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Risks Related to Our Business and Industry
−Removed: • Reserving for losses is an inherently uncertain process, and our actual incurred losses may be greater than our loss and loss adjustment expense reserves, which could have a material adverse effect on our financial condition and results of operations.
+Added: • Reserving for losses and loss adjustment expenses is an inherently uncertain process, and our actual incurred losses and loss adjustment expenses may be greater than our loss and loss adjustment expense reserves, which could have a material adverse effect on our financial condition and results of operations.
• Our risk management is based on estimates and judgments that are subject to significant uncertainties.
−Removed: • A decline in our financial strength rating may result in a reduction of new or renewal business.
+Added: • A decline in our financial strength rating may result in a reduction of new or renewal business and a default under our credit facility.
• We may not be able to retain key management and employees or recruit other qualified personnel, and as a result we may not be able to grow our business and may also be materially adversely affected.
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• We may be unable to obtain reinsurance coverage at reasonable prices or on terms that provide us adequate protection.
−Removed: • We have primary liability on our insurance policies for losses, even if reinsurance counterparties or insurance companies with which we have a fronting arrangement fail to make any contractually obligated payments with respect to such loss, or if we do not receive indemnification payments pursuant to an arrangement we have with a former customer.
+Added: • We have primary liability on our insurance policies for losses, even if reinsurance counterparties or insurance companies fail to make any contractually obligated payments with respect to such loss, or if we do not receive indemnification payments pursuant to an arrangement we have with a former customer.
• If we are unable to underwrite risks accurately and charge and collect competitive yet profitable rates to our policyholders, our business, financial condition and results of operations will be materially adversely affected.
• The failure of any of the loss limitations or exclusions we employ, or changes in other claims or coverage issues, could result in higher than anticipated losses.
+Added: • We have exposure to losses arising from unpredictable natural disasters, terrorist acts, and other catastrophic events, the occurrence of which could result in an increase in the number or value of claims and could exceed the amount of reinsurance we purchased to protect us from such claims.
• The effect of emerging claim and coverage issues on our business is uncertain and may result in coverage of risks that we did not factor in our policy prices.
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• We are subject to extensive regulation, and the cost of compliance with such regulation or new regulation, or the results of non-compliance, may materially adversely affect our ability to achieve our business objectives and additionally may materially adversely affect our financial condition and results of operations.
−Removed: • We have exposure to losses arising from unpredictable natural disasters, terrorist acts, and other catastrophic events, the occurrence of which could result in an increase in the number or value of claims and could exceed the amount of reinsurance we purchased to protect us from such claims.
• We, or agents we have appointed, may act based on inaccurate or incomplete information regarding the accounts we underwrite, which may cause us to misunderstand the level of risk we are insuring.
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• We may require additional capital in the future, which may not be available or available only on unfavorable terms.
−Removed: • Our credit agreement contains financial and other covenants, the breach of which could result in acceleration of payment of amounts due under our credit facility.
+Added: • Our credit agreement contains financial and other covenants, the breach of any of which could result in acceleration of payment of amounts due under our credit facility.
• We operate in a highly competitive environment, and may not be able to continue to compete effectively with larger or more well-established rivals.
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Risks Related to Taxation
+Added: • The Domestication may adversely impact our effective tax rate.
• Changes in U.S.
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operations, which may be retroactive, could have a significant impact on the Company and persons who own our shares.
−Removed: • The Company and James River Group Holdings UK Limited (“James River UK”) may be (and JRG Re, prior to its disposition, may have been) subject to U.S.
+Added: • The Company, prior to the Domestication, James River Group Holdings UK Limited (“James River UK”), prior to its dissolution, and JRG Re, prior to its disposition, may have been subject to U.S.
federal income taxation and our non-U.K.
−Removed: companies may be subject to U.K.
+Added: companies may have been subject to U.K.
taxation, which may have a material adverse effect on our operating results.
−Removed: • Persons who own our shares may be subject to U.S.
−Removed: federal income taxation on our undistributed earnings and may recognize ordinary income upon disposition of shares;
−Removed: non-corporate persons who own our shares may not qualify for the reduced tax rate for qualified dividend income on the dividends paid by us in the future, and tax-exempt organizations who own our shares may recognize unrelated business taxable income.
−Removed: Risks Related to Ownership of Our Common Shares
−Removed: • An adverse outcome of the disputes pertaining to the sale of JRG Re may have a material adverse effect on our financial position.
+Added: Risks Related to Ownership of Our Common Stock
• Litigation and legal proceedings against us or our subsidiaries could have a material adverse effect on our business, financial condition and/or results of operations.
−Removed: • The identification of material weaknesses or the failure to otherwise maintain effective internal controls may result in material misstatements in our financial reporting and/or cause us to fail to meet our periodic reporting obligations.
−Removed: • The holder of the Series A Convertible Preferred Shares (the “Series A Preferred Shares”) holds 9.9% of our aggregate voting power and may have significant influence over matters requiring shareholder approval, and additionally, any sales of a significant number of common shares by the holder may have an adverse affect on our share price.
−Removed: • The conversion of the Series A Preferred Shares into common shares would dilute the ownership of common shareholders and may adversely affect the market price of our common shares.
−Removed: • The amount of dividends that we may pay to our common shareholders is subject to restriction pursuant to the terms of the Series A Preferred Shares, and we cannot assure you that we will declare or pay dividends on our common shares in the future.
−Removed: • Dividends paid by our U.S.
−Removed: subsidiaries to James River UK may not be eligible for benefits under the U.S.-U.K.
−Removed: income tax treaty, reducing the amount of funds that would be available for the payment of dividends.
−Removed: • Our bye-laws and provisions of Bermuda law may impede or discourage a change of control transaction, which could deprive our investors of the opportunity to receive a premium for their shares.
−Removed: • Bermuda law differs from the laws in effect in the United States and may afford less protection to holders of our shares.
−Removed: • There are regulatory limitations on the ownership and transfer of our common shares.
+Added: • Failure to maintain effective internal controls may result in material misstatements in our financial reporting and/or cause us to fail to meet our periodic reporting obligations.
+Added: • The holder of the Series A Convertible Preferred Shares (the “Series A Preferred Shares”) holds 9.9% of our aggregate voting power and may have significant influence over matters requiring shareholder approval, and additionally, any sales of a significant number of common stock by the holder may have an adverse effect on our share price.
+Added: • The conversion of the Series A Preferred Shares into common stock would dilute the ownership of common shareholders and may adversely affect the market price of our common stock.
+Added: • The amount of dividends that we may pay to our common shareholders is subject to restriction pursuant to the terms of the Series A Preferred Shares and our Credit Agreement, and we cannot assure you that we will declare or pay dividends on our common stock in the future.
+Added: • There are regulatory limitations on the ownership and transfer of our common stock.
General Risk Factors
• We rely on our systems and employees, and those of certain third-party vendors and service providers in conducting our operations, and certain failures, including internal or external fraud, operational errors, systems malfunctions, or cyber-security incidents, could materially adversely affect our operations.
+Added: • The use or anticipated use of AI technologies may increase or create new operational risks.
• Our operating results have in the past varied from quarter to quarter and may not be indicative of our long-term prospects.
Risks Related to Our Business and Industry
−Removed: Reserving for losses is an inherently uncertain process, and our actual incurred losses may be greater than our loss and loss adjustment expense reserves, which could have a material adverse effect on our financial condition and results of operations.
+Added: Reserving for losses and loss adjustment expenses is an inherently uncertain process, and our actual incurred losses and loss adjustment expenses may be greater than our loss and loss adjustment expense reserves, which could have a material adverse effect on our financial condition and results of operations.
Our financial condition and results of operations depend upon our ability to assess accurately the potential losses and loss adjustment expenses under the terms of the insurance policies we underwrite.
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These estimates are based on our assessment of facts and circumstances then known, as well as estimates of future trends in claim severity, claim frequency, judicial theories of liability and other factors.
−Removed: These variables are affected by both internal and external events that could increase our exposure to
−Removed: losses, including changes in actuarial projections, claims handling procedures, inflation, climate change, economic and judicial trends, and legislative changes.
+Added: These variables are affected by both internal and external events that could increase our exposure to losses, including changes in actuarial projections, claims handling procedures, inflation, climate change, economic and judicial trends, and legislative changes.
We believe that the insurance we write is subject to above-average variation in reserve estimates.
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Our estimates could prove to be low, and this underestimation could have a material adverse effect on our financial strength.
−Removed: For example, in our Excess and Surplus Lines segment, we experienced adverse development on the reserves for losses and loss adjustment expenses of:
+Added: For example, in our Excess and
+Added: Surplus Lines segment, we experienced adverse development net of reinsurance on the reserves for losses and loss adjustment expenses of:
$76.7 million for the calendar year ended December 31, 2024, including a $52.2 million reserve charge upon execution of the E&S ADC (consideration paid in excess of initial reserves), and $32.6 million for the calendar year ended December 31, 2023, with adverse development in accident years 2020 and prior exceeding favorable development on accident years 2022 and 2021.
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Approximately 96% of our Excess and Surplus Lines net casualty loss reserves are associated with “occurrence form” policies at December 31, 2025.
+Added: Additionally, in some cases the loss can exceed the policy limits contracted.
• Even when a claim is received (irrespective of whether the policy is a “claims made” or “occurrence” basis form), it may take considerable time to fully appreciate the extent of the covered loss suffered by the insured and, consequently, estimates of loss associated with specific claims can increase over time.
• New theories of liability are enforced retroactively from time to time by courts.
−Removed: See also “ The effect of emerging claim and coverage issues on our business is uncertain ” risk factor herein .
+Added: See the Risk Factor “ The effect of emerging claim and coverage issues on our business is uncertain ” risk factor herein .
• Volatility in the financial markets, economic events and other external factors may result in an increase in the number of claims and the severity of the claims reported.
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As we enter new lines of business, or as a result of new theories of claims, we may encounter an increase in claims frequency and greater claims handling costs than we had anticipated.
−Removed: • We occasionally enter new lines of insurance, and as a consequence, we sometimes have to make estimates of future losses for risk classes with which we do not have a great deal of loss experience.
+Added: • We occasionally enter new lines of insurance, and as a consequence, we sometimes have to make estimates of future losses for risk classes with which we do not have a great deal of our own historical loss experience.
This lack of loss experience may contribute to making errors of judgment when establishing reserves.
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Small changes in assumptions, which depend heavily on our judgment and foresight, can have a significant impact on the modeled outputs.
−Removed: Although we believe that these probabilistic measures provide a meaningful indicator of the relative risk of
−Removed: certain events and changes to our business over time, these measures do not predict our actual exposure to, nor guarantee our successful management of, risks that could have a material adverse effect on our financial condition and results of operations.
−Removed: A decline in our financial strength rating may result in a reduction of new or renewal business.
+Added: Although we believe that these probabilistic measures provide a meaningful indicator of the relative risk of certain events and changes to our business over time, these measures do not predict our actual exposure to, nor guarantee our successful management of, risks that could have a material adverse effect on our financial condition and results of operations.
+Added: A decline in our financial strength rating may result in a reduction of new or renewal business and a default under our credit facility.
Companies, insurers and reinsurance brokers use ratings from independent ratings agencies as an important means of assessing the financial strength and quality of insurers and reinsurers.
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Best announced that it revised the outlook on our financial strength rating from stable to negative on such entities.
−Removed: Also, on December 20, 2023, A.M.
+Added: December 20, 2023, A.M.
Best announced that it downgraded the financial strength rating of JRG Re, our former reinsurance subsidiary, from “A-” (Excellent) with a stable outlook to “B++” (good) with a negative outlook.
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There can be no assurance that we can attract and retain the necessary employees to conduct our business activities on a timely basis or at all.
−Removed: Our competitors may offer more favorable
−Removed: compensation and/or permanent remote work arrangements to our key management or employees to incentivize them to leave our Company, or alternatively, to make it more difficult for us to recruit and hire new employees.
+Added: Our competitors may offer more favorable compensation and/or permanent remote work arrangements to our key management or employees to incentivize them to leave our Company, or alternatively, to make it more difficult for us to recruit and hire new employees.
Further, remote work by employees has allowed competitors that are located in different states or parts of the country to solicit our employees without requiring their relocation.
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Adverse economic factors, including recession, inflation, periods of high unemployment or lower economic activity could result in the sale of fewer policies than expected or an increase in frequency or severity of claims and premium defaults or both, which, in turn, could affect our growth and profitability.
−Removed: Factors such as business revenue, economic conditions, the volatility and strength of the capital markets, inflation and pandemics can all affect the business and economic environment.
+Added: Factors such as business revenue, political and economic conditions, the volatility and strength of the capital markets, inflation and pandemics can all affect the business and economic environment.
These same factors affect our ability to generate revenue and profits.
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These outcomes would reduce our underwriting profit to the extent these factors are not reflected in the rates we charge.
−Removed: We underwrite a significant portion of our insurance in (i) the Excess and Surplus Lines segment in Florida, California, Texas and New York, and (ii) the fronting and program business of the Specialty Admitted Insurance segment in Texas, California, North Carolina, Florida, and Illinois.
+Added: We underwrite a significant portion of our insurance in Texas, Florida, California, and New York.
Any economic downturn or reduced business activities in any such state, or other states where we conduct business, could have a material adverse effect on our financial condition and results of operations.
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• the Excess and Surplus Lines segment conducted business with three brokers that produced an aggregate of $689.4 million in gross written premiums, or 71.6% of that segment’s gross written premiums for the year;
−Removed: • the Specialty Admitted Insurance segment conducted business with two agencies that produced $239.5 million in gross written premiums, representing 57.7% of that segment’s gross written premiums for the year.
+Added: • the Specialty Admitted Insurance segment conducted business with five agencies that produced $174.8 million in gross written premiums, representing 83.5% of that segment’s gross written premiums for the year.
The relationship with any of these brokers or agents may not continue.
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Where necessary, we review the financial condition of potential new brokers and agents before we agree to transact business with them.
−Removed: Although failures by brokers and agents to remit premiums have not been
−Removed: material to date, there may be instances where brokers and agents collect premiums but do not remit them to us and we may be required under applicable law to provide the coverage set forth in the policy despite the absence of premiums.
+Added: Although failures by brokers and agents to remit premiums have not been material to date, there may be instances where brokers and agents collect premiums but do not remit them to us and we may be required under applicable law to provide the coverage set forth in the policy despite the absence of premiums.
Because the possibility of these events depends in large part upon the financial condition and internal operations of our brokers and agents (which in most cases is not public information), we are not able to quantify the exposure presented by this risk.
If we are unable to collect premiums from brokers and agents in the future, underwriting profits may decline and our financial condition and results of operations could be materially adversely affected.
−Removed: We rely on a select group of customers for a significant portion of our business, and the continued loss or termination of our relationship with any such customers, or a material reduction in their business, could materially adversely affect our rate of growth, results of operations and financial condition.
−Removed: Our largest customer, an agent for the Specialty Admitted Insurance segment, accounted for approximately $175.7 million (12.3%) of our consolidated gross written premium from continuing operations in 2024.
−Removed: This same agent was our largest customer in 2023, accounting for approximately $163.1 million (10.8%) of our consolidated gross written premium from continuing operations in 2023.
−Removed: No other customer generated 10.0% or more of consolidated gross written premiums from continuing operations in 2024 or in 2023.
−Removed: As of December 31, 2024, this agent had given notice of its decision to non-renew or terminate its remaining programs with the Specialty Admitted Insurance segment, with the last program scheduled to end in mid-2025.
−Removed: Our two largest customers in 2022, both agents for the Specialty Admitted Insurance segment, accounted for approximately $120.9 million (8.6%) and $110.9 million (7.9%) of our consolidated gross written premium from continuing operations in 2022.
−Removed: No customer generated 10.0% or more of consolidated gross written premiums from continuing operations for 2022.
−Removed: The continued loss or termination of our relationship with our customers, or a material reduction in business with any such party, could materially adversely affect our rate of growth, results of operations and financial condition.
+Added: We rely on a select group of customers for a significant portion of our business, and the loss or termination of our relationship with any such customers, or a material reduction in their business, could materially adversely affect our rate of growth, results of operations and financial condition.
+Added: Our largest customers are a risk purchasing group in the Excess and Surplus Lines segment and an agent in the Specialty Admitted Insurance segment.
+Added: This same Specialty Admitted Insurance segment agent was our largest customer in 2024 and 2023, accounting for approximately $175.7 million (12.3%) and $163.1 million (10.8%) of our consolidated gross written premium from continuing operations in the respective years.
+Added: No customer generated 10.0% or more of consolidated gross written premiums from continuing operations in 2025, and no customer other than the Specialty Admitted Insurance segment agent referenced above generated 10% or more of consolidated gross written premiums from continuing operations in 2024 or 2023.
+Added: In 2024 this Specialty Admitted Insurance segment agent gave notice of its decision to non-renew its remaining programs, and in connection therewith the last program terminated in mid-2025.
+Added: The loss or termination of our relationship with our customers, or a material reduction in business with any such party, could materially adversely affect our rate of growth, results of operations and financial condition.
We may be unable to obtain reinsurance coverage at reasonable prices or on terms that provide us adequate protection.
−Removed: We purchase reinsurance in many of our lines of business to help manage our exposure to insurance and reinsurance risks that we underwrite and to reduce volatility in our results.
+Added: We purchase reinsurance in many of our lines of business to help manage our exposure to insurance risks that we underwrite and to reduce volatility in our results.
The availability and cost of reinsurance are subject to prevailing market conditions, both in terms of price and available capacity, each of which can affect our business volume and profitability.
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Reinsurance capacity has become more restricted making reinsurance placements more challenging in recent years.
−Removed: Many reinsurance companies have begun to exclude certain coverages from, or alter terms in, the reinsurance contracts we enter into with them.
+Added: Many reinsurance companies exclude certain coverages from, or alter terms in, the reinsurance contracts we enter into with them.
Some exclusions relate to risks that we cannot in turn exclude from the policies we write due to business or regulatory constraints.
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Business — Purchase of Reinsurance.”
−Removed: We are subject to credit risk with regard to our reinsurance counterparties, insurance companies with which we have a fronting arrangement and an indemnification arrangement we have with a former customer.
+Added: In addition to the traditional prospective reinsurance described above, we have purchased retroactive reinsurance in the form of loss portfolio transfers and adverse development covers on certain books of our business.
+Added: This retroactive reinsurance may prove to be inadequate to cover the adverse loss development on the subject business.
+Added: In particular, the ES Top Up ADC purchased in 2024 has a $75 million limit, $23.6 million of which remains available as of December 31, 2025.
+Added: We are subject to credit risk with regard to our reinsurance counterparties, insurance companies and an indemnification arrangement we have with a former customer.
Although reinsurance makes the assuming reinsurer liable to us to the extent of the risk ceded, we are not relieved of our primary liability to our insureds as the direct insurer.
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In addition to reinsurance purchased to manage our prospective business, we have three retroactive reinsurance arrangements on legacy books of business in the Excess & Surplus Lines segment:
−Removed: loss portfolio transfer reinsurance transaction on our legacy commercial auto lines business (the “Commercial Auto LPT”);
+Added: the first, a loss portfolio transfer reinsurance transaction on our legacy commercial auto lines business (the “Commercial Auto LPT”);
the second, a combined loss portfolio transfer and adverse development cover reinsurance contract entered into in July 2024 on our Excess & Surplus Lines segment casualty portfolio losses attaching to premium earned 2010-2023, excluding, among others, losses related to commercial auto policies issued to a former large insured or its affiliates (the “casualty subject business”) (the “E&S ADC”);
and the third, an adverse development cover reinsurance contract entered into in November 2024 also covering the casualty subject business (the “E&S Top Up ADC”).
−Removed: At December 31, 2024, reinsurance recoverables on the Commercial Auto LPT were $36.6 million and reinsurance recoverables on the E&S ADC were $362.0 million.
−Removed: There were no reinsurance recoverables on the E&S Top Up ADC at December 31, 2024.
+Added: At December 31, 2025, reinsurance recoverables on the Commercial
+Added: Auto LPT were $12.4 million, reinsurance recoverables on the E&S ADC were $397.0 million, and reinsurance recoverables on the E&S Top Up ADC were $51.4 million.
+Added: Estimating reinsurance recoverables on unpaid losses is inherently uncertain and our reinsurance may ultimately be less than our estimates.
At December 31, 2025, all of our material reinsurance recoverable amounts are from companies with A.M.
−Removed: Best ratings of “A-” (Excellent) or better, or, if not rated by A.M.
−Removed: Best, have statutory surplus of $100 million or more, are collateralized by the reinsurer for our benefit through letters of credit or funds held in trust accounts, or represent recoverables from a state residual market for automobile insurance, but we cannot be sure that our reinsurers will pay all reinsurance claims on a timely basis or at all.
+Added: Best ratings of “A-” (Excellent) or better, or are collateralized by the reinsurer for our benefit through letters of credit or funds held in trust accounts, or represent recoverables from a state residual market for automobile insurance, but we cannot be sure that our reinsurers will pay all reinsurance claims on a timely basis or at all.
Similarly, in our fronting business, which we conduct through our Specialty Admitted Insurance segment, we are primarily liable to the insureds because we have issued the policies.
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Pricing involves the acquisition and analysis of historical loss data and the projection of future trends, loss costs and expenses, and inflation trends, among other factors, for each of our products in multiple risk tiers and many different markets.
−Removed: In order to accurately price our policies, we:
+Added: In order to accurately price our policies, we must:
• collect and properly analyze a substantial volume of data from our insureds;
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• unanticipated court decisions, legislation or regulatory action.
−Removed: In addition to charging profitable rates on the insurance policies we issue, we also must be able to collect the premiums, deductibles, and self-insured retentions that our insureds agreed to pay at the inception of their policies.
+Added: In addition to charging profitable rates on the insurance policies we issue, we also must be able to collect the premiums (including audit premiums), deductibles, and self-insured retentions that our insureds agreed to pay at the inception of their policies, and we may not always be able to obtain collateral from our insureds to manage this collection risk.
The inability or refusal of our insureds to pay the amounts owed by them pursuant to their policies undermines our goal of underwriting risk accurately and charging competitive yet profitable rates, and could adversely affect our results of operations and our profitability.
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The extent of losses from catastrophes is a function of the frequency of loss events, the total amount of insured exposure in the area affected by each event and the severity of the events.
−Removed: Claims from catastrophic events could exceed our amount of reinsurance purchased to protect us from such events, cause us to pay reinstatement premiums, reduce our earnings and cash flows, cause volatility in our results of operations and cash flows for any fiscal period or materially impact our financial
+Added: Claims from catastrophic events could exceed our amount of reinsurance purchased to protect us from such events, cause us to pay reinstatement premiums, reduce our earnings and cash flows, cause volatility in our results of operations and cash flows for any fiscal period or materially impact our financial condition.
For example, for the third quarter ending September 30, 2022, we incurred $5.0 million in net catastrophe losses related to Hurricane Ian.
−Removed: A large-scale pandemic, the continued threat or occurrence of terrorism, within the United States and abroad, or military and other actions, and heightened security measures in response to these types of threats may cause significant volatility and losses in our investment portfolio from declines in the equity markets and from interest rate changes in the United States, Europe and elsewhere, and result in loss of life, property damage, disruptions to commerce and reduced economic activity.
−Removed: Some of our assets in our investment portfolio may be adversely affected by declines in the equity markets and reduced economic activity caused by a large-scale pandemic or the continued threat of terrorism.
+Added: A large-scale pandemic, the continued threat or occurrence of terrorism, within the United States and abroad, or military and other actions, and heightened security measures in response to these types of threats may cause significant volatility and
+Added: losses in our investment portfolio from declines in the equity markets and from interest rate changes in the United States, Europe and elsewhere, and result in loss of life, property damage, disruptions to commerce and reduced economic activity.
Additionally, a large-scale pandemic or terrorist act could have a material effect on sales, profitability, competitiveness, marketability of product offerings, liquidity and operating results.
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Quantitative and Qualitative Disclosures About Market Risk.” A decline in interest rates reduces the return available on short-term investments and new fixed maturity investments (including those purchased for re-investment), thereby negatively impacting our net investment income on a going forward basis, while rising interest rates reduce the market value of existing fixed maturity investments, thereby negatively impacting our book value.
−Removed: Prior to 2022, interest rates had been at or near historic lows, limiting yields on fixed income investments and negatively impacting investment income.
−Removed: Increases in interest rates since 2022, while generating higher investment yields, led to declines in the fair values of our fixed income securities, influenced by the
−Removed: duration of our fixed income investments and the extent of interest rate increases.
−Removed: For example, for the year ended December 31, 2022, we experienced unrealized losses on fixed maturity investments of $193.0 million, which were recognized in other comprehensive loss.
−Removed: During 2023, the fair values of our fixed maturity securities recovered some of the unrealized losses with signs of inflation easing and optimism about future Federal Reserve interest rate cuts.
+Added: During 2023, with signs of inflation easing and optimism about future Federal Reserve interest rate cuts, the fair values of our fixed maturity securities recovered some of the unrealized losses experienced in 2022 due to increases in interest rates that year.
Unrealized gains of $99.3 million were recognized in other comprehensive income for the year ended December 31, 2023.
In 2024, interest rates rose moderately and $6.3 million of unrealized losses were recognized in other comprehensive loss for the year ended December 31, 2024.
+Added: Investment income decreased in 2025 by $9.6 million or 10.4% from the prior year and $35.3 million of unrealized gains were recognized in other comprehensive income for the year ended December 31, 2025 principally due to a lower interest rate environment in 2025 which impacted yields across several areas of the portfolio.
Some fixed income securities have call or prepayment options, which represent possible reinvestment risk in declining rate environments.
−Removed: Other fixed income securities such as mortgage-backed and asset-backed securities carry prepayment risk or, in a rising interest rate environment, may not pre-pay as quickly as expected.
+Added: Other fixed income securities such as mortgage-
+Added: backed and asset-backed securities carry prepayment risk or, in a rising interest rate environment, may not pre-pay as quickly as expected.
In addition, individual securities in our fixed income securities portfolio are subject to credit risk and default.
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Such defaults and impairments could reduce our net investment income and result in realized investment losses.
−Removed: We hold investments in bank loans (7.4% of the carrying value of our cash and invested assets (excluding restricted cash equivalents) as of December 31, 2024.
+Added: We hold investments in bank loans, which comprise 7.9% of the carrying value of our cash and invested assets (excluding restricted cash equivalents) as of December 31, 2025.
Most of these loans are issued to sub-investment grade borrowers.
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However, our investments in these projects are illiquid and the ultimate results from these investments may be unknown for some time.
+Added: Changes in renewable energy policies in the current administration have increased the risks of these investments.
We also invest in marketable equity securities.
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We may become subject to additional government or market regulation which may have a material adverse impact on our business.
−Removed: Market disruptions like those experienced during the credit-driven financial market collapse in 2008, as well as the significant amount of capital allocated to alternative asset management, have led to increased governmental as well as self-regulatory scrutiny of the insurance industry in general.
−Removed: In addition, certain legislation proposing greater regulation of the industry is periodically considered by governing bodies of some jurisdictions as well as the U.S.
+Added: Certain legislation proposing greater regulation of the insurance industry is periodically considered by governing bodies of some jurisdictions as well as the U.S.
federal government.
−Removed: The credit-driven financial market collapse in 2008 or other significant market disruptions may increase the likelihood that some increased regulation of the industry is mandated.
−Removed: Because we are a Bermuda company, we are subject to changes in Bermuda law and regulation that may have a material adverse impact on our operations, including through the imposition of tax liability or increased regulatory supervision.
−Removed: In addition, we will be exposed to any changes in the political environment in Bermuda.
−Removed: Our business could be materially adversely affected by changes in state laws, including those relating to asset and reserve valuation requirements, surplus requirements, limitations on investments and dividends, enterprise risk and risk-based capital requirements and, at the federal level, by laws and regulations that may affect certain aspects of the insurance industry, including proposals for preemptive federal regulation.
+Added: Significant market disruptions or industry changes, such as the growing amount of capital allocated to alternative asset management, may increase the likelihood that increased regulation of the industry is mandated.
+Added: Our business could be materially adversely affected by changes in state laws, including those relating to asset and reserve valuation requirements, surplus requirements, limitations on investments and dividends, enterprise risk and RBC requirements and, at the federal level, by laws and regulations that may affect certain aspects of the insurance industry, including proposals from time to time for preemptive federal regulation.
federal government generally has not directly regulated the insurance industry except for certain areas of the market, such as insurance for flood, nuclear and terrorism risks.
However, the U.S.
−Removed: federal government has undertaken initiatives or considered legislation in several areas that may affect the insurance industry, including tort reform, corporate governance and the taxation of reinsurance companies.
−Removed: The Dodd-Frank Act also established the Federal Insurance Office, which is authorized to study, monitor and report to Congress on the insurance industry and to recommend that the FSOC designate an insurer as an entity posing risks to U.S.
−Removed: financial stability in the event of the insurer’s material financial distress or failure.
−Removed: In December 2013, the Federal Insurance Office issued a report on alternatives to modernize and improve the system of insurance regulation in the United States, including increasing national uniformity through either a federal charter or effective action by the states.
−Removed: Any additional regulations established as a result of the Dodd-Frank Act or actions in response to the Federal Insurance Office Report could increase our costs of compliance or lead to disciplinary action.
+Added: federal government has undertaken initiatives or considered legislation in several areas that may affect the insurance industry, including tort reform and corporate governance.
In addition, legislation has been introduced from time to time that, if enacted, could result in the U.S.
1 unchanged sentence
We are unable to predict whether any legislation will be enacted or any regulations will be adopted, or the effect that any such developments could have on our business, financial condition or results of operations.
−Removed: Additionally, the regulatory environment surrounding information security and privacy is increasingly demanding.
+Added: Additionally, the regulatory environment surrounding information security and data privacy is increasingly demanding.
We are subject to numerous U.S.
−Removed: federal and state laws governing the protection of personal and confidential information of our clients and employees, and new privacy laws have been adopted or are being considered at the state and federal level that may be applicable to us.
+Added: federal and state laws governing the protection of personal and confidential information of our clients and employees, and these requirements are constantly evolving and developing.
The NAIC adopted an Insurance Data Security Model Law on October 24, 2017, which requires licensed insurance entities to comply with detailed information security requirements.
Most states have either adopted the NAIC Insurance Data Security Model Law or similar laws that govern the cybersecurity and data protection practices of insurers, insurance agents, and other licensed entities registered under state insurance laws .
−Removed: It is not yet known whether, and to what extent, additional state legislatures or insurance regulators where we operate will enact the NAIC Insurance Data Security Model Law in whole or in part, or in a modified form.
−Removed: Such enactments, especially if inconsistent between states or with existing laws and regulations, could raise compliance costs or increase the risk of noncompliance, with the attendant risk of being subject to regulatory enforcement actions and penalties, as well as reputational harm.
+Added: This includes the New York State Department of Financial Services ’ Part 500 Cybersecurity Regulation, which includes additional certification obligations, enhanced governance requirements, audit requirements, technology and business continuity requirements and cyber event notification obligations.
Further, several states have enacted privacy laws requiring specific disclosures regarding privacy practices and granting certain rights to consumers with respect to the use by companies of their personally identifiable information.
There has also been proposed privacy legislation at the federal level.
−Removed: These new privacy laws may impose compliance costs, and ambiguities surrounding their applicability and interpretation may increase the risk of noncompliance, with the attendant risk of being subject to regulatory enforcement actions and penalties, as well as class action litigation.
+Added: New privacy laws and information security laws, especially if inconsistent between regulators or with existing laws and regulations, may impose compliance costs, and ambiguities surrounding their applicability and interpretation may increase the risk of noncompliance, with the attendant risk of being subject to regulatory enforcement actions and penalties, as well as class action litigation and reputational harm.
Any such events could potentially have an adverse impact on our business, financial condition or results of operations.
+Added: In addition, as the insurance industry is experiencing an increased reliance on the use of artificial intelligence technologies, specifically in the areas of underwriting, claims processing and customer service, there have been increases in regulatory scrutiny on such techniques.
+Added: As a result, regulatory authorities may seek to impose stricter requirements on transparency, explainability and non-discriminatory decision-making.
+Added: Certain state and federal lawmakers, insurance regulators and advisory groups are developing or have developed regulations or guidance applicable to insurance companies that use artificial intelligence and “big data” techniques in their operations.
+Added: For example, the NAIC adopted a model bulletin on Use of Artificial Intelligence Systems by Insurers in December 2023, which has been adopted by a number of states.
+Added: Compliance with such laws, regulations and guidance could necessitate changes to our models, increase operational costs or limit the deployment of certain automated processes.
+Added: Failure to adequately address the regulations could result in enforcement actions, fines and reputational harm and could potentially have an adverse impact on our business, financial condition or results of operations.
In addition to the complexity of existing laws and regulations, the development of new laws and regulations and changes in application or interpretation of current laws and regulations also increase our legal and regulatory compliance obligations and costs.
4 unchanged sentences
In addition, if we fail to comply with these regulations, we may be subject to penalties, including fines and suspensions, which may materially adversely affect our financial condition and results of operations.
−Removed: Our admitted insurance subsidiaries are subject to extensive regulation, primarily by California (the domiciliary state for Falls Lake Fire and Casualty), Ohio (the domiciliary state for James River Insurance, James River Casualty, Stonewood Insurance and Falls Lake National), and to a lesser degree, the other jurisdictions in the United States in which we operate.
+Added: Our insurance subsidiaries are subject to extensive regulation and supervision, primarily by California (the domiciliary state for Falls Lake Fire and Casualty), Ohio (the domiciliary state for James River Insurance, James River Casualty, Stonewood Insurance and Falls Lake National), and to a lesser degree, the other jurisdictions in the United States in which we operate.
+Added: In the United States, the NAIC is a standard-setting and regulatory support organization.
+Added: Among other things, the NAIC develops and recommends adoption of model insurance laws and regulations.
+Added: Model laws and regulations promulgated by the NAIC become effective in a state only once formally adopted, and may be modified by each state.
+Added: Certain of these model laws and regulations, including as adopted by our state insurance regulators, are noted below.
Most insurance regulations are designed to protect the interests of insurance policyholders, as opposed to the interests of shareholders.
−Removed: These regulations generally are administered by a department of insurance in each state and relate to, among other things, authorizations to write certain lines of business, capital and surplus requirements, reserve requirements, rate and form approvals, investment and underwriting limitations, affiliate transactions, dividend limitations, cancellation and non-renewal of policies, changes in control, solvency, receipt of reinsurance credit, accounting principles and a variety of other financial and non-financial aspects of our business.
+Added: These regulations generally are administered by a department of insurance in each state and relate to, among other things, authorizations to write certain lines of business, capital and surplus requirements, reserve requirements, rate and form approvals, investment and underwriting limitations, affiliate transactions, dividend limitations, cancellation and non-renewal of policies, changes in control, solvency, receipt of reinsurance credit, accounting principles, governance and a variety of other financial and non-financial aspects of our business.
These laws and regulations are regularly re-examined and any changes in these laws and regulations or new laws or interpretations thereof may be more restrictive, could make it more expensive to conduct business or otherwise materially adversely affect our financial condition or operations.
−Removed: State insurance departments also conduct periodic
−Removed: examinations of the affairs of insurance companies and reinsurance companies and require the filing of annual and other reports relating to financial condition, holding company issues and other matters.
−Removed: These regulatory requirements may impose timing and expense or other constraints that could materially adversely affect our ability to achieve some or all of our business objectives.
−Removed: Failure by any of our insurance subsidiaries to comply with applicable regulations could result in a requirement for that subsidiary to cease writing business.
+Added: Further, the Company and its employees or agents acting on the Company’s behalf, may not be in full compliance with all existing applicable laws and regulations or their interpretation by the relevant authorities and, given the complex nature of the risks, it may not always be possible for the Company to ascertain compliance with such laws and regulations.
+Added: State insurance departments also conduct periodic examinations of the affairs of insurance companies and require the filing of annual and other reports relating to financial condition, holding company issues and other matters.
+Added: These regulatory
+Added: requirements may impose timing and expense or other constraints that could materially adversely affect our ability to achieve some or all of our business objectives, and may reveal deficiencies in our insurance operations or non-compliance with regulatory requirements.
+Added: Further, regulatory examinations may develop into administrative, civil or criminal proceedings, or enforcements actions, in which remedies could include fines, penalties, restitution, remedial actions, enhanced supervision or alterations in our business practices, and could result in additional expenses and reputational damages.
+Added: Failure by any of our insurance subsidiaries to comply with applicable regulations could also result in a requirement for that subsidiary to cease writing business.
In addition, regulatory authorities have broad discretion to deny or revoke licenses for various reasons, including the violation of regulations.
6 unchanged sentences
We cannot predict the effect that further deregulation would have on our business, financial condition or results of operations.
−Removed: The NAIC has developed a system to test the adequacy of statutory capital of U.S.-based insurers, known as risk-based capital or “RBC,” that many states have adopted.
−Removed: This system establishes the minimum amount of risk-based capital necessary for an insurer to support its overall business operations.
+Added: The NAIC has developed a system to test the adequacy of statutory capital of U.S.-based insurers, known as “RBC”, that many states have adopted.
+Added: This system establishes the minimum amount of RBC necessary for an insurer to support its overall business operations.
It identifies property-casualty insurers that may be inadequately capitalized by looking at certain inherent risks of each insurer’s assets and liabilities and its mix of net written premiums.
−Removed: Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action, including supervision, rehabilitation or liquidation.
−Removed: Failure to maintain adequate risk-based capital at the required levels could materially adversely affect the ability of our insurance subsidiaries to maintain regulatory authority to conduct their business.
+Added: Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action, including remedial actions, supervision, rehabilitation or liquidation.
+Added: Failure to maintain adequate RBC at the required levels could materially adversely affect the ability of our insurance subsidiaries to maintain regulatory authority to conduct their business.
+Added: Further, the application and methods of calculating RBC are subject to change.
+Added: In recent years, the NAIC has adopted, or is considering adopting, several changes impacting how RBC is calculated, including initiatives aimed at a comprehensive review of the RBC investment framework, as well as using modeling methodology to determine RBC charges for structured securities.
+Added: The NAIC’s work is ongoing and could result in changes to RBC requirements and calculations in the future, which could affect our capital planning, investment strategies and reporting obligations.
+Added: The ultimate impact on solvency position from any future material changes cannot be determined at this time.
For additional information, see “Item 1.
1 unchanged sentence
Insurance Regulation — State Regulation.”
−Removed: In addition, the various state insurance regulators have increased their focus on risks within an insurer’s holding company system that may pose enterprise risk to the insurer.
−Removed: In 2012, the NAIC adopted the NAIC Amendments.
−Removed: The NAIC Amendments, when adopted by the various states, are designed to respond to perceived gaps in the regulation of insurance holding company systems in the United States.
−Removed: One of the major changes is a requirement that an insurance holding company system’s ultimate controlling person submit annually to its lead state insurance regulator an “enterprise risk report” that identifies activities, circumstances or events involving one or more affiliates of an insurer that, if not remedied properly, are likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole.
−Removed: Other changes include (i) requiring a controlling person to submit prior notice to its domiciliary insurance regulator of a divestiture of control, (ii) having detailed minimum requirements for cost sharing and management agreements between an insurer and its affiliates and (iii) expanding the types of agreements between an insurer and its affiliates to be filed with its domiciliary insurance regulator.
−Removed: The NAIC Amendments must be adopted by a state legislature and such state’s insurance regulator in order to be effective in that state.
−Removed: Each of California and Ohio, the states in which our U.S.
−Removed: insurance subsidiaries are domiciled, adopted the NAIC Amendments, including the enterprise risk report requirement.
−Removed: In 2012, the NAIC also adopted the ORSA Model Act.
−Removed: The ORSA Model Act, when adopted by the various states, requires an insurance holding company system’s Chief Risk Officer to submit annually to its lead state insurance regulator an ORSA.
−Removed: The ORSA is a confidential internal assessment appropriate to the nature, scale and complexity of an insurer of the material and relevant risks identified by the insurer associated with an insurer’s current business plan and the sufficiency of capital resources to support those risks.
−Removed: The ORSA Model Act must be adopted by a state legislature in order to be effective in that state.
−Removed: Each of California and Ohio, the states in which our U.S.
−Removed: insurance subsidiaries are domiciled, adopted the ORSA Model Act and require an ORSA filing.
We cannot predict with certainty the effect any enacted, proposed or future state or federal regulation or NAIC initiative may have on the conduct of our business.
3 unchanged sentences
Over the past several years, changing weather patterns and climatic conditions, such as global warming, appear to have contributed to the unpredictability, frequency and severity of natural disasters and created additional uncertainty as to future trends and exposures.
−Removed: There is a substantial scientific opinion that global warming and other climate changes are increasing the frequency and severity of catastrophic weather and other events, such as hurricanes, fires, tornadoes, windstorms, floods and
−Removed: other natural disasters.
+Added: There is a substantial scientific opinion that global warming and other climate changes are increasing the frequency and severity of catastrophic weather and other events, such as hurricanes, fires, tornadoes, windstorms, floods and other natural disasters.
Such changes make it more difficult for us to predict and model catastrophic events, reducing our ability to accurately price our exposure to such events and mitigate our risks.
1 unchanged sentence
We may have exposure to losses from terrorism for which we are required by law to provide coverage.
−Removed: insurers are required by state and federal law to offer coverage for terrorism in certain commercial lines, including workers’ compensation.
+Added: insurers are required by state and federal law to offer coverage for terrorism in certain commercial lines.
As discussed under “Item 1.
3 unchanged sentences
We, or agents we have appointed, may act based on inaccurate or incomplete information regarding the accounts we underwrite, or such agents may exceed their authority or commit fraud when binding policies on our behalf.
−Removed: We, and our MGAs and other agents who have the ability to bind our policies, rely on information provided by insureds or their representatives when underwriting insurance policies.
−Removed: While we may make inquiries to validate or supplement the information provided, we may make underwriting decisions based on incorrect or incomplete information.
−Removed: It is possible that we will misunderstand the nature or extent of the activities or facilities and the corresponding extent of the risks that we insure because of our reliance on inadequate or inaccurate information.
−Removed: In addition, in the Specialty Admitted Insurance segment, MGAs and other agents have the authority to bind policies on our behalf within prescribed underwriting guidelines, and third party administrators manage and pay claims on our behalf and advise us with respect to case reserves.
+Added: We, and our agents who have the ability to bind our policies, rely on information provided by insureds or their representatives when underwriting insurance policies.
+Added: While we or our agents may make inquiries to validate or supplement the information provided, underwriting decisions may be based on incorrect or incomplete information.
+Added: It is possible that we will misunderstand the nature or extent of the activities or facilities and the corresponding extent of the risks that we insure because of our or our agents' reliance on inadequate or inaccurate information.
+Added: In addition, in the Specialty Admitted Insurance segment, our general agents have the authority to bind policies on our behalf within prescribed underwriting guidelines, and third party administrators manage and pay claims on our behalf and advise us with respect to case reserves.
If any such agents exceed their authority, breach their obligations to us, fail to maintain proper licenses, have weak internal controls, or engage in fraudulent activities, our reputation could suffer, we may experience regulatory intervention, or our financial condition and results of operations could be materially adversely affected.
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These include decisions such as setting underwriting guidelines and standards, product design and pricing, determining which business opportunities to pursue, claims management decisions, and other decisions.
−Removed: Although we employ controls and procedures designed to monitor employees’ business
−Removed: decisions and prevent us from taking excessive risks, these controls and procedures may not be effective.
+Added: Although we assign underwriting authorities and employ controls and procedures designed to monitor employees’ business decisions and prevent us from taking excessive risks, these controls and procedures may not be effective.
If our employees take excessive risks, the impact of those risks could have a material adverse effect on our financial condition and business operations.
2 unchanged sentences
Our ability to underwrite depends largely upon the expected quality of our claims paying process and our perceived financial strength as estimated by potential insureds, brokers, other intermediaries, independent rating agencies, and our regulators.
−Removed: To the extent that our existing capital is insufficient to fund our future operating requirements, cover claim losses, satisfy ratings agencies in order to maintain a satisfactory rating, or meet the capital requirements of our regulators in order to maintain our insurance licenses, we may need to raise additional capital in the future through offerings of debt, hybrid or equity securities or through suspension or reduction of dividends, or otherwise to:
+Added: To the extent that our existing capital is insufficient to fund our future operating requirements, cover claim losses, satisfy ratings agencies in order to maintain a satisfactory rating, or meet the capital requirements of our regulators in order to maintain our insurance licenses, we may need
+Added: to raise additional capital in the future through offerings of debt, hybrid or equity securities or through suspension or reduction of dividends, or otherwise to:
• fund liquidity needs caused by underwriting or investment losses;
• replace capital lost in the event of adverse reserve developments;
−Removed: • satisfy letters of credit or guarantee bond requirements that may be imposed by our clients or by regulators;
+Added: • satisfy guarantee bond requirements that may be imposed by our regulators;
• meet rating agency or regulatory capital requirements;
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In the May Equity Offering, we announced the offering of 6,497,500 shares at $31.00 per share the day after our shares had a closing market price equal to $46.50.
−Removed: Also, on March 1, 2022 we issued 150,000 Series A Perpetual Cumulative Convertible Preferred Shares, par value $0.00125 per share (the "Series A Preferred Shares"), for an aggregate purchase price of $150 million, primarily to protect our balance sheet after experiencing $115.0 million of adverse reserve development in our former casualty reinsurance segment in the fourth quarter of 2021.
+Added: Also, on March 1, 2022 we issued 150,000 Series A Preferred Shares for an aggregate purchase price of $150 million, primarily to protect our balance sheet after experiencing $115.0 million of adverse reserve development in our former casualty reinsurance segment in the fourth quarter of 2021.
The Series A Preferred Shares, among other things, have the right to receive a payment on account of the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company before any payment may be made to holders of any other class or series of capital shares, pay dividends to the security holders at the initial rate of 7% of their liquidation preference of $1,000 per share per annum, include restrictions that may limit our ability to pay dividends to common shareholders and may not be redeemed at our election.
−Removed: See the Risk Factors " The Series A Preferred Shares have rights, preferences and privileges that are not held by, and are preferential to the rights of, our common shareholders, which could adversely affect our liquidity and financial condition" and " The amount of dividends that we may pay to our common shareholders is subject to restrictions pursuant to the terms of the Series A Preferred Shares, and we cannot assure you that we will declare or pay dividends on our common shares in the future."
+Added: See the Risk Factors “ The Series A Preferred Shares have rights, preferences and privileges that are not held by, and are preferential to the rights of, our common shareholders, which could adversely affect our liquidity and financial condition ” and “ The amount of dividends that we may pay to our common shareholders is subject to restrictions pursuant to the terms of the Series A Preferred Shares and our Credit Agreement, and we cannot assure you that we will declare or pay dividends on our common stock in the future.
Additionally, on November 11, 2024 we entered into (i) an amendment of the investment agreement with the holder of the Series A Preferred Shares, which provided for the conversion of 37,500 Series A Preferred Shares, having a liquidation value of $37.5 million, into common shares, and (ii) a subscription agreement to issue common shares with a value of $12.5 million.
−Removed: The price per share utilized for the share issuances pursuant to the two agreements was $6.40, resulting in the issuance of 7,812,500 common shares in the aggregate.
+Added: The price per share utilized for the share issuances pursuant to these two agreements was $6.40, resulting in the issuance of 7,812,500 common shares in the aggregate.
The closing price of our common shares on November 11, 2024, the last completed trading day prior to our announcement of the share issuances was $6.62 per share.
1 unchanged sentence
Further, our ability to raise debt and certain types of equity capital may be constrained by covenants in our existing credit facility.
−Removed: See the Risk Factor “ Our credit agreement contains financial and other covenants, the breach of which could result in acceleration of payment of amounts due under our credit facility ” below.
+Added: See the Risk Factor “ Our credit agreement contains financial and other covenants, the breach of any of which could result in acceleration of payment of amounts due under our credit facility ” below.
Additional capital raised through the issuance of debt would most likely result in creditors having rights, preferences and privileges senior or otherwise superior to those of our shareholders and may limit our flexibility in operating our business and make it more difficult to obtain capital in the future.
2 unchanged sentences
Our credit agreement contains financial and other covenants, the breach of any of which could result in acceleration of payment of amounts due under our credit facility .
−Removed: As of December 31, 2024, we had an outstanding unsecured balance of approximately $185.8 million in the aggregate under our bank credit agreement.
−Removed: The agreement contains certain financial covenants that require us to maintain consolidated net worth in excess of a specified minimum amount and a leverage ratio as of the end of any fiscal quarter not in excess of 0.35 to 1.
−Removed: The agreement contains other covenants which, among other things, require ongoing compliance with applicable insurance regulations and require each of our regulated insurance subsidiaries to maintain ratings from A.M.
−Removed: Best not lower than an A-.
−Removed: Breaches of any of the covenants could result in acceleration of our obligations to repay our outstanding indebtedness under such agreement if we are unable to obtain a waiver or amendment from our lender, and otherwise could impair our ability to borrow funds or result in higher borrowing costs.
+Added: As of December 31, 2025, we had an outstanding unsecured balance of approximately $210.8 million in the aggregate under our Credit Agreement dated June 12, 2025, which provides for a $212.5 million unsecured revolving credit facility (the “Credit Agreement”).
+Added: The Credit Agreement contains certain financial covenants that require us to maintain consolidated net worth in excess of a specified minimum amount, a leverage ratio as of the end of any fiscal quarter not in excess of 0.35 to 1 and minimum RBC ratio levels at James River Insurance.
+Added: The agreement contains other covenants which, among other things, require ongoing compliance with applicable insurance regulations, require each of our regulated insurance subsidiaries to maintain ratings from A.M.
+Added: Best not lower than an A- and limits the payment of dividends on our Series A Preferred Shares and shares of common stock to an aggregate of $20 million per annum.
+Added: Breaches of any of the covenants could result in acceleration of our obligations to repay our outstanding indebtedness under the Credit Agreement if we are unable to obtain a waiver or amendment from our lender, and otherwise could impair our ability to borrow funds or result in higher borrowing costs.
We operate in a highly competitive environment and we may not continue to be able to compete effectively against larger or more well-established business rivals.
26 unchanged sentences
If actual renewals do not meet expectations or if we choose not to write a renewal (including in connection with the early termination of insurance policies), our premiums written in future years and our future operations could be materially adversely affected.
−Removed: We may change our underwriting guidelines or our strategy without shareholder approval.
−Removed: Our management has the authority to change our underwriting guidelines or our strategy without notice to our shareholders and without shareholder approval.
−Removed: As a result, we may make fundamental changes to our operations without shareholder approval, which could result in our pursuing a strategy or implementing underwriting guidelines that may be materially different from the strategy or underwriting guidelines described in the section titled “Item 1.
−Removed: Business” or elsewhere in this Annual Report.
If California, Ohio or any other state in which our insurance companies are admitted significantly increases the assessments our insurance companies are required to pay, our financial condition and results of operations will suffer.
−Removed: Our insurance companies are subject to assessments in California (the domiciliary state for Falls Lake Fire and Casualty), Ohio (the domiciliary state for James River Insurance, James River Casualty, Stonewood Insurance and Falls Lake National) and other states in which our insurance companies may be admitted, for various purposes, including the provision of funds necessary to fund the operations of the various insurance departments and the state funds that pay covered claims under certain policies written by impaired, insolvent or failed insurance companies.
+Added: Our insurance companies are subject to assessments in California (the domiciliary state for Falls Lake Fire and Casualty), Ohio (the domiciliary state for James River Insurance, James River Casualty, Stonewood Insurance and Falls Lake National)
+Added: and other states in which our insurance companies may be admitted, for various purposes, including the provision of funds necessary to fund the operations of the various insurance departments and the state funds that pay covered claims under certain policies written by impaired, insolvent or failed insurance companies.
These assessments are generally set based on an insurer’s percentage of the total premiums written in the insurer’s state within a particular line of business.
3 unchanged sentences
Our use of third-party claims administrators in certain lines of business may result in higher losses and loss adjustment expenses.
−Removed: Historically, our Excess and Surplus Lines and Specialty Admitted Insurance segments handled all claims using employed staff.
−Removed: As we have entered new lines of business, we now use third-party claims administrators and contract employees to administer claims subject to the supervision of our employed staff.
−Removed: It is possible that these contract employees and third-party claims administrators may achieve less desirable results on claims than has historically been the case for our internal staff, which could result in significantly higher losses and loss adjustment expenses in those lines of business.
+Added: We use third-party claims administrators and contract employees to administer claims subject to the supervision of our employed staff for some lines of business and programs we manage.
+Added: It is possible that these contract employees and third-party claims administrators may achieve less desirable results on claims than is the case for our internal staff, which could result in significantly higher losses and loss adjustment expenses in those lines of business.
Risks Related to Taxation
+Added: Our Corporate Effective Tax Rate may increase as a result of the Domestication.
+Added: Following the Domestication, we are subject to U.S.
+Added: tax on our income and capital gains and the combined effective tax rate with respect to us and our direct and indirect subsidiaries (the “Effective Tax Rate”) may change significantly, which could materially impact our financial results, including our earnings and cash flow, and reduce the amount of cash available for dividends for periods after the Domestication.
+Added: The Effective Tax Rate, which fluctuates significantly from period to period, is based upon the application of currently applicable income tax laws and regulations, as well as current judicial and administrative interpretations of these income tax laws and regulations, in various jurisdictions, including many other than the jurisdiction where we are organized and domiciled.
+Added: The highest statutory corporate tax rate for U.S.
+Added: federal income tax purposes is currently 21%.
+Added: The Effective Tax Rate for purposes of financial reporting may, however, vary significantly from the statutory rates under which we operate (including the U.S.
+Added: statutory rate that would apply after the Domestication) because of, among other things, temporary differences in the recognition of income and expense for U.S.
+Added: GAAP and tax purposes.
+Added: We are unable to predict with certainty the impact of the Domestication on the Effective Tax Rate going forward.
+Added: In addition, the tax laws of the United States and other jurisdictions could change in the future, and those changes could cause a material increase in our Effective Tax Rate at a later date as well.
+Added: Our ability to utilize certain U.S.
+Added: federal income tax attributes may be limited.
+Added: The Company’s consolidated balance sheet as of December 31, 2025 includes net deferred tax assets of $64.9 million, which includes a one-time tax benefit to the Company arising from the Domestication of $14.1 million.
+Added: The ability of the Company to utilize its deferred tax assets for U.S.
+Added: federal income tax purposes is subject to a number of limitations.
+Added: Under current U.S.
+Added: tax law, the tax attributes that resulted in the one-time tax benefit from the Domestication may be carried forward indefinitely.
+Added: As a result, the Company believes that it is more likely than not that it will generate sufficient income to utilize such tax attributes in full.
+Added: However, the Company’s ability to utilize such tax attributes at the level reflected on its balance sheet may be limited by a failure by the Company to generate sufficient income or execute tax planning strategies, a change in tax law, a challenge by a taxing authority, or otherwise.
Changes in tax law may have a significant impact on the Company.
1 unchanged sentence
BEPS generally refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to locations with low or no tax and little or no economic activity, for the purpose of reducing a multinational group’s aggregate tax liability.
+Added: Prior to the Domestication, we were a multinational group.
In 2021, the OECD/G20 Inclusive Framework on BEPS published a statement updating and finalizing the key components of a “two pillar” plan for global tax reform, as agreed among a number of countries across the globe.
4 unchanged sentences
Legislatures in multiple countries outside of the European Union have also drafted legislation to implement the OECD’s minimum tax proposal.
−Removed: As a result of these developments, the tax laws of certain countries in which we and our affiliates do business could change on a prospective or retroactive basis, and any such changes, including the adoption of the global minimum tax rules, could subject us to additional taxes and costs for tax compliance.
+Added: As a result of these developments, the tax laws of certain countries in which we and our affiliates did business prior to the
+Added: Domestication could change, including on a prospective or retroactive basis, and any such changes, including the adoption of the global minimum tax rules, could subject us to additional taxes and costs for tax compliance with respect to tax periods (or portions thereof) beginning prior to the Domestication.
+Added: On July 4, 2025, the United States enacted the One Big Beautiful Bill Act (the “OBBBA”), which includes certain changes to U.S.
+Added: corporate tax provisions and extends many of the provisions of the Tax Cuts and Jobs Act that were set to expire at the end of 2025.
+Added: The Company does not currently expect the OBBBA to have a material impact on the Company.
More broadly, our tax positions could be materially adversely affected by several factors, including:
−Removed: new or changing tax laws both domestically and internationally, including regulations and treaties, or the interpretation thereof, tax policy initiatives and reforms under consideration by the international community, the practices of tax authorities in jurisdictions in which we
−Removed: operate, and the resolution of issues arising from tax audits, examinations or assessments and any related interest or penalties.
+Added: new or changing tax laws both domestically and internationally, including regulations and treaties, or the interpretation thereof, tax policy initiatives and reforms under consideration by the international community, the practices of tax authorities in jurisdictions in which we operate, and the resolution of issues arising from tax audits, examinations or assessments and any related interest or penalties.
We are currently unable to predict whether such changes or events will occur and, if so, the ultimate impact on our business.
−Removed: The Company and James River Group Holdings UK Limited may be subject to U.S.
+Added: The Company and James River Group Holdings UK Limited may have been subject to U.S.
federal income taxation.
−Removed: The Company is incorporated under the laws of Bermuda and James River UK is incorporated under the laws of England and Wales.
+Added: The Company was incorporated under the laws of Bermuda prior to the Domestication and James River UK was incorporated under the laws of England and Wales prior to its dissolution.
JRG Re was incorporated under the laws of Bermuda prior to its sale by the Company.
8 unchanged sentences
However, there are no definitive standards provided by the Internal Revenue Code of 1986, as amended (the “Code”), regulations or court decisions as to the specific activities that constitute being engaged in the conduct of a trade or business within the United States, and any such determination is essentially factual in nature and must be made annually.
−Removed: The IRS could assert that (1) our non-U.S.
−Removed: holding companies are engaged in a trade or business in the United States or, under the applicable income tax treaty, are engaged in a trade or business in the United States through a permanent establishment, and thus are subject to current U.S.
+Added: The Internal Revenue Service (the “IRS”) could assert that (1) our non-U.S.
+Added: holding companies, prior to the Domestication, were engaged in a trade or business in the United States or, under the applicable income tax treaty, were engaged in a trade or business in the United States through a permanent establishment, and thus were subject to current U.S.
federal income taxation, or (2) JRG Re, prior to its disposition, was engaged in a trade or business in the United States or, under the applicable income tax treaty, was engaged in a trade or business in the United States through a permanent establishment, and thus was subject to current U.S.
1 unchanged sentence
If our non-U.S.
−Removed: holding companies or JRG Re, prior to its disposition, were deemed to be engaged in a trade or business in the United States (or, under the applicable income tax treaty, were deemed to be so engaged through a permanent establishment), our non-U.S.
−Removed: holding companies or JRG Re, prior to its disposition, as applicable, would become subject to U.S.
+Added: holding companies, prior to the Domestication, or JRG Re, prior to its disposition, were deemed to be engaged in a trade or business in the United States (or, under the applicable income tax treaty, were deemed to be so engaged through a permanent establishment), our non-U.S.
+Added: holding companies, prior to the Domestication, or JRG Re, prior to its disposition, as applicable, would become subject to U.S.
federal income tax on income “effectively connected” (or treated as effectively connected) with the U.S.
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Any such federal tax liability could materially adversely affect our results of operations.
−Removed: tax-exempt organizations who own our shares may recognize unrelated business taxable income.
−Removed: tax-exempt organization may recognize unrelated business taxable income if a portion of any subpart F insurance income we may have is allocated to it.
−Removed: In general, subpart F insurance income will be allocated to a tax-exempt organization owning (or treated as owning) our shares if we are a CFC (as defined below) and it is a U.S.
−Removed: 10% Shareholder (as defined below) or we earn related person insurance income and we satisfy the RPII Test (as defined below).
−Removed: We cannot assure you that U.S.
−Removed: persons holding our shares (directly or indirectly) will not be allocated subpart F insurance income.
−Removed: tax-exempt organizations should consult their own tax advisors regarding the risk of recognizing unrelated business taxable income due to their ownership of our shares.
−Removed: We may become subject to U.S.
−Removed: withholding and information reporting requirements under the Foreign Account Tax Compliance Act (“FATCA”) provisions.
−Removed: The FATCA provisions of the Code generally impose a 30% withholding tax regime with respect to (i) certain U.S.
−Removed: source income (including interest and dividends) (“withholdable payments”) and (ii) “passthru payments” (generally, withholdable payments and payments that are attributable to withholdable payments) made by foreign financial institutions (“FFIs”).
−Removed: Under proposed regulations promulgated by the U.S.
−Removed: Department of the Treasury, on which taxpayers may rely until final regulations are issued, withholdable payments do not include gross proceeds from the sale or other disposition of property that can produce U.S.
−Removed: source interest or dividends.
−Removed: As a general matter, FATCA was designed to require U.S.
−Removed: persons’ direct and indirect ownership of certain non-U.S.
−Removed: accounts and non-U.S.
−Removed: entities to be reported to the IRS.
−Removed: The application of the FATCA withholding rules were phased in beginning July 1, 2014, with withholding on foreign passthru payments made by FFIs taking effect after the date of publication of final regulations defining the term foreign passthru payment.
−Removed: The United States has entered into intergovernmental agreements between the United States and Bermuda and between the United States and the United Kingdom (the “IGAs”), which potentially modify the FATCA withholding regime described above with respect to us and our common shares.
−Removed: There can be no certainty as to whether the Company will be treated as a FFI under FATCA.
−Removed: We strongly urge you to consult your own tax advisor regarding the potential impact of FATCA, the IGAs and any non-U.S.
−Removed: legislation implementing FATCA.
Changes in U.S.
tax laws may be retroactive and could subject us and/or U.S.
−Removed: persons who own our shares to U.S.
+Added: persons who own our stock to U.S.
income taxation.
Legislative proposals or administrative or judicial developments could result in an increase in the amount of U.S.
−Removed: tax payable by us or by an owner of our shares or reduce the attractiveness of our products.
+Added: tax payable by us or by an owner of our stock or reduce the attractiveness of our products.
Any such developments could materially adversely affect our results of operations.
−Removed: Tax laws and interpretations thereof, including with respect to whether a company is engaged in a U.S.
−Removed: trade or business, is a controlled foreign corporation (“CFC”), has related party insurance income, or is a PFIC (as defined in Section 1297(a) of the
−Removed: Code), are subject to change, possibly on a retroactive basis.
+Added: Tax laws and interpretations thereof are subject to change, possibly on a retroactive basis.
We are not able to predict if, when or in what form any guidance on such tax laws will be provided and whether such guidance will have a retroactive effect.
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Department of the Treasury or the IRS reviews our former intercompany agreements and successfully asserts, under Section 482 or 845 of the Code, that the terms do not reflect arm’s-length transactions, we may owe additional tax.
−Removed: Reduced tax rates for qualified dividend income may not be available in the future.
−Removed: We believe that the dividends paid on our common shares should qualify (and should have historically qualified) as “qualified dividend income” as long as the common shares are listed on a national securities exchange and we are not (and were not) a PFIC.
−Removed: Qualified dividend income received by non-corporate U.S.
−Removed: persons is generally eligible for long-term capital gain rates.
−Removed: There has been proposed legislation before the U.S.
−Removed: Senate and House of Representatives that would exclude shareholders of certain foreign corporations from this advantageous tax treatment.
−Removed: If such legislation were to become law, non-corporate U.S.
−Removed: persons would no longer qualify for the reduced tax rate on the dividends paid by us.
−Removed: companies may be subject to U.K.
−Removed: tax that may have a material adverse effect on our operating results.
−Removed: We intend to operate in such a manner so that none of our companies other than our intermediate holding company incorporated in the United Kingdom, James River UK, should be resident in the U.K.
−Removed: for tax purposes or have a permanent establishment in the U.K.
−Removed: Accordingly, we expect that none of our companies other than James River UK should be subject to U.K.
−Removed: However, since applicable law and regulations do not conclusively define the activities that constitute conducting business in the U.K.
−Removed: through a permanent establishment, the U.K.
−Removed: HM Revenue & Customs might contend successfully that one or more of our other companies is conducting business in the U.K.
−Removed: through a permanent establishment in the U.K., and therefore such entities could become subject to U.K.
−Removed: persons who owned our shares prior to January 1, 2025 may be subject to U.S.
−Removed: federal income taxation on our undistributed earnings and may recognize ordinary income upon disposition of shares.
−Removed: If we are considered a PFIC for U.S.
−Removed: federal income tax purposes, a U.S.
−Removed: person who owned any of our shares prior to January 1, 2025, could be subject to adverse tax consequences, including becoming subject to a greater tax liability than might otherwise apply and to tax on amounts in advance of when tax would otherwise be imposed, in which case your investment could be materially adversely affected.
−Removed: The PFIC rules include provisions intended to provide an exception for qualifying insurance corporations (“QIC”) engaged in the active conduct of an insurance business.
−Removed: Generally, a QIC is a company (i) that would be subject to tax under special provisions related to insurance companies if the company was a U.S.
−Removed: entity, and (ii) the applicable insurance liabilities of which constitute more than 25% of its total assets as reported on the company’s applicable financial statement.
−Removed: On January 15, 2021, the IRS and U.S.
−Removed: Department of the Treasury issued final regulations and proposed regulations that provide guidance regarding the PFIC rules and the QIC exception.
−Removed: More specifically, the complex regulations provide, among other things, clarity on the application of “applicable insurance liabilities” and the “applicable financial statement,” as well as the requirements to be engaged in the “active conduct” of an insurance business.
−Removed: The IRS has requested comments on several aspects of the proposed regulations, which are not effective until adopted in final form.
−Removed: It is uncertain when the proposed regulations will be finalized, and whether the provisions of any final or temporary regulations will vary from the proposed regulations.
−Removed: We believe that we were not a PFIC for U.S.
−Removed: federal income tax purposes while we owned JRG Re, through which we conducted our casualty reinsurance business.
−Removed: Our belief that we were not a PFIC is based, in part, on the fact that we believe that we were a QIC engaged in the active conduct of an insurance business.
−Removed: New regulations or pronouncements interpreting or clarifying these rules may be forthcoming.
−Removed: We cannot predict what impact, if any, such guidance would have on an investor that is subject to U.S.
−Removed: federal income taxation.
−Removed: As a result, we cannot assure you that we, or one of our subsidiaries, will not have been deemed a PFIC by the IRS.
−Removed: If we, or one of our subsidiaries, were considered a PFIC, it could have material adverse tax consequences for an investor that is subject to U.S.
−Removed: federal income taxation.
−Removed: corporation generally will be classified as a CFC if U.S.
−Removed: persons, each of whom owns, directly, indirectly, or constructively, at least 10% of the voting power or value of such corporation’s stock (“U.S.
−Removed: 10% Shareholders”), own in the aggregate more than 50% of the voting power or value of the stock of such corporation.
−Removed: Tax legislation enacted in 2017
−Removed: eliminated the prohibition on “downward attribution” from non-U.S.
−Removed: persons to U.S.
−Removed: persons under the CFC constructive ownership rules.
−Removed: As a result, our U.S.
−Removed: subsidiaries were deemed to own all of the stock of our non-U.S.
−Removed: subsidiaries prior to the disposition or dissolution of such non-U.S.
−Removed: subsidiaries (other than James River UK), for purposes of classifying those non-U.S.
−Removed: subsidiaries as CFCs.
−Removed: The legislative history under such tax legislation indicates that this change to the CFC constructive ownership rules was not intended to cause our then non-U.S.
−Removed: subsidiaries to be treated as CFCs with respect to a 10% U.S.
−Removed: Shareholder that is not related (within the meaning of Section 954(d)(3) of the Code) to our U.S.
−Removed: However, it is not clear whether the IRS or a court would interpret the change made by the tax legislation in a manner consistent with such indicated intent.
−Removed: Under these rules, if a foreign corporation is a CFC, each U.S.
−Removed: 10% Shareholder who owns directly or indirectly shares of the CFC on the last day of the CFC’s taxable year must annually include in its taxable income its pro rata share of the CFC’s “subpart F income,” even if no distributions are made.
−Removed: Subpart F income typically includes “foreign personal holding company income” (such as interest, dividends and other types of passive income), as well as insurance and reinsurance income (including underwriting and investment income).
−Removed: In general (subject to the special rules applicable to “related person insurance income” described below), for purposes of taking into account insurance income, a foreign insurance company will be treated as a CFC if U.S.
−Removed: 10% Shareholders collectively own more than 25% of the voting power or value of the company’s shares at any point during any year.
−Removed: As discussed above, we cannot assure you that we were not previously a CFC.
−Removed: If you are a U.S.
−Removed: person, we strongly urge you to consult your own tax advisor concerning the CFC rules.
−Removed: Related Person Insurance Income .
−Removed: Under proposed regulations, if (i) our gross income attributable to insurance or reinsurance policies pursuant to which the direct or indirect insureds are our direct or indirect U.S.
−Removed: shareholders or persons related to such U.S.
−Removed: shareholders equals or exceeds 20% of our gross insurance income in any taxable year;
−Removed: and (ii) direct or indirect insureds and persons related to such insureds own directly or indirectly 20% or more of the voting power or value of our shares (together, the “RPII Test”), a U.S.
−Removed: person who owned any of our shares directly or indirectly on the last day of such taxable year would most likely be required to include its allocable share of our related person insurance income for such taxable year in its income, even if no distributions are made.
−Removed: We do not believe that the 20% gross insurance income threshold was met while we owned JRG Re.
−Removed: Additionally, certain proposed regulations would expand the scope of related person insurance income for the time in which we owned non-U.S.
−Removed: operating companies to potentially include all of the insurance income of our non-U.S.
−Removed: operating companies earned from reinsuring affiliates if such companies were majority owned (directly, indirectly or by application of certain constructive ownership rules) by U.S.
−Removed: It is not certain whether any of these proposed regulations will be adopted in their proposed form or what changes or clarifications might ultimately be made thereto or whether any such changes, as well as any interpretation or application of the related person insurance income rules by the IRS, the courts, or otherwise, might have retroactive effect.
−Removed: Consequently, we cannot assure you that a person who was a direct or indirect U.S.
−Removed: shareholder will not be required to include amounts in its income in respect of related person insurance income in any taxable year in which we owned non-U.S.
−Removed: operating companies.
−Removed: Dispositions of Our Shares .
−Removed: shareholder is treated as disposing of shares in a CFC of which it is a U.S.
−Removed: 10% Shareholder, or of shares in a foreign insurance corporation that has related person insurance income and in which U.S.
−Removed: persons collectively own 25% or more of the voting power or value of the company’s shares, any gain from the disposition will generally be treated as a dividend to the extent of the U.S.
−Removed: shareholder’s portion of the corporation’s undistributed earnings and profits, as the case may be, that were accumulated during the period that the U.S.
−Removed: shareholder owned the shares.
−Removed: In addition, the shareholder will be required to comply with certain reporting requirements.
−Removed: We may become subject to taxes in Bermuda, which may have a material adverse effect on our results of operations and your investment.
+Added: We may become subject to taxes in Bermuda, which may have a material adverse effect on our results of operation and your investment.
As discussed above, the OECD is coordinating a global effort to reform certain aspects of the international tax system.
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No tax is chargeable under the CIT Act until tax years starting on or after January 1, 2025.
−Removed: Provided that the Company is not part of a multi-national group, it is not currently expected to be subject to tax under the CIT Act and, under current Bermuda law, there is no other income, corporate or profits tax or withholding tax, capital gains tax or capital transfer tax payable by the Company.
−Removed: The Company has obtained from the Minister of Finance under The Exempted Undertaking Tax Protection Act of 1966, as amended (“EUTP Act”) an assurance that, in the event that Bermuda enacts legislation imposing tax computed on profits, income, any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance, then the imposition of any such tax shall not be applicable to the Company or to any of its operations or its shares, debentures or other obligations, until March 31, 2035.
−Removed: The Company could be subject to taxes in Bermuda after that date.
−Removed: This assurance is subject to the proviso that it is not to be construed so as to prevent the application of any tax or duty to such persons as are ordinarily resident in Bermuda or to prevent the application of any tax payable in accordance with the provisions of the Land Tax Act 1967 or otherwise payable in relation to any property leased to the Company.
−Removed: In the event the Company is subject to tax under the CIT Act, this would supersede the assurance received from the Minister of Finance under the EUTP Act.
−Removed: Risks Related to Ownership of Our Common Shares
−Removed: The trading price of our common shares has been, and may continue to be, volatile, and you could lose all or part of your investment.
−Removed: Volatility in the market price of our common shares may prevent you from being able to sell your common shares at or above the price you paid.
−Removed: The market price for our common shares has, and may continue to, fluctuate significantly for various reasons, including, without limitation:
+Added: Although the Company was a Bermuda tax resident during part of the 2025 tax year, it qualified for the limited international footprint exemption under the CIT Act and was not in scope of the corporate income tax for the 2025 tax year, and therefore no liability under the CIT Act is expected to result.
+Added: If this position were successfully challenged by the Bermuda taxing authority, the Company could owe tax for the 2025 tax year, which may adversely affect our results of operations and profitability.
+Added: Risks Related to Ownership of Our Common Stock
+Added: The trading price of our common stock has been, and may continue to be, volatile, and you could lose all or part of your investment.
+Added: Volatility in the market price of our common stock may prevent you from being able to sell your common stock at or above the price you paid.
+Added: The market price for our common stock has, and may continue to, fluctuate significantly for various reasons, including, without limitation:
• our operating and financial performance and prospects;
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• our creditworthiness, financial condition, performance and prospects;
−Removed: • termination of payment of dividends on our common shares, or payment of a reduced amount of dividends;
+Added: • termination of payment of dividends on our common stock, or payment of a reduced amount of dividends;
• actual or anticipated growth rates relative to our competitors;
−Removed: • perceptions of the investment opportunity associated with our common shares relative to other investment alternatives;
+Added: • perceptions of the investment opportunity associated with our common stock relative to other investment alternatives;
• speculation by the investment community regarding our business;
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• changes in laws or government regulation, including tax or insurance laws and regulations;
−Removed: • potential characterization of us as a PFIC for periods prior to the dispositions of JRG Re;
• general market, economic and political conditions;
• changes in conditions or trends in our industry, geographies or customers;
−Removed: • arrival and departure of key personnel;
−Removed: • the number of common shares that are publicly traded;
−Removed: • the offering and issuance of common shares or other securities by us, sales of common shares by our directors or executive officers, or sales of a significant number of common shares issued upon conversion of additional Series A Preferred Shares;
+Added: • arrival and departure of directors, executive officers and other key personnel;
+Added: • the number of shares of common stock that are publicly traded;
+Added: • the offering and issuance of common stock or other securities by us, sales of common stock by our directors or executive officers, or sales of a significant number of shares of common stock issued upon conversion of additional Series A Preferred Shares;
• adverse resolution of litigation against us.
−Removed: In addition, stock markets, including the NASDAQ Stock Market (the market on which our common shares are traded), have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities issued by many companies, including companies in our industry.
+Added: In addition, stock markets, including the Nasdaq Stock Market (the market on which our common stock is traded), have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities issued by many companies, including companies in our industry.
In the past, some companies that have had volatile market prices for their securities have been subject to class action or derivative lawsuits.
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Legal Proceedings” for more information.
−Removed: As a result of the factors described above, shareholders may not be able to resell their common shares at or above their purchase price or may not be able to resell them at all.
−Removed: These market and industry factors may materially reduce the market price of our common shares, regardless of our operating performance.
−Removed: We are involved in disputes relating to the Stock Purchase Agreement and the sale of JRG Re to Fleming, which closed on April 16, 2024.
−Removed: An adverse outcome to these matters may have a material adverse effect on our financial position.
−Removed: In accordance with the Stock Purchase Agreement, the cash portion of the purchase price (the “Closing Date Purchase Price”) received by the Company for the sale of JRG Re on April 16, 2024 (the “Closing Date”) was calculated based on an estimated closing statement, which in turn was based on an estimated balance sheet of JRG Re.
−Removed: Under the Stock Purchase Agreement, the estimated closing statement is subject to a post-closing adjustment process between the Company and Fleming to produce a final closing statement based on a final balance sheet of JRG Re as of the Closing Date.
−Removed: Fleming delivered a closing statement to the Company, and pursuant to the procedures in the Stock Purchase Agreement, the Company has given notice of its disagreement with Fleming’s closing statement.
−Removed: In its notice of disagreement, the Company (i) agreed with an $11.4 million downward adjustment to the Closing Date Purchase Price due to the losses recorded on JRG Re's operations between the date of the balance sheet used to produce the estimated closing statement and the Closing Date, which downward adjustment was included in “Other Liabilities” on the Company's Balance Sheet at September 30, 2024 (and was paid to Fleming on October 18, 2024), and (ii) disputed $54.1 million in aggregate downward adjustments to the Closing Date Purchase Price claimed by Fleming, which the Company believes are unsupported by the facts known to the Company and the terms of the Stock Purchase Agreement.
−Removed: The Stock Purchase Agreement provides procedures for resolving disputes between the parties regarding the closing statement and it is possible that the resolution of these disputes could result in a significant reduction to the amount of the purchase price beyond the $11.4 million downward adjustment already paid by the Company to Fleming.
−Removed: As described in the Risk Factor below “ Litigation and legal proceedings against us or our subsidiaries could have a material adverse effect on our business, financial condition and/or results of operations ,” we are involved in litigation with Fleming regarding the Stock Purchase Agreement and related matters.
−Removed: The outcome of the disputes over the post-closing adjustment and the litigation with Fleming cannot be predicted and, if determined adversely, could require us to repay a significant portion of the purchase price paid by Fleming on the Closing Date, as well as significant damage amounts, which could have a material adverse effect on our financial position.
+Added: As a result of the factors described above, shareholders may not be able to resell their common stock at or above their purchase price or may not be able to resell them at all.
+Added: These market and industry factors may materially reduce the market price of our common stock, regardless of our operating performance.
Litigation and legal proceedings against us or our subsidiaries could have a material adverse effect on our business, financial condition and/or results of operations.
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However, the outcomes of lawsuits cannot be predicted and, if determined adversely, could require us to pay significant damage amounts or to change aspects of our operations, which could have a material adverse effect on our financial results.
−Removed: In the future we may identify material weaknesses or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations.
−Removed: The occurrence of any such event may have a material adverse effect on our business and common share price.
−Removed: In November 2023, we identified a material weakness in our internal control over financial reporting.
−Removed: 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 our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
−Removed: While the material weakness has since been remediated, it is possible that additional material weaknesses may be identified.
−Removed: If we discover additional weaknesses in our system of internal financial and accounting controls and procedures, our consolidated financial statements may contain material misstatements, and we could be required to restate our financial results.
+Added: Failure to maintain effective internal controls in accordance with Sarbanes-Oxley could have a material adverse effect on our business and common stock price.
+Added: As a public company with SEC reporting obligations, we are required to document and test our internal control procedures to satisfy the requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended ("Sarbanes-Oxley"), which require assessments by management of the effectiveness of our internal control over financial reporting.
+Added: During the course of our assessments, we may identify deficiencies that we are unable to remediate in a timely manner.
+Added: Testing and maintaining our internal control over financial reporting may also divert management's attention from other matters that are important to the operation of our business.
+Added: We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404(b) of Sarbanes-Oxley.
+Added: If we conclude that our internal control over financial reporting is not effective, we cannot be certain as to the timing of completion of our evaluation, testing and remediation actions or its effect on our operations.
+Added: If we discover a material weakness in our system of internal financial and accounting controls and procedures, our consolidated financial statements may contain material misstatements, we could be required to restate our financial results and we may be unable to file timely and accurate reports with the SEC.
Our internal control over financial reporting will not prevent or detect all errors and all fraud.
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Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.
−Removed: Any failure to implement and maintain effective internal control over financial reporting could cause investors to lose confidence in our reported financial and other information, adversely impact our stock price, cause us to incur increased costs to remediate any deficiencies, and attract regulatory scrutiny or additional lawsuits that could be costly to resolve and distract management’s attention, limit our ability to access the capital markets or cause our stock to be delisted from The Nasdaq Global Select Market.
−Removed: Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
−Removed: The holders of the Series A Convertible Preferred Shares are entitled to vote up to 9.9% of the aggregate voting power of our then-outstanding common shares on an as converted basis or of the outstanding voting securities of the Company, and have rights to approve certain actions, which may allow such holders to exercise significant influence over matters requiring shareholder approval.
+Added: Any failure to implement and maintain effective internal control over financial reporting could cause investors and other external constituents like rating agencies and lenders to lose confidence in our reported financial and other information, adversely impact our stock price, cause us to incur increased costs to remediate any deficiencies, and attract regulatory scrutiny or additional lawsuits that could be costly to resolve and distract management’s attention, limit our ability to access the capital markets or cause our stock to be delisted from The Nasdaq Global Select Market.
+Added: Failure to remedy any material weakness in
+Added: our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
+Added: The holders of the Series A Convertible Preferred Shares are entitled to vote up to 9.9% of the aggregate voting power of our then-outstanding common stock on an as converted basis or of the outstanding voting securities of the Company, and have rights to approve certain actions, which may allow such holders to exercise significant influence over matters requiring shareholder approval.
Additionally, GPC Partners may exercise influence over us through their ability to designate a nominee for election to our board of directors.
−Removed: The holders of the Series A Preferred Shares are entitled to vote up to 9.9% of the aggregate voting power of the then-outstanding common shares on an as converted basis or of the outstanding voting securities of the Company with the holders of our common shares on all matters submitted for a vote of holders of common shares (voting together as one class).
+Added: The holders of the Series A Preferred Shares are entitled to vote up to 9.9% of the aggregate voting power of the then-outstanding common stock on an as converted basis or of the outstanding voting securities of the Company with the holders of our common stock on all matters submitted for a vote of holders of common stock (voting together as one class).
As a result, such holders may be able to exercise significant influence over all matters requiring shareholder approval.
−Removed: Pursuant to the Investment Agreement dated February 24, 2022, as amended on November 11, 2024 (as so amended, the “Investment Agreement”) by and between the Company and GPC Partners Investments (Thames) LP (“GPC Partners”), an affiliate of Gallatin Point Capital LLC, GPC Partners has the right to designate one candidate for nomination for election to our board of directors for so long as GPC Partners and its Permitted Transferees (as defined in the Investment Agreement) continue to beneficially own Series A Preferred Shares and/or common shares issued or issuable upon conversion of such Series A Preferred Shares that represent in the aggregate at least 50% of the number of common shares beneficially owned by the Investors, on an as-converted basis, as of the issuance date of the Series A Preferred Shares.
+Added: Pursuant to the Investment Agreement dated February 24, 2022, as amended on November 11, 2024 (as so amended, the “Investment Agreement”) by and between the Company and GPC Partners Investments (Thames) LP (“GPC Partners”), an affiliate of Gallatin Point Capital LLC, GPC Partners has the right to designate one candidate for nomination for election to our board of directors for so long as GPC Partners and its Permitted Transferees (as defined in the Investment Agreement) continue to beneficially own Series A Preferred Shares and/or common stock issued or issuable upon conversion of such Series A Preferred Shares that represent in the aggregate at least 50% of the number of shares of common stock beneficially owned by the Investors, on an as-converted basis, as of the issuance date of the Series A Preferred Shares.
Notwithstanding the fact that all directors are subject to fiduciary duties to us and to applicable law, the interests of the director designated by GPC Partners for nomination may differ from the interests of our security holders as a whole or of our other directors.
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As a result, the holders of the Series A Preferred Shares may have the ability to influence the outcome of certain matters affecting our governance and capitalization.
−Removed: The conversion of the Series A Preferred Shares into common shares would dilute the ownership of common shareholders and could adversely affect the market price of our common shares.
−Removed: The conversion of our Series A Preferred Shares into common shares or payment of dividends on the Series A Preferred Shares in common shares would dilute the ownership interest of existing holders of our common shares.
−Removed: On November 11, 2024, pursuant to an amendment to the Investment Agreement, we converted 37,500 Series A Preferred Shares with a liquidation value of $37.5 million, into 5,859,375 common shares.
−Removed: Any sale of these common shares, or additional common shares obtained following conversion of the Series A Preferred Shares or payment of dividends on the Series A Preferred
−Removed: Shares in common shares, would increase the number of common shares available for public trading, and may adversely affect prevailing market prices of our common shares.
+Added: The conversion of the Series A Preferred Shares into common stock would dilute the ownership of common shareholders and could adversely affect the market price of our common stock.
+Added: The conversion of our Series A Preferred Shares into common stock or payment of dividends on the Series A Preferred Shares in common stock would dilute the ownership interest of existing holders of our common stock.
+Added: On November 11, 2024, pursuant to an amendment to the Investment Agreement, we converted 37,500 Series A Preferred Shares with a liquidation value of $37.5 million, into 5,859,375 shares of common stock.
+Added: Any sale of these shares of common stock, or additional shares of common stock obtained following conversion of the Series A Preferred Shares or payment of dividends on the Series A Preferred Shares in common stock, would increase the number of shares of common stock available for public trading, and may adversely affect prevailing market prices of our common stock.
The Series A Preferred Shares have rights, preferences and privileges that are not held by, and are preferential to the rights of, our common shareholders, which could adversely affect our liquidity and financial condition.
The holders of our Series A Preferred Shares have the right to receive a payment on account of the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company before any payment may be made to holders of any other class or series of capital shares.
−Removed: In addition, dividends on the Series A Preferred Shares accrue and are cumulative at the initial rate of 7.0% of the $1,000 per share liquidation preference per annum, paid in cash, in-kind in common shares or in Series A Preferred Shares, at our election.
+Added: In addition, dividends on the Series A Preferred Shares accrue and are cumulative at the initial rate of 7.0% of the $1,000 per share liquidation preference per annum, paid in cash, in-kind in common stock or in Series A Preferred Shares, at our election.
Pursuant to the Amended and Restated Certificate of Designation pertaining to the Series A Preferred Shares, on October 1, 2029, and each five-year anniversary thereafter, the dividend rate on the liquidation preference will reset to a rate equal to the five-year U.S.
1 unchanged sentence
The holders of the Series A Preferred Shares also have certain repurchase rights.
−Removed: Upon prior written notice of certain change of control events (a “Fundamental Change”), each holder of outstanding Series A Preferred Shares may, 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 in cash 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.
+Added: Upon prior written notice of certain change of control events (a “Fundamental Change”), each holder of outstanding Series A Preferred Shares may, 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 stock, or (ii) require the Company to repurchase any or all of such holder’s Series A Preferred Shares in cash 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.
These dividend and share repurchase obligations could impact our liquidity and reduce the amount of cash flows available for working capital, capital expenditures, growth opportunities, acquisitions and other general corporate purposes, as well as for the payment of dividends to our common shareholders.
1 unchanged sentence
The preferential rights could also result in divergent interests between the holders of the Series A Preferred Shares and common shareholders.
−Removed: Our bye-laws permit non-employee members of our board of directors and their affiliates to compete with us, which may result in conflicts of interest.
−Removed: Our bye-laws provide that members of our board of directors (other than those who are our officers, managers or employees) and their affiliates do not have any duty to (i) communicate or present to the Company any investment or business opportunity or prospective transaction or arrangement in which the Company may have any interest or expectancy or (ii) refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate.
−Removed: Our bye-laws will not restrict our non-employee directors, or their affiliates from acquiring and holding interests in businesses that compete directly or indirectly with us.
−Removed: Our non-employee directors and their affiliates may also pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us.
−Removed: These potential conflicts of interest could have a material adverse effect on our business, financial condition, results of operations or prospects if we are unable to pursue attractive corporate opportunities because they are allocated by our non-employee directors to themselves or their affiliates instead of being presented to us.
−Removed: The amount of dividends that we may pay to our common shareholders is subject to restrictions pursuant to the terms of the Series A Preferred Shares, and we cannot assure you that we will declare or pay dividends on our common shares in the future.
+Added: The amount of dividends that we may pay to our common shareholders is subject to restrictions pursuant to the terms of the Series A Preferred Shares and our Credit Agreement, and we cannot assure you that we will declare or pay dividends on our common stock in the future.
The Certificate of Designations limits our ability to pay dividends to our shareholders.
−Removed: If we pay cash dividends of more than $0.05 per common share per quarter, without the consent of at least the majority of the Series A Preferred Shares then outstanding, we will be required to reduce the conversion price of the Series A Preferred Shares.
−Removed: Additionally, the payment of cash dividends in excess of $0.10 per common share per quarter is not permitted if the dividends on the Series A Preferred Shares for that quarter are not paid in cash, unless the Company’s U.S.-based insurance subsidiaries satisfy certain capital requirements.
−Removed: Share dividends payable on the common shares also trigger a reduction of the conversion price applicable to the Series A Preferred Shares.
+Added: If we pay cash dividends of more than $0.05 per share of common stock per quarter, without the consent of at least the majority of the Series A Preferred Shares then outstanding, we will be required to reduce the conversion price of the Series A Preferred Shares.
+Added: Additionally, the payment of cash dividends in excess of $0.10 per share of common stock per quarter is not permitted if the dividends on the Series A Preferred Shares for that quarter are not paid in cash, unless the Company’s U.S.-based insurance subsidiaries satisfy certain capital requirements.
+Added: Share dividends payable on the common stock also trigger a reduction of the conversion price applicable to the Series A Preferred Shares.
+Added: In addition, our Credit Agreement contains a covenant that limits our ability to pay dividends on our Series A Preferred Shares and on shares of our common stock to an aggregate amount of $20 million per annum.
Additionally, the declaration, payment and amount of dividends is further subject to the discretion of our board of directors.
−Removed: Our board of directors may take into account a variety of factors when determining whether to declare any dividends, including (1) our financial condition, liquidity, results of operations (including our ability to generate cash flow in excess of expenses and our expected or actual net income), retained earnings and collateral and capital requirements, (2) general business conditions, (3) legal, tax and regulatory limitations, (4) contractual prohibitions and other restrictions, in addition to those related to our Series A Preferred Shares, (5) the effect of a dividend or dividends upon our financial strength ratings and (6) any other factors that our board of directors deems relevant.
+Added: Our board of directors may take into account a variety of factors when determining whether to declare any dividends, including (1) our financial condition, liquidity, results of operations (including our ability to generate cash flow in excess of expenses and our expected or actual net income), retained earnings and collateral and capital requirements, (2) general business conditions, (3) legal, tax and regulatory limitations, (4) contractual prohibitions and other restrictions, in addition to those related to our Series A Preferred Shares and our Credit Agreement, (5) the effect of a dividend or dividends upon our financial strength ratings and (6) any other factors that our board of directors deems relevant.
See also “Item 5.
−Removed: Market For Registrant’s Common Equity, Related Stockholder
−Removed: Matters and Issuer Purchases Of Equity Securities - Dividends.” We cannot assure you that we will continue to pay dividends in the future, or that the amount of any such dividend will not decline from prior dividends we have paid.
+Added: Market For Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases Of Equity Securities — Dividends.” We cannot assure you that we will continue to pay dividends in the future, or that the amount of any such dividend will not decline from prior dividends we have paid.
We depend upon dividends and distributions from our subsidiaries, and we may be unable to distribute dividends to our shareholders to the extent we do not receive dividends from our subsidiaries.
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Insurance Regulation — State Regulation” for more information.
−Removed: In addition, dividends paid by our U.S.
−Removed: subsidiaries to our U.K.
−Removed: holding company are subject to a 5% withholding tax by the IRS.
−Removed: domestic law, no withholding tax is applied to dividends paid by U.K.
−Removed: tax resident companies.
The inability of our subsidiaries to pay dividends or make distributions to us, including as a result of regulatory or other restrictions or capital needs, may prevent us from paying our expenses or paying dividends to our shareholders.
−Removed: Dividends paid by our U.S.
−Removed: subsidiaries to James River UK may not be eligible for benefits under the U.S.-U.K.
−Removed: income tax treaty.
−Removed: federal income tax law, dividends paid by a U.S.
−Removed: corporation to a non-U.S.
−Removed: shareholder are generally subject to a 30% withholding tax, unless reduced by treaty.
−Removed: The income tax treaty between the United Kingdom and the United States (the “U.K.
−Removed: Treaty”) reduces the rate of withholding tax on certain dividends to 5%.
−Removed: Were the IRS to contend successfully that James River UK is not eligible for benefits under the U.K.
−Removed: Treaty, any dividends paid by James River Group, our U.S.
−Removed: holding company, to James River UK would be subject to the 30% withholding tax.
−Removed: Such a result would substantially reduce the amount of dividends that our shareholder may receive.
−Removed: If securities or industry analysts do not continue to publish research or publish misleading or unfavorable research about our business, our common share price and trading volume could decline.
−Removed: The trading market for our common shares depends in part on the research and reports that securities or industry analysts publish about our business.
−Removed: If one or more of these analysts downgrades our shares or publishes misleading or unfavorable research about our business, our share price would likely decline.
−Removed: If one or more of these analysts ceases coverage of our Company or fails to publish reports on us regularly, demand for our shares could decrease, which could cause our share price or trading volume to decline.
−Removed: Future sales of our common shares, or the possibility of such sales, may cause the trading price of our common shares to decline and could impair our ability to raise capital through subsequent equity offerings.
−Removed: Future sales of substantial amounts of our common shares in the public market, or the perception that these sales could occur, could cause the market price of our common shares to decline and impair our ability to raise capital through the sale of additional shares.
−Removed: In the future, we may issue additional common shares or other equity or debt securities convertible into common shares in connection with a financing, acquisition or employee arrangement or otherwise.
−Removed: Any of these issuances could result in substantial dilution to our existing shareholders and could cause the trading price of our common shares to decline.
−Removed: Our bye-laws and provisions of Bermuda law may impede or discourage a change of control transaction, which could deprive our investors of the opportunity to receive a premium for their shares.
−Removed: Our bye-laws and provisions of Bermuda law to which we are subject contain provisions that could discourage, delay or prevent “change of control” transactions or changes in our board of directors and management that certain shareholders may view as beneficial or advantageous.
−Removed: These provisions include, among others:
−Removed: • our board of directors has the authority to issue preferred shares without shareholder approval, which could be used to dilute the ownership of a potential hostile acquirer;
−Removed: • our shareholders may only remove directors for cause;
−Removed: • there are advance notice requirements for shareholders with respect to director nominations and actions to be taken at annual meetings.
−Removed: The foregoing factors could impede a merger, takeover or other business combination, which could reduce the market value of our shares.
−Removed: We may repurchase your common shares without your consent.
−Removed: Under our bye-laws and subject to Bermuda law, we have the option, but not the obligation, to require a shareholder to sell to us at fair market value the minimum number of common shares which is necessary to avoid or cure any adverse tax consequences or materially adverse legal or regulatory treatment to us, our subsidiaries or our shareholders, if our board of directors reasonably determines, in good faith, that failure to exercise this option would result in such adverse consequences or treatment.
−Removed: Bermuda law differs from the laws in effect in the United States and may afford less protection to holders of our shares.
−Removed: We are organized under the laws of Bermuda.
−Removed: As a result, our corporate affairs are governed by the Companies Act, which differs in some material respects from laws typically applicable to U.S.
−Removed: corporations and shareholders, including the provisions relating to interested directors, amalgamations, mergers and acquisitions, takeovers, shareholder lawsuits and indemnification of directors.
−Removed: Generally, the duties of directors and officers of a Bermuda company are owed to the company only.
−Removed: Shareholders of Bermuda companies typically do not have rights to take action against directors or officers of the company and may only do so in limited circumstances.
−Removed: Class actions are not available under Bermuda law.
−Removed: The circumstances in which derivative actions may be available under Bermuda law are substantially more proscribed and less clear than they would be to shareholders of U.S.
−Removed: corporations.
−Removed: The Bermuda courts, however, would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result in the violation of the company’s memorandum of association or bye-laws.
−Removed: Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud against minority shareholders or, for instance, where an act requires the approval of a greater percentage of the company’s shareholders than that which actually approved it.
−Removed: When the affairs of a company are being conducted in a manner that is oppressive or prejudicial to the interests of some shareholders, one or more shareholders may apply to the Supreme Court of Bermuda, which may make such order as it sees fit, including an order regulating the conduct of the company’s affairs in the future or ordering the purchase of the shares of any shareholders by other shareholders or by the company.
−Removed: Additionally, under our bye-laws and as permitted by Bermuda law, each shareholder has waived any claim or right of action against our directors or officers for any action taken by directors or officers in the performance of their duties, except for actions involving fraud or willful misconduct.
−Removed: In addition, the rights of holders of our common shares and the fiduciary responsibilities of our directors under Bermuda law are not as clearly established as under statutes or judicial precedent in existence in jurisdictions in the United States, particularly the State of Delaware.
−Removed: Therefore, holders of our common shares may have more difficulty protecting their interests than would shareholders of a corporation incorporated in a jurisdiction within the United States.
−Removed: There are regulatory limitations on the ownership and transfer of our common shares.
−Removed: Common shares may be offered or sold in Bermuda only in compliance with the provisions of the Investment Business Act 2003 and the Exchange Control Act 1972 and related regulations of Bermuda, which regulate the sale of securities in Bermuda.
−Removed: In addition, the permission of the BMA is required under the provisions of the Exchange Control Act 1972 and related regulations for all issuances and transfers of shares of Bermuda companies to or from a non-resident of Bermuda for exchange control purposes, other than where the BMA has granted a general permission.
−Removed: The BMA, in its notice to the public dated June 1, 2005 has granted a general permission for the issue and subsequent transfer of any securities of a Bermuda company from and/or to a non-resident of Bermuda for exchange control purposes for so long as any “equity securities” of such company are listed on an appointed stock exchange, which includes the NASDAQ Stock Market.
−Removed: This general permission will apply to our common shares, but would cease to apply if we were to cease to be listed on the NASDAQ Stock Market.
−Removed: In connection with the IPO, we received consent from the BMA to issue and transfer freely any of our shares, options, warrants, depository receipts, rights loan notes, debt instruments or other securities to and among persons who are either residents or non-residents of Bermuda for exchange control purposes.
−Removed: Except in connection with the settlement of trades or transactions entered into through the facilities of the NASDAQ Stock Market, our board of directors may generally require any shareholder or any person proposing to acquire our common shares to provide the information required under our bye-laws.
−Removed: If any such shareholder or proposed acquiror does not provide such information, or if our board of directors has reason to believe that any certification or other information provided pursuant to any such request is inaccurate or incomplete, our board of directors may decline to register any transfer or to effect any issuance or purchase of our common shares to which such request is related.
−Removed: In addition, the insurance holding company laws and regulations of the states in which our insurance companies are domiciled generally require that, before a person can acquire direct or indirect control of an insurer domiciled in the state, and in some cases prior to divesting its control, prior written approval must be obtained from the insurer’s domiciliary state insurance regulator.
+Added: If securities or industry analysts do not continue to publish research or publish misleading or unfavorable research about our business, our common stock price and trading volume could decline.
+Added: The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about our business.
+Added: If one or more of these analysts downgrades our stock or publishes misleading or unfavorable research about our business, our stock price would likely decline.
+Added: If one or more of these analysts ceases coverage of our
+Added: Company or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price or trading volume to decline.
+Added: Future sales of our common stock, or the possibility of such sales, may cause the trading price of our common stock to decline and could impair our ability to raise capital through subsequent equity offerings.
+Added: Future sales of substantial amounts of our common stock in the public market, or the perception that these sales could occur, could cause the market price of our common stock to decline and impair our ability to raise capital through the sale of additional shares.
+Added: In the future, we may issue additional common stock or other equity or debt securities convertible into common stock in connection with a financing, acquisition or employee arrangement or otherwise.
+Added: Any of these issuances could result in substantial dilution to our existing shareholders and could cause the trading price of our common stock to decline.
+Added: Anti-takeover provisions in our certificate of incorporation and our by-laws could discourage, delay or prevent a change of control of us and may affect the trading price of our common stock.
+Added: Our certificate of incorporation and by-laws include a number of provisions that may discourage, delay or prevent a change in our management or control over us even if our shareholders might consider such changes to be favorable.
+Added: For example, our certificate of incorporation and by-laws collectively:
+Added: • authorize the issuance of preferred shares without shareholder approval, which could be used to dilute the ownership of a potential hostile acquirer;
+Added: • provide that vacancies on our board of directors, including vacancies resulting from an enlargement of our board of directors, may be filled only by a majority vote of directors then in office;
+Added: • prohibit shareholder action by consent in writing or electronic transmission, thereby requiring all actions to be taken at a meeting of the shareholders;
+Added: • establish advance notice requirements for shareholders with respect to director nominations and actions to be taken at annual meetings;
+Added: • require the affirmative vote of a majority of votes cast at a regular or special meeting of shareholders to amend or repeal the by-laws.
+Added: The foregoing factors could impede a merger, takeover or other business combination, which could reduce the market value of our common stock.
+Added: There are regulatory limitations on the ownership and transfer of our common stock.
+Added: The insurance holding company laws and regulations of the states in which our insurance companies are domiciled generally require that, before a person can acquire direct or indirect control of an insurer domiciled in the state, and in some cases prior to divesting its control, prior written approval must be obtained from the insurer’s domiciliary state insurance regulator.
These laws may discourage potential acquisition proposals and may delay, deter or prevent an investment in or a change of control involving us, or one or more of our regulated subsidiaries, including transactions that our management and some or all of shareholders might consider desirable.
−Removed: Pursuant to applicable laws and regulations, “control” over an insurer is generally presumed to exist if any person, directly or indirectly, owns, controls, holds the power to vote or holds proxies representing, 10% or more of the voting securities of that reinsurer or insurer.
−Removed: Indirect ownership includes ownership of the Company’s common shares.
+Added: Pursuant to applicable laws and regulations, “control” over an insurer is generally presumed to exist if any person, directly or indirectly, owns, controls, holds the power to vote or holds proxies representing, 10% or more of the voting securities of that insurer.
+Added: Indirect ownership includes ownership of the Company’s common stock.
General Risk Factors
−Removed: We rely on our systems and employees, and those of certain third-party vendors and service providers in conducting our operations, and certain failures, including internal or external fraud, operational errors, systems malfunctions, or cyber-security incidents, could materially adversely affect our operations.
−Removed: We are exposed to many types of operational risk, including the risk of fraud by employees and outsiders, clerical and recordkeeping errors and computer or telecommunications systems malfunctions.
−Removed: Our business depends on our ability to process a large number of increasingly complex transactions.
−Removed: If any of our operational, accounting, or other data processing systems fail or have other significant shortcomings, we could be materially adversely affected.
−Removed: Similarly, we depend on our employees and could be materially adversely affected if one or more of our employees causes a significant operational breakdown or failure, either as a result of human error, intentional sabotage or fraudulent manipulation of our operations or systems.
+Added: We rely on our systems and employees, and those of certain third-party vendors and service providers, in conducting our operations, and failures of these systems, controls or personnel could materially adversely affect our operations.
+Added: We are exposed to operational risk, including internal or external fraud, clerical or recordkeeping errors and systems failures, including failures caused by human error or misconduct.
Third parties with whom we do business, including vendors that provide services or security solutions for our operations, could also be sources of operational and information security risk to us, including from breakdowns, failures, or capacity constraints of their own systems or employees.
1 unchanged sentence
We rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property.
−Removed: Although we seek to protect our intellectual property rights, third parties may infringe or misappropriate intellectual property.
−Removed: We may have to litigate to enforce and protect intellectual property and to determine its scope, validity or enforceability, which could divert significant resources and prove unsuccessful.
−Removed: We may be subject to claims by third parties for patent, trademark or copyright infringement or breach of usage rights.
−Removed: Any such claims and any resulting litigation could result in significant expense and liability.
−Removed: If third party providers or we are found to have infringed a third party intellectual property rights, either of us could be enjoined from providing certain products or services or from utilizing and benefiting from certain methods, processes, copyrights, trademarks, trade secrets or licenses.
−Removed: Alternatively, we could be required to enter into costly licensing arrangements with third parties or implement a costly work-around.
−Removed: Any of these scenarios could have a material effect on our business or results of operations.
+Added: Third parties may infringe or misappropriate our intellectual property, and we may have to litigate to enforce and protect our intellectual property and to determine its scope, validity or enforceability, which could divert significant resources and prove unsuccessful.
+Added: We may also be subject to claims by third parties for patent, trademark or copyright infringement or breach of usage rights, which could result in significant expense and liability, and could require us to enter into costly licensing arrangements or implement costly workarounds.
We rely on multiple proprietary operating systems as well as operating systems of third-party providers to issue policies, pay claims, run modeling functions and complete various internal processes.
−Removed: We may be subject to disruptions of such operating systems arising from events that are wholly or partially beyond our control, which may include, for example, electrical or telecommunications outages, natural or man-made disasters, such as earthquakes, hurricanes, floods or tornados, or events arising from criminal or terrorist acts.
−Removed: Such disruptions may give rise to losses in service to insureds and loss or liability to us.
−Removed: In addition, there is the risk that our controls and procedures as well as our business continuity, disaster recovery and data security systems prove to be inadequate.
−Removed: The computer systems and network systems we and others use could be vulnerable to unforeseen problems.
−Removed: These problems may arise in both our internally developed systems and the systems of third-party service providers.
−Removed: In addition, our computer systems and network infrastructure present security risks and could be susceptible to hacking, computer viruses, data breaches, or ransomware attacks.
−Removed: Any such failure or security incident could affect our
−Removed: operations and could materially adversely affect our results of operations by requiring us to expend significant resources to correct the defect or incident, as well as by exposing us to litigation or losses not covered by insurance.
−Removed: Although we have disaster recovery plans and other safeguards in place, our business operations may be materially adversely affected by significant and widespread disruption to our physical infrastructure or operating systems and those of third-party service providers that support our business.
+Added: We may be subject to disruptions of these operating systems arising from events that are wholly or partially beyond our control, including electrical or telecommunications outages, natural or man-made disasters, or events arising from criminal or terrorist acts, which could result in losses in service to insureds or liability to us.
+Added: If our controls and procedures, or our business continuity, disaster recovery or data security systems, prove to be inadequate, our business operations could be materially adversely affected, including by significant and widespread disruption to our physical infrastructure or operating systems and those of third-party service providers that support our business.
Our operations rely on the secure processing, transmission and storage of confidential information in our computer systems and networks.
−Removed: Our technologies, systems and networks may become the target of cyber-attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our or our insureds’, reinsureds’ or claimants’ confidential, proprietary and other information, or otherwise disrupt our or our insureds’, reinsureds’, claimants’ or other third parties’ business operations, which in turn may result in legal claims, regulatory scrutiny and liability, reputational damage, the incurrence of costs to eliminate or mitigate further exposure and the loss of customers.
+Added: Our technologies, systems and networks may become the target of cyber-attacks or information security breaches that could result in unauthorized access to, or disclosure, misuse, loss or destruction of, our or our insureds’, reinsureds’ or claimants’ confidential, proprietary and other information, or otherwise disrupt our or our insureds’, reinsureds’, claimants’ or other third parties’ business operations, which in turn may result in legal claims, regulatory scrutiny and liability, reputational damage, remediation costs and the loss of customers.
This risk may be heightened as a result of the current remote and hybrid work environment.
Although to date we have not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that we will not suffer such losses in the future.
−Removed: While we make efforts to maintain the security and integrity of our information technology networks and related systems, and we have implemented various measures and an incident response protocol to manage the risk of, or respond to, a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.
−Removed: In addition, our results of operations could be materially adversely affected if one of our business partners, such as brokers, general agents, third party claims administrators or vendors, experiences disruptions to their operating systems and/or a cybersecurity breach, as such disruption or breach could reduce submission flow, policy issuance, claims settlement, and/or make us more vulnerable to a cybersecurity breach ourselves.
−Removed: Our risk and exposure to these matters remains heightened because of, among other things, the evolving nature of these threats and the outsourcing of some of our business operations.
−Removed: As a result, cyber-security and the continued development and enhancement of our controls, processes and practices designed to protect our systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority.
+Added: While we have implemented measures and an incident response protocol to manage these risks, there can be no assurance that our security efforts will be effective.
+Added: Our results of operations could also be materially adversely affected if one of our business partners, such as brokers, general agents, third-party claims administrators or vendors, experiences system disruptions and/or a cybersecurity breach, which could reduce submission flow, policy issuance and claims settlement, and/or make us more vulnerable to a cybersecurity breach.
As cyber-threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.
Disruptions or failures in the physical infrastructure or operating systems that support our business and customers, or cyber-attacks or security breaches of the networks, systems or devices that our customers use to access our products and services, could result in customer attrition, regulatory fines, penalties or intervention, reputational damage, reimbursement or other compensation costs and/or additional compliance costs, any of which could materially adversely affect our financial condition or results of operations.
+Added: The use or anticipated use of AI technologies, including generative AI, by us or third parties, may increase or create new operational risks.
+Added: In addition to the risks posed by traditional cybersecurity threats, the growing use of AI-based solutions introduces new vulnerabilities, such as adversarial attacks, data poisoning and manipulation of automated decision-making models.
+Added: AI-based solutions are increasingly being used in the insurance industry, including by us, and we expect to use other systems and tools that incorporate AI-based technologies in the future.
+Added: The use of AI by our employees or third parties on which we rely could lead to the public disclosure of confidential information (including personal data or proprietary information) in contravention of our internal policies, data protection or other applicable laws, or contractual requirements.
+Added: The misuse of AI could also result in unauthorized access and use of personal data of our employees, customers or other third parties, thereby causing harm to our reputation, subjecting us to legal liability under laws that protect personal data and subject us to increasing costs, any of which could adversely affect our business, financial conditions and results of operations.
Our operating results have in the past varied from quarter to quarter and may not be indicative of our long-term prospects.
2 unchanged sentences
In particular, we seek to underwrite products and make investments to achieve favorable returns on tangible equity over the long term.
−Removed: In addition, our opportunistic nature and focus on long-term growth in tangible equity may result in fluctuations in total premiums written from period to period as we concentrate on underwriting contracts that we believe will generate better long-term, rather than short-term, results.
+Added: In addition, our opportunistic nature and focus on long-term growth in tangible common equity may result in fluctuations in total premiums written from period to period as we concentrate on underwriting contracts that we believe will generate better long-term, rather than short-term, results.
Accordingly, our short-term results of operations may not be indicative of our long-term prospects.
5 unchanged sentences
Changes in accounting practices and future pronouncements may materially affect our reported financial results.
−Removed: Developments in accounting practices may require us to incur considerable additional expenses to comply, particularly if we are required to prepare information relating to prior periods for comparative purposes or to apply the new requirements
−Removed: retroactively.
+Added: Developments in accounting practices may require us to incur considerable additional expenses to comply, particularly if we are required to prepare information relating to prior periods for comparative purposes or to apply the new requirements retroactively.
The impact of changes in current accounting practices and future pronouncements cannot be predicted but may affect the calculation of net income, shareholders’ equity and other relevant financial statement line items.
8 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.