Reno, NV – Employers Holdings, Inc. (NYSE:EIG) recently reported net income of$14.0 million or $0.43 per diluted share, for the quarter ended March 31, 2015 compared to $10.8 million, or $0.34 per diluted share, in the prior year quarter, and net income before the impact of the Loss Portfolio Transfer (“LPT”) was $10.9 million or $0.34 per diluted share, in the current quarter compared to $6.5 million, or $0.20 per diluted share, in the prior year quarter. Operating income in the current quarter was $10.2 million, or $0.31 per diluted share, compared to $4.5 million, or $0.14 per diluted share, in the prior year quarter.
President and Chief Executive Officer Douglas Dirks commented on the results: “The pricing and underwriting initiatives we implemented last year have produced a strong start to 2015. At the end of the first quarter, we increased net income, improved our operating results – both in terms of our combined ratio and operating return on equity – and we increased book value per share. Our top line was down in the first quarter as we moved off poorly performing business or as accounts were not willing to take our price; this was most evident in Southern California. Outside of California, our in-force policies and premium increased. Our net rate was up overall, particularly in California, and our payroll exposure decreased. Net rate again outpaced loss trends and we lowered our current accident year loss provision rate to 67.7%. As we adjusted our book in California, our geographic concentration in California remained high, but decreased to 58% of in-force premium and 54% of total polices.”
Dirks continued: “Our growth plans remain focused on attractive customer classes in and outside of California and, in the future, we expect our policy count to continue to increase at greater rates outside of California. As we enter new states, we will focus on risk selection: targeting specific customer classes and geographic locations. Our focus on technology will continue in 2015 as we further develop predictive analytics and begin the multi-year process to replace our core policy administration system.”
Terry Eleftheriou, Chief Financial Officer, commented: “You will note we are reporting additional metrics in this earnings release: operating income and operating return on equity. These metrics reflect multiple disciplines that are critical to creating sustainable shareholder value including risk selection, product pricing, claims management, medical cost and operating expense control, investment management, and the efficacy of capital and enterprise risk management. Our focus on these measures helps to better align the interests of management and shareholders.”
Second Quarter Dividend
The Board of Directors declared a second quarter 2015 dividend of six cents per share. The dividend is payable on May 27, 2015 to stockholders of record as of May 13, 2015.
The complete earnings release is available here: Employers Holdings Q1 2015 Earnings