UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number: 001-12251 AMERISAFE, INC. (Exact Name of Registrant as Specified in Its Charter) Registrant's telephone number, including area code: (337) 463-9 ...

Financial Data and Key Metrics Changes - For Q1 2025, Amerisafe reported net income of $8.9 million or $0.47 per diluted share, down from $16.9 million or $0.88 per diluted share in Q1 2024 [11] - Operating net income decreased to $11.4 million or $0.60 per diluted share from $13.3 million or $0.69 per diluted share year-over-year [11] - Gross written premiums increased by 4.6% to $83.8 million compared to $80.1 million in Q1 2024 [11] - Net premiums earned rose by 60 basis points to $68.9 million from $68.4 million in the prior year [12] - The expense ratio increased to 29.9% from 27.3% due to higher expenses related to business investments [12][13] Business Line Data and Key Metrics Changes - Premiums on policies written in the quarter grew by 7.1% over the prior year quarter, with a retention rate of 93.1% [7][8] - The company experienced $5 million from payroll audits and other premium adjustments, down from $6.4 million in the previous year [8] Market Data and Key Metrics Changes - The competitive environment remains strong, driven by declining workers' compensation rates and challenges in other property and casualty lines [5][6] - The company noted a favorable frequency trend in claims, with a current accident year loss ratio of 71, consistent with the prior year [8] Company Strategy and Development Direction - Amerisafe continues to focus on incremental growth within its existing geographic footprint and risk appetite, leveraging relationships with agents and policyholders [5] - The company is investing in business growth despite a competitive market, aiming to maintain profitability [12] Management Comments on Operating Environment and Future Outlook - Management expressed caution regarding economic uncertainties such as tariffs, inflation, and interest rates, which could impact payrolls and premiums [6] - The company anticipates favorable frequency trends to continue, with modest severity trends expected [9] Other Important Information - The investment portfolio is of high quality, with a tax-equivalent book yield of 3.85% and a strong capital position [14][15] - Book value per share was reported at $13.69, with a statutory surplus of $243.6 million, up 3.6% from the previous year [15] Q&A Session Summary Question: Audit premium impact on previous quarters - Management provided audit premium figures for the previous year: Q1 was $6.4 million, Q2 was $7.3 million, Q3 was $4 million, and Q4 was $2.5 million [22][24] Question: Impact of recent hurricanes on work activity - There was a slight increase in audit premiums for rebuilding classifications in North Carolina and Georgia, but not as much in Florida [26] Question: Potential tariff impacts on business - Tariffs could impact medical costs, particularly in pharmacy and durable medical equipment, which account for about 15% of medical costs in workers' compensation [29] Question: Changes in competitive dynamics - There has been no significant change in the competitive landscape during the first quarter [35] Question: Expense ratio and future expectations - The increase in the expense ratio was approximately $1.9 million, and costs are expected to moderate as the year progresses [37] Question: State loss cost updates - The trend remains a decline in rates, with average decreases between 6% to 8% across states [39] Question: Medical inflation trends - There are increases in physician care costs, likely due to labor costs rather than tariffs [41] Question: Large losses in the quarter - The company reported two large losses in the quarter, which is below trend [56]

Group 1 - Amerisafe reported $75.75 million in revenue for Q1 2025, a year-over-year decline of 0.3% [1] - The EPS for the same period was $0.60, down from $0.69 a year ago, with a surprise of +1.69% compared to the consensus estimate of $0.59 [1] - The revenue fell short of the Zacks Consensus Estimate of $76.83 million, resulting in a surprise of -1.41% [1] Group 2 - Key metrics indicate that Amerisafe's net investment income was $6.65 million, below the average estimate of $6.85 million, reflecting a year-over-year decline of 9.7% [4] - Fee and other income reached $0.21 million, exceeding the estimated $0.18 million, marking a significant increase of 70.7% compared to the previous year [4] - Net premiums earned were reported at $68.89 million, slightly below the average estimate of $69.81 million, with a year-over-year increase of 0.6% [4] Group 3 - Amerisafe's stock has returned -6.7% over the past month, compared to a -0.8% change in the Zacks S&P 500 composite [3] - The company currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Amerisafe reported quarterly earnings of $0.60 per share, exceeding the Zacks Consensus Estimate of $0.59, but down from $0.69 per share a year ago, indicating a mixed performance in earnings despite a slight surprise [1][2] Earnings Performance - The company achieved an earnings surprise of 1.69% for the recent quarter and had a previous quarter surprise of 11.67% with earnings of $0.67 per share against an expectation of $0.60 [1][2] - Over the last four quarters, Amerisafe has surpassed consensus EPS estimates three times [2] Revenue Analysis - Amerisafe's revenues for the quarter ended March 2025 were $75.75 million, which missed the Zacks Consensus Estimate by 1.41% and decreased from $75.94 million year-over-year [2] - The company has only topped consensus revenue estimates once in the last four quarters [2] Stock Performance - Amerisafe shares have declined approximately 4.9% since the beginning of the year, while the S&P 500 has seen a decline of 6% [3] - The immediate price movement of the stock will largely depend on management's commentary during the earnings call [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.55 on revenues of $77.84 million, and for the current fiscal year, it is $2.25 on revenues of $313.17 million [7] - The estimate revisions trend for Amerisafe is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Insurance - Accident and Health industry is currently ranked in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Net premiums earned for Q1 2025 were $68,885,000, a slight increase of 0.6% from $68,446,000 in Q1 2024[3] - Net income for Q1 2025 decreased by 47.1% to $8,949,000 compared to $16,925,000 in Q1 2024[3] - Diluted earnings per share (EPS) fell by 46.6% to $0.47 in Q1 2025 from $0.88 in Q1 2024[3] - Gross premiums written increased by 4.6% to $83,784,000 in Q1 2025, up from $80,074,000 in Q1 2024[4] - The net combined ratio for Q1 2025 was 89.1%, compared to 87.3% in Q1 2024[4] - Net investment income decreased by 9.7% to $6,652,000 in Q1 2025 from $7,366,000 in Q1 2024[7] - The underwriting expense ratio increased to 29.9% in Q1 2025, up from 27.3% in Q1 2024, reflecting continued investment in the business[6] - The effective tax rate for Q1 2025 was 20.2%, compared to 18.4% in Q1 2024[6] Shareholder Information - Book value per share at March 31, 2025, was $13.69, a decrease of 13.0% from $15.74 at the same time last year[3] - The company declared a quarterly cash dividend of $0.39 per share, representing a 5.4% increase compared to 2024[8] Asset and Liability Changes - Total assets decreased slightly from $1,157,791 million in December 2024 to $1,156,717 million in March 2025, a decline of 0.09%[27] - Investments decreased from $788,778 million to $781,012 million, a reduction of approximately 0.98%[27] - Premiums receivable, net increased from $142,659 million to $156,746 million, reflecting a growth of 9.87%[27] - Reserves for loss and loss adjustment expenses decreased from $651,309 million to $639,965 million, a decline of 1.84%[27] - Unearned premiums increased from $121,926 million to $132,646 million, an increase of 8.77%[27] - Shareholders' equity increased from $257,341 million to $260,813 million, a growth of 1.93%[27] - Other liabilities decreased from $112,363 million to $107,405 million, a reduction of 4.03%[27] - Amounts recoverable from reinsurers decreased from $117,019 million to $114,278 million, a decline of 2.35%[27] - Deferred policy acquisition costs increased from $19,151 million to $20,422 million, an increase of 6.64%[27] - Cash and cash equivalents increased slightly from $44,045 million to $44,753 million, a growth of 1.60%[27]

Core Viewpoint - Amerisafe (AMSF) shares have increased by approximately 4.3% since the last earnings report, outperforming the S&P 500, raising questions about the sustainability of this positive trend leading up to the next earnings release [1] Group 1: Earnings Report and Estimates - Recent estimates for Amerisafe have trended upward over the past month, indicating a positive outlook for the company [2][4] - The stock has received a Zacks Rank of 2 (Buy), suggesting expectations for above-average returns in the coming months [4] Group 2: VGM Scores - Amerisafe currently holds a poor Growth Score of F, a Momentum Score of D, and a Value Score of D, placing it in the bottom 40% for the value investment strategy [3] - The overall aggregate VGM Score for Amerisafe is F, which is a critical metric for investors not focused on a single strategy [3]

Premiums and Business Performance - The company reported gross premiums written of $294.1 million for the year ended December 31, 2024, an increase from $285.4 million in 2023 and $276.1 million in 2022[44]. - The voluntary business accounted for 97.2% of total gross premiums written in 2024, with a policy renewal rate of 94.2%[36][44]. - In 2024, 14.7% of gross premiums written were derived from Florida, followed by Georgia at 10.3% and Pennsylvania at 7.2%[47]. - Independent agencies accounted for 98.4% of voluntary in-force premiums as of December 31, 2024, with no single agency exceeding 2.0%[49]. - As of December 31, 2024, the company had over 9,300 voluntary business policyholders, with the ten largest accounting for only 2.3% of in-force premiums[36]. - The company derived 3.9% of its voluntary in-force premiums from employers engaged in the maritime industry for the year ended December 31, 2024[158]. - In 2024, 85.4% of gross premiums written were derived from policyholders in the construction, trucking, logging and lumber, agriculture, manufacturing, maritime, and telecommunications industries[186]. Underwriting and Risk Management - The company has a disciplined underwriting approach, with a focus on maintaining adequate rate levels and improving risk selection and pricing[27]. - The underwriting strategy focuses on hazardous industries in profitable states, with specific guidelines excluding certain high-risk activities[50]. - The company’s expense ratio was 29.6% in 2024, which is believed to be lower than that of competitors, enhancing the opportunity for underwriting profit[26]. - The company’s proactive claims management practices resulted in an average of 44 open indemnity claims per field case manager as of December 31, 2024, significantly lower than the industry average[25]. - The company conducts annual premium audits for all voluntary business policyholders to verify payroll expenses and job classifications[62]. - The company stopped accepting direct assignments and only participates in pooling arrangements to fulfill its residual market obligations beginning in 2023[155]. Claims and Reserves - As of December 31, 2024, the company's ultimate liability for loss and loss adjustment expenses is estimated at $538.6 million, including $13.0 million for mandatory pooling arrangements[79]. - The gross unpaid loss, DCC, and AO reserves decreased to $651.3 million in 2024 from $673.9 million in 2023, primarily due to favorable development from prior accident years[87]. - The average unpaid loss and loss adjustment expenses per open claim increased to $171,487 in 2024 from $168,372 in 2023[87]. - The total incurred related to the current accident year for 2024 was $192.2 million, compared to $189.7 million in 2023[86]. - The company recognized $34.9 million of favorable development for prior accident years in 2024[87]. - The company’s loss reserves are based on estimates and may be inadequate to cover actual losses, with substantial judgment required to determine the relevance of historical experience[187]. Investment Portfolio - As of December 31, 2024, the carrying value of the investment portfolio was $832.8 million, while the fair value was $819.5 million[94]. - The majority of fixed maturity securities are classified as "held-to-maturity," with changes in non-credit related unrecognized gains and losses not reflected until realized[97]. - The pre-tax investment yield for the twelve months ended December 31, 2024, was 3.4% per annum[99]. - The average composite rating of the investment portfolio, excluding equity holdings, was "AA-" as of December 31, 2024[104]. - The company limits holdings in equity securities to the lesser of 10% of the investment portfolio or 30% of shareholders' equity, on a fair value basis[97]. - The company periodically reviews its investment portfolio with the risk committee of the board of directors for compliance with the investment policy[96]. Reinsurance - The company has a reinsurance treaty program providing coverage for each loss occurrence up to $100.0 million, with a retention of $2.0 million for each occurrence[109][111]. - Total amounts recoverable from reinsurers as of December 31, 2024, were $117.3 million, net of an allowance for credit losses of $300, resulting in $117.0 million recoverable[116]. - The company evaluates the financial condition of reinsurers and monitors credit risk concentrations continuously to minimize exposure to significant losses[108]. - The company has 26 reinsurers participating in its 2025 reinsurance program, with most rated "A" or better by A.M. Best[113][114]. - The company remains liable to policyholders even if it is unable to recover amounts due from reinsurers, exposing it to credit risk[210]. Regulatory and Compliance - The company is subject to periodic examinations by state insurance departments, with recent examinations covering calendar years 2018 through 2021[151]. - The company is required to participate in residual market programs, which provide workers' compensation insurance to employers unable to obtain coverage[154]. - The company is subject to extensive regulation, which may limit its ability to obtain premium rate increases or take actions to increase profitability[195]. - The company must maintain minimum capital and surplus of $2.0 million under Nebraska law and $5.0 million under Texas law[165]. Employee and Community Engagement - The company has established an endowment to provide scholarships to dependents of employees and community members, emphasizing its commitment to education[131]. - The company invests in employee professional development, including insurance certification programs and leadership training[133]. - The company has launched a new committee to focus on charitable giving and corporate volunteering efforts, enhancing community engagement[130]. - As of December 31, 2024, the company had 362 full-time employees, with an average employee tenure of 10.0 years and 61% of the workforce being female[132].

AMERISAFE, Inc. (NASDAQ:AMSF) Q4 2024 Earnings Conference Call February 27, 2025 10:30 AM ET Company Participants Kathryn Shirley - Chief Administrative Officer Janelle Frost - President & Chief Executive Officer Andy Omiridis - Executive Vice President & Chief Financial Officer Conference Call Participants Mark Hughes - Truist Matt Carletti - Citizens JMP Bob Farnam - Janney Operator Good day, and welcome to the AMERISAFE fourth quarter 2024 earnings call. Today's conference is being recorded. At this time ...

Financial Data and Key Metrics Changes - AMERISAFE reported net income of $13.2 million or $0.69 per diluted share for Q4 2024, down from $19.2 million or $1 per diluted share in Q4 2023 [13] - For the full year, net income was $55.4 million compared to $62.1 million in 2023, while net operating income decreased to $48.4 million from $55.9 million [14] - The combined ratio improved to 88.7% with a return on equity (ROE) of 20.2% [8][11] Business Line Data and Key Metrics Changes - Gross premiums written increased by 3.9% in Q4 and 3.1% for the full year, with voluntary premiums rising by 8.5% in Q4 and 4.6% for the year [6] - The enforced policy count grew by 9.6% for the year, indicating strong premium retention and new business production [6][7] Market Data and Key Metrics Changes - The accident year loss ratio remained steady at 71%, consistent with the prior year, with favorable development from prior accident years amounting to $9.7 million in Q4 and $34.9 million for the full year [10] - The investment portfolio's net investment income decreased by 14.4% to $6.9 million for Q4 and by 6.8% to $29.2 million for the full year [17] Company Strategy and Development Direction - The company is focused on top-line growth while maintaining consistent underwriting margins, emphasizing the importance of agent relationships and a sales-driven culture [6][8] - AMERISAFE aims to identify and ensure profitable high-risk, high-hazard risks to offset broader market challenges [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a competitive landscape and maintain strong policy retention [11][79] - The outlook for the construction industry remains positive, with expectations of continued payroll growth and opportunities for business [74][79] Other Important Information - The Board of Directors approved a 5.4% increase in the regular dividend to $0.39 per share [11] - The company reported a book value per share of $13.51 after paying a special dividend, reflecting an 11.6% decrease from year-end 2023 [21] Q&A Session Summary Question: Can you provide context for the 9.6% policy count growth? - Management clarified that the 9.6% growth was for the entire year, with a 2.6% growth in the fourth quarter [24][28] Question: How has the average policy size trended? - The average policy size for 2024 was slightly lower than in 2023, with a noted decrease in average wages in Q4 [34] Question: What impact did renewal rates have on the top line? - Renewal rates were strong, with a policy retention rate of 94.1% on a policy basis and 88% on a premium basis [37] Question: How are claims from prior years developing? - Favorable development from prior accident years was noted, with significant contributions from 2022 and earlier years [39] Question: What is the outlook for the construction industry? - Management believes the construction industry remains strong, with payroll growth and opportunities for business despite potential economic challenges [74][79] Question: How many large claims were there in 2024? - The company reported 18 claims over a million dollars, which is consistent with the five-year average [81] Question: Any updates on medical inflation and reimbursement rates? - No significant changes were noted, but home health costs remain a focus due to their impact on larger claims [86] Question: What is the outlook for audit premiums? - Management expects audit premiums to remain positive in 2025, despite potential deceleration in year-over-year comparisons [102] Question: Have competitors become more aggressive in the workers' comp market? - The market remains competitive, but AMERISAFE is prepared to handle competitors entering the high hazard space [104]

Core Viewpoint - AMERISAFE, Inc. reported mixed financial results for the fourth quarter and full year of 2024, with adjusted earnings per share beating estimates but overall revenues and net income declining year over year [1][3]. Group 1: Fourth Quarter Performance - Adjusted EPS for Q4 was 67 cents, exceeding the Zacks Consensus Estimate by 11.7%, but down 9.5% from the previous year [1]. - Operating revenues decreased by 0.5% year over year to $73.5 million, missing the consensus mark by 4.9% [1]. - Net premiums earned rose by 1.2% year over year to $66.5 million but fell short of estimates by 4.6% [4]. - Net investment income dropped 14.4% year over year to $6.9 million due to reduced investable assets [4]. - Total expenses increased to $57.3 million in Q4, up from $56.2 million a year ago [5]. - The net combined ratio worsened by 60 basis points year over year to 86.1%, although it was better than the consensus estimate of 90.95% [5]. Group 2: Full-Year Performance - Full-year operating revenues were $300.1 million, slightly up from $299 million the previous year [3]. - Total expenses rose to $240 million from $229.5 million in the prior year [3]. - Operating earnings per share decreased to $2.53 from $2.91 year over year [3]. - Net income fell to $55.4 million from $62.1 million a year ago [3]. - Pre-tax underwriting profit declined by 18.6% year over year to $30.6 million [3]. Group 3: Financial Position - As of December 31, 2024, cash and cash equivalents increased to $44 million from $38.7 million at the end of 2023 [6]. - Total assets decreased to $1.16 billion from $1.23 billion at the end of 2023 [6]. - Shareholders' equity fell to $257.3 million from $292.5 million at the end of 2023 [6]. - Book value per share increased by 11.6% to $13.51 as of December 31, 2024 [6]. Group 4: Return on Equity and Capital Deployment - Return on average equity decreased by 590 basis points year over year to 18.5% in Q4 [7]. - A quarterly cash dividend of 39 cents per share was announced, reflecting a 5.4% increase, to be paid on March 21, 2025 [8].