Greenlight Capital Re Q3 Earnings Call Highlights

Key Points

• Greenlight Re reported $3.2 million in Q3 net income, or $0.10 per diluted share, as $14.6 million of underwriting income and a 90.5% combined ratio were partly offset by a 3.3% loss in the Solasglas investment portfolio.
• Business performance was mixed: Open Market premiums declined amid softer conditions, while Innovations gross written premiums grew 46% to $43 million. The company also reduced Middle East conflict case reserves by $6 million but recorded adverse prior-year reserve development.
• Greenlight Re is pursuing growth through its new Hippo partnership and Lloyd’s syndicate expansion, while continuing aggressive share repurchases. The company bought back 725,000 shares for $11.3 million during the quarter and October, bringing 2026 repurchases to 5.4% of shares outstanding.

Greenlight Capital Re NASDAQ: GLRE reported third-quarter net income of $3.2 million, or $0.10 per diluted share, as strong underwriting results were partly offset by investment losses in its Solasglas portfolio.

Year-to-date net income reached $9.4 million, or $0.28 per diluted share. Fully diluted book value per share increased 0.8% during the quarter to $20.78 and was up 1.7% for the first nine months of 2026.

“The third quarter of 2026 was mixed, with a strong underwriting result offset by investment losses,” Chief Executive Officer Greg Richardson said during the company’s earnings call.

Underwriting Income and Reserve Developments

Greenlight Re generated $14.6 million in underwriting income during the quarter, producing a combined ratio of 90.5%. Richardson said the result reflected the underlying profitability of the company’s book as well as a benign catastrophe-loss quarter.

The Open Market business recorded an 87.9% combined ratio, while the Innovations segment produced a 98.2% combined ratio.

The company reduced case reserves related to the Middle East conflict by $6 million during the quarter after receiving additional information about specific losses. Greenlight Re had previously disclosed a $25 million provision connected to the conflict. The company said it maintained incurred-but-not-reported reserves because of continuing uncertainty in the region and reported no new large losses during the quarter.

Chief Financial Officer Faramarz Romer said prior-year adverse reserve development totaled 1.6 points in the quarter, compared with 0.5 points in the prior-year period. Much of the reserve strengthening was tied to a handful of contracts in the Innovations business.

Open Market Premiums Decline as Innovations Expands

Open Market gross written premium fell 10.4% from the prior-year quarter as the company responded to softening market conditions, according to Richardson. Overall gross written premium declined just 1.4%, however, as the company expanded its use of outward reinsurance and third-party capital. Net written premium fell 12.3%.

Within Open Market, net written premiums declined 19% to $114.2 million, while net earned premiums fell 13%. Romer said the decline in earned premiums reflected lower premium estimates on specialty and property proportional contracts as well as reduced exposure from a non-renewed casualty book.

The Open Market segment reported pretax income of $19.5 million, including $15.2 million of underwriting income and $4.3 million of investment income. Its combined ratio rose from 84.5% a year earlier, driven in part by higher acquisition costs associated with variable commission true-ups and higher personnel costs on a lower earned-premium base.

In contrast, Innovations gross written premiums rose 46% to $43 million, supported by new business and exposure growth among existing multiline and financial-lines treaties. Net earned premiums rose 34% to $28.1 million.

The Innovations segment posted pretax income of $5.8 million, consisting of $500,000 of underwriting income and $6 million of investment income, partly offset by $600,000 of other expenses. Its combined ratio increased from 96.8% a year earlier, largely because of 7.6 points of adverse prior-year reserve development, compared with favorable development in the prior-year period.

Romer said the Innovations expense ratio improved by 2 points as premium growth outpaced expense growth. He also said the company expects expenses to decline as a proportion of premiums as the segment gains scale.

Investment Portfolio Posts Quarterly Loss

The Solasglas Fund returned negative 3.3% during the third quarter. Chairman David Einhorn said the long portfolio detracted 7.6%, while the short portfolio contributed 7.3% and macro positions detracted 2.8%.

Although the S&P 500 advanced 2.3% during the quarter, Einhorn said Greenlight Re’s long and short positions “behaved as if they were in a bear market,” with many positions declining between 10% and 25% without company-specific catalysts.

The largest positive contributors included short positions in AI-adjacent companies and homebuilder stocks, along with the company’s long position in DHT Holdings, which benefited from higher tanker charter rates. The largest detractors included the company’s macro position in short-term U.S. interest rates and long positions in Green Brick Partners and Brighthouse Financial.

Einhorn said the company reduced its SOFR futures exposure to manage risk after the position generated losses year to date. The remaining position extends through next summer and reflects the view that markets are pricing in more Federal Reserve rate increases than are likely to occur.

Net exposure ended the third quarter at 32%, compared with 33% at the end of the second quarter. Solasglas returned 2.3% in October, bringing its 2026 year-to-date return to flat, while net exposure was approximately 28% at the end of October.

Other investment income offset the Solasglas loss by $10.5 million during the quarter. That figure included $4.1 million of realized gains from the partial sale of two Innovations investments. Richardson said the company expects to recycle capital from such monetizations into new investment opportunities.

Hippo Partnership and Share Repurchases

Greenlight Re recently announced a strategic partnership with Hippo Holdings. Under the arrangement, Hippo may co-invest alongside Greenlight Re’s Innovations unit in early-stage managing general agent investments. Hippo’s Spinnaker Insurance Company will also serve as Greenlight Re’s preferred U.S. admitted fronting carrier for qualifying co-invested programs.

Management said the arrangement builds on the companies’ existing relationship and is intended to support disciplined growth in Innovations. The company also cited Lloyd’s approval to transition Syndicate 3456 to a full syndicate as an initiative expected to advance the segment’s growth objectives.

Greenlight Re repurchased 505,000 shares for $8 million in the third quarter and an additional 220,000 shares for $3.3 million in October. Since the start of 2026, the company has repurchased 5.4% of its outstanding shares for $30.5 million. It had $24.8 million remaining under its board-approved repurchase authorization at quarter-end.

Romer said the company has an agreement to repurchase from Einhorn 33% of the shares it buys in the open market, helping maintain Einhorn’s ownership percentage below applicable thresholds. Einhorn said the alternative would be for the company to be unable to repurchase stock.

Looking ahead to Jan. 1 renewals, Richardson said the reinsurance market continues to soften but that rates and terms remain attractive in the Open Market business. He said the company expects to find profitable new opportunities through next year, while Innovations continues to grow at stable rates.

About Greenlight Capital Re (NASDAQ:GLRE)

Greenlight Capital Re, Ltd. is a Bermuda-based specialty property and casualty reinsurance company that provides customized reinsurance solutions to insurance and reinsurance companies. Its offerings are designed to help clients manage and transfer risks across a range of property and casualty insurance lines.

The company conducts business primarily through its Bermuda operations and has served clients in international insurance markets. Greenlight Re has historically combined specialty underwriting with an investment approach associated with its Greenlight Capital affiliation, seeking to generate returns from both its insurance portfolio and investment activities.

Founded in 2004, Greenlight Re has focused on flexible, relationship-driven underwriting rather than offering standardized insurance products directly to consumers.

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