AMERISAFE INC Q3 FY2025 earnings call

• Growth strategy yielding 20.5% return on average equity and 90.6% combined ratio, sixth consecutive quarter of top line growth. Voluntary premiums grew 10.6%, gross and net earned up 7.2% and 6.2% respectively over Q3 2024. - Accident year loss ratio 71%, frequency low, severity not higher year-over-year; $8.9M favorable reserve development on prior accident years. - Declared regular quarterly dividend of $0.39 per share and $1 special dividend. Capital management balances dividends, share repurchases, and investment in business. - Financials: net income $13.8M, operating net income $10.6M; gross written premiums $80.3M; expense ratio 31.1%; investment portfolio with 61% municipal bonds, 21% corporate bonds, etc.; $1.3M share repurchased; book value per share up 7.1%; statutory surplus $259M.

For the third quarter of 2025, AMERISAFE reported a 20.5% return on average equity and a 90.6% combined ratio. Voluntary premiums on policies written grew 10.6%, with gross premiums written up 7.2% and net earned up 6.2% compared to Q3 2024. The accident year loss ratio was 71%, and the company experienced $8.9 million of favorable reserve development on prior accident years. Dividends declared include a regular quarterly dividend of $0.39 per share and a $1 special dividend. Gross written premiums were $80.3 million, net income was $13.8 million or $0.72 per diluted share, and operating net income was $10.6 million or $0.55 per diluted share. Book value per share increased to $14.47, up 7.1% year-to-date, and statutory surplus was $259 million.

• Market competition risks. - Medical inflation risks. - Legislative changes affecting fee schedules for workers' compensation. - Economic uncertainties impacting wage growth and employment.

Q: Matt Carletti asked about where voluntary premium growth is coming from, if it's broad-based.

A: Janelle Frost said it's broad-based, with policy count growing ~2.7% quarter-over-quarter and 11% year-over-year, insured payrolls expanding, strong renewal retention (93.6%), and collaborative effort from employees including safety services and claims handling.

Q: Mark Hughes asked about underwriting leverage, medical inflation, loss costs, wage growth, large losses, competition, audit premium, construction market.

A: Underwriting leverage at ~$1, upper bound ~$1.5; medical inflation watched, fee schedules abating some impact; loss costs: 17 large losses >$1M year-to-date; wage growth 6.7% in Q3; competition still intense; audit premium tied to wage growth; construction end market economies holding up.

Q: Robert Farnam asked about claims staff, expansion into states, fee schedules.

A: Claims staff not increased, still lean; constantly looking to expand into states but nothing near horizon; fee schedules updated regularly, not top legislative agenda currently