Volatility in bank loan portfolio leads to Q1 loss for James River
James River Group Holdings has reported a net loss for Q1 2020 that it said was driven by market volatility, primarily affecting its $202.9 million senior secured bank loan portfolio.
James River reported a net loss of $36.8 million for Q1 2020, compared to net profit of $22.7 million for the first quarter of 2019.
It generated gross written premiums of $283.8 million for Q1, compared to $327.3 million in the same period of 2019. Its combined ratio was 100.6 percent, up from 96.2 percent in Q1 2019.
Adam Abram, James River’s chairman and chief executive officer, said: “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.”
He added: “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. 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.”