James River Group Holdings, Inc. · NASDAQ:JRVR
James River — Q3 2019 Earnings Presentation
23 slides from James River's earnings presentation, Nov 12, 2019
Slide 1: Third Quarter 2019 Investor Presentation
Third Quarter 2019 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 19 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: Focus on Attractive Part of P&C Market
Focus on Attractive Part of P&C Market 6 2017 Full Year Premiums 2019 9 - Month YTD 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 attractive opp
Slide 7: Our Business
7 Our Business E&S Segment Specialty Admitted Segment Casualty Reinsurance Segment • Represents over 75% of group premium and is underwritten by specialists in 13 divisions utilizing our seventeen years of expertise in writing hard to place risks • Significant strength in current market; ten consecu
Slide 8: Growth driven by strong renewal pricing and submission growth in core E&S
8 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 9: 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 10: E&S Focus | Profitable, Niche Specialty Underwriting
10 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 E&S segment GWP grew by 24% during 2018 and 40% YTD Q3 2019 over YTD Q3 2018 Avg. Combined Ratios 2000 – 2018 Difference of 5 percentage points Total P&C GWP:
Slide 11: Broad Risk Appetite Permits Us to 'Pick Our Spots'
Broad Risk Appetite Permits Us to ‘Pick Our Spots’ 11 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 three quarters of 2019 , rates have increased 3 . 9 % acro
Slide 12: 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 13: A Growing Fee Business
A Growing Fee Business 13 Fee Income Example $656.5 James River (Via Falls Lake subsidiaries) Insured Companies (Managing General Agents) Capacity Providers (Highly rated reinsurers assume underwriting risk and reward)
Slide 14: Traditional Investment Approach Augmented by Higher Yielding Alternatives
14 Traditional Investment Approach Augmented by Higher Yielding Alternatives Total Cash and Investments: $2,088MM Duration: Investment Portfolio (as of September 30, 2019) Net Investment Yield • Our investment portfolio consists of investment grade fixed maturity securities, selectively supplemented
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 • 16.3% growth in tangible book value per share year to date 2019, or 10.8% after payment of the quart
Slide 16: Comparative Market Highlights
Comparative Market Highlights
Slide 17: Consistent Top Tier Returns
17 Consistent Top Tier Returns Best in class risk reward generated with low volatility, sector - leading returns Source: data Copyright © 2019, S&P Global Market Intelligence (and its affiliates, as applicable). Data as of November 7, 20 19. Operating ROATE calculated as trailing twelve month operat
Slide 18: Our Current Valuation Supports Meaningful Upside
Our Current Valuation Supports Meaningful Upside 18 P/TBV vs Operating ROTE 1 Price/Next Twelve Month Consensus Earnings Source: data Copyright © 2019, S&P Global Market Intelligence (and its affiliates, as applicable). Data as of November 7, 2019. 1 Analyst consensus operating earnings per share fo
Slide 19: Appendix
Appendix
Slide 20: James River Group Key Metrics
James River Group Key Metrics 20 Exchange/Ticker NASDAQ / “JRVR” Initial Public Offering $21.00 (December 12, 2014) Current Share Price $34.95 (Closing Price November 7, 2019) Market Capitalization $1.062 billion (November 7, 2019 market close) LTM Dividend / Yield $1.20 per share = 3.4% yield 1 Gro
Slide 21: Non-GAAP Measures Reconciliation
Non - GAAP Measures Reconciliation 21 Source: Company filings. Non-GAAP Reconciliation Underwriting Profit (Loss) ($mm) 2015 2016 2017 Underwriting profit (loss) of the operating segments: Excess and Surplus Lines 47.6$ 47.2$ 29.7$ 42.8$ 32.7$ (0.4)$ Specialty Admitted Insurance 1.1 2.9 3.2 7.0 4.4
Slide 22: Non-GAAP Measures Reconciliation
Non - GAAP Measures Reconciliation 22 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 2018 and YTD Q3 2019 which are as of September 30. Sou
Slide 23: Compounding Value through an Unrelenting Focus on Underwriting Profit
Compounding Value through an Unrelenting Focus on Underwriting Profit InvestorRelations@jrgh.net
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