Employers Holdings (EIG) investor relations material

Executive summary

• Gross premiums written declined 2.2% year-over-year to $203.3M, while net premiums earned increased 5.6% to $198.3M, driven by strong prior-year growth and a record 4.6% increase in policies in force.

• Net income and adjusted net income fell sharply year-over-year, mainly due to higher loss and LAE ratios from a surge in California cumulative trauma (CT) claims.

• Focus on profitability led to targeted underwriting and improved risk selection, impacting growth in certain classes and jurisdictions.

• Returned $31.4M to shareholders in Q2 via dividends and share repurchases.

• Record 134,421 policies in force as of June 30, 2025, up 5% year-over-year.

Financial highlights

• Combined ratio rose to 105.6% for Q2 2025, up from 94.2% in 2024, driven by higher loss ratios.

• Loss and LAE ratio increased to 70.7% for Q2, reflecting unfavorable loss trends, especially in California.

• Commission expense ratio improved to 13.2% from 13.9%; underwriting expense ratio improved to 21.7% from 22.4%.

• Net investment income was $27.1M, up slightly year-over-year; net realized/unrealized gains reached $20.9M.

• Book value per share (including deferred gain) increased 12.8% to $49.44; adjusted book value per share rose 8.2% to $51.68.

Outlook and guidance

• Management expects continued pressure on loss ratios due to CT claims in California and inflationary trends.

• Full actuarial study planned for Q3 to address CT claim trends.

• Focus remains on disciplined underwriting, expense control, and technology investments to support long-term profitability.

• Liquidity and capital resources remain strong, with no anticipated need to suspend dividends or seek additional capital.

• Cautiously optimistic about maintaining a strong customer base despite headwinds from medical cost inflation and regulatory changes.