Employers Holdings Inc

Good day, ladies and gentlemen, and welcome to the second quarter 2021 Employers Holdings, Inc. Earnings Conference Call. At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Ms. Lori Brown, General Counsel.

Thank you, Katrina. Good morning and welcome, everyone, to the second quarter 2021 earnings call for employers. Today's call is being recorded and webcast from the investors section of our website, where a replay will be available following the call. Presenting today on the call will be Kathy Antonello, our Chief Executive Officer, and Mike Paquette, our Chief Financial Officer. Statements made during this conference call that are not based on historical facts are considered forward-looking statements. These statements are made in reliance on the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Although we believe the expectations expressed in our forward-looking statements are reasonable, risks and uncertainties could cause actual results to be materially different from our expectations, including the risks set forth in our filings with the Securities and Exchange Commission. All remarks made during the call are current only at the time of the call and will not be updated to reflect subsequent developments. The company also uses its website as a means of disclosing material non-public information and for complying with the disclosure obligation under SEC's Regulation FD. Such disclosures will be included in the investor section of the company's website. Accordingly, investors should monitor that portion of the company's website in addition to following the company's press releases, SEC filings, public conference calls, and webcasts. In our earnings press release and in our remarks or responses to questions, we may use non-GAAP financial metrics. Reconciliations of these non-GAAP metrics to our GAAP results are included in our financial supplement as an attachment to our earnings press release, our investor presentation, and any other materials available in the investor section on our website. Now I will turn the call over to Kathy.

Thank you, Lori, and thanks to everyone for joining us today. On today's call, Mike and I will outline our financial results for the second quarter of 2021 and discuss our observations of the current workers' compensation market. Employers continues to perform well given the challenges faced by our policyholders throughout the pandemic. With businesses now reopened and restrictions largely lifted, we are experiencing year-over-year increases in new business submissions, quotes, and binds, and are encouraged by the rebound we experienced during the second quarter of 2021. Our second quarter gross written premiums were up 5% year-over-year, and we closed the period with yet another record number of policies in force. More so than ever, we remain confident that rising payrolls and new business opportunities will bring further growth to our top line. Our year-over-year new business premium for the first half of 2021 is down slightly, driven by pandemic-related shutdowns in January and February. However, our second quarter new business premium was up over 40% relative to 2020, as both the labor force participation rate and unemployment rate continued to improve. The policy retention rate on our renewal book remains very strong, at 94% year to date, although this strength was offset to some degree by lower average policy sizes and modest rate decreases. Overall, our year-over-year renewal premium was down 10% for the first half of 2021 and 8% for the second quarter. We continue to see declines in frequency for lost time claims and have maintained our current accident year loss and LAE ratio on voluntary business at 63.6%, down from 65.5% a year ago and 64.3% at year end. While we experienced favorable loss reserve development of $10 million on accident years 2017 and prior, our second quarter results were tempered by $8 million of adverse loss reserve development associated with two catastrophic non-COVID claims that occurred in late 2020. Our second quarter expenses decreased by 21% from those of the first quarter of 2021, and are down 17% year over year, in line with our expectations. The decrease in our expenses was primarily a result of targeted expense savings, employee departures, and lower variable expenses that fluctuate directly with earned premium. With that, Mike will now provide a further discussion of our financial results, and then I will return to provide my closing remarks. Mike?