AMERISAFE, Inc. (NASDAQ:AMSF) Q1 2022 Earnings Conference Call April 28, 2022 10:30 AM ET

Company Participants

Kathryn Shirley - Chief Administrative Officer

Janelle Frost - President and Chief Executive Officer

Neal Fuller - Chief Financial Officer

Conference Call Participants

Matt Carletti - JMP

Mark Hughes - Truist

Operator

Good day and welcome to the AMERISAFE 2022 First Quarter Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Kathryn Shirley, Chief Administrative Officer. Please go ahead, ma’am.

Kathryn Shirley

Good morning. Welcome to the AMERISAFE 2022 first quarter investor call. If you have not received the earnings release, it is available on our website at 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 a result of risks, uncertainties and other factors, including factors discussed in today’s earnings release and 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. Our combined ratio of 80.1% this quarter was supported by strong policy retention, favorable prior year case development, better-than-expected insured payrolls and a reduction in assessments. I will address premiums, losses and payrolls and Neal will speak to the reduction in assessments and other financial metrics. Premium written in the quarter were down – premiums written in the quarter were down 4.6% from the first quarter of 2021. We continue to face competitive marketplace as carriers seek market share and premium in a declining rate environment.

Our average loss cost decline in the quarter was 8.2%. Our ELCM, which is an index of the approved loss costs, was a 154 same as first quarter of 2021. In holding our discipline and responding to competition, we were successful in retaining 93% of the accounts for which we offered renewal. But overall policy count was down 1.1%. Additive to the top line was higher-than-expected policyholder payrolls. Audit premium and related adjustments increased premium $2.8 million in the quarter, which was a marked improvement over $300,000 reported in the same quarter of 2021.