Employers (EIG) Q4 2025 earnings summary

Executive summary

• Strategic actions in 2025 addressed increased California cumulative trauma claim frequency through pricing, reserving, and underwriting changes, with a focus on disciplined risk management and technology-enabled ease of use.

• Launched a new excess workers' compensation product, leveraging AI for rapid development, exposure diversification, and customer expansion.

• Maintained strong retention rates in small commercial franchise, supported by automation and digital distribution investments.

• Recognized for trustworthiness and sustainability, earning accolades from Newsweek and Insurance Business America.

• A.M. Best reaffirmed financial strength rating of A.

Financial highlights

• Gross premiums written for 2025 were $756.1 million, down from $776.3 million in 2024; Q4 2025 gross premiums were $156.8 million, down 11% year-over-year.

• Net premiums earned rose 2% to $761.9 million; in-force policy count grew to 133,605, up 2% from 2024.

• Loss and LAE ratio increased to 76.4% from 60.9% year-over-year; GAAP combined ratio rose to 110.9% from 97.9%.

• Net investment income increased 9% to $116.7 million for the year and 18% to $31.4 million in Q4.

• Net realized and unrealized investment losses were $20.4 million for the year and $49.7 million in Q4, offsetting equity gains and reducing net income.

• Adjusted net income for 2025 was $21.8 million, down from $94.0 million in 2024; Q4 adjusted net income was $14.5 million, down from $28.7 million.

Outlook and guidance

• Recent underwriting and pricing actions are expected to position the company for a return to historical profitability.

• Further expense improvements anticipated through expanded use of AI tools and operational efficiencies.

• New excess workers' compensation product expected to drive diversification and customer growth, with first business written effective July 1.

• Share repurchases to return to normal levels in 2026, with opportunistic execution.