Company: GLRE
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0001385613-25-000079
Chunk: 12

Company: GREENLIGHT CAPITAL RE, LTD.
Filing Date: 2025-08-04
Form: 10-Q
Item: Part I, Item 2
Chunk 12
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Prior Year Reserve Development Ratio

Open Market segment’s prior year reserve development ratio decreased by 0.7 points in Q2 2025 compared to Q2 2024 and increased by 0.8 point in YTD 2025 compared to YTD 2024.  Refer to Note 7 Loss and LAE Reserves to the condensed consolidated financial statements for further details.

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Acquisition cost ratio

The acquisition cost ratio decreased by 3.1 points in Q2 2025 compared to Q2 2024, primarily due to a decrease in acquisition cost ratio for our financial and multiline business, partially offset by an increase in acquisition cost ratio for our specialty line, predominantly driven by growth in quota share reinsurance treaties at higher acquisition cost ratio than for excess of loss treaties.

The key drivers for the improved acquisition cost ratio relating to the financial and multiline business were:

•Financial: Driven by our transactional liability business due to lower profit commission as a result of adverse loss reserve development in the current quarter. Additionally, the acquisition cost ratio for the mortgage business was higher in Q2 2024 due to an increase in profit commission on prior years’ treaties.

•Multiline: Driven predominantly from our FAL business, where in Q2 2024 we had increased our previously estimated acquisition costs for certain 2023 and 2024 FAL business based on updated reporting received; whereas there were minor revisions in Q2 2025. 

The acquisition cost ratio increased by 0.6 points in YTD 2025 compared to YTD 2024, primarily due to the change in business mix, coupled with improved acquisition cost ratio for the financial line for the same reason as noted for Q2 2025. This was partially offset by an increase in acquisition cost ratio for our specialty line predominantly driven by growth in quota share reinsurance treaties, which have a higher acquisition cost ratio than for excess of loss treaties.

Underwriting expense ratio

The underwriting expense ratio decreased by 0.1 points to 3.5% in Q2 2025 compared to Q2 2024, mainly due to an increase in net premiums earned in the Open Market segment.

The underwriting expense ratio decreased by 0.8 points to 3.4% in YTD 2025 compared to YTD 2024, mainly due to an increase in net premiums earned, coupled with lower stock compensation expense attributable to the Open Market segment.  Additionally, interest expense from deposit