AMERISAFE(US:AMSF)2021-07-29 16:00markdown [FORWARD-LOOKING STATEMENTS](index=3&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section highlights that the report contains forward-looking statements subject to various risks and uncertainties inherent in the business and insurance industry - The report contains forward-looking statements that reflect current management views on financial performance and future events in the business and insurance industry, which involve risks and uncertainties[9](index=9&type=chunk) - Key risk factors that could cause actual results to differ materially include the cyclical nature of the workers' compensation insurance industry, impact of pandemics, increased competition, changes in relationships with independent agencies, general economic conditions, developments in capital markets, technology breaches, decreased business activity of policyholders, greater frequency or severity of claims, adverse regulatory conditions, loss of key employees, changes in regulations/laws/taxes, changes in accounting standards, changes in legal theories of liability, changes in rating agency policies, and changes in reinsurance availability/cost/quality[9](index=9&type=chunk) [PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the company's unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=4&type=section&id=Item%201%20Financial%20Statements) This section presents the unaudited consolidated financial statements of AMERISAFE, Inc. and its subsidiaries, including balance sheets, statements of income, comprehensive income, changes in shareholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, accounting policies, and specific financial line items [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position at specific dates, detailing assets, liabilities, and shareholders' equity Consolidated Balance Sheet Data (in thousands) | Metric (in thousands) | June 30, 2021 | December 31, 2020 | | :-------------------- | :------------ | :---------------- | | Total Assets | $1,506,263 | $1,470,855 | | Total Liabilities | $1,037,897 | $1,032,039 | | Total Shareholders' Equity | $468,366 | $438,816 | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) This section details the company's financial performance over specific periods, including revenues, expenses, and net income Consolidated Income Statement Data (in thousands, except per share) | Metric (in thousands, except per share) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Premiums Earned | $69,888 | $75,964 | $140,634 | $154,954 | | Total Revenues | $81,157 | $89,082 | $164,508 | $168,251 | | Total Expenses | $51,986 | $59,691 | $111,712 | $125,619 | | Net Income | $23,767 | $23,948 | $43,079 | $34,748 | | Basic EPS | $1.23 | $1.24 | $2.23 | $1.80 | | Diluted EPS | $1.23 | $1.24 | $2.22 | $1.80 | | Cash Dividends Declared per Common Share | $0.29 | $0.27 | $0.58 | $0.54 | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the company's comprehensive income, which includes net income and other comprehensive income items Consolidated Comprehensive Income Data (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income | $23,767 | $23,948 | $43,079 | $34,748 | | Unrealized gain (loss) on debt securities, net of tax | $891 | $5,483 | $(4,157) | $6,967 | | Comprehensive Income | $24,658 | $29,431 | $38,922 | $41,715 | [Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) This section outlines changes in the company's shareholders' equity over time, reflecting net income, dividends, and other adjustments - Total shareholders' equity increased from **$438,816 thousand** at December 31, 2020, to **$468,366 thousand** at June 30, 2021, primarily due to net income of **$43,079 thousand**, partially offset by dividends to shareholders of **$11,221 thousand** and a decrease in accumulated other comprehensive income[26](index=26&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash inflows and outflows from operating, investing, and financing activities over specific periods Consolidated Cash Flow Data (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $25,994 | $42,170 | | Net cash provided by (used in) investing activities | $(18,878) | $34,835 | | Net cash used in financing activities | $(11,332) | $(10,537) | | Change in cash and cash equivalents | $(4,216) | $66,468 | | Cash and cash equivalents at end of period | $57,541 | $110,281 | [Note 1. Basis of Presentation](index=10&type=section&id=Note%201.%20Basis%20of%20Presentation) AMERISAFE, Inc. is an insurance holding company providing workers' compensation insurance for small to mid-sized employers in hazardous industries. The consolidated financial statements include AMERISAFE and its subsidiaries, prepared in accordance with Form 10-Q and GAAP, with management estimates and assumptions - AMERISAFE provides workers' compensation insurance for small to mid-sized employers in hazardous industries such as construction, trucking, logging and lumber, manufacturing, agriculture, maritime, and oil and gas[32](index=32&type=chunk) - The unaudited consolidated financial statements are prepared in accordance with Form 10-Q and GAAP, relying on management's estimates and assumptions[33](index=33&type=chunk)[34](index=34&type=chunk) [Note 2. Restricted Stock and Stock Options](index=10&type=section&id=Note%202.%20Restricted%20Stock%20and%20Stock%20Options) The Company operates two equity incentive plans: the Non-Employee Director Restricted Stock Plan and the 2012 Equity and Incentive Compensation Plan. During the first six months of 2021, 32,995 shares of common stock were issued, and share-based compensation expense decreased compared to the prior year Restricted Stock and Stock Option Data (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------- | :----------------------------- | :----------------------------- | | Shares of common stock issued | 32,995 | 28,476 | | Market value of shares issued | $2.2 million | $1.8 million | | Share-based compensation expense | $1.3 million | $1.8 million | [Note 3. Earnings Per Share](index=11&type=section&id=Note%203.%20Earnings%20Per%20Share) The Company calculates Basic and Diluted Earnings Per Share (EPS) in accordance with FASB ASC Topic 260, using the treasury stock method for potential common shares Earnings Per Share Data | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $1.23 | $1.24 | $2.23 | $1.80 | | Diluted EPS | $1.23 | $1.24 | $2.22 | $1.80 | [Note 4. Investments](index=11&type=section&id=Note%204.%20Investments) The Company's investment portfolio includes held-to-maturity, available-for-sale, and equity securities. Net realized gains on investments increased for both the three and six months ended June 30, 2021, primarily from sales of available-for-sale fixed maturity securities. Net unrealized gains on equity securities significantly improved for the six-month period Investment Portfolio Fair Value (in thousands) | Investment Type (in thousands) | June 30, 2021 Fair Value | December 31, 2020 Fair Value | | :----------------------------- | :----------------------- | :--------------------------- | | Fixed maturity securities—held-to-maturity | $589,601 | $621,654 | | Fixed maturity securities—available-for-sale | $369,890 | $414,279 | | Equity securities | $55,375 | $43,437 | | Short-term investments | $129,109 | $45,898 | | Total Investments | $1,112,805 | $1,088,744 | Investment Gains and Losses (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Realized Gains on Investments | $1,179 | $163 | $1,498 | $1,155 | | Net Unrealized Gains (Losses) on Equity Securities | $3,286 | $5,570 | $8,797 | $(3,193) | - The allowance for credit losses on held-to-maturity securities decreased from **$274 thousand** at December 31, 2020, to **$157 thousand** at June 30, 2021, primarily due to a provision for credit loss benefit of **$117 thousand** for the six months ended June 30, 2021[63](index=63&type=chunk) [Note 5. Income Taxes](index=16&type=section&id=Note%205.%20Income%20Taxes) The Company maintains a valuation allowance against its deferred income tax benefits and reports income tax expense based on a 21% statutory rate, adjusted for tax-exempt investment income and state income tax accruals Income Tax Valuation Allowance (in millions) | Metric (in millions) | June 30, 2021 | June 30, 2020 | | :------------------- | :------------ | :------------ | | Valuation allowance against deferred income tax benefits | $1.3 | $1.9 | - Income tax expense differs from the **21%** U.S. federal statutory rate primarily due to tax-exempt investment income and state income tax accruals[70](index=70&type=chunk) [Note 6. Loss Reserves](index=16&type=section&id=Note%206.%20Loss%20Reserves) The Company records reserves for estimated losses and loss adjustment expenses, which are continually reviewed and adjusted. Favorable development in prior accident year net reserves reduced loss and loss adjustment expenses incurred for both the six months ended June 30, 2021 and 2020 Loss and Loss Adjustment Expense Reserves (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------- | :----------------------------- | :----------------------------- | | Balance, beginning of period (Loss and LAE) | $760,561 | $772,887 | | Net balance, end of period (Loss and LAE) | $634,194 | $666,789 | | Favorable prior accident year development | $29,317 | $31,165 | Allowance for Credit Losses on Reinsurers (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Allowance for credit losses on amounts recoverable from reinsurers, end of period | $449 | $388 | $449 | $388 | [Note 7. Comprehensive Income and Accumulated Other Comprehensive Income](index=17&type=section&id=Note%207.%20Comprehensive%20Income%20and%20Accumulated%20Other%20Comprehensive%20Income) Comprehensive income includes net income plus unrealized gains (losses) on available-for-sale investment securities, net of tax. The difference between net income and comprehensive income is primarily due to changes in unrealized gains and losses on available-for-sale debt securities Comprehensive Income and AOCI Data (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Comprehensive Income | $24,658 | $29,431 | $38,922 | $41,715 | | Balance, Accumulated Other Comprehensive Income, end of period | $16,862 | $19,178 | $16,862 | $19,178 | - Reclassifications from accumulated other comprehensive income to net income primarily relate to unrealized gains on available-for-sale securities, totaling **$1,248 thousand** for the three months ended June 30, 2021, and **$1,561 thousand** for the six months ended June 30, 2021[82](index=82&type=chunk) [Note 8. Fair Value Measurements](index=18&type=section&id=Note%208.%20Fair%20Value%20Measurements) The Company measures financial instruments at fair value using a hierarchy of inputs (Level 1, 2, and 3) to maximize observable inputs. Equity and treasury securities are Level 1, while most fixed maturity securities and short-term investments are Level 2 - Fair value is determined based on quoted market prices or internally developed models using observable market-based parameters, prioritizing Level 1 (quoted prices in active markets) and Level 2 (observable inputs other than quoted prices) inputs[88](index=88&type=chunk)[89](index=89&type=chunk) Fair Value Hierarchy of Financial Instruments (in thousands) | Financial Instrument (in thousands) | Level 1 Inputs | Level 2 Inputs | Level 3 Inputs | Total Fair Value | | :---------------------------------- | :------------- | :------------- | :------------- | :--------------- | | Securities available-for-sale—fixed maturity | $29,192 | $340,698 | $— | $369,890 | | Equity securities | $55,375 | $— | $— | $55,375 | | Total (June 30, 2021) | $84,567 | $340,698 | $— | $425,265 | Carrying Amount vs. Fair Value of Financial Instruments (in thousands) | Financial Instrument (in thousands) | June 30, 2021 Carrying Amount | June 30, 2021 Fair Value | December 31, 2020 Carrying Amount | December 31, 2020 Fair Value | | :---------------------------------- | :---------------------------- | :----------------------- | :-------------------------------- | :--------------------------- | | Fixed maturity securities—held-to-maturity | $558,431 | $589,601 | $585,130 | $621,654 | | Fixed maturity securities—available-for-sale | $369,890 | $369,890 | $414,279 | $414,279 | | Equity securities | $55,375 | $55,375 | $43,437 | $43,437 | | Short-term investments | $129,109 | $129,109 | $45,898 | $45,898 | | Cash and cash equivalents | $57,541 | $57,541 | $61,757 | $61,757 | [Note 9. Treasury Stock](index=21&type=section&id=Note%209.%20Treasury%20Stock) The Company has a share repurchase program authorized by its Board of Directors. As of June 30, 2021, no shares were repurchased during the current quarter or the prior year's comparable period - The Board reauthorized a share repurchase program in October 2016 with a limit of **$25.0 million** and no expiration date[100](index=100&type=chunk) - As of June 30, 2021, the Company had repurchased **1,258,250 shares** for **$22.4 million**, with **$25.0 million** remaining available for future purchases[145](index=145&type=chunk) - No shares were repurchased under this program during the three months ended June 30, 2021 and 2020[100](index=100&type=chunk)[145](index=145&type=chunk) [Note 10. Subsequent Events](index=21&type=section&id=Note%2010.%20Subsequent%20Events) On July 27, 2021, the Board of Directors declared a quarterly cash dividend of $0.29 per share, payable on September 24, 2021 - A quarterly cash dividend of **$0.29 per share** was declared on July 27, 2021, payable on September 24, 2021[101](index=101&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on AMERISAFE's financial condition and results of operations, covering business overview, critical accounting policies, detailed analysis of revenues and expenses for the three and six months ended June 30, 2021 and 2020, liquidity, capital resources, investment portfolio, and prior year development [Business Overview](index=22&type=section&id=Business%20Overview) AMERISAFE is an insurance holding company specializing in workers' compensation insurance for small to mid-sized employers in hazardous industries. Its strategy focuses on disciplined underwriting, proactive safety reviews, intensive claims management, and audit services to achieve attractive returns - AMERISAFE targets small to mid-sized employers in hazardous industries (e.g., construction, trucking, logging, manufacturing, agriculture, maritime, oil and gas) due to higher premium rates and less frequent but more severe claims[104](index=104&type=chunk) - The company's strategy includes proactive safety reviews, intensive claims management, and audit services to reduce overall claim costs and ensure appropriate premiums[104](index=104&type=chunk) - AMERISAFE actively markets insurance in **27 states** through independent agencies and its wholly owned insurance agency subsidiary, and is licensed in an additional **20 states**, DC, and the U.S. Virgin Islands[104](index=104&type=chunk) [Critical Accounting Policies](index=22&type=section&id=Critical%20Accounting%20Policies) Management identifies several critical accounting policies that require significant estimates and assumptions, which are crucial for understanding the financial statements and may lead to differences between estimates and actual future results - Critical accounting policies include reserves for loss and loss adjustment expenses, amounts recoverable from reinsurers, premiums receivable, assessments, deferred policy acquisition costs, deferred income taxes, credit losses on investment securities, and share-based compensation[106](index=106&type=chunk) - These policies involve significant estimates and assumptions that can be subjective and complex, potentially causing actual results to differ from estimates in future periods[105](index=105&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) The Company experienced a decrease in gross and net premiums written and earned for both the three and six months ended June 30, 2021, compared to 2020. Net investment income also declined due to lower yields. However, net income increased for the six-month period, driven by higher net unrealized gains on equity securities and favorable prior accident year development [Consolidated Results of Operations for Three Months Ended June 30, 2021 Compared to June 30, 2020](index=23&type=section&id=Consolidated%20Results%20of%20Operations%20for%20Three%20Months%20Ended%20June%2030,%202021%20Compared%20to%20June%2030,%202020) This section analyzes the company's financial performance for the three months ended June 30, 2021, compared to the same period in 2020 Three Months Ended June 30, 2021 vs. 2020 Financial Performance (in thousands, except ratios) | Metric (in thousands) | Q2 2021 | Q2 2020 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :----------- | :----------- | | Gross Premiums Written | $73,724 | $80,289 | $(6,565) | -8.2% | | Net Premiums Written | $71,238 | $77,617 | $(6,379) | -8.2% | | Net Premiums Earned | $69,888 | $75,964 | $(6,076) | -8.0% | | Net Investment Income | $6,730 | $7,324 | $(594) | -8.1% | | Net Realized Gains on Investments | $1,179 | $163 | $1,016 | 623.3% | | Net Unrealized Gains on Equity Securities | $3,286 | $5,570 | $(2,284) | -41.0% | | Loss and LAE Incurred | $32,423 | $37,530 | $(5,107) | -13.6% | | Underwriting and Certain Other Operating Costs, Commissions and Salaries and Benefits | $18,500 | $21,131 | $(2,631) | -12.4% | | Income Tax Expense | $5,404 | $5,443 | $(39) | -0.7% | | Net Income | $23,767 | $23,948 | $(181) | -0.8% | | Diluted EPS | $1.23 | $1.24 | $(0.01) | -0.8% | | Net Combined Ratio | 74.4% | 78.5% | -4.1 pp | | | Return on Average Equity | 20.8% | 21.3% | -0.5 pp | | [Consolidated Results of Operations for Six Months Ended June 30, 2021 Compared to June 30, 2020](index=24&type=section&id=Consolidated%20Results%20of%20Operations%20for%20Six%20Months%20Ended%20June%2030,%202021%20Compared%20to%20June%2030,%202020) This section analyzes the company's financial performance for the six months ended June 30, 2021, compared to the same period in 2020 Six Months Ended June 30, 2021 vs. 2020 Financial Performance (in thousands, except ratios) | Metric (in thousands) | H1 2021 | H1 2020 | Change ($) | Change (%) | | :-------------------- | :----------- | :----------- | :----------- | :----------- | | Gross Premiums Written | $155,238 | $167,360 | $(12,122) | -7.2% | | Net Premiums Written | $150,235 | $161,905 | $(11,670) | -7.2% | | Net Premiums Earned | $140,634 | $154,954 | $(14,320) | -9.2% | | Net Investment Income | $13,313 | $15,073 | $(1,760) | -11.7% | | Net Realized Gains on Investments | $1,498 | $1,155 | $343 | 29.7% | | Net Unrealized Gains (Losses) on Equity Securities | $8,797 | $(3,193) | $11,990 | N/A | | Loss and LAE Incurred | $71,940 | $81,177 | $(9,237) | -11.4% | | Underwriting and Certain Other Operating Costs, Commissions and Salaries and Benefits | $37,442 | $42,415 | $(4,973) | -11.7% | | Income Tax Expense | $9,717 | $7,884 | $1,833 | 23.2% | | Net Income | $43,079 | $34,748 | $8,331 | 24.0% | | Diluted EPS | $2.22 | $1.80 | $0.42 | 23.3% | | Net Combined Ratio | 79.6% | 81.1% | -1.5 pp | | | Return on Average Equity | 19.0% | 15.6% | +3.4 pp | | Key Financial Measures | Key Measure | June 30, 2021 | June 30, 2020 | | :---------- | :------------ | :------------ | | Net Combined Ratio | 74.4% (Q2) / 79.6% (H1) | 78.5% (Q2) / 81.1% (H1) | | Return on Average Equity | 20.8% (Q2) / 19.0% (H1) | 21.3% (Q2) / 15.6% (H1) | | Book Value per Share | $24.19 | $23.94 | [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) The Company's primary operating funds come from premiums, investment income, and investment sales. Net cash provided by operating activities decreased for the six months ended June 30, 2021, while investing activities shifted from providing to using cash, and financing activities used slightly more cash due to increased dividends - Principal sources of operating funds are premiums, investment income, and proceeds from investment sales and maturities; primary uses are claims payments and operating expenses[125](index=125&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $25,994 | $42,170 | | Net cash used in investing activities | $(18,878) | $34,835 (provided) | | Net cash used in financing activities | $(11,332) | $(10,537) | - The decrease in operating cash flow was due to increased amounts held by others, higher federal taxes paid, decreased premium collections, and lower investment income, partially offset by reduced underwriting expenses and losses paid[125](index=125&type=chunk) [Investment Portfolio](index=26&type=section&id=Investment%20Portfolio) The investment portfolio, totaling $1.2 billion, is composed of held-to-maturity, available-for-sale, equity, short-term investments, and cash. Held-to-maturity securities are recorded at amortized cost, while available-for-sale and equity securities are reported at fair value, with unrealized gains/losses on available-for-sale debt securities recorded to Accumulated Other Comprehensive Income - The total investment portfolio, including cash and cash equivalents, was **$1.2 billion** at June 30, 2021, consistent with December 31, 2020[129](index=129&type=chunk) Investment Portfolio Composition (in thousands) | Investment Type | Carrying Amount (in thousands) | Percentage of Portfolio | | :------------------------------------------------- | :----------------------------- | :---------------------- | | Fixed maturity securities—held-to-maturity | $558,431 | 47.8% | | Fixed maturity securities—available-for-sale | $369,890 | 31.6% | | Equity securities | $55,375 | 4.7% | | Short-term investments | $129,109 | 11.0% | | Cash and cash equivalents | $57,541 | 4.9% | | Total investments, including cash and cash equivalents | $1,170,346 | 100.0% | - Debt securities classified as available-for-sale are marked to market, with non-credit related unrealized gains and losses recorded to Accumulated Other Comprehensive Income. Held-to-maturity debt securities require an allowance for expected credit losses recognized through earnings[131](index=131&type=chunk)[132](index=132&type=chunk) [Prior Year Development](index=27&type=section&id=Prior%20Year%20Development) The Company recorded favorable prior accident year development for both the three and six months ended June 30, 2021, primarily due to favorable case reserve development from closed claims and claims where workers reached maximum medical improvement. The number of open claims decreased compared to the prior year Net Prior Accident Year Development (in millions) | Metric (in millions) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total net development | $17.9 | $17.5 | $29.3 | $31.2 | Claims Activity Data | Claims Data | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :---------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Open claims at beginning of period | 4,607 | 4,910 | 4,758 | 5,053 | | Claims reported | 1,078 | 1,004 | 2,127 | 2,106 | | Claims closed | (1,112) | (1,293) | (2,312) | (2,538) | | Open claims at end of period | 4,573 | 4,621 | 4,573 | 4,621 | - Favorable loss development was largely due to favorable case reserve development from closed claims and claims where the worker had reached maximum medical improvement[135](index=135&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The Company's market risk primarily stems from credit risk, interest rate risk, and equity price risk. There have been no material changes to its market risk profile since December 31, 2020 - Major components of market risk affecting the Company are credit risk, interest rate risk, and equity price risk[139](index=139&type=chunk) - There have been no material changes in the quantitative or qualitative aspects of the Company's market risk profile since December 31, 2020[139](index=139&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of June 30, 2021, providing reasonable assurance for timely and accurate reporting. No material changes in internal control over financial reporting occurred during the period - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2021, to provide reasonable assurance that required information is recorded, processed, summarized, and reported timely[140](index=140&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting during the period[142](index=142&type=chunk) [PART II - OTHER INFORMATION](index=29&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers other required information, including unregistered sales of equity securities and a list of exhibits [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's share repurchase program, which had $25.0 million available for future purchases as of June 30, 2021. No shares were repurchased during the three months ended June 30, 2021 and 2020 - The Board of Directors reauthorized a share repurchase program in October 2016 with no expiration date[145](index=145&type=chunk) - As of June 30, 2021, the Company had repurchased a total of **1,258,250 shares** for **$22.4 million**, with **$25.0 million** available for future purchases[145](index=145&type=chunk) - No shares were repurchased under this program during the three months ended June 30, 2021 and 2020[145](index=145&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including certifications under the Sarbanes-Oxley Act and various XBRL taxonomy extension documents - Key exhibits include certifications by G. Janelle Frost and Neal A. Fuller pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[146](index=146&type=chunk) - The filing also includes various Inline XBRL Taxonomy Extension documents (Schema, Calculation Linkbase, Label Linkbase, Presentation Linkbase, Definition Linkbase) and the Cover Page Interactive Data File[144](index=144&type=chunk)[146](index=146&type=chunk) [SIGNATURES](index=30&type=section&id=SIGNATURES) This section contains the official signatures of the company's executive officers, certifying the accuracy of the report - The report was duly signed on behalf of AMERISAFE, INC. by G. Janelle Frost, President, Chief Executive Officer and Director, and Neal A. Fuller, Executive Vice President and Chief Financial Officer, on July 30, 2021[148](index=148&type=chunk)[149](index=149&type=chunk)