Employers Holdings reports Q3 adjusted EPS ($1.10), consensus 60c

Reports Q3 revenue $239.2M, consensus $216.60M. CEO Katherine Antonello commented: “We once again ended the quarter with a record number of policies in-force, which were up 4% year-over-year. Third quarter gross premiums written increased 1%, and net premiums earned increased 3%, with growth in smaller policy size bands and strong renewals offsetting decreases within the middle market. Our ongoing appetite expansion initiative contributed to both policy count and premium growth. Targeted pricing and underwriting actions impacting certain classes and jurisdictions tempered our growth this quarter and confirmed our commitment to improving our underwriting margin over increasing our written premium. Strong investment income and continued net investment gains combined with our premium growth expanded total revenue by almost 7% in the quarter. During the third quarter, we took decisive action after completing a rigorous internal review of our reserves and comparing our selections to those of an external actuarial review performed mid-year. The result of our actions strengthened prior accident year loss and LAE reserves by $38.2 million, or 2.8% of net loss and LAE reserves. Accident years 2023 and 2024 were the primary contributors of the increase, with all remaining years decreasing by $18.4 million. In addition, we increased our accident year 2025 loss and LAE ratio from 69.0% to 72.0%. We believe these adjustments adequately address the recent increase in California cumulative trauma claim frequency, reflect our desire to utilize a more conservative approach across our complete book of business, and are not indicative of a broader issue within our book. If not for the increase in California cumulative trauma claim frequency, we believe the increase in the accident year 2025 loss and LAE ratio and the strengthening of prior year reserves would not have been necessary. We are confident this reserving action, along with our California specific rate and underwriting actions, fully reflects the impact of current loss trends.”