Employers Holdings, Inc. Reports Third Quarter 2020 Results; Declares Fourth Quarter 2020 Cash Dividend of $0.25 per Share
Company to Host Conference Call on
Financial Highlights
- Net income of
$31.1 million , or$1.05 per diluted share; - Adjusted net income of
$14.1 million , or$0.48 per diluted share; - Net realized and unrealized gains on investments recorded through the income statement of
$19.1 million ; - Net investment income of
$18.5 million , down 17% year-over-year; - Net premiums earned of
$144.4 million , down 18% year-over-year; - Favorable prior year loss reserve development on voluntary business of
$15.0 million , versus$20.0 million a year ago; - The Company repurchased 314,241 shares of its common stock at an average price of
$29.75 per share; - Book value per share including the Deferred Gain of
$44.62 , up 3.3% for the quarter including dividends declared.
Management Commentary
Chief Executive Officer
Our new business writings were down sharply earlier in the year, but have rebounded since June. We are currently experiencing significant year-over-year increases in new business submissions and binds in nearly all the states in which we operate, with the notable exception of
The increase in new business activity we are seeing today is an encouraging sign that many of our targeted businesses have reopened and are resuming their operations, and that the significant investments we have made in delivering a superior customer experience for our agents and insureds are contributing to growth in our business in an unprecedentedly challenging time. We continue to actively manage our underwriting expenses with a view towards maintaining our target expense ratios despite the meaningful reductions in earned premium we have experienced thus far this year. We continue to believe that the COVID-19 pandemic will likely be more of a premium event than a capital event.
Summary of Third Quarter 2020 Operating Results
(All comparisons vs. third quarter 2019, unless noted otherwise).
Gross premiums written were
Losses and loss adjustment expenses were
Commission expenses were
Underwriting and general and administrative expenses were
Net investment income was
Income tax expense was
The Company’s book value per share of
Summary of Results by Segment
(see page 14 of the Financial Supplement for a description of our reportable segments. All comparisons vs. third quarter 2019, unless noted otherwise).
Employers Segment
The Employers segment reported net income before income taxes of
Highlights included the following:
– Underwriting income of
– Combined ratio of 95.2% versus 87.3%;
– Current accident year loss and LAE ratio of 65.3% versus 65.6%;
– Favorable prior year loss reserve development of 10.2 percentage points versus 11.4 percentage points;
– Commission expense ratio of 13.4% versus 12.5%;
– Underwriting expense ratio of 26.7% versus 20.6%;
– Net investment income of
– Net realized and unrealized gains on investments recorded through the income statement of
Cerity Segment
The Cerity segment reported a net loss before income taxes of
Corporate and Other
Corporate and Other activities reported a net loss before income taxes of
Highlights included the following:
– LPT amortization, which served to reduce losses and LAE, of
– Net investment income of
– General and administrative expenses of
Share Repurchases and Fourth Quarter 2020 Dividend Declaration
During the third quarter of 2020, the Company repurchased 314,241 shares of its common stock at an average price of
On
Earnings Conference Call and Webcast
The Company will host a conference call on
To participate in the live conference call by telephone, dial +1 (888) 364-8443 or +1 (484) 747-6630 and use the conference call access code 3787131.
The webcast will be accessible on the Company’s web site at www.employers.com through the “Investors” link. An archived version of the webcast will remain on the Company’s web site for up to seven days following the live call. To listen to a recording of the call by telephone, dial +1 (855) 859-2056 or +1 (404) 537-3406 and use the conference call access code 3787131.
Reconciliation of Non-GAAP Financial Measures to GAAP
The information in this press release should be read in conjunction with the Financial Supplement that is attached to this press release and is available on our website.
Within this earnings release we present various financial measures, some of which are “Non-GAAP financial measures” as defined in Regulation G pursuant to Section 401 of the Sarbanes - Oxley Act of 2002. A description of these Non-GAAP financial measures, as well as a reconciliation of such Non-GAAP measures to our most directly comparable GAAP financial measures is included in the attached Financial Supplement. Management believes that these Non-GAAP measures are important to the Company's investors, analysts and other interested parties who benefit from having an objective and consistent basis for comparison with other companies within our industry. Management further believes that these measures are more relevant than comparable GAAP measures in evaluating our financial performance.
Forward-Looking Statements
In this press release, the Company and its management discuss and make statements based on currently available information regarding their intentions, beliefs, current expectations, and projections of, among other things, the Company's future performance, business growth, retention rates, loss costs, claim trends and the impact of key business initiatives, future technologies and planned investments. Certain of these statements may constitute “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and are often identified by words such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “target,” “project,” “intend,” “believe,” “estimate,” “predict,” “potential,” “pro forma,” “seek,” “likely,” or “continue,” or other comparable terminology and their negatives. The Company and its management caution investors that such forward-looking statements are not guarantees of future performance. Risks and uncertainties are inherent in the Company’s future performance. Factors that could cause the Company's actual results to differ materially from those indicated by such forward-looking statements include, among other things, those discussed or identified from time to time in the Company’s public filings with the
Filings with the
The Company’s filings with the
About
EMPLOYERS® and America’s small business insurance specialist® are registered trademarks of
Forward-Looking Statements
In this press release, the Company and its management discuss and make statements based on currently available information regarding their intentions, beliefs, current expectations, and projections of, among other things, the Company's future performance, business growth, retention rates, loss costs, claim trends and the impact of key business initiatives, future technologies and planned investments. Certain of these statements may constitute “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and are often identified by words such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “target,” “project,” “intend,” “believe,” “estimate,” “predict,” “potential,” “pro forma,” “seek,” “likely,” or “continue,” or other comparable terminology and their negatives. The Company and its management caution investors that such forward-looking statements are not guarantees of future performance. Risks and uncertainties are inherent in the Company’s future performance. Factors that could cause the Company's actual results to differ materially from those indicated by such forward-looking statements include, among other things, those discussed or identified from time to time in the Company’s public filings with the U.S. Securities and Exchange Commission (the “SEC”), including the risks detailed in the Company's Quarterly Reports on Form 10-Q and the Company's Annual Reports on Form 10-K. Except as required by applicable securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Filings with the SEC
The Company’s filings with the SEC and its quarterly investor presentations can be accessed through the “Investors” link on the Company's website, www.employers.com. The Company’s filings with the SEC can also be accessed through the SEC's EDGAR Database at www.sec.gov (EDGAR CIK No. 0001379041).
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 www.employers.com and www.cerity.com for coverage availability.
Contact Information
Company contact:
Mike Paquette (775) 327-2562 or mpaquette@employers.com
Investor relations contact:
Adam Prior, The Equity Group, Inc. (212) 836-9606 or aprior@equityny.com
EMPLOYERS Contact
- Mike Paquette (775) 327-2562 or mpaquette@employers.com
