On Jun 26, 2015, shares of Amerisafe, Inc. AMSF scaled a new 52-week high of $48.45 on the back of strong premium growth capacities that boosted underwriting results.
Amerisafe’s one-year return of 32.57% was significantly higher than that of other industry players like The Travelers Companies, Inc. TRV, Markel Corp. MKL and Employers Holdings, Inc. EIG that recorded returns of 7.46%, 26.69% and 17.48%, respectively.
Amerisafe has a strong premium growth capacity. The company is able to generate more investment income from its premiums than insurance companies that operate in several other lines of business. This is because the time period between the receipt of premiums and the ultimate settlement of claims is much longer for the company than others. This is largely attributable to the nature of its product lines.
Amerisafe’s strong underwriting results are reflected in its steady operating performance, stemming from prudent management practices, favorable frequency trends, better product pricing and demand structure, effective loss control, safety measures and an active claims management system.
Higher premiums paid by the policyholders along with Amerisafe’s strategy of employing a proactive and disciplined approach in underwriting capabilities as well as prudent capital management have been contributing to the consistent favorable growth of book value per share. Other significant growth measures such as return on equity (ROE), combined ratio and net loss ratio have also been witnessing consistent and noticeable improvement, thereby substantially improving the operating margin and bottom line.
In Apr 2015, the company reported first quarter 2015 earnings that surpassed the Zacks Consensus Estimate and improved year over year on solid underwriting results.
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