Amerisafe AMSF Q1 2026 Earnings Transcript

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DATE

Thursday, April 23, 2026 at 10:30 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Janelle Frost
• [Executive, Finance/Underwriting] — Vincent [surname not provided]

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TAKEAWAYS

• Net Premiums Earned -- $75.1 million, representing an increase of 9% year over year.
• Gross Premiums Written -- $88.5 million versus $83.8 million in 2025, indicating 5.6% growth.
• Combined Ratio -- 93.2%, reflecting underwriting profitability amidst a competitive workers' compensation market.
• Retention Rate -- 92.4% for renewal policies in the quarter, supporting sustained premium growth.
• New and Renewal Voluntary Premium -- Increased by 8.2%, driven by investments in distribution effectiveness.
• In-Force Policy Count -- Rose by 1.7% quarterly and 9.5% since Q1 2025.
• Audit Premium and Related Adjustments -- $3.7 million, compared to $5 million in the prior-year period.
• Payroll Growth in Targeted Classes -- 4.5% for the quarter, with headcount change flat.
• Current Accident-Year Loss Ratio -- 72%, unchanged from the prior-year accident period at twelve months but up from 71% at 2025 year-end.
• Favorable Prior-Year Loss Development -- $7.6 million, equating to 10.1 points versus $8.7 million, or 12.7 points, in the prior-year quarter.
• Net Loss Ratio -- 61.9% within the quarter.
• Total Underwriting and Other Expenses -- $22.3 million, producing an expense ratio of 29.7% compared to 29.9% a year ago.
• Net Income -- $8.1 million or $0.43 per diluted share; operating net income was $9.5 million or $0.50 per diluted share.
• Net Investment Income -- $6.6 million, down 0.8%, attributed to lower average investable assets.
• Tax-Equivalent Yield -- 3.9%, up 7 basis points from 2025 due to higher yields on new investments.
• Investment Portfolio -- $774 million in cash and assets with an average AA- credit rating and a duration of 4.4 years; portfolio composition: 1% municipals, 24% corporate bonds, 3% U.S. Treasuries/agencies, 7% equities, 5% cash.
• Repurchases -- Approximately 120,000 shares bought back under the company's program at an average price of $33.60 per share, totaling $4 million; $12.9 million remains under authorization.
• Book Value Per Share -- $13.18 at quarter end.
• Dividend Ratio -- Reported at 0.9% compared to 1.8% in Q2 2025, with management noting results are "within our expectations."
• Held-to-Maturity Securities -- $7.9 million net unrealized loss position, which does not affect book value due to amortized cost accounting.
• Effective Tax Rate -- 19.8%, compared to 20.2% in the prior-year quarter.
• Liabilities Duration -- Between three and four years, cited as shorter due to the company’s high-touch claims settlement model.

SUMMARY

Management attributed continued premium growth to sustained execution of distribution and underwriting strategies across all industry classes and states. They reported that payroll increases, rather than headcount growth, remain the primary driver of premium gains, with wage growth at 4.5% for the period. The investment portfolio achieved higher new money yields, raising the tax-equivalent yield to 3.9%, as management maintained a conservative asset allocation. Buybacks were executed at an average price of $33.60 per share under the company’s share repurchase program, totaling $4 million. Management reiterated confidence in the sustainability of the premium growth rate, emphasizing that strategic initiatives remain effective in both competitive and soft market conditions.

• Janelle Frost said, "Medical inflation is real. We are living it. We are reserving properly for it," highlighting ongoing industry cost pressure.
• Vincent described ongoing mid-single-digit decreases in NCCI loss cost filings for 2026, with AMERISAFE’s five largest states seeing reductions from 1.2% to 9%.
• Management emphasized that premium and policy count growth was "prolific throughout the book of business" with no single industry or geography driving growth disproportionately.
• The portfolio’s 43% allocation to debt held to maturity is in a net unrealized loss position but does not affect reported book value, as clarified by management.
• The company’s average liability duration is lower than industry norms, attributable to its claims management approach, supporting prompt reserve settlement and shorter tail risk.

INDUSTRY GLOSSARY

• Combined Ratio: A measure of underwriting profitability calculated as the sum of loss and expense ratios; values under 100% indicate underwriting profit.
• NCCI Loss Cost: The benchmark rate for workers' compensation insurance pricing, filed by the National Council on Compensation Insurance based on expected losses and expenses.
• Accident-Year Loss Ratio: The ratio of losses incurred to earned premiums, measuring claims experience within policies incepted during a specific year.
• Held-to-Maturity Securities: Debt securities intended to be held until maturity, recorded at amortized cost, insulating book value from market price changes.

Full Conference Call Transcript

Janelle Frost: Thank you, Kathryn, and good afternoon. We are pleased with our solid start to 2026, marked by continued growth, disciplined execution, and attractive underwriting performance. During the quarter, we grew net premiums earned by 9%. We also delivered a combined ratio of 93.2% and produced operating earnings of $0.50 per share. These results reflect steady operating momentum amidst the competitive backdrop facing the workers' compensation industry. The workers' compensation market remains competitive and continues to operate in a prolonged soft pricing environment amid persistent industry headwinds such as claims severity and economic uncertainty. At the same time, workers' compensation remains the most consistently profitable line within the P&C industry, supported by long-term claim development and stable capital structures.

In this environment, sustained success depends on appropriately priced risk selection and deep industry experience. At AMERISAFE, Inc., our differentiated approach to servicing high-hazard industries continues to support consistent returns across the cycle. Our eighth consecutive quarter of premium growth, continued improvement in our expense ratio, and favorable prior-year loss development underscore the strength of our operating model and the dedication of our team. We believe these fundamentals position us well to navigate current market conditions while continuing to create long-term value for our shareholders. I will now turn the call over to Vincent to walk through the details of our growth and underwriting performance for the quarter.

Vincent: Thanks, Janelle. In 2026, gross premiums written were $88.5 million compared to $83.8 million in 2025, an increase of 5.6%. Retention for policies for which we offered renewal was 92.4% in the quarter, and pricing remained strong, helping offset continued downward pressure in filed loss costs. New business opportunities continue to grow despite steady competition. Together, new and renewal voluntary premium increased 8.2% in the quarter, reflecting ongoing investments in distribution effectiveness and recognition of our commitment to delivering outstanding safety and claim services to our policyholders. In-force policy count increased 1.7% in the quarter and 9.5% since Q1 2025. Audit premium and related adjustments remained positive, adding $3.7 million in the quarter compared to $5 million in 2025.

Net earned premiums were $75.1 million in the quarter, growing 9% year over year. While we do not usually comment on policyholder dividends, I do want to give some color since it was seemingly an outlier for this quarter. If you look at recent quarter history, you will see that there is some variability in this ratio quarter to quarter, albeit in a relatively small range. In last year's first quarter, the dividend ratio was 0.9%, while in the subsequent quarter, Q2 2025, it was 1.8%. We have not changed our policyholder dividend strategy or plans, and this first quarter result was within our expectations.

In the few states where we do offer policyholder dividends as a competitive tool, the ultimate outcome depends upon individual policyholder experience for policies in the quarter being evaluated. With recent policy count growth, it is not unexpected that more policyholders could qualify for dividends. Finally, an update on payroll growth. We continue to see positive wage growth in our targeted classes of business, coming in at 4.5% for the quarter, while headcount change was essentially flat. We believe continued payroll growth across our targeted industries indicates relatively healthy business activity despite ongoing economic uncertainty. Further, payroll growth, and in particular wage growth, can help offset ongoing pressure on rates, both from competition and filed loss costs.

That concludes the overview of premium results. I will hand the call back to Janelle for more information on claims, investments, and other financial metrics.

Janelle Frost: Thank you, Vincent. Next quarter, I will have the pleasure of passing the financial remarks off to Guillermo Ramos, our new CFO. Until then, bear with me one more time as I blend the financial results with other operational commentary. The current accident-year loss ratio was 72% for the quarter, compared to 72% for accident-year 2025 at twelve months, but 71% at year-end 2025. As we have discussed over the last two quarters, continued rate pressure and general high claim severity are creating modest upward pressure on the current accident year. That said, large-claim losses incurred can be lumpy.

We ended the first quarter of the current year with no claims with incurred value over $1 million compared to two in 2025. As for prior accident years, we had $7.6 million, or 10.1 points, of favorable development in the quarter compared to $8.7 million, or 12.7 points, in the prior-year quarter, resulting in a net loss ratio of 61.9% for the quarter. The impact of favorable prior-year development to the net loss ratio quarter over prior-year quarter is influenced by the growth in net premiums earned. To round out the combined ratio, total underwriting and other expenses were $22.3 million for the quarter, resulting in an expense ratio of 29.7%, compared to 29.9% a year ago.

This marks the third consecutive year-over-year improvement, reflecting disciplined expense management and continued operating leverage as our strategic growth initiatives drive growth in net premiums earned. During 2026, net income was $8.1 million, or $0.43 per diluted share, while operating net income was $9.5 million, or $0.50 per diluted share. This compares to net income of $8.9 million, or $0.47 per diluted share, and operating net income of $11.4 million, or $0.60 per diluted share, in 2025. The effective tax rate for the quarter was 19.8%, compared to 20.2% in the prior-year quarter. Turning to our investment portfolio, net investment income decreased 0.8% to $6.6 million due to lower average investable assets.

However, new money yields were favorable during the quarter, with the yield on new investments increasing 174 basis points in comparison to the portfolio roll-off, driving our tax-equivalent yield to 3.9%, or 7 basis points higher than 2025. The portfolio remains high quality, carrying an average AA- credit rating and a duration of 4.4 years. Asset allocation was largely unchanged, with the portfolio composition being 1% municipals, 24% corporate bonds, 3% U.S. Treasuries and agencies, 7% equities, and 5% cash. Approximately 43% of our portfolio is debt designated as held to maturity, carrying a net unrealized loss position of $7.9 million at quarter end.

As a reminder, these held-to-maturity securities are carried at amortized cost and therefore unrealized gains and losses on these securities are not reflected in our book value. Also during the quarter, we repurchased nearly 120 thousand shares of common stock under the company's share repurchase program at an average cost of $33.60 per share, for a total of $4 million. The remaining outstanding share repurchase authorization under the program as of March 31 is $12.9 million. Overall, our capital position is strong, supported by a high-quality balance sheet, solid reserve position, and prudent investment strategy. At quarter end, we held approximately $774 million in cash and assets. Finally, a couple other topics.

Book value per share at quarter end was $13.18, and we will file our 10-Q on Thursday, April 23, after market close. We will now open the call for questions.

Operator: Thank you.

Operator: If you are dialed in via the telephone and would like to ask a question, please press star 1. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, please press star 1 to ask a question. We will take our first question from Mark Hughes with Truist. Good afternoon.

Janelle Frost: Good afternoon, Mark.

Mark Hughes: Janelle, how did you see inflation in the quarter? It sounds like the medical inflation—claims inflation—sounds like the large claims were negligible. But any observations about any marginal changes?

Janelle Frost: No. No marginal changes from what we talked about at year-end, Mark. Medical inflation is real. We are living it. We are reserving properly for it. I still feel by what I said at year-end. I still feel fee schedules are doing their job and helping us contain cost. But I also think NCCI recognizing last year—this time last year—that medical inflation was up, or medical severity was up, 6%, was eye-opening to the industry. I think CEOs have been talking about it for a while. We are just a few weeks away from seeing what that number was for 2025, per NCCI, as well.

So I would expect that there is continued pressure on medical inflation industry-wide, not just with our severe claims.

Mark Hughes: Yeah. What do you think they will say? I guess our observation was it seemed like 2024 and 2025 were not starting off in as good a shape as some of the older accident years. Do you have any observations about what you have seen in the industry data?

Janelle Frost: Yeah. You know, that is a great point, Mark. I think when you look at even NCCI last year, their data had each accident-year combined ratio seeming to worsen, getting closer and closer to that 100% combined ratio for the industry. So I mean, I think industry-wide, we are seeing a deterioration in those results. And you are right: accident years 2024 and 2025 for the industry as a whole—there is definitely pressure there.

But when you are talking twelve years of declining rates, I think that is a natural progression, that there is going to be pressure there, even though frequency for the industry has continued to go down while medical inflation and the severity on claims have picked up in a declining rate environment. So I think there is going to be continued pressure for the industry on those accident-year combined ratios.

It will be very interesting to see on an accident-year basis what those projections are—reported versus projected—but also how much that affects the calendar year, like how much favorable development the industry has experienced from older accident years; to your point, those accident years 2022 and prior versus what is developing, or what emergence we have seen, out of 2024 and 2025.

Mark Hughes: How about NCCI loss cost? I think you have shared kind of the recent experience and some of the filings you have been getting. What does that trend look like?

Vincent: Hey, Mark, this is Vince. We are still looking at mid-single-digit decreases for the year. Most states have already put in their filings for 2026. Just to give you some sense of the range, in our five biggest states, they range from down almost 9% to down 1.2%, and everything in between, with a few outliers.

Mark Hughes: Understood. And then, Janelle, I do not know if you gave any specifics on payroll. I think you might have done that in the past—kind of payroll growth or headcount growth. Any statistics there you can share?

Vincent: I am going to jump in for Janelle. We are seeing payroll growth across all of our major classes, to varying degrees, but it is predominantly wage growth, as we mentioned in the prepared remarks. Headcount growth has been flat to slightly down. Different quarters, it varies quite a bit. But across all industries, payroll growth continues to be positive.

Mark Hughes: Understood. Okay. Thank you very much.

Operator: Thank you, Mark. We will take our next question from Analyst with Citizens JMP.

Analyst: Hi. This is David on for Matt. Just had one question. For the voluntary premium growth, are there any certain industries or areas of the market that are driving growth more than others right now?

Janelle Frost: No. I would say it has been pretty steady across our book of business, which is one of the things that we have actually been happy to see as we have had these strategic initiatives to grow policy count and to grow premium—that the changes that we have made have been serving us across industries and across states. In other words, we do not see pockets of what is working here and not working there. It has been pretty prolific throughout the book of business.

So even if you look at the 10-Ks last year, which was when our growth initiatives really started taking root in terms of the numbers we reported, if you look at the 10-Ks and the shift between industry groups or even the shifts among the states, there is really not a lot of change 2025 over 2024. And that held true in the first quarter as well.

Operator: Thank you. We will take our next question from Robert Farnam with Brienne Capital.

Robert Farnam: Hey there, good afternoon. I have one broad question and one specific question. The specific question: you talked about the duration of your assets—four years; it is a little over four years—so I just wanted to know, how does that compare to the duration of your liabilities?

Janelle Frost: Oh, great question. Our average duration on our liabilities is between three and four years.

Robert Farnam: Okay. That is kind of surprising. You know, people think a workers' comp writer would have a longer duration of claims. So is it—

Janelle Frost: I appreciate you asking. It is one of my favorite subjects. The way we handle claims is different than the industry. Our high-touch model involves our claims adjusters getting in quickly, establishing relationships, getting those reserves put up quickly, and then working with our injured workers, working with medical providers, and finding ways to close and settle these claims as quickly as we can—to the benefit of the injured worker, to the benefit of the policyholder, and ultimately to the benefit of AMERISAFE, Inc. That helps shorten our duration on these severe claims.

We know that we are lower than the average bear, as they say in the industry, but that is part of our operating model, and that is how we manage claims.

Robert Farnam: Cool. Alright. And the broader one: I have been covering workers' comp for quite a while—you obviously have as well—and I would have said maybe five or six years ago I thought that frequency would have bottomed. Here we keep going; we are like, alright, it ticked down again, ticked down again—when is this going to end? What do you think is driving it? You can only do so much safety and risk services, things like that, and I just do not know where it is at bottom.

Janelle Frost: I would agree with you, Bob. It depends, to a degree, on how you are measuring frequency—per million dollars of payroll or per million dollars of premium—but either way you look at it right now, it is still on the decline. A couple of things factor into that. Is the workplace safer? Absolutely. I think the mix of jobs that we have—the fact that our economy is shifting more towards services—also impacts overall frequency. Because again, you are talking broadly, not just what AMERISAFE, Inc. writes. If you are looking at really long-term trends, our economy has shifted more from manufacturing and those types of jobs to more service-related jobs. So that is contributing somewhat to the frequency.

But I happen to agree with you: if you would have asked me three or four years ago—even for the industry, not even talking about AMERISAFE, Inc. specifically—I would have said, well, it has got to reach a minimum at some point. People are going to have accidents; we are all human. But yet, whether you measure it on payroll or premium, as of now, it is down.

Robert Farnam: I just remembered you talking about it a long time ago and saying, yeah, frequency cannot drop down to zero, so it has got to end at some point. But man, you keep surprising us quarter after quarter.

Janelle Frost: I appreciate when people remember when I am wrong. You are right.

Robert Farnam: Alright. That is it for me. Thanks for your comments.

Janelle Frost: Thanks, Bob.

Operator: We will take our next question from Mark Hughes with Truist.

Mark Hughes: Janelle, you all have been doing very well on the top-line growth. If you touched on this earlier in the call, forgive me. I think I have asked before about how sustainable this is—whether some initiatives you put in place have potentially run their course, or whether there is always something new and you continue to bear fruit with your distribution strategies. I am curious about what is keeping the momentum going forward.

Janelle Frost: Let me start with the team here at AMERISAFE, Inc. They are executing. I have talked about this before—three years ago, probably at this point, maybe longer—we started putting together this growth strategy and how we wanted to be very thoughtful and very measured about it. The team here is just executing. To the earlier question, the fact that it has been prolific across our industry classes and across our states, I totally believe it is sustainable. Is it linear? No. But we are shooting for that mid-single-digit range, and we have been hitting that.

Kudos to the AMERISAFE, Inc. employees for really executing and taking this idea of adding small incremental growth, not changing our risk profile, sticking to our knitting, being who we want to be, and executing on that. I truly believe that is sustainable. Momentum is there, the attitude is there, and the strategy is there.

Mark Hughes: And this is a trivial question, but why did you move the call to the afternoon?

Janelle Frost: Great question. Actually, scheduling conflict. Thank you for asking. I apologize if it is inconvenient.

Mark Hughes: Okay. So next time, it will be 10:30 again?

Janelle Frost: Yes. We will go back to our normal schedule.

Mark Hughes: Very good. Thank you.

Janelle Frost: You are welcome.

Operator: Thank you. This concludes today's question and answer session. I would now like to turn the call back to Janelle Frost for closing comments.

Janelle Frost: Thoughtful and measured growth with pricing adequacy continues to be the anchor for our performance, even amidst the competitive pressures of the workers' compensation market. Our results this quarter reflect the strength of these fundamentals, supported by a strong balance sheet that positions AMERISAFE, Inc. well across the market. We remain confident in our strategy and committed to delivering sustainable underwriting profitability and long-term shareholder value. Thank you for joining us today.

Operator: This does conclude today's call. Thank you for your participation.

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