James River makes $5m profit estimate ahead of full earnings announcement

James River Group Holdings expects to report full year net profit of between $4 million and $5 million when it publishes its official earnings numbers, which is expected on February 25, 2021.

Its combined ratio for the full year is expected to be between 105-107 percent, James River said.

These figures take into account unfavorable development of prior year loss reserves of between $85 million and $90 million during Q4, which is concentrated in its commercial auto division within its excess and surplus (E&S) segment, and in its casualty reinsurance segment. There was a positive development in its core E&S and specialty admitted insurance segment.

Frank D’Orazio, chief executive officer at James River, said James River has meaningfully strengthened reserves in response to the losses in commercial auto and casualty reinsurance.

“With this strengthening of prior year reserves, I believe our franchise is extremely well positioned to continue to take advantage of compelling market conditions across our business,” he said. “Our core E&S business, where we have earned attractive returns for many years, and our fronting business within our specialty admitted insurance segment, present us with very attractive opportunities to put capital to work, driven by a continued attractive rate environment.”