Employers Holdings Inc

Thank you for standing by, and welcome to the Employers' Holdings Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Lori Brown, Executive Vice President, General Counsel. Please go ahead.

Thank you, Jonathan. Good morning and welcome, everyone, to the fourth quarter 2022 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. Good morning to everyone, and thank you for joining us today. To start the discussion, I'll provide some insights of our fourth quarter and full year 2022 financial results, and then I'll hand it over to Mike for more details on our financials. Prior to the Q&A, I'll share some insights into the current workers' compensation market and then talk a little about our focus for 2023. I am really pleased with what we achieved in 2022. We closed the year with strong revenue growth driven by sharp increases in both premium writings and net investment income. Our written premiums were up 22% for the quarter and 21% for the year. The strong growth was the result of higher new, renewal, and final audit premiums. Our thoughtful and disciplined expansion within the low to medium hazard group classes increased submissions, quotes, and binds across most of the states where we operate and was the primary driver of new business premium growth. We also increased our final audit premium accruals and recognized strong audit premium pickup as our payroll exposure grew with the strong labor market and rising wages. Finally, our renewal premium benefited from continued solid retention rates throughout the year. We wrote $707 million of net written premium in 2022, higher than any other year since 2018 and the third highest in our history as a publicly traded company. Our net investment income was up 53% for the quarter and 24% for the year. The sharp increase was primarily due to higher market interest rates impacting bond yields and higher invested balances of fixed maturity securities. We earned $90 million of net investment income in 2022, higher than any other year since 2009, and the second highest in our history as a publicly traded company. With respect to losses, employers and CRT each maintained a current accident-year loss and LAE ratio on voluntary business of 64% versus the 63.5% recorded throughout 2021. During the quarter, employers in CRD each recognized net favorable prior year loss reserve development, which amounted to $23 million in the aggregate. Diligent fixed expense management helped to lower our consolidated underwriting and general and administrative expense ratio to 24.7% for the year, which was far lower than any other year since 2018. Serity, which we launched in 2019, increased its premium writings by 350% this year, from $1.5 million a year ago to $6.7 million. Serity continues to develop additional partnership opportunities to attract small business customers seeking an online experience when purchasing workers' compensation. Finally, I want to thank our dedicated employees for an outstanding 2022. The unwavering service you provide our agents, our policyholders, and their injured workers drive our continued success. With that, Mike will now provide a further discussion of our financial results, and then I'll return to provide my closing remarks. Mike?