This Insurance Stock Is Down 10% in a Year but Still Drew a New $3 Million Bet From One Fund

On January 22, Azarias Capital Management, L.P. disclosed a new position in Employers Holdings (NYSE:EIG), acquiring 69,108 shares in an estimated $2.98 million transaction based on quarterly average pricing.

What happened

According to its SEC filing dated January 22, Azarias Capital Management established a new position in Employers Holdings, acquiring 69,108 shares. The quarter-end position was valued at $2.98 million.

What else to know

This was a new position for the fund and accounted for 1.31% of 13F reportable AUM as of December 31.

Top five holdings after this filing:

• NYSEMKT: SPY: $72.60 million (31.8% of AUM)
• NYSEMKT: URG: $19.39 million (8.5% of AUM)
• NASDAQ: EU: $10.25 million (4.5% of AUM)
• NYSE: NXE: $9.93 million (4.3% of AUM)
• NYSE: MAN: $8.62 million (3.8% of AUM)

As of January 22, EIG shares were priced at $44.21, down 10% over the prior year and far underperforming the S&P 500’s roughly 14% gain in the same period.

Company overview

Company snapshot

• Employers Holdings offers workers' compensation insurance primarily to small businesses in low to medium hazard industries across the United States.
• The company generates revenue through insurance premiums, leveraging a network of independent agents, brokers, and alternative distribution channels.
• It targets small business owners seeking specialized coverage and risk management solutions in the commercial property and casualty insurance market.

Employers Holdings is a specialty insurer focused on workers' compensation for small businesses, with a national footprint and a disciplined underwriting approach. The company differentiates itself through deep expertise in low to medium hazard industries and a multi-channel distribution strategy. Its scale and focus enable it to serve a broad client base while maintaining risk-adjusted profitability.

What this transaction means for investors

Employers Holdings just exited a volatile quarter marked by reserve strengthening and a sharp spike in its combined ratio, which climbed to 129.7% in the third quarter as loss trends worsened in California. The company reported an $8.3 million net loss, or $0.36 per share, even as net premiums earned rose 3% to $192.1 million and policies in force hit a record high. Management responded decisively, concluding an off-cycle reserve review, tightening underwriting, and approving a $125 million debt-funded recapitalization alongside an expanded $250 million share repurchase authorization. It also maintained its quarterly dividend at $0.32 per share.

At roughly $44 per share, the stock sits well below its adjusted book value of $51.31, even after absorbing conservative reserve actions. Against a portfolio dominated by broad equity exposure through SPY and selective uranium names, this position stands out as a contrarian insurance bet rather than a defensive filler.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.