Conferencia de resultados de Greenlight Capital Re (GLRE) del T3 de 2026: el ratio combinado alcanza el 90,5%

Puntos clave

• Greenlight Capital Re (NASDAQ: GLRE) informó de un beneficio neto en el tercer trimestre de 2026 de 3,2 millones de dólares, o 0,10 dólares por acción diluida. El beneficio neto en lo que va de año alcanzó los 9,4 millones de dólares, o 0,28 dólares por acción diluida.
• El resultado de suscripción fue de 14,6 millones de dólares, con una ratio combinada del 90,5%. El resultado reflejó la rentabilidad subyacente, la ausencia de nuevas catástrofes o grandes pérdidas y una reducción de 6 millones de dólares en las reservas vinculadas a eventos específicos en Oriente Medio.
• Open Markets se mantuvo como el mayor contribuyente al resultado de suscripción, registrando una ratio combinada del 87,9% y un resultado de suscripción de 15,2 millones de dólares. Las primas netas emitidas cayeron un 19% hasta los 114,2 millones de dólares, ya que la compañía respondió a unas condiciones de mercado más blandas.
• Las primas brutas emitidas de Innovations aumentaron un 46% interanual hasta los 43 millones de dólares, mientras que las primas netas devengadas subieron un 34% hasta los 28,1 millones de dólares. Su ratio combinada aumentó hasta el 98,2%, incluyendo 7,6 puntos de desarrollo adverso de las reservas de ejercicios anteriores.
• La cartera de Solasglas registró una rentabilidad negativa del 3,3% durante el trimestre, lo que se vio compensado en parte por 10,5 millones de dólares de otros ingresos por inversiones. Posteriormente, Solasglas obtuvo una rentabilidad del 2,3% en octubre, situando su rendimiento acumulado en lo que va de 2026 en un nivel plano.
• GLRE recompró el 5,4% de sus acciones en circulación por 30,5 millones de dólares desde principios de 2026 hasta octubre. A la empresa le quedaban 24,8 millones de dólares disponibles en su programa de recompra autorizado.

Datos financieros clave

Rendimiento operativo y del negocio

Open Markets

Open Markets generó un beneficio antes de impuestos de 19,5 millones de dólares, compuesto por 15,2 millones de dólares de resultado de suscripción y 4,3 millones de dólares de ingresos por inversiones. La ratio combinada del segmento fue del 87,9%, frente al 84,5% del año anterior.

Las primas netas emitidas disminuyeron un 19% hasta los 114,2 millones de dólares, mientras que las primas netas devengadas cayeron un 13%. La directiva atribuyó el descenso a unas estimaciones de primas más bajas en los contratos proporcionales de líneas especializadas y daños materiales, así como a una menor exposición derivada del negocio de responsabilidad civil no renovado. Las primas brutas emitidas de Open Markets cayeron un 10,4%, ya que GLRE aplicó disciplina de ciclo en un entorno de precios más blandos.

La ratio de siniestralidad mejoró en 1,9 puntos porcentuales, impulsada por el desarrollo favorable de las reservas de ejercicios anteriores y la liberación de reservas vinculadas al conflicto de Oriente Medio. Esto se vio compensado en parte por una mayor siniestralidad ordinaria en el negocio especializado. La ratio de costes de adquisición aumentó 4,1 puntos debido principalmente a reajustes de comisiones variables, mientras que la ratio de gastos se incrementó 1,1 puntos hasta el 4,9%.

Innovations

Innovations registró un beneficio antes de impuestos de 5,8 millones de dólares, que incluyó 0,5 millones de dólares de resultado de suscripción y 6 millones de dólares de ingresos por inversiones, compensados en parte por 0,6 millones de dólares de otros gastos.

Las primas brutas emitidas aumentaron un 46% hasta los 43 millones de dólares, impulsadas por nuevos negocios y una mayor exposición en contratos existentes de multirriesgo y líneas financieras. Las primas netas devengadas aumentaron un 34% hasta los 28,1 millones de dólares a medida que se expandieron todas las líneas de negocio.

La ratio combinada aumentó al 98,2% desde el 96,8%. La ratio de siniestralidad se incrementó en 13,5 puntos, principalmente debido a 7,6 puntos de desarrollo adverso de las reservas de ejercicios anteriores. La ratio de costes de adquisición mejoró 10,1 puntos gracias a ajustes en las comisiones variables, mientras que la ratio de gastos mejoró 2 puntos, ya que el crecimiento de las primas superó al de los gastos.

GLRE también anunció una alianza estratégica con Hippo Holdings. Hippo podrá coinvertir con la unidad Innovations en inversiones en agencias de suscripción (MGA) en etapas iniciales, mientras que Spinnaker Insurance Company actuará como la entidad empaquetadora (fronting carrier) admitida preferente de GLRE en EE. UU. para los programas coinvertidos elegibles. Asimismo, Lloyd's ha aprobado la transición del Sindicato 3456 a un sindicato completo.

Cartera de inversiones y gestión del capital

La cartera de Solasglas retrocedió un 3,3% en el 3T. El mayor factor adverso fue la posición macro en futuros sobre el SOFR, que reflejaba la perspectiva de que los tipos de interés a corto plazo en Estados Unidos caerían o subirían menos de lo esperado por el mercado. GLRE redujo la posición para gestionar el riesgo, manteniendo la exposición restante hasta el próximo verano.

Green Brick Partners y Brighthouse Financial también fueron importantes factores adversos. Entre las contribuciones positivas figuraron las posiciones cortas en empresas vinculadas a la IA y promotoras inmobiliarias, junto con la posición larga en DHT Holdings. Las nuevas posiciones largas incluyeron Century Aluminum, ADI Global Distribution y Canal+.

La exposición neta de la cartera se situó en el 32% al cierre del trimestre, por debajo del 33% registrado al final del 2T, y en aproximadamente el 28% a finales de octubre.

GLRE recompró 505.000 acciones por 8 millones de dólares durante el 3T y otras 220.000 acciones por 3,3 millones de dólares en octubre. La directiva señaló que las recompras continuarán de forma oportunista al amparo de la autorización vigente.

Perspectivas de la directiva

La directiva afirmó que las condiciones del mercado de reaseguros continúan suavizándose, pero considera que las tarifas y los términos siguen siendo atractivos para el negocio de Open Markets. La empresa prevé nuevas oportunidades rentables hasta 2027, al tiempo que mantiene la disciplina de suscripción durante el ciclo de renovaciones del 1 de enero.

En cuanto a Innovations, la directiva espera un crecimiento continuado en un entorno de precios estables. La empresa prevé asimismo que la ratio de gastos del segmento disminuya a medida que gane escala, respaldada por iniciativas como la alianza con Hippo y la transición del Sindicato 3456 a un sindicato completo de Lloyd's.

Riesgos y aspectos a vigilar

• El conflicto en curso en Oriente Medio sigue siendo una fuente de incertidumbre. GLRE redujo las reservas para siniestros conocidos en 6 millones de dólares para eventos específicos, pero mantuvo las reservas para siniestros acaecidos pero no notificados.
• El desarrollo adverso de las reservas de ejercicios anteriores fue de 1,6 puntos en el 3T, concentrándose principalmente en varios contratos de Innovations.
• Las condiciones más blandas en el mercado de reaseguros están presionando los volúmenes de primas, especialmente en Open Markets.
• La volatilidad de las inversiones de Solasglas compensó gran parte del beneficio de suscripción del trimestre. La posición en futuros sobre el SOFR ha resultado gravosa en lo que va de año, aunque la exposición se redujo.
• La preocupación por que los reguladores puedan bloquear o retrasar la adquisición pendiente de Brighthouse Financial por parte de Aquarian Capital contribuyó a una caída del 21% en las acciones de Brighthouse durante el trimestre.

Aspectos destacados del turno de preguntas de los analistas

La única pregunta de los analistas abordó el acuerdo de recompra de acciones de la empresa con David Einhorn. La directiva explicó que, de otro modo, las recompras en el mercado abierto aumentarían el porcentaje de participación de Einhorn a medida que disminuye el número de acciones en circulación.

Para mantener su porcentaje de participación total por debajo de los umbrales aplicables, GLRE mantiene un acuerdo para recomprar acciones a Einhorn por un importe equivalente al 33% de las acciones recompradas en el mercado abierto. La directiva señaló que el acuerdo tiene como objetivo preservar la capacidad de la empresa para seguir recomprando acciones y que se ha prorrogado hasta marzo de 2027.

Transcripción completa de la conferencia de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

Greetings. Thank you for joining the Greenlight Capital Re Third Quarter 2026 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the call over to David Sigmon, Greenlight Re's General Counsel. Thank you. You may begin.

David Sigmon

Thank you, and good morning. I'd like to remind you that this conference call is being recorded and will be available for replay following the conclusion of the event. An audio replay will also be available under the Investors section of the company's website at www.greenlightre.com. Joining us on the call today will be our CEO, Greg Richardson; Chairman of the Board, David Einhorn; and our Chief Financial Officer, Faramarz Romer.

On behalf of the company, I'd like to remind you that forward-looking statements may be made during this call and are intended to be covered by the safe harbor provisions of the federal securities laws. These forward-looking statements reflect the company's current expectations, estimates and predictions about future results and are subject to risks and uncertainties. As a result, actual results may differ materially from those expressed or implied. For more information on the risks and other factors that may impact future performance, investors should review the periodic reports that are filed by the company with the SEC from time to time. Additionally, management may refer to certain non-GAAP financial measures. The reconciliations to these measures can be found in the company's filings with the SEC. The company undertakes no obligation to publicly update or revise any forward-looking statements.

With that, it is now my pleasure to turn the call over to Greg.

Greg Richardson

Thank you, David. Good morning, everyone, and thank you for joining us. The third quarter of 2026 was mixed with a strong underwriting result offset by investment losses. Overall, we reported a net profit of $3.2 million, which brings our year-to-date net income to $9.4 million. Fully diluted book value per share increased 0.8% in the quarter to $20.78 per share. We reported a combined ratio of 90.5% in the quarter, translating to $14.6 million of underwriting income. This result was driven by a combination of the strong underlying profitability of the book assisted by a benign cat quarter. Our open market book delivered an 87.9% combined ratio, while our innovations book delivered a 98.2% combined ratio.

Shifting to our top line. Our open market gross written premium contracted 10.4% in the quarter compared to prior year as we respond to the softening market conditions and exercise prudent cycle management. In contrast, our innovations book grew by 46% in the quarter, reflecting stable pricing and strong organic growth of the companies we support in this segment. During 2026, we have also expanded our use of outward reinsurance and third-party capital with overall gross written premium for the quarter down just 1.4%, while net written premium was down 12.3%. During our August earnings call, we noted a $25 million provision linked to the Middle East conflict. This provision reduced by $6 million in the third quarter as more information became available on specific individual losses.

While the Middle East conflict is still ongoing, it is noteworthy that we have not reported any new large losses this quarter. Our investment in the Solasglas portfolio was down 3.3% in the quarter. David will provide more color on this in his remarks. The Solasglas loss was offset by $10.5 million of other investment income. Included in other investment income was $4.1 million of realized gains on the partial sale of two innovations investments. As our innovations book matures, we are seeing opportunities to monetize gains on some of our investments. We will recycle this capital into new investment opportunities.

I would like to highlight a strategic partnership we announced last week with Hippo Holdings. Under the partnership, Hippo will have the opportunity to co-invest alongside our innovations unit in early-stage MGA investments. Furthermore, Hippo's carrier, Spinnaker Insurance Company, will serve as Greenlight Re's preferred U.S. admitted fronting carrier for qualifying co-invested programs.

This partnership builds on existing relationships between Hippo and Greenlight Re, and we believe it will help accelerate disciplined profitable growth of our Innovation segment. We are now focused on 1/1 renewals. While the market is continuing to soften, we generally believe that rates and terms remain attractive for our open market reinsurance business, and we expect to see profitable new opportunities through next year. As noted above, innovations growth continues to be strong with stable rates. Now I'd like to turn the call over to David.

David Einhorn

Thanks, Greg, and good morning, everyone. The Solasglas fund returned negative 3.3% in the third quarter. The loan portfolio detracted 7.6%, the short portfolio contributed 7.3% and macro detracted 2.8%. During the quarter, the S&P 500 Index advanced 2.3%. While the market advanced, our long and short portfolios behaved as if they were in a bear market; many of our longs and shorts declined between 10% and 25%. The longs reversed gains and the shorts reverse losses from earlier in the year without a company-specific catalyst. The largest positive contributors were shorts of AI adjacent companies and homebuilder stocks and our long position in DHT Holdings, which benefited from much higher tanker charter rates. The largest detractors were our macro position in short-term U.S. interest rates and our long positions in Green Brick Partners and Brighthouse Financial.

The largest detractor in the quarter was our macro SOFR futures position, which reflects our view that short-term interest rates will decline or at least not increase as much as the market expects. The position has been costly year-to-date, and we've reduced it to manage risk. Our remaining exposure extends through next summer, and we continue to believe that the market is pricing in more Federal Reserve rate increases than are likely to occur. Green Brick Partners shares declined 17% and gave back most of their second quarter appreciation. Brighthouse Financial shares fell 21% amid increasing concern that regulators would block or delay its pending acquisition by Aquarian Capital. We added a few small long positions to the portfolio during the quarter.

Century Aluminum is the largest domestic producer of primary aluminum. The company is benefiting from tariffs in a tight global market and has an attractive growth opportunity to bring new smelter capacity online with government subsidies. We presented this idea last month at the Robin Hood Investors Conference in New York. The full presentation is available on our homepage at www.greenlightcapital.com. We also added positions in ADI Global Distribution, a leading distributor of low-voltage electrical products that recently spun out of Resideo, and Canal+, a London-listed global pay TV and content production company.

Our net exposure ended the third quarter at 32% compared to 33% at the end of the second quarter. Solasglas returned 2.3% in October, bringing the 2026 year-to-date return to flat. Net exposure in the investment portfolio was approximately 28% at the end of October.

Greenlight Re continues to perform well in a softening reinsurance environment. The team has been disciplined and has made prudent decisions over the last year. While the market continues to trade our stock at a significant discount to book value, we continue our share repurchase plan and have bought back over 5% of our outstanding shares in 2026. Joe Platt has been a Director of Greenlight Re since 2004. At our Board meeting last week, he announced he will retire from the Board at the end of the year. Joe has been a great friend and a guiding light for the company through good times and bad. His role as Lead Director and his wise advice have been invaluable to me and the company. I wish Joe the best, and we will miss him. Now I'd like to turn the call over to Faramarz to discuss the financial results in more detail.

Faramarz Romer

Thank you, David. Good morning, everyone. During the third quarter of 2026, Greenlight Re reported a net income of $3.2 million or $0.10 per diluted share, bringing our year-to-date earnings to $9.4 million or $0.28 per diluted share. The underwriting income of $14.6 million for the quarter resulted in a combined ratio of 90.5%, which benefited from no new cat or large losses during the quarter. While the Middle East conflict has continued, we received favorable information relating to specific events that were reserved in the first and second quarters. As Greg mentioned, we reduced our case reserves by $6 million on certain events, while we have maintained our IBNR reserves given the uncertainty in the region. Prior year adverse reserve development was 1.6 points during the third quarter compared to 0.5 points in the same period last year. Most of the reserve strengthening related to a handful of contracts within the Innovation segment.

Now let's look at this quarter's results at the segment level. The Open Markets segment reported a pre-tax income of $19.5 million, composed of underwriting income of $15.2 million and investment income of $4.3 million. For the third quarter, the Open Market segment net written premiums decreased by 19% to $114.2 million, while net earned premiums decreased by 13% -- the decrease in net earned premiums was driven by lowered premium estimates on specialty and property proportional contracts as well as decreased exposure on the non-renewed casualty book. The open market combined ratio for the third quarter was 87.9% compared to 84.5% for the third quarter last year.

Loss ratio for open market decreased by 1.9 points, driven by favorable prior year reserve development of 0.6 points compared to adverse development of 0.6 points in the third quarter of last year. The favorable movement in the cat and large loss ratio from the release of reserves relating to the Middle East conflict was partially offset by higher attritional loss ratio mainly related to the specialty business compared to the same period last year. The acquisition cost ratio for the Open Market segment increased by 4.1 points compared to same period last year, mainly due to variable commission true-ups recorded in the quarter. Expense ratio increased by 1.1 points to 4.9% as a function of lower earned premiums and higher expenses related to personnel costs.

Moving to the Innovation segment. The Innovation segment reported a pretax income of $5.8 million, composed of underwriting income of $0.5 million and investment income of $6 million, partially offset by other expenses of $0.6 million. During the quarter, Innovations gross written premiums increased by $13.6 million or 46% compared to third quarter last year to $43 million, mainly driven by new business and exposure growth from existing treaties in multiline and financial lines. Net earned premiums in the third quarter increased by $7.1 million or 34% to $28.1 million as all lines within the Innovation segment grew compared to the same period last year. The combined ratio for Innovations was 98.2% during the third quarter compared to 96.8% for the same period last year.

The loss ratio in the third quarter increased by 13.5 points, primarily due to 7.6 points of adverse prior year reserve development, while during the same period last year, the segment reported a favorable reserve development of 3.1 points. The third quarter acquisition cost ratio for innovations improved by 10.1 points compared to the same period last year due to variable commission adjustments. In our 10-K filed yesterday, we noted that the Innovations underwriting expenses now include our share of Syndicate 3456 expenses, which were previously presented under acquisition costs. We have reclassified the comparatives to conform prior period figures to the new presentation as we believe it better reflects the nature of these expenses.

As we previously indicated, we expect the expense ratio for Innovations to decrease as the segment gains scale. We are starting to see evidence of this as the expense ratio improved by 2 points as the premium growth exceeded expense growth. We continue to invest in this segment to deliver profitable growth. Our new partnership with Hippo and the Lloyd's approval to transition Syndicate 3456 to a full syndicate are some of the initiatives that we expect will advance us towards this objective.

During the third quarter, we repurchased 505,000 shares for $8 million. Subsequently, in October, we repurchased an additional 220,000 shares for $3.3 million. Since the beginning of the year, we have repurchased 5.4% of our outstanding shares for $30.5 million. We have $24.8 million remaining under the current Board-approved repurchase plan, which will allow us to continue repurchasing shares opportunistically. At the end of the third quarter, our fully diluted book value per share was $20.78, an increase of 1.7% for the first 9 months of the year. That concludes our prepared remarks. The operator will now open the line for your questions.

Operator

[Operator Instructions] The first question comes from Dan DeYoung.

Preguntas y respuestas

Daniel DeYoung

Could you give more explanation of the tax considerations that make you want to keep David Einhorn's ownership of the company, I guess, where it is or lower it slightly during the share buybacks, please?

Greg Richardson

David, do you want to take that? Or do you want Faramarz to speak on that?

David Sigmon

Yes. Look, we've entered into a number of -- this is, I think, the third one now where we have a share repurchase agreement with David. I'll let David talk about the details of it. But essentially, as the company is buying back shares, it reduces the number of outstanding shares of the company and increases the portion that David is owning as he keeps holding on to the shares. So in order to ensure that David doesn't exceed the thresholds required, we have entered into an agreement where we repurchased 33% of the shares that we repurchased on the open market, we will repurchase them from David. So as we enter into our open market repurchase agreements, we then and enter into a similar agreement with David. And I think we just recently filed a new one with our 8-K yesterday, where you'll see that that's continuing up to March of 2027.

Daniel DeYoung

It's not something where David wants to reduce his ownership at all. It's just for tax considerations and the threshold of his ownership.

David Sigmon

Correct. To maintain this overall ownership percentage. Yes. That's right. The alternative would be not to be able to buy back stock.

Operator

Thank you. At this time, ladies and gentlemen, we would like to thank you for your participation. This does conclude today's teleconference. Please disconnect your lines at this time, and have a great day.