Employers Holdings Inc

Good day and welcome to the Q1 2024 Employers Holding Sync 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, please call R11. As a reminder, this call may be recorded. I would like to call over to Lori Brown, General Counsel. Please go ahead.

Lori Brown Thank you, Michelle. Good morning and welcome everyone to the first quarter 2024 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 are 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 obligations under the SEC's Regulation FD. Such disclosures will be included in the investor section of our website. Accordingly, investors should monitor that portion of our website in addition to following our 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 measures. Reconciliations of these non-GAAP measures 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. And now I'll turn the call over to Kathy.

Thank you, Lori. Good morning to everyone and welcome to our first quarter 2024 earnings call. Today we will follow our typical agenda where I'll begin by providing some highlights of our first quarter 2024 results. I'll then hand it over to Mike for more details on our financials and prior to Q&A, I'll discuss the continued improvement we expect to see during the balance of 2024. Higher new and renewal premiums. Strong net investment income and investment gains drove an 8% increase in our first quarter revenue year over year. Our steady growth in written premium resulted from a 38% increase in new business, a 6% increase in renewal business, and continued solid audit premium recognition. Excluding adjustments for audit premium, our gross written premium increased 14% for the quarter, with all major distribution channels contributing to the growth. Our investment performance was also a boost to revenue with continued strong net investment income and net unrealized gains from our common stock and other investments. We recorded our current accident year loss in LAE ratio on voluntary business at 64%, slightly above the 63.3% we maintained throughout 2023 and consistent with that of 2022. We believe the accident year 2024 loss ratio we've recorded, along with our existing provision for a potential increase in medical inflation, positions us well from a reserving standpoint. As was the case in the first quarter of 2023, we did not recognize any prior year loss reserve development on our voluntary business. Because the full actuarial study was not performed and the amount of indicated net prior year loss reserve development was 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. Our commission expense ratio was 13.8% up from 13.5% a year ago. The increase was due to our strong new business premium growth which is typically subject to a higher initial commission rate, and anticipated 2024 agency incentives, which are contingent on profitable growth. Our underwriting and general and administrative expense ratio was 24.8%, down from 25.7% a year ago. The expense ratio improvement primarily resulted from our recent CERITY integration and we expect further expense ratio improvement throughout 2024. While our net income and adjusted net income per diluted share rose sharply by 29% and 12% respectively, our first quarter 2024 GAAP combined ratio of 101.6% was similar to our first quarter 2023 results. Our combined ratio does not yet fully reflect the underlying enhancements efficiencies, and economies of scale that we have recently achieved, and we expect meaningful improvements in our combined ratio for the balance of the year. With that, Mike will now provide a deeper dive into our financial results, and then I'll return to provide my closing remark. Mike?