Employers (EIG) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $12.8 million, down from $28.3 million in Q1 2024, with net income per diluted share falling 53% to $0.52, while adjusted net income per diluted share rose 30% to $0.87.

• Gross premiums written increased 1% to $212.1 million, driven by renewals, with a record 133,121 policies in force as of March 31, 2025.

• Net premiums earned decreased 1% to $183.0 million, as higher renewal premiums were offset by lower new business and audit premiums.

• Net investment income reached $32.1 million, up 20% and the highest in company history, mainly from private equity and higher fixed maturity yields.

• Returned $27.5 million to shareholders via dividends and share repurchases; regular quarterly dividend raised 7% to $0.32 per share.

Financial highlights

• Losses and loss adjustment expenses rose 4% to $120.7 million, with a current accident year loss and LAE ratio of 66.0%.

• 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% year-over-year, aided by lower bad debt and compensation expenses.

• Commission expense ratio decreased to 12.6% from 13.6%, reflecting a release of commissions on non-performing policies.

• Book value per share (including deferred gain) increased 14% to $48.25; adjusted book value per share up 9% to $50.75.

Outlook and guidance

• Management expects further improvement in underwriting expense ratio throughout 2025 and a return to moderate new business growth while maintaining discipline.

• 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.

• Focus on disciplined underwriting, technology investment, and risk diversification for long-term profitability.