James River Group Reports $63.5 Million Net Loss for Fiscal Year 2024

James River Group Holdings, Ltd. reported a net loss of $63.5 million for the fiscal year ending December 31, 2024, a significant decline from a net income of $61.2 million in 2023. The company's total gross written premiums decreased by 5.1% to $1.43 billion, primarily driven by a 16.3% drop in net written premiums, which fell to $580.9 million. The Excess and Surplus Lines segment, which represents the majority of the company's business, experienced a slight increase in gross written premiums of 1.0%, while the Specialty Admitted Insurance segment saw a more substantial decline of 17.3%. The overall underwriting loss for the company was $105.6 million, resulting in a combined ratio of 117.6%, compared to a profit of $24.5 million and a combined ratio of 96.5% in the previous year.

The decline in profitability was largely attributed to adverse reserve development of $76.7 million in the Excess and Surplus Lines segment, which included a $52.2 million reserve charge related to the execution of an adverse development cover (ADC) agreement. Additionally, the company recorded $52.8 million in ceded premiums associated with the ADC, which further impacted the underwriting results. The loss ratio increased to 86.2% from 69.9% in 2023, reflecting the higher reserve development and the effects of the ceded premium. The expense ratio also rose to 31.4%, driven by increased compensation and bad debt expenses.

Strategically, James River Group completed the sale of its reinsurance subsidiary, JRG Re, on April 16, 2024, allowing the company to focus on its U.S. insurance operations. The sale was part of a broader strategic review initiated in late 2023. The company also entered into a partnership with Enstar Group Limited, which included a $12.5 million equity investment and an adverse development cover agreement. These actions are expected to strengthen the company's balance sheet and enhance its future profitability.

Operationally, the company reported a total employee headcount of 645 as of December 31, 2024, with a focus on maintaining a strong underwriting team. The Excess and Surplus Lines segment produced 71.0% of gross written premiums, while the Specialty Admitted Insurance segment accounted for 29.0%. The company continues to leverage its relationships with wholesale brokers to drive growth in its specialty insurance markets, despite facing challenges from increased competition and moderating rate increases.

Looking ahead, James River Group anticipates that the insurance market will remain competitive, particularly in the Excess and Surplus Lines segment. The company aims to manage its underwriting profitability by adjusting its risk appetite and pricing strategies in response to market conditions. The financial strength rating from A.M. Best remains at "A-" (Excellent) with a negative outlook, reflecting the need for the company to address its operational challenges and improve its financial performance in the coming periods.