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AMERISAFE INC (AMSF)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 delivered solid top-line growth with total revenues of $81.976M, up 4.2% YoY and flat QoQ; net premiums earned rose 6.2% YoY to $71.196M and gross written premiums increased 7.2% YoY .
  • Insurance profitability was resilient: combined ratio 90.6% (vs. 90.9% LY; vs. 91.7% Q2), loss ratio 58.5% (favorable prior-year reserve development of $8.9M), and expense ratio 31.1% .
  • Versus estimates: revenue beat by $3.69M while normalized EPS of $0.55 was a slight miss vs. $0.56 consensus; management emphasized durable voluntary premium momentum (+10.6% YoY) and capital deployment with a $1.00 special dividend and $0.39 regular dividend for December 12, 2025 . EPS and revenue estimates are from S&P Global.*
  • Subsequent events: CFO Anastasios (Andy) Omiridis to resign effective November 30, 2025, which could be a near-term sentiment catalyst; Board declared the special dividend and highlighted continued repurchases ($1.3M in Q3) .

What Went Well and What Went Wrong

What Went Well

  • Sustained voluntary premium momentum: sixth straight quarter of top-line growth; voluntary premiums on policies written +10.6% YoY, driven by strong retention and new business production .
  • Disciplined underwriting delivered attractive returns: combined ratio 90.6% and ROAE 20.5%; favorable prior-year reserve development reduced LLAE by $8.9M .
  • Capital deployment balanced for growth and returns: declared $1.00 special dividend and $0.39 regular dividend; buybacks of ~30,860 shares at $43.72/share; book value per share up 7.1% YTD to $14.47 .
  • Management tone on durability: “Our growth strategy…is not short lived. I believe it has longevity,” linking a smaller special dividend to reinvesting in organic growth .

What Went Wrong

  • Net investment income declined 12.3% YoY to $6.6M due to lower investable assets following the late-2024 special dividend; portfolio yield was stable but money-market yields moderated to 4% (from 4.8% LY) .
  • Normalized (operating) EPS down 5.2% YoY to $0.55; underwriting expense ratio elevated vs. Q1 from ongoing business investments and assessments (Q3: 31.1%; Q2: 31.3%; Q1: 29.9%) .
  • Medical inflation and utilization remain monitored risks (e.g., home health, PA visits potentially increasing care utilization), and large losses are lumpy (17 YTD >$1M vs. 13 at the same point last year) .

Financial Results

Core metrics vs prior year and prior quarter

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Total Revenues ($USD Millions)$78.695 $72.597 $81.088 $81.976
Net Premiums Earned ($USD Millions)$67.050 $68.885 $69.381 $71.196
Net Investment Income ($USD Millions)$7.485 $6.652 $6.691 $6.566
Diluted EPS ($)$0.75 $0.47 $0.73 $0.72
Operating EPS ($)$0.58 $0.60 $0.53 $0.55
Net Loss Ratio (%)58.4% 58.3% 58.6% 58.5%
Underwriting Expense Ratio (%)31.7% 29.9% 31.3% 31.1%
Dividend Ratio (%)0.8% 0.9% 1.8% 1.0%
Combined Ratio (%)90.9% 89.1% 91.7% 90.6%
Book Value per Share ($)$16.50 $13.69 $13.96 $14.47

Revenue components (mix)

Component ($USD Millions)Q3 2024Q2 2025Q3 2025
Net Premiums Earned$67.050 $69.381 $71.196
Net Investment Income$7.485 $6.691 $6.566
Net Realized Gains (Losses)$0.158 $3.116 $0.000
Net Unrealized Gains (Losses) on Equity Sec.$3.873 $1.829 $4.117
Fee & Other Income$0.129 $0.071 $0.097
Total Revenues$78.695 $81.088 $81.976

KPIs and Insurance Ratios

KPIQ1 2025Q2 2025Q3 2025
Voluntary Premium Growth YoY (%)7.1% 12.8% 10.6%
Payroll Audit Contribution ($USD Millions)$5.0 $1.5 $2.5
Accident Year Loss Ratio (%)71.0% 71.0% 71.0%
Favorable PY Reserve Development ($USD Millions)$8.7 $8.6 $8.9
Effective Tax Rate (%)20.2% 20.1% 21.0%
Money Market Yield (%)N/AN/A4.0%
Investment Portfolio (incl. cash) ($USD Millions)$825.8 $807.4 $817.0
Statutory Surplus ($USD Millions)N/AN/A$259.0
Policy Renewal Retention (%)N/AN/A93.6%
Wage Growth (%)N/A5.7% 6.7%

Actual vs. S&P Global Consensus (Q3 2025)

  • Primary EPS (normalized): Actual $0.55 vs. Consensus $0.56 (miss of $0.01). Values retrieved from S&P Global.*
  • Revenue: Actual $81.976M vs. Consensus $78.287M (beat of $3.69M). Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Regular Dividend per ShareQ4 2025 Pay Date Dec 12$0.39 (ongoing quarterly) $0.39 payable Dec 12, 2025 (record Dec 5) Maintained
Special Dividend per ShareQ4 2025 Pay Date Dec 12None in 2025 prior to Q3 $1.00 payable Dec 12, 2025 (record Dec 5) Raised (announced)
Share Repurchase Authorization (Remaining)As of period-end$2.5M remaining at 6/30 after reauthorization of $25M on 7/23 $24.9M remaining at 9/30 (post Q3 buybacks) Raised (program reset)
Tax RateOngoingNo formal guidanceEffective tax rate in Q3: 21.0% (context) N/A (disclosed actual)
Revenue/MarginsFY/QuarterNo formal guidance providedNo formal guidance providedMaintained (no guidance)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Voluntary Premium MomentumQ1: +7.1% YoY; focus on retention and new business . Q2: +12.8% YoY; policy count growth and strong retention .+10.6% YoY; sixth consecutive quarter of top-line growth; policy retention 93.6% .Sustained strength; compounding benefits of disciplined underwriting and sales .
Medical Inflation & UtilizationNot emphasized in releases.Watching utilization (home health, PA visits); fee schedules abate inflation; vigilance on medical cost trends .Heightened monitoring; risk contained by fee schedules.
Wage Growth & PayrollsModeration noted via audits; Q1 audit $5.0M .Wage growth ~6.7%; total ~8.9% incl. new employee count bounce-back; supportive for future audit premiums .Improving wage trend; audit tailwind may moderate less.
Competitive EnvironmentCompetitive market acknowledged; differentiation via service and risk expertise .“Extremely competitive” but stable appetites; AMERISAFE consistency is a selling point .Competitive intensity sustained; discipline across market implied.
Capital DeploymentQ2: $0.39 dividend; $25M buyback reauthorization .$1.00 special + $0.39 regular dividend; $1.3M buybacks; BVPS up 7.1% YTD .Balanced return + reinvestment; smaller special signals growth investment .
Investment Income & YieldsQ1/Q2 NII down YoY from smaller asset base; yields steady .NII down 12.3% YoY; TE book yield 3.9%; MMF yield 4.0%; portfolio AA- rating, duration 4.3 yrs .Asset base headwind persists; yields stable/moderating.
Loss Costs/RegulatoryNot detailed prior.State loss costs mostly mid-single-digit declines for 2026; carriers pricing relatively flat per agent survey; discipline inferred .Market remains disciplined.

Management Commentary

  • CEO framing: “We are pleased to report our sixth consecutive quarter of growth... Voluntary premiums... increasing by 10.6%... We remain focused on strengthening our team, advancing our technology, and maintaining underwriting discipline” .
  • Profitability/returns: “Healthy 20.5% ROAE and a 90.6% combined ratio for the quarter... compound benefits of disciplined underwriting, robust new business production, and strong renewal performance” .
  • Capital philosophy: “Our growth strategy… is not short lived… we’re using that capital and deploying that capital toward organic growth” (re: special dividend sizing) .
  • CFO details: Portfolio TE book yield 3.9%; MMF yield 4.0%; investments + cash ~$817M; buybacks ~$1.3M; statutory surplus $259M; filing 10-Q post-call .

Q&A Highlights

  • Drivers of voluntary premium growth: broad-based across policy count (+~2.7% QoQ; ~11% YoY), expanding insured payrolls, 93.6% renewal retention, value-added safety services and claims handling .
  • Special dividend rationale: confidence in durable organic growth; capital increasingly allocated to growth vs. returning more via specials .
  • Underwriting leverage and risk posture: underwriting leverage “right at one”; comfortable upper bound ~1.5; frequency low, severity higher; large losses lumpy (17 YTD >$1M) .
  • Medical inflation/fee schedules: fee schedules provide relief; vigilance on utilization (home health, PA visits leading to more visits); stable legislative backdrop for workers’ comp fee schedules .
  • Market/competitive dynamics: “extremely competitive”; stable appetites; AMERISAFE’s consistent footprint and approach differentiate with agents .

Estimates Context

  • Q3 2025 results vs. S&P Global consensus: normalized EPS $0.55 vs. $0.56 (miss), revenue $81.976M vs. $78.287M (beat). Values retrieved from S&P Global.*
  • Forward look (Q4 2025): EPS $0.595* and revenue $80.306M*, indicating modest sequential EPS uplift and stable revenue base. Values retrieved from S&P Global.*

Where estimates may need to adjust:

  • Revenue beat could lift near-term revenue models; normalized EPS miss was marginal and driven by investment income headwinds and expense mix—limited negative revision risk if underwriting discipline holds .

Key Takeaways for Investors

  • Revenue quality improving with sustained voluntary premium growth and strong retention; underwriting remains disciplined with a sub-91% combined ratio .
  • The slight normalized EPS miss versus consensus is overshadowed by a clear revenue beat and favorable reserve development; investment income drag from a smaller asset base is a known, diminishing headwind as reinvestment continues . Values retrieved from S&P Global.*
  • Capital deployment signals confidence: smaller special dividend paired with ongoing buybacks suggests prioritization of profitable organic growth while maintaining shareholder returns .
  • Wage growth and stabilized new employee count support future audit premiums, offsetting broader macro concerns around utilization and medical inflation .
  • Competitive intensity is high but market discipline appears intact (loss costs down, pricing steady); AMERISAFE’s consistent footprint and service model are a differentiation lever .
  • Near-term catalysts: special dividend payable Dec 12; potential sentiment volatility around CFO transition announced Nov 3—watch for continuity signals and 10-Q disclosures .
  • Medium-term thesis: maintain exposure to a disciplined underwriter with steady ROAE and improving top line; monitor utilization trends and investment income trajectory alongside reinvestment yields .

Footnote: *Values retrieved from S&P Global.