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A.M. Best Upgrades Ratings of JRG Reinsurance Company, Ltd. and Its Affiliates

JRVR | July 29, 2016

A.M. Best Upgrades Ratings of JRG Reinsurance Company, Ltd. and Its Affiliates

A.M. Best has upgraded the financial strength rating to A (Excellent) from A- (Excellent) and the issuer credit ratings (ICR) to “a” from “a-” of JRG Reinsurance Company, Ltd. (JRG Re) and its U.S.-based insurance affiliates. Concurrently, A.M. Best has upgraded the ICR to “bbb” from “bbb-” of James River Group Holdings, Ltd. (Holdings) [NASDAQ: JRVR]. The outlook for each of the ratings has been revised to stable from positive. Holdings and JRG Re are domiciled in Pembroke, Bermuda, while the U.S. companies are based in Richmond, VA and Raleigh, NC.

The ratings reflect JRG Re’s strong operating performance and supportive risk-adjusted capitalization due to its solid business profile and successful execution of its business strategy. This includes earnings from the company’s initiatives in writing third-party working layer reinsurance business from U.S.-based specialty insurers, which has been supplemented by business derived from affiliated quota share reinsurance agreements. These positive rating factors are partially offset by the challenges presented by a competitive casualty reinsurance market.

The company has increased its policyholder surplus through the first six months of 2016. Its consolidated combined ratios have consistently been in the low nineties, which reflect sustainable improvements over results since 2012. Improved underwriting results reflect the impact of the company’s underwriting discipline. JRG Re targets small to medium-sized specialty companies and maintains a diversified reinsurance portfolio weighted toward short- to intermediate-tail casualty business. The balance of the company’s written premium is derived from the net retained property/casualty exposures of the six U.S.-based affiliates.

The ratings could be positively impacted by the combined insurance operations continuing to demonstrate improvement in underwriting results across its segments or continued advancement in balance sheet strength. The ratings could be negatively impacted by less-than-optimal underwriting results in any one segment or balance sheet strength that does not support the risk profile.

The U.S. affiliates’ ratings are directly correlated to the ratings of JRG Re and receive full rating enhancement due to the explicit and implicit support provided by JRG Re.

The FSRs have been upgraded to A (Excellent) from A- (Excellent) and the ICRs upgraded to “a” from “a-” for JRG Reinsurance Company, Ltd. and its following affiliates:

Falls Lake General Insurance Company
Falls Lake National Insurance Company
James River Insurance Company
James River Casualty Company
Stonewood Insurance Company
Falls Lake Fire and Casualty Company

This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

A.M. Best
Robert Raber, +1-908-439-2200, ext. 5696
Senior Financial Analyst
robert.raber@ambest.com
or
Anthony Diodato, +1-908-439-2200, ext. 5704
Group Vice President
anthony.diodato@ambest.com
or
Christopher Sharkey, +1-908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, +1-908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com