Employers’ Q2 2022 highlights
EMPLOYERS hosted its Q2 2022 earnings call on July 29. The highlights:
- Gross premiums written during the quarter and first half are up 22% and 19% respectively – in part due to appetite expansion into new markets such as landscaping, residential, janitorial, and several artisan contracting classes.
- Cerity’s enforced premium at quarter end was $2.7 million, which represents an increase of 250% over the last four quarters and was supported by its recent collaboration with Intuit’s QuickBooks.
- Gross premiums written were $179 million versus $147 million a year ago, an increase of 22%. That increase was primarily due to higher new and renewal premiums and higher final audit premiums. Net premiums earned were $165 million versus $137 million a year ago, an increase of 21%.
- Losses and loss adjustment expenses were $93 million vs $84 million a year ago. The increase was due to higher earned premiums, partially offset by an increase in net favorable prior accident year loss reserve development.
- Commission expenses were $24 million versus $18 million a year ago. The increase was primarily due to higher earned premiums and higher agency incentives. Employers’ current commission ratio of 14% – within its Employer segment – is expected to decrease during the second half of 2022 as a result of a reduction in certain renewal commissions that went into effect on July 1.
- Underwriting and general admin expenses were $39 million vs $37 million a year ago.
- Underwriting income of $13 million vs $2 million a year ago.
- Cerity segment had an underwriting loss of $3 million for the quarter consistent with its underwriting loss of a year ago.
- California remains at ~45% of Employers’ total book. It’s been a little over a year since it adjusted its pricing in California and “sort of changed [its] strategy there.” Employers saw about a 13% increase in the second quarter of 2022 California new business premium relative to what the second quarter of 2021.
- Workers’ comp remains a soft market.
- Employers has over 40 digital API integrations that have produced a year-over-year increase in new business policies – for this quarter, it increased policies by 76% and premium by ~64%. Year-to-date, Employers had written about $22 million of new and renewal business in that digital space – up 90% year-over-year.
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