AMERISAFE Announces 2021 Third Quarter Results
Reports Combined Ratio of 71.5%
Declares an Extraordinary Dividend of
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
2021 |
|
|
|
2020 |
|
|
% Change |
|
|
2021 |
|
|
|
2020 |
|
|
% Change |
|||
|
(in thousands, except per share data) |
|
|
|
(in thousands, except per share data) |
|
|
|||||||||||||||
| Net premiums earned |
$ |
67,626 |
|
$ |
74,771 |
|
-9.6 |
% |
$ |
208,260 |
|
$ |
229,725 |
|
-9.3 |
% |
|||||
| Net investment income |
|
6,049 |
|
|
7,063 |
|
-14.4 |
% |
|
19,362 |
|
|
22,136 |
|
-12.5 |
% |
|||||
| Net realized gains (losses) on investments (pretax) |
(8 |
) |
309 |
NM |
1,490 |
1,464 |
1.8 |
% |
|||||||||||||
| Net unrealized gains (losses) on | |||||||||||||||||||||
| equity securities (pre-tax) |
|
(771 |
) |
|
844 |
|
NM |
|
|
8,026 |
|
|
(2,349 |
) |
NM |
|
|||||
| Net income |
|
19,136 |
|
|
23,353 |
|
-18.1 |
% |
|
62,215 |
|
|
58,101 |
|
7.1 |
% |
|||||
| Diluted earnings per share |
$ |
0.99 |
|
$ |
1.21 |
|
-18.2 |
% |
$ |
3.21 |
|
$ |
3.00 |
|
7.0 |
% |
|||||
| Operating net income |
|
19,751 |
|
|
22,442 |
|
-12.0 |
% |
|
54,697 |
|
|
58,800 |
|
-7.0 |
% |
|||||
| Operating earnings per share |
$ |
1.02 |
|
$ |
1.16 |
|
-12.1 |
% |
$ |
2.82 |
|
$ |
3.04 |
|
-7.2 |
% |
|||||
| Book value per share |
$ |
24.80 |
|
$ |
24.93 |
|
-0.5 |
% |
$ |
24.80 |
|
$ |
24.93 |
|
-0.5 |
% |
|||||
| Net combined ratio |
|
71.5 |
% |
|
72.8 |
% |
|
76.9 |
% |
|
78.4 |
% |
|||||||||
| Return on average equity |
|
16.1 |
% |
|
19.8 |
% |
|
18.1 |
% |
|
17.0 |
% |
|||||||||
INSURANCE RESULTS
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
2021 |
|
|
|
2020 |
|
|
% Change |
|
|
2021 |
|
|
|
2020 |
|
|
% Change |
|||
|
(in thousands) |
|
|
|
(in thousands) |
|
|
|||||||||||||||
| Gross premiums written |
$ |
67,185 |
|
$ |
72,648 |
|
-7.5 |
% |
$ |
222,423 |
|
$ |
240,008 |
|
-7.3 |
% |
|||||
| Net premiums earned |
|
67,626 |
|
|
74,771 |
|
-9.6 |
% |
|
208,260 |
|
|
229,725 |
|
-9.3 |
% |
|||||
| Loss and loss adjustment expenses incurred |
|
29,661 |
|
|
39,789 |
|
-25.5 |
% |
|
101,601 |
|
|
120,966 |
|
-16.0 |
% |
|||||
| Underwriting and certain other operating costs, | |||||||||||||||||||||
| commissions, salaries and benefits |
|
17,915 |
|
|
13,902 |
|
28.9 |
% |
|
55,337 |
|
|
56,317 |
|
-1.7 |
% |
|||||
| Policyholder dividends |
|
733 |
|
|
714 |
|
2.7 |
% |
|
3,200 |
|
|
2,685 |
|
19.2 |
% |
|||||
| Underwriting profit (pre-tax) |
$ |
19,317 |
|
$ |
20,366 |
|
-5.2 |
% |
$ |
48,122 |
|
$ |
49,757 |
|
-3.3 |
% |
|||||
| Insurance Ratios: | |||||||||||||||||||||
| Current accident year loss ratio |
|
72.0 |
% |
|
72.5 |
% |
|
72.0 |
% |
|
72.5 |
% |
|||||||||
| Prior accident year loss ratio |
|
-28.1 |
% |
|
-19.3 |
% |
|
-23.2 |
% |
|
-19.8 |
% |
|||||||||
| Net loss ratio |
|
43.9 |
% |
|
53.2 |
% |
|
48.8 |
% |
|
52.7 |
% |
|||||||||
| Net underwriting expense ratio |
|
26.5 |
% |
|
18.6 |
% |
|
26.6 |
% |
|
24.5 |
% |
|||||||||
| Net dividend ratio |
|
1.1 |
% |
|
1.0 |
% |
|
1.5 |
% |
|
1.2 |
% |
|||||||||
| Net combined ratio |
|
71.5 |
% |
|
72.8 |
% |
|
76.9 |
% |
|
78.4 |
% |
|||||||||
-
Voluntary premiums were
$3.2 million lower, or 4.6%, compared with the third quarter of 2020, due to continued reductions in approved state loss costs, which were 7.0% lower on average for policies we renewed during the quarter. -
Payroll audits and related premium adjustments were
$3.2 million lower than last year’s third quarter, decreasing premiums written by$2.1 million in the third quarter of 2021, compared with an increase of$1.1 million in the same period in 2020. -
The current accident year loss ratio for the third quarter was 72.0%, unchanged from the first six months of 2021, and one half point lower than 2020. During the quarter, the Company experienced favorable case reserve development for prior accident years, which reduced loss and loss adjustment expenses by
$19.0 million , primarily from accident years 2015 through 2019. -
For the quarter ended
September 30, 2021 , the underwriting expense ratio was 26.5% compared with 18.6% in the same quarter in 2020. The increase in the expense ratio was primarily due to a benefit in last year’s third quarter of$5.7 million from the termination of an assessment related to a multiple injury fund. -
The effective tax rate for the quarter ended
September 30, 2021 was 22.6%, compared with 18.5% in the third quarter of 2020, due to a higher proportion of income from underwriting and taxable investment income.
INVESTMENT RESULTS
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
2021 |
|
|
|
2020 |
|
|
% Change |
|
|
2021 |
|
|
|
2020 |
|
|
% Change |
|||
|
(in thousands) |
|
|
|
(in thousands) |
|
|
|||||||||||||||
| Net investment income |
$ |
6,049 |
|
$ |
7,063 |
|
-14.4 |
% |
$ |
19,362 |
|
$ |
22,136 |
|
-12.5 |
% |
|||||
| Net realized gains (losses) on | |||||||||||||||||||||
| investments (pre-tax) |
|
(8 |
) |
|
309 |
|
NM |
|
|
1,490 |
|
|
1,464 |
|
1.8 |
% |
|||||
| Net unrealized gains (losses) on | |||||||||||||||||||||
| equity securities (pre-tax) |
|
(771 |
) |
|
844 |
|
NM |
|
|
8,026 |
|
|
(2,349 |
) |
NM |
|
|||||
| Pre-tax investment yield |
|
2.1 |
% |
|
2.3 |
% |
|
2.2 |
% |
|
2.5 |
% |
|||||||||
| Tax-equivalent yield (1) |
|
2.5 |
% |
|
2.8 |
% |
|
2.5 |
% |
|
2.8 |
% |
|||||||||
|
(1) |
The tax equivalent yield is calculated using the effective interest rate and the appropriate marginal tax rate. |
-
Net investment income for the quarter ended
September 30, 2021 , decreased 14.4% to$6.0 million from$7.1 million in the third quarter of 2020, due to lower investment yields on fixed-income securities. -
As of
September 30, 2021 , the carrying value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was$1.2 billion .
CAPITAL MANAGEMENT
In an accompanying news release, the Company announced a special cash dividend of
In addition, the Company’s Board of Directors declared a regular quarterly cash dividend of
Book value per share at
SUSTAINABILITY DISCLOSURES
The Company recently published additional sustainability disclosures for investors. These disclosures, which follow the
SUPPLEMENTAL INFORMATION
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
|
|
|
|||||||||||||
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
(in thousands, except share and per share data) |
|||||||||||||||
| Net income |
$ |
19,136 |
|
$ |
23,353 |
|
$ |
62,215 |
|
$ |
58,101 |
|
|||
| Less: | |||||||||||||||
| Net realized gains (losses) on investments |
|
(8 |
) |
|
309 |
|
|
1,490 |
|
|
1,464 |
|
|||
| Net unrealized gains (losses) on equity securities |
|
(771 |
) |
|
844 |
|
|
8,026 |
|
|
(2,349 |
) |
|||
| Tax effect (1) |
|
164 |
|
|
(242 |
) |
|
(1,998 |
) |
|
186 |
|
|||
| Operating net income (2) |
$ |
19,751 |
|
$ |
22,442 |
|
$ |
54,697 |
|
$ |
58,800 |
|
|||
| Average shareholders’ equity (3) |
$ |
474,261 |
|
$ |
472,353 |
|
$ |
459,486 |
|
$ |
456,063 |
|
|||
| Less: | |||||||||||||||
| Average accumulated other comprehensive income |
|
15,924 |
|
|
19,545 |
|
|
18,003 |
|
|
16,062 |
|
|||
| Average adjusted shareholders’ equity (2) |
$ |
458,337 |
|
$ |
452,808 |
|
$ |
441,483 |
|
$ |
440,001 |
|
|||
| Diluted weighted average common shares |
|
19,407,918 |
|
|
19,358,682 |
|
|
19,392,939 |
|
|
19,345,952 |
|
|||
| Return on average equity (4) |
|
16.1 |
% |
|
19.8 |
% |
|
18.1 |
% |
|
17.0 |
% |
|||
| Operating return on average adjusted equity (2) |
|
17.2 |
% |
|
19.8 |
% |
|
16.5 |
% |
|
17.8 |
% |
|||
| Diluted earnings per share |
$ |
0.99 |
|
$ |
1.21 |
|
$ |
3.21 |
|
$ |
3.00 |
|
|||
| Operating earnings per share (2) |
$ |
1.02 |
|
$ |
1.16 |
|
$ |
2.82 |
|
$ |
3.04 |
|
|||
|
(1) |
The tax effect of net realized losses on investments and net unrealized gains (losses) on equity securities is calculated with an effective tax rate of 21%. |
|
(2) |
Operating net income, operating return on average adjusted equity and operating earnings per share are non-GAAP financial measures. Management believes that investors’ understanding of core operating performance is enhanced by AMERISAFE’s disclosure of these financial measures. |
|
(3) |
Average shareholders’ equity is calculated by taking the average of the beginning and ending shareholders’ equity. |
|
(4) |
Return on average equity is calculated by dividing the annualized net income by the average shareholders’ equity. |
CONFERENCE CALL INFORMATION
Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by visiting http://www.amerisafe.com. To listen to the live call on the web, please visit the website at least ten minutes before the call begins to register, download and install any necessary audio software. For those who cannot listen to the live webcast, an archive will be available shortly after the call at http://www.amerisafe.com.
ABOUT
FORWARD LOOKING STATEMENTS
Statements made in this press release that are not historical facts, including statements accompanied by words such as “will,” “believe,” “anticipate,” “expect,” “estimate,” or similar words are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding AMERISAFE’s plans and performance. These statements are based on management’s estimates, assumptions and projections as of the date of this release and are not guarantees of future performance and include statements regarding management’s views and expectations of the workers’ compensation market, the Company’s growth opportunities, underwriting margins and actions by competitors. Actual results may differ materially from the results expressed or implied in these statements if the underlying assumptions prove to be incorrect or as the results of risks, uncertainties and other factors. Other factors that may affect our results are set forth in the Company’s filings with the
|
|
|||||||||||||||
|
Consolidated Statements of Income (in thousands) |
|||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
|
|
|
|||||||||||||
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
(unaudited) |
|
(unaudited) |
|||||||||||||
| Revenues: | |||||||||||||||
| Gross premiums written |
$ |
67,185 |
|
$ |
72,648 |
|
$ |
222,423 |
|
$ |
240,008 |
|
|||
| Ceded premiums written |
|
(2,407 |
) |
|
(2,473 |
) |
|
(7,410 |
) |
|
(7,928 |
) |
|||
| Net premiums written |
$ |
64,778 |
|
$ |
70,175 |
|
$ |
215,013 |
|
$ |
232,080 |
|
|||
| Net premiums earned |
$ |
67,626 |
|
$ |
74,771 |
|
$ |
208,260 |
|
$ |
229,725 |
|
|||
| Net investment income |
|
6,049 |
|
|
7,063 |
|
|
19,362 |
|
|
22,136 |
|
|||
| Net realized gains (losses) on investments |
|
(8 |
) |
|
309 |
|
|
1,490 |
|
|
1,464 |
|
|||
| Net unrealized gains (losses) on equity securities |
|
(771 |
) |
|
844 |
|
|
8,026 |
|
|
(2,349 |
) |
|||
| Gain (loss) on disposal of assets |
|
- |
|
|
- |
|
|
21 |
|
|
(29 |
) |
|||
| Fee and other income |
|
149 |
|
|
18 |
|
|
394 |
|
|
309 |
|
|||
| Total revenues |
|
73,045 |
|
|
83,005 |
|
|
237,553 |
|
|
251,256 |
|
|||
| Expenses: | |||||||||||||||
| Loss and loss adjustment expenses incurred |
|
29,661 |
|
|
39,789 |
|
|
101,601 |
|
|
120,966 |
|
|||
| Underwriting and other operating costs |
|
17,915 |
|
|
13,902 |
|
|
55,337 |
|
|
56,317 |
|
|||
| Policyholder dividends |
|
733 |
|
|
714 |
|
|
3,200 |
|
|
2,685 |
|
|||
| Provision for investment related credit loss | |||||||||||||||
| expense (benefit) |
|
15 |
|
|
(69 |
) |
|
(102 |
) |
|
(13 |
) |
|||
| Total expenses |
|
48,324 |
|
|
54,336 |
|
|
160,036 |
|
|
179,955 |
|
|||
| Income before taxes |
|
24,721 |
|
|
28,669 |
|
|
77,517 |
|
|
71,301 |
|
|||
| Income tax expense |
|
5,585 |
|
|
5,316 |
|
|
15,302 |
|
|
13,200 |
|
|||
| Net income |
$ |
19,136 |
|
$ |
23,353 |
|
$ |
62,215 |
|
$ |
58,101 |
|
|||
|
Consolidated Statements of Income (cont.) (in thousands, except per share amounts) |
|||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
|
|
|
|||||||||||||
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
(unaudited) |
|
(unaudited) |
|||||||||||||
| Basic EPS: | |||||||||||||||
| Net income |
$ |
19,136 |
|
$ |
23,353 |
|
$ |
62,215 |
|
$ |
58,101 |
|
|||
| Basic weighted average common shares |
|
19,344,636 |
|
|
19,299,921 |
|
|
19,328,041 |
|
|
19,282,263 |
|
|||
| Basic earnings per share |
$ |
0.99 |
|
$ |
1.21 |
|
$ |
3.22 |
|
$ |
3.01 |
|
|||
| Diluted EPS: | |||||||||||||||
| Net income |
$ |
19,136 |
|
$ |
23,353 |
|
$ |
62,215 |
|
$ |
58,101 |
|
|||
| Diluted weighted average common shares: | |||||||||||||||
| Weighted average common shares |
|
19,344,636 |
|
|
19,299,921 |
|
|
19,328,041 |
|
|
19,282,263 |
|
|||
| Restricted stock and stock options |
|
63,282 |
|
|
58,761 |
|
|
64,898 |
|
|
63,689 |
|
|||
| Diluted weighted average common shares |
|
19,407,918 |
|
|
19,358,682 |
|
|
19,392,939 |
|
|
19,345,952 |
|
|||
| Diluted earnings per share |
$ |
0.99 |
|
$ |
1.21 |
|
$ |
3.21 |
|
$ |
3.00 |
|
|||
|
|
|||||||
|
Consolidated Balance Sheets (in thousands) |
|||||||
|
|
|
|
|||||
|
|
2021 |
|
|
|
2020 |
|
|
| (unaudited) | |||||||
| Assets | |||||||
| Investments |
$ |
1,034,187 |
|
$ |
1,088,744 |
|
|
| Cash and cash equivalents |
|
123,128 |
|
|
61,757 |
|
|
| Amounts recoverable from reinsurers |
|
108,394 |
|
|
105,803 |
|
|
| Premiums receivable, net |
|
154,517 |
|
|
156,760 |
|
|
| Deferred income taxes |
|
14,738 |
|
|
13,665 |
|
|
| Deferred policy acquisition costs |
|
18,580 |
|
|
17,810 |
|
|
| Other assets |
|
26,379 |
|
|
26,316 |
|
|
|
$ |
1,479,923 |
|
$ |
1,470,855 |
|
||
| Liabilities and Shareholders’ Equity | |||||||
| Liabilities: | |||||||
| Reserves for loss and loss adjustment expenses |
$ |
720,789 |
|
$ |
760,561 |
|
|
| Unearned premiums |
|
136,013 |
|
|
129,260 |
|
|
| Insurance-related assessments |
|
18,907 |
|
|
17,995 |
|
|
| Other liabilities |
|
124,058 |
|
|
124,223 |
|
|
| Shareholders’ equity |
|
480,156 |
|
|
438,816 |
|
|
| Total liabilities and shareholders’ equity |
$ |
1,479,923 |
|
$ |
1,470,855 |
|
|
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View source version on businesswire.com: https://www.businesswire.com/news/home/20211027005862/en/
337.463.9052
Source:
First US Bancshares, Inc. Reports Third Quarter 2021 Results
UNIVERSAL INSURANCE HOLDINGS, INC. – 10-Q – Management's Discussion and Analysis of Financial Condition and Results of Operations
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