Employers Holdings Inc

Good day, and thank you for standing by. Welcome to the Q4 2021 Employers Holdings, Inc. earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during that session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. And if you require any assistance during the call, please press star zero. I would now like to hand the conference over to your speaker today, Ms. Lori Brown, General Counsel. Ms. Brown, the floor is yours.

Thank you, Chris. Good morning and welcome, everyone, to the fourth 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, 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 nonpublic information and 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 fourth quarter of 2021 and discuss our observations of the current workers' compensation market. 2021 was a very successful year for employers, and I want to take this opportunity to acknowledge and thank our employees and business partners who have continued to deliver through difficult and rapidly changing times. It is their hard work and persistence that has gotten us to this point and allowed us to emerge stronger and more resilient. As I mentioned at the beginning of the year, as the new CEO, my primary goal for the company in 2021 was to fully capitalize on the upcoming labor market improvement while continuing to maintain underwriting discipline and actively manage our expenses. I am happy to report that we achieved that goal. In terms of capitalizing on improving conditions, our gross written premiums in 2021 were up 2% versus those of a year ago. While pandemic-related shutdowns negatively impacted our premium writings during the first half of the year, we turned a corner during the second half of 2021, and our gross written premiums were up 15% year over year. This strong rebound primarily resulted from improved labor market conditions and our appetite expansion into new markets still within our established low-hazard groups. Those included landscaping, residential, janitorial, and several artisan contracting classes. We ended the year providing coverage to a record number of enforced policies. The significant growth in policy count we experienced positions us well for premium growth as wages rise and employment levels improve. These dual forces are expected to bring further improvement to our top line. In support of this expectation, we remain committed to providing a seamless customer experience for our independent and digital agents. Throughout the year, we continued our underwriting discipline and observed consistent declines in frequency for lost time claims. As a result, we maintained our current accident year loss and LAE ratio on voluntary business at 63.5%, down from 64.3% for all of 2020. We also reduced our loss reserves for prior accident years by $24 million this quarter, which related to nearly every accident year prior to 2018. In addition, I'm pleased to report that our commitment to actively managing our expenses resulted in a 10% year-over-year reduction in fourth quarter expenses. This meaningful decrease was primarily a result of targeted fixed expense savings, employee reductions and departures, and a reduction in assessments. And finally, as a result of the growth in written premium and reduction in expenses that we have achieved in recent quarters, we began 2022 with a significantly lower expense ratio. With that, Mike will now provide a further discussion of our financial results, and then I will return to provide my closing remarks. Mike?