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Greenlight Re posts $2.1mn loss in Q3

Cayman Islands-based Greenlight Capital Re has posted a $2.1mn net loss for the third quarter against a healthy prior year period $17.5mn profit, due to a significant investment income loss.

In the firm’s second quarterly results since its Initial Public Offering (IPO) on New York’s NASDAQ in May, Greenlight Capital Re posted an loss of $21.4mn in investment income.

The firm is chaired by one-time financial wunderkind, David Einhorn, who was a member of mortgage lender New Century Financial Corp's board before mounting losses from loans to riskier borrowers sent the company into bankruptcy in April. Einhorn resigned the position in March.

The hedge-fund backed reinsurer’s loss translated into a $0.06 loss on fully diluted earnings per share. Fully diluted book value per share, however, grew by 17.1 percent to $15.78 for the period.

For the nine months ending September, net income was $6.1mn, down 85 percent on the prior year period. Gross written premiums fell 20 percent, to $19.8mn for the third quarter, while growing by 340 percent on 2006 to $123.3mn for the first nine months of 2007.

The combined ratio was 93.1 percent for the first nine months of the year.

The group also reported a net investment loss of $4.8mn for the third quarter.

“We continued to build our team and infrastructure in the third quarter and are now fully ramped up for our first full year as a public company in 2008,” explained Einhorn.

“In a turbulent market, we were able to preserve capital and further advance our strategy to deliver superior growth in book value per share over the long term,” he added.

Greenlight shares, which launched on NASDAQ in May at $19, closed the week at $21.22.

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