Employers Holdings, Inc. Schedules Fourth Quarter and Full-Year 2025 Earnings Release and Conference Call

Over the past six months, Employers Holdings’s stock price fell to $42.85. Shareholders have lost 9.4% of their capital, which is disappointing considering the S&P 500 has climbed by 9.9%. This was partly driven by its softer quarterly results and might have investors contemplating their next move.

Why Do We Think Employers Holdings Will Underperform?

Even though the stock has become cheaper, we're cautious about Employers Holdings. Here are three reasons we avoid EIG and a stock we'd rather own.

1. Net Premiums Earned Point to Soft Demand

When insurers sell policies, they protect themselves from extremely large losses or an outsized accumulation of losses with reinsurance (insurance for insurance companies). Net premiums earned are therefore gross premiums less what’s ceded to reinsurers as a risk mitigation and transfer strategy.

Employers Holdings’s net premiums earned has grown at a 3.3% annualized rate over the last two years, worse than the broader insurance industry and in line with its total revenue.

3. EPS Trending Down

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Sadly for Employers Holdings, its EPS declined by 8.3% annually over the last five years while its revenue grew by 4.4%. This tells us the company became less profitable on a per-share basis as it expanded.

Final Judgment

Employers Holdings doesn’t pass our quality test. Following the recent decline, the stock trades at 0.9× forward P/B (or $42.85 per share). This multiple tells us a lot of good news is priced in - we think other companies feature superior fundamentals at the moment. Let us point you toward a top digital advertising platform riding the creator economy.

As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the property & casualty insurance industry, including Trupanion and its peers.

Property & Casualty (P&C) insurers protect individuals and businesses against financial loss from damage to property or from legal liability. This is a cyclical industry, and the sector benefits when there is 'hard market', characterized by strong premium rate increases that outpace loss and cost inflation, resulting in robust underwriting margins. The opposite is true in a 'soft market'. Interest rates also matter, as they determine the yields earned on fixed-income portfolios. On the other hand, P&C insurers face a major secular headwind from the increasing frequency and severity of catastrophe losses due to climate change. Furthermore, the liability side of the business is pressured by 'social inflation'—the trend of rising litigation costs and larger jury awards.

The 33 property & casualty insurance stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 14.7%.

Thankfully, share prices of the companies have been resilient as they are up 6.1% on average since the latest earnings results.

Trupanion

Born from a vision to help pet owners avoid economic euthanasia when faced with expensive veterinary bills, Trupanion provides medical insurance for cats and dogs through data-driven, vertically-integrated products priced specifically for each pet's unique characteristics.

Trupanion reported revenues of $366.9 million, up 12.1% year on year. This print exceeded analysts’ expectations by 1.3%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS and book value per share estimates.

“We delivered record quarterly profitability while accelerating subscription pet growth for the third consecutive quarter,” said Margi Tooth, Chief Executive Officer and President of Trupanion.

Unsurprisingly, the stock is down 10.3% since reporting and currently trades at $37.74.

We think Trupanion is a good business, but is it a buy today? Read our full report here, it’s free for active Edge members.

Best Q3: Root

Pioneering a data-driven approach that rewards good driving habits, Root is a technology-driven auto insurance company that uses mobile apps to acquire customers and data science to price policies based on individual driving behavior.

Root reported revenues of $387.8 million, up 26.9% year on year, outperforming analysts’ expectations by 4.5%. The business had an incredible quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ net premiums earned estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 18.2% since reporting. It currently trades at $73.23.

Weakest Q3: Progressive

Starting as a small auto insurance company in 1937 with a pioneering focus on high-risk drivers, Progressive is a major auto, property, and commercial insurance provider that offers policies through independent agents, online platforms, and over the phone.

Progressive reported revenues of $22.51 billion, up 14.2% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates and a miss of analysts’ book value per share estimates.

As expected, the stock is down 5.3% since the results and currently trades at $227.69.

Read our full analysis of Progressive’s results here.

Selective Insurance Group

Founded in 1926 during the early days of automobile insurance, Selective Insurance Group is a property and casualty insurance company that sells commercial, personal, and excess and surplus lines insurance products through independent agents.

Selective Insurance Group reported revenues of $1.36 billion, up 9.3% year on year. This number topped analysts’ expectations by 364%. Taking a step back, it was a softer quarter as it produced a significant miss of analysts’ EPS estimates and a significant miss of analysts’ book value per share estimates.

Selective Insurance Group scored the biggest analyst estimates beat among its peers. The stock is up 4.8% since reporting and currently trades at $85.06.

Read our full, actionable report on Selective Insurance Group here, it’s free for active Edge members.

Employers Holdings

With roots in Nevada and a strong concentration in California where 45% of its premiums are generated, Employers Holdings is a specialty provider of workers' compensation insurance focused on small and select businesses engaged in low-to-medium hazard industries across the United States.

Employers Holdings reported revenues of $239.3 million, up 6.8% year on year. This result surpassed analysts’ expectations by 10.4%. However, it was a slower quarter as it logged a significant miss of analysts’ EPS estimates and a significant miss of analysts’ book value per share estimates.

The stock is up 5.1% since reporting and currently trades at $42.79.

Read our full, actionable report on Employers Holdings here, it’s free for active Edge members.

Employers Holdings’ third quarter was marked by a significant negative market reaction following actions to strengthen loss reserves, particularly tied to a surge in cumulative trauma (CT) claims in California. Management noted that reserve adjustments for recent accident years were necessary after a thorough review revealed increased CT claim frequency, which caught the industry off guard due to delays in claim reporting. CEO Katherine Antonello stressed that these adjustments were not indicative of broader deterioration, emphasizing, “Without the increased frequency of California CT claims, our third quarter overall reserve position would have developed favorably.” The company also highlighted ongoing investments in automation and operational efficiency, but the primary driver of underperformance was the unexpected claims environment in California.

Is now the time to buy EIG? Find out in our full research report (it’s free for active Edge members).

Employers Holdings (EIG) Q3 CY2025 Highlights:

• Revenue: $239.3 million vs analyst estimates of $216.9 million (6.8% year-on-year growth, 10.4% beat)
• Adjusted EPS: -$1.10 vs analyst estimates of $0.60 (significant miss)
• Adjusted Operating Income: -$11.2 million (-4.7% margin, 131% year-on-year decline)
• Market Capitalization: $846.3 million

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Employers Holdings’s Q3 Earnings Call

• Mark Hughes (Truist): Asked about the effectiveness of litigation strategies in deterring plaintiff attorneys targeting CT claims. CEO Katherine Antonello explained that internal analytics and aggressive defense tactics are being deployed, along with industry advocacy for legislative reform.
• Mark Hughes (Truist): Inquired whether the trend in CT claims is now predictable and if pricing and underwriting actions have stabilized loss ratios. Antonello stated the trend is stabilizing but the company will maintain a conservative approach until the impact of recent measures becomes clearer.
• Mark Hughes (Truist): Questioned the pace and discipline of the expanded share repurchase program. CFO Michael Pedraja confirmed repurchases are return-on-investment driven and will be paced according to market conditions.
• Karol Chmiel (Citizens): Asked about the statute of limitations and legal nuances affecting CT claims in California. Antonello highlighted that post-termination claims and multi-year exposure complicate the legal landscape, making claim patterns harder to predict.
• Robert Farnam (Janney Montgomery Scott): Probed the rationale and expectations for entering the excess workers’ compensation market. Antonello described the move as a natural extension of core expertise, emphasizing efficient market entry and leveraging existing agency relationships.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will closely monitor (1) the effectiveness of litigation and underwriting interventions in reducing California CT claim frequency and severity, (2) the pace of diversification through the launch of the excess workers’ compensation product, and (3) the impact of continued automation and cost controls on underwriting margins. Developments in California’s legal environment and the company’s operational execution on new initiatives will also serve as important indicators of future performance.

Employers Holdings currently trades at $37.65, down from $40.74 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).

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Workers' compensation insurer Employers Holdings reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 6.8% year on year to $239.3 million. Its non-GAAP loss of $1.10 per share was significantly below analysts’ consensus estimates.

Is now the time to buy EIG? Find out in our full research report (it’s free for active Edge members).

Employers Holdings (EIG) Q3 CY2025 Highlights:

• Revenue: $239.3 million vs analyst estimates of $216.9 million (6.8% year-on-year growth, 10.4% beat)
• Adjusted EPS: -$1.10 vs analyst estimates of $0.60 (significant miss)
• Adjusted Operating Income: -$11.2 million (-4.7% margin, 131% year-on-year decline)
• Market Capitalization: $857.1 million

StockStory’s Take

Employers Holdings’ third quarter was marked by a significant negative market reaction following actions to strengthen loss reserves, particularly tied to a surge in cumulative trauma (CT) claims in California. Management noted that reserve adjustments for recent accident years were necessary after a thorough review revealed increased CT claim frequency, which caught the industry off guard due to delays in claim reporting. CEO Katherine Antonello stressed that these adjustments were not indicative of broader deterioration, emphasizing, “Without the increased frequency of California CT claims, our third quarter overall reserve position would have developed favorably.” The company also highlighted ongoing investments in automation and operational efficiency, but the primary driver of underperformance was the unexpected claims environment in California.

Looking ahead, management’s outlook is shaped by ongoing uncertainty surrounding California CT claims and a renewed focus on conservative reserving and operational discipline. Employers Holdings is implementing targeted pricing actions, aggressive claims handling, and underwriting refinements to address the CT trends, while also pursuing legislative reform in California. Antonello outlined a four-pronged strategy for mitigating future CT impact, emphasizing, “We are confident that the actions we have made are timely, appropriate and prudent and will better position the more recent accident years for the future.” The company’s entry into excess workers’ compensation and continued investment in technology are expected to support diversification and growth, but management remains cautious given the evolving legal and regulatory environment in California.

Key Insights from Management’s Remarks

Management attributed the quarter’s underperformance to the surge in California cumulative trauma claims, while also highlighting progress in diversification and operational streamlining.

• California CT claim spike: The unexpected increase in cumulative trauma claims in California drove the need for a $38.2 million reserve boost, primarily impacting accident years 2023 and 2024. Management explained that delayed claim reporting and higher litigation rates complicated trend detection and response.
• Operational discipline and automation: Employers Holdings continued to invest in automation and efficiency, with CEO Katherine Antonello noting significant reductions in underwriting expense ratios after an August reorganization targeting resource alignment and cost control.
• Small commercial business growth: Despite competitive pressures and selective underwriting, small commercial policy counts grew by 4%, reflecting customer uptake of the company’s digital platform and automation initiatives. Management sees this as validation of prior investments in technology and client experience.
• Excess workers’ compensation entry: The company announced its first expansion into the excess workers’ compensation market, leveraging existing expertise and infrastructure. A new underwriting team has been hired, with product submissions expected in early 2026, aiming to diversify revenue streams and deepen broker relationships.
• Shareholder return initiatives: A $125 million debt-funded recapitalization and a $125 million expansion of the share repurchase authorization were announced, with management citing confidence in the balance sheet and belief that the stock is undervalued. The recapitalization aims to improve return on equity and earnings per share.

Drivers of Future Performance

Employers Holdings’ outlook prioritizes underwriting margin over top-line growth, with a strong focus on mitigating California CT risk and pursuing diversification.

• California CT claim mitigation: Management is executing a multi-faceted strategy to address the state’s CT claim environment, involving aggressive litigation management, targeted pricing, enhanced underwriting scrutiny, and continued advocacy for legislative reform. The company believes these steps will reduce uncertainty but acknowledges ongoing unpredictability in California.
• Discipline in underwriting and pricing: The company remains committed to prioritizing underwriting margin over premium growth, especially in riskier jurisdictions and policy classes. While this approach may result in flat or modestly rising top-line revenue, it is intended to support long-term profitability.
• Diversification and technology investments: New product initiatives, such as the excess workers’ compensation line, and continued automation are expected to enable profitable expansion into new markets and improve operational efficiency. Management also emphasized the use of AI in underwriting and customer service to further streamline operations.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will closely monitor (1) the effectiveness of litigation and underwriting interventions in reducing California CT claim frequency and severity, (2) the pace of diversification through the launch of the excess workers’ compensation product, and (3) the impact of continued automation and cost controls on underwriting margins. Developments in California’s legal environment and the company’s operational execution on new initiatives will also serve as important indicators of future performance.

Employers Holdings currently trades at $38.13, down from $40.74 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).

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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return).

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.