AMERISAFE Announces 2024 Third Quarter Results
Three Months Ended |
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Nine Months Ended |
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|||||||||||||||
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2024 |
|
|
|
2023 |
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% Change |
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|
2024 |
|
|
|
2023 |
|
|
% Change |
|||
(in thousands, except per share data) | (in thousands, except per share data) | ||||||||||||||||||||
Net premiums earned |
$ |
67,050 |
|
$ |
66,634 |
|
0.6 |
% |
$ |
204,129 |
|
$ |
201,413 |
|
1.3 |
% |
|||||
Net investment income |
|
7,485 |
|
|
8,105 |
|
-7.6 |
% |
|
22,298 |
|
|
23,262 |
|
-4.1 |
% |
|||||
Net realized gains (losses) on | |||||||||||||||||||||
investments (pre-tax) |
|
158 |
|
|
5,133 |
|
-96.9 |
% |
|
(181 |
) |
|
5,466 |
|
NM |
|
|||||
Net unrealized gains (losses) on | |||||||||||||||||||||
equity securities (pre-tax) |
|
3,873 |
|
|
(7,309 |
) |
NM |
|
|
8,591 |
|
|
(3,892 |
) |
NM |
|
|||||
Net income |
|
14,324 |
|
|
9,961 |
|
43.8 |
% |
|
42,242 |
|
|
42,927 |
|
-1.6 |
% |
|||||
Diluted earnings per share |
$ |
0.75 |
|
$ |
0.52 |
|
44.2 |
% |
$ |
2.21 |
|
$ |
2.23 |
|
-0.9 |
% |
|||||
Operating net income |
|
11,140 |
|
|
11,680 |
|
-4.6 |
% |
|
35,598 |
|
|
41,684 |
|
-14.6 |
% |
|||||
Operating earnings per share |
$ |
0.58 |
|
$ |
0.61 |
|
-4.9 |
% |
$ |
1.86 |
|
$ |
2.17 |
|
-14.3 |
% |
|||||
Book value per share |
$ |
16.50 |
|
$ |
17.51 |
|
-5.8 |
% |
$ |
16.50 |
|
$ |
17.51 |
|
-5.8 |
% |
|||||
Net combined ratio |
|
90.9 |
% |
|
90.6 |
% |
|
89.6 |
% |
|
86.1 |
% |
|||||||||
Return on average equity |
|
18.6 |
% |
|
11.8 |
% |
|
18.6 |
% |
|
17.5 |
% |
INSURANCE RESULTS
Three Months Ended |
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Nine Months Ended |
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2024 |
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|
2023 |
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% Change |
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|
2024 |
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|
2023 |
|
|
% Change |
|||
(in thousands) |
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(in thousands) |
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|||||||||||||||
Gross premiums written |
$ |
74,940 |
|
$ |
70,840 |
|
5.8 |
% |
$ |
231,442 |
|
$ |
225,031 |
|
2.8 |
% |
|||||
Net premiums earned |
|
67,050 |
|
|
66,634 |
|
0.6 |
% |
|
204,129 |
|
|
201,413 |
|
1.3 |
% |
|||||
Loss and loss adjustment expenses incurred |
|
39,150 |
|
|
37,154 |
|
5.4 |
% |
|
119,765 |
|
|
111,808 |
|
7.1 |
% |
|||||
Underwriting and certain other operating | |||||||||||||||||||||
costs, commissions, salaries and benefits |
|
21,252 |
|
|
22,371 |
|
-5.0 |
% |
|
60,379 |
|
|
59,325 |
|
1.8 |
% |
|||||
Policyholder dividends |
|
513 |
|
|
804 |
|
-36.2 |
% |
|
2,634 |
|
|
2,225 |
|
18.4 |
% |
|||||
Underwriting profit (pre-tax) |
$ |
6,135 |
|
$ |
6,305 |
|
-2.7 |
% |
$ |
21,351 |
|
$ |
28,055 |
|
-23.9 |
% |
|||||
Insurance Ratios: | |||||||||||||||||||||
Current accident year loss ratio |
|
71.0 |
% |
|
71.0 |
% |
|
71.0 |
% |
|
71.0 |
% |
|||||||||
Prior accident year loss ratio |
|
-12.6 |
% |
|
-15.2 |
% |
|
-12.3 |
% |
|
-15.5 |
% |
|||||||||
Net loss ratio |
|
58.4 |
% |
|
55.8 |
% |
|
58.7 |
% |
|
55.5 |
% |
|||||||||
Net underwriting expense ratio |
|
31.7 |
% |
|
33.6 |
% |
|
29.6 |
% |
|
29.5 |
% |
|||||||||
Net dividend ratio |
|
0.8 |
% |
|
1.2 |
% |
|
1.3 |
% |
|
1.1 |
% |
|||||||||
Net combined ratio |
|
90.9 |
% |
|
90.6 |
% |
|
89.6 |
% |
|
86.1 |
% |
- Voluntary premiums on policies written in the quarter were 8.8% higher than in the third quarter of 2023, primarily due to an increase in new business and strong retention.
-
Payroll audits and related premium adjustments increased premiums written by
$4.0 million in the third quarter of 2024 primarily due to continued payroll growth. In the third quarter of 2023 payroll audits were$5.6 million . -
The loss ratio for the third quarter was 58.4%, compared to 55.8% in the third quarter of 2023. During the quarter, the Company experienced favorable net loss reserve development for prior accident years, which reduced loss and loss adjustment expenses by
$8.5 million , primarily from accident years 2019 through 2021. - The net underwriting expense ratio was 31.7%, compared to 33.6% in the third quarter of 2023. The expense ratio reflects continued investment that has driven profitable growth.
-
The effective tax rate for the quarter ended
September 30, 2024 , was 19.5%, which is in line for the quarter endedSeptember 30, 2023 .
INVESTMENT RESULTS
Three Months Ended |
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Nine Months Ended |
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2024 |
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|
2023 |
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% Change |
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|
2024 |
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|
2023 |
|
|
% Change |
|||
(in thousands) |
|
|
|
(in thousands) |
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|
|||||||||||||||
Net investment income |
$ |
7,485 |
|
$ |
8,105 |
|
-7.6 |
% |
$ |
22,298 |
|
$ |
23,262 |
|
-4.1 |
% |
|||||
Net realized gains (losses) | |||||||||||||||||||||
on investments (pre-tax) |
|
158 |
|
|
5,133 |
|
-96.9 |
% |
|
(181 |
) |
|
5,466 |
|
NM |
|
|||||
Net unrealized gains (losses) on | |||||||||||||||||||||
equity securities (pre-tax) |
|
3,873 |
|
|
(7,309 |
) |
NM |
|
|
8,591 |
|
|
(3,892 |
) |
NM |
|
|||||
Pre-tax investment yield |
|
3.4 |
% |
|
3.4 |
% |
|
3.3 |
% |
|
3.3 |
% |
|||||||||
Tax-equivalent yield (1) |
|
3.8 |
% |
|
3.8 |
% |
|
3.8 |
% |
|
3.8 |
% |
(1) |
The tax equivalent yield is calculated using the effective interest rate and the appropriate marginal tax rate. |
-
Net investment income for the quarter ended
September 30, 2024 , decreased 7.6% to$7.5 million due to the reduced portfolio size, partially offset by increased reinvestment rates as compared to portfolio rolloff. -
Net unrealized gains on equity securities were
$3.9 million due to strong equity market returns compared to an unrealized loss of$7.3 million in the third quarter of 2023. -
As of
September 30, 2024 , the carrying value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was$899.2 million .
CAPITAL MANAGEMENT
On
During the third quarter of 2024, the Company repurchased 21,586 shares at an average cost (including commissions and excise tax) of
Book value per share on
SUPPLEMENTAL INFORMATION
Three Months Ended |
|
Nine Months Ended |
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|
|
|
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|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
(in thousands, except share and per share data) |
|||||||||||||||
Net income |
$ |
14,324 |
|
$ |
9,961 |
|
$ |
42,242 |
|
$ |
42,927 |
|
|||
Less: | |||||||||||||||
Net realized gains (losses) on investments |
|
158 |
|
|
5,133 |
|
|
(181 |
) |
|
5,466 |
|
|||
Net unrealized gains (losses) on | |||||||||||||||
equity securities (pre-tax) |
|
3,873 |
|
|
(7,309 |
) |
|
8,591 |
|
|
(3,892 |
) |
|||
Tax effect (1) |
|
(847 |
) |
|
457 |
|
|
(1,766 |
) |
|
(331 |
) |
|||
Operating net income (2) |
$ |
11,140 |
|
$ |
11,680 |
|
$ |
35,598 |
|
$ |
41,684 |
|
|||
Average shareholders’ equity (3) |
$ |
307,682 |
|
$ |
338,225 |
|
$ |
303,411 |
|
$ |
326,658 |
|
|||
Less: | |||||||||||||||
Average accumulated other comprehensive | |||||||||||||||
loss |
|
(6,118 |
) |
|
(16,232 |
) |
|
(4,935 |
) |
|
(17,096 |
) |
|||
Average adjusted shareholders’ equity (2) |
$ |
313,800 |
|
$ |
354,457 |
|
$ |
308,346 |
|
$ |
343,754 |
|
|||
Diluted weighted average common shares |
|
19,113,103 |
|
|
19,223,588 |
|
|
19,156,976 |
|
|
19,217,606 |
|
|||
Return on average equity (4) |
|
18.6 |
% |
|
11.8 |
% |
|
18.6 |
% |
|
17.5 |
% |
|||
Operating return on average adjusted equity (2) |
|
14.2 |
% |
|
13.2 |
% |
|
15.4 |
% |
|
16.2 |
% |
|||
Diluted earnings per share |
$ |
0.75 |
|
$ |
0.52 |
|
$ |
2.21 |
|
$ |
2.23 |
|
|||
Operating earnings per share (2) |
$ |
0.58 |
|
$ |
0.61 |
|
$ |
1.86 |
|
$ |
2.17 |
|
|||
(1) |
The tax effect of net realized losses on investments and net unrealized gains (losses) on equity securities is calculated with an effective tax rate of 21%. |
(2) |
Operating net income, average adjusted shareholders’ equity, operating return on average adjusted equity and operating earnings per share are non-GAAP financial measures. Management believes that investors’ understanding of core operating performance is enhanced by AMERISAFE’s disclosure of these financial measures. |
(3) |
Average shareholders’ equity is calculated by taking the average of the beginning and ending shareholders’ equity for the applicable period. |
(4) |
Return on average equity is calculated by dividing the annualized net income by the average shareholders’ equity. |
NON-GAAP FINANCIAL MEASURES
This release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the
Management believes that investors’ understanding of core operating performance is enhanced by AMERISAFE’s disclosure of these financial measures, which include operating net income, average adjusted shareholders’ equity, operating return on average adjusted equity, and operating earnings per share.
CONFERENCE CALL INFORMATION
Investors, analysts, and the general public will also have the opportunity to listen to the conference call over the Internet by visiting the “Investor Relations Home” page of the “Investors” section of the Company’s website (http://www.amerisafe.com). To listen to the live call on the web, please visit the website at least fifteen minutes before the call begins to register, download, and install any necessary audio software. For those who cannot listen to the live webcast, an archive will be available shortly after the call at the same website location.
ABOUT
FORWARD LOOKING STATEMENTS
Statements made in this press release that are not historical facts, including statements accompanied by words such as “will,” “believe,” “anticipate,” “expect,” “estimate,” or similar words are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding AMERISAFE’s plans and performance. These statements are based on management’s estimates, assumptions, and projections as of the date of this release and are not guarantees of future performance and include statements regarding management’s views and expectations of the workers’ compensation market, the Company’s growth opportunities, underwriting margins and actions by competitors. Actual results may differ materially from the results expressed or implied in these statements if the underlying assumptions prove to be incorrect or as the results of risks, uncertainties, and other factors on the business and operations of the Company and our policyholders and the market value of our investment portfolio. Additional factors that may affect our results are set forth in the Company’s filings with the
Consolidated Statements of Income (in thousands, except per share amounts)
|
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Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
|
|
|||||||||||||
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
(unaudited) |
|
(unaudited) |
|||||||||||||
Revenues: | |||||||||||||||
Gross premiums written |
$ |
74,940 |
|
$ |
70,840 |
|
$ |
231,442 |
|
$ |
225,031 |
|
|||
Ceded premiums written |
|
(3,951 |
) |
|
(4,112 |
) |
|
(11,904 |
) |
|
(12,256 |
) |
|||
Net premiums written |
$ |
70,989 |
|
$ |
66,728 |
|
$ |
219,538 |
|
$ |
212,775 |
|
|||
Net premiums earned |
$ |
67,050 |
|
$ |
66,634 |
|
$ |
204,129 |
|
$ |
201,413 |
|
|||
Net investment income |
|
7,485 |
|
|
8,105 |
|
|
22,298 |
|
|
23,262 |
|
|||
Net realized gains (losses) on investments |
|
158 |
|
|
5,133 |
|
|
(181 |
) |
|
5,466 |
|
|||
Net unrealized gains (losses) on | |||||||||||||||
equity securities |
|
3,873 |
|
|
(7,309 |
) |
|
8,382 |
|
|
(3,894 |
) |
|||
Fee and other income |
|
129 |
|
|
77 |
|
|
386 |
|
|
490 |
|
|||
Total revenues |
|
78,695 |
|
|
72,640 |
|
|
235,014 |
|
|
226,737 |
|
|||
Expenses: | |||||||||||||||
Loss and loss adjustment expenses incurred |
|
39,150 |
|
|
37,154 |
|
|
119,765 |
|
|
111,808 |
|
|||
Underwriting and other operating costs |
|
21,252 |
|
|
22,371 |
|
|
60,379 |
|
|
59,325 |
|
|||
Policyholder dividends |
|
513 |
|
|
804 |
|
|
2,634 |
|
|
2,225 |
|
|||
Provision for investment related credit | |||||||||||||||
loss benefit |
|
(13 |
) |
|
(16 |
) |
|
(46 |
) |
|
(51 |
) |
|||
Total expenses |
|
60,902 |
|
|
60,313 |
|
|
182,732 |
|
|
173,307 |
|
|||
Income before taxes |
|
17,793 |
|
|
12,327 |
|
|
52,282 |
|
|
53,430 |
|
|||
Income tax expense |
|
3,469 |
|
|
2,366 |
|
|
10,040 |
|
|
10,503 |
|
|||
Net income |
$ |
14,324 |
|
$ |
9,961 |
|
$ |
42,242 |
|
$ |
42,927 |
|
|||
Basic EPS: | |||||||||||||||
Net income |
$ |
14,324 |
|
$ |
9,961 |
|
$ |
42,242 |
|
$ |
42,927 |
|
|||
Basic weighted average common shares |
|
19,042,152 |
|
|
19,164,854 |
|
|
19,082,374 |
|
|
19,145,432 |
|
|||
Basic earnings per share |
$ |
0.75 |
|
$ |
0.52 |
|
$ |
2.21 |
|
$ |
2.24 |
|
|||
Diluted EPS: | |||||||||||||||
Net income |
$ |
14,324 |
|
$ |
9,961 |
|
$ |
42,242 |
|
$ |
42,927 |
|
|||
Diluted weighted average common shares: | |||||||||||||||
Weighted average common shares |
|
19,042,152 |
|
|
19,164,854 |
|
|
19,082,374 |
|
|
19,145,432 |
|
|||
Restricted stock and RSUs |
|
70,951 |
|
|
58,734 |
|
|
74,602 |
|
|
72,174 |
|
|||
Diluted weighted average common shares |
|
19,113,103 |
|
|
19,223,588 |
|
|
19,156,976 |
|
|
19,217,606 |
|
|||
Diluted earnings per share |
$ |
0.75 |
|
$ |
0.52 |
|
$ |
2.21 |
|
$ |
2.23 |
|
Consolidated Balance Sheets (in thousands)
|
|||||||
|
|
|
|||||
|
2024 |
|
|
|
2023 |
|
|
(unaudited) | |||||||
Assets | |||||||
Investments |
$ |
835,532 |
$ |
857,786 |
|||
Cash and cash equivalents |
|
63,663 |
|
|
38,682 |
|
|
Amounts recoverable from reinsurers |
|
128,963 |
|
|
129,963 |
|
|
Premiums receivable, net |
|
152,945 |
|
|
132,861 |
|
|
Deferred income taxes |
|
19,499 |
|
|
20,403 |
|
|
Deferred policy acquisition costs |
|
20,148 |
|
|
17,975 |
|
|
Other assets |
|
33,977 |
|
|
31,492 |
|
|
$ |
1,254,727 |
|
$ |
1,229,162 |
|
||
Liabilities and Shareholders’ Equity | |||||||
Liabilities: | |||||||
Reserves for loss and loss adjustment expenses |
$ |
663,486 |
|
$ |
673,994 |
|
|
Unearned premiums |
|
131,994 |
|
|
116,585 |
|
|
Insurance-related assessments |
|
16,841 |
|
|
16,896 |
|
|
Other liabilities |
|
128,035 |
|
|
129,236 |
|
|
Shareholders’ equity |
|
314,371 |
|
|
292,451 |
|
|
Total liabilities and shareholders’ equity |
$ |
1,254,727 |
|
$ |
1,229,162 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241023884413/en/
337.463.9052
Source: