Hedge fund-backed reinsurer Greenlight Re has reported a net loss of $0.1 million in the second quarter of 2020, compared to net income of $15.3 million in the second quarter of 2019.
Gross written premiums in the second quarter of 2020 were $116.7 million, compared to $152.3 million in the second quarter of 2019.
This decrease was largely due to the Company’s decision not to renew certain auto business, partially offset by additional new business written in several specialty lines.
Net written premiums decreased 9.8% to $116.6 million in the second quarter of 2020, compared to $129.2 million reported in the second quarter of 2019.
The Company recognized ceded premiums of $0.1 million during the second quarter of 2020, compared to $23.1 million in the second quarter of 2019.
This decrease in ceded premiums was due primarily to the non-renewal of retrocessional coverage on auto business.
Simon Burton, Chief Executive Officer of Greenlight Re, stated, “We have been pleased with our stability and performance in light of the impact of the COVID-19 pandemic on the reinsurance industry and the global economy.
“Additionally, our repurchases of common stock enabled us to deliver solid growth in book value per share during the quarter. Looking ahead to the rest of 2020 and into 2021, we are well positioned to take advantage of broad pricing increases that we are seeing across multiple lines of business.”
David Einhorn, Chairman of the Board of Directors, stated, “We reported a small investment gain during the second quarter, and believe our investment portfolio is well positioned for the current market uncertainty. We are cognizant that the financial markets remain volatile and as such we continue to be conservatively positioned.”
The Company incurred a net underwriting loss of $1.3 million in the second quarter of 2020, compared to a net underwriting gain of $1.5 million in the second quarter of 2019.
The net financial impact of the COVID-19 pandemic during the second quarter of 2020 was a $6.0 million loss.
COVID-19 losses contributed 5.5 percentage points to the combined ratio resulting in a combined ratio for the second quarter of 2020 of 101.2%.
Excluding COVID-19 losses, the underlying book of business reported a combined ratio of 95.7% for the quarter. The combined ratio for the second quarter of 2019 was 98.8%.
Greenlight Re’s total investment income during the second quarter of 2020 was $5.5 million.
The Company’s Investment Portfolio, which is managed by DME Advisors, earned 0.3%, representing $1.6 million of investment income from the Solasglas fund. Other investment income of $3.9 million included net unrealized gains of $3.3 million relating to our portfolio of innovation investments.
