Employers (EIG) Q3 2025 earnings summary

Executive summary

• Reported a net loss of $8.3 million for Q3 2025 and an adjusted net loss of $25.5 million, primarily due to $38.2 million reserve strengthening for increased California cumulative trauma (CT) claims in recent accident years.

• Gross premiums written rose 1.4% to $183.9 million in Q3 2025, with policy-in-force up 4% year-over-year to a record 135,414, driven by renewal business and small commercial segment growth.

• Announced a $125 million debt-funded recapitalization plan to optimize capital structure and enhance shareholder returns, with share repurchase authorization increased to $250 million.

• Decisive actions in pricing, reserving, and underwriting, including a more conservative reserving approach and appetite expansion, to build resilience and support future profitability.

• Returned $52.7 million to shareholders in Q3 2025 via dividends and share repurchases.

Financial highlights

• Gross premiums written were $183.9 million for Q3 2025 and $599.3 million year-to-date; net premiums earned were $192.1 million for Q3 2025 and $573.4 million year-to-date.

• Losses and LAE surged to $186.6 million in Q3 2025, up 58.5% year-over-year, mainly due to reserve strengthening and higher CT claim frequency.

• Net investment income was $26.1 million for Q3 2025 and $85.3 million for the nine months, with net realized and unrealized gains of $21.2 million in Q3 2025.

• Adjusted net loss for Q3 2025 was $25.5 million, compared to adjusted net income of $20.2 million a year ago; nine-month adjusted net income was $34 million, down from $90 million last year.

• Combined ratio increased to 129.7% for Q3 2025 and 112.5% for the nine months, with loss and LAE ratio at 97.1% for Q3 2025.

Outlook and guidance

• Underwriting and pricing actions are expected to improve future accident year performance, with 2025 anticipated to outperform 2024 and 2023 at comparable maturities.

• Recapitalization and share repurchase initiatives are expected to reduce cost of capital, expand EPS, increase book value per share, and improve ROE.

• No significant growth expected in the next 12 months as focus remains on underwriting margin over top-line expansion.

• Management expects that recent reserve actions and California-specific underwriting changes fully address current loss trends.

• Fourth quarter will include a full internal and external reserve review, with no expected impact.