UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrantx                             Filed by a Party other than the Registrant¨

Check the appropriate box:

AMERISAFE, Inc.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

April 29, 20132016

Dear AMERISAFE Shareholder:

You are cordially invited to attend the annual meeting of shareholders of AMERISAFE, Inc. The meeting will be held on Friday, June 14, 2013,10, 2016, beginning at 9:00 a.m. at our corporate headquarters, which are located at 2301 Highway 190 West in DeRidder, Louisiana 70634.

Information about the meeting, including the nominees for election as directors and the other proposals to be considered is presented in the following notice of annual meeting and proxy statement. At the meeting, management will report on the Company’s operations during 20122015 and comment on our outlook for the remainder of 2013.2016. The report will be followed by a question and answer period.

We hope that you will plan to attend the annual meeting. It is important that your shares be represented. Accordingly, please vote using the internet or telephone procedures described on the proxy card or sign, date and promptly mail the enclosed proxy card in the enclosed pre-addressed, postage-paid envelope.

We would also like to thank Allen Bradley for his leadership to AMERISAFE. Allen retired on April 22nd after over 20 years of service to the Company. He served in a number of key management roles at AMERISAFE, including as CEO from 2003 through 2015 and as Chairman of the Board from 2005 until April 2016. Allen led AMERISAFE in its initial public offering and the Company in the most profitable years in its history. Allen leaves a lasting imprint on AMERISAFE and we wish him the best in his retirement.

We look forward to seeing you at the meeting on June 14th.10th.

Sincerely,

C. Allen Bradley, Jr.Jared A. Morris

Chairman and

Chief Executive Officer

AMERISAFE, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To be held on June 14, 201310, 2016

The 20132016 annual meeting of shareholders of AMERISAFE, Inc. (the “Company”) will be held on June 14, 2013,10, 2016, beginning at 9:00 a.m. at the Company’s corporate headquarters, which are located at 2301 Highway 190 West in DeRidder, Louisiana 70634. The meeting will be held for the following purposes:

Information concerning the matters to be voted upon at the meeting is set forth in the accompanying proxy statement. Also enclosed is the Company’s annual report for 2012.the year ended December 31, 2015. Holders of record of the Company’s common stock as of the close of business on April 22, 201318, 2016 are entitled to notice of, and to vote at, the meeting.

If you plan to attend the meeting and will need special assistance or accommodation, please describe your needs on the enclosed proxy card.

By Order of the Board of Directors,

Kathryn H. RowanShirley

SeniorExecutive Vice President,

General Counsel and Secretary

DeRidder, Louisiana

April 29, 20132016

Table of Contents

AMERISAFE, Inc.

2301 Highway 190 West

DeRidder, Louisiana 70634

PROXY STATEMENT

This proxy statement provides information in connection with the solicitation of proxies by the Board of Directors (the “Board”) of AMERISAFE, Inc. (the “Company”) for use at the Company’s 20132016 annual meeting of shareholders or any postponement or adjournment thereof (the “Annual Meeting”). This proxy statement also provides information you will need in order to consider and act upon the matters specified in the accompanying notice of annual meeting. This proxy statement and the enclosed proxy card are being mailed to shareholders on or about May 2, 2013.2016.

Record holders of the Company’s common stock as of the close of business on April 22, 201318, 2016 are entitled to vote at the Annual Meeting. Each record holder of common stock on that date is entitled to one vote at the Annual Meeting for each share of common stock held. As of April 22, 2013,18, 2016, there were 18,389,36720,440,124 shares of common stock outstanding.

You cannot vote your shares unless you are present at the Annual Meeting or you have previously givenproperly executed your proxy. You can vote by proxy in one of three convenient ways:

You may revoke your proxy at any time prior to the vote at the Annual Meeting by:

Unless revoked as described above, all properly executed proxies will be voted at the Annual Meeting in accordance with your directions on the proxy. If a properly executed proxy gives no specific instructions, the shares of common stock represented by your proxy will be voted:

If you own shares of common stock held in “street name” and you do not instruct your broker how to vote your shares using the instructions your broker provides you, your shares will be voted in the ratification of the appointment of Ernst & Young as the Company’s independent registered public accounting firm for 2013,2016, but not for any other proposal. To be sure your shares are voted in the manner you desire, you should instruct your broker how to vote your shares.

Holders of a majority of the outstanding shares of the Company’s common stock must be present, either in person or by proxy, to constitute a quorum necessary to conduct the Annual Meeting. Abstentions and broker non-votes are counted for purposes of determining a quorum and are considered present and entitled to vote.

The following table sets forth the voting requirements, whether broker discretionary voting is allowed and the treatment of abstentions and broker non-votes for each of the matters to be voted on at the Annual Meeting.

The Company pays the costs of soliciting proxies. We have engaged Georgeson, Inc. to serve as our proxy solicitor for the Annual Meeting at a base fee of $8,500 plus reimbursement of reasonable expenses. Georgeson will conduct our broker search, solicit banks, brokers, institutional investors and hedge funds to determine voting instructions, monitor voting and deliver executed proxies to our voting tabulator. Our employees also may solicit proxies by telephone or in person. However, they will not receive additional compensation for soliciting proxies. The Company may request banks, brokers and other custodians, nominees and fiduciaries to forward copies of these proxy materials to the beneficial holders and to request instructions for the execution of proxies. The Company may reimburse these persons for their related expenses. Proxies are solicited to provide all record holders of the Company’s common stock an opportunity to vote on the matters to be presented at the Annual Meeting, even if they cannot attend the meeting in person.

PROPOSAL 1

ELECTION OF DIRECTORS

At the Annual Meeting, twothree directors will be elected to serve three-year terms expiring at our annual shareholder meeting in 2016.2019. This section of the proxy statement contains information relating to the two director nominees and the directors whose terms of office continue after the Annual Meeting. The director nominees were selected by the Nominating and Corporate Governance Committee and approved by the Board for submission to the shareholders. The nominees for election are Teri Fontenot, Jared A. Morris and Daniel Phillips. BothAll currently serve as directors.

On February 25, 2013, Sean M. Traynor, a member of our Board of Directors, advised the Company of his decision not to stand for re-election at the Company’s 2013 annual meeting of stockholders to devote more time to his other business and personal interests. Mr. Traynor will continue to serve as a director until our Annual Meeting. Mr. Traynor has served as a member of the Board of Directors since 2001. The Board intends to reduce the size of the Board from eight to seven members, effective immediately following the Annual Meeting.

The Board recommends a vote “FOR” the election of each of the nominees.

Nominees to be elected for terms expiring at the Annual Meeting in 20162019

Teri Fontenot, age 62, has served as a director of the Company since January 1, 2016. Ms. Fontenot is the President and Chief Executive Officer of Woman’s Hospital, a position she has held since 1996. She is chair of the Louisiana Hospital Association Professional and General Liability Trust Fund and is on the Baton Rouge advisory board for IBERIABANK.

Ms. Fontenot brings to the Board substantial experience as the chief executive officer of a healthcare institution and as chair of an insurance provider. Her experience in the healthcare and insurance industries provide her with valuable insight into the issues affecting the Company and our policyholders.

Jared A. Morris, age 38,41, has served as a director of the Company since 2005. In November 2012, he was appointed by the Board to serve as our lead director. He was appointed as Chairman of the Board effective April 23, 2016, upon the retirement of Allen Bradley. Since 2002, he has been an officer and a principal owner of Marine One Acceptance Corp.Corporation and Dumont Land, LLC, both of which are specialty finance companies. Since 2002, he has also served as an officer of Dumont Management Group, LLC, a privately held company that provides management services to various affiliated finance and investment companies. He serves on the boardsboard of directors of First National Bank of DeRidder and Beauregard Memorial Hospital and Driver’s History, LLC, a provider of traffic violation data to the automotive insurance industry.Hospital. Jared A. Morris is the son of Millard E. Morris.

Jared A. Morris has beenis currently our Chairman of the Board and the chair of the Nominating and Corporate Governance Committee for seven years andCommittee. In these capacities, he has taken a lead role in developing and maintaining the Company’s corporate governance policies and practices. His experience and training in financial and credit management, as well as business investment, also enhance the Board’s business sophistication.

Daniel Phillips, age 66,69, has served as a director of the Company since 2007. Mr. Phillips is President and Chief Executive Officer of PAX, Inc., a supplier of fabricated heavy industrial steel to the petrochemical, petroleum refining, and power industries, headquartered in Baton Rouge, Louisiana. He founded PAX, Inc. in 1979, and has been an owner and officer of that company since that time.

Mr. Phillips brings to the Board substantial experience as the founder and chief executive officer of an industrial company that typifies many of the Company’s insurance clients. His experience as a CEO provides him with a unique perspective on leadership and issues affecting the Company and its clients.

Current Directorsdirectors whose terms expire at the Annual Meeting in 20152017

Michael Brown, age 52, has served as a director of the Company since November 2014. Mr. Brown is the Vice Chairman and Chief Operating Officer of Iberiabank Corp., a position he has held since September 2009. In that role, he manages Iberiabank’s retail and commercial banking operations in Louisiana, Arkansas, Florida, Alabama, Texas and Tennessee. From 2001 to 2009, Mr. Brown served as Senior Executive Vice President of Iberiabank Corp. Prior to joining Iberiabank in 1999, Mr. Brown was a managing director with Bank One Capital Markets.

Mr. Brown’s experience in the financial services industry in a number of the Company’s key markets makes him well qualified to serve as a director of the Company.

Austin P. Young III, C.P.A., age 75, has served as a director of the Company since 2005. Mr. Young served as Senior Vice President, Chief Financial Officer and Treasurer of CellStar Corporation, a logistics service provider to the wireless communications industry, from 1999 until his retirement in December 2001. From 1996 to 1999, he served as Executive Vice President-Finance and Administration of Metamor Worldwide, Inc., a national staffing and systems consulting firm. Mr. Young was also Senior Vice President and Chief Financial Officer of American General Corporation, an insurance and financial services holding company, for more than eight years. He was a partner in the Houston and New York offices of KPMG LLP for 12 years before joining American General Corporation. Mr. Young currently serves as lead independent director and chairman of the audit committee of Insperity, Inc., a human resources outsourcing company. He previously served as a director of Tower Group International, Ltd., a property and casualty insurance holding company, from 2004 to September 2014. He holds an accounting degree from the University of Texas and is a licensed Certified Public Accountant in Texas. He is a member of the Houston and State Chapters of the Texas Society of Certified Public Accountants, the American Institute of Certified Public Accountants, and Financial Executives International.

Mr. Young’s significant experience as a partner at an international accounting firm and in senior financial positions at various companies provides a solid background that enables him to advise the Board on financial and audit-related matters. This experience also enables him to serve as an “audit committee financial expert.” Additionally, his prior service on the boards of other public companies, including one in the insurance industry, provides valuable insight as to the current trends in the insurance industry and in public company governance.

Current directors whose terms expire at the Annual Meeting in 2018

Philip A. Garcia, C.P.A., age 56,59, has served as a director of the Company since 2010. He retired from the Erie Insurance Group in April 2009, where he served as Executive Vice President and Chief Financial Officer for the final 12 years of his 28-year career with that company. In 2012, Erie InsuranceMr. Garcia was a director of Donegal Group Inc. from December 2009 to May 2011. He was the 20^th largest property and casualty insurer in the United States based on net premiums written. He ispreviously a licensed as a Certified Public Accountant in Pennsylvania.

Mr. Garcia possesses a strong background in financial, accounting and investment management with a publicly traded property and casualty insurance company, as evidenced by his prior service as chief financial officerChief Financial Officer of Erie Insurance Group. He brings substantial experience in the insurance industry to the Board, including a strategic understanding of the operations of a property and casualty insurance company, operations, as well as an understanding of the current economic and other challenges facing our industry. He, together with Mr. Young, servesHis experience enables him to serve on the Audit Committee as our designatedan “audit committee financial expert.”

Randy Roach, age 62, has served as a director of the Company since March 2007. Since 2000, Mr. Roach has been the Mayor of Lake Charles, Louisiana. He is a former member of the House of Representatives of the Louisiana Legislature. Mr. Roach is Vice Chairman of the Louisiana Funding Review Panel, a body created by the Louisiana Legislature to study and make recommendations relating to statewide retirement systems for local employees. Mr. Roach is a member of the United States Environmental Protection Agency’s Local Government Advisory Committee. He is a director of The First National Bank of Louisiana. Mr. Roach has been a member of the Louisiana State Bar Association since 1976.

Mr. Roach’s experience as a government official brings valuable insight to the Board given that the Company operates in a highly regulated industry. Mr. Roach’s background as an attorney, legislator and government official is particularly helpful to the Nominating and Corporate Governance Committee.

Millard E. Morris, age 68,71, founded the Company in 1985. He was our Chairman, Chief Executive Officer and principal shareholder until the Company was sold to a private investment group in 1997. He served on the Company’s Board from 1985 until 2005, when he voluntarily retired from our Board prior to the Company’s initial public offering. Mr. Morris was re-elected to the Board in June 2007. SinceFrom 1996 until 2015, he has beenserved as the managing member of Dumont Management Group, LLC, a privately held company that provides management services to various affiliated finance and investment companies. Millard E. Morris is the father of Jared A. Morris.

Millard E. Morris’s experience as founder of the Company and his long-term service as a director give him unique knowledge of the opportunities and challenges associated with the Company’s business. His familiarity with the Company and the insurance industry make him uniquely qualified to serve as a director of the Company.

Current Directors whose terms expire at the Annual Meeting in 2014

C. Allen Bradley, Jr.Randy Roach, age 61, joined the Company in 1994 and has served as Chairman of the Board since 2005 and as Chief Executive Officer and a director since 2003. He served as President from 2002 until August 2010. In addition to the positions listed above, Mr. Bradley has served in various other executive capacities, including Chief Operating Officer, General Counsel and Secretary. He has also managed various departments of the Company, including underwriting operations and safety services. Prior to joining the Company, he was engaged in the private practice of law.

Mr. Bradley’s over 19 years of experience with the Company, culminating in his service as the Company’s Chief Executive Officer, gives him unique knowledge of the Company’s business and the insurance industry. His long-term experience with the Company in various roles provides valuable insight about operational and strategic matters impacting the Company.

Austin P. Young III, C.P.A., age 72,65, has served as a director of the Company since 2005.March 2007. Mr. Young servedRoach has been the Mayor of Lake Charles, Louisiana since 2000. Prior to assuming his duties as Senior Vice President, Chief Financial Officer and Treasurer of CellStar Corporation, a logistics service provider to the wireless communications industry, from 1999 until his retirement in December 2001. From 1996 to 1999, he served as Executive Vice President-Finance and Administration of Metamor Worldwide, Inc.Mayor, Mr. YoungRoach was also Senior Vice President and Chief Financial Officer of American General Corporation, an insurance and financial services holding company, for more than eight years. He was a partnerengaged in the Houstonpractice of law focusing on real estate and New York offices of KPMG LLP for 12 years before joining American General Corporation.commercial law. Mr. Young currently serves as a Director and Chairman of the Audit Committees of Insperity, Inc., a human resources outsourcing company, and Tower Group, Inc., a property and casualty insurance holding company. He holds an accounting degree from the University of Texas and is a licensed Certified Public Accountant in Texas and New York. He isRoach has been a member of the Houston andLouisiana State ChaptersBar Association since 1976. He is a director of The First National Bank of Louisiana. He is also a former member of the Texas SocietyHouse of Certified Public Accountants,Representatives of the American Institute of Certified Public Accountants, and Financial Executives International.Louisiana Legislature.

Mr. Young’s significantRoach’s experience as a partner at an international accounting firm and in senior financial positions at various companies provides a solid background that enables himgovernment official brings valuable insight to advise the Board on financialgiven that the Company operates in a highly regulated industry. Mr. Roach’s background as an attorney, legislator and audit-related matters. This experience also enables him to servegovernment official is particularly helpful in his role as chaira member of the Audit CommitteeNominating and as an “audit committee financial expert.” Additionally, his service on the boards of two other public companies, including one in the insurance industry, provides valuable insight as to current trends in the insurance industry and in public company governance.Corporate Governance Committee.

PROPOSAL 2

ADVISORY VOTE ON EXECUTIVE COMPENSATION

In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (and SchedulePursuant to Section 14A of the Securities Exchange Act of 1934 (the “Exchange Act”)), we are submitting the compensation of our named executive officers as disclosed in this proxy statement to our shareholders for an advisory vote. Our Board has adopted a policy to hold annual advisory votes on executive compensation. Our next advisory vote on executive compensation will be at our annual meeting of shareholders in 2017. Our next advisory vote on the frequency of shareholder votes on executive compensation will take place at our annual meeting of shareholders in 2017.

As described below under the heading “Compensation Discussion and Analysis,” we seek to offer our employees, including our named executive officers, with a competitive pay package that rewards individual contributions, performance experience and tenureexperience with our Company, while aligning the interests of our executive officers and other key employees with those of the Company’s shareholders. The Compensation Committee sets compensation in this manner to ensure that our compensation practices do not put the Company at a disadvantage in attracting and retaining executives and other employees, while also ensuring a competitive cost structure for our Company.

The vote on this proposal is not intended to address any specific element of compensation. Rather, the vote relates to the compensation of our named executive officers, as described under the headingheadings “Compensation Discussion and Analysis” and “Executive Compensation” in this proxy statement. The vote is advisory, which means that the vote is not binding on the Company, our Board of Directors or the Compensation Committee. However, the Compensation Committee expects to consider the outcome of this advisory vote in evaluating whether any actions are appropriate with respect to our compensation programs for our executive officers.

The Board recommends a vote “FOR” the approval of the compensation of our named executive officers.

PROPOSAL 3

AMENDMENT OF NON-EMPLOYEE DIRECTOR

RESTRICTED STOCK PLAN

Background

The AMERISAFE, Inc. Non-Employee Director Restricted Stock Plan, which we refer to as the Director Plan, was approved by our Board and shareholders in 2005. There are eight directors currently eligible to participate in the Director Plan. It was amended in 2010 and approved by the Board and shareholders. The Director Plan authorized the issuance of up to 100,000 shares of our common stock to our non-employee directors. As of April 18, 2016, 25,698 shares were available for issuance under the Director Plan.

Under the existing Director Plan, each non-employee director is automatically granted a restricted stock award for a number of shares of our common stock equal to $30,000 divided by the closing price of our common stock on the date of our annual meeting of shareholders. Each restricted stock award vests on the date of the next annual meeting of shareholders following the date of the grant, subject to the continued service of the non-employee director.

If a non-employee director is elected to the Board other than at an annual meeting of shareholders, the non-employee director receives a pro-rated initial grant of restricted stock based upon the number of full months of service until the next annual meeting of shareholders.

The Compensation Committee has engaged McLagan, an AON Hewitt Company, as its independent compensation consultant. McLagan conducted a director compensation survey in 2014. The director compensation peer group consisted of the same companies that McLagan surveyed in 2014 with respect to compensation for the Company’s executive officers. For additional information regarding the 2014 executive

compensation peer group, see “Compensation Discussion and Analysis—2014 Survey Peer Group Construction and Survey Results.” The Compensation Committee considered the results of the 2014 director compensation survey and recommended that the Board increase the value of the annual restricted stock award.

Based on the Compensation Committee’s recommendation, the Board approved an amendment to the Director Plan to permit an increase in the dollar value of annual grants to directors to $45,000. Our Board has determined that the amendment to the Director Plan is advisable and in the best interests of the Company and our shareholders, and has submitted the amendment to be voted on by our shareholders at the Annual Meeting.

Proposed Amendment

If our shareholders approve the amendment to the Director Plan, the value of the initial and annual grants of restricted stock to non-employee directors will be increased from $30,000 to $45,000. Further the amendment would permit the Board to increase the dollar amount of the annual award to an amount up to $75,000 without shareholder approval. A copy of the Director Plan, as proposed to be amended, is attached asAppendix A.

Subject to shareholder approval, the Board has awarded each of our current non-employee directors an annual grant of restricted stock with a value of $45,000. If the shareholders do not approve the amendment, each member of the Board will receive common stock with a value of $30,000 in accordance with the existing terms of the Director Plan.

Reasons for the Amendment

We are proposing to increase the value of the initial and annual grants of restricted stock to our non-employee directors to more closely align the total compensation paid to our non-employee directors with market practice at public companies similar to ours and to provide some additional flexibility to adjust the value of these grants in the future. Our Board engaged a compensation consultant to assist in determining a market-competitive amount for the equity component of non-employee director compensation. The current value of the initial and annual grants of restricted stock were established in 2010. The equity component of our non-employee director compensation has not been adjusted since that time.

The Director Plan was first adopted in connection with the Company’s initial public offering in 2005. Since that time, the eight individuals that are currently non-management members of the Board have received, in the aggregate, 61,504 shares of Common Stock as compensation as Board members pursuant to the Plan. As of the date of this proxy statement, these directors continue to hold 57,504 of those shares, or over 93% of the shares received as Board compensation under the Plan. Seven of the eight current non-management directors have never sold any of the shares they have received under the Director Plan. Including the shares granted under the Director Plan, the eight non-management directors beneficially own, in the aggregate, 215,992 shares of Common Stock, representing approximately 0.01% of the outstanding shares beneficially owned by all of the Company’s shareholders.

Eligibility; Administration and Terms

The Director Plan provides for the automatic grant of awards to our non-employee directors. Currently we have eight non-employee directors who are eligible to receive restricted stock awards under the Director Plan.

The Director Plan is administered by the Compensation Committee. Restricted stock awards to non-employee directors are generally subject to terms including non-transferability, immediate vesting upon death or total disability of director, forfeiture of unvested shares upon termination of service by a director, and acceleration of vesting upon a change in control of the Company.

The Board recommends a vote “FOR” the approval of an amendment to the Company’s non-employee

director restricted stock plan.

PROPOSAL 4

RATIFICATION OF APPOINTMENT OF

ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM FOR 20132016

The Audit Committee has appointed Ernst & Young LLP as the Company’s independent registered public accounting firm for 2013.2016. The Board is asking shareholders to ratify this appointment. SEC regulations and the Nasdaq listing requirements require the Company’s independent registered public accounting firm to be engaged, retained and supervised by the Audit Committee. However, the Board considers the selection of an independent registered public accounting firm to be an important matter to shareholders. Accordingly, the Board considers a proposal for shareholders to ratify this appointment to be an opportunity for shareholders to provide input to the Audit Committee and the Board on a key corporate governance issue.

Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting and will be offered the opportunity to make a statement if they so desire. They will also be available to respond to appropriate questions. For additional information regarding our independent registered public accounting firm, see “Independent Public Accountants.”

The Board recommends a vote “FOR” the ratification of Ernst & Young LLP

as the Company’s independent registered public accounting firm.

THE BOARD, ITS COMMITTEES AND ITS COMPENSATION

Board of Directors

The Board presently consists of eight members, seven of whom are non-employee directors. Following the annual meeting, the Board will consist of seven members, six of whom are non-employee directors. The Board is divided into three classes, with each class serving three-year terms. The term of one class expires at each annual meeting of shareholders.

Director Compensation

The elements of compensation payable to our non-employee directors in 20122015 are briefly described in the following table.below.

Committee Chairs do not receive annual cash retainers for being members of the committee thatcommittees they chair. Meeting fees are not paid for attendance at the first four Committeefive committee meetings during the year. Any director who is an employee of the Company does not receive additional compensation for serving as a director. Directors do not receive additional compensation for serving on our Risk Committee. The Company reimburses directors for reasonable out-of-pocket expenses incurred in connection with their service as directors.

The amount of restricted stock granted to each non-employee directorsdirector is equal to $30,000 divided by the closing price of our common stock on the date of the annual meeting of shareholders at which the non-employee director is elected or continues to be a member of the Board. Awards to non-employee directors are made under the AMERISAFE, Inc. 2010 Restated Non-Employee Director Restricted Stock Plan (the “2010 Director Plan”). On June 15, 2012, each non-employee director was granted 1,119 shares of restricted stock.

The shares of restricted stock granted to non-employee directors vest at the next annual meeting of shareholders. If a non-employee director is first elected or appointed to the Board at a time other than at an annual meeting of shareholders, the non-employee director is awarded a prorated initial restricted stock grant.grant at that time. Awards to non-employee directors are made under the AMERISAFE, Inc. 2010 Restated Non-Employee Director Restricted Stock Plan (the “2010 Director Plan”).

On June 12, 2015, each non-employee director (other than Ms. Fontenot) was granted 1,016 shares of restricted stock. Ms. Fontenot’s appointment as a director was effective on January 1, 2016. On January 4, 2016 (the first trading day after becoming a director), Ms. Fontenot was granted 376 shares of restricted stock.

For 2016, the Board has revised its director compensation policy. Subject to shareholder approval, the Board will set the annual restricted stock award grant at $45,000. In connection with Mr. Jared Morris being elected Chairman of the Board, the Board plans to approve an annual cash retainer for the Chairman of the Board. Because the Chairman of the Board is independent and separate from the Chief Executive Officer, the Board will no longer have a lead independent director. As a result, there will no longer be an annual cash retainer for a lead independent director.

The following table provides information regarding the compensation of our non-employee directors for the year ended December 31, 2012.2015.

rules, the amounts shown in this column exclude the impact of estimated forfeitures related to service-based vesting conditions. See Note 1312 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 20122015 for information regarding the assumptions made in determining these values. As of December 31, 2012,2015, each non-employee director (other than Ms. Fontenot) held 1,1191,016 shares of restricted stock.

2.	In 2012, Mr. Garcia received an additional $12,000 in Compensation Committee fees for his time and effort in leading the development and implementation Ms. Fontenot holds 376 shares of the Company’s long-term incentive compensation program.restricted stock.

Non-Employee Director Stock Ownership and Retention Guidelines

Our Board recognizes that ownership of common stock is an effective means to align the interests of our directors with those of our shareholders. The following is a summary of our stock ownership and retention guidelines for our non-employee directors:directors.

Non-Employee Director Stock Ownership Guidelines. Non-employee directors are expected to acquire and hold during their Board service shares of our common stock equal in value to at least three times the annual cash retainer paid to our directors, or $105,000.$135,000. Non-employee directors have five years from the later of the adoption of these guidelines or their initial election to the Board to meet thisthese ownership guideline.guidelines.

Non-Employee Director Retention Guidelines. Directors are expected to continuously own sufficient shares to meet the guidelines once attained. Until a director meets the directors attain compliance with the stock ownership guidelines, the directorsdirector will be required to hold 75% of the shares of common stock received from any equity award, net of any shares used to pay the exercise price or tax withholding. If a director attains compliance with the stock ownership guideline and subsequently falls below the guideline because of a decrease in the price of our common stock, the director will be deemed in compliance provided that the director retains the shares then held.

The following table provides the equity ownership of each of our non-employee directors as of December 31, 2012,2015, measured in dollars. Ownership was calculated based on a price of $27.25$50.90 per share, the closing price of the Company’s common stock on December 31, 2012, the last trading day of 2012.2015.

Corporate Governance

The Board and senior management of the Company believe that one of their primary responsibilities is to promote a corporate culture of accountability, responsibility and ethical conduct throughout the Company. Consistent with these principles, the Company has, among other things, adopted:

Our corporate governance guidelines, code of business conduct and ethics, committee charters and certain other governance policies are available on the Company’s website (www.amerisafe.com) in the Investor Relations section. Copies of these documents are also available upon written request to the Company’s Secretary. The Company will post information regarding any amendment to, or waiver from, its code of business conduct and ethics on its website in the Investor Relations section.

Management regularly meets with shareholders and potential investors. In those meetings, investors and solicitsshareholders express their views regarding the Company’s executive compensation practices and corporate governance policies. Management reports to the Board and the Nominating and Corporate Governance Committee, or NCG Committee regarding the discussions at these meetings. The NCG Committee and the Board periodically review the Company’s corporate governance policies and practices. Based on these reviews, input from shareholders and recommendations from the NCG Committee, the Board adopts changes to policies and practices that it believes are in the best interests of the Company, and as appropriate to complyincluding complying with any new SEC or Nasdaq listing requirements. Since our annual meeting of shareholders in 2012, on the recommendation of the NCG Committee, the Board:

The NCG Committee intends to continue to periodically review the Company’s corporate governance policies, taking into consideration, among other things, the views of our shareholders and developments in the governance practices of other public companies.

Board Leadership

On February 25, 2016, Mr. Bradley advised the Board that he would retire as Executive Chairman and as a member of the Board on April 22, 2016. At that time, the Board appointed Jared A. Morris as Chairman of the Board effective as of Mr. Bradley’s retirement. The Company’sBoard believes that separating the roles of Chairman and Chief Executive Officer positions are combined. The Board believes that combining the positions is the most effective leadership structure for the Company at this time.

As Chief Executive Officer,Chairman, Mr. Bradley is involved in the day-to-day operations and is most familiar with the opportunities and challenges that the Company faces at any given time. With this executive and operational insight, he is able to assist the Board in setting strategic priorities, lead the discussion of business and strategic issues and translate Board recommendations into Company operations and policies.

In 2012, in light of current trends in corporate governance and the views of proxy advisory firms, the Board appointed an independent lead director, Mr. Jared A. Morris. HisJ. Morris’s key responsibilities as independent lead director include:

Director Independence

As part of the Company’s corporate governance guidelines, the Board has established a policy requiring a majority of the members of the Board to be independent, as that term is defined in the Nasdaq listing requirements. The Board has determined that each of its non-employee directors, Mr. Brown, Ms. Fontenot, Mr. Garcia, Mr. J. Morris, Mr. M. Morris, Mr. Phillips, Mr. Roach, Mr. Traynor and Mr. Young, is independent of the Company and its management within the meaning of the Nasdaq listing requirements.

In determining that Mr. Phillips is independent, the Board considered that Mr. Phillips serves asis President, Chief Executive Officer and an owner of PAX, Inc., a policyholder of the Company. The Board determined that thethis relationship woulddoes not interfere with Mr. Phillips’ exercise of independent judgment and determinedthat he is independent within the meaning of the Nasdaq listing requirements. See “Certain Relationships and Related Transactions.”

Board Meetings

The Board held fivesix meetings during 2012.2015. Each director serving on the Board in 20122015 attended at least 75% of the total number of meetings of the Board and committees on which he served. Under the Company’s corporate governance guidelines, each director is expected to devote the time necessary to appropriately discharge his responsibilities and to rigorously prepare for, attend and participate in all Board meetings and meetings of Board committees on which he serves.

Annual Meetings of Shareholders

The Company’s directors are encouraged to attend our annual shareholder meetings, but we do not currently have a policy relating to directors’ attendance at these meetings. Six directors, Mr. Bradley, and Mr. J. Morris, Mr. M. Morris, Mr. Garcia, Mr. Roach and Mr. Phillips, attended our 20122015 annual meeting of shareholders.shareholders, either in person or by teleconference.

Audit Committee

The Audit Committee currently consists of Mr. YoungGarcia (Chair), Mr. Brown, Mr. J. Morris, Mr. Young and Ms. Fontenot. In April 2016, Mr. Garcia andwas appointed Committee chair, succeeding Mr. Roach.Young. The Audit Committee oversees our accounting and financial reporting processes and the audits of the Company’s financial statements. The functions and responsibilities of the Audit Committee include:

The Audit Committee met six times during 2012.2015. Our independent registered public accounting firm reports directly to the Audit Committee. Each member of the Audit Committee has the ability to read and understand fundamental financial statements. The Board has determined that each member of the Audit Committee is “independent” as defined in the Nasdaq listing requirements. In addition, the Board has determined that Mr. Young, Mr. Garcia,requirements and Mr. Roach each satisfy the SEC requirements relating to the independence of audit committee members. The Board has also determined that Mr. Young and Mr. Garcia each meet the requirements of an “audit committee financial expert” as defined by the rules of the SEC.SEC rules. The Audit Committee has the authority to engage independent counsel and other advisors as the Committee deems necessary to carry out its duties.

Compensation Committee

The Compensation Committee currently consists of Mr. GarciaBrown (Chair), Mr. Garcia, Mr. J. Morris and Mr. Traynor.Roach. In April 2016, Mr. Brown was appointed Committee chair, succeeding Mr. Garcia. The Compensation Committee has sole authority for establishing, administering and reviewing the Company’s policies, programs and procedures for compensating our executive officers and the members of the Board. The Compensation Committee may delegate its responsibilities to a subcommittee comprised of Compensation Committee members. The functions and responsibilities of the Compensation Committee include:

The Compensation Committee met eightseven times during 2012. The Committee met more frequently in 2012 primarily in connection with the development of the Company’s long-term incentive compensation program.2015. The Board has determined that each member of the Compensation Committee is independent under the Nasdaq listing requirements.

The Compensation Committee has the sole authority to retain and terminate compensation consultants to assist in the evaluation of director or executive officer compensation and the sole authority to approve the fees and other retention terms of such compensation consultants. The committee may also retain independent counsel and other independent advisors to assist it in carrying out its responsibilities.

Nominating and Corporate Governance Committee

The NCG Committee currently consists of Mr. J. Morris (Chair), Mr. Phillips, Mr. Roach and Mr. Young. The functions and responsibilities of the Nominating and Corporate GovernanceNCG Committee include:

The Nominating and Corporate GovernanceNCG Committee met four times during 2012.2015. The Board has determined that each member of the Nominating and Corporate GovernanceNCG Committee is independent under the Nasdaq listing requirements.

The Nominating and Corporate GovernanceNCG Committee has the sole authority to retain and terminate any search firm to assist in the identification of director candidates and the sole authority to set the fees and other retention terms of such search firms. The committee may also retain independent counsel and other independent advisors to assist it in carrying out its responsibilities.

Qualifications for Director Nominees. In considering director nominees, for election as director, the NCG Committee considers a number of factors, including the following:

The NCG Committee will also consider other criteria for director candidates included in its committee charter, the Company’s corporate governance guidelines or as may be established from time to time by the Board. The NCG Committee has not adopted a separate policy pertaining to the consideration of diversity in the selection of nominees to the Board. The NCG Committee will identify nominees based upon recommendations by committee members of the committee or other Board members, members of the Company’s management or, as discussed below, by shareholders of the Company. Upon identification ofidentifying a potential nominee, members of the NCG Committee will interview the candidate, and based upon that interview, will make itsa recommendation to the Board.

Shareholder Recommendations. The NCG Committee will evaluate any director candidates recommended by a shareholder according to the same criteria as a candidate identified by the NCG Committee. TheTo date, the Company has nevernot received a recommendation for a director candidatescandidate from our shareholders. In considering director candidates recommended by shareholders, the NCG Committee will also take into account such additional factors as it considers relevant, including:

Shareholders may recommend candidates at any time, but to be considered by the NCG Committee for inclusion in the Company’s proxy statement for the next annual meeting of shareholders, recommendations must be submitted in writing no later than 150 calendar days before the first anniversary of the date on which the Company first mailed its proxy materials for the prior year’s annual meeting of shareholders. A shareholder’s notice must contain the following:

The shareholder’s notice must be signed by the shareholder recommending the director candidate for consideration and sent to the following address: AMERISAFE, Inc., 2301 Highway 190 West, DeRidder, Louisiana 70634, Attn: Corporate Secretary (Nominating and Corporate Governance Committee Communication / Communication/Director Candidate Recommendation).

Succession Planning

Our Board considers the evaluation of management and succession planning to be one of its most important responsibilities. The Board’s goal is to have a long-term program for effective senior leadership and development, with appropriate contingencies in case our chief executive officer, or any of our other executive officers, retires, resigns or is incapacitated.

In the Board’s succession planning program, internal candidates for the executive positions, including the CEO,chief executive officer, are identified and evaluated based on criteria considered predictive of success at the senior management level. This program incorporates 360 reviews and related evaluations for each individual. The assessment includes a development plan, including executive coaching, for each individual.

Our Corporate Governance Guidelines provides that the NCG Committee report to the Board on succession planning at least annually. The CEOchief executive officer is responsible for advising the Board regarding hisher recommendations and evaluations of potential successors, together with a review of any development plans for these individuals. The Board, with the assistance of the NCG Committee, evaluates potential successors to the CEO, as well as other members of senior management.

Risk Committee

The Board views risk management as one of its primary responsibilities. The Board initially formed the Risk Committee in 2010 to facilitate its risk management functions. In August 2011, the Board dissolved the Investment Committee and delegated the oversight responsibilities previously performed by the Investment Committee to the Risk Committee.

The Risk Committee’s charter provides that all members of the Board are members of the Risk Committee. Mr. M. Morris serves as chair of the Risk Committee and establishes the agenda for the meetings. Risk Committee members periodically receive presentations on risk-related topics from the Company’s management, including its Senior Vice President, Enterprise Risk Management.management.

The Risk Committee’s responsibilities include:

The Risk Committee met four times in 2012.2015. The Risk Committee has the authority to select, retain, terminate, and approve the fees and other terms of retention of special counsel, experts and consultants. This Committee also has direct access to any Company employee.

Risk Management

In addition to the activities of the Risk Committee, the Board monitors risks arising from financial reporting and controls through its Audit Committee and risks related to compensation through its Compensation Committee.

Communications with the Board

Any shareholder or other interested party who wishes to communicate directly with the Board or any of its members may do so by writing to: Board of Directors, c/o AMERISAFE, Inc., 2301 Highway 190 West, DeRidder, Louisiana 70634, Attn: Corporate Secretary. The mailing envelope should clearly indicate whether the communication is intended for the Board as a group, the non-employee directors or a specific director.

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis, or CD&A, is designed to provide shareholders with an understanding of the Company’s compensation philosophy and objectives, as well as the analysis that the Compensation Committee (referred to in this CD&A as the “Committee”) performed in setting executive compensation. It discusses the determination of how and why, in addition to what, compensation actions were taken during 2015 by the Committee for the two individuals that served as our chief executive officer, the two individuals that served as our chief financial officer, and our only two other executive officers during 2015 (which are referred to in this CD&A as our “named executive officers”):

In March 2015, the Company announced that Mr. Bradley would retire from the Company and that Ms. Frost would assume the role of Chief Executive Officer of the Company effective April 1, 2015, succeeding Mr. Bradley. Mr. Bradley remained an executive officer of the Company as Executive Chairman until his retirement on April 22, 2016. In his role as chief executive officer, in February 2015, Mr. Bradley made recommendations to the Committee on base pay compensation for each of the named executive officers, other than changes in his compensation.

In May 2015, Mr. Grasher resigned as Chief Financial Officer. Mr. Fuller was appointed Chief Financial Officer in September 2015.

Executive Summary

Recent Company Performance Highlights

We are a holding company that markets and underwrites workers’ compensation insurance through our insurance subsidiaries. The Company had strong operating performance during fiscal year 2015, as demonstrated by the following highlights:

In 2015, the Company paid regular quarterly dividends of $0.60 per share and an extraordinary dividend of $3.00 per share. Effective March 2016, the Board of Directors increased the regular quarterly dividend from $0.15 per share to $0.18 per share, an increase of 20%.

Compensation Best Practices

Over the last several years, the Committee has reviewed and modified our executive compensation program in order to not only remain competitive with our peers so we can retain and attract top executive talent to the

Company, but also to ensure that our program is aligned with the interests of our shareholders and meets evolving governance standards The following highlights some of the compensation and governance best practices that are part of our program:

Compensation Program Objectives

Our compensation program is intended to attract, retain and motivate the key people necessary to enable our Company to operate efficientlyeffectively and profitably over the long term. Our Compensationlong-term. The Committee believes that executive compensation should align the interests of the Company’s executives and other key employees with those of the Company and its shareholders. Our compensation program is also designed to differentiate compensation based upon individual contribution, performance experience and tenureexperience with our Company.

In establishing compensation, the Compensation Committee seeks to provide employees, including our executive officers, with a competitive total compensation package. The Compensation Committee sets compensation in this manner to ensure that our compensation practices do not put the Company at a disadvantage in attracting and retaining executives and other employees, while also ensuring a competitive cost structure for our Company.

Compensation Committee

Our compensation program for executives is designed and implemented under the direction of our Compensationthe Committee, which is currently comprised of threethe following four independent directors. Prior to the annual shareholder meeting in 2012, the members of the Compensation Committee weredirectors: Mr. GarciaBrown (chair), Mr. M. Morris, Mr. Phillips and Mr. Traynor. Following the 2012 annual meeting, the Board reappointed members to each of its standing committees. In October 2012, the directors appointed to serve as members of the Compensation Committee were Mr. Garcia, (chair), Mr. J. Morris and Mr. Traynor.Roach. In April 2016, Mr. Brown was appointed Committee chair, succeeding Mr. Garcia. For additional information regarding our Compensation Committee and its authority and responsibilities, see “The“The Board, Its Committees, and Its Compensation—Compensation Committee.”

20122015 Advisory Vote on Executive Compensation

At our annual meeting of shareholders in June 2012,2015, more than 99% of the votes cast in the say-on-pay proposal were in support of our executive compensation program. The Compensation Committee considered the results of this advisory vote and believes the results affirm shareholder approval of the Board’s approach to the Company’s executive compensation program. Accordingly, the Compensation Committee did not adopt any changes to this program as a result of this vote. However, as noted above the Committee is continually evaluating our executive compensation and has made changes in the past few years to strengthen the performance elements of the program and further align the program with our shareholders’ interests.

Compensation SurveysConsultant

In late 2009,Since early 2012, the Compensation Committee interviewedhas engaged McLagan, an AON Hewitt Company, as its independent compensation consultant. Since its engagement, McLagan has conducted three executive compensation consulting firms, including Longnecker & Associates.surveys, the “2012 Survey,” the “2014 Survey,” and the “2015 Survey.” The 2014 Survey, reviewed by the Committee in the fall of 2014, was used in setting compensation for 2015. The Committee interviewed Longnecker based on the recommendation of Austin P. Young, III, a directorpresently intends to conduct executive compensation surveys annually to ensure our executive compensation program is competitive in retaining and chair of our Audit Committee.attracting executive talent. The Committee is solely responsible for the appointment, compensation and oversight of the compensation consultant. The Committee first engaged Longnecker in 2009.

In 2011, the Compensation Committee again engaged LongneckerPursuant to conduct a compensation survey (the “2011 Survey”). The Committee considers factors that could affect Longnecker’s independence, including that LongneckerCompany policy, McLagan provides no other services to the Company. BasedCompany other than consulting services to the Committee. AON, the parent company of McLagan, did provide insurance brokerage services to the Company during 2015 and earned less than $25,000 in insurance brokerage fees from the Company, that are unrelated to McLagan’s compensation advisory fees in 2015.

McLagan attends Committee meetings, when necessary, and in connection with the executive compensation surveys, advises on this review,matters including peer group composition, pay levels and pay composition, and annual and long-term incentive plan design. McLagan also provides market data, analysis, and advice regarding the CEO and executive officer compensation to the Committee has determined Longnecker’s work foras well as director compensation surveys and advice. As required by SEC rules, the Committee was free fromassessed the independence of McLagan and concluded that McLagan’s work did not raise any conflicts of interest.

Risk Assessment

The eightCommittee annually considers the risk to the Company of the design and objectives of its executive compensation plans. The primary risk is weighting the premium growth factor too heavily in the annual and long-term incentive plans. Premium growth at too fast a rate could result in poor underwriting results and ultimately affect the financial strength of the company. The Committee believes the current weighting of the metrics in the annual and long-term incentive plans are appropriately balanced with the other metrics in those plans.

2014 Survey Peer Group Construction and Survey Results

The 2014 Survey compared the compensation for our executive officers against a peer group of 11 publicly traded insurance companies. The 2014 Survey also included a review of the Company’s annual and long-term incentive compensation plan design. McLagan used Company and peer group compensation data for 2013 in its preparation of the 2014 Survey. The Committee utilized the 2014 Survey results in assessing the level of salary and bonuses paid to our executives and approving changes to the compensation levels and annual and long-term compensation plans for our executive officers in 2015.

The 11 companies in the 20112014 Survey were all publicly traded insurance companies, including three companies that, like our Company, derive substantially all of their revenue from the workers’ compensation insurance business. The companies in the 2011 Surveyinsurance industry. The Committee used a rigorous process to select peer companies for benchmarking executive pay. With the assistance of McLagan, the Company selected 11 publicly traded insurers from a list of 23 potential peer companies. The 23 potential peer companies consisted of peers in the prior survey used by the Company, peer companies selected by ISS from its 2013 analysis of the Company, and peer companies suggested by McLagan.

The potential peer companies were then ranked by premiums written, as the Committee believed that was a key indicator of the size of an insurer. The Committee selected peer size criteria of 0.4 times to 2.5 times Amerisafe’s 2013 premiums written as appropriate peers. Potential peer companies that were not primarily in the property casualty insurance business were excluded from the list, as the Committee believed that the Company would not likely recruit executives from those companies.

The Committee then developed a complexity score for each of the remaining potential peer companies. Factors used in developing the complexity score were: number of employees, lines of insurance business, multi-line versus mono-line property-casualty insurer, number of states doing business in, and investment mix. As a result of this scoring a complexity score was produced for each company. The Committee analyzed the complexity scores of each company and compared the score to the AMERISAFE complexity score. Several potential peer companies were excluded for high or low complexity scores when compared to AMERISAFE.

As a result of this analysis, the committee selected the following 11 companies for the executive pay benchmark study to be completed by McLagan, eight of which were included in the peer group are:for the prior survey.

In addition to compensation data specifically relating to the eight11 companies named above, LongneckerMcLagan also used market compensation data from published survey sources relating to companies in the insurance and financial services industry in developing the recommendations contained in the 2011 Survey.2014 survey.

The Compensation Committee considered the 2011 Survey in approving changes to the base salaries paid to our executive officers in 2012. The Committee also reviewed the 2011 Survey to assess the Company’s annual incentive compensation program and to evaluate the total compensation of the named executive officers.

The table below summarizes the 2011results of the 2014 Survey, using the 2013 base salary, targeted total cash compensation and targeted total compensation for each of our named executive officers based on their positions at the time as a percentage of the 50th50^th percentile of the peer company compensation. It also shows how these compensation elements for 2015 compare to the 2014 Survey results, although these comparisons will reflect a more competitive Company pay position than is actually the case today. The 2015 compensation elements for Mr. Bradley and Ms. Frost are reflected in 2011 Survey.at their compensation levels after April 1, 2015, when Mr. Bradley

assumed the role of executive chairman and Ms. Frost became chief executive officer. The results of the 2014 Survey show that the Company’s 2015 total compensation levels are below the market median for the named executive officers.

Role of Management

At the request of the Committee, in February 2015, our then current chief executive officer, Mr. Bradley, made recommendations with respect to changes in base salary for our executive officers for 2015.With respect to the 2015 annual incentive compensation plan, Ms. Frost made recommendations regarding the level of achievement of individual performance goals by each executive officer other than herself, and Mr. Bradley made recommendations regarding Ms. Frost’s individual performance under the plan. Although the Committee considered the recommendations of Mr. Bradley and Ms. Frost, the Committee makes all final determinations regarding executive compensation.

Components of Executive Compensation ProgramsProgram and Policies2015 Results

The principal components of our executive compensation program provide for a combination of fixed and variable compensation. In addition to the principal components, we also provide our executive officers with broad-based employee benefits, certain severance benefits and limited perquisites. As described in more detail below, these principal components, which we refer to as our executive officer’s total direct compensation are:

The tables below highlight the annual base salary for each of our named executive officers as of the end of 2015, and the target award value of the 2015 annual incentive compensation and long-term equity-based incentive compensation;compensation granted to our named executive officers during 2015, as well as the percentage of total target compensation represented by each component. The actual base salary received, the actual annual incentive compensation award earned for 2015 and the long-term incentive compensation grant date value is also reflected in “Executive Compensation—Summary Compensation Table,” which also includes certain other components of compensation.

Base Salary. Base salaries are determined on the basis of management responsibilities and level of experience, and tenure with our Company, as well as internal and market comparisons. In setting base salaries for our executive officers, the Compensation Committee seeks to provide a reasonable level of fixed compensation that we believe is competitive with base salaries for comparable positions at similar companies. In February 2012,As a result of the Compensationtransition in April 2015 in the chief executive officer position, Mr. Bradley’s base salary was set at 75% of his base salary for 2014, in his new role as Executive Chairman. The Committee revieweddetermined that this reduction was appropriate given the 2011 Surveyreduced responsibilities of the executive chairman position while also recognizing the importance of the role of mentoring the new chief executive officer. Ms. Frost’s increase in base salary was in recognition of her new responsibilities as it relatedchief executive officer. The increase in the base salaries for Mr. Gagliano and Mr. Grasher was based on the decision of the Committee to continue to adjust their base compensation closer to the market median.

The following adjustments were made to the base salaries of our executive officers. Based on this review, the Compensation Committee reconfirmed its decision initially made in 2009 to target the 50th percentile of base salaries for comparable executive positions at the peer companies, with the goal of reaching the appropriate levels incrementally over several years.

In determining base salary, the Compensation Committee also takes into account factors such as local cost of living, regional lifestyle and corporate environment. At the request of the Committee, Mr. Bradley, our chief executive officer, makes recommendations annually with respect to changes in base salary for ournamed executive officers other than changes in his compensation. Neither our chief executive officer nor any other executive officer participates in the Committee’s decisions regarding the base salaries of our executive officers.effective March 2015.

Annual Incentive Compensation. The Compensation Committee believes that annual incentive compensation is a key element of the total compensation of each executive officer. The Compensation Committee also believes that placing a significant portion of executive compensation at risk each year, subject to the results of Company and individual performance, appropriately motivates executives to achieve the Company’s financial and operational objectives,

thereby enhancing shareholder value. As an executive or other key employee progresses to greater levels of responsibility within the Company, the Compensation Committee believes that the annual incentive awards should represent an increasing portion of total potential cash compensation.

For 2012,2015, the Compensation Committee implemented a plan substantially similar to the annual incentive plan used for the past several years, except that the Committee establishedincluding a threshold level of performance for the quantitative Company performance goals. In prior years, the Company had established only a target and a maximum. Under the annual incentive plan, cash awards are made based on achievement of Company financial and operational objectives and individual performance goals.goals, and the target award is a percentage of the executive’s base salary (which is pro-rated to reflect salary changes during the year).

2015 Annual Incentive Compensation. In establishing financial and operational objectives,February 2015, the Committee approved objectivestarget award opportunities under our annual incentive compensation plan for each named executive officer. The Committee set the 2015 target awards for each executive, with the exception of Mr. Bradley and Ms. Frost, at the same levels that were set for 2014, based on the 2014 Survey that showed that these target award levels were competitive to the median of the peer group at the time. When setting the target awards for Mr. Bradley and Ms. Frost, the Committee considered Mr. Bradley’s announced intention to retire and Ms. Frost’s assumption of the chief executive officer duties and responsibilities beginning in April 2015. The Committee believed the target levels were appropriate given that base salary levels were all lower than the peer median.

For 2015, the Committee established Company performance goals under the following metrics: GAAP loss ratio (“LR”), GAAP expense ratio (“ER”), GAAP gross premiums written (“GPW”) and GAAP return on average equity (calculated(“ROE”). The Company performance goals are the same for each of our executive officers, however the goals were weighted differently for each executive officer based on a GAAP basis), gross written premium and net combined ratio. Although the CompensationCommittee’s assessment of each executive’s ability to influence the outcome of the particular objective. The Committee has retained discretion in paying incentive awards, it hasalso established target awardsindividual performance goals for each executive officer, including our chief executive officer. The individual performance goals established were principally qualitative rather than quantitative. The weighting of 100% of base salarythe individual performance goals for our chief executive officer, 70%Ms. Frost, are lower because the Committee believes that her performance should be evaluated primarily on the outcome of Company quantitative metrics. The Committee believes that this approach appropriately incentivizes the chief executive officer to focus her efforts on the financial performance of the Company.

The following table sets forth the target award opportunity for each named executive officer and the corresponding target percentage of base salary represented by each Company performance goal and the individual performance goals for our president and chief operating officer, and 60% of2015.

The following table sets forth the performance goals established under the Company metrics for each of our other executive officers. In setting these target awards, the Compensation Committee considered that these targets were higher, on a percentage basis, than target awards reflected in the 2011 Survey. The Compensation Committee also noted that the total cash compensation (base salary and2015 annual incentive compensation opportunity)plan and the results achieved.

For each Company performance metric, no amount is earned if the threshold performance goal is not achieved. If the threshold is achieved, the executive officers are eligible to earn from 50% to 150% of the portion of the target bonus tied to that metric, with the award for that metric determined by the amount by which the Company exceeded the threshold performance.

As with the Company performance metrics, each named executive officer could earn between 0% and 150% of the target individual goals based on the level of achievement of the applicable goals. The committee determined the achievement levels of individual performance goals under the 2015 annual incentive plan for all executive officers, considering the recommendations of Mr. Bradley and Ms. Frost for the executives other than themselves. The Committee awarded Mr. Bradley and Ms. Frost, the maximum award of 150% for their individual performance awards in 2015. In determining their awards, the Committee considered the extraordinary financial results of the Company for 2015 and the smooth transition to a new executive management team for the Company.

At its meeting in February 2016, the Committee approved annual incentive award payouts for our named executive officers was nearrelated to the 50th percentile, with one exception.Company performance goals as follows:

The total annual incentive award payouts for our named executive officers for 2015 were as follows:

Long-termLong-Term Incentive Compensation. ThreeThe Committee intends to make LTIP awards on an annual basis, but may adjust the performance factors, the weighting of our executive officers, including our chief executive officer, were employed bythose factors, the Company atmix of performance-based and time-based awards and other aspects of the timeLTIP as it evaluates the effectiveness of our initial public offering in 2005the program over time. The following beliefs and received significant stock option grants at that time. Those awards vested ratably over five years and fully vested in November 2010. These executive officers have not received additional option grants since the initial public offering. Since our initial public offering, we have made limited option grants to new executive officers. No stock options or other equity awards were made in 2010 or 2011 to our executive officers.

Beginning in July 2011, the Compensation Committee began to develop a new long-term incentive compensation program, or LTIP, to both reward performance and to encourage executives to remain with the Company. In reviewing the 2011 Survey,objectives guide the Committee noted that the Company’s total compensation was below, and for some positions significantly below, the 50 percentile reflected in the 2011 Survey. The Committee was concerned that the Company’s compensation program could adversely affect the Company’s ability to attract and retain executives due to the significantly lower levels of targeted total compensation of the Company’s executives as compared to the compensation reflected in the 2011 Survey, principally from the lack of a long-term incentive program.implementing our LTIP each year:

In designing the LTIP, the Committee believed that the

In March 2012, our Compensation Committee approvedUnder the LTIP, target awards are established annually for each executive officer based on a new LTIP with two components.percentage of the executive’s base salary. The first componenttarget award is made through one or both of the following types of awards: a performance-based award and a time-based award, although a majority of the total LTIP value awarded to each executive is delivered in the form of the performance-based award . The performance-based award is payable in shares of common stock, subject towith the number of shares determined based on the Company meetingachievement of certain quantitative targets measured over a three-year performance period. The second componenttime-based award is comprised ofrepresented by restricted stock that vests on the third anniversary of the grant date, conditioned on continued employment with the Company. Awards under the LTIP are made pursuant to our shareholder-approved 2012 Equity and Incentive Plan, which was approved byCompensation Plan.

For 2015, all of our shareholders at our annual meeting in 2012.

Under the LTIP, target awards are established annually based onexecutive officers, except Mr. Bradley, received both a percentage of each executive officer’s base salary. The awards partially vest upon death, disability, retirement (for performance-based awards only) or a termination of employment without cause or for good reason following a change in controlaward (representing 55% of the Company. These awards do not vest solely upontotal target value) and a change in control. To qualify for partial vesting upon retirement, an executive officer must be at least age 60, have 10 or more yearstime-based award (representing 45% of service with the Company and not have acceptedtotal target value). Because Mr. Bradley, our Executive Chairman, received a substantial employment or consulting arrangement with another company engaged in the workers’ compensation insurance industry. As described below, all LTIP awards are subject to possible reimbursement in the event of a financial statement restatement and are intended to be governed by the incentive compensation recovery regulations to be established by the SEC under the Dodd Frank Act.

For those executives that received significant stock option awardsaward in our IPO in 2005, his LTIP awards in 2012 werehave been comprised solely of performance-based awards. Those executive officers who did not receive significant option awards in the IPO received a combination of performance-based awards and time vested restricted stock. The Compensation Committee made LTIP awards in this manner because the Committee believes that use of time-based restricted stock with three-year cliff vesting serves an important retention function. Additional information regardingfunction for newer executives, and also provides an immediate alignment with shareholder interests.

The 2014 Survey reaffirmed the importance of the LTIP in making the Company’s executive compensation program competitive with peers. McLagan also reviewed the design of the LTIP and advised the Committee that the plan design provided appropriate performance and retention incentives for executive management.

2015 Long-Term Incentive Compensation. In 2015, the Committee set an aggregate target value, which was a percentage of salary, for the 2015 LTIP awards for each named executive officer at an amount generally below the market median for the long-term compensation component of pay as shown in the 2014 Survey.

The following table sets forth the target value of the performance-based awards and the restricted stock awards that were approved by the Committee under the 2015 LTIP.

Description of 2015 Performance-Based Awards. The performance-based awards provide a target dollar amount that may be earned by the executive, which amount will be paid in shares of our common stock, subject to certain limited exceptions. The amount earned under the performance-based award may be less than or greater than the target value set in the award. However, in no event may an executive receive more than 150% of the target value under this performance-based award. The actual amount, if any, that an executive will earn under the performance-based award is dependent on the Company’s operating performance over a three-year period beginning on January 1, 2015 and ending December 31, 2017, relative to the performance of a designated peer group of insurance companies selected by the Committee. In 2015, the Committee reviewed the peer group selected in 2014 and confirmed that the companies selected continued to be significant competitors of the Company in the workers’ compensation markets in which it operates. This group differs from the peer group used in the 2014 survey, which is made up of publicly-traded insurance companies for use in benchmarking executive pay levels. The 22 companies selected as the performance peer group for the 2015 performance-based awards under the LTIP were:

•    Builders Mutual Insurance Company		•    National Interstate Corporation
•    Cincinnati Financial Corporation		•    Sentry Insurance
•    Donegal Insurance Group		•    West Bend Mutual Insurance Company

The Committee selected three metrics to measure the Company’s operating performance under the 2015 performance-based awards: combined ratio (“CR”), direct premiums written (“DPW”), and total return on invested assets (“TROIA”), each determined on the basis of statutory accounting principles used by insurance companies (including the Company) in filings made with state regulatory authorities. The Committee selected these measures as they were deemed to be significant benchmarks to the successful performance of the Company.

Relative Weighting of Performance Measures for each Executive.The relative weighting for each of the performance measures was determined by the Committee in consultation with the then current chief executive officer, Mr. Bradley, and differ for each executive based on the primary responsibilities of the executive. The following table shows the relative weighting for each executive officer for each performance measure applicable to the 2015 performance-based awards:

Threshold Basis Points used in Calculation of Awards.In designing the performance-based award under the LTIP, the Committee recognized that the Company had demonstrated outstanding operating performance and consistently outperformed the workers’ compensation industry, including the peer companies listed above. As a consequence, the Committee’s award design considered this historical performance when determining the level of performance that would result in maximum payout under the performance-based awards. The Committee incorporated into the calculation of the award the concept of threshold basis points (“TBP”). TBP is the amount by which the Company’s performance for each measure must exceed the results of the performance peer group for the payout of that measure to equal two times the target level. The overall award is limited to 150 percent of the target compensation. TBP is expressed in basis points (“BP”). The first step in the calculation of the award is to compare the 2015 performance of the Company to that of the 22 companies in the peer group for the three measures (CR, DPW, TROIA) and to determine whether the TBP level for each measure has been achieved. The TBP for each measure in 2015 were as follows:

Reduction Based on Total Shareholder Return. Following a determination of the payout level based on the metrics described above, the payout is reduced if the total shareholder return (“TSR”) of the Company is more than 500 basis points lower than the total shareholder return of the average of 50% of the S&P Property Casualty Insurance Small Cap Index and 50% of the S&P Property & Casualty Insurance Mid Cap Index over the three-year period. The TSR measure cannot increase payouts under the awards, but is only used to reduce the payout when the Company TSR lags the index by more than 500 basis points. The TSR measure operates as a fourth metric in the award design and reduces the payout factor 37.5 points for every 500 BP of underperformance. The Committee believes this negative weighting aligns the interests of shareholders with that of our executive officers.

Payments under each performance-based award will be made in shares of common stock (rounded to the nearest whole share) equal to (a) the amount earned under the award divided by (b) the volume weighted trading price per share of common stock for the 10 trading days immediately preceding the date the value of the award is approved by the Committee.

2012 – 2014 Payout of Performance Based Awards.The following table sets forth the performance measures established under the Company’s 2012 – 2014 Long Term Incentive performance plan and the results achieved. The 2012-2014 LTIP bonus was distributed to Company executives in May 2015.

For the Company’s 2012-2014 Long-Term Incentive Award the following payment under the 2012 Equity and Incentive Award agreement was made in 2015:

Current Estimates of Potential Payout Value of Outstanding Performance-Based Awards. The following table shows the estimated potential payout “value” of the performance-based awards granted in 2012 is included below under2013, 2014 and 2015 as of September 30, 2015, based on the caption “2012 Compensation—Long–Term Incentive Compensation.”most current information available to the Company. These estimated values are presented for information purposes only, as the actual payout values will be determined following the end of the respective performance periods and will be impacted by the Company’s performance during the remainder of the performance periods.

Because of the timing of when information becomes available regarding the peer group performance, the Committee intendsexpects awards for the 2013-2015 performance period will be determined late in the second quarter of 2016.

Special Restricted Stock Awards for Mr. Fuller. In addition to makethe regular LTIP awards, on an annual basis. Theduring 2015, the Committee also expects to closely monitor this long-term compensation program. In future years, the Compensation Committee anticipates that it will adjust the performance factors, the weighting of those factors, the mix of performance based and restricted stock awards and other provisions of the LTIP as it evaluates the performance of this program.

The Compensation Committee does not havemade a specific policy addressing the cumulative value of prior equity awards in making future awards. However, our Compensation Committee intends to continue to make appropriate executive compensation decisions annually, so that our executives receive a total compensation package that is both competitive, and has a significant portion of compensation at risk. The increase in the valuespecial, one-time grant of restricted stock awards is directly linked to an increaseMr. Fuller in shareholder return,connection with recruiting him as the Company’s chief financial officer in September 2015. This special grant was not part of our regular LTIP, and unvested awards are conditionedwas granted in part to recruit Mr. Fuller. Unlike the restricted stock granted under our LTIP, which vests on continued employment. The payment under any performance-based awards is tiedthe third anniversary of the grant date, this award vests in five annual installments on a graduated basis of 10%

on the first anniversary of the grant date, 15% on the second anniversary of the grant date, 20% on the third anniversary of the grant date, 25% on the fourth anniversary of the grant date and 30% on the fifth anniversary of the grant date. This award will also assist Mr. Fuller in maintaining his required level of stock ownership, and will serve as a retention tool due to the Company meeting or exceeding quantitative performance objectives. The Committee believes, as a general matter, that positive results with respect to prior incentive awards should not negatively impact future compensation decisions.extended vesting periods. This special award is reflected below under“Executive Compensation—Grants of Plan Based Awards.”

Employee Benefits. We do not provide our executives or other employees with defined pension benefits,benefit pensions, supplemental retirement benefits, post-retirement payments or deferred compensation programs. We do provide a 401(k) defined contribution plan that is available to all employees. We match 50% of employee contributions up to 4% of compensation for participating employees, subject to limitations under applicable law. Our executives and other employees are fully vested in Company contributions tounder this plan after five years. We also provide health, life and other insurance benefits to our executives on the same basis as our other full-time employees.

Severance and Change-in-Control Benefits. We have employment agreements with each of our executive officers. With one exception (for our president), theseThese employment agreements provide each executive officer with severance compensation consisting of cash severance payments paid in monthly installments and continued health benefits for a period of 12 months (18 months for our chief executive officer), in the event that an executive’s employment is terminated by us without cause or by the executive under certain circumstances. The cash severance payment for the covered executives (other than our chief executive officer) is an amount equal to the officer’s then current annual base salary plus the average of the three most recent annual incentive bonuses

received by the executive. For our chief executive officer, the cash severance payment is one and one-half times the amount described in the preceding sentence. These employment agreements also provide that the terminated executive will not engage in activities that are competitive with our business for 12 months (18 months for our chief executive officer). Under theMr. Bradley’s employment agreement with our president, the terms are the same as those with our other executive officers except that the time period for severance compensation and continued benefits is the lesser of 12 months or through December 31, 2014.expired on April 22, 2016. For additional information regarding the employment agreements with our executives,his agreement, see “Executive Compensation—“—Employment Agreements.”Agreements” below.

The CompensationLTIP awards partially vest upon death, disability, retirement (for performance-based awards only) or a termination of employment without cause or for good reason following a change in control of the Company. The partial vesting is still conditioned upon the performance measures. These awards do not vest solely upon a change in control. To qualify for partial vesting upon retirement, an executive officer must be at least age 60, have 10 or more years of service with the Company and not have accepted a substantial employment or consulting arrangement with another company engaged in the workers’ compensation insurance industry.

The Committee believes that these benefits are necessary and appropriate in order to attract and retain qualified executive officers as these benefits are generally made available by other companies. In addition, the Compensation Committee recognizes that it may be difficult for our executive officers to find comparable employment in a short period of time. Therefore these benefits, particularly the severance payments, address a valid concern, making an executive position with our Company more attractive. These issues are particularly significant to us, given that our corporate headquarters is not located in a major metropolitan area and it is unlikely that our executives could secure comparable employment without relocating to another city. The Company does not provide excise tax gross-ups under any change in control arrangement.

Executive Perquisites. Executive compensation also includes a limited number of perquisites that have historically been provided to our executives and that the Committee believes enhance our ability to attract and retain qualified executives. These perquisites include car allowances, disability insurance and reimbursement for annual medical examinations, and limited club memberships.examinations. Our executive officers are also permitted to accrue unused vacation on a more favorable basis than that available to other Company employees. Our executive officers are permitted to accrue up to 200 hours of vacation, a limit slightly higher than the 180 hour maximum available to employees with more than ten years of service. The Compensation Committee believes that this policy is appropriate given that the management responsibilities of our executive officers often do not permit them the flexibility to use their vacation time on an annual basis. The Company does not provide tax gross-ups on these perquisites or additional benefits. For additional information regarding perquisites provided to our executives, see “Executive“Executive Compensation—All Other Compensation.”

Compensation-Related Policies

Clawback Policy. The Committee has adopted a formal policy (“Clawback Policy”) regarding recovery of incentive awards for fiscal years for which financial results are later restated. The Clawback Policy applies to the Company’s annual and long-term incentive compensation awards. Under this policy, the Committee will consider any financial statement restatement in exercising its discretion in connection with determining the payout of incentive and other compensation awards for executives in the periods following such a financial statement restatement.

Stock Ownership Guidelines. The Compensation Committee has approved stock ownership guidelines for our executive officers. The target ownership for our chief executive officer is a dollar amount equal to three times hisher average base salary and annual incentive bonus for the three immediately preceding calendar years. The target ownership for each of our other executive officers is a dollar amount equal to two times their average base salary for the three immediately preceding calendar years (or, if less, all complete calendar years employed by the Company). All forms of Company equity, whether vested or unvested, including common stock, restricted stock, and stock options, are counted for purposes of determining compliance with the ownership guidelines.

In determining whether an executive meets the applicable guideline, the value of shares of common stock, including restricted stock and shares purchased by executives in the open market, is based on the closing price of our common stock on the last trading day of the most recent calendar year. In addition, the value of stock options is equal to the greater of (a) the value of the award on the grant date calculated in accordance with the Black-Scholes-Merton option pricing model, and (b) the difference between the applicable exercise price and the closing price of our common stock on the last trading day of the most recent calendar year.

Until an executive officer meets the ownership target provided under the guidelines, he or she is required to retain all shares received under the Company’s compensation plans, except for shares sold to pay the exercise price, if any, and to satisfy tax obligations. After an executive meets the applicable guideline, he or she is required to retain 20% of any shares obtained as the result of exercising a stock option, or vesting of a restricted stock award or payout of an LTIP performance award, net of shares sold to pay the exercise price, if any, and to satisfy tax obligations.

The following table sets forth for each named executive officer the applicable stock ownership guideline and equity ownership as of December 31, 2012,2015, measured in dollars, using the guideline methodology described above. As noted in the table, each of our named executive officers employed by us as of the end of 2015 exceeds his or her ownership guideline.

No Tax “Gross-Up” Payments. We do not provide, and no executive officer is entitled to receive, any tax “gross-up” payments in connection with compensation or other benefits provided by the Company.

Internal Revenue Code Section 162(m). Section 162(m) of the Internal Revenue Code provides that compensation in excess of $1 million paid to the chief executive officer or to any of the other three most highly compensated executive officers (other than the chief financial officer) of a public company is not deductible for federal income tax purposes unless the compensation qualifies as “performance based compensation.” The performance-based awards granted underas part of the 2012 Incentive Plan2015 LTIP and the portion of the 2015 annual incentive award based on quantitative Company performance goals are intended to qualify as “performance based compensation.” The Compensation Committee reviews on an annual basis the potential impact of this deduction limitation on executive compensation.

Impact of Prior Awards on Future Grants. The Committee does not have a specific policy addressing the cumulative value of prior equity awards in making future awards. However, our Committee intends to continue to make appropriate executive compensation decisions annually, so that our executives receive a total compensation package that is both competitive, and has a significant portion of compensation at risk. The Committee recognizes the increase in the value of restricted stock awards is directly linked to an increase in shareholder return, and unvested awards are conditioned on continued employment. In addition, the payment under any performance-based awards is tied to the Company meeting or exceeding quantitative performance objectives. As a result, the Committee believes, as a general matter, that positive results with respect to prior incentive awards should not negatively impact future compensation decisions.

Dodd Frank Act.The Board and Compensation Committee have discussed the requirements of the Dodd Frank Act, including the provisions relating to the recovery of incentive compensation for fiscal years for which financial results are later restated.restated (see “—Clawback Policy”). The SEC has not issued final regulations implementing these provisions of Dodd Frank. In 2012, the Compensation Committee adopted a policy for the recovery of incentive awards in the event the Company is required to file a restatement of its financial statements with either the SEC or any state insurance authority. This policy is incorporated in both the annual and long-term incentive compensation award agreements with each of the Company’s executive officers, for awards granted subsequent to the adoption of the policy. The Compensation Committee expects to modify this policy once the SEC issues final regulations with respect to the recovery of incentive compensation under the Dodd Frank Act.

2012 Compensation

Base Salary. As discussed above, the Compensation Committee has determined to target the 50th percentile of base salaries for comparable executive positions, as reflected by the 2011 Survey, for the base salaries of the Company’s executive officers. The Committee has established a goal of reaching the appropriate levels incrementally over a period of years. In making adjustments to base salaries, the Compensation Committee also evaluates internal pay equity and uses its subjective evaluation of overall performance and contributions of the executives in the prior year.

As a result of its review, the Compensation Committee determined that the base salaries of our named executive officers were generally below the 50th percentile. The Compensation Committee also recognized that

the base salary of our chief investment officer is the lowest of all of our executive officers. As a result of these factors, the Compensation Committee approved a base salary increase for our chief investment officer that was greater on a percentage basis than the base salary increases approved for our other named executive officers.

Applying that criteria, the following adjustments were made to the base salaries of the named executive officers:

2012 Annual Incentive Compensation. In March 2012, the Compensation Committee approved target award opportunities under our annual incentive compensation plan for each named executive officer. The target awards were set at a percentage of the individual officer’s base salary and were subject to achievement of Company and individual performance goals. The Compensation Committee established the same Company performance goals for each of our executive officers. However, the performance goals were weighted differently based on the Compensation Committee’s judgment with respect to the executive’s ability to influence the outcome of the objective. The Committee also established individual performance goals for each executive officer, including our chief executive officer. The individual performance goals established were principally qualitative rather than quantitative.

The following table sets forth the target award opportunity for each named executive officer and the weighting of Company and individual performance goals.

The weighting of performance goals for our chief executive officer differs from the weighting for the other named executive officers because the Compensation Committee believes that incentive compensation paid to our chief executive officer should be based more heavily on his performance in meeting his individual goals, including leading the Company, than achieving specified Company performance goals. The Compensation Committee believes that this approach appropriately incentivizes the chief executive officer to focus his efforts on the long-term performance of the Company.

The following table sets forth the Company performance goals established under the 2012 annual incentive compensation plan and the results achieved.

For each Company performance goal, no amount is earned if the minimum performance is not achieved. If the minimum is achieved, the executive officers are eligible to earn from 50% to 150% of the portion of the target bonus tied to that goal, with the award for that goal determined by the amount by which the Company exceeded the minimum performance.

Achievement of individual performance goals was determined for each of our named executive officers, other than those of our chief executive officer, by the Compensation Committee with input from our chief executive officer. The Compensation Committee evaluated the performance of our chief executive officer based on its assessment of his achievement of individual goals and his overall performance in leading the Company during 2012.

At its meeting in February 2013, the Compensation Committee approved annual incentive award payouts for our named executive officers as follows:

Our named executive officers received a portion of their annual incentive as a result of exceeding the minimum for the net combined ratio goal, meeting the target for the return on average equity goal and exceeding the maximum with respect to the gross written premium goal. In assessing awards levels, the Committee also considered the level of achievement of individual performance goals by each executive.

2012 Long-Term Incentive Compensation. In March 2012, a subcommittee of our Compensation Committee granted LTIP awards to our then executive officers in the form of performance-based awards and time- vested restricted stock. The LTIP awards are governed by the 2012 Incentive Plan and the award agreements evidencing those awards. The Committee set target awards for each named executive officer at an amount (on a percentage basis) less than the median award reflected in the 2011 Survey. The Committee considered this approach to be prudent given that the LTIP was new and that target awards could be adjusted in future periods to gradually attain a total compensation opportunity closer to the 50th percentile.

All five of our executive officers received performance-based awards. These awards provide a target amount that may be earned by the recipient, which amount will be paid in shares of our common stock, subject to certain limited exceptions. The amount earned under the performance-based incentive award may be less than or greater than the target value set in the award. However, in no event may a recipient receive more than 150% of the target value under this performance-based award. The actual amount, if any, that a recipient will earn under their performance-based award is dependent on the Company’s operating performance over a three-year period beginning on January 1, 2012 and ending December 31, 2014, relative to a designated peer group selected by a subcommittee of our Compensation Committee, using the following insurance statutory accounting metrics: combined ratio, growth in direct premiums written and total return on invested assets. The payout of these performance-based awards will be reduced if the total shareholder return of the Company is more than 500 basis points lower than the total shareholder return of the S&P Property Casualty Insurance Index over the three-year period.

Payments under each performance-based award will be made in shares of common stock (rounded to the nearest whole share) equal to (a) the amount earned under the award divided by (b) the volume weighted trading price per share of common stock for the 10 trading days immediately preceding the date the value of the award is approved by a subcommittee of our Compensation Committee.

Two executive officers also received restricted stock awards under the 2012 LTIP. Subject to certain exceptions, the restrictions applicable to the shares awarded will lapse so long as the recipients continue to remain employed by us until March 22, 2015, the third anniversary of the date the Compensation Committee approved these awards.

The following table sets forth the performance-based awards and restricted stock awards that were made by a subcommittee of our Compensation Committee under the 2012 LTIP in March 2012. In setting the target value of these awards, the Compensation Committee considered the total compensation opportunity at the 50th percentile as reflected in the 2011 Survey. Those awards were made subject to the approval of the 2012 Incentive Plan at the annual meeting of shareholders held in June 2012. The shareholders approved the 2012 Incentive Plan at that meeting.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis. Based on that review and discussion, the Compensation Committee recommended to the Board of Directors of the Company that the Compensation Discussion and Analysis be included in the Company’s 2012 Annual Report on Form 10-K for the year ended December 31, 2015 and this proxy statement.

This report is submitted by the members of the Compensation Committee of the Board.Board named below, who received, discussed with management and recommended that this Compensation Discussion and Analysis be included in the Company’s Annual Report.

Members of the Compensation Committee

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table provides certain information regarding the compensation of our chief executive officer, our chief financial officer and the three other most highly paid executive officers for the years ended December 31, 2012, 2011,2015, 2014, and 2010.2013.