James River Group Holdings, Inc. · NASDAQ:JRVR
James River — Investor Presentation (September 2022)
24 slides from James River's investor presentation, Sep 1, 2022
Slide 1: Investor Presentation Second Quarter 2022
Investor Presentation Second 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, shou
Slide 3: Executive Summary
Executive Summary
Slide 4: Overview of James River
4 Overview of James River x Renew our unrelenting focus on underwriting profitability x We seek to generate superior margins from our niche casualty focused underwriting risks, while growing fee income in our fronting and program business x We intend to continue to focus on the small and middle mark
Slide 5: Our Business and Key Growth Opportunities
Our Business 5 • We are a specialty, low volatility underwriting company with an attractive, sizeable Excess & Surplus (“E&S”) franchise and s cal ing “capital light” fronting business experiencing an extremely robust market for property and casualty risk. • Little catastrophe or cyber exposure, and
Slide 6: Attractive Growth Businesses: Historical GWP
$190 $218 $235 $261 $282 $334 $517 $669 $799 $868 $21 $59 $91 $182 $316 $374 $388 $409 $492 $486 2013 2014 2015 2016 2017 2018 2019 2020 2021 2Q22 LTM Core E&S Specialty Admitted Commercial Auto Casualty Re 6 Attractive Growth Businesses Historical GWP ($M) (2) Quarterly Core E&S Renewal Rate Increa
Slide 7: What is Driving Growth in the E&S Market?
7 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,
Slide 8: The E&S Market is Highly Attractive
$25.4 $27.3 $28.9 $29.8 $29.9 $31.5 $34.6 $40.3 $47.6 $62.9 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 8 The E&S Market is Highly Attractive U.S. Excess & Surplus Lines DWP ($BN) Profitability of E&S Industry vs. Total P&C Industry: 10 Year Combined Ratio P&C Industry 2012 – 2021 Average Comb
Slide 9: E&S: Broad Risk Appetite Permits Us to 'Pick Our Spots'
E&S: Broad Risk Appetite Permits Us to ‘Pick Our Spots’ 9 • 13 separate underwriting divisions focused on growth in very attractive markets. • Renewal rates increased more than 13% in each of 2020 and 2021 across our E&S business, as well as 12% during the first six months of 2022. • The 14% renewal
Slide 10: Finding Profitable Growth Opportunities
Finding Profitable Growth Opportunities 10 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 underwriting culture Highly profitable Core E&S underwriting margins,
Slide 11: Specialty Admitted: Growth With Limited Risk Retention
Specialty Admitted: Growth With Limited Risk Retention 11 Fronted Programs GWP (1) Fee Income (1) Fronted programs premium represent 89% of the GWP of our Specialty Admitted Segment (1) Consistent and predictable stream of earnings $ in millions (1) Presented on an LTM basis as of the period indicat
Slide 12: We Represent a Unique Investment Opportunity
0% 27% 31% 33% 35% 59% 100% 0.7% 1.5% 1.8% 3.0% 4.2% 6.0% 8.7% 12 We Represent a Unique Investment Opportunity 2021 Cat Losses % of Loss Ratio (1) 2021 E&S DWP as a % of total GWP (2) Our focus on low volatility, niche casualty E&S business and prudent reinsurance purchasing results in little catast
Slide 13: Capital Position
13 Capital Position Commentary • Completed common equity raise in 2Q 2021 and issuance of Series A preferred shares in 1Q 2022, along with loss portfolio transfer transactions covering run off commercial auto and the majority of Casualty Reinsurance segment reserves. • Have reduced debt and financia
Slide 14: Investment Portfolio
Investment Portfolio 14 Commentary • Balanced portfolio focused on high quality fixed maturities, with small allocation to unique strategies to enhance returns. • Weighted average rating of A+ across the portfolio, similar to recent periods. • Total invested assets declined by 7% from the prior year
Slide 15: Key Investment Highlights
Key Investment Highlights 15 Significant valuation upside when compared to public trading multiples of E&S focused peers Large and Expanding Addressable Market Valuation Upside Potential Strengthened reserves as well as LPT transactions covering run off commercial auto and the majority of historical
Slide 16: Appendix: 2Q 2022 Earnings
Appendix: 2Q 2022 Earnings
Slide 17: Consolidated Performance
17 Consolidated Performance Commentary • 5% increase in gross written premium, with continued growth in E&S partially offset by an expected reduction in Casualty Re premium. • Net written and net earned premium growth was 1% and 8%, respectively, reflecting growth in gross premium over the trailing
Slide 18: E&S Segment Performance
18 E&S Segment Performance Commentary • Gross written premium growth of 25%, including double digit growth in ten of thirteen underwriting divisions. • Renewal rates increased 14.1% across the segment during the second quarter of 2022, which was the twenty - second consecutive quarter of renewal rat
Slide 19: Specialty Admitted Segment Performance
19 Specialty Admitted Segment Performance Commentary • Gross written premium declined 3%, reflecting a 17% reduction in individual risk workers’ compensation and a 2% decline in fronting and program premium. • Excluding a large workers’ compensation focused program, fronting and program premium incr
Slide 20: Casualty Reinsurance Segment Performance
20 Casualty Reinsurance Segment Performance Commentary • Gross written premium decreased 78% compared to the prior year quarter due to the non - renewal of several treaties and lower participation on certain ongoing treaties. • The segment gross written premiums are expected to be meaningfully downs
Slide 21: Appendix: Non-GAAP Reconciliation
Appendix: Non - GAAP Reconciliation
Slide 22: Non-GAAP Measures Reconciliation: Underwriting Profit (Loss)
Non - GAAP Measures Reconciliation 22 $ in millions Source: Company filings. Underwriting Profit (Loss) 2019 2020 2021 2Q21 2Q22 Underwriting profit (loss) of the operating segments: Excess and Surplus Lines $19.2 $9.8 ($121.5) $26.9 $22.3 Specialty Admitted Insurance 5.9 4.2 9.7 2.1 1.3 Casualty Re
Slide 23: Non-GAAP Measures Reconciliation: Adjusted Net Operating Income
Non - GAAP Measures Reconciliation 23 $ in millions Source: Company filings. Adjusted Net Operating (Loss) Income 2019 2020 2021 2Q21 2Q22 Income (loss) available to common shareholders $38.3 $4.8 ($172.8) $20.8 $5.0 Net realized and unrealized losses (gains) on investments 3.8 14.8 (13.3) (2.7) 15.
Slide 24: InvestorRelations@jrgh.net
InvestorRelations@jrgh.net
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