9 unchanged sentences
These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.
+Added: Link to Table of Contents
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.
16 unchanged sentences
Our system contains self-monitoring mechanisms, and actions are taken to correct deficiencies as they are identified.
−Removed: Link to Table of Contents
Our management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the framework in the Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the 2013 framework).
2 unchanged sentences
OTHER INFORMATION
−Removed: Disclosure of Certain Activities Under Section 13(r) of the Securities Exchange Act of 1934
−Removed: Section 13(r) of the Securities Exchange Act of 1934, as amended, requires an issuer to disclose in its annual or quarterly reports whether it or an affiliate knowingly engaged in certain activities described in that section, including certain activities related to Iran during the period covered by the report.
−Removed: During 2016, the Office of Foreign Assets Control of the U.S.
−Removed: Department of the Treasury adopted General License H, which authorizes non-U.S.
−Removed: entities that are owned or controlled by a U.S.
−Removed: person to engage in certain activities with Iran so long as they comply with certain specific requirements set forth therein.
−Removed: During 2018, OFAC reimposed certain sanctions on Iran related activities including providing insurance, reinsurance and underwriting services and required such activities to be wound-down by November 4, 2018.
−Removed: As and when allowed by the applicable law and regulations, our non-U.S.
−Removed: subsidiaries provide treaty reinsurance coverage to non-U.S.
−Removed: insurers on a worldwide basis, including insurers of liability, marine, aviation and energy risks, and as a result, these underlying reinsurance portfolios may have some exposure to Iran.
−Removed: In addition, we underwrite facultative reinsurance on a global basis to non-U.S.
−Removed: insurers, including for liability, marine, aviation and energy risks.
−Removed: Coverage provided to non-Iranian business may indirectly cover an exposure in Iran.
−Removed: For example, certain of our reinsurance contracts cover global marine hull and cargo policies that provide coverage for vessels navigating into and out of ports worldwide, including Iran.
−Removed: For the year ended December 31, 2019 , we are not aware of any additional premium with respect to underwriting reinsurance activities reportable under Section 13(r).
−Removed: Should any such risks have entered into the stream of commerce covered by these reinsurance activities, we believe that the premiums associated with such business would be immaterial.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
−Removed: This item is omitted because a definitive proxy statement or an amendment to this Annual Report on Form 10-K containing such information will be filed with the SEC not later than 120 days after the close of the fiscal year pursuant to Regulation 14A, and such information is expressly incorporated herein by reference.
+Added: This item is omitted because a definitive proxy statement containing such information will be filed with the SEC not later than 120 days after the close of the fiscal year pursuant to Regulation 14A, which information required by this item set forth in the proxy statement is incorporated by reference.
EXECUTIVE COMPENSATION
−Removed: This item is omitted because a definitive proxy statement or an amendment to this Annual Report on Form 10-K containing such information will be filed with the SEC not later than 120 days after the close of the fiscal year pursuant to Regulation 14A, and such information is expressly incorporated herein by reference.
+Added: This item is omitted because a definitive proxy statement containing such information will be filed with the SEC not later than 120 days after the close of the fiscal year pursuant to Regulation 14A, which information required by this item set forth in the proxy statement is incorporated by reference.
+Added: Link to Table of Contents
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
−Removed: This item is omitted because a definitive proxy statement or an amendment to this Annual Report on Form 10-K containing such information will be filed with the SEC not later than 120 days after the close of the fiscal year pursuant to Regulation 14A, and such information is expressly incorporated herein by reference.
+Added: This item is omitted because a definitive proxy statement containing such information will be filed with the SEC not later than 120 days after the close of the fiscal year pursuant to Regulation 14A, which information required by this item set forth in the proxy statement is incorporated by reference.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
−Removed: This item is omitted because a definitive proxy statement or an amendment to this Annual Report on Form 10-K containing such information will be filed with the SEC not later than 120 days after the close of the fiscal year pursuant to Regulation 14A, and such information is expressly incorporated herein by reference.
−Removed: Link to Table of Contents
+Added: This item is omitted because a definitive proxy statement containing such information will be filed with the SEC not later than 120 days after the close of the fiscal year pursuant to Regulation 14A, which information required by this item set forth in the proxy statement is incorporated by reference.
PRINCIPAL ACCOUNTING FEES AND SERVICES
−Removed: This item is omitted because a definitive proxy statement or an amendment to this Annual Report on Form 10-K containing such information will be filed with the SEC not later than 120 days after the close of the fiscal year pursuant to Regulation 14A, and such information is expressly incorporated herein by reference.
+Added: This item is omitted because a definitive proxy statement containing such information will be filed with the SEC not later than 120 days after the close of the fiscal year pursuant to Regulation 14A, which information required by this item set forth in the proxy statement is incorporated by reference.
Link to Table of Contents
1 unchanged sentence
The following documents are filed as a part of this Form 10-K
−Removed: Financial Statements
+Added: (a)(1) Financial Statements
Report of Independent Registered Public Accounting Firm (on internal control over financial reporting)
1 unchanged sentence
Report of Independent Registered Public Accounting Firm (on the financial statements of Solasglas Investments, LP)
−Removed: Consolidated Balance Sheets as of December 31, 2019 and 2018
−Removed: Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017
−Removed: Consolidated Statements of Shareholders' Equity for the years ended December 31, 2019, 2018 and 2017
−Removed: Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
−Removed: Notes to the Consolidated Financial Statements
−Removed: Financial Statement Schedules
+Added: Consolidated Balance Sheets as of December 31, 2020 and 2019 F- 5
+Added: Consolidated Statements of Operations for the years ended December 31, 2020, 2019, and 2018 F- 6
+Added: Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2020, and 2019 F- 7
+Added: Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019, and 2018 F- 8
+Added: Notes to the Consolidated Financial Statements F- 9
+Added: (a)(2) Financial Statement Schedules
Schedule I – Summary of Investments — Other Than Investments in Related Parties
2 unchanged sentences
Schedule IV – Supplementary Reinsurance Information
−Removed: The exhibits required to be filed by this Item 15.
+Added: (a)(3) The exhibits required to be filed by this Item 15.
are set forth in the Exhibit Index accompanying this report.
2 unchanged sentences
EXHIBIT INDEX
−Removed: Exhibit Number
−Removed: Description of Exhibit
+Added: Exhibit Number Description of Exhibit
3.1 Third Amended and Restated Memorandum and Articles of Association as revised by special resolution on July 10, 2008 (incorporated by reference to Exhibit 3.1 of the Company’s Form 10-Q filed on August 7, 2008) .
4.1 Form of Specimen Certificate of Class A ordinary shares (incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement No.
+Added: 333-139993) .
4.2 Share Purchase Option, dated August 11, 2004, by and between the Registrant and First International Capital Holdings, Ltd.
(incorporated by reference to Exhibit 4.2 of the Company’s Registration Statement No.
+Added: 333-139993) .
4.3 Indenture, dated as of August 7, 2018, between Greenlight Capital Re, Ltd.
2 unchanged sentences
10.1 Form of Securities Purchase Agreement for Class A ordinary shares by and between the Registrant and each of the subscribers thereto (incorporated by reference to Exhibit 10.2 of the Company’s Registration Statement No.
+Added: 333-139993) .
10.2 (1) Greenlight Capital Re, Ltd.
−Removed: Amended and Restated 2004 Stock Incentive Plan (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement filed on March 9, 2017).
−Removed: Form of Restricted Stock Award Agreement by and between the Registrant and the Grantee (incorporated by reference to Exhibit 10.6 of the Company’s Registration Statement No.
+Added: Amended and Restated 2004 Stock Incentive Plan (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement filed on September 9, 2020).
10.3 (1) Form of Stock Option Agreement (incorporated by reference to Exhibit 10.7 of the Company’s Registration Statement No.
−Removed: Greenlight Capital Re, Ltd.
−Removed: Form of Directors’ Restricted Stock Award (incorporated by reference to Exhibit 10.20 of the Company’s Registration Statement No.
−Removed: Greenlight Capital Re, Ltd.
−Removed: Form of Employees’ Restricted Stock Award (incorporated by reference to Exhibit 10.21 of the Company’s Registration Statement No.
+Added: 333-139993) .
10.4 Form of Shareholders’ Agreement, dated August 11, 2004, by and among the Registrant and each of the subscribers (incorporated by reference to Exhibit 10.8 of the Company’s Registration Statement No.
+Added: 333-139993) .
10.5 Form of Deed of Indemnity between the Registrant and each of its directors and certain of its officers (incorporated by reference to Exhibit 10.11 of the Company’s Registration Statement No.
+Added: 333-139993) .
10.6 (1) Amended and Restated Employment Agreement, dated as of December 30, 2008, by and among Greenlight Capital Re, Ltd., Greenlight Reinsurance, Ltd.
1 unchanged sentence
10.7 Concurrent Private Placement Stock Purchase Agreement for Class B Ordinary Shares, dated January 11, 2007, by and between the Company and David Einhorn (incorporated by reference to Exhibit 10.16 of the Company’s Registration Statement No.
+Added: 333-139993) .
10.8 Service Agreement, dated as of February 21, 2007, between DME Advisors, LP and Greenlight Capital Re, Ltd.
(incorporated by reference to Exhibit 10.17 of the Company’s Registration Statement No.
+Added: 333-139993) .
10.9 (1) Amendment No.
11 unchanged sentences
(incorporated by reference to Exhibit 10.3 of the Company’s Form 10-Q filed on November 2, 2010) .
−Removed: Link to Table of Contents
−Removed: Amended and Restated Employment Agreement, dated July 26, 2012, by and among Greenlight Capital Re, Ltd., Greenlight Reinsurance, Ltd.
−Removed: and Barton Hedges (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q filed on July 30, 2012)
−Removed: Employment Agreement, dated August 15, 2006, by and among Greenlight Capital Re, Ltd., Greenlight Reinsurance, Ltd.
−Removed: and Brendan Barry (incorporated by reference to Exhibit 10.24 of the Company’s Form 10-K filed on February 21, 2012)
−Removed: Employment Agreement, dated July 31, 2014, by and among Greenlight Reinsurance, Ltd.
−Removed: and James McNichols (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q filed on November 3, 2014)
−Removed: Letter Agreement between Greenlight Capital Re, Ltd., Greenlight Reinsurance, Ltd., Greenlight Reinsurance Ireland, Ltd., DME Advisors, LLC and DME Advisors, LP., dated June 17, 2015 (incorporated by reference to Exhibit 10.3 of the Company’s Form 10-Q filed on August 3, 2015)
−Removed: Third Amended and Restated Agreement by and among Greenlight Reinsurance, Ltd., Greenlight Reinsurance Ireland, a Designated Activity Company, Greenlight Capital Re, Ltd.
−Removed: (for limited purposes), DME Advisors, LLC and DME Advisors, LP (for limited purposes), dated as of September 30, 2016 and effective as of January 1, 2017 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on October 6, 2016).
−Removed: Amended and Restated Investment Advisory Agreement among DME Advisors, LP, The Venture Among Greenlight Reinsurance, Ltd., Greenlight Reinsurance Ireland, a Designated Activity Company, and DME Advisors, LLC, Greenlight Reinsurance, Ltd., Greenlight Reinsurance Ireland, a Designated Activity Company and DME Advisors, LLC., dated as of September 30, 2016 and effective as of January 1, 2017 (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on October 6, 2016).
−Removed: Deed of Settlement and Release dated December 15, 2016, among Barton Hedges, Greenlight Capital Re, Ltd., and Greenlight Reinsurance, Ltd.
−Removed: (incorporated by reference to Exhibit 99.2 to the Company’s Form 8-K filed on December 19, 2016).
10.14 Consulting agreement dated December 16, 2016, among Greenlight Capital Re, Ltd., Greenlight Reinsurance, Ltd.
2 unchanged sentences
and Simon Burton dated July 1, 2017 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on June 2, 2017).
−Removed: Employment Agreement by and between Greenlight Capital Re, Ltd., Greenlight Reinsurance, Ltd.
−Removed: and Michael Belfatti dated August 15, 2017 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on August 16, 2017)
+Added: Link to Table of Contents
10.16 (1) Employment Agreement by and between Greenlight Reinsurance Ireland, DAC and Patrick O’Brien dated February 16, 2018 (incorporated by reference to Exhibit 10.40 to the Company’s Form 10-K filed on Feb 20, 2018) .
−Removed: Amendment to Employment Agreement by and between Greenlight Reinsurance, Ltd.
−Removed: and Brendan Barry, dated as of March 15, 2018 and effective as of January 1, 2018 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on March 21, 2018)
10.17 Amendment No.
1 to Shareholders’ Agreement, dated June 29, 2018, by and between the Registrant and David Einhorn (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on June 29, 2018).
−Removed: Deed of Settlement and Release, dated July 19, 2018, among Michael Belfatti, Greenlight Capital Re, Ltd and Greenlight Reinsurance, Ltd.
−Removed: (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on July 20, 2018)
−Removed: Amended and Restated Exempted Limited Partnership Agreement of Solasglas Investments, LP, between DME Advisors II, LLC, as General Partner, Greenlight Reinsurance, Ltd., Greenlight Reinsurance Ireland, Designated Activity Company, Greenlight Capital Re, Ltd.
−Removed: and the initial limited partner, dated as of September 1, 2018 (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on September 4, 2018)
10.18 Investment Advisory Agreement among DME Advisors, LP, and Solasglas Investments, LP, dated as of September 1, 2018 (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on September 4, 2018) .
10.19 Participation Agreement among Greenlight Reinsurance, Ltd., Greenlight Reinsurance Ireland, Designated Activity Company, DME Advisors II, LLC and Solasglas Investments, LP, dated as of September 1, 2018 (incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed on September 4, 2018) .
−Removed: Termination Agreement among Greenlight Reinsurance, Ltd., Greenlight Reinsurance Ireland, Designated Activity Company, Greenlight Capital Re, Ltd., DME Advisors, LLC and DME Advisors, LP, dated as of September 1, 2018 (incorporated by reference to Exhibit 10.4 of the Company’s Form 8-K filed on September 4, 2018)
−Removed: Link to Table of Contents
10.20 (1) Employment Agreement by and between Greenlight Capital Re, Ltd., Greenlight Reinsurance, Ltd.
10 unchanged sentences
and Laura Accurso dated October 1, 2017, as amended February 18, 2019 (incorporated by reference to Exhibit 10.53 of the Company’s Form 10-K filed on February 27, 2019) .
−Removed: Amendment No.1 to the Amended and Restated Exempted Limited Partnership Agreement of Solasglas Investments, LP, between DME Advisors II, LLC, as General Partner, Greenlight Reinsurance, Ltd.
−Removed: and Greenlight Reinsurance Ireland, Designated Activity Company, dated Feb 26, 2019, effective as of September 1, 2018 (incorporated by reference to Exhibit 10.54 of the Company’s Form 10-K filed on February 27, 2019)
10.26 (1) Restricted Stock Unit Award Agreement by and between Greenlight Capital Re, Ltd.
5 unchanged sentences
Form of Employees’ Restricted Stock Unit Award (incorporated by reference to Exhibit 4.10 of the Company’s Registration Statement No 333-231214 filed on May 3, 2019).
−Removed: Letter agreement between Greenlight Reinsurance, Ltd, Greenlight Reinsurance Ireland, DAC, DME Advisors II, LLC and DME Advisors, LP, effective June 1, 2019 (incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q filed on August 5, 2019).
10.29 (1) Second Amendment to Employment Agreement, dated as of September 2, 2019, by and among Greenlight Capital Re, Ltd., Greenlight Reinsurance, Ltd.
1 unchanged sentence
10.30 (1) Amendment to Employment Agreement, dated as of September 2, 2019, by and between Greenlight Reinsurance Ireland, DAC and Patrick O’Brien (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on September 3, 2019).
−Removed: Bonus Agreement, dated as of September 22, 2019, by and among Greenlight Capital Re, Ltd., Greenlight Reinsurance, Ltd.
−Removed: and Simon Burton (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on September 23, 2019).
−Removed: Restricted Stock Award Agreement, effective as of September 22, 2019 by and between Greenlight Capital Re, Ltd.
−Removed: and Simon Burton (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on September 23, 2019).
−Removed: Amended and Restated Letter Agreement, dated as of December 27, 2019, by and among Greenlight Reinsurance, Ltd., Greenlight Reinsurance Ireland, a Designated Activity Company, and Solasglas Investments, LP (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on December 30, 2019).
−Removed: Greenlight Capital Re, Ltd.
−Removed: Greenlight Capital Re, Ltd.
−Removed: Form of Bonus Plan Bonus Agreement.
−Removed: Amendment to Employment Agreement, entered into as of September 2, 2019, by and among Greenlight Capital Re, Ltd., Greenlight Reinsurance, Ltd.
−Removed: and Neil Greenspan
+Added: 10.31 Second Amended and Restated Exempted Limited Partnership Agreement of Solasglas Investments, LP, between DME Advisors II, LLC, as General Partner, Greenlight Reinsurance, Ltd., Greenlight Reinsurance Ireland, a Designated Activity Company, Greenlight Capital Re, Ltd.
+Added: and the initial limited partner, dated as of January 7, 2021 (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on January 12, 2021).
+Added: 10.32 (1) Amendment to Employment Agreement, entered into as of September 2, 2019, by and among Greenlight Capital Re, Ltd., Greenlight Reinsurance, Ltd and Neil Greenspan (incorporated by reference to Exhibit 10.53 of the Company’s Form 10-K filed on March 9, 2020).
10.33 (1) Employment Offer, dated March 23, 2009, by and between Greenlight Reinsurance, Ltd.
−Removed: and Tom Curnock.
+Added: and Tom Curnock (incorporated by reference to Exhibit 10.54 of the Company’s Form 10-K filed on March 9, 2020).
10.34 (1) Amendment to Employment Offer entered into as of October 31, 2018 by and between Greenlight Reinsurance, Ltd.
−Removed: and Tom Curnock.
+Added: and Tom Curnock (incorporated by reference to Exhibit 10.55 of the Company’s Form 10-K filed on March 9, 2020).
10.35 (1) Second Amendment to Employment Offer entered into September 10, 2019, by and between Greenlight Reinsurance, Ltd.
−Removed: and Tom Curnock.
+Added: and Tom Curnock (incorporated by reference to Exhibit 10.56 of the Company’s Form 10-K filed on March 9, 2020).
Link to Table of Contents
+Added: 10.36 (1) Third Amendment to Employment Agreement, dated as of May 1, 2020, by and among Greenlight Capital Re, Ltd., Greenlight Reinsurance, Ltd.
+Added: and Laura Accurso (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed May 5, 2020).
+Added: 10.37 (1) Retention Bonus Agreement, dated May 4, 2020 by and between Greenlight Reinsurance, Ltd and Laura Accurso (incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q filed August 5, 2020).
+Added: 10.38 (1) Retention Bonus Agreement, dated May 4, 2020 by and between Greenlight Reinsurance, Ltd and Simon Burton (incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q filed August 5, 2020).
+Added: 10.39 (1) Retention Bonus Agreement, dated May 4, 2020 by and between Greenlight Reinsurance, Ltd and Thomas Curnock (incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q filed August 5, 2020).
+Added: 10.40 (1) Retention Bonus Agreement, dated May 4, 2020 by and between Greenlight Reinsurance, Ltd and Neil Greenspan (incorporated by reference to Exhibit 10.6 to the Company’s Form 10-Q filed August 5, 2020).
+Added: 10.41 (1) Retention Bonus Agreement, dated May 4, 2020 by and between Greenlight Reinsurance, Ltd and Patrick O’Brien (incorporated by reference to Exhibit 10.7 to the Company’s Form 10-Q filed August 5, 2020).
+Added: 10.42 (1) Amended and Restated Restricted Stock Award Agreement dated July 30, 2020, by and between Greenlight Capital Re, Ltd and Simon Burton (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed August 5, 2020).
+Added: 10.43 Letter Agreement between Greenlight Reinsurance, Ltd, Greenlight Reinsurance Ireland, DAC, DME Advisors II, LLC and DME Advisors LP, effective July 1, 2020 (incorporated by reference to Exhibit 10.9 to the Company’s Form 10-Q filed August 5, 2020).
+Added: 10.44 (1) Deed of Settlement and Release, effective as of September 9, 2020, by and among Tim Courtis, Greenlight Capital Re, Ltd.
+Added: and Greenlight Reinsurance, Ltd.
+Added: (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed September 9, 2020).
+Added: 10.45 (1) Deed of Settlement and Release, effective as of September 4, 2020, by and among Brendan Barry, Greenlight Capital Re, Ltd.
+Added: and Greenlight Reinsurance, Ltd.
+Added: (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed September 9, 2020).
+Added: 10.46 (1) Greenlight Capital Re, Ltd.
+Added: Form of Directors’ Restricted Stock Award (incorporated by reference to Exhibit 4.9 of the Company’s Registration Statement No.
+Added: 10.47 (1) Greenlight Capital Re, Ltd.
+Added: Form of Employees’ Restricted Stock Award (incorporated by reference to Exhibit 4.10 of the Company’s Registration Statement No.
21.1 Subsidiaries of the registrant.
27 unchanged sentences
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
−Removed: /s/ LEONARD GOLDBERG
−Removed: Leonard Goldberg
−Removed: March 9, 2020
−Removed: March 9, 2020
−Removed: /s/ ALAN BROOKS
−Removed: March 9, 2020
−Removed: March 9, 2020
−Removed: /s/ IAN ISAACS
−Removed: /s/ JOSEPH P.
−Removed: March 9, 2020
−Removed: March 9, 2020
−Removed: /s/ TIM COURTIS
−Removed: /s/ BRYAN MURPHY
+Added: EINHORN /s/ LEONARD GOLDBERG
+Added: Director Leonard Goldberg
+Added: March 10, 2021 March 10, 2021
+Added: /s/ BRYAN MURPHY /s/ ALAN BROOKS
+Added: Director Alan Brooks
+Added: March 10, 2021 March 10, 2021
+Added: /s/ IAN ISAACS /s/ JOSEPH P.
+Added: Director Joseph P.
+Added: March 10, 2021 March 10, 2021
+Added: /s/ NEIL GREENSPAN
+Added: Neil Greenspan
Chief Financial Officer
1 unchanged sentence
March 10, 2021
−Removed: March 9, 2020
/s/ SIMON BURTON
39 unchanged sentences
(the Company) as of December 31, 2020 and 2019, the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2020 and the related notes and schedules (collectively referred to as the “consolidated financial statements”).
−Removed: In our opinion, based on our audits and the report of the other auditors, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019 and 2018 , and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019 , in conformity with accounting principles generally accepted in the United States of America.
−Removed: We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2019 , based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated March 9, 2020 expressed an unqualified opinion thereon.
−Removed: We did not audit the financial statements of Solasglas Investments, LP, an equity method investment of the Company as of December 31, 2019 and 2018 and for the year ended December 31, 2019 and the period from September 1, 2018 (commencement of operations) to December 31, 2018.The Company’s investment in Solasglas Investments, LP as of December 31, 2019 and 2018 was $240.1 million and $235.6 million , respectively, and its equity in net income (loss) of Solasglas Investment, LP was $46.1 million and $(60.6) million for the year ended December 31, 2019 and the period from September 1, 2018 (commencement of operations) to December 31, 2018, respectively.
+Added: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 , in conformity with accounting principles generally accepted in the United States of America.
+Added: We also have audited, in accordance with the standards of the Public Compan y Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated March 10, 2021 expressed an unqualified opinion thereon.
+Added: We did not audit the financial statements of Solasglas Investments, LP, an equity method investment of the Company as of December 31, 2020 and 2019 and for the years ended December 31, 2020 and 2019 and the period from September 1, 2018 (commencement of operations) through December 31, 2018.
+Added: The Company’s investment in Solasglas Investments, LP as of December 31, 2020 and 2019 was $166.7 million and $240.1 million, respectively, and its equity in net income (loss) of Solasglas Investment, LP was $4.4 million and $46.1 million for the year ended December 31, 2020 and 2019, respectively, and was $(60.6) million for the period from September 1, 2018 (commencement of operations) to December 31, 2018.
The financial statements of Solasglas Investments, LP were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Solasglas Investments, LP, is based solely on the report of the other auditors.
2 unchanged sentences
Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.
−Removed: We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.
+Added: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
5 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
+Added: Critical Audit Matters
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:
+Added: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Link to Table of Contents
+Added: Incurred But Not Reported (IBNR) Loss Reserves
+Added: As described in Note 2 and Note 7 to the Company’s consolidated financial statements, the Company’s loss and loss adjustment expense reserves were $494.2 million for the year ended December 31, 2020.
+Added: The total reserve was made up of $176.8 million of case reserves and $317.4 million of IBNR reserves.
+Added: Case reserves have resulted from claims notified to the Company by its clients.
+Added: IBNR reserves relate to claims that have been incurred by insureds and reinsureds but have not yet been reported to the insurer or reinsurer, including unknown future developments on amounts already known by the insurer or reinsurer.
+Added: The calculation of the IBNR reserves requires the Company’s reserving actuaries to calculate a best, or “point” estimate of reserves for each contract.
+Added: To calculate this estimate, a number of different actuarial methodologies and key assumptions are weighted and applied to each individual contract.
+Added: We identified the IBNR portion of the Company’s loss and loss adjustment expense reserves as a critical audit matter.
+Added: The Company’s actuarial methodologies and key assumptions used to calculate IBNR reserves are highly subjective and can have a significant impact on the loss and loss adjustment expense reserve.
+Added: Auditing these methodologies and key assumptions used involves a high degree of subjective auditor judgment due to the assessment of risk and nature and extent of specialized skill and knowledge needed to address the risk.
+Added: The primary procedures we performed to address this critical audit matter included:
+Added: • Testing the design and effectiveness of the controls relating to management’s loss reserving process, including:
+Added: ◦ Management’s review of the completeness and accuracy of source data provided by cedents.
+Added: ◦ Management’s review of internally selected actuarial methodologies and key assumptions used.
+Added: ◦ Management’s review of the independent external actuarial report, which includes an independent recommended reserve balance.
+Added: A comparison is performed between the Company’s internal reserves balance and the recommended balance per the independent external actuary.
+Added: • Reviewing the development of prior year estimates of IBNR reserves.
+Added: • Testing the completeness and accuracy of the source information used by the Company and any additional source information used by BDO’s actuarial specialists to calculate the IBNR reserves.
+Added: • Utilizing personnel with specialized knowledge and skill in actuarial services to evaluate the reasonableness of the Company’s loss and loss adjustment expense reserves by developing an independent estimate and reasonable range of actuarial central estimates based on an alternative combination of methods, assumptions and/or segmentation of the data.
/s/ BDO USA, LLP
7 unchanged sentences
Opinion on the Financial Statements
−Removed: We have audited the statement of assets, liabilities and partners’ capital of Solasglas Investments, LP (an equity method investee of Greenlight Capital Re, Ltd.) (the “Partnership”), including the condensed schedule of investments, as of December 31, 2019 and 2018, and the related statements of operations, changes in partners’ capital and cash flows for the year ended December 31, 2019 and for the period from September 1, 2018 (commencement of operations) to December 31, 2018, and the related notes (collectively referred to as the “financial statements”).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership at December 31, 2019 and 2018, and the results of its operations, changes in its partners’ capital and its cash flows for the year ended December 31, 2019 and the period from September 1, 2018 (commencement of operations) to December 31, 2018 in conformity with U.S.
+Added: We have audited the accompanying statements of assets, liabilities and partners’ capital of Solasglas Investments, LP (the “Partnership”), including the condensed schedules of investments, as of December 31, 2020 and 2019, and the related statements of operations, changes in partners’ capital and cash flows for the years ended December 31, 2020, December 31, 2019 and for the period from September 1, 2018 (commencement of operations) to December 31, 2018, and the related notes (collectively referred to as the “financial statements”).
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership at December 31, 2020 and 2019, and the results of its operations, changes in its partners’ capital and its cash flows for the years ended December 31, 2020, December 31, 2019 and for the period from September 1, 2018 (commencement of operations) to December 31, 2018 in conformity with U.S.
generally accepted accounting principles.
10 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
+Added: Critical Audit Matters
+Added: Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to those charged with governance and that:
+Added: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments.
+Added: We determined that there are no critical audit matters.
/s/ Ernst & Young Ltd.
8 unchanged sentences
dollars, except per share and share amounts)
+Added: December 31, 2020 December 31, 2019
Investment in related party investment fund $ 166,735 $ 240,056
−Removed: Equity securities, trading, at fair value
Other investments 29,418 16,384
2 unchanged sentences
Restricted cash and cash equivalents 745,371 742,093
−Removed: Reinsurance balances receivable
−Removed: Loss and loss adjustment expenses recoverable
+Added: Reinsurance balances receivable (net of allowance for expected credit losses of $ 89 and $ 0 )
+Added: 330,232 230,384
+Added: Loss and loss adjustment expenses recoverable (net of allowance for expected credit losses of $ 47 and $ 0 )
+Added: 16,851 27,531
Deferred acquisition costs 51,014 49,665
Unearned premiums ceded — 901
−Removed: Notes receivable (net of valuation allowance)
+Added: Notes receivable (net of allowance for expected credit losses - see Note 2) 6,101 20,202
+Added: Other assets 2,993 2,164
+Added: Total assets $ 1,357,650 $ 1,355,193
Liabilities and equity
−Removed: Due to related party investment fund
Loss and loss adjustment expense reserves 494,179 470,588
5 unchanged sentences
Total liabilities 892,793 878,010
−Removed: Redeemable non-controlling interest in related party joint venture
+Added: Shareholders' equity
Preferred share capital (par value $ 0.10 ;
4 unchanged sentences
issued and outstanding, 28,260,075 (2019:
+Added: 30,739,395 ):
par value $ 0.10 ;
3 unchanged sentences
Retained earnings (deficit) ( 27,083 ) ( 30,063 )
−Removed: Shareholders’ equity attributable to Greenlight Capital Re, Ltd.
−Removed: Non-controlling interest in related party joint venture
−Removed: Total liabilities, redeemable non-controlling interest and equity
+Added: Total shareholders' equity 464,857 477,183
+Added: Total liabilities and equity $ 1,357,650 $ 1,355,193
The accompanying Notes to the Consolidated Financial Statements are an
3 unchanged sentences
CONSOLIDATED STATEMENTS OF OPERATIONS
−Removed: Years ended December 31, 2019, 2018 and 2017
+Added: For the years ended December 31, 2020, 2019, and 2018
(expressed in thousands of U.S.
dollars, except per share and share amounts)
+Added: 2020 2019 2018
Gross premiums written $ 479,791 $ 523,977 $ 567,531
4 unchanged sentences
Income (loss) from investment in related party investment fund (net of related party expenses of $ 3,251 , $ 9,874 , and $ 3,100 , respectively)
−Removed: Net investment income (loss) [net of related party expenses of $0, $11,221 and $19,863, respectively]
+Added: 4,431 46,056 ( 60,573 )
+Added: Net investment income (loss) 21,101 6,211 ( 262,533 )
Other income (expense), net 3,149 2,306 ( 2,228 )
8 unchanged sentences
Net income (loss) 3,866 ( 3,986 ) ( 354,329 )
−Removed: Loss (income) attributable to non-controlling interest in related party joint venture
+Added: Loss attributable to non-controlling interest in related party joint venture — — 4,275
Net income (loss) attributable to Greenlight Capital Re, Ltd.
+Added: $ 3,866 $ ( 3,986 ) $ ( 350,054 )
Earnings (loss) per share
+Added: Basic $ 0.11 $ ( 0.11 ) $ ( 9.74 )
+Added: Diluted $ 0.11 $ ( 0.11 ) $ ( 9.74 )
Weighted average number of ordinary shares used in the determination of earnings and loss per share
+Added: Basic 36,172,216 36,079,419 35,951,659
+Added: Diluted 36,278,028 36,079,419 35,951,659
The accompanying Notes to the Consolidated Financial Statements are an
3 unchanged sentences
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
−Removed: Years ended December 31, 2019, 2018 and 2017
+Added: For the years ended December 31, 2020, 2019, and 2018
(expressed in thousands of U.S.
+Added: Year ended December 31
+Added: 2020 2019 2018
Ordinary share capital
−Removed: Additional paid-in capital
−Removed: Retained earnings (deficit)
−Removed: Shareholders’ equity attributable to Greenlight Capital Re, Ltd.
−Removed: Non-controlling
−Removed: interest in joint venture
−Removed: Balance at December 31, 2016
+Added: Beginning balance $ 3,699 $ 3,638 $ 3,736
Issue of Class A ordinary shares, net of forfeitures 8 61 20
Repurchase of Class A ordinary shares ( 255 ) — ( 118 )
−Removed: Share-based compensation expense, net of forfeitures
−Removed: Change in non-controlling interest in related party joint venture
−Removed: Net income (loss) attributable to Greenlight Capital Re, Ltd.
−Removed: Balance at December 31, 2017
−Removed: Issue of Class A ordinary shares, net of forfeitures
+Added: Ending balance 3,452 3,699 3,638
+Added: Additional paid-in capital
+Added: Beginning balance 503,547 499,726 503,316
Repurchase of Class A ordinary shares ( 17,526 ) — ( 16,090 )
1 unchanged sentence
Issuance of convertible notes — — 7,896
−Removed: Change in non-controlling interest in related party joint venture
+Added: Ending balance 488,488 503,547 499,726
+Added: Retained earnings (deficit)
+Added: Beginning balance ( 30,063 ) ( 26,077 ) 324,272
+Added: Repurchase of Class A ordinary shares — — ( 295 )
+Added: Cumulative effect of adoption of accounting guidance for expected credit losses at January 1, 2020 ( 886 ) — —
Net income (loss) attributable to Greenlight Capital Re, Ltd.
−Removed: Balance at December 31, 2018
−Removed: Issue of Class A ordinary shares, net of forfeitures
−Removed: Share-based compensation expense
+Added: 3,866 ( 3,986 ) ( 350,054 )
+Added: Ending balance ( 27,083 ) ( 30,063 ) ( 26,077 )
+Added: Non-controlling interest in joint venture
+Added: Beginning balance — 485 12,933
Change in non-controlling interest in related party joint venture — ( 485 ) ( 12,448 )
−Removed: Net income (loss) attributable to Greenlight Capital Re, Ltd.
−Removed: Balance at December 31, 2019
+Added: Ending balance — — 485
+Added: Total shareholders' equity $ 464,857 $ 477,183 $ 477,772
The accompanying Notes to the Consolidated Financial Statements are an
3 unchanged sentences
CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: Years ended December 31, 2019, 2018 and 2017
+Added: For the years ended December 31, 2020, 2019, and 2018
(expressed in thousands of U.S.
+Added: 2020 2019 2018
Cash provided by (used in) operating activities
2 unchanged sentences
Loss (income) from investments in related party investment fund ( 4,431 ) ( 46,056 ) 60,573
−Removed: Loss (income) from equity accounted investment
−Removed: Net change in unrealized gains and losses on investments, financial contracts and notes receivable
−Removed: Net realized (gains) losses on investments and financial contracts
+Added: Loss (income) from investment accounted for under the equity method ( 843 ) ( 700 ) 247
+Added: Net change in unrealized gains and losses on investments and notes receivable ( 25,159 ) ( 8,380 ) 32,597
+Added: Net realized (gains) losses on investments and notes receivable 9,234 14,150 236,887
Foreign exchange (gains) losses on investments 83 270 186
+Added: Current expected credit losses recognized on notes receivable and reinsurance assets ( 750 ) — —
Share-based compensation expense 2,475 3,882 4,624
−Removed: Amortization and interest expense
+Added: Amortization and interest expense, net of change in accruals 2,280 2,329 2,505
Depreciation expense 21 21 260
4 unchanged sentences
Unearned premiums ceded 901 24,080 139
+Added: Other assets, excluding depreciation ( 850 ) 374 411
Loss and loss adjustment expense reserves 23,591 ( 12,074 ) 18,282
15 unchanged sentences
Change in due to prime brokers and other financial institutions — — ( 672,700 )
−Removed: Net change in notes receivable
−Removed: Non-controlling interest contribution into (withdrawal from) related party joint venture, net
+Added: Notes receivable collected, net 19,867 671 1,636
+Added: Non-controlling interest withdrawal from related party joint venture, net — ( 1,278 ) ( 13,650 )
Net cash provided by (used in) investing activities 95,626 63,334 ( 845,263 )
10 unchanged sentences
Income tax paid in cash — — 4
−Removed: Non-cash transfer of investments (Note 3)
+Added: Non-cash transfer of investments — 36,673 125,008
Non-cash addition of right-of-use asset — 323 —
10 unchanged sentences
(“Greenlight Re”), provides global specialty property and casualty reinsurance.
−Removed: Greenlight Re has a Class D insurer license issued in accordance with the terms of The Insurance Law, 2010 and underlying regulations thereto (the “Law”) and is subject to regulation by the Cayman Islands Monetary Authority, in terms of the Law.
+Added: 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, in terms of the Act.
Greenlight Re commenced underwriting in April 2006.
4 unchanged sentences
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.
+Added: In 2020, Greenlight Re Marketing (UK) Limited (“Greenlight Re UK”), a wholly-owned subsidiary of GLRE was established to increase the Company’s presence in the London market.
As used herein, the “Company” refers collectively to GLRE and its consolidated subsidiaries.
−Removed: Prior to January 2, 2019, the Company and its reinsurance subsidiaries were party to a joint venture agreement (the “venture agreement”) with DME Advisors, LP (“DME Advisors”) and DME Advisors LLC (“DME”) under which the Company, its reinsurance subsidiaries and DME were participants in a joint venture (the “Joint Venture”) for the purpose of managing certain jointly held assets.
−Removed: The Joint Venture was consolidated in accordance with ASC 810, Consolidation (ASC 810).
−Removed: DME and DME Advisors are related to the Company and each is an affiliate of David Einhorn, Chairman of the Company’s Board of Directors.
−Removed: On September 1, 2018, the Company entered into an 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, GRIL and the initial limited partner (each, a “Partner”).
−Removed: The SILP LPA, in conjunction with a participation agreement, replaced the venture agreement and assigned and/or transferred Greenlight Re’s and GRIL’s invested assets in the Joint Venture to SILP.
−Removed: The Joint Venture was terminated on January 2, 2019 by which date all assets were transferred to SILP (see Note 3 for details).
The Class A ordinary shares of GLRE are listed on Nasdaq Global Select Market under the symbol “GLRE.”
These consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.
−Removed: The consolidated financial statements include the accounts of GLRE and the consolidated financial statements of its wholly owned subsidiaries, Greenlight Re, GRIL, Verdant and for periods prior to January 2, 2019, the Joint Venture.
+Added: The consolidated financial statements include the accounts of GLRE and the consolidated financial statements of its wholly owned subsidiaries, Greenlight Re, GRIL, Verdant and Greenlight Re UK.
All significant intercompany transactions and balances have been eliminated on consolidation.
+Added: The global pandemic related to the novel coronavirus (the “COVID-19 pandemic”) is having a significant adverse impact on the property and casualty insurance and reinsurance industry.
+Added: The Company has included in the loss and loss adjustment reserves, its best estimate of losses arising from the COVID-19 pandemic.
+Added: However, there remains considerable uncertainty relating to the ultimate losses, which will depend on the extent and duration of economic contraction, impact of recent court rulings, and outcomes of pending court cases.
+Added: Accordingly, significant estimates used in the preparation of the Company’s consolidated financial statements including those associated with premiums, expected credit losses on amounts owed to us and the estimations of loss and loss adjustment expense reserves may be subject to significant adjustments in future periods.
SIGNIFICANT ACCOUNTING POLICIES
+Added: In the first quarter of 2020, the Company adopted ASU No.
+Added: 2016-13, Financial Instruments - Credit Losses (“ASU 2016-13”) which requires an entity to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset.
+Added: ASU 2016-13 was effective for public business entities for annual and interim periods beginning after December 15, 2019.
+Added: The financial assets included in the captions “Reinsurance balances receivable,” “Loss and loss adjustment expenses recoverable” (collectively, “Reinsurance Assets”) and “Notes receivable,” in the Company’s consolidated balance sheets are carried at amortized cost and therefore affected by ASU 2016-13.
+Added: Other than the changes relating to the adoption of ASU 2016-13, there have been no changes to the Company’s significant accounting policies.
Use of Estimates
7 unchanged sentences
The Company maintains cash and cash equivalent balances to collateralize regulatory trusts and letters of credit issued to cedents (see Notes 6 and 15).
−Removed: The amount of cash encumbered varies depending on the collateral required by those cedents.
−Removed: Prior to the termination of the Joint Venture on January 2, 2019, the Company maintained cash in segregated accounts with prime brokers and derivative counterparties.
The following table reconciles the cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the total presented in the consolidated statements of cash flows:
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: December 31, 2020 December 31, 2019
($ in thousands)
20 unchanged sentences
Reinsurance Premiums Ceded
−Removed: The Company reduces the risk of future losses on business assumed by reinsuring certain risks and exposures with other reinsurers (retrocessionaires).
+Added: The Company reduces the risk of future losses on business assumed by reinsuring certain risks and exposures with other reinsurers (referred to as “retrocessionaires”).
The Company remains liable to the extent that any retrocessionaire fails to meet its obligations and to the extent the Company does not hold sufficient security for their unpaid obligations.
5 unchanged sentences
However, if the sum of a contract’s expected losses and loss expenses and deferred acquisition costs exceeds associated unearned premiums and expected investment income, a premium deficiency is determined to exist.
−Removed: In this event, deferred acquisition costs are written off to the extent necessary to
−Removed: Link to Table of Contents
−Removed: eliminate the premium deficiency.
+Added: In this event, deferred acquisition costs are written off to the extent necessary to eliminate the premium deficiency.
If the premium deficiency exceeds deferred acquisition costs then a liability is accrued for the excess deficiency.
−Removed: There were no significant premium deficiency adjustments recognized during the periods presented herein.
+Added: There were no premium deficiency adjustments recognized during the periods presented herein.
+Added: Link to Table of Contents
Policy acquisition costs also include profit commissions, which are recognized on a basis consistent with our estimate of losses and loss expenses.
−Removed: As of December 31, 2019 , $1.2 million ( 2018 :
−Removed: $8.5 million ) of profit commission reserves were included in the caption “Reinsurance balances payable” in the Company’s consolidated balance sheets.
−Removed: For the year ended December 31, 2019 , $6.7 million , ( 2018 :
+Added: As of December 31, 2020, $ 10.9 million of profit commission reserves were recoverable (December 31, 2019:
+Added: $ 1.2 million payable).
+Added: The recovery of profit commissions was related to mortgage contracts based on increases in loss reserves recorded by the Company during 2020.
+Added: For the year ended December 31, 2020, net profit commission expense (income) of $( 7.7 ) million, (2019:
$ 6.7 million, 2018:
−Removed: $2.0 million ) of net profit commission expense was included in the caption “Acquisition costs” in the Company’s consolidated statements of operations.
+Added: $ 18.2 million) was included in the caption “Acquisition costs” in the Company’s consolidated statements of operations.
Funds Withheld
1 unchanged sentence
Any interest expense that the Company incurs while these funds are withheld are included under the caption “Net investment income (loss)” in the consolidated statements of operations.
+Added: Funds Held by Cedents
+Added: The caption “Reinsurance balances receivable” in the Company’s consolidated balance sheets includes amounts held by cedents and Funds at Lloyd’s provided to support the reinsurance contracts with Lloyd’s syndicates.
+Added: As of December 31, 2020, funds held by cedents were $ 127.6 million (2019:
+Added: $ 68.0 million).
Loss and Loss Adjustment Expense Reserves and Recoverable
17 unchanged sentences
Estimates for IBNR losses are added to the case reserves as the Company deems appropriate.
−Removed: To establish IBNR loss estimates, the Company uses estimates communicated by ceding companies, industry data and information, knowledge of the business written and management’s judgment.
+Added: To establish catastrophe IBNR loss estimates, the Company uses estimates communicated by ceding companies, industry data and information, knowledge of the business written and management’s judgment.
For all non-natural peril business, initial reserves for each individual contract are determined on the basis of a combination of:
5 unchanged sentences
The level of detail within the data obtained varies greatly depending on the underlying contract, line of business, client and/or coverage provided.
+Added: Link to Table of Contents
In all cases, the Company requests each client to provide data for each reporting period, which, depending on the contract, could be on a monthly or quarterly basis.
1 unchanged sentence
Where practical, historical reserving data that is received from a client is compared to publicly available financial statements of the client to identify, confirm and monitor the accuracy and completeness of the data.
−Removed: Link to Table of Contents
Generally, the Company obtains regular updates of premium and loss related information for the current and historical periods, which are utilized to update the initial expected loss ratio.
42 unchanged sentences
The reserving committee reviews, discusses and puts forward a loss reserve recommendation for the Audit Committee’s approval.
+Added: Link to Table of Contents
Additionally, an independent third-party actuarial firm performs a quarterly reserve review and annually opines on the reasonableness and adequacy of the aggregate loss reserves.
2 unchanged sentences
The actuarial firm independently creates its own reserving models based on industry loss information, augmented by specific client loss information as well as its own independent assumptions and estimates.
−Removed: Based on various reserving methodologies that the actuarial firm considers appropriate, it creates a loss reserve
−Removed: Link to Table of Contents
−Removed: estimate for each segment in the portfolio and recommends an aggregate loss reserve, including IBNR.
+Added: Based on various reserving methodologies that the actuarial firm considers appropriate, it creates a loss reserve estimate for each segment in the portfolio and recommends an aggregate loss reserve, including IBNR.
In the event of material differences between the Company's aggregated booked reserves and the actuarial firm's recommended reserves, the reserving committee and Audit Committee would be notified, with the reserves adjusted as deemed appropriate.
To date there have been no material differences resulting from the external actuary’s reviews requiring adjustments to the Company’s booked reserves.
−Removed: We do not typically experience significant claims processing backlogs, although such backlogs may occur following a major catastrophic event.
−Removed: At December 31, 2019 and 2018, we did not have a significant backlog in our claims processing.
+Added: The Company does not typically experience significant claims processing backlogs, although such backlogs may occur following a major catastrophic event.
+Added: At December 31, 2020 and 2019, the Company did not have a significant backlog in our claims processing.
There were no significant changes in the actuarial methodology or assumptions relating to the Company’s loss and loss adjustment expense reserves during the year ended December 31, 2020.
+Added: Reinsurance Assets
+Added: Upon adoption of ASU 2016-13, the Company calculated 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 that considers both the Company’s collectibility history on its reinsurance assets as well as representative external loss history.
+Added: The external loss history that the Company uses includes a long-term probability of liquidation study specific to insurance companies.
+Added: Additionally, the life of each of the Company’s reinsurance treaties is also considered as the probability of default is calculated over the contractual length of the reinsurance contracts.
+Added: The credit worthiness of a counterparty is evaluated by considering the credit ratings assigned by independent agencies and individually evaluating all the counterparties.
+Added: The Company manages its credit risk in its reinsurance assets by transacting with insurers and reinsurers that it considers financially sound.
+Added: For its retrocessionaire counterparties that are unrated, the Company may hold collateral in the form of funds withheld, trust accounts and/or irrevocable letters of credit.
+Added: In evaluating credit risk associated with reinsurance balances receivable, the Company considers its right to offset loss obligations or unearned premiums against premiums receivable.
+Added: The Company regularly evaluates its net credit exposure to assess the ability of retrocessionaires to honor their respective obligations.
+Added: Upon adoption of ASU 2016-13, the Company recorded an allowance for expected credit loss on its Reinsurance Assets of $ 0.1 million with an offset to retained earnings.
+Added: At December 31, 2020, the allowance for expected credit losses was $ 0.1 million.
Notes Receivable
Notes receivable represent promissory notes receivable from third parties.
−Removed: These notes are recorded at cost plus accrued interest, if any, net of any valuation allowance.
−Removed: Interest income, change in valuation allowance and realized gains or losses on the sale of notes receivable are included in the caption “Net investment income (loss)” in the Company’s consolidated statements of operations.
−Removed: The Company regularly reviews all notes receivable individually for impairment and records valuation allowance provisions for uncollectible and non-performing notes.
−Removed: When there is uncertainty as to the collection of interest contractually due, the Company places the note on non-accrual status.
+Added: These notes are recorded at cost plus accrued interest, if any, net of valuation allowance for expected credit losses.
+Added: Interest income, changes in the allowance for expected credit losses and unrealized and realized gains or losses on the notes receivable are included in the caption “Net investment income (loss)” in the Company’s consolidated statements of operations.
+Added: The allowance for expected credit losses is calculated using a PD / LGD model that takes into account the Company’s experience as well as representative external loss history.
+Added: The expected loss percentage is calculated as the product of the PD and LGD for each period over the life of a note.
+Added: The Company evaluates the financial condition of the notes receivable counterparties and monitors its exposure on a regular basis.
+Added: At December 31, 2020, the Company considers the note receivable balance to be collectible and has not experienced any default on payments since inception of this note in 2018.
+Added: During the year ended December 31, 2020 the Company agreed to settle a promissory note that had been entered into with a reinsurance counterparty in 2015.
+Added: The Company’s amortized cost associated with the promissory note at the date of settlement was $ 13.3 million.
+Added: In connection with this settlement, the Company received $ 19.1 million, resulting in a gain of $ 5.8 million that was included in “net investment income (loss)” in the Company’s consolidated statements of operations.
+Added: At December 31, 2020 and 2019, $ 0.1 million and $ 0.1 million, respectively, of accrued interest was included in the caption “Notes receivable” in the Company’s consolidated balance sheets.
+Added: When there is uncertainty as to the collection of
+Added: Link to Table of Contents
+Added: interest contractually due, the Company places the note on non-accrual status.
For notes receivable placed on non-accrual status, the notes are presented excluding any accrued interest amount.
1 unchanged sentence
Interest collected on notes that are placed on non-accrual status is recorded as interest income when collected, provided that the recorded value of the note is deemed to be fully collectible.
−Removed: Where doubt exists as to the collectability of the remaining recorded value of the notes placed on non-accrual status, any payments received are applied to reduce the recorded value of the notes.
−Removed: The following table provides a roll-forward of the Company’s provision for valuation allowance:
+Added: Where doubt exists as to the collectibility of the remaining recorded value of the notes placed on non-accrual status, the Company immediately reverses any previous accrued interest through interest income and any payments received are applied to reduce the recorded value of the notes.
+Added: The allowance for expected credit losses for notes receivable is calculated on the amortized cost excluding accrued interest and interest written off due to non-accrual status.
+Added: Charge offs of notes receivable are recorded when all or a portion of the financial asset is deemed uncollectible.
+Added: Full or partial charge offs are recorded as reductions to the amortized cost and deducted from the allowance in the period in which the note receivable is deemed uncollectible.
+Added: In instances where the Company collects cash that it has previously charged off, the recovery will be recognized through earnings or as a reduction of the amortized cost for interest and principal, respectively.
+Added: The following table provides a roll-forward of the Company’s allowance for credit losses on notes receivable:
Year ended December 31
+Added: 2020 2019 2018
($ in thousands)
Balance at beginning of period $ 15,000 $ 9,012 $ 9,012
−Removed: Net increase (decrease) in provision
+Added: Cumulative effect of adoption of ASU 2016-13 at January 1, 2020 750 — —
+Added: Charge offs ( 15,000 ) — —
+Added: Net increase (decrease) in allowance ( 750 ) 5,988 —
Balance at end of period $ — $ 15,000 $ 9,012
−Removed: During the year ended December 31, 2019 , the Company increased the valuation allowance for notes receivable by $6.0 million based on management’s assessment of the counterparties’ credit risk, historical experience, the estimated value of any underlying collateral and other relevant factors.
−Removed: At December 31, 2019 , certain notes receivable that were on non-accrual status, had a carrying value (net of valuation allowance) of $0.0 million ( 2018 :
−Removed: $9.8 million ).
−Removed: At December 31, 2019 and 2018 , $0.1 million and $0.2 million , respectively, of accrued interest was included in the caption “Notes receivable” in the Company’s consolidated balance sheets.
−Removed: Management has assessed the carrying values of the notes receivable, net of valuation allowance,at December 31, 2019 and 2018 , to be fully collectible.
Deposit Assets and Liabilities
2 unchanged sentences
The deposit asset or liability balance is subsequently adjusted using the interest method with a corresponding income or expense recorded in the Company’s consolidated statements of operations under the caption “Other income (expense).” The Company’s deposit assets and liabilities are recorded in the Company’s consolidated balance sheets in the caption “Reinsurance balances receivable” and “Reinsurance balances payable,” respectively.
−Removed: At December 31, 2019 , deposit assets and deposit liabilities were $5.2 million and $56.9 million , respectively ( 2018 :
+Added: At December 31, 2020, deposit assets and deposit liabilities were $ 4.6 million and $ 31.0 million, respectively (December 31, 2019:
$ 5.2 million and $ 56.9 million, respectively).
−Removed: For the year ended December 31, 2019 , 2018 and 2017 , the interest income (expense) on deposit accounted contracts was as follows:
−Removed: Link to Table of Contents
+Added: For the years ended December 31, 2020, 2019, and 2018, the interest income/(expense) on deposit accounted contracts was as follows:
Year ended December 31
+Added: 2020 2019 2018
($ in thousands)
8 unchanged sentences
The Company’s carrying value in an equity method investee company is reflected in the caption ‘‘Other investments’’ in the Company’s consolidated balance sheets.
+Added: Link to Table of Contents
When the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless the Company guaranteed the obligations of the investee company or has committed additional funding (see Notes 3 and 4).
6 unchanged sentences
Financial Instruments
−Removed: The Company invests in debt instruments and equity securities that are classified as “trading securities” and are carried at fair value.
The Company purchases “other investments” which may include investments in private and unlisted equity securities, limited partnerships and commodities, all of which are carried at fair value.
−Removed: For securities classified as “trading securities” and “other investments,” any realized and unrealized gains or losses are determined on the basis of the specific identification method (by reference to cost or amortized cost, as appropriate) and included in the caption “Net investment income (loss)” in the Company’s consolidated statements of operations.
+Added: For securities classified as “other investments,” any realized and unrealized gains or losses are determined on the basis of the specific identification method (by reference to cost or amortized cost, as appropriate) and included in the caption “Net investment income (loss)” in the Company’s consolidated statements of operations.
Interest income and interest expense are recorded on an accrual basis.
−Removed: Prior to the liquidation of the Joint Venture, dividend income and expense were recorded on the ex-dividend date.
−Removed: “Ex-dividend” indicates that the quoted price of a share of stock excludes the value of a declared dividend.
−Removed: Investors purchasing shares between the declaration and ex-dividend dates are entitled to receive the dividend, whereas investors purchasing shares on or after the ex-dividend date are not entitled to the dividend.
−Removed: Link to Table of Contents
−Removed: Transfer of Financial Assets
−Removed: The Company accounts for transfers of financial assets as sales when it has surrendered control over the related assets.
−Removed: Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of the Company’s continuing involvement with the assets transferred.
−Removed: Gains and losses stemming from transfers reported as sales, if any, are included as realized gains (losses) within the caption “Net investment income (loss)” in the accompanying consolidated statements of operations.
−Removed: In instances where a transfer of financial assets does not qualify for sale accounting, the transaction is accounted for as a collateralized borrowing.
−Removed: Accordingly, the related assets remain on the Company’s consolidated balance sheets and continue to be reported and accounted for as if the transfer had not occurred (see Notes 3 and 4 ).
Share-Based Compensation
7 unchanged sentences
The forfeiture rate is reviewed annually and adjusted as necessary.
−Removed: No forfeiture rate is used for restricted shares granted to directors which vest over a twelve -month period.
+Added: No forfeiture rate is used for restricted shares granted to directors which vest over a maximum of twelve-month period.
Determining the fair value of share purchase options at the grant date requires significant estimation and judgment.
4 unchanged sentences
For share purchase options issued under the employee stock incentive plan, the compensation cost is calculated and recognized over the vesting periods on a graded vesting basis (see Note 11).
+Added: Link to Table of Contents
Convertible Notes
8 unchanged sentences
Foreign Exchange
−Removed: The reporting and functional currency of the Company and all its subsidiaries is the U.S.
+Added: The reporting and functional currency of the Company and all its significant subsidiaries is the U.S.
Transactions in foreign currencies are recorded in U.S.
dollars at the exchange rates in effect on the transaction date.
−Removed: 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 and exchange
−Removed: Link to Table of Contents
−Removed: gains and losses, if any, are included in the caption “Other income (expense), net” in the Company’s consolidated statements of operations.
+Added: 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 and exchange gains and losses, if any, are included in the caption “Other income (expense), net” in the Company’s consolidated statements of operations.
Other assets consist primarily of prepaid expenses, fixed assets, right-of-use lease assets, other receivables and deferred tax assets.
+Added: Derivative instruments
+Added: The Company’s derivative financial instruments are recognized in the consolidated balance sheets at their fair values with any changes in unrealized gains and losses included in the caption “Net investment income (loss)” in the Company’s consolidated statements of operations.
+Added: The Company’s derivatives do not qualify as hedges for financial reporting purposes and are recorded in the consolidated balance sheets on a gross basis and not offset against any collateral pledged or received.
Other Liabilities
7 unchanged sentences
• Restricted Stock Units (“RSUs”) issued that would convert to common shares upon vesting;
−Removed: additional potential common shares issuable when stock options are exercised, determined using the treasury stock method;
+Added: • additional potential common shares issuable when in-the-money stock options are exercised, determined using the treasury stock method;
• those common shares with the potential to be issued by virtue of convertible debt and other such convertible instruments, determined using the treasury stock method.
+Added: Link to Table of Contents
Diluted earnings (or loss) per share contemplates a conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share.
2 unchanged sentences
Year ended December 31
+Added: 2020 2019 2018
Weighted average shares outstanding - basic 36,172,216 36,079,419 35,951,659
5 unchanged sentences
The Company has an undertaking from the Governor-in-Cabinet of the Cayman Islands, pursuant to the provisions of the Tax Concessions Law, as amended, that, in the event that the Cayman Islands enacts any legislation that imposes 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.
−Removed: Link to Table of Contents
Verdant is incorporated in Delaware and therefore is subject to taxes in accordance with the U.S.
5 unchanged sentences
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.
+Added: Other than this valuation allowance, the Company has not taken any income tax positions that are subject to significant uncertainty that is reasonably likely to have a material impact on the Company.
Segment Information
−Removed: The Company manages its business on the basis of one operating segment, Property and Casualty Reinsurance.
+Added: The Company has one operating segment, Property and Casualty Reinsurance.
Recent Accounting Pronouncements
Recently Issued Accounting Standards Adopted
−Removed: In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”.
−Removed: Under the new guidance, lessees are required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:
−Removed: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis;
−Removed: and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.
−Removed: Leases (Topic 842) is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.
−Removed: The Company adopted Leases (Topic 842) during the first quarter of 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented.
−Removed: The Company has adopted the following practical expedients:
−Removed: Carry forward of historical lease classifications and current accounting treatment for existing land easements;
−Removed: Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less;
−Removed: Hindsight practical expedient for remeasuring the lease terms on the basis of information obtained between entering into the lease and adopting Leases (Topic 842).
−Removed: Adoption of Leases (Topic 842) resulted in the recognition of operating lease right-of-use asset and corresponding lease liability of $0.3 million which were included in the Company’s condensed consolidated balance sheets under the captions “Other Assets” and “Other Liabilities,” respectively, as of December 31, 2019 .
+Added: As discussed above, the Company adopted ASU 2016-13 during the first quarter of 2020 using a modified retrospective transition method.
+Added: The adoption resulted in a cumulative-effect adjustment to reduce retained earnings by $ 0.9 million as of January 1, 2020.
Recently Issued Accounting Standards Not Yet Adopted
−Removed: In June 2016, the FASB issued ASU No.
−Removed: 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).
−Removed: As compared to current GAAP, which delays the recognition of credit losses until it is probable a loss has been incurred, ASU 2016-13 broadens the information that must be considered in the development of an expected credit loss estimate.
−Removed: Under ASU 2016-13, past events, current conditions, and reasonable and supportable forecasts are all considered in the development of this estimate.
−Removed: ASU 2016-13 is effective for public business entities that are SEC filers for annual and interim periods beginning after December 15, 2019.
−Removed: The financial assets included in the captions “Reinsurance balances receivable,” “Notes Receivable,” and “Loss and loss adjustment expenses recoverable” in the Company’s consolidated balance sheets are carried at amortized cost and are therefore affected by ASU 2016-13.
−Removed: The Company is currently finalizing its assessment of the impact of this guidance as it relates to these balances;
−Removed: however, any consequent adjustments to these balances are not expected to have a material impact on the Company’s consolidated statements of operations and financial position.
−Removed: INVESTMENT IN RELATED PARTY INVESTMENT FUND
−Removed: Effective September 1, 2018, Greenlight Re and GRIL entered into the SILP LPA with DME II.
−Removed: In accordance with the SILP LPA, DME II serves as the general partner of SILP.
−Removed: On September 1, 2018, SILP entered into a SILP investment advisory
+Added: In January 2020, the FASB issued ASU No.
+Added: 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) (“ASU 2020-01”).
+Added: The amendments in ASU 2020-01 clarify certain interactions between the guidance to account for certain equity securities under Topic 321, the guidance to account for investments under the equity method of accounting in Topic 323, and the guidance in Topic 815, which could change how an entity accounts for an equity security under the measurement alternative or a forward contract or
Link to Table of Contents
−Removed: agreement (“IAA”) with DME Advisors pursuant to which DME Advisors is the investment manager for SILP.
−Removed: In addition, on September 1, 2018, Greenlight Re and GRIL, together the “GLRE Limited Partners,” and SILP executed a Participation Agreement pursuant to which the GLRE Limited Partners transferred a participation interest in the assets that were subject to the Joint Venture (except for certain assets that were mutually agreed and excluded from participating) to SILP (collectively referred to as the “LP Transaction.”) SILP issued limited partner interests to the GLRE Limited Partners proportionate to and based on the net asset value transferred by each such entity effective September 1, 2018.
−Removed: The Joint Venture was terminated on January 2, 2019, the date by which all assets were transferred to SILP in accordance with the SILP LPA.
+Added: purchased option to purchase securities that, upon settlement of the forward contract or exercise of the purchased option, would be accounted for under the equity method of accounting or the fair value option in accordance with Topic 825, Financial Instruments.
+Added: ASU 2020-01 is effective for public business entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.
+Added: The adoption of ASU 2020-01 is not expected to have a material impact on the Company’s consolidated financial statements.
+Added: In August 2020, the FASB issued ASU No.
+Added: 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):
+Added: Accounting for Convertible Instruments and Contracts in an Entity's Own Equity (“ASU 2020-06”).
+Added: ASU 2020-06 is designed to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity.
+Added: The amendments remove the separation models in Subtopic 470-20 for certain contracts.
+Added: As a result, embedded conversion features would not be presented separately in equity;
+Added: rather, the contract would be accounted for as a single liability measured at its amortized cost.
+Added: Subtopic 815-40 simplifies the analysis of whether an embedded conversion feature meets the derivative scope exception for contracts that are indexed to, and classified in, stockholders equity, as well as addresses the computation of earnings per share for convertible debt instruments.
+Added: ASU 2020-06 requires the application of the if-converted method when calculating diluted earnings per share.
+Added: ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 using either a modified retrospective method of transition or a fully retrospective method of transition.
+Added: Early adoption is permitted no earlier than for fiscal years beginning after December 15, 2020.
+Added: The Company is currently evaluating the effect that the new standard will have on its consolidated financial statements.
+Added: INVESTMENT IN RELATED PARTY INVESTMENT FUND
+Added: Prior to January 2, 2019, the Company and its reinsurance subsidiaries were party to a joint venture agreement (the “venture agreement”) with DME Advisors, LP (“DME Advisors”) and DME Advisors LLC (“DME”) under which the Company, its reinsurance subsidiaries and DME were participants in a joint venture (the “Joint Venture”) for the purpose of managing certain jointly held assets.
+Added: DME, DME II (as defined below) and DME Advisors are related to the Company and each is an affiliate of David Einhorn, Chairman of the Company’s Board of Directors.
+Added: On September 1, 2018, the Company entered into an amended and restated exempted limited partnership agreement (as amended by that certain letter agreement dated as of August 5, 2020, 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”), and the initial limited partner (each, a “Partner”).
+Added: The SILP LPA, in conjunction with a participation agreement, replaced the venture agreement and assigned and/or transferred Greenlight Re’s and GRIL’s invested assets in the Joint Venture to SILP.
+Added: The Joint Venture was terminated on January 2, 2019 by which date all assets were transferred to SILP.
+Added: On September 1, 2018, SILP also entered into a SILP investment advisory agreement (“IAA”) with DME Advisors pursuant to which DME Advisors is the investment manager for SILP.
The Company has concluded that SILP qualifies as a variable interest entity (“VIE”) under U.S.
6 unchanged sentences
The Company’s investment in SILP is presented in the Company’s consolidated balance sheets in the caption “Investment in related party investment fund.”
−Removed: The Company accounted for the transfer of the investment assets to SILP as a sale.
−Removed: The underlying investment liabilities were extinguished from the Company’s consolidated balance sheet as they were either settled, novated or legally transferred to SILP as part of the LP Transaction.
−Removed: There were no net gains or losses resulting from the transfer of net assets, and there was no cash paid or received by the Company as part of the LP Transaction.
−Removed: At December 31, 2018, certain assets that were subject to the Participation Agreement for which the GLRE Limited Partners received an interest in SILP had not transferred legal title to SILP.
−Removed: The Company accounted for those assets as collateralized borrowing and recorded a liability in the caption “Due to related party investment fund.” These assets were transferred to SILP during the first quarter of 2019.
−Removed: During the year ended December 31, 2019 , SILP’s investment portfolio was de-risked in order to reduce the Company’s investment volatility in the near-term.
−Removed: As a result, a large proportion of the Company’s investment assets in SILP was held in cash and short-term treasuries as of December 31, 2019 .
+Added: During 2019, SILP’s investment portfolio was de-risked in order to reduce the Company’s investment volatility in the near-term.
+Added: As a result, a significant proportion of the Company’s investment assets in SILP was held in cash and short-term treasuries as of December 31, 2019.
+Added: On August 5, 2020, the Company entered into an amended and restated letter agreement with DME Advisors and DME II whereby the deployed Investment Portfolio can not exceed an amount equal to 50 % of the Company’s shareholders’ equity, as reported in the Company’s then most recent quarterly U.S.
+Added: GAAP financial statements, adjusted monthly for investment gains and losses as reported by SILP during any intervening period.
+Added: Link to Table of Contents
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.
6 unchanged sentences
The GLRE Limited Partners can redeem their assets from SILP for operational purposes by providing three business days’ notice to DME II.
−Removed: As of December 31, 2019 , the majority of SILP’s long investments are composed of cash, short-term U.S.
−Removed: treasuries and publicly-traded equity securities, which can be readily liquidated to meet any GLRE Limited Partner’s redemption requests.
−Removed: The Company’s share of the change in the net asset value of SILP for the year ended December 31, 2019 and the period from September 1, 2018 (commencement of operations) to December 31, 2018 was $46.1 million and $(60.6) million , respectively, and shown in the caption “Income (loss) from investment in related party investment fund” in the Company’s consolidated statements of operations.
−Removed: During the first quarter of 2019, the Company transferred the rights to $36.7 million of remaining net investments from Greenlight Re and GRIL’s Joint Venture investment accounts to SILP in exchange for limited partnership interests of the same amount, resulting in no net gain or loss.
+Added: As of December 31, 2020, the majority of SILP’s long investments are composed of cash and publicly-traded equity securities, which can be readily liquidated to meet the GLRE Limited Partners’ redemption requests.
+Added: The Company’s share of the change in the net asset value of SILP for the years ended December 31, 2020, and 2019 and the period from September 1, 2018 (commencement of operations) to December 31, 2018 was $ 4.4 million, $ 46.1 million and $( 60.6 ) million respectively, and shown in the caption “Income (loss) from investment in related party investment fund” in the Company’s consolidated statements of operations.
+Added: The change in the net asset value of SILP for the year ended December 31, 2020 was primarily driven by withdrawals made by the GLRE Limited Partners for paying claims and posting collateral to reinsurance clients.
As of December 31, 2020, the Company’s investments in SILP was in excess of 10 % of the Company’s total shareholders’ equity, with fair value of $ 166.7 million (2019:
1 unchanged sentence
50.3 %), of total shareholders’ equity.
−Removed: Link to Table of Contents
The Company has determined that for its fiscal year ended December 31, 2020, the Company’s investment in SILP met at least one of the conditions of a significant subsidiary under SEC’s Regulation S-X, Rule 3-09.
2 unchanged sentences
Summarized Statement of Assets and Liabilities of Solasglas Investments, LP
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: December 31, 2020 December 31, 2019
($ in thousands)
4 unchanged sentences
Interest and dividends receivable 59 47
+Added: Total assets 365,960 348,405
Liabilities and partners’ capital
−Removed: Investments sold, not yet purchased, at fair value
−Removed: Notes Payable
+Added: Investments sold short, at fair value ( 131,902 ) ( 47,834 )
Derivative contracts, at fair value ( 4,156 ) ( 2,054 )
3 unchanged sentences
Total liabilities ( 145,841 ) ( 51,997 )
+Added: Net Assets $ 220,119 $ 296,408
GLRE Limited Partners’ share of Net Assets $ 166,735 $ 240,056
1 unchanged sentence
Summarized Statement of Operations of Solasglas Investments, LP
−Removed: Year ended December 31, 2019
−Removed: From September 1, 2018 (commencement of operations) to December 31, 2018
+Added: Year ended December 31 From September 1, 2018 (commencement of operations) to December 31, 2018
($ in thousands)
4 unchanged sentences
Management fee ( 2,808 ) ( 4,893 ) ( 3,100 )
+Added: Interest ( 798 ) ( 2,408 ) ( 2,627 )
+Added: Dividends ( 861 ) ( 1,670 ) ( 1,608 )
Professional fees and other ( 949 ) ( 1,141 ) ( 483 )
7 unchanged sentences
GLRE Limited Partners’ share of net income (loss) (1)
−Removed: 1 Net of management fees of $4.9 million and $3.1 million for year ended December 31, 2019 and the period from September 1, 2018 (inception) to December 31, 2018 respectively, and net of accrued performance allocation of $5.0 million and nil for the year ended December 31, 2019 and the period from inception to December 31, 2018, respectively.
−Removed: See Note 14 for further details.
+Added: $ 4,431 $ 46,056 $ ( 60,573 )
+Added: 1 Net income (loss) is net of management fees and performance allocation presented below:
+Added: Year ended December 31 From September 1, 2018 (commencement of operations) to December 31, 2018
+Added: ($ in thousands)
+Added: Management fees $ 2,808 $ 4,893 $ 3,100
+Added: Performance allocation $ 443 $ 4,981 $ —
+Added: Total $ 3,251 $ 9,874 $ 3,100
+Added: See Note 14 for further details on management fees and performance allocation.
FINANCIAL INSTRUMENTS
−Removed: Prior to the termination of the Joint Venture, the Company, via the Joint Venture, purchased and sold various financial instruments, including listed and unlisted equities, corporate and sovereign debt, commodities, futures, put and call options, currency forwards, other derivatives and similar instruments sold, not yet purchased.
−Removed: These instruments were transferred to SILP as part of the LP Transaction.
−Removed: See Note 3 for further details.
Purchases and sales of investments are disclosed in the Company’s consolidated statements of cash flows.
The following table summarizes the change in unrealized gains and losses and the realized gains and losses on financial instruments included in the caption “Net investment income (loss)” in the Company’s consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018:
+Added: Link to Table of Contents
Year ended December 31
+Added: 2020 2019 2018
($ in thousands)
3 unchanged sentences
Change in unrealized gains and losses $ 25,909 $ 8,380 $ ( 32,597 )
−Removed: Link to Table of Contents
−Removed: Equity securities, trading
−Removed: At December 31, 2019 , the Company held no equity securities.
−Removed: At December 31, 2018 , the following long positions were included in the caption “Equity securities, trading”:
−Removed: ($ in thousands)
−Removed: Equities – listed
−Removed: Total equity securities
−Removed: Other Investments
−Removed: “Other investments” include private securities and investments accounted for under the equity method which are not significant to present separately on the balance sheet.
+Added: Other I nvestments
+Added: The Company’s “Other investments” are composed of the following:
+Added: • Private investments and unlisted equities, which consist primarily of investments related to Innovations to support technology innovators in the (re)insurance space by providing capital, risk capacity, and access to a broad insurance network,
+Added: • Derivative financial instruments associated with the Company’s Innovations investments, and
+Added: • An investment accounted for under the equity method.
At December 31, 2020, the following securities were included in the caption “Other investments”:
−Removed: Fair value / carrying value
+Added: Cost Unrealized
+Added: gains Unrealized
+Added: losses Fair value / carrying value
($ in thousands)
Private investments and unlisted equities $ 12,414 $ 10,679 $ ( 1,300 ) $ 21,793
+Added: Derivative financial instruments (not designated as hedging instruments) — 1,080 — 1,080
Investment accounted for under the equity method — — — 6,545
1 unchanged sentence
At December 31, 2019, the following securities were included in the caption “Other investments”:
−Removed: Fair value / carrying value
+Added: Cost Unrealized
+Added: gains Unrealized
+Added: losses Fair value / carrying value
($ in thousands)
−Removed: Private investments and unlisted equity funds
+Added: Private investments and unlisted equities $ 10,420 $ 265 $ ( 4 ) $ 10,681
Investment accounted for under the equity method — — — 5,703
Total other investments $ 16,384
−Removed: Private and unlisted equity funds include private equity securities that did not have readily determinable fair values and the Company applied the measurement alternative under ASU 2016-01 and ASU 2018-03.
−Removed: The carrying values of the private equity securities are determined based on the original cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
−Removed: At December 31, 2019 the carrying value of the private equity securities without readily determinable fair value was $10.7 million (December 31, 2018 :
−Removed: $6.4 million ).
−Removed: The carrying value of these private equity securities included an upward adjustment of $0.2 million based on an observable price change during the year ended December 31, 2019.
−Removed: There were no other significant upward or downward adjustments to the carrying values of the private equity securities for the year ended December 31, 2019 .
−Removed: At December 31, 2019 , the Company held a 58% interest in AccuRisk Holdings LLC (“AccuRisk”) and had provided a $6.0 million credit facility to AccuRisk.
−Removed: The Company’s involvement in AccuRisk includes providing capital and funding for AccuRisk’s expansion plans and providing reinsurance to business produced by AccuRisk.
−Removed: The Company has determined that AccuRisk is a VIE, of which the Company is not the primary beneficiary.
−Removed: The Company has accounted for its investment in AccuRisk under the equity method and included it in the caption “Other Investments” in the Company’s consolidated balance
+Added: Private investments and unlisted equities include securities that do not have readily determinable fair values.
+Added: The carrying values of these holdings are determined based on their original cost minus impairment, if any, plus or minus changes resulting from observable price changes.
+Added: At December 31, 2020, the carrying value of private investments and unlisted equities was $ 21.8 million (2019:
+Added: $ 10.7 million), and incorporated upward adjustments of $ 9.1 million and $ 0.2 million during the years ended December 31, 2020, and 2019, respectively, excluding any unrealized gains or losses related to changes in foreign currency exchange rates.
+Added: The net upward adjustments since the acquisition of these private investments was $ 9.3 million and $ 0.2 million, as of December 31, 2020 and 2019, respectively.
+Added: The Company’s investment accounted for under the equity method represents its investment in AccuRisk Holdings LLC (“AccuRisk”), a Chicago, Illinois-based managing general underwriter focused on employee and health insurance benefits.
+Added: At December 31, 2020, the Company held a 58 % (2019:
+Added: 58 %) economic interest in AccuRisk and had provided a $ 6.0 million credit facility.
+Added: In addition to providing capital and funding in support of AccuRisk’s expansion plans, the Company also
Link to Table of Contents
−Removed: The carrying value of AccuRisk is adjusted based on the Company’s share of ownership, including its share of the income (loss) reported in quarterly management accounts by AccuRisk.
−Removed: The Company’s maximum exposure to loss relating to AccuRisk is limited to the carrying amount of its investment in AccuRisk plus any loans outstanding to AccuRisk (see Note 15 ).
+Added: provides reinsurance capacity for business produced by AccuRisk.
+Added: The Company has determined that AccuRisk is a VIE, of which the Company is not the primary beneficiary.
+Added: The Company’s carrying value represents its ownership share of AccuRisk’s net assets.
+Added: The Company’s maximum exposure to loss relating to AccuRisk is limited to the carrying amount of its investment, plus the credit facility extended.
For the year ended December 31, 2020, the Company’s share of AccuRisk’s net income (loss) was $ 0.8 million (2019:
+Added: $ 0.7 million, 2018:
$( 0.2 ) million) which was included in the caption “Net investment income (loss)” in the Company’s consolidated statements of operations.
+Added: Derivative instruments include warrants issued by certain entities granting the Company the right, but not the obligation, to purchase shares at a specified price on or before the maturity date.
+Added: During the year ended December 31, 2020, warrants were issued to the Company in connection with certain Innovations-related investments and were not designated as hedging instruments.
+Added: The Company’s maximum exposure to loss relating to these warrants is limited to their carrying amount.
+Added: The carrying amount represents the fair value which is determined based on the Black-Scholes option pricing model.
+Added: At December 31, 2020, the carrying value of the derivative instruments was $ 1.1 million.
+Added: The Company had no derivative instruments during the year ended December 31, 2019.
Fair Value Hierarchy
9 unchanged sentences
This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.
−Removed: As of December 31, 2019 , the Company did not carry any investments at fair value that were assigned a Level within the fair value hierarchy.
−Removed: The following table presents the Company’s investments, categorized by the level of the fair value hierarchy as of December 31, 2018 :
−Removed: Fair value measurements as of December 31, 2018
−Removed: Quoted prices in
−Removed: active markets
−Removed: Significant other
−Removed: ($ in thousands)
−Removed: Listed equity securities
−Removed: Private and unlisted equity securities
−Removed: Investment in related party investment fund measured at net asset value (1) (2)
−Removed: Equities without readily determinable fair values for which measurement alternative is applied
−Removed: Investment accounted for under the equity method
−Removed: Total investments
−Removed: (1) Investments measured at fair value using the net asset value practical expedient have not been classified in the fair value hierarchy.
−Removed: The fair value amounts are presented in the above table to facilitate reconciliation to the consolidated balance sheets.
−Removed: (2) See Note 3 “Investment in related party investment fund”.
−Removed: The Company’s ”Investment in related party investment fund” is measured at fair value using the net asset value practical expedient, and is therefore not classified within the fair value hierarchy (See Note 3 for further details).
−Removed: The carrying value of investments accounted for under the equity method is based on the Company's share of the investees’ net assets.
−Removed: Link to Table of Contents
−Removed: The following table presents the reconciliation of the balances for all investments measured at fair value using significant unobservable inputs (Level 3) for the year ended December 31, 2019 :
−Removed: Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
−Removed: Year ended December 31, 2019
−Removed: Debt instruments
−Removed: Private and unlisted equity securities
−Removed: ($ in thousands)
−Removed: Beginning balance
−Removed: Total realized and unrealized gains (losses) and amortization included in earnings, net
−Removed: Transfers out of Level 3
−Removed: Ending balance
−Removed: During the year ended December 31, 2019 , the sales of private and unlisted equities measured at fair value using Level 3 inputs were the result of the LP Transaction.
−Removed: There were no other transfers between Level 1, Level 2 or Level 3 during the year ended December 31, 2019 .
−Removed: The following table presents the reconciliation of the balances for all investments measured at fair value using significant unobservable inputs (Level 3) for the year ended December 31, 2018:
−Removed: Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
−Removed: Year ended December 31, 2018
−Removed: Debt instruments
−Removed: Private and unlisted equity securities
−Removed: ($ in thousands)
−Removed: Beginning balance
−Removed: Total realized and unrealized gains (losses) and amortization included in earnings, net
−Removed: Transfers out of Level 3
−Removed: Ending balance
−Removed: During the year ended December 31, 2018, the sales of debt instruments and private and unlisted equities measured at fair value using Level 3 inputs were the result of the LP Transaction.
−Removed: For the year ended December 31, 2018 the private and unlisted equity securities without readily determinable fair values, for which measurement alternative is applied, were transferred out of Level 3 fair value hierarchy.
−Removed: There were no other transfers between Level 1, Level 2 or Level 3 during the year ended December 31, 2018.
+Added: The Company’s derivative instruments are valued on the basis of Level 3 inputs involving the Black-Scholes option pricing model.The Company used the carrying value of the underlying stock as an input in the option pricing model.
+Added: The underlying stock does not have readily determinable fair value and is determined based on its original cost minus impairment, if any, plus or minus changes resulting from observable price changes.
+Added: The other assumptions applied to the option pricing model included risk free rate of 0.50 % and estimated volatility of 50 %.
+Added: For the derivative instruments valued on the basis of Level 3 inputs, the change in unrealized gain for the year ended December 31, 2020 of $ 1.1 million was included in the caption “Net investment income (loss) in the Company’s consolidated statements of operations.
+Added: As of December 31, 2020 and 2019, the Company did not carry any other investments at fair value that were assigned a Level within the fair value hierarchy.
+Added: The Company’s investment in the related party investment fund is measured at fair value using the net asset value practical expedient, and is therefore not classified within the fair value hierarchy.
+Added: (See Note 3 for further details on the related party investment fund).
Financial Instruments Disclosed, But Not Carried, at Fair Value
−Removed: The captions “Notes receivable (net of valuation allowance)” and “Convertible senior notes payable” are composed of financial instruments that are carried at amortized cost.
−Removed: The carry values of these financial instruments approximate their fair values, which the Company has determined on the basis of Level 2 inputs for its convertible senior notes payable, and Level 3 inputs for its notes receivable.
−Removed: Link to Table of Contents
+Added: The captions “Notes receivable (net of allowance for expected credit loss)” and “Convertible senior notes payable” represent financial instruments that are carried at amortized cost.
+Added: The carrying values of the notes receivable (net of allowance for expected credit loss) approximate their fair values, which the Company has determined on the basis of Level 3 inputs.
+Added: 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 9 ) .
CASH AND CASH EQUIVALENTS
−Removed: The Company’s cash and cash equivalents as of December 31, 2019 and 2018 were composed of the following:
−Removed: December 31, 2019
−Removed: December 31, 2018
−Removed: ($ in thousands)
−Removed: Cash at banks
−Removed: Cash held with brokers
−Removed: Total cash and cash equivalents
−Removed: Due to the short term nature of cash and cash equivalents, the above noted carrying values approximate their fair value.
+Added: The Company’s cash and cash equivalents as of December 31, 2020 and 2019 were composed of cash at banks.
+Added: Link to Table of Contents
+Added: Due to the short term nature of cash and cash equivalents, the carrying values of cash at banks approximate their fair value.
Cash at banks include cash held at non-U.S.
3 unchanged sentences
As of December 31, 2020 and 2019, the restricted cash and cash equivalents were composed of the following:
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: December 31, 2020 December 31, 2019
($ in thousands)
3 unchanged sentences
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES
−Removed: There were no significant changes in the actuarial methodology or assumptions relating to the Company’s loss and loss adjustment expense reserves for the year ended December 31, 2019 .
+Added: At December 31, 2020, the loss and loss adjustment expense reserves included estimated amounts for several catastrophe events.
+Added: For significant catastrophe events including, but not limited to, hurricanes, typhoons, floods, wildfires and pandemics, loss reserves are generally established based on loss payments and case reserves reported by clients when, and if, received.
+Added: To establish IBNR loss estimates, the Company makes use of, among other things, the following:
+Added: • estimates communicated by ceding companies;
+Added: • information received from clients, brokers and loss adjusters;
+Added: • an understanding of the underlying business written and its exposures to catastrophe event related losses;
+Added: • industry data;
+Added: • catastrophe scenario modelling software;
+Added: • management’s judgement.
+Added: The COVID-19 pandemic is unprecedented.
+Added: Therefore, the Company does not have previous loss experience on which to base its estimates for loss and loss adjustment expenses related to the COVID-19 pandemic.
+Added: The determination of the Company's estimate was based on:
+Added: • a review of in-force treaties that may provide coverage and incur losses;
+Added: • catastrophe and scenario modeling analyses and results shared by cedents;
+Added: • preliminary loss estimates received from clients and their analysts and loss adjusters;
+Added: • reviews of industry insured loss estimates and market share analyses;
+Added: • management’s judgement.
+Added: Significant assumptions on which the Company's estimates of reserves for the COVID-19 pandemic losses and loss adjustment expenses are based include:
+Added: • the scope of coverage provided by the underlying policies, particularly those that provide for business interruption coverage;
+Added: • the regulatory, legislative or judicial actions and social impact that could influence contract interpretations across the insurance industry;
+Added: • the extent of economic contraction caused by the COVID-19 pandemic, particularly in the United States;
+Added: • the ability of the cedents and insured to mitigate some or all of their losses.
+Added: While the Company believes its estimate of loss and loss adjustment expense reserves for the COVID-19 pandemic is adequate as of December 31, 2020 based on available information, actual losses may ultimately differ materially from the Company's current estimates.
+Added: The Company will continue to monitor the appropriateness of its assumptions as new information becomes available and will adjust its estimates accordingly.
+Added: Such adjustments may be material to the Company's results of operations and financial condition.
+Added: Link to Table of Contents
+Added: There were no significant changes in the actuarial methodology or reserving process related to the Company’s loss and loss adjustment expense reserves for the year ended December 31, 2020.
At December 31, 2020 and 2019, loss and loss adjustment expense reserves were composed of the following:
1 unchanged sentence
Case reserves $ 176,805 $ 217,834
−Removed: Link to Table of Contents
+Added: IBNR 317,374 252,754
+Added: Total $ 494,179 $ 470,588
A summary of changes in outstanding loss and loss adjustment expense reserves for all lines of business consolidated
for the years ended December 31, 2020, 2019, and 2018 is as follows:
+Added: Consolidated 2020 2019 2018
($ in thousands)
3 unchanged sentences
Incurred losses related to:
+Added: Current year 333,096 357,237 363,871
+Added: Prior years 4,737 31,250 2
Total incurred 337,833 388,487 363,873
Paid losses related to:
+Added: Current year ( 109,509 ) ( 167,508 ) ( 160,975 )
+Added: Prior years ( 195,726 ) ( 217,998 ) ( 197,097 )
+Added: Total paid ( 305,235 ) ( 385,506 ) ( 358,072 )
Foreign currency revaluation 1,673 1,119 ( 1,765 )
2 unchanged sentences
Gross balance at December 31 $ 494,179 $ 470,588 $ 482,662
+Added: Link to Table of Contents
The changes in the outstanding loss and loss adjustment expense reserves for health claims for the years ended December 31, 2020, 2019, and 2018 are as follows:
+Added: Health 2020 2019 2018
($ in thousands)
3 unchanged sentences
Incurred losses related to:
+Added: Current year 35,911 33,736 56,868
+Added: Prior years 1,321 3,569 1,508
Total incurred 37,232 37,305 58,376
Paid losses related to:
+Added: Current year ( 20,988 ) ( 17,410 ) ( 34,696 )
+Added: Prior years ( 16,822 ) ( 26,334 ) ( 21,359 )
+Added: Total paid ( 37,810 ) ( 43,744 ) ( 56,055 )
Foreign currency revaluation — — —
6 unchanged sentences
This net adverse development resulted primarily from the following:
+Added: Adverse developments:
+Added: • $ 7.6 million of adverse loss development on a multi-line contract for treaty years 2015 to 2018, resulting from deterioration in reported claims.
+Added: • $ 1.9 million of adverse loss development on general liability contracts, primarily relating to a 2017 treaty year contract resulting from deterioration in reported claims.
+Added: • $ 1.9 million of adverse loss development on specialty health contracts primarily arising from a few large medical claims reported on the 2019 treaty year.
+Added: • $ 1.5 million of adverse loss development on motor contracts relating to the 2018 and 2019 treaty years, partially offset by favorable loss development on treaty years 2015 to 2017.
+Added: Favorable developments:
+Added: • $ 4.5 million of favorable development on prior year property contracts primarily resulting from lower than anticipated losses relating to the 2017 and 2018 catastrophe events, partially offset by adverse loss development on 2019 contracts.
+Added: • $ 2.2 million of favorable loss development on solicitors’ professional indemnity contracts resulting primarily from lower than expected claims on prior accident years.
+Added: • $ 1.9 million of favorable loss development on a professional liability contract relating to treaty year 2008 where the reported claims have been lower than those previously anticipated.
+Added: The remaining development on prior year loss and LAE reserves recognized in 2020 related to several smaller adjustments made across various lines of business.
Link to Table of Contents
+Added: Year ended December 31, 2019
+Added: During the year ended December 31, 2019, the Company experienced $ 31.3 million in net adverse development on prior year loss and LAE reserves.
+Added: This net adverse development resulted primarily from the following:
Adverse developments:
11 unchanged sentences
• $ 3.8 million of adverse loss development on solicitors professional indemnity contracts resulting primarily from several large claims being reported on prior accident years;
−Removed: $2.0 million of adverse loss development on general liability contracts, spread over treaty years 2012-2017, resulting from deteriorations in claims experience;
+Added: • $ 2.0 million of adverse loss development on general liability contracts, spread over treaty years 2012-2017, resulting from deterioration in claims experience;
• $ 1.8 million of adverse loss development on surety business, net of retrocession recoveries, due to deterioration on several previously reported claims for one contract.
5 unchanged sentences
The remaining net favorable development on prior year loss and LAE reserves recognized in 2018 related to several smaller adjustments made across various lines of business.
−Removed: Year ended December 31, 2017
−Removed: During the year ended December 31, 2017, the Company experienced $36.2 million in net adverse development on prior year loss and LAE reserves.
−Removed: This net adverse development resulted primarily from the following:
−Removed: $10.7 million of adverse loss development associated with various classes of professional liability exposure, driven by additional reporting on individual claims, as well as the Company’s assessment of industry-wide loss ratio performance;
Link to Table of Contents
−Removed: $4.3 million of adverse loss development associated with motor contracts based on re-projection of ultimate losses using client reporting patterns;
−Removed: $4.1 million of adverse loss development relating to Florida homeowners’ insurance contracts, largely driven by “assignment of benefits” issues whereby homeowners assign their rights for filing and settling claims to attorneys and public adjusters;
−Removed: $3.7 million of adverse loss development associated with specialty health contracts arising from frequency of medical claims reported;
−Removed: $2.2 million of adverse loss development due to large claims reported on a surety contract.
−Removed: The remaining net adverse development on prior year loss and LAE reserves recognized in 2017 related to several smaller adjustments made across various lines of business.
Disclosures about Short Duration Contracts
−Removed: The Company manages its business on the basis of one operating segment, Property & Casualty Reinsurance, and categorizes its business as Property, Casualty and Other.
+Added: The Company has one operating segment, Property & Casualty Reinsurance, and categorizes its business as Property, Casualty and Other.
The Company’s loss development tables presented below have been disaggregated by lines of business for the years ended from December 31, 2011 to 2020.
2 unchanged sentences
In addition, the incurred and paid claims relating to accident and health business have been presented separately as "Health".
−Removed: Other specialty business including financial, aviation, energy and marine, which are individually insignificant to our overall business, have been grouped together as "Other".
+Added: Other specialty business including financial, aviation, crop, cyber, energy and marine, which are individually insignificant to our overall business, have been grouped together as "Other".
Contracts that cover more than one line of business are grouped as "Multi-line".
1 unchanged sentence
Health claims have been disaggregated and presented separately.
−Removed: The information in the tables below about incurred and paid claims development for the years ended December 31, 2010 to 2018 , is presented as unaudited supplementary information.
Link to Table of Contents
−Removed: Incurred claims and allocated claim adjustment expenses, net of reinsurance
−Removed: December 31, 2019
−Removed: For the years ended December 31,
−Removed: Total IBNR plus expected development on reported claims
+Added: The information in the tables below about incurred and paid claims development for the years ended December 31, 2011 to 2019, is presented as unaudited supplementary information.
+Added: Totals may not sum due to rounding.
+Added: Incurred claims and allocated claim adjustment expenses, net of reinsurance December 31, 2020
+Added: For the years ended December 31, Total IBNR plus expected development on reported claims
Accident year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 unchanged sentence
($ in thousands)
+Added: 2011 $ 36,140 $ 36,212 $ 35,821 $ 35,800 $ 35,595 $ 35,595 $ 35,595 $ 35,566 $ 35,566 $ 35,566 $ —
+Added: 2012 24,712 23,088 22,780 22,681 22,671 22,671 22,658 22,658 22,658 —
+Added: 2013 30,544 33,841 34,203 33,960 33,945 33,945 33,944 33,935 11
+Added: 2014 32,875 30,191 29,514 29,072 29,031 28,969 28,964 4
+Added: 2015 34,097 33,530 34,116 33,894 33,885 33,881 6
+Added: 2016 37,747 40,889 41,255 41,355 41,305 164
+Added: 2017 45,007 46,455 46,687 46,535 15
+Added: 2018 56,868 60,176 59,782 141
+Added: 2019 33,736 35,673 2,223
+Added: 2020 35,911 14,922
+Added: Total $ 374,209 17,485
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
3 unchanged sentences
($ in thousands)
+Added: 2011 $ 26,979 $ 35,542 $ 35,814 $ 35,800 $ 35,595 $ 35,595 $ 35,595 $ 35,566 $ 35,566 $ 35,566
+Added: 2012 14,896 22,691 22,780 22,679 22,671 22,671 22,658 22,658 22,658
+Added: 2013 21,459 33,841 34,024 33,957 33,944 33,944 33,944 33,924
+Added: 2014 19,056 28,515 29,117 29,038 29,032 28,970 28,960
+Added: 2015 14,529 31,802 34,044 33,894 33,876 33,875
+Added: 2016 21,881 39,988 41,255 41,162 41,141
+Added: 2017 23,834 44,125 46,615 46,520
+Added: 2018 34,696 58,713 59,640
+Added: 2019 17,410 33,450
+Added: Total 356,724
All outstanding liabilities before 2011, net of reinsurance —
1 unchanged sentence
Link to Table of Contents
−Removed: Incurred claims and allocated claim adjustment expenses, net of reinsurance
−Removed: December 31, 2019
−Removed: For the years ended December 31,
−Removed: Total IBNR plus expected development on reported claims
+Added: Incurred claims and allocated claim adjustment expenses, net of reinsurance December 31, 2020
+Added: For the years ended December 31, Total IBNR plus expected development on reported claims
Accident year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 unchanged sentence
($ in thousands)
+Added: 2011 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ —
+Added: 2012 — — — — — — — — — —
+Added: 2013 — — — — — — — — —
+Added: 2014 2,390 2,390 2,390 2,609 2,625 2,586 2,653 658
+Added: 2015 28,005 28,158 30,601 32,108 31,012 32,413 7,574
+Added: 2016 55,865 60,182 60,904 59,957 62,417 19,549
+Added: 2017 82,031 79,652 83,421 85,251 31,017
+Added: 2018 59,091 51,147 54,038 21,623
+Added: 2019 46,442 45,414 21,877
+Added: 2020 59,121 46,562
+Added: Total $ 341,307 $ 148,861
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
3 unchanged sentences
($ in thousands)
+Added: 2011 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ —
+Added: 2012 — — — — — — — — —
+Added: 2013 — — — — — — — —
+Added: 2014 — — 145 566 1,092 1,413 1,995
+Added: 2015 33 2,843 10,098 16,177 19,127 24,839
+Added: 2016 5,872 16,652 27,243 33,154 42,867
+Added: 2017 9,586 27,459 39,804 54,234
+Added: 2018 8,159 20,822 32,415
+Added: 2019 11,067 23,538
+Added: Total 192,446
All outstanding liabilities before 2011, net of reinsurance —
2 unchanged sentences
General Liability
−Removed: Incurred claims and allocated claim adjustment expenses, net of reinsurance
−Removed: December 31, 2019
−Removed: For the years ended December 31,
−Removed: Total IBNR plus expected development on reported claims
+Added: Incurred claims and allocated claim adjustment expenses, net of reinsurance December 31, 2020
+Added: For the years ended December 31, Total IBNR plus expected development on reported claims
Accident year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 unchanged sentence
($ in thousands)
+Added: 2011 $ 20,925 $ 30,693 $ 40,756 $ 44,897 $ 61,446 $ 77,105 $ 77,105 $ 77,105 $ 77,105 $ 77,105 $ —
+Added: 2012 12,626 18,133 16,921 29,554 31,145 31,161 31,274 30,902 30,924 —
+Added: 2013 3,018 2,689 4,666 4,511 4,510 4,916 4,770 4,648 —
+Added: 2014 1,238 1,229 1,174 1,033 1,355 1,000 1,043 570
+Added: 2015 1,699 1,690 1,756 1,979 2,152 2,190 1,245
+Added: 2016 6,203 6,519 7,124 7,867 8,095 1,987
+Added: 2017 5,442 6,536 7,390 8,460 4,070
+Added: 2018 2,953 3,490 4,000 1,680
+Added: 2019 1,006 1,133 904
+Added: 2020 1,673 1,602
+Added: Total $ 139,271 $ 12,057
General Liability
4 unchanged sentences
($ in thousands)
+Added: 2011 $ 2,873 $ 11,751 $ 20,030 $ 25,018 $ 32,954 $ 77,105 $ 77,105 $ 77,105 $ 77,105 $ 77,105
+Added: 2012 1,750 9,926 13,142 15,836 30,667 30,687 30,891 30,902 30,924
+Added: 2013 1,371 1,917 2,298 4,191 4,274 4,652 4,770 4,648
+Added: 2014 18 146 413 548 492 762 473
+Added: 2015 69 293 532 547 925 945
+Added: 2016 122 1,589 3,277 4,670 6,109
+Added: 2017 136 1,412 2,824 4,390
+Added: 2018 165 1,286 2,320
+Added: Total 127,214
All outstanding liabilities before 2011, net of reinsurance —
2 unchanged sentences
Motor Casualty
−Removed: Incurred claims and allocated claim adjustment expenses, net of reinsurance
−Removed: December 31, 2019
−Removed: For the years ended December 31,
−Removed: Total IBNR plus expected development on reported claims
+Added: Incurred claims and allocated claim adjustment expenses, net of reinsurance December 31, 2020
+Added: For the years ended December 31, Total IBNR plus expected development on reported claims
Accident year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 unchanged sentence
($ in thousands)
−Removed: Link to Table of Contents
+Added: 2011 $ 53,035 $ 57,498 $ 57,342 $ 62,921 $ 70,880 $ 70,435 $ 70,495 $ 70,495 $ 70,478 $ 70,478 $ —
+Added: 2012 132,284 131,196 131,896 131,202 131,305 131,302 131,302 131,302 131,302 —
+Added: 2013 182,833 179,930 174,744 174,782 174,848 174,925 174,931 174,931 —
+Added: 2014 93,718 92,844 94,688 94,385 94,147 94,192 94,192 —
+Added: 2015 128,199 130,410 129,991 132,853 134,951 133,640 1,300
+Added: 2016 166,389 169,294 174,037 179,801 175,915 882
+Added: 2017 187,109 188,754 195,258 193,077 6,972
+Added: 2018 150,700 170,016 174,467 32,874
+Added: 2019 168,154 171,803 1,471
+Added: 2020 96,901 54,124
+Added: Total $ 1,416,706 $ 97,623
Motor Casualty
4 unchanged sentences
($ in thousands)
+Added: 2011 $ 19,082 $ 36,462 $ 49,569 $ 58,244 $ 65,018 $ 70,433 $ 70,433 $ 70,433 $ 70,478 $ 70,478
+Added: 2012 58,585 118,142 126,622 128,913 131,302 131,302 131,302 131,302 131,302
+Added: 2013 86,558 159,200 171,855 174,658 174,848 174,925 174,931 174,931
+Added: 2014 49,994 86,297 89,687 94,385 94,147 94,192 94,192
+Added: 2015 81,093 125,645 129,174 129,571 133,673 132,340
+Added: 2016 97,325 157,948 170,658 178,800 175,033
+Added: 2017 115,204 170,157 188,225 186,105
+Added: 2018 83,652 143,267 141,593
+Added: 2019 99,043 170,332
+Added: Total 1,319,083
All outstanding liabilities before 2011, net of reinsurance ( 33 )
Liabilities for claims and claims adjustment expenses, net of reinsurance (Motor Casualty) $ 97,590
+Added: Link to Table of Contents
Motor Property
−Removed: Incurred claims and allocated claim adjustment expenses, net of reinsurance
−Removed: December 31, 2019
−Removed: For the years ended December 31,
−Removed: Total IBNR plus expected development on reported claims
+Added: Incurred claims and allocated claim adjustment expenses, net of reinsurance December 31, 2020
+Added: For the years ended December 31, Total IBNR plus expected development on reported claims
Accident year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 unchanged sentence
($ in thousands)
−Removed: Link to Table of Contents
+Added: 2011 $ 3,276 $ 3,271 $ 3,343 $ 3,285 $ 3,285 $ 3,306 $ 3,306 $ 3,306 $ 3,303 $ 3,303 $ —
+Added: 2012 36,985 36,129 36,008 35,998 35,922 35,922 35,922 35,922 35,922 —
+Added: 2013 46,189 45,629 44,728 44,656 44,695 44,719 44,478 44,478 —
+Added: 2014 18,870 18,797 19,056 19,000 19,006 19,021 19,021 —
+Added: 2015 22,035 22,516 22,505 23,263 23,939 23,715 —
+Added: 2016 27,853 28,279 29,090 29,051 28,465 —
+Added: 2017 39,986 39,621 40,394 39,448 477
+Added: 2018 42,336 47,209 47,115 7,028
+Added: 2019 43,103 45,795 2,124
+Added: 2020 23,556 12,675
+Added: Total $ 310,818 $ 22,304
Motor Property
4 unchanged sentences
($ in thousands)
+Added: 2011 $ 1,418 $ 2,944 $ 3,305 $ 3,285 $ 3,285 $ 3,303 $ 3,303 $ 3,303 $ 3,303 $ 3,303
+Added: 2012 16,902 34,588 35,854 35,903 35,922 35,922 35,922 35,922 35,922
+Added: 2013 21,112 41,066 44,363 44,431 44,476 44,476 44,478 44,478
+Added: 2014 10,305 17,621 18,420 19,000 19,006 19,021 19,021
+Added: 2015 13,859 22,013 22,505 22,595 23,839 23,715
+Added: 2016 16,725 27,023 28,609 28,851 28,465
+Added: 2017 23,091 37,058 39,711 38,971
+Added: 2018 23,576 40,118 40,086
+Added: 2019 25,103 43,672
+Added: Total 288,514
All outstanding liabilities before 2011, net of reinsurance —
Liabilities for claims and claims adjustment expenses, net of reinsurance (Motor Property) $ 22,304
−Removed: Incurred claims and allocated claim adjustment expenses, net of reinsurance
−Removed: December 31, 2019
−Removed: For the years ended December 31,
−Removed: Total IBNR plus expected development on reported claims
+Added: Link to Table of Contents
+Added: Incurred claims and allocated claim adjustment expenses, net of reinsurance December 31, 2020
+Added: For the years ended December 31, Total IBNR plus expected development on reported claims
Accident year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 unchanged sentence
($ in thousands)
−Removed: Link to Table of Contents
+Added: 2011 $ 7,377 $ 8,174 $ 7,525 $ 7,473 $ 7,470 $ 7,468 $ 7,468 $ 7,468 $ 7,468 $ 7,468 $ —
+Added: 2012 3,952 3,591 3,756 3,773 3,759 3,755 3,782 3,777 3,736 —
+Added: 2013 2,492 2,875 2,840 2,821 2,801 2,755 2,586 2,552 —
+Added: 2014 4,768 3,525 1,776 1,701 1,084 2,125 2,329 —
+Added: 2015 4,794 6,769 6,899 4,520 4,230 4,132 —
+Added: 2016 8,367 10,410 9,151 9,139 8,115 616
+Added: 2017 9,096 6,020 6,456 7,582 2,103
+Added: 2018 6,169 7,523 7,283 1,688
+Added: 2019 19,205 20,494 11,286
+Added: 2020 50,779 44,961
+Added: Total $ 114,469 $ 60,654
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
3 unchanged sentences
($ in thousands)
+Added: 2011 $ 1,162 $ 7,550 $ 7,513 $ 7,468 $ 7,468 $ 7,468 $ 7,468 $ 7,468 $ 7,468 $ 7,468
+Added: 2012 2,999 3,251 3,676 3,683 3,684 3,688 3,735 3,735 3,736
+Added: 2013 213 1,828 2,426 2,339 2,323 2,578 2,540 2,552
+Added: 2014 197 659 1,124 1,282 1,084 2,125 2,329
+Added: 2015 472 1,387 2,010 3,399 3,930 4,132
+Added: 2016 1,473 3,108 5,650 7,384 7,499
+Added: 2017 484 3,086 4,538 5,479
+Added: 2018 962 5,588 5,595
+Added: 2019 5,473 9,208
All outstanding liabilities before 2011, net of reinsurance —
Liabilities for claims and claims adjustment expenses, net of reinsurance (Other) $ 60,654
−Removed: Incurred claims and allocated claim adjustment expenses, net of reinsurance
−Removed: December 31, 2019
−Removed: For the years ended December 31,
−Removed: Total IBNR plus expected development on reported claims
+Added: Link to Table of Contents
+Added: Incurred claims and allocated claim adjustment expenses, net of reinsurance December 31, 2020
+Added: For the years ended December 31, Total IBNR plus expected development on reported claims
Accident year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 unchanged sentence
($ in thousands)
−Removed: Link to Table of Contents
+Added: 2011 $ 73,309 $ 83,261 $ 79,794 $ 80,402 $ 81,894 $ 83,012 $ 83,067 $ 83,006 $ 83,296 $ 83,308 $ —
+Added: 2012 63,961 50,183 50,874 52,812 53,218 53,473 53,737 53,823 53,862 —
+Added: 2013 60,957 59,006 61,790 62,508 62,495 62,435 62,778 62,801 485
+Added: 2014 41,742 45,155 46,846 47,086 46,875 47,031 46,998 379
+Added: 2015 27,889 30,369 31,772 30,974 30,636 30,574 433
+Added: 2016 25,657 26,197 24,077 23,549 23,233 810
+Added: 2017 84,835 78,498 69,111 65,885 141
+Added: 2018 28,273 30,346 25,152 6,562
+Added: 2019 22,951 27,226 20,105
+Added: 2020 22,078 15,503
+Added: Total $ 441,117 $ 44,418
Cumulative paid claims and allocated claim adjustment expenses, net of reinsurance
3 unchanged sentences
($ in thousands)
+Added: 2011 $ 49,441 $ 74,383 $ 77,182 $ 79,022 $ 81,214 $ 82,370 $ 82,655 $ 83,006 $ 83,296 $ 83,308
+Added: 2012 32,085 45,887 50,242 52,657 53,211 53,259 53,737 53,823 53,862
+Added: 2013 34,807 55,677 58,537 60,356 61,086 61,999 62,241 62,316
+Added: 2014 20,230 40,173 43,641 45,212 46,302 46,522 46,619
+Added: 2015 12,938 25,459 28,858 29,830 30,037 30,141
+Added: 2016 9,949 18,228 21,083 22,072 22,423
+Added: 2017 43,302 56,429 64,275 65,744
+Added: 2018 5,361 15,740 18,590
+Added: 2019 4,064 7,121
+Added: Total 396,699
All outstanding liabilities before 2011, net of reinsurance —
Liabilities for claims and claims adjustment expenses, net of reinsurance (Property) $ 44,418
+Added: Link to Table of Contents
Professional Liability
−Removed: Incurred claims and allocated claim adjustment expenses, net of reinsurance
−Removed: December 31, 2019
−Removed: For the years ended December 31,
−Removed: Total IBNR plus expected development on reported claims
+Added: Incurred claims and allocated claim adjustment expenses, net of reinsurance December 31, 2020
+Added: For the years ended December 31, Total IBNR plus expected development on reported claims
Accident year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 unchanged sentence
($ in thousands)
−Removed: Link to Table of Contents
+Added: 2011 $ 6,239 $ 7,135 $ 7,607 $ 8,326 $ 8,385 $ 8,208 $ 8,463 $ 8,463 $ 8,283 $ 8,154 $ —
+Added: 2012 11,601 11,606 12,167 12,618 12,814 13,557 13,557 12,973 12,476 126
+Added: 2013 12,839 13,752 15,326 17,030 17,877 18,057 17,851 17,489 764
+Added: 2014 19,854 19,235 19,197 21,835 22,870 23,205 22,934 2,207
+Added: 2015 18,917 18,919 21,513 23,000 23,240 22,490 4,449
+Added: 2016 13,921 17,140 17,521 17,118 16,911 6,163
+Added: 2017 10,294 9,982 9,804 10,035 5,153
+Added: 2018 4,488 4,475 4,597 2,609
+Added: 2019 586 611 344
+Added: Total $ 115,763 $ 21,880
Professional Liability
4 unchanged sentences
($ in thousands)
+Added: 2011 $ 113 $ 1,375 $ 3,799 $ 5,414 $ 6,794 $ 7,521 $ 8,033 $ 8,085 $ 8,013 $ 8,154
+Added: 2012 550 3,787 6,600 9,123 10,601 12,163 12,335 12,059 12,351
+Added: 2013 733 3,595 8,023 11,538 14,549 15,346 15,153 16,725
+Added: 2014 1,414 5,617 10,031 14,633 16,982 16,993 20,728
+Added: 2015 1,225 3,455 9,263 12,268 13,118 18,041
+Added: 2016 348 2,229 5,004 8,030 10,748
+Added: 2017 230 1,449 3,104 4,883
+Added: 2018 242 1,142 1,988
All outstanding liabilities before 2011, net of reinsurance 736
Liabilities for claims and claims adjustment expenses, net of reinsurance (Professional Liability) $ 22,615
+Added: Link to Table of Contents
Workers' Compensation
−Removed: Incurred claims and allocated claim adjustment expenses, net of reinsurance
−Removed: December 31, 2019
−Removed: For the years ended December 31,
−Removed: Total IBNR plus expected development on reported claims
+Added: Incurred claims and allocated claim adjustment expenses, net of reinsurance December 31, 2020
+Added: For the years ended December 31, Total IBNR plus expected development on reported claims
Accident year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 unchanged sentence
($ in thousands)
−Removed: Link to Table of Contents
+Added: 2011 $ 14,915 $ 15,233 $ 16,861 $ 16,861 $ 16,861 $ 16,861 $ 16,861 $ 16,861 $ 16,861 $ 16,861 $ —
+Added: 2012 11,763 12,213 12,213 12,213 12,213 12,213 12,213 12,213 12,213 —
+Added: 2013 4,751 4,751 4,751 4,751 4,751 4,751 4,751 4,751 —
+Added: 2014 — — — 3 — — — —
+Added: 2015 1,014 1,010 948 950 951 919 87
+Added: 2016 4,342 4,275 4,266 3,975 3,778 319
+Added: 2017 10,888 10,352 9,609 9,069 1,061
+Added: 2018 13,638 13,527 13,082 2,285
+Added: 2019 22,929 23,482 9,880
+Added: 2020 44,677 33,388
+Added: Total $ 128,831 $ 47,021
Workers' Compensation
4 unchanged sentences
($ in thousands)
+Added: 2011 $ 5,004 $ 11,175 $ 16,861 $ 16,861 $ 16,861 $ 16,861 $ 16,861 $ 16,861 $ 16,861 $ 16,861
+Added: 2012 2,359 12,213 12,213 12,213 12,213 12,213 12,213 12,213 12,213
+Added: 2013 4,751 4,751 4,751 4,751 4,751 4,751 4,751 4,751
+Added: 2014 — — — — — — —
+Added: 2015 28 251 564 688 777 832
+Added: 2016 613 1,920 2,782 3,274 3,459
+Added: 2017 2,028 5,356 7,399 8,008
+Added: 2018 4,213 8,321 10,796
+Added: 2019 5,473 13,602
All outstanding liabilities before 2011, net of reinsurance —
4 unchanged sentences
This treatment removes any changes in foreign currency exchange rates from distorting the claims development between the years presented.
+Added: Link to Table of Contents
For assumed contracts the Company does not generally receive claims information by accident year from the ceding insurers, but instead receives claims information by the treaty year of the contract.
7 unchanged sentences
However, natural catastrophe and certain other large losses are addressed separately and are assigned to the accident year in which they occurred.
−Removed: Link to Table of Contents
The reconciliation of the net incurred and paid claims development tables to the liability for claims and claim adjustment expenses in the consolidated balance sheet is as follows:
2 unchanged sentences
Net outstanding liabilities
+Added: Health $ 17,485
+Added: Multiline 148,861
General Liability 12,057
1 unchanged sentence
Motor Property 22,304
+Added: Property 44,418
Professional Liability 22,615
3 unchanged sentences
Unallocated claims adjustment expenses 4,276
+Added: Allowance for credit losses 47
Total gross liabilities for unpaid claims and claim adjustment expense $ 494,179
+Added: Link to Table of Contents
The average historical annual percentage payout of net incurred claims (excluding health) as of December 31, 2020 is as follows:
+Added: Years 1 2 3 4 5 6 7 8 9 10
(Unaudited - Supplementary Information)
+Added: Multiline 10.2 % 19.0 % 18.8 % 16.0 % 13.3 % 22.7 % — % — % — % — %
General Liability 4.5 % 12.0 % 11.1 % 10.8 % 17.3 % 27.8 % 6.9 % 8.0 % 1.6 % — %
1 unchanged sentence
Motor Property 51.9 % 41.7 % 4.9 % 0.7 % 0.4 % 0.2 % 0.2 % — % — % — %
+Added: Other 33.5 % 44.6 % 15.5 % 3.0 % 2.0 % 1.0 % 0.4 % — % — % — %
+Added: Property 49.7 % 34.8 % 5.9 % 3.0 % 2.8 % 2.5 % 1.0 % 0.3 % — % — %
Professional Liability 3.5 % 12.5 % 18.4 % 16.3 % 13.3 % 9.0 % 7.0 % 6.0 % 5.0 % 9.0 %
6 unchanged sentences
Therefore it is impracticable for the Company to present the cumulative number of reported claims by accident year.
−Removed: Link to Table of Contents
The Company, from time to time, purchases retrocessional coverage for one or more of the following reasons:
11 unchanged sentences
Failure of retrocessionaires to honor their obligations could result in losses to the Company.
−Removed: At December 31, 2019 , the Company’s loss reserves recoverable consisted of (i) $21.2 million ( 2018 :
+Added: At December 31, 2020, the Company’s loss reserves recoverable of $ 16.9 million (2019:
+Added: $ 27.5 million) consisted of (i) $ 12.6 million (2019:
$ 21.1 million) from unrated retrocessionaires which were secured by cash, letters of credit and collateral held in trust accounts for the benefit of the Company and (ii) $ 4.3 million (2019:
$ 6.4 million) from retrocessionaires rated A- or above by A.M.
−Removed: The Company regularly evaluates the financial condition of its retrocessionaires to assess the ability of the retrocessionaires to honor their respective obligations.
−Removed: At December 31, 2019 and 2018 , no provision for uncollectible losses recoverable was considered appropriate.
+Added: The Company regularly evaluates its net credit exposure to assess the ability of the retrocessionaires to honor their respective obligations.
+Added: At December 31, 2020, the Company had recorded an allowance for expected credit losses of $ 0.1 million (December 31, 2019:
SENIOR CONVERTIBLE NOTES
1 unchanged sentence
The Notes bear interest at 4.0 % payable semi-annually on February 1 and August 1 of each year beginning on February 1, 2019.
+Added: Link to Table of Contents
Note holders have the option, under certain conditions, to redeem the Notes prior to maturity.
−Removed: If the Notes are converted by the holder, 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.
+Added: If the Notes are redeemed by the holder, 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.
The Company has therefore bifurcated the Notes into liability and equity components.
−Removed: If converted at December 31, 2019 , the face value of the Notes would be cash settled and the Company has assumed that the conversion option will not be exercised due to the share price at December 31, 2019 being lower than the conversion price of $17.19 per share.
+Added: At December 31, 2020, the Company’s share price was lower than the conversion price of $ 17.19 per share.
The Company’s effective borrowing rate for non-convertible debt at the time of issuance of the Notes was estimated to be 6.0 %, which equated to an $ 8.2 million discount.
6 unchanged sentences
The carrying value of the Notes as of December 31, 2020, including accrued interest of $ 1.7 million was $ 95.8 million (December 31, 2019:
−Removed: $91.2 million ), which approximates their fair value.
+Added: $ 93.5 million).
+Added: As of December 31, 2020, the fair value of the Notes was estimated to be $ 83.6 million (December 31, 2019:
+Added: $ 94.9 million) (see Note 4 Financial Instruments).
For the year ended December 31, 2020, the Company recognized interest expense of $ 6.3 million (December 31, 2019:
+Added: $ 6.3 million;
+Added: December 31, 2018:
$ 2.5 million), in connection with the interest coupon, amortization of issuance costs and amortization of the discount.
The Company was in compliance with all covenants relating to the Notes as of December 31, 2020 and December 31, 2019.
−Removed: Link to Table of Contents
SHARE CAPITAL
12 unchanged sentences
As of December 31, 2020, the Company has an effective Form S-3 registration statement on file with the SEC for an aggregate principal amount of $ 200.0 million in securities.
−Removed: Shares reserved for issuance are composed of 0.3 million ( 2018 :
−Removed: 0.3 million ) Class A ordinary shares in relation to share purchase options granted to a service provider and 5.0 million ( 2018 :
−Removed: 5.0 million ) Class A ordinary shares reserved for the Company’s stock incentive plan for eligible employees, directors and consultants.
−Removed: On April 26, 2017, 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 1.5 million shares from 3.5 million to 5.0 million .
−Removed: As of December 31, 2019 and 2018 , there were no remaining Class A ordinary shares available for future issuance relating to share purchase options granted to the service provider as all options granted to service providers had been exercised.
+Added: Link to Table of Contents
+Added: 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.
As of December 31, 2020, 3,474,888 (2019:
2 unchanged sentences
The Board has adopted a share repurchase plan.
−Removed: On May 2, 2019, the Board of Directors renewed the share repurchase plan, with effect from July 1, 2019 and expiring on June 30, 2020, authorizing the Company to purchase up to 2.5 million 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 timing of such repurchases and actual number of shares repurchased will depend on a variety of factors including price, market conditions and applicable regulatory and corporate requirements.
−Removed: The share repurchase plan, which expires on June 30, 2020 , does not require the Company to repurchase any specific number of shares and may be modified, suspended or terminated at any time without prior notice.
−Removed: During the year ended December 31, 2019 , no Class A ordinary shares were repurchased by the Company.
−Removed: As of December 31, 2019 , 2.5 million shares remained available for repurchase under the share repurchase plan.
−Removed: Under the Companies Law of the Cayman Islands, the Company cannot hold treasury shares;
−Removed: therefore, all ordinary shares repurchased are canceled immediately upon repurchase.
−Removed: Link to Table of Contents
+Added: On March 26, 2020, the Board of Directors extended the share repurchase plan to June 30, 2021 and increased the number of shares authorized to be repurchased to 5.0 million 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.
+Added: In addition, the Board of Directors also authorized the Company to repurchase up to $ 25.0 million aggregate face amount of the Company’s 4.00 % Convertible Senior Notes due 2023 (the “Notes”) in privately negotiated transactions, in open market repurchases or pursuant to one more tender offers.
+Added: The Company is not required to repurchase any of the Class A ordinary shares or the Notes and the repurchase plans may be modified, suspended or terminated at the election of our Board of Directors at any time without prior notice.
+Added: During the year ended December 31, 2020, 2,547,097 Class A ordinary shares were repurchased by the Company (2019:
+Added: As of December 31, 2020, 2.5 million Class A ordinary shares and $ 25.0 million of the Notes, remained available for repurchase under the repurchase plans.
+Added: All Class A ordinary shares repurchased are canceled immediately upon repurchase.
The following table is a summary of voting ordinary shares issued and outstanding:
+Added: 2020 2019 2018
+Added: Class A Class B Class A Class B Class A Class B
Balance – beginning of year 30,739,395 6,254,715 30,130,214 6,254,715 31,104,830 6,254,715
1 unchanged sentence
Repurchase of ordinary shares ( 2,547,097 ) — — — ( 1,180,000 ) —
−Removed: Class B shares converted to Class A shares
Balance – end of year 28,260,075 6,254,715 30,739,395 6,254,715 30,130,214 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.
−Removed: It also includes share-based awards earned not yet issued.
+Added: It also includes the earned portion of the grant-date fair value of share-based awards that have not yet vested.
Statutory Capital and Surplus
8 unchanged sentences
Any dividends declared and paid from Greenlight Re to the Company would require approval of CIMA.
−Removed: During the year ended December 31, 2019 , no dividends ( 2018 :
+Added: During the year ended December 31, 2020, $ 39.5 million in dividends (2019:
$ 3.9 million, 2018:
−Removed: $33.0 million ) were declared or paid by Greenlight Re to the Company.
+Added: $ 0.0 million) were declared or paid by Greenlight Re to the Company, of which $ 15.0 million was used for the Company’s share repurchases, $ 20.5 million was used for capital contribution to GRIL and $ 4.0 million was used for payment of interest on the Company’s senior convertible notes.
As of December 31, 2020 and 2019, $ 286.6 million and $ 319.0 million, respectively, of Greenlight Re’s capital and surplus was available for distribution as dividends.
+Added: Link to Table of Contents
GRIL is obligated to maintain a minimum level of statutory capital.
12 unchanged sentences
160,595 ) Class A ordinary shares were issued to employees pursuant to the Company’s stock incentive plan.
−Removed: The majority of these shares contain certain restrictions relating to, among other things, vesting, forfeiture in the event of termination of employment and transferability.
−Removed: The restricted shares cliff
−Removed: Link to Table of Contents
−Removed: vest three years after the date of issuance, subject to the grantee’s continued service with the Company.
−Removed: During the vesting period, the holder of the restricted shares retains voting rights and is entitled to any dividends declared by the Company.
+Added: These shares contain certain restrictions relating to, among other things, vesting, forfeiture in the event of termination of employment and transferability.
+Added: The restricted shares cliff vest three years after the date of issuance, subject to the grantee’s continued service with the Company.
+Added: During the vesting period, the holder of the restricted shares retains voting rights and is entitled to any dividends declared by the Company.The weighted average grant date fair value of the restricted shares subject to only service condition was $ 6.72 (2019:
+Added: $ 10.65 , 2018:
+Added: $ 15.90 ) per share.
For the year ended December 31, 2020, 145,089 (2019:
326,240 , 2018:
−Removed: nil ) Class A ordinary shares were issued to the Company’s Chief Executive Officer (“CEO”) pursuant to the Company’s stock incentive plan.
+Added: 30,660 ) Class A ordinary shares were issued to the Company’s Chief Executive Officer (“CEO”) pursuant to the Company’s stock incentive plan.
These shares contain performance and service conditions and certain restrictions relating to, among other things, vesting, forfeiture in the event of termination of employment and transferability.
−Removed: 89,945 of these restricted shares cliff vest 5 years after the date of issuance, subject to the performance condition being met and the grantee’s continued service with the Company while the remainder of these restricted shares vest upon occurrence of a specified performance condition being met prior to December 15, 2020.
−Removed: During the vesting period, the holder of the restricted shares retains voting rights and is entitled to any dividends declared by the Company.
+Added: Certain restricted shares granted to the CEO during the year ended December 31, 2019, contained vesting conditions whereby they would only vest upon occurrence of a specified performance condition being met prior to December 15, 2020.
+Added: The performance condition was not met and 236,295 restricted shares were forfeited during the year ended December 31, 2020.
+Added: The remaining restricted shares cliff vest 5 years after the date of issuance, subject to the performance condition being met and the grantee’s continued service with the Company.
The weighted average grant date fair value of the restricted shares subject to performance conditions was $ 6.72 (2019:
+Added: $ 10.65 , 2018:
$ 15.90 ) per share.
−Removed: No compensation cost was recognized relating to these shares for the year ended December 31, 2019 ( 2018 :
−Removed: nil ) based on the performance conditions remaining.
+Added: On July 30, 2020, the Company accelerated the vesting on half of the CEO’s restricted shares granted during the year ended December 31, 2020, resulting in 72,545 shares vesting immediately.
+Added: The modification resulted in $ 0.5 million of incremental compensation cost.
+Added: The remaining restricted shares are still subject to performance and service conditions.
+Added: As the performance conditions associated with these restricted shares have not been met, no compensation cost was recognized relating to the unvested shares for the year ended December 31, 2020.
For the year ended December 31, 2020, the Company also issued to non-employee directors an aggregate of 71,330 (2019:
4 unchanged sentences
37,502 , 2018:
−Removed: 46,943 ) restricted shares were forfeited by employees and a director who left the Company prior to the expiration of the applicable vesting periods.
+Added: 44,644 ) restricted shares were forfeited by grantees due to vesting conditions not being met.
For the year ended December 31, 2020, $ 0.7 million stock compensation expense (2019:
11 unchanged sentences
$ 2.8 million).
+Added: Link to Table of Contents
The following table summarizes the activity for unvested outstanding restricted share awards during the years ended December 31, 2020, and 2019:
+Added: shares Weighted
Balance at December 31, 2018 432,457 $ 18.58
+Added: Granted 639,497 10.69
+Added: Vested ( 161,365 ) 19.44
+Added: Forfeited ( 37,502 ) 14.12
Balance at December 31, 2019 873,087 12.83
+Added: Granted 522,683 6.81
+Added: Vested ( 235,833 ) 13.83
+Added: Forfeited ( 462,388 ) 10.71
Balance at December 31, 2020 697,549 $ 9.38
−Removed: Link to Table of Contents
Employee and Director Stock Options
−Removed: For the year ended December 31, 2019 and 2018 , no Class A ordinary share purchase options were granted ( 2017 :
−Removed: The Class A ordinary share purchase options granted to the Company’s CEO in 2017 vest 16.7% each on the anniversary thereof in 2018, 2019, 2020, 2021, 2022 and 2023, and expire 10 years after the grant date.
−Removed: The grant date fair value of these options was $9.60 , based on the Black-Scholes option pricing model.
−Removed: In addition, for the year ended December 31, 2017, 42,250 Class A ordinary share purchase options were granted to the Company’s former interim Chief Executive Officer, pursuant to his consulting agreement.
−Removed: These options vested 100% on their grant date and expire 10 years after the grant date.
−Removed: The weighted average grant date fair value of these options was $9.90 per share based on the Black-Scholes option pricing model.
−Removed: For the options granted in 2017, the Company applied the following weighted average assumptions to the options pricing model:
−Removed: Risk free rate
−Removed: Estimated volatility
−Removed: Expected term (in years)
−Removed: Dividend yield
−Removed: Forfeiture rate
−Removed: The estimate of expected volatility for options granted during 2017 was based on the daily historical trading data of the Company’s Class A ordinary shares from the date that these shares commenced trading on May 24, 2007 to the grant date.
+Added: For the years ended December 31, 2020, 2019, and 2018, no Class A ordinary share purchase options were granted or exercised by directors or employees, resulting in no Class A ordinary shares being issued.
+Added: When stock options are granted, the Company reduces the corresponding number from the shares authorized for issuance as part of the Company’s stock incentive plan.
The Board of Directors does not currently anticipate that any dividends will be declared during the expected term of the options.
6 unchanged sentences
2.4 years) assuming the grantee completes the service period for vesting of the options.
−Removed: For the year ended December 31, 2019 , no stock options were exercised by directors and employees ( 2018 :
−Removed: 50,000 ) resulting in no Class A ordinary shares being issued ( 2018 :
−Removed: 5,011 , net of shares surrendered as a result of the cashless exercise of stock options).
−Removed: When stock options are granted, the Company reduces the corresponding number from the shares authorized for issuance as part of the Company’s stock incentive plan.
Employee and director stock option activity during the years ended December 31, 2020, 2019, and 2018 was as follows:
−Removed: options outstanding
−Removed: Intrinsic value
−Removed: ($ in millions)
−Removed: Weighted average remaining contractual term
−Removed: Balance at December 31, 2016
−Removed: Balance at December 31, 2017
−Removed: Balance at December 31, 2018
−Removed: Balance at December 31, 2019
−Removed: Link to Table of Contents
+Added: options outstanding Weighted
+Added: price Weighted
+Added: fair value Intrinsic value
+Added: ($ in millions) Weighted average remaining contractual term
+Added: Balance at December 31, 2017 1,015,627 $ 23.55 $ 9.89 $ — 6.9 years
+Added: Expired ( 80,000 ) 29.39 8.69
+Added: Balance at December 31, 2018 935,627 23.05 10.00 — 6.4 years
+Added: Expired ( 60,000 ) 28.44 6.25
+Added: Balance at December 31, 2019 875,627 22.68 10.25 — 5.8 years
+Added: Expired ( 40,000 ) 32.42 10.39
+Added: Balance at December 31, 2020 835,627 $ 22.22 $ 10.25 $ — 5.1 years
The following table summarizes information about options exercisable for the periods indicated:
−Removed: December 31, 2019
−Removed: December 31, 2018
−Removed: December 31, 2017
+Added: December 31, 2020 December 31, 2019 December 31, 2018
Number of options exercisable 595,627 555,627 535,627
6 unchanged sentences
$ 9.60 , 2018:
+Added: Link to Table of Contents
Employee Restricted Stock Units
−Removed: The Company issues restricted stock units (“RSUs”) to certain employees as part of the stock incentive plan.
+Added: The Company issues RSUs to certain employees as part of the stock incentive plan.
These RSUs contain restrictions relating to vesting, forfeiture in the event of termination of employment, transferability and other matters.
13 unchanged sentences
Employee RSU activity during the years ended December 31, 2020, and 2019 was as follows:
+Added: RSUs Weighted
Balance at December 31, 2018 46,398 $ 18.13
+Added: Granted 48,535 10.84
+Added: Vested ( 7,186 ) 21.56
+Added: Forfeited ( 24,165 ) 13.96
Balance at December 31, 2019 63,582 13.76
+Added: Granted 60,622 6.72
+Added: Vested ( 7,482 ) 21.65
+Added: Forfeited — —
Balance at December 31, 2020 116,722 $ 9.60
For the years ended December 31, 2020, 2019, and 2018, the combined stock compensation expense (net of forfeitures), which was included in the caption “General and administrative expenses” in the Company’s statements of operations, was $ 2.5 million, $ 3.9 million and $ 4.6 million, respectively.
−Removed: Link to Table of Contents
NET INVESTMENT INCOME (LOSS)
A summary of net investment income (loss) for the years ended December 31, 2020, 2019, and 2018 is as follows:
+Added: 2020 2019 2018
($ in thousands)
8 unchanged sentences
Income (loss) from investments in related party investment fund 4,431 46,056 ( 60,573 )
−Removed: Total net investment related income (loss)
+Added: Total investment income (loss) $ 25,532 $ 52,267 $ ( 323,106 )
Income (loss) from investments in related party investment fund reflects the equity in earnings (loss) of SILP (see Note 3).
−Removed: Investment returns are calculated monthly based on cash flows into or out of the investment accounts and compounded to calculate the annual returns generated by the Company’s investments managed by DME Advisors.
−Removed: Effective from September 1, 2018, the investment return is calculated by dividing the investment income or loss (net of fees and expenses) by the Investment Portfolio.
−Removed: For the year ended December 31, 2019 , the total investment related income includes a gain of 9.3% on the investments managed by DME Advisors.
−Removed: This return compares to a loss of 30.3% and a gain of 1.5% reported for the years ended December 31, 2018 and 2017 , respectively.
−Removed: The change in unrealized gains and losses for year ended December 31, 2019 , included a net increase in the valuation allowance provision of $6.0 million ( 2018 :
−Removed: $ nil , 2017 :
+Added: Link to Table of Contents
+Added: The realized gains (losses) for the year ended December 31, 2020, includes $ 15.0 million of valuation allowance charged off on a note receivable, partially offset by a gain of $ 5.8 million on another note receivable that was settled in excess of its carrying value.
+Added: The change in unrealized gains and losses for the year ended December 31, 2020, includes net unrealized gains of $ 10.2 million (2019:
+Added: $ 0.2 million, 2018:
+Added: nil) on Innovations related investments.
+Added: In addition, the change in unrealized gains and losses for year ended December 31, 2020, included a net decrease in the valuation allowance of $ 15.0 million (2019:
+Added: net increase of $ 6.0 million, 2018:
nil ) relating to notes receivable.
11 unchanged sentences
At December 31, 2020 and 2019, no taxes recoverable were included in the Company’s consolidated balance sheets.
−Removed: At December 31, 2019 , Verdant had a net operating loss carry forward totaling $4.6 million available to offset future taxable income.
−Removed: Of the total $4.6 million , $2.9 million expire at various dates from 2033 to 2037 and the remaining $1.7 million have no expiration date.
+Added: At December 31, 2020, Verdant had a net operating loss carry forward totaling $ 2.4 million (2019:
+Added: $ 4.6 million) available to offset future taxable income.
+Added: Of the total $ 2.4 million, $ 1.4 million expire at various dates from 2033 to 2037 and the remaining $ 1.0 million has no expiration date.
The deferred tax asset associated with the net operating loss carried forward, has been offset by a valuation allowance as management does not anticipate that the carried forward amount will be realized.
−Removed: Link to Table of Contents
The following table sets forth our current and deferred income tax benefit (expense) on a consolidated basis for the years ended December 31, 2020, 2019, and 2018:
+Added: 2020 2019 2018
($ in thousands)
Current tax (expense) benefit $ ( 48 ) $ ( 43 ) $ 1,840
+Added: Tax recovered — — —
Deferred tax (expense) benefit 5 ( 8 ) ( 4 )
9 unchanged sentences
These amounts are included in the caption “Acquisition costs” in the Company’s consolidated statements of operations.
+Added: Link to Table of Contents
RELATED PARTY TRANSACTIONS
1 unchanged sentence
DME, 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.
−Removed: Prior to September 1, 2018, the Company and its reinsurance subsidiaries were party to the venture agreement with DME Advisors under which the Company, its reinsurance subsidiaries and DME were participants of the Joint Venture for the purpose of managing certain jointly held assets.
−Removed: In addition, prior to September 1, 2018, the Company, its reinsurance subsidiaries and DME had entered into a separate investment advisory agreement with DME Advisors (the “advisory agreement”).
−Removed: On September 1, 2018, the Company, DME and DME Advisors entered into a termination agreement to terminate the Joint Venture and the advisory agreement on January 2, 2019.
−Removed: On September 1, 2018, the Company entered into the SILP LPA with DME II, as General Partner.
+Added: The Company has entered into the SILP LPA with DME II.
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.
1 unchanged sentence
The loss carry forward provision contained 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.
−Removed: For the year ended December 31, 2019 , performance allocation of $5.0 million , ( 2018 :
−Removed: nil ) was deducted from the Company’s investment in SILP and allocated to DME II.
+Added: On February 26, 2019, effective as of September 1, 2018, the Company entered into Amendment No.
+Added: 1 to the SILP LPA.
+Added: The amendment was intended to revise the mechanics for calculating the Carryforward Account and Performance Allocation (as defined in the LPA) to take into account withdrawals from and subsequent recontributions of capital to SILP, consistent with the treatment under the Joint Venture.
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).
1 unchanged sentence
The IAA has an initial term ending on August 31, 2023 subject to an automatic extension for successive three-year terms.
−Removed: For the year ended December 31, 2019 , management fees paid by SILP to DME Advisors of $4.9 million , ( 2018 :
−Removed: $3.1 million ) were included in the caption “Income (loss) from investment in related party investment fund” in the Company’s consolidated statement of operations.
−Removed: The Company has entered into a letter agreement with DME Advisors and DME II whereby during the period from June 1, 2019 to June 30, 2020, the portion of the Investment Portfolio held in cash or cash equivalents will not be subject to any management fee or performance allocation.
−Removed: Link to Table of Contents
+Added: As of December 31, 2020, the Company had entered into a letter agreement with DME Advisors and DME II whereby during the period from June 1, 2019 to June 30, 2021, cash, cash equivalents and/or U.S government issued securities will not be subject to any management fee or performance allocation.
+Added: For a detailed breakdown of management fees and performance compensation for the year ended December 31, 2020 and 2019, refer to Note 3 of the consolidated financial statements.
+Added: On January 7, 2021, the Company entered into an amended LPA agreement with DME Advisors and DME II which amends, restates, supersedes and incorporates all material terms of the SILP LPA.
+Added: Refer to Note 18 “Subsequent Events” for further details.
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.
1 unchanged sentence
There were no indemnification amounts incurred by the Company during any of the periods presented.
−Removed: Non-controlling Interest in Related Party Joint Venture
−Removed: Non-controlling interests in related party joint venture represented DME’s share of the jointly held assets under the venture agreement.
−Removed: A portion of the non-controlling interest was subject to contractual withdrawal rights whereby DME, at its sole discretion, could withdraw its interest above the minimum capital required to be maintained in its capital accounts.
−Removed: This interest was recorded on the Company’s consolidated balance sheets under the caption “Redeemable non-controlling interest in related party joint venture.” The remaining portion without any withdrawal rights associated with it, was recorded under the caption “Non-controlling interest in related party joint venture” within the equity section on the Company’s consolidated balance sheet.
−Removed: The following table is a reconciliation of the beginning and ending carrying amounts of redeemable non-controlling interest in related party, non-controlling interest in related party and total non-controlling interest in related party for the years ended December 31, 2019, 2018 and 2017 :
−Removed: Redeemable non-controlling interest in related party joint venture
−Removed: Non-controlling interest in related party joint venture
−Removed: Total non-controlling interest in related party joint venture
−Removed: Year ended December 31
−Removed: Year ended December 31
−Removed: Year ended December 31
−Removed: Opening balance
−Removed: Income (loss) attributed to non-controlling interest
−Removed: Net contribution into (withdrawal from) non-controlling interest
−Removed: Ending balance
Green Brick Partners, Inc.
6 unchanged sentences
The agreement is automatically renewed annually until terminated by either the Company or DME Advisors for any reason with 30 days prior written notice to the other party.
+Added: Link to Table of Contents
Collateral Assets Investment Management Agreement
2 unchanged sentences
The CMA can be terminated by any of the parties upon 30 days’ prior written notice to the other parties.
−Removed: Link to Table of Contents
COMMITMENTS AND CONTINGENCIES
1 unchanged sentence
At December 31, 2020, 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:
−Removed: Termination Date
−Removed: Notice period required for termination
+Added: Maximum Facility Limit Termination Date Notice period required for termination
($ in thousands)
−Removed: Citibank Europe plc
−Removed: October 11, 2020
−Removed: 120 days prior to termination date
−Removed: During 2019 the Butterfield Bank letter of credit facility was terminated.
−Removed: As of December 31, 2019 , an aggregate amount of $204.5 million ( 2018 :
−Removed: $208.3 million ) in letters of credit were issued under the above facility.
−Removed: As of December 31, 2019 , total cash and cash equivalents with a fair value in the aggregate of $213.4 million ( 2018 :
+Added: Citibank Europe plc 275,000 August 20, 2021 120 days prior to termination date
+Added: Effective August 26, 2020, the Company amended the credit facility to reduce the maximum facility limit from $ 400.0 million to $ 275.0 million.
+Added: As of December 31, 2020, an aggregate amount of $ 135.3 million (December 31, 2019:
+Added: $ 204.5 million) in letters of credit were issued under the credit facility.
+Added: As of December 31, 2020, total cash and cash equivalents with a fair value in the aggregate of $ 137.6 million (December 31, 2019:
$ 213.4 million) were pledged as collateral against the letters of credit issued and included in the caption “Restricted cash and cash equivalents” in the Company’s consolidated balance sheets.
−Removed: The 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.
+Added: 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.
−Removed: The Company was in compliance with all the covenants of the facility as of December 31, 2019 and 2018 .
+Added: The Company was in compliance with all the covenants of the credit facility as of December 31, 2020 and 2019.
The Company has also established regulatory trust arrangements for certain cedents.
−Removed: As of December 31, 2019 , collateral of $528.7 million ( 2018 :
+Added: As of December 31, 2020, collateral of $ 607.8 million (December 31, 2019:
$ 528.7 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 consolidated balance sheets.
Lease Obligations
−Removed: Greenlight Re has entered into lease agreements for office space in the Cayman Islands.
−Removed: The leases expired on June 30, 2018.
−Removed: The Company is currently in negotiations with the lessor for renewal of the leases and meanwhile both parties have agreed to extend the leases until December 31, 2020.
−Removed: The Company has determined that the current arrangement qualifies as a short term lease upon adoption of Leases (Topic 842) on January 1, 2019.
+Added: Greenlight Re has entered into lease agreements for office space in the Cayman Islands that expired on December 31, 2020.
+Added: The Company and the landlord have agreed to extend the lease until December 31, 2021 while negotiating a new lease agreement.
+Added: The Company has determined that the current arrangement qualifies as a short term lease.
The short-term lease expense for the year ended December 31, 2020 was $ 0.5 million (2019:
+Added: $ 0.5 million).
GRIL has entered into a lease agreement for office space in Dublin, Ireland.
1 unchanged sentence
GRIL has the option to terminate the lease agreement in 2021.
−Removed: The Company has determined that this lease was an operating lease on January 1, 2019 and has recorded a right-of-use asset and a corresponding lease liability of $0.3 million .
−Removed: The operating lease expense for the year ended December 31, 2019 and 2018 was insignificant.
+Added: The Company has determined that this agreement qualifies as an operating lease under GAAP.
+Added: As of December 31, 2020 the Company has recorded a right-of-use asset and a corresponding lease liability of $ 0.1 million (December 31, 2019:
+Added: $ 0.2 million).
+Added: The operating lease expense for the years ended December 31, 2020, 2019, and 2018 was insignificant.
Included in the “Schedule of Commitments and Contingencies,” below, are the net minimum lease payment obligations relating to this lease as of December 31, 2020.
−Removed: Loan Facility
−Removed: From time to time, the Company makes investments in the form of equity or debt in private entities as part of its strategic investments and innovation initiatives.
−Removed: As part of the Company’s participation in such investments, the Company may make funding commitments.
−Removed: As of December 31, 2019 , the Company had committed to a loan facility (the “Loan Facility”) of $6.0 million to AccuRisk (see Note 4 ).
−Removed: As of December 31, 2019 , $0.4 million of the Loan Facility was available to AccuRisk.
−Removed: Included in the schedule below is the obligation relating to the Loan Facility as of December 31, 2019 on the assumption that the entire Loan Facility will be drawn by AccuRisk during 2020.
−Removed: The Company has entered into an advisory agreement whereby the Company is obligated to pay a minimum of $2.0 million , no earlier than March 2020.
−Removed: Pursuant to the advisory agreement, additional fees may be payable depending on certain events occurring.
−Removed: Included in the schedule below is the minimum obligation relating to the advisory agreement as of December 31, 2019 .
Link to Table of Contents
1 unchanged sentence
The following is a schedule of future minimum payments required under the above commitments:
+Added: 2021 2022 2023 2024 2025 Thereafter Total
($ in thousands)
1 unchanged sentence
Interest and convertible note payable 4,000 4,000 4,000 100,000 — — 112,000
−Removed: Loan facility
+Added: $ 4,581 $ 4,000 $ 4,000 $ 100,000 $ — $ — $ 112,581
From time to time in the normal course of business, the Company may be involved in formal and informal dispute resolution procedures, which may include arbitration or litigation, the outcomes of which determine the rights and obligations under the Company’s reinsurance contracts and other contractual agreements.
−Removed: In some disputes, the Company may seek to enforce its rights under an agreement or to collect funds owing to it.
+Added: In some disputes, the Company may seek to enforce its rights under an agreement or to collect funds owed to it.
In other matters, the Company may resist attempts by others to collect funds or enforce alleged rights.
1 unchanged sentence
SEGMENT REPORTING
−Removed: The Company manages its business on the basis of one operating segment, Property & Casualty Reinsurance.
+Added: The Company has one operating segment, Property & Casualty Reinsurance.
Substantially all of the business is sourced through reinsurance brokers.
1 unchanged sentence
Year ended December 31
+Added: 2020 2019 2018
($ in thousands)
Guy Carpenter (Marsh) $ 195,274 40.7 % $ 297,150 56.7 % $ 376,696 66.4 %
+Added: Trean Re 112,659 23.5 85,323 16.3 45,446 8.0
+Added: Willis Re 31,970 6.7 21,094 4.0 9,501 1.7
+Added: Aon Benfield 29,032 6.0 41,071 7.8 70,554 12.4
Total of largest brokers $ 368,935 76.9 % $ 444,638 84.8 % $ 502,197 88.5 %
+Added: All other brokers and direct placements 110,856 23.1 79,339 15.2 65,334 11.5
+Added: Total $ 479,791 100.0 % $ 523,977 100.0 % $ 567,531 100.0 %
Link to Table of Contents
2 unchanged sentences
Year ended December 31
+Added: 2020 2019 2018
($ in thousands)
+Added: Commercial $ 11,190 2.3 % $ 14,165 2.7 % $ 10,487 1.8 %
+Added: Motor 33,054 6.9 59,402 11.3 76,425 13.5
+Added: Personal 14,219 3.0 12,390 2.4 14,118 2.5
Total Property 58,463 12.2 85,957 16.4 101,030 17.8
2 unchanged sentences
Professional Liability (1)
+Added: 204 — ( 448 ) ( 0.1 ) 3,068 0.5
Workers' Compensation 82,189 17.1 50,369 9.6 24,101 4.3
+Added: Multi-line 88,237 18.4 76,461 14.6 57,497 10.1
Total Casualty 302,237 63.0 362,374 69.2 377,785 66.6
Accident & Health 56,284 11.7 39,175 7.5 69,605 12.2
+Added: Financial 23,231 4.8 23,087 4.4 16,611 2.9
+Added: Marine 770 0.2 160 — 394 0.1
Other Specialty 38,806 8.1 13,224 2.5 2,106 0.4
+Added: Total Other 119,091 24.8 75,646 14.4 88,716 15.6
+Added: $ 479,791 100.0 % $ 523,977 100.0 % $ 567,531 100.0 %
(1) The negative balance represents the reversal of premiums due to premium adjustments, termination of contracts or premium returned upon novation or commutation of contracts.
1 unchanged sentence
Year ended December 31
+Added: 2020 2019 2018
($ in thousands)
1 unchanged sentence
Worldwide (1)
+Added: 84,204 17.5 84,728 16.2 59,366 10.5
+Added: 5,587 1.2 3,804 0.7 ( 46 ) —
+Added: — — ( 13 ) — 506 —
+Added: $ 479,791 100.0 % $ 523,977 100.0 % $ 567,531 100.0 %
(1) “Worldwide” is composed of contracts that reinsure risks in more than one geographic area and may include risks in the U.S.
2 unchanged sentences
QUARTERLY FINANCIAL RESULTS (UNAUDITED)
−Removed: The following table presents the quarterly financial results for each of the quarters ended during 2019 :
+Added: The following table presents the quarterly financial results for each of the quarters ended during December 31, 2020:
Quarter ended
5 unchanged sentences
Net premiums earned 111,021 108,414 115,519 120,457
−Removed: Income (loss) from investment in related party investment fund
+Added: Income (loss) from investment in related party investment fund [net of related party expenses] ( 42,126 ) 1,609 6,431 38,517
Net investment income (loss) 6,837 3,934 466 9,864
6 unchanged sentences
Total expenses 115,791 114,808 121,802 127,401
−Removed: Income (loss) before income tax expense
+Added: Income (loss) before income tax ( 39,846 ) ( 63 ) 2,183 42,016
Income tax (expense) benefit ( 424 ) — — —
−Removed: Net income (loss) attributable to Greenlight Capital Re, Ltd.
+Added: Net income (loss) ( 40,270 ) ( 63 ) 2,183 42,016
Earnings (loss) per share
+Added: Basic ( 1.11 ) — 0.06 1.20
+Added: Diluted ( 1.11 ) — 0.06 1.20
Weighted average number of ordinary shares used in the determination of earnings and loss per share
+Added: Basic 36,138,245 35,776,736 35,677,554 35,019,037
+Added: Diluted 36,138,245 35,776,736 35,779,703 35,135,759
Link to Table of Contents
−Removed: The following table presents the quarterly financial results for each of the quarters ended during 2018 :
+Added: The following table presents the quarterly financial results for each of the quarters ended during December 31, 2019:
Quarter ended
5 unchanged sentences
Net premiums earned 125,362 120,441 129,154 108,623
−Removed: Income (loss) from investment in related party investment fund
+Added: Income (loss) from investment in related party investment fund [net of related party expenses] 30,756 14,405 6,609 ( 5,714 )
Net investment income (loss) 1,567 4,386 3,312 ( 3,054 )
9 unchanged sentences
Net income (loss) $ 5,906 $ 15,314 $ 5,140 $ ( 30,346 )
−Removed: Loss (income) attributable to non-controlling interest in related party joint venture
−Removed: Net income (loss) attributable to Greenlight Capital Re, Ltd.
Earnings (loss) per share
+Added: Basic $ 0.16 $ 0.42 $ 0.14 $ ( 0.84 )
+Added: Diluted $ 0.16 $ 0.42 $ 0.14 $ ( 0.84 )
Weighted average number of ordinary shares used in the determination of earnings and loss per share
+Added: Basic 35,972,665 36,100,665 36,841,623 36,121,023
+Added: Diluted 36,364,358 36,829,963 36,921,490 36,121,023
+Added: SUBSEQUENT EVENTS
+Added: On January 7, 2021, the Company and DME II, entered into the Second Amended and Restated Exempted Limited Partnership Agreement, effective as of January 1, 2021 (the “Restated SILP LPA”).
+Added: The Restated SILP LPA agreement amends, restates, supersedes and incorporates all material terms of the SILP LPA, as amended as of February 26, 2019, and the letter agreements dated as of June 18, 2019, December 27, 2019 and August 5, 2020 (collectively, the “Amendments”).
+Added: The Restated SILP LPA agreement also amended the definition of “Additional Investment Ratio” and amended each of the defined terms “Greenlight Re Surplus” and the “GRIL Surplus” so as to clarify that the each of the respectively referenced “financial statements” are “U.S.
+Added: GAAP financial statements.” In addition, the Restated SILP LPA agreement included the following:
+Added: “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.”.
+Added: The Restated SILP LPA also amended the investment guidelines to reflect the amended investment guidelines adopted by the board of directors of the Company effective as of January 1, 2021.
Link to Table of Contents
3 unchanged sentences
(expressed in thousands of U.S.
−Removed: Type of Investment
+Added: Type of Investment Cost Fair Value Balance
($ in thousands)
1 unchanged sentence
Private investments and unlisted equities $ 12,414 $ 21,793 $ 21,793
−Removed: Investment accounted for under the equity method
+Added: Investment accounted for under the equity method NA 6,545 6,545
+Added: Derivative financial instruments (not designated as hedging instruments) — 1,080 1,080
Total other investments 12,414 29,418 29,418
5 unchanged sentences
(expressed in thousands of U.S.
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: December 31, 2020 December 31, 2019
($ in thousands)
2 unchanged sentences
Investment in subsidiaries 551,790 557,835
−Removed: Notes receivable (net of valuation allowance)
+Added: Notes receivable (net of allowance for expected credit losses) 10,706 10,469
Due from subsidiaries — 8,200
+Added: Total assets $ 562,503 $ 577,506
Liabilities and equity
14 unchanged sentences
Year ended December 31
+Added: 2020 2019 2018
($ in thousands)
14 unchanged sentences
Year Ended December 31
+Added: 2020 2019 2018
($ in thousands)
5 unchanged sentences
Share-based compensation expense 2,124 3,686 4,382
−Removed: Amortization and interest expense
+Added: Amortization and interest expense, net of change in accruals 2,280 2,329 2,505
Net change in
1 unchanged sentence
Other liabilities ( 1,611 ) 1,611 —
−Removed: Due from subsidiaries
+Added: Due to subsidiaries ( 3,346 ) ( 2,421 ) 7,619
Net cash provided by (used in) operating activities ( 1,977 ) ( 15,432 ) 10,006
1 unchanged sentence
Purchase of investments — — ( 800 )
+Added: Sale of investments 1,000 — —
Change in note receivable ( 237 ) 11,496 ( 6,610 )
15 unchanged sentences
(expressed in thousands of U.S.
+Added: Year Segment Deferred
+Added: costs, net Reserves
+Added: – gross Unearned
investment related
−Removed: income (loss)
+Added: income (loss) Net losses,
+Added: expenses Amortization
+Added: expenses Gross
2020 Property & Casualty $ 51,014 $ 494,179 $ 201,089 $ 455,411 $ 25,532 $ 337,833 $ 109,288 $ 26,401 $ 479,791
5 unchanged sentences
(expressed in thousands of U.S.
−Removed: other companies
−Removed: other companies
−Removed: Net written premiums
−Removed: Percentage of
+Added: Year Segment Direct gross
+Added: premiums Premiums
+Added: other companies Premiums
+Added: other companies Net written premiums Percentage of
assumed to net
3 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.