James River Group Holdings, Ltd. Q2 FY2026 earnings call

• Core Strategic Priority • Underwriting profitability is the company's primary focus, prioritized over near-term premium volume growth • Management allocates capacity and capital to areas with attractive risk-adjusted returns, and deliberately exits opportunities that do not meet profitability thresholds • Continual expense discipline and efficiency improvement across all segments is a core ongoing objective

• Market Condition Observations • The overall property and casualty E&S market is transitioning, with additional new capacity entering the market primarily via MGAs and new market participants • The property sector has abundant capacity and a increasingly competitive pricing environment, with rates declining significantly as capacity outpaces market demand • Casualty markets are more nuanced: social inflation and elevated loss severity create pressure across most casualty classes, but positive rate opportunities remain in excess casualty and select specialty lines • General casualty has become exceptionally competitive in 2026, with rising pressure on pricing and loosening of terms and conditions that the industry had previously strengthened

• Operational Updates • Submission activity for active underwriting divisions grew 4% year-over-year, with new business quotes also increasing 4%; 10 of 13 underwriting divisions quoted more business than in the prior year • Implementation of an AI-enabled underwriting workbench is progressing, with initial deployment in excess casualty and small business departments; the tool is designed to improve underwriting efficiency, increase quote responsiveness, and let underwriters focus on submissions that match the company's risk appetite • $26 million of Q2 2026 gross written premium (GWP) decline was driven by one-time and deliberate items: runoff of the contract binding department, non-renewal of tract housing construction exposures, renewal timing shifts, and a non-recurring large energy project that did not repeat • The company's average account premium size declined 22.9% year-over-year, reflecting a deliberate strategic shift to smaller and SME accounts which management has identified as more profitable across market cycles • The company completed the third renewal of its E&S reinsurance treaty structure first implemented in July 2023; the structure was mostly unchanged, retaining the same panel of high-quality reinsurance partners • The company completed a redomicile in November 2025, which has delivered lasting expense and tax savings; the Q2 2026 effective tax rate was 21.8%, aligned with the U.S. statutory rate, down from over 30% in the prior year quarter before redomicile • Underlying loss trends remain stable; net adverse reserve development was under $1 million in the quarter, down from $3 million in Q2 2025, with all adverse development concentrated in pre-2023 accident years, primarily the legacy product liability book • The investment portfolio remains conservatively positioned, with 75% of invested assets and cash allocated to high-grade fixed income securities with an average duration of 3.6 years and average credit quality of A+, focused on capital preservation and consistent investment income generation • Board update: Dennis Langwell retired from the board, and Rajiv Basu, a veteran of the insurance industry, joined as a new board member

1. Excess & Surplus (E&S) Segment: Generated a 92.8% combined ratio (66.3% loss ratio + 33.9% expense ratio for the consolidated group, with E&S being the core profitable segment), representing a meaningful improvement from 96.5% in the prior quarter. The segment holds 950 million yen of total net reserves on the balance sheet, accounting for ~95% of the company's total net reserves. Net premium retention increased 9 points to 55% in Q2 2026, up from 47% in Q2 2025. 2. Specialty Admitted Segment: The company has intentionally and significantly downsized this segment due to competitive fronting market conditions. Over 40% of the segment's expense base has been removed year-to-date, with G&A expenses down 39% year-over-year for the quarter. The segment now operates with less than 5 active programs, maintained primarily as a runoff platform for legacy claims, and contributes roughly 25% of the company's overall net investment income (NAI) while running a small underwriting loss. 3. Corporate Segment: G&A expenses declined 9% year-over-year quarter, driving overall consolidated expense savings. Consolidated aggregate performance: Net income available to common shareholders was $4.4 million, up 59% from $2.8 million in Q2 2025. Operating earnings were $10 million (20 cents per diluted share), compared to $11.7 million (23 cents per diluted share) in Q2 2025. Annualized operating return on tangible common equity was 10%, with tangible common book value per share at $9.01. Consolidated combined ratio was 100.2%. Net investment income was $20.3 million, consistent with the prior year quarter. G&A expenses declined $2.5 million (7%) quarter-over-quarter, and 9% year-to-date.

• Management did not provide explicit numerical full-year guidance, but reaffirmed its long-term strategic direction of prioritizing underwriting profitability over near-term premium volume. • Q3 and second half 2026 premium levels will continue to be impacted by ongoing competitive pressure in property and general casualty markets, partially offset by growing submission and quote activity in profitable target segments including small business, professional liability, allied health, energy, environmental, and excess casualty. • Expense reduction efforts are ongoing; the current Q2 2026 expense level is a reasonable baseline moving forward, with further expense optimization expected for the remainder of the year. • Management reaffirmed that its current reserve position across all accident years is adequate, and recent accident years (post-2023) are expected to continue developing favorably due to improved underwriting discipline and risk selection.

• Rising competition across multiple E&S sectors: increased capacity has led to significant rate declines in property, and growing competition, pricing pressure, and loosened underwriting terms in general casualty, driven by new MGA entrants and capital shifting from soft property markets to casualty. • Adverse reserve development risk remains for pre-2023 accident years, specifically the legacy product liability book, though the magnitude of adverse development has declined progressively in recent quarters, and the company has purchased adverse development cover to mitigate volatility. • Premium volume headwinds from the deliberate strategic shift to smaller accounts, as policy count and submission growth takes time to translate into meaningful premium revenue. • Non-recurring and timing impacts on quarterly premium can create volatility in year-over-year comparisons, which may obscure underlying underlying portfolio performance trends.

Q: Analysts asks about the drivers of E&S written premium decline in Q2, the competitive landscape through the quarter, and what to expect for premium pressure in Q3 and the second half of 2026. / A: Frank D'Orazio explains that around $26 million of GWP decline comes from one-time and deliberate items: contract binding department runoff, non-renewal of tract housing construction exposures, renewal timing shifts, and a non-recurring large energy project. Competition has been increasing beyond property, with overall portfolio rate growth moderating to 3% in Q2 from high single digits in Q1. Management is deliberately shifting the portfolio to smaller SME accounts, which are more profitable across cycles, even though this creates near-term premium headwinds. The company is focusing growth on profitable niche segments including excess casualty, professional liability, and small business, which will offset some competitive pressure from more crowded areas of the market.

Q: The analyst asks whether there is anything unusual in Q2 corporate expenses, and if the current expense level is a sustainable baseline going forward. / A: CFO Sarah states there are no non-recurring or unusual items impacting Q2 corporate expenses, so the current level is a fair starting point. She notes that the company is not finished with expense reduction efforts, and will continue actively managing expenses through the remainder of the year as portfolio shifts continue.

Q: The analyst asks for details on the adverse reserve development that exhausted the company's adverse development cover (ADC), including which accident years and lines of business drive the development, and whether further adverse development is expected going forward. / A: Sarah says the adverse development is concentrated primarily in 2020 to 2022 accident years, and is almost entirely from the legacy product liability book. Frank D'Orazio adds that the ADC structure has worked as intended, adding $235 million to reserves over two years, with the magnitude of adverse development progressively declining. Recent post-2023 accident years show clear improvement in claim frequency and loss ratios from underwriting changes, and overall total reserves remain adequate.

Q: The analyst asks for medium and long-term plans for the specialty admitted segment, and whether the segment can reach underwriting breakeven. / A: Frank D'Orazio explains that the segment has been deliberately downsized due to heavy MGA competition and hidden exposure risks in its core lines. It now has less than 5 active programs, operating as a small runoff platform to manage legacy claims, with a focus on extremely low net retentions and ongoing strict expense management. It currently contributes ~25% of the company's total net investment income, which more than offsets its small ongoing underwriting loss.