EIG - Earnings call 3 2023 | Employers Holdings, Inc.

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Operator

Greetings, and welcome to Employers Holdings, Inc.

Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Lori Brown, Chief Legal Officer. Thank you.

begin. may You

Lori Brown

our Good the quarter Doug. Officer. Paquette, is welcome, to our call. Officer; section everyone, recorded be Executive replay Thank following Chief will available earnings morning, Chief be call our third the of Investors the XXXX webcast today call Mike where for the Financial a and will on you, Presenting from and website call Employers. and being Antonello, Today's Kathy

that on are Act considered the call based harbor made on statements are conference Statements Litigation of during of facts not forward-looking are historical this Reform provision Securities Private made the These XXXX. statements. in reliance safe

results including with the Although forth expressed are our we filings risks statements the in the different our Exchange and forward-looking in expectations from our be risks to materially cause set expectations, and Commission. believe actual Securities reasonable, uncertainties could

at the subsequent not All current will means the call with the disclosures during nonpublic are of only company disclosing The on SEC's developments. updated included Investors of of the website the be for under FD. uses material Regulation also remarks as time disclosure complying and be its Such website. a will and to company's made information section call obligations reflect

calls or Accordingly, remarks our release, use investor addition and our other in our our financial conference the questions, section releases, as webcasts. included investors press the our website. any Reconciliations to metrics. our and supplement of filings, to press should materials in GAAP in metrics SEC of In monitor our to company's we results following attachment public Investors website financial these that are and available on to non-GAAP non-GAAP portion press presentation the an in earnings company's responses release may earnings

Now Kathy. the over call I'll to turn

Katherine Antonello

results, then joining third today. I'll to provide I'll more Q&A, Thank on additional for Prior Lori. financial Good to share over of quarter some this our highlights for it To to thanks some I'll Mike and start XXXX morning details us financials. you, everyone, morning, our hand commentary.

solid. results were quarter third Our

Our and operating net with X% program sales growth. written strong wage thoughtful our and expansion and earned were X%, each labor and new respectively, market, contributing appetite to underwriting increases, up model our this a premiums

As each force, with the of result, record a we quarter than consecutive more policies ended XX quarters. last increases representing XXX,XXX in the in level a

Our offset yields, From voluntary net more later investment Mike investments. we at the and throughout income will market invested X%. income income bond was net fixed investment XXXX. LAE impacting of increase higher loss about our in speak up by accident business was ratio call. partially our to The maintained rates XX% the on due we lower interest maintained balances below an current XX.X%, underwriting standpoint, year

we year with of As consistent reserve because was quarter, study recognize not the amount did net in loss loss the any was the a the development actuarial expectations. performed case and prior development not year our was year ago, prior indicated reserve full

year-end when at routinely reserve will We study. we detail reserves in a year our perform prior more evaluate full

expense to specific and ratio which accruals, with agency individual quarter contracts and vary agency in commissions growth were total increase Our incentive this commission an to are associated and due higher profitability.

with underwriting increase considering associated that the expenses earnings total when premium. ratio the a slightly, administrative expense Our general but ago and up also in year were and of consistent remained

to With remarks. Mike? return the that, my Mike, provide over call to I'll and I'll closing turn

Michael Paquette

were and versus an year Net versus X%. a written $XXX were $XXX primarily premiums of ago, premiums a writings. renewal to $XXX year due million increase Thank was ago, million you, earned Gross $XXX The X%. an new increase of Kathy. million increase higher million business

That ago. $XXX expenses incentive were were expenses a Commission XXXX increase $XX premiums loss offset year to accruals. to higher provision. higher was ago. by LAE increase a was a agency The $XX and Our losses adjustment versus higher year current premiums, loss earned in lower and primarily due versus accident due million million partially earned million million $XXX year

$XX which Underwriting compensation-related and general versus and million due million increase dividends primarily earned increase policyholder the debt higher ago. and expenses from bad The $XX year to administrative each expenses were was higher premiums. in a expenses and of resulted

million reporting a and reporting ratios were in Employers -- resulting of segment calendar of had its million period. had year XX% a Cerity a versus our sorry, segment our each loss I'm for period. ago, pretax segment From perspective, income $XX million a each From $XX pretax combined year the $X

investments. to Turning

our throughout of Our FHLB versus assets year-over-year the increase is from result received was million the $XX to yields, the due asset our offset to insurance largely securities. strategy, Home Bank from winding ago. a leveraged Federal balances XXXX, net were Pursuant measured The advances cost. down in income by that by Loan bond investment investment these proceeds higher advances amortized The lower invested year subsidiaries strategy. was investment as to invested decrease used our purchase $XX partially and million

currently A+. of fixed quality maturities a credit have X.X duration and of Our average an

new X%. rate excess Our in bond was weighted quarter of yield our today end, X.X% at average money and is

securities fixed was of on from our reflected equity are quarter unrealized this and of was after-tax net balance statement, investments, from losses on income our by by securities, unfavorably million are which impacted which impacted after-tax million further $X equity net stockholders' $XX unrealized other maturity our income losses reflected net Our and sheet.

fourth X. shareholders This of the regular quarter back payable XXXX call our per dividend to of an Directors and remaining share to repurchased declared have During million. a currently XXX,XXX at we of share, a repurchase $XX of the of turn authorization our Yesterday, stock Board on share. on per now common of $XX.XX of is quarter $X.XX average November I'll price November And record Kathy. XX we third XXXX, quarterly shares dividend

Katherine Antonello

you, Thank Mike.

company. be the integrating Cerity's laser-focused forward processes are those total the and and Through can our Employers. Cerity eliminated We redundant issued underwriting additional confident remain percentage effort as efficiencies will earned our XXXX savings to complete, premiums, is look front a others, and and policies After next I and generating serviced by administered we and sharing our will of be our expenses currently in for on that systems on we this Employers with earnings at further into initiative call. of that reduce consolidation operations expense and progress consistently you

also equity metrics. return capital has which our enhanced Throughout per actively earnings the year, we've and on to been returning share shareholders, our

dividends, the third quarter and million have $XX in year, Our totaled $XX this million capital share efforts management quarterly which repurchases and consisted year-to-date. of regular

specialist These and sheet, favorable trends small closing, the we're company's we compensation, confidence our future and remain confident we've better abundant opportunities positioned our balance actions reflect that strong in seeing continued In been and the underwriting unique operations. from as business workers' in never to capital highly further the in benefit success.

questions. And with that, we will take operator, now

Operator

[Operator Instructions]

the question Mark first Truist. comes Our with of Hughes from line

Mark Hughes

Good the adjustments, Thanks. or new morning. think the Kathy, digits premium audit Yes. business I the double again. in was growth, up excluding

basis, you on your you if class and at dynamic a of appetite environment about you expansions a of underwriting is enough a you have go-forward the it say should Just sense top codes. other wonder I to new here. it at the think expansion good kind Are that your talked could similar can on kind appetite? whether that for pace? allow line expand increase looking perhaps You

Katherine Antonello

a Yes. appetite let few I'll expansion Well, then give the you more about a effort. and talk me numbers, little bit

compares audit to accrual in increased stands we our the when so by increased by quarter, of our we During what audit accrual third did now that million, million. and $XX.X QX million. That XXXX $X.X $X we at

bit there. of So there's difference a a

remained totaled million, about in $XX.X to in that quarter the Also, XXXX. third $X.X third which the strong audit compares quarter of million pickups

and you audit when all XX% XXXX. third you written in quarter amounts, exclude, final gross about to our up mentioning, premium relative So increased the change accrual of quarter the the third of in were XXXX as pick

do yes, premium growth have still double-digit audit audit take the when So you adjustments. -- the we out

in quarter, about that's third the in year. also up and $X.X $XX.X We from million recognized endorsements last million

$X.X In through in addition, about noncompliance came premium. million

we and in-force payroll, So as change tailwind endorsements. for endorse that and reflect audited, policies a to are expired generating in being upward that's the policies

for are we bullish our growth. So on opportunities

at just million $XXX and in effect, still look up We in our from codes September expansion is premium, expand we our opportunities how to at are do was class and million to that of of give open that's of new we're that at you to appetite an -- formed our looking a written our about growth, business continue and They XX, committee $XX XXXX, coming classes. that. impacting can idea appetite we through to

to similar there. So The we classes. is -- traditional our ratio what seen see coming very like on we've we're target loss we seeing in what

continue to And effort. so expect that we do

Mark Hughes

additional Very not care good. some think? your inflation, what's of health discussion, there's you And then but What like It do yet. maybe much it take? sign seems

Katherine Antonello

other it. and to relative that this keeping the the seeing Yes. inflation eye We're certainly mild energy to point, like data medical housing been inflation economic Up or sectors has an in we're food. on in

in year they a And so since looked prescription that's basket had good inflationary costs that despite that than we're on seeing just we did that study in found XXXX, for are internally increase drugs XXXX. But XXXX defined XXXX, decreasing index whether an been pharmacy back tell our of at quarter, we but to And and been in-network an pharmaceuticals. that pharmacy this were experience now cost not lower uptick you impact or still news. performed drug costs I XXXX. it's can internal every from --

So pre-pandemic. but many of we lower it's was have increase than years little still year-over-year seen a decreasing, after it

Operator

Instructions] Our Farnam with question line comes Bob the from [Operator Janney. of next

Robert Farnam

classes business? book? the smaller for policy the than update your it Kathy, on for size expansion Is wanted traditional just what thanks is average that So know I bigger the to or

Katherine Antonello

It larger. Yes. is

into size seen a bit our we the expansion. we've fact, appetite In since average entered increasing policy quite

economic forth. go for in-force of policy so. wages about about Of X,XXX But we that last the course, book the past of growth and talked is average year to so have levels employment and course that in higher the from seen from about I've over just X,XXX increasing or with some coming the size our our

it So increasing. is

Robert Farnam

Or kind of you all of year. to that of is Is in the said, up largely going just classes? like base the payroll that, more expansion size attributed

Katherine Antonello

wages Bob. -- It's both, the not effort. appetite say I increasing it's our it's both and would expansion

Robert Farnam

A what question to right. you're It to platform. be All the expectations you're your are? in rolling Is on you XXXX. that expect into like consolidate that Employers sounds done quick Cerity understand Cerity. -- trying much I Okay. pretty

Katherine Antonello

Yes.

start benefits XXXX. in of lot We expect to to experiencing of have in expense that done the standpoint XXXX an work a the and from

Robert Farnam

Okay.

first the of some you of XXXX. in the have Do starting expense will So quarter there? savings you think

Katherine Antonello

yes, we some in start XXXX. But year. It will the should to roll quarter of in throughout the first see

Robert Farnam

expecting, one kind this update Are Great. what FHLB for question that completely unwound The quick I know was year? Okay. to fourth of And there I in That's was Mike. but be any strategy. we quarter that. the didn't to if expecting

Michael Paquette

are Bob. the not, and still Hard the spread million we'll earning right We're spread, to what seeing $XX through watch the down table. rate for we'll keep that we just an credit maintains now. and to that we're adequate year-end. tell, off have on and asset. if trade And it take to If adequate borrowing it it We liquidity between

the now little tell So to a wild. investment little hard and is a market right it's

and So day, every we'll accordingly. we act watch it

Katherine Antonello

Bob. Thanks,

Operator

the Antonello hand There queue. to Ms. closing further to like back in are no call questions for the remarks. I'd

Katherine Antonello

Thank Okay. meeting in Doug. with you look thank you morning. of for to We February forward joining again this all XXXX. us And you,

Operator

Ladies does Thank conclude and today's your participation. for this teleconference. you gentlemen,

a may wonderful lines day. disconnect your and at have this You time,

Employers (EIG) 26 Oct 232023 Q3 Earnings call transcript