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SunTrust Financial Services Conference – Amerisafe Inc

Amerisafe Inc · May 20, 2015 · 22 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

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  1. SunTrust Financial Services Conference – Amerisafe Inc – slide 1
    SunTrust 2015 Financial Services Conference May 20, 2015 C. Allen Bradley, Jr. Michael Grasher Executive Chairman Chief Financial Officer
  2. SunTrust Financial Services Conference – Amerisafe Inc – slide 2
    Overview AMERISAFE has a 29-year operating history as a specialty provider of workers compensation insurance for small to mid-sized employers engaged in high hazard industries Premium Distribution by State 2015 1Q Highlights Total…
  3. SunTrust Financial Services Conference – Amerisafe Inc – slide 3
    Premium Distribution Historical Premium Distribution Premium Distribution by Industry as of 12/31/14 of Major Industry Groups *Includes Assigned Risk & Assumed premiums (in millions) Maritime 2.9% 2012 Construction 200 Mftg 7.2%…
  4. SunTrust Financial Services Conference – Amerisafe Inc – slide 4
    Pillars of Distinction AMSF High Hazard Small to Mid- High Hazard Comprehensive Intensive Claims Niche Focus Size Underwriting Safety Services Management Employer Expertise Rate more Focus Field Safety Field Case than 3x Industry-…
  5. SunTrust Financial Services Conference – Amerisafe Inc – slide 5
    Amerisafe Customer Overview Competition is fragmented, and favors multi-state writers of small to mid-sized employers Intensity of Competition Large Large Competitors (major national firms); Annual Represents 9% of AMSF…
  6. SunTrust Financial Services Conference – Amerisafe Inc – slide 6
    Pricing for Profitability Loss costs estimated loss/100 payroll approved by state regulator Loss cost multiplier (LCM) multiplier applied to loss costs to cover company expenses above loss costs Effective loss cost multiplier (ELCM)…
  7. SunTrust Financial Services Conference – Amerisafe Inc – slide 7
    Combined Ratio 120.0% 100.4% 100.0% 92.4% 92.5% 97.5% 90.0% 87.9% 85.9% 86.2% 85.0% 80.9% 24.2% 21.1% 80.0% 20.2% 20.6% 23.8% 20.8% 22.6% 21.3% 21.5% 18.8% 60.0% 40.0% 71.9% 75.6% 74.3% 66.6% 64.7% 65.1% 69.4% 65.2% 63.3%…
  8. SunTrust Financial Services Conference – Amerisafe Inc – slide 8
    Economic Model - ROE Drivers 1Q15 Loss Ratio 63.3% + Expense Ratio 21.5% + Imperative to execute Policyholder Dividend Ratio 0.2% = on the fundamentals of Combined Ratio 85.0% underwriting, safety and claims with investment…
  9. SunTrust Financial Services Conference – Amerisafe Inc – slide 9
    Contributions to Returns 5 Year Average Contribution and Return on Surplus 10 Year Average Contribution and Return on Surplus 20% 30% 15% 20% 10% 10% 5% 0% 0% -10% -5% -20% -10% -30% Amerisafe A++, A+ A A- B++…
  10. SunTrust Financial Services Conference – Amerisafe Inc – slide 10
    Investment Portfolio Value of Fixed-Maturity Securities Portfolio Allocation (as of 3/31/2015) Classified as Held-to-Maturity Cash & Cash Short-term (as of 3/31/2015) Equivalents investments Book Value Fair Value Unrealized 6.9%…
  11. SunTrust Financial Services Conference – Amerisafe Inc – slide 11
    Capital Management Goal: Maintain and Balance Hold prudent capital levels to maintain A.M. Best financial strength rating of A, yet achieve attractive returns for shareholders History of Proactive Capital Management 62.0M of…
  12. SunTrust Financial Services Conference – Amerisafe Inc – slide 12
    Historical Financial Performance 60% 27.16 27.98 30.00 23.94 27.00 50% 22.09 24.00 20.46 24.32 23.65 21.00 40% 11.73 13.93 18.56 22.41 16.13 20.88 18.00 9.23 19.25 30% 14.4% 12.0% 17.91 15.00 15.3% 12.00 20% 7.42 9.5%…
  13. SunTrust Financial Services Conference – Amerisafe Inc – slide 13
    Current Workers Compensation Market Conditions 14
  14. SunTrust Financial Services Conference – Amerisafe Inc – slide 14
    WC Industry Combined Ratio 393.8 130% 400 372.2 345.0 120% 332.5 328.8 350 327.8 307.8 290.9 110% 300 264.9 256.5 272.1 228.4 100% 250 223.6 204.8 122% 118% 117% 117% 90% 185.0 200 111% 111% 110% 110%…
  15. SunTrust Financial Services Conference – Amerisafe Inc – slide 15
    Workers Comp Rate Changes, 2009:Q1 2015:Q1 (Percent Change) 12% 9.8% 10% 9.0% 8.3%8.1% 8.3% 8% 7.5% 7.4% 5.8% 6% 4.9% 4.1% 4.1% 4% 3.1% 2.6% 2.3% 2% 0.7% 0% -0.4% -2% -1.6% -4% -4.0% -3.7%-3.9% -3.7%-3.4% -4.6% -4.6%…
  16. SunTrust Financial Services Conference – Amerisafe Inc – slide 16
    WC Insurance Rate Changes Source: The Council of Insurance Agents & Brokers. Chart prepared by Barclays Research. 17
  17. SunTrust Financial Services Conference – Amerisafe Inc – slide 17
    Residual Market Activity *Premium volume shown is net of uncollectible premium for all states and net of premium ceded for the cost of excess reinsurance for AK and NM. Source: National Council of Compensation Insurance, Inc. 18
  18. SunTrust Financial Services Conference – Amerisafe Inc – slide 18
    Reduction in Combined Ratio Necessary to Offset 1% Decline in Investment Yield to Maintain Constant ROE, by Line* Lower Investment Earnings Place a Greater Burden on Underwriting and Pricing Discipline *Based on 2008 Invested…
  19. SunTrust Financial Services Conference – Amerisafe Inc – slide 19
    Appendix 20
  20. SunTrust Financial Services Conference – Amerisafe Inc – slide 20
    Nasdaq: AMSF Market Statistics: Stock Price 43.90 52 week range 35.15 - 46.89 Shares Outstanding 18.9 M Market Cap 831 M Book Value per Share 24.32 Price-to-Book 1.90 Market data as of May 7, 2015; Financial data as of March…
  21. SunTrust Financial Services Conference – Amerisafe Inc – slide 21
    Selected Balance Sheet Data (in thousands) 1Q15 2014 2013 Investments, Cash and cash equivalents 1,153,094 1,107,289 1,001,852 Amounts recoverable from reinsurers 87,377 85,888 75,326 Premiums receivable, net 188,281 178,917…
  22. SunTrust Financial Services Conference – Amerisafe Inc – slide 22
    Income Statement (in thousands) 1Q15 2014 2013 Revenues: Gross premiums written 100,789 393,819 372,177 Ceded premiums written (2,536) (13,793) (18,425) Net premiums written 98,253 380,026 353,752 Net premiums earned 94,787…

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