James River Group Holdings, Inc. · NASDAQ:JRVR
James River — IPO Roadshow (May 2021)
31 slides from James River's IPO roadshow presentation, May 5, 2021
Slide 1: Investor Presentation May 2021
Investor Presentation May 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: Offering Summary
4 Offering Summary Issuer Exchange / Ticker Base Offering Size Composition Overallotment Option Use of Proceeds Lock - Up Active Bookrunners James River Group Holdings, Ltd. NASDAQ / JRVR $175.0M 100% Primary 15% of Base Offering Size (100% Primary) General corporate purposes 60 day lock - up for Co
Slide 5: Transaction Overview
5 Transaction Overview Overview • $175.0M common equity offering • In Q1 2021 we reported a net loss of $103.5 million including $170.0 million of adverse development entirely related to a previously canceled commercial auto account in runoff since 2019 Rationale • Backs strong actions taken to elim
Slide 6: Overview of James River
6 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 7: First Quarter 2021 Review
First Quarter 2021 Review Strong quarterly rate of growth in Core E&S ( 1 ) ( 36 % GWP vs Q 1 2020 ) o Core E&S GWP has doubled in size over past two years o Obtained a 15 % renewal rate increase during the quarter, the 17 th consecutive quarter of rate increases, representing a compound aggregate r
Slide 8: Commercial Auto Overview: Timeline
8 Commercial Auto Overview: Timeline • Recorded $170.0M in adverse development related to terminated commercial auto account • Meaningful change in actuarial methodologies using experience development methods only, giving more weight to incurred data • Surge in paid and incurred losses in Q4 2020 an
Slide 9: Commercial Auto Overview: Claims and Reserves Statistics
9 Commercial Auto Overview: Claims and Reserves Statistics ~8,000 Current Open Claims Closing ~100 Claims Per Week Closed >400K Claims Over $55K Average Reserve Per Open Claim Meaningfully H igher Than $ 39K N et P aid P er O pen C laim S ince 1/1/21 Infrequent Newly Reported Claims in Runoff Portfo
Slide 10: Capital Position
10 Capital Position (1) Assumes net proceeds on a $175.0M primary common equity raise at $47.11 (JRVR’s closing price on 4/30/2021). (2) Leverage ratio, in accordance with the Company’s credit agreements, is calculated as adjusted consolidated debt / total capital. Adjusted consolidated debt treats
Slide 11: Our Business
11 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 co
Slide 12: 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 $408.7 2013 2014 2015 2016 2017 2018 2019 2020 Core E&S Specialty Admitted Commercial Auto Casualty Re 12 Attractive Growth Businesses • Already hard E&S market poised for continued profitable growt
Slide 13: What is Driving Growth in the E&S Market?
13 What is Driving Growth in the E&S Market? The E&S market began experiencing rate hardening in late 2018/early 2019 and the hardening significantly accelerated in 2020 driven by the Global Pandemic. Admitted market casualty pricing has not been keeping up with loss cost inflation for years. Admitt
Slide 14: Building a Best-in-Class Core E&S Business
14 Building a Best - in - Class Core E&S Business Core E&S Initial and Developed Accident Year Loss Ratios Core E&S Calendar Year Loss Ratio vs. Surplus Line Specialists Peer Group (1 ) AYs have developed favorably by over 8 points on average since 2013 Specialist Peer Group 2007 – 2020 Average Loss
Slide 15: Specialty Admitted Segment: Growth in Process
Specialty Admitted Segment: Growth in Process 15 Fronted Programs GWP ($M) Fee Income ($M) • Fronting business continues to experience meaningful growth as recently added programs mature and expand • Eight new programs added Q2 - Q4 2020 will continue to ramp through 2021 • Capital light, deal - dri
Slide 16: We Represent a Unique Investment Opportunity
0% 26% 30% 31% 34% 59% 100% 16 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 17: 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 ARGO MKL WRB AMSF JRVR RLI KNSL 0.00x 1.00x 2.00x 3.00x 4.00x 5.00x 6.00x 7.00x 8.00x 7% 12% 17% 22% Price to TBV 2022 Consensus ROTE Sourc
Slide 18: Appendix
Appendix
Slide 19: Broad Risk Appetite Permits Us to 'Pick Our Spots'
Broad Risk Appetite Permits Us to ‘Pick Our Spots’ 19 Our high caliber underwriting team, and use of proprietary technology, provide significant expertise to price our increased submission flow of highly underwritten risks • During the first quarter of 2021 , renewal rates increased 15 % across our
Slide 20: Financial Strength Rating
$150 $168 $192 $209 $276 $322 $440 $596 $705 $900 $1,074 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Financial Strength Rating • Our A.M. Best Financial Strength Rating of “A” is on negative outlook (1) • We operated with an “A - ” financial strength rating from our inception in September
Slide 21: 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 $47.6 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 21 73% 88% 71% 75% 74% 83% 100% 94% 87% 95% 108% 103% 96% 97% 98% 101% 104% 99% 99% 99% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 E&S Industry Combined Ratio P&C Industry Combined Ra
Slide 22: Appendix: Q1 2021 Earnings
Appendix: Q1 2021 Earnings
Slide 23: Q1 2021 Consolidated Results
($ in M, except per share amounts) Change 1Q20 1Q21 (%) Income (Loss), as Reported ($36.8) ($103.5) N/M Net Realized and Unrealized Losses (Gains) on Investments (1) 52.2 (5.8) N/M Other Expenses 0.0 0.4 N/A Adjusted Net Operating Income 15.4 (108.8) N/M (Loss) Earnings Per Share Basic ($1.21) ($3.3
Slide 24: E&S Segment Performance
($ in M) Change 1Q20 1Q21 (%) Gross Written Premiums $136.2 $181.4 33% Net Written Premiums 92.2 108.4 18% Net Earned Premiums 99.7 113.7 14% Losses and Loss Adjustment Expenses (65.5) (241.7) N/M Underwriting Expenses (26.1) (22.9) (12%) Underwriting Profit (1) 8.1 (150.9) N/M Gross Fee Income 1.3
Slide 25: Specialty Admitted Performance
($ in M) Change 1Q20 1Q21 (%) Gross Written Premiums $102.8 $127.0 24% Net Written Premiums 13.4 22.0 65% Net Earned Premiums 13.3 16.4 23% Losses and Loss Adjustment Expenses (9.9) (10.7) 8% Underwriting Expenses (4.4) (4.3) (0%) Underwriting Profit (1) (1.0) 1.3 N/M Gross Fee Income 4.2 5.1 22% Ra
Slide 26: Casualty Reinsurance Performance
($ in M) Change 1Q20 1Q21 (%) Gross Written Premiums $44.8 $64.9 45% Net Written Premiums 29.1 44.2 52% Net Earned Premiums 32.9 30.5 (7%) Losses and Loss Adjustment Expenses (21.4) (21.0) (2%) Underwriting Expenses (11.3) (11.1) (1%) Underwriting Profit 0.2 (1.6) N/M Ratios Accident Year Loss Ratio
Slide 27: Investment Portfolio
($ in M) Change 1Q20 1Q21 (%) Renewable Energy Investments $1.0 ($0.7) N/M Other Private Investments (0.5) 1.0 N/M All Other Net Investment Income 20.3 14.8 (27%) Total Net Investment Income 20.8 15.1 (28%) 77% 4% 7% 2% 2% 8% Fixed Maturity Securities Equity Securities Bank Loans Short-Term Investme
Slide 28: Appendix: Non-GAAP Reconciliation
Appendix: Non - GAAP Reconciliation
Slide 29: Non-GAAP Measures Reconciliation
Non - GAAP Measures Reconciliation 29 Source: Company filings. Note: All amounts are for the year ended December 31 for each period indicated, except Q1 2020 and Q1 2021 which are for the quarter ended March 31. Non-GAAP Reconciliation Underwriting Profit (Loss) Q1 Q1 ($mm) 2017 2020 2020 2021 Under
Slide 30: Non-GAAP Measures Reconciliation
Non - GAAP Measures Reconciliation 30 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 Q1 2020 and Q1 2021 which are as of or
Slide 31: InvestorRelations@jrgh.net
InvestorRelations@jrgh.net