James River Group Holdings, Inc. · NASDAQ:JRVR
James River — Q3 2024 Earnings Presentation
23 slides from James River's earnings presentation, Nov 12, 2024
Slide 1: Investor Presentation Third Quarter 2024
Investor Presentation Third Quarter 2024
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, should, int
Slide 3: Key Investment Highlights – James River Rebuilt
Key Investment Highlights – James River Rebuilt Proven market leader with focus on the small and middle market; LargeMarket Leading Niche Excess and Expanding and Surplus (“E&S”) Carrier one of the highest E&S concentrations across public insurers with Addressable Market minimal property catastrophe
Slide 4: Complete Enterprise Refocus and Balance Sheet Rebuild
Complete Enterprise Refocus and Balance Sheet Rebuild James River has made outsized strides to refocus the organization around its core strengths, centered around risk management, performance monitoring and a renewed sense of underwriting culture, while significantly upgrading its Board and Manageme
Slide 5: The Market We Operate in is Highly Attractive
The Market We Operate in is Highly Attractive U.S. Excess & Surplus Lines DWP ($BN) (1) E&S industry DWP has grown at double digit rates the past 5 years driven by $86.5 rising renewal rates and changes in risk appetite $75.5 2013 – 2017 Average Growth Rate: 4% $62.9 $47.6 $40.3 $34.6 $28.9 $29.8 $2
Slide 6: Broad Expertise Permits Us to 'Pick Our Spots' in E&S
Broad Expertise Permits Us to ‘Pick Our Spots’ in E&S Our high caliber underwriting team, aided by the use of technology, possess significant expertise to price and skillfully manage our portfolio of divergent risks. YTD 2024 E&S Gross Written Premium Breakdown Diverse Business in an Attractive Mark
Slide 7: E&S Has Demonstrated Cautious but Healthy Growth, Consistent Loss Ratios
E&S Has Demonstrated Cautious but Healthy Growth, and Consistent Initial Accident Year Loss Ratios • James River has grown more cautiously as compared to the E&S industry average, as ERM and underwriting focus has become deeply embedded in the culture, and selected accounts and risks have been shed.
Slide 8: E&S Renewal Opportunities Continue to Grow
E&S Renewal Opportunities Continue to Grow Renewal submissions have continued to grow through the hard market, giving us the best opportunity to more efficiently quote and bind attractive risks that we are most familiar with while taking advantage of a strong rate environment. • The steady growth in
Slide 9: Specialty Admitted: Underwriting Discipline on Capital Light Model
Specialty Admitted: Maintaining Underwriting Discipline on a Capital Light Business Model The fronting business has generated attractive margins and consistent returns on a limited capital allocation. • Fronting business is a capital light, deal-driven business with limited risk retention supported
Slide 10: Recognitions
Recognitions Voluntary turnover through the first nine months of 2024 has improved meaningfully, and resides in the single digits, despite significant strategic actions, uncertainty and the outcome of the strategic review. Top Workplaces USA Awards Top Workplaces Regional Awards Top Workplaces Indus
Slide 11: Defensive and Proactive Underwriting Actions Over Last Three Years
We Have Driven a Number of Defensive and Proactive Underwriting Actions Over the Last Three Years • Representative actions include – • Broad deployment of exclusions and sub limits, such as Firearms, Cyber and Assault & Deep and Broad Battery (A&B) Underwriting • Underwriting guidelines and rates by
Slide 12: Claims Counts Show a Pervasive, Declining Trend
Claims Counts Show a Pervasive, Declining Trend 9/30/24 Core E&S (1) Accident Net Earned Number of Months Year Premium ($) 9 21 33 45 57 69 81 93 105 117 2015 186.9 1,101 1,986 2,234 2,379 2,467 2,539 2,591 2,615 2,647 2,684 2016 200.2 1,333 2,380 2,664 2,858 2,959 3,037 3,102 3,152 3,272 2017 213.7
Slide 13: Reported Loss Ratios Appear to Support Green Shoots
Reported Loss Ratios Appear to Support Green Shoots 9/30/24 Core E&S (1) Accident Number of Months Year 9 21 33 45 57 69 81 93 105 117 2015 5.5% 17.8% 28.5% 39.7% 48.5% 54.5% 57.7% 60.3% 61.5% 62.7% 2016 4.8% 20.7% 37.0% 49.8% 54.6% 59.8% 65.3% 67.7% 70.2% 2017 5.9% 20.0% 33.4% 41.6% 50.2% 58.0% 63.
Slide 14: Third Quarter 2024 E&S Reserving Actions
Third Quarter 2024 E&S Reserving Actions • The Company added $76 MM to losses and loss adjustment expenses to its E&S reserves during the third quarter of 2024. The most meaningful additions were to other liability occurrence line as well as product liability from 2019-2021. • Key changes to reservi
Slide 15: Investment Portfolio Overview
Investment Portfolio Overview The Company holds a conservative portfolio given its focus on underwriting risk. Investment Portfolio as of September 30, 2024 Commentary Total Cash and Investments (excluding restricted cash): $1,935 MM • Balanced portfolio focused on high quality fixed maturities, wit
Slide 16: Capital Position
Capital Position Our strong balance sheet enables us to continue to capitalize on an extremely attractive P&C market. Commentary 4Q 2023 1Q 2024 2Q 2024 3Q 2024 Assets • Balance sheet characterized by low financial Total Invested Assets $1,705.9 $1,706.8 $1,490.1 $1,575.1 and operating leverage leve
Slide 17: Appendix
Appendix
Slide 18: E&S Legacy Reinsurance Agreements
E&S Legacy Reinsurance Agreements Covers All E&S Casualty Reserves as Except Selected Terms Those Related to the Uber/Raiser LPT • This transaction provides an additional $75 MM in • As of October 1, 2024 James River has $150 MM adverse development cover on top of the ADC / LPT of coverage remaining
Slide 19: Appendix: Underwriting Performance Ratios & Non-GAAP Reconciliation
Appendix: Underwriting Performance Ratios & Non-GAAP Reconciliation
Slide 20: Underwriting Performance Ratios
Underwriting Performance Ratios Underwriting Performance Ratios 2022 2023 3Q23 3Q24 Excess and Surplus Lines Loss Ratio 65.9% 68.9% 65.4% 108.2% Impact of Retroactive Reinsurance 2.8% 0.8% (2.0)% 12.9% Loss Ratio Including Impact of Retroactive Reinsurance 68.7% 69.7% 63.4% 121.1% Combined Ratio 85.
Slide 21: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation 12 Months Ended December 31, Underwriting (Loss) Profit 2020 2021 2022 2023 3Q23 3Q24 Underwriting (Loss) Profit of the Operating Segments: Excess and Surplus Lines $9.8 ($121.5) $83.1 $54.3 $18.3 ($50.2) Specialty Admitted Insurance 4.2 9.7 4.2 4.1 2.0 1.8 Total Und
Slide 22: Non-GAAP Measures Reconciliation
Non-GAAP Measures Reconciliation 12 Months Ended December 31, Tangible Equity & Tangible Common Equity 2020 2021 2022 2023 3Q23 3Q24 Shareholders’ Equity $795.6 $725.4 $553.8 $534.6 $562.5 $530.3 Plus: Series A Redeemable Preferred Shares - - 144.9 144.9 144.9 144.9 Plus: Deferred Reinsurance Gain -
Slide 23: InvestorRelations@james-river-group.com
InvestorRelations@james-river-group.com
James River Group Holdings — Q3 2024 Earnings Presentation on 6ix