Company: GLRE
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0001385613-25-000113
Chunk: 78

Company: GREENLIGHT CAPITAL RE, LTD.
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 1
Chunk 78
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37

The acquisition cost ratio decreased by 1.0 percentage points to 30.8% in YTD 2025 compared to YTD 2024. The decrease was predominantly driven by:

•a change in business mix;

•a decrease in acquisition cost ratio for our specialty line driven mainly by non-renewal of certain quota share reinsurance business that had higher acquisition costs; and

•a decrease in acquisition cost ratio for our financial line predominantly due to a quota share reinsurance program that experienced adverse loss development, resulting in lower commission costs for YTD 2025.

The above was partially offset by the same factors that contributed to the increase for Q3 2025.

Underwriting expense ratio

The underwriting expense ratio increased by 4.1 percentage points and 4.0 percentage points in Q3 2025 and YTD 2025, respectively compared to the same periods in 2024, primarily due to an increase in incentive compensation expense based on the Company’s stronger consolidated underwriting results, coupled with additional headcount relating to the Innovations segment. Additionally, the underwriting expense ratio for YTD 2025 was negatively impacted by the lower net premiums earned compared to YTD 2024.

Net investment income (loss)

For Q3 2025, the Innovations segment reported a net investment loss of $11.3 million, compared to net investment income of $0.3 million in Q3 2024. The decrease in investment performance was predominantly driven from our Innovations private equity portfolio, primarily due to:

•$16.4 million reversal of previously recognized unrealized gain (impairment charge) relating to one of our holdings based on a pending financing round at a reduced enterprise value.

For the above impairment charge, we calculated the fair value using valuation models incorporating significant unobservable inputs. These include discounted cash flow analyses and option pricing models. The key inputs and assumptions used in these models include, but are not limited to, projected cash flows provided by the investee’s management, discount rates, growth rates, volatility assumptions, and current market multiples.

Partially offsetting the above impairment charge, we had the following unrealized and realized gains:

•$3.9 million of unrealized gains from two holdings as a result of latest closed financing rounds by the respective investees, which the fair value was based on observable price changes in orderly transactions; and

•$0.7 million of realized gain on a partial sale relating to one of the above two holdings.