AMERISAFE, Inc.

Thank you for your patience, and once again, please continue to hold. Please stand by. Good day, everyone, and welcome to the Amerisafe 2020 First Quarter Earnings Conference Call. Today's call is being recorded and at this time I'd like to turn the conference over to Kathryn Shirley, Chief Administrative Officer. Please go ahead.

Good morning. Welcome to the Amerisafe 2020 First Quarter Investor Call. If you have not received the earnings release, it is available on our website at www.amerisafe.com. This call is being recorded. A replay of today's call will be available. Details 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 the results of risks, uncertainties, and other factors, including the impact of the COVID-19 pandemic on the business and operations of the company and our policyholders and the market value of the securities in our investment portfolio. Other factors that may affect our results are discussed in today's earnings release, in the comments made during this call, and in the risk factor 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 statement. I will now turn the call over to Janelle Frost, Amerisafe's President and CEO.

Thank you, Kathryn, and good morning, everyone. Welcome to my isolation bubble. I hope you are safe and well. Our country and the workers' compensation market are currently facing health and economic uncertainties. Today's conversation looks to be much different than our focus on declining rates and competition just two short months ago during our year-end earnings call. What is not different is Amerisafe's commitment to service. Throughout this pandemic, Amerisafe's dedicated employees continue to serve our policyholders, agents, and injured workers while protecting themselves and their households' health and safety. On behalf of myself and the Board, I would like to thank them for their remarkable dedication in these unprecedented times. That dedication, coupled with AmerisA's operational discipline over the last 34 years, built a firm foundation of efficient operations with strong liquidity and no debt. In the current environment, our liquidity affords us the opportunity to maintain our workforce, pay our regular dividend, and focus on our mission of providing quality insurance services. Amerisafe and our policyholders are not immune from economic conditions, but I believe Amerisafe is well positioned for what lies ahead. In the first quarter, we produced a combined ratio of 83.5% and an operating return on average equity of 16.1%. We are pleased with this result, particularly considering continued declines in underlying approved loss costs. Our ELCM for the quarter was a 157, Down from 159 in last year's first quarter. Voluntary policy count was down 2.2%, with renewal retention of 92.7%. As a result, premiums for policies written in the quarter were down 5.8%, while average approved loss costs for our classes of business were down 6.9%. For the quarter, audit premium and other adjustments increased gross premiums written 3.6 million. This was a $0.9 million decrease from the first quarter of 2019, which, when combined with the decrease in written premium, resulted in top line being down 6.5% from the first quarter of 2019. For the states that we operate in, stay-at-home orders impacted the second half of March. Our agents and policyholders were working, and Amerisafe's operations were uninterrupted throughout the transition to work-from-home. Therefore, there was minimal impact of premiums in the first quarter related to the pandemic. Nearly 95% of our policyholders report payrolls and pay premium to us on a monthly basis. In April, we received premium reports based on March payrolls. The reported premiums for those April reports based on March payrolls were approximately 8% lower than the amount we expected based on the policyholders' estimated annual premiums. Now that's not an exact science, but it's our best indication of how many of our insurers were working as stay-at-home orders were enacted. In our top 10 states, most of the larger classes of our businesses were not prohibited from working because of state guidance. We will have a better indication toward the end of May when April payrolls are reported to us. Payrolls for furloughed employees will be reported in a new class code for which we will not collect premium. Our loss ratio for the quarter was 55.3%, with a current accident year loss ratio of 72.5%. The current accident year loss estimate was unchanged from accident year 2019. As with premium, we saw minimal impact to losses related to the coronavirus pandemic in the quarter. To date, we've had four COVID-19 related claims, mostly due to employers reporting out of an abundance of caution. There is an ongoing debate in the industry and among states regarding the compensability of coronavirus claims as workers' compensation. We agree with the industry experts that the costs of this pandemic were not contemplated in the rates nor in re-enturance agreements. If healthcare workers and first responders are deemed as covered under workers' compensation, AmeriSafe would have a very small exposure, mostly through our signed risk policies. In the near term, our overall reported claim counts have declined. We experienced $13.6 million of favorable development from prior accident years in the quarter. That favorable development primarily resulted from individual claim severities being less than anticipated. The stress on the healthcare industry and the delay of doctors' appointments and procedures could impact ultimate severity of claims depending on the length of state restrictions. Our ability to work with claimants, employers, and healthcare providers to achieve maximum medical improvement and return the injured worker to work are essential. Anything delaying those outcomes, whether medical or return to work related, impacts our ability to close claims. I'll now turn the call over to Neil to discuss the financial results for the quarter.