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Item 9A. Controls and Procedures

2023-02-28 compared with 2022-03-01 · 481 added, 386 removed, 2019 unchanged (30% of the section changed)

12 unchanged sentences

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any

evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has conducted an assessment, including testing, of the effectiveness of our internal control over financial reporting as of December 31, 2022.

11 unchanged sentences

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by Item 10 is incorporated by reference to the definitive James River Group Holdings, Ltd.

Proxy Statement or an amendment to this Annual Report on Form 10-K to be filed with the SEC not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

The information required by Item 10 may be incorporated by reference to the definitive James River Group Holdings, Ltd.

Proxy Statement, or alternatively, disclosed in an amendment to this Annual Report on Form 10-K, in either case to be filed with the SEC not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

EXECUTIVE COMPENSATION

The information required by Item 11 is incorporated by reference to the definitive James River Group Holdings, Ltd.

Proxy Statement or an amendment to this Annual Report on Form 10-K to be filed with the SEC not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

The information required by Item 11 may be incorporated by reference to the definitive James River Group Holdings, Ltd.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by Item 12 is incorporated by reference to the definitive James River Group Holdings, Ltd.

Proxy Statement or an amendment to this Annual Report on Form 10-K to be filed with the SEC not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

The information required by Item 12 may be incorporated by reference to the definitive James River Group Holdings, Ltd.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by Item 13 is incorporated by reference to the definitive James River Group Holdings, Ltd.

Proxy Statement or an amendment to this Annual Report on Form 10-K to be filed with the SEC not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

The information required by Item 13 may be incorporated by reference to the definitive James River Group Holdings, Ltd.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 is incorporated by reference to the definitive James River Group Holdings, Ltd.

Proxy Statement or an amendment to this Annual Report on Form 10-K to be filed with the SEC not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The information required by Item 14 may be incorporated by reference to the definitive James River Group Holdings, Ltd.

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

(a) (1) and (2) Financial Statements and Financial Statement Schedules.

13 unchanged sentences

333-199958, filed with the Commission on November 7, 2014)

3.6 Third Amended and Restated Bye-Laws of James River Group Holdings, Ltd.

(incorporated by reference to Exhibit 3.6 to the Annual Report on Form 10-K filed on March 12, 2015, Commission File No.

3.6 Fourth Amended and Restated Bye-Laws of James River Group Holdings, Ltd.

4.1 Form of Certificate of Common Shares (incorporated by reference to Exhibit 4.1 of Amendment No.

24 unchanged sentences

4.17 Guarantee Agreement, dated as of January 10, 2008, by and among James River Group Holdings, Ltd., as Guarantor, and Wilmington Trust Company, as Guarantee Trustee, for the benefit of the holders, from time to time, of the capital securities of Franklin Holdings II (Bermuda) Capital Trust I+

4.18 Description of Registrant's Securities Registered under Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.18 of the Annual Report on Form 10-K filed on February 27, 2020, Commission File No.

4.18 Description of Registrant’s Securities Registered under Section 12 of the Securities Exchange Act of 1934

10.1 Second Amended and Restated Credit Agreement, dated as of November 8, 2019, by and among James River Group Holdings, Ltd., JRG Reinsurance Company, Ltd., KeyBank National Association as Administrative Agent and Letter of Credit Issuer, KeyBank National Association, SunTrust Robinson Humphrey, Inc., and BMO Capital Markets Corp.

as Joint Book Runners and Joint Lead Arrangers, Bank of Montreal and SunTrust Bank as Co-Syndication Agents, and the lender parties thereto (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on November 12, 2019, Commission File No.

10.2 First Amendment to Second Amended and Restated Credit Agreement, dated as of February 18, 2022, by and among James River Group Holdings, Ltd., JRG Reinsurance Company Ltd., KeyBank National Association as Administrative Agent and the lenders party thereto (incorporated by reference to Exhibit 10.2 of the Annual Report on Form 10-K filed on March 1, 2022, Commission File No.

10.3 Second Amendment to Second Amended and Restated Credit Agreement, dated as of January 27, 2023, by and among James River Group Holdings, Ltd., JRG Reinsurance Company Ltd., KeyBank National Association as Administrative Agent and the lenders party thereto

10.4 Continuing Guaranty of Payment, dated as of June 5, 2013, by James River Group, Inc., as Guarantor, pursuant to Credit Agreement, dated as of June 5, 2013, among James River Group Holdings, Ltd.

10 unchanged sentences

and JRG Reinsurance Company Ltd.

as the borrowers, and BMO Harris Bank N.A., as the lender (incorporated by reference to Exhibit 10.7 of the Annual Report on Form 10-K filed on March 1, 2022, Commission File No.

10.9 Third Amendment to Credit Agreement dated as of January 27, 2023 by and among James River Group Holdings, Ltd.

and JRG Reinsurance Company Ltd.

as the borrowers, and BMO Harris Bank N.A., as the lender

1 unchanged sentence

(incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K filed on August 3, 2017, Commission File No.

Number Description

10.11 Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.7 of Amendment No.

17 unchanged sentences

2014 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on May 3, 2017, Commission File No.

10.17 Second Amendment to the James River Group Holdings, Ltd.

2014 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on October 26, 2022, Commission File No.

10.18 Form of Nonqualified Share Option Agreement (James River Group Holdings, Ltd.

10 unchanged sentences

333-199958, filed with the Commission on December 9, 2014)*

10.21 Form of Performance Restricted Share Unit Agreement

10.22 Form of Service-Based Restricted Share Unit Agreement

10.23 James River Group Holdings, Ltd.

Short-Term Incentive Plan

10.24 James River Group Holdings, Ltd.

2014 Non-Employee Director Incentive Plan (incorporated by reference to Exhibit 10.15 of Amendment No.

16 unchanged sentences

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 2, 2020, Commission File No.

10.24 Separation and Release Agreement, dated November 2, 2020, by and among J.

Adam Abram, James River Group Holdings, Ltd., and its subsidiary, James River Group, Inc.

(incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on November 2, 2020, Commission File No.

10.25 Separation and Release Agreement, dated as of August 2, 2021, by and among Robert P.

Myron, James River Group Holdings, Ltd., and its subsidiary, James River Group, Inc.

(incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on August 4, 2021, Commission File No.

10.30 Employment Agreement, dated December 19, 2016, by and among James River Group Holdings, Ltd., James River Group, Inc., and Sarah C.

3 unchanged sentences

(incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on November 8, 2018, Commission File No.

Number Description

10.32 Amended and Restated Employment Agreement, dated January 15, 2018, by and among James River Group, Inc., certain subsidiaries of James River Group, Inc.

and Richard Schmitzer (incorporated by reference to Exhibit 10.22 to Annual Report on Form 10-K filed on March 1, 2018, Commission File No.

Number Description

10.33 James River Management Company, Inc.

6 unchanged sentences

and Daniel Heinlein (incorporated by reference to Exhibit 10.31 to the Annual Report on Form 10-K filed on February 27, 2019, Commission File No.

10.36 Investment Agreement, dated February 24, 2022, by and between James River Group Holdings, Ltd.

and GPC Partners Investments (Thames) LP (incorporated by reference to Exhibit 10.1 on the Current Report on Form 8-K filed on February 28, 2022;

Commission File No.

10.37 Amendment No.

1 to Investment Agreement, dated March 1, 2022, by and between James River Group Holdings, Ltd.

and GPC Partners Investments (Thames) LP (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed on May 10, 2022;

Commission File No.

10.38 Certificate of Designations of 7% Series A Perpetual Cumulative Convertible Preferred Shares of James River Group Holdings, Ltd.

dated March 1, 2022 (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q filed on May 10, 2022;

Commission File No.

10.39 Registration Rights Agreement, dated March 1, 2022, by and between James River Group Holdings, Ltd.

and GPC Partners Investments (Thames) LP (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q filed on May 10, 2022;

Commission File No.

10.40 Loss Portfolio Transfer Reinsurance Agreement dated September 27, 2021 between James River Insurance Company and James River Casualty Company and Aleka Insurance, Inc.

2 unchanged sentences

(incorporated by reference to Exhibit 10.2 on the Current Report on Form 8-K filed on September 30, 2021, Commission File No.

10.34 I nvestment Agreement, dated Febr uary 24, 2022, by an d b etwee n James River Group Holdings, Ltd.

and GPC Partners Investments (Thames ) LP (incorporated by ref erence to Exhibit 10.1 on the Current Report on Form 8-K filed on February 28, 2022;

Commission File No.

10.42 Loss Portfolio Transfer Retrocession Agreement entered into on February 23, 2022 by and between JRG Reinsurance Company Ltd.

23 unchanged sentences

JAMES RIVER GROUP HOLDINGS, LTD.

March 1, 2022

February 28, 2023

Chief Executive Officer and Director

1 unchanged sentence

NAME TITLE DATE

D'Orazio Chief Executive Officer and Director March 1, 2022

Chief Executive Officer and Director February 28, 2023

D'Orazio (Principal Executive Officer)

Doran Chief Financial Officer March 1, 2022

Doran Chief Financial Officer February 28, 2023

Doran (Principal Financial Officer)

/s/ Michael E.

Crow Principal Accounting Officer March 1, 2022

Adam Abram Director, Non-Executive Chairman of the Board March 1, 2022

Crow Principal Accounting Officer February 28, 2023

Adam Abram Director, Non-Executive Chairman of the Board February 28, 2023

/s/ Matthew B.

Botein Director February 28, 2023

/s/ Thomas L.

Brown Director March 1, 2022

/s/ Janet Cowell Director March 1, 2022

/s/ Kirstin Gould Director March 1, 2022

Kirstin Gould

Masters Director March 1, 2022

Brown Director February 28, 2023

/s/ Kirstin M.

Gould Director February 28, 2023

Migliorato Director February 28, 2023

/s/ Michael T.

Oakes Director March 1, 2022

Oakes Director February 28, 2023

/s/ Patricia H.

Roberts Director March 1, 2022

Director March 1, 2022

/s/ Sundar Srinivasan Director March 1, 2022

Sundar Srinivasan

Roberts Director February 28, 2023

Director February 28, 2023

JAMES RIVER GROUP HOLDINGS, LTD.

4 unchanged sentences

Consolidated Balance Sheets as of December 31, 2022 and 2021

Consolidated Statements of Income and Comprehensive Income for the Years Ended

Consolidated Statements of Income (Loss) and Comprehensive (Loss) Income for the Years Ended

December 31, 2022, 2021 and 2020

14 unchanged sentences

We have audited the accompanying consolidated balance sheets of James River Group Holdings, Ltd.

and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of (loss) income and comprehensive (loss) income, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and the financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of income (loss) and comprehensive (loss) income, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and the financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 1, 2022, expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 28, 2023, expressed an unqualified opinion thereon.

Basis for Opinion

13 unchanged sentences

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

Valuation of incurred but not reported reserves

Description of the Matter At December 31, 2021, the Company’s reserve for losses and loss adjustment expenses balance was $2.7 billion, of which $1.6 billion relates to incurred but not reported (“IBNR”) reserves.

The carrying amount is management’s best estimate of the ultimate liability, which in turn is composed of known reported losses and an estimate of incurred losses that have not been reported to the Company.

As described in Note 1 of the consolidated financial statements, there is significant uncertainty inherent in determining management’s best estimate of the ultimate loss settlement cost which is used to determine the IBNR reserves.

In particular, the estimate is subject to a number of variables, given the long-tailed nature of the business generally written by the Company and the limited operating experience of certain lines of business.

These variables include the initial expected loss ratio, the incurred and paid loss development factors, and the weighting of the five actuarial methods to be used for each accident year and line of business.

Auditing management’s best estimate of the IBNR reserves involved the use of actuarial specialists and a high degree of subjectivity in evaluating management’s methods and variables included in the estimate of the ultimate loss settlement cost.

These variables have a significant effect on the valuation of the IBNR reserves.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the process to estimate the IBNR reserves, including, among others, the review and approval processes that management has in place for the methods and assumptions used in estimating the IBNR reserves.

To test the IBNR reserves, our procedures included, among others, the involvement of actuarial specialists to assist with the evaluation of the Company’s selection and weighting of actuarial methods used in their analysis and a comparison of those methods used in prior periods and those used in the industry.

We also independently calculated a range of reasonable reserve estimates and performed independent projections for certain lines of business.

Our independent ranges consider the sensitivity of the reserve projections to reasonable fluctuations in assumptions of key variables to determine the effect of reasonable changes in those assumptions on projected IBNR.

We compared the range of reasonable reserve estimates to management’s recorded best estimate and performed a review of the historical results of the development of the estimate.

Additionally, to evaluate the significant assumptions in the variables used by management in the actuarial methods, we compared the significant variables, including the initial expected loss ratio and the incurred and paid loss development factors, to factors historically used as well as our independent selections.

Valuation of reserves for losses and loss adjustment expenses

Description of the Matter At December 31, 2022, the Company’s reserve for losses and loss adjustment expenses balance was $2.8 billion.

As described in Notes 1 and 7 of the consolidated financial statements, reserves for losses and loss adjustment expenses reflect the estimated ultimate cost of all incurred unpaid claims including estimates of claims incurred but not reported and loss adjustment expenses as of the balance sheet date.

The estimate of ultimate losses and loss adjustment expenses relies on key judgments, including the weighting of five actuarial methods by line of business and accident year.

Actuarial assumptions include initial expected loss ratios, and incurred and paid loss development factors.

The subjectivity and uncertainty of estimating the reserve for losses and loss adjustment expenses is caused by various factors including the uncertainty of future frequency and severity of claims, economic and social trends including inflation, changes in the business and exposure mix, as well as changes in operations.

As such, performing audit procedures to evaluate the reserve for losses and loss adjustment expenses required a high degree of auditor judgment and an increased extent of effort, including the involvement of our actuarial specialists.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls related to the valuation of the reserve for losses and loss adjustment expenses.

This included testing controls that management has in place over the inputs, methods and assumptions used in estimating the reserve.

To test the reserve for losses and loss adjustment expenses, we evaluated the methods and assumptions used by the Company with the assistance of our actuarial specialists.

We compared the Company’s prior year assumptions of expected development of ultimate loss to actual losses incurred during the current year to identify potential management bias in the determination of the reserve for losses and loss adjustment expenses.

We evaluated management’s application of actuarial reserving methods and aforementioned factors, including actuarial assumptions and judgments impacting loss reserves.

We independently projected reserves for selected lines of business using actual historical data and loss development patterns, as well as industry data and other benchmarks where applicable, and compared management’s recorded reserves to these independent estimates.

/s/ Ernst & Young LLP

1 unchanged sentence

Charlotte, North Carolina

March 1, 2022

February 28, 2023

JAMES RIVER GROUP HOLDINGS, LTD.

7 unchanged sentences

and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria .

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of income and comprehensive income, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and related notes and financial statement schedules listed in the Index at Item 15(a) and our report dated March 1, 2022 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of income (loss) and comprehensive (loss) income, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2022, and related notes and financial statement schedules listed in the Index at Item 15(a) and our report dated February 28, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

16 unchanged sentences

Charlotte, North Carolina

March 1, 2022

February 28, 2023

JAMES RIVER GROUP HOLDINGS, LTD.

39 unchanged sentences

Funds held 310,953 97,360

Deferred reinsurance gain 20,091 —

Senior debt 222,300 262,300

1 unchanged sentence

Accrued expenses 59,566 57,920

Deferred tax liabilities, net — 1,105

Income taxes payable 13,900 —

Other liabilities 139,033 89,911

1 unchanged sentence

Commitments and contingent liabilities

Series A redeemable preferred shares – 2022 and 2021:

$ 0.00125 par value;

20,000,000 shares authorized;

150,000 and no shares issued and outstanding

Shareholders’ equity:

3 unchanged sentences

37,470,237 and 37,373,066 shares issued and outstanding, respectively

Preferred Shares – 2021 and 2020:

$ 0.00125 par value;

20,000,000 shares authorized;

no shares issued and outstanding

Additional paid-in capital 868,858 862,040

Retained (deficit) earnings ( 166,663 ) 49,227

Accumulated other comprehensive income 29,978 81,899

Retained deficit ( 152,055 ) ( 166,663 )

Accumulated other comprehensive (loss) income ( 163,044 ) 29,978

Total shareholders’ equity 553,766 725,362

Total liabilities and shareholders’ equity $ 4,948,550 $ 5,063,072

Total liabilities, Series A redeemable preferred shares, and shareholders’ equity $ 5,137,075 $ 4,948,550

See accompanying notes.

1 unchanged sentence

AND SUBSIDIARIES

Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income

Consolidated Statements of Income (Loss) and Comprehensive (Loss) Income

Year Ended December 31,

7 unchanged sentences

Net investment income 71,111 56,865 73,368

Net realized and unrealized gains (losses) on investments 15,564 ( 16,030 ) ( 2,919 )

Net realized and unrealized (losses) gains on investments ( 28,318 ) 15,564 ( 16,030 )

Other income 4,742 4,857 4,545

6 unchanged sentences

Total expenses 764,309 968,914 656,752

(Loss) income before income taxes ( 196,034 ) 11,937 51,867

Income tax (benefit) expense:

Income (loss) before income taxes 49,387 ( 196,034 ) 11,937

Income tax expense (benefit):

Current 13,787 ( 2,835 ) 11,534

1 unchanged sentence

18,414 ( 23,235 ) 7,113

Net (loss) income $ ( 172,799 ) $ 4,824 $ 38,339

Other comprehensive (losses) income:

Net income (loss) 30,973 ( 172,799 ) 4,824

Dividends on Series A preferred shares ( 8,750 ) — —

Net income (loss) available to common shareholders $ 22,223 $ ( 172,799 ) $ 4,824

Other comprehensive (loss) income:

Net unrealized (losses) gains, net of taxes of $( 27,041 ) in 2022, $( 7,135 ) in 2021, and $ 6,874 in 2020

1 unchanged sentence

Total comprehensive (loss) income $ ( 162,049 ) $ ( 224,720 ) $ 55,609

Per share data:

Basic (loss) earnings per share $ ( 4.94 ) $ 0.16 $ 1.27

Diluted (loss) earnings per share $ ( 4.94 ) $ 0.16 $ 1.25

Dividend declared per share $ 1.20 $ 1.20 $ 1.20

Net income (loss) per common share:

Basic $ 0.59 $ ( 4.94 ) $ 0.16

Diluted $ 0.59 $ ( 4.94 ) $ 0.16

Dividend declared per common share $ 0.20 $ 1.20 $ 1.20

Weighted-average common shares outstanding:

6 unchanged sentences

Outstanding Common

(Par) Preferred

Shares Additional

(Par) Additional

Capital Retained (Deficit)

7 unchanged sentences

Other comprehensive income — — — — 50,785 50,785

Dividends — — — — ( 36,786 ) — ( 36,786 )

Exercise of stock options

4 unchanged sentences

— — 7,625 — — 7,625

Adoption of ASU No.

2016-02, derecognition of build-to-suit lease (see Note 6) — — — — 8,280 — 8,280

Balances at December 31, 2019 30,424,391 $ 6 $ — $ 657,875 $ 89,586 $ 31,114 $ 778,581

Net income — — — — 4,824 — 4,824

Other comprehensive income — — — — — 50,785 50,785

Dividends — — — — ( 37,091 ) — ( 37,091 )

Exercise of stock options

113,346 — — 1,327 — — 1,327

Vesting of RSUs

111,524 — — ( 2,351 ) — — ( 2,351 )

Compensation expense under share incentive plans

— — — 7,625 — — 7,625

Dividends on common shares — — — ( 37,091 ) — ( 37,091 )

Cumulative effect of fair value option election (see Note 2) — — — ( 7,827 ) — ( 7,827 )

Cumulative effect of adoption of ASU No.

2016-13 (see Note 1) — — — — ( 265 ) — ( 265 )

2016-13 — — — ( 265 ) — ( 265 )

Balances at December 31, 2020 30,649,261 $ 6 $ 664,476 $ 49,227 $ 81,899 $ 795,608

1 unchanged sentence

Other comprehensive loss — — — — ( 51,921 ) ( 51,921 )

Dividends — — — — ( 43,091 ) — ( 43,091 )

Issuance of common shares 6,497,500 1 192,106 — — 192,107

5 unchanged sentences

— — 6,658 — — 6,658

Dividends on common shares — — — ( 43,091 ) — ( 43,091 )

Balances at December 31, 2021 37,373,066 $ 7 $ 862,040 $ ( 166,663 ) $ 29,978 $ 725,362

Net income — — — 30,973 — 30,973

Other comprehensive loss — — — — ( 193,022 ) ( 193,022 )

Vesting of RSUs 97,171 — ( 1,304 ) — — ( 1,304 )

Compensation expense under share incentive plans — — 8,122 — — 8,122

Dividends on Series A preferred shares — — — ( 8,750 ) — ( 8,750 )

Dividends on common shares — — — ( 7,615 ) — ( 7,615 )

Balances at December 31, 2022 37,470,237 $ 7 $ 868,858 $ ( 152,055 ) $ ( 163,044 ) $ 553,766

See accompanying notes.

6 unchanged sentences

Operating activities

Net (loss) income $ ( 172,799 ) $ 4,824 $ 38,339

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

Net income (loss) $ 30,973 $ ( 172,799 ) $ 4,824

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Deferred policy acquisition costs ( 79,648 ) ( 75,236 ) ( 76,525 )

Amortization of policy acquisition costs 88,571 69,663 75,578

Net realized and unrealized (gains) losses on investments ( 15,564 ) 16,030 2,919

Net realized and unrealized losses (gains) on investments 28,318 ( 15,564 ) 16,030

Distributions from equity method investments 4,364 2,434 3,162

13 unchanged sentences

Other 83,219 43,306 ( 784 )

Net cash (used in) provided by operating activities (a) ( 913,546 ) ( 273,830 ) 1,489,022

Net cash provided by (used in) operating activities (a) 222,734 ( 913,546 ) ( 273,830 )

Investing activities

17 unchanged sentences

Purchases of property and equipment ( 8,219 ) ( 6,303 ) ( 549 )

Net cash provided by (used in) investing activities 35,823 ( 175,991 ) ( 263,359 )

Net cash (used in) provided by investing activities ( 328,154 ) 35,823 ( 175,991 )

Financing activities

1 unchanged sentence

Senior debt repayments ( 40,000 ) — ( 60,000 )

Dividends paid ( 43,236 ) ( 37,051 ) ( 36,720 )

Issuance of Series A preferred shares (Note 11) 144,898 — —

Issuances of common shares - public offering — 192,107 —

1 unchanged sentence

Common share repurchases ( 1,304 ) ( 3,077 ) ( 3,604 )

Other financing activities — — ( 711 )

Dividends on Series A preferred shares ( 6,125 ) — —

Dividends on common shares ( 7,798 ) ( 43,236 ) ( 37,051 )

Net cash provided by financing activities 89,671 147,671 65,925

2 unchanged sentences

Cash, cash equivalents, and restricted cash equivalents at end of year $ 276,379 $ 292,128 $ 1,022,180

Supplemental information

federal income taxes (refunded) paid, net $ ( 3,932 ) $ 17,236 $ 18,719

Interest paid $ 9,927 $ 11,305 $ 12,354

JAMES RIVER GROUP HOLDINGS, LTD.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Year Ended December 31,

1 unchanged sentence

(in thousands)

Supplemental information

federal income taxes (refunded) paid, net $ ( 3,470 ) $ ( 3,932 ) $ 17,236

Interest paid $ 17,425 $ 9,927 $ 11,305

Restricted cash equivalents at beginning of year $ 102,005 $ 859,920 $ 1,199,164

1 unchanged sentence

Change in restricted cash equivalents $ 1,210 $ ( 757,915 ) $ ( 339,244 )

(a) Cash (used in) provided by operating activities for the years ended December 31, 2021, 2020, and 2019 primarily reflects the activity in restricted cash equivalents above.

(a) Cash provided by (used in) operating activities for the years ended December 31, 2022, 2021, and 2020 reflects the activity in restricted cash equivalents above.

As permitted under the agreements establishing the Indemnity Trust and the LPT Trust, we have withdrawn collateral from the Indemnity Trust and the LPT Trust to fund the Loss Fund Trust as required under the Administrative Services Agreement.

1 unchanged sentence

Management’s Discussion and Analysis of Financial Condition and Results of Operations – Amounts Recoverable from an Indemnifying Party and Reinsurer on Legacy Commercial Auto Book ”.

Excluding the restricted cash activity above, cash (used in) provided by operating activities was $( 155.6 ) million, $ 65.4 million, and $ 289.9 million for the years ended December 31, 2021, 2020, and 2019, respectively.

The cash used in operating activities (excluding restricted cash equivalents) in 2021 was largely driven by the $ 317.6 million of reinsurance premium paid in September 2021 to effect the LPT transaction.

Excluding the restricted cash activity above, cash provided by (used in) operating activities was $ 221.5 million, $( 155.6 ) million, and $ 65.4 million for the years ended December 31, 2022, 2021, and 2020, respectively.

The cash used in operating activities (excluding restricted cash equivalents) in 2021 was largely driven by $ 317.6 million paid to effect a loss portfolio transfer reinsurance transaction.

See accompanying notes.

6 unchanged sentences

(referred to as “JRG Holdings” or, with its subsidiaries, the “Company”) is an exempted holding company registered in Bermuda, organized for the purpose of acquiring and managing insurance and reinsurance entities.

The Company owns five insurance companies based in the United States (“U.S.”) focused on specialty insurance niches and two Bermuda-based reinsurance companies as described below:

The Company owns five insurance companies based in the United States (“U.S.”) focused on specialty insurance niches and a Bermuda-based reinsurance company as described below:

• James River Group Holdings UK Limited (“James River UK”) is an insurance holding company formed in 2015 in the United Kingdom (“U.K.”).

13 unchanged sentences

third parties and, through December 31, 2017, to the Company’s U.S.-based insurance subsidiaries.

• Carolina Re Ltd ("Carolina Re") was formed in 2018 and as of January 1, 2018 provides reinsurance to the Company's U.S.-based insurance subsidiaries.

Carolina Re is also the cedent on a stop loss reinsurance treaty with JRG Re.

Basis of Presentation and Principles of Consolidation

12 unchanged sentences

Premiums and discounts on mortgage-backed securities and asset-backed securities are amortized or accrued using the constant yield method which considers anticipated prepayments at the date of purchase.

To the extent that the estimated lives of

To the extent that the estimated lives of such securities change as a result of changes in estimated prepayment rates, the adjustments are included in net investment income using the retrospective method.

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

such securities change as a result of changes in estimated prepayment rates, the adjustments are included in net investment income using the retrospective method.

Realized investment gains or losses are determined on a specific identification basis.

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Discounts and premiums are amortized to income using the interest method.

Prior to the election of the fair value option on January 1, 2020, bank loan participations were generally stated at their outstanding unpaid principal balances net of unamortized premiums or discounts and net of any allowance for credit losses.

The allowance for credit losses was maintained at a level considered adequate to absorb estimated probable credit losses.

Generally, the accrual of interest on a bank loan participation is discontinued when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about further collectability of principal or interest.

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Short-term investments have maturities greater than three months but less than one year at the date of purchase.

Cash Equivalents

The Company considers highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents.

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

Cash Equivalents

The Company considers highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents.

Restricted Cash Equivalents

23 unchanged sentences

The allowance for credit losses was $ 16.2 million and $ 16.7 million at December 31, 2022 and 2021, respectively.

Credit loss expense was $ 9.4 million for the year ended December 31, 2021 ($ 7.1 million of which will be deducted from amounts due to our reinsurers), $ 3.3 million for the year ended December 31, 2020, and $ 2.5 million for the year ended December 31, 2019.

Receivables written off against the allowance for credit losses totaled $ 1.1 million for the year ended December 31, 2021, $ 660,000 for the year ended December 31, 2020, and $ 812,000 for the year ended December 31, 2019.

Credit loss expense was $ 1.1 million for the year ended December 31, 2022, $ 9.4 million for the year ended December 31, 2021 ($ 7.1 million of which was deducted from amounts due to our reinsurers), and $ 3.3 million for the year ended December 31, 2020.

Receivables written off against the allowance for credit losses totaled $ 1.5 million for the year ended December 31, 2022, $ 1.1 million for the year ended December 31, 2021, and $ 660,000 for the year ended December 31, 2020.

Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

5 unchanged sentences

The Company considers anticipated investment income in determining whether a premium deficiency exists.

Reinsurance and Adjustable Features of Insurance and Reinsurance Contracts

Certain premiums and losses are ceded to other insurance companies or assumed from other insurance companies under various excess of loss and quota-share reinsurance contracts.

The Company enters into ceded reinsurance contracts to limit its

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

Reinsurance and Adjustable Features of Insurance and Reinsurance Contracts

Certain premiums and losses are ceded to other insurance companies or assumed from other insurance companies under various excess of loss and quota-share reinsurance contracts.

The Company enters into ceded reinsurance contracts to limit its exposure to large losses, to limit exposure on new lines of insurance written by the Company, and to provide additional capacity for growth.

exposure to large losses, to limit exposure on new lines of insurance written by the Company, and to provide additional capacity for growth.

Premiums, commissions, and losses and loss adjustment expenses on reinsured business are accounted for on a basis consistent with that used in accounting for the original policies issued and the terms of the reinsurance contracts.

30 unchanged sentences

To determine the amount of any goodwill impairment, the implied fair value of reporting unit goodwill is compared to the carrying amount of that goodwill.

The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business

The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination is determined.

That is, the fair value of a reporting unit is assigned to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination.

The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill.

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

combination is determined.

The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill.

Intangible Assets, Net

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Property and Equipment, Net

Property and equipment, which is included in “other assets” in the accompanying consolidated balance sheets, is reported at cost less accumulated depreciation and is depreciated principally on a straight-line basis over the estimated useful lives of the depreciable assets, generally three to ten years .

Reserve for Losses and Loss Adjustment Expenses

9 unchanged sentences

Management believes that the use of judgment is necessary to arrive at a best estimate for the reserve for losses and loss adjustment expenses given the long-tailed nature of the business generally written by the Company and the limited operating experience of the Casualty Reinsurance segment, the fronting and program business in the Specialty Admitted Insurance segment, and the commercial auto business in the Excess and Surplus Lines segment.

Judgment is also required to make actuarial adjustments, if needed, for changes in claims processing and case reserving that could cause current reported loss and paid loss development patterns to deviate from historical patterns.

The Company believes that the insurance that it writes is subject to above-average variation in reserve estimates.

The Excess and Surplus Lines market is subject to high policyholder turnover and changes in underlying mix of exposures.

This turnover and change in underlying mix of exposures can cause actuarial estimates based on prior experience to be less reliable than estimates for more stable, admitted books of business.

Catastrophes of significant magnitude, including hurricanes and earthquakes, involve complex coverage issues.

In estimating the reserve for losses and loss adjustment expenses for these catastrophes, management uses case reserve estimates based on information obtained from site inspections by the Company’s adjustors and the terms of coverage provided in the policies.

Management estimates reserves for incurred but not reported claims for these catastrophes using judgment based on an assessment of the Company’s property insurance exposures where the catastrophes occur and the Company’s progress in settling claims.

Management estimates reserves for incurred but not reported claims for these catastrophes using judgment based on an

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

assessment of the Company’s property insurance exposures where the catastrophes occur and the Company’s progress in settling claims.

Although management believes that the reserve for losses and loss adjustment expenses is reasonable, it is possible that the Company’s actual incurred losses and loss adjustment expenses will not develop in a manner consistent with the assumptions inherent in the determination of these reserves.

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As the share based compensation expense is incurred, a corresponding increase to additional paid-in capital in shareholders’ equity is recognized.

Share based compensation expense is reflected in “other operating expenses” in the accompanying consolidated statements of (loss) income and comprehensive (loss) income.

Share based compensation expense is reflected in “other operating expenses” in the accompanying consolidated statements of income (loss) and comprehensive (loss) income.

Variable Interest Entities

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The Company’s investments related to these VIEs totaled $ 9.2 million and $ 26.9 million as of December 31, 2022 and 2021, respectively, representing the Company’s maximum exposure to loss.

(Loss) Earnings Per Share

Basic (loss) earnings per share excludes dilution and is computed by dividing net (loss) income by the weighted-average number of common shares outstanding for the period.

Diluted (loss) earnings per share reflects the dilution that could occur if securities or other contracts to issue common shares or common share equivalents were exercised or converted into common shares as calculated using the treasury stock method.

When inclusion of common share equivalents increases the earnings per share or reduces the loss per share, the effect on earnings is anti-dilutive, and the diluted net earnings or net loss per share is computed excluding these common share equivalents.

Earnings (Loss) Per Share

Basic earnings (loss) per share excludes dilution and is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period.

Diluted earnings (loss) per share reflects the dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares as calculated using the treasury stock method.

When inclusion of potential common shares increases the earnings per share or reduces the loss per share, the effect on earnings is anti-dilutive, and the diluted net earnings or net loss per share is computed excluding these potential common shares.

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

The following represents a reconciliation of the numerator and denominator of the basic and diluted (loss) earnings per share computations contained in the consolidated financial statements.

Net (Loss) Income

(Numerator) Weighted-Average

Common Shares

(Denominator) (Loss) Earnings

(in thousands, except per share data)

Year ended December 31, 2021

Basic $ ( 172,799 ) 34,956,957 $ ( 4.94 )

Common share equivalents — — —

Diluted $ ( 172,799 ) 34,956,957 $ ( 4.94 )

The following represents a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per common share computations contained in the consolidated financial statements.

Year Ended December 31,

2022 2021 2020

(in thousands, except share and per share amounts)

Net income (loss) $ 30,973 $ ( 172,799 ) $ 4,824

Dividends on Series A preferred shares ( 8,750 ) — —

Net income (loss) available to common shareholders $ 22,223 $ ( 172,799 ) $ 4,824

Weighted average common shares outstanding:

Basic 37,442,856 34,956,957 30,552,210

Common share equivalents — 332,206 —

Dilutive potential common shares 208,113 — 332,206

Diluted 37,650,969 34,956,957 30,884,416

Year ended December 31, 2019

Net income (loss) per common share:

Basic $ 0.59 $ ( 4.94 ) $ 0.16

Common share equivalents — 398,740 ( 0.02 )

Dilutive potential common shares — — —

Diluted $ 0.59 $ ( 4.94 ) $ 0.16

Common share equivalents relate to our outstanding equity awards (stock options and RSUs).

For the year ended December 31, 2021, common share equivalents of 175,360 were excluded from the calculation of diluted loss per share as their effects were anti-dilutive.

For the year ended December 31, 2020, all common share equivalents were dilutive.

For the year ended December 31, 2019, 9,735 shares were excluded from the calculation of diluted earnings per share as their effects were anti-dilutive.

For the years ended December 31, 2022 and 2021, potential common shares of 4,728,461 and 175,360 , respectively, were excluded from the calculation of diluted earnings (loss) per common share as their effects were anti-dilutive.

For the year ended December 31, 2020, all potential common shares were dilutive.

Adopted Accounting Standards

There were no new accounting standards adopted in 2021 that materially impacted the Company's financial statements .

In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock and became effective for interim and annual periods beginning after December 15, 2021.

The Company adopted the new standard concurrent with the issuance of our 7 % Series A Perpetual Cumulative Convertible Preferred Shares, par value $ 0.00125 per share, on March 1, 2022.

Under ASU 2020-06, embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital.

The new guidance also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and generally requires them to include the effect of potential share settlement for instruments that may be settled in cash or shares.

Adoption of the new standard did not materially impact our financial position, results of operations, or earnings per share for the year ended December 31, 2022.

Prospective Accounting Standards

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Total fixed maturity securities, available-for-sale $ 596,444 $ ( 11,018 ) $ 21,161 $ ( 1,539 ) $ 617,605 $ ( 12,557 )

The Company held securities of 230 issuers that were in an unrealized loss position at December 31, 2021 with a total fair value of $ 617.6 million and gross unrealized losses of $ 12.6 million.

At December 31, 2022, the Company held fixed maturity securities of 560 issuers that were in an unrealized loss position with a total fair value of $ 1,588.2 million and gross unrealized losses of $ 189.5 million.

None of the fixed maturity securities with unrealized losses has ever missed, or been delinquent on, a scheduled principal or interest payment.

At December 31, 2022, 99.8 % of the Company’s fixed maturity security portfolio was rated “BBB-” or better (“investment grade”) by Standard & Poor’s or received an equivalent rating from another nationally recognized rating agency.

Fixed maturity securities with ratings below investment grade by Standard & Poor's or another nationally recognized rating agency at December 31, 2022 had an aggregate fair value of $ 2.7 million and an aggregate net unrealized loss of $ 221,000 .

The Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

11 unchanged sentences

Management does not intend to sell the securities in an unrealized loss position, and it is not "more likely than not" that the Company will be required to sell these securities before a recovery in their value to their amortized cost basis occurs.

Management concluded that none of the fixed maturity securities with an unrealized loss at December 31, 2019 experienced an other-than-temporary impairment.

James River Group Holdings, Ltd.

9 unchanged sentences

At December 31, 2022, the Company's bank loan portfolio had an aggregate unpaid principal balance of $ 175.7 million and an aggregate fair value of $ 155.0 million.

Investment income on bank loan participations included in net investment income was $ 10.6 million and $ 12.2 million during the years ended December 31, 2021 and 2020, respectively.

Net realized and unrealized gains (losses) on investments includes gains of $ 6.7 million and $ 1.3 million related to changes in unrealized gains and losses on bank loan participations for the years ended December 31, 2021 and 2020, respectively.

Management concluded that no ne of the unrealized losses were due to credit-related impairments for the year ended December 31, 2021.

For the year ended December 31, 2020, management concluded that $ 8.3 million of unrealized losses were due to credit-related impairments.

Investment income on bank loan participations included in net investment income was $ 12.6 million, $ 10.6 million, $ 12.2 million during the years ended December 31, 2022, 2021, and 2020 respectively.

Net realized and unrealized (losses) gains on investments includes losses of $ 15.9 million and gains of $ 6.7 million and $ 1.3 million related to changes in unrealized gains and losses on bank loan participations for the years ended December 31, 2022, 2021, and 2020, respectively.

For the year ended December 31, 2022, management concluded that $ 1.5 million of the unrealized losses were due to credit-related impairments.

Management concluded that none of the unrealized losses were due to credit-related impairments for the year ended December 31, 2021.

For the year ended December 31, 2020, management concluded that $ 8.3 million of the unrealized losses were due to credit-related impairments.

Losses due to credit-related impairments were determined based upon consultations and advice from the Company's specialized investment manager and consideration of any adverse situations that could affect the borrower's ability to repay, the estimated value of underlying collateral, and other relevant factors.

Prior to the election of the fair value option on January 1, 2020, bank loan participations were classified as held-for-investment and carried at amortized cost net of any allowance for credit losses.

Under the prior accounting method, management concluded that seven loans from six issuers in the Company's bank loan portfolio were impaired at December 31, 2019 .

At December 31, 2019 , the impaired loans had a carrying value of $ 6.9 million, unpaid principal of $ 14.3 million, and an allowance for credit losses of $ 7.2 million , $ 5.1 million of which related to two loans from one issuer that was experiencing liquidity concerns resulting from revenue declines and poor growth prospects in its most profitable segment.

Bank loan participations generally have a credit rating that is below investment grade (i.e.

10 unchanged sentences

There were no bank loans on nonaccrual status at December 31, 2022 or 2021.

The average recorded investment in impaired bank loans was $ 3.5 million during the year ended December 31, 2019 and investment income of $ 293,000 was recognized during the time that the loans were impaired.

The Company recorded losses of $ 8.9 million during the year ended December 31, 2019 for changes in the fair value of impaired bank loans.

At December 31, 2019 , unamortized discounts on bank loan participations were $ 2.4 million, and unamortized premiums were $ 4,000 .

James River Group Holdings, LTD.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2021, 2020, and 2019

Major categories of the Company’s net investment income are summarized as follows:

10 unchanged sentences

Net investment income $ 71,111 $ 56,865 $ 73,368

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

The Company’s net realized and unrealized gains and losses on investments are summarized as follows:

20 unchanged sentences

Changes in fair values of short-term investments and other 1 80 ( 80 )

( 131 ) 5 ( 5 )

Total $ ( 28,318 ) $ 15,564 $ ( 16,030 )

The change in the Company’s available-for-sale fixed maturity gross unrealized net losses was $( 220.1 ) million for the year ended December 31, 2022.

The change in the Company's available-for-sale fixed maturity gross unrealized net (losses) gains was $( 59.1 ) million and $ 57.7 million for the years ended December 31, 2021 and 2020, respectively.

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

The change in the Company’s available-for-sale fixed maturity gross unrealized net gains was $( 59.1 ) million, $ 57.7 million, and $ 50.3 million for the years ended December 31, 2021, 2020, and 2019, respectively.

The Company invests selectively in private debt and equity opportunities.

25 unchanged sentences

(a) The Company’s Excess and Surplus Lines and Corporate and Other segments own equity interests ranging from 2.6 % to 4.9 % in various LLCs whose principal objective is capital appreciation and income generation from owning and operating renewable energy production facilities (wind and solar).

The LLCs are managed by an entity for which two of our former directors serve as officers, and the Company’s Non-Executive Chairman has invested in certain of these LLCs.

The LLCs are managed by an entity for which two of our former directors served as officers, and the Company’s Non-Executive Chairman has invested in certain of these LLCs.

The equity method is used to account for the Company’s LLC investments.

2 unchanged sentences

Expenses for the LLCs are not significant and are comprised of administrative and interest expenses.

During the year ended December 31, 2021, the Company transferred $ 26.3 million of its investments in the LLCs from the Corporate and Other segment to the Excess and Surplus Lines segment.

The Company received cash distributions from these investments totaling $ 1.8 million and $ 3.1 million for the years ended December 31, 2021 and 2020, respectively.

During the fourth quarter of 2022, the underlying projects in two of our LLCs were sold at the manager's discretion.

We received $ 20.2 million, comprised of $ 17.2 million in the Excess and Surplus Lines segment and $ 3.0 million in the Corporate and Other segment, and could receive additional contingent payments in the future according to terms of the transaction.

The Company received cash distributions from all renewable energy investments totaling $ 21.6 million and $ 1.8 million for the years ended December 31, 2022 and 2021, respectively.

(b) The Company's Excess and Surplus Lines and Corporate and Other segments have invested in notes receivable for renewable energy projects.

2 unchanged sentences

During the year ended December 31, 2022 , the Company received principal repayments of $ 1.1 million and $ 1.4 million on the notes receivable in the Company's Excess and Surplus Lines segment and Corporate and Other segment, respectively.

During the year ended December 31, 2020 , the Company received the total principal balance of $ 8.8 million plus a $ 5.3 million gain at maturity on an earlier note receivable for renewable energy projects.

Interest on that note was fixed at 15 %.

During the year ended December 31, 2021 , the Company received principal repayments of $ 1.7 million and $ 2.1 million on the notes receivable in the Company's Excess and Surplus Lines segment and Corporate and Other segment, respectively.

James River Group Holdings, Ltd.

4 unchanged sentences

Income from the partnerships is recognized under the equity method of accounting.

During the year ended December 31, 2021, the Company transferred $ 5.1 million of its investments in the limited partnerships from the Corporate and Other segment to the Excess and Surplus Lines segment.

During the year ended December 31, 2022, the Company recognized an impairment loss of $ 538,000 on one limited partnership in the Corporate & Other segment.

At December 31, 2022, the Company’s Excess and Surplus Lines segment has outstanding commitments to invest another $ 5.3 million in these limited partnerships.

(d) The Company's Excess and Surplus Lines segment holds $ 4.5 million of subordinated notes issued by a bank holding company for which the Company’s Non-Executive Chairman was previously the Lead Independent Director and an investor and for which one of the Company’s directors is also an investor (the "Bank Holding Company").

During the year ended December 31, 2021, the Company transferred ownership of the subordinated notes from the Corporate and Other segment to the Excess and Surplus Lines segment.

Interest on the notes, which mature in 2023, is fixed at 7.6 % per annum.

At December 31, 2020, the Company held an investment in a collateralized loan obligation (CLO) where one of the underlying loans was issued by the Bank Holding Company.

The investment, with a carrying value of $ 520,000 at December 31, 2020, was classified as an available-for-sale fixed maturity.

During the year ended December 31, 2021, the Company received the final principal repayment for the investment.

The Company maintains fixed maturity securities, short-term investments, accrued investment income, and cash and cash equivalents amounting to $ 515.7 million at December 31, 2022 in trust accounts or on deposit as collateral for outstanding letters of credit issued as security to third-party reinsureds on reinsurance assumed by JRG Re.

44 unchanged sentences

Total $ 4,511

The table below summarizes the changes in the net carrying values of intangible assets by segment for 2021:

The table below summarizes the changes in the net carrying values of intangible assets by segment for the year ended December 31, 2022:

December 31, 2021 December 31, 2022

10 unchanged sentences

Insurance licenses and authorities 4,065 — — 4,065

Broker relationships — — — —

6,565 — — 6,565

4 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

The table below summarizes the changes in the net carrying values of intangible assets by segment for 2020:

The table below summarizes the changes in the net carrying values of intangible assets by segment for the year ended December 31, 2021:

December 31, 2020 December 31, 2021

10 unchanged sentences

Insurance licenses and authorities 4,065 — — 4,065

Broker relationships 172 ( 172 ) — —

6,565 — — 6,565

10 unchanged sentences

The Company has entered into operating leases for office space in Bermuda, North Carolina, Virginia, Arizona, and Georgia.

Following the adoption of ASU 2016-02, Leases (Topic 842) , effective January 1, 2019, the present value of future lease payments for the Company’s leases with terms greater than 12 months are included on the consolidated balance sheets as lease liabilities and right-of-use lease assets.

The present value of future lease payments for the Company’s leases with terms greater than 12 months are included on the consolidated balance sheets as lease liabilities and right-of-use lease assets.

For leases with terms of 12 months or less, lease payments are recognized in other operating expenses on a straight-line basis over the lease term.

Total expected lease payments are based on the lease payments specified in the contract and the stated term, including any options to extend or terminate that the Company is reasonably certain to exercise.

The Company has elected the practical expedient to account for lease components and any associated non-lease components as a single lease component, and therefore allocates all of the expected lease payments to the lease component.

The Company elected the practical expedient to account for lease components and any associated non-lease components as a single lease component, and therefore allocates all of the expected lease payments to the lease component.

The lease liability, which represents the Company’s obligation to make lease payments arising from the lease, is calculated based on the present value of expected lease payments over the remaining lease term, discounted using the Company’s collateralized incremental borrowing rate at the commencement date.

5 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

Upon adoption of the new standard on January 1, 2019, the Company derecognized assets of $ 22.6 million and liabilities of $ 30.9 million associated with a lease that was designated as build-to-suit under the previous guidance, and recorded a cumulative-effect adjustment to increase retained earnings by $ 8.3 million.

The Company also recorded right-of-use assets of $ 17.2 million and lease liabilities of $ 17.8 million at adoption of the new standard associated with the Company's operating leases.

At December 31, 2022, lease liabilities and right-of-use assets associated with the Company's operating leases were $ 9.1 million and $ 8.2 million, respectively ($ 12.8 million and $ 11.7 million at December 31, 2021, respectively).

2 unchanged sentences

Years ending December 31, (in thousands)

Thereafter 90

Total lease payments 9,613

5 unchanged sentences

Rental expense is recognized on a straight line basis over the lease term and includes amortization of the right-of-use lease asset and imputed interest on the lease liability.

Operating lease costs are included in other operating expenses in the Company's consolidated statements of (loss) income and comprehensive (loss) income.

Operating lease costs are included in other operating expenses in the Company's consolidated statements of income (loss) and comprehensive (loss) income.

Reserve for Losses and Loss Adjustment Expenses

In establishing the reserve for losses and loss adjustment expenses, the Company’s internal actuaries estimate an initial expected ultimate loss ratio for each of our lines of business by accident year (or for our Casualty Reinsurance segment, on a contract by contract basis).

In establishing the reserve for losses and loss adjustment expenses, the Company’s internal actuaries estimate an initial expected ultimate loss ratio for each of our lines of business by accident year (or for the Casualty Reinsurance segment, on a contract by contract basis).

Input from the Company’s underwriting and claims departments, including premium pricing assumptions and historical experience, are considered by the Company’s internal actuaries in estimating the initial expected loss ratios.

3 unchanged sentences

the initial expected loss ratios, the incurred and paid loss development factors and the weighting of the five actuarial methods to be used for each accident year and line of business.

For the Excess and Surplus Lines and Specialty Admitted Insurance segments, the internal actuaries perform a study on each of these parameters annually and make recommendations for the initial expected loss ratios, the incurred and paid loss development factors and the weighting of the five actuarial methods by accident year and line of business.

For the Excess and Surplus Lines segment, the internal actuaries perform a study on each of these parameters at least annually and make recommendations for the initial expected loss ratios, the incurred and paid loss development factors and the weighting of the five actuarial methods by accident year and line of business.

Members of management’s Reserve Committee review and approve the parameter review actuarial recommendations, and absent any developments requiring an earlier review, these approved parameters are used in the reserve estimation process for the next four quarters at which time a new parameter study is performed.

For the Specialty Admitted Insurance segment, expected loss ratios, loss development factors, and loss cost trends are reviewed and updated at least annually.

For the Casualty Reinsurance segment, periodic assessments are made on a contract by contract basis.

Method weights are generally less rigid for the Casualty Reinsurance

Method weights are generally less rigid for the Casualty Reinsurance segment given the heterogeneous nature of the various contracts, and the potential for significant changes in mix of business within individual treaties.

Different reserving methods are appropriate in different situations, and the Company’s internal actuaries use their judgment and experience to determine the weighting of the methods to use for each accident year and each line of business and, for the Casualty Reinsurance segment, on a contract by contract basis.

For example, the current accident year has very little

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

segment given the heterogeneous nature of the various contracts, and the potential for significant changes in mix of business within individual treaties.

Different reserving methods are appropriate in different situations, and the Company’s internal actuaries use their judgment and experience to determine the weighting of the methods to use for each accident year and each line of business and, for our Casualty Reinsurance segment, on a contract by contract basis.

For example, the current accident year has very little incurred and paid loss development data on which to base reserve projections.

incurred and paid loss development data on which to base reserve projections.

As a result, the Company relies heavily on the initial expected loss ratio in estimating reserves for the current accident year.

9 unchanged sentences

Reserve for losses and loss adjustment expenses net of reinsurance recoverables at beginning of period $ 1,399,214 $ 1,386,061 $ 1,377,461

$ 1,386,061 $ 1,377,461 $ 1,194,088

Incurred losses and loss adjustment expenses net of reinsurance:

Current year 515,653 466,574 386,341

Prior years 325,778 92,204 69,008

Prior years - retroactive reinsurance 20,091 — —

Prior years - excluding retroactive reinsurance 9,070 325,778 92,204

Total incurred losses and loss and adjustment expenses 544,814 792,352 478,545

3 unchanged sentences

Total loss and loss adjustment expense payments 392,468 522,747 469,945

Loss reserves ceded in LPT Transaction 256,452 — —

Deferred reinsurance gain - retroactive reinsurance 20,091 — —

Loss reserves ceded in loss portfolio transfers 299,493 256,452 —

Changes in reinsurance recoverable of Casualty Re LPT unrelated to net reserve activity 16,294 — —

Reserve for losses and loss adjustment expenses net of reinsurance recoverables at end of period 1,248,270 1,399,214 1,386,061

1,399,214 1,386,061 1,377,461

Reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period 1,520,725 1,349,259 806,019

1,349,259 806,019 668,045

Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 2,768,995 $ 2,748,473 $ 2,192,080

$ 2,748,473 $ 2,192,080 $ 2,045,506

The foregoing reconciliation shows that $ 9.1 million of adverse development was experienced in 2022 on the reserve for losses and loss adjustment expenses held at December 31, 2021 (excluding adverse prior year development on the loss portfolio transfers subject to retroactive reinsurance accounting - see Loss Portfolio Transfers below).

This adverse reserve development included $ 210,000 of favorable development in the Excess and Surplus Lines segment, $ 4.2 million of favorable development in the Specialty Admitted Insurance segment, and $ 13.4 million of adverse development in the Casualty Reinsurance segment, including $ 6.8 million of net adverse reserve development in the three months ended March 31, 2022 associated with the Casualty Re LPT.

The Company also experienced $ 5.0 million of net catastrophe losses in the current accident year in 2022 related to Hurricane Ian.

The foregoing reconciliation shows that $ 325.8 million of adverse development was experienced in 2021 on the reserve for losses and loss adjustment expenses held at December 31, 2020.

This adverse reserve development included $ 190.7 million of adverse development in the Excess and Surplus Lines segment, including $ 200.1 million of adverse development in the commercial auto line of business that was primarily related to the 2019 and prior accident years with Rasier LLC and its affiliates (collectively, “Rasier”) .

The adverse development for commercial auto was partially offset by $ 9.4 million of favorable development in other Excess and Surplus Lines underwriting divisions.

Favorable reserve development in the Specialty Admitted Insurance segment was $ 2.5 million as losses on our workers’ compensation business written prior to 2020 continued to develop more favorably than we had anticipated.

The Casualty Reinsurance segment experienced $ 137.6 million of adverse development on prior underwriting years.

Actual reported and paid losses in the Casualty Reinsurance segment significantly exceeded expectations in 2021, particularly in the fourth quarter of 2021, causing us to refine some of the assumptions used to determine our best estimate of ultimate losses for this segment.

Specifically, we responded to this highly

This adverse reserve development included $ 190.7 million of adverse development in the Excess and Surplus Lines segment including $ 200.1 million of adverse development in the commercial auto line of business that was primarily related to the 2019 and prior accident years with Rasier LLC and its

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

elevated loss emergence by making significant adjustments to our assumed tail factors, other development factors, initial expected loss ratios, and weights given to various actuarial methods.

affiliates (collectively, “Rasier”) .

The adverse development for commercial auto was partially offset by $ 9.4 million of favorable development in other Excess and Surplus Lines underwriting divisions.

The Casualty Reinsurance segment experienced $ 137.6 million of adverse development on prior accident years.

Specifically, we responded to this highly elevated loss emergence by making significant adjustments to our assumed tail factors, other development factors, initial expected loss ratios, and weights given to various actuarial methods.

In particular, we gave significantly more weight to incurred loss development methods and Bornhuetter – Ferguson incurred loss development methods than had been done previously.

These actuarial refinements resulted in material deterioration in ultimate loss selections for underwriting years 2014 through 2018.

The adverse development was concentrated in four treaties, three of which were general liability and one which was professional liability.

Of the $ 137.6 million of adverse development recognized in 2021, $ 113.4 million was concentrated in these four treaties.

The adverse development was concentrated in a few large treaties for general liability and professional liability lines of business.

Of the $ 137.6 million of adverse development recognized in 2021, $ 113.4 million was concentrated in these treaties.

The Company also experienced $ 5.0 million of net catastrophe losses in the current accident year in 2021 related to Hurricane Ida.

The foregoing reconciliation shows that $ 92.2 million of adverse development was experienced in 2020 on the reserve for losses and loss adjustment expenses held at December 31, 2019.

4 unchanged sentences

This adverse development was mainly in the general liability and commercial auto lines of business.

The foregoing reconciliation shows that $ 69.0 million of adverse development was experienced in 2019 on the reserve for losses and loss adjustment expenses held at December 31, 2018.

This adverse reserve development included $ 51.2 million of adverse development in the Excess and Surplus Lines segment including $ 57.4 million of adverse development in the commercial auto line of business that was primarily related to the 2016 and 2017 accident years with Rasier.

The adverse development for commercial auto was partially offset by $ 6.2 million of favorable development in other Excess and Surplus Lines underwriting divisions.

The Company also experienced $ 5.3 million of favorable development on prior accident years in the Specialty Admitted Insurance segment, as losses on our workers’ compensation business written prior to 2018 continued to develop more favorably than we had anticipated.

The Casualty Reinsurance segment experienced $ 23.1 million of adverse development on prior accident years primarily in accident years 2011 through 2016.

This adverse development was mainly in the general liability and commercial auto lines of business.

Loss Portfolio Transfers

Loss portfolio transfers are a form of reinsurance utilized by the Company to transfer losses and loss adjustment expenses and associated risk of adverse development on covered subject business, as defined in the respective agreements, to an assuming reinsurer in exchange for a reinsurance premium.

Loss portfolio transfers can bring economic finality on the subject risks when they no longer meet the Company's appetite or are no longer aligned with the Company's risk management guidelines.

Commercial Auto Loss Portfolio Transfer

On September 27, 2021, James River Insurance Company and James River Casualty Company (together, “James River”) entered into a loss portfolio transfer transaction (the “Commercial Auto LPT”) with Aleka Insurance, Inc.

(“Aleka”), a captive insurance company affiliate of Rasier LLC, to reinsure substantially all of the Excess and Surplus Lines segment's legacy portfolio of commercial auto policies previously issued to Rasier LLC and its affiliates (collectively, “Rasier”) for which James River is not otherwise indemnified by Rasier.

Under the terms of the transaction, effective as of July 1, 2021, James River ceded to Aleka approximately $ 345.1 million of commercial auto liabilities relating to Rasier policies written in the years 2013-2019, which amount constituted the reinsurance premium.

The reinsurance coverage is structured to be fully collateralized, is not subject to an aggregate limit, and is subject to certain exclusions.

A pre-tax loss of $ 29.6 million was recognized as adverse loss and loss adjustment reserve development in the Excess and Surplus Lines segment for the third quarter of 2021 associated with the loss portfolio transfer.

Casualty Re Loss Portfolio Transfer

On February 23, 2022, JRG Re entered into a loss portfolio transfer retrocession agreement (the “Casualty Re LPT”) with Fortitude Reinsurance Company Ltd.

(“FRL”) under which FRL reinsures the majority of the reserves in the Company’s Casualty Reinsurance segment.

Under the terms of the transaction, which closed on March 31, 2022 (the “Retrocession Closing Date”), JRG Re (a) ceded to FRL all existing and future claims for losses arising under certain casualty reinsurance agreements with underlying insurance companies with treaty inception dates ranging from 2011 to 2020 (the “Subject Business”), in each case net of third-party reinsurance and other recoveries, up to an aggregate limit of $ 400.0 million;

(b) continues to manage and retain the benefit of other third-party reinsurance on the Subject Business;

(c) paid FRL a reinsurance premium of $ 335.0 million, $ 310.0 million of which JRG Re credited to a notional funds withheld account (the “Funds Withheld Account”) and $ 25.0 million of which was paid in cash to FRL;

and (d) pays FRL a 2 % per annum crediting rate on the Funds Withheld

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Account balance on a quarterly basis.

The total premium, initial Funds Withheld Account credit, and aggregate limit was adjusted for claims paid from October 1, 2021 to the Retrocession Closing Date.

The Casualty Reinsurance segment incurred $ 6.8 million of net adverse reserve development in the three months ended March 31, 2022 associated with the Casualty Re LPT.

Retroactive Reinsurance Accounting

The Company periodically reevaluates the remaining reserves subject to the Commercial Auto LPT and the Casualty Re LPT (the “Loss Portfolio Transfers”), and when recognized adverse prior year development on the subject business causes the cumulative amounts ceded under a loss portfolio transfer to exceed the consideration paid, the loss portfolio transfer moves into a gain position subject to retroactive reinsurance accounting under GAAP.

Gains are deferred under retroactive reinsurance accounting and recognized in earnings in proportion to actual paid recoveries under the loss portfolio transfer using the recovery method.

While the deferral of gains can introduce volatility in our results in the short-term, over the life of the contract, we would expect no economic impact to the Company as long as any additional losses are within the limit of the loss portfolio transfer and the counterparty performs under the contract.

The impact of retroactive reinsurance accounting is not indicative of our current and ongoing operations.

For the year ended December 31, 2022, due to adverse paid loss trends on the legacy Rasier business, the Company recognized adverse prior year development of $ 46.7 million on the reserves subject to the Commercial Auto LPT, resulting in a corresponding additional amount ceded under the Commercial Auto LPT.

As a result, the cumulative amounts ceded under the Commercial Auto LPT exceed the consideration paid, moving the Commercial Auto LPT into a gain position.

Similarly, due to adverse paid and reported loss trends on the business subject to the Casualty Re LPT, the Company ceded an additional $ 6.1 million of losses recoverable under the Casualty Re LPT for the year ended December 31, 2022, moving the Casualty Re LPT also into a gain position and, accordingly, the Company has applied retroactive reinsurance accounting to both loss portfolio transfers.

Retroactive reinsurance benefits totaling $ 32.7 million ($ 31.0 million for the Commercial Auto LPT and $ 1.7 million for the Casualty Re LPT) were recorded in losses and loss adjustment expenses on the Consolidated Statements of Income (Loss) and Comprehensive (Loss) Income for the year ended December 31, 2022 using the recovery method.

As of December 31, 2022, the cumulative amounts ceded under the Loss Portfolio Transfers was $ 732.9 million ($ 391.8 million under the Commercial Auto LPT and $ 341.1 million under the Casualty Re LPT).

At December 31, 2021, $ 345.1 million was ceded under the Commercial Auto LPT.

The total unrecognized deferred retroactive reinsurance gain of $ 20.1 million ($ 15.7 million related to the Commercial Auto LPT and $ 4.4 million related to the Casualty Re LPT) at December 31, 2022 under the Loss Portfolio Transfers is separately presented on the Company's Consolidated Balance Sheets.

The Company has $ 58.9 million of aggregate limit remaining under the Casualty Re LPT at December 31, 2022.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

The following tables present incurred and paid losses and loss adjustment expenses, net of reinsurance as of December 31, 2022 for:

15 unchanged sentences

Cumulative paid losses and loss adjustment expenses, net of reinsurance (in thousands)

James River Group Holdings, LTD.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2021, 2020, and 2019

Accident Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

11 unchanged sentences

Total outstanding losses and loss adjustment expenses, net of reinsurance $ 907,715

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Excess and Surplus Lines — Commercial Auto

Incurred losses and adjustment expenses, net of reinsurance (in thousands)

Incurred losses and loss adjustment expenses, net of reinsurance (in thousands)

Accident Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

7 unchanged sentences

2020 19,133 10,899 12,324

2021 21,154 16,565

Total $ 1,382,027

9 unchanged sentences

2020 628 2,854 7,304

2021 2,810 4,313

Total $ 1,190,109

34 unchanged sentences

Total outstanding losses and loss adjustment expenses, net of reinsurance $ 22,432

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Specialty Admitted — Fronting and Programs

9 unchanged sentences

2020 25,433 28,131 31,555

2021 39,999 44,857

Total $ 212,487

James River Group Holdings, LTD.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2021, 2020, and 2019

Cumulative paid losses and loss adjustment expenses, net of reinsurance (in thousands)

8 unchanged sentences

2020 5,375 15,678 20,903

2021 8,347 18,106

Total $ 122,705

2 unchanged sentences

Total outstanding losses and loss adjustment expenses, net of reinsurance $ 90,749

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Casualty Reinsurance

11 unchanged sentences

Total $ 1,286,263

James River Group Holdings, LTD.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2021, 2020, and 2019

Cumulative paid losses and loss adjustment expenses, net of reinsurance (in thousands)

11 unchanged sentences

All outstanding losses and loss adjustment expenses prior to 2013, net of reinsurance $ 9,431

Total outstanding losses and loss adjustment expenses, net of reinsurance before Casualty Re LPT $ 412,162

Reinsurance recoverable for Casualty Re LPT 244,657

Total outstanding losses and loss adjustment expenses, net of reinsurance $ 167,505

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

The reconciliation of the net incurred and paid claims development tables to the reserve for losses and loss adjustment expenses in the consolidated balance sheet at December 31, 2022 is as follows (in thousands):

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The claim counts include all claims reported, even if the Company does not establish a liability for the claim (i.e.

reserve for loss and loss adjustment expenses).

reserve for losses and loss adjustment expenses).

The Casualty Reinsurance segment typically assumes written premium under quota share arrangements.

1 unchanged sentence

In addition, multiple claims are often aggregated by the ceding company before being reported to the Company.

We do not use claim frequency information in the Casualty Reinsurance segment in the determination of loss

We do not use claim frequency information in the Casualty Reinsurance segment in the determination of loss reserves or for other internal purposes.

Based on these considerations, the Company does not believe providing claims frequency information is practicable as it relates to the Casualty Reinsurance segment.

The table below provides information on IBNR liabilities and claims frequency for:

(1) the Excess and Surplus Lines segment split between commercial auto and all non commercial auto, and (2) the Specialty Admitted Insurance segment split between individual risk workers’ compensation and fronting and programs:

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

reserves or for other internal purposes.

Based on these considerations, the Company does not believe providing claims frequency information is practicable as it relates to the Casualty Reinsurance segment.

The table below provides information on IBNR liabilities and claims frequency for:

Excess and Surplus Lines — Excluding Commercial Auto

15 unchanged sentences

Accident Year Incurred Losses

Expenses IBNR Cumulative # of

Expenses IBNR before Rasier LPT IBNR net of Rasier LPT Cumulative # of

Reported Claims

9 unchanged sentences

2021 16,565 7,434 7,434 771

James River Group Holdings, LTD.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2021, 2020, and 2019

2022 26,126 22,093 22,093 427

Specialty Admitted - Individual Risk Workers’ Compensation

13 unchanged sentences

2022 14,507 2,709 997

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Specialty Admitted — Fronting and Programs

12 unchanged sentences

2021 44,857 15,991 10,049

2022 47,262 26,836 7,540

The table below provides information on IBNR liabilities for the Casualty Reinsurance segment:

Accident Year Incurred Losses

Expenses IBNR

Expenses IBNR before Casualty Re LPT IBNR Net of Casualty Re LPT

($ in thousands)

11 unchanged sentences

In addition, management does not believe that the Company is exposed to environmental liability claims other than those which it has specifically underwritten and priced as an environmental exposure.

James River Group Holdings, LTD.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2021, 2020, and 2019

The Company remains liable to policyholders if its reinsurers are unable to meet their contractual obligations under applicable reinsurance agreements.

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All material reinsurance recoverables are from companies with A.M.

Best Company ratings of “A-” (Excellent) or better, or are collateralized by the reinsurer for our benefit through letters of credit or trust agreements, or represent recoverables from a state residual market for automobile insurance.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Company ratings of “A-” (Excellent) or better, or are collateralized by the reinsurer for our benefit through letters of credit or trust agreements, or represent recoverables from a state residual market for automobile insurance.

At December 31, 2022, reinsurance recoverables on unpaid losses from the Company’s three largest reinsurers were $ 340.4 million, $ 244.7 million, and $ 132.0 million, representing 47.2 % of the total balance.

At December 31, 2021, prepaid reinsurance premiums ceded to three reinsurers totaled $ 80.7 million, $ 43.2 million, and $ 19.8 million, representing 49.3 % of the total balance.

At December 31, 2022, prepaid reinsurance premiums ceded to the three reinsurers with the largest amount of prepaid reinsurance premiums totaled $ 66.1 million, $ 36.7 million, and $ 16.9 million, representing 43.7 % of the total balance.

Premiums written, premiums earned, and losses and loss adjustment expenses incurred are summarized as follows:

22 unchanged sentences

At December 31, 2022, the Company had $ 44.5 million of letters of credit issued under the secured facility.

James River Group Holdings, LTD.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2021, 2020, and 2019

• A $ 212.5 million unsecured revolving facility to meet the working capital needs of the Company.

8 unchanged sentences

A subsidiary of the Bank Holding Company is one of the lenders for the 2013 Facility, with a $ 36.0 million commitment allocation on the total $ 315.0 million 2013 Facility.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

The 2013 Facility contains certain financial and other covenants (including minimum net worth, maximum ratio of total adjusted debt outstanding to total capitalization, and financial strength ratings) with which the Company was in compliance at December 31, 2022.

1 unchanged sentence

The loans and letters of credit made or issued under the revolving line of credit may be used to finance the Borrowers’ general corporate purposes.

The 2017 Facility has been amended from time to time since its inception in 2017.

On November 8, 2019, the Company entered into a First Amendment to Credit Agreement which, among other things, lowered the applicable interest rate and modified certain negative covenants to be less restrictive.

3 unchanged sentences

During 2020, we borrowed an additional $ 51.5 million in unsecured loans to support our growth and for general corporate purposes.

In order to secure borrowings and letters of credit made or issued under the secured portion of the revolving line of credit, JRG Re entered into a pledge and security agreement on August 2, 2017 with the lender, pursuant to which JRG Re will pledge certain investment securities.

The Company repaid $ 40.0 million of loans in 2022.

In order to secure borrowings and letters of credit made or issued under the secured portion of the 2017 Facility, JRG Re entered into a pledge and security agreement on August 2, 2017 with the lender, pursuant to which JRG Re will pledge certain investment securities.

In the event the Company elects to pledge investment securities as collateral for the secured portion of the revolving credit facility, the Company will enter into a similar pledge and security agreement.

The lender under the credit agreement and its affiliate is a joint bookrunner and joint lead arranger under the Company’s Second Amended and Restated Credit Agreement dated as of November 8, 2019, as amended, and its affiliate was also an underwriter in the December 2014 initial public offering of the Company’s common shares.

The 2017 Facility contains certain financial and other covenants which we are in compliance with at December 31, 2021.

The lender under the 2017 Facility and its affiliate is a joint bookrunner and joint lead arranger under the Company’s 2013 Facility, and its affiliate was also an underwriter in the December 2014 initial public offering of the Company’s common shares and a joint lead book-running manager in the Company’s May 2021 public offering of the Company’s common shares.

The 2017 Facility contains certain financial and other covenants with which the Company was in compliance at December 31, 2022.

On May 26, 2004, James River Group issued $ 15.0 million of unsecured, floating rate senior debentures (the “Senior Debt”), due April 29, 2034 unless accelerated earlier, through an indenture.

5 unchanged sentences

• issue, sell, transfer or otherwise dispose of any shares of, securities convertible into, or warrants, rights or options to subscribe for or purchase shares of, capital stock of any subsidiary.

The terms of the Senior Debt contain certain covenants, with which we are in compliance at December 31, 2021, and which, among other things, restrict our ability to assume senior indebtedness secured by our U.S.

The terms of the Senior Debt contain certain covenants, with which the Company was in compliance at December 31, 2022, and which, among other things, restrict our ability to assume senior indebtedness secured by our U.S.

holding company's common stock or its subsidiaries' capital stock or to issue shares of its subsidiaries' capital stock.

James River Group Holdings, LTD.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2021, 2020, and 2019

Interest payable is included in “accrued expenses” in the accompanying consolidated balance sheets.

6 unchanged sentences

collectively, the “Indentures”).

The Junior Subordinated Debt is the sole asset of each Trust, and the Trust Preferred Securities are the sole liabilities of each Trust.

The Junior Subordinated Debt is the sole asset of each Trust, and the Trust Preferred Securities

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

are the sole liabilities of each Trust.

The Company purchased all of the outstanding common stock of the Trusts, and the investment in the Trusts is included in “other assets” in the accompanying consolidated balance sheets.

30 unchanged sentences

Interest payable is included in “accrued expenses” on the accompanying consolidated balance sheets.

Capital Stock

The Company’s authorized share capital consists of 200,000,000 common shares, par value $ 0.0002 per share ( 37,373,066 shares issued and outstanding at December 31, 2021) and 20,000,000 undesignated preferred shares, par value $ 0.00125 per share ( no shares issued or outstanding at December 31, 2021).

On May 10, 2021, the Company closed the offering and public sale (the “Offering”) of an aggregate of 6,497,500 of the Company’s common shares at a public offering price of $ 31.00 per share.

The Company received net proceeds (before expenses) from the Offering of $ 192.1 million, which were used for general corporate purposes.

The common shares were offered and sold pursuant to an underwriting agreement entered into by the Company, Barclays Capital, Inc., and Keefe, Bruyette & Woods, Inc., as representatives of the several underwriters named therein.

Series A Preferred Shares

On February 24, 2022, we entered into an Investment Agreement with GPC Partners Investments (Thames) LP (“GPC Partners”), an affiliate of Gallatin Point Capital LLC, relating to the issuance and sale of 150,000 7 % Series A Perpetual Cumulative Convertible Preferred Shares, par value $ 0.00125 per share (the “Series A Preferred Shares”), for an aggregate purchase price of $ 150.0 million, or $ 1,000 per share, in a private placement.

The transaction closed on March 1, 2022 (the “Series A Closing Date”).

The Series A Preferred Shares rank senior to our common shares with respect to dividend rights and rights on the distribution of assets on any liquidation, dissolution or winding up of the affairs of the Company, upon which the holders of Series A Preferred Shares would receive the greater of the $ 1,000 liquidation preference per share (the “Liquidation Preference”) plus accrued and unpaid dividends, or the amount they would have received if they had converted all of their Series A Preferred Shares to common shares immediately before such liquidation, dissolution or winding up.

Holders of the Series A Preferred Shares are entitled to a dividend at the initial rate of 7 % of the Liquidation Preference per annum, paid in cash, in-kind in common shares or in Series A Preferred Shares, at the Company's election.

On the five-year anniversary of the Series A Closing Date, and each five-year anniversary thereafter, the dividend rate will reset to a rate equal to the five-year U.S.

treasury rate plus 5.2 %.

Dividends accrue and are payable quarterly.

During 2022, cash dividends of $ 8.8 million were declared, of which $ 2.6 million was payable at December 31, 2022.

The Series A Preferred Shares are convertible at the option of the holders thereof at any time into common shares at an initial conversion price of $ 26.5950 , making the Series A Preferred Shares initially convertible into 5,640,158 common shares.

The conversion price is subject to customary anti-dilution adjustments, including cash dividends on the common shares above

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

The Company also issued 226,305 common shares in 2021 related to outstanding equity incentive plan awards.

Of the new shares issued, 93,446 were related to employee stock option exercises and 132,859 were related to vesting of restricted share units (“RSUs”).

As a result of the Offering and the issuances related to equity incentive plan awards, the total common shares outstanding increased from 30,649,261 at December 31, 2020 to 37,373,066 at December 31, 2021.

In 2020, the Company issued 224,870 shares related to outstanding equity incentive plan awards, increasing the number of common shares outstanding from 30,424,391 at December 31, 2019 to 30,649,261 at December 31, 2020.

Of the new shares issued, 113,346 were related to employee stock option exercises and 111,524 were related to vesting of restricted share units (“RSUs”).

The Company has 4,321,150 common shares reserved for future issuance upon exercise or vesting of equity awards, as applicable.

The Board of Directors declared the following cash dividends in 2021, 2020, and 2019:

specified levels, as well as certain adjustments in case of adverse reserve development.

None of the triggers that would result in adjustments to the conversion price have been met at December 31, 2022.

The Certificate of Designations setting forth the terms of the Series A Preferred Shares limits our ability to pay dividends to our common shareholders.

If we pay cash dividends of more than $ 0.05 per common share per quarter, without the consent of at least the majority of the Series A Preferred Shares then outstanding, we will be required to reduce the conversion price of the Series A Preferred Shares.

Additionally, the payment of cash dividends in excess of $ 0.10 per common share per quarter is not permitted if the dividends on the Series A Preferred Shares for that quarter are not paid in cash, unless the Company’s U.S.-based insurance subsidiaries and direct Bermuda-based insurance subsidiary satisfy certain capital requirements.

Share dividends payable on the common shares to our shareholders also trigger a reduction of the conversion price applicable to the Series A Preferred Shares.

At any time on or after the two year anniversary of the Series A Closing Date, if the volume-weighted average price (“VWAP”) per Common Share is greater than 130 % of the then-applicable conversion price for at least twenty (20) consecutive trading days, the Company will be able to elect to convert (a “Mandatory Conversion”) all of the outstanding Series A Preferred Shares into common shares.

In the case of a Mandatory Conversion, each Series A Preferred Share then outstanding will be converted into (i) the number of common shares equal to the quotient of (A) the sum of the Liquidation Preference and the accrued and unpaid dividends with respect to such Series A Preferred Share to be converted divided by (B) the conversion price of such share in effect as of the date of the Mandatory Conversion plus (ii) cash in lieu of fractional shares.

Upon any Mandatory Conversion on or before the five-year anniversary of the Series A Closing Date, all dividends that would have accrued from the date of the Mandatory Conversion to the later of the five-year anniversary of the Series A Closing Date or the last day of the eighth quarter following the date of the Mandatory Conversion, the last eight quarters of which will be discounted to present value using a discount rate of 3.5 % per annum, and will be immediately payable in common shares, valued at the average of the daily VWAP of the Company’s common shares during the five (5) trading days immediately preceding the Mandatory Conversion.

The holders of the Series A Preferred Shares may require us to repurchase their shares upon the occurrence of certain change of control events.

Upon the occurrence of a Fundamental Change (as defined in the Certificate of Designations designating the Series A Preferred Shares), each holder of outstanding Series A Preferred Shares will be permitted to, at its election, (i) effective as of immediately prior to the Fundamental Change, convert all or a portion of its Series A Preferred Shares into common shares, or (ii) require the Company to repurchase any or all of such holder’s Series A Preferred Shares at a purchase price per Series A Preferred Share equal to the Liquidation Preference of such Series A Preferred Share plus accrued and unpaid dividends.

The repurchase price will be payable in cash.

Because the Company may be required to repurchase all or a portion of the Series A Preferred Shares at the option of the holder upon the occurrence of certain change of control events, the Series A Preferred Shares have been classified as mezzanine equity in the Company's consolidated balance sheets and are recognized at fair value of $ 150.0 million (the proceeds on the date of issuance) less issuance costs of $ 5.1 million, resulting in a carrying value of $ 144.9 million.

Under the terms of the Investment Agreement, GPC Partners has the right to designate one member of the Board (the “Series A Designee”).

GPC Partners has designated Matthew Botein as the Series A Designee and, accordingly, the Board approved the appointment of Mr.

Botein to serve as a Class I director with a term expiring at the 2024 annual meeting of the Company’s shareholders.

Shareholders' Equity

The Company has 200,000,000 common shares authorized with $ 0.0002 par value per share.

The following table presents a rollforward of changes in common shares issued and outstanding.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Year Ended December 31,

Issued and outstanding common shares, beginning of year 37,373,066 30,649,261

Issuance of common shares — 6,497,500

Exercise of stock options — 93,446

Vesting of RSU awards 97,171 132,859

Issued and outstanding common shares, end of year 37,470,237 37,373,066

On May 10, 2021, the Company closed the offering and public sale (the “Offering”) of an aggregate of 6,497,500 of the Company’s common shares at a public offering price of $ 31.00 per share.

The Company received net proceeds (before expenses) from the Offering of $ 192.1 million, which were used for general corporate purposes.

The Company has 5,132,650 common shares reserved for future issuance upon exercise or vesting of equity awards, as applicable, and 5,640,158 common shares reserved for issuance upon conversion of the Series A Preferred Shares.

The Board of Directors declared the following cash dividends on common shares in 2022, 2021, and 2020:

Declaration Dividend per

14 unchanged sentences

July 28, 2020 $ 0.30 September 14, 2020 September 30, 2020 $ 9,292

November 5, 2019 $ 0.30 December 16, 2019 December 31, 2019 $ 9,229

October 27, 2020 $ 0.30 December 14, 2020 December 31, 2020 $ 9,305

Total $ 1.20 $ 37,137

6 unchanged sentences

There are no options outstanding under the Legacy Plan as of December 31, 2022 and no additional awards may be granted.

Employees are eligible to receive non-qualified stock options, incentive stock options, share appreciation rights, performance shares, restricted shares, RSUs, and other awards under the 2014 LTIP.

The maximum number of shares available for issuance under the 2014 LTIP is 4,171,150 , and at December 31, 2021, 1,326,456 shares are available for grant.

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

Employees are eligible to receive non-qualified stock options, incentive stock options, share appreciation rights, performance shares, restricted shares, RSUs, and other awards under the 2014 LTIP.

The 2014 LTIP was amended on October 25, 2022, increasing the number of shares available for issuance under the 2014 LTIP by 811,500 shares.

Following the amendment, the maximum number of shares available for issuance under the 2014 LTIP is 4,982,650 , and at December 31, 2022, 1,629,298 shares are available for grant.

On July 26, 2022, the Board of Directors of the Company approved a new long-term incentive plan (the “LTI Plan”) under the 2014 LTIP.

The LTI Plan is designed to align compensation of designated senior officers of the Company with Company performance and shareholder interests over the long-term.

Awards under the LTI Plan will be made in the form of performance restricted share units (a “PRSU”) and service based restricted share units (RSUs), with initial awards intended to be made in February 2023.

Each PRSU will represent a contingent right to receive one Company common share based upon the level of achievement of certain performance metrics during the performance period, with payout for achievement of threshold, target and maximum performance levels to be set at 50 %, 100 % and 200 % of the target number of PRSUs, respectively.

The initial PRSU awards are intended to have a performance period of January 1, 2023 through December 31, 2025.

Non-employee directors of the Company are eligible to receive non-qualified stock options, share appreciation rights, performance shares, restricted shares, RSUs, and other awards under the 2014 Director Plan.

At the 2019 Annual General Meeting of Shareholders of the Company held on April 30, 2019, the Company's shareholders approved an amendment to the 2014 Director Plan.

The Board of Directors of the Company had previously approved the amendment.

The amendment increased the number of the Company's common shares authorized for issuance under the 2014 Director Plan by 100,000 shares.

The maximum number of shares available for issuance under the 2014 Director Plan is 150,000 , and at December 31, 2022, 82,586 shares are available for grant.

12 unchanged sentences

Exercisable, end of year 287,974 $ 35.26 287,974 $ 35.26 463,324 $ 32.25

All of the outstanding options vested over three years and have a contractual life of seven years from the original date of grant.

All of the outstanding options are fully vested (vesting period of three years from date of grant) and have a contractual life of seven years from the original date of grant.

All of the outstanding options have an exercise price equal to the fair value of the underlying shares at the date of grant.

The intrinsic value of each option is determined based on the difference between the fair value of the underlying share and the exercise price of the underlying option.

The total intrinsic value of options exercised during 2021, 2020 and 2019 was $ 1.3 million, $ 3.8 million and $ 8.2 million, respectively.

The aggregate intrinsic value of options outstanding at December 31, 2021, 2020 and 2019 was $ 0 , $ 7.8 million and $ 7.1 million, respectively.

The aggregate intrinsic value of options exercisable at December 31, 2021, 2020 and 2019 was $ 0 , $ 7.8 million and $ 7.1 million, respectively.

The total intrinsic value of options exercised during 2022, 2021 and 2020 was $ 0 , $ 1.3 million and $ 3.8 million, respectively.

The aggregate intrinsic value of options outstanding at December 31, 2022, 2021 and 2020 was $ 0 , $ 0 and $ 7.8 million, respectively.

The aggregate intrinsic value of options exercisable at December 31, 2022, 2021 and 2020 was $ 0 , $ 0 and $ 7.8 million, respectively.

The fair value used for calculating intrinsic values was $ 20.91 , $ 28.81 and $ 49.15 at December 31, 2022, 2021 and 2020, respectively.

17 unchanged sentences

Unvested, end of year 665,458 $ 25.98 292,135 $ 45.89 399,856 $ 43.59

The vesting period of RSUs granted to employees have ranged from one to five years and vest ratably over the respective vesting period, with the majority vesting in three years .

All RSUs granted to date to non-employee directors had a one year vesting period.

Outstanding RSUs granted to employees generally vest ratably over a three year vesting period.

RSUs granted to non-employee directors have a one year vesting period.

The total fair value of shares vested in 2022, 2021 and 2020 was $ 3.8 million, $ 9.1 million and $ 7.2 million, respectively.

1 unchanged sentence

The dividend equivalents are settled in cash at the same time that the underlying RSUs vest and are subject to the same risk of forfeiture as the underlying shares.

The fair value of the RSUs granted is based on the market price of the underlying shares.

The fair value of the RSUs granted is based on the market price of the underlying shares at the date of grant.

Compensation Expense

6 unchanged sentences

tax benefit on share based compensation expense $ 1,526 $ 1,206 $ 1,001

As of December 31, 2021, the Company had $ 8.7 million of unrecognized share based compensation expense expected to be charged to earnings over a weighted-average period of 1.8 years.

At December 31, 2022, the Company had $ 11.2 million of unrecognized share based compensation expense expected to be charged to earnings over a weighted-average period of 1.8 years.

Under current Bermuda law, James River Group Holdings, Ltd.

23 unchanged sentences

provision and adjusted out of our deferred tax liability.

The regulations were finalized in 2019, and the remaining reserve adjustment at December 31, 2019 based on these final regulations is $ 5.7 million to be recognized over the next six years at $ 950,000 per year.

The regulations were finalized in 2019, and the remaining reserve adjustment at December 31, 2019 based on these final regulations was $ 5.7 million to be recognized over the six years 2020 - 2025 at $ 950,000 per year.

The expected income tax provision computed from pre-tax income at the weighted-average tax rate has been calculated as the sum of the pre-tax income in each jurisdiction multiplied by that jurisdiction’s applicable Federal statutory tax rate.

Federal statutory tax rates of 0% and 21% have been used in 2022, 2021 and 2020 for Bermuda and the U.S., respectively.

(loss) income before Federal income taxes was $( 89.3 ) million, $ 25.1 million, and $ 70.7 million for the years ending December 31, 2021, 2020, and 2019, respectively.

income (loss) before Federal income taxes was $ 85.9 million, $( 89.3 ) million, and $ 25.1 million for the years ending December 31, 2022, 2021, and 2020, respectively.

The Tax Act base-erosion and anti-abuse tax (“BEAT”) provisions impose a minimum tax on applicable taxpayers that make certain payments to related foreign persons.

10 unchanged sentences

(in thousands)

Federal income tax (benefit) expense at applicable statutory rates $ ( 18,750 ) $ 5,272 $ 14,843

Federal income tax expense (benefit) at applicable statutory rates $ 18,041 $ ( 18,750 ) $ 5,272

Tax-exempt investment income ( 225 ) ( 278 ) ( 260 )

Dividends received deduction ( 315 ) ( 298 ) ( 283 )

Excess tax benefits on share based compensation ( 208 ) ( 679 ) ( 1,099 )

Excess tax expense (benefits) on share based compensation 530 ( 208 ) ( 679 )

Provision to return and amended tax returns 124 ( 3,945 ) —

1 unchanged sentence

Other 259 233 17

Federal income tax (benefit) expense $ ( 23,246 ) $ 6,910 $ 13,306

Federal income tax expense (benefit) $ 18,414 $ ( 23,246 ) $ 6,910

state income tax expense — 11 203

Total income tax (benefit) expense $ ( 23,235 ) $ 7,113 $ 13,528

Total income tax expense (benefit) $ 18,414 $ ( 23,235 ) $ 7,113

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

The significant components of net deferred tax assets (liabilities) at the corporate income tax rate of 21% for the years ended December 31, 2021 and 2020 are summarized as follows:

The significant components of net deferred tax assets at the corporate income tax rate of 21% for the years ended December 31, 2022 and 2021 are summarized as follows:

(in thousands)

5 unchanged sentences

Allowance for credit losses 2,549 2,516

Property and equipment 144 213

Net unrealized losses 24,066 —

Net operating loss carryforward — 15,221

8 unchanged sentences

Total deferred tax liabilities 20,883 31,340

Net deferred tax assets (liabilities) $ 26,430 $ ( 1,105 )

Net deferred tax assets $ 48,844 $ 26,430

Deferred income taxes have not been accrued with respect to certain undistributed earnings of foreign subsidiaries.

7 unchanged sentences

The carryforward period for non-insurance companies is unlimited but limited to 80% of the current year taxable income.

If all taxable income were classified as insurance income, the net operating loss would expire in 2041.

The Company had no reserve for future tax contingencies or liabilities (“unrecognized tax benefits”) at December 31, 2022 or 2021.

3 unchanged sentences

For the years ended December 31, 2022, 2021, and 2020, the Company paid $ 0 , $ 338,000 , and $ 468,000 , respectively, of federal excise taxes on its intercompany reinsurance transactions.

The Company also paid excise taxes of $ 1.5 million, $ 1.2 million, and $ 1.5 million for the years ended December 31, 2021, 2020, and 2019, respectively, on written premiums assumed from third-party insurers with respect to risks located in the U.S.

These excise taxes are reflected as “other operating expenses” in the Company’s consolidated income statements.

The Company also paid excise taxes of $ 842,000 , $ 1.5 million, and $ 1.2 million for the years ended December 31, 2022, 2021, and 2020, respectively, on written premiums assumed from third-party insurers with respect to risks located in the U.S.

These excise taxes are reflected as “other operating expenses” in the Company’s consolidated Statements of Income (Loss) and Comprehensive (Loss) Income.

James River Group Holdings, Ltd.

11 unchanged sentences

Total $ 195,557 $ 164,692 $ 165,498

Other expenses of $ 2.6 million for the year ended December 31, 2021 primarily consist of legal and other professional fees related to the Company’s May 2021 common share offering, certain legal and professional consulting fees related to various strategic initiatives, and employee severance costs.

Other expenses of $ 2.1 million and $ 1.1 million for the years ended December 31, 2020 and 2019, respectively, primarily consist of employee severance costs.

Other expenses of $ 6.0 million, $ 2.6 million, and $ 2.1 million for the years ended December 31, 2022, 2021, and 2020, respectively, primarily consist of certain nonoperating expenses including legal fees related to a purported class action lawsuit, legal and other professional fees related to the Company's May 2021 common share offering, legal and other professional fees and other expenses related to various strategic initiatives including loss portfolio transfers accounted for as retroactive reinsurance, and employee severance costs.

Employee Benefits

12 unchanged sentences

On September 22, 2021, the Court entered an order appointing Employees’ Retirement Fund of the City of Fort Worth and the City of Miami General Employees’ and Sanitation Employees’ Retirement Trust as co-lead plaintiffs (together, “Plaintiffs”).

Plaintiffs' consolidated amended complaint was filed on November 19, 2021 (the "Amended Complaint"), which asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of a putative class of persons and entities that purchased the Company's stock between February 22, 2019 and October 25, 2021.

The Amended Complaint alleges that Defendants failed to make appropriate disclosures concerning the adequacy of reserves for policies that covered Rasier LLC, a subsidiary of Uber Technologies, Inc., and seeks unspecified damages, costs, attorneys’ fees and such other relief as the court may deem proper.

The Defendants filed a motion to dismiss on January 18, 2022.

Plaintiffs' response to the motion to dismiss is due to be filed on March 4, 2022.

Plaintiffs’ consolidated amended complaint was filed on November 19, 2021 (the “First Amended Complaint”).

The Defendants filed a motion to dismiss the First Amended Complaint on January 18, 2022, Plaintiffs’ opposition thereto was filed on March 4, 2022, and the Defendants’ reply to the Plaintiffs’ opposition was filed on April 4, 2022.

On August 25, 2022, Plaintiffs filed a motion for leave to file a second amended class action complaint (the "Second Amended Complaint").

On September 8, 2022, the Defendants consented to the Plaintiffs’ motion to file the Second Amended Complaint, and filed a motion to dismiss the Second Amended Complaint on October 24, 2022 (the "Second MTD").

The Plaintiffs’ opposition to the Second MTD was filed on November 7, 2022, and the Defendant's reply to the Plaintiffs’ opposition was filed on November 14, 2022.

The First Amended Complaint and Second Amended Complaint assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of a putative class of persons and entities that purchased the Company's stock between February 22, 2019 and October 25, 2021, allege that Defendants failed to make appropriate disclosures concerning the adequacy of reserves for policies that covered Rasier LLC, a subsidiary of Uber Technologies, Inc., and seek unspecified damages, costs, attorneys’ fees and such other relief as the court may deem proper.

We believe that the Plaintiffs’ claims are without merit, and we intend to vigorously defend this lawsuit.

For a description of the potential future impacts of COVID-19 on the Company, see the “The global coronavirus outbreak could harm business and results of operations of the Company” risk factor in Part I—Item IA in this Annual Report.

1 unchanged sentence

JRG Re has established custodial accounts to secure these letters of credit.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Under a $ 30.0 million facility, $ 4.8 million of letters of credit were issued through December 31, 2022 which were secured by deposits of $ 5.6 million.

3 unchanged sentences

The total amount deposited in the trust accounts for the benefit of third-party reinsureds was $ 427.2 million at December 31, 2022.

James River Group Holdings, LTD.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2021, 2020, and 2019

Amounts Recoverable from an Indemnifying Party and Reinsurer on Legacy Commercial Auto Book

1 unchanged sentence

James River has indemnity agreements with Rasier (non-insurance entities) (collectively, the “Indemnity Agreements”) and is contractually entitled to reimbursement for the portion of the losses and loss adjustment expenses paid on behalf of Rasier under the Rasier Commercial Auto Policies and other expenses incurred by James River.

On September 27, 2021, James River entered into a loss portfolio transfer reinsurance agreement (the “LPT Agreement”) with Aleka to reinsure substantially all of the Rasier Commercial Auto Policies for which James River is not otherwise indemnified by Rasier under the Indemnity Agreements.

Under the terms of the LPT Agreement, effective as of July 1, 2021, James River ceded to Aleka approximately $ 345.1 million of commercial auto liabilities relating to Rasier Commercial Auto Policies written in the years 2013-2019, which amount constituted the reinsurance premium.

Each of Rasier and Aleka are required to post collateral under the Indemnity Agreements and the LPT Agreement, respectively:

• Pursuant to the Indemnity Agreements, Rasier is required to post collateral for the amounts that are recoverable or may be recoverable under the indemnity agreements, including, among other things, case loss and loss adjustment expense reserves, IBNR loss and loss adjustment expense reserves, extra contractual obligations and excess policy limits liabilities.

On September 27, 2021, James River entered into the Commercial Auto LPT with Aleka to reinsure substantially all of the Rasier Commercial Auto Policies for which James River is not otherwise indemnified by Rasier under the Indemnity Agreements.

Under the terms of the Commercial Auto LPT, effective as of July 1, 2021, James River ceded to Aleka approximately $ 345.1 million of commercial auto liabilities relating to Rasier Commercial Auto Policies written in the years 2013-2019, which amount constituted the reinsurance premium.

For the year ended December 31, 2022, due to adverse paid loss trends on the legacy Rasier business, the Company recognized adverse prior year development of $ 46.7 million on the reserves subject to the Commercial Auto LPT, bringing the cumulative amount ceded under the Commercial Auto LPT to $ 391.8 million at December 31, 2022.

Each of Rasier and Aleka are required to post collateral under the Indemnity Agreements and the Commercial Auto LPT:

• Pursuant to the Indemnity Agreements, Rasier is required to post collateral equal to 102 % of James River's estimate of the amounts that are recoverable or may be recoverable under the Indemnity Agreements, including, among other things, case loss and loss adjustment expense reserves, IBNR loss and loss adjustment expense reserves, extra contractual obligations and excess policy limits liabilities.

The collateral is provided through a collateral trust arrangement (the “Indemnity Trust”) in favor of James River by Aleka.

In connection with the execution of the LPT Agreement, James River returned $ 691.3 million to the Indemnity Trust, representing the remaining balance of the amount withdrawn in October 2019, as was permitted under the indemnification agreements with Rasier and the associated trust agreement.

In connection with the execution of the Commercial Auto LPT, James River returned $ 691.3 million to the Indemnity Trust, representing the remaining balance of the amount withdrawn in October 2019, as was permitted under the indemnification agreements with Rasier and the associated trust agreement.

At December 31, 2022, the balance in the Indemnity Trust was $ 267.0 million, and, together with the balance of the Loss Fund Trust (as defined below) attributable to the Indemnity Agreements as described below, the total balance of collateral securing Rasier’s obligations under the Indemnity Agreements was $ 336.2 million.

• Pursuant to the LPT Agreement, Aleka is required to post collateral equal to 102 % of James River's estimate of Aleka's obligations under the LPT Agreement, calculated in accordance with statutory accounting principles.

• Pursuant to the Commercial Auto LPT, Aleka is required to post collateral equal to 102 % of James River's estimate of Aleka's obligations under the Commercial Auto LPT, calculated in accordance with standard actuarial principles and based on reserves recorded in the Company's statutory financial statements.

The collateral is provided through a collateral trust arrangement (the “LPT Trust”) established in favor of James River by Aleka.

At December 31, 2021, the balance in the LPT Trust was $ 251.7 million, and, together with the balance of the Loss Fund Trust (as defined below) attributable to the LPT Agreement as described below, the total balance of collateral securing Aleka’s obligations under the LPT Agreement was $ 279.9 million.

At December 31, 2021, the total reinsurance recoverables under the LPT Agreement was $ 272.3 million (including $ 256.5 million of unpaid recoverables and $ 15.9 million of paid recoverables).

In connection with the execution of the LPT Agreement, James River and Aleka entered into an administrative services agreement (the “Administrative Services Agreement”) with a third party claims administrator (the “Administrator”) pursuant to which the Administrator handles the claims on the Rasier Commercial Auto Policies for the remaining life of those claims.

At December 31, 2022, the balance in the LPT Trust was $ 121.9 million, and, together with the balance of the Loss Fund Trust (as defined below) attributable to the Commercial Auto LPT as described below, the total balance of collateral securing Aleka’s obligations under the Commercial Auto LPT was $ 150.0 million.

At December 31, 2022, the total reinsurance recoverables under the Commercial Auto LPT was $ 145.2 million (including $ 132.0 million of unpaid recoverables and $ 13.2 million of paid recoverables).

In connection with the execution of the Commercial Auto LPT, James River and Aleka entered into an administrative services agreement (the “Administrative Services Agreement”) with a third party claims administrator (the “Administrator”) pursuant to which the Administrator handles the claims on the Rasier Commercial Auto Policies for the remaining life of those claims.

The claims paid by the Administrator are reimbursable by James River, and pursuant to the Administrative Services Agreement, James River established a loss fund trust account for the benefit of the Administrator (the “Loss Fund Trust”) to collateralize its claims payment reimbursement obligations.

James River funds the Loss Fund Trust using funds withdrawn from the Indemnity Trust, funds withdrawn from the LPT Trust, and its own funds, in each case in an amount equal to the pro rata portion of the required Loss Fund Trust balance attributable to the Indemnity Agreements, the LPT Agreement and James River’s existing third party reinsurance agreements, respectively.

At December 31, 2021, the balance in the Loss Fund Trust was $ 102.0 million, including $ 69.2 million representing collateral supporting Rasier’s obligations under the Indemnity Agreements and $ 28.2 million representing collateral supporting Aleka’s obligations under the LPT Agreement.

James River funds the Loss Fund Trust using funds withdrawn from the Indemnity Trust, funds withdrawn from the LPT Trust, and its own funds, in each case in an amount equal to the pro rata portion of the required Loss Fund Trust balance attributable to the Indemnity Agreements, the Commercial Auto LPT and James River’s existing third party reinsurance agreements, respectively.

At December 31, 2022, the balance in the Loss Fund Trust was $ 103.2 million, including $ 69.2 million representing collateral supporting Rasier’s obligations under the Indemnity Agreements and $ 28.2 million representing collateral supporting Aleka’s obligations under the Commercial Auto LPT.

Funds posted to the Loss Fund Trust are classified as restricted cash equivalents on the Company's balance sheet.

While the LPT Agreement brings economic finality to substantially all of the Rasier Commercial Auto Policies, the Company has credit exposure to Rasier and Aleka under the Indemnity Agreements and the LPT Agreement if the estimated losses and expenses of the Rasier Commercial Auto Policies grow at a faster pace than the growth in our collateral balances.

In addition, we have credit exposure if our estimates of future losses and loss adjustment expenses and other amounts recoverable under the Indemnity Agreements and the LPT Agreement, which are the basis for establishing the collateral balances, are lower than actual amounts paid or payable.

The amount of our credit exposure in any of these instances could be material.

To mitigate these risks, we closely and frequently monitor our exposure compared to our collateral held, and we request additional collateral when our analysis indicates that we have uncollateralized exposure.

While the Commercial Auto LPT brings economic finality to substantially all of the Rasier Commercial Auto Policies, the Company has credit exposure to Rasier and Aleka under the Indemnity Agreements and the Commercial Auto LPT if the

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

estimated losses and expenses of the Rasier Commercial Auto Policies grow at a faster pace than the growth in our collateral balances.

In addition, the Company has credit exposure if its estimates of future losses and loss adjustment expenses and other amounts recoverable under the Indemnity Agreements and the Commercial Auto LPT, which are the basis for establishing the collateral balances, are lower than actual amounts paid or payable.

The amount of credit exposure in any of these instances could be material.

To mitigate these risks, the Company closely and frequently monitors exposure compared to collateral held, and requests additional collateral in accordance with the terms of the Commercial Auto LPT and Indemnity Agreements when its analysis indicates that the Company has uncollateralized exposure.

Other Comprehensive (Loss) Income

13 unchanged sentences

Other comprehensive (loss) income $ ( 193,022 ) $ ( 51,921 ) $ 50,785

In addition to the net realized investment gains of $ 4.9 million, $ 1.0 million, and $ 1.1 million on available-for-sale fixed maturity securities for the years ended December 31, 2021, 2020, and 2019, the Company recognized net realized and unrealized investment gains (losses) in the respective years of $ 5.8 million, $( 15.4 ) million, and $( 10.1 ) million on its investments in bank loan participations and $ 4.8 million, $( 1.7 ) million, and $ 6.0 million on its investments in equity securities.

In addition to the net realized investment gains of $ 275,000 , $ 4.9 million, and $ 1.0 million on available-for-sale fixed maturity securities for the years ended December 31, 2022, 2021, and 2020, the Company recognized net realized and unrealized investment (losses) gains in the respective years of $( 17.0 ) million, $ 5.8 million, and $( 15.4 ) million on its investments in bank loan participations and $( 11.4 ) million, $ 4.8 million, and $( 1.7 ) million on its investments in equity securities.

Segment Information

1 unchanged sentence

The Excess and Surplus Lines segment primarily offers commercial excess and surplus lines liability and excess property insurance products.

The Specialty Admitted Insurance segment offers workers’ compensation insurance coverage as well as specialty admitted fronting and program business.

The Specialty Admitted Insurance segment offers specialty admitted fronting and program business and workers’ compensation insurance coverage.

The Casualty Reinsurance segment offers commercial liability and non-catastrophe property reinsurance to U.S.

insurance companies and to the Company’s U.S.-based insurance subsidiaries.

The Corporate and Other segment consists of certain management and treasury activities of James River Group, James River UK, and JRG Holdings as well as interest expense associated with senior debt and Junior Subordinated Debt, and investment income from investments classified as other invested assets.

The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.

Segment revenues for each reportable segment consist of net earned premiums, net investment income, and realized and unrealized (losses) gains on investments.

Segment profit (loss) for each reportable segment is measured by underwriting profit (loss), which is generally defined as net earned premiums less losses and loss adjustment expenses and other operating expenses of the operating segments.

Gross fee income of the Excess and Surplus Lines segment and Specialty Admitted Insurance segment is included in the respective segment’s underwriting (loss) profit.

Gross fee income of $ 4.5 million ($ 0.0 million from the Excess and Surplus Lines segment and $ 4.5 million from the Specialty Admitted Insurance segment), $ 3.4 million ($ 1.6 million from the Excess and Surplus Lines segment and $ 1.8 million from the Specialty Admitted Insurance segment) and $ 9.5 million ($ 9.1 million from the Excess and Surplus Lines segment and $ 421,000 from the Specialty Admitted Insurance segment) was included in other income and in underwriting (loss) profit for the years ended December 31, 2021, 2020 and 2019, respectively.

Segment profit (loss) is measured by underwriting profit (loss), which is generally defined as net earned premiums and gross fee income (in specific instances when the Company is not retaining insurance risk) in “other income” in the condensed consolidated statements of income (loss) and comprehensive (loss) income less loss and loss adjustment expenses on business not subject to retroactive reinsurance accounting for loss portfolio transfers (see Loss Portfolio Transfers in Note 7 - Reserve for Losses and Loss Adjustment Expenses ) and other operating expenses of the operating segments.

Gross fee income of the Excess and Surplus Lines segment and Specialty Admitted Insurance segment is included in the respective segment’s underwriting profit (loss).

Gross fee income of $ 3.8 million and $ 4.5 million from the Specialty Admitted Insurance segment for the years ended December 31, 2022 and 2021, respectively, and $ 3.4 million ($ 1.6 million from the Excess and Surplus Lines segment and $ 1.8 million from the Specialty Admitted Insurance segment) for the year ended December 31, 2020, was included in other income and in underwriting profit (loss).

Segment results are reported prior to the effects of the intercompany reinsurance agreements between the Company’s insurance and reinsurance subsidiaries.

16 unchanged sentences

Interest expense — — 3,706 13,872 17,578

Underwriting (loss) profit of operating segments ( 121,478 ) 9,667 ( 117,526 ) — ( 229,337 )

Underwriting profit (loss) of operating segments 83,051 4,234 ( 6,383 ) — 80,902

Segment goodwill 181,831 — — — 181,831

7 unchanged sentences

Interest expense — — — 8,922 8,922

Underwriting profit (loss) of operating segments 9,752 4,185 ( 18,364 ) — ( 4,427 )

Underwriting (loss) profit of operating segments ( 121,478 ) 9,667 ( 117,526 ) — ( 229,337 )

Segment goodwill 181,831 — — — 181,831

14 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

The following table reconciles the underwriting (loss) profit of operating segments by individual segment to income before income taxes:

The following table reconciles the underwriting profit (loss) of operating segments by individual segment to consolidated income (loss) before income taxes:

Year Ended December 31,

1 unchanged sentence

(in thousands)

Underwriting (loss) profit of the operating segments:

Underwriting profit (loss) of the operating segments:

Excess and Surplus Lines $ 83,051 $ ( 121,478 ) $ 9,752

1 unchanged sentence

Casualty Reinsurance ( 6,383 ) ( 117,526 ) ( 18,364 )

Total underwriting (loss) profit of operating segments ( 229,337 ) ( 4,427 ) 17,909

Total underwriting profit (loss) of operating segments 80,902 ( 229,337 ) ( 4,427 )

Other operating expenses of the Corporate and Other segment ( 31,260 ) ( 27,609 ) ( 29,418 )

Underwriting loss ( 256,946 ) ( 33,845 ) ( 9,755 )

Underwriting profit (loss) 49,642 ( 256,946 ) ( 33,845 )

Losses and loss adjustment expenses - retroactive reinsurance ( 20,091 ) — —

Net investment income 71,111 56,865 73,368

Net realized and unrealized gains (losses) on investments 15,564 ( 16,030 ) ( 2,919 )

Net realized and unrealized (losses) gains on investments ( 28,318 ) 15,564 ( 16,030 )

Other income 981 353 1,153

2 unchanged sentences

Amortization of intangible assets ( 363 ) ( 363 ) ( 538 )

(Loss) income before income taxes $ ( 196,034 ) $ 11,937 $ 51,867

Income (loss) before income taxes $ 49,387 $ ( 196,034 ) $ 11,937

The Company currently has 15 underwriting divisions, including 13 in the Excess and Surplus Lines segment, one in the Specialty Admitted Insurance segment, and one in the Casualty Reinsurance segment.

9 unchanged sentences

Energy 42,290 46,216 51,109

Life Sciences 35,935 35,163 24,462

Commercial Auto 37,974 34,630 30,029

Allied Health 35,192 26,918 26,713

Small Business 36,930 32,593 24,790

Allied Health 34,156 35,192 26,918

Life Sciences 32,277 35,935 35,163

Environmental 20,676 17,050 17,753

Professional Liability 8,104 6,881 6,441

Sports and Entertainment 13,934 9,442 6,118

Professional Liability 8,936 8,104 6,881

Medical Professionals 1,285 1,844 1,700

3 unchanged sentences

Total $ 1,496,580 $ 1,507,299 $ 1,257,000

The Company does business with three brokers that generated $ 239.1 million, $ 197.3 million and $ 132.5 million of gross written premiums for the Excess and Surplus Lines segment for the year ended December 31, 2021, representing 15.9 %, 13.1 %

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

and 8.8 % of consolidated gross written premiums and 28.7 %, 23.7 % and 15.9 % of the Excess and Surplus Lines segment’s gross written premiums, respectively.

The Company does business with three brokers that generated $ 289.7 million, $ 214.2 million and $ 139.4 million of gross written premiums for the Excess and Surplus Lines segment for the year ended December 31, 2022, representing 19.4 %, 14.3 % and 9.3 % of consolidated gross written premiums and 31.4 %, 23.3 % and 15.1 % of the Excess and Surplus Lines segment’s gross written premiums, respectively.

The Company has agency contracts with various branches within the aforementioned brokers.

2 unchanged sentences

The Specialty Admitted Insurance segment accepts applications for insurance from a variety of sources, including independent retail agents, program administrators and managing general agents (“MGAs”).

The Company does business with two agencies that generated $ 124.1 million (Atlas General Insurance Services) and $ 89.5 million of gross written premiums for the Specialty Admitted Insurance segment for the year ended December 31, 2021, representing 8.2 % and 5.9 % of the consolidated gross written premiums and 25.2 % and 18.2 % of the Specialty Admitted Insurance segment’s gross written premiums, respectively.

The Company does business with two agencies that generated $ 120.9 million and $ 110.9 million of gross written premiums for the Specialty Admitted Insurance segment for the year ended December 31, 2022, representing 8.1 % and 7.4 % of consolidated gross written premiums and 24.7 % and 22.6 % of the Specialty Admitted Insurance segment’s gross written premiums, respectively.

No other agency generated 10.0% or more of the gross written premiums for the Specialty Admitted Insurance segment for the year ended December 31, 2022.

20 unchanged sentences

The Company obtains an understanding of the methods, models and inputs used by the investment managers and independent pricing services, and controls are in place to validate that prices provided represent fair values.

The Company’s control process includes, but is not limited to, initial and ongoing evaluation of the methodologies used, a review of specific securities and an assessment for proper classification within the fair value hierarchy, and obtaining and reviewing internal control reports for our investment manager that obtains fair values from independent pricing services.

The Company’s control process includes, but is not limited to, initial and ongoing evaluation of the methodologies used, a review of specific securities and an assessment for proper classification within the fair value hierarchy, and obtaining and reviewing internal control reports for the investment manager that obtains fair values from independent pricing services.

James River Group Holdings, Ltd.

46 unchanged sentences

Short-term investments $ — $ 136,563 $ — $ 136,563

A reconciliation of the beginning and ending balances of available-for-sale fixed maturity securities, equity securities, and bank loan participations (following the Company's election of the fair value option in accounting for bank loan participations

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

effective January 1, 2020) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is shown below:

A reconciliation of the beginning and ending balances of available-for-sale fixed maturity securities, equity securities, and bank loan participations measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is shown below:

Year Ended December 31,

13 unchanged sentences

The Company held one equity security at December 31, 2022 for which the fair value was determined using significant unobservable inputs (Level 3).

The fair value of $ 17,000 for the equity security was obtained from our asset manager and was derived from an internal model.

The Company held one equity security at December 31, 2021 for which the fair value was determined using significant unobservable inputs (Level 3).

The fair value of $ 102,000 for the equity security was based on expected proceeds from its sale.

1 unchanged sentence

This security was exchanged for an equity security that is publicly traded and it was transferred from Level 3 to Level 1.

The Company held one bank loan participation and two equity securities at December 31, 2020 and one equity security at December 31, 2019 for which the fair value was determined using significant unobservable inputs (Level 3).

A market approach using prices in trades of comparable securities was utilized to determine a fair value of $ 980,000 at December 31, 2020 and $ 43,000 at December 31, 2019.

During 2019, one equity security was transferred from Level 1 to Level 3 as the security was no longer actively traded.

The Company was subsequently able to obtain a quoted price from a pricing vendor for the equity security and it was transferred from Level 3 to Level 2.

The Company held one bank loan participation and two equity securities at December 31, 2020 for which the fair value was determined using significant unobservable inputs (Level 3).

A market approach using prices in trades of comparable securities was utilized to determine a fair value of $ 980,000 at December 31, 2020.

During 2020, the Company was able to obtain a quoted price from a vendor for two bank loan participations and one equity security and transferred them to Level 2.

44 unchanged sentences

(in thousands)

Statutory net (loss) income $ ( 3,847 ) $ ( 710 ) $ 3,586

Statutory net income (loss) $ 42,565 $ ( 3,847 ) $ ( 710 )

Statutory capital and surplus 493,303 325,368 286,449

2 unchanged sentences

As of December 31, 2022, the insurance subsidiaries’ adjusted capital and surplus exceeds their authorized control level RBC.

The Company has two Bermuda-based insurance subsidiaries:

JRG Re, a Class 3B insurer and Carolina Re, a Class 3A insurer.

The Company has two Bermuda-based subsidiaries:

JRG Re, a Class 3B insurer and Carolina Re, a Class 3A insurer until its deregistration effective November 16, 2022.

Under the Bermuda Insurance Act 1978 and related regulations, an insurer must maintain minimum statutory capital and surplus at the greater of a minimum solvency margin (“MSM”) and the Enhanced Capital Requirement (“ECR”), which is the higher of the MSM and capital calculated by the Bermuda Solvency Capital Requirement (“BSCR”) model or an approved internal model.

The combined estimated Bermuda insurers minimum statutory solvency margin required at December 31, 2021 was approximately $ 167.1 million (2020:

The estimated Bermuda insurers minimum statutory solvency margin required at December 31, 2022 was approximately $ 38.6 million (2021:

$ 167.1 million).

Actual combined statutory capital and surplus at December 31, 2021 was $ 518.7 million (2020:

Actual statutory capital and surplus at December 31, 2022 was $ 375.4 million (2021:

$ 518.7 million).

The insurers had combined statutory net (loss) income of $( 141.5 ) million for 2021, $ 20.8 million for 2020, and $ 53.2 million for 2019.

The statutory net (loss) income was $( 17.7 ) million, $( 141.5 ) million, and $ 20.8 million for the years ended December 31, 2022, 2021, and 2020, respectively.

The combined ECR for the year ended December 31, 2021 was $ 450.4 million.

1 unchanged sentence

The Company believes that the minimum statutory capital and surplus requirements will be met.

The insurers must also maintain a minimum liquidity ratio in which the value of its relevant assets is not less than 75.0 % of the amount of its relevant liabilities for general business.

The foregoing financial information includes Carolina Re for the years ended December 31, 2021 and 2020.

Under the Bermuda Insurance Act 1978, an insurer must maintain a minimum liquidity ratio in which the value of its relevant assets is not less than 75.0 % of the amount of its relevant liabilities for general business.

Relevant assets include cash and cash equivalents, fixed maturities, quoted alternative investments, accrued interest income, premiums receivable, losses recoverable from reinsurers, and funds withheld.

16 unchanged sentences

An insurer can declare or pay dividends without prior regulatory approval up to 25% of the total statutory capital and surplus (as shown on its previous financial year's statutory balance sheet).

The maximum combined amount of dividends and return of capital that can be paid without prior regulatory approval from our Bermuda insurers at December 31, 2021 is calculated to be approximately $ 129.7 million.

However, this dividend amount is subject to annual enhanced solvency requirement calculations.

The maximum combined amount of dividends and return of capital that can be paid without prior regulatory approval from our Bermuda

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2022, 2021, and 2020

insurers at December 31, 2022 is calculated to be approximately $ 93.9 million.

However, this dividend amount is subject to annual enhanced solvency requirement calculations.

Other Related Party Transactions

5 unchanged sentences

Subsequent Events

On February 21, 2022, the Board of Directors declared a cash dividend of $ 0.05 per share.

On January 27, 2023, the 2013 Facility and 2017 Facility were amended to provide for the transition from LIBOR to the secured overnight financing rate (SOFR).

On February 16, 2023, the Board of Directors declared a cash dividend of $ 0.05 per common share.

The dividend is payable on March 31, 2023 to shareholders of record on March 13, 2023 .

On February 16, 2023, the Board of Directors declared a quarterly dividend on the Series A Preferred Shares.

The dividend of $ 2.6 million will be payable in cash on March 31, 2023 to shareholders of record on March 15, 2023 .

On February 16, 2023, the Board of Directors approved awards under the 2014 LTIP and the 2014 Director Plan to the Company’s employees and directors with an aggregate fair value of $ 9.0 million and a grant date of March 1, 2023.

On February 23, 2022, one of the Company’s primary operating subsidiaries, JRG Reinsurance Company Ltd., entered into a loss portfolio transfer retrocession agreement (the “Retrocession Agreement”) with Fortitude Reinsurance Company Ltd.

(“FRL”) under which FRL will reinsure the majority of the reserves in the Company’s Casualty Reinsurance segment.

Under the terms of the transaction, at closing, JRG Re will (a) cede to FRL all existing and future claims for losses arising under certain casualty reinsurance agreements with underlying insurance companies with treaty inception dates ranging from 2011 to 2020 (the “Subject Business”), in each case net of third-party reinsurance and other recoveries, up to an aggregate limit of $ 400.0 million;

(b) continue to manage and retain the benefit of other third-party reinsurance on the Subject Business;

(c) pay FRL a reinsurance premium of $ 335.0 million, $ 310.0 million of which JRG Re will credit to a notional funds withheld account (the “Funds Withheld Account”) and $ 25.0 million of which JRG Re will pay in cash to FRL;

and (d) pay FRL a 2 % per annum crediting rate on the Funds Withheld Account balance on a quarterly basis.

The total premium, initial Funds Withheld Account credit, and aggregate limit will be adjusted for claims paid from October 1, 2021 to the closing date.

An after-tax loss of $ 6.8 million will be recognized as adverse loss and loss adjustment reserve development in the Casualty Reinsurance segment associated with the Retrocession Agreement during the first quarter of 2022.

The Retrocession Agreement will close upon receipt of required regulatory approvals by FRL and satisfaction of other customary closing conditions.

On February 24, 2022, we entered into an Investment Agreement with GPC Partners Investments (Thames) LP, an affiliate of Gallatin Point Capital LLC, relating to the issuance and sale of 150,000 7 % Series A Perpetual Cumulative Convertible Preferred Shares, par value $ 0.00125 per share, for an aggregate purchase price of $ 150.0 million, or $ 1,000 per share, in a private placement.

The closing of the transaction is expected to occur on March 1, 2022.

In connection with the offering, the Company's Board of Directors approved the appointment of Matthew Botein, a co-founder of Gallatin Point Capital LLC, to serve as a member of the Board, effective following receipt of any necessary regulatory approvals.

Botein will have Board observer status until applicable regulatory approvals are obtained.

In keeping with previously announced plans to significantly shrink top-line writings of the Casualty Reinsurance segment, the Company has decided to suspend writing business in the Casualty Reinsurance segment, as it continues to focus on growing the higher returning U.S.

insurance and fronting businesses.

The Company expects the Casualty Reinsurance segment to continue earning premium due to the nature of the earnings patterns in the reinsurance business, which can extend over multiple years.

Aside from the suspension of underwriting activities, the Company plans for the Casualty Reinsurance segment to maintain its normal day-to-day operations, with a staff to continue servicing the business on its books and to facilitate compliance with its regulatory requirements.

JAMES RIVER GROUP HOLDINGS, LTD.

35 unchanged sentences

Junior subordinated debt 15,928 15,928

Notes payable to subsidiary — 70,000

Due to subsidiaries 87,061 19,847

2 unchanged sentences

Commitments and contingent liabilities

Series A redeemable preferred shares 144,898 —

Shareholders’ equity:

1 unchanged sentence

Additional paid-in capital 868,858 862,040

Retained (deficit) earnings ( 166,663 ) 49,227

Accumulated other comprehensive income 29,978 81,899

Retained deficit ( 152,055 ) ( 166,663 )

Accumulated other comprehensive (loss) income ( 163,044 ) 29,978

Total shareholders’ equity 553,766 725,362

Total liabilities and shareholders’ equity $ 1,010,472 $ 1,150,714

Total liabilities, Series A redeemable preferred shares, and shareholders’ equity $ 1,013,447 $ 1,010,472

See accompanying notes.

2 unchanged sentences

Condensed Financial Information of Registrant

Statements of (Loss) Income and Comprehensive (Loss) Income (Parent Company)

Statements of Income (Loss) and Comprehensive (Loss) Income (Parent Company)

Year Ended December 31,

8 unchanged sentences

Loss before equity in net income of subsidiaries ( 22,161 ) ( 17,594 ) ( 21,149 )

Equity in net (loss) income of subsidiaries ( 155,205 ) 25,973 57,592

Net (loss) income $ ( 172,799 ) $ 4,824 $ 38,339

Equity in net income (loss) of subsidiaries 53,134 ( 155,205 ) 25,973

Net income (loss) $ 30,973 $ ( 172,799 ) $ 4,824

Other comprehensive (loss) income:

10 unchanged sentences

Operating activities

Net (loss) income $ ( 172,799 ) $ 4,824 $ 38,339

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

Net income (loss) $ 30,973 $ ( 172,799 ) $ 4,824

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Provision for depreciation and amortization 216 216 216

6 unchanged sentences

Financing activities

Dividends paid ( 43,236 ) ( 37,051 ) ( 36,720 )

Senior debt issuance — — 164,000

3 unchanged sentences

Contribution to subsidiary ( 144,000 ) ( 128,000 ) ( 90,000 )

Debt issue costs paid — — ( 711 )

Issuance of Series A preferred shares 144,898 — —

Issuances of common shares - public offering — 192,107 —

1 unchanged sentence

Common share repurchases ( 1,304 ) ( 3,077 ) ( 3,604 )

Dividends on Series A preferred shares ( 6,125 ) — —

Dividends on common shares ( 7,798 ) ( 43,236 ) ( 37,051 )

Net cash (used in) provided by financing activities ( 54,329 ) ( 50,329 ) 5,925

20 unchanged sentences

Adopted Accounting Standards

There were no new accounting standards adopted in 2021 that materially impacted the Company's financial statements .

ASU 2020-06 simplifies the accounting for convertible debt instruments and convertible preferred stock and became effective for interim and annual periods beginning after December 15, 2021.

The Company adopted the new standard concurrent with the issuance of our 7 % Series A Perpetual Cumulative Convertible Preferred Shares, par value $ 0.00125 per share, on March 1, 2022.

Adoption of the new standard did not materially impact our financial position or results of operations for the year ended December 31, 2022.

JAMES RIVER GROUP HOLDINGS, LTD.

62 unchanged sentences

Allowance for Credit Losses on Premiums Receivable and Agents' Balances $ 5,659 $ 3,318 $ ( 660 ) $ 8,317

Allowance for Credit Losses on Reinsurance Balances 335 — — 335

Allowance for Credit Losses on Bank Loans 7,181 — ( 7,181 ) —

16 unchanged sentences

Current year 515,653 466,574 386,341

Prior year 325,778 92,204 69,008

Prior years - retroactive reinsurance 20,091 — —

Prior years - excluding retroactive reinsurance 9,070 325,778 92,204

Total losses and loss adjustment expenses incurred 544,814 792,352 478,545

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures