EMPLOYERS HOLDINGS, INC. INVESTOR PRESENTATION
First Quarter 2024
Forward-Looking Statements
In this presentation, 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, economic or market conditions, including current levels of inflation, changes in interest rates, labor market expectations, catastrophic events or geo-political conditions, legislative or regulatory actions or court decisions, 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. The Company and its management caution investors that such forward-looking statements are not guarantees of future performance. Risks and uncertainties are inherent in the Company'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 the Company's public filings with the the Securities and Exchange Commission (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.
Filings with the SEC
The Company's filings with the SEC and its quarterly investor presentations can be accessed through the "Investors" link on the Company's website, www.employers.com. The Company's filings with the SEC can also be accessed through the SEC's EDGAR Database at www.sec.gov (EDGAR CIK No. 0001379041).
© 2024 EMPLOYERS. All rights reserved.
EMPLOYERS® and America's small business insurance specialist® are registered trademarks of EIG Services, Inc. Employers Holdings, Inc. is a holding company with subsidiaries that are specialty providers of workers' compensation insurance and services focused on small and select businesses engaged in low-to-medium hazard industries. The Company operates throughout the United States, with the exception of four states that are served exclusively by their state funds. Insurance is offered through Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, Employers Assurance Company and Cerity Insurance Company, all rated A- (Excellent) by the A.M. Best Company. Not all companies do business in all jurisdictions. See www.employers.comand www.cerity.comfor coverage availability.
www.employers.com | 2 |
EMPLOYERS®
Business Overview
www.employers.com | 3 |
Who We Are (the Numbers)
EMPLOYERS® is a mono-line writer of workers' compensation (WC) insurance
focused on low-to-mediumhazard risk small businesses.
MARKETS AND DISTRIBUTION
$211 Million
1Q24 Gross Written Premiums
Low-to-Medium Hazard Focus
Shown as a percentage of 3/31/24 in-force premium
92% | 8% |
Hazard Groups | Hazard Groups |
A-E (lower risk) | F-G (higher risk) |
Premium Contribution
Specialty
Agents,
Distribution
Partners
Traditional and DTC
Insurance33%
Agents
67%
$758 Million
In-force Premium
at March 31, 2024 (incl. est. audit premium)
127,484 in-force policies $5,942 average policy size
Nationwide Platform
as of 12/31/2023
www.employers.com | 4 |
Who We Are (the Words)
Over 100-year operating history
Strong underwriting focus with established presence in attractive markets
Record number of policies in-force, excellent operating ratios
Unique, long-standing strategic distribution relationships
Conservative risk profile and prudent capital management
Solid financial position and strong balance sheet
UNIQUE GROWTH DRIVERS SPECIFIC TO EMPLOYERS
Transforming how small businesses and insurance agents utilize digital capabilities to improve their customer experience
-
enhancing the agent experience and agent
efficiency
(ii) providing direct-to-
customer workers'
compensation insurance policies through our Cerity brand, which was developed to meet the needs of small businesses seeking an online experience
www.employers.com | 5 |
What We Write
Top Ten Employer Classifications | % of Premium |
Restaurants & Other Eating Places | 17% |
Traveler Accommodation | 6% |
Automobile Dealers | 4% |
Services to Buildings and Dwellings | 4% |
Automobile Repair and Maintenance | 3% |
Real Estate Management | 3% |
Schools | 3% |
Offices of Physicians | 3% |
Other Store Retailers | 3% |
Wholesale Stores | 3% |
EMPLOYERS® plans to further expand into other low-to-medium hazard group classes of business in the future
% of Premium as of December 31, 2023
www.employers.com | 6 |
Marketing And Distribution
We market and sell our workers' compensation insurance products through:
- Local, regional, specialty and national insurance agents and brokers;
- National, regional, and local trade groups and associations; and
- Direct-to-customerinteractions.
Traditional Insurance | Specialty Agents and | DTC |
Agents and Brokers | Distribution Partners | Direct-to-customer |
~67% | ~32% | ~1% |
of in-force premium at 12/31/23 | of in-force premium at 12/31/23 | of in-force premium at 12/31/23 |
We establish and maintain strong, long-term relationships with our vetted and appointed traditional insurance agencies that actively market our products and services. We offer ease of doing business, provide responsive service, and pay competitive commissions. Our sales representatives and underwriters work closely with these agencies to market and underwrite our business. This results in enhanced understanding of the businesses, the risks we underwrite, and the needs of prospective customers. We do not delegate underwriting authority to agents or brokers.
We had approximately 2,500 traditional insurance agencies that marketed and sold our insurance products at December 31, 2023.
We have developed and continue to add other important and emerging distribution channels for our products and services including payroll companies, and health care and property and casualty insurers, as well as digital agents and marketplaces.
A significant concentration of our business is being generated by our specialty agent Automatic Data Processing, Inc. (ADP). As part of its services, ADP sells our workers' compensation insurance product along with its payroll and accounting services through its insurance agency and field sales staff. ADP generated 16% of our ending 2023 in-force premiums.
Our digital distribution channel utilizes proprietary application programming interfaces (APIs) to submit, quote and bind applications for workers' compensation insurance. Digital agents generated 5% of our ending 2023 in- force premiums.
To address the changing buying behaviors of small and micro-businesses, we continue our commitment to our Cerity brand, which offers digital insurance solutions, including direct-to- customer workers' compensation coverage.
Cerity specializes in smaller risks in those classes of business where we believe that customers prefer an online experience and offers a digital and mobile-friendly experience that allows small businesses to easily acquire and maintain their policies.
as of 12/31/2023
www.employers.com | 7 |
2023 Workers' Compensation Market
PROPERTY AND CASUALTY INSURANCE INDUSTRY | |||||
DIRECT | DIRECT | MARKET | |||
PREMIUMS | PREMIUMS | ||||
RANK | GROUP/COMPANY NAME | WRITTEN | EARNED | SHARE % | |
1 | TRAVELERS GRP | 3,866,767,331 | 3,849,946,580 | 6.6 | |
2 | HARTFORD FIRE & CAS GRP | 3,771,503,918 | 3,711,058,710 | 6.5 | |
3 | AMTRUST FINANCIAL SERV GRP | 3,425,169,973 | 3,344,212,861 | 5.9 | |
4 | ZURICH INS GRP | 2,932,999,433 | 2,906,799,813 | 5.0 | |
5 | CHUBB LTD GRP | 2,378,524,732 | 2,443,460,739 | 4.1 | |
6 | BERKSHIRE HATHAWAY GRP | 2,125,792,572 | 2,113,200,464 | 3.6 | |
7 | LIBERTY MUT GRP | 2,093,981,396 | 2,175,890,153 | 3.6 | |
8 | STATE INS FUND | 1,709,192,550 | 1,728,657,460 | 2.9 | NY State Fund |
9 | BCBS OF MI GRP | 1,670,453,988 | 1,699,989,988 | 2.9 | |
10 | OLD REPUBLIC GRP | 1,471,615,206 | 1,456,700,846 | 2.5 | |
11 | AMERICAN FINANCIAL GRP | 1,418,133,289 | 1,408,175,823 | 2.4 | |
12 | AMERICAN INTL GRP | 1,230,622,818 | 1,210,299,163 | 2.1 | |
13 | WR BERKLEY CORP GRP | 1,219,710,396 | 1,202,526,654 | 2.1 | |
14 | STATE COMPENSATION INS | 1,140,750,936 | 1,139,003,536 | 2.0 | CA State Fund |
15 | FUND | 1,108,761,083 | 1,040,813,554 | 1.9 | TX State Fund |
ICW GRP ASSETS INC GRP | |||||
16 | TEXAS MUT INS CO | 1,090,472,150 | 1,067,489,743 | 1.9 | |
17 | CNA INS GRP | 1,070,153,508 | 1,001,634,082 | 1.8 | |
18 | ARCH INS GRP | 860,901,296 | 822,773,731 | 1.5 | |
19 | EMPLOYERS HOLDINGS GRP | 758,599,058 | 719,895,632 | 1.3 | |
20 | FAIRFAX FIN GRP | 757,824,451 | 761,509,347 | 1.3 | |
21 | STARR GRP | 667,542,449 | 675,417,170 | 1.1 | |
22 | SAIF CORP | 582,017,765 | 564,114,897 | 1.0 | |
23 | ENCOVA MUT INS GRP | 572,309,690 | 561,526,772 | 1.0 | |
24 | MARKEL CORP GRP | 571,279,280 | 586,001,760 | 1.0 | |
25 | COPPERPOINT GRP | 536,254,436 | 526,059,952 | 0.9 |
We are the 19th largest Workers' Compensation writer
www.employers.com | Source: 2022 NAIC P&C Report | 8 |
$ in millions
Market Conditions
In-Force Policies and Premium | |||||||||||||||
$800 | 175,000 | ||||||||||||||
$750 | 150,000 | ||||||||||||||
$700 | 125,000 | ||||||||||||||
$650 | |||||||||||||||
$600 | 100,000 | ||||||||||||||
$550 | BEFORE | AFTER | 75,000 | ||||||||||||
COVID`-19 | COVID-19 | ||||||||||||||
$500 | PANDEMIC | PANDEMIC | 50,000 | ||||||||||||
12/31/17 | 12/31/18 | 12/31/19 | 12/31/20* | 12/31/21* | 12/31/22* | 12/31/23* | 3/31/24* | ||||||||
In-Force Premium | Policies In-Force | ||||||||||||||
* 2020 and onward in-force premiums include an estimate of audit premium |
1Q24 Update
Reached a record-level of 127,484 policies in-force
# of policies
www.employers.com | 9 |
Five-Year Annual Financial Performance
Adjusted EPS (Diluted)
$3.83 | ||||
$3.20 | $3.10 | $2.93 | ||
$2.37 | ||||
2019 | 2020 | 2021 | 2022 | 2023 |
Combined Ratio excluding LPT
94.0% | 93.4% | 98.0% | 98.1% | 96.0% |
Adjusted ROE
8.6% | 7.6% | 8.5% | ||
6.6% | ||||
5.5% | ||||
2019 | 2020 | 2021 | 2022 | 2023 |
Adjusted Book Value per Share
$47.26
$45.67
26.9% | 29.5% | 27.9% | 24.8% | 24.9% | ||||||
14.2% | ||||||||||
13.9% | ||||||||||
13.2% | ||||||||||
12.7% | 12.8% | |||||||||
57.2% | ||||||||||
54.4% | 51.1% | 56.9% | 59.1% | |||||||
$42.82
$39.47
$43.78
2019 | 2020 | 2021 | 2022 | 2023 | |||
Loss & LAE | Commission Ratio | Underwriitng expense ratio | |||||
2019 | 2020 | 2021 | 2022 | 2023 |
www.employers.com | 10 |
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Disclaimer
Employers Holdings Inc. published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 19:51:20 UTC.
