Middle East conflict reserves pushed Greenlight Capital Re's combined ratio to 100.1% in the second quarter of 2026, tipping its underwriting result into a marginal loss. A further US$27.9 million loss on the Solasglas hedge fund then produced a net quarterly loss of US$29.6 million.
The deterioration from 95.0% in Q2 2025 was driven by catastrophe losses concentrated in specialty lines - marine war, political violence, aviation, and energy. The current-year loss ratio rose to 68.8% from 60.0% a year earlier.
“Volatility is inherent in our business, and this quarter is a good reminder of the important role we play in helping our clients when they need us most," said Greg Richardson, chief executive of Greenlight Re. "We have taken a prudent approach to our Middle East exposure and have set up appropriate reserves this quarter."
The conflict became a defining factor in political violence and terrorism reinsurance at mid-year. Insured losses were estimated to potentially exceed US$3 billion. Capacity tightened sharply at mid-year renewals, with WTW noting reduced line sizes, tighter terms, and higher rates.
Greenlight Re's net underwriting income for the quarter was a loss of US$0.2 million, against income of US$8.1 million in Q2 2025. The Solasglas investment fund, managed by chairman David Einhorn, produced a loss of US$27.9 million in Q2. That was the primary driver of the gap between the near-breakeven underwriting result and the US$29.6 million net loss.
Einhorn attributed the Solasglas loss to gains on the long portfolio being offset by losses on the short book and approximately 5% macro drag. "Solasglas remains conservatively positioned during this uncertain environment, while the overall equity market remains very expensive," Einhorn said.
Gross premiums written rose 2% to US$183.1 million in Q2 from $179.6 million a year earlier. Net premiums earned were broadly flat at US$161.8 million. For H1 2026, gross premiums written fell 4% to US$411.1 million and net premiums earned declined 4% to US$316 million.
The H1 combined ratio improved to 98.1% from 99.9% in the prior-year period. Net underwriting income for the six months was US$6 million, against US$0.3 million a year earlier. H1 net income was US$6.2 million, compared with US$30 million in H1 2025.
Greenlight Re repurchased US$14.2 million of ordinary shares in Q2 at an average price of US$17.69 per share. Fully diluted book value per share fell 3.7% to $20.61 from US$21.40 at March 31. The company operates reinsurance entities in the Cayman Islands and Ireland, as well as a Lloyd's platform through Greenlight Innovation Syndicate 3456.
