What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-03-08 compared with 2021-03-10 · 112 added, 108 removed, 453 unchanged (33% of the section changed)

15 unchanged sentences

We are a global specialty property and casualty reinsurer headquartered in the Cayman Islands, with a reinsurance and investment strategy that we believe differentiates us from our competitors.

We conduct our reinsurance operations through two licensed and regulated reinsurance entities:

We conduct our reinsurance operations through two licensed and regulated entities:

Greenlight Re, based in the Cayman Islands, and GRIL, based in Dublin, Ireland.

2 unchanged sentences

We focus on delivering risk solutions to clients and brokers who value our expertise, analytics, and customer service offerings.

In 2018, we launched our Greenlight Re Innovations unit, which supports technology innovators in the (re)insurance market by providing investment, risk capacity, and access to a broad insurance network.

We aim to complement our underwriting results with a non-traditional investment approach to achieve higher rates of return over the long term than reinsurance companies that exclusively employ more traditional investment strategies.

15 unchanged sentences

● Where we have domain-specific expertise and a high level of market access, we may seek to act as the lead underwriter to achieve greater influence in negotiating pricing, terms, and conditions;

● where our expertise is sufficient to evaluate the risk thoroughly, we will generally seek to participate in syndicated placements that have been negotiated and priced by another party that we judge to have market-leading expertise in the class, or as a quota share retrocessionaire of a market-leading reinsurer.

● Where our expertise is sufficient to evaluate the risk thoroughly, we will generally seek to participate in syndicated placements negotiated and priced by another party that we judge to have market-leading expertise in the class or as a quota share retrocessionaire of a market-leading reinsurer.

Risk innovation and strategic partnerships

We seek to develop a range of risk products, via strategic partnerships and other methods to gain access to fee income, a stream of underwriting business, and investment upside potential.

We seek to develop a range of risk products via strategic partnerships and other methods to access fee income, a stream of underwriting business, and investment upside potential.

We refer to this pillar as Greenlight Re Innovations (“Innovations”).

1 unchanged sentence

● The value we add to a partnership primarily comes from the application of our risk expertise, not solely capital or reinsurance support;

● the partnership adds expertise to our company, in specific risk areas, technology, product innovation, and/or other areas;

● the partnership provides access to a pool of capital, to products or to distribution;

● overall, the partnership creates a combined effort that generates durable strategic and/or competitive position in one or more markets, and increases our opportunity for revenue growth and margin expansion opportunities.

● The partnership approach adds expertise to our company in specific risk areas, technology, product innovation, or other areas;

● The partnership approach provides access to a pool of capital, to products, or distribution;

● Overall, the partnership approach creates a combined effort that generates a durable strategic or competitive position in one or more markets and increases our opportunities to achieve revenue growth and margin expansion.

Our investment strategy, like our reinsurance strategy, is designed to maximize returns over the long term while minimizing the risk of capital loss.

Unlike the investment strategies of many of our traditional competitors, which invest primarily in fixed-income securities either directly or through fixed-fee arrangements with one or more investment managers, our investment strategy is to invest (directly or indirectly) in long and short positions primarily in publicly-traded equity and corporate debt instruments.

Unlike the investment strategies of many of our traditional competitors, which invest primarily in fixed-income securities either directly or through fixed-fee arrangements with one or more investment managers, our investment strategy is focused primarily on long and short positions, primarily in publicly-traded equity and corporate debt instruments.

We measure our success by long-term growth in book value per share, which we believe is the most comprehensive gauge of our performance.

6 unchanged sentences

● employ strict underwriting discipline;

● select reinsurance opportunities with anticipated favorable returns on capital over the contract’s term.

● select reinsurance opportunities with anticipated favorable returns on capital.

Link to Table of Contents

20 unchanged sentences

$ 565,393 100.0 % $ 479,791 100.0 % $ 523,977 100.0 %

(1) Negative balances reflect premium adjustments and premium returned upon contract’s termination, novation or commutation.

(1) Negative balances reflect premium adjustments and premium returned upon contracts’ termination, novation, or commutation.

The following table sets forth our gross premiums written by the geographic area of the risk insured:

8 unchanged sentences

$ 565,393 100.0 % $ 479,791 100.0 % $ 523,977 100.0 %

(1) “Worldwide” is composed of contracts that reinsure risks in more than one geographic area and may include risks in the U.S.

(1) “Worldwide” comprises contracts that reinsure risks in more than one geographic area and may include risks in the U.S.

(2) Negative balances reflect premium adjustments and premium returned upon contract’s termination, novation, or commutation.

Additional information about our business is set forth in “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Link to Table of Contents

Marketing and Distribution

3 unchanged sentences

In some cases, intermediaries also provide other valuable services, including risk analytics, processing, and clearing.

Link to Table of Contents

We aim to build and strengthen long-term relationships with global reinsurance brokers.

Our management team has relationships with most primary and specialty broker intermediaries in the reinsurance marketplace.

We believe that by maintaining close relationships with brokers we will continue to obtain access to a broad range of reinsurance clients and opportunities.

By maintaining close relationships with brokers, we believe that we will continue to obtain access to a broad range of reinsurance clients and opportunities.

We seek to strengthen our broker relationships and become the preferred choice of brokers and clients by providing, where applicable:

5 unchanged sentences

● a clear indication of risks we will and will not underwrite.

We focus on the quality and financial strength of any brokerage firm with which we do business.

We focus on the quality and financial strength of any brokerage firm we do business with.

Brokers do not have the authority to bind us to any reinsurance contract.

Reinsurance brokers receive a brokerage commission that is usually a percentage of gross premiums written.

Reinsurance brokers receive a brokerage commission, usually a percentage of gross premiums written.

The following table sets forth the premiums generated through our largest brokers and their subsidiaries and affiliates:

3 unchanged sentences

Guy Carpenter (Marsh) $ 178,336 31.5 % $ 195,274 40.7 % $ 297,150 56.7 %

Trean Re 112,659 23.5 85,323 16.3 45,446 8.0

Willis Re 31,970 6.7 21,094 4.0 9,501 1.7

Aon Benfield 139,044 24.6 29,032 6.0 41,071 7.8

BMS Group 63,958 11.3 112,659 23.5 85,323 16.3

Total of largest brokers 381,338 67.4 336,965 70.2 423,544 80.7

1 unchanged sentence

Total $ 565,393 100.0 % $ 479,791 100.0 % $ 523,977 100.0 %

We meet frequently in the Cayman Islands, Ireland and elsewhere with brokers and senior representatives of clients and prospective clients.

We review and (when we deem appropriate) approve all contract submissions in our offices in the Cayman Islands or Ireland.

We frequently meet in the Cayman Islands, Ireland, and elsewhere with brokers and senior representatives of clients and prospective clients.

We review and (when we deem appropriate) approve all contract submissions in the Cayman Islands or Ireland.

Due to our dependence on brokers, the inability to obtain business from them could adversely affect our business strategy.

8 unchanged sentences

Our experienced team allows us to deploy our capital in a variety of lines of business and capitalize on opportunities that we believe offer favorable returns on equity over the long term.

Our underwriters and actuaries have expertise in multiple lines of business, and we also look to outside consultants on a fee-for-service basis to help us with niche areas of expertise when we deem it appropriate.

Our underwriters and actuaries have expertise in multiple lines of business.

We generally apply the following underwriting and risk management principles:

Link to Table of Contents

Economics of Results

Our primary underwriting goal is to build a reinsurance portfolio that maximizes profitability, subject to risk and volatility constraints.

Link to Table of Contents

Underwriting Analysis

6 unchanged sentences

In seeking this approval, the deal team presents the key components of the proposed transaction, including assumptions and threats, market and individual deal risk factors, market capacity dynamics, transaction structure and pricing, maximum downside, and other factors.

We spend a significant amount of time with our current and prospective clients and brokers to understand the risks associated with each potential transaction and structure each contract based on this understanding.

We collaborate with our current and prospective clients and brokers to understand the risks associated with each potential transaction.

For most of our business, we follow terms set by recognised market leads.

The remainder of our business is considered lead business, including business linked to our Innovations portfolio or in areas where we have significant market expertise.

We generally use contract structure to ensure alignment of interest where we lead the business.

Where appropriate, we conduct or contract for on-site audits or reviews of the clients’ underwriting files, systems, and operations.

We usually obtain substantial amounts of data from our clients to conduct a thorough actuarial modeling analysis.

We usually obtain substantial data from our clients to conduct a thorough actuarial modeling analysis.

As part of our pricing and underwriting process, we assess, among other factors:

5 unchanged sentences

● the reputation and expertise of the broker;

● the likelihood of establishing a long-term relationship with the client and the broker;

● reports provided by independent industry specialists.

We have developed and use proprietary quantitative models, and also use several commercially available tools to price our business.

We develop and use proprietary quantitative models and use several commercially available tools to price our business.

Our models consider conventional underwriting and risk metrics and incorporate various class-specific and market-specific aspects from our line-of-business analyses.

Using models, we consider the quantitative work’s quality and predictive power and undertake a detailed assessment of the data quality.

We place greater weight on scenarios that result in higher losses.

We use models to evaluate the quantitative work’s quality and predictive power and undertake a detailed assessment of the data quality.

Underwriting Authorities

1 unchanged sentence

The Underwriting Committee must approve any exceptions to the established limits.

The Underwriting Committee may amend the maximum underwriting authorities periodically and to align with our capital base.

The Underwriting Committee may amend the maximum underwriting authorities periodically to align with our capital base.

The Underwriting Committee designs our underwriting authorities to ensure the underwriting portfolio is appropriate on a risk-adjusted basis.

Retrocessional Coverage

We selectively purchase retrocessional coverage for one or more of the following reasons:

to manage our overall catastrophe events exposure, to reduce our net liability on individual risks, to obtain additional underwriting capacity and to balance our underwriting portfolio.

The amount of retrocessional coverage that we purchase varies based on numerous factors, including the inherent volatility and risk accumulation of the portfolio of business we write and our capital base.

Our portfolio, and by extension our

We opportunistically purchase retrocessional coverage for one or more of the following reasons:

to manage our overall catastrophe events or aggregate exposure, reduce our net liability on individual risks, obtain additional underwriting capacity, and balance our underwriting portfolio.

Link to Table of Contents

gross risk position, will change in size from year to year depending on market opportunities, so it is impossible to predict the level of retrocessional coverage that we will purchase in any future year.

Our portfolio, and by extension our gross risk position, will change in size from year to year depending on market opportunities, so it is difficult to predict the level of retrocessional coverage that we will purchase in any future year.

We generally purchase uncollateralized retrocessional coverage from reinsurers with a minimum financial strength rating of “A- (Excellent)” from A.M.

2 unchanged sentences

For lower-rated or non-rated reinsurers, we endeavor to obtain and monitor collateral in the form of cash, funds withheld, letters of credit, regulatory trusts, or other collateral in the form of guarantees.

As of December 31, 2020, the aggregate amount due from reinsurers from retrocessional coverages represents 3.4% (December 31, 2019:

At December 31, 2021, the aggregate amount due from reinsurers from retrocessional coverages represents 2.1% (December 31, 2020:

3.4%) of our gross loss reserves.

2 unchanged sentences

At December 31, 2021, the Company had recorded an allowance for expected credit losses of $0.1 million (December 31, 2020:

$0.1 million).

Claims Management

Our claims management process begins upon receipt of claims notifications from our clients or third-party administrators.

Our claims management process begins upon receiving claims notifications from our clients or third-party administrators.

We review reserving and settlement authority under the individual contract requirements and, as necessary, discuss with the contract’s underwriter.

Our in-house claims officer is responsible for overseeing claims reviews and providing approval for complex or large claim settlements.

Our in-house claims officer oversees claims reviews and provides approval for complex or large claim settlements.

Claims above the claims officer’s authority are referred to the general counsel, together with the claims officer’s recommendations, for secondary approval.

13 unchanged sentences

Currently, this process involves analysis at the individual client or transaction level.

We engage independent external actuaries who review and provide an opinion on these reserve estimates at least once a year.

We engage independent external actuaries who review and provide opinions on these reserve estimates at least once a year.

Due to the use of different assumptions and loss experience, the amount we establish as reserves with respect to individual risks, clients, transactions, or business lines may be greater or less than those set by our clients or ceding companies.

3 unchanged sentences

Although the methods for establishing reserves are well established, many assumptions about anticipated loss emergence patterns are subject to unanticipated fluctuation.

We base our estimates on our assessment of facts and circumstances known at the time of the estimate, as well as estimates of future trends in claim severity and frequency, judicial theories of liability, and other factors, including the actions of third parties, which are beyond our control.

We base our estimates on our assessment of facts and circumstances, future trends in claim severity and frequency, judicial theories of liability, and other factors, including the actions of third parties, which are beyond our control.

See Note 7 of the accompanying consolidated financial statements for a reconciliation of claims reserves, loss development tables by accident year, and explanations of significant prior period loss development movements.

See “Item 1A.

Risk Factors — Risks Relating to Our Business — If our losses and loss adjustment expenses greatly exceed our loss reserves, our financial condition may be materially and adversely affected.

Risk Factors — Risks Relating to Our

Link to Table of Contents

Business — If our losses and loss adjustment expenses greatly exceed our loss reserves, our financial condition may be materially and adversely affected.

Collateral Arrangements and Letter of Credit Facilities

5 unchanged sentences

We provide collateral as funds withheld, trust arrangements, or letters of credit.

As of December 31, 2020, we had one letter of credit facility with a limit of $275.0 million (2019:

one facility with a limit of $400.0 million).

In 2020, we amended the Citibank facility and reduced the maximum limit from $400.0 million to $275.0 million.

As of December 31, 2020, we had issued letters of credit totaling $135.3 million (2019:

At December 31, 2021, we had one letter of credit facility with a limit of $275.0 million (2020:

$275.0 million).

At December 31, 2021, we had issued letters of credit totaling $136.8 million (2020:

$135.3 million) to clients.

Additionally, as of December 31, 2020, we had pledged $607.8 million (2019:

Additionally, at December 31, 2021, we had pledged $497.1 million (2020:

$607.8 million) as collateral through trust arrangements.

2 unchanged sentences

Our competitors vary according to the individual market and situation.

Generally, they include Arch Capital, Axis, Everest Re, Hamilton Re, Hannover Re, PartnerRe, RenaissanceRe, SiriusPoint, and smaller companies, other niche reinsurers and Lloyd’s syndicates and their related entities.

Generally, they include Arch Capital, Axis, Everest Re, Hamilton Re, Hannover Re, RenaissanceRe, SiriusPoint, and smaller companies, other niche reinsurers, and Lloyd’s syndicates and their related entities.

Although we seek to provide coverage where capacity and alternatives are limited, we directly compete with these and other larger companies due to the breadth of their coverage across the property and casualty market in substantially all lines of business.

See "Item 1A – Risk Factors – Risks Relating to Our Business – Competitors with greater resources may make it difficult for us to effectively market our products or offer our products at a profit.

Our current “A- (Excellent)” rating from A.M.

Our current “A- (Excellent)” rating with a stable outlook from A.M.

Best is the fourth highest of 13 ratings.

2 unchanged sentences

It is not an evaluation directed toward the investors’ protection or a recommendation to buy, sell or hold our Class A ordinary shares.

Best has currently assigned a negative outlook on our A- (Excellent) rating.

The failure to maintain a strong rating may significantly and negatively affect our ability to implement our business strategy.

34 unchanged sentences

Where a breach is committed by a corporate entity and is shown to have been committed with the consent, connivance, knowledge, or neglect of an individual, that individual may also be subject to an administrative fine.

Link to Table of Contents

Whenever CIMA believes that a licensee is or may become unable to meet its obligations as they fall due, is carrying on business in a manner likely to be detrimental to the public interest or the interests of its creditors or policyholders, has contravened the terms of the Act or has otherwise behaved in such a manner to cause CIMA to call into question the licensee’s fitness, CIMA may take one of several steps.

contravened the terms of the Act or has otherwise behaved in such a manner to cause CIMA to call into question the licensee’s fitness, CIMA may take one of several steps.

The steps include requiring the licensee to rectify the matter, suspending the license of the licensee, revoking the license, imposing conditions upon the license and amending or revoking any such condition, requiring the substitution of any director, manager or officer of the licensee, at the expense of the licensee, appointing a person to advise the licensee on the proper conduct of its affairs and to report to CIMA thereon, at the expense of the licensee, appointing a person to assume control of the licensee’s affairs or otherwise requiring such action to be taken by the licensee as CIMA considers necessary.

17 unchanged sentences

The 2018 Regulations give effect in Ireland to Directive (EU) 2016/97 (known as the "IDD") and strengthen the regulatory regime applicable to distribution activities through increased transparency, information, and conduct requirements.

As of 25 May 2018, the General Data Protection Regulation (the "GDPR") came into force across the EU.

On May 25, 2018, the General Data Protection Regulation (the "GDPR") came into force across the EU.

The GDPR significantly increases the organizations’ obligations and responsibilities in collecting, using, storing, and protecting personal data.

4 unchanged sentences

DME Advisors is controlled by David Einhorn, the Chairman of our Board of Directors and the President of Greenlight Capital, Inc.

Prior to September 1, 2018, substantially all of our investable assets were invested through a joint venture arrangement in which DME Advisors, LLC (“DME”) acted as the investment advisor.

We were party to a joint venture agreement (the “venture agreement”) with DME Advisors and DME under which the Company, its reinsurance subsidiaries and DME were participants in a joint venture (the “Joint Venture”) created to manage certain jointly held assets.

In addition to the venture agreement, we had entered into an amended and restated investment advisory agreement (the “advisory agreement”) with DME Advisors to provide discretionary advisory services relating to the assets and liabilities of the venture.

On January 2, 2019, the Joint Venture was terminated.

On September 1, 2018, we 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”).

We show our investment in SILP under the caption “Investment in related party investment fund” in our consolidated balance sheets.

We have 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”).

We present our investment in SILP under the caption “Investment in related party investment fund” in our consolidated balance sheets.

On September 1, 2018, SILP entered into an investment advisory agreement (the “IAA”) with DME Advisors, with an initial term ending on August 31, 2023, subject to automatic extensions for successive three-year terms.

3 unchanged sentences

1 to the SILP LPA.

amendment revised the mechanics for calculating the Carryforward Account and Performance Allocation (as defined in the SILP LPA) to consider withdrawals from and subsequent recontributions of capital to SILP, consistent with the treatment under the Joint Venture.

On January 7, 2021, effective as of January 1, 2021, we entered into a second amendment to the SILP LPA which amended (a) the definition of “Additional Investment Ratio” and (b) each of the defined terms “Greenlight Re Surplus” and “GRIL Surplus”.

The second amendment to the SILP LPA also incorporated the requirement that the Investment Portfolio, as defined in the SILP LPA, will not exceed 50% of GLRE Surplus.

On January 7, 2021, effective as of January 1, 2021, we entered into a second amendment to the SILP LPA, which amended (a) the definition of “Additional Investment Ratio” and (b) each of the defined terms “Greenlight Re Surplus” and “GRIL Surplus.” The second amendment to the SILP LPA also incorporated the requirement that the Investment Portfolio, as defined in the SILP LPA, will not exceed 50% of GLRE Surplus.

DME Advisors receives a monthly management fee at an annual rate of 1.5% of each limited partner’s Investment Portfolio, as provided in the SILP LPA.

9 unchanged sentences

Under the SILP LPA, we are contractually obligated to use commercially reasonable efforts to cause substantially all investable assets of Greenlight Re and GRIL, with limited exceptions, to be contributed to SILP.

Link to Table of Contents

We have agreed to release DME, DME II, and DME Advisors and their affiliates from, and to indemnify and hold them harmless against, any liability arising out of the venture agreement and the advisory agreement, subject to certain exceptions.

Furthermore, DME, DME II, and DME Advisors and their affiliates have agreed to indemnify us against any liability incurred in connection with certain actions.

We have agreed to release DME II, and DME Advisors and their affiliates from any liability arising out of the IAA or the SILP LPA, subject to certain exceptions.

Furthermore, DME II has agreed to indemnify us against any liability incurred in connection with certain actions.

Under the SILP LPA, either of the GLRE Limited Partners may voluntarily withdraw all or part of its capital account for its operating needs by giving DME II at least three business days’ notice.

Either of the GLRE Limited Partners may withdraw as a partner and fully withdraw all of its capital account from SILP on three business days’ notice if the limited partner’s board declares that a cause for withdrawal exists as per the SILP LPA.

Link to Table of Contents

Investment Strategy

2 unchanged sentences

DME Advisors attempts to determine the risk/return characteristics of potential investments by analyzing factors such as the risk that expected cash flows would not be achieved, the volatility of the cash flows, the leverage of the underlying business, and the security’s liquidity, among others.

Our Board of Directors conducts reviews of our investment portfolio activities and oversees our investment guidelines to meet our investment objectives.

We believe our investment approach, while less predictable than traditional fixed-income portfolios, complements our reinsurance business and will achieve higher rates of return over the long term than reinsurance companies that invest predominantly in fixed-income securities.

Our Board of Directors reviews our investment portfolio activities and oversees our investment guidelines to meet our investment objectives.

We believe our investment approach, while generating returns less predictable than those of traditional fixed-income portfolios, complements our reinsurance business and will achieve higher rates of return over the long term than reinsurance companies that invest predominantly in fixed-income securities.

We have designed our investment guidelines to maintain adequate liquidity to fund our reinsurance operations.

1 unchanged sentence

These decisions may include buying publicly listed equity securities and corporate debt, selling securities short, and investing in private placements, futures, currencies, commodities, credit default swaps, interest rate swaps, sovereign debt, derivatives, and other instruments.

As of December 31, 2020, DME Advisors was in compliance with our investment guidelines.

Investment Guidelines

The investment guidelines adopted by the respective Boards of Directors of Greenlight Re and GRIL, which may be amended or modified from time to time, take into account restrictions imposed on us by regulators, our liability mix, requirements to maintain an appropriate claims paying rating by ratings agencies and requirements of lenders.

As of the date hereof, Greenlight Re’s investment guidelines, which Greenlight Re’s board of directors may amend at any time, are as follows:

Link to Table of Contents

The investment guidelines adopted by the respective Boards of Directors of Greenlight Re and GRIL, which may be amended, modified or waived from time to time, take into account restrictions imposed on us by regulators, our liability mix, requirements to maintain an appropriate claims-paying rating by ratings agencies and requirements of lenders.

At the date hereof, Greenlight Re’s investment guidelines, which Greenlight Re’s board of directors may amend at any time, are as follows:

● Composition of Investments:

At least 80% of the assets in its Investment Portfolio (as defined in the Limited Partnership Agreement) will be held in debt or equity securities (including swaps) of publicly-traded companies (or their subsidiaries), governments of the Organization of Economic Co-operation and Development high income countries, cash, cash equivalents and gold.

No more than 10% of Greenlight Re Surplus (as defined in the Limited Partnership Agreement) will be held in private equity securities.

At least 80% of the assets in its Investment Portfolio (as defined in the SILP LPA) will be held in debt or equity securities (including swaps) of publicly-traded companies (or their subsidiaries), governments of the Organization of Economic Co-operation and Development high-income countries, cash, cash equivalents, and gold.

No more than 10% of Greenlight Re Surplus (as defined in the SILP LPA) will be held in private equity securities.

● Concentration of Investments:

3 unchanged sentences

● Monitoring:

Greenlight Re will require the Investment Advisor to re-evaluate each position in its Investment Portfolio and to monitor changes in intrinsic value and trading value and provide monthly reports on its Investment Portfolio to Greenlight Re as Greenlight Re may reasonably determine.

Greenlight Re will require the Investment Advisor to re-evaluate each position in its Investment Portfolio, monitor changes in intrinsic value and trading value, and provide monthly reports on its Investment Portfolio to Greenlight Re as Greenlight Re may reasonably determine.

No new investments to increase net long exposure shall be made when Greenlight Re’s pro-rata share of Assets (excluding cash equivalents) exceed its Investment Portfolio.

3 unchanged sentences

Such authority is limited such that no more than 10% of gross exposure may be excluded from leverage calculations and may be netted from the primary investment for concentration limits.

Link to Table of Contents

The investment guidelines for GRIL are identical to Greenlight Re’s except for (a) currency hedging guidelines, which do not apply to GRIL, and (b) Concentration of Investments and Credit default swaps, which for GRIL are as follows:

● Concentration of Investments:

Other than cash, cash equivalents and United States government obligations, (1) no single investment in its Investment Portfolio will constitute more than 7.5% of GRIL Surplus, (2) the ten largest investments shall not constitute greater than 40% of GRIL Surplus, and (3) its Investment Portfolio shall at all times be composed of a minimum of 50 debt or equity securities of publicly traded companies (or their subsidiaries).

Other than cash, cash equivalents, and United States government obligations, (1) no single investment in its Investment Portfolio will constitute more than 7.5% of GRIL Surplus (as defined in the SILP LPA), (2) the ten largest investments shall not constitute greater than 40% of GRIL Surplus, and (3) its Investment Portfolio shall at all times be composed of a minimum of 50 debt or equity securities of publicly traded companies (or their subsidiaries).

● Credit default swaps:

The sale of credit default swaps is prohibited.

At December 31, 2021, taking into account a waiver provided by the Board of Directors of Greenlight Re, relating to SILP’s concentration in a single investment, DME Advisors was in compliance with each of Greenlight Re’s and GRIL’s investment guidelines.

See “Risk Factors – SILP may be concentrated in a few large positions, which could result in investment volatility and large losses.”

Investment Results

3 unchanged sentences

Private investments and unlisted equities 47,049 20.4 21,793 11.1

Investment accounted for under the equity method 6,545 3.3 5,703 2.2

Derivative financial instruments (not designated as hedging instruments) 335 0.1 1,080 0.6

Investment accounted for under the equity method — — 6,545 3.3

Total investments $ 230,975 100.0 % $ 196,153 100.0 %

DME Advisors reports the composition of SILP’s portfolio on a delta adjusted basis, which it believes is the appropriate manner in which to assess the exposure and profile of investments and is the way in which it manages the portfolio.

DME Advisors reports the composition of SILP’s portfolio on a delta-adjusted basis, which it believes is the appropriate manner to assess the exposure and profile of investments and reflects how it manages the portfolio.

An option’s delta is the option price’s sensitivity to the underlying stock (or commodity) price.

The delta adjusted basis is the number of shares or contracts underlying the option multiplied by the delta and the underlying stock (or commodity) price.

This exposure analysis does not include cash (U.S.

dollar and foreign currencies), gold and other commodities, credit default swaps, sovereign debt, foreign currency derivatives, interest rate options, and other macro positions.

Under this methodology, the total return swap’s exposure is reported at its full notional amount.

Options are reported at their delta adjusted basis.

Link to Table of Contents

The following table represents the composition of SILP’s investments as of December 31, 2020, and December 31, 2019:

The following table represents the composition of SILP’s investments at December 31, 2021, and December 31, 2020:

Long % Short % Long % Short %

Debt instruments 1.1 % — % 0.1 % — %

Equities & related derivatives 40.4 21.2 25.7 (7.9)

Equities and related derivatives 79.1 45.0 40.4 21.2

Private and unlisted equity securities 4.0 — 2.4 —

Total 84.2 % 45.0 % 42.9 % 21.2 %

As of December 31, 2020, SILP’s exposure to gold on a delta adjusted basis was 3.7% (2019:

The following table represents the composition of SILP by industry sector, as of December 31, 2020:

1 Effective January 1, 2021, the Investment Portfolio, and the corresponding exposure, is calculated on the basis of 50% of GLRE Surplus.

2 Prior to January 1, 2021, the Investment Portfolio and the corresponding exposure, was calculated on the basis of several factors, including the Companies’ shares of Solasglas’s net asset value, collateral posted by the Companies, and the Companies’ net reserves.

The above exposure analysis does not include cash (U.S.

dollar and foreign currencies), gold and other commodities, credit default swaps, sovereign debt, foreign currency derivatives, interest rate options, and other macro positions.

Under this methodology, a total return swap’s exposure is reported at its full notional amount.

Options are reported at their delta-adjusted basis.

At December 31, 2021, SILP’s exposure to gold on a delta-adjusted basis was 8.1% (2020:

Link to Table of Contents

The following table represents the composition of SILP by industry sector at December 31, 2021:

Sector Long % Short % Net %

12 unchanged sentences

Total 84.2 % (45.0) % 39.2 %

The following table represents the composition of our investments in SILP, by the market capitalization of the underlying security, as of December 31, 2020:

The following table represents the composition of our investments in SILP, by the market capitalization of the underlying security, at December 31, 2021:

Capitalization Long % Short % Net %

6 unchanged sentences

Total 84.2 % (45.0) % 39.2 %

Link to Table of Contents

Investment Returns

9 unchanged sentences

Past performance is not necessarily indicative of future results.

The monthly investment return is calculated by dividing the investment income/loss (net of fees and expenses) by the Investment Portfolio.

Effective January 1, 2021, the Investment Portfolio is calculated on the basis of 50% of GLRE Surplus, or the shareholders’ equity of Greenlight Capital Re, Ltd., as reported in Greenlight Capital Re, Ltd.’s then most recent quarterly U.S.

GAAP financial statements.

It is adjusted monthly for the Companies’ net profits and net losses as reported by Solasglas during any intervening period.

Prior to January 1, 2021, the Investment Portfolio was calculated on the basis of several factors, including the Companies’ shares of Solasglas’s net asset value, collateral posted by the Companies, and the Companies’ net reserves.

Link to Table of Contents

Internal Risk Management

6 unchanged sentences

Information Technology

We house most of our information technology infrastructure primarily at an off-site, secure data center in Grand Cayman, Cayman Islands.

We are increasing our use of cloud-based services as these services’ security and reliability improve.

We have most of our information technology infrastructure primarily at an off-site, secure data center hosted by Microsoft.

We have increased our use of cloud-based services as the security and reliability have proven cost effective and provide the high levels of service and redundancy required.

We have implemented backup procedures to ensure we save key data daily and we can restore it promptly as needed.

We have a disaster recovery plan for our information technology infrastructure that includes data and systems replication between our Cayman Islands office and Dublin office and other off-site locations.

We believe we can access our core systems with insignificant outages and restore our secondary systems if our primary systems are unavailable due to a disaster or otherwise.

We have a disaster recovery plan for our information technology infrastructure that includes data and system snapshots with restore points.

We believe we can access our core systems with minor outages and restore our primary systems within our MTTR (mean time to restore).

We protect our information systems with physical, electronic, and software safeguards considered appropriate by our management.

We employ a specialist vendor to monitor our systems for security events and risks from within our network.

We employ a specialist vendor to monitor our systems for security events and risks within our network.

We regularly provide security risk awareness education and training to our staff.

3 unchanged sentences

Human Capital

As of March 5, 2021, we had 35 full-time employees, 26 of whom were based in Grand Cayman, Cayman Islands, eight in Dublin, Ireland and one in London, United Kingdom.

At March 4, 2022, we had 44 full-time employees, 29 of whom were based in Grand Cayman, Cayman Islands, eleven in Dublin, Ireland, and four in London, United Kingdom.

We believe that our employee relations are good.

3 unchanged sentences

We have implemented an employee training and development policy to encourage our employees to take advantage of training and development opportunities.

Link to Table of Contents

Our performance-driven compensation policy is designed to attract and retain talent.

We use short-term compensation composed of base salary and annual cash bonuses and long-term compensation composed of deferred bonuses and stock options, restricted share units, and/or restricted shares, as applicable, in an effort to align our employees’ and executive officers’ interests with those of our shareholders.

In addition, from time to time and under certain circumstances, we award sign-on bonuses, retention bonuses and other bonuses and/or bonus opportunities.

We also offer welfare benefits and other perquisites including defined contribution pension plan, medical insurance coverage, and tax preparation for our employees.

We have designed our performance-driven compensation policy to attract and retain talent.

We use short-term compensation composed of base salary and annual cash bonuses and long-term compensation composed of stock options, restricted share units, and restricted shares, as applicable, to align our employees’ and executive officers’ interests with those of our shareholders.

In addition, from time to time and under certain circumstances, we award sign-on bonuses, retention bonuses, and other bonuses opportunities.

We also offer welfare benefits and other perquisites, including a defined contribution pension plan, and medical insurance coverage for our employees.

As part of our commitment to supporting our employees, we match any contributions made by our employees to charities and not-for-profit organizations.

We believe our employees are fairly compensated, without regard to gender, race, and ethnicity.

We believe in creating and maintaining a workplace that is free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression, or any other status protected by applicable law.

Each of our employees annually acknowledges complying with our Code of Business Conduct and Ethics which also provides employees with access to an anonymous whistleblower hotline to report any violations.

Each of our employees annually acknowledges complying with our Code of Business Conduct and Ethics, which provides employees with access to an anonymous whistleblower hotline to report any violations.

Our Code of Business Conduct and Ethics is available on our website.

Link to Table of Contents

Additional Information

5 unchanged sentences

other medical expenses.

Acquisition costs Ceding commission, profit commissions, brokerage fees, premium taxes and other direct expenses relating directly to premium production.

Acquisition costs Ceding commissions, profit commissions, brokerage fees, premium taxes, and other direct expenses relating directly to premium production.

Acquisition cost ratio The acquisition cost ratio is calculated by dividing net acquisition costs by net premiums earned.

9 unchanged sentences

There tends to be a greater delay in the reporting and settlement of casualty reinsurance claims due to the long-tail nature of the underlying casualty risks and their greater potential for litigation.

Link to Table of Contents

Catastrophe A severe loss, typically involving multiple claimants.

Common perils include earthquakes, hurricanes, tsunamis, hailstorms, tornados, derechos, severe winter weather, floods, fires, explosions, volcanic eruptions, and other natural or human-made disasters.

Catastrophe losses may also arise from acts of war, acts of terrorism and political instability.

Catastrophe losses may also arise from acts of war, acts of terrorism, and geopolitical instability.

cedent When a party reinsures its liability to another party, it ‘‘cedes’’ business to the reinsurer and is referred to as the ‘‘client.’’

3 unchanged sentences

Combined ratio The combined ratio is the sum of the loss ratio, acquisition cost ratio, and underwriting expense ratio.

Composite ratio The composite ratio is the ratio of underwriting losses incurred, loss adjustment expenses.

and acquisition costs, excluding underwriting-related general and administrative expenses, to net premiums earned, or equivalently, the sum of the loss ratio and acquisition cost ratio.

Composite ratio The composite ratio is the ratio of underwriting losses incurred, loss adjustment expenses, and acquisition costs, excluding underwriting-related general and administrative expenses, to net premiums earned, or equivalently, the sum of the loss ratio and acquisition cost ratio.

Corporate expenses Corporate expenses include those costs associated with operating as a publicly listed entity and an allocation of other general and administrative expenses.

1 unchanged sentence

Excess of loss reinsurance Reinsurance that indemnifies the reinsured against all or a specified portion of losses above a specified dollar or percentage loss ratio amount.

Link to Table of Contents

Financial strength rating The opinion of rating agencies regarding an insurance or reinsurance company’s financial ability to meet its financial obligations under its policies.

Funds at Lloyd’s Funds of an approved form that are lodged and held in trust at Lloyd's as security for a member’s underwriting activities.

They comprise the members deposit, personal reserve fund and special reserve fund and may be drawn down in the event that the member’s syndicate level premium trust funds are insufficient to cover its liabilities.

They comprise the member’s deposit, personal reserve fund, and special reserve fund.

They may be drawn down if the member’s syndicate-level premium trust funds are insufficient to cover its liabilities.

The amount of the deposit is related to the member's premium income limit and also the nature of the underwriting account.

6 unchanged sentences

(b) the underwriting room in the Lloyd’s Building in which managing agents underwrite insurance and reinsurance on behalf of their syndicate members.

In this sense Lloyd’s should be understood as a market place;

In this sense, Lloyd’s should be understood as a marketplace;

or (c) the Corporation of Lloyd’s, which regulates and provides support services to the Lloyd’s market.

6 unchanged sentences

Net financial impact The net impact of prior period loss development after taking into account net losses and loss expenses incurred, earned reinstatement premiums assumed and ceded, and adjustments to assumed and ceded acquisition costs and profit commissions.

Link to Table of Contents

Net premiums written An insurer’s gross premiums written, less premiums ceded to reinsurers.

10 unchanged sentences

or loss occurs.

Link to Table of Contents

Property catastrophe reinsurance Property catastrophe reinsurance contracts are typically ‘‘all risk’’ in nature, meaning that they protect against losses from natural and human-made catastrophes.

5 unchanged sentences

Quota-share reinsurance A form of proportional reinsurance in which the reinsurer assumes an agreed percentage of each underlying insurance contract being reinsured.

Reinstatement premium A Premium charged for the reinstatement of the amount of reinsurance coverage to its full amount reduced as a result of a reinsurance loss payment.

Reinstatement premium A Premium charged for the reinstatement of the amount of reinsurance coverage to its full amount otherwise reduced as a result of a reinsurance loss payment.

Reinsurance An arrangement in which a reinsurer agrees to indemnify an insurance company, the client, against all or a portion of the insurance risks underwritten by the client under one or more policies.

Reinsurance can provide a client with several benefits, including reducting net liability on individual risks and catastrophe protection from large or multiple losses.

Reinsurance can provide a client with several benefits, including reducing net liability on individual risks and catastrophe protection from large or multiple losses.

Reinsurance also provides a client with additional underwriting capacity by permitting it to accept larger risks and write more business than would be possible without a related increase in capital and surplus, and facilitates the maintenance of acceptable financial ratios by the client.

8 unchanged sentences

Severity business Insurance/reinsurance characterized by contracts containing the potential for significant losses emanating from one event.

Surety and fidelity insurance Surety and fidelity includes (1) insurance guaranteeing the fidelity of persons holding positions of public or private trust;

Surety and fidelity insurance Surety and fidelity insurance includes (1) insurance guaranteeing the fidelity of persons holding positions of public or private trust;

(2) insurance guaranteeing the performance of contracts, other than insurance policies, and guaranteeing and executing bonds, undertakings, and contracts of suretyship;

and (3) insurance indemnifying banks, bankers, brokers, financial or moneyed corporations or associations against loss.

Link to Table of Contents

Underwriter An employee of an insurance or reinsurance company who examines, accepts, or rejects risks and classifies risks to charge an appropriate premium for each accepted risk.

3 unchanged sentences

Therefore, the underwriting expense ratio is the ratio of underwriting expenses to net premiums earned.

The underwriting expense ratio also incorporates gains and losses resulting from deposit accounted contracts.

The underwriting expense ratio also incorporates interest income and expenses from deposit-accounted contracts.

Workers’ compensation insurance Workers’ compensation insurance provides medical, disability, and lost-wage benefits to employees for injuries and illness sustained in the course of their employment.

1 unchanged sentence

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.

What changed 10-K

Item 1. Business