James River (JRVR) 9 May 242024 Q1 Earnings call transcript

Thank you for standing by. My name is Benjamin, and I will be your conference operator today. At this time, I'd like to welcome everyone to James River Group Q1 2024 Earnings Call. [Operator instructions] I would like to turn the call over to Brett Shirreffs Investor Relations.Â

Good morning, everyone, and welcome to the James River Group First Quarter 2024 Earnings Conference Call.

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

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

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

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

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

the announced take a for the the sale results of I'd moment closing get to acknowledge Re. into like we the Before JRG to briefly previously of quarter,

moving we for critical discussed, this forward. and believe organization have profitable River that we a strategic a more focused creates As transaction was James

segments, advantage should to E&S agreement, producing areas stock pleased Admitted remains original within and have we is profitable began results our at of our that with of there on the Board strategic this process. and and to distribution meaningful have transaction options, consistently closed of for scale ongoing. purchase the and set to opportunities. terms last line note range Specialty The are review time I continues credibility the take the wide market where focus no also consider the of remains we a We completion year end the on partners of process that

Re strategic As imagine, you delay status created downstream might the in with to closing and impacts process. JRG sale the the of the timing of regard the of some overall

the Now to our for quarter. results turning

net per XX.X% a started line have in the a of income year for guidance We XX.X% adjusted on of provided adjusted is note, common XXXX. return strong operating and equity, operations a $X.XX ratio which tangible share, of the operating we net income $X.XX on reporting have share, combined with from per continuing

of of the highlight submissions with This general meaningful terms our quarter growth first In increased and pace from and while first Submission quarter, would numerous we SME increasing submission renewal benefit quarter, both the submission the growth a X%. to of strong grow weighted opportunities I increase is total XX% Allied continued continue and at saw X% excess heavily the over Health growth X% profitably during strong creating first history. the total, largest last company's submissions submission business. In year. casualty our submission from and growth accelerating in our during Environmental of the of to division an in quarter, saw we casualty XX,XXX and growth, growth X%, quarterly E&S first business, submissions. new in rate

submission rate momentarily, casualty experienced and the growth, E&S.Alongside the also strongest pricing highest excess further discuss renewal strong our and had will acceleration within divisions general I As both casualty core increases on conditions in our sync the sheet. both us we broadly these selective pricing of put And core about balance attractive to risks having be in E&S enables our business. dynamics remain

Our and on focus for delivering returns remains shareholders. consistent earnings

accounts meaningful not saw meet renewal, commercial the This many up several that come we rate did a decision not component with renew larger auto for our and hurdles, to the quarter, accounts. we made profitability

run. have over will performance and and we As previously we like these believe the underwriting the around last additional produce oversight, years, margins few implemented over rigor we our and actions discussed process long have better monitoring

the excess than As well the in our higher more experience were or previewed, nearly full conditions. of energy rate property our in single view, XX%. favorable low pricing some to increased underwriting than broadly our first as year be general in than and get divisions have casualty excess larger continues up and divisions up accelerated with divisions double-digit strength rates rates underwriting quarter casualty In X% Renewal our rates XX%, change across as and to last particular continues quarter the segment plan, and margins we continuing generate assumptions to remain that in E&S to XXXX as for trends the our majority XX.X% on meaningfully loss business the well recording pricing higher saw are We the range. attractive high with portfolio. this exceed of of confident increases as year we XXXX, pricing the

premium that steady us. opportunities for and profitable smaller long growth, submission been maintained we accounts a more where flow have of have new We have

ratio XX% on accounts thought we we underwriting development was loss larger an strong go prior as for Other let may actions about accident the $XX.X was for underwriting competitors spoke underwriting improvement to an made year E&S more them to willing XX.X% XXX impact of produced active million substantial other The some offer. changes prudent from with of quarter, it this prior quarter, during income. divisions available a division advantage have of to the benefit And Many Specialty Excess premium more These any basis catastrophes I day. first and sports the producing of the increased compensation. premiums over showed the The the and XX% prior to renewals strong rate than of was This accounts, of Admitted. We April, programs again term. in had an the XX% and Bridge with while written in the a a minimis at de and X.X% renewal meaningful the profit XX.X%, our in growth our direct than the impact for written in from the attractive pricing year. reported segment segment general quarter, losses Offsetting still ratio to submission and positive up quarter. the Reserve first of and year it's $XXX,XXX the we rate market offering compared first related which Casualty showing strong fronting result the earlier. the business prior XX% have Baltimore through year of combined actions segment the excess entertainment. to clearly decision Gross or primarily account in renewal quarter, of flow quarter, in each believe and existing casualty the the future, we see while our months. in we The E&S demonstrates of year excluding the gross workers' the not now year increasingly these in second first combined market. see E&S for was several and over to were programs from did the premium did X growth ratio our quarter. environment, premiums in growth was underwriters very aggressive large in we growth of we early non-renew the were continued opportunity the premiums segment prior casualty, tragedy.Turning set points during continue environmental from decline the And growth non seen take

and are rate continued loss continues execution with segment's in opportunities. submission by this of year. excess new increases and meaningful strong the performance of our We start be to E&S renewal market trend Overall, objectives characterized pleased the expected to and the

provide opportunities growth underwriting generate will ample on we focus XXXX shareholders. that for and believe consistent to for as continue to returns attractive We profitable

over commend in company the who to to employee call stated moment company the continue goal to I serve. better Sarah, a want and our take turn of hard-working markets of our base against resilient to even I progress and acknowledge the an Before making we do River James

have to that, additional we market, be this to pleased rate Our for of exactly I'll strong some overall the than employee XXXX to for turnover both employee in greatest quarter better percentage as Sarah the such the the turnover and voluntary advantage first are on was points quarter color quarter. continue provide grateful first in the our period retention. And group with we have ask and our same people Clearly, XXXX. the X same and

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

started a diluted period ago. $XX.X $X.XX per share share to $XX.XX on same the out strong per million As of income or the with a an same million you've basis, reporting $X.X period XXXX diluted income or per million seen, note of to for or share a shareholders On are to year ago. for $X.XX operating million net available adjusted per common compared year or $XX.X diluted $X.XX $X.XX we share net we compared as

Turning results. underwriting to our

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

the And to we of not managing year as limit elevated grants our in more experience slightly XX.X% operating We've quarter, in ago. expenses, underwriting half income XX% of treaty were renewal year XX% upon second March, Frank At which retention Our catastrophe our pushing of losses. ago. really expense we it's from the made year. due net mentioning in XX.X% period, last E&S to continued There consistent to loss the has the to from ratio our corporate any gross volatility XX.X%, line. people investments no that finally, prior had the and ratios This ticked year cover a the impact impact slightly, premiums. year as efficiently mentioned, for summer, in make more did ratio last worth was while eligible equity-based XX.X% retirement a down and our maximize expense key improved development. compensation prior and with year net are first from also in reside reinstatement the employees mentioned quarter reinsurance previously, up other to of from changed portfolio, And And this that technology. expense but including

net increase million we an quarter, recorded investment first year prior million income continuing from $XX.X $X.X the of of quarter. or the XX% operations, For from

to been returning the excess in Our X.X% of short-term holding this transaction. at a book last our through work in was amount which as portfolio compared X% of fair time are of X.X% our yield our year. strategies, embedded We've our cash close M&A we

this of fair income investments, portfolio, mid- our in some to allocate to gains the and of million of Overall, And of yields. begin in we to of values call core X% our dynamics to with market to as preferred well remain for which attractive $X.X line majority I'll forward, the our portfolio range. Going operator positioned attractive low net reinvestment on portfolios. changes were rates remains related fixed experienced We questions. to the the the to the that, turn strong take realized back and advantage common open stock

[Operator of Casey Instructions] Compass your line from question Point. first Alexander the comes And with

potentially I'd of casualty Congrats to non-renewals into see to more, from smaller in really see. to that and are additional policies, resolution It's to the could -- E&S. of it the lead larger lower sale, great larger a to Is towards strategy REIT great I no of trying working the nuclear on little it's appreciate limits away development developing the types bit and in accounts. issues get you verdicts? dig of claims a adverse speedy the like Frank. discipline and

we accomplish thanks underwriting question. Yes, additional will speak me the it your think questions. what trying we're of to let context the that first took here because about and Casey, on kind provide I some for And actions answer

specific in is ongoing for it underwriting times, in as an process and underwriting of first our in us. and management to exactly caused quarter. actions past, in portfolio spoken maintain the results And specific is specific our So about portfolio. a at very profitability quarters, writings for seeing it's the area what We to preserve you're took the this decrease we've rate

accounts primarily nonrenewed component. accounts as were these didn't commercial meet So profitability result, large we hurdles with several a heavy and excess a auto casualty our that

have high with it's I highest associated teens. in in could agreed commercial loss view of assumptions specific underlying not account So excess any in the have some we we loss instances, may a view significant write. the attachment proposed with trend line on had auto our all currently we of and emergence. believe XXXX loss just But specific instances, have it's our or very really, trend

And included several pricing a in on our million larger excess million impact essence, our ground a division in it our so of casualty of $X account, number we account we a and held saw $X larger accounts that alone. accounts

And we policies are force, a so mean, have in you'll I accounts we but have that few million. $X dozen than over know this. XX,XXX only greater

if few a these can't underwriting a XX,XXX you of nonrenew for you to accounts reasons, to of write them. So lot replace have

in You'll the directly the see impact pretty quarter.

us right decision production. have your prioritizing for And that smaller found, time in So of profitable point, been of we're comfortable I accounts over we made think, number profitability we the a more just for have reasons. to

But calls kind quarter. in forward how it commercial and will across moved E&S large certainly underwriting future of last those to and think segment quarters, next going the of impact in of a actually to And we have started so year. about middle in hard taking impact auto how us the at terms look we the on made our

And and we By and done. large, binary. on to much of and -- quarter outcome I already every is maybe clear to complete want review quarter second this the be Not been this. so has this had

loss these back COO. from nonrenewing underwrite, And rate to explore or and other any cut may In get We our we attachment choose pricing and automatically the we limit need. some We instances, terms instances, reinsurance. raise or aren't input accounts get We we our we in additional our means. that by actuaries our down.

that in than excess the accounts our lens. to take E&S a were auto-driven handful don't more X/X issue And was talking premium a but this accounts a discussing X-figure of President, segment have concentration casualty to maybe of quarter, hard in that now we're heavy at. So going dollar look that had about with much there we higher identified heavy this accounts of casualty auto with component same items, these another review he excess we're larger

may January we just concentration already last them have expect frankly. experienced at irrespective, of that and But same don't Some March. we looked year, we the quite in

comfort quarter, underwriting of the the actions way long it SME took of kind it the with it yes, kind spells a in the real vast because was So where we our of explaining S makes But I the portfolio. think that focused. still of in out up majority

-- had great  Look, still ratio a in color. you My but XX%. It's in how drive excellent do second is surplus, great -- through excess combined admitted. you that's question think but better it's specialty and it's specialty I admit, profitable, margins

people how see to income go? from opposed sideways? at a fee you think unhappy to also, just And workers' are running comp rate get growth admitted not do I exposure as specialty

Yes.

last the profitable rights over But California of we've of of noisy individual couple essence, line historically programs are and And the we transaction refocused risk make certainly sale impacted through top especially unit, the and listen, actions numbers comp So non-renewal bit at segment business. some the that the a we've has especially think renewal metrics mid little fronting I what workers' the out, terms of the for it been pure to that that us. of XXXX. in is program because a took the the done the then it the it in comp of to right and coming be now going quarters

focused. need scale expect continue solely returns now forward. we it generate We to going continue to to attractive that We are to

is your get moves the from in positive they existing XX% scale what this just from that's we of and programs, solid to comp environment. have answer Again, strategic our experience ex to gained in the think made saw scale we've So space, the where continuing continue period rating But particularly and growth, I in to additional relative growth first question the kind specialty admitted. makes we benefit quarter. awkward great -- to pretty some

the we have So a there do good news pipeline. is

we're of various diligence. now. some have at that looking They're programs in right We stages large

relative with So speak we'll new in and the have them, continue future quarters. to production of about to diligence more work hopefully to kind market reinsurance there

out and kind of rating right. I'll of my step James the And estate you the agencies? last could remaining is  All question then where River sits just review with

mean exactly Casey, remaining as now, I'm sits what it mean sure you I'm by you not to the company take that... by our happy

as company agency. rating conversations with finally The it do way out and are what you and sits with Re Casualty sit your of now the the where

that. I Sure. No, appreciate

quarterly regular the with agencies. rating have we So conversations

say where and I'd process, would So done by healthy at feel they're perspective, and makes on And a of a that apprised we've a we well leave both very certainly of quarterly probably if That's that sense. it, how do just part good I of dynamic. it's we It's current very now. And typically our about forward sit, we minimum. dialogue. go capital kind that and that and performance

Okay. discipline right. And the on accounts. All that those you're showing appreciate underwriting

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

of a accounts a closer -- Or through year? the larger that the that is look issue? is few XQ you're is appears, to going Kind be remaining that taking that at, spread

yes. Well,

in the year. again, started we of middle So process the last

just that last these one the accounts quarter be But other have level in where scrutiny. limit, reviewing We a maybe the the of you So of year are is gone point, kind more reemphasise attachment of the I question maybe outcome. maybe same the we had a additional there accounts. that again. to not a your But the type the outcomes retain had like will back But I these reinsurance account. started up we of nonrenewals of just point through is not there be first answer concentration still where buying quarter process think need We But some this necessarily with raising actually for may outcomes binary accounts of binary it's X/X renewal to of there's cutting business. quarter. kind non-renewed

Right. And it strong. sounds like April is pretty

off the starting a So good with momentum. quarter The...

Yes. I mean...

the been that mean, just not have actions that we've impacted me certainly top with second. line. management portfolio I time, since because I've a River touch it's Let on for first that James taken

most think in similar I we was the E&S recent and quarter segment declined, premiums XXXX a third believe, it of where was had the X%. quarter I dynamic

year as growth healthy see new we prepared So opportunities. to few again a robust continue the divisions, in in said business I underwriting directly And then comments, full related we of XXXX. impacting actions 'XX reported the for and but set a in and to renewal

So up the so support saw our from submission year. opportunities more we're continuing activity prior speaks well X,XXX We encouraging wholesale partners, which than to year strong the for to X%. distribution submissions and very receive set is the quarter,

Yes. I think I point, it you On hear were properly? submissions you was up general that said XX%? did -- casualty

That's right.

Did appetite? kind let set that's you were of the increase a the your -- the organic, is Did days? you what's range business? these or of know that's out wider coming distribution you of opportunity interested Or that just in that

the  No, more just I dynamics. market terms of broader latter, probably in it's think

as as think around years I inflation of from balances the market environment are playing the market soft combination overhang out of reinsurance reality reserve real tighter risk. last well for the as concerns still casualty real well the a with social the of

opportunities. growth in the of we're I like just E&S D&O, the -- opportunity. seeing say third-party would the opportunities more submission not with so market, in from we're keeping exception maybe So benefiting it's only

not seeing E&S back kind sector. come come more the into admitted seeing in. the you're tempted of market We're So to

down characterise Would you Was in was accident pricing? loss current the that would year-over-year. better then And that? say mix? ratio you that Okay. was E&S year How

Yes.

are about, about primarily plan So year-over-year is Casualty, of loss quarter 'XX. mix trend XXX higher right? and in then into has me, the excess view for as well. the growth baked loss some movement it issue, the both which as So points a talked in the as a of basis And -- General we excuse casualty talking assumptions in a course, ratio for well expected that refreshed you're

Shields with the [Operator from of question KBW. Instructions] Your line next Meyer comes

when you the compensation higher quarter, years in I said don't couple is apologise. that in earlier new past a the that the is quarter. missed some you ratio expense I because in there But higher the of of first comments. something Sarah, first see

adopted of I -- variability compensation would changes. directed investors, Yes. That's plan Meyer. We that We number as plus may had X.X us And And in of specifically, ago. a it plan and of the versus it with good designed certainly, and align our to compensation a market remember had did the a be degree how the lack targets that years you stands. as question, -- the to short-term company earned was a think target. better high about

to regard a and we we that a change are with have service. age STI. made of based we where on that. eligible folks function, So theoretically time, the years a institute to At it's And who our number retirement same change of made for

those changes of way year. than eligible. for in that the LTI quarter more So through is Basically, ratably first the the it's the expensed that rather expensed

So that that's recent causing dynamic, is phenomenon. what's that more a and

The press should Is fees. release about over we talks to professional that expect course of continue year? something the higher the that also

 Yes.

be Another a to question. That's great little bit lumpy. going

in forth that to would some JRG what to Some first little back and regard of so obviously come the quarter for the to Re, of that in with a of down. related expect close we of is bit experienced I the

to that. spend on a Just moment

cetera. of both in you at those year. that would as this equity that and where the last for and encompassing through comp If quarter et see expect the -- in about company professional operating the whole being all is flowing as I the fees, number well million you and first other $XX -- $X.X compared million corporate expenses, to that's look quarter as and PNLS

that bit a little elevated. is number So

be of it first to quarter last more that where was of And in year. first over versus the elevated X.X%. of i.e., the last I last than the XX% think closer the it's year, XX.X% -- rest year. this for to would quarter it's the number I down elevated same Meyer -- expect

at point the of one question, answerable quarter little I operations if discontinued second that there period and this a yet? closed. deal I'm but is guessing the then don't this Is for before any bit time, quantifying  And in there's know the casualty last in

not the But imagine would own be  Not that Meyer. we yet public. to days business would be I because small the pretty that for that XX

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

Thank you, Benjamin.

few want XXXX, Before today's last I acknowledge of been of thank Roberts, years. and will serving best the The upcoming since a leadership insight multiple of for company James E&S her committees from while end certainly committee knowledge we And Patricia her and all wish on and in has River the call, we retirement. benefited greatly to Board who's Director and the sharing compensation our sector. miss we our her wisdom, the

Thank their morning. everyone questions to the We results. you, rest speaking second of few for with Okay. look time thank you we today want to and quarter your and months received our enjoy I forward again this to discuss in the for day. all a

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

may You now disconnect.