Employers Holdings Inc · NYSE:EIG
Employers — FY2019 Earnings Presentation
20 slides from Employers's earnings presentation, Feb 19, 2020
Slide 1: 2019 Annual Review
2019 ANNUAL REVIEW February 19, 2020
Slide 2: 2019 Highlights
2019 HIGHLIGHTS (The information in this presentation should be read in conjunction with the Financial Supplement that is included with this presentation and is available on our website) Pricing Discipline / Expansion Solid Balance Sheet Strong Bottom Line Operations Geographic • The Company’s custo
Slide 3: In-Force Policies and Premium
IN-FORCE POLICIES AND PREMIUM 3 www.employers.com
Slide 4: In-Force Growth (YoY)
IN-FORCE GROWTH (YOY) CALIFORNIA OVERALL 49.6% • of total premium • Premium DOWN 0.2% • Policies UP 7.8% Premium: Policies: • Average policy size DOWN 7.5% DOWN UP • Payroll exposure UP 17.5% (7.6%) 2.6% Now writing in all jurisdictions except for the four monopolistic states (WA, WY, ND, OH) AK ALL
Slide 5: Geographic Diversification (by policies in-force)
GEOGRAPHIC DIVERSIFICATION (by policies in-force) December 31, 2019 All other CA 30% 44% December 31, 2013 NV 3% 3% 31% IL 4% 4% 4% TX 6% 6% 57% GA 4% NY FL 3% 4% 4% - 5 - www.employers.com
Slide 6: Geographic Diversification (by in-force premium)
GEOGRAPHIC DIVERSIFICATION (by in-force premium) December 31, 2019 All other CA 33% 50% December 31, 2013 3% 4% 28% GA 5% IL 5% 60% 4% NY FL 5% 3% - 6 - www.employers.com
Slide 7: Business Flow and Efficiencies
BUSINESS FLOW AND EFFICIENCIES 7 www.employers.com
Slide 8: New Business Opportunities
NEW BUSINESS OPPORTUNITIES Our customer service initiatives are delivering strong new business opportunities but pricing pressures have limited binds as we maintain underwriting discipline. Cumulative growth in 120% new business activity 109% since 2015 Submissions and 100% (as measured by units) qu
Slide 9: Operating Efficiency
OPERATING EFFICIENCY Our policy count per employee continues to rise and is at an all-time high 750 99 100 91 725 In - 90 Force Policies (in000s) 716 85 84 85 700 702 704 693 Headcount 80 675 672 650 70 2015 2016 2017 2018 2019 Headcount In-Force Policies - 9 - www.employers.com
Slide 10: Operating Efficiency
OPERATING EFFICIENCY Our premium per employee has risen in recent years and is near an all-time high 750 $700 In - Force Premium(in$000,000s) 725 $675 $666 $665 716 700 $650 702 704 Headcount 693 $627 $620 675 $619 $625 672 650 $600 2015 2016 2017 2018 2019 Headcount In-Force Premium - 10 - www.empl
Slide 11: Operating Results
OPERATING RESULTS 11 www.employers.com
Slide 12: Shareholders' Equity and Net Income
SHAREHOLDERS’ EQUITY Stockholders’ equity including he AND NET INCOME Deferred Gain at 12/31/19 is the (unaudited, in Millions) highest in the Company’s history $1,400 $175 $1,303 $1,168 $1,200 $1,111 $157 $150 $1,016 $1,000 $950 $141 $125 GAAP Net Income $107 $800 $101 $94 $100 $600 $75 $400 $50 $2
Slide 13: Book Value per Share
BOOK VALUE PER SHARE $50 Book Value per Share Adjusted Book Value per Share Book Value per Share incl. Deferred Gain $41.55 $40 $35.64 $34.09 $31.61 $29.50 $30 $20 Value Per Share Per Value $10 $0 2015 2016 2017 2018 2019 Strong and Consistent Growth in Book Value per Share - 13 - www.employers.com
Slide 14: Statutory Surplus and Net Income
STATUTORY SURPLUS AND NET INCOME (unaudited, in Millions) Statutory surplus at 12/31/19 is the highest in the $1,200 Company’s history $200 $1,021 $175 $1,000 $928 $893 $829 $150 Statutory Net Income $159 $129 $800 $706 $117 $125 $600 $101 $88 $100 $400 Statutory Surplus Statutory $75 $200 $50 $0 $2
Slide 15: Financial Strength
FINANCIAL STRENGTH 15 www.employers.com
Slide 16: History of Reserve Strength
HISTORY OF RESERVE STRENGTH $77.5 Million Favorable Reserve Development in 2019 Reserve Review Net Calendar Year Reserve Development in Recent Prior Accident Years ($ millions, excludes involuntary business) $200.0 $186.4 Reserves are reviewed $180.0 internally each quarter $160.0 $140.0 $120.0 $108
Slide 17: Investment Portfolio
INVESTMENT PORTFOLIO $2.8 billion fair market value ($2.9 billion including cash) • High quality (average credit quality of A+) • Highly liquid ($1.6 billion is unencumbered and available within 3 business days) • Duration of 3.3 years • 2019 total investment return of 8.7% • 3.3% average ending pre
Slide 18: Net Investment Income
NET INVESTMENT INCOME (millions) Twelve Months Ended Three Months Ended $100.0 $25.0 $22.3 $22.6 $90.0 $88.1 $21.8 $21.3 $21.4 $81.2 $20.3 $20.2 $80.0 $20.0 $19.1 $19.4 $74.6 $18.8 $18.5 $72.2 $73.2 $18.2 $70.0 $60.0 $15.0 $50.0 $40.0 $10.0 $30.0 $20.0 $5.0 $10.0 $- $- 2015 2016 2017 2018 2019 1Q17
Slide 19: Stockholder Dividends Declared
STOCKHOLDER DIVIDENDS DECLARED $1.20 $1.00 $0.88 $0.80 $0.80 $0.60 $0.60 $0.40 $0.36 $0.24 $0.25 $0.20 Stockholder Dividends Declared per Share per Declared DividendsStockholder $- 2015 2016 2017 2018 2019 1Q 2020 Twelve Month Periods Three Month Period The Company currently expects that regular qua
Slide 20: Strong and Transparent Balance Sheet
STRONG AND TRANSPARENT BALANCE SHEET Low premium leverage Favorable reserving track record Loss Portfolio Transfer protection Strong and Transparent High-quality reinsurance recoverables Balance Sheet Low duration investment portfolio No significant intangible assets - 20 - www.employers.com