Q1 2025 Employers Holdings Inc Earnings Call
Okay.
Operator: Good day and thank you for standing by.
Speaker Change: Good day, and thank you for standing by and welcome to the first quarter 2025 employers Holdings earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question during the session I need to press star one on your telephone you will then hear an automated message revising your hand is raised to withdraw your question. Please.
Operator: Welcome to the first quarter 2025 Employers Holdings Earnings Conference. At this time, all participants are on a list. After the speaker's presentation, there will be a question and answer session.
Operator: 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 To withdraw your question, please press star 1. please be advised that there's.
Speaker Change: Starwood in one 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 Chief Legal Officer. Please proceed.
Lori Brown: I would now like to hand the conference over to your speaker today, Lori Brown, Chief Legal Officer, Police. Thank you, Kevin.
Kathy Antonello: Good morning and welcome, everyone, to the first quarter 2025 earnings call for employers. Today's call is being recorded and webcast from the investor section of our website where a replay will be available following the call.
Lori Brown: Thank you Kevin Good morning, and welcome everyone to the first quarter of 2025 earnings call for employers today's call is being recorded and webcast from the investors section of our website, where a replay will be available following the call.
Kathy Antonello: Presenting today are Kathy Antonello, our chief executive officer, and Mike Padraha, our chief financial officer. 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 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.
Presenting today are Cathy Antonello, our Chief Executive Officer, and Mike <unk>, Our Chief Financial Officer 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 Securities Litigation Reform Act.
Lori Brown: Of 1995.
Lori Brown: 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.
Kathy Antonello: All remarks made during the call are current only at the time of the call and will not be updated to reflect subsequent development.
Lori Brown: All remarks made during the call are current only at the time of the call and will not be updated to reflect subsequent developments.
Kathy Antonello: 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 on 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.
Lori Brown: The company also uses its website as a means of disclosing material nonpublic information and for complying with disclosure obligations under the Sec's regulation FD such disclosures will be included in the investors section on our website.
Lori Brown: Accordingly investors should monitor that portion of our website. In addition to the following two following our press releases SEC filings public conference call and webcast.
Kathy Antonello: 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 of our website.
Lori Brown: Our earnings press release, and in our remarks or responses to your 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.
Lori Brown: Investor presentation, and any other materials available in the investors section of our website now I'll turn the call over to Kathy.
Kathy Antonello: Now, I'll turn the call over to Kathy. Thank you, Lori. Good morning, everyone, and welcome to our first quarter 2025 earnings call.
Kathy: Thank you Lori good morning, everyone and welcome to our first quarter 2025 earnings call.
Kathy Antonello: Today, we will follow our typical agenda where I will begin by providing highlights of our first quarter 2025 financial results.
Kathy: Okay. We will follow our typical agenda, where I will begin by providing highlights of our first quarter 2025 financial results.
Mike Padraha: I will then hand it over to Mike for more details on our financials.
Kathy: I will then hand, it over to Mike for more details on our financial Empire Q&A I will come back to you with some additional commentary.
Kathy Antonello: And prior to Q&A, I will come back to you with some additional commentary. Our first quarter net premium earned was relatively flat compared to 2024. This result was driven by higher renewal premium offset by lower new business and audit premium. Rate increases and underwriting actions taken to maintain our underwriting profitability targets in certain states impacted our new business premium, while final audit premium pickup and audit accruals decreased in line with the moderation of employment and wage growth. Despite these headwinds, employers ended the period with another record number of policies in force, with a year-over-year growth rate of 4 percent.
Kathy: Our first quarter net premium earned was relatively flat compared to 2024.
Kathy: This result was driven by higher renewal premium offset by lower new business and audit premium.
Kathy: Rate increases and underwriting actions taken to maintain our underwriting profitability targets in certain states impacted our new business premium well final audit premium pick up in order to cool decreased in line with the moderation of employment and wage growth.
Kathy: Despite these headwinds employers ended the period with another record number of policies in force with a year over year growth rate of 4%.
Kathy Antonello: We earned $32 million of net investment income during the quarter, an increase of 20% and meaningfully higher than any other quarter in our history as a publicly traded company. Our current accident year loss in LE ratio on voluntary business was 66% versus the 64% we maintained throughout 2024. This increase is consistent with our conservative reserving philosophy and the recent loss ratio and pricing trends experienced both at employers and within our industry.
Kathy: We earned $32 million of net investment income during the quarter, an increase of 20% and meaningfully higher than any other quarter in our history as a publicly traded company.
Kathy: Our current accident year loss and LAE ratio on voluntary business with 66% versus the 64% we maintained throughout 2020 or.
Kathy: This increase is consistent with our conservative reserving philosophy, and the recent loss ratio and pricing trends experience, both at employers and within our industry.
Kathy Antonello: Consistent with our normal practice, we did not perform a full loss reserve assessment, as full assessments are performed twice a year in the second and fourth quarters. will provide you with details of this analysis and any associated impact on prior year reserves next quarter. I'm pleased with the reductions we achieved in our underwriting expense ratio, which was 23.4% this quarter, down from 25% a year ago. We believe we'll achieve further expense ratio improvement throughout 2025.
Kathy: Consistent with our normal practice, we did not perform a full loss reserve assessment.
Kathy: Full assessments are performed twice a year in the second and fourth quarters.
Kathy: We will provide you with details of this analysis and any associated impact on prior year reserves next quarter.
Kathy: I am pleased with the reductions we achieved in our underwriting expense ratio, which was 23, 4% this quarter down from 25% a year ago.
Kathy: We believe we will achieve further expense ratio improvement throughout 2025.
Mike Padraha: With that, Mike will now provide a deeper dive into our financial results, and then I'll return to provide my closing remarks. Mike? Thank you, Kathy.
Kathy: With that Mike will now provide a deeper dive into our financial results and then I'll return to provide my closing remarks, Mike. Thank you Kathy as this is my first official call I'd like to thank Kathy Laurie and the broader employers team for welcoming me to this fantastic franchise I'm very excited about our prospects for everyone on the call and I look forward to meet.
Mike Padraha: As this is my first official call, I'd like to thank Kathy, Lori, and the broader employers team for welcoming me to this fantastic franchise. I'm very excited about our prospects. For everyone on the call, I look forward to meeting and working with you in the coming weeks. For the quarter, gross premiums written were $212 million, an increase of 1%. The increase was due to higher renewal of business, partially offset by lower new business, and final audit premium. As Kathy mentioned, prudent pricing actions and targeted underwriting changes implemented in certain states impacted our new business production.
Kathy: And working with you in the coming weeks.
Kathy: For the quarter gross premiums written were $212 million, an increase of 1%. The increase was due to higher renewal business, partially offset by lower new business in final audit premiums.
Kathy: As Kathy mentioned prudent pricing actions and targeted underwriting changes implemented in certain states impacted our new business production.
Mike Padraha: while final audit premiums decreased. Net premiums earned were $183 million, a decrease of 1%. During the period, our losses and loss adjustment expenses were $121 million versus $117 million a year ago. The increase was primarily due to higher current accident-near-loss and loss-adjustment expense ratio, which we increased from 64% to 66%. Commission expense was $23 million versus $25 million a year ago. And our commission expense ratio was 12.6 versus 13.6. The decreases were primarily related to the release of commissions payable associated with non-performing policies sent to collections. Underwriting expenses were $43 million vs. $46 million, and our underwriting expense ratio was 23.4% vs.
Kathy: While final audit premiums decreased.
Kathy: Net premiums earned were $183 million a decrease of 1%.
Kathy: During the period, our losses and loss adjustment expenses were $121 million versus $117 million a year ago.
Kathy: The increase was primarily due to higher current accident year loss and loss adjustment expense ratio, which we increased from 64% to 66%.
Kathy: Commission expense was 23 million versus $25 million a year ago.
Kathy: And our commission expense ratio was $12 six versus 13 six.
Kathy: The decreases were primarily related to the release of commissions payable associated with nonperforming policies.
Kathy: So collections.
Kathy: Underwriting expenses were $43 million versus $46 million and our underwriting expense ratio was 23, 4% versus 25%.
Mike Padraha: 25%. The reduction in this ratio was primarily the result of decreases in debt expense and compensation-related expenses. Our net investment income was $32 million versus $27 million a year ago, an increase of 20%. The increase was primarily due to returns from our investments in private equity limited partnerships, along with higher yields on our fixed maturities securities. These fixed maturity investments currently have a duration of 4.3 years and an average credit quality of A+. Our weighted average book yield was 4.5% at quarter ends, which is up nicely from 4.3% a year ago. Our quarterly net income of $12.8 million was unfavorably impacted by $9 million of net after-tax unrealized investment losses generated from equity securities and other investment holdings due to the recent U.S.
Kathy: The reduction in this ratio was primarily the result of decreases in bad debt expense and compensation related expenses.
Kathy: Our net investment income was $32 million versus $27 million a year ago.
Kathy: The increase of 20%.
Kathy: The increase was primarily due to returns from our investments in private equity limited partnerships, along with higher yields on our fixed maturities securities.
Kathy: These fixed maturity investments currently have a duration of four three years and an average credit quality of a plus.
Kathy: Our weighted average book yield was four 5% at quarter end, which is up nicely from four 3% a year ago.
Kathy: Our quarterly net income of $12 8 million was unfavorably impacted by $9 million of net after tax unrealized investment losses generated from equity securities and other investment holdings due to the recent U S capital market fluctuations.
Mike Padraha: capital market fluctuation. Our stockholders' equity was favorably impacted by $21 million of net after-tax unrealized gains generated from our fixed maturity investment. Our adjusted net income, which excludes unrealized investment gains and losses, and the benefit of our LPT deferred gain amortization, totaled $21.3 million, a 24 percent increase from last year's $17.2 million. During the first quarter, we repurchased $21 million of our common stock at an average price of $49.69 per share. And thus far, in the second quarter, we have repurchased an additional 170,000 shares of our common stock at an average price of $48.35 per share.
Kathy: Our stockholders' equity was favorably impacted by 21 million of net after tax unrealized gains generated from our fixed maturity investments.
Kathy: Our adjusted net income, which excludes unrealized investment gains and losses and the benefit of our LPT deferred gain amortization totaled $21 3, million% to 24% increase from last year's $17 2 million.
Kathy: During the first quarter, we repurchased $21 million of our common stock at an average price of $49 69 per share.
Kathy: And thus far in the second quarter, we repurchased an additional 170000 shares of our common stock at an average price of $48 35 per share.
Mike Padraha: On Wednesday, our Board of Directors authorized a new stock repurchase program to allow for repurchase of up to $125 million of our common stock over the 20-month period from May 6, 2025 to December 31, 2026. This new program replaces our existing program that was scheduled to expire on July 31st, 2025, but has been exhausted.
Kathy: On Wednesday, our board of directors authorized a new stock repurchase program to allow for repurchase of up to 125 $125 million of our common stock over the 20 months periods on May six 2025 through December 31 2026.
Kathy: This new program replaces our existing program that was scheduled to expire on July 31, 2025 that has been exhausted.
Mike Padraha: Also on Wednesday, our Board of Directors declared a 7% increase in our quarterly dividend to $0.32 per share. The dividend is payable on May 28th to stockholders of record on May 14th. We believe both actions, the increase in our quarterly dividend and the new stock repurchase program, are reflections of our confidence in employers' financial strength and financial prospects.
Kathy: Also on Wednesday, our board of directors declared a 7% increase in our quarterly dividend to <unk> 32 per share.
Kathy: The dividend is payable on May 28 to stockholders of record on May 14th.
Kathy: We believe both actions the increase in our quarterly dividend and a new stock repurchase program are reflections of our confidence employers financial strength and financial prospects.
Kathy Antonello: And now I will turn the call back to Katherine. Thank you, Mike. We continue to value profitability over growth and have identified a number of refinements in our underwriting and pricing approach that we believe will allow us to maintain our underwriting discipline while returning to moderate new business growth levels. Our Appetite Expansion Effort continues to identify areas of opportunity for profitable growth and our success has given us the confidence to accelerate this effort going forward. To date, we have not experienced negative impacts from the tariff discussions, but we intend to closely monitor the cost of prescription drugs and medical services for potential changes.
And now I will turn the call back to Kathy.
Speaker Change: Thank you, Mike we continue to value profitability over growth and have identified a number of refinements in our underwriting and pricing approach that we believe will allow us to maintain our underwriting discipline.
Kathy: Returning to moderate new business growth levels.
Kathy: Our appetite expansion effort continues to identify areas of opportunity for profitable growth and our success has given us the confidence to accelerate this effort going forward.
Kathy: To date, we have not experienced negative impacts from the tariff discussions, but we intend to closely monitor the cost of prescription drugs and medical services for potential changes.
Kathy Antonello: If any recessionary headwinds emerge, we are cautiously optimistic that our deep relationships with our customers and agents, our product and service value proposition, and our geographic and industry segment diversification will allow us to maintain our strong customer base and weather the storm. I'm very pleased with the team's continued focus on expense management and our prudent capital management. We continue to improve our key operating metrics, which is a clear indication of our success. After considering dividends declared, our book value per share, including the deferred gain, increased 14% to $48.25, and our adjusted book value per share increased by 9% to $50.75 over the last 12 months.
If any recessionary headwinds emerge we are cautiously optimistic that our deep relationship with our customers and agents, our product and service value proposition and our geographic and industry segment diversification will allow us to maintain our strong customer base and weather the storm.
Kathy: I'm very pleased with the team's continued focus on expense management and our prudent capital management.
Kathy: Continue to improve our key operating metrics, which is a clear indication of our success.
Kathy: After considering dividends declared our book value per share, including the deferred gain increased 14% to $48.
Kathy: And our adjusted book value per share increased by 9% to $50 75.
Kathy: The last 12 months.
Kathy Antonello: And finally, we returned $27.5 million to our shareholders this quarter through a combination of regular quarterly dividends and share repurchases at an average price that was accretive to our adjusted book value per share.
Kathy: And finally, we returned 27 $5 million to our shareholders. This quarter through a combination of regularly regular quarterly dividends and share repurchases at an average price that was accretive to our adjusted book value per share.
Kathy Antonello: As Mike mentioned, we're pleased to be in a strong financial position, which allows us to declare a dividend increase and a new share repurchase authorization.
Speaker Change: As Mike mentioned, we're pleased to be in a strong financial position, which allows us to declare a dividend increase and a new share repurchase authorization.
Operator: And with that, Kevin, we will now take questions. Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 1-1 on your telephone. If your question has been answered and you wish to remove yourself from the queue, please press star one. We'll pause for a moment while we compile our Q&A.
Kathy: And with that Kevin we will now take questions.
Kathy: Thank you ladies and gentlemen, if you have a question or comment at this time. Please press star one on your telephone. If your question has been answered you where she was yourself from the queue. Please press star one again, we will pause for a moment, while we compile the Q&A roster.
Mark Hughes: My first question comes from Mark Hughes with Truist, your line is open. Yeah, thank you. Good morning. Good morning, Mark.
Mark Hughes: First question comes from Mark Hughes with <unk>. Your line is open.
Speaker Change: Yes. Thank you good morning.
Speaker Change: Good morning, Mark.
Kathy Antonello: Kathy, could you talk about any specifics you might be able to share regarding those loss trends? Meaningful action here to protect the balance sheet and as you say, focus on profitability. What are you seeing and can you characterize, you know, how Broad, that is, in terms of geography. Sure, so you're referring, I assume, to the increase in our accident year loss in LAE ratio from 64 percent to 66. percent in 2025. Okay, yeah. So, you know, the higher 2025 ratio reflects a few things that we're seeing. The first is the ongoing competitive rate environment. That's first and foremost.
Mark Hughes: Kathy could you talk about.
Speaker Change: Any specifics you might be able to share regarding those loss trends.
Speaker Change: You've taken some.
Speaker Change: Meaningful action here to protect the balance sheet and as you say focus on profitability.
Speaker Change: What are you seeing and can you characterize how.
Speaker Change: Broad that is in terms of geography.
Speaker Change: Sure so you're referring to.
Speaker Change: The increase in our accident year loss and LAE ratio from 64% 66.
Speaker Change: <unk> and 'twenty exactly 25, okay. Yeah. So the higher 2025 ratio reflects a few things that we're seeing the first is the ongoing competitive rate environment, that's first and foremost.
Kathy Antonello: But we're also seeing some pressure on acting years 2023 and 2024. We've also, along with the California Bureau, seen a rise in cumulative trauma claims in California in the more recent accident years. And then we finally, it's, it's. some of the overall decrease in favorable development that the industry has seen in recent years, we're factoring that in. So, you know, those four things together made us feel that we should increase our current accident-year loss ratio. You know, having said all that, the increase is directionally consistent with what we're seeing across the entire work comp industry, and the overall selection of 66 is below what we've seen as an industry average, which has been in the range of 69 to 70% in recent years.
We're also seeing some pressure on accident years, 2023 and 2024.
Speaker Change: We've also along with the California Bureau seen a rise in Q.
Speaker Change: Cumulative trauma claims in California, and the more recent accident years.
Speaker Change: And then we.
Finally as is.
Speaker Change: Some of the overall decrease in favorable development that the industry has seen in recent years, we're factoring that in so those four things together.
Speaker Change: Made us feel that we should increase our current accident year loss ratio.
Speaker Change: Having said all of that.
Speaker Change: The increase is directionally consistent with what we're seeing across the entire work comp industry and the overall selection of 66 is below what we've seen as an industry average which has been in the range of 69% to 70%.
Speaker Change: In recent years.
Kathy Antonello: So, you know, we have taken, I mentioned in our prepared remarks that we've taken some targeted pricing and underwriting actions in Q1. We're still refining those. So, you know, that's part of this effort, but high level, those are the things that we're seeing.
Speaker Change: So we have taken and I mentioned in our prepared remarks that we've taken some targeted pricing and underwriting actions in Q1, we're still refining those.
Speaker Change: So that's part of this effort, but high level those are the things that we're seeing.
Kathy Antonello: Yeah, how about underlying medical inflation if you look at frequencies, severity, cost of treatments, you name it. Is there any change there? I hear you on the cumulative trauma, but how about the other drivers? Yeah, you know, we keep an eye on frequency and severity. When we look at our, you know, based on on-level premium, as we do in rate making, our lost time claim frequencies have really continued to, generally speaking, now it varies by state, but they generally continue to turn downward over the last several years. Although, and I say it varies by state, in California, we did see an uptick in the latest accident year, and that is almost all attributable to the cumulative trauma claims that we're seeing, similar to what the Bureau is seeing.
Speaker Change: Yes.
Speaker Change: How about underlying medical inflation, if you look at frequency severity.
Speaker Change: Cost of treatment.
Speaker Change: You name it.
Speaker Change: Is there any change there I hear you on the cumulative trauma, but how about the other drivers of medical expenses.
Speaker Change: Yeah.
Speaker Change: We will keep an eye on frequency and severity when we look at our.
Speaker Change: Based on on level premium as as we do and making our lost time claim frequencies have really continued said generally speaking now it varies by state, but they generally continue to trend downward over the last several years.
Speaker Change: Although when I say it varies by state and California, We did see an uptick in the latest accident year and that is almost all attributable to the cumulative trauma claims that we're seeing similar to what the Bureau is seeing.
Kathy Antonello: Our overall severity values have pretty much held steady in the more recent years, and are below what we saw pre-pandemic level, and that's driven by lower medical severity. And then on the indemnity side, it's trending about the same as wage inflation. And when I hear cumulative trauma My radar goes up a little bit, and I wonder whether that's... you know, maybe caused by the macro conditions, somebody's looking for a wage replacement. I know you cover accumulative trauma, and there's... You know, plenty of support within the system for that, but it always sounds to me like a little aggressive on the part of the claimants.
Speaker Change: Our overall severity values have pretty much held steady in the more recent years.
Speaker Change: And are.
Speaker Change: Below what we saw pre pandemic level and thats driven by lower medical severity.
Speaker Change: And then on the indemnity side, it's trending about the same as wage inflation.
Speaker Change: Yes.
Speaker Change: Here cumulative trauma.
Speaker Change: My radar goes up a little bit and I wonder whether that.
Speaker Change: Yes, maybe caused by the macro conditions somebody's looking for wage replacement view.
Speaker Change: I know you cover accumulative drama on theirs.
Speaker Change: Plenty of support within the system for that but.
Speaker Change: It sounds to me like.
Speaker Change: That's a little aggressive on the part of the claimants.
Kathy Antonello: Can you talk me out of that or you know address whether there might be macroeconomic contribution to those claims. Yeah, it's an interesting question because, you know, these are arising from accident year 2024 is what we're seeing now and what we're reacting to. And so I can't point to anything in the macro environment in 2024 that would have caused this, so it sort of is an interesting phenomenon. I can say that it is only in California and we know that there are provisions in California that allow cumulative trauma claims to be filed post termination of an employee.
Speaker Change: Can you talk me out of that or address whether there might be some <unk>.
Speaker Change: Macro economic contribute contribution to the those claims.
Speaker Change: Yes. It is.
Speaker Change: Same question.
Speaker Change: These are arising from.
Speaker Change: Accident year 2024, it's what we're seeing now and what we're reacting to.
Speaker Change: And so I can't point to anything in the macro environment in 2024 that would have caused us so it sort of is.
Speaker Change: And interesting phenomenon.
Speaker Change: Can't say that it is only in California, and we know that there are.
Speaker Change: Provisions in California that allow cumulative trauma claims to be filed post termination of an employee.
Kathy Antonello: California is the only state, to my knowledge, that allows that. And so, as you mentioned, you know, these claims on post that come in post-term, there's no return to work potential. They have high PD, you know, some cumulative work stress usually associated with them. They usually come in the door with an attorney. So, it's just a California phenomenon.
Speaker Change: California is the only state to my knowledge that allows that.
Speaker Change: And so as you mentioned these claims on posts.
Speaker Change: They come in post term Theres now returned to work potential they have high PD in some cumulative work stress usually associated with them, they're usually come in the door with an attorney.
Speaker Change: So it's just a california phenomenon it would be great to see that remedied.
Kathy Antonello: It would be great to see that remedied. But, yeah, I don't see, I mean, back to your original question, I don't see anything in the 2024 macro environment that has caused this. Is that, we'll put it under the social inflation, the attorneys are getting more aggressive and getting the word out. So, as you say, they usually show up with an attorney. Would that be a... Yeah. Yeah, I'm good. I would say that that's an accurate representation. Yeah, okay. Yeah.
Speaker Change: But yes.
Speaker Change: Yes, that's I don't see I mean back to your original question I don't see anything in the 2020 full or macro environment that.
Speaker Change: It has cost us.
Speaker Change: Is that.
Speaker Change: Put it under the social inflation, the attorneys are getting more aggressive and getting the word out.
Speaker Change: So as you say, they usually show up with an attorney.
Speaker Change: Yes.
Speaker Change: I would say that that's an accurate representation.
Speaker Change: Yeah Okay.
Speaker Change:
Kathy Antonello: I mean, the one thing I would add to that is you've probably seen that the WCIRB has recommended an 11.2% increase in their pure premium rates, effective 9-1 of 2025. And, you know, while there were many things going on that caused that 11.2% increase to be filed, one of them that was called out in the filing was the cumulative trauma claim.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: The one thing I would add to that is.
Speaker Change: And you've probably seen that the WC our RB two <unk> has recommended an 11, 2% increase.
Speaker Change: They're pure premium rates.
Speaker Change: Effective 91 of 2025 and.
Speaker Change: While there are many things going on that caused that 11, 2% increase to be filed one of them that was called out in the filing was the cumulative trauma claims.
Kathy Antonello: Yeah, and am I still right in thinking the uh... rate filings or advisories. that may influence the behavior of carriers that if they're, you know, looking for references, they'll, you know, if the state says up 11, then maybe they'll, that'll move the The benchmark competitive level up a bit, but it's not binding by any means. Is that a fair way to describe it? That is correct. In California, their advisory, you know, any individual carrier is going to look at their own book of business and it's going to vary dramatically both from each other and the statewide data.
Speaker Change: Yeah, and I'm I feel right in thinking.
Rate filings.
Speaker Change: Advisory.
Speaker Change: That may influence the behavior of carriers.
Speaker Change: Did it there.
Speaker Change: Looking for references Bill.
Speaker Change: If the state does up 11, and then maybe.
Speaker Change: That will move that.
Speaker Change: The benchmark competitive level off a bit but it is not binding by any means is that is that a fair way to describe it.
Speaker Change: That is correct and California, there are advisory.
Speaker Change: Any individual carrier is going to look at their own book of business and it's going to vary dramatically both from each other and the statewide data.
Kathy Antonello: And so I believe California has plus or minus 50 percent schedule rating. And so we do have a lot of flexibility in California. And, you know, we'll do what's right for our book of business. Yeah. Very good.
Speaker Change: And so I believe, California has plus or minus 50% schedule rating and so we do have a lot of flexibility and in California, and we'll do what's right for our book of business.
Speaker Change: Yes.
Mark Hughes: I'll just ask one more.
Speaker Change: <unk>.
Speaker Change: Very good I'll just ask one more.
Kathy Antonello: Apologize for going on, but what do you think is going to show up when the NCCI does the State of the line, how do you see kind of redundancy across the industry? Interested on the Gallagher call, they said workers' comp rates that they had said were up 1%. Q4 were up 5% in Q1. I thought that was kind of striking. Not the usual description of what's going on, but what do you think, NCCI? going to say about the Industry Fundamentals. You know, we'll know in a couple of weeks, but I would say, you know, generally speaking, what we have been seeing is, it seems like the reserve redundancies, while there are still significant redundancies in the industry, it seems like carriers are reducing a little bit less and maybe that's just cautionary.
Speaker Change: I apologize for going on but what do you think it's going to show up in <unk>.
Speaker Change: State of the line, how do you see kind of redundancy.
Speaker Change: Across the industry.
Speaker Change: Interested on the Gallagher call. They said workers' comp rates that they had said were up 1% in.
Speaker Change: In Q4 up 5% in Q1.
Speaker Change: I thought that was the.
Speaker Change: Kind of striking.
Speaker Change: Okay.
Speaker Change: The usual description of what's going on but what do you think <unk> is going to go to say about the.
Speaker Change: Industry fundamentals.
Speaker Change:
Speaker Change: You know, we'll know in a couple of weeks, but.
Speaker Change: I'd say generally speaking what we have been seeing is.
Speaker Change: It seems like the reserve redundancies, while there are still significant redundancies in the industry it seems like.
Speaker Change: Carriers are reducing a little bit less and maybe thats just cautionary.
Kathy Antonello: And from a rate environment, when we look at our own internal rates, you know, year over year, a rolling 12 months, we were flat, but when I looked at 6 months over 6 months, we were up between 4 and 5%. Now, so on a rolling 12 months, you're flat rolling six months, you're up toward Correct. Yeah, so not too different from what you said you saw in a recent report. Yeah, yeah, that was Gallagher's feedback on their conference call last night.
Speaker Change: And.
Speaker Change: From a rate environment.
Speaker Change: When we look at our own internal rates of year over year, a rolling 12 months, we were flat, but when I looked at six months over six months, we were up between four and 5%.
Speaker Change: So on a rolling 12 months Youre flat rolling six months Youre up 2% to 5%.
Speaker Change: Yes.
Speaker Change: Two different from what you were.
You said you saw in a recent report.
Speaker Change: Yes, yes.
Speaker Change: Gallagher's feedback.
Speaker Change: On their conference call with Brian Okay.
Mark Hughes: Okay, thank you very much for all the all the detail. Appreciate it. Okay, thank you, Mark.
Speaker Change: Thank you very much for all the all the detail I appreciate it.
Mark Hughes: Okay. Thank you Mark.
Operator: Again, ladies and gentlemen, if you have a question or a comment at this time, please press star 1, 1 on your... I'm not showing any further requests at this time.
Speaker Change: Again, ladies and gentlemen, if you have a question or comment at this time. Please press star one on your telephone.
Speaker Change: I'm not showing any further question at this time I'd like to turn the call back over to Kathy for any further remarks.
Kathy Antonello: I turn the call back over to Kathy Antonello. Okay, thanks, Kevin, and thank you, everyone, for joining us this morning, and we look forward to meeting with you again in July when we report our second quarter numbers. Thank you.
Kathy: Okay. Thanks, Kevin and thank you everyone for joining us this morning, and we look forward to meeting with you again in July when we report our second quarter numbers.
Operator: Ladies and gentlemen, this does conclude today's presentation.
Speaker Change: Thank you ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.
Operator: You may now disconnect and have a Thanks for watching!
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].