Greenlight Reinsurance, Ltd.

Thank you for joining the GreenLight RE conference call for the third quarter of 2021 earnings. The company reminds you that forward-looking statements that may be made in this call are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, but rather reflect the company's current expectations, estimates, and predictions about future results and events and are subject to risks, uncertainties, and assumptions, including those enumerated in the company's Form 10-K for the year ended December 31, 2020. and other documents filed by the company with the SEC. If one or more risks or uncertainties materialize, or if the company's underlying assumptions prove to be incorrect, actual results may vary materially from what the company projects. The company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. After the prepared remarks, we will be conducting a question and answer session. For those that would like to ask a question, please press star, then one, to be added to the question queue. Please note today's event is being recorded. I would now like to turn the conference over to Greenlight RE's CEO, Mr. Simon Burton. Please go ahead, sir.

Good morning, everyone, and thanks for joining today's call. In the third quarter, the reinsurance industry was challenged by an unusually high incidence of large losses related to cat events. Our exposure to Hurricane Ida, flooding and hailstorms in Europe, and riots in South Africa drove us to an underwriting loss for the quarter with a combined ratio of 109.3%. Excluding the impact of catastrophes and minor reserve adjustments, the adjusted combined ratio for the quarter was 90.3%. We have seen a steady reduction in our adjusted combined ratio over the past few quarters, which reflects improvements in both the quality of our underwriting business and in the overall rating environment. I'd like to summarize some of the major movements in written premium by class during the quarter. We are now seeing the reduction in motor liability premium that I discussed in the past two investor calls. We believe the reasoning behind our decision to reduce exposure has been validated, as we are seeing an uptick in accident frequency, along with increases in claim severity driven by elevated repair costs, as U.S. drivers have reverted to normal driving habits over the past few months. Our auto exposure will likely take another step down in 2022, as we have decided not to renew a further portion of this book at January 1st. In the financial class, written premium increased during the quarter, driven mainly by a rebound in demand for reps and warranty insurance from M&A activity that had decreased in earlier stages of the pandemic. Accident and health is a fairly small class for us, but a couple of things are going on there. First, our traditional ANH business has reduced as we replace it with support for our innovations partners who are doing a great job on offering new products and disrupting an otherwise inefficient class. Second, we have restructured some of our exposure from quota share to excessive loss with equal or greater dollar margin potential, but much lower written premium. Looking forward to 2022, it's not clear how the market will respond to yet another loss-making year in the property catastrophe class. Rate increases last January were disappointing as new capital arrived to replenish supply. which leaves us skeptical that sufficient capacity will be removed to support the needed catastrophe price improvements at this year end. On the other hand, we expect the cat losses this year will help support and extend the generally favorable market conditions in most other classes. The continued low investment interest rate environment provides further support for pricing conditions overall. Our innovations unit continues to perform well, with an investment gain of $9.6 million during the quarter, which is an increase of 31% from the prior quarter carried value. While the investment success is the welcome result of great execution by the innovations team, our central objective continues to be to enhance our underwriting products and quality of return by establishing a range of proprietary strategic partnerships. Here to date, innovations business represents approximately 6% of our total written premium. We see the potential for significant growth from innovations-derived underwriting opportunities going forward. Finally, we completed our annual review with AMBEST last quarter, which resulted in reaffirmation of our A- rating and an uplift in Outlook to stable. We're pleased that AMBEST concurs with our own view of balance sheet strength, underwriting prospects, and the compelling strategic potential of our innovations business. Now I'd like to turn the call over to David.

Thanks, Simon, and good morning, everyone. The Solace Glass Fund returned negative 2.7% in the third quarter. Longs detracted 3.5%, shorts contributed positive 1.1%, and macro was flat. During the quarter, the S&P 500 index returned 0.6%. Our long positions in GreenBrick Partners and Comoros were our largest detractors. Positive contributors included our long position in Atlas Air Worldwide and our short exposure to several so-called story stocks. Our largest position, GreenBrick Partners, held an analyst day in August. At the meeting, the company highlighted that its revenues have compounded at 28 percent annually since its 2014 IPO. In 2020, the company earned $2.24 per share, which is a 93 percent increase from 2019. The analyst community has taken its estimates for the year and next higher, and they now expect the company to earn $4.06 per share in 2022. This would represent a remarkable 250 percent cumulative growth in its bottom line in three years. These days, it's not uncommon for the market to reward a company experiencing this amount of growth with a double-digit valuation multiple on its revenues or an above-market multiple on its earnings. Greenbrick ended the quarter down 10% to $20.52 and was valued at just 5.6 times 2021 expected earnings. Our long position in Atlas Air was the largest positive contributor as the stock advanced 20% during the third quarter. The company had a nice beat on reported second quarter earnings and gave strong third quarter earnings guidance, signed a number of new multi-year customer contracts. Atlas continues to benefit from what now appears to be a structural support shortage of air cargo capacity. The air freight market is benefiting from e-commerce growth and global supply chain disruptions. Meanwhile, air freight supply has shrunk as international passenger belly capacity remains significantly below pre-pandemic levels, and there are long lead times to deliver new freighters. Atlas trades at a P.E. multiple of around five times. Lately, it feels like many of our longs have been exceeding both consensus and our own often more optimistic expectations for their operating performance, but the share price reactions to these positive developments have been minimal. We believe this dynamic ultimately cannot persist, and if the stocks don't re-rate higher, it will eventually be resolved through share repurchases. There are several companies in our portfolio that appear poised to return their current market caps to shareholders over the next few years. As we continue to hold the quaint view that shares represent a fractional ownership of a business, as the denominator of shares goes down, the fraction of the business that each share represents goes up. Year-to-date, through October, Solace Glass has returned 0.7 percent. Net exposure was approximately 35 percent long in the investment portfolio at the end of the third quarter and roughly 46 percent at the end of October. While our underwriting suffered in the third quarter from several CAD events, that Simon discussed, the underlying reinsurance trends are favorable. We continue to make progress with the overall repositioning of our portfolio in addition to the reaffirmation of our AM Best A- rating with a stable outlook. We just returned from a board meeting with our new board members, and I want to welcome Urs, Victoria, and John to the team. It was terrific to have fresh viewpoints from industry practitioners that should help enhance our business and strategy over time. Now I'd like to turn the call over to Neil to discuss the financial results.