Employers Holdings, Inc. Reports Robust Second Quarter 2026 Results: Earnings Per Share Surges, Launches New Product, Continues Share Repurchases
Key Financial Highlights
- Net Income: \$29.1 million (\$1.59 per diluted share) vs. \$29.7 million (\$1.23 per diluted share) in Q2 2025 – though net income was flat, diluted EPS grew 29% due to share repurchases and recapitalization.
- Adjusted Net Income: \$12.8 million (\$0.70 per diluted share) vs. \$11.5 million (\$0.48 per diluted share) in Q2 2025 – adjusted EPS up 46%.
- Gross Premiums Written: \$163.4 million, declined 19.6% from \$203.3 million, reflecting deliberate pricing and underwriting actions prioritizing profitability over volume.
- Net Premiums Earned: \$174.1 million, down 12% from \$198.3 million.
- Loss and LAE Ratio: Improved to 70.2% from 70.7%.
- Commission Expense Ratio: Improved to 12.8% from 13.2%.
- Underwriting Expense Ratio: Increased slightly to 22.8% from 21.7% due to smaller premium base.
- GAAP Combined Ratio: 105.8% (106.7% excluding LPT) vs. 105.6% (106.4% excluding LPT).
- Net Investment Income: \$27.4 million, up 1.1% from \$27.1 million.
- Net Realized and Unrealized Gains: \$18.7 million vs. \$20.9 million, driven mainly by gains in equity investments.
- Policies In-Force: 127,601, down 5% from 134,421.
- Book Value Per Share (Including Deferred Gain): \$52.58 (up 9.0%), and Adjusted Book Value Per Share: \$53.26 (up 5.6%), including dividends declared.
- Capital Returned to Shareholders: \$34.0 million via share repurchases (\$27.7 million) and dividends (\$6.3 million).
Management Commentary
Katherine Antonello, CEO, emphasized disciplined execution and strong per-share results. Diluted EPS grew 29%, adjusted EPS 46%, reflecting positive impacts from recapitalization and share repurchase strategy. Net premiums earned decreased 12%, reflecting a focus on profitability over volume. Policies in-force declined 5%, a smaller drop than premium, indicating a shift toward the core small business segment. Loss and LAE ratio improvement and no prior period development on voluntary business were consistent with expectations.
Investment portfolio delivered \$27.4 million net investment income with a 4.9% book yield, up 40bps year-over-year due to 2025 investment rebalancing. Book value per share (including Deferred Gain) grew 9.0%, adjusted book value per share up 5.6%. Antonello highlighted the launch of excess workers’ compensation in June, broadening product offerings and supporting future profitable growth.
Shareholder & Price-Sensitive Information
- Dividend Declaration: Regular quarterly dividend of \$0.34 per share, payable August 26, 2026, to holders of record August 12, 2026.
- Share Repurchases: 651,752 shares repurchased at an average price of \$42.43; \$113.0 million repurchase authorization remains under 2026 program.
- Recapitalization Impact: The recapitalization plan, including the issuance of \$125.0 million in senior debt in late 2025, drove EPS growth and continues to support shareholder value.
- Product Launch: In June, Employers Holdings began writing excess workers’ compensation, marking a new product line that could drive future growth and diversify revenue.
- Expense Ratios: Commission expense ratio improved, underwriting expense ratio increased slightly due to premium decline, highlighting continued cost management and discipline.
- Effective Tax Rate: 16.1% vs. 19.7% in Q2 2025, reflecting tax benefits, credits, and LPT adjustments.
- Combined Ratio: Only modest movement, but premium restitution from a former policyholder favorably impacted Q2 combined ratio by approximately 150bps.
Business Overview & Outlook
Employers Holdings serves small and mid-sized businesses in lower hazard industries, offering workers’ compensation, excess workers’ compensation, and digital-first solutions via Cerity®. All insurance subsidiaries are rated A (Excellent) by AM Best. The company’s strategic focus remains on profitable growth, diversification, and prudent capital management.
Forward-Looking Statements
Management discusses intentions, beliefs, and expectations regarding future performance, economic conditions, inflation, tariffs, interest rate changes, labor trends, and more. Investors are cautioned that forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties, including those detailed in SEC filings.
Conference Call & Additional Information
Employers Holdings will host its earnings conference call on July 30, 2026, at 11:00 a.m. Eastern Time. Registration and webcast details are available at employers.com. SEC filings and investor presentations can also be accessed via the company website and EDGAR.
Contact
For further information, contact Michael Pedraja at (775) 327-2706 or [email protected].
Disclaimer: This article is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell securities. Investors should review official filings and consult their financial advisors before making investment decisions. Past performance is not indicative of future results; forward-looking statements are subject to risks and uncertainties.
