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GREENLIGHT CAPITAL RE, LTD. (GLRE)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was mixed: underwriting improved materially (combined ratio 95.0%, +4.9 pts YoY) but investment losses (-$7.8M) held back bottom line to $0.3M net income and $0.01 diluted EPS; fully diluted BVPS rose 0.5% to $18.97 .
  • Open Market segment delivered a 92.0% combined ratio and $11.2M underwriting income; Innovations posted a 107.0% combined ratio on adverse development in two programs, which management said is being addressed .
  • Management reiterated the strategic pivot away from open‑market casualty into better‑controlled Innovations channels; renewal pricing is “flat to mild single‑digit decreases” and exposures are positioned prudently into cat season .
  • No formal guidance was issued; capital return continued with $5.0M in buybacks at $13.99 average price, and BVPS advanced despite market‑driven investment losses, a potential support for the stock on underwriting consistency and capital discipline .

What Went Well and What Went Wrong

  • What Went Well

    • Underwriting: Combined ratio improved to 95.0% (from 99.9% YoY), driving $8.1M underwriting income; Open Market segment combined ratio improved to 92.0% with lower acquisition costs and growth in FAL business .
    • Capital management: Repurchased $5.0M of shares at $13.99 and still grew fully diluted BVPS to $18.97 (+0.5% QoQ; +7.5% since YE’24) .
    • Strategic execution: Continued non‑renewal of open‑market casualty and reallocation to segments with better data visibility; CEO: “We believe our book is well positioned for a strong second half of the year.” .

  • What Went Wrong

    • Investments: Solasglas returned -4% with shorts rallying into a strongly rising market; total investment loss was $7.8M, compressing reported EPS to $0.01 .
    • Innovations segment: Combined ratio deteriorated to 107.0% on $2.5M adverse development in two programs; management is implementing corrective actions .
    • Prior-year development: Net adverse development added 1.9 pts to the consolidated loss ratio; runoff homeowners also saw $1.5M adverse development .

Financial Results

Headline metrics – sequential trend (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Gross Premiums Written ($M)$143.8 $247.9 $179.6
Net Premiums Earned ($M)$148.1 $168.5 $161.6
Net Underwriting Income ($M)-$18.0 -$7.8 $8.1
Combined Ratio (%)112.1% 104.6% 95.0%
Net Income ($M)-$27.4 $29.6 $0.3
Diluted EPS ($)-$0.81 $0.86 $0.01
Fully Diluted BVPS ($)$17.95 $18.87 $18.97

YoY comparison – Q2 2025 vs Q2 2024

MetricQ2 2024Q2 2025YoY
Gross Premiums Written ($M)$169.0 $179.6 +6.3%
Net Premiums Earned ($M)$158.4 $161.6 +2.0%
Net Underwriting Income ($M)$0.3 $8.1 +$7.8
Combined Ratio (%)99.9% 95.0% -4.9 pts
Net Income ($M)$8.0 $0.3 -$7.7
Diluted EPS ($)$0.23 $0.01 -$0.22
Fully Diluted BVPS ($)$17.65 $18.97 +7.5%

Versus Wall Street estimates (S&P Global) – Q2 2025

MetricQ2 2025 ActualQ2 2025 Consensus
Diluted EPS ($)$0.01 N/A (not available via S&P Global)
Net Premiums Earned/Revenue ($M)$161.6 N/A (not available via S&P Global)

Segment performance – Q2 2025

SegmentNet Premiums Earned ($M)Loss Ratio (%)Acquisition Cost Ratio (%)Expense Ratio (%)Combined Ratio (%)Underwriting Income ($M)
Open Market140.6 59.4 29.1 3.5 92.0 11.2
Innovations21.4 71.3 28.1 7.6 107.0 -1.5
Consolidated161.6 61.9 29.0 4.1 95.0 8.1

KPIs and capital

KPIQ2 2025
Shareholders’ Equity ($M)$663.3
Fully Diluted BVPS ($)$18.97
Share Repurchases$5.0M at $13.99 avg price
Total Investment Income (Loss) ($M)-$7.8
Income from Solasglas ($M)-$18.3
Other Net Investment Income ($M)$10.5

Why results moved:

  • Underwriting improved on benign cats and lower acquisition costs in Open Market; Innovations saw adverse development in two programs (+11.8 pts to segment CR), partially offset by lower attritional losses .
  • Investment loss reflected short squeezes and a strong equity rally; D. Einhorn cited significant detractors among shorts in “profitless tech” and weak long performance; net exposure reduced to ~2% at quarter‑end and ~7% in July .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Financial guidance (revenue/EPS/margins)FY 2025None issuedNone issuedMaintained – no formal guidance
Pricing/market color2H 2025Flat to mild decreases indicated at Q1“Flat to mild single‑digit decreases” in risk‑adjusted rates; limited 7/1 renewals; exposures positioned prudently for cat season Qualitative update
Capital returnsOngoingActive repurchasesRepurchased $5.0M in Q2; monitoring capacity for more Ongoing

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Casualty strategy/pivotStrengthened legacy casualty reserves; plan to move MGA casualty into Innovations; non‑renew some open‑market casualty Non‑renewal impact started to flow; offset by growth in FAL and specialty; casualty pressure noted in Open Market Continuing pivot; managed contraction in open‑market casualty
Solasglas stance/performanceQ4: -1.9%; FY24 +9.8%; cautious net exposure ~33% Q2: -4%; shorts detracted; long underperformance; net exposure ~2% at Q2‑end; July -4%; ~7% net Defensive posture; reduced exposure
Catastrophe exposure/definitionsLA wildfires $15–$30M estimate; cat load significant in Q4 New definitions disclosed for cat (>=$5M) and “known large loss events” ($1–$5M); quarter benign for cats Enhanced disclosure; benign Q2
Pricing/market conditions1/1 attractive; property down 5–7.5%; specialty modestly softer Overall market “flat to mild single‑digit decreases”; limited 7/1 renewals Gradual softening
Capital managementBuybacks possible; FAL growth plan $5M buybacks executed; remain opportunistic Ongoing repurchases
Regulatory/ratingsAM Best outlook revised to Positive (Oct’24) featured in slides Reiterated in investor deck Stable/positive

Management Commentary

  • CEO Greg Richardson: “We reported a combined ratio of 95% for the quarter… As we head into the peak of cat season, we feel good about our exposures and are well positioned to weather any storms.”
  • CEO on strategy: “We have started to non‑renew a significant portion of our open market casualty book… offset by growth in other areas, including FAL and the specialty book.”
  • Chairman David Einhorn: “The Solasglas investment portfolio lost 4.0% during a difficult quarter… our strong underwriting result and share buyback allowed us to increase our fully diluted book value per share.”
  • CFO Faramarz Romer: “Open Market combined ratio… improved by 2.1 points to 92%… Innovations segment… adverse reserve development related to two specific programs… we are already working with our partners to implement corrective actions.”

Q&A Highlights

  • The Q2 call concluded without a substantive Q&A session; operator closed following prepared remarks .
  • Clarifications regarding segment performance, reserve development, casualty non‑renewals, and FX tailwinds were provided in prepared CFO remarks .

Estimates Context

  • S&P Global Wall Street consensus for Q2 2025 EPS and revenue was not available; therefore, no beat/miss determination versus consensus could be made (Actual diluted EPS $0.01; Net premiums earned $161.6M) .
  • Where forward estimate series are tracked, coverage appears sparse for GLRE; investors should rely on underwriting trajectory and BVPS growth until broader coverage emerges (Values retrieved from S&P Global).*

Key Takeaways for Investors

  • Underwriting inflection: Consolidated combined ratio of 95.0% and a notably strong 92.0% Open Market CR demonstrate improving core profitability despite mixed segment results .
  • Investment drag likely transitory: Defensive positioning and reduced net exposure constrained Q2 returns; if volatility rises and macro weakens as management expects, Solasglas may regain relative advantage .
  • Innovations oversight tightening: Two programs drove adverse development; management is implementing corrective actions and has a 28% quota share to optimize capital and risk .
  • Casualty pivot reduces tail risk: Non‑renewals in open‑market casualty and greater focus through Innovations where data/visibility is stronger should improve loss emergence over time .
  • Capital return supports downside: Ongoing repurchases ($5M in Q2) and BVPS growth to $18.97 provide a floor while underwriting consistency builds the case for sustained ROE improvement .
  • Watch items: Segment execution in Innovations, continued pricing softening into 2026, and hurricane season outcomes are near‑term swing factors .
  • Medium‑term thesis: If Open Market underwriting discipline is maintained and Innovations’ loss ratio normalizes, combined ratio can sustain sub‑100% with optionality from Solasglas when markets rotate, supporting double‑digit BVPS CAGR potential .

Additional context and prior quarters

  • Q1 2025: Net income $29.6M; CR 104.6% driven by California wildfires (14 pts); Solasglas +$40.5M; BVPS +5.1% to $18.87 .
  • Q4 2024: CR 112.1% on aviation reserve strengthening (RU‑Ukraine) and cat losses; net loss $27.4M; FY24 BVPS +7.2% to $17.95 .

Notes:

  • All Q2 2025 financials, segment results, and ratios from the company’s 8‑K and press release .
  • Management commentary and strategic updates from Q2 earnings call .
  • Scheduling and other relevant releases in the quarter included the earnings date announcement and leadership appointment .