Greenlight Re partners with Kattan Associates

Cayman-based property and casualty reinsurer Greenlight Re is expanding in Europe and Asia through a partnership with Kattan Associates in Dublin.

Greenlight Re seeks to improve its underwriting with the agreement that will see Kattan Associates develop business opportunities in the European and Asian markets on behalf of Greenlight Re and its subsidiary companies.

“This is an important step for Greenlight Re Ireland as we continue to expand our global footprint and further diversify our underwriting portfolio,” said Brendan Barry, chief underwriting officer of Greenlight Re.

“We believe that the extensive experience and relationships that Kattan Associates brings to the insurance industry will provide an excellent network for Greenlight Re to access attractive business.”

The reinsurer has been struggling to find profitable insurance underwriting opportunities and has posted losses in five of the last six quarters. In the second quarter of 2016, Greenlight Re reported a net loss of $63 million, compared to a net loss of $39.6 million for the same period in 2015.

The net underwriting loss in the quarter increased to $24.5 million from $13.3 million during the same period a year earlier.

Greenlight Re CEO Bart Hedges said in August that the overall underwriting performance has been affected by a handful of poorly performing contracts, but the rest of the underwriting portfolio behaved in line with expectations.

To reverse underwriting losses, the reinsurer is exiting construction-defect coverage and commercial vehicle policies and is pushing into the mortgage-guaranty market.

Greenlight Re purchased reinsurance coverage that transfers the construction-defect liabilities to a third party. Transferring these liabilities to a specialist to manage the run-off will allow Greenlight Re to focus its attention on the current book of profitable business, the company said.

The loss portfolio transfer accounted for $19 million of the quarter’s underwriting loss and another $4.4 million loss related to Canadian wildfires.

“After several years of adverse development, we took aggressive action to put our poorly performing construction-defect contracts behind us. Combined with the maturation of our run-off commercial automobile book, where 99.5 percent of all claims have now been resolved, our exit from construction-defect business leaves us without significant exposure to poorly performing lines for the first time in several years,” Mr. Hedges said.

The partnership with Kattan Associates is an attempt to further improve the underwriting portfolio.

Habib Kattan, owner/director of Kattan Associates, said, “I am delighted that Greenlight Re has become a client of Kattan Associates and I look forward to generating profitable underwriting opportunities to expand its client base and underwriting portfolio in Europe and Asia.

“Our relationship combines the skilled underwriting and execution of Greenlight Re with the deep client knowledge and relationships of Kattan Associates,” he added.

Before forming Kattan Associates Ltd., Mr. Kattan was the group head of Ceded Reinsurance and Credit Control at Tokio Marine Kiln, a London market insurance and reinsurance company.