James River reports 6.6% Q4 E&S rate increases and surge in submissions
James River has reported 41 percent growth of E&S premium in the fourth quarter while revealing renewal rate increases of 6.6 percent.
- Q4 operating EPS of $0.76 narrowly beats analysts’ expectation
- GWP up 27%: E&S up 44%; specialty admitted up 4%; casualty re up 22%
- E&S renewal pricing up 6.6%, the 12th straight quarter of increases
- Q4 combined ratio of 93.8% the lowest in three years
James River’s adjusted net operating income for the fourth quarter was $23.3mn, up from $17.1mn in the prior year period.
The $0.76 operating income per diluted share narrowly beat the $0.75 consensus estimate of Wall Street analysts, and was up from $0.56 in the fourth quarter of 2018.
The Bermuda-based (re)insurer’s gross written premiums were up 27 percent in Q4, to $375.2mn from $295.3mn in the fourth quarter of 2018.
This included 44 percent growth of E&S premium to $234.5mn, 4 percent growth in specialty admitted insurance premium to $94.8mn, and 22 percent growth in casualty reinsurance to $46.0mn.
The growth in E&S was even higher for core business, which excludes commercial auto, at 65 percent. The company noted a 55 percent growth in core E&S for the full-year 2019.
“We have enjoyed 12 consecutive quarters of rate increases in our E&S segment,” said J Adam Abram, James River’s chairman and CEO. “This quarter, renewal rates increased by 6.6 percent, which was the largest quarterly increase since the market began to improve. The strong rate environment, coupled with a 27 percent growth in submissions during the fourth quarter, positions us well for 2020.”
James River reported underwriting profit of $13.6mn for the fourth quarter, a 91 percent increase over the prior year quarter.
The fourth quarter combined ratio was 93.8 percent, a 2.7 percentage point improvement over the prior year quarter.
The quarter included unfavourable reserve development of $8.8mn, or 4.0 points, compared to unfavourable reserve development of $5.8mn, or 2.9 points, in the prior year quarter.
This was the result of $9.8mn of development in casualty reinsurance partially offset by $1mn of favourable development in specialty admitted insurance.
“James River had a strong quarter, generating a 93.8 percent combined ratio, our lowest combined ratio in three years, and $13.6mn of underwriting profit, the highest quarterly number we have reported since becoming a public company in 2014,” said Abram.