What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-02-29 compared with 2023-02-28 · 607 added, 515 removed, 1985 unchanged (36% of the section changed)

4 unchanged sentences

Based upon this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2023.

Remediated Material Weakness

As previously disclosed, the Company became aware that the unaudited consolidated financial statements for the six months ended June 30, 2023 contained material misstatements related to unrecorded reinstatement premium as more fully described in Note 1 to the condensed consolidated financial statements of the 10-Q/A filed with the SEC on November 14, 2023.

Management of the Company concluded that because the controls to evaluate the accounting and disclosure of the reinstatement premium did not operate effectively, and resulted in the failure to detect the misstatement, the deficiencies were a material weakness in the Company's internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Remedial Actions Implementation

To remediate the material weakness in the Company’s internal control over financial reporting, during the fourth quarter of fiscal year 2023, the Company implemented a remediation plan that included:

(i) additional review procedures within our

accounting department, (ii) additional training of accounting personnel and (iii) enhancing our existing process and internal control documentation and financial statement preparation process, specifically including updates to accounting policies for reinstatement premium, to ensure completion of financial reporting and proper accounting in accordance with U.S.

The implementation of these procedures and controls have remediated the material weakness as of December 31, 2023.

Management’s Annual Report on Internal Control over Financial Reporting

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Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our quarter ended December 31, 2023, except for the implementation of the remediation steps described above, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The effectiveness of any system of controls and procedures is subject to certain limitations, and, as a result, there can be no assurance that our controls and procedures will detect all errors or fraud.

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Number Description

2.1 Stock Purchase Agreement dated November 8, 2023 by and among James River Group Holdings, Ltd.

and Fleming Intermediate Holdings LLC (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed on November 9, 2023, Commission File No.

3.1 Certificate of Incorporation of James River Group Holdings, Ltd.

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

(incorporated by reference to Exhibit 3.6 to the Annual Report on Form 10-K filed on February 28, 2023, Commission File No.

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

1 unchanged sentence

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

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

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

Commission File No.

4.3 Indenture, dated as of May 26, 2004, by and between James River Group, Inc.

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4.12 Guarantee Agreement, dated as of June 15, 2006, by James River Group, Inc., as Guarantor, and Wilmington Trust Company, as Guarantee Trustee, for the benefit of the holders, from time to time, of the capital securities of James River Capital Trust III+

Number Description

4.13 Indenture, dated December 11, 2007, by and between James River Group, Inc.

and Wilmington Trust Company, as Trustee, relating to Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures Due 2037+

Number Description

4.14 Amended and Restated Declaration of Trust, dated December 11, 2007, by and among James River Group, Inc., as Sponsor, Wilmington Trust Company, as Institutional Trustee and Delaware Trustee and the Administrators (as defined therein) and the holders, from time to time, of undivided beneficial interests in James River Capital Trust IV+

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

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

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

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

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

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

4.19 Description of Registrant’s Securities Registered under Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.18 to the Annual Report on Form 10-K filed on February 28, 2023, Commission File No.

10.1 Third Amended and Restated Credit Agreement, dated as of July 7, 2023, by and among James River Group Holdings, Ltd., JRG Reinsurance Company, Ltd., KeyBank National Association, as Administrative Agent and Letter of Credit Issuer, KeyBank National Association and Truist Securities, Inc.

as Joint Book Runners and Joint Lead Arrangers, Truist Bank as Syndication Agent, and the lender parties thereto (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on July 12, 2023, Commission File No.

10.2 Consent Agreement dated November 8, 2023 to the Third Amended and Restated Credit Agreement dated as of July 7, 2023 by and among James River Group Holdings, Ltd.

and JRG Reinsurance Company Ltd., as borrowers, KeyBank National Association (“KeyBank”) as Administrative Agent and Letter of Credit Issuer, KeyBank and Truist Securities, Inc.

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

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

Number Description

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

and JRG Reinsurance Company Ltd.

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

as the borrowers, and BMO Harris Bank N.A., as the lender (incorporated by reference to Exhibit 10.9 of the Annual Report on Form 10-K filed on February 28, 2023, Commission File No.

10.9 Consent Agreement dated November 8, 2023 to the Credit Agreement dated as of August 2, 2017, as amended, by and among James River Group Holdings, Ltd.

and JRG Reinsurance Company Ltd., as borrowers, and BMO Harris Bank N.A., as the lender (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K filed on November 9, 2023, Commission File No.

10.10 Pledge and Security Agreement, dated as of August 2, 2017, by and between JRG Reinsurance Company Ltd., and BMO Harris Bank N.A.

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

Number Description

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

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

10.21 Form of Performance Restricted Share Unit Agreement

10.22 Form of Service-Based Restricted Share Unit Agreement

10.21 Form of Performance Restricted Share Unit Agreement (James River Group Holdings, Ltd.

2014 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K filed on February 28, 2023, Commission File No.

10.22 Form of Service-Based Restricted Share Unit Agreement (James River Group Holdings, Ltd.

2014 Long-Term Incentive Plan) (incorporated by reference to Exhibit 10.22 to the Annual Report on Form 10-K filed on February 28, 2023, Commission File No.

10.23 James River Group Holdings, Ltd.

Short-Term Incentive Plan

Short-Term Incentive Plan (incorporated by reference to Exhibit 10.23 to the Annual Report on Form 10-K filed on February 28, 2023, Commission File No.

10.24 James River Group Holdings, Ltd.

7 unchanged sentences

333-199958, filed with the Commission on November 24, 2014)*

Number Description

10.27 Form of Restricted Share Unit Award Agreement (James River Group Holdings, Ltd., 2014 Non-Employee Director Incentive Plan) (incorporated by reference to Exhibit 10.17 of Amendment No.

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

10.30 First Amendment to Employment Agreement dated October 28, 2020, by and among Frank N.

D’Orazio, James River Group Holdings, Ltd., and its subsidiary James River Group, Inc.

(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 8, 2023, Commission File No.

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

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

Number Description

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

4 unchanged sentences

333-199958, filed with the Commission on November 24, 2014)*

10.34 Employment Agreement, dated September 17, 2018, by and among James River Group, Inc., certain subsidiaries of James River Group, Inc.

and Terry McCafferty, as supplemented by a letter agreement dated October 12, 2018 (incorporated by reference to Exhibit 10.30 to the Annual Report on Form 10-K filed on February 27, 2019, Commission File No.

10.35 Separation and Release Agreement, dated December 26, 2023, by and among James River Group, Inc., certain subsidiaries of James River Group, Inc.

and Terry McCafferty *

10.36 Amended and Restated Employment Agreement, dated June 7, 2023, by and among James River Group, Inc., certain subsidiaries of James River Group, Inc.

and Terry McCafferty (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on June 8, 2023, Commission File No.

10.37 Employment Agreement, dated April 5, 2018, by and among JRG Reinsurance Company, Ltd.

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Commission File No.

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

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

Commission File No.

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

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

97.1 James River Group Holdings, Ltd.

Executive Officer Incentive Compensation Recovery Policy

101.INS Inline XBRL Instance Document

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Crow Principal Accounting Officer February 29, 2024

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

Director, Non-Executive Chairman of the Board February 29, 2024

/s/ Matthew B.

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Gould Director February 29, 2024

/s/ Dennis J.

Langwell Director February 29, 2024

Migliorato Director February 29, 2024

/s/ Michael T.

Oakes Director February 28, 2023

/s/ Patricia H.

Roberts Director February 29, 2024

Director February 28, 2023

JAMES RIVER GROUP HOLDINGS, LTD.

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

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

and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of (loss) income and comprehensive loss, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

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Valuation of reserves for losses and loss adjustment expenses

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

Description of the Matter At December 31, 2023, the Company’s reserve for losses and loss adjustment expenses balance was $3.0 billion, $441.7 million of which is reported within liabilities held for sale.

As described in Notes 1 and 8 of the consolidated financial statements, reserves for losses and loss adjustment expenses reflect the estimated ultimate cost of all incurred unpaid claims including estimates of claims incurred but not reported and loss adjustment expenses as of the balance sheet date.

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

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

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

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

The Company's Reserve Committee utilizes the actuarial results, in addition to other information, in determining management's best estimate of recorded reserves.

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

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

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

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

To test the reserve for losses and loss adjustment expenses, we evaluated the actuarial methods and assumptions used by the Company with the assistance of our actuarial specialists as well as other judgments made by management in determining their best estimate of recorded reserves.

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

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

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

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and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria .

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

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of (loss) income and comprehensive loss, changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement schedules listed in the Index at Item 15(a) and our report dated February 29, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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Other assets 115,418 73,123

Assets held-for-sale (Note 2 - discontinued operations) $ 783,393 $ 1,145,799

Total assets $ 5,317,250 $ 5,137,075

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Other liabilities 174,513 134,604

Liabilities held-for-sale (Note 2 - discontinued operations) 641,497 751,289

Total liabilities 4,637,731 4,438,411

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20,000,000 shares authorized;

150,000 and no shares issued and outstanding

150,000 shares issued and outstanding

144,898 144,898

Shareholders’ equity:

Common Shares – $ 0.0002 par value;

Common Shares – 2023 and 2022:

$ 0.0002 par value;

200,000,000 shares authorized;

2022 and 2021:

37,641,563 and 37,470,237 shares issued and outstanding, respectively

1 unchanged sentence

Retained deficit ( 277,905 ) ( 152,055 )

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

Accumulated other comprehensive loss ( 63,721 ) ( 163,044 )

Total shareholders’ equity 534,621 553,766

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AND SUBSIDIARIES

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

Consolidated Statements of (Loss) Income and Comprehensive Loss

Year Ended December 31,

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Net investment income 84,046 43,188 31,989

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

Net realized and unrealized gains (losses) on investments 10,441 ( 15,720 ) 10,818

Other income 9,517 4,312 4,857

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Amortization of intangible assets 363 363 363

Impairment of intangible assets 2,500 — —

Total expenses 725,095 608,242 717,165

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

Income tax expense (benefit):

Income (loss) from continuing operations before income taxes 86,914 53,272 ( 108,130 )

Income tax expense (benefit) on continuing operations:

Current 31,677 13,787 ( 2,835 )

1 unchanged sentence

25,705 18,414 ( 23,235 )

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

Net income (loss) from continuing operations 61,209 34,858 ( 84,895 )

Discontinued operations (Note 2):

Loss from discontinued operations ( 88,493 ) ( 3,885 ) ( 87,904 )

Loss on held for sale classification of discontinued operations ( 80,400 ) — —

Total loss from discontinued operations ( 168,893 ) ( 3,885 ) ( 87,904 )

Net (loss) income ( 107,684 ) 30,973 ( 172,799 )

Dividends on Series A preferred shares ( 10,500 ) ( 8,750 ) —

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

Other comprehensive (loss) income:

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

Net (loss) income available to common shareholders $ ( 118,184 ) $ 22,223 $ ( 172,799 )

Other comprehensive income (loss):

Net unrealized gains (losses), net of taxes of $ 6,384 in 2023, $( 27,041 ) in 2022, and $( 7,135 ) in 2021

99,323 ( 193,022 ) ( 51,921 )

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

Total comprehensive loss $ ( 8,361 ) $ ( 162,049 ) $ ( 224,720 )

Net income (loss) per common share:

Basic $ 0.59 $ ( 4.94 ) $ 0.16

Diluted $ 0.59 $ ( 4.94 ) $ 0.16

Continuing operations $ 1.35 $ 0.70 $ ( 2.43 )

Discontinued operations $ ( 4.49 ) $ ( 0.11 ) $ ( 2.51 )

$ ( 3.14 ) $ 0.59 $ ( 4.94 )

Continuing operations $ 1.34 $ 0.69 $ ( 2.43 )

Discontinued operations $ ( 4.47 ) $ ( 0.10 ) $ ( 2.51 )

$ ( 3.13 ) $ 0.59 $ ( 4.94 )

Dividend declared per common share $ 0.20 $ 0.20 $ 1.20

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

Net income — — — 4,824 — 4,824

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

Exercise of stock options

113,346 — 1,327 — — 1,327

Vesting of RSUs

111,524 — ( 2,351 ) — — ( 2,351 )

Compensation expense under share incentive plans

— — 7,625 — — 7,625

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

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

Cumulative effect of adoption of ASU No.

2016-13 — — — ( 265 ) — ( 265 )

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

Net loss — — — ( 172,799 ) — ( 172,799 )

16 unchanged sentences

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

Net loss — — — ( 107,684 ) — ( 107,684 )

Other comprehensive income — — — — 99,323 99,323

Vesting of RSUs 171,326 — ( 1,734 ) — — ( 1,734 )

Compensation expense under share incentive plans — — 9,116 — — 9,116

Dividends on Series A preferred shares — — — ( 10,500 ) — ( 10,500 )

Dividends on common shares — — — ( 7,666 ) — ( 7,666 )

Balances at December 31, 2023 37,641,563 $ 7 $ 876,240 $ ( 277,905 ) $ ( 63,721 ) $ 534,621

See accompanying notes.

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Operating activities

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

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

Net (loss) income $ ( 107,684 ) $ 30,973 $ ( 172,799 )

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

Deferred policy acquisition costs ( 73,333 ) ( 79,648 ) ( 75,236 )

1 unchanged sentence

Net realized and unrealized losses (gains) on investments 43,251 28,318 ( 15,564 )

Impairment of intangible assets 2,500 — —

Distributions from equity method investments 43 4,364 2,434

Income from equity method investments ( 4,881 ) ( 2,458 ) ( 918 )

Loss on held-for sale classification of discontinued operations 80,400 — —

Deferred U.S.

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Purchases of property and equipment ( 6,434 ) ( 8,219 ) ( 6,303 )

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

Net cash provided by (used in) investing activities 16,732 ( 328,154 ) 35,823

Financing activities

Senior debt issuances — — 164,000

Senior debt repayments — ( 40,000 ) —

2 unchanged sentences

Issuances of common shares under equity incentive plans — — 1,877

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

Payroll taxes withheld and remitted on net settlement of RSUs ( 1,734 ) ( 1,304 ) ( 3,077 )

Dividends on Series A preferred shares ( 10,500 ) ( 6,125 ) —

Dividends on common shares ( 7,746 ) ( 7,798 ) ( 43,236 )

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

Change in cash, cash equivalents, and restricted cash equivalents ( 15,749 ) ( 730,052 ) ( 383,896 )

Payment of debt issuance costs ( 1,135 ) — —

Net cash (used in) provided by financing activities ( 21,115 ) 89,671 147,671

Change in cash, cash equivalents, and restricted cash equivalents (b) 83,570 ( 15,749 ) ( 730,052 )

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

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Supplemental information

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

federal income taxes paid (refunded), net $ 45,330 $ ( 3,470 ) $ ( 3,932 )

Interest paid $ 30,697 $ 17,425 $ 9,927

8 unchanged sentences

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

(b) includes change in cash and cash equivalents classified as held-for-sale (See Note 2).

See accompanying notes.

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James River Group Holdings, Ltd.

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

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

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

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

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Falls Lake National primarily writes specialty admitted fronting and program business and individual risk workers' compensation insurance.

• JRG Reinsurance Company Ltd.

(“JRG Re”) was formed in 2007 and commenced operations in 2008.

JRG Re, a Bermuda domiciled reinsurer, primarily provides non-catastrophe casualty reinsurance to U.S.

The Company also owns JRG Reinsurance Company Ltd.

(“JRG Re”), a Bermuda domiciled reinsurer, which comprises the remaining operations of the former Casualty Reinsurance segment, and which, prior to the suspension of its underwriting activities in 2023, primarily provided non-catastrophe casualty reinsurance to U.S.

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

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

The sale is expected to close in the first quarter of 2024 and will result in the Company’s disposition of its casualty reinsurance business and related assets.

See Held-for-Sale and Discontinued Operations below and Note 2 for additional disclosure.

Basis of Presentation and Principles of Consolidation

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Intercompany transactions and balances have been eliminated.

Held-for-Sale and Discontinued Operations

The results of operations of a component of the Company are reported in discontinued operations when certain criteria are met as of the date of disposal, or earlier if classified as held-for-sale.

The Company has determined that the definitive agreement to sell JRG Re meets the criteria for JRG Re to be classified as held for sale and that the sale represents a strategic shift that will have a major effect on the Company's operations.

Accordingly, the results of JRG Re's operations have been presented as discontinued operations, and the assets and liabilities of JRG Re have been classified as held-for-sale and segregated for all periods presented in this Annual Report on Form 10-K.

See Note 2 for additional disclosure.

Estimates and Assumptions

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Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

Fixed Maturity and Equity Securities

4 unchanged sentences

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

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

Interest income is recognized as earned, and dividend income is recognized on the ex-dividend date.

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

Measurement of Credit Losses on Financial Instruments on January 1, 2020.

This update changed the impairment model for available-for-sale fixed maturities and requires the Company to determine whether unrealized losses on available-for-sale fixed maturities are due to credit-related factors.

The Company reviews its available-for-sale fixed maturities to determine whether any unrealized losses are due to credit-related factors.

An allowance for credit losses is established for any credit-related impairments, limited to the amount by which fair value is below amortized cost.

Changes in the allowance for credit losses are recognized in earnings and included in n et realized and unrealized gains (losses) on investments .

Unrealized losses that are not credit-related continue to be recognized in other comprehensive income.

Unrealized losses that are not credit-related are recognized in other comprehensive income.

The Company considers the extent to which fair value is below amortized cost in determining whether a credit-related loss exists.

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Bank loan participations are managed by a specialized outside investment manager.

In connection with the adoption of ASU 2016-13, the Company elected the fair value option in accounting for bank loan participations effective January 1, 2020.

Under the fair value option, bank loan participations are measured at fair value, and changes in unrealized gains and losses in bank loan participations are reported in our income statement as net realized and unrealized gains (losses) on investments.

The Company has elected the fair value option to account for bank loan participations.

Under the fair value option, bank loan participations are measured at fair value, and changes in unrealized gains and losses in bank loan participations are reported in our Consolidated Statements of (Loss) Income and Comprehensive Loss as net realized and unrealized gains (losses) on investments.

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

10 unchanged sentences

Equity interests in various limited liability companies (“LLCs”) and limited partnerships are accounted for under the equity method, as the Company has determined that the equity method best reflects its economic interest in the underlying equity investment.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

Short-Term Investments

3 unchanged sentences

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Restricted Cash Equivalents

5 unchanged sentences

Policies are accounted for on an individual basis, with no aggregation by counterparty.

Assumed Reinsurance Premiums

Assumed reinsurance written premiums include amounts reported by brokers and ceding companies, supplemented by the Company’s own estimates of premiums when reports have not been received.

Premiums on the Company’s excess of loss and pro rata reinsurance contracts are estimated when the business is underwritten.

For excess of loss contracts, the deposit premium, as defined in the contract, is generally recorded as an estimate of premiums written at the inception date of the treaty.

Estimates of premiums written under pro rata contracts are recorded in the period in which the underlying risks are expected to begin and are based on information provided by the brokers and the ceding companies.

Reinsurance premium estimates are reviewed by management periodically.

Any adjustment to these estimates is recorded in the period in which it becomes known.

Reinsurance premiums assumed are earned over the terms of the underlying policies or reinsurance contracts.

Contracts and policies written on a “losses occurring” basis cover claims that may occur during the term of the contract or policy, which is typically 12 months.

Accordingly, the premium is earned evenly over the term.

Contracts which are written on a “risks attaching” basis cover claims which attach to the underlying insurance policies written during the terms of such contracts.

Premiums earned on such contracts usually extend beyond the original term of the reinsurance contract, typically resulting in recognition of premiums earned over a 24-month period in proportion to the level of underlying exposure.

Contracts are accounted for on an individual basis, with no aggregation by counterparty.

Premiums Receivable and Agents’ Balances, Net

3 unchanged sentences

The allowance for credit losses was $ 17.9 million and $ 16.2 million at December 31, 2023 and 2022, respectively.

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

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

Credit loss expense was $ 2.8 million for the year ended December 31, 2023, $ 1.1 million for the year ended December 31, 2022, and $ 9.4 million for the year ended December 31, 2021 ($ 7.1 million of which was deducted from amounts due to our reinsurers).

Receivables written off against the allowance for credit losses totaled $ 1.2 million for the year ended December 31, 2023, $ 1.5 million for the year ended December 31, 2022, and $ 1.1 million for the year ended December 31, 2021.

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

1 unchanged sentence

Costs which are incrementally or directly related to the successful acquisition of new or renewal insurance business are deferred.

These deferred costs are primarily commissions to agents, ceding commissions paid on reinsurance assumed, premium taxes, and the portion of underwriting fixed compensation and payroll related fringe benefits directly related to an insurance contract that has been acquired, net of ceding commissions related to reinsurance ceded.

These deferred costs are primarily commissions to agents, premium taxes, and the portion of underwriting fixed compensation and payroll related fringe benefits directly related to an insurance contract that has been acquired, net of ceding commissions related to reinsurance ceded.

Amortization of such policy acquisition costs is charged to expense in proportion to premium earned over the estimated policy life.

2 unchanged sentences

Reinsurance and Adjustable Features of Insurance and Reinsurance Contracts

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

The Company enters into ceded reinsurance contracts to limit its

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

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

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

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

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

3 unchanged sentences

The allowance for credit losses on reinsurance recoverables at December 31, 2023 and 2022 was $ 660,000 and $ 580,000 , respectively.

Other amounts payable to insurance companies and reinsurers or receivable from insurance companies and reinsurers are netted where the right of offset exists.

Other amounts payable to reinsurers or receivable from reinsurers are netted where the right of offset exists.

The Company receives ceding commissions in connection with certain ceded reinsurance.

The ceding commissions are recorded as a reduction of other operating expenses.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

Certain reinsurance contracts include provisions that adjust premiums or acquisition expenses based upon the loss experience under the contracts.

25 unchanged sentences

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Intangible Assets, Net

7 unchanged sentences

The Company evaluates intangible assets with definite lives for impairment when impairment indicators are noted.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

Impairment of Long-Lived Assets

1 unchanged sentence

If indicators of impairment are present, fair value is calculated using estimated future cash flows expected to be generated from the use of those assets.

In the fourth quarter of 2023, the Company determined that the sustained decrease in the share price of the Company’s common stock was an indication of impairment, and accordingly, the Company performed impairment testing on its goodwill and other intangible assets using a December 31, 2023 valuation date.

As a result of this testing, the Company concluded that no impairment of the intangible assets had occurred.

An impairment loss is recognized only if the carrying amount of a long-lived asset or asset group is not recoverable and exceeds its fair value.

10 unchanged sentences

Those estimates are subject to the effects of trends in loss severity and frequency.

The Company utilizes various actuarially-accepted reserving methodologies in determining the continuum of expected outcomes for its reserves.

The Company utilizes various actuarially-accepted reserving methodologies in determining expected outcomes for its reserves.

These methodologies utilize various inputs, including management’s initial expected loss ratio (the ratio of losses and loss adjustment expenses incurred to net earned premiums), expected reporting patterns and payment patterns for losses and loss adjustment expenses (based on insurance industry data and the Company’s own experience), and the Company’s actual paid and reported losses and loss adjustment expenses.

1 unchanged sentence

Management uses this information and its judgment to make decisions on the final recorded reserve for losses and loss adjustment expenses.

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

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

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

4 unchanged sentences

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

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

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

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

Specifically, the Company’s actual ultimate loss ratio could differ from management’s initial expected loss ratio and/or the Company’s actual reporting patterns for losses could differ from the expected reporting patterns.

Accordingly, the ultimate settlement of losses and the related loss adjustment expenses may vary significantly from the estimates included in the Company’s consolidated financial statements.

These estimates are reviewed

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2023, 2022, and 2021

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

Accordingly, the ultimate settlement of losses and the related loss adjustment expenses may vary significantly from the estimates included in the Company’s consolidated financial statements.

These estimates are reviewed continually by management and are adjusted as necessary as experience develops or new information becomes known;

continually by management and are adjusted as necessary as experience develops or new information becomes known;

such adjustments are included in current operations.

1 unchanged sentence

The Company expenses the fair value of share equity awards over the vesting period of the award on a straight-line basis.

Compensation cost for performance restricted share units (“PRSU”) is based upon the probable outcome of performance conditions.

The Black-Scholes-Merton option pricing model is used to value the options granted (see Note 14).

1 unchanged sentence

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

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

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

Variable Interest Entities

8 unchanged sentences

Earnings (Loss) Per Share

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

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

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

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

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

7 unchanged sentences

(in thousands, except share and per share amounts)

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

Net income (loss) from continuing operations $ 61,209 $ 34,858 $ ( 84,895 )

Dividends on Series A preferred shares ( 10,500 ) ( 8,750 ) —

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

Income (loss) from continuing operations available to common shareholders $ 50,709 $ 26,108 $ ( 84,895 )

Loss from discontinued operations ( 168,893 ) ( 3,885 ) ( 87,904 )

Net (loss) income available to common shareholders $ ( 118,184 ) $ 22,223 $ ( 172,799 )

Weighted average common shares outstanding:

3 unchanged sentences

Net income (loss) per common share:

Basic $ 0.59 $ ( 4.94 ) $ 0.16

Dilutive potential common shares — — —

Diluted $ 0.59 $ ( 4.94 ) $ 0.16

Continuing operations $ 1.35 $ 0.70 $ ( 2.43 )

Discontinued operations $ ( 4.49 ) $ ( 0.11 ) $ ( 2.51 )

$ ( 3.14 ) $ 0.59 $ ( 4.94 )

Continuing operations $ 1.34 $ 0.69 $ ( 2.43 )

Discontinued operations $ ( 4.47 ) $ ( 0.10 ) $ ( 2.51 )

$ ( 3.13 ) $ 0.59 $ ( 4.94 )

For the years ended December 31, 2023, 2022, and 2021, potential common shares of 5,722,915 , 4,728,461 , and 95,219 , respectively, were excluded from the calculation of diluted earnings (loss) per common share as their effects were anti-dilutive.

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

Adopted Accounting Standards

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

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

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

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

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

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

No accounting standards were adopted during the year ended December 31, 2023 that had a material impact on our financial statements.

Prospective Accounting Standards

There are no prospective accounting standards which are expected to have a material impact on our financial statements subsequent to December 31, 2023 .

Discontinued Operations

On November 8, 2023, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Fleming Intermediate Holdings LLC, a Cayman Islands limited liability company (the “Buyer”).

Pursuant to the Stock Purchase Agreement, and on the terms and subject to the conditions therein, the Buyer agreed to purchase from the Company all of the common shares of JRG Re (the “Transaction”).

JRG Re comprises the remaining operations of the former Casualty Reinsurance segment, and the Transaction, which is expected to close in the first quarter of 2024, will result in the Company’s disposition of its casualty reinsurance business and related assets.

Total consideration to the Company for the sale of JRG Re includes (A) $ 277 million (the “Purchase Price”), which is comprised of (i) $ 138 million payable by the Buyer to the Company on the closing date in cash, subject to final closing adjustments based on changes in JRG Re’s adjusted net worth between March 31, 2023 and the closing date, and (ii) a $ 139 million dividend or return of capital or surplus by JRG Re to the Company prior to the closing date, which dividend or return of capital or surplus is subject to the availability of unencumbered assets on the closing date, and (B) $ 2.5 million to be

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2023, 2022, and 2021

paid by the Buyer to the Company in the event that certain conditions outlined in the Stock Purchase Agreement are met on the date that is nine months following the closing date.

The Purchase Price is subject to adjustment based on changes in JRG Re’s adjusted net worth between March 31, 2023 and the closing date.

The Company has determined that the sale of JRG Re meets the criteria to be classified as held for sale and that the sale represents a strategic shift that will have a major effect on our operations.

Accordingly, the results of JRG Re's operations have been presented as discontinued operations, and the assets and liabilities of JRG Re have been classified as held for sale and segregated for all periods presented in this Annual Report on Form 10-K.

The $ 139 million pre-closing dividend includes the forgiveness of $ 133.2 million owed from JRGH to JRG Re and $ 5.8 million to be paid in cash to JRGH.

In the fourth quarter of 2023, after giving effect to the pre-closing dividend, we recorded an estimated loss on sale of $ 80.4 million to write down the carrying value of JRG Re to its estimated fair value based upon the estimated sales price of the transaction less costs to sell and other adjustments in accordance with the Stock Purchase Agreement.

The $ 5.8 million cash portion of the pre-closing dividend is included in other liabilities presented below.

The Company also recognized losses of $ 53.2 million for the year ended December 31, 2023 associated with JRG Re's fixed maturity securities as the Company no longer has the intent or ability to hold securities in an unrealized loss position until a recovery of their fair value could occur.

The losses are included in net realized and unrealized (losses) gains on investments in the operating results presented below.

JRG Re's assets and liabilities held for sale were comprised of the following:

(in thousands)

Invested assets:

Fixed maturity securities, at fair value $ 532,242 $ 612,114

Equity securities, at fair value 2,779 3,472

Bank loan participations, at fair value — 100,710

Short-term investments — 12,461

Total invested assets 535,021 728,757

Cash and cash equivalents 13,202 13,964

Accrued investment income 3,589 4,650

Premiums receivable and agents’ balances, net 68,441 100,581

Reinsurance recoverable on unpaid and paid losses, net 234,615 260,496

Prepaid reinsurance premiums — 4,723

Deferred policy acquisition costs 4,986 26,766

Write down of JRG Re to fair value less cost to sell ( 80,400 ) —

Other assets 3,939 5,862

Assets held for sale $ 783,393 $ 1,145,799

Reserve for losses and loss adjustment expenses $ 441,666 $ 428,032

Unearned premiums 17,223 97,820

Funds held 137,796 213,593

Deferred reinsurance gain 33,167 4,349

Accrued expenses 1,955 2,685

Other liabilities 9,690 4,810

Liabilities held for sale $ 641,497 $ 751,289

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

The operating results of JRG Re reported in discontinued operations were as follows:

Year Ended December 31,

2023 2022 2021

(in thousands)

Gross written premiums $ 17,357 $ 85,208 $ 182,081

Ceded written premiums 2,178 ( 2,175 ) ( 22,886 )

Net written premiums 19,535 83,033 159,195

Change in net unearned premiums 75,874 53,394 ( 24,972 )

Net earned premiums 95,409 136,427 134,223

Net investment income 23,038 27,923 24,876

Net realized and unrealized (losses) gains on investments ( 53,693 ) ( 12,598 ) 4,746

Other income — 430 —

Total revenues 64,754 152,182 163,845

Losses and loss adjustment expenses 120,294 104,172 220,178

Other operating expenses 27,983 42,987 31,571

Other expenses 1,402 5,202 —

Interest expense 3,568 3,706 —

Total expenses 153,247 156,067 251,749

Loss from discontinued operations ( 88,493 ) ( 3,885 ) ( 87,904 )

Loss on held for sale classification of discontinued operations ( 80,400 ) — —

Total loss from discontinued operations ( 168,893 ) ( 3,885 ) ( 87,904 )

Cash flows from discontinued operations included in the consolidated statements of cash flows were as follows:

Year Ended December 31,

2023 2022 2021

(in thousands)

Net cash used in operating activities of discontinued operations $ ( 115,907 ) $ ( 25,122 ) $ ( 21,241 )

Net cash provided by investing activities of discontinued operations 115,145 8,497 27,680

Net cash (used in) provided by discontinued operations $ ( 762 ) $ ( 16,625 ) $ 6,439

Interest paid by discontinued operations $ 3,951 $ 2,578 $ —

JRG Re Commitments and Contingent Liabilities

JRG Re has entered into three letter of credit facilities with banks as security to third-party reinsureds on reinsurance assumed by JRG Re.

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

Under a $ 75.0 million facility, $ 4.7 million of letters of credit were issued through December 31, 2023 which were secured by deposits of $ 3.2 million.

Under the 2013 Facility, $ 42.7 million of letters of credit were issued through December 31, 2023 which were secured by deposits of $ 51.1 million.

Under the 2017 Facility (as defined in Note 10), $ 25.5 million of letters of credit were issued through December 31, 2023 which were secured by deposits of $ 35.6 million.

JRG Re has also established trust accounts to secure its obligations to selected reinsureds.

The total amount deposited in the trust accounts for the benefit of third-party reinsureds was $ 444.8 million at December 31, 2023.

Casualty Re Loss Portfolio Transfer

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

(“FRL”) under which FRL reinsures the majority of JRG Re's reserves.

Under the terms of the transaction, which closed on March 31, 2022 (the “Retrocession Closing Date”), JRG Re (a) ceded to FRL all existing

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

and future claims for losses arising under certain casualty reinsurance agreements with underlying insurance companies with treaty inception dates ranging from 2011 to 2020 (the “Subject Business”), in each case net of third-party reinsurance and other recoveries, up to an aggregate limit of $ 400.0 million;

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

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

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

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

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

At December 31, 2023, the balance of the Funds Withheld Account was $ 137.8 million and reinsurance recoverables from FRL under the Casualty Re LPT were $ 221.7 million.

Retroactive Reinsurance Accounting

The Company periodically reevaluates the remaining reserves subject to the Casualty Re LPT.

For the years ended December 31, 2023 and 2022, due to adverse paid and reported loss trends, JRG Re recognized adverse prior year development of $ 52.9 million and $ 6.1 million, respectively, on the reserves subject to the Casualty Re LPT, resulting in corresponding additional amounts ceded under the loss portfolio transfer.

The Casualty Re LPT is in a gain position as the cumulative amounts ceded under the loss portfolio transfer exceeds the consideration paid, requiring the application of retroactive reinsurance accounting under GAAP.

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

Over the life of the contract, we would expect no economic impact to JRG Re as long as any additional losses are within the limit of the loss portfolio transfer and the counterparty performs under the contract.

In periods where JRG Re recognizes a change in the estimate of the reserves subject to the loss portfolio transfer that increases or decreases the amounts ceded under the loss portfolio transfer, the proportion of actual paid recoveries to total ceded losses is affected and the change in deferred gain is recognized in earnings as if the revised estimate of ceded losses was available at the effective date of the loss portfolio transfer.

The effect of the deferred retroactive reinsurance benefit is recorded in losses and loss adjustment expenses for the discontinued operations of JRG Re and reported within loss from discontinued operations on the Consolidated Statements of (Loss) Income and Comprehensive Loss.

For the years ended December 31, 2023 and 2022, retroactive reinsurance benefits totaling $ 24.0 million and $ 1.7 million, respectively, were recorded in losses and loss adjustment expenses using the recovery method.

As of December 31, 2023 and 2022, the cumulative amounts ceded under the Casualty Re LPT was $ 393.9 million and $ 341.1 million, respectively.

The total deferred retroactive reinsurance gain of $ 33.2 million at December 31, 2023 and $ 4.4 million at December 31, 2022 under the loss portfolio transfer is presented within the liabilities held for sale of JRG Re on the Company's Consolidated Balance Sheets.

The Company has $ 6.1 million of aggregate limit remaining under the Casualty Re LPT at December 31, 2023.

Bermuda Statutory Matters

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

The estimated minimum statutory solvency margin required at December 31, 2023 for JRG Re was approximately $ 31.1 million.

Actual statutory capital and surplus at December 31, 2023 was $ 361.3 million.

The statutory net loss was $ 36.1 million for the year ended December 31, 2023.

The ECR for the year ended December 31, 2022 was $ 106.4 million.

The BSCR models for the year ended December 31, 2023 will not be filed with the Bermuda Monetary Authority until April 30, 2024.

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

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

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

The relevant liabilities include total insurance provisions and other liabilities less deferred income taxes and letters of credit, guarantees and other instruments.

As of December 31, 2023, the minimum liquidity ratio requirements were met.

Dividend Restrictions

The Bermuda Insurance Act of 1978 prohibits an insurer from declaring or paying a dividend if it is in breach of its minimum solvency margin, its enhanced capital requirement, or its minimum liquidity ratio, or if the declaration or payment of such dividend would cause such a breach.

An insurer can declare or pay dividends without prior regulatory approval up to 25%

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

of the total statutory capital and surplus (as shown on its previous financial year's statutory balance sheet).

The maximum combined amount of dividends and return of capital that can be paid without prior regulatory approval from JRG Re at December 31, 2023 is calculated to be approximately $ 90.3 million.

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

All necessary approvals have been obtained by JRG Re to facilitate the $ 139 million pre-closing dividend pursuant to the SPA covering the sale of JRG Re.

The Company’s available-for-sale fixed maturity securities are summarized as follows:

62 unchanged sentences

At December 31, 2023, 99.9 % of the Company’s fixed maturity security portfolio was rated “BBB-” or better (“investment grade”) by Standard & Poor’s or received an equivalent rating from another nationally recognized rating agency.

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

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

Measurement of Credit Losses on Financial Instruments on January 1, 2020.

Fixed maturity securities with ratings below investment grade by Standard & Poor's or another nationally recognized rating agency at December 31, 2023 had a fair value of $ 1.3 million.

The Company periodically reviews its available-for-sale fixed maturities to determine whether any unrealized losses exist that are due to credit-related factors.

An allowance for credit losses is established for any credit-related impairments, limited to the amount by which fair value is below amortized cost.

Changes in the allowance for credit losses are recognized in earnings and included in net realized and unrealized gains (losses) on investments.

Unrealized losses that are not credit-related continue to be recognized in other comprehensive income.

Unrealized losses that are not credit-related are recognized in other comprehensive income.

The Company considers the extent to which fair value is below amortized cost in determining whether a credit-related loss exists.

5 unchanged sentences

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

The Company elected the fair value option to account for bank loan participations.

Under the fair value option, bank loan participations are measured at fair value, and changes in unrealized gains and losses in bank loan participations are reported in

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2023, 2022, and 2021

In connection with the adoption of ASU 2016-13, the Company elected the fair value option in accounting for bank loan participations effective January 1, 2020.

The targeted transition relief offered by ASU 2019-05, Financial Instruments - Credit Losses (Topic 326):

Targeted Transition Relief was applied to elect the fair value option to account for bank loan participations already held at the January 1, 2020 date of adoption.

At adoption on January 1, 2020, the Company applied the amendments on a modified retrospective basis, reducing the carrying value of its bank loan portfolio to fair value through an $ 8.4 million adjustment with a $ 7.8 million (net of tax) cumulative effect adjustment to reduce retained earnings.

our income statement as net realized and unrealized gains (losses) on investments.

Applying the fair value option to the bank loan portfolio increases volatility in the Company's financial statements, but management believes it is less subjective and less burdensome to implement and maintain than ASU 2016-13, which would have otherwise been required.

1 unchanged sentence

Investment income on bank loan participations included in net investment income was $ 12.0 million, $ 4.3 million, $ 3.5 million during the years ended December 31, 2023, 2022, and 2021 respectively.

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

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

Net realized and unrealized gains (losses) on investments includes gains of $ 9.0 million, losses of $ 5.4 million, and gains of $ 2.3 million related to changes in unrealized gains and losses on bank loan participations for the years ended December 31, 2023, 2022, and 2021, respectively.

Management concluded that $ 946,000 and $ 592,000 of the unrealized losses were due to credit-related impairments for the years ended December 31, 2023 and 2022.

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

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

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

75 unchanged sentences

12,578 11,083 1,566 ( 1,343 ) 2,355

Bank holding companies (d)

Private Debt (d)

Excess and Surplus Lines 10,805 4,500 340 343 200

5 unchanged sentences

$ 33,134 $ 27,447 $ 5,049 $ 3,408 $ 2,200

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

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

(a) The Company’s Excess and Surplus Lines segment owns equity interests ranging from 2.5 % to 4.9 % in various LLCs whose principal objective is capital appreciation and income generation from owning and operating renewable energy production facilities (wind and solar).

The Company’s former Non-Executive Chairman invested in certain of these LLCs.

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

2 unchanged sentences

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

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

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

During the fourth quarter of 2022, the underlying projects in two of our LLCs were sold at the manager's discretion.The Company received proceeds of $ 20.2 million, comprised of $ 17.2 million in the Excess and Surplus Lines segment and $ 3.0 million in the Corporate and Other segment.

During the year ended December 31, 2023, the Company received additional proceeds from the sales of $ 3.1 million in the Excess and Surplus Lines segment and $ 524,000 in the Corporate and Other segment.

The Company could receive additional contingent payments in the future according to terms of the transaction.

The Company received cash distributions from all renewable energy investments totaling $ 3.7 million and $ 21.6 million for the years ended December 31, 2023 and 2022, respectively.

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

At December 31, 2022, the Company held two notes issued by an entity for which two of our former directors serve as officers .

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

Interest on the notes, which mature in 2025, is fixed at 12 %.

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

During the year ended December 31, 2023 , the Company received principal repayments of $ 593,000 and $ 742,000 on the notes receivable in the Company's Excess and Surplus Lines segment and Corporate and Other segment, respectively.

3 unchanged sentences

Years ended December 31, 2023, 2022, and 2021

(c) The Company owns investments in limited partnerships that invest in concentrated portfolios including publicly-traded small cap equities, loans of middle market private equity sponsored companies, private equity general partnership interests, commercial mortgage-backed securities, and tranches of distressed home loans.

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

1 unchanged sentence

At December 31, 2023, the Company’s Excess and Surplus Lines segment has outstanding commitments to invest another $ 6.3 million in these limited partnerships.

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

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

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

(d) The Company's Excess and Surplus Lines segment holds two notes receivable for structured private specialty credit.

Interest on the notes, which mature in 2031, is fixed at 4.25 % and 5.25 %.

At December 31, 2023, the Company's Excess and Surplus Lines segment has outstanding commitments to invest another $ 5.9 million in these notes.

Previously, the Company's Excess and Surplus Lines segment held $ 4.5 million of subordinated notes issued by a bank holding company for which the former Non-Executive Chairman of the Company was previously the Lead Independent Director.

The notes matured on August 12, 2023.

Interest on the notes was fixed at 7.6 % per annum.

At December 31, 2023 and 2022, cash and investments with a fair value of $ 72.4 million and $ 61.0 million, respectively, were on deposit with state insurance departments to satisfy regulatory requirements.

21 unchanged sentences

Specifically identifiable intangible assets were acquired in the Merger.

In September, 2023, the Company sold the renewal rights to the Individual Risk Workers’ Compensation (“IRWC”) business in the Specialty Admitted Insurance segment.

Upon closing of the transaction, the Company recognized an impairment charge of $ 2.5 million related to the trademark intangible asset associated with the IRWC business.

During the fourth quarters of 2023, 2022 and 2021, the indefinite-lived intangible assets for trademarks and insurance licenses and authorities were tested for impairment.

Intangible assets for broker relationships that have specific lives and are subject to amortization were also reviewed for impairment.

There were no impairments recognized in 2022, 2021, or 2020.

There were no additional impairments recognized in 2023, 2022, or 2021.

James River Group Holdings, Ltd.

76 unchanged sentences

Years ending December 31, (in thousands)

Thereafter 158

Total lease payments 8,674

5 unchanged sentences

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

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

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

Reserve for Losses and Loss Adjustment Expenses

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

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

The Company’s internal actuaries generally utilize five actuarial methods in their estimation process for the reserve for losses and loss adjustment expenses.

These five methods utilize, to varying degrees, the initial expected loss ratio, detailed statistical analysis of past claims reporting and payment patterns, claims frequency and severity, paid loss experience, industry loss experience, and changes in market conditions, policy forms, exclusions, and exposures.

The Company’s internal actuaries generally utilize five primary actuarial methods in their estimation process for the reserve for losses and loss adjustment expenses.

These primary methods are supplemented by additional actuarial methods as the Chief Actuary considers appropriate.

For example, these supplemental methods can include frequency and severity methods that utilize claim count data to estimate ultimate losses and loss adjustment expenses.

These methods utilize, to varying degrees, the initial expected loss ratio, detailed statistical analysis of past claims reporting and payment patterns, claims frequency and severity, paid loss experience, industry loss experience, and changes in market conditions and claims handling practices, policy forms, exclusions, and exposures.

In applying these methods to develop an estimate of the reserve for losses and loss adjustment expenses, our internal actuaries use judgment to determine three key parameters for each accident year and line of business:

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

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

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

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

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

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

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

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

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

For example, the current accident year has very little

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

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

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2023, 2022, and 2021

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

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

The Company generally sets the initial expected loss ratio for the current accident year consistent with the internal actuaries’ pricing assumptions adjusted upward where warranted based on management's judgment in order to produce the best estimate.

Company generally sets the initial expected loss ratio for the current accident year consistent with the internal actuaries’ pricing assumptions adjusted upward where warranted based on management's judgment in order to produce the best estimate.

We believe that this is a reasonable and appropriate reserving assumption for the current accident year since our pricing assumptions are actuarially driven and since the Company expects to make an acceptable return on the new business written.

16 unchanged sentences

Total loss and loss adjustment expense payments 328,959 318,355 419,749

Deferred reinsurance gain - retroactive reinsurance 20,091 — —

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

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

Change in deferred reinsurance gain - retroactive reinsurance 4,991 15,742 —

Loss reserves ceded in loss portfolio transfer — — 256,452

Reserve for losses and loss adjustment expenses net of reinsurance recoverables at end of period 1,246,973 1,080,766 974,221

1 unchanged sentence

Reserve for losses and loss adjustment expenses gross of reinsurance recoverables on unpaid losses and loss adjustment expenses at end of period $ 2,606,107 $ 2,340,963 $ 2,310,279

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

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

The foregoing reconciliation shows that $ 31.6 million of net adverse development was experienced in 2023 on the reserve for losses and loss adjustment expenses held at December 31, 2022 (excluding adverse prior year development on the commercial auto loss portfolio transfer subject to retroactive reinsurance accounting - see Loss Portfolio Transfer below).

This net adverse reserve development included $ 32.6 million of net adverse development in the Excess and Surplus Lines segment, with adverse development in accident years 2020 and prior exceeding favorable development on accident years 2022 and 2021, and $ 972,000 of net favorable development in the Specialty Admitted Insurance segment.

The foregoing reconciliation shows that $ 4.4 million of net favorable development was experienced in 2022 on the reserve for losses and loss adjustment expenses held at December 31, 2021 (excluding adverse prior year development on the commercial auto loss portfolio transfer subject to retroactive reinsurance accounting - see Loss Portfolio Transfer below).

This net favorable reserve development included $ 210,000 of net favorable development in the Excess and Surplus Lines segment and $ 4.2 million of net favorable development in the Specialty Admitted Insurance segment.

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

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

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

The foregoing reconciliation shows that $ 188.2 million of net adverse development was experienced in 2021 on the reserve for losses and loss adjustment expenses held at December 31, 2020.

This net adverse reserve development included $ 190.7 million of net adverse development in the Excess and Surplus Lines segment including $ 200.1 million of net adverse

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2023, 2022, and 2021

affiliates (collectively, “Rasier”) .

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

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

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

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

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

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

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

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

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

development in the commercial auto line of business that was primarily related to the 2019 and prior accident years with Rasier.

The adverse development for commercial auto was partially offset by $ 9.4 million of net favorable development in the Core E&S underwriting divisions.

The Company also experienced $ 2.5 million of net favorable development on prior accident years in the Specialty Admitted Insurance segment, as losses on our workers’ compensation business written prior to 2020 continued to develop more favorably than we had anticipated.

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

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

This adverse reserve development included $ 59.4 million of adverse development in the Excess and Surplus Lines segment including $ 91.4 million of adverse development in the commercial auto line of business that was primarily related to the 2018 and prior accident years with Rasier.

The adverse development for commercial auto was partially offset by $ 32.0 million of favorable development in other Excess and Surplus Lines underwriting divisions that was primarily related to the 2018 and 2019 accident years.

The Company also experienced $ 5.0 million of favorable development on prior accident years in the Specialty Admitted Insurance segment, as losses on our workers’ compensation business written prior to 2019 continued to develop more favorably than we had anticipated.

The Casualty Reinsurance segment experienced $ 37.8 million of adverse development on prior accident years primarily in accident years 2014 through 2018.

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

Loss Portfolio Transfers

7 unchanged sentences

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

Casualty Re Loss Portfolio Transfer

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

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

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

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

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Account balance on a quarterly basis.

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

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

Retroactive Reinsurance Accounting

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

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

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

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

While the deferral of gains can introduce volatility in our results in the short-term, over the life of the contract, we would expect no economic impact to the Company as long as the counterparty performs under the contract.

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

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

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.

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

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

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

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

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

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

The Company has applied retroactive reinsurance accounting to the loss portfolio transfer.

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.

The cumulative amounts ceded under the loss portfolio transfer were $ 456.2 million and $ 391.8 million as of December 31, 2023 and 2022, respectively.

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

James River Group Holdings, Ltd.

3 unchanged sentences

The following tables present incurred and paid losses and loss adjustment expenses, net of reinsurance as of December 31, 2023 for:

(1) the Excess and Surplus Lines segment split between all excess and surplus lines business excluding commercial auto, and separately, commercial auto, (2) the Specialty Admitted Insurance segment split between individual risk workers’ compensation and fronting and programs, and (3) the Casualty Reinsurance segment.

(1) the Excess and Surplus Lines segment split between all excess and surplus lines business excluding commercial auto, and separately, commercial auto, and (2) the Specialty Admitted Insurance segment split between individual risk workers’ compensation and fronting and programs.

The information provided herein about incurred and paid accident year claims development for the years ended December 31, 2022 and prior is presented as “unaudited” supplementary information.

74 unchanged sentences

2022 14,507 11,828

Total $ 146,554

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

49 unchanged sentences

Years ended December 31, 2023, 2022, and 2021

Casualty Reinsurance

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

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

2013 $ 133,230 $ 130,361 $ 131,352 $ 134,446 $ 137,801 $ 143,124 $ 146,760 $ 149,682 $ 153,622 $ 154,225

2014 118,881 115,927 114,636 116,981 121,200 126,160 130,822 139,208 139,341

2015 119,157 108,870 108,699 109,117 114,517 120,185 133,790 135,112

2016 112,759 105,533 103,544 108,222 114,979 132,058 133,990

2017 134,628 128,472 129,800 138,831 176,828 179,757

2018 121,529 119,098 125,715 163,957 165,417

2019 86,022 85,549 100,895 101,462

2020 80,374 81,800 82,626

2021 82,610 85,582

Total $ 1,286,263

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

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

2013 $ 59,756 $ 75,094 $ 93,902 $ 108,396 $ 119,256 $ 127,732 $ 134,644 $ 139,250 $ 142,824 $ 146,765

2014 41,421 58,601 76,302 89,899 101,366 110,374 117,971 125,444 131,196

2015 40,021 53,986 68,002 80,208 90,661 100,548 110,692 121,675

2016 36,268 50,905 65,409 78,145 90,356 104,115 117,831

2017 47,739 72,891 90,117 106,942 126,747 151,158

2018 30,903 50,274 69,123 90,054 118,445

2019 12,646 25,453 37,488 56,907

2020 5,589 15,270 26,690

2021 2,082 11,078

Total $ 883,532

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

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

Reinsurance recoverable for Casualty Re LPT 244,657

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

The reconciliation of the net incurred and paid claims development tables to the reserve for losses and loss adjustment expenses in the consolidated balance sheet at December 31, 2023 is as follows (in thousands):

3 unchanged sentences

Specialty Admitted – fronting and programs 108,982

Casualty Reinsurance 167,505

Net reserve for losses and loss adjustment expenses 1,246,973

6 unchanged sentences

Specialty Admitted – individual risk workers’ compensation 28.5 % 32.5 % 14.8 % 8.1 % 6.4 % 3.3 % 1.9 % 1.0 % 1.0 % 0.8 %

28.5 % 31.4 % 15.1 % 8.7 % 6.4 % 3.2 % 2.0 % 1.0 % 1.1 % 0.9 %

Specialty Admitted – fronting and programs 18.7 % 21.4 % 20.7 % 13.3 % 7.6 % 5.4 % 4.5 % 3.5 % 2.3 % 2.1 %

18.8 % 21.4 % 21.8 % 12.5 % 8.3 % 6.4 % 3.6 % 3.8 % 1.4 % 2.0 %

Casualty Reinsurance 19.4 % 11.6 % 11.6 % 11.3 % 10.1 % 8.6 % 6.9 % 5.5 % 3.2 % 2.6 %

In determining the cumulative number of reported claims, the Company measures claim counts by individual claimant for individual risk workers’ compensation policies in the Specialty Admitted Insurance segment.

2 unchanged sentences

reserve for losses and loss adjustment expenses).

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

The Company typically does not have direct access to claim frequency information underlying its assumed quota share arrangements given the nature of that business.

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

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

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

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

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Excess and Surplus Lines — Excluding Commercial Auto

13 unchanged sentences

2023 369,255 337,417 2,712

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

Excess and Surplus Lines — Commercial Auto

47 unchanged sentences

2023 53,635 27,444 8,035

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

Accident Year Incurred Losses

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

($ in thousands)

2013 $ 154,225 $ 1,134 $ 480

2014 139,341 2,217 414

2015 135,112 5,467 996

2016 133,990 7,782 1,401

2017 179,757 18,491 2,613

2018 165,417 25,512 4,001

2019 101,462 31,177 4,572

2020 82,626 47,915 8,806

2021 85,582 62,416 26,045

2022 108,751 65,167 56,748

The Company has not provided insurance coverage that could reasonably be expected to produce material levels of asbestos claims activity.

8 unchanged sentences

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

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

At December 31, 2023, reinsurance recoverables on unpaid losses from the Company’s three largest reinsurers were $ 366.1 million, $ 162.1 million, and $ 78.1 million, representing 44.6 % of the total balance.

At December 31, 2023, prepaid reinsurance premiums ceded to the three reinsurers with the largest amount of prepaid reinsurance premiums totaled $ 51.2 million, $ 25.0 million, and $ 24.1 million, representing 34.2 % of the total balance.

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2023, 2022, and 2021

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

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

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

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

24 unchanged sentences

All unpaid principal on the revolver is due at maturity.

Interest accrues quarterly and is payable in arrears at LIBOR plus a margin ( 1.50 % at December 31, 2022), which is subject to change according to terms in the credit agreement.

Interest accrues quarterly and is payable in arrears, currently at 1-month SOFR (the Company, per the terms of the credit agreement, can elect between one, three, or six month interest periods) plus a 0.1 % SOFR index adjustment and a SOFR margin ( 1.75 % at December 31, 2023), which is subject to change according to terms in the credit agreement.

At December 31, 2023 and 2022, the Company had a drawn balance of $ 185.8 million outstanding on the unsecured revolver.

In 2020, we borrowed an additional $ 52.5 million to support our growth and for general corporate purposes.

James River Group Holdings, Ltd.

2 unchanged sentences

On November 8, 2019, the Company entered into a Second Amended and Restated Credit Agreement for the 2013 Facility which, among other things, extended the maturity date of the 2013 Facility until November 8, 2024, increased the amount available under the unsecured revolving credit facility to $ 212.5 million, lowered the applicable interest rate and letter of credit fees, and modified certain negative covenants to be less restrictive.

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

On July 7, 2023, the Company entered into a Third Amended and Restated Credit Agreement for its $ 315.0 million senior revolving credit facility which, among other things, extended the maturity date of such facility until July 7, 2026 and increased the applicable interest rate and letter of credit fees.

A subsidiary of the bank holding company for which the former Non-Executive Chairman of the Company was previously Lead Independent Director is one of the lenders for the 2013 Facility, with a $ 50.0 million commitment allocation on the total $ 315.0 million 2013 Facility.

The 2013 Facility contains certain financial and other covenants (including minimum net worth, maximum ratio of total adjusted debt outstanding to total capitalization, and financial strength ratings) with which the Company was in compliance at December 31, 2023, with the exception of a default of the financial strength rating covenant due to the downgrade of JRG Re by A.M.

Best on December 20, 2023 from “A-” (Excellent) to “B++” (good).

The financial strength rating covenant requires

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2023, 2022, and 2021

that each of our regulated insurance subsidiaries maintain an A.M.

Best rating not lower than “A- ” (Excellent).

Our lenders have waived this default through March 1, 2025, and in any event, we expect it to be cured upon the closing of the sale of JRG Re, at which time we expect JRG Re to be removed as a borrower under the 2017 Facility.

On August 2, 2017, the Company and its wholly-owned subsidiary, JRG Re, together as borrowers, entered into a credit agreement (the "2017 Facility") that provides the Company with a revolving line of credit of up to $ 100.0 million, which may be used for loans and letters of credit made or issued, at the borrowers' option, on a secured or unsecured basis.

2 unchanged sentences

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

Obligations under the 2017 Facility carry a variable rate of interest subject to terms in the credit agreement (LIBOR plus a margin of 1.50 % at December 31, 2022) and will mature 30 days after notice of termination from the lender.

Obligations under the 2017 Facility carry a variable rate of interest subject to terms in the credit agreement which is currently at 1-month SOFR (the Company, per the terms of the credit agreement, can elect between one, two, three, or six month interest periods) plus a 0.1 % SOFR index adjustment and a SOFR margin ( 1.50 % at December 31, 2023) and will mature 30 days after notice of termination from the lender.

Interest accrues quarterly and is payable in arrears at variable rates which are subject to change according to terms in the credit agreement.

At December 31, 2023, unsecured loans of $ 21.5 million and secured letters of credit totaling $ 25.5 million were outstanding under the facility.

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

The Company repaid $ 40.0 million of loans in 2022.

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

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

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

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

An affiliate of the lender under the 2017 Facility was an underwriter in the December 2014 initial public offering of the Company’s common shares and a joint lead book-running manager in the Company’s May 2021 public offering of the Company’s common shares.

The 2017 Facility contains certain financial and other covenants with which we are in compliance at December 31, 2023, with the exception of a default of the financial strength rating covenant due to the downgrade of JRG Re by A.M.

Best on December 20, 2023 from “A-” (Excellent) to “B++” (good).

The financial strength rating covenant requires that each of our regulated insurance subsidiaries maintain an A.M.

Best rating not lower than “A-” (Excellent).

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

The Senior Debt is not redeemable by the holder and is not subject to sinking fund requirements.

Interest accrues quarterly and is payable in arrears at a per annum rate of the three-month LIBOR on the Determination Date (as defined in the indenture) plus 3.85 %.

Interest accrues quarterly and is payable in arrears at a per annum rate of the three-month SOFR on the Determination Date (as defined in the indenture) plus a spread adjustment of 0.26 % and a margin of 3.85 %.

The Senior Debt is redeemable prior to its stated maturity in whole or in part, at the option of James River Group.

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Each Trust was created solely for the purpose of issuing the Trust Preferred Securities.

Each Trust used proceeds from the sale of its Trust Preferred Securities to purchase the Company’s floating rate junior subordinated debentures (the “Junior Subordinated Debt”) issued to the Trust under an indenture (each, an “Indenture”;

collectively, the “Indentures”).

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

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2023, 2022, and 2021

are the sole liabilities of each Trust.

collectively, the “Indentures”).

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

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

19 unchanged sentences

Trust common stock $ 217 $ 464 $ 619 $ 1,670 $ 928

Interest rate, per annum Three-Month LIBOR plus 4.0 %

Three-Month LIBOR plus 3.4 %

Three-Month LIBOR plus 3.0 %

Three-Month LIBOR plus 3.1 %

Three-Month LIBOR plus 4.0 %

Interest rate, per annum Three-Month SOFR plus 4.3 %

Three-Month SOFR plus 3.7 %

Three-Month SOFR plus 3.3 %

Three-Month SOFR plus 3.4 %

Three-Month SOFR plus 4.3 %

All of the Junior Subordinated Debt is currently redeemable at 100.0 % of the unpaid principal amount at the Company’s option.

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

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

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Dividends accrue and are payable quarterly.

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

For the years ended December 31, 2023 and 2022, cash dividends of $ 10.5 million and $ 8.8 million were declared, respectively, of which $ 2.6 million was payable at December 31 of both years.

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

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

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

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

The conversion price is subject to customary anti-dilution adjustments, including cash dividends on the common shares above specified levels, as well as certain adjustments in case of net adverse reserve developments in excess of a threshold over a period of time.

The measurement period for the adverse reserve development anti-dilution adjustment commenced with the quarter beginning January 1, 2022 and ends with the quarter ending December 31, 2025.

As of December 31, 2023, net adverse reserve development exceeded the threshold.

If net adverse reserve development exceeds the threshold at the conclusion of the measurement period (or upon a mandatory or optional conversion, if earlier), the conversion price will be adjusted pursuant to the Certificate of Designations and the adjusted conversion price will become effective after the filing of the Company's financial statements for the period ending December 31, 2025 (or immediately after the close of business on the date of the public filing of the Company's financial statements for the most recent quarterly period preceding a mandatory or optional conversion, if earlier).

None of the other triggers that would result in additional adjustments to the conversion price have been met at December 31, 2023.

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

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

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

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

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

The repurchase price will be payable in cash.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

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

5 unchanged sentences

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Year Ended December 31,

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

Issuance of common shares — 6,497,500

Exercise of stock options — 93,446

Vesting of RSU awards 171,326 97,171

4 unchanged sentences

The Company has 5,132,650 common shares reserved for future issuance upon exercise or vesting of equity awards, as applicable, and 5,971,184 common shares reserved for issuance upon conversion of the Series A Preferred Shares.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

The Board of Directors declared the following cash dividends on common shares in 2023, 2022, and 2021:

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Equity Incentive Plans

The Company’s shareholders have approved various equity incentive plans, including the Amended and Restated 2009 Equity Incentive Plan (the “Legacy Plan”), the 2014 Long Term Incentive Plan (“2014 LTIP”), and the 2014 Non-Employee Director Incentive Plan (“2014 Director Plan”) (collectively, the “Plans”).

The Company’s shareholders have approved various equity incentive plans, including the 2014 Long Term Incentive Plan (“2014 LTIP”) and the 2014 Non-Employee Director Incentive Plan (“2014 Director Plan”) (collectively, the “Plans”).

All awards issued under the Plans are issued at the discretion of the Board of Directors.

Under the Legacy Plan, employees received non-qualified stock options.

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

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

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

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

Awards under the LTI Plan are made in the form of performance restricted share units (a “PRSU”) and service based restricted share units (RSUs).

Initial awards were granted in the first quarter of 2023.

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

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

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

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

The maximum number of shares available for issuance under the 2014 Director Plan is 150,000 , and at December 31, 2023, 66,999 shares are available for grant.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

Generally, awards issued under the 2014 LTIP and 2014 Director Plan vest immediately in the event that an award recipient is terminated without Cause (as defined), and in the case of the 2014 LTIP for Good Reason (as defined), at any time following a Change in Control (as defined in the applicable plans).

8 unchanged sentences

Exercised — $ — — $ — ( 126,798 ) $ 22.26

Lapsed ( 164,548 ) $ 32.07 — $ — — $ —

Forfeited ( 49,036 ) $ 35.50 — $ — ( 48,552 ) $ 40.42

4 unchanged sentences

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

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

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

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

The total intrinsic value of options exercised during 2023, 2022 and 2021 was $ 0 , $ 0 and $ 1.3 million, respectively.

The aggregate intrinsic value of options outstanding and options exercisable was $ 0 at December 31, 2023, 2022 and 2021.

The fair value used for calculating intrinsic values was $ 9.24 , $ 20.91 and $ 28.81 at December 31, 2023, 2022 and 2021, respectively.

2 unchanged sentences

The value of the options granted was estimated at the date of grant using the Black-Scholes-Merton option pricing model.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

The following table summarizes RSU activity:

10 unchanged sentences

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

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

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

The total fair value of shares vested in 2023, 2022 and 2021 was $ 5.6 million, $ 3.8 million and $ 9.1 million, respectively.

The holders of RSUs are entitled to dividend equivalents.

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

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

forfeiture as the underlying shares.

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

The RSUs granted in 2023 include 91,818 PRSU awards.

Compensation Expense

Share based compensation expense is recognized on a straight-line basis over the vesting period.

Compensation cost for PRSUs is based upon the probable outcome of performance conditions.

The amount of expense and related tax benefit is summarized below:

5 unchanged sentences

At December 31, 2023, the Company had $ 10.2 million of unrecognized share based compensation expense expected to be charged to earnings over a weighted-average period of 1.7 years.

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

and its Bermuda-based subsidiaries, JRG Re and Carolina Re, are not required to pay any Bermuda taxes on their income or capital gains.

Those companies have received an undertaking from the Minister of Finance in Bermuda that, in the event of any taxes being imposed, the Company will be exempt from taxation in Bermuda until March 2035.

Currently, James River Group Holdings, Ltd.

and its Bermuda-based subsidiary, JRG Re, are not subject to income or capital tax.

The Companies have obtained from the Bermuda Minister of Finance an assurance that, in the event Bermuda enacts legislation imposing tax, the imposition of any such tax shall not be applicable to the Company until March 31, 2035 (the “EUTP Act”).

Effective for tax years beginning on or after January 1, 2025, Bermuda has introduced the Corporate Income Tax Act 2023 ("CIT Act") where a Bermuda Constituent Entity group (BCE) that is part of an “in scope Multi-National Enterprise group” (MNE) will be subject to a 15% corporate income tax.

The CIT Act will supersede the assurance received from the Bermuda Minister of Finance under the EUTP Act.

A MNE group with a limited international footprint is not an in scope MNE, thus not subject to CIT.

The limited international footprint exception is a year-by-year test and expires after tax year 2029.

James River Group Holdings, Ltd.

is expected to meet the criteria of the limited international footprint exception, and as such is not expected to be subject to tax under the CIT act.

Distributions from the Company’s U.S.

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corporations.

In addition, Carolina Re is subject to Federal income taxes as a result of its irrevocable election to be taxed as a U.S.

domestic corporation under Section 953(d) of the Code.

The Company’s U.S.-domiciled subsidiaries and Carolina Re file a consolidated U.S.

The Company’s U.S.-domiciled subsidiaries file a consolidated U.S.

federal income tax return.

4 unchanged sentences

The initial impact of the proposed regulations in 2018 was an increase to our deferred tax asset for the additional discount as of December 31, 2017 of $ 8.8 million offset by an increase to our deferred tax liability of $ 8.8 million representing the 8 year transition provision required by the Tax Act.

During 2018, $ 1.1 million of this transition provision was recognized in our current

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

provision and adjusted out of our deferred tax liability.

During 2018, $ 1.1 million of this transition provision was recognized in our current provision and adjusted out of our deferred tax liability.

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

5 unchanged sentences

Modified taxable income is generally calculated by adding back certain payments to related foreign persons to regular taxable income.

For the Company, reinsurance premiums paid by the Company’s U.S.

insurance subsidiaries to JRG Re, a Bermuda entity that is not a U.S.

taxpayer, are added back to regular taxable income in applying the BEAT provisions.

A reconciliation of the difference between the Company’s Federal income tax provision on U.S.

A reconciliation of the difference

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

between the Company’s Federal income tax provision on U.S.

income and the expected Federal tax provision on U.S.

8 unchanged sentences

Provision to return and amended tax returns ( 211 ) 124 ( 3,945 )

Base Erosion and Anti-Abuse Tax — — 2,843

Excess §162(m) compensation 522 210 210

Other ( 14 ) 49 23

2 unchanged sentences

Total income tax expense (benefit) $ 25,705 $ 18,414 $ ( 23,235 )

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

The significant components of net deferred tax assets at the corporate income tax rate of 21% for the years ended December 31, 2023 and 2022 are summarized as follows:

7 unchanged sentences

Net unrealized losses 16,613 24,066

Net operating loss carryforward — 15,221

Other 4,836 3,991

2 unchanged sentences

Intangible assets 6,733 7,281

Net unrealized gains — 6,626

Deferred policy acquisition costs 6,614 6,896

12 unchanged sentences

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

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

At December 31, 2023, the Company has no net operating loss carryforwards.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

The Company had no reserve for future tax contingencies or liabilities (“unrecognized tax benefits”) at December 31, 2023 or 2022.

3 unchanged sentences

For the years ended December 31, 2023, 2022, and 2021, the Company paid $ 0 , $ 0 , and $ 338,000 , respectively, of federal excise taxes on its intercompany reinsurance transactions.

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

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

The Company also paid excise taxes of $ 194,000 , $ 842,000 , and $ 1.5 million for the years ended December 31, 2023, 2022, and 2021, respectively, on written premiums assumed from third-party insurers with respect to risks located in the U.S.

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

Other Operating Expenses and Other Expenses

7 unchanged sentences

Total $ 193,656 $ 152,570 $ 133,121

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

Other expenses of $ 3.8 million, $ 795,000 , and $ 2.6 million for the years ended December 31, 2023, 2022, and 2021, respectively, primarily consist of certain nonoperating expenses including legal fees related to a class action lawsuit, legal and other professional fees related to the Company's May 2021 common share offering, legal and other professional fees and other expenses related to various strategic initiatives including loss portfolio transfers accounted for as retroactive reinsurance, and employee severance costs.

Employee Benefits

5 unchanged sentences

Commitments and Contingent Liabilities

The Company is involved in various legal proceedings, including commercial matters and litigation regarding insurance claims arising in the ordinary course of business as well as an alleged class action lawsuit.

The Company is involved in various legal proceedings, including commercial matters and litigation regarding insurance claims which arise in the ordinary course of business, as well as an alleged class action lawsuit.

In addition, the Company is involved from time to time in legal actions which seek extra-contractual damages, punitive damages or penalties, including claims alleging bad faith in the handling of insurance claims.

The Company believes that the outcome of such matters, individually and in the aggregate, is not reasonably likely to have a material adverse effect on its consolidated financial position, results of operations or cash flows.

The Company believes that the outcome of such matters, individually and in the aggregate, is not reasonably likely to have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows.

On July 9, 2021 a purported class action lawsuit was filed in the U.S.

7 unchanged sentences

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

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

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

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

The Company’s reinsurance subsidiary, JRG Re, entered into three letter of credit facilities with banks as security to third-party reinsureds on reinsurance assumed by JRG Re.

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

On August 28, 2023, the Court denied the Second MTD.

James River Group Holdings, Ltd.

2 unchanged sentences

Years ended December 31, 2023, 2022, and 2021

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

Under the 2013 Facility, $ 44.5 million of letters of credit were issued through December 31, 2022 which were secured by deposits of $ 52.9 million.

Under the 2017 Facility, $ 22.9 million of letters of credit were issued through December 31, 2022 which were secured by deposits of $ 33.1 million.

JRG Re has also established trust accounts to secure its obligations to selected reinsureds.

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

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

We engaged in mediation in the fourth quarter of 2023 and on December 7, 2023, in connection with the mediation, we reached an agreement in principle to settle the action.

On December 22, 2023, the parties submitted the stipulation of settlement to the Court for approval.

The settlement provides for a full release of all defendants in connection with the allegations made and a settlement payment to the class of $ 30 million, inclusive of all Plaintiffs’ attorneys fees and expenses and settlement costs, all of which will be paid by the Company’s insurance carriers.

On January 26, 2024 the Court issued an order granting preliminary approval of the settlement and scheduled a final settlement hearing for May 24, 2024.

On November 13, 2023, a purported class action lawsuit was filed in the U.S.

District Court, Southern District of New York, on behalf of Paul Glantz against James River Group Holdings, Ltd.

and certain of its officers, asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

Glantz alleges that he purchased James River common stock between August 7, 2023 and November 7, 2023, inclusive, that the Company failed to disclose that it lacked effective internal controls regarding the recognition of reinstatement premiums for reinsurance and as a result the Company overstated its net income, and that, as a result, Mr.

Glantz suffered unspecified damages.

On January 12, 2024, both Mr.

Glantz and Madhav Ghimire, another individual shareholder, filed an application with the Court for appointment as Lead Plaintiff, and on January 26, 2024 Mr.

Glantz filed a notice of non-opposition to Mr.

Ghimire's competing motion for appointment as Lead Plaintiff.

The court's appointment of Lead Plaintiff is pending.

The Company believes that the claims are without merit and intends to vigorously defend this lawsuit.

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

3 unchanged sentences

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 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:

5 unchanged sentences

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

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

At December 31, 2023, the balance in the LPT Trust was $ 63.7 million, and, together with the balance of the Loss Fund Trust (as defined below) attributable to the Commercial Auto LPT as described below, the total balance of collateral securing Aleka’s obligations under the Commercial

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

Auto LPT was $ 83.8 million.

At December 31, 2023, the total reinsurance recoverables under the Commercial Auto LPT was $ 84.5 million (including $ 78.1 million of unpaid recoverables and $ 6.4 million of paid recoverables).

4 unchanged sentences

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

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

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

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

1 unchanged sentence

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

Other Comprehensive (Loss) Income

The following table summarizes the components of other comprehensive (loss) income:

Other Comprehensive Income (Loss)

The following table summarizes the components of other comprehensive income (loss):

Year Ended December 31,

1 unchanged sentence

(in thousands)

Unrealized (losses) gains arising during the period, before U.S.

Unrealized gains (losses) arising during the period, before U.S.

income taxes $ 105,368 $ ( 219,788 ) $ ( 54,132 )

income taxes ( 6,313 ) 26,780 6,189

Unrealized (losses) gains arising during the period, net of U.S.

Unrealized gains (losses) arising during the period, net of U.S.

income taxes 99,055 ( 193,008 ) ( 47,943 )

Less reclassification adjustment:

Net realized investment gains 275 4,924 1,045

Net realized investment (losses) gains ( 339 ) 275 4,924

income taxes 71 ( 261 ) ( 946 )

Reclassification adjustment for investment gains realized in net income 14 3,978 952

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

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

Reclassification adjustment for investment (losses) gains realized in net income ( 268 ) 14 3,978

Other comprehensive income (loss) $ 99,323 $ ( 193,022 ) $ ( 51,921 )

In addition to the net realized investment (losses) gains of $( 339,000 ), $ 275,000 , and $ 4.9 million on available-for-sale fixed maturity securities for the years ended December 31, 2023, 2022, and 2021, the Company recognized net realized and unrealized investment gains (losses) in the respective years of $ 5.5 million, $( 5.7 ) million, and $ 2.0 million on its investments in bank loan participations and $ 5.2 million, $( 11.1 ) million, and $ 4.3 million on its investments in equity securities.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

Segment Information

The Company has four reportable segments, three of which are separately managed business units and the fourth (“Corporate and Other”) includes the Company’s remaining operations.

The Company's continuing operations are comprised of three reportable segments, two of which are separately managed business units and the third (“Corporate and Other”) includes the Company’s remaining operations.

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

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

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

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

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

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

Prior to entering into a definitive agreement to sell JRG Re on November 8, 2023, JRG Re was considered a reportable segment (the “Casualty Reinsurance” segment).

After entering into the agreement to sell JRG Re, the Company no longer considers Casualty Reinsurance to be a reportable segment, but instead it is reported as discontinued operations.

The segment information below excludes discontinued operations for all periods presented.

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

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

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

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

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

Segment profit (loss) is measured by underwriting profit (loss), which is generally defined as net earned premiums and gross fee income (in specific instances when the Company is not retaining insurance risk) in “other income” in the Consolidated Statements of (Loss) Income and Comprehensive Loss less loss and loss adjustment expenses on business not subject to retroactive reinsurance accounting for loss portfolio transfers (see Loss Portfolio Transfer in Note 8 - Reserve for Losses and Loss Adjustment Expenses ) and other operating expenses of the operating segments.

Gross fee income of $ 5.3 million, $ 3.8 million, and $ 4.5 million from the Specialty Admitted Insurance segment for the years ended December 31, 2023, 2022, and 2021, respectively, was included in other income and in underwriting profit (loss).

Segment results are reported prior to the effects of intercompany pooling agreements and intercompany reinsurance agreements.

All gross written premiums and net earned premiums for all periods presented were generated from policies issued to U.S.

based insureds.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Surplus Lines Specialty

Insurance Casualty

Reinsurance Corporate

Insurance Corporate

(in thousands)

6 unchanged sentences

Interest expense — — 24,627 24,627

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

Underwriting profit of operating segments 54,347 4,077 — 58,424

Segment goodwill 181,831 — — 181,831

7 unchanged sentences

Interest expense — — 13,872 13,872

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

Underwriting profit of operating segments 83,051 4,234 — 87,285

Segment goodwill 181,831 — — 181,831

Segment assets 2,627,956 1,277,988 85,332 3,991,276

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

As of and for the Year Ended

5 unchanged sentences

Interest expense — — 8,922 8,922

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

Underwriting (loss) profit of operating segments ( 121,478 ) 9,667 — ( 111,811 )

Segment goodwill 181,831 — — 181,831

Segment assets 1,997,192 1,062,125 647,700 3,707,017

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

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

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

Year Ended December 31,

4 unchanged sentences

Specialty Admitted Insurance 4,077 4,234 9,667

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

Total underwriting profit (loss) of operating segments 58,424 87,285 ( 111,811 )

3 unchanged sentences

Net investment income 84,046 43,188 31,989

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

Net realized and unrealized gains (losses) on investments 10,441 ( 15,720 ) 10,818

Other income 4,216 551 353

2 unchanged sentences

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

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

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

Impairment of intangible assets ( 2,500 ) — —

Income (loss) from continuing operations before income taxes $ 86,914 $ 53,272 $ ( 108,130 )

The Company currently has 15 underwriting divisions, including 14 in the Excess and Surplus Lines segment, and one in the Specialty Admitted Insurance segment.

Each underwriting division focuses on a specific industry group or coverage.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

Gross written premiums by segment and underwriting division are presented below:

7 unchanged sentences

Energy 51,593 42,290 46,216

Commercial Auto 37,974 34,630 30,029

Small Business 38,561 36,930 32,593

Allied Health 30,904 34,156 35,192

Commercial Auto 29,379 37,974 34,630

Life Sciences 27,595 32,277 35,935

Environmental 20,676 17,050 17,753

Sports and Entertainment 17,826 13,934 9,442

Environmental 13,832 20,676 17,050

Professional Liability 9,264 8,936 8,104

Medical Professionals 955 1,285 1,844

Management Liability 63 — —

Total Excess and Surplus Lines segment 1,007,351 921,164 833,657

Specialty Admitted Insurance segment 501,309 490,208 491,561

Casualty Reinsurance segment 85,208 182,081 149,166

Total $ 1,508,660 $ 1,411,372 $ 1,325,218

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

The Company does business with three brokers that generated $ 324.7 million, $ 246.4 million and $ 145.2 million of gross written premiums for the Excess and Surplus Lines segment for the year ended December 31, 2023, representing 21.5 %, 16.3 % and 9.6 % of consolidated gross written premiums and 32.2 %, 24.5 % and 14.4 % of the Excess and Surplus Lines segment’s gross written premiums, respectively.

5 unchanged sentences

No other agency generated 10.0% or more of the gross written premiums for the Specialty Admitted Insurance segment for the year ended December 31, 2023.

The Company does business with three brokers that generated $ 25.4 million, $ 20.0 million, and $ 17.2 million of gross written premiums for the Casualty Reinsurance segment for the year ended December 31, 2022, representing 1.7 %, 1.3 %, and 1.1 % of consolidated gross written premiums and 29.8 %, 23.5 %, and 20.1 % of the Casualty Reinsurance segment’s gross written premiums, respectively.

No other broker generated 10.0% or more of the gross written premiums for the Casualty Reinsurance segment for the year ended December 31, 2022.

The Casualty Reinsurance segment assumed business from three unaffiliated ceding companies that generated $ 26.9 million, $ 24.5 million, and $ 16.5 million of gross written premiums for the year ended December 31, 2022, representing 1.8 %, 1.6 %, and 1.1 % of consolidated gross written premiums and 31.6 %, 28.7 %, and 19.4 % of the Casualty Reinsurance segment’s gross written premiums, respectively.

Fair Value Measurements

9 unchanged sentences

Treasury and publicly-traded equity securities are generally based on Level 1 inputs which use the market approach valuation technique.

The values for all other fixed maturity securities (including state and municipal securities and obligations of U.S.

The values for all other fixed maturity securities (including state and municipal securities and obligations

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

government corporations and agencies) and bank loan participations generally incorporate significant Level 2 inputs, and in some cases, Level 3 inputs, using the market approach and income approach valuation techniques.

5 unchanged sentences

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Assets measured at fair value on a recurring basis as of December 31, 2023 are summarized below:

20 unchanged sentences

Short-term investments $ — $ 72,137 $ — $ 72,137

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

Assets measured at fair value on a recurring basis as of December 31, 2022 are summarized below:

20 unchanged sentences

Short-term investments $ — $ 95,351 $ — $ 95,351

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

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

16 unchanged sentences

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

The fair value of $ 7,000 for the equity security was obtained from our asset manager and was derived from an internal model.

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

The fair value of $ 39,000 for the equity security was based on expected proceeds from its sale.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

During 2021, one equity security was transferred from Level 2 to Level 3 as the security was no longer actively traded.

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

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

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

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

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

Transfers out of Level 3 occur when the Company is able to obtain reliable prices from pricing vendors for which the Company was previously unable to obtain reliable prices.

10 unchanged sentences

There were no investments for which external sources were unavailable to determine fair value as of December 31, 2023 and 2022.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

The carrying values and fair values of financial instruments are summarized below:

13 unchanged sentences

The fair values of other invested assets-notes receivable, senior debt, and junior subordinated debt at December 31, 2023 and 2022 were determined by calculating the present value of expected future cash flows under the terms of the note agreements or debt agreements, as applicable, discounted at an estimated market rate of interest at December 31, 2023 and 2022, respectively.

The Company also utilized an internally developed valuation model based on the spread of a comparable market index to determine the fair value of certain other invested assets-notes receivable at December 31, 2023.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

The fair values of senior debt and junior subordinated debt at December 31, 2023 and 2022 were determined using inputs to the valuation methodology that are unobservable (Level 3).

4 unchanged sentences

The principal differences between SAP and GAAP as they relate to the financial statements of the Company’s insurance subsidiaries are (a) policy acquisition costs are expensed as incurred under SAP, whereas they are deferred and amortized under GAAP, (b) certain assets are not admitted for purposes of determining surplus under SAP, (c) the classification and carrying amounts of investments in certain securities are different under SAP and GAAP, and (d) the criteria for providing asset valuation allowances and the methodologies used to determine the amount thereof are different under SAP and GAAP.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

Combined net income, statutory capital and surplus and minimum required statutory capital and surplus, as determined in accordance with statutory accounting practices, for the U.S.

7 unchanged sentences

As of December 31, 2023, the insurance subsidiaries’ adjusted capital and surplus exceeds their authorized control level RBC.

The Company has two Bermuda-based subsidiaries:

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

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

$ 167.1 million).

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

$ 518.7 million).

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

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

The BSCR models for the year ended December 31, 2022 will not be filed with the Bermuda Monetary Authority until April 30, 2023.

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

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

The relevant liabilities include total insurance provisions and other liabilities less deferred income taxes and letters of credit, guarantees and other instruments.

As of December 31, 2022, the minimum liquidity ratio requirements were met.

Dividend Restrictions

11 unchanged sentences

subsidiaries have been and will be indefinitely reinvested in U.S.

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

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

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2022, 2021, and 2020

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

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

Other Related Party Transactions

1 unchanged sentence

The term of the lease, which has been amended from time to time, runs through 2026.

Operating costs under the lease were $ 2.1 million, $ 2.1 million, and $ 1.9 million for the years ended December 31, 2022, 2021, and 2020, respectively.

Operating costs under the lease were $ 2.1 million for each of the years ended December 31, 2023, 2022, and 2021, respectively.

Upon retiring effective July 31, 2021, the Company’s former President and Chief Operating Officer entered into a consulting agreement with the Company to provide consulting services as requested by the Company’s Chief Executive Officer during the period August 1, 2021 through December 31, 2021.

The Company incurred expenses of $ 146,000 in 2021 as compensation for rendering these consulting services.

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

Subsequent Events

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

On February 15, 2024, the Board of Directors declared a cash dividend of $ 0.05 per common share.

1 unchanged sentence

On February 15, 2024, the Board of Directors declared a quarterly dividend on the Series A Preferred Shares.

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

The dividend of $ 2.6 million will be payable in cash on April 1, 2024 to shareholders of record on March 15, 2024 .

On February 15, 2024, the Board of Directors approved awards under the 2014 LTIP and the 2014 Director Plan to the Company’s employees and directors with an aggregate fair value of $ 9.4 million and a grant date of March 1, 2024.

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

insurance and fronting businesses.

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

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

The 2013 Facility and 2017 Facility contain certain financial and other covenants with which we are in compliance at December 31, 2023, with the exception of a default of the financial strength rating covenant due to the downgrade of JRG Re by A.M.

Best on December 20, 2023 from “A-” (Excellent) to “B++” (good).

The financial strength rating covenant requires that each of our regulated insurance subsidiaries maintain an A.M.

Best rating not lower than “A-” (Excellent).

On February 26, 2024, our lenders waived this default through March 1, 2025, which, in any event, we expect to be cured upon the closing of the sale of JRG Re, at which time we expect JRG Re to be removed as a borrower under the 2013 Facility and 2017 Facility.

On February 26, 2024, JRGH received $ 5.8 million from JRG Re representing the cash portion of the pre-closing dividend pursuant to the Stock Purchase Agreement covering the sale of JRG Re.

See Note 2 - Discontinued Operations.

Unaudited Selected Quarterly Financial Data

The following is a summary of the unaudited quarterly results of operations:

2023 Quarter 2023

First Second Third Fourth Year

(in thousands except per share data)

Gross written premiums $ 353,454 $ 423,050 $ 342,851 $ 389,305 $ 1,508,660

Total revenues 188,804 194,782 210,319 218,104 812,009

Underwriting profit 7,314 1,878 11,827 3,465 24,484

Income from continuing operations 5,302 12,129 23,722 20,056 61,209

Income (loss) from discontinued operations 1,704 3,785 ( 4,171 ) ( 170,211 ) ( 168,893 )

Net income (loss) 7,006 15,914 19,551 ( 150,155 ) ( 107,684 )

Net income (loss) available to common shareholders 4,381 13,289 16,926 ( 152,780 ) ( 118,184 )

Comprehensive income (loss) 37,908 ( 543 ) ( 20,675 ) ( 25,051 ) ( 8,361 )

Net income (loss) per common share:

Continuing operations $ 0.07 $ 0.25 $ 0.56 $ 0.46 $ 1.35

Discontinued operations $ 0.05 $ 0.10 $ ( 0.11 ) $ ( 4.52 ) $ ( 4.49 )

$ 0.12 $ 0.35 $ 0.45 $ ( 4.06 ) $ ( 3.14 )

Continuing operations $ 0.07 $ 0.25 $ 0.55 $ 0.46 $ 1.34

Discontinued operations $ 0.05 $ 0.10 $ ( 0.10 ) $ ( 3.89 ) $ ( 4.47 )

$ 0.12 $ 0.35 $ 0.45 $ ( 3.43 ) $ ( 3.13 )

James River Group Holdings, Ltd.

and Subsidiaries

Notes to Consolidated Financial Statements

Years ended December 31, 2023, 2022, and 2021

2022 Quarter 2022

First Second Third Fourth Year

(in thousands except per share data)

Gross written premiums $ 329,992 $ 391,602 $ 328,174 $ 361,604 $ 1,411,372

Total revenues 157,625 154,856 162,228 186,805 661,514

Underwriting profit 13,792 14,698 8,240 19,295 56,025

Income (loss) from continuing operations 13,939 7,219 ( 12,161 ) 25,861 34,858

(Loss) income from discontinued operations ( 3,734 ) 445 7,540 ( 8,136 ) ( 3,885 )

Net income (loss) 10,205 7,664 ( 4,621 ) 17,725 30,973

Net income (loss) available to common shareholders 9,330 5,039 ( 7,246 ) 15,100 22,223

Comprehensive (loss) income ( 75,766 ) ( 50,936 ) ( 65,277 ) 29,930 ( 162,049 )

Net income (loss) per common share:

Continuing operations $ 0.35 $ 0.12 $ ( 0.39 ) $ 0.62 $ 0.70

Discontinued operations $ ( 0.10 ) $ 0.01 $ 0.20 $ ( 0.22 ) $ ( 0.11 )

$ 0.25 $ 0.13 $ ( 0.19 ) $ 0.40 $ 0.59

Continuing operations $ 0.35 $ 0.12 $ ( 0.39 ) $ 0.60 $ 0.69

Discontinued operations $ ( 0.10 ) $ 0.01 $ 0.20 $ ( 0.20 ) $ ( 0.10 )

$ 0.25 $ 0.13 $ ( 0.19 ) $ 0.40 $ 0.59

JAMES RIVER GROUP HOLDINGS, LTD.

Summary of Investments—Other than Investments in Related Parties

27 unchanged sentences

Investment in subsidiaries (1)

894,848 1,007,874

Due from subsidiaries 166 41

21 unchanged sentences

Condensed Financial Information of Registrant

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

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

Year Ended December 31,

8 unchanged sentences

Loss before equity in net income of subsidiaries ( 34,335 ) ( 22,161 ) ( 17,594 )

Equity in net income (loss) of subsidiaries 53,134 ( 155,205 ) 25,973

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

Other comprehensive (loss) income:

Equity in other comprehensive (losses) earnings of subsidiaries ( 193,022 ) ( 51,921 ) 50,785

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

Equity in net (loss) income of subsidiaries (1)

( 73,349 ) 53,134 ( 155,205 )

Net (loss) income $ ( 107,684 ) $ 30,973 $ ( 172,799 )

Other comprehensive income (loss):

Equity in other comprehensive earnings (losses) of subsidiaries 99,323 ( 193,022 ) ( 51,921 )

Total comprehensive loss $ ( 8,361 ) $ ( 162,049 ) $ ( 224,720 )

(1) Includes amounts for JRG Re which is classified as held for sale on our Consolidated Balance Sheets.

Operating results of JRG Re are included in discontinued operations in our Consolidated Statements of (Loss) Income and Comprehensive Loss.

See Note 2 - Discontinued Operations.

See accompanying notes.

7 unchanged sentences

Operating activities

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

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

Net (loss) income $ ( 107,684 ) $ 30,973 $ ( 172,799 )

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

Provision for depreciation and amortization 345 216 216

2 unchanged sentences

Changes in operating assets and liabilities 47,673 68,272 ( 2,364 )

Net cash provided by (used in) operating activities 54,449 49,915 ( 6,875 )

Net cash provided by operating activities 22,799 54,449 49,915

Investing activities

1 unchanged sentence

Financing activities

Senior debt issuance — — 164,000

Senior debt repayments — ( 40,000 ) —

Subsidiary note issuance — — 30,000

Subsidiary note repayments — — ( 70,000 )

Contribution to subsidiary — ( 144,000 ) ( 128,000 )

Payment of debt issuance costs ( 1,135 ) — —

Issuance of Series A preferred shares — 144,898 —

1 unchanged sentence

Issuances of common shares under equity incentive plans — — 1,877

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

Payroll taxes withheld and remitted on net settlement of RSUs ( 1,734 ) ( 1,304 ) ( 3,077 )

Dividends on Series A preferred shares ( 10,500 ) ( 6,125 ) —

Dividends on common shares ( 7,746 ) ( 7,798 ) ( 43,236 )

Net cash (used in) provided by financing activities ( 54,329 ) ( 50,329 ) 5,925

Net cash used in financing activities ( 21,115 ) ( 54,329 ) ( 50,329 )

Change in cash and cash equivalents 1,684 120 ( 414 )

19 unchanged sentences

Adopted Accounting Standards

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

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

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

No accounting standards were adopted during the year ended December 31, 2023 that had a material impact on our financial statements.

JAMES RIVER GROUP HOLDINGS, LTD.

9 unchanged sentences

Specialty Admitted 872 836,319 159,329 98,439 13,568 75,122 ( 3,257 ) 24,541 104,350

Casualty Reinsurance 26,766 428,033 97,820 136,427 37,334 104,172 38,754 42,987 83,033

Corporate and Other — — — — 1,153 — — 33,940 —

3 unchanged sentences

Specialty Admitted ( 4,080 ) 755,102 173,057 74,137 5,068 58,548 ( 9,648 ) 15,116 76,390

Casualty Reinsurance 47,118 438,195 179,075 134,223 39,445 220,178 27,775 31,571 159,195

Corporate and Other — — — — 9,456 — — 31,260 —

3 unchanged sentences

Specialty Admitted ( 4,898 ) 686,643 165,998 75,371 3,044 55,875 ( 8,395 ) 14,333 83,935

Casualty Reinsurance 40,151 315,717 148,040 134,133 42,554 118,150 30,716 34,347 137,544

Corporate and Other — — — — 15,134 — — 27,609 —

9 unchanged sentences

Specialty Admitted Written Premiums 499,317 396,959 1,992 104,350 1.9 %

Casualty Reinsurance Written Premiums — 2,175 85,208 83,033 102.6 %

Total Written Premiums $ 1,506,668 $ 814,759 $ 1,992 $ 693,901 0.3 %

2 unchanged sentences

Specialty Admitted Written Premiums 487,360 413,818 2,848 76,390 3.7 %

Casualty Reinsurance Written Premiums — 22,886 182,081 159,195 114.4 %

Total Written Premiums $ 1,408,524 $ 745,926 $ 2,848 $ 665,446 0.4 %

2 unchanged sentences

Specialty Admitted Written Premiums 488,377 407,626 3,184 83,935 3.8 %

Casualty Reinsurance Written Premiums — 11,622 149,166 137,544 108.4 %

Total Written Premiums $ 1,322,034 $ 740,033 $ 3,184 $ 585,185 0.5 %

7 unchanged sentences

Allowance for Credit Losses on Reinsurance Balances 580 80 — 660

Allowance for Credit Losses on Bank Loans — — — —

Total $ 16,828 $ 2,906 $ ( 1,158 ) $ 18,576

2 unchanged sentences

Allowance for Credit Losses on Reinsurance Balances 607 ( 27 ) — 580

Allowance for Credit Losses on Bank Loans — — — —

Total $ 17,287 $ 1,024 $ ( 1,483 ) $ 16,828

2 unchanged sentences

Allowance for Credit Losses on Reinsurance Balances 331 276 — 607

Allowance for Credit Losses on Bank Loans 7,181 — ( 7,181 ) —

Total $ 8,648 $ 9,702 $ ( 1,063 ) $ 17,287

In connection with the adoption of ASU 2016-13, the Company elected the fair value option in accounting for bank loan participations effective January 1, 2020.

Also u pon adoption of ASU 2016-13 , the Company established an allowance for credit losses on reinsurance balances.

JAMES RIVER GROUP HOLDINGS, LTD.

18 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures