Cayman Islands-based reinsurer Greenlight Re saw profits rise in the second quarter of 2014 but its premiums took a dive as it pulled back from business it felt was not profitable enough against a backdrop of tough market conditions.
The reinsurer’s net income hit $109.6 million for the second quarter of 2014, compared with a net income of $28.5 million for the same period in 2013.
However, its gross written premiums slumped to $33.7 million, a 75 percent decrease compared to $135.2 million in the second quarter of 2013. Its net earned premiums also fell to $87.9 million, a decrease from $133 million reported in the prior-year period.
Its underwriting income fell to $5.6 million in the quarter, compared to $11.7 million in the second quarter of 2013. The company’s combined ratio deteriorated to 100.7 percent in the quarter, compared to 98.3 percent for the prior year period.
"We are pleased with the overall performance of the company during the second quarter," said Bart Hedges, chief executive officer of Greenlight Re. "Our written and earned premiums decreased significantly compared to the prior year period. The decrease is mainly attributable to our decision, at the end of 2013, to exit some business that no longer met our return hurdles, as well as reduced shares, in 2014, on renewal transactions with clients that decided to retain more of their business.
“The competitive market conditions are making it challenging to find new business that meets our return hurdles, but we have a pipeline of attractive opportunities that we hope to underwrite over the intermediate term."
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Greenlight Re, Caribbean, Second Quarter 2014 Results, Bart Hedges