AMERISAFE's Q4 Earnings Beat on Higher Premiums Earned

AMERISAFE, Inc. AMSF reported fourth-quarter adjusted earnings per share (EPS) of 67 cents, which beat the Zacks Consensus Estimate by 11.7%. However, the bottom line dipped 9.5% year over year.

Operating revenues declined 0.5% year over year to $73.5 million. The top line missed the consensus mark by 4.9%.

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The better-than-expected fourth-quarter earnings benefited from improved net premiums earned. However, declining net investment income and an elevated operating expense level, resulting from an increase in loss and loss adjustment expenses incurred, partially offset the positives.

AMERISAFE, Inc. Price, Consensus and EPS Surprise

AMERISAFE, Inc. price-consensus-eps-surprise-chart | AMERISAFE, Inc. Quote

2024 Full-Year Performance of AMSF

Full-year operating revenues of $300.1 million increased from $299 million a year ago. Total expenses of $240 million rose from $229.5 million in the previous year. Operating earnings of $2.53 per share were lower than the year-ago level of $2.91. Net income of $55.4 million fell from $62.1 million a year ago. Pre-tax underwriting profit of $30.6 million declined 18.6% year over year.

AMSF’s Q4 Performance

Net premiums earned of $66.5 million improved 1.2% year over year in the quarter under review but missed the Zacks Consensus Estimate by 4.6%. The metric benefited from improved contributions from payroll audits and related premium adjustments as a result of persistent payroll strength.

Net investment income dipped 14.4% year over year to $6.9 million due to reduced investable assets. Fee and other income declined 11.7%.

AMERISAFE reported a pre-tax underwriting profit of $9.2 million, which declined 3.2% year over year.

Total expenses rose to $57.3 million in the fourth quarter, up from $56.2 million a year ago.

Operating net income of $12.8 million decreased 10.3% year over year.

The net combined ratio deteriorated 60 basis points (bps) year over year to 86.1% but came lower than the consensus mark of 90.95%. The metric suffered due to a deteriorating net loss ratio and net underwriting expense ratio.

Financial Update (as of Dec. 31, 2024)

AMERISAFE exited the fourth quarter with cash and cash equivalents of $44 million, which rose from $38.7 million as of 2023 end. Total assets of $1.16 billion decreased from the $1.23 billion figure in 2023-end.

Shareholders' equity of $257.3 million fell from the 2023-end level of $292.5 million.

Book value per share was $13.51 as of Dec. 31, 2024, which increased 11.6% from the 2023-end figure.

Return on average equity deteriorated 590 bps year over year to 18.5% in the quarter under review.

Capital Deployment Update

Management announced a quarterly cash dividend of 39 cents per share, indicating a 5.4% increase, which will be paid out on March 21 to its shareholders of record as of March 7, 2025. The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Did Other Stocks Perform?

Here are some other stocks in the broader Finance space that have already reported earnings for this quarter: CNO Financial Group, Inc. CNO, American International Group, Inc. AIG and The Allstate Corporation ALL.

CNO Financial reported fourth-quarter adjusted EPS of $1.31, which beat the Zacks Consensus Estimate by 22.4%on the back of increased collected premiums across annuity, life and health products, driving an increase in total insurance policy income. Growth in fee revenues and a decline in overall expense level also contributed to the upside. However, the positives were partly offset by softer investment results.

American Internationalreported fourth-quarter 2024 adjusted EPS of $1.30, which beat the Zacks Consensus Estimate by 3.2% supported by new business production, robust retention and lower expenses. Lower premiums and high catastrophe charges partially offset the positives.

Allstate reported a fourth-quarter 2024 adjusted net income of $7.67 per share, which outpaced the Zacks Consensus Estimate by 17.8% on the back of growth in premiums and improved underwriting income and investment income. However, the upside was partly offset by elevated catastrophe losses and increased costs and expenses.

This article originally published on Zacks Investment Research (zacks.com).

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