Greenlight Re CEO says strategic review not complete as losses continue in 2019

Hedge fund-backed Greenlight Re's CEO Simon Burton revealed that its strategic review process is not yet complete as the reinsurer posted a loss in both its fourth quarter 2019 and full year results.

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.

Greenlight Capital was impacted by catastrophe losses related to typhoons Hagibis and Faxai in the fourth quarter of 2019, leading to a net loss of $30.3 million in the 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.

"We are optimistic about our positioning in 2020, which will enable us to take advantage of improving market conditions.”

Burton added that “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.”