Business Wire | Oct 28, 2021 04:16PM EDT

Employers Holdings, Inc. Reports Third Quarter 2021 Results; Declares Fourth Quarter 2021 Cash Dividend of $0.25 per Share

Oct. 28, 2021

RENO, Nev.--(BUSINESS WIRE)--Oct. 28, 2021--Employers Holdings, Inc. (the "Company") (NYSE:EIG), a holding company with subsidiaries that are specialty providers of workers' compensation insurance and services focused on select, small businesses engaged in low-to-medium hazard industries, today reported financial results for its third quarter ended September 30, 2021.

Financial Highlights

* Record number of ending policies in-force (109,870), up 6% since year-end; * Gross premiums written were $152.3 million, up 16% year-over-year; * Net premiums earned of $147.1 million, up 2% year-over-year; * Net income of $15.0 million, or $0.53 per diluted share; * Adjusted net income of $11.6 million, or $0.41 per diluted share; * The Company repurchased 327,402 shares of its common stock at an average price of $40.54 per share;

Management Commentary

Chief Executive Officer Katherine Antonello commented: "We closed the quarter with yet another record number of policies in-force and our written premiums, which were up 16% year-over-year, were the highest they have been since the first quarter of 2020. To recognize the positive shift we are experiencing in audits, we increased our final audit accruals by $4.7 million during the quarter. In addition, October premium writings are off to a very strong start, a sign that small businesses are beginning to thrive and are actively shopping for workers' compensation coverage.

We maintained our current accident year loss and LAE ratio on voluntary business at 63.6%, down from 65.5% a year ago. Indemnity claim frequency continues to be down in recent periods while indemnity claim severity remains moderate. As part of our continued technology and process improvements initiative, we implemented a new comprehensive claims system during the quarter which we believe has enhanced and streamlined our claims handling processes. In connection with this implementation, we undertook several process changes and, as a result, we chose not to recognize any prior year loss reserve development during the quarter.

Our underwriting and administrative expenses of $37.4 million were down 19% from a year ago. The decrease was primarily a result of targeted expense savings, mainly in the areas of compensation and professional fees."

Ms. Antonello continued, "Our Cerity operating segment, which offers digital workers' compensation insurance solutions directly to consumers, continues to grow while remaining within our targeted low hazard groups. We believe that Cerity's technological and intellectual capabilities will support our future growth initiatives and provide direct access to workers' compensation insurance for businesses seeking an online experience.

To capitalize on emerging labor market improvements, we recently expanded our underwriting appetite at both Employers and Cerity to include additional classes of business within our targeted hazard group mix. We remain committed to maintaining the highest level of underwriting discipline and to aggressively managing our expenses within our Employers and Cerity segments. Our balance sheet and capital position are very strong and are highly supportive of these key initiatives."

Summary ofThird Quarter 2021 Results

(All comparisons vs. third quarter 2020, unless noted otherwise).

Gross premiums written were $152.3 million, an increase of 16%. The increase was primarily due to an increase in new policies written. Net premiums earned were $147.1 million, an increase of 2%.

Losses and loss adjustment expenses were $91.2 million, an increase of 18%. The Company did not recognize any prior year loss reserve development on voluntary business during the current period, versus $14.8 million of net favorable development recognized a year ago.

Commission expenses were $19.9 million, an increase of 3%. The increase was primarily the result of increased commissions on new business writings.

Underwriting and general and administrative expenses were $37.4 million, a decrease of 19%. The decrease resulted from targeted expense savings and employee reductions and departures, which reduced our fixed expenses such as compensation and professional fees, as well as a reduction in bad debt expenses.

Net investment income was $18.4 million, largely unchanged from a year ago.

Income tax expense was $3.6 million (19% effective rate) versus $7.2 million (19% effective rate). The effective rates during each of the periods presented included income tax benefits and exclusions associated with tax-advantaged investment income, LPT adjustments, and deferred gain amortization.

The Company's book value per share of $42.55 and book value per share including the Deferred Gain of $46.81 each increased by less than one percent during the third quarter of 2021, respectively, computed after taking into account dividends declared. These measures were impacted during the current period by $8.8 million of after-tax unrealized losses arising from fixed maturity securities (which are reflected on the balance sheet) and $1.4 million of net after tax unrealized gains arising from equity securities and other investments (which are reflected on the income statement).

Summary of Results by Segment

(see page 14 of the Financial Supplement for a description of our reportable segments. All comparisons vs. third quarter 2020, unless noted otherwise).

Employers Segment

The Employers segment reported net income before income taxes of $22.4 million versus $42.8 million.

Highlights include the following:

- Underwriting income of $2.8 million versus $6.9 million;

- Combined ratio of 98.1% versus 95.2%;

- Current accident year loss and LAE ratio of 63.4% versus 65.3%;

- Calendar year loss and LAE ratio of 63.4% versus 55.1%;

- Commission expense ratio of 13.5% versus 13.4%;

- Underwriting expense ratio of 21.2% versus 26.7%;

- Net investment income of $17.5 million in each period; and

- Net realized and unrealized gains on investments recorded through the income statement of $3.1 million versus $19.2 million.

Cerity Segment

The Cerity segment reported a net loss before income taxes of $2.7 million versus $3.2 million, and an underwriting loss of $3.3 million versus $3.9 million.

Highlights include the following:

- Written premium of $0.3 million versus $0.1 million;

- Net investment income of $0.7 million versus $0.8 million;

- Net realized and unrealized losses on investments recorded through the income statement of $0.1 million in each period; and

- Underwriting expenses of $3.3 million versus $3.8 million.

Corporate and Other

Corporate and Other activities reported a net loss before income taxes of $1.1 million versus $1.3 million.

Highlights include the following:

- LPT amortization, which served to reduce losses and LAE, of $2.1 million versus $2.5 million;

- Net investment income of $0.2 million in each period;

- Net realized and unrealized losses on investments recorded through the income statement of $0.3 million versus zero; and

- General and administrative expenses of $3.0 million versus $4.0 million.

Share Repurchases and Fourth Quarter 2021 Dividend Declaration

During the third quarter of 2021, the Company repurchased 327,402 shares of its common stock at an average price of $40.54 per share.

On October 27, 2021, the Board of Directors declared a fourth quarter 2021 dividend of $0.25 per share. The dividend is payable on November 24, 2021 to stockholders of record as of November 10, 2021.

Earnings Conference Call and Webcast

The Company will host a conference call on Friday, October 29, 2021, at 11:00 a.m. Eastern Daylight Time / 8:00 a.m. Pacific Daylight Time.

To participate in the live conference call by telephone, dial +1 (888) 364-8443 or +1 (484) 747-6630 and use the conference call access code 8886980.

The webcast will be accessible on the Company's web site at www.employers.com through the "Investors" link. An archived version of the webcast will remain on the Company's web site for up to seven days following the live call. To listen to a recording of the call by telephone, dial +1 (855) 859-2056 or +1 (404) 537-3406 and use the conference call access code 8886980.

Reconciliation of Non-GAAP Financial Measures to GAAP

The information in this press release should be read in conjunction with the Financial Supplement that is attached to this press release and is available on our website.

Within this earnings release we present various financial measures, some of which are "Non-GAAP financial measures" as defined in Regulation G pursuant to Section 401 of the Sarbanes - Oxley Act of 2002. A description of these Non-GAAP financial measures, as well as a reconciliation of such Non-GAAP measures to our most directly comparable GAAP financial measures is included in the attached Financial Supplement. Management believes that these Non-GAAP measures are important to the Company's investors, analysts and other interested parties who benefit from having an objective and consistent basis for comparison with other companies within our industry. Management further believes that these measures are more relevant than comparable GAAP measures in evaluating our financial performance.

Forward-Looking Statements

In this press release, the Company and its management discuss and make statements based on currently available information regarding their intentions, beliefs, current expectations, and projections of, among other things, the Company's future performance, including the effects of the Coronavirus (COVID-19) pandemic, business growth, retention rates, loss costs, claim trends and the impact of key business initiatives, future technologies and planned investments. Certain of these statements may constitute "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and are often identified by words such as "may," "will," "could," "would," "should," "expect," "plan," "anticipate," "target," "project," "intend," "believe," "estimate," "predict," "potential," "pro forma," "seek," "likely," or "continue," or other comparable terminology and their negatives. The Company and its management caution investors that such forward-looking statements are not guarantees of future performance. Risks and uncertainties are inherent in the Company's future performance. Factors that could cause the Company's actual results to differ materially from those indicated by such forward-looking statements include, among other things, those discussed or identified from time to time in the Company's public filings with the U.S. Securities and Exchange Commission (the "SEC"), including the risks detailed in the Company's Quarterly Reports on Form 10-Q and the Company's Annual Reports on Form 10-K. Except as required by applicable securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Filings with the SEC

The Company's filings with the SEC and its quarterly investor presentations can be accessed through the "Investors" link on the Company's website, www.employers.com. The Company's filings with the SEC can also be accessed through the SEC's EDGAR Database at www.sec.gov (EDGAR CIK No. 0001379041).

About Employers Holdings, Inc.

EMPLOYERS(r) and America's small business insurance specialist(r) are registered trademarks of EIG Services, Inc. Employers Holdings, Inc. is a holding company with subsidiaries that are specialty providers of workers' compensation insurance and services focused on select, small businesses engaged in low-to-medium hazard industries. The Company operates throughout the United States, with the exception of four states that are served exclusively by their state funds. Insurance is offered through Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, Employers Assurance Company and Cerity Insurance Company, all rated A- (Excellent) by the A.M. Best Company. Not all companies do business in all jurisdictions. See www.employers.com and www.cerity.com for coverage availability.

Employers Holdings, Inc.Third Quarter 2021 Financial Supplement

EMPLOYERS HOLDINGS, INC.Table of Contents

Page



1 Consolidated Financial Highlights



2 Summary Consolidated Balance Sheets



3 Summary Consolidated Income Statements



4 Net Income Before Income Taxes by Segment



8 Return on Equity



9 Roll-forward of Unpaid Losses and LAE



10 Consolidated Investment Portfolio



11 Book Value Per Share



12 Earnings Per Share



13 Non-GAAP Financial Measures



14 Description of Reportable Segments

EMPLOYERS HOLDINGS, INC.Consolidated Financial Highlights (unaudited)$ in millions, except per share amounts





Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 % 2021 2020 % change change

Selectedfinancial highlights:

Grosspremiums $ 152.3 $ 131.3 16 % $ 447.7 $ 456.2 (2) %written

Net premiums 149.8 129.6 16 442.7 452.0 (2) written

Net premiums 147.1 144.4 2 418.0 463.8 (10) earned

Netinvestment 18.4 18.5 (1) 54.9 58.3 (6) income

Net incomebefore impact 12.9 28.6 (55) 58.4 48.4 21 of the LPT^(1)

Adjusted net 11.6 14.1 (18) 38.3 50.8 (25) income^(1)

Net incomebefore income 18.6 38.3 (51) 78.6 67.3 17 taxes

Net income 15.0 31.1 (52) 64.5 55.8 16

Comprehensive 5.6 37.8 (85) 27.8 102.2 (73) income

Total assets 3,801.5 3,985.1 (5)

Stockholders' 1,189.9 1,167.4 2 equity

Stockholders'equityincluding the 1,309.1 1,297.1 1 Deferred Gain^(2)

Adjustedstockholders' 1,230.7 1,185.4 4 equity^(2)

Annualizedadjustedreturn on 3.8 % 4.8 % (21) % 4.2 % 5.6 % (25) %stockholders'equity^(3)

Amounts per share:

Cashdividends $ 0.25 $ 0.25 - % $ 0.75 $ 0.75 - %declared pershare

Earnings perdiluted share 0.53 1.05 (50) 2.24 1.83 22 %^(4)

Earnings perdiluted sharebefore impact 0.45 0.97 (54) 2.03 1.59 28 %of the LPT^(4)

Adjustedearnings per 0.41 0.48 (15) 1.33 1.66 (20) diluted share^(4)

Book value 42.55 40.16 6 per share^(2)

Book valueper shareincluding the 46.81 44.62 5 Deferred Gain^(2)

Adjusted bookvalue per 44.01 40.78 8 share^(2)

Financialinformation by Segment^(5):

Net income(loss) before income taxes

Employers $ 22.4 $ 42.8 (48) % $ 91.6 $ 80.6 14

Cerity (2.7) (3.2) 16 (7.2) (9.9) 27

Corporate and (1.1) (1.3) (15) (5.8) (3.4) (71) Other



(1) See Page 3 for calculations and Page 13 for information regarding our useof Non-GAAP Financial Measures.

(2)^ See Page 11 for calculations and Page 13 for information regarding our useof Non-GAAP Financial Measures.

(3) See Page 8 for calculations and Page 13 for information regarding our useof Non-GAAP Financial Measures.

(4) See Page 12 for description and calculations and Page 13 for informationregarding our use of Non-GAAP Financial Measures.

(5) See Pages 4-7 for details and Page 14 for a description of our reportablesegments.

1

EMPLOYERS HOLDINGS, INC.Summary Consolidated Balance Sheets (unaudited)$ in millions, except per share amounts

September December 30, 31, 2021 2020

ASSETS

Investments, cash and cash equivalents $ 2,807.8 $ 2,917.8

Accrued investment income 17.0 15.3

Premiums receivable, net 250.8 232.1

Reinsurance recoverable, net of allowance, on paid 484.8 504.2 and unpaid losses and LAE

Deferred policy acquisition costs 46.4 43.2

Contingent commission receivable-LPT Agreement 13.4 13.4

Other assets 181.3 196.6

Total assets $ 3,801.5 $ 3,922.6



LIABILITIES

Unpaid losses and LAE $ 2,002.1 $ 2,069.4

Unearned premiums 317.4 299.1

Commissions and premium taxes payable 41.7 43.0

Deferred Gain 119.2 125.4

FHLB Advances^(1) - 20.0

Deferred income tax liability 7.3 15.5

Other liabilities 123.9 137.4

Total liabilities $ 2,611.6 $ 2,709.8



STOCKHOLDERS' EQUITY

Common stock and additional paid-in capital $ 409.1 $ 404.9

Retained earnings 1,290.8 1,247.9

Accumulated other comprehensive income, net 78.4 115.1

Treasury stock, at cost (588.4) (555.1)

Total stockholders' equity 1,189.9 1,212.8

Total liabilities and stockholders' equity $ 3,801.5 $ 3,922.6



Stockholders' equity including the Deferred Gain ^ $ 1,309.1 $ 1,338.2 (2)

Adjusted stockholders' equity ^(2) 1,230.7 1,223.1

Book value per share ^(2) $ 42.55 $ 42.46

Book value per share including the Deferred Gain^ 46.81 46.85 (2)

Adjusted book value per share ^(2) 44.01 42.82



(1) FHLB=Federal Home Loan Bank

(2) See Page 11 for calculations and Page 13 for information regarding our useof Non-GAAP Financial Measures.

2

EMPLOYERS HOLDINGS, INC.Summary Consolidated Income Statements (unaudited)$ in millions

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Revenues:

Net premiums earned $ 147.1 $ 144.4 $ 418.0 $ 463.8

Net investment income 18.4 18.5 54.9 58.3

Net realized and unrealized gains 2.7 19.1 29.6 (2.3) (losses) on investments^(1)

Other income (loss) 0.1 (0.1) 0.8 0.5

Total revenues 168.3 181.9 503.3 520.3

Expenses:

Losses and LAE incurred (91.2) (77.1) (244.5) (254.5)

Commission expense (19.9) (19.4) (54.7) (59.9)

Underwriting and general and (37.4) (46.4) (121.0) (137.9) administrative expenses

Interest and financing expenses (0.1) - (0.4) -

Other expenses (1.1) (0.7) (4.1) (0.7)

Total expenses (149.7) (143.6) (424.7) (453.0)

Net income before income taxes 18.6 38.3 78.6 67.3

Income tax expense (3.6) (7.2) (14.1) (11.5)

Net income 15.0 31.1 64.5 55.8

Unrealized AFS investment gains(losses) arising during the (8.8) 8.0 (33.8) 48.2 period, net of tax^(2)

Reclassification adjustment fornet realized AFS investment gains (0.6) (1.3) (2.9) (1.8) in net income, net of tax^(2)

Total comprehensive income $ 5.6 $ 37.8 $ 27.8 $ 102.2

Net income $ 15.0 $ 31.1 $ 64.5 $ 55.8

Amortization of the Deferred Gain (1.7) (2.0) (5.0) (6.1) - losses

Amortization of the Deferred Gain (0.4) (0.5) (1.1) (1.3) - contingent commission

Net income before impact of the 12.9 28.6 58.4 48.4 LPT Agreement ^(3)

Net realized and unrealized (2.7) (19.1) (29.6) 2.3 (gains) losses on investments

Severance costs and asset 1.1 0.7 4.1 0.7 impairment charges

Income tax expense (benefit)related to items excluded from 0.3 3.9 5.4 (0.6) Net income or loss

Adjusted net income $ 11.6 $ 14.1 $ 38.3 $ 50.8



(1) Includes unrealized gains (losses) on equity securities and otherinvestments of $3.9 million and $3.5 million for the three months endedSeptember 30, 2021 and 2020, respectively, and $11.3 million and $(24.1)million for the nine months ended September 30, 2021 and 2020, respectively.

(2) AFS = Available for Sale securities.

(3) See Page 13 regarding our use of Non-GAAP Financial Measures.

3

EMPLOYERS HOLDINGS, INC.Net Income Before Income Taxes by Segment ^(1) (unaudited)$ in millions

Corporate Employers Cerity and Consolidated Other

Three Months Ended September 30, 2021

Gross premiums written $ 152.0 $ 0.3 $ - $ 152.3

Net premiums written 149.5 0.3 - 149.8



Net premiums earned A 146.9 0.2 - 147.1

Net investment income 17.5 0.7 0.2 18.4

Net realized andunrealized gains 3.1 (0.1) (0.3) 2.7 (losses) oninvestments

Other income 0.1 - - 0.1

Total revenues 167.6 0.8 (0.1) 168.3



Losses and LAE B (93.1) (0.2) 2.1 (91.2) incurred ^(2)

Commission expense C (19.9) - - (19.9)

Underwriting andgeneral and D (31.1) (3.3) (3.0) (37.4) administrativeexpenses

Interest and financing - - (0.1) (0.1) expenses

Other expenses (1.1) - - (1.1)

Total expenses (145.2) (3.5) (1.0) (149.7)

Net income (loss) $ 22.4 $ (2.7) $ (1.1) $ 18.6 before income taxes



Underwriting income A+B+C+D 2.8 (3.3) (loss)



Loss and LAE expense ratio:

Current year 63.4 % n/m

Prior years - -

Loss and LAE ratio 63.4 n/m

Commission expense 13.5 n/m ratio

Underwriting expense 21.2 n/m ratio

Combined ratio 98.1 % n/m



n/m - not meaningful

(1) See Page 14 for adescription of our reportable segments

(2) Losses and LAE inCorporate and Other represent the impactof the LPT Agreement

4

EMPLOYERS HOLDINGS, INC.Net Income Before Income Taxes by Segment ^(1) (unaudited)$ in millions

Corporate Employers Cerity and Consolidated Other

Three Months Ended September 30, 2020

Gross premiums written $ 131.2 $ 0.1 $ - $ 131.3

Net premiums written 129.5 0.1 - 129.6



Net premiums earned A 144.4 - - 144.4

Net investment income 17.5 0.8 0.2 18.5

Net realized andunrealized gains 19.2 (0.1) - 19.1 (losses) oninvestments

Other income (loss) (0.1) - - (0.1)

Total revenues 181.0 0.7 0.2 181.9



Losses and LAE B (79.5) (0.1) 2.5 (77.1) incurred ^(2)

Commission expense C (19.4) - - (19.4)

Underwriting andgeneral and D (38.6) (3.8) (4.0) (46.4) administrativeexpenses

Other expenses (0.7) - - (0.7)

Total expenses (138.2) (3.9) (1.5) (143.6)

Net income (loss) $ 42.8 $ (3.2) $ (1.3) $ 38.3 before income taxes



Underwriting income A+B+C+D $ 6.9 $ (3.9) (loss)



Loss and LAE expense ratio:

Current year 65.3 % n/m

Prior years (10.2) -

Loss and LAE ratio 55.1 n/m

Commission expense 13.4 n/m ratio

Underwriting expense 26.7 n/m ratio

Combined ratio 95.2 % n/m



n/m - not meaningful

(1) See Page 14 for adescription of our reportable segments

(2) Losses and LAE inCorporate and Other represent the impactof the LPT Agreement

5

EMPLOYERS HOLDINGS, INC.Net Income Before Income Taxes by Segment ^(1) (unaudited)$ in millions

Corporate Employers Cerity and Consolidated Other

Nine Months Ended September 30, 2021

Gross premiums written $ 446.7 $ 1.0 $ - $ 447.7

Net premiums written 441.7 1.0 - 442.7



Net premiums earned A 417.6 0.4 - 418.0

Net investment income 52.5 2.1 0.3 54.9

Net realized andunrealized gains 29.7 0.2 (0.3) 29.6 (losses) oninvestments

Other income 0.8 - - 0.8

Total revenues 500.6 2.7 - 503.3



Losses and LAE B (250.3) (0.3) 6.1 (244.5) incurred ^(2)

Commission expense C (54.7) - - (54.7)

Underwriting andgeneral and D (99.9) (9.6) (11.5) (121.0) administrativeexpenses

Interest and financing - - (0.4) (0.4) expenses

Other expenses (4.1) - - (4.1)

Total expenses (409.0) (9.9) (5.8) (424.7)

Net income (loss) $ 91.6 $ (7.2) $ (5.8) $ 78.6 before income taxes



Underwriting income A+B+C+D 12.7 (9.5) (loss)



Loss and LAE expense ratio:

Current year 63.7 % n/m

Prior years (3.8) -

Loss and LAE ratio 59.9 n/m

Commission expense 13.1 n/m ratio

Underwriting expense 23.9 n/m ratio

Combined ratio 96.9 % n/m



n/m - not meaningful

(1) See Page 14 for adescription of our reportable segments

(2) Losses and LAE inCorporate and Other represent the impactof the LPT Agreement

6

EMPLOYERS HOLDINGS, INC.Net Income Before Income Taxes by Segment ^(1) (unaudited)$ in millions

Corporate Employers Cerity and Consolidated Other

Nine Months Ended September 30, 2020

Gross premiums $ 456.1 $ 0.1 $ - $ 456.2 written

Net premiums written 451.9 0.1 - 452.0



Net premiums earned A 463.7 0.1 - 463.8

Net investment income 54.9 2.5 0.9 58.3

Net realized andunrealized gains 0.1 (0.5) (1.9) (2.3) (losses) oninvestments

Other income 0.5 - - 0.5

Total revenues 519.2 2.1 (1.0) 520.3



Losses and LAE B (261.8) (0.1) 7.4 (254.5) incurred ^(2)

Commission expense C (59.9) - - (59.9)

Underwriting andgeneral and D (116.2) (11.9) (9.8) (137.9) administrativeexpenses

Other expenses (0.7) - - (0.7)

Total expenses (438.6) (12.0) (2.4) (453.0)

Net income (loss) $ 80.6 $ (9.9) $ (3.4) $ 67.3 before income taxes



Underwriting income A+B+C+D $ 25.8 $ (11.9) (loss)



Loss and LAE expense ratio:

Current year 65.5 % n/m

Prior years (9.0) -

Loss and LAE ratio 56.5 n/m

Commission expense 12.9 n/m ratio

Underwriting expense 25.1 n/m ratio

Combined ratio 94.5 % n/m



n/m - not meaningful

(1) See Page 14 for adescription of our reportable segments

(2) Losses and LAE inCorporate and Other represent the impactof the LPT Agreement

7

EMPLOYERS HOLDINGS, INC.Return on Equity (unaudited)$ in millions

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020



Net income A $ 15.0 $ 31.1 $ 64.5 $ 55.8

Impact of the LPT (2.1) (2.5) (6.1) (7.4) Agreement

Net realized andunrealized (gains) (2.7) (19.1) (29.6) 2.3 losses on investments

Severance costs andasset impairment 1.1 0.7 4.1 0.7 charges

Income tax expense(benefit) related to 0.3 3.9 5.4 (0.6) items excluded from Netincome

Adjusted net income ^ B 11.6 14.1 38.3 50.8 (1)



Stockholders' equity - $ 1,189.9 $ 1,167.4 $ 1,189.9 $ 1,167.4 end of period



Stockholders' equity - 1,203.6 1,144.0 1,212.8 1,165.8 beginning of period



Average stockholders' C 1,196.8 1,155.7 1,201.4 1,166.6 equity



Stockholders' equity - $ 1,189.9 $ 1,167.4 $ 1,189.9 $ 1,167.4 end of period

Deferred Gain - end of 119.2 129.7 119.2 129.7 period

Accumulated othercomprehensive income - (99.3) (141.4) (99.3) (141.4) end of period

Income taxes related toaccumulated other 20.9 29.7 20.9 29.7 comprehensive income -end of period

Adjusted stockholders' 1,230.7 1,185.4 1,230.7 1,185.4 equity - end of period

Adjusted stockholders'equity - beginning of 1,237.1 1,171.2 1,223.1 1,237.6 period

Average adjustedstockholders' equity^ D 1,233.9 1,178.3 1,226.9 1,211.5 (1)



Return on stockholders' Aequity / 1.3 % 2.7 % 5.4 % 4.8 % C

Annualized return on 5.0 10.8 7.2 6.4 stockholders' equity



Adjusted return on Bstockholders' equity ^ / 0.9 % 1.2 % 3.1 % 4.2 %(1) D

Annualized adjustedreturn on stockholders' 3.8 4.8 4.2 5.6 equity ^(1)



(1) See Page 13 for information regarding our use of Non-GAAP FinancialMeasures.

8

EMPLOYERS HOLDINGS, INC.Roll-forward of Unpaid Losses and LAE (unaudited)$ in millions

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020



Unpaid losses and LAE at $ 2,007.6 $ 2,170.7 $ 2,069.4 $ 2,192.8 beginning of period

Reinsurance recoverable,excluding CECL allowance, 483.5 523.6 497.0 532.5 on unpaid losses and LAE

Net unpaid losses and LAE 1,524.1 1,647.1 1,572.4 1,660.3 at beginning of period

Losses and LAE incurred:

Current year losses 93.4 94.4 266.2 303.8

Prior year losses on - (15.0) (15.0) (41.5) voluntary business

Prior year losses on (0.1) 0.2 (0.6) (0.4) involuntary business

Total losses incurred 93.3 79.6 250.6 261.9

Losses and LAE paid:

Current year losses 22.1 26.7 42.6 50.7

Prior year losses 71.6 72.3 256.7 243.8

Total paid losses 93.7 99.0 299.3 294.5

Net unpaid losses and LAE 1,523.7 1,627.7 1,523.7 1,627.7 at end of period

Reinsurance recoverable,excluding CECL allowance, 478.4 513.7 478.4 513.7 on unpaid losses and LAE

Unpaid losses and LAE at $ 2,002.1 $ 2,141.4 $ 2,002.1 $ 2,141.4 end of period

Total losses and LAE shown in the above table exclude amortization of theDeferred Gain, which totaled $2.1 million and $2.5 million for the three monthsendedSeptember 30, 2021 and 2020, respectively, and $6.1 million and $7.4 millionfor the nine months ended September 30, 2021 and 2020, respectively.

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EMPLOYERS HOLDINGS, INC.Consolidated Investment Portfolio (unaudited)$ in millions

September 30, 2021 December 31, 2020

Cost or NetInvestment Amortized Unrealized Fair Value % Fair Value %Positions: Cost Gain (Loss)

Fixed maturity $ 2,262.4 $ 99.3 $ 2,361.7 84 % $ 2,479.2 85 %securities

Equity 193.6 103.4 297.0 11 215.2 7 securities

Short-term 0.3 - 0.3 - 26.6 1 investments

Other invested 49.3 3.7 53.0 2 36.2 1 assets

Cash and cash 95.6 - 95.6 3 160.4 5 equivalents

Restricted cashand cash 0.2 - 0.2 - 0.2 - equivalents

Totalinvestments and $ 2,601.4 $ 206.4 $ 2,807.8 100 % $ 2,917.8 100 %cash



Breakout ofFixed Maturity Securities:

U.S. Treasuries $ 71.7 $ 2.3 $ 74.0 3 % $ 81.4 3 %and agencies

States and 386.5 25.1 411.6 17 482.7 19 municipalities

Corporate 1,036.3 58.1 1,094.4 46 1,046.4 42 securities

Mortgage-backed 435.9 12.7 448.6 19 563.4 23 securities

Asset-backed 56.4 0.6 57.0 2 42.6 2 securities

Collateralizedloan 85.5 (0.1) 85.4 4 83.6 3 obligations

Bank loans and 190.1 0.6 190.7 8 179.1 7 other

Total fixedmaturity $ 2,262.4 $ 99.3 $ 2,361.7 100 % $ 2,479.2 100 %securities

Weighted average book yield

3.0%

3.0%

Average credit quality (S&P)

A+

A+

Duration

3.5

3.2

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Weighted average book yield 3.0% 3.0%

Average credit quality (S&P) A+ A+

Duration 3.5 3.2

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EMPLOYERS HOLDINGS, INC.Book Value Per Share (unaudited)$ in millions, except per share amounts

September June 30, December 31, September 30, 2021 2020 30, 2021 2020

Numerators:

Stockholders' A $ 1,189.9 $ 1,203.6 $ 1,212.8 $ 1,167.4 equity

Plus: Deferred Gain 119.2 121.3 125.4 129.7

Stockholders'equity including B 1,309.1 1,324.9 1,338.2 1,297.1 the Deferred Gain^(1)

Accumulated othercomprehensive (99.3) (111.1) (145.7) (141.4) income

Income taxesrelated toaccumulated other 20.9 23.3 30.6 29.7 comprehensiveincome

Adjustedstockholders' C $ 1,230.7 $ 1,237.1 $ 1,223.1 $ 1,185.4 equity ^(1)



Denominator (shares D 27,964,380 28,291,782 28,564,798 29,069,753 outstanding)



Book value per Ashare ^(1) / $ 42.55 $ 42.54 $ 42.46 $ 40.16 D

Book value per Bshare including the / 46.81 46.83 46.85 44.62 Deferred Gain^(1) D

Adjusted book value Cper share ^(1) / 44.01 43.73 42.82 40.78 D



YTD Change in: ^(2)

Book value per 2.0 % 10.0 %share

Book value pershare including the 1.5 9.2 Deferred Gain

Adjusted book value 4.5 5.2 per share



(1) See Page 13 for information regarding our use of Non-GAAP FinancialMeasures.

(2) Reflects the change in book value per share after taking into accountdividends declared of $0.75 for each of the nine month periods ended September30, 2021 and 2020.

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EMPLOYERS HOLDINGS, INC.Earnings Per Share (unaudited)$ in millions, except per share amounts

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Numerators:

Net income A $ 15.0 $ 31.1 $ 64.5 $ 55.8

Impact of the LPT (2.1) (2.5) (6.1) (7.4) Agreement

Net income beforeimpact of the LPT ^ B 12.9 28.6 58.4 48.4 (1)

Net realized andunrealized (gains) (2.7) (19.1) (29.6) 2.3 losses oninvestments

Severance costs andasset impairment 1.1 0.7 4.1 0.7 charges

Income tax expense(benefit) related 0.3 3.9 5.4 (0.6) to items excludedfrom Net income

Adjusted net income C $ 11.6 $ 14.1 $ 38.3 $ 50.8 ^(1)



Denominators:

Average commonshares outstanding D 28,236,398 29,337,426 28,409,612 30,241,148 (basic)

Average commonshares outstanding E 28,455,062 29,568,406 28,743,221 30,532,910 (diluted)



Earnings per share:

ABasic / $ 0.53 $ 1.06 $ 2.27 $ 1.85 D

ADiluted^ (2) / 0.53 1.05 2.24 1.83 E



Earnings per sharebefore impact of the LPT: ^(1)

BBasic / $ 0.46 $ 0.97 $ 2.06 $ 1.60 D

BDiluted / 0.45 0.97 2.03 1.59 E



Adjusted earnings per share: ^(1)

CBasic / $ 0.41 $ 0.48 $ 1.35 $ 1.68 D

CDiluted / 0.41 0.48 1.33 1.66 E



(1) See Page 13 for information regarding our use of Non-GAAP FinancialMeasures.

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Non-GAAP Financial Measures

Within this earnings release we present the following measures, each of which are "non-GAAP financial measures." A reconciliation of these measures to the Company's most directly comparable GAAP financial measures is included herein. Management believes that these non-GAAP measures are important to the Company's investors, analysts and other interested parties who benefit from having an objective and consistent basis for comparison with other companies within our industry. Management further believes that these measures are more relevant than comparable GAAP measures in evaluating our financial performance.

The LPT Agreement is a non-recurring transaction that does not result in ongoing cash benefits to the Company. Management believes that providing non-GAAP measures that exclude the effects of the LPT Agreement (amortization of deferred reinsurance gain, adjustments to LPT Agreement ceded reserves and adjustments to contingent commission receivable) is useful in providing investors, analysts and other interested parties a meaningful understanding of the Company's ongoing underwriting performance.

Deferred reinsurance gain (Deferred Gain) reflects the unamortized gain from the LPT Agreement. This gain has been deferred and is being amortized using the recovery method, whereby the amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries, except for the contingent profit commission, which is being amortized through June 30, 2024. Amortization is reflected in losses and LAE incurred.

Adjusted net income(see Page 3 for calculations)is net income excluding the effects of the LPT Agreement, and net realized and unrealized gains and losses on investments (net of tax), and any miscellaneous non-recurring transactions (net of tax). Management believes that providing this non-GAAP measures is helpful to investors, analysts and other interested parties in identifying trends in the Company's operating performance because such items have limited significance to its ongoing operations or can be impacted by both discretionary and other economic factors and may not represent operating trends.

Stockholders' equity including the Deferred Gain(see Page 11 for calculations) is stockholders' equity including the Deferred Gain. Management believes that providing this non-GAAP measure is useful in providing investors, analysts and other interested parties a meaningful measure of the Company's total underwriting capital.

Adjusted stockholders' equity(see Page 11 for calculations) is stockholders' equity including the Deferred Gain, less accumulated other comprehensive income (net of tax). Management believes that providing this non-GAAP measure is useful to investors, analysts and other interested parties since it serves as the denominator to the Company's adjusted return on stockholders' equity metric.

Return on stockholders' equity and Adjusted return on stockholders' equity(see Page 8 for calculations). Management believes that these profitability measures are widely used by our investors, analysts and other interested parties.

Book value per share, Book value per share including the Deferred Gain, and Adjusted book value per share(see Page 11 for calculations). Management believes that these valuation measures are widely used by our investors, analysts and other interested parties.

Net income before impact of the LPT(see Page 3 for calculations). Management believes that these performance and underwriting measures are widely used by our investors, analysts and other interested parties.

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Description of Reportable Segments

The Company has determined that it has two reportable segments: Employers and Cerity. Each of these segments represents a separate and distinct underwriting platform through which the Company conducts insurance business.

The nature and composition of each reportable segment and its Corporate and Other activities are as follows:

* The Employers segment represents the traditional business offered through the EMPLOYERS brand name (Employers) through its agents, including business originated from its strategic partnerships and alliances; * The Cerity segment represents the as business offered under the Cerity brand name, which includes the Company's direct-to-customer business; and * Corporate and Other activities consist of those holding company expenses that are not considered to be underwriting in nature, the financial impact of the LPT Agreement and legacy (pre-acquisition) business assumed and ceded by Cerity Insurance Company. These expenses are not considered to be part of a reportable segment and are not otherwise allocated to a reportable segment.

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View source version on businesswire.com: https://www.businesswire.com/news/home/20211028005295/en/

CONTACT: Company contact: Mike Paquette (775) 327-2562 or mpaquette@employers.com

CONTACT: Investor relations contact: Adam Prior, The Equity Group Inc. (212) 836-9606 or aprior@equityny.com