AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) for Greenlight Reinsurance, Ltd. (Cayman Islands) and Greenlight Reinsurance Ireland, Designated Activity Company (Ireland).
Additionally, the Long-Term ICR of “bbb” (Good) for Greenlight Capital Re, Ltd. (Cayman Islands) (GLRE), the ultimate holding company, has also been affirmed. The outlook for these Credit Ratings is deemed stable.
AM Best’s ratings reflect GLRE’s robust balance sheet strength, which has been assessed as very strong.
The company’s risk-adjusted capitalisation, measured by Best’s Capital Adequacy Ratio (BCAR), stands at the highest level, underpinning its financial stability.
Notably, GLRE’s consolidated surplus has demonstrated positive growth throughout 2023, following a period of decline, and AM Best expects the group to maintain its current risk-adjusted capital levels.
While GLRE’s operating performance has historically been volatile, AM Best considers it as marginal. However, there are positive indicators in this regard, including a 2022 combined ratio below the five-year average and consecutive years of improving returns on equity and revenue.
Investment returns since 2019 have also contributed positively to results. Although the company’s operating performance metrics show positive trends, it has not yet achieved a full year of underwriting profitability.
In terms of business profile, AM Best views GLRE as having a neutral position. Established in the Cayman Islands in 2004, the company is one of the longest-tenured total return reinsurers globally, offering property/casualty reinsurance services.
GLRE has taken steps to diversify its operations, including investments in innovation-related initiatives and the 2022 launch of the Greenlight Re Innovations Syndicate 3456 at Lloyd’s.
Moreover, the company’s Enterprise Risk Management (ERM) practices are considered appropriate for its business complexity and overall risk profile.
