James River shares closed down 22.6 percent on Wednesday, a day after the carrier released a third-quarter profit warning and revealed it would cancel its coverage for an Uber affiliate two months early.
The carrier's stock price ended the trading period on Wednesday at $37.88, down $11.06 on Tuesday's close, after failing to significantly pare early losses.
Uber is James River’s largest client, making up almost 45 percent of the insurer's excess and surplus lines premiums.
But the deal was causing James River to haemorrhage losses. The specialty carrier said late on Tuesday it has set aside $45mn to $55mn in reserve charges on its commercial auto book, relating to the 2016 and 2017 underwriting years.
An additional $10mn in third-quarter adverse development revealed by the company yesterday relates to casualty reinsurance losses.
In the statement, James River chairman and CEO J Adam Abram said: “This account has not met our expectations for profitability, and we think it best to terminate the underwriting relationship as of year end.”
The insurance agreement with Uber operating entity Raiser expires in February.
Uber drivers require a complex array of auto insurance covers. In the US, drivers must have their own personal auto policy for when they are not working, but in most states they switch to an Uber facility when they accept a fare on the app.
In New York, due to regulations around taxi and chauffeur driver licensing, drivers must purchase their own commercial auto coverage rather than using Uber’s system.
InsurTech business Inshur is working with Munich Re and fronting carrier Clear Blue to make it easier for drivers to buy cover online.