On July 29, 2024, AMERISAFE Inc (AMSF, Financial) released its 8-K filing announcing the financial results for the second quarter ended June 30, 2024. AMERISAFE Inc is a specialty provider of workers' compensation insurance to employers engaged in hazardous industries, mainly construction, trucking, manufacturing, oil and gas, and agriculture. The company generates a majority of its revenue in the form of premiums.
Performance Overview
AMERISAFE Inc (AMSF, Financial) reported net premiums earned of $68.63 million for Q2 2024, a 4.6% increase from $65.60 million in Q2 2023. However, net income for the quarter was $10.99 million, a significant 29.7% decrease from $15.63 million in the same period last year. Diluted earnings per share (EPS) also fell to $0.57, down 29.6% from $0.81 in Q2 2023.
Financial Achievements and Challenges
Despite the revenue growth, AMERISAFE Inc (AMSF, Financial) faced challenges that impacted its profitability. The net combined ratio increased to 90.5% from 85.4% in Q2 2023, indicating higher underwriting expenses and loss adjustment costs. The net investment income also saw a decline of 3.5%, amounting to $7.45 million compared to $7.72 million in the previous year.
G. Janelle Frost, President and Chief Executive Officer, noted, “We are pleased with our second-quarter results. New business generation, along with strong retention and increased audit premiums generated gross premiums written growth of 6.6% for the quarter. Enhancing the profitable growth was favorable loss development from prior accident years. In all, we produced an attractive underwriting profit and added to the year’s robust returns.”
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Net Premiums Earned | $68.63 million | $65.60 million | 4.6% |
| Net Income | $10.99 million | $15.63 million | -29.7% |
| Diluted EPS | $0.57 | $0.81 | -29.6% |
| Net Combined Ratio | 90.5% | 85.4% | - |
Capital Management and Dividends
During Q2 2024, AMERISAFE Inc (AMSF, Financial) repurchased 91,825 shares at an average cost of $44.79 per share, totaling $4.1 million. The company also paid a regular quarterly cash dividend of $0.37 per share on June 21, 2024, representing an 8.8% increase compared to 2023. The Board of Directors declared another quarterly cash dividend of $0.37 per share, payable on September 20, 2024.
Analysis
While AMERISAFE Inc (AMSF, Financial) demonstrated growth in net premiums earned, the decline in net income and EPS highlights the challenges the company faces in managing underwriting expenses and investment income. The increase in the net combined ratio suggests higher costs associated with claims and loss adjustments, which could impact future profitability. However, the company's proactive capital management and consistent dividend payouts reflect a commitment to shareholder value.
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Explore the complete 8-K earnings release (here) from AMERISAFE Inc for further details.
