DeRidder, LA – AMERISAFE, Inc. (Nasdaq: AMSF), a specialty provider of workers’ compensation insurance focused on high hazard industries, recently announced results for the third quarter ended September 30, 2022.
G. Janelle Frost, President and Chief Executive Officer, noted, “Operating earnings for the quarter were strong, further enhanced by insureds’ payroll growth increasing premium and favorable loss development. In this highly competitive market, we are focused on the difference AMERISAFE makes for our agents, policyholders and injured workers.”
Gross written premiums in the quarter were higher by $1.0 million, or 1.5%, compared with the third quarter of 2021. Voluntary premiums were lower by 5.6% compared to the third quarter of 2021.
Payroll audits and related premium adjustments were $5.5 million higher than the third quarter of 2021. Audits and other adjustments increased premiums written by $3.4 million in the third quarter of 2022, compared to a decrease in premiums written of $2.1 million in the third quarter of 2021. The increase was due to payroll audits occurring on policy years in which payrolls were less affected by the COVID-19 pandemic.
The current accident year loss ratio for the third quarter was 71.0%, one point lower than the 72.0% ratio initially set for accident year 2021. During the quarter, the Company experienced favorable net loss development for prior accident years, which reduced loss and loss adjustment expenses by $10.4 million, primarily from accident years 2020 through 2017.
For the quarter ended September 30, 2022, the underwriting expense ratio was 28.9% compared with 26.5% in the same quarter in 2021. The increase was primarily due to a contingent profit sharing commission benefit in last year’s third quarter.
The effective tax rate for the quarter ended September 30, 2022 was 15.5%, lower than 22.6% in the third quarter of 2021 due to a higher proportion of income from tax-exempt investments.
Net investment income for the quarter ended September 30, 2022, increased 15.4% to $7.0 million from $6.0 million in the third quarter of 2021, due to higher yields on fixed income securities.
Due to increases in interest rates, the market value of our bond portfolio declined during the quarter.
Due to declines in the equity markets, the market value of the equity securities in our investment portfolio decreased by $4.1 million during the quarter, compared to a decrease of $0.8 million in the third quarter of 2021. These changes in market value are reflected in net income.
As of September 30, 2022, the carrying value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was $1.0 billion.
In an accompanying news release, the Company announced a special cash dividend of $4.00 per share, payable on December 16, 2022, to shareholders of record as of December 2, 2022.
During the third quarter of 2022, the Company paid a regular quarterly cash dividend of $0.31 per share on September 23, 2022. On October 25, 2022 the Board of Directors also declared a quarterly cash dividend of $0.31 per share, payable December 16, 2022 to shareholders of record as of December 2, 2022.
During the third quarter of 2022, the Company repurchased 139,559 shares at an average cost (including commissions) of $46.83 per share for a total of $6.5 million. The remaining outstanding share repurchase authorization as of September 30, 2022 is $12.8 million.
Book value per share at September 30, 2022 was $19.47, a decrease of 5.6% from $20.62 at December 31, 2021.
The complete results release is available here: AMERISAFE 2022 Third Quarter Results