DeRidder, LA – AMERISAFE, Inc. (Nasdaq:AMSF), a specialty provider of hazardous workers’ compensation insurance, recently announced results for the first quarter ended March 31, 2017.
G. Janelle Frost, President and Chief Executive Officer, said, “We are pleased with our financial results this quarter. Reporting a combined ratio of 86.6% speaks to AMERISAFE’s focus on underwriting discipline, controlled costs, and extensive claims management. These results were accomplished as loss costs continued to decline, and competition continued to increase as the market further softened while insurers fought to retain accounts. AMERISAFE has responded appropriately to the changing market with gradual price declines coupled with superior service to retain profitable accounts and grow policy count.”
Gross premiums written in the quarter decreased by $5.3 million, or 5.3%, primarily due to $4.4 million in lower payroll audits and slightly lower voluntary premiums written. Payroll audits and related premium adjustments increased premiums written by $2.2 million in the first quarter of 2017, compared to $6.6 million in the first quarter of 2016.
Voluntary premium for policies written during the quarter ended March 31, 2017 declined by 0.6% compared with the first quarter of 2016.
The current accident year loss ratio for the first quarter was 69.0%, an increase of 1.1 percentage points from 67.9% in 2016. During the quarter, the Company experienced favorable loss development for prior accident years which reduced loss and loss adjustment expenses by $6.5 million, mostly attributable to accident years 2014 and 2013. These results reflect improved trends for both claims closing and severity of claims and by favorable case reserve development on claims that were closed during the quarter.
For the quarter ended March 31, 2017, the underwriting expense ratio was 23.3% compared to 21.0% in the same quarter in 2016. The increase in the quarter was due to lower net premiums earned as well as slightly higher compensation, insurance assessment and premium tax expense compared with last year’s first quarter.
The effective tax rate for the quarter ended March 31, 2017 was 27.8% compared with 29.5% for the first quarter of 2016. The decrease in the tax rate resulted from a lower proportion of underwriting income to tax-exempt income relative to the first quarter of 2016.
Net investment income for the quarter ending March 31, 2017, increased 11.0% to $6.7 million from $6.0 million in the first quarter of 2016, largely due to a significant decline in value of an investment in a limited partnership hedge fund in last year’s first quarter. The change in value in this investment is recorded in investment income each quarter.
As of March 31, 2017, the carrying value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was $1.1 billion.
The company paid a regular quarterly cash dividend of $0.20 per share on March 24, 2017. The $0.20 per share cash dividend reflects an 11% increase from the regular quarterly cash dividend of $0.18 paid in 2016. On April 25, 2017 the Company’s Board of Directors declared a quarterly cash dividend of $0.20 per share, payable on June 23, 2017 to shareholders of record as of June 9, 2017.
Book value per share at March 31, 2017 was $24.29, an increase of 2.4% from $23.72 as of December 31, 2016. During the quarter, no shares were repurchased under the Company’s share repurchase plan.
The complete results release is available here: AMERISAFE 2017 First Quarter Results