Employers feels top-line squeeze
Executives of Employers Insurance Group, a publicly held workers compensation company based in Reno, face squeezes in both of their primary markets California and Nevada.
But the nature of the headaches is different in the two states.
In California, where Employers writes about 70 percent of its business, the company faces a tough competitive environment.
In some cases, competitors appear to be buying market share with rates that don’t make sense, said Doug Dirks, Employers’ chief executive officer.
“We will not compete for business with those who seek top-line growth at the expense of bottom-line profitability,” he told securities analysts last week.
In Nevada, meanwhile, Employers is squeezed by the economic contraction and shrinking payrolls. As companies have fewer workers, they need less workers compensation coverage.
Dirks said the construction and hospitality industries are especially hard hit in Nevada, the second-largest market for Employers.
The company reported last week that its earnings for the first quarter fell to $25.5 million from $27.9 million in the comparable
period a year earlier.
One piece of bright news: Dirks said the number of in-force policies written by Employers showed “solid increases” during the quarter.
Employers expects to close its acquisition of AmCOMP Inc., a workers compensation carrier headquartered at North Palm Beach, Fla., during the second quarter.
The Reno company will pay $194.5 million in cash for AmCOMP.
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