AMERISAFE(US:AMSF)2023-02-20 16:00Premium Rates and Business Performance - The average premium rate paid by construction employers for workers' compensation coverage was $4.21 per $100 of payroll in 2022[19]. - The company achieved a policy renewal rate of 93.8% for voluntary business in 2022, slightly down from 94.4% in 2020[22][35]. - As of December 31, 2022, the company had over 8,100 voluntary business policyholders with an average annual policy written premium of $29,620[35]. - Gross premiums written in 2022 totaled $276.1 million, a decrease from $303.1 million in 2020, representing a decline of 8.9%[40]. - The voluntary business segment accounted for 96.4% of total gross premiums written in 2022, with construction being the largest contributor at 44.8%[40]. - Florida represented 11.8% of gross premiums written in 2022, making it the highest state contributor, followed by Georgia at 11.0%[43]. - Direct premiums written for the workers' compensation insurance industry were $52 billion in 2021, making it the sixth-largest property and casualty insurance line in the U.S.[34]. Claims Management and Loss Reserves - The company utilizes intensive claims management practices, with an average of 47 open indemnity claims per field case manager as of December 31, 2022[26]. - The average number of open indemnity claims per field claims manager (FCM) was 47 as of December 31, 2022, significantly lower than the industry average[56]. - As of December 31, 2022, the company's net reserve for loss and loss adjustment expenses was estimated at $583.5 million, including $12.6 million for mandatory pooling arrangements[74]. - The gross case loss and DCC reserves decreased to $559.6 million in 2022 from $605.9 million in 2021, reflecting a reduction in overall claims[77]. - The total incurred losses for the current accident year in 2022 amounted to $192.9 million, while prior accident years incurred losses were $(40.6) million[82]. - The gross unpaid loss, DCC, and AO reserves totaled $696.0 million as of December 31, 2022, down from $745.3 million in 2021[83]. - The company reported 4,104 new claims and closed 4,423 claims during the year ended December 31, 2022[82]. Investment Portfolio and Financial Management - The carrying value of the investment portfolio, including cash and cash equivalents, was $950.5 million, while the fair value was $926.9 million as of December 31, 2022[90]. - The company’s investment policy aims to preserve capital and surplus while maximizing after-tax income and total return[90]. - The majority of fixed maturity securities are classified as "held-to-maturity," with changes in non-credit related unrecognized gains and losses not reflected until realized[93]. - The pre-tax investment yield for the twelve months ended December 31, 2022, was 2.7% per annum[95]. - The investment portfolio had gross unrealized gains of $13.9 million and gross unrealized losses of $43.0 million, resulting in a fair value of $851.3 million[98]. - The average composite rating of the investment portfolio, excluding equity holdings, was "AA-" as of December 31, 2022[102]. Reinsurance and Risk Management - The reinsurance treaty program provides coverage for each loss occurrence up to $100.0 million, with a retention of $2.0 million[108]. - The company has 24 reinsurers participating in the 2023 reinsurance program, with most rated "A" or better by A.M. Best[111]. - Total amounts recoverable from reinsurers as of December 31, 2022, is $126,049,000[113]. - The company has reinsurance protection providing coverage of up to $100 million for losses arising from acts of terrorism, effective through December 31, 2023[117]. - A downgrade in the A.M. Best rating of significant reinsurers could adversely affect the company's financial condition[198]. Employee and Organizational Structure - As of December 31, 2022, the company employed 354 full-time and 12 part-time employees, with an average employee tenure of 10.8 years[127]. - Approximately 63% of the workforce is female, and women represent 57% of the company's leadership[127]. - The company offers competitive compensation and benefits programs to attract and retain talented employees[122]. - The company has established a scholarship endowment for dependents of employees and community members, emphasizing its commitment to education[126]. Regulatory Environment and Market Conditions - The company is subject to extensive state and federal regulations, which may limit its ability to increase profitability through premium rate adjustments[190]. - The workers' compensation insurance industry is cyclical, leading to fluctuations in revenues and net income, which may increase stock price volatility[164]. - Changes in accounting standards could materially impact the company's financial results, particularly regarding revenues, expenses, and loss reserves[182]. - Legal and administrative proceedings could materially adversely affect the company's operations or results, particularly regarding claims related to workers' compensation insurance[195].