AM Best affirms James River's rating
Troubled Bermuda-based James River Group has had its A- financial strength rating affirmed, recognising the company’s effort to derisk its portfolio and to protect its balance sheet.
But ratings agency AM Best maintained a negative outlook for the insurer, saying failure to meet its projections would result in downward rating pressure.
The rating affirmation came after James River agreed a $75 million loss portfolio transfer with legacy re/insurer Enstar last year. Enstar subsidiary Cavello Bay Reinsurance also took a minority stake in the company.
James River, led by chief executive officer Frank D’Orazio (pictured), also sold its Bermuda reinsurance subsidiary JRG Re last year and has said its plans to focus on the excess and surplus market going forward. The company lost $42 million in the third quarter last year and had lost $700,000 for the first nine months of the year compared to a $38 million profit in the first nine months of 2023.
“This rating affirmation reflects JRG Holdings’ substantial efforts to protect its balance sheet, particularly through recent adverse development cover and loss portfolio transfer reinsurance transactions, as well as de-risking its operations via the sale of JRG Reinsurance Company,” AM Best said.
“Additionally, the rating affirmations consider the group’s ongoing dedication to and investment in its enterprise risk management initiatives.
“The negative outlooks reflect the execution risks associated with the group’s projections as presented to AM Best. Failure to meet these projections may result in downward rating pressure.”
The company said the financial strength ratings of the group’s subsidiaries reflect their balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and marginal ERM.
AM Best said the ratings applied to the company’s subsidiaries: James River Insurance Company; James River Casualty Company; Falls Lake National Insurance Company; Stonewood Insurance Company; and Falls Lake Fire and Casualty Company.
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