7 unchanged sentences
• political risk.
+Added: Return to table of contents
Equity Price Risk
−Removed: At March 31, 2022, our investments consisted primarily of an investment in SILP.
+Added: At June 30, 2022, 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, 2022, a 10% decline in the price of each of the underlying listed equity securities and equity-based derivative instruments would result in a $4.8 million loss to our Investment Portfolio.
+Added: At June 30, 2022, a 10% decline in the price of each of the underlying listed equity securities and equity-based derivative instruments would result in a $3.4 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, 2022, SILP’s investments incorporate unhedged exposure to changes in gold, silver, and crude oil prices.
−Removed: Return to table of contents
−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, 2022.
+Added: At June 30, 2022, SILP’s investments incorporate unhedged exposure to changes in gold, silver, uranium 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, 2022.
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 0.3 (0.3)
+Added: Uranium 0.1 (0.1)
Crude oil — (0.1)
4 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, 2022, our exposure to GBP denominated net reinsurance asset balance was £11.3 million.
−Removed: At March 31, 2022, a 10% decrease in the U.S.
+Added: Certain cedents report to us in foreign currencies even though some or all of the underlying exposure is denominated in U.S.
+Added: Our condensed consolidated statements of operations may report a foreign exchange gain or loss associated with this exposure when reported by the cedents.
+Added: However, as we monitor our foreign currency denominated assets and liabilities on an “underlying exposure” basis, exposure to underlying U.S.
+Added: dollar balances does not represent a material foreign currency risk.
+Added: At June 30, 2022, our underlying exposure to GBP denominated net reinsurance asset balance was £14.0 million.
+Added: At June 30, 2022, a 10% decrease in the U.S.
dollar against the GBP (all else constant) would result in an estimated $1.7 million foreign exchange gain.
Alternatively, a 10% increase in the U.S dollar against the GBP would result in an estimated $1.7 million foreign exchange loss.
−Removed: Similarly, at March 31, 2022, our net exposure to Euro-denominated reinsurance liability balances was €5.0 million.
−Removed: At March 31, 2022, a 10% decrease in the U.S.
+Added: Similarly, at June 30, 2022, our net underlying exposure to Euro-denominated reinsurance liability balances was €5.8 million.
+Added: At June 30, 2022, a 10% decrease in the U.S.
dollar against the Euro (all else constant) would result in an estimated $0.6 million foreign exchange loss.
Alternatively, a 10% increase in the U.S dollar against the Euro would result in an estimated $0.6 million foreign exchange gain.
+Added: Return to table of contents
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, 2022, most of our currency exposures resulting from foreign denominated securities (longs and shorts) were reduced by offsetting cash balances denominated in the corresponding foreign currencies.
−Removed: At March 31, 2022, a 10% increase or decrease in the value of the U.S.
+Added: At June 30, 2022, most of SILP’s currency exposures resulting from foreign denominated securities (longs and shorts) were reduced by offsetting cash balances denominated in the corresponding foreign currencies.
+Added: At June 30, 2022, 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.
Interest Rate Risk
−Removed: 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 derivative investments may be sensitive to interest rates, and their value may indirectly fluctuate with changes in interest rates.
−Removed: At March 31, 2022, a 100 basis points increase or decrease in interest rates would have no meaningful impact on the value of our Investment Portfolio.
+Added: The caption “Reinsurance balances receivable” in our condensed consolidated balance sheets incorporates amounts held by cedents, including the Lloyd’s syndicates that we participate on.
+Added: These syndicates invest a portion of the premiums withheld in fixed-income and variable-yield securities, which expose us to interest rate risk.
+Added: At June 30, 2022, a 100 basis points increase or decrease in interest rates would result in an estimated $1.3 million loss or gain, respectively, which would be recorded in our condensed consolidated statements of operations under the captions “Other income (expense).”
+Added: Our investment in SILP includes interest-rate sensitive securities, such as corporate and sovereign debt instruments and interest rate options.
+Added: At June 30, 2022, a 100 basis points increase or decrease in interest rates would result in a $0.2 million loss or a $0.9 million loss, respectively, to 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
−Removed: Return to table of contents
−Removed: 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.
+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.
11 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, 2021.
+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.