Shares of Employers Holdings, Inc. EIG have gained 4.3% since it reported fourth-quarter 2024 results on Feb. 20, 2025. The quarterly results benefited on the back of a record number of policies in force and improved investment yields. However, the upside was partly offset by a slight decline in gross and net premiums written as well as an elevated expense level that pressured profitability.
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EIG reported fourth-quarter adjusted earnings per share (EPS) of $1.15, which beat the Zacks Consensus Estimate by 6.5%. However, the bottom line dropped 17.9% year over year.
Operating revenues were $217 million, which slid 4% year over year. The top line missed the consensus mark by 2.1%.
Employers Holdings, Inc. Price, Consensus and EPS Surprise
Employers Holdings Inc Price, Consensus and EPS Surprise
Employers Holdings, Inc. price-consensus-eps-surprise-chart | Employers Holdings, Inc. Quote
EIG’s Q4 Key Updates
Gross premiums written dipped 1% year over year to $176.3 million due to a decline in final audit premiums and endorsements. Net premiums written of $174.7 million slipped 1% year over year.
Nevertheless, net premiums earned inched up 1% year over year to $190.2 million but fell short of the Zacks Consensus Estimate of $193.5 million.
Net investment income of $26.7 million grew 2% year over year on the back of improved investment yields. However, the metric lagged the consensus mark of $27.6 million.
Total expenses increased 8.6% year over year to $181.9 million. Losses and loss adjustment expenses escalated 22% year over year due to improved earned premium, reduced net favorable prior year loss reserve development and a moderately higher current accident year loss and loss adjustment expense provision. Commission expenses declined 7.2% year over year.
EIG posted a pre-tax income of $34.7 million, which plunged 40.4% year over year.
Policies in force were at a record level of 130,767 at the fourth-quarter end. The figure increased 3.4% year over year.
The GAAP combined ratio was 95.5% during the quarter, which deteriorated 740 basis points (bps) year over year but came lower than the Zacks Consensus Estimate of 96.3%. Underwriting and general and administrative expense ratio improved 140 bps year over year to 23.2%.
EIG’s Financial Update (as of Dec. 31, 2024)
Employers Holdings exited the fourth quarter with investments, cash and cash equivalents of $2.5 billion, which inched up 1.1% from the 2023-end level.
Total assets of $3.5 billion dipped 0.3% from the figure at 2023-end.
Total stockholders’ equity of $1.1 billion rose 5.4% from the 2023-end level.
Adjusted book value per share was $50.71 at the quarter-end, which increased 7% year over year.
Employers Holdings’ Capital Deployment Update
Employers Holdings bought back shares worth $41.7 million in 2024. It had a leftover capacity of $18.7 million under its repurchase authorization. The company also paid out dividends worth $30 million in 2024.
Management announced a quarterly dividend of 30 cents per share for the first quarter of 2025, which will be paid on March 19, 2025, to shareholders as of March 5.
EIG’s Full-Year Update
EIG’s adjusted EPS slipped 2.6% year over year to $3.73 in 2024. Total revenues of $880.7 million grew 3.5% year over year.
Gross premiums written inched up 1.1% year over year to $776.3 million. Net premiums written were $769.5 million, up 1% year over year.
Net premiums earned advanced 4% year over year to $749.5 million. Net investment income of $107 million remained relatively flat year over year in 2024.
Adjusted net income declined 8% year over year to $94 million.
The combined ratio of 97.9% deteriorated 290 bps year over year.
EIG’s Zacks Rank
Employers Holdings currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported fourth-quarter 2024 results so far, the bottom-line results of Palomar Holdings, Inc. PLMR, American International Group, Inc. AIG and AXIS Capital Holdings Limited AXS beat the respective Zacks Consensus Estimate.
Palomar Holdings reported fourth-quarter 2024 operating income of $1.52 per share, which beat the Zacks Consensus Estimate by 22.6%. The bottom line increased 36.9% year over year. Total revenues improved 53.9% year over year to $157 million. The top line beat the consensus estimate by 6.6%. Gross written premiums increased 23.3% year over year to $373.7 million. Net earned premiums increased 54.6% year over year to $135.6 million. Net investment income increased 61.3% year over year to $11.3 million.
Palomar recorded an adjusted underwriting income of $41 million, which increased 39.9% from the year-ago quarter. Underwriting income was $34.9 million, up 44.2% year over year. The loss ratio was 25.7%, which deteriorated 660 bps year over year. Adjusted combined ratio, excluding catastrophe losses, deteriorated 290 bps year over year to 71.7.
American International Group reported fourth-quarter 2024 adjusted EPS of $1.30, which beat the Zacks Consensus Estimate by 3.2%. The bottom line improved 1.6% year over year. Adjusted operating revenues amounted to $6.85 billion, which declined significantly year over year. However, the top line beat the consensus mark by 1.3%. Premiums of $6 billion declined 1% year over year in the quarter. Total net investment income increased 44.4% year over year to $1.3 billion.
The North America Commercial segment recorded net premiums written of $2.2 billion, which rose 5% year over year on a reported basis and 9% on a comparable basis. Underwriting income of $25 million declined 92% on a reported basis. The combined ratio of 98.8% deteriorated 1,370 bps year over year. The International Commercial unit recorded net premiums written of $2.1 billion, which rose 9% year over year on a reported basis and 7% on a comparable basis.
AXIS Capital posted fourth-quarter 2024 operating income of $2.97 per share, which beat the Zacks Consensus Estimate by 10.8%. The bottom line increased 1% year over year. Total operating revenues of $1.6 billion missed the consensus estimate by 2.8%. The top line rose 6.7% year over year. Net premiums written increased 14% to $1.2 billion, attributable to a 9% increase in the Insurance segment and a 64% surge in the Reinsurance segment. Net investment income increased 5% year over year to $195.8 million.
AXIS Capital’s underwriting income was $129.5 million against a loss of $274 million in the year-ago quarter. The combined ratio improved 3040 bps to 94.2%. The Insurance segment’s gross premiums written improved 7.4% year over year to $1.7 billion. Net premiums earned increased 11.9% to $1 billion. In the Reinsurance unit, gross premiums written increased 36.9% year over year to $275 million. Underwriting income was $0.4 million against a loss of $212.4 million in the year-ago quarter.
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