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Item 7. Management’s Discussion and Analysis

2025-03-10 compared with 2024-03-05 · 472 added, 408 removed, 309 unchanged (74% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management’s discussion and analysis (“MD&A”) of our results of operations for the years ended December 31, 2023, and 2022, and our financial condition at December 31, 2023 and 2022.

This discussion should be read in conjunction with “Part II, Item 8.

The following is management’s discussion and analysis (“MD&A”) of the financial condition and results of operations for the years ended December 31, 2024, and 2023.

Except for the “ Results by Segment” section of this MD&A, comparisons between 2023 and 2022 have been omitted from this Annual Report, but may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC.

Accordingly, this information is incorporated by reference.

This discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto presented in “Part II, Item 8.

Financial Statements and Supplementary Data ” of this Annual Report.

Unless otherwise noted, tabular dollars are in thousands, except per share amounts.

Amounts may not reconcile due to rounding differences.

Business Overview

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Consolidated Results of Operations

Results by Segment

Open Market Segment

Innovations Segment

Other Corporate

Runoff Underwriting Business

Income from Investment in Solasglas

Financial Condition

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Critical Accounting Estimates

Premium Revenues

Loss and Loss Adjustment Expense Reserves

For the discussion and analysis of our results of operations and changes in financial condition for the year ended December 31, 2022 compared to the year ended December 31, 2021, refer to our 2022 Annual Report.

All amounts are reported in U.S.

dollars, unless otherwise noted.

Tabular dollars are presented in thousands, with the exception of per share amounts or as otherwise noted.

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Premium Recognition

Loss and LAE Reserves

Investments Valuation

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Business Overview

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Business ” for additional information.

We earned a net income of $86.8 million for the year ended December 31, 2023, an increase of $61.5 million, or 243% over the prior year, as a result of favorable reinsurance pricing conditions with lower losses from catastrophe and weather-related events (collectively referred as “CAT losses”), coupled with favorable rising interest rate environment for our cash and fixed maturity investments (relating to the Lloyd’s syndicates) as well as favorable foreign exchange movement in 2023.

We earned a net income of $42.8 million for the year ended December 31, 2024, a decrease of $44.0 million, or 51% compared to the prior year, predominantly due to higher losses from catastrophe and weather-related events (collectively referred as “CAT losses”), coupled with unfavorable foreign exchange movement in 2024.

The following is a summary of our financial performance for the year ended December 31, 2024, compared to the prior year:

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• Net premiums earned was $620.0 million, an increase of 6.3%;

• Net underwriting income (1) was $32.0 million, compared to an underwriting loss of $10.7 million;

• Total investment income was $66.1 million, a decrease of 4.2% (include 9.4% net return from our investment in SILP, compared to 25.3%);

• Diluted EPS was $2.50, an increase of 242%;

• Fully diluted book per share (1) was $16.74, an increase of 16.8%.

(1) See “ Key Financial Measures and Non-GAAP Measures ” section of this MD&A.

• Net underwriting loss was $8.2 million, compared to net underwriting income of $32.0 million;

• Total investment income was $79.6 million, an increase of 10.3% (including 9.8% net return from our investment in Solasglas, compared to 9.4%);

• Foreign exchange losses were $5.6 million, compared to foreign exchange gains of $11.6 million;

• Diluted EPS was $1.24, compared to $2.50, a decrease of 50%;

• Fully diluted book value per share was $17.95, an increase of $1.21, or 7.2%.

Outlook and Trends

Following strong pricing improvements at the January 1, 2023 renewal season and throughout 2023 (primarily in property catastrophe, aviation, war and terror and marine), we witnessed a more disciplined but still attractive January 1, 2024 renewal season.

In the property market we noted additional capacity entering the market, but we still saw favorable market conditions to grow our book.

On our Specialty and FAL books, we noted a healthy amount of competitive interest but we were successful in securing the accounts we targeted for both renewal and new business with some modest rate increases.

The global inflationary pressures have abated from their recent highs.

However, we believe loss cost inflation will continue to be a significant concern within the (re)insurance industry, as it can add uncertainty to the cost of claims, particularly for classes of business with long payout tails.

As a result, it creates pricing challenges for new business and valuation challenges in claims reserves.

We continue to manage these concerns and risks in multiple ways:

• Our underwriting strategy focuses on relatively shorter-tailed business, which is inherently less exposed to inflation than longer-tailed lines.

We estimate the payout duration of our existing reserves at less than three years.

• We incorporate inflation assumptions in all our pricing and reassess these assumptions frequently.

• We are minimizing our exposure to classes that are experiencing severe supply-chain-driven inflation.

The rising interest rate environment over the last two years has had a mixed impact on our financial results.

The Term Loans we secured in 2023 are partially exposed to fluctuations in the SOFR interest rate, and we stand to benefit if the interest rates start decreasing.

The higher interest rates have improved the yield on our restricted cash and cash equivalents and our funds held at Lloyd’s.

To the extent interest rates begin to decrease, we may see some of these trends reverse.

The SILP investment portfolio is positioned to benefit from an inflationary environment.

Reinsurance market conditions

As the key January 1, 2025, renewal period progressed, we saw increased competition which put pressure on headline rate;

however, attachment points and other terms & conditions largely held firm.

We were able to achieve signings to construct a diversified portfolio that met our risk appetite and profitability requirements.

Looking forward to 2025, we believe that market conditions are still broadly, but not uniformly, positive.

We will continue to write business where we believe the price adequately compensates us for the risk.

General economic conditions

There are many factors contributing to an uncertain global economic outlook, and in particular, we believe that inflationary trends of recent years could persist.

We continue to consider the potential impact of relevant economic factors on our underwriting portfolio.

On the investment side, DME Advisors regularly monitors and re-positions Solasglas’ investment portfolio to manage the impact of inflation on its underlying investments and holds macro positions to benefit from a rising inflationary environment.

Revenues and Expenses

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• premiums from reinsurance on property and casualty business assumed (net of any premiums ceded) - see “ Critical Accounting Estimates ” section of this MD&A;

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• income from investments, including:

• income (or loss) generated from our investment in SILP, net of management fee and performance compensation;

• income (or loss) generated from our investment in Solasglas, net of management fee and performance compensation;

• gains (or losses) from our other investments, including Innovations-related investments;

• interest income on our cash and cash equivalents and FAL.

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In addition, we may from time to time derive other income from foreign exchange gains (or losses) relating to underwriting balances, net investment income from Lloyd’s syndicates, fees generated from advisory services, and fees relating to overrides, profit commissions, and fees due upon the early termination of contracts.

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● acquisition costs;

● general and administrative (“G&A”) expenses;

● underwriting expenses

● corporate and other expenses;

● interest expense on deposit-accounted contracts and debt.

The extent of our net losses and LAE incurred is a function of the amount and type of reinsurance contracts we write and the loss experience of the underlying coverage.

Refer to “ Critical Accounting E stimates ” section of this MD&A.

Refer to “ Critical Accounting Estimates ” section of this MD&A.

Acquisition costs consist primarily of brokerage fees, ceding commissions, premium taxes, profit commissions, letters of credit and trust fees, and federal excise taxes.

We amortize deferred acquisition costs relating to successfully bound reinsurance contracts over the related contract term.

General and administrative expenses consist primarily of salaries and benefits and related costs, including costs associated with our incentive compensation plan, bonuses, and stock compensation expenses.

General and administrative expenses also include professional fees (non-claim related), travel and entertainment, information technology, rent, and other general operating costs.

General and administrative expenses reported in our consolidated statements of operations include both underwriting and corporate expenses.

Underwriting expenses consist primarily of compensation costs related to our underwriting activities, in addition to an allocation of corporate overhead costs.

Corporate and other expenses consist primarily of compensation costs related to non-underwriting activities, including Innovations related investments and corporate personnel.

Additionally, these also include professional fees (non-claim related), travel and entertainment, information technology, rent, and other general operating costs, net of an allocation to underwriting expenses.

Deposit interest expense relates to the accretion costs for deposit-accounted contracts that did not meet the risk transfer condition for reinsurance accounting under U.S.

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Non-GAAP financial measures should not be viewed as substitutes for those determined under U.S.

The key non-GAAP financial measures used in this Annual Report are:

• Fully diluted book value per share;

• Net underwriting income (loss).

These non-GAAP financial measures are described below.

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We use the following non-GAAP financial measure in this Annual Report.

Fully Diluted Book Value Per Share

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GAAP measure, which in our view is the basic book value per share.

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We calculate basic book value per share as (a) ending shareholders' equity, divided by (b) the total ordinary shares issued and outstanding, as reported in the consolidated financial statements.

In prior years, we calculated the basic book value per share by modifying the denominator to exclude unearned performance-based restricted shares granted after December 31, 2021.

We have revised this calculation in 2023 to eliminate the basic book value per share non-GAAP financial measure and have restated the 2022 comparative basic book value per share in the table below and elsewhere in this Annual Report to conform with the current presentation.

Fully diluted book value per share represents basic book value per share combined with any dilutive impact of in-the-money stock options and all outstanding restricted stock units “RSUs”.

Fully diluted book value per share represents basic book value per share combined with any dilutive impact of in-the-money stock options and all outstanding restricted stock units, or “RSUs”.

We believe these adjustments better reflect the ultimate dilution to our shareholders.

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GAAP financial measure):

December 31, 2023 December 31, 2022

December 31, 2024 December 31, 2023 December 31, 2022

Numerator for basic and fully diluted book value per share:

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Increase in basic book value per share (%)

8.2 % 16.8 % 2.8 %

Fully diluted book value per share $ 17.95 $ 16.74 $ 14.33

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Increase in fully diluted book value per share (%)

Net Underwriting Income (Loss)

One way that we evaluate the Company’s underwriting performance is by measuring net underwriting income (loss).

We do not use premiums written as a measure of performance.

Net underwriting income (loss) is a performance measure used by management to evaluate the fundamentals underlying the Company’s underwriting operations.

We believe that the use of net underwriting income (loss) enables investors and other users of the Company’s financial information to analyze our performance in a manner similar to how management analyzes performance.

Management also believes this measure follows industry practice and allows the users of financial information to compare the Company’s performance with that of our industry peer group.

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Net underwriting income (loss) is considered a non-GAAP financial measure because it excludes items used to calculate net income before taxes under U.S.

We calculate net underwriting income (loss) as net premiums earned less net loss and loss adjustment expenses, acquisition costs, underwriting expenses (including related G&A expenses), and deposit interest expense.

The measure excludes, on a recurring basis:

(1) investment income (loss);

(2) other income (expense) not related to underwriting, including foreign exchange gains or losses, and Lloyd’s interest income and expense;

(3) corporate G&A expenses;

and (4) interest expense.

We exclude total investment income or loss, foreign exchange gains or losses, and Lloyd’s interest income or expense as we believe these items are influenced by market conditions and other factors unrelated to underwriting decisions.

Additionally, we exclude corporate G&A and interest expenses because these costs are generally fixed and not incremental to or directly related to our underwriting operations.

We believe all of these amounts are largely independent of our underwriting process, and including them could hinder the analysis of trends in our underwriting operations.

Net underwriting income (loss) should not be viewed as a substitute for U.S.

GAAP net income before income taxes.

The reconciliations of net underwriting income (loss) to income (loss) before income taxes (the most directly comparable U.S.

GAAP financial measure) on a consolidated basis are shown below:

Year ended December 31

Income (loss) before income tax $ 86,930 $ 24,526

Add (subtract):

Total investment (income) loss (66,063) (68,983)

Other non-underwriting (income) expense (17,872) 11,777

Corporate expenses 23,653 17,793

Interest expense 5,344 4,201

Net underwriting income (loss) $ 31,992 $ (10,686)

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7.2 % 16.8 % 2.4 %

(1) Assuming net exercise by the grantee.

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Consolidated Results of Operations

The table below summarizes our consolidated operating results for the years ended December 31:

Underwriting revenue

The table below summarizes our consolidated operating results.

2024 2023 Change

Underwriting results:

Gross premiums written $ 698,335 $ 636,810 $ 61,525

Gross premiums ceded (42,762) (33,429)

Net premiums written $ 621,265 $ 594,048 $ 27,217

Change in net unearned premium reserves (10,901) (60,265)

Net premiums earned $ 619,954 $ 583,147 $ 36,807

Underwriting related expenses

Net loss and loss adjustment expenses incurred:

Net loss and LAE incurred:

(406,465) (348,798) (57,667)

Prior year (1)

Net loss and loss adjustment expenses incurred 360,004 316,485

(20,804) (11,206) (9,598)

Net loss and LAE incurred

(427,269) (360,004) (67,265)

Acquisition costs (176,775) (168,877) (7,898)

Underwriting expenses (22,857) (19,587) (3,270)

Deposit interest expense 2,687 6,717

Deposit interest income (expense), net

(1,228) (2,687) 1,459

Net underwriting income (loss)

(8,175) 31,992 (40,167)

Income from investment in SILP 28,696 54,844

Investment results:

Income from investment in Solasglas 33,605 28,696 4,909

Net investment income 45,954 43,408 2,546

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79,559 72,104 7,455

Corporate expenses 23,653 17,793

Corporate and other expenses (16,377) (23,653) 7,276

Foreign exchange gains (losses) (5,606) 11,566 (17,172)

Other (income) expense, net (6,306) 5,789

Other income, net — 265 (265)

Interest expense (5,836) (5,344) (492)

Income tax expense (benefit) 100 (816)

Income tax expense (749) (100) (649)

Net income $ 42,816 $ 86,830 $ (44,014)

Earnings per share:

Basic $ 2.55 $ 0.75

Diluted $ 2.50 $ 0.73

Diluted earnings per share

$ 1.24 $ 2.50 $ (1.26)

Underwriting ratios:

Loss ratio - current year 59.8 % 67.4 %

Loss ratio - prior year 1.9 % — %

Current year attritional loss ratio

56.3 % 54.9 % 1.4 %

CAT loss ratio

9.3 % 4.9 % 4.4 %

Current year loss ratio

65.6 % 59.8 % 5.8 %

Prior year reserve development ratio

3.4 % 1.9 % 1.5 %

Loss ratio 69.0 % 61.7 % 7.3 %

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Combined ratio 101.4 % 94.5 % 6.9 %

1 The net financial impacts associated with changes in the estimate of losses incurred in prior years, which incorporate earned reinstatement premiums assumed and ceded, adjustments to assumed and ceded acquisition costs, and deposit interest expense, were a loss of $15.7 million in 2023 (2022:

1 The net financial impact associated with changes in the estimate of losses incurred in prior years, which incorporates earned reinstatement premiums assumed and ceded, adjustments to assumed and ceded acquisition costs, and deposit interest income and expense, was a loss of $21.8 million in 2024 (2023:

$15.7 million) .

2 Net underwriting income (loss) is a non-GAAP financial measure.

See “ Key Financial Measures and Non-GAAP Measures ” above for discussion and reconciliation of non-GAAP financial measures.

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The following provides further details on the significant variances for the year ended December 31, 2023, compared to 2022 .

For the year ended December 31, 2023, fully diluted book value per share increased by $2.41, or 16.8%, to $16.74 per share and basic book value per share increased by $2.42, or 16.8%, to $16.87 per share since December 31, 2022 driven by strong underwriting performance.

For the year ended December 31, 2023, our net income increased by $61.5 million to $86.8 million, driven mainly by the following:

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Consolidated Results of Operations for 2024 compared to 2023

Basic book value per share increased by $1.39 per share, or 8.2%, to $18.26 per share from $16.87 per share at December 31, 2023.

Fully diluted book value per share increased by $1.21 per share, or 7.2%, to $17.95 per share from $16.74 per share at December 31, 2023.

For the year ended December 31, 2024, net income decreased by $44.0 million to $42.8 million, driven mainly by the following:

• Underwriting income :

Increased by $42.7 million to $32.0 million, primarily driven by combined ratio improving 7.8 percentage points mainly due to lower CAT losses and favorable pricing in 2023, partially offset by an increase in adverse loss development from prior years.

For further information on CAT losses and prior year loss development, refer to Note 7 - Loss and Loss Adjust ment Expense Rese rves of the consolidated financial statements.

Decreased by $40.2 million due to 6.9 percentage points increase in our combined ratio, driven predominantly by an increase in current year attritional and CAT loss ratios.

Refer to the “ Results by Segment ” section of the MD&A for further discussion and analysis.

• Investment income :

Declined by $2.9 million to $66.1 million.

While we benefited from the rising U.S.

interest rates on our cash and short-term investment holdings, this was offset by a decline in SILP’s net income.

SILP generated a net return of 9.4% in 2023, compared to 25.3% in 2022.

• Foreign exchange gains :

Increased by $17.6 million driven mainly by the strengthening of the U.S.

dollar over the pound sterling.

• Other income :

Increased by $12.1 million driven primarily by an increase in investment income on funds withheld by third party Lloyd’s syndicates.

The Lloyd’s syndicates invest a portion of these funds in fixed-maturity securities and investment funds.

Increased by $7.5 million primarily driven by an increase in income from our investment in Solasglas, which reported a gain of $33.6 million in 2024, compared to $28.7 million in 2023.

Solasglas generated a net return of 9.8% for the year ended December 31, 2024, compared to a net return of 9.4% for the same period in 2023.

Additionally, we earned additional investment income on funds withheld by third party Lloyd’s syndicates.

The Lloyd’s syndicates invest a portion of these funds in fixed maturity securities, equities, and investment funds.

We record our share of the investment income and fair value adjustments on these securities when the syndicates report them to us, generally on a quarter in arrears.

• Corporate expenses :

Increased by $5.9 million primarily driven by $4.3 million of severance relating to the separation agreement entered with our former CEO.

For further details, see “Separation Agreement with CEO” in Note 15 - “ Related Part y Tran sactions ” in the consolidated financial statements.

Underwriting Results by Segment

For our Property and Casualty Reinsurance segment, we analyze it based on three lines of business:

“property,” “casualty,” and “other.”

Gross Premiums Written

Details of gross premiums written are provided in the following table:

See Note 13 “ Net Investme nt Income ” of the consolidated financial financial statements for further details.

• Corporate and other expenses :

Decreased by $7.3 million mainly due to non-recurring severance costs included in 2023, including $4.3 million relating to the separation agreement entered with our former CEO, and lower incentive compensation costs in light of the Company’s weaker performance in 2024.

This was partially offset by the increase in other non-underwriting personnel and overhead costs in addition to technology investment to support the business growth.

• Foreign exchange gains (losses) :

$5.6 million foreign exchange losses for 2024, compared to $11.6 million foreign exchange gains for 2023, driven mainly by a weaker pound sterling movement against the U.S.

dollar in 2024.

• Interest expense :

Increased by $0.5 million primarily due to unfavorable fair value movement on the interest rate swaps used to partially hedge the Term Loans;

offset partially by lower interest expense driven by a decrease in the average outstanding Term Loans balance in 2024.

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Results by Segment

During the fourth quarter of 2024, we have revised our operating segments to Open Market and Innovations.

See Note 17 “ Segment R eporting ” for the consolidated segment net income before taxes in 2024, including a reconciliation to net income as reported under U.S.

Comparatives have been recast to conform with the new reportable segments.

The following is a further discussion and analysis for each reporting segment.

Open Market Segment

Results for the Open Market segment were as follows:

Year ended December 31,

Property $ 113,291 17.8 % $ 85,323 15.2 %

Casualty 351,037 55.1 325,103 57.7

Other 172,482 27.1 152,745 27.1

Total $ 636,810 100.0 % $ 563,171 100.0 %

As a result of our underwriting philosophy, the total premiums we write and the mix of premiums between property, casualty, and other business, may vary significantly from period to period depending on the market opportunities we identify.

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Our gross premiums written increased by $73.6 million, or 13.1%, compared to the same period in 2022.

The following table provides a further analysis of this overall increase:

2024 % Change

2023 % Change

Gross premiums written

Year ended December 31, 2023

Increase (decrease)

($ in millions) % change Explanation

Property $28.0 32.8% The increase was driven from growth in our Commercial class, mainly due to new quota share treaties bound in mid-2022 and new Innovations contracts via Syndicate 3456 in 2023.

This resulted in a change in business mix for Property, predominantly with Commercial and Personal which accounted for 46% and 54%, respectively, of total Property, compared to 17% and 80%, respectively, for the same period in 2022.

Casualty $25.9 8.0% The increase was driven mainly from growth in General Liability, Professional Liability, and Motor Liability from new contracts and premiums written from quota share treaties bound in 2022.

This growth was partially offset by a reduction in the Workers’ Compensation class, where we have significantly reduced our appetite for quota share treaties beginning in 2022, coupled with a premium decrease in the Multi-line class.

As a result, the business mix within our Casualty line of business has shifted between General Liability and Multi-line classes, accounting for 27% and 62% of total Casualty, respectively, compared to 19% and 69%, respectively, in same period in 2022.

Other $19.7 12.9% The increase was driven mainly by new contracts within our Marine class and Other Specialty class, primarily in energy, aviation and cyber risk.

This was partially offset by a reduction in premiums from our Financial class, predominantly due to lower merger and acquisition activity in 2023 impacting premium from transactional liability programs, partially offset by new premiums from credit and surety contracts.

As a result, the change in business mix was follows:

Other Specialty, Financial, and Marine represented 45%, 33%, and 18%, respectively, compared to 36%, 44%, and 15%, respectively, for the same period in 2022.

Premiums Ceded

For the year ended December 31, 2023, ceded premiums were $42.8 million, or 6.7% of gross premiums written, compared to $33.4 million, or 5.9% of gross premiums written, for the year ended December 31, 2022.

The increase was mainly due to purchasing an aviation quota share retrocession coverage, as well as an additional $10.0 million excess of loss coverage to manage our exposure to marine and energy.

$ 603,798 19.7 % $ 504,435 11.5 % $ 452,541

Net premiums written

Details of net premiums written are provided in the following table:

Year ended December 31

Property $ 94,651 15.9 % $ 67,680 12.8 %

Casualty 337,111 56.7 315,935 59.6

Other 162,286 27.3 146,127 27.6

$ 541,446 16.1 % $ 466,544 6.6 % $ 437,799

Net premiums earned

$ 511,922 9.7 % $ 466,751 13.6 % $ 410,877

Net loss and LAE incurred

(341,586) (262,290) (268,659)

Acquisition costs

(144,852) (136,356) (125,296)

Other underwriting expenses

(19,175) (16,827) (11,867)

Deposit interest expense, net

(1,228) (2,687) (6,717)

Underwriting income (loss)

5,081 48,591 (1,662)

Net investment income

42,629 14.1 % 37,351 662.6 % 4,898

Income before income taxes

$ 47,710 $ 85,942 $ 3,236

Underwriting ratios:

2024 % Point Change

2023 % Point Change 2022

66.7 % 10.5 % 56.2 % (9.2) % 65.4 %

Acquisition cost ratio

28.3 % (0.9) % 29.2 % (1.3) % 30.5 %

Composite ratio

95.0 % 9.6 % 85.4 % (10.5) % 95.9 %

Underwriting expenses ratio

4.0 % (0.2) % 4.2 % (0.3) % 4.5 %

Combined ratio

99.0 % 9.4 % 89.6 % (10.8) % 100.4 %

Gross Premiums Written

Gross premiums written by line of business were as follows:

2024 2023 2022 2024 to 2023 2023 to 2022

$ 92,471 15.3 % $ 86,081 17.1 % $ 82,524 18.2 % 7.4 % 4.3 %

63,679 10.5 % 46,296 9.2 % 63,452 14.0 % 37.5 % (27.0) %

217 — % 224 — % 227 0.1 % (3.1) % (1.3) %

181,140 30.0 % 198,037 39.3 % 205,743 45.5 % (8.5) % (3.7) %

87,922 14.6 % 75,820 15.0 % 31,347 6.9 % 16.0 % 141.9 %

178,369 29.6 % 97,977 19.4 % 69,248 15.3 % 82.1 % 41.5 %

Total $ 603,798 100.0 % $ 504,435 100.0 % $ 452,541 100.0 % 19.7 % 11.5 %

Our net premiums written increased by $64.3 million, or 12.1%, compared to the year ended December 31, 2022.

The movement in net premiums written resulted from the changes in gross premiums written and ceded during the periods.

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Gross premiums written in 2024 increased by $99.4 million or 19.7%, compared to 2023.

The increase was predominantly attributable to the following lines of business:

• Financial :

new excess of loss treaties in our financial multiline business and an increase in premium volume for our transactional liability business.

improved pricing in our commercial and property catastrophe business.

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• Specialty :

improved pricing and new customers in our marine and energy (M&E) business, including Lloyd’s whole account excess of loss treaties.

Additionally, there was an increase of $9.0 million in reinstatement premiums attributable to the 2024 CAT events, in particular for the Baltimore Bridge collapse.

The above was partially offset by the decrease in our multiline business, driven by two non-renewed FAL accounts on January 1, 2024;

offset by premium growth from the remaining third-party FAL business.

Gross premiums written in 2023 increased by $51.9 million or 11.5%, compared to 2022.

The increase was predominantly attributable to property and specialty lines due to improved pricing and new business.

This was partially offset mostly by a decrease in financial line predominantly due to lower level of activity in transactional liability business.

Net Premiums Written

Ceded premiums written in 2024 was $62.4 million, resulting in net premiums written of $541.4 million, compared to $37.9 million and $466.5 million, respectively, in 2023.

The increase in ceded premiums written of 64.6% was primarily within our specialty line driven by additional retrocessional coverage to manage our overall exposure to aviation, marine and energy classes of business and to reinstate certain retrocession excess of loss treaties in which the full coverage was presumed exhausted primarily from the Baltimore Bridge loss event in 2024 and the Russian-Ukraine conflict event in 2022.

Additionally, we had an increase in quota share retrocessions due to growth from inward property and M&E business.

Ceded premiums written in 2023 was $37.9 million, resulting in net premiums written of $466.5 million, compared to $14.7 million and $437.8 million, respectively, in 2022.

The increase in ceded premiums written of 157.0% was predominantly attributable to an increase in quota share retrocessions due to growth from inward property business.

Net Premiums Earned

Details of net premiums earned are provided in the following table:

Year ended December 31

Property $ 86,539 14.8 % $ 52,397 11.2 %

Casualty 331,196 56.8 289,820 61.7

Other 165,412 28.4 127,260 27.1

Net premiums earned by line of business were as follows:

2024 2023 2022

$ 89,213 17.4 % $ 82,365 17.6 % $ 78,160 19.0 % 8.3 % 5.4 %

56,903 11.1 % 56,195 12.0 % 56,952 13.9 % 1.3 % (1.3) %

217 — % 224 — % 5,507 1.3 % (3.1) % (95.9) %

191,849 37.5 % 205,573 44.0 % 196,974 47.9 % (6.7) % 4.4 %

49,262 9.6 % 35,853 7.8 % 20,781 5.1 % 37.4 % 72.5 %

124,477 24.4 % 86,541 18.6 % 52,503 12.8 % 43.8 % 64.8 %

Total $ 511,921 100.0 % $ 466,751 100.0 % $ 410,877 100.0 % 9.7 % 13.6 %

Net premiums earned increased by $113.7 million or 24.2%, compared to the prior year.

The change in net premiums earned is primarily a function of the amount and timing of net premiums written during the current and prior periods, coupled with the mix of business written in the form of excess of loss versus proportional contracts.

Loss and LAE Incurred, Net

Net premiums earned in 2024 increased by $45.2 million or 9.7%, compared to 2023.

Further, net premiums earned in 2023 increased by $55.9 million or 13.6%, compared to 2022.

The increase (decrease) in net premiums earned by line of business is relatively consistent with the trends noted for the gross premiums written.

The change is also influenced by the amount and timing of net premiums written during the current year and prior years, coupled with the business mix written in the form of excess of loss versus proportional contracts.

Additionally, within the financial line and certain specialty line classes, the gross premiums written are earned over multiple years, corresponding with the anticipated risk coverage period.

The components of the loss ratio were as follows:

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Year ended December 31,

2023 2022 Increase / (decrease) in loss ratio points

Current accident year loss ratio 59.8 % 67.4 % (7.6)

2024 % Point Change

2023 % Point Change

Current year:

Attritional loss ratio

56.8 % 4.6 % 52.2 % (5.0) % 57.2 %

7.0 % 3.7 % 3.3 % (5.7) % 9.0 %

Current year loss ratio

63.8 % 8.3 % 55.4 % (10.7) % 66.2 %

Prior year reserve development ratio

Loss ratio 61.7 % 67.4 % (5.7)

Current accident year loss ratio improved by 7.6 points for the year ended December 31, 2023, compared to the same period in 2022 primarily due to 3.6 points in lower CAT losses, coupled with favorable pricing and change in business mix in 2023.

For the year ended December 31, 2023, prior year adverse loss development was 1.9%, compared to a negligible amount in 2022.

Refer to Note 7 Loss and Loss Adjustment Expense Reserves to the consolidated financial statements for further details on prior year loss developments.

The following table provides a breakdown of net losses incurred by lines of business:

Year ended December 31

Property $ 62,266 17.3 % $ 40,885 12.9 %

Casualty 225,314 62.6 205,641 65.0

Other 72,424 20.1 69,959 22.1

Total $ 360,004 100.0 % $ 316,485 100.0 %

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The loss ratios by lines of business were as follows:

2.9 % 2.1 % 0.8 % 1.6 % (0.8) %

66.7 % 10.5 % 56.2 % (9.2) % 65.4 %

Current Year Loss Ratio

The current year loss ratio in 2024 increased by 8.3%, compared to 2023 due to:

• 4.6% increase in attritional loss ratio in 2024, driven mainly by higher reserve estimates for the growing in-force casualty, specialty and property lines of business.

• 3.7% increase in CAT losses, net of reinsurance, primarily attributable to more severe CAT loss events in 2024 including the Baltimore Bridge collapse and Hurricanes Helene and Milton, compared to one major CAT event in 2023 (the Mexican state-owned oil platform fire loss).

The current year loss ratio in 2023 decreased by 10.7%, compared to 2022 due to:

• 5.0% decrease in attritional loss ratio 2024, driven mainly by a change in business mix coupled with lower attritional loss estimates, principally on property and specialty lines of business that performed strongly;

• 5.7% decrease in CAT losses, net of reinsurance, primarily attributable to lower volume and less severe CAT loss events in 2023, compared to two major CAT events in 2022 (Hurricane Ian and the Russian-Ukrainian conflict).

Prior Year Reserve Development Ratio

Prior year reserve development ratio increased by 2.1% in 2024 compared to 2023, and by 1.6% in 2023 compared to 2022.

Refer to Note 7 Loss and LAE Reserves to the consolidated financial statements for further details on the lines of business and prior year development.

Acquisition cost ratio

The acquisition cost ratio decreased to 28.3% in 2024 from 29.2% in 2023, primarily due business mix and higher ratio of excess of loss contracts at lower commission rates than quota share reinsurance contracts;

partially offset by higher acquisition costs for certain 2023 and 2024 FAL business in our multiline business.

The acquisition cost ratio decreased to 29.2% in 2023 from 30.5% in 2022, primarily due to business mix and higher ratio of excess of loss contracts at lower commission rate than quota share reinsurance contracts.

Underwriting expense ratio

The underwriting expense ratio decreased marginally by 0.2% to 4.0% in 2024 compared to 2023, mainly due to an increase in net premiums earned, partially offset by an increase in personnel to support the business growth.

The underwriting expense ratio decreased marginally by 0.3% to 4.2% in 2023 compared to 2022, mainly due to lower interest expense on deposit-accounted contracts and an increase in net premiums earned.

This was partially offset by an increase in personnel to support the business growth.

Income before income taxes

The income before income taxes for Open Market decreased by $38.2 million to $47.7 million in 2024 compared to 2023, driven predominantly by lower underwriting profits;

partially offset by an increase in investment income on funds withheld by third party Lloyd’s syndicates.

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The income before income taxes for Open Market increased by $82.7 million to $85.9 million in 2023 compared to 2022, driven by strong underwriting profits;

coupled with an increase in investment income driven mostly by favorable interest rate environment.

Innovations Segment

Results for the Innovations segment were as follows:

Year ended December 31,

2023 2022 Increase / (decrease) in loss ratio points

Property 72.0 % 78.0 % (6.0) %

Casualty 68.0 71.0 (3.0)

Other 43.8 55.0 (11.2)

Total 61.7 % 67.4 % (5.7) %

The following provides further details on the change in 2023 vs.

Increase (decrease)

($ in millions) Increase / (decrease) in loss ratio points Explanation

Property $21.4 (6.0)% The increase in losses incurred is primarily due to 65.2% increase in net premiums earned, and to a lesser degree due to a higher dollar amount of current year CAT losses.

However, our loss ratio improved mainly due to a decrease of 4.7 loss ratio points from current CAT losses, in part due to higher premiums earned.

In 2023, the U.S.

severe storms losses and other CAT events contributed 19.3 loss ratio points to the Property loss ratio.

During the comparable period in 2022, CAT losses from Hurricane Ian, Typhoons Nanmadol and Hinnamnor, and Tennessee wildfires contributed 24.0 percentage points to the Property loss ratio.

Additionally, the Property loss ratio benefited by 2.1 percentage points due to an increase in favorable prior year CAT loss development for various underwriting years (2017 to 2022).

Casualty $19.7 (3.0)% The increase in losses incurred was primarily driven by the 14.3% increase in net premiums earned, coupled with an increase of $19.7 million or 5.5 loss ratio points in prior year loss development predominantly driven by attritional losses relating to motor, general liability, multiline, workers’ compensation and professional liability programs.

However, our Casualty business benefited by 5.1 loss ratio points from lower current year CAT losses, compared to 2022 when the Multi-line class was adversely impacted by Hurricane Ian.

Further, the overall decrease in loss ratio was also driven by the change in business mix.

We significantly grew General Liability and Multi-line classes at much lower loss ratios than the Workers’ Compensation class.

Other $2.5 (11.2)% Despite the 30.0% increase in net premiums earned, driven from growth in our Marine and Other Specialty classes, we had only a marginal increase in losses incurred for Other, primarily due to 8.2 loss ratio point improvement from prior year favorable loss development, and to a lesser extent, from lower CAT losses.

The prior year favorable loss development was predominantly from the following classes of business:

Mortgage, Transactional Liability, and Whole Account Marine and Energy.

See “ Critical Accounting Estimates , Loss and Loss Adjustment Expense Reserves ” in this MD&A and “Note 7.

L oss and Loss Adjustme n t Expense Reserves ” to the consolidated financial statements for additional discussion of our reserving techniques and prior year development of net claims and claim expenses.

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Acquisition Costs, Net

Our total acquisition costs increased by 18.0% to $168.9 million, compared to 2022, mainly due to growth in net premiums earned, offset partially by lower broker commissions from excess of loss contracts compared to proportional treaties.

For the year ended December 31, 2023, net profit commission expense of $14.8 million, (2022:

$16.0 million) was included in our total acquisition costs.

The acquisition cost ratios by line of business were as follows:

2023 2022 Increase / (decrease)

Property 18.7 % 22.2 % (3.5) %

Casualty 30.5 29.0 1.5

Other 31.3 37.4 (6.1)

Total 29.0 % 30.5 % (1.5) %

The following provides further details on the change in 2023 vs.

Increase / (decrease) in acquisition cost ratio points Explanation

Property (3.5)% The decrease was due primarily to the higher proportion of excess of loss contracts that have a lower ceding commission rate than proportional treaties.

Based on net premiums earned for Property, excess of loss contracts accounted for 10% compared to 6% in 2022.

Casualty 1.5% The marginal increase was due primarily to changes in our business mix, particularly with an increase in net premiums earned from General Liability, Professional Liability and Multi-line (including FAL) classes, which have higher ceding commission rates than the Workers’ Compensation business.

Other (6.1)% The decrease was driven primarily by change in business mix, coupled with a higher proportion of excess of loss contracts than proportional treaties.

Based on net premiums earned for Other, excess of loss contracts accounted for 23% compared to 18% in 2022.

Ratio Analysis

The following table provides our underwriting ratios by line of business:

Year ended December 31 Year ended December 31

Property Casualty Other Total Property Casualty Other Total

Loss ratio 72.0 % 68.0 % 43.8 % 61.7 % 78.0 % 71.0 % 55.0 % 67.4 %

2024 % Change

2023 % Change

Gross premiums written

$ 94,725 6.9 % $ 88,602 74.6 % $ 50,739

Net premiums written

$ 80,016 (4.3) % $ 83,608 76.7 % $ 47,328

Net premiums earned

$ 86,352 20.3 % $ 71,769 116.3 % $ 33,184

Net loss and LAE incurred

(51,939) (44,855) (23,151)

Acquisition costs

(27,151) (22,381) (11,111)

Other underwriting expenses

(3,682) (2,760) (1,946)

Underwriting income (loss)

3,580 1,773 (3,024)

Net investment income

702 (74.3) % 2,732 (72.3) % 9,869

Corporate and other expenses

(2,445) (20.6) % (3,080) (10.8) % (3,452)

Income before income taxes

$ 1,837 $ 1,425 $ 3,393

Underwriting ratios:

2024 % Point Change

2023 % Point Change 2022

60.1 % (2.4) % 62.5 % (7.3) % 69.8 %

Acquisition cost ratio

31.4 % 0.2 % 31.2 % (2.3) % 33.5 %

Composite ratio

Underwriting expense ratio 3.8 4.4

91.5 % (2.2) % 93.7 % (9.6) % 103.3 %

Underwriting expenses ratio

4.3 % 0.5 % 3.8 % (2.1) % 5.9 %

Combined ratio

Our underwriting expense ratio decreased by 0.6 points, compared to the same period in 2022, mainly due to 0.8 point reduction from lower interest expense on deposit-accounted contracts based on revised expectations of ultimate cash flows in 2023.

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The breakdown of our G&A expenses between under underwriting and corporate functions was as follows:

Year ended December 31

Underwriting expenses $ 19,587 $ 13,813

Corporate expenses 23,653 17,793

Total G&A expenses

95.8 % (1.7) % 97.5 % (11.7) % 109.2 %

G&A expenses increased by $11.6 million, or 36.8%, compared to the prior year.

The increase was driven by:

• Underwriting expenses:

Increased by $5.8 million, or 41.8%, mainly due to scaling up as we added to our talent pool, which contributed to the growth in gross premiums written in 2023.

Increase in allowance for credit losses relating to certain reinsurance balances receivable and loss recoverable also accounted for the increase in underwriting expenses.

The increase was partially offset by lower legal and other professional fees.

See above “Ratio Analysis” for a discussion on our underwriting expense ratio.

• Corporate expenses:

Increased by $5.9 million or 32.9%, driven mainly by $6.4 million of severance related costs compared to $1.1 million in the prior year.

The 2023 severance costs included a $1.5 million non-cash charge relating to the accelerated vesting of the former CEO’s restricted shares as well as the modified grant relating to his unvested performance-based restricted shares.

The remaining increase was mainly due to an increase in personnel costs, including an increase in accrued incentive compensation costs in light of the Company’s performance in 2023.

The incentive compensation cost for 2022 was nil due to the net underwriting loss.

This increase in corporate expenses was partially offset by lower D&O insurance expense.

Total Investment Income

Total investment income incorporates (i) changes in the net asset value of our investment in SILP, (ii) interest income earned on cash and cash equivalents, including the restricted funds pledged as collateral to our clients, and (iii) gains (or losses) and interest on our portfolio of Innovations investments.

We expect our total investment income, including any change in the net asset value of our investment in SILP, to fluctuate from period to period.

A summary of our total investment income is as follows:

Year ended December 31

Interest and dividend income, net of withholding taxes and other expenses $ 35,629 $ 4,466

Net realized and unrealized gains on other investments (see Note 4) 1,738 9,673

Net investment-related income

Gross Premiums Written

Gross premiums written by line of business were as follows:

2024 2023 2022 2024 to 2023 2023 to 2022

$ 24,843 26.2 % $ 19,447 21.9 % $ 5,653 11.1 % 27.7 % 244.0 %

Share of SILP's net income (see Note 3) 28,696 54,844

Total investment income $ 66,063 $ 68,983

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Net investment-related income

Our net investment-related income increased by $23.2 million or 164.3% compared to 2022 mainly due to rising U.S.

interest rates, which resulted in an increase in interest income from our cash and cash equivalent (including restricted cash), partially offset by lower average outstanding balance in 2023.

Federal Reserve hiked its benchmark rate 11 times for a total of 5.25 percentage points since March 2022.

Our Innovations-related investments had less gains in 2023 in part due to less favorable pricing conditions from completed financing rounds by some of our Innovation investees compared to 2022.

Share of SILP’s Net Income

Our share of SILP’s net income decreased by $26.1 million in 2023 compared to 2022.

For the year ended December 31, 2023, SILP reported a net investment return of 9.4%, compared to 25.3% for 2022.

The following table provides a breakdown of the gross and net investment returns:

7,800 8.2 % 6,955 7.8 % 2,617 5.2 % 12.1 % 165.8 %

4,631 4.9 % 3,998 4.5 % 7,201 14.2 % 15.8 % (44.5) %

47,311 49.9 % 50,490 57.0 % 30,816 60.7 % (6.3) % 63.8 %

10,140 10.8 % 7,712 8.8 % 4,452 8.8 % 31.5 % 73.2 %

Total $ 94,725 100.0 % $ 88,602 100.0 % $ 50,739 100.0 % 6.9 % 74.6 %

Gross premiums written in 2024 increased by $6.1 million or 6.9%, compared to 2023.

The increase was predominantly attributable to:

(i) growth from existing customers in the casualty line and (ii) new customers in our financial, health, multiline (new accounts in our Syndicate 3456) and specialty lines.

This was partially offset by a non-renewed treaty and lower premium volume from certain existing customers in our multiline business.

Gross premiums written in 2023 increased by $37.9 million or 74.6%, compared to 2022.

The increase was predominantly attributable to the casualty line driven by new business and accelerated growth with existing customers, coupled with growth in our multiline driven by new business from our Syndicate 3456.

This was partially offset by a decrease in health line predominantly due to the non-renewal of a program.

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Net Premiums Written

Ceded premiums written in 2024 was $14.7 million, resulting in net premiums written of $80.0 million, compared to $5.0 million and $83.6 million, respectively, in 2023.

The increase in ceded premiums written of 194.5% was predominantly in the casualty line and, to a lesser extent, in the multiline and specialty lines driven by quota share reinsurance treaties with our assumed customers in which they share indirectly the underwriting risks through their captives or other platforms.

Ceded premiums written in 2023 was $5.0 million, resulting in net premiums written of $83.6 million, compared to $3.4 million and $47.3 million, respectively, in 2022.

The increase in ceded premiums written was predominantly in the multiline business due to new assumed business.

Net Premiums Earned

Net premiums earned by line of business were as follows:

2024 2023 2022 2024 to 2023 2023 to 2022

$ 18,705 21.7 % $ 13,332 18.6 % $ 3,890 11.7 % 40.3 % 242.7 %

5,499 6.4 % 5,076 7.1 % 655 2.0 % 8.3 % 675.0 %

2,144 2.5 % 2,522 3.5 % 7,030 21.2 % (15.0) % (64.1) %

51,669 59.8 % 44,533 62.1 % 19,080 57.5 % 16.0 % 133.4 %

8,335 9.6 % 6,306 8.7 % 2,529 7.6 % 32.2 % 149.3 %

Total $ 86,352 100.0 % $ 71,769 100.0 % $ 33,184 100.0 % 20.3 % 116.3 %

Net premiums earned in 2024 increased by $14.6 million or 20.3%, compared to 2023.

Further, net premiums earned in 2023 increased by $38.6 million or 116.3%, compared to 2022.

The increase in net premiums by line of business is relatively consistent with the trends noted for the gross premiums written.

The components of the loss ratio were as follows:

Year ended December 31,

2024 % Point Change

2023 % Point Change

Current year:

Attritional loss ratio

60.5 % (1.4) % 61.9 % 0.2 % 61.7 %

— % — % — % — % — %

Current year loss ratio

60.5 % (1.4) % 61.9 % 0.2 % 61.7 %

Prior year reserve development ratio

(0.3) % (0.9) % 0.6 % (7.4) % 8.0 %

60.1 % (2.4) % 62.5 % (7.3) % 69.8 %

Current Year Loss Ratio

The current year loss ratio in 2024 decreased by 1.4%, compared to 2023 driven mainly by modest lower attritional loss ratio in our casualty, multiline and specialty lines due to new business;

offset predominantly by a 2023 quota share reinsurance program in financial lines, which we did not renew but continued to earn premiums in 2024.

The current year loss ratio in 2023 increased marginally by 0.2%, compared to 2022.

The Innovations segment was not impacted by any CAT events for the years presented in the above table.

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Prior Year Reserve Development Ratio

Prior year reserve development ratio improved by 0.9% in 2024 compared to 2023, and by 7.4% in 2023 compared to 2022.

Refer to Note 7 Loss and LAE Reserves to the consolidated financial statements for further details on the lines of business and prior year development.

Acquisition cost ratio

The acquisition cost ratio increased marginally by 0.2% to 31.4% in 2024 compared to 2023.We had lower acquisition costs predominantly from the financial line due to lower profit commission relating to a non-renewed program;

offset mainly by new accounts in the multiline business, within our Syndicate 3456, at higher acquisition costs.

The acquisition cost ratio decreased by 2.3% to 31.2% in 2023 compared to 2022, primarily due to growth in net premiums earned from our Syndicate 3456 (included in multiline) to cover fixed acquisition costs, coupled with a change in business mix with growth in our casualty and specialty lines due to new accounts at lower acquisition costs.

Underwriting expense ratio

The underwriting expense ratio increased by 0.5% to 4.3% in 2024 compared to 2023, mainly due to an increase in personnel and overhead costs to support the Innovations business growth;

partially offset by the 20.3% increase in net premiums earned to cover fixed costs.

The underwriting expense ratio decreased by 2.1% to 3.8% in 2023 compared to 2022, mainly due to the 116.3% increase in net premiums earned to cover fixed costs, partially offset by an increase in personnel costs to support the Innovations business growth.

Income before income taxes

The income before income taxes for Innovations was $1.8 million in 2024 compared to $1.4 million in 2023.

The increase was mainly due to an increase in underwriting income, partially offset by lower net investment income driven by net downward valuation adjustments relating to certain Innovations private investments.

The income before income taxes for Innovations was $1.4 million in 2023 compared to $3.4 million in 2022.

The decrease was driven by a decrease in net investment income mainly due to lower unrealized gains from our Innovations private investments, in part due to less favorable pricing conditions from financing rounds completed by our investees.

This was partially offset by improved underwriting performance and lower Innovations-related expenses.

Other Corporate

Runoff Underwriting Business

In late 2023, we made the decision to not renew a property business due to significant CAT losses relating to unprecedented severe convective storms in the U.S.

On the quota share reinsurance treaty bound in 2023, we continued to earn premiums in 2024 and incurred additional CAT losses from severe convective storms that occurred in 2024.

For the years ended December 31, 2024, 2023, and 2022, we incurred an underwriting loss of $16.8 million, $18.4 million, and $6.0 million, respectively, including prior year adverse development of $6.2 million, $7.2 million, and $0.9 million, respectively.

This was partially offset by investment income of $1.4 million, $2.3 million, and $0.1 million, respectively, relating to this runoff business.

We have reported the results of the above property runoff business as part of Corporate in Note 17 Segment Repo rting in the consolidated financial statements.

Income from Investment in Solasglas

Our share of Solasglas’ net income increased by $4.9 million to $33.6 million in 2024 compared to 2023.

For the year ended December 31, 2024, Solasglas reported a net investment return of 9.8%, compared to 9.4% for 2023.

The following table provides a breakdown of the gross and net investment return for Solasglas:

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Long portfolio gains (losses) 10.3 % 32.1 %

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For further information about management fees and performance compensation, refer to Note 15 “ Related Party Transactions ” of the consolidated financial statements.

The most significant contributors to SILP’s net investment return for the year ended December 31, 2023 were long positions in Green Brick Partners Inc., CONSOL Energy Inc., and a S&P 500 / U.S.

For the year ended December 31, 2024, the significant contributors to Solasglas’ investment return were long positions in gold, Kyndryl Holdings (KD) and GRBK.

The largest detractors were three single-name short positions.

For the year ended December 31, 2023, the significant contributors to Solasglas’ investment return were long positions in GRBK, CONSOL Energy Inc., and a S&P 500 / U.S.

interest rate derivative position.

For the same period, the most significant detractors were three single-name short positions.

Each month, we post on our website ( www.greenlightre.com ) the returns from our investment in SILP.

Interest Expense

Our interest expense for the year ended December 31, 2023 increased by $1.1 million to $5.3 million compared to 2022.

The increase was driven primarily by the increase in borrowing cost for new Term Loans, which were partially used to repay the outstanding Convertible Notes (see Note 9 “ Debt and Credit Facilities ” to the consolidated financial statements).

The interest expense for the year ended December 31, 2023 included $0.6 million of unrealized loss on the interest rate swaps used to partially hedge the Term Loans.

For the year ended December 31, 2023, we incurred net income tax expense of $0.1 million, net of a $2.3 million reversal of deferred tax asset provision based on management’s conclusion that it was more likely than not that the Company will fully realize the deferred tax asset.

For the year ended December 31, 2022, we had a net income tax recovery of $0.8 million primarily due to a tax refund relating to Verdant.

For further information, see Note 14 “ Income Tax es ” to the consolidated financial statements.

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The most significant detractors were three single-name short positions.

Each month, we post on our website ( www.greenlightre.com ) the returns from our investment in Solasglas.

Financial Condition

The following table provides a breakdown of our total investments:

Investment in related party investment fund (SILP)

$ 258,890 78.0 % $ 178,197 71.7 %

At December 31,

Investment in related party investment fund (Solasglas) $ 387,144 84.1 % $ 258,890 78.0 %

Other investments:

3 unchanged sentences

1,293 0.3 2,136 0.6

Certificates of deposit

— — 6,000 2.4

Total other investments

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At December 31, 2024, our total investments increased by $128.1 million, or 38.6%, to $460.3 million from December 31, 2023.

The increase was primarily driven from net additional contributions into SILP, coupled with the net investment return in 2023.

Investments in SILP

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.

The increase was predominantly driven by $94.6 million of net contributions into Solasglas, coupled with the 9.8% net investment return in 2024.

The contributions were funded partially from cash flows from operations and from the partial release of restricted cash.

Investments in Solasglas

DME Advisors reports the composition of Solasglas’ 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:

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The following table represents the composition of Solasglas’ investments:

At December 31,

Long % Short % Long % Short %

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Under this methodology, a total return swap’s exposure is reported at its full notional amount and options are reported at their delta-adjusted basis.

At December 31, 2023, SILP’s exposure to gold on a delta-adjusted basis was 11.2% (2022:

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The following table represents the composition of SILP by industry sector at December 31, 2023:

Sector Long % Short % Net %

Communication Services — % (3.7) % (3.7) %

Consumer Discretionary 38.7 (11.9) 26.8

Consumer Staples — (1.0) (1.0)

Energy 14.2 — 14.2

Financial 15.5 (11.7) 3.8

Healthcare 7.2 (1.8) 5.4

Industrials 3.7 (7.6) (3.9)

Materials 6.6 (0.6) 6.0

Real Estate — (4.0) (4.0)

Technology 4.5 (8.2) (3.7)

Utilities 1.3 (3.3) (2.0)

Other 0.8 — 0.8

Total 92.5 % (53.8) % 38.7 %

The following table represents the composition of SILP, by the market capitalization of the underlying issuer, at December 31, 2023:

Capitalization Long % Short % Net %

Mega Cap Equity (≥$25 billion) 0.6 % (16.4) % (15.8) %

Large Cap Equity (≥$10 billion and <$25 billion) 5.7 (6.3) (0.6)

Mid Cap Equity (≥$2 billion and <$10 billion) 80.5 (25.3) 55.2

Small Cap Equity (<$2 billion) 3.4 (5.8) (2.4)

Debt Instruments 0.3 — 0.3

Total 92.5 % (53.8) % 38.7 %

At December 31, 2023, 95.0% of SILP’s portfolio was valued based on quoted prices in actively traded markets (Level 1), 3.6% was composed of instruments valued based on observable inputs other than quoted prices (Level 2), and a nominal amount was composed of instruments valued based on non-observable inputs (Level 3).

At December 31, 2023, 1.4% of SILP’s portfolio consisted of private equity funds valued using the funds’ net asset values as a practical expedient.

At December 31, 2024, Solasglas’ exposure to gold on a delta-adjusted basis was 10.1% (2023:

At December 31, 2024, 94.5% of Solasglas’ portfolio was valued based on quoted prices in actively traded markets (Level 1), 3.9% was composed of instruments valued based on observable inputs other than quoted prices (Level 2), and no instruments valued based on non-observable inputs (Level 3).

At December 31, 2024, 1.6% of Solasglas’ portfolio consisted of private equity funds valued using the funds’ net asset values as a practical expedient.

Other Investments

The other investment holdings relate to private investments made by Innovations.

At December 31, 2024, total other investments decreased marginally since December 31, 2023.

During 2024 we made $1.7 million of new private investments compared to $7.1 million in the prior year.

While we manage a diversified Innovations-related investment portfolio with approximately 40 holdings, our top five holdings accounted for 67% of the total carrying value as a result of favorable fair value remeasurement since our initial investments, net of impairment charges.

For further information, see Note 4 “ Other I nvestments ” of the consolidated financial statements.

The certificate of deposit was redeemed in 2023 to provide cash collateral for the new Loan Facility (see “Debt” below).

The increase in private investments was offset by $0.9 million of proceeds from a partial sale of one our holdings, coupled with net unfavorable change in fair value.

While we manage a diversified Innovations-related investment portfolio, our top five holdings accounted for 70% (2023:

67%) of the total carrying value.

For further information, see Note 4 “ Other Investments ” of the consolidated financial statements.

Restricted cash and cash equivalents

We use our restricted cash and cash equivalents primarily for funding trusts and letters of credit issued to our ceding insurers.

Our restricted cash decreased by $63.7 million, or 9.5%, from $668.3 million at December 31, 2022, to $604.6 million at December 31, 2023, primarily due to release of collateral from our ceding insurers relating to legacy contracts in run-off.

During the year ended December 31, 2023, we also pledged $10.0 million collateral as security for the new Loan Facility (see “Debt” below).

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Our restricted cash decreased by $20.2 million, or 3.3%, from $604.6 million at December 31, 2023, to $584.4 million at December 31, 2024, primarily due to release of collateral from our ceding insurers relating to legacy contracts in runoff.

Reinsurance balances receivable

Our reinsurance balances receivable increased by $85.1 million, or 13.7%, to $704.5 million from $619.4 million at December 31, 2023.

This increase was driven primarily by premiums held by Lloyd’s syndicates through GCM.

See “Concentration of Credit Risk - Reinsurance Balances Receivable, net” in Note 16 “ Commitments and Cont ingencies ” to the consolidated financial statements.

This was driven primarily by $66.7 million increase in premiums receivable, net of collections, and $19.6 million in funds withheld from new and renewed reinsurance treaties.

Loss and LAE Reserves;

Loss and LAE Recoverable

Our reserves for loss and LAE by lines of business were as follows:

December 31, 2023 December 31, 2022

Reserves IBNR Total Case

Reserves IBNR Total

Property $ 24,181 $ 41,056 $ 65,237 $ 20,354 $ 41,361 $ 61,715

Casualty 136,713 299,933 436,646 146,702 227,979 374,681

Other 28,156 131,515 159,671 17,700 101,372 119,072

Total $ 189,050 $ 472,504 $ 661,554 $ 184,756 $ 370,712 $ 555,468

Our total gross loss and LAE reserves increased by $199.4 million, or 30.1%, to $861.0 million from $661.6 million at December 31, 2023.

See Note 7 “ Loss and Loss Adjust ment Expense Reserv es ” of the consolidated financial statements for a summary of changes in outstanding loss and LAE reserves and a description of prior period loss developments.

Our total loss and LAE recoverable increased by $12.4 million, or 94.0%, to $25.7 million from $13.2 million at December 31, 2022.

See Note 8 “ Re trocession ” of the consolidated financial statements for a description of the credit risk associated with our retrocessionaires.

For most of the contracts we write, defined limits of liability limit our risk exposure.

Once each contract’s limit of liability has been reached, we have no further exposure to additional losses from that contract.

However, certain contracts, particularly quota share contracts covering first-dollar exposure, do not contain aggregate limits.

Our property and Lloyd’s business, and to a lesser extent our casualty and other business, incorporate contracts that contain natural peril loss exposure.

We currently monitor our catastrophe loss exposure in terms of our PML (net of retrocession and reinstatement premiums).

We anticipate that our PMLs will vary from period to period depending upon the modeled simulated losses and the composition of our in-force book of business.

We monitor our natural peril PMLs on a worldwide basis, with a particular focus on our peak peril regions.

When these perils consist of a large geographic area, we split them into sub-regions, where the underlying geographic components can also be considered individual peril zones.

For our natural catastrophe PMLs, we utilize the output of catastrophe models at the 1-in-250-year return period.

The 1-in-250-year return period PML means that we believe there is a 0.4% probability that, in any given year, an occurrence of a natural catastrophe will lead to losses exceeding the stated estimate.

It is important to note that PMLs are best estimates based on the modeled data available for each underlying risk.

As a result, we cannot provide assurance that any actual event will align with the modeled event or that actual losses from events similar to the modeled events will not vary materially from the modeled event PML.

Our PML estimates incorporate all significant exposure from our reinsurance operations, including coverage for property, marine and energy, motor, and catastrophe workers’ compensation exposures.

See Note 7 “ Loss and Loss Adjustment Expense Reserves ” of the consolidated financial statements for a summary of changes in outstanding loss and LAE reserves, current year CAT losses, prior period reserve development, and analysis of our incurred and paid claims development and claims duration for each of our reporting segments.

In addition, refer to “ Critical Accounting Estimates - Loss and LAE Reserves ” within this MD&A for information on the reserving techniques, assumptions and processes we follow to estimate our loss and LAE reserves.

Our total loss and LAE recoverable increased by $60.1 million, or 234.0%, to $85.8 million since December 31, 2023, driven primarily by retrocession coverage on the current year CAT loss events and on the adverse reserve development relating to the Russian-Ukrainian conflict.

Virtually all the outstanding balance is based on estimated recoveries not yet due.

See Note 8 “ Retrocession ” of the consolidated financial statements for a description of the credit risk associated with our retrocessionaires.

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Catastrophe Loss Exposure

Most of our contracts have defined limits of liability that cap our risk exposure.

Once these limits are reached, we are not liable for further losses.

However, some contracts, especially quota share contracts covering first-dollar exposure, lack aggregate limits.

Our property and Lloyd’s business, and to a lesser extent our casualty and other business, in the Open Market segment include contracts with natural peril loss exposure.

We monitor our catastrophe loss exposure using PML (net of retrocession and reinstatement premiums), which can vary based on simulated losses and our in-force business composition.

We track natural peril PMLs globally, focusing on peak peril regions and subdividing large geographic areas into individual peril zones.

For natural catastrophe PMLs, we use catastrophe models at the 1-in-250-year return period, indicating a 0.4% probability of exceeding the estimated losses in any given year.

PMLs are best estimates based on available modeled data, and actual events may differ significantly from these models.

Our PML estimates cover all significant exposures from our reinsurance operations, including property, marine and energy, motor, and catastrophe workers’ compensation.

At January 1, 2025, our estimated largest PML at a 1-in-250-year return period for a single event and in aggregate was $116.3 million and $129.1 million, respectively, both relating to the peril of North Atlantic Hurricane, compared to $89.7 million and $97.0 million, respectively, at January 1, 2024.

We have increased our PMLs in response to favorable market conditions and attractive opportunities, coupled with increased surplus.

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Our PMLs increased as we grew our clients and accessed new business that met our profitability requirements.

The below table contains the expected modeled loss for each of our peak peril regions and sub-regions for both a single event loss and aggregate loss measures at the 1-in-250-year return period.

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Peril Single Event Loss Aggregate Loss

($ in thousands)

North Atlantic Hurricane $ 116,309 $ 129,144

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California Earthquake 97,033 97,644

Pacific Northwest Earthquake

45,101 45,101

Earthquake 43,163 43,278

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Europe Windstorm 63,075 67,628

Our total debt decreased by $7.3 million, or 9.0%, to $73.3 million from $80.5 million at December 31, 2022.

During 2023, we repurchased $17.5 million of Convertible Notes for a marginal realized gain.

Further, we repaid the remaining $63.4 million of Convertible Notes, including accrued interest, which matured on August 1, 2023.

To repay this debt, we entered into a $75.0 million Loan Facility with a group of banks.

In connection with this Loan Facility, we contractually agreed to hedge 50% of the floating rate Term Loans for the duration of the Loan Facility.

Refer to Note 9 “ Debt and Credit Facilities ” of the consolidated financial statements for further information.

Total shareholders’ equity

Total shareholders’ equity increased by $93.0 million to $596.1 million, compared to $503.1 million at December 31, 2022.

The increase was primarily due to the net income of $86.8 million reported for the year.

For details of other movements in shareholders’ equity, see the consolidated statements of shareholders’ equity.

Liquidity and Capital Resources

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The ability to pay dividends and/or distributions is limited by:

• the applicable laws and regulations of the countries in which Greenlight Capital Re’s subsidiaries operate (see Note 18 “ Statutory R equirements ” to the consolidated financial statements);

• the applicable laws and regulations of the countries in which Greenlight Capital Re’s subsidiaries operate (see Note 18 “ Statutory Requirements ” to the consolidated financial statements);

• the need to maintain adequate capital levels to support our reinsurance operations;

• the need to preserve our current “A- (Excellent)” rating with a stable outlook by A.M.

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• the need to preserve our current “A- (Excellent)” rating by A.M.

As a holding company, Greenlight Capital Re has minimal continuing cash needs, most of which are related to the payment of corporate and general administrative expenses and interest expenses.

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We currently do not expect to pay dividends on our ordinary shares.

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We anticipate positive cash flows from operations (underwriting activities and investment income) to be sufficient to cover cash outflows under most loss scenarios in the near term.

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We use cash from our operations to pay losses and loss adjustment expenses, profit commissions, interest, and G&A expenses.

Our reinsurance business inherently provides liquidity as premiums are received well in advance of the time claims are paid.

Our reinsurance business inherently provides liquidity as premiums are received in advance of the time claims are paid.

However, the amount of cash required to fund loss payments can fluctuate significantly from period to period due to the low frequency / high severity nature of certain types of business we write.

The following table summarizes our sources and uses of funds:

Year ended December 31

Total cash provided by (used in):

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Cash, end of period $ 649,087 $ 655,730

(1) Cash includes unrestricted and restricted cash and cash equivalents - see Note 5 of the consolidated financial statements .

(1) Cash includes unrestricted and restricted cash and cash equivalents - see Note 5 “ Restricted Cash and Cash Equivalents ” of the consolidated financial statements .

Cash provided by operating activities

The increase in cash provided by operating activities was driven mainly by $42.7 million improved underwriting income, coupled with the ebb and flow from our underwriting activities, which may vary significantly from period to period depending on the mix of business, the nature of underwriting opportunities available and volume of claims submitted to us by our cedents.

The $104.0 million increase in cash provided by operating activities was driven mainly by the ebb and flow from our underwriting activities.

Cash inflows from underwriting activities generally include premiums, net of acquisition costs, and reinsurance recoverables.

Cash outflows principally include payments of losses and LAE, payments of retrocession premiums, and operating expenses.

Cash provided by operating activities may vary significantly from period to period due to the timing of these inflows and outflows.

Cash used in investing activities

The increase in cash used for investing activities was driven mainly by the net change in our investment in SILP where we made a net contribution of $52.0 million during 2023 compared to a net redemption of $60.2 million during 2022.

During 2023, we deployed $6.1 million less on Innovations-related investments compared to 2022, and collected $6.0 million of proceeds from a matured term deposit.

The $43.4 million increase in cash used for investing activities was driven predominantly by an increase in the net contribution to Solasglas.

Cash used in financing activities

The decrease in cash used in our financing activities was due to drawing $74.1 million from the new Loan Facility, offset by the repayment of the remaining Convertible Notes on August 1, 2023, in addition to the partial repurchase of these Convertible Notes at a discount in 2023.

In 2022, we had repurchased $19.8 million of our Convertible Notes.

Financing cash outflows in 2024 were driven mainly by the $7.5 million of share repurchases and $13.8 million of debt repayments.

Financing cash outflows in 2023 were driven by the $17.2 million repurchase of convertible senior notes;

partially offset by the net proceeds from the debt refinancing where we issued $75.0 million of Term Loans to repay the remaining $62.1 million convertible senior notes.

Capital Resources

The following table summarizes our capital structure:

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December 31, 2023 December 31, 2022

The following table summarizes our debt and capital structure:

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Debt - outstanding principal

$ 60,313 $ 74,062

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635,879 596,095

Total capital

$ 696,192 $ 670,157

Ratio of debt to shareholders’ equity

The debt to shareholders’ equity provides an indication of our leverage and capital structure, along with some insights into our financial strength.

In addition to the above capital, we also have LOC facilities to support our reinsurance business operations where we are not licensed or admitted as a reinsurer.

The following is a summary of the changes in our capital:

At December 31, 2023, our debt consisted of the new $75.0 million Loan Facility used principally to repay the Convertible Notes that were outstanding at December 31, 2022, net of repurchases during 2023.

We also made the initial loan installment repayment on the Loan Facility.

The facility will mature on August 1, 2026.

Ordinary Shares

At December 31, 2023, there were 35,336,732 outstanding ordinary shares, an increase of 512,671 since December 31, 2022, due to restricted shares granted to our employees and non-executive directors.

While our Board of Directors renewed the $25.0 million share repurchase plan in 2023, we did not repurchase any ordinary shares for year ended December 31, 2023 (see “Item 5 - Market for Regist rants ’ s Common Equity, Related Stockholder Matter s and Issuer P urchases of Equity Securities ”).

In addition to the above capital, we also have LOC facilities to support our reinsurance business operations where we are not licensed or admitted as a reinsurer (see Note 9 “ Debt and Credit Facilities ” of the consolidated financial statements for further information).

As a result of a $10.0 million voluntary repayment and regular quarterly installments, our total debt (including accrued interest) decreased by $12.5 million, or 17.1%, to $60.7 million at the end of December 31, 2024, down from $73.3 million on December 31, 2023.

Total shareholders’ equity

Total shareholders’ equity increased by $39.8 million to $635.9 million, compared to $596.1 million at December 31, 2023.

The increase was primarily due to the net income of $42.8 million reported for the year, coupled with share-based compensation adjustment to additional paid-in capital.

This was partially offset by $7.5 million of share repurchases in the open market at an average price of $13.68 per share.

At December 31, 2024, there were 34,831,324 outstanding ordinary shares, a decrease of 505,408 since December 31, 2023, mainly due to 547,402 of share repurchases offset partially by issuance of restricted shares and ordinary shares for vested RSUs, net of forfeitures.

We expect that the existing capital base and internally generated funds will be sufficient to implement our business strategy for the foreseeable future.

However, to provide us with flexibility and timely access to public capital markets should we require additional capital for working capital, capital expenditures, acquisitions, or other general corporate purposes, we have filed a Form S-3 registration statement, which expires in July 2024.

Secured LOC Facilities

At December 31, 2023, our total LOC capacity was $489.0 million, compared to $289.0 million at December 31, 2022.

The increase was due to a new LOC credit facility established to accommodate future growth and to diversify the concentration risk of having a single facility.

At December 31, 2023, we had $290.7 million LOCs outstanding compared to $203.9 million at December 31, 2022.

The increase is driven by, among other factors, the amount of unearned premiums, development of loss reserves, the expansion of our business and loss experience of that business.

The amount drawn from the LOC facilities are secured by cash collateral, reported as restricted cash and cash equivalents in the consolidated balance sheets.

However, to provide us with flexibility and timely access to public capital markets should we require additional capital for working capital, capital expenditures, acquisitions, or other general corporate purposes, we have renewed our $200.0 million shelf registration by filing the Form S-3 registration statement with the SEC, which became effective on July 5, 2024, and will expire on July 1, 2027.

Contractual Obligations and Commitments

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Financing activities

Debt (principal payments) (3)

3,016 57,297 — — 60,313

$ 342,062 $ 354,708 $ 105,899 $ 119,675 $ 922,345

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(1) Due to the nature of our reinsurance operations, the amount and timing of the cash flows associated with our reinsurance contractual liabilities will fluctuate, perhaps materially, and, therefore, are highly uncertain.

(2) See Note 16 “ Commitments and Cont ingencies ” of the consolidated financial statements.

(1) Due to the nature of our reinsurance operations, the actual amount and timing of the cash flows associated with our reinsurance contractual liabilities will fluctuate, perhaps materially, and, therefore, are highly uncertain.

We have not taken into account corresponding reinsurance recoverable on unpaid amounts that would be due to us.

(2) See Note 16 “ Commitments and Contingencies ” of the consolidated financial statements.

(3) See Note 9 “ Debt and Credit Facilities ” of the consolidated financial statements.

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Critical Accounting Estimates

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If certain factors, including those described in “Part I, Item IA.

— Risk Factors ,” cause actual events or results to differ materially from our underlying assumptions or estimates, there could be a material adverse effect on our results of operations, financial condition, or liquidity.

We believe the following accounting policies affect the more significant estimates used to prepare our consolidated financial statements.

We have summarized the descriptions below for clarity.

We have included a more detailed description of our significant accounting policies and recently issued accounting standards in Note 2 “ Significan t Accounting Polic i es ” to the consolidated financial statements.

Premium Revenues

— Risk Factors ,” cause actual events or results to differ materially from our underlying assumptions or estimates.

In that case, there could be a material adverse effect on our results of operations, financial condition, or liquidity.

We believe the following are the critical accounting estimates used to prepare our consolidated financial statements:

• Premium recognition

• Loss and LAE reserves

• Investments valuation

The following provides a summary of our accounting policies for the above critical accounting estimates.

Premium Recognition

Gross Premiums Written

We record our property and casualty reinsurance premiums as premiums written based on our best estimate of the ultimate premiums for the contract period.

Our estimates are based on actuarial pricing models and information received from ceding companies.

Our estimates are based on actuarial pricing models, information received from ceding companies, and from Lloyd’s syndicates (for FAL business).

Further, we record reinsurance premiums so long as they meet the risk transfer criteria under U.S.

GAAP (see “Deposit Contracts” below).

Excess of loss reinsurance contracts typically state premiums as a percentage of the subject premiums written by the client, subject to a minimum and deposit premium.

The recognition of gross premiums written will vary based on the type of the reinsurance contract as follows:

• Excess of loss contracts :

typically the contracts state premiums as a percentage of the subject premiums written by the client, subject to a minimum and deposit premium.

The minimum and deposit premium is generally based on an estimate of subject premiums expected to be written by the client during the contract term.

The minimum and deposit premium is reported initially as premiums written and adjusted, if necessary, in subsequent periods once the actual subject premium is known.

For quota share (also known as proportional) contracts, we record premiums in the same periods in which the underlying insurance contracts are written, based on cession statements from cedents.

We typically receive these statements monthly or quarterly, depending on the terms specified in each contract.

For any reporting lag, we estimate premiums written based on the portion of the estimated ultimate premiums relating to the risks bound during the lag period.

For multi-year contracts, reinsurance premiums are recorded at the inception of the contract based on our best estimate of total premiums to be received.

At the inception of the contract, we record the total contractual minimum and deposit premium, which is subsequently adjusted when the actual subject premium is known.

Generally, the adjustment to actual is not material on an aggregate basis.

• Quota share (also known as proportional) contracts :

we record our participation share of the estimated ultimate premiums in the same periods in which the underlying insurance contracts are written.

For example, for a 12-month quota share reinsurance contract, we will recognize the estimated gross premiums written over 12 months, generally on a linear basis.

• For multi-year contracts :

we record reinsurance premiums at the inception of the contract based on our best estimate of total premiums to be received.

Premiums are recognized on an annual basis for multi-year contracts where the cedants have the ability to unilaterally commute or cancel coverage within the term of the contract.

We write mostly quota share reinsurance treaties.

The following table provides a summary of our estimated gross premiums written for quota share reinsurance contracts incepting during the year:

2024 2023 2022

Open Market segment

$ 402,666 $ 358,230 $ 350,595

Innovations segment

45,494 44,133 33,030

Property runoff

— 42,744 54,511

Total quota share estimated premiums

448,160 445,107 438,136

Consolidated gross premiums written

698,335 636,810 563,171

As of % of total consolidated

64 % 70 % 78 %

We regularly review premium estimates.

Such review includes our experience with the ceding companies, managing general underwriters, familiarity with each market, the timing of the reported information, a comparison of reported premiums to expected ultimate premiums, along with a review of the aging and collection of premiums.

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expected ultimate premiums, along with a review of the aging and collection of premiums.

We evaluate the appropriateness of the premium estimates on the basis of these reviews and record any adjustments to these estimates in the period in which they are determined.

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Certain contracts provide for reinstatement premiums in the event of a loss.

Reinstatement premiums are written and earned when a triggering loss event occurs.

Reinstatement premiums are written and earned when a triggering loss event occurs, based on management’s estimates of the ultimate reinstatement premiums.

These estimates are subsequently adjusted when actual reinstatement premiums are known.

Net Premiums Earned

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For instance, when exposure limits for a reinsurance contract are reached, any associated unearned premiums are fully earned.

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Excess of loss reinsurance contracts are generally written on a “losses occurring” or “claims made” basis over the term of the policy.

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As the underlying business incepts throughout the contract term, which is generally one year, and the underlying business generally has a one year coverage period, these premiums are generally earned evenly over a 24-month period from inception.

For certain classes within financial and specialty lines of business, the underlying risk exposure period extend over several years and accordingly these premiums are earned over up to 60-months.

Deposit Contracts

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Any income and expense on deposit-accounted contracts is calculated using the interest method and recorded in the consolidated statements of operations under “Other income (expense)” and “Deposit interest expense,” respectively.

Loss and Loss Adjustment Expense Reserves

Loss and LAE Reserves

Estimating our loss and LAE reserves involves a considerable degree of judgment, and our estimates as of any given date are inherently uncertain.

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Our loss and LAE reserves are composed of case reserves (based on claims reported to us) and IBNR reserves, including the associated claims handling costs.

The following table summarizes our gross reserves for loss and LAE for each of the reportable segments, by line of business, and the runoff business at December 31, 2024:

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Case reserves

Total loss and LAE reserves

Open Market segment:

Casualty $ 72,547 $ 127,268 $ 199,815

Financial 25,088 38,167 63,255

Health 3 176 179

Multiline 51,735 145,638 197,373

Property 39,623 55,119 94,742

Specialty 22,129 192,282 214,411

Total Open Market segment 211,125 558,650 769,775

Innovations segment:

Casualty 672 21,587 22,259

Financial 876 3,048 3,924

Health 399 995 1,394

Multiline 11,963 34,697 46,660

Specialty 972 1,776 2,748

Total Innovations segment 14,882 62,103 76,985

Corporate (property business in runoff)

4,626 9,583 14,209

Total $ 230,633 $ 630,336 $ 860,969

27 % 73 % 100 %

We determine case reserve estimates based on loss reports received.

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The information we receive varies by cedent and may include paid losses, estimated case reserves, and an estimated provision for IBNR reserves.

Reserving practices and data-reporting quality differ among ceding

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companies, which adds further uncertainty to our estimation of ultimate losses.

Reserving practices and data-reporting quality differ among ceding companies, which adds further uncertainty to our estimation of ultimate losses.

The nature and extent of information received from ceding companies and brokers also vary widely depending on the type of coverage, the contractual reporting terms (which are affected by market conditions and practices), and other factors.

Due to the lack of standardization of the terms and conditions of reinsurance contracts, the differences in coverage provided to individual clients, and the tendency of those coverages to change rapidly in response to market conditions, we cannot always reliably measure the ongoing economic impact of such uncertainties and inconsistencies.

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Time lags are inherent in loss reporting, especially in the case of excess-of-loss reinsurance contracts.

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However, we can provide no assurance that actual losses will not (i) be less than or (ii) exceed our total established reserves.

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Please refer to Notes 2 “ Significant Accounting Policies - Loss and Loss Adjustment Expense Reserves and Recoverable ” and 7 “ L oss and Lo ss Adjust ment Ex pense Reserves ” of our consolidated financial statements for a more detailed explanation of our loss reserving methodology and the loss development tables by accident year, respectively, as required under U.S.

We carry our investment in SILP at fair value, based on the most recent net asset value obtained from SILP’s third-party administrator.

Further, SILP’s financial statements for the years ended December 31, 2023, 2022, and 2021 were subject to an independent audit in which SILP’s external auditors issued an unqualified opinion for these years (see “ Report of Independent Registered Public Accounting Firm ” in the Exhibits).

Please refer to Notes 2 “ Significant Accounting Policies - Loss and Loss Adjustment Expense Reserves and Recoverable ” and 7 “ Loss and Loss Adjustment Expense Reserves ” of our consolidated financial statements for a more detailed explanation of our loss reserving methodology and the loss development tables by accident year, respectively, as required under U.S.

Investments Valuation

We carry our investment in Solasglas at fair value, based on the most recent net asset value obtained from Solasglas’ third-party administrator.

Further, Solasglas’ financial statements for the years ended December 31, 2024, 2023, and 2022 were subject to

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an independent audit in which Solasglas’ external auditors issued an unqualified opinion for these years (see “ Report of Independent Registered Public Accounting Firm ” in the Exhibits).

Other investments in our consolidated balance sheets includes private and unlisted equity securities that do not have readily determinable fair values.

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We determine realized gains and losses from other investments based on the specific identification method (by reference to cost or amortized cost, as appropriate).

These gains and losses are included in “Net investment income (loss)” in the consolidated statements of operations.

These gains and losses are also included in “Net investment income (loss)” in the consolidated statements of operations.

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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-K

Item 7. Management’s Discussion and Analysis