What changed in GREENLIGHT CAPITAL RE, LTD.'s 10-K — 2023 vs 2024

We earned a net income of $86.8 million for the year ended December 31, 2023, an increase of $61.5 million, or 243% over the prior year, as a result of favorable reinsurance pricing conditions with lower losses from catastrophe and weather-related events (collectively referred as “CAT losses”), coupled with favorable rising interest rate environment for our cash and fixed maturity investments (relating to the Lloyd’s syndicates) as well as favorable foreign exchange movement in 2023.

The following is a summary of our financial performance for the year ended December 31, 2023, compared to the prior year: • Gross premiums written was $636.8 million, an increase of 13.1%; • Net premiums earned was $583.1 million, an increase of 24.2%; • Net underwriting income (1) was $32.0 million, compared to an underwriting loss of $10.7 million; • Total investment income was $66.1 million, a decrease of 4.2% (include 9.4% net return from our investment in SILP, compared to 25.3%); • Diluted EPS was $2.50, an increase of 242%; and • Fully diluted book per share (1) was $16.74, an increase of 16.8%.

(1) See “ Key Financial Measures and Non-GAAP Measures ” section of this MD&A. Outlook and Trends Following strong pricing improvements at the January 1, 2023 renewal season and throughout 2023 (primarily in property catastrophe, aviation, war and terror and marine), we witnessed a more disciplined but still attractive January 1, 2024 renewal season.

In the property market we noted additional capacity entering the market, but we still saw favorable market conditions to grow our book. On our Specialty and FAL books, we noted a healthy amount of competitive interest but we were successful in securing the accounts we targeted for both renewal and new business with some modest rate increases.

The global inflationary pressures have abated from their recent highs. However, we believe loss cost inflation will continue to be a significant concern within the (re)insurance industry, as it can add uncertainty to the cost of claims, particularly for classes of business with long payout tails.

As a result, it creates pricing challenges for new business and valuation challenges in claims reserves. We continue to manage these concerns and risks in multiple ways: • Our underwriting strategy focuses on relatively shorter-tailed business, which is inherently less exposed to inflation than longer-tailed lines.

We estimate the payout duration of our existing reserves at less than three years. • We incorporate inflation assumptions in all our pricing and reassess these assumptions frequently. • We are minimizing our exposure to classes that are experiencing severe supply-chain-driven inflation.

The rising interest rate environment over the last two years has had a mixed impact on our financial results. The Term Loans we secured in 2023 are partially exposed to fluctuations in the SOFR interest rate, and we stand to benefit if the interest rates start decreasing.

The higher interest rates have improved the yield on our restricted cash and cash equivalents and our funds held at Lloyd’s. To the extent interest rates begin to decrease, we may see some of these trends reverse. The SILP investment portfolio is positioned to benefit from an inflationary environment.

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 51 Link to Table of Contents • income from investments, including: • income (or loss) generated from our investment in SILP, 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 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; ● general and administrative (“G&A”) expenses; and ● interest expense on deposit-accounted contracts and debt.

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 E stimates ” 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.

General and administrative expenses consist primarily of salaries and benefits and related costs, including costs associated with our incentive compensation plan, bonuses, and stock compensation expenses. General and administrative expenses also include professional fees (non-claim related), travel and entertainment, information technology, rent, and other general operating costs.

General and administrative expenses reported in our consolidated statements of operations include both underwriting and corporate 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.

The key non-GAAP financial measures used in this Annual Report are: • Fully diluted book value per share; and • Net underwriting income (loss). These non-GAAP financial measures are described below. 52 Link to Table of Contents 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.

In prior years, we calculated the basic book value per share by modifying the denominator to exclude unearned performance-based restricted shares granted after December 31, 2021.

We have revised this calculation in 2023 to eliminate the basic book value per share non-GAAP financial measure and have restated the 2022 comparative basic book value per share in the table below and elsewhere in this Annual Report to conform with the current presentation.

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 “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): December 31, 2023 December 31, 2022 Numerator for basic and fully diluted book value per share: Total equity as reported under U.S.

GAAP $ 596,095 $ 503,120 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 35,336,732 34,824,061 Add: In-the-money stock options and all outstanding RSUs 264,870 277,960 Denominator for fully diluted book value per share 35,601,602 35,102,021 Basic book value per share $ 16.87 $ 14.45 Increase in basic book value per share ($) $ 2.42 $ 0.40 Increase in basic book value per share (%) 16.8 % 2.8 % Fully diluted book value per share $ 16.74 $ 14.33 Increase in fully diluted book value per share ($) $ 2.41 $ 0.34 Increase in fully diluted book value per share (%) 16.8 % 2.4 % Net Underwriting Income (Loss) One way that we evaluate the Company’s underwriting performance is by measuring net underwriting income (loss).

We do not use premiums written as a measure of performance. Net underwriting income (loss) is a performance measure used by management to evaluate the fundamentals underlying the Company’s underwriting operations.

We believe that the use of net underwriting income (loss) enables investors and other users of the Company’s financial information to analyze our performance in a manner similar to how management analyzes performance.

Management also believes this measure follows industry practice and allows the users of financial information to compare the Company’s performance with that of our industry peer group. 53 Link to Table of Contents Net underwriting income (loss) is considered a non-GAAP financial measure because it excludes items used to calculate net income before taxes under U.S. GAAP.

We calculate net underwriting income (loss) as net premiums earned less net loss and loss adjustment expenses, acquisition costs, underwriting expenses (including related G&A expenses), and deposit interest expense.

The measure excludes, on a recurring basis: (1) investment income (loss); (2) other income (expense) not related to underwriting, including foreign exchange gains or losses, and Lloyd’s interest income and expense; (3) corporate G&A expenses; and (4) interest expense.

We exclude total investment income or loss, foreign exchange gains or losses, and Lloyd’s interest income or expense as we believe these items are influenced by market conditions and other factors unrelated to underwriting decisions. Additionally, we exclude corporate G&A and interest expenses because these costs are generally fixed and not incremental to or directly related to our underwriting operations.

We believe all of these amounts are largely independent of our underwriting process, and including them could hinder the analysis of trends in our underwriting operations. Net underwriting income (loss) should not be viewed as a substitute for U.S. GAAP net income before income taxes.

The reconciliations of net underwriting income (loss) to income (loss) before income taxes (the most directly comparable U.S.

GAAP financial measure) on a consolidated basis are shown below: Year ended December 31 2023 2022 Income (loss) before income tax $ 86,930 $ 24,526 Add (subtract): Total investment (income) loss (66,063) (68,983) Other non-underwriting (income) expense (17,872) 11,777 Corporate expenses 23,653 17,793 Interest expense 5,344 4,201 Net underwriting income (loss) $ 31,992 $ (10,686) 54 Link to Table of Contents Consolidated Results of Operations The table below summarizes our consolidated operating results for the years ended December 31: 2023 2022 Underwriting revenue Gross premiums written $ 636,810 $ 563,171 Gross premiums ceded (42,762) (33,429) Net premiums written 594,048 529,742 Change in net unearned premium reserves (10,901) (60,265) Net premiums earned 583,147 469,477 Underwriting related expenses Net loss and loss adjustment expenses incurred: Current year 348,798 316,367 Prior year (1) 11,206 118 Net loss and loss adjustment expenses incurred 360,004 316,485 Acquisition costs 168,877 143,148 Underwriting expenses 19,587 13,813 Deposit interest expense 2,687 6,717 Net underwriting income (loss) (2) 31,992 (10,686) Income from investment in SILP 28,696 54,844 Net investment income 37,367 14,139 Total investment income 66,063 68,983 Corporate expenses 23,653 17,793 Foreign exchange (gains) losses (11,566) 5,988 Other (income) expense, net (6,306) 5,789 Interest expense 5,344 4,201 Income tax expense (benefit) 100 (816) Net income $ 86,830 $ 25,342 Earnings per share: Basic $ 2.55 $ 0.75 Diluted $ 2.50 $ 0.73 Underwriting ratios: Loss ratio - current year 59.8 % 67.4 % Loss ratio - prior year 1.9 % — % Loss ratio 61.7 % 67.4 % Acquisition cost ratio 29.0 % 30.5 % Composite ratio 90.7 % 97.9 % Underwriting expense ratio 3.8 % 4.4 % Combined ratio 94.5 % 102.3 % 1 The net financial impacts associated with changes in the estimate of losses incurred in prior years, which incorporate earned reinstatement premiums assumed and ceded, adjustments to assumed and ceded acquisition costs, and deposit interest expense, were a loss of $15.7 million in 2023 (2022: $12.2 million) . 2 Net underwriting income (loss) is a non-GAAP financial measure.

See “ Key Financial Measures and Non-GAAP Measures ” above for discussion and reconciliation of non-GAAP financial measures. 55 Link to Table of Contents The following provides further details on the significant variances for the year ended December 31, 2023, compared to 2022 .

Overview For the year ended December 31, 2023, fully diluted book value per share increased by $2.41, or 16.8%, to $16.74 per share and basic book value per share increased by $2.42, or 16.8%, to $16.87 per share since December 31, 2022 driven by strong underwriting performance.