Employers Holdings Inc · NYSE:EIG
Employers — Q4 2023 Earnings Presentation
27 slides from Employers's earnings presentation, Feb 16, 2024
Slide 1: Investor Presentation Fourth Quarter 2023
INVESTOR PRESENTATION Fourth Quarter 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements In this presentation, 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, economic or market
Slide 3: Business Overview
EMPLOYERS® Business Overview www.employers.com 3
Slide 4: Who We Are (the Numbers)
Who We Are (the Numbers) EMPLOYERS® is a mono-line writer of workers’ compensation (WC) insurance focused on low-to-medium hazard risk small businesses. MARKETS AND DISTRIBUTION $768 Million $740 Million Gross Written Premiums In-force Premium at December 31, 2023 (incl. est. audit premium) Low-to-M
Slide 5: Who We Are (the Words)
Who We Are (the Words) UNIQUE GROWTH Over 100-year operating history DRIVERS SPECIFIC TO EMPLOYERS Strong underwriting focus with Transforming how small established presence in attractive markets businesses and insurance agents utilize digital capabilities to improve Record number of policies in-for
Slide 6: What We Write
What We Write Top Ten Employer Classifications % of Premium Restaurants & Other Eating Places 17% Traveler Accommodation 6% Automobile Dealers 4% Services to Buildings and Dwellings 4% Automobile Repair and Maintenance 3% Real Estate Management 3% Schools 3% Offices of Physicians 3% Other Store Reta
Slide 7: Marketing And Distribution
Marketing And Distribution We market and sell our workers' compensation insurance products through: • Local, regional, specialty and national insurance agents and brokers; • National, regional, and local trade groups and associations; and • Direct-to-customer interactions. Traditional Insurance Spec
Slide 8: 2022 Workers' Compensation Market
2022 Workers’ Compensation Market RANK GROUP/COMPANY NAME DIRECT PREMIUMS WRITTEN MARKET SHARE % 1 TRAVELERS GRP $3,807,285,569 6.7 2 HARTFORD FIRE & CAS GRP $3,636,838,515 6.4 3 AMTRUST FINANCIAL SERV GRP $3,161,523,545 5.6 4 ZURICH INS GRP $2,749,958,192 4.8 5 CHUBB LTD GRP $2,441,329,450 4.3 6 LI
Slide 9: Market Conditions
Market Conditions In-Force Policies and Premium $750 175,000 $740 $700 150,000 $650 125,000 # of policies $ in millions 126,409 $627 $600 100,000 $550 85,494 BEFORE AFTER 75,000 COVID-19 COVID-19 PANDEMIC PANDEMIC $500 50,000 12/31/17 12/31/18 12/31/19 12/31/20* 12/31/21* 12/31/22* 12/31/23* In-Forc
Slide 10: COVID-19 Claims
COVID-19 Claims Total Incurred To-Date $9,000,000 $8.0M $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, 2020 2020 2020 2020 2021
Slide 11: Five-Year Annual Financial Performance
Five-Year Annual Financial Performance Adjusted EPS (Diluted) Adjusted ROE $3.83 8.6% 8.5% $3.20 7.6% $3.10 $2.93 6.6% $2.37 5.5% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Combined Ratio excluding LPT Adjusted Book Value per Share $47.26 98.0% 98.1% 96.0% $45.67 94.0% 93.4% 24.8% $43.78 26.9
Slide 12: Strategy, Innovation and Capital Strength
EMPLOYERS® Strategy, Innovation and Capital Strength www.employers.com 12
Slide 13: Strategic Diversification
Strategic Diversification (by in-force premium) December 31, 2023 All other CA 34% December 31, 2013 45% 28% 4% 4% 60% GA 5% 8% 4% 5% IL 3% NY FL Growth outside of California is providing further diversification. www.employers.com 13
Slide 14: Focus on Low-to-Medium Hazard Groups
Focus on Low-to-Medium Hazard Groups 93% in Hazard Groups A-E December 31, 2023 Lower Risk Data shown as a % of in-force premium Group A Group B 19% 24% Groups F-G 7% Group E Group C 8% 21% Higher Risk Group D 21% 7% in Hazard Groups F-G We employ a thoughtful and conservative underwriting approach
Slide 15: North Star of Ease
North Star of Ease In 2021, we announced our strategic North Star of Ease initiative to serve as a guide to making our internal operations Key Element #3 more seamless and scalable and our external The formation of a Test and Learn Center to understand systems more customer the impacts of our projec
Slide 16: Strong Capital Management
Strong Capital Management 2022 2023 $30.4M $76.4M Aggregate share repurchases Aggregate share repurchases (average cost per share of $39.68) (average cost per share of $38.78) $91.3M $29.4M Stockholder dividends declared Stockholder dividends declared (includes special dividends of $1.00 per share (
Slide 17: Strong History of Favorable Reserve Development
Strong History of Favorable Reserve Development Net Calendar Year Reserve Development Reserve Review in Recent Prior Accident Years ($ millions, excludes involuntary business) Reserves are reviewed $450 internally each quarter, $400 $382 with full reviews $350 $337 occurring in 2Q and 4Q $300 $305 $
Slide 18: 4Q23 Financial Update
EMPLOYERS® 4Q23 Financial Update www.employers.com 18
Slide 19: Fourth Quarter 2023 Highlights
Fourth Quarter 2023 Highlights Strong Extremely Insurance Financial Strong Operations Results Balance Sheet Adj. Net Income Gross Premiums Written Total Investments $36.1M and Cash $178.2M or $1.40/share +3% from 4Q22 $2.5B Net Investment 4Q23 Share In-Force Premiums Policies In-Force Repurchases In
Slide 20: Full Year 2023 Highlights
Full Year 2023 Highlights Strong Extremely Insurance Financial Strong Operations Results Balance Sheet Adj. Net Income Gross Premiums Written Stockholders’ Equity $101.7M incl. Deferred Gain $767.7M or $3.83/share +7% from 2022 $1.1B Net Investment 2023 Share Net Premiums Net Premiums Income Repurch
Slide 21: Investment Portfolio (at December 31, 2023)
Investment Portfolio (at December 31, 2023) $2.3 billion at fair value ($2.5 billion including cash) • High quality (average credit quality of A) • Highly liquid with $977 million unencumbered at the operating companies and available within 3 business days • Duration of 4.5 • 2023 total investment r
Slide 22: Environmental, Social and Governance (ESG)
EMPLOYERS® Environmental, Social and Governance (ESG) 2 0 2 3 TA S K F O R C E O N C L I M AT E R E L AT E D F I N A N C I A L D I S C L O S U R E S R E P O RT www.employers.com 22
Slide 23: Environmental
Environmental OUR INVESTMENT Our Investment Managers consider ESG criteria when evaluating investment opportunities. PORTFOLIO •Each of our Investment Managers are signatories to the United Nations Principles for Responsible Investment Group, an independent non-profit organization that encourages in
Slide 24: Social
Social • Committed to providing equal POLICYHOLDERS • The term "social inflation" employment opportunities to all qualified applicants AND THEIR generally refers to the trend of • Comprehensive Code of EMPLOYEES rising insurance costs due to increased litigation, plaintiff- Business Conduct and Ethi
Slide 25: Governance
Governance The Board Governance and Nominating Committee of our Board of Directors: Identifies and selects individuals qualified to serve as members of its Board and committees; Develops and recommends the Committee structure to the Board; Recommends to the Board a slate of Director-nominees f
Slide 26: Company Contact
Company Contact: Michael Paquette Executive Vice President, Chief Financial Officer (775) 327-2562 mpaquette@employers.com Katherine H. Antonello Michael S. Paquette President and Executive Vice President, Chief Executive Officer Chief Financial Officer www.employers.com 26
Slide 27: Additional Financial Information
Additional Financial Information Press Releases SEC Filings Reconciliation of Non-GAAP Financial Measures to GAAP Within this investor presentation we present various financial measures, some of which are "non-GAAP financial measures" as defined in Regulation G pursuant to Section 401 of the Sarbane