Employers (EIG) Q1 2025 earnings summary

Executive summary

• Adjusted net income rose 24% year-over-year to $21.3 million, driven by strong investment income and expense reductions, while net income fell to $12.8 million due to higher losses and investment losses.

• Gross premiums written increased 1% to $212.1 million, with a record 133,121 policies in force, reflecting 4% growth year-over-year.

• Returned $27.5 million to shareholders via dividends and share repurchases, including a 7% dividend increase to $0.32 per share and a new $125 million share repurchase program.

• Maintained an 'A' financial strength rating from AM Best, with no outstanding debt and strong capital adequacy.

Financial highlights

• Net premiums earned decreased 1% to $183.0 million; net investment income rose 20% to $32.1 million, the highest in company history.

• Losses and LAE increased 3.6% to $120.7 million, with a current accident year loss and LAE ratio of 66.0% (66.8% excluding LPT).

• Net realized and unrealized investment losses were $12.8 million, compared to gains of $11.4 million a year ago.

• Underwriting expense ratio improved to 23.4% from 25.0%; commission expense ratio decreased to 12.6% from 13.6%.

• Book value per share (including deferred gain) rose 12.3% to $48.25; adjusted book value per share up 8.5% to $50.75.

Outlook and guidance

• Management expects continued policy count growth, further appetite expansion into new low-to-medium risk industries, and improvement in underwriting expense ratio throughout 2025.

• Confident in financial strength, supporting a dividend increase and new share repurchase authorization.

• Monitoring potential impacts from tariffs, medical cost inflation, and macroeconomic changes; cautiously optimistic about resilience to recessionary headwinds.