Greenlight Capital Re Ltd (GLRE) 2024 Q2 法說會逐字稿

Thank you for joining the Greenlight Capital Re Limited second-quarter 2024 earnings conference call. (Operator Instructions)

感謝您參加 Greenlight Capital Re Limited 2024 年第二季財報電話會議。（操作員說明）

It's now my pleasure to turn the call over to David Sigmon, Greenlight Re's General Counsel. You may begin.

現在我很高興將電話轉給 Greenlight Re 總法律顧問 David Sigmon。你可以開始了。

Thank you, and good morning. I'd like to remind you that this conference call is being recorded and will be available for replay following the conclusion of the event. An audio replay will also be available under the investor section of the company's website at www.greenlightre.com. Joining us on the call today will be our Chief Executive Officer, Greg Richardson, Chairman of the Board, David Einhorn, and Chief Financial Officer, Faramarz Romer.

謝謝你，早安。我想提醒您，本次電話會議正在錄音，並將在活動結束後重播。音訊重播也將在公司網站 www.greenlightre.com 的投資者部分提供。今天加入我們電話會議的包括我們的執行長 Greg Richardson、董事會主席 David Einhorn 和財務長 Faramarz Romer。

On behalf of the company, I'd like to remind you that forward-looking statements may be made during this call and are intended to be covered by the Safe Harbor provisions of the Federal Securities Law. These forward-looking statements reflect the company's current expectations, estimates, and predictions about future results and are subject to risks and uncertainties. As a result, actual results may differ materially from those expressed or implied.

我謹代表本公司提醒您，本次電話會議期間可能會做出前瞻性陳述，這些陳述將受到聯邦證券法安全港條款的涵蓋。這些前瞻性陳述反映了公司目前對未來業績的預期、估計和預測，並受到風險和不確定性的影響。因此，實際結果可能與明示或暗示的結果有重大差異。

For more information on the risks and other factors that may impact future performance, investors should review the periodic reports that are filed by the company with the SEC from time-to-time. Additionally, management may refer to certain non-GAAP financial measures. The reconciliation to these measures can be found in the company's filings with the SEC, including the company's recently filed Form 10-Q for the quarter ended June 30, 2024. The company undertakes no obligation to publicly update or revise any forward-looking statements.

有關可能影響未來業績的風險和其他因素的更多信息，投資者應查看公司不時向 SEC 提交的定期報告。此外，管理階層可能會參考某些非公認會計準則財務指標。這些措施的調節可以在該公司向 SEC 提交的文件中找到，包括該公司最近提交的截至 2024 年 6 月 30 日的季度的 10-Q 表格。該公司不承擔公開更新或修改任何前瞻性陳述的義務。

With that, it is now my pleasure to turn the call over to Greg.

現在，我很高興將電話轉給格雷格。

Thanks, David. Good morning, everyone, and thank you for joining us today. Greenlight Re reported gross written premiums of $169 million, up 9.1% compared to the second quarter of 2023. We delivered net income of $8 million, which equates to 1.5% growth in fully diluted book value per share during the quarter, or 6% on an annualized basis. We reported a combined ratio of 99.8% for the quarter.

謝謝，大衛。大家早安，感謝您今天加入我們。Greenlight Re 公佈的總承保保費為 1.69 億美元，較 2023 年第二季成長 9.1%。我們實現了 800 萬美元的淨利潤，相當於本季完全攤薄後每股帳面價值成長 1.5%，年化成長 6%。我們報告本季的綜合成本率為 99.8%。

Our underwriting result was impacted by a higher-than-normal level of current period catastrophe losses, primarily related to the US convective storm season, which added 8.4% to our second quarter combined ratio. US convective storm losses in the second quarter are estimated at over $30 billion, roughly twice the 10-year average.

我們的承保業績受到本期巨災損失高於正常水平的影響，這主要與美國對流風暴季節有關，該季節使我們第二季度的綜合成本率增加了 8.4%。美國第二季的對流風暴損失估計超過 300 億美元，大約是 10 年平均值的兩倍。

Our exposure to these events almost exclusively relates to a homeowner's insurance program, which we non-renewed effective January 1, 2024. While we have some residual exposure to US severe convective storms, the peak US convective storm season of March to June is behind us, and our ongoing exposure is declining rapidly as the 2023 treaty runs off.

我們面臨的這些事件幾乎完全與房屋保險計劃有關，我們自 2024 年 1 月 1 日起不再續簽該計劃。雖然我們對美國強對流風暴有一些殘餘暴露，但 3 月至 6 月的美國對流風暴高峰季節已經過去，隨著 2023 年條約的結束，我們持續的暴露正在迅速下降。

Excluding US convective storm losses, our portfolio performed well in the quarter and in line with expectations. We remain positive about the positioning of our portfolio and market conditions in general. At July 1, the renewal season was in line with expectations, reinsurers remained disciplined, and pricing continues to be attractive.

排除美國對流風暴損失，我們的投資組合在本季表現良好，符合預期。我們對我們的投資組合定位和整體市場狀況保持樂觀。截至 7 月 1 日，續保季節符合預期，再保險公司仍保持紀律，定價持續具有吸引力。

We continue to see attractive opportunities for growth, particularly in the property and specialty classes, but are more cautious in casualty, particularly if there are large original limits involved. I recently returned to the Cayman Islands after spending a couple of weeks in Ireland and the UK, where I had the opportunity to spend some extended time with our staff, our brokers, and our clients. Greenlight Re's positioning with our brokers and clients is strong, and we look forward to future growth with them.

我們繼續看到有吸引力的成長機會，特別是在財產和專業類別中，但對傷亡更加謹慎，特別是在涉及大量原始限額的情況下。在愛爾蘭和英國待了幾週後，我最近回到了開曼群島，在那裡我有機會與我們的員工、經紀人和客戶共度了一些時間。Greenlight Re 在我們的經紀商和客戶中的地位非常穩固，我們期待與他們在未來共同發展。

Greenlight Re is in good shape, we have a strong team, and I am excited about our prospects. Now I'd like to turn the call over to David Einhorn.

Greenlight Re 狀況良好，我們擁有一支強大的團隊，我對我們的前景感到興奮。現在我想把電話轉給大衛艾因霍恩。

Thanks, Greg, and good morning, everyone. The Solace Glass Fund returned 1.2% in the second quarter. Our short portfolio added 1.6%, and macro added 0.9%. The long portfolio detracted 1%. During the quarter, the S&P 500 index advanced 4.3%. The largest positive contributors were long investments in Salve, HP, and Kyndryl Holdings. The largest detractors were long positions in Bright House Financial and Greenbrick Partners, and a single name short.

謝謝格雷格，大家早安。Solace Glass 基金第二季報酬率為 1.2%。我們的空頭投資組合上漲了 1.6%，宏觀投資組合上漲了 0.9%。多頭投資組合下跌 1%。本季度，標普 500 指數上漲 4.3%。最大的積極貢獻者是對 Salve、HP 和 Kyndryl Holdings 的長期投資。最大的批評者是 Bright House Financial 和 Greenbrick Partners 的多頭部位以及單一名稱的空頭部位。

Salve advanced 30% during the quarter. Despite concerns around falling soda ash prices, the company exceeded earnings expectations in the first quarter and maintained its full year outlook. HP shares gained 16% as PC hardware sales turned marginally positive after seven quarters of decline, and the company guided to a return of growth for this segment. The market might have also begun to show excitement around the prospect of an even larger AI-related PC growth cycle.

Salve 在本季上漲了 30%。儘管對純鹼價格下跌的擔憂，該公司第一季的盈利超出了預期，並維持了全年預期。惠普股價上漲 16%，PC 硬體銷售在經歷七個季度的下滑後略有回升，該公司預計該領域將恢復成長。市場也可能開始對更大的人工智慧相關個人電腦成長週期的前景表現出興奮。

Kyndryl Holdings shares advanced 21% after another positive earnings update, which saw results exceed expectations on all key metrics. Importantly, the company finally guided toward constant currency revenue growth, beginning in its fourth fiscal quarter this year. Gains in the macro portfolio were primarily driven by gold, which appreciated 4% over the quarter.

Kyndryl Holdings 股價上漲 21%，先前又一次積極的獲利更新，所有關鍵指標的表現都超出了預期。重要的是，從今年第四財季開始，該公司最終實現了貨幣收入的持續成長。宏觀投資組合的收益主要是由黃金推動的，黃金在本季升值了 4%。

Bright House Financial shares fell 16% after announcing for the second quarter in a row a surprising one-off earnings disappointment. This time it disclosed that it incurred a reinsurance arbitration expense of several hundred million dollars. Greenbrick Partners shares fell 5% over the period.

Bright House Financial 宣布連續第二季的一次性獲利令人意外地令人失望，股價下跌 16%。此次披露，其發生了數億美元的再保險仲裁費用。Greenbrick Partners 股價同期下跌 5%。

In May, the company announced both record-breaking first quarter earnings and homebuilder gross margins. The third largest detractor was a single-name short position, which, despite an unexciting earnings update, saw a stock rally on the heels of a company event where it unveiled new AI-related initiatives.

五月份，該公司公佈了創紀錄的第一季利潤和房屋建築商毛利率。第三大不利因素是單一名稱空頭頭寸，儘管該公司的獲利更新並不令人興奮，但在公司發布新的人工智慧相關舉措的活動之後，該公司的股價出現上漲。

Our net exposure remained neutral during the quarter. Led by a surge in Greenbrick Partners, the Solace Glass portfolio returned 4.6% in July and has returned 11.3% year-to-date through July 31. Net exposure in the investment portfolio is approximately 31% at the end of July.

本季我們的淨敞口保持中性。在 Greenbrick Partners 飆升的帶動下，Solace Glass 投資組合 7 月的回報率為 4.6%，截至 7 月 31 日，今年迄今的回報率為 11.3%。截至 7 月底，投資組合的淨敞口約為 31%。

This month is the 20th anniversary of Greenlight Re. I just returned from a board meeting in Dublin, where I had the chance to meet our European staff and celebrate this milestone. When we first started Greenlight Re, we had a vision, but no idea what it would actually eventually become.

本月是 Greenlight Re 成立 20 週年。我剛從都柏林的董事會會議回來，在那裡我有機會見到了我們的歐洲員工並慶祝了這一里程碑。當我們第一次啟動 Greenlight Re 時，我們有一個願景，但不知道它最終會變成什麼樣子。

Despite some tough periods, I'm incredibly proud of the team and what we built from the ground up. The company is the strongest it has ever been, and I look forward to the next 20 years. During our Board meeting, the board made the decision to increase the allocation to the Solace Glass fund from 60% to 70% of adjusted book value. This change was made effective August 1.

儘管經歷了一些困難時期，但我對這個團隊以及我們從頭開始建立的東西感到非常自豪。公司是有史以來最強大的，我期待下一個20年。在董事會會議上，董事會決定將 Solace Glass 基金的分配從調整後帳面價值的 60% 增加到 70%。此變更於 8 月 1 日生效。

Now I'd like to turn the call to Farmaraz, who will discuss the financial results in more detail.

現在我想把電話轉給法馬拉茲，他將更詳細地討論財務表現。

Thank you, David, and good morning, everyone.

謝謝大衛，大家早安。

During the second quarter of 2024, we generated net income of $8 million, or $0.23 per diluted share, compared to $49.9 million, or $1.32 per diluted share, in Q2 2023. The underwriting book generated a small profit of $0.3 million after underwriting-related G&A expenses.

2024 年第二季度，我們產生了 800 萬美元的淨利潤，即稀釋後每股收益 0.23 美元，而 2023 年第二季度的淨利潤為 4990 萬美元，即稀釋後每股收益 1.32 美元。扣除與承銷相關的一般及行政費用後，承銷帳簿產生了 30 萬美元的小額利潤。

Current period catastrophe losses accounted for $13.3 million, the majority of which related to the US severe convective storms, as Greg mentioned, while approximately $5.9 million related to the German floods, the Taiwan earthquake, and an offshore platform fire.

正如格雷格所提到的，本期巨災損失達 1,330 萬美元，其中大部分與美國強對流風暴有關，而大約 590 萬美元與德國洪水、台灣地震和海上平台火災有關。

During the second quarter, our net written premiums increased by $8.9 million, or 6.2%, to $154.1 million, compared to the same quarter in 2023. The growth related to the specialty book, while the property and casualty books, partially offset the increases. The net premiums earned were $158.4 million, an increase of $18.5 million, or 13.2%, compared to Q2 last year.

與 2023 年同季相比，第二季我們的淨承保保費增加了 890 萬美元，即 6.2%，達到 1.541 億美元。專業書籍的成長與財產和傷亡書籍相關，部分抵消了成長。淨保費收入為 1.584 億美元，較去年第二季增加 1,850 萬美元，成長 13.2%。

Turning to our specialty book, our net premiums written increased by $25.9 million, or 76.4%, during the second quarter, mainly within the marine and energy classes. The composite ratio for the specialty business decreased to 72.2% in the second quarter, compared to 76.7% during Q2 last year. The decrease primarily related to favorable loss development within our mortgage and marine and energy classes, partially offset by the offshore platform fire during the quarter.

轉向我們的專業業務，第二季我們的淨承保保費增加了 2,590 萬美元，即 76.4%，主要是在海洋和能源類別。第二季專業業務的綜合比率下降至72.2%，去年第二季為76.7%。這一下降主要與我們的抵押貸款、海洋和能源類別的有利損失發展有關，但部分被本季海上平台火災所抵消。

Moving to our casualty book, net premiums written decreased by $7.4 million, or 8.7%, during the second quarter, primarily related to the Lloyds Syndicate business. The composite ratio for the casualty business was 104.9% in the second quarter, compared to 91.4% in Q2 last year. The increase was partially related to higher loss ratio, driven by reserve strengthening on certain legacy casualty contracts, and partially due to higher acquisition costs on the Lloyds Syndicate business.

轉到我們的傷亡帳簿，第二季淨承保保費減少了 740 萬美元，即 8.7%，主要與勞埃德辛迪加業務有關。第二季意外傷害業務的綜合成本率為104.9%，而去年第二季為91.4%。這一成長部分與較高的損失率有關，部分原因是某些遺留傷亡合約的準備​​金加強，部分是由於勞埃德辛迪加業務的收購成本較高。

Within our property book, net premiums written decreased by $9.6 million, or 36.2%, during the second quarter, driven primarily by the non-renewed homeowners contract that Greg mentioned earlier. The composite ratio for the property business was 127.5% for the second quarter, compared to 122.2% during Q2 last year. The composite ratios during both periods were impacted by the US convective storm losses on the previously mentioned homeowners contract.

在我們的財產帳簿中，第二季淨承保保費減少了 960 萬美元，即 36.2%，這主要是由於格雷格之前提到的未續約房主合約所致。第二季房地產業務綜合成本率為127.5%，去年第二季為122.2%。這兩個時期的綜合比率都受到美國對流風暴損失對前述房主合約的影響。

Total G&A expenses increased by $0.5 million during the second quarter to $10.5 million, compared to $10 million in the second quarter of 2023. The increase is primarily related to growth in headcount, as we added new staff across various departments and locations.

第二季的一般管理費用總額增加了 50 萬美元，達到 1,050 萬美元，而 2023 年第二季為 1,000 萬美元。這一增長主要與員工人數的增長有關，因為我們在各個部門和地點增加了新員工。

We reported total net investment income of $12.6 million during the second quarter, compared to $42.2 million in Q2 last year. Our investment in the Solace Glass fund reported a gain of $4.3 million, or 1.2%, while our innovations investment reported a small gain this quarter. We earned $8.1 million of interest income on our restricted cash and cash equivalents and on our funds deposited at Lloyds.

我們公佈的第二季淨投資總收入為 1,260 萬美元，而去年第二季為 4,220 萬美元。我們對 Solace Glass 基金的投資報告收益為 430 萬美元，即 1.2%，而我們的創新投資報告本季小幅成長。我們透過受限制的現金和現金等價物以及存入勞合社的資金賺取了 810 萬美元的利息收入。

We have generated $40.7 million of cash from operations during the first half of this year. During the second quarter, we prepaid $10 million of our term loans, bringing down our debt ratio to the lowest level since 2018. We have grown our book value per share for seven consecutive quarters.

今年上半年，我們的營運產生了 4,070 萬美元的現金。第二季度，我們預付了 1000 萬美元的定期貸款，將債務比率降至 2018 年以來的最低水平。我們的每股帳面價值連續七個季度成長。

Over the last 12 months, our fully diluted book value per share has grown 11.9% as a result of strong underwriting and investment results. As of June 30, 2024, our fully diluted book value per share was $17.65.

在過去 12 個月中，由於強勁的承銷和投資業績，我們的每股完全攤薄帳面價值成長了 11.9%。截至 2024 年 6 月 30 日，我們完全攤薄後的每股帳面價值為 17.65 美元。

Before we move to the Q&A session, I want to mention that yesterday we announced that we will be hosting our 2024 Investor Day on November 19 in New York City. You can register for the event by contacting Karin Daly, our investor relations representative.

在進入問答環節之前，我想提一下，昨天我們宣布將於 11 月 19 日在紐約舉辦 2024 年投資者日。您可以聯絡我們的投資者關係代表 Karin Daly 報名參加活動。

We look forward to seeing you there. And now I will turn the call back to the operator to open it up for questions. Operator?

我們期待在那裡見到您。現在我將把電話轉回給接線生以供提問。操作員？

We'll now be conducting a question-and-answer session. (Operator Instructions)

我們現在將進行問答環節。（操作員說明）

Eric Hagen, BTIG.

艾瑞克‧哈根，BTIG。

A couple of questions here. I mean, first, just how are you thinking about the opportunity to grow the insurance portfolio, earn higher premiums in light of, just this new narrative surrounding a more sensitive macro backdrop? Do you feel like there's any lines of business that you expect you can maybe lean into and target if competitors are reducing their risk?

這裡有幾個問題。我的意思是，首先，鑑於圍繞著更敏感的宏觀背景的新敘述，您如何考慮擴大保險投資組合、賺取更高保費的機會？如果競爭對手正在降低風險，您是否認為有哪些業務是您希望可以專注和瞄準的？

Sure. This is Greg. Thanks for the great question, Eric. I'll kind of break it into two things. You talked about the macro backdrop. Obviously, let's start with that. Obviously, we're in a period of, I would say, heightened macroeconomic uncertainty, a frothy market, which is showing some pullback uncertainty about interest rates, global political challenges, and elections coming up.

當然。這是格雷格。感謝埃里克提出的好問題。我會把它分成兩件事。您談到了宏觀背景。顯然，讓我們從這個開始。顯然，我想說，我們正處於宏觀經濟不確定性加劇、市場泡沫化的時期，利率、全球政治挑戰和即將到來的選舉顯示出一些回調的不確定性。

So, obviously, that's something that affects all financial services, including insurance and reinsurance companies. I would point out that I think the nature of our portfolio, both on the investment side and on the liability side, makes us more resilient than many other reinsurance companies by nature of the strategies that we employ. So, on the investment side, we hedge a lot of macroeconomic risk.

因此，顯然，這會影響所有金融服務，包括保險和再保險公司。我想指出的是，我認為我們的投資組合的性質，無論是在投資方面還是在負債方面，都使我們由於我們採用的策略的性質而比許多其他再保險公司更具彈性。所以，在投資方面，我們對沖了許多宏觀經濟風險。

And on the liability side, we're not that exposed to longer-tail financial lines, inflation risk. While we write some mortgage reinsurance, it's a rather modest portion of our portfolio. So, no one can escape that exposure, of course, but we feel well-positioned.

在負債方面，我們並沒有受到長尾金融貸款和通膨風險的影響。雖然我們承保了一些抵押貸款再保險，但它在我們的投資組合中只佔相當小的一部分。因此，當然，沒有人能逃脫這種曝光，但我們感覺自己處於有利位置。

And I would perhaps point out to you our experience in 2022, when there was an inflation-driven interest rate shock. And I think Greenlight probably outperformed almost every insurance or reinsurance company in the world on that measure.

我也許會向你們指出我們在 2022 年的經歷，當時出現了通膨驅動的利率衝擊。我認為就這項指標而言，Greenlight 的表現可能優於世界上幾乎所有保險公司或再保險公司。

So, macroeconomic risk, obviously, is a factor. And then within the reinsurance world, in the insurance world, we worry about the cycle that's going on. We remain in a strong position overall. We think it's probably peaked in most lines. But in property and specialty, as I pointed out, we find the rates still to be quite attractive and opportunities for growth.

因此，宏觀經濟風險顯然是一個因素。然後在再保險界、保險界，我們擔心正在發生的循環。總體而言，我們仍然處於強勢地位。我們認為它可能在大多數產品線中達到了頂峰。但正如我所指出的，在房地產和專業領域，我們發現利率仍然相當有吸引力，並且有成長的機會。

Casualty is a more complicated story, and so we're a little bit more cautious on that. But we think our casualty positions are less susceptible to the inflation and nuclear verdict severity problems that many, many companies are struggling with. You highlighted the insurance play, and that's one of our aspects of our business that we're most proud of. Obviously, we're noted for having superb investment acumen, and that's the hallmark of Greenlight Re in many respects.

傷亡是一個更複雜的故事，因此我們對此更加謹慎。但我們認為，我們的傷亡情況不太容易受到通貨膨脹和核裁決嚴重問題的影響，而許多公司正在努力解決這些問題。您強調了保險業務，這是我們最引以為傲的業務方面之一。顯然，我們以卓越的投資頭腦而聞名，這在許多方面都是 Greenlight Re 的標誌。

But coming up close second to that, we share a similar pride in our innovations book. What we have built there under the leadership of Brian O'Reilly is nothing short of extraordinary. And the challenge is, it is innovations. It's forward-looking. It takes courage, and it takes conviction, and there's some learnings along the way that we've had. But we're really excited about the well-diversified portfolio that we have. It's a portfolio that is very niche-oriented.

但緊隨其後的是，我們對我們的創新書也有類似的自豪感。我們在布萊恩·奧萊利 (Brian O'Reilly) 的領導下在那裡所建立的一切都是非凡的。挑戰在於創新。這是前瞻性的。這需要勇氣，需要信念，我們在這過程中學到了一些東西。但我們對我們擁有的多元化投資組合感到非常興奮。這是一個非常面向利基市場的投資組合。

In some cases, linked to new distribution mechanisms of the new economy and growth driven by the new economy. We avoid sort of wholesale commodity reinsurance capacity lines, which are subject to either large event risk or systematic pricing risk.

在某些情況下，與新經濟的新分配機制和新經濟驅動的成長有關。我們避免批發商品再保險能力險種，這些險種要麼面臨重大事件風險，要麼面臨系統性定價風險。

So again, like macroeconomic risk, nobody can avoid the cycles in reinsurance or insurance. We think the innovations book is probably more resilient with respect to those forces. If we do nothing to grow or build our innovations business beyond the positions we have, there will be potential for significant growth just within the existing portfolio.

因此，就像宏觀經濟風險一樣，沒有人可以避免再保險或保險的周期。我們認為，創新書可能對這些力量更具彈性。如果我們不採取任何措施來發展或建立超出我們現有地位的創新業務，那麼現有的投資組合就有顯著成長的潛力。

At the same time, there is a terrific pipeline of new opportunities. Our issue with innovations is not the attractiveness of the business. It's the growth relative to our balance sheet. So key to that is finding capital partners to partner with us in that area. And we've launched initiatives to do just that. I'm highly confident, given the level of interest we've heard to date, that we're going to be able to execute on that plan as well.

同時，還有大量新機會。我們的創新問題不是業務的吸引力。這是相對於我們的資產負債表的成長。因此，關鍵是尋找資本合作夥伴在該領域與我們合作。我們已經推出了一些措施來做到這一點。鑑於我們迄今為止所聽到的興趣程度，我非常有信心我們也將能夠執行該計劃。

You started out by talking about insurance. That is a big opportunity. But we want to keep our net position in proportion with our balance sheet and with the other strategies that we have that includes Solace Glass that includes open market reinsurance that includes innovations. And also will include over time capital management in a small measure as well. All of which is geared towards optimizing and driving ROE, which I would argue is my highest mission and highest goal is to improve shareholder returns over time.

您首先談論了保險。這是一個很大的機會。但我們希望保持我們的淨頭寸與我們的資產負債表以及我們擁有的其他策略成比例，其中包括 Solace Glass，其中包括公開市場再保險，其中包括創新。隨著時間的推移，還將包括少量的資本管理。所有這些都是為了優化和提高股本回報率，我認為這是我的最高使命，最高目標是隨著時間的推移提高股東回報。

That was a really helpful response. I appreciate you guys. We picked up a little bit on the reinsurance portfolio and the investment portfolio. How comfortable do you guys feel with the current capital allocation? Any perspectives on what led to the higher allocation to the investment portfolio? Just in light of how well reserved you guys are, how well you feel you are, how reserved you are right now. What do you think of the scenarios, where you feel like you can bring perhaps even more capital to investment portfolio. Thank you, guys.

這是一個非常有幫助的回應。我很感激你們。我們了解了一些再保險投資組合和投資組合。你們對目前的資本配置感覺如何？對於導致投資組合配置增加的原因有何看法？就看你們有多保守，你們感覺自己有多好，你們現在有多保守。您如何看待這些場景，您覺得您可以為投資組合帶來更多資本。謝謝你們，夥計們。

Yes, I'll take a crack at that. But I'm sure David or Faramarz might want to chime in on that. When you look at our investment portfolio over 20 years, it's delivered superior risk-adjusted returns. True alpha in the financial sense. But when you look at it in the context of a reinsurance company and the risk capital that we allocate to that, it's even better.

是的，我會嘗試一下。但我確信大衛或法拉馬茲可能想插話。當您審視我們 20 年來的投資組合時，您會發現它帶來了卓越的風險調整回報。財務意義上的真正阿爾法。但當你在再保險公司和我們分配給它的風險資本的背景下看待它時，它甚至更好。

So our Solace Glass investment returns on risk capital, as we allocate and think about that scarce resource that we have is the risk-bearing capacity. The returns over the past several years on the Solace Glass have been superior probably the best returning aspect of our business. So it is accretive to us to increase that allocation.

因此，我們的 Solace Glass 投資回報是風險資本，因為我們分配並考慮我們擁有的稀缺資源是風險承受能力。過去幾年，Solace Glass 的回報非常出色，這可能是我們業務回報最好的方面。因此，增加分配對我們來說是有好處的。

If you start increasing it wildly large, then it starts consuming disproportionate amounts of capital, and those returns on risk capital begin to diminish. But it is absolutely accretive to make this increase from 60% to 70%, and we have the excess capacity to do that. So that is, from an economic standpoint, a very smart move to make.

如果你開始大幅增加它，那麼它就會開始消耗不成比例的資本，而創投的回報就會開始減少。但將這一增幅從 60% 提高到 70% 絕對是有增值作用的，而且我們有足夠的產能來做到這一點。因此，從經濟角度來看，這是一個非常明智的舉動。

The open market reinsurance also continues to be generating very attractive, on a pricing basis, risk-adjusted returns. Now that's obviously, the actual returns are going to vary with events. We had a pop in the first quarter from the bridge in Baltimore. We had some unfortunate, severe convective storm losses from that legacy contract that's in runoff. But the ongoing portfolio, we believe, continues to generate very attractive returns on capital. And so we see opportunity to grow there.

公開市場再保險也持續在定價基礎上產生非常有吸引力的風險調整回報。很明顯，實際回報將隨事件而變化。我們在第一節在巴爾的摩的橋上表現出色。不幸的是，我們因徑流中的遺留合約而遭受了一些嚴重的對流風暴損失。但我們相信，正在進行的投資組合將繼續產生非常有吸引力的資本回報。因此我們看到了在那裡發展的機會。

In the future, all good things come to pass. And at some point, prices will not be as attractive, and then we'll have to pare back and adjust our portfolio accordingly. But what I like about Greenlight is the optionality that we have. Innovations is going to be a growing foundation of steady proper business that we have enormous influence and control over. We think attractive margins.

未來，一切美好的事情都會發生。在某些時候，價格將不再那麼有吸引力，然後我們將不得不相應地削減和調整我們的投資組合。但我喜歡 Greenlight 的一點是我們擁有的選擇性。創新將成為我們擁有巨大影響力和控制力的穩定正當業務的不斷增長的基礎。我們認為利潤頗具吸引力。

Open market reinsurance is obviously more cyclical and opportunistic, but we have the option to dial that up and dial it down. And then the investment, we have a terrific amount of optionality in there. We can go long, we can go short, we can be net. We can provide, we think attractive returns in all kinds of market conditions.

公開市場再保險顯然更具週期性和機會主義，但我們可以選擇提高或降低它。然後是投資，我們有很多選擇。我們可以做多，我們可以做空，我們可以淨值。我們可以在各種市場條件下提供我們認為有吸引力的回報。

I want to leave it at that. And then Faramarz and David, if you wanted to either add or correct anything I've just said.

我想就這樣吧。然後法拉馬茲和大衛，如果你們想補充或更正我剛才所說的任何內容。

There's nothing to correct, but I might just add a little bit, just in terms of a little bit of a longer-term perspective for the allocation to the Solace Glass. As probably everybody on the call knows, the company a few years ago went through a period of very significant stress. And we had a large capital loss around 2018, and this triggered a great deal of concern from everybody involved, including the board, including the management, including the rating agencies.

沒有什麼需要糾正的，但我可能只是補充一點，只是從長遠角度來看 Solace Glass 的分配。也許參加電話會議的人都知道，幾年前該公司經歷了一段非常巨大的壓力時期。我們在2018年左右出現了極大的資本損失，這引起了所有相關人員的極大關注，包括董事會、包括管理層、包括評級機構。

The stock obviously performed extremely poorly and deservedly so. This led to a change in the allocation to the managed account, which was in a different form at that time, but subsequently has been renamed and reconstructed as Solace Glass. And we had a significant cut to the allocation that we had.

顯然，該股的表現極為糟糕，這是理所當然的。這導致管理帳戶的分配發生變化，該帳戶當時的形式有所不同，但隨後被重新命名並重組為 Solace Glass。我們大幅削減了現有的撥款。

Since then, I think the period of stress has dissipated. The stress that came from the various actions also impacted the liquidity of the business, because on the reinsurance side, counterparties were demanding more collateral, and the company did not have excess liquidity. We had always had adequate liquidity, but we really didn't have excess liquidity. And so liquidity was a factor in figuring out how much we could reasonably allocate to the investment side.

從那時起，我認為壓力時期已經消失了。各種行動帶來的壓力也影響了業務的流動性，因為在再保險方面，交易對手要求更多的抵押品，而公司沒有多餘的流動性。我們的流動性一直是充足的，但流動性確實沒有過剩。因此，流動性是我們確定可以合理分配給投資者的因素。

Now, over time, as the underwriting results have improved, as the investment results have improved, as the balance sheet has improved, and Faramarz has done a great job on this, we've begun substantially recovering some of the excess collateral that was being posted to counterparties, such that the liquidity position of the company is dramatically better than it was even just a couple of years ago.

現在，隨著時間的推移，隨著承保業績的改善，隨著投資績效的改善，隨著資產負債表的改善，Faramarz 在這方面做得很好，我們已經開始大幅收回一些超額抵押品。給交易對手，使得該公司的流動性狀況比幾年前好得多。

Similarly, I don't want to speak for the rating agencies, but from my perspective, the tone of those conversations has improved materially, and the company is in a better position in all directions.

同樣，我不想代表評級機構發言，但從我的角度來看，這些對話的基調已經有了實質改善，公司在各個方面都處於更好的位置。

Now we have brought on Greg as the new CEO, and he's been in the process over the last few months beginning to think about his framework for how he thinks that the company, under his leadership, should be allocating capital. And I think he hinted at that a bit. The board has been responsive to all of these changes.

現在我們任命格雷格為新任首席執行官，過去幾個月他一直在思考他認為公司在他的領導下應該如何分配資本的框架。我認為他對此有所暗示。董事會對所有這些變化都做出了反應。

I'm pleased that we were able to announce this morning that as of August 1, we allocated an additional 10% of the adjusted equity to the Solace Glass portfolio. And I believe that as things continue to improve, as liquidity improves, the capital position improves, and the performance continues to be sustained at attractive levels, I believe that the board and the management and the rating agencies ultimately over time will become sympathetic towards additional increases to the Solace Glass allocation.

我很高興今天早上我們能夠宣布，自 8 月 1 日起，我們將調整後股權的 10% 額外分配給 Solace Glass 投資組合。我相信，隨著情況不斷改善，隨著流動性的改善，資本狀況的改善，業績繼續保持在有吸引力的水平，我相信董事會、管理層和評級機構最終會隨著時間的推移而變得同情更多的人增加 Solace Glass 的分配。

But it's not going to happen in a big step function. It's going to be maybe more baby steps like we went from [50 to 60], and now we've gone from [60 to 70]. And if we continue progressing, there should be room for further increases in the future.

但這不會發生在大步函數中。就像我們從 [50 到 60] 一樣，這可能會是更小的一步，現在我們已經從[60 至 70]。如果我們繼續進步，未來應該還有進一步成長的空間。

We appreciate you guys and looking forward to Investor Day. Thank you so much.

我們感謝你們，並期待投資者日的到來。太感謝了。

Thank you.

謝謝。

We've reached end of our question-and-answer session. Should you have any further follow-up questions?

我們的問答環節已經結束。您還有其他後續問題嗎？

Please direct them to Karen Daley of The Equity Group Inc. At IR at Greenlight Re dot KY. and she'll be happy to assist you.

請直接聯絡 The Equity Group Inc. IR at Greenlight Re dot KY 的 Karen Daley。她會很樂意為您提供協助。

This now concludes Greenlight Re Second Quarter 2024 earnings conference call. Thank you. You may now disconnect.

Greenlight Re 2024 年第二季財報電話會議至此結束。謝謝。您現在可以斷開連線。