Employers (EIG) Q2 2024 earnings summary

Executive summary

• Adjusted net income per share was $1.10, with net income per diluted share at $1.25, both slightly down year-over-year, driven by higher new and renewal premiums, strong net investment income, and continued net investment gains.

• Gross premiums written increased 5% to $207.9 million, net premiums earned rose 6% to $187.8 million, and a record 128,522 policies were in force as of June 30, 2024.

• Strategic initiatives include digital transformation, enhanced agent and customer experiences, and diversification outside California, with 92% of in-force premium from lower-risk hazard groups.

• $27 million was returned to shareholders in Q2 2024 through dividends and share repurchases.

• The company operates as a single segment after integrating its direct-to-consumer Cerity business into mainstream operations in late 2023.

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, respectively.

• Net investment income was $26.9 million for Q2, with annualized total return on investments at 4.4% YTD.

• Combined ratio was 94.2% for Q2 (95.4% excluding LPT), up from 90.4% (91.5% excluding LPT) in 2023.

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

• Book value per share including deferred gain was $44.91, up 14% year-over-year; adjusted book value per share was $48.89, up 10.2%.

Outlook and guidance

• Management expects continued improvements in combined ratio and adjusted book value per share, with a focus on digital innovation, agent efficiency, and direct-to-customer offerings.

• In-force premiums, including estimated audit premium, increased to $769.3 million as of June 30, 2024.

• The company entered a new reinsurance program effective July 1, 2024, providing $190 million in coverage excess of $10 million retention per occurrence.