UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_____________________
FORM
8-K
_____________________
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of report (Date of earliest event reported): May 13, 2008
EMPLOYERS
HOLDINGS, INC.
(Exact
Name of Registrant as Specified in its Charter)
_____________________
|
NEVADA
(State
or Other Jurisdiction of
Incorporation)
|
001-33245
(Commission
File Number)
|
04-3850065
(I.R.S.
Employer Identification No.)
|
|
10375
Professional Circle
Reno,
Nevada
(Address
of Principal Executive Offices)
|
89521
(Zip
Code)
|
|
|
Registrant's
telephone number including area code: (888)
682-6671
|
||
|
No
change since last report
(Former
Name or Address, if Changed Since Last
Report)
|
||
_____________________
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Section
2 – Financial Information
Item
2.02 Results of Operations and Financial Condition.
On May 13, 2008, Employers Holdings,
Inc. (the "Company") issued a press release announcing results for the first
quarter ended March 31, 2008. The press release is attached hereto as
Exhibit 99.1 and is incorporated by reference herein, and is being furnished,
not filed, under Item 2.02 to this Current Report on Form 8-K.
Section
9 – Financial Statements and Exhibits
Item
9.01. Financial Statements and Exhibits.
99.1 Employers
Holdings, Inc. press release, dated May 13, 2008.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
EMPLOYERS
HOLDINGS, INC.
|
||
|
By:
|
/s/
Lenard T. Ormsby
|
|
|
Name:
|
Lenard
T. Ormsby
|
|
|
Title:
|
Executive
Vice President, Chief
|
|
|
Legal
Officer and General Counsel
|
||
Dated: May
13, 2008
Exhibit
Index
|
Exhibit
No.
|
Exhibit
|
|
|
99.1
|
Employers
Holdings, Inc. press release, dated May 13,
2008.
|
news
release
|
May
13, 2008
|
For
Immediate Release
|
Employers
Holdings, Inc. Reports First Quarter Earnings
Reno,
Nevada—May 13, 2008—Employers Holdings, Inc. (“EHI” or the “Company”) (NYSE:EIG)
today reported results for the first quarter ended March 31, 2008.
First
quarter consolidated net income was $25.5 million or $0.51 per share in 2008
compared to $27.9 million or $0.53 pro forma per share in the
first quarter of 2007. Net income includes amortization of the deferred
reinsurance gain related to the Loss Portfolio Transfer (“LPT”) Agreement.
Consolidated net income before the impact of the LPT (the Company’s non-GAAP
measure described below) was $20.7 million or $0.42 per share in the first
quarter of 2008 and $23.3 million or $0.45 pro forma per share in the
first quarter of 2007.
Commenting
on the Company’s performance, President and Chief Executive Officer Douglas D.
Dirks said, “While our top line is lower first quarter 2008 over first quarter
2007, we continue to see solid increases in our in force policy count. Our
growth in California remains strong and benefits from declining loss trends have
continued into the first quarter of this year. We are also making progress in
completing our acquisition of AmCOMP Incorporated, which will provide us with
immediate growth in premium and a more diversified earnings base.”
First
quarter net premiums earned declined $13.9 million or 15.5% to $75.9 million in
2008 from $89.8 million in 2007. The decline was largely due to rate decreases
resulting from previously enacted reforms in California. The impact of these
rate decreases was partially offset by an overall in force policy count increase
of 10.7%, from 30,922 at March 31, 2007 to 34,242 at March 31,
2008.
First
quarter net investment income decreased $1.9 million in 2008 primarily due to
one-time interest income of $1.8 million received in the first quarter of 2007
from the invested net proceeds related to the issuance of common stock as part
of the Company’s conversion from a mutual insurance holding
company.
Realized
losses on investments for the first quarter of 2008 totaled $1.5 million
compared with realized gains of $0.2 million for the first quarter of 2007. This
difference was primarily due to a $1.5 million other-than-temporary impairment
on equity securities.
First
quarter losses and LAE decreased 26.5% to $30.6 million in 2008 compared with
$41.7 million in 2007. Before the impact of the LPT, losses and LAE would have
been $35.4 million in the first quarter of 2008 and $46.3 million in the first
quarter of 2007. The decline in losses and LAE was largely due to declines in
net earned premiums.
Page
1 of 10
In the
first quarter of 2008, commission expense of $10.6 million decreased from $11.7
million in the first quarter of 2007 largely due to the decline in premiums
written.
First
quarter underwriting and other operating expense decreased to $21.7 million in
2008 from $23.3 million in 2007 primarily due to reduced consulting fees related
to the Company’s conversion in the first quarter of last year, a decline in
premium taxes and lower general operating expenses.
Income
taxes of $5.3 million for the first quarter of 2008 decreased from $7.4 million
for the first quarter of 2007 due to lower pre-tax income and effective tax
rates. The Company’s effective tax rate was 17.2% in the first quarter of 2008
compared with 21.0% in the first quarter of 2007. The lower effective tax rate
in the first quarter of 2008 was largely due to first quarter 2007
non-deductible expenses related to the Company’s conversion.
The
first quarter 2008 combined ratio of 83.0% (89.3% before the LPT) improved from
the first quarter 2007 combined ratio of 85.4% (90.5% before the LPT). The
combined ratio improvement was due primarily to lower losses and LAE partially
offset by an increase in the underwriting and other operating expense ratio
resulting from lower net earned premiums.
As of
March 31, 2008, total stockholders’ equity increased to $396.2 million from
$379.5 million at March 31, 2007. Equity, including the deferred reinsurance
gain related to the LPT, increased 1.5% to $816.4 million from $804.5 million at
December 31, 2007.
Conference Call and Web
Cast, Form 10-Q
The
Company will host a conference call Wednesday, May 14, 2008, at 10:30 a.m.
Pacific Daylight Time. The conference call will be available via a live web cast
on the Company’s Web site at www.employers.com. An
archived version will be available following the call. The conference call
replay number is (888) 286-8010 with a passcode of 86248800. International
callers may dial (617) 801-6888.
EHI
filed its Form 10-Q for the period ended March 31, 2008, with the Securities and
Exchange Commission (“SEC”) on Tuesday, May 13, 2008 after the market close. The
Form 10-Q is available without charge through the EDGAR system at the SEC's Web
site and is also posted on the Company's Web site, www.employers.com,
through the “Investors” link.
Discussion of Non-GAAP
Financial Measures
This
earnings release includes non-GAAP financial measures used to analyze the
Company’s operating performance for the periods presented.
A
number of these non-GAAP financial measures exclude impacts related to the LPT
Agreement. The 1999 LPT Agreement was a non-recurring transaction that does not
result in ongoing cash benefits and, consequently, the Company believes these
non-GAAP measures are useful in providing a meaningful understanding of the
Company’s operating performance. In addition, these measures, as defined, are
helpful to management in identifying trends in the Company’s performance because
the items excluded have limited significance in current and ongoing
operations.
Page
2 of 10
The
Company strongly urges stockholders and other interested persons not to rely on
any single financial measure to evaluate its business. These non-GAAP measures
are not a substitute for GAAP measures and investors should be careful when
comparing the Company’s non-GAAP financial measures to similarly titled measures
used by other companies.
Net Income before impact of
LPT. Net income less (i) amortization of deferred reinsurance
gain—LPT Agreement and (ii) adjustments to LPT Agreement ceded
reserves.
Deferred reinsurance gain—LPT
Agreement. This reflects the unamortized gain from the LPT
Agreement. Under GAAP, this gain is deferred and amortized using the recovery
method, whereby the amortization is determined by the proportion of actual
reinsurance recoveries to total estimated recoveries, and the amortization is
reflected in losses and LAE.
Gross Premiums Written.
Gross premiums written is the sum of both direct premiums written and
assumed premiums written before the effect of ceded reinsurance. Direct premiums
written represents the premiums on all policies the Company’s insurance
subsidiaries have issued during the year. Assumed premiums written represents
the premiums that the insurance subsidiaries have received from an authorized
state-mandated pool or under previous fronting facilities.
Net Premiums Written.
Net premiums written is the sum of direct premiums written and assumed
premiums written less ceded premiums written. Ceded premiums written is the
portion of direct premiums written that are ceded to reinsurers under
reinsurance contracts. The Company uses net premiums written, primarily in
relation to gross premiums written, to measure the amount of business retained
after cession to reinsurers.
Losses and LAE before impact of
LPT. Losses and LAE before (i) amortization of deferred
reinsurance gain—LPT Agreement and (ii) adjustments to LPT Agreement ceded
reserves.
Losses and LAE Ratio.
The losses and LAE ratio is a measure of underwriting profitability.
Expressed as a percentage, it is the ratio of losses and LAE to net premiums
earned.
Commission Expense
Ratio. Commission expense ratio is the ratio (expressed as a
percentage) of commission expense to net premiums earned.
Underwriting and Other Operating
Expense Ratio. The underwriting and other operating expense
ratio is the ratio (expressed as a percentage) of underwriting and other
operating expense to net premiums earned.
Combined Ratio.
The combined ratio represents the percentage of each premium dollar spent
on claims and expenses. The combined ratio is the sum of the losses and LAE
ratio, the commission expense ratio and the underwriting and other operating
expense ratio.
Combined Ratio before impacts of
LPT. Combined ratio before impact of LPT is the GAAP combined
ratio before (i) amortization of deferred reinsurance gain—LPT Agreement and
(ii) adjustments to LPT Agreement ceded reserves.
Page
3 of 10
Equity including deferred
reinsurance gain—LPT. Equity
including deferred reinsurance gain—LPT is total equity including the deferred
reinsurance gain—LPT Agreement.
Forward-Looking
Statements
In this
press release, the Company and its management discuss and make statements based
on currently available information regarding their intentions, beliefs, current
expectations, and projections regarding the Company’s future operations and
performance. Certain of these statements may constitute
"forward-looking" statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements can be
identified by the fact that they do not relate strictly to historical or current
facts and are often identified by words such as "may," "will," "could," "would,"
"should," "expect," "plan," "anticipate," "target," "project," "intend,"
"believe," "estimate," "predict," "potential," "pro forma," "seek," "likely,"
or "continue," or other comparable terminology and their negatives.
EHI and
its management caution investors that such forward-looking statements are not
guarantees of future performance. Risks and uncertainties are inherent in EHI’s
future performance. Factors that could cause the Company’s actual results to
differ materially from those indicated by such forward-looking statements
include, among other things, those discussed or identified from time to time in
our public filings with the SEC, including the risks detailed in the Company's
Form 10-Q for the period ended March 31, 2008 and the Company’s 2007 Annual
Report on Form 10-K.
All forward-looking statements made in this news release reflect
EHI’s current views with respect to future events, business transactions and
business performance and are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such statements involve risks
and uncertainties, which may cause actual results to differ materially from
those set forth in these statements. The business of EHI could be affected by
competition, pricing and policy term trends, the levels of new and renewal
business achieved, market acceptance, changes in demand, the frequency and
severity of catastrophic events, actual loss experience, uncertainties in the
loss reserving and claims settlement process, new theories of liability,
judicial, legislative, regulatory and other governmental developments,
litigation tactics and developments, investigation developments, the amount and
timing of reinsurance recoverables, credit developments among reinsurers,
changes in the cost or availability of reinsurance, market developments, rating
agency action, possible terrorism or the outbreak and effects of war and
economic, political, regulatory, insurance and reinsurance business conditions,
relations with and performance of employee agents, as well as management’s
response to these factors, and other factors identified in EHI’s filings with
the SEC. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the dates on which they are
made.
The SEC
filings for EHI can be accessed through the “Investors” link on the Company’s
website, www.employers.com, or
through the SEC's EDGAR Database at www.sec.gov (EHI
EDGAR CIK No. 0001379041). EHI assumes no obligation to update this release or
the information contained herein, which speaks as of the date
issued.
______________________________________________________________________
Copyright
© 2008 EMPLOYERS. All rights reserved. EMPLOYERS is a registered trademark of
Employers Insurance Company of Nevada and the marketing brand for a group of
companies providing workers’ compensation insurance and services. Insurance
is offered through Employers Compensation Insurance Company, except in Nevada,
where insurance is offered through Employers Insurance Company of Nevada.
Employers Compensation Insurance Company does not do business in all
jurisdictions. Please contact your local EMPLOYERS Sales Executive or visit
www.employers.com.
Page
4 of 10
CONTACT:
Media – Trish White, Director, Corporate
Communications, twhite@employers.com, (775) 327-2636
Analysts – Vicki Erickson, Vice President,
Investor Relations, verickson@employers.com, (775) 327-2794
Page
5 of 10
Employers
Holdings, Inc.
Consolidated
Statements of Income
(In
thousands)
|
Quarter
Ended
|
|||||||||
|
March
31,
|
|||||||||
|
2008
|
2007
|
||||||||
|
(unaudited)
|
|||||||||
|
Revenues
|
|||||||||
|
Gross
written premiums
|
$
|
81,674
|
$
|
96,450
|
|||||
|
Net
written premiums
|
$
|
79,104
|
$
|
93,211
|
|||||
|
Net
premiums earned
|
$
|
75,896
|
$
|
89,792
|
|||||
|
Net
investment income
|
18,903
|
20,835
|
|||||||
|
Realized
(losses) gains on investments, net
|
(1,488)
|
190
|
|||||||
|
Other
income
|
438
|
1,140
|
|||||||
|
Total
revenues
|
93,749
|
111,957
|
|||||||
|
Expenses
|
|||||||||
|
Losses
and loss adjustment expenses
|
30,614
|
41,667
|
|||||||
|
Commission
expense
|
10,623
|
11,721
|
|||||||
|
Underwriting
and other operating expense
|
21,726
|
23,300
|
|||||||
|
Total
expenses
|
62,963
|
76,688
|
|||||||
|
Net
income before income taxes
|
30,786
|
35,269
|
|||||||
|
Income
taxes
|
5,292
|
7,403
|
|||||||
|
Net
income
|
$
|
25,494
|
$
|
27,866
|
|||||
|
Net
income after date of conversion, February 5 through March 31,
2007
|
$
|
N/A
|
$
|
21,395
|
|||||
|
Reconciliation
of net income and EPS to net income
and
EPS before the impacts of the LPT Agreement
|
|||||||||
|
Net
income
|
$
|
25,494
|
$
|
27,866
|
|||||
|
Less:
Impact of LPT Agreement:
Amortization
of deferred reinsurance gain – LPT Agreement
|
4,792
|
4,587
|
|||||||
|
Net
Income before the impacts of LPT Agreement
|
$
|
20,702
|
$
|
23,279
|
|||||
Page
6 of 10
Employers
Holdings, Inc.
Consolidated
Statements of Income
(In
thousands, except share and per share data)
|
Three
months ended
March
31, 2008
|
Period
February 5,
through
March 31,
|
|||||||
|
2008
|
2007
|
|||||||
|
(unaudited)
|
||||||||
|
Net
Income
|
$
|
25,494
|
$
|
21,395
|
||||
|
Earnings
per common share
|
||||||||
|
Basic
|
$
|
0.51
|
$
|
0.40
|
||||
|
Diluted
|
$
|
0.51
|
$
|
0.40
|
||||
|
Weighted
average shares outstanding
|
||||||||
|
Basic
|
49,611,213
|
53,527,907
|
||||||
|
Diluted
|
49,646,553
|
53,527,907
|
||||||
|
Pro forma for three
months ended March 31, 2007
|
2007
|
|||||||
|
Net
Income
|
$
|
27,866
|
||||||
|
Earnings
per common share
|
||||||||
|
Basic
|
$
|
0.53
|
||||||
|
Diluted
|
$
|
0.53
|
||||||
|
Weighted
average shares outstanding
|
||||||||
|
Basic
(1)
|
52,155,944
|
|||||||
|
Diluted
(1)
|
52,155,944
|
|||||||
|
Three
months ended
March
31, 2008
|
Pro forma for three
months ended March 31,
|
|||||||
|
2008
|
2007
|
|||||||
|
Earnings
per common share
|
||||||||
|
Basic
|
$
|
0.51
|
$
|
0.53
|
||||
|
Diluted
|
$
|
0.51
|
$
|
0.53
|
||||
|
Earnings
per common share attributable to the LPT Agreement
|
||||||||
|
Basic
|
$
|
0.09
|
$
|
0.08
|
||||
|
Diluted
|
$
|
0.09
|
$
|
0.08
|
||||
|
Pro forma earnings per
common share before the LPT Agreement
|
||||||||
|
Basic
|
$
|
0.42
|
$
|
0.45
|
||||
|
Diluted
|
$
|
0.42
|
$
|
0.45
|
||||
| (1) |
The
pro
forma earnings per common share for the three months ended March
31, 2007, was computed using the shares outstanding for the period after
the Company’s conversion on February 5, 2007 (53,527,907), and for the
period prior to the conversion, assumes the common stock available to
eligible members (50,000,002).
|
|||||||
Page
7 of 10
Employers
Holdings, Inc.
Consolidated
Balance Sheets
(In
thousands, except share data)
|
March
31,
|
December
31,
|
||||
|
2008
|
2007
|
||||
|
Assets
|
(unaudited)
|
||||
|
Available
for Sale:
|
|||||
|
Fixed
maturity investments at fair value (amortized cost $1,578,407
at
March 31, 2008 and
$1,594,159 at December 31, 2007)
|
$
|
1,605,497
|
$
|
1,618,903
|
|
|
Equity
securities at fair value (cost of $59,059 at March 31, 2008 and $60,551
at
December
31, 2007)
|
95,257
|
107,377
|
|||
|
Total
investments
|
1,700,754
|
1,726,280
|
|||
|
Cash
and cash equivalents
|
178,105
|
149,703
|
|||
|
Accrued
investment income
|
18,623
|
19,345
|
|||
|
Premiums
receivable, less bad debt allowance of $6,234 at March 31, 2008
and
$6,037 at December
31, 2007
|
31,284
|
36,402
|
|||
|
Reinsurance
recoverable for:
|
|||||
|
Paid
losses
|
11,141
|
10,218
|
|||
|
Unpaid
losses, less allowance of $1,308 at each period
|
1,041,686
|
1,051,333
|
|||
|
Funds
held by or deposited with reinsureds
|
93,973
|
95,884
|
|||
|
Deferred
policy acquisition costs
|
15,032
|
14,901
|
|||
|
Deferred
income taxes, net
|
58,098
|
59,730
|
|||
|
Property
and equipment, net
|
14,440
|
14,133
|
|||
|
Other
assets
|
16,368
|
13,299
|
|||
|
Total
assets
|
$
|
3,179,504
|
$
|
3,191,228
|
|
|
Liabilities
and stockholders’ equity
|
|||||
|
Claims
and policy liabilities:
|
|||||
|
Unpaid
losses and loss adjustment expenses
|
$
|
2,255,240
|
$
|
2,269,710
|
|
|
Unearned
premiums
|
64,997
|
63,924
|
|||
|
Policyholders’
dividends accrued
|
197
|
386
|
|||
|
Total
claims and policy liabilities
|
2,320,434
|
2,334,020
|
|||
|
Commissions
and premium taxes payable
|
8,205
|
7,493
|
|||
|
Federal
income taxes payable
|
10,867
|
13,884
|
|||
|
Accounts
payable and accrued expenses
|
12,456
|
20,682
|
|||
|
Deferred
reinsurance gain–LPT Agreement
|
420,210
|
425,002
|
|||
|
Other
liabilities
|
11,107
|
10,694
|
|||
|
Total
liabilities
|
2,783,279
|
2,811,775
|
|||
|
Commitments
and contingencies Stockholders’ equity:
|
|||||
|
Common
stock, $0.01 par value; 150,000,000 shares authorized;
|
|||||
|
53,527,907
and 53,527,907 issued at, and 49,560,635 and 49,616,635
|
|||||
|
outstanding at, March 31, 2008
and December 31, 2007 respectively
|
535
|
535
|
|||
|
Preferred
stock, $0.01 par value; 25,000,000 shares authorized; none
issued
|
--
|
--
|
|||
|
Additional
paid-in capital
|
303,494
|
302,862
|
|||
|
Retained earnings
|
127,053
|
104,536
|
|||
|
Accumulated other comprehensive income, net
|
41,137
|
46,520
|
|||
|
Treasury
stock, at cost (3,967,272 shares at March 31, 2008 and
3,911,272
|
|||||
|
shares
at December 31, 2007)
|
(75,994)
|
(75,000)
|
|||
|
Total
stockholders’ equity
|
396,225
|
379,453
|
|||
|
Total
liabilities and stockholders’ equity
|
$
|
3,179,504
|
3,191,228
|
||
|
Equity
including deferred reinsurance gain – LPT
|
|||||
|
Total
stockholders’ equity
|
$
|
396,225
|
$
|
379,453
|
|
|
Deferred
reinsurance gain – LPT Agreement
|
420,210
|
425,002
|
|||
|
Total
equity including deferred reinsurance gain – LPT Agreement
|
$
|
816,435
|
$
|
804,455
|
|
Page
8 of 10
Employers
Holdings, Inc.
Consolidated
Statements of Cash Flows
(In
thousands)
|
Three
months ended March 31,
|
|||||||
|
2008
|
2007
|
||||||
|
(unaudited)
|
|||||||
|
Operating
activities
|
|||||||
|
Net
income
|
$
|
25,494
|
$
|
27,866
|
|||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
|
Depreciation
|
1,618
|
1,569
|
|||||
|
Stock-based
compensation
|
632
|
140
|
|||||
|
Amortization
of premium on investments, net
|
1,687
|
1,646
|
|||||
|
Allowance
for doubtful accounts – premiums receivable
|
197
|
404
|
|||||
|
Deferred
income tax expense
|
4,531
|
3,229
|
|||||
|
Realized
(losses) gains on investments, net
|
1,488
|
(190
|
)
|
||||
|
Change
in operating assets and liabilities:
|
|||||||
|
Accrued
investment income
|
722
|
(73
|
)
|
||||
|
Premiums
receivable
|
4,921
|
807
|
|||||
|
Reinsurance
recoverable on paid and unpaid losses
|
8,724
|
9,146
|
|||||
|
Funds
held by or deposited with reinsureds
|
1,911
|
1,711
|
|||||
|
Unpaid
losses and loss adjustment expenses
|
(14,470
|
)
|
(571
|
)
|
|||
|
Unearned
premiums
|
1,073
|
2,257
|
|||||
|
Federal
income taxes payable
|
(3,017
|
)
|
(6,820
|
)
|
|||
|
Accounts
payable, accrued expenses and other liabilities
|
(2,900
|
)
|
(13,156
|
)
|
|||
|
Deferred
reinsurance gain–LPT Agreement
|
(4,792
|
)
|
(4,587
|
)
|
|||
|
Other
|
(1,734
|
)
|
(5,346
|
)
|
|||
|
Net
cash provided by operating activities
|
26,085
|
18,032
|
|||||
|
Investing
activities
|
|||||||
|
Purchase
of fixed maturities
|
(5,414
|
)
|
(102,784
|
)
|
|||
|
Purchase
of equity securities
|
(764
|
)
|
(701
|
)
|
|||
|
Proceeds
from sale of fixed maturities
|
11,687
|
38,112
|
|||||
|
Proceeds
from sale of equity securities
|
764
|
1,165
|
|||||
|
Proceeds
from maturities and redemptions of investments
Capitalized
acquisition costs
|
2,500
(758
|
)
|
9,224
—
|
||||
|
Capital
expenditures and other, net
|
(1,925
|
)
|
(467
|
)
|
|||
|
Net
cash provided by (used in) investing activities
|
6,090
|
(55,451
|
)
|
||||
|
Financing
activities
|
|||||||
|
Issuance
of common stock, net
|
—
|
486,903
|
|||||
|
Cash
paid to eligible policyholders under plan of conversion
|
—
|
(462,989
|
)
|
||||
|
Acquisition
of treasury stock
|
(796
|
)
|
—
|
||||
|
Dividend
paid to stockholders
|
(2,977
|
)
|
—
|
||||
|
Net
cash (used in) provided by financing activities
|
(3,773
|
)
|
23,914
|
||||
|
Net
increase (decrease) in cash and cash equivalents
|
28,402
|
(13,505
|
)
|
||||
|
Cash
and cash equivalents at the beginning of the year
|
149,703
|
79,984
|
|||||
|
Cash
and cash equivalents at the end of the year
|
$
|
178,105
|
$
|
66,479
|
|||
|
Cash
paid for income taxes
|
$
|
36,200
|
$
|
72,349
|
|||
|
Schedule
of non-cash transactions
|
|||||||
|
Stock
issued in exchange for membership interest
|
$
|
—
|
$
|
281,073
|
|||
Page
9 of 10
Employers
Holdings, Inc.
Calculation
of Combined Ratio before the Impact of the LPT Agreement
(In
thousands, except for percentages)
|
Three
Months Ended
|
|||||||
|
March
31,
|
|||||||
|
2008
|
2007
|
||||||
|
(unaudited)
|
|||||||
|
Net
Premiums Earned
|
$
|
75,896
|
$
|
89,792
|
|||
|
Losses
and Loss Adjustment Expenses (LAE)
|
$
|
30,614
|
$
|
41,667
|
|||
|
Losses
& LAE Ratio
|
40.3
|
%
|
46.4
|
%
|
|||
|
Amortization
of deferred reinsurance gain - LPT
|
$
|
4,792
|
$
|
4,587
|
|||
|
Impacts
of LPT
|
6.3
|
%
|
5.1
|
%
|
|||
|
Losses
& LAE before impact of LPT
|
$
|
35,406
|
$
|
46,254
|
|||
|
Losses
& LAE Ratio before impact of LPT
|
46.7
|
%
|
51.5
|
%
|
|||
|
Commission
Expense
|
$
|
10,623
|
$
|
11,721
|
|||
|
Commission
Expense Ratio
|
14.0
|
%
|
13.1
|
%
|
|||
|
Underwriting
& Other Operating Expense
|
$
|
21,726
|
$
|
23,300
|
|||
|
Underwriting
& Other Operating Expense Ratio
|
28.6
|
%
|
25.9
|
%
|
|||
|
Total
Expense
|
$
|
62,963
|
$
|
76,688
|
|||
|
Combined
Ratio
|
83.0
|
%
|
85.4
|
%
|
|||
|
Total
Expense before impact of the LPT
|
$
|
67,755
|
$
|
81,275
|
|||
|
Combined
Ratio before the impact of the LPT
|
89.3
|
%
|
90.5
|
%
|
|||
Page 10 of
10