Hedge fund backed reinsurer Greenlight Capital Re, Ltd. (Greenlight Re) is looking into the establishment of a Lloyd’s of London Syndicate as it expands its business strategy and enters the specialty market.
Speaking during the company’s fourth-quarter 2017 earnings call, Chief Executive Officer (CEO), Simon Burton discussed continued portfolio repositioning at the firm, highlighting its entry into new specialty lines at the January 1st, 2018 renewals, most notably marine, energy, and space.
The CEO of the hedge fund reinsurer explained that its entry into the specialty market was aided by the high level of 2017 catastrophe events, which resulted in other companies adjusting their portfolios, ultimately enabling Greenlight Re to be “fairly selective” in its approach.
At the same time, Burton said that the firm’s entry into the specialty arena was “pretty modest in dollar terms,” and underlined its desire to raise its profile in those markets.
Given the firm’s entry into specialty lines at the January renewals, which Burton explained sees Greenlight Re act as a follower with relatively smaller shares in syndicated, primarily London market classes of business, an analyst questioned whether the firm would consider launching a Lloyd’s Syndicate.
Burton said that “it has only been discussed,” adding that the establishment of a Lloyd’s of London Syndicate “is one of the long list of strategic directions” that the company might consider moving forward.
2017 was a challenging year for Greenlight Re and the hedge fund-style reinsurance business model, as challenging underwriting conditions combined with the poor investment environment.