Quarterly profit, but net underwriting loss for Greenlight Re

Greenlight Capital Re has reported net income of US$2.2 million for the third quarter of 2020, while large natural-catastrophe losses caused an underwriting loss.

The reinsurer saw a net underwriting loss of $0.4 million in the quarter, as natural catastrophes during the period, such as Hurricane Laura, the Midwest derecho storm and the North American wildfires, generated $8.1 million of losses, Greenlight said in a press release.

This contributed seven percentage points to the company’s combined ratio of 100.4%.

During the same period last year, the combined ratio was 98% with a net underwriting gain of $2.6 million.

Greenlight Capital Re reported quarterly net income of $2.2 million, or $0.06 per share, down from $5.1 million, or $0.14 per share, in the third quarter last year.

- Advertisement -

The fully diluted book value per share increased $0.22, or 1.9%, to $12.03, compared to $13.67 at the end of the same period in 2019.

Simon Burton, CEO, Greenlight Re

Simon Burton, chief executive officer of Greenlight Re, said it was another challenging quarter for the reinsurance industry with elevated levels of natural catastrophes and continued accumulation of pandemic-related exposure.

“Against this backdrop our overall combined ratio of 100.4% is a result driven by discipline in both risk and expense management,” he said. “Excluding the 7.0 percentage point impact of catastrophes, the underlying combined ratio reflects an underwriting business that is poised to generate significant value as market conditions improve,” Burton added.

Gross written premiums in the third quarter of 2020 were $135.6 million, compared to $110.6 million in the third quarter of 2019, mainly as a result of increases in workers’ compensation and specialty business, as well as health premiums.

Net written premiums increased 25.9% to $134.1 million year-on-year from $106.6 million. Net premiums earned of $115.5 million were down compared to $129.2 million in the third quarter 2019.

During the first three quarters of 2020, gross written premiums were $362.1, a decrease of 14.9% from $425.5 million reported in the comparable 2019 period.

Net premiums earned of $335 million during the first three quarters were down 10.7% year-on-year.

Greenlight Re’s total investment income during the quarter was $6.9 million.

The company’s investment portfolio, which is managed by DME Advisors, earned 1.4%, representing $6.4 million of investment income from the Solasglas fund.

David Einhorn, chairman of Greenlight’s board of directors, said, “We reported a 1.4% investment gain in the Solasglas fund during the third quarter, and believe our investment portfolio is well positioned for the current market uncertainty.”

He said, given the volatile financial markets. the company remains conservatively positioned.

During the first nine months of 2020, Greenlight Re incurred an investment loss of $22.8 million. This includes a loss of 6.5%, or $34.1 million, from the company’s investment in the Solasglas fund.

During the first three quarters of 2020 gross written premiums were $362.1, a decrease of 14.9% from $425.5 million reported in the comparable 2019 period.

Net premiums earned of $335 million during the first three quarters were down 10.7% year-on-year.

- Advertisement -

Support local journalism. Subscribe to the all-access pass for the Cayman Compass.

Subscribe now