Q3 2023 Greenlight Capital Re Ltd Earnings Call
Speaker 1: Thank you for joining the Greenlight Capital RE Limited 3rd Quarter 2023 Earnings Conference.
Thank you for joining the Greenlight capital R. E Limited third quarter 2023 earnings conference. At this time participants are in a listen only mode. A question and answer session will follow the formal presentation. You May press star one at any time to be placed in the quest.
Speaker 1: A question and answer session will follow the formal presentation.
Speaker 1: may press star 1 at any time to be placed in the question queue. It is now my pleasure to turn the call over to David Siegel.
In Q.
It is now my pleasure to turn the call over to David Sigman Green light or ease General Counsel you may begin.
Speaker 2: Thank you, Alicia, and good morning. I would like to remind you that this conference call is being recorded and will be available for replay following conclusion of the event. An audio replay will also be available under the investor section of the company's website at www.greenlightree.com.
Thank you Alicia and good morning.
Like to remind you that this conference call is being recorded and will be available for replay following conclusion of the event.
An audio replay will also be available under the investors section of the company's website at Www Dot Greenlight re dot com.
Speaker 2: Joining us on the call today will be Chief Executive Officer Simon Burton, Chairman of the Board David Einhorn, and Chief Financial Officer, Farmers Romer.
Joining us on the call today will be Chief Executive Officer, Simon Burton Chairman of the Board, David Einhorn, Chief Financial Officer farmers rubber.
Speaker 2: 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 Law.
And 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.
Speaker 2: These forward-looking statements reflect the company's current expectations, estimates and predictions about future results and are subject to risks and uncertain.
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 perform.
Speaker 2: As a result, actual results may differ materially from those expressed or implied.
Speaker 2: 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.
Investors should review the periodic reports that are filed by the company with the SEC from time to time.
Speaker 2: Additionally, management may refer to certain non-GAAP financial measures.
Additionally, management may refer to certain non-GAAP financial measures. The reconciliations to these measures can be found in the companys filings with the SEC, including the company's Form 10-Q for the third quarter ended September 32023, the company undertakes no obligation.
Speaker 2: The reconciliation to these measures can be found in the company's filings with the SEC, including the company's form 10Q for the third quarter and did September 30th, 2023. 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 Simon. Thanks, David. Good morning.
Update or revise any forward looking statements with that it is now my pleasure to turn the call over to Simon.
Thanks, David Good morning, everyone and thank you for joining us.
Speaker 3: For the third quarter of 2023, we reported net income of $13.5 million and growth input value per share of 2.3%.
For the third quarter of 2023, we reported net income of $13 $5 million and Bruce and book value per share was two 3%.
Speaker 3: This brings our year-to-date performance to net income of $69.2 million and growth in book value per share of 13.7%.
This brings our year to date performance to net income of $69 $2 million and growth in book value per share of 13, 7%.
Third quarter net income was primarily driven by strong underwriting performance with a combined ratio of 91, 2% and an underwriting profit of $14 $4 million.
Speaker 3: Third quarter net income was primarily driven by strong underwriting performance, with a combined ratio of 91.2% and an underwriting profit of $14.4 million.
Speaker 3: This result includes a strengthening of reserves that relate to our legacy business of approximately four combined ratio points, which indicates that the ongoing book performed around an 87% combined ratio.
This result includes a strengthening of reserves that relate to our legacy business has approximately four combined ratio points, which indicates that the ongoing book performed around an 87% combined ratio.
Speaker 3: This result can be further broken down into an open market book performing around the mid-80s combined ratio and an innovations book performing around mid-90s. Recall that we've identified our innovations business as strategically important to the company in the long term. Although it has come with a lower margin underwriting trade-off in the short term, as we execute on that strategy.
This result can be further broken down into an open market book to forming around the mid Eighty's combined ratio and an innovation spoke to forming around mid nineties.
Recall that we've identified our innovations business as strategically important to the company in the long term, although it has come with a lower margin underwriting trade off in the short term as we execute on that strategy.
Speaker 3: The work we have done over the last few years has repositioned the overall underwriting business to be both more balanced and to contain higher margin potential. And the results of that work are now evidence.
The work we have done over the last few years has repositioned the overall underwriting business to be both more balanced and contain higher margin potential and the results of that work and now evident.
Speaker 3: We grew net written premium in the third quarter to $168.3 million, an increase of 15% compared to the third quarter of 2022 as we take advantage of the attractive market conditions.
We grew net written premium in the third quarter to $168 $3 million, an increase of 15% compared to the third quarter of 2022.
We take advantage of the attractive market conditions.
Speaker 3: As we are now in early November , our underwriting focus is turning to the important January 2024 renewals. We believe the underwriting outlook for 2024 is excellent. We have not seen a material increase in reach or unscobacity and demand for our core products remain strong.
As we all know in early November our underwriting focus is turning to the important January 2024 renewals. We believe the underwriting outlook for 'twenty 'twenty. Four is excellent we have not seen a material increase in reinsurance capacity and demand for our core products remained strong and.
Speaker 3: In recent weeks, we met with many of our clients, Sunbrokers in Monte Carlo and Bodden-Bodden, and we were encouraged by their feedback in support of the upcoming January renewals.
In recent weeks, we met with many of our clients and brokers and Monte Carlo and Baden Baden and we're encouraged by that feedback and support to the upcoming January renewals.
Turning to innovations.
Speaker 3: We made two new investments in the third quarter to bring our total portfolio to over 35 positions. While the market is challenging with many insure tech struggling to raise capital, our positioning as a market leader in the early stage insure tech space means we see a wide variety of opportunities that allows us to select the approach to growing the portfolio.
We made two new investments in the third quarter to bring our total portfolio to over 35 positions. While the market is challenging with many ensure tank struggling to raise capital.
<unk> as a market leader in the early stage insure tech space means we see a wide variety of opportunities that allows us a selective approach to growing the portfolio.
Speaker 3: During the first quarter of 2024 and subject to regulatory approval, we intend to establish a separately licensed, segregated portfolio company, which will provide access to our ensure-tech partners, enabling them to retain more of their own risk.
During the third quarter first quarter of 2024 and subject to regulatory approval, we intend to establish a separately licensed segregated portfolio company.
Each will provide access to our insured tech partners, enabling them to retain more of their own risk.
Speaker 3: This enhancement to our existing ensure a tech ecosystem will bolster our position as a leader in this importance and growing area for the industry. Now I'd like to turn the call over to David.
This enhancement to our existing insured tech ecosystem will bolster our position as a leader in this important and growing area for the industry.
Now I'd like to turn the correlated to David.
Thanks, Simon and good morning, everyone. The solace class find return of negative 6% in the third quarter, our loss declined four 1% in our shorts gained one 7% and macro contributed two 8% during the quarter. The S&P 500 declined three 3% largest.
Speaker 4: The FALAS class fund returns negative 0.6% in the third quarter. Our loans declined 4.1% and our short-scained 1.7% and macro contributed 2.8%. During the quarter, the SP500 declined 3.3%.
Speaker 4: Largest positive contributors were long investments in console energy and capri holdings and a macro position that benefited from both declining stock prices and higher long term interest.
Positive contributors for long investments in Consol energy and Capri holdings, and a macro position that benefited from both declining stock prices and higher long term interest rates are.
Our long position in Green brick partners was the largest attractor.
Speaker 4: Console Energy shares at least 55% in the quarter. The most notable development was that the company updated its capital allocation policy and formally abandoned its dividend in favor of buybacks. With a large buyback, the PE expanded from about three times to about five times.
<unk> energy shares against 55% in the quarter. The most notable development was at the company updated its capital allocation policy and formally abandoned its dividend in favor of buybacks.
A large buyback the P expanded from about three times to about five times and we expect to see is P. Multiple continue to pick up from its current five times as a company is just the majority of its cash flow to continue aggressively repurchasing its shares.
Speaker 4: And we expect to see this PE multiple continue to pick up from its current five times as the company uses the majority of its cash flow to continue aggressively repurchasing its share.
Speaker 4: to pre-advance 50% after agreeing to be sold to Tapestry for $57 per share.
Pre advanced 50% after agreeing to be sold to tapestry for $57 per share.
Speaker 4: We use this as an opportunity to exit our position as the companies from the mental have been deteriorating since the last holiday season.
We use this as an opportunity to exit our position as the company's fundamentals have been deteriorating since the last holiday season.
Speaker 4: We developed a thesis in early August that long-term interest rates would continue rising and the stock market would fall. Thus reversing the typical negative correlation between stock and bond prices.
We developed a thesis in early August at long term interest rates would continue rising in the stock market would fall that's reversing the typical negative correlation between stock and bond prices, we implemented a position consistent with our thinking which benefited as the S&P 500 was lower at 30 year rates moved higher.
Speaker 4: We implemented a position consistent with our thinking, which benefited as the S&P 500 moved lower and 30 year rates moved higher.
Speaker 4: Greenbrick partner shares about 27% during the quarter. The company announced second quarter earnings that far exceeded consensus S.
Green brick partners shares fell 27% during the quarter the company announced second quarter earnings that far exceeded consensus estimates. However, the market has become concerned about the impact of higher mortgage rates and most homebuilding stocks, including green brick reversed a portion of the gains achieved earlier this year.
Speaker 4: However, the market has become concerned about the impact of higher mortgage rates and most home building stocks, including Greenbrick, reversed a portion of the gains achieved earlier this year. Last week, the company announced its third quarter results and again exceeded analyst expectations due to its record high margins, better than expected home sale closings and lowest cancellation rate among publicly traded peers.
Last week, the company announced its third quarter results and again exceeded analysts' expectations due to its record high margins better than expected home sale closings and lowest cancellation rate among publicly traded peers.
Speaker 4: The economic outlook and the outbreak of war has added to our worry about the direction of the market. And we've been reducing our overall growth exposure as a result. We have net long exposure to the energy sector, and we've added a macro position that would benefit from higher crude oil prices throughout 2020.
The economic outlook and the outbreak of war has added to our worry about the direction of the market and we've been reducing our overall gross exposure as a result, we are net long exposure to the energy sector and we've added a macro position that would benefit from higher crude oil prices throughout 2024.
Speaker 4: The Salis Glass Portfolio returned 2.1% in October and has returned 11.3% year to date in 2023. Net exposure in the investment portfolio was approximately 33% at the end of the third quarter.
The solid class portfolio returned two 1% in October and has returned 11, 3% year to date in 2023 net exposure in the investment portfolio was approximately 33% at the end of the third quarter.
Speaker 4: I would like to take a few moments to discuss our CEO transition. Simon joined us over six years ago. He led the company through some tough times and we got through and has successfully changed the overall strategy of Greenlight Re over a number of years. He's done a nice job and is leaving the company in much better shape.
I would like to take a few moments to discuss our CEO transition Simon joined us over six years ago. He led the company through some tough times and we got through and has successfully changed the overall strategy of Greenlight re over a number of years. He has done a nice job and is leaving the company in much better shape than with Australia.
Speaker 4: In the last year, the board started having discussions with Simon about a plan succession during the course of 2024. We mutually agreed to accelerate the succession to this year and as a particularly good candidate fit became immediately available. Simon will continue his CEO through your end, both if I'm overseeing our underwriting activity and will be available in the new year to ensure a smooth transit.
In the last year, the board started having discussions with assignment about a planned succession. During the course of 2024, we mutually agreed to accelerate the succession to this year and as a particularly good candidates it became immediately available.
And then will continue as CEO through year end focused on overseeing our underwriting activity and will be available in the new year to ensure a smooth transition.
Speaker 4: I want to take this opportunity to thank Simon for all his hard work and dedication to Greenlight Re. And last day I want to say a few words...
Want to take this opportunity to thank Simon for all his hard work and dedication to Greenlight re.
And lastly, I want to say a few words about Greg Richardson, who will join Greenlight re assets new CEO at the beginning of 2024, we met Greg while conducting an extensive recruiting process. He has extensive experience in underwriting risk management and strategic planning the board and I are excited we were able to snag some of greg's caliber.
Speaker 4: Who will join Greenlight Re as its new CEO at the beginning of 2024? We met Greg while conducting an extensive recruiting process. He has extensive experience in underwriting, risk management, and strategic planning. The board and I are excited. We were able to snag someone of Greg's caliber as our next leader. Unconfident, the Greenlight Re team will capitalize on our significant growth opportunities with Greg at the helm. I look forward to Greg joining me on our next conference.
As our next leader I'm confident the Greenlight re team will capitalize on our significant growth opportunities with Greg at the helm I.
Look forward to Greg joining me on our next conference call now I'd like to turn the call over to farmers to discuss the financial results.
Speaker 4: And now I'd like to turn the call over to farmers to discuss the finance.
Thank you David and good morning, everyone.
Speaker 5: Thank you, David. Good morning, everyone. Our net income for the third quarter of 2023 was $13.5 million or $39 cents per deluted share compared to a net loss of $18.5 million or 56 cents per deluted share in the comparable period in 2022.
Our net income for the third quarter of 2023 was $13 $5 million or 39 cents per diluted share compared to a net loss of $18 $5 million or 56 cents per diluted share in the comparable period in 2022.
Speaker 5: For the year to date 2023, we earned net income of $69.2 million or $1.99 per due to chair. Compared to a net loss of $9.4 million or $28 cents per due to chair in the comparative period in 2022.
For the year to date 'twenty to 'twenty, three we arent net income of $69 $2 million or $1.99 per diluted share compared to a net loss of $9 $4 million or 28 cents per diluted share in the comparative period in 2022.
Speaker 5: We reported an underwriting income of $14.4 million during the third quarter and a combined ratio of 91.2% compared to an underwriting loss of $18.9 million and a combined ratio of 115.4% during the equivalent 2022 period.
We reported an underwriting income of $14 $4 million during the third quarter and a combined ratio of 91, 2% compared to an underwriting loss of $18 $9 million and a combined ratio of 415, 4% during the equivalent to 2022 period.
Speaker 5: The third quarter, 2020 underwriting income, was impacted by $13.1 million, or 8.1 combined ratio points of catastrophe events, including a Mexican state-owned oil platform fire loss and two satellite loss.
The third quarter 2023 underwriting income was impacted by $13 $1 million or eight one combined ratio points of catastrophe events, including in Mexican state owned oil platform fire loss and two satellite losses.
Speaker 5: By comparison, during the same quarter of 2022, we had suffered $25.9 million or 21.2 combined ratio points of catastrophe losses.
By comparison during the same quarter of 2022, we had suffered a $25 $9 million or 21, two combined ratio points of catastrophe losses, primarily related to hurricane Ian and two super typhoons in the Pacific.
Speaker 5: primarily related to hurricane Ian and two super typhoons in the Pacific.
Adjusting for catastrophe events losses, or current year loss ratio for the third quarter improved by one three percentage points to 53, 3% compared to 54, 6%.
Speaker 5: Adjusting for catastrophe event losses are current year loss ratio for the third quarter, improved by 1.3 percentage points to 53.3% compared to 54.6% during the comparable period in 2022.
During the comparable periods in 2022.
Speaker 5: Our net premiums written increased by $21.9 million or 15% to $168.3 million compared to the same quarter in 2022. Our net earned premiums increased by $41.2 million or $33.8% compared to the same quarter in 2022.
Our net premiums written increased by $21 $9 million or 15% to $168 $3 million compared to the same quarter in 2022.
Our net earned premiums increased by $41 $2 million or 23, 8% compared to the same quarter in 2022.
Speaker 5: The composite ratios improved across all three categories of business, property, casualty, and specialty. I will now discuss
The composite ratios improved across all three categories of business property casualty and specialty.
I will now discuss each of these individually.
Speaker 5: Within a property book, we saw an increase in net premiums written of $9.3 million or 60%, mainly driven by commercial property business where we have seen significant rate increases.
Within our property book, we saw an increase in net premiums written of $9 $3 million or 60%, mainly driven by commercial property business, where we have seen significant rate increases the.
Speaker 5: The composite ratio for the property business was 71.8% for the third quarter compared to 139.1% during the comparable period in 2022.
Composite ratio for the property business was 71, 8% for the third quarter compared to 139, 1% during the comparable period in 2022.
Speaker 5: The improvement was mainly driven by fewer natural catastrophe losses and improved margins from rate increases and higher attachment points.
The improvement was mainly driven by fewer natural catastrophe losses, and improved margins from rate increases and higher attachment points.
Speaker 5: Moving to our casualty book, let premiums written grew by $15.5 million, or 17.7%. Primarily driven by general liability business.
Moving to our casualty book net premiums written grew by $15 $5 million or 17, 7%, primarily driven by general liability business.
Speaker 5: The growth in general liability business was partially driven by our innovations partners and partially through a new contract bound in 2023.
The growth in general liability business was partially driven by innovations partners and partially through new contracts bound in 2023.
This increase was net of the reduction in the workers compensation line, where we continue to move away from proportional business and are finding pockets of attractive non proportional business. The composite ratio for the casualty business decreased to 99, 3% compared to 111, 2% during the <unk>.
Speaker 5: This increase was net of the reduction in the workers compensation line, where we continue to move away from proportional business and our finding pockets of attractive non-proportional business.
Speaker 5: The composite ratio for the casualty business decreased to 99.3% compared to 111.2% during the comparable period in 2022. The improvement was driven by a decrease in catastrophe losses on our multi-line contracts, which was partially offset by 9.2 percentage points of adverse development on legacy workers' compensation, motor and professional liability classes.
Comparable period in 2022.
The improvement was driven by a decrease in catastrophe losses on a multi line contracts, which was partially offset by nine two percentage points of adverse development on legacy workers compensation motor and professional liability classes.
Turning to our specialty book.
Speaker 5: Let premiums written and declined by $2.9 million or 6.7%. Mainly within the accident and health and financial line.
Net premiums written declined by $2 9 million or six 7%.
Mainly within the accident and health and financial lines.
Speaker 5: However, this decrease was mostly offset by growth in other specialty business.
However, this decrease was mostly offset by growth in other business other specialty business.
Speaker 5: The composite ratio for the specialty business decreased to 73.8% compared to 90% during the comparable period in 2022.
The composite ratio for the specialty business decreased to 73, 8% compared to 90% during the comparable period in 2022.
The specialty composite ratio in the third quarter of 2023 included 23, six percentage points of catastrophe losses from the Mexican oil platform fire and the two satellite losses.
Speaker 5: These losses were partially offset by 21.3 percentage points of favorable loss development on prior year's specialty contracts.
These losses were partially offset by 21 three percentage points of favorable loss development on prior your specialty contracts.
Now a few words on our expenses.
Speaker 5: excluding the impact of interest expense on deposit accounted contracts in the prior year, underwriting expense ratio increased to 3% for the third quarter of 2023 compared to 2.7% in 2022.
Excluding the impact of interest expense on deposit accounted contracts in the prior year. The underwriting expense ratio increased two 3% for the third quarter of 2023 compared to two 7% in 2022.
Speaker 5: the increase primarily related to higher headcount.
The increase primarily related to higher head count.
Speaker 5: as we invest in talent to take advantage of the hard market.
As we invest in talent to take advantage of the hog market.
Speaker 5: Total general and administrative expenses incurred during the quarter was $7.9 million, up 7% from $7.4 million in the third quarter of 2022.
Total general and administrative expenses incurred during the quarter was $7 $9 million up 7% from $7 $4 million in the third quarter of 2022.
Yeah.
Speaker 5: We reported total net investment income of $5.1 million during the third quarter of 2023 compared to $11.6 million in 2022.
We reported total net investment income of $5 $1 million during the third quarter of 2023 compared to $11 $6 million in 2022.
Speaker 5: We earned $9.5 million of interest income on our restricted cash and cash equivalents.
We earned $9 $5 million of interest income on our restricted cash and cash equivalents.
Speaker 5: Our investment in the Solaris Glass Fund reported a loss of $1.9 million, or 0.6%.
Our investment in the Solas class fund reported a loss of $1 $9 million or 0.6%.
Speaker 5: and our innovations investments reported an unrealized loss of $2.5 million due primarily to a downward adjustment on the carrying values of two investments.
Our innovations investments reported an unrealized loss of $2 $5 million due primarily to a downward adjustment on the carrying values of two investments.
Speaker 5: At the end of the third quarter, our fully diluted book value per share was $16.58.
At the end of the third quarter, our fully diluted book value per share was $16.58 an increase of two 3% from June 30 of 2023, and an increase of 13, 6% from December 31 2022.
Speaker 5: an increase of 2.3% from June 30, 2023, and an increase of 13.6% from December 31, 2022.
Speaker 5: Now I'll turn the call back to the operator who will open it up for questions.
Now I'll turn the call back to the operator, who will open it up for questions.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Speaker 1: Thank you. We will now be conducting a question and answer session.
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One moment, please while we poll for questions.
Speaker 1: Thank you. Our first question comes from the line of Anthony Motelice with Dowling and Partners. Please.
Thank you.
Our first question comes from the line of Anthony most lease with Dowling and partners. Please proceed with your question.
Hi, good morning, and congrats on the great quarter on the great print.
Speaker 6: Hi, good morning, and congrats on the great quarter, on the great print. I guess my first question is, I just kind of wanted to think about
I guess my first question is I was just kind of wanted to think about.
Speaker 6: is the low nineties combined ratio that we saw in Q3 so reflection of you know the business makeshift over time in the recent periods uh... you know of result of the recent growth in new years of business or were there any unusually low loss trends you might have observed in the quarter that work perhaps for one time in h
Is the low ninety's combined ratio that we saw in Q3, it's not a reflection of the business mix shift over time in the recent periods.
You know a result of the recent growth in new areas of business or were there any unusually low loss trends you might have observed in the quarter that were perhaps more onetime in nature.
Speaker 3: Hi, Anthony. It's Simon. Good morning. So, I think as you've heard us say in the past, there's been a tremendous effort over the past few years to essentially completely re-underwrite the Greenlight REIT portfolio. And those efforts were, you know, we're given a fair amount of tailwind as the hard market ramped up over the past year or two. And we are, you know, we are complete. So...
Hi, Anthony it's Simon good morning.
So I think as you've heard us say in the past.
There's been a tremendous assets over the past few years too.
I actually completely re underwrite greenlight re portfolio.
And those efforts are well you know we've given a fair amount of tailwind does see as a hard market ramps up over the past year or two.
We are complete.
I wouldn't I.
Speaker 3: I think I'd ask you to reframe your expectations of green light today and in the future without necessarily reference to, you know, some of the underwriting challenges of the past.
I think.
I'd ask you to reframe your expectations of Green light today and in the future without necessarily referenced to some of the underwriting challenges of the past.
Speaker 3: I'll put foliarists simply and highly different. Having said that, we are still carrying some legacy reserves with a fair amount of tail to it. As you noted in my comments, we experienced four points of reserve deterioration that relate to those continued lines.
Our portfolio is simply entirely different having said that we all still.
And some legacy reserves with a fair amount of tail to it skewed.
You noted in my comments, we experienced four points of reserve deterioration that relate to that those discontinued lines. So.
Speaker 3: So absent that impact, it would be more like an 87. And I'd say that's looking considerably more reflective of my view of current underwriting conditions in the reinsurance business.
That's it impacts.
Be more like an 87 and I'd say, that's that's looking considerably more reflective of you know my view of current underwriting conditions in the reinsurance business.
Speaker 3: I'd encourage you to consider Greenlight as fully positioned and fully participating in the current reinsurance hot market.
I'd encourage you to consider green light.
Fully positioned and fully participating in the current reinsurance market.
Speaker 6: Thank you Simon and I guess just quickly would you be able to kind of quantify the rate increases you're actually seeing across your different segments?
Thank you Simon and I guess, just quickly would you be able to kind of quantify the rate increases you are actually seeing across your different segments.
At the time.
Speaker 3: Yeah, I have all the time you need. So that is harder. Rates is a very different animal when you look at, let's say, Quotus shares with a 23 point seeding commission and nine points of margin versus an excess of loss field that priced at 10% rate online, one at a hundred. That they are such entirely different risks that
Yes, I have all the time you need.
Is that is harder.
Reis is a very different animals. When you look at let's say quota shares with a 23 point ceding Commission nine points of margin versus an excess of lost deals is priced to 10, 10% rates on line 100 that they own.
Such entirely different risks that collapsing rates across the entire portfolio and so.
Speaker 3: Collapsing rates across the entire portfolio and, you know, those sort of disparate mechanisms, we find not terribly helpful.
Pittsburgh mechanisms refined not terribly helpful internally.
Speaker 3: I think our net ridden premium for the Quarters is up 18% I think, that's where we landed. I'd say a reasonable rule of thumb is a good half of that is rates and perhaps the other half is exposure. But as I said, calculating rate to DPs is a little bit spurious and we tend not to over invest in that process.
I think.
Net written premium for the quarter is up 18%. So I think that's where we landed I'd say.
A reasonable rule of thumb is a good half of that is rates and obviously at the office is as exposure, but as I said.
Calculating rates two bps is a little bit spurious and we tend not to over invest in that process.
Well, thank you very much for the clarification there.
Speaker 6: Well, thank you very much for the clarification there. And Simon, best of luck in any future endeavors.
Best of luck and any future endeavors.
Thanks Anthony.
Speaker 1: Thank you. Our next question comes from the line of Ben Billiard with Perkins. Please proceed with your question.
Thank you.
Our next question comes from the line of Ben Batten Billiard with Paragon. Please proceed with your question.
Speaker 7: Yes, hello, hi, it's Benjamin. Thank you for the question. Two questions, please.
Yes, Hello, Hi, it's Benjamin.
A question to two.
Two questions. Please.
One.
Speaker 7: Out of curiosity, I'd like to understand the disconnect in performance.
I'm curious if you'd like to understand the disconnect in performance.
Speaker 7: between the solar glass, the sun, and what appears to be the performance of the Green Night Hedge Fund. So that's the first one. The second one is...
Between the solar glass, a fund and whether it be the performance of the Greenlight Hudson. So that's the first one.
The second one is on the.
Speaker 7: innovation Can you provide some color on the operational performance of these companies on
Innovation Investees can you provide some color on the operational performance of these companies.
Speaker 7: aggregate, like the type of revenue growth, have this in some impact of the more difficult macro, how are they progressing towards profitability...
On aggregates like type of revenue grew five decent some impact of the more difficult macro how are they progressing towards profitability.
Speaker 7: And the second one related to that is, what's your willingness or capacity to invest in, you know, subsequent funding rounds?
And the second one related to that what's your willingness and capacity to invest in that.
Subsequent funding rounds for.
For some selected opportunities that sits on my phone.
Speaker 3: Sure, Benjamin, Benjamin. David, would you like to take the first?
Sure. Thanks, Tim Benjamin David would you like to take the first part.
Speaker 4: The first part comes the main difference between the funds has to do with the concentration of green brick holdings. In the hedge funds we were able to distribute out a large percentage of the green brick.
Sure. The first part comes the main difference between the funds has to do with the concentration of Greenberg holdings.
And the hedge funds, we were able to distribute out of <unk>.
Large percentage the green brick shares as of June 30th, which reduced the weightings of that one stock in the hedge funds and solid glass, there's nobody to distributed Q, so where.
Speaker 4: shares as of June 30th, which reduced the weightings of that one stock in the hedge funds.
Speaker 4: and solace glass, there's nobody to distribute it to. So we're having to bring down the weighting in a more organic
Moving to bring down the waiting in a more organic.
Speaker 4: We weren't able to do it instantaneously. The green brick stock underperformed during the quarter relative to
Fashion, and we weren't able to do it instantaneously the green brick stock underperformed during the quarter relative to.
Speaker 4: Pretty much the rest of the portfolio and further because it was it was still in the portfolio with a large Weighting it meant that the weightings of other things that the hedge funds effectively had larger weightings for was smaller within the solace glass
Pretty much the rest of the portfolio and further because it was it was still in the portfolio with a large weighting it meant that the weightings of other things that the hedge funds effectively had larger weightings for with smaller within the <unk> class.
Yeah.
Speaker 4: As we look, you know, going forward over the next little period, at least the overweight and green brick partners, we'll continue to have a bit of an outside impact.
As we look going forward over the next little period at least the overweight in green brick partners.
We will continue to have a bit of an outsized impact on the solid class bond in and Thats at least fortunate for the time being I think it's helping performance in October and so far into early November is the Greenberg.
Speaker 4: on the Thalas Glass Fund and that's at least fortunate for the time being. I think it's helping performance in October and so far into early November as the Greenbrick stock recovers. Over time, we will bring these into convergence, but I suspect it will be.
Stock recovers over time, we will bring these into convergence, but I suspect it will take possibly until the end of 2024 for us to to fully bring things into into line there.
Speaker 4: possibly until the end of 2024, for us to fully bring things into line.
Speaker 3: And Benjamin, on your second question, let me just intro that with just a quick recap of our innovations approach and strategy. We're an early stage investor with the objective of deriving a high quality insurance business as our partners move through their execution phase.
Benjamin on your second question.
Let me just enter that with just a quick recap of Renova.
Alright innovations approach and strategy.
We're an early stage investor.
With the objective of driving high quality insurance business.
<unk> partners moves through their execution phase.
Speaker 3: There are some advantages to being an early-stage investor, and I've mentioned this before, which are...
There is some advantages to being an early stage investor and Ive mentioned this before Wichita.
Speaker 3: It tends to be a considerably lower check size to be impactful in the investment round. And we're often...
It tends to be a considerably lower check size to be impactful and investment round and we're often.
Speaker 3: The only or one of a very small number of strategic parts.
The only or one of a very small number of strategic partners. So it tends to give us outside outsized influence.
Speaker 3: So it tends to give us outsized influence in the success of our policy.
And the success of our partner and also an outsized optionality on future profitable business that they may produce goes to downside is being early stages you have your share of failures not everything succeeds.
Speaker 3: and also an outsize to optionality on future profitable business that they may produce. Of course, the downside is being early stage is you have your share of failures, not everything's a cleave and that's really baked into the strategy.
And Thats really.
Really baked into.
And to the into the strategy so given our role as an early stage investor.
Speaker 3: So given our role as an early stage investor,
Speaker 3: We accept this a fair amount of execution risk. We back partners with credible management teams with building a cash position to give them sufficient time to move through that early stage execution phase.
We accept this a fair amount of execution risk, we bank partners with credible management teams with building our cash position to give them sufficient time to move through that early stage execution phase.
Speaker 3: and build out their risk bearing and risk producing profile.
And build out their risk bearing.
Risk producing profile some succeed some don't we.
Speaker 3: Some succeed, some don't. We try to be, we try to like fairly quickly when it's clear that partners are not succeeding and fail fast is something that we take seriously.
We tried to be we try to act fairly quickly when it's clear that partners are not succeeding.
Fail fast is something that we take seriously.
Speaker 3: Other partners do move through the execution phases successfully and raise money in follow-on rounds. And we do consider the potential of follow-on investments. And we have made a couple, we don't always. But we're...
All of the partners.
Through the execution phases successfully and raise money and follow on rounds, and we do consider.
The potential follow on investments we have made a couple we don't always.
We are very disciplined in taking that approach the decision to make a follow on investment is entirely on its own merits.
Speaker 3: very disciplined in taking that approach. The decision to make a follow-on investment is entirely on its own merit.
Speaker 3: You know, chasing a...
Casing.
A.
Speaker 3: slightly challenged position in the hope that you're propping them up and you can extend some runway and get your money back. I think it's a vast mistake.
Slightly challenged position in the hopes that youre dropping them off and you can extend some runway and get your money back I think is a it is a vast mistake.
Speaker 3: So we employ a fair amount of discipline to the approach of considering follow-on investments. On the other hand,
So where.
We employ a fair amount of discipline to the to the approach of considering follow on investments.
On the other hand.
Speaker 3: We're given our role as a close strategic partner. We benefit from considerably more data and insight into the performance of the team. So we are generally positioned to make better decisions than outside investors looking to participate in following rounds. And we use that benefit to our advantage.
Well, given our role as a close strategic partner.
We benefit from considerably more data and insights into the performance of the team. So we are generally positioned to make better decisions than outside investors looking to participate in follow on rounds, and we use that benefit to our advantage.
Is that helpful.
Speaker 7: Yes, very much so. And yeah, thank you, Simon, for massively improving the underwriting.
Yes, very much so and yeah. Thank.
Thank you Simon for massive improving the underwriting.
That's great and good luck.
For the future.
Thank you.
Yeah.
Thank you there are no additional questions at this time.
Speaker 1: Thank you. There are no additional questions at this time. Should you have any follow-up questions, please reject them to Korean Dolly of the Equity Group at iratgreenlightre.ky. And you will be happy to assist you. This concludes Greenlight's third quarter, 2023 earnings conference call. Thank you.
Should you have any follow up questions. Please direct them to Corinne Dally of the equity group at IR at Green Light R E Dot K y.
She will be happy to assist you.
This concludes green light.
Third quarter 2023 earnings conference call. Thank you you may disconnect.
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