Oct 29, 2026 earnings call — Underwriting profit recovery and workers' comp expansion
Reported net income of $0.64 per diluted share and loss and LAE ratio improved to 71.2%.
Revenue $0.2B (est $0.2B) · EPS $0.71 (est $0.59)
Key quotes
"Our third quarter results reflect the progress we're making to restore our underwriting profitability to historical levels."
"As you mentioned, we started at the end of last year, and we expect that to roll through the entire book within the fourth quarter of this year."
"We expect this new tool will allow our claims team to redeploy more than 50,000 hours over three years, with the efficiency ultimately benefiting our insureds, their injured workers, and the company."
Analyst Q&A 3
Re-underwriting timing and claim trends
Q (Mark Hughes · Truist): He asked when the re-underwriting will be largely finished and when top-line revenues might stabilize. He also asked about claim frequency trends, audit and cancellation activity, and whether commissions are rising and affecting win rates.
A: They expect the re-underwriting to roll through the entire book within the fourth quarter of this year, and that premiums should stabilize as those policies non-renew or are canceled. Countrywide frequency is declining driven by declines outside California, while California frequency has increased in recent accident years driven by cumulative trauma. Audit pickup and accruals are stable with an audit accrual of about $23 million and $2.3 million of non-compliance premium recognized this quarter; cancellations are relatively flat, but submissions and quotes are up, and there is upward pressure on commissions for new business.
"As you mentioned, we started at the end of last year, and we expect that to roll through the entire book within the fourth quarter of this year." — Kathy Antonello (CEO)
Audits and minimum wage impact
Q (Karol Chmiel · Citizens): He asked whether higher minimum wages and cost-of-living pressures are creating future audit issues, and whether the company is discussing this with clients.
A: They watch the macro picture but have not had specific client conversations because their book is made of small accounts. They are not seeing anything now that would change their audit pickup and say things are fairly stable month to month, not like the large payroll increases seen after the pandemic.
"Not seeing anything right now that would change what I feel like is our audit pickup in the future." — Kathy Antonello (CEO)
Where frequency and severity are rising
Q (Justin · Barclays): He asked whether any industries, claim types, or worker groups are showing rising frequency or slower declines. He also asked if higher healthcare costs are pushing costs into workers' comp.
A: The most elevated frequency and the largest increases over the last two to three years are California cumulative trauma. They have moved into excess workers' compensation to diversify and can write larger insureds with self-insured retentions; they were approved to write excess workers' comp in California and expect that book to be less impacted by frequency increases. Severity is generally steady or lower; there are early indications of pressure in accident year 2026 outside California driven by a few large losses, pharmaceutical costs are up slightly versus pre-pandemic but the company is not seeing a broad impact on its book.
"For us, and I'm talking about our guaranteed cost workers' compensation book, the area where we're seeing the most elevated frequency, and over the last two to three years, the largest increase in frequency has been California cumulative trauma." — Kathy Antonello (CEO)