DeRidder, LA – AMERISAFE, Inc. (Nasdaq: AMSF) recently announced results for the second quarter ended June 30, 2020.
G. Janelle Frost, President and Chief Executive Officer, observed, “AMERISAFE’s fundamentals are crucial in these unprecedented times. We are serving our stakeholders with disciplined underwriting, proactive safety and intensive claims management, which produce consistent returns, quality insurance services and financial stability. This quarter those fundamentals led to favorable prior year case development and a combined ratio of 78.5%. Over time, those fundamentals have led to twelve consecutive years as one of Ward’s Top 50 P&C companies. We are honored by the recognition and encouraged to continue seeking excellence for our stakeholders.”
Gross premiums written in the second quarter of 2020 decreased by $6.7 million, or 7.7%, primarily due to lower voluntary premiums on policies written in the quarter which were 6.4% lower as compared to the second quarter of 2019.
Payroll audits and related premium adjustments increased premiums written by $0.5 million in the second quarter of 2020, compared to an increase in premiums written of $1.8 million in the second quarter of 2019. The amount this quarter included a $1.4 million reduction in anticipated future audit premiums.
The current accident year loss ratio for the second quarter was 72.5%, unchanged from the first quarter of 2020, and unchanged from accident year 2019. During the quarter, the Company experienced favorable case reserve development for prior accident years, which reduced loss and loss adjustment expenses by $17.5 million, attributed primarily to accident years 2015 through 2018.
For the quarter ended June 30, 2020, the underwriting expense ratio was 27.8% compared with 23.8% in the same quarter in 2019. The increase in the expense ratio was due to lower earned premium and higher expenses. Last year’s second quarter included $1.0 million in favorable lower estimates of variable share price based incentive compensation costs and $0.6 million in favorable lower insurance assessment costs.
The effective tax rate for the quarter ended June 30, 2020 was 18.5%, compared with 19.3% for the second quarter of 2019. The decrease is due to a higher level of tax-exempt interest income in 2020 compared to 2019.
The complete release is available here: AMERISAFE Second Quarter 2020 Results