AMERISAFE, Inc Q1 2026 Earnings Call Transcript

AMERISAFE, Inc (NASDAQ: AMSF) Q1 2026 Earnings Call dated Apr. 22, 2026

Presentation

Operator

Good day, and welcome to the AMERISAFE First Quarter 2026 Earnings Call.

Today’s conference is being recorded. At this time, I would like to turn the conference over to Kathryn Shirley, Chief Administrative Officer. Please go ahead.

Kathryn H. Shirley — Executive Vice President, Chief Administrative Officer and Secretary

Thank you, operator, and good afternoon, everyone. Welcome to the AMERISAFE 2026 first quarter investor call.

If you have not received the earnings release, it is available on our website at amerisafe.com. Today, this call is being recorded. A replay of today’s call will be available. Details on how to access the replay are in the earnings release.

During this call, we will be making forward-looking statements intended to fall within the safe harbor provided under the securities laws. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Actual results may differ materially from the results expressed or implied in these statements. If the underlying assumptions prove to be incorrect or as a result of risks, uncertainties, and other factors, including factors discussed in the earnings release, in the comments made during today’s call, and in the risk factor section of our Form 10-K, Form 10-Qs, and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statements.

I will now turn the call over to Janelle Frost, AMERISAFE’s President and CEO.

G. Janelle Frost — President and Chief Executive Officer

Thank you, Kathryn, and good afternoon. We are pleased with our solid start to 2026, marked by continued growth, disciplined execution, and attractive underwriting performance.

During the quarter, we grew net premiums earned by 9%. We also delivered a combined ratio of 93.2% and produced operating earnings of $0.50 per share. These results reflect steady operating momentum amongst the competitive backdrop facing the workers’ compensation industry. The workers’ compensation market remains competitive and continues to operate in a prolonged soft pricing environment amid persistent industry headwinds such as claims severity and economic uncertainty. At the same time, workers’ compensation remains the most consistently profitable line within the P&C industry, supported by long-term claim development and stable capital structures. In this environment, sustained success depends on appropriately priced risk selection and deep industry experience.

At AMERISAFE, our differentiated approach to servicing high-hazard industries continues to support consistent returns across the cycle. Our eighth consecutive quarter of premium growth, continued improvement in our expense ratio, and favorable prior year loss development underscore the strength of our operating model and the dedication of our team. We believe these fundamentals position us well to navigate current market conditions while continuing to create long-term value for our shareholders.

I’ll now turn the call over to Vincent to walk through the details of our growth and underwriting performance for the quarter.

Vincent J. Gagliano — Executive Vice President and Chief Risk Officer

Thanks, Janelle.

In the first quarter of 2026, gross premiums written were $88.5 million, compared to $83.8 million in the first quarter of 2025, increasing 5.6%. Retention for policies for which we offered renewal was 92.4% in the quarter, and pricing remained strong, helping offset continued downward pressure in filed loss costs. New business opportunities continue to grow despite steady competition. Together, new and renewal voluntary premium increased 8.2% in the quarter, reflecting ongoing investments in distribution effectiveness and recognition of our commitment to delivering outstanding safety and claims services to our policyholders. In-force policy count increased 1.7% in the quarter and 9.5% since Q1 2025. Audit premium and related adjustments remained positive, adding $3.7 million in the quarter compared to $5 million in the first quarter of 2025. Net earned premiums were $75.1 million in the quarter, growing 9% year-over-year.

While we don’t usually comment on policyholder dividends, I do want to give some color since it was seemingly an outlier for this quarter. If you look at recent quarter history, you’ll see that there is some variability in this ratio quarter to quarter, albeit in a relatively small range. In last year’s first quarter, the dividend ratio was 0.9%, while in the subsequent quarter, Q2 2025, it was 1.8%. We have not changed our policyholder dividend strategy or plans, and this first quarter result was within our expectations. In the few states where we do offer policyholder dividends as a competitive tool, the ultimate outcome depends upon individual policyholder experience for policies in the quarter being evaluated. With recent policy count growth, it is not unexpected that more policyholders could qualify for dividends. Finally, back to the routine and update on payroll growth.

We continue to see positive wage growth in our targeted classes of business, coming in at 4.5% for the quarter, while headcount change was essentially flat. We believe continued payroll growth across our targeted industries indicates relatively healthy business activity despite ongoing economic uncertainty. Further, payroll growth, and in particular wage growth, can help offset ongoing pressure on rates, both from competition and filed loss costs.

That concludes the overview of premium results. I will hand the call back to Janelle for more information on claims, investments, and other financial metrics.

G. Janelle Frost — President and Chief Executive Officer

Thank you, Vince. Next quarter, I’ll have the pleasure of passing the financial remarks off to Guillermo Ramos, our new CFO. Until then, bear with me one more time as I blend the financial results with other operational commentary. The current accident year loss ratio was 72% for the quarter, compared to 72% for the accident year 2025 at 12 months, but 71% at the first quarter of 2025. As we’ve discussed over the last two quarters, continued rate pressure and general high claim severity are creating modest upward pressure on the current accident year. That said, large claim losses incurred can be lumpy. We ended the first quarter of the current accident year with no claims with incurred value over $1 million, compared to two in the first quarter of accident year 2025.

As for prior accident years, we had $7.6 million, or 10.1 points, of favorable development in the quarter, compared to $8.7 million, or 12.7 points, in the prior year quarter, resulting in a net loss ratio of 61.9% for the quarter. The impact of favorable prior year development to the net loss ratio, quarter over prior year quarter, is influenced by the growth in net premiums earned. To round out the combined ratio, total underwriting and other expenses were $22.3 million for the quarter, resulting in an expense ratio of 29.7%, compared to 29.9% a year ago. This marks the third consecutive quarter-over-year-over-year improvement, reflecting disciplined expense management and continued operating leverage as our strategic growth initiatives drive growth in net premiums earned.

During the first quarter of 2026, net income was $8.1 million, or $0.43 per diluted share, while operating net income was $9.5 million, or $0.50 per diluted share. This compares to net income of $8.9 million, or $0.47 per diluted share, and operating net income of $11.4 million, or $0.60 per diluted share in the first quarter of 2025. The effective tax rate for the quarter was 19.8%, compared to 20.2% in the prior year quarter. Turning to our investment portfolio, net investment income decreased 0.8% to $6.6 million due to lower average investable assets.

However, new money yields were favorable during the quarter, with the yield on new investments increasing 174 basis points in comparison to the portfolio roll-off, driving our tax equivalent yield to 3.9%, or 7 basis points higher than the first quarter of 2025. The portfolio remains high quality, carrying an average AA- credit rating and a duration of 4.4 years. Asset allocation was largely unchanged, with the portfolio composition being 61% municipals, 24% corporate bonds, 3% U.S. Treasuries and agencies, 7% equities, and 5% in cash. Approximately 43% of our portfolio is designated as held to maturity, carrying a net unrealized loss position of $7.9 million at quarter end.

As a reminder, these held to maturity securities are carried at amortized cost and therefore unrealized gains and losses on these securities are not reflected in our book value. During the quarter, we repurchased nearly 120,000 shares of common stock under the company’s share repurchase program at an average cost of $33.60 per share, for a total of $4 million. The remaining outstanding share purchase authorization under the program as of March 31st is $12.9 million. Overall, our capital position is strong, supported by high quality balance sheet, solid reserve position, and prudent investment strategy. At quarter end, we held approximately $774 million in cash and invested assets. Finally, a couple other topics. Book value per share at quarter end was $13.18, and we will file our 10-Q on Thursday, April 23rd, after market close.

With that, we’ll open the call up for questions.

Question & Answers

Operator

Thank you. [Operator Instructions] We’ll take our first question from Mark Hughes with Truist.

Mark Hughes

Hey, good afternoon.

G. Janelle Frost — President and Chief Executive Officer

Good afternoon, Mark.

Mark Hughes

Janelle, how did you see inflation in the quarter? It sounds like the medical inflation, claims inflation, sounds like the large claims were negligible.

G. Janelle Frost — President and Chief Executive Officer

You already said it all, Mark.

Mark Hughes

Yeah. Any observations about any marginal changes?

G. Janelle Frost — President and Chief Executive Officer

No. No marginal changes from what we talked about at year-end, Mark. Medical inflation is real. We are living it. We are reserving properly for it. I’ll stick by what I said at year-end. I still feel fee schedules are doing their job in helping us contain costs. I also think, NCCI recognizing last year, this time last year, that medical severity was up 6%, was eye-opening to the industry. I think CEOs have been talking about it for a while, and we’re just a few weeks away from seeing what that number was for 2025 per NCCI as well. I would expect there’s continued pressure on medical inflation industry-wide, not just with our severe claims.

Mark Hughes

Yeah. What do you think they’ll say? I guess our observation was it seemed like 2024 and 2025 were not starting off in as good a shape as some of the older accident years. Do you have any observations about what you’ve seen in the industry data?

G. Janelle Frost — President and Chief Executive Officer

Yeah. That’s a great point, Mark. I think when you look at, even NCCI last year, in their data had each accident year combined ratio seemed to be worsening, getting closer and closer to that 100% combined ratio for the industry. I think industry-wide, we’re seeing a deterioration in those results. You’re right, accident year 2024 and 2025 for the industry as a whole, I think there is definitely pressure there, but when you’re talking 12 years of declining rates, I think that’s a natural progression, right? That there’s going to be pressure there. Even though frequency for the industry has continued to go down, medical inflation and the severity on claims has ticked up. The declining rate environment. I think there’s going to be continued pressure for the industry on those accident year combined ratios. It’d be very interesting to see on an accident year basis, what those projections are reported versus, I guess, projected, but also how much that affects the calendar year, how much favorable development the industry has experienced from older accident years, to your point, those accident years 2022 and prior versus what’s developing or what emergence we’ve seen out of 2024 and 2025.

Mark Hughes

Yeah. How about NCCI loss costs? I think you’ve shared kind of the recent experience and some of the updates you’ve been getting. What does that trend look like?

Vincent J. Gagliano — Executive Vice President and Chief Risk Officer

Hey Mark, this is Vince. We’re still looking at mid-single digit decreases for the year. Most states have already put in their filings for 2026. Just to give you some sense of the range, in our 5 biggest states, they range from down almost 9% to down 1.2%. Everything in between with a few outliers.

Mark Hughes

Understood. Janelle, I don’t know if you gave any specifics on payroll. I think you might have done that in the past, kind of payroll growth or headcount growth. Any statistics there you can share?

Vincent J. Gagliano — Executive Vice President and Chief Risk Officer

Hey, Vince. I’m going to jump in for Janelle. I’ve got it right in front of me. We’re seeing payroll growth across all of our major classes to varying degrees. It’s predominantly wage growth, as we mentioned in the prepared remarks. Headcount growth’s been flat to slightly down. Different quarters, it varies quite a bit. Across all industries, payroll growth continues to be positive.

Mark Hughes

Understood. Okay, thank you very much.

G. Janelle Frost — President and Chief Executive Officer

Thank you, Mark.

Operator

Thank you. [Operator Instructions] We will take our next question from David Samar with Citizens JMP.

David Samar

Hi, this is David on for Matt. Just had one question. Hey, for the voluntary premium growth, are there any certain industries or areas of the market that are driving growth more than others right now?

G. Janelle Frost — President and Chief Executive Officer

No. I would say it’s been pretty steady across our book of business, which is one of the things that we’ve actually been happy to see as we’ve had these strategic initiatives to grow policy count and to grow premium, that the changes that we’ve made have been serving us across industries, across states. In other words, we don’t see pockets of what’s working here, it’s not working there. It’s been pretty prolific throughout the book of business. Even if you look at the 10-K last year, which last year was when our growth initiatives really started taking root in terms of the numbers we reported. If you look at the 10-K and the shift between industry groups or even the shifts among the states, there’s really not a lot of change 2025 over 2024, and that held true in the first quarter as well.

David Samar

Thank you.

G. Janelle Frost — President and Chief Executive Officer

Thank you.

Operator

Thank you. We will take our next question from Robert Farnam with Brean Capital.

Robert Farnam

Hey there. Good afternoon. I have one broad question and one specific question. The specific question is, you talked about the duration of your assets, a little over four years. I just wanted to know how does that compare to the duration of your liabilities?

G. Janelle Frost — President and Chief Executive Officer

Oh, great question. Yeah. Our average duration on our liabilities is between 3 and 4 years. As you know, we really focus.

Robert Farnam

Which is surprising.

G. Janelle Frost — President and Chief Executive Officer

I’m sorry, go ahead.

Robert Farnam

Yeah, no, I said that’s kind of surprising. People think a workers’ comp writer would have a longer duration of claims.

G. Janelle Frost — President and Chief Executive Officer

Yeah, I appreciate you asking. It’s one of my favorite subjects. Thank you, Bob. The way we handle claims is different than the industry. I’ve talked about this numerous times, but our high touch model involves our claims adjusters getting in quickly, establishing relationships, getting those reserves put up quickly, and then working with our injured workers, working with medical providers, finding ways to close and settle these claims as quickly as we can to the benefit of the injured worker, to the benefit of the policyholder, and ultimately to the benefit of AMERISAFE. That helps shorten our duration on these severe claims. We know that we’re lower than the average bear, as they say in the industry. That’s part of our operating model, and that’s how we manage claims.

Robert Farnam

Cool. All right. The broader one, I’ve been covering workers’ comp for quite a while. You obviously have as well. I would’ve said maybe five or six years ago, I thought that frequency would’ve bottomed.

G. Janelle Frost — President and Chief Executive Officer

You and me both, Bob.

Robert Farnam

Here we keep going. We’d be like, “All right, frequency’s down again.” When is this going to end? What do you think is driving the. You can only do so much safety and risk services, things like that.

G. Janelle Frost — President and Chief Executive Officer

Yeah.

Robert Farnam

I just don’t know where there’s a bottom.

G. Janelle Frost — President and Chief Executive Officer

I would agree with you, Bob. I guess partly in degree, it matters on how you’re measuring frequency, right? If you’re measuring it per $1 million of payroll or $1 million of premium. Any way you look at it right now, it’s still on the decline. A couple things I think factor into that. I agree with you. Is the workplace safer? Absolutely. I think the mix of jobs that we have, also the fact that our economy is shifting, is more towards services. I think that impacts the overall frequency. Because again, you’re talking broadly, not just what AMERISAFE, right? Broadly, right?

I think the type of jobs, the types of workforce that we have, that’s somewhat influencing that number. If you’re looking at really long-term trends, I think our economy has shifted more from manufacturing and those types of jobs to more service-related jobs. I think that’s contributing somewhat to the frequency. I happen to agree with you. If you had asked me three or four years ago, even for the industry, not even talking about AMERISAFE specific, for the industry, I would’ve said, “Well, it’s got to reach them at some point.” People are going to have accidents. We’re all human. Yet, whether you’re measuring it on payroll or premium, as of now, it’s down.

Robert Farnam

Yeah. I just remember you talking about it a long time ago and saying, “Yeah, frequency can’t drop down to zero, so it’s got to end at some point.” But man, you guys keep surprising us every quarter.

G. Janelle Frost — President and Chief Executive Officer

I always appreciate when people remember when I’m wrong. Yes. You’re right.

Robert Farnam

All right. That’s it for me. Thanks for your call.

G. Janelle Frost — President and Chief Executive Officer

Thanks, Bob.

Operator

Thank you. We will take our next question from Mark Hughes with Truist.

Mark Hughes

Yeah. Janelle, you all have been doing very well on the top-line growth, and if you touched on this earlier in the call, forgive me. I think I’ve asked before about how sustainable this is. Whether some initiatives you’ve put in place and kind of have potentially run their course or whether there’s always something new and you continue to bear fruit with your distribution strategies. I’m just sort of curious if there’s any remarks you have about kind of what’s keeping the momentum going forward.

G. Janelle Frost — President and Chief Executive Officer

Yeah, let me start with the team here at AMERISAFE is executing. I’ve talked about this before, three years ago probably at this point, dating back maybe longer now. We started putting together this growth strategy and how we wanted to be very thoughtful and very measured about that growth strategy. The team here is just executing. To the question earlier, the fact that it’s been prolific across our industry classes, across our states, I totally believe it is sustainable. Is it linear? No. We’re shooting for that mid-single digit range, and we’ve been hitting that. Like I said, kudos to the AMERISAFE employees for really executing and taking this idea of adding small incremental growth and not changing our risk profile and sticking to our knitting and being who we want to be and executing on that. Kudos to them for executing on that. I truly believe that is sustainable. The momentum’s there. The attitude is there. The strategy’s there.

Mark Hughes

Yeah. This is a trivial question, but why did you move the call to the afternoon?

G. Janelle Frost — President and Chief Executive Officer

Great question. Actually, scheduling conflict. Thank you for asking. I apologize if it is inconvenient.

Mark Hughes

Yeah. Okay. Next time it’ll be 10:30 again?

G. Janelle Frost — President and Chief Executive Officer

Yes. We will go back to our normal schedule.

Mark Hughes

Yeah. Okay. All right. Very good. Thank you.

G. Janelle Frost — President and Chief Executive Officer

You’re welcome.

Operator

Thank you. This concludes today’s question and answer session. I would now like to turn the call back to Janelle Frost, CEO, for closing comments.

G. Janelle Frost — President and Chief Executive Officer

Thoughtful and measured growth with pricing adequacy continues to be the anchor for our performance, even amidst the competitive pressures of the workers’ compensation market. Our results this quarter reflect the strength of these fundamentals, supported by a strong balance sheet that positions AMERISAFE well across the market. We remain confident in our strategy and committed to consistent execution to deliver sustainable underwriting profitability and long-term shareholder value. Thank you for joining us today.

Operator

This does conclude today’s call. Thank you for your participation. You may now disconnect.