Bermuda-domiciled insurance holding company, James River Group Holdings, has announced that two of its principal subsidiaries have entered into a combined loss portfolio transfer (LPT) and adverse development cover (ADC) reinsurance agreement with State National Insurance Company, Inc.
Under the terms of the agreement, State National is set to provide $160 million of ADC reinsurance coverage for James River’s Excess and Surplus Lines segment casualty portfolio for accident years 2010-2023, inclusive of both years.
The agreement was executed on July 2nd, 2024, effective January 1st, 2024.
The reinsurance structure has no coverage sublimits but does exclude exposure to the James River’s former large commercial auto insured, with most of that exposure already subject to a previously executed loss portfolio transfer.
During Q3 2024, James River will recognize a $52.2 million reduction in pre-tax income for the excess consideration paid over reserves ceded in connection with the agreement.
A profit commission to James River for 50% of any favorable development on the business ceded to State National below 104.5% of carried reserves, capped at $87 million, is included in the agreement.
Frank D’Orazio, Chief Executive Officer, James River, commented, “We are pleased to have successfully completed a significant legacy reinsurance transaction with a highly rated carrier that is consistent with the Company’s track record of de-risking the organization while bolstering the balance sheet and providing improved certainty to our stakeholders.”
