AMERISAFE Q4 Earnings Call Highlights

Core Insights - AMERISAFE reported strong profitability and premium momentum in 2025 despite ongoing pricing pressures in the workers' compensation insurance market [5][6][25] Premium Growth and Retention - Renewal retention for policies offered renewal was 93.7% in the quarter, indicating strong performance amid competitive conditions [1] - Gross premium written (GPW) increased by 11.7% in Q4 2025 and 6.7% for the full year, marking the seventh consecutive quarter of GPW growth [3][6] - Voluntary premium, the largest component of GPW, rose by 10.5% in Q4 and 10.2% for the full year, with growth observed across states and classes [2][6] Financial Performance - The company achieved a return on equity of 18.5% and a combined ratio of 91.3% for the year [4][6] - Net income for Q4 was $10.4 million, or $0.55 per diluted share, while full-year net income totaled $47.1 million [18] - The expense ratio was reported at 29.2% for Q4 and 30.4% for the full year, with total underwriting and other expenses of $21.5 million [17] Claims and Loss Ratios - The accident-year loss ratio increased to 72% for the full year, attributed to higher severity and an increase in large claims [5][11] - The company reported 25 claims with incurred values over $1 million, up from 18 in the previous year, indicating a trend of increasing severity [12][13] Investment and Capital Position - AMERISAFE ended the year with approximately $797 million in cash and invested assets, maintaining a strong capital position [19][20] - The yield on new investments increased, resulting in a tax-equivalent yield of 3.83% for Q4 [19] Market Outlook and Competitive Landscape - Management noted steady competition and positive economic conditions in insured industries, with wage growth in the company's book exceeding the national average [22] - The company has reduced its contracted agency count by over a third while improving agency effectiveness, reflecting a sustainable growth strategy [23]