Good day, ladies and gentlemen, and welcome to the AMERISAFE first quarter earnings release conference call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance, please press star then zero on your touch-tone telephone. As a reminder, this conference is being recorded. I will now turn the call over to your host, Janelle Frost. Please go ahead.
Good morning, welcome to the AMERISAFE first quarter 2013 investor call. If you have not received the earnings release, it's 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. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Actual results could materially differ because of factors discussed in today's earnings release, in the comments made during this call, and in the Risk Factors section of our Form 10-K, Form 10-Qs, and other reports and filings with the SEC. We do not undertake any duty to update any forward-looking statement. With that, I will now turn the call over to Allen Bradley, AMERISAFE's Chairman and CEO.
Thanks, Janelle. Good morning, ladies and gentlemen. Thank you for joining us for our first quarter 2013 earnings call. As usual, I'll make a few remarks and then turn the call over to Geoff Banta and Janelle Frost for more details on the operational and financial aspects of the company. Since our earnings call in the fourth quarter of 2010, we have commented on positive changes in the workers' compensation marketplace. During that period of time, there has been an improving environment in terms both of pricing as well as the demand for the product. The intense irrational competition, which began during the depths of the soft market, began to fade around that time. Through 2011 and 2012, the marketplace improved at a gradual but a steady pace. The first quarter of 2013 has continued on that path. While competition has not completely disappeared, it is greatly diminished.
As a general observation, those competitors remaining in the market today are pricing at more rational levels. According to The Council of Insurance Agents & Brokers' first quarter 2013 pricing survey, 89% of respondents reported rate increases on workers' compensation policies written during the first quarter. Notably, 45% of total respondents indicated that rate increases were coming in at 10% or greater on their workers' compensation accounts. According to that report, and I quote, "Workers' compensation continued to be a hard line to place." End quote. Additionally, we have noted improvement on another front, that is the frequency of claims. We expect claims frequency in the workers' compensation line nationally to improve over 2011 when the 2012 results are released by the NCCI two weeks from today. We cannot definitively identify the driver of the lower frequency of claims.
We suspect that the average experience level of employees in the workplace has risen. It appears that the average hours worked by employees has expanded during the recovery, thereby muting the impact of inexperienced new workers on the job. Regardless of the cause for the decline in frequency of work-related claims, we are encouraged. With those comments, let me turn the call over to Geoff to talk about operational metrics of the company.
Thank you, Allen, and good morning, everyone. I'll make a few comments about our operational performance and trends relative to premiums and losses before turning things over to Janelle to present a summary of our consolidated financials. I'll begin by discussing our top line. Gross premiums written were up nicely in the first quarter by 16.7% year-over-year, an increase of $14.2 million. Notably, our gross premiums written of $99.1 million constituted the highest quarterly total in our history. The first quarter increase in gross premiums written was due mainly to growth in what we refer to as our deck sheet premium, which is the premium we record at the time a policy is bound.
Our deck premium in the first quarter was up $12.7 million, or 16.1%, and represented almost 90% of our total top-line increase. We have now had nine straight quarters of growth in deck premium, all while increasing our prices, a very positive development for our company. The other factor in our increased top line was audit and other premium-related adjustments, which rose by $606,000 over the year-ago quarter. On our renewal business, our first quarter premium retention was a very strong 99.7%, versus 97.2% in the first quarter of 2012. This increase was due mainly to a rise in average premium per policy from $37,200 in the first quarter of 2012 to $43,400 in the 2013 first quarter. We also saw a modest rise in policy retention in the first quarter to 92.4%, from 91.4% in the year-ago quarter.
In terms of pricing, our effective loss cost multiplier for voluntary work comp premium written in the first quarter was 1.72 or 172% of the approved loss cost in the states that use this mechanism for pricing. This pricing represents another healthy year-over-year increase over our first quarter 2012 ELCM, which stood at 1.59. Relative to losses, our 2013 accident year has begun favorably, with reported claims decreasing year-over-year by 8.1% to 1,260 claims from 1,371. That accident year has also had lower average severities than experienced in the year-ago quarter for accident year 2012. Based upon these and other claim-related factors, we have projected a 73.2% loss in LAE ratio for the 2013 accident year, which is 3.3 percentage points lower than our current projection for the 2012 accident year.
Even though 2013 has just begun, we are pleased with the favorable loss trends we are seeing early on in this accident year. Regarding prior accident years, operational claim trends, as well as actual case development in the first quarter, led us to lower our ultimate projection for those accident years by $2.4 million versus $1.6 million in the year-ago quarter. With that, I will turn to Janelle to present our first quarter financials.
Thank you, Geoff. For the first quarter of 2013, AMERISAFE reported net income of $8.9 million, or $0.47 per share, compared to $9.6 million, or $0.52 per share in the first quarter of 2012. We had minimal realized gains on our investment portfolio this quarter compared to $1.8 million in the first quarter of 2012, which significantly impacted net income. On an operating basis, operating net income was at $8.9 million, or $0.47 per share, in the first quarter of 2013, compared to $8.4 million or $0.45 per share in the first quarter of 2012. As Jeff discussed, gross premiums written rose 16.7% from the year-ago quarter, attributable to $12.9 million of growth in policies written in the quarter and $0.6 million increase in audit and related adjustments. Net premiums earned increased 14.2% from the year-ago quarter.
Our net investment income totaled $6.7 million in the first quarter of 2013, a decrease of 3.5% from the first quarter of 2012. Average invested assets were $912 million in the quarter ended March 31st, 2013, compared to an average of $863 million for the same period in 2012, an increase of 5.7%. The tax-equivalent yield on our investment portfolio was 4.2%, compared to 4.5% in the first quarter of 2012. In total, revenue for the first quarter of 2013 was $86.5 million, up 10% from the year-ago period. Our current accident year loss ratio for the quarter was 73.2%, compared to 76.5% a year ago. Our incurred loss and loss adjustment expenses totaled $56 million for the quarter, which included $2.4 million of favorable prior year development.
This compares to loss and loss adjustment expenses of $51.8 million in last year's first quarter, which included $1.6 million of favorable prior year development. In total, our net calendar year loss ratio for the first quarter of 2013 was 70.3%, compared to 74.3% for the first quarter of 2012. Total underwriting and other expenses increased 28.3% to $18.9 million. The 2013 first quarter expense components includes $5.6 million of salaries and benefits, $6.2 million of commissions, and $7.1 million of underwriting and other costs. The expense ratio increased to 23.7% from 21.1% in the same quarter a year ago. In total, our combined ratio was 94.7% for the first quarter of 2013 versus 96% for the same period in 2012. Operating return on average equity for the first quarter of 2013 was 9.2%, compared to 9.5% for the first quarter of 2012.
Book value per share at March 31st, 2013 was $21.20, an increase of 7.2% from the first quarter a year ago. Finally, we had strong cash flow from operations of $21.8 million, up from $18.1 million in the first quarter of 2012. We have over $75 million of cash and cash equivalents. We paid our first dividend of $0.08 in March of 2013, and the board of directors has declared an $0.08 dividend to be paid on June 26, 2013, to shareholders of record as of June 12th. That concludes my prepared remarks on the financials. I now turn the discussion back to Allen.
Thanks, Janelle. The first quarter was a good quarter for AMERISAFE. We experienced, on a year-over-year basis, the following changes. First, strong growth in gross written premium. Second, an increase in pricing on that business written during the quarter. Third, a reduction in the current accident year loss ratio. Fourth, an increase in favorable prior year claims development over the same quarter a year ago. An improved calendar year combined ratio, and an increase in operating earnings per share. Additionally, we expect that our expense ratio will trend down over the next three quarters, adding additional momentum to our financial performance. AMERISAFE continues to grow its premium base. As we have discussed in the past, we believe that this is the appropriate time in the market cycle to expand our market share.
However, make no mistake, AMERISAFE will first focus on improving our underwriting margins and profitability during this period of premium growth. As the old saying goes, volume is vanity, but profit is sanity. With that, let's open it up for questions.
Ladies and gentlemen, if you have a question, please press star then one on your touch-tone telephone. If your question has been answered and you wish to remove yourself from the queue, you may press the pound key. Our first question comes from Matthew Carletti with JMP Securities. Your line is open.
Hey, good morning.
Good morning, Matt.
Just had a few questions. First one on the accident year loss ratio improvement year-over-year. Could you just give us a little color around that? Specifically I'm thinking along the lines of, are you trying to pick a level for the year that kind of carries you to book the year, or are you trying to ease into it in the sense that if the current trends you're seeing persist, we should see, let's call it a step down function as we work through the year? Is there any color you can provide there?
That's a fair question. The selection was our best selection based on the information we have right now, looking at the last three years. Those years weigh more heavily in our decision than the current year because it's just too green to tell anything about. If the trends in frequency persist, those are good signs. It's very easy to pick a low number and then look really good. You really want to make sure that your number is put in the proper historical perspective at the time that you make that selection, realizing that we're in somewhat of a lumpy business and things can change. The changes in frequency have been going on now for several quarters. Will that persist? Will the claim severity not increase at such a level to outstrip the gains in frequency? We're not seeing that change in the severity part right now.
we've made this selection more with a view to 10, 11, 12, and without getting overly confident on some of the really positive things we see out there in the marketplace.
Yeah, Matt, that was a really great question, the second part, the second scenario you presented there, which Alan pretty much addressed, you know that we're always going to be influenced by the volatility of the business we're in in high hazard.
Of course
that's going to color our estimate. The signs, as Alan pointed out, are quite good as we start this year.
One thing I want to point out, Jeff mentioned it in his numbers, but just to clearly state it point blank, the absolute claims count went down.
Right.
The in-force premium is up markedly. That's something we haven't seen in a long time.
Got it.
This has not shifted material.
Right. Kind of building on your comments, Allen, on now is the time to build market share. Given the opportunities you're seeing, are there any new tangential high hazard type lines that maybe you haven't had a big presence in or that you're looking to grow specifically, or are there new geographies out there that are very attractive now that the market's turning and we might see you grow some market share that way?
Some place where the sun shines a lot.
Exactly.
Matt, the numbers that you see do not reflect the expansion of either class codes or geographies. They represent rather a greater penetration in existing service areas. There are some areas that appear to be turning, obviously, I think everyone keeps an eye on California because it's such a very large part of the market. It's not something that we're considering launching into at this particular point. We have not seen a prolonged enough stability there to justify it, although they do appear to be getting rather healthy rate increases. I would tell you right now, in the immediate term, we're going to stay in the geographies where we are. We're going to stay in the class codes, generally, that we're riding. We are seeing a lot more opportunity there. We're still seeing some people that from time to time will do something that we can't follow.
The pervasiveness of that is not the same now that it was 12 or certainly not 24 months ago.
Matt, we're in the enviable position right now in terms of the market as a whole, of being able to increase market share just because the supply is decreasing, the supply of high hazard out there as pretty big companies pull out of segments that we historically ride and do well in.
In fact, Matt, that's a good point Jeff makes there. Let me read another line from the CIAB first quarter pricing trend in the same paragraph that I quoted earlier. They quote another broker that says, and I quote, "Another broker that said workers' compensation was driving a lot of underwriting decisions, forcing business into monoline or alternative markets." As a monoline carrier, that's not bad news for us.
Yeah. Music to your ears. That's great. Thank you. Just a quick numbers one, and I'll get out of the way is, Jeff, I apologize. I know you mentioned the LCM, but I didn't catch it. What was it in the quarter?
172.
172. Excellent.
$1.72 up from $1.59, Matt.
Perfect. Well, thank you for all the answers, congrats on a nice start to the year. Janelle, congrats on the promotion.
Thank you, Matt.
Our next question comes from Mark Hughes with SunTrust. Your line is open.
Morning.
Good morning.
Morning.
Morning, Mark.
Jeff, how are you doing on the large losses that from time to time you've mentioned some of the more expensive losses and how they've been trending? How have you seen that lately?
Amazingly positive so far in 2013, Mark. We have seen, as of the first quarter, we have no incurred losses over $500,000 in 2013. We've only seen that three times in our history, in our public history. Large losses look good. I certainly wouldn't expect that to continue given the history and the volatility and the markets we're in, but very good results in terms of the large claim, what we call the severe claims. Very surprising to me, actually, for the first quarter.
Right.
I agree. Just to clarify, Mark, when he says it's only happened three times in our history, he's talking about it's only three times where we have not had the claim.
Yeah.
Over $500,000.
Right. Presumably you're a larger size now than in those other cases?
Yes. I would say on a premium basis, we will probably be larger this year. Well, we are larger on in-force basis now than we have ever been in our history.
Allen, you had given the numbers for the increase in average premium per policy of the 17% increase. How much of that would you say is pricing versus volume or extra people? However you want to measure it.
I wouldn't want to get to a specific number overall, but I would tell you that it's 40%-50% rate and 50%-60% exposures.
Okay.
What's happening with rates, let me mention that real quick. In the last filing cycle with the NCCI and others, there were the filing cycles across the country. There were 39 rate changes or LCM changes, depending on what the state uses. Of those 39, 27 were increases, 12 were decreases. The increases aren't coming up as fast as they have. They're not as volatile as they once were. With investment yields down and you're seeing more and more insurers reporting lower investment income, I think that's going to give more of a steady upward movement in the pricing as well as in the rates as the results in the workers' comp line have been particularly unpleasant.
Great. Well, this will be a comment more than question. You've got an 8% decline in claims on an absolute basis. Your pricing is up, call it roughly 8%-9%. Doesn't seem to translate into 300 basis points of losses. I guess it's the how long it endures is the question.
That's the question. Sometimes these large claims seem to come in a rash of them. It's just like I said in my earlier comments, it's more with a view to 2010, 2011, 2012, and how claims behaved then, rather than betting so much on what we don't know, we thought we would trend more toward what we do know.
Right. How about in the employment in your construction end market, are you seeing payrolls pick up there?
As a matter of fact, Mark, in what we call governing class groups, of which there are nine major groups, construction is showing the largest growth.
Okay. Janelle, in the next conference call, you're going to have to get Grasher to read the safe harbor language.
That's correct. Looking forward to it.
Thank you.
Thanks, Mark.
Our next question comes from Randy Binner with FBR Capital Markets. Your line is open.
Great. Good morning. Thank you.
Good morning, Randy.
Good morning. I wanted to start just on the expense ratio and understand the dynamic there a little bit better. It sounded like there was some assessments. Could you just explain a little bit more kind of what drove those and why, Alan, you think that that would moderate down as we go through 2013?
I'll let Janelle address that. She's probably a better source.
Sure. Good morning, Randy. Yes, our assessment expense for the quarter did increase. I think quarter-over-quarter is 2.5 percentage points to the underwriting ratio. In dollar terms, I think it was somewhere around $2.3 million.
That-
I'm sorry?
I didn't say anything.
Okay. Sorry. It sounded like the rest of the question. That was indeed this quarter. If you look back at our history, we've had quarters where we've had a little bit of lumpiness in the assessment expense. As a workers' compensation company, we are highly assessed on those premiums, and losses for that matter. It really depends on which states those, like for example, on the loss-based assessments, which states those reserve increases or decreases fall in. The other thing that was positive on the expense ratio this quarter was actually what we internally call controllable expenses or fixed costs were staying relatively level.
As the earned premium grows, we are seeing efficiencies there, which I think lends to Allen's comment about we don't think the 23% loss or our 23.7% loss expense ratio is a true run rate because we do see that we're gaining efficiencies on the controllable expenses.
Just to be clear, these are assessments from state pools that are having trouble. There's more companies in their pool that are under pressure from the market.
The assessments are a wide range of things. I think what you're referring to are probably the second injury funds. Yeah, those are large dollars as far as the loss-based assessments. We have a large number of premium-based assessments as well.
Okay. Yeah, I'm just trying to just kind of sort out that you're seeing a lot of market opportunity because other folks are feeling pain, right?
Oh, absolutely.
I'm just trying to figure out if that pain is articulating itself through a higher assessment and therefore a higher expense ratio.
We anticipate that you will see, well, you've already seen an uptick in insolvencies which make demand on things like guarantee associations, guarantee funds, and other things. There's clearly stress as you look at the historical performance of the workers' comp industry. It does appear that we're in the latter stages of a sustained period of underwriting losses.
Right.
That money is going to go somewhere. It is not going to just disappear. It is going to go somewhere, it usually ends up reducing capacity, and for some people radically so such that they are out of business.
Right. Okay. We will keep watching that one. Just speaking of kind of historical patterns, the LCM of 1.72, that seems kind of historically high to me. Was it that high in the last cycle for you?
No.
No. Alan, you correct me if I am wrong. I think it was less than 1.6. I think it was the high 1.5s.
1.54, 1.56, something like that. Let me address that a little bit. The effective LCM is an index that is applied against the loss cost.
As Geoff said, it's 172% of the approved loss cost in those states that use loss cost as a basis for creating rates. Loss costs have not reacted, we think, as much to the losses. It tends to be trailing because they're retrospectively made. To a certain extent, our growth in the effective LCM reflects our utilization of discretionary pricing because we are looking for a number, for a rate per 100, which we think will support and produce an underwriting profit. Yes, it is a higher rate. As the loss costs rise, Randy, over the next couple of years, you can expect that number, the effective LCM to trend back down. The rate that we're charging, which we don't discuss, will either remain steady or trend up or trend slightly down depending on what our loss experience is in that governing class group.
Randy, I may get too much into the weeds here, but one of the things I don't think a lot of people understand is, let's say a state like Georgia issues a loss cost increase of, let's say for sake of argument, 5%. That's an aggregate loss cost increase, and when we look at some of the class codes we write, oftentimes we find those decreased. A statewide aggregate loss cost increase doesn't always mean good news for us. As Alan stated, we try to keep our eye on the premium per hundred when all this washes through.
Okay. That's helpful. Let me ask one more. At the risk of over-parsing your words, Alan, in response to Matt Carletti's question about California. It sounded like you're not saying it's too late to get into California, is that right?
Oh, no.
Is that a fair way of reading it? Has the ship left the port, or is that still something that reasonable people could look at?
Oh, no. I certainly don't think it's too late. I think one of the things we look for in states is some stability. Volatility is bad because we write the only policy in America that you can buy, Randy, that doesn't have a limit on it.
There is no limit of payment. There is one on the employer liability portion of worker comp policy, but not on the Part 1. It's built upon rates and assumptions of what you're liable for, and if the state changes the rules as to what you have to pay for and doesn't change the rate, that's a really bad thing to happen, and we've seen that in California. We haven't seen a sustained period, we have not. We're not as familiar with that market as many more, but we haven't seen a sustained period of that, so we're a bit hesitant. It clearly is an improving marketplace. There's no question about that. I wouldn't expect to opine as to whether it's at the end of the cycle or somewhere in the middle. I still think it's probably got a ways to go.
It may go in terms of rate going up, or it may go in terms of changes in the law so that the rates currently charged are adequate. Either one is a positive development for those people that write there. It's just not on a priority list for us.
Gotcha. Yeah. They got that Senate Bill 863 out there, so I guess we'll see how that plays out. I appreciate the commentary. Thanks.
Great. Thanks, Randy.
Our next question comes from Bob Farnum with KBW. Your line is open.
Hi there. Good morning.
Good morning, Bob.
I just have one follow-up on Randy's question on the expense ratio. I'm still trying to get a feeling for what to expect from assessments going forward. In this type of market condition, should we expect year-over-year increases in the assessments that would still kind of negatively impact the expense ratio?
I would just say this. We expect the expense ratio to improve over the remainder part of the year. You're going to have earned premium growing. You're going to have written premium growing. Those assessments, some are based on losses, some are based on premium. Whether or not they actually go up or down remains to be seen. The impact on the expense ratio of the company through the year will, in my opinion, decline over the next three quarters. We've managed expenses closely at this company for a long time, and nothing's changed about that. We've had a little bit of this lumpiness in the past. I'm not that concerned about the 23.7 for the first quarter.
Very good. Thanks.
Thank you.
Again, ladies and gentlemen, if you'd like to ask a question, please press star, then one on your touch-tone telephone. Our next question comes from Jeff Bernstein with AH Lisanti. Your line is open.
Hi. Good morning, gentlemen. Just a quick question on kind of the macro impact to your business. You were talking about claim frequency declining and average hours worked increasing, experience levels of workers increasing. We've heard a lot about companies being a little shy about adding permanent heads here. Now starting to get some visibility and in particular in construction contractors, after seeing a year of work ramping up, starting to hire. How will the hiring of new workers to your existing clients impact the business? Can you just kind of walk us through how that flows through?
That's a great question, and I'm very happy to answer it. With respect to just all things being equal. Let's don't talk about AMERISAFE, just talk about the construction industry, or for that matter, any industry. When you are talking about hazardous occupations and you bring new workers onto the job site The risk of a new worker being injured is much, much higher than an experienced worker. New people on the job site need orientation, they need training, they need safety devices, they need those sorts of things. That's something that we should look at, and we do look at, prior to making a decision about it, particularly if somebody's expanding. One of the reasons, quite frankly, Jeff, we don't write new business that have a non-calculated experience rating modifier. Now I know I'm really in the weeds.
Basically a new venture is because if it's a new venture, there's new employees, there may be new management, and you're going to pay for the OJT. To answer your question directly, normally increasing employment, improving employment picture, is going to increase frequency. Okay? What you try to do as an underwriter is you try to go out and identify those trends within your prospective accounts and see what they do in order to try to mitigate against that risk. We are not perfect in that, Jeff, and I remember that because, what was it, Jeff, we had last two or three weeks, we had a gentleman severely injured on his very first day at the job, and it's obvious that he did not have the appropriate instruction on how to operate a high-pressure hose.
It's not a perfect world, but that is a risk and we've identified that risk and we pay attention to it. It's something to be concerned about.
If I could add to Alan's comments, and in our safety department, we do look very rigorously at training programs. One of the macro factors, I don't know if Alan agrees with this, but my opinion is that with unemployment as high as it's been, a help to us might be when workers who have been in that industry come back to that industry.
Sure.
They maybe don't need as much training.
Right.
We will see some of that. Training is one of the biggest issues we deal with when we go through our safety review with new accounts and renewal accounts.
I definitely agree. That's when you want to know how much experience workers have. I will tell you this, Jeff, when we see expanding work week, that's really good news.
Sure.
Yeah.
That's really good news. That is not the same risk as a new employee coming on, even if the total hours are all the same.
There really isn't much you can do in terms of differential pricing. Obviously, you're going to take the new worker coming on the payroll. Hey, that's good for you, too, right? That's a new premium that you're going to get.
True.
You are not going to be able to do anything differentially on pricing until such time as that organization re-ups. Then if you're looking at them and you say, "Hey, by the way, you added about 20% headcount, new workers, we've got to do something on pricing." Is that how that works?
That's fair. Also the question of turnover.
Yeah.
If you have a place that constantly turns over people, that's a higher risk than someone that has a stable workforce.
Got you. There's no pricing opportunity on an incremental worker.
No. It's a unit basis.
Yeah.
You can't change the deal in the middle of the year.
That's great. You mentioned workweek, but also just a wage increase, right? That's 100% incremental to you.
Yes, absolutely.
Great. Thank you.
Pressure on wages does raise it. It also raises benefits, too.
Appreciate that. Thank you.
Yes, sir. Thanks, Jeff.
Our next question comes from Mark Hughes with SunTrust. Your line is open.
Thank you. That discussion about the LCM and how the loss costs tend to lag when the state calculates them, is there some reason to think that they're lagging more this time around, or when your LCM peaked last time, would it have reflected the same sort of dynamic?
I can't give you the actuarial calculations. It's way beyond me. I will tell you this, as an observer, we saw more volatility year-to-year in rate changes in the past than we are seeing now. Significantly more. Most of the rating bureaus will cap a particular class code to say it cannot move more than 50%, a ±25% from where it was. You don't see as many times that ever coming into play now. A lot of the rate increases are in the low single-digit range. I actually have a list of them here somewhere. We're not seeing the sort of volatility that we've seen before. Some of the rating bureaus say that's because they've got better information. I think they're just more cautious in their trending and they're not as quick to react to it.
Hence my comments that I think it will lead to a longer, slower, more gradual upward slope in the rates. The rates will go up over a period of time. frequency and severity fall off the table, and so far, the medical side of severity has not been very successful in being managed.
Is that to say that the loss costs may be lagging a little bit more because they're smoothing it?
Yes
Rating it up as fast as they might?
Yeah, I can't prove that statistically, but I will tell you that is clearly my impression.
Okay.
Alan hates to talk about this, but sometimes there's a little politics involved as well.
Yeah. Well, yeah. It's really funny. Of course, you know I had some experience with politics. I've noticed that regulators make press releases when they lower rates, but they don't make them when they raise them. There's what we refer to as political rate suppression. There's more resistance going up than there is coming down.
Yeah.
From a regulatory perspective.
Okay, good. Thank you.
Thank you, Mark.
I'm showing no further questions. At this time, I will now turn the call back over to management for closing remarks.
Thank you, Stephanie. There's one additional remark I want to make today, and that is, and Mark Hughes has alluded to it. We have with us today, Mr. Mike Grasher, who has joined AMERISAFE, April 29th. Currently, he's an executive vice president, and on May 15th, he will assume the role of Chief Financial Officer. Janelle Frost will be promoted to Chief Operational Officer. We are very excited to have Mike join us and very happy to see Janelle promoted. We think this portends great things for AMERISAFE as a company. Mike, welcome, and as Mark said, you get to do the forward-looking statement disclaimer at the next earnings call. Thank you very much for your interest today, and please give us a call if you're interested in talking some more. Take care.
Thank you, ladies and gentlemen. That does conclude today's conference. You may all disconnect and have a wonderful day.