Employers Holdings, Inc. Reports First Quarter 2018 Results
- Net income of $25.6 million ($0.77 per diluted share), adjusted net income of $29.3 million ($0.88 per diluted share).
- Gross premiums written of $211.6 million, up 7% year-over-year.
- Underwriting income of $18.3 million versus $8.9 million a year ago.
- Combined ratio of 89.6%, combined ratio before the impact of the LPT of 91.1%.
Reno, Nevada-April 25, 2018-Employers Holdings, Inc. (“EHI” or the “Company”) (NYSE:EIG) today reported the following for the first quarter of 2018: (i) net income of $25.6 million ($0.77 per diluted share); (ii) net income before the impact of the LPT of $23.0 million ($0.69 per diluted share); and (iii) adjusted net income of $29.3 million ($0.88 per diluted share).
The Company's adjusted net income for the first quarter of 2018 increased $10.4 million year-over-year. This increase primarily reflects: (i) strong underwriting results highlighted by a 62.5% current accident year loss ratio before the impact of the LPT and $12.4 million of favorable prior year loss reserve development, and (ii) a reduction in our effective income tax rate from 21.4% to 12.9%, primarily reflecting the favorable impact of the December 2017 Tax Cuts and Job Act.
The Company's net income and net income before the impact of the LPT for the first quarter of 2018 increased by $2.4 million and $2.7 million, respectively, year-over-year. These first quarter 2018 net income measures were each adversely impacted by $10.2 million of after tax unrealized investment losses relating to the Company’s equity investments. Prior to January 1, 2018, the Company’s unrealized gains and losses on equity securities were not a component of net income or net income before the impact of the LPT.
The Company’s book value per share of $28.40 and book value per share including the Deferred Gain of $33.32 decreased by 1.6% and 1.7% during the first quarter of 2018, respectively, each computed after taking into account dividends declared. These first quarter 2018 book value measures were each adversely impacted by $35.8 million of after tax unrealized losses relating to the Company’s fixed maturity investments caused by an increase in market interest rates.
Chief Executive Officer Douglas Dirks commented on the results: “The first quarter marked a strong beginning to 2018 for EMPLOYERS. During the quarter we grew written premiums by 7% year-over-year, lowered our current accident year loss provision and recognized favorable development on our prior year loss reserves.
As a result of the addition of new writing states, an enhanced sales force and greater leveraging of our partnerships and alliances, we were able to increase our business writings. Loss costs and frequency trends continue to be favorable, despite highly competitive market conditions.
Our underwriting and other operating expense ratio increased by 1.8 percentage points in the quarter, in-line with our expectations as we develop and implement new digital capabilities.”