AMERISAFE, Inc. (NASDAQ:AMSF) Q4 2022 Earnings Conference Call February 21, 2023 11:00 AM ET

Company Participants

Kathryn Shirley - Chief Administrative Officer

Janelle Frost - President and CEO

Andy Omiridis - Chief Financial Officer

Conference Call Participants

Mark Hughes - Truist Securities

Operator

Good day, and welcome to the AMERISAFE 2022 Fourth Quarter Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Kathryn Shirley. Please go ahead.

Kathryn Shirley

Good morning. Welcome to the AMERISAFE 2022 fourth quarter investor call. If you have not received the earnings release, it is available on our website at www.amerisafe.com. 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. 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 the result of risks, uncertainties and other factors, including factors discussed in today's earnings release, in the comments made during this call and in the Risk Factors 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.

Janelle Frost

Thank you, Kathryn, and good morning, everyone. We are pleased to report continued strong results for the fourth quarter and the full year of 2022. For the year, we reported a combined ratio of 83.6%, gross premiums written decline of less than 1 point despite rate pressure as loss costs continue to trend down, and an operating ROE of 16.5%. Our balance sheet remains strong with roughly $1 billion in investments in cash, a strong reserve position and no outstanding debt.

We continue to see strong retention in policies for which we offer renewal with 94.6% retention in fourth quarter. Our overall pricing, as measured by ELCM, was a 151 for the fourth quarter. As we look ahead, competitive pressures and loss cost declines are expected to remain a headwind, though we expect wage growth to be largely -- a largely mitigating factor in the near term.