James River Group Holdings, Inc.

Previous wording

The availability and cost of reinsurance are subject to prevailing market conditions, both in terms of price and available capacity, each of which can affect our business volume and profitability. The availability of reasonably affordable reinsurance is a critical element of our business plan. One important way we utilize reinsurance is to reduce volatility in claims payments by limiting our exposure to losses from large risks. Another way we use reinsurance is to purchase substantial protection against concentrated losses when we enter new markets. In addition, the ability to obtain reinsurance is critical to our fee-based fronting business. As a result, our ability to manage volatility, mitigate significant losses, expand into new markets, grow by offering insurance to new kinds of enterprises, or grow our fronting business may be limited by the unavailability of reasonably priced reinsurance. We may not be able to obtain reinsurance on acceptable terms or from entities with satisfactory creditworthiness. In such event, if we are unwilling to accept the terms or credit risk of potential reinsurers, we would have to reduce the level of our underwriting commitments, which would reduce our revenues. Reinsurance capacity has become more restricted making reinsurance placements more challenging in recent years.

Current wording

The availability and cost of reinsurance are subject to prevailing market conditions, both in terms of price and available capacity, each of which can affect our business volume and profitability. The availability of reasonably affordable reinsurance is a critical element of our business plan. One important way we utilize reinsurance is to reduce volatility in claims payments by limiting our exposure to losses from large risks. Another way we use reinsurance is to purchase substantial protection against concentrated losses when we enter new markets. In addition, the ability to obtain reinsurance is critical to our fee-based fronting business. As a result, our ability to manage volatility, mitigate significant losses, expand into new markets, grow by offering insurance to new kinds of enterprises, or grow our fronting business may be limited by the unavailability of reasonably priced reinsurance. We may not be able to obtain reinsurance on acceptable terms or from entities with satisfactory creditworthiness. In such event, if we are unwilling to accept the terms or credit risk of potential reinsurers, we would have to reduce the level of our underwriting commitments, which would reduce our revenues. Reinsurance capacity is subject to market cycles and sudden changes. Capacity can be restricted making reinsurance placements more challenging.

Previous wording

Many reinsurance companies exclude certain coverages from, or alter terms in, the reinsurance contracts we enter into with them. Some exclusions relate to risks that we cannot in turn exclude from the policies we write due to business or regulatory constraints. In addition, reinsurers are imposing terms, such as lower per occurrence and aggregate limits, and more exclusions, limiting the protection provided under the reinsurance contract. For example, some of our reinsurance treaties are subject to loss ratio caps or aggregate limits. While ceded losses to our reinsurance treaties were within these loss ratio caps and aggregate limits, where applicable, as of March 31, 2026, less than $500,000 of limit remains available with respect to a reinsurer in one of our 2021 excess casualty reinsurance treaties. If ceded losses were to exceed the loss ratio cap or aggregate limit that applies to a reinsurer’s participation on a given reinsurance contract, the Company would not have reinsurance coverage from that reinsurer's share of losses in excess of such loss ratio cap or aggregate limit, which could have a material adverse effect on our business, liquidity and results of operations. As a result, we, like other direct insurance companies, write insurance policies which to some extent do not have the benefit of reinsurance protection. These gaps in reinsurance protection expose us to greater risk and greater potential losses. For example, certain reinsurers have excluded coverage for terrorist acts or priced such coverage at unreasonably high rates. Many direct insurers, including us, have written policies without terrorist act exclusions and in many cases we cannot exclude terrorist acts because of regulatory constraints. We may, therefore, be exposed to potential losses as a result of terrorist acts. See also “Item 1. Business — Purchase of Reinsurance” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 3, 2026.

Current wording

Many reinsurance companies exclude certain coverages from, or alter terms in, the reinsurance contracts we enter into with them. Some exclusions relate to risks that we cannot in turn exclude from the policies we write due to business or regulatory constraints. In addition, reinsurers are imposing terms, such as lower per occurrence and aggregate limits, and more exclusions, limiting the protection provided under the reinsurance contract. For example, some of our reinsurance treaties are subject to loss ratio caps or aggregate limits. While ceded losses to our reinsurance treaties were within these loss ratio caps and aggregate limits, where applicable, as of June 30, 2026, there can be no assurance that the amount of ceded losses will remain within these loss ratio caps and aggregate limits. If ceded losses were to exceed the loss ratio cap or aggregate limit that applies to a reinsurer’s participation on a given reinsurance contract, the Company would not have reinsurance coverage from that reinsurer's share of losses in excess of such loss ratio cap or aggregate limit, which could have a material adverse effect on our business, liquidity and results of operations. As a result, we, like other direct insurance companies, write insurance policies which to some extent do not have the benefit of reinsurance protection. These gaps in reinsurance protection expose us to greater risk and greater potential losses. For example, certain reinsurers have excluded coverage for terrorist acts or priced such coverage at unreasonably high rates. Many direct insurers, including us, have written policies without terrorist act exclusions and in many cases we cannot exclude terrorist acts because of regulatory constraints. We may, therefore, be exposed to potential losses as a result of terrorist acts. See also “Item 1. Business — Purchase of Reinsurance” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 3, 2026.

Previous wording

In addition to the traditional prospective reinsurance described above, we have purchased retroactive reinsurance in the form of loss portfolio transfers and adverse development covers on certain books of our business. This retroactive reinsurance may prove to be inadequate to cover the adverse loss development on the subject business. In particular, the ES Top Up ADC purchased in 2024 has a $75.0 million limit, $7.5 million of which remains available as of March 31, 2026.

Current wording

In addition to the traditional prospective reinsurance described above, we have purchased retroactive reinsurance in the form of loss portfolio transfers and adverse development covers on certain books of our business. This retroactive reinsurance may prove to be inadequate to cover the adverse loss development on the subject business. For example, the E&S Top Up ADC purchased in 2024 had a $75.0 million limit, none of which remains available as of June 30, 2026.