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James River Announces Legacy Reinsurance Agreement with State National Insurance Company

PEMBROKE, Bermuda, July 09, 2024 (GLOBE NEWSWIRE) -- James River Group Holdings, Ltd. ("James River" or the "Company") (NASDAQ:JRVR) today announced that two of its principal operating subsidiaries entered into a combined loss portfolio transfer and adverse development cover reinsurance agreement with State National Insurance Company, Inc. ("State National"). Under the terms of the agreement, State National will provide $160.0 million of adverse development reinsurance coverage for James River's Excess and Surplus Lines segment casualty portfolio for accident years 2010-2023 (both years inclusive), subject to a 15% co-participation by the Company. The reinsurance structure has no coverage sublimits but does exclude exposure to the Company's former large commercial auto insured, with the vast majority of that exposure already subject to a previously executed loss portfolio transfer. James River will retain claims management. State National is rated "A" (Excellent) by AM Best. Frank D'Orazio, the Company's Chief Executive Officer, commented, "We are pleased to have successfully completed a significant legacy reinsurance transaction with a highly rated carrier that is consistent with the Company's track record of de-risking the organization while bolstering the balance sheet and providing improved certainty to our stakeholders." The reinsurance agreement was executed on July 2, 2024 and is effective January 1, 2024. During the third quarter of 2024, James River will recognize a $52.2 million reduction in pre-tax income for the excess consideration paid over reserves ceded in connection with the agreement. Once the transaction is recognized, should the Company experience adverse development on the subject business (as early as the January 1, 2024 effective date), it would be subject to the reinsurance agreement. The agreement also includes a profit commission to James River for 50% of any favorable development on the business ceded to State National below 104.5% of carried reserves, capped at $87.0 million. Please see the Frequently Asked Questions slides being made available simultaneously with this press release for further information on this transaction. The transaction closed upon signing. James River was represented by Howden Re and Mayer Brown LLP. Forward Looking Statements This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, such forward-looking ...