, 2019

GRAND CAYMAN, Cayman Islands, Aug. 05, 2019 (GLOBE NEWSWIRE) -- Greenlight Capital Re, Ltd. (NASDAQ:GLRE) ("Greenlight Re" or the "Company") today announced financial results for the second quarter ended June 30, 2019.

Greenlight Re reported net income attributable to common shareholders of $15.3 million for the second quarter of 2019, compared to net loss attributable to common shareholders of $37.4 million for the same period in 2018. The fully diluted net income per share for the second quarter of 2019 was $0.42, compared to a net loss per share of $1.01 for the same period in 2018.

Fully diluted adjusted book value per share was $13.58 as of June 30, 2019, compared to $17.38 per share as of June 30, 2018 and $13.16 as of March 31, 2019.

Management Commentary

Simon Burton, Chief Executive Officer of Greenlight Re, stated, "We increased fully diluted book value per share by 3.2% in the quarter, with a positive contribution from underwriting and strong investment performance. Conditions are improving in multiple lines of business and our diversified underwriting platform is well-positioned to participate in the emerging opportunities."

As announced on May 31st as a result of A.M. Best's decision to revise the outlook of our financial strength rating of A- from "stable" to "negative", the Company has partially de-risked its investment portfolio and commenced a strategic review led by its Board of Directors. The Board has engaged Credit Suisse to assist in the review, which is ongoing.

David Einhorn, Chairman of the Board of Directors, stated, "We were pleased to see our investment portfolio perform well throughout the second quarter as Solasglas posted a positive return of 2.7%, net of all fees and expenses for the quarter and 9.1% for the first half of the year."

Financial and Operating Highlights
Second Quarter 2019

  • Gross written premiums were $152.3 million, an increase from $142.1 million in the second quarter of 2018. The most significant items comprising this $10.2 million increase were the addition of a new workers compensation program along with smaller new programs offsetting lower premiums from certain financial and auto accounts.
     
  • Net written premiums were $129.2 million, compared to $114.9 million reported in the prior-year period. Ceded premiums were $23.1 million compared to $27.2 million in the prior year period.
     
  • Net earned premiums were $120.4 million, a decrease from $128.8 million reported in the prior-year period.
     
  • Net underwriting income of $1.5 million, compared to net underwriting income of $5.1 million reported in the second quarter of 2018.
     
  • A composite ratio for the quarter of 96.1%, compared to 92.7% for the prior-year period. The combined ratio for the quarter was 98.8%, compared to 96.0% for the prior-year period.
     
  • Total net investment income of $18.8 million, compared to a net investment loss of $40.7 million in the second quarter of 2018.

Six Months Ended June 30, 2019

  • Gross written premiums were $314.9 million, a decrease of 0.7% from $317.2 million reported in the prior-year period.

  • Net earned premiums were $245.8 million, a decrease of 10.5% from $274.7 million reported in the prior-year period.

  • A composite ratio for the six months ended June 30, 2019 of 105.8%, compared to 94.5% for the prior-year period. The combined ratio for the six months ended June 30, 2019 was 108.3%, compared to 97.3% for the prior-year period.

  • Total net investment income of $51.1 million, compared to a net investment loss of $185.9 million reported in the prior-year period. Included in total net investment income is a gain $45.2 million on the Solasglas fund which reported a gain of 9.1% for the first six months of 2019.

Conference Call Details

Greenlight Re will hold a live conference call to discuss its financial results for the second quarter ended June 30, 2019 on Tuesday, August 6, 2019 at 9:00 a.m. Eastern time.  The conference call title is Greenlight Capital Re, Ltd. Second Quarter 2019 Earnings Call.

To participate in the Greenlight Capital Re, Ltd. Second Quarter 2019 Earnings Call, please dial in to the conference call at:
   
U.S. toll free 1-888-336-7152
International 1-412-902-4178
   
Telephone participants may avoid any delays by pre-registering for the call using the following link to receive a special dial-in number and PIN.
   
Conference Call registration link: http://dpregister.com/10133285
   
The conference call can also be accessed via webcast at: 
   
https://services.choruscall.com/links/glre190801.html

A telephone replay of the call will be available from 11:00 a.m. Eastern time on August 6, 2019 until 9:00 a.m. Eastern time on August 15, 2019.  The replay of the call may be accessed by dialing 1-877-344-7529 (U.S. toll free) or 1-412-317-0088 (international), access code 10133285. An audio file of the call will also be available on the Company's website, www.greenlightre.com

Non-GAAP Financial Measures

In presenting the Company's results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures, including fully diluted adjusted book value per share and net underwriting income (loss), are referred to as non-GAAP measures. These non-GAAP measures may be defined or calculated differently by other companies. Management believes these measures allow for a more complete understanding of the underlying business. These measures are used to monitor our results and should not be viewed as a substitute for those determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included in the attached financial information in accordance with Regulation G.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company. These risks and uncertainties include the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market fluctuations, trends in insured and paid losses, catastrophes, regulatory and legal uncertainties and other factors described in our annual report on Form 10-K filed with the Securities Exchange Commission.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as provided by law.

About Greenlight Capital Re, Ltd.

Established in 2004, Greenlight Re (www.greenlightre.com) is a NASDAQ listed company with specialist property and casualty reinsurance companies based in the Cayman Islands and Ireland.  Greenlight Re provides risk management products and services to the insurance, reinsurance and other risk marketplaces.  The Company focuses on delivering risk solutions to clients and brokers by whom Greenlight Re's expertise, analytics and customer service offerings are demanded.  With an emphasis on deriving superior returns from both sides of the balance sheet, Greenlight Re manages its assets according to a value-oriented equity-focused strategy that supports the goal of long-term growth in book value per share.

Contact:

Investor Relations:
Adam Prior
The Equity Group Inc.
(212) 836-9606
IR@greenlightre.ky

Public Relations/Media:
Mairi Mallon
Rein4ce
+44 (0)203 786 1160
mairi.mallon@rein4ce.co.uk


GREENLIGHT CAPITAL RE, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2019 and December 31, 2018
(expressed in thousands of U.S. dollars, except per share and share amounts)

  June 30, 2019   December 31, 2018
  (unaudited)   (audited)
Assets      
Investments      
Investment in related party investment fund $ 238,772     $ 235,612  
Equity securities, trading, at fair value     36,908  
Other investments 15,761     11,408  
Total investments 254,533     283,928  
Cash and cash equivalents 14,934     18,215  
Restricted cash and cash equivalents 745,908     685,016  
Reinsurance balances receivable 287,739     300,251  
Loss and loss adjustment expenses recoverable 40,787     43,705  
Deferred acquisition costs 56,754     49,929  
Unearned premiums ceded 25,724     24,981  
Notes receivable 26,802     26,861  
Other assets 2,622     2,559  
Total assets $ 1,455,803     $ 1,435,445  
Liabilities and equity      
Liabilities      
Due to related party investment fund $     $ 9,642  
Loss and loss adjustment expense reserves 470,066     482,662  
Unearned premium reserves 237,099     211,789  
Reinsurance balances payable 136,472     139,218  
Funds withheld 12,908     16,418  
Other liabilities 6,163     5,067  
Convertible senior notes payable 92,357     91,185  
Total liabilities 955,065     955,981  
       
Redeemable non-controlling interest in related party joint venture     1,692  
       
Equity      
Preferred share capital (par value $0.10; authorized, 50,000,000; none issued)      
Ordinary share capital (Class A: par value $0.10; authorized, 100,000,000; issued and outstanding, 30,538,447 (2018: 30,130,214): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,715 (2018: 6,254,715)) 3,679     3,638  
Additional paid-in capital 501,916     499,726  
Retained earnings (deficit) (4,857 )   (26,077 )
Shareholders' equity attributable to Greenlight Capital Re, Ltd. 500,738     477,287  
Non-controlling interest in related party joint venture     485  
Total equity 500,738     477,772  
Total liabilities, redeemable non-controlling interest and equity $ 1,455,803     $ 1,435,445  


GREENLIGHT CAPITAL RE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

For the three and six months ended June 30, 2019 and 2018
(expressed in thousands of U.S. dollars, except per share and share amounts)

  Three months ended June 30   Six months ended June 30
  2019   2018   2019   2018
Revenues              
Gross premiums written $ 152,340     $ 142,109     $ 314,900     $ 317,234  
Gross premiums ceded (23,141 )   (27,237 )   (44,542 )   (57,080 )
Net premiums written 129,199    
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