James River Group Holdings, Inc. · NASDAQ:JRVR
James River — Q1 2020 Earnings Presentation
23 slides from James River's earnings presentation, May 7, 2020
Slide 1: First Quarter 2020 Investor Presentation
First Quarter 2020 Investor Presentation
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, inte
Slide 3: Table of Contents
Franchise Overview Slide 4 Comparative Market Highlights Slide 16 Appendix Slide 19 Table of Contents 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 busines
Slide 6: First Quarter Review
First Quarter Review Continued strong growth in our core E&S unit ( 37 % GWP vs Q 1 2019 ) o Obtained a 12 . 9 % renewal rate increase during the quarter, the 13 th consecutive quarter of rate increases, which positions the Company well for attractive risk adjusted returns o Submission flow increase
Slide 7: Focus on Attractive Part of P&C Market
Focus on Attractive Part of P&C Market 7 Q1 2019 Premiums Q1 2020 Premiums • 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
Slide 8: Our Business
8 Our Business E&S Segment Specialty Admitted Segment Casualty Reinsurance Segment • Represents 48% of group - wide gross written premium year to date and is underwritten by specialists in 13 divisions utilizing our eighteen years of expertise in writing hard to place risks • Significant strength in
Slide 9: Targeted Growth in Gross Written Premium
9 Growth driven by strong renewal pricing and submission growth in core E&S and expansion of our fee based fronting business E&S Segment Specialty Admitted Segment Casualty Reinsurance Segment ($ in Millions) E&S Segment Specialty Admitted Segment Casualty Reinsurance Segment PROFITABLE SPECIALTY UN
Slide 10: Company history and milestones
Adam Abram and a group of investors purchase Front Royal, Inc., for $3 million • James River Group, Inc. is formed with $58 million of capital and a single insurance subsidiary, James River Insurance Company, an E&S underwriter • Stonewood Insurance Company is formed in Raleigh, NC to write highly i
Slide 11: E&S Focus | Profitable, Niche Specialty Underwriting
11 E&S Focus | Profitable, Niche Specialty Underwriting Profitability of E&S vs. Total P&C Industry E&S Gaining Share of P&C Insurance Market Core E&S GWP grew by 55% during 2019, and increased 37% in Q1 2020 over Q1 2019 as rates increased 12.9% during the quarter Avg. Combined Ratios 2000 – 2018 D
Slide 12: Broad Risk Appetite Permits Us to 'Pick Our Spots'
Broad Risk Appetite Permits Us to ‘Pick Our Spots’ 12 Our high caliber underwriting team, and use of proprietary technology, provide significant expertise to price our increased submission flow of highly underwritten risks • During Q 1 2020 , rates increased 12 . 9 % across our core (non - commercia
Slide 13: Demonstrated Underwriting Discipline
Demonstrated Underwriting Discipline Source: Company filings, A.M. Best data and research, and S&P Global Market Intelligence (and its affiliates, as applicable) * Specialists Peer Group = Alleghany Insurance Holdings Group, Argo Group, Crum & Forster Insurance Group, Global Indemnity Group, HIIG Gr
Slide 14: Traditional Investment Approach Augmented by Higher Yielding Alternatives
14 Traditional Investment Approach Augmented by Higher Yielding Alternatives Total Cash and Investments (excluding restricted cash): $2,255MM Duration: Investment Portfolio (as of March 31, 2020) Net Investment Yield • Our investment portfolio consists of investment grade fixed maturity securities,
Slide 15: Capital Management Maximizes Shareholder Value
Capital Management Maximizes Shareholder Value 15 Capital Management History • Current focus on growing book value given the attractive opportunities to put capital to work in our core E&S business • Efficient in returning capital to shareholders when market conditions warrant; $453 million of capit
Slide 16: Comparative Market Highlights
Comparative Market Highlights
Slide 17: Consistent Top Tier Returns
17 Consistent Top Tier Returns Best in class risk reward generated with low volatility, sector - leading returns Source: data Copyright © 2020, S&P Global Market Intelligence (and its affiliates, as applicable). Data as of April 30, 2020 . Operating ROATE calculated as trailing twelve month operatin
Slide 18: Our Current Valuation Supports Meaningful Upside
Our Current Valuation Supports Meaningful Upside 18 P/TBV vs Operating ROTE 1 Price/Next Twelve Month Consensus Earnings Source: data Copyright © 2020, S&P Global Market Intelligence (and its affiliates, as applicable). Data as of April 30, 2020. 1 Analyst consensus operating earnings per share for
Slide 19: Appendix
Appendix
Slide 20: James River Group Key Metrics
James River Group Key Metrics 20 Exchange/Ticker NASDAQ / “JRVR” Initial Public Offering $21.00 (December 12, 2014) Current Share Price $35.48 (Closing Price April 30, 2020) Market Capitalization $1.083 billion (April 30, 2020 market close) LTM Dividend / Yield $1.20 per share = 3.4% yield 1 Gross W
Slide 21: Non-GAAP Measures Reconciliation
Non - GAAP Measures Reconciliation 21 Source: Company filings. Non-GAAP Reconciliation Underwriting Profit (Loss) Q1 Q1 ($mm) 2016 2017 2019 2020 Underwriting profit (loss) of the operating segments: Excess and Surplus Lines 47.2$ 29.7$ 42.8$ 19.2$ 13.1$ 8.1$ Specialty Admitted Insurance 2.9 3.2 7.0
Slide 22: Non-GAAP Measures Reconciliation
Non - GAAP Measures Reconciliation 22 Note: In the Tangible Equity Table, 2008 to 2013 shares outstanding are retroactively adjusted for 50/1 stock split. Addition all y, all amounts are as of December 31 for each period indicated, except Q1 2019 and Q1 2020 which are as of March 31. Source: Company
Slide 23: InvestorRelations@jrgh.net
InvestorRelations@jrgh.net
James River Group Holdings — Q1 2020 Earnings Presentation on 6ix