Employers (US:EIG)2024-11-01 02:37Financial Data and Key Metrics Changes - Net income per share increased by 124% year-over-year, while adjusted net income per share rose by 19% [8] - Gross premiums written decreased by 8% to $181 million, while net premiums earned increased by 1% to $187 million [11] - Loss and loss adjustment expenses were $118 million, compared to $115 million a year ago, with a loss and loss adjustment expense ratio of 63.9% [12] - Net investment income increased by 3% to $27 million, primarily due to higher yields on fixed maturity securities [14] - Stockholders' equity was positively impacted by $52 million of net after-tax unrealized gains from fixed maturity holdings [15] Business Line Data and Key Metrics Changes - The current accident year loss and LAE ratio on voluntary business was 64%, slightly above the 63.3% maintained throughout 2023 [9] - The underwriting and general administrative expense ratio improved to 23.2%, down from 23.6% a year ago [10][13] Market Data and Key Metrics Changes - The company experienced reductions in both premium audit pickup and audit accrual, impacting net written premium [24] - Policies in force during Q3 2024 increased more than in the first or second quarters of 2024, indicating growth from smaller policy size bands [25] Company Strategy and Development Direction - The appetite expansion effort contributed to a 7% increase in premium year-to-date, excluding adjustments from premium audit [18] - The company continues to seek new class codes for profitable growth and is not planning to halt this strategy [22] Management's Comments on Operating Environment and Future Outlook - Management noted that the labor market slowed over the summer but picked back up in September, which may have contributed to the lull in audit premiums [23] - There is downward pressure on loss costs expected in 2025, driven by decreases in frequency and moderate changes in severity [26] Other Important Information - The company repurchased $7 million of common stock at an average price of $45.27 per share during Q3 2024, with an additional $1 million repurchased in Q4 [16] - A fourth quarter 2024 regular quarterly dividend of $0.30 per share was declared, payable on November 27 [16] Q&A Session Summary Question: Growth prospects of appetite expansion - Management believes the appetite expansion strategy is ongoing and continues to find new class codes for growth [21][22] Question: Lull in audit premium pace - Management could not identify specific reasons for the lull but noted broader economic factors and volatility in employment growth [23][24] Question: Prognostication for aggregate loss costs - Management indicated that filings effective from January 1, 2025, show downward pressure on loss costs, with no significant changes expected [26]