Employers Holdings, Inc.

What they do

Employers Holdings underwrites workers' compensation insurance through five AM Best 'A' rated insurance subsidiaries, operating in most U.S. states except North Dakota, Ohio, Washington, and Wyoming. The company targets small to mid-sized businesses in lower hazard industries, with a concentration in California (46-47% of gross written premiums). In February 2026, it launched an excess workers' compensation product for self-insured enterprises, writing its first policy in June 2026.

Revenue drivers

• Workers' compensation insurance premiums — Primary revenue source, generated from guaranteed cost policies for small and mid-sized businesses. Gross premiums written were $756.1 million in 2025, down 2.6% from 2024, reflecting deliberate pricing actions.
• Net investment income — Investment earnings from float on premiums and reserves. Net investment income increased 9.1% in 2025, with a book yield of 4.9% as of Q2 2026, benefiting from portfolio rebalancing.
• Excess workers' compensation product — New product line launched in February 2026, targeting self-insured enterprises. First policy written in June 2026; early stage, no material revenue yet but part of diversification strategy.

Recent performance

For Q2 2026, net income was $29.1 million ($1.59 per diluted share), up from $29.7 million ($1.23 per diluted share) in Q2 2025, a 29% EPS increase. Adjusted net income was $12.8 million ($0.70 per diluted share) versus $11.5 million ($0.48 per diluted share). Gross premiums written fell 19.6% to $163.4 million, and net premiums earned fell 12% to $174.1 million, reflecting underwriting discipline. The GAAP combined ratio was 105.8% (106.7% excluding the loss portfolio transfer), and the loss and LAE ratio improved to 70.2% from 70.7%. Net investment income rose to $27.4 million from $27.1 million.

Strategy

The company prioritizes profitable growth over volume, having commenced pricing and underwriting actions in 2025 to shift toward its core small business segment. Management highlights a recapitalization strategy involving share repurchases to enhance per-share metrics. The company is investing in technology, data analytics, and artificial intelligence to reduce operating costs and improve efficiency. It aims to diversify risk exposure across geographies and economic sectors, and broaden product offerings, including the new excess workers' compensation line. The CEO emphasizes 'profitable growth remains our north star.'

Risks

• Pricing and underwriting risk — Inaccurate estimates of losses, reliance on policyholder-provided data, or fraud could lead to mispriced policies, materially affecting financial results.
• Single-line concentration — The company underwrites only workers' compensation insurance, making it vulnerable to industry-specific competition and market cycles.
• Geographic concentration — Approximately 46-47% of gross written premiums come from California, exposing the company to state-specific regulatory, economic, or catastrophic risks.
• Investment market volatility — Net realized and unrealized losses on investments were $(20.4) million in 2025, and portfolio returns are subject to interest rate and market fluctuations.

Outlook

Management expects continued focus on profitable growth and diversification, with the excess workers' compensation product expected to contribute to future opportunities. The company plans to maintain underwriting discipline, with further share repurchases and dividends as part of its capital management strategy. No quantitative guidance was provided in the excerpts.