James River Group Holdings, Inc. · NASDAQ:JRVR
James River — Q2 2021 Earnings Presentation
27 slides from James River's earnings presentation, Aug 9, 2021
Slide 1: Investor Presentation Second Quarter 2021
Investor Presentation Second Quarter 2021
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: Executive Summary
Executive Summary
Slide 4: Overview of James River
4 Overview of James River x Renew our unrelenting focus on underwriting profitability x Generate superior underwriting margins from our niche casualty focused risk, while growing both non - risk bearing fee income and investment income x Continue to focus on the small and middle market, where we hav
Slide 5: Second Quarter 2021 Review
Second Quarter 2021 Review Strong results across the Group underlie the resiliency of the organization and strength and depth of relationships with distribution partners . Net Income of $ 20 . 8 million - ( $ 0 . 60 per diluted share) and Adjusted Net Operating Income of $ 18 . 8 million - ( $ 0
Slide 6: Commercial Auto Overview: Claims and Reserves Statistics
6 Commercial Auto Overview: Claims and Reserves Statistics ~7,000 Current Open Claims Closing ~75 - 100 Claims Per Week Closed >400K Claims ~$55K Average Reserve Per Open Claim Meaningfully Higher Than $43K Average Net Paid Per Open Claim Infrequent Newly Reported Claims in Runoff Portfolio; No Acci
Slide 7: Capital Position
7 Capital Position (1) Leverage ratio, in accordance with the Company’s credit agreements, is calculated as adjusted consolidated debt / total capit al. Adjusted consolidated debt treats hybrid securities as equity capital up to 15% of total capitalization. Total capital is defined as total debt plu
Slide 8: Our Business
8 Our Business E&S Segment Specialty Admitted Segment Casualty Reinsurance Segment • Focus is on small and medium sized commercial account E&S casualty business: generally $1.0M per occurrence limits; ~$21,000 avg. premium per account; significant strength in current market • “Core E&S” excludes com
Slide 9: Attractive Growth Businesses
$189.9 $218.1 $234.9 $260.8 $282.2 $334.4 $516.8 $669.1 $20.6 $59.4 $91.0 $182.2 $316.4 $374.3 $387.6 $408.7 2013 2014 2015 2016 2017 2018 2019 2020 Core E&S Specialty Admitted Commercial Auto Casualty Re 9 Attractive Growth Businesses • Already hard E&S market poised for continued profitable growth
Slide 10: What is Driving Growth in the E&S Market?
10 What is Driving Growth in the E&S Market? The E&S market began experiencing rate hardening in late 2018/early 2019 and the hardening significantly accelerated in 2020 driven by the Global Pandemic. Admitted market casualty pricing has not been keeping up with loss cost inflation for years. Admitt
Slide 11: Building a Best-in-Class Core E&S Business
11 Building a Best - in - Class Core E&S Business Core E&S Initial and Developed Accident Year Loss Ratios Core E&S Calendar Year Loss Ratio vs. Surplus Line Specialists Peer Group (1) AYs have developed favorably by over 8 points on average since 2013 Specialist Peer Group 2007 – 2020 Average Loss
Slide 12: Specialty Admitted Segment: Growth in Fronted Programs
Specialty Admitted Segment: Growth in Process 12 Fronted Programs GWP ($M) Fee Income ($M) • Fronting business continues to experience meaningful growth as recently added programs mature and expand • Eight new programs added since Q2 2020 will continue to ramp through 2021 • Capital light, deal - dr
Slide 13: We Represent a Unique Investment Opportunity
0% 26% 30% 31% 34% 59% 100% 13 We Represent a Unique Investment Opportunity Source: S&P Global Market Intelligence (and its affiliates, as applicable), SEC filings. (1) Weather related catastrophe losses only. Excludes catastrophe losses from COVID - 19 for those companies who categorize COVID - 19
Slide 14: Our Valuation Supports Meaningful Upside
Our Valuation Supports Meaningful Upside JRVR Historical Discount to Peers (2) We have historically traded at a discount to peers based on a regression analysis Source: SNL Financial; market data and analyst estimates as of July 27, 2021 (1) Mean analyst consensus operating earnings per share for th
Slide 15: Appendix
Appendix
Slide 16: Broad Risk Appetite Permits Us to 'Pick Our Spots'
Broad Risk Appetite Permits Us to ‘Pick Our Spots’ 16 Our high caliber underwriting team, and use of proprietary technology, provide significant expertise to price our increased submission flow of skillfully underwritten risks • During the second quarter of 2021 , renewal rates increased 18 . 1 % ac
Slide 17: The E&S Market is Highly Attractive
$23.0 $25.4 $27.3 $28.9 $29.8 $29.9 $31.5 $34.6 $40.3 $47.6 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 17 73% 88% 71% 75% 74% 83% 100% 94% 87% 95% 108% 103% 96% 97% 98% 101% 104% 99% 99% 99% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 E&S Industry Combined Ratio P&C Industry Combined Ra
Slide 18: Appendix: Q1 2021 Earnings
Appendix: Q1 2021 Earnings
Slide 19: Consolidated Performance
19 Consolidated Performance (1) Includes gains of $1.4M and $2.3M for the change in net unrealized gains/losses on equity securities and bank loan participat ion s in the three months ended June 30, 2021, respectively ($4.0M and $26.6M in the three months ended June 30, 2020, respectively). Commenta
Slide 20: E&S Segment Performance
20 E&S Segment Performance Commentary • 15% growth in Core E&S GWP • Rate and submission volume remain strong • Ten out of twelve core underwriting divisions grew • Due to continued stronger relative growth in our Excess Casualty underwriting division, where we cede a larger portion of risk as compa
Slide 21: Specialty Admitted Performance
21 Specialty Admitted Performance Commentary • 59% growth in fronting GWP, contributing to 46% growth for Specialty Admitted segment. • Fronting business and fee income continue to scale meaningfully, as recently added programs continue to mature and expand. • Excluding a one - time catch up in fee
Slide 22: Casualty Reinsurance Performance
Casualty Reinsurance Performance Commentary • GWP and NWP increased primarily due to growth in existing treaties and underlying rate increases of approximately 16% • $5.0M of net unfavorable development in both quarters, substantially from treaties no longer written 22 ($ in M) Change 2Q20 2Q21 (%)
Slide 23: Investment Portfolio
Investment Portfolio Commentary • The decrease in net investment income was principally caused by lower investment income from restricted cash due to a decline in short term investment yields, and lower investment income from our bank loan portfolio resulting from a smaller portfolio and lower inves
Slide 24: Appendix: Non-GAAP Reconciliation
Appendix: Non - GAAP Reconciliation
Slide 25: Non-GAAP Measures Reconciliation
Non - GAAP Measures Reconciliation 25 Source: Company filings. Note: All amounts are for the year ended December 31 for each period indicated, except YTD Q2 2020 and YTD Q2 2021 which are for the six months ended June 30. Non-GAAP Reconciliation Underwriting Profit (Loss) YTD Q2 YTD Q2 ($mm) 2017 20
Slide 26: Non-GAAP Measures Reconciliation
Non - GAAP Measures Reconciliation 26 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 or for the year ended December 31 for each period indicated, except YTD Q2 2020 and YTD Q2 2021 which are f
Slide 27: InvestorRelations@jrgh.net
InvestorRelations@jrgh.net
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