Greenlight Capital Re's Q4 2024: Analyzing Contradictions in Reserve Strategies and Casualty Underwriting

These are the key contradictions discussed in Greenlight Capital Re's latest 2024Q4 earnings call, specifically including: Reserve Assessment and Strategy for Russia, Ukraine Losses, Approach to Casualty Underwriting, Adverse Development Trends in Casualty Books, and Investment Portfolio Allocation Strategy:



Underwriting Loss and Catastrophe Activity:
- Greenlight Re reported a net underwriting loss of $18 million, or a combined ratio of 112.1%, in Q4 2024.
- The loss was driven by cat activity, with $17.6 million in cat losses, and $15 million increase in Russia-Ukraine conflict reserves.
- Hurricane Milton contributed $7.5 million to the cat losses.

1/1 Renewals and Growth Opportunities:
- Over 50% of Greenlight Re's business incepts on January 1st, with the 1/1 renewal season presenting opportunities for growth.
- The company anticipates its FAL book to grow by approximately 25% and its property book by 10% over 2024.
- Market conditions remain attractive despite softening in certain classes, allowing Greenlight Re to grow its business in key areas.

Innovations Segment and Strategic Focus:
- Greenlight Re's Innovations segment generated a combined ratio of 95.8% on $94.7 million of gross written premium in 2024.
- The Innovations segment is a key part of the company's growth strategy, leveraging its distinctive strengths in the area.
- The company is committed to finding ways to leverage these strengths for future growth.

Investment Portfolio Performance:
- The Solasglas Fund returned negative 1.9% in Q4, with the largest positive contributors being investments in Peloton Interactive and Kyndryl Holdings.
- The largest detractors were investments in Greenberg Partners and short positions in loss-making technology companies.
- Greenlight Re ended 2024 with a 7.2% increase in fully diluted book value per share, driven by total investment income of $79.6 million.