James River Group Holdings, Inc. · NASDAQ:JRVR
James River — Q2 2023 Earnings Presentation
25 slides from James River's earnings presentation, Aug 17, 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, shou
Slide 3: Executive Summary
Executive Summary
Slide 4: Overview of James River
4 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 x Unique franchise predominantly focused on profitable growth in the Excess and Surplus lines market, which is experiencing very robust con
Slide 5: Our Business: Our Key Growth Opportunities
Our Business 5 Our Key Growth Opportunities E&S Segment Specialty Admitted Segment Casualty Reinsurance Segment PROFITABLE SPECIALTY UNDERWRITING A FOCUS ON FEE INCOME SUSPENDED UNDERWRITING ACTIVITIES 63% of 2Q 2023 LTM Consolidated GWP 33% of 2Q 2023 LTM Consolidated GWP $965 MM 2Q 2023 LTM GWP $5
Slide 6: Attractive Growth Businesses
$190 $218 $235 $261 $282 $334 $517 $669 $799 $883 $933 $21 $59 $91 $182 $316 $374 $388 $409 $492 $490 $501 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2Q23 LTM Core E&S Specialty Admitted Commercial Auto Casualty Re 6 Attractive Growth Businesses Historical GWP ($M) (2) Quarterly Core E&S Rene
Slide 7: What is Driving Growth in the E&S Market?
7 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,
Slide 8: The E&S Market is Highly Attractive
71% 75% 74% 83% 100% 94% 87% 95% 89% 87% 96% 97% 98% 101% 104% 99% 99% 99% 100% 103% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 E&S Industry Combined Ratio P&C Industry Combined Ratio $27.3 $28.9 $29.8 $29.9 $31.5 $34.6 $40.3 $47.6 $62.9 $75.5 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 9: E&S: Broad Risk Appetite Permits Us to 'Pick Our Spots'
E&S: Broad Risk Appetite Permits Us to ‘Pick Our Spots’ 9 • 13 separate underwriting divisions focused on growth in very attractive markets led by seasoned underwriting veterans. • Renewal rates increased more than 13% in each of 2020 and 2021 across our E&S business, as well as 10% during 2022. • T
Slide 10: Finding Profitable Growth Opportunities
Finding Profitable Growth Opportunities 10 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 underwriting culture Highly profitable Core E&S underwriting margins,
Slide 11: Specialty Admitted: Maintaining Underwriting Discipline
Specialty Admitted: Maintaining Underwriting Discipline 11 Fronted Programs Gross Written Premium (1) Fee Income (1) Fronted programs premium represent 90% of the GWP of our Specialty Admitted Segment (1) Consistent and predictable stream of earnings $ in millions (1) Presented on an LTM basis as of
Slide 12: We Represent a Unique Investment Opportunity
0% 27% 29% 33% 39% 62% 100% 12 We Represent a Unique Investment Opportunity LTM 2Q 2023 Cat Losses % of Loss Ratio (1) 2022 E&S DWP as a % of total GWP (2) Our focus on low volatility, niche casualty E&S business and prudent reinsurance purchasing results in little catastrophe exposure, differentiat
Slide 13: Capital Position Commentary
13 Capital Position Commentary • Balance sheet characterized by low financial and operating leverage levels, securities that provide meaningful equity / rating agency credit, a high - quality investment portfolio, high rated reinsurers, and meaningful credit and collateral. • Actions in 2021 and 202
Slide 14: Investment Portfolio Commentary
Investment Portfolio 14 Commentary Investment Portfolio as of June 30, 2023 Second Quarter Change Net Investment Income 2022 2023 (%) Other Private Investments - 0.5 0.2 NM All Other Net Investment Income 15.2 24.9 64% Total Net Investment Income $14.7 $25.2 71% Portfolio Statistics 2Q22 2Q23 Gross
Slide 15: Key Investment Highlights
Key Investment Highlights 15 • Significant valuation upside when compared to public trading multiples of E&S focused peers Large and Expanding Addressable Market Valuation Upside Potential • Legacy reserving and capital actions have yielded a strong balance sheet characterized by low financial and o
Slide 16: Appendix: 2Q 2023 Earnings
Appendix: 2Q 2023 Earnings
Slide 17: Consolidated Performance Commentary
17 Consolidated Performance Commentary • Gross written premium increased 7%, with 9% growth in Core E&S and 10% growth in Specialty Admitted, while Casualty Re’s decline reflected our decision to suspend underwriting activities in 2023. • Net written premium and net earned premium increased 12% and
Slide 18: E&S Segment Performance Commentary
18 E&S Segment Performance Commentary • Gross written premium increased 7% from the prior year quarter, with 9% growth in Core E&S (excluding commercial auto). The segment experienced double - digit growth in excess property, general casualty, manufacturers & contractors, energy and sports & enterta
Slide 19: Specialty Admitted Segment Performance Commentary
19 Specialty Admitted Segment Performance Commentary • Gross written premium increased 9.6%, reflecting 11.0% growth in fronting and programs, partially offset by a 3.9% decline in individual risk workers’ compensation. • Fronting and programs represented 92% of segment gross written premium for 2Q2
Slide 20: Casualty Reinsurance Segment Performance Commentary
20 Casualty Reinsurance Segment Performance Commentary • Gross written premium declined significantly compared to the prior year quarter as we suspended writing new business in the segment in 2023. Written premium during 2Q23 was related to premium adjustments on in - force treaties. • Since the ear
Slide 21: Appendix: Underwriting Performance Ratios & Non-GAAP Reconciliation
Appendix: Underwriting Performance Ratios & Non - GAAP Reconciliation
Slide 22: Underwriting Performance Ratios
Underwriting Performance Ratios 22 Source: Company filings. Note: During the second quarter of 2023, due to adverse trends on business subject to the commercial auto LPT agreement and t he Casualty Reinsurance LPT agreement, the Company recognized adverse prior year development of $12.6 million and
Slide 23: Non-GAAP Measures Reconciliation
Non - GAAP Measures Reconciliation 23 $ in millions Source: Company filings. (1) Included in underwriting profit (loss) for the twelve months ended December 31, 2022, 2021, 2020 and 2019 is gross fee income of $23.6 million, $22.7 million, $20.9 million and $24.9 million, respectively. Included in u
Slide 24: Non-GAAP Measures Reconciliation: Tangible Equity
Non - GAAP Measures Reconciliation 24 $ in millions, except per share figures Source: Company filings. 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 Preferre
Slide 25: James River Group Holdings, Ltd. Investors
Ss JAMES RIVER GROUP HOLDINGS, LTD? Investors
James River Group Holdings — Q2 2023 Earnings Presentation on 6ix