Employers Holdings Inc

Good day and thank you for standing by. Welcome to the fourth quarter 2024 Employers' Holdings and Earnings Conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today. Lori Brown, please go ahead.

Thank you, Kevin. Good morning and welcome everyone to the fourth 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. 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 security 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 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. Now I'll turn the call over to our Chief Executive Officer, Kathy Antonello.

Thank you, Lori. Good morning, everyone, and thank you for joining us today. On the call with me is Mike Paquette, our Retiring Chief Financial Officer, and I would like to welcome Mike Pedraja, our Incoming Chief Financial Officer. During the call, we will follow our typical agenda where I will deliver my opening comments and then hand it over to Mike to provide the details on our financials. I'll close with a few additional thoughts, and then we'll open it up for questions, comments, and discussion. The fourth quarter contributed nicely to a very successful year for employers. We finished the year with the highest levels of written and earned premium, ending in-force premium and policies, and net investment income in our history. We achieved solid growth in new and renewal premium throughout 2024. which was offset by lower final audit premiums and endorsements. Our gross written premiums, excluding both final audit premiums and the change in auditor pools, increased 3% in the fourth quarter and 6% for the full year, with all major distribution channels contributing to the growth. Our investment performance was also a boost to our revenue throughout 2024, with strong net investment income and net unrealized gains from our common stocks and other investments. From an underwriting standpoint, our year-end full reserve study led to the recognition of $9 million of net favorable prior year loss reserve development from our voluntary business. That action, coupled with meaningfully lower underwriting expenses, yielded a combined ratio of 95.5%, excluding the LPT for the fourth quarter. For the full year, we had a combined ratio of 98.6%, excluding the LPT, which represents our 10th straight year of achieving an underwriting profit in our long-tailed line of business. I'm particularly pleased with the reductions we achieved throughout the year in our underwriting and general and administrative expense ratio. That ratio for the fourth quarter was 23.2% versus 24.6% a year ago, and was 23.5% for the full year versus 24.9% a year ago. The decreases were primarily the result of cost savings achieved through the SARITY integration plan that we executed in the fourth quarter of 2023. and we remain laser focused on achieving further reductions to that ratio going forward. As you're aware, we do not provide specific guidance, but in light of the ongoing competitive rate environment for workers' compensation, we currently anticipate increasing our 2025 Accident Year Loss and LAE Ratio for Voluntary Business. The increase is consistent with both our prudent reserving philosophy and the current trend in the workers' compensation industry. We expect this to mitigate the impact of our continued focus on reducing the expense ratio. Finally, I want to thank our talented and dedicated employees for all they achieved in 2024. They are our most valued asset and have successfully positioned the company for even better results in the coming years. With that, Mike will now provide a deeper dive into our 2024 financial results, and I'll return to provide my closing remarks.