Employers Holdings’ Q4 Results: Higher Net Premiums Earned, Yet Escalating Losses and Expenses Take a Toll
Employers Holdings, Inc. (EIG), a leading specialty insurer, recently reported its financial results for the fourth quarter and full year ended December 31, 2024. The company’s Q4 results showed a rise in net premiums earned, but this increase was partly offset by growing losses and loss adjustment expenses.
Net Premiums Earned
In the fourth quarter, Employers Holdings reported net premiums earned of $722.4 million, representing a 3.8% increase compared to the same period in 2023. For the full year, net premiums earned came in at $2.8 billion, up 6.1% from the previous year.
Escalating Losses and Expenses
Despite the increase in net premiums earned, the company’s Q4 results were marred by higher losses and loss adjustment expenses. The combined ratio, which measures underwriting profitability, worsened to 103.6% in Q4 2024, compared to 99.1% in Q4 2023. For the full year, the combined ratio was 100.8%, up from 98.5% in 2023.
Declared Dividend
Despite the challenges in the quarter, Employers Holdings’ management declared a first-quarter 2025 dividend of 30 cents per share, unchanged from the previous quarter.
Impact on Shareholders
The mixed Q4 results may not sit well with some shareholders, especially those who were expecting a stronger underwriting performance. The stable dividend, however, may provide some comfort to income-focused investors.
Impact on the Industry
Employers Holdings’ results reflect broader trends in the insurance industry, with rising losses and expenses putting pressure on underwriting profitability. These challenges are driven by factors such as increased frequency and severity of claims, as well as higher costs for loss adjustment and claims administration.
Impact on Policyholders
The escalating losses and expenses may lead to higher premiums for policyholders, as insurers look to maintain profitability. This could be a concern for businesses and individuals who rely on insurance to protect against risks.
Outlook for 2025
Looking ahead, Employers Holdings and other insurers will need to navigate these challenges in order to deliver sustainable growth and profitability. This may involve implementing new risk management strategies, investing in technology to improve claims handling, and pursuing strategic acquisitions to expand their product offerings and geographic reach.
- Rising losses and expenses are putting pressure on underwriting profitability in the insurance industry.
- Employers Holdings reported a combined ratio of 103.6% in Q4 2024, up from 99.1% in Q4 2023.
- Higher premiums for policyholders are a potential consequence of these challenges.
- Insurers will need to adopt new strategies to maintain profitability and growth.
Conclusion
Employers Holdings’ Q4 results show that the insurance industry is facing significant challenges, with rising losses and expenses putting pressure on underwriting profitability. While the company reported an increase in net premiums earned, this was not enough to offset the impact of these costs. Shareholders may be concerned by the mixed results, but the stable dividend may provide some comfort. Looking ahead, insurers will need to adopt new strategies to maintain profitability and growth, and policyholders should expect potential increases in premiums.
