Employers (EIG) Q2 2024 earnings summary

Executive summary

• Adjusted net income per share was $1.10, while net income per diluted share was $1.25; both declined year-over-year.

• Gross premiums written increased 5% to $207.9 million, and net premiums earned rose 6% to $187.8 million for Q2 2024.

• Record 128,522 policies in force as of June 30, 2024, with $769 million in in-force premium.

• Strategic initiatives include digital transformation, enhanced agent/customer experiences, and diversification outside California.

• Revenue growth was driven by higher new and renewal premiums, strong net investment income, and net investment gains.

Financial highlights

• Gross premiums written were $207.9 million for Q2 2024 and $418.7 million for the six months, up 5% and 6% year-over-year.

• Net investment income was $26.9 million for Q2, up slightly year-over-year; net realized/unrealized gains on investments were $2.2 million.

• Combined ratio (excluding LPT) was 95.4% for Q2 2024; GAAP combined ratio was 94.2%.

• Book value per share including deferred gain was $44.91 at June 30, 2024; adjusted book value per share was $48.89.

• Underwriting and general/admin expense ratio improved to 22.0% from 26.0% a year ago.

Outlook and guidance

• Management expects continued improvements in combined ratio and adjusted book value per share.

• Top-line growth is expected to remain positive, though audit premium pickups are moderating due to slower employment and wage growth.

• Ongoing focus on digital innovation, agent efficiency, and direct-to-customer offerings to drive growth.

• Diversification of premium outside California and into new low- to-medium hazard business classes continues.

• New reinsurance program effective July 1, 2024, provides $190 million in coverage excess of $10 million retention per occurrence.