GRAND CAYMAN, Cayman Islands, Feb. 22, 2017 (GLOBE NEWSWIRE) — Greenlight Capital Re, Ltd. (NASDAQ:GLRE) today announced financial results for the fourth quarter and year ended December 31, 2016. Greenlight Re reported net income of $49.2 million for the fourth quarter of 2016, compared to a net loss of $43.1 million for the same period in 2015. The net income per share for the fourth quarter of 2016 was $1.31, compared to a net loss per share of $1.17 for the same period in 2015.

Fully diluted adjusted book value per share was $23.38 as of December 31, 2016, a 5.5% increase from $22.17 per share as of December 31, 2015. 

“We are pleased with our fourth quarter underwriting performance,” said Bart Hedges, Chief Executive Officer of Greenlight Re. “Despite the competitive environment during 2016, we continued to grow and diversify our underwriting portfolio while also resolving some problematic legacy contracts.”

Financial and operating highlights for Greenlight Re for the fourth quarter ended December 31, 2016 include:

  • Gross written premiums of $148.8 million, compared to $144.9 million in the fourth quarter of 2015; net earned premiums were $136.6 million, an increase from $119.9 million reported in the prior-year period. 
     
  • Underwriting income of $1.4 million, compared to $2.8 million in the fourth quarter of 2015.
     
  • The combined ratio for the fourth quarter 2016 was 99.0% compared to 97.7% for the fourth quarter 2015.
     
  • A net investment gain of 5.0% on Greenlight Re’s investment portfolio managed by DME Advisors, LP compared to a net investment loss of 4.0% in the fourth quarter of 2015.

“Our fourth quarter 2016 investment gain was solid despite our low net exposure,” stated David Einhorn, Chairman of the Board of Directors. “While we faced challenges during 2016, the Company made significant strides to position itself to grow book value per share from both underwriting and investment activities.”

Financial and operating highlights for Greenlight Re for the year ended December 31, 2016 include:

  • Gross written premiums in 2016 of $536.1 million, an increase of 6.8% compared to 2015; net earned premiums were $513.1 million, an increase of 25.6% over the previous year. 
     
  • An underwriting loss of $18.8 million, compared to an underwriting loss of $41.9 million for 2015. All of the loss during 2016 related to the novation of legacy contracts in run-off.
     
  • The combined ratio for the year ended December 31, 2016 was 103.6%, compared to 110.3% for 2015.
     
  • Net investment income of $76.2 million, representing a return of 7.2%, compared to a net investment loss of $281.9 million during 2015 when Greenlight Re reported a negative 20.2% return.

Conference Call Details

Greenlight Re will hold a live conference call to discuss its financial results for the fourth quarter and year ended December 31, 2016 on Thursday, February 23, 2017 at 9:00 a.m. Eastern time. The conference call title is Greenlight Capital Re, Ltd. Fourth Quarter and Year End 2016 Earnings Call.

To participate in the Greenlight Capital Re, Ltd. Fourth Quarter and Year End 2016 Earnings Call, please dial in to the conference call at:

U.S. toll free   1-888-336-7152
International  1-412-902-4178

Telephone participants may avoid any delays by pre-registering for the call using the following link to receive a special dial-in number and PIN.

Conference Call registration link: http://dpregister.com/10100396

The conference call can also be accessed via webcast at:

http://services.choruscall.com/links/glre170223.html

A telephone replay of the call will be available from 11:00 a.m. Eastern time on February 23, 2017 until 9:00 a.m. Eastern time on March 2, 2017. The replay of the call may be accessed by dialing 1-877-344-7529 (U.S. toll free) or 1-412-317-0088 (international), access code 10100396. An audio file of the call will also be available on the Company’s website, www.greenlightre.ky.

Regulation G
Fully diluted adjusted book value per share is considered a non-GAAP measure and represents basic adjusted book value per share combined with the impact from dilution of share based compensation including in-the-money stock options and RSUs as of any period end. Book value is adjusted by subtracting the amount of the non-controlling interest in joint venture from total shareholders’ equity to calculate adjusted book value. We believe that long term growth in fully diluted adjusted book value per share is the most relevant measure of our financial performance because it provides management and investors a yardstick by which to monitor the shareholder value generated. In addition, fully diluted adjusted book value per share may be of benefit to our investors, shareholders and other interested parties to form a basis of comparison with other companies within the property and casualty reinsurance industry.

Net underwriting income (loss) is considered a non-GAAP financial measure because it excludes items used in the calculation of net income before taxes under U.S. GAAP. The measure includes underwriting expenses which are directly related to underwriting activities as well as an allocation of other general and administrative expenses. Net underwriting income (loss) is calculated as net premiums earned, less net loss and loss adjustment expenses incurred, less, acquisition costs and less underwriting expenses. The measure excludes, on a recurring basis: (1) net investment income; (2) any foreign exchange gains or losses; (3) corporate general and administrative expenses; (4) other income (expense) not related to underwriting, and (5) income taxes and income attributable to non-controlling interest. We exclude net investment income and foreign exchange gains or losses as we believe these are influenced by market conditions and other factors not related to underwriting decisions. We exclude corporate general and administrative expenses because these expenses are generally fixed and not incremental to or directly related to our underwriting operations. We believe all of these amounts are largely independent of our underwriting process and including them distorts the analysis of trends in our underwriting operations. Net underwriting income should not be viewed as a substitute for U.S. GAAP net income.

Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the U.S. federal securities laws. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in the U.S. Federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward-looking statements made on behalf of the Company. These risks and uncertainties include the impact of general economic conditions and conditions affecting the insurance and reinsurance industry, the adequacy of our reserves, our ability to assess underwriting risk, trends in rates for property and casualty insurance and reinsurance, competition, investment market fluctuations, trends in insured and paid losses, catastrophes, regulatory and legal uncertainties and other factors described in our annual report on Form 10-K filed with the Securities Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Greenlight Capital Re, Ltd.
Greenlight Re (www.greenlightre.ky) is a NASDAQ listed company with specialist property and casualty reinsurance companies based in the Cayman Islands and Ireland. Greenlight Re provides a variety of custom-tailored reinsurance solutions to the insurance, risk retention group, captive and financial marketplaces. Established in 2004, Greenlight Re selectively offers customized reinsurance solutions in markets where capacity and alternatives are limited.  With a focus on deriving superior returns from both sides of the balance sheet, Greenlight Re’s assets are managed according to a value-oriented equity-focused strategy that complements the Company’s business goal of long-term growth in book value per share.

GREENLIGHT CAPITAL RE, LTD.
CONSOLIDATED BALANCE SHEETS
 
December 31, 2016 and 2015
(expressed in thousands of U.S. dollars, except per share and share amounts)
  2016   2015
Assets      
Investments      
Debt instruments, trading, at fair value $ 22,473     $ 39,087  
Equity securities, trading, at fair value 844,001     905,994  
Other investments, at fair value 156,063     119,083  
Total investments 1,022,537     1,064,164  
Cash and cash equivalents 39,858     112,162  
Restricted cash and cash equivalents 1,202,651     1,236,589  
Financial contracts receivable, at fair value 76,381     13,215  
Reinsurance balances receivable 219,126     187,940  
Loss and loss adjustment expenses recoverable 2,704     3,368  
Deferred acquisition costs, net 61,022     59,823  
Unearned premiums ceded 2,377     3,251  
Notes receivable, net 33,734     25,146  
Other assets 4,303     6,864  
Total assets $ 2,664,693     $ 2,712,522  
Liabilities and equity      
Liabilities      
Securities sold, not yet purchased, at fair value $ 859,902     $ 882,906  
Financial contracts payable, at fair value 2,237     28,245  
Due to prime brokers 319,830     396,453  
Loss and loss adjustment expense reserves 306,641     305,997  
Unearned premium reserves 222,527     211,954  
Reinsurance balances payable 41,415     18,326  
Funds withheld 5,927     7,143  
Other liabilities 14,527     12,725  
Total liabilities 1,773,006     1,863,749  
Equity      
Preferred share capital (par value $0.10; authorized, 50,000,000; none issued)      
Ordinary share capital (Class A: par value $0.10; authorized, 100,000,000; issued and outstanding, 31,111,432 (2015: 30,772,572): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,895 (2015: 6,254,895)) 3,737     3,703  
Additional paid-in capital 500,337     496,401  
Retained earnings 370,168     325,287  
Shareholders’ equity attributable to shareholders 874,242     825,391  
Non-controlling interest in joint venture 17,445     23,382  
Total equity 891,687     848,773  
Total liabilities and equity $ 2,664,693     $ 2,712,522  
               

GREENLIGHT CAPITAL RE, LTD.
CONSOLIDATED STATEMENTS OF INCOME
 
Years ended December 31, 2016, 2015 and 2014
(expressed in thousands of U.S. dollars, except per share and share amounts)
  2016   2015   2014
Revenues          
Gross premiums written $ 536,072     $ 502,124     $ 324,023  
Gross premiums ceded (10,015 )   (9,001 )   (13,493 )
Net premiums written 526,057     493,123     310,530  
Change in net unearned premium reserves (12,939 )   (84,736 )   43,710  
Net premiums earned 513,118     408,387     354,240  
Net investment income (loss) 76,183     (281,924 )   122,575  
Other income (expense), net (935 )   (3,413 )   2,987  
Total revenues 588,366     123,050     479,802  
Expenses          
Loss and loss adjustment expenses incurred, net 380,815     317,097     234,986  
Acquisition costs, net 134,534     116,207     107,665  
General and administrative expenses 25,808     23,434     24,500  
Total expenses 541,157     456,738     367,151  
Income (loss) before income tax 47,209     (333,688 )   112,651  
Income tax (expense) benefit (509 )   1,755     624  
Net income (loss) including non-controlling interest 46,700     (331,933 )   113,275  
Loss (income) attributable to non-controlling interest in joint venture (1,819 )   5,508     (3,683 )
Net income (loss) $ 44,881     $ (326,425 )   $ 109,592  
Earnings (loss) per share          
Basic $ 1.20     $ (8.90 )   $ 2.94  
Diluted $ 1.20     $ (8.90 )   $ 2.89  
Weighted average number of ordinary shares used in the determination of earnings and loss per share          
Basic 37,267,145     36,670,466     37,242,687  
Diluted 37,340,018     36,670,466     37,874,387  
                 

The following table provides the ratios for the years ended December 31, 2016, 2015 and 2014:
  Year ended December 31
  2016   2015   2014
  Frequency   Severity   Total   Frequency   Severity   Total   Frequency   Severity   Total
                                   
Loss ratio 75.8 %   55.4 %   74.2 %   82.6 %   9.5 %   77.6 %   69.9 %   16.1 %   66.3 %
Acquisition cost ratio 26.5 %   23.2 %   26.2 %   28.0 %   35.2 %   28.5 %   31.2 %   19.7 %   30.4 %
Composite ratio 102.3 %   78.6 %   100.4 %   110.6 %   44.7 %   106.1 %   101.1 %   35.8 %   96.7 %
Underwriting expense ratio         3.2 %           4.2 %           4.7 %
Combined ratio         103.6 %           110.3 %           101.4 %
                                         

 

CONTACT: Contact:
Garrett Edson
ICR
(203) 682-8331
IR@greenlightre.ky

Media:
Brian Ruby
ICR
(203) 682-8268
Brian.ruby@icrinc.com
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