Amerisafe, Inc. · NASDAQ:AMSF
Amerisafe — Sidoti & Company NY Emerging Growth Institutional Investor Conference II (October 2008)
17 slides from Amerisafe's conference presentation, Oct 28, 2008
Slide 1: Sidoti & Company NY Emerging Growth Institutional Investor Conference II
Exhibit 99.1 Sidoti & Company, LLC NY Emerging Growth Institutional Investor Conference II October 28, 2008 Geoffrey R. Banta Janelle Frost EVP & Chief Financial Officer Vice President, Controller
Slide 2: Forward Looking Statements
Forward Looking Statements Statements made in this presentation that are not historical facts, including statements accompanied by words such as “will,” “believe,” “anticipate,” “expect,” “estimate,” “preliminary,” or similar words are forward-looking statements within the meaning of the Private Sec
Slide 3: Overview
Overview Specialty provider of workers’ compensation insurance Workers’ compensation insurance is statutorily required coverage and includes Medical expenses Temporary or permanent disability benefits Death benefits Focus on small to mid-sized employers engaged in hazardous industries Principally co
Slide 4: Focus on Hazardous Industries
Focus on Hazardous Industries Employers in hazardous industries pay substantially higher workers’ comp rates Our 2007 average premium rate per $100 of payroll is much higher than the national average Nature of work performed and inherent workplace danger of our target employers Less frequent but mor
Slide 5: Geographically Diverse Book of Business
Geographically Diverse Book of Business No state represents more than 11% of gross premiums written as of 12/31/07 Market share did not exceed 5% in any state through 12/31/07 Due to nature of our policyholders’ businesses, we have minimal terrorism exposure Competition is fragmented Distribution by
Slide 6: Risk Selection – Underwriting & Safety
Risk Selection – Underwriting & Safety Underwriting authority not Our Field Safety Professionals delegated to agents (“FSPs”) work from mobile locations and visit employer worksites Industry-specific risk analysis and rating tools developed In-depth knowledge of insureds’ over 22 years of underwriti
Slide 7: High-Touch Service Model - Claims & Premium Audit
High-Touch Service Model - Claims & Premium Audit Field Case Managers (“FCMs”) Field Audit Professionals perform located throughout the markets annual premium audits on expired voluntary policies, most performed at insured’s facilities Approximately 53 open indemnity claims per FCM as of 12/31/2007
Slide 8: Underwriting Environment - Loss Cost Trends
Underwriting Environment - Loss Cost Trends MN -2.6% WI -2.5% IA PA -10.2% NV -0.3% IL IN DE -17.8% -10.5% 1.6% CO -0.2% VA DC -14.4% -8.8% KS MO 2.5% MD -1.7% 5.6% -10.1% KY -5.1% NC 1.6% OK TN -3.1% AR 7.2% SC 9.8% -12.8% MS AL GA -9.5% 3.2% -4.7% TX LA -7.7% -8.6% AK -10.9% FL -18.4% Loss Cost De
Slide 9: Underwriting Environment - AMSF Pricing Trends
Underwriting Environment - AMSF Pricing Trends Most states set expected costs of medical and indemnity benefits (“loss costs”); we then apply a state filed loss cost multiplier (“LCM”) Even under increasingly competitive market, we remain focused on pricing discipline Policy Year Effective LCM 1.60
Slide 10: Scalable Infrastructure
Scalable Infrastructure Investments in technology have enhanced our ability to select risk, write profitable business, and cost-effectively administer our billing, claims, and audit functions. Net Underwriting Expense Ratio Gross Premiums Written Net Underwriting Expense Ratio 33.0% 32.1% $332.5 $32
Slide 11: Strong Financial Performance
Strong Financial Performance Consistent returns over the last eleven quarters 2007 Operating ROE of 24.1%¹ 2Q08 Operating ROE of 20.6%¹ BVPS Operating ROE (%) $13.00 $12.71 35% $12.50 $12.13 $12.00 $11.66 33% $11.50 $11.00 $10.84 30% 33.0% $10.50 $10.25 $10.00 $9.65 28% $9.50 $9.23 $9.00 $8.64 25% $
Slide 12: Return on Equity Drivers
Return on Equity Drivers Quarter Ending 6/30/2008 Loss Ratio 65.6% + Expense Ratio 19.6% + Policyholder Dividend Ratio 0.2% = Combined Ratio 85.4% Underwriting Profit 14.6% x Operating Leverage 1.16 = ROE from Underwriting 17.0% Pre-tax Investment Yield 3.8% x Investment Leverage 3.10 = ROE from Inv
Slide 13: Income Statement
Income Statement As of As of 2007 30-Jun-07 30-Jun-08 Revenues: Gross premiums written $327,761 $184,775 $166,972 Ceded premiums written (20,215) (9,860) (9,456) Net premiums written $307,546 $174,915 $157,516 Net premiums earned $306,906 $152,987 $146,443 Net investment income 30,208 14,358 15,222
Slide 14: Selected Balance Sheet Data
Selected Balance Sheet Data As of As of As of 31-Dec-06 31-Dec-07 30-Jun-08 Investments, Cash and Cash Equivalents 665,528 759,074 768,732 Amounts Recoverable from Reinsurers 109,603 76,915 69,500 Premiums Receivable, Net and Accrued Interest Receivable 150,305 159,229 180,472 Deferred Policy Acquis
Slide 15: Investment Portfolio - Profile
Investment Portfolio - Profile Carrying value of cash and investments was $769 MM at June 30, 2008 Average composite rating of AA+ (incl. effect of latest downgrades of Ambac and MBIA) Investment Portfolio Mix at June 30, 2008 Cash & Commercial Mortgage- Equities Cash Equivalents Backed Securities U
Slide 16: Portfolio Quality Issues
Portfolio Quality Issues As of6/30/08 . . . Subprimes constituted less than 1.6% of our total portfolio We held no preferred stock of any kind We held no i-bank stock or debt We held no stock or debt in AIG, Wachovia or WaMu We held no stock in Fannie or Freddie 16
Slide 17: Investment Opportunity
Investment Opportunity Niche focus on small to midsized employers engaged in hazardous industries Strong operating cash flows and operational leverage Specialized underwriting expertise developed over 22-year history Efficient expense structure and scalable business model Comparatively high investme