Core Viewpoint - James River Group (JRVR) is highlighted as a strong investment opportunity with a Zacks Rank 1 (Strong Buy) and a notable increase in earnings estimates for the current year [1]. Financial Metrics - James River Group has a price-to-earnings ratio (P/E) of 5.99, which is significantly lower than the industry average of 8.20, indicating strong value characteristics [2]. - The company has seen a 11.8% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1].

[FORM 10-Q General Information](index=1&type=section&id=FORM%2010-Q%20General%20Information) This section provides key filing details for the Quarterly Report on Form 10-Q, including the reporting period and common shares outstanding [Filing Details](index=1&type=section&id=Filing%20Details) This section outlines the Form 10-Q filing specifics, including the reporting period, filer status, and common shares outstanding - The registrant is an accelerated filer and not a shell company[5](index=5&type=chunk)[6](index=6&type=chunk) Filing Details | Metric | Value | | :----- | :---- | | Quarterly Period Ended | June 30, 2025 | | Commission File Number | 001-36777 | | Common Shares Outstanding (July 31, 2025) | 45,916,453 | | SEC Filings (Past 12 Months) | Yes | | Interactive Data File Submissions (Past 12 Months) | Yes | [Special Note Regarding Forward-Looking Statements](index=3&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section provides a disclaimer regarding forward-looking statements, emphasizing inherent uncertainties and the company's lack of obligation to update them [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This disclaimer notes that forward-looking statements are subject to significant uncertainties and risks, and actual results may differ materially from expectations - Forward-looking statements are subject to uncertainties, risks, and changes in circumstances that are difficult to predict, and actual results may differ materially[11](index=11&type=chunk)[12](index=12&type=chunk) - Key risk factors include the inherent uncertainty of estimating reserves, inaccurate risk management estimates, potential financial strength rating downgrades, and the outcome of litigation related to the sale of the casualty reinsurance business[12](index=12&type=chunk) - The company does not have an obligation to update any forward-looking statements to reflect events or circumstances arising after the report date, except as required by law[15](index=15&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section provides the unaudited condensed consolidated financial statements, including balance sheets, income statements, equity, and cash flow statements, with accompanying notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets detail assets, liabilities, and shareholders' equity, showing a slight increase in total assets and shareholders' equity Condensed Consolidated Balance Sheets | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------- | :------------ | :---------------- | | Total Assets | $5,018,322 | $5,007,076 | | Total Liabilities | $4,392,649 | $4,413,046 | | Total Shareholders' Equity | $492,558 | $460,915 | - Invested assets increased from **$1,552.4 million** at December 31, 2024, to **$1,716.5 million** at June 30, 2025[18](index=18&type=chunk) - Reserve for losses and loss adjustment expenses slightly decreased from **$3,084.4 million** to **$3,076.5 million**[21](index=21&type=chunk) [Condensed Consolidated Statements of Income and Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Income statements reflect decreased net income for both three and six-month periods, driven by lower earned premiums and investment income Condensed Consolidated Statements of Income and Comprehensive Income | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Earned Premiums | $152,609 | $163,193 | $304,511 | $334,884 | | Net Investment Income | $20,516 | $24,931 | $40,524 | $47,563 | | Total Revenues | $174,843 | $188,289 | $347,132 | $389,416 | | Net Income | $4,759 | $7,625 | $14,333 | $23,028 | | Net Income Available to Common Shareholders | $2,790 | $5,000 | $10,395 | $17,778 | | Basic EPS (Continuing Operations) | $0.07 | $0.31 | $0.27 | $0.87 | | Diluted EPS (Continuing Operations) | $0.07 | $0.31 | $0.26 | $0.85 | - Net income available to common shareholders decreased by **44.2%** for the three months and **41.5%** for the six months ended June 30, 2025, compared to the prior year periods[23](index=23&type=chunk) - Total comprehensive income significantly increased for both periods in 2025, driven by net unrealized gains on investments[23](index=23&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity increased to **$492.6 million** by June 30, 2025, primarily due to net income and other comprehensive income Condensed Consolidated Statements of Changes in Shareholders' Equity | Metric | Balances at Dec 31, 2024 (in thousands) | Balances at Jun 30, 2025 (in thousands) | | :-------------------- | :----------------------- | :----------------------- | | Additional Paid-in Capital | $933,311 | $936,255 | | Retained Deficit | $(402,408) | $(392,958) | | Accumulated Other Comprehensive Loss | $(69,997) | $(50,748) | | Total Shareholders' Equity | $460,915 | $492,558 | - Net income contributed **$14.3 million** to shareholders' equity for the six months ended June 30, 2025[24](index=24&type=chunk) - Other comprehensive income added **$19.2 million** for the six months ended June 30, 2025, primarily from net unrealized gains[24](index=24&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements show a shift to cash used in operating and investing activities, while financing activities provided cash in 2025 Condensed Consolidated Statements of Cash Flows | Metric | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------- | :--------------------------- | :--------------------------- | | Net Cash (Used in) Provided by Operating Activities | $(26,310) | $15,397 | | Net Cash (Used in) Provided by Investing Activities | $(133,699) | $356,628 | | Net Cash Provided by (Used in) Financing Activities | $18,321 | $(31,488) | | Change in Cash, Cash Equivalents, and Restricted Cash Equivalents | $(141,688) | $340,537 | | Cash, Cash Equivalents, and Restricted Cash Equivalents at End of Period | $249,362 | $700,486 | - Cash used in operating activities (excluding restricted cash equivalents) was **$26.9 million** for the six months ended June 30, 2025, compared to **$59.9 million** provided in the prior year, impacted by timing of reinsurance settlements and lower premium collections[28](index=28&type=chunk)[52](index=52&type=chunk) - Investing activities used **$133.7 million** in 2025, reflecting investments in higher-yielding assets, a change from **$356.6 million** provided in 2024 which included proceeds from the sale of JRG Re and fixed maturities[28](index=28&type=chunk)[52](index=52&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures for financial statements, covering accounting policies, investments, loss reserves, and contingent liabilities [Note 1. Accounting Policies](index=11&type=section&id=Note%201.%20Accounting%20Policies) This note details the company's organizational structure, basis of financial statement presentation, and key accounting policies - The Company is an exempted holding company registered in Bermuda, owning five U.S.-based specialty insurance companies[31](index=31&type=chunk) - The sale of JRG Re, which closed on April 16, 2024, is presented as discontinued operations due to its strategic impact[31](index=31&type=chunk)[34](index=34&type=chunk) - The effective tax rate on income from continuing operations was **30.1%** and **31.0%** for the three and six months ended June 30, 2025, respectively, influenced by the mix of income by country and tax-advantaged securities[40](index=40&type=chunk) [Note 2. Discontinued Operations](index=13&type=section&id=Note%202.%20Discontinued%20Operations) This note details the sale of JRG Reinsurance Company Ltd. for approximately **$291.4 million**, with its operations now reported as discontinued - The sale of JRG Re to Fleming closed on April 16, 2024, for approximately **$291.4 million**, including **$152.4 million** in cash and a **$139.0 million** dividend[45](index=45&type=chunk)[46](index=46&type=chunk) - Post-closing adjustments led to an **$11.4 million** downward adjustment paid in October 2024, and a final **$483,625** downward adjustment paid in April 2025[47](index=47&type=chunk) Discontinued Operations Financials | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gross Written Premiums | $0 | $780 | $0 | $1,137 | | Net Earned Premiums | $0 | $1,720 | $0 | $10,385 | | Loss from Discontinued Operations | $0 | $(5,650) | $0 | $(13,583) | | Loss on Disposal of Discontinued Operations | $(361) | $(1,203) | $(1,775) | $(1,375) | | Total Loss from Discontinued Operations | $(361) | $(6,853) | $(1,775) | $(14,958) | [Note 3. Investments](index=15&type=section&id=Note%203.%20Investments) This note details the investment portfolio, including fixed maturity and equity securities, with fair values and unrealized gains/losses Investment Portfolio Fair Value | Investment Category | June 30, 2025 Fair Value (in thousands) | December 31, 2024 Fair Value (in thousands) | | :------------------------------- | :----------------------- | :--------------------------- | | Fixed Maturity Securities, AFS | $1,300,217 | $1,189,733 | | Equity Securities | $88,042 | $86,479 | | Bank Loan Participations | $158,871 | $142,410 | | Short-term Investments | $111,216 | $97,074 | | Other Invested Assets | $58,140 | $36,700 | | Total Invested Assets | $1,716,486 | $1,552,396 | - At June 30, 2025, the company held fixed maturity securities with **$70.2 million** in gross unrealized losses, but management concluded no credit-related impairments existed[55](index=55&type=chunk)[57](index=57&type=chunk) - Bank loan participations, primarily senior, secured floating-rate debt rated below investment grade, had an aggregate fair value of **$158.9 million** at June 30, 2025[60](index=60&type=chunk)[61](index=61&type=chunk) Net Realized & Unrealized (Losses) Gains on Investments | Net Realized & Unrealized (Losses) Gains on Investments | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :--------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Fixed Maturity Securities | $0 | $(798) | $25 | $(1,109) | | Bank Loan Participations | $253 | $(843) | $(2,061) | $(1,124) | | Equity Securities | $(605) | $(664) | $313 | $4,511 | | Total | $(352) | $(2,305) | $(1,723) | $2,278 | [Note 4. Goodwill and Intangible Assets](index=20&type=section&id=Note%204.%20Goodwill%20and%20Intangible%20Assets) This note details goodwill, constant at **$181.8 million**, and identifiable intangible assets, including trademarks and broker relationships - Goodwill remained at **$181.8 million** at June 30, 2025, and December 31, 2024[73](index=73&type=chunk) Intangible Assets | Intangible Asset Class | Life (Years) | June 30, 2025 Net (in thousands) | December 31, 2024 Net (in thousands) | | :---------------------------------- | :----------- | :---------------- | :-------------------- | | Trademarks | Indefinite | $19,700 | $19,700 | | Insurance Licenses and Authorities | Indefinite | $8,964 | $8,964 | | Broker Relationships | 24.6 | $3,604 | $3,786 | | Total Intangible Assets, Net | | $32,268 | $32,450 | [Note 5. Earnings Per Share](index=21&type=section&id=Note%205.%20Earnings%20Per%20Share) This note reconciles basic and diluted earnings per share, showing a significant decrease in EPS from continuing operations Earnings Per Share | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income Available to Common Shareholders (in thousands) | $2,790 | $5,000 | $10,395 | $17,778 | | Basic EPS (Continuing Operations) | $0.07 | $0.31 | $0.27 | $0.87 | | Diluted EPS (Continuing Operations) | $0.07 | $0.31 | $0.26 | $0.85 | | Basic EPS (Total) | $0.06 | $0.13 | $0.23 | $0.47 | | Diluted EPS (Total) | $0.06 | $0.13 | $0.22 | $0.52 | | Weighted-Average Common Shares Outstanding (Basic) | 46,032,626 | 37,869,322 | 45,918,697 | 37,801,516 | | Weighted-Average Common Shares Outstanding (Diluted) | 46,726,255 | 38,037,393 | 46,432,481 | 44,762,563 | - Potential common shares of **13,521,634** were excluded from diluted EPS calculation for the three and six months ended June 30, 2025, as their effects were anti-dilutive[76](index=76&type=chunk) [Note 6. Reserve for Losses and Loss Adjustment Expenses](index=22&type=section&id=Note%206.%20Reserve%20for%20Losses%20and%20Loss%20Adjustment%20Expenses) This note reconciles loss and loss adjustment expense reserves, detailing adverse development and the impact of Loss Portfolio Transfers and Adverse Development Covers Reserve for Losses and LAE | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Reserve for Losses and LAE Net of Reinsurance (Beginning) | $1,095,761 | $1,283,386 | $1,086,278 | $1,246,973 | | Total Incurred Losses and LAE | $113,141 | $115,471 | $212,666 | $225,520 | | Total Loss and LAE Payments | $110,482 | $100,879 | $202,452 | $178,517 | | Reserve for Losses and LAE Net of Reinsurance (End) | $1,089,181 | $1,301,662 | $1,089,181 | $1,301,662 | | Gross Reserve for Losses and LAE (End) | $3,076,498 | $2,720,198 | $3,076,498 | $2,720,198 | - Net adverse reserve development of **$3.0 million** occurred in Q2 2025 (**$2.3 million** in E&S, **$0.7 million** in Specialty Admitted), compared to **$10.7 million** adverse in Q2 2024 (all in E&S)[80](index=80&type=chunk)[81](index=81&type=chunk) - The company utilizes Loss Portfolio Transfers (LPTs) and Adverse Development Covers (ADCs) as retroactive reinsurance to transfer risk, including the Commercial Auto LPT, E&S ADC, and E&S Top Up ADC[85](index=85&type=chunk)[86](index=86&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) Deferred Retroactive Reinsurance Gain | Deferred Retroactive Reinsurance Gain | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Commercial Auto LPT (End of Period) | $5,951 | $13,047 | $5,951 | $13,047 | | E&S ADC (End of Period) | $59,330 | $0 | $59,330 | $0 | | Total Deferred Retroactive Reinsurance Gain (End of Period) | $65,281 | $13,047 | $65,281 | $13,047 | [Note 7. Other Comprehensive Income (Loss)](index=24&type=section&id=Note%207.%20Other%20Comprehensive%20Income%20(Loss)) This note summarizes other comprehensive income (loss), primarily from unrealized gains on available-for-sale fixed maturity securities Other Comprehensive Income (Loss) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Unrealized Gains (Losses) Arising During Period (Before Tax) | $6,237 | $(3,784) | $24,391 | $(13,934) | | Unrealized Gains (Losses) Arising During Period (Net of Tax) | $4,927 | $(2,989) | $19,269 | $(11,008) | | Other Comprehensive Income (Loss) | $4,927 | $(2,359) | $19,249 | $(10,132) | - The significant increase in other comprehensive income for the six months ended June 30, 2025, was primarily due to **$24.4 million** in unrealized gains on investments before taxes, compared to **$13.9 million** in losses in the prior year[94](index=94&type=chunk) [Note 8. Contingent Liabilities](index=25&type=section&id=Note%208.%20Contingent%20Liabilities) This note addresses contingent liabilities, including legal proceedings related to the JRG Re sale and credit risk from reinsurance recoverables - The company is involved in various legal proceedings, including a lawsuit against Fleming for breach of the Stock Purchase Agreement related to the JRG Re sale, and a lawsuit filed by Fleming against the company and its officers, which was dismissed on July 17, 2025[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk)[168](index=168&type=chunk) - The allowance for credit losses on reinsurance recoverables was **$1.5 million** at June 30, 2025[79](index=79&type=chunk)[99](index=99&type=chunk) - The company has indemnity agreements with Rasier and a Commercial Auto LPT with Aleka, both requiring collateral (totaling **$55.3 million** from Rasier and **$26.5 million** from Aleka at June 30, 2025) to secure obligations on legacy commercial auto policies[100](index=100&type=chunk)[102](index=102&type=chunk) [Note 9. Segment Information](index=26&type=section&id=Note%209.%20Segment%20Information) This note provides financial data for the Excess and Surplus Lines, Specialty Admitted Insurance, and Corporate and Other segments - The company's continuing operations are comprised of three reportable segments: Excess and Surplus Lines, Specialty Admitted Insurance, and Corporate and Other[105](index=105&type=chunk) Segment Financials (3 Months Ended June 30, 2025) | Metric | Excess and Surplus Lines (3M 2025, in thousands) | Specialty Admitted Insurance (3M 2025, in thousands) | Corporate and Other (3M 2025, in thousands) | Total (3M 2025, in thousands) | | :-------------------- | :--------------------------------- | :------------------------------------- | :---------------------------- | :-------------- | | Gross Written Premiums | $300,444 | $77,559 | $0 | $378,003 | | Net Earned Premiums | $141,370 | $11,239 | $0 | $152,609 | | Underwriting Profit (Loss) | $11,707 | $(1,421) | $(8,222) | $2,064 | | Segment Assets | $3,639,964 | $1,351,271 | $27,087 | $5,018,322 | Segment Financials (6 Months Ended June 30, 2025) | Metric | Excess and Surplus Lines (6M 2025, in thousands) | Specialty Admitted Insurance (6M 2025, in thousands) | Corporate and Other (6M 2025, in thousands) | Total (6M 2025, in thousands) | | :-------------------- | :--------------------------------- | :------------------------------------- | :---------------------------- | :-------------- | | Gross Written Premiums | $513,687 | $158,677 | $0 | $672,364 | | Net Earned Premiums | $278,398 | $26,113 | $0 | $304,511 | | Underwriting Profit (Loss) | $23,365 | $(1,727) | $(18,853) | $2,785 | | Segment Assets | $3,639,964 | $1,351,271 | $27,087 | $5,018,322 | [Note 10. Other Operating Expenses and Other Expenses](index=30&type=section&id=Note%2010.%20Other%20Operating%20Expenses%20and%20Other%20Expenses) This note details other operating expenses, including policy acquisition costs and corporate expenses, and non-operating legal fees Other Operating Expenses | Other Operating Expenses | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Amortization of Policy Acquisition Costs | $17,396 | $13,765 | $34,936 | $31,805 | | Other Underwriting Expenses of Operating Segments | $21,853 | $21,707 | $44,242 | $43,340 | | Other Operating Expenses of Corporate and Other Segment | $8,222 | $8,624 | $18,853 | $19,761 | | Total Other Operating Expenses | $47,471 | $44,096 | $98,031 | $94,906 | - Other expenses, primarily non-operating legal and professional fees, were **$1.0 million** and **$1.6 million** for the three and six months ended June 30, 2025, respectively[116](index=116&type=chunk) [Note 11. Senior Debt](index=30&type=section&id=Note%2011.%20Senior%20Debt) A new **$212.5 million** unsecured revolving credit facility was established, with **$210.8 million** drawn and compliance with all financial covenants - A new Credit Agreement was established on June 12, 2025, providing a **$212.5 million** unsecured revolving credit facility[117](index=117&type=chunk)[118](index=118&type=chunk) - The facility matures on June 12, 2028, and interest rates are based on SOFR plus a specified margin[118](index=118&type=chunk) - At June 30, 2025, the drawn balance on the unsecured revolver was **$210.8 million**, and the company was in compliance with all financial covenants[119](index=119&type=chunk)[121](index=121&type=chunk) [Note 12. Fair Value Measurements](index=30&type=section&id=Note%2012.%20Fair%20Value%20Measurements) This note describes the fair value measurement hierarchy for financial instruments, including fixed maturity and equity securities - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[123](index=123&type=chunk) Fair Value Measurements | Asset Category | Level 1 (June 30, 2025, in thousands) | Level 2 (June 30, 2025, in thousands) | Level 3 (June 30, 2025, in thousands) | Total (June 30, 2025, in thousands) | | :---------------------------- | :---------------------- | :---------------------- | :---------------------- | :-------------------- | | Fixed Maturity Securities, AFS | $18,292 | $1,281,925 | $0 | $1,300,217 | | Equity Securities | $12,488 | $75,553 | $1 | $88,042 | | Bank Loan Participations | $0 | $158,871 | $0 | $158,871 | | Short-term Investments | $0 | $111,216 | $0 | $111,216 | - The company held one equity security with a fair value of **$1,000** at June 30, 2025, determined using Level 3 inputs (internal model)[130](index=130&type=chunk) [Note 13. Series A Preferred Shares](index=34&type=section&id=Note%2013.%20Series%20A%20Preferred%20Shares) This note details the **112,500** outstanding 7% Series A Preferred Shares, convertible into common stock, with **$37.5 million** converted in November 2024 - **112,500** Series A Preferred Shares are outstanding, with a **7%** annual dividend rate, convertible into common shares at **$8.32** per share[141](index=141&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - Dividends on Series A preferred shares were **$3.9 million** for the six months ended June 30, 2025[143](index=143&type=chunk) - The Series A Preferred Shares are classified as mezzanine equity at a fair value of **$133.1 million** due to potential repurchase upon change of control events[149](index=149&type=chunk) [Note 14. Capital Stock and Equity Awards](index=35&type=section&id=Note%2014.%20Capital%20Stock%20and%20Equity%20Awards) This note details changes in common shares, quarterly dividends of **$0.01** per share, and activity under equity incentive plans - Common shares outstanding increased from **45,644,318** at December 31, 2024, to **45,895,335** at June 30, 2025, due to RSU vesting[153](index=153&type=chunk) Dividends per Common Share | Dividend per Common Share | Total Amount (in thousands) | | :------------------------ | :-------------------------- | | $0.01 (Feb 20, 2025) | $477 | | $0.01 (Apr 24, 2025) | $476 | | Total (6M 2025) | $954 | | Total (6M 2024) | $3,879 | RSU Activity | RSU Activity (Shares) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Unvested, Beginning of Period | 885,173 | 751,254 | | Granted | 1,321,733 | 537,060 | | Vested | (362,216) | (268,993) | | Forfeited | (121,369) | (76,305) | | Unvested, End of Period | 1,723,321 | 943,016 | - Share-based compensation expense was **$3.5 million** for the six months ended June 30, 2025, with **$6.9 million** unrecognized expense remaining[164](index=164&type=chunk) [Note 15. Subsequent Events](index=36&type=section&id=Note%2015.%20Subsequent%20Events) This note reports subsequent events, including dividend declarations, equity award approvals, and the dismissal of Fleming's lawsuit - On July 24, 2025, the Board declared a cash dividend of **$0.01** per common share and up to **$2.0 million** on Series A Preferred Shares, both payable September 30, 2025[165](index=165&type=chunk) - Equity awards under the 2014 LTIP and 2014 Director Plan were approved on July 24, 2025, with fair values of **$250,000** and **$31,000**, respectively[167](index=167&type=chunk) - The U.S. District Court dismissed Fleming's lawsuit against the company on July 17, 2025, with an appeal deadline of August 18, 2025[168](index=168&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition and results, covering business overview, key metrics, strategic actions, and segment performance Key Operating Results | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gross Written Premiums | $378,003 | $412,247 | $672,364 | $743,057 | | Net Earned Premiums | $152,609 | $163,193 | $304,511 | $334,884 | | Underwriting Profit | $2,064 | $1,219 | $2,785 | $9,359 | | Net Income Available to Common Shareholders | $2,790 | $5,000 | $10,395 | $17,778 | | Adjusted Net Operating Income | $11,693 | $12,664 | $20,795 | $27,496 | | Combined Ratio | 98.6% | 99.3% | 99.1% | 97.2% | | Loss Ratio | 68.1% | 73.0% | 67.4% | 69.6% | | Expense Ratio | 30.5% | 26.3% | 31.7% | 27.6% | [Our Business](index=38&type=section&id=Our%20Business) The company operates through three continuing segments: Excess and Surplus Lines, Specialty Admitted Insurance, and Corporate and Other - The company operates through three continuing reportable segments: Excess and Surplus Lines, Specialty Admitted Insurance, and Corporate and Other[172](index=172&type=chunk)[176](index=176&type=chunk) - JRG Reinsurance Company Ltd. (former Casualty Reinsurance segment) is classified as discontinued operations after its sale on April 16, 2024[172](index=172&type=chunk) - The A.M. Best Company financial strength rating for the U.S. insurance subsidiaries is '**A-**' (Excellent)[174](index=174&type=chunk) [Key Metrics](index=38&type=section&id=Key%20Metrics) This section defines key financial and operational metrics, including non-GAAP measures like underwriting profit and adjusted net operating income - Underwriting profit is a non-GAAP measure defined as net earned premiums and gross fee income less losses and loss adjustment expenses (excluding retroactive reinsurance) and other operating expenses[176](index=176&type=chunk)[177](index=177&type=chunk) - Adjusted net operating income is a non-GAAP measure that excludes discontinued operations, retroactive reinsurance impact, net realized/unrealized investment gains/losses, and certain non-operating expenses[182](index=182&type=chunk) - Tangible equity and tangible common equity are non-GAAP measures used to assess balance sheet strength and returns, excluding goodwill and intangible assets[183](index=183&type=chunk)[185](index=185&type=chunk) [Critical Accounting Policies and Estimates](index=40&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant estimates for loss reserves and investment valuation, with no material changes this year - The most critical accounting policies involve significant estimates related to the reserve for losses and loss adjustment expenses and investment valuation and impairment[190](index=190&type=chunk) - There have been no significant changes to these critical accounting policies during the current year[190](index=190&type=chunk) [Recent Strategic Actions](index=40&type=section&id=Recent%20Strategic%20Actions) Recent strategic actions include a **$313.2 million** E&S ADC with State National, a strategic relationship with Enstar, and Series A Preferred Share amendments - The company entered into an E&S ADC with State National, effective January 1, 2024, reinsuring **85%** of losses in excess of **$716.6 million** up to **$467.1 million** for a **$313.2 million** premium[192](index=192&type=chunk)[193](index=193&type=chunk) - A strategic relationship with Enstar included a **$12.5 million** common share purchase and an E&S Top Up ADC for a **$52.8 million** premium, reinsuring **100%** of E&S casualty losses (2010-2023) up to **$75.0 million** above the E&S ADC limit[194](index=194&type=chunk) - The Series A Preferred Shares were amended, converting **$37.5 million** to common stock, increasing the voluntary conversion price, and delaying the dividend rate reset[195](index=195&type=chunk)[196](index=196&type=chunk) [Results of Operations](index=42&type=section&id=RESULTS%20OF%20OPERATIONS) Operating results show decreased net income and adjusted net operating income, with varied underwriting profits and declining investment income [Three Months Ended June 30, 2025 and 2024](index=42&type=section&id=Three%20Months%20Ended%20June%2030,%202025%20and%202024) Net income from continuing operations decreased to **$5.1 million**, while underwriting profit increased to **$2.1 million** with a **98.6%** combined ratio - Net income from continuing operations decreased by **64.6%** to **$5.1 million** in Q2 2025[198](index=198&type=chunk) - Underwriting profit increased by **69.3%** to **$2.1 million**, with a combined ratio of **98.6%** (vs. **99.3%** in Q2 2024)[197](index=197&type=chunk)[199](index=199&type=chunk) - The loss ratio improved to **68.1%** from **73.0%** in Q2 2024, primarily due to less net adverse reserve development (**$3.0 million** adverse in Q2 2025 vs. **$10.7 million** adverse in Q2 2024)[197](index=197&type=chunk)[201](index=201&type=chunk) - Investment income declined by **17.7%** (**$4.4 million**) due to lower invested assets and yields[197](index=197&type=chunk)[203](index=203&type=chunk) [Six Months Ended June 30, 2025 and 2024](index=43&type=section&id=Six%20Months%20Ended%20June%2030,%202025%20and%202024) Net income from continuing operations decreased to **$16.1 million**, and underwriting profit declined to **$2.8 million** with a **99.1%** combined ratio - Net income from continuing operations decreased by **57.6%** to **$16.1 million** for the six months ended June 30, 2025[197](index=197&type=chunk)[206](index=206&type=chunk) - Underwriting profit decreased by **70.2%** to **$2.8 million**, with a combined ratio of **99.1%** (vs. **97.2%** in 6M 2024)[197](index=197&type=chunk)[207](index=207&type=chunk) - The loss ratio improved to **67.4%** from **69.6%** in 6M 2024, driven by less net adverse reserve development (**$2.9 million** adverse in 6M 2025 vs. **$10.3 million** adverse in 6M 2024)[197](index=197&type=chunk)[208](index=208&type=chunk) - Investment income declined by **14.8%** (**$7.0 million**) due to lower invested assets and yields[197](index=197&type=chunk)[211](index=211&type=chunk) [Loss Portfolio Transfers and Adverse Development Covers](index=44&type=section&id=Loss%20Portfolio%20Transfers%20and%20Adverse%20Development%20Covers) The company uses LPTs and ADCs as retroactive reinsurance to transfer loss risks, deferring gains recognized proportionally to paid recoveries - LPTs and ADCs are retroactive reinsurance forms used to transfer losses and associated risk of adverse development[214](index=214&type=chunk) - The Commercial Auto LPT with Aleka reinsures substantially all of the Excess and Surplus Lines segment's legacy commercial auto policies issued to Rasier[215](index=215&type=chunk) - Retroactive reinsurance accounting defers gains and recognizes them in proportion to actual paid recoveries, which can cause short-term volatility[216](index=216&type=chunk) Deferred Retroactive Reinsurance Gain | Deferred Retroactive Reinsurance Gain | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Commercial Auto LPT (End of Period) | $5,951 | $13,047 | $5,951 | $13,047 | | E&S ADC (End of Period) | $59,330 | $0 | $59,330 | $0 | | Total Deferred Retroactive Reinsurance Gain (End of Period) | $65,281 | $13,047 | $65,281 | $13,047 | [Premiums](index=45&type=section&id=Premiums) Gross written premiums increased for E&S but declined significantly for Specialty Admitted Insurance due to non-renewals Premiums | Premium Type | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gross Written Premiums | $378,003 | $412,247 | $672,364 | $743,057 | | Excess and Surplus Lines GWP | $300,444 (2.6% YoY) | $292,836 | $513,687 (1.4% YoY) | $506,527 | | Specialty Admitted Insurance GWP | $77,559 (-35.0% YoY) | $119,411 | $158,677 (-32.9% YoY) | $236,530 | | Net Written Premiums | $175,990 (-3.0% YoY) | $181,353 | $303,946 (-4.9% YoY) | $319,525 | | Net Earned Premiums | $152,609 (-6.5% YoY) | $163,193 | $304,511 (-9.1% YoY) | $334,884 | - Excess and Surplus Lines segment's gross written premiums grew by **2.6%** and **1.4%** for the three and six months, respectively, driven by expansion in largest underwriting divisions and renewal rate increases (**13.9%** and **11.7%**)[219](index=219&type=chunk)[220](index=220&type=chunk) - Specialty Admitted Insurance segment's gross written premiums declined significantly (**-35.0%** and **-32.9%**) due to non-renewals in fronting business and the run-off of workers' compensation premium[219](index=219&type=chunk)[220](index=220&type=chunk) [Net Retention](index=46&type=section&id=Net%20Retention) Net premium retention remained stable for E&S but declined for Specialty Admitted Insurance due to business mix changes Net Premium Retention | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Excess and Surplus Lines | 55.5% | 55.2% | 54.8% | 55.1% | | Specialty Admitted Insurance | 12.0% | 16.5% | 14.0% | 17.1% | | Total | 46.6% | 44.0% | 45.2% | 43.0% | - Net premium retention for Specialty Admitted Insurance declined due to business mix changes and reinsurance renewals, reflecting the strategy to retain minimal risk[222](index=222&type=chunk) [Segment Results](index=47&type=section&id=Segment%20Results) This section details combined ratios and underwriting performance, showing improved E&S results but underwriting losses in Specialty Admitted Insurance Segment Combined Ratios | Segment Combined Ratios | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Excess and Surplus Lines | 91.7% | 95.4% | 91.6% | 91.3% | | Specialty Admitted Insurance | 112.6% | 85.0% | 106.6% | 91.4% | | Total | 98.6% | 99.3% | 99.1% | 97.2% | [Excess and Surplus Lines Segment](index=47&type=section&id=Excess%20and%20Surplus%20Lines%20Segment) The E&S segment reported increased underwriting profits and an improved combined ratio, driven by less adverse reserve development Excess and Surplus Lines Segment Performance | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Underwriting Profit (in thousands) | $11,707 (82.2% YoY) | $6,427 | $23,365 (-6.2% YoY) | $24,918 | | Loss Ratio | 66.4% | 72.3% | 65.6% | 68.2% | | Expense Ratio | 25.3% | 23.1% | 26.0% | 23.1% | | Combined Ratio | 91.7% | 95.4% | 91.6% | 91.3% | - The loss ratio improved due to less net adverse reserve development (**$2.3 million** adverse in Q2 2025 vs. **$10.7 million** adverse in Q2 2024)[226](index=226&type=chunk) - The expense ratio increased due to lower ceding commissions and higher expenses for consulting, software, and bad debts[227](index=227&type=chunk)[230](index=230&type=chunk) [Specialty Admitted Insurance Segment](index=48&type=section&id=Specialty%20Admitted%20Insurance%20Segment) The Specialty Admitted Insurance segment reported underwriting losses, driven by declining earned premiums and adverse reserve development Specialty Admitted Insurance Segment Performance | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Underwriting Profit (Loss) (in thousands) | $(1,421) | $3,416 | $(1,727) | $4,202 | | Loss Ratio | 89.3% | 77.5% | 86.9% | 78.0% | | Expense Ratio | 23.3% | 7.5% | 19.7% | 13.4% | | Combined Ratio | 112.6% | 85.0% | 106.6% | 91.4% | - Net earned premium and fee income declined due to non-renewal of several programs, aligning with the company's strategy to retain minimal risk[232](index=232&type=chunk) - The segment experienced **$0.7 million** and **$0.6 million** of adverse prior year reserve development for the three and six months ended June 30, 2025, respectively[232](index=232&type=chunk) [Corporate and Other Segment](index=48&type=section&id=Corporate%20and%20Other%20Segment) The Corporate and Other segment's operating expenses decreased due to reduced compensation, insurance, and audit expenses Corporate and Other Segment Operating Expenses | Operating Expenses | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Operating Expenses | $8,222 | $8,624 | $18,853 | $19,761 | - The reduction in operating expenses was mainly due to lower compensation, insurance, and financial audit expenses[233](index=233&type=chunk) [Investing Results](index=49&type=section&id=Investing%20Results) Net investment income decreased due to lower invested assets and yields, with net realized and unrealized investment losses reported Investing Results | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Investment Income | $20,516 (-17.7% YoY) | $24,931 | $40,524 (-14.8% YoY) | $47,563 | | Net Realized and Unrealized (Losses) Gains on Investments | $(352) | $(2,305) | $(1,723) | $2,278 | | Annualized Gross Investment Yield (Cash & Invested Assets) | 4.4% | 4.8% | 4.3% | 4.7% | - The decline in net investment income was driven by lower invested assets due to funding strategic initiatives and lower yields[234](index=234&type=chunk) - At June 30, 2025, **100.0%** of the fixed maturity security portfolio was rated '**BBB-**' or better (investment grade), with no credit-related impairments[239](index=239&type=chunk)[57](index=57&type=chunk) [Other Income and Expense](index=51&type=section&id=Other%20Income%20and%20Expense) Other income and expense primarily comprises non-operating legal and professional fees, partially offset by broker incentive rebates Other Income and (Expense) | Item | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Non-operating Expenses | $(1,008) | $(2,098) | $(1,571) | $(2,830) | | Broker Incentive Rebates | $1,163 | $993 | $1,998 | $1,701 | | Other Income and (Expense) | $234 | $(905) | $589 | $(726) | - Non-operating expenses primarily include legal and professional fees related to strategic initiatives and litigation[242](index=242&type=chunk) [Interest Expense](index=51&type=section&id=Interest%20Expense) Interest expense decreased for both periods, primarily attributable to lower interest rates Interest Expense | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Interest Expense | $5,805 (-8.5% YoY) | $6,344 | $11,346 (-11.6% YoY) | $12,829 | - The decrease in interest expense is primarily attributable to lower interest rates[243](index=243&type=chunk) [Amortization of Intangibles and Impairment of Intangible Assets](index=51&type=section&id=Amortization%20of%20Intangibles%20and%20Impairment%20of%20Intangible%20Assets) Amortization of intangible assets remained consistent at **$91,000** for three months and **$182,000** for six months Amortization of Intangible Assets | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Amortization of Intangible Assets | $91 | $91 | $182 | $182 | [Income Tax Expense](index=51&type=section&id=Income%20Tax%20Expense) Income tax expense on continuing operations decreased, reflecting lower pre-tax income and fluctuating effective tax rates Income Tax Expense on Continuing Operations | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income Tax Expense on Continuing Operations | $2,207 (-61.4% YoY) | $5,711 | $7,228 (-52.3% YoY) | $15,163 | | Effective Tax Rate on Continuing Operations | 30.1% | 28.3% | 31.0% | 28.5% | - Statutory tax rates are **0%** for Bermuda and **21%** for the U.S., influencing the effective tax rate[245](index=245&type=chunk) [Reserves](index=51&type=section&id=Reserves) Gross reserves for losses and LAE totaled **$3,076.5 million**, with **74.4%** attributed to IBNR reserves - Gross reserve for losses and loss adjustment expenses was **$3,076.5 million** at June 30, 2025, with **74.4%** being IBNR[247](index=247&type=chunk) - Net reserves for losses and loss adjustment expenses were **$1,089.2 million** at June 30, 2025, with **64.1%** being IBNR[247](index=247&type=chunk) Segment Gross Reserves | Segment Gross Reserves | Case (in thousands) | IBNR (in thousands) | Total (in thousands) | | :---------------------------------- | :--- | :--- | :---- | | Excess and Surplus Lines | $435,091 | $1,821,392 | $2,256,483 | | Specialty Admitted Insurance | $352,404 | $467,611 | $820,015 | | Total | $787,495 | $2,289,003 | $3,076,498 | [Liquidity and Capital Resources](index=52&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section covers liquidity and capital resources, including cash flow, dividend policies, debt, reinsurance, and credit ratings [Sources and Uses of Funds](index=52&type=section&id=Sources%20and%20Uses%20of%20Funds) Cash was used in operating and investing activities for the six months ended June 30, 2025, a reversal from the prior year Cash Flow Summary | Cash Flow Category | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :--------------------------- | :--------------------------- | | Operating Activities (Excl. Restricted Cash) | $(26,926) | $59,883 | | Investing Activities | $(133,699) | $356,628 | | Financing Activities | $18,321 | $(31,488) | | Change in Cash, Cash Equivalents, and Restricted Cash Equivalents | $(141,688) | $340,537 | - Cash used in operating activities was impacted by timing of reinsurance settlements and lower premium collections in the Specialty Admitted Insurance segment[249](index=249&type=chunk) - Cash used in investing activities reflects efforts to enhance portfolio yield by investing available cash into higher-yielding assets[250](index=250&type=chunk) [Dividends](index=53&type=section&id=Dividends) Dividend payments are subject to statutory limitations, with **$64.3 million** available from U.S. insurance subsidiaries in 2025 - The maximum amount of dividends available to the U.S. holding company from its U.S. insurance subsidiaries during 2025 without regulatory approval is **$64.3 million**[255](index=255&type=chunk) - Cash dividends of **$3.9 million** were paid on Series A Preferred Shares for the six months ended June 30, 2025[256](index=256&type=chunk) - At June 30, 2025, the Bermuda holding company had **$20.8 million** in cash and cash equivalents[257](index=257&type=chunk) [Credit Agreements](index=53&type=section&id=Credit%20Agreements) A new **$212.5 million** unsecured revolving credit facility was established, with **$210.8 million** drawn and compliance with all financial covenants - A new Credit Agreement provides a **$212.5 million** unsecured revolving credit facility, maturing June 12, 2028[258](index=258&type=chunk)[259](index=259&type=chunk) - At June 30, 2025, **$210.8 million** was outstanding on the unsecured revolver[260](index=260&type=chunk) - The company was in compliance with financial covenants, including a maximum leverage ratio of **35.0%**[262](index=262&type=chunk)[268](index=268&type=chunk) [Senior Debt and Trust Preferred Securities](index=54&type=section&id=Senior%20Debt%20and%20Trust%20Preferred%20Securities) The company holds **$15.0 million** in senior debt and **$104.1 million** in junior subordinated debt, maintaining a leverage ratio of **28.5%** - The company has **$15.0 million** of senior debt due April 29, 2034, with a floating interest rate[264](index=264&type=chunk) - Junior subordinated debt, issued through five Delaware statutory trusts, had a carrying amount of **$104.1 million** (net of repurchases) at June 30, 2025[265](index=265&type=chunk)[266](index=266&type=chunk) - The company's leverage ratio was **28.5%** at June 30, 2025, compared to **26.6%** at December 31, 2024, remaining below the **35.0%** maximum[268](index=268&type=chunk) [Ceded Reinsurance](index=55&type=section&id=Ceded%20Reinsurance) Net premium retention was **45.2%**, with property catastrophe exposure managed by a **$22.0 million** reinsurance limit - Net premium retention was **45.2%** for the six months ended June 30, 2025[270](index=270&type=chunk) - The company estimates its pre-tax group-wide PML from a 1 in 1,000 year property catastrophe event would not exceed **2.5%** of shareholders' equity[276](index=276&type=chunk)[281](index=281&type=chunk) - Reinsurance recoverables on unpaid losses were **$1,985.8 million** at June 30, 2025, with material amounts from A.M. Best '**A-**' or better rated companies, or collateralized[283](index=283&type=chunk) [Amounts Recoverable from an Indemnifying Party and Reinsurer on Legacy Commercial Auto Book](index=56&type=section&id=Amounts%20Recoverable%20from%20an%20Indemnifying%20Party%20and%20Reinsurer%20on%20Legacy%20Commercial%20Auto%20Book) Indemnity agreements with Rasier and Aleka require collateral totaling **$55.3 million** and **$26.5 million**, respectively, for legacy commercial auto policies - Indemnity agreements with Rasier and a Commercial Auto LPT with Aleka cover legacy commercial auto policies[284](index=284&type=chunk) - Rasier and Aleka are required to post collateral equal to **102%** of estimated obligations, totaling **$55.3 million** and **$26.5 million**, respectively, at June 30, 2025[285](index=285&type=chunk)[286](index=286&type=chunk) - The company monitors credit exposure and requests additional collateral to mitigate risks if estimated losses grow faster than collateral balances[287](index=287&type=chunk) [Ratings](index=57&type=section&id=Ratings) A.M. Best's financial strength rating for U.S. insurance subsidiaries is '**A-**' (Excellent) with a negative outlook - The A.M. Best financial strength rating for U.S. insurance subsidiaries is '**A-**' (Excellent) with a negative outlook[288](index=288&type=chunk) - This rating is the fourth highest of thirteen ratings and indicates an excellent ability to meet policyholder obligations[288](index=288&type=chunk) - The rating impacts the ability to attract and retain agents/brokers and influences the risk profiles of insurance submissions[289](index=289&type=chunk) [Series A Preferred Shares](index=57&type=section&id=Series%20A%20Preferred%20Shares) The company has **112,500** Series A Preferred Shares outstanding, accruing dividends at **7%** per annum, after a **$37.5 million** conversion - **150,000** Series A Preferred Shares were issued for **$150.0 million** on March 1, 2022[290](index=290&type=chunk) - An amendment on November 11, 2024, converted **37,500** shares to common stock, resulting in **112,500** shares remaining outstanding[291](index=291&type=chunk) - Dividends accrue quarterly at **7%** of the liquidation preference per annum[290](index=290&type=chunk) [Equity](index=57&type=section&id=EQUITY) This section details common shares outstanding, share-based compensation expense, and equity incentive plan activity, including RSUs [Common Shares](index=57&type=section&id=Common%20Shares) Common shares outstanding increased to **45,895,335** by June 30, 2025, primarily due to RSU vesting - Common shares outstanding increased by **251,017** shares from December 31, 2024, to June 30, 2025, due to RSU vesting[292](index=292&type=chunk) [Share Based Compensation Expense](index=57&type=section&id=Share%20Based%20Compensation%20Expense) Share-based compensation expense was **$834,000** for three months and **$3.5 million** for six months, with **$6.9 million** unrecognized Share Based Compensation Expense | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Share Based Compensation Expense | $834 | $1,553 | $3,494 | $4,228 | - As of June 30, 2025, **$6.9 million** of unrecognized share-based compensation expense is expected to be charged to earnings over a weighted-average period of **2.0 years**[293](index=293&type=chunk) [Equity Incentive Plans](index=58&type=section&id=Equity%20Incentive%20Plans) This section summarizes equity incentive plan activity, showing an increase in unvested RSUs, including new PRSU grants RSU Activity | RSU Activity (Shares) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Unvested, Beginning of Period | 885,173 | 751,254 | | Granted | 1,321,733 | 537,060 | | Vested | (362,216) | (268,993) | | Forfeited | (121,369) | (76,305) | | Unvested, End of Period | 1,723,321 | 943,016 | - RSUs granted in 2025 and 2024 included **620,108** and **231,492** PRSU awards, respectively[294](index=294&type=chunk) - No options were outstanding after the six months ended June 30, 2024, as all previous options lapsed[295](index=295&type=chunk) [Underwriting Performance Ratios](index=59&type=section&id=Underwriting%20Performance%20Ratios) This section presents underwriting performance ratios for continuing operations, both excluding and including retroactive reinsurance impact Underwriting Performance Ratios | Ratio | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Excess and Surplus Lines Loss Ratio | 66.4% | 72.3% | 65.6% | 68.2% | | Excess and Surplus Lines Combined Ratio | 91.7% | 95.4% | 91.6% | 91.3% | | Consolidated Loss Ratio | 68.1% | 73.0% | 67.4% | 69.6% | | Consolidated Combined Ratio | 98.6% | 99.3% | 99.1% | 97.2% | | Consolidated Combined Ratio (incl. retroactive reinsurance) | 104.7% | 97.0% | 101.5% | 94.9% | - The consolidated combined ratio, including the impact of retroactive reinsurance, was **104.7%** for the three months and **101.5%** for the six months ended June 30, 2025[298](index=298&type=chunk) [Reconciliation of Non-GAAP Measures](index=60&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20MEASURES) This section reconciles non-GAAP measures, including underwriting profit, adjusted net operating income, and tangible equity, to GAAP equivalents [Reconciliation of Underwriting Profit](index=60&type=section&id=Reconciliation%20of%20Underwriting%20Profit) This reconciliation details underwriting profit, a non-GAAP measure, derived from income from continuing operations before income taxes Reconciliation of Underwriting Profit | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Underwriting Profit of Operating Segments | $10,286 | $9,843 | $21,638 | $29,120 | | Other Operating Expenses of Corporate and Other Segment | $(8,222) | $(8,624) | $(18,853) | $(19,761) | | Underwriting Profit | $2,064 | $1,219 | $2,785 | $9,359 | | Income from Continuing Operations Before Income Taxes | $7,327 | $20,189 | $23,336 | $53,149 | [Reconciliation of Adjusted Net Operating Income](index=61&type=section&id=Reconciliation%20of%20Adjusted%20Net%20Operating%20Income) This reconciliation adjusts GAAP net income to derive adjusted net operating income, excluding discontinued operations and investment gains/losses Reconciliation of Adjusted Net Operating Income | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Income Available to Common Shareholders | $2,790 | $5,000 | $10,395 | $17,778 | | Loss from Discontinued Operations | $361 | $6,853 | $1,775 | $14,958 | | Losses and LAE - Retroactive Reinsurance | $7,299 | $(2,910) | $5,776 | $(6,072) | | Net Realized and Unrealized Investment Losses (Gains) | $278 | $1,821 | $1,361 | $(1,800) | | Other Expenses | $965 | $1,900 | $1,488 | $2,632 | | Adjusted Net Operating Income | $11,693 | $12,664 | $20,795 | $27,496 | [Tangible Equity (per Share) and Tangible Common Equity (per Share)](index=62&type=section&id=Tangible%20Equity%20(per%20Share)%20and%20Tangible%20Common%20Equity%20(per%20Share)) This reconciliation presents tangible equity and tangible common equity, non-GAAP measures, adjusted for preferred shares, goodwill, and intangibles Tangible Equity (per Share) and Tangible Common Equity (per Share) | Metric | June 30, 2025 (in thousands, except share amounts) | December 31, 2024 (in thousands, except share amounts) | June 30, 2024 (in thousands, except share amounts) | | :---------------------------------------- | :------------ | :---------------- | :------------ | | Shareholders' Equity | $492,558 | $460,915 | $541,791 | | Plus: Series A Redeemable Preferred Shares | $133,115 | $133,115 | $144,898 | | Plus: Deferred Reinsurance Gain | $65,281 | $57,970 | $13,047 | | Less: Goodwill | $181,831 | $181,831 | $181,831 | | Less: Intangible Assets, Net | $32,268 | $32,450 | $32,631 | | Tangible Equity | $476,855 | $437,719 | $485,274 | | Tangible Common Equity | $343,740 | $304,604 | $340,376 | | Tangible Equity per Share | $8.03 | $7.40 | $10.86 | | Tangible Common Equity per Share | $7.49 | $6.67 | $9.00 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=63&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section addresses market risk exposure, primarily interest rate and equity price risk, with no material changes reported - The company's primary market risks are interest rate risk (fixed maturities) and equity price risk (equity securities)[309](index=309&type=chunk) - There have been no material changes in market risk from the prior Annual Report on Form 10-K[310](index=310&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes in internal controls over financial reporting - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[311](index=311&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[312](index=312&type=chunk) - The effectiveness of any control system is subject to inherent limitations, providing reasonable, not absolute, assurance[313](index=313&type=chunk) [PART II. OTHER INFORMATION](index=63&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes other required information such as legal proceedings, risk factors, sales of equity securities, defaults, and exhibits [Item 1. Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates legal proceedings information by reference from Note 8, 'Contingent Liabilities - Legal Proceedings' - Information on legal proceedings is incorporated by reference from Note 8, 'Contingent Liabilities - Legal Proceedings'[314](index=314&type=chunk) [Item 1A. Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) No material changes in risk factors occurred during the quarter ended June 30, 2025, compared to the prior Annual Report on Form 10-K - No material changes in risk factors occurred during the quarter ended June 30, 2025, compared to the Annual Report on Form 10-K for December 31, 2024[315](index=315&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period - No unregistered sales of equity securities or use of proceeds to report[316](index=316&type=chunk) [Item 3. Defaults Upon Senior Securities](index=63&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported for the period - No defaults upon senior securities to report[316](index=316&type=chunk) [Item 4. Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the company - Mine Safety Disclosures are not applicable to the company[316](index=316&type=chunk) [Item 5. Other Information](index=63&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period - No other information to report[317](index=317&type=chunk) [Item 6. Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including agreements, certifications, and XBRL documents - Exhibits include the James River Group Holdings, Ltd. Short-Term Incentive Plan, Amended and Restated Employment Agreement, and the Credit Agreement dated June 12, 2025[318](index=318&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer are included, along with Inline XBRL documents[318](index=318&type=chunk) [Signatures](index=65&type=section&id=Signatures) This section contains the official signatures of the Chief Executive Officer and Chief Financial Officer, certifying the report's submission [Report Signatures](index=65&type=section&id=Report%20Signatures) The report was signed on August 5, 2025, by the Chief Executive Officer and Chief Financial Officer - The report was signed on August 5, 2025, by Frank N. D'Orazio (CEO) and Sarah C. Doran (CFO)[324](index=324&type=chunk)

Financial Data and Key Metrics Changes - The company reported an annualized adjusted net operating return on tangible common equity of 14%, consistent with its mid-teens return target [5] - Adjusted net operating income for the second quarter was $0.23 per share, with net income from continuing operations available to common shareholders at $3.2 million or $0.07 per diluted share [16] - The combined ratio for the group was 98.6%, consisting of a 68.1% loss ratio and a 30.5% expense ratio, with the expense ratio improving over two points sequentially [17][18] Business Line Data and Key Metrics Changes - The E and S segment grew 3% year-over-year, with gross written premium per casualty E and S increasing by 4% compared to the prior year quarter [8][9] - Allied Health saw a 25% growth, while energy grew by 12% during the quarter [9] - Renewal rates remained healthy across most divisions, with overall casualty rates up 14% in the quarter, including over 20% rate change in the excess casualty portfolio [9] Market Data and Key Metrics Changes - Submission volume increased by 6% during the quarter, reflecting the strength of the E and S market and broker relationships [9] - The company surpassed $300 million in E and S gross written premiums in a single quarter for the first time, marking a significant milestone [9] Company Strategy and Development Direction - The company is focused on increasing profitability and delivering shareholder value as a leading specialty insurer in the E and S space [5] - A strategic shift towards smaller accounts has been emphasized, with a deliberate reduction in exposure to larger, more commoditized sectors [7][10] - The company is planning a redomicile to the United States, expected to bring operational efficiencies and significant cost savings [13][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's turnaround, citing improved performance monitoring and underwriting governance processes [6][10] - The company anticipates continued measured growth in the second half of the year, supported by strong operational and strategic progress [52] Other Important Information - The company reported a significant reduction in segment expenses, declining over 20% compared to the same period last year [15] - The effective tax rate is expected to decrease closer to the U.S. statutory rate following the redomicile, with anticipated one-time and ongoing tax benefits [23][24] Q&A Session Summary Question: What end markets are being targeted for excess casualty growth? - The company is focusing on manufacturers, premises risks, and hospitality risks, moving down market and away from larger accounts [26][28] Question: How is policy or premium retention trending? - Policy count retention remains stable between 60-65%, while premium retention has dropped significantly due to the shift towards smaller accounts [30][31] Question: Is there more room to reduce the expense ratio in 2026? - There may be additional opportunities to reduce the expense ratio beyond the expected 31% for this year [37][38] Question: How will the one-time benefit from redomiciling be realized? - The benefit will come through a lower effective tax rate, increasing EPS and earnings once the redomicile is effective [39][41] Question: Any changes to terms and conditions from the quota share? - No significant changes were made to terms, with a slight reduction in quota share reflecting confidence in business written since 2023 [45]

James River Group (JRVR) came out with quarterly earnings of $0.23 per share, beating the Zacks Consensus Estimate of $0.22 per share. This compares to earnings of $0.33 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +4.55%. A quarter ago, it was expected that this insurance holding company would post earnings of $0.24 per share when it actually produced earnings of $0.19, delivering a surprise of -20.83%.Over the last four q ...

James River Group (JRVR 1.47%), a specialty insurance provider focused on Excess & Surplus (E&S) lines and Specialty Admitted insurance, released its second quarter 2025 results on August 4, 2025. The company's Non-GAAP earnings per share were in line with analyst expectations at $0.23. However, GAAP revenue of $152.6 million was just below the $153.65 million consensus estimate. While the quarter was notable for record new business in its core E&S segment, overall profit metrics declined, and lower perform ...

| | Three Months Ended | | | | | | Three Months Ended | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | June 30, | | | | | | June 30, | | | ($ in thousands, except for share data) | 2025 | | | per diluted share | 2024 | | | per diluted share | | Net income from continuing operations available to | | | | | | | | | | common shareholders | $ | 3,151 | $ | 0.07 | $ | 11,853 | $ | 0.31 | | 2 Net loss from discontinued operations | | (361) | $ | (0.01) | | (6,853) | $ | (0.18) | | Net income availab ...

Core Insights - James River Group Holdings reported a net income from continuing operations of $3.2 million ($0.07 per diluted share) for Q2 2025, a significant decrease from $11.9 million ($0.31 per diluted share) in Q2 2024 [1][2] - The adjusted net operating income for the same period was $11.7 million ($0.23 per diluted share), down from $12.7 million ($0.33 per diluted share) year-over-year [1][2] - The company emphasized its strategic focus on growing its casualty E&S business through disciplined underwriting and expense management [3] Financial Performance - The total gross written premium for Q2 2025 was $378.0 million, a decrease of 8% from $412.2 million in Q2 2024 [6] - The E&S segment achieved a combined ratio of 91.7%, with a renewal rate change of 13.9%, driven by price increases across most divisions [5][29] - The Specialty Admitted Insurance segment saw a gross written premium decline of 30.7% compared to the prior year quarter [5][32] Investment Results - Net investment income for Q2 2025 was $20.5 million, slightly up from $20.0 million in the previous quarter but down 17.7% from $24.9 million in Q2 2024 [7][9] - The annualized gross investment yield was 4.6%, consistent with the previous quarter but lower than 5.0% in Q2 2024 [9] Capital Management - The Board of Directors declared a cash dividend of $0.01 per common share, payable on September 30, 2025 [11] - Tangible common equity increased by 12.8% to $343.7 million as of June 30, 2025, compared to $304.6 million at the end of 2024 [12] Segment Highlights - The E&S segment reported a premium growth of 3%, with a notable increase in renewal rates, particularly in excess casualty, which saw over 24% growth [5][29] - The Specialty Admitted Insurance segment's gross written premium declined significantly, reflecting a strategic decision to manage risk in a challenging market [5][32] Operational Efficiency - The consolidated expense ratio improved to 30.5% from 32.7% in the prior quarter, driven by reduced general and administrative expenses [8][12] - The company reported a year-to-date growth in tangible common equity of 12.8% [12]

PEMBROKE, Bermuda, July 10, 2025 (GLOBE NEWSWIRE) -- James River Group Holdings, Ltd. ("James River" or the "Company") (NASDAQ: JRVR) today announced two leadership appointments to its executive team. Valdean Langenburg has been appointed Group Chief Information Officer (“CIO”) succeeding Thomas Peach, who retired on July 4 after a more than four decade career in information technology, including six years as James River’s CIO.Justin Zaharris has been promoted to Group Chief Claims Officer, expanding upon h ...

Core Insights - The article discusses the potential demand for James River Group Holdings, Ltd. (NASDAQ: JRVR) due to new partnership agreements and a review of options [1] Company Overview - James River Group Holdings operates in the insurance sector, focusing on specialty insurance and reinsurance [1] - The company is positioned to benefit from strategic partnerships that may enhance its market presence and financial performance [1] Investment Strategy - The author emphasizes a preference for investing in mature industries such as mining, oil and gas, and real estate, indicating a cautious approach to unfamiliar business models [1] - The target internal rate of return for investments is approximately 5%-7%, reflecting a conservative investment philosophy [1] Analyst Background - The author has nearly 14 years of experience in the financial industry, including roles in equity research, investment funds, and investment banking [1] - The focus is on small and medium-cap companies across Europe, the United States, and South America, highlighting a diverse geographical investment strategy [1]

分组1 - James River Group (NASDAQ: JRVR) is a small-cap specialty insurer that has undergone restructuring [1] - The company has exited troubled segments and sold their offshore reinsurer to Fleming, JRG Re [1] - The restructuring has positioned the company to be more focused and potentially more profitable in the future [1]