James River Group Holdings, the Bermuda-based insurance holdings company, has announced the early cancellation of all insurance policies issued to its largest customer, Rasier LLC, and its affiliates.
Founded in 2013, Rasier is a wholly owned subsidiary of Uber Technologies, the popular ridesharing company.
The cancellation will be effective from December 31, 2019, James River said.
A majority of the insurance policies had been due to expire on February 29, 2020.
“This account has not met our expectations for profitability, and we think it best to terminate the underwriting relationship as of year end,” said J. Adam Abram, Chairman and Chief Executive Officer of James River.
All insurance policies related to Rasier are included in James River’s commercial auto line of business within its excess and surplus (E&S) lines segment.
According to analysts at KBW, Rasier accounted for over 90% of James Rivers’ 2018 commercial auto gross written premium, which was about $400 million.
Analysts anticipate that the move will drive a large premium reduction for James River, although the insurer is likely to offset this by dedicating more capital to its core E&S business.
Additionally, James River announced that its third quarter 2019 results were impacted by pre-tax, adverse development of between $55 million and $60 million, net of reinsurance recoveries and reinstatement premiums.
These losses were primary related to its commercial auto line of business for the 2016 and 2017 underwriting years, with the remainder stemming from prior underwriting years in its casualty reinsurance segment.
The company also reported growth of 72% in its core (non-commercial auto) E&S lines gross written premium, compared with the prior year quarter.
