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Sep 30, 2023
James River Q3 2023 Earnings Report
Reported net income and adjusted net operating income.
Key Takeaways
James River Group Holdings reported a net income available to common shareholders of $16.9 million, or $0.45 per diluted share, for the third quarter of 2023. The adjusted net operating income was $18.3 million, or $0.48 per diluted share. The company's E&S segment benefited from strong trading conditions, with renewal rate increases of 12% and premium growth in Core E&S divisions exceeding 10%.
Group combined ratio of 96.2% and Excess and Surplus Lines segment combined ratio of 88.4%.
Core E&S gross written premium increased 10.3% compared to the prior year quarter.
E&S segment renewal rate change increased 12.4% from the prior year quarter.
Net investment income increased 52.0% compared to the prior year quarter.
James River
James River
James River Revenue by Segment
Revenue by Segment
Excess and Surplus Lines Revenue
CapyFin.comSpecialty Admitted Insurance Revenue
CapyFin.com Forward Guidance
James River is focused on refocusing resources on businesses with meaningful scale and profitability. Exposure reductions in commercial auto and increased new business opportunities position the company well for the remainder of 2023 and into 2024.
Positive Outlook
- Continued execution on strategy of refocusing resources.
- E&S segment benefiting from strong trading conditions.
- Renewal rate increases of 12% in E&S segment.
- Greater than 10% premium growth in Core E&S divisions.
- Exposure reductions in commercial auto portfolio.
Challenges Ahead
- Identified an error in the accounting for reinstatement premium on a specialty casualty reinsurance treaty.
- Error resulted in overstatements of net income of $7.8 million for the three months ended June 30, 2023.
- Control over the review of the determination of when reinstatement premiums for reinsurance should be recognized did not operate effectively.
- Resulting in a material weakness in the Company's internal control over financial reporting.
- Premium retention in the E&S segment was lower than recent periods and net written premium declined 12.7% from the prior year quarter due to the impact of a new casualty reinsurance treaty put in place for the segment.
Revenue & Expenses
Visualization of income flow from segment revenue to net income