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    EIG
    Earnings call· Jun 2026(Q2 FY26)

    Employers Holdings Q2 FY26 earnings call EIG

    Jul 30, 2026 Source

    Executive summary

    Employers Holdings, Inc. Q2 FY26 — Recapitalization Benefits Drive EPS Growth

    Employers Holdings, Inc. delivered strong per-share earnings growth in Q2 FY26, driven by the compounding benefits of its recapitalization and accretive share repurchases. While top-line premiums declined due to strategic underwriting actions, the company successfully launched a new excess workers' compensation product and is focused on diversifying its offerings. Management remains committed to profitable, sustainable growth and prudent capital management.

    Highlights

    5

    • Diluted earnings per share grew 29% year over year, and adjusted EPS grew 46% year over year.

    • Book value per share, including deferred gain, grew 9% year over year to $52.58.

    • Successful launch of new excess workers' compensation product line, generating $4 million in premium from 20 policies bound in July.

    • Underwriting expenses declined 8% to $40 million from $43 million a year ago.

    • Weighted average book yield increased 40 basis points to 4.9% at quarter end.

    Concerns

    3

    • Gross premiums written decreased 20% to $163 million compared to $203 million in the prior year quarter.

    • Net premium earned declined 12% year-over-year, and policies in force declined 5%.

    • Increased competition in the middle market space, with some 'irrational behavior' in certain jurisdictions.

    Operational metrics

    10
    Diluted EPS growth
    29%YoY
    Q2 FY26
    Adjusted EPS growth
    46%YoY
    Q2 FY26
    Losses and LAE
    $122 millionvs $140 million prior year
    Q2 FY26
    Current accident year loss and LAE ratio
    72%consistent with FY25
    Q2 FY26
    Commission expense
    $22 millionvs $26 million prior year
    Q2 FY26
    Underwriting expenses
    $40 milliondown 8% from $43 million prior year
    Q2 FY26
    Adjusted net income
    $13 millionvs $12 million last year
    Q2 FY26
    AI staff adoption rate
    94%
    Q2 FY26
    Re-underwriting of CT claims
    more than 50% done
    Q2 FY26

    Process of re-underwriting policies due to cumulative trauma phenomenon.

    Medical inflation
    benign
    Q2 FY26

    No alarming trends or impact from tariffs on medical prices. Confirmed by internal prescription drug index and CCI study.

    Industry KPIs

    9
    MetricValueDetails
    Combined ratio1.5percentage points
    Capital returns$28 millionUSD
    Book value per share$52.58USD
    Net investment income$27 millionUSD
    Retention persistency5%%
    Net premiums written earned$163 millionUSD
    Renewal rate change pricing5%%
    Statutory regulatory capitalWell capitalized
    Prior year reserve developmentNo change

    Product announcements

    2
    ProductTypeDetails
    Excess Workers' Compensation Policylaunch
    Large Deductible Workers' Compensationroadmap

    Risks & headwinds

    2
    Competition in middle market workers' compensationQ2 FY26

    Gross premiums written decreased 20% to $163 million; Net premium earned declined 12% YoY; Policies in force declined 5%.

    Mitigation: Prioritizing profitability over volume; turning away business where desired margins are not met; focusing on new growth sources like excess workers' compensation.

    Uncertainty from cumulative trauma (CT) claimsRecent accident years

    No change to loss reserves for accident years 2025 and prior, despite favorable development in older accident years.

    Mitigation: Remaining conservative and cautious in reserving, particularly for recent years with higher weight in California.

    What to watch in Q3 FY26

    4

    Excess Workers' Comp Product Growth

    Next quarter
    Current$4 million in premium from 20 policies in July
    TargetContinued strong submission flow and premium generation, though July pace may not be monthly sustained.

    Why it matters

    This new product line is a key lever for future growth and diversification, especially as the guaranteed cost market softens.

    The success of this new product continued in July with over 200 policy submissions and 20 policies bound, producing $4 million in premium. It's a new lever for growth and one that complements our core book.

    Q&A highlights

    8

    What is the expected impact of the 6.6% California advisory pure premium rate increase on the company's overall pricing and will other carriers follow?

    Management believes they were already ahead of the curve on rate adequacy in California, so the increase is not expected to significantly impact their book. They cannot speak for other carriers but are hopeful for continued focus on reform in the state. Countrywide, the renewal book saw a 5% rate increase.

    “We do internally feel like we've been ahead of the curve in terms of rate adequacy in the state. So the increase that the Bureau filed and the Commissioner approved, not the entire increase, increase, but some of it. We feel like we already had that baked into our rates. So, we feel like it's more, we were ahead of the curve on that, I would say.”

    asked by Mark Hughes · answered by Katherine Antonello

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Underwriting and Product Diversification

    The company's net premium earned declined 12% year-over-year, and policies in force decreased 5%, reflecting deliberate pricing and underwriting actions to prioritize profitability over volume. These decreases were primarily in customer segments and geographies targeted for concentration on the core small business segment. Management is actively building new growth sources, including the successful launch of an excess workers' compensation product.

    02

    Actuarial Review and Reserve Adequacy

    The second quarter actuarial review aligned with expectations, resulting in no change to loss reserves for accident years 2025 and prior. The current accident year loss and LAE ratio, excluding the LPT, on voluntary business was maintained at 72%, consistent with the full-year 2025 accident year ratio. Management noted a conservative stance on reserves for recent years due to uncertainty from cumulative trauma claims, particularly in California.

    03

    Investment Portfolio Performance

    Net investment income was $27 million, a 1% increase year over year. This was primarily driven by a 40 basis point increase in the weighted average book yield, which reached 4.9% at quarter end, up from 4.5% in the prior year. The improvement is attributed to the investment rebalancing executed in the previous year. The fixed maturities portfolio maintains a modified duration of 4.5 years and a strong average credit quality of A+.

    04

    Technology and AI Initiatives

    Employers Holdings continues to advance its technology initiatives, including a major claim system upgrade and a new customer relationship management system. The company reported a 94% AI staff adoption rate and has implemented several AI-assisted use cases with meaningful, tangible ROIs, contributing to efficiency and productivity across the organization. Future product development, such as the large deductible offering, is expected to leverage AI.

    05

    California Market Dynamics

    The California Insurance Commissioner's approval of a 6.6% advisory pure premium rate increase, effective September 1st, presents a significant opportunity. Management believes the company was already ahead of the curve on rate adequacy in California and does not expect the increase to significantly impact its book. Overall countrywide, the renewal book achieved approximately a 5% rate increase year over year, despite relatively flat payrolls.

    AI-generated summary of the company’s earnings call. Not investment advice.