Investments make Greenlight Re swing to Q1 loss

Hedge fund-backed Greenlight Capital Re reported a loss for the first quarter of 2018 driven by investments.

Cayman Islands-based Greenlight Re reported a net loss of $142.8 million for the first quarter of 2018, compared to net income of $8.4 million for the same period in 2017. The reinsurer was impacted by  net investment losses of $145.2 million compared to net investment income of $11.6 million in the first quarter of 2017.

Greenlight Re’s investments are managed by David Einhorn's Greenlight Capital hedge fund. The funds are invested with an emphasis on deriving “superior returns from both sides of the balance sheet” while assets are managed according to a “value-oriented equity-focused strategy”.

“The investment loss this quarter overshadowed our improved underwriting performance and a quarter combined ratio of 98.3 percent,” said Greenlight Re CEO Simon Burton. “Our reserve position showed favourable prior year reserve development and the ongoing business is performing well under difficult market conditions,” Burton added.

Overall, Greenlight Re reported underwriting income of $2.5 million, compared to an underwriting loss of $0.2 million in the first quarter of 2017.

David Einhorn, chairman of the board of directors, said: “I am pleased to see that the steps management has taken in our underwriting business are beginning to materialize in a positive manner. We experienced a difficult quarter in our investment portfolio, reporting a loss of 11.8 percent. Notwithstanding the quarterly loss, we remain confident that our disciplined, value-oriented style and patience will be rewarded.”

Greenlight Re’s gross written premiums declined to $175.1 million in the first quarter of 2017 from $197.2 million in the first quarter of 2017.

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