AMERISAFE, Inc.

Good day and welcome to the AmeriSafe 2022 Fourth Quarter Earnings Conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Catherine Shirley. Please go ahead.

Good morning. Welcome to the AmeriSafe 2022 Fourth 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 uncertainty. 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 statements. I will now turn the call over to Janelle Frost, AmeriSafe's President and CEO.

Thank you, Catherine, and good morning, everyone. We are pleased to report continued strong results for the fourth quarter and the full year of 2022. For the year, we reported a combined ratio of 83.6 percent, gross premiums written decline of less than a point despite rate pressure as loss costs continue to trend down, and an operating ROE of 16.5 percent. Our balance sheet remains strong with roughly a billion dollars in investments and cash, a strong reserve position, and no outstanding debt. We continue to see strong retention in policies for which we offer renewal, with 94.6% retention in the fourth quarter. Our overall pricing, as measured by our ELCM, was a 151 for the fourth quarter. As we look ahead, competitive pressures and loss cost declines are expected to remain a headwind, though we expect wage growth to be a largely mitigating factor in the near term. Digging into wage growth a little further, when looking at this metric on a year-over-year basis, the results will be muted given the strong wage growth we saw in 2022. Additionally, I'd like to note that payroll growth is primarily coming from existing employees. Moving to losses, the accident year loss ratio remained steady at 71% throughout the year. During the quarter, we experienced $10 million in favorable prior year development, primarily from accident years 2017 to 2020. For the full year, we released roughly $40 million in favorable development as active claims handling resulted in lower claim severities. As outlined on our call a year ago, we focused on using the drop in reported claims to find avenues to resolve and close open claims. For 2022, we ended the year with 13 severe claims compared to 19 at year-end 2021 and 18 at year-end 2020. In this instance, I define a severe claim as those with case reserves incurred in excess of $1 million. As it relates to loss trends, frequency and severity are both within our expectations. We expect medical inflation to begin to tick up on the back half of the year as our experience in certain pockets of the health market are exhibiting very early indicators. Bringing all the pieces of the loss ratio together, and given the information we have now, we expect to hold our accident year loss ratio steady at 71% in the first quarter of 2023. Finally, as it relates to capital management, AmeriSafe's Board of Directors has approved a 9.7% increase in the regular quarterly dividend to 34 cents. With our long tenure of experience in a high-hazard niche, we are well-positioned to retain our policyholders and compete for new business while delivering robust returns to our shareholders. With that, I'd like to turn the call over to Andy to discuss the financials.