Employers Holdings Inc · NYSE:EIG
Employers — Q3 2024 Earnings Presentation
35 slides from Employers's earnings presentation, Oct 31, 2024
Slide 1: Investor Presentation Third Quarter 2024
INVESTOR PRESENTATION Third Quarter 2024
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: Highlights
Highlights 2023 Year and Excellent Capital Strong Enterprise Risk Solid Competitive 2024 Year-to-Date Adequacy and Financial Management Position in 2024 + Strong operating results Flexibility + Experienced management and Beyond and growth in book value + Strong STAT and GAAP team with strong risk +
Slide 4: Business Overview
Business Overview 4 I E M P L O Y E R S . C O M I C O N F I D E N T I A L
Slide 5: Who We Are
Who We Are EMPLOYERS® is a mono-line writer of workers’ compensation insurance focused on low-to-medium hazard risk small businesses Unique Growth Drivers Specific to EMPLOYERS Over 100-year operating Unique, long-standing strategic Transforming how small history, unique specialist distribution rela
Slide 6: What We Write
What We Write Top Ten Employer Restaurants & Other Eating Places 17% Classifications 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 Retailers 3% Whol
Slide 7: Markets and Distribution
Markets and Distribution EMPLOYERS® is a mono-line writer of workers’ compensation $600 Million insurance focused on low-to-medium hazard risk small businesses 3Q24 YTD Gross Written Premiums Low-to-Medium Hazard Focus Shown as a percentage of Specialty 9/30/24 in-force premium Agents, Distribution
Slide 8: Markets and Distribution Continued
Markets and Distribution Continued We market and Traditional Insurance Specialty Agents and DTC sell our workers' Agents and Brokers Distribution Partners Direct-to-customer compensation ~67% ~32 % at 12/31/23 ~1% of in-force premium of in-force premium of in-force premium at 12/31/23 at 12/31/23 in
Slide 9: Market Share
Market Share 2023 Property and Casualty Insurance Industry DI RECT DI RECT PREMI UMS PREMI UMS MARKET RANK GROUP/COMPANY NAME W RI TTEN EARNED SHARE % We are the 19th largest 1 TRAVELERS GRP 3,866,767,331 3,849,946,580 6.6 2 HARTFORD FIRE & CAS GRP 3,771,503,918 3,711,058,710 6.5 Workers’ Compensati
Slide 10: Accolades
Accolades In September 2024, Employers received the #3 spot on Newsweek’s 2024 list of Most Trustworthy Companies in America and the #7 spot in that publication’s 2024 ranking of Most Trustworthy Companies in the World. Each of these We were recently applauded by rankings were within the lists’ insu
Slide 11: Market Conditions
Market Conditions Reached record-levels of in-force premium and policies in-force in 3Q24 In-Force Policies $800 175,000 and Premium $767 In-Force Premium $750 150,000 Policies In-Force 129,879 $700 125,000 $650 100,000 $627 $600 85,494 75,000 $550 BEFORE AFTER COVID-19 COVID-19 PANDEMIC PANDEMIC $5
Slide 12: Current Initiatives and Strategy
Current Initiatives and Strategy 12 I E M P L O Y E R S . C O M I C O N F I D E N T I A L
Slide 13: Cerity Integration
Cerity Integration ® During the fourth quarter of 2023, we fully integrated Cerity’s operations into those of Employers. As a result, policies issued by Cerity and Employers are now administered and serviced consistently on a single platform, generating significant These actions, which are the effic
Slide 14: North Star of Ease
North Star of Ease KEY INVESTMENT STREAMS In 2021, we announced our strategic North Star of Distribution Ease initiative to serve as a guide to making our Our new agency partnership program better meets the needs of our highest-performing agency partners and internal operations more seamless and sca
Slide 15: Strategic Diversification
Strategic Diversification By in-force premium Growth outside of California is providing further diversification. All Other All 34% CA Other 45% 28% CA 60% 4% GA GA 5% 4% IL IL 3% 4% NY 5% FL FL 8% December 31, 2013 September 30, 2024 E M P L O Y E R S . C O M I C O N F I D E N T I A L I 15
Slide 16: Book Mix by Hazard Group
Book Mix by Hazard Group Our appetite expansion effort continues to be a large contributor to our profitability and growth in premium. Our loss ratios in these new segments continue to be in- line or better than our traditional segments and we expect to further benefit from this strategy well into t
Slide 17: Financial Performance
Financial Performance 17 I E M P L O Y E R S . C O M I C O N F I D E N T I A L
Slide 18: Third Quarter 2024 Highlights
Third Strong Financial Insurance Extremely Strong Quarter Results Operations Balance Sheet 2024 Highlights Adjusted Net Income Gross Premiums Written Total Investments and Cash $20.2M $181.2M or $0.81/share -8% from 3Q23 $2.6B 3Q24 Share Net Investment Gross Premiums Earned Repurchases Income $186.6
Slide 19: Third Quarter 2024 YTD Highlights
Third Strong Financial Insurance Extremely Strong Quarter Results Operations Balance Sheet 2024 YTD Highlights Adjusted Net Income Gross Premiums Written YTD Total Return on Investments $65.1M $599.9M or $2.57/share +2% from 3Q23 YTD 6.3% 3Q24 YTD Share Net Investment Gross Premiums Earned Repurchas
Slide 20: 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 21: Financial Strength
Financial Strength 21 I E M P L O Y E R S . C O M I C O N F I D E N T I A L
Slide 22: Investment Portfolio
Investment Portfolio $2.5 billion fair market value ($2.6 billion including cash) + High quality (average credit quality of A+) + 2023 total investment return of 7.9%, CLOs 3Q24 YTD total investment return of 6.3% 2% + Highly liquid ($1,034 million is unencumbered All at the operating companies and
Slide 23: Net Investment Income
Net Investment Income Our net investment income in 2022 and Up nearly 50% versus 2021 2023 was enhanced by $6.3M and $7.6M + Weighted average book yield of fixed + Proactive management of investments of incremental net investment income, maturity investments of 4.4% (versus 3.0% formerly on deposit
Slide 24: History of Reserve Strength
History of Reserve Strength Reserves are reviewed internally each quarter, with full reviews occurring in 2Q and 4Q $450 Reserve estimates are presented to $400 $382 $391 the Audit Committee of our Board of Directors each quarter $350 $337 $305 $300 Mid-year 2024 Reserve Study $267 $250 Recognized $
Slide 25: LPT Status
LPT Status Retroactive 100% quota share reinsurance coverage for all losses 6/30/95 and prior The LPT Agreement ($ million) Total coverage $2,000 Gain booked as statutory surplus; deferred & amortized under GAAP Original LPT reserves (liabilities) transferred 1,525 Non-recurring transaction Consider
Slide 26: Strong Capital Management
Strong Capital Management First nine months of 2024: First nine months of 2023: The shares we repurchased during the first nine months of 2024 and $31.4M $61.1M the first nine months of 2023 were accretive to our current book value Aggregate share repurchases, excl. excise taxes Aggregate share repu
Slide 27: Strong and Transparent Balance Sheet
Strong and Transparent Balance Sheet • Low premium leverage and reinsurance reliance Our balance sheet is • Favorable reserving track record strong and is unburdened by either legacy issues or • LPT protection a significant amount of goodwill and other • High-quality reinsurance recoverables intangi
Slide 28: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) 28 I E M P L O Y E R S . C O M I C O N F I D E N T I A L
Slide 29: Environmental
Environmental Our Investment Portfolio Our Natural Catastrophe Exposure Our Carbon Footprint Our Investment Managers consider Reinsurance models are used to develop We have made a major move to shift our ESG criteria when evaluating potential exposure to natural catastrophes workforce to sharply red
Slide 30: Social
Social Human Capital Policyholders and Their Employees Social Inflation + Committed to providing equal employment + Our Risk Advisory services are focused on + The term "social inflation" generally opportunities to all qualified applicants assisting policyholders in developing a positive refers to t
Slide 31: Governance
Governance Board and Management Information Security and Fraud Prevention Composition and Conduct Cybersecurity We aim to safeguard our policyholders to Our Annual Proxy Statements and Annual + Our operations rely on the secure processing, fight workers' compensation fraud Reports on Form 10-K provi
Slide 32: Governance Continued
Governance Continued The 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-nomine
Slide 33: Key Takeaways
Key Takeaways From our 3Q24 Earnings Release dated + Excellent market reputation and optimally positioned as a October 30, 2024: Workers’ Compensation specialist, “Our strong operating results, coupled with + Strong underwriting and investment performance, our proactive and opportunistic management
Slide 34: Contact Information
Contact Information Investor Relations Contact: Media Contact: Mike Paquette Kimberly Eye Executive Vice President, Vice President, Chief Financial Officer Marketing & Communications EMPLOYERS HOLDINGS, INC. mpaquette@employers.com keye@employers.com 5340 Kietzke Lane, Suite 202 Reno, Nevada 89511 K
Slide 35: Additional Financial Information
Additional Financial Information 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 Sarbanes-Oxley Act of 2002. A desc