Summary of AMERISAFE, Inc. Q4 2025 Earnings Call

1Key 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.

2Strategic 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%.

3Forward 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.

4Challenges 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.

5Notable 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.