Employers Holdings (EIG) Drops 5.8% Despite Q2 Earnings Beat

Core Viewpoint - Employers Holdings, Inc. (EIG) reported better-than-expected second-quarter 2024 earnings, but shares declined 5.8% post-results due to increased overall expenses offsetting positive growth in premiums and investment yields [1] Financial Performance - Adjusted earnings per share (EPS) for Q2 were $1.10, exceeding the Zacks Consensus Estimate by 1.9%, but down 6% year over year [2] - Total revenues increased by 0.8% year over year to$ 217 million, missing the consensus estimate by 3% [2] - Gross premiums written rose 5% year over year to $207.9 million, driven by new business growth and higher renewal rates, while net premiums written also increased by 5% to$ 206.1 million [3] - Net premiums earned were $187.8 million, a 6% year-over-year improvement, but fell short of the Zacks Consensus Estimate by 4.6% [3] - Net investment income grew 0.4% year over year to$ 26.9 million, aided by higher yields on fixed-maturity securities, though it slightly missed the consensus mark by 0.1% [4] Expense and Profitability Metrics - Total expenses increased by 3.3% year over year to $177 million, with losses and loss adjustment expenses rising 20% due to higher earned premiums [5] - Pre-tax income for the quarter was$ 40 million, down 8.7% year over year [5] - The combined ratio increased by 380 basis points year over year to 94.2%, but was better than the Zacks Consensus Estimate of 95.5% [6] Balance Sheet and Capital Management - As of June 30, 2024, EIG had investments, cash, and cash equivalents totaling $2.47 billion, a slight decrease from$ 2.5 billion at the end of 2023 [7] - Total assets remained flat at $3.6 billion, while total stockholders' equity improved to$ 1.02 billion from $1.01 billion at the end of 2023 [7] - The adjusted book value per share rose to$ 48.89 from $45.41 a year ago [7] - EIG repurchased shares worth$ 19.2 million in Q2 and announced a quarterly dividend of 30 cents for Q3, payable on August 28, 2024 [8]