Employers (EIG) Q2 2025 earnings summary

Executive summary

• Gross premiums written declined 2.2% year-over-year to $203.3 million, while net premiums earned increased 5.6% to $198.3 million, driven by prior period growth and a record 134,421 policies in force.

• Net income declined year-over-year, with Q2 2025 net income at $29.7 million and adjusted net income down 58.8% to $11.5 million, mainly due to higher loss and LAE ratios, especially in California.

• The company continues to grow with small commercial clients, leveraging automation and ease of use, while middle market new business declined.

• Returned $31.4 million to shareholders via dividends and share repurchases in Q2.

• Underwriting results turned negative, with losses of $11.0 million for Q2, compared to income in 2024.

Financial highlights

• Combined ratio rose to 105.6% for Q2 2025, up from 94.2% in 2024, driven by higher loss ratios.

• Loss and LAE ratio increased to 70.7% for Q2, up from 57.9% a year ago, reflecting unfavorable loss trends 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%.

• Net investment income was $27.1 million, up 1% year-over-year; net realized/unrealized gains on investments rose to $20.9 million.

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

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.

• Ongoing refinements to underwriting and pricing, with a focus on profitability and technology investments, are expected to support long-term growth.

• Liquidity and capital resources remain strong, with no anticipated need to suspend dividends or seek additional capital.