Employers Holdings, Inc. Announces Integration Savings and Restructuring Charges
RENO, Nev. — Jan 23, 2009 — Employers Holdings, Inc. (“EMPLOYERS®”) (NYSE: EIG), a Nevada-based company whose subsidiaries are specialty providers of workers’ compensation insurance focused on small and medium-sized businesses, today announced a strategic restructuring plan to achieve the corporate and operational objectives set forth as part of its recently completed acquisition and integration of AmCOMP Incorporated, and in response to current economic conditions.
The restructuring plan includes a staff reduction of approximately 14 percent of the company’s total workforce, and planned consolidation of corporate activities into its Reno, Nevada headquarters. As a result of these actions, EMPLOYERS expects to achieve pre-tax cost savings of approximately $12 million in 2009 and annualized pre-tax cost savings of $20 to $22 million beginning in 2010. These amounts include previously announced anticipated cost savings of $7.5 million in 2009 and $10 million in 2010. The company expects to incur pre-tax restructuring charges of approximately $3 million in the first quarter 2009.
“The strategic restructuring plan announced today will enable EMPLOYERS to maximize the value of the AmCOMP acquisition, including staffing reductions consistent with the objectives established when we announced the transaction in January 2008,” said Douglas D. Dirks, President and Chief Executive Officer of Employers Holdings, Inc. “Given the unprecedented economic climate we and our customers face, additional measures are being taken that we believe are necessary to continue providing competitively priced products and quality services. These decisions are carefully considered and difficult to make, but required given the current environment.”
EMPLOYERS geographic offices and underwriting functions will remain in place, as they are today. A Regional Field Operation organization will be implemented, with geographic managers maintaining responsibility for day-to-day production, underwriting and profitability within their territories. All other corporate and support functions will be managed centrally in Reno and handled uniformly, companywide.
The job eliminations are anticipated to be in large part complete by mid-year 2009 and all of those impacted by the actions will be eligible for severance benefits and outplacement support.
EMPLOYERS will provide more information on its cost reduction charges during its 2008 calendar year earnings call currently planned for late February 2009.
Cautionary Statement Regarding Forward-Looking Language
This press release includes “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) reflecting the company’s expectations regarding future events. These statements are subject to certain risks and uncertainties that may cause actual results to differ from expectations including, without limitation, factors that affect the future performance of Employers Holdings, Inc., including the risks detailed in the Company’s Forms 10-Q for the periods ended March 31, June 30, and September 30, 2008 and the Company’s 2007 Annual Report on Form 10-K, filed with the SEC. Employers Holdings, Inc. undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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About Employers Holdings, Inc.
EMPLOYERS® and America’s small business insurance specialist® are registered trademarks of EIG Services, Inc. Employers Holdings, Inc. is a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services focused on select, small businesses engaged in low-to-medium hazard industries. The Company operates throughout the United States, with the exception of four states that are served exclusively by their state funds. Insurance is offered through Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, Employers Assurance Company and Cerity Insurance Company, all rated A- (Excellent) by the A.M. Best Company. Not all companies do business in all jurisdictions. See employersstage.wpengine.com and www.cerity.com for coverage availability.