James River under investigation by Bragar Eagel & Squire over Uber coverage
Shareholder rights law firm Bragar Eagel & Squire (BE&S) is investigating potential claims against James River Group Holdings to determine whether it misled investors about its insurance policies covering Uber ride-share drivers.
The investigation is examining the extent of the claims and losses incurred on policies provided to Uber through Rasier, a wholly owned subsidiary of Uber and a client of James River.
On October 8, 2019, James River said it had canceled all insurance policies issued to Rasier and its affiliates, placing the entire account in runoff. As a result, James River incurred a “[p]re-tax, adverse development” charge of up to $60 million in Q3 2019, causing its stock price to fall by around 23 percent.
On May 5, 2021, James River disclosed an additional $170 million “unfavorable development” charge as a result of a re-assessment of expected payouts on claims related to a “previously canceled account” that had been in runoff since 2019.
The next day James River priced its previously announced underwritten public stock offering at $31 per share, representing a 33 percent discount from its closing stock price on the previous day, BE&S said. James River's stock price then declined by over 26 percent to close at $34.23 on May 6, 2021, it added.
James River owns and operates a group of specialty insurance and reinsurance companies, specifically in excess and surplus insurance, specialty admitted insurance, and casualty reinsurance. It maintains a commercial auto insurance line within its excess and surplus segment.
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