Greenlight Re reports 2Q results

Greenlight Capital Re, the Cayman
Islands-based specialist property and casualty reinsurer, last week reported a
net profit of $17.7 million for the second quarter of 2010, compared to net
income of $92.2 million for the same period in 2009. Correspondingly, the fully
diluted quarterly earnings per share were down at $0.47 compared to $2.51 a
year earlier.

On a half-yearly basis net income
was $5.3 million during the first six months of 2010, down from $120 million
during the first half of 2009.

“We are pleased with the discipline
and focus our underwriting team has shown in a challenging pricing environment
in the second quarter,” said David Einhorn, chairman of Greenlight Re’s board
of directors.

Gross written premiums of $89
million in the second quarter of 2010 were higher than in the second quarter of
2009 ($70.0 million), while second quarter net earned premiums of $49.4 million
were virtually unchanged from a year earlier. However, the combined ratio for
the six months ended 30 June 2010 increased to 99.6 per cent from 96.7 per cent
for the first six months of 2009.

“Our conservative investment
portfolio generated a small profit during a quarter when the major equity
indices were down significantly,” Mr. Einhorn added.

Net investment income in the second
quarter reached $22.6 million, representing a return of 2.6 per cent on the
investment portfolio. This compares to $88.3 million in the second quarter of
2009, when Greenlight Re reported a 13.9 per cent return on our investment
portfolio.

“At this point in the market cycle,
we are focused not only on where to grow the book, but also on where to reduce
or discontinue our underwriting,” said Len Goldberg, Chief Executive Officer of
Greenlight Re. “We increased our loss estimates on a small number of discontinued
contracts in the quarter, while our growth comes from the business lines where
we are focused, and which continue to perform well. This bodes well for our
strategy and the quality of our underwriting portfolio.”

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