Employers Q2 2026 Earnings Report

Employers EPS Results

• Actual EPS: $0.70
• Consensus EPS: $0.57
• Beat/Miss: Beat by +$0.13
• One Year Ago EPS: $0.48

Employers Revenue Results

• Actual Revenue: $220.20 million
• Expected Revenue: $203.51 million
• Beat/Miss: Beat by +$16.69 million
• YoY Revenue Growth: -10.60%

Employers Announcement Details

• Quarter: Q2 2026
• Date: 7/29/2026
• Time: After Market Closes
• Conference Call Date: Thursday, July 30, 2026
• Conference Call Time: 11:00AM ET

Employers (NYSE:EIG) Holdings, Inc. (NYSE: EIG) is a publicly traded property and casualty insurance holding company headquartered in Des Moines, Iowa. Through its subsidiaries, Employers Mutual Casualty Company and Employers Preferred Insurance Company, the firm specializes in providing workers’ compensation coverage alongside an array of commercial insurance products. Its service offerings include general liability, commercial auto, businessowners policies and umbrella coverages, tailored to meet the risk-management needs of small and mid-sized businesses across multiple industries.

The company markets its insurance solutions primarily through a network of independent agencies and brokers, leveraging local market expertise to underwrite policies that address the unique exposures faced by clients in manufacturing, construction, healthcare, retail and service sectors. In addition to core insurance products, Employers Holdings offers loss control services, claims administration and online risk-management tools designed to help policyholders minimize workplace accidents and manage costs effectively.

With roots dating back to 1913 when Iowa Employers Mutual was founded to serve local businesses, Employers Holdings converted into a stock-holder structure and began trading publicly in 2005. Since then, it has expanded its footprint beyond the Midwest, writing business in more than two dozen U.S. states. The company maintains regional offices to support its agent network and ensure responsive customer service. By combining a century-old heritage in workers’ compensation with modern underwriting practices and risk-control expertise, Employers Holdings aims to deliver financial stability and value to its policyholders over the long term.

Employers Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Per-share earnings growth accelerated: diluted EPS rose 29% year over year and adjusted EPS increased 46%, driven largely by accretive share repurchases following the recapitalization.
• Negative Sentiment: Gross premiums written fell 20% and net premiums earned declined 12%, while policies in force decreased 5%, as the company reduced business in less profitable segments and faced intense middle-market competition.
• Neutral Sentiment: Loss reserves for accident years 2025 and prior were unchanged, with the current accident-year loss and LAE ratio held at 72%; management remains cautious about uncertainty from cumulative-trauma claims, particularly in California.
• Positive Sentiment: The new excess workers’ compensation product gained early traction, generating $4 million from 20 policies bound in July, and the company is developing additional loss-sensitive products such as large deductible coverage.
• Positive Sentiment: Management plans to remain active in share repurchases, with $113 million of authorization remaining through the end of 2027, while a 6.6% California advisory rate increase and ongoing expense and AI initiatives could support future profitability.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Employers Holdings, Inc. earnings conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a Q&A session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jeff Lisenby, Executive Vice President, General Counsel. Please go ahead.

[Jeff Lisenby, EVP and General Counsel at Employers]

Thank you, Bonnie. Today's call is being recorded and webcast from the investors section of our website, where a replay will be available following the call. Statements made during this conference call that are not based on historical facts are considered forward-looking statements. These statements are made in reliance on the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Although we believe the expectations expressed in our forward-looking statements are reasonable, risks and uncertainties could cause actual results to be materially different from our expectations, including the risks set forth in our filings with the Securities and Exchange Commission. All remarks made during the call are current only at the time of the call and will not be updated to reflect subsequent developments.

[Jeff Lisenby, EVP and General Counsel at Employers]

The company also uses its website as a means of disclosing material non-public information and for complying with disclosure obligations under the SEC's Regulation FD. Such disclosures will be included in the investors section of our website. Accordingly, investors should monitor that portion of our website in addition to following our press releases, SEC filings, public conference calls, and webcasts. In our earnings press release and in our remarks or responses to questions, we may use non-GAAP financial measures. Reconciliations of these non-GAAP measures to our GAAP results are included in our financial supplement as an attachment to our earnings press release, our investor presentation, and any other materials available in the investor section of our website. Now I will turn the call over to Kathy Antonello, our Chief Executive Officer.

[Kathy Antonello, CEO at Employers]

Thank you, Jeff. Good morning, everyone, and welcome to our second quarter 2026 earnings call. Joining me today is Mike Pedraja, our Chief Financial Officer. Attracting and retaining high quality executives and directors is always an important priority for us. And we're pleased to welcome Stephanie Bush to our board of directors and Jeff Lisenby, who you just heard from, as our new general counsel. I am confident that both Stephanie and Jeff will make meaningful contributions to our organization. As usual, I will begin by providing highlights of our second quarter 2026 financial results, and then hand it over to Mike for more details on our financials. Before Q&A, I'll come back to you with some additional thoughts. If I had to sum up the second quarter, I'd say it's the quarter where the benefits of our recapitalization became fully visible.

[Kathy Antonello, CEO at Employers]

Diluted earnings per share grew 29% year-over-year, and adjusted earnings per share grew 46%, even though net income was essentially flat. The gap between net income and per share growth is the direct compounding benefit of the accretive share repurchases we've executed since undertaking the recapitalization. On the underwriting side, our net premium earned declined 12% year-over-year, while policies in force declined 5%. These amounts reflect the pricing and underwriting actions we've put in place to prioritize profitability over volume. Most of the decreases were directly related to the customer segments and geographies we targeted as part of our plan to concentrate on our core small business segment. We're currently focused on building new sources of growth, and in June, we wrote our first excess workers compensation policy, marking the successful launch of our new product line.

[Kathy Antonello, CEO at Employers]

The success of this new product continued in July with over 200 policy submissions and 20 policies bound, producing $4 million in premium. It's a new lever for growth and one that complements our core book. Our second quarter actuarial review came in as expected. As a result, we made no change to loss reserves for accident years 2025 and prior. We also maintained our current accident year loss and LAE ratio, excluding the LPT on voluntary business at 72%, which is consistent with the full year 2025 accident year ratio. Our underwriting expenses declined to $40 million from $43 million a year ago, driven by our continued focus on innovation and a reduction in variable expenses.

[Kathy Antonello, CEO at Employers]

Net investment income was $27 million, up 1% year-over-year, aided by a 40 basis point increase in our book yields, which was a result of the investment rebalancing we executed last year. We are laser focused on expanding our book value per share. With dividends, our book value per share, including the deferred gain, grew 9% year-over-year to $52.58. With that, Mike will now provide a deeper dive into our second quarter financial results, and then I'll return to provide my closing remarks. Mike?

[Mike Pedraja, CFO at Employers]

Thank you, Kathy. Gross premiums written were $163 million compared to $203 million for the prior year quarter, a decrease of 20%, due primarily to a decrease in new and renewal business writings. These decreases were partially offset by an increase in our ending final audit premium accrual and a $2.5 million premium restitution from a former policyholder. Our losses in LAE were at $122 million versus $140 million a year ago. The current quarter did not include any prior period losses or development on our voluntary business, and the current accident year loss in LAE ratio, 72%, is consistent with the full year 2025 accident year ratio. The $2.5 million premium restitution reduced our second quarter combined ratio by approximately 1.5 percentage points.

[Mike Pedraja, CFO at Employers]

Commission expense was $22 million for the quarter versus $26 million for the prior year, driven by lower agency incentive accruals and a lower proportion of new business premium, which carries a higher commission rate. Underwriting expenses were $40 million for the quarter versus $43 million for the prior year, a decrease of 8%. The improvement in underwriting expenses for the second quarter was due primarily to our continued expense management efforts, including reduced personal costs, policyholder dividends, and bad debt expense. Our second quarter net investment income of $27 million was essentially flat year-over-year. Our fixed maturities maintain a modified duration of 4.5 with a strong average credit quality of A-plus. Aided by an investment rebalancing that Kathy mentioned, our weighted average book yield was 4.9% at quarter end, compared to 4.5% for the prior year, a 40 basis point improvement.

[Mike Pedraja, CFO at Employers]

Our adjusted net income, which excludes net realized and unrealized investment gains and losses and the benefit of our LPT deferred gain amortization, was $13 million for the quarter, compared to $12 million last year. We remain committed to being good stewards of our shareholders' capital. During the second quarter, we repurchased 651,752 shares of our common stock at an average price of $42.43 per share, or $28 million. The average repurchase price represented a 17% discount to our beginning book value per share, including the deferred gain, and an 18% discount to our beginning adjusted book value per share. With that, I'll turn the call back to Kathy.

[Kathy Antonello, CEO at Employers]

Thank you, Mike. Yesterday, our Board of Directors declared a third quarter 2026 dividend of $0.34 per share, consistent with the 6.25% increase we implemented last quarter. In addition to executing our underwriting strategy, we continue to make progress in our technology initiatives, including a major claims system upgrade, a new customer relationship management system, and the continued rollout of our AI tools. During the quarter, we achieved a 94% AI staff adoption rate and implemented several AI-assisted use cases with meaningful tangible ROIs. As the guaranteed cost workers' compensation market softened, our focus turned to building our excess product. We are now turning our attention to rounding out our workers' compensation offerings with other loss-sensitive products, including large deductible. We also see opportunities to leverage our prior success and expand our appetite further.

[Kathy Antonello, CEO at Employers]

We are confident these new offerings will diversify our book, provide optionality during market cycles, and increase new business. We step into the second half of 2026 with genuine momentum at our backs. Our new business pipeline is accelerating, our renewal book continues to perform as designed, and our underwriting discipline remains solid. The California Insurance Commissioner's approval of a 6.6% advisory pure premium rate increase, effective September 1st, provides a significant opportunity for improved results in our largest market. Employers remains well-capitalized, well-positioned, and firmly focused on our North Star, which is delivering profitable, sustainable growth for our shareholders. With that, Bonnie, we will now take questions.

[Operator]

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Mark Hughes with Truist. Your line is open.

[Mark Hughes, Analyst at Truist]

Yeah. Thank you. Good morning.

[Kathy Antonello, CEO at Employers]

Good morning, Mark.

[Mark Hughes, Analyst at Truist]

Kathy, you mentioned the 6.6% rate increase. What's your experience? Do you think carriers will follow that? Assuming you take the 6.6%, what will that mean in terms of your overall pricing, all in with other pricing actions for you in California?

[Kathy Antonello, CEO at Employers]

Yeah. If we're talking specifically about California, we do internally feel like we've been ahead of the curve in terms of rate adequacy in the state. The increase that the bureau filed and the Commissioner approved, not the entire increase, but some of it, we feel like we already had that baked into our rates. We feel like we were ahead of the curve on that, I would say. I would not expect it to impact our books significantly. We're feeling good about where we are positioned in California. I can't speak to where other carriers are, but I think the Commissioner has done a nice job of laying out the issues in the state that need to be addressed, and we're hopeful that there will continue to be a lot of focus on those areas where reform could help.

[Kathy Antonello, CEO at Employers]

We feel like we're well positioned in terms of our rate adequacy in the state. Overall, countrywide, just to give you a view of the landscape in terms of rates there, payrolls have been relatively flat, up about a half a percent. We've achieved overall, across the country, about a 5% increase in our rates when you look at our renewal book year-over-year.

[Mark Hughes, Analyst at Truist]

Very good. How would you characterize the competition? I think you had talked about kind of expecting mid-teen declines. The dip was just a little bit faster. Did you see more competition in the quarter, and what was the nature of that? Workers' comp specialists, package writers? How would you describe it?

[Kathy Antonello, CEO at Employers]

Yeah. Package writers have always been an area of fierce competition because of the optionality that they have. We are seeing most of the competition in the middle market space, to the point where we're just turning away when we don't feel like we can get the margins that we need. I would say, there's definitely some irrational behavior going on in certain jurisdictions, but we're working hard to find those areas where we can continue to grow. In our release, and the prepared remarks, we talked about how our premium is down, but the number of policies is down not near to the same extent, and that's because of the competition that we're seeing in the middle market.

[Mark Hughes, Analyst at Truist]

Yeah. In thinking about your reserves, I think some slight favorable development this quarter, relative to the industry as a whole, I think you're still seeing meaningful reserve releases, though at a bit slower pace these days. When you think about your book, is it maybe just some care or concern around CT claims, therefore you're kind of holding the line to protect the balance sheet? Is there something about your book that may be different than what we're seeing more broadly, which is still redundancy, still reserve releases?

[Kathy Antonello, CEO at Employers]

Yeah, I think you're spot on. Every book of business is different. We have a higher weight in California than countrywide. When you mentioned CT, yes, we're trying to remain conservative, remain cautious, and protect the balance sheet, exactly like you said. The more recent years, which is where we've seen the cumulative trauma claims come through, there's just more uncertainty in those years, and we're just being ultra cautious there. We're continuing to see favorable development emerge in the older accident years, just as we would expect.

[Mark Hughes, Analyst at Truist]

Yeah. Okay. The excess workers' comp, that $4 million number, was that June?

[Kathy Antonello, CEO at Employers]

That was July. July to date. We did write one policy in June, we were getting you up to date for what we have done month to date.

[Mark Hughes, Analyst at Truist]

Yeah. That seems like pretty good start. How do you feel about that? It seems like that could be a decent contributor even if you kept up that pace.

[Kathy Antonello, CEO at Employers]

Yeah, I would agree. I would add that July 1, for the segments that we're targeting, municipalities, schools, and so forth, July 1 is a big renewal day. That's why we targeted that as our launch. I wouldn't expect that same amount every month going forward, but we're seeing a very strong submission flow and a lot of interest from the brokers. It's exciting to watch, and we look forward to seeing the growth there.

[Mark Hughes, Analyst at Truist]

Yeah. I'll ask just one more. The share repurchase appetite at this point, how do we think about that?

[Mike Pedraja, CFO at Employers]

Yeah, Mark, we have a very strong view of our intrinsic value, and that intrinsic value is above the current stock price. We do believe in being very prudent purchasers of our shares. As you know, we have $113 million of additional capacity left, we think we'll be continued active repurchasers. Obviously, we're going to do it on a prudent basis, and we'll use the return on investment as our guidepost to focus on those purchases.

[Mark Hughes, Analyst at Truist]

Okay. $113 million, would that be kind of 12 months or through the end of next year?

[Mike Pedraja, CFO at Employers]

Yeah, through the end of next year. The program we implemented was $125 million through the end of 2027. We have $113 million left.

[Mark Hughes, Analyst at Truist]

Okay. That seems like reasonable pacing, sounds like?

[Mike Pedraja, CFO at Employers]

It all depends. To be candid, if the market opportunity has the stock down, we will accelerate those repurchases.

[Mark Hughes, Analyst at Truist]

Yeah. Okay. Thank you very much.

[Mike Pedraja, CFO at Employers]

Great.

[Operator]

Thank you. Thank you. Our next question comes from the line of Karol Chmiel with Citizens Bank. You're up.

[Karol Chmiel, Analyst at Citizens Bank]

Yeah. Hi, good morning. Thank you for taking my questions. I just got two questions. First one is just a general, your viewpoint on the whole re-underwriting of some of the policies due to the CT phenomenon. Would you categorize it as being more than 50% done in terms of re-underwriting those risks?

[Kathy Antonello, CEO at Employers]

Yes, I would characterize it as more than 50% done. We started this at the tail end of 2025. I think that's an accurate way to view it.

[Karol Chmiel, Analyst at Citizens Bank]

Great. Thank you. Just to follow up on the repurchases, do you have anything you want to share regarding your repurchases in Q3?

[Mike Pedraja, CFO at Employers]

As far as to date?

[Karol Chmiel, Analyst at Citizens Bank]

As far as if you've used the authorization to repurchase any shares. Yeah.

[Mike Pedraja, CFO at Employers]

Yeah, no, like I said, we're eager, and we're very focused on being prudent capital monitors for our shareholders, and we continue to watch the stock, and so we're active repurchasers. The fluctuation will depend simply on how the stock performs. As I mentioned too, just to Mark, if the stock drops, we will accelerate the level of repurchases.

[Karol Chmiel, Analyst at Citizens Bank]

Understood. Thank you so much. That's all.

[Mike Pedraja, CFO at Employers]

Thank you.

[Operator]

I'm showing no further questions at this time. I would now like to turn it back to Kathy Antonello for closing remarks.

[Kathy Antonello, CEO at Employers]

I think we might have a follow-up question in the queue.

[Operator]

I do see that. Thanks. We have Mark Hughes with a follow-up question.

[Mark Hughes, Analyst at Truist]

Hey, right on time. Anything, Kathy, from a medical inflation standpoint? Kind of the CT issue to the side, underlying inflation trends, medical inflation, frequency, severity, what's the latest vibe on that?

[Kathy Antonello, CEO at Employers]

Yeah, inflation generally as it's impacting the workers' compensation environment is quite benign. We're not seeing anything that's alarming. We haven't seen anything that has emerged from the tariffs or their impact on medical prices. We internally, as you're aware, have a prescription drug index that we monitor on a quarterly basis. We're not seeing anything there that is concerning to us, and it seems like we are in lockstep with the rest of the industry. NCCI just published a new economic study on medical inflation. I think it just came out last week, and they had a similar result in their study in their medical inflation index that they track. Seems to be pretty calm right now.

[Mark Hughes, Analyst at Truist]

Yeah. Any more on AI? You described some good use cases. Anything around the budget in order to implement AI? I think you've done really well on expenses. Mike, I think you've kind of intimated that the expense discipline should continue. Just wonder whether there's anything you would highlight there, either from a customer service, customer acquisition, internal efficiency. Would be interested in any more thoughts.

[Kathy Antonello, CEO at Employers]

Yeah. We do feel like AI is helping us from an efficiency standpoint. We're very focused on the cost of AI and as many of the models turn from license-based to usage-based fees, how we're going to manage that internally, and we think we have a good plan for that. We're seeing a lot of use cases. I mentioned in my prepared remarks, the vast majority of our organization is utilizing AI. We're pushing out tools to help with productivity in almost every area of the company. We're really excited about the momentum we're seeing there. I fully expect that we'll be building out our large deductible product, utilizing AI exactly the same way that we built our excess workers' compensation product. We're true believers, and it's exciting to watch all the success that we're having from it.

[Mark Hughes, Analyst at Truist]

Very good. Thank you.

[Kathy Antonello, CEO at Employers]

Thank you.

[Operator]

Excellent. This concludes the question-and-answer session. I would now like to turn it back to Kathy Antonello for closing remarks.

[Kathy Antonello, CEO at Employers]

Okay. Thank you, Bonnie. Thank you all for joining us this morning, we look forward to meeting with you again in October.

[Operator]

Thank you for today's participation in this conference. This does conclude the program. You may now disconnect.

Participants

Executives

• Jeff Lisenby, EVP and General Counsel
• Kathy Antonello, CEO
• Mike Pedraja, CFO

Analysts

• Mark Hughes, Analyst at Truist
• Karol Chmiel, Analyst at Citizens Bank