Financial Data and Key Metrics Changes - The company reported net income of $13.8 million or $0.72 per diluted share for Q3 2025, compared to $14.3 million or $0.75 per diluted share in Q3 2024, indicating a decrease in net income [8][9] - Gross written premiums increased by 7.2% to $80.3 million in Q3 2025 from $74.9 million in Q3 2024, while net earned premiums grew by 6.2% [9][10] - The combined ratio for the quarter was 90.6%, reflecting disciplined underwriting practices [4] Business Line Data and Key Metrics Changes - Voluntary premiums on policies written grew by 10.6%, supported by strong new business production and renewal performance [4][9] - The accident year loss ratio remained stable at 71%, with frequency at historically low levels and severity increasing year over year [5][10] Market Data and Key Metrics Changes - The company experienced $8.9 million of favorable reserve development on prior accident years, primarily from accident years 2020 and earlier [5] - The effective tax rate increased to 21% from 19.5% in the prior year quarter [10] Company Strategy and Development Direction - The company emphasizes a balanced capital management strategy, focusing on profitability and disciplined capital deployment, including regular and special dividends [6] - The growth strategy is yielding a healthy return on average equity of 20.5%, with a focus on maintaining strong relationships with agents and policyholders [4][6] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of growth, indicating that the special dividend reflects a commitment to organic growth opportunities [24] - The competitive landscape remains intense, but the company maintains a consistent approach to underwriting, which is viewed positively by agents [44] Other Important Information - The company declared a regular quarterly dividend of $0.39 per share and a special dividend of $1, payable on December 12, 2025 [5][6] - Book value per share increased to $14.47, up 7.1% year to date [12] Q&A Session Summary Question: What is the source of the recent voluntary premium growth? - Management noted that the growth is broad-based, with a 2.7% increase in policy count quarter over quarter and a 93.6% renewal retention rate [20][21] Question: How does the company view its leverage and balance sheet flexibility? - The company indicated that its leverage is around one, with an upper bound of about $1.5 million [30][31] Question: What is the latest on medical inflation? - Management acknowledged that while they are not immune to medical inflation, fee schedules in workers' compensation are providing some relief [32] Question: What trends are observed in approved state loss costs? - Management reported that most states are seeing mid-single-digit declines in loss costs, indicating relative discipline in the marketplace [34][35] Question: How is wage growth trending? - Wage growth was reported at 6.7% for the quarter, with a new employee count increase of 2% [36][37] Question: How many large losses were recorded in the quarter? - The company reported 17 large losses over $1 million year to date, up from 13 at the same point last year [39][42] Question: Is the company considering expansion into other states? - Management stated that they are constantly evaluating potential expansions but have no immediate plans [54] Question: How are fee schedules impacting medical costs? - Fee schedules are updated regularly, and there is currently no significant legislative movement affecting them [55][56]