Greenlight Re Q2 2019 results suggests turnaround has begun
Reinsurer Greenlight Re CEO Simon Burton, said “conditions are improving in multiple lines of business” as the firm reported gross written premiums (GWP) and net income increases in its 2019 second quarter results.
The firm also confirmed it had engaged Credit Suisse to assist in its ongoing strategic review after it the reinsurer saw its financial strength rating of A- revised from ‘stable’ to ‘negative’ by ratings firm AM Best in June 2019 as a result of concerns over its negative underwriting performance.
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In the second quarter of this year, the reinsurer reported GWP of $152.3 million up from $142.1 million in the same three months in 2018. Greenlight Re said a new workers compensation program along with smaller new programs that had offset lower premiums from certain financial and auto accounts were the “most significant items” that made up the $10.2 million increase.
Net income for Q2 2019 was also improved reaching $15.3 million for the second quarter of 2019, compared to a net loss of $37.4 million for the same period a year earlier.
The combined ratio for the quarter had not improved, instead it increased to 98.8 percent compared to 96 percent for the prior-year period.
However, total net investment income was $18.8 million in Q2 2019 comparing favourably to a net investment loss of $40.7 million in the second quarter of 2018.
And net written premiums were $129.2 million, compared to $114.9 million reported in the prior-year period.
Simon Burton, Greenlight Re chief executive, said: “We increased fully diluted book value per share by 3.2 percent in the quarter, with a positive contribution from underwriting and strong investment performance. Conditions are improving in multiple lines of business and our diversified underwriting platform is well-positioned to participate in the emerging opportunities.”
On May 31 the company announced it planned to partially de-risk its investment portfolio and begin a strategic review led by its board of directors. The board has now engaged Credit Suisse to assist in the review.
Following AM Best’s revision of the reinsurer’s financial strength rating of A- from ‘stable’ to ‘negative’, the company announced
David Einhorn, chairman of the board, said: “We were pleased to see our investment portfolio perform well throughout the second quarter as Solasglas posted a positive return of 2.7 percent, net of all fees and expenses for the quarter and 9.1 percent for the first half of the year.”
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