AMERISAFE (NASDAQ:AMSF) executives said the workers’ compensation insurer finished 2025 with what management described as strong profitability and continued premium momentum, even as the industry remains in a prolonged pricing downturn.
On the company’s fourth-quarter 2025 earnings call, President and CEO Janelle Frost pointed to a return on equity of 18.5% and a combined ratio of 91.3% for the year. Frost characterized results as “hard-fought” in what she called a “prolonged soft market,” noting that workers’ compensation carriers have faced 12 consecutive years of rate decline. She said AMERISAFE’s niche underwriting approach, safety services, and claims management remain central to sustaining underwriting profitability.
Premium growth and retention
Voluntary premium, the largest component of GPW, increased 10.5% in the quarter and 10.2% for the full year. Management said the growth was broad-based across states and classes, and occurred within AMERISAFE’s existing geographic footprint and risk appetite. Vincent attributed increased new business opportunities to efforts to deepen relationships with agents aligned with the company’s target classes, while strong service levels supported renewals.
Renewal retention for policies offered renewal was 93.7% in the quarter, which management said was strong given competitive conditions. Combined with new business, the company’s in-force policy count increased 10.2% for the year.
Audit premium and adjustments added $3.5 million to GPW in the quarter, up from $2.5 million in the fourth quarter of 2024. For the full year, audit premium and adjustments contributed $12.6 million, down from $20.2 million in 2024. Vincent said the year-over-year decrease was consistent with a moderating trend the company had previously discussed.
As premium written growth flowed through earnings, net premiums earned totaled $73.6 million in the quarter and $283 million for the full year, growing 10.7% and 4.6%, respectively.
Rate pressure and payroll tailwinds
Management said payroll growth remains positive in the company’s classes of business, driven primarily by wages. Vincent reported wage growth of 6.1% in the fourth quarter, consistent with recent trends, calling it a tailwind for premium growth.
At the same time, he said filed rates continue to face downward pressure. While the average pace of decline has eased, Vincent said the company still expects rate changes to be in the negative mid-single-digit range based on 2026 filings to date.
Claims, large losses, and reserve development
Frost said the company’s current accident year loss ratio was 72% for the full year, up from 71% through the first three quarters and higher than the prior year. She tied the increase to continued rate pressure as well as higher severity.
AMERISAFE ended the accident year with 25 claims with incurred values over $1 million, compared with 18 at the end of accident year 2024. Frost said the increase represented a “frequency of severity” and was a key reason the company adjusted its accident year loss ratio upward.
In the Q&A, Frost said overall claim frequency increased 7.8% in 2025, compared with 10.2% policy growth, which she said was consistent with expectations for the overall book. She added that the $1 million threshold has remained a consistent benchmark over time even though inflation and severity trends mean “$1 million in 2025 is not the same as $1 million in 2022.” She also said the large claims were broadly consistent with the company’s book by cause of loss and industry group, rather than being concentrated in a specific class or injury type.
On prior accident years, the company reported $7.6 million of favorable development in the quarter (a favorable 10.4%) and $33.9 million for the full year (a favorable 12%). Combining current and prior years, AMERISAFE reported a loss ratio of 64.5% for the quarter and 60% for the year, compared with 56.4% and 58.1% in 2024.
Frost attributed the favorable development to claims being closed or settled, citing development coming primarily from 2020 and prior, with smaller amounts from 2021 and 2022. She also said nothing had changed in reserving practices and reiterated that the company relies heavily on case reserves.
On medical cost trends, Frost said pressures discussed in recent quarters remain, particularly in home health and durable medical equipment—for AMERISAFE, often relating to prosthetics. She said she did not see macro factors easing medical inflation pressure.
Earnings, expenses, investments, and capital
To complete the combined ratio, Frost said the expense ratio was 29.2% for the quarter and 30.4% for the full year, with total underwriting and other expenses of $21.5 million. She said the company improved operating scale during the quarter as net earned premium increased.
Net income was $10.4 million, or $0.55 per diluted share, in the fourth quarter, while operating net income was $9.8 million, or $0.51 per diluted share. For the full year, net income totaled $47.1 million and net operating income was $41.8 million, compared with $55.4 million and $48.4 million, respectively, in 2024. The company’s effective tax rate was 19.9% for the year.
On investments, Frost said net investment income increased 2.5% in the fourth quarter to $77.1 million, and decreased 7.6% for the full year to $27 million. She said the yield on new investments increased, driving a tax-equivalent yield of 3.83% for the quarter. The portfolio carried an average AA- credit rating and duration of 4.3 years, with the following composition:
- 60% municipals
- 21% corporate bonds
- 3% U.S. Treasuries and agencies
- 8% equities
- 8% cash and other investments
About 44% of the bond portfolio was held-to-maturity, and the net unrealized loss at quarter end was $5.5 million. Frost said the company ended the quarter with roughly $797 million in cash and invested assets and described its capital position as strong.
Book value per share was $13.39 after the company paid a special dividend in December 2025. Frost said AMERISAFE expects to file its Form 10-K on Friday, February 27, after market close.
Outlook themes: competitive market and growth initiatives
Management described competition as steady and said economic conditions in its insured industries appear to be holding up. Frost said AMERISAFE is not seeing an uptick in employee counts, and noted wage growth in its book has been higher than the national average, which she viewed as supportive of its policyholder base.
On the sustainability of growth, Vincent said that over the last four years AMERISAFE has reduced its contracted agency count by over a third while generating more opportunities and binds, which he said reflects improved agency effectiveness. He said collaboration among sales, safety, and underwriting is operating at a “high, sustainable level,” while acknowledging continued competitive pressures.
Addressing a question about undocumented workers, Frost said the company has not seen a shift in employee counts attributable to undocumented workers and does not handle related claims differently. She said that in some cases a desire to return to a home country can accelerate claim closure or settlement, but overall she characterized undocumented workers as a “wash” and said it has not been impactful to the book as of the end of 2025.
Closing the call, Frost said AMERISAFE is positioned to sustain growth and underwriting profitability by relying on its expertise “in turning risk into opportunity.”
About AMERISAFE (NASDAQ:AMSF)
Amerisafe, Inc (NASDAQ: AMSF) is a specialty provider of workers’ compensation insurance products and services in the United States. The company focuses on underwriting and managing workers’ compensation policies for small to mid-sized public and private businesses, particularly in higher-hazard industries such as retail, manufacturing, distribution and wholesale. Through its network of independent agents, Amerisafe delivers tailored coverage solutions that combine robust risk management support with loss prevention programs designed to enhance workplace safety.
In addition to core insurance offerings, Amerisafe provides extensive risk control resources, including safety training, on-site consultations and claims management services.
