Q4 2023 Greenlight Capital Re Ltd Earnings Call

Operator: Hello and welcome to the Greenlight Capital Re Ltd 2023 fourth quarter and full year financial results conference call and webcast. If anyone should require operator assistance, please press star zero on your telephone keypad.

Hello, and welcome to the Green Light capital re limited 2023 fourth quarter and full year financial results conference call and webcast. If anyone should require operator assistance. Please press star zero on your telephone keypad.

Operator: A question and answer session will follow the formal presentation. You may be placed into the question queue at any time by pressing star 1 on your telephone keypad. At this time, I'd like to turn the call over to David Sigmon, of Greenlight Regional Council. You may begin. Thank you, Kevin, 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, Chief Financial Officer, Faramarz Romer, and Chief Executive Officer of Greenlight RE Ireland, Pat O'Brien.

Short answer session will follow the formal presentation.

You may be placed in the question queue at any time by pressing star one on your telephone keypad.

At this time I'd like to turn the call over to David Hickman Greenlight Re's General Counsel you may begin.

Thank you Kevin and good morning.

I'd like to remind you that this conference call is being recorded and will be available for replay following conclusion of the event and audio replay will also be available under the investors section of the company's website at Www Dot Greenlight re dot com.

Joining us on the call today will be our Chief Executive Officer, Greg Richardson Chairman of the Board, David Einhorn, Chief Financial Officer, Farmers, Roemer, and Chief Executive Officer of Greenlight re Ireland Pat O'bryan.

Operator: 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. Such forward-looking statements reflect the company's current expectations, estimates, and predictions about future results and are subject to risks and uncertainty. As a result, actual results may differ materially from those expressed or implied.

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.

David Sigmon: 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-K for the year ended December 31st, 2020. However, the company undertakes no obligation to publicly update or revise any forward-looking statement. With that said, it is now my pleasure to turn the call over to Greg. Thanks, David. Good morning, everyone, and thank you for joining us.

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 companys filings with the SEC, including the company's recently filed Form 10-K for the year ended December 31 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 Greg.

Thanks, David.

Everyone and thank you for joining us today.

Greg Richardson: This is my first earnings call since appointment as CEO of Greenlight RE, effective January 1st of this year. I'm delighted to have the opportunity to engage with our investors, and I look forward to meeting you in person. My first eight weeks have been busy, and I'd like to share some of my initial thoughts.

This is my first earnings call since appointment as CEO of Greenlight re effective January 1st of this year.

I'm delighted to have the opportunity to unity to engage with our investors and I look forward to meeting you in time.

My first eight weeks have been busy.

I'd like to share some of my initial impressions.

First <unk>.

Greg Richardson: Greenlight RE is in good shape and with exciting prospects. Our 2023 financial results are strong, and we will talk more about those later. I'm based full-time at our home office in Grand Cayman, and I've been able to visit our offices in Dublin and London.

Greenlight re is in good shape and with exciting prospects.

Our 2023 financial results are strong and we will talk more about those later.

And based full time at our home office in Grand Cayman, and I've been able to visit our offices in Dublin and London.

Greg Richardson: So I've had the chance to meet everyone in the company and to get to know most of them. Greenlight Re has a high-quality team that is very engaged and motivated, together with senior colleagues in January and February. We met with senior brokers and key clients in London and Bermuda; there is a positive perception of Greenlight RE and its role in the reinsurance market. Our underwriting portfolio is highly diversified with a focus on short-tail exposure. Over recent years, we have been underweight in both property catastrophe and longer tail cash fee loans.

So I've had the chance to meet everyone in the company and to get to know most of them.

Greenlight re has a high quality team that is very engaged and motivated.

Together with senior colleagues in January and February.

We met with senior brokers and key clients in London and Bermuda.

There is a positive perception of greenlight re and its role in the reinsurance marketplace.

Our underwriting portfolio is highly diversified with a focus on short tail exposures.

Over the recent years, we have been underweight in both property catastrophe and longer tail casualty lines.

Greg Richardson: This has served us well by avoiding some of the challenges our peers have encountered with large cat losses over several years and Material Deterioration in Industry Casualty Reserves during 2023. Finally, I've spent time getting to know our innovation team. Greenlight ReInnovations is a key part of our overall strategy. We have built a strong position at the early stage in SureTech. Our model of capital and capacity, along with a dedicated team of experts, is truly differentiating us in this space.

This has served us well by avoiding some of the challenges our peers have encountered with large cat losses over several years and material deterioration in industry casualty reserves through 2023.

Finally, I've spent time getting to know our innovations team.

Greenlight re innovations is a key part of our overall strategy.

We have built a strong position in early stage insure tech space.

Our model of capital and capacity along with a dedicated team of experts is truly differentiating us in this space.

David Michael Einhorn: Turning to our results, Greenlight performed well in 2023 and Q4 in particular. We reported a combined ratio of 91.4% for the quarter, our fifth consecutive quarter of underwriting profitability. We reported a 94.5% combined ratio for the full year, our best performance since 2009, and we delivered a strong 16.8% growth in book value per share. Now I'd like to turn the call over to David Einhorn. Thanks, Greg. Good morning

Turning to our results.

Greenlight re performed well in 2023 and Q4 in particular.

We reported a combined ratio of 91, 4% for the quarter.

Our fifth consecutive quarter of underwriting profitability.

We reported a 94, 5% combined ratio for the full year.

Our best performance since 2009 and.

And we delivered a strong 16, 8% growth in book value per share.

Now I would like to turn the call over to David Einhorn.

Thanks, Greg and good morning, everyone.

David Michael Einhorn: The Salus Class Fund returned three tenths of a percent in the fourth quarter. Our long portfolio added eight points six percent. Our short portfolio detracted nine percent, and our macro added one point three. During the quarter, the S&P 500 index returned 11.7% as a new consensus emerged that inflation has been brought under control without triggering a recession.

The solid classified returned three tenths of a percent in the fourth quarter.

Our loan portfolio at an eight 6% our short portfolio detracted, 9% and our macro added one 3%.

During the quarter. The S&P 500 index returned 11, 7% as a new consensus emerge that inflation has been brought under control without triggering a recession.

David Michael Einhorn: The largest positive contributors in the fourth quarter were our long position in Greenberg Partners, a macro position tied to higher interest rates and lower stock prices that paid off in October and our long position in Kindral Holdings. Three short positions were the largest attractants. Greenberg Partners advanced 25% during the quarter, recouping most of its third quarter decline. The company released another strong quarterly update, showcasing again the highest gross margin in the industry, as well as faster growth in new home orders than its peers. The company appears poised for another strong year in 2024. This position expired in mid-October, just before the strong rally for stocks and a material move lower for rates in two years. Kindra Holdings advanced 38% over the quarter.

The largest positive contributors in the fourth quarter, where our long position in green brick partners, a macro position tied to higher interest rates and lower stock prices that paid off in October and our long position in Kinder our holdings.

The short positions, where the largest detractors.

Green brick partners advanced 25% during the quarter Recouping most of its third quarter decline.

The company released another strong quarterly update showcasing again, the highest gross margin in the industry as well as faster growth in new home orders than its peers. The company appears poised for another strong year in 2024.

Our dual binary derivatives position, which benefited from both a lower S&P 500 level and higher 30 year interest rates for the second largest contributor this position expired in mid October just before the strong rally for stocks and a materially lower rates into year end.

Kendra Holdings advanced 38% over the quarter, the company announced improved margins and a smaller loss in expectations.

David Michael Einhorn: The company announced improved margins and a smaller loss than expected. Loss estimates for 2024 ended the year at $0.47 per share, down from $1.80, which was expected at the start of the year. Gold was also a positive contributor, advancing 11.7% during the quarter. Losses in the short portfolio were concentrated in three positions, including our innovation basket and two unprofitable tech companies. In November and December, we saw bubble-like conditions return for the most speculative stocks, and these shorts went parabolic. We don't believe there was any material fundamental improvement for either of these companies during the period. We established four new long positions during the quarter. These included medium-sized positions in Alight, a software-based benefits provider, and Viatris, a manufacturer of generic and off-patent branded drugs. Additionally, we initiated a small position in ScienceCo, a Belgian chemicals company spun off from Solvay. We are building a new large position in an undisclosed material. We've maintained a neutral net exposure of late. On the one hand, wages and employment remain strong while inflation is well off its recent peak.

Cost estimates for 2024 ended the year at 47 per share down from $1 80, which was expected at the start of the year.

<unk> was also a positive contributor enhancing 11, 7% during the quarter.

Losses in the short portfolio are concentrated in three positions, including our innovation basket and two unprofitable tech companies.

November and December we saw bubble like conditions return for the most speculative stocks and esports plant parabolic. We don't believe there is any material fundamental improvement for either of these companies during the period.

We established four new long positions during the quarter. These included medium sized positions in a light a software based benefits provider and <unk> a manufacturer of generic and off patent branded drugs.

We initiated a small position in science call a Belgian chemicals company spun off from Solvay, We are building, a new large position and an undisclosed materials company.

We've maintained neutral net exposure of late.

On one hand wages and employment remains strong while inflation is well off its recent peak.

David Michael Einhorn: On the other hand, we enter an election year with the market disregarding heightened geopolitical risk and with corporations and commercial real estate staring down a growing wall of debt maturities to refinance, which were arranged when rates were near zero. The Thales Glass Bond returned 9.4% in 2023, compared to a 26.3% return for the S&P 500. It returned 2.9% in January and a negative 1.4% in February, bringing the 2024 year-to-date return to 1.4%. Net exposure in the investment portfolio was approximately 39% at the end of the fourth quarter and 43% at the end of February. It is a pleasure to welcome Greg to the team as our new Chief Executive Officer. You just heard what he accomplished in his first eight weeks.

On the other hand, we enter an election year with the market disregarding heightened geopolitical risks and with corporations in commercial real estate staring down a growing while debt maturities to refinance which were arranged when rates were near zero.

The solid class bond returned nine 4% in 2023 compared to a 26, 3% return for the S&P 500 returned two 9% in January and negative one 4% in February bringing the 2024 year to date return to one 4%.

Net exposure in the investment portfolio was approximately 39% at the end of the fourth quarter and 43% at the end of February.

It is a pleasure to welcome Greg to the team as our Chief Executive Officer, you. Just heard was accomplished in the first eight weeks I just came back from came in from our board meeting.

David Michael Einhorn: I just came back from Cayman, from our board meeting. And what Greg didn't tell you is that he and the team also had to prepare for that meeting during the transition. Greg brings enthusiasm and significant experience and has energized the team in a few short months. I look forward to partnering with Greg for many years to come. Now I'd like to turn the call over to Faramarz to discuss the financials. Thank you, David, and good morning, everyone. 2023 was one of the best years for Greenlight RE as we posted the largest full-year underwriting income in our history and delivered the best growth in book value per share in a decade. As Greg mentioned, we rounded out the year with the fifth consecutive quarter of underwriting profits.

And with Greg didn't tell you is that he and the team also had to prepare for that meeting during the transition.

He brings enthusiasm and significant experience and has energized the team in a few short months and look forward to partnering with Greg for many years to come now.

Now I would like to turn the call over to farmers to discuss the financial results.

Thank you David and good morning, everyone.

2023 was one of the best years for Greenlight re as we posted the largest full year underwriting income in our history and delivered the best growth and book value per share in a decade.

As Greg mentioned, we round out the year with a fifth consecutive quarter of underwriting profits.

David Michael Einhorn: Our net income for the fourth quarter of 2023 was $17.6 million, or $0.50 per diluted share, compared to $34.8 million, or $0.91 per diluted share, in the comparable period. For the full year 2023, we earned net income of $86.8 million, or $2.50 per diluted share, compared to $25.3 million, or $0.73 per diluted share, in 2022. We reported an underwriting income of $11.8 million during the fourth quarter and a combined ratio of 91.4% compared to $6.5 million and a combined ratio of 94.2% during the equivalent 2022 period. The fourth quarter of 2023 combined ratio included 2.5 percentage points related to an increase in reserves on casualty and workers' compensation contracts that I will discuss later. For the 2023 year, our underwriting income was a record $32 million, or 94.5% combined ratio, compared to a loss of $11 million, or 102.3% combined ratio. The 7.8% improvement in the combined ratio was partially related to lower catastrophe losses during 2023 and partially related to improved pricing on the in-force book. Adjusting for casualty event losses

Our net income for the fourth quarter of 2023 was $17 $6 million or 50 cents per diluted share compared to $34 8 million or <unk> 91 per diluted share in the comparable period.

Full year 2023, we earned net income of $86 8 million or.

Our $2 50 per diluted share compared to $25 $3 million or <unk> 73 per.

Per diluted share in 2022.

We reported an underwriting income of $11 $8 million during the fourth quarter and a combined ratio of 91, 4% compared to $6 $5 million and a combined ratio of 94, 2% during the equivalent to 2022 period the fall.

Quarter of 2023 combined ratio included two five percentage points related to increase in reserves on casualty and workers compensation contracts that I will discuss later.

For the 2023 year, our underwriting income was a record $32 million or <unk> 94, 5% combined ratio.

Compared to a loss of $11 million or 102, 3% combined ratio.

The seven 8% improvement in combined ratio was partially related to lower catastrophe losses during 2023, and partially related to improved pricing on the in force book.

Adjusting for casualty event losses.

Faramarz Romer: Our current year loss ratio for 2023 improved by 4 percentage points to 54.9% compared to 58.9% during the comparable period in 2022. During the fourth quarter, our net premiums written decreased by $10.6 million, or 9.1%, to $105.3 million compared to the same quarter in 2022. The decrease is timing-related, primarily due to premium adjustments based on updated reporting received from Cedence on our FAL and transactional liability business.

Our current year loss ratio for 2023 improved by four percentage points to 54, 9% compared to 58, 9% during the comparable period in 2022.

During the fourth quarter, our net premiums written decreased by $10 6 million or nine 1% to $105 $3 million compared to the same quarter in 2022.

The decrease is timing related primarily due to premium adjustments based on updated reporting received from <unk> on our fall and transactional liability business.

Faramarz Romer: Net premiums earned were $137 million, an increase of $26.1 million, or 23.4% compared to the same quarter in 2022. For the full year, our net premiums written increased 13.1% to $637 million, with growth spread across property, casualty, and specialty books. We saw a small decrease in net premiums written of $1.9 million, or 10%, during the fourth quarter, mainly driven by a smaller participation on a homeowner's contract renewed in 2023. On a full-year basis, property net written premiums grew by 32.8%, mainly from new commercial property contracts and new business generated from our innovation portfolio. The composite ratio for the property business was 64.1% for the fourth quarter, compared to 103.9% during the comparable period in 2022.

Net premiums earned was $137 million.

An increase of $26 1 million.

Or 23, 4% compared to the same quarter in 2022.

For the full year, our net premiums written increased 13, 1% to $637 million with.

With the growth spread across property casualty and specialty books.

Within our specialty book.

We saw a small decrease in net premiums written of $1 9 million or 10% during the fourth quarter, mainly driven by a smaller participation on our homeowners contract renewed in 2023.

On a full year basis. The property net written premiums grew by 32, 8% mainly from new commercial property contracts and business generated new business generated from our innovation portfolio.

The composite ratio for the property business was 64, 1% for the fourth quarter compared to 103, 9% during the comparable period in 2022.

Faramarz Romer: The improvement was partially driven by reserve releases on a motor contract and partially due to an increase in earned premiums at better margins. Moving to our casualty book, net premiums written decreased by $12 million, or 16.4%, during the fourth quarter, primarily relating to the Fall 2022 year of account due to premium adjustments booked during the quarter.

The improvement was partially driven by reserve releases on a motor contract and.

And partially due to an increase in earned premiums at better margins.

Moving to our casualty book.

Net premiums written decreased by $12 million or 16, 4% during the fourth quarter.

Primarily relating to the <unk> 2022, Europe account due to premium adjustments booked during the quarter on.

Faramarz Romer: On a full year basis, net written premiums increased 6.7%, driven by new and renewed general liability, professional liability, and to a lesser extent, motor liability business. This increase was partially offset by the workers' compensation class, where we continue to move away from proportional business and are finding pockets of attractive excessive loss. The composite ratio for the casualty business improved marginally to 100.1% in the fourth quarter compared to 101% in 2022. During the quarter, we bolstered our reserves on certain casualty contracts ranging between 2015 and 2017 treaty years and on workers' compensation contracts relating to 2020 and 2021. Turning now to a specialty book, net premiums written increased by $3.4 million, or 14.5%, during the fourth quarter, mainly within the Marine and Accident and Health Class. This was partially offset by a decrease in the financial class resulting from premium adjustments on transaction liability business.

On a full year basis. The net written premiums increased six 7% driven by new and renewed general liability professional liability and to a lesser extent motor liability business.

This increase was partially offset by the workers' compensation class, where we continue to move away from proportional business and are finding pockets of attractive excess of loss business.

The composite ratio for the casualty business improved marginally to 101% in the fourth quarter compared to 101% during 2022.

During the quarter, we bolstered our reserves on certain casualty contracts ranging between 2015 and 2017 treaty years.

And on workers compensation contracts relating to 2020 in 2021.

Turning now to our specialty book.

Net premiums written increased by $3 4 million or 14, 5% during the fourth quarter mainly.

Mainly within the marine and accident and health classes.

This was partially offset by a decrease in the financial class, resulting from premium adjustments on transactional liability business for.

Faramarz Romer: For the full year 2023, net premiums written increased 11.1% as we took advantage of the hard market conditions, primarily growing our marine, energy, aviation, and cyber book. The composite ratio for the specialty business increased to 73.6% in the fourth quarter compared to 63% during the comparable period in 2022. The increase relates to losses on a 2022 energy contract, partially offset by reserve releases on the transactional liability business. Our underwriting expense ratio for the fourth quarter increased to 5.5% from 3.7% in the same period in 2022. The expense ratio for this quarter included 1.5 percentage points of deposit interest expense. The deposit interest expense arose from a deposit-accounted, retroceded mortar contract which experienced favorable development during the quarter. Excluding the deposit interest expense, the underwriting expense ratio increased marginally related to personnel expense.

For the full year 2023, net premiums written increased 11, 1% as we took advantage of the hard market conditions, primarily growing our marine energy aviation and cyber books.

The composite ratio for the specialty business increased to 73, 6% in the fourth quarter compared to 63% during the comparable period in 2022.

The increase relates to losses on a 2022 energy contract, partially offset by reserve releases on the transactional liability business.

Our underwriting expense ratio for the fourth quarter increased to five 5% from three 7% in the same period in 2022 <unk>.

Expense ratio for this quarter included one five percentage points of deposit interest expense the deposit interest expense arose from a deposit accounted retro ceded motor contract, which experienced favorable development during the quarter.

Excluding the deposit interest expense the underwriting expense ratio increased marginally related to personnel expenses.

Faramarz Romer: Total general and administrative expenses increased by $6.5 million during the fourth quarter to $15.4 million, compared to $8.9 million in the fourth quarter of 2022. Approximately $4.4 million of the increase related to non-recurring costs of the management transition, and the remaining increase was due primarily to higher headcount compared to the same period in 2022. We reported total net investment income of $13.6 million during the fourth quarter of 2023, compared to $32.5 million in 2022. We earned $8.6 million in interest income on our restricted cash and cash equivalents and on our funds at Lloyds. Our investment in the Solar Slots Fund reported a gain of $0.9 million, or 0.3%, and our innovation investments reported a net unrealized gain of $4 million in the fourth quarter.

Total general and administrative expenses increased by $6 5 million during the fourth quarter to $15 4 million compared.

Compared to $8 9 million in the fourth quarter of 2022.

Approximately $4 4 million of the increase related to nonrecurring costs of the management transition and the remaining increase was due primarily to higher head count compared to the same period in 2022.

We reported total net investment income of $13 6 million during the fourth quarter of 2023.

Compared to $32 $5 million in 2022.

We earned $8 6 million of interest income on our restricted cash and cash equivalents.

And on our funds at Lloyd's.

Our investment in the solar plus fund reported a gain of <unk> 9 million or <unk>, 3% and our innovations investments reported a net unrealized gain of $4 million in the fourth quarter.

Faramarz Romer: At the end of the fourth quarter, a fully diluted book value per share was $16.74, an increase of 3.7% from September 30, 2023, and an increase of 16.8% from December 31st, 2022. I should mention that we have revised our calculation for basic and fully diluted book values per share. In prior years, we calculated the basic book value per share by adjusting the denominator to exclude certain unearned performance-based restricted shares. The revised calculation uses the total outstanding ordinary shares when calculating the denominator for the basic book value per share.

At the end of the fourth quarter, our fully diluted book value per share was $16 74.

An increase of three 7% from September 32023.

And an increase of 16, 8%.

From December 31 2022.

I should mention that we have revised our calculation for basic and fully diluted book value per share and.

In prior years, we calculated the basic book value per share by adjusting the denominator to exclude certain unearned performance based restricted shares the revised calculation.

Or is this the total outstanding ordinary shares when calculating the denominator for basic book value per share.

Faramarz Romer: We then add all unvested restricted stock units and any in-the-money options to the denominator to calculate the fully diluted book value per share. We believe this better reflects the ultimate dilution to our shareholders. Please refer to our earnings press release and Form 10-K filed yesterday for the revised calculation. Our shareholders' equity at December 31, 2023, increased by $93 million to $596 million, reaching the highest level since 2017. In conclusion, the company ended the year with a very strong performance from both a financial and a capital perspective, and we are well positioned going into 2024 to continue delivering on our financial metrics and growing our book value for our shareholders. Pat will now discuss the 1-1 renewal season. Thank you, Faramarz. Good morning, everyone.

We then add all unvested restricted stock units and any in the money options to the denominator to calculate fully diluted book value per share. We believe this better reflects the ultimate dilution to our shareholders.

Please refer to our earnings press release and Form 10-K filed yesterday for the revised calculations.

Our shareholders' equity at December 31, 2023 increased by $93 million to $596 million, reaching the highest level since 2017.

In conclusion, the company ended the year with a very strong performance from both a financial and capital perspective.

And we are well positioned going into 2024 to continue delivering on our financial metrics and growing the book value for our shareholders.

Pat will now discuss the one one renewal season.

Thank you farmers good morning, everyone.

Pat O'Brien: The January 1 in the old season is key for Greenlight Re, as over 60% of our business starts on January 1. We are very pleased with how January 1, 2024, progressed. Market conditions remain very attractive, and we took advantage of those conditions to grow our business in the T Segment. I will provide an overview of our January 1, 2024 book in key areas. Generally, our funds at Lloyds book and SIPs on January 1st.

The January one renewal season is key for Greenlight re is over 60% of our business and ships on January one.

We are very pleased with our January one 2024 progressed.

Market conditions remain very attractive and we took advantage of those conditions to grow our business in two segments.

I will provide an overview of regenerative 124 book in key areas.

Generally our funds at Lloyd's book and ships on January one.

Pat O'Brien: We have been a major player in this market for a few years, and we were optimistic about the prospects of Lloyds in 2024 after several years of material rate increases in the Lloyds market. This year we found an increase in the volume of capital interested in funds from the large market, but we leveraged our deep and ongoing relationships to continue supporting Lloyds syndicates where we see attractive opportunities. A material element of our specialty book also renews on January 1st. In general, the specialty market maintained pricing discipline, rates up low single digits. It was very competitive in signing contracts.

We have been a material player in this market for few years.

We are optimistic for the prospects of Lloyds and 2024 after several years of material rate increases in the Lloyd's market.

This year, we've had an increase in the volume of capital interested in the forms of fluids market.

We leveraged our deep and ongoing relationships to continue supporting the Lloyd's syndicates, where we see attractive opportunities.

A material element of our specialty book Ultra renews on January one.

In general the specialty market maintained pricing discipline.

Rates up low single digits.

But it was very competitive and signings.

Pat O'Brien: As many of our competitors want us to grow in this space, we anticipated this trend, and as a result, we offered lines early on target accounts. This strategy worked well.

Many of our competitors wanted to grow in this space.

We anticipated this trend and as a result, we offered lines early on target accounts.

This strategy worked well.

Pat O'Brien: We grew our specialty book January 1st significantly, a combination of increased signings. New Account Wins, The third element of our book, with a strong January 1 focus, is our property book. We saw some weakening in this space, with more capacity entering the market, which enabled some modest softening in seeding commissions and profit commissions over January 1, 2023. Despite this, the market remains very attractive, and we grew this portfolio meaningfully over 2023 through a combination of new clients and improved signing. Our North Atlantic hurricane exposure on a 1 in 250 occurrence basis increased by 11% to $89.7 million, reflecting this increased volume.

We grew our specialty book of January one significantly.

A combination of increased signings and some new account wins.

The third element of our book with a strong January one focus as our property book.

We saw some weakening in this space with more capacity entering the market, which enabled some modest softening in ceding commissions and profit commissions over January one 2023.

Despite this the market remains very attractive.

And we grew this portfolio meaningfully over 2023.

Through a combination of new clients and improve signings.

Our north Atlantic Hurricane exposure on a 150 occurrence basis increased by 11% to $89 $7 million, reflecting this increase volume.

Pat O'Brien: Relative to our surplus, the 1 in 250 exposure has decreased marginally. We have now renewed one large homeowner's account that caused us some pain in 2023 with the heavy convective storm season. The non-renewal of this account improves the overall balance of the portfolio. In total, we estimate our overall premium volume to be slightly up year on year, despite the non-renewal of the homeowner's accounts, and our overall portfolio is now better balanced with increased margin potential. We are enthusiastic about the positioning of our portfolio for 2024, and we are seeing indications that we are likely close to the peak of the hard market. We are focused on taking full advantage of the current market opportunity. 2024 is off to a strong start.

Relative to resurface to 150 exposure has decreased marginally.

We non renewed one large homeowners account for that causes some pain in 2023 with the heavy convective storm season.

The non renewal of this account improves the overall balance of the portfolio.

In total we estimate our overall premium volume to be slightly up year on year.

Despite the Nonrenewed, Oklahoma those accounts.

And our overall portfolio is now better balanced with increased margin potential.

We are enthusiastic about the positioning of our portfolio for 2024.

We are seeing indications that were likely closer to the peak of the hard markets.

We are focused on taking full advantage from the current market opportunity.

224 is off to a strong start.

Operator: Now, I'll turn the call back to the operator, who will open it up for questions. Thank you. We'll now be conducting a question and answer session. If you'd like to be placed in the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one.

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

Thank you, we'll now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing.

<unk> Star one one moment, please while we poll for questions.

Operator: One moment, please, while we pull for questions. Our first question is coming from Daniel DeYoung from Columbia Management. Your line is now live.

Our first question is coming from Daniel D. Young from Columbia Management. Your line is now live.

Daniel DeYoung: I'm not from Columbia Management, but I have a few questions regarding the innovation business. Do you expect any change in strategy there? And can it be compared to venture capital investing, which I would perceive is quite risky?

Alright.

I am not from Columbia management.

Good morning, I have a few questions regarding the innovations business.

Do you expect any change in strategy there.

And can it be compared to venture capital and vaccine, which I would perceive as quite risky.

Greg Richardson: And then I note the $4 million unrealized gain in the fourth quarter. Can I ask what the source of that was and if there have been any realized gains in the past from the innovations business? Thank you. Hi, this is Greg.

And then I noticed a $4 million.

The unrealized gain in the fourth quarter.

If I can ask what the source of that was and if there had been any realized gains in the past from the innovations business. Thank you.

Hi, This is Greg Thanks for your question.

Greg Richardson: Thanks for your question. I'll start with the first part, and then I'll pass it on to Faramarz, our CFO, for any sort of financial questions. I'm still getting my arms around the innovation business, but I can tell you what I've seen impresses me, especially given some of my experience in that space over the years. First of all, it has sort of an insurtech flavor to it. But what I like about it is our strategy is also couples-focused; we always look for experienced veterans that, so I believe in the insurtech space. The combination of technology with experience, that blend is really a winning combination.

I'll start with the first part and then I'll pass it on to farmers, our CFO sort of financial questions.

Still getting my arms around the innovations business I would tell you what I have seen impressive suite.

Especially.

Given some of my.

Our experience in that space over the years.

First of all it has sort of an insured tech flavor to it but.

But what I like about it is our strategy is also couples we always look for experienced veterans that so I believe in the insured tech space a combination of technology with experience that blend is really the winning combination.

Greg Richardson: The other thing I'd like is that it's very niche-oriented. You know, that we get into these investments and these opportunities at a pretty early stage. It's something where Greenlight, with our smaller size, we carry a bigger stick than we might if we were competing head-to-head, say, with Munich Re or Hanover Re. So I think I like that aspect of it.

The other thing I would like is it's it's very niche oriented.

No.

We get into these.

These investments in these opportunities and pretty early stage is something where green light with our.

Smaller size we.

We carry a bigger stick then we might if we were competing head to head say with Munich re our Hanover REIT.

I liked that aspect of it.

Greg Richardson: We put a dedicated team of experts in charge of it. They know what they're doing. We focus a lot of resources on it. We're not just dabbling in it. We really invest in it. The other aspect of being niche, you know, we're avoiding segments where there are really strong entrenched incumbents that have significant economies of scale. And frankly, we do have a pretty good track record in this space, and I think Faramarz can talk about that.

We've put a dedicated team of experts in it they know what they're doing we focus a lot of resources were not just dabbling in it we really invest in it.

The other aspect being niche we're avoiding.

Segments, where there is really strong entrenched incumbents that have significant economies of scale.

And frankly, we do have a pretty good track record in this space and I think farmers can talk about it.

Greg Richardson: So at this point, I don't envision any change to it. I think we've got a sizable play in it. I think we've got to

So at this point I don't envision.

Any change to it I think we've got a sizable play in it.

I think we've got to.

Greg Richardson: Make sure that we're managing well the portfolio that we have as we look for areas to grow or expand. But from what I've seen, I'm pleased with. Let me jump in on your second part, Daniel. In regards to the unrealized gains for the quarter, the $4 million relates to about four investments in total. As we've mentioned previously, the way we mark up our innovation investments is based on a new round of financing by the same investee. Once they have closed that round, that gives us an indication of a new observable price. That's the price we apply to the securities that we're holding. In terms of unrealized gains versus realized gains, we look for any impairment on a quarterly basis.

Make sure that we're managing well the portfolio that we have as we look for areas to grow or expand.

But from what I've seen.

With it.

Yes, So let me jump in on your second part Daniel in regards to the unrealized gains for the quarter.

The 4 million relates to about.

For investments.

In total we.

As we've mentioned previously the way the Mark up our innovation investments is based on.

A new round of financing by the same investing.

And once they have closed around that gives us an indication of a new observable price and thats the price we apply to <unk>.

The securities that were holding.

In terms of the unrealized gains versus realized gains we.

Look for any impairment on a quarterly basis and if we notice that there is any indication that triggers a valuation allowance on impairment, we will take that.

Faramarz Romer: And if we notice that there is any indication that triggers a valuation allowance or an impairment, we will take that right away, and we will not write it up until we actually see some evidence of an increase in valuation. To date, we've realized some losses from some of our older investments, but we haven't realized any gains. We haven't actually sold any of the investments in our portfolio. These are longer-term duration investments. We invest when they're in the initial startup stage and make seed investments. Generally, we would wait until they're fully matured before we are able to recognize any gains on them.

Right away.

And to write it up will delay until we actually see some evidence of an increase in valuation to date, we've realized some.

Losses from some of our order or investments.

But we haven't.

Realized any gains I E. We haven't actually sold any of the any of the investments in our portfolio. These are longer term duration investments.

We invest when they're in the initial <unk>.

<unk> sage and seed investments.

Generally we would wait until they are fully mature until we are able to recognize any gains on them now, but there are a number of positions in our portfolio.

Faramarz Romer: But there are a number of positions in our portfolio that are moving in that direction. I hope that answers your question. Yep, thank you very much. Thank you. As a reminder, star 1 to be placed in the question, One moment, please, while we pull for further. There are no additional questions at this time. Should you have any follow-up questions, please direct them to Karin Daly of the Equity Group at IR at GreenlightRe.ky. She'll be happy to assist. This now concludes Greenlight Re's fourth quarter and year-end 2023 earnings conference call. Thank you.

At our moving in that direction.

Hope that answers your question.

Yes, thank you very much.

Thank you as a reminder, star one to be placed in the question queue. One moment. Please while we poll for further questions.

Thank you there are no additional questions at this time.

You have any follow up questions. Please direct them to Karen daily of the equity group at IR at Greenlight re dot Ky she'll be happy to assist you. This now concludes greenlight re <unk> fourth quarter and year end 2023 earnings Conference call. Thank you you may now disconnect.