EIG - Earnings call transcript Q1 2022 | Employers Holdings, Inc.

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Operator

Good day. Thank you for standing by, and welcome to today's Q1 2022 Employers Holdings, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. advised call be being Please Instructions] that is today's recorded. [Operator you. Thank now I today, the conference Ms. to over hand would like to your speaker Lori Counsel. Brown, General is floor yours. The

Lori Brown

Thank Chief our our is based the Paquette, Officer. Mike on being are XXXX. to and the Officer; and webcast Executive provision the available welcome call earnings you, are not Chief during following Safe Investors made call. are for considered statements a recorded morning of the section replay of conference on the be Private quarter on be of Financial call call this today in These first Kathy where our Statements facts reliance call Securities made Harbor XXXX Act everyone Today's Employers. forward-looking Litigation that from Alex. Good website statements. Presenting Antonello, the historical will and Reform will

SEC's developments. only materials filings, FD. its conference disclosing updated remarks and the our uncertainties press addition press of and our presentation not In be call of as available are from forth of earnings we Investors that All website. other are expressed calls to statements information the the Regulation investor will website to the risks included and also Reconciliations Securities to non-public release, press filings questions, reasonable, section and to or believe Investors website in Accordingly, on material release to our in supplement our during made public remarks disclosure section GAAP company call in SEC will financial included webcast. under in results reflect Commission. investors portion Such non-GAAP our with company's and company's at forward-looking actual current as metrics. metrics our obligations time set the a the releases, our of following subsequent in responses The uses and in with may monitor risks materially use be non-GAAP the expectations, cause including and the attachment means complying expectations the Exchange our company's our Although, the different an to results be could for website. financial are of earnings should these any in we disclosures the our

Now, turn I over Kathy. will to call the

Katherine Antonello

results and to today. thanks Lori and of On I for and XXXX quarter workers' compensation first of you, us current our Mike discuss Thank financial today's the joining for everyone will market. outline call, the our observations

well remain actively underwriting executing calls plan, We maintain capitalizing improvement, us while market to discipline our on are for on continuing to manage our on and which recent business laser the focused labor expenses.

the during the our ago. rebound to business solid distribution new and first writings. attribute resulted written also recognition. was channels further segment, premiums can business from new a XX% primarily those Employers quarter versus by Cerity's of Within in year growth audit were We especially an gross increase strong Our premium up writings, strong alternative impacted within

significant new into with consistent XX%, janitorial with year drivers the another further key voluntary rise accident growth artisan yet record landscaping of current premium largely We recorded increase expected these business targeted employment The well We our the force. topline. was dual and XXXX. levels and us LAE expansion our within as improve. to classes. we forces appetite hazard recorded with throughout wages at XX.X% growth associated markets quarter number residential the including count ratio groups, for is loss leverage on in of contracting One ended of in several policies our our low policy positions The and growth our

to evaluate not study. full we first was loss perform consistent more so did our year We with semi-annual when reserves prior reserves adjust we year prior accident reserve our expectations, plan loss our quarter mid-year review limited Our detail our of in our at reserves.

and administrative million with were and $XX underwriting Our and expenses XX% were the of general down consistent year-over-year. fourth those quarter of

that first recall the year quarter case. a stated ratio we that would remains be that expense our ago XXXX and firmly may high You the watermark

With While closing to expenses, provide to to will Mike? results, financial agents then we diligently remarks. we're I to a in deliver continue investments and now managing seamless of to committed our discussion further a will provide return our make my technology our experience customer Mike and policyholders. that.

Michael Paquette

Kathy. million, increase increases earned million, new of XX%. premiums. writings you, further higher increase written primarily premiums an in XX%. to and final increase Gross audit $XXX of Thank an $XXX business due Net premiums The were was were

a Our losses primarily million year and was this and ago. higher because earned did expenses our reserves $XX not due versus $XX The prior-year adjust period. increase were to we million loss loss premium, adjustment

a decrease XX% versus million XXX% XXXX, recognized in reporting had of higher $X a of year expenses From of alliance quarter was breakeven ratios its $XX and commission quarter ago. the a this partnership savings segment which expense commission respectively. versus $XX premium first as underwriting perspective, of XXXX. favorable $XX expenses resulting million occurred uncollectible reductions million year relating quarter from primarily loss commissions reversal increase million premium, versus $XX we The ago. a Employers and increase first new a year non-compliant in million Underwriting administrative million due to an rate the $XX that and of continued as subject rates ago, and general Commission higher and The During year business, results well resulted were of XXXX. a and underwriting were to income a higher and departures in reserve and development. to targeted employee concentration on earned and were recorded is combined business net prior writings,

enthusiastic have over We past Cerity's had quarter, loss down increased year million very about several of the writings, an a segment loss months. remain from which underwriting of Cerity Our million the $X an for underwriting premium $X ago. consistently

investments. to Turning

income yields. versus investment ago. for to increase the quarter a year $XX The was higher net was million million due primarily $XX Our bond

just was quarter at X% end. Our book over average yield ending

have currently fixed Our equity XX% and represented plus, investments X.X and quality credit an average of other portfolio. of A total the securities a of and our maturities investment duration

each from unfavorably statement. to value losses by sheet. $XX common other $X.X our this per Our of during we after-tax our are the $XX $XX And repurchased impacted was million. million million an this the stockholders reflected and price our net unrealized our per which of impacted quarter which income securities income after-tax investments, net finally, quarter and quarter, by losses equity balance on of at authority from our $XX.XX now equity and reflected our share share on unrealized repurchase average were unfavorably fixed book call of And our Kathy. current share maturities securities, turn back stock are is I'll million And

Katherine Antonello

Thanks, Mike.

workers' Cerity's to $X Intuit Cerity which by offers digital future recently declared to will an are importance insurance of with contributed Restaurant this announced operating our of special target collaborations our our of segment array dividend. strategic of share mentioned, per opportunities support directly small previously giving we options. and In the These confirmation segment, the a an consumers our capital attracting California untapped regard both initiatives As to market. purchasing growth types yesterday, management, businesses Association compensation nicely growth solutions quarter. premium of

reflect operations. for second X% million. strong declared which And increase an capital per our We from dividend quarterly $X.XX a increased also actions dividend. finally, the regular the quarter, authorization of is these we future confidence share share in Each $XX company's existing of and our repurchase previous of the position our by

specialist confident react success. workers' we we with in opportunities As our continued and in to And now questions. favorable that, compensation, we a highly operator, small that are well trends, positioned business the will take remain initiatives seeing and we're to

Operator

[Operator from of your coming question Instructions] Hughes You have from Mark the line first Truist.

open. now is line Your

Mark Hughes

morning. Good Thanks. Yeah.

Katherine Antonello

Good morning, Mark.

Mark Hughes

outlook, Good we tougher the the you up, said, growth with the there about get interested you've appetite, Also that thoughts. positions growth, think to year-over-year much the morning. future talk Could so momentum about coming I'm comps growth curious, how related expansion your of policy think environment, count just more got competitive when about you is in sort some for increase you topline that? to

Katherine Antonello

Yeah.

force in the the force the policy is size favorable year-over-year or grew across that count topline. bands and X,XXX we that as spread we and environment more about countrywide really led states X% our policy can Florida, increase little probably California, growth at most and of increasing, was continues our X%. you that morning, It wages grew has nicely. tell in than saw feel low we saw more New in an by average headlines to to as that are our So lead policy in York. mentioned you size will growth business growth than largest count this I We across most new Louisiana, and improve, growth growth the unemployment a to saw in policy our a

don't we typically that year. tell the I bullish am I guidance, can give So you but growth this about

Mark Hughes

target combined ratio so, is ratio, the adequate mentioned, there? just combined Mike this XXX lower if should number? get what mentioned do quarter, to you at the or When comes a the had What a or be combined is this it you how for XXX business? you would should it running be And

Katherine Antonello

one down improvement. we're focusing of I that and see a of that will where we're to tell our I but where Mark, Well, is, you, is, one can expense the to paths, continued areas running we've this ratio lot speak parallel and

our an we've expenses We the our have and fixed reduced over been and undertaken effort that's we've that last year. premium, increased

and announcement XX% And underwriting the and you administrative in about general so, as expenses saw decreased year-over-year.

continue that's we like our And of ratio year. that more areas just of savings, that of where to expense expense efforts do increases to area to to that and where be as our future continue economies it's for remainder ratio the we'll get scale the identifying we important year us and improvement. in next feel So focusing will premium come into going can we're and diligent drive the down for be and that's expense

one we improve feel where we area like So combined can ratio. that's our

Mark Hughes

target, where is running, a there ask the I don't business maybe again, I'll this question know? you, be should where do

Katherine Antonello

We, didn't quarter. reserve guidance a an in where think an accident as we year on basis; the we ratio and we this We to again, see development typically combined improvement year don't to give any take calendar headed. would like are

we our ratio but can accident that's ratio calendar year-to-date, we year we in improvement So get year will down. those feel like bring further expenses as impacting the combined do combined

than And XXX, it lower again, efforts our are now. get be it there. So we should will where right that's

Mark Hughes

And you're then working with for on Cerity, partnership time? any that over or could you other Thank emerge opportunities that. that

Katherine Antonello

Yes, absolutely.

that their for very are quarter partnership to this announced in look We are continuing much other we The opportunities. two infancy.

we're that hopeful So we're those. we into can tell future on I and more did this in But the yes, opportunities are that working make quarters quarter. we there can announcements other looking you, like still ones are that

Mark Hughes

Thank you very much.

Katherine Antonello

Sure.

Operator

Farnam is Please from Scattergood. Your next question ahead. go Bob & from Boenning

Bob Farnam

Good Thanks. morning.

Cerity. to of continue the that trying get know California an might you with very of to I'm that? relationships questions, Just and I able immature, with idea that Restaurant [Multiple they're the the be opportunity just magnitude of Speakers] with the the kind get from Association but to

Katherine Antonello

tell, Yeah. to they of But time. difficult on Thanks a at it's are monitoring the significant for types a have you add weeks. matter infancy, the that in we that and but this question, basis an we Bob. some estimate daily point we're top are their going to to line, hopeful share not very, we these those can very It's do in partnerships with -- are of because value

Bob Farnam

much have give You from Restaurant a has that comes can already relationship partnership? volume us an California the mean, relationship, you Employers a idea I Association. I how of mean, already with

Katherine Antonello

I number Bob do back I you have can not in -- front me we not though. right on that that. of to get do now,

Bob Farnam

All right. Okay.

it third that development like with be is right development, favorable versus year-end the just are in So studies what through, different are a looking little maybe dealing first be more reserve So just you taking you and semi-annually? may reserve differences can analysis you're of it is going or reserve general? to quarters? the philosophy to the review, at why the more mid-year And there, how the of kind the it in-depth and reserve sounds go do between adverse at

Katherine Antonello

Sure.

timing not the changed. our has of So analysis

we that XXXX, over and fourth attributable that did to quarter development the $XX and accident we quarter, at So and end. million mostly years full recognize analysis favorable recall of year of take-down was XXXX a prior last

full fourth analysis expected At quarter the quarters, we a they analysis, reselect actual factors. complete and and For the first do and our third actuaries and the analysis, to second and development the development we don't factors. reselect

quarter waiting the full quarter anything. and potential not comfortable analysis that reserve any until saw our of and We've to So this very tell to quarter wait the a did changed in you just action going until at felt one second been issue, always was reasons prudent we timing would we our conservative position, philosophy. regards take have the take in It's has to until analysis. we are and and the second full the nothing just I we for

Bob Farnam

Okay.

just paraphrase, think to sounds actions That for and in a fourth don't first happens reserves. estimates quarter I and the only it look ultimate second quarters. but actually at take the like your reserves, will change the third your you the

changing your that your you opinion why the on quarter? didn't first that's So really change so in not you're ultimate, really

Katherine Antonello

into any or it. go selections we Well, the that of our the didn't factors factors of development change

development at what So actual is looked what we emerged have picks those through. factors, quarter's and then just that the should last given prior the would came what

typical in a a more decided to it's simplistic it's So respond. we've analysis, in past, what and we not done the it's not change just

Bob Farnam

Okay. And for last me. maybe questions

have, FHLB for? are loan, you million use $XX that So you to planning the what

Katherine Antonello

that? want you take to Mike Yeah,

Michael Paquette

I will Yeah. that, Bob. take

have Loan quite member Federal a Home Federal more Bank, attractive put as can collateralized Loan don't Home the We we even the to short-term the because ability and to borrow. already Bank, have at with actually we collateral So up rates. borrow we're of any

of that to So gain in given spike as obligations kind spread. more certain in used than have actually loan have we asset leverage borrowing classes, the that and the collateralized invested

see So are should there if recurring. an in some and because borrow for today's at take ability each it's spread tomorrow We low instruments, our time. to rates, be rate bit a anomaly it's didn't arbitrage that variable the of trade-off and largely can pretty we world, both safe also the is

taking rate just advantage those of between really measures. arbitrage interest current we're So the two

Bob Farnam

cash And at Okay. how repurchases, much of kind have company with for share in holding point? this increase the the authorization you do

Michael Paquette

Well, result effect cash able are insurance are quarter one distribution company a in of with flush more heavily we we companies. the our capitalized at as parent a of the first from to

the available. took increase than the available And affected yesterday, repurchase share So dividend increase we we no million authorization have is parent probably company, the today, opportunities the and the And less to action the both $XXX we that that's as to have along extent we the there. dividend, Board at volume with why why special regular attractive have well.

Bob Farnam

the for Thanks Great. answers.

Operator

phone You call session. this [Operator ends question-and-answer Instructions] don't have any closing questions at the Kathy line turn the back to on time. for remarks. I'll our over That Antonello

Katherine Antonello

Alex. look morning. Okay. discussion Thank in next to joining thank all you And this I our for forward you, us July.

Operator

Thank all for That concludes call. you participating. today's conference

You may disconnect. now

Employers (EIG) 30 Apr 222022 Q1 Earnings call transcript