Employers (EIG) Q4 2025 Earnings Call Transcript

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• Once lawyers get involved in CT claims, they keep piling in and the trend continues

  80% confidence

• Acceleration of CT claim frequency seen in 2024-early 2025 has flattened and slowed down

  80% confidence

• Full actuarial assessment concluded no additional reserve strengthening or adjustments to current accident year loss and LAE ratio was necessary

  80% confidence

• Expect expense ratio to continue to decline with wide deployment of AI

  80% confidence

• Using AI to develop excess workers' comp product resulted in launch months earlier than initially expected

  80% confidence

• Elevated cumulative trauma claims remain a California-specific issue; claim frequency in other states and non-CT claims in California continues to trend favorably

  80% confidence

• California market is hardening; environment across rest of country is still fairly competitive

  80% confidence

• Investment rebalancing increased overall portfolio yield by net 40 basis points and extracted estimated NPV gain of $16M

  80% confidence

• Target for excess workers' comp to represent 10% of total written premium within 4-7 years

  80% confidence

• New excess workers' compensation product will perform in mid-80s combined ratio

  80% confidence

• California pricing and underwriting actions will strengthen underwriting profitability but are likely to reduce written premium in 2026

  80% confidence

• Average Q4 2025 share repurchase price of $40.94 represented 20% discount to book value per share

  80% confidence

• Gross premiums written decreased 11% to $156.8M in Q4 2025 from $176.3M in prior year, primarily due to decrease in new business writings and lower final audit premiums

  80% confidence

• Independent actuarial firm concluded carried reserves were well within range of reasonable estimates

  80% confidence

• At current price levels, EIG stock is meaningfully undervalued and share repurchases produce significant return on investment

  80% confidence

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