JAMES RIVER GROUP HOLDINGS, LTD. – 10-K – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis contains forward-looking statements and
involves numerous risks and uncertainties, including those described under the
heading "Risk Factors." Actual results may differ materially from those
contained in any forward-looking statements. You should read this discussion and
analysis together with our audited consolidated financial statements and related
notes included elsewhere in this Form 10-K.

Overview

James River Group Holdings, Ltd. is a Bermuda-based holding company. We own and
operate a group of specialty insurance and reinsurance companies with the
objective of generating compelling returns on tangible equity while limiting
underwriting and investment volatility. We seek to accomplish this by earning
profits from insurance and reinsurance underwriting and generating meaningful
risk-adjusted investment returns, while managing our capital.

For the year ended December 31, 2022, approximately 71.2% of our group-wide
gross written premiums and 90.3% of our group-wide net written premiums
originated from the U.S. E&S lines market, which we believe puts us among the
top three publicly traded insurers as ranked by highest concentrations of E&S
risk. We also have a specialty admitted insurance business in the United States.
We intend to concentrate substantially all of our underwriting in casualty
insurance, and for the year ended December 31, 2022, we derived 96.5% of our
group-wide gross written premiums from casualty insurance. We focus on writing
business in specialty markets where our underwriters have particular expertise
and where we have long-standing distribution relationships; maintaining a strong
balance sheet with appropriate reserves; monitoring reinsurance recoverables
carefully; managing our investment portfolio actively without taking undue risk;
using technology to monitor trends in our business; responding rapidly to market
opportunities and challenges; and actively managing our capital.

We report our business in four segments: Excess and Surplus Lines, Specialty
Admitted Insurance, Casualty Reinsurance and Corporate and Other.

The Excess and Surplus Lines segment offers E&S commercial lines liability and
property insurance in every U.S. state, the District of Columbia, Puerto Rico
and the U.S. Virgin Islands through James River Insurance and its wholly-owned
subsidiary, James River Casualty. James River Insurance and James River Casualty
are both non-admitted carriers. Non-admitted carriers writing in the E&S market
are not bound by most of the rate and form regulations imposed on standard
market companies, allowing them flexibility to change the coverage terms offered
and the rate charged without the time constraints and financial costs associated
with the rate and form filing process. In 2022, the average account in this
segment (excluding commercial auto policies) generated annual gross written
premiums of approximately $24,000. The Excess and Surplus Lines segment
distributes its products primarily through wholesale insurance brokers. Members
of our management team have participated in this market for over three decades
and have long-standing relationships with the wholesale agents who place E&S
lines accounts. The Excess and Surplus Lines segment produced 61.5% of our gross
written premiums and 78.7% of our net written premiums for the year ended
December 31, 2022.

The Specialty Admitted Insurance segment focuses on niche classes within the
standard insurance markets with a primary focus on fronting business, where we
retain a minority share of the risk and seek to earn fee income by allowing
other carriers and producers to use our licensure, ratings, expertise and
infrastructure. We also write workers' compensation coverage for building
trades, healthcare employees, light manufacturing and other light-to-medium
hazard risks in select U.S. states. Through Falls Lake National and its
subsidiaries, this segment has admitted licenses and the authority to write
excess and surplus lines insurance in 50 states and the District of Columbia and
distributes through a variety of sources, including program administrators,
MGAs, and independent retail agents. The Specialty Admitted Insurance segment
produced 32.8% of our gross written premiums and 10.2% of our net written
premiums for the year ended December 31, 2022.

The Casualty Reinsurance segment provides proportional and working layer
casualty reinsurance to third parties and, through December 31, 2021, to our
U.S.-based insurance subsidiaries. Typically, we structure our reinsurance
contracts (also known as treaties) as quota share arrangements, with loss
mitigating features, such as commissions that adjust based on underwriting
results. On a net premium volume basis, treaties with loss mitigation features
including sliding scale ceding commissions represented 40.6% of the net premiums
written by our Casualty Reinsurance segment during 2022. We typically do not
assume large individual risks in our Casualty Reinsurance segment, nor do we
write property catastrophe reinsurance. Most of the underlying policies assumed
by our Casualty Reinsurance segment have a $1.0 million per occurrence limit,
and we typically assume only a portion of that exposure. We do not assume
stand-alone third-party property business at our Casualty Reinsurance segment,
but we do have a small amount of assumed business with ancillary property
exposure. Of the total gross premiums written by our Casualty Reinsurance
segment during 2022, 64.8% were general liability accounts. The Casualty
Reinsurance segment distributes through reinsurance brokers. The Casualty
Reinsurance segment produced 5.7% of our gross written premiums and 11.1% of our
net written premiums for the year ended December 31, 2022.

                                       69
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
The Casualty Reinsurance segment writes third party business through one entity,
JRG Re. Through December 31, 2017, we had intercompany reinsurance agreements
under which we ceded 70% of the net written premiums of our U.S. subsidiaries
(after taking into account third-party reinsurance) to JRG Re. Effective January
1, 2018 through December 31, 2021, we generally discontinued ceding 70% of our
U.S.-written premiums to JRG Re and instead ceded 70% of our U.S.-written
premiums to Carolina Re, a Bermuda-domiciled, wholly-owned subsidiary of James
River Group, Inc. Carolina Re made an irrevocable election to be taxed as a U.S.
domestic corporation under Section 953(d) of the Code effective January 1, 2018.
Carolina Re was also the cedent on a stop loss reinsurance treaty with JRG Re
through December 31, 2021. Business in the Casualty Reinsurance segment is ceded
under proportional, or quota-share, reinsurance treaties that provide for an
arm's length ceding commission. We exclude the effects of intercompany
reinsurance agreements from the presentation of our segment results, consistent
with the way we manage the Company. At December 31, 2022, 33.2% of our invested
assets were held at JRG Re.

The Corporate and Other segment consists of the management and treasury
activities of our holding companies, equity compensation for the group, and
interest expense associated with our debt.

All of the Company's U.S.-domiciled insurance subsidiaries are party to an
intercompany pooling agreement that distributes the net underwriting results
among the group companies based on their approximate pro-rata level of statutory
capital and surplus to the total Company statutory capital and surplus.
Additionally, each of the Company's U.S.-domiciled insurance subsidiaries is a
party to a quota share reinsurance agreement that in periods prior to January 1,
2018 ceded 70% of their premiums and losses to JRG Re, and from January 1, 2018
through December 31, 2021, ceded 70% of their premiums and losses to Carolina
Re. During 2022, Carolina Re commuted the outstanding obligations ceded under
the intercompany quota-share reinsurance agreements back to the Company's
U.S.-based insurance subsidiaries with effect from January 1, 2022. We report
all segment information in this ''Management's Discussion and Analysis of
Financial Condition and Results of Operations'' prior to the effects of
intercompany reinsurance, consistent with the manner in which we evaluate the
operating performance of our reportable segments.

The A.M. Best Company ("A.M. Best") financial strength rating for our group's
regulated insurance and reinsurance subsidiaries is "A-" (Excellent) with a
stable outlook. This rating reflects A.M. Best's evaluation of our insurance and
reinsurance subsidiaries' financial strength, operating performance and ability
to meet obligations to policyholders and is not an evaluation directed towards
the protection of investors. The rating for our operating insurance and
reinsurance companies of "A-" (Excellent) is the fourth highest rating of the
thirteen ratings issued by A.M. Best and is assigned to insurers that have, in
A.M. Best's opinion, an excellent ability to meet their ongoing obligations to
policyholders.

The financial strength ratings assigned by A.M. Best have an impact on the
ability of our regulated subsidiaries to attract and retain agents and brokers
and on the risk profiles of the submissions for insurance that our subsidiaries
receive. We believe the "A-" (Excellent) ratings assigned to our insurance and
reinsurance subsidiaries allow our subsidiaries to actively pursue relationships
with the agents and brokers identified in their marketing plans.

Key Metrics

We discuss certain key metrics, described below, which we believe provide useful
information about our business and the operational factors underlying our
financial performance.

Underwriting profit is a non-GAAP measure commonly used in the property and
casualty insurance industry to evaluate underwriting performance. We believe
that the disclosure of underwriting profit by individual segment and of the
Company as a whole is useful to investors, analysts, rating agencies and other
users of our financial information in evaluating our performance because our
objective is to consistently earn underwriting profits. We evaluate the
performance of our segments and allocate resources based primarily on
underwriting profit. We define underwriting profit as net earned premiums and
gross fee income (in specific instances when the Company is not retaining
insurance risk) less losses and loss adjustment expenses on business not subject
to retroactive reinsurance accounting for loss portfolio transfers (see Loss
Portfolio Transfers in Strategic Actions below) and other operating expenses.
Other operating expenses include the underwriting, acquisition, and insurance
expenses of the operating segments and, for consolidated underwriting profit,
the expenses of the Corporate and Other segment. Our definition of underwriting
profit may not be comparable to that of other companies. See "Reconciliation of
Non-GAAP Measures" for a reconciliation of underwriting profit to income before
taxes and for additional information.

Loss ratio, expressed as a percentage, is the ratio of losses and loss
adjustment expenses on business not subject to retroactive reinsurance
accounting for loss portfolio transfers to net earned premiums. Our definition
of loss ratio may not be comparable to that of other companies. See
"Underwriting Performance Ratios" for a reconciliation of underwriting ratios.

Accident year loss ratio, expressed as a percentage, is the ratio of losses and
loss adjustment expenses for the current accident year (excluding development on
prior accident year reserves) to net earned premiums.

Expense ratio, expressed as a percentage, is the ratio of other operating
expenses net of gross fee income included in other income to net earned
premiums.

                                       70
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Combined ratio is a measure of underwriting performance calculated as the sum of
the loss ratio and the expense ratio. A combined ratio of less than 100%
indicates an underwriting profit, while a combined ratio greater than 100%
reflects an underwriting loss. Our definition of combined ratio may not be
comparable to that of other companies. See "Underwriting Performance Ratios" for
a reconciliation of underwriting ratios.

Adjusted net operating income is an internal performance measure used in the
management of our operations. We believe it gives our management and other users
of our financial information useful insight into our results of operations and
our underlying business performance. Adjusted net operating income is defined as
income available to common shareholders excluding a) the impact of retroactive
reinsurance accounting for loss portfolio transfers, b) net realized and
unrealized gains (losses) on investments, c) certain non-operating expenses such
as professional service fees related to a purported class action lawsuit,
various strategic initiatives, and the filing of registration statements for the
offering of securities, and d) severance costs associated with terminated
employees. Adjusted net operating income is a non-GAAP measure and should not be
viewed as a substitute for net income calculated in accordance with GAAP. Our
definition of adjusted net operating income may not be comparable to that of
other companies. See "Reconciliation of Non-GAAP Measures" for a reconciliation
of income available to common shareholders to adjusted net operating income.

Tangible equity is defined as shareholders' equity plus mezzanine Series A
Preferred Shares (as defined below) and the unrecognized deferred retroactive
reinsurance gain on loss portfolio transfers less goodwill and intangible
assets, net of amortization. We believe tangible equity is a good measure to
evaluate the strength of our balance sheet and to compare returns relative to
this measure. Key financial measures that we use to assess our longer term
financial performance include the percentage growth in our tangible equity per
share and our return on tangible equity. Tangible equity is a non-GAAP measure
and should not be viewed as a substitute for shareholders' equity calculated in
accordance with GAAP. Our definition of tangible equity may not be comparable to
that of other companies. See "Reconciliation of Non-GAAP Measures" for a
reconciliation of shareholders' equity to tangible equity.

Adjusted net operating return on tangible equity is defined as annualized
adjusted net operating income expressed as a percentage of the average quarterly
tangible equity balances in the respective period.

Tangible equity per share represents tangible equity divided by the sum of total
common shares outstanding plus the common shares resulting from an assumed
conversion of the outstanding Series A Preferred Shares into common shares (at
the current conversion price).

Net retention is defined as the ratio of net written premiums to gross written
premiums.

Gross investment yield is annualized investment income before any deductions for
fees and expenses, expressed as a percentage of the average beginning and ending
carrying values of those investments during the period.

Unless specified otherwise, all references to our defined metrics above in this
Management's Discussion and Analysis of Financial Condition and Results of
Operations are for our business that is not subject to retroactive reinsurance
accounting for loss portfolio transfers. Management believes that the lack of
economic impact of retroactive reinsurance accounting makes the presentation of
our key metrics on business not subject to retroactive reinsurance accounting
helpful to the users of our financial information. See "Underwriting Performance
Ratios" and "Reconciliation of Non-GAAP Measures."

Critical Accounting Policies and Estimates

We identified the accounting estimates below as critical to the understanding of
our financial position and results of operations. Critical accounting estimates
are defined as those estimates that are both important to the portrayal of our
financial condition and results of operations and which require us to exercise
significant judgment. We use significant judgment concerning future results and
developments in applying these critical accounting estimates and in preparing
our consolidated financial statements. These judgments and estimates affect the
reported amounts of assets, liabilities, revenues and expenses and the
disclosure of material contingent assets and liabilities. Actual results may
differ materially from the estimates and assumptions used in preparing the
consolidated financial statements. We evaluate our estimates regularly using
information that we believe to be relevant. For a detailed discussion of our
accounting policies, see the Notes to Consolidated Financial Statements included
in this Form 10-K.

Reserve for Losses and Loss Adjustment Expenses

The reserve for losses and loss adjustment expenses represents our estimated
ultimate cost of all reported and unreported losses and loss adjustment expenses
incurred and unpaid at the balance sheet date. We do not discount this reserve.
We estimate the reserve using individual case-basis valuations of reported
claims and statistical analysis. We believe that the use of judgment is
necessary to arrive at a best estimate for the reserve for losses and loss
adjustment expenses given the long-tailed nature of the business generally
written by the Company and the limited operating experience of the Casualty
Reinsurance segment, the fronting and program business in the Specialty Admitted
Insurance segment and the commercial auto business in the Excess and Surplus
Lines segment. In applying this judgment, we may establish reserves that differ
from our internal

                                       71
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
actuaries' estimate. We seek to establish reserves that will ultimately prove to
be adequate. If we have indications that claims frequency or severity exceeds
our initial expectations, we generally increase our reserves for losses and loss
adjustment expenses. Conversely, when claims frequency and severity trends are
more favorable than initially anticipated, we generally reduce our reserves for
losses and loss adjustment expenses once we have sufficient data to confirm the
validity of the favorable trends.

Our Excess and Surplus Lines and Specialty Admitted Insurance segments generally
are notified of losses by our insureds or their brokers. Based on the
information provided, we establish case reserves by estimating the ultimate
losses from the claim, including administrative costs associated with the
ultimate settlement of the claim. Our claims department personnel use their
knowledge of the specific claim along with internal and external experts,
including underwriters and legal counsel, to estimate the expected ultimate
losses.

Our Casualty Reinsurance segment generally establishes case reserves based on
reports received from ceding companies or their brokers. For excess of loss
contracts, we are typically notified of insurance losses on specific contracts,
and we record case reserves based on the estimated ultimate losses on each
claim. For proportional contracts, we typically receive aggregated claims
information and record case reserves based on that information.

We also use statistical analysis to estimate the cost of losses and loss
adjustment expenses that have been incurred but not reported to us. Those
estimates are based on our historical information, industry information and
estimates of future trends that may affect the frequency of claims and changes
in the average cost of claims (severity) that may arise in the future.

The Company's gross reserve for losses and loss adjustment expenses at
December 31, 2022 was $2,769.0 million. Of this amount, 61.5% relates to IBNR.
The Company's gross reserve for losses and loss adjustment expenses by segment
are summarized as follows:

                                               Gross Reserves at December 31, 2022
                                                                                        IBNR %
                                       Case             IBNR             Total         of Total
                                                         ($ in thousands)

Excess and Surplus Lines $ 570,933 $ 1,014,927 $ 1,585,860 64.0 %
Specialty Admitted Insurance

           349,008          406,094          755,102         53.8  %
Casualty Reinsurance                   147,401          280,632          428,033         65.6  %
Total                             $  1,067,342      $ 1,701,653      $ 2,768,995         61.5  %


The Company's net reserve for losses and loss adjustment expenses prior to the
$612,000 allowance for credit losses on reinsurance recoverables at December 31,
2022 was $1,248.3 million. Of this amount, 66.6% relates to IBNR. The Company's
net reserve for losses and loss adjustment expenses by segment are summarized as
follows:

                                                Net Reserves at December 31, 2022
                                                                                        IBNR %
                                        Case             IBNR            Total         of Total
                                                         ($ in thousands)
Excess and Surplus Lines          $   310,192         $ 657,392      $   967,584         67.9  %
Specialty Admitted Insurance           46,852            66,329          113,181         58.6  %
Casualty Reinsurance                   60,213           107,292          167,505         64.1  %
Total                             $   417,257         $ 831,013      $ 1,248,270         66.6  %


Our Reserve Committee consists of our Chief Executive Officer, Chief Financial
Officer, Chief Accounting Officer, and Chief Actuary. Additionally, the
presidents, chief financial officers and segment actuaries of each of our three
insurance segments participate in the Reserve Committee meetings for their
respective segments. The Reserve Committee meets quarterly to review the
actuarial recommendations made by each segment actuary and use their best
judgment to determine the best estimate to be recorded for the reserve for
losses and loss adjustment expenses on our balance sheet.

We engage an independent internationally recognized actuarial consulting firm to
review our reserves for losses and loss adjustment expenses in the third and
fourth quarters of each year. This independent actuarial consulting firm
prepares its own estimate of our reserve for loss and loss adjustment expenses,
and we compare their estimate to the reserve for losses and loss adjustment
expenses reviewed and approved by the Reserve Committee in order to corroborate
the adequacy of our reserves.

The Reserve Committee believes that using judgment to supplement the actuarial
recommendations is necessary to arrive at a best estimate given the nature of
the business generally written by the Company and the limited operating
experience of the

                                       72
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Casualty Reinsurance segment, the fronting and program business in the Specialty
Admitted Insurance segment and the commercial auto business in the Excess and
Surplus Lines segment.

The process of estimating the reserve for losses and loss adjustment expenses
requires a high degree of judgment and is subject to a number of variables. In
establishing the quarterly actuarial recommendation for the reserve for losses
and loss adjustment expenses, our actuaries estimate an initial expected
ultimate loss ratio for each of our product lines by accident year (or for our
Casualty Reinsurance segment, on a contract by contract basis). Input from our
underwriting and claims departments, including premium pricing assumptions and
historical experience, are considered by our internal actuaries in estimating
the initial expected loss ratios. Our actuaries generally utilize five actuarial
methods in their estimation process for the reserve for losses and loss
adjustment expenses. These five methods utilize, to varying degrees, the initial
expected loss ratio, detailed statistical analysis of past claims reporting and
payment patterns, claims frequency and severity, paid loss experience, industry
loss experience, and changes in market conditions, policy forms, exclusions, and
exposures. The five actuarial methods that we use in our reserve estimation
process are:

Expected Loss Method

The Expected Loss method multiplies earned premiums by an initial expected loss
ratio. In our Excess and Surplus Lines segment and for our Workers' Compensation
book in the Specialty Admitted Insurance segment, the initial expected loss
ratio is estimated based on adjusting book of business prior year experience to
current cost and rate level. In our Programs business within the Specialty
Admitted Insurance segment and in our Casualty Reinsurance segment, the expected
loss ratio is based on the actuarial pricing of the individual account.
Alternatively, when company experience lacks historical depth, initial expected
loss ratios can be determined using loss ratios implied by industry loss costs
for the class or reported industry loss ratios.

Incurred Loss Development Method

The Incurred Loss Development method uses historical loss reporting patterns by
accident year or treaty year to estimate future loss reporting patterns. In this
method, our actuaries review historical loss reporting patterns to develop
incurred loss development factors that are applied to current reported losses to
calculate ultimate losses.

Paid Loss Development Method

The Paid Loss Development method is similar to the Incurred Loss Development
method, but it uses historical loss payment patterns to estimate future loss
payment patterns. In this method, our actuaries apply historical loss payment
patterns to develop paid loss development factors that are applied to current
paid losses to calculate expected ultimate losses.

Bornhuetter-Ferguson Incurred Loss Development Method

The Bornhuetter-Ferguson Incurred Loss Development method divides the projection
of ultimate losses into the portion that has already been reported and the
portion that has yet to be reported. The portion that has yet to be reported is
estimated as the product of premiums earned for the accident year, the initial
expected ultimate loss ratio and an estimate of the percentage of ultimate
losses that are unreported at the valuation date. This technique is particularly
valuable when there is a low volume of business being reviewed and reported
losses lack historical depth.

Bornhuetter-Ferguson Paid Loss Development Method

The Bornhuetter-Ferguson Paid Loss Development method is similar to the
Bornhuetter-Ferguson Incurred Loss Development method, except this method
divides the projection of ultimate losses into the portion that has already been
paid and the portion that has yet to be paid. The portion that has yet to be
paid is estimated as the product of premiums earned for the accident year, the
initial expected ultimate loss ratio and an estimate of the percentage of
ultimate losses that are unpaid at the valuation date. This approach assumes
that the paid experience has no effect on the subsequent paid loss emergence of
the business. Again, this technique is particularly valuable when there is a low
volume of business being reviewed and paid losses lack historical depth.

Different reserving methods are appropriate in different situations, and our
actuaries use their judgment and experience to determine the weighting of the
methods detailed above to use for each accident year and each line of business
and, for our Casualty Reinsurance segment, on a contract by contract basis. For
example, the current accident year has very little incurred and paid loss
development data on which to base reserve projections. As a result, we rely
heavily on the Expected Loss Method in estimating reserves for the current
accident year. We generally set our initial expected loss ratio for the current
accident year consistent with our pricing assumptions. We believe that this is a
reasonable and appropriate reserving assumption for the current accident year
since our pricing assumptions are actuarially driven and since we expect to make
an acceptable return on the new business that we write. If actual loss emergence
is better than our initial expected loss ratio assumptions, we will experience
favorable development, and if it is worse than our initial expected loss ratio
assumptions, we will experience adverse development. Conversely, sufficient
incurred and paid loss development is available for our oldest accident years,
so more weight is given to the Incurred Loss Development method and the Paid
Loss Development method than the Expected Loss

                                       73
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
method. The Bornhuetter-Ferguson Incurred Loss Development and Paid Loss
Development methods blend features of the Expected Loss method and the Incurred
and Paid Loss Development methods. The Bornhuetter-Ferguson methods are
typically used for the more recent prior accident years.

In applying these methods to develop an estimate of the reserve for losses and
loss adjustment expenses, our actuaries use judgment to determine three key
parameters for each accident year and line of business: the initial expected
loss ratios, the incurred and paid loss development factors and the weighting of
the five actuarial methods to be used for each accident year and line of
business. Judgment is also required to make actuarial adjustments, if needed,
for changes in claims processing and case reserving that could cause current
reported loss and paid loss development patterns to deviate from historical
patterns. For the Excess and Surplus Lines segment, the segment actuary performs
a study on each of these parameters at least annually and makes recommendations
for the initial expected loss ratios, the incurred and paid loss development
factors and the weighting of the five actuarial methods by accident year and
line of business. Members of the Reserve Committee review and approve the
parameter review actuarial recommendations, and absent any developments
requiring an earlier review, these approved parameters are used in the reserve
estimation process for the next four quarters at which time a new parameter
study is performed. For the Specialty Admitted Insurance segment, expected loss
ratios, loss development factors, and loss cost trends are reviewed and updated
at least annually. For the Casualty Reinsurance segment, periodic assessments
are made on a contract by contract basis. Method weights are generally less
rigid for the Casualty Reinsurance segment given the heterogeneous nature of the
various contracts, and the potential for significant changes in mix of business
within individual treaties.

The table below quantifies the impact of extreme reserve deviations from our
expected value at December 31, 2022. The total carried net reserve for losses
and loss adjustment expenses is displayed alongside 5th, 50th and 95th
percentiles of likely ultimate net reserve outcomes. The estimates of these
percentiles are a result of a reserve variability analysis using a simulation
approach.

Sensitivity                                           5th Pct.             Carried             50th Pct.            95th Pct.
                                                                                  (in thousands)
Reserve for losses and loss adjustment
expenses                                           $ 1,156,992          $ 

1,248,270 $ 1,253,315 $ 1,378,327
Changes in reserves

                                    (91,278)                   -                5,045              130,057


The impact of recording the net reserve for losses and loss adjustment expenses
at the highest value from the sensitivity analysis above would be to increase
losses and loss adjustment expenses incurred by $130.1 million, reduce after-tax
net income by $113.7 million, reduce shareholders' equity by $113.7 million and
reduce shareholders' tangible equity by $113.7 million, in each case at or for
the year ended December 31, 2022.

The impact of recording the net reserve for losses and loss adjustment expenses
at the lowest value from the sensitivity analysis above would be to reduce
losses and loss adjustment expenses incurred by $91.3 million, increase
after-tax net income by $81.2 million, increase shareholders' equity by $81.2
million, and increase tangible equity by $81.2 million, in each case at or for
the year ended December 31, 2022. Such changes in the net reserve for losses and
loss adjustment expenses would not have an immediate impact on our liquidity,
but would affect cash flow and investment income in future periods as the
incremental or reduced amount of losses are paid and investment assets adjusted
to reflect the level of paid claims.

Loss reserve estimates are subject to a high degree of variability due to the
inherent uncertainty of ultimate claims settlement values. In recording our best
estimate of our reserve for losses and loss adjustment expenses, our Reserve
Committee may select an amount that is different from the actuarial
recommendation submitted after considering other qualitative factors and our
knowledge and expectations of trends and other business developments that impact
our best estimate. There is inherent variation associated with our reserve
estimates and the possibility that there are unforeseen or incorrectly valued
liabilities in the actuarial recommendations exists. We believe that the
insurance that we write is subject to above-average variation in reserve
estimates. The Excess and Surplus Lines market is subject to high policyholder
turnover and changes in underlying mix of exposures. This turnover and change in
underlying mix of exposures can cause actuarial estimates based on prior
experience to be less reliable than estimates for more stable, admitted books of
business. As a casualty insurer, losses on our policies often take a number of
years to develop, making it difficult to estimate the ultimate losses associated
with this business. Judicial and regulatory bodies have frequently interpreted
insurance contracts in a manner that expands coverage beyond that which was
contemplated at the time that the policy was issued. In addition, many of our
policies are issued on an occurrence basis, and insureds suffering a loss
frequently seek coverage beyond the policies' original intent.

Our reserves are driven by a number of important assumptions, including
litigation and regulatory trends, legislative activity, climate change, social
and economic patterns and claims inflation assumptions. Our reserve estimates
reflect current inflation in legal claims' settlements and assume we will not be
subject to losses from significant new legal liability theories. Our reserve
estimates also assume that we will not experience significant losses from mass
torts and that we will not incur losses from future mass torts not known to us
today. While it is not possible to predict the impact of changes in the
litigation environment, if new mass torts or expanded legal theories of
liability emerge, our cost of claims may differ substantially from

                                       74
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
our reserves. Our reserve estimates assume that there will not be significant
changes in the regulatory and legislative environment. The impact of potential
changes in the regulatory or legislative environment is difficult to quantify in
the absence of specific, significant new regulation or legislation. In the event
of significant new regulation or legislation, we will attempt to quantify its
impact on our business but no assurance can be given that our attempt to
quantify such inputs will be accurate or successful.

IBNR reserve estimates are inherently less precise than case reserve estimates.
A 5% change in net IBNR reserves at December 31, 2022 would equate to a $41.6
million change in the reserve for losses and loss adjustment expenses at such
date, a $34.0 million change in after-tax net income, a 6.1% change in
shareholders' equity and a 6.8% change in tangible equity, in each case at or
for the year ended December 31, 2022.

Although we believe that our reserve estimates are reasonable, it is possible
that our actual loss experience may not conform to our assumptions.
Specifically, our actual ultimate loss ratio could differ from our initial
expected loss ratio or our actual reporting and payment patterns could differ
from our expected reporting and payment patterns, which are based on our own
data and industry data. Accordingly, the ultimate settlement of losses and the
related loss adjustment expenses may vary significantly from the estimates
included in our financial statements. We regularly review our estimates and
adjust them as necessary as experience develops or as new information becomes
known to us. Such adjustments are included in current operations.

We experienced $9.1 million of adverse development in 2022 on the reserve for
losses and loss adjustment expenses held at December 31, 2021 (excluding adverse
prior year development subject to retroactive reinsurance accounting - see Loss
Portfolio Transfers in Strategic Actions below). This adverse reserve
development included $210,000 of favorable development in the Excess and Surplus
Lines segment, $4.2 million of favorable development in the Specialty Admitted
Insurance segment, and $13.4 million of adverse development in the Casualty
Reinsurance segment.

We experienced $325.8 million of adverse development in 2021 on the reserve for
losses and loss adjustment expenses held at December 31, 2020. This adverse
reserve development included $190.7 million of adverse development in the Excess
and Surplus Lines segment including $200.1 million of adverse development in the
commercial auto line of business that was primarily related to the 2019 and
prior accident years with Rasier LLC and its affiliates (collectively,
"Rasier"). The adverse development for commercial auto was partially offset by
$9.4 million of favorable development in other Excess and Surplus Lines
underwriting divisions. Favorable reserve development in the Specialty Admitted
Insurance segment was $2.5 million as losses on our workers' compensation
business written prior to 2020 continued to develop more favorably than we had
anticipated. The Casualty Reinsurance segment experienced $137.6 million of
adverse development on prior accident years. Actual reported and paid losses in
the Casualty Reinsurance segment significantly exceeded expectations in 2021,
particularly in the fourth quarter of 2021, causing us to refine some of the
assumptions used to determine our best estimate of ultimate losses for this
segment. Specifically, we responded to this highly elevated loss emergence by
making significant adjustments to our assumed tail factors, other development
factors, initial expected loss ratios, and weights given to various actuarial
methods. In particular, we gave significantly more weight to incurred loss
development methods and Bornhuetter - Ferguson incurred loss development methods
than had been done previously. These actuarial refinements resulted in material
deterioration in ultimate loss selections for underwriting years 2014 through
2018.

Investment Valuation and Impairment

We carry fixed maturity securities classified as "available-for-sale" at fair
value, and unrealized gains and losses on such securities, net of any deferred
taxes, are reported as a separate component of accumulated other comprehensive
income (loss). Equity securities (except those accounted for under the equity
method of accounting or those that result in consolidation of the investee) are
measured at fair value with changes in fair value recognized in net income.
Certain restricted cash equivalents invested in funds with floating net asset
values are measured at fair value with changes in fair value recognized in net
income. At December 31, 2022, we do not have any securities classified as
"held-to-maturity" or "trading."

The Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic
326): Measurement of Credit Losses on Financial Instruments on January 1, 2020.
This update changed the impairment model for available-for-sale fixed maturities
and requires the Company to determine whether unrealized losses on
available-for-sale fixed maturities are due to credit-related factors. An
allowance for credit losses is established for any credit-related impairments,
limited to the amount by which fair value is below amortized cost. Changes in
the allowance for credit losses are recognized in earnings and included in net
realized and unrealized gains (losses) on investments. Unrealized losses that
are not credit-related continue to be recognized in other comprehensive income
(loss).

The Company considers the extent to which fair value is below amortized cost in
determining whether a credit-related loss exists. The Company also considers the
credit quality rating of the security, with a special emphasis on securities
downgraded below investment grade. A comparison is made between the present
value of expected future cash flows for a security and its amortized cost. If
the present value of future expected cash flows is less than amortized cost, a
credit loss is presumed to exist and an allowance for credit losses is
established. Management may conclude that a qualitative analysis is sufficient
to support

                                       75
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
its conclusion that the present value of the expected cash flows equals or
exceeds a security's amortized cost. As a result of this review, management
concluded that there were no credit-related impairments of fixed maturity
securities at December 31, 2022, 2021, or 2020. Management does not intend to
sell the securities in an unrealized loss position, and it is not "more likely
than not" that the Company will be required to sell these securities before a
recovery in their value to their amortized cost basis occurs.

In connection with the adoption of ASU 2016-13, the Company elected the fair
value option in accounting for bank loan participations effective January 1,
2020. The targeted transition relief offered by ASU 2019-05, Financial
Instruments - Credit Losses (Topic 326): Targeted Transition Relief was applied
to elect the fair value option to account for bank loan participations already
held at the January 1, 2020 date of adoption. Under the fair value option, bank
loan participations are measured at fair value, and changes in unrealized gains
and losses in bank loan participations are reported in our income statement as
net realized and unrealized gains (losses) on investments. At adoption on
January 1, 2020, the Company applied the amendments on a modified retrospective
basis, reducing the carrying value of its bank loan portfolio to fair value
through an $8.4 million adjustment with a $7.8 million (net of tax) cumulative
effect adjustment to reduce retained earnings.

Losses due to credit-related impairments on bank loan participations are
determined based upon consultations and advice from the Company's specialized
investment manager and consideration of any adverse situations that could affect
the borrower's ability to repay, the estimated value of underlying collateral,
and other relevant factors. For the year ended December 31, 2022, management
concluded that $1.5 million of the unrealized losses were due to credit-related
impairments. Management concluded that none of the unrealized losses were due to
credit-related impairments for the year ended December 31, 2021. For the year
ended December 31, 2020, management concluded that $8.3 million of the
unrealized losses were due to credit-related impairments.

Fair values are measured in accordance with ASC 820, Fair Value
Measurements. The guidance establishes a framework for measuring fair value and
a three-level hierarchy based upon the quality of inputs used to measure fair
value. The three levels of the fair value hierarchy are: (1) Level 1: quoted
price (unadjusted) in active markets for identical assets, (2) Level 2: inputs
to the valuation methodology include quoted prices for similar assets and
liabilities in active markets, and inputs that are observable for the asset or
liability, either directly or indirectly, for substantially the full term of the
instrument and (3) Level 3: inputs to the valuation methodology are unobservable
for the asset or liability.

The fair values of fixed maturity securities and equity securities have been
determined using fair value prices provided by our investment accounting
services provider or investment managers, who utilize internationally recognized
independent pricing services. The prices provided by the independent pricing
services are generally based on observable market data in active markets (e.g.
broker quotes and prices observed for comparable securities). Values for U.S.
Treasury and publicly-traded equity securities are generally based on Level 1
inputs which use the market approach valuation technique. The values for all
other fixed maturity securities (including state and municipal securities and
obligations of U.S. government corporations and agencies) generally incorporate
significant Level 2 inputs, and in some cases, Level 3 inputs, using the market
approach and income approach valuation techniques.

The fair values of cash and cash equivalents, restricted cash equivalents
(excluding those invested in funds with floating net asset values), and
short-term investments approximate their carrying values due to their short-term
maturity.

In the determination of the fair value for bank loan participations and certain
high yield bonds, the Company endeavors to obtain data from multiple external
pricing sources. External pricing sources may include brokers, dealers, and
price data vendors that provide a composite price based on prices from multiple
dealers. Such external pricing sources typically provide valuations for normal
institutional size trading units of such securities using methods based on
market transactions for comparable securities, and various relationships between
securities, as generally recognized by institutional dealers. For investments in
which the Company determines that only one external pricing source is
appropriate or if only one external price is available, the investment is
generally recorded based on such price.

Investments for which external sources are not available or are determined by an
investment manager not to be representative of fair value are recorded at fair
value as determined by the investment manager. In determining the fair value of
such investments, the investment manager considers one or more of the following
factors: type of security held, convertibility or exchangeability of the
security, redeemability of the security (including the timing of redemptions),
application of industry accepted valuation models, recent trading activity,
liquidity, estimates of liquidation value, purchase cost and prices received for
securities with similar terms of the same issuer or similar issuers. There were
no bank loan participations for which external sources were unavailable to
determine fair value at December 31, 2022 or 2021.

We review fair value prices provided by our outside investment accounting
service provider or our investment managers for reasonableness by comparing the
fair values provided to those provided by our investment custodian. We conduct
corroborative price testing comparing prices utilized for each security to those
from an alternate reputable pricing service. We also review and monitor changes
in fair values and unrealized gains and losses. We obtain an understanding of
the methods, models, and inputs used by our investment managers and independent
pricing services, and controls are in place to validate that

                                       76
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
prices provided represent fair values. Our control process includes, but is not
limited to, initial and ongoing evaluation of the methodologies used, a review
of specific securities and an assessment for proper classification within the
fair value hierarchy, and obtaining and reviewing internal control reports for
our investment accounting services provider and investment managers that obtain
fair values from independent pricing services.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and
Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in
Entity's Own Equity (Subtopic 815-40), Accounting for Convertible Instruments
and Contracts in an Entity's Own Equity. ASU 2020-06 simplifies the accounting
for convertible debt instruments and convertible preferred stock and became
effective for interim and annual periods beginning after December 15, 2021. The
Company adopted the new standard concurrent with the issuance of our 7% Series A
Perpetual Cumulative Convertible Preferred Shares on March 1, 2022. Under ASU
2020-06, embedded conversion features are no longer separated from the host
contract for convertible instruments with conversion features that are not
required to be accounted for as derivatives under Topic 815, or that do not
result in substantial premiums accounted for as paid-in capital. The new
guidance also requires entities to use the if-converted method for all
convertible instruments in the diluted earnings per share calculation and
generally requires them to include the effect of potential share settlement for
instruments that may be settled in cash or shares. Adoption of the new standard
did not materially impact our financial position, results of operations, or
earnings per share for the year ended December 31, 2022.

Impact of the COVID-19 Pandemic

The Company's financial condition and results of operations were not materially
impacted by the coronavirus (COVID-19) pandemic during 2022. However, we are
continuing to monitor a number of risks that COVID-19 poses to the Company. For
a description of these risks, see "Part I-Item 1A. Risk Factors" in this Annual
Report on Form 10-K.

Impact of Macroeconomic Events Including Higher Levels of Inflation and Rising
Interest Rates

Current macroeconomic events including the war in Ukraine and sustained supply
chain constraints stemming from the COVID-19 pandemic led to higher levels of
inflation in 2022. The Federal Reserve, attempting to gain control of inflation,
implemented a series of federal funds rate increases in 2022 and early 2023.
Interest rates, in response, rose significantly in 2022 and fears of an
impending economic slowdown have increased the likelihood of an economic
recession, all of which negatively impacted financial markets. The immediate
impacts to the Company were on our investment portfolio and investing results.
Our investment portfolio is primarily comprised of fixed maturity investments
(81.3% of total invested assets at December 31, 2022). The fair values of fixed
maturities generally move inversely with interest rates, and unrealized losses
associated with the declines in fair values are recognized as a component of
other comprehensive income (loss), contributing to declines in shareholders'
equity and tangible equity. For the year ended December 31, 2022, other
comprehensive loss, representing the after-tax impact of the unrealized losses
on fixed maturity investments, was $193.0 million. We are monitoring our
portfolio for signs of credit-related impairments, and to date, we have
concluded that the declines are primarily interest rate and market-driven with
no allowance for credit losses considered necessary. As turnover has occurred in
our portfolio and we invest cash generated from operations, we are benefiting
from the higher yields now available on fixed maturities which is reflected in
our investment income. Our investment portfolio also contains investments in
equity securities and bank loan participations (comprising 5.4% and 7.1% of
total invested assets at December 31, 2022, respectively) that are carried on
our Balance Sheets at fair value. The fair values of these investments, the
changes in which are recognized as unrealized gains and losses in our Statements
of Income (Loss) and Comprehensive (Loss) Income, have been negatively impacted
by the ongoing macroeconomic events and associated declines in financial
markets. Net realized and unrealized (losses) gains on investments for the year
ended December 31, 2022 include unrealized losses of $11.2 million and $15.9
million, respectively, for the changes in fair values of equity securities and
bank loan participations. The rising interest rates have also increased interest
expense on our outstanding variable rate senior and trust preferred debt. The
applicable rates on our debt reset quarterly or semi-annually and are structured
as LIBOR plus a margin or spread.

Strategic Actions

Issuance of Series A Preferred Shares

The Company closed on the issuance and sale of 150,000 7% Series A Perpetual
Cumulative Convertible Preferred Shares, par value $0.00125 per share (the
"Series A Preferred Shares") on March 1, 2022 for an aggregate purchase price of
$150.0 million, or $1,000 per share, in a private placement. The Series A
Preferred Shares are convertible into the Company's common shares at the option
of the holder at any time, or at the Company's option under certain
circumstances. Dividends on the Series A Preferred Shares accrue quarterly at
the initial rate of 7% of the $1,000 liquidation preference per share (the
"Liquidation Preference") per annum, which may be paid in cash, in-kind in
common shares or in Series A Preferred Shares, at the Company's election. During
2022, cash dividends of $8.8 million were declared, of which $2.6 million was
payable at December 31, 2022. Please see "Note 11. Series A Preferred Shares" in
the Notes to our Consolidated Financial Statements in this Form 10-K.

                                       77
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Loss Portfolio Transfers

Loss portfolio transfers are a form of reinsurance utilized by the Company to
transfer losses and loss adjustment expenses and associated risk of adverse
development on covered subject business, as defined in the respective
agreements, to an assuming reinsurer in exchange for a reinsurance premium. Loss
portfolio transfers can bring economic finality on the subject risks when they
no longer meet the Company's appetite or are no longer aligned with our risk
management guidelines.

Commercial Auto Loss Portfolio Transfer

On September 27, 2021, James River Insurance Company and James River Casualty
Company (together, "James River") entered into a loss portfolio transfer
transaction (the "Commercial Auto LPT") with Aleka Insurance, Inc. ("Aleka"), a
captive insurance company affiliate of Rasier LLC, to reinsure substantially all
of the Excess and Surplus Lines segment's legacy portfolio of commercial auto
policies previously issued to Rasier LLC and its affiliates (collectively,
"Rasier") for which James River is not otherwise indemnified by Rasier. Under
the terms of the transaction, effective as of July 1, 2021, James River ceded to
Aleka approximately $345.1 million of commercial auto liabilities relating to
Rasier policies written in the years 2013-2019, which amount constituted the
reinsurance premium. The reinsurance coverage is structured to be fully
collateralized, is not subject to an aggregate limit, and is subject to certain
exclusions. A pre-tax loss of $29.6 million was recognized as adverse loss and
loss adjustment reserve development in the Excess and Surplus Lines segment for
the third quarter of 2021 associated with the loss portfolio transfer.

Casualty Re Loss Portfolio Transfer

On February 23, 2022, JRG Re entered into a loss portfolio transfer retrocession
agreement (the "Casualty Re LPT") with Fortitude Reinsurance Company Ltd.
("FRL") under which FRL reinsures the majority of the reserves in the Company's
Casualty Reinsurance segment. Under the terms of the transaction, which closed
on March 31, 2022 (the "Retrocession Closing Date"), JRG Re (a) ceded to FRL all
existing and future claims for losses arising under certain casualty reinsurance
agreements with underlying insurance companies with treaty inception dates
ranging from 2011 to 2020 (the "Subject Business"), in each case net of
third-party reinsurance and other recoveries, up to an aggregate limit of
$400.0 million; (b) continues to manage and retain the benefit of other
third-party reinsurance on the Subject Business; (c) paid FRL a reinsurance
premium of $335.0 million, $310.0 million of which JRG Re credited to a notional
funds withheld account (the "Funds Withheld Account") and $25.0 million of which
was paid in cash to FRL; and (d) pays FRL a 2% per annum crediting rate on the
Funds Withheld Account balance on a quarterly basis. The total premium, initial
Funds Withheld Account credit, and aggregate limit was adjusted for claims paid
from October 1, 2021 to the Retrocession Closing Date. The Casualty Reinsurance
segment incurred $6.8 million of net adverse reserve development in the three
months ended March 31, 2022 associated with the Casualty Re LPT. The Funds
Withheld Account balance was $213.6 million at December 31, 2022 and Funds
Withheld Account crediting fees of $3.7 million are included in interest expense
in our Statements of Income (Loss) and Comprehensive (Loss) Income for the year
ended December 31, 2022.

Retroactive Reinsurance Accounting

The Company periodically reevaluates the remaining reserves subject to the
Commercial Auto LPT and the Casualty Re LPT (together, the "Loss Portfolio
Transfers"). For the year ended December 31, 2022, due to adverse paid loss
trends on the legacy Rasier business, the Company recognized adverse prior year
development of $46.7 million on the reserves subject to the Commercial Auto LPT,
resulting in a corresponding additional amount ceded under the Commercial Auto
LPT. As a result, the cumulative amounts ceded under the Commercial Auto LPT
exceed the consideration paid, moving the Commercial Auto LPT into a gain
position and requiring retroactive reinsurance accounting. Similarly, due to
adverse paid and reported loss trends on the business subject to the Casualty Re
LPT, the Company ceded an additional $6.1 million of losses recoverable under
the Casualty Re LPT for the year ended December 31, 2022, moving the Casualty Re
LPT into a deferred gain position requiring retroactive reinsurance accounting.
At December 31, 2022, the Company has $58.9 million of aggregate limit remaining
under the Casualty Re LPT.

Under retroactive reinsurance accounting, gains are deferred and recognized in
earnings in proportion to actual paid recoveries under the Loss Portfolio
Transfers using the recovery method. Over the life of the contracts, we would
expect no economic impact to the Company as long as any additional losses are
within the limit of the loss portfolio transfer and the counterparty performs
under the contract. In periods where the Company recognizes a change in the
estimate of the reserves subject to the Loss Portfolio Transfers that increases
or decreases the amounts ceded under the Loss Portfolio Transfers, the
proportion of actual paid recoveries to total ceded losses is affected and the
change in deferred gain is recognized in earnings as if the revised estimate of
ceded losses was available at the effective date of the loss portfolio transfer.
The effect of the deferred retroactive reinsurance benefit is recorded in losses
and loss adjustment expenses on the Consolidated Statements of Income (Loss) and
Comprehensive (Loss) Income.

Retroactive reinsurance benefits totaling $32.7 million ($31.0 million for the
Commercial Auto LPT and $1.7 million for the Casualty Re LPT) were recorded in
losses and loss adjustment expenses for the year ended December 31, 2022 using
the

                                       78
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
recovery method. As of December 31, 2022, the cumulative amounts ceded under the
Loss Portfolio Transfers was $732.9 million ($391.8 million under the Commercial
Auto LPT and $341.1 million under the Casualty Re LPT). At December 31, 2021,
$345.1 million was ceded under the Commercial Auto LPT. The total unrecognized
deferred retroactive reinsurance gain of $20.1 million at December 31, 2022
under the Loss Portfolio Transfers ($15.7 million related to the Commercial Auto
LPT and $4.4 million related to the Casualty Re LPT) is separately presented on
the Company's Consolidated Balance Sheets.

Suspension of Underwriting Activities in Casualty Reinsurance Segment

In keeping with our previously announced plans to significantly shrink top-line
writings of the Casualty Reinsurance segment, we have decided to suspend writing
business in the Casualty Reinsurance segment, as we continue our focus on
growing our higher returning U.S. insurance and fronting businesses. We expect
the Casualty Reinsurance segment to continue earning premium due to the nature
of the earnings patterns in the reinsurance business, which can extend over
multiple years. Aside from the suspension of underwriting activities, we plan
for the Casualty Reinsurance segment to maintain its normal day-to-day
operations, with a staff to continue servicing the business on its books and to
facilitate compliance with its regulatory requirements.


                                       79
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021

The following table summarizes our results for the years ended December 31, 2022
and 2021:

                                                            Year Ended December 31,
                                                           2022                 2021                 % Change
                                                               ($ in thousands)
Gross written premiums                                $ 1,496,580          $ 1,507,299                     (0.7) %
Net retention                                                50.0  %              49.4  %
Net written premiums                                  $   748,479          $   744,380                      0.6  %
Net earned premiums                                   $   766,161          $   695,594                     10.1  %
Losses and loss adjustment expenses excluding
retroactive reinsurance                                  (524,723)            (792,352)                   (33.8) %
Other operating expenses                                 (191,796)            (160,188)                    19.7  %
Underwriting profit (loss) (1), (2)                        49,642             (256,946)                       -
Losses and loss adjustment expenses - retroactive
reinsurance                                               (20,091)                   -                        -
Net investment income                                      71,111               56,865                     25.1  %

Net realized and unrealized investment (losses) gains (28,318)

    15,564                        -
Other income and expense                                   (5,016)              (2,232)                   124.7  %
Interest expense                                          (17,578)              (8,922)                    97.0  %
Amortization of intangible assets                            (363)                (363)                       -
Income (loss) before taxes                                 49,387             (196,034)                       -
Income tax expense (benefit)                               18,414              (23,235)                       -
Net income (loss)                                     $    30,973          $  (172,799)                       -
Dividends on Series A Preferred Shares                     (8,750)                   -                        -

Net income (loss) available to common shareholders $ 22,223 $ (172,799)

                       -
Adjusted net operating income (loss) (1)              $    69,542          $  (184,245)                       -
Ratios:
Loss ratio                                                   68.5  %             113.9  %
Expense ratio                                                25.0  %              23.0  %
Combined ratio                                               93.5  %             136.9  %
Accident year loss ratio                                     67.3  %              67.1  %
Accident year loss ratio ex-cat (3)                          66.7  %              66.4  %

(1) Underwriting profit (loss) and adjusted net operating income (loss) are
non-GAAP measures. See "Reconciliation of Non-GAAP Measures."

(2) Underwriting results include gross fee income of $23.6 million and $22.7
million for the years ended December 31, 2022 and 2021, respectively.

(3)  Accident year loss ratio excluding $5.0 million of net catastrophe losses
related to Hurricane Ian in the year ended December 31, 2022 and $5.0 million of
net catastrophe losses related to Hurricane Ida in the year ended December 31,
2021.

The Company produced an underwriting profit of $49.6 million and a combined
ratio of 93.5% for the year ended December 31, 2022 compared to an underwriting
loss of $256.9 million and a combined ratio of 136.9% for the year ended
December 31, 2021.

The 10.1% growth in consolidated net earned premiums was driven by attractive
market conditions, particularly for our Excess and Surplus Lines segment, which
reported net earned premium growth of $69.6 million or 14.3% compared to the
prior year. The Excess and Surplus Lines segment is our largest segment,
comprising 61.5% of consolidated gross written premiums and 72.5% of
consolidated net earned premiums in 2022.

Our loss ratio improved from 113.9% in the prior year to 68.5% in the current
year. The improvement was primarily driven by net reserve development on prior
accident years which was $9.1 million or 1.2 percentage points adverse for the
year ended December 31, 2022 compared to $325.8 million or 46.8 percentage
points adverse for the year ended December 31, 2021. The

                                       80
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
$9.1 million of net adverse reserve development for the year ended December 31,
2022 includes $210,000 of net favorable development from the Excess and Surplus
Lines segment, $4.2 million of net favorable development from the Specialty
Admitted Insurance segment, and $13.4 million of net adverse development from
the Casualty Reinsurance segment, of which $6.8 million related to the Company's
entrance into the Casualty Re LPT in March of 2022. The $325.8 million of net
adverse reserve development for the year ended December 31, 2021 included $190.7
million of net adverse reserve development from the Excess and Surplus Lines
segment almost entirely related to a previous commercial auto account, $2.5
million of net favorable development from the Specialty Admitted Insurance
segment, and $137.6 million of net adverse reserve development from the Casualty
Reinsurance segment. Refer to the discussion of segment underwriting results
below for additional details on this adverse reserve development.

Current accident year losses in both years include $5.0 million of net
catastrophe losses (Hurricane Ian in 2022 and Hurricane Ida in 2021) in our
small Excess Property book within the Excess and Surplus Lines segment. The
Excess and Surplus Lines segment has a surplus share reinsurance treaty in
effect that was specifically designed to cover property risks. The surplus share
treaty along with facultative reinsurance helps ensure that our net retained
limit per risk will be $5.0 million or less.

Our expense ratio increased relative to the prior year driven by higher expense
ratios for our Specialty Admitted Insurance and Casualty Reinsurance segments
and higher operating expenses for our Corporate and Other segment. The Specialty
Admitted Insurance segment benefited from 4.3% growth in fee income, but the
segment expense ratio was higher due to slightly lower net earned premiums and
the net impact of commission, tax and assessment accrual adjustments in both
years. The Casualty Reinsurance segment typically structures its reinsurance
treaties with loss mitigation features including profit and sliding scale ceding
commissions. Net adverse reserve development on treaties with such features
reduced our commissions in 2021 by $11.8 million compared to $249,000 in 2022.
Operating expenses for our Corporate and Other segment increased driven by
higher compensation expenses due to the hiring of additional employees.

Underwriting results in the prior year were also negatively impacted by $8.1
million of reinstatement premium, including $6.4 million triggered by one claim
on a 2019 excess of loss treaty in the Excess and Surplus Lines segment. The
reinstatement premium reduced net written and net earned premium and increased
the underwriting loss.

Our net income increased over the prior year due to the improved underwriting
results and higher net investment income, with partially offsetting items
including the $20.1 million of retroactive reinsurance losses and loss
adjustment expenses under the loss portfolio transfers, the unfavorable swing in
net realized and unrealized gains and losses on investments, and higher interest
expense. As discussed above, the Company recognized adverse prior year
development of $52.8 million on the reserves subject to the LPT Agreements in
the year ended December 31, 2022, resulting in corresponding additional amounts
ceded under the LPT Agreements, and requiring retroactive reinsurance
accounting. Retroactive reinsurance benefits of $32.7 million were recorded in
losses and loss adjustment expenses for the year ended December 31, 2022,
resulting in a net impact of $20.1 million within our net losses and loss
adjustment expenses. Higher interest rates in the current year boosted yields on
fixed income investments and increased investment income, but also resulted in
higher interest expense on our variable rate senior and trust preferred debt.
Interest expense for the year ended December 31, 2022 also includes $3.7 million
of crediting fees on the Funds Withheld Account balance under the Casualty Re
LPT. The unfavorable swing in net realized and unrealized gains and losses on
investments (see Investing Results below) also had a negative impact on the
comparative net results for the two years as market values of equity securities
and bank loan participations have declined in the current year due to the effect
of macroeconomic events on financial markets. Net income available to common
shareholders for the year ended December 31, 2022 reflects the $8.8 million of
current year dividends on the Series A Preferred Shares.

Adjusted net operating income (loss) improved from a $184.2 million loss in the
year ended December 31, 2021 to income of $69.5 million in the year ended
December 31, 2022. Tangible equity decreased by 1.2% in 2022 as net income of
$31.0 million and proceeds from the Series A Preferred Share issuance of
$144.9 million were offset by $193.0 million of unrealized losses on our fixed
maturity investments in other comprehensive loss (see Investing Results below).
Tangible equity per share decreased by 14.4% for the year reflecting the small
decrease in tangible equity over a larger share count including an assumed
conversion of the Series A Preferred Shares. Our adjusted net operating return
on tangible equity of 13.5% for the year ended December 31, 2022 compares
favorably to the prior year loss and reflects the turnaround in underwriting
results and higher investment income.

Premiums

Insurance premiums are earned ratably over the terms of our insurance policies,
generally twelve months. Reinsurance premiums assumed are earned over the terms
of the underlying policies or reinsurance contracts. Contracts and policies
written on a "losses occurring" basis cover claims that may occur during the
term of the contract or insurance policy, which is typically twelve months.
Reinsurance contracts which are written on a "risks attaching" basis cover
claims which attach to the underlying insurance policies written during the
terms of such contracts. Premiums earned on such contracts usually extend beyond
the

                                       81
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
original term of the reinsurance contract, typically resulting in recognition of
premiums earned over a 24-month period in proportion to the level of underlying
exposure.

The following table summarizes the change in premium volume by component and
business segment:

                                   Year Ended December 31,
                                    2022             2021          % Change
                                      ($ in thousands)
Gross written premiums:
Excess and Surplus Lines       $    921,164      $   833,657         10.5  %
Specialty Admitted Insurance        490,208          491,561         (0.3) %
Casualty Reinsurance                 85,208          182,081        (53.2) %
                               $  1,496,580      $ 1,507,299         (0.7) %
Net written premiums:
Excess and Surplus Lines       $    589,056      $   501,250         17.5  %
Specialty Admitted Insurance         76,390           83,935         (9.0) %
Casualty Reinsurance                 83,033          159,195        (47.8) %
                               $    748,479      $   744,380          0.6  %
Net earned premiums:
Excess and Surplus Lines       $    555,597      $   486,000         14.3  %
Specialty Admitted Insurance         74,137           75,371         (1.6) %
Casualty Reinsurance                136,427          134,223          1.6  %
                               $    766,161      $   695,594         10.1  %


Gross written premiums for the Excess and Surplus Lines segment (which
represents 61.5% of our consolidated gross written premiums in 2022) increased
10.5% from the prior year. Total policy submissions for Core E&S lines
(excluding commercial auto) declined 4.9% in 2022, but renewal submissions
increased 12.2% and our ratio of bound policies to quoted policies improved
generating 1.5% more bound policies in the year ended December 31, 2022. Renewal
rates for the Excess and Surplus Lines segment were up 9.9% compared to 2021 and
the total number of policies in force grew by 4.2% in 2022. The change in gross
written premiums was notable in several divisions as shown below:

                                                                    Year Ended December 31,
                                                                    2022                   2021                % Change

Excess Casualty                                             $     310,383              $ 285,082                      8.9  %
General Casualty                                                  173,574                140,608                     23.4  %
Manufacturers & Contractors                                       156,645                139,720                     12.1  %
Excess Property                                                    52,104                 47,241                     10.3  %
Small Business                                                     36,930                 32,593                     13.3  %
Sports & Entertainment                                             13,934                  9,442                     47.6  %
All other Core E&S divisions                                      139,620                144,341                     (3.3) %
Total Core E&S divisions                                          883,190                799,027                     10.5  %
Commercial Auto                                             $      37,974              $  34,630                      9.7  %
Excess and Surplus Lines gross written premium              $     921,164              $ 833,657                     10.5  %


                                       82
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
The components of gross written premiums for the Specialty Admitted Insurance
segment (which represents 32.8% of our 2022 consolidated gross written premiums)
are as follows:

                                                              Year Ended December 31,
                                                              2022                   2021                % Change
                                                                 ($ in thousands)
Fronting and program premium                          $     437,221              $ 434,165                      0.7  %
Individual risk workers' compensation premium                52,987                 57,396                     (7.7) %
Specialty Admitted gross written premium              $     490,208              $ 491,561                     (0.3) %


Our fronting written premium increased slightly from the prior year driven by
new fronting relationships in the current year and the continued expansion of
existing fronting relationships (together representing an increase of $50.8
million for the year ended December 31, 2022), and partially offset by the loss
of one relationship from merger and acquisition activity at a general agent and
a decline of $13.2 million or 10.6% in written premium for our largest workers'
compensation program due to a very competitive workers' compensation market in
California. Our two largest fronting relationships represented $231.8 million or
47.3% of segment gross written premium in 2022 compared to $213.6 million or
43.5% in 2021. Individual risk workers' compensation premium declined in 2022
due to the soft market conditions currently present for workers' compensation.

Gross written premiums for the Casualty Reinsurance segment (which represents
5.7% of our consolidated gross written premiums in 2022) decreased 53.2% in 2022
reflecting our current strategic focus on downsizing the Casualty Reinsurance
third party book, which resulted in the nonrenewal of several treaties in the
current year and lower participations on certain renewing treaties. The Casualty
Reinsurance segment generally writes large casualty-focused treaties that are
expected to have lower volatility relative to property and catastrophe treaties.
We rarely write stand-alone property reinsurance. When treaties that include
property exposure are written, we utilize property occurrence caps, inuring
reinsurance protection and low individual risk limits to minimize exposure.

Net Retention

The ratio of net written premiums to gross written premiums is referred to as
our net premium retention. Our net premium retention by segment is as follows:

                                     Year Ended December 31,
                                         2022                2021
Excess and Surplus Lines                        63.9  %     60.1  %
Specialty Admitted Insurance                    15.6  %     17.1  %
Casualty Reinsurance                            97.4  %     87.4  %
Total                                           50.0  %     49.4  %


The net premium retention for the Excess and Surplus Lines segment increased in
2022 largely driven by the segment's Excess Casualty division, which comprises
approximately one-third of the segment's gross written premiums in the years
ended December 31, 2022 and 2021. The Excess Casualty division cedes a high
percentage of written premiums under a reinsurance treaty and changes in growth
rates for this division can impact comparable premium retention ratios for the
segment. In the third quarter of 2022, we increased our retention on the
reinsurance treaty applicable to the Excess Casualty division. Net retention for
the Excess Casualty division was 20.3% in 2022 compared to 14.1% in 2021. In
addition, net retention for the segment in 2021 was impacted by $8.1 million of
reinstatement premium in the prior year third quarter which reduced net written
premium and the net retention for that year.

The net premium retention for the Specialty Admitted Insurance segment decreased
in 2022 primarily due to a lower retention in the fronting business reflecting
the mix of business and changes in reinsurance coverage as treaties renew. The
net retention on the segment's fronting business was 13.9% and 15.7% in the
years ended December 31, 2022 and 2021, respectively. The net retention on the
workers' compensation business was 29.8% and 27.3% for the years ended
December 31, 2022 and 2021, respectively. The renewal of the workers'
compensation quota share treaty on January 1, 2022 resulted in a higher
retention for this business.

The Casualty Reinsurance segment previously wrote a retrocessional
treaty/fronting arrangement under which 100% of the premiums were ceded. The
treaty was nonrenewed for 2022 and higher net retention in the current year
reflects adjustments to prior year assumed and ceded written premiums on the
treaty.

                                       83
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Segment Results

The following table presents our combined ratios by segment:

                                      Year Ended December 31,
                                         2022                2021
Excess and Surplus Lines                        85.1  %     125.0  %
Specialty Admitted Insurance                    94.3  %      87.2  %
Casualty Reinsurance                           104.7  %     187.6  %
Total                                           93.5  %     136.9  %

Excess and Surplus Lines Segment

Results for the Excess and Surplus Lines segment are as follows:

                                           Year Ended December 31,
                                            2022             2021          % Change
                                              ($ in thousands)
Gross written premiums                 $   921,164       $  833,657          10.5  %
Net written premiums                   $   589,056       $  501,250          17.5  %
Net earned premiums                    $   555,597       $  486,000          14.3  %
Losses and loss adjustment expenses       (366,352)        (516,299)        (29.0) %
Underwriting expenses                     (106,194)         (91,179)         16.5  %
Underwriting profit (loss)(1)          $    83,051       $ (121,478)            -
Ratios:
Loss ratio                                    65.9  %         106.2  %
Expense ratio                                 19.2  %          18.8  %
Combined ratio                                85.1  %         125.0  %
Accident year loss ratio                      66.0  %          67.0  %
Accident year loss ratio ex-cat (2)           65.1  %          66.0  %

(1) Underwriting Profit (Loss) is a non-GAAP Measure. See "Reconciliation of
Non-GAAP Measures."

(2)  Accident year loss ratio excluding $5.0 million of net catastrophe losses
related to Hurricane Ian in the year ended December 31, 2022 and $5.0 million of
net catastrophe losses related to Hurricane Ida in the year ended December 31,
2021.

The Excess and Surplus Lines segment produced an underwriting profit of $83.1
million and combined ratio of 85.1% for the year ended December 31, 2022
compared to an underwriting loss of $121.5 million and a combined ratio of
125.0% for the year ended December 31, 2021. The loss ratio of 65.9% for the
year ended December 31, 2022 includes $210,000 of net favorable reserve
development (excluding adverse prior year development on the legacy Rasier
business and the impact of retroactive reinsurance - see Commercial Auto Loss
Portfolio Transfer in Strategic Actions) in our loss estimates for prior
accident years. The loss ratio of 106.2% for the year ended December 31, 2021
included $190.7 million of net adverse reserve development (39.2 percentage
points) in our loss estimates for prior accident years, including $200.1 million
of net adverse reserve development on our commercial auto business that was
almost entirely related to the legacy Rasier business that has been in runoff
since 2019. We had expected that reported losses on this terminated commercial
auto account would decline as the account moved further into runoff, but the
continued heavy reported loss emergence in 2021 indicated more inherent severity
than anticipated. In response, we meaningfully adjusted our actuarial
methodology, resulting in a significant strengthening of reserves for this
account.

Current accident year losses in both 2022 and 2021 include $5.0 million of net
catastrophe losses (Hurricane Ian in 2022 and Hurricane Ida in 2021) in our
small Excess Property book within the Excess and Surplus Lines segment. The
Excess and Surplus Lines segment has a surplus share reinsurance treaty in
effect that was specifically designed to cover property risks. The surplus share
treaty along with facultative reinsurance helps ensure that our net retained
limit per risk will be $5.0 million or less.

Written and earned premiums for our Excess and Surplus Lines segment grew due to
attractive market conditions. Net earned premiums increased $69.6 million or
14.3% over the prior year, including growth in lines that have meaningful ceding

                                       84
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
commissions. The segment expense ratio increased slightly over the prior year
primarily due to higher compensation related expenses.

Underwriting results in the prior year were also negatively impacted by $8.1
million of reinstatement premium, including $6.4 million triggered by one claim
on a 2019 excess of loss treaty in the Excess and Surplus Lines segment. The
reinstatement premium reduced net written and net earned premium in the prior
year quarter and year to date and increased the underwriting loss.

Specialty Admitted Insurance Segment

Results for the Specialty Admitted Insurance segment are as follows:

                                           Year Ended December 31,
                                            2022              2021         % Change
                                              ($ in thousands)
Gross written premiums                 $    490,208       $ 491,561          (0.3) %
Net written premiums                   $     76,390       $  83,935          (9.0) %
Net earned premiums                    $     74,137       $  75,371          (1.6) %
Losses and loss adjustment expenses         (58,548)        (55,875)          4.8  %
Underwriting expenses                       (11,355)         (9,829)         15.5  %
Underwriting profit(1), (2)            $      4,234       $   9,667         (56.2) %
Ratios:
Loss ratio                                     79.0  %         74.1  %
Expense ratio                                  15.3  %         13.1  %
Combined ratio                                 94.3  %         87.2  %
Accident year loss ratio                       84.6  %         77.5  %

(1) Underwriting Profit is a non-GAAP Measure. See "Reconciliation of Non-GAAP
Measures."

(2) Underwriting profit includes fee income of $23.6 million and $22.7 million
for the years ended December 31, 2022 and 2021, respectively.

The Specialty Admitted Insurance segment generated underwriting profits of $4.2
million and $9.7 million (combined ratios of 94.3% and 87.2%) for the years
ended December 31, 2022 and 2021, respectively. The loss ratios of 79.0% and
74.1% for the years ended December 31, 2022 and 2021 include $4.2 million and
$2.5 million (5.6 and 3.3 percentage points, respectively) of net favorable
development on prior accident years. The favorable development in both 2022 and
2021 reflects the fact that actual loss emergence of the workers' compensation
book for prior accident years has been better than expected. The higher current
accident year loss ratio in 2022 (84.6% compared to 77.5% in the prior year)
reflects current actuarial indications and higher loss trends in the business.

The expense ratio of the Specialty Admitted Insurance segment was 15.3% for the
year ended December 31, 2022 compared to the prior year ratio of 13.1%,
reflecting slightly lower net earned premiums, higher compensation related
expenses, and the net impact of commission, tax and assessment accrual
adjustments. The segment also benefited from growth in our fronting business
which led to a 4.3% increase in fee income.

                                       85
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Casualty Reinsurance Segment

Results for the Casualty Reinsurance segment are as follows:

                                           Year Ended December 31,
                                            2022             2021          % Change
                                              ($ in thousands)
Gross written premiums                 $    85,208       $  182,081         (53.2) %
Net written premiums                   $    83,033       $  159,195         (47.8) %
Net earned premiums                    $   136,427       $  134,223           1.6  %
Losses and loss adjustment expenses        (99,823)        (220,178)        (54.7) %
Underwriting expenses                      (42,987)         (31,571)         36.2  %
Underwriting loss(1)                   $    (6,383)      $ (117,526)        (94.6) %
Ratios:
Loss ratio                                    73.2  %         164.0  %
Expense ratio                                 31.5  %          23.6  %
Combined ratio                               104.7  %         187.6  %
Accident year loss ratio                      63.3  %          61.5  %

(1) Underwriting Loss is a non-GAAP Measure. See "Reconciliation of Non-GAAP
Measures."

The Casualty Reinsurance segment produced underwriting losses of $6.4 million
and $117.5 million (combined ratios of 104.7% and 187.6%) for the years ended
December 31, 2022 and 2021, respectively. The loss ratio of 73.2% for the year
ended December 31, 2022 includes net adverse reserve development of $13.4
million or 9.8 points (including $6.8 million of net adverse reserve development
on prior accident years recognized in the three months ended March 31, 2022
associated with the Casualty Re LPT). The loss ratio of 164.0% for the year
ended December 31, 2021 includes $137.6 million, or 102.5 percentage points, of
net adverse development in our loss estimates for prior accident years. Actual
reported and paid losses in the Casualty Reinsurance segment significantly
exceeded expectations in 2021, particularly in the fourth quarter of 2021,
causing us to refine some of the assumptions used to determine our best estimate
of ultimate losses for this segment. Specifically, we responded to this highly
elevated loss emergence by making significant adjustments to our assumed tail
factors, other development factors, initial expected loss ratios, and weights
given to various actuarial methods. In particular, we gave significantly more
weight to incurred loss development methods and Bornhuetter - Ferguson incurred
loss development methods than had been done previously. These actuarial
refinements resulted in material deterioration in ultimate loss selections for
underwriting years 2014 through 2018.

The Casualty Reinsurance segment focuses on proportional reinsurance which
requires larger ceding commissions resulting in a higher commission expense than
in our other segments. The segment typically structures its reinsurance treaties
with loss mitigation features including sliding scale ceding commissions. Net
adverse reserve development on treaties with such features reduced our
commissions by $11.8 million (8.8 percentage points) for the year ended
December 31, 2021 compared to $249,000 for the year ended December 31, 2022.

Corporate and Other Segment

Other operating expenses for the Corporate and Other segment include personnel
costs associated with the Bermuda and U.S. holding companies, professional fees,
and various other corporate expenses that were not reimbursed by our
subsidiaries, including costs associated with our internal quota share, rating
agencies and strategic initiatives. The expenses are included in our calculation
of consolidated underwriting profit, and in our consolidated expense ratio and
combined ratio.

Total operating expenses of the Corporate and Other segment were $31.3 million
and $27.6 million for the years ended December 31, 2022 and 2021, respectively.
The higher current year expenses as compared to the prior year were largely
driven by higher compensation expenses due to the hiring of additional
employees.

Investing Results

Net investment income was $71.1 million for the year ended December 31, 2022
compared to $56.9 million in the prior year. The Company's private investments
generated income of $3.4 million and $2.2 million for the years ended
December 31, 2022 and 2021, respectively. Excluding private investments, our net
investment income for the year ended December 31, 2022 increased 23.9% over the
prior year principally due to higher yields on fixed maturities, bank loan
participations, short-term investments, and cash and cash equivalents.

                                       86

--------------------------------------------------------------------------------

  TABLE OF CONTENTS
Major categories of the Company's net investment income are summarized as
follows:

                                                                         Year Ended December 31,
                                                                         2022                 2021
                                                                             (in thousands)
Fixed maturity securities                                          $      48,647          $  42,968
Bank loan participations                                                  12,639             10,571
Equity securities                                                          5,680              4,883
Other invested assets:
   Renewable energy investments                                            4,408               (498)
   Other private investments                                              (1,000)             2,698
                                                                           3,408              2,200
Cash, cash equivalents, restricted cash equivalents, and
short-term investments                                                     4,853                260

Gross investment income                                                   75,227             60,882
Investment expense                                                        (4,116)            (4,017)
Net investment income                                              $      71,111          $  56,865

The following table summarizes our investment returns:

                                                Year Ended December 31,
                                                    2022               2021
Annualized gross investment yield on:
Average cash and invested assets                            3.1  %     2.4  %
Average fixed maturity securities                           3.1  %     2.7  %


Of our total cash and invested assets of $2,365.5 million at December 31, 2022
(excluding restricted cash equivalents), $173.2 million represents the cash and
cash equivalents portion of the portfolio. The majority of the portfolio, or
$1,783.4 million, is comprised of fixed maturity securities that are classified
as available-for-sale and carried at fair value with unrealized gains and losses
on these securities reported, net of applicable taxes, as a separate component
of accumulated comprehensive income or loss. The fair values of our fixed
maturity securities were negatively impacted in 2022 by a heightened
inflationary environment and rate actions of the Federal Reserve, which led to
higher interest rates and lower fair values of our fixed maturity securities.
Unrealized losses on fixed maturities recognized in other comprehensive (loss)
income resulted in a $193.0 million reduction in accumulated other comprehensive
(loss) income in the year ended December 31, 2022.

Also included in our investments are $155.0 million of bank loan participations,
$118.6 million of equity securities, $107.8 million of short-term investments,
and $27.4 million of other invested assets.

Bank loan participations generally provide a higher yield than our portfolio of
fixed maturity securities and are primarily senior, secured floating-rate debt
rated "BB", "B", or "CCC" by Standard & Poor's or an equivalent rating from
another nationally recognized statistical rating organization, and are therefore
below investment grade. Bank loans include assignments of and participations in
performing and non-performing senior corporate debt generally acquired through
primary bank syndications and in secondary markets. They consist of, but are not
limited to, term loans, the funded and unfunded portions of revolving credit
facilities, and similar loans and investments. Bank loan participations are
measured at fair value pursuant to the Company's election of the fair value
option, and changes in unrealized gains and losses in bank loan participations
are reported in our income statement as net realized and unrealized gains
(losses) on investments. At December 31, 2022 and 2021, the fair value of these
securities was $155.0 million and $156.0 million, respectively.

The Company invests selectively in private debt and equity opportunities. These
investments comprise the Company's other invested assets and are primarily
focused in renewable energy, limited partnerships, and bank holding companies.
Equity interests in various renewable energy LLCs generated investment income of
$3.8 million and losses of $1.4 million for the years ended December 31, 2022
and 2021, respectively. The LLCs are managed by an entity for which two of our
former directors serve as officers, and the Company's Non-Executive Chairman has
invested in certain of these LLCs. During the fourth quarter of 2022, the
underlying projects in two of our LLCs were sold at the manager's discretion. We
received proceeds of $20.2 million, and could receive additional contingent
payments in the future according to terms of the transaction. The remaining
investments had a carrying value of $9.2 million at December 31, 2022.
Investments in loans for renewable energy projects had investment income of
$607,000 and $939,000 for the years ended December 31, 2022 and 2021,
respectively. During 2022, the Company received principal repayments of
$2.5 million on the notes receivable. These investments had a

                                       87
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
carrying value of $2.7 million at December 31, 2022. Two of our former directors
are officers of the entities that issued the loans. The Company has invested in
several limited partnerships that invest in concentrated portfolios of publicly
traded small cap equities, loans of middle market private equity sponsored
companies, equity tranches of collateralized loan obligations (CLOs), and
tranches of distressed home loans. Investment losses from these partnerships
were $1.3 million in 2022 compared to income of $2.4 million in 2021. Together,
these limited partnerships had a carrying value of $11.1 million at December 31,
2022. Income from the Company's investments in renewable energy LLCs and limited
partnerships is recognized under the equity method of accounting. The Company
also holds $4.5 million of subordinated notes issued by a bank holding company.
Interest income from the notes was $343,000 in each of the years ended
December 31, 2022 and 2021. The Company's Non-Executive Chairman was previously
the Lead Independent Director of the bank holding company and an investor in the
bank holding company.

For the year ended December 31, 2022, the Company recognized net realized and
unrealized investment losses of $28.3 million, including $275,000 of net
realized investment gains on the sale of fixed maturity securities, $1.2 million
of net realized investment losses on the sale of bank loans securities, $254,000
of net realized investment losses on the sale of equity securities, $15.9
million of losses for the change in fair value of bank loans, and $11.2 million
of losses for the change in fair value of equity securities.

For the year ended December 31, 2021, the Company recognized net realized and
unrealized investment gains of $15.6 million, including $4.9 million of net
realized investment gains on the sale of fixed maturity securities, $833,000 of
net realized investment losses on the sale of bank loans, $543,000 of net
realized investment losses on the sale of equity securities, $6.7 million of
gains for the change in fair value of bank loans, and $5.4 million of gains for
the change in fair value of equity securities.

In conjunction with its outside investment managers, the Company performs
quarterly reviews of all securities within its investment portfolio to determine
whether any impairment has occurred.

Management concluded that none of the fixed maturity securities with an
unrealized loss at December 31, 2022 or 2021 experienced an other-than-temporary
impairment. Management does not intend to sell available-for-sale securities in
an unrealized loss position, and it is not "more likely than not" that the
Company will be required to sell these securities before a recovery in their
value to their amortized cost basis occurs.

At December 31, 2022, our available-for-sale fixed maturity securities had net
unrealized losses of $186.4 million representing 9.5% of the amortized cost of
the portfolio. Additionally, at December 31, 2022, 99.8% of our fixed maturity
security portfolio was rated "BBB-" or better ("investment grade") by Standard &
Poor's or had an equivalent rating from another nationally recognized
statistical rating organization. The average duration of our invested assets and
cash, excluding restricted cash, was 4.1 years at December 31, 2022.

The amortized cost and fair value of our available-for-sale fixed maturity
securities were as follows:

                                                               December 31, 2022                                                  December 31, 2021
                                             Cost or                                                            Cost or
                                            Amortized                                   % of Total             Amortized                                   % of Total
                                               Cost              Fair Value             Fair Value                Cost              Fair Value             Fair Value
                                                                                                 ($ in thousands)
Fixed maturity securities,
available-for-sale:
State and municipal                       $   386,456          $   330,852                     18.6  %       $   323,773          $   333,717                     19.9  %
Residential mortgage-backed                   437,702              401,249                     22.5  %           246,586              246,631                     14.7  %
Corporate                                     734,976              670,212                     37.6  %           711,930              732,335                     43.7  %
Commercial mortgage and asset-backed          335,066              309,015                     17.3  %           301,247              304,488           

18.2 %

U.S. Treasury securities and obligations
guaranteed by the U.S. government              75,583               72,089                      4.0  %            60,329               60,390                      3.5  %
Total fixed maturity securities,
available-for-sale                        $ 1,969,783          $ 1,783,417                    100.0  %       $ 1,643,865          $ 1,677,561                    100.0  %


                                       88

--------------------------------------------------------------------------------
  TABLE OF CONTENTS
The following table sets forth the composition of the Company's portfolio of
fixed maturity securities by rating as of December 31, 2022:

Standard & Poor's or Equivalent Designation         Fair Value       % of Total
                                                         ($ in thousands)
AAA                                                $   393,779           22.1  %
AA                                                     735,336           41.2  %
A                                                      488,893           27.4  %
BBB                                                    162,742            9.1  %

Below BBB and unrated                                    2,667            0.2  %
Total                                              $ 1,783,417          100.0  %


At December 31, 2022, our portfolio of available-for-sale fixed maturity
securities contained corporate fixed maturity securities with a fair value of
$670.2 million. A summary of these securities by industry segment is shown below
as of December 31, 2022:

Industry                     Fair Value      % of Total
                                  ($ in thousands)
Industrials and other       $  141,721           21.1  %
Consumer Discretionary          90,202           13.5  %
Financial                      222,777           33.2  %
Health Care                     50,771            7.6  %
Consumer Staples                57,034            8.5  %
Utilities                      107,707           16.1  %
Total                       $  670,212          100.0  %


Corporate available-for-sale fixed maturity securities include public traded
securities and privately placed bonds as shown below as of December 31, 2022:

Public/Private         Fair Value      % of Total
                            ($ in thousands)
Publicly traded       $  593,804           88.6  %
Privately placed          76,408           11.4  %
Total                 $  670,212          100.0  %

The amortized cost and fair value of our available-for-sale investments in fixed
maturity securities summarized by contractual maturity are as follows:

                                                     December 31, 2022
                                         Amortized                        % of Total
                                           Cost          Fair Value       Fair Value
                                                      ($ in thousands)
Due in:
One year or less                       $    53,202      $    52,229            2.9  %
After one year through five years          493,890          468,007           26.2  %
After five years through ten years         366,853          320,871           18.0  %
After ten years                            283,070          232,046           13.1  %
                                         1,197,015        1,073,153           60.2  %
Residential mortgage-backed                437,702          401,249           22.5  %
Commercial mortgage and asset-backed       335,066          309,015           17.3  %

Total                                  $ 1,969,783      $ 1,783,417          100.0  %


                                       89

--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Other Income and Expense

Other income and expense primarily consists of non-operating expenses of $6.0
million and $2.6 million for the years ended December 31, 2022 and 2021,
respectively. Non-operating expenses include legal fees related to a purported
class action lawsuit, legal and other professional fees related to the Company's
May 2021 common share offering, legal and other professional fees and other
expenses related to various strategic initiatives including loss portfolio
transfers accounted for as retroactive reinsurance, and employee severance
costs.

Interest Expense

Interest expense was $17.6 million and $8.9 million for the years ended
December 31, 2022 and 2021, respectively. Interest expense for the year ended
December 31, 2022 includes $3.7 million of crediting fees on the Funds Withheld
Account balance under the Casualty Re LPT. The impact of rising interest rates
on our variable rate senior and trust preferred debt also contributed to the
higher current year interest expense. See "-Liquidity and Capital
Resources-Sources and Uses of Funds" for information regarding our senior debt
facilities and trust preferred securities.

Amortization of Intangibles

The Company recorded $363,000 of amortization of intangibles in each of the
years ended December 31, 2022 and 2021.

Goodwill and Impairment

We test goodwill and other intangible assets in each operating segment for
impairment at least annually. The fair value of the reporting units is
determined by weighting the results of a discounted cash flow analysis and a
valuation derived from a market-based approach. Intangible assets are valued
using various methodologies. The projection of future cash flows is dependent
upon assumptions on the future levels of income as well as business trends,
prospects and market and economic conditions.

We perform this assessment to determine whether there has been any impairment in
the value of goodwill or intangible assets by comparing its fair value to the
net carrying value of the reporting units. If the carrying value exceeds its
estimated fair value, an impairment loss is recognized and the asset is written
down accordingly.

The Company completed its impairment tests and fair value analysis for goodwill
and other intangible assets during the fourth quarter of 2022 and 2021. No
impairment was present for the years ended December 31, 2022 or 2021.

Income Tax Expense

Our effective tax rate fluctuates from period to period based on the relative
mix of income reported by country and the respective tax rates imposed by each
tax jurisdiction. For the year ended December 31, 2022, our effective tax rate
was 37.3%. For the year ended December 31, 2021, we had an effective tax benefit
that was 11.9% of our pre-tax loss for the year. Bermuda had losses in both
years due to significant adverse development on U.S. commercial auto reserves
ceded from the U.S. to Bermuda under the internal quota share reinsurance in
2021 and because of the unprofitable underwriting results at JRG Re and the
non-deductible Bermuda holding company expenses in both 2021 and 2022. The
Company does not receive a U.S. tax deduction for losses in Bermuda. For
U.S.-sourced income, the Company's U.S. federal income tax expense differs from
the amounts computed by applying the federal statutory income tax rate to income
before taxes due primarily to interest income on tax-advantaged state and
municipal securities, dividends received income, and excess tax benefits and
expenses on share based compensation.

The Company has a deferred tax asset of $23.3 million at December 31, 2022
associated with unrealized losses in the Company's available-for-sale fixed
maturity securities portfolio. The unrealized losses are attributable to rising
market interest rates and other economic factors rather than credit-related
factors of the issuers. The Company does not intend to sell available-for-sale
debt securities in an unrealized loss position, and it is not "more likely than
not" that the Company will be required to sell these securities before a
recovery in their fair value to their amortized cost basis occurs. The Company's
hold to recovery assertion related to investments in an unrealized loss position
is considered a tax planning strategy. Both the cash generated by the Company
from operating activities and the unused capacity on the Company's unsecured
revolving credit facilities reduce the likelihood of having to sell debt
securities in an unrealized loss position. As a result, the Company has
concluded that no valuation allowance is required for the deferred tax asset
associated with unrealized losses on its investments at December 31, 2022.

Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

For a discussion of our results for the year ended December 31, 2021 as compared
to year ended December 31, 2020, please refer to our 2021 Form 10-K filed with
the SEC on March 1, 2022.

                                       90
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Liquidity and Capital Resources

Sources and Uses of Funds

Our sources of funds consist primarily of premiums written, investment income,
reinsurance recoveries, proceeds from sales and redemptions of investments,
borrowings on our credit facilities, and the issuance of common and Series A
Preferred Shares. We use operating cash flows primarily to pay operating
expenses, losses and loss adjustment expenses, reinsurance premiums, and income
taxes. Cash flow from operations may differ substantially from net income. The
potential for a large claim under an insurance or reinsurance contract means
that substantial and unpredictable payments may need to be made within
relatively short periods of time.

The following table summarizes our cash flows:

                                                                      Year Ended December 31,
                                                            2022               2021                2020
                                                                           (in thousands)
Cash and cash equivalents provided by (used in):
Operating activities (excluding restricted cash
equivalents)                                            $ 221,524          $ (155,631)         $   65,414
Investing activities                                     (328,154)             35,823            (175,991)
Financing activities                                       89,671             147,671              65,925
Change in cash and cash equivalents                       (16,959)             27,863             (44,652)
Change in restricted cash equivalents (operating
activities)                                                 1,210            (757,915)           (339,244)

Change in cash, cash equivalents, and restricted cash
equivalents

                                             $ (15,749)         

$ (730,052) $ (383,896)

Cash provided by operating activities excluding restricted cash equivalents of
$221.5 million for the year ended December 31, 2022 was driven by the growth in
our U.S. segments and the collection of premiums receivable at a quicker rate
than payments of loss and loss adjustment expenses. Cash used in operating
activities excluding restricted cash equivalents of $155.6 million for the year
ended December 31, 2021 primarily reflects the outflow of funds to effect the
Commercial Auto LPT in the third quarter of that year. For the year ended
December 31, 2020, cash provided by operations of $65.4 million was impacted by
the run-off of Rasier. There were no associated premiums collected in 2020 for
the Rasier policies terminated on December 31, 2019, but claim payments
associated with the run-off continued in 2020.

In 2022 and 2020, cash used in investing activities of $328.2 million and
$176.0 million reflects our efforts to enhance the yield in our investment
portfolio by investing available cash and cash equivalents into higher yielding
investments. Cash provided by investing activities of $35.8 million for the year
ended December 31, 2021 was primarily due to the investments sold and funds
withdrawn from our investment portfolio to effect the Commercial Auto LPT in the
third quarter of that year. Cash and cash equivalents (excluding restricted cash
equivalents) comprised 7.3%, 8.2%, and 6.9% of total cash and invested assets at
December 31, 2022, 2021, and 2020, respectively.

Cash provided by financing activities of $89.7 million for the year ended
December 31, 2022 includes $144.9 million of net proceeds (after expenses) from
the issuance and sale of 150,000 Series A Preferred Shares on March 1, 2022. The
proceeds were used for general corporate purposes and to repay $40.0 million of
loans outstanding on the 2017 Facility (as defined below) on March 28, 2022.
Financing activities for the year ended December 31, 2022 includes $6.1 million
of dividends paid on the Series A Preferred Shares. Cash provided by financing
activities also includes dividends paid to common shareholders of $7.8 million
in 2022, $43.2 million in 2021, and $37.1 million in 2020. On May 10, 2021, the
Company closed on a public offering of its common shares. The Company received
net proceeds (before expenses) of $192.1 million. The proceeds were used for
general corporate purposes. In 2020, net draws on our senior credit facilities
of $104.0 million were used to help support our growth.

As permitted under the agreements establishing the Indemnity Trust and the LPT
Trust, we have withdrawn collateral from the Indemnity Trust and the LPT Trust
to fund the Loss Fund Trust as required under the Administrative Services
Agreement. Amounts on deposit in the Loss Fund Trust are included in restricted
cash equivalents on the Company's consolidated balance sheet. See Amounts
Recoverable from an Indemnifying Party and Reinsurer on Legacy Commercial Auto
Book below.

Dividends

We are organized as a Bermuda holding company with our operations conducted by
our wholly-owned subsidiaries. Accordingly, our holding company may receive cash
through loans from banks, issuance of equity and debt securities, corporate
service fees or dividends received from our subsidiaries and/or other
transactions. Our U.S. holding company may receive cash in a similar manner and
also through payments from our subsidiaries pursuant to our U.S. consolidated
tax allocation agreement.

                                       91
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
The payment of dividends by our subsidiaries to us is limited by statute. In
general, the laws and regulations applicable to our domestic insurance
subsidiaries limit the aggregate amount of dividends or other distributions that
they may declare or pay within any 12-month period without advance regulatory
approval. Generally, the limitations are based on the greater of statutory net
income for the preceding year or 10.0% of statutory surplus at the end of the
preceding year. In addition, insurance regulators have broad powers to prevent
reduction of statutory surplus to inadequate levels and could refuse to permit
the payment of dividends calculated under any applicable formula. See Item 1-
"Regulation-U.S. Insurance Regulation-State Regulation" for additional
information. The maximum amount of dividends available to the U.S. holding
company from our U.S. insurance subsidiaries during 2023 without regulatory
approval is $53.7 million.

The Bermuda Insurance Act of 1978 prohibits an insurer from declaring or paying
a dividend if it is in breach of its minimum solvency margin, its enhanced
capital requirement, or its minimum liquidity ratio, or if the declaration or
payment of such dividend would cause such a breach. An insurer can declare or
pay dividends without prior regulatory approval up to 25% of the total statutory
capital and surplus (as shown on its previous financial year's statutory balance
sheet). See Item 1- "Regulation- Bermuda Insurance Regulation- Restrictions on
Dividends and Distributions" for additional information. Based on that
calculation, the maximum amount of dividends available to us from JRG Re without
regulatory approval in 2023 is calculated to be approximately $93.9 million.
However, any dividend payment is contingent upon continued compliance with
Bermuda regulatory requirements, including but not limited to the enhanced
solvency requirement calculations.

Holders of the Series A Preferred Shares are entitled to a dividend at the
initial rate of 7% of the Liquidation Preference per annum, paid in cash,
in-kind in common shares or in Series A Preferred Shares, at our election. On
the five-year anniversary of the Closing Date, and each five-year anniversary
thereafter, the dividend rate will reset to a rate equal to the five-year U.S.
treasury rate plus 5.2%. Dividends accrue and are payable quarterly. During
2022, cash dividends of $8.8 million were declared, of which $2.6 million was
payable at December 31, 2022.

At December 31, 2022, our Bermuda holding company had $277,000 of cash and cash
equivalent assets. Our U.S. holding company had $28.1 million of cash and
invested assets at December 31, 2022, comprised of cash and cash equivalents of
$15.5 million, short-term investments of $10.0 million and other invested assets
of $2.6 million, which are not subject to regulatory restrictions. Additionally,
our U.K. intermediate holding company had no invested assets and cash of less
than $10,000 at December 31, 2022.

Credit Agreements

The Company has a $315.0 million senior revolving credit facility (as amended or
amended and restated, the "2013 Facility"). The 2013 Facility is comprised of
the following at December 31, 2022:

•  A $102.5 million secured revolving facility utilized by JRG Re to issue
letters of credit for the benefit of third-party reinsureds. This portion of our
credit facility is secured by our investment securities. At December 31, 2022,
the Company had $44.5 million of letters of credit issued under the secured
facility.

•  A $212.5 million unsecured revolving facility to meet the working capital
needs of the Company. All unpaid principal on the revolver is due at maturity.
Interest accrues quarterly and is payable in arrears at 3-month LIBOR plus a
margin which at December 31, 2022 was 1.5% and is subject to change according to
terms in the credit agreement. At December 31, 2022 and 2021, the Company had a
drawn balance of $185.8 million outstanding on the unsecured revolver.

The 2013 Facility has been amended from time to time since its inception in
2013. On November 8, 2019, the Company entered into a Second Amended and
Restated Credit Agreement for the 2013 Facility which, among other things,
extended the maturity date of the 2013 Facility until November 8, 2024,
increased the amount available under the unsecured revolving credit facility to
$212.5 million, lowered the applicable interest rate and letter of credit fees,
and modified certain negative covenants to be less restrictive.

The 2013 Facility contains certain financial and other covenants (including
minimum net worth, maximum ratio of total adjusted debt outstanding to total
capitalization, and financial strength ratings) with which the Company was in
compliance at December 31, 2022.

On August 2, 2017, the Company, and its wholly-owned subsidiary, JRG Re,
together as borrowers, entered into a credit agreement (the "2017 Facility")
that provides the Company with a revolving line of credit of up to $100.0
million, which may be used for loans and letters of credit made or issued, at
the borrowers' option, on a secured or unsecured basis. Obligations under the
2017 Facility carry a variable rate of interest subject to terms in the credit
agreement (LIBOR plus a margin of 1.5% at December 31, 2022) and will mature 30
days after notice of termination from the lender. The 2017 Facility contains
certain financial and other covenants with which we are in compliance at
December 31, 2022. The loans and letters of credit made or issued under the
revolving line of credit of the 2017 Facility may be used to finance the
borrowers' general corporate purposes. The 2017 Facility has been amended from
time to time since its inception in 2017. On November 8, 2019, the Company
entered

                                       92
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
into a First Amendment to Credit Agreement which, among other things, lowered
the applicable interest rate and modified certain negative covenants to be less
restrictive. At December 31, 2022, unsecured loans of $21.5 million and secured
letters of credit totaling $22.9 million were outstanding on the 2017 Facility.
During the three months ended March 31, 2022, the Company repaid $40.0 million
of loans that were outstanding under the 2017 Facility.

On May 26, 2004, we issued $15.0 million of senior debt due April 29, 2034. The
senior debt is not redeemable by the holder or subject to sinking fund
requirements. Interest accrues quarterly and is payable in arrears at a floating
rate per annum equal to the 3-month LIBOR plus 3.85%. This senior debt is
redeemable at par prior to its stated maturity at our option in whole or in
part. The terms of the senior debt contain certain covenants, with which we are
in compliance at December 31, 2022, and which, among other things, restrict our
ability to assume senior indebtedness secured by our U.S. holding company's
common stock or its subsidiaries' capital stock or to issue shares of its
subsidiaries' capital stock.

From May 2004 through January 2008, we sold trust preferred securities through
five Delaware statutory trusts sponsored and wholly-owned by the Company or its
subsidiaries. Each trust used the net proceeds from the sale of its trust
preferred securities to purchase our floating-rate junior subordinated debt.

The following table summarizes the nature and terms of the junior subordinated
debt and trust preferred securities outstanding at December 31, 2022 (including
the Company's repurchase of a portion of these trust preferred securities):

                                                                                                                                                    Franklin
                                                                                                                                                  Holdings II
                                    James River                James River                 James River                James River                  

(Bermuda)

                                      Capital                    Capital                     Capital                    Capital                     Capital
                                      Trust I                    Trust II                   Trust III                   Trust IV                    Trust I
                                                                                         ($ in thousands)
Issue date                          May 26, 2004            December 15, 2004             June 15, 2006            December 11, 2007            January 10, 2008
Principal amount of trust
preferred securities                   $7,000                    $15,000                     $20,000                    $54,000                     $30,000
Principal amount of junior
subordinated debt                      $7,217                    $15,464                     $20,619                    $55,670                     $30,928
Carrying amount of junior
subordinated debt net of
repurchases                            $7,217                    $15,464                     $20,619                    $44,827                     $15,928
Maturity date of junior
subordinated debt, unless
accelerated earlier                 May 24, 2034            December 15, 2034             June 15, 2036            December 15, 2037             March 15, 2038
Trust common stock                      $217                       $464                       $619                       $1,670                       $928
Interest rate, per annum            Three-Month                Three-Month                 Three-Month                Three-Month                 Three-Month
                                     LIBOR plus                 LIBOR plus                 LIBOR plus                  LIBOR plus                  LIBOR plus
                                        4.0%                       3.4%                       3.0%                        3.1%                        4.0%

All of the junior subordinated debt is currently redeemable at 100.0% of the
unpaid principal amount at our option.

The junior subordinated debt contains certain covenants with which we are in
compliance as of December 31, 2022.

At December 31, 2022 and December 31, 2021, the Company's leverage ratio was
22.9% and 31.1%, respectively. The leverage ratio is defined in our senior
credit agreements as the ratio of adjusted consolidated debt to total capital.
Adjusted consolidated debt treats trust preferred securities as equity capital
up to 15% of total capital. Total capital is defined as total debt plus tangible
equity excluding accumulated other comprehensive income. The maximum leverage
ratio permitted by the agreements is 35.0%. Having debt as part of our capital
structure allows us to generate a higher return on equity and greater book value
per share results than we could by using equity capital alone.

Ceded Reinsurance

Our insurance segments enter into reinsurance contracts to limit our exposure to
potential losses arising from large risks, to protect against the aggregation of
several risks in a common loss occurrence, and to provide additional capacity
for growth. Our reinsurance is contracted under excess of loss and quota share
reinsurance contracts. In excess of loss reinsurance, the reinsurer agrees to
assume all or a portion of the ceding company's losses in excess of a specified
amount. The premiums payable to the reinsurer are negotiated by the parties
based on their assessment of the amount of risk being ceded to the reinsurer
because the reinsurer does not share proportionately in the ceding company's
losses. In quota share reinsurance, the reinsurer agrees to assume a specified
percentage of the ceding company's losses arising out of a defined class of
business in exchange for a corresponding percentage of premiums. For the years
ended December 31, 2022, 2021, and 2020 our net premium retention was 50.0%,
49.4% and 51.5%, respectively.

                                       93

--------------------------------------------------------------------------------

TABLE OF CONTENTS
The following is a summary of our Excess and Surplus Lines segment's ceded
reinsurance in place as of December 31, 2022:

Line of Business                          Company Retention

Casualty

Primary Specialty Casualty,               Up to $1.0 million per occurrence, subject to a $1.0 million
including Professional Liability          aggregate deductible.(1)
Primary Casualty                          Up to $2.0 million per occurrence.(2)
Excess Casualty                           Up to $2.0 million per occurrence.(3)
Property                                  Up to $5.0 million per event.(4)


(1)  Except for Life Sciences quota share carve out, which is up to $2.0 million
per occurrence.
(2)  Total exposure to any one claim is generally $1.0 million.
(3)  For policies with an occurrence limit up to $10.0 million, the excess
casualty treaty is set such that our retention is no more than $2.0 million.
(4)  The property catastrophe reinsurance treaty has a limit of $55.0 million
with one reinstatement.

We use catastrophe modeling software to analyze the risk of severe losses from
hurricanes and earthquakes on our exposure. We utilize the model in our risk
selection, pricing, and to manage our overall portfolio probable maximum loss
("PML") accumulations. A PML is an estimate of the amount we would expect to pay
in any one catastrophe event within a given annual probability of occurrence
(i.e. a return period or loss exceedance probability).

In our Excess and Surplus Lines segment, we write a small book of excess
property insurance, but we do not write primary property insurance. The Excess
and Surplus Lines segment has a surplus share reinsurance treaty in effect that
was specifically designed to cover property risks. The surplus share treaty
along with facultative reinsurance helps ensure that our net retained limit per
risk will be $5.0 million or less.

Based upon the modeling of our Excess and Surplus Lines and Specialty Admitted
segments, it would take an event at the 1 in 1000 year PML to exhaust our $60.0
million property catastrophe reinsurance. In the event of a catastrophe loss
exhausting our $60.0 million property catastrophe reinsurance, we estimate our
pre-tax cost would not exceed 2.5% of shareholders' equity, including
reinstatement premiums payable and net retentions. In addition to this
retention, we would retain any losses in excess of our reinsurance coverage
limits.

On September 27, 2021, James River entered into the Commercial Auto LPT with
Aleka to reinsure substantially all of the Excess and Surplus Lines segment's
legacy portfolio of commercial auto policies previously issued to Rasier. See
"Amounts Recoverable from an Indemnifying Party and Reinsurer on the Legacy
Commercial Auto Book" below for further information on this reinsurance
agreement.

                                       94
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
The following is a summary of our Specialty Admitted Insurance segment's ceded
reinsurance in place as of December 31, 2022:

        Line of Business                                           Coverage
Casualty
Workers' Compensation                   Quota share coverage for 65.5% of the first $1.0
                                        million.(1)(2)
                                        Excess of loss coverage for $29.0 million in excess of $1.0
                                        million.(1)(2)
Auto Programs                           Quota share coverage for 62.5-90% of limits up to $1.5 million
                                        liability and $7.5 million physical damage per occurrence.
General Liability & Professional        Quota share coverage for 62.5%-100% of limits up to $3.0
Liability - Programs                    million per occurrence.

Umbrella and Excess Casualty - Quota share coverage for at least 65% of limits up to $10.0
Programs

                                million per occurrence, and 75% of 

excess of loss coverage for

                                        $5.0 million in excess of $10.0 

million.

Property

Property within Package -               Quota share coverage for 100% of limits up to $40.0 million
Programs                                per occurrence.
Excess Property                         Quota share coverage for 100% of limits up to $16.9 million.
Catastrophe Coverage                    Excess of Loss coverage for $59.0 

million in excess of $1.0

                                        million per occurrence.
Aviation Programs                       Quota share coverage for 80% of 

limits up to $20 million

                                        liability and $2.5 million hull per 

occurrence, each aircraft;

                                        and excess of loss coverage for up 

to $8.7 million excess of

                                        $300,000 of our 20% share of the 

quota share each occurrence.

(1)  Excluding one program which has quota share coverage for 84% of the first
$1.0 million per occurrence and excess of loss coverage for $49.0 million in
excess of $1.0 million per occurrence.

(2) Includes any residual market pools.

Our Specialty Admitted Insurance segment purchases reinsurance for at least 50%
of the exposed limits on specialty admitted property-casualty business. The
segment enters into reinsurance contracts for the individual risk workers'
compensation business as well as fronting and program business. While the
segment focuses on casualty business, incidental property risk is incurred in
the fronting and program business. The segment is covered for $59.0 million in
excess of $1.0 million per occurrence to manage its property exposure to an
approximate 1 in 1,000 year PML.

In our Casualty Reinsurance segment, we also have limited property catastrophe
exposure on treaties in run-off, primarily through auto physical damage
coverage. In the aggregate, we believe our pre-tax group-wide PML from a 1 in
1,000 year property catastrophe event would not exceed 2.5% of shareholders'
equity, inclusive of reinstatement premiums payable.

On February 23, 2022, JRG Re entered into the Casualty Re LPT with FRL to
reinsure the majority of the segment risk, which closed on March 31, 2022. See
"Strategic Actions - Loss Portfolio Transfers - Casualty Re Loss Portfolio
Transfer" above for further information on this retrocession agreement.

We also had a contingency clash reinsurance treaty to cover both the Excess and
Surplus Lines and Specialty Admitted Insurance segments in the event of a claim
incident involving more than one of our insureds in addition to Extra
Contractual and Excess Policy Limits protection. The treaty covered $10.0
million in excess of a $2.0 million retention for loss occurrences within the
treaty term. This coverage was put into runoff effective July 1, 2022. As of
December 31, 2022, our average net retained limit per risk is $2.5 million.

Effective January 1, 2020, we purchased an additional $10.0 million in claims
made coverage for excess policy limits and extra contractual obligations
exposures above the clash and contingency treaty for the period 2014 to present.
This treaty had one reinstatement and expired on December 31, 2022.

The Company's insurance segments remain liable to policyholders if its
reinsurers are unable to meet their contractual obligations under applicable
reinsurance agreements. We establish an allowance for credit losses for our
current estimate of uncollectible reinsurance recoverables. At December 31,
2022, the allowance for credit losses on reinsurance recoverables was $612,000.
To minimize exposure to significant losses from reinsurance insolvencies, the
Company evaluates the financial condition of its reinsurers and monitors
concentrations of credit risk. The Company generally seeks to purchase
reinsurance from reinsurers with A.M. Best financial strength ratings of "A-"
(Excellent) or better. The Company's reinsurance contracts generally require
reinsurers that are not authorized as reinsurers under U.S. state insurance
regulations or that experience rating downgrades from rating agencies below
specified levels to fund their share of the Company's ceded outstanding losses
and loss adjustment expense reserves, typically through the use of irrevocable
and unconditional letters of credit. In fronting arrangements, which the Company
conducts through its Specialty Admitted Insurance segment, we are subject to
credit risk

                                       95
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
with regard to insurance companies who act as reinsurers for us in such
arrangements. We customarily require a collateral trust arrangement to secure
the obligations of the insurance entity for whom we are fronting.

At December 31, 2022, we had reinsurance recoverables on unpaid losses of
$1,520.1 million (net of a $612,000 allowance for credit losses) and reinsurance
recoverables on paid losses of $114.2 million, and all material recoverable
amounts were from companies with A.M. Best ratings of "A-" (Excellent) or
better, or are collateralized by the reinsurer for our benefit through letters
of credit or funds on deposit in trust accounts.

The following table sets forth our most significant reinsurers by amount of
reinsurance recoverables and the amount of reinsurance recoverables pertaining
to each such reinsurer as well as its A.M. Best rating as of December 31, 2022:

                                                                     Reinsurance
                                                                   Recoverable as
                                                                         of
                                                                    December 31,            A.M. Best Rating
Reinsurer                                                               2022               December 31, 2022
                                                                   (in thousands)
Swiss Reinsurance America Corporation                              $    340,393                    A+
Fortitude Re (Casualty Re LPT)                                          244,657                    A
Aleka Insurance Company (Commercial Auto LPT)                           132,049                Unrated(1)
Berkley Insurance Company                                               130,860                    A+
Hannover Ruck SE                                                         50,764                    A+
Safety National Casualty                                                 46,769                   A++
Endurance Assurance Corporation                                          45,300                    A+
American European Insurance Company                                      38,891                   B(2)
Munich Reinsurance America                                               33,699                    A+
Aioi Nissay Dowa Insurance Company                                       25,583                    A+
Top 10 Total                                                          1,088,965
Other                                                                   431,148
Total                                                              $  1,520,113

(1) This reinsurer is unrated. All material reinsurance amounts from this
reinsurer are collateralized.

(2) This reinsurer is below A-. All material reinsurance recoverable amounts
from this reinsurer are collateralized.

Amounts Recoverable from an Indemnifying Party and Reinsurer on Legacy
Commercial Auto Book

James River previously issued a set of commercial auto insurance contracts to
Rasier (the "Rasier Commercial Auto Policies") under which James River pays
losses and loss adjustment expenses on the contracts. James River has indemnity
agreements with Rasier (non-insurance entities) (collectively, the "Indemnity
Agreements") and is contractually entitled to reimbursement for the portion of
the losses and loss adjustment expenses paid on behalf of Rasier under the
Rasier Commercial Auto Policies and other expenses incurred by James River. On
September 27, 2021, James River entered into a loss portfolio transfer
reinsurance agreement (the "Commercial Auto LPT") with Aleka to reinsure
substantially all of the Rasier Commercial Auto Policies for which James River
is not otherwise indemnified by Rasier under the Indemnity Agreements. Under the
terms of the Commercial Auto LPT, effective as of July 1, 2021, James River
ceded to Aleka approximately $345.1 million of commercial auto liabilities
relating to Rasier Commercial Auto Policies written in the years 2013-2019,
which amount constituted the reinsurance premium. For the year ended
December 31, 2022, due to adverse paid loss trends on the legacy Rasier
business, the Company recognized adverse prior year development of $46.7 million
on the reserves subject to the Commercial Auto LPT, bringing the cumulative
amount ceded under the Commercial Auto LPT to $391.8 million at December 31,
2022.

Each of Rasier and Aleka are required to post collateral under the Indemnity
Agreements and the Commercial Auto LPT:

•Pursuant to the Indemnity Agreements, Rasier is required to post collateral
equal to 102% of James River's estimate of the amounts that are recoverable or
may be recoverable under the indemnity agreements, including, among other
things, case loss and loss adjustment expense reserves, IBNR loss and loss
adjustment expense reserves, extra contractual obligations and excess policy
limits liabilities. The collateral is provided through a collateral trust
arrangement (the "Indemnity Trust") in favor of James River by Aleka. In
connection with the execution of the Commercial Auto LPT, James River returned
$691.3 million to the Indemnity Trust, representing the remaining balance of the
amount withdrawn in October 2019, as was permitted under the indemnification
agreements with Rasier and the associated trust agreement. At December 31, 2022,
the balance in the Indemnity Trust was $267.0 million, and, together with the
balance of the Loss Fund Trust (as defined below) attributable to the

                                       96

--------------------------------------------------------------------------------

TABLE OF CONTENTS
Indemnity Agreements as described below, the total balance of collateral
securing Rasier's obligations under the Indemnity Agreements was $336.2 million.

•Pursuant to the Commercial Auto LPT, Aleka is required to post collateral equal
to 102% of James River's estimate of Aleka's obligations under the Commercial
Auto LPT, calculated in accordance with standard actuarial principles and based
on reserves recorded in our statutory financial statements. The collateral is
provided through a collateral trust arrangement (the "LPT Trust") established in
favor of James River by Aleka. At December 31, 2022, the balance in the LPT
Trust was $121.9 million, and, together with the balance of the Loss Fund Trust
(as defined below) attributable to the Commercial Auto LPT as described below,
the total balance of collateral securing Aleka's obligations under the
Commercial Auto LPT was $150.0 million. At December 31, 2022, the total
reinsurance recoverables under the Commercial Auto LPT was $145.2 million
(including $132.0 million of unpaid recoverables and $13.2 million of paid
recoverables).

In connection with the execution of the Commercial Auto LPT, James River and
Aleka entered into an administrative services agreement (the "Administrative
Services Agreement") with a third party claims administrator (the
"Administrator") pursuant to which the Administrator handles the claims on the
Rasier Commercial Auto Policies for the remaining life of those claims. The
claims paid by the Administrator are reimbursable by James River, and pursuant
to the Administrative Services Agreement, James River established a loss fund
trust account for the benefit of the Administrator (the "Loss Fund Trust") to
collateralize its claims payment reimbursement obligations. James River funds
the Loss Fund Trust using funds withdrawn from the Indemnity Trust, funds
withdrawn from the LPT Trust, and its own funds, in each case in an amount equal
to the pro rata portion of the required Loss Fund Trust balance attributable to
the Indemnity Agreements, the Commercial Auto LPT and James River's existing
third party reinsurance agreements, respectively. At December 31, 2022, the
balance in the Loss Fund Trust was $103.2 million, including $69.2 million
representing collateral supporting Rasier's obligations under the Indemnity
Agreements and $28.2 million representing collateral supporting Aleka's
obligations under the Commercial Auto LPT. Funds posted to the Loss Fund Trust
are classified as restricted cash equivalents on the Company's balance sheet.

While the Commercial Auto LPT brings economic finality to substantially all of
the Rasier Commercial Auto Policies, the Company has credit exposure to Rasier
and Aleka under the Indemnity Agreements and the Commercial Auto LPT if the
estimated losses and expenses of the Rasier Commercial Auto Policies grow at a
faster pace than the growth in our collateral balances. In addition, we have
credit exposure if our estimates of future losses and loss adjustment expenses
and other amounts recoverable under the Indemnity Agreements and the Commercial
Auto LPT, which are the basis for establishing the collateral balances, are
lower than actual amounts paid or payable. The amount of our credit exposure in
any of these instances could be material. To mitigate these risks, we closely
and frequently monitor our exposure compared to our collateral held, and we
request additional collateral in accordance with the terms of the Commercial
Auto LPT and Indemnity Agreements when our analysis indicates that we have
uncollateralized exposure.

Ratings

The A.M. Best financial strength rating for our group's regulated insurance and
reinsurance subsidiaries is "A-" (Excellent) with a stable outlook. This rating
reflects A.M. Best's opinion of our insurance and reinsurance subsidiaries'
financial strength, operating performance and ability to meet obligations to
policyholders and is not an evaluation directed towards the protection of
investors. The rating for our operating insurance and reinsurance companies of
"A-" (Excellent) is the fourth highest rating of the thirteen ratings issued by
A.M. Best and is assigned to insurers that have, in A.M. Best's opinion, an
excellent ability to meet their ongoing obligations to policyholders. On March
4, 2021, A.M. Best announced that it reduced the outlook on our regulated
insurance subsidiaries to negative from stable on the "A" (Excellent) financial
strength rating on such entities following our announcement of $86.0 million of
adverse development on reserves for losses and loss adjustment expenses in the
fourth quarter of 2020 principally related to our commercial auto business in
our Excess and Surplus Lines segment. On May 7, 2021, following the Company's
announcement of $168.7 million of further adverse development in the first
quarter of 2021 on reserves for losses and loss adjustment expenses in our
Excess and Surplus Lines segment, inclusive of $170.0 million of unfavorable
development in our commercial auto business, A.M. Best announced a downgrade of
our financial strength rating to "A-" (Excellent) and maintained a negative
outlook on our regulated insurance subsidiaries. The Company's outlook was
upgraded to stable by A.M. Best in the third quarter of 2021 following the
closing of the Commercial Auto LPT which reinsures substantially all of the
legacy commercial auto business.

The financial strength ratings assigned by A.M. Best have an impact on the
ability of our regulated subsidiaries to attract and retain agents and brokers
and on the risk profiles of the submissions for insurance that our subsidiaries
receive. We believe the "A-" (Excellent) ratings assigned to our insurance and
reinsurance subsidiaries allow our subsidiaries to actively pursue relationships
with the agents and brokers identified in their marketing plans.

                                       97

--------------------------------------------------------------------------------

TABLE OF CONTENTS

Series A Preferred Shares

The Company closed on the issuance and sale of 150,000 Series A Preferred Shares
on March 1, 2022 for an aggregate purchase price of $150.0 million, or $1,000
per share, in a private placement. The Series A Preferred Shares are convertible
into the Company's common shares at the option of the holder at any time, or at
the Company's option under certain circumstances. Dividends on the Series A
Preferred Shares accrue quarterly at the initial rate of 7% of the Liquidation
Preference per annum, which may be paid in cash, in-kind in common shares or in
Series A Preferred Shares, at the Company's election.

Equity

The Company issued 97,171 common shares in the twelve months ended December 31,
2022 related to vesting of restricted share units ("RSUs"), increasing the total
common shares outstanding from 37,373,066 at December 31, 2021 to 37,470,237 at
December 31, 2022.

Share Based Compensation Expense

For the years ended December 31, 2022, 2021, and 2020, the Company recognized
$8.1 million, $6.7 million and $7.6 million, respectively, of share based
compensation expense. As of December 31, 2022, the Company had $11.2 million of
unrecognized share based compensation expense expected to be charged to earnings
over a weighted-average period of 1.8 years.

Equity Incentive Plans

Options

The following table summarizes the option activity:

                                                                                      Year Ended December 31,
                                                    2022                                         2021                                       2020
                                                               Weighted-                                  Weighted-                                  Weighted-
                                                                Average                                    Average                                    Average
                                                               Exercise                                   Exercise                                   Exercise
                                         Shares                  Price                Shares                Price                Shares                Price
Outstanding:
Beginning of year                          287,974           $    35.26               463,324           $    32.25               643,851           $    30.41
Granted                                          -           $        -                     -           $        -                     -           $        -
Exercised                                        -           $        -              (126,798)          $    22.26              (180,527)          $    25.70
Forfeited                                        -           $        -               (48,552)          $    40.42                     -           $        -
End of year                                287,974           $    35.26               287,974           $    35.26               463,324           $    32.25
Exercisable, end of year                   287,974           $    35.26               287,974           $    35.26               463,324           $    32.25

All of the outstanding options vested over three years and have a contractual
life of seven years from the original date of grant.

RSUs

The following table summarizes the RSU activity:

                                                                              Year Ended December 31,
                                           2022                                          2021                                        2020
                                                      Weighted-                                   Weighted-                                   Weighted-
                                                       Average                                     Average                                     Average
                                                      Grant Date                                  Grant Date                                  Grant Date
                                Shares                Fair Value              Shares              Fair Value              Shares              Fair Value
Unvested, beginning of
year                              292,135           $     45.89               399,856           $     43.59               340,368           $     41.50
Granted                           560,680           $     20.61               161,971           $     47.82               272,608           $     45.11
Vested                           (147,530)          $     45.16              (194,157)          $     42.74              (165,344)          $     41.49
Forfeited                         (39,827)          $     25.41               (75,535)          $     45.98               (47,776)          $     44.57
Unvested, end of year             665,458           $     25.98               292,135           $     45.89               399,856           $     43.59


Outstanding RSUs granted to employees generally vest ratably over a three year
vesting period. RSUs granted to non-employee directors have a one year vesting
period.

                                       98
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Material Cash Requirements

We believe the cash generating capability of our operations, together with our
revolving credit facilities, and ability to raise capital through future equity
offerings, will be adequate to meet our short and long-term cash requirements
and provide the financial strength necessary to support our business growth.

The following table illustrates our material cash requirements by due date as of
December 31, 2022:

                                                                   Payments Due by Period
                                    Total                2023             2024-2025           2026-2027          Thereafter
                                                                       (in thousands)
Reserve for losses and loss
adjustment expenses             $ 2,768,995          $ 908,204          $ 1,280,366          $ 380,623          $  199,802
Long-term debt:
Senior debt                         222,300                  -              185,800                  -              36,500
Junior subordinated debt            104,055                  -                    -                  -             104,055
Operating lease obligations           9,613              3,935                5,181                497                   -
Interest on debt obligations        159,458             23,020               31,019             19,696              85,723
Total                           $ 3,264,421          $ 935,159          $ 1,502,366          $ 400,816          $  426,080


The reserve for losses and loss adjustment expenses represent management's
estimate of the ultimate cost of settling losses. As more fully discussed in
"-Critical Accounting Policies-Reserves for Losses and Loss Adjustment Expenses"
above, the estimation of losses is based on various complex and subjective
judgments. Actual losses paid may differ, perhaps significantly, from the
reserve estimates reflected in our consolidated financial statements. Similarly,
the timing of payment of our estimated losses is not fixed and there may be
significant changes in actual payment activity. The assumptions used in
estimating the likely payments due by period are based on our historical claims
payment experience and industry payment patterns, but due to the inherent
uncertainty in the process of estimating the timing of such payments, there is a
risk that the amounts paid in any such period can be significantly different
from the amounts disclosed above.

The amounts in the above table represent our gross estimates of known
liabilities as of December 31, 2022 and do not include any allowance for claims
for future events within the time period specified. Accordingly, it is highly
likely that the total amounts paid out in the time periods shown will be greater
than those indicated in the table.

Interest on debt obligations was calculated using the LIBOR rate as of
December 31, 2022 with the assumption that interest rates would remain flat over
the remainder of the period that the debt was outstanding.

The Company owns investments in limited partnerships that invest in concentrated
portfolios including publicly traded small cap equities, loans of middle market
private equity sponsored companies, private equity general partnership
interests, commercial mortgage-backed securities, and tranches of distressed
home loans. At December 31, 2022, the Company's Excess and Surplus Lines segment
has outstanding commitments to invest another $5.3 million in these limited
partnerships.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

                                       99
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Underwriting Performance Ratios

The following table provides the underwriting performance ratios of the Company
inclusive of the business subject to retroactive reinsurance accounting for loss
portfolio transfers. There is no economic impact to the Company over the life of
a loss portfolio transfer contract so long as any additional losses subject to
the contract are within the limit of the loss portfolio transfer and the
counterparty performs under the contract. Retroactive reinsurance accounting is
not indicative of our current and ongoing operations. Management believes that
providing loss ratios and combined ratios on business not subject to retroactive
reinsurance accounting for loss portfolio transfers gives the users of our
financial statements useful information in evaluating our current and ongoing
operations.

                                                                                Years Ended December 31,
                                                                  2022                    2021                    2020
Excess and Surplus Lines:
Loss Ratio                                                            65.9  %                106.2  %                 76.7  %
Impact of retroactive reinsurance                                      2.8  %                    -  %                    -  %
Loss Ratio including impact of retroactive reinsurance                68.7  %                106.2  %                 76.7  %

Combined Ratio                                                        85.1  %                125.0  %                 97.7  %
Impact of retroactive reinsurance                                      2.8  %                    -  %                    -  %
Combined Ratio including impact of retroactive reinsurance            87.9  %                125.0  %                 97.7  %

Casualty Reinsurance:
Loss Ratio                                                            73.2  %                164.0  %                 88.1  %
Impact of retroactive reinsurance                                      3.2  %                    -  %                    -  %
Loss Ratio including impact of retroactive reinsurance                76.4  %                164.0  %                 88.1  %

Combined Ratio                                                       104.7  %                187.6  %                113.7  %
Impact of retroactive reinsurance                                      3.2  %                    -  %                    -  %
Combined Ratio including impact of retroactive reinsurance           107.9  %                187.6  %                113.7  %

Consolidated:
Loss Ratio                                                            68.5  %                113.9  %                 78.9  %
Impact of retroactive reinsurance                                      2.6  %                    -  %                    -  %
Loss Ratio including impact of retroactive reinsurance                71.1  %                113.9  %                 78.9  %

Combined Ratio                                                        93.5  %                136.9  %                105.6  %
Impact of retroactive reinsurance                                      2.6  %                    -  %                    -  %
Combined Ratio including impact of retroactive reinsurance            96.1  %                136.9  %                105.6  %


                                      100
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Reconciliation of Non-GAAP Measures

See "Key Metrics" above for description of why management believes the following
Non-GAAP measures provide useful information about our financial condition and
results of operation.

Reconciliation of Underwriting Profit

We define underwriting profit as net earned premiums and gross fee income (in
specific instances when the Company is not retaining insurance risk) less losses
and loss adjustment expenses on business not subject to retroactive reinsurance
accounting for loss portfolio transfers and other operating expenses. Other
operating expenses include the underwriting, acquisition, and insurance expenses
of the operating segments and, for consolidated underwriting profit, the
expenses of the Corporate and Other segment. Our definition of underwriting
profit may not be comparable to that of other companies.

The following table reconciles the underwriting profit (loss) of the operating
segments by individual segment to consolidated income (loss) before income taxes
for the years ended December 31, 2022, 2021 and 2020.

                                                                    Year 

Ended December 31,

                                                          2022               2021                2020
                                                                        (in 

thousands)

Underwriting profit (loss) of the operating segments:
Excess and Surplus Lines

                              $  83,051          $ (121,478)         $   9,752
Specialty Admitted Insurance                              4,234               9,667              4,185
Casualty Reinsurance                                     (6,383)           (117,526)           (18,364)
Total underwriting profit (loss) of the operating
segments                                                 80,902            (229,337)            (4,427)

Other operating expenses of the Corporate and Other
segment

                                                 (31,260)            (27,609)           (29,418)
Underwriting profit (loss)(1)                            49,642            (256,946)           (33,845)
Losses and loss adjustment expenses - retroactive
reinsurance                                             (20,091)                  -                  -
Net investment income                                    71,111              56,865             73,368
Net realized and unrealized gains (losses) on
investments                                             (28,318)             15,564            (16,030)
Other income                                                981                 353              1,153
Other expenses                                           (5,997)             (2,585)            (2,138)
Interest expense                                        (17,578)             (8,922)           (10,033)
Amortization of intangible assets                          (363)               (363)              (538)
Income (loss) before income taxes                     $  49,387          $ 

(196,034) $ 11,937

(1) Underwriting profit (loss) includes gross fee income of $23.6 million,
$22.7 million, and $20.9 million for the years ended December 31, 2022, 2021,
and 2020, respectively.

Reconciliation of Adjusted Net Operating Income (Loss)

Adjusted net operating income is defined as income available to common
shareholders excluding a) the impact of loss portfolio transfers accounted for
as retroactive reinsurance, b) net realized and unrealized gains (losses) on
investments, c) certain non-operating expenses such as professional service fees
related to a purported class action lawsuit, various strategic initiatives, and
the filing of registration statements for the offering of securities, and d)
severance costs associated with terminated employees. Adjusted net operating
income should not be viewed as a substitute for net income calculated in
accordance with GAAP, and our definition of adjusted net operating income may
not be comparable to that of other companies.

                                      101
--------------------------------------------------------------------------------
  TABLE OF CONTENTS
Our income (loss) available to common shareholders for the years ended
December 31, 2022, 2021 and 2020 reconciles to our adjusted net operating income
(loss) as follows:

                                                                          Year Ended December 31,
                                              2022                                   2021                                  2020
                                  Income                                   Loss                                  Income
                                  Before                                  Before                Net              Before              Net
                                   Taxes            Net Income             Taxes               Loss               Taxes            Income
                                                                               (in thousands)
Income (loss) available to
common shareholders             $ 40,637          $    22,223          $ (196,034)         $ (172,799)         $ 11,937          $  4,824
Losses and loss adjustment
expenses - retroactive
reinsurance                       20,091               16,786                   -                   -                 -                 -
Net realized and unrealized
investment losses (gains)         28,318               25,014             (15,564)            (13,292)           16,030            14,840
Other expenses                     5,519                5,519               2,214               1,846             1,967             1,554
Adjusted net operating income
(loss)                          $ 94,565          $    69,542          $ (209,384)         $ (184,245)         $ 29,934          $ 21,218

Tangible Equity and Tangible Equity per Share

Tangible equity is defined as shareholders' equity plus mezzanine Series A
Preferred Shares and the unrecognized deferred retroactive reinsurance gain on
loss portfolio transfers less goodwill and intangible assets, net of
amortization. Tangible equity per share represents tangible equity divided by
the sum of total common shares outstanding plus the common shares resulting from
an assumed conversion of the outstanding Series A Preferred Shares into common
shares (at the current conversion price). Our definitions of tangible equity and
tangible equity per share may not be comparable to that of other companies, and
they should not be viewed as a substitute for shareholders' equity and
shareholders' equity per share calculated in accordance with GAAP.

The following table reconciles shareholders' equity to tangible equity as of
December 31, 2022, 2021 and 2020:

                                                                                   As of December 31,
                                                2022                                      2021                                      2020
                                                          Equity                                    Equity                                    Equity
                                     Equity              per share             Equity              per share             Equity              per share
                                                                        (in thousands, except per share amounts)
Shareholders' equity             $    553,766          $    14.78          $    725,362          $    19.41          $    795,608          $    25.96
Series A redeemable preferred
shares                                144,898                                         -                                         -
Deferred reinsurance gain              20,091                                         -                                         -
Less:
Goodwill                              181,831                                   181,831                                   181,831
Intangible assets, net                 35,676                                    36,039                                    36,402
Tangible equity                  $    501,248          $    11.63          $    507,492          $    13.58          $    577,375          $    18.84

Common shares outstanding          37,470,237                                37,373,066                                30,649,261
Common shares from assumed
conversion of Series A Preferred
Shares                              5,640,158                                         -                                         -
Common shares outstanding after
assumed conversion of Series A
Preferred Shares                   43,110,395                                37,373,066                                30,649,261


                                      102

--------------------------------------------------------------------------------

TABLE OF CONTENTS