Employers Holdings, Inc., a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services focused on select, small businesses engaged in low-to-medium hazard industries, just reported financial results for its third quarter ended September 30, 2021.
– – Record number of ending policies in-force (109,870), up 6% since year-end;
– – Gross premiums written were $152.3 million, up 16% year-over-year;
– – Net premiums earned of $147.1 million, up 2% year-over-year;
– – Net income of $15.0 million, or $0.53 per diluted share;
– – Adjusted net income of $11.6 million, or $0.41 per diluted share;
– – The Company repurchased 327,402 shares of its common stock at an average price of $40.54 per share;
Chief Executive Officer Katherine Antonello commented: “We closed the quarter with yet another record number of policies in-force and our written premiums, which were up 16% year-over-year, were the highest they have been since the first quarter of 2020. To recognize the positive shift we are experiencing in audits, we increased our final audit accruals by $4.7 million during the quarter. In addition, October premium writings are off to a very strong start, a sign that small businesses are beginning to thrive and are actively shopping for workers’ compensation coverage.
We maintained our current accident year loss and LAE ratio on voluntary business at 63.6%, down from 65.5% a year ago. Indemnity claim frequency continues to be down in recent periods while indemnity claim severity remains moderate. As part of our continued technology and process improvements initiative, we implemented a new comprehensive claims system during the quarter which we believe has enhanced and streamlined our claims handling processes. In connection with this implementation, we undertook several process changes and, as a result, we chose not to recognize any prior year loss reserve development during the quarter.
Our underwriting and administrative expenses of $37.4 million were down 19% from a year ago. The decrease was primarily a result of targeted expense savings, mainly in the areas of compensation and professional fees.”
Ms. Antonello continued, “Our Cerity operating segment, which offers digital workers’ compensation insurance solutions directly to consumers, continues to grow while remaining within our targeted low hazard groups. We believe that Cerity’s technological and intellectual capabilities will support our future growth initiatives and provide direct access to workers’ compensation insurance for businesses seeking an online experience.
To capitalize on emerging labor market improvements, we recently expanded our underwriting appetite at both Employers and Cerity to include additional classes of business within our targeted hazard group mix. We remain committed to maintaining the highest level of underwriting discipline and to aggressively managing our expenses within our Employers and Cerity segments. Our balance sheet and capital position are very strong and are highly supportive of these key initiatives.”