Hedge fund style reinsurer Greenlight Re has recorded both underwriting income and an investment gain in the second-quarter of 2019, with net income of $15.3 million significantly improving from the $37.4 million net loss for the same period last year.
The investment-oriented reinsurer has reported net underwriting income of $1.5 million for the second-quarter of 2019, compared with net underwriting income of $5.1 million in Q2 2018.
The firm’s investment performance in the period more than offset the reduced underwriting gain, and at $18.8 million, net investment income increased dramatically when compared to a net investment loss of $40.7 million in Q2 2018.
For the first six months of the year, Greenlight Re’s net investment income reached $51.1 million, which is a huge improvement on the net investment loss of $185.9 million recorded in the first-half of 2018. The reinsurer notes that the improved investment return included a gain of $45.2 million on the Solasglas fund, which posted a gain of 9.1% for H1 2019.
Turning back to its underwriting operations, and Greenlight Re saw its gross written premiums jump from the $142.1 million in Q2 2018, to $152.3 million in Q2 2019. Net premiums written increased from $114.9 million in Q2 2018 to $129.2 million in Q2 2019, and at $23.1 million, ceded premiums fell from the $27.2 million posted a year earlier.
Net earned premiums totalled $120.4 million in the second-quarter of 2019, compared with $128.8 million in Q2 2018.
Greenlight Re has reported a composite ratio for the quarter of 96.1% compared with 92.7% in Q2 2018. At 98.8%, the firm’s combined ratio weakened when compared with the 96% recorded in Q2 2018.
For the first-half of the year, the company has reported a composite ratio of 105.8% compared with 94.5% posted a year earlier, and a combined ratio of 108.3%, compared to 97.3% in H1 2018.
“We increased fully diluted book value per share by 3.2% in the quarter, with a positive contribution from underwriting and strong investment performance. Conditions are improving in multiple lines of business and our diversified underwriting platform is well-positioned to participate in the emerging opportunities,” said Simon Burton, Chief Executive Officer (CEO) of Greenlight Re.
A track record of poor underwriting returns led ratings agency A.M. Best to turn negative on Greenlight Re earlier this year, and as a result of these measures the firm has partially de-risked its investment portfolio and also started a strategic review led by its Board of Directors, which is ongoing and which is being assisted by Credit Suisse.
Chairman of the Board of Directors, David Einhorn, said: “We were pleased to see our investment portfolio perform well throughout the second quarter as Solasglas posted a positive return of 2.7%, net of all fees and expenses for the quarter and 9.1% for the first half of the year.”
