Reno, NV – Employers Holdings, Inc. (NYSE:EIG) recently reported financial results for its fourth quarter and year ended December 31, 2020.
- Record number of ending policies in-force (103,506), up 5% year-over-year;
- Net income of $119.8 million, or $3.97 per diluted share;
- Adjusted net income of $93.5 million, or $3.10 per diluted share;
- Net investment income of $76.3 million, down 13% year-over-year;
- Net realized and unrealized gains on investments recorded through the income statement of $19.0 million;
- Net premiums earned of $615.3 million, down 12% year-over-year;
- Favorable prior year loss reserve development of $81.6 million, versus $77.5 million a year ago;
- The Company repurchased 3,020,016 shares of its common stock at an average price of $33.05 per share;
- Book value per share including the Deferred Gain of $46.85, up 15.2% year-over-year including dividends declared.
Fourth Quarter 2020 Highlights
- Net income of $64.0 million, or $2.19 per diluted share;
- Adjusted net income of $42.8 million, or $1.46 per diluted share;
- Net investment income of $18.0 million, down 20% year-over-year;
- Net realized and unrealized gains on investments recorded through the income statement of $21.3 million;
- Net premiums earned of $151.5 million, down 11% year-over-year;
- Favorable prior year loss reserve development of $39.7 million, versus $11.4 million a year ago;
- The Company repurchased 529,146 shares of its common stock at an average price of $32.50 per share.
Chief Executive Officer Douglas Dirks commented on the results: “2020 was a truly remarkable year for Employers in that: (i) we closed the year with nearly 104,000 policies, the first time we have ever reached that goal; (ii) our stockholders’ equity and book value per share each grew to record levels; (iii) we generated more submissions, quotes, and binds than at any time in the history of the Company; and (iv) we accomplished these feats during a pandemic while working from home. For the year, we delivered a 7.6% return on adjusted equity and increased our book value per share including the deferred gain by 15.2%, each representing terrific results in any operating environment.
“Our record number of ending policies in-force demonstrates that our policyholders are enduring the pandemic, albeit with lower payroll levels. We remain optimistic that, as more vaccines are delivered and state restrictions are lifted, we will be able to replace the premium we have lost in 2020. In support of this anticipated recovery, we have continued to pursue and advance the significant investments we have made in delivering a superior customer experience for our agents and insureds and have actively managed our underwriting expenses with a view towards achieving our targeted expense ratios, despite the meaningful reductions in earned premium we are currently experiencing.
“We expected to incur a lower current accident year loss and LAE ratio in 2020 than we experienced in 2019. Nonetheless, through the first three quarters of 2020, we maintained our loss ratio at our 2019 level (65.5%) in recognition of the uncertainty brought by the pandemic in terms of expected premium levels, the extent and duration of regulatory actions and overall claims frequency and severity. During the fourth quarter, in response to consistently favorable indemnity claims frequency trends experienced throughout the year, we reduced our 2020 accident year loss and LAE ratio to 64.3%.”
Mr. Dirks continued, “It has been my pleasure to lead Employers for over 27 years, and I feel that the Company is in the strongest financial position in its history. I will soon be handing control of the Company over to our next CEO, Kathy Antonello, whose background and experience is ideal to move Employers forward into the future. The executive team and I have been working very closely with Kathy over the past few months to ensure a smooth transition and you will hear from her tomorrow as she leads our earnings call. I am very excited for Kathy and for the future of our Company.”
The complete results release is available here: Employers Holdings, Inc. Q4 2020 and Year End Financial Results