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Greenlight Re Announces Fourth Quarter and Year End 2015 Financial Results

GRAND CAYMAN, Cayman Islands, Feb. 22, 2016 (GLOBE NEWSWIRE) -- Greenlight Capital Re, Ltd. (NASDAQ:GLRE) today announced financial results for the fourth quarter and year ended December 31, 2015. Greenlight Re reported a net loss of $43.1 million for the fourth quarter of 2015, compared to net income of $60.7 million for the same period in 2014. The net loss per share for the fourth quarter of 2015 was $1.17, compared to fully diluted net income per share of $1.60 for the same period in 2014.

Fully diluted adjusted book value per share was $22.17 as of December 31, 2015, a 27.9% decrease from $30.76 per share as of December 31, 2014.

"We are pleased with our fourth quarter underwriting results and our ability to grow our underwriting portfolio during 2015, with our premiums up 55% from the prior year," said Bart Hedges, Chief Executive Officer of Greenlight Re. "While reserving actions taken earlier in the year on certain legacy contracts negatively impacted our full year 2015 fiscal results, we are encouraged by our current underwriting portfolio and the strong and growing client relationships we continue to develop."

Financial and operating highlights for Greenlight Re for the fourth quarter ended December 31, 2015 include:

  • Gross written premiums of $144.9 million, compared to $74.3 million in the fourth quarter of 2014; net earned premiums were $119.9 million, an increase from $75.2 million reported in the prior-year period.

  • Underwriting income of $6.8 million, compared to an underwriting loss of $4.6 million in the fourth quarter of 2014.

  • The combined ratio for the fourth quarter 2015 was 98.5% compared to 115.0% for the fourth quarter 2014.

  • A net investment loss of 4.0% on Greenlight Re's investment portfolio managed by DME Advisors, LP compared to a net investment gain of 5.3% in the fourth quarter of 2014.

"Our 2015 investment results were negatively impacted by losses on three of our largest holdings and the lack of other positive contributors," stated David Einhorn, Chairman of the Board of Directors. "It was a challenging investment environment for value investors. We continue to believe the Company is well positioned to grow book value per share from both underwriting and investment activities over the long term."

Financial and operating highlights for Greenlight Re for the year ended December 31, 2015 include:

  • Gross written premiums in 2015 of $502.1 million, compared to $324.0 million in 2014; net earned premiums were $408.4 million, an increase over $354.2 million reported for the prior year.
  • An underwriting loss of $24.9 million, compared to underwriting income of $11.6 million for 2014.
  • The combined ratio for the year ended December 31, 2015 was 111.8% compared to 103.6% for the year ended December 31, 2014.
  • A net investment loss of $281.9 million, representing a negative return of 20.2%, compared to net investment income of $122.6 million during 2014 when Greenlight Re reported an 8.7% 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, 2015 on Tuesday, February 23, 2016 at 9:00 a.m. Eastern time. The conference call title is Greenlight Capital Re, Ltd. Fourth Quarter and Year End 2015 Earnings Call.

To participate in the Greenlight Capital Re, Ltd. Fourth Quarter and Year End 2015 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/10079517

The conference call can also be accessed via webcast at:

http://services.choruscall.com/links/glre160223

A telephone replay of the call will be available from 11:00 a.m. Eastern time on February 23, 2016 until 9:00 a.m. Eastern time on March 1, 2016. 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 10079517. 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, 2015 and 2014
(expressed in thousands of U.S. dollars, except per share and share amounts)
2015 2014
Assets
Investments
Debt instruments, trading, at fair value$39,087 $49,212
Equity securities, trading, at fair value905,994 1,266,175
Other investments, at fair value119,083 115,591
Total investments1,064,164 1,430,978
Cash and cash equivalents112,162 12,030
Restricted cash and cash equivalents1,236,589 1,296,914
Financial contracts receivable, at fair value13,215 47,171
Reinsurance balances receivable187,940 151,185
Loss and loss adjustment expenses recoverable3,368 11,523
Deferred acquisition costs, net59,823 34,420
Unearned premiums ceded3,251 4,027
Notes receivable25,146 1,566
Other assets6,864 5,478
Total assets$2,712,522 $2,995,292
Liabilities and equity
Liabilities
Securities sold, not yet purchased, at fair value$882,906 $1,090,731
Financial contracts payable, at fair value28,245 44,592
Due to prime brokers396,453 211,070
Loss and loss adjustment expense reserves305,997 264,243
Unearned premium reserves211,954 128,736
Reinsurance balances payable18,326 40,372
Funds withheld7,143 6,558
Other liabilities12,725 14,949
Performance compensation payable to related party
Total liabilities1,863,749 1,801,251
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, 30,772,572 (2014: 31,129,648):
Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,895 (2014: 6,254,895))
3,703 3,738
Additional paid-in capital496,401 500,553
Retained earnings325,287 660,860
Shareholders’ equity attributable to shareholders825,391 1,165,151
Non-controlling interest in joint venture23,382 28,890
Total equity848,773 1,194,041
Total liabilities and equity$2,712,522 $2,995,292



GREENLIGHT CAPITAL RE, LTD.
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 2015, 2014 and 2013
(expressed in thousands of U.S. dollars, except per share and share amounts)
2015 2014 2013
Revenues
Gross premiums written$502,124 $324,023 $535,702
Gross premiums ceded(9,001) (13,493) (2,780)
Net premiums written493,123 310,530 532,922
Change in net unearned premium reserves(84,736) 43,710 14,977
Net premiums earned408,387 354,240 547,899
Net investment income (loss)(281,924) 122,575 218,140
Other income (expense), net(3,413) 2,987 (1,710)
Total revenues123,050 479,802 764,329
Expenses
Loss and loss adjustment expenses incurred, net317,097 234,986 338,493
Acquisition costs, net116,207 107,665 171,872
General and administrative expenses23,434 24,500 20,958
Total expenses456,738 367,151 531,323
Income (loss) before income tax expense(333,688) 112,651 233,006
Income tax (expense) benefit1,755 624 (538)
Net income (loss) including non-controlling interest(331,933) 113,275 232,468
Loss (income) attributable to non-controlling interest in joint venture5,508 (3,683) (6,769)
Net income (loss)$(326,425) $109,592 $225,699
Earnings (loss) per share
Basic$(8.90) $2.94 $6.13
Diluted$(8.90) $2.89 $6.01
Weighted average number of ordinary shares used in the determination of earnings and loss per share
Basic36,670,466 37,242,687 36,838,128
Diluted36,670,466 37,874,387 37,585,167


The following table provides the ratios for the years ended December 31, 2015, 2014 and 2013:

Year ended December 31
2015 2014 2013
Frequency Severity Total Frequency Severity Total Frequency Severity Total
Loss ratio82.6% 9.5% 77.6% 69.9% 16.1% 66.3% 65.5% (48.1)% 61.8%
Acquisition cost ratio28.0% 35.2% 28.5% 31.2% 19.7% 30.4% 31.7% 20.8% 31.4%
Composite ratio110.6% 44.7% 106.1% 101.1% 35.8% 96.7% 97.2% (27.3)% 93.2%
Internal expense ratio 4.5% 6.0% 3.2%
Corporate expense ratio 1.2% 0.9% 0.6%
Combined ratio 111.8% 103.6% 97.0%



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