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OLDWICK, N.J., September 29, 2023–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) of Greenlight Reinsurance, Ltd. (Cayman Islands) and Greenlight Reinsurance Ireland, Designated Activity Company (Ireland). Additionally, AM Best has affirmed the Long-Term ICR of “bbb-” (Good) of Greenlight Capital Re, Ltd. (Cayman Islands) (GLRE) [NASDAQ: GLRE], the ultimate holding company. The outlook of these Credit Ratings (ratings) is stable.
The ratings reflect GLRE’s balance sheet strength, which AM Best assesses as very strong, as well as its marginal operating performance, neutral business profile and appropriate enterprise risk management (ERM).
GLRE’s balance sheet strength assessment of very strong is supported by the strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR). Consolidated surplus increased 5.8% in 2022, and has continued to grow throughout 2023, trending positively after a period of decline. AM Best expects the group to maintain risk-adjusted capital levels in line with its current ratings.
AM Best views GLRE’s operating performance as marginal, given its historically volatile investment returns and marginal underwriting performance. However, the group’s 2022 combined ratio is below the current five-year average, and inclusive of corporate expenses is 104.6% compared to a 105.2% five-year average. The group’s return metrics also continue to trend positively, with five consecutive years of improving returns on equity and revenue. Investment returns since 2019 also have been accretive to results. Though the group’s operating performance metrics are trending positively, it has not yet had a full year of underwriting profitability.
AM Best views GLRE’s business profile as neutral. The company was incorporated in the Cayman Islands in 2004 and is one of the longest-tenured total return reinsurers. Through its operating subsidiaries, GLRE provides property/casualty reinsurance on a global scale. GLRE has taken steps to diversify its platforms, including through significant investments in its innovation-related operations, including the 2022 launch of the Greenlight Re Innovations Syndicate 3456 at Lloyd’s. Additionally, GLRE’s ERM is deemed appropriate for the company’s business complexity and overall risk profile.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Christopher Pennings
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