- First quarter net income, net income
excluding the impact of the LPT and operating income of $23.2
million, $20.3 million and $18.9 million, respectively.
- Annualized operating return on adjusted
equity of 8.0%.
- First quarter combined ratio of 94.9%
and combined ratio excluding the impact of the LPT of 96.6%, each
an improvement year-over-year.
- First quarter net written premiums of
$196.1 million, an increase of $7.4 million year-over-year.
- GAAP book value per share of $26.88,
book value per share of $32.20 and adjusted book value per share of
$29.65, increased 3.3%, 2.3% and 1.7%, respectively, in the first
quarter of 2017, including dividends declared.
- In-force payroll exposure increased
0.2% overall, year-over-year.
- In-force policies were flat overall,
year-over-year.
- Net earned premiums increased 1.6% in
the quarter, year-over-year.
- Net investment income increased $1.0
million in the quarter, year-over-year.
- Board of Directors approved quarterly
dividend per share of $0.15.
Employers Holdings, Inc. (“EHI” or the “Company”)
(NYSE:EIG) today reported net income and net income excluding
the impact of the LPT of $23.2 million ($0.70 per diluted share)
and $20.3 million ($0.62 per diluted share), respectively, for the
first quarter of 2017. Operating income was $18.9 million ($0.57
per diluted share) for the quarter ended March 31, 2017. The
Company’s underwriting and other operating expense ratio and loss
ratio before the LPT decreased in the quarter. The Company’s
commission expense ratio increased slightly over the previous
year’s first quarter.
Chief Executive Officer Douglas Dirks commented on the
results:
“We are pleased with our first quarter 2017 results. Today we
reported higher premiums, underwriting income and investment income
for the first quarter compared with the comparable period last
year. We achieved an annualized return on adjusted equity of 8%,
consistent with last year's first quarter, as we grew stockholders’
equity and book value per share. We continue to drive strong new
business growth and maintain high levels of retention for our
in-force policies, despite competitive market conditions, while
improving loss costs. Our claim trends continue to be positive in
terms of declining frequency and we have been successful in closing
claims on an accelerated basis.
“Given the strength of our balance sheet, the strong execution
of our underwriting, claims and investment strategies and our
active capital management, we believe that we are well positioned
for the current market cycle.”
First Quarter 2017
Results
(All comparisons vs. first quarter 2016, unless noted
otherwise).
Net income of $23.2 million increased $1.4 million. The increase
in net income reflects increases in net investment income, realized
gains, underwriting income, net earned premium, lower underwriting
and other operating expenses and slightly higher income tax
expense. Our effective tax rate of 21.4% was consistent with that
of the first quarter of 2016.
Underwriting results
- The combined ratio before the impact of
the LPT remained strong at 96.6%.
- The loss ratio before the LPT of 63.8%
decreased 0.2 percentage points.
- The commission expense ratio of 12.3%
increased 0.5 percentage points due to higher base commissions paid
in the first quarter of 2017 and a true-up of agency incentive
commissions that lowered our commissions during the first quarter
of 2016.
- The underwriting and other expense
ratio of 20.4% decreased 0.6 percentage points due to lower bad
debt, premium taxes and assessments.
Gross written premiums of $197.6 million increased $6.9 million
due to higher final audit premium and new business growth. The
increase in final audit pickup can be attributed to higher payroll
at final audit driven by increases in hours worked and the number
of full-time employees.
In-force premium in states outside California grew 0.8% while
in-force premium in California decreased by 1.5%. Policy count
outside of California grew 5.3% while policy count in California
declined 5.0%. Retention remained high and overall renewal premiums
were flat in the first quarter year-over-year with increases in
payroll exposure being offset by a 1.8% decrease in average
rate.
Net investment income of $18.8 million increased $1.0 million
relative to the first quarter of last year, driven by an increase
in invested assets and a slight shift in asset mix. Net realized
gains on investments were $2.2 million in the first quarter
compared with $1.5 million in the first quarter of last year.
Recently Adopted Accounting
Standard
In March 2016 the Financial Accounting Standards Board issued
Accounting Standards Update Number 2016-09, Compensation - Stock
Compensation (Topic 718) that impacted the net tax benefits on the
Company's stock-based compensation. The Company elected to early
adopt this standard in the third quarter of 2016 with an effective
date of January 1, 2016. Adoption of this standard resulted in a
$0.8 million reduction to income tax expense and a corresponding
increase to net income for the three months ended March 31,
2016.
Stockholders’ Equity including the
Deferred Gain, Second Quarter 2017 Dividend
Declaration
Stockholders’ equity plus Deferred reinsurance gain - LPT
Agreement was $1,039.4 million, an increase of 2.4% from year-end
2016, including an $8.0 million increase in after-tax net
unrealized investment gains.
The Board of Directors declared a second quarter 2017 dividend
of $0.15 per share. The dividend is payable on May 24, 2017 to
stockholders of record as of May 10, 2017.
Conference Call and Web Cast; Form
10-Q; Supplemental Materials
The information in this press release should be read in
conjunction with the financial supplement that is attached to this
press release and is available on our website.
Reconciliation of Non-GAAP Financial
Measures to GAAP
Within this earnings release we present various financial
measures, some of which are a "non-GAAP financial measure" as
defined in Regulation G pursuant to Section 401 of the Sarbanes -
Oxley Act of 2002. A description of these non-GAAP financial
measures, as well as a reconciliation of such non-GAAP measures to
the Company's most directly comparable GAAP financial measures is
included in the attached Financial Supplement. Management believes
that these non-GAAP measures are meaningful to the Company's
investors, analysts and other interested parties who benefit from
having an objective and consistent basis for comparison with other
companies within our industry. These non-GAAP measures are not a
substitute for GAAP measures and investors should be careful when
comparing the Company's non-GAAP financial measures to similarly
titled measures used by other companies. Other companies may
calculate these measures differently, and, therefore, these
measures may not be comparable.
The Company will host a conference call on Thursday,
April 27, 2017, at 8:30 a.m. Pacific Daylight Time. The
conference call will be available via a live web cast on the
Company's web site at www.employers.com. An archived version will be
available several hours after the call. The conference call replay
number is (404) 537-3406 or (855) 859-2056 with a pass code of
98293259.
EHI expects to file its Form 10-Q for the quarter ended
March 31, 2017, with the Securities and Exchange Commission
(“SEC”) on or about Thursday, April 27, 2017. The Form 10-Q
will be available without charge through the EDGAR system at the
SEC's web site and will also be posted on the Company's website,
www.employers.com, through the
“Investors” link.
The Company provides a list of portfolio securities in the
Calendar of Events, “Investors” section of its website at
www.employers.com. The Company also
provides investor presentations on its website.
Forward-Looking
Statements
In this press release, the Company and its management discuss
and make statements based on currently available information
regarding their intentions, beliefs, current expectations, and
projections of, among other things, the Company's future
performance, business growth, retention rates, loss costs and claim
trends. Certain of these statements may constitute
"forward-looking" statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by the fact that they do not relate
strictly to historical or current facts and are often identified by
words such as "may," "will," "could," "would," "should," "expect,"
"plan," "anticipate," "target," "project," "intend," "believe,"
"estimate," "predict," "potential," "pro forma," "seek," "likely,"
or "continue," or other comparable terminology and their negatives.
EHI and its management caution investors that such forward-looking
statements are not guarantees of future performance. Risks and
uncertainties are inherent in EHI's future performance. Factors
that could cause the Company's actual results to differ materially
from those indicated by such forward-looking statements include,
among other things, those discussed or identified from time to time
in EHI's public filings with the SEC, including the risks detailed
in the Company's Quarterly Reports on Form 10-Q and the Company's
Annual Reports on Form 10-K. Except as required by applicable
securities laws, the Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events, or otherwise.
The SEC filings for EHI can be accessed through the “Investors”
link on the Company's website, www.employers.com, or through the SEC's EDGAR
Database at www.sec.gov (EHI EDGAR CIK
No. 0001379041).
Copyright © 2017 EMPLOYERS. All rights reserved. EMPLOYERS® and
America's small business insurance specialist. ® are registered
trademarks of Employers Insurance Company of Nevada. Employers
Holdings, Inc. is a holding company with subsidiaries that are
specialty providers of workers' compensation insurance and services
focused on select, small businesses engaged in low to medium hazard
industries. Insurance subsidiaries include Employers Insurance
Company of Nevada, Employers Compensation Insurance Company,
Employers Preferred Insurance Company, and Employers Assurance
Company, all rated A- (Excellent) by A.M. Best Company.
Additional information can be found at: http://www.employers.com.
Employers Holdings, Inc.
First Quarter 2017 Financial Supplement
EMPLOYERS HOLDINGS, INC.
Table of Contents
Page
1
Consolidated Financial Highlights
2
Summary Consolidated Balance Sheets
3
Summary Consolidated Income Statements
4
Return on Equity
5
Combined Ratios
6
Roll-forward of Unpaid Losses and LAE
7
Consolidated Investment Portfolio
8
Book Value Per Share
9
Earnings Per Share
10
Non-GAAP Financial Measures
EMPLOYERS HOLDINGS, INC.
Consolidated Financial Highlights
(unaudited)
$ in millions, except per share
amounts
Three Months Ended March 31,
2017 2016* % change Selected
financial highlights: Gross insurance premiums written $ 197.6
$ 190.7 4 % Net insurance premiums written 196.1 188.7 4 % Net
insurance premiums earned 175.3 172.6 2 % Net investment income
18.8 17.8 6 % Underwriting income 8.9 8.7 2 % Net income before
impact of the LPT1 20.3 18.7 9 % Operating income1 18.9 17.8 6 %
Net income 23.2 21.8 6 % Comprehensive income 31.2 41.6 (25 )%
Total assets 3,833.6 3,796.8 1 % Stockholders' equity 867.5 803.7 8
% Stockholders' equity including deferred reinsurance gain2 1,039.4
990.1 5 % Adjusted stockholders' equity2 956.9 886.7 8 % Annualized
operating return on adjusted stockholders' equity3 8.0 % 8.1 % (1
)%
Amounts per share: Cash dividends declared per share $
0.15 $ 0.09 67 % Net income per diluted share4 0.70 0.66 6 % Net
income before impact of the LPT per diluted share4 0.62 0.57 9 %
Operating income per diluted share4 0.57 0.54 6 % GAAP book value
per share2 26.88 24.74 9 % Book value per share2 32.20 30.48 6 %
Adjusted book value per share2 29.65 27.30 9 %
Combined ratio
before impact of the LPT:5 Loss and loss adjustment
expense ratio: Current year 63.8 % 64.1 % Prior year — % (0.1 )%
Loss and loss adjustment expense ratio 63.8 % 64.0 % Commission
expense ratio 12.3 % 11.8 % Underwriting and other operating
expense ratio 20.4 % 21.0 % Combined ratio before impact of the LPT
96.6 % 96.8 % 1 See Page 3 for calculations and Page 10 for
information regarding our use of Non-GAAP Financial Measures. 2 See
Page 8 for calculations and Page 10 for information regarding our
use of Non-GAAP Financial Measures. 3 See Page 4 for calculations
and Page 10 for information regarding our use of Non-GAAP Financial
Measures. 4 See Page 9 for calculations and Page 10 for information
regarding our use of Non-GAAP Financial Measures. 5 See Page 5 for
calculations and Page 10 for information regarding our use of
Non-GAAP Financial Measures. *The Company adopted ASU Number
2016-9, Stock Compensation in the third quarter of 2016 with an
effective date of January 1, 2016. Adoption of this standard
resulted in a $0.8 million reduction to our income tax expense for
the three months ended March 31, 2016.
EMPLOYERS HOLDINGS, INC.
Summary Consolidated Balance Sheets
(unaudited)
$ in millions, except per share
amounts
March 31, 2017 December 31,
2016 ASSETS Investments, cash and cash equivalents $
2,673.2 $ 2,623.4 Accrued investment income 20.1 20.6 Premiums
receivable, net 323.8 304.7 Reinsurance recoverable on paid and
unpaid losses 581.0 588.7 Deferred policy acquisition costs 48.1
44.3 Deferred income taxes, net 52.1 59.4 Contingent commission
receivable—LPT Agreement 31.1 31.1 Other assets 104.2 101.2
Total assets $ 3,833.6 $ 3,773.4
LIABILITIES Unpaid losses and LAE $ 2,298.2 $ 2,301.0
Unearned premiums 330.8 310.3 Commissions and premium taxes payable
49.3 48.8 Deferred reinsurance gain—LPT Agreement 171.9 174.9 Notes
payable 32.0 32.0 Other liabilities 83.9 65.8 Total
liabilities $ 2,966.1 $ 2,932.8
STOCKHOLDERS' EQUITY
Common stock and additional paid-in capital $ 373.3 $ 372.6
Retained earnings 795.4 777.2 Accumulated other comprehensive
income, net 82.5 74.5 Treasury stock, at cost (383.7 ) (383.7 )
Total stockholders’ equity 867.5 840.6 Total
liabilities and stockholders’ equity $ 3,833.6 $ 3,773.4
Stockholders' equity
including deferred reinsurance gain 1 $ 1,039.4 $ 1,015.5 Adjusted
stockholders' equity 1 956.9 941.0 GAAP
Book Value per Share 1 $ 26.88 $ 26.16 Book value per share 1 32.20
31.61 Adjusted Book Value per Share 1 29.65
29.29 1 See Page 8 for calculations and Page 10 for
information regarding our use of Non-GAAP Financial Measures.
EMPLOYERS HOLDINGS, INC.
Summary Consolidated Income Statements
(unaudited)
$ in millions, except per share
amounts
Three Months Ended March 31, 2017
2016* Underwriting revenues: Gross premiums
written $ 197.6 $ 190.7 Premiums ceded (1.5 ) (2.0 ) Net premiums
written 196.1 188.7 Net premiums earned 175.3 172.6
Underwriting
expenses: Losses and LAE incurred (109.0 ) (107.3 ) Commission
expense (21.5 ) (20.3 ) Underwriting and other operating expenses
(35.9 ) (36.3 )
Underwriting income 8.9 8.7 Net investment
income 18.8 17.8 Other income — 0.1 Interest expense (0.4 ) (0.4 )
Net realized gains on investments 2.2 1.5 Income tax expense (6.3 )
(5.9 )
Net income 23.2 21.8 Net unrealized gains on
investments arising during the period, net of tax 9.4 20.8
Reclassification adj. for realized gains in net income, net of tax
(1.4 ) (1.0 )
Comprehensive income $ 31.2
$ 41.6 Add (subtract) Amortization of deferred
reinsurance gain - losses $ (2.4 ) $ (2.6 ) Amortization of
deferred reinsurance gain - contingent commission (0.5 ) (0.5 ) LPT
reserve adjustment — — LPT contingent commission adjustments —
—
Net income before impact of the LPT
Agreement 1 $ 20.3 $ 18.7
Add (subtract) Impact of the LPT Agreement $ (2.9 ) $ (3.1 ) Net
realized losses (gains) on investments, net of tax (1.4 ) (1.0 )
Amortization of intangibles, net of tax — 0.1
Operating income 1 $ 18.9 $ 17.8
1 See Page 10 regarding our use of Non-GAAP Financial
Measures. *The Company adopted ASU Number 2016-9, Stock
Compensation in the third quarter of 2016 with an effective date of
January 1, 2016. Adoption of this standard resulted in a $0.8
million reduction to our income tax expense for the three months
ended March 31, 2016.
EMPLOYERS HOLDINGS, INC.
Return on Equity (unaudited)
$ in millions, except per share
amounts
Three Months Ended March 31, 2017
2016* Net income A $ 23.2 $ 21.8
Add (subtract): Impact of LPT Agreement (2.9 ) (3.1 ) Net realized
losses (gains) on investments, net of tax (1.4 ) (1.0 )
Amortization of intangibles, net of tax — 0.1
Operating income 1 B $ 18.9
$ 17.8 Stockholders' equity - end of period $
867.5 $ 803.7 Stockholders' equity - beginning of period
840.6 760.8
Average stockholders' equity C
$ 854.1 $ 782.3 Stockholders'
equity - end of period $ 867.5 $ 803.7 Add (subtract): Deferred
reinsurance gain 171.9 186.4 Accumulated other comprehensive
income, net of tax (82.5 ) (103.4 ) Adjusted stockholders' equity -
end of period 956.9 886.7 Adjusted stockholders' equity - beginning
of period 941.0 866.7
Average adjusted
stockholders' equity 1 D $ 949.0
$ 876.7 Return on stockholders' equity
A /
C 2.7 % 2.8 %
Annualized return on stockholders' equity
10.9 % 11.1 % Operating return on adjusted stockholders'
equity 1
B / D 2.0 % 2.0 %
Annualized operating return on
adjusted stockholders' equity 1 8.0 %
8.1 % 1 See Page 10 for information regarding our use of
Non-GAAP Financial Measures. *The Company adopted ASU Number
2016-9, Stock Compensation in the third quarter of 2016 with an
effective date of January 1, 2016. Adoption of this standard
resulted in a $0.8 million reduction to our income tax expense for
the three months ended March 31, 2016.
EMPLOYERS HOLDINGS, INC.
Combined Ratios (unaudited)
$ in millions, except per share
amounts
Three Months Ended March 31, 2017
2016 Net premiums earned
A $ 175.3 $ 172.6
Losses and LAE incurred
B 109.0 107.3 Amortization of
deferred reinsurance gain - losses 2.4 2.6 Amortization of deferred
reinsurance gain - contingent commission 0.5 0.5 LPT reserve
adjustment — — LPT contingent commission adjustments — —
Losses and LAE before impact of the LPT 1
C $ 111.9 $
110.4 Less: favorable prior year loss reserve development —
(0.3 ) Losses and LAE before impact of the LPT - current accident
year
D $ 111.9 $ 110.7 Commission expense
E 21.5 20.3 Underwriting and other operating expenses
F 35.9 36.3
GAAP combined
ratio: Loss and LAE ratio
B/A 62.2 % 62.2 % Commission
expense ratio
E/A 12.3 % 11.8 % Underwriting and other
operating expense ratio
F/A 20.4 % 21.0 % GAAP combined
ratio 94.9 % 95.0 % Combined ratio before
impact of the LPT: 1 Loss and LAE ratio before impact of the LPT
C/A 63.8 % 64.0 % Commission expense ratio
E/A 12.3 %
11.8 % Underwriting and other operating expense ratio
F/A
20.4 % 21.0 % Combined ratio before impact of the LPT
96.6 % 96.8 % Combined ratio before impact of the LPT:
current accident year 1 Loss and LAE ratio before impact of the LPT
D/A 63.8 % 64.1 % Commission expense ratio
E/A 12.3 %
11.8 % Underwriting and other operating expense ratio
F/A
20.4 % 21.0 % Combined ratio before impact of the LPT: current
accident year 96.6 % 96.9 % 1 See Page 10 for
information regarding our use of Non-GAAP Financial Measures.
EMPLOYERS HOLDINGS, INC.
Roll-forward of Unpaid Losses and LAE
(unaudited)
$ in millions
Three Months Ended March 31,
2017 2016 Unpaid losses and LAE at
beginning of period $ 2,301.0 $ 2,347.5 Reinsurance recoverable on
unpaid losses and LAE 580.0 628.2 Net unpaid losses
and LAE at beginning of period 1,721.0 1,719.3 Losses
and LAE incurred: Current year losses 111.9 110.7 Prior year losses
on voluntary business — — Prior year losses on involuntary business
— (0.3 ) Total losses incurred 111.9 110.4
Losses and LAE paid: Current year losses 4.7 4.7 Prior year losses
102.9 104.5 Total paid losses 107.6 109.2
Net unpaid losses and LAE at end of period 1,725.3 1,720.5
Reinsurance recoverable on unpaid losses and LAE 572.9 621.4
Unpaid losses and LAE at end of period $ 2,298.2 $
2,341.9
EMPLOYERS HOLDINGS, INC.
Consolidated Investment Portfolio
(unaudited)
$ in millions
March 31, 2017 December 31, 2016
Investment Positions:
Cost or
AmortizedCost
Net Unrealized Gain
(Loss)
Fair Value % Fair Value %
Fixed maturities $ 2,350.6 $ 44.7 $ 2,395.3 90 % $
2,344.4 89 % Equity securities 117.6 82.2 199.8 7 %
192.2 7 % Short-term investments 15.4 — 15.4 1 % 16.0 1 % Cash and
cash equivalents 58.6 — 58.6 2 % 67.2 3 % Restricted cash and cash
equivalents 4.1 — 4.1 — % 3.6
— % Total investments and cash $ 2,546.3 $ 126.9
$ 2,673.2 100 % $ 2,623.4 100 %
Breakout of Fixed Maturities: U.S. Treasuries and
Agencies $ 144.7 $ 4.0 $ 148.7 6 % $ 140.2 6 % States and
Municipalities 794.2 23.3 817.5 34 % 851.6 36 % Corporate
Securities 969.1 16.6 985.7 41 % 956.7 41 % Mortgage-Backed
Securities 396.9 0.9 397.8 17 % 353.5 15 % Asset-Backed Securities
45.7 (0.1 ) 45.6 2 % 42.4 2 %
Total fixed maturities $ 2,350.6 $ 44.7 $ 2,395.3
100 % $ 2,344.4 100 %
Weighted average book yield
3.1% 3.1% Weighted average tax equivalent yield 3.6%
3.6% Average credit quality (S&P) AA- AA- Duration
4.3 years 4.3 years
EMPLOYERS HOLDINGS, INC.
Book Value Per Share
(unaudited)
$ in millions, except per share
amounts
March 31, 2017 December 31,
2016 March 31, 2016 December 31, 2015
Numerators: Stockholders' equity A $ 867.5 $
840.6 $ 803.7 $ 760.8
Plus: Deferred reinsurance gain
171.9 174.9 186.4 189.5
Stockholders'
equity including deferred reinsurance gain 1 B
1,039.4 1,015.5 990.1 950.3 Less: Accumulated other comprehensive
income, net of tax 82.5 74.5 103.4 83.6
Adjusted stockholders' equity 1 C $ 956.9
$ 941.0 $ 886.7 $ 866.7
Denominator
(shares outstanding) D 32,276,213 32,128,922 32,483,983
32,216,480 GAAP book value per share 1
A / D $ 26.88
$ 26.16 $ 24.74 $ 23.62 Book value per share 1
B / D 32.20
31.61 30.48 29.50 Adjusted book value per share 1
C / D
29.65 29.29 27.30 26.90 Cash dividends declared per share $
0.15 $ 0.36 $ 0.09 $ 0.24
YTD Change
in: 2
GAAP book value per share 3.3 % 5.1 % Book value per share 2.3 %
3.6 % Adjusted book value per share 1.7 % 1.8 % 1 See Page
10 for information regarding our use of Non-GAAP Financial
Measures. 2 Reflects the change in book value per share after
taking into account dividends declared in the period.
EMPLOYERS HOLDINGS, INC.
Earnings Per Share (unaudited)
$ in millions, except per share
amounts
Three Months Ended March 31, 2017
2016* Numerators: Net income A $
23.2 $ 21.8 Add (subtract): Impact of the LPT Agreement (2.9 ) (3.1
)
Net income before impact of LPT 1
B $ 20.3 $ 18.7 Net realized losses (gains) on
investments, net of tax (1.4 ) (1.0 ) Amortization of intangibles,
net of tax — 0.1
Operating income 1
C $ 18.9 $ 17.8
Denominators:
Average common shares outstanding (basic)
D 32,327,784
32,413,818 Average common shares outstanding (diluted)
E
32,965,367 32,955,232
Net income per share: Basic
A / D $ 0.72 $ 0.67 Diluted
A / E 0.70 0.66
Net income before impact of the LPT per share: 1
Basic
B / D $ 0.63 $ 0.58 Diluted
B / E 0.62 0.57
Operating income per share: 1 Basic
C /
D $ 0.58 $ 0.55 Diluted
C / E 0.57 0.54 1 See
Page 10 for information regarding our use of Non-GAAP Financial
Measures. *The Company adopted ASU Number 2016-9, Stock
Compensation in the third quarter of 2016 with an effective date of
January 1, 2016. Adoption of this standard resulted in a $0.8
million reduction to our income tax expense for the three months
ended March 31, 2016.
Glossary of Financial
Measures
Within this earnings release we present the following measures,
each of which are a "non-GAAP financial measure" as defined in
Regulation G pursuant to Section 401 of the Sarbanes - Oxley Act of
2002. A reconciliation of these measures to the Company's most
directly comparable GAAP financial measures is included herein.
Management believes that these non-GAAP measures are important to
the Company's investors, analysts and other interested parties who
benefit from having an objective and consistent basis for
comparison with other companies within our industry. Management
further believes that these measures are more relevant than
comparable GAAP measures in evaluating our financial
performance.
The LPT Agreement is a non-recurring transaction that
does not result in ongoing cash benefits to the Company. Management
believes that providing non-GAAP measures that exclude the effects
of the LPT Agreement (amortization of deferred reinsurance gain,
adjustments to LPT Agreement ceded reserves and adjustments to
contingent commission receivable) is useful in providing investors,
analysts and other interested parties a meaningful understanding of
the Company's ongoing underwriting performance.
Deferred reinsurance gain reflects the unamortized gain
from the LPT Agreement. This gain has been deferred and is being
amortized using the recovery method, whereby the amortization is
determined by the proportion of actual reinsurance recoveries to
total estimated recoveries, except for the contingent profit
commission, which is being amortized through June 30, 2024.
Amortization is reflected in losses and LAE incurred.
Operating income (see Page 4 for calculations) is net
income excluding the effects of the LPT Agreement , net realized
gains (losses) on investments (net of tax) and amortization of
intangible assets net of tax). Management believes that providing
this non-GAAP measures is helpful to investors, analysts and other
interested parties in identifying trends in the Company's operating
performance because such items have limited significance to its
ongoing operations or can be impacted by both discretionary and
other economic factors and may not represent operating trends.
Stockholders' equity including the deferred reinsurance
gain is stockholders' equity including the deferred reinsurance
gain. Management believes that providing this non-GAAP measure is
useful in providing investors, analysts and other interested
parties a meaningful measure of the Company's total underwriting
capital.
Adjusted stockholders' equity (see Page 8 for
calculations) is stockholders' equity including the deferred
reinsurance gain, less accumulated other comprehensive income (net
of tax). Management believes that providing this non-GAAP measure
is useful to investors, analysts and other interested parties since
it serves as the denominator to the Company's operating return on
equity metric.
Return on stockholders' equity and Operating return on
stockholders' equity (see Page 4 for calculations).
Management believes that these profitability measures are widely
used by our investors, analysts and other interested parties.
GAAP book value per share , Book value per share and Adjusted
book value per share (see Page 8 for calculations). Management
believes that these valuation measures are widely used by our
investors, analysts and other interested parties.
Net income, Combined ratio and Combined ratio before impact
of the LPT (see Pages 3 and 5 for calculations). Management
believes that these performance and underwriting measures are
widely used by our investors, analysts and other interested
parties.
Net rate (which is defined as total premium in-force
divided by total insured payroll exposure) indicates the average
increase or decrease in premiums charged from period-to-period and
is a function of a variety of factors, including rate changes,
underwriting risk profiles and pricing, and changes in business
mix.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170426006519/en/
Employers Holdings, Inc.Media:Ty Vukelich,
775-327-2677tvukelich@employers.com.orAnalysts:Vicki Erickson
Mills, 775-327-2794vericksonmills@employers.com
Employers (NYSE:EIG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Employers (NYSE:EIG)
Historical Stock Chart
From Apr 2023 to Apr 2024