AMERISAFE, Inc.

Good day and welcome to the AmeriSafe 2021 Third Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Catherine Shirley, Chief Administrative Officer. Please go ahead.

Good morning. Welcome to the AmeriSafe 2021 Third 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 result 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 factors section of our Form 10-K, Form 10-Q, 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. We were pleased with this quarter's results, reporting a 71.5% combined ratio and an ROE of 16.1%. Competition was strong in the quarter. We remained competitive by deploying our strategy of evaluating individual risks through safety services and underwriting, promoting safe workplaces, and caring for injured workers. These services performed by our expertise in workers' compensation benefit our policyholders and agents, created value for our shareholders, and build a foundation on our strong balance sheet. In the quarter, we maintained a strong retention rate of 93.5%, and we also found solid opportunities to buy new business, allowing us to grow policy count when compared to last year. The associated premium for voluntary policies written in the quarter was down 4.6%. For perspective on the decrease, our average loss cost for policies renewed in the quarter were 7.7% lower than the prior policy period. Our overall pricing, as measured by our ELCM, was a 153. A headwind in the quarter was audit premium and other premium adjustments, decreasing written premium by 2.1 million. Audit premium in the quarter was slightly negative. This was not surprising, given policies audited in this quarter covered payrolls fully impacted by the pandemic and the resulting economic slowdown. As for payrolls being reported now, which will impact future audit premium, we are seeing growth in payrolls driven mostly by wage growth and by a slight increase in the number of workers. In total, gross premiums written in the quarter was down 7.5% from the prior year quarter. Turning to losses, we experienced favorable prior year case development in the quarter, as our claims handling practices reached better than anticipated outcomes. Prior accident year favorable development reduced loss and loss adjustment expenses by 19 million in the quarter, or 28.1 loss ratio points. We are pleased that our experience and singular focus on workers' compensation enabled us to reach maximum medical improvement and return to work for injured workers while also settling and closing claims. As for the current accident year, frequency of claims based on earned premium was up in the quarter but has not returned to pre-pandemic levels. Severity trends are within our expectations. Therefore, our loss ratio of 72% for the current accident year remained unchanged. We continue to monitor the potential impact of rising healthcare costs on the long-term medical cost inflation. As an example, the nationwide demand for nurses and the wages healthcare systems are paying to attract and retain nurses will, I believe, impact medical cost inflation going forward. I raised this concern earlier in the pandemic, and we're seeing some slight increases in costs, particularly as we plan long-term care for injured workers. I believe this is a trend to watch. I will now turn the call over to Neil to discuss investments, expenses, and capital management.