AMERISAFE, Inc.

Good day, and welcome to the AmeriSafe 2022 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, and welcome to the AmeriSafe 2022 Third Quarter Investor Call. If you have not received the earnings release, it is available on our website at 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 proved to be incorrect, or as the results of risk, uncertainty, 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 statements. I will now turn the call over to Janelle Frost, AmeriSafe's President and CEO.

Thank you, Katherine, and good morning, everyone. I'd like to take this opportunity to virtually welcome Andy Amiridis, our new CFO. As previously announced, Andy joined the team in September and has been working with Neil as he transitions to retirement. So welcome, Andy. Moving on to the quarter. We are pleased with this quarter's results, reporting an 85.4% combined ratio and an operating ROE of 14.4%. The quarter's results were supported by favorable prior year development, an increase in net investment income due to higher interest rates, and strong audit premium. Premium written is up for the second consecutive quarter, with the current quarter written premium up 1.5%, primarily due to audit premium. Wage inflation continues to be the primary driver for payrolls, with our payrolls up significantly from the same period last year. In maintaining our operational effectiveness, we were successful in retaining 93.5% of the accounts for which we offered renewal. Our overall pricing, as measured by our ELCM, was a 153, identical to the third quarter of 2021. Overall policy count was down as we continued to face competitive headwinds in the marketplace. We are well positioned to retain our policyholders and successfully compete for new business. In addition, we continue to see growth in payrolls reported in this quarter, driven primarily by wage growth. This bodes well for future audit premiums. A smaller percentage of the growth is attributable to new workers. The number of new workers is a trend we closely monitor, as new workers typically translate to more claims. Over 40% of the claims reported in any given year are injuries from workers with one year or less of tenure. Job training, turnover rates, and accident prevention measures are risk differentiators our safety professionals evaluate during their onsite visits and are critical to our underwriting evaluations. Continuing with losses, we experienced $10.4 million of favorable prior year development in the quarter, primarily from accident years 2017 through 2020. For the current accident year, our loss ratio was 71%, unchanged from the first two quarters. Frequency for the current accident year is down from accident year 2021 at the same point in time, and severity was within expectations. Before turning the call over to Andy, I want to discuss the special dividend. The company's board of directors declared a special dividend of $4 per share for shareholders of record as of December 2, 2022. This dividend reflects the operational excellence and commitment to our shareholders by seeking to deploy capital to create long-term shareholder value and return excess capital to shareholders. I'll now turn the call over to Andy.