James River agrees with Uber on legacy business
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James River Group Holdings Ltd. said Thursday that it has secured a reinsurance agreement for its remaining legacy book of business involving ridesharing company Uber Technologies Inc. with an Uber company captive.
James River Group said two of its principal operating subsidiaries have entered into a loss portfolio transfer reinsurance transaction with Aleka Insurance Inc., a wholly owned captive insurer of Uber under which Aleka will reinsure substantially all of James River’s legacy portfolio of commercial auto policies related to Uber’s ridesharing business.
The transaction was effective as of July 1, 2021, and closed upon signing and has received all necessary regulatory approvals.
James River will recognize an after-tax loss associated with the loss portfolio transfer of about $23.5 million during the third quarter of 2021, largely due to claims-handling costs incurred in connection with the transaction.
The agreement includes an administrative services agreement with Helmsman Management Services LLC claims management services of the reinsured commercial auto policies for the remaining life of those claims following a transition period.
James River has ceded a total of about $345.1 million of commercial auto liabilities relating to business written for Uber’s ridesharing business to Aleka in the years 2013-2019. The coverage being provided by Aleka is fully collateralized and not subject to an aggregate limit.
CEO Frank D’Orazio said in the statement the transaction brings economic finality to substantially all of the insurer’s commercial auto runoff portfolio.
James River Group took a hard hit to its third-quarter 2019 earnings as a result of its business with Uber.
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