Greenlight Capital Re, Ltd. (NASDAQ:GLRE) Q1 2024 Earnings Call Transcript May 11, 2024

Greenlight Capital Re, Ltd. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Thank you for joining the Greenlight Capital Re Ltd First Quarter 2024 Earnings Conference. [Operator Instructions]. And as a reminder, this conference is being recorded. It is now my pleasure to turn the call over to David Sigmon, Greenlight Re's General Counsel. You may begin.

David Sigmon : Thank you, and good morning. 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. Joining us on the call today will be our Chief Executive Officer, Greg Richardson, Chairman of the Board; David Einhorn; and Chief Financial Officer, Faramarz Romer. On behalf of the company, I'd like to remind you that forward-looking statements may be made during this call and are intended to be covered by the safe harbor provisions of the federal securities laws. These forward-looking statements reflect the company's current expectations, estimates and predictions about future results and are subject to risks and uncertainties.

As a result, actual results may differ materially from those expressed or implied. For more information on the risks and other factors that may impact future performance, investors should review the periodic reports that are filed by the company with the SEC from time to time. Additionally, management may refer to certain non-GAAP financial measures. The reconciliations to these measures can be found in the company's filings with the SEC, including the company's recently filed Form 10-Q for the quarter ended March 31, 2024. The company undertakes no obligation to publicly update or revise any forward-looking statements. With that, it is now my pleasure to turn the call over to Greg.

Greg Richardson : Thanks, David. Good morning, everyone, and thank you for joining us today. Greenlight Re had a strong first quarter with gross written premium up 16.5% compared to the first quarter of 2023. We delivered net income of $27 million, which equates to 3.9% growth in fully diluted book value per share during the quarter or 16.5% on an annualized basis. We reported a combined ratio of 98% for the quarter, our sixth consecutive quarter of underwriting profitability. Our underwriting result includes a $10.1 million loss net of recoveries and reinstatement premiums from the tragic collapse of the Francis Scott Key Bridge in Baltimore. This equates to 6.3% combined ratio points for the quarter. Our exposure to this loss is predominantly driven by our specialty book, where we reinsure a number of cedents to provide cover to the international group.

Based on an industry loss estimate of approximately $3 billion, we have assumed a full limit loss to this cover. Our net loss position benefits from excess of loss outwards reinsurance protection with additional protection still available if the industry loss estimate deteriorates. Accordingly, we expect limited variability in our loss reserve from this event. Our underwriting portfolio favors shorter-tail specialty classes such as marine, so a loss of this magnitude falls within our range of expectations despite the Baltimore bridge loss perhaps being the largest marine loss in history. We were able to absorb it during the quarter while still delivering a small underwriting profit. Moreover, we expect the marine market rates to harden as a result of this significant event.

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