DeRidder, LA – AMERISAFE, Inc. (Nasdaq: AMSF) recently announced results for the second quarter ended June 30, 2023.
G. Janelle Frost, President and Chief Executive Officer commented, “AMERISAFE’s results in the second quarter reflect the Company’s disciplined approach to the high-hazard workers’ compensation market. Continued competition and rate decreases impacted top-line growth, while the combined ratio of 85.4% and annualized ROE of 18.6% remain industry-leading. Our long tenure, coupled with underwriting expertise and strong balance sheet position AMERISAFE for solid performance and long-term shareholder value creation.”
Voluntary premiums on policies written in the quarter were 2.3% lower than the second quarter of 2022, primarily due to continued declines in approved loss costs in the states in which we write business. The average decline in approved loss costs for the second quarter of 2023 versus the second quarter of 2022 was approximately 7.5%.
Payroll audits increased $0.2 million for the second quarter of 2023 as compared to the second quarter of 2022, offset by $1.0 million in related premium adjustments, which includes endorsements, cancellations, earned-but-unbilled and certain regulatory accruals.
Ceded premiums increased $1.2 million in the second quarter of 2023 as compared to the second quarter of 2022 as we purchased higher levels of reinsurance coverage at generally higher prices in 2023.
The loss ratio for the second quarter was 54.3%, compared to 57.4% in the second quarter of 2022. During the quarter, the Company experienced favorable net loss reserve development for prior accident years, which reduced loss and loss adjustment expenses by $10.9 million, primarily from accident years 2018 through 2021.
For the quarter ended June 30, 2023, the underwriting expense ratio was 30.4% compared with 28.3% in the same quarter in 2022. However, expense dollars were flat for the second quarter of 2023 as compared to the second quarter of 2022, with the increased expense ratio this quarter driven by the decline in earned premiums.
The effective tax rate for the quarter ended June 30, 2023, was 20.1% compared with 13.9% for 2022. The rate was higher than last year due to a decrease in the proportion of tax-exempt interest income relative to underwriting profit.
Net investment income for the quarter ended June 30, 2023, increased 19.1% to $7.7 million from $6.5 million in the second quarter of 2022, due to higher yields on cash and fixed-income securities.
Net unrealized gains on equity securities were $2.0 million in the second quarter as a result of generally favorable equity market returns during the quarter.
As of June 30, 2023, the carrying value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was $962.7 million.
The complete results release is available here: AMERISAFE 2023 Second Quarter Results