James River Group Holdings, Inc. · NASDAQ:JRVR
James River — Q3 2020 Earnings Presentation
22 slides from James River's earnings presentation, Nov 9, 2020
Slide 1: Third Quarter 2020 Investor Presentation
Third 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 18 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: Third Quarter Review
Third Quarter Review Continued strong growth in our core E&S unit ( 28 % GWP vs QTD Q 3 2019 ), which has doubled in size over the past two years o 85 % E&S segment combined ratio during Q 3 2020 o Obtained a 13 % renewal rate increase during the quarter, the 15 th consecutive quarter of rate increa
Slide 7: Focus on Attractive Part of P&C Market
Focus on Attractive Part of P&C Market 7 YTD September 30, 2019 Premiums YTD September 30, 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 at
Slide 8: Our Business
8 Our Business E&S Segment Specialty Admitted Segment Casualty Reinsurance Segment • Represents 56% 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 26% YTD September 30, 2020 over YTD September 30, 2019 as rates increased 16% during the first nine months
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 the third quarter of 2020 , renewal rates increased 13 % across our
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): $2,282MM Duration: Investment Portfolio (as of September 30, 2020) Net Investment Yield • Our investment portfolio consists of investment grade fixed maturity securiti
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; $471 million of capit
Slide 16: Comparative Market Highlights
Comparative Market Highlights
Slide 17: Our Current Valuation Supports Meaningful Upside
Our Current Valuation Supports Meaningful Upside 17 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 November 2, 2020. 1 Analyst consensus operating earnings per share fo
Slide 18: Appendix
Appendix
Slide 19: James River Group Key Metrics
James River Group Key Metrics 19 Exchange/Ticker NASDAQ / “JRVR” Initial Public Offering $21.00 (December 12, 2014) Current Share Price $47.87 (Closing Price November 2, 2020) Market Capitalization $1.463 billion (November 2, 2020 market close) LTM Dividend / Yield $1.20 per share = 2.5% yield 1 Gro
Slide 20: Non-GAAP Measures Reconciliation
Non - GAAP Measures Reconciliation 20 Source: Company filings. Note: All amounts are as of December 31 for each period indicated, except YTD Q3 2019 and YTD Q3 2020 which are as of September 30. Underwriting Profit (Loss) YTD Q3 YTD Q3 ($mm) 2016 2017 2019 2020 Underwriting profit (loss) of the oper
Slide 21: Non-GAAP Measures Reconciliation
Non - GAAP Measures Reconciliation 21 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 YTD Q3 2019 and YTD Q3 2020 which are as of September 30. Sou
Slide 22: InvestorRelations@jrgh.net
InvestorRelations@jrgh.net
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