Greenlight Re Q4 loss driven by reserving, investments
Cayman Islands-based Greenlight Re reported a loss for the fourth quarter of 2017, driven primarily by reserve strengthening and an investment loss.
The specialist property and casualty reinsurer reported a net loss of $37.7 million for the fourth quarter of 2017, compared to net income of $49.2 million for the same period in 2016.
“Our fourth quarter results were negatively impacted by reserve strengthening, an investment loss and, to a lesser extent, losses from the California wildfires,” said CEO Simon Burton. “The reserving action taken this quarter is the result of a detailed ground-up review led by our chief operating officer, Mike Belfatti, during his first full quarter with the company. Our current underwriting portfolio performed acceptably well in the quarter and I’m pleased with our progress in repositioning the business.”
The company strengthened prior year reserves by $16.5 million during the fourth quarter primarily from additional reporting on individual claims as well as industry wide performance on professional liability exposures and to a lesser extent due to higher reserves on various casualty and multi-line contracts.
In the full year 2017, net loss was $45.0 million, compared to net income of $44.9 million in 2016. Gross written premiums grew 29.2 percent year on year to $692.7 million in 2017. The combined ratio deteriorated to 108.6 percent in 2017 from 103.6 percent in 2016. Net investment income fell to $20.2 million from $76.2 million over the period.
“2017 continued to be a challenging environment for our investment style as our managed portfolio returned 1.5 percent for the year,” said David Einhorn, chairman of the board of directors. “Despite the headwinds caused by natural catastrophic events and reserve strengthening, I am pleased with the proactive actions taken by our management team during the second half of 2017.”
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