During Greenlight Re’s 2023 earnings call, Patrick O’Brien, Chief Executive Officer (CEO), Director, Greenlight Re Ireland, noted the still very attractive conditions at the January 1st, 2024, reinsurance renewals, when over 60% of the company’s business incepts.
“We are very pleased with how January 1, 2024, progressed. Market conditions remain very attractive, and we took advantage of those conditions to grow our business in key segments,” said O’Brien.
Generally, Greenlight Re’s Funds at Lloyd’s book of business incepts on January 1st, and the company has been a material player in this market for a few years now.
After several years of material rate increases in the Lloyd’s marketplace, Greenlight Re is “optimistic for the prospects of Lloyd’s in 2024,” said O’Brien.
“This year, we found an increase in the volume of capital interested in the Funds at Lloyd’s market. But we leveraged our deep and ongoing relationships to continue supporting the Lloyd’s syndicates where we see attractive opportunities,” he added.
A material element of the reinsurer’s specialty book was also renewed on January 1.
“In general, the specialty market maintained pricing discipline with rates up low-single-digits, but it was very competitive in signings, as many of our competitors wanted to grow in this space. We anticipated this trend, and as a result, we offered lines early on target accounts. This strategy worked well,” he said.
Given market conditions, Greenlight Re grew its specialty book significantly at 1/1, confirmed O’Brien, through a combination of increased signings and some new account wins.
The third part of Greenlight Re’s Jan 1 focus is property, and O’Brien explained that there was evidence of some weakening in this space with more capacity entering the market, which enabled some modest softening in ceding commissions and profit commissions over the 1/1 2023 renewals.
“Despite this, the market remains very attractive, and we grew this portfolio meaningfully over 2023 through a combination of new clients and improved signings,” continued O’Brien.
Reflecting this increase in volume, the firm’s North Atlantic hurricane exposure on a 1-in-250 occurrence basis increased by 11% to $89.7 million, although relative to the firm’s surplus, the 1-in-250 exposure decreased marginally.
O’Brien revealed that the reinsurer decided to non-renew one large homeowners account that had caused some pain in 2023 with the heavy convective storm season, a move which improves the overall balance of the portfolio.
“In total, we estimate our overall premium volume to be slightly up year-on-year despite the non-renewal of the homeowners account, and our overall portfolio is now better balanced with increased margin potential,” said O’Brien.
“We are enthusiastic about the positioning of our portfolio for 2024. We are seeing indications that we are likely close to the peak of the hard market, and we are focused on taking full advantage of the current market opportunity. 2024 is off to a strong start,” he added.
