jrvr-20230807
0001620459false00016204592023-08-072023-08-07

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):August 7, 2023
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 August 7, 2023, James River Group Holdings, Ltd. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2023. 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 August 7, 2023, 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 September 29, 2023 to shareholders of record on September 11, 2023.
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: August 7, 2023
By: /s/ Sarah C. Doran
 Sarah C. Doran
 Chief Financial Officer

Document
Exhibit 99.1

    
https://cdn.kscope.io/08c9f764a06de47d958263c4e4142213-imagea.jpg

JAMES RIVER ANNOUNCES SECOND QUARTER 2023 RESULTS

Pembroke, Bermuda, August 7, 2023 - James River Group Holdings, Ltd. ("James River" or the "Company") (NASDAQ: JRVR) today reported second quarter 2023 net income available to common shareholders of $21.1 million ($0.54 per diluted share), compared to net income available to common shareholders of $5.0 million ($0.13 per diluted share) for the second quarter of 2022. Adjusted net operating income1 for the second quarter of 2023 was $20.6 million ($0.53 per diluted share), compared to adjusted net operating income1 of $20.0 million ($0.52 per diluted share) for the second quarter of 2022.
Second Quarter 2023 Highlights:
Group combined ratio of 94.6% and Excess and Surplus Lines ("E&S") segment combined ratio of 87.8% on business not subject to retroactive reinsurance accounting for loss portfolio transfers (the "combined ratio"). Unless specified otherwise, all underwriting performance ratios presented herein are for our business not subject to retroactive reinsurance accounting for loss portfolio transfers ("LPTs").
Core E&S (excluding commercial auto) gross written premium growth of 9.0% compared to the prior year quarter, and E&S segment gross written and net earned premium growth of 7.3% and 15.3% compared to the prior year quarter, respectively, due to strong growth from our larger underwriting divisions, broad based renewal rate increases and increased net retention in excess casualty. Fronting and Program gross written premium growth of 11.0% compared to the prior year quarter.
E&S segment renewal rate change increased 11.0% from the prior year quarter, with nearly all underwriting divisions reporting positive pricing increases.
Net investment income increased 71.2% compared to the prior year quarter, with most asset classes reporting meaningfully higher income.
Shareholders' equity per share of $15.84 increased 1.1%2 sequentially from March 31, 2023. Tangible common equity per share1 excluding accumulated other comprehensive loss ("AOCI") increased 4.4%2 sequentially and 15.9%2 from the prior year quarter.
Adjusted net operating return on tangible common equity excluding AOCI1 of 14.8% for the second quarter and 15.5% for the six months ended June 30, 2023.

1 Adjusted net operating income, tangible common equity per share, and adjusted net operating return on tangible common equity excluding AOCI are non-GAAP financial measures. See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” at the end of this press release.
2 Percent change before common dividends paid.
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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 Second Quarter 2023 Results
Page 2

Frank D'Orazio, the Company’s Chief Executive Officer, commented on the second quarter, “Our results continue to demonstrate our focus on generating strong, consistent earnings for shareholders and an ability to take advantage of sustained robust E&S market conditions, while managing our portfolio for optimal risk and return. Rising E&S renewal rates of 11% in the second quarter provide encouraging signs of persistent market strength in our core business.”
Second Quarter 2023 Operating Results
Gross written premium of $427.7 million, consisting of the following:
Three Months Ended
June 30,
($ in thousands)20232022% Change
Excess and Surplus Lines$286,126 $266,635 %
Specialty Admitted Insurance136,924 124,967 10 %
Casualty Reinsurance4,691 8,112 (42)%
$427,741 $399,714 %

Net written premium of $218.2 million, consisting of the following:
Three Months Ended
June 30,
($ in thousands)20232022% Change
Excess and Surplus Lines$184,768 $166,004 11 %
Specialty Admitted Insurance29,116 18,390 58 %
Casualty Reinsurance4,295 10,297 (58)%
$218,179 $194,691 12 %

Net earned premium of $209.7 million, consisting of the following:
Three Months Ended
June 30,
($ in thousands)20232022% Change
Excess and Surplus Lines$159,002 $137,884 15 %
Specialty Admitted Insurance23,858 18,141 32 %
Casualty Reinsurance26,798 30,237 (11)%
$209,658 $186,262 13 %

Core E&S (excluding commercial auto) gross written premium grew 9.0%, while the E&S segment gross written premium increased 7.3% compared to the prior year quarter. Net earned premium increased 15.3% due to strong growth in most of our underwriting divisions and higher net retention within our excess casualty unit. Premium growth for the segment was led by our larger underwriting divisions, with particular strength in excess casualty, excess property, general casualty and manufacturers and contractors. Renewal rate increases were 11.0% during the second quarter of 2023, representing the twenty-sixth consecutive quarter of renewal rate increases compounding to 72.3%.
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JRVR Announces Second Quarter 2023 Results
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Gross written premium for the Specialty Admitted Insurance segment increased 9.6% from the prior year quarter, including an 11.0% increase in fronting and program premium. During the quarter there was a combined 3.9% reduction to premium from our individual risk workers' compensation business and our large workers' compensation fronted program, which was partially offset by strong growth in our remaining fronting and program business.
Gross written premium in the Casualty Reinsurance segment totaled $4.7 million and was solely related to premium adjustments. As announced earlier this year, we have suspended underwriting business in our Casualty Reinsurance segment and have not written or renewed any treaties this year. The earning pattern of the business can extend over multiple years and declines in net earned premium for this segment will lag written premium. We expect to continue to report earned premium over the next several quarters.
Pre-tax favorable (unfavorable) reserve development by segment on business not subject to retroactive reinsurance accounting for loss portfolio transfers was as follows:
Three Months Ended
June 30,
($ in thousands)20232022
Excess and Surplus Lines$(118)$32 
Specialty Admitted Insurance839 1,545 
Casualty Reinsurance(3,009)— 
$(2,288)$1,577 
Additionally, the Company recognized adverse prior year development of $12.6 million on the reserves subject to the Commercial Auto LPT, which provides unlimited coverage, and $5.8 million on the reserves subject to the Casualty Reinsurance LPT. Retroactive benefits of $17.8 million were recorded in loss and loss adjustment expenses during the second quarter and the deferred retroactive reinsurance gain on the Balance Sheet is $37.6 million as of June 30, 2023.
Gross fee income was as follows:
Three Months Ended
June 30,
($ in thousands)20232022% Change
Specialty Admitted Insurance$5,800 $5,875 (1)%
The consolidated expense ratio was 27.5% for the second quarter of 2023, which was an increase from 25.8% in the prior year second quarter. The expense ratio was primarily impacted by changes in reinsurance cessions in both E&S and Specialty Admitted segments that resulted in a lower level of ceding commissions in the current period.

Investment Results
Net investment income for the second quarter of 2023 was $25.2 million, an increase of 71.2% compared to $14.7 million in the prior year quarter. Growth in income was broad-based across the portfolio, as positive operating cash flow and portfolio cash flow was deployed at higher yields. On a sequential basis, income increased modestly for all asset classes with the exception of our private investments.
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JRVR Announces Second Quarter 2023 Results
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The Company’s net investment income consisted of the following:
Three Months Ended
June 30,
($ in thousands)20232022% Change
Private Investments232 (490)NM
All Other Investments24,943 15,19564 %
Total Net Investment Income$25,175 $14,705 71 %
The Company’s annualized gross investment yield on average fixed maturity, bank loan and equity securities for the three months ended June 30, 2023 was 4.3% (versus 3.4% for the three months ended June 30, 2022). The investment yield increased primarily as a result of higher market yields on fixed maturity securities and bank loans.
Net realized and unrealized gains on investments of $2.1 million for the three months ended June 30, 2023 compared to net realized and unrealized losses on investments of $17.1 million in the prior year quarter. The majority of the realized and unrealized gains during the second quarter of 2023 were related to changes in fair values of our secured bank loan portfolio and, to a lesser extent, our common equity investments.
Taxes
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 effective tax rate for the six months ended June 30, 2023 was 23.9%.
Tangible Equity
Tangible equity3 of $561.1 million at June 30, 2023 increased 1.0% compared to tangible equity of $555.4 million at March 31, 2023, as strong earnings was partially offset by unrealized investment losses. AOCI declined by $16.5 million during the second quarter of 2023, due to a decrease in the value of the Company's fixed maturity securities.
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 Friday, September 29, 2023 to all shareholders of record on Monday, September 11, 2023.
Conference Call
James River will hold a conference call to discuss its second quarter results tomorrow, August 8, 2023 at 8:30 a.m. Eastern Time. Investors may access the conference call by dialing (800) 715-9871, Conference ID 8809552, or via the internet by visiting www.jrvrgroup.com and clicking on the “Investor Relations” link. A webcast replay of the call will be available by visiting the company website.
3 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 Second Quarter 2023 Results
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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; downgrades in the financial strength rating of our regulated insurance subsidiaries 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 investments and investment returns, and our compensation expenses; exposure to credit risk, interest rate risk and other market risk in our investment portfolio; 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, adequately protect our company against financial loss and that supports our growth plans; 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 its reimbursement obligations, and our potential inability to demand or maintain adequate collateral to mitigate such risks; 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; changes in U.S. tax laws and the interpretation of certain provisions of Public Law No. 115-97, informally titled the 2017 Tax Cuts and Jobs Act (including associated regulations), which may be retroactive and could 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 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; 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 the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”); changes in our financial condition, regulations or other factors that may restrict our subsidiaries’
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JRVR Announces Second Quarter 2023 Results
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ability to pay us dividends; and an adverse result in any litigation or legal proceedings we are or may become subject to. 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, tangible equity, tangible common equity, adjusted net operating return on tangible equity (which is calculated as annualized adjusted net operating income divided by the average quarterly tangible equity balances in the respective period), and adjusted net operating return on tangible common equity excluding AOCI (which is calculated as annualized adjusted net operating income divided by the average quarterly tangible common equity balances in the respective period, excluding AOCI), 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.jrvrgroup.com
For more information contact:
Brett Shirreffs
SVP, Finance, Investments and Investor Relations
Investors@jrvrgroup.com
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JRVR Announces Second Quarter 2023 Results
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James River Group Holdings, Ltd. and Subsidiaries
Condensed Consolidated Balance Sheet Data (Unaudited)
($ in thousands, except for share data) 
June 30, 2023December 31, 2022
ASSETS
Invested assets:
Fixed maturity securities, available-for-sale, at fair value$1,875,695 $1,783,417 
Equity securities, at fair value118,116 118,627 
Bank loan participations, at fair value
143,762 154,991 
Short-term investments22,128 107,812 
Other invested assets27,415 27,447 
Total invested assets2,187,116 2,192,294 
Cash and cash equivalents227,239 173,164 
Restricted cash equivalents (a)105,502 103,215 
Accrued investment income16,805 14,418 
Premiums receivable and agents’ balances, net364,842 340,525 
Reinsurance recoverable on unpaid losses, net1,545,736 1,520,113 
Reinsurance recoverable on paid losses181,956 114,242 
Deferred policy acquisition costs51,668 59,603 
Goodwill and intangible assets217,325 217,507 
Other assets397,681 401,994 
Total assets$5,295,870 $5,137,075 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Reserve for losses and loss adjustment expenses$2,885,379 $2,768,995 
Unearned premiums665,189 676,016 
Funds held (a)275,331 310,953 
Deferred reinsurance gain37,572 20,091 
Senior debt222,300 222,300 
Junior subordinated debt104,055 104,055 
Accrued expenses52,507 59,566 
Other liabilities312,716 276,435 
Total liabilities4,555,049 4,438,411 
Series A redeemable preferred shares144,898 144,898 
Total shareholders’ equity595,923 553,766 
Total liabilities, Series A redeemable preferred shares, and shareholders’ equity$5,295,870 $5,137,075 
Tangible equity (b)$561,068 $501,248 
Tangible equity per share outstanding (b)$12.97 $11.63 
Shareholders' equity per share outstanding
$15.84 $14.78 
Common shares outstanding37,619,226 37,470,237 
(a) Restricted cash equivalents and the funds held liability includes funds posted by the Company to a trust account for the benefit of a third party administrator handling the claims on the Rasier commercial auto policies in run-off. Such funds held in trust secure the Company's obligations to reimburse the administrator for claims payments, and are primarily sourced from the collateral posted to the Company by Rasier and its affiliates to support their obligations under the indemnity agreements and the loss portfolio transfer reinsurance agreement with the Company. The funds held liability also includes a notional funds withheld account balance related to the loss portfolio transfer retrocession transaction that our Casualty Reinsurance segment entered into in the first quarter of 2022, which is reduced quarterly by paid losses on the subject business.
(b) See “Reconciliation of Non-GAAP Measures”
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JRVR Announces Second Quarter 2023 Results
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James River Group Holdings, Ltd. and Subsidiaries
Condensed Consolidated Income Statement Data (Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
($ in thousands, except for share data)2023202220232022
REVENUES
Gross written premiums$427,741 $399,714 $791,634 $759,650 
Net written premiums218,179 194,691 401,399 370,550 
Net earned premiums209,658 186,262 417,771 376,086 
Net investment income25,175 14,705 50,947 30,972 
Net realized and unrealized gains (losses) on investments2,145 (17,110)2,552 (22,120)
Other income1,464 949 2,773 1,816 
Total revenues238,442 184,806 474,043 386,754 
EXPENSES
Losses and loss adjustment expenses (a)
141,308 121,369 296,596 256,977 
Other operating expenses58,865 49,036 119,124 99,097 
Other expenses223 — 826 368 
Interest expense6,941 4,049 13,557 6,341 
Amortization of intangible assets91 91 182 182 
Total expenses207,428 174,545 430,285 362,965 
Income before taxes31,014 10,261 43,758 23,789 
Income tax expense7,321 2,597 10,457 5,920 
NET INCOME$23,693 $7,664 $33,301 $17,869 
Dividends on Series A preferred shares(2,625)(2,625)(5,250)(3,500)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS$21,068 $5,039 $28,051 $14,369 
ADJUSTED NET OPERATING INCOME (b)
$20,551 $20,025 $42,142 $33,892 
INCOME PER COMMON SHARE
Basic
$0.56 $0.13 $0.75 $0.38 
Diluted (c)
$0.54 $0.13 $0.74 $0.38 
ADJUSTED NET OPERATING INCOME PER COMMON SHARE
Basic
$0.55 $0.53 $1.12 $0.91 
Diluted (d)
$0.53 $0.52 $1.09 $0.90 
Weighted-average common shares outstanding:
Basic
37,642,289 37,449,621 37,587,359 37,428,385 
Diluted43,498,905 37,732,371 37,822,405 37,643,634 
Cash dividends declared per common share$0.05 $0.05 $0.10 $0.10 
Ratios:
Loss ratio67.1 %65.2 %66.8 %68.3 %
Expense ratio (e)
27.5 %25.8 %27.9 %25.9 %
Combined ratio94.6 %91.0 %94.7 %94.2 %
Accident year loss ratio66.0 %66.0 %65.9 %66.9 %
(a) Losses and loss adjustment expenses include $0.6 million and $17.5 million of expense for unrecognized deferred retroactive reinsurance gains for the three and six months ended June 30, 2023, respectively.
(b) See "Reconciliation of Non-GAAP Measures".
(c) The outstanding Series A preferred shares were dilutive for the three months ended June 30, 2023. Dividends on the Series A preferred shares were added back to the numerator in the calculations and 5,640,158 common shares from an assumed conversion of the Series A preferred shares were included in the denominator.
(d) The outstanding Series A preferred shares were dilutive for the three and six months ended June 30, 2023. Dividends on the Series A preferred shares were added back to the numerator in the calculations and 5,640,158 common shares from an assumed conversion of the Series A preferred shares were included in the denominator.
(e) 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 $1.3 million and $2.4 million for the three and six months ended June 30, 2023, respectively ($900,000 and $1.7 million in the respective prior year periods), and a denominator of net earned premiums.
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JRVR Announces Second Quarter 2023 Results
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James River Group Holdings, Ltd. and Subsidiaries
Segment Results

EXCESS AND SURPLUS LINES
Three Months Ended
June 30,
Six Months Ended
June 30,
($ in thousands)20232022% Change20232022% Change
Gross written premiums$286,126 $266,635 7.3 %$515,029 $470,917 9.4 %
Net written premiums$184,768 $166,004 11.3 %$332,198 $291,714 13.9 %
Net earned premiums$159,002 $137,884 15.3 %$310,361 $269,185 15.3 %
Losses and loss adjustment expenses excluding retroactive reinsurance(105,098)(89,184)17.8 %(204,287)(174,109)17.3 %
Underwriting expenses(34,471)(26,366)30.7 %(66,646)(51,285)30.0 %
Underwriting profit (a)
$19,433 $22,334 (13.0)%$39,428 $43,791 (10.0)%
Ratios:
Loss ratio66.1 %64.7 %65.8 %64.7 %
Expense ratio21.7 %19.1 %21.5 %19.0 %
Combined ratio87.8 %83.8 %87.3 %83.7 %
Accident year loss ratio66.0 %64.7 %65.9 %64.7 %
(a) See "Reconciliation of Non-GAAP Measures".

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JRVR Announces Second Quarter 2023 Results
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SPECIALTY ADMITTED INSURANCE
Three Months Ended
June 30,
Six Months Ended
June 30,
($ in thousands)20232022% Change20232022% Change
Gross written premiums$136,924 $124,967 9.6 %$261,475 $250,677 4.3 %
Net written premiums$29,116 $18,390 58.3 %$55,841 $38,595 44.7 %
Net earned premiums$23,858 $18,141 31.5 %$44,339 $37,459 18.4 %
Losses and loss adjustment expenses(17,594)(13,217)33.1 %(33,086)(28,652)15.5 %
Underwriting expenses(5,880)(3,672)60.1 %(11,338)(7,346)54.3 %
Underwriting profit (loss) (a), (b)
$384 $1,252 (69.3)%$(85)$1,461 — 
Ratios:
Loss ratio73.7 %72.9 %74.6 %76.5 %
Expense ratio24.7 %20.2 %25.6 %19.6 %
Combined ratio98.4 %93.1 %100.2 %96.1 %
Accident year loss ratio77.3 %81.4 %76.9 %80.4 %
(a) See "Reconciliation of Non-GAAP Measures".
(b) Underwriting results for the three and six months ended June 30, 2023 include gross fee income of $5.8 million and $11.5 million, respectively ($5.9 million and $11.4 million in the respective prior year periods).

CASUALTY REINSURANCE
Three Months Ended
June 30,
Six Months Ended
June 30,
($ in thousands)20232022% Change20232022% Change
Gross written premiums$4,691 $8,112 (42.2)%$15,130 $38,056 (60.2)%
Net written premiums$4,295 $10,297 (58.3)%$13,360 $40,241 (66.8)%
Net earned premiums$26,798 $30,237 (11.4)%$63,071 $69,442 (9.2)%
Losses and loss adjustment expenses excluding retroactive reinsurance(17,998)(18,968)(5.1)%(41,742)(54,216)(23.0)%
Underwriting expenses(8,672)(9,210)(5.8)%(20,895)(22,004)(5.0)%
Underwriting profit (loss) (a)
$128 $2,059 (93.8)%$434 $(6,778)— 
Ratios:
Loss ratio67.2 %62.7 %66.2 %78.1 %
Expense ratio32.3 %30.5 %33.1 %31.7 %
Combined ratio99.5 %93.2 %99.3 %109.8 %
Accident year loss ratio55.9 %62.7 %58.5 %68.3 %
(a) See "Reconciliation of Non-GAAP Measures".

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JRVR Announces Second Quarter 2023 Results
Page 11

Underwriting Performance Ratios

The following table provides the underwriting performance ratios of the Company inclusive of the business subject to retroactive reinsurance accounting for loss portfolio transfers. There is no economic impact to the Company over the life of a loss portfolio transfer contract so long as any additional losses subject to the contract are within the limit of the loss portfolio transfer and the counterparty performs under the contract. Retroactive reinsurance accounting is not indicative of our current and ongoing operations. Management believes that providing loss ratios and combined ratios on business not subject to retroactive reinsurance accounting for loss portfolio transfers gives the users of our financial statements useful information in evaluating our current and ongoing operations.
 Three Months Ended
June 30,
Six Months Ended
June 30,
 2023202220232022
Excess and Surplus Lines:
Loss Ratio66.1 %64.7 %65.8 %64.7 %
Impact of retroactive reinsurance(1.4)%— %3.0 %— %
Loss Ratio including impact of retroactive reinsurance64.7 %64.7 %68.8 %64.7 %
Combined Ratio87.8 %83.8 %87.3 %83.7 %
Impact of retroactive reinsurance(1.4)%— %3.0 %— %
Combined Ratio including impact of retroactive reinsurance86.4 %83.8 %90.3 %83.7 %
Casualty Reinsurance:
Loss Ratio67.2 %62.7 %66.2 %78.1 %
Impact of retroactive reinsurance10.7 %— %12.7 %— %
Loss Ratio including impact of retroactive reinsurance77.9 %62.7 %78.9 %78.1 %
Combined Ratio99.5 %93.2 %99.3 %109.8 %
Impact of retroactive reinsurance10.7 %— %12.7 %— %
Combined Ratio including impact of retroactive reinsurance110.2 %93.2 %112.0 %109.8 %
Consolidated:
Loss Ratio67.1 %65.2 %66.8 %68.3 %
Impact of retroactive reinsurance0.3 %— %4.2 %— %
Loss Ratio including impact of retroactive reinsurance67.4 %65.2 %71.0 %68.3 %
Combined Ratio94.6 %91.0 %94.7 %94.2 %
Impact of retroactive reinsurance0.3 %— %4.2 %— %
Combined Ratio including impact of retroactive reinsurance94.9 %91.0 %98.9 %94.2 %

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JRVR Announces Second Quarter 2023 Results
Page 12
RECONCILIATION OF NON-GAAP MEASURES

Underwriting Profit

The following table reconciles the underwriting profit by individual operating segment and for the entire Company to consolidated income before taxes. We believe that the disclosure of underwriting profit by individual segment and of the Company as a whole is useful to investors, analysts, rating agencies and other users of our financial information in evaluating our performance because our objective is to consistently earn underwriting profits. We evaluate the performance of our segments and allocate resources based primarily on underwriting profit. We define underwriting profit as net earned premiums and gross fee income (in specific instances when the Company is not retaining insurance risk) less losses and loss adjustment expenses excluding the impact of loss portfolio transfers accounted for as retroactive reinsurance and other operating expenses. Other operating expenses include the underwriting, acquisition, and insurance expenses of the operating segments and, for consolidated underwriting profit, the expenses of the Corporate and Other segment. Our definition of underwriting profit may not be comparable to that of other companies.
Three Months Ended
June 30,
Six Months Ended
June 30,
($ in thousands)2023202220232022
Underwriting profit (loss) of the operating segments:
Excess and Surplus Lines
$19,433 $22,334 $39,428 $43,791 
Specialty Admitted Insurance
384 1,252 (85)1,461 
Casualty Reinsurance
128 2,059 434 (6,778)
Total underwriting profit of operating segments19,945 25,645 39,777 38,474 
Other operating expenses of the Corporate and Other segment(8,548)(8,888)(17,830)(16,762)
Underwriting profit (a)
11,397 16,757 21,947 21,712 
Losses and loss adjustment expenses - retroactive reinsurance(618)— (17,481)— 
Net investment income25,175 14,705 50,947 30,972 
Net realized and unrealized gains (losses) on investments2,145 (17,110)2,552 (22,120)
Other expense(53)49 (468)(252)
Interest expense(6,941)(4,049)(13,557)(6,341)
Amortization of intangible assets(91)(91)(182)(182)
Consolidated income before taxes$31,014 $10,261 $43,758 $23,789 
(a) Included in underwriting results for the three and six months ended June 30, 2023 is gross fee income of $5.8 million and $11.5 million, respectively ($5.9 million and $11.4 million in the respective prior year periods).

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JRVR Announces Second Quarter 2023 Results
Page 13
Adjusted Net Operating Income

We define adjusted net operating income as income available to common shareholders excluding a) the impact of loss portfolio transfers accounted for as retroactive reinsurance, b) net realized and unrealized gains (losses) on investments, c) 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 d) severance costs associated with terminated employees. 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 calculated in accordance with GAAP, and our definition of adjusted net operating income may not be comparable to that of other companies.

Our income available to common shareholders reconciles to our adjusted net operating income as follows:
Three Months Ended June 30,
20232022
($ in thousands)Income
Before
Taxes
Net
Income
Income
Before
Taxes
Net
Income
Income available to common shareholders$28,389 $21,068 $7,636 $5,039 
Losses and loss adjustment expenses - retroactive reinsurance618 1,091 — — 
Net realized and unrealized investment (gains) losses(2,145)(1,806)17,110 14,986 
Other expenses223 198 — — 
Adjusted net operating income$27,085 $20,551 $24,746 $20,025 
Six Months Ended June 30,
20232022
($ in thousands)Income
Before
Taxes
Net
Income
Income
Before
Taxes
Net
Income
Income available to common shareholders$38,508 $28,051 $20,289 $14,369 
Losses and loss adjustment expenses - retroactive reinsurance17,481 15,497 — — 
Net realized and unrealized investment (gains) losses(2,552)(2,179)22,120 19,176 
Other expenses798 773 347 347 
Adjusted net operating income$54,235 $42,142 $42,756 $33,892 


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JRVR Announces Second Quarter 2023 Results
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Tangible Equity (per Share) and Tangible Common Equity (per Share)

We define tangible equity as shareholders' equity plus mezzanine Series A preferred shares and the unrecognized deferred retroactive reinsurance gain on loss portfolio transfers 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 June 30, 2023, March 31, 2023, December 31, 2022, and June 30, 2022.
June 30, 2023March 31, 2023December 31, 2022June 30, 2022
($ in thousands, except for share data)
Shareholders' equity$595,923 $590,915 $553,766 $594,386 
Plus: Series A redeemable preferred shares144,898 144,898 144,898 144,898 
Plus: Deferred reinsurance gain37,572 36,954 20,091 — 
Less: Goodwill and intangible assets217,325 217,416 217,507 217,688 
Tangible equity$561,068 $555,351 $501,248 $521,596 
Less: Series A redeemable preferred shares144,898 144,898 144,898 144,898 
Tangible common equity$416,170 $410,453 $356,350 $376,698 
Common shares outstanding37,619,226 37,619,226 37,470,237 37,450,264 
Common shares from assumed conversion of Series A preferred shares5,640,158 5,640,158 5,640,158 5,640,158 
Common shares outstanding after assumed conversion of Series A preferred shares43,259,384 43,259,384 43,110,395 43,090,422 
Equity per share:
Shareholders' equity$15.84 $15.71 $14.78 $15.87 
Tangible equity$12.97 $12.84 $11.63 $12.10 
Tangible common equity$11.06 $10.91 $9.51 $10.06 
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