Insiders ranked by realized 90-day signed return on their open-market trades at Greenlight Capital Re, Ltd.. Minimum 3 scored trades. Returns are signed - a sale followed by a rally counts against the insider.
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.11pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.02pp
Flat
Net-tone change vs last year's 10-K.
MD&A
+0.24pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
adversely+2
liquidation+1
impairment+1
criminal+1
offence+1
Positive rising
innovations+1
enhance+1
Risk Factors (Item 1A)
18,154 words
ITEM 1A. RISK FACTORS
The following risk factors could result in a significant or material adverse effect on our results of operations or financial condition.
Risks Relating to Our Business
Our results of operations fluctuate from period to period and may not be indicative of our long-term prospects.
Our results of operations fluctuate from period to period due to a variety of factors, including:
our assessment of the quality of available reinsurance and renewal opportunities;
loss experience on our reinsurance contracts;
reinsurance contract pricing;
the volume and mix of reinsurance products we underwrite; and
our ability to assess and integrate our risk management strategy.
Accordingly, our short-term results of operations may not be indicative of our long-term prospects.
If our losses and LAE greatly exceed our loss reserves, our financial condition may be materially and adversely affected.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
loss+8
impairment+5
volatility+2
adverse+1
impaired+1
Positive rising
innovations+8
strong+4
opportunities+4
stronger+3
gains+1
MD&A (Item 7)
10,784 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management’s discussion and analysis (“MD&A”) of the financial condition and results of operations for the years ended December 31, 2025, and 2024. Comparisons between 2024 and 2023 have been omitted from this Annual Report, but may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC. Accordingly, this information is incorporated by reference.
This discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto presented in “Part II, Item 8. Financial Statements and Supplementary Data ” of this Annual Report. Unless otherwise noted, tabular dollars are in thousands, except per share amounts. Amounts may not reconcile due to rounding differences.
Our results of operations and financial condition depend upon our ability to accurately assess the potential losses and loss adjustment expenses associated with the risks we reinsure. Reserves are liabilities established by insurers and reinsurers to reflect the estimated cost of claims payments and the related expenses that the insurer or reinsurer will ultimately be required to pay in respect of insurance or reinsurance contracts it has written. We estimate these reserves based upon facts and circumstances then known, estimates of future trends in claim severity, and other variable factors. The inherent uncertainties associated with estimating loss reserves are generally greater for reinsurance companies than for primary insurance companies due primarily to:
the lapse of time from the occurrence of an event to the reporting of the claim and the ultimate resolution or settlement of the claim;
the settlement delays associated with the reporting delays;
the diversity of development patterns among different types of reinsurance treaties;
the necessary reliance on clients for information regarding claims; and
other macro-economic changes which may impact reserves generally.
Our reserve estimates may be less reliable than the reserve estimations of a reinsurer with a greater volume of business and more established loss history. Actual losses and loss adjustment expenses paid may deviate substantially from the estimates of our loss reserves contained in our financial statements and could negatively affect our results of operations. If we determine our loss reserves to be inadequate, we will increase our loss reserves with a corresponding reduction in our net income and capital in the period in which we identify the deficiency. If our losses and loss adjustment expenses greatly exceed our loss reserves, our financial condition may be materially and adversely affected. For a summary of the effects of reserve re-estimation on prior year reserves and net income, see “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates , Loss and Loss Adjustment Expense Reserves ”.
Our property and casualty reinsurance operations make us vulnerable to losses from catastrophes and may cause our results of operations to vary significantly from period to period.
Certain of our reinsurance operations expose us to claims arising out of unpredictablecatastrophic events, including losses from severe weather and other natural catastrophes and man-made disasters such as acts of war or terrorism. The incidence and severity of catastrophes are inherently unpredictable, with climate change continuing to add to such unpredictability as well as increasing the frequency and severity of events. To the extent climate
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change produces extreme changes in temperatures and weather patterns, it could impact the frequency or severity of weather including, but not limited to, hurricanes, tornadoes, freezes, droughts, other storms, and wildfires. These changes in weather patterns could also affect the frequency and severity of other natural catastrophe events to which we may be exposed. Further, such catastrophes could impact the affordability and availability of homeowners insurance, which could impact pricing. Additionally, increases in the value and geographic concentration of insured property, particularly along coastal regions, could cause the cost of such losses to increase.
Catastrophiclosses are a function of the insured exposure in the affected area and the event’s severity. Claims from catastrophic events could cause substantial volatility in our financial results for any fiscal quarter or year and could materially and adversely affect our business, financial condition and results of operations.
Finally, given the scientific uncertainty of predicting the effect of climate cycles and global climate change on the frequency and severity of natural catastrophes and the lack of adequate predictive tools, we may not be able to adequately model the associated exposures and potential losses in connection with such catastrophes which could have a material adverse effect on our business, financial condition or operating results.
We may need additional capital in the future in order to operate our business, and such capital may not be available to us or may not be available to us on favorable terms.
We may need to raise additional capital in the future through public or private equity or debt offerings or otherwise in order to:
fund liquidity needs or replace lost capital resulting from underwriting or investment losses;
meet rating agency capital requirements;
satisfy collateral requirements that may be imposed by our clients or by regulators;
meet applicable statutory jurisdiction requirements; or
respond to competitive pressures.
Additional capital may not be available on terms favorable to us, or at all. Increases in interest rates could result in higher interest expense on debt. Further, any additional capital raised through the sale of equity could dilute existing ownership interest in our company and may cause the market price of our ordinary shares to decline. Additional capital raised through the issuance of debt may result in creditors having rights, preferences, and privileges senior or otherwise superior to those of our ordinary shares.
Competitors with greater resources may make it difficult for us to effectively market our products or offer our products at a profit.
The reinsurance industry is highly competitive. We compete with major reinsurers, many of which have substantially greater financial, marketing, and management resources than we do, as well as smaller companies, other niche reinsurers, alternative risk providers (such as captives, catastrophe bonds and other forms of insurance linked securities), and Lloyd’s syndicates and their related entities. Competition in the types of business that we underwrite is based on many factors, including:
the perceived financial strength and general reputation of the reinsurer, including its level of service, trustworthiness, business practices, and other subjective matters;
ratings assigned by independent rating agencies;
relationships with reinsurance brokers;
pricing (for instance, significant capacity continues to enter into the market in the form of insurance linked securities, which may have the potential to impact and/or reduce reinsurance pricing and rates);
terms and conditions of products offered;
speed of claims payment; and
the experience and reputation of the members of our underwriting team in the particular lines of reinsurance we seek to underwrite.
We cannot assure you that we will be able to continue to compete successfully in the reinsurance market. Our failure to continue to compete effectively could materially and adversely affect our financial condition and results of
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operations, and may increase the likelihood that we will be deemed a passive foreign investment company or an investment company. See “— Risks Relating to Taxation — United States persons who own ordinary shares may be subject to United States federal income taxation on our undistributed earnings and may recognize ordinary income upon disposition of ordinary shares. ” and “ — Risks Relating to Insurance and Other Regulations — We are subject to the risk of possibly becoming an investment company under U.S. federal securities law .”
Consolidation in the reinsurance industry could adversely affect us.
The reinsurance industry, including our competitors, customers, and insurance and reinsurance brokers, has experienced significant consolidation over the last several years. Consolidated entities may try to use their enhanced market power to negotiate price reductions for our products and services. If competitive pressures reduce our prices, we would expect to write less business. If the insurance industry further consolidates, competition for customers may intensify, and the importance of acquiring and servicing each customer may become greater. We could incur greater expenses relating to customer acquisition and retention, further reducing our operating margins. In addition, insurance companies that merge may be able to spread their risks across a larger capital base so that they require less reinsurance. The number of companies offering retrocessional reinsurance may decline. Reinsurance intermediaries could also consolidate, potentially adversely impacting our ability to access business and distribute our products. We could also experience more robust competition from larger, better-capitalized competitors. Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.
Challenging economic or political conditions may adversely impact our results of operations or financial condition.
Our results of operations and financial condition may be materially adversely affected by a challenging economic market, such as a highly inflationary environment. Inflation can be caused by any number of factors including, but not limited to, expansionary monetary policy and deficit spending by the government, a growing economy, rising wages, an imbalance of the supply and demand for goods, supply chain disruptions and the imposition of tariffs. Recently, for instance, the U.S. administration imposed and/or announced (and in some cases postponed or changed) tariffs on imports from various countries and on certain products, which may lead to unpredictable economic consequences including inflation or trade wars. Our operations are susceptible to inflation, and underestimating inflation levels could result in underpricing the risks we reinsure because premiums are established before the ultimate amounts of losses and LAE are known. While we consider the potential effects of inflation when setting premium rates, our premiums may not fully offset the ultimate effects of inflation. Additionally, our reserving models include assumptions about future payments for the settlement of claims and claims-handling expenses, such as the value of replacing property, associated labor costs for the property business we write, and litigation costs. The global inflationary environment in the last few years has resulted in an increase in our projected future claim costs, resulting in adverseloss reserve development. While the global inflationary pressures have abated from their recent highs, any subsequent increase in inflation may lead to an increase in our loss reserves with a corresponding reduction in net income in the period the deficiency is identified, which may have a material adverse effect on our results of operations and financial condition. Unanticipated higher inflation could also lead to higher interest rates, potentially negatively impacting the value of any rate-sensitive financial instruments held by Solasglas and could also impact our Innovations investments and cause us to incur higher interest expense on our debt. See “— Risks Related to Our Solasglas Investment Strategy ” and “— Risks Related to Our Innovations Strategy .”
Further, our results of operations and financial condition may also be materially adversely affected by a challenging political climate, including events such as military actions, invasions, wars, civil unrest and terrorist activities and the imposition of sanctions and importation limitations. For example, the ongoing conflict between Russia and Ukraine and the resulting responses have led to disruption, instability and volatility in global markets and industries. Although the severity and duration of the ongoing Ukraine conflict is impossible to predict, the continuing active conflict could lead to further economic uncertainty, represented by significant and prolongedvolatility in commodity prices, credit and capital markets, as well as supply chain interruptions. Due to the widespread impact of the ongoing conflict, it is likely to indirectly impact the markets in which we operate.
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Emerging claim and coverage issues have had and may continue to adversely impact our business and results.
As industry practices and social, political, legal, judicial, and regulatory conditions change, unexpected issues related to claims and coverage have emerged and adversely affected our results. Examples of emerging claims and coverage issues include, but are not limited to:
new theories of liability and disputes regarding medical causation with respect to certain diseases;
assignment-of-benefits agreements, where rights of insurance claims and benefits of the insurance policy are transferred to third parties, which can result in inflated repair costs and legal expenses to insurers and reinsurers;
claims related to political unrest, geopolitical instability, or other politically driven events, such as the conflict in the Middle East, and the military conflict between Russia and Ukraine, including lossclaims relating to expropriation, forcedabandonment, license cancellation, trade embargo, contract frustration, non-payment, war on land or political violence (including terrorism, revolution, insurrection, and civil unrest);
claims related to data security breaches, information system failures, or cyber-attacks; and
claims related to business interruption including protocols enlisted by governments in connection with pandemics, and ransomware and cyber-attacks.
For instance, our specialty line of business is exposed to aviation losses emanating from the conflict between Russia and Ukraine and the impact of sanctions imposed on Russia that left a number of leased aircraft stranded in Russia. Given the uniqueness of the situation, it is impossible to determine whether and how potential losses may ultimately occur, which will depend on such factors as judicial rulings interpreting applicable coverages and contracts in place and the future behavior of the Russian government and airlines.
Additionally, various provisions of our contracts, such as limitations or exclusions from coverage or choice of forum, may be difficult to enforce in the manner we intend due to, among other things, disputes relating to coverage and choice of legal forum. These issues may adversely affect our business by either extending coverage beyond the period that we intended or by increasing the number or size of claims. In some instances, these changes may not manifest themselves until many years after we have issued reinsurance contracts that are affected by these changes. As a result, we may not be able to ascertain the full extent of our liabilities under our reinsurance contracts for many years following the issuance of our contracts.
The property and casualty reinsurance market is affected by cyclical trends.
We write reinsurance in the property and casualty markets, which are subject to pricing cycles. These cycles, as well as other factors that influence aggregate supply and demand for property and casualty reinsurance products, are outside our control. Primary insurers’ underwriting results, prevailing general economic and market conditions, liability retention decisions of companies, and primary insurers and reinsurance premium rates influence the demand for property and casualty reinsurance. Prevailing prices and available surplus to support assumed business influence reinsurance supply. Supply may fluctuate in response to changes in return on capital realized in the reinsurance industry, the frequency and severity of losses, and prevailing general economic and market conditions.
As a result, the reinsurance business historically has been a cyclical industry characterized by periods of intense price competition due to high levels of available underwriting capacity and periods when shortages of capacity have permitted favorable premium levels and changes in terms and conditions. The supply of available reinsurance capital could increase in future years, either due to capital provided by new entrants or by the commitment of additional capital by existing insurers or reinsurers.
Continued increases in the supply of reinsurance may have consequences for the reinsurance industry generally and for us, including fewer contracts written, lower premium rates, increased expenses for customer acquisition and retention, less favorable policy terms and conditions, and/or lower premium volume. The effects of cyclicality could materially and adversely affect our financial condition and results of operations.
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A downgrade or withdrawal of our A.M. Best ratings would materially and adversely affect our ability to implement our business strategy.
If A.M. Bestdowngrades or withdraws either of our ratings, we could be severely limited or prevented from writing any new reinsurance contracts, which would materially and adversely affect our ability to implement our business strategy. Additionally, if A.M. Bestdowngrades or withdraws our ratings, we cannot provide assurance that our regulators, CIMA and the Central Bank of Ireland, would continue to authorize our current business strategy and investment strategy. See “ — Risks Relating to Insurance and Other Regulations – Any suspension or revocation of our reinsurance licenses would materially and adversely impact our ability to do business and implement our business strategy. ”
A.M. Best’s current rating for Greenlight Re is “A (Excellent”) and the outlook is stable. A.M. Best periodically reviews our ratings and may revise one or more of our ratings downward or revoke them at its sole discretion based primarily on its analysis of our balance sheet strength, operating performance, and business profile. Potential developments that may affect such an analysis include:
if A.M. Best alters its capital adequacy assessment methodology in a manner that would adversely affect the rating of our reinsurance entities;
if A.M. Best alters its approach regarding our Solasglas investment strategy or our Innovations investments;
if our actual losses significantly exceed our loss reserves;
if unfavorable financial or market trends impact us;
if we change our business practices from our organizational business plan in a manner that no longer supports our A.M. Best ratings;
if we are unable to retain our senior management and other key personnel or implement succession plans; or
if our investments incur significant losses.
Substantially all of our assumed reinsurance contracts contain provisions that permit our clients to cancel the contract or require additional collateral in the event of a downgrade in our A.M. Best ratings below specified levels (generally below “A-”) or a reduction of our capital or surplus below specified levels over the course of the agreement.
We expect that similar provisions will also be included in future contracts. Whether a client would exercise such cancellation rights would likely depend on, among other things, the prevailing market conditions, the degree of unexpired coverage, and the pricing and availability of replacement reinsurance coverage. We cannot predict how many of our clients would ultimately exercise such rights. The exercise of such rights in the aggregate could significantly affect our financial condition, results of operations, and our underwriting capacity.
Modeling risks are inherent in our business.
We believe that our modeling is critical to our business. We utilize modeling tools to facilitate the pricing, reserving, and risk management of our reinsurance portfolio. These models help us to control risk accumulation, inform management and other stakeholders of capital requirements and to improve the risk/return profile or minimize the amount of capital required to cover the risks in each reinsurance contract. However, given the inherent uncertainty of modeling techniques and the application of such techniques, these models and databases may not accurately address the emergence of a variety of matters that might be deemed to impact certain of our coverages. These models have been developed internally, and in some cases, they make use of third-party software. The construction of these models and the selection of assumptions require significant actuarial judgment. Furthermore, these models typically rely on either cedent or industry data, which may be incomplete or may be subject to errors. Accordingly, these models, and the assumptions and judgments made in connection therewith, may understate the exposures we are assuming, and our financial results may be materially and adversely impacted.
Technology breaches or failures, including those resulting from a malicious ransomware or cyber-attack on us or our business partners and service providers, could disrupt or otherwise negatively impact our business.
Our information technology and application systems have been an important part of our underwriting process and our ability to compete successfully. We have also licensed certain systems and data from third parties. We cannot
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be certain that we will have access to these service providers or that our information technology or application systems will continue to operate as intended. In addition, we cannot be certain that we would be able to replace these systems without slowing our underwriting response time. Like all companies, we have information technology and application systems that are vulnerable to data breaches, interruptions or failures due to events that may be beyond our control, including, but not limited to, natural disasters, theft, terrorist attacks, malicious ransomware cyber-attacks, computer viruses, hackers and general technology failures. In addition, artificial intelligence technologies are evolving at a fast pace and being adopted, which may increase potential cybersecurity risks.
A major defect or failure in our internal controls or information technology and application systems could result in management distraction, a violation of applicable privacy or other laws, harm our reputation, a loss of customers, or monetary fines or penalties or otherwise increased expenses. We believe appropriate controls and mitigation procedures are in place to prevent significant data breaches, interruptions, or failures in, information technology and application systems. However, internal controls provide only a reasonable, not absolute, assurance as to the absence of errors or irregularities, and the ineffectiveness of such controls and procedures could have a material adverse effect on our business.
The cybersecurity regulatory environment is evolving, and we expect the costs of complying with new or developing regulatory requirements to increase. These laws and regulations vary country to country and state to state, but they generally require the establishment of programs to detect and prevent unauthorized access to personal data and to mitigate theft of personal data. For example, the General Data Protection Regulation (“GDPR”), which establishes uniform data privacy laws across the European Union (“EU”) is effective for all EU member states. The GDPR anticipates the processing of data for reinsurance and other purposes and applies standards and rules that covered entities must establish and monitor with respect to such processing and use. As our operations expand to other jurisdictions, we will be required to comply with cybersecurity laws in those jurisdictions, which will further increase our cost of compliance. See “Part 1, Item 1. Business - Regulations ” and “Part 1C. Cybersecurity .”
The loss of significant brokers or customers, could materially and adversely affect our business, financial condition and results of operations.
A significant portion of our business is placed through brokered transactions (for Open Market segment) or direct placements (for Innovations segment). For the Open Market segment, our four largest brokers each accounted for more than 10% of our gross written premiums, and in the aggregate, they accounted for approximately 70.5% of the segment’s gross premiums written in 2025. For the Innovations segment, we had six customers that accounted for 53.6% of the segment’s gross premiums written in 2025. Accordingly, we are exposed to concentration risk for both Open Market and Innovations segments. To lose or fail to expand all or a substantial portion of the business provided through brokers or direct customers could materially and adversely affect our business, financial condition and results of operations.
We depend on our clients’ evaluations of the risks associated with their insurance underwriting, which may subject us to reinsurance losses.
In our proportional reinsurance business, we do not expect to separately evaluate each of the original individual risks assumed under these reinsurance contracts. Therefore, we are largely dependent on the original underwriting decisions made by ceding companies. We are subject to the risk that the clients may not have adequately evaluated the insured risks and that the premiums ceded may not adequately compensate us for the risks we assume. We also do not separately evaluate each of the individual claims made on the underlying insurance contracts under quota share contracts, rendering us dependent on the claims decisions our clients make.
We are subject to the credit risk of our brokers, cedents, agents and other counterparties.
In accordance with industry practice, we frequently pay amounts owed on claims under our policies to reinsurance brokers, and these brokers, in turn, remit these amounts to the ceding companies that have reinsured a portion of their liabilities with us. In some jurisdictions, if a broker fails to make such a payment, we might remain liable to the client for the deficiency, notwithstanding the broker’s obligation to make such payment. Conversely, in certain jurisdictions, when the client pays premiums for policies to reinsurance brokers for payment to us, these premiums are considered to have been paid, and the client will no longer be liable to us for these premiums, whether or not we have actually received them. Consequently, we assume a degree of credit risk associated with brokers.
We are also exposed to the credit risk of our cedents and agents, who, pursuant to their contracts with us, may be required to pay us profit commission, additional premiums, reinstatement premiums, and adjustments to ceding
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commissions over a period of time, which in some cases may extend beyond the initial period of risk coverage. Insolvency, liquidity problems, distressed financial condition, or the general effects of an economic recession may increase the risk that our cedents or agents may not pay some or all of their obligations to us. To the extent our cedents or agents become unable to pay us, we would be required to recognize a downward adjustment to our reinsurance balances receivable or loss and loss expenses recoverable, as applicable, in our financial statements. While we generally seek to mitigate this risk through, among other things, collateral agreements, funds withheld, corporate guarantees, and the right to offset receivables against any losses payable, an increased inability of customers to fulfill their obligations to us could have an adverse effect on our financial condition and results of operations.
Our reinsurance balances receivable from brokers and cedents at December 31, 2025 totaled $664.4 million, which included premiums, funds withheld balances (including FAL), and profit commission receivable, a majority of which are not collateralized (see Part II, Item 8. Note 17. “ Commitments and Contingencies ” to the consolidated financial statements). We cannot provide assurance that such receivables will be collected or that valuation allowances or write-downs for uncollectible balances will not be required in future periods.
We may not successfully alleviate risk through reinsurance arrangements. Additionally, we may be unable to collect, which could adversely affect our business, financial condition, and results of operations.
As part of our risk management, from time to time, we seek to purchase reinsurance for certain liabilities we reinsure to mitigate the effect of a potential concentration of losses upon our financial condition. At December 31, 2025, total loss recoverables were $81.4 million, a majority of which were from highly-rated reinsurers and not collateralized (see Part II, Item 8. Note 9 “ Retrocession ” to the consolidated financial statements). The insolvency or inability or refusal of a retrocessionaire to make payments under the terms of its agreement with us could have an adverse effect on us because our obligations to our clients would remain.
At certain times, market conditions have limited, and in some cases have prevented, reinsurers from obtaining the types and amounts of retrocessional coverage they consider necessary for their business needs. Accordingly, we may not be able to obtain our desired amounts of retrocessional coverage, negotiate terms that we deem appropriate or acceptable, or obtain retrocessional coverage from entities with satisfactory creditworthiness. Our inability to establish adequate retrocessional arrangements or the failure of our retrocessional arrangements to protect us from overly concentrated risk exposure could materially and adversely affect our business, financial condition, and results of operations.
Our failure to comply with restrictive covenants contained in our current or future credit facilities could trigger prepayment obligations, which could adversely affect our business, financial condition, and results of operations.
Our credit facilities require us and/or certain of our subsidiaries to comply with certain covenants, including restrictions on our ability to place a lien or charge on pledged assets, issue debt, and in certain circumstances, on the payment of dividends. For more details, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity ”. Our failure to comply with these or other covenants could result in an event of default under the respective credit facilities or any credit facility we may enter into in the future, which, if not cured or waived, could result in us being required to repay the amounts outstanding under these facilities prior to maturity. As a result, our business, financial condition, and results of operations could be materially and adversely affected.
We may not successfully obtain the necessary credit facilities to support our business strategy.
As noted in “Part 1, Item 1. Business - Regulations ”, we are required to provide letters of credit or collateral to jurisdictions in which we are not licensed or admitted as a reinsurer. In addition to the CIBC LC facility entered in late 2023, we expanded the available letters of credit facilities by adding the Uncommitted HSBC LC Facility and the Uncommitted Citibank LC Facility in late 2024 and the Citibank FAL Facility in 2025 (see Note 10 “ Debt and Credit Facilities ” of the consolidated financial statements). The Uncommitted Citibank LC Facility, Uncommitted HSBC LC Facility and Citibank FAL Facility are not committed facilities, which means Citibank and HSBC can decide not to issue the LC under the respective facility when we attempt to draw upon it. In addition, we cannot assure you that we will be able to increase existing credit facilities or add additional credit facilities in the future on favorable terms or at all.
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If we lose or are unable to retain or implement succession plans for our senior management and other key personnel, our ability to implement our business strategy could be delayed or hindered, which, in turn, could materially and adversely affect our business, financial condition and results of operations.
Our success depends, to a significant extent, on the efforts of our senior management and other key personnel to implement our business strategy. We believe there are only a limited number of available qualified executives with substantial experience in our industry and we currently do not maintain key life insurance with respect to any of our senior management. We could face challenges and incur expenses in attracting and retaining personnel in the Cayman Islands, U.K., and Ireland. Accordingly, the loss of the services of one or more of the members of our senior management or other key personnel, or our inability to implement succession plans or hire and retain other key personnel, could prevent us from continuing to implement our business strategy and, consequently, materially and adversely affect our business.
Our ability to implement our business strategy could be adversely affected by Cayman Islands employment restrictions.
Compliance with Cayman Islands’ immigration requirements may adversely impact a company’s ability to meet its business goals. Under Cayman Islands law, specifically the Immigration (Transition) Act (as amended), no person may work in the Islands unless they are Caymanian, a permanent resident with the right to work (including a person married to, or in a civil partnership with, a Caymanian), the holder of a 25-year Residency Certificate that affords the right to work, or a work permit. It is a criminaloffence to work or to employ someone without such authorisation.
Work permits are the most common form of employment authorisation for non-Caymanian workers. They are generally granted for periods of one to three years at a time, though the maximum length of time a worker may be granted work permits is nine years, after which they must leave the Islands for at least one year. All work permit holders who have resided legally in Cayman Islands for a continuous period of eight years have however the right to apply for permanent residence with the right to work, though if unsuccessful, must leave the Islands for at least one year.
Approval of work permits cannot be guaranteed: the employing company must first demonstrate before applying for a work permit, and before each subsequent renewal application, by way of advertising the position on a government jobs portal for fourteen days, that there is no qualified Caymanian or permanent resident available to fill the position. If it is considered that there is such a person available, the application will be refused. Further uncertainty is created by processing times for full work permit applications.
Reforms to immigration policy approved by Parliament in December 2025, and which are expected to come into effect later in 2026, aim to prioritize Caymanian employment, tighten employment mobility for foreign workers, and restructure aspects of the work permit system to enhance oversight and accountability. For businesses, this could mean higher compliance obligations, increased work permit-related costs, reduced flexibility in hiring and transferring employees from other jurisdictions, and longer processing times, all of which impacts strategic planning and business certainty.
We may face risks arising from future strategic transactions such as acquisitions, dispositions, mergers, or joint ventures.
We may pursue strategic transactions from time to time, which could involve acquisitions or dispositions of businesses or assets. Any strategic transactions could have an adverse impact on our reputation, business, results of operation, or financial condition. Sources of risk arising from these types of transactions include financial, accounting, tax, and regulatory challenges; difficulties with integration, business retention, execution of strategy, unforeseen liabilities or market conditions; and other managerial or operating risks and challenges. Any future transactions could also subject us to risks such as failure to obtain appropriate value, post-closingclaims being levied against us, and disruption to our other businesses during the negotiation or execution process or thereafter. Accordingly, these risks and difficulties may prevent us from realizing the expected benefits from such strategic transactions. For example, businesses that we acquire or our strategic alliances or joint ventures may underperform relative to the price paid or resources committed by us; we may not achieve anticipated cost savings; we may otherwise be adversely affected by transaction-related charges; we may assume unknown or undisclosed business, operational, tax, regulatory and other liabilities; fail to accurately assess known contingent liabilities; or assume businesses with internal control deficiencies. Risk-mitigating provisions that we put in place in the course of
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negotiating and executing these transactions, such as due diligence efforts and indemnification provisions, may not be sufficient to fully address these risks and contingencies.
Non-compliance with laws, regulations, and taxation regarding transactions with international counterparties may adversely affect our business.
As we provide reinsurance on a worldwide basis, we are subject to an expanding legal, regulatory, and tax environment intended to help detect and prevent anti-trust activity, money laundering, terrorist financing, proliferation financing, fraud, tax avoidance, and other illicit activity. These requirements include, among others, regulations promulgated and administered by CIMA, the U.S. Department of the Treasury's Office of Foreign Assets Control, The Foreign Corrupt Practices Act of 1977, the Iran Freedom and Counter-Proliferation Act of 2012, and the Foreign Account Tax Compliance Act. These and other programs prohibit or restrict dealings with certain persons, entities, countries, governments and, in certain circumstances, their nationals and may require detailed reporting to various administrative parties. Non-compliance with any of these regulations could have a material adverse effect on our ability to conduct our business.
Currency fluctuations could result in exchange rate losses and negatively impact our business.
Our functional currency is the U.S. dollar. However, we expect to write a portion of our business in currencies other than the U.S. dollar. We may incur foreign currency exchange gains or losses as we ultimately receive premiums and settle claims in foreign currencies. In addition, Solasglas may invest in securities or cash denominated in currencies other than the U.S. dollar. Consequently, we may experience exchange rate losses to the extent that our foreign currency exposure is not hedged, which could materially and adversely affect our business. If we or Solasglas hedge our foreign currency exposure through forward foreign currency exchange contracts or currency swaps, we will be subject to the risk that the hedging counterparties to such arrangements may fail to perform.
Natural disasters and other catastrophic events may adversely affect our operations and disrupt our business.
Our corporate headquarters are located in the Cayman Islands, a geographic region which is susceptible to natural disasters such as hurricanes and earthquakes as well as other potentially catastrophic events. If the Cayman Islands were to experience a major hurricane, earthquake or other catastrophic event, our corporate headquarters could be severelydamaged and our operations could suffer significant disruption. There can be no assurance that our disaster recovery and business continuity plans will perform as expected and, if they don’t, our business could be materially adversely effected.
Risks Relating to Insurance and Other Regulations
Any suspension or revocation of any of our licenses would materially and adversely affect our business, financial condition and results of operations.
Greenlight Re is licensed as a reinsurer in both the Cayman Islands and the EEA. We are also licensed to write insurance business in the U.K. and the EEA through our Syndicate 3456. Viridis Re is also licensed as a reinsurer in the Cayman Islands. The suspension or revocation of any of our licenses to do business in either of these jurisdictions for any reason would mean that we would not be able to enter into any new reinsurance contracts in that jurisdiction until the suspension ended or we became licensed in another jurisdiction. The process of obtaining licenses is time-consuming and costly, and we may not be able to become licensed in another jurisdiction in the event we choose to. Any such suspension or revocation of our license would negatively impact our reputation in the (re)insurance marketplace, could have a material adverse effect on any potential license application and would materially and adversely affect our business, financial condition and results of operations.
CIMA and the CBI may take a number of actions, including suspending or revoking a reinsurance license whenever the regulatory body believes that a licensee is or may become unable to meet its financial obligations, is carrying on business in a manner likely to be detrimental to the public interest or the interest of its creditors or policyholders, has contravened the terms of the Act, or has otherwise behaved in such a manner so as to cause such regulatory body to call into question the licensee’s fitness to conduct regulated activity.
Further, based on statutes, regulations, and policies in their respective jurisdictions, CIMA and CBI may suspend or revoke our licenses if certain events occur, including without limitation:
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we cease to carry on reinsurance business;
the direction and management of our reinsurance business have not been conducted in accordance with laws and regulations;
we cease to meet certain capital and surplus requirements;
a person holding a position as a director, manager or officer is not deemed to be a fit or proper person to hold the respective position; or
we become bankrupt, go into liquidation, or are wound up or otherwise dissolved.
Similarly, if either CIMA or the CBI suspended or revoked our licenses, we could lose our exemption under the Investment Company Act of 1940, as amended (the “Investment Company Act”) (See “— We are subject to the risk of possibly becoming an investment company under U.S. federal securities law .”)
Our reinsurance subsidiaries are subject to minimum capital and surplus requirements, and our failure to meet these requirements could subject us to regulatory action.
The Insurance (Capital and Solvency) (Classes B, C, and D Insurers) Regulations (2018 Revision) (the “Capital and Solvency Regulations”) impose on Greenlight Re as a Class D reinsurer to maintain minimum statutory capital and surplus equal to the greater of: a) the minimum capital requirement of $50 million and b) the prescribed capital requirement and impose on Viridis Re a requirement to maintain minimum statutory capital of $0.2 million for a Class B(iii) general reinsurer and the prescribed capital requirement (the “Capital Requirements”). At December 31, 2025, both Greenlight Re and Viridis Re were in compliance with their respective Capital Requirements - see Note 19 “ Statutory Requirements ” of the consolidated financial statements.
GRIL, our Irish subsidiary, is required to comply with risk-based solvency requirements under the European legislation known as “Solvency II,” including calculating and maintaining a minimum capital requirement and solvency capital requirement. At December 31, 2025, GRIL’s minimum capital requirement and solvency capital requirement was approximately $10.3 million and $41.0 million, respectively. At December 31, 2025, GRIL was in compliance with the capital requirements required under the Irish Insurance Acts and Regulations.
Any failure to meet applicable requirements or minimum statutory capital requirements could subject us to further examination or action by regulators, including restrictions on dividend payments, limitations on our writing of additional business or engaging in financial or other activities, enhanced supervision, financial or other penalties, or liquidation. Further, any changes in existing risk-based capital requirements or minimum statutory capital requirements may require us to increase our statutory capital levels, which we might be unable to do.
We are a holding company that depends on the ability of our subsidiaries to pay dividends.
We are a holding company and do not have any significant operations or assets other than our ownership of the shares of our subsidiaries. Dividends and other permitted distributions from our subsidiaries are our primary source of funds to meet ongoing cash requirements, including future debt service payments, if any, and other corporate expenses, and to repurchase shares or pay dividends to our shareholders if we choose to do so. Some of our subsidiaries are subject to significant regulatory restrictions limiting their ability to declare and pay dividends. The inability of our subsidiaries to pay dividends in an amount sufficient to enable us to meet our cash requirements at the holding company level could have an adverse effect on our operations and our ability to repurchase shares or pay dividends to our shareholders if we choose to do so and/or meet our debt service obligations, if any.
To the extent any of our subsidiaries located in jurisdictions other than the Cayman Islands consider declaring dividends, such subsidiaries are required to comply with restrictions set forth under applicable law and regulations in such other jurisdictions. These restrictions could adversely impact the Company.
We are subject to the risk of possibly becoming an investment company under U.S. federal securities law.
In the United States, the Investment Company Act regulates certain companies that invest in or trade securities. We rely on an exemption under the Investment Company Act for an entity organized and regulated as a foreign insurance company which is engaged primarily and predominantly in the reinsurance of risks on insurance agreements. As we hold ourselves out as a global specialty property and casualty reinsurer and we do not propose to engage primarily in the business of investing or trading in securities, we believe the exemption applies.
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Accordingly, we do not believe that we are, or are likely to become in the future, an investment company under the Investment Company Act.
Nonetheless, the law in this area is not well developed, and there is a lack of definitive guidance as to the meaning of “primarily and predominantly” under the relevant exemption to the Investment Company Act. If this exemption were deemed inapplicable, we would have to register under the Investment Company Act as an investment company. Registered investment companies are subject to extensive, restrictive, and potentially adverse regulation relating to, among other things, operating methods, management, capital structure, leverage, dividends, and transactions with affiliates. Registered investment companies are not permitted to operate their business in the manner in which we operate our business, nor are registered investment companies permitted to have many of the relationships that we have with our affiliated companies. Any changes to our investment strategy necessitated by being labeled a registered investment company could materially and adversely impact our investment results, financial condition, and ability to implement our business strategy.
If at any time it were established that we had been operating as an investment company in violation of the registration requirements of the Investment Company Act, there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, or that we would be unable to enforce contracts with third parties or that third parties could seek to obtain rescission of transactions with us undertaken during the period in which it was established that we were an unregistered investment company.
To the extent that the laws and regulations change in the future so that contracts we write are deemed not to be reinsurance contracts, we will be at greater risk of not qualifying for the Investment Company Act exception. Additionally, it is possible that our classification as an investment company would result in the suspension or revocation of our reinsurance license.
Insurance regulations to which we are, or may become, subject, and potential changes thereto, could have a significant and negative effect on our business.
We currently are admitted to do reinsurance business in the Cayman Islands and the EEA. We are also licensed to write insurance business in the U.K. and the EEA through our Syndicate 3456. Our operations in these jurisdictions are subject to varying degrees of regulation and supervision. The laws and regulations of the jurisdictions in which our subsidiaries are domiciled require that, among other things, these subsidiaries maintain minimum levels of statutory or regulatory capital, surplus, and liquidity, meet solvency standards, submit to periodic examinations of their financial condition, and restrict payments of dividends and reductions of capital. Statutes, regulations, and policies that our subsidiaries are subject to may also restrict the ability of these subsidiaries to write insurance and reinsurance policies, make certain investments, and distribute funds.
More specifically, with respect to GRIL, Solvency II governs the prudential regulation of insurers and reinsurers, and requires insurers and reinsurers in Europe to meet risk-based solvency requirements. It also imposes group solvency and governance requirements on groups with insurers and/or reinsurers operating in the EEA. A number of European Commission delegated acts and technical standards have been adopted, which set out more detailed requirements based on the overarching provisions of the Solvency II Directive. However, further delegated acts, technical standards, and guidance are likely to be published on an ongoing basis.
Although we presently are admitted to do business in the Cayman Islands, U.K. and the EEA, we cannot provide assurance that insurance regulators in the United States or elsewhere will not review our activities and claim that we are subject to such jurisdiction’s licensing requirements. In addition, we are subject to indirect regulatory requirements imposed by jurisdictions that may limit our ability to provide reinsurance. For example, our ability to write reinsurance may be subject, in certain cases, to arrangements satisfactory to applicable regulatory bodies, and proposed legislation and regulations may have the effect of imposing additional requirements upon, or restricting the market for, non-U.S. reinsurers such as Greenlight Re and GRIL, with whom domestic companies may place business. We do not know of any such proposed legislation pending at this time.
We may not be able to comply fully with, or obtain desired exemptions from, revised statutes, regulations, and policies that currently, or may in the future, govern the conduct of our business. Failure to comply with, or to obtain desired authorizations and/or exemptions under, any applicable laws could result in restrictions on our ability to do business or undertake activities that are regulated in one or more of the jurisdictions in which we operate and could subject us to fines and other sanctions. The MAA includes amendments that provide for a specific administrative fines framework whereby CIMA has been granted the power to issue monetary penalties of up to 1 million Cayman Islands Dollars for a very seriousbreach.
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In addition, governmental authorities worldwide have become increasingly interested in potential risks posed by the insurance industry as a whole, and to the commercial and financial systems in general. While we cannot predict the exact nature, timing, or scope of possible governmental initiatives, there may be increased regulatory intervention in our industry in the future. Changes in the laws or regulations to which our subsidiaries are subject or may become subject, or in the interpretations thereof by enforcement or regulatory agencies, could have a material adverse effect on our business.
There are differences between Cayman Islands corporate law and Delaware corporate law with respect to interested party transactions, which may benefit certain of our shareholders at the expense of other shareholders.
As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore they owe certain duties to the company, including the following: a duty to act in good faith and in what they consider to be in the best interests of the company; a duty not to make a profit out of their position as director (unless the company permits them to do so); a duty to exercise their powers for the purposes for which they are conferred; and a duty not to put themselves in a position where the interests of the company conflict with their personal interest or their duty to a third party. A director of a Cayman Islands company owes to the company a duty to act with skill and care. A director will need to exhibit in the performance of their duties both the degree of skill that may reasonably be expected from a subjective perspective determined by reference to their knowledge and experience and the skill and care objectively to be expected from a person occupying office as a director of the company.
Under Cayman Islands corporate law and pursuant to our Articles, a director may vote on a contract or transaction where the director has an interest as a shareholder, director, officer, or employee, provided such interest is duly disclosed to the Board. In exercising any such vote, such director's duties remain as described above. Pursuant to our Articles none of our contracts will be deemed to be void purely because any director is an interested party in such transaction and in such circumstances, interested parties will generally not be held liable for monies owed to the Company. Under Delaware law, interested party transactions are voidable.
A failure by our Syndicate 3456 to comply with rules and regulations could materially and adverselyinterfere with our business strategy.
Syndicate 3456 is subject to Lloyd’s oversight. The PRA and the FCA regulate all financial services firms in the U.K., including Lloyd’s and Syndicate 3456. Both the PRA and the FCA have substantial powers of intervention in relation to Lloyd’s Syndicates, including the power to remove Lloyd’s authorization to manage such Syndicates. See “— Item 1. Business — Regulations — UK Regulations ” for further discussion of such regulations.
Failure to comply with, or any future regulatory changes or rulings to, the regulations of the PRA and/or the FCA could interfere with the business strategy of Syndicate 3456, which could materially and adversely affect our business, financial condition and results of operations.
Risks Relating to Our Solasglas Investment Strategy
Our investment performance depends in part on the performance of Solasglas and may suffer as a result of adverse in financial markets or other factors that impact Solasglas’ liquidity.
Our operating results depend in part on the performance of Solasglas. We cannot provide assurance that DME Advisors, on behalf of Solasglas, will successfully structure investments in relation to our liquidity needs or liabilities. Failure to do so could force us to make redemptions from Solasglas that cause DME Advisors to liquidate investments at a significant loss or at prices that are not optimal, which could materially and adversely affect our financial results.
The risks associated with Solaglas’ value-oriented investment strategy may be substantially greater than the risks associated with traditional fixed-income investment strategies. In addition, long equity investments may generate losses if the market declines. Similarly, short equity investments may generate losses in a rising market. The success of the Solasglas investment strategy may also be affected by general economic conditions. Unexpected market volatility and illiquidity associated with our investment in Solasglas could materially and adversely affect our investment results, financial condition, or results of operations.
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Solasglas may be concentrated in a few large positions, which could result in material adverse valuation movements.
Our Board of Directors has adopted our investment guidelines, which provide that Solasglas may not commit more than, 10% of Greenlight Re Surplus (as defined in the Solasglas LPA) and 10% of GRIL Surplus (as defined in the Solasglas LPA) to any single investment, unless a waiver has been obtained by the Board of Directors of Greenlight Re or GRIL, as applicable. At December 31, 2025, we were in compliance with these investment guidelines.
In addition, GRIL’s investment guidelines require that the ten largest investments shall not constitute more than 50% of the GRIL Surplus, and GRIL’s investment portfolio shall at all times, unless waived by the GRIL board of directors, be composed of a minimum of 50 debt or equity securities of publicly traded companies. From time to time, Solasglas may hold a small number of relatively large security positions in relation to our capital accounts. Since Solasglas may not be widely diversified by security or by industry, it may be subject to more rapid changes in value than would be the case if our investment portfolio were required to maintain a wide diversification among companies, securities industries, and types of securities.
Under the Solasglas LPA, we are contractually obligated to invest substantially all our assets in Solasglas with certain exceptions. Solasglas’ performance depends on the ability of DME Advisors to select and manage appropriate investments.
DME Advisors acts as the exclusive investment advisor for Solasglas. Apart from funds required for collateral purposes, funds allocated to our Innovations investment strategy, risk management, and other operational needs, we are contractually obligated to use commercially reasonable efforts to cause substantially all investable assets of Greenlight Re and GRIL to be contributed to Solasglas. Although DME Advisors is contractually obligated to follow the investment guidelines of both Greenlight Re and GRIL, we cannot provide assurance as to how DME Advisors will allocate our investable assets to different investment opportunities.
The performance of the Solasglas investment portfolio depends to a great extent on the ability of DME Advisors to select and manage appropriate investments for Solasglas. We cannot assure you that DME Advisors will successfully meet our investment objectives and the failure of DME Advisors to perform adequately could materially and adversely affect our business, results of operations, and financial condition.
We have limited control over Solasglas and Solasglas LPA limits our ability to use another investment manager.
Under the Solasglas LPA, subject to our investment guidelines and certain other conditions, DME II, as the general partner of Solasglas, has complete and exclusive power and responsibility for all investment and investment management decisions to be undertaken on behalf of Solasglas and for managing and administering the affairs of Solasglas. As a result, we have limited control over Solasglas and there can be no assurance that the interests of DME II in managing Solasglas will always be aligned with our interests. In addition, the Solasglas LPA contains exclusivity and limited termination provisions which severely restricts our ability to use other investment managers for so long as Greenlight Re and GRIL are limited partners in Solasglas. Greenlight Re and GRIL, as limited partners of Solasglas may withdraw upon notice only on the Greenlight Re Relevant Date or the GRIL Relevant Date or “for cause” (each as defined in the Solasglas LPA). Additionally, while GRIL has the right to withdraw as a limited partner in Solasglas due to unsatisfactory long-term performance of DME II or DME Advisors, as determined solely by the Board of Directors of GRIL at the end of each fiscal year during the term of the Solasglas LPA, Greenlight Re does not have this right.
The historical performance of DME Advisors and its affiliates should not be considered indicative of the future results of the Solasglas investment portfolio, our future results, or any returns expected on our ordinary shares.
The historical returns of Solasglas and other funds managed by DME Advisors and its affiliates are not directly linked to our ordinary shares. Results for the Solasglas investment portfolio could differ from those of other funds managed by DME Advisors and its affiliates due to restrictions imposed by our investment guidelines and other factors.
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Potential conflicts of interest with DME Advisors and its affiliates may exist that could adversely affect us.
DME Advisors and its affiliates, in addition to managing Solasglas, may engage in investment and trading activities for their own accounts and/or for the accounts of third parties. None of DME Advisors or its affiliates, including David Einhorn, Chairman of our Board of Directors and the President of Greenlight Capital, Inc., is obligated to devote any specific amount of time, effort or allocation, or prioritize any investment opportunity, to Solasglas or to address possible or actual conflicts among the accounts they may manage, which may adversely affect Solasglas’ investment returns, and, correspondingly, our investment returns.
In addition, under Cayman Islands laws, Mr. Einhorn is not legally restricted from making decisions with respect to Greenlight Re’s investment guidelines. Accordingly, his involvement as a member of the Boards of Directors of Greenlight Capital Re and Greenlight Re may lead to a conflict of interest.
DME Advisors and its affiliates may also manage accounts whose advisory fee schedules, investment objectives, and policies differ from those of Solasglas, which may cause DME Advisors and its affiliates to effect trading in one account that may have an adverse effect on another account, including Solasglas.
Certain investments made by Solasglas may have limited liquidity and lack valuation data which could create a conflict of interest.
Our investment guidelines allow Solasglas to invest in certain securities with limited liquidity or no public market. This lack of liquidity may adversely affect the ability of Solasglas to execute trade orders at desired prices and may impact our ability to fulfill our underwriting payment obligations. To the extent that Solasglas invests in securities or instruments for which market quotations are not readily available, the valuation of such securities and instruments for purposes of compensation will be determined by DME Advisors, whose determination, subject to audit verification, will be conclusive and binding in the absence of bad faith or manifest error.
If DME Advisor’s risk management methodologies are ineffective, we may be exposed to material unanticipatedlosses.
DME Advisors and its affiliates continually refine its risk management techniques, strategies, and assessment methods. However, its risk management techniques and strategies do not fully mitigate the risk exposure of its funds and managed accounts, including Solasglas, in all economic or market environments or against all types of risk, including risks that it might fail to identify or anticipate. Any failures in DME Advisors’ risk management techniques and strategies to accurately quantify risk exposure could affect the risk-adjusted returns of Solasglas. In addition, any risk management failures could cause losses to be significantly greater than historical measures predict. DME Advisors’ approach to managing those risks could prove insufficient, exposing Solasglas, and correspondingly our Solasglas investment portfolio, to material unanticipated or material losses.
The compensation arrangements of Solasglas may create an incentive to effect transactions that are risky or speculative.
Pursuant to the Solasglas LPA, each of Greenlight Re and GRIL is obligated to pay a performance allocation of 20% to DME II at the end of each performance period based on its positive performance change to its capital account, subject to a modified loss carry forward provision.
The loss carry forward provision contained in the Solasglas LPA allows DME II to earn a reduced performance allocation of 10% of profits in any year subsequent to the year in which Solasglas has incurred a loss until all losses are recouped and an additional amount equal to 150% of the loss is earned.
While the performance compensation arrangement contained in the Solasglas LPA provides that losses will be carried forward as an offset against net profits in subsequent periods, DME II and DME Advisors generally will not otherwise be penalized for losses or decreases in the value of our portfolio under the Solasglas LPA. These performance compensation arrangements may incentivize DME Advisors to engage in transactions that focus on the potential for short-term gains rather than long-term growth or that are particularly risky or speculative.
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DME Advisors’ representatives’ service on boards and committees may place trading restrictions on our investments and may subject us to indemnification liability.
DME Advisors may, from time to time, place its or its affiliates’ representatives on creditors’ committees and/or boards of certain companies in which Solasglas has invested. While such representation may enable DME Advisors to enhance the sale value of Solasglas’ investments, it may also prevent Solasglas from freely disposing of investments. The IAA provides for the indemnification of DME Advisors or any other person designated by DME Advisors for claims arising from such board representation.
We and Solasglas are exposed to credit risk from counterparties that may default on their obligations to us.
We and Solasglas are exposed to credit risk from counterparties that may default on their obligations to us or it. The amount of the maximum exposure to credit risk is indicated by the carrying value of our and Solasglas’ financial assets. In addition, Solasglas holds the securities of our investment portfolio with prime brokers and has credit risk from the possibility that one or more of them may default on their obligations to Solasglas.
Issuers or borrowers whose securities or debt Solasglas holds, customers, reinsurers, clearing agents, exchanges, clearing houses, and other financial intermediaries and guarantors may default on their obligations to us and/or Solasglas due to bankruptcy, insolvency, lack of liquidity, adverse economic conditions, operational failure, fraud or other reasons. Such defaults could have a significant and negative effect on us and/or Solasglas and, correspondingly, our investment portfolio and our results of operations, financial condition, and cash flows.
Solasglas effectuates short sales that subject our capital accounts to material and adverseloss potential.
Solasglas enters into transactions in which it sells a security it does not own, which we refer to as a short sale, in anticipation of a decline in the market value of the security. Short sales subject our capital accounts in Solasglas to material and adverseloss potential since the market price of securities sold short may continuously increase. Short sales may result in a substantial loss and may expose us to a loss exceeding the original amount invested.
Short-sale transactions have been subject to increased regulatory scrutiny and Solasglas’ ability to execute a short selling strategy may be materially and adversely impacted by new rules, interpretations, prohibitions, and restrictions adopted in response to adverse market events.
As a result, Solasglas may be unable to effectively pursue a short-selling strategy which may adversely affect Solasglas’ investment returns, and correspondingly, our investment returns.
Solasglas may trade on margin and use other forms of financial leverage, which may increase the risk of our investment portfolio.
Our investment guidelines allow Solasglas to trade on margin and use other forms of financial leverage. Solasglas relies on prime brokers to extend leverage and such prime brokers may elect not to provide leverage to Solasglas. Fluctuations in the market value of our investment in Solasglas could have a disproportionately large effect in relation to our capital. Any event which may adversely affect the value of positions Solasglas holds could materially and adversely affect the net asset value of our investment portfolio and our results of operations.
Solasglas may transact in derivatives trading, which may increase the risks associated with our investment portfolio.
Derivative instruments, or derivatives, include futures, options, swaps, structured securities, and other instruments and contracts that derive their value from one or more underlying securities, financial benchmarks, currencies, commodities, or indices. There are a number of risks associated with derivatives trading. Because many derivatives are leveraged, a relatively small adverse market movement may result in a substantial loss and may expose us to a loss exceeding the original amount invested. Derivatives may also expose Solasglas, and correspondingly, our investment portfolio, to liquidity risk as there may not be a liquid market within which to close or dispose of outstanding derivative contracts. The counterparty risk lies with each party with whom Solasglas contracts for the purpose of making derivative investments. In the event of the counterparty’s default, Solasglas will generally only rank as an unsecured creditor and risk the loss of all or a portion of the amounts Solasglas is contractually entitled to receive.
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Risks Relating to Our Innovations Strategy
The carrying values of our Innovations investments may differ significantly from those that would be used if we carried these investments at fair value. Additionally, we have a material concentration in our top five holdings at December 31, 2025.
Our Innovations investments include investments in private equities for which no active market may exist. We carry these investments on our consolidated balance sheets at cost, less impairment, plus or minus observable price changes (see “ Critical Accounting Estimates - “Investments” under “Part II, Item 8. Management Discussion and Analysis of Financial Condition and Results of Operations”). These carrying values may differ significantly from those that would be used if we carried them at fair value. If we were required to liquidate all or a portion of these investments quickly, we could realize significantly less than the carrying value. The carrying value of our Innovations investments may become concentrated in a limited number of entities as a result of subsequent remeasurement and/or have significant exposure to certain geographic areas or economic sectors. The concentration of investments can increase investment risk and volatility. At December 31, 2025, our top five holdings accounted for 53% of the total carrying value. Any of the foregoing could result in a decline in our investment performance and capital resources and, accordingly, could materially and adversely affect our financial results and results of operations. Refer to “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Innovations Segment ” for total impairment charge in 2025.
Our Innovations investments carry higher risks due to illiquidity.
We invest in illiquid equity and debt instruments of early-stage companies in our Innovations investments portfolio. Furthermore, our Innovations investments are generally subject to restrictions on redemptions and sales that limit our ability to liquidate these investments in the short term. As such, there is a high liquidity risk due to the lack of active markets. We may not be able to sell timely, or at all, illiquid holdings of early-stage companies facing significant challenges operationally and financially subsequent to our initial investment (see below “Investments in privately held early-stage companies involve significant risks” ). Accordingly, this could materially and adversely affect our business, financial condition and results of operations.
Our Innovations investments support our underwriting operations and the failure to identify and consummate investment opportunities may materially and adversely affect our ability to implement our business strategy.
We operate in a competitive market for Innovations investment opportunities. Many of our competitors have considerably greater resources than we do. If we fail to compete for or otherwise lose the opportunity to make Innovations investments, which support our underwriting strategy, our ability to implement our business strategy may be materially and adversely impacted.
Investments in privately held early-stage companies involve significant risks.
Our Innovations unit primarily invests in privately held early-stage companies. Investments in privately held early-stage companies involve a number of significant risks, including the following:
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these companies may have limited financial resources and may be unable to meet their operating obligations;
they typically have limited operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns;
they typically depend on the management talents and efforts of a small group of persons. Therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse effect on such investment and, in turn, on us;
they may not have adequate internal controls which would make them susceptible to fraud or mismanagement;
there is generally little public information about these companies. These companies and their financial information are generally not subject to the Exchange Act and other regulations that govern public companies, and we may be unable to uncover all material information about these companies, which may prevent us from making a fully informed investment decision and cause us to lose money on our investments;
they generally have less predictable operating results and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position;
changes in laws and regulations (including applicable tax laws), as well as their interpretations, may adversely affect their business, financial structure or prospects; and
they may have difficulty accessing the capital markets to meet future capital needs.
Economic recessions or downturns could impair our Innovations investment and harm our operating results.
The current macroeconomic environment is characterized by high inflation, supply chain challenges, labor shortages, high interest rates, foreign currency exchange volatility, volatility in global capital markets and growing recession risk. The risks associated with our Innovations investments and the businesses of the entities in which we have invested are more severe during periods of economic slowdown or recession.
Many of our Innovations investments may be susceptible to economic downturns or recessions. Therefore, during these periods the carry values of our Innovations portfolio may decrease if we are required to write down the values of our investments. Adverse economic conditions may also decrease the value of our investments. Economic slowdowns or recessions could lead to financial losses in our Innovations portfolio and a decrease in revenues, net income and assets.
Our Innovations investments are made in entities that may incur debt or issue equity securities that rank equally with, or senior to, our investments in such companies.
Our Innovations investments are made in entities that have, or may be permitted to incur, other debt, or issue other equity securities, that rank equally with, or senior to, our investments. By their terms, such instruments may provide that the holders are entitled to receive payment of dividends, interest or principal on or before the dates on which we are entitled to receive payments in respect of our investments. These debt instruments would usually prohibit the investments from paying interest on or repaying our investments in the event and during the continuance of a default under such debt. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of an entity, holders of securities ranking senior to our investment typically are entitled to receive payment in full before we receive any distribution in respect of our investment. After repaying such holders, the entity may not have any remaining assets for repaying its obligation to us. In the case of securities ranking equally with our investments, we would have to share on an equal basis any distributions with other security holders in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant entity.
As a minority equity investor, we are often not in a position to influence the entity, and other equity holders and management of such entity may make decisions that could decrease the value of our investment in such entity.
When we make a minority equity investment through our Innovations segment, we are subject to the risk that an entity may make business decisions with which we disagree. The other equity holders and management of the entity may take risks or otherwise act in ways that do not serve our interests. As a result, an entity may make decisions that could decrease the value of our investment.
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Our Innovations investments are in entities that may be highly leveraged.
Some of our Innovations investments are made in entities that may be highly leveraged, which may have adverse consequences for those companies and for us as a shareholder. The entity may be subject to restrictive financial and operating covenants and their leverage may impair the ability to finance their future operations and capital needs. As a result, such entity’s flexibility to respond to changing business and economic conditions and to take advantage of business opportunities may be limited.
Our failure to make follow-on investments in our existing Innovations investments could impair the value of our portfolio.
Following an initial investment in an entity, we may make additional investments in the entity as “follow-on” investments to: (1) increase or maintain in whole or in part our equity ownership percentage; (2) exercise warrants, options or convertible securities that we acquired in the original or subsequent financing; (3) protect our liquidation preference rights or (4) attempt to preserve or enhance the value of our investment.
We may elect not to make follow-on investments, be constrained in our ability to employ available funds, or otherwise lack sufficient funds to make those investments. We have the discretion to make any follow-on investments, subject to the availability of capital resources. The failure to make follow-on investments may, in some circumstances, jeopardize the continued viability of an entity, dilute our investment, or result in a missedopportunity for us to increase our participation in a successful operation. Even if we have sufficient capital to make a follow-on investment, we may elect not to make it because we may not want to increase our concentration of risk, we prefer other opportunities, or we are constrained under the Investment Company Act. See “–Risks Relating to Insurance and Other Regulations – We are subject to the risk of possibly becoming and investment company under U.S. federal securities laws.”
Risks Relating to Our Ordinary Shares
Our ability to achieve our business objectives depends on our ability to manage and deploy capital.
Our ability to achieve our business objectives depends on our ability to manage and deploy capital, which depends, in turn, on our management’s ability, with oversight from our Board of Directors, to identity, evaluate and monitor our underwriting and investment results, our liquidity and competing needs for capital. We cannot assure you that our management and deployment of capital will enable us to achieve our business objectives, and our failure to effectively manage and deploy our capital could materially and adversely affect our financial condition and results of operations.
Our level of debt may have an adverse impact on our liquidity, restrict our current and future operations, particularly our ability to respond to business opportunities, and increase our vulnerability to adverse economic and industry conditions.
While we had $4.7 million of debt outstanding at December 31, 2025, we have the ability to borrow up to $50 million under the Revolving Credit Facility (see Note 10 “ Debt and Credit Facilities ” of our consolidated financial statements). The level of debt and the provisions of such debt could have significant consequences, which include, but are not limited to, the following:
limit our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, or other general corporate purposes;
require a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions, and other general corporate purposes;
discourage an acquisition of us by a third party;
place us at a competitive disadvantage to competitors carrying less debt; and
make us more vulnerable to economic downturns and limit our ability to withstand competitive pressures or take advantage of new opportunities to grow our business.
We cannot assure you that we will be able to refinance our indebtedness debt upon maturity on acceptable terms or at all.
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A shareholder may be required to sell its ordinary shares.
Our Articles provide that we have the option, but not the obligation, to require a shareholder to sell its ordinary shares for their fair market value to us, to other shareholders or to third parties if our Board of Directors determines that ownership of our ordinary shares by such shareholder may result in adverse tax, regulatory or legal consequences to us, any of our subsidiaries or any of our shareholders and that such sale is necessary to avoid or cure such adverse consequences.
Provisions of our Articles, the Companies Act of the Cayman Islands (the “Companies Act”) and our corporate structure may each impede a takeover, which could adversely affect the value of our ordinary shares.
Our Articles contain certain provisions that could make it difficult for a third party to acquire us, even if doing so would be beneficial to our shareholders. Our Articles provide that a director may only be removed for “cause” as defined in the Articles, upon the affirmative vote of not less than 50% of the votes cast at a meeting at which more than 50% of our issued and outstanding ordinary shares are represented. Further, under the Amended and Restated Memorandum and Articles of Association of Greenlight Re, a director may only be removed without cause upon the affirmative vote of not less than 80% of the votes cast at a meeting at which more than 50% of our issued and outstanding ordinary shares are represented.
Our Articles permit our Board of Directors to issue preferred shares from time to time, with such rights and preferences as they consider appropriate. Our Board of Directors may authorize the issuance of preferred shares with terms and conditions and under circumstances that could have an effect of discouraging a takeover or other transaction, deny shareholders the receipt of a premium on their ordinary shares in the event of a tender or other offer for ordinary shares and have a depressive effect on the market price of the ordinary shares.
As compared to mergers under corporate law in the United States, it may be more difficult to consummate a merger of two or more companies in the Cayman Islands or the merger of one or more Cayman Islands companies with one or more overseas companies, even if such transaction would be beneficial to our shareholders. For example, a merger or consolidation generally requires the consent of each holder of a fixed or floating security interest, unless the court waives such requirement, and a formal declaration must be made, meeting enumerated requirements, if the transaction involves a foreign company or where the surviving company is the Cayman Islands exempted company.
The Companies Act also includes statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that such a scheme of arrangement is approved by (i) in respect of shareholders, 75% in value of the shareholders or each class of shareholder who attend and vote, either in person or by proxy, at a meeting or meetings convened for that purpose; or (ii) in respect of creditors, a majority in number representing 75% in value of creditors or each class of creditors who attend and vote, either in person or by proxy, at a meeting or meetings convened for that purpose.
The convening of the scheme meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:
the company is not proposing to act illegally or beyond the scope of its corporate authority and the statutory provisions as to majority vote have been complied with;
the shareholders have been fairly represented at the meeting in question and the classes properly delineated;
the scheme of arrangement is such as a businessperson would reasonably approve; and
the scheme of arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would amount to a “fraud on the minority”.
If a scheme of arrangement is thus approved, the dissenting shareholders would have no rights comparable to appraisal
rights, which would otherwise ordinarily be available to dissenting shareholders of a Delaware corporation.
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Holders of ordinary shares may have difficulty obtaining or enforcing a judgment against us, and they may face difficulties in protecting their interests because we are incorporated under Cayman Islands law.
We are an exempted company limited by shares incorporated under the laws of the Cayman Islands and conduct a majority of our operations outside the United States. A significant amount of our assets are located outside the United States. A majority of our officers and directors reside outside the United States and substantial portion of the assets of those persons are located outside of the United States. As a result, it could be difficult or impossible for you to bring an action against us or against these individuals outside of the United States in the event that you believe that your rights have been infringed upon under the applicable securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands could render you unable to enforce a judgment against our assets or the assets of our directors and officers.
Our corporate affairs are governed by our Articles, the Companies Act and the common law of the Cayman Islands. The rights of shareholders to take legal action against our directors and us, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from judicial precedent in the Cayman Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under the laws of the Cayman Islands are not as clearly defined as under statutes or judicial precedent in existence in jurisdictions in the United States. Therefore, you may have more difficulty protecting your interests than would shareholders of a corporation incorporated in a jurisdiction in the United States, due to the comparatively less well developed Cayman Islands law in this area.
Shareholders of Cayman Islands exempted companies such as ours have no general rights under Cayman Islands law to inspect corporate records and accounts or to obtain copies of lists of shareholders. Our directors have discretion under our Articles to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.
The courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, the judgment must be obtained in a court of law which had jurisdiction over the judgment debtor, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings, including if concurrent proceedings are being brought elsewhere.
We are not aware nor have we been advised of any reported class action having been brought in a Cayman Islands court. Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. Generally, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors usually may not be brought by a shareholder. However, based both on Cayman Islands authorities and on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply including, for example, in circumstances in which those who control the company are perpetrating a “fraud on the minority.”
A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed, and may have a direct right of action against us in circumstances where our Board of Directors exercise their powers for an improper purpose (or are about to exercise their powers for an improper purpose).
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Subject to limited exceptions, under Cayman Islands law, a minority shareholder may not bring a derivative action against our Board of Directors.
We do not intend to pay dividends on our ordinary shares and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common shares.
We do not intend to declare and pay dividends on our ordinary shares for the foreseeable future. Therefore, you are not likely to receive any dividends on your ordinary shares for the foreseeable future. The success of an investment in our ordinary shares will depend upon any future appreciation in their value. There is no guarantee that our ordinary shares will appreciate in value or even maintain the price at which our shareholders have purchased their shares.
In the event that we did declare a dividend, such dividends and other distributions on issued and outstanding ordinary shares may only be paid out of the funds of the Company lawfully available for such purpose. Dividends and other distributions will be distributed among the holders of our ordinary shares on a pro rata basis.
Risks Relating to Taxation
We may be subject to United States federal income taxation.
Greenlight Capital Re, Greenlight Re and Viridis Re are incorporated under the laws of the Cayman Islands, and GRIL is incorporated under the laws of Ireland. These entities intend to operate in a manner that will not cause us to be treated as engaging in a trade or business within the United States and will not cause us to be subject to current United States federal income taxation on Greenlight Capital Re’s, Greenlight Re’s, Viridis Re’s and/or GRIL’s net income. However, because there are no definitive standards provided by the Internal Revenue Code, regulations or court decisions as to the specific activities that constitute being engaged in the conduct of a trade or business within the United States, and as any such determination is essentially factual in nature, we cannot provide assurance that the United States Internal Revenue Service (the “IRS”), will not successfully assert that Greenlight Capital Re, Greenlight Re, Viridis Re and/or GRIL are engaged in a trade or business within the United States. If the IRS were to successfully assert that Greenlight Capital Re, Greenlight Re, Viridis Re and/or GRIL have been engaged in a trade or business within the United States in any taxable year, various adverse tax consequences could result, including the following: Greenlight Capital Re, Greenlight Re, Viridis Re and/or GRIL may become subject to current United States federal income taxation on its net income from sources within the United States; Greenlight Capital Re, Greenlight Re, Viridis Re and/or GRIL may be subject to United States federal income tax on a portion of its net investment income, regardless of its source; and Greenlight Capital Re, Greenlight Re, Viridis Re and/or GRIL may be subject to United States branch profits tax on profits deemed to have been distributed out of the United States.
United States persons who own ordinary shares may be subject to United States federal income taxation on our undistributed earnings and may recognize ordinary income upon disposition of ordinary shares.
Passive Foreign Investment Company. Potential adverse United States federal income tax consequences, including certain reporting requirements, generally apply to any United States person who owns shares in a passive foreign investment company, or a “PFIC”. We believe that based upon implementation of our business plan, none of Greenlight Capital Re, Greenlight Re, Viridis Re or GRIL will be, or should be, a PFIC for the current taxable year or for any foreseeable future years.
In general, any of Greenlight Capital Re, Greenlight Re, Viridis Re or GRIL would be a PFIC for a taxable year if either (i) 75% or more of its income constitutes “passive income” or (ii) 50% or more of its assets produce “passive income”, or are held for the production of passive income. Passive income generally includes interest, dividends and other investment income. However, under an “active insurance” exception, income is not treated as passive if it is derived in the active conduct of an insurance business by a qualifying insurance corporation. A qualifying insurance corporation is an insurance company which has applicable insurance liabilities, as reported on its annual financial statement, exceeding 25% of its total assets. Applicable insurance liabilities means, with respect to our property and casualty reinsurance business, reserves for loss and loss adjustment expenses, and excluding unearned premium reserves.
The exception for insurance companies is intended to ensure that a qualifying insurance entity’s income is not treated as passive income, except to the extent such income is attributable to financial reserves in excess of the reasonable needs of the insurance business. We intend to operate our business with financial reserves and
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applicable insurance liabilities at levels that should not cause us to be deemed PFICs, although we cannot provide definitive assurance that we will be successful in structuring our operations to meet such levels nor can we ensure that the IRS will not successfullychallenge our status. If we are unable to underwrite sufficient amount of risks and maintain a sufficient amount of applicable insurance liabilities, any of Greenlight Capital Re, Greenlight Re, Viridis Re or GRIL may become a PFIC.
In addition, sufficient risk must be transferred under an insurance entity’s contracts with its insureds in order to qualify for the insurance exception. Whether our insurance contracts possess adequate risk transfer for purposes of determining whether income under our contracts is insurance income, and whether we are predominantly engaged in an insurance business, are subjective in nature and there is little authoritative tax guidance on these issues. We cannot provide assurance that the IRS will not successfullychallenge our interpretation of the scope of the active insurance company exception and our qualification for the exception. Further, the IRS may issue regulatory or other guidance that causes us to fail to qualify for the active insurance company exception on a prospective or retroactive basis. Therefore, we cannot provide definitive assurance that we will satisfy the exception for insurance companies and will not be treated as PFICs currently or in the future.
Controlled Foreign Corporation (“CFC”). United States persons who, directly or indirectly or through attribution rules, own 10% or more of the total combined voting power or value of our shares, which we refer to as United States 10% shareholders, may be subject to the controlled foreign corporation, or CFC, rules. Under the CFC rules, each United States 10% shareholder must annually include their pro-rata share of the CFC’s “subpart F income” and “global intangible low-tax income” in their gross income in the year earned by the CFC, even if no distributions are made. This income inclusion rule does not apply to United States persons that are partnerships. In general, a foreign insurance company will be treated as a CFC only if during the taxable year United States 10% shareholders collectively own more than 25% of the total combined voting power or total value of the entity’s shares. We believe that the dispersion of our ordinary shares among holders and the restrictions placed on transfer, issuance or repurchase of our ordinary shares, will in most cases prevent shareholders who acquire ordinary shares from being United States 10% shareholders. We cannot provide assurance, however, that these rules will not apply to you if you are or become a United States 10% shareholder. In particular, recent changes to the definition of a United States 10% Shareholder, whereby both vote and value are tested, and recent changes to the constructive ownership rules, whereby shares owned by non-United States persons can be attributed to United States persons, may increase the likelihood of these rules applying. If you are a United States person, we strongly urge you to consult your own tax advisor concerning the CFC rules.
Related Person Insurance Income. If:
our gross income attributable to insurance or reinsurance policies where the direct or indirect insureds are our direct or indirect United States shareholders or persons related to such United States shareholders equals or exceeds 20% of our gross insurance income in any taxable year; and
direct or indirect insureds and persons related to such insureds owned directly or indirectly 20% or more of the voting power or value of our stock.
a United States person (other than a partnership) who owns ordinary shares directly or indirectly on the last day of the taxable year would most likely be required to include their pro-rata share of our related person insurance income for the taxable year in their income. This amount would be determined as if such related person insurance income were distributed proportionally to the United States persons at that date. We do not expect that we will knowingly enter into reinsurance agreements in which, in the aggregate, the direct or indirect insureds are, or are related to, owners of 20% or more of the ordinary shares. We do not believe that the 20% gross insurance income threshold will be met. However, we cannot provide assurance that this is or will continue to be the case. Consequently, we cannot provide assurance that a person who is a direct or indirect United States shareholder will not be required to include amounts in its income in respect of related person insurance income in any taxable year.
If a United States shareholder is treated as disposing of shares in a foreign insurance corporation that has related person insurance income and in which United States persons own 25% or more of the voting power or value of the entity’s shares, any gain from the disposition will generally be treated as a dividend to the extent of the United States shareholder’s portion of the corporation’s undistributed earnings and profits that were accumulated during the period that the United States shareholder owned the shares. In addition, the shareholder will be required to comply with certain reporting requirements, regardless of the amount of shares owned by the direct or indirect United States shareholder. Although not free from doubt, we believe these rules should not apply to dispositions of ordinary shares because Greenlight Capital Re is not directly engaged in the insurance business and because proposed United States Treasury regulations applicable to this situation appear to apply only in the case of shares
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of corporations that are directly engaged in the insurance business. We cannot provide assurance, however, that the IRS will interpret the proposed regulations in this manner or that the proposed regulations will not be promulgated in final form in a manner that would cause these rules to apply to dispositions of ordinary shares.
United States tax-exempt organizations who own ordinary shares may recognize unrelated business taxable income.
If you are a United States tax-exempt organization you may recognize unrelated business taxable income if a portion of our subpart F insurance income is allocated to you. In general, subpart F insurance income will be allocated to you if we are a CFC as discussed above and you are a United States 10% shareholder or there is related person insurance income and certain exceptions do not apply. Although we do not believe that any United States persons will be allocated subpart F insurance income, we cannot provide assurance that this will be the case. If you are a United States tax-exempt organization, we advise you to consult your own tax advisor regarding the risk of recognizing unrelated business taxable income.
The Tax Cuts and Jobs Act (“TCJA”) may cause us to undertake changes to the manner in which we conduct our business and could subject United States persons who own ordinary shares to United States income taxation on our undistributed earnings.
On December 22, 2017, the TCJA was signed into law. The TCJA provides a bright-line test that a non-U.S. insurance company only will receive the benefit, for passive foreign investment company purposes, of being engaged in the active conduct of an insurance business if its applicable insurance liabilities constitute more than 25% of its total assets. For this purpose, the term “applicable insurance liabilities” does not include unearned premium reserves. One of the TCJA’s potential impacts is that this limitation could result in the treatment of offshore insurers or reinsurers that write business on a low frequency/high severity basis, such as property catastrophe companies and financial guaranty companies, as PFICs, as significant reserves for losses may not be recorded until a catastrophic event actually occurs. Accordingly, subject to any future corrections or clarifications that may be made to the TCJA, or any additional regulations that may be promulgated thereunder, the Company will be treated as a PFIC for any taxable year in which it does not meet the bright-line applicable insurance liabilities requirement of the TCJA.
At December 31, 2025, we met the bright-line applicable insurance liabilities test. However, there is still substantial uncertainty regarding the application of the test. We cannot guarantee that we will continue to meet the bright-line applicable insurance liabilities test in future periods. In the event that we cannot meet this test, shareholders that are United States persons will be subject to United States income taxation on our undistributed earnings.
Further changes in United States tax regulations and laws including the rules regarding passive foreign investment companies could have a material impact on our ability to qualify for the insurance company exemption and/or change our status for United States persons who own ordinary shares.
A non-U.S. corporation will generally be considered a passive foreign investment company (“PFIC”), for U.S. federal income tax purposes, in any taxable year if either (i) at least 75% of its gross income for such year is passive income or (ii) at least 50% of the value of its assets is attributable to assets that produce or are held for the production of passive income.
Based on our past and current projections of our income and assets, we do not expect the Company to be a PFIC for the 2025 taxable year or for the foreseeable future. However, since our projections may differ from our actual business results and our market capitalization and value of our assets may fluctuate, we cannot definitively assure you that we will not be or become a PFIC in the current taxable year or any future taxable year.
We are monitoring developments with respect to both the applicable insurance liabilities test and the IRS regulations. At this time, we cannot predict whether or what, if any, additional regulations will be adopted or additional legislation will be enacted. If regulations are adopted or legislation enacted that cause us to fail to meet the requirements of the insurance company exception, or if we fail to meet the applicable insurance liabilities test such failure could have a material adverse effect on the taxation of our shareholders who are U.S. persons. In that event we may undertake further changes to the manner in which we conduct our business, which also could have a material effect on our results of operations.
The tax laws and interpretations regarding whether an entity is engaged in a United States trade or business, is a CFC, has related party insurance income or is a PFIC are subject to change, possibly on a retroactive basis. New
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regulations or pronouncements interpreting or clarifying such rules may be forthcoming from the IRS. We are not able to predict if, when or in what form such guidance will be provided and whether such guidance will have a retroactive effect.
The TCJA may have a detrimental effect on the Company and its assets.
The regulatory and tax environment globally is evolving, and changes in the regulation or taxation of the Company and its assets may materially adversely shareholders. The TCJA among other things, made significant changes to the rules applicable to the taxation of the Company and its assets, such as changing the rules applicable to active insurance income for passive foreign investment company purposes (discussed above), changing rules applicable to controlled foreign investment company purposes, new base erosion rules, changing the general corporate tax rate to a flat 21% rate, modifying the rules regarding limitations on certain deductions, introducing a capital investment deduction in certain circumstances, placing certain limitations on the interest deduction, modifying the rules regarding the usability of certain net operating losses, and the migration from a worldwide system of taxation to a modified territorial system. At this time the ultimate outcome of the legislation on the Company and its shareholders is uncertain and could be adverse. Shareholders should consult their own tax advisors regarding potential changes in tax laws.
If investments held by GRIL are determined not to be integral to the reinsurance business carried on by GRIL, additional Irish tax could be imposed and our business and financial results could be materially adversely affected.
Based on administrative practice, taxable income derived from investments made by GRIL is generally taxed in Ireland at the rate of 12.5% on the grounds that such investments either form part of the permanent capital required by regulatory authorities, or are otherwise integral to the reinsurance business carried on by GRIL. GRIL intends to operate in such a manner so that the level of investments held by GRIL does not exceed the amount that is integral to the reinsurance businesses carried on by GRIL. If, however, investment income earned by GRIL exceeds these thresholds or if the administrative practice of the Irish Revenue Commissioners changes, Irish corporation tax could apply to such investment income at a higher rate (currently 25%) instead of the general 12.5% rate, and our results of operations could be materially adversely affected.
The impact of the initiative of the OECD and the EU to eliminate harmful tax practices is uncertain and could adversely affect our tax status in the Cayman Islands where we are exempt from income taxes.
The OECD has published reports and launched a global dialogue among member and non-member countries on measures to limit harmful tax competition. These measures are largely directed at counteracting the effects of tax neutral jurisdictions and preferential tax regimes in countries around the world. The Cayman Islands was removed from the EU’s list of non-cooperative jurisdictions for tax purposes in October 2020 following the introduction of economic substance and private funds legislation and it is considered to be a country which co-operates with the EU with no pending commitments. While the Cayman Islands is currently on the list of co-operative jurisdictions, we are not able to predict if additional requirements will be imposed, and if so, whether changes arising from such additional requirements will subject us to additional taxes. The Cayman Islands’ economic substance legislation was evaluated in June 2019 by the OECD’s Forum on Harmful Tax Practices as “not harmful”, which is the highest rating possible. There are no immediate regulatory, tax, trade or other legal impacts to the Company, but we are not able to predict any future EU actions.
On October 8, 2021, the OECD announced an accord endorsing and providing an implementation plan for a global minimum tax rate of at least 15% for large multinational corporations on a jurisdiction-by-jurisdiction basis, known as “Pillar Two.” While the Company is not currently aware of any definitive actions being taken in the Cayman Islands to implement a minimum tax, Ireland and the United Kingdom have enacted legislation implementing Pillar Two, including an “undertaxed profit rule” that came into effect in both countries in 2025. If the Cayman Islands does not adopt a minimum tax, the undertaxed profits rule may allow Irish or United Kingdom tax authorities to collect more tax from our Irish or United Kingdom companies. The global minimum tax rules implemented in different jurisdictions (including the undertaxed profit rule) would apply to overseas profits of multinational firms with annual revenue of more than €750 million. While these global minimum tax rules are not expected to apply to the Company in 2026 as currently proposed and being implemented in jurisdictions applicable to the Company’s operations, due to the Company’s revenues currently falling below the applicable revenue threshold test (that tests meeting the annual €750 million revenue threshold for at least two of the four fiscal years immediately preceding the tested fiscal year), adjustments to the threshold or continued growth of the Company’s revenues could impact the Company’s Pillar Two position in future periods beyond 2026. Further, even if the Company did eventually meet the applicable
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threshold due to meeting the revenue test in at least two fiscal years within a four-year period, then given the size and structure of the Company, the Company may be eligible to meet an initial phase transitional safe harbor provided for in the model rules of the accord (and incorporated into the Irish and UK legislation), which provides relief from taxation under the undertaxed profit rule for a period of up to five additional years after the Company comes within the scope of the rules.
We may become subject to taxation in the Cayman Islands, which would negatively affect our results.
The Government of the Cayman Islands, does not, under existing legislation, impose any income, corporate or capital gains tax, estate duty, inheritance tax, gift tax or withholding tax upon Greenlight Re, GLRE or Viridis Re. Each of Greenlight Re, GLRE and Viridis Re have applied for and received an undertaking from the Governor-in-Cabinet of the Cayman Islands that, in accordance with Section 6 of the Tax Concessions Act (as revised) of the Cayman Islands, for a period of 20 years from the date of the undertaking (until December 2043 in the case of Viridis Re and until January 2045 in the case of Greenlight Re and GLRE), each company will be exempt from any law which is enacted in the Cayman Islands imposing any tax on profits, income, gains or appreciations of Greenlight Re, GLRE or Viridis Re or their operations. We cannot be assured that after the expiration of the respective certificates that we would not be subject to any such tax. As the law currently stands, upon the expiration of the current exemption, it will be possible for us to apply for another 20 year exemption for each of Greenlight Re, GLRE and Viridis Re, which we plan to do. If we were to become subject to taxation in the Cayman Islands, our financial condition and results of operations could be materially and adversely affected.
Income from Investment in Solasglas
Financial Condition
Liquidity and Capital Resources
Liquidity
Capital Resources
Contractual Obligations and Commitments
Critical Accounting Estimates
Premium Recognition
Loss and LAE Reserves
Investments Valuation
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Overview
Business Overview
We are a global specialty property and casualty reinsurer headquartered in the Cayman Islands, with an underwriting and investment strategy that we believe differentiates us from most of our competitors. Our goal is to build long-term shareholder value by providing risk management solutions to the insurance, reinsurance, and other risk marketplaces. Refer to “Part 1, Item 1. Business ” for additional information.
We earned a net income of $74.8 million for the year ended December 31, 2025, an increase of $32.0 million, or 74.8% compared to the prior year, predominantly due to strong underwriting results and favorable foreign exchange movement in 2025, partially offset by lower net investment income from Innovations and lower yields on restricted cash and cash equivalents.
The following is a summary of our financial performance for the year ended December 31, 2025, compared to the prior year:
• Gross premiums written was $773.3 million, an increase of 10.7%;
• Net premiums earned was $661.1 million, an increase of 6.6%;
• Net underwriting income was $35.7 million, compared to net underwriting loss of $8.2 million;
• Total investment income was $60.2 million, a decrease of 24.4%;
• Foreign exchange gains were $8.5 million, compared to foreign exchange losses of $5.6 million;
• Diluted EPS was $2.17, compared to $1.24, an increase of 75.0%; and
• Fully diluted book value per share was $20.43, an increase of $2.48, or 13.8%.
Outlook and Trends
Reinsurance market conditions
At the January 1, 2026 renewals, we experienced greateropportunities owing to our stronger balance sheet and the upgrade of our A.M. Best Rating to A (Excellent), but we also faced a more competitive market. Rate changes for Open Market business varied significantly by line of business: property and specialty rates experienced downward pressure, whereas casualty rates increased. Attachment points and other terms and conditions mostly held firm.
Although January 1 st , is not historically a significant renewal date for our Innovations portfolio, we observed more opportunities with rate holding up well. In the current market conditions, we see increasing opportunities to leverage retrocession coverage, and we will take advantage of these opportunities where they enhance our economics and risk profile.
General economic conditions
There are many factors contributing to an uncertain global economic outlook, and in particular, we believe that inflationary trends of recent years could persist. We continue to consider the potential impact of relevant economic factors on our underwriting portfolio. On the investment side, DME Advisors regularly monitors and re-positions Solasglas’ investment portfolio to manage the impact of inflation on its underlying investments and holds macro positions to benefit from a rising inflationary environment. DME Advisors remains conservatively positioned as it believes the equity markets are very expensive.
We believe trade policies will continue to cause uncertainty and volatility. In February 2026, the U.S. Supreme Court struck down the Administration’s tariffs enacted under the International Emergency Economic Powers Act (IEEPA) of 1977, but the Administration stated it will enact new tariffs under several other legislative acts.
Revenues and Expenses
Revenues
We derive our revenues from two principal sources:
• premiums from reinsurance on property and casualty business assumed (net of any premiums ceded) - see “ Critical Accounting Estimates ” section of this MD&A; and
• income from investments, including:
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• income (or loss) generated from our investment in Solasglas, net of management fee and performance compensation;
• gains (or losses) from our other investments, including Innovations-related investments; and
• interest income on our cash and cash equivalents, fixed maturities investment portfolio and FAL.
In addition, we may from time to time derive other income from foreign exchange gains (or losses) relating to underwriting balances, net investment income from Lloyd’s syndicates, fees generated from advisory services, and fees relating to overrides, profit commissions, and fees due upon the early termination of contracts.
Expenses
Our expenses consist primarily of the following:
underwriting losses and LAE;
acquisition costs;
underwriting expenses;
corporate and other expenses (also referred as “G&A”);
interest expense on deposit-accounted contracts and debt;
income taxes.
The extent of our net losses and LAE incurred is a function of the amount and type of reinsurance contracts we write and the loss experience of the underlying coverage. Refer to “ Critical Accounting Estimates ” section of this MD&A.
Acquisition costs consist primarily of brokerage fees, ceding commissions, premium taxes, profit commissions, letters of credit and trust fees, and federal excise taxes. We amortize deferred acquisition costs relating to successfully bound reinsurance contracts over the related contract term.
Underwriting expenses consist primarily of compensation costs related to our underwriting activities, in addition to an allocation of corporate overhead costs.
Corporate and other expenses consist primarily of compensation costs related to non-underwriting activities, including Innovations related investments and corporate personnel. Additionally, these also include professional fees (non-claim related), director compensation, travel and entertainment, information technology, rent, and other general operating costs, net of an allocation to underwriting expenses.
Deposit interest expense relates to the accretion costs for deposit-accounted contracts that did not meet the risk transfer condition for reinsurance accounting under U.S. GAAP.
Interest expense consists of interest paid and accrued on our debt and the amortization of the related deferred financing costs.
Key Financial Measures and Non-GAAP Measures
Management uses certain key financial measures, some of which are not prescribed under U.S. GAAP rules and standards (“non-GAAP financial measures”), to evaluate our financial performance, financial position, and the change in shareholder value. Generally, a non-GAAP financial measure, as defined in SEC Regulation G, is a numerical measure of a company’s historical or future financial performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented under U.S. GAAP. We believe that these measures, which may be calculated or defined differently by other companies, provide consistent and comparable metrics of our business performance to help shareholders understand performance trends and facilitate a more thorough understanding of the Company’s business. Non-GAAP financial measures should not be viewed as substitutes for those determined under U.S. GAAP.
We use the following non-GAAP financial measure in this Annual Report.
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Fully Diluted Book Value Per Share
Our primary financial goal is to increase fully diluted book value per share over the long term. We use fully diluted book value as a financial measure in our incentive compensation plan.
We believe that long-term growth in fully diluted book value per share is the most relevant measure of our financial performance because it provides management and investors a yardstick to monitor the shareholder value generated. Fully diluted book value per share may also help our investors, shareholders, and other interested parties form a basis of comparison with other companies within the property and casualty reinsurance industry. Fully diluted book value per share should not be viewed as a substitute for the most comparable U.S. GAAP measure, which in our view is the basic book value per share.
We calculate basic book value per share as (a) ending shareholders' equity, divided by (b) the total ordinary shares issued and outstanding, as reported in the consolidated financial statements.
Fully diluted book value per share represents basic book value per share combined with any dilutive impact of in-the-money stock options and all outstanding restricted stock units, or “RSUs”. We believe these adjustments better reflect the ultimate dilution to our shareholders.
The following table presents a reconciliation of the fully diluted book value per share to basic book value per share (the most directly comparable U.S. GAAP financial measure):
At December 31,
Numerator for basic and fully diluted book value per share:
Total equity as reported under U.S. GAAP
Denominator for basic and fully diluted book value per share:
Ordinary shares issued and outstanding as reported and denominator for basic book value per share
Add: In-the-money stock options (1) and all outstanding RSUs
Denominator for fully diluted book value per share
Basic book value per share
Increase in basic book value per share
Increase in basic book value per share
Fully diluted book value per share
Increase in fully diluted book value per share
Increase in fully diluted book value per share
(1) Assuming net exercise by the grantee.
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Consolidated Results of Operations
The table below summarizes our consolidated operating results.
Change
Underwriting results:
Gross premiums written
Net premiums written
Net premiums earned
Net loss and LAE incurred:
Current year
Prior year (1)
Net loss and LAE incurred
Acquisition costs
Underwriting expenses
Deposit interest expense
Net underwriting income (loss)
Investment results:
Income from investment in Solasglas
Net investment income
Total investment income
Corporate and other expenses
Foreign exchange gains (losses)
Interest expense
Income tax expense
Net income
Diluted earnings per share
Underwriting ratios:
% Point Change
Attritional loss ratio
Large event loss ratio
CAT event loss ratio
Current year loss ratio
Prior year reserve development ratio
Loss ratio
Acquisition cost ratio
Composite ratio
Underwriting expense ratio
Combined ratio
1 The net financial impact associated with changes in the estimate of losses incurred in prior years, which incorporates earned reinstatement premiums assumed and ceded, adjustments to assumed and ceded acquisition costs, and deposit interest income and expense, was a loss of $11.4 million in 2025 (2024: $21.8 million).
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Consolidated Results of Operations for 2025 compared to 2024
Basic book value per share increased by $2.63 per share, or 14.4%, to $20.89 per share from $18.26 per share at December 31, 2024. Fully diluted book value per share increased by $2.48 per share, or 13.8%, to $20.43 per share from $17.95 per share at December 31, 2024.
For the year ended December 31, 2025, net income increased by $32.0 million to $74.8 million, driven mainly by the following:
• Underwriting income : Increased by $43.8 million due to 6.8 percentage points improvement in our combined ratio, driven predominantly by improved current year loss ratio and lower adverse prior year reserve development ratio. The lower attritional loss and CAT event loss ratios contributed to the lower current year loss ratio; partially offset by an increase in large event loss ratio. Refer to the “ Results by Segment ” section of the MD&A for further discussion and analysis.
• Solasglas investment: Solasglas returned 7.5% in 2025, compared to 9.8% in 2024. However, income from our Solasglas investment was $2.1 million higher in 2025 versus 2024, due to the growth in the Investment Portfolio.
• Foreign exchange gains (losses) : $8.5 million foreign exchange gains for 2025, compared to $5.6 million foreign exchange losses for 2024, driven mainly by a stronger pound sterling movement against the U.S. dollar in 2025.
• Interest expense : Decreased by $1.5 million predominantly driven by a decrease in the average outstanding debt balance in 2025 as a result of debt repayment due strong cash flows generated from operations.
Offset partially by:
• Investment income : Decreased by $19.4 million primarily driven by lower investment income on cash and cash equivalents mainly due to lower yields, losses on Innovations investments, and lower returns on funds withheld by third party Lloyd’s syndicates. The Lloyd’s syndicates invest a portion of these funds in fixed maturity securities, equities, and investment funds. We record our share of the investment income and fair value adjustments on these securities when the syndicates report them to us, generally on a quarter in arrears. See Note 14 “ Net Investment Income ” of the consolidated financial financial statements for further details.
• Corporate and other expenses : Increased by $5.2 million predominantly driven by an increase in non-underwriting personnel costs, including higher incentive compensation expense as a result of strong underwriting results in 2025.
• Income tax expense : Increased by $2.7 million due to increased taxable income from our operations in Ireland and U.K.
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Segment Results
We have two operating segments: Open Market and Innovations. The following is a discussion and analysis for each reporting segment for the years ended December 31, 2025 and 2024.
Open Market Segment
Results for the Open Market segment were as follows:
Year ended December 31
% Change
Gross premiums written
Net premiums written
Net premiums earned
Net loss and LAE incurred
Acquisition costs
Other underwriting expenses
Deposit interest expense, net
Underwriting income
Net investment income
Income before income taxes
Underwriting ratios:
% Point Change
Loss ratio
Acquisition cost ratio
Composite ratio
Underwriting expenses ratio
Combined ratio
Gross Premiums Written
Gross premiums written by line of business were as follows:
Year ended December 31
Change
Casualty
Financial
Health
Multiline
Property
Specialty
Total
Gross premiums written within our Open Market segment in 2025 increased by $48.4 million or 8%, compared to 2024. The increase was predominantly attributable to the following lines of business:
• Multiline :The $71.1 million, or 39%, increase was driven mostly by growth in our FAL business bound in 2025, coupled with growth from new construction and engineering business bound in 2025. This was partially offset by non-renewal of commercial auto business.
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• Financial : The $13.8 million, or 22%, increase was mainly due to the reporting of additional premiums from previous treaty years in our mortgage business, coupled with rate and exposure growth in our transactional liability business and new surety business bound in 2025.
The above was partially offset by the decrease in our casualty, property and specialty lines of business. The significant decrease in casualty business is predominantly a result of our decision to reduce our casualty exposure through non-renewal of certain general liability and workers’ compensation programs.
Net Premiums Written
Ceded premiums written in 2025 was $50.5 million, resulting in net premiums written of $601.7 million, compared to $62.4 million and $541.4 million, respectively, in 2024. The decrease in ceded premiums written of 19% was driven by reduced quota share retrocessional activity within our property business due to lower inward premiums. Additionally in 2024, we reinstated certain retrocession excess of loss treaties in which the full coverage was deemed exhausted due to the Baltimore Bridgeloss. This was partially offset mainly by additional excess of loss retrocessional coverage within our specialty business in 2025 to manage our overall exposure to aviation, marine and energy risks.
Net Premiums Earned
For our Open Market segment, net premiums earned by line of business were as follows:
Year ended December 31
Change
Casualty
Financial
Health
Multiline
Property
Specialty
Total
Net premiums earned in 2025 increased by $64.1 million, or 13%, compared to 2024. The change is influenced by the amount and timing of net premiums written during the current year and prior years, coupled with the business mix written in the form of excess of loss versus proportional contracts. Additionally, within the financial line and certain specialty line classes, the gross premiums written for some treaties are earned over multiple years, corresponding with the anticipated risk coverage period. Similarly, the impact of scaling back our casualty business was partially reflected during 2025, and will mostly impact our casualty earned premiums in 2026.
Loss ratio
The components of the loss ratio for our Open Market segment were as follows:
Year ended December 31
% Point Change
Current year:
Attritional loss ratio
Large event loss ratio
CAT event loss ratio
Current year loss ratio
Prior year reserve development ratio
Loss ratio
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Current Year Loss Ratio
The current year loss ratio in 2025 decreased by 3.3 percentage points to 60.5%, compared to 2024, predominantly due to improved attritional loss ratio, offset partially by a higher volume of large event losses. The CAT losses during 2025 primarily related to the California wildfire losses.
Prior Year Reserve Development Ratio
The Open Market segment’s prior year reserve development ratio improved by 1.1 percentage points in 2025 compared to 2024. Refer to Note 8 Loss and LAE Reserves to the consolidated financial statements for further details on the lines of business and prior year development.
Acquisition cost ratio
The acquisition cost ratio decreased by 0.8 percentage points in 2025 compared to 2024, due to the change in business mix, coupled with improved acquisition cost ratios for our multiline and financial lines of business. This was partially offset by an increase in acquisition cost ratio for our specialty line, mainly due to 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 costs as a result of adverseloss reserve development in 2025. Additionally, the acquisition cost ratio for the mortgage business was higher in 2024 due to an increase in profit commission costs on prior years’ treaties.
• Multiline : Driven predominantly from lower acquisition cost ratio for our FAL business, in part due to higher net premiums earned base to absorb fixed brokerage and commissions for new Syndicate 3456 programs.
Underwriting expense ratio
The underwriting expense ratio decreased marginally by 0.3 percentage points to 3.7% in 2025 compared to 2024, mainly due to net premiums earned growing more than our underwriting expenses which included higher incentive compensation due to stronger underwriting performance in 2025. A lower deposit interest expense also contributed to the lower expense ratio for 2025.
Net investment income
Net investment income decreased by 25% to $32.0 million in 2025 compared to 2024, predominantly driven by lower yields on collateralized cash balances and lower returns on funds withheld by third party Lloyd’s syndicates.
Income before income taxes
Income before income taxes for the Open Market segment was $69.7 million for 2025, compared to $47.7 million in 2024, driven predominantly by strong underwriting profits; partially offset by lower net investment income.
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Innovations Segment
Results for the Innovations segment were as follows:
Year ended December 31
% Change
Gross premiums written
Net premiums written
Net premiums earned
Net loss and LAE incurred
Acquisition costs
Other underwriting expenses
Underwriting income (loss)
Net investment income
Corporate and other expenses
Income (loss) before income taxes
Underwriting ratios:
% Point Change
Loss ratio
Acquisition cost ratio
Composite ratio
Underwriting expenses ratio
Combined ratio
Gross Premiums Written
Gross premiums written by line of business within our Innovations segment were as follows:
Year ended December 31
Change
Casualty
Financial
Health
Multiline
Specialty
Total
Gross premiums written in 2025 increased by $26.9 million, or 28%, compared to 2024. All lines of business contributed to the premium growth, particularly our multiline business due to organic premium growth and new business from Syndicate 3456.
Net Premiums Written
For the Innovations segment, ceded premiums written in 2025 was $31.4 million, resulting in net premiums written of $90.2 million, compared to $14.7 million and $80.0 million, respectively, in 2024. The increase in ceded premiums written was predominantly driven by the new whole-account retrocession program in which we have ceded 28% of Innovations-related programs incepting Q4 2024 onwards.
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Net Premiums Earned
Net premiums earned by line of business within the Innovations segment were as follows:
Year ended December 31
Change
Casualty
Financial
Health
Multiline
Specialty
Total
Despite the significant growth in net premiums written in 2025, the net premiums earned was relatively consistent with 2024. This is influenced by the amount and timing of net premiums written during the current year and prior years, coupled with the business mix written in the form of excess of loss versus proportional contracts. Additionally, as previously noted, the whole-account retrocession program for Innovations incepted from the fourth quarter of 2024; whereas this retro program was in place for the full year in 2025. The ceded premium on the whole-account retro program is included in the multiline business in the above table.
Loss ratio
The components of the loss ratio within the Innovations segment were as follows:
Year ended December 31
% Point Change
Current year:
Attritional loss ratio
Large event loss ratio
CAT event loss ratio
Current year loss ratio
Prior year reserve development ratio
Loss ratio
Current Year Loss Ratio
The current year loss ratio in 2025 decreased by 0.5 percentage points, compared to 2024 driven mainly by improved attritional loss ratio for all lines of business, offset partially by a large event loss relating to financial line of business.
The Innovations segment was not impacted by any CAT events for the years presented in the above table.
Prior Year Reserve Development Ratio
The change in prior year reserve development was unfavorable by 0.5 ratio points. Refer to Note 8 Loss and LAE Reserves to the consolidated financial statements for further details on the lines of business and prior year development.
Acquisition cost ratio
While the acquisition cost ratio for the Innovations segment remained relatively consistent with 2024, there was variability within the lines of the business. The increase in acquisition cost ratio, mostly from our financial line, was offset predominantly by the decrease in the specialty business.
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The increase in acquisition costs in the financial line was driven mainly by premium growth from one program at higher acquisition cost; whereas the decrease in acquisition costs in the specialty business was driven mainly by non-renewal of certain quota share reinsurance business that had higher acquisition costs.
Underwriting expense ratio
The underwriting expense ratio increased by 4.5 percentage points to 8.8% in 2025 compared to 2024, as we invested in additional underwriters and infrastructure to drive the Innovations business growth. The increase in personnel costs also included higher incentive compensation driven by the overall company’s underwriting performance in 2025.
Net investment income (loss)
The Innovations segment reported a net investment loss of $10.1 million in 2025, compared to net investment income of $0.7 million in 2024. The investment performance in 2025 was predominantly driven by our Innovations private equity portfolio, primarily due to:
• $22.3 million reversal of previously recognized unrealized gains (impairment charges) on two of our private equity holdings based on new financing rounds at a reduced enterprise value, coupled with fully impaired holdings due to financial distress and a partial debt impairment.
For impairment charges based on reduced enterprise value, 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 charges, we had the following unrealized and realized gains in 2025:
• $8.0 million of unrealized gains from six holdings as a result of latest closed financing rounds by the respective investees, for which the fair value was based on observable price changes in orderly transactions; and
• $2.1 million of realized gain on partial sales relating to two holdings.
We also earned $1.7 million of interest income on cash collateral in 2025, compared to $1.7 million in 2024. While the yield declined in 2025, the average outstanding cash collateral was higher in 2025 compared to 2024.
Income before income taxes
The loss before income taxes for the Innovations segment was $12.9 million in 2025 compared to income before income taxes of $1.8 million in 2024. The performance in 2025 was predominantly driven by net investment loss and, to a lesser extent, an increase in underwriting expenses.
Other Corporate
Runoff Underwriting Business
In late 2023, we made the decision to not renew a property business due to significant CAT losses relating to unprecedented severe convective storms in the U.S. On the quota share reinsurance treaty bound in 2023, we continued to earn premiums in 2024 and incurred additional CAT losses from severe convective storms that occurred in 2024. For the years ended December 31, 2025, and 2024, we incurred an underwriting loss of $1.8 million, and $16.8 million respectively, including prior year adverse development of $2.0 million and $6.2 million, respectively. This was partially offset by investment income of $1.0 million and $1.4 million, respectively, relating to this runoff business.
We have reported the results of the above property runoff business as part of Corporate in Note 18 Segment Reporting in the consolidated financial statements.
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Income from Investment in Solasglas
Our share of Solasglas’ net income increased by $2.1 million to $35.7 million in 2025, compared to 2024. This increase was driven by a higher investment portfolio balance during 2025, offset partially by a lower net investment return. For the year ended December 31, 2025, Solasglas reported a net investment return of 7.5%, compared to 9.8% for 2024.
The following table provides a breakdown of the gross and net investment return for Solasglas:
Long portfolio gains
Short portfolio losses
Macro gains
Other income and expenses (1)
Gross investment return
Net investment return (1)
1 “Other income and expenses” excludes performance compensation but includes management fees. “Net investment return” incorporates both of these amounts. For further information about management fees and performance compensation, refer to Note 16 “ Related Party Transactions ” of the consolidated financial statements.
For the year ended December 31, 2025, the significant contributors to Solasglas’ investment return were long positions in gold, Brighthouse Financial Inc. (BHF) and Teva Pharmaceutical Industries (TEVA). The largest detractors were a long position in Lanxess AG (LXS GY) and two single-name short positions.
For the year ended December 31, 2024, the significant contributors to Solasglas’ investment return were long positions in gold, Kyndryl Holdings (KD) and Green Brick Partners (GRBK). The largest detractors were three single-name short positions.
Each month, we post on our website (www.greenlightre.com) the returns from our investment in Solasglas.
Financial Condition
Investments
The following table provides a breakdown of our total investments:
At December 31,
Investment in Solasglas
Fixed maturities
Other investments
Total investments
At December 31, 2025, our total investments increased by $172.8 million, or 37.5%, to $633.1 million from December 31, 2024..
Investment in Solasglas
Our investment in Solasglas increased by $117.4 million to $504.6 million at December 31, 2025. This was predominantly driven by $81.7 million of net contributions into Solasglas, coupled with the 7.5% net investment return in 2025. The contributions were funded partially from cash flows from operations and from the partial release of restricted cash and FAL.
DME Advisors reports the composition of Solasglas’ portfolio on a delta-adjusted basis, which it believes is the appropriate manner to assess the exposure and profile of investments and reflects how it manages the portfolio. An option’s delta is the option price’s sensitivity to the underlying stock (or commodity) price. The delta-adjusted basis is the number of shares or contracts underlying the option multiplied by the delta and the underlying stock (or commodity) price.
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The following table represents the composition of Solasglas’ investments as a percentage of the investment portfolio:
At December 31,
Long %
Short %
Long %
Short %
Equities and related derivatives
Private and unlisted equity securities
Debt instruments
Total
The above exposure analysis does not include cash (U.S. dollar and foreign currencies), gold and other commodities, credit default swaps, sovereign debt, foreign currency derivatives, interest rate derivatives, inflation swaps and other macro positions. Under this methodology, a total return swap’s exposure is reported at its full notional amount and options are reported at their delta-adjusted basis. At December 31, 2025, Solasglas’ exposure to gold on a delta-adjusted basis was 11.9% (2024: 10.1%).
At December 31, 2025, 94.7% of Solasglas’ portfolio was valued based on quoted prices in actively traded markets (Level 1), 4.1% was composed of instruments valued based on observable inputs other than quoted prices (Level 2), and no instruments were valued based on non-observable inputs (Level 3). At December 31, 2025, 1.2% of Solasglas’ portfolio consisted of private equity funds valued using the funds’ net asset values as a practical expedient.
Fixed Maturities
In late 2025, we began investing funds held in certain regulatory trusts for U.S. cedents in a managed fixed maturity portfolio as well as cash held by Syndicate 3456 in a Lloyd’s approved liquidity fund to generate higher yields on these assets.
The following table provides the credit quality distribution of our fixed maturity portfolio at December 31, 2025.
Credit Rating
Fair Value
AAA
Not Subject to Credit Rating
Fixed Maturities:
U.S. government and agencies
Agency RMBS
Corporate bonds
ABS
Non-agency RMBS
Municipal bonds
Total fixed maturity portfolio
Liquidity fund
Total fixed maturity investments
Our methodology for assigning credit ratings to fixed maturity securities utilizes a rules-based methodology, typically employing the middle rating of Standard & Poor’s (“S&P”), Moody’s, and Fitch ratings. When ratings from only two of these three agencies are available, the lower rating is used. When only one agency rates a security, that rating is used.
At December 31, 2025, the fixed maturity portfolio had a weighted average credit rating of AA+, a book yield of 3.8%, and an average duration of 1.3 years. See Notes 4 “ Fixed Maturities ” and Note 7 “ Fair Value Measureme nts ” for further details.
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Other Investments
The other investment holdings relate to private investments made by Innovations. At December 31, 2025, other investments decreased by $10.2 million to $62.9 million, from $73.2 million at December 31, 2024. The decrease was driven mainly by net investment losses, coupled with the partial sale of two holdings during 2025. This was partially offset by $4.1 million of new investments in 2025.
While we manage a diversified Innovations-related investment portfolio, our top five holdings accounted for 53% (2024: 70%) of the total carrying value. For further information, see Note 5 “ Other Investments ” of the consolidated financial statements.
Restricted cash and cash equivalents
We use our restricted cash and cash equivalents primarily for funding trusts and letters of credit issued to our ceding insurers. Our restricted cash decreased by $52.4 million, or 9.0%, to $532.0 million since December 31, 2024, primarily due to transferring funds held in certain regulatory trusts for U.S. cedents into a managed fixed maturity portfolio.
Reinsurance balances receivable
Our reinsurance balances receivable decreased by $40.1 million, or 5.7%, to $664.4 million since December 31, 2024. This decrease was driven primarily by $25.8 million net reduction in funds held by cedents and $69.1 million net release of FAL; partially offset by $58.0 million increase in premiums held by Lloyd’s syndicates. The net release of FAL was as a result of substituting it with a £45 million LC in favor of Lloyd’s (see 10 “ Debt and Credit Facilitie s ”).
Loss and LAE Reserves; Loss and LAE Recoverable
Our total gross loss and LAE reserves increased by $107.0 million, or 12.4%, to $968.0 million since December 31, 2024. See Note 8 “ Loss and Loss Adjustment Expense Reserves ” of the consolidated financial statements for a summary of changes in outstanding loss and LAE reserves, current year CAT losses, prior period reserve development, and analysis of our incurred and paid claims development and claims duration for each of our reporting segments. In addition, refer to “ Critical Accounting Estimates - Loss and LAE Reserves ” within this MD&A for information on the reserving techniques, assumptions and processes we follow to estimate our loss and LAE reserves.
Our total loss and LAE recoverable decreased by $4.4 million, or 5.1%, to $81.4 million since December 31, 2024, mainly due to updated estimate for loss recoveries from prior years. Virtually all the outstanding balance is based on estimated recoveries not yet due. See Note 9 “ Retrocession ” of the consolidated financial statements for a description of the credit risk associated with our retrocessionaires.
CatastropheLoss Exposure
Most of our contracts have defined limits of liability that cap our risk exposure. Once these limits are reached, we are not liable for further losses. However, some contracts, especially quota share contracts covering first-dollar exposure, lack aggregate limits.
Our property and Lloyd’s business, and to a lesser extent our casualty and other business, in the Open Market segment include contracts with natural perilloss exposure. We monitor our catastropheloss exposure using PML (net of retrocession and reinstatement premiums), which can vary based on simulated losses and our in-force business composition.
We track natural peril PMLs globally, focusing on peak peril regions and subdividing large geographic areas into individual peril zones. For natural catastrophe PMLs, we use catastrophe models at the 1-in-250-year return period, indicating a 0.4% probability of exceeding the estimated losses in any given year.
PMLs are best estimates based on available modeled data, and actual events may differ significantly from these models. Our PML estimates cover all significant exposures from our reinsurance operations, including property, marine and energy, motor, and catastrophe workers’ compensation.
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At January 1, 2026, our estimated largest PML at a 1-in-250-year return period for a single event and in aggregate was $138.8 million and $151.2 million, respectively, both relating to the peril of North Atlantic Hurricane, compared to $116.3 million and $129.1 million, respectively, at January 1, 2025. Our PMLs increased as we grew our clients and accessed new business that met our profitability requirements.
The below table contains the expected modeled loss for each of our peak peril regions and sub-regions for both a single event loss and aggregate loss measures at the 1-in-250-year return period.
January 1, 2026
Net 1-in-250 Year Return Period
Peril
Single Event Loss
Aggregate Loss
North Atlantic Hurricane
Florida Hurricane
Southeast Hurricane (excluding Florida)
Gulf of Mexico Hurricane
Northeast Hurricane
North America Earthquake
California Earthquake
Pacific Northwest Earthquake
New Madrid Earthquake
Japan Earthquake
Japan Windstorm
Europe Windstorm
Liquidity and Capital Resources
Liquidity
Liquidity is a measure of a company’s ability to generate sufficient cash flows to meet the short-term and long-term cash requirements of its business operations. We manage liquidity at the holding company and operating subsidiary level.
Holding Company
Greenlight Capital Re is a holding company with no operations of its own and its assets consist primarily of investments in its subsidiaries. Accordingly, Greenlight Capital Re’s future cash flows depend on the availability of dividends or other statutorily permissible distributions, such as returns of capital, from its subsidiaries. The ability to pay dividends and/or distributions is limited by:
• the applicable laws and regulations of the countries in which Greenlight Capital Re’s subsidiaries operate (see Note 19 “ Statutory Requirements ” to the consolidated financial statements);
• the need to maintain adequate capital levels to support our reinsurance operations; and
• the need to preserve our current “A (Excellent)” rating by A.M. Best.
As a holding company, Greenlight Capital Re has minimal continuing cash needs, most of which are related to the payment of corporate and general administrative expenses and interest expenses. Our current policy is to retain earnings to support the growth of our business. We currently do not expect to pay dividends on our ordinary shares.
We anticipate positive cash flows from operations (underwriting activities and investment income) to be sufficient to cover cash outflows under most loss scenarios in the near term. Based on expected cash flows from operations, financing arrangements and redemptions from related party investment fund as needed (subject to three day’s notice to the general partner), we believe we have sufficient liquidity to cover our working capital requirements and other contractual obligations and commitments through the foreseeable future.
Operating Subsidiaries
Our sources of funds from operating subsidiaries consist primarily of premium receipts (net of brokerage and ceding commissions), investment income, and other income. We use cash from our operations to pay losses and loss
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adjustment expenses, profit commissions, interest, and G&A expenses. Our reinsurance business inherently provides liquidity as premiums are received in advance of the time claims are paid. However, the amount of cash required to fund loss payments can fluctuate significantly from period to period due to the low frequency / high severity nature of certain types of reinsurance business we write.
The following table summarizes our sources and uses of funds:
Total cash provided by (used in):
Operating activities
Investing activities
Financing activities
Effect of currency exchange on cash (1)
Net cash outflows
Cash, beginning of period
Cash, end of period
(1) Cash includes unrestricted and restricted cash and cash equivalents - see Note 6 “ Restricted Cash and Cash Equivalents ” of the consolidated financial statements.
Cash provided by operating activities
The $98.7 million increase in cash provided by operating activities in 2025 compared to 2024 was driven mainly by the release of FAL and higher net income. We expect cash from operations to ebb and flow with our underwriting activities. Cash inflows from underwriting activities generally include premiums, net of acquisition costs, and reinsurance recoverables. Cash outflows principally include payments of losses and LAE, payments of retrocession premiums, and operating expenses. Cash provided by operating activities may vary significantly from period to period due to the timing of these inflows and outflows.
Cash used in investing activities
The $52.6 million increase in cash used for investing activities was driven predominantly by the new fixed maturity investments transferred from restricted cash; offset partially by a lower net contribution to Solasglas in 2025.
Cash used in financing activities
Financing cash outflows in 2025 were driven mainly by the $9.8 million of share repurchases and $55.3 million of debt repayments. In 2024, we had $7.5 million of share repurchases and $13.8 million of debt repayments.
Capital Resources
The following table summarizes our debt and capital structure:
Debt - outstanding principal
Shareholders’ equity
Total capital
Ratio of debt to shareholders’ equity
The ratio of debt to shareholders’ equity provides an indication of our leverage and capital structure, along with some insights into our financial strength. In addition to the above capital, we also have LOC facilities to support our reinsurance business operations where we are not licensed or admitted as a reinsurer (see Note 10 “ Debt and Credit Facilities ” of the consolidated financial statements for further information).
Debt
As a result of strong operating cash flows and a new Revolving Credit Facility, we repaid the Term loans in 2025. At December 31, 2025, we had $5.0 million of outstanding debt under the Revolving Credit Facility.
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Total shareholders’ equity
Total shareholders’ equity increased by $72.1 million to $708.0 million since December 31, 2024. The increase was primarily due to the net income of $74.8 million reported for the year, coupled with $7.1 million of share-based compensation adjustment to additional paid-in capital. This was partially offset by $9.8 million of share repurchases in the open market at an average price of $13.76 per share.
At December 31, 2025, there were 33,897,709 outstanding ordinary shares, a decrease of 933,615 since December 31, 2024, mainly due to 714,044 shares repurchased and 376,686 forfeited restricted shares, offset partially by issuance of restricted shares and ordinary shares for vested RSUs.
We expect that the existing capital base and internally generated funds will be sufficient to implement our business strategy for the foreseeable future. However, to provide us with flexibility and timely access to public capital markets should we require additional capital for working capital, capital expenditures, acquisitions, or other general corporate purposes, we have a $200.0 million shelf registration (Form S-3 registration statement) filed with the SEC, which became effective on July 5, 2024, and will expire on July 1, 2027.
Contractual Obligations and Commitments
At December 31, 2025, our contractual obligations and commitments by period due were as follows:
Less than
1 year
1-3 years
3-5 years
More than
5 years
Total
Operating activities
Loss and loss adjustment expense reserves (1)
Operating lease obligations (2)
Financing activities
Debt (principal payments) (3)
Total
(1) Due to the nature of our reinsurance operations, the actual amount and timing of the cash flows associated with our reinsurance contractual liabilities will fluctuate, perhaps materially, and, therefore, are highly uncertain. We have not taken into account corresponding reinsurance recoverable on unpaid amounts that would be due to us.
(2) See Note 17 “ Commitments and Contingencies ” of the consolidated financial statements.
(3) See Note 10 “ Debt and Credit Facilities ” of the consolidated financial statements.
Critical Accounting Estimates
Our consolidated financial statements contain certain amounts that are inherently subjective and have required management to make assumptions and best estimates to determine reported values. If certain factors, including those described in “Part I, Item IA. — Risk Factors ,” cause actual events or results to differ materially from our underlying assumptions or estimates. In that case, there could be a material adverse effect on our results of operations, financial condition, or liquidity.
We believe the following are the critical accounting estimates used to prepare our consolidated financial statements:
• Premium recognition
• Loss and LAE reserves
• Investments valuation
The following provides a summary of our accounting policies for the above critical accounting estimates.
Premium Recognition
Gross Premiums Written
We record our property and casualty reinsurance premiums as premiums written based on our best estimate of the ultimate premiums for the contract period. Our estimates are based on actuarial pricing models, information
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received from ceding companies, and from Lloyd’s syndicates (for FAL business). Further, we record reinsurance premiums so long as they meet the risk transfer criteria under U.S. GAAP (see “Deposit Contracts” below).
The recognition of gross premiums written will vary based on the type of the reinsurance contract as follows:
• Excess of loss contracts : typically the contracts state premiums as a percentage of the subject premiums written by the client, subject to a minimum deposit premium. The minimum deposit premium is generally based on an estimate of subject premiums expected to be written by the client during the contract term. At the inception of the contract, we record the total contractual minimum deposit premium, which is subsequently adjusted when the actual subject premium is known. Generally, the adjustment to actual is not material on an aggregate basis.
• Quota share (also known as proportional) contracts : we record our participation share of the estimated ultimate premiums in the same periods in which the underlying insurance contracts are written. For example, for a 12-month quota share reinsurance contract, we will recognize the estimated gross premiums written over 12 months, generally on a linear basis.
• For multi-year contracts: we record reinsurance premiums at the inception of the contract based on our best estimate of total premiums to be received. Premiums are recognized on an annual basis for multi-year contracts where the cedants have the ability to unilaterally commute or cancel coverage within the term of the contract.
We write mostly quota share reinsurance treaties. The following table provides a summary of our estimated gross premiums written for quota share reinsurance contracts incepting during the year:
Open Market segment
Innovations segment
Property runoff
Total quota share estimated premiums
Consolidated gross premiums written
As of % of total consolidated
We regularly review premium estimates. Such review includes our experience with the ceding companies, managing general underwriters, familiarity with each market, the timing of the reported information, a comparison of reported premiums to expected ultimate premiums, along with a review of the aging and collection of premiums. We evaluate the appropriateness of the premium estimates on the basis of these reviews and record any adjustments to these estimates in the period in which they are determined. Changes in premium estimates, including premium receivable on both excess of loss and quota share contracts, are not unusual and may result in significant adjustments in any period. A portion of amounts included in “ Reinsurance balances receivable ” in the consolidated balance sheets represent estimated premiums written, net of commissions and brokerage, that are not currently due based on the terms of the underlying contracts. Additional premiums due on a contract with no remaining coverage period are earned in full when written.
Certain contracts provide for reinstatement premiums in the event of a loss. Reinstatement premiums are written and earned when a triggering loss event occurs, based on management’s estimates of the ultimate reinstatement premiums. These estimates are subsequently adjusted when actual reinstatement premiums are known.
Net Premiums Earned
We earn premiums over the risk coverage period. Unearned premiums represent the unexpired portion of reinsurance provided. Changes in circumstances subsequent to the inception of contracts can impact the earnings period. For instance, when exposure limits for a reinsurance contract are reached, any associated unearned premiums are fully earned.
Excess of loss reinsurance contracts are generally written on a “losses occurring” or “claims made” basis over the term of the policy. Accordingly, premiums are earned evenly over the contract term, which is generally 12 months.
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Line slip or proportional insurance/reinsurance contracts are generally written on a “risks attaching” basis, covering claims that relate to the underlying policies written during the terms of these contracts. As the underlying business incepts throughout the contract term, which is generally one year, and the underlying business generally has a one year coverage period, these premiums are generally earned evenly over a 24-month period from inception. For certain classes within financial and specialty lines of business, the underlying risk exposure period extend over several years and accordingly these premiums are earned over up to 60-months.
Deposit Contracts
If we determine that a reinsurance contract does not transfer sufficient risk to merit reinsurance accounting treatment, we report the premium we receive as a deposit liability. Similarly, we report the premium we pay as a deposit asset for ceded contracts that do not transfer sufficient risk to merit reinsurance accounting. Any income and expense on deposit-accounted contracts is calculated using the interest method and recorded in the consolidated statements of operations under “Other income (expense)” and “Deposit interest expense,” respectively.
Loss and LAE Reserves
Estimating our loss and LAE reserves involves a considerable degree of judgment, and our estimates as of any given date are inherently uncertain. Estimating loss and LAE reserves requires us to make assumptions regarding reporting and development patterns, frequency and severity trends, claims settlement practices, potential changes in legal environments, inflation, loss amplification, foreign exchange movements, and other factors. These estimates and judgments are based on numerous considerations and are often revised as (i) we receive changes in loss amounts reported by ceding companies and brokers; (ii) we obtain additional information, experience, or other data; (iii) we develop new or improved methodologies; or (iv) we observe changes in the legal environment.
Our loss and LAE reserves relating to short-tail property risks are typically reported to us and settled more promptly than those relating to long-tail risks. However, the timeliness of loss reporting can be affected by such factors as the nature of the event causing the loss, the location of the loss, whether the loss is from policies in force with primary insurers or with reinsurers, and where our exposure falls within the cedent’s overall reinsurance program.
Our loss and LAE reserves are composed of case reserves (based on claims reported to us), including ACR, and IBNR reserves. These reserves include the associated estimated claims handling costs. The following table summarizes our gross reserves for loss and LAE for each of the reportable segments, by line of business, and the runoff business at December 31, 2025:
Case reserves
IBNR
Total loss and LAE reserves
Open Market segment:
Casualty
Financial
Health
Multiline
Property
Specialty
Total Open Market segment
Innovations segment:
Casualty
Financial
Health
Multiline
Specialty
Total Innovations segment
Corporate (property business in runoff)
Total
% of total
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We determine case reserve estimates based on loss reports received. We may establish ACR in excess of the case reserves reported by cedents if we believe the reported case reserve is inadequate based on other data points we may have. At December 31, 2025, we had no ACR. We determine our IBNR reserve estimates using standard actuarial methods and a combination of our own historical and current loss experience, insurance industry loss experience, assessments of pricing adequacy trends, and our professional judgment. In estimating our IBNR reserve, we estimate the total ultimate loss and LAE we expect to incur and subtract paid claims and case reserves.
The nature and extent of our judgment in the reserving process depend in part upon the type of business. Some of our contracts represent business with a low frequency of claims occurrence and a high potential lossseverity, such as claims arising from natural catastrophes and large loss events. Given the nature of these events, traditional actuarial reserving methods may not be reliable indicators of the final outcome. As such, for contracts or losses of this type, we estimate the ultimate cost associated with a single loss event rather than perform analysis on the historical development patterns of past events to estimate the ultimate losses for an entire accident year. Specifically for catastrophelosses, we estimate our reserves for these large events on a by-contract basis by reviewing policies with known or potential exposure to a particular loss event.
For non-catastrophelosses, we apply standard actuarial methodologies in setting reserves, including paid and incurred loss development, Bornheutter-Ferguson, burning cost, and frequency and severity techniques. We supplement our analysis with industry loss ratio and development pattern information in conjunction with our own experience. The weight given to a particular method will depend on many factors, including the homogeneity within the class of business, the volume of losses, the maturity of the accident year, and the length of the expected development tail. For example, the expected loss ratio method assumes that the ratio of premiums and losses remains constant. In contrast, development methods rely on observable patterns within reported losses, both historical and newly reported, to establish a view of the ultimate loss incurred. Therefore, as an accident year matures, we may migrate from an expected loss ratio method to an incurred development method.
As a predominantly broker-market reinsurer for both excess-of-loss and proportional contracts, we rely on loss information reported to brokers by primary insurers who, in turn, must estimate their losses at the policy level, often based on incomplete and changing information. The information we receive varies by cedent and may include paid losses, estimated case reserves, and an estimated provision for IBNR reserves. Reserving practices and data-reporting quality differ among ceding companies, which adds further uncertainty to our estimation of ultimate losses. The nature and extent of information received from ceding companies and brokers also vary widely depending on the type of coverage, the contractual reporting terms (which are affected by market conditions and practices), and other factors. Due to the lack of standardization of the terms and conditions of reinsurance contracts, the differences in coverage provided to individual clients, and the tendency of those coverages to change rapidly in response to market conditions, we cannot always reliably measure the ongoing economic impact of such uncertainties and inconsistencies.
Time lags are inherent in loss reporting, especially in the case of excess-of-loss reinsurance contracts. The time lags, coupled with the combined characteristics of low claim frequency and high claim severity on such contracts, make the available data less useful for predicting ultimate losses.
In the case of proportional contracts, we rely on an analysis of a cedent’s historical experience, industry information, and the underwriters’ professional judgment in estimating reserves. We also utilize ultimate loss ratio forecasts when reported by cedents and brokers, which are ordinarily subject to three to six-month lags for proportional business. Due to our reliance on ceding companies for claims reporting, our reserve estimates are highly dependent on ceding companies’ judgment. Furthermore, during the loss settlement period, which may last several years, additional facts regarding individual claims and trends will often become known, and case law may change, affecting ultimate expected losses.
Since we rely on ceding company data in establishing our loss and LAE reserves, we maintain procedures designed to mitigate the risk that such information is incomplete or inaccurate. These procedures include: (i) comparisons of expected premiums to reported premiums, which helps us to identify delinquent client periodic reports; (ii) ceding company audits to identify inaccurate or incomplete reporting of claims and ensure that claims are actively and appropriately managed in line with agreed protocols and settlement authority limits; and (iii) underwriting reviews to ascertain that the losses ceded are covered as provided under the contract terms. These procedures are incorporated in our internal controls and are regularly evaluated and amended as market conditions, risk factors, and unanticipated areas of exposure develop.
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We engage an independent third-party actuarial firm to perform a reserve review and opine on the reasonableness and adequacy of the aggregate loss reserves. We provide the third-party actuarial firm with our pricing models, reserving analysis, and other data. The actuarial firm may also inquire about the various assumptions and estimates used in the reserving analysis. The actuarial firm independently creates its own reserving models based on industry loss information, augmented by client-specific loss information and independent assumptions and estimates. Based on various reserving methodologies that the actuarial firm considers appropriate, it creates a loss reserve estimate for each segment in the portfolio. It recommends an aggregate loss reserve, including IBNR. In the event of material differences between our aggregated booked reserves and the actuarial firm's recommended reserves, the reserving committee would be notified, with the reserves adjusted as deemed appropriate. To date, there have been no material differences resulting from the external actuary’s reviews requiring adjustments to our booked reserves.
We monitor the development of our prior-year losses during subsequent calendar years by comparing the actual reported lossesagainst previous estimates and current expectations. The analysis of this loss development is important to the ongoing refinement of our reserving assumptions. Each additional year of loss experience with a given cedent provides additional insight into the accuracy and timeliness of previously reported information.
Estimating loss reserves for our book of longer-tail casualty reinsurance business, which we write on both a proportional and non-proportional basis, involves further uncertainties. In addition to the uncertainties described above, casualty business is generally subject to longer reporting lags than property business, and claims often take several years to settle. During this period, additional factors and trends will be revealed, and we may adjust our reserves accordingly. Therefore, any factors that extend the time until our cedents settle claims add uncertainty to the reserving process.
The uncertainties inherent in the reserving process and the potential for unforeseen developments, including changes in laws and the prevailing interpretation of policy terms, may result in our loss and LAE reserves being materially greater or less than the loss and LAE reserves we initially established. We reflect adjustments to our loss and LAE reserves in our financial results during the period they are determined. Changes to our prior year loss reserves will impact our current underwriting results by improving our results if the prior year reserves prove redundant or impairing our results if the prior year reserves prove insufficient.
We believe that our reserves for loss and LAE are sufficient to cover losses that fall within the terms of our policies and agreements with our insured and reinsured customers based on the methodologies used to estimate those reserves. However, we can provide no assurance that actual losses will not (i) be less than or (ii) exceed our total established reserves.
Please refer to Notes 2 “ Significant Accounting Policies - Loss and Loss Adjustment Expense Reserves and Recoverable ” and 8 “ Loss and Loss Adjustment Expense Reserves ” of our consolidated financial statements for a more detailed explanation of our loss reserving methodology and the loss development tables by accident year, respectively, as required under U.S. GAAP.
Investments Valuation
We carry our investment in Solasglas at fair value, based on the most recent net asset value (“NAV”) obtained from Solasglas’ third-party administrator. Further, Solasglas’ financial statements for the years ended December 31, 2025, 2024, and 2023 were subject to an independent audit in which Solasglas’ external auditors issued an unqualified opinion for these years (see “ Report of Independent Registered Public Accounting Firm ” in the Exhibits).
Our investment in fixed maturities are recognized at fair value. For the fixed maturity portfolio managed by a third party, all fixed maturity securities are classified as Level 2 except for US Treasury securities which are classified as Level 1. Refer to Note 7, “ Fair Value Measurements ” for the valuation methodologies used to determine the fair value of the fixed maturity securities by asset class . For the liquidity fund, as a practical expedient, the fair value is based on NAV obtained from the fund’s third party administrator.
Other investments in our consolidated balance sheets includes private investments that do not have readily determinable fair values. We determine private equity securities’ carrying value based on the original cost, less impairment, plus or minus observable price changes in orderly transactions for an identical or similar investment of the same issuer. At each reporting date, we qualitatively consider whether the investment is impaired on the basis of certain impairment indicators. If we determine that the equity security is impaired on the basis of the qualitative assessment and the estimated fair value is less than the carrying value, we recognize an impairmentloss in “Net investment income (loss)” in the consolidated statements of operations. We determine realized gains and losses
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from other investments based on the specific identification method (by reference to cost or amortized cost, as appropriate). These gains and losses are also included in “Net investment income (loss)” in the consolidated statements of operations. Refer to Innovations Segment - Net Investment Loss in the MD&A, for the valuation techniques and key inputs used by management to calculate the fair value of certain private equity investments during 2025 as a result of our impairment review.
