AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit ratings (Long-Term ICR) of “a-” (Excellent) of Greenlight Reinsurance, Ltd. (Cayman Islands) and Greenlight Reinsurance Ireland, Designated Activity Company (Ireland).
In addition, the rating agency affirmed the long-term issuer rating of “bbb-” (Good) of Greenlight Capital Re, Ltd. (Cayman Islands), the ultimate holding company, according to a press release.
The outlook of these ratings is stable.
AM Best said the ratings reflect Greenlight Capital Re’s (GLRE) “very strong” balance sheet, supported by high risk-adjusted capitalisation, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management.
The company’s consolidated surplus increased in 2021, reversing the previous trend of decline.
AM Best said it views GLRE’s operating performance as marginal, given its historically volatile investment returns and marginal underwriting performance.
However, the group’s 2021 combined ratio, inclusive of corporate expenses, improved to 101.9% – the lowest result over the past five years, based on AM Best’s calculations – and compared favourably with similarly assessed companies in the reinsurance composite.
Investment returns since 2019 have also been accretive to results.
The rating agency views GLRE’s business profile as neutral.
The company was incorporated in the Cayman Islands in 2004 and is one of the longest-tenured total return reinsurers. Through its operating subsidiaries, GLRE provides property/casualty reinsurance on a global scale.
AM Best noted the company has taken steps to diversify its platform, including through significant investments in its innovation-related operations, such as the 2022 launch of the Greenlight Re Innovations Syndicate 3456 at Lloyd’s.
Additionally, GLRE’s enterprise risk management is deemed appropriate for the company’s business complexity and overall risk profile.
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