James River Group Holdings, Inc. · NASDAQ:JRVR
James River — Q4 2022 Earnings Presentation
25 slides from James River's earnings presentation, Feb 28, 2023
Slide 1: Investor Presentation Fourth Quarter 2022
Investor Presentation Fourth Quarter 2022
Slide 2: Disclosure: Forward-Looking Statements
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, should, int
Slide 3: Executive Summary
Executive Summary
Slide 4: Overview of James River
Overview of James River We seek to deliver a consistent, top tier return on tangible common equity and generate sector leading value creation for shareholders ✓ Unique franchise predominantly focused on the Excess and Surplus lines market and fronting and program business ✓ Actively repositioning th
Slide 5: Our Business
Our Business • We are a specialty, low volatility underwriting company with an attractive, sizeable Excess & Surplus (“E&S”) franchise and scaling “capital light” fronting business experiencing a robust market for property and casualty risk. • Little catastrophe or cyber underwriting exposure, and e
Slide 6: Attractive Growth Businesses
Attractive Growth Businesses • Attractive E&S market poised for expected continued profitable growth as industry competitors retrench, and new businesses are forced to find insurance coverage in the E&S market given their lack of insurance loss history. • Our primary businesses (Core E&S(1) and Spec
Slide 7: What is Driving Growth in the E&S Market?
What is Driving Growth in the E&S Market? The E&S market began experiencing rate hardening in late 2018 / early 2019 and the hardening significantly accelerated in 2020 driven by the Global Pandemic. Admitted market carriers have been tightening underwriting guidelines or non-renewing business, push
Slide 8: The E&S Market is Highly Attractive
The E&S Market is Highly Attractive U.S. Excess & Surplus Lines DWP ($BN) E&S industry DWP has grown at double digit rates the past 4 years driven by rising renewal rates and changes in risk appetite $62.9 2012 – 2017 Average Growth Rate: 5% $47.6 $40.3 $34.6 $29.8 $29.9 $31.5 $27.3 $28.9 $25.4 2012
Slide 9: E&S: Broad Risk Appetite Permits Us to 'Pick Our Spots'
E&S: Broad Risk Appetite Permits Us to ‘Pick Our Spots’ Our high caliber underwriting team, and use of technology, provide significant expertise to price our flow of skillfully underwritten risks • 13 separate underwriting divisions focused on growth in very attractive markets led by seasoned underw
Slide 10: Finding Profitable Growth Opportunities
Finding Profitable Growth Opportunities Attractive underwriting conditions have allowed for meaningful growth in our Core E&S book at highly profitable margins Achieving meaningful scale at highly attractive rates – disciplined Highly profitable Core E&S underwriting margins, poised to benefit under
Slide 11: Specialty Admitted: Growth With Limited Risk Retention
Specialty Admitted: Growth With Limited Risk Retention Fronting business continues to experience meaningful growth as recently added programs mature and expand • Capital light, deal-driven business with limited risk retention. • Lower risk fee-income business complements our highly profitable Core E
Slide 12: We Represent a Unique Investment Opportunity
We Represent a Unique Investment Opportunity 2022 Cat Losses % of Loss Ratio (1) Our focus on low volatility, niche casualty E&S business and prudent reinsurance purchasing results in little catastrophe exposure, differentiating us from specialty peers 4.5% 3.4% 2.2% 2.5% 1.1% 0.7% 0.0% 2021 E&S DWP
Slide 13: Capital Position
Capital Position Our balance sheet enables us to continue to capitalize on an extremely attractive P&C market Balance Sheet as of: Commentary 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 Assets • Completed issuance of Series A preferred Total Invested Assets $2,130.5 $2,125.0 $2,038.0 $2,176.0 $2,192.3 s
Slide 14: Investment Portfolio
Investment Portfolio The Company holds a conservative portfolio given its focus on underwriting risk Investment Portfolio as of December 31, 2022 Commentary • Balanced portfolio focused on high quality fixed maturities, Total Cash and Investments (excluding restricted cash): $2,365 MM with small all
Slide 15: Key Investment Highlights
Key Investment Highlights • Proven market leader with a focus on the small and middle LargeMarket and Expanding Leading E&S Carrier market; one of the highest E&S concentrations with minimal Addressable Market property catastrophe exposure Capitalizing onAddressable a ‘once in a • Robust E&S market
Slide 16: Appendix: 4Q 2022 Earnings
Appendix: 4Q 2022 Earnings
Slide 17: Consolidated Performance
Consolidated Performance $ in millions, except per share figures % Commentary 4Q21 4Q22 Change Key Income Statement Items • Gross written premium decreased 7%, as 11% Gross Written Premium $407.3 $378.4 (7.1)% growth in E&S and 2% growth in Specialty Admitted Net Written Premium 218.0 187.7 (13.9)%
Slide 18: E&S Segment Performance
E&S Segment Performance $ in millions % Commentary 4Q21 4Q22 Change Key Segment Results • Gross written premium increased 11% from the Gross Written Premium $220.6 $245.5 11.3% prior year quarter, primarily due to broad based Net Written Premium 129.8 156.4 20.5% growth in 9 of 13 underwriting divis
Slide 19: Specialty Admitted Segment Performance
Specialty Admitted Segment Performance $ in millions % Commentary 4Q21 4Q22 Change Key Segment Results • Gross written premium increased 2%, reflecting Gross Written Premium $114.2 $116.1 1.7% an 8% reduction in workers’ compensation while Net Written Premium 17.9 18.9 5.7% the remaining segment pre
Slide 20: Casualty Reinsurance Segment Performance
Casualty Reinsurance Segment Performance $ in millions % Commentary 4Q21 4Q22 Change Key Segment Results • Gross written premium declined significantly Gross Written Premium $72.5 $16.8 (76.8)% compared to the prior year quarter primarily Net Written Premium 70.3 12.5 (82.3)% driven by the non-renew
Slide 21: Appendix: Underwriting Performance Ratios & Non-GAAP Reconciliation
Appendix: Underwriting Performance Ratios & Non-GAAP Reconciliation
Slide 22: Underwriting Performance Ratios
Underwriting Performance Ratios Underwriting Performance Ratios 2021 2022 4Q21 4Q22 Excess and Surplus Lines Loss Ratio 106.2% 65.9% 65.2% 65.1% Impact of Retroactive Reinsurance 0.0% 2.8% 0.0% (3.4)% Loss Ratio Including Impact of Retroactive Reinsurance 106.2% 68.7% 65.2% 61.7% Combined Ratio 125.
Slide 23: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation 12 Months Ended December 31, Underwriting Profit (Loss) 2019 2020 2021 2022 4Q21 4Q22 Underwriting Profit (Loss) of the Operating Segments: Excess and Surplus Lines $19.2 $9.8 ($121.5) $83.1 $24.1 $22.9 Specialty Admitted Insurance 5.9 4.2 9.7 4.2 3.2 2.5 Casualty Re
Slide 24: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation 12 Months Ended December 31, Tangible Equity & Tangible Common Equity 2019 2020 2021 2022 Shareholders’ Equity $778.6 $795.6 $725.4 $553.8 Plus: Series A Redeemable Preferred Shares - - - 144.9 Plus: Deferred Reinsurance Gain - - - 20.1 Less: Goodwill and Intangible
Slide 25: InvestorRelations@jrgh.net
InvestorRelations@jrgh.net
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