James River Group Holdings has reported its financial results for the second quarter of 2024, highlighting a group combined ratio of 99.3% and an adjusted net operating return on tangible common equity of 14.9%.
The publishing of the latest financial reports comes recently after the rocky sale of its reinsurance arm JRG Reinsurance Company (JRG Re), a transaction which is now being scrutinized in a lawsuit.
In the excess and surplus (E&S) segment, the combined ratio was 95.4%, with a positive renewal rate change of 9.1%. Most underwriting divisions experienced positive pricing increases.
The specialty admitted insurance segment reported a combined ratio of 85.0%, with a 12.3% growth in fronting and program gross written premium, excluding the non-renewed workers' compensation program.
Net investment income for the quarter increased by 36.7% compared to the same period in 2023, driven by higher income across all asset classes. Shareholders' equity per share rose to $14.32, a 0.8% increase from March 31, 2024, while tangible common equity per share increased by 0.2% sequentially.
The company completed the sale of JRG Re on April 16. As a result, financials for the former casualty reinsurance segment have been reclassified to discontinued operations for all periods.
Net income from continuing operations available to common shareholders was $11.9 million, or $0.31 per diluted share. Adjusted net operating income was $12.7 million, or $0.33 per diluted share, reflecting strong investment income and profitable underwriting results from continuing operations.
CEO Frank D'Orazio noted that James River continued to focus on de-risking the organization and generating attractive returns on capital.
“E&S market conditions remain favorable amid accelerating submission growth and a strong rate environment during the second quarter as we continue to re-profile segments of our portfolio. While we executed an attractive retroactive reinsurance transaction last month, our board of directors continues its exploration of strategic alternatives for the company that was announced in November of 2023,” he said.
Net investment income for the quarter was $24.9 million, compared to $18.2 million in the prior year quarter. This increase was broad-based, with income growth from private investments and other investment classes.
The annualized gross investment yield on average fixed maturity, bank loan, and equity securities for the quarter was 5%, up from 4.3% in the same period in 2023, primarily due to higher market yields.
The company reported net realized and unrealized losses on investments of $2.3 million for the quarter, compared to gains of $1.6 million in the prior year quarter. The losses were mainly related to sales in the fixed income portfolio and changes in the fair values of common stock and bank loan portfolios.
In relation to the closing of the E&S loss portfolio transfer and adverse development cover, James River transferred approximately $310 million in cash for the payment of the premium to counterparty State National Insurance Company, Inc.
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