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Good day, and welcome to AMERISAFE, Inc.'s fourth quarter 2025 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Kathryn Housh Shirley. Please go ahead, ma'am.

Thank you, operator, and good morning, everyone. Welcome to the AMERISAFE, Inc. fourth quarter 2025 investor call. If you have not received the earnings release, it is available on our website at amerisafe.com. This call is being recorded. A replay of today's call will be available. Details on how to access the replay are in the earnings release. During this call, we will be making forward-looking statements intended to fall within the safe harbor provided by the securities laws. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Actual results may differ materially from the results expressed or implied in these statements if the underlying assumptions prove to be incorrect or as a result of risks, uncertainties, and other factors, including factors discussed in the earnings release, the comments made during today's call, and in the Risk Factors section of our Form 10-Ks, Form 10-Qs, and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement. I will now turn the call over to Janelle Frost, AMERISAFE, Inc.'s President and CEO.

Thank you, Kathryn. Good morning, everyone. We are pleased to close out 2025 with a strong ROE of 18.5% and a combined ratio of 91.3%. These returns are hard fought in a competitive environment. We are in a prolonged soft market with workers' compensation carriers facing 12 consecutive years of rate decline. Under those constraints, understanding risk, pricing them appropriately, and managing the cost of claims are essential to sustained underwriting profitability. At AMERISAFE, Inc., our specialized underwriting for niche industries, our focus on safety services for our policyholders, and personalized claims management are producing consistent returns and are also why we are noted as a disciplined underwriter. I will now turn the call over to Vincent to share the success of our incremental growth strategy.

Thank you, Janelle, and good morning. In 2025, gross premium written grew 11.7% compared to 3.9% growth in 2024. This is our seventh consecutive quarter of top-line growth. For the full year, GPW increased 6.7%. Voluntary premium, the primary component of GPW, increased 10.5% in the quarter and 10.2% for the full year, compared to 4.6% in 2024. This growth is across states and classes, and most importantly, within our existing geographical footprint and risk appetite. As we have discussed in numerous prior quarters, our focused efforts on deepening relationships with the right agents who target our classes and recognize our value proposition continue to fuel increased new business opportunities despite steady competition. And our commitment to servicing our policyholders with outstanding safety and claims services support strong renewal retention in both policy count and premiums. Retention for policies for which we offered renewal was 93.7% for the quarter, which we feel is a very strong result in this competitive environment. Renewal retention, along with the new business growth, increased in-force policy count by 10.2% for the year. Audit premium and adjustments, another important component of GPW, remains positive, adding $3,500,000 in the quarter compared to $2,500,000 in 2024. For the full year, audit premium and adjustments contributed $12,600,000 to GPW, compared to $20,200,000 in 2024. The year-over-year audit premium decrease is consistent with the recent moderating trend as expected and discussed in prior quarters. The sustained growth in GPW is beginning to meaningfully reflect in net premium earned, which was $73,600,000 in the quarter and $283,000,000 for the year, growing 10.7% and 4.6%, respectively. Turning briefly to components of premium, payroll growth remains positive in our classes of business, with the majority continuing to come from wage growth, which was 6.1% in the fourth quarter and consistent with recent prior quarter's trend. Wage growth is a tailwind for premium growth. Meanwhile, filed rates continue to see downward pressure. Though the average rate of decline has been decreasing overall, we still expect rate change to be in the negative mid-single-digit range based upon 2026 filings to date. That concludes the overview of premium results. I will hand the call back to Janelle for more information on claims and other financial metrics.

Thank you, Vincent. Turning back to my CFO days, allow me to share the details of our claims and other pertinent financial results. The current accident year loss ratio was 72% for the full year, which is an increase from 71% in the first three quarters and from the previous year. Last quarter on this call, we discussed the upward pressure on the loss ratio from continued rate pressure. In addition, severity is up. We ended the accident year with 25 claims with incurred values over $1,000,000 compared to 18 at the end of accident year 2024. I do not think it is shocking when looking at absolute dollars that the cost of claims continues to increase and that more claims reach the $1,000,000 threshold. Nonetheless, severity is up and we adjusted our accident year loss ratio accordingly. As for prior accident years, we had $7,600,000 of favorable development in the quarter, or a favorable 10.4%, and $33,900,000 of favorable development for the full year, or a favorable 12%. Combined with the current accident year, we reported a loss ratio of 64.5% for the quarter and 60% for the year, compared to 56.4% and 58.1%, respectively, in 2024. To round out the combined ratio, the expense ratio was 29.2% for the quarter and 30.4% for the full year. Our total underwriting and other expenses were $21,500,000. We improved operating scale in the quarter as net earned premium increased with our growth strategy. During 2025, net income was $10,400,000, or $0.55 per diluted share, and operating net income was $9,800,000, or $0.51 per diluted share. For the full year, net income was $47,100,000, and net operating income was $41,800,000, compared to $55,400,000 and $48,400,000, respectively, in 2024. Our effective tax rate for the full year was 19.9%, compared to 19.7% from the prior year. Turning to our investment portfolios, net investment income increased 2.5% to $77,100,000 in the fourth quarter and decreased 7.6% to $27,000,000 for the full year. For the quarter, the yield on new investments increased, driving our tax-equivalent book yield to 3.83%, or three basis points higher than 2024. The investment portfolio is high quality, carrying an average AA- credit rating, with a duration of 4.3 years. The composition of the portfolio is 60% municipal, 21% corporate bonds, 3% U.S. Treasuries and agencies, 8% equities, and 8% in cash and other investments. Approximately 44% of our bond portfolio is comprised of held-to-maturity securities, and the net unrealized loss was $5,500,000 at quarter end. As a reminder, held-to-maturity securities are carried at amortized cost; therefore, unrealized gains and losses on these securities are not reflected in our book value. Our capital position is strong with a high-quality balance sheet, solid reserve position, and conservative investment portfolio. At quarter end, AMERISAFE, Inc. carried roughly $797,000,000 of cash and invested assets. Finally, just a couple of other topics. Book value per share was $13.39 after paying a special dividend in December 2025. We will file our Form 10-K on Friday, February 27, 2026, after market. With that, I will open the call up for questions and answers. Operator?

Thank you. We will now open for questions. Once again, that is star one if you would like to ask a question. We will now take our first question from Matthew Carletti with Citizens.

Thanks. Good morning, Janelle.

Good morning, Matt.

Let's see. Maybe let us start with what you are observing with frequency and severity. Can you just help us with, you know, I know these sorts of claims can be pretty lumpy at times. So was there a frequency that took place towards the end of the year, or was this a little bit more over the year? And then as you look at those, say, 25 claims, are there similarities within them that you noticed, or were they pretty broad spread across, whether it be areas of your book or injury types, that sort of stuff?

Yeah. So I will start with let us talk about overall frequency for a moment. So we obviously had, Mhmm, I think a 7.8% increase in reported claims in 2025. Now compare that to, as Vincent mentioned, policy growth of 10.2%. So frequency is right on par with what we expect it to be for the overall book. To your point about the 25 claims, yeah, I would call that a frequency of severity. So, 25 claims, as you mentioned, that can be lumpy. I can say about those 25 claims, if you look at the average severity of those claims, it is actually lower than 2025 was, even though 2025 only had 18 claims. The claims are consistent in terms of, if I look at the cause of loss or even the industry groups which the claims came from, it very much mirrors the entire book. So there was not something specific to a particular class or type of injury that made those claims stand out more so than the rest of our book of business. As I mentioned in my prepared remarks, sometimes we think about, we have always used $1,000,000 as our threshold, right, in reporting those claims, but, you know, obviously, over the years, as medical severity upticks or just severity overall upticks year over year over year, the $1,000,000 in 2025 is not the same as $1,000,000 in 2022, for example. Yeah. We like to keep that measure consistent just so we can compare it. But nonetheless, there were 25. I consider that a frequency of severity enough that we felt like it was appropriate to take the loss ratio up a point.

That makes sense. Maybe I can just switch to the growth for a minute, which was great. Can you just give us a little more color on, I mean, you have talked a bit in the past about a very concerted effort that you are making in terms of driving that growth. Are there particular areas in the book that you are seeing particular success, or is it more broad-based across the book and, you know, whether that be geographies, areas of exposure, however you want to look at it?

Yes. We are excited because the growth that we are seeing is across the book. You know, I mentioned we are going to file the 10-K on Friday. When you see the 10-K, you will notice the industry classes. There is not a lot of shift in the mix there in terms of, Mhmm, you know, 47% of our book is still construction, followed by trucking, logging, lumber, agriculture. No real shifts there. If you look at the top 10 states, I think if you compare 2024 and 2025, I think the top 10 are still the same states. There may be a little shift in the five, six, and seven spots. But all in all, the top 10 states are exactly the same. Vince, do you want to add anything about industry groups or states?

Yeah, sure. Janelle mentioned 10-Ks being released Friday. The industry groups we report on—construction, trucking, logging, agriculture, manufacturing—those are internal groupings of classifications. There is a grouping that is going to show up in the 10-K this year called services. We consider that ancillary to our primary industries. It has historically been in the, I call it, the dreaded “other” category of premium. But there has been enough growth in the underlying components of that in the last couple of years to warrant breaking that out of “other.” So services are going to appear on the list. It is not because there has necessarily been shocking growth, but it is an area we are having success in. We have also had a little bit of increased success in the agriculture space. And part of that is dependent upon individual states where we are seeing growth.

Yeah. So, for example, Vincent mentioned we are going to have that services line. It went from 5.3% of the book in 2024 to 5.8%, so not a significant change. Whereas agriculture did go from 6% to 7.3% of the book.

Okay. Okay. That is helpful. One last one, if I could. Maybe, Janelle, I will ask you to put your CFO hat back on.

Awesome.

Just on the favorable development you saw in the quarter, any color you can give on accident years or what drove it? Was it just claims closures or something else?

Yes. No. It is closing and settling claims. So the accident years were roughly $500,000 in 2022, $1,000,000 in 2021, and then 2020 and prior with the remainder—$6.9 million to add back.

Very helpful. Thank you so much.

Thank you.

We will now take our next question from Mark Hughes with Truist.

Yes, thanks. Good morning.

Good morning, Mark.

Janelle, is it fair to say the uptick in the current accident year, it is essentially you got more large claims than you had expected or was assumed in your 71% loss number, but it is just normal volatility?

Yeah. It is definitely, I would say, an increase in frequency of severity, enough that we felt moving the loss ratio was the appropriate measure.

Yeah. So, when we think about 2026, if it was just kind of a tough year, it is lumpy. You have always made that point. And every time you have had a lump, it has always dropped back down.

Mhmm.

So what is the 2026 loss pick? Back to 71?

Great question. I do not know exactly what lies in 2026 as of yet. But I will say this, and we talked about it on the call last quarter as well. There is pressure. There was pressure on that 71. And then having that frequency and severity is what pushed us toward, hey, let us move this up to 72. And as Vincent mentioned in his prepared remarks, the loss costs, the underlying loss costs, are still mid-single digit. That adds pressure to that loss ratio. At this point, I am inclined with the 72 to keep the 72 for 2026.

And then the favorable development, it was down a little bit year over year relative to earned premium. You had been running kind of steady year over year heretofore. Was that influenced by this frequency and severity issue, or was this just kind of a maybe changed your mindset a little bit, or was this—

No. Good. No. Very good point. That is not related to the frequency of severity in 2025. That is just simply the claims that we closed or settled in that particular quarter, which also can sometimes be lumpy. But no, not related to the large claims for 2025.

So you would not necessarily ascribe any meaning to that little variability?

Yeah. Which I would expect. I guess the other—That is not unexpected in my mind.

Okay. Yeah. The alternative being you have had great reserve development, and maybe it is just not as easy as it used to be, so to speak.

Nothing has changed in our reserving practices. And, you know, I always like to—I think I say this on every call just because it is so essential to who we are as a company. We rely heavily on those case reserves. And nothing has changed in the reserving practices that establishes those case reserves.

Any observations about underlying medical inflation? I think you said the 25 claims were actually lower severity even though above $1,000,000. Is there some more medical involvement that has bumped more over a million?

Yeah. Certainly, the medical inflation or the medical pressure that we see are the same ones we have talked about on the last two calls. Home health—again, the severity of the injuries that we deal with—there is normally a home health component of some kind with these claims. There is still a tremendous amount of cost pressure for home health. And then DME, which for us is, I am thinking more in terms of prosthetics. So, obviously, we unfortunately have a lot of amputees or people that require prosthetics. And the cost of prosthetics is certainly under pressure.

Yeah, very good. Any inflections, though—nothing obvious around medical inflation—the sustained pressure, but—

I wish. I wish that were the case, but no. And when I say I wish, I wish it were easing on the medical side, but I do not see that happening. Nothing on a macro basis that would be moving that needle.

Yeah. And competition—I think you said relatively steady.

Yeah, Mark. I would say that is a fair description of it.

And then evergreen question about the next construction job. They are important for your policyholders. Anything change there?

No. The individual economies, if I want to term it that way, for the industries that we insure seem to be holding up well. You know, Vince mentioned the wage growth numbers that we are seeing—it is higher than the national average. So I feel like that speaks well to the jobs being there. They have the employees that they need because we are not really seeing an uptick in employee count. So that bodes well, I think, for our insured base.

Then how about anything on the sustainability of growth? I think you have put some new initiatives in place. You have been building your distribution network. I think in some cases, you have been experimenting or pushing a little bit more with renewal premium and getting some very satisfactory results. Are we going to be lapping any of that stuff such that this really nice period of strong growth may be less achievable in 2026, or is there sustained momentum?

Mark, I will jump in on that. You have hit on the cornerstones of the growth efforts—the increased effectiveness with agencies. I will expand on that specifically. In the last four years, we have reduced our contracted agency count by over a third, but yet we are getting more opportunities and more binds. And I think that speaks to evidence of that effectiveness in terms of improving those relationships. On the processing side and operations, we are just really executing well on all of our fundamentals. The collaboration we have spoken about in past calls between sales, safety, and underwriting is operating at a high, I would say, sustainable level. We still have competition to deal with. But to the extent we are in control of the opportunities coming in and our ability to convert them, I think the trend is sustainable.

Okay. Appreciate that. Thank you.

You are welcome. As a reminder, we will now take a question from Robert Edward Farnam with Breen Capital.

Hey there, and good morning. I just have one topic I want to talk about, and it is undocumented workers. So, looking at your class codes, you think, alright, there may be some proportion of the employees that you are insuring who are undocumented. I am not sure if that proportion has changed over the last year or so. I am just trying to get a feel for if that is the case and if there are more documented workers and fewer undocumented workers, do you foresee any change in claims patterns because of that?

Yes. Let me think about—let me talk about it from the premium side, the employee count side. We have not seen any shift that we can account for or that we can point to and say, that is because of undocumented workers. So no major change there. As Vincent mentioned, our agriculture book actually grew in 2025. From a claims perspective, it is quite interesting. Obviously, we know we have claimants that are undocumented workers. As far as how we handle that claim, how we address that claim, how we try to close and settle that claim—no different than any other claim in our book of business. What we do find is that, on occasion, when it is an undocumented worker and they have a desire to return to their home country, that can actually accelerate maybe a little bit in terms of being able to close or settle that claim. But all in all, undocumented workers I would consider to be awash in terms of, are we collecting the premium for their payrolls? I believe the answer is yes. Has that changed for us, given everything that is happening and what we read in the national news? I would say no. And it does not change our approach in terms of how we handle the claim.

Okay. Great. I just wanted some color on that, and that works for me. Thanks.

Yes. It is a great question. Definitely something that we are monitoring to see if it can be impactful to the book. But as of 2025 and where I sit today, I can say no. It is not impactful.

Great. Thank you.

Thank you, Robert. It appears there are no further telephone questions. I would like to hand the conference back to Ms. Frost for any additional or closing comments.

AMERISAFE, Inc. is well positioned to sustain our growth into opportunity in underwriting profitability by relying on our expertise in turning risk. Thank you for joining us today.