Employers Holdings Inc. is beginning to see growth for its workers compensation coverage from employers in the Midwest.
Now the Reno-based company wishes it could see similar strengths in the three markets where it has the largest presence Nevada, California and Florida. The trio of states, which together account for nearly 60 percent of Employers' business, have been among the hardest hit by the recession.
And market conditions vary from one city to the next. The company has been doing well in Nashville, said Douglas Dirks, president and chief executive officer of Employers, while Charlotte, N.C., has suffered from cutbacks in employment at big financial services companies such as Wachovia.
"This clearly is not a monolithic recession that we are in," said Dirks.
He said the company's results are promising in the Midwest, partly because of strong broker relationships that came with its acquisition in late 2008 of AmCOMP, a Florida-based workers comp carrier.
Employers, which now sells coverage in 30 states, bought AmCOMP as part of a drive to diversify geographically. Wisconsin, for instance, now accounts for about 7 percent of its business.
In Nevada, where Employers got its start when the state workers compensation was privatized nearly a decade ago, the amount of workers compensation premiums generated by the company declined by $3.8 million during the second quarter compared with a year earlier.
As companies reduce their workforces, the amount they pay in workers compensation premiums declines. Restaurants and retailers, two industries in which Employers has specialized, have been those that have struggled during the downturn.
California, which accounts for about 45 percent of Employers' business, posted a $9.1 million decline in premiums from a year earlier.
Dirks said competitive conditions for new business in California are fierce as other insurers are cutting prices and offering sweetened commissions to insurance brokers. In the second quarter, Employers Holdings earned $20.3 million compared with $27.4 million in the same period a year earlier. Revenues for the quarter were $127 million compared with $92.6 million in last year's second quarter.
Investment income contributed $23 million to the company's revenues during the second quarter. Employers generated a 5.6 percent return (on a tax-equivalent basis) on its $2.1 billion in invested assets.
Dirks said the company continues to tighten down on its costs, and it's beginning to see the end of the expenses involved with consolidating AmCOMP into Employers. Those costs ran $2.9 million in the second quarter.
With the consolidation of the two companies' headquarters operations, Employers' staff at its South Meadows headquarters totals about 200.
