GREENLIGHT CAPITAL RE LTD

The table below summarizes our consolidated operating results for the three months ended March 31, 2024 and 2023:

1 The net financial impacts associated with changes in the estimate of losses incurred in prior years, which incorporate earned reinstatement premiums assumed and ceded, adjustments to assumed and ceded acquisition costs, and deposit interest expense, were a loss of $5.4 million and $12.0 million for the three months ended March 31, 2024 and 2023, respectively.

2 Net underwriting income (loss) is a non-GAAP financial measure. See “ Key Financial Measures and Non-GAAP Measures” above for discussion and reconciliation of non-GAAP financial measures.

The following provides further details on the significant variances for the first quarter 2024 (“Q1 2024”) compared to same quarter in 2023 (“Q1 2023”).

Overview

For the three months ended March 31, 2024, the fully diluted book value per share increased by $0.65 per share, or 3.9%, to $17.39 per share from $16.74 per share at December 31, 2023. For the three months ended March 31, 2024, basic book value per share increased by $0.81 per share, or 4.8%, to $17.68 per share from $16.87 per share at December 31, 2023.

For the three months ended March 31, 2024, our net income was $27.0 million, compared to net income of $5.9 million reported for the equivalent 2023 period.

The developments that most significantly affected our financial performance during Q1 2024, compared to the equivalent 2023 period, are summarized below:

•Underwriting income: Increased by $3.0 million primarily driven by 1.8 percentage points improvement in our combined ratio due to lower adverse prior year loss development and acquisition costs, offset partially by an increase in underwriting costs. Current year CAT losses contributed 7.7% to our combined ratio, compared to 4.3% in Q1 2023. For further information on CAT losses and prior year loss development, refer to Note 7 -Loss and Loss Adjustment Expense Reserves of the Q1 2024 Financials.

•Investment income: Increased by $21.2 million primarily driven by stronger results from SILP. Our investment in SILP reported a gain of $18.2 million during Q1 2024, compared to a loss of $3.1 million during the equivalent period in 2023. SILP generated a net return of 5.2% for Q1 2024.

•Corporate expense: Decreased by $1.6 million mainly due to non-recurring severance costs included in Q1 2023 and lower outside legal costs following the hiring of our new General Counsel in April 2023.

•Foreign exchange gains (losses): $1.6 million foreign exchange losses for Q1 2024, compared to $4.9 million foreign exchange gains in Q1 2023, driven mainly by the reversal of the pound sterling movement against the U.S. dollar; and

•Other income, net: Increased by $2.9 million due to stronger investment income on funds withheld by third party Lloyd’s syndicates, reported on a quarterly lag basis.

Underwriting Results by Segment

The following provides a further discussion of our underwriting results for our Property & Casualty (Re)insurance operating segment for the three months ended March 31, 2024 and 2023.

Gross Premiums Written

Details of gross premiums written are provided in the following table:

(1) As a result of the reclassification of certain treaties within the lines of business (see Note 16 of the Q1 2024 Financials), the gross premiums written for Property, Casualty, and Other were restated accordingly. However, there was no change to the Total gross premiums written.

As a result of our underwriting philosophy, the total premiums we write and the mix of premiums between property, casualty, and other business, may vary significantly from period to period depending on the market opportunities we identify.

For the three months ended March 31, 2024, our gross premiums written increased by $30.8 million, or 16.5%, compared to the equivalent 2023 period. The following table provides a further analysis of this overall increase:

Premiums Ceded

For the three months ended March 31, 2024, premiums ceded were $23.2 million, or 10.7% of gross premiums written, compared to $11.2 million, or 6.0% of gross premiums written, for the same quarter in 2023. The increase was primarily due to the purchase of an additional reinsurance coverage to reduce our overall exposure to Marine and Energy class in light of recent growth in this class of business, coupled with an increase in quota share retrocessions for Other Specialty business due to growth from inward premiums.

Net Premiums Written

Details of net premiums written are provided in the following table:

(1) As a result of the reclassification of certain treaties within the lines of business (see Note 16), the net premiums written for Property, Casualty, and Other were restated accordingly. However, there was no change to the Total net premiums written.

For the three months ended March 31, 2024 net premiums written increased by $18.8 million, or 10.7%, compared to the three months ended March 31, 2023. The movement in net premiums written resulted from the changes in gross premiums written and ceded during the periods as previously noted.

Net Premiums Earned

Details of net premiums earned are provided in the following table:

(1) As a result of the reclassification of certain treaties within the lines of business (see Note 16), the net premiums earned for Property, Casualty, and Other were restated accordingly. However, there was no change to the Total net premiums earned.

Net premiums earned for the three months ended March 31, 2024, increased by $18.9 million or 13.2%, compared to the three months ended March 31, 2023. The change in net premiums earned is primarily a function of the amount and timing of net premiums written during the current and prior periods, coupled by the mix of business written in the form of excess of loss versus proportional contracts.

Loss and LAE Incurred, Net

The components of the loss ratio were as follows:

Current accident year loss ratio increased by 5.0 points for the three months ended March 31, 2024, compared to the same quarter in 2023 driven by higher CAT losses in 2024, including $10.0 million for the Baltimore bridge loss event, net of $13.5 million loss recoveries.

For the three months ended March 31, 2024, we had prior year adverse loss development of 3.3%, compared to 8.4% for the same quarter in 2023. Refer to Note 7 for further details on prior year developments.

Details of net losses incurred by line of business are provided in the following table:

(1) As a result of the reclassification of certain treaties within the lines of business (see Note 16), the net losses incurred for Property, Casualty, and Other were restated accordingly. However, there was no change to the Total net losses incurred.

The below table summarizes the loss ratios by line of business:

(1) As a result of the reclassification of certain treaties within the lines of business (see Note 16 ), the loss ratios for Property and Casualty were restated accordingly. However, there was no change to the Total loss ratios.

The following provides further details on the change in Q1 2024 vs. Q1 2023.

Acquisition Costs, Net

Our total acquisition cost increased by 0.3% to $41.6 million, compared to Q1 2023, mainly due to growth in net premiums earned offset partially by lower commissions from excess of loss contracts compared to proportional treaties. The acquisition cost ratios by line of business were as follows:

(1) As a result of the reclassification of certain treaties within the lines of business (see Note 16), the acquisition cost ratios for Property, Casualty, and Other were restated accordingly. However, there was no change to the Total acquisition cost ratio.

The following provides further details on the change in Q1 2024 vs. Q1 2023.

Ratio Analysis

The following table provides our underwriting ratios by line of business for the respective periods:

Our combined ratio improved by 1.8 percentage points in the current quarter compared to Q1 2023 predominantly due to lower acquisition costs ratio; partially offset by an increase in underwriting expense ratio (see G&A Expenses below for further details).

General and Administrative (“G&A”) Expenses

The breakdown of our G&A expenses between underwriting and corporate functions was as follows:

G&A increased by 7.8% in the current quarter, compared to Q1 2023. The increase was driven by:

•Underwriting expenses: Increased by $2.4 million or 60.9%, predominantly due to an increase in headcount to drive business growth, coupled with an increase in professional fees and outsourced services relating to underwriting activities. As a result, our underwriting expense ratio increased by 1.6 percentage points in the current quarter compared to Q1 2023.

•Corporate expenses: Decreased by $1.6 million or 27.0%, driven mainly by non-recurring severance costs included in Q1 2023 and lower outside legal costs following the hiring of our new General Counsel in April 2023.

Total Investment Income

A summary of our total investment income is as follows:

Net investment-related income

Our net investment-related income decreased marginally compared to Q1 2023, driven mostly by an impairment charge relating to our Innovations-related investments.

Share of Solasglas’ net income

For the three months ended March 31, 2024, Solasglas reported a gain of 5.2%, compared to a loss of 1.1% for the same quarter in 2023. The following table provides a breakdown of the gross and net investment return.

1 “Other income and expenses” excludes performance compensation but includes management fees. “Net investment return” incorporates both of these amounts. For further information about management fees and performance compensation, refer to Note 3.

For the three months ended March 31, 2024, the significant contributors to SILP’s investment return were long positions in Green Brick Partners (GRBK), Tenet Healthcare (THC), and an S&P 500 / U.S. interest rate derivative position. The largest detractors were long positions in Penn National Gaming (PENN), CONSOL Energy (CEIX), and a single-name short position.

Each month, we post on our website (www.greenlightre.com) the returns from our investment in SILP.