Greenlight Re posts Q3 loss driven by investments, underwriting
Cayman Islands-based Greenlight Capital Re has posted a loss in the third quarter of 2018 driven by investment and underwriting losses.
The company reported a net loss of $89.1 million for the third quarter of 2018 compared to net income of $19.9 million for the same period in 2017.
The loss was primarily driven by a net investment loss during the period as well as an underwriting loss as a result of estimated losses from Hurricane Florence, according to a corporate statement.
“During the quarter we strengthened our financial position through a private offering of $100 million aggregate principal amount of Convertible Senior Notes due 2023, $13.8 million of which we utilized for share repurchases,” said Simon Burton, CEO of Greenlight Re. “Our third quarter underwriting results were negatively impacted by a loss related to Hurricane Florence which added 5.0 points to our 103.5 percent combined ratio.”
The combined ratio for the quarter was 103.5 percent compared to 122.3 percent for the prior-year period.
“I am pleased with the progress made by our Innovations unit as we announced several completed investments during the quarter. This is a first step but marks important progress in our growth strategy which places technology and innovation at the heart of our business,” Burton added.
David Einhorn, chairman of the board of directors, stated: “The third quarter continued to be challenging for our value-oriented investing strategy. Our investment portfolio reported a loss of 8.4 percent for the quarter, the majority of which came from losses on short positions. In October, the heavy selling in growth and momentum stocks and relative outperformance of value stocks resulted in a gain of 1.2 percent in our investment portfolio, despite our net long exposure to a weak equity market.”
Gross written premiums fell to $115.2 million from $181.6 million in the third quarter of 2017. The premium decrease was primarily due to the non-renewal of a Florida homeowner’s quota share contract during the fourth quarter of 2017, the commutation of a mortgage reinsurance contract and a lower participation in a multi-line casualty contract, the company explained.
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