Hedge fund-backed reinsurer Greenlight Re has reported a positive net income of $2.2 million for the third quarter of 2020, but large natural catastrophe losses and pandemic exposure resulted in an underwriting loss.
The income figure is smaller than the $5.1 million that Greenlight Re posted in Q3 2019, but the company has recorded an overall loss for the three quarterly periods since then (Q4, Q1, Q2).
Results in Q3 2020 were impacted by a net underwriting loss of $0.4 million, compared to a net underwriting gain of $2.6 million in the same period last year.
Natural catastrophes generated $8.1 million of losses, primarily from Hurricane Laura, the Midwest derecho storm and the North American wildfires.
This caused Greenlight Re to post a combined ratio of 100.4%, with natural catastrophe losses contributing 7.0 percentage points to this figure. For comparison, the Q3 2019 combined ratio was 98.0%.
Gross written premiums last quarter were $135.6 million, compared to $110.6 million previously, with the increase owing to growth in workers’ compensation and specialty business, as well as health premiums from strategic partnerships and innovations initiatives.
Looking at the first nine months of 2020, Greenlight Re’s combined ratio comes to 100.1%, an improvement on 104.7% for 9M 2019.
Meanwhile, gross written premiums for the nine-month period total $362.1 million, representing a decrease of 14.9% from $425.5 million last year.
Greenlight Re also reported a total investment income of $6.9 million for the Q3 period and an investment los of $22.8 million for the 9M period.
“This was yet another challenging quarter for the reinsurance industry with elevated levels of natural catastrophes and continued accumulation of pandemic-related exposure,” said Simon Burton, Chief Executive Officer of Greenlight Re.
“Against this backdrop our overall combined ratio of 100.4% is a result driven by discipline in both risk and expense management,” he explained.
“Excluding the 7.0 percentage point impact of catastrophes, the underlying combined ratio reflects an underwriting business that is poised to generate significant value as market conditions improve.”
David Einhorn, Chairman of the Board of Directors, also commented: “We reported a 1.4% investment gain in the Solasglas fund during the third 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.”
