Employers Earnings Rose as Buybacks Lifted Per-Share Results
Net premiums earned fell 12% to $174.1 million as the insurer shifted toward smaller businesses.[1][2][16][17]
Employers Holdings (EIG), the workers’ compensation insurer, reported a 29% increase in diluted earnings to $1.59 a share despite a 2% decline in net income.
The quarter extended a contraction in the company’s premium base even as underwriting performance improved sequentially. Policies in force fell 5% from a year earlier to 127,601, while the steeper premium decline reflected Employers’ shift toward smaller businesses.
Net premiums earned declined from a year earlier and the pace of contraction accelerated from 1% in the first quarter. Net income slipped to $29.1 million, while adjusted net income rose 11% to $12.8 million and adjusted diluted earnings increased 46% to $0.70 a share.
Gross premiums written fell 19.6% to $163.4 million and declined 9.6% from the first quarter. The year-over-year contraction deepened from 14.8% in the previous period, underscoring the pressure from fewer policies and lower average premiums.
The combined ratio improved sequentially to 105.8% from 107.1%, though it remained slightly above the prior-year level. The loss and loss-adjustment-expense ratio improved to 70.2%, while the underwriting expense ratio worsened to 22.8% as the smaller earned-premium base outweighed a 7.9% reduction in underwriting expenses.
Investment results provided a lift, with realized and unrealized gains of $18.7 million compared with a $1.7 million loss in the first quarter. Net investment income rose 1.1% from a year earlier to $27.4 million, and the portfolio book yield reached 4.9% following the company’s 2025 rebalancing.
Employers returned $34.0 million to shareholders through repurchases and dividends, down from $83.0 million in the first quarter. Average diluted shares outstanding fell to 18.3 million from 24.1 million a year earlier, amplifying per-share earnings growth, while adjusted book value increased 5.6% to $53.26 a share.
The company began writing excess workers’ compensation policies in June, moving the product into active production. The expansion came as Employers managed a shrinking core premium base and higher financing costs following its issuance of $125 million of senior debt.