Employers Holdings Inc · NYSE:EIG
Employers — Merger or Acquisition (January 2008)
14 slides from Employers's merger presentation, Jan 11, 2008
Slide 1: Acquisition of AmCOMP
Acquisition of AmCOMP January 10, 2008
Slide 2: Forward-looking Statements
This slide presentation is for informational purposes only. It should be read in conjunction with our periodic reports filed with the Securities and Exchange Commission (SEC), all of which are available on the “Investor Relations” section of our website at www.employers.com. Forward-looking Statemen
Slide 3: Compelling Transaction
Compelling Transaction The acquisition of AmCOMP • Represents an excellent strategic fit Small to mid-sized businesses Disciplined underwriting Compatible technology • Accelerates EMPLOYERS growth and expansion Immediate premium volume growth Significant premium in EMPLOYERS targeted expansion state
Slide 4: Compelling Transaction (cont.)
Compelling Transaction (cont.) • Increases scale Diversifies earnings base Reduces expense ratio Enhances visibility with agents and customers • Provides meaningful synergies $10 million of annual pre-tax cost savings achievable by 2010 Use of A-rated paper should facilitate increased writings in Am
Slide 5: Key Transaction Terms
· $12.50 per share, $194 million equity value · 100% cash consideration · Expected financing sources: combination of debt and cash · Implied multiple of earnings of 9.5x and 11.5x for 2007E and 2008E, respectively (1) · 1.2x 12/31/07E GAAP book value (2) · Estimated closing: 2Q 2008 · Subject to reg
Slide 6: AmCOMP Business Overview
AmCOMP Business Overview • Mono-line workers’ compensation – Primarily focused on artisan contractors and “main street” classes of business – Founded in 1982 as a self-insurance fund for air-conditioning contractors • Florida is historically the largest state and represents approximately 30% of prem
Slide 7: AmCOMP Key Strengths
AmCOMP Key Strengths • Leading market presence in Florida and meaningful footprint in other Southeast and Midwest states • Strong, long-term agent relationships • Disciplined underwriting and pricing culture • Strong reserve position with favorable development each of the last 13 years • Loss preven
Slide 8: AmCOMP Financial Snapshot
Net Premium Written ($ Million) Net Operating Income ($ Million, excl. realized gains) Return on Equity (%) Calendar Year Combined Ratio (%) Loss Ratio Expense Ratio Dividend Ratio (1) (1) Annualized 9M 2007 Return on Equity (ROE), AmCOMP Form 10-Q dated 9/30/07, page 26 Source: AmCOMP filings with
Slide 9: AmCOMP Business
Policyholders by Industry Group Written Premium by State 29% 14% 23% 6% Direct Premiums Written: $ 175 Million % of Direct Premiums Written, 09/30/07 Miscellaneous 6% Contracting Manufacturing Office and Clerical 6% 40% 19% Florida Wisconsin Georgia Other 29% 13% Goods and Services 8% 7% Tennessee I
Slide 10: Diversifies EMPLOYERS Geographic Footprint
Employers Employers + AmCOMP Pro Forma 12% 17% 5% 19% % of Direct Premiums Written, 09/30/07 California Indiana 3% Texas Other 43% 11% 6% Wisconsin Florida Nevada California Nevada Other 71% 10% Direct Premiums Written: $ 268 Million Direct Premiums Written: $ 443 Million Tennessee 3% Diversifies EM
Slide 11: Expands EMPLOYERS Geographic Footprint
MT CO UT ID AZ NV CA OR FL NM MD TX OK KS NE SD ND WY WA KY ME NY PA NH MA CT VA WV OH IN IL NC TN SC AL AR LA MO IA MN GA MS VT NJ DE RI AmCOMP Employers Overlap Expands EMPLOYERS Geographic Footprint (1) By 2006 Direct Premiums Written for states, by 2006 Net Premiums Written for total U.S., A.M.
Slide 12: Compelling Financial Benefits
Compelling Financial Benefits • Cost savings Annual pre-tax savings of $10 million achievable by 2010 Phase-in of approximately 25% in 2008, approximately 75% in 2009 and 100% in 2010 Key areas of savings include: elimination of public company expenses, systems integration, and reduction in reinsura
Slide 13: Summary
Summary • Excellent strategic fit consistent with EMPLOYERS focus • Significantly expanded, diversified geographic footprint • Complementary markets • Increased scale • Meaningful synergies • Financial benefits
Slide 14: Analyst Contact
Analyst Contact: Vicki Erickson Vice President, Investor Relations Employers Holdings, Inc. (775) 327-2794 verickson@employers.com Gateway Drive Reno, NV. 89521-5906 (775) 327-2700 Douglas D. Dirks President & Chief Executive Officer Employers Holdings, Inc. William E. (Ric) Yocke Chief Financial Of
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