Employers (EIG) Q2 2025 earnings summary

Executive summary

• Net income was $29.7 million for Q2 2025, down 6% year-over-year, and adjusted net income was $11.5 million, a 58.8% decrease from the prior year, mainly due to higher loss and LAE ratios driven by cumulative trauma claims in California.

• Gross premiums written declined 2.2% to $203.3 million, while net premiums earned increased 6% to $198.3 million, supported by a record 134,421 policies in force, up 5% year-over-year.

• The company maintained strong capital adequacy, no debt, and an "A" AM Best rating, returning $31.4 million to shareholders via dividends and share repurchases.

• Focus remained on profitability over growth, with targeted underwriting actions impacting new business in the middle market and growth in small commercial clients.

• Investment results were strong, with net investment income up 1% to $27.1 million and net realized/unrealized gains of $20.9 million.

Financial highlights

• Combined ratio rose to 105.6% for Q2 2025, up from 94.2% in the prior year, driven by higher loss ratios.

• Loss and LAE ratio increased to 70.7% for Q2 2025, reflecting unfavorable loss trends, especially in California.

• Commission expense ratio improved to 13.2% from 13.9% year-over-year; underwriting expense ratio improved to 21.7% from 22.4%.

• Book value per share including deferred gain rose 12.8% to $49.44; adjusted book value per share up 8.2% to $51.68.

• Net investment income was $27.1 million, up slightly from the prior year.

Outlook and guidance

• Management expects continued pressure on loss ratios due to cumulative trauma claims in California and inflationary trends, with a full actuarial study planned in Q3.

• Focus remains on disciplined underwriting, expense control, and technology investments to support long-term profitability.

• Strong capital position supports increased dividends and new share repurchase authorization.