James River Group Holdings, Inc. · NASDAQ:JRVR
James River — Investor Presentation (May 2021)
29 slides from James River's investor presentation, May 11, 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: 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: 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 6: Commercial Auto Overview: Timeline
6 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 7: Commercial Auto Overview: Claims and Reserves Statistics
7 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 Higher Than $39K Net Paid Per Open Claim Since 1/1/21 Infrequent Newly Reported Claims in Runoff Portfolio; No
Slide 8: Capital Position
8 Capital Position (1) Net proceeds on a $200M primary common equity raise at $31/ share. (2) 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
Slide 9: Our Business
9 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 10: 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 $408.7 2013 2014 2015 2016 2017 2018 2019 2020 Core E&S Specialty Admitted Commercial Auto Casualty Re 10 Attractive Growth Businesses • Already hard E&S market poised for continued profitable growt
Slide 11: What is Driving Growth in the E&S Market?
11 What is Driving Growth in the E&S Market? The E&S market began experiencing rate hardening in late 2018/early 2019 and the hardening significantly accelerated in 2020 driven by the Global Pandemic. Admitted market casualty pricing has not been keeping up with loss cost inflation for years. Admitt
Slide 12: Building a Best-in-Class Core E&S Business
12 Building a Best - in - Class Core E&S Business Core E&S Initial and Developed Accident Year Loss Ratios Core E&S Calendar Year Loss Ratio vs. Surplus Line Specialists Peer Group (1) AYs have developed favorably by over 8 points on average since 2013 Specialist Peer Group 2007 – 2020 Average Loss
Slide 13: Specialty Admitted Segment: Growth in Fronted Programs
Specialty Admitted Segment: Growth in Process 13 Fronted Programs GWP ($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 14: We Represent a Unique Investment Opportunity
0% 26% 30% 31% 34% 59% 100% 14 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 15: 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 16: Appendix
Appendix
Slide 17: Broad Risk Appetite Permits Us to 'Pick Our Spots'
Broad Risk Appetite Permits Us to ‘Pick Our Spots’ 17 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 18: 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 • As of May 7, 2021, our A.M. Best Financial Strength Rating is “A - ” • We operated with an “A - ” financial strength rating from our inception in September 2002
Slide 19: 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 $47.6 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 19 73% 88% 71% 75% 74% 83% 100% 94% 87% 95% 108% 103% 96% 97% 98% 101% 104% 99% 99% 99% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 E&S Industry Combined Ratio P&C Industry Combined Ra
Slide 20: Appendix: Q1 2021 Earnings
Appendix: Q1 2021 Earnings
Slide 21: Q1 2021 Consolidated Results
($ 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) ($3.3
Slide 22: E&S Segment Performance
($ in M) Change 1Q20 1Q21 (%) Gross Written Premiums $136.2 $181.4 33% Net Written Premiums 92.2 108.4 18% Net Earned Premiums 99.7 113.7 14% Losses and Loss Adjustment Expenses (65.5) (241.7) N/M Underwriting Expenses (26.1) (22.9) (12%) Underwriting Profit (1) 8.1 (150.9) N/M Gross Fee Income 1.3
Slide 23: Specialty Admitted Performance
($ in M) Change 1Q20 1Q21 (%) Gross Written Premiums $102.8 $127.0 24% Net Written Premiums 13.4 22.0 65% Net Earned Premiums 13.3 16.4 23% Losses and Loss Adjustment Expenses (9.9) (10.7) 8% Underwriting Expenses (4.4) (4.3) (0%) Underwriting Profit (1) (1.0) 1.3 N/M Gross Fee Income 4.2 5.1 22% Ra
Slide 24: Casualty Reinsurance Performance
($ in M) Change 1Q20 1Q21 (%) Gross Written Premiums $44.8 $64.9 45% Net Written Premiums 29.1 44.2 52% Net Earned Premiums 32.9 30.5 (7%) Losses and Loss Adjustment Expenses (21.4) (21.0) (2%) Underwriting Expenses (11.3) (11.1) (1%) Underwriting Profit 0.2 (1.6) N/M Ratios Accident Year Loss Ratio
Slide 25: Net Investment Income and Investment Portfolio
($ in M) Change 1Q20 1Q21 (%) Renewable Energy Investments $1.0 ($0.7) N/M Other Private Investments (0.5) 1.0 N/M All Other Net Investment Income 20.3 14.8 (27%) Total Net Investment Income 20.8 15.1 (28%) 77% 4% 7% 2% 2% 8% Fixed Maturity Securities Equity Securities Bank Loans Short-Term Investme
Slide 26: Appendix: Non-GAAP Reconciliation
Appendix: Non - GAAP Reconciliation
Slide 27: Non-GAAP Measures Reconciliation
Non - GAAP Measures Reconciliation 27 Source: Company filings. Note: All amounts are for the year ended December 31 for each period indicated, except Q1 2020 and Q1 2021 which are for the qua rter ended March 31. Non-GAAP Reconciliation Underwriting Profit (Loss) Q1 Q1 ($mm) 2017 2020 2020 2021 Unde
Slide 28: Non-GAAP Measures Reconciliation
Non - GAAP Measures Reconciliation 28 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 29: InvestorRelations@jrgh.net
InvestorRelations@jrgh.net
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