JRVR - Earnings call transcript Q4 2021 | James River Group Holdings, Ltd.

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Operator

Good day, and thank you for standing by. Welcome to the James River Group Q4 2021 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Brett Shirreffs, Head of Investor Relations, and please go ahead.

Brett Shirreffs

Thank you, Deedee. welcome Conference James Call. and Quarter Group everyone, Earnings XXXX morning, to River the Fourth Good

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

XX-K, update and Frank For We cautionary filings and statements Form forward-looking turn we've earnings do Officer release XX-Qs language not made the most of to factors Form forward-looking River in risks our with uncertainties, Chief D'Orazio, and reports such the undertake discussion other SEC. regarding a please the of risk see any statements. and James yesterday's duty any over of now will I recent Executive the call Group. to

Frank D’Orazio

morning, for Brett, on call. thank you introduction. the that welcome everyone to and Good

of bit have our put took the we our as in points to In X our and quarter our results validation regarding and quite that casualty to that an from significantly unit year to our insurance all significant We historical operating announced our our you the new actions a we've share James behind development with external attempt emphasize River had fourth have segments receiving last along a strategic operations. night. we as the of downsize well steps information prior dive final completed as doing meaningful organization earnings deep believe with look we hurdle while so, business extinguished way. legacy Actuary Chief

continue and profitable robust the continuing on River specialty E&S is a underwriting stronger focus leverage more our us, behind James actions conditions, we while make these sector's leader. to With to

IBNR at our taken, the highlighting I issues in property profit IBNR ago last to in while did in was excellent group in any growth release, from unit. manufacturers reserve completed XXs on benefit reserve the progress is This results profitability include position small XXXX. of profit, the Admitted the underwriting ratios a in year quarter including the we're well positive driven that quarter that E&S and strong total of somewhat in we up represents E&S the the confidence pleased X I'm fact several remaining and we've with head actions now our actions obscured legacy XX.X% a basis, organizationally made months. is have We our early reinsurance reserve net retrospective that XXXX our reserves. in a growing with transactions on XX.X% confronting The since after Admitted company Specialty highest and group profitably of the of expand Specialty segments. well the as combined upon. businesses level that and the was our focused strong not the and we've combined The reported segment and the second and E&S continued underwriting ever segment, the combined Allied Health, as in writing. results million with as Excess the Growth E&S performance want that our Casualty low the profit Underwriting XX% mid- of largest of $XX million as to of fourth $XX premiums. XX.X% ratio gross reported by business contractors, quarterly excess business for of On currently

of compounding both full building rate loss of consecutive for and rate the ahead margin our the increases is now fourth the quarter to E&S segment we're consecutive The XX.X% of and that the XXXX quarter years XX% our picks the fourth rate cost the X.X% implied of in segment, over and meaningfully and had of in XX% grew the XXth book strength providing in for E&S fourth XX%, It's confidence the in year. represented in for impressive today. year. across that and up Rates the loss in core E&S excess of picks loss writing business renewal were our increases X quarter trends the that period which Our XX% XXXX. view for the of increases we're we've quarter

business For the overall growth over which million segment ago of in E&S at surpassed $XXX and premium is impressive premiums, of XX%. full $XXX years last that year, an $XXX our This million gross almost book reached million premiums, the for million or in core E&S milestone year X our XXXX. just was gross $XXX a was of end

that century we've E&S while strength core of quarter. underwriting over significantly conditions evidenced clearly line bottom remaining best our the is added top period, to some line market done of our this the results expertise so we've by focused. hallmark over this While of The

Turning were to premiums This quarter and $X.X XX.X%. ratio which Fronting combined was we of segment X% million. quarter prior to quarter. similar strong growth very income another growth program Specialty gross XX% up increased premium to last Admitted. the from the had a and year with of XX%, fee reported Gross

down remained business driven the primarily compensation portfolio from in what prudently quarter X.X% XX% on quarter for continues to focused compensation. Growth existing in programs. was risk the and for marketplace for our XXXX a workers' managing premiums were the individual for be Our workers' fronting countercyclical as we

X a -- X new have XXXX. reserve found off to and Getting to already quarter. good wrote of the for QX, the during during back so we're programs me, program quarter, continue excuse first to new of the have the in a actions We start opportunities healthy pipeline fourth

was all in of be his underwriting what Actuary, and would As Actuary. we process segments X reviews first as discussed Chief in full quarter our Chief for our November the reserve completing Gelinne, call, new Dave

than the no unexpected changes one of all The different The significantly elevated particular, those million high most quarter, undergone We our on comprehensive persistent most very the for resulted In loss given to and actions bulk significant to of segment the in our recent portfolio the adverse small methods, emanated several of the believe After conditions these evident in half quarter, to heavily the Casualty responded development are with meaningfully XXXX represents was in level assumptions exposures. year from our and By primary we this to a construction today's E&S from of XX.X% exposure underlying degree, in to our derisked have Reinsurance losses segment, To particularly charges and factors. prior in XXXX loss no have underwriting treaties XXXX, segment. underwriting for treaties improved of Re of positions Reinsurance relatively Admitted most last adverse treaties coverage net tail a construction movements in this we had also treaties to the in the are reported those paid estimate adjustment the adjustments emergence magnitude our accounts, the the and lesser exposure fourth liability, development but marketplace. from charge causing development both particularly quarter. and by significantly of and reserves weight disappointing. highest emergence particularly XXXX, the in less IBNR by defect. ultimate refine the development handful losses incurred Despite and force, of the aspects underwriting in of changes our exceeded construction making placed of experience $XXX is Casualty in indications the longer segment. extremely are that suggested underwriting for years. was pricing as actuarial more -- the our clearly of in over Roughly reserve cedents at the analysis and While years. used was of the driven including at fourth to to has general this thorough history and significant these reviews see both those operations. the us determine reserve XX% the end than financial years. reserve segments, Actual premises expected in Specialty up of the years. loss segment unexpectedly the more best segment and of X This in Casualty contributing lines X charge the assumed We

bit additional to further believe the size that of for the as with just well segment's confidence shareholders associated but more we the signed overall against with X and development We of the our that will a we've the legacy charge describe covering meaningfully the reserves, Sarah quickly portfolio bulk reserve portfolio protection improved around In points. momentarily, our I quickly moved emphasize detail addition segment. reserve in the transaction as the the to sheet. we've strengthening, provide the certainty transaction loss balance would casualty

surplus in a is reinsurer working in to $X with. transaction, legacy counterparty billion pleased that than this Re, our with one, we're For sophisticated be greater A-rated very Fortitude

executed expect validation deploying relative makeup of now reduce E&S our terms premiums million the not of our the million completed given substantially at by further being our than majority driven less businesses. the to work for our strength Casualty of or and expect that our optimization XXXX. of Re Re With so market in Admitted and QX Fortitude, transaction, to Secondly, we the selective our We portfolio legacy view portfolio reserves the I attractive and see strengthened quarter. premium significantly could environment rate of actuarial the view which Casualty by we $XXX to further expect bolstered and do as a on $X profitability, that we reduction while is as still plan, but conditions, held segment transaction in with in based be is the which and I reserves above volume. the the capital Specialty XXXX

this reserve have rationale has impact Casualty discussing I present why also the for spend quarter I emergence in and qualitative defect segment move exposure that in on, driving a our had the given Re segment Before moment provide we announcing in are charge, we the and E&S development wanted sentiment. some that construction seen to not the

contractors housing. homebuilders massive-scale E&S For has who historically multifamily our general written not construct one, large segment or

either an programs tend they control extensions. operations latency to structures don't coverage to because construction be write also wraps These and We very or completed contractor on long had owner-controlled and vulnerable products basis.

cedents E&S of portfolio our We did haven't in the written but these re casualty these programs a in our segment, larger underwrite few structures.

artisan sizes unit most and tends average avoid states do contractors target segment what we many $XX,XXX the trade to with manufacturers in we problematic And premium class. try E&S contractors' then to of of to write? for $XX,XXX. our and So the Our

construction binding in write residential we business new or contract Finally, our no small units.

the Before Sarah capital of and balance strength like I'd detail, our on to comment provides briefly sheet. greater

in the investments investment support in make specializes regarded in a of Moving our our with and about $XXX forward, Gallatin I'm Gallatin they highly and convertible new relationship will investment Point company. stock very is institutions. excited million financial firm, Capital private preferred that

positioned significantly runoff segments. our the well has as believe and approved management in provide clear has last CEO new, company Together as In of receipt risk, necessary franchise with Board recently to our our Botein, we're appreciation increased Point in the regulatory improved colleagues, of excited time Our they Matthew earlier following approvals. reduced Several on solution support reserve and substantially any meaningful We're and hired managing our his seeing and the be the members and insurance X months, group we as Board our Matt balance, U.S. to experienced, co-founder the partner the we actions member a transactions XXXX our with claims of future Board. and Gallatin our and a reserve to that sheet actuarial do. of opportunities governance. Capital is Point have very spent strong with portfolio Matt Gallatin to our considerable X September, in reinsurance announced with XX we a and view executed the the legacy appointment functions, raised our fantastic for to continue in the balance capital the in it's senior very and taken serve that team reserve underwriting and legacy have partnership management commercial brought join to same auto well Board, of

directors our We've no our the this past We Board, management improved technology, and insurance to to and over and our XX% industry have by growing company meaningful investments while updated the improve risk our impressive independent in experience. year. with by plan continued have made our done each new the turning will governance as a adding we're enterprise X is back. govern industry-leading actions underwriting there's River be frankly, franchises. we've since the to highlighted the dynamic how and to and entrepreneurial What blueprint And company. build continue taken upon organization going joined James in we manage the I've organization for insurance

see the with call joining that time This I company very River. the actions and the turn let for the since future achieve promise to that, opportunity With I've earning James bright for exciting is Sarah. and River, its potential. an organization for over a to an taken me James And

Sarah Doran

Thanks, good everyone. and Frank, morning,

to as Given We've Frank's are of guidance. results review well quarter, as I'm extensive the focus a transactions comments on my and brief comments going announcing today the current made then we in our progress the on strengthening sheet, and continue loss and million. capital Last for E&S $XX.X operating million Admitted significant and our of balance night, $XX.X net the we shine. an while businesses a to quarter reported Specialty of loss operating

increase growth premium in an that heavily casualty the detailed, XX% reinsurance Frank our the the segment. the impacted this is of As quarterly reserve of year, of million earned development Across group, the on XX.X% earnings by outpaced for net Surplus the quarter benefited segments. and on accident Specialty Lines The The and was and ratio and the both our year XX.X% from strong year XX% loss Admitted quarter year. quarter. $XXX Excess for in

Moving to expenses.

Our X.X additions of points and expense quarter slide same XX% the commission the casualty for and was for the reinsurance to related points benefited year year. ratio the the X.X quarter reserve The impact. for from offsets XX.X%

executed fourth million, XX% quarter. quarter comment was Given had the decline due the which an we of last given a auto year investment portfolio performance. fourth of to on prior on year. XX% quarter the for minutes impact renewable the energy the is to few same from decrease a decreased expenses a a our assets transactions, Final portfolio, quarterly and quarter capital on for XXXX on guidance. spend reduced and The about X-point like I'd our Net to the year in the last we the in quarter September. commercial and from impact in decline performance compensation about asset returns especially compared LPT exceptional class income on the X-point year, operating that the $XX.X and now quarter in a the in

with a it validation imperative We same do work, as note we the this but are Best security and the deliver that to that was our loss last morning, portfolio press critical which later and that simultaneously strategic release A- unchanged together a us to raise following earnings provide. releasing we a we ratings, Doing objective. reserve transfer the remain a so quarterly than believe comment I was our stable A.M. earnings earlier released complete disclosed the outlook our at and typically bit and transaction time, are strategic actions, capital on night.

committee work reserve finalized and completed early reserve in Our its January.

Chief XXXX a call, his on during new working Frank's began transaction quarter we comments our as potential the Tiger portfolio loss Following third Risk in late with Actuary transfer work completed signed worked indication that February Wednesday. we last on with LPT and contract February in to parallel. expeditiously early negotiate final partner, We received the the our Fortitude, during in the Fortitude

on reducing our we've related our into of pending transaction the transfer potential reserves parties future It's exposure volatility It's reinsurance in Fortitude. Casualty to businesses been a loss shrink night, insurance for reserve executed to us the approval segment. U.S. as while is our we by business. regulatory only to last and Reinsurance announced enable our majority transaction The both focus with we portfolio Fortitude. will third-party As the strengthen entered

million wherein the will a $XXX aggregate million withheld million, million limit. for underlying the completed that And will be pay funds $XXX and of assets. balance cash we of the $XX that We retain premium in basis, $XXX of on

connection the Adjusting expense, portfolio. the us of expenses. of a first X% XXXX the above held reserves LPT, inception transaction for the transaction and our million will through after-tax of reserves during the limit million for $X.X the is crediting flow on loss net the will assets We quarter to funds of withheld increasing provide with $X.X which consequence $XX impact our million the expect the an of the rate with of in to recognize

the to portfolio the The reinsurance the our mentioned, in during segment's timing. the portfolio. the will derisk and to reserves emergence exposure given of designed As Frank to and was transaction a casualty defects cover majority our construction and enable in it 'XX, accelerated further construction significantly majority early both especially of help importantly,

working such Re. pleased very Fortitude in are carrier high-quality legacy We A-rated to with a be and

Second, the on convertible of Point. preferred Gallatin

First, a process on moment and strategy.

market agency As equity we work And reserve trading to price. this purposes us a objective premium work was to the LPT, deliver objective. complete for needed at and rating Citi our raise as enabled our to on capital work with to but

unlikely less I affiliate Our a morning. weighted Point coupon securities, preceding to maintain we this of during the expected last and capital Gallatin our in days raised securities could The get stock or is average lower volume a believe the close very $XXX today will volume outcome which ratings average purchase our of this group, our preferred weighted the that convertible price to across allocated transaction X are premium reiterated March of million price convertible it's XX.X% to the June. The our of rating X. was through either the of and X% release to of pay at night from stock morning. are earnings trading capital will have beginning The

thrilled the stock X.X% the of of on Voting intend We believe conversion are majority they XXX% adjustments. to We all force capital bring have basis, of the With allowing of we trades we Point that the the businesses build strategic the least at XX to run. contribute in to anti-dilution expertise as-converted is and a saying days proceeds years to cash conversion an board. an in comments are Frank's we customary rights price so echo ability capital, robust subject raise can to on the support price. thoughtful that are to environment I we conversion have for experience X the preferred regard if meaningful continue consecutive above capped to room of subsidiaries. to in operating operating has in and insurance to at Gallatin our the that

share As the growth reflects made of The $X.XX part declared robust. of we our dividend dividend this per earlier the event our share beginning this reduce remains assessment past capital current quarter, quarterly $X.XX the to with year, per dividend our the from decision of cash Board in per of by profile, which month Directors. to

and according to capital moderate balance set. opportunity consider annually our growth regular will We with increases a opportunities

Our critical balance sheet and ratings us. are to

for low a conditions to expectation across Our equity to operating the XXXX segments very have profits earn is group franchise, grow sheet with our E&S believe strong common performance. value per our balance both in casualty account strong small U.S. return a set deliver our tangible to book double-digit tangible our We current and share. up of on operation underwriting and

limit the hand significant I that, it but balance accident Reinsurance cited in loss interest in credited presentation the will and in comfort. year million also for With This $X -- year the an the filed back includes to development Casualty the the first assets. to withheld will the this investor higher opportunity that impact the Together, Frank. provide the sheet with transfer LPT assets segment the Frequently funds as profit night, our of believe which held record us and $X.X As funds on Asked statement. income we a segment mentioned, last we adverse million specifically portfolio entitled of have 'XX, Questions, will achieve I'll these current losses quarter on

Frank D’Orazio

questions our the think open Thanks, we from Operator, I up listeners. Sarah. for lines can

Operator

[Operator Securities. B. comes Johnson from first Cullen Our question of Riley Instructions]

Cullen Johnson

saying use at management highest of of is cut, more you capital a is of that maybe more When kind we measure? fundamental the capital a your dividend do thus and think as that supporting shift E&S growth look and is of that at the temporary Or more the strategy? book of

Sarah Doran

to really think the about Thanks, one. for very appreciate continue obviously our We the see. a dividend rightsized That's that as Cullen. good growth We we opportunity question.

and that Board I think expect to, look a regular our movements It's almost about to down I'm comments internal think profiles with annually of some go as to as X% yield. processes, we that across significant opportunity fairly according returns growth expecting similar board folks and just in and volatile rightsized of we I up that. my the through the consistent other and But business back do. who part kind process. is a our that the up of not also it's have We moving at there

Cullen Johnson

on we size flowed the touched And of Okay. through Great. the loss Uber That's kind that Re transaction to saw in we'd reduction portfolio size as of the helpful. income. kind portfolio decline of and investment And a Casualty with similar investment kind with then we the see a of transfer, well?

Sarah Doran

will of on funds this over, potentially I works transaction different a of sheet little balance withheld that's assets of most think way is because the remain it instead the will the be our portfolio. bit here construct going this the on

assets. retain basis we'll known declining of quarter assets, we will on XX the X%, pay as balance rate otherwise So points crediting the but that a

a expect said of way, on ahead return So our a to we different have X%. would assets

would ideally would return be slightly than that what against higher that. So a netted be return

a all to full So it's way. not be of and full in the assets give up transfer going that a

Operator

Carletti comes Securities. JMP next Our Matt question of from

Matthew Carletti

JMP. Matt Carletti at

of understanding question year that's picture the loss a been hope First picture making. question, on kind E&S accident ratio you've just and the I of

of back you probably of ratios clearly, accident so where James kind think, I at think if historically, since think is it And or seen I best was century. we've conditions 'XX as profile in least. XX your So was beginning loss we termed the And inception booking River I where year or of Frank, this the developed have XXs kind of fully gone. to look is date high

to recent believe is, terms or in we best book where us look the the as play lead obviously, see let at we in out, that people's in about pricing losses and changed one terming we in what my just is as otherwise, of think where develop? have anything So that the mix should the has history least cycles should more question to careers. could of years that Or you're process go at

Frank D’Orazio

Thanks Matt. for question, the

renewal going would we terms your there process the conservative that your of suggest would to able rates to to point let season. is fairly reserve an look more were as we're business of by commentary get increase at prior year, our our be the patient is our view very and loss I So that then product that organization view latter and in of a a trend of on at taking the is ratios what part a I in look excess line only following and for accept have loss of when what trend calculating year. loss contemporary that portion of our

So fairly conservative.

at in we what basis. the between XXXX frequency weren't And to reduction had new assume said the and it, call XX% was XX% new that you're an certainly, I XXXX. of XXXX, If that, rate exposure-adjusted maybe to going the of, run we at normal. the looking on the claims time jump was

pre-COVID assume to that would to frequency levels. return we And going claims were so

'XX that's and relative you the a so picks. loss And why to between saw 'XX maybe jump ratio

Matthew Carletti

not completely, is, that $XXX question I would would million all? kind my clean a Okay. of is capital off remain it remain Or all business? out. and secondarily, change you'll just on just your significantly, question at to then for Great. one not that But why cut Why it it that expect the the Casualty organization? in book if cut question I there come have guess fee shrink And an the at Re. comments appreciate fronting I And why kind And core E&S income requirements with were you all? be that? on impact of to at mean

Frank D’Orazio

Sure.

reinsurance, XXXX Re market in there. given because feel, our we Listen, and the make question. money can demand conditions for good So Casualty we is plan that

earlier quarter, If that the were cost XXXX. monitor there, selective legacy more business we us to assumptions the our you taken put that market very business call the can it, so aside, action underlying continue not write team we in as in the give have transaction outlined we though, think, the to I about under be aside, there, up, that flexibility, changes going they're of to XX%, make you your be shrink think The part unit if make transaction year. kind we money capitalization to this I the speaking Rates were comments. of And significantly will my last XX% for strategy warranted. in we I've guess kind question, of -- premium in expect latter to I But the our feel there. and of of pressure and is kind book,

So one other item.

should clear ratings I are capital think the we our across and consolidated make group. that

So Re concern way, impact said raise. capital did of keeping not Casualty another the unit as size the an our ongoing

Sarah Doran

That's right.

that, I just too, I maybe I of reraise Some my business amount comments there not words, own think my that would in -- say just don't too. if think the reduce that writing that -- could

Frank D’Orazio

Agree.

Sarah Doran

Yes.

Operator

comes Our next question from Truist. Mark Hughes of

Mark Hughes

to? the bulk you you've majority with handled problem your that or reserves this the I got guess on How the was what or reserves of still of that portfolio. your Frank, gives books the the -- you confidence is that much of phrasing reserves exposure yes, bulk LTP the the have

Frank D’Orazio

Sure.

call. I let the me So back the step during to company November committed to what

to going the addressing after charge. So reserves be been were a series what's I we adverse of that casualty said

in charge we additional wanted XXX validate said, work developmental point methods about. some and provide loss history more do that But we company's made and that history, shareholders. we on We I or we As the recent I to that further early factors drove and finished And QX. to January. certainty to given reserving reserving that said, talked that significant incurred put our in weight as adjustments tail development the the

have announce, providing meaningful earlier. that So Sarah said certainty something a goal we to the earnings, explore with with as marketplace to legacy QX

that segment in but and to just to classes. largest treaty segment, participations have significant Re tried the reserve where just our XXX a those running Casualty just would includes our claims business So and activity capturing had reserves, not been treaties relative Many about the in construction active, you to the of treaty strengthening, relationships historically, started first concerning. What give we also treaties to when dating capture of reserve back exposure background, portfolio to some selecting most treaties currently that subject XXXX. we've long majority the including accomplish in was business meaningful

of that's or wanted And concerns subject We to opportunity reserves. the the this with us further from wanted we while counterparties have We get said. a terms the were We Sarah percentage ourselves that to we driven from review reserve in high So completed didn't a the construction transaction. latent we to about, talking to needed frame like would And a strengthening. allow market as what defect. transaction time legacy total the allow that our accomplished volatility. wanted February, treaties execute until reserve with that portfolio latency exposures cover we we protecting final believe

separate was it the of than So stream our Actuary. really work a Chief work

So validation provide another in just the quarter. point again,

obviously, we A.M. with the as well that, process obviously raise went Best. Beyond capital imagine as as might through discussions, you

the on came So we that ended up picked along how hopefully, actions we validation we the additional way we feel some to the subject up relative points of sense where gives portfolio. you we And to took. that

Mark Hughes

a have if there's expenses, of Yes, then of but QX, rate wonder the one-timers you've lot E&S share, specialty obviously you I you some that. whole run I the the you appreciate expense got kind ratio, moving thoughts and Sarah, parts a in company think as if about on admitted, lately. here might been and any hitting

Sarah Doran

impacts, given question reserve the moving as because you a cetera. course, issues of in kind changes to et been that well compensation incumbent of thank as, related lot parts various COVID the and for there just have of And Sure.

Mark, go-forward appreciate expense that are and I XXXX our pieces. think advantage ratio particular, in a competitors. or I I of If So our about remains moving at think about to think of a lot significant it, kind years, there I

commissions, the extent X in Specialty It's the and the does particular to Admitted to Obviously, in quarter segments. pretty high basis, casualty then the call around XXs. being cetera, continues offset as to And manifest about to think each XX% going fronting But that saw it segments, has. I'm a it's XX% the of down the a the So grow this XX% run to on nice business commission that this XX%. some on offsets as of compensation rollout the I ceding within in of in you et through to through got year U.S. obviously kind re. mid- there E&S. it, and rate the beaten significantly we've changes

those very for expense because Re, how that's hard ratio, base or XX% on in it, Casualty of better Re, call little around different to than it's low there about that really think that's move. bit entirely numbers expense got percent that and ceding X a different a XXs and that's a could by So kind small we've any And XX-ish team a then it well. Casualty almost even as particular, small be commissions I the

as bit the a ideally or so. that in of you context color So year next over provides that hopefully, little to itself manifests how

Mark Hughes

point some of that. about Good. funds, trigger at That's And entirely great. over Fortitude? appreciate And fee? when some that that thinking we're X% -- of I what's pace withheld if then to what there runoff that the is the shifts there does then

Sarah Doran

question. Yes. Good

think the it's I about over balance. whatever contract in the there Fortitude to in and it's shifts X that remains years,

assets how in obviously give me, up But withheld X-year the X-year to So -- balance X- over or there. segment, are portfolio will being at assets general, fairly funds a that point That's down balance period. business kind and the Reinsurance remain we probably will as Casualty the return that the thinking a truncate tail. think after is paid. down the run run we're the -- there. that I fits of excuse And range wide think X-year about the of claims whatever and just That the with about

important let's $XXX remain whatever in is to assume is And could out. from X in to of $XXX that $XXX fashion the think I about runs a million linear years fairly that million So the thing i.e., XX/X. that, million, down as think

high it and we to time that as credit, claims will X% just That's well. as watermark to continue pay effect, well, So And down never go on continue and the a from million will now interest in the it $XXX will as then therefore, balance at the there. between high so really will, decline level. be over

Operator

Barclays. question next of Tracy comes from Benguigui Our

Tracy Benguigui

Let's cut. to go dividend back your

of growth how dividend was against your other mentioned part stacks reassessing yield stocks. thinking You the

I was and touch casualty get to that's help guess, us that growth happened XXXX? going I just E&S quarter growth could we because be what I what book. forward, outpaced But in more about re going your growth So know saw excited if prospects this E&S core subdued. more premium you your on expect much how could from

Frank D’Orazio

Tracy. Sure. Good question,

off me here. Let start

QX. less underlying relative in GWP million that had than well this but we Casualty several We adjustments in call. in to millions during Re double million QX range of just So business likely foreshadowed think business the in $X treat was in new had digits and I our some I as growth QX, dollars first, as

account apartments. E&S, group, and was nonrenewed. decisions in Energy ultimately, underwriting for taking or And account committed exceeded core November before on of that about a hit. took on It some actuary. segment took large course, our actions shrinked budget just and results in commercial we we segment. another production in $X.X in very with $X our months actions a President, our segment In driven months. before we million auto a the was stances had underwriting growth that, or of discussion we Casualty, taken about to handful review. our then But GWP E&S X year so well other just our prior all impact. was we segment renewals, reserve our prospects, million Schmitzer, win in relative said stance In Richard of X to in believe segment a That QX. underwriting large X Excess underwriting the referral I And similar XX% grew of all accounts, came me met those but one an basically actually X our by that we

So we're to typically -- the $XX,XXX $XX,XXX we're writing in E&S range. our operation, in core policies

you more lose when larger accounts, impact. those just significant has it So

fourth the little nicely on we slightly December, and in bounced a back was So well. certainly robust the as but impact quarter, November off, production bit had of first quarter very looks

Sarah Doran

I'm just back because was good color the great a Tracy, jump that to in question. to that going tie dividend,

in through in great growth business. ROE. absolutely for low particular. included So think XXXX comments, But I -- that Frank's we expect double-digit my the outlook dividend I make just specifically, a me, a to our return We're on gone excuse getting our the

a think well makes what like we this our that lot business, we of underlying sense capital to can work, we'd it that put ROEs. think think If to continue that from specifically we business, strong put strong to to continue that as big and kind core continue piece to and the capital-intense get and most to work So we and said. E&S of those that's a I consistent highest drive return to and of

Tracy Benguigui

you million by the Can at that your also sheet net you limit? negotiations? Was discuss did $XX going balance were as more arrive relative LPT? stacks more how you expectations? expecting -- that wondering I'm what Great. your affording than protection the less How to you were than of or what up through

Frank D’Orazio

as $XXX that also view I it million significant in early But and January, by the Dave was in his we've the a other actions in less quarter. validated se. strategic taken itself adverse move. dive which don't very the reserve that know deep or reserve of produced is charge, completed per development that comprehensive and more

that we LPT just step some get the view credence reserves we more legacy XX% in kind limit, when a I think, that took paid As as as to limit than structure, took. well. the for mean, that's that quite a I that you're far of of frankly, as we the based the view you And just to of it bolstering their gives that the charge obviously, on premium market

relative on, are comfortable that tack very a pretty said, of on limit million. just to again, we I So top like to significant the $XXX

Tracy Benguigui

that. up following just then on And

your actions, Casualty express think Could will that redundancy? in poster a estimate. reserves above million Re additional did as so say percentage you're reserve I sit that how central central estimate, $XXX to third-party cover relative should carried of the You about the our you

Sarah Doran

-- that explicit it's above We've disclosed We that, central the we've estimate. I not think fairly been Tracy. saying in

aren't So last million year. of in we and this that's quarter. reported Those not segment reserves, but of was the $XXX above booked incurred reserves them meaningfully it XX% where reserves,

the that our reiterate it's would disclose percentage but just reserves appropriate to are central there. above don't the I So we estimate, level feel

Operator

Our of comes question next Brian from UBS. Meredith

Brian Meredith

you have I are from the tax us of if here business? tell your Or Sarah, any... wonder you what big decline on rate reinsurance in implications the kind the could do

Sarah Doran

sure. Yes,

a think couple Brian. of things here, I

simplistic in business, a from remain be if environment have decline assets is could bit that significant almost As invested but this, I we But the we related about about of think tax rate obviously to also a just well. it. as balance little the unit

to a and about of ahead. we rate XX% dependent money but with on XXXX it, call think year tax where money we about rule that anywhere when, thumb let's from I would how that's think XX%. make make the as I of consistent Obviously, fairly being, the the the

Brian Meredith

the well I guess, been, we'll just find the business. the as distribution Great. couple issues people with The willingness balance And as over curious, of fronting a to from perspective. out guess transact happening sheet reaction I'm all to E&S of then, you next what's business your the of Frank, business quarter-to-date? I weeks that just And been have of on

Frank D’Orazio

Sure, Brian.

both loyalty note kind received as wholesale with our support received pleased, we've pledge quite partners that of managers and today distribution fronting of our us as in congratulating from on the and a CEO transaction partners, from our well continuing business, So been program this the frankly, I we've just very very of the distribution one largest to supportive. support.

space. we lose one to were outlook those said for fronting I've negative on think just A.M. our Best, where from we didn't within I relative months renewal business the program several

that no regard. really in issues So

by very segments. our is Our strong partners the across supported and rating distribution A- stable being

Operator

from of KBW. next Our comes Instructions] [Operator Shields question Meyer

Meyer Shields

the I redundancy question talked would Frank what one, I think specific in one I should loss on history. years And rude, the accident to that? But Shouldn't the Excess in guess, of shouldn't Lines older to want the of the fourth broadly, watch manifested guess, words about monitor segment. we Surplus mouth. word So embedded how you put that use ensure broader conservatism relative specific reserves? And and Excess Surplus the more to quarter? and some some or about question the that be, your trends to itself are that in should maybe have we didn't

Frank D’Orazio

question. just got I want sure first of your part I make Meyer, to the

Meyer Shields

we XX,XXX, releases has saw, I think, decent of but I mean, tail. reserve Okay. the business Surplus Basically, and Excess Lines, of

the very You that let pertain reserves accident reasonably some talked, have think, matured fourth wanting that about thought would the I quarter I mature. some to just that have would of to in older because years. of

Frank D’Orazio

Right.

in anything of in reserves strength not quarter point a listen, it I It's feel mean, this the didn't the confident in more for release itself suggesting So in the But our very that. than time. manifest we segment. at

Meyer Shields

give in Can maybe sense the to that embedded you the overall us trends are as book? Okay. a

Sarah Doran

increases I think heard just -- think I'm rate going feed what Meyer, me the trends I think to each I the actually let a jump rate but portfolio. in. I we X underlying getting get to try the here I'll some out for It's and I got just of then funny XX% in we're of to audio address guess E&S increases, would say the Frank. We renewal last start back years. -- in

in booked much rate manifested. increase year assuming a Our was than lower articulated each in were picks loss and design

inflation. what's think conceptually bit with I'll thinking that have think significantly the But you margin. in think with Frank particular, less about also of the of would no a about carriers. that start in fair immune some social then larger to write, in I let that than we terms it's I more. less say expand upon And that -- -- that this to we book, business we one's exposure SMB So little I exposure

speak Frank, that things but... But of again, the mean, forward. going trend of I about, So are those kind think some loss to should I

Frank D’Orazio

Yes.

the So watching industry in our inflationary closely trends obviously, in business. we're

quarterly. So about it we talk

rate secure moderation in to of some cost continue regardless of increases. loss rate trend excess We in

our call policy the we are formulas revenues premium the on year. the of rate benefit also portfolio growth based most as revenue of policies growth We in inflation-driven and XX%, by adjustable have metric over our the another, it, capturing driven of roughly is exposure XX% when

trends impacted inflation. rest there's we'll have We closely. E&S eventually That's persistent. bit the if of the relative closely issues chain as in which and that's a demand the of mentioned premium hedge to industry, to So shields determine Sarah moderate on the SME within just the we supply seriously profile. additional again, dynamic the more a watch what very eases But it certainly. continue I because kind book, the whether inflation. do or capturing feel our by there defines we watch think corporate bottleneck don't social we'll little it's large very like to But portfolio, bit something us have focus a not listen, of

Sarah Doran

being a year, the I think point of just is for in that And I clearly that taken just that answered, Frank I and is make to little would think over able piece earlier last cited great quarter. with be that is this he's I in that point I the in he here but -- just organization to last and around the bit working a our particular outlook philosophy you visibility last a think on terms there which reserves. real would question patients particular, in

Meyer Shields

be that Okay. And taxable can Or a is held, on paid a brief question. expense? the of Is Bermuda? then the was out it funds X% just technical

Sarah Doran

call expense. basically That basically it be be. will Bermuda. contra me will and will be that paid will out interest a of won't let where an That's right, or come just be Meyer, tell -- -- exactly it expense it It you geographically let's

net income. you'll against won't be it investment netted So -- you see see

of see being netted against be the underwriting business. won't out income, You fee Reinsurance Casualty paid a but as will it it

Operator

it like for now turn back closing Frank to D'Orazio remarks. to would I

Frank D’Orazio

current listening thank But our we to staff River this with to the and future the call corporate and everyone time XXXX. want few Collectively, and express the to the to objectives I on look like today effort of hours forward countless James for us profitable hard stronger you for for course their XX% in organization thank I'd you. the this results. in received call of of discuss has morning morning. and weeks environment River ahead. by I the brilliant the and appreciation ability on again to a your Thank work company your Again, speaking my the on you grow more a our with day. enjoy questions roughly to a focus over made everyone James also for for QX joining

Operator

This for concludes and you now may call. today's conference participating, you Thank disconnect.

James River (JRVR) 1 Mar 222021 Q4 Earnings call transcript