AMERISAFE, Inc.

ladies and gentlemen, and welcome to the AmeriSafe 2021 Second Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I've turned the conference over to Catherine Shirley, Chief Administrative Officer. Please go ahead.

Good morning. Welcome to the AmeriSafe 2021 Second 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 risk, uncertainties, and other factors including factors 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, Catherine, and good morning, everyone. I generally begin these calls with an update on the workers' compensation market. This quarter, there are no substantial changes in the market for which to provide an update. Approved loss cost decreases are averaging in mid-single digits, and competition is strong. As for AmeriSafe, our combined ratio of 74.4% for the quarter resulted from favorable case development from accident years 2019 and prior and a competitive expense ratio. Our long view approach to underwriting discipline and claims management continue to produce underwriting margins above industry levels. We are focused on remaining competitive and disciplined in our underwriting. In the quarter, this resulted in flat policy count with pricing down from the prior year quarter. Our ELCM was a 152. New business binds in the quarter were less than the prior year quarter but we had strong renewal retention of 93.9%. Combined, premium for policies written in the quarter was down 8.9%, with average loss costs down 6.5%. Audit premium in the quarter remained positive, despite that the audited policy period covered the full impact of the COVID-19 pandemic. We view this as a strong economic sign for our insurers and their respective industries. In total, gross premiums written were down 8.2% from the prior year quarter. Turning to losses, we experienced favorable case development in the quarter from accident years 2015 through 2019. This favorable case development comes from our focus on injured workers' medical care and their potential to return to work starting from the first report of injury until the claim is settled. Experience in reserving and handling claims by our claims staff is one of the many differentiators for AmeriSafe. As a reminder, our field case managers on average handle less than 50 indemnity claims. This is well below industry averages and allows for extensive claims management. This quarter, that focus decreased prior accident year losses incurred by $17.9 million, or 25.6 basis points. That same experience and consistency also contributed to our loss estimate for the current accident year of 72%. Frequency for the current accident year returned to pre-pandemic levels as expected. We do not know if the Delta variant surge will impact claim counts later in the year. Severity for the current accident year was also within our expectations. The pandemic did not materially impact severity in our book of business. We also refer to the number of large claims as a measure of severity. At the end of the second quarter, we had three claims with case incurred over a million dollars. The timing of when these claims occur can be random, so I offer as comparison 18 claims reported at the end of 2020 and 16 claims reported at the end of 2019. I will now turn the call over to Neal to discuss investments, expenses, and capital.