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 in 2021, reversing the previous trend of decline. AM Best expects the company 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 2021 combined ratio, inclusive of corporate expenses, improved to 101.9% (company reported 100.9%)—the lowest result over the past five years, based on AM Best’s calculations—and compared favorably with similarly assessed companies in the reinsurance composite. Investment returns since 2019 also have been accretive to results.
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. The company has taken steps to diversify its platform, 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.
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