Simon Burton - CEO David Einhorn - Chairman Tim Courtis - CFO Brendan Barry - Chief Underwriting Officer.

Bob Glasspiegel - Janney Montgomery Scott Brian Meredith - UBS.

Thank you for joining the Greenlight Re Conference Call for the Second Quarter 2017 Earnings. Joining us on the call this morning are David Einhorn, Chairman; Simon Burton, Chief Executive Officer; Tim Courtis, Chief Financial Officer; and Brendan Barry, Chief Underwriting Officer.

The company reminds you that forward-looking statements that may be made in this call are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are not statements of historical fact, but rather reflect the company's current expectations, estimates and predictions about future results and events and are subject to risks, uncertainties and assumptions, including those enumerated in the company's Form 10-K dated February 22, 2017, 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 Simon Burton. Please go ahead, sir..

Good morning. It's a pleasure to be joining you today on my first earnings call with Greenlight Re. Since I took over the position of CEO on July 1. The past month has flown by as I've been meeting with and getting to know the entire team in both Cayman and Ireland.

I'm impressed with the quality and dedication of the staff and it's clear that management has taken a full and deliberate approach to recruitment. Most surprising perhaps is that we have an enviable combination of mature processes and a small company culture that's a great fit for my vision of the dynamic and nimble company.

Over time, you will see some changes in our underwriting appetite and approach. Up until now, we have in large part relied on the small number of closed client relationships where we take a dominant position on their programs with a deep analytical dive in the underwriting process.

These relationships are important and they will continue to form the backbone of our portfolio wherever margins are adequate. However, I considerate of critical importance that we also enter the more transactional reinsurance subscription markets in London, Bermuda and the U.S.

where there are pockets of opportunity despite the difficult overall market conditions. This is important for two reasons. First, the overall pipelines that contain reasonable underwriting margin for a sufficiently captive and nimble company.

Second, it will start to raise our profile in these markets and ensure that we're positioned to see opportunities as they may arise, especially those that are short-lived.

By capital use of line sizes and as far as scrutiny of risk accumulations, we believe our entry into these subscription markets can be achieved without introducing undue levels of volatility while improving our underwriting profitability.

In the coming weeks, we'll provide the broken community with a clear indication of our appetite by class of business and the commitment to rapid response and service. Another theme I'd like to mention is the way I see the use of data emerging in our industry.

The combination of relentless expense pressure on the march of technology is driving transformational change. The baseline competency in data analytics is steadily increasing and holds this ignorance or don't invest wisely will struggle to compete.

Our ability to source data and generate inferences in ways that are not obvious will help us make better decisions. Our short to medium-term strategy will be to renovate in high-impacts and cost-effective ways. Tim will go into more details but here are the highlights.

During the first half of 2017, Greenlight Re generated a $4.6 million profit from underwriting, which is a competent ratio of 95.9% and a year-to-date combined ratio of 98.5%. We reported an investment loss for the first six months of the year, which David will discuss further.

Overall our fully diluted adjusted book value per share increased by 3.2% from the prior year end to $22.64. Now I'd like to turn the call over to our Chairman, David Einhorn, to discuss our investment results and the progress in Greenlight Re's overall strategy..

Thanks Simon and good morning, everyone. The Greenlight Re investment portfolio declined 3.4% in the second quarter. Our long book contributed seven tenths of a percent, while our shorts and macro detracted 2.5% and 1.3% respectively. Our short position Continental Resources was our biggest winner during the quarter.

The stocks climbed 29% in the quarter while 9%. Optimism for OpEx ability to maintain balance in the oil markets faded and the market question the profit potential properties the company had promoted last year. Bayer was our second biggest winner. The stock advanced 5% as the company beat first quarter estimate.

The acquisition of Monsanto will enhance Bayer's crop science unit and we believe the pro forma company stands to earn around €11 in 2018. Given the strength of each of Bayer's business units, we believe the market multiple or better is appropriate for the company.

Tesla in our bubble basket of shorts were the biggest attractors during the quarter; Tesla being at 30% despite posting a widening unexpected loss in bringing more than $600 million in the first quarter.

The company is expected to burn over $2 billion this year as it begins production of its model 3 and is currently only capitalized for the next three quarters. As Tesla attempt to achieve scale for the model 3 it will depend on the capital markets willingness to fund it.

Athenahealth rose 25% in quarter despite announcing disappointing first quarter results in April. After conceding in December the topline growth has slow 2017, the company further reduced its revenue growth and forecast in the stock to almost 20% the next day.

In May an activist investor announced a large stake in the company by the quarter of the quarter, the stock had rallied 43% of its lows. In anticipation, the company would ultimately be acquired. We think the high valuation combined with minimal free cash flow and decelerating revenue growth will deter any would-be buyers and we remain sure.

We added a small position in Toshiba during the quarter. Substantial write-downs in Toshiba's Westinghouse subsidiary caused the stock to collapse in late 2016. In March, Westinghouse filed for Chapter 11 in the United States and Toshiba began a process to sell majority stake in its memory business.

We believe Toshiba's assets are valuable and investors will refocus attention on the significant margin upside once the company has resolved these uncertainties. We exited a number of positions in the second quarter, including long positions in Altice, Liberty Global and Time Warner, each had a gain.

Thus, exited our short positions in credit rating agencies in Mount Keurig. The investment portfolio returned 1.8% in July. At month end, the investment portfolio was 107% long and 78% short. This is our first conference call with Simon at the helm and I am very pleased to see the mark he has already made on our company in one month.

I just returned from our Board Meeting and the energy and the level of collaboration within the team was palpable. We're excited for the many positive changes Simon and the staff will be making over the course of the next year. Now I'd like to turn the call to Tim to discuss financial results..

Thanks David. For the second quarter of 2017, Greenlight Re reported a net loss of $35.5 million compared to a net loss of $63 million for the comparable period in 2016. Net loss per share was $0.96 for the second quarter of 2017 compared to a net loss of $1.59 in the prior year period.

For the six months ended June 30, 2017, we reported net loss of $27.1 compared to a net loss of $34.3 million for the first six months of 2016. Net loss per share was $0.73 for the six-months ended June 30, 2017 compared to a net loss of $0.19 per share for the same period in 2016.

Gross premium written was $372.1 for the first six months of 2017, an increase of approximately 44% from $259 million during the same period in 2016, primarily due to increased growth in premiums received on our existing nonstandard auto contracts.

Additionally, written premium increased due to a new homeowners' property quota share contract that incepted during the fourth quarter of 2016 and a reduction on the prior-year comparative premiums written due to the return of unearned premiums on homeowners property business that we exited in the second quarter of 2016.

Our net earned premiums for the first six months of 2017 increased by approximately 18% to $312.2 million from the prior-year period, primarily due to our higher premium writings, which will earn over the next several accounting periods.

Composite ratio for the first six months of 2017 was 95.9%, which given our current mix of business is in line with our expectations. Total, general and administrative expenses incurred during the first half of 2017 increased to $13.1 million compared to $12 million incurred during the prior year period.

Underwriting expenses of $8.2 million for the first six months of 2017 were in line with our expectations and compared to $8 million incurred in 2016. This gives rise to an underwriting expense ratio for the first six months of 2017 of 2.6% and a combined ratio of 98.5%.

It is worth noting that for the past four quarters since we obeyed certain legacy contracts, our combined ratio over that 12-month period is 98.8%.

Our corporate expenses of $4.9 for the first six months of 2017 compared to $4 million reported during the same period in 2016 was an increase attributed to slightly higher legal and professional fees incurred in the current period.

We reported a net investment loss of $39.1 million during the second quarter of 2017 reflecting a net loss of 3.4% on our investment portfolio. For the first six months of 2017, we reported a net loss of $27.5 million reflecting a net investment loss of 2.5%.

During the second quarter of this year and continuing into July, the company repurchased just over 136,000 Class A ordinary shares of the company's stock at an average price of $20.56 per share. We continue to monitor our share price and may make further repurchases if we believe an attractive purchasing opportunity persists.

Fully diluted adjusted book value per share as of June 30, 2017 was $22.64, a 6.8% increase from $21.20 per share reported at June 30, 2016. I'll now turn the call back to Simon for some concluding remarks..

Thanks Tim. I am delighted to report that our most recent Board of Directors Meeting reelected Hope to join the Board. Hope's professional resume speaks for itself on her extensive financial background and experience in leading teams and broad Board experience is a welcome addition to our team. I told that Greenlight Re remains unchanged.

We will continue to execute a dual ending strategy and firmly believe that those underwriting and investing activities and attractively drive the stick increasing 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 to questions..

We'll now begin the question-and-answer session. [Operator instructions] The first question comes from Bob Glasspiegel with Janney. Please go ahead..

Good morning, Greenlight. Simon, I've got a few questions for you. First of all, welcome back to the investment world and the reinsurance world. Look forward to working with you. You gave a very good outline of your plans.

Is that going to involves an increase in the expense ratio to get the technology and the distribution relationships that you want or does it increase volume to offset that?.

Hey Bob. Thank you. So, as I said, the focus will be on the high impacts, cost effective start. You can -- there are pitfalls with technology and there is a danger of falling into a morass of developments, hell, let's face it.

Of course, there will be an incremental uptick as we invest in some tools and technology along the way, but I see that easily outweighed by the quality of business improvements and the boarder pipeline of business that we expect to see as a result..

Are you going to need to hire people that have these brokerage relationships to hit these markets or you think you got the right sort of infrastructure in place?.

Yeah, so Greenlight Re is a relatively small company. We have about 40 employees and it's one of the elements of the firm that attracted me so much of the role. We're deeply protective of that.

Having said that, clearly as we expand our pipeline, our interest into other areas, we identify one or two spaces, skill gaps where we want to bring in some real differential expertise. I don't expect that will be that material. Essential increase, additional hires of low single-digits, but that's my guess at this point Bob..

Okay. Appreciate that.

Tim, if I could ask you a question, the auto tick up in the quarter, little bit of color on the types of relationships -- those are mainly existing relationships, it looks like -- is that going to be a quarterly rate that continues or reserves a one-time element in the written premium growth?.

I am going to punch that one to Brendan. So, if he can talk about the underwriting relationship there..

Yeah hi Bob. Obviously, we've talked about the auto space before and most of this is being driven predominantly by tightening conditions in the U.S. auto space. The majority of the pick-up for us is being through existing client space.

That's not to say that we would rule out continued opportunities with new clients in the near-term, but most of it is coming through existing client bases and should be seeing in May, predominantly one-off benefits from relying reinsurance contracts..

So, will that quarterly….

Bob, I need to clarify on the accounting, sorry Bob, but just to clarify on the accounting right, obviously these are quota share contracts. So, we are writing and accruing what is being reported to us by the clients. As they grow or contract or enter in markets, our premiums will react to that.

But what you're seeing in the current quarter, there will an element of that continuing throughout the rest of the year..

Okay. That's helpful. Thank you. And David just one for you, on your value bet that you're making, do you think you needed a rise in interest rates to make the value versus growth correction that you're looking for take place or historically when value does outperform growth, there is a rise in interest rates perhaps associated with it.

Is that necessary?.

Yeah, the answer is I don't really know. Historically over long periods of time, value outperforms growth. For the last number of years, that mostly has not been the case and the result has a headwind from growth outperforming values has clearly had an impact on our results over the last few years.

I like the composition of the portfolio and I would like to see a little of some of this headwind go away, but I have no control over when that might be and I'm hopeful that we can achieve a decent result even if the environment is difficult..

Are you agnostic in interest rates or do you have a view?.

I don't think I have a strong view, no. Not at the moment..

Okay. Thank you..

[Operator instructions] Our next question comes from Brian Meredith with UBS. Please go ahead..

Yes thanks. A couple questions here for you Simon and welcome. The first one, I am just curious, Simon, what are your thoughts about the current domicile Greenlight in Cayman versus let's call it a Bermuda.

Do you think there is any competitive edge or you disadvantaged being in Cayman versus Bermuda?.

Hey Brian, it's a good question. Obviously, I've spend most of my career in Bermuda. I like it. There is a marketplace there that it quite vibrant. Let's face it, Bermuda is not as low cost an environment to operate in as it once was.

In many ways, Cayman is must cheaper place to do business and expenses and value in the chain are an increasing theme in everything we do. So that is no longer immaterial. Having said that Brian, I think Bermuda will continue to be a very important marketplace for us.

We have been and will continue to be very active there and we'll be looking carefully about how we best leverage our Bermuda relationships..

Great. And then I'm just curious Simon entering the subscription market right now, I was just curious what are your thoughts particularly given that it's an incredibly competitive reinsurance market right now. Lots of excess capital.

What does Greenlight bring to the table where you can get on attractive programs right now given the competition in the marketplace right now?.

Again, good question. It is very competitive. We've seen some consolidation. We've seen increase in average length sizes and participation programs. I think the margins that can create some opportunity for a firm like ours don't aspire to be dominant or controlling programs.

We also have a large number of relationships internally, not only my own, but across the entire staff here that are probably some more underleveraged. I feel confident that we can generate some pipeline of opportunity that's relatively high quality compared to the market. Now you're right, margins are compressed.

It's a tough environment, but at the same time, we are quite small. We're very nimble. We're agile.

We don't have to be in every class at all times, which is somewhat differential to many of our peers who have established large teams of underwriting, underwriters in most classes of business and candidly need to keep that pipeline ticking over as to feed their engine.

We don't have that rod for our bank and I think that's one of our advantages Brian. In terms of client facing value proposition, we're nimble. We can make decisions quickly.

We're a flat structure, both myself, Brendan, the entire underwriting team deeply focused on the underwriting pipeline and decision-making day-to-day and we can deliver a high-level of service to clients. I am very confident about..

Great. Thanks.

And then just one last question here, just curious with the personal property on quota share, if that's got forward exposure and just your thoughts right now on the whole assignment of benefits situation down in Florida?.

Sure, I'll ask Brendan to chime in on that..

Yeah hi Brian. As you know, we've reduced our, steadily reduced our position in Florida over the last number of years and we saw early signs of the AOB issues starting to materialize. Our view on Florida as a whole has not changed.

We reentered with one single client, does have Florida exposure due to their more broad-based exposure base across the U.S. and how they recognize and dealt with the AOB issues very early in the process and we're very impressed with that and decided to reenter with them alone.

Overall, we're still very concerned about the AOB issue, not just the issue itself and how some people have handled it, but more specifically I would say how the political situation has dealt with that in Florida and what that may lead to us whatever the next AOB issue might be or AOB -like issue. So, for now we're very cautious on Florida.

One client with Florida exposure we think has done that a very good job and has grown its exposure way from its Florida starting point..

Great. Thanks for the answers..

[Operator instructions] Should you have any follow-up questions, please direct them to Garrett Edson of ICR at (203) 682-8331 and he'll 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. This conference has now concluded.

Thank you for attending today's presentation. You may now disconnect..