David Einhorn - Chairman Bart Hedges - Chief Executive Officer Tim Courtis - Chief Financial Officer Jim McNichols - Chief Actuarial Officer.

Jason Efkeman - UBS.

Thank you for joining the Greenlight Re Conference Call for the Second Quarter 2015 Earnings. Joining us on the call this morning are David Einhorn, Chairman; Bart Hedges, Chief Executive Officer; Tim Courtis, Chief Financial Officer; and Jim McNichols, Chief Actuarial Officer. All participants will be in a listen-only mode.

[Operator Instructions] The company reminds you that forward-looking statements that may be made in this call are intended to be covered by the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are not statements of historical facts, but rather reflect the company's current expectations, estimates and predictions about future results and events and are subject to risks, uncertainties and assumptions, including those enumerated in the company's Form 10-K dated February 17, 2015, and other documents filed by the company with the SEC.

If one or more risks or uncertainties materialize or if the company's underlying assumptions prove to be incorrect, actual results may vary materially from what the company projects. The company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Please note this event is being recorded. I would now like to turn the conference over to Bart Hedges. Please go ahead, sir..

Good morning. Thank you for taking the time to join us today. In the second quarter of 2015, Greenlight Re generated loss on both, our underwriting and investment portfolios. Overall, our fully diluted adjusted book value per share decreased by 3.4% from the prior quarter-end.

During the second quarter of 2015, we reported an underwriting loss before general and administrative expenses of $8.9 million compared to underwriting income of $5.6 million during the second quarter of 2014, with the underwriting loss primarily due to adverse development on a 2010 contract in run-off, which I would discuss in detail.

During the quarter, we experienced a significant level of activity in on both, new and renewal business with renewals of our largest non-standard auto contracts and several Florida Homeowners relationships, and we wrote new business in long-tail casualty, workers’ compensation and small business owners’ property and general liability.

Our targeted business development efforts continue to pay off and we believe we have a very fertile pipeline. We took a reserve charge of $14.7 million during the quarter related to general liability business for one account written in 2010. This is the same contract that contributed to the reserve charge we incurred in the fourth quarter of 2014.

Majority of the losses have emanated from construction defect claims in the Western United States. During the quarter, we experienced adverse developments on known claims, which has caused us to reevaluate the expected value of known claims, as well as the value of claims still to be filed.

Additionally, we reevaluated the clients handling costs associated with this program. During the quarter, we increased our provision for case reserves, IBNR reserves and the cost of claims handling.

We believe we are at the peak of claims reporting and settlement activity on this program, and while we are disappointed with the adverse development in the quarter, we are comfortable with the claims handling and loss mitigation on the program, and we are comfortable with the total provision for the future cost based on the information currently available.

There were no significant property catastrophe events in the quarter, and thus, our catastrophe retro account continues to perform well. With respect to our property catastrophe aggregates, our maximum exposure to a single event is $202.3 million and our maximum exposure to all events is $268.5 million.

Increase in our catastrophe aggregate this quarter relates primarily to the addition of new business that is exposed to ancillary catastrophe exposure, such as winter storms, tornadoes and hail. Our North American property catastrophe exposure in the second quarter did not change materially from the first quarter.

As a reminder, we measure our aggregates as the maximum amount of limit available, less the amount of reinstatement premiums due. We do not use the model probable maximum loss or PML approach.

Although the market remains competitive in all areas, we had success during the quarter renewing our largest non-standard automobile quota share contract in terms of conditions similar to the expiring contract.

Our underlying rates for this account are rising and we're comfortable with this contracting being our largest relationship in terms of annual expected premium volume. Additionally, we renewed two Florida Homeowners Limited Wind quota shares and exited one relationship in this market.

On the two deals we renewed, the buyers opted for lower risk, lower expected profit contacts than the expiring deals. The underlying business has performed in line with our expectations, but the rates have become more competitive and all those sinkholes have decreased from prior years water damage claims have been costly for the insurers.

We've seen limited opportunities for growth in this area in the immediate future. We also renewed our largest long-tail casualty contract and a special casualty contract in terms that are in line with the expiring contracts.

Long-tail casualty contract is expected to grow as compared to the previous year, as a result of growth in the underlying portfolio. We wrote new business in the long-tail casualty portfolio, which includes medical professional liability exposure and excess general casualty exposure.

Although reinsurance pricing and terms of conditions for this business are competitive, we are satisfied with this growing segment of our portfolio because we are supporting highly rated established underwriters and believe that underlying pricing and loss cost trends are stable.

We also initiated new contracts with workers’ compensation exposure, general property and casualty exposure for small business owners and lawyers’ professional liability. Our customer-centric underwriting strategy, speed of execution and innovative ideas continue to differentiate us in a highly competitive environment.

While I'm disappointed with the provision for construction defect claims this quarter in our run-off book, I'm pleased with our overall progress and our current underwriting portfolio, and believe we are well positioned for the rest of the year.

Now, I'd like to turn the call over to our Chairman, David Einhorn, to discuss our investment performance and our progress with Greenlight Re’s overall strategy..

Thanks, Bart, and good morning, everyone. The Greenlight Re investment portfolio lost 1.5% in the second quarter, bringing the six-month return to minus 3.2%. Losses in Micron and CONSOL Energy cost us more than our gain in SunEdison, our one significant winner during the quarter.

The short portfolio was flat and macro positions were a slight detractor. Micron’s earnings and forward projections were affected by lower-than-expected computer DRAM demand, as well as manufacturing issues that arose when the company began migrating capacity from computer DRAM to mobile and other components.

The results surprised the market and led to lower forecast earnings and a lower stock price. Having reviewed our thesis, we continue to believe that the industry behavior is more rationale with three players and still expect current trough earnings to be higher than in the past and peak earnings to be higher in the future.

CONSOL Energy’s stock price suffered as coal prices fell 10% during the quarter. CONSOL recently completed an IPO of CNX Coal Resources, a master limited partnership of its coal business. We took advantage of the market’s tepid demand for coal assets and bought shares at a 25% discount to the proposed rate.

CONSOL has valuable coal and natural gas assets, a conservative balance sheet and a management team that is focused on creating shareholder value. We believe CONSOL’s assets are worth about twice its current stock price at prevailing commodity prices. A recovery in coal and gas would further enhance the value.

In the second quarter, SunEdison’s stock price continued to benefit from progress in its development business and ownership stake in TerraForm Power. The market also rewarded the company for the upcoming IPO of TerraForm Global, an emerging market yield co.

Unfortunately the IPO was met with tepid reaction last week and SunEdison gave up all of its second quarter gains in July. In the second quarter, we added a few new small positions, including Applied Materials and Bank of New York and exited a number of positions.

We ended the quarter with 21% net exposure and continue to maintain our conservative portfolio positioning. In the month of July, our portfolio lost 5.9%, our worst monthly performance since October 2008.

The losses were broad-based, with the biggest losses coming from SunEdison as I just mentioned; CONSOL Energy, which continued to suffer from poor industry sentiment; Gold, which had a rough month and a short Bubble Basket. The overall market environment has become acutely unfavorable for our investment strategy.

While we could have done better in a couple of spots, we don't expect to do well when investors shun value stocks in favor of momentum stocks. We've experienced this type of dynamic a few times before, and in each case, the short-term results have been painful for us. As before, we expect that the environment will improve and we will recover.

In the meantime, we’re actively managing the portfolio. In addition to looking for opportunities, we continue to scrutinize our current positions. During the challenging environment in July, we feel our current portfolio is quite attractive. Our underwriting results were disappointing in the quarter.

The problems are concentrated in business written in 2010 and earlier. The more recent underwriting years are performing well. Now, I’d like to turn the call over to, Tim, to discuss the financial results..

Thanks David. For the second quarter of 2015, Greenlight Re reported a net loss of $39.6 million, compared to net income of $109.6 million for the comparable period in 2014. The net loss per share was $1.06 for the second quarter of 2015, compared to a net income of $2.89 per fully diluted share for the same period in 2014.

For the six months ended June 30, 2015, we reported a net loss of $63.6 million, compared to net income of $100.7 million for the six months ended June 30, 2014. The net loss per share was $1.71 for the six months ended June 30, 2015, compared to net income of $2.66 per share on a fully diluted basis for the same period in 2014.

Premiums written were $222.7 million for the six months ended June 30, 2015, an increase of 46% from gross premiums written of $152.6 million during the comparable six-month period.

As Bart described, increases in premiums reported from our non-standard automobile seeding [ph], as well as increased specialty business represent the largest increases in premiums written.

Our net earned premium for the six months of 2015 decreased by approximately 6% to $186.5 million, when compared with premiums earned during the same period in 2014. While our net premiums written have increased during the year, the earning of this new predominantly quota share premium will be earned over the next 12 months.

The composite ratio for our frequency business for our frequency business for the first six months of 2015 was 106.3%, compared to a composite ratio of 98% during the comparable period in 2014. The reserve increase on a liability contracting run-off, as Bart described, accounted for an increase of 8.6 points on the frequency composite ratio.

For our severity business, our composite ratio was 61.3%. Overall our composite ratio for the first half of 2015 was 102.2%, compared to 93.9% for the comparable period in 2014.

Our total expense ratio, being the combination of internal expenses and corporate expenses was 7% for the first six months of 2015, compared to 5.9% during the comparable period in 2014.

Our internal expenses of $9.8 million for the first six months of 2015, where in line with our expectations and compares to $10.1 million incurred in the comparable period in 2014.

Our corporate expenses were $1.6 million higher during the first six months of 2015, due to certain non- reoccurring professional fees incurred related to strategic initiatives. The resulting combined ratio of 109.2% for the first six months of 2015 compares to a combined ratio of 99.8% for the same period in 2014.

We reported a net investment loss of $20.3 million during the second quarter of 2015, reflecting a net loss of 1.5% on the investment portfolio. For the first six months of 2015, we reported a net investment loss of $45.1 million, reflecting a net investment loss of 3.2%.

During the second quarter of this year and continuing into July, the company repurchased 500,000 Class A ordinary shares of the company's stock at an average price of $29.32 per share. We continue to monitor our share price and may make further repurchases if we believe an attractive purchasing opportunity persists.

The fully diluted adjusted book value per share as of June 30, 2015 was $29.07, a 4.6% decrease from $30.47 per share reported at June 30, 2014. I'll now turn the call back over to Bart to provide some concluding remarks..

Thanks Tim. Our goals remain unchanged. We aim to build long-term shareholder value by writing a concentrated underwriting portfolio with the best risk-adjusted returns we can find and to utilize the float generated from these contracts to invest in our value-oriented long short investment program.

This investment approach has historically generated superior returns with less volatility than the overall equity markets. We will continue to strive to execute on both our underwriting and investment strategy, and we will remain focused on driving our key yardstick increased fully diluted book value per share.

We appreciate your continued confidence in Greenlight Re. Thank you again for your time. And now we would like to open the call up for questions..

We will now begin the question-and-answer session. [Operator Instructions] At this time, we will pause momentarily to assemble our roster. Our first question comes from Jason Efkeman of UBS. Please go ahead..

Hi, good morning. Thank you. Just want to start off going back to the reserve development on the general liability contract.

Is this still - is it in California that you’re seeing the development?.

Good morning, Jason. This contract is predominantly California with some exposure also to Nevada and Colorado, as well as a few other states, but about 50% of the exposure is California..

Okay.

And given the long-term development usually on the construction defect litigation and the 10-year statutory repos in California, how confident are you that this is where the reserves need to be right now?.

Well, the 10-year statutory repos is factored in, in terms of our overall estimate of the number of claims we’re going to receive. We figure we're about halfway through, but we figure we're at a point where we’re near the peak, or either have approached the peak or close to approaching the peak.

So we feel pretty comfortable having monitored the numbers of claims that are coming in. The thing that caught us off guard I guess during the second quarter was development on the case reserves.

We saw some upward development in known case results, which forced us to re-estimate not only those case reserves, but the provision that we had up for future claims. Having dug into it, I think based on our reserving philosophy of coming up with the best estimate based on the information we have at the time, I feel very comfortable with the number..

Okay, great. And then it looks like you're seeing more opportunities in longer tail business.

Do you think that's result of industry consolidation where there are fewer payor or reinsurers available or just establishing relationships, or what's driving that increase in new business?.

Well, I think there is a little bit of both of those things. We have some seen some opportunities in the market were due to consolidation, the buyer has decided to reduce the line that was awarded to the two parties.

So they've made room on a few slips, but we really started this effort in the middle of last year looking at the business and then we recruited some people that do have relationships in the area, which has certainly helped a lot to get us a good look at the business.

And while it is a competitive area, we feel pretty comfortable with the small number of new relationships that we've developed here. So we're quite encouraged about it..

Great. Thank you very much..

[Operator Instructions] Showing no further questions, this concludes the question-and-answer session. Should you have any follow-up questions, please direct them to Garrett Edson of ICR at (203) 682-8331, and he will be happy to assist you.

We also remind you that a replay of this call and other pertinent information about Greenlight Re is available on our website at www.greenlightre.ky. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect..