Greenlight Re warns on Q1 profit as investment losses mount

Hedge fund-backed specialist property/casualty reinsurer Greenlight Capital Re has forecasted a net loss of up to $43 million driven by a significant investment loss in its Solasglas portfolio.

The Cayman Islands-based reinsurer, which recently announced the completion of its strategic review, has posted its preliminary, unaudited financial estimates for the quarter ended March 31, 2020.

The company expects a net loss of $38 million to $43 million in Q1 2020, including an investment loss in the Solasglas Investments (SILP) fund of $42.2 million, representing a loss of 8.1 percent for the quarter.

The combined ratio for the quarter is expected to be around 97 to 101 percent. Net premiums written are likely to be between $107 million to $112 million.

For the full year 2019, the company posted a net loss of $398 million, gross written premiums of $524 million, and a combined ratio of 106.9 percent.

Earlier this month, the  reinsurer confirmed that "the best course of action is to continue its existing business plan", and that it is no longer exploring a sale of its business. Greenlight began a strategic review of its business almost a year ago.