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jrvr-20220509
0001620459false00016204592022-05-092022-05-09

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):May 9, 2022
JAMES RIVER GROUP HOLDINGS, LTD.
(Exact name of registrant as specified in its charter)
Bermuda001-3677798-0585280
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
Wellesley House, 2nd Floor, 90 Pitts Bay Road, Pembroke HM08, Bermuda
(Address of principal executive offices)
(Zip Code)
 (441) 278-4580
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
☐    Written Communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12)
☐    Pre-commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b))
☐    Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, par value $0.0002 per shareJRVRNASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging Growth Company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02Results of Operations and Financial Condition.
On May 9, 2022, James River Group Holdings, Ltd. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K (this “Form 8-K”).
The information in this Item 2.02 and in Exhibit 99.1 furnished herewith shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act unless specifically stated by the Company.
Item 8.01Other Events.
On May 9, 2022, the Company announced that its Board of Directors declared a cash dividend of $0.05 per common share of the Company to be paid on June 30, 2022 to shareholders of record on June 13, 2022.
As previously disclosed, Jerry R. Masters retired from the Company’s Board of Directors (the “Board”). The Board appointed Thomas L. Brown to serve as Chairman of the Audit Committee of the Board and Ollie L. Sherman, Jr. to serve as lead independent director of the Board, roles held by Mr. Masters prior to his retirement. Each of Messrs. Brown and Sherman are independent directors under the rules of the NASDAQ Stock Market, and Audit Committee Financial Experts as such term is defined under Item 407(d)(5) of Regulation S-K. Mr. Brown has served on the Board since October 2021 and Mr. Sherman has served on the Board since May 2016.
Item 9.01Financial Statements and Exhibits.
(d)    Exhibits

The following Exhibit is furnished as a part of this Form 8-K:
Exhibit No.
Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
JAMES RIVER GROUP HOLDINGS, LTD.
Dated: May 9, 2022
By: /s/ Sarah C. Doran
 Sarah C. Doran
 Chief Financial Officer
Document
Exhibit 99.1

    
https://cdn.kscope.io/2f7735135d368421790f9d21636232ae-jrghlogo.jpg

JAMES RIVER ANNOUNCES FIRST QUARTER
2022 RESULTS

▪First quarter 2022 net income available to common shareholders of $9.3 million ($0.25 per diluted share). Adjusted net operating income1 of $13.9 million ($0.37 per diluted share).
▪The Group combined ratio of 97.4% was elevated by 6.1 percentage points associated with the previously announced Casualty Reinsurance loss portfolio transfer ("Retrocession Transaction"). The Company's largest segment, Excess and Surplus Lines ("E&S"), produced a combined ratio of 83.7%.
▪Growth in E&S gross written premium of 12.6% and an increase in E&S renewal pricing of 8.4%.
▪Group expense ratio improved to 26.0% from 28.9% in the first quarter of 2021.
▪Net investment income increased 7.8% versus the prior year quarter due to strong results from renewable energy investments.

Pembroke, Bermuda, May 9, 2022 - James River Group Holdings, Ltd. ("James River" or the "Company") (NASDAQ: JRVR) today reported first quarter 2022 net income available to common shareholders of $9.3 million ($0.25 per diluted share), compared to a net loss of $103.5 million ($3.37 per diluted share) for the first quarter of 2021. Adjusted net operating income1 for the first quarter of 2022 was $13.9 million ($0.37 per diluted share), compared to an adjusted net operating loss1 of $108.8 million ($3.54 per diluted share) for the same period in 2021.
1 Adjusted net operating income (loss) is a non-GAAP financial measure. See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” at the end of this press release.


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Wellesley House, 90 Pitts Bay Road, Pembroke HM 08, Bermuda
Mailing address l P.O. Box 1502, Hamilton HM FX, Bermuda
Tel 441.278.4580 l Fax 441.278.4588

JRVR Announces First Quarter 2022 Results
Page 2
May 9, 2022
Earnings (Loss) Per Diluted ShareThree Months Ended
March 31,
20222021
Net Income (Loss)$0.25 $(3.37)
Adjusted Net Operating Income (Loss)1
$0.37 $(3.54)
1 See "Reconciliation of Non-GAAP Measures" below.

Frank D'Orazio, the Company’s Chief Executive Officer, commented, “The first quarter represented a strong start to the year, highlighted by continued attractive market conditions for our E&S segment allowing us to produce broad-based growth in an attractive underwriting environment. Our E&S renewal pricing reflected the twenty-first consecutive quarter of positive rate, compounding to 52% over that period. During the quarter, we also grew fee income in our Specialty Admitted segment by 8%, while premium in our workers' compensation unit and Casualty Reinsurance segment declined as we remain disciplined in our plan to deliver underwriting profitability.”
First Quarter 2022 Operating Results
•Gross written premium of $359.9 million, consisting of the following:
Three Months Ended
March 31,
($ in thousands)20222021% Change
Excess and Surplus Lines$204,282 $181,358 13 %
Specialty Admitted Insurance125,710 127,036 (1)%
Casualty Reinsurance29,944 64,861 (54)%
$359,936 $373,255 (4)%

•Net written premium of $175.9 million, consisting of the following:
Three Months Ended
March 31,
($ in thousands)20222021% Change
Excess and Surplus Lines$125,710 $108,433 16 %
Specialty Admitted Insurance20,205 22,005 (8)%
Casualty Reinsurance29,944 44,161 (32)%
$175,859 $174,599 1 %

•Net earned premium of $189.8 million, consisting of the following:
Three Months Ended
March 31,
($ in thousands)20222021% Change
Excess and Surplus Lines$131,301 $113,708 15 %
Specialty Admitted Insurance19,318 16,357 18 %
Casualty Reinsurance39,205 30,528 28 %
$189,824 $160,593 18 %

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JRVR Announces First Quarter 2022 Results
Page 3
May 9, 2022
•E&S gross written premium increased 12.6% compared to the prior year quarter, with eleven out of thirteen underwriting divisions experiencing growth and ten of the underwriting divisions reporting double-digit growth.
•Gross written premium for the Specialty Admitted Insurance segment declined 1.0% from the prior year due to shrinkage in both our individual risk workers' compensation business and our large workers' compensation fronted program. Taken together, gross written premium in these two areas declined 12.6%, while remaining segment premium increased 6.5%.
•Gross written premium in the Casualty Reinsurance segment decreased 53.8% from the prior year quarter primarily driven by the non-renewal of several treaties. The decline in gross written premium is consistent with our previously announced strategy for this segment. Since the earning patterns of the business can extend over multiple years, changes in net earned premium for this segment will lag the expected decline in gross and net written premium.
•Pre-tax favorable (unfavorable) reserve development by segment was as follows:
Three Months Ended
March 31,
($ in thousands)20222021
Excess and Surplus Lines$59 $(168,651)
Specialty Admitted Insurance(63)1,000 
Casualty Reinsurance(6,800)(2,483)
$(6,804)$(170,134)
•As previously disclosed, the prior year reserve development in the quarter included $6.8 million (representing a 3.6 percentage point increase to the Company's loss ratio) associated with the Retrocession Transaction. Net reserve development on the remaining E&S and Specialty Admitted business was de minimis during the quarter.
•Separately, as previously disclosed, the Retrocession Transaction resulted in $4.7 million of additional current accident year losses in the Casualty Reinsurance segment (representing a 2.5 percentage point increase to the Company's loss ratio). As part of the Retrocession Transaction, the Company did not recognize any earnings on the portfolio during the first quarter, resulting in the additional current accident year losses.
•Gross fee income was as follows:
Three Months Ended
March 31,
($ in thousands)20222021% Change
Specialty Admitted Insurance$5,558 $5,128 8 %
•The consolidated expense ratio was 26.0% for the first quarter of 2022, down from 28.9% in the prior year first quarter. The expense ratio benefited from 18.2% growth in net earned premium that was well in excess of growth in underwriting expenses as we continue to manage costs effectively.

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JRVR Announces First Quarter 2022 Results
Page 4
May 9, 2022
Investment Results
Net investment income for the first quarter of 2022 was $16.3 million, an increase of 7.8% compared to $15.1 million for the same period in 2021.
The Company’s net investment income consisted of the following:
Three Months Ended
March 31,
($ in thousands)20222021% Change
Renewable Energy Investments$2,682 $(681)NM
Other Private Investments217 1,015 (79)%
All Other Net Investment Income13,368 14,755(9)%
Total Net Investment Income$16,267 $15,089 8 %
The Company’s annualized gross investment yield on average fixed maturity, bank loan and equity securities for the three months ended March 31, 2022 was 3.0% (versus 3.2% for the three months ended March 31, 2021). The investment yield decreased primarily as a result of lower market yields on fixed maturity securities and bank loans.
Net realized and unrealized losses on investments of $5.0 million for the three months ended March 31, 2022 compares to net realized and unrealized gains on investments of $6.3 million in the prior year quarter.
Taxes
Generally the Company's effective tax rate fluctuates from period to period based on the relative mix of income reported by country and the respective tax rates imposed by each tax jurisdiction. The tax rate for the three months ended March 31, 2022 was 24.6%. The rate was impacted by both geographical mix of income and discreet tax items for the quarter primarily related to tax expenses associated with vested stock compensation.
Tangible Equity
Tangible equity2 of $574.8 million at March 31, 2022 increased 13.3% compared to tangible equity of $507.5 million at December 31, 2021, as net income available to common shareholders and the proceeds of the Series A preferred shares issued during the quarter were partially offset by an increase in unrealized losses in the Company's fixed maturity portfolio.
Capital Management
The Company announced that its Board of Directors declared a cash dividend of $0.05 per common share. This dividend is payable on Thursday, June 30, 2022 to all shareholders of record on Monday, June 13, 2022.
2 Tangible equity is a non-GAAP financial measure. See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” at the end of this press release.
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JRVR Announces First Quarter 2022 Results
Page 5
May 9, 2022
Conference Call
James River will hold a conference call to discuss its third quarter results tomorrow, May 10, 2022 at 8:30 a.m. Eastern Time. Investors may access the conference call by dialing (877) 930-8055, Conference ID# 7872437, or via the internet by visiting www.jrgh.net and clicking on the “Investor Relations” link. Please access the website at least 15 minutes early to register and download any necessary audio software. A replay of the call will be available until 11:00 a.m. (Eastern Time) on June 9, 2022 and can be accessed by dialing (855) 859-2056 or by visiting the company website.
Forward-Looking Statements
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, such forward-looking statements may be identified by terms such as believe, expect, seek, may, will, should, intend, project, anticipate, plan, estimate, guidance or similar words. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Although it is not possible to identify all of these risks and uncertainties, they include, among others, the following: 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 downgrade in the financial strength rating of our regulated insurance subsidiaries announced on May 7, 2021, or further downgrades, impacting our ability to attract and retain insurance and reinsurance business that our subsidiaries write, our competitive position, and our financial condition; 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; the impact of a persistent high inflationary environment on our reserves, the values of our investment returns, and on our compensation expenses; 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; 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; 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 a former customer with whom we have an indemnification arrangement failing to perform their reimbursement obligations; inadequacy of premiums we charge to compensate us for our losses incurred; 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, such as natural disasters and terrorist acts, which
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JRVR Announces First Quarter 2022 Results
Page 6
May 9, 2022
substantially exceed our expectations and/or exceed the amount of reinsurance we have purchased to protect us from such events; the effects of the COVID-19 pandemic and associated government actions on our operations and financial performance; 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; the potential impact of internal or external fraud, operational errors, systems malfunctions or cyber security incidents; our ability to manage our growth effectively; failure to maintain effective internal controls in accordance with Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”); and changes in our financial condition, regulations or other factors that may restrict our subsidiaries’ ability to pay us dividends. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those in the forward-looking statements, is contained in our filings with the U.S. Securities and Exchange Commission ("SEC"), including our most recently filed Annual Report on Form 10-K. These forward-looking statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
Non-GAAP Financial Measures
In presenting James River Group Holdings, Ltd.’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (“GAAP”). Such measures, including underwriting profit (loss), adjusted net operating income (loss), tangible equity, tangible common equity, adjusted net operating return on average tangible equity (which is calculated as annualized adjusted net operating income (loss) divided by average tangible equity), and adjusted net operating return on average tangible common equity (which is calculated as annualized adjusted net operating income (loss) divided by average tangible common equity), are referred to as non-GAAP measures. These non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those measures determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included at the end of this press release.
About James River Group Holdings, Ltd.
James River Group Holdings, Ltd. is a Bermuda-based insurance holding company that owns and operates a group of specialty insurance and reinsurance companies. The Company operates in three specialty property-casualty insurance and reinsurance segments: Excess and Surplus Lines, Specialty Admitted Insurance and Casualty Reinsurance. Each of the Company’s regulated insurance subsidiaries are rated “A-” (Excellent) by A.M. Best Company.
Visit James River Group Holdings, Ltd. on the web at www.jrgh.net
For more information contact:
Brett Shirreffs
SVP, Finance, Investments and Investor Relations
InvestorRelations@jrgh.net
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JRVR Announces First Quarter 2022 Results
Page 7
May 9, 2022
James River Group Holdings, Ltd. and Subsidiaries
Condensed Consolidated Balance Sheet Data
(Unaudited)
($ in thousands, except for share data) 
March 31, 2022December 31, 2021
ASSETS
Invested assets:
Fixed maturity securities, available-for-sale, at fair value$1,662,278 $1,677,561 
Equity securities, at fair value102,973 108,410 
Bank loan participations, at fair value
159,084 156,043 
Short-term investments147,334 136,563 
Other invested assets53,298 51,908 
Total invested assets2,124,967 2,130,485 
Cash and cash equivalents270,195 190,123 
Restricted cash equivalents (a)102,009 102,005 
Accrued investment income11,730 11,037 
Premiums receivable and agents’ balances, net367,991 393,967 
Reinsurance recoverable on unpaid losses, net1,617,884 1,348,628 
Reinsurance recoverable on paid losses87,595 82,235 
Deferred policy acquisition costs66,028 68,526 
Goodwill and intangible assets217,779 217,870 
Other assets401,040 403,674 
Total assets$5,267,218 $4,948,550 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Reserve for losses and loss adjustment expenses$2,750,188 $2,748,473 
Unearned premiums706,770 727,552 
Funds held (a)371,853 97,360 
Senior debt222,300 262,300 
Junior subordinated debt104,055 104,055 
Accrued expenses48,229 57,920 
Other liabilities271,248 225,528 
Total liabilities4,474,643 4,223,188 
Series A redeemable preferred shares144,898 0 
Total shareholders’ equity647,677 725,362 
Total liabilities, Series A redeemable preferred shares, and shareholders’ equity$5,267,218 $4,948,550 
Tangible equity (b)$574,796 $507,492 
Tangible equity per share outstanding (b)$13.34 $13.58 
Shareholders' equity per share outstanding
$17.30 $19.41 
Common shares outstanding37,448,314 37,373,066 
(a) Restricted cash equivalents and the funds held liability includes funds posted by the Company to a trust account for the benefit of a third party administrator handling the claims on the Rasier commercial auto policies in run-off. Such funds held in trust secure the Company's obligations to reimburse the administrator for claims payments, and are primarily sourced from the collateral posted to the Company by Rasier and its affiliates to support their obligations under the indemnity agreements and the loss portfolio transfer reinsurance agreement with the Company. The funds held liability also includes a notional funds withheld account balance related to the Retrocession Transaction that will be reduced on a quarterly basis by paid losses on the subject business.
(b) See “Reconciliation of Non-GAAP Measures”
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JRVR Announces First Quarter 2022 Results
Page 8
May 9, 2022
James River Group Holdings, Ltd. and Subsidiaries
Condensed Consolidated (Loss) Income Statement Data
(Unaudited)
Three Months Ended
March 31,
($ in thousands, except for share data)20222021
REVENUES
Gross written premiums$359,936 $373,255 
Net written premiums175,859 174,599 
Net earned premiums189,824 160,593 
Net investment income16,267 15,089 
Net realized and unrealized (losses) gains on investments(5,010)6,272 
Other income867 1,026 
Total revenues201,948 182,980 
EXPENSES
Losses and loss adjustment expenses135,608 273,500 
Other operating expenses50,061 47,381 
Other expenses368 621 
Interest expense2,292 2,216 
Amortization of intangible assets91 91 
Total expenses188,420 323,809 
Income (loss) before taxes13,528 (140,829)
Income tax expense (benefit)3,323 (37,369)
NET INCOME (LOSS)$10,205 $(103,460)
Dividends on Series A preferred shares(875)0 
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS$9,330 $(103,460)
ADJUSTED NET OPERATING INCOME (LOSS) (a)$13,867 $(108,795)
INCOME (LOSS) PER COMMON SHARE
Basic
$0.25 $(3.37)
Diluted
$0.25 $(3.37)
ADJUSTED NET OPERATING INCOME (LOSS) PER COMMON SHARE
Basic
$0.37 $(3.54)
Diluted$0.37 $(3.54)
Weighted-average common shares outstanding:
Basic
37,406,913 30,713,986 
Diluted37,554,662 30,713,986 
Cash dividends declared per common share$0.05 $0.30 
Ratios:
Loss ratio71.4 %170.3 %
Expense ratio (b)26.0 %28.9 %
Combined ratio97.4 %199.2 %
Accident year loss ratio67.9 %64.4 %
(a) See "Reconciliation of Non-GAAP Measures".
(b) Calculated with a numerator comprising other operating expenses less gross fee income (in specific instances when the Company is not retaining insurance risk) included in “Other income” in our Condensed Consolidated Income Statements of $800,000 and $927,000 for the three months ended March 31, 2022 and 2021, respectively, and a denominator of net earned premiums.
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JRVR Announces First Quarter 2022 Results
Page 9
May 9, 2022


James River Group Holdings, Ltd. and Subsidiaries
Segment Results

EXCESS AND SURPLUS LINES
Three Months Ended
March 31,
($ in thousands)20222021% Change
Gross written premiums$204,282 $181,358 12.6 %
Net written premiums$125,710 $108,433 15.9 %
Net earned premiums$131,301 $113,708 15.5 %
Losses and loss adjustment expenses(84,925)(241,742)(64.9)%
Underwriting expenses(24,919)(22,912)8.8 %
Underwriting profit (loss) (a)$21,457 $(150,946)— 
Ratios:
Loss ratio64.7 %212.6 %
Expense ratio19.0 %20.1 %
Combined ratio83.7 %232.7 %
Accident year loss ratio64.7 %64.3 %
(a) See "Reconciliation of Non-GAAP Measures".

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JRVR Announces First Quarter 2022 Results
Page 10
May 9, 2022
SPECIALTY ADMITTED INSURANCE
Three Months Ended
March 31,
($ in thousands)20222021% Change
Gross written premiums$125,710 $127,036 (1.0)%
Net written premiums$20,205 $22,005 (8.2)%
Net earned premiums$19,318 $16,357 18.1 %
Losses and loss adjustment expenses(15,435)(10,742)43.7 %
Underwriting expenses(3,674)(4,349)(15.5)%
Underwriting (loss) profit (a), (b)$209 $1,266 (83.5)%
Ratios:
Loss ratio79.9 %65.7 %
Expense ratio19.0 %26.6 %
Combined ratio98.9 %92.3 %
Accident year loss ratio79.6 %71.8 %
(a) See "Reconciliation of Non-GAAP Measures".
(b) Underwriting results include gross fee income of $5.6 million and $5.1 million for the three months ended March 31, 2022 and 2021, respectively.

CASUALTY REINSURANCE
Three Months Ended
March 31,
($ in thousands)20222021% Change
Gross written premiums$29,944 $64,861 (53.8)%
Net written premiums$29,944 $44,161 (32.2)%
Net earned premiums$39,205 $30,528 28.4 %
Losses and loss adjustment expenses(35,248)(21,016)67.7 %
Underwriting expenses(12,794)(11,137)14.9 %
Underwriting loss (a)$(8,837)$(1,625)— 
Ratios:
Loss ratio89.9 %68.8 %
Expense ratio32.6 %36.5 %
Combined ratio122.5 %105.3 %
Accident year loss ratio72.6 %60.7 %
(a) See "Reconciliation of Non-GAAP Measures".

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JRVR Announces First Quarter 2022 Results
Page 11
November 9, 2021

RECONCILIATION OF NON-GAAP MEASURES

Underwriting Profit (Loss)

The following table reconciles the underwriting profit (loss) by individual operating segment and for the entire Company to consolidated income (loss) before taxes. We believe that these measures are useful to investors in evaluating the performance of our Company and its operating segments because our objective is to consistently earn underwriting profits. We evaluate the performance of our operating segments and allocate resources based primarily on underwriting profit (loss) of operating segments. Our definition of underwriting profit (loss) of operating segments and underwriting profit (loss) may not be comparable to that of other companies.
Three Months Ended
March 31,
($ in thousands)20222021
Underwriting profit (loss) of the operating segments:
Excess and Surplus Lines
$21,457 $(150,946)
Specialty Admitted Insurance
209 1,266 
Casualty Reinsurance
(8,837)(1,625)
Total underwriting profit (loss) of operating segments12,829 (151,305)
Other operating expenses of the Corporate and Other segment(7,874)(8,056)
Underwriting profit (loss) (a)4,955 (159,361)
Net investment income16,267 15,089 
Net realized and unrealized (losses) gains on investments(5,010)6,272 
Other expense(301)(522)
Interest expense(2,292)(2,216)
Amortization of intangible assets(91)(91)
Consolidated income (loss) before taxes$13,528 $(140,829)
(a) Included in underwriting results for the three months ended March 31, 2022 and 2021 is gross fee income of $5.6 million and $5.1 million, respectively.

Adjusted Net Operating Income (Loss)

We define adjusted net operating income (loss) as net income (loss) available to common shareholders excluding net realized and unrealized (losses) gains on investments, and certain non-operating expenses such as professional service fees related to a purported class action lawsuit, various strategic initiatives, and the filing of registration statements for the offering of securities, and severance costs associated with terminated employees. We use adjusted net operating income (loss) 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 (loss) should not be viewed as a substitute for net income (loss) calculated in accordance with GAAP, and our definition of adjusted net operating income (loss) may not be comparable to that of other companies.

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JRVR Announces First Quarter 2022 Results
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May 9, 2022
Our income (loss) available to common shareholders reconciles to our adjusted net operating income (loss) as follows:
Three Months Ended March 31,
20222021
($ in thousands)Income
Before
Taxes		Net
Income		Loss
Before
Taxes		Net
Loss
Income (loss) available to common shareholders$12,653 $9,330 $(140,829)$(103,460)
Net realized and unrealized losses (gains) on investments5,010 4,190 (6,272)(5,751)
Other expenses347 347 527 416 
Adjusted net operating income (loss)$18,010 $13,867 $(146,574)$(108,795)

Tangible Equity (per Share) and Tangible Common Equity (per Share)

We define tangible equity as shareholders' equity plus mezzanine Series A preferred shares less goodwill and intangible assets (net of amortization). We define tangible common equity as tangible equity less mezzanine Series A preferred shares. Our definition of tangible equity and tangible common equity may not be comparable to that of other companies, and it should not be viewed as a substitute for shareholders’ equity calculated in accordance with GAAP. We use tangible equity and tangible common equity internally to evaluate the strength of our balance sheet and to compare returns relative to this measure. The following table reconciles shareholders’ equity to tangible equity and tangible common equity for March 31, 2022, December 31, 2021, and March 31, 2021.
March 31, 2022December 31, 2021March 31, 2021
($ in thousands, except for share data)EquityEquity per shareEquityEquity per shareEquityEquity per share
Shareholders' equity$647,677 $17.30 $725,362 $19.41 $639,628 $20.78 
Plus: Series A redeemable preferred shares144,898 — — 
Less: Goodwill and intangible assets217,779 217,870 218,142 
Tangible equity$574,796 $13.34 $507,492 $13.58 $421,486 $13.70 
Less: Series A redeemable preferred shares144,898 — — 
Tangible common equity$429,898 $11.48 $507,492 $13.58 $421,486 $13.70 
Common shares outstanding37,448,314 37,373,066 30,774,930 
Common shares from assumed conversion of Series A preferred shares5,640,158 — — 
Common shares outstanding after assumed conversion of Series A preferred shares43,088,472 37,373,066 30,774,930 
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