Employers Holdings Inc

Good day. Thank you for standing by. Welcome to Q3 2021 Employers Holdings Incorporated Earnings Conference Call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Ms. Lori Brown. Thank you. Please go ahead.

Thank you, Buena. Good morning and welcome, everyone, to the third quarter 2021 earnings call for employers. Today's call is being recorded and webcast from the investor 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 for 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 filing 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 nonpublic information for complying with disclosure obligations 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 third quarter of 2021 and discuss our observations of the current workers' compensation market. Despite the economic challenges presented by the pandemic, employers continue to perform well, and we are encouraged by the rebound we've experienced since May of 2021. As businesses have reopened and restrictions have been lifted and our appetite has expanded, we've seen year-over-year increases in new business submissions, quotes, and binds, and we once again closed the period with a record number of policies in force. During the quarter, net written premiums increased 16% year over year, and our new business average policy size was up 15% over the same period. In an effort to further diversify our risk exposure and capitalize on new market opportunities post-COVID, we launched an appetite expansion initiative in July, and early indications are that the initiative is having a positive impact on new business. More so than ever, we remain confident that new business opportunities and rising payrolls, driven by increases in both wages and employment, will bring further growth to our top line. While our year-over-year new business premium for the first nine months of 2021 was limited by pandemic-related shutdowns in January and February, in total, the past two quarters were up 27% relative to 2020. Gradual improvement in wages and employment contributed to the increase. 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 at renewals. Overall, our year-over-year renewal premium was down 7% for the first nine months of 2021 and down 1% for the third 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. As part of our continued technology and process improvement initiatives, we implemented a new comprehensive claims system during the quarter, which we believe will enhance and streamline our claims handling. In connection with this implementation, we undertook several process changes, and as a result, we chose not to recognize any prior year loss reserve development during the quarter. In line with our expectations, targeted expense savings and employee reductions and departures decreased third quarter expenses by a meaningful 19% year over year. With that, Mike will now provide a further discussion of our financial results, and then I'll return to provide my closing remarks. Mike?