Cases / Investigations

James River Group Holdings, Ltd.


Company Name:         James River Group Holdings, Ltd.
Securities:                    NASDAQ: JRVR
Class Period:                August 1, 2019 through May 5, 2021
Lead Plaintiff
Motion Deadline:          September 7, 2021
Court:                           Eastern District of Virginia

James River is an insurance holding company that owns and operates a group of specialty insurance and reinsurance companies.  James River offers insurance in three different segments – Excess and Surplus Lines (E&S), Specialty Admitted Insurance, and Casualty Reinsurance.  In the past, Raiser LLC, an affiliate of Uber, was one of James River’s largest customers. 

The James River securities class action litigation concerns whether James River misled investors about its insurance policies covering Uber drivers that were insured through Raiser, and the extent of the claims and losses incurred on those policies.

On October 8, 2019, after trading markets had closed for the day, James River announced it was going to cancel all of Raiser’s policies as of December 31, 2019.  On that news, James River’s stock price fell $11.06 per share, or 22.6%, from its October 8, 2019 closing price and closed at $37.88 per share on October 9, 2019.

On February 17, 2021, James River announced preliminary fourth quarter 2020 results and said it was increasing its fourth quarter 2020 reserves for the commercial auto and casualty reinsurance businesses by $85 million to $90 million.  On the subsequent February 26, 2021 earnings call, James River’s CEO assured investors that “I’m comfortable with where we ended the quarter in particular with the overall group reserve position.  Given indications of our external reserve study, we are definitely better off today than we were a quarter ago” and “So I’m comfortable with the actions we’ve taken.”

Unbeknownst to investors, and as subsequently revealed, during the first quarter of 2021, James River continued to experience higher than expected reported losses on the cancelled Raiser insurance contracts. 

On May 5, 2021, after trading markets had closed for the day, James River announced its first quarter 2021 results and acknowledged that it had to add another $170M million to its commercial auto reserves.  In the earnings press release, James River’s CEO said “[d]uring the quarter, we continued to experience higher than expected reported losses in our large commercial auto account in runoff.  In response, we meaningfully changed our actuarial methodology, resulting in a material strengthening of reserves.”  Furthermore, James River announced it was going to raise $175 million in equity at $31.00 per share which was significantly below James River’s May 5, 2021 closing stock price of $46.50 per share.

On this news, James River’s stock price fell $12.27 per share, or 26.4%, from its May 5, 2021 closing price and closed at $34.23 per share on May 6, 2021.

The James River securities class action litigation alleges, among other things, that the Defendants made false and misleading public statements and failed to disclose that: (1) James River had not adequately reserved for its Uber policies; (2) James River was using an incorrect methodology for setting reserves that materially understated the Company’s true exposure to Uber claims; (3) as a result, James River was forced to increase its unfavorable reserves in subsequent quarters even after cancelling the Uber policies; and (4) as a result of the foregoing, Defendants’ statements about James River’s business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis.

The Private Securities Litigation Reform Act of 1995 permits any investor who purchased James River common stock during the Class Period to ask the court to be appointed as lead plaintiff in the James River securities class action litigation.  A lead plaintiff acts on behalf of all other class members in directing the class action lawsuit, and can select a law firm of its choice to litigate the class action lawsuit.  A court will generally appoint as lead plaintiff the movant with the greatest financial interest in the relief sought by the proposed class of investors and that is also typical and adequate of the proposed class.  An investor’s ability to share in any potential future recovery obtained in the litigation is not dependent upon serving as lead plaintiff.

If you wish to serve as lead plaintiff in the James River securities class action litigation or have questions concerning your rights regarding the James River securities class action litigation, please contact Joshua Ruthizer at (212) 451-9668, (877) 370-7703, or jruthizer@wolfpopper.com.

The deadline for James River investors to file a motion for appointment as lead plaintiff is September 7, 2021.

For further information about this case, contact:

Robert C. Finkel
rfinkel@wolfpopper.com

Joshua W. Ruthizer
jruthizer@wolfpopper.com


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