Q2 2026 Greenlight Capital Re Ltd Earnings Call

August 5, 2026

Speaker #1: Thank you for joining the GREENLIGHT CAPITAL RE, second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the prepared comments.

Operator: Thank you for joining the Greenlight Capital Re Q2 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the prepared comments. You may press star one at any time to be placed in the question queue. It is now my pleasure to turn the call over to David Sigmon, Greenlight Re's General Counsel. You may begin.

Speaker #1: You 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 Sigmond, GREENLIGHT RE's General Counsel.

Speaker #1: You may begin.

Speaker #2: 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.

David Sigmon: Thank you, Kevin, 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.

Speaker #2: 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, Farmars Romer.

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

David Sigmon: 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 Form 10-K for the year ended 31 December 2025. 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.

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.

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 Form 10-K for the year ended 31 December 2025. 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.

Speaker #2: Additionally, management may refer to certain non-GAAP financial measures. The reconciliations for these measures can be found in the company's filings with the SEC, including the company's Form 10-K for the year ended December 31, 2025.

Speaker #2: 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.

Speaker #3: Thank you, David. Good morning, everyone, and thank you for joining us. Q2 2026 was challenging for GREENLIGHT RE. We reported a net loss of $29.6 million for the quarter, driven by investment income losses from the Solis Glass portfolio and a modest underwriting loss.

Greg Richardson: Thank you, David. Good morning, everyone, thank you for joining us. Q2 2026 was challenging for Greenlight Re. We reported a net loss of $29.6 million for the quarter, driven by investment income losses from the Solasglas portfolio, and a modest underwriting loss. It is worth noting that the Q2 investment loss has essentially reversed in July. Our underwriting result in the Q2 includes a $20 million provision linked to losses related to the Middle East conflict, plus a $6.5 million provision linked to an oil refinery explosion in Qatar, which was not war related. Our specialty book is a core part of our overall portfolio and has been profitable historically. The specialty book is susceptible to severity events such as the Middle East war. Reserving for this ongoing conflict has been challenging, with limited available information.

Speaker #3: It is worth noting that the second quarter investment loss has essentially reversed in July. Our underwriting result in the second quarter includes a $20 million provision linked to losses related to the Middle East conflict, plus a $6.5 million provision linked to an oil refinery explosion in Qatar, which was not war-related.

Speaker #3: Our especially book is a core part of our overall portfolio, and has been profitable historically. The specialty book is susceptible to severity events such as the Middle East war.

Speaker #3: Reserving for this ongoing conflict has been challenging, with limited available information. We have posted a reserve in relation to events up to June 30, 2026, which we believe is prudent.

Greg Richardson: We have posted a reserve in relation to events up to 30 June 2026, which we believe is prudent, although there is a high degree of uncertainty. We are not aware of any major Q3 losses as we continue to closely monitor the situation. Furthermore, our exposure to potential loss from the war going forward is decreasing as our cedents are actively reducing their exposures in the region, and we have non-renewed several accounts. On a more positive note, our Innovations segment recorded a solid underwriting result in the quarter, generating $2.6 million of underwriting profit, and a combined ratio of 89.7%. We have been excited for some time about the potential of our Innovations segment, and it is gratifying to see this reflected in the underwriting results. The softening market trends across most lines that we saw in Q1 continued in Q2.

Speaker #3: Although there is a high degree of uncertainty, we are not aware of any major Q3 losses as we situation. Furthermore, our exposure to potential loss from the war going forward is decreasing, as our seedents are actively reducing their exposures in the region, and we have non-renewed several accounts.

Speaker #3: On a more positive note, our innovations segment recorded a solid underwriting result in the quarter, generating $2.6 million of underwriting profit and a combined ratio of 89.7%.

Speaker #3: We have been excited for some time about the potential of our Innovations segment, and it is gratifying to see this reflected in the underwriting results.

Speaker #3: The softening market trends across most lines that we saw in Q1 continued in Q2. We are committed to maintaining our underwriting discipline in the market, and while our gross written premium was up 2% in the quarter due to innovations growth, our net written premium was down 11% as we reduced net exposure in response to softening conditions.

Greg Richardson: The softening market trends across most lines that we saw in Q1 continued in Q2. We are committed to maintaining our underwriting discipline in the market. While our gross written premium was up 2% in the quarter due to Innovations growth, our net written premium was down 11% as we reduced net exposure in response to softening conditions. Finally, I would like to highlight that in July, we received approval in principle from the Council of Lloyd's to transition our Syndicate in a Box, Greenlight Re Innovations Syndicate 3456, to a full syndicate effective 1 January 2027. Syndicate 3456 has been a successful part of the growth in our Innovations business over the last four years.

Greg Richardson: We are committed to maintaining our underwriting discipline in the market. While our gross written premium was up 2% in the quarter due to Innovations growth, our net written premium was down 11% as we reduced net exposure in response to softening conditions. Finally, I would like to highlight that in July, we received approval in principle from the Council of Lloyd's to transition our Syndicate in a Box, Greenlight Re Innovations Syndicate 3456, to a full syndicate effective 1 January 2027. Syndicate 3456 has been a successful part of the growth in our Innovations business over the last four years. The transition to a full syndicate for 2027 will enable further growth of this segment at Lloyd's, and further diversification into two new channels, an MGA channel focused on more traditional business, and a treaty reinsurance channel.

Speaker #3: Finally, I would like to highlight that in July, we received approval in principle from the Council of Lloyd's to transition our syndicate-in-a-box, GREENLIGHT RE Innovations Syndicate 3456, to a full syndicate effective January 1, 2027.

Speaker #3: Syndicate 3456 has been a successful part of the growth in our innovations business over the last 4 years. The transition to a full syndicate for 2027 will enable further growth of this segment at Lloyds and further diversification in two new channels.

Greg Richardson: The transition to a full syndicate for 2027 will enable further growth of this segment at Lloyd's, and further diversification into two new channels, an MGA channel focused on more traditional business, and a treaty reinsurance channel. Lloyd's is a key part of our overall strategy, and the transition to a full syndicate status cements our strong position in the Lloyd's market. Now I'd like to turn the call over to Bill.

Speaker #3: An MGA channel focused on more traditional business, and a treaty reinsurance channel. Lloyd's is a key part of our overall strategy, and the transition to full syndicate status cements our strong position in the Lloyd's market.

Greg Richardson: Lloyd's is a key part of our overall strategy, and the transition to a full syndicate status cements our strong position in the Lloyd's market. Now I'd like to turn the call over to Bill.

Speaker #3: Now, I'd like to turn the call over to Greg.

Speaker #2: Thanks, Greg, and good morning, everyone. The Solis Glass Fund returned negative 5.4% in the second quarter. The long portfolio contributed 12%, and the short portfolio detracted 12.3%, and macro detracted 5.4%.

David Einhorn: Thanks, Greg. Good morning, everyone. The Solasglas Fund returned -5.4% in Q2. The long portfolio contributed 12%, the short portfolio detracted 12.3%, and macro detracted 5.4%. During the quarter, the S&P 500 Index advanced 15.2%. The largest positive contributors were long investments in Centene, Green Brick Partners, and Penn Entertainment. The largest detractors include a short basket of AI-adjacent stocks and our macro positions in SOFR Futures and Gold. Following an earnings beat, Centene shares rose 96% during Q2. Industry data released during the period also suggested that healthcare utilization has likely peaked, supporting the view that the industry is entering a durable profit upcycle. Green Brick Partners shares appreciated 24% during Q2 as the mood around home building stocks improved. Penn Entertainment shares appreciated 42% as its regional casino portfolio returned to modest growth, driven by strong performance from newer properties.

Speaker #2: During the quarter, the S&P 500 index advanced 15.2%. The largest positive contributors were long investments in Centene, Greenbrook Partners, and Penn Entertainment. The largest detractors include a short basket of AI-adjacent stocks and our macro positions in SOFR futures and gold.

Speaker #2: Following an earnings beat, Centene shares rose 96% during the quarter, industry data released during the period also suggested that healthcare utilization has likely peaked, supporting the view that the industry is entering a durable profit up cycle.

Speaker #2: Greenbrook Partners shares appreciated 24% during the quarter as the mood around home-building stocks improved. Penn Entertainment shares appreciated 42% as its regional casino portfolio returned to modest growth, driven by strong performance from newer properties. Promotional activity also moderated, and acquisition bids for two peer companies pointed to a higher valuation for Penn.

David Einhorn: Penn Entertainment shares appreciated 42% as its regional casino portfolio returned to modest growth, driven by strong performance from newer properties. Promotional activity also moderated, acquisition bids for two peer companies pointed to a higher valuation for Penn. The largest detractor was a short basket of AI-adjacent companies that appreciated significantly as investors continued to chase anything AI related. Our second largest detractor was our long SOFR Futures position. As inflation expectations picked up following the outbreak of the conflict in the Middle East, the market priced in multiple rate hikes by year-end. A portion of these losses was offset by gains in our inflation swaps position. Gold was the third largest detractor as its price declined 14% over Q2.

David Einhorn: Promotional activity also moderated, acquisition bids for two peer companies pointed to a higher valuation for Penn. The largest detractor was a short basket of AI-adjacent companies that appreciated significantly as investors continued to chase anything AI related. Our second largest detractor was our long SOFR Futures position. As inflation expectations picked up following the outbreak of the conflict in the Middle East, the market priced in multiple rate hikes by year-end. A portion of these losses was offset by gains in our inflation swaps position. Gold was the third largest detractor as its price declined 14% over Q2. Earlier in the year, we took profits on most of our call options, reducing our overall exposure and mitigating part of the impact from gold's steep decline following its peak in Q1.

Speaker #2: The largest detractor was a short basket of AI-adjacent companies that appreciated significantly as investors continued to chase anything AI-related. Our second largest detractor was our long SOFR futures position.

Speaker #2: As inflation expectations picked up following the outbreak of the conflict in the Middle East, the market priced in multiple rate hikes by year-end. A portion of these losses was offset by gains, and our inflation swaps position.

Speaker #2: Gold was the third largest detractor, as its price declined 14% over the quarter. Earlier in the year, we took profits on most of our call options, reducing our overall exposure and mitigating part of the impact from gold's steep decline following its peak in the first quarter.

David Einhorn: Earlier in the year, we took profits on most of our call options, reducing our overall exposure and mitigating part of the impact from gold's steep decline following its peak in Q1. Net exposure ended Q2 at around 33%, compared to about 41% at the end of Q1. Solasglas returned 4.9% in July, bringing the 2026 year-to-date return to 6.1%. Net exposure in the investment portfolio was approximately 39% at the end of July. I'd like to turn the call over to Faramarz to discuss the financial results in more detail.

Speaker #2: Net exposure ended the quarter at around 33%, compared to about 41% at the end of the first quarter. Solis Glass returned 4.9% in July, bringing the 2026 year-to-date return to 6.1%.

David Einhorn: Net exposure ended Q2 at around 33%, compared to about 41% at the end of Q1. Solasglas returned 4.9% in July, bringing the 2026 year-to-date return to 6.1%. Net exposure in the investment portfolio was approximately 39% at the end of July. I'd like to turn the call over to Faramarz to discuss the financial results in more detail.

Speaker #2: Net exposure in the investment portfolio was approximately 39% at the end of July. Now, I'd like to turn the call over to Farmars to discuss the financial results in more detail.

Speaker #4: Thank you, David. Good morning, everyone. During the second quarter of 2026, GREENLIGHT RE reported a net loss of 29.6 million, or 89 cents per diluted share.

Faramarz Romer: Thank you, David. Good morning, everyone. During Q2 2026, Greenlight Re reported a net loss of $29.6 million or $0.89 per diluted share. The underwriting loss was marginal at $0.2 million, resulting in a combined ratio of 100.1%, which included 17.1 percentage points of cat and large losses during Q2. By comparison, the cat and large loss ratio was 4% for Q2 last year. The majority of the cat and large losses for Q2 of this year related to our specialty book. As the Middle East war continued, we booked an additional $20 million of loss reserves in Q2 on top of the $5 million reserved in Q1. The total $25 million reserves include one known full limit loss accounting for $7.6 million.

Speaker #4: The underwriting loss was marginal at 0.2 million dollars, resulting in a combined ratio of 100.1%, which included 17.1 percentage points of cap and large losses during the quarter.

Speaker #4: By comparison, the cap and large loss ratio was 4% for the second quarter last year. The majority of the cap and large losses for the second quarter of this year related to our specialty book.

Speaker #4: As the additional 20 million of loss reserves in the second quarter on top of the 5 million reserved in the first quarter. The total 25 million reserves include one known full-limit loss accounting for 7.6 million dollars, the other specific event losses made up 9.9 million of the reserves, and the remaining 7.5 million has been reserved as our best estimate of incurred but not reported losses from the conflict.

Faramarz Romer: Other specific event losses made up $9.9 million of the reserves, and the remaining $7.5 million has been reserved as our best estimate of incurred but not reported losses from the conflict. However, there is still a high degree of uncertainty surrounding the insured loss estimates due to limited access to affected areas and restrictions imposed in certain territories. In addition, we incurred a $6.5 million loss from a fire at a QatarEnergy gas facility. We do not believe this was caused by a hostile act or attack connected to the Middle East war. Excluding the cat and large losses, we had a solid underwriting quarter. If we dissect the loss ratio further, the attritional loss ratio during the Q2 improved by 4.3 percentage points to 51.7% versus 56% for the same period last year.

Speaker #4: However, there is still a high degree of uncertainty surrounding the insured loss estimates due to limited access to affected areas and restrictions imposed in certain territories.

Speaker #4: In addition, we incurred a $6.5 million loss from a fire at a Qatar Energy gas facility. We do not believe this was caused by a hostile act or an attack connected to the Middle East war.

Speaker #4: Excluding the cap and large losses, we have a solid we had a solid underwriting quarter, if we dissect the loss ratio further, the attritional loss ratio during the second quarter improved by 4.3 percentage points to 51.7% versus 56% for the same period last year.

Speaker #4: The prior year reserve development was 0.4% during the second quarter of 2026, compared to 1.9% in the same period last year. Improving the combined ratio for by 1.4 percentage points.

Faramarz Romer: The prior year reserve development was 0.4% during the Q2 2026, compared to 1.9% in the same period last year. Improving the combined ratio by 1.4 percentage points. Most of the improvement came from the release of reserves related to the 2025 California wildfires. The 2026 Q2 combined ratio also benefited from 1.8 points of lower acquisition cost ratio and 0.4 points of lower expense ratio compared to the same period last year. Our net investment loss for the quarter was $23.8 million, compared to $7.8 million in the Q2 last year. The majority of the investment loss was related to our investment in Solasglas, which posted a 5.4% loss in the quarter, but the investment loss was partially offset by other investment and interest income on our collateral and funds withheld balances, which contributed $4.1 million.

Speaker #4: Most of the improvement came from the release of reserves related to the 2025 California wildfires. The 2026 second quarter combined ratio also benefited from 1.8 points of lower acquisition cost ratio and 0.4 points of lower expense ratio, compared to the same period last year.

Speaker #4: Our net investment loss for the quarter was 23.8 million, compared to 7.8 million in the second quarter last year. The majority of the investment loss was related to our investment in Solis Glass, which posted a 5.4% loss in the quarter, but the investment loss was partially offset by other investment and interest income on our collateral and funds withheld balances which contributed 4.1 million dollars.

Speaker #4: Now, let's look at our results for the quarter at the segment level. The open market segment reported a pre-tax income of 3.4 million, composed of underwriting loss of 1 million, and investment income of 4.4 million.

Faramarz Romer: Now let's look at our results for the quarter at the segment level. The Open Market segment reported a pre-tax income of $3.4 million, composed of underwriting loss of $1 million and investment income of $4.4 million. For the Q2, the Open Market segment net written premiums decreased by 10% to $128.2 million, while net earned premiums decreased by 3%. A decrease in net earned premiums was mainly related to the casualty book, which we had decided to non-renew early in 2025. The Open Market combined ratio for the Q2 was 100.7%, mainly driven by the Middle East conflict losses that I mentioned earlier. The cat and large losses accounted for 20.3 combined ratio points for the quarter. The acquisition cost ratio for the Open Market segment improved by 1.1 points compared to the same period last year. Moving to the Innovation segment.

Speaker #4: For the second quarter, the open market segment net written premiums decreased by 10% to $128.2 million, while net earned premiums decreased by 3%. The decrease in net earned premiums was mainly related to the casualty book, which we had decided to non-renew early in 2025.

Speaker #4: The open market combined ratio for the second quarter was 100.7%, mainly driven by the Middle East conflict losses that I mentioned earlier. The cap and large losses accounted for 20.3 combined ratio points for the quarter.

Speaker #4: The acquisition cost ratio for the open market segment improved by 1.1 points compared to the same period last year. Moving to the innovation segment, the innovation segment reported a pre-tax income of $1.5 million, composed of underwriting income of $2.6 million, investment loss of $0.5 million, and other expenses of $0.6 million.

Faramarz Romer: Moving to the Innovation segment. The Innovation segment reported a pre-tax income of $1.5 million, composed of underwriting income of $2.6 million, investment loss of $0.5 million, and other expenses of $0.6 million. During the quarter, Innovation's gross written premiums increased by $3.3 million or 12% to $30.9 million, mainly driven by new business and exposure growth from existing treaties in financial and specialty lines. Net earned premiums in the Q2 increased by $3.5 million, or 16%, to $24.9 million, as the segment continues to show strong growth. The combined ratio for the Innovation segment was 89.7% during the Q2, compared to 107% for the same period last year. The loss ratio improved by 9.5 points, partially related to the lower attritional losses and partially due to improvement in prior year reserve development.

Faramarz Romer: The Innovation segment reported a pre-tax income of $1.5 million, composed of underwriting income of $2.6 million, investment loss of $0.5 million, and other expenses of $0.6 million. During the quarter, Innovation's gross written premiums increased by $3.3 million or 12% to $30.9 million, mainly driven by new business and exposure growth from existing treaties in financial and specialty lines. Net earned premiums in the Q2 increased by $3.5 million, or 16%, to $24.9 million, as the segment continues to show strong growth. The combined ratio for the Innovation segment was 89.7% during the Q2, compared to 107% for the same period last year. The loss ratio improved by 9.5 points, partially related to the lower attritional losses and partially due to improvement in prior year reserve development. Acquisition cost ratio for the Innovation segment improved by 5.4 points, while the expense ratio improved by 2.4 points.

Speaker #4: During the quarter, innovations gross written premiums increased by 3.3 million or 12% to 30.9 million. Mainly driven by new business and exposure growth from existing treaties in financial and specialty lines.

Speaker #4: Net earned premiums in the second quarter increased by 3.5 million dollars, or 16% to 24.9 million, as the segment continues to show strong growth.

Speaker #4: The combined ratio for the innovation segment was 89.7% during the second quarter, compared to 107% for the same period last year. The loss ratio improved by 9.5 points, partially related to lower attritional losses and partially due to improvement in prior year reserve development.

Speaker #4: Acquisition cost ratio for the innovation segment improved by 5.4 points, while the expense ratio improved by 2.4 points. During the second quarter, we repurchased 14.2 million dollars of shares.

Faramarz Romer: Acquisition cost ratio for the Innovation segment improved by 5.4 points, while the expense ratio improved by 2.4 points. During Q2, we repurchased $14.2 million of shares. Subsequently, we repurchased an additional $3.9 million of shares. Since the beginning of this year, we have repurchased 4% of our outstanding shares for a total of $23.1 million. We have $36 million remaining under the current board-approved repurchase plan, which will allow us to continue repurchasing shares opportunistically. At the end of Q2, our fully diluted book value per share was $20.61, an increase of 0.9% for H1 of the year. That concludes our prepared remarks. The operator will now open the line for your questions.

Faramarz Romer: During Q2, we repurchased $14.2 million of shares. Subsequently, we repurchased an additional $3.9 million of shares. Since the beginning of this year, we have repurchased 4% of our outstanding shares for a total of $23.1 million. We have $36 million remaining under the current board-approved repurchase plan, which will allow us to continue repurchasing shares opportunistically. At the end of Q2, our fully diluted book value per share was $20.61, an increase of 0.9% for H1 of the year. That concludes our prepared remarks. The operator will now open the line for your questions.

Speaker #4: Subsequently, we repurchased an additional 3.9 million dollars of shares. Since the beginning of this year, we have repurchased 4% of our outstanding shares for a total of 23.1 million dollars.

Speaker #4: We have $36 million remaining under the current board-approved repurchase plan, which will allow us to continue repurchasing shares opportunistically. At the end of the second quarter, our fully diluted book value per share was $20.61, an increase of 0.9% for the first six months of the year.

Speaker #4: That concludes our prepared remarks. The operator will now open the line for your questions.

Speaker #2: 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.

Operator: 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. One moment please before we pull for questions. Once again, that's star one to be placed in the question queue. Our first question today is coming from Ross Haberman from RLH Investments. Your line is now live.

Speaker #2: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue.

Speaker #2: For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1. One moment, please. Before we pull up for questions.

Speaker #2: Once again, that's star 1 to be placed in the question queue. Our first question today is coming from Ross Haberman from RLH Investments. Your line is now live.

Speaker #5: Good morning, gentlemen. Thanks for taking the call. Could you just elaborate, if you would, on your total Middle East exposure on direct or reinsurance to facilities?

Ross Haberman: Good morning, gentlemen. Thanks for taking the call. Could you just elaborate, if you would, on your total Middle East exposure on direct or reinsurance to facilities? If you could do that. Thank you very much.

Speaker #5: If you could do that, thank you very much.

Speaker #3: I would say it is the Middle East and, in general, marine and aviation an area of concentration for us. We are not a major cat rider.

Faramarz Romer: I would say it is the Middle East and in general, marine and aviation is an area of concentration for us. We are not a major cat writer. We're not a major casualty writer, but we do focus on specialty as an area of strength. It's an area where Greenlight is not merely a following market, but is a respected and important player in that market. When we have events like this, the Ukraine war is another example, we do expect to have meaningful losses. Indeed, we've experienced that in the Middle East, as we did in the Ukraine earlier. It is not as big as our cat exposures, but there's more frequency, perhaps.

Greg Richardson: I would say it is the Middle East and in general, marine and aviation is an area of concentration for us. We are not a major cat writer. We're not a major casualty writer, but we do focus on specialty as an area of strength. It's an area where Greenlight is not merely a following market, but is a respected and important player in that market. When we have events like this, the Ukraine war is another example, we do expect to have meaningful losses. Indeed, we've experienced that in the Middle East, as we did in the Ukraine earlier. It is not as big as our cat exposures, but there's more frequency, perhaps.

Speaker #3: We're not a major cashly rider, but we do focus on specialty as an area of strength. It's an area where green light is not merely a following market, but is a respected and important player in that market.

Speaker #3: So when we have events like this, the UK Crane War is another example, we do expect to be have meaningful losses. And indeed, we've experienced that in the Middle East, as we did in the Ukraine earlier.

Speaker #3: It is not as big as our cat exposures, but there's more frequency, perhaps. So we're very comfortable with the losses that we've had. It's well within our risk management guidelines and expectations.

Greg Richardson: We're very comfortable with the losses that we've had. It's well within our risk management guidelines and expectations. Does that get at your question?

Speaker #3: Does that answer your question?

Speaker #5: Thank you. Yes, please.

Ross Haberman: Yes, please.

Speaker #2: Thank you. Our next question today is coming from Kevin English, a private investor. Your line is now live.

Operator: Thank you. Our next question today is coming from Kevin English, a private investor. Your line is now live.

Speaker #6: Hi, guys. Thanks again for taking my call. One quick question, just a numbers one. Just related to the increase in liquidity funds, sort of relative to end of year versus June 30, just was curious, what sort of is driving that and what specifically that sort of includes?

Kevin English: Hi, guys. Thanks again for taking my call. One quick question, just a numbers one. Just related to the increase in liquidity funds sort of relative to end of year versus 30 June. Just was curious what sort of is driving that and what specifically that sort of includes. I know you sort of footnoted it's cash and cash equivalents and highly liquid investments, but wondering if there's just a little more color you could provide on that.

Speaker #6: I know you sort of footnoted it's cash and cash equivalents and highly liquid investments, but wondering if there's just a little more color you could provide on that.

Speaker #4: Sure. Hi, Kevin. This is Far Mars. The liquidity funds are the balances that we have at Funds at Lloyd’s. That backs our Lloyd’s syndicate books.

Faramarz Romer: Sure. Hi, Kevin, this is Faramarz. The liquidity funds are the balances that we have at funds at Lloyd's that backs our Lloyd's syndicate books. We have transferred them. They were sitting in cash and cash equivalents. We moved them into a Lloyd's approved liquidity fund. The majority of the balance you're seeing was in transition at year-end. It was sitting as $12 million at the end of the year, and we moved the remaining balance during the H1 of this year. That's why you're seeing that increase. It was previously sitting as cash at Lloyd's, but on our balance sheet, it would've been under our reinsurance balance receivable. Because those are funds that are sitting as either funds withheld by the cedents or providing capital for our FAO business.

Speaker #4: We have transferred them. They were sitting in cash and cash equivalents. We moved them into a Lloyd's-approved liquidity fund. So the majority of the balance you're seeing was in transition at year end.

Speaker #4: So we moved it was sitting as $12 million at the end of the year, and we moved the remaining balance during the first half of this year.

Speaker #4: So that's why you're seeing that increase. So it was previously sitting as cash at Lloyd's, but on our balance sheet, it would have been under our reinsurance balance receivable.

Speaker #4: So because those are funds that are sitting as either funds withheld by decedents or providing capital for our foul business.

Speaker #6: Got it. That's helpful. And the second sort of question I had is just related to one that I brought up a couple quarters ago, but so apologies to be repetitive here, but was wondering if there are any sort of upcoming discussions with the board about removing the sort of artificial investment ceiling.

Kevin English: Got it. That's helpful. The second sort of question I had is just related to one that I brought up a couple quarters ago, apologies to be repetitive here, but was wondering if there are any sort of upcoming discussions with the board about removing the sort of artificial investment ceiling that governs the Solasglas funds. I know I'd asked this to the team last time, Greg, you gave a response relating to not wanting to move it around willy-nilly and sort of understanding that there's quarterly volatility. One thing I continue to not understand is, one, why you care about the quarterly volatility of the Solasglas Fund when it's returned pretty consistently 10% per year, not just since 2021, but if I start looking at the returns as of January 2019, after the kind of risk management shift.

Speaker #6: That governs the Solis Glass funds. I know I'd asked this to the team last time, Greg, you gave a response relating to not wanting to move it around, willy-nilly, and sort of understanding that there's quarterly volatility, but one thing I continue to not understand is one, why you care about the quarterly volatility of the Solis Glass fund when it's returned pretty consistently 10% per year, not just since 2021, but if I start looking at the returns as of January 2019, after the kind of risk management shift, it seems to be the most consistent and highest returning part of the strategy it seems to be mean reverting in terms of negative volatility.

Kevin English: It seems to be the most consistent and highest returning part of the strategy. It seems to be mean reverting in terms of negative volatility, as evident by the last couple of months. I could understand not wanting to be more invested at the wrong periods of time given that markets are arguably frothy, but the fund seems to do its best when markets are doing their worst. You can look at 2022 as a guide to that. It's not like it's market dependent in terms of strong years. Look at 2020. Was hoping that we'd be seeing some update on the website there and hoping that's a discussion that's upcoming with the board.

Speaker #6: As evident by the last couple months, I could understand not wanting to be more invested at the wrong periods of time, given that markets are arguably frothy, but the fund seems to do its best when markets are doing their worst.

Speaker #6: You can look at 2022 as a guide to that. It's not like it's market dependent in terms of strong years. Look at 2020. I mean, it's pretty sort of muted as far as the correlation to markets.

Speaker #6: So was hoping that we'd be seeing some update on the website there and hoping that that's a discussion that's upcoming with the board, but just wanted to raise that again and maybe ask pointedly why do you care at this point about the quarterly volatility especially given there's no debt on the balance sheet, the ratings seem to be as strong as ever.

Kevin English: Just wanted to raise that again and maybe ask pointedly why do you care at this point about the quarterly volatility, especially given there's no debt on the balance sheet, the ratings seem to be as strong as ever. Yeah, just curious to hear an update on that.

Speaker #6: See, I'm just curious to hear an update on that.

Speaker #3: Well, first of all, it's great to hear your impressions of that, and we agree with you. And we take capital allocation very seriously. It's core to what we do.

Greg Richardson: Well, first of all, it's great to hear your impressions of that, and we agree with you. We take capital allocation very seriously. It's core to what we do. We agree with you that in terms of a return on what our allocated AM Best capital, it has been very high performing. At the same time, we've come out of a very strong reinsurance market. It's now we're in a softer phase, so we're very actively thinking about how we redeploy capital. Absolutely one of the options is to increase the allocation to Solasglas, and I would not be surprised if that happens. At the same time, we're actively buying back stock as well. Without forecasting exactly what we're doing, your thoughts are harmonized well with my thoughts. Faramarz, do you want to add to that?

Speaker #3: And we agree with you that in terms of a return on what our allocated AMS capital it is, it has been very high performing.

Speaker #3: At the same time, we're just coming out we've come out of a very strong reinsurance market. It's now we're in a softer phase. So we're very actively thinking about how we redeploy capital and absolutely one of the options is to increase the allocation to Solis Glass.

Speaker #3: And I would not be surprised if that happens. At the same time, we're actively buying back stock as well. And so without forecasting exactly what we're doing, your thoughts are harmonized well with my thoughts.

Speaker #3: Farmars, do you want to add to that?

Speaker #4: No, that's okay. We've increased the allocation over the last few years, and as Greg mentioned, we continue to look at it from the perspective of how much excess surplus we have—how much excess capital we have—relative to what we need to hold for our ratings and our growth in our surplus.

Faramarz Romer: No. Look, I mean, we've increased the allocation over the last few years, and as Greg mentioned, we continue to look at it from how much excess surplus we have, how much excess capital we have relative to what we need to hold for our ratings and our growth in our surplus. We have a number of options in managing that capital base. Buybacks is obviously one of them right now. Buying back at a deep discount to our book value is quite accretive to our shareholders as well. We're looking at it from all angles, Kevin, but we appreciate your thoughts on this. Thank you.

Speaker #4: And we have a number of options in managing that capital base. And buybacks is obviously one of them. Right now, buying back at a deep discount to our book value is quite accretive to our shareholders as well.

Speaker #4: So we're looking at it from all angles, Kevin. But I appreciate your thoughts on this. Thank you.

Speaker #6: No, that's fantastic to hear. And yeah, I appreciate all of that context. Just because, again, just with a closing comment here, it's just it causation versus correlation is a dangerous thing to look at from a data perspective, but it's hard to ignore at this point the discount to book value and how that's coincided with the reduced exposure to the equity book.

Kevin English: No, that's fantastic to hear. Yeah, I appreciate all of that context just because again, just with a closing comment here, it's just causation versus correlation is a dangerous thing to look at from a data perspective. It's hard to ignore at this point the discount to book value and how that's coincided with the reduced exposure to the equity book. It makes no sense in the world that the stock should trade at a discount to book value today versus history, when it traded at a premium when rates were zero and the float was receiving no interest. It seems that obviously the insurance book has ebbed and flowed, but I think that it'll probably go a long way to just kind of remove those restrictions and be a little bit more invested on that. Anyway, thanks for taking my call. I appreciate the context.

Speaker #6: It makes no sense in the world that this stock should trade at a discount to book value today versus history when it traded at a premium when rates were zero and the float was receiving no interest.

Speaker #6: And yeah, it seems that obviously the insurance book has ebbed and flowed, but I think that it'll probably go a long way to just kind of remove those restrictions and be a little bit more invested on that.

Kevin English: It seems that obviously the insurance book has ebbed and flowed, but I think that it'll probably go a long way to just kind of remove those restrictions and be a little bit more invested on that. Anyway, thanks for taking my call. I appreciate the context.

Speaker #6: Anyway, thanks for taking my call. I appreciate the context.

Speaker #4: Thanks, Kevin.

Faramarz Romer: Thanks, Kevin.

Speaker #2: Thank you. There are no additional questions at this time. Should you have any follow-up questions, please direct them to Jeremy Helman of the equity group at ir@greenlightre.ky.

Operator: Thank you. There are no additional questions at this time. Should you have any follow-up questions, please direct them to Jeremy Hellman of The Equity Group at ir@greenlightre.ky and he'll be happy to assist you. This now concludes Greenlight Re's Q2 2026 earnings conference call. Thank you. You may now disconnect.

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