James River Group Holdings, Inc. · NASDAQ:JRVR
James River — Q2 2020 Earnings Presentation
22 slides from James River's earnings presentation, August 2020
Slide 1: Second Quarter 2020 Investor Presentation
Second Quarter 2020 Investor Presentation
Slide 2: Disclosure
Disclosure Forward-Looking Statements This presentation 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, intend, pro
Slide 3: Table of Contents
Table of Contents Franchise Overview Slide 4 Comparative Market Highlights Slide 16 Appendix Slide 18 3
Slide 4: Franchise Overview
Franchise Overview
Slide 5: Our Strategy
Our Strategy We seek to deliver consistent, top tier returns on tangible equity and generate sector leading value creation ⚫ Our strategy is to generate superior underwriting margins from our niche casualty focused risks, while growing both non risk fee income and investment income ⚫ Our largest bus
Slide 6: Second Quarter Review
Second Quarter Review ⚫ Continued strong growth in our core E&S unit (18% GWP vs QTD Q2 2019), which has doubled in size over the past two years o 84% E&S segment combined ratio during Q2 2020 o Obtained a 20% renewal rate increase during the quarter, the 14th consecutive quarter of rate increases,
Slide 7: Focus on Attractive Part of P&C Market
Focus on Attractive Part of P&C Market • We are a specialty, low volatility underwriting company with a proven history of generating consistent profits • Our focus has been to significantly grow our two primary businesses given the attractive opportunities to put capital to work • Our key area of fo
Slide 8: Our Business
Our Business Specialty Admitted Casualty Reinsurance E&S Segment Segment Segment • Represents 55% of group-wide gross • Specialty admitted insurance • Third-party proportional and written premium year to date and is coverages in the US, including a working-layer excess casualty underwritten by speci
Slide 9: Targeted Growth in Gross Written Premium
Targeted Growth in Gross Written Premium Growth driven by strong renewal pricing and submission growth in core E&S and expansion of our fee based fronting business ($ in Millions) E&S Segment Specialty Admitted Segment Casualty Reinsurance Segment $600 $18.0 $922 $15.8 $235 $14.8 $16.0 $14.0 $184 $1
Slide 10: Our Specialty Market History
Our Specialty Market History We have a long history of success in building niche businesses and generating top tier returns for investors On pace to write more than $200 million of specialty James River YE 2019 Adam Abram and premiums in the calendar James River James River successfully a group of y
Slide 11: E&S Focus | Profitable, Niche Specialty Underwriting
E&S Focus | Profitable, Niche Specialty Underwriting Profitability of E&S vs. Total P&C Industry • Our business is heavily concentrated in E&S Casualty (93% of 2019 NWP; generated by Avg. Combined Ratios 2000–2018 both the E&S and Casualty Reinsurance Difference of segments). 5 percentage points • C
Slide 12: Broad Risk Appetite Permits Us to 'Pick Our Spots'
$656.5 Broad Risk Appetite Permits Us to ‘Pick Our Spots’ Our high caliber underwriting team, and use of proprietary technology, provide significant expertise to price our increased submission flow of highly underwritten risks • During the second quarter of 2020, renewal rates increased 20% across o
Slide 13: Demonstrated Underwriting Discipline
Demonstrated Underwriting Discipline We have proven our willingness to expand and contract when market conditions dictate, and have a strong track record of profitable underwriting in our Core E&S business Core E&S – GWP Growth vs. Total E&S Industry 40.0% 21.1 21.3 GWP Growth (%) 20.0% 12.8 22.1 8.
Slide 14: Traditional Investment Approach Augmented by Higher Yielding Alternatives
Traditional Investment Approach Augmented by Higher Yielding Alternatives Investment Portfolio (as of June 30, 2020) Commentary 2% 9% Fixed Maturity Securities • Our investment portfolio consists of 4% investment grade fixed maturity securities, Equity Securities 76% selectively supplemented by non-
Slide 15: Capital Management Maximizes Shareholder Value
Capital Management Maximizes Shareholder Value Capital Management History $1,150 • Current focus on growing book value given the $1,039 Dividends and Share Repurchases ($ mm) $1,050 $1,003 attractive opportunities to put capital to work in our Tangible Equity Plus Cumulative $950 $897 core E&S busin
Slide 16: Comparative Market Highlights
Comparative Market Highlights
Slide 17: Our Current Valuation Supports Meaningful Upside
Our Current Valuation Supports Meaningful Upside P/TBV vs Operating ROTE1 Price/Next Twelve Month Consensus Earnings 10.0x 50.0x KNSL 9.0x 45.0x 8.0x 40.0x Price to Next 12 Mths EPS 7.0x 35.0x Median = 28.1x 6.0x Price to TBV 30.0x 5.0x 25.0x 4.0x RLI 20.0x 3.0x 15.0x MKL 2.0x AMSF JRVR 10.0x WRB 1.
Slide 18: Appendix
Appendix
Slide 19: James River Group Key Metrics
James River Group Key Metrics ⚫ Exchange/Ticker NASDAQ / “JRVR” ⚫ Initial Public Offering $21.00 (December 12, 2014) ⚫ Current Share Price $46.36 (Closing Price August 3, 2020) ⚫ Market Capitalization $1.415 billion (August 3, 2020 market close) ⚫ LTM Dividend / Yield $1.20 per share = 2.6% yield1 ⚫
Slide 20: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Non-GAAP Reconciliation Underwriting Profit (Loss) YTD Q2 YTD Q2 ($mm) 2016 2017 2018 2019 2019 2020 Underwriting profit (loss) of the operating segments: Excess and Surplus Lines $ 47.2 $ 29.7 $ 42.8 $ 19.2 $ 28.9 $ 24.2 Specialty Admitted Insurance 2.9 3.2 7.0 5.9
Slide 21: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Non-GAAP Reconciliation ($mm) YTD Q2 YTD Q2 Adj. Net Operating Income 2016 2017 2018 2019 2019 2020 Income (loss) as reported $ 74.5 $ 43.6 $ 63.8 $ 38.3 $ 43.0 $ (1.2) Net realized inv. (gains) losses (5.2) 1.4 4.4 3.8 (1.7) 32.5 Initial public offering costs - - -
Slide 22: InvestorRelations@jrgh.net
InvestorRelations@jrgh.net
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