AMERISAFE, Inc.

and welcome to the Amerisafe 2022 Second Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Vincent Bagliano, Chief Risk Officer. Please go ahead, sir.

Good morning. Welcome to the Amerisafe 2022 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 if the results of risks, 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-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, Vincent, and good morning, everyone. Inflation continues to dominate financial news. Before discussing the quarter's results, I thought it would be helpful to discuss three ways inflation impacts workers' compensation industry and AmeriSafe. First, premium revenue is based on payroll. Wage growth brought about by a labor shortage and inflationary pressures is a potential tailwind for revenue as insured payrolls increase. AmeriSafe continues to see wage growth reported by our insureds in their monthly payroll reports, which ultimately leads to positive payroll audit premium. During the second quarter, payrolls grew 9.1% based on our analysis of those policies renewed during the quarter. Second, I believe workers' compensation medical cost inflation will rise above recent trends as the healthcare industry passes increased labor costs to end consumers. Industry-wide, this could lead to increased loss ratios and unfavorable development on open claims. AmeriSafe uses long-term averages in our reserve practices, and we work diligently to close claims, therefore limiting our exposure on open claims. Rising interest rates negatively impact fixed income portfolios of insurance carriers. The upside is that new investments can be made at much more attractive yields, growing investment income in future quarters. Neil will provide Amerisafe-specific metrics during his prepared remarks. To summarize, the impacts of inflation are far-reaching, but the three impacts I named directly influence key areas of Amerisafe and our financial outcomes. In the quarter, gross premiums written grew 1% over the prior year quarter, driven by robust audit and other premium adjustments. Higher than anticipated payrolls led to positive audit premiums for the policies written in the first quarter of 2021 and audited this quarter. Premiums for policies written this quarter was down 5.6%, principally driven by declines in loss costs. Our overall pricing for the quarter, as reflected by our ELCM, was a 151, down from 152 in the second quarter of 2021. Despite competition remaining strong and pricing pressures continuing, we retained 93.7% of the policies we offered renewal to. Continuing with losses, frequency trends for the current accident year remained favorable, with reported claim counts lower than prior accident years at six months. Coupled with severity within expectations, the loss ratio for the current accident year remained 71%. We had 10 claims with case incurred above a million dollars at the end of the quarter. This compares to three for the first six months of 2021, and 19 for the full year of 2021. Our history has shown there is no seasonality as to which quarters large losses occur. Further, favorable case development reduced the quarter's loss ratio by 13.6 percentage points. Accident years primarily attributing to the 9.6 million of favorable development were 2017, 2018, 2019, and 2020. This is the first quarter that we've adjusted the ultimate loss ratio for accident year 2020. I will now turn the call over to Neil to discuss expenses, investments, and capital management.