Reinsurance News

Greenlight Re’s underwriting performance improves as Q4 income hits $42m

11th March 2021 - Author: Luke Gallin

Hedge fund-backed reinsurer Greenlight Re has reported net income of $42 million for the fourth-quarter of 2020 and income of $3.9 million for the year, as the company’s underwriting performance improved year-on-year.

Greenlight-ReQ4 2020 income of $42 million is a significant improvement on the $30.3 million net loss reported by the firm in the same period last year.

Gross written premiums increased from $98.5 million to $117.7 million in Q4 2020, driven mostly by increases in workers’ compensation and specialty business, alongside health premiums associated with the company’s strategic partnerships and Innovations initiatives.

Net written premiums jumped by almost 20% in Q4 2020 to $117.7 million, against $98.4 million a year earlier. At the same time, net premiums earned increased from $108.6 million to $120.5 million in the fourth-quarter of 2020.

Overall, Greenlight Re fell to an underwriting loss of $1.1 million in the fourth-quarter, which included losses related to the COVID-19 pandemic of $1.1 million. This compares with an underwriting loss of $15.8 million in Q4 2019, which was driven by the impacts of typhoons Hagibis and Faxai.


For Q4 2020, Greenlight Re’s combined ratio improved to 101% from the 114.5% reported for the same period in 2019.

Investment income amounted to $48.4 million for the fourth-quarter of 2020, while the firm’s investment portfolio earned 8.4%, representing $38.5 million of investment income from the Solasglas fund.

Additionally, the company has reported $9.9 million of other investment income, primarily from its Innovations and other strategic investments.

For the full-year 2020, Greenlight Re has announced net income of $3.9 million against a net loss of $3.9 million in the prior year.

Net written premiums increased by 0.5% year-on-year to end 2020 at $477.5 million, while net earned premiums fell by almost 6% to $455.4 million.

For the full-year, the firm has reported an underwriting loss of $1.6 million and a combined ratio of 100.4%, compared with an underwriting loss of $33.5 million and a combined ratio of 106.9% in 2019.

In 2020, Greenlight Re recorded catastrophe losses of $9 million from Hurricanes Laura, Isaias, and Sally, the Midwest derecho event, and the North American wildfires. Additionally, COVID-19 produced underwriting losses of $7.1 million for the year.

The reinsurer also notes that the net financial impact of adverse prior-year loss development contributed $3.7 million and $30.1 million to the underwriting loss in 2020 and 2019, respectively.

Throughout 2020, Greenlight Re earned investment income of $25.5 million, with the investment portfolio generating a gain of 1.4% for the year, representing $4.4 million of income from its investment in the Solasglas fund.

The company’s Chief Executive Officer (CEO), Simon Burton, commented: “We had a strong overall quarter and grew book value per share by 11.6%. This growth was led by $38.5 million of gains generated by our investment in Solasglas, and we recognized a further $9.9 million of other investment income, driven primarily by our strategic and Innovations partnerships.

“The underwriting combined ratio of 101% includes a small loss from COVID, and caps a year during which our underwriting business showed tremendous resilience to the pressures of the pandemic and numerous natural catastrophes.”

David Einhorn, Chairman of the Board of Directors, added: “We reported an 8.4% investment gain in the Solasglas fund during the fourth quarter, driven primarily by strong performance in our long positions. We expect a global economic recovery as the pandemic subsides and are positioned for higher inflation, a strong housing market and rising interest rates.”

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