AMERISAFE(US:AMSF)2022-04-30 16:51Financial Data and Key Metrics Changes - The combined ratio for the quarter was 80.1%, supported by strong policy retention and favorable prior year case development [6] - Net income for Q1 2022 was $17.3 million or $0.89 per diluted share, compared to $19.3 million or $0.99 per diluted share in Q1 2021 [10] - Operating net income increased by 8% to $15.9 million or $0.82 per share from the previous year [10] - Revenues decreased to $75.6 million from $83.4 million in the same quarter last year [10] - Net premiums earned decreased by 4.5% to $67.6 million compared to $70.7 million in Q1 2021 [11] - Total underwriting and other expenses were $15.1 million, down from $19 million in Q1 2021, leading to an expense ratio of 22.4% compared to 26.8% [14] Business Line Data and Key Metrics Changes - Premiums written in the quarter were down 4.6% from Q1 2021, with a policy count decrease of 1.1% [6][7] - Audit premium and related adjustments increased by $2.8 million in the quarter, a significant improvement from $300,000 in Q1 2021 [7] - The average loss cost declined by 8.2%, with the ELCM index remaining at 154 [6][7] Market Data and Key Metrics Changes - Wage inflation was identified as the primary driver of payroll increases, with a reported increase of 7.3% in Q1 2022 [19] - Employee count increased by 1.9% in Q1 2022, compared to 1.2% in the previous quarter [19] Company Strategy and Development Direction - The company is focused on maintaining discipline in pricing amidst a competitive marketplace, with carriers seeking market share in a declining rate environment [6][30] - The company has increased its allocation to corporate bonds, finding attractive opportunities while slightly decreasing its allocation to municipal bonds [13] Management's Comments on Operating Environment and Future Outlook - Management noted that the competitive environment remains steady, with no significant influx of new competitors [30] - The company expects positive net investment income growth in the latter half of the year, following a tough comparison in the next quarter [12] Other Important Information - The company repurchased shares totaling $2.1 million during the quarter, with $22.9 million remaining in its authorization [9][15] - The tax equivalent yield on the investment portfolio was 2.75% at the end of Q1 2022 [12] - Book value per share decreased slightly to $20.46 from $20.62 at year-end [16] Q&A Session Summary Question: Can you provide more detail on better-than-expected payrolls? - Management indicated payroll growth was up 7.3%, with significant contributions from services and construction sectors [19] Question: What is the comparison number for audit and adjustment premiums from last year? - Last year's second quarter audit and other premiums were $0.5 million [24] Question: What is the outlook for new money yield versus book yield? - New money rates have risen, and management is looking to invest longer due to attractive yields [26] Question: How is the competitive environment for signing new customers? - The competitive market remains steady, with no significant changes in the ability to sign new customers [30] Question: Can you provide context on claim frequency compared to pre-COVID levels? - Claim frequency is down compared to pre-COVID levels, with reported claims in Q1 2021 being less than 1,000 [36]