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Item 1. Business

2024-02-29 compared with 2023-02-28 · 201 added, 235 removed, 842 unchanged (34% of the section changed)

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is a Bermuda-based holding company.

We own and operate a group of specialty insurance and reinsurance companies.

For the year ended December 31, 2022, approximately 71.2% of our group-wide gross written premiums and 90.3% of our group-wide net written premiums originated from the U.S.

excess and surplus (“E&S”) lines market, which we believe puts us among the top three publicly traded insurers as ranked by highest concentrations of E&S risk.

Substantially all of our business is casualty insurance, and for the year ended December 31, 2022, we derived 96.5% of our group-wide gross written premiums from casualty insurance.

We own and operate a group of specialty insurance companies focused on underwriting small and middle market casualty risks within the U.S.

excess and surplus (“E&S”) lines market.

For the year ended December 31, 2023, approximately 71.7% of our gross written premiums and 85.8% of our net written premiums from continuing operations originated from the E&S lines market, which we believe puts us among the top three publicly traded insurers as ranked by highest concentrations of E&S risk.

Substantially all of our business is casualty insurance, and for the year ended December 31, 2023, 95.7% of our gross written premiums from continuing operations were derived from casualty insurance.

Our objective is to generate compelling returns on tangible equity, while limiting underwriting and investment volatility.

We seek to accomplish this by earning profits from insurance and reinsurance underwriting and generating meaningful risk-adjusted investment returns, while managing our capital.

Our group includes three operating segments:

Excess and Surplus Lines, Specialty Admitted Insurance and Casualty Reinsurance.

We seek to accomplish this by earning profits from insurance underwriting and generating meaningful risk-adjusted investment returns, while managing our capital.

We write very little property or catastrophe insurance and no property catastrophe reinsurance.

For the year ended December 31, 2022, property insurance and reinsurance represented 3.5% of our gross written premiums.

For the year ended December 31, 2023, property insurance represented 4.3% of our gross written premiums from continuing operations.

When we do write property insurance, we buy reinsurance to significantly mitigate our risk.

We have structured our reinsurance arrangements so that our modeled net pre-tax loss from a 1/1000 year probable maximum loss ("PML") event would not exceed 2.5% of shareholders’ equity on a group-wide basis, inclusive of reinstatement premiums payable and net retentions.

We report our business in four segments:

Excess and Surplus Lines, Specialty Admitted Insurance, Casualty Reinsurance and Corporate and Other.

During 2023, we undertook several strategic actions to focus our business around our higher returning U.S.

insurance businesses.

Our continuing operations are now comprised of two operating segments, Excess and Surplus Lines and Specialty Admitted Insurance, and a third segment, Corporate and Other.

The Excess and Surplus Lines segment sells E&S commercial lines liability and property insurance in every U.S.

state and the District of Columbia through James River Insurance Company (“James River Insurance”) and its wholly-owned subsidiary, James River Casualty Company (“James River Casualty”).

The Excess and Surplus Lines segment produced 61.5% of our gross written premiums and 78.7% of our net written premiums for the year ended December 31, 2022.

The Excess and Surplus Lines segment produced 66.8% of our gross written premiums and 85.0% of our net written premiums from continuing operations for the year ended December 31, 2023.

James River Insurance and James River Casualty are both non-admitted carriers.

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The Specialty Admitted Insurance segment has admitted licenses and the authority to write excess and surplus lines insurance in 50 states and the District of Columbia through Falls Lake National Insurance Company (“Falls Lake National”) and its wholly-owned subsidiaries, Stonewood Insurance Company (“Stonewood Insurance”) and Falls Lake Fire and Casualty Company (“Falls Lake Fire and Casualty”).

The Specialty Admitted Insurance segment produced 32.8% of our gross written premiums and 10.2% of our net written premiums for the year ended December 31, 2022.

The Specialty Admitted Insurance segment produced 33.2% of our gross written premiums and 15.0% of our net written premiums from continuing operations for the year ended December 31, 2023.

The Specialty Admitted Insurance segment primarily writes fronting business where we retain a minority share of the risk, generally 10%-35%, and seek to earn fee income.

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Because we retain little premium or risk in our fronted business, we can allocate less capital per dollar of revenue to fronted policies than to policies where we retain more risk, which we believe enhances our returns on equity.

We also write a select book of workers’ compensation coverage for building trades, healthcare employees and light manufacturing, among other light to medium hazard risks in select U.S.

We have also written a select book of Individual Risk Workers’ Compensation (“IRWC”) coverage for building trades, healthcare employees and light manufacturing, among other light to medium hazard risks in select U.S.

In 2023, the Company took actions to reduce its workers' compensation book by non-renewing its large California workers' compensation program and by closing on an agreement to sell the renewal rights to the IRWC business.

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

The Casualty Reinsurance segment distributes through reinsurance brokers and produced 5.7% of our gross written premiums and 11.1% of our net written premiums for the year ended December 31, 2022.

The Casualty Reinsurance segment provides proportional and working layer casualty reinsurance to third parties and, through December 31, 2021, to our U.S.-based insurance subsidiaries.

Typically, we structure our reinsurance contracts (also known as treaties) as quota share arrangements, with loss mitigating features, such as commissions that adjust based on underwriting results.

We frequently include risk mitigating features in our working layer excess of loss treaties, such as paid reinstatements.

On a premium volume basis, treaties with loss mitigation features, including profit and sliding scale ceding commissions, represented 40.6% of the net premiums written by our Casualty Reinsurance segment during 2022.

We typically do not assume large individual risks in our Casualty Reinsurance segment, nor do we write property catastrophe reinsurance.

Most of the underlying policies assumed by our Casualty Reinsurance segment have a $1.0 million per occurrence limit, and we typically assume only a portion of that exposure.

We do not assume stand-alone third-party property business at our Casualty Reinsurance segment, but we do have a

small amount of assumed business with ancillary property exposure.

General liability accounts represented 64.8% of gross premiums written by our Casualty Reinsurance segment during 2022.

The Casualty Reinsurance segment writes third party business through one entity, JRG Reinsurance Company Ltd.

Through December 31, 2017, we had intercompany reinsurance agreements under which we ceded 70% of the net written premiums of our U.S.

subsidiaries (after taking into account third-party reinsurance) to JRG Re.

Effective January 1, 2018 through December 31, 2021, we generally discontinued ceding 70% of our U.S.-written premiums to JRG Re and instead ceded 70% of our U.S.-written premiums to Carolina Re Ltd ("Carolina Re").

This business was ceded under quota-share reinsurance treaties with ceding commissions that were negotiated at arm’s length.

We exclude the effects of intercompany reinsurance agreements from the presentation of our segment results, consistent with the way we manage the Company.

At December 31, 2022, 33.2% of our invested assets were held at JRG Re.

The Corporate and Other segment consists of the management and treasury activities of our holding companies, equity compensation for the group, and interest expense associated with our debt.

In 2022, our operating subsidiaries wrote $1,496.6 million of gross written premiums, allocated by segment and underlying market as follows:

Our discontinued operations include JRG Re, which comprises the remaining operations of the former Casualty Reinsurance segment, and which, prior to the suspension of its underwriting activities in 2023, provided proportional and working layer casualty reinsurance to third parties.

On November 8, 2023, the Company entered into a definitive agreement to sell JRG Re.

The sale transaction is expected to close in the first quarter of 2024.

In 2023, we wrote $1,508.7 million of gross written premiums from continuing operations, allocated by segment and underlying market as follows:

Gross Written Premiums by Segment Gross Written Premiums

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Specialty Admitted Insurance segment 501,309 33.2 %

Casualty Reinsurance segment 85,208 5.7 %

$ 1,508,660 100.0 %

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Best Company (“A.M.

Best”) financial strength rating for our group’s regulated insurance and reinsurance subsidiaries is “A-” (Excellent) with a stable outlook.

Best”) financial strength rating for our group’s regulated U.S.

subsidiaries is “A-” (Excellent).

This rating reflects A.M.

Best’s evaluation of our insurance and reinsurance subsidiaries’ financial strength, operating performance and ability to meet obligations to policyholders and is not an evaluation directed towards the protection of investors.

The rating for our operating insurance and reinsurance companies of “A-” (Excellent) is the fourth highest rating of the thirteen ratings issued by A.M.

Best’s evaluation of our U.S.

subsidiaries’ financial strength, operating performance and ability to meet obligations to policyholders and is not an evaluation directed towards the protection of investors.

The rating for our U.S.

operating companies of “A-” (Excellent) is the fourth highest rating of the thirteen ratings issued by A.M.

Best and is assigned to insurers that have, in A.M.

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Best have an impact on the ability of our regulated subsidiaries to attract and retain agents and brokers and on the risk profiles of the submissions for insurance that our subsidiaries receive.

We believe the “A-” (Excellent) ratings assigned to our insurance and reinsurance subsidiaries allow our subsidiaries to actively pursue relationships with the agents and brokers identified in their marketing plans.

We believe the “A-” (Excellent) ratings assigned to our subsidiaries allows them to actively pursue relationships with the agents and brokers identified in their marketing plans.

On December 20, 2023, A.M.

Best announced that it revised the outlook on our financial strength rating from stable to negative on our U.S.

subsidiaries.

Also, on December 20, 2023, A.M.

Best announced that it downgraded the financial strength rating of JRG Re from “A-” (Excellent) with a stable outlook to "B++" (good) with a negative outlook.

Best announced that the ratings actions follow our announcements in November 2023 that we identified a material weakness in our internal control over financial reporting, that we entered into an agreement to sell JRG Re, and that we are exploring strategic alternatives for the Company.

Best indicated that the negative outlook reflects the uncertainty that the actions will have on our organization, and reflects the execution risk associated with some of these initiatives.

Best further announced that the ratings actions on JRG Re was based upon A.M.

Best's view that JRG Re is less integral to our strategic, operational and financial objectives, as a result of our determination to suspend underwriting in our former casualty reinsurance segment, and our agreement to sell JRG Re at 75% of the book value, valued at September 30, 2023.

The Company has remediated the material weakness in our internal control over financial reporting as of December 31, 2023 (see Item 9A.

- Remediated Material Weakness).

In 2002, a group of experienced insurance executives created James River Group, Inc.

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In 2007, a group of investors acquired James River Group, at which point it ceased trading as a public company.

Simultaneously, the investors and management founded and capitalized JRG Re, and we began the process of building our present company.

Simultaneously, the investors and management founded and capitalized JRG Re to begin providing reinsurance to third parties and our U.S.-based insurance subsidiaries.

In December 2014, we completed an initial public offering of our common shares (the “IPO”).

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Neither the Company nor any of its management or other shareholders sold shares in the IPO.

In November 2023, we announced an agreement to sell JRG Re.

The sale, which is expected to close in the first quarter of 2024, allows us to focus on growing our U.S.

insurance and fronting businesses.

Our Competitive Strengths

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We continue to have our underwriters make individual judgments regarding the underwriting and pricing of accounts.

Our experience leads us to believe this approach, combining expert judgment and technology designed to provide our underwriters with relevant information and quick processing, is still more likely to produce consistent results over time and across markets.

Our experience leads us to believe this approach, combining expert judgment and technology designed to provide our underwriters with relevant information and quick processing, is more likely to produce consistent results over time and across markets.

We are successfully increasing rates in our Excess and Surplus Lines segment.

Pricing on our E&S renewal book has increased for twenty-four consecutive quarters.

The Excess and Surplus Lines and Specialty Admitted segments combined represented 94.3% of our gross written premiums and 88.9% of our net written premiums for the year ended December 31, 2022.

Pricing on our E&S renewal book has increased for twenty-eight consecutive quarters.

The Excess and Surplus Lines segment represented 66.8% of our gross written premiums and 85.0% of our net written premiums from continuing operations for the year ended December 31, 2023.

We believe that there are compelling opportunities for measured but profitable growth in many sectors of the insurance markets we target.

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In addition, our policy forms and pricing are subject to regular formal analysis in an effort to ensure we are insuring the types of risks we intend and that we are being appropriately compensated for taking on those risks.

We write a small amount of reinsurance.

We seek to avoid catastrophic risks and contractually limit the amount of exposure we have on any one risk or occurrence in the reinsurance we write.

We prefer to structure our assumed reinsurance treaties as proportional or quota share reinsurance, which is generally less volatile than excess of loss or catastrophe reinsurance.

We believe this structure aligns our interests with those of the ceding company.

Talented Underwriters and Operating Leadership.

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They have been successful and profitable underwriters for us in the specialty casualty insurance sector.

Our segment presidents all have extensive backgrounds and histories working in management capacities in specialty casualty insurance and reinsurance.

Our recently joined Chief Actuary, Chief U.S.

Claims Officer and Chief Underwriting Officer also bring extensive backgrounds in operational leadership within specialty casualty insurance and reinsurance, including a deep focus on risk management.

Our segment presidents both have extensive backgrounds and histories working in management capacities in specialty casualty insurance.

Our Chief Actuary, Chief U.S.

Claims Officer and Chief Underwriting Officer have extensive backgrounds in operational leadership within specialty casualty insurance, including a deep focus on risk management.

Efficient Operating Platform.

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We use the data we collect to inform and, we believe, improve our judgment about similar risks as we refine our underwriting criteria.

We use the data we collect in regular formal review processes for each of our lines of business and significant reinsurance treaties.

We use the data we collect in regular formal review processes for each of our lines of business.

Active Claims Management.

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We attempt to investigate thoroughly and settle promptly all covered claims, which we generally accomplish through direct contact with the insured and other affected parties.

We have historically been able to close approximately 95% of claims from a particular policy year within the five subsequent years, and as of December 31, 2022, our reserves for claims incurred but not reported (“IBNR”) were 66.6% of our total net loss reserves.

We have historically been able to close approximately 95% of claims from a particular policy year within the five subsequent years, and as of December 31, 2023, our reserves for claims incurred but not reported (“IBNR”) for our continuing operations were 72.0% of total net loss reserves.

Meaningful Risk Adjusted Investment Returns.

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We attempt to follow a strategy that emphasizes the preservation of our invested assets, provides adequate liquidity for the prompt payment of claims and produces attractive results for our shareholders.

Within that context, we seek to improve risk-adjusted returns in our investment portfolio by allocating a portion of our portfolio to investments where we take measured risks based upon detailed knowledge of certain niche asset classes.

Within that context, we seek to improve risk-adjusted returns in our investment portfolio by allocating a portion of our portfolio to investments

where we take measured risks based upon detailed knowledge of certain niche asset classes.

Investment grade fixed maturity securities make up the majority of our investment portfolio, and we are comfortable allocating a portion of our assets to non-traditional investments.

We consider non-traditional investments to include investments that are (1) unrated bond or fixed income securities, (2) non-listed equities or (3) investments that generally have less liquidity than rated bond or fixed income securities or listed equities.

Non-traditional investments represented 7.8% of our total cash and invested assets (excluding restricted cash equivalents) at December 31, 2022, consisting of syndicated bank loans (6.6%) and other invested assets (1.2%) that include interests in limited liability companies that invest in renewable energy opportunities, limited partnerships that invest in debt or equity securities, notes receivable for renewable energy projects, and a private debt security.

Non-traditional investments represented 9.6% of our total cash and invested assets (excluding restricted cash equivalents) at December 31, 2023, consisting of syndicated bank loans (7.9%) and other invested assets (1.7%) that include interests in limited liability companies that invest in renewable energy opportunities, limited partnerships that invest in debt or equity securities, and notes receivable for renewable energy projects.

While we are willing to make investments in non-traditional types of investments, we seek to avoid asset classes and investments that we do not understand.

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In this favorable pricing environment, we have taken steps to grow and are increasing gross written premiums across most underwriting divisions in this segment.

In 2022, our growth was primarily focused in our Excess Casualty, General Casualty, Manufacturers & Contractors, Excess Property, Sports and Entertainment and Small Business divisions within our Excess and Surplus Lines segment.

In 2023, our growth was primarily focused in our Excess Casualty, General Casualty, Manufacturers & Contractors, and Excess Property divisions within our Excess and Surplus Lines segment.

This very specific evaluation of each risk or class of risks is a hallmark of our underwriting.

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and Atlanta, Georgia.

The Excess and Surplus Lines segment is our largest segment, representing 61.5% of consolidated gross written premiums for the year ended December 31, 2022.

James River has been engaged in the E&S insurance market for 20 years.

The Excess and Surplus Lines segment is our largest segment, representing 66.8% of consolidated gross written premiums from continuing operations for the year ended December 31, 2023.

James River has been engaged in the E&S insurance market for over 20 years.

The E&S industry focuses on providing insurance coverage to policyholders that may be unable to purchase insurance from standard lines insurers typically due to perceived risk related to their operations or risk exposures.

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Net written premiums grew by 0.1%, 17.5%, and 11.3% in 2023, 2022, and 2021, respectively.

In 2020, our Excess and Surplus Lines segment’s gross written premiums shrank by 24.2% relative to 2019 due to the early cancellation in late 2019 of a large commercial auto account.

Net written premium growth was lower in 2023 due to $16.4 million of reinstatement premium, triggered by claims on the 2020 and 2021 years of an excess of loss reinsurance treaty, which reduced net written premiums, and the renewal of a quota share treaty, effective July 1, 2023, that increased premium cessions across all underwriting divisions other than Excess Casualty and resulted in lower retentions for the segment.

The Excess and Surplus Lines segment produced a cumulative combined ratio of 94.4% from 2014 through 2023.

Excluding Rasier, the cumulative combined ratio of the Excess and Surplus Lines segment for 2019 through 2023 was 86.1%.

Companies that underwrite on an E&S lines basis operate under a different regulatory structure than standard market carriers.

E&S lines carriers are generally permitted to craft the terms of the insurance contract to suit the particular risk they are

E&S lines carriers are generally permitted to craft the terms of the insurance contract to suit the particular risk they are assuming.

E&S lines carriers are, for the most part, free of rate and form regulation.

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Energy 51,593 5.1 % 42,290 46,216 51,109 45,442

Commercial Auto 37,974 4.1 % 34,630 30,029 405,565 322,126

Small Business 38,561 3.8 % 36,930 32,593 24,790 19,725

Allied Health 30,904 3.1 % 34,156 35,192 26,918 26,713

Commercial Auto 29,379 2.9 % 37,974 34,630 30,029 405,565 (1)

Life Sciences 27,595 2.7 % 32,277 35,935 35,163 24,462

Environmental 20,676 2.2 % 17,050 17,753 16,539 10,499

Sports and Entertainment 17,826 1.8 % 13,934 9,442 6,118 4,212

Environmental 13,832 1.4 % 20,676 17,050 17,753 16,539

Professional Liability 9,264 0.9 % 8,936 8,104 6,881 6,441

Medical Professionals 955 0.1 % 1,285 1,844 1,700 1,733

Management Liability 63 — % — — — —

Total $ 1,007,351 100.0 % $ 921,164 $ 833,657 $ 699,143 $ 922,320

(1) Gross written premiums for 2019 include $374.2 million related to a large commercial auto insured (Rasier).

This coverage was terminated on December 31, 2019.

Excess Casualty underwrites excess liability coverage for a variety of risk classes including manufacturers, contractors, distributors and transportation risks.

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General Casualty writes primary liability coverage on businesses exposed to premises liability type claims including real estate, mercantile and retail operations, apartments and condominiums, hotels and motels, restaurants, bars, taverns and schools.

Typically, we write $1.0 million per occurrence in limits, and we retain the entire $1.0 million limit.

Typically, we write $1.0 million per occurrence in limits, of which we retain $690,000 net per occurrence.

Manufacturers and Contractors writes primary general liability coverage for a variety of classes, including manufacturers of consumer, commercial, and industrial products and general and trade contractors.

Typically, we issue a $1.0 million per occurrence limit in this division, and we retain the entire $1.0 million limit.

Typically, we issue a $1.0 million per occurrence limit in this division, of which we retain $690,000 net per occurrence.

Excess Property writes property risks providing limits in various layers above the primary coverage layer for a variety of classes, including apartments, condominiums, resorts, shopping centers, offices and general commercial properties.

Typical per risk limits offered range from $5.0 million to $30.0 million on a gross basis, and a maximum of $5.0 million on a net of reinsurance basis.

risk limits offered range from $5.0 million to $30.0 million on a gross basis, and a maximum of $5.0 million on a net of reinsurance basis.

The average net per risk limit is approximately $775,000 as of December 31, 2023.

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Energy writes risks engaged in the business of energy production, distribution or mining, and the manufacture of equipment used in the energy business segment.

Examples of classes underwritten by this division include oil and gas

exploration companies, oil or gas well drillers, oilfield consultants, oil or gas lease operators, oil well servicing companies, oil or gas pipeline construction companies, fireworks manufacturing, mining-related risks, utilities, and utility contractors.

We provide policy limits up to $11.0 million, with typical limits between $1.0 million and $5.0 million per occurrence, retaining up to $1.0 million in limit net on either a primary or excess basis.

Commercial Auto underwrites primarily the hired and non-owned auto liability exposures for a variety of industry segments including package and food delivery services.

On December 31, 2019, we terminated coverage for our largest commercial auto insured (Rasier) which comprised $374.2 million of gross written premiums in 2019, representing 40.6% of the Excess and Surplus Lines segment’s gross written premiums and 25.4% of our consolidated gross written premiums for the year ended December 31, 2019.

Limits assumed are retained by the Company, in some cases subject to self-insured retentions of the insureds.

Small Business includes both brokerage and delegated authority contract binding focusing on accounts with annual primary liability insurance premiums of less than $10,000.

Examples of classes underwritten by this division include oil and gas exploration companies, oil or gas well drillers, oilfield consultants, oil or gas lease operators, oil well servicing companies, oil or gas pipeline construction companies, fireworks manufacturing, mining-related risks, utilities, and utility contractors.

We provide policy limits up to $11.0 million per occurrence, of which we retain up to $3.2 million in limit net, with typical limits between $1.0 million and $5.0 million per occurrence, of which we retain between $690,000 and $1.98 million net, respectively, on either a primary or excess basis.

Small Business includes both brokerage and delegated authority contract binding focusing on accounts with annual primary liability insurance premiums of less than $20,000 and more typically below $10,000.

For these smaller risks, we limit flexibility in coverage options and pricing to facilitate quick turnaround and efficient processing.

We generally write $1.0 million per occurrence limits and retain the entire amount.

We generally write $1.0 million per occurrence limits, of which we retain $690,000 net per occurrence.

Allied Health underwrites casualty insurance for allied health and social service types of risks, such as long-term care facilities, independent living apartments, group homes, half-way houses and shelters, drug rehabilitation, home health care and medical staffing enterprises.

We provide policy limits up to $11.0 million, with typical limits between $1.0 million and $5.0 million per occurrence, retaining up to $1.0 million in limit net.

Approximately 88% of the premiums written by our Allied Health division from inception through 2023 have been written on a claims-made and reported form.

We believe this policy form significantly reduces our long-term exposure in this complicated class of business.

Commercial Auto underwrites primarily the hired and non-owned auto liability exposures for a variety of industry segments including package and food delivery services.

Limits assumed are retained up to $690,000 net per occurrence by the Company, in some cases subject to self-insured retentions of the insureds.

Life Sciences underwrites general liability, products liability and/or professional liability coverage for manufacturers, distributors and developers of biologics (antibodies & vaccines used for the prevention of disease), nutraceuticals (health, nutrition and herbal supplements), human clinical trials, pharmaceuticals (mainly generics and over-the-counters) and medical devices.

This division also writes a book of various types of business engaged in the medical and adult-use cannabis industry.

We provide policy limits up to $11.0 million (up to $10.0 million on cannabis), with typical limits between $1.0 million and $5.0 million per occurrence, retaining up to $1.0 million in limit net.

We provide policy limits up to $11.0 million per occurrence (up to $10.0 million on cannabis), of which we retain up to $3.2 million in limit net per occurrence, with typical limits between $1.0 million and $5.0 million per occurrence, of which we retain between $690,000 and $1.98 million net, respectively.

Sports and Entertainment underwrites primary liability coverage for sports, recreation and entertainment related risks, including special events, family entertainment centers, tourist attractions, health clubs, sports complexes and other sport and event venues.

Typical limits offered are up to $1.0 million per occurrence, of which we retain $690,000 net per occurrence.

Environmental underwrites contractors’ pollution liability, products pollution liability, site specific pollution liability and consultant’s professional liability coverage on a stand-alone basis and in conjunction with the general liability coverage.

Typically, we write environmental coverage for contractors who are not engaged in environmental remediation work on an occurrence form.

We provide policy limits up to $11.0 million, with typical limits between $1.0 million and $5.0 million per occurrence, retaining up to $1.0 million in limit net on a primary or excess basis.

Typical limits offered are up to $1.0 million per occurrence, and we retain the entire $1.0 million limit.

Professional Liability writes professional liability coverage for accountants, architects, engineers, lawyers and certain other professions.

We provide policy limits up to $11.0 million, with typical limits between $1.0 million and $5.0 million per occurrence, retaining up to $1.0 million in limit net.

We provide policy limits up to $11.0 million, of which we retain up to $3.2 million in limit net, with typical limits between $1.0 million and $5.0 million per occurrence, of which we retain between $690,000 and $1.98 million net, respectively.

All of our professional liability coverage is written on a claims-made and reported basis.

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Our healthcare business is a mix of both surgical and non-surgical classes.

We typically provide between $1.0 million and $3.0 million per occurrence limits and retain up to $1.0 million of exposure per occurrence and cede the balance to our reinsurers.

We typically provide between $1.0 million and $3.0 million per occurrence limits, of which we retain between $690,000 and $1.58 million net, respectively.

All of the policies written by this division have been issued on a claims-made and reported basis.

Management Liability, a new underwriting division in 2023, writes excess management liability coverage inclusive of directors & officers liability, employment practices liability, and fiduciary liability.

The division will underwrite a wide range of industries except for financial institutions and cryptocurrency firms.

We write publicly traded risks, privately held risks and not-for-profit risks.

Typical per risk limits offered are $5.0 million or less on a gross basis or $1.8 million on a net basis and a maximum of $10.0 million on a gross basis or $3.2 million on a net basis.

The following table identifies the top producing states by amount of gross written premium for our Excess and Surplus Lines segment for the year ended December 31, 2023 and the amount of gross written premium produced by such states for the years ended December 31, 2022, 2021, 2020 and 2019.

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New York 126,326 12.5 % 112,189 12.2 % 101,820 12.2 % 108,778 89,680

Pennsylvania 23,548 2.5 % 22,055 2.6 % 19,008 2.7 % 16,206 8,562

New Jersey 25,871 2.6 % 23,383 2.5 % 22,131 2.7 % 17,621 13,425

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Illinois 21,399 2.1 % 17,526 1.9 % 19,010 2.3 % 16,243 14,491

Pennsylvania 17,794 1.8 % 23,548 2.5 % 22,055 2.6 % 19,008 16,206

Louisiana 16,054 1.6 % 17,161 1.9 % 15,723 1.9 % 13,968 16,001

Massachusetts 13,458 1.5 % 16,682 2.0 % 13,762 2.0 % 34,494 19,758

Missouri 12,446 1.4 % 11,967 1.4 % 10,080 1.4 % 14,628 9,424

Virginia 11,125 1.2 % 8,663 1.0 % 8,932 1.3 % 23,563 15,532

Ohio 14,415 1.4 % 11,091 1.2 % 13,156 1.6 % 9,210 10,537

Virginia 12,141 1.2 % 11,125 1.2 % 8,663 1.0 % 8,932 23,563

Missouri 11,812 1.2 % 12,446 1.4 % 11,967 1.4 % 10,080 14,628

Oregon 11,533 1.1 % 10,041 1.1 % 7,501 0.9 % 6,583 6,063

All other states 163,500 16.3 % 154,493 16.8 % 142,918 17.2 % 127,607 193,028

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We believe the personal relationships we foster with individual brokers and our ability to respond to a wide variety of risks placed by these brokers make us an important market for them.

Our Excess and Surplus Lines segment’s three largest brokers produced $643.3 million of gross written premiums for the year ended December 31, 2022, representing approximately 69.8% of the Excess and Surplus Lines segment’s gross written premiums and 43.0% of consolidated gross written premiums for 2022.

The three largest brokers produced $289.7 million (Ryan Specialty Group), $214.2 million (AmWins Group), and $139.4 million (Truist Insurance Holdings) of gross written premiums for the year ended December 31, 2022, respectively, 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 for 2022, respectively.

Our Excess and Surplus Lines segment’s three largest brokers produced $716.3 million of gross written premiums for the year ended December 31, 2023, representing approximately 71.1% of the Excess and Surplus Lines segment’s gross written premiums and 47.5% of consolidated gross written premiums from continuing operations for 2023.

The three largest brokers produced $324.7 million (Ryan Specialty Group), $246.4 million (Amwins Group), and $145.2 million (Truist Insurance Holdings) of gross written premiums for the year ended December 31, 2023, respectively, representing 21.5%, 16.3%, and 9.6% of consolidated gross written premiums from continuing operations and 32.2%, 24.5%, and 14.4% of the Excess and Surplus Lines segment’s gross written premiums for 2023, respectively.

In 2023 and 2022, our Excess and Surplus Lines segment paid an average commission to producers of 17.5% and 16.8%, respectively, of gross written premiums.

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We are very selective about the policies we bind.

Our Excess and Surplus Lines segment binds approximately 4% of new submissions and one out of every five new quotes.

If our underwriters cannot reasonably expect to bind coverage at the combination of premiums and coverage that meet our standards, they are encouraged to quickly move on

to another prospective opportunity.

For the year ended December 31, 2022, we received approximately 288,000 submissions (new and renewal, excluding commercial auto policies), quoted over 59,000 policies and bound over 25,000 policies.

Our Excess and Surplus Lines segment binds approximately 3% of new submissions and one out of every four new quotes.

If our underwriters cannot reasonably expect to bind coverage at the combination of premiums and coverage that meet our standards, they are encouraged to quickly move on to another prospective opportunity.

For the year ended December 31, 2023, we received approximately 321,000 submissions (new and renewal, excluding commercial auto policies), quoted almost 61,000 policies and bound close to 27,000 policies.

When we accept risk in our Excess and Surplus Lines segment, we are careful to establish terms that are suited to the risk and the pricing.

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On September 27, 2021, 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 for which James River is not otherwise indemnified by Rasier.

(“Aleka”), a captive insurance company affiliate of Rasier, to reinsure substantially all of the Excess and Surplus Lines segment’s legacy portfolio of commercial auto policies previously issued to 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.

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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.

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 net reserves subject to the Commercial Auto LPT, resulting in a corresponding additional amount ceded under the Commercial Auto LPT.

For the years ended December 31, 2023 and 2022, due to adverse paid and reported loss trends on the legacy Rasier business, the Company recognized adverse prior year development of $64.4 million and $46.7 million, respectively, on the net reserves subject to the Commercial Auto LPT, resulting in corresponding additional amounts 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.

The Company has applied retroactive reinsurance accounting to the Commercial Auto LPT.

A retroactive reinsurance benefit of $31.0 million was 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.

Retroactive reinsurance benefits of $59.4 million and $31.0 million, respectively, were recorded in losses and loss adjustment expenses on the Consolidated Statements of (Loss) Income and Comprehensive Loss for the years ended December 31, 2023 and 2022 using the recovery method.

As of December 31, 2023 and December 31, 2022, the cumulative amounts ceded under the Commercial Auto LPT were $456.2 million and $391.8 million, respectively.

The unrecognized deferred retroactive reinsurance gain of $15.7 million at December 31, 2022 is separately presented on the Company's Consolidated Balance Sheets.

The deferred retroactive reinsurance gain separately presented on the Company's Consolidated Balance Sheets was $20.7 million and $15.7 million at December 31, 2023 and December 31, 2022, respectively.

Specialty Admitted Insurance Segment

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Falls Lake consists of Falls Lake National (an Ohio domiciled company, licensed in 49 states and the District of Columbia and registered as a surplus lines company in California), and its subsidiaries Stonewood Insurance (a North Carolina domiciled company) and Falls Lake Fire and Casualty (a California domiciled company).

The Specialty Admitted Insurance segment produced 32.8% of consolidated gross written premiums for the year ended December 31, 2022.

Our plan is to continue to use our broad licensure and significant management expertise to earn fee income as well as underwriting profits.

The Specialty Admitted Insurance segment consists of:

• Fronting and program business written through selected MGAs, insurance carriers, and other producers, which represented 89.2% of 2022 gross written premiums in this segment, (88.3% in 2021, 84.4% in 2020, 83.6% in 2019, 85.2% in 2018, and 86.1% in 2017);

• Individual risk workers’ compensation business, underwritten by our staff and generated by appointed agents in 13 states, that produced 10.8% of 2022 gross written premiums in this segment, (11.7% in 2021, 15.6% in 2020, 16.4% in 2019, 14.8% in 2018, and 13.9% in 2017).

The Specialty Admitted Insurance segment produced 33.2% of gross written premiums from continuing operations for the year ended December 31, 2023.

Fronting & Program Business

Fronting and program business written through selected MGAs, insurance carriers, and other producers, represented 90.9% of 2023 gross written premiums in this segment (89.2% in 2022, 88.3% in 2021).

In our fronting business, we issue insurance policies for another insurance company which may not have the licensure, product suite or rating to serve its desired market, or for a program supported by reinsurance or alternative capital provider(s).

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We establish fronting opportunities through a variety of sources, including direct carrier relationships, MGAs, reinsurers, and reinsurance brokers.

Due to our licensure and product filings, we are positioned to support this business throughout the United States.

Because of the more limited capital allocation required to support it, we believe the fronting business represents an efficient use of capital, and we continued to expand this business in 2022.

Our two largest fronting agencies produced $120.9 million and $110.9 million of gross written premiums in 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.

Our objective is to utilize the combination of fee income and underwriting profits from our Specialty Admitted Insurance segment to leverage our capital and improve returns on tangible equity.

Fee income was $24.2 million in 2023, $23.6 million in 2022, and $22.7 million in 2021.

Our licensure and product filings position us to support this business throughout the United States.

Because of the more limited capital allocation required to support it, we believe the fronting business represents an efficient use of capital, and we continued to expand this business in 2023.

Our largest fronting relationship produced $163.1 million of gross written premiums in 2023, representing 10.8% of consolidated gross written premiums from continuing operations and 32.5% of the Specialty Admitted Insurance segment's gross written premiums, respectively.

We focus our coverage on casualty risks in our fronting business, although some property insurance is written.

We seek to limit our risk generally through reinsurance either on a proportional or excess of loss basis, or sometimes both.

For initial claims oversight and administration, we generally outsource frequency layer claims management to third-party administrators for the first $100,000 of a claim, and then provide supervisory control above this amount.

For initial claims oversight and administration, we generally outsource frequency layer claims management authority to third-party administrators up to the first $100,000 of a claim with our management oversight, and then provide supervisory control above this amount.

Under the terms of these program agreements, we pay fixed commissions, often with a profit contingency.

Our fronting business is distributed primarily through MGAs and fronting and program managers.

Traditional Workers’ Compensation Business

Our individual risk workers’ compensation business, produced through a distribution channel comprised of appointed independent retail agents and a limited number of appointed wholesale brokers, remains a regionally focused effort mainly in select Southeastern U.S.

We made the strategic decision in 2020 to focus our efforts towards the Southeast, and to substantially reduce our presence in other states.

This decision was based upon a wide range of factors, including ability to exceed internal performance metrics, regulations regarding pricing and claim cost containment, and our agent relationships.

For the year ended December 31, 2022, approximately 39% of our retail produced workers’ compensation direct written premiums were in North Carolina, 18% were in Georgia, 17% were in Missouri, and 10% were in Virginia.

Building trades represented approximately 31% of the direct premiums in force in our retail produced workers’ compensation book in 2022.

Other significant industry groups include specialty transportation (14%), healthcare employees (13%), goods and services (13%), manufacturing (13%), and agriculture (9%).

We recognize the cyclical nature of this line and are prepared to contract the business rapidly when rates decline, or the regulatory or economic environment makes it difficult to adequately price this business or contain claim costs.

Casualty Reinsurance Segment

We report our business of writing reinsurance for third party insurance companies in our Casualty Reinsurance segment (representing 5.7% of consolidated gross written premiums for the year ended December 31, 2022).

We participate in the reinsurance business through our Bermuda domiciled reinsurance subsidiary, JRG Re, which is licensed as a Class 3B reinsurer by the Bermuda Monetary Authority.

JRG Re provides proportional and working layer excess of loss treaty reinsurance to third parties and, through December 31, 2017, also to our U.S.-based insurance subsidiaries.

For purposes of management evaluation, this segment’s underwriting results only include premiums ceded by, and losses incurred with respect to, business assumed from unaffiliated companies and does not include premiums and losses ceded under the internal reinsurance arrangements.

Our Casualty Reinsurance segment underwrote $85.2 million in gross written premiums for the year ended December 31, 2022, 97.5% of which consisted of E&S risks.

Of those third-party premiums written by JRG Re, 64.8% is classified by the company as general liability and 22.0% as non-medical professional liability, with the balance primarily related to excess casualty and commercial auto coverages.

We typically structure our reinsurance treaties as quota share arrangements with loss and risk mitigating features that align our interest with that of the ceding companies.

On a premium volume basis, treaties written as “proportional” arrangements represented 98.1% of the third-party net written premiums during 2022 and treaties with loss mitigation features including sliding scale ceding commissions represented 40.6%.

We purchase very little retrocessional coverage in this segment.

Almost all of the segment’s premiums are for casualty lines of business.

The Casualty Reinsurance segment writes virtually no reinsurance designed to respond specifically to natural catastrophes.

The Casualty Reinsurance segment’s three largest brokers generated $25.4 million, $20.0 million, and $17.2 million of gross written premiums, respectively, representing 73.4% of the segment’s gross written premiums in the year ended December 31, 2022.

The Casualty Reinsurance segment’s three largest relationships with unaffiliated ceding companies generated $67.9 million of gross written premiums ($26.9 million, $24.5 million, and $16.5 million, respectively) representing 4.5% of consolidated gross written premiums and 79.7% of the Casualty Reinsurance segment's gross written premiums for the year ended December 31, 2022.

Underwriting profits and investment income earned by JRG Re are exempt from U.S.

We do, however, pay a 1% U.S.

Federal excise tax on premiums ceded to JRG Re.

At December 31, 2022, JRG Re invested assets made up 33.2% of our total invested assets.

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

insurance and fronting businesses.

We expect 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, we plan 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.

Actions to Reduce Workers' Compensation Book

In June 2023, the Company non-renewed its large California workers' compensation program in the Specialty Admitted Insurance segment.

This action was taken due to persistent rate pressure and tighter reinsurance capacity.

Gross written premiums for the program were $96.5 million, $110.9 million, and $124.1 million for the years ended December 31, 2023, 2022, and 2021, respectively.

On September 25, 2023, the Company announced that certain of its subsidiaries entered into an agreement to sell the renewal rights to the IRWC business in the Specialty Admitted Insurance segment.

The IRWC business, underwritten by our staff and generated by appointed agents in 13 states, produced 9.1% of 2023 gross written premiums in this segment (10.8% in 2022, 11.7% in 2021).

The transaction includes the full operations of the business, including underwriting, loss control and claims, and transfer of the employees supporting the business.

The transaction, which closed on September 29, 2023, was aligned with our strategy to focus our resources on core businesses where we have meaningful scale.

Upon closing of the transaction, the Company recognized a $2.2 million gain on sale included in other income for the year ended December 31, 2023 representing the minimum guaranteed consideration to be received in the transaction.

The Company also recognized an impairment charge of $2.5 million related to the trademark intangible asset associated with the IRWC business.

Corporate and Other Segment

Our Chief Executive Officer and Chief Financial Officer and other holding company employees are part of the Corporate and Other segment.

This is where we set and direct strategy for the group as a whole as well as high level objectives for each of the three operating segments.

This is where we set and direct strategy for the group as a whole as well as high level objectives for each of the operating segments.

We make all capital management, capital allocation, treasury functions, information technology and group wide risk management decisions in this segment.

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Purchase of Reinsurance

We routinely purchase reinsurance for our Excess and Surplus Lines and Specialty Admitted Insurance segments and, less frequently purchase retrocessional coverage for our Casualty Reinsurance segment.

We routinely purchase reinsurance for our Excess and Surplus Lines and Specialty Admitted Insurance segments.

The purchase of reinsurance reduces volatility by limiting our exposure to large losses and provides capacity for growth.

In a reinsurance transaction, an insurance company transfers, or cedes, all or part of its exposure in return for a portion of the premium.

In a retrocession transaction, a reinsurer transfers, or cedes, all or part of its exposure in return for a portion of the premium.

Our companies remain legally responsible for the entire obligation to policyholders and ceding companies, irrespective of any reinsurance or retrocession coverage we may purchase.

Typically, we pay claims from our own funds and then seek reimbursement from the reinsurer or retrocessionaire, as applicable.

There is credit exposure with respect to losses ceded to the extent that any reinsurer or retrocessionaire is unable or unwilling to meet the obligations ceded by us under reinsurance or retrocessional treaties.

The ability to collect on reinsurance or retrocessional reinsurance is subject to many factors, including the solvency of the counterparty and their interpretation of contract language and other factors.

As of December 31, 2022, we have no material, ongoing disputes with any reinsurer or retrocessionaire, and we are not aware of any credit quality issues with any of our reinsurers or retrocessionaires.

Our companies remain legally responsible for the entire obligation to policyholders, irrespective of any reinsurance coverage we may purchase.

Typically, we pay claims from our own funds and then seek reimbursement from the reinsurer.

There is credit exposure with respect to losses ceded to the extent that any reinsurer is unable or unwilling to meet the obligations ceded by us under reinsurance treaties.

The ability to collect on reinsurance is subject to many factors, including the solvency of the counterparty and their interpretation of contract language and other factors.

As of December 31, 2023, we have no material, ongoing disputes with any reinsurer, and we are not aware of any credit quality issues with any of our reinsurers.

Purchased Property Reinsurance

Our focus on return on tangible equity leads us to avoid lines of business that we know are exposed to high degrees of volatility.

The Excess and Surplus Lines segment writes a limited book of excess property risks (approximately $52.1 million direct written premiums in 2022).

The Excess and Surplus Lines segment writes a limited book of excess property risks ($64.6 million of direct written premiums in 2023).

The risks assumed in this book are geographically dispersed and significantly reinsured to limit losses.

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In our Specialty Admitted Insurance segment, we focus on casualty business, but we do write a limited amount of property insurance, principally through our fronting and programs business.

The focus in our Casualty Reinsurance segment is also primarily casualty business, but we do have a relatively small amount of assumed business with property exposure.

In our Excess and Surplus Lines segment, we purchased a surplus share reinsurance treaty specifically designed to cover property risks.

The surplus share treaty along with facultative reinsurance helps ensure that our net retained limit per risk will be $5.0 million or less.

In our Excess and Surplus Lines segment, we purchased a proportional quota share reinsurance treaty specifically designed to cover property risks.

The proportional quota share treaty along with facultative reinsurance helps ensure that our net retained limit per risk will be $5.0 million or less.

Additionally, we purchased catastrophe reinsurance of $20.0 million in excess of a $5.0 million retention for the group that is intended to cover the 1 in 1,000 year modeled aggregate PML on the segment’s excess property book.

We buy such high limits because we believe the property catastrophe models are less accurate when applied to small books of business like ours than when applied to larger portfolios.

Where the Specialty Admitted Insurance segment incurs incidental property risks in its fronting and program book of business, the segment has purchased coverage for $4.0 million in excess of $1.0 million per occurrence, in addition to the protection provided under the corporate $60.0 million in excess of $5.0 million catastrophe treaty.

Where the Specialty Admitted Insurance segment incurs incidental property risks in its fronting and program book of business, protection is also provided under the corporate $20.0 million in excess of $5.0 million catastrophe treaty.

This is also intended to cover the 1 in 1,000 year modeled aggregate PML on any property exposures the Specialty Admitted Insurance segment assumes.

In our Casualty Reinsurance segment, we believe that our maximum loss from a catastrophic event is approximately $2.0 million and, as a result, we do not currently purchase retrocessional reinsurance coverage for property-catastrophe risks.

We believe our pre-tax group-wide PML from a 1 in 1,000 year catastrophic event would not exceed 2.5% of shareholders’ equity, inclusive of reinstatement premiums payable and net retentions.

We believe our pre-tax group-

wide PML from a 1 in 1,000 year catastrophic event would not exceed 2.5% of shareholders’ equity, inclusive of reinstatement premiums payable and net retentions.

Purchased Casualty Reinsurance

In our Excess and Surplus Lines segment, there are five divisions where we only write $1.0 million per occurrence limits (Commercial Auto, Manufacturers and Contractors, General Casualty, Small Business and Sports and Entertainment), and therefore, we do not purchase any specific reinsurance for these policies.

In the other divisions, where we issue policies with larger limits, we purchase reinsurance in excess of $1.0 million or $2.0 million per occurrence.

In our Excess and Surplus Lines segment, we purchase a casualty multiline reinsurance solution for all divisions that provides coverage through a proportional quota share treaty and companion excess of loss treaty.

The Company also utilizes facultative reinsurance to reduce the amount of exposure it retains on individual accounts according to its guidelines for accepting risk across various industry segments, locations and types of exposure.

Our maximum net liability is $1.4 million of all policy limits up to $2.0 million per occurrence, and up to $3.2 million of all policy limits greater than $2.0 million per occurrence.

In our Specialty Admitted Insurance segment, there are two distinct reinsurance strategies.

For individual risk workers' compensation, we purchase $29.0 million excess of $1.0 million per occurrence, and we purchase 65.5% quota share coverage of the primary $1.0 million.

For our fronting and program business, we purchase proportional reinsurance and excess of loss reinsurance to limit our exposure to no more than $750,000 per occurrence.

For individual risk workers' compensation, we purchased $29.5 million excess of $500,000 per occurrence.

For our fronting and program business, we generally purchase proportional reinsurance and excess of loss reinsurance to limit our exposure to no more than $750,000 per occurrence.

In prior years, for both our Excess and Surplus Lines segment and our Specialty Admitted Insurance segment, we purchased a contingency clash reinsurance treaty that covered all casualty business for $10.0 million in excess of $2.0 million per occurrence.

This coverage, which was put into runoff effective July 1, 2022, was intended to respond in situations with multiple insured losses from the same event as well as extra contractual obligations or excess policy limits on an individual occurrence basis.

As of December 31, 2022, our average net retained limit per risk is $2.5 million.

Effective January 1, 2020, we purchased an additional $10.0 million in claims made coverage for excess policy limits and extra contractual obligations exposures above the clash and contingency treaty for the period 2014 to present.

This treaty has one reinstatement and expired on December 31, 2022.

In our Casualty Reinsurance segment, we currently purchase quota share retrocessional reinsurance in support of an individual assumed treaty where an expense override is achieved.

In prior periods, we have purchased proportional and excess of loss retrocessional coverage for particular situations related to specific treaties, but have only done so on a limited basis.

For 2023, our top ten reinsurers represented 65.2% of our total ceded reinsurance recoverables, and all of these reinsurance recoverables were from reinsurers with an A.M.

Best rating of “A+” (Superior) or better, or are collateralized with letters of credit or by a trust agreement.

Best rating of “A” (Excellent) or better, or are collateralized with letters of credit or by a trust agreement.

The following table sets forth our ten most significant reinsurers by amount of reinsurance recoverables on unpaid losses and the amount of reinsurance recoverables pertaining to each such reinsurer as well as its A.M.

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Swiss Reinsurance America Corporation $ 366,107 A+

Fortitude Re (Casualty Re LPT) 244,657 A

Aleka Insurance Company (Commercial Auto LPT) 132,049 Unrated (1)

Berkley Insurance Company 162,120 A+

Aleka Insurance Company (Commercial Auto LPT) 78,065 Unrated (1)

Hannover Ruck SE 57,280 A+

Safety National Casualty 46,769 A++

Endurance Assurance Corporation 51,850 A+

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Munich Reinsurance America 37,024 A+

Aioi Nissay Dowa Insurance Company 25,583 A+

Safety National Casualty 32,919 A++

Aspen Insurance 29,397 A

Motors Insurance 29,395 A

Top 10 Total 885,586

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James River previously issued a set of commercial auto insurance contracts to Rasier (the “Rasier Commercial Auto Policies”) under which James River pays losses and loss adjustment expenses on the contracts.

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.

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 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.

For the years ended December 31, 2023 and 2022, due to adverse paid and reported loss trends on the legacy Rasier business, the Company recognized adverse prior year development of $64.4 million and $46.7 million, respectively, on the net reserves subject to the Commercial Auto LPT, bringing the cumulative amount ceded under the Commercial Auto LPT to $456.2 million at December 31, 2023.

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

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Anticipated inflation is reflected implicitly in the reserving process through analysis of cost trends and the review of historical development.

We do not discount our reserves for losses and loss adjustment expenses to reflect estimated present value.

We do not discount our reserves for losses and loss

adjustment expenses to reflect estimated present value.

All of our methods to calculate net reserves include assumptions about estimated reinsurance recoveries and their collectability .

Reinsurance collectability is evaluated independently of the reserving process and appropriate allowances for uncollectible reinsurance are established.

Reinsurance collectability is evaluated independently of the reserving process and appropriate allowances for credit losses are established.

We maintain reserves for specific claims incurred and reported and reserves for claims incurred but not reported (“IBNR”).

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• Trends in claim frequency and severity;

• Changes in operations;

• Changes in operations and claims practices;

• Emerging economic and social trends;

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• Discussions with third-party actuarial consultants;

• Reinsurance structures.

The procedures we use to estimate loss reserves assume that past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for predicting future events.

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Our Reserve Committee consists of our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, and Chief Actuary.

Additionally, the presidents, chief financial officers and segment actuaries of each of our three insurance segments participate in the Reserve Committee meetings for their respective segments.

Additionally, the presidents, chief financial officers and segment actuaries of each of our insurance segments participate in the Reserve Committee meetings for their respective segments.

The Reserve Committee meets quarterly to review the actuarial recommendations made by each segment actuary and use their best judgment to determine the best estimate to be recorded for the reserve for losses and loss adjustment expenses on our balance sheet.

The Company also engages an independent internationally recognized actuarial consulting firm to review the Company’s reserve estimates in the third and fourth quarters of each year.

The following table reflects our favorable (adverse) reserve development by segment during the calendar years 2022 to 2013 individually and in aggregate.

This independent actuarial consulting firm prepares its own estimate of the reserve for losses and loss adjustment expenses, and we compare their estimate to the reserve for losses and loss adjustment expenses reviewed and approved by the Reserve Committee in order to corroborate the adequacy of our reserves.

The following table reflects our favorable (adverse) reserve development by segment for our continuing operations during the calendar years 2023 to 2014 individually and in aggregate.

Segment Excess and

Surplus Lines Specialty

Insurance Casualty

Reinsurance Grand Total

Insurance Total

Calendar Year

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2015 25,424 3,531 28,955

2014 27,283 5,854 33,137

Cumulative Development $ (291,967) $ 39,373 $ (252,594)

(1) Includes adverse development in accident years 2020 and prior exceeding favorable development on accident years 2022 and 2021.

(2) Includes $200.1 million of adverse development in the commercial auto line of business that was primarily related to the 2019 and prior contract years with Rasier, partially offset by $9.4 million of favorable development from other divisions.

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(6) Includes $38.7 million of adverse development in the commercial auto line of business that was primarily related to the 2016 contract year with Rasier, partially offset by $18.6 million of favorable development from other divisions primarily from the 2014 through 2016 accident years.

(6) Includes adverse development primarily related to underwriting years 2014 through 2018.

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

(7) Includes adverse development primarily related to accident years 2014 through 2018.

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

(8) Includes adverse development primarily related to accident years 2011 through 2016.

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

Among the indicators of reserve strength that we monitor closely is the amount of IBNR reserves held on our balance sheet for claims that have been incurred but not yet reported.

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Specialty Admitted Insurance 441,989 836,319 52.8 %

Casualty Reinsurance 280,632 428,033 65.6 %

Total $ 1,742,957 $ 2,606,107 66.9 %

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Specialty Admitted Insurance 70,251 133,602 52.6 %

Casualty Reinsurance 107,292 167,505 64.1 %

Total $ 898,346 $ 1,246,973 72.0 %

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The Bank Loan portfolio primarily consists of investments in participations in syndicated bank loans, but may also include a small allocation of bonds.

Bank loans in our portfolio are generally senior secured loans with an average credit quality of “B” as of December 31, 2022 and floating interest rates based on spreads over LIBOR or SOFR.

Bank loans in our portfolio are generally senior secured loans with an average credit quality of “B” as of December 31, 2023 and floating interest rates based on spreads over SOFR.

We believe bank loans are an attractive asset class because (1) floating-rate loans help to reduce our risk of loss in the event of rising interest rates, (2) the loans are generally senior secured, (3) the asset class has a history of relatively high recovery rates in the event of default, (4) the portfolio provides an attractive yield and (5) the maturities of the loans are relatively short (average of approximately 5 years).

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We have intentionally maintained a cautious interest rate risk position by having an average duration for our total invested assets and cash, excluding restricted cash, of 3.6 years at December 31, 2023.

This compares to an average duration at December 31, 2021 of 4.0 years.

Based on the current duration of 3.6 years, a 1.0% increase in interest rates would result in a pre-tax decline in the market value of our portfolio, excluding other invested assets and cash, of approximately $60.2 million.

Insurance Cycle Management and Growth

The insurance and reinsurance business is cyclical in nature, with “hard” and “soft” cycles.

The insurance business is cyclical in nature, with “hard” and “soft” cycles.

Hard markets occur when insurance underwriters limit their exposure in a line of business or across their entire portfolio.

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In both our Excess and Surplus Lines and Specialty Admitted Insurance segments, we are experiencing growth in premiums driven by favorable rates as well as increases in policy count and exposures.

In 2020, the growth in the Excess and Surplus Lines segment was impacted by the termination of our insurance contracts with Rasier effective December 31, 2019.

The Rasier account generated $374.2 million of gross written premium in 2019, but none in 2020 through 2022.

Excluding Rasier, E&S gross written premium increased 27.5% in 2020, from $548.2 million in 2019 to $699.1 million in 2020.

The table below shows the changes in gross written premiums we have experienced in our operating segments from 2021 through 2023.

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Specialty Admitted Insurance 501,309 2.3 % 490,208 (0.3) % 491,561 20.3 %

Casualty Reinsurance 85,208 (53.2) % 182,081 22.1 % 149,166 (7.2) %

Total $ 1,508,660 6.9 % $ 1,411,372 6.5 % $ 1,325,218 19.6 %

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We have, therefore, sought to diversify this business by geography, line of business and revenue stream.

While we have been growing this business and achieving increasing or stable rates for several periods through December 31, 2022, there will likely be periods in the future where our growth moderates, stagnates or turns negative.

While we have been growing this business and achieving increasing or stable rates for several

periods through December 31, 2023, there will likely be periods in the future where our growth moderates, stagnates or turns negative.

The market for most lines of commercial insurance, other than workers' compensation, are currently in a hardening phase.

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This segment's cumulative combined ratio for 2014 through 2023 is 94.4%.

Excluding Rasier, the cumulative combined ratio of the Excess and Surplus Lines segment for 2019 through 2023 was 86.1%.

Traditionally, admitted insurance lines have been very susceptible to market cycles.

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We have $455.8 million of gross written premiums for fronting and program business for 2023 ($69.7 million on a net basis), and we expect our fee income will continue to grow in future periods and provide us with a steady revenue stream that will be relatively insulated from conditions in the admitted insurance market.

In the Casualty Reinsurance segment, we have the ability to manage the cycle by growing or shrinking our business according to market conditions and the corresponding prices and terms being offered for the assumption of specific risks.

We have a small team of seven people in Bermuda who underwrite and administer the business written by JRG Re in Bermuda.

We compete in a variety of markets against a variety of competitors depending on the nature of the risk and coverage being underwritten.

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The Excess and Surplus Lines segment may also compete with national and regional carriers from the standard market willing to underwrite selected accounts on an admitted basis.

Competitors in this segment include ACE Westchester Specialty Group (Chubb), AmRisc Insurance Company (Truist), Apollo Syndicate, Alleghany Corporation (Berkshire Hathaway), Arrowhead General Insurance Agency, Inc., Ategrity Specialty Insurance Company, Axis Insurance Company (Axis Capital Holdings Limited), Beazley Group (Lloyd’s), Brit Insurance (Lloyd’s), Colony Specialty Insurance Company (Argo Group International Holdings, Ltd.), Fairfax Financial Holdings, Ltd., Hiscox Insurance Company (Lloyd’s), Houston Casualty Company (a subsidiary of Tokio Marine HCC), Kinsale Capital Group, Inc., Lexington Insurance Company (American International Group, Inc.), Markel Corporation,

Navigators Insurance Company (Hartford), OneBeacon (Intact Financial Corporation), QBE Insurance Group Ltd., RLI Corp., E&S/Specialty (Nationwide Mutual Group), Starr Insurance Company (C.V.

Starr & Company), Swiss Re Ltd, United Specialty Insurance Company, W.R.

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National carriers tend to compete for fronting and program accounts along all product lines.

Competition for our fronting business includes but is not limited to State National (now part of Markel), Argo Group, Clear Blue, Spinnaker, Trisura, Red Point, Equity Insurance Company, Worth Insurance, and Amtrust.

The majority of the competition for our workers’ compensation business comes from regional companies or regional subsidiaries of national carriers in the domiciles in which they operate.

Competitors in our workers’ compensation business include Builders Mutual Insurance Company, Accident Fund Insurance Company of America, W.

Berkley Corporation, American Interstate Insurance Company (AMERISAFE, Inc.), and Amtrust Group.

Casualty Reinsurance

The reinsurance industry is highly competitive.

We expect to compete with major reinsurers, most of which are well-established, have a significant operating history and strong financial strength ratings and have developed long-standing client relationships.

Competitors in this segment include AXA XL, Axis Re, MS Amlin, QBE Re, Renaissance Re, Sompo International Re, Swiss Re, Transatlantic Re, various Lloyd's syndicates, and other carriers that underwrite U.S.

casualty reinsurance.

Competition for our fronting business includes but is not limited to State National (part of Markel), Argo Group, Clear Blue, Spinnaker, Trisura, Red Point, Equity Insurance Company, Worth Insurance, and Amtrust.

Bermuda Insurance Regulation

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In making its determination, the BMA may also have regard to (a) the location where management of the insurer meets to effect policy decisions of the insurer;

(b) the residence of the officers, insurance managers or employees of the insurer;

(b) the residence of the officers, insurance managers

or employees of the insurer;

and (c) the residence of one or more directors of the insurer in Bermuda.

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The Insurance Act prescribes rules for the preparation and substance of statutory financial statements (which include, in statutory form, a balance sheet, an income statement, a statement of capital and surplus and notes thereto).

The statutory

financial statements include detailed information and analysis regarding premiums, claims, reinsurance and investments of the insurer.

The statutory financial statements include detailed information and analysis regarding premiums, claims, reinsurance and investments of the insurer.

The insurer’s annual GAAP financial statements, and the auditor’s report thereon, and the statutory financial statements are required to be filed with the BMA within four months from the end of the relevant financial year (unless specifically extended with the approval of the BMA).

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In addition, each year the insurer is required to file with the BMA a capital and solvency return along with its annual statutory financial return.

The prescribed form of capital and solvency return comprises the insurer’s Bermuda Solvency Capital Requirement (“BSCR”) model or an approved internal capital model in lieu thereof, together with such schedules as prescribed by the Insurance (Prudential Standards) (Class 4 and 3B Solvency Requirement) Rules 2008 for Class 3B insurers, as amended from time to time.

The prescribed form of capital and solvency return comprises the insurer’s Bermuda Solvency Capital Requirement (“BSCR”) model or an approved internal capital model in lieu thereof, together with such schedules as prescribed by the Insurance (Prudential Standards) (Class 4 and Class 3B Solvency Requirement) Rules 2008 for Class 3B insurers, as amended from time to time.

Neither the statutory financial return nor the capital and solvency return is available for public inspection.

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A Class 3B insurer, not otherwise subject to group supervision, is required to prepare and file quarterly financial returns with the BMA on or before the last day of the months of May, August and November of each year.

The quarterly financial returns consist of (i) quarterly unaudited financial statements for each financial quarter (which must minimally include a balance sheet and income statement and must also be recent and not reflect a financial position that exceeds two months), (ii) a list and details of material intra-group transactions that the Class 3B insurer is a party to and the Class 3B insurer’s risk concentrations that have materialized since the most recent quarterly or annual financial returns, details surrounding all intra-group reinsurance and retrocession arrangements and other intra-group risk transfer insurance business arrangements that have materialized since the most recent quarterly or annual financial returns, (iii) details of the ten largest exposures to unaffiliated counterparties and any other unaffiliated counterparty exposures exceeding 10% of the Class 3B insurer’s statutory capital and surplus, (iv) enhanced capital requirement ratio, (v) commercial insurers solvency self-assessment, (vi) total quoted bonds and

unquoted bonds by BSCR rating and (vii) details of the catastrophe event that occurred during the reporting period (if applicable).

The quarterly financial returns consist of (i) quarterly unaudited financial statements for each financial quarter (which must minimally include a balance sheet and income statement and must also be recent and not reflect a financial position that exceeds two months), (ii) details of intra-group transactions that the Class 3B insurer is a party to and the Class 3B insurer's risk concentrations, including details of material intra-group transactions that have materialized since the most recent quarterly or annual financial returns, details surrounding all intra-group reinsurance and retrocession arrangements and other intra-group risk transfer insurance business arrangements that have materialized since the most recent quarterly or annual financial returns, and details of the ten largest exposures to unaffiliated counterparties and any other unaffiliated counterparty exposures exceeding 10% of the Class 3B insurer’s statutory capital and surplus, (iii) enhanced capital requirement ratio for the financial quarter, (iv) total quoted bonds and unquoted bonds allocated by BSCR rating for the financial quarter and (v) details of any qualifying catastrophic event that occurred during the financial quarter.

Public Disclosures

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The Insurance Code of Conduct (the “Insurance Code”) prescribes the duties, standards, procedures and sound business principles with which all insurers registered under the Insurance Act must comply.

The BMA will assess an insurer’s compliance with the Insurance Code in a proportional manner relative to the nature, scale and complexity of its business.

The BMA will assess an insurer’s

compliance with the Insurance Code in a proportional manner relative to the nature, scale and complexity of its business.

Failure to comply with the requirements of the Insurance Code will be taken into account by the BMA in determining whether an insurer is conducting its business in a sound and prudent manner as prescribed by the Insurance Act, may result in the BMA exercising its powers of intervention and investigation (see below) and will be a factor in calculating the operational risk charge under the insurer’s BSCR or approved internal model.

At the end of 2021, the BMA released a consultation paper on the revisions to the Insurance Code and following a review of the public consultation feedback, the revisions to the Insurance Code were finalized and became effective on August 31, 2022 (with a six-month transition period for conduct-related additions and a 12-month transition period to comply with the new provisions/amendments of all other sections of the document).

The most significant changes to the Insurance Code relate to corporate governance, including introducing a requirement that an insurer's board include an appropriate number of non-executive directors and independent directors without executive responsibility.

The BMA clarified that the revisions would not create a requirement for independent non-executive directors for all boards, but that subsidiary boards of a Bermuda group would determine the appropriate number of non-executive directors required for the entity based on the nature, scale and complexity of the insurer's operations.

The Insurance Code was also amended to require board members to review and assess the fitness and propriety of board members, committees, and chief and senior executives at least every three (3) years and/or upon a material change to the business activities or risk profile.

Other changes include a requirement for insurers to demonstrate the economic impact of risk mitigation techniques originating from reinsurance contracts and the addition of "Sustainability Risk" as a material risk that should be considered in risk management strategies.

Cyber Risk Code of Conduct

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While it is acknowledged that some registrants will use a third party to provide technology services and that they may outsource their IT resources (for example, to an insurance manager where applicable), when so outsourced, the overall responsibility for the outsourced functions will remain with the registrant’s board of directors.

Failure to comply with the requirements of the Cyber Risk Code will be taken into account by the BMA in determining whether a registrant is

conducting its business in a sound and prudent manner as prescribed by the Insurance Act and may result in the BMA exercising its powers of intervention and investigation (see below).

Failure to comply with the requirements of the Cyber Risk Code will be taken into account by the BMA in determining whether a registrant is conducting its business in a sound and prudent manner as prescribed by the Insurance Act and may result in the BMA exercising its powers of intervention and investigation (see below).

Restrictions on Dividends and Distributions

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As the shares of JRG Re’s parent company are traded on a recognized stock exchange, a person who becomes a 10%, 20%, 33% or 50% shareholder controller of the insurer, shall, within 45 days, notify the BMA in writing that he or she has become such a controller.

held by him or her will have reached or has fallen below 10%, 20%, 33% or 50% as the case may be, not later than 45 days after such disposal.

In addition, a person who is a shareholder controller of JRG Re must serve on the BMA a notice in writing that he or she has reduced or disposed of his or her holding in the insurer where the proportion of voting rights in the insurer held by him or her will have reached or has fallen below 10%, 20%, 33% or 50% as the case may be, not later than 45 days after such disposal.

Any person who contravenes the Insurance Act by failing to give notice or knowingly becomes a controller of any description before the required 45 days has elapsed is guilty of an offence and liable to a fine of $25,000 on summary conviction.

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A Cyber Reporting Event includes any act that results in the unauthorized access to, disruption, or misuse of electronic systems or information stored on such systems of an insurer, including breach of security leading to the loss or unlawful destruction or unauthorized disclosure of or access to such systems or information where there is a likelihood of an adverse impact to policyholders, clients or the insurer's insurance business, or an event that has occurred for which notice is required to be provided to a regulatory body or government agency.

Notification of Other Events

Every insurer is required to forthwith notify the BMA on it coming to the knowledge of the insurer, or where insurer has reason to believe that the insurer has failed to comply with a condition imposed upon it by the BMA or that the insurer, or a shareholder controller or officer of the insurer is involved in any criminal proceedings whether in Bermuda or abroad.

Supervision, Investigation, Intervention and Disclosure

The BMA may, by notice in writing served on a registered person or a designated insurer, require the registered person or designated insurer to provide such information and/or documentation as the BMA may reasonably require with respect to matters that are likely to be material to the performance of its supervisory functions under the Insurance Act.

In addition, it may

require such person’s auditor, underwriter, accountant or any other person with relevant professional skill of such registered person or designated insurer to prepare a report on any aspect pertaining thereto.

In addition, it may require such person’s auditor, underwriter, accountant or any other person with relevant professional skill of such registered person or designated insurer to prepare a report on any aspect pertaining thereto.

In the case of a report, the person so appointed shall immediately give the BMA written notice of any fact or matter of which he becomes aware or which indicates to him that any condition attaching to his registration under the Insurance Act is not or has not, or may not be or may not have, been fulfilled and that such matters are likely to be material to the performance of its functions under the Insurance Act.

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In connection therewith, the BMA may require every person who is or was a controller, officer, employee, agent, banker, auditor, accountant, barrister and attorney or insurance manager to make a report and produce such documents in his care, custody and control and to attend before the BMA to answer questions relevant to the BMA’s investigation and to take such actions as the BMA may direct.

The BMA may also enter any premises for the purposes of carrying out its investigation and may petition the court for a warrant if it believes a person has failed to comply with a notice served on him, there are reasonable grounds for suspecting the completeness of any information or documentation produced in response to such notice, or that its directions will not be complied with or that any relevant documents would be removed, tampered with or destroyed.

The BMA may also enter any premises for the purposes

of carrying out its investigation and may petition the court for a warrant if it believes a person has failed to comply with a notice served on him, there are reasonable grounds for suspecting the completeness of any information or documentation produced in response to such notice, or that its directions will not be complied with or that any relevant documents would be removed, tampered with or destroyed.

If it appears to the BMA that the business of the registered insurer is being conducted in a way that there is a significant risk of the insurer becoming insolvent or being unable to meet its obligations to policyholders, or that the insurer is in breach of the Insurance Act or any conditions imposed upon its registration, or the minimum criteria stipulated in the Insurance Act is not or has not been fulfilled in respect of a registered insurer, or that a person has become a controller without providing the BMA with the appropriate notice or in contravention of a notice of objection, or the registered insurer is in breach of its ECR, or that a designated insurer is in breach of any provision of the Insurance Act or the regulations or rules applicable to it, the BMA may issue such directions as it deems desirable for safeguarding the interests of policyholders or potential policyholders of the insurer or the insurance group.

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Certain Other Bermuda Law Considerations

Corporate Bermuda Law Considerations

Bermuda Corporate Law Considerations

Although James River Group Holdings, Ltd.

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We will take no notice of any trust applicable to any of our common shares whether or not we have notice of such trust.

Each of James River Group Holdings, Ltd., Carolina Re and JRG Re is incorporated in Bermuda as an “exempted company.” Under Bermuda law, exempted companies are companies formed for the purpose of conducting business outside Bermuda from a principal place of business in Bermuda.

Each of James River Group Holdings, Ltd.

and JRG Re is incorporated in Bermuda as an “exempted company.” Under Bermuda law, exempted companies are companies formed for the purpose of conducting business outside Bermuda from a principal place of business in Bermuda.

As a result, they are exempt from Bermuda laws restricting the percentage of share capital that may be held by non-Bermudians.

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(i) the acquisition or holding of land in Bermuda except that required for their business and held by way of lease or tenancy for a term not exceeding 50 years or, with the consent of the Minister of Finance granted in his discretion by way of lease or tenancy for a term not exceeding 21 years in order to provide accommodation or recreational facilities for its officers and employees, (ii) the taking of mortgages on land in Bermuda to secure an amount in excess of B.D.$50,000 without the consent of the Minister of Finance, (iii) the acquisition of any bonds or debentures secured by any land in Bermuda, other than certain types of Bermuda government securities or securities issued by Bermuda public authorities, or (iv) the carrying on of business of any kind in Bermuda, except in furtherance of business carried on outside Bermuda or under license granted by the Minister of Finance.

Generally, it is not permitted without a special license granted by the Minister of Finance to insure Bermuda domestic risks or risks of persons of, in or based in Bermuda.

Generally, it is not permitted without a special license granted by the Minister of Finance to insure

Bermuda domestic risks or risks of persons of, in or based in Bermuda.

JRG Re is a licensed insurer in Bermuda, and so it may carry on activities from Bermuda that are related to and in support of its insurance business.

Each of James River Group Holdings, Ltd., Carolina Re and JRG Re must comply with the provisions of the Companies Act regulating the payment of dividends and making distributions from contributed surplus.

Each of James River Group Holdings, Ltd.

and JRG Re must comply with the provisions of the Companies Act regulating the payment of dividends and making distributions from contributed surplus.

A company may not declare or pay a dividend, or make a distribution out of contributed surplus, if there are reasonable grounds for believing that (i) it is, or would after the payment be, unable to pay its liabilities as they become due, or (ii) the realizable value of the assets would thereby be less than its liabilities.

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Should no Bermudian (or spouse of a Bermudian or holder of a permanent resident’s certificate) meet the minimum standards as stipulated in the advertisements, the employer may then apply for a standard work permit for the non-Bermudian.

Where such persons apply, employers must complete a Recruitment Disclosure Form, within the Standard Work Permit Application Form, and provide a summary of all applicants that are Bermudian, the spouse of the Bermudian or the holder of a permanent resident's certificate, including their qualifications.

The Department of Immigration will compare the qualifications and experience of any Bermudian applicants (or spouse of a Bermudian or holder of a permanent resident’s certificate) to that stipulated in the advertisements and to the non-Bermudian to be satisfied that the role could not have been filled by a Bermudian (or spouse of a Bermudian or holder of a permanent resident’s certificate).

In addition to the advertising, there are other documents that are required prior to the Department of Immigration making its decision.

If the position for which the standard work permit is being applied is that of a Chief Executive Officer or other chief officer post, the Minister of Economy and Labour allows an automatic waiver from the requirement to advertise the position and on occasion may waive the requirement to advertise for other senior executive positions upon request.

If an employer wishes to change an employee’s job title, provided that the job description, duties, remuneration and benefits remain unchanged, the employer does not need to advertise or obtain the permission of the Minister of Economy and Labour to do this, but it must inform the Department of Immigration and pay the necessary fee after the change has occurred.

If the position for which the standard work permit is being applied is that of a Chief Executive Officer or other chief officer post, the Minister of Economy and Labour allows an automatic waiver from the requirement to advertise the position and on occasion, after consideration, may waive the requirement to advertise for other senior executive positions upon request.

If an employer wishes to change an employee’s job title, provided that the job description, duties, remuneration and benefits remain unchanged, the employer does not need to advertise or obtain the permission of the Minister of Economy and Labour to do this, but it must inform the Department of Immigration by letter, including the new Statement of Employment, and pay the necessary fee before or after the change has occurred.

If an employer wishes to promote an employee currently on a work permit from his current job to another within the same business, the permission of the Minister of Economy and Labour must first be obtained.

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In general, the laws and regulations applicable to our domestic insurance subsidiaries limit the aggregate amount of dividends or other distributions that they may declare or pay within any 12 month period without advance regulatory approval.

In Ohio, the domiciliary state of James River Insurance and Falls Lake National Insurance Company (“Falls Lake National”), the limitation is the greater of statutory net income for the preceding calendar year or 10% of the statutory surplus at the end of the preceding calendar year, provided that such dividends may only be paid out of the earned surplus of each of the companies without obtaining regulatory approvals.

In Ohio, the domiciliary state of James River Insurance, James River Casualty and Falls Lake National Insurance Company (“Falls Lake National”), the limitation is the greater of statutory net income for the preceding calendar year or 10% of the statutory surplus at the end of the preceding calendar year, provided that such dividends may only be paid out of the earned surplus of each of the companies without obtaining regulatory approvals.

In North Carolina, the domiciliary state of Stonewood Insurance, this limitation is the greater of statutory net income excluding realized capital gains for the preceding calendar year or 10% of the statutory surplus at the end of the preceding calendar year, provided that such dividends may only be paid out of unassigned surplus without obtaining regulatory approval.

In Virginia, the domiciliary state of James River Casualty Company, this limitation is the greater of statutory net income excluding realized capital gains of the preceding calendar year or 10% of the statutory surplus at the end of the preceding calendar year, provided that such dividends may only be paid out of unassigned surplus without obtaining regulatory approval.

In California, the domiciliary state of Falls Lake Fire and Casualty Company, this limitation is the greater of statutory net income for the preceding calendar year or 10% of the statutory surplus at the end of the preceding calendar year, provided that such dividends may only be paid out of unassigned surplus without obtaining regulatory approval.

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In 2012, the NAIC adopted significant changes to the insurance holding company act and regulations (the “NAIC Amendments”).

The NAIC Amendments, when adopted by the various states, are designed to

respond to perceived gaps in the regulation of insurance holding company systems in the United States.

The NAIC Amendments, when adopted by the various states, are designed to respond to perceived gaps in the regulation of insurance holding company systems in the United States.

One of the major changes is a requirement that an insurance holding company system’s ultimate controlling person submit annually to its lead state insurance regulator an “enterprise risk report” that identifies activities, circumstances or events involving one or more affiliates of an insurer that, if not remedied properly, are likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole.

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The NAIC Amendments must be adopted by a state legislature and such state’s insurance regulator in order to be effective in that state.

Each of California, North Carolina, Ohio, and Virginia, the states in which our U.S.

Each of California, North Carolina, and Ohio, the states in which our U.S.

insurance subsidiaries are domiciled, include this enterprise risk report.

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The ORSA Model Act must be adopted by a state legislature in order to be effective in that state.

Each of California, North Carolina, Ohio, and Virginia, the states in which our U.S.

Each of California, North Carolina, and Ohio, the states in which our U.S.

insurance subsidiaries are domiciled, adopted and require an ORSA filing.

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The following states have either adopted the NAIC Insurance Data Security Model Law or similar laws that govern the cybersecurity and data protection practices of insurers, insurance agents, and other licensed entities registered under state insurance laws:

Alabama, Alaska, California, Connecticut, Delaware, Hawaii, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, New Hampshire, New York,

North Dakota, Ohio, South Carolina, Tennessee, Vermont, Virginia and Wisconsin.

Alabama, Alaska, California, Connecticut, Delaware, Hawaii, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, New Hampshire, New York, North Dakota, Ohio, Pennsylvania, South Carolina, Tennessee, Vermont, Virginia and Wisconsin.

We continue to monitor whether the other states in which we conduct business adopt the NAIC’s Insurance Data Security Model Law.

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On December 20, 2019, the Terrorism Risk Insurance Act of 2002 and its successors, the Terrorism Risk Insurance Extension Act of 2005, the Terrorism Risk Insurance Program Reauthorization Act of 2007, and the Terrorism Risk Insurance Program Reauthorization Act of 2015 (collectively, the “Terrorism Acts”), were extended through December 31, 2027.

Under the Terrorism Acts, commercial property and casualty insurers, in exchange for making terrorism insurance available, may be entitled to be reimbursed by the federal government for a portion of their aggregate losses.

Under the Terrorism Acts, commercial property and casualty insurers, in exchange for making terrorism insurance available, may be

entitled to be reimbursed by the federal government for a portion of their aggregate losses.

As required by the Terrorism Acts, we offer policyholders in specific lines of commercial insurance the option to elect terrorism coverage.

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We believe that by understanding and leveraging the different dimensions of diversity in our workforce, we drive empowerment, collaboration and innovation needed to be a leader in our industry.

As of December 31, 2022, we had 639 employees located in the United States and Bermuda, all classified as full-time.

Of that population, 56% were female and 44% were male.

As of December 31, 2023, we had 649 employees located in the United States and Bermuda, all but two classified as full-time.

Of that population, 52% were female, 43% were male, and 5% did not specify their gender.

Among the 97% of our employees who chose to disclose their race and ethnicity, approximately 12% identified as Black or African American, 4% as Hispanic or Latino, 6% as Asian, 1% as two or more races, less than 1% as Native Hawaiian or other Pacific Islander, and less than 1% as American Indian or Alaska Native.

Over the last year, our Diversity, Equity and Inclusion (DEI) committee has made significant progress in bringing additional awareness and focus to DEI topics throughout the company and in the locations where we operate.

Over the last year, our Diversity, Equity and Inclusion (DEI) committee continued to make progress in bringing additional awareness and focus to DEI topics throughout the company and in the locations where we operate.

The committee is both diverse and made up of employees from all segments, levels and office locations.

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We recognize the mutual benefits for our company and our employees to further their formal education and professional development.

Our Employee Development and Education Assistance program provides financial assistance for courses,

development programs and professional affiliations.

Our Employee Development and Education Assistance program provides financial assistance for courses, development programs and professional affiliations.

Additionally, employees have access to an online learning management system that hosts courses and modules across a wide range of topics.

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We continue to encourage a hybrid work model, one that offers our employees a flexible work environment that fosters in-person connection and collaboration and best supports our success as a company.

The health and safety of our employees continues to be our highest priority, and therefore we monitor and adjust our in-office safety policies and procedures, as needed, to mitigate the risk of exposure to the COVID-19 virus.

We value the opinions and diverse perspectives of our employees and utilize the feedback that we receive throughout the year to help develop many of our company programs, policies, and benefits.

We conduct an annual engagement survey followed by voluntary focus group sessions to better assess how motivated and engaged our employees are to perform their best each day.

We believe in-office work strengthens our professional relationships and boosts employee training and development opportunities.

We also understand that remote work offers benefits related to individual focus and time management.

Hybrid work allows our company to thrive, balancing employee autonomy and satisfaction while preserving essential team communication and connection.

We understand the critical role acknowledging employee contributions plays in improving morale and promoting a sense of purpose and appreciation.

In 2023, we introduced a new Employee Recognition Program offering multiple channels for employees and managers to highlight each other’s accomplishments, mark service anniversaries, and celebrate life events.

Employees can earn and award points under the program that they can use to purchase gift cards and merchandise or donate to charitable organizations.

We value the opinions and diverse perspectives of our employees and use the feedback we receive throughout the year to help develop many of our company programs, policies, and benefits.

We conduct an annual engagement survey to assess how motivated and engaged our employees are to perform their best each day.

We also host voluntary focus groups to gain more perspective on our annual engagement survey findings and influence our strategy for the upcoming year.

New hire feedback is collected following an employee’s first 30 days of employment, which allows us to reflect upon and improve aspects of our recruitment and onboarding processes.

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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 1. Business