What changed in this filing

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Item 1. Financial Statements

2022-11-02 compared with 2022-08-02 · 174 added, 137 removed, 673 unchanged (32% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2022 and December 31, 2021

September 30, 2022 and December 31, 2021

(expressed in thousands of U.S.

dollars, except per share and share amounts)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Investment in related party investment fund $ 195,199 $ 183,591

6 unchanged sentences

Loss and loss adjustment expenses recoverable (net of allowance for expected credit losses of $ 47 and $ 47 )

10,604 11,100

Deferred acquisition costs 78,836 63,026

30 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the three and six months ended June 30, 2022 and 2021

For the three and nine months ended September 30, 2022 and 2021

(expressed in thousands of U.S.

dollars, except per share and share amounts)

Three months ended June 30 Six months ended June 30

Three months ended September 30 Nine months ended September 30

2022 2021 2022 2021

17 unchanged sentences

Net income (loss) $ ( 18,469 ) $ ( 13,853 ) $ ( 9,408 ) $ ( 6,726 )

Earnings (loss) per share

Earnings (loss) per share (Class A and Class B)

Basic $ ( 0.56 ) $ ( 0.42 ) $ ( 0.28 ) $ ( 0.20 )

8 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the six months ended June 30, 2022 and 2021

For the nine months ended September 30, 2022 and 2021

(expressed in thousands of U.S.

Three months ended June 30 Six months ended June 30

Three months ended September 30 Nine months ended September 30

2022 2021 2022 2021

21 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended June 30, 2022 and 2021

For the nine months ended September 30, 2022 and 2021

(expressed in thousands of U.S.

Six months ended June 30

Nine months ended September 30

Cash provided by (used in) operating activities

2 unchanged sentences

Loss (income) from investments in related party investment fund ( 24,474 ) 4,196

Net realized gain on repurchase of convertible senior notes payable ( 149 ) —

Net change in unrealized gains and losses on investments and notes receivable ( 9,237 ) ( 14,860 )

24 unchanged sentences

Financing activities

Repurchases of convertible senior notes payable ( 6,384 ) —

Repurchase of Class A ordinary shares ( 35 ) ( 10,000 )

12 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

September 30, 2022

ORGANIZATION AND BASIS OF PRESENTATION

11 unchanged sentences

In 2020, GLRE established Greenlight Re Marketing (UK) Limited (“Greenlight Re UK”) as a wholly-owned subsidiary to increase the Company’s presence in the London market.

In 2022, Syndicate 3456 commenced underwriting under the Lloyd’s syndicate-in-a-box model, with Greenlight Re as the sole capital provider.

In 2022, Greenlight Innovation Syndicate 3456 (“Syndicate 3456”) commenced underwriting under the Lloyd’s syndicate-in-a-box model, with Greenlight Re as the sole capital provider.

As used herein, the “Company” refers collectively to GLRE and its consolidated subsidiaries.

8 unchanged sentences

The condensed consolidated financial statements include the accounts of GLRE and its wholly-owned subsidiaries, Greenlight Re, GRIL, Verdant, and Greenlight Re UK.

The condensed consolidated financial statements also include the accounts of Syndicate 3456.

All significant intercompany transactions and balances have been eliminated on consolidation.

9 unchanged sentences

Actual results could differ from these estimates.

The significant estimates reflected in the Company’s condensed consolidated financial statements include, but are not limited to, loss and loss adjustment expense reserves,

The significant estimates reflected in the Company’s

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premiums written, earned, and receivable, variability underlying risk transfer assessments, allowances for credit losses, share-based compensation, valuation allowances associated with deferred tax assets and investment impairments.

condensed consolidated financial statements include, but are not limited to, loss and loss adjustment expense reserves, premiums written, earned, and receivable, variability underlying risk transfer assessments, allowances for credit losses, share-based compensation, valuation allowances associated with deferred tax assets and investment impairments.

Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents

3 unchanged sentences

The following table reconciles the cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total presented in the condensed consolidated statements of cash flows:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

($ in thousands)

4 unchanged sentences

The caption “Reinsurance balances receivable” in the Company’s condensed consolidated balance sheets includes financial assets held by cedents.

At June 30, 2022, funds held by cedents were $ 282.1 million (December 31, 2021:

At September 30, 2022, funds held by cedents were $ 303.1 million (December 31, 2021:

$ 246.9 million).

13 unchanged sentences

The Company regularly evaluates its net credit exposure to assess the ability of cedents and retrocessionaires to honor their respective obligations.

At June 30, 2022, the Company has recorded an allowance for expected credit loss on its Reinsurance Assets of $ 0.1 million (December 31, 2021:

At September 30, 2022, the Company has recorded an allowance for expected credit loss on its Reinsurance Assets of $ 0.1 million (December 31, 2021:

$ 0.1 million).

5 unchanged sentences

The Company records deposit assets and liabilities in its condensed consolidated balance sheets in the caption “Reinsurance balances receivable” and “Reinsurance balances payable,” respectively.

At June 30, 2022, deposit assets and deposit liabilities were $ 3.1 million and $ 14.3 million, respectively (December 31, 2021:

At September 30, 2022, deposit assets and deposit liabilities were $ 3.2 million and $ 13.7 million, respectively (December 31, 2021:

$ 3.5 million and $ 18.6 million, respectively).

For the three and six months ended June 30, 2022, and 2021, the interest income and expense on deposit accounted contracts were as follows:

Three months ended June 30 Six months ended June 30

For the three and nine months ended September 30, 2022, and 2021, the interest income and expense on deposit accounted contracts were as follows:

Three months ended September 30 Nine months ended September 30

2022 2021 2022 2021

7 unchanged sentences

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.

Non-monetary assets and liabilities denominated in foreign currencies are carried at their historical exchange rates.

The Company includes any foreign exchange gains and losses under the caption “Other income (expense), net” in the Company’s condensed consolidated statements of operations.

For the three and six months ended June 30, 2022, $ 4.3 million and $ 5.4 million, respectively, (three and six months ended June 30, 2021:

For the three and nine months ended September 30, 2022, $ 5.0 million and $ 10.4 million, respectively, (three and nine months ended September 30, 2021:

$ 0.6 million and $ 1.4 million, respectively), of foreign exchange loss was included in the Company’s net income (loss) in the condensed consolidated statements of operations.

5 unchanged sentences

The Company does not offset these balances against collateral pledged or received.

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The caption “Other assets” in the Company’s condensed consolidated balance sheets consists primarily of prepaid expenses, fixed assets, right-of-use lease assets, other receivables, taxes recoverable, and deferred tax assets.

4 unchanged sentences

These awards are considered “participating securities” for the purposes of calculating earnings (loss) per share.

Basic earnings per share is calculated on the basis of the weighted average number of

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ordinary shares and participating securities outstanding during the period.

Diluted earnings (or loss) per share includes the dilutive effect of the following:

Basic earnings per share is calculated on the basis of the weighted average number of ordinary shares and participating securities outstanding during the period.

Diluted earnings (or loss) per share includes the dilutive effect, if any, of the following:

• Restricted Stock Units (“RSUs”) issued that convert to ordinary shares upon vesting;

• Unvested restricted stock awards which are not considered “participating securities”;

• Unvested restricted share awards which are not considered “participating securities”;

• Additional potential ordinary shares issuable when in-the-money stock options are exercised, determined using the treasury stock method;

• For periods prior to January 1, 2022, those ordinary shares with the potential to be issued in connection with convertible notes and other such convertible instruments, determined using the treasury stock method;

• Effective January 1, 2022, the maximum number of additional ordinary shares required to settle the convertible notes, as required under the if-converted method.

• Effective January 1, 2022, the dilutive effect of the convertible notes is calculated using the if-converted method.

Under the if-converted method, the convertible notes are assumed to be converted at the beginning of the period, and the resulting common shares are included in the denominator of the diluted net income per common share calculation.

Interest expense related to the convertible notes incurred in the period is added back to the numerator for purposes of the if-converted calculation.

For the three and nine months ended September 30, 2022, the effect of the assumed conversion of the convertible notes was anti-dilutive and was not included in the computation of diluted earnings per share.

Diluted earnings (or loss) per share contemplates a conversion to ordinary shares of all convertible instruments only if they are dilutive.

In the event of a net loss, all RSUs, stock options, shares potentially issuable in connection with convertible notes, and participating securities are excluded from the calculation of both basic and diluted loss per share as their inclusion would be anti-dilutive.

The table below presents the shares outstanding for the calculation of earnings per share for the three and six months ended June 30, 2022 and 2021:

Three months ended June 30 Six months ended June 30

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The following table reconciles net income (loss) and weighted average shares used in computing basic and diluted net income (loss) per share for the three and nine months ended September 30, 2022 and 2021 (expressed in thousands of U.S.

dollars, except per share and share amounts):

Three months ended September 30 Nine months ended September 30

2022 2021 2022 2021

Numerator for earnings per share

Net income (loss) - basic $ ( 18,469 ) $ ( 13,853 ) $ ( 9,408 ) $ ( 6,726 )

interest on convertible notes — — — —

Net income (loss) - diluted $ ( 18,469 ) $ ( 13,853 ) $ ( 9,408 ) $ ( 6,726 )

Denominator for earnings per share

Weighted average shares outstanding - basic 33,127,384 32,929,097 33,119,814 33,507,060

3 unchanged sentences

Anti-dilutive stock options outstanding 690,337 735,627 690,337 735,627

Participating securities excluded from calculation of loss per share 848,841 946,556 848,841 946,556

Shares potentially issuable in connection with convertible notes excluded from calculation of diluted loss per share 5,686,747 — 5,773,889 —

Earnings (loss) per Class A and Class B Ordinary share:

Basic $ ( 0.56 ) $ ( 0.42 ) $ ( 0.28 ) $ ( 0.20 )

Diluted $ ( 0.56 ) $ ( 0.42 ) $ ( 0.28 ) $ ( 0.20 )

Under current Cayman Islands law, no corporate entity, including GLRE and Greenlight Re, is obligated to pay taxes in the Cayman Islands on either income or capital gains.

31 unchanged sentences

The adoption of ASU 2020-06 resulted in a decrease in the Company’s opening shareholders’ equity of approximately $ 2.5 million, with a corresponding increase in the carrying value of the senior convertible notes (see Note 7).

For the periods in which the Company reports a net income, an additional 5.8 million ordinary shares are included in the number of shares outstanding for the diluted earnings per share calculation under the if-converted method, without regard to the conversion price of such convertible notes.

The adoption of ASU 2020-06 did not have a material impact on the Company’s net income, cash flows, or any other balances.

3 unchanged sentences

LP (“DME Advisors”) pursuant to which DME Advisors is the investment manager for SILP.

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.

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 (the “Chairman”).

The SILP LPA includes the following proviso:

10 unchanged sentences

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.

At June 30, 2022, the net asset value of the GLRE Limited Partners’ investment in SILP was $ 189.3 million (December 31, 2021:

At September 30, 2022, the net asset value of the GLRE Limited Partners’ investment in SILP was $ 195.2 million (December 31, 2021:

$ 183.6 million), representing 75.3 % (December 31, 2021:

4 unchanged sentences

The GLRE Limited Partners can redeem their assets from SILP for operational purposes by providing three business days’ notice to DME II.

At June 30, 2022, the majority of SILP’s long investments were composed of cash and publicly traded equity securities, which could be readily liquidated to meet the GLRE Limited Partners’ redemption requests.

The Company’s share of the change in the net asset value of SILP for the three and six months ended June 30, 2022, was $ 11.9 million and $ 16.0 million, respectively (three and six months ended June 30, 2021:

At September 30, 2022, the majority of SILP’s long investments were composed of cash and publicly traded equity securities, which could be readily liquidated to meet the GLRE Limited Partners’ redemption requests.

The Company’s share of the change in the net asset value of SILP for the three and nine months ended September 30, 2022, was $ 8.5 million and $ 24.5 million, respectively (three and nine months ended September 30, 2021:

$( 6.2 ) million and $( 4.2 ) million, respectively), and shown in the caption “Income (loss) from investment in related party investment fund” in the Company’s condensed consolidated statements of operations.

2 unchanged sentences

Summarized Statement of Assets and Liabilities of Solasglas Investments, LP

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

($ in thousands)

2 unchanged sentences

Due from brokers 149,071 84,775

Cash and cash equivalents 8,689 —

Interest and dividends receivable 64 28

12 unchanged sentences

Summarized Statement of Operations of Solasglas Investments, LP

Three months ended June 30 Six months ended June 30

Three months ended September 30 Nine months ended September 30

2022 2021 2022 2021

18 unchanged sentences

(1) Net income (loss) is net of management fees and performance allocation presented below:

Three months ended June 30 Six months ended June 30

Three months ended September 30 Nine months ended September 30

2022 2021 2022 2021

7 unchanged sentences

The Company’s “Other investments” are composed of the following:

• Private investments and unlisted equities, which consist primarily of Innovations-related investments supporting technology innovators in the (re)insurance market;

• Private investments, unlisted equities, and convertible debt instruments, which consist primarily of Innovations-related investments supporting technology innovators in the (re)insurance market;

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• Certificates of deposit with original maturities greater than three months.

At June 30, 2022, the Company included the following securities in the caption “Other investments”:

At September 30, 2022, the Company included the following securities in the caption “Other investments”:

Cost Unrealized

3 unchanged sentences

Private investments and unlisted equities $ 22,037 $ 42,412 $ ( 3,368 ) $ 61,081

Convertible debt securities 1,000 — — 1,000

Certificates of deposit 3,000 — — 3,000

16 unchanged sentences

Once the Company records such an adjustment, the investment is considered an “asset measured at fair value on a nonrecurring basis.”

The following table presents the carrying values of the private investments and unlisted equity securities carried under the measurement alternative at June 30, 2022, and 2021, and the related adjustments recorded during the periods then ended.

Six months ended June 30

The following table presents the carrying values of the private investments and unlisted equity securities carried under the measurement alternative at September 30, 2022, and 2021, and the related adjustments recorded during the periods then ended.

Nine months ended September 30

($ in thousands)

6 unchanged sentences

(1) The period-end carrying values reflect cumulative purchases and sales in addition to upward and downward carrying value changes.

(2) The cumulative upward carrying value changes from inception to June 30, 2022, totaled $ 42.8 million.

(3) The cumulative downward carrying value changes and impairments from inception to June 30, 2022, totaled $ 3.7 million.

(2) The cumulative upward carrying value changes from inception to September 30, 2022, totaled $ 42.8 million.

(3) The cumulative downward carrying value changes and impairments from inception to September 30, 2022, totaled $ 3.7 million.

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11 unchanged sentences

Assets measured at fair value on a nonrecurring basis

At June 30, 2022, and December 31, 2021, the Company held $ 52.9 million and $ 40.5 million, respectively, of private investments and unlisted equities measured at fair value on a nonrecurring basis.

At September 30, 2022, and December 31, 2021, the Company held $ 53.0 million and $ 40.5 million, respectively, of private investments and unlisted equities measured at fair value on a nonrecurring basis.

The Company classifies these assets as Level 3 within the fair value hierarchy.

The following table summarizes the periods between the most recent fair value measurement dates and June 30, 2022, for the private and unlisted equities measured at fair value on a nonrecurring basis:

The following table summarizes the periods between the most recent fair value measurement dates and September 30, 2022, for the private and unlisted equities measured at fair value on a nonrecurring basis:

Less than 6 months 6 to 12 months Over 1 year Total

1 unchanged sentence

Fair values measured on a nonrecurring basis $ 24,451 $ 17,080 $ 11,423 $ 52,954

At June 30, 2022, and December 31, 2021, the Company held $ 7.0 million and $ 6.6 million, respectively, of private investments and unlisted equities measured at cost.

At September 30, 2022, and December 31, 2021, the Company held $ 8.1 million and $ 6.5 million, respectively, of private investments and unlisted equities measured at cost.

Assets measured at fair value on a recurring basis

In accordance with ASC 320, “Investments - Debt Securities,” the Company has classified the convertible debt securities as “trading” measured at estimated fair value with unrealized gains and losses reported in net income.

The Company classifies these securities as Level 3 within the fair value hierarchy and estimates their fair values primarily based on inputs such as third-party quotes, issuers’ book value, market multiples, and other inputs.

Valuation of these securities is subjective as the markets’ illiquidity may increase the likelihood that the estimated fair value of an investment is not reflective of the price at which an actual transaction could occur.

The carrying value of certificates of deposit with original maturities of one year or less approximates their fair values.

The Company classifies these assets as Level 2 within the fair value hierarchy.

At June 30, 2022, and December 31, 2021, the Company did not carry any other investments at fair value with an assigned Level within the fair value hierarchy.

At September 30, 2022, and December 31, 2021, the Company did not carry any other investments at fair value with an assigned Level within the fair value hierarchy.

The Company’s investment in the related party investment fund is measured at fair value using the net asset value practical expedient.

1 unchanged sentence

(See Note 3 for further details on the related party investment fund.)

During the three and nine months ended September 30, 2022 and 2021, there were no transfers between Level 2 and Level 3 of the fair value hierarchy.

Financial Instruments Disclosed, But Not Carried, at Fair Value

1 unchanged sentence

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 7).

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LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES

At June 30, 2022, the Company’s loss and loss adjustment expense reserves included estimated amounts for several catastrophe events.

At September 30, 2022, the Company’s loss and loss adjustment expense reserves included estimated amounts for several catastrophe events.

For significant catastrophe events, including, but not limited to, hurricanes, tornados, typhoons, floods, earthquakes, wildfires, and pandemics, loss reserves are generally established based on loss payments and case reserves reported by clients when received.

4 unchanged sentences

• industry data;

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• catastrophe scenario modeling software;

• management’s judgment.

At June 30, 2022, the Company’s loss and loss adjustment expense reserves included $ 13.6 million from the Russian-Ukrainian conflict.

At September 30, 2022, the Company’s loss and loss adjustment expense reserves included $ 13.6 million from the Russian-Ukrainian conflict and $ 19.5 million from Hurricane Ian.

Additional information the Company considered in estimating its loss reserves included the following:

15 unchanged sentences

Additionally, if the Russian-Ukrainian conflict is prolonged, the Company may incur additional losses in subsequent periods.

The Company made no significant changes in the actuarial methodology or reserving process related to its loss and loss adjustment expense reserves for the six months ended June 30, 2022.

At June 30, 2022 and December 31, 2021, loss and loss adjustment expense reserves were composed of the following:

June 30, 2022 December 31, 2021

The Company made no significant changes in the actuarial methodology or reserving process related to its loss and loss adjustment expense reserves for the nine months ended September 30, 2022.

At September 30, 2022 and December 31, 2021, loss and loss adjustment expense reserves were composed of the following:

September 30, 2022 December 31, 2021

($ in thousands)

3 unchanged sentences

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A summary of changes in outstanding loss and loss adjustment expense reserves for all lines of business consolidated for the six months ended June 30, 2022 and 2021 is as follows:

A summary of changes in outstanding loss and loss adjustment expense reserves for all lines of business consolidated for the nine months ended September 30, 2022 and 2021 is as follows:

Consolidated 2022 2021

12 unchanged sentences

Foreign currency revaluation ( 20,516 ) ( 1,722 )

Net balance at June 30 517,019 500,310

Net balance at September 30 530,223 527,697

Losses recoverable 10,604 13,082

Gross balance at June 30 $ 526,445 $ 514,642

For the six months ended June 30, 2022, the estimate of net losses incurred relating to prior accident years decreased by $ 0.6 million, primarily due to favorable development on mortgage contracts.

This favorable development was partially offset by adverse development on motor and health business driven by the inflationary increase in claims costs and additional losses from the COVID-19 pandemic.

For the six months ended June 30, 2021, the estimate of net losses incurred relating to prior accident years decreased by $ 0.6 million due primarily to favorable development on certain catastrophe, mortgage, and health contracts.

The decrease was partially offset by adverse loss development on certain casualty contracts written between 2014 and 2018.

The changes in the outstanding loss and loss adjustment expense reserves for health claims for the six months ended June 30, 2022 and 2021 are as follows:

Gross balance at September 30 $ 540,827 $ 540,779

For the nine months ended September 30, 2022, the estimate of net losses incurred relating to prior accident years increased by $ 1.6 million, primarily due to the following:

• adverse development on motor and health business driven by the inflationary increase in claims costs;

• adverse development on a multi-line quota share program resulting from newly reported losses received from the cedent;

• newly reported claims received relating to excess of loss marine and energy contracts;

• claims deterioration on a cyber contract.

The adverse developments were partially offset by favorable developments relating to prior accident years primarily due to the following:

• favorable experience on mortgage business;

• loss reserves released relating to catastrophe events and COVID-19 based on updated claims reporting received from cedents;

• loss reserves released on an excess of loss workers’ compensation contract.

For the nine months ended September 30, 2021, the estimate of net losses incurred relating to prior accident years decreased by $ 1.3 million due primarily to favorable development on catastrophe events, a mortgage contract associated with the COVID-19 pandemic, and certain health contracts.

The decrease in prior accident years was partially offset by adverse loss development on certain workers’ compensation and multi-line casualty contracts written between 2014 and 2018.

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The changes in the outstanding loss and loss adjustment expense reserves for health claims for the nine months ended September 30, 2022 and 2021 are as follows:

Health 2022 2021

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Foreign currency revaluation — —

Net balance at June 30 7,202 14,584

Net balance at September 30 5,860 12,728

Losses recoverable — —

Gross balance at June 30 $ 7,202 $ 14,584

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Gross balance at September 30 $ 5,860 $ 12,728

From time to time, the Company purchases retrocessional coverage for one or more of the following reasons:

1 unchanged sentence

The Company records loss and loss adjustment expenses recoverable from retrocessionaires as assets.

For the three and six months ended June 30, 2022, the Company’s earned ceded premiums were $ 2.7 million and $ 3.9 million, respectively (insignificant for the three and six months ended June 30, 2021).

For the three and six months ended June 30, 2022, loss and loss adjustment expenses recovered and changes in losses recoverable were $ 0.7 million and nil, respectively.

The recoveries recognized by the Company for the three and six months ended June 30, 2021, were $ 0.1 million and $ 0.1 million, respectively.

For the three and nine months ended September 30, 2022, the Company’s earned ceded premiums were $ 4.4 million and $ 8.4 million, respectively (insignificant for the three and nine months ended September 30, 2021).

For the three and nine months ended September 30, 2022, loss and loss adjustment expenses recovered and changes in losses recoverable were $ 2.5 million and $ 2.5 million, respectively.

The recoveries recognized by the Company for the three and nine months ended September 30, 2021, were nil and $ 0.1 million, respectively.

Retrocession contracts do not relieve the Company from its obligations to its cedents.

Failure of retrocessionaires to honor their obligations could result in losses to the Company.

At June 30, 2022, the Company’s loss reserves recoverable consisted of (i) $ 7.4 million (December 31, 2021:

At September 30, 2022, the Company’s loss reserves recoverable consisted of (i) $ 7.9 million (December 31, 2021:

$ 8.4 million) recoverable from unrated retrocessionaires, of which $ 6.9 million (December 31, 2021:

2 unchanged sentences

The Company regularly evaluates its net credit exposure to assess the ability of the retrocessionaires to honor their respective obligations.

At June 30, 2022, the Company had recorded an allowance for expected credit losses of $ 47 thousand (December 31, 2021:

At September 30, 2022, the Company had recorded an allowance for expected credit losses of $ 47 thousand (December 31, 2021:

$ 47 thousand).

1 unchanged sentence

On August 7, 2018, the Company issued $ 100.0 million of senior unsecured convertible notes (the “Notes”), which mature on August 1, 2023.

The Notes bear interest at 4.0 %, payable semi-annually on February 1 and August 1 of each year beginning February 1, 2019.

The Notes bear interest at 4.0 %, payable semiannually on February 1 and August 1 of each year beginning February 1, 2019.

Note holders have the option, under certain conditions, to redeem the Notes prior to maturity.

At June 30, 2022, the Company’s share price was lower than the conversion price of $ 17.19 per share.

At September 30, 2022, the Company’s share price was lower than the conversion price of $ 17.19 per share.

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If a holder redeems the Notes, 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.

3 unchanged sentences

The Company incurred issuance costs in connection with the issuance of the Notes.

At June 30, 2022, the unamortized portion of these costs was $ 0.7 million (December 31, 2021:

At September 30, 2022, the unamortized portion of these costs was $ 0.6 million (December 31, 2021:

$ 1.0 million), which the Company expects to amortize through the maturity date.

The carrying value of the Notes at June 30, 2022, including accrued interest of $ 1.7 million, was $ 100.9 million (December 31, 2021:

During the three and nine months ended September 30, 2022 the Company repurchased and canceled $ 6.6 million of the Notes.

The carrying value of the Notes at September 30, 2022, including accrued interest of $ 0.6 million, was $ 93.4 million (December 31, 2021:

$ 98.1 million).

At June 30, 2022, the Company estimated the fair value of the Notes to be $ 94.5 million (December 31, 2021:

At September 30, 2022, the Company estimated the fair value of the Notes to be $ 90.2 million (December 31, 2021:

$ 97.5 million) (see Note 4 Financial Instruments).

For the three and six months ended June 30, 2022, the Company recognized interest expenses of $ 1.2 million and $ 2.3 million, respectively (three and six months ended June 30, 2021:

$ 1.6 million and $ 3.1 million, respectively) in connection with the interest coupon and amortization of issuance costs.

The Company was in compliance with all covenants relating to the Notes at June 30, 2022, and December 31, 2021.

At June 30, 2022, the Company had a remaining obligation for interest and principal payments of $ 2.0 million and $ 104.0 million during 2022 and 2023, respectively.

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For the three and nine months ended September 30, 2022, the Company recognized interest expenses of $ 1.1 million and $ 3.4 million, respectively (three and nine months ended September 30, 2021:

$ 1.6 million and $ 4.7 million, respectively).

The Company was in compliance with all covenants relating to the Notes at September 30, 2022, and December 31, 2021.

At September 30, 2022, the Company had a remaining obligation for interest and principal payments of nil and $ 97.2 million during 2022 and 2023, respectively.

Subsequent to September 30, 2022, the Company repurchased and canceled $ 13.8 million of the Notes.

SHARE CAPITAL

3 unchanged sentences

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.

At June 30, 2022, 2,119,189 (December 31, 2021:

At September 30, 2022, 2,011,426 (December 31, 2021:

3,128,276 ) Class A ordinary shares remained available for future issuance under the Company’s stock incentive plan.

5 unchanged sentences

The repurchase plan may be modified, suspended, or terminated at the election of our Board of Directors at any time without prior notice.

The Company repurchased no Class A ordinary shares during the six months ended June 30, 2022.

The Company repurchased 4,933 Class A ordinary shares during the nine months ended September 30, 2022.

All Class A ordinary shares repurchased are canceled immediately upon repurchase.

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The following table is a summary of ordinary shares issued and outstanding:

Six months ended June 30 Six months ended June 30

Nine months ended September 30 Nine months ended September 30

Class A Class B Class A Class B

9 unchanged sentences

The restricted shares issued to certain employees contain restrictions relating to vesting, forfeiture in the event of termination of employment, transferability, and other matters.

For the six months ended June 30, 2022, the Company issued 849,872 (2021:

For the nine months ended September 30, 2022, the Company issued to non-employee directors an aggregate of 107,763 (2021:

74,769 ) restricted Class A ordinary shares as part of their remuneration for services to the Company.

These restricted shares contain similar restrictions to those issued to employees.

They will vest on the earlier of (i) the first anniversary of the date of the share issuance and (ii) the Company’s next annual general meeting, subject to the grantee’s continued service with the Company.

During the vesting period, non-employee directors holding these restricted shares retain voting rights and are entitled to any dividends declared by the Company.

For the nine months ended September 30, 2022, the Company issued 849,872 (2021:

334,312 ) Class A ordinary shares to employees pursuant to the Company’s stock incentive plan.

3 unchanged sentences

During the vesting period, the holder of the Service RSs and Performance RSs retains voting rights but is entitled to any dividends declared by the Company only upon vesting.

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Prior to fiscal year 2022, the restricted shares granted to employees cliff vested three years after the date of issuance, subject to the grantee’s continued service with the Company.

During the vesting period, the holder of the restricted shares retained voting rights and was entitled to any dividends declared by the Company.

During the vesting period, the holder of the restricted shares retained voting rights and are entitled to any dividends declared by the Company.

Prior to fiscal year 2021, the Company issued Class A ordinary shares to the Chief Executive Officer (“CEO”) pursuant to the Company’s stock incentive plan (“CEO RSs”).

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The CEO RSs cliff vest five years after the date of issuance, subject to the performance condition being met and the CEO’s continued service with the Company.

At June 30, 2022, there were 193,149 non-vested CEO RSs with a weighted average grant date fair value of $ 10.10 per share.

As the performance conditions associated with these restricted shares have not been met, the Company recognized no compensation cost relating to the unvested shares for the six months ended June 30, 2022, and 2021.

At September 30, 2022, there were 193,149 non-vested CEO RSs with a weighted average grant date fair value of $ 10.10 per share.

As the performance conditions associated with these restricted shares have not been met, the Company recognized no compensation cost relating to the unvested shares for the nine months ended September 30, 2022, and 2021.

The Company recognizes compensation expense associated with Performance RSs and Service RSs based on the fair value of the Company's Class A ordinary shares measured at the grant date.

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For Performance RSs, the Company recognizes the associated compensation expense based on achieving established performance criteria during the performance period.

For the six months ended June 30, 2022, grantees forfeited 8,476 (2021:

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For the nine months ended September 30, 2022, grantees forfeited 8,476 (2021:

20,592 ) restricted shares.

For the six months ended June 30, 2022, the Company reversed $ 26 thousand of stock compensation expense (2021:

For the nine months ended September 30, 2022, the Company reversed $ 26 thousand of stock compensation expense (2021:

$ 0.1 million) in relation to the forfeited restricted shares.

The Company recorded $ 1.4 million of share-based compensation expense, net of forfeiture reversals, relating to restricted shares for the six months ended June 30, 2022 (2021:

The Company recorded $ 2.6 million of share-based compensation expense, net of forfeiture reversals, relating to restricted shares for the nine months ended September 30, 2022 (2021:

$ 1.8 million).

At June 30, 2022, there was $ 4.4 million (December 31, 2021:

At September 30, 2022, there was $ 4.4 million (December 31, 2021:

$ 2.7 million) of unrecognized compensation cost relating to non-vested restricted shares (excluding CEO RSs), which the Company expects to recognize over a weighted-average period of 1.6 years (December 31, 2021:

For the six months ended June 30, 2022, the total fair value of restricted shares vested was $ 2.0 million (2021:

For the nine months ended September 30, 2022, the total fair value of restricted shares vested was $ 2.0 million (2021:

$ 1.6 million).

The following table summarizes the activity for unvested outstanding restricted share awards during the six months ended June 30, 2022:

Performance Restricted Stock Service Restricted Stock

The following table summarizes the activity for unvested outstanding restricted share awards during the nine months ended September 30, 2022:

Performance Restricted Shares Service Restricted Shares

shares Weighted

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Forfeited — — ( 8,476 ) 7.67

Balance at June 30, 2022 794,362 $ 7.62 824,377 $ 7.80

Balance at September 30, 2022 794,362 $ 7.62 904,351 $ 7.73

Employee Restricted Stock Units

The Company issues RSUs to certain employees as part of the stock incentive plan and contain restrictions relating to vesting, forfeiture in the event of termination of employment, transferability, and other matters.

The Company issues RSUs to certain employees as part of the stock incentive plan.

Such RSUs contain restrictions relating to vesting, forfeiture in the event of termination of employment, transferability, and other matters.

On the vesting date, the Company converts each RSU into one Class A ordinary share and issues new Class A ordinary shares from the shares authorized for issuance as part of the Company’s stock incentive plan.

2 unchanged sentences

If performance goals are achieved, the Performance RSUs will cliff vest at the end of a three-year performance period within a range of 25 % and 100 % of the awarded Performance RSUs, with a target of 50 %.

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The Company recognizes compensation expense associated with Performance RSUs and Service RSUs based on the fair value of the Company's Class A ordinary shares measured at the grant date.

2 unchanged sentences

Prior to 2022, the RSUs issued to employees cliff vested three years after the date of issuance, subject to the grantee’s continued service with the Company.

For the six months ended June 30, 2022, the Company issued 159,215 (2021:

For the nine months ended September 30, 2022, the Company issued 159,215 (2021:

58,123 ) RSUs to employees pursuant to the Company’s stock incentive plan.

For the six months ended June 30, 2022, and 2021, no RSUs were forfeited.

The Company recorded $ 0.3 million of share-based compensation expense relating to RSUs for the six months ended June 30, 2022 (2021:

For the nine months ended September 30, 2022, and 2021, no RSUs were forfeited.

The Company recorded $ 0.5 million of share-based compensation expense relating to RSUs for the nine months ended September 30, 2022 (2021:

$ 0.3 million).

At June 30, 2022, the total compensation cost related to non-vested RSUs not yet recognized was $ 0.8 million (December 31, 2021:

At September 30, 2022, the total compensation cost related to non-vested RSUs not yet recognized was $ 0.7 million (December 31, 2021:

$ 0.5 million), which the Company expects to recognize over a weighted-average period of 1.6 years (December 31, 2021:

Employee RSU activity during the six months ended June 30, 2022, was as follows:

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Employee RSU activity during the nine months ended September 30, 2022, was as follows:

Performance Restricted Stock Units Service Restricted Stock Units

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Vested — — ( 35,389 ) 10.84

Balance at June 30, 2022 105,008 $ 6.82 172,952 $ 7.58

Balance at September 30, 2022 105,008 $ 6.82 172,952 $ 7.58

Employee and Director Stock Options

For the six months ended June 30, 2022, and 2021, no Class A ordinary share purchase options were granted or exercised by directors or employees and no stock options expired or vested.

For the nine months ended September 30, 2022, and 2021, no Class A ordinary share purchase options were granted or exercised by directors or employees, and 45,290 Class A ordinary share purchase options expired.

When the Company grants stock options, it reduces the corresponding number from the shares authorized for issuance as part of the Company’s stock incentive plan.

1 unchanged sentence

The Company uses graded vesting for expensing employee stock options.

The total compensation cost expensed relating to stock options for the six months ended June 30, 2022, was $ 0.1 million (2021:

The total compensation cost expensed relating to stock options for the nine months ended September 30, 2022, was $ 0.2 million (2021:

$ 0.3 million).

At June 30, 2022, the total compensation cost related to non-vested options not yet recognized was $ 0.1 million (December 31, 2021:

$ 0.3 million), which will be recognized over a weighted-average period of 1.0 year (December 31, 2021:

At September 30, 2022, the total compensation cost related to non-vested options not yet recognized was $ 0.1 million (December 31, 2021:

$ 0.3 million), which will be recognized over a weighted-average period of 0.8 years (December 31, 2021:

1.2 years) assuming the grantee completes the service period for vesting of the options.

Employee and director stock option activity during the six months ended June 30, 2022 was as follows:

Employee and director stock option activity during the nine months ended September 30, 2022 was as follows:

options outstanding Weighted

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Expired ( 45,290 ) 23.80 11.04 — —

Balance at June 30, 2022 735,627 $ 22.35 $ 10.23 $ — 4.2 years

Balance at September 30, 2022 690,337 $ 22.25 $ 10.18 $ — 4.2 years

Stock Compensation Expense

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For the six months ended June 30, 2022, and 2021, the combined stock compensation expenses (net of forfeitures) included in the caption “General and administrative expenses” in the Company’s condensed consolidated statements of operations were $ 2.1 million and $ 1.6 million, respectively.

At June 30, 2022, the Company recorded a gross deferred tax asset of $ 3.5 million (December 31, 2021:

For the nine months ended September 30, 2022, and 2021, the combined stock compensation expenses (net of forfeitures) included in the caption “General and administrative expenses” in the Company’s condensed consolidated statements of operations were $ 3.3 million and $ 2.4 million, respectively.

At September 30, 2022, the Company recorded a gross deferred tax asset of $ 3.7 million (December 31, 2021:

$ 3.2 million) and a deferred tax asset valuation allowance of $ 3.2 million (December 31, 2021:

1 unchanged sentence

The net deferred tax asset is included in the caption “Other assets” in the Company’s condensed consolidated balance sheets.

The Company has determined that it is more likely than not to fully realize the recorded deferred tax asset (net of the valuation allowance) in the future.

The Company has determined that it is more likely than not that it will fully realize the recorded deferred tax asset (net of the valuation allowance) in the future.

The Company based this determination on the expected timing of the reversal of the temporary differences and the likelihood of generating sufficient taxable income to realize the future tax benefit.

The following table sets forth our current and deferred income tax benefit (expense) on a consolidated basis for the six months ended June 30, 2022 and 2021:

Three months ended June 30 Six months ended June 30

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The following table sets forth our current and deferred income tax benefit (expense) on a consolidated basis for the nine months ended September 30, 2022 and 2021:

Three months ended September 30 Nine months ended September 30

2022 2021 2022 2021

7 unchanged sentences

Investment Advisory Agreement

DME, DME II, and DME Advisors are each an affiliate of David Einhorn, Chairman of the Company’s Board of Directors, and therefore, are related parties to the Company.

DME, DME II, and DME Advisors are each an affiliate of the Chairman and therefore are related parties to the Company.

The Company has entered into the SILP LPA (as described in Note 3 of the condensed consolidated financial statements).

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The IAA has an initial term ending on August 31, 2023, subject to an automatic extension for successive three-year terms.

For a detailed breakdown of management fees and performance compensation for the three and six months ended June 30, 2022, and 2021, refer to Note 3 of the condensed consolidated financial statements.

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For a detailed breakdown of management fees and performance compensation for the three and nine months ended September 30, 2022, and 2021, refer to Note 3 of the condensed consolidated financial statements.

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.

4 unchanged sentences

(“GRBK”), a publicly-traded company.

At June 30, 2022, SILP, along with certain affiliates of DME Advisors, collectively owned 36 % of the issued and outstanding common shares of GRBK.

At September 30, 2022, SILP, along with certain affiliates of DME Advisors, collectively owned 38 % of the issued and outstanding common shares of GRBK.

Under applicable securities laws, DME Advisors may sometimes be limited in its ability to trade GRBK shares held in SILP.

At June 30, 2022, SILP held 2.7 million shares of GRBK.

At September 30, 2022, SILP held 2.7 million shares of GRBK.

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Service Agreement

7 unchanged sentences

Letters of Credit and Trusts

At June 30, 2022, 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:

At September 30, 2022, 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:

Maximum Facility Limit Termination Date Notice period required for termination

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Citibank Europe plc $ 275,000 August 20, 2023 120 days before the termination date

At June 30, 2022, an aggregate amount of $ 182.7 million (December 31, 2021:

At September 30, 2022, an aggregate amount of $ 180.2 million (December 31, 2021:

$ 136.8 million) in letters of credit was issued under the credit facility.

At June 30, 2022, the Company had pledged total cash and cash equivalents with a fair value in the aggregate of $ 183.5 million (December 31, 2021:

At September 30, 2022, the Company had pledged total cash and cash equivalents with a fair value in the aggregate of $ 180.9 million (December 31, 2021:

$ 137.6 million) as collateral against the letters of credit issued and included in the caption “Restricted cash and cash equivalents” in the Company’s condensed consolidated balance sheets.

1 unchanged sentence

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.

The Company was in compliance with all the credit facility covenants at June 30, 2022 and December 31, 2021.

The Company was in compliance with all the credit facility covenants at September 30, 2022 and December 31, 2021.

The Company has also established regulatory trust arrangements for certain cedents.

At June 30, 2022, collateral of $ 486.1 million (December 31, 2021:

At September 30, 2022, collateral of $ 468.0 million (December 31, 2021:

$ 497.1 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 condensed consolidated balance sheets.

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Lease Obligations

2 unchanged sentences

The exercise of lease renewal options is at the Company's sole discretion, and these options do not contain any material residual value guarantees or material restrictive covenants.

The Company’s weighted-average remaining operating lease term is approximately 4.0 years at June 30, 2022.

The Company’s weighted-average remaining operating lease term is approximately 4.0 years at September 30, 2022.

As the lease contracts generally do not provide an implicit discount rate, the Company used the weighted-average discount rate of 6 %, representing its incremental borrowing rate based on information available at the commencement date, to determine the present value of lease payments.

1 unchanged sentence

The Company has made an accounting policy election not to include renewal, termination, or purchase options that are not reasonably certain of exercise when determining the term of the borrowing.

At June 30, 2022, the right-of-use assets and lease liabilities relating to the operating leases were $ 2.2 million and $ 2.2 million, respectively.

The operating expense for the three and six months ended June 30, 2022, was $ 0.2 million and $ 0.3 million, respectively (three and six months ended June 30, 2021:

nil and $ 0.1 million, respectively).

At June 30, 2022, the commitment for operating lease liabilities for future annual periods was as follows:

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At September 30, 2022, the right-of-use assets and lease liabilities relating to the operating leases were $ 2.0 million and $ 2.1 million, respectively.

The operating expense for the three and nine months ended September 30, 2022, was $ 0.2 million and $ 0.5 million, respectively (three and nine months ended September 30, 2021:

$ 0.1 million and $ 0.2 million, respectively).

At September 30, 2022, the commitment for operating lease liabilities for future annual periods was as follows:

Year ending December 31, ($ in thousands)

12 unchanged sentences

Gross Premiums Written by Line of Business

Three months ended June 30 Six months ended June 30

Three months ended September 30 Nine months ended September 30

2022 2021 2022 2021

1 unchanged sentence

Commercial $ 2,146 1.4 % $ 3,398 2.6 % $ 8,648 2.0 % $ 9,700 2.2 %

( 884 ) ( 0.6 ) 8,725 6.2 562 0.2 18,434 5.9

Motor 206 0.1 6,103 4.8 768 0.2 24,537 5.6

Personal 17,669 11.4 3,631 2.8 49,425 11.3 10,318 2.3

2 unchanged sentences

Motor Liability 565 0.4 19,823 15.4 4,061 0.9 96,795 22.0

( 1,613 ) ( 1.2 ) 35,408 25.0 3,496 1.3 76,972 24.7

Professional Liability 242 0.2 154 0.1 496 0.1 302 0.1

113 0.1 ( 3 ) — 254 0.1 148 —

Workers' Compensation 7,216 4.6 17,117 13.3 25,504 5.9 55,237 12.5

7 unchanged sentences

$ 155,146 100.0 % $ 128,735 100.0 % $ 435,812 100.0 % $ 440,249 100.0 %

(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.

Gross Premiums Written by Geographic Area of Risks Insured

Three months ended June 30 Six months ended June 30

Three months ended September 30 Nine months ended September 30

2022 2021 2022 2021

7 unchanged sentences

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

(2) The negative balance represents the reversal of premiums due to premium adjustments, termination of contracts, or premium returned upon novation or commutation of contracts.

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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-Q

Item 1. Financial Statements