SEC Filing | Employers Holdings, Inc.

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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): November 29, 2007

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.)

9790 Gateway Drive Reno, Nevada 89521 (Address of Principal Executive Offices)		89521 (Zip Code)

(888) 682-6671
(Registrant’s telephone number including area code)

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 7 – Regulation FD

Item 7.01. Regulation FD Disclosure

In connection with meetings by senior management of Employers Holdings, Inc. (the “Company”) with certain analysts, the Company is disclosing certain information (the “Disclosed Information”).

Statements made in the Disclosed Information which are not historical are forward-looking statements that reflect management’s current views with respect to future events and performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical fact. Such statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. See “Forward-looking Statements” in the Disclosed Information.

A copy of the Disclosed Information is attached to this report as Exhibit 99.1.

Section 9 – Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

99.1	Presentation Materials

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 and, Chief Legal Officer and General Counsel
Dated: November 29, 2007

Exhibit Index

Exhibit No.		Exhibit
99.1		Presentation Materials

Management Presentation

November, 2007

Safe Harbor Disclosure

This slide presentation is for informational purposes only. It should be read in conjunction with our Form 10-K for the year 2006, our Form
10-Q for the second and third quarters of 2007 and our Form 8-Ks filed with the Securities and Exchange Commission (SEC), all of which
are available on the “Investor Relations” section of our website at www.employers.com.

Non-GAAP Financial Measures

In presenting Employers Holdings, Inc.’s (EMPLOYERS) results, management has included and discussed certain non-GAAP financial
measures, as defined in Regulation G.  Management believes these non-GAAP measures better explain EMPLOYERS results allowing for a
more complete understanding of underlying trends in our business.  These measures should not be viewed as a substitute for those
determined in accordance with GAAP.  The reconciliation of these measures to their most comparable GAAP financial measures is included
in this presentation or in our Form 10-K for the year 2006, our Form 10-Q for the second quarter 2007 and our Form 8-Ks filed with the
Securities and Exchange Commission (SEC) and available in the “Investor Relations” section of our website at www.employers.com.

Forward-looking Statements

This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements regarding anticipated future results and can be identified by the fact that they do not relate
strictly to historical or current facts. They often include words like “believe”, “expect”, “anticipate”, “estimate” and “intend” or future or
conditional verbs such as “will”, “would”, “should”, “could” or “may”. Certain factors that could cause actual results to differ materially from
expected results include increased competitive pressures, changes in the interest rate environment, general economic conditions, and
legislative and regulatory changes that could adversely affect the business of EMPLOYERS and its subsidiaries. All subsequent written and
oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by these
cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.

Copyright © 2007 EMPLOYERS. All rights reserved. EMPLOYERS and America’s small business insurance specialists are
registered trademarks of Employers Insurance Company of Nevada. Workers’ compensation insurance and services are offered
through Employers Compensation Insurance Company and Employers Insurance Company of Nevada.

Contents Page

California Rates and Rate Setting

Customer Selection

Insurance Operations Summary

Workers’ Compensation Industry

Policy Count

Strategic Distribution Partners

Focused Marketing and Distribution

Focus on Low to Medium Hazard Groups

Disciplined Underwriting – Five Basic Elements

Insurance Operations

Seasoned Executives with Extensive Experience

Expanding Geographic Footprint

Strategies

Financial Snapshot

Key Strengths

Overview

Corporate Overview

30-31

Summary

Capital Management

Selected Operating Results

SUMMARY

Investment Portfolio

Reinsurance Program

Underwriting Profitability

Earnings and EPS

Loss Portfolio Transfer

Four Key Elements of our Financial Strength

Financial Results

Corporate Overview

Overview

Business

Specialty provider of workers’ compensation insurance

18^th largest private writer in the U.S. ⁽¹⁾

8^th largest private writer in California ⁽¹⁾

2^nd largest writer in Nevada ⁽¹⁾

Geographic

Focused in western U.S. – direct premiums written as of the third quarter of 2007

71% in California

19% in Nevada

10% in nine other states

Customers

Small businesses in low to medium hazard industries

Distribution through independent agents and strategic partners

33,027 policies in force at 9/30/2007

Average annual policy premium of approximately $11,000

(1) Based on “One-Year Premium and Loss Study,” U.S., California and Nevada, A.M. Best Company, 2006

Key Strengths

Established enterprise with 94 year operating history

Focused operations and disciplined underwriting – target an attractive
and underserved market segment with growth opportunities

Unique and long-standing strategic distribution relationships

Financial strength and flexibility - strong balance sheet and conservative
reserving

Experienced management team with deep knowledge of workers’
compensation

440

187

298

418

387

100

200

300

400

500

2002

2003

2004

2005

2006

Qtrs. 1-3,

2007

Financial Snapshot

673

655

682

339

431

531

640

224

200

400

600

800

2002

2003

2004

2005

2006

3/31/07

6/30/07

9/30/07

152

100

150

200

2002

2003

2004

2005

2006

Qtrs. 1-3,

2007

Net Premium Written

351

747

607

516

424

790

795

771

200

400

600

800

2002

2003

2004

2005

2006

3/31/07

6/30/07

9/30/07

Net Income Before Loss Portfolio Transfer (LPT)

Equity Incl. Deferred Gain - LPT

Statutory Surplus

($ million)

Premium growth has declined due to California rate
decreases

Strong growth provides a solid basis for underwriting

Loss trends and investments are driving net income

Capital management plans include dividends and share
repurchases

Strategies

Focus on
Profitability

Target attractive, underserved small business market

Maintain disciplined risk selection, underwriting and
pricing

Pursue
Organic
Growth
Opportunities

Expand in current markets and in our new states

Leverage infrastructure, technology and systems

Utilize existing and new strategic distribution partners

Optimize
Capital
Structure

Invest in operations and manage capital prudently

Return capital to shareholders

Consider opportunistic strategic transactions

70.5%

1.9%

1.3%

2.3%

3.5%

19.2%

California

Nevada

Colorado

Utah

Idaho

Montana

New States

Expanding Geographic Footprint

2000

2002

2006

2007

NEW STATES

Florida, Oregon,
Texas, Arizona
and Illinois = 1.3%

Direct Premiums Written (%) for nine months ended 9/30/07

Seasoned Executives with Extensive Experience

EVP, Chief Financial Officer

William E. Yocke

SVP, Chief Underwriting Officer

Jeff J. Gans

SVP, Chief Claims Officer

Stephen V. Festa

SVP, President of Western Region

George Tway

SVP, President of Strategic Markets Region

David M. Quezada

SVP, President of Pacific Region

T. Hale Johnston

President and Chief Operating Officer

Martin J. Welch

Chief Executive Officer

Douglas D. Dirks

Experience
(Years)

Title

Name

Average experience of senior operating leadership = 24 years

Insurance Operations

Disciplined Underwriting

37.9% statutory loss and LAE ratio in 2006

Risk Selection
Expertise

Strong
Underwriting
Culture

Focused
Guidelines and
Consistent
Automated
Approach

Disciplined
Underwriting

Local Knowledge

Pricing of
Individual Risks

Five Basic Elements

12%

20%

19%

14%

26%

13%

10%

11%

23%

35%

Focus on Low to Medium Hazard Groups

EMPLOYERS

Focus on low to medium hazard risks allows us to optimize risk selection and pricing adequacy

Hazard Group A

Industry ⁽¹⁾

% of Premiums Written, 12/31/06

Hazard Group B

Hazard Group C

Hazard Group D

Hazard Group E

Hazard Group F

Hazard Group G

Hazard Groups A through D

Lower
Risk

Higher
Risk

(1) NCCI 2006 Premium Distribution by Hazard Group (as presented at 2007 Annual Issues Symposium).

Industry = 56%

EMPLOYERS = 82%

Customer Selection

35.1%

$136,883

Top 10

1.7

6,458

Automobile

2.0

7,939

Dentists & Dental Surgeons & Clerical

2.3

9,040

Clothing Manufacturers

2.4

9,455

Machine Shops

2.5

9,846

Clerical Office Employees

2.9

11,189

Store: Retail

3.0

11,590

College: Professional Employees & Clerical

4.8

18,854

Store: Wholesale

6.4

24,858

Physicians & Clerical

7.1%

$ 27,654

Restaurants

Percent of
Total

Direct Premiums

Written (000s)

Class

Hazard
Group

EMPLOYERS further differentiates risks within industry-defined customer classes

Top Ten Classes in 2006

Focused Marketing and Distribution

Independent Agents and Brokers

PACIFIC REGION

California

In 2006, 44% of direct
premiums written

STRATEGIC REGION

Largely ADP & Wellpoint;
added E-CHX in Qtr 4, 2006

Primarily California today

Intego Insurance Services, LLC,
in Qtr. 3, 2007

In 2006, 30% of direct premiums
written

Three business units target customer segments with a focused underwriting approach

WESTERN REGION

Nevada, Colorado, Utah,
Montana, Idaho, Texas,
Arizona, Illinois, Oregon,
Florida

In 2006, 26% of direct
premiums written

Strategic Distribution Partners

Strategic Distribution Partners

Largest payroll services company in the
U.S. with over 450,000 clients

Partner since entering California market
in 2002

Business originated by ADP’s field sales
staff and insurance agency

“Pay-by-Pay” premium collection

Strategic partners expand market reach and produce business with high persistency

Largest group health carrier in California

Partner since entering California market
in 2002

Business originated by Wellpoint’s health
insurance agents

Single bill to customers

23,657

24,967

26,005

27,686

29,742

30,922

31,902

33,027

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2002

2003

2004

2005

2006

3/31/07

6/30/07

9/30/07

Solid in force policy count growth
continued in the third quarter, 2007

33,027 at 9/30/07

29,311 at 9/30/06

Total increase of 3,716 or
12.7%

In Force Policy Count

Total in force policy count has grown consistently with a 2002 – 2006 CAGR of 6%

25%

50%

75%

100%

125%

150%

'96

'97

'98

'99

'00

'01

'02

'03

'04

'05

Workers’ Compensation Industry

Historical Pure Loss Ratio

California

Total U.S.

Source: WCIRB as of 09/30/06 (California); Insurance Information Institute as of 12/31/05 (Total U.S.)

2002: EMPLOYERS
entry into California

California Rates and Rate Setting

- 14.2%

July 1, 2007

- 9.5%

January 1, 2007

-65.1%

Cumulative Change

-16.4%

July 1, 2006

-15.3%

January 1, 2006

-18.0%

July 1, 2005

- 2.2%

January 1, 2005

- 7.0%

July 1, 2004

-14.9%

January 1, 2004

Workers’ Compensation Insurance Rating Bureau (WCIRB)
recommended increase of 5.2% in October, 2007

Company’s choice to implement rate changes

Internal analyses are compared to Bureau’s view of the
industry to confirm actual experience

Filed loss cost multipliers (LCMs) account for loss
adjustment, underwriting and commission expenses and
targeted unlevered return of 12% to 13%

Rate deviation plans modify full premium rates based on
individual or group risk characteristics to yield “effective
rates”

EMPLOYERS filed a 4.5% decrease in premium for California
policies incepting on or after September 15, 2007

Rate filing accepted August, 2007

Awaiting Commissioner Ordered Advisory Pure Premium
Change for rates on January 1, 2008

Recent Commissioner Ordered
Advisory Pure Premium Changes

High performing insurance operation, built upon four key
elements

A highly focused customer base

A disciplined underwriting culture

An efficient – and scalable – infrastructure

Strong producer and strategic partner relationships, providing us
with:

broader access to markets

enhanced value delivery to our customers

more cost-effective production

Insurance Operations Summary

Financial Results

Four Key Elements of Our Financial Strength

Surplus of
$673MM

at 9/30/2007

Conservative
Reserving

High Quality
Investment
Portfolio

Catastrophe
Reinsurance
Program

0.5:1 NPW / Surplus
(Trailing 12 months NPW
at 9/30/07)

Approximately 90% fixed
maturity with average
rating AA

Coverage up to
$200MM loss

Track record of
reserve strength

Loss Portfolio Transfer (LPT)

$ millions

$602.5

Gain at 9/30/2007

(147.5)

Subsequent Reserve Adjustments

750

Gain at 1/1/2000

$ 775

Consideration

$1,525

Original Reserves Transferred

$2,000

Total Coverage

Contract

$ millions

$429.3

GAAP: Deferred Reinsurance
Gain – LPT Agreement

(173.2)

Cumulative Amortization To Date

$602.5

Statutory Surplus Created

Accounting at 9/30/07

Non-recurring transaction with no ongoing cash benefits or charges to current operations

Retroactive 100% quota share reinsurance coverage for all losses occurring prior to 7/1/95

Gain on transaction booked as statutory surplus; deferred and amortized under GAAP

Selected Operating Results

Premiums are

declining due to

California rate

decreases

Loss trends and

investments are

driving net income

771.1

795.5

790.4

746.8

607.0

Equity including LPT deferred gain

341.8

361.6

352.0

303.8

144.6

Shareholders’ equity

2,282.5

2,294.3

2,307.2

2,307.8

2,350.0

Reserves for loss & LAE

3,169.3

3,221.2

3,195.7

3,094.2

Total assets

93.2

149.3

66.5

80.0

61.1

Cash and cash equivalents

1,730.9

1,695.2

1,768.6

1,715.7

1,595.8

Total investments

Balance Sheet Data

74.8

25.3

26.2

23.3

152.2

93.8

Net Income Before LPT

88.5

29.9

30.8

27.9

171.6

137.6

Net Income

59.4

19.2

19.3

20.8

68.2

54.4

Net Investment Income

262.4

88.5

84.1

89.8

393.0

438.3

Net Premiums Earned

262.0

87.3

81.5

93.2

387.2

439.7

Net Premiums Written

$ 271.3

$ 90.3

$ 84.6

$ 96.5

$ 401.8

$ 458.7

Gross Premiums Written

Income Statement Data

YTD
2007

Q3
2007

Q2
2007

Q1
2007

12/31/06

12/31/05

$ Million

Portfolio re-allocation (equity

sales) in Q4 of 2006 reduced

volatility

While premiums have

declined in California, losses

have also declined

Earnings and EPS

$ 1.43

$ .49

$ .45

$ 3.04

$ 1.88

EPS Before Impacts of the LPT,
pro forma

.26

.09

.08

.39

.87

EPS attributable to LPT

$ 1.69

.58

.53

$3.43

$2.75

GAAP EPS for the period

$ 1.55

---

.40

EPS for Feb. 5 through the period
(required reporting due to conversion)

$ 74.8

$ 25.3

$ 26.2

$ 23.3

$ 152.2

$ 93.8

Net Income Before LPT

(13.7)

(4.6)

(19.4)

(43.8)

Less: LPT Deferred Gain Amortization

$88.5

$29.9

$30.8

$27.9

$171.6

$ 137.6

GAAP Net Income

YTD
2007

Q3
2007

Q2
2007

Q1
2007

12/31/06

12/31/05

$ Million

(except per share data)

(1) Pro Forma EPS for 2005 and 2006 assumes 50,000,002 shares outstanding before the conversion.

(2) Pro forma basic and diluted EPS computed using the weighted average shares outstanding during the period after the Company’s IPO and assumes the

50,000,002 shares outstanding prior to the IPO. Equity instruments have been excluded in computing the diluted earnings per share because their

inclusion would be anti-dilutive.

(3) Basic and Diluted EPS computed using the actual weighted shares outstanding during the period.

(4) Basic EPS and Diluted EPS round to the same amount for the period.

(2)

(3)

(4)

(2,4)

(1)

(1)

(1)

(2)

(2)

(3)

(3)

(4)

(4)

(2,4)

(2,4)

Underwriting Profitability

(1)

Excluding $43.4 million of favorable development in the first nine months of 2007, our loss ratio before the LPT would have been 64.2% and our combined ratio
would have been 103.7%. We target a combined ratio of 100.

(2)

Total deferred gain amortization and LPT reserve adjustment of $43.8 million in 2005, $19.4 million in 2006, $4.6 million in the first, second and third quarters of
2007.

(3)

Our higher expense ratio is largely a function of falling California rates.

Excluding reserve
development for 9
months, 2007 (1)

YTD
2007

12/31/06

12/31/05

COMBINED RATIO

$43.4

$107.1

$78.1

Favorable Reserve Development ($ million)

103.7%

87.1%

72.6%

84.9%

Combined Ratio (excl. LPT)

25.8%

22.3%

16.0%

Underwriting & Other Expense Ratio ⁽³⁾

13.6%

12.3%

10.7%

Commission Expense Ratio ⁽³⁾

64.2%

47.6%

37.9%

58.3%

Loss & LAE Ratio (excl. LPT)

5.2%

4.9%

10.0%

Less: Impact of LPT ⁽²⁾

59.0%

42.4%

33.0%

48.3%

Loss & LAE Ratio