AMERISAFE Q3 Net Income Dips 3.5% Despite Premium Growth

TL;DR

**AMSF's premium growth is overshadowed by declining net income, signaling potential margin compression that could impact future returns.**

AI Summary

AMERISAFE, Inc. reported a slight decrease in net income for the three months ended September 30, 2025, falling to $13.818 million from $14.324 million in the prior year, a 3.5% decline. However, gross premiums written increased by 7.1% to $80.321 million from $74.940 million in the same quarter. For the nine months ended September 30, 2025, net income decreased by 13.1% to $36.722 million from $42.242 million, while gross premiums written rose 5.3% to $243.809 million from $231.442 million. Total assets grew to $1.164 billion as of September 30, 2025, up from $1.157 billion at December 31, 2024. Reserves for loss and loss adjustment expenses decreased by 5.1% to $617.860 million from $651.309 million. The company's strategic outlook includes providing workers' compensation insurance for small to mid-sized employers in hazardous industries like construction and trucking, and it continues to manage its investment portfolio, with total investments decreasing slightly to $762.280 million from $788.778 million.

Why It Matters

For investors, the slight dip in net income for both the quarter and nine-month period, despite rising gross premiums, signals potential margin pressures or increased operational costs that warrant closer examination. The decrease in reserves for loss and loss adjustment expenses could indicate improved claims management or a shift in risk profile, which is a positive for profitability. In a competitive workers' compensation market, AMERISAFE's focus on hazardous industries provides a niche, but also exposes it to higher inherent risks. Employees and customers might see stability in the company's core business, but investors should monitor how AMERISAFE balances premium growth with underwriting discipline to maintain profitability against competitors.

Risk Assessment

Risk Level: medium — The company faces a medium risk level due to declining net income for both the three-month period (down 3.5% to $13.818 million) and the nine-month period (down 13.1% to $36.722 million), despite an increase in gross premiums written. This suggests potential challenges in profitability or increased expenses, such as the 2.3% rise in loss and loss adjustment expenses incurred for the three months ended September 30, 2025, to $41.679 million.

Analyst Insight

Investors should scrutinize AMERISAFE's expense structure and underwriting performance, particularly the loss and loss adjustment expenses, to understand the drivers behind the net income decline. Consider holding existing positions but deferring new investments until a clear trend emerges showing improved profitability or expense control, especially given the competitive landscape in workers' compensation insurance.

Financial Highlights

revenue

$80.321M

total Assets

$1.164B

net Income

$13.818M

eps

$0.73

revenue Growth

+7.1%

Revenue Breakdown

Key Numbers

• $80.321M — Gross premiums written (Increased by 7.1% for Q3 2025 compared to Q3 2024)
• $13.818M — Net income (Decreased by 3.5% for Q3 2025 compared to Q3 2024)
• $36.722M — Net income (Decreased by 13.1% for the nine months ended September 30, 2025)
• $243.809M — Gross premiums written (Increased by 5.3% for the nine months ended September 30, 2025)
• $1.164B — Total assets (Increased from $1.157 billion at December 31, 2024)
• $617.860M — Reserves for loss and loss adjustment expenses (Decreased by 5.1% from December 31, 2024)
• $762.280M — Total investments (Decreased from $788.778 million at December 31, 2024)
• $0.73 — Basic earnings per share (Decreased from $0.75 for Q3 2024)
• $1.93 — Basic earnings per share (Decreased from $2.21 for the nine months ended September 30, 2024)
• $0.39 — Cash dividends declared per common share (Increased from $0.37 for Q3 2024)

Key Players & Entities

• AMERISAFE, Inc. (company) — insurance holding company
• American Interstate Insurance Company (company) — wholly-owned subsidiary
• Silver Oak Casualty, Inc. (company) — wholly-owned subsidiary
• American Interstate Insurance Company of Texas (company) — wholly-owned subsidiary
• Amerisafe Risk Services, Inc. (company) — wholly-owned subsidiary
• Amerisafe General Agency, Inc. (company) — wholly-owned subsidiary
• FASB (regulator) — Financial Accounting Standards Board
• SEC (regulator) — Securities and Exchange Commission
• $13.818 million (dollar_amount) — Net income for Q3 2025
• $14.324 million (dollar_amount) — Net income for Q3 2024

FAQ

Risk Factors

• Reserve Adequacy [medium — financial]: The company's reserves for loss and loss adjustment expenses decreased by 5.1% to $617.860 million from $651.309 million. Inadequate reserves could lead to future underwriting losses and impact profitability.
• Investment Portfolio Performance [medium — market]: Total investments decreased slightly to $762.280 million from $788.778 million. Fluctuations in market conditions can impact the value and income generated from the investment portfolio, affecting overall financial results.
• Workers' Compensation Regulations [high — regulatory]: AMERISAFE operates in the highly regulated workers' compensation insurance market. Changes in state or federal regulations could impact pricing, coverage, and operational requirements, potentially affecting profitability.

Industry Context

AMERISAFE operates in the specialized niche of workers' compensation insurance, primarily serving small to mid-sized employers in hazardous industries such as construction and trucking. This sector is characterized by significant regulatory oversight and sensitivity to economic cycles affecting employment in these industries.

Regulatory Implications

The company's operations are subject to state-specific workers' compensation laws and insurance regulations. Changes in these regulations, particularly concerning coverage requirements, benefit levels, or claims handling, could materially impact AMERISAFE's financial performance and operational strategies.

What Investors Should Do

1. Monitor reserve adequacy closely.
2. Analyze drivers of premium growth.
3. Evaluate investment portfolio performance.

Glossary

Gross premiums written

The total amount of premiums an insurance company has billed for policies sold during a specific period, before deducting reinsurance costs or return premiums. (Indicates the top-line growth of the insurance business and the company's ability to attract new business.)

Reserves for loss and loss adjustment expenses

Funds set aside by an insurance company to cover the estimated costs of claims that have occurred but have not yet been paid, including expenses related to investigating and settling those claims. (Crucial for assessing the company's financial stability and its ability to meet future obligations. A decrease may indicate improved claims management or a change in risk profile.)

Year-Over-Year Comparison

Compared to the prior year's quarter, AMERISAFE reported a 3.5% decrease in net income ($13.818M vs $14.324M) despite a 7.1% increase in gross premiums written ($80.321M vs $74.940M). This suggests pressure on underwriting margins or increased operating expenses. Reserves for losses also saw a 5.1% reduction, while total investments experienced a slight decline, indicating a potentially more conservative asset management approach.

Key Financial Figures

• $0.01 — ch registered Common stock, par value $0.01 per share AMSF NASDAQ Indicate by

Filing Documents

• amsf-20250930.htm (10-Q) — 3030KB
• amsf-ex3_2.htm (EX-3.2) — 202KB
• amsf-ex31_1.htm (EX-31.1) — 13KB
• amsf-ex31_2.htm (EX-31.2) — 13KB
• amsf-ex32_1.htm (EX-32.1) — 14KB
• 0001193125-25-258532.txt ( ) — 12013KB
• amsf-20250930.xsd (EX-101.SCH) — 974KB
• amsf-20250930_htm.xml (XML) — 2938KB

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS 3

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Item 1

Financial Statements

Financial Statements 4 Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 23 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 29 Item 4

Controls and Procedures

Controls and Procedures 29

- OTHER INFORMATION

PART II - OTHER INFORMATION Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 30 Item 5 Other Information 31 Item 6 Exhibits 33 2 FORWARD-LOOKI NG STATEMENTS This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934. Forward-looking statements are all statements other than statements of historical facts. You should not place undue reliance on these statements. These forward-looking statements include statements that reflect the current views of our senior management with respect to our financial performance and future events with respect to our business and the insurance industry in general. Statements that include the words "expect," "intend," "plan," "believe," "project," "forecast," "estimate," "may," "should," "could," "to be," "anticipate" and similar statements of a future or forward-looking nature identify forward-looking statements. Forward-looking statements address matters that involve risks and uncertainties. Forward-looking statements are not guarantees of future performance. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those expressed or implied in these statements. We believe that these factors include, but are not limited to, the following: the cyclical nature of the workers' compensation insurance industry; increased competition on the basis of types of insurance offered, premium rates, coverage availability, payment terms, claims management, safety services, policy terms, overall financial strength, financial ratings and reputation; changes in relationships with independent agencies (including retail and wholesale brokers and agents); general economic conditions, including recession, inflation, performance of financial markets, interest rates, unemployment rates, fluctuating asset values and global health pandemics; developments i

- FINANCI AL INFORMATION

PART I - FINANCI AL INFORMATION

Financi al Statements

Item 1. Financi al Statements. AMERISAFE, INC. AND SUBSIDIARIES CONSOLIDA TED BALANCE SHEETS (in thousands, except share data) September 30, 2025 December 31, 2024 (unaudited) Assets Investments: Fixed maturity securities—held-to-maturity, at amortized cost net of allowance for credit losses of $ 80 and $ 116 in 2025 and 2024, respectively, (fair value $ 364,386 and $ 399,721 in 2025 and 2024, respectively) $ 372,018 $ 413,061 Fixed maturity securities—available-for-sale, at fair value (amortized cost $ 319,255 , allowance for credit losses of $ 0 in 2025 and amortized cost $ 318,975 , allowance for credit losses of $ 0 in 2024) 314,604 307,750 Equity securities, at fair value (cost $ 31,164 and $ 36,020 in 2025 and 2024, respectively) 56,568 58,629 Short-term investments 19,090 9,338 Total investments 762,280 788,778 Cash and cash equivalents 54,747 44,045 Amounts recoverable from reinsurers (net of allowance for credit losses of $ 281 and $ 300 in 2025 and 2024, respectively) 113,918 117,019 Premiums receivable (net of allowance for credit losses of $ 3,838 and $ 4,238 in 2025 and 2024, respectively) 167,882 142,659 Deferred income taxes 18,854 19,448 Accrued interest receivable 7,632 7,327 Property and equipment, net 7,270 5,887 Deferred policy acquisition costs 21,758 19,151 Federal income tax recoverable 2,867 2,180 Other assets 7,736 11,297 Total assets $ 1,164,944 $ 1,157,791 Liabilities and shareholders' equity Liabilities: Reserves for loss and loss adjustment expenses $ 617,860 $ 651,309 Unearned premiums 143,575 121,926 Amounts held for others 37,868 38,657 Policyholder deposits 33,797 33,867 Insurance-related assessments 17,436 14,852 Accounts payable and other liabilities 39,635 38,409 Payable for investments purchased — 1,430 Total liabilities 890,171 900,450 Shareholders' equity

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