In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Greenlight Capital Re Ltd (NASDAQ:GLRE) reported a net income of $29.6 million in Q1 2025, marking an increase in fully diluted book value per share by 5.1%.
-
The Solace class portfolio delivered a strong investment performance with a 7.2% return during a volatile market downturn.
-
The innovations segment reported a combined ratio of 94.3%, showing improvement and aligning with expectations.
-
The company released $11 million of specialty and $8 million of property reserves, contributing positively to the financial results.
-
The Solace fund's positive contributors included long investments in gold, Brighthouse Financial, and Lanxis, with gold appreciating 19% over the quarter.
Negative Points
-
Greenlight Capital Re Ltd (NASDAQ:GLRE) recorded an underwriting loss of $7.8 million, resulting in a combined ratio of 104.6%.
-
The California wildfires led to a net wildfire loss of $23.6 million, adding 14 combined ratio points.
-
The company strengthened its historical casualty reserves by $22 million, impacting financial results negatively.
-
The open market segment suffered a pre-tax loss of $3.2 million, mainly due to the California wildfires.
-
The innovation segment's expense ratio increased to 8.2% from 4.3% due to growth in personnel and indirect costs, impacting profitability.
Q & A Highlights
Q: Can you provide more details on the impact of the California wildfires on your underwriting results? A: Greg Richardson, CEO: The California wildfires resulted in a net loss of $23.6 million, contributing 14 points to our combined ratio. This was based on an industry loss estimate of $50 billion. Despite this, we do not anticipate tariffs will significantly impact our underwriting profitability in the near term.
Q: How did the Solace Class portfolio perform during the quarter? A: David Einhorn (Trades, Portfolio), Chairman: The Solace Class portfolio returned 7.2% in Q1, with significant contributions from our short and macro portfolios. The largest positive contributors were investments in gold, Brighthouse Financial, and Lanxess.
Q: What changes are being made to the casualty business approach? A: Greg Richardson, CEO: We are shifting our focus to accessing casualty MGA business primarily through our innovations channel. This change allows us better access to underlying data and more control over the business. In the short term, this will lead to some contraction of our casualty book.