Employers Holdings, Inc. Reports First Quarter 2019 Results
April 24, 2019
-
Net income of $51.8 million ($1.57 per diluted share), adjusted net
income of $30.9 million ($0.94 per diluted share), - Net investment income of $21.8 million, up 12% year-over-year,
- Gross premiums written of $210.0 million, down 1% year-over-year,
-
Combined ratio of 90.4%, combined ratio before the impact of the LPT
of 91.9%.
RENO, Nev.–(BUSINESS WIRE)–Employers Holdings, Inc. (“EHI” or the “Company”) (NYSE:EIG)
today reported the following for the first quarter of 2019: (i) net
income of $51.8 million ($1.57 per diluted share); (ii) net income
before the impact of the LPT of $49.3 million ($1.50 per diluted share);
and (iii) adjusted net income of $30.9 million ($0.94 per diluted share).
The Company’s adjusted net income for the first quarter of 2019
increased $1.6 million year-over-year. This increase primarily reflects
the after-tax impact of the following items: (i) $22.0 million of
favorable prior year loss reserve development on voluntary business
versus $12.0 million of favorable development a year ago, (ii) $21.8
million of net investment income versus $19.4 million a year ago;
partially offset by (iii) $47.5 million of underwriting and other
operating expenses versus $39.2 million a year ago.
The Company’s net income and net income before the impact of the LPT for
the first quarter of 2019 increased by $26.2 million and $26.3 million,
respectively, year-over-year. These first quarter 2019 net income
measures were each favorably impacted by the after-tax impact of the
items previously mentioned, as well as the after-tax impact of $21.2
million of unrealized investment gains relating to the Company’s equity
investments versus $12.9 of unrealized investment losses recognized a
year ago.
The Company’s book value per share of $33.22, book value per share
including the Deferred Gain of $37.78 and adjusted book value per share
of $37.04 increased by 7.6%, 6.6%, and 3.3% during the first three
months of 2019, respectively, each computed after taking into account
dividends declared. Book value per share and book value per share
including the Deferred Gain at March 31, 2019 were each favorably
impacted by $37.3 million of net after tax unrealized gains from the
Company’s portfolio of fixed maturity securities.
Chief Executive Officer Douglas Dirks commented on the results: “Our
first quarter results were highly satisfying and largely consistent with
our expectations. During the quarter, we delivered a 10.4% annualized
return on adjusted equity, nearly maintained our top line despite
pricing headwinds, actively bought back our stock and executed well on
our previously announced plan of aggressive development and
implementation of new technologies and capabilities to transform and
enhance the digital experience of our customers.”
Summary of First Quarter 2019 Operating
Results
(All comparisons vs. first quarter 2018, unless noted otherwise).
Gross premiums written were $210.0 million, a decrease of 1%. The
decrease was due primarily to a decrease in final audit premiums as well
as a decrease in average premium rates. Net earned premiums were $174.8
million, a decrease of 1% year-over-year.
The loss and LAE ratio before the impact of the LPT of 52.1% decreased
3.4 percentage points reflecting observed favorable paid loss trends,
including those resulting from our key business initiatives including:
an emphasis on settling open claims; diversifying our risk exposure
across geographic markets; and leveraging data-driven strategies to
target, underwrite and price profitable classes of business across all
of our markets. During the quarter, the Company: (i) increased its
current accident year loss and LAE ratio on its voluntary business to
64.5%, versus 62.5% a year ago; and (ii) recognized 12.7 percentage
points of favorable prior year loss reserve development versus 7.0
percentage points a year ago.
The commission expense ratio of 12.6% decreased 0.8 percentage points,
primarily as a result of a decrease in projected 2019 agency incentive
commissions.
The underwriting and other operating expense ratio of 27.1% increased
4.9 percentage points. Expenses associated with our aggressive
development and implementation of new digital technologies and
capabilities contributed 3.9 percentage points to the increase. The
remaining 1.0 percentage point increase resulted from significantly
higher than anticipated recoveries of bad debts a year ago than those
experienced in the current quarter.
Net investment income of $21.8 million increased 12%, primarily as a
result of the Company’s strong operating cash flows, as well as higher
pre-tax book yields.
Income tax expense was $10.0 million (a 16.2% effective rate) versus
$3.8 million (a 12.9% effective rate). The increase in the effective
rate is due primarily to having a higher proportion of fully taxable
income in the current quarter than a year ago.
Share Repurchases and Second Quarter Dividend
Declaration
During the first quarter of 2019, the Company repurchased 670,837 shares
of its common stock at an average price of $40.90 per share. During the
period from April 1, 2019 through April 23, 2019, the Company
repurchased a further 241,264 shares of its common shares at an average
price of $40.77 per share.
On April 24, 2019, the Board of Directors authorized a $50 million
expansion to its existing share repurchase program and extended the
repurchase authority pursuant to the expanded program through June 30,
2020. As a result of this action, the Company currently has a remaining
share repurchase authorization of $58.1 million.
On April 24, 2019, the Board of Directors also declared a second quarter
2019 dividend of $0.22 per share. The dividend is payable on May 22,
2019 to stockholders of record as of May 8, 2019.
Conference Call and Webcast, Reports Filed with
The Securities and Exchange Commission (the “SEC”) and Supplemental
Materials
The information in this press release should be read in conjunction with
the Financial Supplement that is attached to this press release and is
available on our website.
Reconciliation of Non-GAAP Financial Measures to GAAP
Within this earnings release we present various financial measures, some
of which are a “non-GAAP financial measure” as defined in Regulation G
pursuant to Section 401 of the Sarbanes – Oxley Act of 2002. A
description of these non-GAAP financial measures, as well as a
reconciliation of such non-GAAP measures to the Company’s most directly
comparable GAAP financial measures is included in the attached Financial
Supplement. Management believes that these non-GAAP measures are
meaningful to the Company’s investors, analysts and other interested
parties who benefit from having an objective and consistent basis for
comparison with other companies within our industry. These non-GAAP
measures are not a substitute for GAAP measures and investors should be
careful when comparing the Company’s non-GAAP financial measures to
similarly titled measures used by other companies. Other companies may
calculate these measures differently, and, therefore, these measures may
not be comparable.
The Company will host a conference call on Thursday, April 25, 2019, at
8:30 a.m. Pacific Daylight Time. The conference call will be available
via a live web cast on the Company’s web site at www.employers.com.
An archived version will be available several hours after the call. The
conference call replay number is (404) 537-3406 or (855) 859-2056 with a
pass code of 4049627.
The Company provides its filings with the SEC and its investor
presentations on its website at www.employers.com.
Forward-Looking Statements
In this press release, the Company and its management discuss and make
statements based on currently available information regarding their
intentions, beliefs, current expectations, and projections of, among
other things, the Company’s future performance, business growth,
retention rates, loss costs, claim trends and the impact of key business
initiatives, future technologies and planned investments. Certain of
these statements may constitute “forward-looking” statements as that
term is defined in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by the fact that they do
not relate strictly to historical or current facts and are often
identified by words such as “may,” “will,” “could,” “would,” “should,”
“expect,” “plan,” “anticipate,” “target,” “project,” “intend,”
“believe,” “estimate,” “predict,” “potential,” “pro
forma,” “seek,” “likely,” or “continue,” or other comparable
terminology and their negatives. EHI and its management caution
investors that such forward-looking statements are not guarantees of
future performance. Risks and uncertainties are inherent in EHI’s future
performance. Factors that could cause the Company’s actual results to
differ materially from those indicated by such forward-looking
statements include, among other things, those discussed or identified
from time to time in EHI’s public filings with the SEC, including the
risks detailed in the Company’s Quarterly Reports on Form 10-Q and the
Company’s Annual Reports on Form 10-K. Except as required by applicable
securities laws, the Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise.
The SEC filings for EHI can be accessed through the “Investors” link on
the Company’s website, www.employers.com,
or through the SEC’s EDGAR Database at www.sec.gov
(EHI EDGAR CIK No. 0001379041).
About Employers Holdings, Inc.
Employers Holdings, Inc. (NYSE:EIG) is a holding company with
subsidiaries that are specialty providers of workers’ compensation
insurance and services focused on select small businesses engaged in
low-to-medium hazard industries. The company, through its subsidiaries,
operates in 45 states and the District of Columbia. Insurance is offered
by Employers Insurance Company of Nevada, Employers Compensation
Insurance Company, Employers Preferred Insurance Company, and Employers
Assurance Company, all rated A- (Excellent) by A.M. Best Company.
Additional information can be found at: www.employers.com.
Copyright © 2019 EMPLOYERS. All rights reserved.
EMPLOYERS® and America’s small business insurance specialist® are
registered trademarks of Employers Insurance Company of Nevada.
Insurance is offered through Employers Compensation Insurance Company,
Employers Insurance Company of Nevada, Employers Preferred Insurance
Company, Employers Assurance Company. Not all insurers do business in
all jurisdictions.
|
Employers Holdings, Inc. |
| First Quarter 2019 |
| Financial Supplement |
| EMPLOYERS HOLDINGS, INC. | ||||
| Table of Contents | ||||
| Page | ||||
|
1 |
Consolidated Financial Highlights | |||
|
2 |
Summary Consolidated Balance Sheets | |||
|
3 |
Summary Consolidated Income Statements | |||
|
4 |
Return on Equity | |||
|
5 |
Combined Ratios | |||
|
6 |
Roll-forward of Unpaid Losses and LAE | |||
|
7 |
Consolidated Investment Portfolio | |||
|
8 |
Book Value Per Share | |||
|
9 |
Earnings Per Share | |||
|
10 |
Non-GAAP Financial Measures | |||
| EMPLOYERS HOLDINGS, INC. | |||||||||||
| Consolidated Financial Highlights (unaudited) | |||||||||||
| $ in millions, except per share amounts | |||||||||||
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| 2019 | 2018 | % change | |||||||||
| Selected financial highlights: | |||||||||||
| Gross premiums written | $ | 210.0 | $ | 211.6 | (1 | )% | |||||
| Net premiums written | 208.7 | 210.1 | (1 | ) | |||||||
| Net premiums earned | 174.8 | 176.6 | (1 | ) | |||||||
| Net investment income | 21.8 | 19.4 | 12 | ||||||||
| Underwriting income(1) | 16.7 | 18.3 | (9 | ) | |||||||
| Net income before impact of the LPT(1) | 49.3 | 23.0 | 114 | ||||||||
| Adjusted net income(1) | 30.9 | 29.3 | 5 | ||||||||
| Net income | 51.8 | 25.6 | 102 | ||||||||
| Comprehensive income (loss) | 89.1 | (9.8 | ) |
n/m |
|
||||||
| Total assets | 3,973.1 | 3,847.9 | 3 | ||||||||
| Stockholders’ equity | 1,071.7 | 930.3 | 15 | ||||||||
| Stockholders’ equity including the Deferred Gain(2) | 1,218.8 | 1,091.3 | 12 | ||||||||
| Adjusted stockholders’ equity(2) | 1,195.2 | 1,093.3 | 9 | ||||||||
| Annualized adjusted return on stockholders’ equity(3) | 10.4 | % | 11.2 | % | (7 | )% | |||||
| Amounts per share: | |||||||||||
| Cash dividends declared per share | $ | 0.22 | $ | 0.20 | 10 |
% |
|||||
| Earnings per diluted share(4) | 1.57 | 0.77 | 104 | ||||||||
| Earnings per diluted share before impact of the LPT(4) | 1.50 | 0.69 | 117 | ||||||||
| Adjusted earnings per diluted share(4) | 0.94 | 0.88 | 7 | ||||||||
| Book value per share(2) | 33.22 | 28.40 | 17 | ||||||||
| Book value per share including the Deferred Gain(2) | 37.78 | 33.32 | 13 | ||||||||
| Adjusted book value per share(2) | 37.04 | 33.38 | 11 | ||||||||
| Combined ratio before impact of the LPT:(5) | |||||||||||
| Loss and loss adjustment expense ratio: | |||||||||||
| Current year | 64.8 | % | 62.5 | % | |||||||
| Prior year | (12.7 | ) | (7.0 | ) | |||||||
| Loss and loss adjustment expense ratio | 52.1 | % | 55.5 | % | |||||||
| Commission expense ratio | 12.6 | 13.4 | |||||||||
| Underwriting and other operating expenses ratio | 27.1 | 22.2 | |||||||||
| Combined ratio before impact of the LPT | 91.9 | % | 91.1 | % | |||||||
|
(1) See Page 3 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures. |
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(2) See Page 8 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures. |
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(3) See Page 4 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures. |
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(4) See Page 9 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures. |
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(5) See Page 5 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures. |
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| EMPLOYERS HOLDINGS, INC. | ||||||||
| Summary Consolidated Balance Sheets (unaudited) | ||||||||
| $ in millions, except per share amounts | ||||||||
|
March 31, 2019 |
December 31, 2018 |
|||||||
| ASSETS | ||||||||
| Investments, cash and cash equivalents | $ | 2,852.2 | $ | 2,829.7 | ||||
| Accrued investment income | 18.2 | 18.0 | ||||||
| Premiums receivable, net | 352.7 | 333.1 | ||||||
| Reinsurance recoverable on paid and unpaid losses and LAE | 505.4 | 511.1 | ||||||
| Deferred policy acquisition costs | 52.5 | 48.2 | ||||||
| Deferred income taxes, net | 12.9 | 26.9 | ||||||
| Contingent commission receivable—LPT Agreement | 32.0 | 32.0 | ||||||
| Other assets | 147.2 | 120.2 | ||||||
| Total assets | $ | 3,973.1 | $ | 3,919.2 | ||||
| LIABILITIES | ||||||||
| Unpaid losses and LAE | $ | 2,189.3 | $ | 2,207.9 | ||||
| Unearned premiums | 368.9 | 336.3 | ||||||
| Commissions and premium taxes payable | 53.8 | 57.3 | ||||||
| Deferred Gain | 147.1 | 149.6 | ||||||
| Notes payable | 20.0 | 20.0 | ||||||
| Other liabilities | 122.3 | 129.9 | ||||||
| Total liabilities | $ | 2,901.4 | $ | 2,901.0 | ||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Common stock and additional paid-in capital | $ | 388.7 | $ | 389.4 | ||||
| Retained earnings(2) | 1,075.1 | 1,030.7 | ||||||
| Accumulated other comprehensive income (loss), net | 23.6 | (13.7 | ) | |||||
| Treasury stock, at cost | (415.7 | ) | (388.2 | ) | ||||
| Total stockholders’ equity | 1,071.7 | 1,018.2 | ||||||
| Total liabilities and stockholders’ equity | $ | 3,973.1 | $ | 3,919.2 | ||||
| Stockholders’ equity including the Deferred Gain (1) | $ | 1,218.8 | $ | 1,167.8 | ||||
| Adjusted stockholders’ equity (1) | 1,195.2 | 1,181.5 | ||||||
| Book value per share (1) | $ | 33.22 | $ | 31.08 | ||||
| Book value per share including the Deferred Gain(1) | 37.78 | 35.64 | ||||||
| Adjusted book value per share (1) | 37.04 | 36.06 | ||||||
|
(1) See Page 8 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures. |
||
| EMPLOYERS HOLDINGS, INC. | ||||||||
| Summary Consolidated Income Statements (unaudited) | ||||||||
| $ in millions | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2019 | 2018 | |||||||
| Underwriting revenues: | ||||||||
| Gross premiums written | $ | 210.0 | $ | 211.6 | ||||
| Premiums ceded | (1.3 | ) | (1.5 | ) | ||||
| Net premiums written | 208.7 | 210.1 | ||||||
| Net premiums earned | 174.8 | 176.6 | ||||||
| Underwriting expenses: | ||||||||
| Losses and LAE incurred | (88.6 | ) | (95.4 | ) | ||||
| Commission expense | (22.0 | ) | (23.7 | ) | ||||
| Underwriting and other operating expenses | (47.5 | ) | (39.2 | ) | ||||
| Underwriting income | 16.7 | 18.3 | ||||||
| Net investment income | 21.8 | 19.4 | ||||||
| Net realized and unrealized gains (losses) on investments(1) | 23.3 | (8.0 | ) | |||||
| Other income | 0.4 | — | ||||||
| Interest and financing expenses | (0.4 | ) | (0.3 | ) | ||||
| Income tax expense | (10.0 | ) | (3.8 | ) | ||||
| Net income | 51.8 | 25.6 | ||||||
|
Unrealized AFS investment gains (losses) arising during the period, net of tax(2) |
37.8 | (35.8 | ) | |||||
|
Reclassification adjustment for realized AFS investment (gains) losses in net income, net of tax(2) |
(0.5 | ) | 0.4 | |||||
| Comprehensive income (loss) | $ | 89.1 | $ | (9.8 | ) | |||
| Net Income | $ | 51.8 | $ | 25.6 | ||||
| Amortization of the Deferred Gain – losses | (2.0 | ) | (2.1 | ) | ||||
| Amortization of the Deferred Gain – contingent commission | (0.5 | ) | (0.5 | ) | ||||
| Net income before impact of the LPT Agreement (3) | 49.3 | 23.0 | ||||||
| Net realized and unrealized (gains) losses on investments | (23.3 | ) | 8.0 | |||||
|
Income tax expense (benefit) related to items excluded from Net income |
4.9 | (1.7 | ) | |||||
| Adjusted net income (3) | $ | 30.9 | $ | 29.3 | ||||
|
(1) Includes $21.2 million of unrealized gains on equity securities and $12.9 million of unrealized losses on equity securities for the three months ended March 31, 2019 and 2018, respectively. |
| (2) AFS = Available for Sale securities. |
| (3) See Page 10 regarding our use of Non-GAAP Financial Measures. |
| EMPLOYERS HOLDINGS, INC. | ||||||||||
| Return on Equity (unaudited) | ||||||||||
| $ in millions | ||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2019 | 2018 | |||||||||
| Net income | A | $ | 51.8 | $ | 25.6 | |||||
| Impact of the LPT Agreement | (2.5 | ) | (2.6 | ) | ||||||
| Net realized and unrealized (gains) losses on investments | (23.3 | ) | 8.0 | |||||||
| Amortization of intangibles | — | — | ||||||||
|
Income tax expense (benefit) related to items excluded from Net income |
4.9 | (1.7 | ) | |||||||
| Adjusted net income (1) | B | 30.9 | 29.3 | |||||||
| Stockholders’ equity – end of period | $ | 1,071.7 | $ | 930.3 | ||||||
| Stockholders’ equity – beginning of period | 1,018.2 | 947.7 | ||||||||
| Average stockholders’ equity | C | 1,045.0 | 939.0 | |||||||
| Stockholders’ equity – end of period | $ | 1,071.7 | $ | 930.3 | ||||||
| Deferred Gain – end of period | 147.1 | 161.0 | ||||||||
| Accumulated other comprehensive loss (income) – end of period | (29.9 | ) | 2.5 | |||||||
|
Income taxes related to accumulated other comprehensive gains and losses – end of period |
6.3 | (0.5 | ) | |||||||
| Adjusted stockholders’ equity – end of period | 1,195.2 | 1,093.3 | ||||||||
| Adjusted stockholders’ equity – beginning of period | 1,181.5 | 1,003.9 | ||||||||
| Average adjusted stockholders’ equity (1) | D | 1,188.4 | 1,048.6 | |||||||
| Return on stockholders’ equity | A / C | 5.0 | % | 2.7 | % | |||||
| Annualized return on stockholders’ equity | 19.8 | 10.9 | ||||||||
| Adjusted return on stockholders’ equity (1) | B / D | 2.6 | % | 2.8 | % | |||||
| Annualized adjusted return on stockholders’ equity (1) | 10.4 | 11.2 | ||||||||
|
(1) See Page 10 for information regarding our use of Non-GAAP Financial Measures. |
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| EMPLOYERS HOLDINGS, INC. | ||||||||||
| Combined Ratios (unaudited) | ||||||||||
| $ in millions | ||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2019 | 2018 | |||||||||
| Net premiums earned | A | $ | 174.8 | $ | 176.6 | |||||
| Losses and LAE incurred | B | 88.6 | 95.4 | |||||||
| Amortization of the Deferred Gain – losses | 2.0 | 2.1 | ||||||||
| Amortization of the Deferred Gain – contingent commission | 0.5 | 0.5 | ||||||||
| Losses and LAE before impact of the LPT (1) | C | 91.1 | 98.0 | |||||||
| Prior accident year favorable loss reserve development | (22.2 | ) | (12.4 | ) | ||||||
| Losses and LAE before impact of the LPT – current accident year | D | $ | 113.3 | $ | 110.4 | |||||
| Commission expense | E | $ | 22.0 | $ | 23.7 | |||||
| Underwriting and other operating expenses | F | 47.5 | 39.2 | |||||||
| Combined ratio: | ||||||||||
| Loss and LAE ratio | B/A | 50.7 | % | 54.0 | % | |||||
| Commission expense ratio | E/A | 12.6 | 13.4 | |||||||
| Underwriting and other operating expenses ratio | F/A | 27.1 | 22.2 | |||||||
| Combined ratio | 90.4 | % | 89.6 | % | ||||||
| Combined ratio before impact of the LPT: (1) | ||||||||||
| Loss and LAE ratio before impact of the LPT | C/A | 52.1 | % | 55.5 | % | |||||
| Commission expense ratio | E/A | 12.6 | 13.4 | |||||||
| Underwriting and other operating expenses ratio | F/A | 27.1 | 22.2 | |||||||
| Combined ratio before impact of the LPT | 91.9 | % | 91.1 | % | ||||||
| Combined ratio before impact of the LPT: current accident year (1) | ||||||||||
| Loss and LAE ratio before impact of the LPT | D/A | 64.8 | % | 62.5 | % | |||||
| Commission expense ratio | E/A | 12.6 | 13.4 | |||||||
| Underwriting and other operating expenses ratio | F/A | 27.1 | 22.2 | |||||||
| Combined ratio before impact of the LPT: current accident year | 104.6 | % | 98.1 | % | ||||||
|
(1) See Page 10 for information regarding our use of Non-GAAP Financial Measures. |
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| EMPLOYERS HOLDINGS, INC. | ||||||||
| Roll-forward of Unpaid Losses and LAE (unaudited) | ||||||||
| $ in millions | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2019 | 2018 | |||||||
| Unpaid losses and LAE at beginning of period | $ | 2,207.9 | $ | 2,266.1 | ||||
| Reinsurance recoverable on unpaid losses and LAE | 504.4 | 537.0 | ||||||
| Net unpaid losses and LAE at beginning of period | 1,703.5 | 1,729.1 | ||||||
| Losses and LAE incurred: | ||||||||
| Current year losses | 113.3 | 110.4 | ||||||
| Prior year losses on voluntary business | (22.0 | ) | (12.0 | ) | ||||
| Prior year losses on involuntary business | (0.2 | ) | (0.4 | ) | ||||
| Total losses incurred | 91.1 | 98.0 | ||||||
| Losses and LAE paid: | ||||||||
| Current year losses | 7.4 | 5.9 | ||||||
| Prior year losses | 96.6 | 94.2 | ||||||
| Total paid losses | 104.0 | 100.1 | ||||||
| Net unpaid losses and LAE at end of period | 1,690.6 | 1,727.0 | ||||||
| Reinsurance recoverable on unpaid losses and LAE | 498.7 | 531.1 | ||||||
| Unpaid losses and LAE at end of period | $ | 2,189.3 | $ | 2,258.1 | ||||
Total losses and LAE shown in the above table exclude amortization of
the Deferred Gain, which totaled $2.5 million and $2.6 million for the
three months ended March 31, 2019 and 2018, respectively.
| EMPLOYERS HOLDINGS, INC. | ||||||||||||||||||||||||||
| Consolidated Investment Portfolio (unaudited) | ||||||||||||||||||||||||||
| $ in millions | ||||||||||||||||||||||||||
| March 31, 2019 | December 31, 2018 | |||||||||||||||||||||||||
| Investment Positions: |
Cost or |
Net Unrealized |
Fair Value | % | Fair Value | % | ||||||||||||||||||||
| Fixed maturities | $ | 2,491.1 | $ | 29.9 | $ | 2,521.0 | 88 | % | $ | 2,496.4 | 88 | % | ||||||||||||||
| Equity securities | 147.2 | 89.2 | 236.4 | 8 | 206.3 | 7 | ||||||||||||||||||||
| Short-term investments | — | — | — | — | 25.0 | 1 | ||||||||||||||||||||
| Cash and cash equivalents | 92.3 | — | 92.3 | 3 | 101.4 | 4 | ||||||||||||||||||||
| Restricted cash and cash equivalents | 2.5 | — | 2.5 | — | 0.6 | — | ||||||||||||||||||||
| Total investments and cash | $ | 2,733.1 | $ | 119.1 | $ | 2,852.2 | 100 | % | $ | 2,829.7 | 100 | % | ||||||||||||||
| Breakout of Fixed Maturities: | ||||||||||||||||||||||||||
| U.S. Treasuries and Agencies | $ | 117.3 | $ | 0.6 | $ | 117.9 | 5 | % | $ | 117.8 | 5 | % | ||||||||||||||
| States and Municipalities | 497.7 | 21.8 | 519.5 | 21 | 528.0 | 21 | ||||||||||||||||||||
| Corporate Securities | 1,075.3 | 10.7 | 1,086.0 | 43 | 1,090.4 | 44 | ||||||||||||||||||||
| Mortgage-Backed Securities | 563.5 | (2.2 | ) | 561.3 | 22 | 545.8 | 22 | |||||||||||||||||||
| Asset-Backed Securities | 60.7 | 0.2 | 60.9 | 2 | 64.5 | 3 | ||||||||||||||||||||
| Bank Loans | 176.6 | (1.2 | ) | 175.4 | 7 | 149.9 | 6 | |||||||||||||||||||
| Total fixed maturities | $ | 2,491.1 | $ | 29.9 | $ | 2,521.0 | 100 | % | $ | 2,496.4 | 100 | % | ||||||||||||||
| Weighted average book yield |
3.4 |
% |
3.4 |
% |
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| Average credit quality (S&P) | AA- | AA- | ||||||||||||||||||||||||
| Duration | 3.9 | 4.1 | ||||||||||||||||||||||||
| EMPLOYERS HOLDINGS, INC. | ||||||||||||||||||
| Book Value Per Share (unaudited) | ||||||||||||||||||
| $ in millions, except per share amounts | ||||||||||||||||||
|
March 31, |
December 31, |
March 31, |
December 31, |
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| Numerators: | ||||||||||||||||||
| Stockholders’ equity | A | $ | 1,071.7 | $ | 1,018.2 | $ | 930.3 | $ | 947.7 | |||||||||
| Plus: Deferred Gain | 147.1 | 149.6 | 161.0 | 163.6 | ||||||||||||||
| Stockholders’ equity including the Deferred Gain (1) | B | 1,218.8 | 1,167.8 | 1,091.3 | 1,111.3 | |||||||||||||
| Accumulated other comprehensive (income) loss | (29.9 | ) | 17.3 | 2.5 | (136.0 | ) | ||||||||||||
|
Income taxes related to accumulated other comprehensive gains and losses |
6.3 | (3.6 | ) | (0.5 | ) | 28.6 | ||||||||||||
| Adjusted stockholders’ equity (1) | C | $ | 1,195.2 | $ | 1,181.5 | $ | 1,093.3 | $ | 1,003.9 | |||||||||
| Denominator (shares outstanding) | D | 32,263,810 | 32,765,792 | 32,752,139 | 32,597,819 | |||||||||||||
| Book value per share (1) | A / D | $ | 33.22 | $ | 31.08 | $ | 28.40 | $ | 29.07 | |||||||||
| Book value per share including the Deferred Gain(1) | B / D | 37.78 | 35.64 | 33.32 | 34.09 | |||||||||||||
| Adjusted book value per share (1) | C / D | 37.04 | 36.06 | 33.38 | 30.80 | |||||||||||||
| YTD Change in: (2) | ||||||||||||||||||
| Book value per share | 7.6 | % | (1.6 | )% | ||||||||||||||
| Book value per share including the Deferred Gain | 6.6 | (1.7 | ) | |||||||||||||||
| Adjusted book value per share | 3.3 | 9.0 | ||||||||||||||||
|
(1) See Page 10 for information regarding our use of Non-GAAP Financial Measures. |
|
(2) Reflects the change in book value per share after taking into account dividends declared of $0.22 and $0.20 for the three months ended March 31, 2019 and 2018, respectively. |
|
EMPLOYERS HOLDINGS, INC. |
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|
Earnings Per Share (unaudited) |
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|
$ in millions, except per share amounts |
||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2019 | 2018 | |||||||||
| Numerators: | ||||||||||
| Net income | A | $ | 51.8 | $ | 25.6 | |||||
| Impact of the LPT Agreement | (2.5 | ) | (2.6 | ) | ||||||
| Net income before impact of the LPT (1) | B | 49.3 | 23.0 | |||||||
| Net realized and unrealized (gains) losses on investments | (23.3 | ) | 8.0 | |||||||
|
Income tax expense (benefit) related to items excluded from Net income |
4.9 | (1.7 | ) | |||||||
| Adjusted net income (1) | C | $ | 30.9 | $ | 29.3 | |||||
| Denominators: | ||||||||||
| Average common shares outstanding (basic) | D | 32,442,287 | 32,830,481 | |||||||
| Average common shares outstanding (diluted) | E | 32,954,079 | 33,320,420 | |||||||
| Earnings per share: | ||||||||||
| Basic | A / D | $ | 1.60 | $ | 0.78 | |||||
| Diluted | A / E | 1.57 | 0.77 | |||||||
| Earnings per share before impact of the LPT: (1) | ||||||||||
| Basic | B / D | $ | 1.52 | $ | 0.70 | |||||
| Diluted | B / E | 1.50 | 0.69 | |||||||
| Adjusted earnings per share: (1) | ||||||||||
| Basic | C / D | $ | 0.95 | $ | 0.89 | |||||
| Diluted | C / E | 0.94 | 0.88 | |||||||
|
(1) See Page 10 for information regarding our use of Non-GAAP |
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Glossary of Financial Measures
Within this earnings release we present the following measures, each of
which are “non-GAAP financial measures.
Contacts
Mike Paquette (775) 327-2562 or mpaquette@employers.com