Profits fall at James River but CEO bullish ‘strong rates’ will boost 2020

Bermuda-based insurance holdings company James River Group Holdings has reported a significant fall in income for 2019, with a deteriorated combined ratio in excess & surplus lines (E&S), specialty admitted insurance and casualty reinsurance.

The company reported gross written premiums of $1.4 billion, compared to $1.2 billion for 2018. Net income was $38 million, down from $64 million for 2018. The combined ratio of 101.2 percent was up from 96.6 percent for 2018. Underwriting profit was down to $18 million in 2019 from $55 million in 2018.

In E&S lines the combined ratio deteriorated from 92.3 percent in 2018 to 96.9 percent in 2019. In specialty admitted insurance, the combined ratio rose from 87.4 percent to 89.1 percent, and in casualty reinsurance the combined ratio rose from 97.5 percent to 105 percent.

However, results for Q4 showed significant strengths. Adjusted net operating income for the fourth quarter of 2019 was $23.3 million, compared to adjusted net operating income of $17.1 million for the same period in 2018.

Commenting on the fourth quarter results, J Adam Abram, the company’s chairman and chief executive officer, said: “James River had a strong quarter, generating a 93.8 percent combined ratio, our lowest combined ratio in three years, and $13.6 million of underwriting profit, the highest quarterly number we have reported since becoming a public company in 2014.

“We have enjoyed 23 consecutive quarters of rate increases in our E&S segment. This quarter, renewal rates increased by 6.6 percent, which was the largest quarterly increase since the market began to improve. The strong rate environment, coupled with a 27 percent growth in submissions during the fourth quarter, positions us well for 2020.”