AMSF - Earnings call 3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the AMERISAFE 2022 Third Quarter Earnings Conference Call. Today's conference is being recorded.

At this time, I'd like to turn the conference over to Kathryn Shirley, Chief Administrative Officer. Please go ahead.

Kathryn Shirley

Good morning, and welcome to the AMERISAFE 2022 Third Quarter Investor Call.

received at release, amerisafe.com. not on is have website our you the it earnings available If This is call being recorded. A be replay available. will of today's call earnings to are Details the release. the how on access in replay

Securities risks, in be of uncertainties not these do current assumptions making and the during During call, These or factors based or that filings incorrect and Form various statements. we expressed and duty subject and in be any uncertainties. prove other any factors, undertake may in forward-looking expectations the other Form call this our from forward-looking Actual today's the assumptions comments update and Exchange including discussed result results statements results will the and statements underlying of Commission. this section in earnings statements. are and XX-Q to to release, We Factors to if risks XX-K, the are on as differ the Risk reports implied made with materially

will I call Frost, Janelle CEO. to President over and AMERISAFE's turn now the

G. Frost

Thank morning, like opportunity this take Andy everyone. new virtually you, welcome good to to Omiridis, I'd our and Kathryn, CFO.

announced, Andy been with retirement. team as in joined September working to and he has transitions the Neal previously As

So Andy. welcome,

Moving on quarter. to the

inflation to be year with prior primary the up with period We interest development, primarily of to and current rates an written significantly payrolls, last X.X% an quarter XX.X%. an the in quarter's operating is higher to this our are due favorable up premiums. XX.X% the the increase pleased same investment for ROE Wage supported premium. from and premium Premium consecutive second for payrolls with were The quarter reporting written year. driver results, combined audit up due continues income by ratio strong quarter's audit net results

which accounts In maintaining of retaining we renewal. for operational were effectiveness, in offered we the successful XX.X% our

count third ELCM, Overall quarter headwinds Our the XXX, we continued to the face to competitive our identical policy of was overall pricing, down as XXXX. in was measured as marketplace. by

our retain and new We business. policyholders for compete successfully are to well positioned

we our of continue the growth. new during for translate new of This the measures reported less in from is we rates prevention payrolls A critical percentage number any XX% their claims workers. closely evaluate year in workers turnover differentiators of this attributable as underwriting trend primarily new accident training, to addition, tenure. well visits In growth given The claims. future to more workers is quarter to audit professionals are with our by and on-site reported Over smaller and driven X growth see safety typically premium. wage bodes year in a monitor Job workers are injuries risk are or evaluations. to of

quarter development the primarily losses, prior million accident we XXXX. of XXXX favorable $XX.X with year in through Continuing from years experienced

For our at within is and the Frequency quarters. ratio for XX%, XXXX accident same time, the year year current the expectations. was X severity accident from year, accident loss down in first was unchanged point current the from

The company's shareholders dividend. excess long-term the reflects Before create This of share special excellence of per deploy shareholders. special XXXX. Andy, shareholder dividend Board commitment December operational record to discuss of of return to and $X call seeking to dividend value turning shareholders to declared want over to Directors as I the capital capital to our X, the a for by and

Andy. the over turn to call I'll now

Anastasios Omiridis

good to Thank everyone. you, morning and Janelle,

in by securities or was with $XX.X third primarily reported For diluted million our share year's $XX.X of $X.XX the $X.XX compared year's net or equity share net AMERISAFE XXXX, million last in quarter. third last declines larger in diluted per The income compared income driven decline third of per to quarter. quarter

cases. closed amount year's of development development favorable quarter third larger a included case last Additionally, from favorable reserve

came Revenues for net $X.XX was third share, quarter million in million increased at per of third X.X% million in share in last by in a million XXXX. $X.X $XX.X by compared securities, losses premiums unrealized lower. $XX.X Operating the the $XX.X million earned $XX last quarter or quarter third Net $X.XX with $XX.X decrease quarter, or million year. equity income to in from per with premium. compared year's audit primarily on were driven the Impacted revenues million $XX.X

$X to million income of bank accounts The rates driven higher third on increased as income yields by third XX.X% the quarter as compared million investment $X Net in portfolio. to XXXX. securities. increase in funds money Turning well investment was our quarter fixed reinvestment and the on market with

During the first than XXX on X sold basis portfolio. the securities approximately the was of or investments new months maturing higher yield of the out year, our points

this continue. trend expect We to

securities yield X.XX% tax on end our portfolio ago. the X.XX% over points The in year during was The gains equivalent quarter pretax Realized XX the portfolio quarter, loss from quarter third to X minimal end XXXX. on yield for of at of investment up the the third the the ago. from of basis quarter, year saw X was a compared the at $XXX,XXX portfolio X.XX% up on also the

X% comprised in XX% X% Approximately portfolio and portfolio carrying munis, investments. high securities bonds, equity agencies, which bond and held-to-maturity in of is the XX% in quality, taxable XX% with is of and of duration an XX% investment other X.XX years. cash composition securities. portfolio average rating The in in The of includes in credit treasuries -AA corporate a the X% bonds, municipal is

quarter profit-sharing increase to commission. a other a quarter The and quarter treaty reinsurance compared in in last of from underwriting were the the million with $XX.X the in year's in third due benefit total Our primarily million XXXX. $XX.X quarter was expenses reported third

with in $X.X underwriting benefits, XXXX ratio $X.X the quarter salaries for million million third XXXX. quarter included By was in compared and and and XX.X% of $X.X XX.X% expense of Xrd Our the million the costs. commissions quarter expenses category, other of

XX.X%. and the ROE XX%, was XXXX quarter of was for Return for operating quarter equity on the third

Moving on to capital management.

of with dividend of Board remaining would to the in per share a As quarterly in purchases. I like They're price the an repurchasing for repurchase $X.X including declared Directors. as on million commissions at shares an by authorization of $XX.XX. share future focus of total for $XX.X average of is XXXX What the special our Janelle share discussed, additional XX, September million $X

finally, Form at a we SEC October couple filing Book XXXX, And finally, share $XX.XX, after at tomorrow, September just of XXXX. other X.X% market with was topics. $XX.XX close. XXXX And be the XX, value will our XX-Q XX, from per down year-end

question-and-answer would That concludes We Operator? like to my up remarks. the for the session. call open

Operator

our And from come first Mark Truist. Instructions] will question [Operator Hughes with

Mark Hughes

-- I payrolls in say, growth premium suggests months pretty looking that you're to suggest strong. at be as the time, X it outlook outlook, good The it audit premium this seeing did as audit think continue ago? you Is

G. Frost

is growth growth quarters. should that we this payroll to -- wage and quarter that Overall or over clarify, and are The saw reported again, is last this few we've I wage the these us stronger this growth than quarter. the -- experienced were payrolls

to new reported quarter, XX.X% on the this activity us was is about so basis. of for been they've an that months X.X% And employees. payroll So overall prior, grew

growth last quarter, which wage component reported is was than we So X%. which around XX%, the higher was itself

Mark Hughes

Yes.

loss a from And gave the Okay. perspective, cost us ELCM. then you

steady. like it's Sounds

G. Frost

Yes.

Mark Hughes

the what update have cost seeing loss of terms kind in on you're trends? of the Do you

G. Frost

the Yes. continue The loss cost quarter. for trends down still

pretty for it On XX% what down, which down reported with second line we much quarter is or XX.X% the as in was the average, well.

not So positives we're seeing But decreases. a the we're way there's not not to net seeing other this, we're -- either. increasing say hand, on seeing

Mark Hughes

some There's anything about And been medical talk the on you front? other in then inflation Yes. do lines. What see? that

G. Frost

itself experiencing reasons. eye keep our medical or on think on. its much of close about Yes. that eventually field a inflation. costs, rate. We way compensation rather it's we're all the anecdotally, When medical into updating Certainly not eye about something how states we into we particular costs. Medicare loss keeping wage Meanwhile, that and either We workers' in that for think hear their works the a built schedules is couple the system via the do

really claims of to using is think we'll cost it get that just the I the side. they're the front pricing terms discretionary in place on So in compensation probably of first workers' experiencing companies see

been of its something way hasn't we updates of cost it's schedules, it's that course, But to so actual fee closely of but And to it make there into we're And the happening. as something loss that monitoring. anticipate that themselves. lot a for rates takes yet, the the while a or

Mark Hughes

you and it What's could maybe see trajectory the that on -- fee in that lag is how schedule, starts So process? that? the -- inflation bit, what a you little if the on the expand do that

G. Frost

schedule because -- Like specific comp a a that build to it have But I state takes be there far. lag in state do That's the base know is or thus fee may workers' states a on lag. schedule will X time is state. happen a of the question, great up when -- their the fee seen terms Medicare, it fees that off for there updated of fee I far lot definitely thus those in of only only their I it think schedule. could workers' compensation. those X when Medicaid for gets that It schedules either that said, happens. trends we've has actually the depends in what

health inflation there months really So to away movement real I X of X in rate the probably that think care field. being medical months experienced from is any we're seeing the given

Mark Hughes

Yes. -- question. I'll I'll question rude in ask And The here. the another then capital one -- no, be as The more, asking rude situation.

the thing. that dividend, So how of capital at of sort kind you're looking ratios, with

G. Frost

Right.

on about As to to at written a not targets. premiums we've basis, talk we think or be leverage, -- are it we're a And whether GAAP talked or on could those equity metrics statutory operating about be could premiums statutory X.X. net or net not even We GAAP -- surplus. at times, equity we our a standpoint, up to X On the numerous that's Xx we're X.Xx. -- just written

at leverage I the our from quarter believe, the standpoint. end operating operating So was an of X.XX,

there, in maintain excess rating markets that us there's in operate -- where capital so to Best think terms all those our we of important are of operate. there we So we excess A.M. definitely to can and still capacity

Operator

next question will our with And Carletti Matt JMP. come from

Matthew Carletti

Janelle, question kind everybody recession. hoping a thinking of broad kind I just with you could economy was of ask about I

you are in your What up in so And to You guys quarter, that terms economic sectors portions specific have of last much core some of this your changed has seeing it make on? sectors quarter book. activity? large

G. Frost

a question. Matt, great Yes. that's

insured what base So our we in seeing reported best at indication is when now, look our we payrolls. are

a what wages of that mentioned so of were this saw up the not then in that A and X.X% And is payrolls roughly growth. we the XX%. workers. But seeing. stark growth -- from -- were -- at even what wage quarter XX% change between we been being was lot new for and up X.X% reported wage I have workers payrolls, new X% was

monitor we new workers So very closely.

I terms groups number we if where But of pretty is to I is our think from, of say see some if little we're some to industry question degree terms your talking coming minor workers. suspect that in people like would in we which that recession would "r" think start new recession, well decline fare or recession.

is in headline pretty largest you X% little Our and group, being But news that or you essential work they when about making market that with well certainly think are. roughly about recession. industry what a X% construction construction. -- interest industry the think of commercial Their of our if rates -- being commercial the groups not housing "r" about respond

very construction book we well. comfortable our feel pretty bodes So that

of groups, times. seems industry you, to -- well up to be I'll in even trucking tell our really Of recessionary all hold

That apologize. been has pretty steady. book trucking I was winded a answer, Our long

Matthew Carletti

you are kind for that kind Maybe super the a you remain us bit on kind gears helpful. of for of, lack number claims can reserves then to kind on what's a anything you're helpful. it? quarters as Maybe of it's forced kind or And that? is it what particular, that of now. happens to I'm well at expected, this that if claims steady in shifting both better getting kind a the closing driving open kind that's and term, open? development is, seeing release No, as of trends of the Super of claims of keeping up just loss very adjusting of you're just in quarter Or below refresh little on mostly

G. Frost

Right.

component that reserves, of So our when AMERISAFE, about IBNR. overall our look and one how a about this as our really I things terms have are of you think do what to different -- reserves case when think think remember reserves we reserving, at you of the you is if you in just loss versus

them keep case So field in less get our on managers. expertise that's simply most outcome case know our is field, to We we our intentional And XX adjuster. up than in claims very likely in the we we what of rely want terms of those per on the part low heavily claims inventories because We believe believe intimately really reserves. the case and reserve.

injured Fast our to claims worker coming in and seeing those closed. for those terms really I'd maximum sound probably in themselves is best ultimately we're do costs and loss record, workers work. these department how a my or policyholders from focusing injured those these outcomes forward job claims of the improvement what development, for and getting to development mitigating only medical broken not reserves like that it's loss but we in but return and claims, how do favorable for AMERISAFE get case we close on

Our And favorable to settle that's of and injured same is reserves is close single development that our and and workers. claims where folks claims coming are those day. take those being care every at from, thinking the time case those about able

Matthew Carletti

one. update on Perfect. large you us at a Can large of in claims real claims XX? the number sits then of frequency kind -- September Okay. And just quick where

G. Frost

September at with million. I large, At that was If year X/XX to but had Certainly. large when claims $X that's XX, last over that where claims, case number with compare were we we I X, the incurred and XX year, XX. ended say

now ended we're for XX XXXX claims. And XX at year large right accident -- XXXX. XXXX So with

this think -- my in I real of mind, a of no business, differences in and in the days course, frequency severity. between no is XXX But lumpy So there's left year.

Matthew Carletti

of Lots time.

G. Frost

year, days. the No, there's in XX left XX days

day I think XXX. is today

Matthew Carletti

perfect. Neal, Perfect, your luck And Andy. best retirement. for of enjoyable Welcome, an

Anastasios Omiridis

Thank you.

Operator

next come Hughes from with question And will Mark Truist. our

Mark Hughes

the seeing lately. it's in of should in be a that about bit you higher volatile, in think inflation been I a that little wages? we correct impression? ratio but it's Anything terms may know pretty expense maybe Is

G. Frost

Sure. experiencing that immune and inflation AMERISAFE not to of seems be pressure that. not is wage Yes. what to to everyone terms in is. We're immune what

thinking on experiencing it at question is. skill that you I have job same great So I answer everyone What market the pockets, else I to. think know be yes, don't expense long-term start about just particularly thing the when that the basis, a we're the is -- right, don't the long-term demand on what in impact sometimes you to see time. is depending is going what the because the level, in ratio, or

Mark Hughes

spoke would appetite how you competition? earlier what characterize then regional the characterize And versus you bigger Okay. In you X, some months How now would the it seeing, quarters or X ago? carriers. among you're about carriers

G. Frost

are strong. to still willing AMERISAFE there write what is Competition There Unchanged. carriers still writes. out

honed of business I compensation lines in of the pockets. because the really force think agent availability on of is in besides various other workers' coverages

of their rate agent decrease, workers' that fact into in going property is -- struggling. given there -- really lines into that much those loss coverage. all is getting comp, know, and costs as are and the are probably we top declined that compensation agents of other workers' mind placing been casualty going So and pretty really terms not for everybody have a They're

you even that's So to in the we of it really as the change changed really go a a as I competition. of back much. haven't been feel we years competitive And -- I can that said better than that, even hasn't like we But terms months, level where in seen X new far environment, do business. X job probably would X further

Mark Hughes

think, customer also, it's on you base, the look you that's when bidding saying backlog, sort -- it's like there? had was they're feel Maybe think important mostly the I you job -- characterized that next of perspective do your what activity? Yes. question, but a at question future. commercial. What I about when the you've great about Any

G. Frost

of demand, us, even reported rates the next yes, That think are and be our our that payrolls Right. it's I the a of to -- would coming the though job lessening working, been better consumer the being out job project knew is look of be we we've there. was up, going And at to were very next concern there. was to going to even for the out the When was when one still if have of pandemic don't a is think strong. or that, question and And the do that -- during term, going we seen I lack Based there? next coming you on be then concerns answer interest pandemic. of demand. insurers see I really until the We --

Operator

Thank the the Janelle turn now I'll session. to back you. over question-and-answer Frost. And conference that does conclude

G. Frost

Thank you. team. the to I started today's call welcoming Andy

by leadership and of The wife, of company joining. best. to Fuller So better because I'd at Maria. today Thank service and his his like wish influence thanking community end are you them for very our AMERISAFE. the Neal for and the We Neal

Operator

does for We Thank Have you your that And thank conclude excellent conference. participation. today's day. do you. an

AMERISAFE (AMSF) 27 Oct 222022 Q3 Earnings call transcript