2022
ANNUAL REPORT
Employers Holdings, Inc.
employers.com
TO OUR STOCKHOLDERS
April 13, 2023
Company Summary
Employers Holdings, Inc., is the only mono-line workers' compensation insurance provider with a national footprint. Our deep expertise in the workers' compensation product line sets us apart from our competition and allows us to identify and respond quickly and effectively to changing market conditions that are unique to this line of business. We serve our customers wherever and whenever they want to purchase workers' compensation by supporting multiple distribution channels. Traditional independent agents, payroll providers, aggregators, digital agents, partner insurance companies and affinity groups can access our product via our online portal or by utilizing our best-in-class API. In addition, small businesses seeking an online experience can purchase through Cerity, our direct-to-consumer digital company. While we focus on small businesses with low-to-medium hazard operations, we also support specialty markets with unique opportunities for profit and growth. We utilize our extensive historical database and advanced analytics to provide competitive pricing to small businesses and produce superior claims outcomes for injured workers. Throughout the customer journey, we strive to be the workers' compensation carrier known for providing ease every step of the way.
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2022 EMPLOYERS ANNUAL REPORT |
-i- |
2022 Overview
2022 was a terrific year for EMPLOYERS. We experienced strong revenue growth driven by sharp increases in both premium writings and net investment income.
Our key accomplishments in 2022, included the following:
- Our ending policies in-force were 121,356, the highest in our history;
- Our EMPLOYERS segment achieved a combined ratio of 94.1%;
- We wrote $707 million of net written premium, higher than any other year since 2018 and the third highest since our Initial Public Offering (IPO) in 2007;
- Cerity wrote $7 million of net written premium, an increase of 363%;
- Our consolidated underwriting and general & administrative expense ratio was 24.7%, far lower than any other year since 2018;
- Our investment portfolio generated net investment income of $89.8 million, higher than any other year since 2009 and the second highest since our IPO in 2007;
- Our adjusted net income and adjusted net income per share increased by 19% and 24%, respectively, versus that of a year ago; and
- We returned more than $120 million to stockholders through a combination of share repurchases, regular quarterly dividends and two special dividends.
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-ii- |
2022 EMPLOYERS ANNUAL REPORT |
Financial Highlights1
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($ in millions, except share and per share amounts) |
Year Ended December 31, |
||
|
2022 |
2021 |
CHANGE |
|
|
Net insurance premiums written |
$707.2 |
$583.1 |
21% |
|
Net insurance premiums earned |
$675.2 |
$574.4 |
18% |
Net investment income
$89.8
$72.7
24%
|
Net income |
$48.4 |
$119.3 |
(59)% |
|
Net income per diluted share |
$1.75 |
$4.17 |
(58)% |
|
Adjusted net income |
$81.0 |
$67.9 |
|
Adjusted net income per diluted share |
$2.93 |
$2.37 |
19%
24%
Adjusted return on equity
6.6%
5.5%
1.1 pts
Cash dividends declared and paid per share
$3.28
$1.00
228%
|
Ending Adjusted Stockholders' Equity |
$1,189.2 |
$1,266.9 |
(6)% |
|
Ending common shares outstanding |
27,168,748 sh |
27,741,400 sh |
(580,652) sh |
1 A Glossary of Financial Measures and reconciliation tables of GAAP to non-GAAP measures follow this letter.
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2022 EMPLOYERS ANNUAL REPORT |
-iii- |
Underwriting Activities
Our net premiums written were up 21% in 2022 versus those of a year ago. This growth resulted from a 16% increase in new business, an 8% increase in renewal business and notable audit premium recognition. The increase in new business resulted in part from our continued appetite expansion efforts and we increased our final audit premium accruals by $24.6 million and recognized $34.8 million of audit premium pick-up, as our payroll exposure increased with U.S. labor market strengthening and rising wages.
We continued our underwriting discipline and maintained our current accident year loss and loss adjustment expense ratio on voluntary business at 64.0%, largely consistent with the 63.5% we recorded throughout 2021. In addition, we recognized $34 million of favorable development on our loss and loss adjustment expense reserves for prior accident years, which primarily related to accident years 2017 and prior.
Our consolidated underwriting and general and administrative expense ratio was 24.7% in 2022 versus 27.9% a year ago. The improvement in our underwriting expense ratio was primarily the result of higher earned premiums and prudent fixed expense management.
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Disclaimer
Employers Holdings Inc. published this content on 13 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 April 2023 23:30:14 UTC.
