Greenlight Re Announces Fourth Quarter and Year End 2013 Financial Results

Greenlight Capital Re Logo

GRAND CAYMAN, Cayman Islands, Feb. 18, 2014 (GLOBE NEWSWIRE) -- Greenlight Capital Re, Ltd. (Nasdaq:GLRE) today announced financial results for the fourth quarter and year ended December 31, 2013. Greenlight Re reported net income of $83.9 million for the fourth quarter 2013 compared to net loss of $60.6 million for the same period in 2012. Fully diluted net income per share was $2.22 compared to net loss per share of $1.65 for the same period in 2012.

Fully diluted adjusted book value per share was $27.91 as of December 31, 2013, a 26.8% increase from $22.01 per share as of December 31, 2012.

"We are pleased that we experienced positive results from both our underwriting and investing operations during the quarter," said Bart Hedges, Chief Executive Officer of Greenlight Re. "Our underwriting portfolio has performed profitably; while the overall reinsurance market has become increasingly competitive, we continue to find attractive opportunities."

Financial and operating highlights for Greenlight Re for the fourth quarter ended December 31, 2013 include:

  • Gross written premiums in the fourth quarter of 2013 were $124.8 million, compared to $124.0 million in the fourth quarter of 2012; net earned premiums were $141.5 million, an increase from $118.6 million reported in the prior-year period.
  • Underwriting income of $7.9 million was reported for the fourth quarter of 2013, compared to an underwriting loss of $5.8 million for the fourth quarter of 2012.
  • A net investment gain of 6.6% on Greenlight Re's investment portfolio managed by DME Advisors, LP was reported for the fourth quarter 2013 compared to a net investment loss of 4.4% in the fourth quarter of 2012.

"2013 was a solid year for Greenlight Re that showed the strength of our dual-engine strategy," stated David Einhorn, Chairman of the Board of Directors. "The results of both our underwriting and investment portfolio were good and created value for Greenlight Re shareholders."

Financial and operating highlights for Greenlight Re for the year ended December 31, 2013 include:

  • Gross written premiums in 2013 were $535.7 million, compared to $427.8 million in 2012; net earned premiums were $547.9 million, an increase from $466.7 million reported for the prior year.
  • Underwriting income of $37.5 million was reported for 2013, compared to an underwriting loss of $42.6 million for 2012.
  • The combined ratio for the year ended December 31, 2013 was 97.1% compared to 112.9% for the year ended December 31, 2012.
  • Net investment income was $218.1 million, representing a return of 19.6%, compared to net investment income of $78.9 million during 2012 when Greenlight Re reported a 7.1% 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, 2013 on Wednesday, February 19, 2014 at 9:00 a.m. Eastern time. The conference call title is Greenlight Capital Re, Ltd. Fourth Quarter and Year End 2013 Earnings Call.

To participate, please dial in to the conference call at:

U.S. toll free 1-888-317-6016
International 1-412-317-6016

The conference call can also be accessed via webcast at:

http://services.choruscall.com/links/glre140219.html

A telephone replay of the call will be available from 11:00 a.m. Eastern time on February 19, 2014 until 9:00 a.m. Eastern time on February 27, 2014. 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 10039988. 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 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. 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 reinsurance industry.

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, 2013 and 2012
(expressed in thousands of U.S. dollars, except per share and share amounts)
2013 2012
Assets
Investments
Debt instruments, trading, at fair value $ 4,312 $ 1,763
Equity securities, trading, at fair value 1,282,156 1,042,715
Other investments, at fair value 107,211 133,450
Total investments 1,393,679 1,177,928
Cash and cash equivalents 3,722 21,890
Restricted cash and cash equivalents 1,334,074 1,206,837
Financial contracts receivable, at fair value 104,048 22,744
Reinsurance balances receivable 167,340 173,221
Loss and loss adjustment expenses recoverable 16,829 34,451
Deferred acquisition costs, net 51,797 59,177
Unearned premiums ceded 3,173 3,616
Notes receivable 16,049 19,330
Other assets 4,565 3,559
Total assets $ 3,095,276 $ 2,722,753
Liabilities and equity
Liabilities
Securities sold, not yet purchased, at fair value $ 1,111,690 $ 908,368
Financial contracts payable, at fair value 18,857 19,637
Due to prime brokers 314,702 326,488
Loss and loss adjustment expense reserves 329,894 356,470
Unearned premium reserves 173,057 188,185
Reinsurance balances payable 38,789 35,292
Funds withheld 10,126 17,415
Other liabilities 11,857 10,488
Total liabilities 2,008,972 1,862,343
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, 30,791,865 (2012: 30,447,179): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,949 (2012: 6,254,949)) 3,705 3,670
Additional paid-in capital 496,622 492,469
Retained earnings 551,268 325,569
Shareholders' equity attributable to shareholders 1,051,595 821,708
Non-controlling interest in joint venture 34,709 38,702
Total equity 1,086,304 860,410
Total liabilities and equity $ 3,095,276 $ 2,722,753
GREENLIGHT CAPITAL RE, LTD.
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 2013, 2012 and 2011
(expressed in thousands of U.S. dollars, except per share and share amounts)
Year ended December 31
2013 2012 2011
Revenues
Gross premiums written $ 535,702 $ 427,844 $ 397,659
Gross premiums ceded (2,780) 24,275 (46,920)
Net premiums written 532,922 452,119 350,739
Change in net unearned premium reserves 14,977 14,595 29,036
Net premiums earned 547,899 466,714 379,775
Net investment income 218,140 78,941 23,118
Other income (expense), net (950) (259) 253
Total revenues 765,089 545,396 403,146
Expenses
Loss and loss adjustment expenses incurred, net 338,493 366,601 241,690
Acquisition costs, net 171,872 142,721 138,751
General and administrative expenses 21,718 17,539 13,892
Total expenses 532,083 526,861 394,333
Income before income tax expense 233,006 18,535 8,813
Income tax expense (538) (86) (247)
Net income including non-controlling interest 232,468 18,449 8,566
Income attributable to non-controlling interest in joint venture (6,769) (3,851) (1,797)
Net income $ 225,699 $ 14,598 $ 6,769
Earnings per share
Basic $ 6.13 $ 0.40 $ 0.19
Diluted $ 6.01 $ 0.39 $ 0.18
Weighted average number of ordinary shares used in the determination of earnings per share
Basic 36,838,128 36,702,128 36,548,466
Diluted 37,585,167 37,361,338 37,286,454

The following table provides the ratios for the years ended December 31, 2013, 2012 and 2011:

Year ended December 31 Year ended December 31 Year ended December 31
2013 2012 2011
Frequency Severity Total Frequency Severity Total Frequency Severity Total
Loss ratio 65.5% (48.1)% 61.8% 77.4% 101.2% 78.5% 65.7% 25.4% 63.6%
Acquisition cost ratio 31.7% 20.8% 31.4% 31.4% 14.0% 30.6% 37.4% 20.9% 36.5%
Composite ratio 97.2% (27.3)% 93.2% 108.8% 115.2% 109.1% 103.1% 46.3% 100.1%
Internal expense ratio 3.2% 2.8% 2.8%
Corporate expense ratio 0.7% 1.0% 0.9%
Combined ratio 97.1% 112.9% 103.8%

CONTACT: Garrett Edson ICR (203) 682-8331 IR@greenlightre.ky Media: Brian Ruby ICR (203) 682-8268 Brian.ruby@icrinc.com

Source:Greenlight Capital Re