Greenlight Capital Re’s Earnings Call: A Balanced Outlook

Greenlight Capital Re ((GLRE)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call of Greenlight Capital Re painted a nuanced picture, reflecting both achievements and hurdles. The company reported growth in its Innovations segment and an increase in book value, but these positives were tempered by significant underwriting and investment losses, as well as exposure to catastrophic events. The overall sentiment conveyed was neutral, recognizing both progress and the necessity for caution in certain areas.

Increase in Fully Diluted Book Value

Greenlight Capital Re reported a net income of $42.8 million for the year, resulting in a 7.2% increase in fully diluted book value per share, bringing it to $17.95. This growth is a positive indicator of the company’s financial health and shareholder value.

Innovations Segment Performance

The Innovations segment demonstrated strong performance, achieving a combined ratio of 95.8% on $94.7 million of gross written premium. This segment is crucial to Greenlight Capital Re’s growth strategy, highlighting its importance in the company’s overall business model.

One-One Renewal Growth

The company experienced growth during the one-one 2025 renewal season, with expectations for the Lloyd’s FAL book to grow by approximately 25% and the property portfolio by 10% over 2024. This growth is indicative of the company’s strategic positioning and market confidence.

Positive Contributions from Investments

Investments in Peloton Interactive and Kyndra Holdings significantly contributed to the company’s performance, with Peloton advancing 86% and Kyndra Holdings 51% during the quarter. These investments underscore the company’s ability to capitalize on market opportunities.

Significant Underwriting and Investment Losses

In Q4 2024, Greenlight Capital Re faced a net underwriting loss of $18 million and an investment loss from Solace Glass of $8.8 million, culminating in a net loss of $27.4 million for the quarter. These losses highlight the challenges faced by the company in the current economic climate.

Impact of Catastrophic Events

Catastrophic events, including Hurricane Milton and the Russia-Ukraine conflict, led to substantial losses for Greenlight Capital Re. The company reported $17.6 million in catastrophe losses and a $15 million increase in conflict reserves, emphasizing the unpredictable nature of such events.

Los Angeles Wildfire Losses

The Los Angeles wildfires are projected to result in a $15 million to $30 million loss for Greenlight Capital Re, further illustrating the company’s exposure to catastrophic events and the associated financial risks.

Underperformance of Solus Glass Fund

The Solus Glass Fund underperformed in Q4, reporting a negative 1.9% return compared to a 2.4% increase in the S&P 500. This underperformance reflects the challenges faced by the fund in a competitive market environment.

Forward-Looking Guidance

Looking ahead, Greenlight Capital Re provided guidance for the fourth quarter and full year 2024. Despite the challenges, the company achieved a net income of $42.8 million for the year, with a combined ratio of 101.4% and a 7.2% increase in fully diluted book value per share. For 2025, the company anticipates growth in its Lloyd’s FAL book by 25% and a 10% increase in its property portfolio, despite a projected rate decrease. The company remains optimistic about future opportunities, although it expects potential losses from the Los Angeles wildfires.

In conclusion, Greenlight Capital Re’s earnings call highlighted a balanced view of progress and challenges. While the company achieved growth in certain areas, it also faced significant losses due to underwriting, investments, and catastrophic events. The forward-looking guidance suggests optimism for future growth, despite potential risks. Investors and stakeholders will be keenly observing how the company navigates these challenges and capitalizes on opportunities in the coming year.