Greenlight Capital Re, Ltd. (NASDAQ:GLRE) Q2 2022 Earnings Conference Call August 3, 2022 9:00 AM ET
Company Participants
Simon Burton - Chief Executive Officer
David Einhorn - Chairman
Neil Greenspan - Chief Financial Officer
Operator
Good morning and thank you for joining the Greenlight Re Conference Call for the Second Quarter of 2022 Earnings. At this time, all participants are in a listen-only mode. The company reminds you that forward-looking statements that maybe made in this call are intended to be covered by the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, but rather reflect the company’s current expectations, estimates and predictions about future results and events and are subject to risks and uncertainties and assumptions, including those enumerated in the company’s Form 10-K for the year ended December 31, 2021 and other documents filed by the company by the SEC. If one or more risks or uncertainties materialize or if the company’s underlying assumptions prove to be incorrect, actual results may vary materially from what the company projects.
The company undertakes no obligation to update publicly or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. After the prepared remarks, we will be conducting a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Greenlight Re’s Chief Executive Officer, Mr. Simon Burton. Please go ahead, sir.
Simon Burton
Good morning and thanks for joining the call today. Our second quarter performance was strong as we grew book value per share by 3.3%, with a positive contribution from each of underwriting, innovations, investments and the silky fund. The second quarter underwriting result produced a combined ratio of 91.6%. Although this is a significant improvement compared to our performance over the past couple of years, it’s not unexpected. We completed the major repositioning of the underwriting book last January. And although we faced some headwinds as our auto exposure has rolled off, the result this quarter more closely reflects our underwriting potential.
Looking ahead, we see the potential for further upside in underwriting performance. Putting our financial results aside for a moment, there are a couple of significant themes the industry is tackling right now and I’d like to touch on each of them. The widespread inflation we have seen is a significant concern to the industry as it can add great uncertainty to the cost of claims, particularly for classes of business with long payout tails. As a result, it creates pricing challenges for new business and valuation challenges and claims reserves.