James River Group Holdings, Ltd.

Current report

RISKS RELATING TO THE CHANGE IN OUR PLACE OF INCORPORATION

Current report

Currently, your rights as a shareholder of JRG Holdings arise under Bermuda law as well as our existing Bermuda memorandum of association and bye-laws. Upon effectiveness of the Domestication, your rights as a shareholder of JRG Holdings will arise under Delaware law as well as our new Delaware certificate of incorporation and by-laws.

Current report

Upon effectiveness of the Domestication, the rights of stockholders of James River Delaware will arise under the new certificate of incorporation and by-laws of James River Delaware as well as Delaware law. Those new organizational documents and Delaware law contain provisions that differ in some respects from those in our current organizational documents and Bermuda law and, therefore, some of your rights as a stockholder of James River Delaware will differ from the rights you currently possess as a shareholder of JRG Holdings. For example, under Bermuda law, holders of an aggregate of not less than 20% in par value of a company’s issued share capital or any class thereof have the right to apply to the Supreme Court of Bermuda for an annulment of any amendment of the memorandum of association adopted by shareholders at any general meeting, other than an amendment that alters or reduces a company’s share capital as provided under Bermuda law. No similar right is available under Delaware law. Also, while class actions and derivative actions are generally not available to shareholders under Bermuda law, such actions are generally available under Delaware law. This change could increase the likelihood that we become involved in costly litigation, which could harm our business. Additionally, there are differences between the new organizational documents of James River Delaware and the current organizational documents of JRG Holdings. For example, while our current bye-laws require approval of our board and shareholders to amend any provision of the bye-laws, the James River Delaware by-laws may generally be amended by the board of directors of James River Delaware, as permitted under the Delaware General Corporation Law (the “DGCL”).

Current report

For a summary description of your rights as a stockholder of James River Delaware and how they differ or may differ from your rights as a shareholder of JRG Holdings, please see “Description of Capital Stock—Differences Between the Governing Corporate Law and Organizational Documents for James River Bermuda and James River Delaware” in the Domestication Prospectus. Forms of the new certificate of incorporation and by-laws of James River Delaware are attached, respectively, as Appendix A and Appendix B to the Domestication Prospectus, and we urge you to read them as well.

Current report

Our Corporate Effective Tax Rate may increase as a result of the Domestication.

Current report

Following the Domestication, James River Delaware will be subject to U.S. tax on its income and capital gains and the combined effective tax rate with respect to us and our direct and indirect subsidiaries (the “Effective Tax Rate”) may change significantly, which could materially impact our financial results, including our earnings and cash flow, and reduce the amount of cash available for dividends for periods after the Domestication. The Effective Tax Rate, which fluctuates significantly from period to period, is based upon the application of currently applicable income tax laws and regulations, as well as current judicial and administrative interpretations of these income tax laws and regulations, in various jurisdictions, including many other than the jurisdiction where we are organized and domiciled.

Current report

The highest statutory corporate tax rate for U.S. federal income tax purposes is currently 21%. The Effective Tax Rate for purposes of financial reporting may, however, vary significantly from the statutory rates under which we operate (including the U.S. statutory rate that would apply after the Domestication) because of, among other things, timing differences in the recognition of income and expense for U.S. GAAP and tax purposes. We are unable to predict with certainty the impact of the Domestication on the Effective Tax Rate going forward. In addition, the tax laws of the United States and other jurisdictions could change in the future, and those changes could cause a material increase in our Effective Tax Rate at a later date as well.

Current report

Certain holders of JRG Holdings Stock may be required to recognize gain for U.S. federal income tax purposes as a result of the Domestication.

Current report

As discussed more fully in “Material U.S. Federal Income Tax Consequences of the Domestication” in the Domestication Prospectus, it is expected that the Domestication will constitute a reorganization within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the “Code”) (an “F Reorganization”). Assuming that the Domestication so qualifies, United States Holders (as defined in such section) of JRG Holdings Stock (as defined in such section) will be subject to Section 367(b) of the Code and, as a result:

Current report

•Subject to the discussion below concerning the application of the PFIC rules to the Domestication, a United States Holder of JRG Holdings Stock whose stock has a fair market value of less than $50,000 on the date of the Domestication and who does not actually and/or constructively own (i) 10% or more of the total combined voting power of all classes of JRG Holdings shares entitled to vote or (ii) 10% or more of the total value of all classes of JRG Holdings shares will not recognize any gain or loss and will not be required to include any part of JRG Holdings’ earnings in income.

Current report

•Subject to the discussion below concerning the application of the PFIC rules to the Domestication, a United States Holder of JRG Holdings Stock whose ordinary shares have a fair market value of $50,000 or more, but who does not actually and/or constructively own (i) 10% or more of the total combined voting power of all classes of JRG Holdings shares entitled to vote or (ii) 10% or more of the total value of all classes of JRG Holdings shares will generally recognize gain (but not loss) on the deemed receipt of James River Delaware Stock (as defined in “Material U.S. Federal Income Tax Consequences of the Domestication” in the Domestication Prospectus) in the Domestication. As an alternative to recognizing gain as a result of the Domestication, such United States Holder may file an election to include in income, as a dividend, the “all earnings and profits amount” (as defined in the regulations of the United States Treasury (the “Treasury Regulations”) under Section 367) attributable to its JRG Holdings Stock provided certain other requirements are satisfied.

Current report

•Subject to the discussion below concerning the application of the PFIC rules to the Domestication, a United States Holder of JRG Holdings Stock who on the date of the Domestication actually and/or constructively owns (i) 10% or more of the total combined voting power of all classes of JRG Holdings shares entitled to vote or (ii) 10% or more of the total value of all classes of JRG Holdings shares (a “10% Shareholder”) will generally be required to include in income, as a dividend, the “all earnings and profits amount” (as defined in the Treasury Regulations under Section 367) attributable to its JRG Holdings shares provided certain other requirements are satisfied.

Current report

•As discussed further under “Material U.S. Federal Income Tax Consequences of the Domestication” in the Domestication Prospectus, JRG Holdings believes that it is not and has not been a PFIC for U.S. federal income tax purposes. In the event that JRG Holdings is (or in some cases has been) treated as a PFIC, notwithstanding the foregoing, proposed Treasury Regulations under Section 1291(f) of the Code (which have a retroactive effective date), if finalized in their current form, generally would require a United States Holder to recognize gain as a result of the Domestication unless the United States Holder makes (or has made) certain elections discussed further under “Material U.S. Federal Income Tax Consequences of the Domestication” in the Domestication Prospectus. The tax on any such gain would be imposed at the rate applicable to ordinary income and an interest charge would apply based on a complex set of rules. It is difficult to predict whether such proposed regulations will be finalized and whether, in what form, and with what effective date, other final Treasury Regulations under Section 1291(f) of the Code will be adopted. For a more complete discussion of the potential application of the PFIC rules to United States Holders as a result of the Domestication, see “Material U.S. Federal Income Tax Consequences of the Domestication” in the Domestication Prospectus. Each United States Holder of JRG Holdings Stock is urged to consult its own tax advisor concerning the application of the PFIC rules to the exchange of JRG Holdings Stock for James River Delaware Stock pursuant to the Domestication.

Current report

The tax consequences of the Domestication are complex and will depend on a holder’s particular circumstances. All holders are strongly urged to consult their tax advisor for a full description and understanding of the tax consequences of the Domestication, including the applicability and effect of U.S. federal, state, local and foreign income and other tax laws. For a complete discussion of the material U.S. federal income tax consequences of the Domestication, see “Material U.S. Federal Income Tax Consequences of the Domestication” in the Domestication Prospectus.