AMERISAFE Inc. reported higher premium volumes and improved investment yield but lower earnings for the first quarter of 2026, as increased loss costs and policyholder dividends pushed the workers' compensation specialist's combined ratio higher year over year.
For the three months ended March 31, 2026, the high‑hazard workers’ comp carrier reported net income of $8.1 million, down 9.0% from $8.9 million in the first quarter of 2025. Diluted earnings per share fell to $0.43 from $0.47. Operating net income declined 17.4% to $9.5 million, or $0.50 per share, from $11.4 million, or $0.60 per share, a year earlier.
The net combined ratio deteriorated to 93.2% from 89.1%, driven by a higher loss ratio and nearly double the level of policyholder dividends, partly offset by a slightly lower expense ratio. Return on average equity was 13.1%, compared to 13.8% in the prior‑year quarter, while operating return on average adjusted equity fell to 14.9% from 17.1%.
Gross premiums written increased 5.6% to $88.5 million, and net premiums earned rose 9.0% to $75.1 million from $68.9 million. Book value per share at March 31, 2026, was $13.18, down 1.6% from $13.39 at December 31, 2025, and 3.7% from $13.69 a year earlier.
President and CEO G. Janelle Frost said the company delivered “a strong start to 2026,” noting it was AMERISAFE’s eighth consecutive quarter of growth in both gross premiums written and net premiums earned. Net premiums earned increased 9.0% in the period.
“We continued to demonstrate expense discipline, achieving a third consecutive quarter of year over year improvement in the expense ratio,” Frost said. She added that the company’s focus on high‑hazard industries “continues to create meaningful opportunities for profitable growth and attractive returns on equity,” supported by disciplined underwriting, a strong balance sheet and consistent capital management.
Voluntary premiums on policies written in the quarter increased 8.2% compared with the first quarter of 2025, reflecting new business production and solid premium and policy retention. Payroll audits and related premium adjustments contributed $3.7 million to written premiums, down from $5.0 million in the prior‑year period.
Net loss and loss adjustment expenses incurred rose 15.6% to $46.4 million from $40.2 million. The current accident year loss ratio increased to 72.0% from 71.0%, while the benefit from prior‑year reserve releases moderated. The prior accident year loss ratio was –10.1%, compared with - 12.7% a year earlier.
Favorable development on accident years 2023 and prior reduced loss and LAE by $7.6 million in the quarter, versus $8.7 million in favorable development in the first quarter of 2025. Overall, the net loss ratio increased to 61.9% from 58.3%.
Underwriting and other operating costs, commissions, salaries and benefits rose 8.1% to $22.3 million. The net underwriting expense ratio improved slightly to 29.7% from 29.9%, as growth in premium volume and policy count outpaced controllable cost increases.
Policyholder dividends were $1.2 million, up from $0.6 million in the prior‑year quarter, lifting the net dividend ratio to 1.6% from 0.9%. Pre‑tax underwriting profit decreased 31.5% to $5.1 million from $7.5 million.
The effective tax rate for the quarter was 19.8%, compared to 20.2% in the first quarter of 2025.
Net investment income declined 0.8% to $6.6 million, primarily due to lower average investable assets, partly offset by a higher overall book yield and reduced expenses. The pre‑tax investment yield improved to 3.4% from 3.2%, and the tax‑equivalent yield rose to 3.9% from 3.8%.
Net realized gains and losses on investments were close to flat, with a small pre‑tax loss of $3,000 compared with a $2,000 gain a year earlier. Net unrealized losses on equity securities narrowed to $1.7 million from $3.2 million, reflecting market volatility and lower valuations across the equity portfolio.
As of March 31, 2026, the carrying value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was $773.6 million.
The board recently declared another quarterly dividend of $0.41 per share, payable June 19, 2026, to shareholders of record as of June 12, 2026.
The company also repurchased 119,959 shares under its share repurchase program at an average cost of $33.60 per share, including commissions and excise tax, for a total of $4.0 million. Since the program began in 2010, AMERISAFE has repurchased 2,094,099 shares at an average cost of $27.79 per share, for an aggregate $58.2 million. The remaining authorization was $12.9 million as of March 31, 2026.
AMERISAFE’s first‑quarter results position it broadly in line with, though somewhat behind, larger peers on underwriting profitability, while its premium growth and double‑digit returns remain competitive for a mono‑line workers’ comp specialist.
Among specialty carriers, W. R. Berkley reported a first‑quarter 2026 calendar‑year combined ratio of about 90.7%, with a current accident year combined ratio before catastrophes in the high‑80s, and generated a return on equity above 20%, supported by strong underwriting performance and higher investment income. By comparison, AMERISAFE’s 93.2% combined ratio and 13.1% ROE indicate thinner margins, but still reflect solid profitability for a focused workers’ comp writer.
At the large‑cap end of the market, Travelers posted a consolidated combined ratio in the high‑80s and a return on equity above 20% for the first quarter of 2026, benefiting from diversification across commercial, personal and specialty lines and from rising investment yields. Those figures highlight the earnings power of scale and diversification but also underscore that AMERISAFE operates in a higher‑volatility niche, concentrated in high‑hazard classes.
The comparison indicates that AMERISAFE is trading some margin and return relative to larger diversified peers in exchange for a focused high‑hazard book that is still generating steady growth and competitive returns in a workers’ comp market that remains competitive but broadly stable.
