AMERISAFE Inc (AMSF) Announces Q3 2023 Earnings: Key Highlights
Net premiums earned decreased by 1.7% to $66,634 thousand in Q3 2023 compared to the same period in 2022.
Net investment income increased by 16.1% to $8,105 thousand.
Net income decreased by 12.3% to $9,961 thousand.
Operating net income decreased by 17.3% to $11,680 thousand.
AMERISAFE Inc (NASDAQ:AMSF) released its third-quarter earnings report on October 26, 2023. The company reported a return on equity of 11.8% for the quarter. Despite a decrease in net premiums earned and net income, the company saw a significant increase in net investment income.
Financial Performance
AMERISAFE's net premiums earned for the third quarter of 2023 were $66,634 thousand, a decrease of 1.7% from the same period in 2022. Net investment income, however, increased by 16.1% to $8,105 thousand. The company's net income for the quarter was $9,961 thousand, a decrease of 12.3% from Q3 2022. Operating net income also decreased by 17.3% to $11,680 thousand.
CEO Commentary
G. Janelle Frost, President and Chief Executive Officer, commented, Robust payroll audits coupled with growth in policy count led to top-line growth this quarter. We were able to maintain a strong operating ROAE of 13.2% and combined ratio of 90.6%, despite some infrequent items that impacted our expenses this quarter. Our underwriting expertise continues to drive AMERISAFEs strong returns and balance sheet position.
Insurance and Investment Results
For the third quarter of 2023, gross premiums written increased by 3.9% to $70,840 thousand. However, net premiums earned decreased by 1.7% to $66,634 thousand. The company's underwriting profit for the quarter was $6,305 thousand, a decrease of 35.9% from Q3 2022.
On the investment front, AMERISAFE reported net investment income of $8,105 thousand, an increase of 16.1% from the same period in 2022. However, the company reported net unrealized losses on equity securities of $7,309 thousand.
Capital Management and Dividends
AMERISAFE announced a special cash dividend of $3.50 per share, payable on December 15, 2023, to shareholders of record as of December 1, 2023. The company also paid a regular quarterly cash dividend of $0.34 per share on September 22, 2023, representing a 9.7% increase in the quarterly dividend compared with 2022.
Future Outlook
Despite the challenges faced in the third quarter, AMERISAFE remains committed to leveraging its underwriting expertise to drive strong returns and maintain a solid balance sheet position. The company's robust payroll audits and growth in policy count are expected to contribute to top-line growth in future quarters.
Explore the complete 8-K earnings release (here) from AMERISAFE Inc for further details.
This article first appeared on GuruFocus.
