James River Group Holdings, the Bermuda-based insurance holdings company, has posted a loss of $36.8 million for the first quarter of 2020 due to investment market volatility caused by the COVID-19 pandemic.
Income was down from $22.7 million in Q1 2019, with results weighed down in particular by a portfolio of bank loans that proved very volatile during the quarter.
The $202.9 million senior secured bank loan portfolio, which had previously been carried at amortized cost net of allowance for any credit losses, experienced an unrealized loss during the quarter.
However, James River noted that a substantial amount of this loss has been recovered subsequent to the end of the first quarter.
In terms of operating performance, gross written premium in the Casualty Reinsurance segment increased from 2019, while net written premium and net earned premium declined.
Excess and Surplus Lines gross written premium increased 37% and net written premium increased 16%, while for Commercial auto gross written premium decreased from $92.0 million $6.7 million in the current quarter due to the cancellation of a large set of policies.
While gross written premium for the Specialty Admitted Insurance segment was flat quarter over quarter, net written premium decreased from the prior year quarter.
“Despite the disruptions, uncertainties and the concerns brought on by the spread of the coronavirus, our team delivered a very strong start to the year,” said J. Adam Abram, Chairman and Chief Executive Officer of James River.
“In this quarter, we adopted a mark-to-market approach to reporting results from a professionally managed portfolio of bank loans we have owned for many years. Those loans proved very volatile during the quarter, as the debt markets responded to concerns about the impact of COVID-19 on business conditions,” Abram explained
“We also saw a decline in the value of our high grade investment portfolio in the quarter. A substantial part of the decline we report in the quarter has been reversed as debt markets have recovered significantly from quarter end.”