Employers Holdings reports Q1 adjusted EPS 67c, consensus 71c

Reports Q1 revenue $184.9M vs. $172.7M last year, consensus Gross premiums written increased 8%, from $194.9 million to $210.9 million; Net premiums earned increased 7%, from $172.7 million to $184.9 million. Chief Executive Officer Katherine Antonello commented: “Higher new and renewal premiums, strong and steady net investment income and moderate net investment gains drove an 8% increase in revenue year-over-year. We also ended the quarter with yet another record number of policies in-force, which were up 4% year-over-year. We recorded our current accident year loss and LAE ratio on voluntary business at 64.0%, slightly above the 63.3% we maintained throughout 2023 and consistent with that of 2022. As was the case in the first quarter of 2023, we did not recognize any prior year loss reserve development on our voluntary business because a full actuarial study was not performed and the amount of indicated net prior year loss reserve development was consistent with our expectations. We will evaluate our prior year reserves in more detail at mid-year when we routinely perform a full reserve study. Our commission expense ratio was 13.8%, up slightly from 13.5% a year ago. The increase related to higher new business writings, which are typically subject to higher initial commission rates, and an increase in anticipated 2024 agency incentives. Our underwriting and general and administrative expense ratio was 24.8%, a nice improvement from 25.7% a year ago. The decrease was primarily due to savings associated with the fourth quarter 2023 full integration of Cerity’s operations into those of Employers, partially offset by increases in payroll and benefit costs and bad debt expenses. In addition to the meaningful decrease in our expense ratio experienced this quarter, I am highly confident that we will continue to see further reductions for the balance of the year.”