Greenlight Capital Re Ltd (GLRE) Reports Growth in Q3 2023 Earnings
Greenlight Capital Re Ltd (NASDAQ:GLRE) sees an 18.0% increase in gross premiums written in Q3 2023.
Net income rises to $13.5 million, a significant turnaround from the net loss in the same quarter last year.
Fully diluted book value per share grows by 2.3%, reaching $16.58.
Underwriting income hits $14.4 million, contrasting with an $18.9 million loss in Q3 2022.
On November 8, 2023, Greenlight Capital Re Ltd (NASDAQ:GLRE) announced its financial results for the third quarter ended September 30, 2023. The company reported a substantial improvement in its financial metrics, with gross premiums written climbing by 18.0% to $183.1 million and net premiums earned increasing by 33.8% to $163.1 million. A notable underwriting income of $14.4 million was reported, a reversal from the underwriting loss of $18.9 million in the same period last year. The company's net income stood at $13.5 million, or $0.39 per diluted ordinary share, compared to a net loss of $18.5 million, or $(0.56) per diluted ordinary share, in the third quarter of 2022.
Financial Highlights and Performance Analysis
The company's combined ratio improved significantly to 91.2%, down from 115.4% in the third quarter of 2022. However, total investment income decreased to $5.1 million from $11.6 million in the previous year. The fully diluted book value per share increased by $0.37, or 2.3%, to $16.58, from $16.21 at the end of the second quarter of 2023.
Simon Burton, CEO of Greenlight Re, commented on the results, stating,
The underwriting result of 91.2% combined ratio led our performance in the third quarter as we grew book value by 2.3%. This result was impacted by approximately 4 combined ratio points of legacy reserve development, as inflationary pressure has persisted in discontinued areas of our business."
David Einhorn (Trades, Portfolio), Chairman of the Board of Directors, reflected on the market conditions, saying,
The third quarter was challenging period in the equity markets. A partial reversal of our gains in Green Brick Partners slightly more than offset good performance throughout the balance of the portfolio. Year-to-date through September 30, the Solasglas fund was up 9.1%."
Investment and Underwriting Performance
The company's investment in the Solasglas fund, managed by DME Advisors, returned (0.6)%, representing a net loss of $1.9 million. Other investment income, primarily from interest earned on restricted cash and cash equivalents, amounted to $7.0 million. Greenlight Re also reported a non-underwriting loss of $1.3 million for the quarter, primarily due to foreign exchange losses.
Balance Sheet and Income Statement Highlights
Greenlight Re's balance sheet showed total assets of $1.74 billion as of September 30, 2023, with investments totaling $296.6 million. The company's liabilities stood at $1.16 billion, with loss and loss adjustment expense reserves accounting for $658.2 million. Shareholders' equity increased to $575.9 million.
The condensed consolidated results of operations for the three months ended September 30, 2023, showed net underwriting and investment income of $19.5 million, with corporate expenses amounting to $3.3 million. The net income of $13.5 million contributed to the increase in shareholder value, as evidenced by the growth in fully diluted book value per share.
Conclusion and Upcoming Events
Greenlight Re's third-quarter performance demonstrates resilience in a challenging market environment, with significant improvements in underwriting and net income. The company will host a live conference call to discuss its financial results on November 9, 2023. Investors and interested parties can access the webcast or telephone replay details provided in the earnings release.
For a more detailed analysis of Greenlight Capital Re Ltd (NASDAQ:GLRE)'s financial results, please visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Greenlight Capital Re Ltd for further details.
This article first appeared on GuruFocus.
