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James River Announces Third Quarter 2024 Results, Strategic Actions

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James River Group Holdings (NASDAQ: JRVR) reported a net loss from continuing operations of $40.7 million ($1.07 per diluted share) in Q3 2024, compared to net income of $21.1 million in Q3 2023. The loss was primarily due to a $52.2 million excess consideration paid for E&S combined loss portfolio transfer and $19.2 million of additional adverse development. The E&S segment showed 6% premium growth with 8.6% renewal rate increase. The company announced strategic partnerships with Enstar Group, including a $12.5 million investment at $6.40 per share, and amended convertible preferred shares with Gallatin Point Capital. The company plans to redomicile to the United States in 2025.

James River Group Holdings (NASDAQ: JRVR) ha riportato una perdita netta dalle operazioni continuative di 40,7 milioni di dollari (1,07 dollari per azione diluita) nel terzo trimestre del 2024, rispetto a un reddito netto di 21,1 milioni di dollari nel terzo trimestre del 2023. La perdita è stata principalmente attribuita a un eccesso di considerazione di 52,2 milioni di dollari pagato per il trasferimento del portafoglio di perdite combinate E&S e a 19,2 milioni di dollari di ulteriori sviluppi negativi. Il segmento E&S ha mostrato una crescita dei premi del 6% con un aumento del tasso di rinnovo dell'8,6%. L'azienda ha annunciato alleanze strategiche con Enstar Group, incluso un investimento di 12,5 milioni di dollari a 6,40 dollari per azione, e l'emissione di azioni privilegiate convertibili con Gallatin Point Capital. L'azienda prevede di ricollocarsi negli Stati Uniti nel 2025.

James River Group Holdings (NASDAQ: JRVR) reportó una pérdida neta de operaciones continuas de 40,7 millones de dólares (1,07 dólares por acción diluida) en el tercer trimestre de 2024, en comparación con un ingreso neto de 21,1 millones de dólares en el tercer trimestre de 2023. La pérdida se debió principalmente a un exceso de consideración de 52,2 millones de dólares pagado por la transferencia del portafolio de pérdidas combinadas E&S y 19,2 millones de dólares de desarrollo adverso adicional. El segmento de E&S mostró un crecimiento de primas del 6% con un aumento de la tasa de renovación del 8,6%. La compañía anunció asociaciones estratégicas con Enstar Group, incluida una inversión de 12,5 millones de dólares a 6,40 dólares por acción, y la modificación de acciones preferentes convertibles con Gallatin Point Capital. La empresa planea reubicarse en Estados Unidos en 2025.

제임스 리버 그룹 홀딩스 (NASDAQ: JRVR)는 2024년 3분기에 4,070만 달러 (희석 주당 1.07 달러)의 지속 운영으로 인한 순 손실을 보고했으며, 이는 2023년 3분기에 2,110만 달러의 순이익과 비교됩니다. 이번 손실은 주로 E&S 결합 손실 포트폴리오 이전에 대해 지급된 5,220만 달러의 초과 고려와 1,920만 달러의 추가적인 불리한 개발로 인한 것이었습니다. E&S 부문은 6%의 보험료 성장과 8.6%의 갱신율 증가를 보였습니다. 회사는 Enstar Group과의 전략적 파트너십을 발표했으며, 이에는 주당 6.40달러로 1,250만 달러의 투자가 포함되어 있고, Gallatin Point Capital과 변환 가능한 우선주를 수정했습니다. 회사는 2025년에 미국으로 이전할 계획입니다.

James River Group Holdings (NASDAQ: JRVR) a rapporté une perte nette d'exploitation continue de 40,7 millions de dollars (1,07 dollar par action diluée) au troisième trimestre de 2024, contre un bénéfice net de 21,1 millions de dollars au troisième trimestre de 2023. La perte était principalement due à un excès de considération de 52,2 millions de dollars payé pour le transfert du portefeuille de pertes combinées E&S et à 19,2 millions de dollars de développements défavorables supplémentaires. Le segment E&S a enregistré une croissance des primes de 6 % avec une augmentation du taux de renouvellement de 8,6 %. L'entreprise a annoncé des partenariats stratégiques avec le groupe Enstar, y compris un investissement de 12,5 millions de dollars à 6,40 dollars par action, et a modifié des actions préférentielles convertibles avec Gallatin Point Capital. L'entreprise prévoit de se redomicilier aux États-Unis en 2025.

James River Group Holdings (NASDAQ: JRVR) meldete im dritten Quartal 2024 einen Nettoverlust aus fortgeführten Operationen von 40,7 Millionen US-Dollar (1,07 US-Dollar pro verwässerter Aktie) im Vergleich zu einem Nettogewinn von 21,1 Millionen US-Dollar im dritten Quartal 2023. Der Verlust war hauptsächlich auf eine überhöhte Vergütung von 52,2 Millionen US-Dollar zurückzuführen, die für den Transfer des kombinierten Verlustportfolios von E&S gezahlt wurde, sowie auf zusätzliche negative Entwicklungen in Höhe von 19,2 Millionen US-Dollar. Das Segment E&S wies ein Prämienwachstum von 6 % und eine Erneuerungsrate von 8,6 % auf. Das Unternehmen kündigte strategische Partnerschaften mit der Enstar Group an, einschließlich einer Investition von 12,5 Millionen US-Dollar zu einem Preis von 6,40 US-Dollar pro Aktie, und änderte die konvertierbaren Vorzugsaktien mit Gallatin Point Capital. Das Unternehmen plant, sich 2025 in die Vereinigten Staaten umzuwandeln.

Positive
  • E&S segment gross written premium growth of 6% with 8.6% renewal rate increase
  • Net investment income increased 8.1% to $23.6 million
  • Specialty Admitted Insurance segment achieved 91.3% combined ratio
  • Fronting and program gross written premium growth of 8.7% (excluding non-renewed workers' compensation)
  • Strategic partnership with Enstar including $12.5 million investment
Negative
  • Net loss of $40.7 million compared to $21.1 million profit in prior year
  • $52.2 million excess consideration paid for E&S combined loss portfolio transfer
  • $19.2 million additional adverse development ceded to E&S ADC
  • E&S segment reported high 136.1% combined ratio
  • Shareholders' equity per share decreased 2.1% sequentially

Insights

The Q3 2024 results reveal significant challenges for James River Group, with a net loss of $40.7 million ($1.07 per share) compared to a profit of $21.1 million in Q3 2023. The loss stems primarily from a $52.2 million excess consideration payment for the E&S ADC and $19.2 million in additional adverse development. However, there are positive indicators:

The E&S segment showed 6% premium growth with 8.6% renewal rate increases, while investment income grew 8.1%. Strategic partnerships with Enstar and amendments to Gallatin Point's convertible shares aim to strengthen the balance sheet and reduce fixed charges. The planned US redomiciliation could improve tax efficiency.

The deteriorating loss performance in the E&S segment is concerning, with a 136.1% combined ratio, though the current accident year ratio of 92.6% suggests better underlying performance. The $75 million additional ADC coverage from Enstar provides important protection against further adverse development.

The Specialty Admitted segment remains profitable with a 91.3% combined ratio and 8.7% growth in fronting business, excluding workers' comp changes. The strategic partnership with Enstar, a respected industry player, brings valuable claims expertise and capital support, potentially improving future underwriting performance.

PEMBROKE, Bermuda, Nov. 11, 2024 (GLOBE NEWSWIRE) -- James River Group Holdings, Ltd. ("James River" or the "Company") (NASDAQ: JRVR) today reported the following results for the third quarter 2024 as compared to the same period in 20231:

 Three Months Ended
September 30,
 Three Months Ended
September 30,
($ in thousands, except for share data) 2024  per diluted share  2023  per diluted share
Net (loss) income from continuing operations available to common shareholders$(40,702) $(1.07) $21,097  $0.55 
Net loss from discontinued operations (1,304) $(0.03)  (4,171) $(0.10)
Net (loss) income available to common shareholders (42,006) $(1.10)  16,926  $0.45 
Adjusted net operating (loss) income2 (28,196) $(0.74)  18,859  $0.49 
                

Net loss from continuing operations available to common shareholders was $40.7 million ($1.07 per diluted share). Adjusted net operating loss2 of $28.2 million ($0.74 per diluted share) for the third quarter of 2024 was largely attributable to the previously announced $52.2 million of excess consideration paid over reserves ceded in connection with the Excess and Surplus Lines ("E&S") combined loss portfolio transfer adverse development reinsurance contract ("E&S ADC") that closed on July 2, 2024, as well as $19.2 million of additional adverse development ceded to the E&S ADC and recorded as a deferred reinsurance gain on the Company's balance sheet, and $4.8 million of adverse development retained by the Company. These were partially offset by strong investment income and underwriting profit from our Specialty Admitted segment.

Unless specified otherwise, all underwriting performance ratios presented herein are for our continuing operations and business not subject to retroactive reinsurance accounting for loss portfolio transfers ("LPTs").

Third Quarter 2024 Highlights:

  • E&S segment gross written premium growth was 6% and positive renewal rate change of 8.6%. While the segment reported a 136.1% combined ratio, the current accident year combined ratio for the segment was 92.6%.
  • Specialty Admitted Insurance segment combined ratio of 91.3%, with fronting and program gross written premium growth of 8.7% excluding the non-renewed workers' compensation programs.
  • Net investment income increased 8.1% compared to the prior year quarter, with all asset classes reporting higher income.
  • Shareholders' equity per share of $14.02 decreased 2.1% sequentially from June 30, 2024, due to the net loss from continuing operations, while tangible common equity per share3 increased 1.9% sequentially.

Strategic Actions:

  • The Company is commencing a multi-pronged strategic partnership with Enstar Group Limited ("Enstar"), a leader in P&C industry risk and liability management, under which:
    • Cavello Bay Reinsurance Limited (“Cavello Bay”), a wholly owned subsidiary of Enstar, has agreed to purchase $12.5 million of newly issued common shares at a per share price of $6.40 (subject to certain closing conditions), in addition to 637,640 common shares it already owns through purchases in the open market; and
    • Subsidiaries of the Company have entered into an adverse development reinsurance agreement with Cavello Bay, directly above the existing E&S ADC, with a limit of $75 million and no co-participation4; and
    • Enstar will also have an informal consulting relationship and best practices dialogue with the Company’s claims leadership.
  • The Company amended the convertible preferred shares held by Gallatin Point Capital LLC ("Gallatin Point") to convert $37.5 million liquidation preference of the outstanding preferred shares to common shares at a per share price of $6.40. The quarterly preferred dividend of the remaining $112.5 million liquidation preference will remain at 7% for five years subsequent to September 30, 2024 and will be capped at 8% thereafter. In addition, the voluntary and mandatory conversion prices of the remaining $112.5 million of outstanding preferred shares were amended to increase the conversion premiums to 130% and 200% of the new conversion price of $6.40 per share, respectively.
  • Through these actions, alongside the reduction to the Company's quarterly common dividend, the Company will meaningfully reduce its fixed charges given the opportunity it has to put capital to work at attractive returns, in its E&S segment especially.
  • The Company intends to pursue a plan to redomicile to the United States during 2025 and expects to reduce its effective tax rate closer to the US statutory rate thereafter.
  • See the 2024 Strategic Actions Frequently Asked Questions slides being made available on the Investor Relations page of our website simultaneously with this press release for further information on these Strategic Actions. With these announcements, the Board of Directors have concluded the strategic review process announced in November of 2023. While the strategic review process has been completed, in the ordinary course of business the Company expects to consider beneficial opportunities.

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1 The Company closed the sale of JRG Reinsurance Company Ltd. on April 16, 2024. The full financials for our former Casualty Reinsurance segment have been classified to discontinued operations for all periods.
2 Adjusted net operating (loss) income, tangible common equity per share and adjusted net operating return on tangible common equity are non-GAAP financial measures. See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” at the end of this press release.
3 Percent change before $0.05 common dividends paid per share during the third quarter of 2024.
4 The Enstar transactions are subject to closing conditions, including receipt by Cavello Bay of regulatory approval of the adverse development cover.

Frank D'Orazio, the Company’s Chief Executive Officer, commented on the third quarter, “With the strategic actions we are announcing - notably the addition of Enstar as both a significant shareholder and strategic partner and the continued commitment of Gallatin Point - our highly regarded E&S franchise is significantly de-risked and well positioned to take advantage of strong market support amid a robust E&S environment. Momentum in our Core E&S franchise has continued to build each quarter during 2024 as we continue to balance attractive market conditions with underwriting discipline.”

David Ni, Chief Strategy Officer of Enstar Group, commented, “In conjunction with these transactions, Enstar has had the opportunity to become well-versed with the Company’s business and we are pleased to make a $12.5 million common equity investment, underscoring our support of James River and its E&S franchise.”

Matthew Botein, Co-Founder and Managing Partner of Gallatin Point Capital, commented, “I have seen the team at James River make deep and meaningful improvements to the Company over the last several years. These transactions are the culmination of those efforts and Gallatin Point is very supportive of James River as it enters a new phase, where it is poised to capitalize on the market opportunity for its flagship E&S operation.”

Third Quarter 2024 Operating Results

  • Gross written premium of $330.4 million, consisting of the following:
 Three Months Ended
September 30,
 
($ in thousands) 2024   2023  % Change
Excess and Surplus Lines$230,215  $217,151   6%
Specialty Admitted Insurance 100,208   125,700   (20)%
 $330,423  $342,851   (4 
          
  • Net written premium of $147.3 million, consisting of the following:
 Three Months Ended
September 30,
 
($ in thousands) 2024   2023  % Change
Excess and Surplus Lines$129,735  $123,046   5%
Specialty Admitted Insurance 17,603   22,936   (23)%
 $147,338  $145,982   1%
            
  • Net earned premium of $159.7 million, consisting of the following:
 Three Months Ended
September 30,
 
($ in thousands) 2024   2023   % Change 
Excess and Surplus Lines$138,892  $157,600   (12)%
Specialty Admitted Insurance 20,834   26,073   (20)%
 $159,726  $183,673   (13)%
            
  • E&S Segment Highlights:
    • For the third quarter of 2024, the segment grew 6%, and its casualty underwriting divisions grew 6.7% as compared to the prior year quarter.
    • Renewal rate increases across the segment were 8.6% during the quarter.
    • The segment experienced its strongest submission growth in over four years, with double digit growth in both new and renewal submissions.
  • Specialty Admitted Insurance Segment Highlights:
    • Gross written premium for fronting and program business increased 8.7% compared to the prior year quarter, excluding the impact of our large workers’ compensation program and Individual Risk Workers’ Compensation book.
    • Gross written premium for the Specialty Admitted Insurance segment declined 20.3% compared to the third quarter of 2023, with the reduction due to the impact of the non-renewed workers' compensation program during the second quarter of 2023 and the sale of the renewal rights of the individual risk workers’ compensation business during the third quarter of 2023.
  • Pre-tax favorable (unfavorable) reserve development by segment on business not subject to retroactive reinsurance accounting for loss portfolio transfers was as follows:
 Three Months Ended
September 30,
($ in thousands) 2024   2023 
Excess and Surplus Lines$(57,041) $(7,809)
Specialty Admitted Insurance 165    
 $(56,876) $(7,809)
        
  • The third quarter of 2024 reflected $57.0 million of net unfavorable reserve development in the E&S segment and $0.2 million of favorable reserve development in the Specialty Admitted Insurance segment. The Company ceded $71.4 million of year-to-date unfavorable reserve development on business subject to the E&S ADC. This consists of a $52.2 million reserve charge upon execution of the E&S ADC equal to the excess consideration paid over reserves ceded and additional adverse development of $19.2 million that was ceded to the E&S ADC. The deferred retroactive reinsurance gain on the balance sheet associated with the E&S ADC is $19.2 million as of September 30, 2024. Additionally, the Company recognized unfavorable gross reserve development of $0.9 million ($0.0 net) on the reserves subject to the Commercial Auto LPT, which provides unlimited coverage.
  • Retroactive benefits of $2.2 million were recorded in loss and loss adjustment expenses during the third quarter and the total deferred retroactive reinsurance gain on the Balance Sheet is $31.0 million as of September 30, 2024.
  • Gross fee income was as follows:
 Three Months Ended
September 30,
 
($ in thousands) 2024   2023   % Change 
Specialty Admitted Insurance$5,239  $6,833   (23)%
            
  • The consolidated expense ratio was 31.4% for the third quarter of 2024, which was an increase from 26.4% in the prior year quarter. The expense ratio increase was primarily driven by higher compensation and bad debt expense, and lower net earned premium in the E&S segment.

Investment Results

Net investment income for the third quarter of 2024 was $23.6 million, an increase of 8.1% compared to $21.8 million in the prior year quarter. Growth in income was broad-based across the portfolio, as cash flow was deployed at higher yields.

The Company’s net investment income consisted of the following:

 Three Months Ended
September 30,
 
($ in thousands) 2024   2023  % Change
Private Investments 1,757   27   NM 
All Other Investments 21,807   21,772   0%
Total Net Investment Income$23,564  $21,799   8%
            

The Company’s annualized gross investment yield on average fixed maturity, bank loan and equity securities for the three months ended September 30, 2024 was 4.8% (versus 4.8% for the three months ended September 30, 2023).

Net realized and unrealized gains on investments of $4.2 million for the three months ended September 30, 2024 compared to net realized and unrealized gains on investments of $0.7 million in the prior year quarter. The majority of the realized and unrealized gains during the third quarter of 2024 were related to changes in fair value of our common stock portfolio, partially offset by realized losses on sales in our bank loan and fixed income portfolios.

In connection with the closing of the E&S ADC on July 2, the Company transferred approximately $310.0 million in cash for the payment of the premium to counterparty, State National Insurance Company, Inc.

Capital Management

The Company announced that its Board of Directors declared a cash dividend of $0.01 per common share. This dividend is payable on Tuesday, December 31, 2024 to all shareholders of record on Monday, December 16, 2024.

Tangible Equity

Tangible equity5 of $491.9 million at September 30, 2024 increased 1.4% compared to tangible equity of $485.3 million at June 30, 2024, due to strong unrealized investment gains in accumulated other comprehensive income ("AOCI") as well as an increase in deferred reinsurance gain, partially offset by a net loss from continuing and discontinued operations. Other comprehensive income benefited by $31.1 million during the third quarter of 2024, reducing AOCI to a loss of $42.8 million due to an increase in the value of the Company's fixed maturity securities caused by a decline in interest rates.

_______________
5 Tangible equity and tangible common equity excluding AOCI are non-GAAP financial measures. See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” at the end of this press release.

Conference Call

James River will hold a conference call to discuss its third quarter results tomorrow, November 12, 2024 at 8:30 a.m. Eastern Time. Investors may access the conference call by dialing (800) 715-9871, Conference ID 6261499, or via the internet by visiting www.jrvrgroup.com and clicking on the “Investor Relations” link. A webcast replay of the call will be available by visiting the company website.

Forward-Looking Statements

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, such forward-looking statements may be identified by terms such as believe, expect, seek, may, will, should, intend, project, anticipate, plan, estimate, guidance or similar words. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Although it is not possible to identify all of these risks and uncertainties, they include, among others, the following: the inherent uncertainty of estimating reserves and the possibility that incurred losses may be greater than our loss and loss adjustment expense reserves; inaccurate estimates and judgments in our risk management may expose us to greater risks than intended; downgrades in the financial strength rating or outlook of our regulated insurance subsidiaries impacting our ability to attract and retain insurance business that our subsidiaries write, our competitive position, and our financial condition; the outcome of our exploration of strategic alternatives, and market reaction thereto; the failure to close the common equity and adverse development cover reinsurance transactions with Enstar Group Limited announced on November 11, 2024; the amount of the final post-closing adjustment to the purchase price received in connection with the sale of our casualty reinsurance business and outcome of litigation relating to such transactions; the potential loss of key members of our management team or key employees and our ability to attract and retain personnel; adverse economic factors resulting in the sale of fewer policies than expected or an increase in the frequency or severity of claims, or both; the impact of a higher than expected inflationary environment on our reserves, the values of our investments and investment returns, and our compensation expenses; exposure to credit risk, interest rate risk and other market risk in our investment portfolio; reliance on a select group of brokers and agents for a significant portion of our business and the impact of our potential failure to maintain such relationships; reliance on a select group of customers for a significant portion of our business and the impact of our potential failure to maintain, or decision to terminate, such relationships; our ability to obtain insurance and reinsurance coverage at prices and on terms that allow us to transfer risk, adequately protect our company against financial loss and that supports our growth plans; losses resulting from reinsurance counterparties failing to pay us on reinsurance claims, insurance companies with whom we have a fronting arrangement failing to pay us for claims, or a former customer with whom we have an indemnification arrangement failing to perform its reimbursement obligations, and our potential inability to demand or maintain adequate collateral to mitigate such risks; inadequacy of premiums we charge to compensate us for our losses incurred; changes in laws or government regulation, including tax or insurance law and regulations; changes in U.S. tax laws and the interpretation of certain provisions of Public Law No. 115-97, informally titled the 2017 Tax Cuts and Jobs Act (including associated regulations), which may be retroactive and could have a significant effect on us including, among other things, by potentially increasing our tax rate, as well as on our shareholders; in the event we do not qualify for the insurance company exception to the passive foreign investment company (“PFIC”) rules and are therefore considered a PFIC, there could be material adverse tax consequences to an investor that is subject to U.S. federal income taxation; the Company or its foreign subsidiary becoming subject to U.S. federal income taxation; a failure of any of the loss limitations or exclusions we utilize to shield us from unanticipated financial losses or legal exposures, or other liabilities; losses from catastrophic events, such as natural disasters and terrorist acts, which substantially exceed our expectations and/or exceed the amount of reinsurance we have purchased to protect us from such events; potential effects on our business of emerging claim and coverage issues; the potential impact of internal or external fraud, operational errors, systems malfunctions or cyber security incidents; our ability to manage our growth effectively; failure to maintain effective internal controls in accordance with the Sarbanes-Oxley Act of 2002, as amended; changes in our financial condition, regulations or other factors that may restrict our subsidiaries’ ability to pay us dividends; and an adverse result in any litigation or legal proceedings we are or may become subject to. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those in the forward-looking statements, is contained in our filings with the U.S. Securities and Exchange Commission ("SEC"), including our most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q. These forward-looking statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Non-GAAP Financial Measures

In presenting James River Group Holdings, Ltd.’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (“GAAP”). Such measures, including underwriting (loss) profit, adjusted net operating (loss) income, tangible equity, tangible common equity, adjusted net operating return on tangible equity (which is calculated as annualized adjusted net operating income divided by the average quarterly tangible equity balances in the respective period), and adjusted net operating return on tangible common equity excluding AOCI (which is calculated as annualized adjusted net operating income divided by the average quarterly tangible common equity balances in the respective period, excluding AOCI), are referred to as non-GAAP measures. These non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those measures determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included at the end of this press release.

About James River Group Holdings, Ltd.

James River Group Holdings, Ltd. is a Bermuda-based insurance holding company that owns and operates a group of specialty insurance companies. The Company operates in two specialty property-casualty insurance segments: Excess and Surplus Lines and Specialty Admitted Insurance. Each of the Company’s regulated insurance subsidiaries are rated “A-” (Excellent) by A.M. Best Company.

Visit James River Group Holdings, Ltd. on the web at www.jrvrgroup.com

James River Group Holdings, Ltd. and Subsidiaries
Condensed Consolidated Balance Sheet Data (Unaudited)
 
($ in thousands, except for share data) September 30, 2024 December 31, 2023
ASSETS   
Invested assets:   
Fixed maturity securities, available-for-sale, at fair value$1,215,244  $1,324,476 
Equity securities, at fair value 131,187   119,945 
Bank loan participations, at fair value 149,113   156,169 
Short-term investments 43,588   72,137 
Other invested assets 35,932   33,134 
Total invested assets 1,575,064   1,705,861 
    
Cash and cash equivalents 359,773   274,298 
Restricted cash equivalents (a) 28,364   72,449 
Accrued investment income 10,248   12,106 
Premiums receivable and agents’ balances, net 202,575   249,490 
Reinsurance recoverable on unpaid losses, net 1,939,388   1,358,474 
Reinsurance recoverable on paid losses 133,257   157,991 
Deferred policy acquisition costs 27,279   31,497 
Goodwill and intangible assets 214,372   214,644 
Other assets 468,411   457,047 
Assets of discontinued operations held-for-sale 0   783,393 
Total assets$4,958,731  $5,317,250 
    
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Reserve for losses and loss adjustment expenses$3,001,913  $2,606,107 
Unearned premiums 577,074   587,899 
Funds held (a) 25,157   65,235 
Deferred reinsurance gain 31,001   20,733 
Senior debt 200,800   222,300 
Junior subordinated debt 104,055   104,055 
Accrued expenses 51,991   56,722 
Other liabilities 291,495   333,183 
Liabilities of discontinued operations held-for-sale 0   641,497 
Total liabilities 4,283,486   4,637,731 
    
Series A redeemable preferred shares 144,898   144,898 
Total shareholders’ equity 530,347   534,621 
Total liabilities, Series A redeemable preferred shares, and shareholders’ equity$4,958,731  $5,317,250 
    
Tangible equity (b)$491,874  $485,608 
Tangible equity per share (b)$11.01  $11.13 
Tangible common equity per share (b)$9.17  $9.05 
Shareholders' equity per share$14.02  $14.20 
Common shares outstanding 37,829,475   37,641,563 
    
(a) Restricted cash equivalents and the funds held liability includes funds posted by the Company to a trust account for the benefit of a third party administrator handling the claims on the Rasier commercial auto policies in run-off. Such funds held in trust secure the Company's obligations to reimburse the administrator for claims payments, and are primarily sourced from the collateral posted to the Company by Rasier and its affiliates to support their obligations under the indemnity agreements and the loss portfolio transfer reinsurance agreement with the Company.
(b) See “Reconciliation of Non-GAAP Measures”   
    


James River Group Holdings, Ltd. and Subsidiaries
Condensed Consolidated Income Statement Data (Unaudited)
 
 Three Months Ended
September 30,
 Nine Months Ended
September 30,
($ in thousands, except for share data) 2024   2023   2024   2023 
REVENUES       
Gross written premiums$330,423  $342,851  $1,073,480  $1,119,355 
Net written premiums 147,338   145,982   466,863   521,700 
        
Net earned premiums 159,726   183,673   494,610   526,052 
Net investment income 23,564   21,799   71,127   58,458 
Net realized and unrealized gains on investments 4,150   712   6,428   2,487 
Other income 4,057   4,135   8,748   6,908 
Total revenues 191,497   210,319   580,913   593,905 
        
EXPENSES       
Losses and loss adjustment expenses (a) 184,294   120,174   409,814   366,995 
Other operating expenses 51,224   49,693   146,130   147,922 
Other expenses 1,752   641   4,582   1,467 
Interest expense 6,128   6,486   18,957   18,066 
Intangible asset amortization and impairment 90   2,590   272   2,772 
Total expenses 243,488   179,584   579,755   537,222 
(Loss) income from continuing operations before income taxes (51,991)  30,735   1,158   56,683 
Income tax (benefit) expense on continuing operations (13,914)  7,013   1,249   15,530 
Net (loss) income from continuing operations$(38,077) $23,722   (91)  41,153 
Net (loss) income from discontinued operations (1,304)  (4,171)  (16,262)  1,318 
NET (LOSS) INCOME (39,381)  19,551   (16,353)  42,471 
Dividends on Series A preferred shares (2,625)  (2,625)  (7,875)  (7,875)
NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS$(42,006) $16,926  $(24,228) $34,596 
ADJUSTED NET OPERATING (LOSS) INCOME (b)$(28,196) $18,859  $(700) $37,875 
        
INCOME (LOSS) PER COMMON SHARE       
Basic       
Continuing operations$(1.07) $0.56  $(0.21) $0.88 
Discontinued operations$(0.03) $(0.11) $(0.43) $0.04 
 $(1.10) $0.45  $(0.64) $0.92 
Diluted       
Continuing operations$(1.07) $0.55  $(0.21) $0.88 
Discontinued operations$(0.03) $(0.10) $(0.43) $0.03 
 $(1.10) $0.45  $(0.64) $0.91 
        
ADJUSTED NET OPERATING (LOSS) INCOME PER COMMON SHARE    
Basic$(0.74) $0.50  $(0.02) $1.01 
Diluted (c)$(0.74) $0.49  $(0.02) $1.00 
        
Weighted-average common shares outstanding:       
Basic 37,880,297   37,642,632   37,827,968   37,605,986 
Diluted 37,880,297   43,463,064   37,827,968   37,822,774 
Cash dividends declared per common share$0.05  $0.05  $0.15  $0.15 
        
Ratios:       
Loss ratio 104.1%  67.2%  80.8%  68.6%
Expense ratio (d) 31.4%  26.4%  28.8%  27.4%
Combined ratio 135.5%  93.6%  109.6%  96.0%
Accident year loss ratio (e) 66.4%  62.9%  66.3%  65.8%
        
(a) Losses and loss adjustment expenses include expenses of $18.0 million and $10.3 million for deferred retroactive reinsurance gains for the three and nine months ended September 30, 2024, respectively ($3.2 million of benefit and $6.3 million of expense in the respective prior year periods).
(b) See "Reconciliation of Non-GAAP Measures".
(c) For the three months ended September 30, 2023, the outstanding Series A preferred shares were dilutive. Dividends on the Series A preferred shares were added back to the numerator of the calculation and 5,640,158 common shares from an assumed conversion of the Series A preferred shares were included in the denominator.
(d) Calculated with a numerator comprising other operating expenses less gross fee income (in specific instances when the Company is not retaining insurance risk) included in “Other income” in our Condensed Consolidated Income Statements of $1.1 million and $3.7 million for the three and nine months ended September 30, 2024, respectively ($1.2 million and $3.6 million in the respective prior year periods).
(e) Ratio of losses and loss adjustment expenses for the current accident year, excluding development on prior accident year reserves, to net earned premiums for the current year (excluding net earned premium adjustments on certain reinsurance treaties with reinstatement premiums associated with prior years).
 
James River Group Holdings, Ltd. and Subsidiaries
Segment Results
 

EXCESS AND SURPLUS LINES

 Three Months Ended
September 30,
   Nine Months Ended
September 30,
  
($ in thousands) 2024   2023  % Change  2024   2023  % Change
Gross written premiums$230,215  $217,151   6.0% $736,742  $732,180   0.6%
Net written premiums$129,735  $123,046   5.4% $408,761  $442,923   (7.7)%
              
Net earned premiums$138,892  $157,600   (11.9)% $424,962  $455,640   (6.7)%
Losses and loss adjustment expenses excluding retroactive reinsurance (150,249)  (103,077)  45.8%  (345,387)  (307,364)  12.4%
Underwriting expenses (38,798)  (36,181)  7.2%  (104,812)  (102,827)  1.9%
Underwriting (loss) profit (a)$(50,155) $18,342     $(25,237) $45,449    
            
Ratios:           
Loss ratio 108.2%  65.4%    81.3%  67.5%  
Expense ratio 27.9%  23.0%    24.6%  22.5%  
Combined ratio 136.1%  88.4%    105.9%  90.0%  
Accident year loss ratio (b) 64.7%  60.4%    64.4%  64.1%  
            
(a) See "Reconciliation of Non-GAAP Measures".
(b) Ratio of losses and loss adjustment expenses for the current accident year, excluding development on prior accident year reserves, to net earned premiums for the current year (excluding net earned premium adjustments on certain reinsurance treaties with reinstatement premiums associated with prior years).
 

SPECIALTY ADMITTED INSURANCE

 Three Months Ended
September 30,
     Nine Months Ended
September 30,
  
($ in thousands) 2024   2023   % Change   2024   2023  % Change
Gross written premiums$100,208  $125,700   (20.3)% $336,738  $387,175   (13.0)%
Net written premiums$17,603  $22,936   (23.3)% $58,102  $78,777   (26.2)%
                
Net earned premiums$20,834  $26,073   (20.1)% $69,648  $70,412   (1.1)%
Losses and loss adjustment expenses (16,091)  (20,284)  (20.7)%  (54,159)  (53,370)  1.5%
Underwriting expenses (2,933)  (3,822)  (23.3)%  (9,477)  (15,160)  (37.5)%
Underwriting profit (a), (b)$1,810  $1,967   (8.0)% $6,012  $1,882   219.4%
              
Ratios:             
Loss ratio 77.2%  77.8%      77.8%  75.8%  
Expense ratio 14.1%  14.7%      13.6%  21.5%  
Combined ratio 91.3%  92.5%      91.4%  97.3%  
Accident year loss ratio 78.0%  77.8%      78.6%  77.2%  
              
(a) See "Reconciliation of Non-GAAP Measures".            
(b) Underwriting results for the three and nine months ended September 30, 2024 include gross fee income of $5.2 million and $16.1 million, respectively ($6.8 million and $18.3 million in the respective prior year periods).
 

Underwriting Performance Ratios

The following table provides the underwriting performance ratios of the Company's continuing operations inclusive of the business subject to retroactive reinsurance accounting for loss portfolio transfers. There is no economic impact to the Company over the life of a loss portfolio transfer contract so long as any additional losses subject to the contract are within the limit of the loss portfolio transfer and the counterparty performs under the contract. Retroactive reinsurance accounting is not indicative of our current and ongoing operations. Management believes that providing loss ratios and combined ratios on business not subject to retroactive reinsurance accounting for loss portfolio transfers gives the users of our financial statements useful information in evaluating our current and ongoing operations.

 Three Months Ended
September 30,
 Nine Months Ended
September 30,
  2024   2023   2024   2023 
Excess and Surplus Lines:       
Loss Ratio 108.2%  65.4%  81.3%  67.5%
Impact of retroactive reinsurance 12.9%  (2.0)%  2.4%  1.4%
Loss Ratio including impact of retroactive reinsurance 121.1%  63.4%  83.7%  68.9%
          
Combined Ratio 136.1%  88.4%  105.9%  90.0%
Impact of retroactive reinsurance 12.9%  (2.0)%  2.4%  1.4%
Combined Ratio including impact of retroactive reinsurance 149.0%  86.4%  108.3%  91.4%
          
Consolidated:         
Loss Ratio 104.1%  67.2%  80.8%  68.6%
Impact of retroactive reinsurance 11.2%  (1.7)%  2.1%  1.2%
Loss Ratio including impact of retroactive reinsurance 115.3%  65.5%  82.9%  69.8%
          
Combined Ratio 135.5%  93.6%  109.6%  96.0%
Impact of retroactive reinsurance 11.2%  (1.7)%  2.1%  1.2%
Combined Ratio including impact of retroactive reinsurance 146.7%  91.9%  111.7%  97.2%
                

RECONCILIATION OF NON-GAAP MEASURES

Underwriting Profit

The following table reconciles the underwriting profit by individual operating segment and for the entire Company to consolidated income from continuing operations before taxes. We believe that the disclosure of underwriting profit by individual segment and of the Company as a whole is useful to investors, analysts, rating agencies and other users of our financial information in evaluating our performance because our objective is to consistently earn underwriting profits. We evaluate the performance of our segments and allocate resources based primarily on underwriting profit. We define underwriting profit as net earned premiums and gross fee income (in specific instances when the Company is not retaining insurance risk) less losses and loss adjustment expenses on business from continuing operations not subject to retroactive reinsurance accounting for loss portfolio transfers and other operating expenses. Other operating expenses include the underwriting, acquisition, and insurance expenses of the operating segments and, for consolidated underwriting profit, the expenses of the Corporate and Other segment. Our definition of underwriting profit may not be comparable to that of other companies.

 Three Months Ended
September 30,
 Nine Months Ended
September 30,
($ in thousands) 2024   2023   2024   2023 
Underwriting (loss) profit of the operating segments:       
Excess and Surplus Lines$(50,155) $18,342  $(25,237) $45,449 
Specialty Admitted Insurance 1,810   1,967   6,012   1,882 
Total underwriting profit of operating segments (48,345)  20,309   (19,225)  47,331 
Other operating expenses of the Corporate and Other segment (8,421)  (8,482)  (28,182)  (26,312)
Underwriting (loss) profit (a) (56,766)  11,827   (47,407)  21,019 
Losses and loss adjustment expenses - retroactive reinsurance (17,954)  3,187   (10,268)  (6,261)
Net investment income 23,564   21,799   71,127   58,458 
Net realized and unrealized gains on investments 4,150   712   6,428   2,487 
Other income (expense) 1,233   2,286   507   1,818 
Interest expense (6,128)  (6,486)  (18,957)  (18,066)
Amortization of intangible assets (90)  (90)  (272)  (272)
Impairment of IRWC trademark intangible asset    (2,500)     (2,500)
(Loss) income from continuing operations before taxes$(51,991) $30,735  $1,158  $56,683 
        
(a) Included in underwriting results for the three and nine months ended September 30, 2024 is gross fee income of $5.2 million and $16.1 million, respectively ($6.8 million and $18.3 million in the respective prior year periods).
 

Adjusted Net Operating Income

We define adjusted net operating income as income available to common shareholders excluding a) income (loss) from discontinued operations b) the impact of retroactive reinsurance accounting for loss portfolio transfers, c) net realized and unrealized gains (losses) on investments, d) certain non-operating expenses such as professional service fees related to various strategic initiatives, and the filing of registration statements for the offering of securities, and e) severance costs associated with terminated employees. We use adjusted net operating income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted net operating income should not be viewed as a substitute for net income calculated in accordance with GAAP, and our definition of adjusted net operating income may not be comparable to that of other companies.

Our (loss) income available to common shareholders reconciles to our adjusted net operating (loss) income as follows:

 Three Months Ended September 30,
  2024   2023 
($ in thousands)Loss
Before
Taxes
 Net
Loss
 Income
Before
Taxes
 Net
Income
(Loss) income available to common shareholders$(55,920) $(42,006) $23,939  $16,926 
Loss from discontinued operations 1,304   1,304   4,171   4,171 
Losses and loss adjustment expenses - retroactive reinsurance 17,954   14,184   (3,187)  (2,518)
Net realized and unrealized investment gains (4,150)  (3,279)  (712)  (562)
Other expenses 1,752   1,601   (1,531)  (1,133)
Impairment of IRWC trademark intangible asset       2,500   1,975 
Adjusted net operating (loss) income$(39,060) $(28,196) $25,180  $18,859 
        
 Nine Months Ended September 30,
  2024   2023 
($ in thousands)(Loss) Income
Before
Taxes
 Net
Loss
 Income
Before
Taxes
 Net
Income
(Loss) income available to common shareholders$(22,979) $(24,228) $50,126  $34,596 
Loss (income) from discontinued operations 16,262   16,262   (1,318)  (1,318)
Losses and loss adjustment expenses - retroactive reinsurance 10,268   8,112   6,261   4,946 
Net realized and unrealized investment gains (6,428)  (5,079)  (2,487)  (1,964)
Other expenses 4,582   4,233   (733)  (360)
Impairment of IRWC trademark intangible asset       2,500   1,975 
Adjusted net operating income (loss)$1,705  $(700) $54,349  $37,875 
                

Tangible Equity (per Share) and Tangible Common Equity (per Share)

We define tangible equity as shareholders' equity plus mezzanine Series A preferred shares and the unrecognized deferred retroactive reinsurance gain on loss portfolio transfers less goodwill and intangible assets (net of amortization). We define tangible common equity as tangible equity less mezzanine Series A preferred shares. Our definition of tangible equity and tangible common equity may not be comparable to that of other companies, and it should not be viewed as a substitute for shareholders’ equity calculated in accordance with GAAP. We use tangible equity and tangible common equity internally to evaluate the strength of our balance sheet and to compare returns relative to this measure. The following table reconciles shareholders’ equity to tangible equity and tangible common equity for September 30, 2024, June 30, 2024, December 31, 2023, and September 30, 2023.

 September 30, 2024 June 30, 2024 December 31, 2023 September 30, 2023
($ in thousands, except for share data)       
Shareholders' equity$530,347  $541,791  $534,621  $562,544 
Plus: Series A redeemable preferred shares 144,898   144,898   144,898   144,898 
Plus: Deferred reinsurance gain (a) 31,001   13,047   20,733   37,653 
Less: Goodwill and intangible assets 214,372   214,462   214,644   214,735 
Tangible equity$491,874  $485,274  $485,608  $530,360 
Less: Series A redeemable preferred shares 144,898   144,898   144,898   144,898 
Tangible common equity$346,976  $340,376  $340,710  $385,462 
        
Common shares outstanding 37,829,475   37,825,767   37,641,563   37,619,749 
Common shares from assumed conversion of Series A preferred shares 6,848,763   6,848,763   5,971,184   5,640,158 
Common shares outstanding after assumed conversion of Series A preferred shares 44,678,238   44,674,530   43,612,747   43,259,907 
        
Equity per share:       
Shareholders' equity$14.02  $14.32  $14.20  $14.95 
Tangible equity$11.01  $10.86  $11.13  $12.26 
Tangible common equity$9.17  $9.00  $9.05  $10.25 
        
(a) Deferred reinsurance gain for the period ending September 30, 2023 includes the deferred retroactive reinsurance gain of $15.7 million related to the former Casualty Reinsurance LPT.
 

FAQ

What was James River's (JRVR) net loss in Q3 2024?

James River reported a net loss from continuing operations of $40.7 million ($1.07 per diluted share) in Q3 2024.

What was JRVR's E&S segment performance in Q3 2024?

The E&S segment showed 6% premium growth with 8.6% renewal rate increase, but reported a 136.1% combined ratio.

How much is Enstar investing in James River (JRVR)?

Enstar, through its subsidiary Cavello Bay Reinsurance, agreed to purchase $12.5 million of newly issued common shares at $6.40 per share.

When does James River (JRVR) plan to redomicile to the United States?

The company plans to redomicile to the United States during 2025.

James River Group Holdings, Ltd

NASDAQ:JRVR

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JRVR Stock Data

175.53M
36.51M
2.78%
84.98%
2.67%
Insurance - Specialty
Fire, Marine & Casualty Insurance
Link
United States of America
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