JRVR - Earnings call transcript Q4 2017 | James River Group Holdings, Ltd.

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Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2017 James River Group Holdings Limited Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call may be recorded. I will now transfer the call over to Kevin Copeland, Head of Investor Relations.

begin. may You

Kevin Copeland

Good River Nicole. and to welcome Thank fourth morning, quarter James Group call. XXXX the you, everyone, earnings conference

call, subject actual to results making be risks and based intentions, we differ may These various and the cause which expectations are are beliefs, on materially. forward-looking that assumptions to uncertainties, statements current During statements. will

and Form For cautionary and statements recent forward-looking earnings Commission. release call Form language filings statements. any update and Myron, we the make the our a with James forward-looking Factor XX-K, to in over the duty discussion of We Securities of Exchange of I such other any turn Group. risks and CEO and regarding undertake do now Bob uncertainties, will please not see River section to Risk reports the XX-Qs yesterday’s most

Bob Myron

Chief year because you, actuarial point, Bob approximately this poor quarter Sarah Thank This our Kevin call. mature. to several years Good fourth me welcome type going loss had heads loss is are commercial our underlined auto At data million to with reserve studies. account. of our more of That of right and Officer Kevin. auto quarter we've and in. Doran a during evident jump our earnings fourth been we one Investor Relations. morning, Investment Myron business for in this CFO, became who development $XX riding I'm commercial here also large and is new end and the Copeland

restructuring by in our are by appropriate year as is with consideration this that in I ultimate to we end as changes run we XXXX geographic The XXXX am better in terms driven December scope. and XXst. XXXX than accident account at effective from of pricing year and XXXX work, confident much to looked comfortable renewed of issue March changes and loss been with reserve this result changes As question in our and pricing in and contract, in picked of conditions. changing miles some year us. is behind and recently by year It accident grew Xst part of instance each for pricing in XXXX terms has conditions as additional significantly a as well with terms division

result a bonuses quarter, disappointing of significantly and the As line fourth were eliminated. senior reduced was management

up core of to book our that the generate underwriting was profitable account in year with works We XXXX, enough strong the just of I During balance put sheet. another ended strong increased business even a as year losses we mentioned.

as very reserves which a Our with. of percent net that IBNR a total is comfortable we level basis a are on group XX% is wide

Our exceed I'm the held actuary. for reserves on several to prospects independent as XXXX that our reasons. bullish point continued of

auto the account commercial renewal The first I the just is of mentioned. that

have renewal the going to to pleased expect forward. significant this completed and insured are have a We relationship with

admitted pricing rising of we E&S our our fourth E&S admitted to space. couple This core in third average XXXX. X% a quarter. in study the the X% E&S, in new of in inspiring closure Second, strengthened pricing relative Also by business businesses. had rate up E&S core our showed own were in the party number compared Moreover, to fourth large reinsurance in reinsurance an rates divisions, experience our of business E&S, In on largest segment, have our XXXX the significantly Underlying in segment. by increased improved. and increase in of terms quarter contract fourth the we with adjusted quarterly to business year-over-year seen space, significant the increase In continue seen in the X.X% rates and in rise in the index rates compensation was workers accounts have casualty both quarter. years increased submissions come quarter a consistent seated loss X.X% our into significantly to our our In book, January. XX

liability first, of coverage classes The general for restaurants. certain is

aiming in market The division nursing homes. we second, in verdured business is coverage with is division substantially a with increased limits in lower up This admitted is performed has and which of pricing are E&S now and poorly clearly and hard the it. as forms. It market liability such and in on higher tighter coverage market capitalizing healthcare is the classes this being comprised our non- retentions, now is allied right

we a in for our steady specialty fronting segment. within opportunities seen have growth flow admitted Lastly, business of our

as as segment both of the growth number well in overall. in the expect accounts We

and the Sarah? we greater. factors, equity and or U.S. call Happy business combined more report but to provide XXXX into a to our to earn new to in in on these XX% to regulations expect to return Given color answer the I'd more questions, first other of Q&A give XX% XX% insights to and to tangible ratio reported session turn between during like to Doran Sarah the results the and tax plans over our react on our

Sarah Doran

morning, Good Bob. Thanks, everyone.

that million. adjust $X.X made increased profits strong a a noted, E&S of $X.X account, we and continued single sheet. very despite X.X% operating weakness profit growth were in to billion E&S the the ended the of low income a million, our $XX.X a underwriting reserve balance the In underwriting Net fact in assets investment grew XXXX, reserves with and fourth in we XXXX. to net invested substantially As flow. profit XX.X% and $XX.X cash in income million year raised, results Bob investment we million $XX.X quarter alongside Investment generated an reporting operating to income

exceptional partnerships private energy an of other XX.X% year. return investments and generated on renewable the Our

were and events. the quarter. the the pay from X.X% in this We report resulted downs million reduction expense not groups the within XX.X% losses experienced the more deal we great business X.X quarter, XXXX. book to including a take on ratio, that comes auto fee this a the you all and to a XXXX. to other in The point in expense certain investment our in related losses development the which reduction XXXX million of it which change and and offset imagine, in income of to XXXX did segment generated and of of reinsurance E&S catastrophe made third we portfolio income income as accruals Texas Florida our experience quarter can on any the or mix attention fixed to as experience income growth E&S and casualty booked quarter things, to modest which The We Our the growing that segment did admitted few the $X expenses. did acquisition commercial and $X.X reflect in an than lower We our segment to favorable during XXXX. XX.X% related a decreased catastrophe fourth in specialty ratio costs fronting our in business refinement with is approximately

tax be this over our our U.S. impact of we will results. our rate Finally, accruals internal will for our we press share XXXX, by Re quota be mentioned will $X payer. five the release we U.S. to rates of restructure because with named a release double-digit X:X, night, seed end share effective have disappointing approximately a company. companies in de-election the that newly last our will in we outcome effective our reinsurance line Effective which make as tax our our we or Through on U.S. made Class our law been so million. we of owned had press Bermuda new we reduced corporate mentioned in Also quota by formed specifically last in last is low and bonus to some tax Re. changes structure the XXXX our in be Carolina XXX minimize internal more tax range. believe the to we've owned our Bermuda-based The anticipate of or a at years underwriting Instead, Carolina results, the to night, reinsured reinsure which fully will XA

Our additional will policy support. layer will stock third party to business casualty rate write the Re of Re provide reinsurance Carolina we Carolina it business also casualty our a through group. are Bermuda-based capital reinsurance impact an location not issued that with market morning, Best confirming reinsurance A.M. cover. for a the company loss expect these for the pay restructure. rate our release unchanged this of do for ratings our earlier this We press premium within And which a structures to

As our groups expectation years, the of over a that creep will period tax up. rate

to scaled down returning on write our likely premiums to capital party continue U.S. a XXXX compared will optimize look business been generally as as We thorough return to in be reinsurance business we what of the segment casualty is better the but in our to third are book

opportunistic. change, However, if be conditions we will

shrinking and the in in growth and growth in moderate growing expect written across insurance XXXX, group premiums reinsurance. We

to than tax the historical XX%; year higher five our back XXXX for was year, past Turning of our average the year considerably XX.X%. rate

our to a of reinsurance Bermuda. than average historical quota E&S casualty internal tax any of share, Our our Because segments generated realized lower and in underwriting loss process is portion led a in actually onshore rate. higher

a the at U.S. tax were result, of in into taxed rate. a and are As earnings we percentage larger much they a our corporate higher

lower we an reduced a high, While as our we're knows Cuts mind resulted taxed the reaction tax rate tax in and The less federal rate in XXXX keep deferred making reduction to and was which the from XX% rate income. to a corporate commenced increase $X.X of in Jobs quarter annual everyone the In to relevant. tax rate rate tax Act on million quarterly this, deferred liability tax reduced XX%. reflect of exceptionally U.S. operating fourth Tax our basis to liability a

the $XXX We ended million $XX.X the of XXXX to basically million paid dividends the by We cash continue million; in XXXX. year. had from Operating quarter our $XXX.X at for was to we for prior $XXX.X a dividends from during shareholders' equity unchanged end the We cash and of enjoy businesses compared of growth. million million as strong $XXX our special increase driven flow XXXX. with flow tangible

rose the year X.XX or end times being are to to effective at end XXXX. at of to assets leverage as compared as use X.XX Our premium put operating times

list. covers my on I everything think that

me to you. it Let turn back

Bob Myron

we thank the please session. for Sarah. line the Alright, you for are Operator, questions? open ready you, Q&A Can

Operator

of question of Mark Thank SunTrust. you. [Operator from Instructions] the Our first comes Hughes line

open. line now Your is

Mark Hughes

good Yes, thank morning. you,

Bob Myron

morning. Good

Mark Hughes

and the on Could the is account in business give on little Good the more XXXX? on conditions you of there morning. change new the large geographic any a in renewal terms scope and the detail

Bob Myron

don’t client of fact around Xst, that This XXXX, for a individual can -- Yes, sure the we're Myron. is particular has approximately this within detail will you Bob the a I into amount geographic is that on I grow going and expecting this It gross the to pricing largest forward expect an know of insure the March we our relationship account like. be states Mark. because of is from this on write a and and that here policy XXXX basis going tell XX get perspective date, that want to relative from U.S. it's to we as that forward tremendous XXXX year. to the premium policy insurance going premium in written the

Mark Hughes

in Just then your loss set the talk or both for were this about picks the If us the about XXXX compare for XXXX XXXX same updated picks careful this higher you on of think presumably give in losses reviewer and business. your losses on pricing loss business? we how account. of XXXX Could XXXX how in sense much some your seeds more you XXXX or versus

Bob Myron

Yes.

But pricing we obviously we again pricing third about was And to there shared are is also contract, it's for like. there conditions that would at by comments this I found this loss respect changes validation went commercial actuarial we looked booked and are contract. end ultimate we another that prepared changes ourselves And talk how think or it specifics in and of which for as where of go we made again feel year. we've our point auto terms picks my which to the we forward. contract high aware terms structured division how want ultimate think premium enough and talk every managements structured. and I is were with to activity. pricing did some of our the instances earlier comfortable how and But were changes, percentages now I that year in the and to about my were review, our the And through is comfortable significant deal got the us terms adequacy. comments not where with IBNR and booking I back to respect of from point party in reserves underlying XXXX, And I'll there estimate don’t of know the comfortably that have you're reserve the the changes conditions, to going

Mark Hughes

fix and you about a XX% that E&S, about question. you're past good Is to for adjustments. loss When XXXX? final excluding start at think And for were XXXX the place

Bob Myron

tie I for want we that loss pick to don't know a action to XXXX, specific Mark.

I ratio and that stick guidance with given ROTE perspective. a we've think the to we wanted combined from

Mark Hughes

Is given any this me ready the -- pricing ask that should particular business, given account, it reason let of just is appeared factors your up? for flow there, this there pricing the go should

Bob Myron

Not expecting I to a think that a We see guiding right we think. now. we verbalize I be don't want substantial but No, specific change to wouldn't number.

Mark Hughes

you. thank helpful, That's

Operator

you. Thank

JMP Matt J.P. Securities. from line Our Carletti I'm sorry, the comes of next -- question of Morgan

is Your now open. line

Matt Carletti

Good thanks. morning. Hi,

Bob Myron

Good morning.

Matt Carletti

Hey, Bob.

in terms for specifics whether behind street it's confident us with, through in on your get and is client like a of help compared was thing was the to it that really and but that things can the XXXX of or I'm you the to geography and I fixed and the back surprise apply just little that premium bit then strong driven the was comes miles know can understand that too go to for large to relatively that. you, feel Sorry that get around trying touch bit don't think but I wouldn't you little want it that about, 'XX to and a better XXXX growth the into you 'XX. on it's to to that you clearly or go Can pricing that confidence important to contract much

Bob Myron

Yes.

limited So, I to geographic of combination new history new businesses the think loss to miles the the a it's and some because and market expansion We place of obviously insurance had us. driven.

the plus it we In higher there, of wrote than was that about been it in XXXX. terms premium has XXX%

think the substantial the way. not expansion for same geographic states growth So, I then us occurred, all end exactly as performing and up

some in behind that's corrective it. reasons And But refine so, we took and that to continue we XXXX the forward. respect actions that going in really

Matt Carletti

things loss be changed is Okay. on of corridor help last changed is for or it pricing a feel of of risk? of of you that the And have that would out of what sorts over balance help. think of there; conditions. it on might then, not Can the kind to sort the Thanks. renewals couple I kind give things terms us but more

Bob Myron

Yes.

risks risk what I what think things they but terms of it number and the of they getting during that periods retentions, types coverage of a without specific, various various know number is the it's different were we what into state be. we exactly rise, a it's the its could the sort factors. of of that on, It's in share applies that of the are

Matt Carletti

if maybe if going purposes a issue? a it's One commentary little at flexibility in longer shrink the reinsurance my keep and to from one casualty a more us not for hurdles. we just And What less of I not of offshore what capital that reinsurance or kind attraction as primarily the could, what things? of I right. and you're casualty around more you little. topic. casualty we ahead, away comments view offshore more order write implications should staying Can lines least the tax versus in Okay, terms the term. on tax if core Could onshore on in think can forward. of little reinsurance, a an so you expecting your specifically those and U.S. help is appreciate kind profitable think is view why kind about is to is, of us magnitude player, maybe And in you it with of is versus two return Bermuda not meeting it's help of with then, you why of further needed tax your along Sarah,

Sarah Doran

up of come in if I'll back take then that kind and Sure. order questions clear. and those works various

Matt Carletti

Sure.

Sarah Doran

from I topline $XXX to to we casualty don't in XX% which just over topline that business the segments. on questions. a think, last see to a the that all to group, get giving wrote I want I see significant want we expect in significantly into think guidance would year. if don't in pitch insurance this of modestly grow whole as our of rate. growth would down avoid I almost game as your any I But that. But obviously we be of GPW was did expect growth million this on of that we'll and insurance almost year. casualty

Matt Carletti

Okay.

Sarah Doran

than One thing though business to year. point earns out more that over is a

growth lag XXXX. see in in some So, of earn the the coming from we'll

So, it's point. one

Matt Carletti

Okay.

Sarah Doran

rather so piece, that it's But quota and Re as the the tax to there new Carolina that couldn't policy be And owned for stop the loss the is will just or casualty our benefit given the -- that the only or to A) also has of share company party premium tax companies segment. share the that two that into business. business capital On Bermuda U.S. up the the party to re-company didn't that; capital third JRG it pieces out we are benefit setting standalone Re the for our will our rather which tax not JRG as in that going third the write side benefit slight pieces that support have be that. piece. the company. than We quota written reinsurance by through comes helps that tax important capital, is enjoy will towards other

address. So, that's one thing just of to kind

I think the think better our some that the Casualty if from our fair optimize say returning can we business hits return sense that that over last make take pair to we Re continue few business to believe improved; do hurdles. I The have make But we business very think it's years, really overall group other though I we business. for is that what and has down business achievement we earlier in for

could We do Bermuda differently is having not right. I argue returns of business will reinsurance that as write that. well tax to ability there business make generally –- add capital not that, of in thing we performing are and some that and the to of likely The flexibility better capital but I'd you're that Re our most last if So, ongoing think as I that say benefit. our U.S. business we business business continue any pieces our an hold And longer, there -- today significant would as add-on in well Casualty obviously a not provides Bermuda the we having the benefit. and impact

as and So, that effective of group to really structure a changes the solid get U.S. which of low at rate, the for us came double-digit tax and the to This is end December. a from very efficient group. to the out that a structure tax forward is a for move outcome best

Matt Carletti

Okay, great.

Bob Myron

me. Let

Matt Carletti

Sure.

Bob Myron

me on Let that. just it strike

and Just us moving we team are material is. seeding not underlying terms time manifested And of improvement likely reinsurance increases. still certain think really more years a continuing the the here. and cost given of going a And towards book basis. thoughts. for underlying have we general terms a portion first book a quota as refinement a which this E&S it also it's few really see priced in conditions we're that they've of be business share the completely of on price I the that for rate been seeing lower how is of almost couple type is share. get and conditions, here. think, already the it's the quota ship to in in like more that quota of liability We are mostly And to but improved done a is much business On it's in job I we They've

that And this had so, team's we in good tenure. experience with

about So, true segment. the well that's we're positive sense Re my as as still why Casualty

Matt Carletti

the Thank much it. Okay, answers. I great. very you for appreciate

Operator

of comes of B. Binner next our the question And from Riley. Randy you. line Thank

Your line open. is now

Randy Binner

few a reserve. I good Hey, on morning; have thanks.

of activity So, in what in did was missed but if commercial the auto? quarter reserve and break -- the this the out I I you apologize outside E&S did

Sarah Doran

we it included But one. what just --

Bob Myron

we Yes, did not.

Sarah Doran

The number. total

Bob Myron

Yes, we not. did

Randy Binner

share that? you Can

Sarah Doran

coming We then did the not your core this from, and is from That's Randy? where take down we question business quarter.

Randy Binner

okay. Right,

just the E&S was So, flat, that book core right? is

Bob Myron

and get see million large Yes. from of XX has that settlement And yes. of -- development. segment Right, have XX face can the and the could I equation can you account that fact you of million

Randy Binner

Okay.

Bob Myron

take core down was the So, flat.

Randy Binner

-- And the so, comment, it to your was and you point book then or auto book was Bob, about reference in E&S being the to overall? commercial the above estimate. that Are

Bob Myron

group. the It's entire

Randy Binner

Can that of and us little of for that range account? conversation you're how that -- kind a where you outside that single scope went sitting in more the that in and

Bob Myron

what I'm you're not --. exactly but sure getting at

Randy Binner

sense just a trying I'm to get how. of

River one has was been reserve deficient segment the was year. core So, last commercial your already auto over story James area years E&S -- of redundancy of it that the in it

would So, how was am the there a think is could already the we're of reserve to result be deficient your a but reserve some getting on how of of business indication based I review. what from guess about I perspective as what seeing kind I rest do it should

Bob Myron

third by on that division and we so I we've that's right. segment example by Yes, and don't to where the broken down relative so actuary forth. are booked relative party to ever Yes. for think

has I you and sought have record framed actuary. historical carried in of is to reserve has the had generally And pick think consulting out, by redundancies. the as firm. part that well-known pointed be been is this general old would that internationally what actuary, -- in a we've of periods management I a above track That we say loss large prior independent

selected so its that overall we that matters. feel about where and break a what down really And us we gives is reserves the provide could and has well -- that haven't; think makes I us good some management

Sarah Doran

changed details, to think to Well, into what I materially of year-over-year, get Randy. the that that it is hasn't the would say them I not is geography

Bob Myron

That's right.

Randy Binner

correct. that's Yes,

Sarah Doran

where those are pieces from. coming It's

Randy Binner

guess. I Yes,

Bob Myron

substantive swing look so where you in been that. we've and division and seeing or deficiency so by any on disclosing segment not comfortable where at where forth, we're not it's I changed the redundancy materially that We're or from when mean, historically.

Randy Binner

your And you Okay, opening that's that non-M&A were shifting liabilities market. to in healthcare, comments then in mentioned restaurant some the helpful. allied just

Bob Myron

Yes.

Randy Binner

with What briefly pricing what of term in. with Can how of they're flex you do on and a just wrong or kind fresh share you us kind you those at kind items those those get of them? look or went get when risks

Bob Myron

Yes.

I period think what been for went admitted time. they've is the of in wrong space some

has And are is divestible appropriate pricing a going think And much by be so coming in market, the five well pricing a cost on in broader been admitted that then and situation pretty the set and difference. and years that or particular that. of coming much better and not conditions, there us it therefore it like and better just to the a a get think, accounts what's on is think four non-renewed make and between form admitted our terms so lot significant not of terms to the in big these got they inflation through it's E&S. either to went of getting and the conditions things loss and had the and to been space and I price so and been E&S. size later placed able being really about only just options but now coming back rate I simple it's coverage. to and had nursing several to lower I and substantially it's to in behalf underlying the speak I admitted late pretty a business in and forth needs well, They market performance and went of some up has years or flexibility E&S mean, ago without performed as home,

it's admitted we're the so, just substantially areas strong out And market. increased And coming where had those the two because of of pricing. admitted space in it's that flow performance seeing are really

Randy Binner

more just or problem? that, One problem Is these more it like is litigated a that of on underpricing the that. Is general claims? are

Bob Myron

I think its underpricing. general

the sustainable loss I the or in them. are based being think ratios well pricing what was were excess upon for just received that of

Randy Binner

Okay, you. I'll leave Thank it there.

Operator

you. Thank

the line KBW. comes Our next question from Shields of Meyer of

is now open. Your line

Meyer Shields

morning. good you, Thank

couple One, how corporate of to large with small questions. XXXX, does Just in that about compare XX account having you this XXXX? Bob states talked

Bob Myron

Its Yes. XXXX XX. was

We have all but Texas, previously.

Meyer Shields

Okay.

Bob Myron

the thing and that we from of to account here while it's the to pricing expect grow so insurance think important because and a still note I largest premium But the we are relationship so and perspective are driven is forth. we on

Meyer Shields

actual helpful That's the party past, in at on still sense. that I the an and arrangement, terms premium that minimum least share quota understood new been volumes. requirement makes matter you've the operating based Okay. was there In guess third premium of Does structure? concept

Sarah Doran

stop reference say does it's Well, indirect of but been write kind there that's how to frame of an the I in loss. would it matter obviously be to able

Meyer Shields

Okay.

Bob Myron

still matters? Yes, it

Meyer Shields

One, you to of you in sense segments E&S considering in increases that? it's us other talked fine in of terms core price be E&S. core surplus And excess helpful. Can included you're about not the two the in give questions. thanks, No, much a what's in and Okay. how

Bob Myron

term. defining cores We're not Maybe that's defined our auto. commercial that's sorry. Oh, just everything Yes.

So, we business is our before doing started all this legacy commercial auto.

general for -- the divisions. manufactures casualty all contractors professional book, that energy other it's healthcare So, condominiums and all it's liabilities, and stuff. valid of Everything

Meyer Shields

the on will to higher shift tax will premiums where will be will investment rate has more non-tax investment been? Is say is on investment my the profit go Okay. income from that that apologize I are helpful going and going from last words, on to since in the underwriting the way income that to taxable it rate are entities very entities on going it. tax net for and the year-over-year -- on of be lower. assuming other to a volumes premium Does that income yes And that phrasing reasonable That's trying down tax am thinking the that U.S. just to the it? be mean In basis. U.S. net question. convenience paper of clarifying. underwriting under and income But of I a mix

Sarah Doran

is Yes. it's It's stop the that's now there a there that's in really piece a that. because doubt loss, only just changing right

lot I fairly likely more in you're a in is what have think what we'll think it time is saying Bermuda. have that of over premium we of I part it's and U.S. relative to the

the where up I rate over time. kind tax about that's creeping of So, talk

Bob Myron

-- income. Yes. investment And

Sarah Doran

will as invest kind to line. draw that which But drive well of as income

feature overnight So, likely that is not an multiple over that's the dynamic years. but

Meyer Shields

that's helpful. very No, Okay.

I got so thanks think and I've much. it

Sarah Doran

Thank you.

Operator

Thank you.

Meredith comes line Brian question next of Our UBS. of from the

Your line now open. is

Brian Meredith

here. questions quick of Couple thanks. Yes,

other First, I write sorry question cause you couple this this questions did that you contract the your should rest guess recognize something maybe be doing? in type make any the is, to one. beat to that you business with of on on to make you commercial the or but of large a auto first changes share experience contract have

Bob Myron

it has not. No,

and some spread. geographic I very those smaller think lot a accounts They of as can be more differently. structured are not in respect regional,

say one So, It's the opportunity really haven’t really on. me but one book on And anything than a us commercial for it's -- the thought rest has hasn't it this that's I is to question caused this insurance auto good. our of an but other been this else. year very from say performance good to to change, about has

all So, years insurance and fine subsequent the two and 'XX well. have has rest of auto the been very for to prior commercial the performed

Brian Meredith

a different listen was different to up we're or own of to of just ended And nine these admitted was it curious the quote? just market states going saying I'm you. reduction doing going kind states, admitted carrier are by in up in carrier, uncomfortable that just ended that more just Got your or being or competitive color market that

Bob Myron

the than given overall natural how anymore account and don't diversification just I standpoint from large so probably is that. want say to think but a and it's

Sarah Doran

imagine I was say in I it can sure don't outstay you we I mean, that the for the of we E&S risk. would given as can't imagine but know nature just negotiation they're but. think market the

Bob Myron

Yes.

Brian Meredith

compensation what of happened seeing E&S insurance then And now aside loss and what your on you this you okay. right Bob book just happening a trend little now? you, then maybe also right bit respect with what's workers can to from talk kind Got are with with contract,

Bob Myron

Sure, yes.

the So, question more was with trend first loss on?

Brian Meredith

I acts you benign you trend business, loss you right are seeing auto fairly pickup? talked commercial thing. under are whole What think any has seeing about, been just Loss, this E&S both it I mean now,

Bob Myron

I would a say not lot. overall

think On and I have years happy compensation, emergence. from was we we had perspective. well saw several with workers still loss think we reasonably it's I what benign loss we're really strong ratio reported our

nine year then the were of years fourth been for the been rate moderated has what pretty the five quarter. run and months in higher significantly The than it would have first

and I continues was don't look that trying sort cost it that much to talking say about that's or all think, margin increase multi-year X% to of how but why and earlier And when loss so, but go being pricing the at saw. we I loss ends on because where of that trend on analysis adjusted basis going" together that's is and index like expansion look to put that's and margin "Okay, a underlying to do a know the pricing cost net where cost I we therefore that are down. going what is impacting we X.X% loss And relative cited what

written a I our of because to play opportunistic a workers So, seeding We perspective. we compensation margin got we've individually it's relative business a think modest some you an furthermore, bit a time to had that some a And buy the from with fine an of been some bad that share we decision and to into commission quota expansion, spot this place when a XX% in little are quota on having effective that October workers do ability attractive we in expansion states share the had have I go were. think place made state never out neighboring to the is we had, what that more stage in that cost we was acquisition book Xst, some bit own reinsurance. compensation

moving some take And and do. a what that's attractive into we so, volatility the to new about little places we decided and got potential we pricing we thought of could

Brian Meredith

a went was just it share other Great. forward with on that then premium share, just was or And curious quota go on there business? it just that quota

Bob Myron

was not. There

Brian Meredith

Thank great. you. Okay,

Operator

Mark of from Our SunTrust. question line Instruction] Thank you. [Operator the next Hughes comes of

line now Your open. is

Mark Hughes

assume 'XX Is can early your XXXX subsequent your this reasons confident then fourth already looking to XXXX. that starting loss we then the the see to and And the of you reserves? more XX% pick quarter a current you you. fourth of XXXX little in the exiting XXXX XX% in started up loss one and in XX% about stepped ratio quarters the of you stepped E&S, in that and sort up sort XX%. through that are thank Yes, early late in of at Were quarter

Sarah Doran

Yes?

Bob Myron

The outlook.

Sarah Doran

exiting saw growth of So, commercial movement last at likely of is the are loss over of the a the I months and point you and with I the amount up pick there. think that shift really obviously we the market mix XX share fair that auto a think the of stabilization

that's on whole that's mix. the as really reflecting what as I So, throughout book think well

Mark Hughes

putting Yes. XXXX books. the the Understanding, on business you're

and the earned loss Your XX. only QX fourth That of really stepped XX%. premium it you XX, that a where your up pick growth similar growth quarter is QX. accelerated But in in to rate had was still

the So, we loss shifting the up. that in like year the it than earlier mix pick later was things go the was in year saw already

mix all what shift that perhaps hear some over recognition it carried were and influencing that but timing that saying that there you're XXXX? this to I business and needed into like the So, against reserves you seems put extra some maybe

Sarah Doran

picks obviously ratio of events third this through exiting it. had care the XXs quarter business the at loss loss there. which the Pretty in looking in just I'm the kind of with the in and consistent E&S or exception the the No, low-to-mid number

Mark Hughes

that's know I XXXX. right. back I'm Yes, going to

Sarah Doran

towards was the obviously XXXX, we I With, this Yes. material mean which account to are the in is now. of end what reacting growth

Bob Myron

is And a book do guess business. that rest the higher yes did mentioned a this you're at I what book getting at of ratio we have as because division loss the we Yes. do E&S as I in mean we before we

year. when ratios the loss there. look year. at consideration that Obviously, at where Right, through question. the see is had we was higher that those adequacy we the end no where in are reserve the those had consideration of a we unquestionably years waiting So, at Obviously, a those to booked the end of

Mark Hughes

if then some the less? or is of similar X% accounts mix little And impact markets in risk end that a increase you pricing bit look is similar or driven that sort and up at pricing, renewing mix that much

Bob Myron

further increases there the that that if getting divisions comments healthcare you know of divisions it's that overall the the we're to and not the healthcare bear where those area. out Are that are was, the seeing I we allied rate that is two the increases core of if driving largest But had, we you not a significant leading that I with and or number; now are what's it's me say the this but it well. that question this if what it's way. waiting at. of are divisions rate because as seeking broad number a part increase that I are are pretty that's asking mark in will without are several was higher now, right rate of driving think the divisions we in one would to it the terms getting way renewal answer the allied that increases across what let divisions also that there Right like

Mark Hughes

Yes, that Thank the question. was you.

Operator

Myron hand over I this any to you. showing for am Thank the at call back I'd no time. Bob closing remarks. further questions

Bob Myron

And to operator. talking quarter. for your we you, forward call this look participation everyone you again to to thanks on next Thank and

Operator

day. for thank in can today’s and all you disconnect. conclude a great Everyone Ladies today’s That does conference. gentlemen, program, participating you have

James River (JRVR) 23 Feb 182017 Q4 Earnings call transcript