Greenlight Reinsurance, Ltd.

Good day, and thank you for joining the Green Light Re-Conference call for the fourth quarter of 2021 earnings. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Please note, this event is being recorded. 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, 2021, 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 1 to be added to the question queue. I would now like to turn the conference over to Greenlight Rees, CEO, Mr. Simon Burton. Please go ahead, sir.

Good morning, everyone, and thanks for joining the call. Before we get started, I'd like to take a moment to recognize the adversity faced by the Ukrainian people over the past two weeks and express my hope for a quick end to the hostilities. I will discuss this conflict further in a few minutes. Let's start with the review of our financial performance and our positioning for the year ahead. In the fourth quarter of 2021, we grew book value per share by 5.6%, with positive contributions from each of underwriting, strategic investments, and soulless glass, partly offset by G&A and interest expenses. For the fall year 2021, it was another challenging year for the insurance industry. as an unusually long list of natural catastrophes resulted in the second highest level of cat losses in history. This cat activity added around six points to our combined ratio of 100.9% for the year. There were also headwinds in the auto portfolio as car repair and replacement costs suffered rapid and severe inflationary pressure. Although this was offset by reserve releases, from the runoff auto book that performed better than expected. Recall that we have been steadily reducing our exposure to the auto class over the last few years with the final large step down completed on January 1st, 2022. These headwinds aside, I'm pleased with the performance of the go forward underwriting business. The performance of strategic investments was a highlight of the year with five consecutive quarters of gains. Innovations investments generated unrealized gains of $19.6 million on a carry value of $22.9 million as of January 1st, 2021. We also realized a $10.5 million gain net of tax in the first quarter of 2021 from the divestment of our position in a more traditional MGA. Next, I'd like to recap our strategy. and highlight some of the changes we have made over the past four years. First, a summary of our open market underwriting strategy. When I joined the company in 2017, our portfolio was dominated by a small number of large accounts. Our underwriting is now considerably more diverse by line of business, with lower individual counterparty risk, and with higher margin potential. Of course, this diversification brings exposure to a wider array of global insurance events. but I believe that assuming risk that's properly priced, diversified, and risk managed is key to achieving optimal underwriting results. This rebalancing of the portfolio took some time, but I am pleased to report that with the renewal actions we took on January 1st, 2022, this process is now complete. Here are a couple of highlights to give you a sense of the changes. In 2017, auto represented 55% of our premium, Today, it's 2%. In 2017, the top five accounts amounted to 72% of total premium. We estimate this will be roughly 20% in 2022. Looking at the current diversified portfolio of risks, there are a few key characteristics. We have grown our Lloyds partnership significantly, which aligns with our view that Lloyds has a strong track record of outperformance in favorable market conditions. We have grown our excessive loss business, resulting in a more conventional balance between excessive loss and quota share. We are concerned about the risk of inflation on claims costs, and as a result, we are writing a relatively low volume of long-tailed exposure. Greenlight REIT does not have any direct relationships with Russian insurers, brokers, or any other Russian companies or individuals. We expect that our clients are strictly adhering to sanctions on Russia. The impact of sanctions on our premium volume is likely to be minor. The war will likely present us with loss exposure from our specialty book. We have received no specific information on damage to insured assets and no claim notices, so we have not yet developed an estimate of losses incurred. Moving away from the war and back to Greenlight's operational strategy, I would like to discuss the partnerships created by our innovations unit. We launched Greenlight Re innovations in March 2018, and over the last four years, we have built one of the most active and respected teams in the early stage InsurTech space. Over this period, we have made 20 investments in InsurTechs, mainly MGAs offering a differentiated product or distribution strategy. While the prospect of capital appreciation is attractive, Our primary focus is on the potential for underwriting opportunities that emerge over time as our partners scale their businesses. With our visibility into their operations as an early stage investor, often combined with lower than market placement expense, these risks should, over time, be more profitable than comparable open market business. In 2021, 6% of our premium was linked to our innovation portfolio, and this proportion will increase in 2022. Industry-wide, there has been significant interest in InsurTech over the last 18 months, and a number of our competitors have started to adopt a strategy similar to ours. We have seen some eye-watering valuations and high-profile share price collapses for some of the publicly quoted InsurTechs who have struggled to contain costs driven by their rapid growth. Each of our portfolio companies is focused on profitability, rather than revenue growth alone. And a key part of our investment process is identifying partners who understand the importance of underwriting profits. In January, we announced that we will be launching Lloyds Syndicate 3456, which will focus exclusively on insure tech business sourced from our innovations unit. This syndicate will enable us to further support our partners by providing them with access to the Lloyds brand, rating, and global licenses. In combination with our investment position in Solus Glass, we are excited about the potential for each area of the business to create shareholder value in 2022. I'm confident that the company is better positioned now than at any time since I became CEO. Now I'd like to turn the call over to David.

Thanks, Simon, and good morning, everyone. The Solus Glass Fund returned 9.9% in the fourth quarter. Longs contributed 11.8%. Shorts contributed 0.2% and macro detracted 0.7%. During the quarter, the S&P 500 index returned 11%. Our long positions in Bright House Financial, Kim Moore's, and Greenberg Partners were our largest positive contributors. An equity index hedge and individual short position and our long position in Dannemere Scientific were our biggest detractors. Bright House Financial gained 15% during the quarter. The company reported another strong result and continued its aggressive and accretive share repurchases, which totaled 12% in 2021. Since the spinoff from MetLife in 2017, the company has reduced its share count by about 35%, and we expect it to repurchase another double-digit percentage of the shares in 2022. The stock currently trades at a 3.0 times P.E. multiple of its expected 2022 earnings and 33% of book value. The Moore stock advanced 15% during the quarter as titanium dioxide supply remains tight and pricing continues to escalate. We believe both the TiO2 segment as well as the fluoropolymer businesses are largely sold out for the coming quarters. Greenbrick partner stock Price advanced 48% in the fourth quarter, but there wasn't anything obvious to us that was responsible for this. Last week, Greenberg reported its fourth quarter and full year results. The company earned $3.72 per share in 2021, which was up 65% year-over-year and 200% cumulatively over the past two years. Analysts expect the company to continue its growth this year. as current projections are for EPS of $4.20 in 2022. The stock currently trades at an undemanding 5.2 times of these expected results. Danimer Scientific shares fell 48% in the fourth quarter. We believe the primary driver was the mismanagement of its capital structure. In December, the company suddenly decided it needed to raise money, and a convertible bond was hastily issued on terms that were unattractive to the company. We used this opportunity to swap most of our investment from common stock to the convertible note. This way, we moved up a level in the capital structure, we'll collect a coupon, and given favorable terms, we'll participate in most of the upside should it develop. We continue to believe that there will be enormous demand for the company's biodegradable plastic. Looking at the current environment after a number of challenging years for value investing... Combined with what we consider to be another bubble in certain speculative stocks, we believe that tide has now turned. We believe that inflation is now a structural problem, and we are positioned to benefit from it in our long, short, and macro positions. The Solace Glass portfolio returned 3.4% in February and has returned 2.7% year-to-date. We believe the tide turned a year ago and is showing up in our performance. Over the last 12 months, and at February 28th, Solace Glass has returned 16.5%. Net exposure was approximately 39% in the investment portfolio at the end of 2021, and roughly 29% at the end of February. Let me say a few things about Russia's invasion of Ukraine. There are now over 2 million displaced Ukrainians and untold dead. And as the crisis extends, the numbers will continue to expand. From an investment perspective, just as the pandemic accelerated a number of trends that were already in place, so too is the current turn of events. We already have an inflation problem, which the war is certain to accelerate. Similarly, the bubble in speculative stocks seems to have topped a year ago, and the recent stock market turbulence appears to be accelerating the unwind of the excesses. With relatively tight positioning and a pro-inflation posture, While we did not anticipate this war, we are reasonably well positioned at the outset of the conflict. Now I'd like to turn the call over to Neil to discuss the financial results.