Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 28, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-33493 | |
Entity Registrant Name | GREENLIGHT CAPITAL RE, LTD. | |
Entity Incorporation, State or Country Code | E9 | |
Entity Address, Address Line One | 65 Market Street | |
Entity Address, Address Line Two | Suite 1207, Jasmine Court | |
Entity Address, City or Town | Camana Bay | |
Entity Address, Country | KY | |
Entity Address, Postal Zip Code | KY1-1205 | |
City Area Code | 345 | |
Local Phone Number | 943-4573 | |
Title of 12(b) Security | Class A Ordinary Shares | |
Trading Symbol | GLRE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001385613 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 28,569,346 | |
Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 6,254,715 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Investments | ||
Investment in related party investment fund | $ 195,199 | $ 183,591 |
Other investments | 65,081 | 47,384 |
Total investments | 260,280 | 230,975 |
Cash and cash equivalents | 32,278 | 76,307 |
Restricted cash and cash equivalents | 648,897 | 634,794 |
Reinsurance balances receivable (net of allowance for expected credit losses of $89 and $89) | 473,564 | 405,365 |
Loss and loss adjustment expenses recoverable (net of allowance for expected credit losses of $47 and $47) | 10,604 | 11,100 |
Deferred acquisition costs | 78,836 | 63,026 |
Unearned premiums ceded | 13,659 | 42 |
Other assets | 6,425 | 5,885 |
Total assets | 1,524,543 | 1,427,494 |
Liabilities | ||
Loss and loss adjustment expense reserves | 540,827 | 524,010 |
Unearned premium reserves | 298,173 | 227,584 |
Reinsurance balances payable | 108,772 | 91,224 |
Funds withheld | 11,446 | 3,792 |
Other liabilities | 4,927 | 7,164 |
Convertible senior notes payable | 93,446 | 98,057 |
Total liabilities | 1,057,591 | 951,831 |
Shareholders' equity | ||
Preferred share capital (par value $0.10; authorized, 50,000,000; none issued) | 0 | 0 |
Ordinary share capital (Class A: par value $0.10; authorized, 100,000,000; issued and outstanding, 28,569,346 (2021: 27,589,731): Class B: par value $0.10; authorized, 25,000,000; issued and outstanding, 6,254,715 (2021: 6,254,715)) | 3,482 | 3,384 |
Additional paid-in capital | 477,021 | 481,784 |
Retained earnings (deficit) | (13,551) | (9,505) |
Total shareholders' equity | 466,952 | 475,663 |
Total liabilities and equity | $ 1,524,543 | $ 1,427,494 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Allowance for expected credit losses | $ 89 | $ 89 |
Loss and loss adjustment expenses recoverable, allowance | $ 47 | $ 47 |
Preferred share capital, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred share capital, authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred share capital, issued (in shares) | 0 | 0 |
Class A | ||
Ordinary share capital, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Ordinary share capital, authorized (in shares) | 100,000,000 | 100,000,000 |
Ordinary share capital, issued (in shares) | 28,569,346 | 27,589,731 |
Ordinary share capital, outstanding (in shares) | 28,569,346 | 27,589,731 |
Class B | ||
Ordinary share capital, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Ordinary share capital, authorized (in shares) | 25,000,000 | 25,000,000 |
Ordinary share capital, issued (in shares) | 6,254,715 | 6,254,715 |
Ordinary share capital, outstanding (in shares) | 6,254,715 | 6,254,715 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues | ||||
Gross premiums written | $ 155,146 | $ 128,735 | $ 435,812 | $ 440,249 |
Gross premiums ceded | (8,801) | (60) | (21,973) | (6) |
Net premiums written | 146,345 | 128,675 | 413,839 | 440,243 |
Change in net unearned premium reserves | (24,397) | 6,849 | (55,747) | (36,844) |
Net premiums earned | 121,948 | 135,524 | 358,092 | 403,399 |
Income (loss) from investment in related party investment fund (net of related party expenses - Note 3) | 8,521 | (6,214) | 24,474 | (4,196) |
Net investment income (loss) | 3,038 | 10,303 | 11,978 | 28,999 |
Other income (expense), net | (6,784) | (342) | (13,374) | (1,076) |
Total revenues | 126,723 | 139,271 | 381,170 | 427,126 |
Expenses | ||||
Net loss and loss adjustment expenses incurred | 94,559 | 110,400 | 252,789 | 295,078 |
Acquisition costs | 36,821 | 35,048 | 106,101 | 106,060 |
General and administrative expenses | 7,389 | 6,060 | 22,727 | 21,340 |
Deposit interest expense | 6,148 | 38 | 6,373 | 2,957 |
Interest expense | 1,091 | 1,578 | 3,411 | 4,684 |
Total expenses | 146,008 | 153,124 | 391,401 | 430,119 |
Income (loss) before income tax | (19,285) | (13,853) | (10,231) | (2,993) |
Income tax (expense) benefit | 816 | 0 | 823 | (3,733) |
Net income (loss) | $ (18,469) | $ (13,853) | $ (9,408) | $ (6,726) |
Earnings (loss) per share (Class A and Class B) | ||||
Basic (in dollars per share) | $ (0.56) | $ (0.42) | $ (0.28) | $ (0.20) |
Diluted (in dollars per share) | $ (0.56) | $ (0.42) | $ (0.28) | $ (0.20) |
Weighted average number of ordinary shares used in the determination of earnings and loss per share | ||||
Basic (in shares) | 33,127,384 | 32,929,097 | 33,119,814 | 33,507,060 |
Diluted (in shares) | 33,127,384 | 32,929,097 | 33,119,814 | 33,507,060 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Ordinary share capital | Additional paid-in capital | Additional paid-in capital Cumulative Effect, Period of Adoption, Adjustment | Retained earnings (deficit) | Retained earnings (deficit) Cumulative Effect, Period of Adoption, Adjustment |
Beginning balance at Dec. 31, 2020 | $ 3,452 | $ 488,488 | $ (27,083) | ||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issue of Class A ordinary shares, net of forfeitures | 41 | ||||||
Repurchase of Class A ordinary shares | (109) | (9,891) | |||||
Share-based compensation expense | 2,342 | ||||||
Net income (loss) | $ (6,726) | (6,726) | |||||
Ending balance at Sep. 30, 2021 | 450,514 | 3,384 | 480,939 | (33,809) | |||
Beginning balance at Dec. 31, 2020 | 3,452 | 488,488 | (27,083) | ||||
Ending balance at Dec. 31, 2021 | $ 475,663 | 3,384 | 481,784 | (9,505) | |||
Ending balance (Accounting Standards Update 2020-06) at Dec. 31, 2021 | $ (2,500) | $ (7,896) | $ 5,362 | ||||
Increase (Decrease) in Stockholders' Equity | |||||||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2020-06 | Accounting Standards Update 2020-06 | ||||||
Beginning balance at Jun. 30, 2021 | 3,417 | 483,365 | (19,956) | ||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issue of Class A ordinary shares, net of forfeitures | 3 | ||||||
Repurchase of Class A ordinary shares | (36) | (3,216) | |||||
Share-based compensation expense | 790 | ||||||
Net income (loss) | $ (13,853) | (13,853) | |||||
Ending balance at Sep. 30, 2021 | 450,514 | 3,384 | 480,939 | (33,809) | |||
Beginning balance at Dec. 31, 2021 | 475,663 | 3,384 | 481,784 | (9,505) | |||
Increase (Decrease) in Stockholders' Equity | |||||||
Issue of Class A ordinary shares, net of forfeitures | 99 | ||||||
Repurchase of Class A ordinary shares | (6,600) | (1) | (34) | ||||
Share-based compensation expense | 3,167 | ||||||
Net income (loss) | (9,408) | (9,408) | |||||
Ending balance at Sep. 30, 2022 | 466,952 | 3,482 | 477,021 | (13,551) | |||
Beginning balance at Jun. 30, 2022 | 3,472 | 475,903 | 4,918 | ||||
Beginning balance (Accounting Standards Update 2020-06) at Jun. 30, 2022 | $ 0 | $ 0 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issue of Class A ordinary shares, net of forfeitures | 11 | ||||||
Repurchase of Class A ordinary shares | (6,600) | (1) | (34) | ||||
Share-based compensation expense | 1,152 | ||||||
Net income (loss) | (18,469) | (18,469) | |||||
Ending balance at Sep. 30, 2022 | $ 466,952 | $ 3,482 | $ 477,021 | $ (13,551) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash provided by (used in) operating activities | ||
Net income (loss) | $ (9,408) | $ (6,726) |
Adjustments to reconcile net income or loss to net cash provided by (used in) operating activities | ||
Loss (income) from investments in related party investment fund | (24,474) | 4,196 |
Net realized gain on repurchase of convertible senior notes payable | (149) | 0 |
Net change in unrealized gains and losses on investments and notes receivable | (9,237) | (14,860) |
Net realized (gains) losses on investments and notes receivable | 0 | (14,210) |
Foreign exchange (gains) losses | 10,364 | 14 |
Share-based compensation expense | 3,266 | 2,383 |
Amortization and interest expense, net of change in accruals | (612) | 684 |
Depreciation expense | 0 | 16 |
Net change in | ||
Reinsurance balances receivable | (97,651) | (50,185) |
Loss and loss adjustment expenses recoverable | 496 | 3,769 |
Deferred acquisition costs | (15,810) | (9,620) |
Unearned premiums ceded | (13,617) | (26) |
Other assets, excluding depreciation | (540) | (3,760) |
Loss and loss adjustment expense reserves | 36,394 | 46,600 |
Unearned premium reserves | 70,589 | 36,837 |
Reinsurance balances payable | 17,548 | (14,722) |
Funds withheld | 7,654 | 612 |
Other liabilities | (2,237) | 219 |
Net cash provided by (used in) operating activities | (27,424) | (18,779) |
Investing activities | ||
Proceeds from redemptions from related party investment fund | 77,993 | 51,904 |
Contributions to related party investment fund | (65,127) | (69,604) |
Purchases of investments | (8,627) | (4,761) |
Proceeds from sales of investments | 0 | 20,755 |
Change in notes receivable | 0 | 6,101 |
Net cash provided by (used in) investing activities | 4,239 | 4,395 |
Financing activities | ||
Repurchases of convertible senior notes payable | (6,384) | 0 |
Repurchase of Class A ordinary shares | (35) | (10,000) |
Net cash provided by (used in) financing activities | (6,419) | (10,000) |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (322) | 0 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (29,926) | (24,384) |
Cash, cash equivalents and restricted cash at beginning of the period | 711,101 | 754,306 |
Cash, cash equivalents and restricted cash at end of the period | 681,175 | 729,922 |
Supplementary information | ||
Interest paid in cash | 4,023 | 4,000 |
Income tax paid in cash | $ 0 | $ 3,700 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | ORGANIZATION AND BASIS OF PRESENTATION Greenlight Capital Re, Ltd. (“GLRE”) was incorporated as an exempted company under the Companies Law of the Cayman Islands on July 13, 2004. GLRE’s wholly-owned subsidiary, Greenlight Reinsurance, Ltd. (“Greenlight Re”), provides global specialty property and casualty reinsurance. Greenlight Re has a Class D insurer license issued in accordance with the terms of The Insurance Act, 2010 (as amended) and underlying regulations thereto (the “Act”) and is subject to regulation by the Cayman Islands Monetary Authority. Greenlight Re commenced underwriting in April 2006. Verdant Holding Company, Ltd. (“Verdant”), a wholly-owned subsidiary of GLRE, was incorporated in 2008 in the state of Delaware. During 2010, GLRE established Greenlight Reinsurance Ireland, Designated Activity Company (“GRIL”), a wholly-owned reinsurance subsidiary based in Dublin, Ireland. GRIL is authorized as a non-life reinsurance undertaking in accordance with the provisions of the European Union (Insurance and Reinsurance) Regulations 2015. GRIL provides multi-line property and casualty reinsurance capacity to the European broker market and provides GLRE with an additional platform to serve clients located in Europe and North America. In 2020, GLRE established Greenlight Re Marketing (UK) Limited (“Greenlight Re UK”) as a wholly-owned subsidiary to increase the Company’s presence in the London market. In 2022, Greenlight Innovation Syndicate 3456 (“Syndicate 3456”) commenced underwriting under the Lloyd’s syndicate-in-a-box model, with Greenlight Re as the sole capital provider. As used herein, the “Company” refers collectively to GLRE and its consolidated subsidiaries. The Class A ordinary shares of GLRE are listed on Nasdaq Global Select Market under the symbol “GLRE.” These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In addition, the year-end balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the U.S. Securities and Exchange Commission on March 8, 2022. The condensed consolidated financial statements include the accounts of GLRE and its wholly-owned subsidiaries, Greenlight Re, GRIL, Verdant, and Greenlight Re UK. The condensed consolidated financial statements also include the accounts of Syndicate 3456. All significant intercompany transactions and balances have been eliminated on consolidation. Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statements presentation. These reclassifications do not affect previously reported net income or retained earnings. In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company’s financial position and results of operations as at the end of and for the periods presented. Significant estimates used to prepare the Company’s condensed consolidated financial statements, including those associated with premiums and the estimations of loss and loss adjustment expense reserves, may be subject to significant adjustments in future periods. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES There have been no material changes to the Company’s significant accounting policies as described in its Annual Report on Form 10-K for the year ended December 31, 2021. Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from these estimates. The significant estimates reflected in the Company’s condensed consolidated financial statements include, but are not limited to, loss and loss adjustment expense reserves, premiums written, earned, and receivable, variability underlying risk transfer assessments, allowances for credit losses, share-based compensation, valuation allowances associated with deferred tax assets and investment impairments. Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents Cash and cash equivalents consist of cash and short-term, highly liquid investments and certificates of deposit with original maturity dates of three months or less. Certificates of deposit with original maturities greater than three months are included under the caption "Other investments" on the condensed consolidated balance sheets. The Company maintains cash and cash equivalent balances to collateralize regulatory trusts and letters of credit issued to cedents (see Note 12). The following table reconciles the cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total presented in the condensed consolidated statements of cash flows: September 30, 2022 December 31, 2021 ($ in thousands) Cash and cash equivalents $ 32,278 $ 76,307 Restricted cash and cash equivalents 648,897 634,794 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows $ 681,175 $ 711,101 Funds Held by Cedents The caption “Reinsurance balances receivable” in the Company’s condensed consolidated balance sheets includes financial assets held by cedents. At September 30, 2022, funds held by cedents were $303.1 million (December 31, 2021: $246.9 million). Such amounts include premiums withheld by Lloyd’s syndicates and funds contributed by the Company to Lloyd's as security for members’ underwriting activities. The syndicates invest a portion of the premiums withheld in fixed maturity securities and investment funds. The Company records its share of income (or expense) from these assets in its condensed consolidated statements of operations under the caption “Other income (expense).” Reinsurance Assets The Company calculates an allowance for expected credit losses for its reinsurance balances receivable and loss and loss adjustment expenses recoverable by applying a Probability of Default (“PD”) / Loss Given Default (“LGD”) model. The PD / LGD approach considers the Company’s collectibility history on its reinsurance assets and representative external loss history. In calculating the probability of default, the Company also considers the estimated duration of its reinsurance assets. The Company evaluates each counterparty’s creditworthiness based on credit ratings that independent agencies assign to the counterparty. The Company manages its credit risk in its reinsurance assets by transacting only with insurers and reinsurers that it considers financially sound. Credit ratings of the counterparties are forward-looking and consider various economic scenarios. The Company's evaluation of the required allowance for reinsurance balances receivable and loss and loss adjustment expenses recoverable considers the current economic environment as well as potential macroeconomic developments. For its retrocessional counterparties that are unrated, the Company may hold collateral in the form of funds withheld, trust accounts, or irrevocable letters of credit. In evaluating credit risk associated with reinsurance balances receivable, the Company considers its right to offset loss obligations against premiums receivable. The Company regularly evaluates its net credit exposure to assess the ability of cedents and retrocessionaires to honor their respective obligations. At September 30, 2022, the Company has recorded an allowance for expected credit loss on its Reinsurance Assets of $0.1 million (December 31, 2021: $0.1 million). Deposit Assets and Liabilities The Company applies deposit accounting to reinsurance contracts that do not transfer sufficient insurance risk to merit reinsurance accounting. Under deposit accounting, the Company recognizes an asset or liability based on its paid or received consideration. The deposit asset or liability balance is subsequently adjusted using the interest method with the corresponding income or expense recorded in the Company’s condensed consolidated statements of operations under the captions “Other income (expense)” and “Deposit interest expense,” respectively. The Company records deposit assets and liabilities in its condensed consolidated balance sheets in the caption “Reinsurance balances receivable” and “Reinsurance balances payable,” respectively. At September 30, 2022, deposit assets and deposit liabilities were $3.2 million and $13.7 million, respectively (December 31, 2021: $3.5 million and $18.6 million, respectively). For the three and nine months ended September 30, 2022, and 2021, the interest income and expense on deposit accounted contracts were as follows: Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 ($ in thousands) ($ in thousands) Deposit interest income $ — $ — $ — $ — Deposit interest expense $ (6,148) $ (38) $ (6,373) $ (2,957) Deposit interest income/(expense), net $ (6,148) $ (38) $ (6,373) $ (2,957) Foreign Exchange The reporting and functional currency of the Company and all its significant subsidiaries is the U.S. dollar. The Company records foreign currency transactions at the exchange rates in effect on the transaction date. Monetary assets and liabilities in foreign currencies at the balance sheet date are converted at the exchange rate in effect at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are carried at their historical exchange rates. The Company includes any foreign exchange gains and losses under the caption “Other income (expense), net” in the Company’s condensed consolidated statements of operations. For the three and nine months ended September 30, 2022, $5.0 million and $10.4 million, respectively, (three and nine months ended September 30, 2021: $0.6 million and $1.4 million, respectively), of foreign exchange loss was included in the Company’s net income (loss) in the condensed consolidated statements of operations. Derivative instruments The Company recognizes derivative financial instruments in the condensed consolidated balance sheets at their fair values. It includes any realized gains and losses and changes in unrealized gains and losses in the caption “Net investment income (loss)” in the condensed consolidated statements of operations. The Company’s derivatives do not qualify as hedges for financial reporting purposes. The Company records the associated assets and liabilities in its condensed consolidated balance sheets on a gross basis. The Company does not offset these balances against collateral pledged or received. Other Assets The caption “Other assets” in the Company’s condensed consolidated balance sheets consists primarily of prepaid expenses, fixed assets, right-of-use lease assets, other receivables, taxes recoverable, and deferred tax assets. Other Liabilities The caption “Other liabilities” in the Company’s condensed consolidated balance sheets consists primarily of accruals for legal and other professional fees, employee bonuses, taxes payable, and lease liabilities. Earnings (Loss) Per Share The Company has issued unvested restricted stock awards, some of which contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid. These awards are considered “participating securities” for the purposes of calculating earnings (loss) per share. Basic earnings per share is calculated on the basis of the weighted average number of ordinary shares and participating securities outstanding during the period. Diluted earnings (or loss) per share includes the dilutive effect, if any, of the following: • Restricted Stock Units (“RSUs”) issued that convert to ordinary shares upon vesting; • Unvested restricted share awards which are not considered “participating securities”; • Additional potential ordinary shares issuable when in-the-money stock options are exercised, determined using the treasury stock method; • For periods prior to January 1, 2022, those ordinary shares with the potential to be issued in connection with convertible notes and other such convertible instruments, determined using the treasury stock method; and • Effective January 1, 2022, the dilutive effect of the convertible notes is calculated using the if-converted method. Under the if-converted method, the convertible notes are assumed to be converted at the beginning of the period, and the resulting common shares are included in the denominator of the diluted net income per common share calculation. Interest expense related to the convertible notes incurred in the period is added back to the numerator for purposes of the if-converted calculation. For the three and nine months ended September 30, 2022, the effect of the assumed conversion of the convertible notes was anti-dilutive and was not included in the computation of diluted earnings per share. Diluted earnings (or loss) per share contemplates a conversion to ordinary shares of all convertible instruments only if they are dilutive. In the event of a net loss, all RSUs, stock options, shares potentially issuable in connection with convertible notes, and participating securities are excluded from the calculation of both basic and diluted loss per share as their inclusion would be anti-dilutive. The following table reconciles net income (loss) and weighted average shares used in computing basic and diluted net income (loss) per share for the three and nine months ended September 30, 2022 and 2021 (expressed in thousands of U.S. dollars, except per share and share amounts): Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 Numerator for earnings per share Net income (loss) - basic $ (18,469) $ (13,853) $ (9,408) $ (6,726) Add: interest on convertible notes — — — — Net income (loss) - diluted $ (18,469) $ (13,853) $ (9,408) $ (6,726) Denominator for earnings per share Weighted average shares outstanding - basic 33,127,384 32,929,097 33,119,814 33,507,060 Effect of dilutive employee and director share-based awards — — — — Shares potentially issuable in connection with convertible notes — — — — Weighted average shares outstanding - diluted 33,127,384 32,929,097 33,119,814 33,507,060 Anti-dilutive stock options outstanding 690,337 735,627 690,337 735,627 Participating securities excluded from calculation of loss per share 848,841 946,556 848,841 946,556 Shares potentially issuable in connection with convertible notes excluded from calculation of diluted loss per share 5,686,747 — 5,773,889 — Earnings (loss) per Class A and Class B Ordinary share: Basic $ (0.56) $ (0.42) $ (0.28) $ (0.20) Diluted $ (0.56) $ (0.42) $ (0.28) $ (0.20) Taxation Under current Cayman Islands law, no corporate entity, including GLRE and Greenlight Re, is obligated to pay taxes in the Cayman Islands on either income or capital gains. The Company has an undertaking from the Governor-in-Cabinet of the Cayman Islands, pursuant to the provisions of the Tax Concessions Act, as amended, that, in the event that the Cayman Islands enacts any legislation that imposes a tax on profits, income, gains, or appreciations, or any tax in the nature of estate duty or inheritance tax, such tax will not be applicable to GLRE, Greenlight Re nor their respective operations, or to the Class A or Class B ordinary shares or related obligations, before February 1, 2025. Verdant is incorporated in Delaware and therefore is subject to taxes in accordance with the U.S. federal rates and regulations prescribed by the U.S. Internal Revenue Service (“IRS”). Verdant’s taxable income is generally expected to be taxed at a marginal rate of 21% (2021: 21%). Verdant’s tax years 2018 and beyond remain open and may be subject to examination by the IRS. GRIL is incorporated in Ireland and therefore is subject to the Irish corporation tax rate of 12.5% on its trading income and 25% on its non-trading income. The Company records a valuation allowance to the extent that the Company considers it more likely than not that all or a portion of the deferred tax asset will not be realized in the future. Other than this valuation allowance, the Company has not taken any income tax positions subject to significant uncertainty that is reasonably likely to have a material impact on the Company. Recent Accounting Pronouncements Recently Issued Accounting Standards Not Yet Adopted In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-03 “Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” (“ASU 2022-03”). ASU 2022-03 clarifies the guidance for measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. ASU 2022-03 is effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted. The Company does not expect ASU 2022-03 to have a material impact on its financial position, results of operations, or cash flows. Recently Issued Accounting Standards Adopted In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity (“ASU 2020-06”). ASU 2020-06 is designed to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments. The amendments remove the separation models in Subtopic 470-20 for certain contracts. As a result, entities will no longer present embedded conversion features separately in equity; instead, the convertible debt instrument will be accounted for as a single liability measured at its amortized cost. ASU 2020-06 also addresses the computation of earnings per share for convertible debt instruments, requiring the application of the if-converted method when calculating diluted earnings per share. Under the if-converted method, the shares potentially issuable in connection with convertible debt are assumed to be converted at the beginning of the period. The resulting ordinary shares are included in the denominator of the diluted earnings per share calculation for the period presented. The Company adopted ASU 2020-06 during the first quarter of 2022, using the “modified retrospective” transition method. The adoption of ASU 2020-06 resulted in a decrease in the Company’s opening shareholders’ equity of approximately $2.5 million, with a corresponding increase in the carrying value of the senior convertible notes (see Note 7). The adoption of ASU 2020-06 did not have a material impact on the Company’s net income, cash flows, or any other balances. |
INVESTMENT IN RELATED PARTY INV
INVESTMENT IN RELATED PARTY INVESTMENT FUND | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENT IN RELATED PARTY INVESTMENT FUND | INVESTMENT IN RELATED PARTY INVESTMENT FUND The Company has entered into the Second Amended and Restated Exempted Limited Partnership Agreement (the “SILP LPA”) of Solasglas Investments, LP (“SILP”), with DME Advisors II, LLC (“DME II”), as General Partner, Greenlight Re, and GRIL, (together, the “GLRE Limited Partners”). SILP has entered into a SILP investment advisory agreement (“IAA”) with DME Advisors. LP (“DME Advisors”) pursuant to which DME Advisors is the investment manager for SILP. DME II and DME Advisors are related to the Company, and each is an affiliate of David Einhorn, Chairman of the Company’s Board of Directors (the “Chairman”). The SILP LPA includes the following proviso: “The Investment Portfolio of each Partner will not exceed the product of (a) such Partner’s surplus (Greenlight Re Surplus or GRIL Surplus, as the case may be) multiplied by (b) the Investment Cap (50%), and the General Partner will designate any portion of a Partner’s Investment Portfolio as Designated Securities to effectuate such limit.” The Company has concluded that SILP qualifies as a variable interest entity (“VIE”) under U.S. GAAP. In assessing its interest in SILP, the Company noted the following: • DME II serves as SILP’s general partner and has the power of appointing the investment manager. The Company does not have the power to appoint, change or replace the investment manager or the general partner except “for cause.” Neither of the GLRE Limited Partners can participate in the investment decisions of SILP as long as SILP adheres to the investment guidelines provided within the SILP LPA. For these reasons, the GLRE Limited Partners are not considered to have substantive participating rights or kick-out rights. • DME II holds an interest in excess of 10% of SILP’s net assets, which the Company considers to represent an obligation to absorb losses and a right to receive benefits of SILP that are significant to SILP. Consequently, the Company has concluded that DME II’s interests, not the Company’s, meet both the “power” and “benefits” criteria associated with VIE accounting guidance, and therefore DME II is SILP’s primary beneficiary. The Company presents its investment in SILP in its condensed consolidated balance sheets in the caption “Investment in related party investment fund.” The Company’s maximum exposure to loss relating to SILP is limited to the net asset value of the GLRE Limited Partners’ investment in SILP. At September 30, 2022, the net asset value of the GLRE Limited Partners’ investment in SILP was $195.2 million (December 31, 2021: $183.6 million), representing 75.3% (December 31, 2021: 78.2%) of SILP’s total net assets. DME II held the remaining 24.7% (December 31, 2021: 21.8%) of SILP’s total net assets. The investment in SILP is recorded at the GLRE Limited Partners’ share of the net asset value of SILP as reported by SILP’s third-party administrator. The GLRE Limited Partners can redeem their assets from SILP for operational purposes by providing three The Company’s share of the change in the net asset value of SILP for the three and nine months ended September 30, 2022, was $8.5 million and $24.5 million, respectively (three and nine months ended September 30, 2021: $(6.2) million and $(4.2) million, respectively), and shown in the caption “Income (loss) from investment in related party investment fund” in the Company’s condensed consolidated statements of operations. The summarized financial statements of SILP are presented below. Summarized Statement of Assets and Liabilities of Solasglas Investments, LP September 30, 2022 December 31, 2021 ($ in thousands) Assets Investments, at fair value $ 258,386 $ 297,937 Derivative contracts, at fair value 15,727 2,542 Due from brokers 149,071 84,775 Interest and dividends receivable 64 28 Total assets 423,248 385,282 Liabilities and partners’ capital Liabilities Investments sold short, at fair value (153,892) (132,360) Derivative contracts, at fair value (9,739) (7,253) Capital withdrawals payable — (10,000) Due to brokers (10) — Interest and dividends payable (295) (580) Other liabilities (201) (358) Total liabilities (164,137) (150,551) Net Assets $ 259,111 $ 234,731 GLRE Limited Partners’ share of Net Assets $ 195,199 $ 183,591 Summarized Statement of Operations of Solasglas Investments, LP Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 ($ in thousands) Investment income Dividend income (net of withholding taxes) $ 305 $ 146 $ 928 $ 509 Interest income 693 51 1,028 770 Total Investment income 998 197 1,956 1,279 Expenses Management fee (901) (883) (2,686) (2,632) Interest (464) (205) (1,199) (874) Dividends (356) (306) (938) (852) Professional fees and other (262) (227) (756) (786) Total expenses (1,983) (1,621) (5,579) (5,144) Net investment income (loss) (985) (1,424) (3,623) (3,865) Realized and change in unrealized gains (losses) Net realized gain (loss) 7,221 (1,411) 58,196 (14,809) Net change in unrealized appreciation (depreciation) 6,464 (5,437) (17,027) 12,143 Net gain (loss) on investment transactions 13,685 (6,848) 41,169 (2,666) Net income (loss) $ 12,700 $ (8,272) $ 37,546 $ (6,531) GLRE Limited Partners’ share of net income (loss) (1) $ 8,521 $ (6,214) $ 24,474 $ (4,196) (1) Net income (loss) is net of management fees and performance allocation presented below: Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 ($ in thousands) Management fees $ 901 $ 883 $ 2,686 $ 2,632 Performance allocation 947 $ (224) 2,719 — Total $ 1,848 $ 659 $ 5,405 $ 2,632 See Note 11 for further details on related party management fees and performance allocation. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS Investments Other I nvestments The Company’s “Other investments” are composed of the following: • Private investments, unlisted equities, and convertible debt instruments, which consist primarily of Innovations-related investments supporting technology innovators in the (re)insurance market; and • Certificates of deposit with original maturities greater than three months. At September 30, 2022, the Company included the following securities in the caption “Other investments”: Cost Unrealized Unrealized Fair value / carrying value ($ in thousands) Private investments and unlisted equities $ 22,037 $ 42,412 $ (3,368) $ 61,081 Convertible debt securities 1,000 — — 1,000 Certificates of deposit 3,000 — — 3,000 Total other investments $ 26,037 $ 42,412 $ (3,368) $ 65,081 At December 31, 2021, the Company included the following securities in the caption “Other investments”: Cost Unrealized Unrealized Fair value / carrying value ($ in thousands) Private investments and unlisted equities $ 17,411 $ 31,438 $ (1,800) $ 47,049 Derivative financial instruments (not designated as hedging instruments) — 335 — 335 Total other investments $ 17,411 $ 31,773 $ (1,800) $ 47,384 Private investments and unlisted equity securities without readily determinable fair values The Company measures its private investments and unlisted equity securities without readily determinable fair values at cost less impairment (if any), plus or minus observable price changes from identical or similar investments of the same issuers (the “measurement alternative”), with such changes recognized in the caption “Net investment income (loss)” in the condensed consolidated statements of operations. The Company considers the need for impairment on a by-investment basis, based on certain indicators. Under the measurement alternative, the Company makes two types of valuation adjustments: • When the Company observes an orderly transaction of an investee’s identical or similar equity securities, the Company adjusts the carrying value based on the observable price as of the transaction date. Once the Company records such an adjustment, the investment is considered an “asset measured at fair value on a nonrecurring basis.” • If the Company determines that the investment is impaired and the fair value is less than its carrying value, it writes down the investment to its fair value. Once the Company records such an adjustment, the investment is considered an “asset measured at fair value on a nonrecurring basis.” The following table presents the carrying values of the private investments and unlisted equity securities carried under the measurement alternative at September 30, 2022, and 2021, and the related adjustments recorded during the periods then ended. Nine months ended September 30 2022 2021 ($ in thousands) Carrying value (1) $ 61,081 $ 42,349 Upward carrying value changes (2) $ 11,260 $ 13,355 Downward carrying value changes and impairment (3) $ (1,676) $ (500) (1) The period-end carrying values reflect cumulative purchases and sales in addition to upward and downward carrying value changes. (2) The cumulative upward carrying value changes from inception to September 30, 2022, totaled $42.8 million. (3) The cumulative downward carrying value changes and impairments from inception to September 30, 2022, totaled $3.7 million. Fair Value Hierarchy The fair value of a financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants. Assets and liabilities measured at fair value are categorized based on the extent to which the inputs are observable in the market. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows: • Level 1: Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. • Level 2: Observable inputs other than prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated with observable market data. • Level 3: Unobservable inputs supported by little or no market activity and significant to the fair value of the assets and liabilities. The term “unobservable inputs” includes certain pricing models, discounted cash flow methodologies, and similar techniques. Assets measured at fair value on a nonrecurring basis At September 30, 2022, and December 31, 2021, the Company held $53.0 million and $40.5 million, respectively, of private investments and unlisted equities measured at fair value on a nonrecurring basis. The Company classifies these assets as Level 3 within the fair value hierarchy. The following table summarizes the periods between the most recent fair value measurement dates and September 30, 2022, for the private and unlisted equities measured at fair value on a nonrecurring basis: Less than 6 months 6 to 12 months Over 1 year Total ($ in thousands) Fair values measured on a nonrecurring basis $ 24,451 $ 17,080 $ 11,423 $ 52,954 At September 30, 2022, and December 31, 2021, the Company held $8.1 million and $6.5 million, respectively, of private investments and unlisted equities measured at cost. Assets measured at fair value on a recurring basis In accordance with ASC 320, “Investments - Debt Securities,” the Company has classified the convertible debt securities as “trading” measured at estimated fair value with unrealized gains and losses reported in net income. The Company classifies these securities as Level 3 within the fair value hierarchy and estimates their fair values primarily based on inputs such as third-party quotes, issuers’ book value, market multiples, and other inputs. Valuation of these securities is subjective as the markets’ illiquidity may increase the likelihood that the estimated fair value of an investment is not reflective of the price at which an actual transaction could occur. The carrying value of certificates of deposit with original maturities of one year or less approximates their fair values. The Company classifies these assets as Level 2 within the fair value hierarchy. At September 30, 2022, and December 31, 2021, the Company did not carry any other investments at fair value with an assigned Level within the fair value hierarchy. The Company’s investment in the related party investment fund is measured at fair value using the net asset value practical expedient. It is therefore not classified within the fair value hierarchy. (See Note 3 for further details on the related party investment fund.) During the three and nine months ended September 30, 2022 and 2021, there were no transfers between Level 2 and Level 3 of the fair value hierarchy. Financial Instruments Disclosed, But Not Carried, at Fair Value The caption “Convertible senior notes payable” represents financial instruments that the Company carries at amortized cost. The fair value of the convertible senior notes payable is estimated based on the bid price observed in an inactive market for the identical instrument (Level 2 input) (see Note 7). |
LOSS AND LOSS ADJUSTMENT EXPENS
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES | 9 Months Ended |
Sep. 30, 2022 | |
Insurance Loss Reserves [Abstract] | |
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES | LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES At September 30, 2022, the Company’s loss and loss adjustment expense reserves included estimated amounts for several catastrophe events. For significant catastrophe events, including, but not limited to, hurricanes, tornados, typhoons, floods, earthquakes, wildfires, and pandemics, loss reserves are generally established based on loss payments and case reserves reported by clients when received. To establish IBNR loss estimates, the Company makes use of, among other things, the following information: • estimates communicated by ceding companies; • information received from clients, brokers, and loss adjusters; • an understanding of the underlying business written and its exposures to catastrophe event-related losses; • industry data; • catastrophe scenario modeling software; and • management’s judgment. At September 30, 2022, the Company’s loss and loss adjustment expense reserves included $13.6 million from the Russian-Ukrainian conflict and $19.5 million from Hurricane Ian. Additional information the Company considered in estimating its loss reserves included the following: • a review of in-force treaties that may provide coverage and incur losses; • catastrophe and scenario modeling analyses and results shared by cedents; • preliminary loss estimates received from clients, brokers, and loss adjusters; • reviews of industry insured loss estimates and market share analyses; and • management’s judgment. The Company’s Russian-Ukrainian conflict loss estimates include actuarial assumptions, including: • the areas within the affected regions that have incurred losses; • the scope of coverage provided by the underlying policies; • the interpretation of contract terms; • the determination of loss-triggering events; • regulatory, legislative, and judicial actions that could influence contract interpretations across the insurance industry; and • the ability of the cedents and insured to mitigate some or all of their losses. Due to the uncertainty associated with the foregoing assumptions, the Company’s loss estimates are subject to significant variability, and actual losses may ultimately differ materially from the Company's current estimates. The Company will evaluate its assumptions as new information becomes available and may adjust its loss estimates in future periods. Such adjustments may be material to the Company's results of operations and financial condition. Additionally, if the Russian-Ukrainian conflict is prolonged, the Company may incur additional losses in subsequent periods. The Company made no significant changes in the actuarial methodology or reserving process related to its loss and loss adjustment expense reserves for the nine months ended September 30, 2022. At September 30, 2022 and December 31, 2021, loss and loss adjustment expense reserves were composed of the following: September 30, 2022 December 31, 2021 ($ in thousands) Case reserves $ 186,945 $ 190,220 IBNR 353,882 333,790 Total $ 540,827 $ 524,010 A summary of changes in outstanding loss and loss adjustment expense reserves for all lines of business consolidated for the nine months ended September 30, 2022 and 2021 is as follows: Consolidated 2022 2021 ($ in thousands) Gross balance at January 1 $ 524,010 $ 494,179 Less: Losses recoverable (11,100) (16,851) Net balance at January 1 512,910 477,328 Incurred losses related to: Current year 251,231 296,333 Prior years 1,558 (1,255) Total incurred 252,789 295,078 Paid losses related to: Current year (54,866) (96,442) Prior years (160,094) (146,545) Total paid (214,960) (242,987) Foreign currency revaluation (20,516) (1,722) Net balance at September 30 530,223 527,697 Add: Losses recoverable 10,604 13,082 Gross balance at September 30 $ 540,827 $ 540,779 For the nine months ended September 30, 2022, the estimate of net losses incurred relating to prior accident years increased by $1.6 million, primarily due to the following: • adverse development on motor and health business driven by the inflationary increase in claims costs; • adverse development on a multi-line quota share program resulting from newly reported losses received from the cedent; • newly reported claims received relating to excess of loss marine and energy contracts; and • claims deterioration on a cyber contract. The adverse developments were partially offset by favorable developments relating to prior accident years primarily due to the following: • favorable experience on mortgage business; • loss reserves released relating to catastrophe events and COVID-19 based on updated claims reporting received from cedents; and • loss reserves released on an excess of loss workers’ compensation contract. For the nine months ended September 30, 2021, the estimate of net losses incurred relating to prior accident years decreased by $1.3 million due primarily to favorable development on catastrophe events, a mortgage contract associated with the COVID-19 pandemic, and certain health contracts. The decrease in prior accident years was partially offset by adverse loss development on certain workers’ compensation and multi-line casualty contracts written between 2014 and 2018. The changes in the outstanding loss and loss adjustment expense reserves for health claims for the nine months ended September 30, 2022 and 2021 are as follows: Health 2022 2021 ($ in thousands) Gross balance at January 1 $ 9,938 $ 17,485 Less: Losses recoverable — — Net balance at January 1 9,938 17,485 Incurred losses related to: Current year 6,567 31,189 Prior years 3,552 (1,898) Total incurred 10,119 29,291 Paid losses related to: Current year (3,051) (20,224) Prior years (11,146) (13,824) Total paid (14,197) (34,048) Foreign currency revaluation — — Net balance at September 30 5,860 12,728 Add: Losses recoverable — — Gross balance at September 30 $ 5,860 $ 12,728 |
RETROCESSION
RETROCESSION | 9 Months Ended |
Sep. 30, 2022 | |
Reinsurance Disclosures [Abstract] | |
RETROCESSION | RETROCESSION From time to time, the Company purchases retrocessional coverage for one or more of the following reasons: to manage its overall exposure, reduce its net liability on individual risks, obtain additional underwriting capacity and balance its underwriting portfolio. The Company records loss and loss adjustment expenses recoverable from retrocessionaires as assets. For the three and nine months ended September 30, 2022, the Company’s earned ceded premiums were $4.4 million and $8.4 million, respectively (insignificant for the three and nine months ended September 30, 2021). For the three and nine months ended September 30, 2022, loss and loss adjustment expenses recovered and changes in losses recoverable were $2.5 million and $2.5 million, respectively. The recoveries recognized by the Company for the three and nine months ended September 30, 2021, were nil and $0.1 million, respectively. Retrocession contracts do not relieve the Company from its obligations to its cedents. Failure of retrocessionaires to honor their obligations could result in losses to the Company. At September 30, 2022, the Company’s loss reserves recoverable consisted of (i) $7.9 million (December 31, 2021: $8.4 million) recoverable from unrated retrocessionaires, of which $6.9 million (December 31, 2021: $8.2 million) were secured by cash, letters of credit and collateral held in trust accounts for the benefit of the Company and (ii) $2.7 million (December 31, 2021: $2.8 million) recoverable from retrocessionaires rated A- or above by A.M. Best. The Company regularly evaluates its net credit exposure to assess the ability of the retrocessionaires to honor their respective obligations. At September 30, 2022, the Company had recorded an allowance for expected credit losses of $47 thousand (December 31, 2021: $47 thousand). |
SENIOR CONVERTIBLE NOTES
SENIOR CONVERTIBLE NOTES | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
SENIOR CONVERTIBLE NOTES | SENIOR CONVERTIBLE NOTES On August 7, 2018, the Company issued $100.0 million of senior unsecured convertible notes (the “Notes”), which mature on August 1, 2023. The Notes bear interest at 4.0%, payable semiannually on February 1 and August 1 of each year beginning February 1, 2019. Note holders have the option, under certain conditions, to redeem the Notes prior to maturity. At September 30, 2022, the Company’s share price was lower than the conversion price of $17.19 per share. If a holder redeems the Notes, the Company shall have the option to settle the conversion obligation in cash, ordinary shares of the Company, or a combination thereof pursuant to the terms of the indenture governing the Notes. Prior to January 1, 2022, the Company bifurcated the Notes into liability and equity components. Effective January 1, 2022, upon adoption of ASU 2020-06, the Company no longer bifurcates the Notes and presents the entire balance as a single liability on the Company’s condensed consolidated balance sheets (see Note 2 for recently issued accounting standards adopted). The Company’s effective borrowing rate for non-convertible debt at the time of issuance of the Notes was estimated to be 6.0%. The Company incurred issuance costs in connection with the issuance of the Notes. At September 30, 2022, the unamortized portion of these costs was $0.6 million (December 31, 2021: $1.0 million), which the Company expects to amortize through the maturity date. During the three and nine months ended September 30, 2022 the Company repurchased and canceled $6.6 million of the Notes. The carrying value of the Notes at September 30, 2022, including accrued interest of $0.6 million, was $93.4 million (December 31, 2021: $98.1 million). At September 30, 2022, the Company estimated the fair value of the Notes to be $90.2 million (December 31, 2021: $97.5 million) (see Note 4 Financial Instruments). For the three and nine months ended September 30, 2022, the Company recognized interest expenses of $1.1 million and $3.4 million, respectively (three and nine months ended September 30, 2021: $1.6 million and $4.7 million, respectively). The Company was in compliance with all covenants relating to the Notes at September 30, 2022, and December 31, 2021. At September 30, 2022, the Company had a remaining obligation for interest and principal payments of nil and $97.2 million during 2022 and 2023, respectively. Subsequent to September 30, 2022, the Company repurchased and canceled $13.8 million of the Notes. |
SHARE CAPITAL
SHARE CAPITAL | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
SHARE CAPITAL | SHARE CAPITAL The Company’s share capital is made up of ordinary share capital and additional paid-in capital. Ordinary share capital represents the issued and outstanding Class A and Class B ordinary shares at their par values of $0.10 per share. Additional paid-in capital includes the premium paid per share by the subscribing shareholders for Class A and Class B ordinary shares, as well as the earned portion of the grant-date fair value of share-based awards. On October 29, 2020, the Company’s shareholders approved an amendment to the stock incentive plan to increase the number of Class A ordinary shares available for issuance by 3.0 million shares from 5.0 million to 8.0 million. At September 30, 2022, 2,011,426 (December 31, 2021: 3,128,276) Class A ordinary shares remained available for future issuance under the Company’s stock incentive plan. The Compensation Committee of the Board of Directors administers the stock incentive plan. The Board has adopted a share repurchase plan. The timing of such repurchases and the actual number of shares repurchased will depend on various factors, including price, market conditions, and applicable regulatory and corporate requirements. The Board of Directors has approved a share repurchase plan, which expires on June 30, 2023, authorizing the Company to repurchase up to $25.0 million of Class A ordinary shares or securities convertible into Class A ordinary shares in the open market, through privately negotiated transactions or Rule 10b5-1 stock trading plans. The Company is not required to repurchase any of the Class A ordinary shares. The repurchase plan may be modified, suspended, or terminated at the election of our Board of Directors at any time without prior notice. The Company repurchased 4,933 Class A ordinary shares during the nine months ended September 30, 2022. All Class A ordinary shares repurchased are canceled immediately upon repurchase. The following table is a summary of ordinary shares issued and outstanding: Nine months ended September 30 Nine months ended September 30 2022 2021 Class A Class B Class A Class B Balance – beginning of period 27,589,731 6,254,715 28,260,075 6,254,715 Issue of ordinary shares, net of forfeitures 984,548 — 409,200 — Repurchase of ordinary shares (4,933) — (1,079,544) — Balance – end of period 28,569,346 6,254,715 27,589,731 6,254,715 Additional paid-in capital includes the premium per share paid by the subscribing shareholders for Class A and B ordinary shares, which have a par value of $0.10 each. It also includes the earned portion of the grant-date fair value of share-based awards that have not yet vested. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION The Company has a stock incentive plan for directors, employees, and consultants administered by the Compensation Committee of the Board of Directors. Employee and Director Restricted Shares The restricted shares issued to certain employees contain restrictions relating to vesting, forfeiture in the event of termination of employment, transferability, and other matters. For the nine months ended September 30, 2022, the Company issued to non-employee directors an aggregate of 107,763 (2021: 74,769) restricted Class A ordinary shares as part of their remuneration for services to the Company. These restricted shares contain similar restrictions to those issued to employees. They will vest on the earlier of (i) the first anniversary of the date of the share issuance and (ii) the Company’s next annual general meeting, subject to the grantee’s continued service with the Company. During the vesting period, non-employee directors holding these restricted shares retain voting rights and are entitled to any dividends declared by the Company. For the nine months ended September 30, 2022, the Company issued 849,872 (2021: 334,312) Class A ordinary shares to employees pursuant to the Company’s stock incentive plan. The restricted shares granted to employees in 2022 include (i) restricted shares with both performance and service-based vesting conditions (“Performance RSs”) and (ii) restricted shares with only service-based vesting conditions (“Service RSs”). The Service RSs vest evenly each year on January 1, subject to the grantee’s continued service with the Company. If performance goals are achieved, the Performance RSs will cliff vest at the end of a three-year performance period within a range of 25% and 100% of the awarded Performance RSs, with a target of 50%. During the vesting period, the holder of the Service RSs and Performance RSs retains voting rights but is entitled to any dividends declared by the Company only upon vesting. Prior to fiscal year 2022, the restricted shares granted to employees cliff vested three years after the date of issuance, subject to the grantee’s continued service with the Company. During the vesting period, the holder of the restricted shares retained voting rights and are entitled to any dividends declared by the Company. Prior to fiscal year 2021, the Company issued Class A ordinary shares to the Chief Executive Officer (“CEO”) pursuant to the Company’s stock incentive plan (“CEO RSs”). These shares contain performance and service conditions and certain restrictions relating to, among other things, vesting, forfeiture in the event of termination of the CEO’s employment, and transferability. The CEO RSs cliff vest five years after the date of issuance, subject to the performance condition being met and the CEO’s continued service with the Company. At September 30, 2022, there were 193,149 non-vested CEO RSs with a weighted average grant date fair value of $10.10 per share. As the performance conditions associated with these restricted shares have not been met, the Company recognized no compensation cost relating to the unvested shares for the nine months ended September 30, 2022, and 2021. The Company recognizes compensation expense associated with Performance RSs and Service RSs based on the fair value of the Company's Class A ordinary shares measured at the grant date. For Service RSs, the Company recognizes this expense on a straight-line basis over the requisite service period. For Performance RSs, the Company recognizes the associated compensation expense based on achieving established performance criteria during the performance period. For the nine months ended September 30, 2022, grantees forfeited 8,476 (2021: 20,592) restricted shares. For the nine months ended September 30, 2022, the Company reversed $26 thousand of stock compensation expense (2021: $0.1 million) in relation to the forfeited restricted shares. The Company recorded $2.6 million of share-based compensation expense, net of forfeiture reversals, relating to restricted shares for the nine months ended September 30, 2022 (2021: $1.8 million). At September 30, 2022, there was $4.4 million (December 31, 2021: $2.7 million) of unrecognized compensation cost relating to non-vested restricted shares (excluding CEO RSs), which the Company expects to recognize over a weighted-average period of 1.6 years (December 31, 2021: 1.8 years). For the nine months ended September 30, 2022, the total fair value of restricted shares vested was $2.0 million (2021: $1.6 million). The following table summarizes the activity for unvested outstanding restricted share awards during the nine months ended September 30, 2022: Performance Restricted Shares Service Restricted Shares Number of Weighted Number of Weighted Balance at December 31, 2021 193,149 $ 10.10 753,407 $ 8.68 Granted 601,213 6.82 356,422 7.02 Vested — — (197,002) 10.06 Forfeited — — (8,476) 7.67 Balance at September 30, 2022 794,362 $ 7.62 904,351 $ 7.73 Employee Restricted Stock Units The Company issues RSUs to certain employees as part of the stock incentive plan. Such RSUs contain restrictions relating to vesting, forfeiture in the event of termination of employment, transferability, and other matters. On the vesting date, the Company converts each RSU into one Class A ordinary share and issues new Class A ordinary shares from the shares authorized for issuance as part of the Company’s stock incentive plan. The RSUs granted to employees in 2022 include (i) RSUs with both performance and service-based vesting conditions (“Performance RSUs”) and (ii) RSUs with only service-based vesting conditions (“Service RSUs”). The Service RSUs vest evenly each year on January 1, subject to the grantee’s continued service with the Company. If performance goals are achieved, the Performance RSUs will cliff vest at the end of a three-year performance period within a range of 25% and 100% of the awarded Performance RSUs, with a target of 50%. The Company recognizes compensation expense associated with Performance RSUs and Service RSUs based on the fair value of the Company's Class A ordinary shares measured at the grant date. For Service RSUs, the Company recognizes this expense on a straight-line basis over the requisite service period. For Performance RSUs, the Company recognizes the associated compensation expense based on achieving established performance criteria during the performance period. Prior to 2022, the RSUs issued to employees cliff vested three years after the date of issuance, subject to the grantee’s continued service with the Company. For the nine months ended September 30, 2022, the Company issued 159,215 (2021: 58,123) RSUs to employees pursuant to the Company’s stock incentive plan. For the nine months ended September 30, 2022, and 2021, no RSUs were forfeited. The Company recorded $0.5 million of share-based compensation expense relating to RSUs for the nine months ended September 30, 2022 (2021: $0.3 million). At September 30, 2022, the total compensation cost related to non-vested RSUs not yet recognized was $0.7 million (December 31, 2021: $0.5 million), which the Company expects to recognize over a weighted-average period of 1.6 years (December 31, 2021: 1.8 years). Employee RSU activity during the nine months ended September 30, 2022, was as follows: Performance Restricted Stock Units Service Restricted Stock Units Number of Weighted Number of Weighted Balance at December 31, 2021 — $ — 154,134 $ 8.59 Granted 105,008 6.82 54,207 6.82 Vested — — (35,389) 10.84 Balance at September 30, 2022 105,008 $ 6.82 172,952 $ 7.58 Employee and Director Stock Options For the nine months ended September 30, 2022, and 2021, no Class A ordinary share purchase options were granted or exercised by directors or employees, and 45,290 Class A ordinary share purchase options expired. When the Company grants stock options, it reduces the corresponding number from the shares authorized for issuance as part of the Company’s stock incentive plan. The Board of Directors does not currently anticipate that the Company will declare any dividends during the expected term of the options. The Company uses graded vesting for expensing employee stock options. The total compensation cost expensed relating to stock options for the nine months ended September 30, 2022, was $0.2 million (2021: $0.3 million). At September 30, 2022, the total compensation cost related to non-vested options not yet recognized was $0.1 million (December 31, 2021: $0.3 million), which will be recognized over a weighted-average period of 0.8 years (December 31, 2021: 1.2 years) assuming the grantee completes the service period for vesting of the options. Employee and director stock option activity during the nine months ended September 30, 2022 was as follows: Number of Weighted Weighted Intrinsic value Weighted average remaining contractual term Balance at December 31, 2021 735,627 $ 22.35 $ 10.23 $ — 4.7 years Granted — — — — — Exercised — — — — — Forfeited — — — — — Expired (45,290) 23.80 11.04 — — Balance at September 30, 2022 690,337 $ 22.25 $ 10.18 $ — 4.2 years Stock Compensation Expense For the nine months ended September 30, 2022, and 2021, the combined stock compensation expenses (net of forfeitures) included in the caption “General and administrative expenses” in the Company’s condensed consolidated statements of operations were $3.3 million and $2.4 million, respectively. |
TAXATION
TAXATION | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
TAXATION | TAXATIONAt September 30, 2022, the Company recorded a gross deferred tax asset of $3.7 million (December 31, 2021: $3.2 million) and a deferred tax asset valuation allowance of $3.2 million (December 31, 2021: $2.7 million). The net deferred tax asset is included in the caption “Other assets” in the Company’s condensed consolidated balance sheets. The Company has determined that it is more likely than not that it will fully realize the recorded deferred tax asset (net of the valuation allowance) in the future. The Company based this determination on the expected timing of the reversal of the temporary differences and the likelihood of generating sufficient taxable income to realize the future tax benefit. The following table sets forth our current and deferred income tax benefit (expense) on a consolidated basis for the nine months ended September 30, 2022 and 2021: Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 ($ in thousands) ($ in thousands) Current tax (expense) benefit $ (234) $ 323 $ (655) $ (3,240) Tax recovered 1,050 — 1,478 — Deferred tax (expense) benefit 170 — 428 — Decrease (increase) in deferred tax valuation allowance (170) (323) (428) (493) Income tax (expense) benefit $ 816 $ — $ 823 $ (3,733) |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Investment Advisory Agreement DME, DME II, and DME Advisors are each an affiliate of the Chairman and therefore are related parties to the Company. The Company has entered into the SILP LPA (as described in Note 3 of the condensed consolidated financial statements). DME II receives a performance allocation equal to (with capitalized terms having the meaning provided under the SILP LPA) (a) 10% of the portion of the Positive Performance Change for each limited partner’s capital account that is less than or equal to the positive balance in such limited partner’s Carryforward Account, plus (b) 20% of the portion of the Positive Performance Change for each limited partner’s capital account that exceeds the positive balance in such limited partner’s Carryforward Account. The Carryforward Account for Greenlight Re and GRIL includes the amount of investment losses to be recouped, including any loss generated on the assets invested in SILP, subject to adjustments for redemptions. The loss carry-forward provision in the SILP LPA allows DME II to earn a reduced performance allocation of 10% of profits in years subsequent to any year in which SILP has incurred a loss until all losses are recouped, and an additional amount equal to 150% of the loss is earned. In accordance with the SILP LPA, DME Advisors constructs a levered investment portfolio as agreed by the Company (the “Investment Portfolio”, as defined in the SILP LPA). On September 1, 2018, SILP entered into the IAA with DME Advisors, which entitles DME Advisors to a monthly management fee equal to 0.125% (1.5% on an annual basis) of each limited partner’s Investment Portfolio. The IAA has an initial term ending on August 31, 2023, subject to an automatic extension for successive three-year terms. For a detailed breakdown of management fees and performance compensation for the three and nine months ended September 30, 2022, and 2021, refer to Note 3 of the condensed consolidated financial statements. Pursuant to the SILP LPA and the IAA, the Company has agreed to indemnify DME, DME II, and DME Advisors for any expense, loss, liability, or damage arising out of any claim asserted or threatened in connection with DME Advisors serving as the Company’s or SILP’s investment advisor. The Company will reimburse DME, DME II, and DME Advisors for reasonable costs and expenses of investigating and defending such claims, provided such claims were not caused due to gross negligence, breach of contract, or misrepresentation by DME, DME II, or DME Advisors. The Company incurred no indemnification amounts during the periods presented. Green Brick Partners, Inc. David Einhorn also serves as the Chairman of the Board of Directors of Green Brick Partners, Inc. (“GRBK”), a publicly-traded company. At September 30, 2022, SILP, along with certain affiliates of DME Advisors, collectively owned 38% of the issued and outstanding common shares of GRBK. Under applicable securities laws, DME Advisors may sometimes be limited in its ability to trade GRBK shares held in SILP. At September 30, 2022, SILP held 2.7 million shares of GRBK. Service Agreement The Company has entered into a service agreement with DME Advisors, pursuant to which DME Advisors provides certain investor relations services to the Company for compensation of five thousand dollars per month (plus expenses). The agreement automatically renews annually until terminated by either the Company or DME Advisors for any reason with 30 days prior written notice to the other party. Collateral Assets Investment Management Agreement Effective January 1, 2019, the Company (and its subsidiaries) entered into a collateral assets investment management agreement (the “CMA”) with DME Advisors, pursuant to which DME Advisors manages certain assets of the Company that are not subject to the SILP LPA and are held by the Company to provide collateral required by the cedents in the form of trust accounts and letters of credit. In accordance with the CMA, DME Advisors receives no fees and is required to comply with the collateral investment guidelines. The CMA can be terminated by any of the parties upon 30 days’ prior written notice to the other parties. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Letters of Credit and Trusts At September 30, 2022, the Company had one letter of credit facility, which automatically renews each year unless terminated by either party in accordance with the applicable required notice period: Maximum Facility Limit Termination Date Notice period required for termination ($ in thousands) Citibank Europe plc $ 275,000 August 20, 2023 120 days before the termination date At September 30, 2022, an aggregate amount of $180.2 million (December 31, 2021: $136.8 million) in letters of credit was issued under the credit facility. At September 30, 2022, the Company had pledged total cash and cash equivalents with a fair value in the aggregate of $180.9 million (December 31, 2021: $137.6 million) as collateral against the letters of credit issued and included in the caption “Restricted cash and cash equivalents” in the Company’s condensed consolidated balance sheets. The credit facility contains customary events of default and restrictive covenants, including but not limited to limitations on liens on collateral, transactions with affiliates, mergers, and sales of assets, as well as solvency and maintenance of certain minimum pledged equity requirements and restricts issuance of any debt without the consent of the letter of credit provider. Additionally, if an event of default exists, as defined in the letter of credit facility, Greenlight Re will be prohibited from paying dividends to its parent company. The Company was in compliance with all the credit facility covenants at September 30, 2022 and December 31, 2021. The Company has also established regulatory trust arrangements for certain cedents. At September 30, 2022, collateral of $468.0 million (December 31, 2021: $497.1 million) was provided to cedents in the form of regulatory trust accounts and included in the caption “Restricted cash and cash equivalents” in the Company’s condensed consolidated balance sheets. Lease Obligations The Company has determined that its lease agreements for office space qualify as operating lease arrangements. At the commencement date, the Company determined the lease term by assuming the exercise of those renewal options deemed to be reasonably certain. The exercise of lease renewal options is at the Company's sole discretion, and these options do not contain any material residual value guarantees or material restrictive covenants. The Company’s weighted-average remaining operating lease term is approximately 4.0 years at September 30, 2022. As the lease contracts generally do not provide an implicit discount rate, the Company used the weighted-average discount rate of 6%, representing its incremental borrowing rate based on information available at the commencement date, to determine the present value of lease payments. The incremental borrowing rate is based on a borrowing with a term similar to that of the associated lease. The Company has made an accounting policy election not to include renewal, termination, or purchase options that are not reasonably certain of exercise when determining the term of the borrowing. At September 30, 2022, the right-of-use assets lease liabilities At September 30, 2022, the commitment for operating lease liabilities for future annual periods was as follows: Year ending December 31, ($ in thousands) 2022 $ 149 2023 611 2024 627 2025 644 2026 345 Thereafter — Total lease payments 2,376 Less Imputed Interest (280) Present value of lease liabilities $ 2,096 Litigation |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company has one operating segment, Property & Casualty Reinsurance. The following tables provide a breakdown of the Company’s gross premiums written by line and class of business, and by geographic area of risks insured for the periods indicated: Gross Premiums Written by Line of Business Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 ($ in thousands) ($ in thousands) Property Commercial $ 2,146 1.4 % $ 3,398 2.6 % $ 8,648 2.0 % $ 9,700 2.2 % Motor 206 0.1 6,103 4.8 768 0.2 24,537 5.6 Personal 17,669 11.4 3,631 2.8 49,425 11.3 10,318 2.3 Total Property 20,021 12.9 13,132 10.2 58,841 13.5 44,555 10.1 Casualty General Liability 13,798 8.9 7,376 5.7 40,523 9.3 10,749 2.4 Motor Liability 565 0.4 19,823 15.4 4,061 0.9 96,795 22.0 Professional Liability 242 0.2 154 0.1 496 0.1 302 0.1 Workers' Compensation 7,216 4.6 17,117 13.3 25,504 5.9 55,237 12.5 Multi-line 69,419 44.7 40,162 31.2 177,647 40.8 137,857 31.3 Total Casualty 91,240 58.8 84,632 65.7 248,231 57.0 300,940 68.4 Other Accident & Health 5,879 3.8 4,175 3.3 10,377 2.4 26,427 6.0 Financial 20,065 12.9 17,920 13.9 56,481 12.9 40,134 9.1 Marine 4,675 3.0 2,462 1.9 18,425 4.2 8,412 1.9 Other Specialty 13,266 8.6 6,414 5.0 43,457 10.0 19,781 4.5 Total Other 43,885 28.3 30,971 24.1 128,740 29.5 94,754 21.5 $ 155,146 100.0 % $ 128,735 100.0 % $ 435,812 100.0 % $ 440,249 100.0 % Gross Premiums Written by Geographic Area of Risks Insured Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 ($ in thousands) ($ in thousands) U.S. and Caribbean $ 72,105 46.5 % $ 67,087 52.1 % $ 224,324 51.5 % $ 258,849 58.8 % Worldwide (1) 79,512 51.3 59,616 46.3 196,197 45.0 174,470 39.6 Europe (2) (1,797) (1.2) 1,483 1.2 2,962 0.7 2,787 0.6 Asia 5,326 3.4 549 0.4 12,329 2.8 4,143 1.0 $ 155,146 100.0 % $ 128,735 100.0 % $ 435,812 100.0 % $ 440,249 100.0 % (1) “Worldwide” is composed of contracts that reinsure risks in more than one geographic area and may include risks in the U.S. (2) The negative balance represents the reversal of premiums due to premium adjustments, termination of contracts, or premium returned upon novation or commutation of contracts. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from these estimates. The significant estimates reflected in the Company’s |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents Cash and cash equivalents consist of cash and short-term, highly liquid investments and certificates of deposit with original maturity dates of three months or less. Certificates of deposit with original maturities greater than three months are included under the caption "Other investments" on the condensed consolidated balance sheets. |
Funds Held by Cedents | Funds Held by CedentsThe caption “Reinsurance balances receivable” in the Company’s condensed consolidated balance sheets includes financial assets held by cedents. At September 30, 2022, funds held by cedents were $303.1 million (December 31, 2021: $246.9 million). Such amounts include premiums withheld by Lloyd’s syndicates and funds contributed by the Company to Lloyd's as security for members’ underwriting activities. The syndicates invest a portion of the premiums withheld in fixed maturity securities and investment funds. The Company records its share of income (or expense) from these assets in its condensed consolidated statements of operations under the caption “Other income (expense).” |
Reinsurance Assets | Reinsurance Assets The Company calculates an allowance for expected credit losses for its reinsurance balances receivable and loss and loss adjustment expenses recoverable by applying a Probability of Default (“PD”) / Loss Given Default (“LGD”) model. The PD / LGD approach considers the Company’s collectibility history on its reinsurance assets and representative external loss history. In calculating the probability of default, the Company also considers the estimated duration of its reinsurance assets. The Company evaluates each counterparty’s creditworthiness based on credit ratings that independent agencies assign to the counterparty. The Company manages its credit risk in its reinsurance assets by transacting only with insurers and reinsurers that it considers financially sound. Credit ratings of the counterparties are forward-looking and consider various economic scenarios. The Company's evaluation of the required allowance for reinsurance balances receivable and loss and loss adjustment expenses recoverable considers the current economic environment as well as potential macroeconomic developments. For its retrocessional counterparties that are unrated, the Company may hold collateral in the form of funds withheld, trust accounts, or irrevocable letters of credit. In evaluating credit risk associated with reinsurance balances receivable, the Company considers its right to offset loss obligations against premiums receivable. The Company regularly evaluates its net credit exposure to assess the ability of cedents and retrocessionaires to honor their respective obligations. |
Deposit Assets and Liabilities | Deposit Assets and Liabilities |
Foreign Exchange | Foreign ExchangeThe reporting and functional currency of the Company and all its significant subsidiaries is the U.S. dollar. The Company records foreign currency transactions at the exchange rates in effect on the transaction date. Monetary assets and liabilities in foreign currencies at the balance sheet date are converted at the exchange rate in effect at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are carried at their historical exchange rates. The Company includes any foreign exchange gains and losses under the caption “Other income (expense), net” in the Company’s condensed consolidated statements of operations. |
Derivative instruments | Derivative instruments The Company recognizes derivative financial instruments in the condensed consolidated balance sheets at their fair values. It includes any realized gains and losses and changes in unrealized gains and losses in the caption “Net investment income (loss)” in the condensed consolidated statements of operations. The Company’s derivatives do not qualify as hedges for financial reporting purposes. The Company records the associated assets and liabilities in its condensed consolidated balance sheets on a gross basis. The Company does not offset these balances against collateral pledged or received. |
Other Assets | Other Assets The caption “Other assets” in the Company’s condensed consolidated balance sheets consists primarily of prepaid expenses, fixed assets, right-of-use lease assets, other receivables, taxes recoverable, and deferred tax assets. |
Other Liabilities | Other LiabilitiesThe caption “Other liabilities” in the Company’s condensed consolidated balance sheets consists primarily of accruals for legal and other professional fees, employee bonuses, taxes payable, and lease liabilities. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The Company has issued unvested restricted stock awards, some of which contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid. These awards are considered “participating securities” for the purposes of calculating earnings (loss) per share. Basic earnings per share is calculated on the basis of the weighted average number of ordinary shares and participating securities outstanding during the period. Diluted earnings (or loss) per share includes the dilutive effect, if any, of the following: • Restricted Stock Units (“RSUs”) issued that convert to ordinary shares upon vesting; • Unvested restricted share awards which are not considered “participating securities”; • Additional potential ordinary shares issuable when in-the-money stock options are exercised, determined using the treasury stock method; • For periods prior to January 1, 2022, those ordinary shares with the potential to be issued in connection with convertible notes and other such convertible instruments, determined using the treasury stock method; and • Effective January 1, 2022, the dilutive effect of the convertible notes is calculated using the if-converted method. Under the if-converted method, the convertible notes are assumed to be converted at the beginning of the period, and the resulting common shares are included in the denominator of the diluted net income per common share calculation. Interest expense related to the convertible notes incurred in the period is added back to the numerator for purposes of the if-converted calculation. For the three and nine months ended September 30, 2022, the effect of the assumed conversion of the convertible notes was anti-dilutive and was not included in the computation of diluted earnings per share. Diluted earnings (or loss) per share contemplates a conversion to ordinary shares of all convertible instruments only if they are dilutive. In the event of a net loss, all RSUs, stock options, shares potentially issuable in connection with convertible notes, and participating securities are excluded from the calculation of both basic and diluted loss per share as their inclusion would be anti-dilutive. |
Taxation | Taxation Under current Cayman Islands law, no corporate entity, including GLRE and Greenlight Re, is obligated to pay taxes in the Cayman Islands on either income or capital gains. The Company has an undertaking from the Governor-in-Cabinet of the Cayman Islands, pursuant to the provisions of the Tax Concessions Act, as amended, that, in the event that the Cayman Islands enacts any legislation that imposes a tax on profits, income, gains, or appreciations, or any tax in the nature of estate duty or inheritance tax, such tax will not be applicable to GLRE, Greenlight Re nor their respective operations, or to the Class A or Class B ordinary shares or related obligations, before February 1, 2025. Verdant is incorporated in Delaware and therefore is subject to taxes in accordance with the U.S. federal rates and regulations prescribed by the U.S. Internal Revenue Service (“IRS”). Verdant’s taxable income is generally expected to be taxed at a marginal rate of 21% (2021: 21%). Verdant’s tax years 2018 and beyond remain open and may be subject to examination by the IRS. GRIL is incorporated in Ireland and therefore is subject to the Irish corporation tax rate of 12.5% on its trading income and 25% on its non-trading income. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Standards Not Yet Adopted In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-03 “Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.” (“ASU 2022-03”). ASU 2022-03 clarifies the guidance for measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. ASU 2022-03 is effective for public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted. The Company does not expect ASU 2022-03 to have a material impact on its financial position, results of operations, or cash flows. Recently Issued Accounting Standards Adopted In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity (“ASU 2020-06”). ASU 2020-06 is designed to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments. The amendments remove the separation models in Subtopic 470-20 for certain contracts. As a result, entities will no longer present embedded conversion features separately in equity; instead, the convertible debt instrument will be accounted for as a single liability measured at its amortized cost. ASU 2020-06 also addresses the computation of earnings per share for convertible debt instruments, requiring the application of the if-converted method when calculating diluted earnings per share. Under the if-converted method, the shares potentially issuable in connection with convertible debt are assumed to be converted at the beginning of the period. The resulting ordinary shares are included in the denominator of the diluted earnings per share calculation for the period presented. The Company adopted ASU 2020-06 during the first quarter of 2022, using the “modified retrospective” transition method. The adoption of ASU 2020-06 resulted in a decrease in the Company’s opening shareholders’ equity of approximately $2.5 million, with a corresponding increase in the carrying value of the senior convertible notes (see Note 7). The adoption of ASU 2020-06 did not have a material impact on the Company’s net income, cash flows, or any other balances. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table reconciles the cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total presented in the condensed consolidated statements of cash flows: September 30, 2022 December 31, 2021 ($ in thousands) Cash and cash equivalents $ 32,278 $ 76,307 Restricted cash and cash equivalents 648,897 634,794 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows $ 681,175 $ 711,101 |
Schedule of Restrictions on Cash and Cash Equivalents | The following table reconciles the cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total presented in the condensed consolidated statements of cash flows: September 30, 2022 December 31, 2021 ($ in thousands) Cash and cash equivalents $ 32,278 $ 76,307 Restricted cash and cash equivalents 648,897 634,794 Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows $ 681,175 $ 711,101 |
Schedule of Interest Income and Interest Expense | For the three and nine months ended September 30, 2022, and 2021, the interest income and expense on deposit accounted contracts were as follows: Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 ($ in thousands) ($ in thousands) Deposit interest income $ — $ — $ — $ — Deposit interest expense $ (6,148) $ (38) $ (6,373) $ (2,957) Deposit interest income/(expense), net $ (6,148) $ (38) $ (6,373) $ (2,957) |
Schedule of Net Income (Loss) and Weighted Average Number of Shares | The following table reconciles net income (loss) and weighted average shares used in computing basic and diluted net income (loss) per share for the three and nine months ended September 30, 2022 and 2021 (expressed in thousands of U.S. dollars, except per share and share amounts): Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 Numerator for earnings per share Net income (loss) - basic $ (18,469) $ (13,853) $ (9,408) $ (6,726) Add: interest on convertible notes — — — — Net income (loss) - diluted $ (18,469) $ (13,853) $ (9,408) $ (6,726) Denominator for earnings per share Weighted average shares outstanding - basic 33,127,384 32,929,097 33,119,814 33,507,060 Effect of dilutive employee and director share-based awards — — — — Shares potentially issuable in connection with convertible notes — — — — Weighted average shares outstanding - diluted 33,127,384 32,929,097 33,119,814 33,507,060 Anti-dilutive stock options outstanding 690,337 735,627 690,337 735,627 Participating securities excluded from calculation of loss per share 848,841 946,556 848,841 946,556 Shares potentially issuable in connection with convertible notes excluded from calculation of diluted loss per share 5,686,747 — 5,773,889 — Earnings (loss) per Class A and Class B Ordinary share: Basic $ (0.56) $ (0.42) $ (0.28) $ (0.20) Diluted $ (0.56) $ (0.42) $ (0.28) $ (0.20) |
INVESTMENT IN RELATED PARTY I_2
INVESTMENT IN RELATED PARTY INVESTMENT FUND (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Financial Information of Investment | The summarized financial statements of SILP are presented below. Summarized Statement of Assets and Liabilities of Solasglas Investments, LP September 30, 2022 December 31, 2021 ($ in thousands) Assets Investments, at fair value $ 258,386 $ 297,937 Derivative contracts, at fair value 15,727 2,542 Due from brokers 149,071 84,775 Interest and dividends receivable 64 28 Total assets 423,248 385,282 Liabilities and partners’ capital Liabilities Investments sold short, at fair value (153,892) (132,360) Derivative contracts, at fair value (9,739) (7,253) Capital withdrawals payable — (10,000) Due to brokers (10) — Interest and dividends payable (295) (580) Other liabilities (201) (358) Total liabilities (164,137) (150,551) Net Assets $ 259,111 $ 234,731 GLRE Limited Partners’ share of Net Assets $ 195,199 $ 183,591 Summarized Statement of Operations of Solasglas Investments, LP Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 ($ in thousands) Investment income Dividend income (net of withholding taxes) $ 305 $ 146 $ 928 $ 509 Interest income 693 51 1,028 770 Total Investment income 998 197 1,956 1,279 Expenses Management fee (901) (883) (2,686) (2,632) Interest (464) (205) (1,199) (874) Dividends (356) (306) (938) (852) Professional fees and other (262) (227) (756) (786) Total expenses (1,983) (1,621) (5,579) (5,144) Net investment income (loss) (985) (1,424) (3,623) (3,865) Realized and change in unrealized gains (losses) Net realized gain (loss) 7,221 (1,411) 58,196 (14,809) Net change in unrealized appreciation (depreciation) 6,464 (5,437) (17,027) 12,143 Net gain (loss) on investment transactions 13,685 (6,848) 41,169 (2,666) Net income (loss) $ 12,700 $ (8,272) $ 37,546 $ (6,531) GLRE Limited Partners’ share of net income (loss) (1) $ 8,521 $ (6,214) $ 24,474 $ (4,196) (1) Net income (loss) is net of management fees and performance allocation presented below: Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 ($ in thousands) Management fees $ 901 $ 883 $ 2,686 $ 2,632 Performance allocation 947 $ (224) 2,719 — Total $ 1,848 $ 659 $ 5,405 $ 2,632 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Other Investments | At September 30, 2022, the Company included the following securities in the caption “Other investments”: Cost Unrealized Unrealized Fair value / carrying value ($ in thousands) Private investments and unlisted equities $ 22,037 $ 42,412 $ (3,368) $ 61,081 Convertible debt securities 1,000 — — 1,000 Certificates of deposit 3,000 — — 3,000 Total other investments $ 26,037 $ 42,412 $ (3,368) $ 65,081 At December 31, 2021, the Company included the following securities in the caption “Other investments”: Cost Unrealized Unrealized Fair value / carrying value ($ in thousands) Private investments and unlisted equities $ 17,411 $ 31,438 $ (1,800) $ 47,049 Derivative financial instruments (not designated as hedging instruments) — 335 — 335 Total other investments $ 17,411 $ 31,773 $ (1,800) $ 47,384 |
Schedule of Carrying Values of Private Investments and Unlisted Equity Securities Carried under Measurement Alternative | The following table presents the carrying values of the private investments and unlisted equity securities carried under the measurement alternative at September 30, 2022, and 2021, and the related adjustments recorded during the periods then ended. Nine months ended September 30 2022 2021 ($ in thousands) Carrying value (1) $ 61,081 $ 42,349 Upward carrying value changes (2) $ 11,260 $ 13,355 Downward carrying value changes and impairment (3) $ (1,676) $ (500) (1) The period-end carrying values reflect cumulative purchases and sales in addition to upward and downward carrying value changes. (2) The cumulative upward carrying value changes from inception to September 30, 2022, totaled $42.8 million. (3) The cumulative downward carrying value changes and impairments from inception to September 30, 2022, totaled $3.7 million. |
Assets Measured at Fair Value on a Nonrecurring Basis | The Company classifies these assets as Level 3 within the fair value hierarchy. The following table summarizes the periods between the most recent fair value measurement dates and September 30, 2022, for the private and unlisted equities measured at fair value on a nonrecurring basis: Less than 6 months 6 to 12 months Over 1 year Total ($ in thousands) Fair values measured on a nonrecurring basis $ 24,451 $ 17,080 $ 11,423 $ 52,954 |
LOSS AND LOSS ADJUSTMENT EXPE_2
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Insurance Loss Reserves [Abstract] | |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | At September 30, 2022 and December 31, 2021, loss and loss adjustment expense reserves were composed of the following: September 30, 2022 December 31, 2021 ($ in thousands) Case reserves $ 186,945 $ 190,220 IBNR 353,882 333,790 Total $ 540,827 $ 524,010 A summary of changes in outstanding loss and loss adjustment expense reserves for all lines of business consolidated for the nine months ended September 30, 2022 and 2021 is as follows: Consolidated 2022 2021 ($ in thousands) Gross balance at January 1 $ 524,010 $ 494,179 Less: Losses recoverable (11,100) (16,851) Net balance at January 1 512,910 477,328 Incurred losses related to: Current year 251,231 296,333 Prior years 1,558 (1,255) Total incurred 252,789 295,078 Paid losses related to: Current year (54,866) (96,442) Prior years (160,094) (146,545) Total paid (214,960) (242,987) Foreign currency revaluation (20,516) (1,722) Net balance at September 30 530,223 527,697 Add: Losses recoverable 10,604 13,082 Gross balance at September 30 $ 540,827 $ 540,779 The changes in the outstanding loss and loss adjustment expense reserves for health claims for the nine months ended September 30, 2022 and 2021 are as follows: Health 2022 2021 ($ in thousands) Gross balance at January 1 $ 9,938 $ 17,485 Less: Losses recoverable — — Net balance at January 1 9,938 17,485 Incurred losses related to: Current year 6,567 31,189 Prior years 3,552 (1,898) Total incurred 10,119 29,291 Paid losses related to: Current year (3,051) (20,224) Prior years (11,146) (13,824) Total paid (14,197) (34,048) Foreign currency revaluation — — Net balance at September 30 5,860 12,728 Add: Losses recoverable — — Gross balance at September 30 $ 5,860 $ 12,728 |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Stock by Class | The following table is a summary of ordinary shares issued and outstanding: Nine months ended September 30 Nine months ended September 30 2022 2021 Class A Class B Class A Class B Balance – beginning of period 27,589,731 6,254,715 28,260,075 6,254,715 Issue of ordinary shares, net of forfeitures 984,548 — 409,200 — Repurchase of ordinary shares (4,933) — (1,079,544) — Balance – end of period 28,569,346 6,254,715 27,589,731 6,254,715 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Activity for Unvested Restricted Share Awards and Employee Restricted Stock Units | The following table summarizes the activity for unvested outstanding restricted share awards during the nine months ended September 30, 2022: Performance Restricted Shares Service Restricted Shares Number of Weighted Number of Weighted Balance at December 31, 2021 193,149 $ 10.10 753,407 $ 8.68 Granted 601,213 6.82 356,422 7.02 Vested — — (197,002) 10.06 Forfeited — — (8,476) 7.67 Balance at September 30, 2022 794,362 $ 7.62 904,351 $ 7.73 Employee RSU activity during the nine months ended September 30, 2022, was as follows: Performance Restricted Stock Units Service Restricted Stock Units Number of Weighted Number of Weighted Balance at December 31, 2021 — $ — 154,134 $ 8.59 Granted 105,008 6.82 54,207 6.82 Vested — — (35,389) 10.84 Balance at September 30, 2022 105,008 $ 6.82 172,952 $ 7.58 |
Schedule of Activity for Employee and Director Stock Options | Employee and director stock option activity during the nine months ended September 30, 2022 was as follows: Number of Weighted Weighted Intrinsic value Weighted average remaining contractual term Balance at December 31, 2021 735,627 $ 22.35 $ 10.23 $ — 4.7 years Granted — — — — — Exercised — — — — — Forfeited — — — — — Expired (45,290) 23.80 11.04 — — Balance at September 30, 2022 690,337 $ 22.25 $ 10.18 $ — 4.2 years |
TAXATION (Tables)
TAXATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The following table sets forth our current and deferred income tax benefit (expense) on a consolidated basis for the nine months ended September 30, 2022 and 2021: Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 ($ in thousands) ($ in thousands) Current tax (expense) benefit $ (234) $ 323 $ (655) $ (3,240) Tax recovered 1,050 — 1,478 — Deferred tax (expense) benefit 170 — 428 — Decrease (increase) in deferred tax valuation allowance (170) (323) (428) (493) Income tax (expense) benefit $ 816 $ — $ 823 $ (3,733) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Letters of Credit Facilities | At September 30, 2022, the Company had one letter of credit facility, which automatically renews each year unless terminated by either party in accordance with the applicable required notice period: Maximum Facility Limit Termination Date Notice period required for termination ($ in thousands) Citibank Europe plc $ 275,000 August 20, 2023 120 days before the termination date |
Schedule of Commitment for Operating Lease Liabilities for Future Annual Periods | At September 30, 2022, the commitment for operating lease liabilities for future annual periods was as follows: Year ending December 31, ($ in thousands) 2022 $ 149 2023 611 2024 627 2025 644 2026 345 Thereafter — Total lease payments 2,376 Less Imputed Interest (280) Present value of lease liabilities $ 2,096 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Gross Premiums Written by Line of Business | Gross Premiums Written by Line of Business Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 ($ in thousands) ($ in thousands) Property Commercial $ 2,146 1.4 % $ 3,398 2.6 % $ 8,648 2.0 % $ 9,700 2.2 % Motor 206 0.1 6,103 4.8 768 0.2 24,537 5.6 Personal 17,669 11.4 3,631 2.8 49,425 11.3 10,318 2.3 Total Property 20,021 12.9 13,132 10.2 58,841 13.5 44,555 10.1 Casualty General Liability 13,798 8.9 7,376 5.7 40,523 9.3 10,749 2.4 Motor Liability 565 0.4 19,823 15.4 4,061 0.9 96,795 22.0 Professional Liability 242 0.2 154 0.1 496 0.1 302 0.1 Workers' Compensation 7,216 4.6 17,117 13.3 25,504 5.9 55,237 12.5 Multi-line 69,419 44.7 40,162 31.2 177,647 40.8 137,857 31.3 Total Casualty 91,240 58.8 84,632 65.7 248,231 57.0 300,940 68.4 Other Accident & Health 5,879 3.8 4,175 3.3 10,377 2.4 26,427 6.0 Financial 20,065 12.9 17,920 13.9 56,481 12.9 40,134 9.1 Marine 4,675 3.0 2,462 1.9 18,425 4.2 8,412 1.9 Other Specialty 13,266 8.6 6,414 5.0 43,457 10.0 19,781 4.5 Total Other 43,885 28.3 30,971 24.1 128,740 29.5 94,754 21.5 $ 155,146 100.0 % $ 128,735 100.0 % $ 435,812 100.0 % $ 440,249 100.0 % |
Schedule of Gross Premiums Written by Geographic Area of Risks Insured | Gross Premiums Written by Geographic Area of Risks Insured Three months ended September 30 Nine months ended September 30 2022 2021 2022 2021 ($ in thousands) ($ in thousands) U.S. and Caribbean $ 72,105 46.5 % $ 67,087 52.1 % $ 224,324 51.5 % $ 258,849 58.8 % Worldwide (1) 79,512 51.3 59,616 46.3 196,197 45.0 174,470 39.6 Europe (2) (1,797) (1.2) 1,483 1.2 2,962 0.7 2,787 0.6 Asia 5,326 3.4 549 0.4 12,329 2.8 4,143 1.0 $ 155,146 100.0 % $ 128,735 100.0 % $ 435,812 100.0 % $ 440,249 100.0 % (1) “Worldwide” is composed of contracts that reinsure risks in more than one geographic area and may include risks in the U.S. (2) The negative balance represents the reversal of premiums due to premium adjustments, termination of contracts, or premium returned upon novation or commutation of contracts. |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 32,278 | $ 76,307 | ||
Restricted cash and cash equivalents | 648,897 | 634,794 | ||
Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows | $ 681,175 | $ 711,101 | $ 729,922 | $ 754,306 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle | |||||
Reinsurance balances receivable | $ 473,564 | $ 473,564 | $ 405,365 | ||
Allowance for expected credit losses | 89 | 89 | 89 | ||
Deposit contracts, assets | 3,200 | 3,200 | 3,500 | ||
Deposit contracts, liabilities | 13,700 | 13,700 | 18,600 | ||
Foreign currency transaction loss | (5,000) | $ (600) | (10,400) | $ (1,400) | |
Convertible senior notes payable | 93,446 | 93,446 | 98,057 | ||
Decrease in shareholders' equity | (466,952) | $ (450,514) | (466,952) | $ (450,514) | (475,663) |
Accounting Standards Update 2020-06 | Cumulative Effect, Period of Adoption, Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle | |||||
Convertible senior notes payable | 2,500 | ||||
Decrease in shareholders' equity | 2,500 | ||||
Cedents | |||||
New Accounting Pronouncements or Change in Accounting Principle | |||||
Reinsurance balances receivable | $ 303,100 | $ 303,100 | $ 246,900 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Interest Income and Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accounting Policies [Abstract] | ||||
Deposit interest income | $ 0 | $ 0 | $ 0 | $ 0 |
Deposit interest expense | (6,148) | (38) | (6,373) | (2,957) |
Deposit interest income/(expense), net | $ (6,148) | $ (38) | $ (6,373) | $ (2,957) |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Net Income (Loss) and Weighted Average Number of Shares (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator for earnings per share | ||||
Net income (loss) - basic | $ (18,469) | $ (13,853) | $ (9,408) | $ (6,726) |
Add: interest on convertible notes | 0 | 0 | 0 | 0 |
Net income (loss) - diluted | $ (18,469) | $ (13,853) | $ (9,408) | $ (6,726) |
Denominator for earnings per share | ||||
Weighted average shares outstanding - basic (in shares) | 33,127,384 | 32,929,097 | 33,119,814 | 33,507,060 |
Effect of dilutive employee and director share-based awards (in shares) | 0 | 0 | 0 | 0 |
Effect of settling the convertible debt in shares (in shares) | 0 | 0 | 0 | 0 |
Weighted average shares outstanding - diluted (in shares) | 33,127,384 | 32,929,097 | 33,119,814 | 33,507,060 |
Earnings (loss) per Class A and Class B Ordinary share: | ||||
Basic (in dollars per share) | $ (0.56) | $ (0.42) | $ (0.28) | $ (0.20) |
Diluted (in dollars per share) | $ (0.56) | $ (0.42) | $ (0.28) | $ (0.20) |
Anti-dilutive stock options outstanding | ||||
Denominator for earnings per share | ||||
Shares potentially issuable in connection with convertible notes and Anti-dilutive stock options outstanding (in shares) | 690,337 | 735,627 | 690,337 | 735,627 |
Participating securities excluded from calculation of loss per share | ||||
Denominator for earnings per share | ||||
Shares potentially issuable in connection with convertible notes and Anti-dilutive stock options outstanding (in shares) | 848,841 | 946,556 | 848,841 | 946,556 |
Shares potentially issuable in connection with convertible notes | ||||
Denominator for earnings per share | ||||
Shares potentially issuable in connection with convertible notes and Anti-dilutive stock options outstanding (in shares) | 5,686,747 | 0 | 5,773,889 | 0 |
INVESTMENT IN RELATED PARTY I_3
INVESTMENT IN RELATED PARTY INVESTMENT FUND - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | |||||
LPA, investment cap percentage | 50% | ||||
Revenue from related parties | $ 8,521 | $ (6,214) | $ 24,474 | $ (4,196) | |
SILP General Partner | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investment, ownership interest (as a percent) | 24.70% | 24.70% | 21.80% | ||
Limited Partnership Agreement | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Asset redemption notice to general partner | 3 days | ||||
Solasglas Investments, LP (SILP) | GLRE Limited Partners | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments, fair value | $ 195,200 | $ 195,200 | $ 183,600 | ||
Equity method investment, ownership interest (as a percent) | 75.30% | 75.30% | 78.20% |
INVESTMENT IN RELATED PARTY I_4
INVESTMENT IN RELATED PARTY INVESTMENT FUND - Financial Information of Investment (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Investments, at fair value | $ 195,199 | $ 183,591 |
Total assets | 1,524,543 | 1,427,494 |
Liabilities | ||
Other liabilities | (4,927) | (7,164) |
Total liabilities | (1,057,591) | (951,831) |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Solasglas Investments, LP (SILP) | ||
Liabilities | ||
Net Assets | 195,199 | 183,591 |
Solasglas Investments, LP (SILP) | Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||
Assets | ||
Investments, at fair value | 258,386 | 297,937 |
Derivative contracts, at fair value | 15,727 | 2,542 |
Due from brokers | 149,071 | 84,775 |
Interest and dividends receivable | 64 | 28 |
Total assets | 423,248 | 385,282 |
Liabilities | ||
Investments sold short, at fair value | (153,892) | (132,360) |
Derivative contracts, at fair value | (9,739) | (7,253) |
Capital withdrawals payable | 0 | (10,000) |
Due to brokers | (10) | 0 |
Interest and dividends payable | (295) | (580) |
Other liabilities | (201) | (358) |
Total liabilities | (164,137) | (150,551) |
Net Assets | $ 259,111 | $ 234,731 |
INVESTMENT IN RELATED PARTY I_5
INVESTMENT IN RELATED PARTY INVESTMENT FUND - Summarized Statements of Assets, Liabilities and Net Assets of SILP (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Expenses | ||||
Total expenses | $ (146,008) | $ (153,124) | $ (391,401) | $ (430,119) |
Net investment income (loss) | 3,038 | 10,303 | 11,978 | 28,999 |
Realized and change in unrealized gains (losses) | ||||
Net income (loss) | (18,469) | (13,853) | (9,408) | (6,726) |
GLRE limited partners’ share of net income (loss) | 8,521 | (6,214) | 24,474 | (4,196) |
Management fees | 901 | 883 | 2,686 | 2,632 |
Performance allocation | 947 | (224) | 2,719 | 0 |
Total | 1,848 | 659 | 5,405 | 2,632 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Solasglas Investments, LP (SILP) | ||||
Realized and change in unrealized gains (losses) | ||||
Net income (loss) | 8,521 | (6,214) | 24,474 | (4,196) |
Solasglas Investments, LP (SILP) | Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||||
Investment income | ||||
Dividend income (net of withholding taxes) | 305 | 146 | 928 | 509 |
Interest income | 693 | 51 | 1,028 | 770 |
Total Investment income | 998 | 197 | 1,956 | 1,279 |
Expenses | ||||
Management fee | (901) | (883) | (2,686) | (2,632) |
Interest | (464) | (205) | (1,199) | (874) |
Dividends | (356) | (306) | (938) | (852) |
Professional fees and other | (262) | (227) | (756) | (786) |
Total expenses | (1,983) | (1,621) | (5,579) | (5,144) |
Net investment income (loss) | (985) | (1,424) | (3,623) | (3,865) |
Realized and change in unrealized gains (losses) | ||||
Net realized gain (loss) | 7,221 | (1,411) | 58,196 | (14,809) |
Net change in unrealized appreciation (depreciation) | 6,464 | (5,437) | (17,027) | 12,143 |
Net gain (loss) on investment transactions | 13,685 | (6,848) | 41,169 | (2,666) |
Net income (loss) | $ 12,700 | $ (8,272) | $ 37,546 | $ (6,531) |
FINANCIAL INSTRUMENTS - Other I
FINANCIAL INSTRUMENTS - Other Investments (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Total other investments | ||
Debt and Equity Securities, FV-NI | ||
Cost | $ 26,037 | $ 17,411 |
Unrealized gains | 42,412 | 31,773 |
Unrealized losses | (3,368) | (1,800) |
Fair value / carrying value | 65,081 | 47,384 |
Private investments and unlisted equities | ||
Debt and Equity Securities, FV-NI | ||
Cost | 22,037 | 17,411 |
Unrealized gains | 42,412 | 31,438 |
Unrealized losses | (3,368) | (1,800) |
Fair value / carrying value | 61,081 | 47,049 |
Convertible debt securities | ||
Debt and Equity Securities, FV-NI | ||
Cost | 1,000 | |
Unrealized gains | 0 | |
Unrealized losses | 0 | |
Fair value / carrying value | 1,000 | |
Certificates of deposit | ||
Debt and Equity Securities, FV-NI | ||
Cost | 3,000 | |
Unrealized gains | 0 | |
Unrealized losses | 0 | |
Fair value / carrying value | $ 3,000 | |
Derivative financial instruments (not designated as hedging instruments) | ||
Debt and Equity Securities, FV-NI | ||
Cost | 0 | |
Unrealized gains | 335 | |
Unrealized losses | 0 | |
Fair value / carrying value | $ 335 |
FINANCIAL INSTRUMENTS - Nonrecu
FINANCIAL INSTRUMENTS - Nonrecurring Fair Value Disclosures (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 30, 2021 |
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Upward carrying value changes | $ 42,800 | |
Downward carrying value changes and impairment | (3,700) | |
Fair Value, Nonrecurring | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value | ||
Carrying value | 61,081 | $ 42,349 |
Upward carrying value changes | 11,260 | 13,355 |
Downward carrying value changes and impairment | $ (1,676) | $ (500) |
FINANCIAL INSTRUMENTS - Narrati
FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Other investments | $ 65,081 | $ 47,384 |
Private Investments and Unlisted Equity Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Other investments | 8,100 | 6,500 |
Private Investments and Unlisted Equity Securities | Fair Value, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Fair value / carrying value | $ 53,000 | $ 40,500 |
FINANCIAL INSTRUMENTS - Assets
FINANCIAL INSTRUMENTS - Assets Measured at Fair Value On a Nonrecurring Basis (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | |
Fair values measured on a nonrecurring basis | $ 52,954 |
Less than 6 months | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | |
Fair values measured on a nonrecurring basis | 24,451 |
6 to 12 months | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | |
Fair values measured on a nonrecurring basis | 17,080 |
Over 1 year | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | |
Fair values measured on a nonrecurring basis | $ 11,423 |
LOSS AND LOSS ADJUSTMENT EXPE_3
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES - Liability for Unpaid Claims and Claims Adjustment Expense (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Liability for Claims and Claims Adjustment Expense | ||||
Case reserves | $ 186,945 | $ 190,220 | ||
IBNR | 353,882 | 333,790 | ||
Total | 540,827 | $ 540,779 | 524,010 | $ 494,179 |
Liability for Unpaid Claims and Claims Adjustment Expense | ||||
Gross balance at January 1 | 524,010 | 494,179 | ||
Less: Losses recoverable | (11,100) | (16,851) | ||
Net balance at January 1 | 512,910 | 477,328 | ||
Incurred losses related to: | ||||
Current year | 251,231 | 296,333 | ||
Prior years | 1,558 | (1,255) | ||
Total incurred | 252,789 | 295,078 | ||
Paid losses related to: | ||||
Current year | (54,866) | (96,442) | ||
Prior years | (160,094) | (146,545) | ||
Total paid | (214,960) | (242,987) | ||
Foreign currency revaluation | (20,516) | (1,722) | ||
Net balance at September 30 | 530,223 | 527,697 | ||
Add: Losses recoverable | 10,604 | 13,082 | 11,100 | |
Gross balance at September 30 | 540,827 | 540,779 | ||
Estimate of net losses, change | 1,558 | (1,255) | ||
Health | ||||
Liability for Claims and Claims Adjustment Expense | ||||
Total | 5,860 | 12,728 | 9,938 | 17,485 |
Liability for Unpaid Claims and Claims Adjustment Expense | ||||
Gross balance at January 1 | 9,938 | 17,485 | ||
Less: Losses recoverable | $ 0 | $ 0 | ||
Net balance at January 1 | 9,938 | 17,485 | ||
Incurred losses related to: | ||||
Current year | 6,567 | 31,189 | ||
Prior years | 3,552 | (1,898) | ||
Total incurred | 10,119 | 29,291 | ||
Paid losses related to: | ||||
Current year | (3,051) | (20,224) | ||
Prior years | (11,146) | (13,824) | ||
Total paid | (14,197) | (34,048) | ||
Foreign currency revaluation | 0 | 0 | ||
Net balance at September 30 | 5,860 | 12,728 | ||
Add: Losses recoverable | 0 | 0 | ||
Gross balance at September 30 | 5,860 | 12,728 | ||
Estimate of net losses, change | 3,552 | $ (1,898) | ||
Russian-Ukrainian Conflict | ||||
Liability for Claims and Claims Adjustment Expense | ||||
Loss adjustment expense reserves | 13,600 | |||
Hurricane Ian | ||||
Liability for Claims and Claims Adjustment Expense | ||||
Loss adjustment expense reserves | $ 19,500 |
RETROCESSION (Details)
RETROCESSION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Ceded Credit Risk | ||||||
Ceded premiums earned | $ 4,400,000 | $ 8,400,000 | ||||
Loss and loss expenses recovered and recoverable | 2,500,000 | $ 0 | 2,500,000 | $ (100,000) | ||
Loss and loss adjustment expenses recoverable | $ 11,100,000 | $ 16,851,000 | ||||
Loss and loss adjustment expenses recoverable, allowance | 47,000 | 47,000 | 47,000 | |||
AM Best, A- Rating | ||||||
Ceded Credit Risk | ||||||
Loss and loss adjustment expenses recoverable | 2,700,000 | 2,700,000 | 2,800,000 | |||
Unsecured | Unrated | ||||||
Ceded Credit Risk | ||||||
Loss and loss adjustment expenses recoverable | 7,900,000 | 7,900,000 | 8,400,000 | |||
Secured | Unrated | ||||||
Ceded Credit Risk | ||||||
Loss and loss adjustment expenses recoverable | $ 6,900,000 | $ 6,900,000 | $ 8,200,000 |
SENIOR CONVERTIBLE NOTES (Detai
SENIOR CONVERTIBLE NOTES (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Nov. 02, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Aug. 07, 2018 | |
Debt Instrument [Line Items] | |||||||
Repurchased and cancelled shares amount | $ 6,600 | $ 6,600 | |||||
Convertible senior notes payable | $ 93,446 | $ 93,446 | $ 98,057 | ||||
Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Repurchased of ordinary shares (in shares) | 13.8 | ||||||
Senior Notes | Senior Unsecured Convertible Notes | |||||||
Debt Instrument [Line Items] | |||||||
Convertible debt, amount | $ 100,000 | ||||||
Debt interest rate (in percent) | 4% | ||||||
Debt conversion price (in dollars per share) | $ 17.19 | $ 17.19 | |||||
Effective interest rate (in percent) | 6% | ||||||
Unamortized debt issuance expense | $ 600 | $ 600 | 1,000 | ||||
Accrued interest | 600 | 600 | |||||
Convertible senior notes payable | 93,400 | 93,400 | 98,100 | ||||
Fair value of debt | 90,200 | 90,200 | $ 97,500 | ||||
Recognized interest expense | 1,100 | $ 1,600 | 3,400 | $ 4,700 | |||
Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt, maturity, remainder of fiscal year | 0 | 0 | |||||
Long-term debt, maturity, year one | $ 97,200 | $ 97,200 |
SHARE CAPITAL - Narrative (Deta
SHARE CAPITAL - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Oct. 29, 2020 | Oct. 28, 2020 | |
Class of Stock | |||||
Stock repurchase program, authorized amount | $ 25 | ||||
Class A | |||||
Class of Stock | |||||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | |||
Shares authorized for issuance in relation to share purchase options granted to service provider (in shares) | 3,000,000 | ||||
Shares authorized for the company's stock incentive plan (in shares) | 8,000,000 | 5,000,000 | |||
Shares available for future issuance (in shares) | 2,011,426 | 3,128,276 | |||
Repurchase of ordinary shares (in shares) | 4,933 | 1,079,544 | |||
Class B | |||||
Class of Stock | |||||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 | |||
Repurchase of ordinary shares (in shares) | 0 | 0 |
SHARE CAPITAL - Stock by Class
SHARE CAPITAL - Stock by Class (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Class A | ||
Increase (Decrease) in Stockholders' Equity | ||
Balance – beginning of period (in shares) | 27,589,731 | 28,260,075 |
Issue of ordinary shares, net of forfeitures (in shares) | 984,548 | 409,200 |
Repurchase of ordinary shares (in shares) | (4,933) | (1,079,544) |
Balance – end of period (in shares) | 28,569,346 | 27,589,731 |
Class B | ||
Increase (Decrease) in Stockholders' Equity | ||
Balance – beginning of period (in shares) | 6,254,715 | 6,254,715 |
Issue of ordinary shares, net of forfeitures (in shares) | 0 | 0 |
Repurchase of ordinary shares (in shares) | 0 | 0 |
Balance – end of period (in shares) | 6,254,715 | 6,254,715 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 0 | ||
Exercised (in shares) | 0 | ||
Expired (in shares) | 45,290 | ||
General and Administrative Expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation expense, net of forfeiture reversals | $ 3,300 | $ 2,400 | |
Chief Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted shares | $ 0 | $ 0 | |
Employee and Director Restricted Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cliff vesting period after date of issuance | 3 years | ||
Cliff vesting percentage after date of issuance (in percent) | 50% | ||
Forfeited (in shares) | 8,476 | 20,592 | |
Stock-based compensation expense | $ 26 | $ 100 | |
Stock based compensation expense, net of forfeiture reversals | 2,600 | 1,800 | |
Unrecognized compensation costs related to non-vested restricted shares | $ 4,400 | $ 2,700 | |
Weighted average period for recognition | 1 year 7 months 6 days | 1 year 9 months 18 days | |
Total fair value of restricted shares vested | $ 2,000 | $ 1,600 | |
Employee and Director Restricted Shares | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cliff vesting percentage after date of issuance (in percent) | 25% | ||
Employee and Director Restricted Shares | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cliff vesting percentage after date of issuance (in percent) | 100% | ||
Employee and Director Restricted Shares | Chief Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cliff vesting period after date of issuance | 5 years | ||
Employee and Director Restricted Shares | Class A | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted shares issued pursuant to stock incentive plan (in shares) | 849,872 | 334,312 | |
Employee and Director Restricted Shares | Class A | Non Employee Director | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted shares issued pursuant to stock incentive plan (in shares) | 107,763 | 74,769 | |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cliff vesting period after date of issuance | 3 years | ||
Forfeited (in shares) | 0 | ||
Stock based compensation expense, net of forfeiture reversals | $ 500 | $ 300 | |
Weighted average period for recognition | 1 year 7 months 6 days | 1 year 9 months 18 days | |
Number of shares issued to employees RSUs (in shares) | 159,215 | 58,123 | |
Total compensation cost related to non-vested options not yet recognized | $ 700 | $ 500 | |
RSUs | Class A | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Conversion ratio (in shares) | 1 | ||
Employee and Director Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation expense, net of forfeiture reversals | $ 200 | $ 300 | |
Weighted average period for recognition | 9 months 18 days | 1 year 2 months 12 days | |
Total compensation cost related to non-vested options not yet recognized | $ 100 | $ 300 | |
Employee and Director Stock Options | Class A | Chief Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 0 | 0 | |
Exercised (in shares) | 0 | 0 | |
Expired (in shares) | 45,290 | 45,290 | |
Performance RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cliff vesting period after date of issuance | 3 years | ||
Cliff vesting percentage after date of issuance (in percent) | 50% | ||
Unvested performance restricted shares outstanding (in shares) | 105,008 | 0 | |
Unvested weighted average grant date fair value (in dollars per share) | $ 6.82 | $ 0 | |
Number of shares issued to employees RSUs (in shares) | 105,008 | ||
Performance RSUs | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cliff vesting percentage after date of issuance (in percent) | 25% | ||
Performance RSUs | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cliff vesting percentage after date of issuance (in percent) | 100% | ||
Performance Restricted Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested performance restricted shares outstanding (in shares) | 794,362 | 193,149 | |
Unvested weighted average grant date fair value (in dollars per share) | $ 7.62 | $ 10.10 | |
Forfeited (in shares) | 0 | ||
Number of shares issued to employees RSUs (in shares) | 601,213 | ||
Performance Restricted Shares | Chief Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested performance restricted shares outstanding (in shares) | 193,149 | ||
Unvested weighted average grant date fair value (in dollars per share) | $ 10.10 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Performance Restricted Shares | |
Number of non-vested RSUs | |
Beginning balance (in shares) | shares | 193,149 |
Granted (in shares) | shares | 601,213 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Ending balance (in shares) | shares | 794,362 |
Weighted average grant date fair value | |
Beginning balance (in dollars per share) | $ / shares | $ 10.10 |
Granted (in dollars per share) | $ / shares | 6.82 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | $ 7.62 |
Service Restricted Shares | |
Number of non-vested RSUs | |
Beginning balance (in shares) | shares | 753,407 |
Granted (in shares) | shares | 356,422 |
Vested (in shares) | shares | (197,002) |
Forfeited (in shares) | shares | (8,476) |
Ending balance (in shares) | shares | 904,351 |
Weighted average grant date fair value | |
Beginning balance (in dollars per share) | $ / shares | $ 8.68 |
Granted (in dollars per share) | $ / shares | 7.02 |
Vested (in dollars per share) | $ / shares | 10.06 |
Forfeited (in dollars per share) | $ / shares | 7.67 |
Ending balance (in dollars per share) | $ / shares | $ 7.73 |
SHARE-BASED COMPENSATION - Re_2
SHARE-BASED COMPENSATION - Restricted Stock Units (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Performance Restricted Stock Units | |
Number of non-vested RSUs | |
Beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 105,008 |
Vested (in shares) | shares | 0 |
Ending balance (in shares) | shares | 105,008 |
Weighted average grant date fair value | |
Beginning balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 6.82 |
Vested (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | $ 6.82 |
Service Restricted Stock Units | |
Number of non-vested RSUs | |
Beginning balance (in shares) | shares | 154,134 |
Granted (in shares) | shares | 54,207 |
Vested (in shares) | shares | (35,389) |
Ending balance (in shares) | shares | 172,952 |
Weighted average grant date fair value | |
Beginning balance (in dollars per share) | $ / shares | $ 8.59 |
Granted (in dollars per share) | $ / shares | 6.82 |
Vested (in dollars per share) | $ / shares | 10.84 |
Ending balance (in dollars per share) | $ / shares | $ 7.58 |
SHARE-BASED COMPENSATION - Empl
SHARE-BASED COMPENSATION - Employee and Director Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Number of options outstanding | ||
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | |
Forfeitures (in shares) | 0 | |
Expired (in shares) | (45,290) | |
Weighted average exercise price | ||
Grants (in dollars per share) | $ 0 | |
Exercises (in dollars per share) | 0 | |
Forfeitures (in dollars per share) | 0 | |
Expirations (in dollars per share) | 23.80 | |
Weighted average grant date fair value | ||
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 0 | |
Expired (in dollars per share) | $ 11.04 | |
Intrinsic value | $ 0 | $ 0 |
Anti-dilutive stock options outstanding | ||
Number of options outstanding | ||
Options outstanding (in shares) | 690,337 | 735,627 |
Weighted average exercise price | ||
Balance at beginning of period (in dollars per share) | $ 22.35 | |
Balance at end of period (in dollars per share) | 22.25 | $ 22.35 |
Weighted average grant date fair value | ||
Balance at beginning of period (in dollars per share) | 10.23 | |
Balance at end of period (in dollars per share) | $ 10.18 | $ 10.23 |
Weighted average remaining contractual term | 4 years 2 months 12 days | 4 years 8 months 12 days |
TAXATION - Narrative (Details)
TAXATION - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Income Tax Examination | ||
Deferred tax asset valuation allowance | $ 3.2 | $ 2.7 |
Other Assets | ||
Income Tax Examination | ||
Gross deferred tax asset | $ 3.7 | $ 3.2 |
TAXATION - Components of Income
TAXATION - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Current tax (expense) benefit | $ (234) | $ 323 | $ (655) | $ (3,240) |
Tax recovered | 1,050 | 0 | 1,478 | 0 |
Deferred tax (expense) benefit | 170 | 0 | 428 | 0 |
Decrease (increase) in deferred tax valuation allowance | (170) | (323) | (428) | (493) |
Income tax (expense) benefit | $ 816 | $ 0 | $ 823 | $ (3,733) |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) shares in Millions | 9 Months Ended | ||
Jan. 01, 2019 | Sep. 01, 2018 | Sep. 30, 2022 | |
Affiliated Entity | Green Bricks Partners Inc (GRBK) | Solasglas Investments, LP (SILP) | |||
Related Party Transaction | |||
Common stock held (in shares) | 2.7 | ||
Affiliated Entity | Green Bricks Partners Inc (GRBK) | |||
Related Party Transaction | |||
Ownership percentage (in percent) | 38% | ||
Board of Directors Chairman | Limited Partnership Agreement | |||
Related Party Transaction | |||
Performance compensation reduced rate (in percent) | 10% | ||
Performance compensation full rate (in percent) | 20% | ||
Performance compensation reduced rate (in percent) | 10% | ||
Loss carry forward recoupment required (in percent) | 150% | ||
Board of Directors Chairman | Investment Advisory Agreement | |||
Related Party Transaction | |||
Investment management fee rate - monthly (in percent) | 0.125% | ||
Investment management fee rate - annual (in percent) | 1.50% | ||
Automatic agreement extension, term (in years) | 3 years | ||
Board of Directors Chairman | Service Agreement | |||
Related Party Transaction | |||
Investor relations monthly fee | $ 5,000 | ||
Contract termination prior notice period (in days) | 30 days | ||
Board of Directors Chairman | Collateral Assets Investment Management Agreement | |||
Related Party Transaction | |||
Contract termination prior notice period (in days) | 30 days |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) facility | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) facility | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Line of Credit Facility | |||||
Number of credit facilities | facility | 1 | 1 | |||
Aggregate amount of letters of credit issued | $ 180,200 | $ 180,200 | $ 136,800 | ||
Collateral held in trust | $ 468,000 | $ 468,000 | 497,100 | ||
Weighted-average remaining lease term on operating leases | 4 years | 4 years | |||
Weighted-average discount rate on operating leases (as a percent) | 6% | 6% | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets | Other Assets | |||
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities | Other Liabilities | |||
Operating lease right of use asset | $ 2,000 | $ 2,000 | |||
Present value of lease liabilities | 2,096 | 2,096 | |||
Operating lease expense | 200 | $ 100 | 500 | $ 200 | |
Letter of Credit | |||||
Line of Credit Facility | |||||
Cash and cash equivalents | $ 180,900 | $ 180,900 | $ 137,600 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Letters of Credit Facilities (Details) - Citibank Europe plc - Facility | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Line of Credit Facility | |
Maximum Facility Limit | $ 275,000,000 |
Notice period required for termination | 120 days |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Commitments and Contingencies, Fiscal Year Maturity Schedule (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Year ending December 31, | |
2022 | $ 149 |
2023 | 611 |
2024 | 627 |
2025 | 644 |
2026 | 345 |
Thereafter | 0 |
Total lease payments | 2,376 |
Less Imputed Interest | (280) |
Present value of lease liabilities | $ 2,096 |
SEGMENT REPORTING - Gross Premi
SEGMENT REPORTING - Gross Premiums Written by Line of Business (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Segment Reporting Information | ||||
Number of operating segments | segment | 1 | |||
Gross premiums written | $ 155,146 | $ 128,735 | $ 435,812 | $ 440,249 |
Gross premiums written (in percent) | 100% | 100% | 100% | 100% |
Total Property | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 20,021 | $ 13,132 | $ 58,841 | $ 44,555 |
Gross premiums written (in percent) | 12.90% | 10.20% | 13.50% | 10.10% |
Commercial | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 2,146 | $ 3,398 | $ 8,648 | $ 9,700 |
Gross premiums written (in percent) | 1.40% | 2.60% | 2% | 2.20% |
Motor | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 206 | $ 6,103 | $ 768 | $ 24,537 |
Gross premiums written (in percent) | 0.10% | 4.80% | 0.20% | 5.60% |
Personal | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 17,669 | $ 3,631 | $ 49,425 | $ 10,318 |
Gross premiums written (in percent) | 11.40% | 2.80% | 11.30% | 2.30% |
Total Casualty | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 91,240 | $ 84,632 | $ 248,231 | $ 300,940 |
Gross premiums written (in percent) | 58.80% | 65.70% | 57% | 68.40% |
General Liability | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 13,798 | $ 7,376 | $ 40,523 | $ 10,749 |
Gross premiums written (in percent) | 8.90% | 5.70% | 9.30% | 2.40% |
Motor Liability | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 565 | $ 19,823 | $ 4,061 | $ 96,795 |
Gross premiums written (in percent) | 0.40% | 15.40% | 0.90% | 22% |
Professional Liability | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 242 | $ 154 | $ 496 | $ 302 |
Gross premiums written (in percent) | 0.20% | 0.10% | 0.10% | 0.10% |
Workers' Compensation | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 7,216 | $ 17,117 | $ 25,504 | $ 55,237 |
Gross premiums written (in percent) | 4.60% | 13.30% | 5.90% | 12.50% |
Multi-line | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 69,419 | $ 40,162 | $ 177,647 | $ 137,857 |
Gross premiums written (in percent) | 44.70% | 31.20% | 40.80% | 31.30% |
Total Other | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 43,885 | $ 30,971 | $ 128,740 | $ 94,754 |
Gross premiums written (in percent) | 28.30% | 24.10% | 29.50% | 21.50% |
Accident & Health | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 5,879 | $ 4,175 | $ 10,377 | $ 26,427 |
Gross premiums written (in percent) | 3.80% | 3.30% | 2.40% | 6% |
Financial | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 20,065 | $ 17,920 | $ 56,481 | $ 40,134 |
Gross premiums written (in percent) | 12.90% | 13.90% | 12.90% | 9.10% |
Marine | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 4,675 | $ 2,462 | $ 18,425 | $ 8,412 |
Gross premiums written (in percent) | 3% | 1.90% | 4.20% | 1.90% |
Other Specialty | ||||
Segment Reporting Information | ||||
Gross premiums written | $ 13,266 | $ 6,414 | $ 43,457 | $ 19,781 |
Gross premiums written (in percent) | 8.60% | 5% | 10% | 4.50% |
SEGMENT REPORTING - Gross Pre_2
SEGMENT REPORTING - Gross Premiums Written by Geographic Area of Risks Insured (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue from External Customer | ||||
Gross premiums written | $ 155,146 | $ 128,735 | $ 435,812 | $ 440,249 |
Gross premiums written (in percent) | 100% | 100% | 100% | 100% |
U.S. and Caribbean | ||||
Revenue from External Customer | ||||
Gross premiums written | $ 72,105 | $ 67,087 | $ 224,324 | $ 258,849 |
Gross premiums written (in percent) | 46.50% | 52.10% | 51.50% | 58.80% |
Worldwide | ||||
Revenue from External Customer | ||||
Gross premiums written | $ 79,512 | $ 59,616 | $ 196,197 | $ 174,470 |
Gross premiums written (in percent) | 51.30% | 46.30% | 45% | 39.60% |
Europe (2) | ||||
Revenue from External Customer | ||||
Gross premiums written | $ (1,797) | $ 1,483 | $ 2,962 | $ 2,787 |
Gross premiums written (in percent) | (1.20%) | 1.20% | 0.70% | 0.60% |
Asia | ||||
Revenue from External Customer | ||||
Gross premiums written | $ 5,326 | $ 549 | $ 12,329 | $ 4,143 |
Gross premiums written (in percent) | 3.40% | 0.40% | 2.80% | 1% |