Employers (EIG) Q4 2025 earnings summary

Executive summary

• Strategic actions in 2025 addressed increased California cumulative trauma (CT) claim frequency through targeted pricing, reserving, and underwriting, with expectations for reduced written premium in 2026.

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

• Maintained strong retention rates and policy growth in small commercial franchise, supported by automation, digital distribution, and AI-driven innovation.

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

• Continued disciplined underwriting, prudent risk management, and strategic investments, validated by A.M. Best's reaffirmed A rating.

Financial highlights

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

• Net premiums earned rose 2% to $761.9 million; net investment income increased 9% to $116.7 million for the year and 18% to $31.4 million in Q4.

• Loss and LAE ratio increased to 76.4% from 60.9% year-over-year; combined ratio excluding LPT rose to 111.7% from 98.6%.

• Adjusted net income for 2025 was $21.8 million, with Q4 adjusted net income at $14.5 million, both down sharply year-over-year.

• Returned $215.4 million to shareholders in 2025 through share repurchases and dividends; book value per share including deferred gain rose 11% to $51.31.

Outlook and guidance

• Underwriting and pricing actions are expected to position the company for a return to historical profitability, with written premium expected to decline in 2026 due to California actions and selective business exits.

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

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