James River Group Holdings, the Bermuda-based insurance holdings company, has reported a net loss of $23.9 million and a combined ratio of 122.1% for the third quarter of 2021.
The company’s Q3 results included a pre-tax loss of $29.6 million recognized as adverse loss and loss adjustment expense reserve development in the Excess and Surplus Lines (E&S) segment.
This was associated with a Q3 loss portfolio transfer (LPT) reinsurance transaction that reinsured substantially all of James River’s legacy portfolio of commercial auto policies.
Additionally, net catastrophe losses for the quarter came to $5.0 million and were related to Hurricane Ida.
The losses primarily related to the Excess Property book in the E&S segment and were capped at this level by the company’s property catastrophe reinsurance program.
On a more positive note, James River reported 21.3% growth in gross written premiums within E&S business and an 8.7% increase in E&S renewal pricing, each versus the prior year quarter, with nearly all underwriting divisions reporting positive growth and rate increases.
The segment experienced its nineteenth consecutive quarter of renewal rate increases, compounding to 45.9% over the same period.
Net investment income for the third quarter of 2021 was $15.3 million, an increase of 2.2% compared to $15.0 million for the same period in 2020.
“With the legacy transaction executed during the third quarter, we have brought economic finality to substantially all of our commercial auto run off portfolio, allowing us to fully focus on the demonstrated strengths of our specialty insurance franchise,” said Frank D’Orazio, Chief Executive Officer at James River.
“Our E&S and Specialty Admitted segments continue to deliver strong growth and underlying profitability. The E&S segment recorded its nineteenth consecutive quarter of positive rate impact, achieving a positive 14.5% rate change on a year to date basis, while Specialty Admitted grew fee income by 21.5% in the quarter as the segment continues to build scale,” D’Orazio continued.
“While our third quarter results were impacted by the aforementioned legacy transaction and reinsurance reinstatements, catastrophe losses stemming from Hurricane Ida and elevated prior year Casualty Reinsurance losses, overall macro and industry conditions remain very favorable and allow us to continue to focus on executing our corporate objectives.”