|
☒
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Bermuda
|
98-0585280
|
(State of Incorporation)
|
(IRS Employer Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Names of each exchange on which registered
|
|||
Common Shares, par value $0.0002 per share
|
JRVR
|
|
NASDAQ
|
Global Select Market
|
|
Large accelerated filer
|
x
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging Growth Company
|
☐
|
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
•
|
the inherent uncertainty of estimating reserves and the possibility that incurred losses may be greater than our loss and loss adjustment expense reserves;
|
•
|
inaccurate estimates and judgments in our risk management may expose us to greater risks than intended;
|
•
|
the potential loss of key members of our management team or key employees and our ability to attract and retain personnel;
|
•
|
adverse economic factors resulting in the sale of fewer policies than expected or an increase in the frequency or severity of claims, or both;
|
•
|
a decline in our financial strength rating resulting in a reduction of new or renewal business;
|
•
|
reliance on a select group of brokers and agents for a significant portion of our business and the impact of our potential failure to maintain such relationships;
|
•
|
reliance on a select group of customers for a significant portion of our business and the impact of our potential failure to maintain, or decision to terminate, such relationships;
|
•
|
losses resulting from reinsurance counterparties failing to pay us on reinsurance claims, insurance companies with whom we have a fronting arrangement failing to pay us for claims, or an insured group of companies with whom we have an indemnification arrangement failing to perform their reimbursement obligations;
|
•
|
changes in laws or government regulation, including tax or insurance law and regulations;
|
•
|
the ongoing effect of Public Law No. 115-97, informally titled the Tax Cuts and Jobs Act, which may have a significant effect on us including, among other things, by potentially increasing our tax rate, as well as on our shareholders;
|
•
|
in the event we do not qualify for the insurance company exception to the passive foreign investment company (“PFIC”) rules and are therefore considered a PFIC, there could be material adverse tax consequences to an investor that is subject to U.S. federal income taxation;
|
•
|
the Company or any of its foreign subsidiaries becoming subject to U.S. federal income taxation;
|
•
|
a failure of any of the loss limitations or exclusions we utilize to shield us from unanticipated financial losses or legal exposures, or other liabilities;
|
•
|
losses from catastrophic events which substantially exceed our expectations and/or exceed the amount of reinsurance we have purchased to protect us from such events;
|
•
|
potential effects on our business of emerging claim and coverage issues;
|
•
|
exposure to credit risk, interest rate risk and other market risk in our investment portfolio;
|
•
|
our ability to obtain reinsurance coverage at prices and on terms that allow us to transfer risk and adequately protect our company against financial loss;
|
•
|
the potential impact of internal or external fraud, operational errors, systems malfunctions or cyber security incidents;
|
•
|
our ability to manage our growth effectively;
|
•
|
inadequacy of premiums we charge to compensate us for our losses incurred;
|
•
|
failure to maintain effective internal controls in accordance with Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”);
|
•
|
changes in our financial condition, regulations or other factors that may restrict our subsidiaries’ ability to pay us dividends; and
|
•
|
other risks and uncertainties discussed under “Risk Factors” and elsewhere in this Annual Report.
|
Item 1.
|
BUSINESS
|
Gross Written Premiums by Segment
|
|
Gross Written Premiums
Year Ended December 31, 2019 |
|
% of Total
|
|||
|
|
(in thousands)
|
|
|
|
||
Excess and Surplus Lines segment
|
|
$
|
922,320
|
|
|
62.7
|
%
|
Specialty Admitted Insurance segment
|
|
387,642
|
|
|
26.4
|
%
|
|
Casualty Reinsurance segment
|
|
160,773
|
|
|
10.9
|
%
|
|
|
|
$
|
1,470,735
|
|
|
100.0
|
%
|
Gross Written Premiums by Market
|
|
|
|
|
|||
Non-admitted markets
|
|
$
|
1,077,219
|
|
|
73.2
|
%
|
Admitted markets
|
|
393,516
|
|
|
26.8
|
%
|
|
|
|
$
|
1,470,735
|
|
|
100.0
|
%
|
|
|
Gross Written Premiums
Year Ended December 31,
|
|||||||||||||||||||||
E&S Division
|
|
2019
|
|
Percentage
of Total
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial Auto
|
|
$
|
405,565
|
|
|
44.0
|
%
|
|
$
|
322,126
|
|
|
$
|
247,960
|
|
|
$
|
110,050
|
|
|
$
|
73,770
|
|
Excess Casualty
|
|
118,954
|
|
|
12.9
|
%
|
|
66,452
|
|
|
51,160
|
|
|
43,574
|
|
|
32,458
|
|
|||||
General Casualty
|
|
115,832
|
|
|
12.6
|
%
|
|
54,127
|
|
|
38,097
|
|
|
36,858
|
|
|
30,972
|
|
|||||
Manufacturers and Contractors
|
|
105,096
|
|
|
11.4
|
%
|
|
79,160
|
|
|
85,719
|
|
|
83,279
|
|
|
78,315
|
|
|||||
Energy
|
|
45,442
|
|
|
4.9
|
%
|
|
33,942
|
|
|
29,704
|
|
|
29,709
|
|
|
30,623
|
|
|||||
Excess Property
|
|
31,606
|
|
|
3.4
|
%
|
|
16,963
|
|
|
14,447
|
|
|
14,083
|
|
|
12,498
|
|
|||||
Allied Health
|
|
26,713
|
|
|
2.9
|
%
|
|
30,450
|
|
|
19,181
|
|
|
14,413
|
|
|
13,513
|
|
|||||
Life Sciences
|
|
24,462
|
|
|
2.7
|
%
|
|
16,636
|
|
|
12,981
|
|
|
11,132
|
|
|
8,917
|
|
|||||
Small Business
|
|
19,725
|
|
|
2.1
|
%
|
|
14,808
|
|
|
11,307
|
|
|
9,104
|
|
|
6,916
|
|
|||||
Environmental
|
|
16,539
|
|
|
1.8
|
%
|
|
10,499
|
|
|
7,920
|
|
|
5,321
|
|
|
4,437
|
|
|||||
Professional Liability
|
|
6,441
|
|
|
0.7
|
%
|
|
5,916
|
|
|
6,326
|
|
|
8,361
|
|
|
10,046
|
|
|||||
Sports and Entertainment
|
|
4,212
|
|
|
0.4
|
%
|
|
3,685
|
|
|
3,021
|
|
|
2,221
|
|
|
2,667
|
|
|||||
Medical Professionals
|
|
1,733
|
|
|
0.2
|
%
|
|
1,774
|
|
|
2,297
|
|
|
2,739
|
|
|
3,585
|
|
|||||
Total
|
|
$
|
922,320
|
|
|
100.0
|
%
|
|
$
|
656,538
|
|
|
$
|
530,120
|
|
|
$
|
370,844
|
|
|
$
|
308,717
|
|
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||
State
|
|
Gross
Written
Premiums
|
|
% of
Total
|
|
Gross
Written
Premiums
|
|
% of
Total
|
|
Gross
Written Premiums |
|
% of
Total |
|
Gross
Written Premiums |
|
Gross
Written Premiums |
|||||||||||||
California
|
|
$
|
368,488
|
|
|
40.0
|
%
|
|
$
|
213,729
|
|
|
32.6
|
%
|
|
$
|
153,340
|
|
|
28.9
|
%
|
|
$
|
114,107
|
|
|
$
|
125,343
|
|
New York
|
|
89,680
|
|
|
9.7
|
%
|
|
54,417
|
|
|
8.3
|
%
|
|
47,585
|
|
|
9.0
|
%
|
|
39,407
|
|
|
24,314
|
|
|||||
Florida
|
|
67,700
|
|
|
7.3
|
%
|
|
47,918
|
|
|
7.3
|
%
|
|
55,502
|
|
|
10.5
|
%
|
|
35,765
|
|
|
23,853
|
|
|||||
Texas
|
|
51,978
|
|
|
5.6
|
%
|
|
31,604
|
|
|
4.8
|
%
|
|
29,567
|
|
|
5.6
|
%
|
|
26,708
|
|
|
24,491
|
|
|||||
Massachusetts
|
|
34,494
|
|
|
3.7
|
%
|
|
19,758
|
|
|
3.0
|
%
|
|
13,587
|
|
|
2.5
|
%
|
|
8,496
|
|
|
4,835
|
|
|||||
Virginia
|
|
23,563
|
|
|
2.6
|
%
|
|
15,532
|
|
|
2.4
|
%
|
|
10,741
|
|
|
2.0
|
%
|
|
6,534
|
|
|
4,088
|
|
|||||
Maryland
|
|
19,889
|
|
|
2.2
|
%
|
|
13,461
|
|
|
2.1
|
%
|
|
7,872
|
|
|
1.5
|
%
|
|
4,195
|
|
|
2,842
|
|
|||||
Washington
|
|
16,573
|
|
|
1.8
|
%
|
|
17,329
|
|
|
2.6
|
%
|
|
13,697
|
|
|
2.6
|
%
|
|
10,270
|
|
|
7,069
|
|
|||||
Pennsylvania
|
|
16,206
|
|
|
1.8
|
%
|
|
8,582
|
|
|
1.3
|
%
|
|
12,041
|
|
|
2.3
|
%
|
|
8,666
|
|
|
7,135
|
|
|||||
Louisiana
|
|
16,001
|
|
|
1.7
|
%
|
|
12,654
|
|
|
1.9
|
%
|
|
8,508
|
|
|
1.6
|
%
|
|
6,584
|
|
|
5,360
|
|
|||||
All other states
|
|
217,748
|
|
|
23.6
|
%
|
|
221,554
|
|
|
33.7
|
%
|
|
177,680
|
|
|
33.5
|
%
|
|
110,112
|
|
|
79,387
|
|
|||||
Total
|
|
$
|
922,320
|
|
|
100.0
|
%
|
|
$
|
656,538
|
|
|
100.0
|
%
|
|
$
|
530,120
|
|
|
100.0
|
%
|
|
$
|
370,844
|
|
|
$
|
308,717
|
|
2010
|
54.9
|
%
|
2011
|
48.5
|
%
|
2012
|
52.6
|
%
|
2013
|
40.4
|
%
|
2014
|
55.2
|
%
|
2015
|
54.5
|
%
|
2016
|
62.6
|
%
|
2017
|
80.2
|
%
|
2018
|
78.8
|
%
|
2019
|
84.4
|
%
|
•
|
Individual risk workers’ compensation business, underwritten by our staff and generated by appointed agents in 14 states produced 16.4% of 2019 gross written premiums in this segment, (14.8% in 2018, 13.9% in 2017, 21.7% in 2016, and 39.5% in 2015); and
|
•
|
Fronting and program business written through selected MGAs, insurance carriers, and other producers which represented 83.6% of 2019 gross written premiums in this segment, (85.2% in 2018, 86.1% in 2017, 78.3% in 2016, and 60.5% in 2015).
|
Reinsurer
|
|
Reinsurance
Recoverable as of December 31, 2019 |
|
A.M. Best Rating
December 31, 2019
|
||
|
|
(in thousands)
|
|
|
||
Swiss Reinsurance America Corporation
|
|
$
|
191,402
|
|
|
A+
|
Berkley Insurance Company
|
|
59,562
|
|
|
A+
|
|
Aioi Nissay Dowa Insurance Company
|
|
57,982
|
|
|
A+
|
|
Safety National Casualty
|
|
50,290
|
|
|
A+
|
|
Munich Reinsurance America
|
|
28,437
|
|
|
A+
|
|
Endurance Assurance Corporation
|
|
25,849
|
|
|
A+
|
|
North Carolina Reinsurance Facility
|
|
24,148
|
|
|
Unrated(2)
|
|
Hannover Ruckversicherungs AG
|
|
22,145
|
|
|
A+
|
|
American European Insurance Company
|
|
20,847
|
|
|
B(1)
|
|
Cincinnati Insurance Company
|
|
19,530
|
|
|
A+
|
|
Top 10 Total
|
|
500,192
|
|
|
|
|
Other
|
|
167,853
|
|
|
|
|
Total
|
|
$
|
668,045
|
|
|
|
|
(1)
|
This reinsurer is below A-. All material reinsurance recoverable amounts from this reinsurer are collateralized.
|
(2)
|
The North Carolina Reinsurance Facility is a residual market mechanism for automobile insurance in North Carolina.
|
•
|
Loss emergence and insured reporting patterns;
|
•
|
Underlying policy terms and conditions;
|
•
|
Business and exposure mix;
|
•
|
Trends in claim frequency and severity;
|
•
|
Changes in operations;
|
•
|
Emerging economic and social trends;
|
•
|
Inflation;
|
•
|
Changes in the regulatory and litigation environments; and
|
•
|
Discussions with third-party actuarial consultants.
|
Segment
|
|
Excess and
Surplus Lines |
|
Specialty
Admitted Insurance |
|
Casualty
Reinsurance |
|
Grand Total
|
||||||||
Calendar Year
|
|
|
|
|
|
|
|
|
||||||||
2019
|
|
$
|
(51,173
|
)
|
(1)
|
$
|
5,252
|
|
|
$
|
(23,087
|
)
|
(9)
|
$
|
(69,008
|
)
|
2018
|
|
(15,012
|
)
|
(2)
|
5,560
|
|
|
(8,220
|
)
|
|
(17,672
|
)
|
||||
2017
|
|
(20,023
|
)
|
(3)
|
2,721
|
|
|
(4,170
|
)
|
|
(21,472
|
)
|
||||
2016
|
|
24,079
|
|
(4)
|
3,822
|
|
|
(4,185
|
)
|
|
23,716
|
|
||||
2015
|
|
25,424
|
|
(5)
|
3,531
|
|
|
(12,637
|
)
|
|
16,318
|
|
||||
2014
|
|
27,283
|
|
(6)
|
5,854
|
|
|
(5,719
|
)
|
|
27,418
|
|
||||
2013
|
|
40,734
|
|
(7)
|
1,410
|
|
|
(4,692
|
)
|
|
37,452
|
|
||||
2012
|
|
20,122
|
|
(8)
|
(4,898
|
)
|
|
(16,617
|
)
|
(10)
|
(1,393
|
)
|
||||
2011
|
|
21,034
|
|
|
1,712
|
|
|
(2,835
|
)
|
|
19,911
|
|
||||
2010
|
|
10,922
|
|
|
(381
|
)
|
|
(857
|
)
|
|
9,684
|
|
||||
Cumulative Development
|
|
$
|
83,390
|
|
|
$
|
24,583
|
|
|
$
|
(83,019
|
)
|
|
$
|
24,954
|
|
|
(1)
|
Includes $57.4 million of adverse development in the commercial auto line of business that was primarily related to the 2016 and 2017 contract years with Rasier, partially offset by $6.2 million of favorable development from other divisions.
|
(2)
|
Includes $20.7 million of adverse development in the commercial auto line of business that was primarily related to the 2016 contract year with Rasier, partially offset by $5.7 million of favorable development from other divisions.
|
(3)
|
Includes $38.7 million of adverse development in the commercial auto line of business that was primarily related to the 2016 contract year with Rasier, partially offset by $18.6 million of favorable development from other divisions primarily from the 2014 through 2016 accident years.
|
(4)
|
Includes $10.0 million of favorable development from the 2015 accident year, $10.7 million from the 2014 accident year and $4.5 million from the 2013 accident year.
|
(5)
|
Includes $17.3 million and $10.5 million of favorable development from the 2014 and 2013 accident year, respectively.
|
(6)
|
Includes $7.9 million of favorable development from the 2011 accident year, $4.2 million from the 2007 accident year and $5.0 million from the 2009 accident year.
|
(7)
|
Includes $11.8 million of favorable development from the 2009 accident year, $7.3 million of favorable development from the 2007 accident year and $5.8 million of favorable development from the 2008 accident year.
|
(8)
|
Includes $8.0 million of favorable development from the 2009 accident year, $4.3 million of favorable development from the 2008 accident year and $4.1 million of favorable development from the 2007 accident year.
|
(9)
|
Includes adverse development primarily related to accident years 2011 through 2016. This adverse development was mainly in the general liability and commercial auto lines of business.
|
(10)
|
Includes $9.0 million of adverse development on assumed crop business almost entirely from the 2011 accident year and $7.6 million of adverse development on other assumed business.
|
|
|
December 31, 2019
|
||||||||||||||||
Portfolio
|
|
Book Value
|
|
Market Value
|
|
Carrying Value
|
|
Book Yield
|
|
% of Carrying
Value
|
||||||||
|
|
($ in thousands)
|
||||||||||||||||
Core
|
|
$
|
1,552,646
|
|
|
$
|
1,554,332
|
|
|
$
|
1,554,332
|
|
|
2.79
|
%
|
|
76.9
|
%
|
Bank Loans
|
|
284,015
|
|
|
273,689
|
|
|
282,129
|
|
|
6.78
|
%
|
|
13.9
|
%
|
|||
Incremental Yield
|
|
113,675
|
|
|
126,459
|
|
|
126,459
|
|
|
6.50
|
%
|
|
6.2
|
%
|
|||
Private Investments
|
|
|
|
|
|
|
|
61,210
|
|
|
NA
|
|
|
3.0
|
%
|
|||
Total
|
|
|
|
|
|
|
|
2,024,130
|
|
|
|
|
|
100.0
|
%
|
|||
Less cash and cash equivalents in Core and Bank Loans
|
|
|
|
|
|
|
|
(30,770
|
)
|
|
|
|
|
|||||
Total Invested Assets
|
|
|
|
|
|
|
|
$
|
1,993,360
|
|
|
|
|
|
|
|
2017
|
|
2018
|
|
2019
|
|
Trailing 3 years
Ended 2019
|
||||
Core
|
|
3.09
|
%
|
|
0.73
|
%
|
|
6.80
|
%
|
|
3.51
|
%
|
Bank Loans
|
|
6.56
|
%
|
|
3.82
|
%
|
|
3.56
|
%
|
|
4.64
|
%
|
Incremental
|
|
10.86
|
%
|
|
0.42
|
%
|
|
14.34
|
%
|
|
8.38
|
%
|
Total
|
|
4.49
|
%
|
|
1.32
|
%
|
|
6.87
|
%
|
|
4.20
|
%
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
Gross Written Premiums
|
|
$
|
|
% Change
|
|
$
|
|
% Change
|
|
$
|
|
% Change
|
|||||||||
|
|
($ in thousands)
|
|||||||||||||||||||
Excess and Surplus Lines
|
|
$
|
922,320
|
|
|
40.5
|
%
|
|
$
|
656,538
|
|
|
23.8
|
%
|
|
$
|
530,120
|
|
|
42.9
|
%
|
Specialty Admitted Insurance
|
|
387,642
|
|
|
3.6
|
%
|
|
374,346
|
|
|
18.3
|
%
|
|
316,430
|
|
|
73.7
|
%
|
|||
Casualty Reinsurance
|
|
160,773
|
|
|
18.3
|
%
|
|
135,889
|
|
|
(42.3
|
)%
|
|
235,355
|
|
|
27.7
|
%
|
|||
Total
|
|
$
|
1,470,735
|
|
|
26.1
|
%
|
|
$
|
1,166,773
|
|
|
7.8
|
%
|
|
$
|
1,081,905
|
|
|
46.7
|
%
|
Item 1A.
|
RISK FACTORS
|
•
|
When we write “occurrence” policies, we are obligated to pay covered claims, up to the contractually agreed amount, for any covered loss that occurs while the policy is in force. Losses can emerge many years after a policy has lapsed. Accordingly, our first notice of a claim or group of claims may arise many years after a policy has lapsed. Approximately 94% of our Excess and Surplus Lines net casualty loss reserves are associated with “occurrence form” policies at December 31, 2019.
|
•
|
Even when a claim is received (irrespective of whether the policy is a “claims made” or “occurrence” basis form), it may take considerable time to fully appreciate the extent of the covered loss suffered by the insured and, consequently, estimates of loss associated with specific claims can increase over time.
|
•
|
New theories of liability are enforced retroactively from time to time by courts. See also “The effect of emerging claim and coverage issues on our business is uncertain” risk factor herein.
|
•
|
Volatility in the financial markets, economic events and other external factors may result in an increase in the number of claims and the severity of the claims reported. In addition, elevated inflationary conditions could, among other things, cause loss costs to increase.
|
•
|
If claims became more frequent, even if we had no liability for those claims, the cost of evaluating these potential claims could escalate beyond the amount of the reserves we have established. As we enter new lines of business, or as a result of new theories of claims, we may encounter an increase in claims frequency and greater claims handling costs than we had anticipated.
|
•
|
We regularly enter new lines of insurance, and as a consequence, we sometimes have to make estimates of future losses for risk classes with which we do not have a great deal of experience. This lack of experience may contribute to making errors of judgment when establishing reserves.
|
•
|
The increased lapse of time from the occurrence of an event to the reporting of the claim and the ultimate resolution or settlement of the claim.
|
•
|
The diversity of development patterns among different types of reinsurance treaties.
|
•
|
The necessary reliance on the ceding company for information regarding claims.
|
•
|
if we change our business practices from our organizational business plan in a manner that no longer supports our A.M. Best’s rating;
|
•
|
if unfavorable financial, regulatory or market trends affect us, including excess market capacity;
|
•
|
if our losses exceed our loss reserves;
|
•
|
if we have unresolved issues with government regulators;
|
•
|
if we are unable to retain our senior management or other key personnel;
|
•
|
if our investment portfolio incurs significant losses; or
|
•
|
if A.M. Best alters its capital adequacy assessment methodology in a manner that would adversely affect our rating.
|
•
|
the Excess and Surplus Lines segment conducted business with three brokers that produced an aggregate of $686.4 million in gross written premiums, or 74.4% of that segment’s gross written premiums for the year;
|
•
|
the Specialty Admitted Insurance segment conducted business with two agencies that produced $199.6 million in gross written premiums, representing 51.5% of that segment’s gross written premiums for the year; and
|
•
|
the Casualty Reinsurance segment conducted business with four brokers that generated $158.0 million of gross written premiums, or 98.3% of that segment’s gross written premiums for the year.
|
•
|
Asbestos liability applied to manufacturers of products and contractors who installed those products;
|
•
|
Apportionment of liability for settlement assigned to subcontractors who may have been involved in mundane tasks (such as installing sheetrock in a home); and
|
•
|
Court decisions, such as the 1995 Montrose decision in California, that read policy exclusions narrowly so as to expand coverage, thereby requiring insurers to create and write new exclusions.
|
•
|
collect and properly analyze a substantial volume of data from our insureds;
|
•
|
develop, test and apply appropriate actuarial projections and rating formulas;
|
•
|
closely monitor and timely recognize changes in trends; and
|
•
|
project both frequency and severity of our insureds’ losses with reasonable accuracy.
|
•
|
insufficient or unreliable data;
|
•
|
incorrect or incomplete analysis of available data;
|
•
|
uncertainties generally inherent in estimates and assumptions;
|
•
|
our failure to implement appropriate actuarial projections and rating formulas or other pricing methodologies;
|
•
|
regulatory constraints on rate increases;
|
•
|
our failure to accurately estimate investment yields and the duration of our liability for loss and loss adjustment expenses; and
|
•
|
unanticipated court decisions, legislation or regulatory action.
|
•
|
fund liquidity needs caused by underwriting or investment losses;
|
•
|
replace capital lost in the event of significant reinsurance losses or adverse reserve developments;
|
•
|
satisfy letters of credit or guarantee bond requirements that may be imposed by our clients or by regulators;
|
•
|
meet rating agency or regulatory capital requirements; or
|
•
|
respond to competitive pressures.
|
•
|
An increase in capital-raising by companies in our lines of business, which could result in new entrants to our markets and an excess of capital in the industry;
|
•
|
The deregulation of commercial insurance lines in certain states and the possibility of federal regulatory reform of the insurance industry, which could increase competition from standard carriers for our E&S lines of insurance business; and
|
•
|
Changing practices facilitated by the Internet may lead to greater competition in the insurance business. Among the possible changes are shifts in the way in which commercial insurance is purchased, which could affect both admitted and E&S lines.
|
•
|
our operating and financial performance and prospects;
|
•
|
our quarterly or annual earnings or earnings estimates, or those of other companies in our industry;
|
•
|
failure to meet external expectations or management guidance;
|
•
|
market reaction to adverse loss reserve development;
|
•
|
the loss of one or more individually large clients, and its impact on our growth rate, profitability and financial condition;
|
•
|
exposure to capital market risks related to changes in interest rates, realized investment losses, credit spreads, equity prices, foreign exchange rates and performance of insurance-linked investments;
|
•
|
our creditworthiness, financial condition, performance and prospects;
|
•
|
termination of payment of dividends on our common shares, or payment of a reduced amount of dividends;
|
•
|
actual or anticipated growth rates relative to our competitors;
|
•
|
perceptions of the investment opportunity associated with our common shares relative to other investment alternatives;
|
•
|
speculation by the investment community regarding our business;
|
•
|
future announcements concerning our business or our competitors’ businesses;
|
•
|
the public’s reaction to our press releases, other public announcements and filings with the SEC;
|
•
|
changes in accounting standards, policies, guidance, interpretations or principles;
|
•
|
market and industry perception of our success, or lack thereof, in pursuing our strategy;
|
•
|
strategic actions by us or our competitors, such as acquisitions, restructurings, significant contracts or joint ventures;
|
•
|
catastrophes that are perceived by investors as impacting the insurance and reinsurance market in general;
|
•
|
changes in laws or government regulation, including tax or insurance laws and regulations;
|
•
|
potential characterization of us as a PFIC;
|
•
|
general market, economic and political conditions;
|
•
|
changes in conditions or trends in our industry, geographies or customers;
|
•
|
arrival and departure of key personnel;
|
•
|
the number of common shares that are publicly traded;
|
•
|
the offering and issuance of common shares by us, or sales of common shares by our directors or executive officers; and
|
•
|
adverse resolution of litigation against us.
|
•
|
the total voting power of any U.S. person owning more than 9.5% of our common shares will be reduced to 9.5% of the total voting power of our common shares, excluding shareholders that held more than 9.5% of our common shares on the day of completion of our IPO;
|
•
|
our board of directors has the authority to issue preferred shares without shareholder approval, which could be used to dilute the ownership of a potential hostile acquirer;
|
•
|
our shareholders may only remove directors for cause;
|
•
|
there are advance notice requirements for shareholders with respect to director nominations and actions to be taken at annual meetings; and
|
•
|
under Bermuda law, for so long as JRG Re and Carolina Re are registered under the Insurance Act, the BMA may object to a person holding more than 10%, 20%, 33% or 50% of our common shares if it appears to the BMA that the person is not or is no longer fit and proper to be such a holder (See “— There are regulatory limitations on the ownership and transfer of our common shares.” risk factor herein).
|
Item 1B.
|
UNRESOLVED STAFF COMMENTS
|
Item 2.
|
PROPERTIES
|
Item 3.
|
LEGAL PROCEEDINGS
|
Item 4.
|
MINE SAFETY DISCLOSURE
|
Item 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
12/14
|
|
12/15
|
|
12/16
|
|
12/17
|
|
12/18
|
|
12/19
|
James River Group Holdings, Ltd.
|
|
100.00
|
|
155.85
|
|
205.00
|
|
205.96
|
|
194.10
|
|
224.92
|
Russell 2000
|
|
100.00
|
|
95.59
|
|
115.95
|
|
132.94
|
|
118.30
|
|
148.49
|
Peer Group
|
|
100.00
|
|
121.97
|
|
136.11
|
|
157.61
|
|
159.04
|
|
198.35
|
Item 6.
|
SELECTED FINANCIAL DATA
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
($ in thousands, except for per share data)
|
||||||||||||||||||
Operating Results:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross written premiums(1)
|
|
$
|
1,470,735
|
|
|
$
|
1,166,773
|
|
|
$
|
1,081,905
|
|
|
$
|
737,398
|
|
|
$
|
572,194
|
|
Ceded written premiums(2)
|
|
(574,585
|
)
|
|
(404,101
|
)
|
|
(315,279
|
)
|
|
(179,690
|
)
|
|
(101,162
|
)
|
|||||
Net written premiums
|
|
$
|
896,150
|
|
|
$
|
762,672
|
|
|
$
|
766,626
|
|
|
$
|
557,708
|
|
|
$
|
471,032
|
|
Net earned premiums
|
|
$
|
823,746
|
|
|
$
|
815,398
|
|
|
$
|
741,109
|
|
|
$
|
515,663
|
|
|
$
|
461,205
|
|
Net investment income
|
|
75,652
|
|
|
61,256
|
|
|
61,119
|
|
|
52,638
|
|
|
44,835
|
|
|||||
Net realized investment (losses) gains
|
|
(2,919
|
)
|
|
(5,479
|
)
|
|
(1,989
|
)
|
|
7,565
|
|
|
(4,547
|
)
|
|||||
Other income
|
|
10,646
|
|
|
14,424
|
|
|
17,386
|
|
|
10,361
|
|
|
3,428
|
|
|||||
Total revenues
|
|
907,125
|
|
|
885,599
|
|
|
817,625
|
|
|
586,227
|
|
|
504,921
|
|
|||||
Losses and loss adjustment expenses
|
|
672,102
|
|
|
600,276
|
|
|
555,377
|
|
|
325,421
|
|
|
279,016
|
|
|||||
Other operating expenses
|
|
170,908
|
|
|
201,035
|
|
|
196,993
|
|
|
170,828
|
|
|
157,803
|
|
|||||
Other expenses
|
|
1,055
|
|
|
1,300
|
|
|
539
|
|
|
1,590
|
|
|
730
|
|
|||||
Interest expense
|
|
10,596
|
|
|
11,553
|
|
|
8,974
|
|
|
8,448
|
|
|
6,999
|
|
|||||
Amortization of intangible assets
|
|
597
|
|
|
597
|
|
|
597
|
|
|
597
|
|
|
597
|
|
|||||
Total expenses
|
|
855,258
|
|
|
814,761
|
|
|
762,480
|
|
|
506,884
|
|
|
445,145
|
|
|||||
Income before income tax expense
|
|
51,867
|
|
|
70,838
|
|
|
55,145
|
|
|
79,343
|
|
|
59,776
|
|
|||||
Income tax expense
|
|
13,528
|
|
|
7,008
|
|
|
11,579
|
|
|
4,872
|
|
|
6,279
|
|
|||||
Net income
|
|
$
|
38,339
|
|
|
$
|
63,830
|
|
|
$
|
43,566
|
|
|
$
|
74,471
|
|
|
$
|
53,497
|
|
Adjusted net operating income(4)
|
|
$
|
42,934
|
|
|
$
|
70,596
|
|
|
$
|
47,385
|
|
|
$
|
71,318
|
|
|
$
|
61,090
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per share
|
|
$
|
1.27
|
|
|
$
|
2.14
|
|
|
$
|
1.48
|
|
|
$
|
2.56
|
|
|
$
|
1.87
|
|
Diluted earnings per share
|
|
$
|
1.25
|
|
|
$
|
2.11
|
|
|
$
|
1.44
|
|
|
$
|
2.49
|
|
|
$
|
1.82
|
|
Dividends declared per share
|
|
$
|
1.20
|
|
|
$
|
1.20
|
|
|
$
|
1.70
|
|
|
$
|
2.25
|
|
|
$
|
1.64
|
|
Weighted-average shares outstanding - diluted
|
|
30,673,924
|
|
|
30,307,101
|
|
|
30,273,149
|
|
|
29,894,378
|
|
|
29,334,918
|
|
|
|
At or for the Year Ended December 31,
|
||||||||||||||||||
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
|
($ in thousands, except for per share amounts and ratios)
|
||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and invested assets(11)
|
|
$
|
2,200,272
|
|
|
$
|
1,850,303
|
|
|
$
|
1,611,149
|
|
|
$
|
1,442,114
|
|
|
$
|
1,350,697
|
|
Reinsurance recoverables
|
|
701,266
|
|
|
485,715
|
|
|
313,816
|
|
|
185,614
|
|
|
143,086
|
|
|||||
Goodwill and intangible assets
|
|
218,771
|
|
|
219,368
|
|
|
220,165
|
|
|
220,762
|
|
|
221,359
|
|
|||||
Total assets
|
|
5,024,405
|
|
|
3,136,776
|
|
|
2,756,695
|
|
|
2,346,533
|
|
|
2,055,497
|
|
|||||
Reserve for losses and loss adjustment expenses
|
|
2,045,506
|
|
|
1,661,459
|
|
|
1,292,349
|
|
|
943,865
|
|
|
785,322
|
|
|||||
Unearned premiums
|
|
524,377
|
|
|
386,473
|
|
|
418,114
|
|
|
390,563
|
|
|
301,104
|
|
|||||
Senior debt
|
|
158,300
|
|
|
118,300
|
|
|
98,300
|
|
|
88,300
|
|
|
88,300
|
|
|||||
Junior subordinated debt
|
|
104,055
|
|
|
104,055
|
|
|
104,055
|
|
|
104,055
|
|
|
104,055
|
|
|||||
Total liabilities
|
|
4,245,824
|
|
|
2,427,535
|
|
|
2,061,996
|
|
|
1,653,312
|
|
|
1,374,459
|
|
|||||
Total shareholders’ equity
|
|
778,581
|
|
|
709,241
|
|
|
694,699
|
|
|
693,221
|
|
|
681,038
|
|
|||||
GAAP Underwriting Ratios:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss ratio(5)
|
|
81.6
|
%
|
|
73.6
|
%
|
|
74.9
|
%
|
|
63.1
|
%
|
|
60.5
|
%
|
|||||
Expense ratio(6)
|
|
19.6
|
%
|
|
23.0
|
%
|
|
24.3
|
%
|
|
31.2
|
%
|
|
33.5
|
%
|
|||||
Combined ratio(7)
|
|
101.2
|
%
|
|
96.6
|
%
|
|
99.2
|
%
|
|
94.3
|
%
|
|
94.0
|
%
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tangible equity(8)
|
|
$
|
559,810
|
|
|
$
|
489,873
|
|
|
$
|
474,534
|
|
|
$
|
472,459
|
|
|
$
|
459,679
|
|
Tangible equity per common share outstanding
|
|
$
|
18.40
|
|
|
$
|
16.34
|
|
|
$
|
15.98
|
|
|
$
|
16.15
|
|
|
$
|
15.88
|
|
Debt to total capitalization ratio(9)
|
|
25.2
|
%
|
|
23.9
|
%
|
|
22.6
|
%
|
|
21.7
|
%
|
|
22.0
|
%
|
|||||
Regulatory capital and surplus(10)
|
|
$
|
769,363
|
|
|
$
|
681,161
|
|
|
$
|
628,877
|
|
|
$
|
605,298
|
|
|
$
|
601,436
|
|
Net written premiums to shareholders' equity(3)
|
|
1.2x
|
|
|
1.1x
|
|
|
1.1x
|
|
|
0.8x
|
|
|
0.7x
|
|
|
(1)
|
The amount received or to be received for insurance policies written or assumed by us during a specific period of time without reduction for acquisition costs, reinsurance costs or other deductions.
|
(2)
|
The amount of written premiums ceded to (reinsured by) other insurers.
|
(3)
|
We believe this measure is useful in evaluating our operating leverage. It may not be comparable to the definition of net written premiums to shareholders' equity for other companies.
|
(4)
|
Adjusted net operating income is a non-GAAP measure. We define adjusted net operating income as net income excluding net realized and unrealized gains and losses on investments, expenses related to due diligence costs for various merger and acquisition activities, severance costs associated with terminated employees, impairment charges on goodwill and intangible assets, gains on extinguishment of debt, expenses on a leased building we were previously deemed to own for accounting purposes, and professional services and other expenses associated with securities offerings and the payment of special dividends. We use adjusted net operating income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted net operating income should not be viewed as a substitute for net income in accordance with GAAP. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Non-GAAP Measures” for a reconciliation of adjusted net operating income to net income in accordance with GAAP.
|
(5)
|
The loss ratio is the ratio, expressed as a percentage, of losses and loss adjustment expenses to net earned premiums, net of the effects of reinsurance.
|
(6)
|
The expense ratio is the ratio, expressed as a percentage, of other operating expenses to net earned premiums.
|
(7)
|
The combined ratio is the sum of the loss ratio and the expense ratio. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss.
|
(8)
|
Tangible equity is shareholders’ equity less goodwill and intangible assets. Tangible equity should not be viewed as a substitute for shareholders’ equity calculated in accordance with GAAP. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Reconciliation of Non-GAAP Measures” for a reconciliation of tangible equity to shareholders’ equity in accordance with GAAP.
|
(9)
|
The ratio, expressed as a percentage, of total indebtedness for borrowed money to the sum of total indebtedness for borrowed money and shareholders’ equity. It does not include an adjustment for rating agency equity credit features in our outstanding junior subordinated debt.
|
(10)
|
For our U.S. insurance subsidiaries, the excess of assets over liabilities as determined in accordance with statutory accounting principles as determined by the NAIC. For our Bermuda reinsurers, shareholders’ equity in accordance with U.S. generally accepted accounting principles (“GAAP”).
|
(11)
|
Excludes restricted cash equivalents.
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Sensitivity
|
|
5th Pct.
|
|
Carried
|
|
50th Pct.
|
|
95th Pct.
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Reserve for losses and loss adjustment expenses
|
|
$
|
1,279,765
|
|
|
$
|
1,377,461
|
|
|
$
|
1,386,934
|
|
|
$
|
1,581,394
|
|
Changes in reserves
|
|
(97,696
|
)
|
|
—
|
|
|
9,473
|
|
|
203,933
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
2019
|
|
2018
|
|
% Change
|
|||||
|
($ in thousands)
|
|
|
|||||||
Gross written premiums
|
$
|
1,470,735
|
|
|
$
|
1,166,773
|
|
|
26.1
|
%
|
Net retention(1)
|
60.9
|
%
|
|
65.4
|
%
|
|
|
|||
Net written premiums
|
$
|
896,150
|
|
|
$
|
762,672
|
|
|
17.5
|
%
|
Net earned premiums
|
$
|
823,746
|
|
|
$
|
815,398
|
|
|
1.0
|
%
|
Losses and loss adjustment expenses
|
(672,102
|
)
|
|
(600,276
|
)
|
|
12.0
|
%
|
||
Other operating expenses
|
(161,399
|
)
|
|
(187,116
|
)
|
|
(13.7
|
)%
|
||
Underwriting (loss) profit (2), (3)
|
(9,755
|
)
|
|
28,006
|
|
|
—
|
%
|
||
Net investment income
|
75,652
|
|
|
61,256
|
|
|
23.5
|
%
|
||
Net realized and unrealized investment losses
|
(2,919
|
)
|
|
(5,479
|
)
|
|
(46.7
|
)%
|
||
Other income and expense
|
82
|
|
|
(795
|
)
|
|
—
|
%
|
||
Interest expense
|
(10,596
|
)
|
|
(11,553
|
)
|
|
(8.3
|
)%
|
||
Amortization of intangible assets
|
(597
|
)
|
|
(597
|
)
|
|
—
|
%
|
||
Income before taxes
|
51,867
|
|
|
70,838
|
|
|
(26.8
|
)%
|
||
Income tax expense
|
13,528
|
|
|
7,008
|
|
|
93.0
|
%
|
||
Net income
|
$
|
38,339
|
|
|
$
|
63,830
|
|
|
(39.9
|
)%
|
Adjusted net operating income (4)
|
$
|
42,934
|
|
|
$
|
70,596
|
|
|
(39.2
|
)%
|
Ratios:
|
|
|
|
|
|
|||||
Loss ratio
|
81.6
|
%
|
|
73.6
|
%
|
|
|
|
||
Expense ratio
|
19.6
|
%
|
|
23.0
|
%
|
|
|
|
||
Combined ratio
|
101.2
|
%
|
|
96.6
|
%
|
|
|
|
|
(1)
|
Net retention is defined as the ratio of net written premiums to gross written premiums.
|
(2)
|
Underwriting (loss) profit is a non-GAAP measure. See “Reconciliation of Non-GAAP Measures” for a reconciliation to income before tax and for additional information.
|
(3)
|
Underwriting (loss) profit includes gross fee income of $24.9 million and $28.7 million for the years ended December 31, 2019 and 2018, respectively.
|
(4)
|
Adjusted net operating income is a non-GAAP measure. See “Reconciliation of Non-GAAP Measures” for reconciliation to net income and for additional information.
|
•
|
Net realized and unrealized investment losses of $2.9 million and $5.5 million for the years ended December 31, 2019 and 2018, respectively. See “- Investing Results" for more information on these realized and unrealized investment losses.
|
•
|
Interest expense of $1.6 million for the year ended December 31, 2018 relating to finance expenses in connection with a minority interest in a real estate partnership pursuant to which we were previously deemed an owner for accounting purposes. Effective with the Company's adoption of ASU 2016-02, Leases (Topic 842) on January 1, 2019, the Company is no longer deemed the owner for accounting purposes and there is no comparable expense for the year ended December 31, 2019.
|
|
Year Ended December 31,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Income
Before Taxes |
|
Net Income
|
|
Income
Before Taxes |
|
Net
Income |
||||||||
|
(in thousands)
|
||||||||||||||
Income as reported
|
$
|
51,867
|
|
|
$
|
38,339
|
|
|
$
|
70,838
|
|
|
$
|
63,830
|
|
Net realized and unrealized losses on investments
|
2,919
|
|
|
3,761
|
|
|
5,479
|
|
|
4,374
|
|
||||
Other expenses
|
1,055
|
|
|
834
|
|
|
1,100
|
|
|
941
|
|
||||
Impairment of intangible assets
|
—
|
|
|
—
|
|
|
200
|
|
|
200
|
|
||||
Interest expense on leased building the Company was previously deemed to own for accounting purposes
|
—
|
|
|
—
|
|
|
1,584
|
|
|
1,251
|
|
||||
Adjusted net operating income
|
$
|
55,841
|
|
|
$
|
42,934
|
|
|
$
|
79,201
|
|
|
$
|
70,596
|
|
|
Year Ended December 31,
|
|
|
|||||||
|
2019
|
|
2018
|
|
% Change
|
|||||
|
($ in thousands)
|
|
|
|||||||
Gross written premiums:
|
|
|
|
|
|
|||||
Excess and Surplus Lines
|
$
|
922,320
|
|
|
$
|
656,538
|
|
|
40.5
|
%
|
Specialty Admitted Insurance
|
387,642
|
|
|
374,346
|
|
|
3.6
|
%
|
||
Casualty Reinsurance
|
160,773
|
|
|
135,889
|
|
|
18.3
|
%
|
||
|
$
|
1,470,735
|
|
|
$
|
1,166,773
|
|
|
26.1
|
%
|
Net written premiums:
|
|
|
|
|
|
|||||
Excess and Surplus Lines
|
$
|
685,814
|
|
|
$
|
571,098
|
|
|
20.1
|
%
|
Specialty Admitted Insurance
|
58,637
|
|
|
55,840
|
|
|
5.0
|
%
|
||
Casualty Reinsurance
|
151,699
|
|
|
135,734
|
|
|
11.8
|
%
|
||
|
$
|
896,150
|
|
|
$
|
762,672
|
|
|
17.5
|
%
|
Net earned premiums:
|
|
|
|
|
|
|||||
Excess and Surplus Lines
|
$
|
625,528
|
|
|
$
|
555,684
|
|
|
12.6
|
%
|
Specialty Admitted Insurance
|
54,338
|
|
|
55,146
|
|
|
(1.5
|
)%
|
||
Casualty Reinsurance
|
143,880
|
|
|
204,568
|
|
|
(29.7
|
)%
|
||
|
$
|
823,746
|
|
|
$
|
815,398
|
|
|
1.0
|
%
|
|
Year Ended December 31,
|
|
|
|||||||
|
2019
|
|
2018
|
|
% Change
|
|||||
|
|
|||||||||
Commercial Auto
|
$
|
405,565
|
|
|
$
|
322,126
|
|
|
25.9
|
%
|
Excess Casualty
|
118,954
|
|
|
66,452
|
|
|
79.0
|
%
|
||
General Casualty
|
115,832
|
|
|
54,127
|
|
|
114.0
|
%
|
||
Manufacturers & Contractors
|
105,096
|
|
|
79,160
|
|
|
32.8
|
%
|
||
Energy
|
45,442
|
|
|
33,942
|
|
|
33.9
|
%
|
||
Excess Property
|
31,606
|
|
|
16,963
|
|
|
86.3
|
%
|
||
Allied Health
|
26,713
|
|
|
30,450
|
|
|
(12.3
|
)%
|
||
Life Sciences
|
24,462
|
|
|
16,636
|
|
|
47.0
|
%
|
||
Small Business
|
19,725
|
|
|
14,808
|
|
|
33.2
|
%
|
||
Environmental
|
16,539
|
|
|
10,499
|
|
|
57.5
|
%
|
||
All other divisions
|
12,386
|
|
|
11,375
|
|
|
8.9
|
%
|
||
Excess and Surplus Lines gross written premium
|
$
|
922,320
|
|
|
$
|
656,538
|
|
|
40.5
|
%
|
|
Year Ended December 31,
|
|
|
|||||||
|
2019
|
|
2018
|
|
% Change
|
|||||
|
($ in thousands)
|
|
|
|||||||
Individual risk workers’ compensation premium
|
$
|
63,607
|
|
|
$
|
55,248
|
|
|
15.1
|
%
|
Fronting and program premium
|
324,035
|
|
|
319,098
|
|
|
1.5
|
%
|
||
Specialty Admitted gross written premium
|
$
|
387,642
|
|
|
$
|
374,346
|
|
|
3.6
|
%
|
|
Year Ended December 31,
|
||||
|
2019
|
|
2018
|
||
Excess and Surplus Lines
|
74.4
|
%
|
|
87.0
|
%
|
Specialty Admitted Insurance
|
15.1
|
%
|
|
14.9
|
%
|
Casualty Reinsurance
|
94.4
|
%
|
|
99.9
|
%
|
Total
|
60.9
|
%
|
|
65.4
|
%
|
|
Year Ended December 31,
|
||||
|
2019
|
|
2018
|
||
Excess and Surplus Lines
|
96.9
|
%
|
|
92.3
|
%
|
Specialty Admitted Insurance
|
89.1
|
%
|
|
87.4
|
%
|
Casualty Reinsurance
|
105.0
|
%
|
|
97.5
|
%
|
Total
|
101.2
|
%
|
|
96.6
|
%
|
|
Year Ended December 31,
|
|
|
|||||||
|
2019
|
|
2018
|
|
% Change
|
|||||
|
($ in thousands)
|
|
|
|||||||
Gross written premiums
|
$
|
922,320
|
|
|
$
|
656,538
|
|
|
40.5
|
%
|
Net written premiums
|
$
|
685,814
|
|
|
$
|
571,098
|
|
|
20.1
|
%
|
Net earned premiums
|
$
|
625,528
|
|
|
$
|
555,684
|
|
|
12.6
|
%
|
Losses and loss adjustment expenses
|
(528,133
|
)
|
|
(437,904
|
)
|
|
20.6
|
%
|
||
Underwriting expenses
|
(78,238
|
)
|
|
(74,946
|
)
|
|
4.4
|
%
|
||
Underwriting profit(1), (2)
|
$
|
19,157
|
|
|
$
|
42,834
|
|
|
(55.3
|
)%
|
Ratios:
|
|
|
|
|
|
|||||
Loss ratio
|
84.4
|
%
|
|
78.8
|
%
|
|
|
|
||
Expense ratio
|
12.5
|
%
|
|
13.5
|
%
|
|
|
|
||
Combined ratio
|
96.9
|
%
|
|
92.3
|
%
|
|
|
|
|
(1)
|
Underwriting Profit is a non-GAAP Measure. See “Reconciliation of Non-GAAP Measures” for a reconciliation to income before tax and for additional information.
|
(2)
|
Underwriting results include gross fee income of $9.1 million and $13.9 million for the years ended December 31, 2019 and 2018, respectively.
|
|
Year Ended December 31,
|
|
|
|||||||
|
2019
|
|
2018
|
|
% Change
|
|||||
|
($ in thousands)
|
|
|
|||||||
Gross written premiums
|
$
|
387,642
|
|
|
$
|
374,346
|
|
|
3.6
|
%
|
Net written premiums
|
$
|
58,637
|
|
|
$
|
55,840
|
|
|
5.0
|
%
|
Net earned premiums
|
$
|
54,338
|
|
|
$
|
55,146
|
|
|
(1.5
|
)%
|
Losses and loss adjustment expenses
|
(34,860
|
)
|
|
(32,623
|
)
|
|
6.9
|
%
|
||
Underwriting expenses
|
(13,565
|
)
|
|
(15,551
|
)
|
|
(12.8
|
)%
|
||
Underwriting profit(1), (2)
|
$
|
5,913
|
|
|
$
|
6,972
|
|
|
(15.2
|
)%
|
Ratios:
|
|
|
|
|
|
|||||
Loss ratio
|
64.2
|
%
|
|
59.2
|
%
|
|
|
|
||
Expense ratio
|
24.9
|
%
|
|
28.2
|
%
|
|
|
|
||
Combined ratio
|
89.1
|
%
|
|
87.4
|
%
|
|
|
|
|
(1)
|
Underwriting Profit is a non-GAAP Measure. See “Reconciliation of Non-GAAP Measures” for a reconciliation to income before tax and for additional information.
|
(2)
|
Underwriting profit includes fee income of $15.8 million and $14.8 million for the years ended December 31, 2019 and 2018, respectively.
|
|
Year Ended December 31,
|
|
|
|||||||
|
2019
|
|
2018
|
|
% Change
|
|||||
|
($ in thousands)
|
|
|
|||||||
Gross written premiums
|
$
|
160,773
|
|
|
$
|
135,889
|
|
|
18.3
|
%
|
Net written premiums
|
$
|
151,699
|
|
|
$
|
135,734
|
|
|
11.8
|
%
|
Net earned premiums
|
$
|
143,880
|
|
|
$
|
204,568
|
|
|
(29.7
|
)%
|
Losses and loss adjustment expenses
|
(109,109
|
)
|
|
(129,749
|
)
|
|
(15.9
|
)%
|
||
Underwriting expenses
|
(41,932
|
)
|
|
(69,716
|
)
|
|
(39.9
|
)%
|
||
Underwriting (loss) profit(1)
|
$
|
(7,161
|
)
|
|
$
|
5,103
|
|
|
—
|
|
Ratios:
|
|
|
|
|
|
|||||
Loss ratio
|
75.8
|
%
|
|
63.4
|
%
|
|
|
|
||
Expense ratio
|
29.2
|
%
|
|
34.1
|
%
|
|
|
|
||
Combined ratio
|
105.0
|
%
|
|
97.5
|
%
|
|
|
|
|
(1)
|
Underwriting (Loss) Profit is a non-GAAP Measure. See “Reconciliation of Non-GAAP Measures” for a reconciliation to income before tax and for additional information.
|
|
Year Ended December 31,
|
|
|
|||||||
|
2019
|
|
2018
|
|
% Change
|
|||||
|
(in thousands)
|
|
|
|||||||
Renewable energy LLCs
|
$
|
2,181
|
|
|
$
|
2,974
|
|
|
(26.7
|
)%
|
Other private investments
|
4,073
|
|
|
2,191
|
|
|
85.9
|
%
|
||
Other invested assets
|
6,254
|
|
|
5,165
|
|
|
21.1
|
%
|
||
All other net investment income
|
69,398
|
|
|
56,091
|
|
|
23.7
|
%
|
||
Total net investment income
|
$
|
75,652
|
|
|
$
|
61,256
|
|
|
23.5
|
%
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Fixed maturity securities
|
$
|
39,875
|
|
|
$
|
34,129
|
|
Bank loan participations
|
19,772
|
|
|
18,279
|
|
||
Equity securities
|
5,262
|
|
|
5,240
|
|
||
Other invested assets
|
6,254
|
|
|
5,165
|
|
||
Cash, cash equivalents, restricted cash equivalents, and short-term investments
|
9,210
|
|
|
2,677
|
|
||
Gross investment income
|
80,373
|
|
|
65,490
|
|
||
Investment expense
|
(4,721
|
)
|
|
(4,234
|
)
|
||
Net investment income
|
$
|
75,652
|
|
|
$
|
61,256
|
|
|
Year Ended December 31,
|
||||
|
2019
|
|
2018
|
||
Annualized gross investment yield on:
|
|
|
|
||
Average cash and invested assets
|
3.8
|
%
|
|
3.8
|
%
|
Average fixed maturity securities
|
3.6
|
%
|
|
3.7
|
%
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||
|
Cost or
Amortized
Cost
|
|
Fair Value
|
|
% of Total
Fair Value
|
|
Cost or
Amortized
Cost
|
|
Fair Value
|
|
% of Total
Fair Value
|
||||||||||
|
($ in thousands)
|
||||||||||||||||||||
Fixed maturity securities, available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
State and municipal
|
$
|
159,894
|
|
|
$
|
167,101
|
|
|
11.7
|
%
|
|
$
|
147,160
|
|
|
$
|
149,295
|
|
|
12.6
|
%
|
Residential mortgage-backed
|
261,524
|
|
|
264,146
|
|
|
18.4
|
%
|
|
208,869
|
|
|
204,109
|
|
|
17.2
|
%
|
||||
Corporate
|
611,304
|
|
|
632,221
|
|
|
44.1
|
%
|
|
534,024
|
|
|
524,768
|
|
|
44.3
|
%
|
||||
Commercial mortgage and asset-backed
|
249,309
|
|
|
252,457
|
|
|
17.6
|
%
|
|
199,528
|
|
|
197,025
|
|
|
16.6
|
%
|
||||
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
114,477
|
|
|
115,667
|
|
|
8.1
|
%
|
|
107,803
|
|
|
107,193
|
|
|
9.1
|
%
|
||||
Redeemable preferred stock
|
2,025
|
|
|
2,034
|
|
|
0.1
|
%
|
|
2,025
|
|
|
1,812
|
|
|
0.2
|
%
|
||||
Total fixed maturity securities, available-for-sale
|
$
|
1,398,533
|
|
|
$
|
1,433,626
|
|
|
100.0
|
%
|
|
$
|
1,199,409
|
|
|
$
|
1,184,202
|
|
|
100.0
|
%
|
Standard & Poor’s or Equivalent Designation
|
|
Fair Value
|
|
% of Total
|
|||
|
|
($ in thousands)
|
|||||
AAA
|
|
$
|
245,999
|
|
|
17.2
|
%
|
AA
|
|
548,402
|
|
|
38.3
|
%
|
|
A
|
|
503,034
|
|
|
35.1
|
%
|
|
BBB
|
|
130,888
|
|
|
9.1
|
%
|
|
Below BBB and unrated
|
|
5,303
|
|
|
0.3
|
%
|
|
Total
|
|
$
|
1,433,626
|
|
|
100.0
|
%
|
Industry
|
|
Fair Value
|
|
% of Total
|
|||
|
|
($ in thousands)
|
|||||
Industrials and other
|
|
$
|
148,838
|
|
|
23.5
|
%
|
Consumer Discretionary
|
|
90,631
|
|
|
14.3
|
%
|
|
Financial
|
|
168,331
|
|
|
26.6
|
%
|
|
Health Care
|
|
79,691
|
|
|
12.7
|
%
|
|
Consumer Staples
|
|
66,555
|
|
|
10.5
|
%
|
|
Utilities
|
|
78,175
|
|
|
12.4
|
%
|
|
Total
|
|
$
|
632,221
|
|
|
100.0
|
%
|
Public/Private
|
|
Fair Value
|
|
% of Total
|
|||
|
|
($ in thousands)
|
|||||
Publicly traded
|
|
$
|
579,807
|
|
|
91.7
|
%
|
Privately placed
|
|
52,414
|
|
|
8.3
|
%
|
|
Total
|
|
$
|
632,221
|
|
|
100.0
|
%
|
|
December 31, 2019
|
|||||||||
|
Amortized
Cost
|
|
Fair Value
|
|
% of Total
Fair Value
|
|||||
|
($ in thousands)
|
|||||||||
Due in:
|
|
|
|
|
|
|||||
One year or less
|
$
|
81,705
|
|
|
$
|
82,048
|
|
|
5.7
|
%
|
After one year through five years
|
456,076
|
|
|
466,952
|
|
|
32.7
|
%
|
||
After five years through ten years
|
219,717
|
|
|
228,596
|
|
|
15.9
|
%
|
||
After ten years
|
128,177
|
|
|
137,393
|
|
|
9.6
|
%
|
||
|
885,675
|
|
|
914,989
|
|
|
63.9
|
%
|
||
Residential mortgage-backed
|
261,524
|
|
|
264,146
|
|
|
18.4
|
%
|
||
Commercial mortgage and asset-backed
|
249,309
|
|
|
252,457
|
|
|
17.6
|
%
|
||
Redeemable preferred stock
|
2,025
|
|
|
2,034
|
|
|
0.1
|
%
|
||
Total
|
$
|
1,398,533
|
|
|
$
|
1,433,626
|
|
|
100.0
|
%
|
•
|
A $102.5 million secured revolving facility utilized by JRG Re to issue letters of credit for the benefit of third-party reinsureds. This portion of our credit facility is secured by our investment securities. At December 31, 2019, the Company had $77.6 million of letters of credit issued under the secured facility.
|
•
|
A $212.5 million unsecured revolving facility to meet the working capital needs of the Company. All unpaid principal on the revolver is due at maturity. Interest accrues quarterly and is payable in arrears at 3-month LIBOR plus a margin which at December 31, 2019 was 1.375% and is subject to change according to terms in the credit agreement. At
|
|
James River
Capital
Trust I
|
|
James River
Capital
Trust II
|
|
James River
Capital
Trust III
|
|
James River
Capital
Trust IV
|
|
Franklin
Holdings II
(Bermuda)
Capital
Trust I
|
|
($ in thousands)
|
||||||||
Issue date
|
May 26, 2004
|
|
December 15, 2004
|
|
June 15, 2006
|
|
December 11, 2007
|
|
January 10, 2008
|
Principal amount of trust preferred securities
|
$7,000
|
|
$15,000
|
|
$20,000
|
|
$54,000
|
|
$30,000
|
Principal amount of junior subordinated debt
|
$7,217
|
|
$15,464
|
|
$20,619
|
|
$55,670
|
|
$30,928
|
Carrying amount of junior subordinated debt net of repurchases
|
$7,217
|
|
$15,464
|
|
$20,619
|
|
$44,827
|
|
$15,928
|
Maturity date of junior subordinated debt, unless accelerated earlier
|
May 24, 2034
|
|
December 15, 2034
|
|
June 15, 2036
|
|
December 15, 2037
|
|
March 15, 2038
|
Trust common stock
|
$217
|
|
$464
|
|
$619
|
|
$1,670
|
|
$928
|
Interest rate, per annum
|
Three-Month
LIBOR plus 4.0% |
|
Three-Month
LIBOR plus 3.4% |
|
Three-Month
LIBOR plus
3.0%
|
|
Three-Month
LIBOR plus
3.1%
|
|
Three-Month
LIBOR plus
4.0%
|
Line of Business
|
|
Company Retention
|
Casualty
|
|
|
Primary Specialty Casualty, including Professional Liability
|
|
Up to $1.0 million per occurrence, subject to a $1.0 million aggregate deductible.(1)
|
Primary Casualty
|
|
Up to $2.0 million per occurrence.(2)
|
Excess Casualty
|
|
Up to $1.0 million per occurrence.(3)
|
Property
|
|
Up to $5.0 million per event.(4)
|
(1)
|
Except for Life Sciences quota share carve out, which is up to $2.0 million per occurrence.
|
(2)
|
Total exposure to any one claim is generally $1.0 million.
|
(3)
|
For policies with an occurrence limit up to $10.0 million, the excess casualty treaty is set such that our retention is no more than $1.0 million.
|
(4)
|
The property catastrophe reinsurance treaty has a limit of $40.0 million with one reinstatement.
|
Line of Business
|
|
Coverage
|
Casualty
|
|
|
Workers’ Compensation
|
|
Quota share coverage for 50% of the first $600,000.(1)(2)
Excess of loss coverage for $29.4 million in excess of $600,000.(1)(2)
|
Auto Programs
|
|
Quota share coverage for 85-90% of limits up to $1.5 million liability and $5.0 million physical damage per occurrence.
|
General Liability & Professional Liability – Programs
|
|
Quota share coverage for 87.5% - 100% of limits up to $2.0 million per occurrence.
|
Umbrella and Excess Casualty - Programs
|
|
Quota share coverage for 92.5%-100% of limits up to $10.0 million per occurrence, and excess of loss coverage for $5.0 million in excess of $10.0 million.
|
Property
|
|
|
Commercial Property within Package - Programs
|
|
Quota share coverage for 100% of limits up to $25.0 million per occurrence. (3)
|
Catastrophe Coverage
|
|
Excess of Loss coverage for $44.0 million in excess of $1.0 million per occurrence.
|
(1)
|
Excluding one program which has quota share coverage for 89% of the first $1.0 million per occurrence and excess of loss coverage for $49.0 million in excess of $1.0 million per occurrence.
|
(2)
|
Includes any residual market pools.
|
(3)
|
Excluding one program which has quota share coverage for 80% of the first $500,000 and excess of loss coverage for $39.5 million in excess of $500,000 per risk per occurrence.
|
Reinsurer
|
|
Reinsurance
Recoverable as of
December 31, 2019
|
|
A.M. Best Rating
December 31, 2019
|
||
|
|
(in thousands)
|
|
|
||
Swiss Reinsurance America Corporation
|
|
$
|
191,402
|
|
|
A+
|
Berkley Insurance Company
|
|
59,562
|
|
|
A+
|
|
Aioi Nissay Dowa Insurance Company
|
|
57,982
|
|
|
A+
|
|
Safety National Casualty
|
|
50,290
|
|
|
A+
|
|
Munich Reinsurance America
|
|
28,437
|
|
|
A+
|
|
Endurance Assurance Corporation
|
|
25,849
|
|
|
A+
|
|
North Carolina Reinsurance Facility
|
|
24,148
|
|
|
Unrated(2)
|
|
Hannover Ruckversicherungs AG
|
|
22,145
|
|
|
A+
|
|
American European Insurance Company
|
|
20,847
|
|
|
B(1)
|
|
Cincinnati Insurance Company
|
|
19,530
|
|
|
A+
|
|
Top 10 Total
|
|
500,192
|
|
|
|
|
Other
|
|
167,853
|
|
|
|
|
Total
|
|
$
|
668,045
|
|
|
|
(1)
|
This reinsurer is below A-. All material reinsurance recoverable amounts from this reinsurer are collateralized.
|
(2)
|
The North Carolina Reinsurance Facility is a residual market mechanism for automobile insurance in North Carolina.
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Cash and cash equivalents and restricted cash equivalents provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
1,489,022
|
|
|
$
|
290,028
|
|
|
$
|
207,816
|
|
Investing activities
|
(263,359
|
)
|
|
(266,772
|
)
|
|
(104,741
|
)
|
|||
Financing activities
|
7,956
|
|
|
(14,294
|
)
|
|
(49,364
|
)
|
|||
Change in cash and cash equivalents and restricted cash equivalents
|
$
|
1,233,619
|
|
|
$
|
8,962
|
|
|
$
|
53,711
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|||||||||
Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Beginning of year
|
1,115,324
|
|
|
$
|
29.02
|
|
|
1,479,236
|
|
|
$
|
27.81
|
|
|
2,234,699
|
|
|
$
|
22.84
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
205,244
|
|
|
$
|
42.24
|
|
Exercised
|
(459,415
|
)
|
|
$
|
26.87
|
|
|
(308,025
|
)
|
|
$
|
22.01
|
|
|
(898,218
|
)
|
|
$
|
18.53
|
|
Forfeited
|
(12,058
|
)
|
|
$
|
36.84
|
|
|
(55,887
|
)
|
|
$
|
35.69
|
|
|
(62,489
|
)
|
|
$
|
30.80
|
|
End of year
|
643,851
|
|
|
$
|
30.41
|
|
|
1,115,324
|
|
|
$
|
29.02
|
|
|
1,479,236
|
|
|
$
|
27.81
|
|
Exercisable, end of year
|
590,340
|
|
|
$
|
29.34
|
|
|
814,421
|
|
|
$
|
26.46
|
|
|
846,371
|
|
|
$
|
22.35
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
|||||||||
Unvested, beginning of year
|
300,142
|
|
|
$
|
39.22
|
|
|
178,882
|
|
|
$
|
37.93
|
|
|
196,800
|
|
|
$
|
24.38
|
|
Granted
|
197,078
|
|
|
$
|
42.56
|
|
|
227,481
|
|
|
$
|
39.74
|
|
|
137,034
|
|
|
$
|
42.20
|
|
Vested
|
(134,407
|
)
|
|
$
|
37.99
|
|
|
(83,384
|
)
|
|
$
|
37.61
|
|
|
(132,764
|
)
|
|
$
|
24.24
|
|
Forfeited
|
(22,445
|
)
|
|
$
|
41.32
|
|
|
(22,837
|
)
|
|
$
|
40.21
|
|
|
(22,188
|
)
|
|
$
|
26.06
|
|
Unvested, end of year
|
340,368
|
|
|
$
|
41.50
|
|
|
300,142
|
|
|
$
|
39.22
|
|
|
178,882
|
|
|
$
|
37.93
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than 1 year
|
|
1–3 years
|
|
3–5 years
|
|
More than
5 years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Reserve for losses and loss adjustment expenses
|
$
|
2,045,506
|
|
|
$
|
674,220
|
|
|
$
|
868,969
|
|
|
$
|
426,142
|
|
|
$
|
76,175
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior debt
|
158,300
|
|
|
—
|
|
|
—
|
|
|
133,300
|
|
|
25,000
|
|
|||||
Junior subordinated debt
|
104,055
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104,055
|
|
|||||
Operating lease obligations
|
20,404
|
|
|
4,024
|
|
|
7,793
|
|
|
6,041
|
|
|
2,546
|
|
|||||
Interest on debt obligations
|
130,871
|
|
|
11,380
|
|
|
22,698
|
|
|
22,010
|
|
|
74,783
|
|
|||||
Total
|
$
|
2,459,136
|
|
|
$
|
689,624
|
|
|
$
|
899,460
|
|
|
$
|
587,493
|
|
|
$
|
282,559
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Underwriting profit (loss) of the operating segments:
|
|
|
|
|
|
||||||
Excess and Surplus Lines
|
$
|
19,157
|
|
|
$
|
42,834
|
|
|
$
|
29,693
|
|
Specialty Admitted Insurance
|
5,913
|
|
|
6,972
|
|
|
3,166
|
|
|||
Casualty Reinsurance
|
(7,161
|
)
|
|
5,103
|
|
|
(1,765
|
)
|
|||
Total underwriting profit of the operating segments
|
17,909
|
|
|
54,909
|
|
|
31,094
|
|
|||
Other operating expenses of the Corporate and Other segment
|
(27,664
|
)
|
|
(26,903
|
)
|
|
(25,330
|
)
|
|||
Underwriting (loss) profit(1)
|
(9,755
|
)
|
|
28,006
|
|
|
5,764
|
|
|||
Net investment income
|
75,652
|
|
|
61,256
|
|
|
61,119
|
|
|||
Net realized investment losses
|
(2,919
|
)
|
|
(5,479
|
)
|
|
(1,989
|
)
|
|||
Other income
|
1,137
|
|
|
505
|
|
|
361
|
|
|||
Other expenses
|
(1,055
|
)
|
|
(1,300
|
)
|
|
(539
|
)
|
|||
Interest expense
|
(10,596
|
)
|
|
(11,553
|
)
|
|
(8,974
|
)
|
|||
Amortization of intangible assets
|
(597
|
)
|
|
(597
|
)
|
|
(597
|
)
|
|||
Income before taxes
|
$
|
51,867
|
|
|
$
|
70,838
|
|
|
$
|
55,145
|
|
(1)
|
Underwriting (loss) profit includes gross fee income of $24.9 million, $28.7 million, and $28.3 million for the years ended December 31, 2019, 2018, and 2017, respectively.
|
|
Year Ended December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
Income
Before Taxes |
|
Net Income
|
|
Income
Before Taxes |
|
Net
Income |
|
Income
Before
Taxes
|
|
Net
Income
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Income as reported
|
$
|
51,867
|
|
|
$
|
38,339
|
|
|
$
|
70,838
|
|
|
$
|
63,830
|
|
|
$
|
55,145
|
|
|
$
|
43,566
|
|
Net realized and unrealized losses on investments
|
2,919
|
|
|
3,761
|
|
|
5,479
|
|
|
4,374
|
|
|
1,989
|
|
|
1,375
|
|
||||||
Other expenses
|
1,055
|
|
|
834
|
|
|
1,100
|
|
|
941
|
|
|
539
|
|
|
575
|
|
||||||
Impairment of intangible assets
|
—
|
|
|
—
|
|
|
200
|
|
|
200
|
|
|
—
|
|
|
—
|
|
||||||
Dividend withholding taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,053
|
|
||||||
Interest expense on leased building the Company was previously deemed to own for accounting purposes
|
—
|
|
|
—
|
|
|
1,584
|
|
|
1,251
|
|
|
1,256
|
|
|
816
|
|
||||||
Adjusted net operating income
|
$
|
55,841
|
|
|
$
|
42,934
|
|
|
$
|
79,201
|
|
|
$
|
70,596
|
|
|
$
|
58,929
|
|
|
$
|
47,385
|
|
|
As of December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||||
|
Equity
|
|
Equity
per share
|
|
Equity
|
|
Equity
per share
|
|
Equity
|
|
Equity
per share
|
||||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||||||||||
Shareholders’ equity
|
$
|
778,581
|
|
|
$
|
25.59
|
|
|
$
|
709,241
|
|
|
$
|
23.65
|
|
|
$
|
694,699
|
|
|
$
|
23.39
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Goodwill
|
181,831
|
|
|
5.98
|
|
|
181,831
|
|
|
6.06
|
|
|
181,831
|
|
|
6.12
|
|
||||||
Intangible assets
|
36,940
|
|
|
1.21
|
|
|
37,537
|
|
|
1.25
|
|
|
38,334
|
|
|
1.29
|
|
||||||
Tangible equity
|
$
|
559,810
|
|
|
$
|
18.40
|
|
|
$
|
489,873
|
|
|
$
|
16.34
|
|
|
$
|
474,534
|
|
|
$
|
15.98
|
|
Dividends to shareholders for the year ended December 31, 2019
|
36,786
|
|
|
1.20
|
|
|
|
|
|
|
|
|
|
||||||||||
Pre-dividend tangible equity
|
$
|
596,596
|
|
|
$
|
19.60
|
|
|
|
|
|
|
|
|
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
As of December 31, 2019
|
|||||||||||
|
Estimated
Fair Value
|
|
Hypothetical
Change in
Interest Rates
(bp=basis points)
|
|
Estimated
Fair Value after
Hypothetical Change
in Interest Rates
|
|
Estimated
Hypothetical Percentage
Increase (Decrease) in
Fair Value
|
|||||
|
($ in thousands)
|
|||||||||||
Total fixed maturity and preferred stock investments
|
$
|
1,496,373
|
|
|
200 bp decrease
|
|
$
|
1,617,579
|
|
|
8.1
|
%
|
|
|
|
|
100 bp decrease
|
|
1,560,268
|
|
|
4.3
|
%
|
||
|
|
|
|
100 bp increase
|
|
1,432,478
|
|
|
(4.3
|
)%
|
||
|
|
|
|
200 bp increase
|
|
1,371,127
|
|
|
(8.4
|
)%
|
||
Bank Loan Participations
|
$
|
252,423
|
|
|
200 bp decrease
|
|
$
|
258,002
|
|
|
2.2
|
%
|
|
|
|
|
100 bp decrease
|
|
254,215
|
|
|
0.7
|
%
|
||
|
|
|
|
100 bp increase
|
|
251,943
|
|
|
(0.2
|
)%
|
||
|
|
|
|
200 bp increase
|
|
251,716
|
|
|
(0.3
|
)%
|
||
Liabilities
|
$
|
280,236
|
|
|
200 bp decrease
|
|
$
|
237,905
|
|
|
(15.1
|
)%
|
|
|
|
|
100 bp decrease
|
|
259,070
|
|
|
(7.6
|
)%
|
||
|
|
|
|
100 bp increase
|
|
301,401
|
|
|
7.6
|
%
|
||
|
|
|
|
200 bp increase
|
|
322,566
|
|
|
15.1
|
%
|
|
As of December 31, 2019
|
||||||||
|
Estimated
Fair Value
|
|
Hypothetical
Price Change
|
|
Estimated
Fair Value after
Hypothetical
Change in Prices
|
||||
|
($ in thousands)
|
||||||||
Equity securities
|
$
|
80,735
|
|
|
35% increase
|
|
$
|
108,992
|
|
|
|
|
|
35% decrease
|
|
52,478
|
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
Item 9B.
|
OTHER INFORMATION
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
Item 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Exhibit
Number
|
|
Description
|
3.1
|
|
|
3.2
|
|
|
3.3
|
|
|
3.4
|
|
|
3.5
|
|
|
3.6
|
|
|
4.1
|
|
|
4.2
|
|
Indenture, dated as of May 26, 2004, by and between James River Group, Inc. and Wilmington Trust Company, as Trustee, relating to Floating Rate Senior Debentures Due 2034+
|
4.3
|
|
Indenture, dated as of May 26, 2004, by and between James River Group, Inc. and Wilmington Trust Company, as Trustee, relating to Floating Rate Junior Subordinated Debentures Due 2034+
|
4.4
|
|
Amended and Restated Declaration of Trust of James River Capital Trust I, dated as of May 26, 2004, by and among James River Group, Inc., as Sponsor, Wilmington Trust Company, as Institutional Trustee and Delaware Trustee, the Regular Trustees (as defined therein), and the holders, from time to time, of undivided beneficial interests in James River Capital Trust I+
|
4.5
|
|
Preferred Securities Guarantee Agreement, dated as of May 26, 2004, by James River Group, Inc., as Guarantor, and Wilmington Trust Company, as Preferred Guarantee Trustee, for the benefit of the holders of James River Capital Trust I+
|
4.6
|
|
Indenture, dated as of December 15, 2004, by and between James River Group, Inc. and Wilmington Trust Company, as Trustee, relating to Floating Rate Junior Subordinated Deferrable Interest Debentures Due 2034+
|
4.7
|
|
Amended and Restated Declaration of Trust of James River Capital Trust II, dated as of December 15, 2004, by and among James River Group, Inc., as Sponsor, Wilmington Trust Company, as Institutional Trustee and Delaware Trustee, the Administrators (as defined therein), and the holders, from time to time, of undivided beneficial interests in the James River Capital Trust II+
|
4.8
|
|
Guarantee Agreement, dated as of December 15, 2004, by James River Group, Inc., as Guarantor, and Wilmington Trust Company, as Guarantee Trustee, for the benefit of the holders, from time to time, of the capital securities of James River Capital Trust II+
|
4.9
|
|
Indenture, dated June 15, 2006, by and between James River Group, Inc. and Wilmington Trust Company, as Trustee, relating to Floating Rate Junior Subordinated Deferrable Interest Debentures Due 2036+
|
4.10
|
|
Amended and Restated Declaration of Trust of James River Capital Trust III, dated as of June 15, 2006, by and among James River Group, Inc., as Sponsor, Wilmington Trust Company, as Institutional Trustee and Delaware Trustee, the Administrators (as defined therein) and the holders, from time to time, of undivided beneficial interests in the James River Capital Trust III+
|
4.11
|
|
Guarantee Agreement, dated as of June 15, 2006, by James River Group, Inc., as Guarantor, and Wilmington Trust Company, as Guarantee Trustee, for the benefit of the holders, from time to time, of the capital securities of James River Capital Trust III+
|
4.12
|
|
Indenture, dated December 11, 2007, by and between James River Group, Inc. and Wilmington Trust Company, as Trustee, relating to Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures Due 2037+
|
Exhibit
Number
|
|
Description
|
4.13
|
|
Amended and Restated Declaration of Trust, dated December 11, 2007, by and among James River Group, Inc., as Sponsor, Wilmington Trust Company, as Institutional Trustee and Delaware Trustee and the Administrators (as defined therein) and the holders, from time to time, of undivided beneficial interests in James River Capital Trust IV+
|
4.14
|
|
Guarantee Agreement, dated as of December 11, 2007, by James River Group, Inc., as Guarantor, and Wilmington Trust Company, as Guarantee Trustee, for the benefit of the holders, from time to time, of the capital securities of James River Capital Trust IV+
|
4.15
|
|
Indenture, dated as of January 10, 2008, among James River Group Holdings, Ltd. and Wilmington Trust Company, as Trustee relating to Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures Due 2038+
|
4.16
|
|
Amended and Restated Declaration of Trust, dated as of January 10, 2008, by and among James River Group Holdings, Ltd., as Sponsor, Wilmington Trust Company, as Institutional Trustee and Delaware Trustee and the Administrators (as defined therein) for the benefit of the holders, from time to time, of undivided beneficial interest in Franklin Holdings II (Bermuda) Capital Trust I+
|
4.17
|
|
Guarantee Agreement, dated as of January 10, 2008, by and among James River Group Holdings, Ltd., as Guarantor, and Wilmington Trust Company, as Guarantee Trustee, for the benefit of the holders, from time to time, of the capital securities of Franklin Holdings II (Bermuda) Capital Trust I+
|
4.18
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
Exhibit
Number
|
|
Description
|
10.11
|
|
|
10.12
|
|
|
10.13
|
|
|
10.14
|
|
|
10.15
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
|
10.21
|
|
|
10.22
|
|
|
10.23
|
|
|
10.24
|
|
|
10.25
|
|
|
10.26
|
|
|
10.27
|
|
|
10.28
|
|
Exhibit
Number
|
|
Description
|
21.1
|
|
|
23.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
101.INS
|
|
Inline XBRL Instance Document
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
104
|
|
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document in Exhibit 101.
|
*
|
Denotes a management contract or compensatory plan or arrangement.
|
+
|
Exhibit not filed with the Securities and Exchange Commission pursuant to Item 601(b)(4)(iii) of Regulation S-K. The Company will furnish a copy to the SEC upon request.
|
Item 16.
|
FORM 10-K SUMMARY
|
JAMES RIVER GROUP HOLDINGS, LTD.
|
||||
By:
|
|
/s/ J. Adam Abram
|
|
February 27, 2020
|
|
|
J. Adam Abram
Chief Executive Officer and Chairman
|
|
|
NAME
|
|
TITLE
|
|
DATE
|
/s/ J. Adam Abram
|
|
Chief Executive Officer and Chairman
|
|
February 27, 2020
|
J. Adam Abram
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Sarah C. Doran
|
|
Chief Financial Officer
|
|
February 27, 2020
|
Sarah C. Doran
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Michael E. Crow
|
|
Principal Accounting Officer
|
|
February 27, 2020
|
Michael E. Crow
|
|
|
|
|
|
|
|
|
|
/s/ Janet Cowell
|
|
Director
|
|
February 27, 2020
|
Janet Cowell
|
|
|
|
|
|
|
|
|
|
/s/ Christopher L. Harris
|
|
Director
|
|
February 27, 2020
|
Christopher L. Harris
|
|
|
|
|
|
|
|
|
|
/s/ Bryan Martin
|
|
Director
|
|
February 27, 2020
|
Bryan Martin
|
|
|
|
|
|
|
|
|
|
/s/ Jerry R. Masters
|
|
Director
|
|
February 27, 2020
|
Jerry R. Masters
|
|
|
|
|
|
|
|
|
|
/s/ Robert P. Myron
|
|
Director
|
|
February 27, 2020
|
Robert P. Myron
|
|
|
|
|
|
|
|
|
|
/s/ Michael T. Oakes
|
|
Director
|
|
February 27, 2020
|
Michael T. Oakes
|
|
|
|
|
|
|
|
|
|
/s/ Patricia H. Roberts
|
|
Director
|
|
February 27, 2020
|
Patricia H. Roberts
|
|
|
|
|
|
|
|
|
|
/s/ Ollie L. Sherman, Jr.
|
|
Director
|
|
February 27, 2020
|
Ollie L. Sherman, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Sundar Srinivasan
|
|
Director
|
|
February 27, 2020
|
Sundar Srinivasan
|
|
|
|
|
|
|
Page
|
|
|
Valuation of incurred but not reported reserves
|
Description of the Matter
|
|
At December 31, 2019, the Company’s reserve for losses and loss adjustment expenses balance was $2.0 billion, of which $1.2 billion relates to incurred but not reported (“IBNR”) reserves. The carrying amount is management’s best estimate of the ultimate liability, which in turn is composed of known reported losses and an estimate of incurred losses that have not been reported to the Company. As described in Note 1 of the consolidated financial statements, there is significant uncertainty inherent in determining management’s best estimate of the ultimate loss settlement cost which is used to determine the IBNR reserves. In particular, the estimate is subject to a number of variables, given the long-tailed nature of the business generally written by the Company and the limited operating experience of certain lines of business. These variables include the initial expected loss ratio, the incurred and paid loss development factors, and the weighting of the five actuarial methods to be used for each accident year and line of business.
Auditing management’s best estimate of the IBNR reserves involved the use of actuarial specialists and a high degree of subjectivity in evaluating management’s methods and variables included in the estimate of the ultimate loss settlement cost. These variables have a significant effect on the valuation of the IBNR reserves.
|
How We Addressed the Matter in Our Audit
|
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the process to estimate the IBNR reserves, including, among others, the review and approval processes that management has in place for the methods and assumptions used in estimating the IBNR reserves.
To test the IBNR reserves, our procedures included, among others, the involvement of actuarial specialists to assist with the evaluation of the Company’s selection and weighting of actuarial methods used in their analysis with those methods used in prior periods and those used in the industry. Additionally, to evaluate the significant assumptions in the variables used by management in the actuarial methods, we compared the significant variables, including the initial expected loss ratio and the incurred and paid loss development factors, to factors historically used and current industry benchmarks. Additionally, we performed sensitivity analyses on the variables used in management’s analyses to determine the effect of those changes on management’s best estimate of IBNR reserves for certain lines of business, which comprise a substantial amount of the Company’s recorded reserves. We also independently calculated a range of reasonable reserve estimates and performed independent projections for certain lines of business. We compared the range of reasonable reserve estimates to management’s recorded best estimate and performed a review of the historical results of the development of the estimate.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
|
|
||
Invested assets:
|
|
|
|
|
|
||
Fixed maturity securities:
|
|
|
|
|
|
||
Available-for-sale, at fair value (amortized cost: 2019 – $1,398,533; 2018 – $1,199,409)
|
$
|
1,433,626
|
|
|
$
|
1,184,202
|
|
Equity securities, at fair value (cost: 2019 – $73,244; 2018 – $77,152)
|
80,735
|
|
|
78,385
|
|
||
Bank loan participations held-for-investment, at amortized cost, net of allowance
|
260,864
|
|
|
260,972
|
|
||
Short-term investments
|
156,925
|
|
|
81,966
|
|
||
Other invested assets
|
61,210
|
|
|
72,321
|
|
||
Total invested assets
|
1,993,360
|
|
|
1,677,846
|
|
||
Cash and cash equivalents
|
206,912
|
|
|
172,457
|
|
||
Restricted cash equivalents
|
1,199,164
|
|
|
—
|
|
||
Accrued investment income
|
13,597
|
|
|
11,110
|
|
||
Premiums receivable and agents’ balances, net
|
369,462
|
|
|
307,899
|
|
||
Reinsurance recoverable on unpaid losses
|
668,045
|
|
|
467,371
|
|
||
Reinsurance recoverable on paid losses
|
33,221
|
|
|
18,344
|
|
||
Prepaid reinsurance premiums
|
178,976
|
|
|
112,498
|
|
||
Deferred policy acquisition costs
|
62,006
|
|
|
54,450
|
|
||
Intangible assets, net
|
36,940
|
|
|
37,537
|
|
||
Goodwill
|
181,831
|
|
|
181,831
|
|
||
Deferred tax assets, net
|
664
|
|
|
1,054
|
|
||
Other assets
|
80,227
|
|
|
94,379
|
|
||
Total assets
|
$
|
5,024,405
|
|
|
$
|
3,136,776
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands, except share amounts)
|
||||||
Liabilities and shareholders’ equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Reserve for losses and loss adjustment expenses
|
$
|
2,045,506
|
|
|
$
|
1,661,459
|
|
Unearned premiums
|
524,377
|
|
|
386,473
|
|
||
Payables to reinsurers
|
108,059
|
|
|
61,662
|
|
||
Funds held
|
1,199,164
|
|
|
—
|
|
||
Senior debt
|
158,300
|
|
|
118,300
|
|
||
Junior subordinated debt
|
104,055
|
|
|
104,055
|
|
||
Accrued expenses
|
58,416
|
|
|
51,792
|
|
||
Income taxes payable
|
1,483
|
|
|
1,915
|
|
||
Other liabilities
|
46,464
|
|
|
41,879
|
|
||
Total liabilities
|
4,245,824
|
|
|
2,427,535
|
|
||
Commitments and contingent liabilities
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Common Shares – $0.0002 par value; 200,000,000 shares authorized. 2019 and 2018: 30,424,391 and 29,988,460 shares issued and outstanding, respectively
|
6
|
|
|
6
|
|
||
Preferred Shares – 2019 and 2018: $0.00125 par value; 20,000,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
657,875
|
|
|
645,310
|
|
||
Retained earnings
|
89,586
|
|
|
79,753
|
|
||
Accumulated other comprehensive income (loss)
|
31,114
|
|
|
(15,828
|
)
|
||
Total shareholders’ equity
|
778,581
|
|
|
709,241
|
|
||
Total liabilities and shareholders’ equity
|
$
|
5,024,405
|
|
|
$
|
3,136,776
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands, except share amounts)
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||
Gross written premiums
|
$
|
1,470,735
|
|
|
$
|
1,166,773
|
|
|
$
|
1,081,905
|
|
Ceded written premiums
|
(574,585
|
)
|
|
(404,101
|
)
|
|
(315,279
|
)
|
|||
Net written premiums
|
896,150
|
|
|
762,672
|
|
|
766,626
|
|
|||
Change in net unearned premiums
|
(72,404
|
)
|
|
52,726
|
|
|
(25,517
|
)
|
|||
Net earned premiums
|
823,746
|
|
|
815,398
|
|
|
741,109
|
|
|||
Net investment income
|
75,652
|
|
|
61,256
|
|
|
61,119
|
|
|||
Net realized and unrealized losses on investments
|
(2,919
|
)
|
|
(5,479
|
)
|
|
(1,989
|
)
|
|||
Other income
|
10,646
|
|
|
14,424
|
|
|
17,386
|
|
|||
Total revenues
|
907,125
|
|
|
885,599
|
|
|
817,625
|
|
|||
Expenses:
|
|
|
|
|
|
|
|
|
|||
Losses and loss adjustment expenses
|
672,102
|
|
|
600,276
|
|
|
555,377
|
|
|||
Other operating expenses
|
170,908
|
|
|
201,035
|
|
|
196,993
|
|
|||
Other expenses
|
1,055
|
|
|
1,300
|
|
|
539
|
|
|||
Interest expense
|
10,596
|
|
|
11,553
|
|
|
8,974
|
|
|||
Amortization of intangible assets
|
597
|
|
|
597
|
|
|
597
|
|
|||
Total expenses
|
855,258
|
|
|
814,761
|
|
|
762,480
|
|
|||
Income before income taxes
|
51,867
|
|
|
70,838
|
|
|
55,145
|
|
|||
Income tax expense (benefit):
|
|
|
|
|
|
||||||
Current
|
18,453
|
|
|
12,867
|
|
|
11,943
|
|
|||
Deferred
|
(4,925
|
)
|
|
(5,859
|
)
|
|
(364
|
)
|
|||
|
13,528
|
|
|
7,008
|
|
|
11,579
|
|
|||
Net income
|
$
|
38,339
|
|
|
$
|
63,830
|
|
|
$
|
43,566
|
|
Other comprehensive income (losses):
|
|
|
|
|
|
||||||
Net unrealized gains (losses), net of taxes of $3,358 in 2019, $(444) in 2018, and $2,707 in 2017
|
46,942
|
|
|
(22,203
|
)
|
|
9,219
|
|
|||
Total comprehensive income
|
$
|
85,281
|
|
|
$
|
41,627
|
|
|
$
|
52,785
|
|
Per share data:
|
|
|
|
|
|
|
|
|
|||
Basic earnings per share
|
$
|
1.27
|
|
|
$
|
2.14
|
|
|
$
|
1.48
|
|
Diluted earnings per share
|
$
|
1.25
|
|
|
$
|
2.11
|
|
|
$
|
1.44
|
|
Dividend declared per share
|
$
|
1.20
|
|
|
$
|
1.20
|
|
|
$
|
1.70
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|||
Basic
|
30,275,184
|
|
|
29,887,990
|
|
|
29,461,717
|
|
|||
Diluted
|
30,673,924
|
|
|
30,307,101
|
|
|
30,273,149
|
|
|
Number of
Common Shares Outstanding |
|
Common
Shares (Par) |
|
Preferred
Shares
|
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total
Shareholders’ Equity |
|||||||||||||
|
(in thousands, except share amounts)
|
|||||||||||||||||||||||||
Balances at December 31, 2016
|
29,257,566
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
636,856
|
|
|
$
|
55,232
|
|
|
$
|
1,127
|
|
|
$
|
693,221
|
|
Net income
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
43,566
|
|
|
—
|
|
|
43,566
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|
9,219
|
|
|
9,219
|
|
||||||
Dividends
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
(50,600
|
)
|
|
—
|
|
|
(50,600
|
)
|
||||||
Exercise of stock options and related excess tax benefits
|
358,967
|
|
|
—
|
|
|
|
|
|
(6,213
|
)
|
|
—
|
|
|
—
|
|
|
(6,213
|
)
|
||||||
Vesting of RSUs and related excess tax benefits
|
80,149
|
|
|
—
|
|
|
|
|
|
(2,182
|
)
|
|
—
|
|
|
—
|
|
|
(2,182
|
)
|
||||||
Compensation expense under share incentive plans
|
—
|
|
|
—
|
|
|
|
|
|
7,688
|
|
|
—
|
|
|
—
|
|
|
7,688
|
|
||||||
Balances at December 31, 2017
|
29,696,682
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
636,149
|
|
|
$
|
48,198
|
|
|
$
|
10,346
|
|
|
$
|
694,699
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63,830
|
|
|
—
|
|
|
63,830
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,203
|
)
|
|
(22,203
|
)
|
||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,246
|
)
|
|
—
|
|
|
(36,246
|
)
|
||||||
Exercise of stock options
|
237,319
|
|
|
—
|
|
|
—
|
|
|
4,045
|
|
|
—
|
|
|
—
|
|
|
4,045
|
|
||||||
Vesting of RSUs
|
54,459
|
|
|
—
|
|
|
—
|
|
|
(1,112
|
)
|
|
—
|
|
|
—
|
|
|
(1,112
|
)
|
||||||
Compensation expense under share incentive plans
|
—
|
|
|
—
|
|
|
—
|
|
|
6,228
|
|
|
—
|
|
|
—
|
|
|
6,228
|
|
||||||
Cumulative effect of adoption of ASU No. 2016-01, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,682
|
|
|
(4,682
|
)
|
|
—
|
|
||||||
Cumulative effect of adoption of ASU No. 2018-02
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(711
|
)
|
|
711
|
|
|
—
|
|
||||||
Balances at December 31, 2018
|
29,988,460
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
645,310
|
|
|
$
|
79,753
|
|
|
$
|
(15,828
|
)
|
|
$
|
709,241
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,339
|
|
|
—
|
|
|
38,339
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,942
|
|
|
46,942
|
|
||||||
Dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(36,786
|
)
|
|
—
|
|
|
(36,786
|
)
|
||||||
Exercise of stock options
|
345,434
|
|
|
—
|
|
|
—
|
|
|
7,124
|
|
|
—
|
|
|
—
|
|
|
7,124
|
|
||||||
Vesting of RSUs
|
90,497
|
|
|
—
|
|
|
—
|
|
|
(1,737
|
)
|
|
—
|
|
|
—
|
|
|
(1,737
|
)
|
||||||
Compensation expense under share incentive plans
|
—
|
|
|
—
|
|
|
—
|
|
|
7,178
|
|
|
—
|
|
|
—
|
|
|
7,178
|
|
||||||
Adoption of ASU No. 2016-02, derecognition of build-to-suit lease (see Note 1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,280
|
|
|
—
|
|
|
8,280
|
|
||||||
Balances at December 31, 2019
|
30,424,391
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
657,875
|
|
|
$
|
89,586
|
|
|
$
|
31,114
|
|
|
$
|
778,581
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
38,339
|
|
|
$
|
63,830
|
|
|
$
|
43,566
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Deferred policy acquisition costs
|
(91,449
|
)
|
|
(93,188
|
)
|
|
(123,577
|
)
|
|||
Amortization of policy acquisition costs
|
83,893
|
|
|
111,103
|
|
|
116,001
|
|
|||
Net realized investment losses
|
2,919
|
|
|
5,479
|
|
|
1,989
|
|
|||
Impairment of intangible assets
|
—
|
|
|
200
|
|
|
—
|
|
|||
Distributions from equity method investments
|
2,834
|
|
|
7,499
|
|
|
7,333
|
|
|||
Income from equity method investments
|
(4,598
|
)
|
|
(3,540
|
)
|
|
(13,209
|
)
|
|||
Trading securities purchases, sales, and maturities, net
|
—
|
|
|
3,804
|
|
|
1,250
|
|
|||
Deferred U.S. federal income tax benefit
|
(4,925
|
)
|
|
(5,859
|
)
|
|
(364
|
)
|
|||
Provision for depreciation and amortization
|
4,063
|
|
|
4,215
|
|
|
2,123
|
|
|||
Share based compensation expense
|
7,178
|
|
|
6,228
|
|
|
7,688
|
|
|||
Excess tax benefits from equity incentive plan transactions
|
(1,099
|
)
|
|
(2,699
|
)
|
|
(2,115
|
)
|
|||
Change in operating assets and liabilities:
|
|
|
|
|
|
||||||
Reserve for losses and loss adjustment expenses
|
384,047
|
|
|
369,110
|
|
|
348,484
|
|
|||
Unearned premiums
|
137,904
|
|
|
(31,641
|
)
|
|
27,551
|
|
|||
Premiums receivable and agents’ balances
|
(61,563
|
)
|
|
44,537
|
|
|
(87,121
|
)
|
|||
Reinsurance balances
|
(235,632
|
)
|
|
(187,024
|
)
|
|
(113,665
|
)
|
|||
Funds held
|
1,199,164
|
|
|
—
|
|
|
—
|
|
|||
Payable to insurance companies
|
263
|
|
|
(2,029
|
)
|
|
445
|
|
|||
Other
|
27,684
|
|
|
3
|
|
|
(8,563
|
)
|
|||
Net cash provided by operating activities
|
1,489,022
|
|
|
290,028
|
|
|
207,816
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Securities available-for-sale:
|
|
|
|
|
|
||||||
Purchases – fixed maturity securities
|
(450,793
|
)
|
|
(418,011
|
)
|
|
(270,014
|
)
|
|||
Sales – fixed maturity securities
|
121,245
|
|
|
95,793
|
|
|
77,781
|
|
|||
Maturities and calls – fixed maturity securities
|
128,809
|
|
|
129,139
|
|
|
121,890
|
|
|||
Purchases – equity securities
|
(4,975
|
)
|
|
(7,507
|
)
|
|
(5,540
|
)
|
|||
Sales – equity securities
|
8,656
|
|
|
5,578
|
|
|
3,522
|
|
|||
Bank loan participations:
|
|
|
|
|
|
||||||
Purchases
|
(102,794
|
)
|
|
(203,328
|
)
|
|
(240,799
|
)
|
|||
Sales
|
48,415
|
|
|
123,114
|
|
|
138,214
|
|
|||
Maturities
|
45,277
|
|
|
58,742
|
|
|
69,740
|
|
|||
Other invested assets:
|
|
|
|
|
|
||||||
Purchases
|
—
|
|
|
(6,993
|
)
|
|
(8,913
|
)
|
|||
Return of capital
|
1,877
|
|
|
921
|
|
|
—
|
|
|||
Redemptions
|
10,998
|
|
|
—
|
|
|
—
|
|
|||
Securities receivable or payable, net
|
5,404
|
|
|
2,268
|
|
|
(2,525
|
)
|
|||
Short-term investments, net
|
(74,959
|
)
|
|
(45,162
|
)
|
|
14,040
|
|
|||
Other
|
(519
|
)
|
|
(1,326
|
)
|
|
(2,137
|
)
|
|||
Net cash used in investing activities
|
(263,359
|
)
|
|
(266,772
|
)
|
|
(104,741
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Senior debt issuances
|
60,000
|
|
|
20,000
|
|
|
10,000
|
|
|||
Senior debt repayments
|
(20,000
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid
|
(36,720
|
)
|
|
(36,123
|
)
|
|
(50,832
|
)
|
|||
Issuances of common shares under equity incentive plans
|
8,286
|
|
|
5,172
|
|
|
1,708
|
|
|||
Common share repurchases
|
(2,899
|
)
|
|
(2,239
|
)
|
|
(9,448
|
)
|
|||
Other financing activities
|
(711
|
)
|
|
(1,104
|
)
|
|
(792
|
)
|
|||
Net cash provided by (used in) financing activities
|
7,956
|
|
|
(14,294
|
)
|
|
(49,364
|
)
|
|||
Change in cash, cash equivalents, and restricted cash equivalents
|
1,233,619
|
|
|
8,962
|
|
|
53,711
|
|
|||
Cash and cash equivalents at beginning of year
|
172,457
|
|
|
163,495
|
|
|
109,784
|
|
|||
Cash, cash equivalents ($206,912), and restricted cash equivalents ($1,199,164) at end of year
|
$
|
1,406,076
|
|
|
$
|
172,457
|
|
|
$
|
163,495
|
|
Supplemental information
|
|
|
|
|
|
||||||
U.S. federal income taxes paid, net
|
$
|
18,719
|
|
|
$
|
8,174
|
|
|
$
|
9,848
|
|
Interest paid
|
$
|
12,354
|
|
|
$
|
11,269
|
|
|
$
|
8,909
|
|
1.
|
Accounting Policies
|
•
|
James River Group Holdings UK Limited (“James River UK”) is an insurance holding company formed in 2015 in the United Kingdom (“U.K.”). The Company contributed James River Group, Inc. (“James River Group”), a U.S. insurance holding company, to James River UK in 2015.
|
•
|
James River Group is a Delaware domiciled insurance holding company formed in 2002, which owns all of the Company’s U.S.-based subsidiaries, either directly or indirectly through one of its wholly-owned U.S. subsidiaries. James River Group oversees the Company’s U.S. insurance operations and maintains all of the outstanding debt in the U.S.
|
•
|
James River Insurance Company (“James River Insurance”) is an Ohio domiciled excess and surplus lines insurance company that, with its wholly-owned insurance subsidiary, James River Casualty Company, is authorized to write business in every state and the District of Columbia.
|
•
|
Falls Lake National Insurance Company (“Falls Lake National”) is an Ohio domiciled insurance company which wholly owns Stonewood Insurance Company (“Stonewood Insurance”), a North Carolina domiciled company, and Falls Lake Fire and Casualty Company, a California domiciled company. Falls Lake National began writing specialty admitted fronting and program business in late 2013. Falls Lake Fire and Casualty Company began operations in 2016.
|
•
|
JRG Reinsurance Company Ltd. (“JRG Re”) was formed in 2007 and commenced operations in 2008. JRG Re, a Bermuda domiciled reinsurer, primarily provides non-catastrophe casualty reinsurance to U.S. third parties and to the Company’s U.S.-based insurance subsidiaries.
|
•
|
Carolina Re Ltd ("Carolina Re") was formed in 2018 and provides reinsurance to the Company's U.S.-based insurance subsidiaries. Carolina Re is also the cedent on a stop loss reinsurance treaty with JRG Re.
|
|
Net Income
(Numerator) |
|
Weighted-Average
Common Shares (Denominator) |
|
Earnings
Per Share |
|||||
|
(in thousands, except per share data)
|
|||||||||
Year ended December 31, 2019
|
|
|
|
|
|
|
|
|
||
Basic
|
$
|
38,339
|
|
|
30,275,184
|
|
|
$
|
1.27
|
|
Common share equivalents
|
—
|
|
|
398,740
|
|
|
(0.02
|
)
|
||
Diluted
|
$
|
38,339
|
|
|
30,673,924
|
|
|
$
|
1.25
|
|
Year ended December 31, 2018
|
|
|
|
|
|
|||||
Basic
|
$
|
63,830
|
|
|
29,887,990
|
|
|
$
|
2.14
|
|
Common share equivalents
|
—
|
|
|
419,111
|
|
|
(0.03
|
)
|
||
Diluted
|
$
|
63,830
|
|
|
30,307,101
|
|
|
$
|
2.11
|
|
Year ended December 31, 2017
|
|
|
|
|
|
|||||
Basic
|
$
|
43,566
|
|
|
29,461,717
|
|
|
$
|
1.48
|
|
Common share equivalents
|
—
|
|
|
811,432
|
|
|
(0.04
|
)
|
||
Diluted
|
$
|
43,566
|
|
|
30,273,149
|
|
|
$
|
1.44
|
|
|
Cost or
Amortized Cost |
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Fair
Value |
||||||||
|
(in thousands)
|
||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
State and municipal
|
$
|
159,894
|
|
|
$
|
7,949
|
|
|
$
|
(742
|
)
|
|
$
|
167,101
|
|
Residential mortgage-backed
|
261,524
|
|
|
3,244
|
|
|
(622
|
)
|
|
264,146
|
|
||||
Corporate
|
611,304
|
|
|
21,306
|
|
|
(389
|
)
|
|
632,221
|
|
||||
Commercial mortgage and asset-backed
|
249,309
|
|
|
3,954
|
|
|
(806
|
)
|
|
252,457
|
|
||||
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
114,477
|
|
|
1,229
|
|
|
(39
|
)
|
|
115,667
|
|
||||
Redeemable preferred stock
|
2,025
|
|
|
9
|
|
|
—
|
|
|
2,034
|
|
||||
Total fixed maturity securities, available-for-sale
|
$
|
1,398,533
|
|
|
$
|
37,691
|
|
|
$
|
(2,598
|
)
|
|
$
|
1,433,626
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
State and municipal
|
$
|
147,160
|
|
|
$
|
3,422
|
|
|
$
|
(1,287
|
)
|
|
$
|
149,295
|
|
Residential mortgage-backed
|
208,869
|
|
|
577
|
|
|
(5,337
|
)
|
|
204,109
|
|
||||
Corporate
|
534,024
|
|
|
1,516
|
|
|
(10,772
|
)
|
|
524,768
|
|
||||
Commercial mortgage and asset-backed
|
199,528
|
|
|
310
|
|
|
(2,813
|
)
|
|
197,025
|
|
||||
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
107,803
|
|
|
235
|
|
|
(845
|
)
|
|
107,193
|
|
||||
Redeemable preferred stock
|
2,025
|
|
|
—
|
|
|
(213
|
)
|
|
1,812
|
|
||||
Total fixed maturity securities, available-for-sale
|
$
|
1,199,409
|
|
|
$
|
6,060
|
|
|
$
|
(21,267
|
)
|
|
$
|
1,184,202
|
|
|
Cost or
Amortized Cost |
|
Fair
Value |
||||
|
(in thousands)
|
||||||
One year or less
|
$
|
81,705
|
|
|
$
|
82,048
|
|
After one year through five years
|
456,076
|
|
|
466,952
|
|
||
After five years through ten years
|
219,717
|
|
|
228,596
|
|
||
After ten years
|
128,177
|
|
|
137,393
|
|
||
Residential mortgage-backed
|
261,524
|
|
|
264,146
|
|
||
Commercial mortgage and asset-backed
|
249,309
|
|
|
252,457
|
|
||
Redeemable preferred stock
|
2,025
|
|
|
2,034
|
|
||
Total
|
$
|
1,398,533
|
|
|
$
|
1,433,626
|
|
|
Less Than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
|
Fair
Value |
|
Gross
Unrealized Losses |
|
Fair
Value |
|
Gross
Unrealized Losses |
|
Fair
Value |
|
Gross
Unrealized Losses |
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
State and municipal
|
$
|
30,028
|
|
|
$
|
(741
|
)
|
|
$
|
667
|
|
|
$
|
(1
|
)
|
|
$
|
30,695
|
|
|
$
|
(742
|
)
|
Residential mortgage-backed
|
23,632
|
|
|
(78
|
)
|
|
37,363
|
|
|
(544
|
)
|
|
60,995
|
|
|
(622
|
)
|
||||||
Corporate
|
45,550
|
|
|
(365
|
)
|
|
9,933
|
|
|
(24
|
)
|
|
55,483
|
|
|
(389
|
)
|
||||||
Commercial mortgage and asset-backed
|
46,434
|
|
|
(406
|
)
|
|
56,720
|
|
|
(400
|
)
|
|
103,154
|
|
|
(806
|
)
|
||||||
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
8,474
|
|
|
(22
|
)
|
|
7,168
|
|
|
(17
|
)
|
|
15,642
|
|
|
(39
|
)
|
||||||
Total fixed maturity securities, available-for-sale
|
$
|
154,118
|
|
|
$
|
(1,612
|
)
|
|
$
|
111,851
|
|
|
$
|
(986
|
)
|
|
$
|
265,969
|
|
|
$
|
(2,598
|
)
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fixed maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
State and municipal
|
$
|
19,733
|
|
|
$
|
(284
|
)
|
|
$
|
47,018
|
|
|
$
|
(1,003
|
)
|
|
$
|
66,751
|
|
|
$
|
(1,287
|
)
|
Residential mortgage-backed
|
49,180
|
|
|
(743
|
)
|
|
105,778
|
|
|
(4,594
|
)
|
|
154,958
|
|
|
(5,337
|
)
|
||||||
Corporate
|
243,384
|
|
|
(5,089
|
)
|
|
155,902
|
|
|
(5,683
|
)
|
|
399,286
|
|
|
(10,772
|
)
|
||||||
Commercial mortgage and asset-backed
|
106,423
|
|
|
(1,229
|
)
|
|
51,805
|
|
|
(1,584
|
)
|
|
158,228
|
|
|
(2,813
|
)
|
||||||
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
17,618
|
|
|
(51
|
)
|
|
54,201
|
|
|
(794
|
)
|
|
71,819
|
|
|
(845
|
)
|
||||||
Redeemable preferred stock
|
1,812
|
|
|
(213
|
)
|
|
—
|
|
|
—
|
|
|
1,812
|
|
|
(213
|
)
|
||||||
Total fixed maturity securities, available-for-sale
|
$
|
438,150
|
|
|
$
|
(7,609
|
)
|
|
$
|
414,704
|
|
|
$
|
(13,658
|
)
|
|
$
|
852,854
|
|
|
$
|
(21,267
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Fixed maturity securities
|
$
|
39,875
|
|
|
$
|
34,129
|
|
|
$
|
26,833
|
|
Bank loan participations
|
19,772
|
|
|
18,279
|
|
|
17,388
|
|
|||
Equity securities
|
5,262
|
|
|
5,240
|
|
|
5,045
|
|
|||
Other invested assets
|
6,254
|
|
|
5,165
|
|
|
14,079
|
|
|||
Cash, cash equivalents, restricted cash equivalents, and short-term investments
|
9,210
|
|
|
2,677
|
|
|
1,704
|
|
|||
Gross investment income
|
80,373
|
|
|
65,490
|
|
|
65,049
|
|
|||
Investment expense
|
(4,721
|
)
|
|
(4,234
|
)
|
|
(3,930
|
)
|
|||
Net investment income
|
$
|
75,652
|
|
|
$
|
61,256
|
|
|
$
|
61,119
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Fixed maturity securities:
|
|
|
|
|
|
||||||
Gross realized gains
|
$
|
1,575
|
|
|
$
|
422
|
|
|
$
|
840
|
|
Gross realized losses
|
(494
|
)
|
|
(976
|
)
|
|
(512
|
)
|
|||
|
1,081
|
|
|
(554
|
)
|
|
328
|
|
|||
Equity securities:
|
|
|
|
|
|
||||||
Gross realized gains
|
11
|
|
|
—
|
|
|
429
|
|
|||
Gross realized losses
|
(232
|
)
|
|
(62
|
)
|
|
(1,591
|
)
|
|||
Changes in fair values of equity securities
|
6,257
|
|
|
(5,970
|
)
|
|
—
|
|
|||
|
6,036
|
|
|
(6,032
|
)
|
|
(1,162
|
)
|
|||
Bank loan participations:
|
|
|
|
|
|
||||||
Gross realized gains
|
846
|
|
|
2,279
|
|
|
2,407
|
|
|||
Gross realized losses
|
(10,902
|
)
|
|
(1,166
|
)
|
|
(3,557
|
)
|
|||
|
(10,056
|
)
|
|
1,113
|
|
|
(1,150
|
)
|
|||
Short-term investments and other:
|
|
|
|
|
|
||||||
Gross realized gains
|
21
|
|
|
—
|
|
|
1
|
|
|||
Gross realized losses
|
(1
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|||
|
20
|
|
|
(6
|
)
|
|
(5
|
)
|
|||
Total
|
$
|
(2,919
|
)
|
|
$
|
(5,479
|
)
|
|
$
|
(1,989
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Change in gross unrealized gains (losses):
|
|
|
|
|
|
||||||
Fixed maturity securities
|
$
|
50,300
|
|
|
$
|
(22,643
|
)
|
|
$
|
6,571
|
|
Equity securities
|
—
|
|
|
—
|
|
|
5,356
|
|
|||
Total
|
$
|
50,300
|
|
|
$
|
(22,643
|
)
|
|
$
|
11,927
|
|
|
Carrying Value
|
|
Investment Income
|
||||||||||||||||
|
December 31,
|
|
Year Ended December 31,
|
||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2017
|
||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||
Renewable energy LLCs(a)
|
$
|
31,219
|
|
|
$
|
29,795
|
|
|
$
|
2,181
|
|
|
$
|
2,974
|
|
|
$
|
10,578
|
|
Renewable energy notes receivable(b)
|
8,750
|
|
|
8,750
|
|
|
1,313
|
|
|
1,282
|
|
|
526
|
|
|||||
Limited partnerships(c)
|
16,741
|
|
|
29,276
|
|
|
2,417
|
|
|
566
|
|
|
2,632
|
|
|||||
Bank holding companies(d)
|
4,500
|
|
|
4,500
|
|
|
343
|
|
|
343
|
|
|
343
|
|
|||||
Total other invested assets
|
$
|
61,210
|
|
|
$
|
72,321
|
|
|
$
|
6,254
|
|
|
$
|
5,165
|
|
|
$
|
14,079
|
|
(a)
|
The Company’s Corporate and Other segment owns equity interests ranging from 2.6% to 32.2% in various LLCs whose principal objective is capital appreciation and income generation from owning and operating renewable energy production facilities (wind and solar). The LLCs are managed by an entity for which one of our directors and one of our recent former directors serve as officers, and the Company’s Executive Chairman and Chief Executive Officer has invested in certain of these LLCs. The equity method is used to account for the Company’s LLC investments. Income for the LLCs primarily reflects adjustments to the carrying values of investments in renewable energy projects to their determined fair values. The fair value adjustments are included in revenues for the LLCs. Expenses for the LLCs are not significant and are comprised of administrative and interest expenses. The Company received cash distributions from these investments totaling $757,000 and $5.8 million for the years ended December 31, 2019 and 2018, respectively.
|
(b)
|
The Company's Corporate and Other segment has invested in notes receivable for renewable energy projects. At December 31, 2019 and 2018, the Company held one $8.8 million note issued by an entity for which one of our directors and one of our recent former directors serve as officers. Interest on the note, which matures in 2021, is fixed at 15%. Interest income on the note was $1.3 million, $1.3 million, and $526,000 for the years ended December 31, 2019, 2018, and 2017, respectively.
|
(c)
|
The Company owns investments in limited partnerships that invest in concentrated portfolios including publicly-traded small cap equities, loans of middle market private equity sponsored companies, equity tranches of collateralized loan obligations ("CLOs"), and tranches of distressed home loans. Income from the partnerships is recognized under the equity method of accounting. The Company’s Corporate and Other segment held an investment in a limited partnership with a carrying value of $3.4 million and $3.1 million at December 31, 2019 and 2018, and recognized investment income of $327,000, $70,000, and $394,000 for the years ended December 31, 2019, 2018 and 2017, respectively. The Company’s Excess and Surplus Lines segment holds investments in limited partnerships of $13.3 million and $26.2 million at December 31, 2019 and 2018, respectively. Investment income of $2.1 million, $496,000, and $2.2 million were recognized on these investments for the years ended December 31, 2019, 2018, and 2017, respectively. At December 31, 2019, the Company’s Excess and Surplus Lines segment has outstanding commitments to invest another $625,000 in these limited partnerships.
|
(d)
|
The Company's Corporate and Other segment holds $4.5 million of subordinated notes issued by a bank holding company for which the Company’s Executive Chairman and Chief Executive Officer was previously the Lead Independent Director and an investor and for which one of the Company’s directors was an investor and is currently a lender (the "Bank Holding Company"). Interest on the notes, which mature in 2023, is fixed at 7.6% per annum. Interest income on the notes was $343,000 in each of the years ended December 31, 2019, 2018 and 2017.
|
3.
|
Deferred Policy Acquisition Costs
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Balance at beginning of period
|
$
|
54,450
|
|
|
$
|
72,365
|
|
|
$
|
64,789
|
|
Policy acquisition costs deferred:
|
|
|
|
|
|
||||||
Commissions
|
67,303
|
|
|
72,473
|
|
|
107,387
|
|
|||
Underwriting and other issue expenses
|
24,146
|
|
|
20,715
|
|
|
16,190
|
|
|||
|
91,449
|
|
|
93,188
|
|
|
123,577
|
|
|||
Amortization of policy acquisition costs
|
(83,893
|
)
|
|
(111,103
|
)
|
|
(116,001
|
)
|
|||
Net change
|
7,556
|
|
|
(17,915
|
)
|
|
7,576
|
|
|||
Balance at end of period
|
$
|
62,006
|
|
|
$
|
54,450
|
|
|
$
|
72,365
|
|
4.
|
Goodwill and Intangible Assets
|
|
|
|
December 31,
|
||||||||||||||
|
|
|
2019
|
|
2018
|
||||||||||||
|
Weighted-
Average
Life
(Years)
|
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
||||||||
|
|
|
(in thousands)
|
||||||||||||||
Trademarks
|
Indefinite
|
|
$
|
22,200
|
|
|
$
|
—
|
|
|
$
|
22,200
|
|
|
$
|
—
|
|
Insurance licenses and authorities
|
Indefinite
|
|
8,964
|
|
|
—
|
|
|
8,964
|
|
|
—
|
|
||||
Identifiable intangibles not subject to amortization
|
|
|
31,164
|
|
|
—
|
|
|
31,164
|
|
|
—
|
|
||||
Broker relationships
|
24.6
|
|
11,611
|
|
|
5,835
|
|
|
11,611
|
|
|
5,238
|
|
||||
Identifiable intangible assets subject to amortization
|
|
|
11,611
|
|
|
5,835
|
|
|
11,611
|
|
|
5,238
|
|
||||
|
|
|
$
|
42,775
|
|
|
$
|
5,835
|
|
|
$
|
42,775
|
|
|
$
|
5,238
|
|
2020
|
$
|
538
|
|
2021
|
363
|
|
|
2022
|
363
|
|
|
2023
|
363
|
|
|
2024
|
363
|
|
|
Thereafter
|
3,786
|
|
|
Total
|
$
|
5,776
|
|
|
December 31, 2018
|
|
|
|
|
|
December 31, 2019
|
||||||||
|
Net Carrying
Value |
|
Amortization
|
|
Impairment
Losses |
|
Net Carrying
Value |
||||||||
|
(in thousands)
|
||||||||||||||
Excess and Surplus Lines
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
$
|
19,700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,700
|
|
Insurance licenses and authorities
|
4,900
|
|
|
—
|
|
|
—
|
|
|
4,900
|
|
||||
Broker relationships
|
5,965
|
|
|
(362
|
)
|
|
—
|
|
|
5,603
|
|
||||
|
30,565
|
|
|
(362
|
)
|
|
—
|
|
|
30,203
|
|
||||
Specialty Admitted Insurance
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
2,500
|
|
|
—
|
|
|
—
|
|
|
2,500
|
|
||||
Insurance licenses and authorities
|
4,065
|
|
|
—
|
|
|
—
|
|
|
4,065
|
|
||||
Broker relationships
|
407
|
|
|
(235
|
)
|
|
—
|
|
|
172
|
|
||||
|
6,972
|
|
|
(235
|
)
|
|
—
|
|
|
6,737
|
|
||||
Total identifiable intangible assets
|
$
|
37,537
|
|
|
$
|
(597
|
)
|
|
$
|
—
|
|
|
$
|
36,940
|
|
|
December 31, 2017
|
|
|
|
|
|
December 31, 2018
|
||||||||
|
Net Carrying
Value |
|
Amortization
|
|
Impairment
Losses |
|
Net Carrying
Value |
||||||||
|
(in thousands)
|
||||||||||||||
Excess and Surplus Lines
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
$
|
19,700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,700
|
|
Insurance licenses and authorities
|
4,900
|
|
|
—
|
|
|
—
|
|
|
4,900
|
|
||||
Broker relationships
|
6,327
|
|
|
(362
|
)
|
|
—
|
|
|
5,965
|
|
||||
|
30,927
|
|
|
(362
|
)
|
|
—
|
|
|
30,565
|
|
||||
Specialty Admitted Insurance
|
|
|
|
|
|
|
|
||||||||
Trademarks
|
2,500
|
|
|
—
|
|
|
—
|
|
|
2,500
|
|
||||
Insurance licenses and authorities
|
4,265
|
|
|
—
|
|
|
(200
|
)
|
|
4,065
|
|
||||
Broker relationships
|
642
|
|
|
(235
|
)
|
|
—
|
|
|
407
|
|
||||
|
7,407
|
|
|
(235
|
)
|
|
(200
|
)
|
|
6,972
|
|
||||
Total identifiable intangible assets
|
$
|
38,334
|
|
|
$
|
(597
|
)
|
|
$
|
(200
|
)
|
|
$
|
37,537
|
|
5.
|
Property and Equipment, Net
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Building, leased for which the Company was previously deemed the owner for accounting purposes
|
$
|
—
|
|
|
$
|
30,971
|
|
Electronic data processing hardware and software
|
7,522
|
|
|
7,423
|
|
||
Furniture and equipment
|
2,180
|
|
|
2,662
|
|
||
Property and equipment, cost basis
|
9,702
|
|
|
41,056
|
|
||
Accumulated depreciation
|
(7,934
|
)
|
|
(17,745
|
)
|
||
Property and equipment, net
|
$
|
1,768
|
|
|
$
|
23,311
|
|
6.
|
Leases
|
Years ending December 31,
|
(in thousands)
|
|
|
2020
|
$
|
4,024
|
|
2021
|
3,993
|
|
|
2022
|
3,800
|
|
|
2023
|
3,619
|
|
|
2024
|
2,422
|
|
|
Thereafter
|
2,546
|
|
|
Total lease payments
|
20,404
|
|
|
Less imputed interest
|
(2,172
|
)
|
|
Total operating lease liabilities
|
$
|
18,232
|
|
7.
|
Reserve for Losses and Loss Adjustment Expenses
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period
|
$
|
1,194,088
|
|
|
$
|
989,825
|
|
|
$
|
761,128
|
|
Add: Incurred losses and loss adjustment expenses net of reinsurance:
|
|
|
|
|
|
|
|
|
|||
Current year
|
603,094
|
|
|
582,604
|
|
|
533,905
|
|
|||
Prior years
|
69,008
|
|
|
17,672
|
|
|
21,472
|
|
|||
Total incurred losses and loss and adjustment expenses
|
672,102
|
|
|
600,276
|
|
|
555,377
|
|
|||
Deduct: Loss and loss adjustment expense payments net of reinsurance:
|
|
|
|
|
|
|
|
|
|||
Current year
|
75,249
|
|
|
86,355
|
|
|
103,205
|
|
|||
Prior years
|
413,480
|
|
|
309,658
|
|
|
223,475
|
|
|||
Total loss and loss adjustment expense payments
|
488,729
|
|
|
396,013
|
|
|
326,680
|
|
|||
Reserve for losses and loss adjustment expenses net of reinsurance recoverables at end of period
|
1,377,461
|
|
|
1,194,088
|
|
|
989,825
|
|
|||
Add: Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period
|
668,045
|
|
|
467,371
|
|
|
302,524
|
|
|||
Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period
|
$
|
2,045,506
|
|
|
$
|
1,661,459
|
|
|
$
|
1,292,349
|
|
Accident Year
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||||||||||
2010
|
|
$
|
78,424
|
|
|
$
|
80,569
|
|
|
$
|
78,117
|
|
|
$
|
73,035
|
|
|
$
|
69,080
|
|
|
$
|
69,964
|
|
|
$
|
70,294
|
|
|
$
|
70,913
|
|
|
$
|
71,312
|
|
|
$
|
69,594
|
|
2011
|
|
|
|
111,190
|
|
|
119,927
|
|
|
114,473
|
|
|
106,564
|
|
|
106,381
|
|
|
106,130
|
|
|
106,643
|
|
|
106,536
|
|
|
105,173
|
|
|||||||||||
2012
|
|
|
|
|
|
97,908
|
|
|
98,672
|
|
|
97,829
|
|
|
96,497
|
|
|
97,306
|
|
|
99,619
|
|
|
101,271
|
|
|
103,061
|
|
||||||||||||
2013
|
|
|
|
|
|
|
|
96,729
|
|
|
96,064
|
|
|
85,433
|
|
|
81,009
|
|
|
82,830
|
|
|
83,855
|
|
|
82,732
|
|
|||||||||||||
2014
|
|
|
|
|
|
|
|
|
|
114,942
|
|
|
104,092
|
|
|
90,267
|
|
|
82,232
|
|
|
84,074
|
|
|
88,904
|
|
||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
126,443
|
|
|
113,417
|
|
|
104,847
|
|
|
102,434
|
|
|
103,688
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
138,507
|
|
|
125,093
|
|
|
126,050
|
|
|
126,971
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
144,349
|
|
|
131,897
|
|
|
132,136
|
|
|||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
167,004
|
|
|
158,458
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
214,653
|
|
|||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,185,370
|
|
Accident Year
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
2010
|
|
$
|
13,673
|
|
|
$
|
26,418
|
|
|
$
|
35,812
|
|
|
$
|
45,641
|
|
|
$
|
52,071
|
|
|
$
|
57,371
|
|
|
$
|
61,307
|
|
|
$
|
64,214
|
|
|
$
|
65,246
|
|
|
$
|
65,915
|
|
2011
|
|
|
|
27,684
|
|
|
53,109
|
|
|
72,732
|
|
|
81,696
|
|
|
90,884
|
|
|
94,998
|
|
|
98,684
|
|
|
99,798
|
|
|
101,728
|
|
|||||||||||
2012
|
|
|
|
|
|
6,944
|
|
|
33,757
|
|
|
49,604
|
|
|
63,216
|
|
|
74,869
|
|
|
82,545
|
|
|
88,812
|
|
|
94,588
|
|
||||||||||||
2013
|
|
|
|
|
|
|
|
3,867
|
|
|
14,509
|
|
|
30,382
|
|
|
44,421
|
|
|
59,641
|
|
|
66,553
|
|
|
71,035
|
|
|||||||||||||
2014
|
|
|
|
|
|
|
|
|
|
3,412
|
|
|
16,969
|
|
|
28,212
|
|
|
43,891
|
|
|
58,774
|
|
|
71,549
|
|
||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
4,048
|
|
|
17,164
|
|
|
34,801
|
|
|
55,911
|
|
|
73,455
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,180
|
|
|
22,852
|
|
|
46,045
|
|
|
70,105
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,290
|
|
|
22,956
|
|
|
42,764
|
|
|||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
|
|
26,160
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,235
|
|
|||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
625,534
|
|
||||||||||||||||||
All outstanding losses and loss adjustment expenses prior to 2010, net of reinsurance (60 claims outstanding)
|
|
|
|
$
|
8,978
|
|
||||||||||||||||||||||||||||||||||
Total outstanding losses and loss adjustment expenses, net of reinsurance
|
|
|
|
|
|
|
|
$
|
568,814
|
|
Accident Year
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||||
2013
|
|
$
|
1,255
|
|
|
$
|
1,300
|
|
|
$
|
1,451
|
|
|
$
|
1,351
|
|
|
$
|
1,301
|
|
|
$
|
1,277
|
|
|
$
|
1,277
|
|
2014
|
|
|
|
20,487
|
|
|
14,071
|
|
|
17,233
|
|
|
18,953
|
|
|
19,779
|
|
|
18,303
|
|
||||||||
2015
|
|
|
|
|
|
30,109
|
|
|
33,113
|
|
|
35,149
|
|
|
36,139
|
|
|
36,636
|
|
|||||||||
2016
|
|
|
|
|
|
|
|
74,340
|
|
|
109,286
|
|
|
126,791
|
|
|
147,122
|
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|
207,355
|
|
|
208,743
|
|
|
272,421
|
|
|||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
255,881
|
|
|
230,220
|
|
||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
262,306
|
|
|||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
968,285
|
|
Accident Year
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||||||||||
2010
|
|
$
|
27,209
|
|
|
$
|
28,736
|
|
|
$
|
30,464
|
|
|
$
|
30,373
|
|
|
$
|
28,963
|
|
|
$
|
28,938
|
|
|
$
|
27,590
|
|
|
$
|
27,098
|
|
|
$
|
27,099
|
|
|
$
|
27,099
|
|
2011
|
|
|
|
37,834
|
|
|
41,421
|
|
|
40,154
|
|
|
38,999
|
|
|
38,311
|
|
|
37,455
|
|
|
36,594
|
|
|
36,593
|
|
|
36,593
|
|
|||||||||||
2012
|
|
|
|
|
|
32,116
|
|
|
32,420
|
|
|
31,490
|
|
|
29,689
|
|
|
28,255
|
|
|
28,174
|
|
|
28,186
|
|
|
28,186
|
|
||||||||||||
2013
|
|
|
|
|
|
|
|
12,525
|
|
|
13,668
|
|
|
12,786
|
|
|
11,578
|
|
|
10,907
|
|
|
10,909
|
|
|
10,909
|
|
|||||||||||||
2014
|
|
|
|
|
|
|
|
|
|
16,638
|
|
|
16,652
|
|
|
14,620
|
|
|
13,890
|
|
|
12,704
|
|
|
12,704
|
|
||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
20,938
|
|
|
21,274
|
|
|
19,741
|
|
|
18,376
|
|
|
17,626
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,678
|
|
|
20,299
|
|
|
18,050
|
|
|
15,800
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,869
|
|
|
22,071
|
|
|
19,779
|
|
|||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,432
|
|
|
16,288
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,253
|
|
|||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
205,237
|
|
Accident Year
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||||||||||
2010
|
|
$
|
7,157
|
|
|
$
|
16,245
|
|
|
$
|
21,805
|
|
|
$
|
23,898
|
|
|
$
|
25,210
|
|
|
$
|
25,477
|
|
|
$
|
26,345
|
|
|
$
|
26,352
|
|
|
$
|
26,358
|
|
|
$
|
26,365
|
|
2011
|
|
|
|
10,123
|
|
|
23,127
|
|
|
29,021
|
|
|
33,204
|
|
|
34,240
|
|
|
34,287
|
|
|
34,334
|
|
|
34,614
|
|
|
34,638
|
|
|||||||||||
2012
|
|
|
|
|
|
9,222
|
|
|
20,308
|
|
|
24,755
|
|
|
26,435
|
|
|
26,897
|
|
|
26,932
|
|
|
26,963
|
|
|
26,994
|
|
||||||||||||
2013
|
|
|
|
|
|
|
|
4,487
|
|
|
8,723
|
|
|
9,846
|
|
|
10,246
|
|
|
10,263
|
|
|
10,309
|
|
|
10,337
|
|
|||||||||||||
2014
|
|
|
|
|
|
|
|
|
|
4,633
|
|
|
10,648
|
|
|
12,041
|
|
|
12,236
|
|
|
12,282
|
|
|
12,282
|
|
||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
6,604
|
|
|
13,285
|
|
|
15,118
|
|
|
15,889
|
|
|
15,901
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,664
|
|
|
10,227
|
|
|
12,135
|
|
|
12,432
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,546
|
|
|
12,782
|
|
|
14,285
|
|
|||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,497
|
|
|
9,034
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,473
|
|
|||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
167,741
|
|
||||||||||||||||||
All outstanding losses and loss adjustment expenses prior to 2010, net of reinsurance (4 claims outstanding)
|
|
|
|
$
|
1,039
|
|
||||||||||||||||||||||||||||||||||
Outstanding losses and loss adjustment expenses assumed from involuntary workers’ compensation pools
|
|
|
|
$
|
4,656
|
|
||||||||||||||||||||||||||||||||||
Total outstanding losses and loss adjustment expenses, net of reinsurance
|
|
|
|
|
|
|
|
$
|
43,191
|
|
Accident Year
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||||
2013
|
|
$
|
104
|
|
|
$
|
80
|
|
|
$
|
52
|
|
|
$
|
52
|
|
|
$
|
52
|
|
|
$
|
52
|
|
|
52
|
|
|
2014
|
|
|
|
3,460
|
|
|
3,468
|
|
|
3,818
|
|
|
3,425
|
|
|
3,228
|
|
|
3,083
|
|
||||||||
2015
|
|
|
|
|
|
7,136
|
|
|
9,632
|
|
|
9,358
|
|
|
8,974
|
|
|
8,384
|
|
|||||||||
2016
|
|
|
|
|
|
|
|
11,542
|
|
|
15,670
|
|
|
14,682
|
|
|
15,522
|
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|
21,229
|
|
|
24,271
|
|
|
25,201
|
|
|||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
21,758
|
|
|
20,677
|
|
||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,832
|
|
|||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
91,751
|
|
Accident Year
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||||
2013
|
|
$
|
28
|
|
|
$
|
52
|
|
|
$
|
52
|
|
|
$
|
52
|
|
|
$
|
52
|
|
|
$
|
52
|
|
|
52
|
|
|
2014
|
|
|
|
883
|
|
|
1,687
|
|
|
2,369
|
|
|
2,728
|
|
|
2,854
|
|
|
2,916
|
|
||||||||
2015
|
|
|
|
|
|
2,058
|
|
|
4,666
|
|
|
6,165
|
|
|
6,919
|
|
|
7,329
|
|
|||||||||
2016
|
|
|
|
|
|
|
|
1,894
|
|
|
5,123
|
|
|
6,888
|
|
|
10,732
|
|
||||||||||
2017
|
|
|
|
|
|
|
|
|
|
1,223
|
|
|
6,682
|
|
|
13,065
|
|
|||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
885
|
|
|
4,972
|
|
||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,358
|
|
|||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
43,424
|
|
||||||||||||
All outstanding losses and loss adjustment expenses, net of reinsurance
|
|
|
|
|
|
$
|
48,327
|
|
||||||||||||||||||||
Outstanding losses and loss adjustment expenses, assumed from involuntary pools
|
|
|
|
$
|
400
|
|
||||||||||||||||||||||
Total outstanding losses and loss adjustment expenses, net of reinsurance
|
|
|
|
|
|
$
|
48,727
|
|
Accident Year
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||||||||||
2010
|
|
$
|
64,413
|
|
|
$
|
60,476
|
|
|
$
|
61,068
|
|
|
$
|
62,714
|
|
|
$
|
61,344
|
|
|
$
|
60,949
|
|
|
$
|
60,978
|
|
|
$
|
61,619
|
|
|
$
|
62,605
|
|
|
$
|
63,357
|
|
2011
|
|
|
|
114,908
|
|
|
103,123
|
|
|
97,366
|
|
|
97,812
|
|
|
98,993
|
|
|
99,282
|
|
|
101,276
|
|
|
103,196
|
|
|
105,333
|
|
|||||||||||
2012
|
|
|
|
|
|
148,251
|
|
|
132,388
|
|
|
131,281
|
|
|
135,594
|
|
|
136,813
|
|
|
139,978
|
|
|
143,305
|
|
|
146,045
|
|
||||||||||||
2013
|
|
|
|
|
|
|
|
133,230
|
|
|
130,361
|
|
|
131,352
|
|
|
134,446
|
|
|
137,801
|
|
|
143,124
|
|
|
146,760
|
|
|||||||||||||
2014
|
|
|
|
|
|
|
|
|
|
118,881
|
|
|
115,927
|
|
|
114,636
|
|
|
116,981
|
|
|
121,200
|
|
|
126,160
|
|
||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
119,157
|
|
|
108,870
|
|
|
108,699
|
|
|
109,117
|
|
|
114,517
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112,759
|
|
|
105,533
|
|
|
103,544
|
|
|
108,222
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
134,628
|
|
|
128,472
|
|
|
129,800
|
|
|||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
121,529
|
|
|
119,098
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
86,022
|
|
|||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,145,314
|
|
Accident Year
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||||||||||
2010
|
|
$
|
21,918
|
|
|
$
|
31,500
|
|
|
$
|
38,430
|
|
|
$
|
44,921
|
|
|
$
|
49,263
|
|
|
$
|
52,761
|
|
|
$
|
54,659
|
|
|
$
|
57,013
|
|
|
$
|
58,707
|
|
|
$
|
59,634
|
|
2011
|
|
|
|
48,688
|
|
|
61,922
|
|
|
68,616
|
|
|
78,164
|
|
|
87,267
|
|
|
90,287
|
|
|
94,627
|
|
|
97,715
|
|
|
99,511
|
|
|||||||||||
2012
|
|
|
|
|
|
73,124
|
|
|
81,859
|
|
|
97,215
|
|
|
113,943
|
|
|
121,026
|
|
|
128,567
|
|
|
133,606
|
|
|
137,430
|
|
||||||||||||
2013
|
|
|
|
|
|
|
|
59,756
|
|
|
75,094
|
|
|
93,902
|
|
|
108,396
|
|
|
119,256
|
|
|
127,732
|
|
|
134,644
|
|
|||||||||||||
2014
|
|
|
|
|
|
|
|
|
|
41,421
|
|
|
58,601
|
|
|
76,302
|
|
|
89,899
|
|
|
101,366
|
|
|
110,374
|
|
||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
40,021
|
|
|
53,986
|
|
|
68,002
|
|
|
80,208
|
|
|
90,661
|
|
|||||||||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,268
|
|
|
50,905
|
|
|
65,409
|
|
|
78,145
|
|
||||||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,739
|
|
|
72,891
|
|
|
90,117
|
|
|||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,903
|
|
|
50,274
|
|
||||||||||||||||||
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,646
|
|
|||||||||||||||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
863,436
|
|
||||||||||||||||||
All outstanding losses and loss adjustment expenses prior to 2010, net of reinsurance
|
|
|
|
|
|
|
|
$
|
1,798
|
|
||||||||||||||||||||||||||||||
Total outstanding losses and loss adjustment expenses, net of reinsurance
|
|
|
|
|
|
|
|
$
|
283,676
|
|
E&S – excluding commercial auto
|
$
|
568,814
|
|
E&S – commercial auto
|
433,053
|
|
|
Specialty Admitted – individual risk workers’ compensation
|
43,191
|
|
|
Specialty Admitted – fronting and programs
|
48,727
|
|
|
Casualty Reinsurance
|
283,676
|
|
|
Net reserve for losses and loss adjustment expenses
|
1,377,461
|
|
|
Reinsurance recoverables on unpaid losses
|
668,045
|
|
|
Gross reserve for losses and loss adjustment expenses
|
$
|
2,045,506
|
|
|
Year 1
|
|
Year 2
|
|
Year 3
|
|
Year 4
|
|
Year 5
|
|
Year 6
|
|
Year 7
|
|
Year 8
|
|
Year 9
|
|
Year 10
|
||||||||||
E&S – excluding commercial auto
|
9.5
|
%
|
|
15.7
|
%
|
|
17.2
|
%
|
|
18.5
|
%
|
|
14.5
|
%
|
|
8.0
|
%
|
|
5.4
|
%
|
|
3.8
|
%
|
|
2.0
|
%
|
|
1.1
|
%
|
E&S – commercial auto
|
20.4
|
%
|
|
38.1
|
%
|
|
16.0
|
%
|
|
14.1
|
%
|
|
7.2
|
%
|
|
2.6
|
%
|
|
1.5
|
%
|
|
|
|
|
|
|
|||
Specialty Admitted – individual risk workers’ compensation
|
27.9
|
%
|
|
30.9
|
%
|
|
16.0
|
%
|
|
10.2
|
%
|
|
7.2
|
%
|
|
1.2
|
%
|
|
1.7
|
%
|
|
0.9
|
%
|
|
0.1
|
%
|
|
1.3
|
%
|
Specialty Admitted – fronting and programs
|
18.7
|
%
|
|
22.4
|
%
|
|
24.3
|
%
|
|
16.1
|
%
|
|
10.5
|
%
|
|
5.3
|
%
|
|
|
|
|
|
|
|
|
||||
Casualty Reinsurance
|
21.1
|
%
|
|
16.4
|
%
|
|
12.2
|
%
|
|
8.9
|
%
|
|
6.4
|
%
|
|
5.3
|
%
|
|
4.3
|
%
|
|
3.6
|
%
|
|
3.5
|
%
|
|
3.2
|
%
|
Accident Year
|
|
Incurred Losses
and Loss Adj Expenses |
|
IBNR
|
|
Cumulative # of
Reported Claims |
|||||
|
|
($ in thousands)
|
|||||||||
2010
|
|
$
|
69,594
|
|
|
$
|
1,347
|
|
|
1,429
|
|
2011
|
|
105,173
|
|
|
2,380
|
|
|
1,480
|
|
||
2012
|
|
103,061
|
|
|
2,042
|
|
|
1,806
|
|
||
2013
|
|
82,732
|
|
|
5,493
|
|
|
2,396
|
|
||
2014
|
|
88,904
|
|
|
9,855
|
|
|
2,162
|
|
||
2015
|
|
103,688
|
|
|
7,681
|
|
|
2,531
|
|
||
2016
|
|
126,971
|
|
|
23,882
|
|
|
2,933
|
|
||
2017
|
|
132,136
|
|
|
53,525
|
|
|
2,898
|
|
||
2018
|
|
158,458
|
|
|
95,477
|
|
|
3,935
|
|
||
2019
|
|
214,653
|
|
|
178,172
|
|
|
4,038
|
|
Accident Year
|
|
Incurred Losses
and Loss Adj
Expenses
|
|
IBNR
|
|
Cumulative # of
Reported Claims
|
|||||
|
|
($ in thousands)
|
|||||||||
2013
|
|
$
|
1,277
|
|
|
$
|
1
|
|
|
54
|
|
2014
|
|
18,303
|
|
|
150
|
|
|
7,763
|
|
||
2015
|
|
36,636
|
|
|
337
|
|
|
41,757
|
|
||
2016
|
|
147,122
|
|
|
5,258
|
|
|
89,003
|
|
||
2017
|
|
272,421
|
|
|
11,473
|
|
|
133,654
|
|
||
2018
|
|
230,220
|
|
|
34,896
|
|
|
95,889
|
|
||
2019
|
|
262,306
|
|
|
167,476
|
|
|
67,380
|
|
Accident Year
|
|
Incurred Losses
and Loss Adj Expenses |
|
IBNR
|
|
Cumulative # of
Reported Claims |
||||||
|
|
($ in thousands)
|
||||||||||
2010
|
|
$
|
27,099
|
|
|
$
|
698
|
|
|
$
|
1,604
|
|
2011
|
|
36,593
|
|
|
1,879
|
|
|
1,814
|
|
|||
2012
|
|
28,186
|
|
|
1,090
|
|
|
1,323
|
|
|||
2013
|
|
10,909
|
|
|
572
|
|
|
540
|
|
|||
2014
|
|
12,704
|
|
|
423
|
|
|
850
|
|
|||
2015
|
|
17,626
|
|
|
1,440
|
|
|
975
|
|
|||
2016
|
|
15,800
|
|
|
3,245
|
|
|
836
|
|
|||
2017
|
|
19,779
|
|
|
3,888
|
|
|
1,092
|
|
|||
2018
|
|
16,288
|
|
|
3,495
|
|
|
1,230
|
|
|||
2019
|
|
20,253
|
|
|
2,965
|
|
|
1,482
|
|
Accident Year
|
|
Incurred Losses
and Loss Adj Expenses |
|
IBNR
|
|
Cumulative # of
Reported Claims |
|||||
|
|
($ in thousands)
|
|||||||||
2013
|
|
$
|
52
|
|
|
$
|
—
|
|
|
22
|
|
2014
|
|
3,083
|
|
|
147
|
|
|
857
|
|
||
2015
|
|
8,384
|
|
|
432
|
|
|
1,362
|
|
||
2016
|
|
15,522
|
|
|
1,861
|
|
|
2,807
|
|
||
2017
|
|
25,201
|
|
|
6,751
|
|
|
6,706
|
|
||
2018
|
|
20,677
|
|
|
10,142
|
|
|
7,158
|
|
||
2019
|
|
18,832
|
|
|
10,961
|
|
|
5,695
|
|
Accident Year
|
|
Incurred Losses
and Loss Adj Expenses |
|
IBNR
|
||||
|
|
($ in thousands)
|
||||||
2010
|
|
$
|
63,357
|
|
|
$
|
723
|
|
2011
|
|
105,333
|
|
|
1,184
|
|
||
2012
|
|
146,045
|
|
|
2,025
|
|
||
2013
|
|
146,760
|
|
|
2,631
|
|
||
2014
|
|
126,160
|
|
|
3,487
|
|
||
2015
|
|
114,517
|
|
|
9,957
|
|
||
2016
|
|
108,222
|
|
|
18,720
|
|
||
2017
|
|
129,800
|
|
|
36,167
|
|
||
2018
|
|
119,098
|
|
|
29,472
|
|
||
2019
|
|
86,022
|
|
|
68,499
|
|
8.
|
Reinsurance
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Written premiums:
|
|
|
|
|
|
|
|
|
|||
Direct
|
$
|
1,305,948
|
|
|
$
|
1,027,222
|
|
|
$
|
843,719
|
|
Assumed
|
164,787
|
|
|
139,551
|
|
|
238,186
|
|
|||
Ceded
|
(574,585
|
)
|
|
(404,101
|
)
|
|
(315,279
|
)
|
|||
Net
|
$
|
896,150
|
|
|
$
|
762,672
|
|
|
$
|
766,626
|
|
Earned premiums:
|
|
|
|
|
|
|
|
|
|||
Direct
|
$
|
1,182,501
|
|
|
$
|
990,221
|
|
|
$
|
842,182
|
|
Assumed
|
150,330
|
|
|
208,192
|
|
|
173,472
|
|
|||
Ceded
|
(509,085
|
)
|
|
(383,015
|
)
|
|
(274,545
|
)
|
|||
Net
|
$
|
823,746
|
|
|
$
|
815,398
|
|
|
$
|
741,109
|
|
Losses and loss adjustment expenses:
|
|
|
|
|
|
|
|
|
|||
Direct
|
$
|
953,548
|
|
|
$
|
769,490
|
|
|
$
|
626,318
|
|
Assumed
|
113,843
|
|
|
131,346
|
|
|
142,818
|
|
|||
Ceded
|
(395,289
|
)
|
|
(300,560
|
)
|
|
(213,759
|
)
|
|||
Net
|
$
|
672,102
|
|
|
$
|
600,276
|
|
|
$
|
555,377
|
|
9.
|
Senior Debt
|
•
|
A $102.5 million secured revolving facility utilized by JRG Re to issue letters of credit for the benefit of third-party reinsureds. This portion of our credit facility is secured by our investment securities. At December 31, 2019, the Company had $77.6 million of letters of credit issued under the secured facility.
|
•
|
A $212.5 million unsecured revolving facility to meet the working capital needs of the Company. All unpaid principal on the revolver is due at maturity. Interest accrues quarterly and is payable in arrears at LIBOR plus a margin which at December 31, 2019 was 1.375%, which is subject to change according to terms in the credit agreement. At December 31, 2019 and 2018, the Company had a drawn balance of $133.3 million and $73.3 million, respectively, outstanding on the unsecured revolver.
|
•
|
assume or permit to exist any indebtedness that is secured by any encumbrance on the capital stock of James River Group or any of its subsidiaries which is senior to the Senior Debt; or
|
•
|
issue, sell, transfer or otherwise dispose of any shares of, securities convertible into, or warrants, rights or options to subscribe for or purchase shares of, capital stock of any subsidiary.
|
10.
|
Junior Subordinated Debt
|
|
James River
Capital
Trust I
|
|
James River
Capital Trust II |
|
James River
Capital
Trust III
|
|
James River
Capital Trust IV |
|
Franklin
Holdings II (Bermuda) Capital Trust I |
|
($ in thousands)
|
||||||||
Issue date
|
May 26, 2004
|
|
December 15, 2004
|
|
June 15, 2006
|
|
December 11, 2007
|
|
January 10, 2008
|
Principal amount of Trust Preferred Securities
|
$7,000
|
|
$15,000
|
|
$20,000
|
|
$54,000
|
|
$30,000
|
Principal amount of Junior Subordinated Debt
|
$7,217
|
|
$15,464
|
|
$20,619
|
|
$55,670
|
|
$30,928
|
Carrying amount of Junior Subordinated Debt net of repurchases
|
$7,217
|
|
$15,464
|
|
$20,619
|
|
$44,827
|
|
$15,928
|
Maturity date of Junior Subordinated Debt, unless accelerated earlier
|
May 24, 2034
|
|
December 15, 2034
|
|
June 15, 2036
|
|
December 15, 2037
|
|
March 15, 2038
|
Trust common stock
|
$217
|
|
$464
|
|
$619
|
|
$1,670
|
|
$928
|
Interest rate, per annum
|
Three-Month LIBOR plus 4.0%
|
|
Three-Month LIBOR plus 3.4%
|
|
Three-Month LIBOR plus 3.0%
|
|
Three-Month LIBOR plus 3.1%
|
|
Three-Month LIBOR plus 4.0%
|
11.
|
Capital Stock
|
Date of
Declaration
|
|
Dividend per
Common Share
|
|
Payable to Shareholders
of Record on
|
|
Payment Date
|
|
Total Amount
|
||
2019
|
|
|
|
|
|
|
|
|
||
February 20, 2019
|
|
$0.30
|
|
March 11, 2019
|
|
March 29, 2019
|
|
$
|
9,146,357
|
|
April 30, 2019
|
|
$0.30
|
|
June 10, 2019
|
|
June 28, 2019
|
|
$
|
9,204,804
|
|
July 30, 2019
|
|
$0.30
|
|
September 16, 2019
|
|
September 30, 2019
|
|
$
|
9,230,801
|
|
November 5, 2019
|
|
$0.30
|
|
December 16, 2019
|
|
December 31, 2019
|
|
$
|
9,228,656
|
|
Total
|
|
$1.20
|
|
|
|
|
|
$
|
36,810,618
|
|
2018
|
|
|
|
|
|
|
|
|
||
February 22, 2018
|
|
$0.30
|
|
March 12, 2018
|
|
March 30, 2018
|
|
$
|
9,049,476
|
|
May 1, 2018
|
|
$0.30
|
|
June 11, 2018
|
|
June 29, 2018
|
|
$
|
9,066,023
|
|
August 1, 2018
|
|
$0.30
|
|
September 10, 2018
|
|
September 28, 2018
|
|
$
|
9,080,519
|
|
November 7, 2018
|
|
$0.30
|
|
December 14, 2018
|
|
December 28, 2018
|
|
$
|
9,088,542
|
|
Total
|
|
$1.20
|
|
|
|
|
|
$
|
36,284,560
|
|
2017
|
|
|
|
|
|
|
|
|
||
February 14, 2017
|
|
$0.30
|
|
March 13, 2017
|
|
March 31, 2017
|
|
$
|
8,878,147
|
|
May 2, 2017
|
|
$0.30
|
|
June 12, 2017
|
|
June 30, 2017
|
|
$
|
8,917,471
|
|
August 1, 2017
|
|
$0.30
|
|
September 11, 2017
|
|
September 29, 2017
|
|
$
|
8,943,279
|
|
November 1, 2017
|
|
$0.30
|
|
December 15, 2017
|
|
December 28, 2017
|
|
$
|
8,974,196
|
|
November 1, 2017
|
|
$0.50
|
|
December 15, 2017
|
|
December 28, 2017
|
|
$
|
14,956,994
|
|
Total
|
|
$1.70
|
|
|
|
|
|
$
|
50,670,087
|
|
12.
|
Equity Awards
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
|||||||||
Outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Beginning of year
|
1,115,324
|
|
|
$
|
29.02
|
|
|
1,479,236
|
|
|
$
|
27.81
|
|
|
2,234,699
|
|
|
$
|
22.84
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
205,244
|
|
|
$
|
42.24
|
|
Exercised
|
(459,415
|
)
|
|
$
|
26.87
|
|
|
(308,025
|
)
|
|
$
|
22.01
|
|
|
(898,218
|
)
|
|
$
|
18.53
|
|
Forfeited
|
(12,058
|
)
|
|
$
|
36.84
|
|
|
(55,887
|
)
|
|
$
|
35.69
|
|
|
(62,489
|
)
|
|
$
|
30.80
|
|
End of year
|
643,851
|
|
|
$
|
30.41
|
|
|
1,115,324
|
|
|
$
|
29.02
|
|
|
1,479,236
|
|
|
$
|
27.81
|
|
Exercisable, end of year
|
590,340
|
|
|
$
|
29.34
|
|
|
814,421
|
|
|
$
|
26.46
|
|
|
846,371
|
|
|
$
|
22.35
|
|
|
Year Ended December 31,
|
|
|
2017
|
|
Risk-free interest rate
|
1.97
|
%
|
Dividend yield
|
2.85
|
%
|
Expected share price volatility
|
27.39
|
%
|
Expected life
|
5.0 years
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
|
Shares
|
|
Weighted-
Average
Grant Date
Fair Value
|
|||||||||
Unvested, beginning of year
|
300,142
|
|
|
$
|
39.22
|
|
|
178,882
|
|
|
$
|
37.93
|
|
|
196,800
|
|
|
$
|
24.38
|
|
Granted
|
197,078
|
|
|
$
|
42.56
|
|
|
227,481
|
|
|
$
|
39.74
|
|
|
137,034
|
|
|
$
|
42.20
|
|
Vested
|
(134,407
|
)
|
|
$
|
37.99
|
|
|
(83,384
|
)
|
|
$
|
37.61
|
|
|
(132,764
|
)
|
|
$
|
24.24
|
|
Forfeited
|
(22,445
|
)
|
|
$
|
41.32
|
|
|
(22,837
|
)
|
|
$
|
40.21
|
|
|
(22,188
|
)
|
|
$
|
26.06
|
|
Unvested, end of year
|
340,368
|
|
|
$
|
41.50
|
|
|
300,142
|
|
|
$
|
39.22
|
|
|
178,882
|
|
|
$
|
37.93
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Share based compensation expense
|
$
|
7,178
|
|
|
$
|
6,228
|
|
|
$
|
7,688
|
|
U.S. tax benefit on share based compensation expense
|
$
|
872
|
|
|
$
|
716
|
|
|
$
|
2,093
|
|
13.
|
Income Taxes
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Federal income tax expense at applicable statutory rates
|
$
|
14,843
|
|
|
$
|
7,875
|
|
|
$
|
17,541
|
|
Tax-exempt investment income
|
(230
|
)
|
|
(272
|
)
|
|
(586
|
)
|
|||
Dividends received deduction
|
(307
|
)
|
|
(307
|
)
|
|
(792
|
)
|
|||
Excess tax benefits on share based compensation
|
(1,099
|
)
|
|
(567
|
)
|
|
(2,114
|
)
|
|||
Effect of tax rate reduction on deferred tax liability
|
—
|
|
|
220
|
|
|
(3,498
|
)
|
|||
Other
|
99
|
|
|
145
|
|
|
(90
|
)
|
|||
Federal income tax expense
|
$
|
13,306
|
|
|
$
|
7,094
|
|
|
$
|
10,461
|
|
U.S. state income tax expense (benefit)
|
222
|
|
|
(86
|
)
|
|
65
|
|
|||
U.S. dividend withholding tax
|
—
|
|
|
—
|
|
|
1,053
|
|
|||
Total income tax expense
|
$
|
13,528
|
|
|
$
|
7,008
|
|
|
$
|
11,579
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
|
|
||
Accrued compensation expenses
|
$
|
2,563
|
|
|
$
|
2,456
|
|
Reserve for losses and loss adjustment expenses
|
12,286
|
|
|
7,482
|
|
||
Unearned premiums
|
8,226
|
|
|
5,711
|
|
||
Share based compensation
|
1,482
|
|
|
1,352
|
|
||
Allowance for doubtful accounts
|
1,188
|
|
|
829
|
|
||
Property and equipment
|
16
|
|
|
1,909
|
|
||
Other
|
1,974
|
|
|
1,903
|
|
||
Total deferred tax assets
|
27,735
|
|
|
21,642
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets
|
7,381
|
|
|
7,461
|
|
||
Net unrealized gains
|
5,792
|
|
|
887
|
|
||
Deferred policy acquisition costs
|
4,448
|
|
|
3,491
|
|
||
Equity method investments
|
9,316
|
|
|
8,582
|
|
||
Other
|
134
|
|
|
167
|
|
||
Total deferred tax liabilities
|
27,071
|
|
|
20,588
|
|
||
Net deferred tax assets
|
$
|
664
|
|
|
$
|
1,054
|
|
14.
|
Other Operating Expenses and Other Expenses
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Amortization of policy acquisition costs
|
$
|
83,893
|
|
|
$
|
111,103
|
|
|
$
|
116,001
|
|
Other underwriting expenses of the insurance segments
|
59,351
|
|
|
63,029
|
|
|
55,662
|
|
|||
Other operating expenses of the Corporate and Other segment
|
27,664
|
|
|
26,903
|
|
|
25,330
|
|
|||
Total
|
$
|
170,908
|
|
|
$
|
201,035
|
|
|
$
|
196,993
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Employee severance
|
$
|
1,055
|
|
|
$
|
1,386
|
|
|
$
|
147
|
|
Income on leased building the Company was previously deemed to own for accounting purposes
|
—
|
|
|
(623
|
)
|
|
(248
|
)
|
|||
Legal and professional services related to secondary share offerings
|
—
|
|
|
337
|
|
|
535
|
|
|||
Other
|
—
|
|
|
—
|
|
|
105
|
|
|||
Impairment of intangible asset
|
—
|
|
|
200
|
|
|
—
|
|
|||
Total
|
$
|
1,055
|
|
|
$
|
1,300
|
|
|
$
|
539
|
|
15.
|
Employee Benefits
|
16.
|
Commitments and Contingent Liabilities
|
17.
|
Other Comprehensive Income (Loss)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Unrealized gains (losses) arising during the period, before U.S. income taxes
|
$
|
51,381
|
|
|
$
|
(23,201
|
)
|
|
$
|
11,091
|
|
U.S. income taxes
|
(3,510
|
)
|
|
483
|
|
|
(2,374
|
)
|
|||
Unrealized gains (losses) arising during the period, net of U.S. income taxes
|
47,871
|
|
|
(22,718
|
)
|
|
8,717
|
|
|||
Less reclassification adjustment:
|
|
|
|
|
|
||||||
Net realized investment gains (losses)
|
1,081
|
|
|
(554
|
)
|
|
(835
|
)
|
|||
U.S. income taxes
|
(152
|
)
|
|
39
|
|
|
333
|
|
|||
Reclassification adjustment for investment gains (losses) realized in net income
|
929
|
|
|
(515
|
)
|
|
(502
|
)
|
|||
Other comprehensive income (loss)
|
$
|
46,942
|
|
|
$
|
(22,203
|
)
|
|
$
|
9,219
|
|
18.
|
Segment Information
|
|
Excess and
Surplus Lines
|
|
Specialty
Admitted
Insurance
|
|
Casualty
Reinsurance
|
|
Corporate
and
Other
|
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
As of and for the Year Ended
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross written premiums
|
$
|
922,320
|
|
|
$
|
387,642
|
|
|
$
|
160,773
|
|
|
$
|
—
|
|
|
$
|
1,470,735
|
|
Net earned premiums
|
625,528
|
|
|
54,338
|
|
|
143,880
|
|
|
—
|
|
|
823,746
|
|
|||||
Segment revenues
|
657,501
|
|
|
61,241
|
|
|
183,700
|
|
|
4,683
|
|
|
907,125
|
|
|||||
Net investment income
|
21,358
|
|
|
3,802
|
|
|
46,325
|
|
|
4,167
|
|
|
75,652
|
|
|||||
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
10,596
|
|
|
10,596
|
|
|||||
Underwriting profit (loss) of operating segments
|
19,157
|
|
|
5,913
|
|
|
(7,161
|
)
|
|
—
|
|
|
17,909
|
|
|||||
Segment goodwill
|
181,831
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
181,831
|
|
|||||
Segment assets
|
2,481,934
|
|
|
786,433
|
|
|
1,699,473
|
|
|
56,565
|
|
|
5,024,405
|
|
As of and for the Year Ended
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross written premiums
|
$
|
656,538
|
|
|
$
|
374,346
|
|
|
$
|
135,889
|
|
|
$
|
—
|
|
|
$
|
1,166,773
|
|
Net earned premiums
|
555,684
|
|
|
55,146
|
|
|
204,568
|
|
|
—
|
|
|
815,398
|
|
|||||
Segment revenues
|
580,785
|
|
|
56,717
|
|
|
243,178
|
|
|
4,919
|
|
|
885,599
|
|
|||||
Net investment income
|
14,456
|
|
|
3,262
|
|
|
38,838
|
|
|
4,700
|
|
|
61,256
|
|
|||||
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
11,553
|
|
|
11,553
|
|
|||||
Underwriting profit of operating segments
|
42,834
|
|
|
6,972
|
|
|
5,103
|
|
|
—
|
|
|
54,909
|
|
|||||
Segment goodwill
|
181,831
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
181,831
|
|
|||||
Segment assets
|
972,111
|
|
|
633,689
|
|
|
1,453,754
|
|
|
77,222
|
|
|
3,136,776
|
|
As of and for the Year Ended
December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross written premiums
|
$
|
530,120
|
|
|
$
|
316,430
|
|
|
$
|
235,355
|
|
|
$
|
—
|
|
|
$
|
1,081,905
|
|
Net earned premiums
|
463,521
|
|
|
68,110
|
|
|
209,478
|
|
|
—
|
|
|
741,109
|
|
|||||
Segment revenues
|
493,853
|
|
|
70,366
|
|
|
240,751
|
|
|
12,655
|
|
|
817,625
|
|
|||||
Net investment income
|
15,014
|
|
|
2,532
|
|
|
31,507
|
|
|
12,066
|
|
|
61,119
|
|
|||||
Interest expense
|
—
|
|
|
—
|
|
|
—
|
|
|
8,974
|
|
|
8,974
|
|
|||||
Underwriting profit (loss) of operating segments
|
29,693
|
|
|
3,166
|
|
|
(1,765
|
)
|
|
—
|
|
|
31,094
|
|
|||||
Segment goodwill
|
181,831
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
181,831
|
|
|||||
Segment assets
|
843,486
|
|
|
439,416
|
|
|
1,379,866
|
|
|
93,927
|
|
|
2,756,695
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Underwriting profit (loss) of the operating segments:
|
|
|
|
|
|
|
|
|
|||
Excess and Surplus Lines
|
$
|
19,157
|
|
|
$
|
42,834
|
|
|
$
|
29,693
|
|
Specialty Admitted Insurance
|
5,913
|
|
|
6,972
|
|
|
3,166
|
|
|||
Casualty Reinsurance
|
(7,161
|
)
|
|
5,103
|
|
|
(1,765
|
)
|
|||
Total underwriting profit of operating segments
|
17,909
|
|
|
54,909
|
|
|
31,094
|
|
|||
Other operating expenses of the Corporate and Other segment
|
(27,664
|
)
|
|
(26,903
|
)
|
|
(25,330
|
)
|
|||
Underwriting (loss) profit
|
(9,755
|
)
|
|
28,006
|
|
|
5,764
|
|
|||
Net investment income
|
75,652
|
|
|
61,256
|
|
|
61,119
|
|
|||
Net realized and unrealized losses on investments
|
(2,919
|
)
|
|
(5,479
|
)
|
|
(1,989
|
)
|
|||
Other income
|
1,137
|
|
|
505
|
|
|
361
|
|
|||
Other expenses
|
(1,055
|
)
|
|
(1,300
|
)
|
|
(539
|
)
|
|||
Interest expense
|
(10,596
|
)
|
|
(11,553
|
)
|
|
(8,974
|
)
|
|||
Amortization of intangible assets
|
(597
|
)
|
|
(597
|
)
|
|
(597
|
)
|
|||
Income before income taxes
|
$
|
51,867
|
|
|
$
|
70,838
|
|
|
$
|
55,145
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Commercial Auto
|
$
|
405,565
|
|
|
$
|
322,126
|
|
|
$
|
247,960
|
|
Excess Casualty
|
118,954
|
|
|
66,452
|
|
|
51,160
|
|
|||
General Casualty
|
115,832
|
|
|
54,127
|
|
|
38,097
|
|
|||
Manufacturers and Contractors
|
105,096
|
|
|
79,160
|
|
|
85,719
|
|
|||
Energy
|
45,442
|
|
|
33,942
|
|
|
29,704
|
|
|||
Excess Property
|
31,606
|
|
|
16,963
|
|
|
14,447
|
|
|||
Allied Health
|
26,713
|
|
|
30,450
|
|
|
19,181
|
|
|||
Life Sciences
|
24,462
|
|
|
16,636
|
|
|
12,981
|
|
|||
Small Business
|
19,725
|
|
|
14,808
|
|
|
11,307
|
|
|||
Environmental
|
16,539
|
|
|
10,499
|
|
|
7,920
|
|
|||
Professional Liability
|
6,441
|
|
|
5,916
|
|
|
6,326
|
|
|||
Sports and Entertainment
|
4,212
|
|
|
3,685
|
|
|
3,021
|
|
|||
Medical Professionals
|
1,733
|
|
|
1,774
|
|
|
2,297
|
|
|||
Total Excess and Surplus Lines segment
|
922,320
|
|
|
656,538
|
|
|
530,120
|
|
|||
Specialty Admitted Insurance segment
|
387,642
|
|
|
374,346
|
|
|
316,430
|
|
|||
Casualty Reinsurance segment
|
160,773
|
|
|
135,889
|
|
|
235,355
|
|
|||
Total
|
$
|
1,470,735
|
|
|
$
|
1,166,773
|
|
|
$
|
1,081,905
|
|
19.
|
Fair Value Measurements
|
|
Fair Value Measurements Using
|
||||||||||||||
|
Quoted Prices
in Active
Markets for
Identical Assets
Level 1
|
|
Significant
Other
Observable
Inputs
Level 2
|
|
Significant
Unobservable
Inputs
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(in thousands)
|
||||||||||||||
Fixed maturity securities, available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||
State and municipal
|
$
|
—
|
|
|
$
|
167,101
|
|
|
$
|
—
|
|
|
$
|
167,101
|
|
Residential mortgage-backed
|
—
|
|
|
264,146
|
|
|
—
|
|
|
264,146
|
|
||||
Corporate
|
—
|
|
|
632,221
|
|
|
—
|
|
|
632,221
|
|
||||
Commercial mortgage and asset-backed
|
—
|
|
|
252,457
|
|
|
|
|
|
252,457
|
|
||||
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
115,173
|
|
|
494
|
|
|
—
|
|
|
115,667
|
|
||||
Redeemable preferred stock
|
—
|
|
|
2,034
|
|
|
—
|
|
|
2,034
|
|
||||
Total fixed maturity securities, available-for-sale
|
$
|
115,173
|
|
|
$
|
1,318,453
|
|
|
$
|
—
|
|
|
$
|
1,433,626
|
|
Equity securities:
|
|
|
|
|
|||||||||||
Preferred stock
|
$
|
—
|
|
|
$
|
62,747
|
|
|
$
|
—
|
|
|
$
|
62,747
|
|
Common stock
|
14,669
|
|
|
3,276
|
|
|
43
|
|
|
17,988
|
|
||||
Total equity securities
|
$
|
14,669
|
|
|
$
|
66,023
|
|
|
$
|
43
|
|
|
$
|
80,735
|
|
Short-term investments
|
$
|
—
|
|
|
$
|
156,925
|
|
|
$
|
—
|
|
|
$
|
156,925
|
|
|
Fair Value Measurements Using
|
||||||||||||||
|
Quoted Prices
in Active
Markets for
Identical Assets
Level 1
|
|
Significant
Other
Observable
Inputs
Level 2
|
|
Significant
Unobservable
Inputs
Level 3
|
|
Total
|
||||||||
|
|
|
(in thousands)
|
|
|
||||||||||
Fixed maturity securities, available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||
State and municipal
|
$
|
—
|
|
|
$
|
149,295
|
|
|
$
|
—
|
|
|
$
|
149,295
|
|
Residential mortgage-backed
|
—
|
|
|
204,109
|
|
|
—
|
|
|
204,109
|
|
||||
Corporate
|
—
|
|
|
524,768
|
|
|
—
|
|
|
524,768
|
|
||||
Commercial mortgage and asset-backed
|
—
|
|
|
192,797
|
|
|
4,228
|
|
|
197,025
|
|
||||
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
106,651
|
|
|
542
|
|
|
—
|
|
|
107,193
|
|
||||
Redeemable preferred stock
|
—
|
|
|
1,812
|
|
|
—
|
|
|
1,812
|
|
||||
Total fixed maturity securities, available-for-sale
|
$
|
106,651
|
|
|
$
|
1,073,323
|
|
|
$
|
4,228
|
|
|
$
|
1,184,202
|
|
Equity securities:
|
|
|
|
|
|||||||||||
Preferred stock
|
$
|
—
|
|
|
$
|
60,740
|
|
|
$
|
—
|
|
|
$
|
60,740
|
|
Common stock
|
16,674
|
|
|
757
|
|
|
214
|
|
|
17,645
|
|
||||
Total equity securities
|
$
|
16,674
|
|
|
$
|
61,497
|
|
|
$
|
214
|
|
|
$
|
78,385
|
|
Short-term investments
|
$
|
1,250
|
|
|
$
|
80,716
|
|
|
$
|
—
|
|
|
$
|
81,966
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Beginning balance
|
$
|
4,442
|
|
|
$
|
4,680
|
|
|
$
|
5,000
|
|
Transfers in to Level 3
|
3,010
|
|
|
—
|
|
|
—
|
|
|||
Transfers out of Level 3
|
(7,238
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases
|
|
|
|
214
|
|
|
—
|
|
|||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|||
Maturities and calls
|
|
|
|
(452
|
)
|
|
(320
|
)
|
|||
Amortization of discount
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total gains or losses (realized/unrealized):
|
|
|
|
|
|
||||||
Included in earnings
|
(171
|
)
|
|
—
|
|
|
—
|
|
|||
Included in other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Ending balance
|
$
|
43
|
|
|
$
|
4,442
|
|
|
$
|
4,680
|
|
|
Fair Value Measurements Using
|
||||||||||||||
|
Quoted Prices
in Active
Markets for
Identical Assets
Level 1
|
|
Significant
Other
Observable
Inputs
Level 2
|
|
Significant
Unobservable
Inputs
Level 3
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bank loan participations held-for-investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,949
|
|
|
$
|
6,949
|
|
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Bank loan participations held-for-investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
|
(in thousands)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed maturity securities, available-for-sale
|
$
|
1,433,626
|
|
|
$
|
1,433,626
|
|
|
$
|
1,184,202
|
|
|
$
|
1,184,202
|
|
Equity securities
|
80,735
|
|
|
80,735
|
|
|
78,385
|
|
|
78,385
|
|
||||
Bank loan participations held-for-investment
|
260,864
|
|
|
252,423
|
|
|
260,972
|
|
|
250,697
|
|
||||
Cash and cash equivalents
|
206,912
|
|
|
206,912
|
|
|
172,457
|
|
|
172,457
|
|
||||
Restricted cash equivalents
|
1,199,164
|
|
|
1,199,164
|
|
|
—
|
|
|
—
|
|
||||
Short-term investments
|
156,925
|
|
|
156,925
|
|
|
81,966
|
|
|
81,966
|
|
||||
Other invested assets – notes receivable
|
13,250
|
|
|
18,756
|
|
|
13,250
|
|
|
18,687
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||
Senior debt
|
158,300
|
|
|
158,043
|
|
|
118,300
|
|
|
118,317
|
|
||||
Junior subordinated debt
|
104,055
|
|
|
122,193
|
|
|
104,055
|
|
|
117,057
|
|
20.
|
Statutory Matters
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Statutory net income
|
$
|
3,586
|
|
|
$
|
6,770
|
|
|
$
|
31,881
|
|
Statutory capital and surplus
|
266,715
|
|
|
241,668
|
|
|
219,132
|
|
|||
Minimum required statutory capital and surplus
|
111,208
|
|
|
24,850
|
|
|
25,000
|
|
21.
|
Dividend Restrictions
|
22.
|
Other Related Party Transactions
|
23.
|
Subsequent Events
|
24.
|
Unaudited Selected Quarterly Financial Data
|
|
2019 Quarter
|
|
2019
|
||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Gross written premiums
|
$
|
327,334
|
|
|
$
|
380,003
|
|
|
$
|
388,228
|
|
|
$
|
375,170
|
|
|
$
|
1,470,735
|
|
Total revenues
|
214,127
|
|
|
220,374
|
|
|
231,474
|
|
|
241,150
|
|
|
907,125
|
|
|||||
Net income (loss)
|
22,728
|
|
|
20,307
|
|
|
(25,167
|
)
|
|
20,471
|
|
|
38,339
|
|
|||||
Comprehensive income (loss)
|
42,988
|
|
|
41,039
|
|
|
(15,710
|
)
|
|
16,964
|
|
|
85,281
|
|
|||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic (1)
|
$
|
0.76
|
|
|
$
|
0.67
|
|
|
$
|
(0.83
|
)
|
|
$
|
0.67
|
|
|
$
|
1.27
|
|
Diluted (1)
|
$
|
0.75
|
|
|
$
|
0.66
|
|
|
$
|
(0.83
|
)
|
|
$
|
0.67
|
|
|
$
|
1.25
|
|
|
2018 Quarter
|
|
2018
|
||||||||||||||||
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Year
|
|||||||||||
(in thousands, except per share data)
|
|||||||||||||||||||
Gross written premiums
|
$
|
298,116
|
|
|
$
|
293,378
|
|
|
$
|
279,969
|
|
|
$
|
295,310
|
|
|
$
|
1,166,773
|
|
Total revenues
|
218,344
|
|
|
228,041
|
|
|
224,692
|
|
|
214,522
|
|
|
885,599
|
|
|||||
Net income
|
15,633
|
|
|
16,984
|
|
|
19,581
|
|
|
11,632
|
|
|
63,830
|
|
|||||
Comprehensive (loss) income
|
(2,914
|
)
|
|
10,426
|
|
|
15,192
|
|
|
18,923
|
|
|
41,627
|
|
|||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic (1)
|
$
|
0.53
|
|
|
$
|
0.57
|
|
|
$
|
0.65
|
|
|
$
|
0.39
|
|
|
$
|
2.14
|
|
Diluted (1)
|
$
|
0.52
|
|
|
$
|
0.56
|
|
|
$
|
0.64
|
|
|
$
|
0.38
|
|
|
$
|
2.11
|
|
(1)
|
Since the weighted-average shares for the quarter are calculated independently of the weighted-average shares for the year, quarterly earnings per share may not total to annual earnings per share.
|
Type of Investment
|
|
Cost or
Amortized Cost
|
|
Fair
Value
|
|
Amount at
which shown
on Balance
Sheet(1)
|
||||||
|
|
(in thousands)
|
|
|
|
|
||||||
Fixed maturity securities, available-for-sale:
|
|
|
|
|
|
|
|
|
|
|||
State and municipal
|
|
$
|
159,894
|
|
|
$
|
167,101
|
|
|
$
|
167,101
|
|
Residential mortgage-backed
|
|
261,524
|
|
|
264,146
|
|
|
264,146
|
|
|||
Corporate
|
|
611,304
|
|
|
632,221
|
|
|
632,221
|
|
|||
Commercial mortgage and asset-backed
|
|
249,309
|
|
|
252,457
|
|
|
252,457
|
|
|||
U.S. Treasury securities and obligations guaranteed by the U.S. government
|
|
114,477
|
|
|
115,667
|
|
|
115,667
|
|
|||
Redeemable preferred stock
|
|
2,025
|
|
|
2,034
|
|
|
2,034
|
|
|||
Total fixed maturity securities, available-for-sale
|
|
1,398,533
|
|
|
1,433,626
|
|
|
1,433,626
|
|
|||
Equity securities, available-for-sale
|
|
|
|
|
|
|
|
|
|
|||
Preferred Stock
|
|
52,557
|
|
|
62,747
|
|
|
62,747
|
|
|||
Common Stock
|
|
20,687
|
|
|
17,988
|
|
|
17,988
|
|
|||
Total equity securities
|
|
73,244
|
|
|
80,735
|
|
|
80,735
|
|
|||
Bank loan participations, held-for-investment, net of allowance
|
|
260,864
|
|
|
252,423
|
|
|
260,864
|
|
|||
Short-term investments
|
|
156,925
|
|
|
156,925
|
|
|
156,925
|
|
|||
Other invested assets
|
|
|
|
|
|
16,741
|
|
|||||
Total invested assets
|
|
|
|
|
|
$
|
1,948,891
|
|
|
(1)
|
Differences between the amounts in this column and the amounts in the consolidated balance sheet are due to this schedule excluding investments in related parties.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
1,521
|
|
|
$
|
240
|
|
Investment in subsidiaries
|
987,221
|
|
|
882,407
|
|
||
Due from subsidiaries
|
7,371
|
|
|
5,775
|
|
||
Other assets
|
2,842
|
|
|
1,579
|
|
||
Total assets
|
$
|
998,955
|
|
|
$
|
890,001
|
|
Liabilities and shareholders’ equity
|
|
|
|||||
Liabilities:
|
|
|
|||||
Accrued expenses
|
$
|
1,592
|
|
|
$
|
2,322
|
|
Senior debt
|
143,300
|
|
|
103,300
|
|
||
Junior subordinated debt
|
15,928
|
|
|
15,928
|
|
||
Notes payable to subsidiary
|
40,000
|
|
|
40,000
|
|
||
Due to subsidiaries
|
18,822
|
|
|
18,605
|
|
||
Other liabilities
|
732
|
|
|
605
|
|
||
Total liabilities
|
220,374
|
|
|
180,760
|
|
||
Commitments and contingent liabilities
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|||||
Class A common shares
|
6
|
|
|
6
|
|
||
Additional paid-in capital
|
657,875
|
|
|
645,310
|
|
||
Retained earnings
|
89,586
|
|
|
79,753
|
|
||
Accumulated other comprehensive income (loss)
|
31,114
|
|
|
(15,828
|
)
|
||
Total shareholders’ equity
|
778,581
|
|
|
709,241
|
|
||
Total liabilities and shareholders’ equity
|
$
|
998,955
|
|
|
$
|
890,001
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Other income
|
$
|
61
|
|
|
$
|
58
|
|
|
$
|
49
|
|
Total revenues
|
61
|
|
|
58
|
|
|
49
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Other operating expenses
|
14,267
|
|
|
13,768
|
|
|
10,375
|
|
|||
Other expenses
|
—
|
|
|
337
|
|
|
640
|
|
|||
Interest expense
|
5,047
|
|
|
5,122
|
|
|
4,130
|
|
|||
Total expenses
|
19,314
|
|
|
19,227
|
|
|
15,145
|
|
|||
Loss before equity in net income of subsidiaries
|
(19,253
|
)
|
|
(19,169
|
)
|
|
(15,096
|
)
|
|||
Equity in net income of subsidiaries
|
57,592
|
|
|
82,999
|
|
|
58,662
|
|
|||
Net income
|
$
|
38,339
|
|
|
$
|
63,830
|
|
|
$
|
43,566
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Equity in other comprehensive earnings (losses) of subsidiaries
|
46,942
|
|
|
(22,203
|
)
|
|
9,219
|
|
|||
Total comprehensive income
|
$
|
85,281
|
|
|
$
|
41,627
|
|
|
$
|
52,785
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
38,339
|
|
|
$
|
63,830
|
|
|
$
|
43,566
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||||||
Provision for depreciation and amortization
|
182
|
|
|
176
|
|
|
176
|
|
|||
Share based compensation expense
|
7,178
|
|
|
6,228
|
|
|
7,688
|
|
|||
Equity in undistributed earnings of subsidiaries
|
(49,592
|
)
|
|
6,000
|
|
|
(23,662
|
)
|
|||
Changes in operating assets and liabilities
|
(2,782
|
)
|
|
(5,653
|
)
|
|
684
|
|
|||
Net cash (used in) provided by operating activities
|
(6,675
|
)
|
|
70,581
|
|
|
28,452
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Dividends from subsidiaries
|
—
|
|
|
—
|
|
|
20,000
|
|
|||
Net cash provided by investing activities
|
—
|
|
|
—
|
|
|
20,000
|
|
|||
Financing activities
|
|
|
|
|
|
||||||
Dividends paid
|
(36,720
|
)
|
|
(36,123
|
)
|
|
(50,832
|
)
|
|||
Senior debt issuance
|
60,000
|
|
|
20,000
|
|
|
10,000
|
|
|||
Senior debt repayments
|
(20,000
|
)
|
|
—
|
|
|
—
|
|
|||
Subsidiary note repayments
|
—
|
|
|
(60,000
|
)
|
|
—
|
|
|||
Debt issue costs paid
|
(711
|
)
|
|
—
|
|
|
—
|
|
|||
Issuances of common shares under equity incentive plans
|
8,286
|
|
|
5,172
|
|
|
1,708
|
|
|||
Common share repurchases
|
(2,899
|
)
|
|
(2,239
|
)
|
|
(9,448
|
)
|
|||
Net cash provided by (used in) financing activities
|
7,956
|
|
|
(73,190
|
)
|
|
(48,572
|
)
|
|||
Change in cash and cash equivalents
|
1,281
|
|
|
(2,609
|
)
|
|
(120
|
)
|
|||
Cash and cash equivalents at beginning of period
|
240
|
|
|
2,849
|
|
|
2,969
|
|
|||
Cash and cash equivalents at end of period
|
$
|
1,521
|
|
|
$
|
240
|
|
|
$
|
2,849
|
|
Supplemental information
|
|
|
|
|
|
||||||
Interest paid
|
$
|
5,710
|
|
|
$
|
5,052
|
|
|
$
|
4,612
|
|
1.
|
Accounting Policies
|
|
Deferred
Policy Acquisition Costs |
|
Reserve
for Losses and Loss Adjustment Expenses |
|
Unearned
Premiums |
|
Net
Earned Premiums |
|
Net
Investment Income |
|
Losses
and Loss Adjustment Expenses |
|
Amortization
of Policy Acquisition Costs |
|
Other
Operating Expenses |
|
Net
Written Premiums |
||||||||||||||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Excess and Surplus Lines
|
$
|
24,428
|
|
|
$
|
1,245,581
|
|
|
$
|
267,924
|
|
|
$
|
625,528
|
|
|
$
|
21,358
|
|
|
$
|
528,133
|
|
|
$
|
49,720
|
|
|
$
|
87,326
|
|
|
$
|
685,814
|
|
Specialty Admitted
|
(2,902
|
)
|
|
511,027
|
|
|
115,606
|
|
|
54,338
|
|
|
3,802
|
|
|
34,860
|
|
|
(3,560
|
)
|
|
13,986
|
|
|
58,637
|
|
|||||||||
Casualty Reinsurance
|
40,480
|
|
|
288,898
|
|
|
140,847
|
|
|
143,880
|
|
|
46,325
|
|
|
109,109
|
|
|
37,733
|
|
|
41,932
|
|
|
151,699
|
|
|||||||||
Corporate and Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,167
|
|
|
—
|
|
|
—
|
|
|
27,664
|
|
|
—
|
|
|||||||||
Total
|
$
|
62,006
|
|
|
$
|
2,045,506
|
|
|
$
|
524,377
|
|
|
$
|
823,746
|
|
|
$
|
75,652
|
|
|
$
|
672,102
|
|
|
$
|
83,893
|
|
|
$
|
170,908
|
|
|
$
|
896,150
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Excess and Surplus Lines
|
$
|
16,736
|
|
|
$
|
960,562
|
|
|
$
|
175,231
|
|
|
$
|
555,684
|
|
|
$
|
14,456
|
|
|
$
|
437,904
|
|
|
$
|
48,299
|
|
|
$
|
88,865
|
|
|
$
|
571,098
|
|
Specialty Admitted
|
(1,829
|
)
|
|
426,315
|
|
|
84,659
|
|
|
55,146
|
|
|
3,262
|
|
|
32,623
|
|
|
(1,792
|
)
|
|
15,551
|
|
|
55,840
|
|
|||||||||
Casualty Reinsurance
|
39,543
|
|
|
274,582
|
|
|
126,583
|
|
|
204,568
|
|
|
38,838
|
|
|
129,749
|
|
|
64,596
|
|
|
69,716
|
|
|
135,734
|
|
|||||||||
Corporate and Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,700
|
|
|
—
|
|
|
—
|
|
|
26,903
|
|
|
—
|
|
|||||||||
Total
|
$
|
54,450
|
|
|
$
|
1,661,459
|
|
|
$
|
386,473
|
|
|
$
|
815,398
|
|
|
$
|
61,256
|
|
|
$
|
600,276
|
|
|
$
|
111,103
|
|
|
$
|
201,035
|
|
|
$
|
762,672
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Excess and Surplus Lines
|
$
|
17,050
|
|
|
$
|
759,043
|
|
|
$
|
149,047
|
|
|
$
|
463,521
|
|
|
$
|
15,014
|
|
|
$
|
371,717
|
|
|
$
|
45,158
|
|
|
$
|
79,136
|
|
|
$
|
469,891
|
|
Specialty Admitted
|
(725
|
)
|
|
271,446
|
|
|
73,649
|
|
|
68,110
|
|
|
2,532
|
|
|
44,863
|
|
|
5,605
|
|
|
20,081
|
|
|
60,957
|
|
|||||||||
Casualty Reinsurance
|
56,040
|
|
|
261,860
|
|
|
195,418
|
|
|
209,478
|
|
|
31,507
|
|
|
138,797
|
|
|
65,238
|
|
|
72,446
|
|
|
235,778
|
|
|||||||||
Corporate and Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,066
|
|
|
—
|
|
|
—
|
|
|
25,330
|
|
|
—
|
|
|||||||||
Total
|
$
|
72,365
|
|
|
$
|
1,292,349
|
|
|
$
|
418,114
|
|
|
$
|
741,109
|
|
|
$
|
61,119
|
|
|
$
|
555,377
|
|
|
$
|
116,001
|
|
|
$
|
196,993
|
|
|
$
|
766,626
|
|
|
Direct
Amount
|
|
Ceded
to Other
Companies
|
|
Assumed
from Other
Companies
|
|
Net
Amount
|
|
Percentage
of Amount
Assumed
to Net
|
|||||||||
|
(in thousands)
|
|||||||||||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Excess and Surplus Lines Written Premiums
|
$
|
922,320
|
|
|
$
|
236,506
|
|
|
$
|
—
|
|
|
$
|
685,814
|
|
|
—
|
|
Specialty Admitted Written Premiums
|
383,628
|
|
|
329,005
|
|
|
4,014
|
|
|
58,637
|
|
|
6.8
|
%
|
||||
Casualty Reinsurance Written Premiums
|
—
|
|
|
9,074
|
|
|
160,773
|
|
|
151,699
|
|
|
106.0
|
%
|
||||
Total Written Premiums
|
$
|
1,305,948
|
|
|
$
|
574,585
|
|
|
$
|
164,787
|
|
|
$
|
896,150
|
|
|
18.4
|
%
|
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Excess and Surplus Lines Written Premiums
|
$
|
656,538
|
|
|
$
|
85,440
|
|
|
$
|
—
|
|
|
$
|
571,098
|
|
|
—
|
|
Specialty Admitted Written Premiums
|
370,684
|
|
|
318,506
|
|
|
3,662
|
|
|
55,840
|
|
|
6.6
|
%
|
||||
Casualty Reinsurance Written Premiums
|
—
|
|
|
155
|
|
|
135,889
|
|
|
135,734
|
|
|
100.1
|
%
|
||||
Total Written Premiums
|
$
|
1,027,222
|
|
|
$
|
404,101
|
|
|
$
|
139,551
|
|
|
$
|
762,672
|
|
|
18.3
|
%
|
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Excess and Surplus Lines Written Premiums
|
$
|
530,077
|
|
|
$
|
60,229
|
|
|
$
|
43
|
|
|
$
|
469,891
|
|
|
—
|
|
Specialty Admitted Written Premiums
|
313,642
|
|
|
255,473
|
|
|
2,788
|
|
|
60,957
|
|
|
4.6
|
%
|
||||
Casualty Reinsurance Written Premiums
|
—
|
|
|
(423
|
)
|
|
235,355
|
|
|
235,778
|
|
|
99.8
|
%
|
||||
Total Written Premiums
|
$
|
843,719
|
|
|
$
|
315,279
|
|
|
$
|
238,186
|
|
|
$
|
766,626
|
|
|
31.1
|
%
|
|
Balance
at Beginning
of Period
|
|
Additions
Amounts
Charged to
Expense
|
|
Deductions
Amounts
Written Off
or Disposals
|
|
Balance
at End
of Period
|
||||||||
|
(in thousands)
|
||||||||||||||
Year Ended December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowance for Doubtful Accounts
|
$
|
3,948
|
|
|
$
|
2,523
|
|
|
$
|
(812
|
)
|
|
$
|
5,659
|
|
Allowance for Credit Losses on Bank Loans
|
—
|
|
|
8,898
|
|
|
(1,717
|
)
|
|
7,181
|
|
||||
Total
|
$
|
3,948
|
|
|
$
|
11,421
|
|
|
$
|
(2,529
|
)
|
|
$
|
12,840
|
|
Year Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowance for Doubtful Accounts
|
$
|
2,757
|
|
|
$
|
1,504
|
|
|
$
|
(313
|
)
|
|
$
|
3,948
|
|
Allowance for Credit Losses on Bank Loans
|
3,219
|
|
|
950
|
|
|
(4,169
|
)
|
|
—
|
|
||||
Total
|
$
|
5,976
|
|
|
$
|
2,454
|
|
|
$
|
(4,482
|
)
|
|
$
|
3,948
|
|
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allowance for Doubtful Accounts
|
$
|
2,136
|
|
|
$
|
1,029
|
|
|
$
|
(408
|
)
|
|
$
|
2,757
|
|
Allowance for Credit Losses on Bank Loans
|
943
|
|
|
2,424
|
|
|
(148
|
)
|
|
3,219
|
|
||||
Total
|
$
|
3,079
|
|
|
$
|
3,453
|
|
|
$
|
(556
|
)
|
|
$
|
5,976
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(in thousands)
|
||||||||||
Deferred policy acquisition costs
|
$
|
62,006
|
|
|
$
|
54,450
|
|
|
$
|
72,365
|
|
Reserve for losses and loss adjustment expenses
|
2,045,506
|
|
|
1,661,459
|
|
|
1,292,349
|
|
|||
Unearned premiums
|
524,377
|
|
|
386,473
|
|
|
418,114
|
|
|||
Net earned premiums
|
823,746
|
|
|
815,398
|
|
|
741,109
|
|
|||
Net investment income
|
75,652
|
|
|
61,256
|
|
|
61,119
|
|
|||
Losses and loss adjustment expenses incurred:
|
|
|
|
|
|
||||||
Current year
|
603,094
|
|
|
582,604
|
|
|
533,905
|
|
|||
Prior year
|
69,008
|
|
|
17,672
|
|
|
21,472
|
|
|||
Total losses and loss adjustment expenses incurred
|
672,102
|
|
|
600,276
|
|
|
555,377
|
|
|||
Amortization of policy acquisition costs
|
83,893
|
|
|
111,103
|
|
|
116,001
|
|
|||
Paid losses and loss adjustment expenses, net of reinsurance
|
488,729
|
|
|
396,013
|
|
|
326,680
|
|
|||
Net written premiums
|
896,150
|
|
|
762,672
|
|
|
766,626
|
|
•
|
the name and address of the shareholder who intends to make the nomination and the name and address of the person or persons to be nominated or the nature of the business to be proposed;
|
•
|
a representation that the shareholder is a holder of record of our share capital entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons or to introduce the business specified in the notice;
|
•
|
if applicable, a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons, naming such person or persons, pursuant to which the nomination is to be made by the shareholder;
|
•
|
such other information regarding each nominee to be proposed by such shareholder as would be required to be included in a proxy statement filed under the SEC’s proxy rules if the nominee had been nominated, or intended to be nominated, by the board of directors;
|
•
|
a brief description of any business desired to be brought before the general meeting, the text of the proposal or business, the reasons for conducting such business at the general meeting and any material interest in such business of such shareholder;
|
•
|
if applicable, the consent of each nominee to serve as a director if elected; and such other information that the board of directors may request in its discretion;
|
•
|
the class and number of shares that are held of record or beneficially owned by the shareholder;
|
•
|
a description of any agreement, arrangement or understanding in order to create or mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of the shareholder;
|
•
|
the principal amount of and description of indebtedness of the Company or any of its subsidiaries that is held by the shareholder;
|
•
|
a representation as to whether the shareholder intends or is part of a group that intends to deliver a proxy statement to shareholders or to otherwise solicit proxies from other shareholders; and
|
•
|
such other information that the board of directors may request in its discretion.
|
Subsidiary
|
|
Jurisdiction of Incorporation or Formation
|
Carolina Re, Ltd.
|
|
Bermuda
|
Falls Lake Fire and Casualty Company
|
|
California
|
Falls Lake Insurance Management Company, Inc.
|
|
Delaware
|
Falls Lake National Insurance Company
|
|
Ohio
|
Franklin Holdings II (Bermuda) Capital Trust I
|
|
Delaware
|
James River Capital Trust I
|
|
Delaware
|
James River Capital Trust II
|
|
Delaware
|
James River Capital Trust III
|
|
Delaware
|
James River Capital Trust IV
|
|
Delaware
|
James River Casualty Company
|
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Virginia
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James River Group Holdings UK Limited
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United Kingdom
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James River Group, Inc.
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Delaware
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James River Insurance Company
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Ohio
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James River Management Company, Inc.
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Delaware
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James River Richmond Real Estate, LLC
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Virginia
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JRG Reinsurance Company, Ltd.
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Bermuda
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Potomac Risk Services, Inc. (d/b/a James River TPA Services)
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Virginia
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Stonewood Insurance Company
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North Carolina
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(1)
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Registration Statement (Form S-8 Nos. 333-200995, 333-217743, and 333-231200) of James River Group Holdings, Ltd.; and
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(2)
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Registration Statement (Form S-3 No. 333-208903) of James River Group Holdings, Ltd.;
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1.
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I have reviewed this annual report on Form 10-K of James River Group Holdings, Ltd.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ J. Adam Abram
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J. Adam Abram
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Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this annual report on Form 10-K of James River Group Holdings, Ltd.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Sarah C. Doran
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Sarah C. Doran
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Chief Financial Officer
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(Principal Financial Officer)
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ J. Adam Abram
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J. Adam Abram
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Chief Executive Officer
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(Principal Executive Officer)
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February 27, 2020
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/s/ Sarah C. Doran
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Sarah C. Doran
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Chief Financial Officer
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(Principal Financial Officer)
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February 27, 2020
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