AMERISAFE(AMSF)2025-04-30 14:30Financial Data and Key Metrics Changes - For Q1 2025, Amerisafe reported net income of 0.47 per diluted share, down from 0.88 per diluted share in Q1 2024 [11] - Operating net income decreased to 0.60 per diluted share from 0.69 per diluted share year-over-year [11] - Gross written premiums increased by 4.6% to 80.1 million in Q1 2024 [11] - Net premiums earned rose by 60 basis points to 68.4 million in the prior year [12] - The expense ratio increased to 29.9% from 27.3% due to higher expenses related to business investments [12][13] Business Line Data and Key Metrics Changes - Premiums on policies written in the quarter grew by 7.1% over the prior year quarter, with a retention rate of 93.1% [7][8] - The company experienced 6.4 million in the previous year [8] Market Data and Key Metrics Changes - The competitive environment remains strong, driven by declining workers' compensation rates and challenges in other property and casualty lines [5][6] - The company noted a favorable frequency trend in claims, with a current accident year loss ratio of 71, consistent with the prior year [8] Company Strategy and Development Direction - Amerisafe continues to focus on incremental growth within its existing geographic footprint and risk appetite, leveraging relationships with agents and policyholders [5] - The company is investing in business growth despite a competitive market, aiming to maintain profitability [12] Management Comments on Operating Environment and Future Outlook - Management expressed caution regarding economic uncertainties such as tariffs, inflation, and interest rates, which could impact payrolls and premiums [6] - The company anticipates favorable frequency trends to continue, with modest severity trends expected [9] Other Important Information - The investment portfolio is of high quality, with a tax-equivalent book yield of 3.85% and a strong capital position [14][15] - Book value per share was reported at 243.6 million, up 3.6% from the previous year [15] Q&A Session Summary Question: Audit premium impact on previous quarters - Management provided audit premium figures for the previous year: Q1 was 7.3 million, Q3 was 2.5 million [22][24] Question: Impact of recent hurricanes on work activity - There was a slight increase in audit premiums for rebuilding classifications in North Carolina and Georgia, but not as much in Florida [26] Question: Potential tariff impacts on business - Tariffs could impact medical costs, particularly in pharmacy and durable medical equipment, which account for about 15% of medical costs in workers' compensation [29] Question: Changes in competitive dynamics - There has been no significant change in the competitive landscape during the first quarter [35] Question: Expense ratio and future expectations - The increase in the expense ratio was approximately $1.9 million, and costs are expected to moderate as the year progresses [37] Question: State loss cost updates - The trend remains a decline in rates, with average decreases between 6% to 8% across states [39] Question: Medical inflation trends - There are increases in physician care costs, likely due to labor costs rather than tariffs [41] Question: Large losses in the quarter - The company reported two large losses in the quarter, which is below trend [56]