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1. Company Snapshot

1.a. Company Description

Employers Holdings, Inc., through its subsidiaries, operates in the commercial property and casualty insurance industry primarily in the United States.It offers workers' compensation insurance to small businesses in low to medium hazard industries.The company markets its products through independent local, regional, and national agents and brokers; alternative distribution channels; and national, regional, and local trade groups and associations, as well as directly to customers.


Employers Holdings, Inc.was founded in 2000 and is based in Reno, Nevada.

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1.b. Last Insights on EIG

The recent 3-month performance of Employers Holdings, Inc. was negatively impacted by a decrease in net income, which plummeted to $10.8 million ($0.46 per diluted share) from $118.6 million ($4.71 per diluted share) in the previous year. The company's loss and LAE ratio surged to 76.4% from 60.9%, while its GAAP combined ratio increased to 110.9%. Additionally, AlphaQuest LLC and Geode Capital Management LLC decreased their stock positions by 34% and 0.5%, respectively. Despite beating Q4 earnings estimates with $0.66 per share, the company's financials indicate a challenging environment.

1.c. Company Highlights

2. Employers Holdings' Q3 2025 Earnings: A Challenging Quarter Amidst Strengthening Reserves

Employers Holdings, Inc. reported a challenging third quarter of 2025, with net premiums earned increasing by 3% to $192.1 million, but ultimately resulting in an adjusted net loss of $25.5 million, compared to adjusted net income of $20.2 million a year ago. The loss was largely driven by a $38.2 million increase in prior year reserves, primarily related to accident years 2023 and 2024, and a cumulative catch-up adjustment of $11.4 million to the 2025 accident year loss and LAE reserves. The company's EPS came out at -1.1, significantly missing estimates of 0.61. The revenue growth is expected to be -0.3% next year, according to analysts' estimates.

Publication Date: Nov -04

📋 Highlights
  • Reserve Adjustments: Increased prior year reserves by $38.2 million, primarily for accident years 2023 and 2024, raising 2025 loss and LAE ratio to 72% from 69% due to California cumulative trauma claims.
  • Premium Growth: Third-quarter gross written premium rose 1.4% YoY, with net premiums earned at $192.1 million (+3% YoY), driven by renewal business.
  • Financial Performance: Adjusted net loss of $25.5 million contrasted with $20.2 million adjusted net income in prior-year Q3; 9-month adjusted net income fell to $34 million from $90 million.
  • Share Repurchases: Repurchased $45.2 million of stock at $43.09/share in Q3, with $125 million added to the 2025 share buyback program, boosting adjusted book value per share 5.5% to $51.31 YoY.

Underwriting Performance and Reserve Strengthening

The company's underwriting performance was impacted by an increase in California cumulative trauma claims, leading to an increase in the accident year 2025 loss and LAE ratio from 69% to 72%. Kathy Antonello, CEO, stated that these adjustments "fully address the recent trends and are not a sign of broad deterioration in our book of business." The company is taking targeted pricing actions, more aggressive claims handling, and underwriting refinements to mitigate the impact of CT claims.

Financial Results and Capital Management

The company's net investment income was relatively flat compared to the prior year, at $26.1 million. The company repurchased $45.2 million of common stock in the quarter, with an average price of $43.09 per share. The company's recapitalization plan authorizes a $125 million increase to the existing 2025 share repurchase program. Michael Pedraja, CFO, mentioned that the company will be disciplined with the buyback plan and will increase activity if the stock price goes down.

Valuation and Dividend Yield

Employers Holdings' current Price-to-Book Ratio is 0.83, indicating that the stock may be undervalued. The Dividend Yield is 3.44%, providing a relatively stable source of return for investors. With the company's efforts to strengthen its reserves and improve underwriting profitability, the stock may offer an attractive opportunity for investors.

3. NewsRoom

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Employers Holdings, Inc. (EIG) Q4 2025 Earnings Call Transcript

Feb -20

Source: seekingalpha.com

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Employers Holdings (EIG) Tops Q4 Earnings Estimates

Feb -20

Source: zacks.com

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Employers Holdings, Inc. Reports Fourth Quarter 2025 and Full-Year Financial Results; Declares Quarterly Cash Dividend of $0.32 per Share; and Announces Completion of $125 million Recapitalization Plan

Feb -19

Source: globenewswire.com

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4imprint® Named to Forbes® List of America's Best Employers for 2026

Feb -19

Source: businesswire.com

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Child Care Overtakes Retirement as a Top Workplace Benefit – But Employers Are Falling Behind, According to New KinderCare Research

Feb -19

Source: businesswire.com

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EMPLOYERS® Expands into Excess Workers' Compensation Insurance, Bringing Over a Century of Workers' Compensation Expertise to Self-Insurance Market

Feb -18

Source: globenewswire.com

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Robert Half Selected by Forbes as One of America's Best Large Employers 2026

Feb -16

Source: prnewswire.com

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The Hartford's Future Of Benefits Study: Employers Seeking Simplicity And Ease In The Face Of Increasingly Complex Landscape

Feb -12

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Insurance

Expected Growth: 5.0%

Employers Holdings, Inc.'s 5.0% growth in insurance is driven by increasing demand for workers' compensation insurance, expansion into new markets, and a strong underwriting discipline. Additionally, the company's focus on small businesses and strategic partnerships contribute to its growth momentum.

7. Detailed Products

Workers' Compensation Insurance

Employers Holdings, Inc. offers workers' compensation insurance to employers, providing coverage for work-related injuries and illnesses.

Workers' Compensation Claims Management

The company provides claims management services to help employers manage and resolve workers' compensation claims efficiently.

Risk Management Services

Employers Holdings, Inc. offers risk management services to help employers identify and mitigate workplace hazards, reducing the risk of accidents and injuries.

Loss Prevention Services

The company provides loss prevention services to help employers prevent accidents and injuries in the workplace.

Compliance Services

Employers Holdings, Inc. offers compliance services to help employers comply with state and federal regulations related to workers' compensation insurance.

8. Employers Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Employers Holdings, Inc. is medium due to the presence of alternative insurance providers and self-insurance options.

Bargaining Power Of Customers

The bargaining power of customers for Employers Holdings, Inc. is low due to the company's strong brand reputation and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Employers Holdings, Inc. is medium due to the company's dependence on a few large insurance brokers and agents.

Threat Of New Entrants

The threat of new entrants for Employers Holdings, Inc. is low due to the high barriers to entry in the insurance industry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The intensity of rivalry for Employers Holdings, Inc. is high due to the competitive nature of the insurance industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.75%
Debt Cost 5.25%
Equity Weight 99.25%
Equity Cost 5.25%
WACC 5.25%
Leverage 0.76%

11. Quality Control: Employers Holdings, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Investors Title

A-Score: 6.5/10

Value: 5.6

Growth: 4.7

Quality: 6.6

Yield: 9.0

Momentum: 6.0

Volatility: 7.0

1-Year Total Return ->

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Tiptree

A-Score: 5.9/10

Value: 8.6

Growth: 7.7

Quality: 6.4

Yield: 4.0

Momentum: 3.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Employers Holdings

A-Score: 5.8/10

Value: 7.0

Growth: 5.0

Quality: 5.4

Yield: 7.0

Momentum: 1.5

Volatility: 8.7

1-Year Total Return ->

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AMERISAFE

A-Score: 5.7/10

Value: 4.9

Growth: 2.2

Quality: 7.1

Yield: 10.0

Momentum: 1.0

Volatility: 9.0

1-Year Total Return ->

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ICC Holdings

A-Score: 5.0/10

Value: 5.0

Growth: 7.3

Quality: 4.8

Yield: 0.0

Momentum: 7.0

Volatility: 6.0

1-Year Total Return ->

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MBIA

A-Score: 4.9/10

Value: 8.1

Growth: 1.3

Quality: 5.0

Yield: 5.0

Momentum: 7.5

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

39.18$

Current Price

39.18$

Potential

-0.00%

Expected Cash-Flows