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 down from the prior year; net income for Q2 2024 was $31.7 million, with strong new and renewal premium growth and a record 128,522 policies in-force.

• Written premium growth was driven by a 9% increase in new business and a 10% increase in renewal business, with gross premiums written up 5% to $208 million.

• Net premiums earned increased 6% year-over-year for Q2, reaching $188 million.

• All major distribution channels contributed to a 10% increase in gross written premiums, excluding audit premium adjustments.

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

Financial highlights

• Gross premiums written were $208 million for Q2 2024, up 5% year-over-year; net premiums earned were $188 million, up 6%.

• Losses and loss adjustment expenses rose 20% to $109 million, mainly due to higher net earned premiums and less favorable prior-year reserve development.

• Net investment income was $27 million, up 0.4% year-over-year; net realized and unrealized gains on investments were $2.2 million for Q2.

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

• 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, with strong capital and liquidity positions and no plans to suspend dividends or repurchases.

• Book value per share including deferred gain increased 14% to $44.91; adjusted book value per share rose over 10% to $48.89 year-over-year.

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