Greenlight Re profits halve in 'challenging' Q3 as cat losses bite
Specialist property/casualty reinsurer Greenlight Capital Re's profits less than halved in the third quarter of 2020 due to high natural perils and accumulation of COVID-19-related exposure, causing an underwriting loss and deterioration of combined ratio.
The Cayman Islands-based reinsurer reported a net profit of $2.2 million in Q3, compared with net profit of $5.1 million in the prior-year period.
Greenlight Re’s gross written premiums during the period were $135.6 million, up from $110.6 million in the third quarter of 2019.
Its combined ratio came in at 100.4 percent, with natural catastrophe losses of $8.1 million contributing 7.0 percentage points, primarily from Hurricane Laura, the Midwest derecho storm and the North American wildfires. The combined ratio for the third quarter of 2019 was 98 percent.
The Hedge fund-backed reinsurer incurred a net underwriting loss of $0.4 million in Q3, compared with a net underwriting gain of $2.6 million in the same period of 2019.
For the first nine months of 2020, the company's gross written premiums decreased 14.9 percent to $362.1 million from $425.5 million reported in the 2019 period. The combined ratio for the first nine months was 100.1 percent, compared with 104.7 percent for the comparable 2019 period.
Simon Burton, chief executive officer of Greenlight Re, said: “This was yet 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. 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.”
David Einhorn, chairman of the board of directors, added: “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. We are cognizant that the financial markets remain volatile and as such we continue to be conservatively positioned.”
