James River Group's Q4 2024: Navigating Contradictions in Loss Trends, Submissions, and Market Competition

These are the key contradictions discussed in James River Group Holdings' latest 2024Q4 earnings call, specifically including: Loss Trend Assumptions, Submission Growth, and Competitive Dynamics:



Legacy Issues and Balance Sheet Strengthening:
- James River Group completed legacy reinsurance transactions, resulting in an increase in reserves for the E&S segment of $38.4 million prior to sessions to the LPT, ADC, and $8.9 million on a net basis.
- These actions were taken to position the company to distance itself from legacy issues, validate its balance sheet, and provide better protection against adverse development on prior accident years.

Submission Growth and Market Conditions:
- For 2024, James River Group received record-high new and renewal submissions, marking the most submissions the company has ever received.
- The growth was driven by favorable market conditions, with significant increases in manufacturers and contractors, general casualty, and sports and entertainment divisions.

E&S Segment Performance and Loss Picks:
- The E&S segment's accident year combined ratio for 2024 was reported at 91.8%, excluding legacy structure purchases it would have been 89.3%.
- A cautious and prudent approach led to an increase in the 2024 E&S accident year loss ratio to 64.3%, reflecting a 2.4% increase from the previous year.

Capitalization and Financial Outlook:
- James River Group entered 2025 with an aggregate limit of $116.2 million available, providing significant reserve protection for 2010-2023 E&S accident years.
- The company expects to generate a mid-teen operating return on tangible common equity in 2025, underpinned by a similar accident year loss ratio to 2024.