11.1% Growth in Net Operating Earnings Per Share Over the First Quarter of 2014
23.0% Growth in E&S Segment Gross Written Premiums Over the First Quarter of 2014
Declares $0.16 Per Share Quarterly Dividend
CaribPR Wire, HAMILTON, Bermuda, May 6, 2015: James River Group Holdings, Ltd. (Nasdaq:JRVR) today announced financial results for the quarter ended March 31, 2015.
Highlights for the quarter include:
- Overall gross written premiums of $131.3 million in the first quarter of 2015 as follows:
- Growth in our Excess and Surplus Lines segment of 23.0% to $75.7 million from $61.6 million in 2014;
- Growth in our Specialty Admitted Insurance segment of 79.2% to $20.9 million from $11.7 million in the first quarter of 2014; and a
- Reduction in our Casualty Reinsurance segment of 53.2% to $34.6 million from $74.0 million in the first quarter of 2014.
- Overall net written premiums for the quarter of $108.7 million as follows:
- Growth in our Excess and Surplus Lines segment of 26.2% to $62.3 million from $49.4 million in 2014;
- Growth in our Specialty Admitted Insurance segment of 37.6% to $11.5 million from $8.3 million in the first quarter of 2014; and a
- Reduction in our Casualty Reinsurance segment of 52.9% to $34.9 million from $74.1 million in the first quarter of 2014.
- A combined ratio of 97.5% compared to 98.5% in the prior year;
- Net operating income in 2015 of $11.7 million compared to $10.5 million in the prior year;
- Fully diluted operating earnings per share of $0.40 compared to $0.36 in the prior year;
- Net income in 2015 of $9.4 million compared to $9.1 million in the prior year; and
- Fully diluted earnings per share were $0.32 for both the first quarter of 2015 and 2014.
J. Adam Abram, Chairman and Chief Executive Officer, said, “We are pleased to have a solid start to the year, and we remain on track to achieve our operating EPS guidance for calendar 2015. Our Excess and Surplus Lines segment, which is our largest and most profitable segment, continued to achieve very strong growth. Additionally, we achieved modest increases in our exposure adjusted rates in each of our underwriting segments during the quarter.”
“Our tangible book value grew by 2.1% during the first quarter of 2015, and 3.1% adding back the $0.16 dividend we paid on March 31, 2015. This growth in tangible book value is in line with our expectations. Going forward, we seek to continue to report steady underwriting profits and deliver consistent returns on tangible equity for our shareholders.”
“In keeping with our Board’s emphasis on capital efficiency and management, the Directors voted to declare a quarterly dividend of $0.16 per share to be paid on June 30, 2015.”
Net operating earnings per diluted share for the first quarter of 2015 were $0.40 per share and excluded $0.08 per share of costs related to realized gains and losses and other non-operating expenses. This amount compares to $0.36 for the same period in 2014.
Fully diluted earnings per share for the first quarter of 2015 and 2014 were both $0.32.
The combined ratio for the Company was 97.5% (comprised of a loss ratio of 63.7% and an expense ratio of 33.8%) for the first quarter of 2015. This compares to a combined ratio of 98.5% (comprised of a loss ratio of 63.0% and an expense ratio of 35.5%) in the prior year.
Results for the quarter ended March 31, 2015 include favorable reserve development on prior accident years of $2.5 million. In the prior year, this favorable reserve development was $1.1 million. On an after-tax basis, favorable reserve development for the quarter is $2.0 million ($804,000 in the prior year).
The improvement in the overall expense ratio in the first quarter of 2015 compared to the same period in the prior year was primarily due to the increase in our earned premiums which grew 31.4% in the quarter from $89.1 million in 2014 to $117.0 million in 2015.
The Excess and Surplus Lines segment’s combined ratio was 87.5% for the quarter ended March 31, 2015, comprised of a loss ratio of 60.3% and an expense ratio of 27.1%. In the prior year, this segment’s combined ratio was 91.1% comprised of a loss ratio of 61.6% and an expense ratio of 29.6%. In the quarter, we recognized $4.9 million in pre-tax, favorable reserve development representing 8.3 points of our loss and combined ratio, respectively. In the same period in 2014, we recognized $2.4 million in pre-tax favorable reserve development representing 5.7 points of our loss and combined ratio, respectively.
The Specialty Admitted Insurance segment’s combined ratio was 101.6% for the quarter ended March 31, 2015, (resulting in an underwriting loss of $155,000) comprised of a loss ratio of 60.7% and an expense ratio of 41.0%. In the prior year, this segment’s combined ratio was 111.5%, comprised of a loss ratio of 55.1% and an expense ratio of 56.4%. In the quarter, we recognized $7,000 in pre-tax, favorable reserve development. In the same period in 2014, we recognized $287,000 in pre-tax, favorable reserve development representing 5.6 points of the loss and combined ratio, respectively. Additionally, the expense ratio for the quarter of 41.0% has begun to show the effects of the successful ramp up of the programs and fronting business along with an overall increase in earned premiums in this segment. For the same period in the prior year, the expense ratio was 56.4%.
The Casualty Reinsurance segment’s combined ratio was 99.9% for the quarter ended March 31, 2015, comprised of a loss ratio of 68.3% and an expense ratio of 31.6%. In the prior year, this segment’s combined ratio was also 99.9% comprised of a loss ratio of 65.4% and an expense ratio of 34.5%. In the quarter, we recognized $2.5 million of adverse reserve development representing (5.1) points of the loss and combined ratio, respectively. In the prior year, we recognized $1.6 million of adverse reserve development representing (3.8) points of the loss and combined ratio, respectively. The significant decrease in gross written premium at this segment is principally due to one contract which renewed in the first quarter of 2014 for 15 months which is scheduled for renewal in the second quarter of 2015. This contract contributed $36.7 million to this segment’s prior year gross written premium, all of which was recorded in the first quarter of 2014.
Net investment income for the first quarter of 2015 was $12.0 million. This amount compares to $12.5 million for the same period in 2014. Included in the total net investment income is $2.5 million and $3.3 million relating to our investments in renewable energy facilities engaged in wind and solar production for the quarter ended March 31, 2015 and 2014, respectively. Absent this investment income (which averaged $639,000 for the remaining three quarters of 2014), our net investment income increased by $368,000 (4.0%) over the first quarter of the prior year to $9.5 million (from $9.2 million). This increase in net investment income was due to a 4.3% increase in our average cash and invested assets in the first quarter of 2015 compared to the first quarter of 2014. Our annualized gross investment yield on average fixed maturity securities for the quarter ended March 31, 2015 was 3.2%, and the average duration of our portfolio was 3.0 years.
During the first quarter of 2015, we also recognized $2.8 million in pre-tax net realized losses primarily relating to the sale of certain securities in the energy portion of our bank loan portfolio, which at March 31, 2015 had a remaining carrying value of $25.1 million and a market value of $22.8 million.
Dividend
The Company also announced that its Board of Directors declared a cash dividend of $0.16 per common share. This dividend is payable on Tuesday, June 30, 2015 to all shareholders of record at the close of business on Monday, June 15, 2015.
Conference Call
James River Group Holdings will hold a conference call to discuss this press release tomorrow, May 7, 2015, at 9:00 a.m. Eastern time. Investors may access the conference call by dialing (877) 930-8055 Conference ID# 7710053 or via the internet by going to www.jrgh.net and clicking on the “Investor Relations” link. Please visit the website at least 15 minutes early to register, download and install any necessary audio software. A replay will be available shortly after the call and through the end of business on June 5, 2015 at the number and website referenced above.
Forward Looking Statements
This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, such forward-looking statements may be identified by terms such as believe, expect, seek, may, will, intend, project, plan, estimate or similar words. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Although it is not possible to identify all of these risks and factors, they include, among others, the following: losses exceeding reserves; loss of key members of our management or employees; adverse economic factors; a decline in our financial strength; loss of a group of brokers or agents that generate significant portions of our business; losses in our investment portfolio; additional government or market regulation; potentially becoming subject to United States taxation and other risks described in the Company’s filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this release and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise, except as required by law.
Non-GAAP Financial Measures
In presenting James River Group Holding’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP). Such measures, including underwriting profit, net operating income and return on tangible equity are referred to as non-GAAP measures. These non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included at the end of this press release.
About James River Group Holdings, Ltd.
James River Group Holdings, Ltd. is a Bermuda-based insurance holding company which owns and operates a group of specialty insurance and reinsurance companies founded by members of our management team. The Company operates in three specialty property-casualty insurance and reinsurance segments: Excess and Surplus Lines, Specialty Admitted Insurance and Casualty Reinsurance. The Company tends to focus on accounts associated with small or medium-sized businesses in each of its segments. Each of the Company’s regulated insurance subsidiaries are rated “A-” (Excellent) with a “positive outlook” by A.M. Best Company.
Visit James River Group Holdings, Ltd. on the web at www.jrgh.net.
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James River Group Holdings, Ltd. and Subsidiaries
|
|
Condensed Consolidated Balance Sheet Data
|
|
(Unaudited)
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| |
|
|
| |
March 31,
2015 |
December 31,
2014 |
| |
($ in thousands, except for share amounts)
|
| ASSETS |
|
|
| Invested assets: |
|
|
| Fixed maturity securities, available-for-sale |
$ 739,984
|
$ 756,963
|
| Fixed maturity securities, trading |
5,816
|
7,388
|
| Equity securities, available-for-sale |
77,330
|
67,905
|
| Bank loan participations, held-for-investment |
203,601
|
239,511
|
| Short-term investments |
161,220
|
131,856
|
| Other invested assets |
55,010
|
33,622
|
| Total investments |
1,242,961
|
1,237,245
|
|
|
|
| Cash and cash equivalents |
71,355
|
73,383
|
| Accrued investment income |
6,582
|
7,273
|
| Premiums receivable and agents’ balances |
177,327
|
162,527
|
| Reinsurance recoverable on unpaid losses |
129,616
|
127,254
|
| Reinsurance recoverable on paid losses |
2,635
|
1,725
|
| Deferred policy acquisition costs |
55,559
|
60,202
|
| Goodwill and intangible assets |
221,807
|
221,956
|
| Other assets |
84,611
|
67,727
|
| Total assets |
$ 1,992,453
|
$ 1,959,292
|
|
|
|
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
| Reserve for losses and loss adjustment expenses |
$ 744,585
|
$ 716,296
|
| Unearned premiums |
273,170
|
277,579
|
| Senior debt |
88,300
|
88,300
|
| Junior subordinated debt |
104,055
|
104,055
|
| Accrued expenses |
26,012
|
31,107
|
| Other liabilities |
58,794
|
54,034
|
| Total liabilities |
1,294,916
|
1,271,371
|
|
|
|
| Total shareholders’ equity |
697,537
|
687,921
|
| Total liabilities and shareholders’ equity |
$ 1,992,453
|
$ 1,959,292
|
|
|
|
| Tangible equity |
$ 475,730
|
$ 465,965
|
| Tangible equity per common share outstanding |
$ 16.67
|
$ 16.33
|
| Total shareholders’ equity per common share outstanding |
$ 24.44
|
$ 24.10
|
| Common shares outstanding |
28,540,350
|
28,540,350
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| Debt to total capitalization ratio |
21.6%
|
21.9%
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James River Group Holdings, Ltd. and Subsidiaries
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Condensed Consolidated Income Statement Data
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(Unaudited)
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| |
|
Three Months Ended
March 31, |
|
2015
|
2014
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| |
($ in thousands, except for share data)
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| REVENUES |
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|
| Gross written premiums |
$ 131,258
|
$ 147,241
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| Net written premiums |
$ 108,659
|
$ 131,841
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|
|
|
| Net earned premiums |
$ 117,011
|
$ 89,056
|
| Net investment income |
11,986
|
12,482
|
| Net realized investment losses |
(2,806)
|
(1,921)
|
| Other income |
276
|
78
|
| Total revenues |
126,467
|
99,695
|
|
|
|
| EXPENSES |
|
|
| Losses and loss adjustment expenses |
74,484
|
56,114
|
| Other operating expenses |
39,797
|
31,628
|
| Other expenses |
69
|
93
|
| Interest expense |
1,704
|
1,547
|
| Amortization of intangible assets |
149
|
125
|
| Total expenses |
116,203
|
89,507
|
| Income before taxes |
10,264
|
10,188
|
| Income tax expense |
887
|
1,050
|
| NET INCOME |
$ 9,377
|
$ 9,138
|
| NET OPERATING INCOME |
$ 11,691
|
$ 10,468
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|
|
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| EARNINGS PER SHARE |
|
|
| Basic |
$ 0.33
|
$ 0.32
|
| Diluted |
$ 0.32
|
$ 0.32
|
|
|
|
| NET OPERATING INCOME PER SHARE |
|
|
| Basic |
$ 0.41
|
$ 0.37
|
| Diluted |
$ 0.40
|
$ 0.36
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|
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|
| Weighted-average common shares outstanding: |
|
|
| Basic |
28,540,350
|
28,540,350
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| Diluted |
29,098,309
|
28,780,681
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| Cash dividends declared per common share |
$ 0.16
|
$ 0.00
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| Ratios: |
|
|
| Loss ratio |
63.7%
|
63.0%
|
| Expense ratio |
33.8%
|
35.5%
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| Combined ratio |
97.5%
|
98.5%
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James River Group Holdings, Ltd. and Subsidiaries
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Segment Results
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| EXCESS AND SURPLUS LINES |
|
|
Three Months Ended
March 31, |
|
2015
|
2014
|
|
($ in thousands)
|
| Gross written premiums |
$ 75,718
|
$ 61,553
|
| Net written premiums |
$ 62,296
|
$ 49,374
|
|
|
|
| Net earned premiums |
$ 59,400
|
$ 41,983
|
| Losses and loss adjustment expenses |
(35,842)
|
(25,841)
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| Underwriting expenses |
(16,115)
|
(12,415)
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| Underwriting profit (a), (b) |
$ 7,443
|
$ 3,727
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|
|
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| Ratios: |
|
|
| Loss ratio |
60.3%
|
61.6%
|
| Expense ratio |
27.1%
|
29.6%
|
| Combined ratio |
87.5%
|
91.1%
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| (a) See “Reconciliation of Non-GAAP Measures.” |
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| (b) Underwriting results include fees of $220,000 and $0 for the three months ended March 31, 2015 and 2014, respectively. |
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| SPECIALTY ADMITTED INSURANCE |
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Three Months Ended
March 31, |
|
2015
|
2014
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|
($ in thousands)
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| Gross written premiums |
$ 20,926
|
$ 11,677
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| Net written premiums |
$ 11,474
|
$ 8,341
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|
|
|
| Net earned premiums |
$ 9,555
|
$ 5,149
|
| Losses and loss adjustment expenses |
(5,796)
|
(2,837)
|
| Underwriting expenses |
(3,914)
|
(2,904)
|
| Underwriting loss (a), (b) |
$ (155)
|
$ (592)
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|
|
| Ratios: |
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| Loss ratio |
60.7%
|
55.1%
|
| Expense ratio |
41.0%
|
56.4%
|
| Combined ratio |
101.6%
|
111.5%
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| (a) See “Reconciliation of Non-GAAP Measures.” |
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| (b) Underwriting results include fees of $303,000 and $137,000 for the three months ended March 31, 2015 and 2014, respectively. |
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| CASUALTY REINSURANCE |
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Three Months Ended
March 31, |
|
2015
|
2014
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|
($ in thousands)
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| Gross written premiums |
$ 34,614
|
$ 74,011
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| Net written premiums |
$ 34,889
|
$ 74,126
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|
|
|
| Net earned premiums |
$ 48,056
|
$ 41,924
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| Losses and loss adjustment expenses |
(32,846)
|
(27,436)
|
| Underwriting expenses |
(15,169)
|
(14,444)
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| Underwriting profit (a) |
$ 41
|
$ 44
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|
|
| Ratios: |
|
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| Loss ratio |
68.3%
|
65.4%
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| Expense ratio |
31.6%
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34.5%
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| Combined ratio |
99.9%
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99.9%
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| (a) See “Reconciliation of Non-GAAP Measures.” |
RECONCILIATION OF NON-GAAP MEASURES
The following table reconciles the underwriting profit (loss) by individual operating segment and of the whole Company to consolidated income before taxes. We believe that these measures are useful to investors in evaluating the performance of our Company and its operating segments because our objective is to consistently earn underwriting profits. We evaluate the performance of our operating segments and allocate resources based primarily on underwriting profit (loss) of operating segments. Our definition of underwriting profit (loss) of operating segments and underwriting profit (loss) may not be comparable to that of other companies.
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Three Months Ended
March 31, |
|
2015
|
2014
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(in thousands)
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| Underwriting profit (loss) of the operating segments: |
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| Excess and Surplus Lines |
$ 7,443
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$ 3,727
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| Specialty Admitted Insurance |
(155)
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(592)
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| Casualty Reinsurance |
41
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44
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| Total underwriting profit of operating segments |
7,329
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3,179
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| Other operating expenses of the Corporate and Other segment |
(4,379)
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(1,865)
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| Underwriting profit (a) |
2,950
|
1,314
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| Net investment income |
11,986
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12,482
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| Net realized investment losses |
(2,806)
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(1,921)
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| Other income and expenses |
(13)
|
(15)
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| Interest expense |
(1,704)
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(1,547)
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| Amortization of intangible assets |
(149)
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(125)
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| Consolidated income before taxes |
$ 10,264
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$ 10,188
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| (a) Included in underwriting results for the three months ended March 31, 2015 and 2014 is net fee income of $523,000 and $137,000, respectively. |
We define net operating income as net income excluding net realized investment gains and losses, expenses related to due diligence costs for various merger and acquisition activities, costs associated with our initial public offering, severance costs associated with terminated employees, impairment charges on goodwill and intangible assets and gains on extinguishment of debt. We use net operating income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Net operating income should not be viewed as a substitute for net income calculated in accordance with GAAP, and our definition of net operating income may not be comparable to that of other companies.
Our income before taxes and net income for the three months ended March 31, 2015 and 2014, respectively, reconciles to our net operating income as follows:
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Three Months Ended
March 31, |
|
2015
|
2014
|
|
Income
Before
Taxes |
Net
Income
|
Income
Before
Taxes |
Net
Income
|
|
(in thousands)
|
| Income as reported |
$ 10,264
|
$ 9,377
|
$ 10,188
|
$ 9,138
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| Net realized investment losses |
2,806
|
2,162
|
1,921
|
1,153
|
| Other expenses |
69
|
45
|
93
|
70
|
| Interest expense on leased building the Company is deemed to own for accounting purposes |
165
|
107
|
165
|
107
|
| Net operating income |
$ 13,304
|
$ 11,691
|
$ 12,367
|
$ 10,468
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We define tangible equity as the sum of shareholders’ equity less goodwill and intangible assets (net of amortization). Our definition of tangible equity may not be comparable to that of other companies, and it should not be viewed as a substitute for shareholders’ equity calculated in accordance with GAAP. We use tangible equity internally to evaluate the strength of our balance sheet and to compare returns relative to this measure. The following table reconciles shareholders’ equity to tangible equity for both March 31, 2015 and December 31, 2014.
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March 31,
|
December 31,
|
|
2015
|
2014
|
|
(in thousands)
|
|
|
|
| Shareholders’ equity |
$ 697,537
|
$ 687,921
|
| Less: Goodwill and intangible assets |
221,807
|
221,956
|
| Tangible equity |
$ 475,730
|
$ 465,965
|
CONTACT: Robert Myron
President and Chief Operating Officer
1-441-278-4583
[email protected]
James River Group Holdings informa ingresos operativos netos de 11,7 millones de USD o 0,40 USD por acción diluida durante el primer trimestre
Crecimiento del 11,1 % en las ganancias operativas netas por acción durante el primer trimestre de 2014
Crecimiento del 23 % en las primas brutas emitidas del segmento de excesos y excedentes (Excess and Surplus, E&S) durante el primer trimestre de 2014
Declara dividendos trimestrales de 0,16 USD por acción
CaribPR Wire, HAMILTON, Bermudas, 7 de mayo de 2015: James River Group Holdings, Ltd. (Nasdaq:JRVR) anunció hoy los resultados financieros del trimestre que finalizó el 31 de marzo de 2015.
Lo más destacado del trimestre incluye lo siguiente:
– Primas brutas emitidas globales de 131,3 millones de USD durante el primer trimestre de 2015 de la siguiente manera:
– Un crecimiento del 23 % de nuestro segmento de líneas de excesos y excedentes, de 61,6 millones de USD en 2014 a 75,7 millones de USD.
– Un crecimiento de 79,2 % de nuestro segmento de seguros de productos especiales admitidos, de 11,7 millones de USD en el primer trimestre de 2014 a 20,9 millones de USD.
– Reducción del 53,2 % de nuestro segmento de reaseguros de responsabilidad, de 74 millones de USD en el primer trimestre de 2014 a 34,6 millones de USD.
– Primas netas emitidas globales de 108,7 millones de USD durante el trimestre de la siguiente manera:
– Un crecimiento del 26,2 % de nuestro segmento de líneas de excesos y excedentes, de 49,4 millones de USD en 2014 a 62,3 millones de USD. Un crecimiento del 37,6 % de nuestro segmento de seguros de productos especiales admitidos, de 8,3 millones de USD en el primer trimestre de 2014 a 11,5 millones de USD.
– Reducción del 52,9 % de nuestro segmento de reaseguros de responsabilidad, de 74,1 millones de USD en el primer trimestre de 2014 a 34,9 millones de USD.
– Un índice combinado del 97,5 % en comparación con el 98,5 % del año anterior.
– Ingresos operativos netos de 11,7 millones de USD en 2015 en comparación con los 10,5 millones de USD del año anterior.
– Ganancias operativas por acción totalmente diluidas de 0,40 USD en comparación con los 0,36 USD del año anterior.
– Ingresos netos de 9,4 millones de USD en 2015 en comparación con los 9,1 millones de USD del año anterior.
– Ganancias por acción totalmente diluidas de 0,32 USD en el primer trimestre de 2015 y 2014.
J. Adam Abram, presidente y director ejecutivo, afirmó: “Nos complace haber tenido un comienzo sólido de año y seguimos encaminados para cumplir con las estimaciones de ganancias operativas por acción para el año 2015. El segmento de líneas de excesos y excedentes, nuestro mayor segmento y el más rentable, continuó creciendo con firmeza. Además, durante el trimestre logramos un crecimiento moderado de nuestras tasas ajustadas a la exposición en cada uno de nuestros segmentos de seguros”.
“Nuestro valor contable tangible creció un 2,1 % durante el primer trimestre de 2015, y un 3,1 % si sumamos los dividendos de 0,16 USD que pagamos el 31 de marzo de 2015. Este crecimiento del valor contable tangible coincide con nuestras expectativas. En el futuro, buscaremos continuar obteniendo ganancias de seguros firmes y ofreciendo un rendimiento constante sobre el capital tangible para nuestros accionistas”.
“En línea con el énfasis de nuestra Junta Directiva en relación con la administración y el uso eficiente del capital, los directores votaron por la declaración de un dividendo trimestral de 0,16 USD por acción, que se pagará el 30 de junio de 2015”.
Las ganancias operativas netas por acción diluida del primer trimestre de 2015 fueron de 0,40 USD por acción, sin incluir 0,08 USD por acción de los costos relacionados con las ganancias y pérdidas realizadas y otros gastos no operativos. Este monto puede compararse con los 0,36 USD del mismo período de 2014.
Las ganancias por acción totalmente diluidas en el primer trimestre de 2015 y 2014 fueron de 0,32 USD.
El índice combinado de la compañía durante el primer trimestre de 2015 fue del 97,5 % (compuesto por un índice de pérdidas del 63,7 % y un índice de gastos del 33,8 %). Este puede compararse con el índice combinado del 98,5 % (compuesto por un índice de pérdidas del 63 % y un índice de gastos del 35,5 %) del año anterior.
Los resultados del trimestre que finalizó el 31 de marzo de 2015 incluyen un desarrollo favorable de las reservas de 2,5 millones de USD respecto de los años de siniestros anteriores. El año anterior, este desarrollo favorable de las reservas fue de 1,1 millones de USD. El desarrollo favorable de las reservas para el trimestre es de 2 millones de USD después de impuestos (804 000 USD el año anterior).
La mejora en el índice de gastos global del primer trimestre de 2015 en comparación con el mismo período del año anterior se debió, principalmente, al aumento de nuestras primas percibidas, que creció 31,4 % en el trimestre, de 89,1 millones de USD en el año 2014 a 117 millones de USD en 2015.
El índice combinado del segmento de líneas de excesos y excedentes, compuesto por un índice de pérdidas del 60,3 % y un índice de gastos del 27,1 %, fue de 87,5 % durante el trimestre que finalizó el 31 de marzo de 2015. El año anterior, el índice combinado de este segmento fue del 91,1 %, compuesto por un índice de pérdidas del 61,6 % y un índice de gastos del 29,6 %. Durante el trimestre, registramos un desarrollo favorable de las reservas de 4,9 millones de USD antes de impuestos, que representó 8,3 puntos de nuestro índice de pérdidas y nuestro índice combinado, respectivamente. Durante el mismo período de 2014, registramos un desarrollo favorable de las reservas de 2,4 millones de USD antes de impuestos, que representó 5,7 puntos de nuestro índice de pérdidas y nuestro índice combinado, respectivamente.
El índice combinado del segmento de seguros de productos especiales admitidos, compuesto por un índice de pérdidas del 60,7 % y un índice de gastos del 41 %, fue de 101,6 % durante el trimestre que finalizó el 31 de marzo de 2015 (que resultó en una pérdida de seguros de 155 000 USD). El año anterior, el índice combinado de este segmento fue de 111,5 %, compuesto por un índice de pérdidas de 55,1 % y un índice de gastos de 56,4 %. Durante el trimestre, registramos un desarrollo favorable de las reservas de 7000 USD antes de impuestos. Durante el mismo período de 2014, registramos un desarrollo favorable de las reservas de 287 000 USD antes de impuestos, que representó 5,6 puntos de nuestro índice de pérdidas y nuestro índice combinado, respectivamente. Además, el índice de gastos del trimestre, de 41 %, ha comenzado a evidenciar las consecuencias del crecimiento exitoso de los programas y de las transacciones “fronting”, con un aumento global de las primas percibidas en este segmento. Durante el mismo período del año anterior, el índice de gastos fue del 56,4 %.
El índice combinado del segmento de reaseguros de responsabilidad, compuesto por un índice de pérdidas del 68,3 % y un índice de gastos del 31,6 %, fue de 99,9 % durante el trimestre que finalizó el 31 de marzo de 2015. El año anterior, el índice combinado de este segmento fue de 99,9 %, compuesto por un índice de pérdidas del 65,4 % y un índice de gastos del 34,5 %. Durante el trimestre, registramos un desarrollo desfavorable de las reservas de 2,5 millones de USD, que representó (5,1) puntos del índice de pérdidas y del índice combinado, respectivamente. El año anterior, registramos un desarrollo desfavorable de las reservas de 1,6 millones de USD, que representó (3,8) puntos del índice de pérdidas y del índice combinado, respectivamente. La importante disminución de las primas brutas emitidas de este segmento se debe, principalmente, a un contrato que se renovó en el primer trimestre de 2014 por un período de 15 meses y cuya renovación está programada para el segundo trimestre de 2015. Este contrato contribuyó 36,7 millones de USD a las primas brutas emitidas de este segmento durante el año anterior, que se registró en su totalidad en el primer trimestre de 2014.
Los ingresos netos por inversiones durante el primer trimestre de 2015 fueron de 12 millones de USD. Este monto puede compararse con los 12,5 millones de USD del mismo período de 2014. En el total de ingresos netos por inversiones se incluyeron 2,5 millones de USD y 3,3 millones de USD relacionados con nuestras inversiones en instalaciones involucradas en la producción de energía renovable eólica y solar, que se llevaron a cabo durante el trimestre finalizado el 31 de marzo de 2015 y 2014, respectivamente. Sin contar estos ingresos por inversiones (que significaron, en promedio, 639 000 USD en los tres trimestres restantes de 2014), nuestros ingresos netos por inversiones aumentaron 368 000 USD (un 4 %) en relación con el primer trimestre del año anterior, de 9,2 millones de USD a 9,5 millones de USD. Este incremento en los ingresos netos por inversiones se debió a un aumento del 4,3 % de nuestros activos invertidos y efectivo promedio durante el primer trimestre de 2015, en comparación con el primer trimestre de 2014. Nuestro rendimiento bruto anualizado de inversiones sobre los valores de vencimiento fijo promedio para el trimestre que finalizó el 31 de marzo de 2015 fue de 3,2 %, y la duración promedio de nuestra cartera fue de 3 años.
Durante el primer trimestre de 2015, también registramos pérdidas realizadas netas por un total de 2,8 millones de USD antes de impuestos, relacionadas principalmente con la venta de ciertos valores del segmento energético de nuestra cartera de préstamos bancarios. El 31 de marzo de 2015, esta tenía un valor contable residual de 25,1 millones de USD y un valor de mercado de 22,8 millones de USD.
Dividendos
La compañía también anunció que su Junta Directiva declaró un dividendo en efectivo de 0,16 USD por acción ordinaria. Este dividendo se pagará el martes, 30 de junio de 2015 a todos los accionistas registrados al momento del cierre de la jornada del lunes, 15 de junio de 2015.
Conferencia telefónica
James River Group Holdings llevará a cabo una conferencia telefónica para hablar sobre este comunicado de prensa mañana, 7 de mayo de 2015, a las 9.00 a. m., hora del este. Los inversionistas pueden participar en la conferencia llamando al (877) 930-8055; el número de identificación de la conferencia es el 7710053. O bien a través de Internet en www.jrgh.net haciendo clic en el enlace “Investor Relations” (Relaciones con los inversionistas). Ingrese al sitio web al menos 15 minutos antes del evento para inscribirse y descargar e instalar el software de audio necesario. La repetición estará disponible poco después de la finalización de la conferencia y hasta el momento de cierre de la jornada del 5 de junio de 2015 en el número de teléfono y en el sitio web antes mencionados.
Proyecciones
Este comunicado de prensa contiene proyecciones, según la definición del término establecida en la Ley de Reforma de Litigios sobre Valores Privados (Private Securities Litigation Reform Act) de 1995. En algunas ocasiones, estas proyecciones pueden identificarse por el uso de términos tales como “creer”, “esperar”, “buscar”, “poder”, “será”, “pretender”, “proyectar”, “planificar”, “estimar” u otras palabras similares. Las proyecciones implican riesgos e incertidumbres que podrían causar que los resultados reales difieran significativamente de aquellos previstos por estas. Si bien no es posible identificar todos estos riegos y factores, estos incluyen los siguientes, entre otros: pérdidas que excedan las reservas, pérdida de empleados o de miembros de la gerencia claves, factores económicos adversos, disminución de nuestra capacidad financiera, pérdida de un grupo de corredores o agentes que representan una parte importante de nuestro negocio, pérdida de nuestra cartera de inversiones, reglamentaciones gubernamentales o del mercado adicionales, posibilidad de quedar sujetos a impuestos estadounidenses y otros riesgos descritos en los documentos presentados por la compañía ante la Comisión de Bolsa y Valores. Estas proyecciones son válidas únicamente a la fecha de este comunicado y no asumimos ninguna obligación de actualizar o revisar la información de cualquiera de estas proyecciones para reflejar cambios en las suposiciones, eventos imprevistos o cualquier otra situación, excepto según se requiera conforme a la ley.
Índices que no se ajustan a los principios de contabilidad generalmente aceptados
Al presentar los resultados de James River Group Holding, la gerencia incluyó índices financieros que no se calculan de acuerdo con los estándares o las reglas comprendidos en los principios de contabilidad generalmente aceptados (Generally Accepted Accounting Principles, GAAP) en Estados Unidos. Estos índices, que incluyen las ganancias de seguros, los ingresos operativos netos y el rendimiento sobre el capital tangible, se denominan índices financieros no ajustados a los principios de contabilidad generalmente aceptados. Es posible que otras compañías definan o calculen estos índices de manera diferente. No debe considerarse que estos índices sustituyen aquellos establecidos de acuerdo con los GAAP. Al final de este comunicado se incluye la conciliación de estos índices con los índices GAAP más similares.
Acerca de James River Group Holdings, Ltd.
James River Group Holdings, Ltd. es un holding empresarial de seguros con sede en las Bermudas que posee y opera un grupo de compañías especializadas de seguros y reaseguros fundadas por miembros de nuestro equipo gerencial. La compañía opera en tres segmentos especializados de seguros y reaseguros de responsabilidad y patrimoniales: líneas de excesos y excedentes, seguros de productos especiales admitidos y reaseguros de responsabilidad. En cada uno de los segmentos, la compañía tiende a enfocarse en cuentas asociadas con pequeñas y medianas empresas. A.M. Best Company calificó con “A-” (excelente) y una “perspectiva positiva” a cada una de las subsidiarias de seguro reguladas de la compañía.
Visite el sitio web de James River Group Holdings, Ltd. en www.jrgh.net.
CONTACTO: Robert Myron
Presidente y director de Operaciones
1-441-278-4583
[email protected]
|
James River Group Holdings, Ltd. and Subsidiaries
|
|
Condensed Consolidated Balance Sheet Data
|
|
(Unaudited)
|
| |
|
|
| |
March 31,
2015 |
December 31,
2014 |
| |
($ in thousands, except for share amounts)
|
| ASSETS |
|
|
| Invested assets: |
|
|
| Fixed maturity securities, available-for-sale |
$ 739,984
|
$ 756,963
|
| Fixed maturity securities, trading |
5,816
|
7,388
|
| Equity securities, available-for-sale |
77,330
|
67,905
|
| Bank loan participations, held-for-investment |
203,601
|
239,511
|
| Short-term investments |
161,220
|
131,856
|
| Other invested assets |
55,010
|
33,622
|
| Total investments |
1,242,961
|
1,237,245
|
|
|
|
| Cash and cash equivalents |
71,355
|
73,383
|
| Accrued investment income |
6,582
|
7,273
|
| Premiums receivable and agents’ balances |
177,327
|
162,527
|
| Reinsurance recoverable on unpaid losses |
129,616
|
127,254
|
| Reinsurance recoverable on paid losses |
2,635
|
1,725
|
| Deferred policy acquisition costs |
55,559
|
60,202
|
| Goodwill and intangible assets |
221,807
|
221,956
|
| Other assets |
84,611
|
67,727
|
| Total assets |
$ 1,992,453
|
$ 1,959,292
|
|
|
|
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
| Reserve for losses and loss adjustment expenses |
$ 744,585
|
$ 716,296
|
| Unearned premiums |
273,170
|
277,579
|
| Senior debt |
88,300
|
88,300
|
| Junior subordinated debt |
104,055
|
104,055
|
| Accrued expenses |
26,012
|
31,107
|
| Other liabilities |
58,794
|
54,034
|
| Total liabilities |
1,294,916
|
1,271,371
|
|
|
|
| Total shareholders’ equity |
697,537
|
687,921
|
| Total liabilities and shareholders’ equity |
$ 1,992,453
|
$ 1,959,292
|
|
|
|
| Tangible equity |
$ 475,730
|
$ 465,965
|
| Tangible equity per common share outstanding |
$ 16.67
|
$ 16.33
|
| Total shareholders’ equity per common share outstanding |
$ 24.44
|
$ 24.10
|
| Common shares outstanding |
28,540,350
|
28,540,350
|
| Debt to total capitalization ratio |
21.6%
|
21.9%
|
|
|
|
James River Group Holdings, Ltd. and Subsidiaries
|
|
Condensed Consolidated Income Statement Data
|
|
(Unaudited)
|
| |
|
Three Months Ended
March 31, |
|
2015
|
2014
|
| |
($ in thousands, except for share data)
|
| REVENUES |
|
|
| Gross written premiums |
$ 131,258
|
$ 147,241
|
| Net written premiums |
$ 108,659
|
$ 131,841
|
|
|
|
| Net earned premiums |
$ 117,011
|
$ 89,056
|
| Net investment income |
11,986
|
12,482
|
| Net realized investment losses |
(2,806)
|
(1,921)
|
| Other income |
276
|
78
|
| Total revenues |
126,467
|
99,695
|
|
|
|
| EXPENSES |
|
|
| Losses and loss adjustment expenses |
74,484
|
56,114
|
| Other operating expenses |
39,797
|
31,628
|
| Other expenses |
69
|
93
|
| Interest expense |
1,704
|
1,547
|
| Amortization of intangible assets |
149
|
125
|
| Total expenses |
116,203
|
89,507
|
| Income before taxes |
10,264
|
10,188
|
| Income tax expense |
887
|
1,050
|
| NET INCOME |
$ 9,377
|
$ 9,138
|
| NET OPERATING INCOME |
$ 11,691
|
$ 10,468
|
|
|
|
| EARNINGS PER SHARE |
|
|
| Basic |
$ 0.33
|
$ 0.32
|
| Diluted |
$ 0.32
|
$ 0.32
|
|
|
|
| NET OPERATING INCOME PER SHARE |
|
|
| Basic |
$ 0.41
|
$ 0.37
|
| Diluted |
$ 0.40
|
$ 0.36
|
|
|
|
| Weighted-average common shares outstanding: |
|
|
| Basic |
28,540,350
|
28,540,350
|
| Diluted |
29,098,309
|
28,780,681
|
| Cash dividends declared per common share |
$ 0.16
|
$ 0.00
|
|
|
|
| Ratios: |
|
|
| Loss ratio |
63.7%
|
63.0%
|
| Expense ratio |
33.8%
|
35.5%
|
| Combined ratio |
97.5%
|
98.5%
|
|
|
|
James River Group Holdings, Ltd. and Subsidiaries
|
|
Segment Results
|
| EXCESS AND SURPLUS LINES |
|
|
Three Months Ended
March 31, |
|
2015
|
2014
|
|
($ in thousands)
|
| Gross written premiums |
$ 75,718
|
$ 61,553
|
| Net written premiums |
$ 62,296
|
$ 49,374
|
|
|
|
| Net earned premiums |
$ 59,400
|
$ 41,983
|
| Losses and loss adjustment expenses |
(35,842)
|
(25,841)
|
| Underwriting expenses |
(16,115)
|
(12,415)
|
| Underwriting profit (a), (b) |
$ 7,443
|
$ 3,727
|
|
|
|
| Ratios: |
|
|
| Loss ratio |
60.3%
|
61.6%
|
| Expense ratio |
27.1%
|
29.6%
|
| Combined ratio |
87.5%
|
91.1%
|
|
|
|
| (a) See “Reconciliation of Non-GAAP Measures.” |
|
| (b) Underwriting results include fees of $220,000 and $0 for the three months ended March 31, 2015 and 2014, respectively. |
|
|
| SPECIALTY ADMITTED INSURANCE |
|
Three Months Ended
March 31, |
|
2015
|
2014
|
|
($ in thousands)
|
| Gross written premiums |
$ 20,926
|
$ 11,677
|
| Net written premiums |
$ 11,474
|
$ 8,341
|
|
|
|
| Net earned premiums |
$ 9,555
|
$ 5,149
|
| Losses and loss adjustment expenses |
(5,796)
|
(2,837)
|
| Underwriting expenses |
(3,914)
|
(2,904)
|
| Underwriting loss (a), (b) |
$ (155)
|
$ (592)
|
|
|
|
| Ratios: |
|
|
| Loss ratio |
60.7%
|
55.1%
|
| Expense ratio |
41.0%
|
56.4%
|
| Combined ratio |
101.6%
|
111.5%
|
|
|
|
| (a) See “Reconciliation of Non-GAAP Measures.” |
|
| (b) Underwriting results include fees of $303,000 and $137,000 for the three months ended March 31, 2015 and 2014, respectively. |
|
|
|
|
| CASUALTY REINSURANCE |
|
|
Three Months Ended
March 31, |
|
2015
|
2014
|
|
($ in thousands)
|
| Gross written premiums |
$ 34,614
|
$ 74,011
|
| Net written premiums |
$ 34,889
|
$ 74,126
|
|
|
|
| Net earned premiums |
$ 48,056
|
$ 41,924
|
| Losses and loss adjustment expenses |
(32,846)
|
(27,436)
|
| Underwriting expenses |
(15,169)
|
(14,444)
|
| Underwriting profit (a) |
$ 41
|
$ 44
|
|
|
|
| Ratios: |
|
|
| Loss ratio |
68.3%
|
65.4%
|
| Expense ratio |
31.6%
|
34.5%
|
| Combined ratio |
99.9%
|
99.9%
|
|
|
|
| (a) See “Reconciliation of Non-GAAP Measures.” |
RECONCILIATION OF NON-GAAP MEASURES
The following table reconciles the underwriting profit (loss) by individual operating segment and of the whole Company to consolidated income before taxes. We believe that these measures are useful to investors in evaluating the performance of our Company and its operating segments because our objective is to consistently earn underwriting profits. We evaluate the performance of our operating segments and allocate resources based primarily on underwriting profit (loss) of operating segments. Our definition of underwriting profit (loss) of operating segments and underwriting profit (loss) may not be comparable to that of other companies.
|
Three Months Ended
March 31, |
|
2015
|
2014
|
|
(in thousands)
|
| Underwriting profit (loss) of the operating segments: |
|
|
| Excess and Surplus Lines |
$ 7,443
|
$ 3,727
|
| Specialty Admitted Insurance |
(155)
|
(592)
|
| Casualty Reinsurance |
41
|
44
|
| Total underwriting profit of operating segments |
7,329
|
3,179
|
| Other operating expenses of the Corporate and Other segment |
(4,379)
|
(1,865)
|
| Underwriting profit (a) |
2,950
|
1,314
|
| Net investment income |
11,986
|
12,482
|
| Net realized investment losses |
(2,806)
|
(1,921)
|
| Other income and expenses |
(13)
|
(15)
|
| Interest expense |
(1,704)
|
(1,547)
|
| Amortization of intangible assets |
(149)
|
(125)
|
| Consolidated income before taxes |
$ 10,264
|
$ 10,188
|
|
|
|
| (a) Included in underwriting results for the three months ended March 31, 2015 and 2014 is net fee income of $523,000 and $137,000, respectively. |
We define net operating income as net income excluding net realized investment gains and losses, expenses related to due diligence costs for various merger and acquisition activities, costs associated with our initial public offering, severance costs associated with terminated employees, impairment charges on goodwill and intangible assets and gains on extinguishment of debt. We use net operating income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Net operating income should not be viewed as a substitute for net income calculated in accordance with GAAP, and our definition of net operating income may not be comparable to that of other companies.
Our income before taxes and net income for the three months ended March 31, 2015 and 2014, respectively, reconciles to our net operating income as follows:
|
Three Months Ended
March 31, |
|
2015
|
2014
|
|
Income
Before
Taxes |
Net
Income
|
Income
Before
Taxes |
Net
Income
|
|
(in thousands)
|
| Income as reported |
$ 10,264
|
$ 9,377
|
$ 10,188
|
$ 9,138
|
| Net realized investment losses |
2,806
|
2,162
|
1,921
|
1,153
|
| Other expenses |
69
|
45
|
93
|
70
|
| Interest expense on leased building the Company is deemed to own for accounting purposes |
165
|
107
|
165
|
107
|
| Net operating income |
$ 13,304
|
$ 11,691
|
$ 12,367
|
$ 10,468
|
We define tangible equity as the sum of shareholders’ equity less goodwill and intangible assets (net of amortization). Our definition of tangible equity may not be comparable to that of other companies, and it should not be viewed as a substitute for shareholders’ equity calculated in accordance with GAAP. We use tangible equity internally to evaluate the strength of our balance sheet and to compare returns relative to this measure. The following table reconciles shareholders’ equity to tangible equity for both March 31, 2015 and December 31, 2014.
|
March 31,
|
December 31,
|
|
2015
|
2014
|
|
(in thousands)
|
|
|
|
| Shareholders’ equity |
$ 697,537
|
$ 687,921
|
| Less: Goodwill and intangible assets |
221,807
|
221,956
|
| Tangible equity |
$ 475,730
|
$ 465,965
|
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