AMERISAFE Announces 2024 First Quarter Results
- AMERISAFE reported a Return on Equity of 22.8% and a Net Combined Ratio of 87.3% for Q1 2024.
- Despite a decrease in net premiums earned and net investment income, the company showed strong performance.
- Voluntary premiums remained flat, and favorable net loss reserve development boosted results.
- AMERISAFE's investment income slightly decreased, but unrealized gains on equity securities were significant.
- Capital management was strong, with a dividend increase and growth in book value per share.
- Operating net income declined, but return on average equity increased, indicating overall positive financial performance.
- None.
Insights
Reports Return on Equity of
Three Months Ended |
|
|
||||||||
March 31, |
|
|
||||||||
2024 |
|
2023 |
|
% Change |
||||||
| (in thousands, except per share data) | ||||||||||
| Net premiums earned | $ |
68,446 |
|
$ |
69,181 |
|
-1.1 |
% |
||
| Net investment income |
|
7,366 |
|
|
7,433 |
|
-0.9 |
% |
||
| Net realized gains (losses) on investments (pre-tax) |
|
(222 |
) |
|
258 |
|
NM |
|
||
| Net unrealized gain on equity securities (pre-tax) |
|
4,776 |
|
|
1,369 |
|
NM |
|
||
| Net income |
|
16,925 |
|
|
17,339 |
|
-2.4 |
% |
||
| Diluted earnings per share | $ |
0.88 |
|
$ |
0.90 |
|
-2.2 |
% |
||
| Operating net income |
|
13,327 |
|
|
16,054 |
|
-17.0 |
% |
||
| Operating earnings per share | $ |
0.69 |
|
$ |
0.83 |
|
-16.9 |
% |
||
| Book value per share | $ |
15.74 |
|
$ |
17.38 |
|
-9.4 |
% |
||
| Net combined ratio |
|
87.3 |
% |
|
82.2 |
% |
||||
| Return on average equity |
|
22.8 |
% |
|
21.3 |
% |
||||
G. Janelle Frost, President and Chief Executive Officer, noted, “Our strategy is fundamentally based on providing peace of mind through protection for small to mid-sized businesses and caring for their injured workers, which has a track record of creating value for our shareholders. While soft market conditions are ongoing and competition remains robust, loss costs continue to decline. We are pleased to report an
INSURANCE RESULTS
Three Months Ended |
|
|
||||||||
March 31, |
|
|
||||||||
2024 |
|
2023 |
|
% Change |
||||||
| (in thousands) | ||||||||||
| Gross premiums written | $ |
80,074 |
|
$ |
82,487 |
|
-2.9 |
% |
||
| Net premiums earned |
|
68,446 |
|
|
69,181 |
|
-1.1 |
% |
||
| Loss and loss adjustment expenses incurred |
|
39,991 |
|
|
39,009 |
|
2.5 |
% |
||
| Underwriting and certain other operating costs, commissions, salaries and benefits |
|
18,698 |
|
|
16,982 |
|
10.1 |
% |
||
| Policyholder dividends |
|
1,072 |
|
|
931 |
|
15.1 |
% |
||
| Underwriting profit (pre-tax) | $ |
8,685 |
|
$ |
12,259 |
|
-29.2 |
% |
||
| Insurance Ratios: | ||||||||||
| Current accident year loss ratio |
|
71.0 |
% |
|
71.0 |
% |
||||
| Prior accident year loss ratio |
|
-12.6 |
% |
|
-14.6 |
% |
||||
| Net loss ratio |
|
58.4 |
% |
|
56.4 |
% |
||||
| Net underwriting expense ratio |
|
27.3 |
% |
|
24.5 |
% |
||||
| Net dividend ratio |
|
1.6 |
% |
|
1.3 |
% |
||||
| Net combined ratio |
|
87.3 |
% |
|
82.2 |
% |
||||
- Voluntary premiums on policies written in the quarter were flat versus the first quarter of 2023 despite the continued declines in approved loss costs.
-
Payroll audits and related premium adjustments increased premiums written by
$6.4 million $8.9 million -
The loss ratio for the first quarter was
58.4% , compared to56.4% in the first 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$8.6 million -
For the quarter ended March 31, 2024, the underwriting expense ratio was
27.3% versus24.5% in the same quarter of 2023. The prior year's quarter expense ratio was favorably impacted by a$3.3M -
The effective tax rate for the quarter ended March 31, 2024 was
18.4% compared with19.5% for March 31, 2023. The rate was slightly lower than last year due to an increase in the proportion of tax-exempt interest income relative to taxable interest income and underwriting profit.
INVESTMENT RESULTS
Three Months Ended |
|
|
||||||||
March 31, |
|
|
||||||||
2024 |
|
2023 |
|
% Change |
||||||
| (in thousands) | ||||||||||
| Net investment income | $ |
7,366 |
|
$ |
7,433 |
|
-0.9 |
% |
||
| Net realized gains (losses) on investments (pre-tax) |
|
(222 |
) |
|
258 |
|
NM |
|
||
| Net unrealized gains on equity securities (pre-tax) |
|
4,776 |
|
|
1,369 |
|
NM |
|
||
| Pre-tax investment yield |
|
3.3 |
% |
|
3.1 |
% |
||||
| Tax-equivalent yield (1) |
|
3.7 |
% |
|
3.5 |
% |
||||
| _____________ | ||
(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 March 31, 2024, decreased
0.9% to$7.4 million -
Net unrealized gains on equity securities were
$4.8 million -
As of March 31, 2024, the carrying value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was
$899.9 million
CAPITAL MANAGEMENT
During the first quarter of 2024, the Company paid a regular quarterly cash dividend of
Book value per share at March 31, 2024, was
SUPPLEMENTAL INFORMATION
Three Months Ended |
|||||||
March 31, |
|||||||
2024 |
|
2023 |
|||||
| (in thousands, except share and per share data) | |||||||
| Net income | $ |
16,925 |
|
$ |
17,339 |
|
|
| Less: | |||||||
| Net realized gains (losses) on investments |
|
(222 |
) |
|
258 |
|
|
| Net unrealized gains on equity securities |
|
4,776 |
|
|
1,369 |
|
|
| Tax effect (1) |
|
(956 |
) |
|
(342 |
) |
|
| Operating net income (2) | $ |
13,327 |
|
$ |
16,054 |
|
|
| Average shareholders’ equity (3) | $ |
296,773 |
|
$ |
325,144 |
|
|
| Less: | |||||||
| Average accumulated other comprehensive loss |
|
(7,967 |
) |
|
(11,656 |
) |
|
| Average adjusted shareholders’ equity (2) | $ |
304,740 |
|
$ |
336,800 |
|
|
| Diluted weighted average common shares |
|
19,211,282 |
|
|
19,235,411 |
|
|
| Return on average equity (4) |
|
22.8 |
% |
|
21.3 |
% |
|
| Operating return on average adjusted equity (2) |
|
17.5 |
% |
|
19.1 |
% |
|
| Diluted earnings per share | $ |
0.88 |
|
$ |
0.90 |
|
|
| Operating earnings per share (2) | $ |
0.69 |
|
$ |
0.83 |
|
|
| _____________ | ||
(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 |
|
(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
AMERISAFE has scheduled a conference call for April 25, 2024, at 10:30 a.m. Eastern Time to discuss the results for the quarter and comment on future periods. To participate in the conference call, dial 323-794-2551 (Conference Code 2635571) at least ten minutes before the call begins.
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 AMERISAFE
AMERISAFE, Inc. is a specialty provider of workers’ compensation insurance focused on small to mid-sized employers engaged in hazardous industries, principally construction, trucking, logging and lumber, agriculture, and manufacturing. AMERISAFE actively markets workers’ compensation insurance in 27 states.
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 Securities and Exchange Commission, including AMERISAFE’s Annual Report on Form 10-K. AMERISAFE cautions you not to place undue reliance on the forward-looking statements contained in this release. AMERISAFE does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.
AMERISAFE, INC. AND SUBSIDIARIES Consolidated Statements of Income (in thousands, except per share amounts) |
|||||||
Three Months Ended |
|||||||
March 31, |
|||||||
2024 |
|
2023 |
|||||
| (unaudited) | |||||||
| Revenues: | |||||||
| Gross premiums written | $ |
80,074 |
|
$ |
82,487 |
|
|
| Ceded premiums written |
|
(3,926 |
) |
|
(4,179 |
) |
|
| Net premiums written | $ |
76,148 |
|
$ |
78,308 |
|
|
| Net premiums earned | $ |
68,446 |
|
$ |
69,181 |
|
|
| Net investment income |
|
7,366 |
|
|
7,433 |
|
|
| Net realized gains (losses) on investments |
|
(222 |
) |
|
258 |
|
|
| Net unrealized gains on equity securities |
|
4,776 |
|
|
1,369 |
|
|
| Fee and other income |
|
123 |
|
|
197 |
|
|
| Total revenues |
|
80,489 |
|
|
78,438 |
|
|
| Expenses: | |||||||
| Loss and loss adjustment expenses incurred |
|
39,991 |
|
|
39,009 |
|
|
| Underwriting and other operating costs |
|
18,698 |
|
|
16,982 |
|
|
| Policyholder dividends |
|
1,072 |
|
|
931 |
|
|
| Provision for investment related credit | |||||||
| loss benefit |
|
(17 |
) |
|
(19 |
) |
|
| Total expenses |
|
59,744 |
|
|
56,903 |
|
|
| Income before taxes |
|
20,745 |
|
|
21,535 |
|
|
| Income tax expense |
|
3,820 |
|
|
4,196 |
|
|
| Net income | $ |
16,925 |
|
$ |
17,339 |
|
|
| Basic EPS: | |||||||
| Net income | $ |
16,925 |
|
$ |
17,339 |
|
|
| Basic weighted average common shares |
|
19,122,168 |
|
|
19,131,356 |
|
|
| Basic earnings per share | $ |
0.89 |
|
$ |
0.91 |
|
|
| Diluted EPS: | |||||||
| Net income | $ |
16,925 |
|
$ |
17,339 |
|
|
| Diluted weighted average common shares: | |||||||
| Weighted average common shares |
|
19,122,168 |
|
|
19,131,356 |
|
|
| Restricted stock and RSUs |
|
89,114 |
|
|
104,055 |
|
|
| Diluted weighted average common shares |
|
19,211,282 |
|
|
19,235,411 |
|
|
| Diluted earnings per share | $ |
0.88 |
|
$ |
0.90 |
|
|
AMERISAFE, INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands) |
|||||
March 31, |
|
December 31, |
|||
2024 |
|
2023 |
|||
| (unaudited) | |||||
| Assets | |||||
| Investments | $ |
866,559 |
$ |
857,786 |
|
| Cash and cash equivalents |
|
33,375 |
|
38,682 |
|
| Amounts recoverable from reinsurers |
|
127,503 |
|
129,963 |
|
| Premiums receivable, net |
|
143,987 |
|
132,861 |
|
| Deferred income taxes |
|
21,183 |
|
20,403 |
|
| Deferred policy acquisition costs |
|
18,994 |
|
17,975 |
|
| Other assets |
|
31,542 |
|
31,492 |
|
$ |
1,243,143 |
$ |
1,229,162 |
||
| Liabilities and Shareholders’ Equity | |||||
| Liabilities: | |||||
| Reserves for loss and loss adjustment expenses | $ |
668,059 |
$ |
673,994 |
|
| Unearned premiums |
|
124,288 |
|
116,585 |
|
| Insurance-related assessments |
|
15,624 |
|
16,896 |
|
| Other liabilities |
|
134,078 |
|
129,236 |
|
| Shareholders’ equity |
|
301,094 |
|
292,451 |
|
| Total liabilities and shareholders’ equity | $ |
1,243,143 |
$ |
1,229,162 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240424992242/en/
Andy Omiridis, EVP & CFO
AMERISAFE
337.463.9052
Source: AMERISAFE, Inc.
FAQ
What was AMERISAFE, Inc.'s Return on Equity for the first quarter of 2024?
What was AMERISAFE, Inc.'s Net Combined Ratio for the first quarter of 2024?
Did AMERISAFE, Inc. experience any change in gross premiums written compared to the first quarter of 2023?
What was the loss ratio for AMERISAFE, Inc. in the first quarter of 2024?
How did AMERISAFE, Inc.'s capital management perform in the first quarter of 2024?
