James River hit by losses in Q4 financials

Company is now "purely focused" on one segment

James River hit by losses in Q4 financials

Insurance News

By Kenneth Araullo

James River Group has disclosed its financial outcomes for the fourth quarter of 2023, revealing a net loss attributable to common shareholders.

The loss was primarily due to discontinued operations, including a notable $80.4 million loss related to the held-for-sale classification of JRG Re and a $89.8 million loss from other discontinued activities.

Within these figures, $53.2 million was attributed to losses from JRG Re’s fixed maturity securities, as the company acknowledged it no longer plans to retain these securities until their fair value can potentially be recovered.

Despite these challenges, James River reported an adjusted net operating income of $12.4 million ($0.33 per diluted share) for the quarter. This was supported by strong investment income and profitable underwriting achievements in ongoing operations, especially within the excess and surplus lines (E&S) segment.

This segment, James River explained, achieved its highest annual and second-highest quarterly gross written premium to date.

Other figures for 2023 included a group combined ratio of 96.5% and a record-breaking gross written premium exceeding $1.0 billion in the E&S segment. This represented a 12.1% increase in the fourth quarter compared to the same period in the prior year.

Additionally, new business submissions within the E&S segment rose by 14.9% in the fourth quarter year-over-year, with renewal submissions also showing strong growth.

The E&S segment’s combined ratio was reported at 94.2% for the fourth quarter, while the renewal rate climbed by 11.0%, including a 10.5% increase in casualty lines. Virtually all underwriting divisions within this segment reported positive pricing adjustments.

The specialty admitted segment posted a combined ratio of 92.2% for the quarter, with 12.5% growth in fronting and program gross written premium, excluding the non-renewed California workers’ compensation program.

Furthermore, net investment income surged by 67.0% in the fourth quarter compared to the same period in the previous year, with all asset classes experiencing significant income increases.

However, shareholders’ equity per share fell to $14.20, marking a 4.7% decrease from September 30, 2023. This decline was primarily due to the loss from the sale of JRG Re, although it was somewhat mitigated by net income from continuing operations and unrealized gains in the fixed maturity portfolio during the quarter.

Frank D’Orazio, CEO of James River, reflected on the company’s performance, noting that 2023 was a year of “significant transformation and strategic progress” for James River.

“The company [is] now purely focused on our E&S and fronting platforms,” D’Orazio said. “During the fourth quarter we eclipsed $1 billion in annual E&S premium, a significant milestone for the organization that demonstrates the strength of our franchise, driven by meaningful submission growth. We expect to continue to build on this momentum in 2024 as our team remains focused on leveraging sustained attractive market conditions.”

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