Greenlight Re Has First Profit Since 2014 on Einhorn Rebound

  • Reinsurer's first quarter investment income was $28.4 million
  • Einhorn says portfolio defensively positioned amid uncertainty

Greenlight Capital Re Ltd. posted a quarterly profit for the first time since 2014 on a rebound in the reinsurer’s investment portfolio, which is overseen by hedge fund manager David Einhorn.

Net income of $28.7 million in the three months ended March 31 compares with a loss of $24 million in the same period last year, the Cayman Islands-based company said Monday in a statement. First-quarter investment income was $28.4 million, compared with a loss of $24.8 million on the portfolio a year earlier.

“Our investment portfolio performed adequately during the quarter as our portfolio remained defensively positioned in an uncertain investment environment,” Einhorn, who’s chairman of the reinsurer, said in the statement.

Einhorn is seeking to steer the company to its first full-year stock advance since 2013 after enduring losses on investing and insurance underwriting. Greenlight Re was unprofitable all four quarters last year and for two periods in 2014.

He has been helped this year by gains in some of his largest holdings including Consol Energy Inc. and gold, which had its best quarter since 1986 amid a more dovish tone by the Federal Reserve.

Book value, a measure of assets minus liabilities, climbed to $22.88 a share as of March 31, compared with $22.17 at the end of 2015.

Underwriting income surged to $3.7 million from $800,000 in the first three months of 2015, when a push by money managers into insurance made it harder to find profitable contracts.

The combined ratio was 97.3, meaning the company had an underwriting profit of 2.7 cents for every premium dollar. That improved from a ratio of 99.8. Policy sales rose 29 percent to $164.7 million.

Greenlight Re gained 15 percent this year through the close of trading Monday to $21.47. That compares with the $19 initial public offering price in 2007.

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