Hedge fund-backed reinsurer Greenlight Re has reported improved income over 2021, despite incurring a dip in the fourth quarter of the year, and is now seeing investment conditions better aligned with its strategy, the company says.
Greenlight Re recorded net income of $24.3 million and $17.6 million for the Q4 and full-year periods, respectively, compared with $42.0 million and $3.9 million for the same periods in the previous year.
The company recognized net underwriting income of $4.8 million in Q4 of 2021, compared to an underwriting loss of $1.1 million in the comparable 2020 period, helped by favorable prior-year loss development in the fourth quarter of 2021, with a net financial impact of $11.5 million, which reduced the combined ratio by 8.5 percentage points to 96.4%.
Looking at the full year, Greenlight Re incurred an underwriting loss of $5.2 million, corresponding to a combined ratio of 100.9%, as results were impacted by Hurricane Ida, winter storm Uri, European floods and hailstorms, U.S. tornados, and South African riots, which together contributed $32.7 million of losses, or 6.1 percentage points to the combined ratio.
Gross premiums written in the fourth quarter increased from $117.7 million to $125.1 million, thanks to growth in the Lloyd’s and financial lines businesses, while premiums for the year increased 17.8% to $565.4 million, driven by an increase in Lloyd’s multiline quota share contracts.
Investment income was $25.3 million for Q4 and $50.2 million for 2021, up from $25.5 million in the previous year, witht the increase due primarily to gains recognized in connection with Greenlight Re’s strategic investments.
“Our fourth quarter 2021 performance was strong, with gains posted from each of underwriting, Solasglas and Innovations investments, producing an increase in book value per share of 5.6%,” said Greenlight Re CEO, Simon Burton.
David Einhorn, Chairman of the Board of Directors, added: “We are pleased with our strong underwriting and investment results in the quarter. After facing strong headwinds for a number of years, we now believe the investment environment has turned favorable for our strategy.”
