By Mia MacGregor

Jan 31 - (The Insurer) - AM Best has affirmed the financial strength rating $(FSR)$ of A- (Excellent) and the long-term issuer credit ratings $(ICR.AU)$ of "a-" (Excellent) for the operating subsidiaries of James River Group Holdings (JRG Holdings) and the long-term ICR of "bbb-" (Good) for JRG Holdings itself, while maintaining a negative outlook.

The ratings reflect JRG Holdings' strong balance sheet strength, along with its adequate operating performance, neutral business profile, and marginal enterprise risk management $(ERM.AU)$, according to AM Best.

The ratings agency highlighted the group’s efforts to strengthen its financial position through adverse development cover and loss portfolio transfer reinsurance agreements, as well as the sale of JRG Reinsurance Company. AM Best also noted James River’s continued investment in ERM initiatives.

Despite these steps, AM Best noted that the negative outlook underscores what it regards as execution risks associated with the group’s projections, and warned that failure to meet these targets could lead to rating downgrades.

The FSR of A- (Excellent) and long-term ICRs of "a-" (Excellent) were affirmed with negative outlooks for James River Insurance Company, James River Casualty Company, Falls Lake National Insurance Company, Stonewood Insurance Company, and Falls Lake Fire and Casualty Company.

In December 2024, James River announced that it had completed an adverse development reinsurance deal with Enstar Group and secured a $12.5mn equity investment.

These moves were part of a broader strategy launched in November to conclude a review that began in 2023 after identifying material weaknesses in financial controls.

Other strategic actions include plans to redomicile to the US in 2025 and continued investment support from Gallatin Point Capital, which previously invested $150mn in 2022.

James River reported a $28.2mn third-quarter operating loss in November 2024, largely due to $52.2mn in excess consideration paid over ceded reserves tied to a loss portfolio transfer contract with Markel's State National.