Catastrophes dent Greenlight Re’s underwriting result but net income rises on investments

Cayman Islands domiciled reinsurer Greenlight Capital Re, Ltd. has reported a higher combined ratio of 95.9% for the third quarter of 2024 compared to last year’s 91.2% on the back of elevated losses from catastrophes, although net income increased 161% year-on-year as total net investment income rose.

Greenlight Re’s loss ratio increased to 61.3% in Q3 2024 from 59.4% in Q3 2023, as catastrophe losses, including hurricane Helene, Central European floods and severe convective storms in the US, added 9.3% to the combined ratio during this year’s third quarter.

As a result, net underwriting income fell from $14.4 million to $6.1 million, which contributed to the 4.7 percentage point rise in the combined ratio year-on-year.

However, Greenlight Re’s total investment income during the third quarter of 2024 was $28.1 million, a significant increase of 451% on Q3 2023’s $5.1 million. The firm explains that its investment in the Solasglas fund, managed by DME Advisors, returned 5.2%, representing net income of $19.8 million. Other investment income, primarily from interest earned on its restricted cash and cash equivalents, was reported at $8.2 million.

In terms of growth, gross premiums written (GPW) in Q3 2024 were $168.3 million, compared to $183.1 million last year. The $14.7 million, or 8% decrease was primarily due to a personal property contract and a Lloyd’s casualty contract that the reinsurer opted to non-renew during 2024, partially offset by growth in the specialty business.

Similarly, earned premiums decreased by $11.2 million, or 6.9%, to $151.9 million in Q3 2024, compared to $163.1 million in Q3 2023.

As a result of the above, the reinsurer has reported net income of $35.2 million for the third quarter of 2024, up considerably on Q3 2023’s figure of $13.5 million.

Greg Richardson, Chief Executive Officer of Greenlight Re, commented, “Our third quarter results demonstrated Greenlight Re’s disciplined and resilient underwriting approach, achieving profitable performance for the eighth consecutive quarter. Alongside strong investment returns, Greenlight Re recorded a notably strong quarter.”

David Einhorn, Chairman of the Board of Directors, added, “Solasglas generated a net return of 5.2% in the third quarter, while maintaining a conservative exposure to equity markets. Despite significant natural catastrophe events during the quarter, Greenlight Re performed well, with positive performance on both our underwriting and investment activities.”

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