Employers Holdings, Inc. Reports First Quarter 2025 Results and Declares Increase in Regular Quarterly Dividend to $0.32 per Share and New Share Repurchase Authorization of $125 Million

Company to Host Conference Call on Friday, May 2, 2025, at 11:00 a.m. Eastern Daylight Time

/EIN News/ -- RENO, Nev., May 01, 2025 (GLOBE NEWSWIRE) -- Employers Holdings, Inc. (the “Company”) (NYSE:EIG), a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services focused on small and mid-sized businesses engaged in low-to-medium hazard industries, today reported financial results for its first quarter ended March 31, 2025.

Financial Highlights:
(All comparisons vs. the first quarter of 2024).

• Net income per diluted share decreased by 53%, from $1.11 to $0.52;
• Adjusted net income per diluted share increased 30%, from $0.67 to $0.87;
• Gross premiums written increased 1%, from $210.9 million to $212.1 million;
• Net premiums earned decreased 1%, from $184.9 million to $183.0 million;
• Underwriting expense ratio improved from 25.0% to 23.4%;
• Net investment income increased 20%, from $26.8 million to $32.1 million;
• Record number of ending policies in-force of 133,121, a 4% increase; and
• Returned $27.5 million to stockholders through a combination of share repurchases and regular quarterly dividends.

Management Commentary

Chief Executive Officer Katherine Antonello commented: “First quarter net premiums earned were flat compared to 2024, driven by higher renewal premiums offset by lower new business and a reduction in audit premiums. Rate increases and underwriting actions taken to maintain our underwriting profitability targets in certain states impacted new business premiums, while final audit premiums decreased in-line with the moderation of employment and wage growth. We have identified several refinements in our underwriting and pricing approach that we believe will allow us to maintain our underwriting discipline but also return to moderate new business growth. Our appetite expansion effort continues to identify areas of profitable growth, and our success has given us the confidence to accelerate this effort. We again ended the period with another record number of policies in-force, which were up 4% year-over-year.

We recorded our current accident year loss and LAE ratio on voluntary business at 66.0%, slightly above the 64.0% we maintained throughout 2024. As was the case in the first quarter of 2024, a full actuarial study was not performed, and the amount of indicated net prior year loss reserve development was consistent with our expectations. We will evaluate our prior year reserves in more detail at mid-year when we routinely perform a full reserve study.

Our commission expense ratio was 12.6%, versus 13.6% a year ago. We continue to see improvement in our underwriting expense ratio, which decreased to 23.4%, from 25.0% a year ago.

Our net investment income was $32.1 million, up 20% from a year ago. The increase was primarily due to returns from our investments in limited partnerships.

Lastly, we raised our regular quarterly dividend to $0.32 per share, an increase of 7%, and announced a new $125.0 million share repurchase plan after exhausting the former plan prior to its scheduled expiration. These actions reflect our strong balance sheet, abundant underwriting capital, and the confidence in the Company’s future operations.”

Summary of First Quarter 2025 Results

(All comparisons vs. the first quarter of 2024, unless otherwise noted).

Gross premiums written were $212.1 million, an increase of 1%. The increase was due to strong retention in renewal business writings partially offset by a decline in new business writings and lower final audit premiums. Net premiums earned were $183.0 million, a decrease of 1%.

Losses and loss adjustment expenses were $120.7 million, an increase of 4%. The increase was primarily due to a higher current accident year loss and loss adjustment expense estimate. The Company’s loss and loss adjustment expense ratio was 66.0% (66.8% excluding LPT), versus 63.0% (64.1% excluding LPT).

Commission expense was $23.0 million, a decrease of 8%. The Company’s commission expense ratio was 12.6%, versus 13.6% a year ago. The decrease was primarily due to a release of commissions payable associated with non-performing policies sent to collections.

Underwriting expenses were $42.9 million, a decrease of 7%. The Company’s underwriting expense ratio was 23.4%, versus 25.0% a year ago. The decrease primarily related to lower bad debt expense and compensation-related expenses.

Net investment income was $32.1 million, an increase of 20%. The increase was primarily due to returns from our investments in private equity limited partnerships, along with higher book yields on our fixed maturity securities.

Net realized and unrealized (losses) gains on investments reflected on the income statement were $(12.8) million, versus $11.4 million.

Income tax expense was $3.1 million (19.5% effective rate), versus $7.0 million (19.8% effective rate). The effective rates during each of the periods included income tax benefits and exclusions associated with tax-advantaged investment income, LPT adjustments, deferred gain amortization and related adjustments, and tax credits utilized.

The Company’s book value per share including the deferred gain of $48.25 increased 12.3% year-over-year and 2.5% during the first quarter of 2025, computed after considering dividends declared. During the first quarter this measure was favorably impacted by $21.1 million of after-tax unrealized gains arising from fixed maturity securities (which are reflected on the balance sheet) partially offset by $9.2 million of net after tax unrealized losses arising from equity securities and other investments (which are reflected on the income statement). The Company’s adjusted book value per share of $50.75 increased by 8.5% year-over-year and 1.0% during the first quarter of 2025, computed after considering dividends declared.

Second Quarter 2025 Dividend Declaration

On April 30, 2025, the Company’s Board of Directors declared an increase in our regular quarterly dividend to $0.32. The dividend is payable on May 28, 2025 to stockholders of record as of May 14, 2025.

Stock Repurchases and New Stock Repurchase Authorization

During the first quarter of 2025, the Company repurchased 406,101 shares of its common stock at an average price of $49.69 per share. During the period from April 1, 2025 through April 29, 2025, the Company repurchased a further 170,000 shares of its common stock at an average price of $48.35 per share.

On April 30, 2025, the Company’s Board of Directors authorized a new stock repurchase program to allow for repurchases of up to $125.0 million of our common stock from May 6, 2025 through December 31, 2026. The new program replaces a similar program that was scheduled to expire on July 31, 2025, but its repurchase authorization has been exhausted.

Earnings Conference Call and Webcast

The Company will host a conference call on Friday, May 2, 2025 at 11:00 a.m. Eastern Daylight Time / 8:00 a.m. Pacific Daylight Time.

To participate in the live conference call, you must first register here. Once registered you will receive dial-in numbers and a unique PIN number.

The webcast will be accessible on the Company’s website at www.employers.com through the “Investors” link.

Reconciliation of Non-GAAP Financial Measures to GAAP

The information in this press release should be read in conjunction with the Financial Supplement that is attached to this press release and available on our website.

Within this earnings release we present various financial measures, some of which are “non-GAAP financial measures” as defined in Regulation G pursuant to Section 401 of the Sarbanes - Oxley Act of 2002. A description of these non-GAAP financial measures, as well as a reconciliation of such non-GAAP measures to our most directly comparable GAAP financial measures is included in the attached Financial Supplement. Management believes that these non-GAAP measures are important to the Company's investors, analysts and other interested parties who benefit from having an objective and consistent basis for comparison with other companies within our industry. Management further believes that these measures are more relevant than comparable GAAP measures in evaluating our financial performance.

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 of, among other things, the Company's future performance, economic or market conditions, including current or future levels of inflation, potential implications of increased tariffs, changes in interest rates, labor market expectations, catastrophic events or geo-political conditions, legislative or regulatory actions or court decisions, business growth, retention rates, loss costs, claim trends and the impact of key business initiatives, future technologies and planned investments. 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. The Company and its management caution investors that such forward-looking statements are not guarantees of future performance. Risks and uncertainties are inherent in the Company’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 the Company’s public filings with the Securities and Exchange Commission (SEC), including the risks detailed in the Company's Quarterly Reports on Form 10-Q and the Company's Annual Reports on Form 10-K. Except as required by applicable securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Filings with the SEC

The Company’s filings with the SEC and its quarterly investor presentations can be accessed through the “Investors” link on the Company's website, www.employers.com. The Company's filings with the SEC can also be accessed through the SEC's EDGAR Database at www.sec.gov (EDGAR CIK No. 0001379041).

About Employers Holdings, Inc.

Employers Holdings, Inc. (NYSE: EIG), is a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services (collectively “EMPLOYERS®”) focused on small and mid-sized businesses engaged in low-to-medium hazard industries. EMPLOYERS leverages over a century of experience to deliver comprehensive coverage solutions that meet the unique needs of its customers. Drawing from its long history and extensive knowledge, EMPLOYERS empowers businesses by protecting their most valuable asset – their employees – through exceptional claims management, loss control, and risk management services, creating safer work environments.

EMPLOYERS is also proud to offer Cerity®, which is focused on providing digital-first, direct-to-consumer workers’ compensation insurance solutions with fast, and affordable coverage options through a user-friendly online platform.

EMPLOYERS operates throughout the United States, apart from four states that are served exclusively by their state funds. Insurance is offered through Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, Employers Assurance Company and Cerity Insurance Company, all rated A (Excellent) by AM Best. Not all companies do business in all jurisdictions. EIG Services, Inc., and Cerity Services, Inc., are subsidiaries of Employers Holdings, Inc. EMPLOYERS® is a registered trademark of EIG Services, Inc., and Cerity® is a registered trademark of Cerity Services, Inc. For more information, please visit www.employers.com and www.cerity.com.

Contact Information

Michael Pedraja (775) 327-2706 or mpedraja@employers.com

EMPLOYERS HOLDINGS, INC. Table of Contents
Page
1		Consolidated Financial Highlights
2		Summary Consolidated Balance Sheets
3		Summary Consolidated Income Statements
4		Return on Equity
5		Combined Ratios
6		Roll-forward of Unpaid Losses and LAE
7		Consolidated Investment Portfolio
8		Book Value Per Share
9		Earnings Per Share
10		Non-GAAP Financial Measures

EMPLOYERS HOLDINGS, INC. Consolidated Financial Highlights (unaudited) $ in millions, except per share amounts
	Three Months Ended
	March 31,
		2025				2024			% change
Selected financial highlights:
Gross premiums written	$	212.1			$	210.9			1	%
Net premiums written		210.3				209.1			1
Net premiums earned		183.0				184.9			(1	)
Net investment income		32.1				26.8			20
Net income excluding LPT(1)		11.2				26.2			(57	)
Adjusted net income(1)		21.3				17.2			24
Net Income before income taxes		15.9				35.3			(55	)
Net Income		12.8				28.3			(55	)
Comprehensive income		34.6				17.4			99
Total assets		3,556.9				3,562.8			—
Stockholders' equity		1,075.7				1,018.9			6
Stockholders' equity including the Deferred Gain(2)		1,168.1				1,116.1			5
Adjusted stockholders' equity(2)		1,228.8				1,213.0			1
Annualized adjusted return on stockholders' equity(3)		6.9	%			5.7	%		21	%
Amounts per share:
Cash dividends declared per share	$	0.30			$	0.28			7	%
Earnings per diluted share(4)		0.52				1.11			(53	)
Earnings per diluted share excluding LPT(4)		0.46				1.03			(55	)
Adjusted earnings per diluted share(4)		0.87				0.67			30
Book value per share(2)		44.43				40.20			11
Book value per share including the Deferred Gain(2)		48.25				44.04			10
Adjusted book value per share(2)		50.75				47.86			6
Combined ratio excluding LPT:(5):
Loss and loss adjustment expense ratio:
Current Year		66.1	%			64.2	%
Prior Year		0.7				(0.1	)
Loss and loss adjustment expense ratio		66.8	%			64.1	%
Commission expense ratio		12.6	%			13.6	%
Underwriting expense ratio		23.4	%			25.0	%
Combined ratio excluding LPT		102.8	%			102.7	%

(1)	See Page 3 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.
(2)	See Page 8 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.
(3)	See Page 4 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.
(4)	See Page 9 for description and calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.
(5)	See Pages 5 for details and Page 10 for information regarding our use of Non-GAAP Financial Measures.

EMPLOYERS HOLDINGS, INC. Summary Consolidated Balance Sheets (unaudited) $ in millions, except per share amounts
		March 31, 2025				December 31, 2024
ASSETS
Investments, cash and cash equivalents		$	2,537.6			$	2,532.4
Accrued investment income			14.6				15.7
Premiums receivable, net			377.0				361.3
Reinsurance recoverable, net of allowance, on paid and unpaid losses and LAE			412.9				417.8
Deferred policy acquisition costs			63.8				59.6
Deferred income tax asset, net			35.0				38.3
Other assets			116.0				116.2
Total assets		$	3,556.9			$	3,541.3
LIABILITIES
Unpaid losses and LAE		$	1,792.6			$	1,808.2
Unearned premiums			428.0				402.2
Commissions and premium taxes payable			60.3				65.8
Deferred Gain			92.4				94.0
Other liabilities			107.9				102.4
Total liabilities		$	2,481.2			$	2,472.6
STOCKHOLDERS' EQUITY
Common stock and additional paid-in capital		$	424.7			$	424.8
Retained earnings			1,478.5				1,472.9
Accumulated other comprehensive loss			(60.7	)			(82.5	)
Treasury stock, at cost			(766.8	)			(746.5	)
Total stockholders’ equity			1,075.7				1,068.7
Total liabilities and stockholders’ equity		$	3,556.9			$	3,541.3
Stockholders' equity including the Deferred Gain (1)		$	1,168.1			$	1,162.7
Adjusted stockholders' equity (1)			1,228.8				1,245.2
Book value per share (1)		$	44.43			$	43.52
Book value per share including the Deferred Gain(1)			48.25				47.35
Adjusted book value per share (1)			50.75				50.71

(1)	See Page 8 for calculations and Page 10 for information regarding our use of Non-GAAP Financial Measures.

EMPLOYERS HOLDINGS, INC. Summary Consolidated Income Statements (unaudited) $ in millions
	Three Months Ended
	March 31,
		2025				2024
Revenues:
Net premiums earned	$	183.0			$	184.9
Net investment income		32.1				26.8
Net realized and unrealized (losses) gains on investments(1)		(12.8	)			11.4
Other income		0.3				—
Total revenues		202.6				223.1
Expenses:
Losses and LAE incurred		(120.7	)			(116.5	)
Commission expense		(23.0	)			(25.1	)
Underwriting expenses		(42.9	)			(46.2	)
Interest and financing expenses		(0.1	)			—
Total expenses		(186.7	)			(187.8	)
Net income before income taxes		15.9				35.3
Income tax expense		(3.1	)			(7.0	)
Net Income		12.8				28.3
Unrealized AFS investment gains (losses) arising during the period, net of tax(2)		21.1				(11.6	)
Reclassification adjustment for net realized AFS investment losses in net income, net of tax(2)		0.7				0.7
Total comprehensive income	$	34.6			$	17.4
Net Income	$	12.8			$	28.3
Amortization of the Deferred Gain - losses		(1.6	)			(1.5	)
Amortization of the Deferred Gain - contingent commission		—				(0.4	)
LPT contingent commission adjustments		—				(0.2	)
Net income excluding LPT Agreement (3)		11.2				26.2
Net realized and unrealized losses (gains) on investments		12.8				(11.4	)
Income tax (benefit) expense related to items excluded from Net income		(2.7	)			2.4
Adjusted net income	$	21.3			$	17.2

(1)	Includes unrealized (losses) gains on equity securities and other investments of $(11.7) million and $12.7 million for the three months ended March 31, 2025 and 2024, respectively.
(2)	AFS = Available for Sale securities.
(3)	See Page 10 regarding our use of Non-GAAP Financial Measures.

EMPLOYERS HOLDINGS, INC. Return on Equity (unaudited) $ in millions
		Three Months Ended
		March 31,
			2025				2024
Net income	A	$	12.8			$	28.3
Impact of the LPT Agreement			(1.6	)			(2.1	)
Net realized and unrealized losses (gains) on investments			12.8				(11.4	)
Income tax (benefit) expense related to items excluded from Net income			(2.7	)			2.4
Adjusted net income (1)	B		21.3				17.2
Stockholders' equity - end of period		$	1,075.7			$	1,018.9
Stockholders' equity - beginning of period			1,068.7				1,013.9
Average stockholders' equity	C		1,072.2				1,016.4
Stockholders' equity - end of period		$	1,075.7			$	1,018.9
Deferred Gain - end of period			92.4				97.2
Accumulated other comprehensive loss - end of period			76.8				122.6
Income taxes related to accumulated other comprehensive loss - end of period			(16.1	)			(25.7	)
Adjusted stockholders' equity - end of period			1,228.8				1,213.0
Adjusted stockholders' equity - beginning of period			1,245.2				1,199.1
Average adjusted stockholders' equity (1)	D		1,237.0				1,206.1
Return on stockholders' equity	A / C		1.2	%			2.8	%
Annualized return on stockholders' equity			4.8				11.1
Adjusted return on stockholders' equity (1)	B / D		1.7	%			1.4	%
Annualized adjusted return on stockholders' equity (1)			6.9				5.7

(1)	See Page 10 for information regarding our use of Non-GAAP Financial Measures.

EMPLOYERS HOLDINGS, INC. Combined Ratios (unaudited) $ in millions, except per share amounts
		Three Months Ended
		March 31,
			2025				2024
Net premiums earned	A	$	183.0			$	184.9
Losses and LAE incurred	B		120.7				116.5
Amortization of deferred reinsurance gain - losses			1.6				1.5
Amortization of deferred reinsurance gain - contingent commission			—				0.4
LPT contingent commission adjustments			—				0.2
Losses and LAE excluding LPT(1)	C		122.3				118.6
Prior year loss reserve development			1.3				(0.1	)
Losses and LAE excluding LPT - current accident year	D	$	121.0			$	118.7
Commission expense	E	$	23.0			$	25.1
Underwriting expenses	F	$	42.9			$	46.2
GAAP combined ratio:
Loss and LAE ratio	B/A		66.0	%			63.0	%
Commission expense ratio	E/A		12.6				13.6
Underwriting expense ratio	F/A		23.4				25.0
GAAP combined ratio			102.0	%			101.6	%
Combined ratio excluding LPT:(1)
Loss and LAE ratio excluding LPT	C/A		66.8	%			64.1	%
Commission expense ratio	E/A		12.6				13.6
Underwriting expense ratio	F/A		23.4				25.0
Combined ratio excluding LPT			102.8	%			102.7	%
Combined ratio excluding LPT: current accident year:(1)
Loss and LAE ratio excluding LPT	D/A		66.1	%			64.2	%
Commission expense ratio	E/A		12.6				13.6
Underwriting expense ratio	F/A		23.4				25.0
Combined ratio excluding LPT: current accident year			102.1	%			102.8	%

(1)	See Page 10 for information regarding our use of Non-GAAP Financial Measures.

EMPLOYERS HOLDINGS, INC. Roll-forward of Unpaid Losses and LAE (unaudited) $ in millions
	Three Months Ended
	March 31,
		2025			2024
Unpaid losses and LAE at beginning of period	$	1,808.2		$	1,884.5
Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE		412.4			428.4
Net unpaid losses and LAE at beginning of period		1,395.8			1,456.1
Losses and LAE incurred:
Current year losses		121.0			118.7
Prior year losses		1.3			(0.1	)
Total losses incurred		122.3			118.6
Losses and LAE paid:
Current year losses		8.0			6.8
Prior year losses		124.6			117.4
Total paid losses		132.6			124.2
Net unpaid losses and LAE at end of period		1,385.5			1,450.5
Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE		407.1			424.0
Unpaid losses and LAE at end of period	$	1,792.6		$	1,874.5

Total losses and LAE shown in the above table exclude amortization of the Deferred Gain and LPT contingent commission adjustments, which totaled $1.6 million and $2.1 million for the three months ended March 31, 2025 and 2024, respectively.

EMPLOYERS HOLDINGS, INC. Consolidated Investment Portfolio (unaudited) $ in millions
		March 31, 2025													December 31, 2024
Investment Positions:		Cost or Amortized Cost (1)			Net Unrealized Gain (Loss)				Fair Value			%			Fair Value			%
Fixed maturity securities		$	2,165.7		$	(76.9	)		$	2,087.4		82	%		$	2,097.4		83	%
Equity securities			151.4			102.7				254.2		10				259.8		10
Short-term investments			—			—				—		—				0.1		—
Other invested assets			85.0			10.4				95.4		4				106.6		4
Cash and cash equivalents			100.4			—				100.4		4				68.3		3
Restricted cash and cash equivalents			0.2			—				0.2		—				0.2		—
Total investments and cash		$	2,502.7		$	36.2			$	2,537.6		100	%		$	2,532.4		100	%
Breakout of Fixed Maturity Securities:
U.S. Treasuries and agencies		$	68.0		$	(0.9	)		$	67.1		3	%		$	59.3		3	%
States and municipalities			161.3			(1.6	)			159.7		8				159.3		8
Corporate securities			821.8			(33.6	)			788.0		38				803.0		38
Mortgage-backed securities			727.1			(36.8	)			689.9		33				684.9		33
Asset-backed securities			212.3			—				212.3		10				214.0		10
Collateralized loan obligations			26.4			(0.2	)			26.2		1				35.3		2
Bank loans and other			148.8			(3.8	)			144.2		7				141.6		7
Total fixed maturity securities		$	2,165.7		$	(76.9	)		$	2,087.4		100	%		$	2,097.4		100	%

Weighted average book yield			4.5%				4.5%
Average credit quality (S&P)			A+				A+
Duration			4.3				4.5

(1)	Amortized cost excludes allowance for current expected credit losses of $1.4 million.

EMPLOYERS HOLDINGS, INC. Book Value Per Share (unaudited) $ in millions, except per share amounts
		March 31, 2025				December 31, 2024				March 31, 2024				December 31, 2023
Numerators:
Stockholders' equity	A	$	1,075.7			$	1,068.7			$	1,018.9			$	1,013.9
Plus: Deferred Gain			92.4				94.0				97.2				99.2
Stockholders' equity including the Deferred Gain (1)	B		1,168.1				1,162.7				1,116.1				1,113.1
Accumulated other comprehensive loss			76.8				104.5				122.6				108.9
Income taxes related to accumulated other comprehensive loss			(16.1	)			(22.0	)			(25.7	)			(22.9	)
Adjusted stockholders' equity (1)	C	$	1,228.8			$	1,245.2			$	1,213.0			$	1,199.1
Denominator (shares outstanding)	D		24,210,602				24,556,706				25,343,504				25,369,753
Book value per share (1)	A / D	$	44.43			$	43.52			$	40.20			$	39.96
Book value per share including the Deferred Gain(1)	B / D		48.25				47.35				44.04				43.88
Adjusted book value per share (1)	C / D		50.75				50.71				47.86				47.26
Year-over-year change in: (2)
Book value per share			13.5	%			11.9	%			14.5	%			18.1	%
Book value per share including the Deferred Gain			12.3				10.6				13.1				16.3
Adjusted book value per share			8.5				9.8				10.8				10.5

(1)	See Page 10 for information regarding our use of Non-GAAP Financial Measures.
(2)	Reflects the twelve month change in book value per share after taking into account dividends declared of $1.20, $1.18, $1.12 and $1.10 for the twelve month periods ended March 31, 2025, December 31, 2024, March 31, 2024 and December 31, 2023, respectively.

EMPLOYERS HOLDINGS, INC. Earnings Per Share (unaudited) $ in millions, except per share amounts
		Three Months Ended
		March 31,
			2025				2024
Numerators:
Net income	A	$	12.8			$	28.3
Impact of the LPT Agreement			(1.6	)			(2.1	)
Net income excluding LPT (1)	B		11.2				26.2
Net realized and unrealized losses (gains) on investments			12.8				(11.4	)
Income tax (benefit) expense related to items excluded from Net income			(2.7	)			2.4
Adjusted net income (1)	C	$	21.3			$	17.2
Denominators:
Average common shares outstanding (basic)	D		24,398,610				25,345,942
Average common shares outstanding (diluted)	E		24,606,572				25,535,971
Earnings per share:
Basic	A / D	$	0.52			$	1.12
Diluted	A / E		0.52				1.11
Earnings per share excluding LPT: (1)
Basic	B / D	$	0.46			$	1.03
Diluted	B / E		0.46				1.03
Adjusted earnings per share: (1)
Basic	C / D	$	0.87			$	0.68
Diluted	C / E		0.87				0.67

(1)	See Page 10 for information regarding our use of Non-GAAP Financial Measures.

Non-GAAP Financial Measures

Within this earnings release we present the following measures, each of which are "non-GAAP financial measures." A reconciliation of these measures to the Company's most directly comparable GAAP financial measures is included herein. Management believes that these non-GAAP measures are important to the Company's investors, analysts and other interested parties who benefit from having an objective and consistent basis for comparison with other companies within our industry. Management further believes that these measures are more relevant than comparable GAAP measures in evaluating our financial performance.

The LPT Agreement is a non-recurring transaction that no longer provides any ongoing cash benefits to the Company. Management believes that providing non-GAAP measures that exclude the effects of the LPT Agreement (amortization of deferred reinsurance gain, adjustments to LPT Agreement ceded reserves and adjustments to the contingent commission receivable) is useful in providing investors, analysts and other interested parties a meaningful understanding of the Company's ongoing underwriting performance.

Deferred reinsurance gain (Deferred Gain) reflects the unamortized gain from the LPT Agreement. This gain has been deferred and is being amortized using the recovery method, whereby the amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries, except for the contingent profit commission, which was amortized through June 30, 2024, the date of its final determination. Amortization is reflected in losses and LAE incurred.

Adjusted net income (see Page 3 for calculations) is net income excluding the effects of the LPT Agreement, and net realized and unrealized gains and losses on investments (net of tax), and any miscellaneous non-recurring transactions (net of tax). Management believes that providing this non-GAAP measures is helpful to investors, analysts and other interested parties in identifying trends in the Company's operating performance because such items have limited significance to its ongoing operations or can be impacted by both discretionary and other economic factors and may not represent operating trends.

Stockholders' equity including the Deferred Gain (see Page 8 for calculations) is stockholders' equity including the Deferred Gain. Management believes that providing this non-GAAP measure is useful in providing investors, analysts and other interested parties a meaningful measure of the Company's total underwriting capital.

Adjusted stockholders' equity (see Page 8 for calculations) is stockholders' equity including the Deferred Gain, less accumulated other comprehensive income (net of tax). Management believes that providing this non-GAAP measure is useful to investors, analysts and other interested parties since it serves as the denominator to the Company's adjusted return on stockholders' equity metric.

Return on stockholders' equity and Adjusted return on stockholders' equity (see Page 4 for calculations). Management believes that these profitability measures are widely used by our investors, analysts and other interested parties.

Book value per share, Book value per share including the Deferred Gain, and Adjusted book value per share (see Page 8 for calculations). Management believes that these valuation measures are widely used by our investors, analysts and other interested parties.

Net income excluding LPT (see Page 3 for calculations). Management believes that these performance and underwriting measures are widely used by our investors, analysts and other interested parties.