Greenlight Capital Re Q3 2025 Earnings Report

Greenlight Capital Re EPS Results

• Actual EPS: -$0.13
• Consensus EPS: $0.10
• Beat/Miss: Missed by -$0.23
• One Year Ago EPS: N/A

Greenlight Capital Re Revenue Results

• Actual Revenue: $146.07 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Greenlight Capital Re Announcement Details

• Quarter: Q3 2025
• Date: 11/3/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, November 4, 2025
• Conference Call Time: 9:00AM ET

Greenlight Capital Re (NASDAQ:GLRE) is a specialty property and casualty reinsurance company headquartered in the Cayman Islands. Through its operating subsidiaries, the company provides reinsurance capacity to insurance companies and other risk-bearing organizations, helping them manage and transfer portions of their underwriting exposure.

Its business has included customized reinsurance arrangements across property, casualty and specialty lines. These arrangements may include quota-share and excess-of-loss structures, allowing clients to address specific risks, expand underwriting capacity or manage the volatility of their insurance portfolios.

Founded in 2004, Greenlight Capital Re has operated through entities in the Cayman Islands and Ireland and has served clients in multiple international insurance markets. The company has also historically managed the investment of reinsurance premiums as part of its broader business model.

Greenlight Capital Re Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Record underwriting result — Q3 combined ratio was 86.6% with underwriting income of $22.3M, driven by a benign catastrophe quarter and improved attritional loss ratios.
• Negative Sentiment: Investment losses drove a Q3 net loss of $4.4M, including a $17.4M net investment loss made up of a -3.2% SolasGlass decline and a $16.4M write-down in the Innovations portfolio.
• Positive Sentiment: Top-line growth — Open Market net written premiums rose 9.5% and Innovations net written premiums rose 57.5%, and management expects continued organic growth in the Innovations book despite market softness.
• Positive Sentiment: Stronger capital position — repurchased 512k shares for $7M, refinanced to a $50M revolver, reduced debt to $20M outstanding (leverage down to ~5.3%), and added a Lloyd’s LOC that released previously posted cash.

Presentation

[Operator]

Thank you for joining the Greenlight Capital Re, Limited Third Quarter 2025 earnings conference call. At this time, 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's now my pleasure to turn the call over to David Sigmon, Greenlight Re General Counsel. You may begin.

[David Sigmon, General Counsel at Greenlight Capital Re, Limited]

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, 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 regarding future results and are subject to risks and uncertainties. As a result, actual results may differ materially from those expressed or implied.

[David Sigmon, General Counsel at Greenlight Capital Re, Limited]

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 December 31st, 2024. 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.

[Greg Richardson, CEO at Greenlight Capital Re, Limited]

Thank you, David. Good morning, everyone, and thank you for joining us. Q3 2025 was a mixed quarter with an exceptional underwriting result offset by investment losses. Overall, we reported a net loss of $4.4 million in Q3 2025, which brings our year-to-date net income to $25.6 million. Fully diluted book value per share decreased 0.4% in the quarter to $18.90, and increased 5.3% for the first nine months of the year. We reported our best quarterly combined ratio of 86.6%, translating to a record $22.3 million of underwriting income. This result was driven by a combination of the strong underlying profitability of the book, assisted by a benign cat quarter. We would be remiss not to comment on Hurricane Melissa. There are strong historical ties between the Cayman Islands and Jamaica, and our hearts are with all those who have been affected by this incredibly powerful storm.

[Greg Richardson, CEO at Greenlight Capital Re, Limited]

As a reinsurance professional that has closely monitored hurricanes for nearly 30 years, I was impressed by and grateful for the forecasters and their models in predicting both the erratic track and extreme intensity of Melissa. While property is fixed in place, people can get out of the way of the path of the storm with this information. The forecasters certainly saved many lives as a result. From a financial perspective, Melissa is a fourth-quarter event. It is early days, but we do not expect a significant loss to Greenlight Re given the positioning in the cat space and the fact that it missed the Southeastern United States. We have been confident that our underwriting portfolio is positioned to deliver a strong underwriting return, so it is encouraging to see that reflected in our results in Q3.

[Greg Richardson, CEO at Greenlight Capital Re, Limited]

Our open market book delivered an 84.5% combined ratio, while our innovations book delivered a 96.7% combined ratio. Both segments showed meaningful premium growth. Growth in open market was driven by our Funds at Lloyd's book, modest property and financial lines growth, offset by declines in casualty based on underwriting actions discussed last quarter. For our Innovations segment, a good portion of our accounts incept in the second half of the year, and we can see evidence of previously anticipated organic top-line growth beginning to emerge. Unfortunately, our investment performance for the quarter was a loss of $17.4 million. There are two main components of this. Our investment in the Solasglas portfolio was down 3.2% in the quarter. David will provide more color on this in his remarks. In addition, we suffered a net unrealized loss of $11.3 million on our Innovations Investment portfolio.

[Greg Richardson, CEO at Greenlight Capital Re, Limited]

The net unrealized loss on our Innovations portfolio was primarily driven by a $16.4 million write-down of our highest valued investment. Our Innovation Investments are generally illiquid, and we revalue them as soon as we believe the valuation may be impaired or when a new funding round closes. This particular situation is idiosyncratic in that the lead investor was able to secure a new round of equity financing at a substantial discount due to a debt refinancing that fell through at the last minute. We still believe the company's prospects are bright, and the financing removes an overhang from the investment. While this write-down in Q3 is disappointing, I would highlight that we hold our innovations investments for the long term, and we are focused on realized gains and the associated underwriting and fee-income opportunities generated from these investments rather than mark-to-market gains and losses.

[Greg Richardson, CEO at Greenlight Capital Re, Limited]

Further, this position was outsized from a carried value perspective due to prior upward adjustments based on previous financing rounds. Currently, we have no single investment valued at more than $10 million, and only three investments valued at over $5 million. So the risk of a similar write-down on a single investment going forward is mitigated absent an industry-wide event. We are now focused on one-to-one renewals. While the market is clearly softening, we believe rates and terms will remain attractive for our open market reinsurance business. Consequently, we expect to renew most of our non-cash business and perhaps grow somewhat. As noted previously, our innovations book is less susceptible to the supply-demand pressures of the reinsurance market. We anticipate continued strong organic growth from our existing innovations clients and attractive new business opportunities. Now I'd like to turn the call over to David.

[David Einhorn, Chairman of the Board at Greenlight Capital Re, Limited]

Thanks, Greg, and good morning, everyone. The Solasglas fund returned -3.2% in the third quarter. The long portfolio and macro contributed 1.7% and 3.3%, respectively, and the short portfolio detracted 8.1%. During the quarter, the S&P 500 Index advanced 8.1%. The largest positive contributors were long investments in gold, Green Brick Partners, and Core Natural Resources. The largest detractors included a short position in a profitless financial services company, a short basket of homebuilder stocks, and our long position in Kyndryl Holdings. Gold was the largest positive contributor as its price rose 17% over the quarter. Green Brick Partners' shares also advanced 17% during the quarter as the market's expectation for lower rates lifted homebuilder stocks.

[David Einhorn, Chairman of the Board at Greenlight Capital Re, Limited]

While the company continues to execute well on its regionally focused strategy, we remain cautious on the broader housing market and have maintained a nearly fully hedged position by shorting a basket of national homebuilders. This hedge basket offset most of Green Brick's positive contribution during the quarter. Core Natural Resources shares advanced 20% during the quarter, recouping some of its decline from the first half of the year. The company announced significantly improved quarterly results, including an increase in free cash flow. Core used the majority of this cash flow to repurchase shares under the $1 billion share buyback program it announced earlier in the year after successfully completing its merger with Arch Resources.

[David Einhorn, Chairman of the Board at Greenlight Capital Re, Limited]

In addition to the homebuilder hedge basket, the largest detractors for the quarter included a short position in a profitless financial services company that transitioned from a near-term bankruptcy candidate to a meme stock and our long position in Kyndryl Holdings. Kyndryl shares declined 28% during the quarter, giving back some gains after the company posted a less exciting quarterly update than its previous recent couple of quarterly results. Earlier in the year, we established a new large position in a stub created by being Long Fluor Corporation and shorted NuScale Power. More recently, we established a new medium-sized position in Pacific Gas and Electric. Fluor is a global engineering and construction company. In the spring, Fluor experienced a slowdown in capital spending from its customers due to tariff uncertainty, which we expect to reverse and for the business to return to growth in 2026.

[David Einhorn, Chairman of the Board at Greenlight Capital Re, Limited]

Away from its core business, Fluor holds approximately a 40% stake in NuScale Power, a small modular nuclear reactor company. Fluor's stake is worth nearly $5 billion pre-tax, which represents over 60% of its market cap. Fluor has announced plans to divest its holding and use a significant portion of the proceeds toward share buybacks. Pacific Gas and Electric is a California-based regulated utility that transmits and distributes electricity and natural gas. While the company was not exposed to January's catastrophic L.A. wildfires, its earnings multiple collapsed to below 10x on concerns that the California Wildfire Fund, an important defense against wildfire-related damage claims that it shares with Edison International, will be depleted. We invested with a view that the legislature is likely to put in place funding support and make further wildfire risk reform a priority.

[David Einhorn, Chairman of the Board at Greenlight Capital Re, Limited]

We have since seen progress in these initiatives and expect PG&E to re-rate closer to the nearly 18x average peer multiple. In our view, that outside of the boom surrounding a handful of AI and AI-adjacent companies, most of the rest of the economy is floundering. In the midst of this excitement, we are simply not comfortable underwriting long investments within the AI ecosystem and have decided for the most part not to participate. Unfortunately, it has been difficult to make money on the long investments outside of this small cohort of stocks. Our net exposure ended the quarter at about 25%, up from about 2% at the end of the second quarter. Solasglas returned 1.6% in October, bringing the year-to-date return to 1.2%. Net exposure in the investment portfolio was approximately 20% at the end of October.

[David Einhorn, Chairman of the Board at Greenlight Capital Re, Limited]

Now I'd like to turn the call over to Faramarz to discuss the financial results in more detail.

[Faramarz Romer, CFO at Greenlight Capital Re, Limited]

Thank you, David. Good morning, everyone. During the third quarter of 2025, Greenlight Re reported a net loss of $4.4 million, or -$0.13 per diluted share compared to a net income of $35.2 million, or $1.01 per diluted share during the third quarter of 2024. The total underwriting income was $22.3 million, resulting in a combined ratio of 86.6%. Which was 9.3 points better than the same period last year. This included 8 points of improvement due to lack of cat losses in the quarter and 6 points of improvement related to underlying current-year attritional loss ratio. We had 50 basis points of reserve development during the quarter compared to 3.7 points of reserve releases in the third quarter of last year. Our net investment loss was $17.4 million compared to $30.3 million of investment income in the third quarter of 2024.

[Faramarz Romer, CFO at Greenlight Capital Re, Limited]

As Greg mentioned, most of the investment losses related to Solasglas and innovations. However, these losses were partially offset by other investment and interest income of $8.9 million. I will now break down the third quarter results by segment, starting with the Open Market segment. The Open Market segment reported a pre-tax income of $27.9 million, composed of underwriting income of $22.2 million and investment income of $5.6 million. For the quarter, the Open Market segment grew net written premiums by 9.5% to $140.4 million, while net earned premiums grew by 14.1%. The increase was driven primarily from growth in the Funds at Lloyd's business, and the financial property and specialty lines from a combination of new programs and growth in underlying premium volume on renewing programs.

[Faramarz Romer, CFO at Greenlight Capital Re, Limited]

These were offset by the casualty premiums decreasing during the quarter as a result of our decision earlier this year to non-renew most of the open market casualty book. The Open Market combined ratio for the third quarter improved by 10 points to 84.5%, compared to 94.5% for the same period in 2024. The lower loss ratio and a lower acquisition ratio contributed to the improved combined ratio. The current-year loss ratio improved by 11.8 points, driven by 8.3-point improvement in attritional losses and 3.5-point improvement in event losses. The segment reported a small prior-year adverse loss development of $0.9 million, or 60 basis points, compared to favorable reserve releases of $5.3 million or 4.2 loss ratio points in the same quarter last year. The acquisition cost ratio and the expense ratio improved 2.5% and 0.3%, respectively, on the back of higher earned premiums.

[Faramarz Romer, CFO at Greenlight Capital Re, Limited]

Overall, the Open Market segment had a strong performance for the quarter. Now let's turn to the Innovations segment. The Innovations segment grew net written premiums by 57.5% to $22.3 million during the quarter. The increase was mainly driven by Syndicate 3456 and Financial Lines, partially offset by the increase in seeded premiums under the innovation's whole-account retro program. Compared to the third quarter of last year. Net earned premiums decreased by $0.8 million, mainly driven by the increase in retroceded premiums compared to the same quarter last year. The combined ratio for Innovations segment was 96.7% during the third quarter, compared to 93.6% in Q3 last year. The combined ratio improved by 1 point to 87.1%. Favorable prior reserve development contributed 3.1 points to the combined ratio compared to unfavorable development of 0.4 points in the third quarter of 2024.

[Faramarz Romer, CFO at Greenlight Capital Re, Limited]

Compared to the same quarter last year, the expense ratio for the Innovations segment was 9.6%. Compared to 5.5%. Due to a combination of growth in personnel and an increase in non-payroll-related costs for this segment. We are investing in this business in preparation for higher future premiums. Leading to the higher expense ratio. We expect this to normalize as we scale this segment. While the Innovations segment produced an underwriting income of $0.7 million, the investment impairment that Greg mentioned led to an overall net loss of $11.3 million for the segment. Now I would like to make a couple of quick points on capital and debt management. During the first nine months of 2025, we have repurchased 512,000 shares for $7 million. Which has been accretive to our book value per share.

[Faramarz Romer, CFO at Greenlight Capital Re, Limited]

At the end of the third quarter of 2025, our fully diluted book value per share was $18.90, an increase of 5.3% year-to-date. During the quarter, we refinanced our term loan, replacing it with a five-year $50 million revolving line of credit. As of the end of the third quarter, we reduced our debt leverage ratio down to 5.3% from 9.5% at the beginning of the year. Subsequently, in October, we repaid an additional $15 million and currently have $20 million of debt outstanding. We have also entered into a letter of credit facility with Citibank exclusively for our Funds at Lloyd's business. In October, we issued an LLC for GBP 45 million to Lloyd's, and Lloyd's simultaneously released $60.7 million of cash, which we had previously provided for Funds at Lloyd's.

[Faramarz Romer, CFO at Greenlight Capital Re, Limited]

The new revolving line of credit and the new Funds at Lloyd's letter of credit facility provide us added flexibility to optimize our cash management while further strengthening our balance sheet and improving our return on equity. That concludes our prepared remarks. The operator will now open the line for your questions.

[Operator]

Thank you. We're now 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 move your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that star one is to be placed in the question queue. Our first question is coming from Ben Olesh from WA Capital. Your line is now live.

[Ben Olesh, Analyst at WA Capital]

Yes, hello. Thank you for taking my question. This is a question to David. Could you please provide an update on the macro part of the Solasglas fund? What is your view and your position regarding U.S. dollar, gold, and short-term interest? Thank you.

[David Einhorn, Chairman of the Board at Greenlight Capital Re, Limited]

Sure. Thanks for the question. We've maintained a core position in gold that now goes back pretty much to near the inception of the company, certainly since the IPO of the company. The gold is structured in two different components. One is physical gold, which we consider to just sort of be the core position that we occasionally trade around. Additionally, we buy binary digital options that are call options on rapid appreciation in gold. And those actually proved to be successful in the third quarter and also in our October result. From an interest rate perspective, our position is that we are long SOFR futures out into 2026, which is essentially a view that the Fed will reduce interest rates more than the market currently expects.

[David Einhorn, Chairman of the Board at Greenlight Capital Re, Limited]

And finally, we maintain inflation swaps, which are a view that reported inflation over the next two, five, and ten years will be larger than the amount that the market has priced in.

[Operator]

Thank you. Our next question today is coming from Daniel DeYoung, a private investor. Your line is now live.

[Operator]

Hi. Thanks for taking the question. 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 into the company since and seven 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?

[David Einhorn, Chairman of the Board at Greenlight Capital Re, Limited]

Yeah. Look, I think that the company and we expressed this at last year's investor presentation. I actually think that the company has made enough structural improvement that we should be earning a return on equity that is greater than our cost of equity. And I believe that. The shares should actually justifiably trade at or above book value as a result. It's been frustrating to us and everybody around that the shares continue to trade at a discount. But I don't believe that the solution is to liquidate the company. Were we to liquidate the company, there also would be substantial expenses that I could not quantify for you because we haven't done the exercise. But it would be unlikely that we would recognize the full book value in a liquidation were we to go through with that.

[David Einhorn, Chairman of the Board at Greenlight Capital Re, Limited]

Regarding my longevity, I'm presently 56 years old, and I expect to be doing this for a substantial additional amount of time.

[David Einhorn, Chairman of the Board at Greenlight Capital Re, Limited]

Great to hear. Thank you.

[David Einhorn, Chairman of the Board at Greenlight Capital Re, Limited]

Sure.

[Operator]

Thank you. We reached the end of our question-and-answer session, and that does conclude today's teleconference and webcast. You may just disconnect your lines at this time and have a wonderful day. We thank you for your participation today.

Participants

Executives

• Faramarz Romer, CFO
• Greg Richardson, CEO
• David Sigmon, General Counsel
• David Einhorn, Chairman of the Board

Analysts

• Ben Olesh, Analyst at WA Capital
• Analyst