Greenlight Capital Re, Ltd. Q3 FY2025 earnings call

• Q3 2025 was mixed: net loss of $4.4 million, best quarterly combined ratio 86.6% ($22.3M underwriting income) due to strong underwriting and benign cat quarter. - Commented on Hurricane Melissa, noting it's a Q4 event with no significant expected loss to Greenlight Re. - Open Market book had 84.5% combined ratio, Innovations book 96.7%, both with premium growth. - Investment loss of $17.4 million, mainly from Solasglas (-3.2% quarter) and Innovations ($11.3M net unrealized loss). - Refinanced term loan to 5-year $50M revolving line of credit, reduced debt leverage to 5.3%, repurchased 512,000 shares for $7M.

The Open Market segment reported a pretax income of $27.9 million, composed of underwriting income of $22.2 million and investment income of $5.6 million. It grew net written premiums by 9.5% to $140.4 million, with net earned premiums up 14.1%, driven by funds at Lloyd's and Financial, Property and Specialty lines, offset by casualty premium declines. The Open Market combined ratio improved to 84.5%. The Innovation segment grew net written premiums by 57.5% to $22.3 million, but had a combined ratio of 96.7%. Net earned premiums decreased due to increased retro ceded premiums. The segment had an underwriting income of $0.7 million but faced investment impairment leading to a net loss of $11.3 million.

• Expect to renew most non-casualty business and grow somewhat as market softens, rates/terms attractive. - Anticipate continued strong organic growth from existing Innovations clients and attractive new business opportunities.

• Investment losses related to Solasglas and Innovations portfolios. - Potential impact of events like Hurricane Melissa, though early assessment is no significant loss. - Market uncertainties affecting investment performance, especially outside AI ecosystem.

Q: Could you please provide an update on the macro part of the Solasglas fund? What is your view and your position regarding to U.S. dollar, gold and short-term interest?

A: Sure. We've maintained a core position in gold, with physical gold and binary digital options on gold. Long SOFR futures into 2026 (view on Fed rate cuts) and inflation swaps (view on higher reported inflation).

Q: This is more of a long-term question for David. I believe a few years ago, you evaluated the future of the company and one of the options considered given the discount to book value was closing the company. With all the work put to the company since and 7 years in a row of positive investment performance, at least year-to-date, do you see a long-term future for the company? Also, investors like Howard Marks and Warren Buffett work well past regular retirement age, could you see yourself doing that?

A: Yes. I think the company has made enough structural improvement to earn ROE greater than cost of equity, shares should trade at or above book value. Don't see liquidation as solution. I'm 56, expect to do this for substantial additional time.