Greenlight Re Announces Third Quarter 2011 Financial Results

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| Source: Greenlight Capital Re

GRAND CAYMAN, Cayman Islands, Oct. 31, 2011 (GLOBE NEWSWIRE) -- Greenlight Capital Re, Ltd. (Nasdaq:GLRE) today announced financial results for the third quarter of 2011. Greenlight Re reported a net loss of $4.5 million for the third quarter of 2011 compared to a net profit of $29.0 million for the same period in 2010. The net loss per share was $0.12 for the third quarter of 2011, compared to net income per share of $0.78 on a fully diluted basis for the comparable period last year.

Fully diluted adjusted book value per share was $19.74 as of September 30, 2011, a 0.7% decrease from $19.87 per share as of September 30, 2010.

For the nine months ended September 30, 2011, Greenlight Re reported a net loss of $63.4 million compared to net income of $34.3 million for the same period in 2010. The net loss per share was $1.75 for the nine months ended September 30, 2011, compared to net income per share of $0.92 on a fully diluted basis for the comparable period last year.

"We are pleased with the composition of our existing reinsurance portfolio, despite a nominal loss in the quarter and we continue to execute our strategy to develop long term reinsurance relationships," said Bart Hedges, Chief Executive Officer of Greenlight Re. "During the third quarter, we started to see signs of improving market conditions and we are encouraged that a more rational environment will develop in the foreseeable future."

David Einhorn, Chairman of the Board of Directors stated: "The Company's defensively positioned investment portfolio insulated us from loss during the quarter's persistent challenging market conditions. In the third quarter, our investment portfolio generated a small gain. We have carefully built the Greenlight Re platform over the last five years, and our rating upgrade by A.M. Best to 'A' (Excellent) will help us to continue executing our strategy over the long term."

Financial and operating highlights for Greenlight Re for the third quarter ended September 30, 2011 include:

  • Gross written premiums in the third quarter of 2011 were $93.2 million compared to $151.2 million in the third quarter of 2010, while net earned premiums were $90.3 million, an increase from $79.4 million reported in the third quarter of last year. 
  • The combined ratio for the nine months ended September 30, 2011 was 103.3% compared to 101.4% for the nine months ended September 30, 2010.
  • Net investment income of $1.1 million was reported for the third quarter of 2011, representing a gain of 0.1% to our investment portfolio. This compares to investment income of $33.9 million in the third quarter of 2010, when we reported a 3.6% gain on our investment portfolio. For the first nine months of 2011, the net investment loss was $54.6 million compared to net investment income of $39.7 million during the comparable period in 2010.

Conference Call Details

Greenlight Re will hold a live conference call to discuss its financial results for the third quarter of 2011 on Tuesday November 1, 2011 at 9:00 a.m. Eastern time.  The conference call title is Greenlight Capital Re, Ltd. Third Quarter 2011 Earnings Call.

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

U.S. toll free  1-877-317-6789
International 1-412-317-6789

The conference call can also be accessed via webcast at:

https://services.choruscall.com/links/glre111101.html

A telephone replay of the call will be available from 11:00 a.m. Eastern time on November 1, 2011 until 9:00 a.m. Eastern time on November 16, 2011.  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 10002298. 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 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 specialist property and casualty reinsurance company based in the Cayman Islands and Ireland.  The Company 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.

The Greenlight Capital Re logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5571

GREENLIGHT CAPITAL RE, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
     
September 30, 2011 and December 31, 2010
(expressed in thousands of U.S. dollars, except per share and share amounts)
     
  September 30, 2011(unaudited) December 31, 2010(audited)
Assets    
Investments  
Debt instruments, trading, at fair value $ 2,926 $ 15,610
Equity securities, trading, at fair value 794,088 839,921
Other investments, at fair value 218,594 196,490
Total investments 1,015,608 1,052,021
Cash and cash equivalents 32,669 45,540
Restricted cash and cash equivalents 940,757 977,293
Financial contracts receivable, at fair value 16,015 28,701
Reinsurance balances receivable 131,419 109,567
Loss and loss adjustment expenses recoverable 21,683 11,976
Deferred acquisition costs, net 79,859 87,389
Unearned premiums ceded 19,954 7,424
Notes receivable 17,664 14,205
Other assets 3,602 3,886
Total assets $ 2,279,230 $ 2,338,002
Liabilities and shareholders' equity      
Liabilities      
Securities sold, not yet purchased, at fair value $ 652,012 $ 726,737
Financial contracts payable, at fair value 7,593 22,746
Due to prime brokers 319,318 273,071
Loss and loss adjustment expense reserves 241,100 186,467
Unearned premium reserves 222,049 234,983
Reinsurance balances payable 35,731 20,164
Funds withheld 24,765 22,887
Other liabilities 10,704 11,786
Total liabilities 1,513,272 1,498,841
Shareholders' 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, 30,254,087 (2010: 30,200,835): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,949 (2010: 6,254,949)) 3,651 3,646
Additional paid-in capital 487,671 485,555
Non-controlling interest in joint venture 33,866 45,758
Retained earnings 240,770 304,202
Total shareholders' equity 765,958 839,161
Total liabilities and shareholders' equity $ 2,279,230 $ 2,338,002
GREENLIGHT CAPITAL RE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
         
For the three and nine months ended September 30, 2011 and 2010
(expressed in thousands of U.S. dollars, except per share and share amounts)
         
   Three months
ended September 30,
Nine months
ended September 30,
   2011 2010 2011 2010
Revenues          
Gross premiums written $ 93,156 $ 151,247 $ 307,160 $ 307,091
Gross premiums ceded (9,308) (3,639) (29,967) (8,228)
Net premiums written 83,848 147,608 277,193 298,863
Change in net unearned premium reserves 6,500 (68,207) 25,462 (114,745)
Net premiums earned 90,348 79,401 302,655 184,118
Net investment income (loss) 1,070 33,881 (54,574) 39,682
Other income (expense), net 184 (474) (163) (1,002)
Total revenues 91,602 112,808 247,918 222,798
Expenses            
Loss and loss adjustment expenses incurred, net 62,399 50,257 184,994 114,936
Acquisition costs, net 31,847 28,807 116,792 60,183
General and administrative expenses 1,532 3,392 10,867 11,633
Total expenses 95,778 82,456 312,653 186,752
Net income (loss) before non-controlling interest and income tax expense (4,176) 30,352 (64,735) 36,046
Non-controlling interest in (income) loss of joint venture (156) (1,313) 1,492 (1,687)
Net income (loss) before income tax expense (4,332) 29,039 (63,243) 34,359
Income tax benefit (expense) (148) (25) (189) (84)
Net income (loss) $ (4,480) $ 29,014 $ (63,432) $ 34,275
Earnings (loss) per share            
Basic $ (0.12) $ 0.80 $ (1.75) $ 0.94
Diluted $ (0.12) $ 0.78 $ (1.75) $ 0.92
Weighted average number of ordinary shares used in the determination of earnings (loss) per share            
Basic 36,153,743 36,452,224 36,153,743 36,408,859
Diluted 36,153,743 37,218,906 36,153,743 37,174,558

The following table provides the ratios for the nine months ended September 30, 2011 and 2010:

  Nine months ended
September 30, 2011
Nine months ended
September 30, 2010
   Frequency Severity Total Frequency Severity Total
Loss ratio 62.2% 39.0% 61.1% 68.7% 18.5% 62.4%
Acquisition cost ratio 39.6% 18.5% 38.6% 35.6% 12.3% 32.7%
Composite ratio 101.8% 57.5% 99.7% 104.3% 30.8% 95.1%
Internal expense ratio       3.6%       6.3%
Combined ratio       103.3%       101.4%
Alex Stanton
Stanton Public Relations & Marketing
(212) 780-0701