In contrast to the rises recorded by major US-listed (re)insurance stocks, Greenlight Re’s share price has closed down 12.9 percent as investors reacted to a Q4 underwriting loss and uncertainty around a drawn-out strategic review.

  • AIG shares rise 6.9% following 13% drop the previous day
  • Aon up only 2.3% following 16.7% drop on Willis acquisition news 
  • Willis Towers Watson up only 1.6% after 7.5% fall the previous day
  • Greenlight Re share price plummets 12.8%, compounding previous 6.6% drop 

Greenlight Re’s share price closed at $7.26 today (10 March) after a 6.6 percent fall the previous day amid a general fall in US stock markets. 

Today’s fall followed the Cayman Islands-based total return reinsurer’s announcement the previous night of a fourth quarter net underwriting loss of $15.8mn compared with a loss of $18mn in the prior year period. 

On an earnings call today Greenlight Re chairman David Einhorn also conceded that the strategic review begun last year after AM Best placed its A- rating on negative outlook is taking longer than expected.

“I think it is fair to say that the strategic review has taken longer than we would have expected it to,” Einhorn said. “And I think you can take from that, that whatever our first course of action choice was it did not pan out and so now we’re thinking about other courses of action.”

Greenlight Re was one of the few US-listed (re)insurance stocks to fall, with most companies regaining some ground after a big plunge the previous day. 

All major insurers were up, led by AIG’s 6.9 percent rise. However, the New York-based insurance giant’s closing price today of $35.07 represented a recovery of only part of a 13 percent plunge yesterday to $32.81. 

Another insurer recording a big swing in share price was Markel, whose shares closed up 6.5 percent today after a 10 percent drop the previous day.

Allstate’s shares were up 3.8 percent after falling 10.7 percent the previous day.

Hallmark Financial’s share price was up 5.8 percent after plummeting 20.4 percent the previous day. The Dallas-based specialty insurer revealed earlier this month it was looking at reinsurance solutions such as adverse development covers or loss portfolio transfers to help manage some of its future volatility from commercial auto.

Old Republic, another insurer recording a large fall the previous day, was up just 1.1 percent after a 10.9 percent drop.

Other insurance stocks recording rises today included Berkshire Hathaway (its A share were up 4.7 percent, its B shares were up 5.0 percent), Chubb (3.1 percent), Cincinnati Financial (5.8 percent), CNA (3.3 percent), The Hartford (3.6 percent), ProSight (7.3 percent), RLI (4.3 percent), The Hanover (2.6 percent), Travelers (2.9 percent) and WR Berkley (4.9 percent).

Among Bermudian-based (re)insurers, Arch Capital was up 3.2 percent, Axis Capital was up 1.6 percent, Everest Re was up 3.1 percent, RenaissanceRe was up 1.4 percent and Third Point Re was up 2.4 percent.

Among brokers, Aon was up 2.3 percent. Arthur J Gallagher was up 3.6 percent, Brown & Brown was up 3.5 percent, Marsh & McLennan Companies (MMC) was up 3.2 percent and Willis Towers Watson was up 1.6 percent. 

Aon’s share price rise made up only a small portion of the 16.7 percent fall it had recorded the previous day after announcing a proposed $30bn deal to buy Willis Towers Watson. Unusually for an acquisition target, Willis Towers Watson’s shares dropped 7.5 percent yesterday. 

The rises recorded by their broking rivals today went further in reversing some of the 5.5 percent drop in MMC’s share price the previous day and 6.6 percent falls recorded by both Arthur J Gallagher and Brown & Brown. 

In contrast to the rises recorded by the vast majority of insurance stocks, FedNat was down 1.4 percent, compounding a 9.4 percent drop the previous day. Argo was up only 0.2 percent, following a 9.1 percent drop the previous day. 

The US-listed insurance share price rises were part of a wider trend of bouncing back after the largest single-day drop for Wall Street in a decade on 9 March. The S&P 500 had fallen 7.6 percent prompted by a crash in the global oil markets as coronavirus fears continued to spread.

The S&P 500 ended today up nearly 5 percent. President Trump today suggested the possibility of a coronavirus-related stimulus package.