Third Quarter 2026
Filed Oct 28, 2026Employers Holdings, Inc. Reports Third Quarter 2026 Results and Declares Regular Quarterly Dividend of $0.34 per Share
Profitability and the loss ratio improved substantially as prior-year reserve strengthening did not recur, while gross premiums written, net premiums earned and policies in force declined as the Company prioritized underwriting profitability in a soft market.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net income (loss)GAAP | $11.6M | – | – |
| Net income (loss) per diluted shareGAAP | $0.64 per diluted share | – | – |
| Adjusted net income (loss)non-GAAP | $12.8M | – | – |
| Adjusted net income (loss) per diluted sharenon-GAAP | $0.71 per diluted share | – | – |
| Gross premiums writtenother | $151.1M | – | a decrease of 17.8% |
| Net premiums earnedother | $160.2M | – | a decrease of 17% |
| Losses and LAEother | $114M | – | a decrease of 38.9% |
| Loss and LAE ratioother | 71.2% | – | decreased to 71.2% from 97.1% |
| Voluntary business current accident year loss and LAE ratio, excluding the LPTother | 72.0% | – | – |
| Commission expenseother | $20.6M | – | a decrease of 10.4% |
| Commission expense ratioother | 12.9% | – | increased to 12.9% from 12.0% |
| Underwriting expensesother | $38.9M | – | a decrease of 1.8% |
| Underwriting expense ratioother | 24.3% | – | increased to 24.3% from 20.6% |
| Combined ratioGAAP | 108.4% | – | improved to 108.4% from 129.7% |
| Combined ratio excluding the LPTother | 109.2% | – | – |
| Net investment incomeother | $32.3M | – | an increase of 23.8% |
| Net realized and unrealized (losses) gains on investmentsother | −$3.2M | – | – |
| Interest and financing expensesother | $1.3M | – | – |
| Federal and state income tax expense (benefit)GAAP | $2.9M | – | – |
| Effective tax rateGAAP | 20.0% effective tax rate | – | – |
| Policies in forceother | 124,043 | – | declined 8% |
| Book value per share including the Deferred Gainother | $49.44 | declined by 5.3% (including dividends) | an increase of 2.1% (including dividends declared) |
| Adjusted book value per sharenon-GAAP | $53.64 | increased by 1.3% (including dividends) | up 7.1% (including dividends declared) |
next year outlook
- NoteLarge deductible, which the Company is developing internally, is targeted to launch next year.
Capital returns
- Returned $24.4 million to stockholders through a combination of share repurchases and regular quarterly dividends.
- During the third quarter of 2026, the Company repurchased 373,848 shares of its common stock at an average price of $48.44 per share.
- The Company has $94.9 million of repurchase authorization remaining under the 2026 Program.
- On October 28, 2026, the Board of Directors declared a regular quarterly dividend of $0.34 per share.
- The dividend is payable on December 3, 2026, to stockholders of record as of November 12, 2026.
What drove it
- Gross premiums written declined following deliberate pricing and underwriting actions commenced in 2025 to prioritize profitability over volume; new and renewal business premiums declined.
- The loss and LAE decrease primarily reflected the absence of approximately $38.0 million of prior-period reserve strengthening recognized last year, partially offset by lower premium levels.
- Net investment income benefited from higher yields on fixed maturity securities following 2025 investment rebalancing and $5.6 million in returns from private equity investments.
- Underwriting expenses declined primarily because of reduced policyholder dividends, bad debt, and premium taxes and assessments.
- The excess workers’ compensation product launched in June had 31 accounts and $6.5 million in premium to date.
Concerns
- Gross premiums written decreased 17.8%, net premiums earned decreased 17%, and policies in force declined 8% amid the prolonged soft market.
- The GAAP combined ratio was 108.4%, remaining above an underwriting profit.
- The underwriting expense ratio increased to 24.3% from 20.6% because premiums earned declined.
- Net realized and unrealized investment results moved to a $(3.2) million loss from $21.2 million of gains.
- Book value per share including the Deferred Gain declined by 5.3% from last quarter, including dividends, due to an unrealized market value decline in fixed income investments as interest rates increased.
What to watch
- Whether pricing and underwriting actions restore an underwriting profit while premium volume declines.
- Loss-cost and reserve development, including whether voluntary business continues without prior year loss development.
- The contribution from higher reinvestment rates, private equity investment returns, and investment-market movements.
- Adoption and premium development of the excess workers’ compensation offering and the planned large deductible launch next year.
- The trajectory of policies in force, retention of small business customers, and the pace of exits from selected classes of business.
Balance sheet and cash flow
- The Company has $125.0 million senior debt associated with the recapitalization plan announced in the fourth quarter of 2025.
Analysis
Employers returned to GAAP profitability in the third quarter, reporting net income of $11.6 million, or $0.64 per diluted share, versus a net loss of $(8.3) million, or $(0.36) per diluted share, in the third quarter of 2025. Adjusted net income was $12.8 million, or $0.71 per diluted share, compared with an adjusted loss of $(25.5) million, or $(1.10) per diluted share. The primary driver was the absence of approximately $38.0 million in prior-period reserve strengthening recorded a year earlier. Losses and LAE declined 38.9%, and the loss and LAE ratio improved to 71.2% from 97.1%.
The underwriting recovery came with a deliberate contraction in premium volume. Gross premiums written were $151.1 million, down 17.8%, while net premiums earned were $160.2 million, down 17%. Policies in force declined to 124,043 from 135,414. Management attributed the declines to pricing and underwriting actions begun in 2025 to prioritize profitability over volume in the prolonged soft market, while retaining the majority of small business customers and exiting selected classes of business.
Expense ratios moved adversely on the lower earned-premium base. The commission expense ratio increased to 12.9% from 12.0%, reflecting higher commission rates on 2026 new business writings and a one-time adjustment that reduced the prior-year ratio. The underwriting expense ratio increased to 24.3% from 20.6%, even as underwriting expenses decreased 1.8% to $38.9 million. The GAAP combined ratio improved materially to 108.4% from 129.7%, but remained above an underwriting profit.
Investment income provided an important earnings offset. Net investment income increased 23.8% to $32.3 million, supported by higher fixed-maturity yields after the 2025 portfolio rebalancing and $5.6 million of private equity investment returns. However, net realized and unrealized investment results were a $(3.2) million loss versus $21.2 million of gains a year ago. Book value per share including the Deferred Gain was $49.44 and declined 5.3% from last quarter, including dividends, because higher interest rates reduced the unrealized market value of fixed income investments. Adjusted book value per share rose 1.3% in the quarter to $53.64, including dividends.
Capital deployment remained active, with $24.4 million returned through repurchases and regular dividends. The Company repurchased 373,848 shares at an average price of $48.44 per share and declared a $0.34 per-share dividend. Management identified product expansion as its growth path, noting that the excess workers’ compensation product launched in June had reached 31 accounts and $6.5 million in premium to date, while the internally developed large deductible product is targeted to launch next year.
Management, verbatim
Our third quarter results reflect the progress we are making to restore our underwriting profitability to historical levels.
Katherine Antonello, Chief Executive Officer
The improvement was driven primarily by the absence of the reserve strengthening we recorded in that quarter, and we have not recognized any prior year loss development on our voluntary business this year.
Katherine Antonello, Chief Executive Officer
With these initiatives, I am confident we are building a stronger, more resilient company.
Katherine Antonello, Chief Executive Officer
Not in the filing
stated, not guessed- Total revenue was not reported.
- Segment revenue was not reported.
- Gross margin was not reported.
- Operating income and operating margin were not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Cash and cash equivalents were not reported.
- Total debt was not reported; only $125.0 million of senior debt was disclosed.
- Prior-quarter values for net income, adjusted net income, premiums, loss and LAE, expenses, investment income, investment gains and policies in force were not reported.
- Prior-year values for losses and LAE, commission expense, underwriting expenses, book value per share and adjusted book value per share were not reported.
- A numerical financial outlook for a future period was not reported.
- Previous-release outlook was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.