EIG - Earnings call transcript Q1 2024 | Employers Holdings, Inc.

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Operator

Good day, and welcome to the Q1 2024 Employers Holdings, Inc. Earnings Conference Call. [Operator Instructions] As a reminder, this call may be recorded. I'll now turn this call over to Lori Brown, General Counsel.

Lori Brown

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

XXXX. These Securities Litigation Private provision of statements are the made in Act reliance of on the safe harbor Reform

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

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

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

call over the Kathy. I'll now turn And to

Katherine Antonello

quarter more XXXX XXXX. the continued where then everyone, to to will Today, our I'll to prior it we by to Q&A, results. for improvement on during balance discuss Mike some of the I'll follow hand quarter highlights Lori. first our financials details Good our expect Thank and and over I'll call. see welcome agenda, morning we to first providing of begin typical earnings you, XXXX our

Higher in investment investment strong renewal income X% an increase first new our revenue premiums, year-over-year. and and net quarter gains drove

growth in in continued renewal XX% from a recognition. in a steady and Our resulted solid new written audit X% business, premium premium increase business increase

for all written distribution Excluding adjustments premium channels XX% contributing audit major our quarter growth. with premium, to gross increased the the for

throughout was ratio stock and with Our slightly investment and our that performance strong to our above year consistent with also of from accident on revenue, we [indiscernible] We at business common investments. investment And unrealized voluntary XX%, continued maintained and other XXXX. the current LAE XXXX. net loss gains net income recorded XX.X%

year medical existing We XXXX positions we recorded, believe potential the accident along loss inflation, increase a for in a from reserving our well ratio us that standpoint. provision with

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

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

business XX.X% on strong anticipated and commission which from increase agency ago. up a our Our was which XXXX XX.X%, expense commission year are incentives, due initial growth. rate premium subject was typically to new higher a ratio contingent The to is growth, profitable

ratio administrative and Cerity a improvement XX.X% Our throughout expect ago. recent further XX.X%, improvement ratio integration, down primarily underwriting year and from our was XXXX. resulted and we ratio from general expense expense expense The

quarter XX%, by net XX% diluted share our first to and rose GAAP adjusted of ratio income was sharply XXXX and income net similar combined quarter first our respectively, XXXX per XXX.X% results. While our

for and reflect expect fully ratio achieved, the the that meaningful improvements our enhancements, and underlying yet economies year. the scale efficiencies in not we recently combined does of we balance ratio combined of Our have

a provide our Mike? then now financial will return results remarks. provide deeper Mike I'll my that, and dive closing to into With

Michael Paquette

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

loss loss expenses an million, excluding and our X%, the were increase $XXX ratio transfer. loss when Our expense XX% loss our adjustment effects XX% portfolio of loss adjustment and or of was and

Kathy LAE quarter year accident voluntary current mentioned, XX% As and a on to this we loss ago. XX.X% increased year our versus ratio business

both tail XX.X% to salvage. and increase Commission claims an and continued throughout generate XX.X% settle versus risk our administrative additional expenses of accelerated was were mitigate we administration was X%, ratio quarter to and expenses underwriting versus XX.X% $XX addition, expense overall an and Underwriting the on commission an our were In increase ratio basis reserve our ago. year year XX.X% general general of X%, million, and a ago. a expense $XX million, and

in the primarily full offset was of expenses. payroll bad debt costs decrease benefit to operations The integration, those XXXX quarter fourth due increases employers, partially associated savings and with into and by authorities

Our the investment million was the interest X% we year-over-year. investment net expense income quarter, considering XXXX. was decrease Bank of incurred former Home $X worth When that the strategy decrease quarter to XXXX, former unwinding from of Federal The $XX of of X%. leverage than was our actually first for in that a more net up our Loan strategy investment income the late million due in

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

Our a weighted quarter yield average end, up at book year nicely X.X% ago. which was from was X.X%

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

our we $X.XX of action This strong the dividend our and reflects repurchased company's the $XX share, capital currently XXXX of stands quarterly million. week, the per an $X.XX per share increase an ] Board just dividend of share. this And from at quarter, repurchase quarter our abundant common X% second stock underwriting over $XX.XX balance During of remaining future million regular at a $X and in price operations. of declared our per of share, our confidence Directors sheet, prior earlier average authority [

And the Kathy. with back that, call to I'll now turn

Katherine Antonello

Thanks, value share, considering over in continue per for increased share last XX% change $XX.XX. declared After to book including book deferred combined to preferred be our to metrics our adjusted the dividends our measuring per and value increased value gain, XX% share ratio the book per Mike. months, the XX success. our and the adjusted $XX.XX, by our Both

see ratios these further We in are near the will in improvements term. confident we

claim received exceptional from user which a has the experience During both reporting tool, agents and XXXX, first feedback delivered quarter digital policyholders. of we best-in-class

growth. we plan XXXX, options appetite Throughout which expansion to our self-service and to deliver led has continue more effort, profitable

both position our we will now take initiatives, growth and having capital questions. strong we And forward and to technology look a successful Our supports Michelle, that, with XXXX.

Operator

Instructions] [Operator

Citizens question Carletti with Matt first from Our comes JMP.

Matthew Carletti

of and growth, that, struggle. was And seeing that XX% are you strongest -- caught bit kind a out that hoping a you level I and ex just you more what which down understand growth could what of are states states XX%, alongside audit little what payroll, us top rates premiums. of help a the the a TIF are in to Could up then doing the growth of overall. line break growth, exposure the kind builds little

Katherine Antonello

sure. Yes,

It's from of that of distribution major really growth So currently arising we're is the with seeing level all pleased our we're widespread. channels.

quarter, first those independent our and premium, partners. our our are core the segment, in-force During agents agency national

XX%. increased is utilization. specialty That by and channel, book. see which X%. segment, I've A And past, by lot was continue distribution digital driven which API by our a is premium increased alternative mentioned payroll the about the then towards we shift distribution in that SPA of our to big alternative

submissions seeing the we lot put our in of into our upticks our in policies. partners a providing our ease and quotes and bonds terms major finding distribution So of to energy we're because

new expansion then In contributing premium. expansion to also is And first our of business annual That our ratio the million quarter, say or $XX loss appetite growth. target similar at other our that overall XX% classes. classes is our performing to a appetite I'd generated effort

bit a you gives color. that hopefully, of So little

Matthew Carletti

super if helpful. could. I that's Yes, One other,

talked continuing of kind and during it won't QX. little reasons there be number Could the again happen Cerity year. in leveraging what You might there little that improvement you the in is kind throughout more in just point on of of bit consolidation a why couple quarter, the good that? be of -- high growth, expense any those out onetime versus out, a expect through things ratio you like a about to or expenses pulling Could the the may

Michael Paquette

that. I'll take Matt, Sure,

nearly So before, pretty the fully Cerity savings mentioned we expected. quarter. as emerged And as much they in the first were

all because benefit and seasonally there. reset. first So are costs, the things quarter the and no payroll higher those kinds surprises in We of mentioned

higher. So kind year-over-year, see that you'll that's seasonably if look you of

what didn't have you're quarter million that to and their to and we final in in behind about a I referring related expense never manner bit say audit policies, bad some $X.X this noncompliant that of debt a incremental noncompliant they because conform think to I nonrecurring of is us.

to expect it. anything like that was noncompliant not future it as do about quarters that relates our see we So And premium. in to

Operator

[Operator Instructions]

Truist comes Hughes Our Mark with question Securities. from next

Mark Hughes

but you What a buffer is it assuming medical case in you You're maybe up. into your making inflation putting Could pick the provision you're not step-up as you that medical inflation in now? reserves for what expectation, more or in in of detail inflation. go does are see kind

Katherine Antonello

Yes.

economic So medical remained when up or in has food. up point, it the pick the this or to like said that other that medical you housing up, in mild you compare point, inflation case energy to this like does I to we sectors fact because inflation relatively review and data

And news compensation really workers' and so for good us. for that's

monitor to our prescription costs. continue We drug

a over in generally about seen after time. year, with in-network that see experienced the pandemic. We've the they're doing drugs -- recent uptick to reversal most controlling really for our fairly bit that experienced we started the did ago, We recent of in years. costs in index we've an the internal pharmacy but decrease We of costs of a are mix was that what it the really a year drug prior consistent for

] over feel little you So should where two sort $XX inflation. you we see that's those possibility in triangle before. increased of that back The reserve an we're when an it's loss right was additional was inflation to booked, over a And in reserve slightly higher, ratio we're above we when that kind really a in of implicit it about the accident together, of our think is the that that place, now. year uptick buried good million put and for we we [ that's holding it amount the spoke

Mark Hughes

steady [ pretty change part go. you it Do of on Do business. ] you new carriers? you on any see a as the perceive competition? appetite Clearly, well Or other you're doing in is

Katherine Antonello

We're Yes. of not premium seeing business really we write. for change and a the there that much sectors the too sizes

policies have to continue the -- finding little we than as characterize larger environment more don't that our typical bit a average are policy We competitive size. success

increased But when about ]. by still about that's X% is at X,XXX about policy size you average look about business, very but [ small our ]. our X,XXX XX% policy So it's average new up in to [ size QX, at

X% to Our between X%. exposure split change X% and decrease employment out between average in rate that and for adjust we've when closer been the for It's range. it a changes. to But you what was wages the quarter X% seeing and

Mark Hughes

Is down X%? or that X% to X% X% to up

Katherine Antonello

down. Down,

X% X%, yes. to Down Sorry.

Mark Hughes

account to into rate take would X% down to down exposures So X% be the wages, you X%. X% when

Katherine Antonello

not as correct. a It's of big decrease,

Mark Hughes

is outlook your do your Where you to periods maybe we pace -- it back book, sense stand? Or Yes. in of of Do carrying think about peak? current where industry-wide own get days the but What's industry what's your you you level and the can trying sort on at to continue forward, about sense past the on information your gains? the NCCI do think of not -- just industry think your coming stands. reserve just the or your sense going even increase

Katherine Antonello

will redundancy weeks. And estimates say. it's then. the we'll Last reserves going but of last redundancy that, year. always or in increased I of very prior CCI little a to forward redundancy putting a ] couple deficiency year, hard they It's the to out healthy I be year. was what [ from they up level a to of to with which AIS, look the Yes. came surprised see be

though be year. will carriers it they see continuing release us. say reserves, what interesting this to appears very as So to including It are

haven't there behaviors look as the seen I a change too So when much in whole terms industry I on at reserves. of

Operator

Antonello to over turn time. to further no closing for like I'd Kathy at the are There call questions remarks. back this

Katherine Antonello

Thank you, again Michelle, July. you joining meeting We and to look thank in you, us this morning. everyone, with for forward

Operator

This does for your program. you conclude the participation. Thank

a Everyone, day. may You disconnect. great have now

Employers (EIG) 26 Apr 242024 Q1 Earnings call transcript