E&S insurer ends strategic review, adds reserves coverage

James River Group Holdings Ltd., a Bermuda-based excess and surplus lines insurer that has seen significant restructuring over the past four years, said Monday it had ended its year-long strategic review and would not sell the company but added more outside investment and coverage for adverse development of business written in prior years.

The insurer also announced a $42 million loss for the third quarter.

The loss was primarily related to an adverse development reinsurance coverage James River bought in July, the company said in a statement.

The insurer also announced that Enstar Group Ltd., an insurance investment and run-off company, had agreed to buy $12.5 million in James River shares through its Cavello Bay Reinsurance Ltd. unit. In addition, Cavello Bay will provide $75 million in adverse development coverage, above the coverage bought in July for $52.8 million.

The insurer also said it has amended its conversion share agreement with private-equity firm Gallatin Point Capital LLC and said it plans to redomicile to the United States next year.

“Since I joined the company in late 2020, we’ve worked diligently to address legacy balance sheet issues and de-risk the organization to allow it to focus on its strengths. With these actions, we believe we’ve walled off reserve development from the past business,” Frank D’Orazio, CEO of James River, said on a conference call with analysts Tuesday.

The company is positioned to take advantage of the “robust” E&S underwriting environment and will offer shareholders value beyond what would be available through its sale, he said.

James River has experienced multiple business challenges over the past several years. In 2019, it announced a third-quarter loss due to a charge on its largest account, Uber Technologies Inc., which was dropped during the quarter. In 2021, A.M. Best Co. Inc. downgraded the insurer to A- from A after it posted another quarterly loss. In 2023, it sold its individual risk workers compensation business and a reinsurance unit.

In November 2023, it announced a strategic review, including the company’s possible sale.