Executive Summary

Q2 2025 delivered a revenue beat and a slight operating EPS miss: total revenues were $81.09M vs S&P Global consensus $77.30M (beat by ~$3.79M, +4.9%), while operating EPS was $0.53 vs $0.537 (miss by ~$0.007, -1.2%); GAAP diluted EPS was $0.73 supported by $3.1M realized and $1.8M unrealized gains on equities . Values retrieved from S&P Global.*
Underwriting remained solid but sequentially softer: net combined ratio was 91.7% (vs 90.5% a year ago and 89.1% in Q1) as the expense ratio rose to 31.3% due to insurance-based assessments (+100 bps) and growth investments, partly offset by $8.6M favorable prior-year reserve development .
Top-line drivers stood out: gross premiums written increased 4.3% YoY and voluntary premiums on policies written rose 12.8% on stronger new business and 93.8% renewal retention; in-force policy count grew 3.4% in the quarter .
Capital returns remain a catalyst: Board reauthorized a $25.0M share repurchase program and declared a $0.39 quarterly dividend; book value per share rose to $13.96 (+3.3% YTD) .

What Went Well and What Went Wrong

What Went Well
- Strong organic growth: “Voluntary premiums on policies written grew 12.8%,” supported by new business and 93.8% renewal retention; in-force policy count up 3.4% in the quarter .
- Favorable reserve development: $8.6M of favorable prior-year development aided the net loss ratio (58.6% vs 59.2% LY) and supported profitability .
- Capital management: share repurchases of ~62.8K shares for $2.8M; new $25.0M buyback authorization; regular dividend declared at $0.39/share; book value per share at $13.96 .
What Went Wrong
- Operating EPS miss vs consensus: $0.53 vs $0.537 amid higher expense ratio (31.3% vs 29.8% LY) linked to growth investments and insurance-based assessments (+100 bps) . Values retrieved from S&P Global.*
- Net investment income declined YoY: $6.7M (-10.2% YoY) due to lower investable assets following the special dividend; though sequentially improved by 60 bps .
- Continued moderation in audit premium: $1.5M contribution vs $7.3M LY reduced immediate earnings leverage relative to the prior year .

Financial Results

Summary results vs prior year and prior quarters

Metric	Q2 2024	Q4 2024	Q1 2025	Q2 2025
Total revenues ($USD Millions)	$75.83	$74.03	$72.60	$81.09
Net premiums earned ($M)	$68.63	$66.51	$68.89	$69.38
Net investment income ($M)	$7.45	$6.91	$6.65	$6.69
Net income ($M)	$10.99	$13.19	$8.95	$13.96
Diluted EPS (GAAP) ($)	$0.57	$0.69	$0.47	$0.73
Operating EPS ($)	$0.58	$0.67	$0.60	$0.53
Net loss ratio (%)	59.2%	56.4%	58.3%	58.6%
Net underwriting expense ratio (%)	29.8%	29.7%	29.9%	31.3%
Net combined ratio (%)	90.5%	86.1%	89.1%	91.7%
ROAE (%)	14.6%	18.5%	13.8%	21.2%

Investment gains/losses (pre-tax)

Metric	Q2 2024	Q4 2024	Q1 2025	Q2 2025
Net realized gains (losses) on investments ($M)	-$0.12	-$0.40	$0.00	$3.12
Net unrealized gains (losses) on equity securities ($M)	-$0.06	$0.92	-$3.15	$1.83

Insurance operating KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
Gross premiums written ($M)	$76.43	$83.78	$79.70
Voluntary premium growth on policies written (YoY)	—	7.1%	12.8%
Payroll audit contribution to written premium ($M)	$7.3	$5.0	$1.5
Favorable prior-year development ($M)	—	$8.7	$8.6
Current accident year loss ratio	71.0%	71.0%	71.0%
Renewal retention (policy count)	—	—	93.8%
In-force policy count growth (q/q)	—	—	3.4%
Book value per share ($)	—	$13.69	$13.96

Estimate comparison (S&P Global consensus vs actual – Q2 2025)

Metric	Consensus	Actual	Surprise
Revenue ($USD Millions)	$77.30*	$81.09	+$3.79 / +4.9%*
Operating EPS ($)	$0.537*	$0.53	-$0.007 / -1.2%*

Values retrieved from S&P Global.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Expense ratio	FY 2025	Within historical range (implied)	“In line with previous years”	Maintained
Regular quarterly dividend	Q3 2025 (payable Sep 26)	$0.39/share	$0.39/share	Maintained
Share repurchase authorization	Ongoing	$2.5M remaining under prior program	New authorization up to $25.0M	Reauthorized/new capacity

Management also noted they “assume there will be a special dividend” given capital sufficiency, but no formal declaration was made .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Market cycle / pricing	2024 combined ratio strong; continued growth and profitability; expense ratio impact in 4Q23 non-recurring item . Q1: continued top-line growth .	NCCI loss costs down mid-single digits; CA +8.7% increase; possible cycle shift; company positioned either way .	Soft market persists but early signals of firming in places; vigilant stance.
Medical inflation / utilization	Not highlighted in 4Q release; Q1 not emphasized.	NCCI medical severity +6% in 2024; utilization key driver; no change to reserving approach (long-term averages) .	Monitoring; disciplined reserving maintained.
Audit premium contribution	4Q24: $2.5M; FY24 $20.2M . Q1: $5.0M (down vs $6.4M LY) .	$1.5M (vs $7.3M LY), moderation continues .	Lower immediate earnings uplift YoY.
Underwriting/reserve releases	4Q24: $9.7M favorable . Q1: $8.7M favorable .	$8.6M favorable; AY 2020 and prior drove most .	Consistently favorable, slightly tapering.
Expense discipline/investment	4Q24 expense ratio 29.7% ; Q1 29.9% (growth investments) .	31.3% (investments + assessments +100 bps); full-year expected in historical range .	Temporarily elevated; management expects normalization.
Capital returns	Dividend increased to $0.39 in Feb 2025 ; Q1 regular dividend declared .	$0.39 dividend declared; $25.0M buyback reauthorized; 2Q repurchases $2.8M .	Consistent, with expanded buyback flexibility.
Distribution/agent strategy	Not discussed prior.	Fewer agents but more productive; focus on ease of doing business/agent effectiveness .	Efficiency improving; supports new business growth.

Management Commentary

Strategy and growth: “Our risk selection, coupled with working more effectively with our agents, generated 12.8% growth in voluntary premiums…Our in-force policy count grew 3.4%…with 93.8% renewal retention.”
Underwriting and reserves: “Our current accident year loss ratio was 71%…we had $8.6 million of favorable development in the quarter…accident years 2020 and prior drove most of the favorable case development.”
Expense/investments: “This increase resulted in an expense ratio of 31.3%…100 basis points…due to an increase in insurance-based assessments. We anticipate the full-year expense ratio to be in line with previous years.”
Investments: “Yields on new investments [are] exceeding portfolio rolloff by 230 bps, contributing to a tax-equivalent book yield of 3.85%…AA- average credit rating; duration ~4.5 years.”
Capital allocation: “Board…reauthorized a $25 million share repurchase program…[and] declared a regular quarterly cash dividend of $0.39 per share.” “We assume there will be a special dividend…there is capital sufficiency.”

Q&A Highlights

Growth drivers and agent model: Management emphasized “ease of doing business, agent effectiveness, and scalability” with fewer agents but higher productivity; policy count +3.4% q/q despite a lower agent count .
Loss-cost and medical severity: NCCI’s 6% medical severity increase is being monitored; AMERISAFE uses long-term averages and has not changed reserving practices .
Expense ratio outlook: Despite Q2 at 31.3% (investments + assessments), management expects full-year expense ratio to be within historical range .
Policyholder dividends: “Lumpy” and influenced by competition and loss experience, notably in Florida (administrative pricing); Q2 dividend ratio 1.8% .
Capital returns: Buyback reauthorized to $25M; management expects a special dividend, contingent on capital sufficiency (not yet declared) .

Estimates Context

Q2 2025 comparison to S&P Global consensus: Revenue $81.09M vs $77.30M consensus (beat); Operating EPS $0.53 vs $0.537 consensus (slight miss). Values retrieved from S&P Global.* Actuals per company press release .
Forward look (consensus): Next quarter (Q3 2025) EPS $0.56; revenue $78.29M; limited coverage (EPS est count: 3; revenue est count: 2). Values retrieved from S&P Global.*

Key Takeaways for Investors

Revenue outperformed while operating EPS slightly missed; expense ratio pressure (+100 bps from assessments and growth investments) offset underwriting and reserve benefits—watch for normalization in H2 per management .
Organic growth momentum is real: 12.8% voluntary premium growth, 93.8% retention, and policy count +3.4% q/q in a competitive market—supports a constructive top-line trajectory .
Reserve quality remains a support: consistent favorable development ($8.6M in Q2) and steady 71% current AY loss ratio underpin underwriting profitability .
Investment income headwind from lower investable assets persists YoY but reinvestment yields are favorable; equity gains boosted GAAP EPS this quarter—expect variability from equity marks .
Capital returns are a continuing catalyst: $25M buyback reauthorization plus $0.39 dividend; management indicates potential for a special dividend later this year (not yet declared) .
Narrative to watch: potential shift in the comp cycle (CA +8.7% loss-cost increase; NCCI medical severity +6%); AMERISAFE’s discipline and risk selection should position it well if the market firms .
Near-term trading setup: revenue beat and capital return authorization are supportive; the operating EPS miss and elevated expense ratio could temper near-term multiple expansion until investors see expense normalization and sustained growth conversion to EPS .

Footnote: All consensus estimate figures marked with an asterisk (*) are values retrieved from S&P Global.

AMERISAFE INC (AMSF)·Q2 2025 Earnings Summary