James River Group Holdings, Inc. · NASDAQ:JRVR
James River — Q4 2020 Earnings Presentation
22 slides from James River's earnings presentation, February 2021
Slide 1: Fourth Quarter 2020 Investor Presentation
Fourth Quarter 2020 Investor Presentation
Slide 2: Disclosure
Disclosure Forward-Looking Statements This press release 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, intend, pr
Slide 3: Table of Contents
Table of Contents Franchise Overview Slide 4 Comparative Market Highlights Slide 16 Appendix Slide 18 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 bus
Slide 6: Fourth Quarter and Year end 2020 Review
Fourth Quarter and Year end 2020 Review ⚫ Strongest quarterly rate of growth in Core E&S (39% GWP vs QTD Q4 2019) during 2020; business has doubled in size over the past two years o Obtained a 9% renewal rate increase during the quarter, the 16th consecutive quarter of rate increases, representing a
Slide 7: Focus on Attractive Part of P&C Market
Focus on Attractive Part of P&C Market • 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 opportunities to put capital to work • Our key area of fo
Slide 8: Our Business
Our Business Specialty Admitted Casualty Reinsurance E&S Segment Segment Segment • Represents 56% of group-wide gross • Specialty admitted insurance • Third-party proportional and working- written premium year to date and is coverages in the US, and a growing layer excess casualty business underwrit
Slide 9: Targeted Growth in Gross Written Premium
Targeted Growth in Gross Written Premium Growth driven by strong renewal pricing and submission growth in core E&S, expansion of our fee based fronting business, and refocus on margin expansion in Casualty Re ($ in Millions) E&S Segment Specialty Admitted Segment Casualty Reinsurance Segment $600 $1
Slide 10: Our Specialty Market History
Our Specialty Market History We have a long history of success in building niche businesses and generating top tier returns for investors On pace to write more than $200 million of specialty James River YE 2020 Adam Abram and premiums in the calendar James River James River successfully a group of y
Slide 11: E&S Focus | Profitable, Niche Specialty Underwriting
E&S Focus | Profitable, Niche Specialty Underwriting Profitability of E&S vs. Total P&C Industry • Our business is heavily concentrated Avg. Combined Ratios 2000–2019 in E&S Casualty (90% of groupwide 2020 Difference of NWP). 4.7 percentage points • E&S is the most consistently profitable part of th
Slide 12: Broad Risk Appetite Permits Us to 'Pick Our Spots'
$656.5 Broad Risk Appetite Permits Us to ‘Pick Our Spots’ 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 fourth quarter of 2020, renewal rates increased 9% across ou
Slide 13: Demonstrated Underwriting Discipline
Demonstrated Underwriting Discipline We have proven our willingness to expand and contract when market conditions dictate, and have a strong track record of profitable underwriting in our Core E&S business Core E&S – GWP Growth vs. Total E&S Industry 60.0% 54.5 40.0% GWP Growth (%) 21.1 21.3 20.0% 1
Slide 14: Traditional Investment Approach Augmented by Higher Yielding Alternatives
Traditional Investment Approach Augmented by Higher Yielding Alternatives Investment Portfolio (as of December 31, 2020) Commentary 2% 7% Fixed Maturity Securities • Our investment portfolio consists of 5% investment grade fixed maturity securities, Equity Securities 76% supplemented by non-traditio
Slide 15: Capital Management Maximizes Shareholder Value
Capital Management Maximizes Shareholder Value Capital Management History • Current focus on growing $1,150 book value given the $1,058 attractive opportunities to Dividends and Share Repurchases ($ mm) $1,050 $1,003 put capital to work in our Tangible Equity Plus Cumulative $950 core E&S business $
Slide 16: Comparative Market Highlights
Comparative Market Highlights
Slide 17: Our Current Valuation Supports Meaningful Upside
Our Current Valuation Supports Meaningful Upside P/TBV vs Operating ROTE1 Price/Next Twelve Month Consensus Earnings 8.0x 50.0x KNSL 7.0x 45.0x 6.0x 40.0x Price to Next 12 Mths EPS 35.0x 5.0x Price to TBV RLI 30.0x 4.0x Median = 19.4x 25.0x 3.0x 20.0x WRB 15.0x 2.0x AMSF JRVR MKL 10.0x 1.0x ARGO 5.0
Slide 18: Appendix
Appendix
Slide 19: James River Group Key Metrics
James River Group Key Metrics ⚫ Exchange/Ticker NASDAQ / “JRVR” ⚫ Initial Public Offering $21.00 (December 12, 2014) ⚫ Current Share Price $45.91 (Closing Price February 26, 2021) ⚫ Market Capitalization $1.4 billion (February 26, 2021 market close) ⚫ LTM Dividend / Yield $1.20 per share = 2.6% yiel
Slide 20: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Non-GAAP Reconciliation Underwriting Profit (Loss) ($mm) 2016 2017 2018 2019 2020 Underwriting profit (loss) of the operating segments: Excess and Surplus Lines $ 47.2 $ 29.7 $ 42.8 $ 19.2 $ 9.8 Specialty Admitted Insurance 2.9 3.2 7.0 5.9 4.2 Casualty Reinsurance (0
Slide 21: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation Non-GAAP Reconciliation ($mm) Adj. Net Operating Income 2016 2017 2018 2019 2020 Income (loss) as reported $ 74.5 $ 43.6 $ 63.8 $ 38.3 $ 4.8 Net realized inv. (gains) losses (5.2) 1.4 4.4 3.8 14.8 Initial public offering costs - - - - - Dividend withholding taxes - 1
Slide 22: InvestorRelations@jrgh.net
InvestorRelations@jrgh.net
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