Employers Holdings, Inc. (the “Company”)
(NYSE:EIG), a holding company with subsidiaries that are
specialty providers of workers' compensation insurance and services
focused on small and select businesses engaged in low-to-medium
hazard industries, today reported financial results for its first
quarter ended March 31, 2024.
Financial Highlights:
(All comparisons vs. the first quarter of 2023).
-
Net income per diluted share increased 29%, from $0.86 to
$1.11;
-
Adjusted net income per diluted share increased 12%, from $0.60 to
$0.67;
-
Gross premiums written increased 8%, from $194.9 million to $210.9
million;
-
Net premiums earned increased 7%, from $172.7 million to $184.9
million;
-
Net investment income decreased $0.8 million, to $26.8 million,
while interest and financing expenses related to investing
activities decreased $2.3 million, to less than $0.1 million;
-
Record number of ending policies in-force of 127,484; and
- Returned $12.1 million to
stockholders through a combination of share repurchases and regular
quarterly dividends.
Management CommentaryChief
Executive Officer Katherine Antonello commented: “Higher new and
renewal premiums, strong and steady net investment income and
moderate net investment gains drove an 8% increase in revenue
year-over-year. We also ended the quarter with yet another record
number of policies in-force, which were up 4% year-over-year.
We recorded our current accident year loss and
LAE ratio on voluntary business at 64.0%, slightly above the 63.3%
we maintained throughout 2023 and consistent with that of 2022. As
was the case in the first quarter of 2023, we did not recognize any
prior year loss reserve development on our voluntary business
because a full actuarial study was not performed and the amount of
indicated net prior year loss reserve development was consistent
with our expectations. We will evaluate our prior year reserves in
more detail at mid-year when we routinely perform a full reserve
study.
Our commission expense ratio was 13.8%, up
slightly from 13.5% a year ago. The increase related to higher new
business writings, which are typically subject to higher initial
commission rates, and an increase in anticipated 2024 agency
incentives.
Our underwriting and general and administrative
expense ratio was 24.8%, a nice improvement from 25.7% a year ago.
The decrease was primarily due to savings associated with the
fourth quarter 2023 full integration of Cerity’s operations into
those of Employers, partially offset by increases in payroll and
benefit costs and bad debt expenses. In addition to the meaningful
decrease in our expense ratio experienced this quarter, I am highly
confident that we will continue to see further reductions for the
balance of the year.
Lastly, we raised our regular quarterly dividend
to $0.30 per share, an increase of 7%. This action reflects our
strong balance sheet, abundant underwriting capital and our
confidence in the Company’s future operations.”
Summary of First
Quarter 2024 Results
(All comparisons vs. the first quarter of 2023,
unless otherwise noted).
Net income was $28.3 million, an increase of
20%, and adjusted net income was $17.2 million, an increase of
4%.
Gross premiums written were $210.9 million, an
increase of 8%. The increase was primarily due to higher new and
renewal business writings. Net premiums earned were $184.9 million,
an increase of 7%.
Losses and loss adjustment expenses were $116.5
million, an increase of 8%. The Company’s loss and loss adjustment
expense ratio was 63.0% (64.1% excluding LPT), versus 62.2% (63.3%
excluding LPT).
Commission expenses were $25.5 million, an
increase of 9%. The Company’s commission expense ratio was 13.8%,
versus 13.5% a year ago.
Underwriting and general and administrative
expenses were $45.8 million, an increase of 3%. The Company’s
underwriting and general and administrative expense ratio was
24.8%, versus 25.7% a year ago.
Net investment income was $26.8 million, a
decrease of 3%. The decrease was due to a lower invested balance of
fixed maturity securities and short-term investments, as measured
by amortized cost, resulting primarily from the unwinding of our
former Federal Home Loan Bank (FHLB) leveraged investment strategy,
which was in effect from the first quarter of 2022 to the fourth
quarter of 2023.
Net realized and unrealized gains on investments
reflected on the income statement were $11.4 million, versus $6.4
million.
Interest and financing expenses were less than
$0.1 million, versus $2.3 million. The decrease resulted from the
unwinding of our former FHLB leveraged investment strategy.
Income tax expense was $7.0 million (19.8%
effective rate), versus $5.4 million (18.6% effective rate). The
effective rates during each of the periods included income tax
benefits and exclusions associated with tax-advantaged investment
income, LPT adjustments, and deferred gain amortization.
The Company’s book value per share including the
deferred gain of $44.04 increased 13.1% year-over-year and 1.0%
during the first quarter of 2024, computed after considering
dividends declared. During the first quarter this measure was
unfavorably impacted by $11.5 million of after-tax unrealized
losses arising from fixed maturity securities (which are reflected
on the balance sheet), partially offset by $9.7 million of net
after tax unrealized gains arising from equity securities and other
investments (which are reflected on the income statement). The
Company’s adjusted book value per share of $47.86 increased by
10.8% year-over-year and 1.9% during the first quarter of 2024,
computed after considering dividends declared. During the first
quarter this measure was favorably impacted by the net after tax
unrealized gains arising from equity securities and other
investments previously described.
Regular Quarterly Dividend Increase and
DeclarationOn April 24, 2024, the Company’s Board of
Directors declared a regular quarterly dividend of $0.30 per share,
an increase of 7% from the prior quarterly dividend of $0.28 per
share. The dividend is payable on May 22, 2024 to stockholders
of record as of May 8, 2024.
Share RepurchasesDuring the
first quarter of 2024, the Company repurchased 123,073 shares of
its common stock at an average price of $39.45 per share. The
Company currently has a remaining share repurchase authorization of
$16.2 million.
Earnings Conference Call and
WebcastThe Company will host a conference call on Friday,
April 26, 2024 at 11:00 a.m. Eastern Daylight Time / 8:00 a.m.
Pacific Daylight Time.
To participate in the live conference call, you
must first register here. Once registered you will receive dial-in
numbers and a unique PIN number.
The webcast will be accessible on
the Company’s website
at www.employers.com through the "Investors" link.
Reconciliation of Non-GAAP Financial
Measures to GAAPThe information in this press release
should be read in conjunction with the Financial Supplement that is
attached to this press release and available on our website.
Within this earnings release we present various
financial measures, some of which are “non-GAAP financial measures”
as defined in Regulation G pursuant to Section 401 of the Sarbanes
- Oxley Act of 2002. A description of these non-GAAP financial
measures, as well as a reconciliation of such non-GAAP measures to
our most directly comparable GAAP financial measures is included in
the attached Financial Supplement. Management believes that these
non-GAAP measures are important to the Company's investors,
analysts and other interested parties who benefit from having an
objective and consistent basis for comparison with other companies
within our industry. Management further believes that these
measures are more relevant than comparable GAAP measures in
evaluating our financial performance.
Forward-Looking StatementsIn
this press release, the Company and its management discuss and make
statements based on currently available information regarding their
intentions, beliefs, current expectations, and projections of,
among other things, the Company's future performance, economic or
market conditions, including current levels of inflation, changes
in interest rates, labor market expectations, catastrophic events
or geo-political conditions, legislative or regulatory actions or
court decisions, business growth, retention rates, loss costs,
claim trends and the impact of key business initiatives, future
technologies and planned investments. Certain of these statements
may constitute “forward-looking” statements as that term is defined
in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by the fact that they
do not relate strictly to historical or current facts and are often
identified by words such as “may,” “will,” “could,” “would,”
“should,” “expect,” “plan,” “anticipate,” “target,” “project,”
“intend,” “believe,” “estimate,” “predict,” “potential,” “pro
forma,” “seek,” “likely,” or “continue,” or other comparable
terminology and their negatives. The Company and its management
caution investors that such forward-looking statements are not
guarantees of future performance. Risks and uncertainties are
inherent in the Company’s future performance. Factors that could
cause the Company's actual results to differ materially from those
indicated by such forward-looking statements include, among other
things, those discussed or identified from time to time in the
Company’s public filings with the Securities and Exchange
Commission (SEC), including the risks detailed in the Company's
Quarterly Reports on Form 10-Q and the Company's Annual Reports on
Form 10-K. Except as required by applicable securities laws, the
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
Filings with the SECThe
Company’s filings with the SEC and its quarterly investor
presentations can be accessed through the “Investors” link on the
Company's website, www.employers.com. The Company's filings with
the SEC can also be accessed through the SEC's EDGAR Database at
www.sec.gov (EDGAR CIK No. 0001379041).
About Employers Holdings,
Inc.EMPLOYERS® and America’s small business insurance
specialist® are registered trademarks of EIG Services, Inc.
Employers Holdings, Inc. is a holding company with subsidiaries
that are specialty providers of workers' compensation insurance and
services focused on small and select businesses engaged in
low-to-medium hazard industries. The Company operates throughout
the United States, with the exception of four states that are
served exclusively by their state funds. Insurance is offered
through Employers Insurance Company of Nevada, Employers
Compensation Insurance Company, Employers Preferred Insurance
Company, Employers Assurance Company and Cerity Insurance Company,
all rated A- (Excellent) by the A.M. Best Company. Not all
companies do business in all jurisdictions. See
www.employers.com and www.cerity.com for coverage
availability.
Contact InformationMike Paquette (775) 327-2562
or mpaquette@employers.com
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EMPLOYERS HOLDINGS, INC.Table of
Contents |
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Page |
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1 |
Consolidated Financial
Highlights |
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2 |
Summary Consolidated Balance
Sheets |
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|
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3 |
Summary Consolidated Income
Statements |
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4 |
Return on Equity |
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|
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5 |
Combined Ratios |
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|
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|
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6 |
Roll-forward of Unpaid Losses
and LAE |
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7 |
Consolidated Investment
Portfolio |
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8 |
Book Value Per Share |
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9 |
Earnings Per Share |
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10 |
Non-GAAP Financial
Measures |
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EMPLOYERS HOLDINGS, INC.Consolidated
Financial Highlights (unaudited)$ in millions,
except per share amounts |
|
|
Three Months Ended |
|
March 31, |
|
2024 |
|
2023 |
|
% change |
Selected financial
highlights: |
|
|
|
|
|
Gross premiums written |
$ |
210.9 |
|
|
$ |
194.9 |
|
|
8 |
% |
Net premiums written |
|
209.1 |
|
|
|
193.1 |
|
|
8 |
|
Net premiums earned |
|
184.9 |
|
|
|
172.7 |
|
|
7 |
|
Net investment income |
|
26.8 |
|
|
|
27.6 |
|
|
(3 |
) |
Net income excluding
LPT(1) |
|
26.2 |
|
|
|
21.6 |
|
|
21 |
|
Adjusted net income(1) |
|
17.2 |
|
|
|
16.5 |
|
|
4 |
|
Net Income before income
taxes |
|
35.3 |
|
|
|
29.0 |
|
|
22 |
|
Net Income |
|
28.3 |
|
|
|
23.6 |
|
|
20 |
|
Comprehensive income |
|
17.4 |
|
|
|
47.4 |
|
|
(63 |
) |
Total assets |
|
3,562.8 |
|
|
|
3,744.0 |
|
|
(5 |
) |
Stockholders' equity |
|
1,018.9 |
|
|
|
974.1 |
|
|
5 |
|
Stockholders' equity including
the Deferred Gain(2) |
|
1,116.1 |
|
|
|
1,078.2 |
|
|
4 |
|
Adjusted stockholders'
equity(2) |
|
1,213.0 |
|
|
|
1,193.3 |
|
|
2 |
|
Annualized adjusted return on
stockholders' equity(3) |
|
5.7 |
% |
|
|
5.5 |
% |
|
4 |
% |
Amounts per
share: |
|
|
|
|
|
Cash dividends declared per
share |
$ |
0.28 |
|
|
$ |
0.26 |
|
|
8 |
% |
Earnings per diluted
share(4) |
|
1.11 |
|
|
|
0.86 |
|
|
29 |
|
Earnings per diluted share
excluding LPT(4) |
|
1.03 |
|
|
|
0.79 |
|
|
30 |
|
Adjusted earnings per diluted
share(4) |
|
0.67 |
|
|
|
0.60 |
|
|
12 |
|
Book value per share(2) |
|
40.20 |
|
|
|
36.08 |
|
|
11 |
|
Book value per share including
the Deferred Gain(2) |
|
44.04 |
|
|
|
39.93 |
|
|
10 |
|
Adjusted book value per
share(2) |
|
47.86 |
|
|
|
44.19 |
|
|
8 |
|
Combined ratio
excluding LPT:(5): |
|
|
|
|
|
Loss and loss adjustment
expense ratio: |
|
|
|
|
|
Current Year |
|
64.2 |
% |
|
|
63.5 |
% |
|
|
Prior Year |
(0.1 |
)% |
|
|
(0.2 |
) |
|
|
Loss and loss adjustment
expense ratio |
|
64.1 |
% |
|
|
63.3 |
% |
|
|
Commission expense ratio |
|
13.8 |
% |
|
|
13.5 |
% |
|
|
Underwriting and general and
administrative expense ratio |
|
24.8 |
% |
|
|
25.7 |
% |
|
|
Combined ratio excluding
LPT |
|
102.7 |
% |
|
|
102.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) See Page 3
for calculations and Page 10 for information regarding our use of
Non-GAAP Financial Measures. |
(2) See Page 8
for calculations and Page 10 for information regarding our use of
Non-GAAP Financial Measures. |
(3) See Page 4
for calculations and Page 10 for information regarding our use of
Non-GAAP Financial Measures. |
(4) See Page 9
for description and calculations and Page 10 for information
regarding our use of Non-GAAP Financial Measures. |
(5) See Pages 5
for details and Page 10 for information regarding our use of
Non-GAAP Financial Measures. |
|
EMPLOYERS HOLDINGS, INC.Summary
Consolidated Balance Sheets (unaudited)$ in
millions, except per share amounts |
|
|
March 31,2024 |
|
December 31,2023 |
ASSETS |
|
|
|
Investments, cash and cash equivalents |
$ |
2,494.3 |
|
|
$ |
2,504.7 |
|
Accrued investment income |
|
16.5 |
|
|
|
16.3 |
|
Premiums receivable, net |
|
380.4 |
|
|
|
359.4 |
|
Reinsurance recoverable, net
of allowance, on paid and unpaid losses and LAE |
|
429.8 |
|
|
|
433.8 |
|
Deferred policy acquisition
costs |
|
59.4 |
|
|
|
55.6 |
|
Deferred income tax asset,
net |
|
42.1 |
|
|
|
43.4 |
|
Contingent commission
receivable—LPT Agreement |
|
14.4 |
|
|
|
14.2 |
|
Other assets |
|
125.9 |
|
|
|
123.0 |
|
Total assets |
$ |
3,562.8 |
|
|
$ |
3,550.4 |
|
|
|
|
|
LIABILITIES |
|
|
|
Unpaid losses and LAE |
$ |
1,874.5 |
|
|
$ |
1,884.5 |
|
Unearned premiums |
|
402.3 |
|
|
|
379.7 |
|
Commissions and premium taxes
payable |
|
60.9 |
|
|
|
66.0 |
|
Deferred Gain |
|
97.2 |
|
|
|
99.2 |
|
Other liabilities |
|
109.0 |
|
|
|
107.1 |
|
Total liabilities |
$ |
2,543.9 |
|
|
$ |
2,536.5 |
|
|
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
|
Common stock and additional
paid-in capital |
$ |
420.1 |
|
|
$ |
420.4 |
|
Retained earnings |
|
1,405.4 |
|
|
|
1,384.3 |
|
Accumulated other
comprehensive loss |
|
(96.9 |
) |
|
|
(86.0 |
) |
Treasury stock, at cost |
|
(709.7 |
) |
|
|
(704.8 |
) |
Total stockholders’
equity |
|
1,018.9 |
|
|
|
1,013.9 |
|
Total liabilities and
stockholders’ equity |
$ |
3,562.8 |
|
|
$ |
3,550.4 |
|
|
|
|
|
Stockholders' equity including the Deferred Gain (1) |
$ |
1,116.1 |
|
|
$ |
1,113.1 |
|
Adjusted stockholders' equity
(1) |
|
1,213.0 |
|
|
|
1,199.1 |
|
Book value per share (1) |
$ |
40.20 |
|
|
$ |
39.96 |
|
Book value per share including
the Deferred Gain(1) |
|
44.04 |
|
|
|
43.88 |
|
Adjusted book value per share (1) |
|
47.86 |
|
|
|
47.26 |
|
|
|
|
|
(1) See Page 8 for
calculations and Page 10 for information regarding our use of
Non-GAAP Financial Measures. |
|
EMPLOYERS HOLDINGS, INC.Summary
Consolidated Income Statements (unaudited) |
$ in millions |
|
Three Months Ended |
|
March 31, |
|
2024 |
|
2023 |
Revenues: |
|
Net premiums earned |
$ |
184.9 |
|
|
$ |
172.7 |
|
Net investment income |
|
26.8 |
|
|
|
27.6 |
|
Net realized and unrealized
gains on investments(1) |
|
11.4 |
|
|
|
6.4 |
|
Other income (loss) |
|
— |
|
|
|
(0.2 |
) |
Total revenues |
|
223.1 |
|
|
|
206.5 |
|
Expenses: |
|
|
|
Losses and LAE incurred |
|
(116.5 |
) |
|
|
(107.4 |
) |
Commission expense |
|
(25.5 |
) |
|
|
(23.4 |
) |
Underwriting and general and
administrative expenses |
|
(45.8 |
) |
|
|
(44.4 |
) |
Interest and financing
expenses |
|
— |
|
|
|
(2.3 |
) |
Total expenses |
|
(187.8 |
) |
|
|
(177.5 |
) |
Net income before income
taxes |
|
35.3 |
|
|
|
29.0 |
|
Income tax expense |
|
(7.0 |
) |
|
|
(5.4 |
) |
Net
Income |
|
28.3 |
|
|
|
23.6 |
|
Unrealized AFS investment
(losses) gains arising during the period, net of tax(2) |
|
(11.6 |
) |
|
|
22.5 |
|
Reclassification adjustment
for net realized AFS investment losses in net income, net of
tax(2) |
|
0.7 |
|
|
|
1.3 |
|
Total comprehensive income |
$ |
17.4 |
|
|
$ |
47.4 |
|
Net Income |
$ |
28.3 |
|
|
$ |
23.6 |
|
Amortization of the Deferred
Gain - losses |
|
(1.5 |
) |
|
|
(1.6 |
) |
Amortization of the Deferred
Gain - contingent commission |
|
(0.4 |
) |
|
|
(0.4 |
) |
LPT contingent commission
adjustments |
|
(0.2 |
) |
|
|
— |
|
Net income excluding
LPT Agreement (3) |
|
26.2 |
|
|
|
21.6 |
|
Net realized and unrealized
gains on investments |
|
(11.4 |
) |
|
|
(6.4 |
) |
Income tax expense related to
items excluded from Net income or loss |
|
2.4 |
|
|
|
1.3 |
|
Adjusted net income |
$ |
17.2 |
|
|
$ |
16.5 |
|
|
|
|
|
(1) Includes net
realized and unrealized gains on equity securities and other
investments of $12.3 million and $8.0 million for the three months
ended March 31, 2024 and 2023. |
(2) AFS =
Available for Sale securities. |
(3) See Page 10
regarding our use of Non-GAAP Financial Measures. |
|
EMPLOYERS HOLDINGS, INC.Return on Equity
(unaudited)$ in millions |
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2024 |
|
2023 |
|
|
|
|
|
Net income |
A |
$ |
28.3 |
|
|
$ |
23.6 |
|
Impact of the LPT
Agreement |
|
|
(2.1 |
) |
|
|
(2.0 |
) |
Net realized and unrealized
gains on investments |
|
|
(11.4 |
) |
|
|
(6.4 |
) |
Income tax expense related to
items excluded from Net income |
|
|
2.4 |
|
|
|
1.3 |
|
Adjusted net income (1) |
B |
|
17.2 |
|
|
|
16.5 |
|
|
|
|
|
|
Stockholders' equity - end of
period |
|
$ |
1,018.9 |
|
|
$ |
974.1 |
|
Stockholders' equity -
beginning of period |
|
|
1,013.9 |
|
|
|
944.2 |
|
Average stockholders' equity |
C |
|
1,016.4 |
|
|
|
959.2 |
|
|
|
|
|
|
Stockholders' equity - end of
period |
|
$ |
1,018.9 |
|
|
$ |
974.1 |
|
Deferred Gain - end of
period |
|
|
97.2 |
|
|
|
104.1 |
|
Accumulated other
comprehensive loss - end of period |
|
|
122.6 |
|
|
|
145.7 |
|
Income taxes related to
accumulated other comprehensive loss - end of period |
|
|
(25.7 |
) |
|
|
(30.6 |
) |
Adjusted stockholders' equity
- end of period |
|
|
1,213.0 |
|
|
|
1,193.3 |
|
Adjusted stockholders' equity
- beginning of period |
|
|
1,199.1 |
|
|
|
1,189.2 |
|
Average adjusted stockholders' equity
(1) |
D |
|
1,206.1 |
|
|
|
1,191.3 |
|
|
|
|
|
|
Return on stockholders'
equity |
A / C |
|
2.8 |
% |
|
|
2.5 |
% |
Annualized return on
stockholders' equity |
|
|
11.1 |
|
|
|
9.8 |
|
|
|
|
|
|
Adjusted return on
stockholders' equity (1) |
B / D |
|
1.4 |
% |
|
|
1.4 |
% |
Annualized adjusted return on stockholders' equity
(1) |
|
|
5.7 |
|
|
|
5.5 |
|
|
|
|
|
|
(1) See Page 10
for information regarding our use of Non-GAAP Financial
Measures. |
|
EMPLOYERS HOLDINGS, INC.Combined Ratios
(unaudited)$ in millions, except per share
amounts |
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2024 |
|
2023 |
|
|
|
|
|
Net premiums earned |
A |
$ |
184.9 |
|
|
$ |
172.7 |
|
Losses and LAE incurred |
B |
|
116.5 |
|
|
|
107.4 |
|
Amortization of deferred
reinsurance gain - losses |
|
|
1.5 |
|
|
|
1.6 |
|
Amortization of deferred
reinsurance gain - contingent commission |
|
|
0.4 |
|
|
|
0.4 |
|
LPT contingent commission
adjustments |
|
|
0.2 |
|
|
|
— |
|
Losses and LAE excluding
LPT(1) |
C |
$ |
118.6 |
|
|
$ |
109.4 |
|
Prior year loss reserve
development |
|
|
(0.1 |
) |
|
|
(0.2 |
) |
Losses and LAE excluding LPT -
current accident year |
D |
$ |
118.7 |
|
|
$ |
109.6 |
|
Commission expense |
E |
$ |
25.5 |
|
|
$ |
23.4 |
|
Underwriting and general and administrative expense |
F |
$ |
45.8 |
|
|
$ |
44.4 |
|
GAAP combined ratio: |
|
|
|
|
Loss and LAE ratio |
B/A |
|
63.0 |
% |
|
|
62.2 |
% |
Commission expense ratio |
E/A |
|
13.8 |
|
|
|
13.5 |
|
Underwriting and general and
administrative expense ratio |
F/A |
|
24.8 |
|
|
|
25.7 |
|
GAAP
combined ratio |
|
|
101.6 |
% |
|
|
101.4 |
% |
Combined ratio excluding
LPT:(1) |
|
|
|
|
Loss and LAE ratio excluding
LPT |
C/A |
|
64.1 |
% |
|
|
63.3 |
% |
Commission expense ratio |
E/A |
|
13.8 |
|
|
|
13.5 |
|
Underwriting and general and
administrative expense ratio |
F/A |
|
24.8 |
|
|
|
25.7 |
|
Combined ratio excluding LPT |
|
|
102.7 |
% |
|
|
102.5 |
% |
Combined ratio excluding LPT: current accident
year:(1) |
|
|
|
|
Loss and LAE ratio excluding
LPT |
D/A |
|
64.2 |
% |
|
|
63.5 |
% |
Commission expense ratio |
E/A |
|
13.8 |
|
|
|
13.5 |
|
Underwriting and general and
administrative expenses ratio |
F/A |
|
24.8 |
|
|
|
25.7 |
|
Combined ratio excluding LPT: current accident year |
|
|
102.8 |
% |
|
|
102.7 |
% |
|
|
|
|
|
(1) See Page 10
for information regarding our use of Non-GAAP Financial
Measures. |
|
EMPLOYERS HOLDINGS, INC.Roll-forward of
Unpaid Losses and LAE (unaudited)$ in
millions |
|
|
Three Months Ended |
|
March 31, |
|
2024 |
|
2023 |
|
|
|
|
Unpaid losses and LAE at beginning of period |
$ |
1,884.5 |
|
|
$ |
1,960.7 |
|
Reinsurance recoverable,
excluding CECL allowance, on unpaid losses and LAE |
|
428.4 |
|
|
|
445.4 |
|
Net unpaid losses and LAE at
beginning of period |
|
1,456.1 |
|
|
|
1,515.3 |
|
Losses and LAE incurred: |
|
|
|
Current year losses |
|
118.7 |
|
|
|
109.6 |
|
Prior year losses on involuntary business |
|
(0.1 |
) |
|
|
(0.2 |
) |
Total losses incurred |
|
118.6 |
|
|
|
109.4 |
|
Losses and LAE paid: |
|
|
|
Current year losses |
|
6.8 |
|
|
|
5.6 |
|
Prior year losses |
|
117.4 |
|
|
|
105.7 |
|
Total paid losses |
|
124.2 |
|
|
|
111.3 |
|
Net unpaid losses and LAE at
end of period |
|
1,450.5 |
|
|
|
1,513.4 |
|
Reinsurance recoverable,
excluding CECL allowance, on unpaid losses and LAE |
|
424.0 |
|
|
|
440.3 |
|
Unpaid losses and LAE at end
of period |
$ |
1,874.5 |
|
|
$ |
1,953.7 |
|
|
|
|
|
|
|
|
|
Total losses and LAE shown in the above table
exclude amortization of the Deferred Gain and LPT Contingent
Commission Adjustments, which totaled $2.1 million and $2.0 million
for the three months ended March 31, 2024 and 2023.
|
EMPLOYERS HOLDINGS, INC.Consolidated
Investment Portfolio (unaudited)$ in
millions |
|
|
March 31, 2024 |
|
December 31, 2023 |
Investment
Positions: |
Cost or AmortizedCost
(1) |
|
Net Unrealized Gain (Loss) |
|
Fair Value |
% |
|
Fair Value |
% |
Fixed maturity securities |
$ |
2,139.7 |
|
$ |
(122.7 |
) |
|
$ |
2,013.8 |
81 |
% |
|
$ |
1,936.3 |
77 |
% |
Equity securities |
|
131.9 |
|
|
98.4 |
|
|
|
230.3 |
9 |
|
|
|
217.2 |
9 |
|
Short-term investments |
|
38.2 |
|
|
— |
|
|
|
38.2 |
2 |
|
|
|
33.1 |
1 |
|
Other invested assets |
|
88.9 |
|
|
8.7 |
|
|
|
97.6 |
4 |
|
|
|
91.5 |
4 |
|
Cash and cash equivalents |
|
114.2 |
|
|
— |
|
|
|
114.2 |
5 |
|
|
|
226.4 |
9 |
|
Restricted cash and cash
equivalents |
|
0.2 |
|
|
— |
|
|
|
0.2 |
— |
|
|
|
0.2 |
— |
|
Total investments and cash |
$ |
2,513.1 |
|
$ |
(15.6 |
) |
|
$ |
2,494.3 |
100 |
% |
|
$ |
2,504.7 |
100 |
% |
|
|
|
|
|
|
|
|
|
|
Breakout of Fixed
Maturity Securities: |
|
|
|
|
|
|
|
|
|
U.S. Treasuries and
agencies |
$ |
67.8 |
|
$ |
(2.7 |
) |
|
$ |
65.1 |
3 |
% |
|
$ |
60.5 |
3 |
% |
States and municipalities |
|
202.8 |
|
|
(3.0 |
) |
|
|
199.8 |
10 |
|
|
|
210.2 |
11 |
|
Corporate securities |
|
1,003.5 |
|
|
(61.8 |
) |
|
|
939.5 |
47 |
|
|
|
895.8 |
46 |
|
Mortgage-backed
securities |
|
482.7 |
|
|
(49.2 |
) |
|
|
433.2 |
22 |
|
|
|
426.0 |
22 |
|
Asset-backed securities |
|
180.3 |
|
|
(3.6 |
) |
|
|
176.7 |
9 |
|
|
|
128.0 |
7 |
|
Collateralized loan
obligations |
|
73.0 |
|
|
(0.2 |
) |
|
|
72.8 |
4 |
|
|
|
91.5 |
5 |
|
Bank loans and other |
|
129.6 |
|
|
(2.2 |
) |
|
|
126.7 |
6 |
|
|
|
124.3 |
6 |
|
Total fixed maturity securities |
$ |
2,139.7 |
|
$ |
(122.7 |
) |
|
$ |
2,013.8 |
100 |
% |
|
$ |
1,936.3 |
100 |
% |
Weighted average book yield |
4.3% |
|
4.3% |
Average credit quality (S&P) |
A+ |
|
A |
Duration |
4.5 |
|
4.5 |
(1)
Amortized cost excludes allowance for current expected credit
losses of $3.2 million. |
|
|
|
|
EMPLOYERS HOLDINGS, INC.Book Value Per
Share (unaudited)$ in millions, except per share
amounts |
|
|
|
March 31,2024 |
|
December 31,2023 |
|
March 31,2023 |
|
December 31,2022 |
Numerators: |
|
|
|
|
|
|
|
|
Stockholders' equity |
A |
$ |
1,018.9 |
|
|
$ |
1,013.9 |
|
|
$ |
974.1 |
|
|
$ |
944.2 |
|
Plus: Deferred Gain |
|
|
97.2 |
|
|
|
99.2 |
|
|
|
104.1 |
|
|
|
106.1 |
|
Stockholders' equity
including the Deferred Gain (1) |
B |
|
1,116.1 |
|
|
|
1,113.1 |
|
|
|
1,078.2 |
|
|
|
1,050.3 |
|
Accumulated other comprehensive loss |
|
|
122.6 |
|
|
|
108.9 |
|
|
|
145.7 |
|
|
|
175.8 |
|
Income taxes related to accumulated other comprehensive loss |
|
|
(25.7 |
) |
|
|
(22.9 |
) |
|
|
(30.6 |
) |
|
|
(36.9 |
) |
Adjusted stockholders'
equity (1) |
C |
$ |
1,213.0 |
|
|
$ |
1,199.1 |
|
|
$ |
1,193.3 |
|
|
$ |
1,189.2 |
|
|
|
|
|
|
|
|
|
|
Denominator (shares
outstanding) |
D |
|
25,343,504 |
|
|
|
25,369,753 |
|
|
|
27,001,967 |
|
|
|
27,160,748 |
|
|
|
|
|
|
|
|
|
|
Book value per share (1) |
A / D |
$ |
40.20 |
|
|
$ |
39.96 |
|
|
$ |
36.08 |
|
|
$ |
34.76 |
|
Book value per share including
the Deferred Gain(1) |
B / D |
|
44.04 |
|
|
|
43.88 |
|
|
|
39.93 |
|
|
|
38.67 |
|
Adjusted book value per share
(1) |
C / D |
|
47.86 |
|
|
|
47.26 |
|
|
|
44.19 |
|
|
|
43.78 |
|
|
|
|
|
|
|
|
|
|
Year-over-year change
in: (2) |
|
|
|
|
|
|
|
|
Book value per share |
|
|
14.5 |
% |
|
|
18.1 |
% |
|
(1.6 |
)% |
|
(13.0 |
)% |
Book value per share including the Deferred Gain |
|
|
13.1 |
|
|
|
16.3 |
|
|
|
(1.9 |
) |
|
|
(12.3 |
) |
Adjusted book value per share |
|
|
10.8 |
|
|
|
10.5 |
|
|
|
5.4 |
|
|
|
3.0 |
|
|
|
|
|
|
|
|
|
|
(1) See Page 10
for information regarding our use of Non-GAAP Financial
Measures. |
(2) Reflects the
twelve month change in book value per share after taking into
account dividends declared of $1.12, $1.10, $3.29, and $3.28 for
the twelve month periods ended March 31, 2024,
December 31, 2023, March 31, 2023, and December 31,
2022, respectively. |
|
EMPLOYERS HOLDINGS, INC.Earnings Per Share
(unaudited)$ in millions, except per share
amounts |
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2024 |
|
2023 |
Numerators: |
|
|
|
|
Net income |
A |
$ |
28.3 |
|
|
$ |
23.6 |
|
Impact of the LPT
Agreement |
|
|
(2.1 |
) |
|
|
(2.0 |
) |
Net income excluding
LPT (1) |
B |
|
26.2 |
|
|
|
21.6 |
|
Net realized and unrealized
gains on investments |
|
|
(11.4 |
) |
|
|
(6.4 |
) |
Income tax expense related to
items excluded from Net income |
|
|
2.4 |
|
|
|
1.3 |
|
Adjusted net
income (1) |
C |
$ |
17.2 |
|
|
$ |
16.5 |
|
|
|
|
|
|
Denominators: |
|
|
|
|
Average common shares
outstanding (basic) |
D |
|
25,345,942 |
|
|
|
27,176,823 |
|
Average common shares
outstanding (diluted) |
E |
|
25,535,971 |
|
|
|
27,392,678 |
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
Basic |
A / D |
$ |
1.12 |
|
|
$ |
0.87 |
|
Diluted |
A / E |
|
1.11 |
|
|
|
0.86 |
|
|
|
|
|
|
Earnings per share
excluding LPT: (1) |
|
|
|
|
Basic |
B / D |
$ |
1.03 |
|
|
$ |
0.79 |
|
Diluted |
B / E |
|
1.03 |
|
|
|
0.79 |
|
|
|
|
|
|
Adjusted earnings per
share: (1) |
|
|
|
|
Basic |
C / D |
$ |
0.68 |
|
|
$ |
0.61 |
|
Diluted |
C / E |
|
0.67 |
|
|
|
0.60 |
|
|
|
|
|
|
(1) See Page 10
for information regarding our use of Non-GAAP Financial
Measures. |
|
Non-GAAP Financial Measures
Within this earnings release we present the
following measures, each of which are "non-GAAP financial
measures." A reconciliation of these measures to the Company's most
directly comparable GAAP financial measures is included herein.
Management believes that these non-GAAP measures are important to
the Company's investors, analysts and other interested parties who
benefit from having an objective and consistent basis for
comparison with other companies within our industry. Management
further believes that these measures are more relevant than
comparable GAAP measures in evaluating our financial
performance.
The LPT Agreement is a
non-recurring transaction that does not result in any meaningful
ongoing cash benefits to the Company. Management believes that
providing non-GAAP measures that exclude the effects of the LPT
Agreement (amortization of deferred reinsurance gain, adjustments
to LPT Agreement ceded reserves and adjustments to contingent
commission receivable) is useful in providing investors, analysts
and other interested parties a meaningful understanding of the
Company's ongoing underwriting performance.
Deferred reinsurance gain (Deferred
Gain) reflects the unamortized gain from the LPT
Agreement. This gain has been deferred and is being amortized using
the recovery method, whereby the amortization is determined by the
proportion of actual reinsurance recoveries to total estimated
recoveries, except for the contingent profit commission, which is
being amortized through June 30, 2024. Amortization is reflected in
losses and LAE incurred.
Adjusted net income (see Page 3
for calculations) is net income excluding the effects of the LPT
Agreement, and net realized and unrealized gains and losses on
investments (net of tax), and any miscellaneous non-recurring
transactions (net of tax). Management believes that providing this
non-GAAP measures is helpful to investors, analysts and other
interested parties in identifying trends in the Company's operating
performance because such items have limited significance to its
ongoing operations or can be impacted by both discretionary and
other economic factors and may not represent operating trends.
Stockholders' equity including the
Deferred Gain (see Page 8 for calculations) is
stockholders' equity including the Deferred Gain. Management
believes that providing this non-GAAP measure is useful in
providing investors, analysts and other interested parties a
meaningful measure of the Company's total underwriting capital.
Adjusted stockholders' equity
(see Page 8 for calculations) is stockholders' equity including the
Deferred Gain, less accumulated other comprehensive income (net of
tax). Management believes that providing this non-GAAP measure is
useful to investors, analysts and other interested parties since it
serves as the denominator to the Company's adjusted return on
stockholders' equity metric.
Return on stockholders' equity and
Adjusted return on stockholders' equity (see Page 4 for
calculations). Management believes that these
profitability measures are widely used by our investors, analysts
and other interested parties.
Book value per share, Book value per
share including the Deferred Gain, and Adjusted book value per
share (see Page 8 for calculations). Management believes
that these valuation measures are widely used by our investors,
analysts and other interested parties.
Net income excluding LPT (see
Page 3 for calculations). Management believes that these
performance and underwriting measures are widely used by our
investors, analysts and other interested parties.
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