AM Best updates Greenlight Re’s outlook to positive, affirming an A rating

AM Best revised its outlook for Greenlight Reinsurance, Ltd. (Cayman Islands) and Greenlight Reinsurance Ireland, DAC (Ireland) from stable to good, while confirming the financial strength rating of A- (Excellent) and long-term issuer credit ratings. (long-term ICR) of “a-” (Excellent).

Additionally, AM Best revised the outlook to positive from stable and affirmed the long-term ICR of “bbb-” (Good) for Greenlight Capital Re, Ltd. (Cayman Islands) [NASDAQ: GLRE]parent company.

According to AM Best, the ratings reflect the strength of Greenlight Capital Re’s balance sheet, which is considered very strong, in line with its moderate performance, neutral business profile, and enterprise risk management (ERM).

The positive outlook is based on AM Best’s assessment of Greenlight Capital Re’s performance improvement in recent years. Despite a history of variable investment returns and underwriting losses, recent underwriting results have been positive, and investment company performance is stable.

Notably, Greenlight Capital Re achieved a full-year underwriting profit for the first time in 2023. The company has also shown five consecutive years of improvement in return on equity and revenue growth. As of 2019, investment returns have been acceptable across the board.

Greenlight Capital Re’s business profile is considered neutral by AM Best. The company, which was incorporated in the Cayman Islands in 2004, is recognized as one of the longest-running insurance companies. Through its subsidiaries, the company provides property/casualty insurance worldwide.

In an effort to diversify its business, Greenlight Capital Re has made significant investments in its innovation-related activities, including the 2022 launch of Greenlight Re Innovations Syndicate 3456 at Lloyd’s. AM Best also views a company’s ERM as appropriate for the complexity of its operations and overall risk profile.

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