10 March 2020Cayman analysis

Strategic review not yet complete: Greenlight Re

Hedge fund-backed Greenlight Re's strategic review process is not yet complete, according to CEO Simon Burton, as the reinsurer posted a loss for both the full year and Q4 2019.

The Cayman Islands-based reinsurer posted a full-year net loss of $398 million, compared with a net loss of $350.1 million in 2018.

Catastrophe losses related to typhoons Hagibis and Faxai in Q4 contributed a net loss of $30.3 million in that quarter.

The combined ratio for the year was 106.9 percent, compared to 102.8 percent for the prior-year period. Catastrophe losses contributed 3.6 percentage points to the composite and combined ratio for 2019, compared to 3.7 percentage points for 2018.

The company's full-year gross written premiums fell to $524 million, from $567.5 million reported in the prior-year period.

The total net investment income for the year was $52.3 million, compared to a net investment loss of $323.1 million reported in the prior-year period.

Burton said: “As we compare our portfolio at the end of 2019 with the one that started the year, we are pleased with the progress we’ve made. Excluding the adverse loss development on our private passenger auto business recognized in the first half of 2019, our portfolio performed acceptably during 2019, despite $17 million of natural catastrophe losses that we incurred during the year.”

Burton said he was optimistic about Greenlight Re’s positioning in 2020, which will enable it to take advantage of improving market conditions.

Burton added: “The Company has undertaken a strategic review process and has been engaging in discussions with interested counterparties. The review is not yet complete. We continue to evaluate various options and ultimately intend to determine the best outcome for our shareholders.”

Commenting on the investment portfolio, David Einhorn, chairman of the board of directors, said: “Our investment returns from the Solasglas fund were positive for the year, reporting a 9.3% return and an overall net investment gain of $46.1 million. We gave up some ground during the fourth quarter, given the unabated outperformance of growth vs. value stocks.”