James River Group Holdings, Ltd. ("James River" or the "Company")
(NASDAQ: JRVR) today reported first quarter 2023 net income
available to common shareholders of $7.0 million ($0.18 per diluted
share), compared to net income available to common shareholders of
$9.3 million ($0.25 per diluted share) for the first quarter of
2022. Adjusted net operating income1 for the first quarter of 2023
was $21.6 million ($0.56 per diluted share), compared to adjusted
net operating income1 of $13.9 million ($0.37 per diluted share)
for the first quarter of 2022.
First Quarter 2023 Highlights:
- Group combined
ratio of 94.9% and Excess and Surplus Lines ("E&S") segment
combined ratio of 86.8% on business not subject to retroactive
reinsurance accounting for loss portfolio transfers (the "combined
ratio"). Unless specified otherwise, all underwriting performance
ratios presented herein are for our business not subject to
retroactive reinsurance accounting for loss portfolio transfers
("LPTs").
- E&S segment
gross and net written premium growth of 12.1% and 17.3%,
respectively, due to strong growth from our larger underwriting
divisions, broad based renewal rate increases and increased net
retention.
- E&S segment
renewal rates increased 8.9%, with all underwriting divisions
reporting positive pricing increases.
- Net investment
income increased 58.4% compared to the prior year quarter, and
12.9% sequentially due to higher income from most asset
classes.
- Adjusted net
operating return on tangible common equity excluding accumulated
other comprehensive loss ("AOCI")1 of 16.3%.
Frank D'Orazio, the Company’s Chief Executive
Officer, commented on the first quarter, “Buoyed by strong growth
and attractive renewal rates in our E&S segment, solid
underwriting profitability and meaningful contributions from our
investment portfolio, James River produced another outstanding
quarter of attractive returns, including our strongest quarterly
adjusted net operating income in more than three years. With the
Company repositioned around its core strengths, we believe James
River is well poised to continue to deliver excellent underwriting
performance and compelling shareholder returns.”
______________________1 Adjusted net operating
income and adjusted net operating return on tangible common equity
excluding AOCI are non-GAAP financial measures. See “Non-GAAP
Financial Measures” and “Reconciliation of Non-GAAP Financial
Measures” at the end of this press release.
First Quarter 2023 Operating
Results
- Gross written premium of $363.9 million, consisting of the
following:
|
Three Months EndedMarch 31, |
|
($ in
thousands) |
|
2023 |
|
|
2022 |
|
% Change |
Excess and Surplus Lines |
$ |
228,903 |
|
$ |
204,282 |
|
12 |
% |
Specialty Admitted
Insurance |
|
124,551 |
|
|
125,710 |
|
(1 |
)% |
Casualty Reinsurance |
|
10,439 |
|
|
29,944 |
|
(65 |
)% |
|
$ |
363,893 |
|
$ |
359,936 |
|
1 |
% |
|
|
|
|
|
|
|
|
|
- Net written premium of $183.2 million, consisting of the
following:
|
Three Months EndedMarch 31, |
|
($ in
thousands) |
|
2023 |
|
|
2022 |
|
% Change |
Excess and Surplus Lines |
$ |
147,430 |
|
$ |
125,710 |
|
17 |
% |
Specialty Admitted
Insurance |
|
26,725 |
|
|
20,205 |
|
32 |
% |
Casualty Reinsurance |
|
9,065 |
|
|
29,944 |
|
(70 |
)% |
|
$ |
183,220 |
|
$ |
175,859 |
|
4 |
% |
|
|
|
|
|
|
|
|
|
- Net earned premium of $208.1 million, consisting of the
following:
|
Three Months EndedMarch 31, |
|
($ in
thousands) |
|
2023 |
|
|
2022 |
|
% Change |
Excess and Surplus Lines |
$ |
151,359 |
|
$ |
131,301 |
|
15 |
% |
Specialty Admitted
Insurance |
|
20,481 |
|
|
19,318 |
|
6 |
% |
Casualty Reinsurance |
|
36,273 |
|
|
39,205 |
|
(7)% |
|
$ |
208,113 |
|
$ |
189,824 |
|
10 |
% |
|
|
|
|
|
|
|
|
|
- E&S segment
gross written premium increased 12.1% compared to the prior year
quarter, while net written premium increased 17.3% due to both
strong growth and higher net retention within our excess casualty
unit. Premium growth for the segment was led by our larger
underwriting divisions, with particular strength in excess
casualty, excess property and manufacturers and contractors.
Renewal rate increases were 8.9% during the first quarter of 2023,
representing the twenty-fifth consecutive quarter of renewal rate
increases compounding to 67.7%.
- Gross written
premium for the Specialty Admitted Insurance segment decreased 0.9%
from the prior year quarter. During the quarter there was a
combined 7.1% reduction to premium from our individual risk
workers' compensation business and our large workers' compensation
fronted program, which was partially offset by growth in our
remaining fronting and program business.
- Gross written
premium in the Casualty Reinsurance segment totaled $10.4 million
and was related to premium adjustments on in-force treaties. As was
previously disclosed, we have suspended underwriting business in
our Casualty Reinsurance segment and there were no treaties written
or renewed during the first quarter. The earning pattern of the
business can extend over multiple years and declines in net earned
premium for this segment will lag written premium. We expect to
continue to report earned premium over the next several
quarters.
- Pre-tax
favorable (unfavorable) reserve development by segment on business
not subject to retroactive reinsurance accounting for loss
portfolio transfers was as follows:
|
Three Months EndedMarch 31, |
($ in thousands) |
|
2023 |
|
|
|
2022 |
|
Excess and Surplus Lines |
$ |
324 |
|
|
$ |
59 |
|
Specialty Admitted
Insurance |
|
171 |
|
|
|
(63 |
) |
Casualty Reinsurance |
|
(1,857 |
) |
|
|
(6,800 |
) |
|
$ |
(1,362 |
) |
|
$ |
(6,804 |
) |
|
|
|
|
|
|
|
|
-
During the first quarter of 2023, for business not subject to LPTs,
the Company reported modest favorable reserve development in
E&S and Specialty Admitted, and $1.9 million of adverse
development in Casualty Reinsurance.
-
The Company recognized adverse prior year development of $41.0
million on the reserves subject to the Commercial Auto LPT, which
provides unlimited coverage, and $7.8 million on the reserves
subject to the Casualty Reinsurance LPT. Retroactive benefits of
$32.0 million were recorded in loss and loss adjustment expenses
and the deferred retroactive reinsurance gain on the Balance Sheet
is $37.0 million.
-
Gross fee income was as follows:
|
Three Months EndedMarch 31, |
|
($ in
thousands) |
|
2023 |
|
|
2022 |
|
% Change |
Specialty Admitted Insurance |
$ |
5,711 |
|
$ |
5,558 |
|
3 |
% |
|
|
|
|
|
|
|
|
|
-
The consolidated expense ratio was 28.4% for the first quarter of
2023, which was an increase from 26.0% in the prior year first
quarter. The expense ratio was primarily impacted by changes in
reinsurance cessions in both E&S and Specialty Admitted
segments that resulted in a lower level of ceding commissions in
the current period.
Investment Results
Net investment income for the first quarter of
2023 was $25.8 million, an increase of 58.4% compared to $16.3
million for the same period in 2022. Growth in income was
broad-based across the portfolio, driven by higher yields and
growth from positive operating cash flow. During the first quarter
of 2023, the Company received $1.2 million of additional proceeds
from a renewable energy investment that was sold during the fourth
quarter of 2022. This payment was reflected in investment
income.
The Company’s net investment income consisted of
the following:
|
Three Months EndedMarch 31, |
|
($ in
thousands) |
|
2023 |
|
|
2022 |
|
% Change |
Renewable Energy Investments |
$ |
1,255 |
|
$ |
2,682 |
|
(53 |
)% |
Other Private Investments |
|
336 |
|
|
217 |
|
55 |
% |
All Other Net Investment
Income |
|
24,181 |
|
|
13,368 |
|
81 |
% |
Total Net Investment
Income |
$ |
25,772 |
|
$ |
16,267 |
|
58 |
% |
The Company’s annualized gross investment yield
on average fixed maturity, bank loan and equity securities for the
three months ended March 31, 2023 was 4.2% (versus 3.0% for the
three months ended March 31, 2022). The investment yield increased
primarily as a result of higher market yields on fixed maturity
securities and bank loans.
Net realized and unrealized gains on investments
of $0.4 million for the three months ended March 31, 2023 compared
to net realized and unrealized losses on investments of $5.0
million in the prior year quarter. The majority of the realized and
unrealized gains during the first quarter of 2023 were related to
changes in fair values of our secured bank loan portfolio,
partially offset by a decline in the fair value of preferred and
common equity securities.
Taxes
The Company's effective tax rate fluctuates from
period to period based on the relative mix of income reported by
country and the respective tax rates imposed by each tax
jurisdiction. The effective tax rate for the three months ended
March 31, 2023 was 24.6%.
Tangible Equity
Tangible equity2 of $555.4 million at
March 31, 2023 increased 10.8% compared to tangible equity of
$501.2 million at December 31, 2022, due to strong earnings and a
decrease in unrealized losses in the Company's fixed maturity
portfolio. AOCI improved by $30.9 million during the first quarter
of 2023, due to an increase in the value of the Company's fixed
maturity securities.
Tangible equity excluding AOCI was $687.5
million at March 31, 2023 compared to $664.3 million at December
31, 2022, with the increase primarily driven by positive net income
available to common shareholders during the first quarter of
2023.
Capital Management
The Company announced that its Board of
Directors declared a cash dividend of $0.05 per common share. This
dividend is payable on Friday, June 30, 2023 to all shareholders of
record on Monday, June 12, 2023.
______________________2 Tangible equity is a
non-GAAP financial measure. See “Non-GAAP Financial Measures” and
“Reconciliation of Non-GAAP Financial Measures” at the end of this
press release.
Conference Call
James River will hold a conference call to
discuss its first quarter results tomorrow, May 3, 2023 at 9:00
a.m. Eastern Time. Investors may access the conference call by
dialing (800) 715-9871, Conference ID 3174764, or via the internet
by visiting www.jrvrgroup.com and clicking on the “Investor
Relations” link. A webcast replay of the call will be available by
visiting the company website.
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, should, intend, project, anticipate, plan,
estimate, guidance or similar words. Forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from those in the forward-looking statements.
Although it is not possible to identify all of these risks and
uncertainties, they include, among others, the following: the
inherent uncertainty of estimating reserves and the possibility
that incurred losses may be greater than our loss and loss
adjustment expense reserves; inaccurate estimates and judgments in
our risk management may expose us to greater risks than intended;
downgrades in the financial strength rating of our regulated
insurance subsidiaries impacting our ability to attract and retain
insurance and reinsurance business that our subsidiaries write, our
competitive position, and our financial condition; the potential
loss of key members of our management team or key employees and our
ability to attract and retain personnel; adverse economic factors
resulting in the sale of fewer policies than expected or an
increase in the frequency or severity of claims, or both; the
impact of a persistent high inflationary environment on our
reserves, the values of our investments and investment returns, and
our compensation expenses; exposure to credit risk, interest rate
risk and other market risk in our investment portfolio; reliance on
a select group of brokers and agents for a significant portion of
our business and the impact of our potential failure to maintain
such relationships; reliance on a select group of customers for a
significant portion of our business and the impact of our potential
failure to maintain, or decision to terminate, such relationships;
our ability to obtain reinsurance coverage at prices and on terms
that allow us to transfer risk, adequately protect our company
against financial loss and that supports our growth plans; losses
resulting from reinsurance counterparties failing to pay us on
reinsurance claims, insurance companies with whom we have a
fronting arrangement failing to pay us for claims, or a former
customer with whom we have an indemnification arrangement failing
to perform its reimbursement obligations, and our potential
inability to demand or maintain adequate collateral to mitigate
such risks; inadequacy of premiums we charge to compensate us for
our losses incurred; changes in laws or government regulation,
including tax or insurance law and regulations; changes in U.S. tax
laws and the interpretation of certain provisions of Public Law No.
115-97, informally titled the 2017 Tax Cuts and Jobs Act (including
associated regulations), which may be retroactive and could have a
significant effect on us including, among other things, by
potentially increasing our tax rate, as well as on our
shareholders; in the event we do not qualify for the insurance
company exception to the passive foreign investment company
(“PFIC”) rules and are therefore considered a PFIC, there could be
material adverse tax consequences to an investor that is subject to
U.S. federal income taxation; the Company or any of its foreign
subsidiaries becoming subject to U.S. federal income taxation; a
failure of any of the loss limitations or exclusions we utilize to
shield us from unanticipated financial losses or legal exposures,
or other liabilities; losses from catastrophic events, such as
natural disasters and terrorist acts, which substantially exceed
our expectations and/or exceed the amount of reinsurance we have
purchased to protect us from such events; the effects of the
COVID-19 pandemic and associated government actions on our
operations and financial performance; potential effects on our
business of emerging claim and coverage issues; the potential
impact of internal or external fraud, operational errors, systems
malfunctions or cyber security incidents; our ability to manage our
growth effectively; failure to maintain effective internal controls
in accordance with the Sarbanes-Oxley Act of 2002, as amended
(“Sarbanes-Oxley”); changes in our financial condition, regulations
or other factors that may restrict our subsidiaries’ ability to pay
us dividends; and an adverse result in any litigation or legal
proceedings we are or may become subject to. Additional information
about these risks and uncertainties, as well as others that may
cause actual results to differ materially from those in the
forward-looking statements, is contained in our filings with the
U.S. Securities and Exchange Commission ("SEC"), including our most
recently filed Annual Report on Form 10-K. These forward-looking
statements speak only as of the date of this release and the
Company does not undertake any obligation to update or revise any
forward-looking information to reflect changes in assumptions, the
occurrence of unanticipated events, or otherwise.
Non-GAAP Financial Measures
In presenting James River Group Holdings, Ltd.’s
results, management has included financial measures that are not
calculated under standards or rules that comprise accounting
principles generally accepted in the United States (“GAAP”). Such
measures, including underwriting profit (loss), adjusted net
operating income, tangible equity, tangible common equity, adjusted
net operating return on tangible equity (which is calculated as
annualized adjusted net operating income divided by the average
quarterly tangible equity balances in the respective period), and
adjusted net operating return on tangible common equity excluding
AOCI (which is calculated as annualized adjusted net operating
income (loss) divided by the average quarterly tangible common
equity balances in the respective period, excluding AOCI), are
referred to as non-GAAP measures. These non-GAAP measures may be
defined or calculated differently by other companies. These
measures should not be viewed as a substitute for those measures
determined in accordance with GAAP. Reconciliations of such
measures to the most comparable GAAP figures are included at the
end of this press release.
About James River Group Holdings,
Ltd.
James River Group Holdings, Ltd. is a
Bermuda-based insurance holding company that owns and operates a
group of specialty insurance and reinsurance companies. The Company
operates in three specialty property-casualty insurance and
reinsurance segments: Excess and Surplus Lines, Specialty Admitted
Insurance and Casualty Reinsurance. Each of the Company’s regulated
insurance subsidiaries are rated “A-” (Excellent) by A.M. Best
Company.
Visit James River Group Holdings, Ltd. on the
web at www.jrvrgroup.com
For more information
contact:
Brett ShirreffsSVP, Finance, Investments and
Investor RelationsInvestorRelations@jrgh.net
|
James River Group Holdings, Ltd. and
SubsidiariesCondensed Consolidated Balance Sheet
Data(Unaudited) |
|
($ in thousands,
except for share data) |
March 31, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Invested assets: |
|
|
|
Fixed maturity securities, available-for-sale, at fair value |
$ |
1,898,758 |
|
$ |
1,783,417 |
Equity securities, at fair
value |
|
116,091 |
|
|
118,627 |
Bank loan participations, at
fair value |
|
146,768 |
|
|
154,991 |
Short-term investments |
|
25,061 |
|
|
107,812 |
Other invested assets |
|
27,184 |
|
|
27,447 |
Total invested assets |
|
2,213,862 |
|
|
2,192,294 |
|
|
|
|
Cash and cash equivalents |
|
199,898 |
|
|
173,164 |
Restricted cash equivalents
(a) |
|
104,254 |
|
|
103,215 |
Accrued investment income |
|
15,892 |
|
|
14,418 |
Premiums receivable and
agents’ balances, net |
|
326,499 |
|
|
340,525 |
Reinsurance recoverable on
unpaid losses, net |
|
1,541,497 |
|
|
1,520,113 |
Reinsurance recoverable on
paid losses |
|
158,761 |
|
|
114,242 |
Deferred policy acquisition
costs |
|
54,535 |
|
|
59,603 |
Goodwill and intangible
assets |
|
217,416 |
|
|
217,507 |
Other assets |
|
372,473 |
|
|
401,994 |
Total assets |
$ |
5,205,087 |
|
$ |
5,137,075 |
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
Reserve for losses and loss
adjustment expenses |
$ |
2,841,993 |
|
$ |
2,768,995 |
Unearned premiums |
|
638,856 |
|
|
676,016 |
Funds held (a) |
|
297,002 |
|
|
310,953 |
Deferred reinsurance gain |
|
36,954 |
|
|
20,091 |
Senior debt |
|
222,300 |
|
|
222,300 |
Junior subordinated debt |
|
104,055 |
|
|
104,055 |
Accrued expenses |
|
43,732 |
|
|
59,566 |
Other liabilities |
|
284,382 |
|
|
276,435 |
Total liabilities |
|
4,469,274 |
|
|
4,438,411 |
|
|
|
|
Series A redeemable preferred
shares |
|
144,898 |
|
|
144,898 |
Total shareholders’
equity |
|
590,915 |
|
|
553,766 |
Total liabilities, Series A
redeemable preferred shares, and shareholders’ equity |
$ |
5,205,087 |
|
$ |
5,137,075 |
|
|
|
|
Tangible equity (b) |
$ |
555,351 |
|
$ |
501,248 |
Tangible equity per share outstanding (b) |
$ |
12.84 |
|
$ |
11.63 |
Shareholders' equity per share
outstanding |
$ |
15.71 |
|
$ |
14.78 |
Common shares outstanding |
|
37,619,226 |
|
|
37,470,237 |
|
|
|
|
(a) Restricted cash equivalents and the funds held liability
includes funds posted by the Company to a trust account for the
benefit of a third party administrator handling the claims on the
Rasier commercial auto policies in run-off. Such funds held in
trust secure the Company's obligations to reimburse the
administrator for claims payments, and are primarily sourced from
the collateral posted to the Company by Rasier and its affiliates
to support their obligations under the indemnity agreements and the
loss portfolio transfer reinsurance agreement with the Company. The
funds held liability also includes a notional funds withheld
account balance related to the loss portfolio transfer retrocession
transaction that our Casualty Reinsurance segment entered into in
the first quarter of 2022, which is reduced quarterly by paid
losses on the subject business. |
(b) See “Reconciliation of
Non-GAAP Measures” |
|
|
|
|
James River Group Holdings, Ltd. and
SubsidiariesCondensed Consolidated Income
Statement Data(Unaudited) |
|
|
Three Months EndedMarch 31, |
($ in thousands,
except for share data) |
2023 |
|
2022 |
REVENUES |
|
|
|
Gross written premiums |
$ |
363,893 |
|
|
$ |
359,936 |
|
Net written premiums |
|
183,220 |
|
|
|
175,859 |
|
|
|
|
|
Net earned premiums |
|
208,113 |
|
|
|
189,824 |
|
Net investment income |
|
25,772 |
|
|
|
16,267 |
|
Net realized and unrealized
gains (losses) on investments |
|
407 |
|
|
|
(5,010 |
) |
Other income |
|
1,309 |
|
|
|
867 |
|
Total revenues |
|
235,601 |
|
|
|
201,948 |
|
|
|
|
|
EXPENSES |
|
|
|
Losses and loss adjustment
expenses (a) |
|
155,288 |
|
|
|
135,608 |
|
Other operating expenses |
|
60,259 |
|
|
|
50,061 |
|
Other expenses |
|
603 |
|
|
|
368 |
|
Interest expense |
|
6,616 |
|
|
|
2,292 |
|
Amortization of intangible
assets |
|
91 |
|
|
|
91 |
|
Total expenses |
|
222,857 |
|
|
|
188,420 |
|
Income before taxes |
|
12,744 |
|
|
|
13,528 |
|
Income tax expense |
|
3,136 |
|
|
|
3,323 |
|
NET
INCOME |
$ |
9,608 |
|
|
$ |
10,205 |
|
Dividends on Series A
preferred shares |
|
(2,625 |
) |
|
|
(875 |
) |
NET INCOME AVAILABLE
TO COMMON SHAREHOLDERS |
$ |
6,983 |
|
|
$ |
9,330 |
|
ADJUSTED NET OPERATING
INCOME (b) |
$ |
21,591 |
|
|
$ |
13,867 |
|
|
|
|
|
INCOME PER COMMON
SHARE |
|
|
|
Basic |
$ |
0.19 |
|
|
$ |
0.25 |
|
Diluted |
$ |
0.18 |
|
|
$ |
0.25 |
|
|
|
|
|
ADJUSTED NET OPERATING
INCOME PER COMMON SHARE |
|
|
|
Basic |
$ |
0.58 |
|
|
$ |
0.37 |
|
Diluted (c) |
$ |
0.56 |
|
|
$ |
0.37 |
|
|
|
|
|
Weighted-average common shares
outstanding: |
|
|
|
Basic |
|
37,531,819 |
|
|
|
37,406,913 |
|
Diluted |
|
37,785,452 |
|
|
|
37,554,662 |
|
Cash dividends declared per
common share |
$ |
0.05 |
|
|
$ |
0.05 |
|
|
|
|
|
Ratios: |
|
|
|
Loss ratio |
|
66.5 |
% |
|
|
71.4 |
% |
Expense ratio (d) |
|
28.4 |
% |
|
|
26.0 |
% |
Combined ratio |
|
94.9 |
% |
|
|
97.4 |
% |
Accident year loss ratio |
|
65.9 |
% |
|
|
67.9 |
% |
|
|
|
|
(a) Losses and loss
adjustment expenses include a $16.9 million expense for
unrecognized deferred retroactive reinsurance gain for the three
months ended March 31, 2023. |
(b) See
"Reconciliation of Non-GAAP Measures". |
(c) The outstanding
Series A preferred shares were dilutive for the three months ended
March 31, 2023. Dividends on the Series A preferred shares
were added back to the numerator in the calculation and 5,640,158
common shares from an assumed conversion of the Series A preferred
shares were included in the denominator. |
(d) Calculated with a numerator comprising other operating expenses
less gross fee income (in specific instances when the Company is
not retaining insurance risk) included in “Other income” in our
Condensed Consolidated Income Statements of $1.1 million and
$800,000 for the three months ended March 31, 2023 and 2022,
respectively, and a denominator of net earned premiums. |
|
James River Group Holdings, Ltd. and
SubsidiariesSegment Results |
|
EXCESS
AND SURPLUS LINES |
|
|
Three Months EndedMarch 31, |
|
|
($ in
thousands) |
2023 |
|
2022 |
|
% Change |
Gross written premiums |
$ |
228,903 |
|
|
$ |
204,282 |
|
|
12.1 |
% |
Net written premiums |
$ |
147,430 |
|
|
$ |
125,710 |
|
|
17.3 |
% |
|
|
|
|
|
|
Net earned premiums |
$ |
151,359 |
|
|
$ |
131,301 |
|
|
15.3 |
% |
Losses and loss adjustment
expenses excluding retroactive reinsurance |
|
(99,189 |
) |
|
|
(84,925 |
) |
|
16.8 |
% |
Underwriting expenses |
|
(32,175 |
) |
|
|
(24,919 |
) |
|
29.1 |
% |
Underwriting profit (a) |
$ |
19,995 |
|
|
$ |
21,457 |
|
|
(6.8 |
)% |
|
|
|
|
|
|
Ratios: |
|
|
|
|
|
Loss ratio |
|
65.5 |
% |
|
|
64.7 |
% |
|
|
Expense ratio |
|
21.3 |
% |
|
|
19.0 |
% |
|
|
Combined ratio |
|
86.8 |
% |
|
|
83.7 |
% |
|
|
Accident year loss ratio |
|
65.7 |
% |
|
|
64.7 |
% |
|
|
|
|
|
|
|
|
(a) See
"Reconciliation of Non-GAAP Measures". |
|
SPECIALTY
ADMITTED INSURANCE |
|
|
Three Months EndedMarch 31, |
|
|
($ in
thousands) |
2023 |
|
2022 |
|
% Change |
Gross written premiums |
$ |
124,551 |
|
|
$ |
125,710 |
|
|
(0.9 |
)% |
Net written premiums |
$ |
26,725 |
|
|
$ |
20,205 |
|
|
32.3 |
% |
|
|
|
|
|
|
Net earned premiums |
$ |
20,481 |
|
|
$ |
19,318 |
|
|
6.0 |
% |
Losses and loss adjustment
expenses |
|
(15,492 |
) |
|
|
(15,435 |
) |
|
0.4 |
% |
Underwriting expenses |
|
(5,458 |
) |
|
|
(3,674 |
) |
|
48.6 |
% |
Underwriting (loss) profit
(a), (b) |
$ |
(469 |
) |
|
$ |
209 |
|
|
— |
|
|
|
|
|
|
|
Ratios: |
|
|
|
|
|
Loss ratio |
|
75.6 |
% |
|
|
79.9 |
% |
|
|
Expense ratio |
|
26.7 |
% |
|
|
19.0 |
% |
|
|
Combined ratio |
|
102.3 |
% |
|
|
98.9 |
% |
|
|
Accident year loss ratio |
|
76.5 |
% |
|
|
79.6 |
% |
|
|
|
|
|
|
|
|
(a) See "Reconciliation of
Non-GAAP Measures". |
|
|
|
|
|
(b) Underwriting results for the three months ended March 31,
2023 and 2022 include gross fee income of $5.7 million and $5.6
million, respectively. |
|
|
CASUALTY
REINSURANCE |
|
|
|
|
Three Months EndedMarch 31, |
|
|
|
($ in
thousands) |
2023 |
|
2022 |
|
% Change |
|
Gross written premiums |
$ |
10,439 |
|
|
$ |
29,944 |
|
|
(65.1 |
)% |
Net written premiums |
$ |
9,065 |
|
|
$ |
29,944 |
|
|
(69.7 |
)% |
|
|
|
|
|
|
|
Net earned premiums |
$ |
36,273 |
|
|
$ |
39,205 |
|
|
(7.5 |
)% |
Losses and loss adjustment
expenses excluding retroactive reinsurance |
|
(23,744 |
) |
|
|
(35,248 |
) |
|
(32.6 |
)% |
Underwriting expenses |
|
(12,223 |
) |
|
|
(12,794 |
) |
|
(4.5 |
)% |
Underwriting profit (loss)
(a) |
$ |
306 |
|
|
$ |
(8,837 |
) |
|
— |
|
|
|
|
|
|
|
|
Ratios: |
|
|
|
|
|
|
Loss ratio |
|
65.5 |
% |
|
|
89.9 |
% |
|
|
|
Expense ratio |
|
33.7 |
% |
|
|
32.6 |
% |
|
|
|
Combined ratio |
|
99.2 |
% |
|
|
122.5 |
% |
|
|
|
Accident year loss ratio |
|
60.3 |
% |
|
|
72.6 |
% |
|
|
|
|
|
|
|
|
|
|
(a) See "Reconciliation of
Non-GAAP Measures". |
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting Performance Ratios
The following table provides the underwriting
performance ratios of the Company inclusive of the business subject
to retroactive reinsurance accounting for loss portfolio transfers.
There is no economic impact to the Company over the life of a loss
portfolio transfer contract so long as any additional losses
subject to the contract are within the limit of the loss portfolio
transfer and the counterparty performs under the contract.
Retroactive reinsurance accounting is not indicative of our current
and ongoing operations. Management believes that providing loss
ratios and combined ratios on business not subject to retroactive
reinsurance accounting for loss portfolio transfers gives the users
of our financial statements useful information in evaluating our
current and ongoing operations.
|
Three Months EndedMarch 31, |
|
2023 |
|
2022 |
Excess and Surplus
Lines: |
|
|
|
Loss Ratio |
65.5 |
% |
|
64.7 |
% |
Impact of retroactive
reinsurance |
7.7 |
% |
|
— |
% |
Loss Ratio including impact of
retroactive reinsurance |
73.2 |
% |
|
64.7 |
% |
|
|
|
|
Combined Ratio |
86.8 |
% |
|
83.7 |
% |
Impact of retroactive
reinsurance |
7.7 |
% |
|
— |
% |
Combined Ratio including
impact of retroactive reinsurance |
94.5 |
% |
|
83.7 |
% |
|
|
|
|
Casualty
Reinsurance: |
|
|
|
Loss Ratio |
65.5 |
% |
|
89.9 |
% |
Impact of retroactive
reinsurance |
14.2 |
% |
|
— |
% |
Loss Ratio including impact of
retroactive reinsurance |
79.7 |
% |
|
89.9 |
% |
|
|
|
|
Combined Ratio |
99.2 |
% |
|
122.5 |
% |
Impact of retroactive
reinsurance |
14.2 |
% |
|
— |
% |
Combined Ratio including
impact of retroactive reinsurance |
113.4 |
% |
|
122.5 |
% |
|
|
|
|
Consolidated: |
|
|
|
Loss Ratio |
66.5 |
% |
|
71.4 |
% |
Impact of retroactive
reinsurance |
8.1 |
% |
|
— |
% |
Loss Ratio including impact of
retroactive reinsurance |
74.6 |
% |
|
71.4 |
% |
|
|
|
|
Combined Ratio |
94.9 |
% |
|
97.4 |
% |
Impact of retroactive
reinsurance |
8.1 |
% |
|
— |
% |
Combined Ratio including
impact of retroactive reinsurance |
103.0 |
% |
|
97.4 |
% |
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP MEASURES
Underwriting Profit
The following table reconciles the underwriting
profit by individual operating segment and for the entire Company
to consolidated income before taxes. We believe that the disclosure
of underwriting profit by individual segment and of the Company as
a whole is useful to investors, analysts, rating agencies and other
users of our financial information in evaluating our performance
because our objective is to consistently earn underwriting profits.
We evaluate the performance of our segments and allocate resources
based primarily on underwriting profit. We define underwriting
profit as net earned premiums and gross fee income (in specific
instances when the Company is not retaining insurance risk) less
losses and loss adjustment expenses excluding the impact of loss
portfolio transfers accounted for as retroactive reinsurance and
other operating expenses. Other operating expenses include the
underwriting, acquisition, and insurance expenses of the operating
segments and, for consolidated underwriting profit, the expenses of
the Corporate and Other segment. Our definition of underwriting
profit may not be comparable to that of other companies.
|
Three Months EndedMarch 31, |
($ in
thousands) |
2023 |
|
2022 |
Underwriting profit (loss) of the operating segments: |
|
|
|
Excess and Surplus Lines |
$ |
19,995 |
|
|
$ |
21,457 |
|
Specialty Admitted Insurance |
|
(469 |
) |
|
|
209 |
|
Casualty Reinsurance |
|
306 |
|
|
|
(8,837 |
) |
Total underwriting profit of
operating segments |
|
19,832 |
|
|
|
12,829 |
|
Other operating expenses of
the Corporate and Other segment |
|
(9,282 |
) |
|
|
(7,874 |
) |
Underwriting profit (a) |
|
10,550 |
|
|
|
4,955 |
|
Losses and loss adjustment
expenses - retroactive reinsurance |
|
(16,863 |
) |
|
|
— |
|
Net investment income |
|
25,772 |
|
|
|
16,267 |
|
Net realized and unrealized
gains (losses) on investments |
|
407 |
|
|
|
(5,010 |
) |
Other expense |
|
(415 |
) |
|
|
(301 |
) |
Interest expense |
|
(6,616 |
) |
|
|
(2,292 |
) |
Amortization of intangible
assets |
|
(91 |
) |
|
|
(91 |
) |
Consolidated income before
taxes |
$ |
12,744 |
|
|
$ |
13,528 |
|
|
|
|
|
(a) Included in underwriting results for the three months ended
March 31, 2023 and 2022 is gross fee income of $5.7 million
and $5.6 million, respectively. |
|
Adjusted Net Operating
Income
We define adjusted net operating income as
income available to common shareholders excluding a) the impact of
loss portfolio transfers accounted for as retroactive reinsurance,
b) net realized and unrealized gains (losses) on investments, c)
certain non-operating expenses such as professional service fees
related to a purported class action lawsuit, various strategic
initiatives, and the filing of registration statements for the
offering of securities, and d) severance costs associated with
terminated employees. We use adjusted net operating income as an
internal performance measure in the management of our operations
because we believe it gives our management and other users of our
financial information useful insight into our results of operations
and our underlying business performance. Adjusted net operating
income should not be viewed as a substitute for net income
calculated in accordance with GAAP, and our definition of adjusted
net operating income may not be comparable to that of other
companies.
Our income available to common shareholders
reconciles to our adjusted net operating income as follows:
|
Three Months Ended March 31, |
|
2023 |
|
2022 |
($ in
thousands) |
IncomeBeforeTaxes |
|
NetIncome |
|
IncomeBeforeTaxes |
|
NetIncome |
Income available to common shareholders |
$ |
10,119 |
|
|
$ |
6,983 |
|
|
$ |
12,653 |
|
$ |
9,330 |
Losses and loss adjustment
expenses - retroactive reinsurance |
|
16,863 |
|
|
|
14,406 |
|
|
|
— |
|
|
— |
Net realized and unrealized
investment (gains) losses |
|
(407 |
) |
|
|
(373 |
) |
|
|
5,010 |
|
|
4,190 |
Other expenses |
|
575 |
|
|
|
575 |
|
|
|
347 |
|
|
347 |
Adjusted net operating
income |
$ |
27,150 |
|
|
$ |
21,591 |
|
|
$ |
18,010 |
|
$ |
13,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Equity (per Share) and Tangible
Common Equity (per Share)
We define tangible equity as shareholders'
equity plus mezzanine Series A preferred shares and the
unrecognized deferred retroactive reinsurance gain on loss
portfolio transfers less goodwill and intangible assets (net of
amortization). We define tangible common equity as tangible equity
less mezzanine Series A preferred shares. Our definition of
tangible equity and tangible common equity may not be comparable to
that of other companies, and it should not be viewed as a
substitute for shareholders’ equity calculated in accordance with
GAAP. We use tangible equity and tangible common equity internally
to evaluate the strength of our balance sheet and to compare
returns relative to this measure. The following table reconciles
shareholders’ equity to tangible equity and tangible common equity
for March 31, 2023, December 31, 2022, and March 31,
2022.
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
($ in thousands,
except for share data) |
Equity |
|
Equity pershare |
|
Equity |
|
Equity pershare |
|
Equity |
|
Equity pershare |
Shareholders' equity |
$ |
590,915 |
|
$ |
15.71 |
|
$ |
553,766 |
|
$ |
14.78 |
|
$ |
647,677 |
|
$ |
17.30 |
Plus: Series A redeemable
preferred shares |
|
144,898 |
|
|
|
|
144,898 |
|
|
|
|
144,898 |
|
|
Plus: Deferred reinsurance
gain |
|
36,954 |
|
|
|
|
20,091 |
|
|
|
|
— |
|
|
Less: Goodwill and intangible
assets |
|
217,416 |
|
|
|
|
217,507 |
|
|
|
|
217,779 |
|
|
Tangible equity |
$ |
555,351 |
|
$ |
12.84 |
|
$ |
501,248 |
|
$ |
11.63 |
|
$ |
574,796 |
|
$ |
13.34 |
Less: Series A redeemable
preferred shares |
|
144,898 |
|
|
|
|
144,898 |
|
|
|
|
144,898 |
|
|
Tangible common equity |
$ |
410,453 |
|
$ |
10.91 |
|
$ |
356,350 |
|
$ |
9.51 |
|
$ |
429,898 |
|
$ |
11.48 |
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding |
|
37,619,226 |
|
|
|
|
37,470,237 |
|
|
|
|
37,448,314 |
|
|
Common shares from assumed
conversion of Series A preferred shares |
|
5,640,158 |
|
|
|
|
5,640,158 |
|
|
|
|
5,640,158 |
|
|
Common shares outstanding
after assumed conversion of Series A preferred shares |
|
43,259,384 |
|
|
|
|
43,110,395 |
|
|
|
|
43,088,472 |
|
|
James River (NASDAQ:JRVR)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024
James River (NASDAQ:JRVR)
Graphique Historique de l'Action
De Mai 2023 à Mai 2024