NASDAQ:AMSF AMERISAFE Q4 2024 Earnings Report $47.10 +0.57 (+1.23%) Closing price 04:00 PM EasternExtended Trading$47.08 -0.02 (-0.03%) As of 04:05 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast AMERISAFE EPS ResultsActual EPS$0.67Consensus EPS $0.60Beat/MissBeat by +$0.07One Year Ago EPSN/AAMERISAFE Revenue ResultsActual Revenue$73.51 millionExpected Revenue$77.37 millionBeat/MissMissed by -$3.86 millionYoY Revenue GrowthN/AAMERISAFE Announcement DetailsQuarterQ4 2024Date2/26/2025TimeAfter Market ClosesConference Call DateThursday, February 27, 2025Conference Call Time10:30AM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfilePowered by AMERISAFE Q4 2024 Earnings Call TranscriptProvided by QuartrFebruary 27, 2025 ShareLink copied to clipboard.PresentationSkip to Participants Operator00:00:00Good day, and welcome to the Amerisafe Fourth Quarter twenty twenty four Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Catherine Shirley. Please go ahead, ma'am. Kathryn ShirleyExecutive VP, Chief Administrative Officer & Secretary at AMERISAFE00:00:11Good morning. Welcome to Amerisafe twenty twenty four fourth quarter investor call. If you have not received the earnings release, it is available on our website at americisafe.com. This call is being recorded. A replay of today's call will be available. Kathryn ShirleyExecutive VP, Chief Administrative Officer & Secretary at AMERISAFE00:00:27Details on how to access the replay are in the earnings release. During this call, we will be making forward looking statements. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Actual results may differ materially from the results expressed or implied in these statements if the underlying assumptions prove to be incorrect or as a result of risks, uncertainties and other factors, including factors discussed in the earnings release, in the comments made during today's call and in the Risk Factors section of our Form 10 K, Form 10 Qs and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward looking statements. Kathryn ShirleyExecutive VP, Chief Administrative Officer & Secretary at AMERISAFE00:01:10I will now turn the call over to Janelle Frost, Amerisafe's President and CEO. Janelle FrostPresident & CEO at AMERISAFE00:01:16Thank you, Catherine, and good morning, everyone. We are pleased to share Amerisafe's results for both the fourth quarter and the full year 2024. A key priority throughout the year has been top line growth with consistent underwriting margin, which is reflected in our gross premiums written increase of 3.9% for the fourth quarter and 3.1% for the full year. Voluntary premiums on policies written rose by 8.5% in the fourth quarter and 4.6% for the year compared to 2023, while our in force policy count grew 9.6. Strong premium retention and robust new business production were the primary drivers for this growth, underscoring our commitment to profitable growth in the competitive landscape. Janelle FrostPresident & CEO at AMERISAFE00:02:04Despite industry wide headwinds, including rate reductions and declining wage inflation, our ability to identify and capitalize on profitable opportunity is a testament to the expertise and collaboration of our team. We are improving our agent relationships, protecting our policyholders and caring for injured workers. Our focus led to a combined ratio of 88.7% and an ROE of 20.2%. This success is direct result of collaboration across the organization and the empowerment of our employees to foster a sales driven culture. From frontline teams of underwriting sales and safety to the backend support of claims and premium audit and operational functions such as regulatory, IT and finance, every department played a role in driving growth. Janelle FrostPresident & CEO at AMERISAFE00:02:55Our employees have embraced the challenge of competing in a dynamic P and C market where workers' compensation is aligned as aligned remains attractive to carriers. For the full year, our accident year loss ratio remained steady at 71% consistent with the prior year, and we anticipate maintaining that level in 2025. Additionally, we recognized favorable development from prior accident years of $9,700,000 in the quarter and $34,900,000 for the full year 2024. On capital management front, Amerisafe's Board of Directors has approved a 5.4 increase in our regular dividend to $0.39 per share. Looking ahead, we remain focused on top line growth. Janelle FrostPresident & CEO at AMERISAFE00:03:39We're confident that our ability to identify and ensure profitable high risk high hazard risk will continue to offset broader market challenges. With strong policy retention and a disciplined approach to growth, Amerisafe remains committed to delivering exceptional value to our shareholders. With that, I'll turn the call over to Andy to discuss the financials. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:04:01Thank you, Janelle, and good morning to everyone. For the fourth quarter of twenty twenty four, Amerisafe reported net income of $13,200,000 or $0.69 per diluted share and operating net income of $12,800,000 or $0.67 per diluted share. During the fourth quarter of twenty twenty three, net income was $19,200,000 or $1 per diluted share and operating net income of $14,300,000 or $0.74 per diluted share. The lower net income was primarily driven by lower net unrealized gains on equity securities. For the full year, net income was $55,400,000 and net operating income was $48,400,000 compared with $62,100,000 and $55,900,000 respectively in 2023. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:04:47Gross written premiums were $62,700,000 in the quarter and $294,100,000 for the year, growing 3.93.1% respectively. Net premiums earned were $66,500,000 in the quarter and $270,600,000 for the year growing 1.21.3% respectively. Overall strong premium retention and new business production were the primary drivers of top line growth for both the quarter and year reflecting an organizational focus on growing profitable sales despite competitive market conditions. Our total underwriting and other expenses were $19,800,000 in the quarter, a 4% increase compared with $19,000,000 recognized in the fourth quarter of twenty twenty three. This increase resulted in an expense ratio of 29.7% compared with 28.9% in the fourth quarter of twenty twenty three. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:05:41The increase was primarily the result of slightly lower earned premium growth in relation to other operating expenses. For the full year, the expense ratio was 29.6% compared with 29.3% in 2023. For the year, our tax rate was 19.7% unchanged from the prior year. Turning to our investment portfolio, for the fourth quarter and full year net investment income decreased 14.4% to $6,900,000 and 6.8% to $29,200,000 respectively. This was due to the decrease in investable assets following the payment of the special dividend in December. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:06:20For the quarter, the yield on new investments increased approximately 42 basis points driving our tax equivalent book yield to 3.8% or 11 basis points higher than the fourth quarter of twenty twenty three. Realized losses for the portfolio and securities sold were $400,000 in the quarter compared with a gain of $1,000,000 during the fourth quarter of twenty twenty three. The investment portfolio is high quality carrying an average AA- credit rating with a duration of four point four years. The composition of the portfolio is 62% in municipal bonds, 22% in corporate bonds, 3% in U. S. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:06:57Treasuries and agencies, 7% in equity securities and 6% in cash and other investments. Approximately 56% of our bond portfolio is comprised of held to maturity securities and due to the notable increase in rates during the quarter, the net unrealized loss was $13,300,000 at quarter end. As a reminder, these held to maturity securities are carried at amortized costs and therefore unrealized gains or losses on these securities are not reflected in our book value. Our capital position is strong with a high quality balance sheet, solid loss reserve position and conservative investment portfolio. At quarter end, Amerisafe carried roughly $830,000,000 in investments, cash and cash equivalents. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:07:42And finally, just a couple of other topics. Book value per share was $13.51 after paying the special dividend in December 2024, a decrease in book value of 11.6% from year end 2023. Operating return on average equity was 17.5 for the quarter and 17.1% for the full year. We will be filing our Form 10 ks with the SEC tomorrow, February 28, after the market close. With that, I would like to open the call for the question and answer portion of the call. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:08:13Operator? Operator00:08:30We'll now take a question from Mark Hughes with Truist. Mark HughesAnalyst at Truist Securities00:08:35Yes, thanks. Good morning. Janelle, the policy count growth, I think you said 9.6%. Could you put that in the context of what you've experienced in recent quarters? And could you also talk about what the average size per policy has been? Mark HughesAnalyst at Truist Securities00:08:53How that has trended over the last few quarters? Janelle FrostPresident & CEO at AMERISAFE00:08:56Yes, great. I believe, Mark, the 9.6% that I quoted was for the year. That's on an in store space, but not just the quarter. So that was for the entire year. And how does that compare? Janelle FrostPresident & CEO at AMERISAFE00:09:10So I'm sorry. Go ahead. Mark HughesAnalyst at Truist Securities00:09:11I was going to I'm sorry to interrupt. But how was that in the fourth quarter? Janelle FrostPresident & CEO at AMERISAFE00:09:20Great question. I don't have that in front of me actually. I only got the year to date. Let me speak about it. Mark HughesAnalyst at Truist Securities00:09:26I guess the year over year is 9.6%, but Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:09:299.6%. Janelle FrostPresident & CEO at AMERISAFE00:09:32Yes. Policy growth in the fourth quarter was 2.6%. Mark HughesAnalyst at Truist Securities00:09:38Okay. And that's a sequential number? Janelle FrostPresident & CEO at AMERISAFE00:09:42Yes. Mark HughesAnalyst at Truist Securities00:09:43Okay. Very good. And then, sorry for interrupting. You were saying I think I'd asked about size as well. Janelle FrostPresident & CEO at AMERISAFE00:09:51Yes. So the size of policy, our average policy size for 2024 was slightly lower than 2023, but still holding strong. We're certainly were boosted by stronger payrolls coming into the year. We knew that going into 2024 that we were seeing payroll growth. In the fourth quarter, we saw some slowing in terms of average wages. Janelle FrostPresident & CEO at AMERISAFE00:10:16If you recall, the last probably the first three quarters of twenty twenty four, we were seeing somewhere around 7% each quarter. It dropped to 4% in the fourth quarter of twenty twenty four, not a complete surprise, obviously. But we were trending higher than national averages and now we're starting to see some moderation there. Mark HughesAnalyst at Truist Securities00:10:38Okay. How about the renewal rate, the pricing measures that shall not be named, we don't have that, which is perfectly fine. But generally speaking, this quarter, I think you had undertaken a strategy of being a little more active on renewal rate. Was that a contributor this quarter? Is that kind of run its course? Mark HughesAnalyst at Truist Securities00:11:11Or how much was that an impact on the top line? Janelle FrostPresident & CEO at AMERISAFE00:11:15Right. Yes, it certainly was impactful to the quarter and to the full year actually. But for the quarter, our policy retention was 94.1% on a policy basis and on a premium basis, 88%. So strong renewals. Mark HughesAnalyst at Truist Securities00:11:34And then your reserve gains, I think you had some gains from 2022 earlier in the year and you described this quarter also reserve gains from older accident years including 2022. Any observations about the post COVID years 2021, '20 '20 '2, just kind of how they're shaping up? Janelle FrostPresident & CEO at AMERISAFE00:11:59Yes. Those are going to be good accident years for us. The 9.7% favorable development or not percent, dollars 9,700,000.0 of favorable development we had this quarter, 1,000,000 of it was from '22, '1 point '5 million was from '21, '1 point '6 million from 2020 and then 2019 and prior was 5,600,000.0. So we're obviously seeing even from the more green years, we're seeing favorable taste development come out of those exiting years. Mark HughesAnalyst at Truist Securities00:12:32Yes. And then maybe one more, the ceded premium was a little elevated in this quarter. I think it was a little higher in the fourth quarter of last year, but even compared to that, it's up year over year. If we think about, I guess, number one, why was that? And then number two, for 2025, should it be kind of back in the I see it as around 6% normally of gross premiums written? Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:13:06Mark, it's Andy. Good morning to you. So you're right, the session was a little bit higher. I think that's because of the growth that we saw in the quarter. And of course, in Q4, we always go back and make sure that if there's any true up needed, it's done. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:13:18But overall, it's really based on the growth that we're seeing in the policy count coming through voluntary deck. And just as far as 2025, I think it's fair to say that every quarter isn't linear. So I think the 6% you're saying is probably correct, but it's right around that number. Mark HughesAnalyst at Truist Securities00:13:38Yes. Okay. Very good. I had a couple more, but I'll jump back in the queue. Thank you. Janelle FrostPresident & CEO at AMERISAFE00:13:45Thank you, Mark. Operator00:13:53We'll now take a question from Matt Carletti with Citizens JMP. Matt CarlettiManaging Director at Citizens JMP00:13:59Thanks. Good morning. Janelle FrostPresident & CEO at AMERISAFE00:14:01Good morning, Matt. Matt CarlettiManaging Director at Citizens JMP00:14:03First question is, obviously talked a bit about what we've seen the voluntary growth really pick up kind of back half of the year. And I think we've talked a bit about how that's been pretty intentional kind of interacting with your agencies and trying to be easy to do business with. And one of the aspects you pointed to, I think it was last call, was kind of the idea of like getting them just to not think of you as like the roofing company and that you write other high hazard kind of class codes and things like that. Have you seen that in the growth that's come through that there is an expanded kind of maybe appetite by the agency and that in certain cases you might have been pigeonholed to a particular type of risk and that's broadening and that's driving the growth or is it something else? Janelle FrostPresident & CEO at AMERISAFE00:14:51One, it's a great question. We certainly have to your point really have been making sure our agency base understands, A, the value proposition of Amerisafe, particularly our safety and claims services and then, two, what our appetite is. So making sure that that is easily accessible to our agents, both through our TSMs and both through digital platforms as well. But basically, excuse me, getting our TSMs in front of agents, reiterating what do you have in your book, Mr. Agent, that fits in the mirror safe's risk appetite and give us an opportunity. Janelle FrostPresident & CEO at AMERISAFE00:15:28So the question to is that attributable to a growth? I would say yes. Could I put percentages around that? Probably no. But I will say this, we are trying to be sure that we are being more effective with the agents that we have appointed. Janelle FrostPresident & CEO at AMERISAFE00:15:44So increasing the percentage of our agents that are submitting business to us and more importantly increasing the number of agents that have a bind with us. Those are two numbers internally that we're really focused on. So driving home the appetite is part of that equation certainly. Matt CarlettiManaging Director at Citizens JMP00:16:02Okay, perfect. And then second question, kind of latter part of last year, couple of hurricanes came through areas in the country that you have a lot of business. Have you seen as any of I guess, has any of the growth we saw in Q4 kind of been a result of kind of that reconstruction, if you will? Or would you expect to see any of that maybe as we go forward? I know it can take time for that to come through. Janelle FrostPresident & CEO at AMERISAFE00:16:31Yes. You're right, Matt. It does take time. It certainly hasn't shown up an audit premium yet because obviously we haven't audited those policies that would have been affected during those time periods. We do look at the monthly reporting that our policyholders are sending into us and we've seen some a little bit of increase if I look at Florida, Georgia and the Carolinas, but nothing that I could point to and say, yes, that's definitely hurricane related business. Janelle FrostPresident & CEO at AMERISAFE00:16:59I think it's more normal course of business. So I don't know that I can quantify if any of that's particular to storms. Matt CarlettiManaging Director at Citizens JMP00:17:10Okay. Great. Thank you very much for the color. I appreciate it. Janelle FrostPresident & CEO at AMERISAFE00:17:13Thank you, Janelle FrostPresident & CEO at AMERISAFE00:17:17Matt. Operator00:17:20We'll now take a question from Bob Farnham with Janney. Robert FarnamManaging Director at Janney Montgomery Scott00:17:25Hey there, good morning. I'd just like to maybe expand a little bit on Matt's question about the kind of the expansion of your new business. And I just wanted to know, are you looking at adding additional class codes as you're expanding or are you really just focusing on stuff that you already write? Janelle FrostPresident & CEO at AMERISAFE00:17:47We are focusing on things that we already write. If I talk about it in terms of hazard groups, A to G, we specialize in E, F and G and still over 80% of our enforced policies are E, F and G. So even with our new business growth, that is our focus area. We haven't added necessarily classes of business. It's really about penetrating the markets that we're in and being more effective about that. Robert FarnamManaging Director at Janney Montgomery Scott00:18:13Right. Okay. That's what I thought. And just kind of a qualitative view on reserves. How much of your kind of open claim inventory is related to claims that are ten years or older? Robert FarnamManaging Director at Janney Montgomery Scott00:18:30I'm trying to get an idea of kind of how long claims can stay open and kind of what the average duration of your liabilities is kind of what I'm getting at. Janelle FrostPresident & CEO at AMERISAFE00:18:41Yeah. If I look at accident years and I'll use the same sort of the same accident years that we put in the 10 ks, you know, where we have '23, '20 '20 '2, it goes in this prior to 2019. Prior to 2019, I would say 99% of the claims that were reported to us are closed. So very small percentage of those are open. And some are open for there are some states that we can't technically close the claims just for medical reasons and so they're open for medical enrollment. Janelle FrostPresident & CEO at AMERISAFE00:19:10We're done with the indemnity portion of the claim. But yes, 99% of those claims, I would say are closed for those that would for that prior to 2019. Robert FarnamManaging Director at Janney Montgomery Scott00:19:20Okay. So it sounds like relative to the overall workers' comp industry, your claims closures seem to be more quick than maybe the average for the industry. Is that accurate? Janelle FrostPresident & CEO at AMERISAFE00:19:35I believe so. And I totally give the credit to my claims organization. It is definitely in the way that Amerisafe handles claims. We still use, we call it good old fashioned claims adjusting. We meet with people. Janelle FrostPresident & CEO at AMERISAFE00:19:49We take written statements. We manage those claims intensely and we keep those low inventories per the case manager. I can't stress that enough. I know that that is unique to Amerisafe. On average, across many field case managers, on average, they have less than 50 claims per adjuster. Janelle FrostPresident & CEO at AMERISAFE00:20:10When you think about that, they are really they really have the opportunity difference in these claims, know these claims and that's how we're able to close them and find resolutions, getting maximum medical improvement, return those injured workers to work as quickly as we can, because they have the opportunity and the means to which to close those claims. Robert FarnamManaging Director at Janney Montgomery Scott00:20:31Great. All right. Thanks for being interested in Operator00:20:42We'll now take a follow-up from Mark Hughes with Truist. Mark HughesAnalyst at Truist Securities00:20:46Yes, thanks. You talked about the payroll, one of the concepts that's come up from time to time is kind of that next job in construction. Do you have any view on the construction industry and the prospects there? Janelle FrostPresident & CEO at AMERISAFE00:21:03You know, Mark, I feel I mean, this is the world of court needs to know. But my opinion is that at least for our insured base, the economy seems to be supporting their work pretty well. I mean, we're still seeing strong payroll growth there. We are finding opportunities. We think about all the headlines that I read every day and we always contemplate how does that affect our book of business. Janelle FrostPresident & CEO at AMERISAFE00:21:28We think about tariffs and what that could mean to construction as a whole. I know people talk about steel and those types of things. Not that we are completely isolated from that, but you also think about small to mid sized employers. I do think we have some buffer around those types of impacts to the industry as a whole. So not immune, but made somewhat insulated, I would think. Janelle FrostPresident & CEO at AMERISAFE00:21:52Immigration is again a question that we've been asked about particularly regarding our construction and agriculture book. For Amerisafe, I don't have a way of quantifying from the premium side of things how many of our workers are non documented workers. But certainly, we know from a claims perspective, we do have injured workers that are non documented workers. But from a claims perspective, they are entitled to the same benefits every other worker is entitled to. So if I play that through in my mind, what happens for non documented workers, particularly in our construction book or our agriculture book, could it be influential to the labor force? Janelle FrostPresident & CEO at AMERISAFE00:22:35Perhaps. But again, these are small to mid sized employers. So even if it is influential in terms of maybe less resilient labor force, perhaps that also could lead to higher wages if those jobs are replaced with documented workers. So headline wise, those are the things I think about in terms of our industries, fans of the economy as it stands. But I mean, as of right now, obviously, things change every day. Janelle FrostPresident & CEO at AMERISAFE00:23:07But as of right now, I feel pretty strongly that our construction book and even our entire book is, has a bright future for 2025. Mark HughesAnalyst at Truist Securities00:23:17Yeah. How about the large claims for the year? Janelle FrostPresident & CEO at AMERISAFE00:23:22Yeah. So, you're going to laugh when I say this, Mark, but it's been a while since I've had to use this word, but it's lumpy. So we ended the year with 18 claims, over $1,000,000 And when you look comparatively to 2023, which was a record year in terms of a loan number, nine, is there I hearken back to my lumpy word. 'eighteen is not that unusual. If I look at the five year average of where we were at twelve months because obviously claims develop after an accident at the end of an accident year. Janelle FrostPresident & CEO at AMERISAFE00:23:55But if I look at the five year average at twelve months, we average around 15. So 2018 Janelle FrostPresident & CEO at AMERISAFE00:24:02is not too far off Janelle FrostPresident & CEO at AMERISAFE00:24:03of the average. But compared to 2023, that number certainly you look at and go, wow, that's a change. But when you look at the book as a whole, it's really not that much of a frequency of severity. It's just there were 18 claims. If I look at how they occurred or what industries they incurred in, it very much mirrors our book of business. Janelle FrostPresident & CEO at AMERISAFE00:24:22And even the types of injury have been are very consistent with what we've seen in terms of the types of injuries. Obviously falls and slips being the number one cause of loss for those larger claims and that's true for 2024. Mark HughesAnalyst at Truist Securities00:24:37Yes. Okay. And then anything on the medical inflation front, either from costs or ability to access certain services in case of lack of capacity because reimbursement rates are too low. Any changes there you've noted? Janelle FrostPresident & CEO at AMERISAFE00:24:58No real development other than what we've shared over the last couple of quarters. Home health is still probably the one I focus on the most simply because it's such a big component of our larger claims. Home health is a big component of those costs. So we certainly are paying attention to that. But nothing new other than those things. Janelle FrostPresident & CEO at AMERISAFE00:25:21In terms of reimbursement rate, no. We certainly are monitoring the loss costs or the rates that are being approved by the states and how that it could or could not be impactful. But it's been a wide range. If you look at the loss costs that have been approved for oneone or the ones that we know about for 2025 at this point, I think the high is a 19% decrease in Maine and the or the I say the high, the low, the decrease. And then the largest increase I think we've seen is 6.5% in Nevada. Janelle FrostPresident & CEO at AMERISAFE00:25:53But there's a wide range there in the loss costs that are being approved. So how medical costs will influence or how the reimbursement rates will influence that on a go forward basis, I guess time would tell. But I don't I can't see anything in those rate filings that were specific to medical fee schedules being adjusted to the degree that it was highlighted in the rate filing. I don't recall that. It's been more just experience. Mark HughesAnalyst at Truist Securities00:26:21Yes. Did you have you averaged up the rate filings if you look at the recent trend? Janelle FrostPresident & CEO at AMERISAFE00:26:28Yes. The average is a little Janelle FrostPresident & CEO at AMERISAFE00:26:28bit less than that. Janelle FrostPresident & CEO at AMERISAFE00:26:30Yes. I shouldn't I don't think I said this, but it's a decrease of and somewhere around the mid single digit range. Mark HughesAnalyst at Truist Securities00:26:38Yes. How is that how is that mid year or this time last year? Janelle FrostPresident & CEO at AMERISAFE00:26:45So for 2020 that's a good point. In 2023, we were a little we were sort of upper single digit, so more in the 8% to 9% depending I think we said somewhere in the range of 7% to 9%. Mark HughesAnalyst at Truist Securities00:26:59Yes. Janelle FrostPresident & CEO at AMERISAFE00:27:01So it's a still ever so slight improvement if you're trying to get me to give you great news about rates. There you go. Mark HughesAnalyst at Truist Securities00:27:07Hey, it's inflection. The trend Mark HughesAnalyst at Truist Securities00:27:09is right. Janelle FrostPresident & CEO at AMERISAFE00:27:11Yes. Janelle FrostPresident & CEO at AMERISAFE00:27:16Yes. Mark HughesAnalyst at Truist Securities00:27:16And then anything on the audit front? Is that, we're just kind of progressing through that earlier period of wage inflation? And so, as you do the audits on a look back, it's kind of naturally tapering. Is that a way to think about it? Mark HughesAnalyst at Truist Securities00:27:38Maybe that audits just naturally from a macro perspective, you'll see deceleration there? Janelle FrostPresident & CEO at AMERISAFE00:27:49Yes. I believe we'll see a deceleration or a moderation. I don't see again looking forward to 22.5% based on what I know today. I don't see audit premium turning negative. I think it still remains positive. Janelle FrostPresident & CEO at AMERISAFE00:28:03I think the new employee count still have been averaging between that 12% of the things that we've been seeing each quarter and then there's been wage inflation. I don't think there's I don't foresee that flipping to being negative, but certainly the year over year comparisons get tough are going to get tougher and tougher and there will be deceleration from that standpoint. But stand alone audit premium, I believe will still remain positive in 2025. Mark HughesAnalyst at Truist Securities00:28:33Yes. And then any instances of any competitors getting a more aggressive for workers' comp premium? It seems like you're holding your own and then some in terms of policy count and premium growth. So you wouldn't know it by looking at it in that sense, but I'm just sort of curious whether you've seen any changes. Janelle FrostPresident & CEO at AMERISAFE00:28:56It is very competitive, Mark. If that's a change, probably not. But as the other P and C lines have not yet rectified their issues in terms of overall results, workers' compensation remains attractive. And so as long as the combined ratios for the industry remain attractive, we will have competitors and we will have competitors dipping into the high hazard space. But that's a reality that we are prepared to face. Mark HughesAnalyst at Truist Securities00:29:31Yeah. Zipping into high hazard is probably a bad approach. Janelle FrostPresident & CEO at AMERISAFE00:29:38Well, yes, if you're asking me for advice, yes, I would say that, certainly. Mark HughesAnalyst at Truist Securities00:29:43That's super dangerous. You need to stay away. Janelle FrostPresident & CEO at AMERISAFE00:29:46Exactly. Mark HughesAnalyst at Truist Securities00:29:48Yeah. Any early thoughts on lost pick for 2025? Janelle FrostPresident & CEO at AMERISAFE00:29:54Yeah. I I as of right now, I believe we're gonna hold at seventy one. Mark HughesAnalyst at Truist Securities00:29:59Okay. Very good. Thank you for all the answers. Operator00:30:07And it appears there are no further telephone questions. I'd like to turn the conference back to Ms. Frost for any additional or closing comments. Janelle FrostPresident & CEO at AMERISAFE00:30:16Profitable incremental growth is the focus goal for the AMERISAFE team, one that we delivered on in 2024 and are well positioned for 2025. Thank you for joining us today. Operator00:30:29And once again, that does conclude today's conference. We thank you all for your participation. You may now disconnect.Read moreParticipantsExecutivesKathryn ShirleyExecutive VP, Chief Administrative Officer & SecretaryJanelle FrostPresident & CEOAnastasios OmiridisExecutive VP & CFOAnalystsMark HughesAnalyst at Truist SecuritiesMatt CarlettiManaging Director at Citizens JMPRobert FarnamManaging Director at Janney Montgomery ScottPowered by Conference Call Audio Live Call not available Earnings Conference CallAMERISAFE Q4 202400:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipants Earnings DocumentsPress Release(8-K)Annual report(10-K) AMERISAFE Earnings HeadlinesAMERISAFE's (AMSF) "Market Outperform" Rating Reaffirmed at JMP SecuritiesMay 3 at 2:45 AM | americanbankingnews.comAMERISAFE reports Q1 2025 premium growth of 4.6% amid competitive marketMay 1, 2025 | msn.comTrump’s Bitcoin Reserve is No Accident…Crypto policy is changing fast… Smart investors are positioning themselves to benefit. And it's all happening outside of the traditional system. At the center of it all is one crypto project we believe could be the #1 coin to own right now.May 6, 2025 | Crypto 101 Media (Ad)AMERISAFE Inc (AMSF) Q1 2025 Earnings Call Highlights: Navigating Challenges with Strategic GrowthMay 1, 2025 | gurufocus.comAMERISAFE’s Earnings Call: Balancing Growth and ChallengesApril 30, 2025 | tipranks.comAMERISAFE's (NASDAQ:AMSF) investors will be pleased with their 16% return over the last five yearsApril 12, 2025 | finance.yahoo.comSee More AMERISAFE Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like AMERISAFE? Sign up for Earnings360's daily newsletter to receive timely earnings updates on AMERISAFE and other key companies, straight to your email. Email Address About AMERISAFEAMERISAFE (NASDAQ:AMSF), an insurance holding company, underwrites workers' compensation insurance in the United States. The company provides benefits to injured employees for temporary or permanent disability, death, and medical and hospital expenses. It sells its products through retail and wholesale brokers and agents; and small and mid-sized employers engaged in hazardous industries, including construction, trucking, logging and lumber, agriculture, manufacturing, telecommunications, and maritime. 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PresentationSkip to Participants Operator00:00:00Good day, and welcome to the Amerisafe Fourth Quarter twenty twenty four Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Catherine Shirley. Please go ahead, ma'am. Kathryn ShirleyExecutive VP, Chief Administrative Officer & Secretary at AMERISAFE00:00:11Good morning. Welcome to Amerisafe twenty twenty four fourth quarter investor call. If you have not received the earnings release, it is available on our website at americisafe.com. This call is being recorded. A replay of today's call will be available. Kathryn ShirleyExecutive VP, Chief Administrative Officer & Secretary at AMERISAFE00:00:27Details on how to access the replay are in the earnings release. During this call, we will be making forward looking statements. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Actual results may differ materially from the results expressed or implied in these statements if the underlying assumptions prove to be incorrect or as a result of risks, uncertainties and other factors, including factors discussed in the earnings release, in the comments made during today's call and in the Risk Factors section of our Form 10 K, Form 10 Qs and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward looking statements. Kathryn ShirleyExecutive VP, Chief Administrative Officer & Secretary at AMERISAFE00:01:10I will now turn the call over to Janelle Frost, Amerisafe's President and CEO. Janelle FrostPresident & CEO at AMERISAFE00:01:16Thank you, Catherine, and good morning, everyone. We are pleased to share Amerisafe's results for both the fourth quarter and the full year 2024. A key priority throughout the year has been top line growth with consistent underwriting margin, which is reflected in our gross premiums written increase of 3.9% for the fourth quarter and 3.1% for the full year. Voluntary premiums on policies written rose by 8.5% in the fourth quarter and 4.6% for the year compared to 2023, while our in force policy count grew 9.6. Strong premium retention and robust new business production were the primary drivers for this growth, underscoring our commitment to profitable growth in the competitive landscape. Janelle FrostPresident & CEO at AMERISAFE00:02:04Despite industry wide headwinds, including rate reductions and declining wage inflation, our ability to identify and capitalize on profitable opportunity is a testament to the expertise and collaboration of our team. We are improving our agent relationships, protecting our policyholders and caring for injured workers. Our focus led to a combined ratio of 88.7% and an ROE of 20.2%. This success is direct result of collaboration across the organization and the empowerment of our employees to foster a sales driven culture. From frontline teams of underwriting sales and safety to the backend support of claims and premium audit and operational functions such as regulatory, IT and finance, every department played a role in driving growth. Janelle FrostPresident & CEO at AMERISAFE00:02:55Our employees have embraced the challenge of competing in a dynamic P and C market where workers' compensation is aligned as aligned remains attractive to carriers. For the full year, our accident year loss ratio remained steady at 71% consistent with the prior year, and we anticipate maintaining that level in 2025. Additionally, we recognized favorable development from prior accident years of $9,700,000 in the quarter and $34,900,000 for the full year 2024. On capital management front, Amerisafe's Board of Directors has approved a 5.4 increase in our regular dividend to $0.39 per share. Looking ahead, we remain focused on top line growth. Janelle FrostPresident & CEO at AMERISAFE00:03:39We're confident that our ability to identify and ensure profitable high risk high hazard risk will continue to offset broader market challenges. With strong policy retention and a disciplined approach to growth, Amerisafe remains committed to delivering exceptional value to our shareholders. With that, I'll turn the call over to Andy to discuss the financials. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:04:01Thank you, Janelle, and good morning to everyone. For the fourth quarter of twenty twenty four, Amerisafe reported net income of $13,200,000 or $0.69 per diluted share and operating net income of $12,800,000 or $0.67 per diluted share. During the fourth quarter of twenty twenty three, net income was $19,200,000 or $1 per diluted share and operating net income of $14,300,000 or $0.74 per diluted share. The lower net income was primarily driven by lower net unrealized gains on equity securities. For the full year, net income was $55,400,000 and net operating income was $48,400,000 compared with $62,100,000 and $55,900,000 respectively in 2023. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:04:47Gross written premiums were $62,700,000 in the quarter and $294,100,000 for the year, growing 3.93.1% respectively. Net premiums earned were $66,500,000 in the quarter and $270,600,000 for the year growing 1.21.3% respectively. Overall strong premium retention and new business production were the primary drivers of top line growth for both the quarter and year reflecting an organizational focus on growing profitable sales despite competitive market conditions. Our total underwriting and other expenses were $19,800,000 in the quarter, a 4% increase compared with $19,000,000 recognized in the fourth quarter of twenty twenty three. This increase resulted in an expense ratio of 29.7% compared with 28.9% in the fourth quarter of twenty twenty three. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:05:41The increase was primarily the result of slightly lower earned premium growth in relation to other operating expenses. For the full year, the expense ratio was 29.6% compared with 29.3% in 2023. For the year, our tax rate was 19.7% unchanged from the prior year. Turning to our investment portfolio, for the fourth quarter and full year net investment income decreased 14.4% to $6,900,000 and 6.8% to $29,200,000 respectively. This was due to the decrease in investable assets following the payment of the special dividend in December. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:06:20For the quarter, the yield on new investments increased approximately 42 basis points driving our tax equivalent book yield to 3.8% or 11 basis points higher than the fourth quarter of twenty twenty three. Realized losses for the portfolio and securities sold were $400,000 in the quarter compared with a gain of $1,000,000 during the fourth quarter of twenty twenty three. The investment portfolio is high quality carrying an average AA- credit rating with a duration of four point four years. The composition of the portfolio is 62% in municipal bonds, 22% in corporate bonds, 3% in U. S. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:06:57Treasuries and agencies, 7% in equity securities and 6% in cash and other investments. Approximately 56% of our bond portfolio is comprised of held to maturity securities and due to the notable increase in rates during the quarter, the net unrealized loss was $13,300,000 at quarter end. As a reminder, these held to maturity securities are carried at amortized costs and therefore unrealized gains or losses on these securities are not reflected in our book value. Our capital position is strong with a high quality balance sheet, solid loss reserve position and conservative investment portfolio. At quarter end, Amerisafe carried roughly $830,000,000 in investments, cash and cash equivalents. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:07:42And finally, just a couple of other topics. Book value per share was $13.51 after paying the special dividend in December 2024, a decrease in book value of 11.6% from year end 2023. Operating return on average equity was 17.5 for the quarter and 17.1% for the full year. We will be filing our Form 10 ks with the SEC tomorrow, February 28, after the market close. With that, I would like to open the call for the question and answer portion of the call. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:08:13Operator? Operator00:08:30We'll now take a question from Mark Hughes with Truist. Mark HughesAnalyst at Truist Securities00:08:35Yes, thanks. Good morning. Janelle, the policy count growth, I think you said 9.6%. Could you put that in the context of what you've experienced in recent quarters? And could you also talk about what the average size per policy has been? Mark HughesAnalyst at Truist Securities00:08:53How that has trended over the last few quarters? Janelle FrostPresident & CEO at AMERISAFE00:08:56Yes, great. I believe, Mark, the 9.6% that I quoted was for the year. That's on an in store space, but not just the quarter. So that was for the entire year. And how does that compare? Janelle FrostPresident & CEO at AMERISAFE00:09:10So I'm sorry. Go ahead. Mark HughesAnalyst at Truist Securities00:09:11I was going to I'm sorry to interrupt. But how was that in the fourth quarter? Janelle FrostPresident & CEO at AMERISAFE00:09:20Great question. I don't have that in front of me actually. I only got the year to date. Let me speak about it. Mark HughesAnalyst at Truist Securities00:09:26I guess the year over year is 9.6%, but Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:09:299.6%. Janelle FrostPresident & CEO at AMERISAFE00:09:32Yes. Policy growth in the fourth quarter was 2.6%. Mark HughesAnalyst at Truist Securities00:09:38Okay. And that's a sequential number? Janelle FrostPresident & CEO at AMERISAFE00:09:42Yes. Mark HughesAnalyst at Truist Securities00:09:43Okay. Very good. And then, sorry for interrupting. You were saying I think I'd asked about size as well. Janelle FrostPresident & CEO at AMERISAFE00:09:51Yes. So the size of policy, our average policy size for 2024 was slightly lower than 2023, but still holding strong. We're certainly were boosted by stronger payrolls coming into the year. We knew that going into 2024 that we were seeing payroll growth. In the fourth quarter, we saw some slowing in terms of average wages. Janelle FrostPresident & CEO at AMERISAFE00:10:16If you recall, the last probably the first three quarters of twenty twenty four, we were seeing somewhere around 7% each quarter. It dropped to 4% in the fourth quarter of twenty twenty four, not a complete surprise, obviously. But we were trending higher than national averages and now we're starting to see some moderation there. Mark HughesAnalyst at Truist Securities00:10:38Okay. How about the renewal rate, the pricing measures that shall not be named, we don't have that, which is perfectly fine. But generally speaking, this quarter, I think you had undertaken a strategy of being a little more active on renewal rate. Was that a contributor this quarter? Is that kind of run its course? Mark HughesAnalyst at Truist Securities00:11:11Or how much was that an impact on the top line? Janelle FrostPresident & CEO at AMERISAFE00:11:15Right. Yes, it certainly was impactful to the quarter and to the full year actually. But for the quarter, our policy retention was 94.1% on a policy basis and on a premium basis, 88%. So strong renewals. Mark HughesAnalyst at Truist Securities00:11:34And then your reserve gains, I think you had some gains from 2022 earlier in the year and you described this quarter also reserve gains from older accident years including 2022. Any observations about the post COVID years 2021, '20 '20 '2, just kind of how they're shaping up? Janelle FrostPresident & CEO at AMERISAFE00:11:59Yes. Those are going to be good accident years for us. The 9.7% favorable development or not percent, dollars 9,700,000.0 of favorable development we had this quarter, 1,000,000 of it was from '22, '1 point '5 million was from '21, '1 point '6 million from 2020 and then 2019 and prior was 5,600,000.0. So we're obviously seeing even from the more green years, we're seeing favorable taste development come out of those exiting years. Mark HughesAnalyst at Truist Securities00:12:32Yes. And then maybe one more, the ceded premium was a little elevated in this quarter. I think it was a little higher in the fourth quarter of last year, but even compared to that, it's up year over year. If we think about, I guess, number one, why was that? And then number two, for 2025, should it be kind of back in the I see it as around 6% normally of gross premiums written? Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:13:06Mark, it's Andy. Good morning to you. So you're right, the session was a little bit higher. I think that's because of the growth that we saw in the quarter. And of course, in Q4, we always go back and make sure that if there's any true up needed, it's done. Anastasios OmiridisExecutive VP & CFO at AMERISAFE00:13:18But overall, it's really based on the growth that we're seeing in the policy count coming through voluntary deck. And just as far as 2025, I think it's fair to say that every quarter isn't linear. So I think the 6% you're saying is probably correct, but it's right around that number. Mark HughesAnalyst at Truist Securities00:13:38Yes. Okay. Very good. I had a couple more, but I'll jump back in the queue. Thank you. Janelle FrostPresident & CEO at AMERISAFE00:13:45Thank you, Mark. Operator00:13:53We'll now take a question from Matt Carletti with Citizens JMP. Matt CarlettiManaging Director at Citizens JMP00:13:59Thanks. Good morning. Janelle FrostPresident & CEO at AMERISAFE00:14:01Good morning, Matt. Matt CarlettiManaging Director at Citizens JMP00:14:03First question is, obviously talked a bit about what we've seen the voluntary growth really pick up kind of back half of the year. And I think we've talked a bit about how that's been pretty intentional kind of interacting with your agencies and trying to be easy to do business with. And one of the aspects you pointed to, I think it was last call, was kind of the idea of like getting them just to not think of you as like the roofing company and that you write other high hazard kind of class codes and things like that. Have you seen that in the growth that's come through that there is an expanded kind of maybe appetite by the agency and that in certain cases you might have been pigeonholed to a particular type of risk and that's broadening and that's driving the growth or is it something else? Janelle FrostPresident & CEO at AMERISAFE00:14:51One, it's a great question. We certainly have to your point really have been making sure our agency base understands, A, the value proposition of Amerisafe, particularly our safety and claims services and then, two, what our appetite is. So making sure that that is easily accessible to our agents, both through our TSMs and both through digital platforms as well. But basically, excuse me, getting our TSMs in front of agents, reiterating what do you have in your book, Mr. Agent, that fits in the mirror safe's risk appetite and give us an opportunity. Janelle FrostPresident & CEO at AMERISAFE00:15:28So the question to is that attributable to a growth? I would say yes. Could I put percentages around that? Probably no. But I will say this, we are trying to be sure that we are being more effective with the agents that we have appointed. Janelle FrostPresident & CEO at AMERISAFE00:15:44So increasing the percentage of our agents that are submitting business to us and more importantly increasing the number of agents that have a bind with us. Those are two numbers internally that we're really focused on. So driving home the appetite is part of that equation certainly. Matt CarlettiManaging Director at Citizens JMP00:16:02Okay, perfect. And then second question, kind of latter part of last year, couple of hurricanes came through areas in the country that you have a lot of business. Have you seen as any of I guess, has any of the growth we saw in Q4 kind of been a result of kind of that reconstruction, if you will? Or would you expect to see any of that maybe as we go forward? I know it can take time for that to come through. Janelle FrostPresident & CEO at AMERISAFE00:16:31Yes. You're right, Matt. It does take time. It certainly hasn't shown up an audit premium yet because obviously we haven't audited those policies that would have been affected during those time periods. We do look at the monthly reporting that our policyholders are sending into us and we've seen some a little bit of increase if I look at Florida, Georgia and the Carolinas, but nothing that I could point to and say, yes, that's definitely hurricane related business. Janelle FrostPresident & CEO at AMERISAFE00:16:59I think it's more normal course of business. So I don't know that I can quantify if any of that's particular to storms. Matt CarlettiManaging Director at Citizens JMP00:17:10Okay. Great. Thank you very much for the color. I appreciate it. Janelle FrostPresident & CEO at AMERISAFE00:17:13Thank you, Janelle FrostPresident & CEO at AMERISAFE00:17:17Matt. Operator00:17:20We'll now take a question from Bob Farnham with Janney. Robert FarnamManaging Director at Janney Montgomery Scott00:17:25Hey there, good morning. I'd just like to maybe expand a little bit on Matt's question about the kind of the expansion of your new business. And I just wanted to know, are you looking at adding additional class codes as you're expanding or are you really just focusing on stuff that you already write? Janelle FrostPresident & CEO at AMERISAFE00:17:47We are focusing on things that we already write. If I talk about it in terms of hazard groups, A to G, we specialize in E, F and G and still over 80% of our enforced policies are E, F and G. So even with our new business growth, that is our focus area. We haven't added necessarily classes of business. It's really about penetrating the markets that we're in and being more effective about that. Robert FarnamManaging Director at Janney Montgomery Scott00:18:13Right. Okay. That's what I thought. And just kind of a qualitative view on reserves. How much of your kind of open claim inventory is related to claims that are ten years or older? Robert FarnamManaging Director at Janney Montgomery Scott00:18:30I'm trying to get an idea of kind of how long claims can stay open and kind of what the average duration of your liabilities is kind of what I'm getting at. Janelle FrostPresident & CEO at AMERISAFE00:18:41Yeah. If I look at accident years and I'll use the same sort of the same accident years that we put in the 10 ks, you know, where we have '23, '20 '20 '2, it goes in this prior to 2019. Prior to 2019, I would say 99% of the claims that were reported to us are closed. So very small percentage of those are open. And some are open for there are some states that we can't technically close the claims just for medical reasons and so they're open for medical enrollment. Janelle FrostPresident & CEO at AMERISAFE00:19:10We're done with the indemnity portion of the claim. But yes, 99% of those claims, I would say are closed for those that would for that prior to 2019. Robert FarnamManaging Director at Janney Montgomery Scott00:19:20Okay. So it sounds like relative to the overall workers' comp industry, your claims closures seem to be more quick than maybe the average for the industry. Is that accurate? Janelle FrostPresident & CEO at AMERISAFE00:19:35I believe so. And I totally give the credit to my claims organization. It is definitely in the way that Amerisafe handles claims. We still use, we call it good old fashioned claims adjusting. We meet with people. Janelle FrostPresident & CEO at AMERISAFE00:19:49We take written statements. We manage those claims intensely and we keep those low inventories per the case manager. I can't stress that enough. I know that that is unique to Amerisafe. On average, across many field case managers, on average, they have less than 50 claims per adjuster. Janelle FrostPresident & CEO at AMERISAFE00:20:10When you think about that, they are really they really have the opportunity difference in these claims, know these claims and that's how we're able to close them and find resolutions, getting maximum medical improvement, return those injured workers to work as quickly as we can, because they have the opportunity and the means to which to close those claims. Robert FarnamManaging Director at Janney Montgomery Scott00:20:31Great. All right. Thanks for being interested in Operator00:20:42We'll now take a follow-up from Mark Hughes with Truist. Mark HughesAnalyst at Truist Securities00:20:46Yes, thanks. You talked about the payroll, one of the concepts that's come up from time to time is kind of that next job in construction. Do you have any view on the construction industry and the prospects there? Janelle FrostPresident & CEO at AMERISAFE00:21:03You know, Mark, I feel I mean, this is the world of court needs to know. But my opinion is that at least for our insured base, the economy seems to be supporting their work pretty well. I mean, we're still seeing strong payroll growth there. We are finding opportunities. We think about all the headlines that I read every day and we always contemplate how does that affect our book of business. Janelle FrostPresident & CEO at AMERISAFE00:21:28We think about tariffs and what that could mean to construction as a whole. I know people talk about steel and those types of things. Not that we are completely isolated from that, but you also think about small to mid sized employers. I do think we have some buffer around those types of impacts to the industry as a whole. So not immune, but made somewhat insulated, I would think. Janelle FrostPresident & CEO at AMERISAFE00:21:52Immigration is again a question that we've been asked about particularly regarding our construction and agriculture book. For Amerisafe, I don't have a way of quantifying from the premium side of things how many of our workers are non documented workers. But certainly, we know from a claims perspective, we do have injured workers that are non documented workers. But from a claims perspective, they are entitled to the same benefits every other worker is entitled to. So if I play that through in my mind, what happens for non documented workers, particularly in our construction book or our agriculture book, could it be influential to the labor force? Janelle FrostPresident & CEO at AMERISAFE00:22:35Perhaps. But again, these are small to mid sized employers. So even if it is influential in terms of maybe less resilient labor force, perhaps that also could lead to higher wages if those jobs are replaced with documented workers. So headline wise, those are the things I think about in terms of our industries, fans of the economy as it stands. But I mean, as of right now, obviously, things change every day. Janelle FrostPresident & CEO at AMERISAFE00:23:07But as of right now, I feel pretty strongly that our construction book and even our entire book is, has a bright future for 2025. Mark HughesAnalyst at Truist Securities00:23:17Yeah. How about the large claims for the year? Janelle FrostPresident & CEO at AMERISAFE00:23:22Yeah. So, you're going to laugh when I say this, Mark, but it's been a while since I've had to use this word, but it's lumpy. So we ended the year with 18 claims, over $1,000,000 And when you look comparatively to 2023, which was a record year in terms of a loan number, nine, is there I hearken back to my lumpy word. 'eighteen is not that unusual. If I look at the five year average of where we were at twelve months because obviously claims develop after an accident at the end of an accident year. Janelle FrostPresident & CEO at AMERISAFE00:23:55But if I look at the five year average at twelve months, we average around 15. So 2018 Janelle FrostPresident & CEO at AMERISAFE00:24:02is not too far off Janelle FrostPresident & CEO at AMERISAFE00:24:03of the average. But compared to 2023, that number certainly you look at and go, wow, that's a change. But when you look at the book as a whole, it's really not that much of a frequency of severity. It's just there were 18 claims. If I look at how they occurred or what industries they incurred in, it very much mirrors our book of business. Janelle FrostPresident & CEO at AMERISAFE00:24:22And even the types of injury have been are very consistent with what we've seen in terms of the types of injuries. Obviously falls and slips being the number one cause of loss for those larger claims and that's true for 2024. Mark HughesAnalyst at Truist Securities00:24:37Yes. Okay. And then anything on the medical inflation front, either from costs or ability to access certain services in case of lack of capacity because reimbursement rates are too low. Any changes there you've noted? Janelle FrostPresident & CEO at AMERISAFE00:24:58No real development other than what we've shared over the last couple of quarters. Home health is still probably the one I focus on the most simply because it's such a big component of our larger claims. Home health is a big component of those costs. So we certainly are paying attention to that. But nothing new other than those things. Janelle FrostPresident & CEO at AMERISAFE00:25:21In terms of reimbursement rate, no. We certainly are monitoring the loss costs or the rates that are being approved by the states and how that it could or could not be impactful. But it's been a wide range. If you look at the loss costs that have been approved for oneone or the ones that we know about for 2025 at this point, I think the high is a 19% decrease in Maine and the or the I say the high, the low, the decrease. And then the largest increase I think we've seen is 6.5% in Nevada. Janelle FrostPresident & CEO at AMERISAFE00:25:53But there's a wide range there in the loss costs that are being approved. So how medical costs will influence or how the reimbursement rates will influence that on a go forward basis, I guess time would tell. But I don't I can't see anything in those rate filings that were specific to medical fee schedules being adjusted to the degree that it was highlighted in the rate filing. I don't recall that. It's been more just experience. Mark HughesAnalyst at Truist Securities00:26:21Yes. Did you have you averaged up the rate filings if you look at the recent trend? Janelle FrostPresident & CEO at AMERISAFE00:26:28Yes. The average is a little Janelle FrostPresident & CEO at AMERISAFE00:26:28bit less than that. Janelle FrostPresident & CEO at AMERISAFE00:26:30Yes. I shouldn't I don't think I said this, but it's a decrease of and somewhere around the mid single digit range. Mark HughesAnalyst at Truist Securities00:26:38Yes. How is that how is that mid year or this time last year? Janelle FrostPresident & CEO at AMERISAFE00:26:45So for 2020 that's a good point. In 2023, we were a little we were sort of upper single digit, so more in the 8% to 9% depending I think we said somewhere in the range of 7% to 9%. Mark HughesAnalyst at Truist Securities00:26:59Yes. Janelle FrostPresident & CEO at AMERISAFE00:27:01So it's a still ever so slight improvement if you're trying to get me to give you great news about rates. There you go. Mark HughesAnalyst at Truist Securities00:27:07Hey, it's inflection. The trend Mark HughesAnalyst at Truist Securities00:27:09is right. Janelle FrostPresident & CEO at AMERISAFE00:27:11Yes. Janelle FrostPresident & CEO at AMERISAFE00:27:16Yes. Mark HughesAnalyst at Truist Securities00:27:16And then anything on the audit front? Is that, we're just kind of progressing through that earlier period of wage inflation? And so, as you do the audits on a look back, it's kind of naturally tapering. Is that a way to think about it? Mark HughesAnalyst at Truist Securities00:27:38Maybe that audits just naturally from a macro perspective, you'll see deceleration there? Janelle FrostPresident & CEO at AMERISAFE00:27:49Yes. I believe we'll see a deceleration or a moderation. I don't see again looking forward to 22.5% based on what I know today. I don't see audit premium turning negative. I think it still remains positive. Janelle FrostPresident & CEO at AMERISAFE00:28:03I think the new employee count still have been averaging between that 12% of the things that we've been seeing each quarter and then there's been wage inflation. I don't think there's I don't foresee that flipping to being negative, but certainly the year over year comparisons get tough are going to get tougher and tougher and there will be deceleration from that standpoint. But stand alone audit premium, I believe will still remain positive in 2025. Mark HughesAnalyst at Truist Securities00:28:33Yes. And then any instances of any competitors getting a more aggressive for workers' comp premium? It seems like you're holding your own and then some in terms of policy count and premium growth. So you wouldn't know it by looking at it in that sense, but I'm just sort of curious whether you've seen any changes. Janelle FrostPresident & CEO at AMERISAFE00:28:56It is very competitive, Mark. If that's a change, probably not. But as the other P and C lines have not yet rectified their issues in terms of overall results, workers' compensation remains attractive. And so as long as the combined ratios for the industry remain attractive, we will have competitors and we will have competitors dipping into the high hazard space. But that's a reality that we are prepared to face. Mark HughesAnalyst at Truist Securities00:29:31Yeah. Zipping into high hazard is probably a bad approach. Janelle FrostPresident & CEO at AMERISAFE00:29:38Well, yes, if you're asking me for advice, yes, I would say that, certainly. Mark HughesAnalyst at Truist Securities00:29:43That's super dangerous. You need to stay away. Janelle FrostPresident & CEO at AMERISAFE00:29:46Exactly. Mark HughesAnalyst at Truist Securities00:29:48Yeah. Any early thoughts on lost pick for 2025? Janelle FrostPresident & CEO at AMERISAFE00:29:54Yeah. I I as of right now, I believe we're gonna hold at seventy one. Mark HughesAnalyst at Truist Securities00:29:59Okay. Very good. Thank you for all the answers. Operator00:30:07And it appears there are no further telephone questions. I'd like to turn the conference back to Ms. Frost for any additional or closing comments. Janelle FrostPresident & CEO at AMERISAFE00:30:16Profitable incremental growth is the focus goal for the AMERISAFE team, one that we delivered on in 2024 and are well positioned for 2025. Thank you for joining us today. Operator00:30:29And once again, that does conclude today's conference. We thank you all for your participation. You may now disconnect.Read moreParticipantsExecutivesKathryn ShirleyExecutive VP, Chief Administrative Officer & SecretaryJanelle FrostPresident & CEOAnastasios OmiridisExecutive VP & CFOAnalystsMark HughesAnalyst at Truist SecuritiesMatt CarlettiManaging Director at Citizens JMPRobert FarnamManaging Director at Janney Montgomery ScottPowered by