Employers Holdings, Inc. Reports Third Quarter 2023 Results; Declares Regular Quarterly Dividend of $0.28 per Share

Employers Holdings, Inc. (the “Company”) (NYSE:EIG), a holding company with subsidiaries that are specialty providers of workers' compensation insurance and services focused on select, small businesses engaged in low-to-medium hazard industries, today reported financial results for its third quarter ended September 30, 2023.

Financial Highlights:

(All comparisons vs. the third quarter of 2022, unless noted otherwise).

• Net income of $14.0 million or $0.54 per share versus $19.1 million or $0.70 per share;
• Adjusted net income of $17.7 million or $0.68 per share versus $15.5 million or $0.56 per share, an increase of 21% per share;
• Gross premiums written of $196.2 million versus $188.6 million, an increase of 4%;
• Net premiums earned of $184.6 million versus $178.7 million, an increase of 3%;
• Net investment income of $25.9 million versus $23.7 million, an increase of 9%;
• Net investment losses reflected on the income statement of $7.1 million versus net gains of $1.9 million;
• Ending policies in-force of 126,120, up 5%; and
• Returned $21.7 million to stockholders through a combination of stock repurchases and regular quarterly dividends.

Management Commentary

Chief Executive Officer Katherine Antonello commented: “Our third quarter results are a testament to the transformational changes we are making at Employers. Wage increases, a continued strong labor market for our target businesses and our disciplined appetite expansion each contributed to higher new and renewal premiums. As a result, we ended the quarter with more than 126,000 policies in-force, a record level representing increases in each of the last thirteen consecutive quarters.

We have maintained our current accident year loss and LAE ratio on voluntary business throughout the year at 63.3%, below the 64.0% we maintained throughout 2022. As was the case in the third quarter of 2022, we did not recognize any prior year loss reserve development this quarter because: (i) a full actuarial study was not performed; and (ii) the amount of indicated net prior year loss reserve development was consistent with our expectations. We will evaluate our prior year reserves in more detail at year-end when we routinely perform a full reserve study.

Our total underwriting expenses (consisting of our commissions, underwriting and general and administrative expenses) of $70.2 million this quarter were up $3.0 million, or 4% from a year ago. The increase was largely driven by an increase in our variable expenses (those that fluctuate with our premium volume) and higher 2023 agency incentive accruals, which are specific to individual contracts and vary with agency growth and profitability. We remain confident that we can further reduce our total underwriting expenses, as a percentage of our earned premiums, in 2024.

We continue to actively return capital to our stockholders. Our capital management efforts this quarter consisted of $14.4 million of share repurchases and $7.3 million of regular quarterly dividends, and our efforts year-to-date consisted of $61.6 million of share repurchases and $22.0 million of regular quarterly dividends. These actions reflect our strong balance sheet, abundant underwriting capital and confidence in the Company’s future operations.”

Summary of Third Quarter 2023 Results

(All comparisons vs. the third quarter of 2022, unless noted otherwise).

Gross premiums written were $196.2 million, an increase of 4%. The increase was primarily due to higher new and renewal business writings. Net premiums earned were $184.6 million, an increase of 3%.

Losses and loss adjustment expenses were $114.9 million, an increase of 2%. The increase was primarily due to higher earned premiums.

Commission expenses were $26.7 million versus $25.3 million, an increase of 6%. The increase was primarily due to higher earned premiums and higher 2023 agency incentive accruals.

Underwriting and general and administrative expenses were $43.5 million, an increase of 4%. The increase was primarily due to higher: (i) payroll-related expenses; and (ii) policyholder dividends and bad debt expenses, with each resulting from the increase in earned premiums.

Net investment income was $25.9 million, an increase of 9%. The increase was due to higher bond yields, partially offset by lower invested balances of fixed maturity securities and short-term investments, as measured by amortized cost.

Net realized and unrealized gains (losses) on investments reflected on the income statement were $(7.1) million versus $1.9 million.

Income tax expense was $3.4 million (19.5% effective rate) versus $4.7 million (19.7% effective rate). The effective rates during each of the periods presented included income tax benefits and exclusions associated with tax-advantaged investment income, LPT adjustments, and deferred gain amortization.

The Company’s book value per share including the deferred gain of $39.63 increased by 4.6% during the first nine months of 2023, computed after taking into account dividends declared. This measure was unfavorably impacted by $20.0 million of after tax unrealized losses arising from fixed maturity securities (which are reflected on the balance sheet) and was favorably impacted by $11.0 million of net after tax unrealized gains arising from equity securities and other investments (which are reflected on the income statement). The Company’s adjusted book value per share of $45.72 increased by 6.3% during the first nine months of 2023, computed after taking into account dividends declared. This measure was favorably impacted by the net after tax unrealized gains arising from equity securities and other investments previously described.

Summary of Results by Segment

(see page 14 of the Financial Supplement for a description of our reportable segments. All comparisons vs. the third quarter of 2022, unless noted otherwise).

Employers Segment

Our Employers segment reported net income before income taxes of $20.8 million versus $26.1 million.

Highlights include the following:

• Earned premium of $182.7 million versus $177.9 million;
• Underwriting income of $4.1 million versus $3.2 million;
• Combined ratio of 97.8% versus 98.3%;
• Calendar year loss and LAE ratio of 63.2% versus 64.0%;
• Commission expense ratio of 14.6% versus 14.2%;
• Underwriting expense ratio of 20.0% versus 20.1%;
• Net investment income of $23.4 million versus $21.4 million; and
• Net realized and unrealized gains (losses) on investments reflected on the income statement of $(5.9) million versus $2.4 million.

Cerity Segment

Our Cerity segment reported a net loss before income taxes of $1.9 million versus $2.4 million.

Highlights include the following:

• Earned premium of $1.9 million versus $0.8 million;
• Underwriting loss of $3.1 million versus $3.3 million;
• Net investment income of $1.6 million versus $1.2 million; and
• Net realized and unrealized losses on investments reflected on the income statement of $0.4 million versus $0.3 million.

Corporate and Other

Corporate and Other activities reported net income (loss) before income taxes of $(1.5) million versus $0.1 million.

Highlights include the following:

• LPT amortization of $1.9 million, which served to reduce losses and LAE, versus $2.1 million;
• General and administrative expenses of $3.4 million versus $2.8 million.
• Net investment income of $0.9 million versus $1.1 million; and
• Net realized and unrealized losses on investments reflected on the income statement of $0.8 million versus $0.2 million.

Fourth Quarter 2023 Dividend Declaration

Today the Board of Directors declared a regular quarterly dividend of $0.28 per share. The dividend is payable on November 22, 2023 to stockholders of record as of November 8, 2023.

Stock Repurchases

During the third quarter of 2023, the Company repurchased 367,209 shares of its common stock at an average price of $38.95 per share. The Company currently has a remaining share repurchase authorization of $36.4 million.

Earnings Conference Call and Webcast

The Company will review these financial results via a conference call and webcast on Thursday, October 26, 2023, at 11:00 a.m. Eastern Daylight Time / 8:00 a.m. Pacific Daylight Time.

To participate in the live conference call by telephone, dial 1-877-423-9820 or 1-201-493-6749.

A live audio-only broadcast will be accessible via webcast in the Investors section of the Company’s website at www.employers.com. An archived version of the webcast will also be accessible on the Company’s website following the live call.

Reconciliation of Non-GAAP Financial Measures to GAAP

The information in this press release should be read in conjunction with the Financial Supplement that is attached to this press release and is available on our website.

Within this earnings release we present various financial measures, some of which are “Non-GAAP financial measures” as defined in Regulation G pursuant to Section 401 of the Sarbanes - Oxley Act of 2002. A description of these Non-GAAP financial measures, as well as a reconciliation of such Non-GAAP measures to our most directly comparable GAAP financial measures is included in the attached Financial Supplement. Management believes that these Non-GAAP measures are important to the Company's investors, analysts and other interested parties who benefit from having an objective and consistent basis for comparison with other companies within our industry. Management further believes that these measures are more relevant than comparable GAAP measures in evaluating our financial performance.

Forward-Looking Statements

In this press release, the Company and its management discuss and make statements based on currently available information regarding their intentions, beliefs, current expectations, and projections of, among other things, the Company's future performance, economic or market conditions, including the evolving nature of the COVID-19 pandemic, current levels of inflation, changes in interest rates, labor market expectations, catastrophic events or geo-political conditions, legislative or regulatory actions or court decisions, business growth, retention rates, loss costs, claim trends and the impact of key business initiatives, future technologies and planned investments. Certain of these statements may constitute “forward-looking” statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and are often identified by words such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “target,” “project,” “intend,” “believe,” “estimate,” “predict,” “potential,” “pro forma,” “seek,” “likely,” or “continue,” or other comparable terminology and their negatives. The Company and its management caution investors that such forward-looking statements are not guarantees of future performance. Risks and uncertainties are inherent in the Company’s future performance. Factors that could cause the Company's actual results to differ materially from those indicated by such forward-looking statements include, among other things, those discussed or identified from time to time in the Company’s public filings with the U.S. Securities and Exchange Commission (the "SEC"), including the risks detailed in the Company's Quarterly Reports on Form 10-Q and the Company's Annual Reports on Form 10-K. Except as required by applicable securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Filings with the SEC

The Company’s filings with the SEC and its quarterly investor presentations can be accessed through the “Investors” link on the Company's website, www.employers.com. The Company's filings with the SEC can also be accessed through the SEC's EDGAR Database at www.sec.gov (EDGAR CIK No. 0001379041).

About Employers Holdings, Inc.

EMPLOYERS and America’s small business insurance specialist are registered trademarks of EIG Services, Inc. Employers Holdings, Inc. is a holding company with subsidiaries that are specialty providers of workers' compensation insurance and services focused on select, small businesses engaged in low-to-medium hazard industries. The Company operates throughout the United States, with the exception of four states that are served exclusively by their state funds. Insurance is offered through Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, Employers Assurance Company and Cerity Insurance Company, all rated A- (Excellent) by the A.M. Best Company. Not all companies do business in all jurisdictions. See www.employers.com and www.cerity.com for coverage availability.

Employers Holdings, Inc.
Third Quarter 2023
Financial Supplement

EMPLOYERS HOLDINGS, INC.
Table of Contents

Page
1		Consolidated Financial Highlights
2		Summary Consolidated Balance Sheets
3		Summary Consolidated Income Statements
4		Net Income (Loss) Before Income Taxes by Segment
8		Return on Equity
9		Roll-forward of Unpaid Losses and LAE
10		Consolidated Investment Portfolio
11		Book Value Per Share
12		Earnings Per Share
13		Non-GAAP Financial Measures
14		Description of Reportable Segments

EMPLOYERS HOLDINGS, INC.
Consolidated Financial Highlights (unaudited)
$ in millions, except per share amounts

		Three Months Ended											Nine Months Ended
		September 30,											September 30,
		2023				2022				% change			2023				2022				% change
Selected financial highlights:
Gross premiums written		$	196.2			$	188.6			4	%		$	589.5			$	540.4			9	%
Net premiums written			194.5				186.8			4				584.2				535.3			9
Net premiums earned			184.6				178.7			3				534.4				494.1			8
Net investment income			25.9				23.7			9				80.3				62.8			28
Net income (loss) before impact of the LPT(1)			12.1				17.0			(29	)			66.6				(5.0	)		n/m
Adjusted net income(1)			17.7				15.5			14				65.6				46.7			40
Net income (loss) before income taxes			17.4				23.8			(27	)			90.3				(0.1	)		n/m
Net Income			14.0				19.1			(27	)			72.5				1.3			n/m
Total Comprehensive (loss) income			(12.1	)			(45.1	)		73				54.8				(218.2	)		125
Total assets														3,527.0				3,708.7			(5	)
Stockholders' equity														919.0				919.0			—
Stockholders' equity including the Deferred Gain(2)														1,019.2				1,027.1			(1	)
Adjusted stockholders' equity(2)														1,175.8				1,186.0			(1	)
Annualized adjusted return on stockholders' equity(3)			6.0	%			5.2	%		15	%			7.4	%			5.1	%		45	%
Amounts per share:
Cash dividends declared per share		$	0.28			$	0.26			8	%		$	0.82			$	1.77			(54	)%
Earnings per diluted share(4)			0.54				0.70			(23	)			2.71				0.05			n/m
Earnings (loss) per diluted share before impact of the LPT(4)			0.46				0.62			(26	)			2.49				(0.18	)		n/m
Adjusted earnings per diluted share(4)			0.68				0.56			21				2.45				1.69			45
Book value per share(2)														35.73				33.79			6
Book value per share including the Deferred Gain(2)														39.63				37.77			5
Adjusted book value per share(2)														45.72				43.61			5
Financial information by Segment(5):
Net income (loss) before income taxes
Employers		$	20.8			$	26.1			(20	)%		$	97.5			$	16.5			491
Cerity			(1.9	)			(2.4	)		21				(5.7	)			(8.2	)		30
Corporate and Other			(1.5	)			0.1			n/m				(1.5	)			(8.4	)		82
n/m - not meaningful
(1) See Page 3 for calculations and Page 13 for information regarding our use of Non-GAAP Financial Measures.
(2) See Page 11 for calculations and Page 13 for information regarding our use of Non-GAAP Financial Measures.
(3) See Page 8 for calculations and Page 13 for information regarding our use of Non-GAAP Financial Measures.
(4) See Page 12 for description and calculations and Page 13 for information regarding our use of Non-GAAP Financial Measures.
(5) See Pages 4-7 for details and Page 14 for a description of our reportable segments.

EMPLOYERS HOLDINGS, INC.
Summary Consolidated Balance Sheets (unaudited)
$ in millions, except per share amounts

		September 30, 2023				December 31, 2022
ASSETS
Investments, cash and cash equivalents		$	2,442.9			$	2,658.2
Accrued investment income			18.5				19.0
Premiums receivable, net			363.3				305.9
Reinsurance recoverable, net of allowance, on paid and unpaid losses and LAE			437.2				451.3
Deferred policy acquisition costs			57.1				48.3
Deferred income tax asset, net			64.2				62.7
Contingent commission receivable—LPT Agreement			13.9				13.9
Other assets			129.9				157.4
Total assets		$	3,527.0			$	3,716.7
LIABILITIES
Unpaid losses and LAE		$	1,913.4			$	1,960.7
Unearned premiums			387.0				339.5
Commissions and premium taxes payable			62.8				58.2
Deferred Gain			100.2				106.1
FHLB Advances(1)			40.4				182.5
Other liabilities			104.2				125.5
Total liabilities		$	2,608.0			$	2,772.5
STOCKHOLDERS' EQUITY
Common stock and additional paid-in capital		$	418.8			$	415.2
Retained earnings			1,346.1				1,295.6
Accumulated other comprehensive loss			(156.6	)			(138.9	)
Treasury stock, at cost			(689.3	)			(627.7	)
Total stockholders’ equity			919.0				944.2
Total liabilities and stockholders’ equity		$	3,527.0			$	3,716.7
Stockholders' equity including the Deferred Gain (2)		$	1,019.2			$	1,050.3
Adjusted stockholders' equity (2)			1,175.8				1,189.2
Book value per share (2)		$	35.73			$	34.76
Book value per share including the Deferred Gain(2)			39.63				38.67
Adjusted book value per share (2)			45.72				43.78
(1) FHLB=Federal Home Loan Bank
(2) See Page 11 for calculations and Page 13 for information regarding our use of Non-GAAP Financial Measures.

EMPLOYERS HOLDINGS, INC.
Summary Consolidated Income Statements (unaudited)
$ in millions

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2023				2022				2023				2022
Revenues:
Net premiums earned	$	184.6			$	178.7			$	534.4			$	494.1
Net investment income		25.9				23.7				80.3				62.8
Net realized and unrealized gains (losses) on investments(1)		(7.1	)			1.9				10.7				(65.5	)
Other income (loss)		0.1				0.1				(0.2	)			0.3
Total revenues		203.5				204.4				625.2				491.7
Expenses:
Losses and LAE incurred		(114.9	)			(112.3	)			(312.8	)			(299.7	)
Commission expense		(26.7	)			(25.3	)			(73.8	)			(69.9	)
Underwriting and general and administrative expenses		(43.5	)			(41.9	)			(133.7	)			(120.6	)
Interest and financing expenses		(1.0	)			(1.1	)			(5.2	)			(1.6	)
Other expenses		—				—				(9.4	)			—
Total expenses		(186.1	)			(180.6	)			(534.9	)			(491.8	)
Net income (loss) before income taxes		17.4				23.8				90.3				(0.1	)
Income tax (expense) benefit		(3.4	)			(4.7	)			(17.8	)			1.4
Net Income		14.0				19.1				72.5				1.3
Unrealized AFS investment losses arising during the period, net of tax(2)		(27.0	)			(60.3	)			(20.0	)			(222.2	)
Reclassification adjustment for net realized AFS investment losses (gains) in net income, net of tax(2)		0.9				(3.9	)			2.3				2.7
Total comprehensive (loss) income	$	(12.1	)		$	(45.1	)		$	54.8			$	(218.2	)
Net Income	$	14.0			$	19.1			$	72.5			$	1.3
Amortization of the Deferred Gain - losses		(1.5	)			(1.7	)			(4.7	)			(5.1	)
Amortization of the Deferred Gain - contingent commission		(0.4	)			(0.4	)			(1.2	)			(1.2	)
Net income (loss) before impact of the LPT Agreement (3)		12.1				17.0				66.6				(5.0	)
Net realized and unrealized losses (gains) on investments		7.1				(1.9	)			(10.7	)			65.5
Lease termination and asset impairment charges		—				—				9.4				—
Income tax expense (benefit) related to items excluded from Net income or loss		(1.5	)			0.4				0.3				(13.8	)
Adjusted net income	$	17.7			$	15.5			$	65.6			$	46.7
(1) Includes net realized and unrealized (losses) gains on equity securities and other investments of $(5.9) million and $(3.1) million for the three months ended September 30, 2023 and 2022, respectively, and $13.6 million and $(62.1) million for the nine months ended September 30, 2023 and 2022, respectively.
(2) AFS = Available for Sale securities.
(3) See Page 13 regarding our use of Non-GAAP Financial Measures.

EMPLOYERS HOLDINGS, INC.
Net Income (Loss) Before Income Taxes by Segment ⁽¹⁾ (unaudited)
$ in millions

		Employers				Cerity				Corporate and Other				Consolidated
Three Months Ended September 30, 2023
Gross premiums written		$	194.0			$	2.2			$	—			$	196.2
Net premiums written			192.3				2.2				—				194.5
Net premiums earned	A		182.7				1.9				—				184.6
Net investment income			23.4				1.6				0.9				25.9
Net realized and unrealized losses on investments			(5.9	)			(0.4	)			(0.8	)			(7.1	)
Other income			0.1				—				—				0.1
Total revenues			200.3				3.1				0.1				203.5
Losses and LAE incurred (2)	B		(115.5	)			(1.3	)			1.9				(114.9	)
Commission expense	C		(26.6	)			(0.1	)			—				(26.7	)
Underwriting and general and administrative expenses	D		(36.5	)			(3.6	)			(3.4	)			(43.5	)
Interest and financing expenses			(0.9	)			—				(0.1	)			(1.0	)
Other expenses			—				—				—				—
Total expenses			(179.5	)			(5.0	)			(1.6	)			(186.1	)
Net income (loss) before income taxes		$	20.8			$	(1.9	)		$	(1.5	)		$	17.4
Underwriting income (loss)	A+B+C+D		4.1				(3.1	)
Loss and LAE expense ratio:
Current year			63.3	%			n/m
Prior years			(0.1	)			—
Loss and LAE ratio			63.2				n/m
Commission expense ratio			14.6				n/m
Underwriting expense ratio			20.0				n/m
Combined ratio			97.8	%			n/m
n/m - not meaningful
(1) See Page 14 for a description of our reportable segments
(2) Losses and LAE in Corporate and Other represent the impact of the LPT Agreement

EMPLOYERS HOLDINGS, INC.
Net Income (Loss) Before Income Taxes by Segment ⁽¹⁾ (unaudited)
$ in millions

		Employers				Cerity				Corporate and Other				Consolidated
Three Months Ended September 30, 2022
Gross premiums written		$	187.1			$	1.5			$	—			$	188.6
Net premiums written			185.3				1.5				—				186.8
Net premiums earned	A		177.9				0.8				—				178.7
Net investment income			21.4				1.2				1.1				23.7
Net realized and unrealized gains (losses) on investments			2.4				(0.3	)			(0.2	)			1.9
Other income			0.1				—				—				0.1
Total revenues			201.8				1.7				0.9				204.4
Losses and LAE incurred (2)	B		(113.8	)			(0.6	)			2.1				(112.3	)
Commission expense	C		(25.2	)			(0.1	)			—				(25.3	)
Underwriting and general and administrative expenses	D		(35.7	)			(3.4	)			(2.8	)			(41.9	)
Interest and financing expenses			(1.0	)			—				(0.1	)			(1.1	)
Total expenses			(175.7	)			(4.1	)			(0.8	)			(180.6	)
Net income (loss) before income taxes		$	26.1			$	(2.4	)		$	0.1			$	23.8
Underwriting income (loss)	A+B+C+D	$	3.2			$	(3.3	)
Loss and LAE expense ratio:
Current year			64.1	%			n/m
Prior years			(0.1	)			—
Loss and LAE ratio			64.0				n/m
Commission expense ratio			14.2				n/m
Underwriting expense ratio			20.1				n/m
Combined ratio			98.3	%			n/m
n/m - not meaningful
(1) See Page 14 for a description of our reportable segments
(2) Losses and LAE in Corporate and Other represent the impact of the LPT Agreement

EMPLOYERS HOLDINGS, INC.
Net Income (Loss) Before Income Taxes by Segment ⁽¹⁾ (unaudited)
$ in millions

		Employers				Cerity				Corporate and Other				Consolidated
Nine Months Ended September 30, 2023
Gross premiums written		$	584.4			$	5.1			$	—			$	589.5
Net premiums written			579.1				5.1				—				584.2
Net premiums earned	A		529.5				4.9				—				534.4
Net investment income			72.3				5.0				3.0				80.3
Net realized and unrealized gains (losses) on investments			11.1				(0.2	)			(0.2	)			10.7
Other (loss) income			(0.2	)			—				—				(0.2	)
Total revenues			612.7				9.7				2.8				625.2
Losses and LAE incurred (2)	B		(315.5	)			(3.2	)			5.9				(312.8	)
Commission expense	C		(73.6	)			(0.2	)			—				(73.8	)
Underwriting and general and administrative expenses	D		(111.8	)			(12.0	)			(9.9	)			(133.7	)
Interest and financing expenses			(4.9	)			—				(0.3	)			(5.2	)
Other expenses			(9.4	)			—				—				(9.4	)
Total expenses			(515.2	)			(15.4	)			(4.3	)			(534.9	)
Net income (loss) before income taxes		$	97.5			$	(5.7	)		$	(1.5	)		$	90.3
Underwriting income (loss)	A+B+C+D		28.6				(10.5	)
Loss and LAE expense ratio:
Current year			63.4	%			n/m
Prior years			(3.8	)			—
Loss and LAE ratio			59.6				n/m
Commission expense ratio			13.9				n/m
Underwriting expense ratio			21.1				n/m
Combined ratio			94.6	%			n/m
n/m - not meaningful
(1) See Page 14 for a description of our reportable segments
(2) Losses and LAE in Corporate and Other represent the impact of the LPT Agreement

EMPLOYERS HOLDINGS, INC.
Net Income Before Income Taxes by Segment ⁽¹⁾ (unaudited)
$ in millions

		Employers				Cerity				Corporate and Other				Consolidated
Nine Months Ended September 30, 2022
Gross premiums written		$	536.8			$	3.6			$	—			$	540.4
Net premiums written			531.7				3.6				—				535.3
Net premiums earned	A		492.1				2.0				—				494.1
Net investment income			57.7				2.7				2.4				62.8
Net realized and unrealized losses on investments			(56.0	)			(1.6	)			(7.9	)			(65.5	)
Other income			0.3				—				—				0.3
Total revenues			494.1				3.1				(5.5	)			491.7
Losses and LAE incurred (2)	B		(304.7	)			(1.3	)			6.3				(299.7	)
Commission expense	C		(69.8	)			(0.1	)			—				(69.9	)
Underwriting and general and administrative expenses	D		(101.8	)			(9.9	)			(8.9	)			(120.6	)
Interest and financing expenses			(1.3	)			—				(0.3	)			(1.6	)
Total expenses			(477.6	)			(11.3	)			(2.9	)			(491.8	)
Net income (loss) before income taxes		$	16.5			$	(8.2	)		$	(8.4	)		$	(0.1	)
Underwriting income (loss)	A+B+C+D	$	15.8			$	(9.3	)
Loss and LAE expense ratio:
Current year			64.0	%			n/m
Prior years			(2.1	)			—
Loss and LAE ratio			61.9				n/m
Commission expense ratio			14.2				n/m
Underwriting expense ratio			20.7				n/m
Combined ratio			96.8	%			n/m
n/m - not meaningful
(1) See Page 14 for a description of our reportable segments
(2) Losses and LAE in Corporate and Other represent the impact of the LPT Agreement

EMPLOYERS HOLDINGS, INC.
Return on Equity (unaudited)
$ in millions

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2023				2022				2023				2022
Net income	A	$	14.0			$	19.1			$	72.5			$	1.3
Impact of the LPT Agreement			(1.9	)			(2.1	)			(5.9	)			(6.3	)
Net realized and unrealized (gains) losses on investments			7.1				(1.9	)			(10.7	)			65.5
Lease termination and asset impairment charges			—				—				9.4				—
Income tax expense (benefit) related to items excluded from Net income			(1.5	)			0.4				0.3				(13.8	)
Adjusted net income (1)	B		17.7				15.5				65.6				46.7
Stockholders' equity - end of period		$	919.0			$	919.0			$	919.0			$	919.0
Stockholders' equity - beginning of period			951.7				977.5				944.2				1,213.1
Average stockholders' equity	C		935.4				948.3				931.6				1,066.1
Stockholders' equity - end of period		$	919.0			$	919.0			$	919.0			$	919.0
Deferred Gain - end of period			100.2				108.1				100.2				108.1
Accumulated other comprehensive loss - end of period			198.2				201.1				198.2				201.1
Income taxes related to accumulated other comprehensive loss - end of period			(41.6	)			(42.2	)			(41.6	)			(42.2	)
Adjusted stockholders' equity - end of period			1,175.8				1,186.0				1,175.8				1,186.0
Adjusted stockholders' equity - beginning of period			1,184.3				1,182.4				1,189.2				1,266.9
Average adjusted stockholders' equity (1)	D		1,180.1				1,184.2				1,182.5				1,226.5
Return on stockholders' equity	A / C		1.5	%			2.0	%			7.8	%			0.1	%
Annualized return on stockholders' equity			6.0				8.1				10.4				0.2
Adjusted return on stockholders' equity (1)	B / D		1.5	%			1.3	%			5.5	%			3.8	%
Annualized adjusted return on stockholders' equity (1)			6.0				5.2				7.4				5.1
(1) See Page 13 for information regarding our use of Non-GAAP Financial Measures.

EMPLOYERS HOLDINGS, INC.
Roll-forward of Unpaid Losses and LAE (unaudited)
$ in millions

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
	2023				2022				2023				2022
Unpaid losses and LAE at beginning of period	$	1,927.2			$	1,972.8			$	1,960.7			$	1,981.2
Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE		436.2				462.4				445.4				476.9
Net unpaid losses and LAE at beginning of period		1,491.0				1,510.4				1,515.3				1,504.3
Losses and LAE incurred:
Current year losses		116.9				114.6				338.7				316.3
Prior year losses on voluntary business		—				—				(20.0	)			(9.6	)
Prior year losses on involuntary business		(0.1	)			(0.3	)			—				(0.7	)
Total losses incurred		116.8				114.3				318.7				306.0
Losses and LAE paid:
Current year losses		32.0				27.3				64.1				50.4
Prior year losses		89.0				73.9				283.1				236.4
Total paid losses		121.0				101.2				347.2				286.8
Net unpaid losses and LAE at end of period		1,486.8				1,523.5				1,486.8				1,523.5
Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE		426.6				456.4				426.6				456.4
Unpaid losses and LAE at end of period	$	1,913.4			$	1,979.9			$	1,913.4			$	1,979.9

Total losses and LAE shown in the above table exclude amortization of the Deferred Gain, which totaled $1.9 million and $2.1 million for the three months ended September 30, 2023 and 2022, respectively, and $5.9 million and $6.3 million for the nine months ended September 30, 2023 and 2022, respectively.

EMPLOYERS HOLDINGS, INC.
Consolidated Investment Portfolio (unaudited)
$ in millions

		September 30, 2023															December 31, 2022
Investment Positions:		Cost or Amortized Cost (1)				Net Unrealized Gain (Loss)				Fair Value				%			Fair Value				%
Fixed maturity securities		$	2,198.6			$	(198.2	)		$	1,997.2			82	%		$	2,186.3			82	%
Equity securities			132.3				66.7				199.0			8				203.7			8
Short-term investments			46.8				—				46.8			2				119.1			4
Other invested assets			81.1				9.8				90.9			4				59.7			2
Cash and cash equivalents			108.8				—				108.8			4				89.2			3
Restricted cash and cash equivalents			0.2				—				0.2			—				0.2			—
Total investments and cash		$	2,567.8			$	(121.7	)		$	2,442.9			100	%		$	2,658.2			100	%
Breakout of Fixed Maturity Securities:
U.S. Treasuries and agencies		$	101.1			$	(4.9	)		$	96.2			5	%		$	92.9			4	%
States and municipalities			240.8				(12.6	)			228.2			11				317.6			15
Corporate securities			1,023.9				(103.4	)			917.9			46				868.1			40
Mortgage-backed securities			465.8				(65.7	)			400.1			20				415.3			19
Asset-backed securities			113.6				(6.8	)			106.8			5				66.1			3
Collateralized loan obligations			127.8				(1.2	)			126.6			6				260.9			12
Bank loans and other			125.6				(3.6	)			121.4			6				165.4			8
Total fixed maturity securities		$	2,198.6			$	(198.2	)		$	1,997.2			100	%		$	2,186.3			100	%

Weighted average book yield	4.1	%				3.9	%
Average credit quality (S&P)	A+					A
Duration	4.4					3.9
(1) Amortized cost excludes allowance for current expected credit losses (CECL) of $3.2 million.

EMPLOYERS HOLDINGS, INC.
Book Value Per Share (unaudited)
$ in millions, except per share amounts

		September 30, 2023				June 30, 2023				December 31, 2022				September 30, 2022
Numerators:
Stockholders' equity	A	$	919.0			$	951.7			$	944.2			$	919.0
Plus: Deferred Gain			100.2				102.1				106.1				108.1
Stockholders' equity including the Deferred Gain (1)	B		1,019.2				1,053.8				1,050.3				1,027.1
Accumulated other comprehensive loss			198.2				165.2				175.8				201.1
Income taxes related to accumulated other comprehensive loss			(41.6	)			(34.7	)			(36.9	)			(42.2	)
Adjusted stockholders' equity (1)	C	$	1,175.8			$	1,184.3			$	1,189.2			$	1,186.0
Denominator (shares outstanding)	D		25,719,074				26,078,813				27,160,748				27,196,333
Book value per share (1)	A / D	$	35.73			$	36.49			$	34.76			$	33.79
Book value per share including the Deferred Gain(1)	B / D		39.63				40.41				38.67				37.77
Adjusted book value per share (1)	C / D		45.72				45.41				43.78				43.61
YTD Change in: (2)
Book value per share			5.1	%											(18.7	)%
Book value per share including the Deferred Gain			4.6												(17.4	)
Adjusted book value per share			6.3												(0.6	)
(1) See Page 13 for information regarding our use of Non-GAAP Financial Measures.
(2) Reflects the change in book value per share after taking into account dividends declared of $0.82 and $1.77 for the nine months ended September 30, 2023 and 2022, respectively.

EMPLOYERS HOLDINGS, INC.
Earnings Per Share (unaudited)
$ in millions, except per share amounts

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2023				2022				2023				2022
Numerators:
Net income	A	$	14.0			$	19.1			$	72.5			$	1.3
Impact of the LPT Agreement			(1.9	)			(2.1	)			(5.9	)			(6.3	)
Net income (loss) before impact of the LPT (1)	B		12.1				17.0				66.6				(5.0	)
Net realized and unrealized (gains) losses on investments			7.1				(1.9	)			(10.7	)			65.5
Lease termination and asset impairment charges			—				—				9.4				—
Income tax expense (benefit) related to items excluded from Net income			(1.5	)			0.4				0.3				(13.8	)
Adjusted net income (1)	C	$	17.7			$	15.5			$	65.6			$	46.7
Denominators:
Average common shares outstanding (basic)	D		25,981,984				27,312,409				26,612,443				27,504,566
Average common shares outstanding (diluted)	E		26,118,280				27,436,428				26,767,056				27,681,666
Earnings per share:
Basic	A / D	$	0.54			$	0.70			$	2.72			$	0.05
Diluted	A / E		0.54				0.70				2.71				0.05
Earnings (loss) per share before impact of the LPT: (1)
Basic	B / D	$	0.47			$	0.62			$	2.50			$	(0.18	)
Diluted (2)	B / E		0.46				0.62				2.49				(0.18	)
Adjusted earnings per share: (1)
Basic	C / D	$	0.68			$	0.57			$	2.47			$	1.70
Diluted	C / E		0.68				0.56				2.45				1.69
(1) See Page 13 for information regarding our use of Non-GAAP Financial Measures.
(2) Outstanding common share equivalents are not considered in the Company's diluted earnings (loss) per share computations in any period that involves a net loss.

Non-GAAP Financial Measures

Within this earnings release we present the following measures, each of which are "non-GAAP financial measures." A reconciliation of these measures to the Company's most directly comparable GAAP financial measures is included herein. Management believes that these non-GAAP measures are important to the Company's investors, analysts and other interested parties who benefit from having an objective and consistent basis for comparison with other companies within our industry. Management further believes that these measures are more relevant than comparable GAAP measures in evaluating our financial performance.

The LPT Agreement is a non-recurring transaction that does not result in ongoing cash benefits to the Company. Management believes that providing non-GAAP measures that exclude the effects of the LPT Agreement (amortization of deferred reinsurance gain, adjustments to LPT Agreement ceded reserves and adjustments to contingent commission receivable) is useful in providing investors, analysts and other interested parties a meaningful understanding of the Company's ongoing underwriting performance.

Deferred reinsurance gain (Deferred Gain) reflects the unamortized gain from the LPT Agreement. This gain has been deferred and is being amortized using the recovery method, whereby the amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries, except for the contingent profit commission, which is being amortized through June 30, 2024. Amortization is reflected in losses and LAE incurred.

Adjusted net income (see Page 3 for calculations)is net income excluding the effects of the LPT Agreement, and net realized and unrealized gains and losses on investments (net of tax), and any miscellaneous non-recurring transactions (net of tax). Management believes that providing this non-GAAP measures is helpful to investors, analysts and other interested parties in identifying trends in the Company's operating performance because such items have limited significance to its ongoing operations or can be impacted by both discretionary and other economic factors and may not represent operating trends.

Stockholders' equity including the Deferred Gain (see Page 11 for calculations) is stockholders' equity including the Deferred Gain. Management believes that providing this non-GAAP measure is useful in providing investors, analysts and other interested parties a meaningful measure of the Company's total underwriting capital.

Adjusted stockholders' equity (see Page 11 for calculations) is stockholders' equity including the Deferred Gain, less accumulated other comprehensive income (net of tax). Management believes that providing this non-GAAP measure is useful to investors, analysts and other interested parties since it serves as the denominator to the Company's adjusted return on stockholders' equity metric.

Return on stockholders' equity and Adjusted return on stockholders' equity (see Page 8 for calculations). Management believes that these profitability measures are widely used by our investors, analysts and other interested parties.

Book value per share, Book value per share including the Deferred Gain, and Adjusted book value per share (see Page 11 for calculations). Management believes that these valuation measures are widely used by our investors, analysts and other interested parties.

Net income before impact of the LPT (see Page 3 for calculations). Management believes that these performance and underwriting measures are widely used by our investors, analysts and other interested parties.

Description of Reportable Segments

The Company has determined that it has two reportable segments: Employers and Cerity. Each of these segments represents a separate and distinct distribution channel through which the Company conducts insurance business.

The nature and composition of each reportable segment and its Corporate and Other activities are as follows:

• The Employers segment represents the traditional business offered through the EMPLOYERS brand name (Employers) through its agents, including business originated from its strategic partnerships and alliances;
• The Cerity segment represents the as business offered under the Cerity brand name, which includes the Company's direct-to-customer business; and
• Corporate and Other activities consist of those holding company expenses that are not considered to be underwriting in nature, the financial impact of the LPT Agreement and legacy (pre-acquisition) business assumed and ceded by Cerity Insurance Company. These expenses are not considered to be part of a reportable segment and are not otherwise allocated to a reportable segment.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231025715058/en/

The Employers Holdings Stock at the time of publication of the news with a raise of +1,35 % to 37,50EUR on Lang & Schwarz stock exchange (25. Oktober 2023, 22:12 Uhr).