Hedge fund-backed reinsurer Greenlight Re has reported a net loss for the first quarter of 2022, as its investment income was offset by an underwriting loss driven by exposure to the conflict between Russia and Ukraine.
The company booked a net loss of $5.7 million last quarter, compared to net income of $6.5 million for the same period last year.
Investment income fell from $18.7 million to $7.7 million during this time, and Greenlight Re’s underwriting loss also widened from $2.0 million to $7.7 million.
Accordingly, the reinsurer’s combined ratio deteriorated from 101.5% to 106.2%.
Greenlight Re explained that its underwriting loss was driven primarily by the Russian-Ukrainian conflict, and to a lesser degree, by wildfires in Tennessee.
The Russian-Ukrainian conflict contributed $13.6 million, or 10.8%, to the combined ratio.
During the comparable 2021 period, the Greenlight Re incurred an underwriting loss of $2.0 million, primarily due to losses from Winter Storm Uri.
Gross premiums written by Greenlight Re in the first quarter of 2022 were $145.9 million, compared to $169.9 million in the first quarter of 2021.
This decrease was mainly motor and workers’ compensation contracts on which the company opted to reduce or non-renew its participation, and was partially offset by growth in specialty, general liability, and multiline business.
“Our first quarter results were impacted by exposure to the Russian-Ukrainian conflict from our growing short-tailed specialty book that is otherwise well-positioned in the improving underwriting environment,” noted Simon Burton, Chief Executive Officer of Greenlight Re.
David Einhorn, Chairman of the Board of Directors, also commented: “We generated a 1.7% investment return from the Solasglas fund in the first quarter and are well-positioned for the inflationary headwinds affecting the economy.”
“We are maintaining a cautious view to the equity markets, as it appears likely that the 13 year-old bull market has come to an end.”
