James River trades down on Uber affiliate's policy cancellationsPosted On: Oct. 9, 2019 11:23 AM CST
Surplus lines insurer James River Insurance Group Holdings Ltd.’s shares fell more than 20% early Wednesday following its announcement Tuesday that it would drop its largest client, an affiliate of Uber Technologies Inc.
James River, based in Hamilton, Bermuda, said it will cancel all insurance policies issued to its largest customer, Rasier LLC and its affiliates, and made comments related to its third-quarter earnings in a Tuesday statement.
The insurer delivered a notice of early cancellation, effective Dec. 31, 2019, because the business “has not met our expectations for profitability,” according to J. Adam Abram, chairman and CEO of James River.
The canceled insurance policies are in James River’s commercial auto line of business within its excess and surplus lines segment, with a majority of the policies due to expire on Feb. 29, 2020, the statement said.
“We think it best to terminate the underwriting relationship as of year-end,” said Mr. Abram.
Also Tuesday, the insurer announced pretax, adverse development of between $55 million and $60 million, net of reinsurance recoveries and reinstatement premiums, related primarily to its commercial auto line of business within its excess and surplus lines segment, for the 2016 and 2017 underwriting years.
Less than $10 million of the loss was related to prior underwriting years in its casualty reinsurance segment, the statement said.
James River also said it has seen growth of 72% in its core, non-commercial auto, excess and surplus lines gross written premium versus the prior-year quarter.
James River was one of the earliest insurers to participate in the program providing coverage for Uber drivers, but the ride-hailing company works with other insurers, including Progressive Corp.