AM Best Revises Outlooks to Negative for James River Group Holdings, Ltd. and Subsidiaries
AM Best has revised the outlook for James River Group Holdings, Ltd. (JRVR) from stable to negative while affirming its Financial Strength Rating (FSR) of A (Excellent) and Long-Term Issuer Credit Ratings (Long-Term ICR) of “a”. The change follows adverse reserve development in the commercial auto line within its excess and surplus segment. This development is linked to a significant account now in runoff, raising concerns about the group’s balance sheet strength and the consistency of its reserves, indicating a need for long-term mitigation strategies.
- Financial Strength Rating affirmed at A (Excellent)
- Long-Term Issuer Credit Ratings of 'a' affirmed
- Outlook revised to negative from stable
- Recurring adverse reserve development in commercial auto line
- Concerns over stability of reserves and risk-adjusted capital levels
AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” of the rated operating subsidiaries of James River Group Holdings, Ltd. (JRG Holdings) [NASDAQ:JRVR]. In addition, AM Best has revised the outlook to negative from stable and affirmed the Long-Term ICR of “bbb” of JRG Holdings. JRG Holdings is domiciled in Pembroke, Bermuda, while its subsidiaries are based in Pembroke, Richmond, VA, and Raleigh, NC. (See below for a detailed listing of the subsidiaries.)
The Credit Ratings (ratings) reflect the group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
The revised Long-Term ICR outlook follows the announcement of adverse reserve development within the commercial auto line in JRG Holdings’ excess and surplus segment and to a lesser extent the group’s casualty reinsurance segment. Notably, the reserve development within the commercial auto line involves a significantly sized account that has been placed in runoff. The Long-Term ICR outlook captures AM Best’s concerns with the group’s balance sheet strength, given the recurring nature of the reserve development for the group’s commercial auto line account. AM Best’s view is that long-term mitigation of the impact of this account is necessary to demonstrate stability in the group’s reserves and consistent risk-adjusted capital levels.
The outlooks have been revised to negative from stable, and the FSR of A (Excellent) and the Long-Term ICRs of “a” have been affirmed for the following subsidiaries of James River Group Holdings, Ltd.:
- James River Insurance Company
- James River Casualty Company
- Falls Lake National Insurance Company
- Stonewood Insurance Company
- Falls Lake Fire and Casualty Company
- JRG Reinsurance Company Ltd.
- Carolina Re, Ltd.
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 media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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.
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FAQ
What is the new outlook for JRVR as per AM Best?
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