The former casualty reinsurance segment is now discontinued.
James River Group Holdings has announced its financial results for the second quarter of 2024, which include a group combined ratio of 99.3% and an adjusted net operating return on tangible common equity of 14.9%.
The release of the most current financial reports comes shortly after the bumpy sale of its reinsurance unit, JRG Reinsurance Company (JRG Re), which is now being investigated in a lawsuit.
The combined ratio for the excess and surplus (E&S) segment was 95.4%, with a 9.1% increase in renewal rates. Most underwriting divisions had positive pricing increases.
The speciality accepted insurance category had a combined ratio of 85.0%, with a 12.3% increase in fronting and program gross written premium, excluding the non-renewed workers’ compensation program.
The quarter’s net investment income climbed by 36.7% compared to the same period in 2023, with higher income across all asset classes. Shareholder equity per share climbed to $14.32, up 0.8% from March 31, 2024, while tangible common equity per share increased 0.2% sequentially.
The company completed the sale of JRG Re on April 16. As a result, financial data for the old casualty reinsurance business has been reclassified as discontinued operations for all periods.
Net income from continuing operations available to common shareholders was $11.9 million, or $0.31 per diluted share. Adjusted net operating income was $12.7 million, or $0.33 per diluted share, reflecting strong investment income and profitable underwriting results from continuing operations.
CEO Frank D’Orazio stated that James River’s focus was on de-risking the organisation and creating good returns on capital.
“E&S market circumstances were favourable in the second quarter, with accelerated submission growth and a robust rate environment, as we continued to re-profile areas of our portfolio. While we completed an appealing retroactive reinsurance transaction this month, our board of directors continues to investigate strategic alternatives for the company, which were announced in November 2023,” he stated.
Other segment results for James River
Net investment income for the quarter was $24.9 million, up from $18.2 million in the same period last year. This gain was widespread, with income rising from private investments and other investment classes.
The annualised gross investment yield on average fixed term, bank loan, and equity securities increased to 5% in the quarter from 4.3% in the same time in 2023, owing mostly to rising market yields.
The company recorded net realised and unrealised losses on investments of $2.3 million for the quarter, compared to gains of $1.6 million in the previous year quarter. The losses were mostly due to sales in the fixed income portfolio and fluctuations in the fair value of the common stock and bank loan portfolios.
In connection with the conclusion of the E&S loss portfolio transfer and adverse development cover, James River transferred about $310 million in cash to counterparty State National Insurance Company, Inc. for premium payment.
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