James River Group Holdings, Inc. · NASDAQ:JRVR
James River — Q2 2023 Earnings Presentation
25 slides from James River's earnings presentation, Aug 8, 2023
Slide 1: Investor Presentation Second Quarter 2023
Investor Presentation Second Quarter 2023
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 profitable growth in the Excess and Surplus lines market, which is experiencing very robust condi
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. • We have little property catastrophe or cyber underwritin
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 5 years driven by rising $75.5 renewal rates and changes in risk appetite 2013 – 2017 Average Growth Rate: 4% $62.9 $47.6 $40.3 $34.6 $29.8 $29.9 $31.5 $27.3 $28.9 2013
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: Maintaining Underwriting Discipline
Specialty Admitted: Maintaining Underwriting Discipline Fronting business continues to experience stable growth and have an active pipeline of opportunities • Fronting business is a capital light, deal-driven business with limited risk retention. • Lower risk fee-income complements our highly profit
Slide 12: We Represent a Unique Investment Opportunity
We Represent a Unique Investment Opportunity LTM 2Q 2023 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 5.3% 3.2% 2.3% 2.6% 0.6% 0.6% 0.0% 2022
Slide 13: Capital Position
Capital Position Our strong balance sheet enables us to continue to capitalize on an extremely attractive P&C market Balance Sheet as of: 2Q 2022 3Q 2022 4Q 2022 1Q23 2Q23 Commentary Assets • Balance sheet characterized by low financial Total Invested Assets $2,038.0 $2,176.0 $2,192.3 $2,213.9 $2,18
Slide 14: Investment Portfolio
Investment Portfolio The Company holds a conservative portfolio given its focus on underwriting risk Investment Portfolio as of June 30, 2023 Commentary • Balanced portfolio focused on high quality fixed maturities, and a small Total Cash and Investments (excluding restricted cash): $2,414 MM alloca
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: 2Q 2023 Earnings
Appendix: 2Q 2023 Earnings
Slide 17: Consolidated Performance
Consolidated Performance $ in millions, except per share figures % Commentary 2Q22 2Q23 Change Key Income Statement Items • Gross written premium increased 7%, with 9% Gross Written Premium $399.7 $427.7 7.0% growth in Core E&S and 10% growth in Specialty Net Written Premium 194.7 218.2 12.1% Admitt
Slide 18: E&S Segment Performance
E&S Segment Performance $ in millions % Commentary 2Q22 2Q23 Change Key Segment Results • Gross written premium increased 7% from the prior Gross Written Premium $266.6 $286.1 7.3% year quarter, with 9% growth in Core E&S Net Written Premium 166.0 184.8 11.3% (excluding commercial auto). The segment
Slide 19: Specialty Admitted Segment Performance
Specialty Admitted Segment Performance $ in millions % Commentary 2Q22 2Q23 Change Key Segment Results • Gross written premium increased 9.6%, reflecting Gross Written Premium $125.0 $136.9 9.6% 11.0% growth in fronting and programs, partially Net Written Premium 18.4 29.1 58.3% offset by a 3.9% dec
Slide 20: Casualty Reinsurance Segment Performance
Casualty Reinsurance Segment Performance $ in millions % Commentary 2Q22 2Q23 Change Key Segment Results • Gross written premium declined significantly Gross Written Premium $8.1 $4.7 (42.2)% compared to the prior year quarter as we Net Written Premium 10.3 4.3 (58.3)% suspended writing new business
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 2Q22 2Q23 Excess and Surplus Lines Loss Ratio 106.2% 65.9% 64.7% 66.1% Impact of Retroactive Reinsurance 0.0% 2.8% 0.0% (1.4)% Loss Ratio Including Impact of Retroactive Reinsurance 106.2% 68.7% 64.7% 64.7% Combined Ratio 125.
Slide 23: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation 12 Months Ended December 31, Underwriting (Loss) Profit 2019 2020 2021 2022 2Q22 2Q23 Underwriting (Loss) Profit of the Operating Segments: Excess and Surplus Lines $19.2 $9.8 ($121.5) $83.1 $22.3 $19.4 Specialty Admitted Insurance 5.9 4.2 9.7 4.2 1.3 0.4 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 2Q22 2Q23 Shareholders’ Equity $778.6 $795.6 $725.4 $553.8 $594.4 $595.9 Plus: Series A Redeemable Preferred Shares - - - 144.9 144.9 144.9 Plus: Deferred Reinsurance Gain - - -
Slide 25: Investors@jrvrgroup.com
Ss JAMES RIVER GROUP HOLDINGS, LTD: Investors@jrvrgroup.com
James River Group Holdings — Q2 2023 Earnings Presentation on 6ix