JRG reports Q3 loss driven by unfavourable developments

James River Group (JRG) reported a net loss of $25.2 million for Q3, down on the net income of $19.6 million generated in Q3 2018.

This was partly driven by a $50 million unfavorable development in the excess and surplus lines segment, driven by one large account - Rasier - and $8 million of unfavorable development in the casualty reinsurance segment.

JRG saw gross written premiums up 39 percent year on year, to $388.2 million. Of that, $46.7 million was in the casualty reinsurance business, up 94 percent year on year. But net earned premium in this business decreased by 30 percent year on year, to $34.4 million, with the group figure edging up by 4 percent to $213.4 million.

JRG said the fall for casualty reinsurance was in line with its expectations and consistent with its planned reductions for the segment that commenced last year.

JRG’s group combined ratio was 118.8 percent, up from 96.0 percent in Q3 2018.

Adam Abram, JRG’s chairman and CEO, said: “At the beginning of October, we announced the early termination, effective December 31, 2019, of all insurance policies issued to our largest client. The results from this account were not consistent with our focus on underwriting profit. Our core excess and surplus lines business, where we have earned compelling returns for many years, and our fronting business within our specialty admitted segment, present us with superior opportunities to put capital to work.”