JRVR - Earnings call transcript Q2 2024 | James River Group Holdings, Ltd.

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Operator

Thank you for standing by. My name is Benjamin, and I will be your conference operator today. At this time, I would like to welcome everyone to James River Group Q2 2024 Earnings Call. [Operator Instructions]. After the speaker's remarks, there will be a question-and-answer session. Instructions]. [Operator to over like Investor Zachary the Relations. turn would to call Shytle, I go Please ahead.

Zachary Shytle

and the welcome Second everyone morning, Good to Earnings Call. Quarter James Conference XXXX Group River

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

forward-looking the such cautionary yesterday's reports of made discussion XX-Q risks factors and language earnings undertake Exchange and statements. forward-looking a please and the the We and with most For see and our do any in regarding statements release XX-K any have recent not risk of to uncertainties, duty Securities Commission. filings Form we other and update

this tangible non-GAAP as reference refer found during equity. addition, of to common financial underwriting tangible GAAP, may which on we website a net copy to adjusted earnings reconciliation and release be equity, presentation, return common at numbers such equity operating profit, on www.jrvrgroup.com. for these tangible income, can a operating press of Please our our net measures, adjusted In

Officer the for business over underwriting retroactive described Lastly, press continuing all earnings the James call D'Orazio, to for loss Group. performance of accounting Executive our reinsurance River will that and are turn unless to ratios I reasons in operations is now release, not referred to otherwise for specified, our subject Chief transfers. portfolio Frank

Frank D’Orazio

second addition some provide market additional and XXXX outlook everyone, you to be call. on the to welcome River. on Thank our I'm joining James that you to our Good for earnings commentary quarter second to quarter Zach. for and conditions introduction, in morning, today future providing results color pleased

results comment X the into take moment I'd items a the to to strategic at on company. for get quarter, the like we Before

The cover our level the future of transaction E&S significant of the while adverse James portfolio profitable the segment coverage announced bolstering the sheet. our quarter. reducing executed and The allowing combined balance second for volatility focus certainty end derisk provide organization to a us development we on to the growth of shareholders First, higher after shortly and River. by while will also loss reserve was a structured transfer for

that Second, end at the of ongoing. this strategic set review thoughtfully remains a to began range last the Board for year there's time of consider and the process continues options, we evaluate of The line and no process. completion

of net Now tangible the continued on franchise continuing from results operations $X.XX turning share adjusted XX.X% adjusted per strong net income operating income for The quarter. $X.XX has XXXX, to return its and our operating per reporting to start equity. a share common of

highlight growth growth Our Submission a of growth underwriting saw business submission saw our platform. quarter, In general total, the our profitable flagship trends and divisions the strong XX,XXX would submissions. increasing second XX% continues increases was growth for rate to of strong and benefit and weighted growth conditions the new renewal optimal and present E&S in again both SME heavily once which from during several with over experienced excess X%. XX%, submission continuation while of growth we over quarter, of last environmental submissions which second we sold during casualty have XX% respectively, submission quarters. I the the and casualty strong

from up and well or high double-digit in segment our excess were strength attractive to increases to Renewal favorable quarter we our single conditions portfolio. than energy exceed were pricing pricing X.X% confident In experience casualty margins continues the trends across view X.X% rates addition than year-to-date. A of X%. Rate majority and continues assumptions the underwriting underwriting continuing divisions business remain to up the up growth, the for our in to the quarter low business our strong range for submission plan. We casualty as continues that more generate recorded pricing come more XX%, divisions. across change XXXX in more our general this E&S to pricing in the than up XX% are as of different larger divisions. loss Rates and

excess Our by the E&S casualty over divisions which property during exclude quarter. grew X%

capacity However, property mid-market increases significantly with moderated rate a have recent more quarters. past than

increasing While this seen led declined our catastrophe-exposed accounts quarter, large reductions. underwriting X.X% which of division, account property in our during the limits rates We've market, during the as by the quarter. We've renew on also its reduction while in in X- chose during large Excess to market. during our a in taken of confident segment Casualty quarter. We've gross property while excess providing portfolio are base work with seeing areas underwriting E&S there a remain impact the participants E&S excess we've Nonetheless, remained we've still observed pleased feel overall unit our were reduction the first the our quarter. second the XX% in competition quarter. With approach. and and renewal we And we continued this X-figure the overall, we're exposures grew believe and not several handful was that less actions attractive premium than re-underwriting premium we the excess production the portfolio, from the disciplined property significant the result in to market increased premium opportunities in our dynamics, aggressively premium in these writings, in

quarter underwriting The XX.X% combined was loss XX.X%, $X.X was the year of XXX income. from ratio strong second E&S basis accident the year. point ratio improvement Our was a at for million which producing prior

years. quarter. Heavily and $XX.X casualty, extent, excess occurrence a to for lesser million E&S liability XXXX and, the general auto casualty We and commercial the XXXX focused to also strengthened reserves during the by for other on segment

no Additionally, cat we experienced the in losses quarter.

loss as reinsurance National. XX% into accident River. subject X, coverage combined I transfer effective E&S July, $XXX previously, by transaction As co-participation agreement to years with with million XXXX in development and a adverse provides James cover XXXX the January in early State portfolio for is mentioned we entered adverse This of development XXXX, a segment through

next a this the is adverse quarter. to As development the expected recoverable as result, quarter a recognized be during experience reinsurance

Specialty the million our of to bureaus the XX% written and We in excluding second ratio positive of compensation renewal and market. now segment benefited fronting the taxes XX% substantial underwriting prior in gross quarter. million approximately compared in combined quarter. of and is of from prior in of from for to Admitted, programs profit show collection the benefit and continue business business the the year-to-date, that XX% available Board's rate changes excess impact an produced runoff. Many in premiums excellent of and our $X.X growth $X The recognition from increased workers' year to an quarter and second programs Turning of periods existing

on consistent Sarah remain shareholders. and James the to And quarter. provide River. the performance submission they and execution past, segment's the can forward with experienced I'll infrequent have second loss this in we Specialty objectives. Overall, to ask expand size to impact generating see the of across the attractive Undoubtedly, segment. with to increases given have this outsized continued franchise adjustments on excess of an quarter opportunities trend We additional as color returns to consistent the half We pleased the in profitably Admitted focused for we look some and of continue rate we additional opportunities and that, like provide expected our of XXXX are strong

Sarah Doran

you thanks joining today. very much, everyone, Thank for and morning, us Good Frank.

$XX.X or As you've compared reporting compared this the operations continues same income diluted year an per year available we same $X.XX of diluted to ago. to $X.X adjusted or share or or XXXX period year strong a from diluted operating are per to $X.XX million seen, to shareholders million net $XX.X $X.XX ago. On per period basis, of income for $X.X be share for with the a million a net million common share share continuing per as quarter $X.XX

half common operating through is the on Our first tangible return year. of XX.X% equity the

results. to our underwriting Turning

second of of compared XX.X% a The combined ratio year ago. to quarter XX.X%

declined ratio year expect we XX% recovered the $XX.X X. At cat a we be not ago, will which expense year July new ago. ratio from There experience under prior loss on did XX.X% impact a year million, E&S, increased of losses. closed XX.X%, from our as and LPT from a Our majority ADC, development which a any mentioned, of to net and was Frank and XX.X%

down As more efficiently while mentioned This we key a of XX% reinsurance quarters. from this premiums. We our treaties gross more quarter, the renewal cover month. income, to changed and the reinstatement last to previously, treaty consistent underwriting pushing period, prior no the summer, to renewal X the of with portfolio, net managing retention has significant but E&S maximize had year upon this XX% at earlier last had limit volatility in the impact E&S changes

due from tax as adjustments and reduced $X to quarter a expense as this Those ratio bureaus well mentioned, Frank the Admitted to quarter As board the segment the specifically in by this the true-up ratio originated Specialty the $XXX,XXX in that and million and segment adjustments. quarter quarter. combined recognized for collected in benefit points about scale X benefit commission the the sliding

income recorded we of net increase contingent million of XX% with renewable $XX.X net continuing of million sold. our a was income or the investment investment $X.X investments, quarter, of Included second from the the quarter. is prior payment in an from energy one For previously million which $X.X operations, year associated

portfolio, and the book a We've was fair of yield to complete X.X% quarter. year at in LPT, X.X% our transaction. in work compared amount holding X% which of ADC is returning excess as time X.X% embedded cash last to Our this been last we

and positioned to portfolio, million related losses remain of market to $X.X of the majority take advantage some allocate Overall, value we As investments stock portfolio common fair begin of in and our in net income changes realized remains portfolios. were attractive dynamics. fixed reinvestment range. We core bank preferred and of well rates the low unrealized loan experienced to X% which to on of our our this

as LPT for a July our Frank's points E&S a booked will recoverable, to quarter. But questions, impact mentioned. likely work opening treaty ADC, be on in on the $X underwriting the the I from on quarter reinsurance third covered would that more that in spend Frank following and by book will and few than be the ongoing quarter million minute I X. the the we was Before side, did expect third a the on we is little this signed segment first, from QX a of bit complete will would accounting comments, development given which as in want caution adverse that experienced of in

our since minute close we I of transferred cash in balance in to the to that cash a and approximately comment we as my holding been alluded work transaction to have million transaction sheet quarter-end at July. $XXX have in National Second, we investment the structure ago, the State included as early

We've of income the pretax best agreement, As a the colleague, and to I to finally, a benefited and wanted operator the turn to team. adventures. the approach, Brett new recognize work And been we Sheriffs, and thoughtful quarter. And a in the $XX over just of all the call million a take former from you expect your hard any approximately back in on his for pleasure to result the all our that, I'll do reduction moment questions. in open line wish having third with it's

Operator

question from first Dean your Criscitiello line And comes Instructions]. of KBW. of the [Operator

Dean Criscitiello

core hoping you the casualty have prospects could smaller going And could implications the premium book you and book ratio? on the the ratio? of core forward will property discuss the and was that I growth the talk on the the also, if about property book between loss if impact loss

Sarah Doran

Yes. the size on ratio think the I a for there core thanks given impact I that just is material don't loss historical think of question, book. the Dean. don't --

number, a what shrink in is gross did of at high a portion we it that. XXs that kind level fairly While retain small of

a I the as you fairly think So ratios. that's negligible at look impact loss

Frank D’Orazio

Yes. I quarter just headline since additional give a color, the us. little for a might Dean, it's just for

dynamic the in that quarter. the to experienced relative we just So

significant think context, of that's pretty in we're going excess think transition some rest of probably very unless year. And property like season we the really I up we writer. a to shifts remember, So significantly the the to provide restrictions continue there's to saw just much this and cat market eased layer the quarter in industry, capacity as an

So in primary we the do not space. property write

distribution-owned or be basis. So or double capacity taken out capacity. these Oftentimes, may that significantly a layer we've on when ground-up or primary their other pressure several it more under gets layers. is entities of our MGAs unit carriers expanding it by facilities, other And seen offer

offered. standpoint, we pricing saw we remain range, positive a retain, that being rates on significantly to So of rates from saw portfolio but moderated have plenty the reductions renewal pretty and the rate mid-single-digit we

business can good also versus where rate balance limit continue slightly are to goal premium. continue to is think and but an our where account push We an profitably excess needs need with written technical to it, account be recognizing where So rating. to class write volatility property less a rates and we'll where at strike we

a hopefully, of -- gives and relative quarter in the terms property. little that So bit color in to you what saw more we

Dean Criscitiello

one, you of your That nicely. does. view loss core had second ticked ratio lines? the casualty if the down And E&S within then the year -- within my year-over-year specifically wondering picks, the current I was updated segment accident an loss

Sarah Doran

there. Yes. I We don't have don't you specific an have updated question view. if know a

maintained those 'XX. then through we've maintained loss the that's I prudence similar in we've pick think some been that

Dean Criscitiello

end the and last about loss -- was trend I your lines for if more curious year. Yes. material for pick loss from -- casualty as that of change your

Frank D’Orazio

going with our and that ISO XX-year when basis into I process the an we we No. do went start mean, we through analysis.

using relative to loss than trend view X now. at end X than reviewing We're and our by less our that of the changed now. as going the year-over-year exposure of our into point budget. of right the together of we're business We're view to by changed factors actually less start 'XX, trend trend process trends pricing put our point. Those the also Our thoughts in right we 'XX that on are refreshed

no this So change point. at

Operator

UBS. from Your comes next line Brian question the Meredith of with

Brian Meredith

view of at Any I what's Just about in kind going trend, your on. -- the what's have been inflationary through on because perspective you And you quick inflation. but now movements of kind XXXX out been the on just have of there going on and kind us your Maybe any that a companies XXXX many in on right here. talked of about toward going you bound loss question give or what movement think up reserves can some IBNR there XXXX, see pushing concerns of kind all?

Frank D’Orazio

Yes, happy to do that, Brian.

saying in and address year. start let -- by where we to movement then So actually about question had add your current of just me try the quarter some the

we really casualty, XXXX to it quarter, if reserve breaks to analysis, accident commercial follows. the XXXX ] casualty dynamics lines, our the development way the of during of as and saw [ but primarily some $XX.X reacted general years. So auto related down -- the in to the that excess we million versus is development, Within

of We the from of XXXX, with about typical, core really then we core, in the of casualty there's adverse that we recall old standard portfolio. in commercial majority So that some reinsured, on at announced the we basis, small auto late now million. outside position excess auto for And then the that portfolio. casualty time we and net offsets X% million back by for had $X.X And And reasons. obviously, our decided our The various commercial portfolio, E&S E&S that was $X we of And representing LPT years to heavily have parts XXXX across had there open line claims claims of largest rideshare in retain. you'll XXXX. We we parts XXXX, at exactly million. account $X and in $XXX,XXX second the our strengthen the of outstanding came amount. adverse retained a that remaining general another largest as X

current We've of question. you view $XX.X that's year loss trend million. relative the to get how So not other your to changed our the to

Brian Meredith

don't just that's with casualty book, on just the wholesalers helpful. having goes that property And line to kind That's my of looking producers of with next casualty? I your of any be I'm in some you've of production impact is the may stuff curious, know if maybe And a -- at. kind the that got any is property the some some because reduction of the business general and

Frank D’Orazio

much of No, dynamic it's is in basis. so a of less on good the a see model a what package question, but line E&S we market,

So we're offering not -- renewals not again, it's property. like on we're

actually, area submission general competitive an more and significant there, in just where marketplace rate is increases good activity, we've healthy We it's are a but seen -- casualty growth.

Operator

from question Carletti Matthew the line with next Citizens JMP. Your comes of

Unknown Analyst

just for go call? you a earlier I QX in [ quick Can please that question had follow-up to mentioned Karl guidance Matt. the Sarah. just is over ] you This calling in

Sarah Doran

we provided guidance, we, our on view what in from overall, the from of beginning quarter, early I development that recoverable don't I referencing as $X July. would and announced of in QX ADC I is was think be a this recoverable what booked that the QX Yes. just million saw the LPT we booked as following in we a

of it the because X, quarter, We transaction in July book signed that's so the referencing. in expect million reduction quarter the if $XX the to on third income third pretax you're we what recognize the in we'll

Unknown Analyst

Yes, what I that's Okay. was to. referring

Operator

of comes Hughes question the with next from Your Truist. Mark line

Mark Hughes

I I got But seasonal you've excess you going trajectory already then on the apologize when you might seeing as to quarter this. QX standpoint and addressed if think a been progressed. that have QX? impact the the that so late, a little develop have about bit as how meaningful Is from a of property, in

Frank D’Orazio

for Thanks question, Mark. the

typically cat-exposed So property alluding larger to. quarter the is think you're of for because storm because season a I QX dynamic

in think basis us. generally and part general, fewer -- just for of a as renewal the So market, that, renewal QX is opportunities a it's I smaller a for that

Mark Hughes

do you competition, that increased building something then of And feel is stabilized? Or pressure that the the Yes. capacity? the kind or that progressing like in more quarter, is still that's

Frank D’Orazio

for descending I digits, And see basis. I month-to-month so see mid-single think even could positive actually you it still quite that it's rates a but the frankly. on could been even we're building quarter,

the limit and their again, carriers that layers. putting to more more I dynamics the mentioned, it's primary on pressure double excess willing So capacity,

Mark Hughes

any or are staff from potentially are the approaching at looking of business? be kind kind you staff? how How you adding Yes. new And a for guess might plans investments perspective making? that lines Or of of I -- you then

Frank D’Orazio

Yes, it's good question. a

more So of virtually of to same kind halfway mark an it's the through the point organization first our resilience over off, identical broadly, attribute the company. improved XXXX. staff of I'll has just 'XX to comment really retention been quite as XXXX It's good. on and actually Staff of

invested really dynamics, having We're given So and to you kind as probably market replace heads. We relative relative expansion year. just to that last more and product in did, before long. up kind less there, to that liability it speed just line, too some slow know, management have announcements started concerning just product going getting announced out certainly of there to of

resources, as far market in a and obviously, are that this we take performing in. where to we this we our we're additional advantage investment As additional at resources that I think look mean, be adding should budget take of of we to well where relative cycle

So ongoing with constant that's of that evaluation kind is our at really segment a present.

Mark Hughes

think also but last this one, that of number zone a you back were XQ, I you particularly to are may know half, How don't about XQ? about re-underwriting impacted accounts then the alluded might. And re-underwritten think this, accounts that. there that touched in larger would quarter perhaps? I effort, I When other be that if the that on -- be you by think if we should you in

Frank D’Orazio

Yes.

exposures hard commercial the segment really look So middle at taking we our last started across E&S in auto year. of a large

amount number last reviewed And large, with as we has I less been would quarter. say significant this And complete to this more and of much done. a quarter, so had accounts by significant of review mentioned,

being said, an it's that process. ongoing Now

talking So that's illustrate SME best those have that to is the or it been growth this I insured But we've is in suggest exposures sector you bound where smaller and in that And the at premium at casualty. excess in them of you're accounts QX that each time work focusing would I and demonstrate a much also think way about we year. per just now. see look average data policy for been And pronounced quarter on to a that of take continue very you watching business. done, I'm renew has that many that the

some taken actions. underwriting we've So

premium was QX year, In our this $XX,XXX XXXX, almost in during $XX,XXX average bound policy. per casual about unit QX of per our we size was it So policy. excess

So the think that the I talked very we've and X notable very last actions about also quarters. consistent with

Mark Hughes

last in think investment make that portfolio inflationary interest down liability. Try interest more, surged Kind view one carriers couple dynamic these any of and on are general might. -- able if maybe than if sneak years? to general tail When for do pricing? a have How what price of think about the the rate increases casualty environment. on I much long the casualty, that restrained kept rates you you do pretty rates to that good does lid Do if on their the -- in having the you despite increases come money mean lines

Frank D’Orazio

say might are business. probably that differently impact these a paid and folks think feel lot on I ago, trying years would money dynamics of in not I I line less particularly their of XX, in right underwriting but XX might think. have attention you than to it, now, to make

So relative talking the casualty I'm kind necessarily other that in line you're shift or to of nonoccurrence not seeing rate interest about. general just movements

Operator

Frank concludes That the will I conference for Q&A back to now D'Orazio over our remarks. closing turn session.

Frank D’Orazio

Thank Benjamin. Okay. you,

the for to company, questions years their over their hard call we partner. I the make continuing better this efforts received to work employees training this you also of an last and morning. Thank enjoy speaking today in We third fall and the you, for like discuss everyone quarter our employer again even James River and to want and forward we for the all results. to rest day. with the the your thank resilience look the all of time end to James River Before and and today, really of recognize I'd X.X quarter

Operator

gentlemen, today's all joining. call. that Thank and for you concludes Ladies

may You now disconnect.

James River (JRVR) 6 Aug 242024 Q2 Earnings call transcript