James River Group Holdings has announced significant developments, including a new reinsurance agreement and an appointment to its board of directors.
The company reported that two of its principal operating subsidiaries have entered into a combined loss portfolio transfer and adverse development cover reinsurance agreement with State National Insurance Company, Inc.
Under this agreement, State National will provide $160 million in adverse development reinsurance coverage for James River’s Excess and Surplus Lines segment casualty portfolio for accident years 2010-2023, with James River retaining a 15% co-participation.
The reinsurance structure, which has no coverage sublimits but excludes exposure to a former large commercial auto insured, is set to bolster James River’s balance sheet and provide greater certainty to stakeholders.
Claims management will remain with James River, and the agreement includes a profit commission for 50% of any favorable development on the business ceded to State National below 104.5% of carried reserves, capped at $87 million.
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Frank D’Orazio, CEO of James River, said that the transaction is consistent with the company's strategy of de-risking while enhancing financial stability.
The agreement, executed on July 2, 2024, and effective from January 1, 2024, will result in a $52.2 million reduction in pre-tax income for the third quarter of 2024 due to the excess consideration paid over reserves ceded.
In addition to the reinsurance agreement, James River has appointed Christine LaSala (pictured above) to its board of directors as an independent, non-executive member.
LaSala's appointment increases the board's size from seven to eight directors. She will serve on the compensation and human capital committee and the nominating and corporate governance committee.
D’Orazio expressed enthusiasm about LaSala's appointment, noting her extensive knowledge of the specialty property and casualty insurance industry and her corporate governance expertise.
Her career also includes serving as the president and CEO of the WTC Captive Insurance Company and holding various roles at Johnson & Higgins, where she was the firm’s only woman partner and served as president of Johnson & Higgins New York.
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