Employers Holdings Inc

Thank you for standing by and welcome to the Employers Holdings first quarter 2023 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 this session, you'll need to press star 1-1 on your telephone. If 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 first quarter 2023 earnings call for employers. Today's call is being recorded in 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 on 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 thanks for joining us today. To start this morning, I'll provide some highlights of our first quarter 2023 financial results Then I'll hand it over to Mike for further details on our financials. And prior to Q&A, I'll touch on a few of our digital initiatives that we plan to complete in 2023. I'm very pleased with our first quarter results. Continued premium growth, significantly higher net investment income, and a return to net investment gains drove a 36% increase in revenue year over year. Our written and earned premiums in the quarter were up 13% and 15%, respectively. The strong increase arose from higher new, renewal, and final audit premiums, and two recent initiatives also contributed to the growth. The first is our thoughtful and disciplined expansion within the low-to-medium hazard group classes, and the second was the successful implementation of Phase 1 of our new sales and underwriting operating models. which was designed to create efficiency and optimize our agent engagement in our core business segment. As a result of these efforts, we ended the quarter with yet another record number of policies in force. Our net investment income was up 45% for the quarter. The sharp increase was primarily due to higher market interest rates impacting bond yields and higher invested balances of fixed maturity securities. We earned $28 million of net investment income during the quarter, which is significantly higher than any other quarter in our history as a publicly traded company. Our income statement further benefited from $8 million of net investment gains, a markedly different result than the $17 million of net investment losses we experienced a year ago. From an underwriting standpoint, we set our current accident year loss and LAE ratio at on voluntary business at 63.3% versus 64% recorded throughout 2022. We did not recognize any prior year loss reserve development this quarter because a full actuarial study was not performed and the indications were consistent with our expectations. We will evaluate our prior year reserves in more detail at mid-year when we routinely perform a full reserve study. Despite an increase in our year over year commission expense, our commission expense ratio improved by 0.4 percentage points to 13.5% when considering the corresponding increase in net earned premium. The same was the case with our consolidated underwriting and G&A expense ratio, which also improved by 0.4 percentage points to 25.7%. With that, Mike will now provide a further discussion of our financial results, and then I'll return to provide my closing remarks. Mike?