AMSF — AMERISAFE, Inc.

Summary of AMERISAFE, Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Return on Equity (ROE): 18.5%
• Combined Ratio: 91.3%
• Gross Premium Written (GPW): Increased by 11.7% in Q4 and 6.7% for the full year.
• Net Premium Earned: $73.6 million in Q4, up 10.7%, and $283 million for the year, up 4.6%.
• Net Income: $10.4 million ($0.55 per diluted share) for Q4; $47.1 million for the full year ($2.48 per diluted share).
• Operating Net Income: $9.8 million ($0.51 per diluted share) for Q4; $41.8 million for the year.
• Loss Ratio: 64.5% for Q4 and 60% for the year, up from 56.4% and 58.1% respectively in 2024.
• Expense Ratio: 29.2% for Q4 and 30.4% for the full year.
• Book Value per Share: $13.39 after a special dividend.

2. Strategic Updates and Business Highlights

• Growth Strategy: Continued focus on niche industries and strong relationships with agents led to consistent growth in GPW and policy retention (93.7% renewal retention).
• Incremental Growth: Voluntary premiums increased significantly, contributing to overall premium growth.
• Claims Management: Emphasis on personalized claims management and safety services for policyholders.
• Investment Portfolio: Net investment income rose 2.5% in Q4, with a tax-equivalent book yield of 3.83%.

3. Forward Guidance and Outlook

• 2026 Loss Ratio Expectation: Anticipated to remain around 72%, reflecting ongoing pressures from claims severity and frequency.
• Rate Changes: Expected to remain in the negative mid-single-digit range based on current filings.
• Sustained Growth: Management expressed confidence in the sustainability of growth due to effective agency relationships and operational execution.

4. Challenges and Points of Concern

• Claims Severity: Increase in high-value claims (25 claims over $1 million in 2025 vs. 18 in 2024) contributing to upward pressure on the loss ratio.
• Market Conditions: Operating in a prolonged soft market with 12 years of rate declines affecting pricing strategies.
• Medical Inflation: Continued pressure from medical costs, particularly in home health and prosthetics, impacting claims costs.
• Audit Premium Decrease: Year-over-year decline in audit premium and adjustments, reflecting a moderating trend.

5. Notable Q&A Insights

• Claims Frequency and Severity: Management noted a 7.8% increase in reported claims in 2025, aligning with policy growth, indicating a stable frequency of severity.
• Growth Areas: Growth was broad-based across various classes and geographies, with notable success in agriculture and a new services category.
• Undocumented Workers: No significant impact on claims patterns or premium collection from undocumented workers noted.
• Competitive Landscape: Competition remains steady, but AMERISAFE is effectively managing opportunities through improved agency relationships and operational efficiencies.

Overall, AMERISAFE, Inc. demonstrated strong financial performance in Q4 2025, with a solid growth trajectory despite challenges in claims severity and market conditions. The company is well-positioned to navigate the competitive landscape while maintaining profitability.