GRAND CAYMAN, Cayman Islands, Nov. 4, 2008 (GLOBE NEWSWIRE) -- Greenlight Capital Re, Ltd. (Nasdaq:GLRE) today announced financial results for the third quarter of 2008. Greenlight Re reported a net loss of $118.4 million for the third quarter of 2008 compared to a net loss of $2.1 million for the same period in 2007. The net loss per share was $3.29 for the third quarter of 2008, compared to a net loss per share of $0.06 for the same period in 2007.
Fully diluted book value per share was $14.22 as of September 30, 2008, a 9.9% decrease from $15.78 per share as of September 30, 2007.
For the nine months ended September 30, 2008, the net loss was $89.6 million compared to net income of $6.1 million for the same period in 2007. The net loss per share was $2.49 for the nine months ended September 30, 2008, compared to net earnings per share of $0.21, on a fully diluted basis, for the same period in 2007.
"In a difficult operating environment, our underwriting portfolio performed well while our investment results were disappointing," said David Einhorn, Chairman of the Board of Directors of Greenlight Re. "Despite our recent performance, our business model positions us well to take advantage of the dislocations arising in the reinsurance markets."
Greenlight Re's financial and operating highlights for the first nine months of 2008 include the following:
* Gross written premiums in the third quarter were $37.7 million
compared to $19.8 million in the third quarter of 2007, while
net earned premiums were $28.6 million compared to $30.7
million. For the first nine months, gross premiums written were
$133.8 million compared to $123.3 million for the first nine
months of 2007, while net earned premiums were $80.8 million
compared to $76.6 million.
* The combined ratio for the nine months ended September 30, 2008
was 97.5% compared to 93.1% for the nine months ended September
30, 2007.
* Net investment loss reported in the third quarter was $117.8
million, a loss of 15.9% on our investment portfolio, compared
to a net investment loss of $4.8 million in the third quarter of
2007, a 0.8% loss on our investment portfolio. For the first
nine months of 2008, the net investment loss was $92.5 million
compared to net investment income of $0.7 million in the nine
months ended September 30, 2007.
"With no losses from Hurricanes Gustav or Ike, our frequency oriented underwriting portfolio continues to perform well," said Len Goldberg, Chief Executive Officer of Greenlight Re. "Our strategy to manage our underwriting exposure in soft markets has resulted in a conservative premium to capital ratio. We believe recent industry events will trigger capacity shortfalls that will result in higher prices. Greenlight Re is uniquely positioned to take advantage of these events."
Conference Call Details
Greenlight Re will hold a live conference call to discuss its financial results for the third quarter of 2008 on Wednesday, November 5, 2008 at 9:00 a.m. Eastern time. To participate, please dial in to the conference call at (877) 362-3812 (domestic) or (706) 634-9925 (international), access code 69926046. The conference call topic is Greenlight Re Earnings Conference Call.
A telephone replay of the call will be available from 11:00 a.m. Eastern time on November 5, 2008 until 11:59 p.m. Eastern time on November 12, 2008. The replay of the call may be accessed by dialing (800) 642-1687 (domestic) or (706) 645-9291 (international), access code 69926046. An audio file of the call will also be available on the Company's website.
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 specialty property and casualty reinsurance company based in the Cayman Islands. 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, 2008 and December 31, 2007
(Expressed in thousands of U.S. dollars, except per share
and share amounts)
---------------------------------------------------------
Sept. 30,
2008 Dec. 31,
(Unaudited) 2007
---------- ----------
Assets
Investments in securities
Debt securities, trading, at fair value $ 8,458 $ 1,520
Equity investments, trading, at fair value 368,864 570,440
Other investments, at fair value 12,165 18,576
---------- ----------
Total investments in securities 389,487 590,536
Cash and cash equivalents 216,137 64,192
Restricted cash and cash equivalents 400,360 371,607
Financial contracts receivable, at fair
value 6,323 222
Reinsurance balances receivable 66,006 43,856
Loss and loss adjustment expense
recoverables 9,480 6,721
Deferred acquisition costs 17,804 7,302
Unearned premiums ceded 10,147 8,744
Other assets 956 965
---------- ----------
Total assets $1,116,700 $1,094,145
========== ==========
Liabilities and Shareholders' Equity
Liabilities
Securities sold, not yet purchased, at fair
value $ 369,504 $ 332,706
Financial contracts payable, at fair value 10,272 17,746
Loss and loss adjustment expense reserves 68,504 42,377
Unearned premium reserves 99,988 59,298
Reinsurance balances payable 34,035 19,140
Funds withheld 4,720 7,542
Other liabilities 5,099 2,869
Minority interest in joint venture 6,319 --
Performance compensation payable to related
party -- 6,885
---------- ----------
Total liabilities 598,441 488,563
---------- ----------
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 30,010,636, (2007:
29,847,787); Class B: par value $0.10;
authorized, 25,000,000; issued and
outstanding, 6,254,949 (2007: 6,254,949)) 3,627 3,610
Additional paid-in capital 479,166 476,861
Retained earnings 35,466 125,111
---------- ----------
Total shareholders' equity 518,259 605,582
---------- ----------
Total liabilities and shareholders' equity $1,116,700 $1,094,145
========== ==========
GREENLIGHT CAPITAL RE, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the three and nine months ended September 30, 2008 and 2007
(Expressed in thousands of U.S. dollars, except per share and
share amounts)
----------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
Revenues
Gross premiums
written $ 37,683 $ 19,766 $ 133,810 $ 123,275
Gross premiums
ceded 1,170 (209) (13,718) (28,486)
----------- ----------- ----------- -----------
Net premiums
written 38,853 19,557 120,092 94,789
Change in net
unearned premium
reserves (10,256) 11,155 (39,321) (18,184)
----------- ----------- ----------- -----------
Net premiums
earned 28,597 30,712 80,771 76,605
Net investment
(loss) income (117,809) (4,776) (92,546) 707
----------- ----------- ----------- -----------
Total revenues (89,212) 25,936 (11,775) 77,312
----------- ----------- ----------- -----------
Expenses
Loss and loss
adjustment
expenses
incurred, net 14,777 11,339 36,238 31,465
Acquisition
costs, net 12,204 13,458 31,361 30,685
General and
administrative
expenses 3,452 3,232 11,122 9,078
----------- ----------- ----------- -----------
Total expenses 30,433 28,029 78,721 71,228
----------- ----------- ----------- -----------
Net (loss) income
before minority
interest (119,645) (2,093) (90,496) 6,084
Minority interest
in loss of joint
venture 1,212 -- 851 --
----------- ----------- ----------- -----------
Net (loss) income $ (118,433) $ (2,093) $ (89,645) $ 6,084
=========== =========== =========== ===========
(Loss) earnings
per share
Basic $ (3.29) $ (0.06) $ (2.49) $ 0.21
Diluted (3.29) (0.06) (2.49) 0.21
Weighted average
number of
ordinary shares
used in the
determination of
Basic 35,995,236 35,981,312 35,987,778 28,393,955
Diluted 35,995,236 35,981,312 35,987,778 28,855,816
Due to the opportunistic and customized nature of our underwriting operations, we expect to report different loss and expense ratios in both our frequency and severity businesses from period to period. The following table provides the ratios for the nine month periods ended September 30, 2008 and 2007:
Nine Months Ended Nine Months Ended
September 30, 2008 September 30, 2007
----------------------------- -----------------------------
Frequency Severity Total Frequency Severity Total
--------- --------- --------- --------- --------- ---------
Loss
ratio 35.4% 64.3% 44.9% 49.1% 14.7% 41.1%
Acquisi-
tion
cost
ratio 53.5% 8.8% 38.8% 44.6% 25.2% 40.1%
----- ----- ----- ----- ----- -----
Composite
ratio 88.9% 73.1% 83.7% 93.7% 39.9% 81.2%
Internal
expense
ratio 13.8% 11.9%
----- -----
Combined
ratio 97.5% 93.1%
===== =====