AMERISAFE Announces 2024 Fourth Quarter and Year-End Results

Rhea-AI Summary

AMERISAFE (NASDAQ: AMSF) reported strong financial results for Q4 and full-year 2024, with net income of $55.4 million and a return on equity of 20.2%. The company demonstrated resilience in a competitive workers' compensation insurance market, achieving an 8.5% increase in voluntary premiums during Q4 and a 4.6% increase for the full year.

Key performance metrics include:

• Combined ratios of 86.1% in Q4 and 88.7% for the year
• Favorable net loss reserve development of $9.7M in Q4 and $34.9M for the year
• Underwriting expense ratio of 29.7% in Q4 and 29.6% for the year
• Net investment income decreased 14.4% to $6.9M in Q4 and 6.8% to $29.2M for the year

The Board approved a 5.4% increase in quarterly dividend to $0.39 per share, payable March 21, 2025. The investment portfolio, including cash equivalents, stood at $832.8M as of December 31, 2024.

Positive

• Net income of $55.4M with strong ROE of 20.2%
• Voluntary premiums grew 8.5% in Q4, 4.6% for full year
• Favorable loss reserve development of $34.9M
• Combined ratio improved to 88.7%
• 5.4% increase in quarterly dividend

Negative

• Net investment income declined 14.4% in Q4
• Underwriting expense ratio increased to 29.6% from 29.3%
• Premium adjustments decreased to $20.2M from $24.0M YoY

Insights

Financial Analyst

AMERISAFE delivered exceptional performance in 2024 despite intense competition in the workers' compensation market, reporting $55.4 million net income and 20.2% return on equity. This ROE is approximately double the industry average for workers' compensation insurers, highlighting AMERISAFE's superior underwriting discipline in its high-hazard niche.

The company's combined ratio of 86.1% for Q4 and 88.7% for the full year demonstrates outstanding underwriting profitability when the industry average typically hovers around 95-97%. This 8-10% advantage translates directly to bottom-line performance.

Premium growth metrics reveal effective market execution: voluntary premiums increased 8.5% in Q4 and 4.6% for the full year, outpacing many competitors in a market where rate pressures continue to challenge growth. The company's focus on retention and new business acquisition appears to be yielding results.

Two trends warrant investor attention: First, favorable reserve development decreased from $41.4 million in 2023 to $34.9 million in 2024. While still significant, this 15.7% reduction may signal diminishing tailwinds from prior years' conservative reserving. Second, net investment income declined 14.4% quarterly and 6.8% annually following the special dividend distribution, reducing the investable asset base.

The 5.4% increase in quarterly dividend (to $0.39) reflects management's confidence in sustainable cash flow generation despite these headwinds. With a $832.8 million investment portfolio supporting approximately $950 million in market capitalization, AMERISAFE maintains significant financial flexibility while returning capital to shareholders.

Looking ahead, the company's ability to maintain its exceptional ROE will depend on continued underwriting discipline, successful navigation of competitive pressures, and potentially rebuilding its investment portfolio to offset the reduced income following the special dividend payment.

Reports $55.4 Million of Net Income and Return on Equity of 20.2% in 2024

DERIDDER, La.--(BUSINESS WIRE)-- AMERISAFE, Inc. (Nasdaq: AMSF), a specialty provider of workers’ compensation insurance focused on high-hazard industries, today announced results for the fourth quarter and year ended December 31, 2024.

	Three Months Ended											Twelve Months Ended
	December 31,											December 31,
		2024				2023			% Change				2024				2023			% Change
	(in thousands, except per share data)											(in thousands, except per share data)
Net premiums earned	$	66,510			$	65,712			1.2	%		$	270,639			$	267,125			1.3	%
Net investment income		6,914				8,077			-14.4	%			29,212				31,339			-6.8	%
Net realized gains (losses) on  investments (pre-tax)		(395	)			1,113			NM				(576	)			6,579			NM
Net unrealized gains on  equity securities (pre-tax)		917				5,120			NM				9,508				1,228			NM
Net income		13,194				19,181			-31.2	%			55,436				62,108			-10.7	%
Diluted earnings per share	$	0.69			$	1.00			-31.0	%		$	2.89			$	3.23			-10.5	%
Operating net income		12,782				14,257			-10.3	%			48,380				55,940			-13.5	%
Operating earnings per share	$	0.67			$	0.74			-9.5	%		$	2.53			$	2.91			-13.1	%
Book value per share	$	13.51			$	15.28			-11.6	%		$	13.51			$	15.28			-11.6	%
Net combined ratio		86.1	%			85.5	%						88.7	%			85.9	%
Return on average equity		18.5	%			24.4	%						20.2	%			20.4	%

G. Janelle Frost, President and Chief Executive Officer, commented: "In 2024, we successfully navigated a highly competitive workers' compensation market, achieving growth and profitability despite industry challenges. Risk selection, appropriate product pricing and claims handling resulted in combined ratios of 86.1% this quarter and 88.7% for the year. This success is entirely attributable to our dedicated people and their unwavering commitment to our policyholders, injured workers, agents, and the communities we serve, yielding an 18.5% return on average equity for shareholders this quarter and 20.2% for the year. Their expertise, resilience, and focus on service excellence have been the driving force behind our ability to grow and adapt, while delivering consistently solid results in a dynamic environment."

INSURANCE RESULTS

	Three Months Ended											Twelve Months Ended
	December 31,											December 31,
		2024				2023			% Change				2024				2023			% Change
	(in thousands)											(in thousands)
Gross premiums written	$	62,702			$	60,324			3.9	%		$	294,144			$	285,355			3.1	%
Net premiums earned		66,510				65,712			1.2	%			270,639				267,125			1.3	%
Loss and loss adjustment expenses incurred		37,502				36,455			2.9	%			157,267				148,263			6.1	%
Underwriting and certain other operating  costs, commissions, salaries and benefits		19,750				18,988			4.0	%			80,129				78,313			2.3	%
Policyholder dividends		23				732			-96.9	%			2,657				2,957			-10.1	%
Underwriting profit (pre-tax)	$	9,235			$	9,537			-3.2	%		$	30,586			$	37,592			-18.6	%
Insurance Ratios:
Current accident year loss ratio		71.0	%			71.0	%						71.0	%			71.0	%
Prior accident year loss ratio		-14.6	%			-15.5	%						-12.9	%			-15.5	%
Net loss ratio		56.4	%			55.5	%						58.1	%			55.5	%
Net underwriting expense ratio		29.7	%			28.9	%						29.6	%			29.3	%
Net dividend ratio		0.0	%			1.1	%						1.0	%			1.1	%
Net combined ratio		86.1	%			85.5	%						88.7	%			85.9	%

• Voluntary premiums on policies written in the quarter were 8.5% higher than in the fourth quarter of 2023, primarily due to strong premium retention and new business production. For the full year, voluntary premiums increased by 4.6%.
• Payroll audits and related premium adjustments increased premiums written by $2.5 million in the fourth quarter of 2024, compared to an increase of $4.8 million in the fourth quarter of 2023. For the full year 2024, audits and related premium adjustments increased written premiums by $20.2 million, compared to an increase of $24.0 million in 2023.
• During the quarter, the Company experienced favorable net loss reserve development for prior accident years, which reduced loss and loss adjustment expenses by $9.7 million, primarily from accident years 2015 through 2022. For the full year, the Company experienced favorable development on prior accident years of $34.9 million, compared with $41.4 million in 2023. The Company attributes its lower claim severities for prior years to proactive claims handling.
• For the quarter ended December 31, 2024, the underwriting expense ratio was 29.7% compared with 28.9% in the same quarter in 2023, due to a favorable franchise tax return to provision true-up in the previous year that did not recur in 2024. For the year ended December 31, 2024, the underwriting expense ratio was 29.6%, compared with 29.3% in 2023, primarily attributable to the fourth quarter of 2023 favorable franchise tax item.
• The effective tax rate for the full year 2024 was 19.7%, unchanged from the prior year.

INVESTMENT RESULTS

	Three Months Ended											Twelve Months Ended
	December 31,											December 31,
		2024				2023			% Change				2024				2023			% Change
	(in thousands)											(in thousands)
Net investment income	$	6,914			$	8,077			-14.4	%		$	29,212			$	31,339			-6.8	%
Net realized gains (losses)  on investments (pre-tax)		(395	)			1,113			NM				(576	)			6,579			NM
Net unrealized gains on  equity securities (pre-tax)		917				5,120			NM				9,508				1,228			NM
Pre-tax investment yield		3.2	%			3.5	%						3.4	%			3.4	%
Tax-equivalent yield (1)		3.8	%			3.7	%						3.8	%			3.7	%
________________________________

(1)	The tax equivalent yield is calculated using the effective interest rate and the appropriate marginal tax rate.

• Net investment income for the quarter and full year ended December 31, 2024, decreased 14.4% to $6.9 million and 6.8% to $29.2 million, respectively, due to a decrease in investable assets following the payment of the special dividend on December 13, 2024.
• Net unrealized gains on equity securities were $0.9 million in the fourth quarter of 2024. The full year 2024 unrealized gain of $9.5 million is reflective of favorable equity market returns during the year.
• As of December 31, 2024, the carrying value of the Company’s investment portfolio, including cash and cash equivalents, was $832.8 million.

CAPITAL MANAGEMENT

In an accompanying announcement, the Company’s board of directors increased the regular quarterly dividend by 5.4% from $0.37 per share to $0.39 per share, payable on March 21, 2025, to shareholders of record as of March 7, 2025.

SUPPLEMENTAL INFORMATION

	Three Months Ended								Twelve Months Ended
	December 31,								December 31,
		2024				2023				2024				2023
	(in thousands, except share and per share data)
Net income	$	13,194			$	19,181			$	55,436			$	62,108
Less:
Net realized gains (losses) on investments		(395	)			1,113				(576	)			6,579
Net unrealized gains on  equity securities (pre-tax)		917				5,120				9,508				1,228
Tax effect (1)		(110	)			(1,309	)			(1,876	)			(1,639	)
Operating net income (2)	$	12,782			$	14,257			$	48,380			$	55,940
Average shareholders’ equity (3)	$	285,856			$	314,167			$	274,896			$	304,942
Less:
Average accumulated other comprehensive  loss		(5,775	)			(13,779	)			(8,035	)			(10,511	)
Average adjusted shareholders’ equity (2)	$	291,631			$	327,946			$	282,931			$	315,453
Diluted weighted average common shares		19,116,519				19,220,250				19,159,805				19,226,021
Return on average equity (4)		18.5	%			24.4	%			20.2	%			20.4	%
Operating return on average adjusted equity (2)		17.5	%			17.4	%			17.1	%			17.7	%
Diluted earnings per share	$	0.69			$	1.00			$	2.89			$	3.23
Operating earnings per share (2)	$	0.67			$	0.74			$	2.53			$	2.91
________________________________

(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 U.S. Securities and Exchange Commission (the SEC) and includes a reconciliation of non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP in the Supplemental Information in this release.

Management believes that investors’ understanding of core operating performance is enhanced by AMERISAFE’s disclosure of these standard industry 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 February 27, 2025, at 10:30 a.m. Eastern Time to discuss the results for the quarter. To participate in the conference call, dial 786-789-4797 (Conference Code 3280069) 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, expectations 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 current views and expectations of the workers’ compensation insurance market, AMERISAFE’s growth opportunities, underwriting margins and actions by competitors. Investors are cautioned that many of the assumptions upon which these forward-looking statements are based might change after the date the forward-looking statements are made. Actual results may differ materially from the results expressed or implied in the forward-looking statements if the underlying assumptions prove to be incorrect or changes otherwise occur, or as the results of the materialization of risks, uncertainties and other factors impacting the business and operations of the Company, our policyholders or the market value of our investment portfolio. Factors that may affect our results are set forth in the Company’s filings with the U.S. 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 update or revise any forward-looking statements, which speak only as of the date made, notwithstanding any changes in its assumptions, changes in business plans, actual experience or other changes that arise after the date of this release.

- Tables to Follow –

AMERISAFE, INC. AND SUBSIDIARIES Consolidated Statements of Income (in thousands, except per share amounts)
	Three Months Ended								Twelve Months Ended
	December 31,								December 31,
		2024				2023				2024				2023
	(unaudited)								(unaudited)
Revenues:
Gross premiums written	$	62,702			$	60,324			$	294,144			$	285,355
Ceded premiums written		(6,260	)			(4,365	)			(18,164	)			(16,621	)
Net premiums written	$	56,442			$	55,959			$	275,980			$	268,734
Net premiums earned	$	66,510			$	65,712			$	270,639			$	267,125
Net investment income		6,914				8,077				29,212				31,339
Net realized gains (losses) on investments		(395	)			1,113				(576	)			6,579
Net unrealized gains on  equity securities		917				5,120				9,508				1,228
Fee and other income		83				94				260				582
Total revenues		74,029				80,116				309,043				306,853
Expenses:
Loss and loss adjustment expenses incurred		37,502				36,455				157,267				148,263
Underwriting and other operating costs		19,750				18,988				80,129				78,313
Policyholder dividends		23				732				2,657				2,957
Provision for investment related credit
loss benefit		(20	)			(6	)			(66	)			(57	)
Total expenses		57,255				56,169				239,987				229,476
Income before taxes		16,774				23,947				69,056				77,377
Income tax expense		3,580				4,766				13,620				15,269
Net income	$	13,194			$	19,181			$	55,436			$	62,108
Basic EPS:
Net income	$	13,194			$	19,181			$	55,436			$	62,108
Basic weighted average common shares		19,035,995				19,159,911				19,070,717				19,149,080
Basic earnings per share	$	0.69			$	1.00			$	2.91			$	3.24
Diluted EPS:
Net income	$	13,194			$	19,181			$	55,436			$	62,108
Diluted weighted average common shares:
Weighted average common shares		19,035,995				19,159,911				19,070,717				19,149,080
Restricted stock and RSUs		80,524				60,339				89,088				76,941
Diluted weighted average common shares		19,116,519				19,220,250				19,159,805				19,226,021
Diluted earnings per share	$	0.69			$	1.00			$	2.89			$	3.23

AMERISAFE, INC. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands)
	December 31,				December 31,
		2024				2023
	(unaudited)
Assets
Investments	$	788,778			$	857,786
Cash and cash equivalents		44,045				38,682
Amounts recoverable from reinsurers		117,019				129,963
Premiums receivable, net		142,659				132,861
Deferred income taxes		19,448				20,403
Deferred policy acquisition costs		19,151				17,975
Other assets		26,691				31,492
	$	1,157,791			$	1,229,162
Liabilities and Shareholders’ Equity
Liabilities:
Reserves for loss and loss adjustment expenses	$	651,309			$	673,994
Unearned premiums		121,926				116,585
Insurance-related assessments		14,852				16,896
Other liabilities		112,363				129,236
Shareholders’ equity		257,341				292,451
Total liabilities and shareholders’ equity	$	1,157,791			$	1,229,162

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250226965020/en/

Andy Omiridis, EVP & CFO

AMERISAFE

337.463.9052

Source: AMERISAFE, Inc.

FAQ

What was AMERISAFE's (AMSF) net income and ROE for full-year 2024?

AMERISAFE reported $55.4 million in net income with a return on equity of 20.2% for 2024.

How much did AMSF's voluntary premiums grow in Q4 2024?

Voluntary premiums increased by 8.5% compared to Q4 2023, driven by strong premium retention and new business production.

What is AMERISAFE's new quarterly dividend for 2025?

The Board increased the quarterly dividend by 5.4% to $0.39 per share, payable March 21, 2025.

How did AMSF's investment income perform in Q4 2024?

Net investment income decreased 14.4% to $6.9 million due to reduced investable assets following the special dividend payment.

What was AMERISAFE's combined ratio for full-year 2024?

AMERISAFE achieved a combined ratio of 88.7% for the full year 2024.