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Item 1. Business

2024-03-05 compared with 2023-03-08 · 244 added, 242 removed, 368 unchanged (57% of the section changed)

Unless otherwise indicated or unless the context otherwise requires, all references in this annual report on Form 10-K to “the Company,” “we,” “us,” “our,” and similar expressions are references to Greenlight Capital Re, Ltd.

Unless otherwise indicated or unless the context otherwise requires, all references in this Form 10-K to “the Company,” “we,” “us,” “our,” and similar expressions are references to Greenlight Capital Re, Ltd.

and its consolidated subsidiaries.

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Reference Entity’s legal name

Greenlight Capital Re Greenlight Capital Re, Ltd.

Greenlight Capital Re or GLRE

Greenlight Capital Re, Ltd.

Greenlight Re Greenlight Reinsurance, Ltd.

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GCM Greenlight Re Corporate Member Ltd.

Viridis Re SPC, Ltd.

We have included a Glossary of Selected Reinsurance Terms at the end of “Part 1, Item 1.

Business” of this Form 10-K.

All dollar amounts referred to in this Form 10-K are in U.S.

dollars unless otherwise indicated.

Due to rounding, numbers presented in the tables included in this Form 10-K may not add up precisely to the totals provided.

Company Overview

Greenlight Capital Re is a holding company incorporated in July 2004 under the laws of the Cayman Islands.

In August 2004, we raised gross proceeds of $212.2 million from private placements of Greenlight Capital Re’s Class A ordinary shares and Class B ordinary shares, or, collectively, the ordinary shares.

On May 24, 2007, Greenlight Capital Re raised proceeds of $208.3 million, net of underwriting fees, in an initial public offering of Class A ordinary shares, and an additional $50.0 million from a private placement of Class B ordinary shares.

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 most of our competitors.

We conduct our operations through two licensed and regulated entities:

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

Greenlight Re provides multi-line property and casualty reinsurance globally, while GRIL focuses mainly on the European market.

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

Established in 2004, 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 most of our competitors.

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

Greenlight Re, based in Grand Cayman, Cayman Islands, and GRIL, based in Dublin, Ireland, in addition to our Lloyd’s platform, Syndicate 3456.

Greenlight Re provides multi-line property and casualty reinsurance globally, while GRIL focuses mainly on specialty business.

Our Syndicate 3456 supports innovative, technology-driven insurance partners (“insurtechs”).

The London market specialty business is central to our underwriting portfolio.

In 2020, we established a UK marketing Company, Greenlight Re UK, which has increased our London market presence and we expect it to facilitate continued growth in this market.

In 2020, we established a UK marketing Company, Greenlight Re UK, to increase our London market presence.

On January 1, 2023, we acquired a Lloyd’s corporate member, GCM, that provides underwriting capacity for various syndicates (including Syndicate 3456) that underwrite general insurance and reinsurance business at Lloyd’s.

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The ownership of GCM complements our Syndicate 3456 and provides us more control over the FAL business.

Through our Greenlight Re Innovations unit, we also make long-term strategic investments in early-stage insurance companies and managing general agents (“MGAs”) to complement our strategy and strengthen our client relationships.

In December 2023, we incorporated Viridis Re as an exempted segregated portfolio company (“SPC”) in the Cayman Islands.

Through segregated portfolios of Viridis Re, we plan to offer cost-effective insurance and reinsurance solutions to current and future insurtechs and MGA partners.

Our goal is to build long-term shareholder value by providing risk management products and services to the insurance, reinsurance, and other risk marketplaces.

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

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

Our investment portfolio is managed by a value-oriented investment advisor that analyzes companies’ available financial data, business strategies, and prospects to identify undervalued and overvalued securities.

From time to time, we make long-term strategic investments in insurance companies and general agents to complement our strategy and strengthen our client relationships.

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.

In certain instances, we utilize Verdant to facilitate strategic investments in property and casualty insurers, general agents, and other entities domiciled in the United States.

We focus on delivering risk solutions to clients and brokers who value our expertise, analytics, and customer service offerings, while complementing our underwriting activities with a non-traditional investment approach designed to achieve higher rates of return over the long term than reinsurance companies that exclusively employ more traditional investment strategies.

Company Organization and History

Since our inception in 2004, we had two classes of common stock:

(i) our Class A ordinary shares, which were traded on the NASDAQ;

and (ii) our Class B ordinary shares.

The rights of the holders of Class A and Class B shares were identical, except for voting and conversion rights.

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Description of Business

Greenlight Re is licensed and regulated by the Cayman Islands Monetary Authority (“CIMA”) to write property and casualty reinsurance business as well as long-term business (e.g., life insurance, long-term disability, long-term care, etc.) To date, we have not written any long-term business.

GRIL is licensed and regulated by the Central Bank of Ireland (“CBI”) to write property and casualty reinsurance business.

Currently, we have one operating segment:

property and casualty reinsurance.

Within that segment, we employ a two-pillar strategy:

Traditional property and casualty reinsurance

We offer excess of loss and quota share products across a range of classes in the property and casualty market.

On July 25, 2023, at the Company’s Annual General Meeting (“2023 AGM”), our shareholders approved the re-designation of Class B ordinary shares as Class A ordinary shares.

Such re-designation, alongside the approved reclassification of the Class A ordinary shares as simply “ordinary shares,” resulted in the elimination of the dual-class structure.

We have one class of common stock, our ordinary shares, which trades on the NASDAQ.

Each ordinary share is entitled to one vote per share.

However, except upon unanimous consent of our Board pursuant to Section 11(1)(c) of our Fourth Amended and Restated Memorandum and Articles of Association (the “Articles”), no holder is permitted to acquire an amount of shares which would cause any person to own (directly, indirectly or constructively under applicable United States tax attribution and constructive ownership rules) 9.9% or more of the total voting power of the total issued and outstanding ordinary shares.

In connection with certain proposals that passed at our 2023 AGM relating to the elimination of our former dual-class share structure, our Board consented pursuant to Section 11(1)(c) of the Articles to David Einhorn beneficially owning more than 9.9% of the total voting power of the total issued and outstanding ordinary shares, up to the amount of ordinary shares beneficially owned by David Einhorn at the time of the consent (i.e., 6,254,715 ordinary shares, which represents 17.7% of the outstanding ordinary shares as of December 31, 2023).

Business Strategy

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

We also measure our short and long-term underwriting performance based on our net underwriting income.

We have incorporated these two key performance metrics in our incentive compensation plan to align employee and shareholder interests.

Reinsurance operations:

We strive to grow our diverse book of business by responding timely to changing market conditions, prudently managing our chosen lines of business, and driving sustainable shareholder returns.

We execute our reinsurance business through a two-pillar strategy:

Open market underwriting :

We offer a diverse range of risk management products and services across market segments and geographies.

Our small scale, relative to our global competitors, enables us to be more agile in allocating capacity to the most promising risks and classes.

We write business on a non-proportional (or excess of loss) and proportional basis (also known as pro rata reinsurance, quota share reinsurance or participating reinsurance) across a range of classes in the property and casualty market.

Our underwriting approach varies by class and type of opportunity:

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• 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.

Risk innovation and strategic partnerships

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.

Further, the size and diversification of our underwriting portfolio will vary based on our perception of the opportunities available in each line of business at each point in time.

As our focus on certain lines fluctuates based on market conditions, we may only offer or underwrite a limited number of lines in any given period.

• mitigate underwriting volatility over the long term by focusing on short and medium tail risk;

• target markets and lines of business where we believe an appropriate risk/reward profile exists;

• attract and retain clients with expertise in their respective lines of business;

• employ strict underwriting discipline;

• select reinsurance opportunities with anticipated favorable returns on capital.

Innovations and strategic partnerships :

Our strategic investments in insurtech positions us to access a stream of new underwriting business, in addition to potential fee income and investment return on early stage investments.

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

In evaluating Innovations opportunities, we generally ensure that each investment meets at least one of the following criteria:

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

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● 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.

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

This enables us to capitalize on global insurtech opportunities, while leveraging Lloyd’s strong credit ratings (see Ratings below).

Further, in late 2023, we incorporated Viridis Re as an SPC in the Cayman Islands.

Through segregated portfolios of Viridis Re, we plan to offer cost-effective insurance and reinsurance solutions for current and future insurtech and MGA partners.

Our investment 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 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 mainly 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.

Accordingly, we have incorporated a metric based on growth in book value per share in our incentive compensation plan to align employee and shareholder interests.

The size and diversification of our underwriting portfolio will vary based on our perception of the opportunities available in each line of business at each point in time.

As our focus on certain lines fluctuates based on market conditions, we may only offer or underwrite a limited number of lines in any given period.

● target markets and lines of business where we believe an appropriate risk/reward profile exists;

● attract and retain clients with expertise in their respective lines of business;

● employ strict underwriting discipline;

● select reinsurance opportunities with anticipated favorable returns on capital.

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The following table sets forth our gross premiums written by line of business, further broken down by class of business:

Year ended December 31

2022 2021 2020

($ in thousands)

Commercial $ 14,750 2.6 % $ 10,853 1.9 % $ 11,190 2.3 %

Motor 2,346 0.4 29,953 5.3 33,054 6.9

Personal 68,227 12.2 12,141 2.1 14,219 3.0

Total Property 85,323 15.2 52,947 9.4 58,463 12.2

General Liability 60,276 10.7 18,037 3.2 4,228 0.9

Motor Liability 8,601 1.6 118,251 20.9 127,379 26.5

Professional Liability 1,921 0.3 316 0.1 204 —

Workers' Compensation 28,381 5.0 62,188 11.0 82,189 17.1

Multi-line 225,924 40.1 180,321 31.9 88,237 18.4

Total Casualty 325,103 57.7 379,113 67.1 302,237 63.0

Accident & Health 8,947 1.6 31,612 5.6 56,284 11.7

Financial 66,528 11.8 66,612 11.8 23,231 4.8

Marine 22,700 4.0 10,652 1.9 770 0.2

Other Specialty 54,570 9.7 24,457 4.3 38,806 8.1

Total Other 152,745 27.1 133,333 23.6 119,091 24.8

$ 563,171 100.0 % $ 565,393 100.0 % $ 479,791 100.0 %

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

See “- Investments ” within this Item 1.

Business for further information.

We have one operating segment:

property and casualty reinsurance, which also represents our reporting segment.

We analyze our business based on the following lines of business:

covers personal lines, commercial lines exposures and automobile physical damage.

Property business includes both catastrophe and non-catastrophe coverage.

covers general liability, motor liability, professional liability, and workers’ compensation exposures.

Our multi-line business includes the FAL business.

As our Lloyd’s syndicate contracts incorporate property (including incidental catastrophe), casualty, and other exposures, we categorize them as multi-line (and therefore casualty) business.

However, these contracts are composed of primarily short-tailed risks.

covers accident and health, financial (including transactional liability, mortgage insurance, surety, and trade credit), marine, energy, as well as other specialty business such as aviation, crop, cyber, political, and terrorism exposures.

The following table presents our gross premiums written by lines of business for the most recent three years:

Year ended December 31

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($ in thousands)

and Caribbean $ 295,428 52.4 % $ 316,015 55.9 % $ 390,000 81.3 %

Worldwide (1)

242,561 43.1 240,285 42.5 84,204 17.5

20,334 3.6 4,609 0.8 5,587 1.2

4,848 0.9 4,484 0.8 — —

Property $ 113,291 17.8 % $ 85,323 15.2 % $ 52,947 9.4 %

Casualty 351,037 55.1 325,103 57.7 379,113 67.1

Other 172,482 27.1 152,745 27.1 133,333 23.6

$ 636,810 100.0 % $ 563,171 100.0 % $ 565,393 100.0 %

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

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

Refer to “Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations ” (herein referred as “MD&A”) for additional information relating to our reportable segment and related underwriting performance and Note 17 “ Segment R e porting ” to the consolidated financial statements relating to our reportable segment and a breakdown of our gross premiums written by geographic area of risks insured.

Our consolidated financial statements are located in “Part II, Item 8.

Financial Statements and Supplementary Data .”

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Marketing and Distribution

Business transacted using intermediaries

We source a majority of our business through reinsurance brokers.

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

By maintaining close

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relationships with brokers, we believe that 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:

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Their commissions are generally determined based on a percentage of gross premiums written.

We rely on a small number of broker relationships, which has continued to decrease in recent years as a result of consolidation in the broker sector.

In 2022, five brokerage firms accounted for 69.4% of our gross premiums written.

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

Gross premiums written by broker, shown individually where premiums by broker (including their subsidiaries and affiliates) were 10% or more of the total in any of the last three years, were as follows:

Year ended December 31

2023 2022 2021

($ in thousands)

Guy Carpenter (Marsh) $ 122,766 19.3 % $ 50,626 9.0 % $ 178,336 31.5 %

Aon Benfield 91,642 14.4 159,421 28.3 139,044 24.6

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BMS Group 20,277 3.2 51,435 9.1 63,958 11.3

Guy Carpenter (Marsh) 50,626 9.0

Howden 38,376 6.8

Total of largest brokers $ 292,416 45.9 % $ 352,721 62.6 % $ 408,934 72.3 %

All other brokers and direct placements 172,074 30.6

Total $ 563,171 100.0 %

All other brokers, MGAs and direct placements 344,394 54.1 210,450 37.4 156,459 27.7

$ 636,810 100.0 % $ 563,171 100.0 % $ 565,393 100.0 %

We frequently meet in the Cayman Islands, Ireland, U.K.

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See “Item 1A.

Risk Factors — Risks Related to Our Business — The inability to obtain business provided from brokers could materially and adversely affect our business, financial condition and results of operations.

Risk Factors — Risks Related to Our Business — The loss of significant brokers could materially and adversely affect our business, financial condition and results of operations.

” We may assume a degree of the credit risk of our reinsurance brokers.

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Our Innovations partnerships are a growing source of directly placed business.

Our FAL business, which represented approximately one third of our gross written premiums in the 2022 fiscal year, was generated through a Lloyd’s corporate member, which we subsequently acquired effective January 1, 2023.

We may also selectively delegate underwriting authority to managing general agents to transact business within the constraints of prescribed underwriting guidelines.

We expect to delegate underwriting authority primarily relating to Syndicate 3456, and sporadically through carefully selected managing agents.

Our MGA partners are a key source of premium flow and a vital component of our Innovations strategy.

We work closely with our MGA partners

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who wish to attain Lloyd’s coverholder status, which allows them to conduct business with our Syndicate 3456.

We also use MGAs to transact business on other classes of business within the constraints of prescribed underwriting guidelines.

Prior to January 1, 2023, our FAL business was generated through a Lloyd’s corporate member, which we subsequently acquired effective January 1, 2023.

FAL represented approximately 35%, 33%, and 26% of our gross premiums written for the years ended December 31, 2023, 2022, and 2021, respectively.

Underwriting and Risk Management

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the Cayman Islands, Dublin, Ireland, and London, U.K.

These platforms provide access to key markets in the U.S.

These platforms provide access to key markets in the U.S., Europe, Middle East, and Asia.

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

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This analysis includes identifying and assessing the structural drivers of risk and emerging loss trends and understanding the market participants and results, capacity conditions for supply and demand, and other factors.

Our underwriting professionals specialize in business lines, and our quantitative professionals assist in evaluating all risks we underwrite.

Our underwriting professionals specialize in business lines, and our quantitative professionals (pricing actuaries) assist in evaluating all risks we underwrite.

Combined with cross-line management, we believe this approach enables us to build and deploy expertise and insight into the business line’s risk dynamics and external factors that will affect each transaction.

We assign a deal team composed of underwriting and quantitative professionals to evaluate each potential transaction’s pricing and structure.

Before committing capital to any transaction, the deal team and the regional Chief Underwriting Officer must obtain approval from the Chief Executive Officer.

Before committing capital to any transaction, the deal team and the regional Chief Underwriting Officer must obtain approval from at least one of, the group Chief Executive Officer, GRIL Chief Executive Officer, or Chief Risk Officer.

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.

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● reports provided by independent industry specialists.

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

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

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Underwriting Authorities

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

Refer to “Part II, Item 5.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - F inancial Condition ” for a summary of our catastrophe loss exposure in terms of our probable maximum loss (“PML”), net of retrocession and reinstatement premiums, as at January 1, 2024.

Retrocessional Coverage

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2.4%) of our gross loss reserves.

For further details, please see Note 8 to the consolidated financial statements.

We regularly evaluate the financial condition of our reinsurers to assess their ability to honor their obligations.

At December 31, 2022, the Company had recorded an allowance for expected credit losses from retrocessionaires of $0.4 million (2021:

$0.1 million).

For further details, please see Note 8 “ Retrocession ” to the consolidated financial statements.

Claims Management

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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 oversees claims reviews and approves complex or large claim settlements.

Claims above the claims officer’s authority are referred to the General Counsel or Chief Financial Officer, together with the claims officer’s recommendations, for secondary approval.

Our Chief Executive Officer must approve claim payments above a certain threshold.

Our in-house claims team oversees claims reviews and approves all claim settlements.

Claims above the claims officer’s authority are referred to the General Counsel, Chief Financial Officer, Chief Executive Officer, or Chief Risk Officer together with the claims officer’s recommendations, for secondary approval.

We believe that this process ensures that we pay claims in accordance with each contract's terms and conditions.

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• adherence to claims-handling guidelines.

We recognize that the fair interpretation of our reinsurance agreements and timely payment of covered claims are essential components of the service we provide to our clients.

The results of these claim reserves are shared with the underwriters and actuaries to assist them in pricing products and establishing loss reserves.

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We recognize that the fair interpretation of our reinsurance agreements and timely payment of covered claims are essential components of the service we provide to our clients.

Our reserving philosophy is to set reserves at the level representing our best estimate of the amount we will ultimately be required to pay in connection with risks we have underwritten.

Our actuarial staff performs quarterly reviews of our portfolio and provides reserving estimates according to our stated reserving philosophy.

In doing so, our actuarial staff groups our portfolio into reserving analysis segments based primarily on homogeneity considerations.

In doing so, our team groups our portfolio into reserving analysis segments based primarily on homogeneity considerations.

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

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

We engage an independent actuarial firm who reviews and provides 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.

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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 inflation, interest rate changes, political risks and 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.

Another significant component of reserving risk relates to the estimation of losses in the aftermath of a major catastrophe event.

Accordingly, we believe the most significant accounting judgment made by management is our estimate of loss and loss adjustment expense reserves.

For more information on our reserving process and methodology, refer to the “ Critical Accounting Polic ies and Estimates - Loss and Lo ss Adjustment Expense Re serves ” under “Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

See Note 7 “ Loss and Loss Adjustment Expense Reserves ” of the consolidated financial statements for a reconciliation of claims reserves, loss development tables by accident year, and explanations of significant prior period loss development movements.

For a discussion on risk factors relating to loss reserves, see “Item 1A.

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

Collateral Arrangements and Letter of Credit Facilities

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clients require us to provide collateral for the contracts we bind with them.

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

At December 31, 2022, we had one letter of credit facility with a limit of $275.0 million (2021:

$275.0 million).

At December 31, 2022, we had issued letters of credit totaling $203.9 million (2021:

$136.8 million) to clients.

Additionally, at December 31, 2022, we had pledged $463.7 million (2021:

$497.1 million) as collateral through trust arrangements.

We provide collateral as funds withheld, trust arrangements, or letters of credit (“LOC”).

For further information, see Note 9 - “ Debt and Credit Facilities ” of the consolidated financial statements in “Item 8.

Financial Statements and Supplementary Data”.

The reinsurance industry is highly competitive.

We compete with major reinsurers, most of which are well-established and have significant operating histories, strong financial strength ratings, and long-standing client relationships.

Competition is generally focused on available capacity, service, financial strength, and price.

We compete with major global reinsurers, most of which are well-established and have significant operating histories, strong financial strength ratings, and long-standing client relationships.

Competitors also provide protection in the form of catastrophe bonds, industry loss warranties, and other risk-linked products that are outside of the traditional reinsurance treaty market.

This may lead to reduced pricing and/or reduced participation levels in certain reinsurance products.

Our competitors vary according to the individual market and situation.

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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 with a stable outlook from A.M.

Best is the fourth highest of 13 ratings.

We believe a strong rating is important in marketing reinsurance products to clients and brokers.

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On September 29, 2023, A.M.

Best re-affirmed our “A- (Excellent)” rating with a stable outlook, the fourth highest of 13 ratings, for our two principal operating subsidiaries:

GLRE and GRIL.

We believe a strong rating is important to compete and market reinsurance products to clients and brokers.

These ratings reflect the rating agency’s opinion of our reinsurance subsidiaries’ financial strength, operating performance, and ability to meet obligations.

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

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

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

Additionally, A.M.

Best assessed our Enterprise Risk Management (“ERM”) practices as appropriate for the Company’s business complexity and overall risk profile.

Best periodically reviews the financial positions of our operating subsidiaries and therefore our rating may be subsequently revised or revoked by the agency.

The failure to maintain our current “A-” A.M.

Best rating may significantly and negatively affect our ability to implement our business strategy.

See “Item 1A.

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Best ratings would materially and adversely affect our ability to implement our business strategy.

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Further, by being part of the Lloyd’s market, Syndicate 3456 benefits from the following four Lloyd’s financial strength ratings:

“A” (Excellent) from A.M.

AA- (Very Strong) from Fitch Ratings;

AA- (Very Strong) from Kroll Bond Rating Agency;

and AA- (Very Strong) from Standard & Poor’s.

Cayman Islands Insurance Regulation

The legislative framework for conducting insurance and reinsurance business in and from within the Cayman Islands is composed of The Insurance Act, 2010 (as amended) and underlying regulations thereto (the “Act”), which became effective in the Cayman Islands on November 1, 2012.

Greenlight Re holds a Class D insurer license issued in accordance with the terms of the Act and is subject to regulation and supervision by CIMA.

Greenlight Re holds a Class D insurer license issued in accordance with the terms of the Act and is subject to regulation and supervision by the Cayman Islands Monetary Authority (“CIMA”).

As the holder of a Class D insurer license, Greenlight Re is permitted to carry on reinsurance business from the Cayman Islands but, except with the prior written approval of CIMA, may not carry on any insurance or reinsurance business where the underlying risk originates and resides in the Cayman Islands.

Greenlight Re is required to comply with the following principal requirements under the Act:

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● to maintain capital and a margin of solvency in accordance with the capital and solvency requirements prescribed by the Act;

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Respectively, these rules require regulated insurers to establish and maintain (a) a corporate governance framework that provides for the sound and prudent management and oversight of the insurer's business, including outsourcing and internal controls, and which adequately recognizes and protects the interests of its policyholders, and (b) a risk management framework that is capable of promptly identifying, measuring, assessing, reporting, monitoring and controlling all sources of risks that could have a material impact on its operations, and (c) implement investment activities that consider all of Greenlight Re’s risks and solvency requirements.

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The Act provides that where CIMA believes a licensee is committing, or is about to commit or pursue, an act that is an unsafe or unsound business practice, CIMA may direct the licensee to cease or refrain from committing the act or pursuing the offending course of conduct.

Failure to comply with such a CIMA direction may be punishable on summary conviction by a fine of up to 100,000 Cayman Islands dollars (approximately US$120,000) or to imprisonment for a term of five years or to both, and on conviction on indictment to a fine of 500,000 Cayman Islands dollars (approximately US$600,000) or to imprisonment for a term of ten years or to both and to an additional 10,000 Cayman Islands dollars (approximately US$12,000) for every day after conviction that the breach continues.

Failure to comply with such a CIMA direction may be punishable on summary conviction by a fine of up to 100,000 Cayman Islands dollars (US$120,000) or to imprisonment for a term of five years or to both, and on conviction on indictment to a fine of 500,000 Cayman Islands dollars (US$600,000) or to imprisonment for a term of ten years or to both and to an additional 10,000 Cayman Islands dollars ( US$12,000) for every day after conviction that the breach continues.

The Monetary Authority Act (“MAA”) also provides CIMA with the authority to impose administrative fines on licensees.

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They extended the scope of the fines CIMA may impose for breaches of a range of regulatory laws, including the Act.

Breaches are categorized as minor, serious, or very serious, and, depending on the category of the breach, fines range from US$6,100 to US$1,220,000 per breach for very serious breaches.

Breaches are categorized as minor, serious, or very serious, and, depending on the category of the breach, fines range from $6,100 to $1,220,000 per breach for very serious breaches.

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 .

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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.

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As Cayman Islands exempted companies, Greenlight Capital Re and Greenlight Re may not carry on business or trade locally in the Cayman Islands except in furtherance of their business outside the Cayman Islands and are prohibited from soliciting the public of the Cayman Islands to subscribe for any of their securities or debt.

Both these companies are further required to file a return with the Registrar of Companies in January of each year (“Annual Return”) and to pay an annual registration fee at that time.

These companies are further required to file a return with the Registrar of Companies in January of each year (“Annual Return”) and to pay an annual registration fee at that time.

Additionally, these companies must comply with the “Anti-Money Laundering Regulations (2023 Revision)” in the Cayman Islands.

Economic substance law requiring a “relevant entity” conducting “relevant activity” to file notifications and, unless exempt, to report to the Tax Information Authority (“TIA”) and maintain economic substance has been introduced in the Cayman Islands.

The International Tax Co-operation (Economic Substance) Act (2020 Revision) and International Tax Co-operation (Economic Substance) Regulations, 2020, were published on January 14, 2020, and August 11, 2020, respectively, and subsequently amended (together, the “ES Act”).

The International Tax Co-operation (Economic Substance) Act (2021 Revision) and International Tax Co-operation (Economic Substance) Regulations, 2020, were published on February 5, 2021, and August 11, 2020, respectively, and subsequently amended (together, the “ES Act”).

The latest version of the Guidance on Economic Substance for Geographically Mobile Activities (“ES Guidance”) was published in July 2022.

Commencing January 2020, Greenlight Capital Re and Greenlight Re are required to confirm their economic substance classification and submit this classification to the TIA as a prerequisite to the Annual Return filing.

As of January 2020, Greenlight Capital Re and Greenlight Re must confirm their economic substance classification on an annual basis and submit this classification to the TIA as a prerequisite to the Annual Return filing.

The Cayman Islands has no exchange controls restricting dealings in currencies or securities.

Cayman Islands Status with the European Union (“EU”) and Financial Action Task Force (“FATF”) Compliance

In February 2021, the Cayman Islands was added to the FATF ’s “grey list”, a list of jurisdictions under increased monitoring to address strategic deficiencies in their Anti-Money Laundering (“AML”) / Counter Terrorist Financing regimes, after the FATF identified deficiencies in three main areas.

In January 2022 the Cayman Islands was subsequently added to the EU’s list of jurisdictions with strategic deficiencies in their Anti-Money Laundering / Counter Terrorist Financing regimes (commonly known as the “ EU AML List ”), with the FATF recommended actions being cited by the EU Commission at the time as the justification for adding the Cayman Islands to the EU AML List.

On May 17, 2022, the EU confirmed that it would not require any further measures to be taken in order for the Cayman Islands to be removed from the EU AML List once the jurisdiction has addressed the remaining FATF action items.

On June 23, 2023, the FATF advised that the Cayman Islands had fulfilled the remaining action items and was eligible for removal from the EU AML List.

Following an on-site FATF visit in October 2023, it was announced at the FATF Plenary on October 27, 2023 that the Cayman Islands has been delisted from the FATF grey list.

As a result, the Cayman Islands was subsequently removed from the EU AML List on February 7, 2024.

Ireland Insurance Regulations

Our Irish subsidiary, GRIL, is authorized as a non-life reinsurance undertaking by the CBI in accordance with the European Union (Insurance and Reinsurance) Regulations 2015 (the "Irish Regulations").

Our Irish subsidiary, GRIL, is authorized as a non-life reinsurance undertaking by the Central Bank of Ireland “CBI” in accordance with the European Union (Insurance and Reinsurance) Regulations 2015 (the "Irish Regulations").

The Irish Regulations give effect in Ireland to EU Directive 2009/138/EC (known as "Solvency II"), which introduced a new European regulatory regime for insurers and reinsurers with effect from January 1, 2016.

Solvency II is supplemented by the European Commission Delegated Regulation (EU) 2015/35, other European Commission “delegated acts” and binding technical standards, and guidelines issued by the European Insurance and Occupational Pensions Authority (“Delegated Acts and Guidelines”).

GRIL is required to comply at all times with the Irish Regulations, the Irish Insurance Acts 1909 to 2018, regulations relating to insurance business or reinsurance business promulgated under the European Communities Act 1972, the Irish Central Bank Acts 1942 to 2018 as amended, regulations promulgated thereunder and directions, guidelines and codes of conduct issued by CBI (collectively the

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“Irish Insurance Acts and Regulations”).

conduct issued by the CBI (collectively the “Irish Insurance Acts and Regulations”).

In addition, GRIL is required to comply with the Delegated Acts and Guidelines and must meet risk-based solvency requirements imposed under Solvency II on insurers and reinsurers across all member states, including Ireland.

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We have deposited certain assets with Lloyd’s to support GCM’s underwriting business at Lloyd’s.

By entering into a membership agreement with Lloyd’s, GCM has undertaken to comply with all Lloyd’s by-laws and regulations as well as the provisions of the Lloyd’s Acts and the Financial Services and Markets Act 2000, as amended by the Financial Services Act 2012.

This arrangement subjects us to the following:

● Capital Requirements.

The underwriting capacity of a member of Lloyd’s must be supported by providing a deposit, referred to as “Funds at Lloyd’s” or “FAL,” in an amount determined on the basis of such entity’s solvency and capital requirements.

The underwriting capacity of a member of Lloyd’s must be supported by providing a deposit, referred to as FAL, in an amount determined on the basis of such entity’s solvency and capital requirements.

The amount of such deposit is calculated for each member through the completion of an annual capital adequacy exercise.

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Dividends from a Lloyd’s managing agent and a Lloyd’s corporate member can be declared and paid provided the relevant company has sufficient profits available for distribution.

The financial security of the Lloyd’s market as a whole is regularly assessed by three independent rating agencies (A.M.

Best, S&P and Fitch).

The financial security of the Lloyd’s market as a whole is regularly assessed by four independent rating agencies (A.M.

Best, S&P, Kroll Bond and Fitch).

Syndicates at Lloyd’s take their financial security rating from the rating of the Lloyd’s market.

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If Lloyd’s determines that the Central Fund needs to be increased, it has the power to assess premium levies on current Lloyd’s members up to 5% of a member’s underwriting capacity in any one year.

PRA and FCA Regulation .

The Prudential Regulation Authority (“PRA”) and the Financial Conduct Authority (“FCA”) regulate all financial services firms in the U.K.

including the Lloyd’s market, and Syndicate 3456, and have substantial powers of intervention in relation to regulated firms.

Prudential Regulation Authority (“PRA”) and Financial Conduct Authority (“FCA”) Regulation .

The PRA is part of the Bank of England and responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers, and major investment firms authorized in the UK.

The FCA has responsibility for market conduct regulation.

Lloyd’s as a whole is authorized by the PRA and regulated by both the FCA and the PRA, which both have substantial powers of intervention in relation to regulated firms.

Lloyd’s is required to implement certain rules prescribed by the PRA and the FCA.

If it appears to either the PRA or the FCA that either Lloyd’s is not fulfilling its delegated regulatory responsibilities or that managing agents are not complying with the applicable regulatory rules and guidance, the PRA or the FCA may intervene at their discretion.

To minimize duplication, both regulators have arrangements with Lloyd’s for co-operation on supervision and enforcement.

Lloyd’s is subject to an annual PRA solvency test which measures whether Lloyd’s has sufficient assets in the aggregate to meet all outstanding liabilities of its members, both current and run-off.

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Overview of Investments

At December 31, 2023, our total investments were $332.2 million, of which 77.9% (2022 - 71.7%) was invested in SILP and 22.1% (2022 - 28.3%) in Innovation-related investments.

Investment in SILP

Our investment portfolio is managed by DME Advisors, LP (“DME Advisors”), a value-oriented investment advisor that analyzes companies’ available financial data, business strategies, and prospects to identify undervalued and overvalued securities.

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

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”).

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

Refer to Note 15 “ Related Party Transactions ” of the consolidated financial statements.

Effective September 1, 2018, we have entered into an amended and restated exempted limited partnership agreement of SILP (the “SILP LPA”), as amended from time to time, with DME Advisors II, LLC (“DME II”), as General Partner, Greenlight Re, GRIL and the initial limited partner (each, a “Partner”).

Effective January 1, 2023, we increased the maximum Investment Portfolio, as defined in the SILP LPA, to 60% from 50% of GLRE Surplus, as defined in the SILP LPA.

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

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However, DME Advisors is not otherwise restricted with respect to the nature or timing of making investments for SILP.

On February 26, 2019, effective as of September 1, 2018, we entered into Amendment No.

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.

On January 7, 2021, effective as of January 1, 2021, we entered into a second amended and restated 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 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.

Effective January 1, 2023, we amended the SILP LPA to increase the maximum Investment Portfolio to 60% 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.

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DME II is not entitled to a performance allocation in a year in which a capital account incurs a loss.

At December 31, 2023, we estimate the reduced performance allocation of 10% to continue to be applied until SILP achieves additional investment returns of 113.7%, at which point the performance allocation will revert to 20%.

DME Advisors is required to follow our investment guidelines and act in a manner that it considers fair and equitable in allocating investment opportunities to us and SILP.

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If DME Advisors and any of its affiliates attempt to invest in the same opportunity simultaneously, DME Advisors and its affiliates may allocate the opportunity as they determine reasonably.

Affiliates of DME Advisors presently serve as the general partner or the investment advisor of Greenlight Capital, LP, Greenlight Capital Offshore Qualified, Ltd., GCOQ Intermediate, LP, Greenlight Capital Offshore Partners, Ltd., Greenlight Capital Investors, LP, Greenlight Capital Offshore Investors, Ltd., GCOI Intermediate, LP, Greenlight Capital Offshore Master, Ltd., Greenlight Masters, LP, Greenlight Masters Qualified, LP, Greenlight Masters Offshore, Ltd., Greenlight Masters Offshore I, Ltd., Greenlight Masters Offshore Partners and Greenlight Masters Partners (collectively, the “Greenlight Funds”).

Affiliates of DME Advisors presently serve as the general partner or the investment advisor of Greenlight Capital LP, Greenlight Capital Offshore, Ltd., GCOI Intermediate, LP, Greenlight Capital Offshore Master, Ltd., Greenlight Masters, LP, Greenlight Masters Qualified, LP, Greenlight Masters Offshore, Ltd., Greenlight Masters Offshore I, Ltd., Greenlight Masters Offshore Partners, Greenlight Masters Partners and several separately managed accounts (collectively, the “Greenlight Funds”).

We have agreed to use commercially reasonable efforts to cause all our current and future subsidiaries to enter into the SILP LPA.

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Under the SILP LPA, either GLRE Limited Partner 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

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.

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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.

Investment Strategy

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

These investment guidelines, 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.

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.

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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.

Investment Guidelines

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 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:

Other than cash, cash equivalents, United States government obligations, and gold, no single investment in its Investment Portfolio will constitute more than 10% of Greenlight Re Surplus.

Assets will be invested in such fashion that Greenlight Re has a reasonable expectation that it can meet any of its liabilities as they become due.

Greenlight Re will review with the Investment Advisor the liquidity of the portfolio on periodic basis.

● 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.

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

In any event, Greenlight Re’s pro-rata share of Assets (excluding cash equivalents) may not exceed 110% of its Investment Portfolio.

● Currency hedging activities are excluded from leverage calculations.

In addition to currency hedging, where the Investment Advisor enters into a secondary investment with the primary purpose of reducing the risk of another existing investment, then the investment advisor may exclude the secondary investment from the calculation of leverage provided that the Investment Advisor receives approval from Greenlight Re’s Chief Financial Officer.

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.

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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 (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, 2022, 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 “Part I, Item 1A.

Risk Factors – Risks Relating to Our Investment Strategy — SILP may be concentrated in a few large positions, which could result in investment volatility and large losses.”

Investment Results

The following table summarizes the investments as reported in the consolidated financial statements:

($ in thousands)

Investment in related party investment fund $ 178,197 71.7 % $ 183,591 79.5 %

Private investments and unlisted equities 62,433 25.1 47,049 20.4

Derivative financial instruments (not designated as hedging instruments) — — 335 0.1

Debt and convertible debt securities 1,846 0.8 — —

Certificates of deposit 6,000 2.4 — —

Total investments $ 248,476 100.0 % $ 230,975 100.0 %

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.

The following table represents the composition of SILP’s investments at December 31, 2022 and 2021:

Long % Short % Long % Short %

Debt instruments 0.6 % — % 1.1 % — %

Equities and related derivatives 84.4 49.7 79.1 45.0

Private and unlisted equity securities 3.2 — 4.0 —

Total 88.2 % 49.7 % 84.2 % 45.0 %

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, 2022, SILP’s exposure to gold on a delta-adjusted basis was 15.2% (2021:

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The following table represents the composition of SILP by industry sector at December 31, 2022:

Sector Long % Short % Net %

Communication Services 0.9 % (3.9) % (3.0) %

Consumer Discretionary 29.8 (18.5) 11.3

Consumer Staples 0.8 (0.6) 0.2

Energy 13.0 (0.2) 12.8

Financial 13.8 (3.4) 10.4

Healthcare 6.8 (6.6) 0.2

Industrials 3.3 (4.2) (0.9)

Materials 7.6 — 7.6

Real Estate 0.3 (2.3) (2.0)

Technology 10.3 (9.7) 0.6

Utilities 0.3 (0.3) —

Other 1.3 — 1.3

Total 88.2 % (49.7) % 38.5 %

The following table represents the composition of our investments in SILP, by the market capitalization of the underlying security, at December 31, 2022:

Capitalization Long % Short % Net %

Mega Cap Equity (≥$25 billion) 12.6 % (14.8) % (2.2) %

Large Cap Equity (≥$10 billion and <$25 billion) 5.8 (9.3) (3.5)

Mid Cap Equity (≥$2 billion and <$10 billion) 43.5 (20.0) 23.5

Small Cap Equity (<$2 billion) 22.5 (5.6) 16.9

Debt Instruments 0.6 — 0.6

Other Investments 3.2 — 3.2

Total 88.2 % (49.7) % 38.5 %

Investment Returns

Investment returns for SILP

In accordance with the SILP LPA, DME Advisors constructs a levered investment portfolio as agreed with the Company (the “Investment Portfolio” as defined in the SILP LPA).

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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 financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“U.S.

It is adjusted monthly for the Company’s net profits and net losses as reported by SILP during any intervening period.

It is adjusted monthly for our net profits and net losses as reported by SILP during any intervening period.

This basis was increased to 60% effective January 1, 2023.

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

Innovation-related Investments

As previously noted, we make strategic investments in promising private insurtech companies, subject to investment guidelines as approved by our Board of Directors, in addition to providing reinsurance capacity on a case by case basis.

These private investments consist primarily of unlisted equities (mostly preferred shares) and debt instruments.

Risk Factors - Risks Relating to Our Innovations Strategy - Investments in privately held early-stage companies involve significant risks.

For further information about our total investments and investment income, refer to “Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Financial Condit ion ” and “Note 3 - Investments in Related Party Investments Fund and Note 4 - Other Investments ” of the consolidated financial statements.

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Internal Risk Management

Our Chief Risk Officer is responsible for constructing and reviewing our internal risk management function.

A primary objective of our risk management function is to ensure that our underwriting efforts comply with explicitly stated underwriting appetites.

We design these appetites to balance our risk position size with our expertise and the available margins while containing the cost of incorrectly assessing risks and rewards.

In doing so, our risk management function designs, implements, and oversees a range of operational and underwriting controls to support the organization.

We frequently review our investment and underwriting portfolios to assess the impact on capital under stressed scenarios.

Enterprise Risk Management

Enterprise risk management (“ERM”) is at the core of our corporate culture and is a shared responsibility across all business functions.

Our ERM processes are in place to accurately identify, assess, manage, and monitor risks in line with our strategic objectives and risk appetite.

We maintain an Executive Risk Committee (ERC) which oversees the ERM function and is responsible for the design and review of risk management framework (RMF).

The ERC is chaired by the Chief Risk Officer (CRO), with the Chief Executive Officer (CEO), Chief Financial Officer (CFO), GRIL Chief Executive Officer Ireland, and Chief Actuary as members.

The Board of Directors approves the RMF on an annual basis or as appropriate.

The RMF sets out the risk management roles and responsibilities for all stakeholders across the organization, and sets the quantitative and qualitative metrics of our risk appetite, risk monitoring, and risk mitigation measures.

The CRO collates risk metrics from risk owners on at least a quarterly basis and presents a risk grid to the ERC and the Audit Committee of the Board of Directors.

One of the key objectives of our ERM function is to ensure that our underwriting efforts comply with explicitly stated underwriting appetite.

We establish limits to balance our risk position size with our expertise while containing the cost of incorrectly assessing risks and rewards.

We believe that an informed, disciplined risk selection approach ties directly into our business strategy.

To achieve this, we encourage a collaborative, open work environment and group decision making.

We closely monitor our accumulations of exposure and frequently review our investment and underwriting portfolios to assess the impact on capital under stressed scenarios.

With the assistance of DME Advisors, we analyze our investment assets and liabilities, including the numerous risk components in our portfolio, such as concentration and liquidity risks.

Information Technology

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 that we can restore it promptly as needed.

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 mean time to restore.

We strive to encourage a culture of operational risk management, providing training and resources to all staff, maintaining robust business continuity protocols, and establishing HR practices to motivate and retain talent.

We maintain and closely monitor our outsourcing, regulatory, and anti-money laundering policies and procedures.

We recognize the impact of environmental, social, and governance (ESG) risks across the organization and have formed the Sustainability Management Committee to address these, working closely with members of the ERC.

Information Technology (“IT”)

We employ a cloud-centric IT strategy, which allow us to scale our infrastructure dynamically based on demand.

The strategy prioritizes the use of cloud services for hosting applications, data storage, and other IT resources.

With the use of cloud-based services, our security and systems reliability have proven cost-effective and have provided the required levels of service and redundancy.

We have implemented backup procedures to ensure that key services are saved daily and can be restored as needed.

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

We conduct regular disaster recovery testing, and can access our core systems with minor outages and restore our primary systems within our mean time to restore (MTTR).

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 within our network.

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

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

We regularly provide security risk awareness education and training to our staff and to the Board of Directors.

Despite these efforts, computer viruses, hackers, employee misuse or misconduct, and other internal or external hazards could expose our data systems to security breaches, cyber-attacks, or other disruptions.

See “Item 1A.

Risk Factors — Risks Related to Our Business — Operational risks, including human or systems failures, are inherent in our business.

Refer to “Item 1C.

Cybersecu rity ” for more information on our cybersecurity risk management.

See “Part I, Item 1A.

Risk Factors — Risks Related to Our Business — Modeling risks are inherent in our business.

” and “— Technology breaches or failures, including those resulting from a malicious ransomware or cyber-attack on us or our business partners and service providers, could disrupt or otherwise negatively impact our business .

Human Capital

At March 3, 2023, we had 48 full-time employees, 31 of whom were based in Grand Cayman, Cayman Islands, 12 in Dublin, Ireland, and 5 in London, United Kingdom.

We believe that our employee relations are good.

None of our employees are subject to collective bargaining agreements, and we are not aware of any current efforts to implement such agreements.

We also engage consultants and contract with third parties, as needed, to provide additional resources to support our business activities.

We are committed to advancement and innovation through investing in our employees’ professional development.

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Human Capital Management

Human Capital Resources Oversight

Our employees are our most valuable asset and are core to our success.

We are focused on building a performance and results-driven culture, which strives to get the best out of all employees and to help them to maximize their full potential.

We believe in fostering an open and collaborative culture that encourages employees to take ownership of their performance and development.

Our executive management team is committed to creating an environment where every employee can succeed.

The Compensation Committee of our Board of Directors is actively engaged in the oversight of our employees, work environment, and compensation practices and receives regular updates from management on progress and developments.

Diversity, Equity, and Inclusion (“DEI”) Initiatives

DEI is core to our culture and business.

We believe an inclusive and diverse workforce contributes different perspectives that enable us to continue to succeed.

We strive to create an environment of inclusion that is grounded in the strength and diversity of our employees.

As of December 31, 2023, 43% of our total global employees were female.

In January 2024, we conducted a survey completed by 80% of our employees, with approximately 39% of employees identifying as racially or ethnically diverse.

At March 1, 2024, we had 64 total employees worldwide, 36 of whom were based in Grand Cayman, Cayman Islands, 16 in Dublin, Ireland, and 12 in London, United Kingdom.

From time to time, we also engage consultants and contract with third parties, as needed, to provide additional resources to support our business activities.

Talent Development

We recognize that our strength lies in our people and therefore we strive to hire talented people and invest significantly in our employees’ professional development and personal growth.

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

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

We also invest in the professional growth of our leaders through customized executive coaching to build advanced skills and capabilities.

Compensation Practices

We have designed our performance-driven compensation policy to attract, motivate, reward and retain the best people.

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.

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

We believe in creating and maintaining a workplace free from discrimination and harassment.

Work Environment

We are committed to the health, safety and wellness of our workforce, including maintaining a workplace free from discrimination and harassment.

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.

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Additional Information

Our website address is www.greenlightre.com, and we make available, free of charge, on or through our website, links to our annual reports on Form 10-K and quarterly reports on Form 10-Q, current reports on Form 8-K, and other documents we file with or furnish to the SEC, as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.

Our website address is www.greenlightre.com, and we make available, free of charge, on or through our website, links to our Annual Reports, quarterly reports on Form 10-Q, current reports on Form 8-K, and other documents we file with or furnish to the SEC, as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.

Information contained on our website is not incorporated by reference into this Annual Report.

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Glossary of Selected Reinsurance Terms

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

Delegated authority

A contractual arrangement between an insurer or reinsurer or an agent whereby the agent is authorized to bind insurance or reinsurance on behalf of the insurer or reinsurer.

The authority is generally limited to a particular class or classes of business and a particular territory.

The exercise of the authority to bind insurance or reinsurance is generally subject to underwriting guidelines and other restrictions such as maximum premium income.

Under the delegated authority, the agent is responsible for issuing policy documentation, the collection of premium and may also be responsible for the settlement of claims.

Deposit assets and liabilities Assets (or liabilities) representing the consideration paid (or received) in connection with contracts that do not incorporate sufficient risk transfer to merit reinsurance accounting.

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Retrocessional reinsurance does not legally discharge the ceding reinsurer from its liability with respect to its obligations to the reinsured.

A term used to denote the physical units of property at risk or the object of insurance protection that are not perils or hazards.

Also defined as chance of loss or uncertainty of loss.

Risk-free rate The interest rate on a riskless or safe asset, usually taken to be a short-term U.S.

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

System and Organizational Controls (SOC) 2 Type II Report (“SOC 2 Report”)

It is a reporting framework developed by the American Institute of Certified Public Accountants (“AICPA”) for independent audits of controls over information and systems relevant to security, availability, processing integrity, confidentiality, and privacy.

A member or group of members underwriting (re)insurance business at Lloyd’s through the agency of a managing agent or substitute agent to which a syndicate number is assigned.

A reinsurance agreement covering a book or class of business that is automatically accepted on a bulk basis by a reinsurer.

A treaty contains common contract terms along with a specific risk definition, data on limit and retention, and provisions for premium and duration.

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

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Underwriting The process of evaluating, defining, and pricing reinsurance risks including, where appropriate, the rejection of such risks, and the acceptance of the obligation to pay the reinsured under the terms of the contract.

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

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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.

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What changed 10-K

Item 1. Business