Nevada | |||||||||||
(State or Other Jurisdiction of Incorporation) | |||||||||||
001-33245 | 04-3850065 | ||||||||||
(Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||
2340 Corporate Circle, Suite 200 | |||||||||||
Henderson, | Nevada | ||||||||||
(Address of Principal Executive Offices) | |||||||||||
89074 | |||||||||||
(Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Stock, $0.01 par value per share | EIG | New York Stock Exchange |
EMPLOYERS HOLDINGS, INC. |
||||||||
Dated: | October 25, 2023 |
/s/ Michael S. Paquette | ||||||
Michael S. Paquette | ||||||||
Executive Vice President, | ||||||||
Chief Financial Officer |
Exhibit No. | Exhibit | |||||||
99.1 | October 25, 2023 |
|||||||
99.2 | October 25, 2023 |
Page | ||||||||
Consolidated Financial Highlights | ||||||||
Summary Consolidated Balance Sheets | ||||||||
Summary Consolidated Income Statements | ||||||||
Net Income (Loss) Before Income Taxes by Segment | ||||||||
Return on Equity | ||||||||
Roll-forward of Unpaid Losses and LAE | ||||||||
Consolidated Investment Portfolio | ||||||||
Book Value Per Share | ||||||||
Earnings Per Share | ||||||||
Non-GAAP Financial Measures | ||||||||
Description of Reportable Segments |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||||||||||||||
2023 | 2022 | % change | 2023 | 2022 | % change | |||||||||||||||||||||||||||||||||
Selected financial highlights: | ||||||||||||||||||||||||||||||||||||||
Gross premiums written | $ | 196.2 | $ | 188.6 | 4 | % | $ | 589.5 | $ | 540.4 | 9 | % | ||||||||||||||||||||||||||
Net premiums written | 194.5 | 186.8 | 4 | 584.2 | 535.3 | 9 | ||||||||||||||||||||||||||||||||
Net premiums earned | 184.6 | 178.7 | 3 | 534.4 | 494.1 | 8 | ||||||||||||||||||||||||||||||||
Net investment income | 25.9 | 23.7 | 9 | 80.3 | 62.8 | 28 | ||||||||||||||||||||||||||||||||
Net income (loss) before impact of the LPT(1) |
12.1 | 17.0 | (29) | 66.6 | (5.0) | n/m | ||||||||||||||||||||||||||||||||
Adjusted net income(1) |
17.7 | 15.5 | 14 | 65.6 | 46.7 | 40 | ||||||||||||||||||||||||||||||||
Net income (loss) before income taxes | 17.4 | 23.8 | (27) | 90.3 | (0.1) | n/m | ||||||||||||||||||||||||||||||||
Net Income | 14.0 | 19.1 | (27) | 72.5 | 1.3 | n/m | ||||||||||||||||||||||||||||||||
Total Comprehensive (loss) income | (12.1) | (45.1) | 73 | 54.8 | (218.2) | 125 | ||||||||||||||||||||||||||||||||
Total assets | 3,527.0 | 3,708.7 | (5) | |||||||||||||||||||||||||||||||||||
Stockholders' equity | 919.0 | 919.0 | — | |||||||||||||||||||||||||||||||||||
Stockholders' equity including the Deferred Gain(2) |
1,019.2 | 1,027.1 | (1) | |||||||||||||||||||||||||||||||||||
Adjusted stockholders' equity(2) |
1,175.8 | 1,186.0 | (1) | |||||||||||||||||||||||||||||||||||
Annualized adjusted return on stockholders' equity(3) |
6.0 | % | 5.2 | % | 15 | % | 7.4 | % | 5.1 | % | 45 | % | ||||||||||||||||||||||||||
Amounts per share: | ||||||||||||||||||||||||||||||||||||||
Cash dividends declared per share | $ | 0.28 | $ | 0.26 | 8 | % | $ | 0.82 | $ | 1.77 | (54) | % | ||||||||||||||||||||||||||
Earnings per diluted share(4) |
0.54 | 0.70 | (23) | 2.71 | 0.05 | n/m | ||||||||||||||||||||||||||||||||
Earnings (loss) per diluted share before impact of the LPT(4) |
0.46 | 0.62 | (26) | 2.49 | (0.18) | n/m | ||||||||||||||||||||||||||||||||
Adjusted earnings per diluted share(4) |
0.68 | 0.56 | 21 | 2.45 | 1.69 | 45 | ||||||||||||||||||||||||||||||||
Book value per share(2) |
35.73 | 33.79 | 6 | |||||||||||||||||||||||||||||||||||
Book value per share including the Deferred Gain(2) |
39.63 | 37.77 | 5 | |||||||||||||||||||||||||||||||||||
Adjusted book value per share(2) |
45.72 | 43.61 | 5 | |||||||||||||||||||||||||||||||||||
Financial information by Segment(5): |
||||||||||||||||||||||||||||||||||||||
Net income (loss) before income taxes | ||||||||||||||||||||||||||||||||||||||
Employers | $ | 20.8 | $ | 26.1 | (20) | % | $ | 97.5 | $ | 16.5 | 491 | |||||||||||||||||||||||||||
Cerity | (1.9) | (2.4) | 21 | (5.7) | (8.2) | 30 | ||||||||||||||||||||||||||||||||
Corporate and Other | (1.5) | 0.1 | n/m | (1.5) | (8.4) | 82 | ||||||||||||||||||||||||||||||||
n/m - not meaningful | ||||||||||||||||||||||||||||||||||||||
(1) See Page 3 for calculations and Page 13 for information regarding our use of Non-GAAP Financial Measures. | ||||||||||||||||||||||||||||||||||||||
(2) See Page 11 for calculations and Page 13 for information regarding our use of Non-GAAP Financial Measures. | ||||||||||||||||||||||||||||||||||||||
(3) See Page 8 for calculations and Page 13 for information regarding our use of Non-GAAP Financial Measures. | ||||||||||||||||||||||||||||||||||||||
(4) See Page 12 for description and calculations and Page 13 for information regarding our use of Non-GAAP Financial Measures. | ||||||||||||||||||||||||||||||||||||||
(5) See Pages 4-7 for details and Page 14 for a description of our reportable segments. | ||||||||||||||||||||||||||||||||||||||
September 30, 2023 |
December 31, 2022 |
|||||||||||||
ASSETS | ||||||||||||||
Investments, cash and cash equivalents | $ | 2,442.9 | $ | 2,658.2 | ||||||||||
Accrued investment income | 18.5 | 19.0 | ||||||||||||
Premiums receivable, net |
363.3 | 305.9 | ||||||||||||
Reinsurance recoverable, net of allowance, on paid and unpaid losses and LAE | 437.2 | 451.3 | ||||||||||||
Deferred policy acquisition costs | 57.1 | 48.3 | ||||||||||||
Deferred income tax asset, net | 64.2 | 62.7 | ||||||||||||
Contingent commission receivable—LPT Agreement | 13.9 | 13.9 | ||||||||||||
Other assets | 129.9 | 157.4 | ||||||||||||
Total assets | $ | 3,527.0 | $ | 3,716.7 | ||||||||||
LIABILITIES | ||||||||||||||
Unpaid losses and LAE | $ | 1,913.4 | $ | 1,960.7 | ||||||||||
Unearned premiums | 387.0 | 339.5 | ||||||||||||
Commissions and premium taxes payable | 62.8 | 58.2 | ||||||||||||
Deferred Gain | 100.2 | 106.1 | ||||||||||||
FHLB Advances(1) |
40.4 | 182.5 | ||||||||||||
Other liabilities | 104.2 | 125.5 | ||||||||||||
Total liabilities | $ | 2,608.0 | $ | 2,772.5 | ||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||||
Common stock and additional paid-in capital | $ | 418.8 | $ | 415.2 | ||||||||||
Retained earnings | 1,346.1 | 1,295.6 | ||||||||||||
Accumulated other comprehensive loss | (156.6) | (138.9) | ||||||||||||
Treasury stock, at cost |
(689.3) | (627.7) | ||||||||||||
Total stockholders’ equity | 919.0 | 944.2 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 3,527.0 | $ | 3,716.7 | ||||||||||
Stockholders' equity including the Deferred Gain (2) |
$ | 1,019.2 | $ | 1,050.3 | ||||||||||
Adjusted stockholders' equity (2) |
1,175.8 | 1,189.2 | ||||||||||||
Book value per share (2) |
$ | 35.73 | $ | 34.76 | ||||||||||
Book value per share including the Deferred Gain(2) |
39.63 | 38.67 | ||||||||||||
Adjusted book value per share (2) |
45.72 | 43.78 | ||||||||||||
(1) FHLB=Federal Home Loan Bank | ||||||||||||||
(2) See Page 11 for calculations and Page 13 for information regarding our use of Non-GAAP Financial Measures. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Net premiums earned | $ | 184.6 | $ | 178.7 | $ | 534.4 | $ | 494.1 | |||||||||||||||
Net investment income | 25.9 | 23.7 | 80.3 | 62.8 | |||||||||||||||||||
Net realized and unrealized gains (losses) on investments(1) |
(7.1) | 1.9 | 10.7 | (65.5) | |||||||||||||||||||
Other income (loss) | 0.1 | 0.1 | (0.2) | 0.3 | |||||||||||||||||||
Total revenues | 203.5 | 204.4 | 625.2 | 491.7 | |||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Losses and LAE incurred | (114.9) | (112.3) | (312.8) | (299.7) | |||||||||||||||||||
Commission expense | (26.7) | (25.3) | (73.8) | (69.9) | |||||||||||||||||||
Underwriting and general and administrative expenses | (43.5) | (41.9) | (133.7) | (120.6) | |||||||||||||||||||
Interest and financing expenses | (1.0) | (1.1) | (5.2) | (1.6) | |||||||||||||||||||
Other expenses | — | — | (9.4) | — | |||||||||||||||||||
Total expenses | (186.1) | (180.6) | (534.9) | (491.8) | |||||||||||||||||||
Net income (loss) before income taxes | 17.4 | 23.8 | 90.3 | (0.1) | |||||||||||||||||||
Income tax (expense) benefit | (3.4) | (4.7) | (17.8) | 1.4 | |||||||||||||||||||
Net Income | 14.0 | 19.1 | 72.5 | 1.3 | |||||||||||||||||||
Unrealized AFS investment losses arising during the period, net of tax(2) |
(27.0) | (60.3) | (20.0) | (222.2) | |||||||||||||||||||
Reclassification adjustment for net realized AFS investment losses (gains) in net income,
net of tax(2)
|
0.9 | (3.9) | 2.3 | 2.7 | |||||||||||||||||||
Total comprehensive (loss) income |
$ | (12.1) | $ | (45.1) | $ | 54.8 | $ | (218.2) | |||||||||||||||
Net Income | $ | 14.0 | $ | 19.1 | $ | 72.5 | $ | 1.3 | |||||||||||||||
Amortization of the Deferred Gain - losses | (1.5) | (1.7) | (4.7) | (5.1) | |||||||||||||||||||
Amortization of the Deferred Gain - contingent commission | (0.4) | (0.4) | (1.2) | (1.2) | |||||||||||||||||||
Net income (loss) before impact of the LPT Agreement (3) |
12.1 | 17.0 | 66.6 | (5.0) | |||||||||||||||||||
Net realized and unrealized losses (gains) on investments |
7.1 | (1.9) | (10.7) | 65.5 | |||||||||||||||||||
Lease termination and asset impairment charges | — | — | 9.4 | — | |||||||||||||||||||
Income tax expense (benefit) related to items excluded from Net income or loss |
(1.5) | 0.4 | 0.3 | (13.8) | |||||||||||||||||||
Adjusted net income | $ | 17.7 | $ | 15.5 | $ | 65.6 | $ | 46.7 | |||||||||||||||
(1) Includes net realized and unrealized (losses) gains on equity securities and other investments of $(5.9) million and $(3.1) million for the three months ended September 30, 2023 and 2022, respectively, and $13.6 million and $(62.1) million for the nine months ended September 30, 2023 and 2022, respectively. | |||||||||||||||||||||||
(2) AFS = Available for Sale securities. | |||||||||||||||||||||||
(3) See Page 13 regarding our use of Non-GAAP Financial Measures. |
Employers | Cerity | Corporate and Other | Consolidated | |||||||||||||||||||||||
Three Months Ended September 30, 2023 | ||||||||||||||||||||||||||
Gross premiums written | $ | 194.0 | $ | 2.2 | $ | — | $ | 196.2 | ||||||||||||||||||
Net premiums written | 192.3 | 2.2 | — | 194.5 | ||||||||||||||||||||||
Net premiums earned | A | 182.7 | 1.9 | — | 184.6 | |||||||||||||||||||||
Net investment income | 23.4 | 1.6 | 0.9 | 25.9 | ||||||||||||||||||||||
Net realized and unrealized losses on investments |
(5.9) | (0.4) | (0.8) | (7.1) | ||||||||||||||||||||||
Other income | 0.1 | — | — | 0.1 | ||||||||||||||||||||||
Total revenues | 200.3 | 3.1 | 0.1 | 203.5 | ||||||||||||||||||||||
Losses and LAE incurred (2) |
B | (115.5) | (1.3) | 1.9 | (114.9) | |||||||||||||||||||||
Commission expense | C | (26.6) | (0.1) | — | (26.7) | |||||||||||||||||||||
Underwriting and general and administrative expenses | D | (36.5) | (3.6) | (3.4) | (43.5) | |||||||||||||||||||||
Interest and financing expenses | (0.9) | — | (0.1) | (1.0) | ||||||||||||||||||||||
Other expenses | — | — | — | — | ||||||||||||||||||||||
Total expenses | (179.5) | (5.0) | (1.6) | (186.1) | ||||||||||||||||||||||
Net income (loss) before income taxes | $ | 20.8 | $ | (1.9) | $ | (1.5) | $ | 17.4 | ||||||||||||||||||
Underwriting income (loss) | A+B+C+D | 4.1 | (3.1) | |||||||||||||||||||||||
Loss and LAE expense ratio: | ||||||||||||||||||||||||||
Current year | 63.3 | % | n/m | |||||||||||||||||||||||
Prior years | (0.1) | — | ||||||||||||||||||||||||
Loss and LAE ratio | 63.2 | n/m | ||||||||||||||||||||||||
Commission expense ratio | 14.6 | n/m | ||||||||||||||||||||||||
Underwriting expense ratio | 20.0 | n/m | ||||||||||||||||||||||||
Combined ratio | 97.8 | % | n/m | |||||||||||||||||||||||
n/m - not meaningful | ||||||||||||||||||||||||||
(1) See Page 14 for a description of our reportable segments | ||||||||||||||||||||||||||
(2) Losses and LAE in Corporate and Other represent the impact of the LPT Agreement |
Employers | Cerity | Corporate and Other | Consolidated | |||||||||||||||||||||||
Three Months Ended September 30, 2022 | ||||||||||||||||||||||||||
Gross premiums written | $ | 187.1 | $ | 1.5 | $ | — | $ | 188.6 | ||||||||||||||||||
Net premiums written | 185.3 | 1.5 | — | 186.8 | ||||||||||||||||||||||
Net premiums earned | A | 177.9 | 0.8 | — | 178.7 | |||||||||||||||||||||
Net investment income | 21.4 | 1.2 | 1.1 | 23.7 | ||||||||||||||||||||||
Net realized and unrealized gains (losses) on investments |
2.4 | (0.3) | (0.2) | 1.9 | ||||||||||||||||||||||
Other income | 0.1 | — | — | 0.1 | ||||||||||||||||||||||
Total revenues | 201.8 | 1.7 | 0.9 | 204.4 | ||||||||||||||||||||||
Losses and LAE incurred (2) |
B | (113.8) | (0.6) | 2.1 | (112.3) | |||||||||||||||||||||
Commission expense | C | (25.2) | (0.1) | — | (25.3) | |||||||||||||||||||||
Underwriting and general and administrative expenses | D | (35.7) | (3.4) | (2.8) | (41.9) | |||||||||||||||||||||
Interest and financing expenses | (1.0) | — | (0.1) | (1.1) | ||||||||||||||||||||||
Total expenses | (175.7) | (4.1) | (0.8) | (180.6) | ||||||||||||||||||||||
Net income (loss) before income taxes |
$ | 26.1 | $ | (2.4) | $ | 0.1 | $ | 23.8 | ||||||||||||||||||
Underwriting income (loss) | A+B+C+D | $ | 3.2 | $ | (3.3) | |||||||||||||||||||||
Loss and LAE expense ratio: | ||||||||||||||||||||||||||
Current year | 64.1 | % | n/m | |||||||||||||||||||||||
Prior years | (0.1) | — | ||||||||||||||||||||||||
Loss and LAE ratio | 64.0 | n/m | ||||||||||||||||||||||||
Commission expense ratio | 14.2 | n/m | ||||||||||||||||||||||||
Underwriting expense ratio | 20.1 | n/m | ||||||||||||||||||||||||
Combined ratio | 98.3 | % | n/m | |||||||||||||||||||||||
n/m - not meaningful | ||||||||||||||||||||||||||
(1) See Page 14 for a description of our reportable segments | ||||||||||||||||||||||||||
(2) Losses and LAE in Corporate and Other represent the impact of the LPT Agreement |
Employers | Cerity | Corporate and Other | Consolidated | |||||||||||||||||||||||
Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||
Gross premiums written | $ | 584.4 | $ | 5.1 | $ | — | $ | 589.5 | ||||||||||||||||||
Net premiums written | 579.1 | 5.1 | — | 584.2 | ||||||||||||||||||||||
Net premiums earned | A | 529.5 | 4.9 | — | 534.4 | |||||||||||||||||||||
Net investment income | 72.3 | 5.0 | 3.0 | 80.3 | ||||||||||||||||||||||
Net realized and unrealized gains (losses) on investments |
11.1 | (0.2) | (0.2) | 10.7 | ||||||||||||||||||||||
Other (loss) income | (0.2) | — | — | (0.2) | ||||||||||||||||||||||
Total revenues | 612.7 | 9.7 | 2.8 | 625.2 | ||||||||||||||||||||||
Losses and LAE incurred (2) |
B | (315.5) | (3.2) | 5.9 | (312.8) | |||||||||||||||||||||
Commission expense | C | (73.6) | (0.2) | — | (73.8) | |||||||||||||||||||||
Underwriting and general and administrative expenses | D | (111.8) | (12.0) | (9.9) | (133.7) | |||||||||||||||||||||
Interest and financing expenses | (4.9) | — | (0.3) | (5.2) | ||||||||||||||||||||||
Other expenses | (9.4) | — | — | (9.4) | ||||||||||||||||||||||
Total expenses | (515.2) | (15.4) | (4.3) | (534.9) | ||||||||||||||||||||||
Net income (loss) before income taxes | $ | 97.5 | $ | (5.7) | $ | (1.5) | $ | 90.3 | ||||||||||||||||||
Underwriting income (loss) | A+B+C+D | 28.6 | (10.5) | |||||||||||||||||||||||
Loss and LAE expense ratio: | ||||||||||||||||||||||||||
Current year | 63.4 | % | n/m | |||||||||||||||||||||||
Prior years | (3.8) | — | ||||||||||||||||||||||||
Loss and LAE ratio | 59.6 | n/m | ||||||||||||||||||||||||
Commission expense ratio | 13.9 | n/m | ||||||||||||||||||||||||
Underwriting expense ratio | 21.1 | n/m | ||||||||||||||||||||||||
Combined ratio | 94.6 | % | n/m | |||||||||||||||||||||||
n/m - not meaningful | ||||||||||||||||||||||||||
(1) See Page 14 for a description of our reportable segments | ||||||||||||||||||||||||||
(2) Losses and LAE in Corporate and Other represent the impact of the LPT Agreement |
Employers | Cerity | Corporate and Other | Consolidated | |||||||||||||||||||||||
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||
Gross premiums written | $ | 536.8 | $ | 3.6 | $ | — | $ | 540.4 | ||||||||||||||||||
Net premiums written | 531.7 | 3.6 | — | 535.3 | ||||||||||||||||||||||
Net premiums earned | A | 492.1 | 2.0 | — | 494.1 | |||||||||||||||||||||
Net investment income | 57.7 | 2.7 | 2.4 | 62.8 | ||||||||||||||||||||||
Net realized and unrealized losses on investments |
(56.0) | (1.6) | (7.9) | (65.5) | ||||||||||||||||||||||
Other income | 0.3 | — | — | 0.3 | ||||||||||||||||||||||
Total revenues | 494.1 | 3.1 | (5.5) | 491.7 | ||||||||||||||||||||||
Losses and LAE incurred (2) |
B | (304.7) | (1.3) | 6.3 | (299.7) | |||||||||||||||||||||
Commission expense | C | (69.8) | (0.1) | — | (69.9) | |||||||||||||||||||||
Underwriting and general and administrative expenses | D | (101.8) | (9.9) | (8.9) | (120.6) | |||||||||||||||||||||
Interest and financing expenses | (1.3) | — | (0.3) | (1.6) | ||||||||||||||||||||||
Total expenses | (477.6) | (11.3) | (2.9) | (491.8) | ||||||||||||||||||||||
Net income (loss) before income taxes |
$ | 16.5 | $ | (8.2) | $ | (8.4) | $ | (0.1) | ||||||||||||||||||
Underwriting income (loss) | A+B+C+D | $ | 15.8 | $ | (9.3) | |||||||||||||||||||||
Loss and LAE expense ratio: | ||||||||||||||||||||||||||
Current year | 64.0 | % | n/m | |||||||||||||||||||||||
Prior years | (2.1) | — | ||||||||||||||||||||||||
Loss and LAE ratio | 61.9 | n/m | ||||||||||||||||||||||||
Commission expense ratio | 14.2 | n/m | ||||||||||||||||||||||||
Underwriting expense ratio | 20.7 | n/m | ||||||||||||||||||||||||
Combined ratio | 96.8 | % | n/m | |||||||||||||||||||||||
n/m - not meaningful | ||||||||||||||||||||||||||
(1) See Page 14 for a description of our reportable segments | ||||||||||||||||||||||||||
(2) Losses and LAE in Corporate and Other represent the impact of the LPT Agreement |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net income |
A | $ | 14.0 | $ | 19.1 | $ | 72.5 | $ | 1.3 | |||||||||||||||||
Impact of the LPT Agreement | (1.9) | (2.1) | (5.9) | (6.3) | ||||||||||||||||||||||
Net realized and unrealized (gains) losses on investments |
7.1 | (1.9) | (10.7) | 65.5 | ||||||||||||||||||||||
Lease termination and asset impairment charges | — | — | 9.4 | — | ||||||||||||||||||||||
Income tax expense (benefit) related to items excluded from Net income |
(1.5) | 0.4 | 0.3 | (13.8) | ||||||||||||||||||||||
Adjusted net income (1) |
B | 17.7 | 15.5 | 65.6 | 46.7 | |||||||||||||||||||||
Stockholders' equity - end of period | $ | 919.0 | $ | 919.0 | $ | 919.0 | $ | 919.0 | ||||||||||||||||||
Stockholders' equity - beginning of period | 951.7 | 977.5 | 944.2 | 1,213.1 | ||||||||||||||||||||||
Average stockholders' equity | C | 935.4 | 948.3 | 931.6 | 1,066.1 | |||||||||||||||||||||
Stockholders' equity - end of period | $ | 919.0 | $ | 919.0 | $ | 919.0 | $ | 919.0 | ||||||||||||||||||
Deferred Gain - end of period | 100.2 | 108.1 | 100.2 | 108.1 | ||||||||||||||||||||||
Accumulated other comprehensive loss - end of period | 198.2 | 201.1 | 198.2 | 201.1 | ||||||||||||||||||||||
Income taxes related to accumulated other comprehensive loss - end of period | (41.6) | (42.2) | (41.6) | (42.2) | ||||||||||||||||||||||
Adjusted stockholders' equity - end of period | 1,175.8 | 1,186.0 | 1,175.8 | 1,186.0 | ||||||||||||||||||||||
Adjusted stockholders' equity - beginning of period | 1,184.3 | 1,182.4 | 1,189.2 | 1,266.9 | ||||||||||||||||||||||
Average adjusted stockholders' equity (1) |
D | 1,180.1 | 1,184.2 | 1,182.5 | 1,226.5 | |||||||||||||||||||||
Return on stockholders' equity | A / C | 1.5 | % | 2.0 | % | 7.8 | % | 0.1 | % | |||||||||||||||||
Annualized return on stockholders' equity | 6.0 | 8.1 | 10.4 | 0.2 | ||||||||||||||||||||||
Adjusted return on stockholders' equity (1) |
B / D | 1.5 | % | 1.3 | % | 5.5 | % | 3.8 | % | |||||||||||||||||
Annualized adjusted return on stockholders' equity (1) |
6.0 | 5.2 | 7.4 | 5.1 | ||||||||||||||||||||||
(1) See Page 13 for information regarding our use of Non-GAAP Financial Measures. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Unpaid losses and LAE at beginning of period | $ | 1,927.2 | $ | 1,972.8 | $ | 1,960.7 | $ | 1,981.2 | |||||||||||||||
Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE | 436.2 | 462.4 | 445.4 | 476.9 | |||||||||||||||||||
Net unpaid losses and LAE at beginning of period | 1,491.0 | 1,510.4 | 1,515.3 | 1,504.3 | |||||||||||||||||||
Losses and LAE incurred: | |||||||||||||||||||||||
Current year losses | 116.9 | 114.6 | 338.7 | 316.3 | |||||||||||||||||||
Prior year losses on voluntary business | — | — | (20.0) | (9.6) | |||||||||||||||||||
Prior year losses on involuntary business | (0.1) | (0.3) | — | (0.7) | |||||||||||||||||||
Total losses incurred | 116.8 | 114.3 | 318.7 | 306.0 | |||||||||||||||||||
Losses and LAE paid: | |||||||||||||||||||||||
Current year losses | 32.0 | 27.3 | 64.1 | 50.4 | |||||||||||||||||||
Prior year losses | 89.0 | 73.9 | 283.1 | 236.4 | |||||||||||||||||||
Total paid losses | 121.0 | 101.2 | 347.2 | 286.8 | |||||||||||||||||||
Net unpaid losses and LAE at end of period | 1,486.8 | 1,523.5 | 1,486.8 | 1,523.5 | |||||||||||||||||||
Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE | 426.6 | 456.4 | 426.6 | 456.4 | |||||||||||||||||||
Unpaid losses and LAE at end of period | $ | 1,913.4 | $ | 1,979.9 | $ | 1,913.4 | $ | 1,979.9 |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
Investment Positions: |
Cost or Amortized
Cost (1)
|
Net Unrealized Gain (Loss) | Fair Value | % | Fair Value | % | ||||||||||||||||||||||||||||||||
Fixed maturity securities | $ | 2,198.6 | $ | (198.2) | $ | 1,997.2 | 82 | % | $ | 2,186.3 | 82 | % | ||||||||||||||||||||||||||
Equity securities | 132.3 | 66.7 | 199.0 | 8 | 203.7 | 8 | ||||||||||||||||||||||||||||||||
Short-term investments | 46.8 | — | 46.8 | 2 | 119.1 | 4 | ||||||||||||||||||||||||||||||||
Other invested assets | 81.1 | 9.8 | 90.9 | 4 | 59.7 | 2 | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | 108.8 | — | 108.8 | 4 | 89.2 | 3 | ||||||||||||||||||||||||||||||||
Restricted cash and cash equivalents | 0.2 | — | 0.2 | — | 0.2 | — | ||||||||||||||||||||||||||||||||
Total investments and cash | $ | 2,567.8 | $ | (121.7) | $ | 2,442.9 | 100 | % | $ | 2,658.2 | 100 | % | ||||||||||||||||||||||||||
Breakout of Fixed Maturity Securities: | ||||||||||||||||||||||||||||||||||||||
U.S. Treasuries and agencies | $ | 101.1 | $ | (4.9) | $ | 96.2 | 5 | % | $ | 92.9 | 4 | % | ||||||||||||||||||||||||||
States and municipalities | 240.8 | (12.6) | 228.2 | 11 | 317.6 | 15 | ||||||||||||||||||||||||||||||||
Corporate securities | 1,023.9 | (103.4) | 917.9 | 46 | 868.1 | 40 | ||||||||||||||||||||||||||||||||
Mortgage-backed securities | 465.8 | (65.7) | 400.1 | 20 | 415.3 | 19 | ||||||||||||||||||||||||||||||||
Asset-backed securities | 113.6 | (6.8) | 106.8 | 5 | 66.1 | 3 | ||||||||||||||||||||||||||||||||
Collateralized loan obligations | 127.8 | (1.2) | 126.6 | 6 | 260.9 | 12 | ||||||||||||||||||||||||||||||||
Bank loans and other | 125.6 | (3.6) | 121.4 | 6 | 165.4 | 8 | ||||||||||||||||||||||||||||||||
Total fixed maturity securities | $ | 2,198.6 | $ | (198.2) | $ | 1,997.2 | 100 | % | $ | 2,186.3 | 100 | % |
Weighted average book yield | 4.1% | 3.9% | |||||||||||||||||||||
Average credit quality (S&P) | A+ | A | |||||||||||||||||||||
Duration | 4.4 | 3.9 | |||||||||||||||||||||
(1) Amortized cost excludes allowance for current expected credit losses (CECL) of $3.2 million. |
September 30, 2023 |
June 30, 2023 |
December 31, 2022 |
September 30, 2022 |
|||||||||||||||||||||||
Numerators: | ||||||||||||||||||||||||||
Stockholders' equity | A | $ | 919.0 | $ | 951.7 | $ | 944.2 | $ | 919.0 | |||||||||||||||||
Plus: Deferred Gain | 100.2 | 102.1 | 106.1 | 108.1 | ||||||||||||||||||||||
Stockholders' equity including the Deferred Gain (1) |
B | 1,019.2 | 1,053.8 | 1,050.3 | 1,027.1 | |||||||||||||||||||||
Accumulated other comprehensive loss | 198.2 | 165.2 | 175.8 | 201.1 | ||||||||||||||||||||||
Income taxes related to accumulated other comprehensive loss | (41.6) | (34.7) | (36.9) | (42.2) | ||||||||||||||||||||||
Adjusted stockholders' equity (1) |
C | $ | 1,175.8 | $ | 1,184.3 | $ | 1,189.2 | $ | 1,186.0 | |||||||||||||||||
Denominator (shares outstanding) | D | 25,719,074 | 26,078,813 | 27,160,748 | 27,196,333 | |||||||||||||||||||||
Book value per share (1) |
A / D | $ | 35.73 | $ | 36.49 | $ | 34.76 | $ | 33.79 | |||||||||||||||||
Book value per share including the Deferred Gain(1) |
B / D | 39.63 | 40.41 | 38.67 | 37.77 | |||||||||||||||||||||
Adjusted book value per share (1) |
C / D | 45.72 | 45.41 | 43.78 | 43.61 | |||||||||||||||||||||
YTD Change in: (2) |
||||||||||||||||||||||||||
Book value per share | 5.1 | % | (18.7) | % | ||||||||||||||||||||||
Book value per share including the Deferred Gain | 4.6 | (17.4) | ||||||||||||||||||||||||
Adjusted book value per share | 6.3 | (0.6) | ||||||||||||||||||||||||
(1) See Page 13 for information regarding our use of Non-GAAP Financial Measures. | ||||||||||||||||||||||||||
(2) Reflects the change in book value per share after taking into account dividends declared of $0.82 and $1.77 for the nine months ended September 30, 2023 and 2022, respectively. |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Numerators: | ||||||||||||||||||||||||||
Net income |
A | $ | 14.0 | $ | 19.1 | $ | 72.5 | $ | 1.3 | |||||||||||||||||
Impact of the LPT Agreement | (1.9) | (2.1) | (5.9) | (6.3) | ||||||||||||||||||||||
Net income (loss) before impact of the LPT (1) |
B | 12.1 | 17.0 | 66.6 | (5.0) | |||||||||||||||||||||
Net realized and unrealized (gains) losses on investments |
7.1 | (1.9) | (10.7) | 65.5 | ||||||||||||||||||||||
Lease termination and asset impairment charges | — | — | 9.4 | — | ||||||||||||||||||||||
Income tax expense (benefit) related to items excluded from Net income |
(1.5) | 0.4 | 0.3 | (13.8) | ||||||||||||||||||||||
Adjusted net income (1) |
C | $ | 17.7 | $ | 15.5 | $ | 65.6 | $ | 46.7 | |||||||||||||||||
Denominators: | ||||||||||||||||||||||||||
Average common shares outstanding (basic) | D | 25,981,984 | 27,312,409 | 26,612,443 | 27,504,566 | |||||||||||||||||||||
Average common shares outstanding (diluted) | E | 26,118,280 | 27,436,428 | 26,767,056 | 27,681,666 | |||||||||||||||||||||
Earnings per share: |
||||||||||||||||||||||||||
Basic | A / D | $ | 0.54 | $ | 0.70 | $ | 2.72 | $ | 0.05 | |||||||||||||||||
Diluted |
A / E | 0.54 | 0.70 | 2.71 | 0.05 | |||||||||||||||||||||
Earnings (loss) per share before impact of the LPT: (1) |
||||||||||||||||||||||||||
Basic | B / D | $ | 0.47 | $ | 0.62 | $ | 2.50 | $ | (0.18) | |||||||||||||||||
Diluted (2) |
B / E | 0.46 | 0.62 | 2.49 | (0.18) | |||||||||||||||||||||
Adjusted earnings per share: (1) |
||||||||||||||||||||||||||
Basic | C / D | $ | 0.68 | $ | 0.57 | $ | 2.47 | $ | 1.70 | |||||||||||||||||
Diluted | C / E | 0.68 | 0.56 | 2.45 | 1.69 | |||||||||||||||||||||
(1) See Page 13 for information regarding our use of Non-GAAP Financial Measures. | ||||||||||||||||||||||||||
(2) Outstanding common share equivalents are not considered in the Company's diluted earnings (loss) per share computations in any period that involves a net loss. |