DeRidder, LA – AMERISAFE, Inc. (Nasdaq:AMSF), a specialty provider of hazardous workers’ compensation insurance, recently announced results for the second quarter ended June 30, 2016.
G. Janelle Frost, President and Chief Executive Officer, said, “The workers’ compensation market is increasingly competitive. Our industry was profitable in 2015 which has spurred interest for companies which previously de-emphasized workers’ compensation. AMERISAFE remains unwavering both in our disciplined underwriting focus on our market niche and in producing consistent, superior results. This quarter’s combined ratio of 80.4% is a result of that commitment.”
- Gross premiums written in the quarter decreased by $2.8 million, or 2.6% due to lower payroll audits of $3.0 million, offset in part by positive premium growth for voluntary policies. Payroll audits and related premium adjustments increased premiums written by $1.5 million in the second quarter of 2016, compared with $4.5 million in the second quarter of 2015.
- Voluntary premium for policies written during the quarter ended June 30, 2016 increased 1.1% compared with the second quarter of 2015.
- The current accident year loss ratio for the second quarter was 67.9%, a decrease of 1.9 percentage points from 69.8% in the second quarter of 2015. During the quarter, the Company experienced favorable loss development for prior accident years which reduced loss and loss adjustment expenses by $12.4 million, mostly attributable to accident years 2014, 2013 and accident years 2009 and prior. These results reflect improved trends for both closing claims and claims severity and were driven by favorable case reserve development on claims that were closed during the quarter.
- For the quarter ended June 30, 2016, the underwriting expense ratio was 24.9% compared to 23.1% in the same quarter in 2015. The increase in the quarter was due to lower earned premiums as well as higher bad debt and compensation expense compared with last year’s second quarter.
- The effective tax rate for the quarter ended June 30, 2016 was 32.4% compared with 28.8% for the second quarter of 2015. The increase in the tax rate resulted from a higher proportion of underwriting income to tax-exempt income relative to the second quarter of 2015.
Net investment income for the quarter ending June 30, 2016, declined 10.0% to $6.2 million from $6.9 million in the second quarter of 2015, largely due to the decline in value of an investment in a limited partnership hedge fund where the change in value is recorded in investment income each quarter.
As of June 30, 2016, the carrying and fair value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was $1.2 billion.
The company paid a regular quarterly cash dividend of $0.18 per share on June 24, 2016. On July 26, 2016 the Company’s Board of Directors declared a quarterly cash dividend of $0.18 per share, payable on September 23, 2016 to shareholders of record as of September 9, 2016.
During the quarter, no shares were repurchased under the Company’s share repurchase plan.
The complete results release is available here: AMERISAFE 2016 Second Quarter Results