9 unchanged sentences
Equity Price Risk
−Removed: At March 31, 2021, our investments consisted primarily of an investment in SILP.
+Added: At June 30, 2021, our investments consisted primarily of an investment in SILP.
Among SILP’s holdings are equity securities, the carrying values of which are based primarily on quoted market prices.
1 unchanged sentence
This risk is partly mitigated by the presence of both long and short equity securities as part of our investment strategy.
−Removed: At March 31, 2021, a 10% decline in the price of each of the underlying listed equity securities and equity-based derivative instruments would result in a $4.6 million loss to our Investment Portfolio.
+Added: At June 30, 2021, a 10% decline in the price of each of the underlying listed equity securities and equity-based derivative instruments would result in a $7.5 million loss to our Investment Portfolio.
Computations of the prospective effects of hypothetical equity price changes are based on numerous assumptions, including the maintenance of the current composition of SILP’s portfolio.
3 unchanged sentences
SILP’s investments periodically include long or short investments in commodities or derivatives directly impacted by fluctuations in the prices of commodities.
−Removed: At March 31, 2021, SILP’s investments incorporate unhedged exposure to changes in gold and silver prices.
−Removed: The following table summarizes the net impact that a 10% increase and decrease in commodity prices would have on the value of our Investment Portfolio at March 31, 2021.
+Added: At June 30, 2021, SILP’s investments incorporate unhedged exposure to changes in gold, silver, and crude oil prices.
+Added: The following table summarizes the net impact that a 10% increase and decrease in commodity prices would have on the value of our Investment Portfolio at June 30, 2021.
The below table excludes the indirect effect that changes in commodity prices might have on equity securities in our Investment Portfolio.
5 unchanged sentences
Silver 0.4 (0.4)
+Added: Crude oil 0.1 (0.1)
Total $ 2.5 $ (2.5)
3 unchanged sentences
While we do not seek to precisely match our liabilities under reinsurance policies that are payable in foreign currencies with investments denominated in such currencies, we continually monitor our exposure to potential foreign currency losses and may use foreign currency cash and cash equivalents or forward foreign currency exchange contracts to mitigate against adverse foreign currency movements.
−Removed: At March 31, 2021, our exposure to GBP denominated net asset balance was £13.1 million.
−Removed: At March 31, 2021, a 10% decrease in the U.S.
+Added: At June 30, 2021, our exposure to GBP denominated net asset balance was £25.7 million.
+Added: At June 30, 2021, a 10% decrease in the U.S.
dollar against the GBP (all else constant) would result in an estimated $3.6 million foreign exchange gain.
Alternatively, a 10% increase in the U.S dollar against the GBP would result in an estimated $3.6 million foreign exchange loss.
−Removed: Similarly, at March 31, 2021, our net exposure to Euro-denominated liability balances was €1.7 million.
−Removed: At March 31, 2021, a 10% decrease in the U.S.
+Added: Similarly, at June 30, 2021, our net exposure to Euro-denominated liability balances was €1.5 million.
+Added: At June 30, 2021, a 10% decrease in the U.S.
dollar against the Euro (all else constant) would result in an estimated $0.2 million foreign exchange loss.
1 unchanged sentence
We may also be exposed to foreign currency risk through SILP’s underlying cash, forwards, options, and investments in securities denominated in foreign currencies.
−Removed: At March 31, 2021, some of our currency exposure resulting from foreign denominated securities (longs and shorts) was reduced by offsetting cash balances denominated in the corresponding foreign currencies.
−Removed: At March 31, 2021, a 10% increase or decrease in the value of the U.S.
+Added: At June 30, 2021, a majority of our currency exposure resulting from foreign denominated securities (longs and shorts) was reduced by offsetting cash balances denominated in the corresponding foreign currencies.
+Added: At June 30, 2021, a 10% increase or decrease in the value of the U.S.
dollar against foreign currencies would have no meaningful impact on the value of our Investment Portfolio.
1 unchanged sentence
Interest Rate Risk
−Removed: Our investment in SILP includes interest-rate sensitive securities, such as corporate and sovereign debt instruments and interest rate swaps.
+Added: Our investment in SILP includes interest-rate sensitive securities, such as corporate and sovereign debt instruments and interest rate options.
The primary market risk exposure for any debt instrument is interest rate risk.
2 unchanged sentences
Additionally, some of the derivative investments may also be sensitive to interest rates, and their value may indirectly fluctuate with changes in interest rates.
−Removed: At March 31, 2021, a 100 basis points increase or decrease in interest rates would have no meaningful impact on the value of our Investment Portfolio.
+Added: At June 30, 2021, SILP’s investments included interest rate options expiring in September 2021 which were exposed to movements in the 3-month LIBOR interest rates (“LIBOR”).
+Added: If the LIBOR interest rates decreased by 15 basis points to 0%, the value of our Investment Portfolio would decrease by $2.9 million.
+Added: If the LIBOR interest rates increased by 100 basis points, it would have no meaningful impact on the value of our Investment Portfolio.
We, along with DME Advisors, monitor the net exposure to interest rate risk and generally do not expect changes in interest rates to have a materially adverse impact on our operations.
1 unchanged sentence
Our maximum exposure to credit risk is the carrying value of our financial assets.
−Removed: We evaluate the financial condition of our notes receivable counterparties and monitor our exposure to them on a regular basis.
−Removed: We are also exposed to credit risk from our business partners and clients relating to balances receivable under our reinsurance contracts, including premiums receivable, losses recoverable, and commission adjustments recoverable.
+Added: We evaluate the financial condition of our business partners and clients relating to balances receivable under our reinsurance contracts, including premiums receivable, losses recoverable, and commission adjustments recoverable.
We obtain collateral in the form of funds withheld, trusts and letters of credit from our counterparties to mitigate this credit risk.
We monitor our net exposure to each counterparty relative to the financial strength of our counterparties and assess the collectibility of these balances on a regular basis.
−Removed: See Note 2 of the accompanying condensed consolidated financial statements for further details on allowance for credit loss on reinsurance assets and notes receivable.
+Added: See Note 2 of the accompanying condensed consolidated financial statements for further details on allowance for credit loss on reinsurance assets.
In addition, the securities, commodities, and cash in SILP’s investment portfolio are held with several prime brokers and derivative counterparties, subjecting SILP, and indirectly us, to a significant concentration of credit risk.
8 unchanged sentences
Risk Factors - We could face unanticipated losses from political instability which could have a material adverse effect on our financial condition and results of operations” included in our Form 10-K for the fiscal year ended December 31, 2020.
+Added: Return to table of contents
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.