AMERISAFE INC Q4 FY2025 earnings call

• Janelle mentioned closing 2025 with a strong ROE of 18.5% and a combined ratio of 91.3% in a competitive environment. - Vincent shared that gross premium written had strong growth in the fourth quarter and full year, with voluntary premium and audit premium and adjustments contributing. - Janelle discussed claims results, including accident year loss ratio and favorable development in prior accident years, and financial results like net income and expense ratio. - Vincent talked about incremental growth strategy, including top-line growth, renewal retention, and in-force policy count increase.

In the fourth quarter of 2025, gross premium written grew 11.7% compared to 3.9% growth in the fourth quarter of 2024. For the full year, GPW increased 6.7%. Voluntary premium, the primary component of GPW, increased 10.5% in the quarter and 10.2% for the full year. Audit premium and adjustments added $3.5 million in the quarter compared to $2.5 million in the fourth quarter of 2024. For the full year, audit premium and adjustments contributed $12.6 million to GPW. The current accident year loss ratio was 72% for the full year. Prior accident years had favorable development. The expense ratio was 29.2% for the quarter and 30.4% for the full year. Net income was $10.4 million in the fourth quarter of 2025 and $47.1 million for the full year. Net investment income increased 2.5% in the fourth quarter and decreased 7.6% for the full year.

• Janelle mentioned that it's inclined to keep the 72 loss ratio for 2026 as underlying loss costs are still mid-single digits. - No specific indication of a return to the 71 loss ratio in 2026 yet. - Mark asked about 2026 loss pick back to 71, and Janelle stated she doesn't know exactly but is inclined to keep 72 for 2026 based on current factors.

• Underlying assumptions for forward-looking statements are subject to various risks and uncertainties, including factors in the earnings release, call comments, and SEC filings. - The prolonged soft market with workers' compensation carriers facing 12 consecutive years of rate decline poses risks. - Medical inflation and cost pressure for home health and DME (prosthetics) are ongoing risks. - Uncertainty around the impact of undocumented workers on claims patterns, though currently not seen as impactful.

Q: Matt Carletti asked about frequency of severity of claims, similarities in 25 large claims, growth areas.

A: Overall frequency of claims is on par with policy growth. 25 large claims' average severity is lower than 2025, and they mirror the entire book. Growth is broad based across the book with some shifts in industry groups and states.

Q: Mark Hughes asked about uptick in current accident year loss ratio, favorable development, underlying medical inflation, competition, sustainability of growth.

A: Uptick is due to increase in frequency of severity. Favorable development not related to 2025 large claims. Medical inflation and cost pressure continue. Competition is relatively steady. Growth is sustainable due to effective agency relationships and execution on fundamentals.

Q: Bob Farden asked about undocumented workers, proportion change, impact on claims patterns.

A: No major change in proportion of undocumented workers. Handling of claims from undocumented workers is no different than others, and currently not impactful to the book