Employers' earnings decline as fewer need its coverage

Slumping payrolls in Nevada, California and elsewhere in the nation continue to pressure Reno's Employers Holdings Inc.

The workers compensation carrier said last week it earned $30.6 million in the third quarter, down 7.5 percent from the $33.1 million it earned a year earlier.

Martin Welch, chief operating officer of Employers, said the company saw its number of policies decline by 921 in Nevada since the start of the year. It also lost 363 policies in Florida, another of its major markets.

Those losses were partially offset, Welch said, by growth in the Midwest and Southeast, particularly Illinois and Georgia. Tennessee also has shown signs of recovery in recent weeks.

Douglas Dirks, Employers' president and chief executive officer, said the recession continues to take a toll on the Main Street small businesses that are the core market for his company.

"We continue to operate in a very difficult environment," Dirks said. "The pace of recovery remains uncertain, and we believe that employment will continue to be negatively impacted in the near-term."

Stripping away effects of the company's acquisition of AMCOMP, a Florida workers comp carriers in late 2008, the premiums earned by Employers would have been nearly 21 percent lower than a year ago. Its premiums in Nevada fell 46 percent from last year's level.

Dirks said the weak business climate puts the spotlight on continued efforts to control Employers' overhead costs.

The company earned 5.6 percent on its investment portfolio that stood at $2.1 billion at the end of the quarter. That generated income of $22.3 million during the third quarter.

The company's board last week authorized repurchase of up to $50 million in Employers' publicly traded common stock during 2010. The board also declared a dividend of 6 cents a share, payable Dec. 2 to shareholders of record Nov. 18.