10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☑  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the Quarterly Period Ended March 31, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from ____  to ____

Commission file number: 001-33245

EMPLOYERS HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Nevada		04-3850065
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
10375 Professional Circle
Reno,	Nevada	89521
(Address of principal executive offices and zip code)

(888) 682-6671

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	EIG	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
						Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April 21, 2022, there were 27,738,429 shares of the registrant's common stock outstanding.

		Page No.
PART 1 – FINANCIAL INFORMATION
Item 1	Consolidated Financial Statements
	Consolidated Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021	3
	Consolidated Statements of Comprehensive (Loss) Income for the Three Months Ended March 31, 2022 and 2021 (Unaudited)	5
	Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2022 and 2021 (Unaudited)	6
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (Unaudited)	7
	Notes to Consolidated Financial Statements (Unaudited)	9
Item 2	Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations	24
Item 3	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4	Controls and Procedures	39
	PART II – OTHER INFORMATION
Item 1	Legal Proceedings	40
Item 1A	Risk Factors	40
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3	Defaults Upon Senior Securities	40
Item 4	Mine Safety Disclosures	40
Item 5	Other Information	40
Item 6	Exhibits	41
Signatures		42

2

PART I – FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements

Employers Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
(in millions, except share data)
	As of		As of
	March 31, 2022		December 31, 2021
Assets	(unaudited)
Investments:
Fixed maturity securities at fair value (amortized cost $2,305.9 at March 31, 2022 and $2,266.1 at December 31, 2021, net of CECL allowance of $2.2 at March 31, 2022 and $0.2 at December 31, 2021)	$	2,271.0	$	2,342.7
Equity securities at fair value (cost $206.4 at March 31, 2022 and $212.6 at December 31, 2021)	296.8		338.8
Equity securities at cost	5.6		5.6
Other invested assets (cost $35.9 at March 31, 2022 and $34.1 at December 31, 2021)	40.4		38.4
Short-term investments at fair value (amortized cost $3.2 at March 31, 2022 and $10.5 at December 31, 2021)	3.2		10.5
Total investments	2,617.0		2,736.0
Cash and cash equivalents	130.5		75.1
Restricted cash and cash equivalents	0.2		0.2
Accrued investment income	17.9		14.5
Premiums receivable (less CECL allowance of $10.0 at March 31, 2022 and $10.3 at December 31, 2021)	258.2		244.7
Reinsurance recoverable for:
Paid losses	7.5		7.5
Unpaid losses (less CECL allowance of $0.6 at March 31, 2022 and $0.6 at December 31, 2021)	471.1		476.3
Deferred policy acquisition costs	46.4		43.7
Deferred income taxes, net	22.5		—
Property and equipment, net	14.0		14.7
Operating lease right-of-use assets	13.5		14.2
Intangible assets, net	13.6		13.6
Goodwill	36.2		36.2
Contingent commission receivable—LPT Agreement	13.9		13.9
Cloud computing arrangements	39.4		43.9
Other assets	51.4		48.7
Total assets	$	3,753.3	$	3,783.2
Liabilities and stockholders’ equity
Claims and policy liabilities:
Unpaid losses and loss adjustment expenses	$	1,981.9	$	1,981.2
Unearned premiums	325.1		304.7
Commissions and premium taxes payable	41.9		42.1
Accounts payable and accrued expenses	21.7		24.1
Deferred reinsurance gain—LPT Agreement	112.3		114.4
FHLB advances	60.0		—
Deferred income tax liability	—		7.7
Operating lease liability	15.7		16.6
Non-cancellable obligations	19.7		21.7
Other liabilities	65.7		57.6
Total liabilities	$	2,644.0	$	2,570.1
Commitments and contingencies

3

Employers Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
(in millions, except share data)
	As of		As of
	March 31, 2022		December 31, 2021
Stockholders’ equity:	(unaudited)
Common stock, $0.01 par value; 150,000,000 shares authorized; 57,861,455 and 57,690,254 shares issued and 27,738,429 and 27,741,400 shares outstanding at March 31, 2022 and December 31, 2021, respectively	$	0.6	$	0.6
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued	—		—
Additional paid-in capital	411.1		410.7
Retained earnings	1,329.2		1,338.5
Accumulated other comprehensive (loss) income, net of tax	(27.6)		60.6
Treasury stock, at cost (30,123,026 shares at March 31, 2022 and 29,948,854 shares at December 31, 2021)	(604.0)		(597.3)
Total stockholders’ equity	1,109.3		1,213.1
Total liabilities and stockholders’ equity	$	3,753.3	$	3,783.2

See accompanying unaudited notes to the consolidated financial statements.

4

Employers Holdings, Inc. and Subsidiaries
Consolidated Statements of Comprehensive (Loss) Income
(in millions, except per share data)
	Three Months Ended
	March 31,
	2022		2021
Revenues	(unaudited)
Net premiums earned	$	150.2	$	133.9
Net investment income	19.1		18.4
Net realized and unrealized (losses) gains on investments	(17.3)		10.9
Other income	—		0.4
Total revenues	152.0		163.6
Expenses
Losses and loss adjustment expenses	94.2		69.6
Commission expense	20.9		16.8
Underwriting and general and administrative expenses	39.3		46.6
Interest and financing expenses	0.1		0.1
Other expenses	—		2.9
Total expenses	154.5		136.0
Net (loss) income before income taxes	(2.5)		27.6
Income tax (benefit) expense	(0.2)		4.5
Net (loss) income	$	(2.3)	$	23.1
Comprehensive loss
Unrealized AFS investment losses arising during the period, net of tax benefit of $23.4 and $9.4 for the three months ended March 31, 2022 and 2021, respectively)	$	(88.4)	$	(35.5)
Reclassification adjustment for realized AFS investment losses (gains) in net income, net of tax expense of $0.2 for the three months ended March 31, 2021	0.2		(0.6)
Other comprehensive loss, net of tax	(88.2)		(36.1)
Total comprehensive loss	$	(90.5)	$	(13.0)
Net realized and unrealized (losses) gains on investments
Net realized and unrealized (losses) gains on investments before impairments	$	(17.3)	$	10.9
Net realized and unrealized (losses) gains on investments	$	(17.3)	$	10.9
Earnings (loss) per common share (Note 13):
Basic	$	(0.08)	$	0.81
Diluted	$	(0.08)	$	0.80
Cash dividends declared per common share and eligible equity plan holders	$	0.25	$	0.25

See accompanying unaudited notes to the consolidated financial statements.

5

Employers Holdings, Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Equity
For the Three Months Ended March 31, 2022 and 2021
(Unaudited)
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income, Net		Treasury Stock at Cost		Total Stockholders’ Equity
	Shares Issued	Amount
	(in millions, except share data)
Balance, January 1, 2022	57,690,254	$	0.6	$	410.7	$	1,338.5	$	60.6	$	(597.3)	$	1,213.1
Stock-based obligations	—	—		1.6		—		—		—		1.6
Stock options exercised	41,665	—		1.0		—		—		—		1.0
Vesting of RSUs and PSUs, net of shares withheld to satisfy tax withholdings	129,536	—		(2.2)		—		—		—		(2.2)
Acquisition of common stock	—	—		—		—		—		(6.7)		(6.7)
Dividends declared	—	—		—		(7.0)		—		—		(7.0)
Net loss for the period	—	—		—		(2.3)		—		—		(2.3)
Change in net unrealized losses on AFS investments, net of taxes of $23.4	—	—		—		—		(88.2)		—		(88.2)
Balance, March 31, 2022	57,861,455	$	0.6	$	411.1	$	1,329.2	$	(27.6)	$	(604.0)	$	1,109.3
Balance, January 1, 2021	57,413,806	$	0.6	$	404.3	$	1,247.9	$	115.1	$	(555.1)	$	1,212.8
Stock-based obligations	—	—		5.2		—		—		—		5.2
Stock options exercised	41,851	—		0.9		—		—		—		0.9
Vesting of RSUs and PSUs, net of shares withheld to satisfy tax withholdings	170,151	—		(2.5)		—		—		—		(2.5)
Acquisition of common stock	—	—		—				—		(9.6)		(9.6)
Dividends declared	—	—		—		(7.1)		—		—		(7.1)
Net income for the period	—	—		—		23.1		—		—		23.1
Change in net unrealized gains on AFS investments, net of taxes of $9.6	—	—		—		—		(36.1)		—		(36.1)
Balance, March 31, 2021	57,625,808	$	0.6	$	407.9	$	1,263.8	$	79.0	$	(564.7)	$	1,186.6
See accompanying unaudited notes to the consolidated financial statements.

6

Employers Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in millions)
	Three Months Ended
	March 31,
	2022		2021
Operating activities	(unaudited)
Net (loss) income	$	(2.3)	$	23.1
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization	1.5		1.9
Stock-based compensation	1.6		5.2
Amortization of cloud computing arrangements	4.0		3.1
Amortization of premium on investments, net	1.0		1.5
Allowance for expected credit losses	(0.3)		1.4
Deferred income tax (benefit) expense	(6.8)		9.5
Net realized and unrealized losses (gains) on investments	17.3		(10.9)
Change in operating assets and liabilities:
Premiums receivable	(13.2)		(13.0)
Reinsurance recoverable on paid and unpaid losses	5.2		5.1
Cloud computing arrangements	0.5		(2.6)
Operating lease right-of-use-assets	0.7		1.0
Current federal income taxes	6.5		(5.3)
Unpaid losses and loss adjustment expenses	0.7		(35.3)
Unearned premiums	20.4		14.7
Accounts payable, accrued expenses and other liabilities	(1.0)		3.7
Deferred reinsurance gain—LPT Agreement	(2.1)		(2.1)
Operating lease liabilities	(0.9)		(0.8)
Non-cancellable obligations	(2.0)		0.1
Other	(14.0)		(11.1)
Net cash provided by (used in) operating activities	16.8		(10.8)
Investing activities
Purchases of fixed maturity securities	(196.8)		(243.6)
Purchases of equity securities	(46.4)		(19.3)
Purchases of short-term investments	(9.6)		—
Purchases of other invested assets	(1.8)		(5.6)
Proceeds from sale of fixed maturity securities	92.0		74.0
Proceeds from sale of equity securities	71.4		8.0
Proceeds from maturities and redemptions of fixed maturity securities	63.6		116.7
Proceeds from maturities of short-term investments	16.8		25.5
Net change in unsettled investment purchases and sales	5.5		5.6
Capital expenditures and other	(0.8)		(1.1)
Net cash used in investing activities	(6.1)		(39.8)
Financing activities
Acquisition of common stock	(6.7)		(10.0)
Cash transactions related to stock-based compensation	(1.2)		(1.7)
Dividends paid to stockholders	(7.4)		(7.7)
Proceeds from FHLB advances	60.0		—
Repayments on FHLB advances	—		(5.0)
Proceeds from line of credit advances	10.0		12.0
Repayments on line of credit advances	(10.0)		(12.0)
Net cash provided by (used in) financing activities	44.7		(24.4)
Net increase (decrease) in cash, cash equivalents and restricted cash	55.4		(75.0)
Cash, cash equivalents and restricted cash at the beginning of the period	75.3		160.6
Cash, cash equivalents and restricted cash at the end of the period	$	130.7	$	85.6

7

The following table presents our cash, cash equivalents and restricted cash by category within the Consolidated Balance Sheets:

	As of		As of
	March 31, 2022		December 31, 2021
	(in millions)
Cash and cash equivalents	$	130.5	$	75.1
Restricted cash and cash equivalents supporting reinsurance obligations	0.2		0.2
Total cash, cash equivalents and restricted cash	$	130.7	$	75.3

See accompanying unaudited notes to the consolidated financial statements.

8

Employers Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

 (Unaudited)

1. Basis of Presentation and Summary of Operations

Employers Holdings, Inc. (EHI) is a Nevada holding company. Through its wholly owned insurance subsidiaries, Employers Insurance Company of Nevada (EICN), Employers Compensation Insurance Company (ECIC), Employers Preferred Insurance Company (EPIC), Employers Assurance Company (EAC), and Cerity Insurance Company (CIC), EHI is engaged in the commercial property and casualty insurance industry, specializing in workers’ compensation products and services. Unless otherwise indicated, all references to the “Company” refer to EHI, together with its subsidiaries.

In 1999, the Nevada State Industrial Insurance System (the Fund) entered into a retroactive 100% quota share reinsurance agreement (the LPT Agreement) through a loss portfolio transfer transaction with third party reinsurers. The LPT Agreement commenced on June 30, 1999 and will remain in effect until: (i) all claims under the covered policies have closed; (ii) the LPT Agreement is commuted or terminated, upon the mutual agreement of the parties; or (iii) the reinsurers’ aggregate maximum limit of liability is exhausted, whichever occurs first. The LPT Agreement does not provide for any additional termination terms. On January 1, 2000, EICN assumed all of the assets, liabilities and operations of the Fund, including the Fund’s rights and obligations associated with the LPT Agreement (See Note 9).

The Company accounts for the LPT Agreement as retroactive reinsurance. Upon entry into the LPT Agreement, an initial deferred reinsurance gain (the Deferred Gain) was recorded as a liability on the Company’s Consolidated Balance Sheets. The Company is entitled to receive a contingent profit commission under the LPT Agreement. The contingent profit commission is estimated based on both actual paid results to date and projections of expected paid losses under the LPT Agreement and is recorded as an asset on the Company’s Consolidated Balance Sheets.

The accompanying consolidated financial statements have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of the Company’s consolidated financial position and results of operations for the periods presented have been included. The results of operations for an interim period are not necessarily indicative of the results for an entire year. These financial statements have been prepared consistent with the accounting policies described in the Company’s Form 10-K for the year ended December 31, 2021 (Annual Report).

The Company operates through two reportable segments: Employers and Cerity. Each of the segments represents a separate and distinct underwriting platform through which the Company conducts insurance business. This presentation allows the reader, as well as the Company's chief operating decision makers, to objectively analyze the business originated through each of the Company's underwriting platforms. Detailed financial information about the Company's operating segments is presented in Note 14.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. As a result, actual results could differ from these estimates. The most significant areas that require management judgment are the estimate of unpaid losses and loss adjustment expenses (LAE), evaluation of reinsurance recoverables, recognition of premium revenue, recoverability of deferred income taxes, and valuation of investments.

Reclassifications

Certain prior period information has been reclassified to conform to the current period presentation.

2. New Accounting Standards

Recently Issued Accounting Standards

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848). This update provides optional transition guidance to ease the potential accounting burden associated with transitioning away from the London Interbank Offered Rate (LIBOR), with optional expedients and exceptions related to the application of US GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. Companies can apply this ASU at any time, but early adoption is only available through December 31, 2022 when this ASU becomes effective. The Company has and will continue to evaluate the impact of LIBOR on its existing contracts and

9

investments, but does not expect that this update will have a material impact on its consolidated financial condition or results of operations.

Recently Adopted Accounting Standards

None

3. Valuation of Financial Instruments

Financial Instruments Carried at Fair Value

The carrying value and the estimated fair value of the Company’s financial instruments at fair value were as follows:

	March 31, 2022				December 31, 2021
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
	(in millions)
Financial assets
Total investments at fair value	$	2,571.0	$	2,571.0	$	2,692.0	$	2,692.0
Cash and cash equivalents	130.5		130.5		75.1		75.1
Restricted cash and cash equivalents	0.2		0.2		0.2		0.2

Assets and liabilities recorded at fair value on the Company’s Consolidated Balance Sheets are categorized based upon the levels of judgment associated with the inputs used to measure their fair value. Level inputs are defined as follows:

•Level 1 - Inputs are unadjusted quoted market prices for identical assets or liabilities in active markets at the measurement date.

•Level 2 - Inputs other than Level 1 prices that are observable for similar assets or liabilities through corroboration with market data at the measurement date.

•Level 3 - Inputs that are unobservable that reflect management’s best estimate of what willing market participants would use in pricing the assets or liabilities at the measurement date.

The Company uses third party pricing services to assist with its investment accounting function. The ultimate pricing source varies depending on the investment security and pricing service used, but investment securities valued on the basis of observable inputs (Levels 1 and 2) are generally assigned values on the basis of actual transactions. Securities valued on the basis of pricing models with significant unobservable inputs or non-binding broker quotes are classified as Level 3. The Company performs quarterly analyses on the prices it receives from third parties to determine whether the prices are reasonable estimates of fair value, including confirming the fair values of these securities through observable market prices using an alternative pricing source, as it is ultimately management’s responsibility to ensure that the fair values reflected in the Company’s consolidated financial statements are appropriate. If differences are noted in these analyses, the Company may obtain additional information from other pricing services to validate the quoted price.

The Company bases all of its estimates of fair value for assets on the bid prices, when available, as they represent what a third-party market participant would be willing to pay in an arm’s length transaction.

For securities not actively traded, third party pricing services may use quoted market prices of similar instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include, but are not limited to, broker quotes, benchmark yields, credit spreads, default rates, and prepayment speed assumptions. There were no material adjustments to the valuation methodology utilized by third party pricing services as of March 31, 2022 and December 31, 2021.

These methods of valuation only produce an estimate of fair value if there is objectively verifiable information to produce a valuation. If objectively verifiable information is not available, the Company would be required to produce an estimate of fair value using some of the same methodologies, making assumptions for market-based inputs that are unavailable.

10

The following table presents the Company’s investments at fair value and the corresponding fair value measurements.

	March 31, 2022						December 31, 2021
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
	(in millions)
Fixed maturity securities:
U.S. Treasuries	$	—	$	63.2	$	—	$	—	$	65.7	$	—
U.S. Agencies	—		2.3		—		—		2.4		—
States and municipalities	—		372.9		—		—		436.1		—
Corporate securities	—		1,045.1		—		—		1,080.3		—
Residential mortgage-backed securities	—		289.4		—		—		321.8		—
Commercial mortgage-backed securities	—		66.5		—		—		92.3		—
Asset-backed securities	—		67.5		—		—		68.5		—
Collateralized loan obligations	—		183.3		—		—		85.4		—
Foreign government securities	—		11.6		—		—		12.5		—
Other securities	—		169.2		—		—		177.7		—
Total fixed maturity securities	$	—	$	2,271.0	$	—	$	—	$	2,342.7	$	—
Equity securities at fair value:
Industrial and miscellaneous	$	248.3	$	—	$	—	$	283.1	$	—	$	—
Other	48.5		—		—		55.7		—		—
Total equity securities at fair value	$	296.8	$	—	$	—	$	338.8	$	—	$	—
Short-term investments	$	1.0	$	2.2	$	—	$	—	$	10.5	$	—
Total investments at fair value	$	297.8	$	2,273.2	$	—	$	338.8	$	2,353.2	$	—

Financial Instruments Carried at Cost

EICN, ECIC, EPIC, and EAC are members of the Federal Home Loan Bank of San Francisco (FHLB). Members are required to purchase stock in the FHLB in addition to maintaining collateral deposits that back any funds advanced. The Company’s investment in FHLB stock is recorded at cost, which approximates fair value, as purchases and sales of these securities are at par value with the issuer. FHLB stock is considered a restricted security and is periodically evaluated by the Company for impairment based on the ultimate recovery of par value.

Financial Instruments Carried at Net Asset Value

The Company has investments in private equity limited partnership interests that are included in Other invested assets on the Company’s Consolidated Balance Sheets. These investments do not have readily determinable fair values and are carried at net asset value (NAV) and therefore are excluded from the fair value hierarchy. The Company initially estimates the value of these investments using the transaction price. In subsequent periods, the Company measures these investments using NAV per share provided quarterly by the general partner, based on financial statements that are audited annually. These investments are generally not redeemable by the investees and cannot be sold without approval of the general partner. These investments have a fund term of 10 to 12 years, subject to two or three one-year extensions at the general partner’s discretion. The Company will receive distributions of proceeds from dividends and interest from fund investments, as well as from the disposition of a fund investment, or portion thereof. The Company expects these distributions from time-to-time during the full course of the fund term. As of March 31, 2022, the Company had unfunded commitments to these private equity limited partnerships totaling $44.7 million. In April 2022, the Company entered into an additional investment in a private equity limited partnership with an unfunded commitment amount totaling $15.0 million.

Additionally, certain cash equivalents, principally money market securities, are measured using NAV, which approximates fair value.

The following table presents cash and investments carried at NAV on the Company’s Consolidated Balance Sheets.

	March 31, 2022		December 31, 2021
	(in millions)
Cash equivalents carried at NAV	$	41.0	$	29.5
Other invested assets carried at NAV	40.4		38.4

11

4. Investments

The amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company’s available-for-sale (AFS) investments were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(in millions)
At March 31, 2022
Fixed maturity securities
U.S. Treasuries	$	64.4	$	0.4	$	(1.6)	$	63.2
U.S. Agencies	2.2		0.1		—		2.3
States and municipalities	368.6		6.2		(1.9)		372.9
Corporate securities	1,061.1		11.1		(27.1)		1,045.1
Residential mortgage-backed securities	303.9		1.0		(15.5)		289.4
Commercial mortgage-backed securities	67.8		0.3		(1.6)		66.5
Asset-backed securities	71.0		0.1		(3.6)		67.5
Collateralized loan obligations	184.4		—		(1.1)		183.3
Foreign government securities	12.7		—		(1.1)		11.6
Other securities(1)	169.8		0.7		(1.3)		169.2
Total fixed maturity securities	$	2,305.9	$	19.9	$	(54.8)	$	2,271.0
Short-term investments	3.2		—		—		3.2
Total AFS investments	$	2,309.1	$	19.9	$	(54.8)	$	2,274.2

At December 31, 2021
Fixed maturity securities
U.S. Treasuries	$	64.3	$	1.6	$	(0.2)	$	65.7
U.S. Agencies	2.2		0.2		—		2.4
States and municipalities	413.8		22.4		(0.1)		436.1
Corporate securities	1,035.1		47.0		(1.8)		1,080.3
Residential mortgage-backed securities	319.0		7.0		(4.2)		321.8
Commercial mortgage-backed securities	87.9		4.5		(0.1)		92.3
Asset-backed securities	68.6		0.4		(0.5)		68.5
Collateralized loan obligations	85.5		—		(0.1)		85.4
Foreign government securities	12.7		—		(0.2)		12.5
Other securities(1)	177.0		1.2		(0.5)		177.7
Total fixed maturity securities	$	2,266.1	$	84.3	$	(7.7)	$	2,342.7
Short-term investments	10.5		—		—		10.5
Total AFS investments	$	2,276.6	$	84.3	$	(7.7)	$	2,353.2

(1)Other securities within fixed maturity securities consist of bank loans, which are classified as AFS and reported at fair value.

The cost and estimated fair value of the Company’s equity securities recorded at fair value at March 31, 2022 and December 31, 2021 were as follows:

	Cost		Estimated Fair Value
	(in millions)
At March 31, 2022
Equity securities at fair value
Industrial and miscellaneous	$	167.7	$	248.3
Other	38.7		48.5
Total equity securities at fair value	$	206.4	$	296.8

12

At December 31, 2021
Equity securities at fair value
Industrial and miscellaneous	$	170.5	$	283.1
Other	42.1		55.7
Total equity securities at fair value	$	212.6	$	338.8

The Company had Other invested assets totaling $40.4 million and $38.4 million (initial cost of $35.9 million and $34.1 million) at March 31, 2022 and December 31, 2021, respectively, consisting of private equity limited partnerships, which are carried at NAV based on information provided by the general partner. These investments are non-redeemable until conversion and are periodically evaluated by the Company for impairment based on the ultimate recovery of the investment. Changes in the value of these investments are recorded through Net realized and unrealized gains and losses on the Company’s Consolidated Statements of Comprehensive (Loss) Income.

The amortized cost and estimated fair value of the Company’s fixed maturity securities at March 31, 2022, by contractual maturity, are shown below. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Estimated Fair Value
	(in millions)
Due in one year or less	$	87.9	$	88.6
Due after one year through five years	745.7		749.6
Due after five years through ten years	733.2		718.8
Due after ten years	112.0		107.3
Mortgage and asset-backed securities	627.1		606.7
Total	$	2,305.9	$	2,271.0

13

The following is a summary of AFS investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or greater as of March 31, 2022 and December 31, 2021.

	March 31, 2022					December 31, 2021
	Estimated Fair Value		Gross Unrealized Losses		Number of Issues	Estimated Fair Value		Gross Unrealized Losses		Number of Issues
	(dollars in millions)
Less than 12 months:
Fixed maturity securities
U.S. Treasuries	$	36.8	$	(1.5)	11	$	12.8	$	(0.2)	4
States and municipalities	51.3		(1.9)		21	$	7.7	(0.1)		4
Corporate securities	495.7		(25.5)		278	$	113.0	(1.8)		87
Residential mortgage-backed securities	166.6		(7.2)		143	146.3		(3.9)		65
Commercial mortgage-backed securities	47.8		(1.3)		20	—		—		—
Asset-backed securities	47.0		(3.2)		20	50.1		(0.5)		14
Collateralized loan obligations	148.9		(0.9)		28	24.4		(0.1)		10
Foreign government securities	4.3		(0.4)		1	12.5		(0.2)		2
Other securities	105.0		(1.0)		258	66.3		(0.4)		176
Total fixed maturity securities	1,103.4		(42.9)		780	433.1		(7.2)		362
Total less than 12 months	$	1,103.4	$	(42.9)	780	$	433.1	$	(7.2)	362
12 months or greater:
Fixed maturity securities
Corporate securities	$	14.8	$	(1.7)	17	$	—	$	—	—
Residential mortgage-backed securities	78.0		(8.4)		25	4.9		(0.3)		3
Commercial mortgage-backed securities	2.3		(0.2)		2	2.4		(0.1)		2
Asset-backed securities	5.9		(0.3)		2	—		—		—
Collateralized loan obligations	22.5		(0.3)		4	—		—		—
Foreign government securities	7.6		(0.6)		2	—		—		—
Other securities	27.7		(0.4)		85	8.0		(0.1)		29
Total fixed maturity securities	158.8		(11.9)		137	15.3		(0.5)		34
Total 12 months or greater	$	158.8	$	(11.9)	137	$	15.3	$	(0.5)	34

As of March 31, 2022 and December 31, 2021, the Company had an allowance for current expected credit losses (CECL) on AFS debt securities of $2.2 million and $0.2 million, respectively (See Note 5). Those fixed maturity securities whose total fair value was less than amortized cost at March 31, 2022 and December 31, 2021, were those in which the Company had no intent, need or requirement to sell at an amount less than their amortized cost.

Realized gains and losses on investments include the gain or loss on a security at the time of sale compared to its original or adjusted cost (equity securities and other invested assets) or amortized cost (fixed maturity securities). Realized losses on fixed maturity securities are also recognized when securities are written down as a result of an other-than-temporary impairment or for changes in the expected credit loss allowance.

14

Net realized gains and losses on investments and the change in unrealized gains and losses on the Company’s investments recorded at fair value are determined on a specific-identification basis and were as follows:

	Gross Realized Gains		Gross Realized Losses		Net (Increase) Decrease in CECL Allowance		Change in Net Unrealized Gains (Losses)		Changes in Fair Value Reflected in Earnings		Changes in Fair Value Reflected in AOCI, before tax
	(in millions)
Three Months Ended March 31, 2022
Fixed maturity securities	$	1.9	$	(0.2)	$	(2.0)	$	(111.6)	$	(0.3)	$	(111.6)
Equity securities	20.6		(2.0)		—		(35.7)		(17.1)		—
Other invested assets	—		—		—		0.1		0.1		—
Total investments	$	22.5	$	(2.2)	$	(2.0)	$	(147.2)	$	(17.3)	$	(111.6)

Three Months Ended March 31, 2021
Fixed maturity securities	$	0.7	$	(0.4)	$	0.5	$	(45.6)	$	0.8	$	(45.6)
Equity securities	0.9		(0.3)		—		8.8		9.4		—
Other invested assets	—		—		—		0.7		0.7		—
Short-term investments	—		—		—		(0.1)		—		(0.1)
Total investments	$	1.6	$	(0.7)	$	0.5	$	(36.2)	$	10.9	$	(45.7)

Proceeds from the sales of fixed maturity securities were $92.0 million for the three months ended March 31, 2022, compared to $74.0 million for the three months ended March 31, 2021.

Net investment income was as follows:

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Fixed maturity securities	$	18.7	$	18.2
Equity securities	1.6		0.9
Other invested assets	0.4		0.2
Short-term investments	—		0.2
Gross investment income	20.7		19.5
Investment expenses	(1.6)		(1.1)
Net investment income	$	19.1	$	18.4

The Company is required by various state laws and regulations to support, through securities on deposit or otherwise, its outstanding loss reserves in certain states in which it does business. These laws and regulations govern not only the amount but also the types of securities that are eligible for deposit. As of March 31, 2022 and December 31, 2021, securities having a fair value of $819.9 million and $861.4 million, respectively, were on deposit. Additionally, standby letters of credit from the FHLB were in place in lieu of $70.0 million of securities on deposit as of March 31, 2022 and December 31, 2021 (See Note 10).

Certain reinsurance contracts require the Company’s funds to be held in trust for the benefit of the ceding reinsurer to secure the outstanding liabilities assumed by the Company. The fair value of fixed maturity securities and restricted cash and cash equivalents held in trust for the benefit of ceding reinsurers at March 31, 2022 and December 31, 2021 was $3.0 million and $3.1 million, respectively.

5. Current Expected Credit Losses

Premiums Receivable

Premiums receivable balances are all due within one year or less. The Company currently determines the allowance for premiums receivable based on an internal aging schedule using collectability and historical payment patterns, as well as current and expected future market conditions to determine the appropriateness of the allowance. Historical payment patterns and future market conditions provide the basis for the estimation along with similar risk characteristics and the Company's business strategy, which have not changed significantly over time. The Company will continually assess the historical payment patterns and aging schedule to reflect the differences in our current conditions and future forecasted changes, including any impact from

15

the COVID-19 pandemic and related economic stability, including recent inflationary pressures. Changes in the allowance for CECL are recorded through underwriting and general and administrative expenses.

The table below shows the changes in CECL on premiums receivable.

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Beginning balance of CECL on premiums receivable	$	10.3	$	10.8
Current period provision for CECL	3.2		3.3
Write-offs charged against CECL	(0.9)		(0.1)
Recoveries collected	(2.6)		(1.8)
Ending balance of CECL on premiums receivable	$	10.0	$	12.2

Reinsurance Recoverable

In assessing an allowance for reinsurance assets, which includes reinsurance recoverables and contingent commission receivables, the Company considers historical information, financial strength of reinsurers, collateralization amounts, and ratings to determine the appropriateness of the allowance. Historically, the Company has not experienced a credit loss from reinsurance transactions. In assessing future default, the Company evaluated the allowance for CECL under the ratings-based method using the A.M. Best Average Cumulative Net Impairment Rates. Reinsurer ratings are also assessed through this process. Changes in CECL are recorded through underwriting and general and administrative expenses.

The table below shows the changes in CECL on reinsurance recoverables.

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Beginning balance of CECL on reinsurance recoverables	$	0.6	$	0.4
Current period provision for CECL	—		—
Ending balance of CECL on reinsurance recoverables	$	0.6	$	0.4

Investments

The Company assesses all AFS debt securities in an unrealized loss position for CECL. The Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria is met, the security's amortized cost basis is written down to its fair value. For AFS debt securities that do not meet either criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. Any impairment that has not been recorded through CECL is recognized in Accumulated other comprehensive (loss) income on the Company's Consolidated Balance Sheets. Changes in CECL are recorded through realized capital losses.

As of March 31, 2022, the Company established an aggregate allowance for CECL in the amount of $2.2 million. For the Company’s investments in fixed-income debt securities, the allowance for CECL was determined by: (i) observing the credit characteristics of those debt securities that may have demonstrated a credit loss as of that date and by comparing the present value of cash flows expected to be collected to its amortized cost basis; and (ii) observing the credit characteristics of those debt securities that are expected to demonstrate a credit loss in the future by comparing the present value of cash flows expected to be collected to its amortized cost basis. The expected present value of cash flows are calculated using scenario based credit loss models derived from the discounted cash flows under the Comprehensive Capital Analysis Review (CCAR) framework, which is adopted by the Federal Reserve.

As of March 31, 2022, the Company did not intend to sell any of its AFS debt securities in which its amortized cost exceeded its fair value.

16

Accrued interest receivable on AFS debt securities totaled $17.9 million at March 31, 2022 and is excluded from the estimate of CECL based on historically timely payments.

The table below shows the changes in the allowance for CECL on available-for-sale securities.

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Beginning balance of CECL on AFS securities	$	0.2	$	0.7
Current period provision for CECL	2.2		—
Reductions in allowance from disposals	—		(0.2)
Recoveries of amounts previously written off	(0.2)		(0.3)
Ending balance of CECL on AFS securities	$	2.2	$	0.2

6. Property and Equipment

Property and equipment consists of the following:

	As of March 31,		As of December 31,
	2022		2021
	(in millions)
Furniture and equipment	$	3.4	$	3.3
Leasehold improvements	5.0		5.0
Computers and software	46.8		46.8
Automobiles	0.8		0.8
Property and equipment, gross	56.0		55.9
Accumulated depreciation	(42.0)		(41.2)
Property and equipment, net	$	14.0	$	14.7

Depreciation expenses related to property and equipment for the three months ended March 31, 2022 were $1.5 million and $7.4 million for the year ended December 31, 2021. Internally developed software costs of $0.5 million were capitalized during the three months ended March 31, 2022, and $2.3 million in internally developed software costs were capitalized during the year ended December 31, 2021.

Cloud Computing Arrangements

The Company’s capitalized costs associated with cloud computing arrangements totaled $39.4 million and $43.9 million, which were comprised of service contract fees and implementation costs associated with hosting arrangements as of March 31, 2022 and December 31, 2021, respectively. Total amortization for hosting arrangements was $4.0 million for the three months ended March 31, 2022, and $14.2 million for the year ended December 31, 2021.

Leases

The Company determines if an arrangement is a lease at the inception of the transaction. Operating leases for offices are presented as a right-of-use asset (ROU asset) and lease liability on the Company’s Consolidated Balance Sheets. Financing leases for automobiles are included in property and equipment and other liabilities on the Company’s Consolidated Balance Sheets.

ROU assets represent the right to use an underlying asset for the lease term and the lease liability represents the obligation to make lease payments arising from the lease transaction. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term. The Company uses collateralized incremental borrowing rates to determine the present value of lease payments. The ROU assets also include lease payments less any lease incentives within a lease agreement. The Company’s lease terms may include options to extend or terminate a lease. Lease expense for lease payments is recognized on a straight-line basis over the lease term. As of March 31, 2022, the Company’s operating leases have remaining terms of 1 year to 7 years, with options to extend up to 9 years with no termination provision. The Company’s finance leases have an option to terminate after 1 year.

17

Components of lease expense were as follows:

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Operating lease expense	$	0.9	$	1.1
Finance lease expense	—		—
Total lease expense	$	0.9	$	1.1

As of March 31, 2022, the weighted average remaining lease term for operating leases was 5.1 years and for finance leases was 3.5 years. The weighted average discount rate was 2.2% and 7.7% for operating and finance leases, respectively.

Maturities of lease liabilities were as follows:

	As of March 31, 2022
	Operating Leases		Finance Leases
	(in millions)
2022	$	3.3	$	0.1
2023	3.3		0.2
2024	3.2		0.2
2025	3.1		0.1
2026	2.8		—
Thereafter	1.8		—
Total lease payments	17.5		0.6
Less: imputed interest	(1.8)		—
Total	$	15.7	$	0.6

Supplemental balance sheet information related to leases was as follows:

	As of March 31,		As of December 31,
	2022		2021
	(in millions)
Operating leases:
Operating lease right-of-use asset	$	13.5	$	14.2
Operating lease liability	15.7		16.6
Finance leases:
Property and equipment, gross	0.8		0.8
Accumulated depreciation	(0.3)		(0.3)
Property and equipment, net	0.5		0.5
Other liabilities	$	0.6	$	0.5

Supplemental cash flow information related to leases was as follows:

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	0.9	$	1.1
Financing cash flows used for finance leases	—		—

7. Income Taxes

The Company’s effective tax rate was 8.0% for the three months ended March 31, 2022, compared to 16.3% for the corresponding period of 2021. 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.

18

8. Liability for Unpaid Losses and Loss Adjustment Expenses 

The following table represents a reconciliation of changes in the liability for unpaid losses and LAE.

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Unpaid losses and LAE at beginning of period	$	1,981.2	$	2,069.4
Less reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE	476.9		497.0
Net unpaid losses and LAE at beginning of period	1,504.3		1,572.4
Losses and LAE, net of reinsurance, incurred during the period related to:
Current period	96.3		85.6
Prior periods	—		(13.9)
Total net losses and LAE incurred during the period	96.3		71.7
Paid losses and LAE, net of reinsurance, related to:
Current period	4.6		4.7
Prior periods	85.8		97.6
Total net paid losses and LAE during the period	90.4		102.3
Ending unpaid losses and LAE, net of reinsurance	1,510.2		1,541.8
Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE	471.7		492.3
Unpaid losses and LAE at end of period	$	1,981.9	$	2,034.1

Total net losses and LAE included in the above table exclude amortization of the deferred reinsurance gain—LPT Agreement, which totaled $2.1 million for each of the three months ended March 31, 2022 and 2021 (See Note 9).

The change in incurred losses and LAE attributable to prior periods for the three months ended March 31, 2022, as compared to March 31, 2021, was primarily due to the absence of prior accident year loss reserve development, as ultimate incurred losses for prior periods did not change during the three months ended March 31, 2022. Favorable prior accident loss reserve development totaled $13.9 million for the three months ended March 31, 2021, which included $0.5 million of unfavorable development on the Company’s assigned risk business.

The favorable prior accident year loss development recognized during the three months ended March 31, 2021 was primarily the result of observed favorable paid loss cost trends primarily for accident years 2017 and prior.

9. LPT Agreement

The Company is party to the LPT Agreement under which $1.5 billion in liabilities for losses and LAE related to claims incurred by the Fund prior to July 1, 1995 were reinsured for consideration of $775.0 million. The LPT Agreement provides coverage up to $2.0 billion. The Company records its estimate of contingent profit commission in the accompanying Consolidated Balance Sheets as Contingent commission receivable–LPT Agreement and a corresponding liability is recorded in the accompanying Consolidated Balance Sheets in Deferred reinsurance gain–LPT Agreement. The Deferred Gain is being amortized using the recovery method. Amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries over the life of the LPT Agreement, except for the contingent profit commission, which is amortized through June 30, 2024, the date through which the Company is entitled to receive a contingent profit commission under the LPT Agreement. The amortization is recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive (loss) income. Any adjustments to the Deferred Gain are recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive (loss) income.

The Company amortized $2.1 million of the Deferred Gain for each of the three months ended March 31, 2022 and 2021. The remaining Deferred Gain was $112.3 million and $114.4 million as of March 31, 2022 and December 31, 2021, respectively. The estimated remaining liabilities subject to the LPT Agreement were $323.6 million and $328.7 million as of March 31, 2022 and December 31, 2021, respectively. Losses and LAE paid with respect to the LPT Agreement totaled $843.9 million and $838.8 million from inception through March 31, 2022 and December 31, 2021, respectively.

19

10. FHLB Advances, Notes Payable and Other Financing Arrangements

On December 15, 2020, the Company entered into a Credit Agreement (the Credit Agreement) with a syndicate of financial institutions. The Credit Agreement provides for a $75.0 million three-year revolving credit facility and is guaranteed by certain of the Company’s wholly owned subsidiaries (Employers Group, Inc. and Cerity Group, Inc.). Borrowings under the Credit Agreement may be used for working capital and general corporate purposes of the Company and its subsidiaries. Pursuant to the Credit Agreement, the Company also has an option to request an increase of the credit available under the facility up to a maximum facility amount of $125.0 million, subject to the consent of lenders and the satisfaction of certain conditions.

The interest rates applicable to loans under the Credit Agreement are generally based on a base rate plus a specified margin, ranging from 0.25% to 1.25%, or the Eurodollar rate (which will convert to an alternative reference rate once LIBOR is discontinued), plus a specified margin, ranging from 1.25% to 2.25%. In addition, the Company will pay a fee on each lender’s commitment, ranging from 0.20% to 0.50%, irrespective of usage. The applicable margin and the amount of such commitment fee vary based upon the financial strength rating of the Company’s insurance subsidiaries as most recently announced by A.M. Best or the Company’s debt to total capitalization ratio if such financial strength rating is not available. Interest paid and fees incurred pursuant to the Credit Agreement during the three months ended March 31, 2022 totaled $0.1 million.

The Credit Agreement contains covenants that require the Company and its consolidated subsidiaries to maintain: (i) a minimum consolidated net worth of no less than 70% of the Company’s stockholders’ equity as of September 30, 2020, plus 50% of the Company’s aggregate net income thereafter; and (ii) a debt to total capitalization ratio of no more than 35%, in each case as determined in accordance with the Credit Agreement. At March 31, 2022, the Company was in compliance with all debt covenants.

The Company incurred $0.7 million in debt issuance costs in connection with the Credit Agreement, which are being amortized over the three-year life of the facility in Interest and Financing expenses. The annual commitment and administrative fee on the unused portion of the facility is 0.30%, for a maximum of $225,000, and an annual agency fee of $25,000. Advances can be repaid at any time without prepayment penalties or additional fees. The Company borrowed and subsequently repaid $10.0 million under the credit facility during the three months ended March 31, 2022. As of March 31, 2022, the Company had no outstanding borrowings on the credit facility.

Other financing arrangements are comprised of the following:

EICN, ECIC, EPIC, and EAC are members of the FHLB. Membership allows the insurance subsidiaries access to collateralized advances, which may be used to support and enhance liquidity management. The amount of advances that may be taken is dependent on statutory admitted assets on a per company basis.

During the first quarter of 2022, the Company's insurance subsidiaries received advances of $60.0 million under the FHLB Standard Credit Program. These advances are collateralized by eligible investment securities. The interest rate on these advances is adjusted daily per the Secure Overnight Funding Rate (SOFR), published by the Federal Reserve. As of March 31, 2022, the Company's weighted average daily interest rate on these advances was 0.33%. Interest paid during the three months ended March 31, 2022 was less than $0.1 million. Furthermore, these advances can be repaid at any time without prepayment penalties or additional fees.

During the second quarter of 2020, the FHLB announced its Zero Interest Recovery Advance program (the FHLB Advance Program). The FHLB Advance Program is a zero percent interest, six-month or one-year credit product that members can use to provide immediate relief to property owners, businesses, and other customers from the effects of the COVID-19 pandemic. Each member was allocated up to $10.0 million in advances under the FHLB Advance Program.

On May 11, 2020, the Company's insurance subsidiaries received a total of $35.0 million of advances under the FHLB Advance Program. These advances were secured by collateral previously pledged to the FHLB by the Company’s insurance subsidiaries in support of their existing collateralized advance facility, which has been reduced by the amount of these outstanding advances. The Company repaid $15.0 million of its advances on November 4, 2020, $5.0 million on March 31, 2021, and the remaining $15.0 million on May 4, 2021. As of March 31, 2022, the Company has no outstanding advances.

FHLB membership also allows the Company’s insurance subsidiaries access to standby letters of credit (Letter of Credit Agreements). On January 26, 2021, EPIC chose to amend its existing Letter of Credit Agreement to decrease its credit amount to $10.0 million. On August 13, 2021, EAC and ECIC chose to amend their existing Letter of Credit Agreements to decrease their respective credit amounts to $25.0 million and $35.0 million. The amended Letter of Credit Agreements will expire on March 31, 2023, and will remain evergreen with automatic one-year extensions unless the FHLB notifies the beneficiary at least 60 days prior to the then applicable expiration date of its election not to renew. The Letter of Credit Agreements may only be used to satisfy, in whole or in part, insurance deposit requirements with the State of California and are fully secured with eligible collateral at all times. The Letter of Credit Agreements are subject to annual maintenance charges and a fee of 15 basis points on issued amounts. As of both March 31, 2022 and December 31, 2021, letters of credit totaling $70.0 million, were issued in lieu of securities on deposit with the State of California under these Letter of Credit Agreements.

20

As of March 31, 2022 and December 31, 2021, investment securities having a fair value of $237.0 million and $385.6 million, respectively, were pledged to the FHLB by the Company’s insurance subsidiaries in support of the collateralized advance facility and the Letter of Credit Agreements.

11. Accumulated Other Comprehensive (Loss) Income

Accumulated other comprehensive (loss) income is comprised of unrealized gains and losses on investments classified as AFS, net of deferred taxes. The following table summarizes the components of accumulated other comprehensive (loss) income:

	March 31, 2022		December 31, 2021
	(in millions)
Net unrealized (losses) gains on investments, before taxes	$	(34.9)	$	76.7
Deferred tax benefit (expense) on net unrealized gains and losses	7.3		(16.1)
Total accumulated other comprehensive (loss) income	$	(27.6)	$	60.6

12. Stock-Based Compensation

The Company awarded restricted stock units (RSUs) and performance share units (PSUs) to certain employees and non-employee Directors of the Company as follows:

	Number Awarded	Weighted Average Fair Value on Date of Grant	Aggregate Fair Value on Date of Grant
			(in millions)
March 2022
RSUs(1)	23,296	38.16	$	0.9
RSUs(1)	63,120	40.54	2.6
PSUs(2)	73,120	40.54	3.0

(1)The RSUs awarded in March 2022 were awarded to certain employees of the Company and vest 25% on March 15, 2023, and each of the subsequent three anniversaries of that date. The RSUs are subject to accelerated vesting in certain circumstances, including but not limited to: death, disability, retirement, or in connection with a change of control of the Company.

(2)The PSUs awarded in March 2022 were awarded to certain employees of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 250% of the target awards. The value shown in the table represents the aggregate number of PSUs awarded at the target level.

Employees who were awarded RSUs and PSUs are entitled to receive dividend equivalents for eligible awards, payable in cash, when and if, the underlying award vests and becomes payable. If the underlying award does not vest or is forfeited, dividend equivalents with respect to the underlying award fail to become payable and are forfeited.

Stock options exercised totaled 41,665 for the three months ended March 31, 2022, 41,851 for the three months ended March 31, 2021, and 48,051 for the year ended December 31, 2021.

As of March 31, 2022, the Company had 23,500 stock options, 241,204 RSUs, and 184,393 PSUs (based on target number awarded) outstanding.

13. Earnings (Loss) Per Common Share

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilutive impact of all common stock equivalents on earnings per share. Diluted earnings per share includes common shares assumed issued under the “treasury stock method,” which reflects the potential dilution that would occur if outstanding RSUs and PSUs vested and stock options were to be exercised.

Outstanding RSUs and PSUs awarded to employees are entitled to receive dividend equivalents when and if, the underlying award vests or becomes payable. Therefore, these awards are not considered participating securities for the purposes of determining earnings per share.

21

The following table presents the net income (loss) and the weighted average number of shares outstanding used in the earnings (loss) per common share calculations.

	Three Months Ended
	March 31,
	2022		2021
	(in millions, except share data)
Net (loss) income	$	(2.3)	$	23.1
Weighted average number of shares outstanding—basic	27,802,972		28,516,731
Effect of dilutive securities:
PSUs	204,029		344,615
Stock options	22,877		34,530
RSUs	47,730		72,463
Dilutive potential shares	274,636		451,608
Weighted average number of shares outstanding—diluted	28,077,608		28,968,339

14. Segment Reporting

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 the Company's strategic partnerships and alliances.

The Cerity segment represents the business offered under the Cerity brand name, which includes the Company's direct-to-customer business.

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 business assumed and ceded by CIC. These expenses are not considered to be part of a reportable segment and are not otherwise allocated to a reportable segment.

The Company has determined that it is not practicable to report identifiable assets by segment since certain assets are used interchangeably among the segments.

22

The following table summarizes the Company's written premium and components of net income (loss) before income taxes by reportable segment.

	Employers		Cerity		Corporate and Other		Total
	(in millions)
Three Months Ended March 31, 2022
Gross premiums written	$	171.2	$	1.2	$	—	$	172.4
Net premiums written	169.2		1.2		—		170.4
Net premiums earned	149.6		0.6		—		150.2
Net investment income	17.6		0.7		0.8		19.1
Net realized and unrealized losses on investments	(15.6)		(0.4)		(1.3)		(17.3)
Total revenues	151.6		0.9		(0.5)		152.0
Losses and loss adjustment expenses	95.9		0.4		(2.1)		94.2
Commission expense	20.9		—		—		20.9
Underwriting and general and administrative expenses	32.8		3.2		3.3		39.3
Interest and financing expenses	—		—		0.1		0.1
Total expenses	149.6		3.6		1.3		154.5
Net income (loss) before income taxes	$	2.0	$	(2.7)	$	(1.8)	$	(2.5)
Three Months Ended March 31, 2021
Gross premiums written	$	148.0	$	0.3	$	—	$	148.3
Net premiums written	146.6		0.3		—		146.9
Net premiums earned	133.9		—		—		133.9
Net investment income	17.6		0.7		0.1		18.4
Net realized and unrealized gains on investments	10.8		0.1		—		10.9
Other income	0.4		—		—		0.4
Total revenues	162.7		0.8		0.1		163.6
Losses and loss adjustment expenses	71.7		—		(2.1)		69.6
Commission expense	16.8		—		—		16.8
Underwriting and general and administrative expenses	37.3		3.7		5.6		46.6
Interest and financing expenses	—		—		0.1		0.1
Other expenses	2.9		—		—		2.9
Total expenses	128.7		3.7		3.6		136.0
Net income (loss) before income taxes	$	34.0	$	(2.9)	$	(3.5)	$	27.6

Entity-Wide Disclosures

The Company operates solely within the U.S. and does not have revenue from transactions with a single policyholder accounting for 10% or more of its revenues. In-force premiums represent the estimated annual premium on all policies that are active and in-force on such date. More specifically, in-force premiums include policy endorsements but exclude estimated final audit premiums. Our company focuses on in-force premium because it represents premium that is available for renewal in the

23

future. The following table shows the Company's in-force premiums and number of policies in-force for each of our largest states and all other states combined for the periods presented:

	March 31, 2022			December 31, 2021			March 31, 2021			December 31, 2020
State	In-force Premiums		Policies In-force	In-force Premiums		Policies In-force	In-force Premiums		Policies In-force	In-force Premiums		Policies In-force
	(dollars in millions)
California	$	260.4	41,588	$	258.4	40,704	$	251.4	39,264	$	262.0	39,610
Florida	41.1		8,275	41.1		7,989	38.6		7,303	37.9		6,898
New York	25.0		7,382	24.5		7,307	25.6		6,724	26.7		6,657
Other (43 states and D.C.)	252.1		57,216	247.4		55,350	237.7		51,481	251.3		50,341
Total in-force	$	578.6	114,461	$	571.4	111,350	$	553.3	104,772	$	577.9	103,506
Final audit premium	15.6		—	13.1		—	6.5		—	(5.8)		—
Total in-force, including final audit premium	$	594.2	114,461	$	584.5	111,350	$	559.8	104,772	$	572.1	103,506

Item 2.  Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations

You should read the following discussion and analysis in conjunction with our consolidated financial statements and the related notes thereto included in Item 1 of Part I. Unless otherwise indicated, all references to "we," "us," "our," "the Company," or similar terms refer to EHI, together with its subsidiaries. In this Quarterly Report on Form 10-Q, 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 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 SEC, including the risks detailed in the Company's Annual Reports on Form 10-K and in Part II, Item 1A of this report. 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.

Overview

We are a Nevada holding company. Through our insurance subsidiaries, we provide workers’ compensation insurance coverage to select, small businesses in low to medium hazard industries. Workers’ compensation insurance is provided under a statutory system wherein most employers are required to provide coverage for their employees’ medical, disability, vocational rehabilitation, and/or death benefit costs for work-related injuries or illnesses. We provide workers’ compensation insurance throughout the United States, with a concentration in California, where 45% of our in-force premiums are generated. Our revenues are primarily comprised of net premiums earned, net investment income, and net realized and unrealized gains on investments.

We target small businesses, as we believe that this market is traditionally characterized by fewer competitors, more attractive pricing, and stronger persistency when compared to the U.S. workers’ compensation insurance industry in general. We believe we are able to price our policies at levels that are competitive and profitable over the long-term given our expertise in underwriting and claims handling in this market segment. Our underwriting approach is to consistently underwrite small business accounts at appropriate and competitive prices without sacrificing long-term profitability and stability for short-term top-line revenue growth.

Our strategy is to pursue profitable growth opportunities across market cycles and maximize total investment returns within the constraints of prudent portfolio management. We pursue profitable growth opportunities by focusing on disciplined underwriting and claims management, utilizing medical provider networks designed to produce superior medical and indemnity outcomes, establishing and maintaining strong, long-term relationships with independent insurance agencies, and developing important alternative distribution channels. We believe that developing and implementing new technologies and capabilities will fundamentally transform and enhance the digital experience of our customers, including: (i) continued investments in new technology, data analytics, and process improvement capabilities focused on improving the agent experience and enhancing agent efficiency; and (ii) the further development of digital insurance solutions, including direct-to-customer workers’

24

compensation coverage. We also continue to execute a number of ongoing business initiatives, including: achieving internal and customer-facing business process excellence; diversifying our risk exposure across geographic markets; and utilizing a multi-company pricing platform and territory-specific pricing.

The insurance industry is highly competitive, and there is significant competition in the national workers’ compensation industry that is based on price and quality of services. We compete with other specialty workers’ compensation carriers, state agencies, multi-line insurance companies, professional employer organizations, self-insurance funds, and state insurance pools.

Coronavirus Disease (COVID-19) Update

The COVID-19 pandemic recently reached the two-year mark and challenges experienced during the recovery have continued to cause disruptions in business activity due to supply chain interruptions, challenges with the labor market, inflationary pressures, and overall general economic instability. All states, including California, where we generated 45% of our in-force premiums as of March 31, 2022, have experienced adverse economic impacts from the lingering uncertainties of the COVID-19 pandemic. Certain classes of business that we insure, especially those related to the restaurant and hospitality industries, continue to be affected by these challenges.

Nonetheless, we closed another quarter with a record number of policies in-force, which demonstrates that our policyholders have endured the pandemic and small businesses are actively shopping for workers' compensation coverage. Our year-over-year new and renewal business premiums have increased, in addition to audit premium increases, which are signs of overall Company growth. As labor market shortages improve, we expect that rising payrolls will continue to bring further improvement to our top line. Our strong balance sheet and operational flexibility have allowed us to successfully navigate through the ongoing impacts of the COVID-19 pandemic, and we have continued to pursue and advance the significant investments that we have made in delivering a superior customer experience for our independent and digital agents.

We continually review and adjust to changes in our policyholders' payrolls, economic conditions, and seasonality, as experience develops or new information becomes known. Any such adjustments are included in our current operations and are made periodically through mid-term endorsements and/or premium audits. We increased our final audit premium accruals by a further $1.0 million during the three months ended March 31, 2022, as our payroll exposure improved with the labor market strengthening.

We continue to experience overall declines in the frequency of compensable indemnity claims versus those generally experienced before the COVID-19 pandemic. However, despite the emergence of vaccinations and businesses operating at more normalized rates, the continued impact of the COVID-19 pandemic, including any increases in infection rates, new variants and renewed governmental actions to combat the COVID-19 pandemic, cannot be estimated at this time.

25

Results of Operations

Our results of operations are as follows:

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Gross premiums written	$	172.4	$	148.3
Net premiums written	$	170.4	$	146.9
Net premiums earned	$	150.2	$	133.9
Net investment income	19.1		18.4
Net realized and unrealized (losses) gains on investments	(17.3)		10.9
Other income	—		0.4
Total revenues	152.0		163.6
Losses and LAE	94.2		69.6
Commission expense	20.9		16.8
Underwriting and general and administrative expenses	39.3		46.6
Interest and financing expenses	0.1		0.1
Other expenses	—		2.9
Total expenses	154.5		136.0
Income tax (benefit) expense	(0.2)		4.5
Net (loss) income	$	(2.3)	$	23.1

Overview

Our net loss was $2.3 million for the three months ended March 31, 2022, compared to net income of $23.1 million for the corresponding period of 2021. The key factors that affected our financial performance during the three months ended March 31, 2022, compared to the same period of 2021 included:

•Net premiums earned increased 12.2%;

•Losses and LAE increased 35.3%;

•Underwriting and general and administrative expenses decreased 15.7%;

•Net investment income increased 3.8%; and

•Net realized and unrealized (losses) gains on investments were $(17.3) million compared to $10.9 million.

Summary of Consolidated Financial Results

Gross Premiums Written

Gross premiums written were $172.4 million for the three months ended March 31, 2022, compared to $148.3 million for the corresponding period of 2021. The year-over-year change was primarily related to our Employers segment. See "—Summary of Financial Results by Segment —Employers".

Net Premiums Written

Net premiums written are gross premiums written less reinsurance premiums ceded.

Net Premiums Earned

Net premiums earned are primarily a function of the amount and timing of net premiums previously written.

Net Investment Income and Net Realized and Unrealized Gains and Losses on Investments

We invest in fixed maturity securities, equity securities, other invested assets, short-term investments, and cash equivalents. Net investment income includes interest and dividends earned on our invested assets and amortization of premiums and discounts on our fixed maturity securities, less bank service charges and custodial and portfolio management fees. We have established a high quality/short duration bias in our investment portfolio.

Net investment income increased 3.8% for the three months ended March 31, 2022, compared to the same period of 2021. The increase was primarily due to higher bond yields.

26

Realized and unrealized gains and losses on our investments are reported separately from our net investment income. Realized gains and losses on investments include the gain or loss on a security at the time of sale compared to its original or adjusted cost (equity securities) or amortized cost (fixed maturity securities). Realized losses are also recognized for changes in our current expected credit loss (CECL) allowance or when securities are written down as a result of an other-than-temporary impairment. Changes in fair value of equity securities and other invested assets are also included in Net realized and unrealized gains (losses) on investments on our Consolidated Statements of Comprehensive (Loss) Income.

Net realized and unrealized (losses) gains on investments were $(17.3) million for three months ended March 31, 2022, compared to $10.9 million for the corresponding period of 2021. The net realized and unrealized gains on investments for the three months ended March 31, 2022 and 2021 included $(17.0) million and $10.1 million of net realized and unrealized (losses) gains on equity securities and other investments, respectively, and $(0.3) million and $0.8 million of net realized (losses) gains on fixed maturity securities, respectively.

The net unrealized investment losses we experienced on our equity and fixed maturity securities during the three months ended March 31, 2022 were primarily the result of significant volatility in financial markets resulting from increasing inflationary concerns, rising market interest rates and recent world events. The net investment losses on our fixed maturity securities for the three months ended March 31, 2022 included a $2.0 million increase in our allowance for CECL.

The net unrealized investment gains on our equity securities during the three months ended March 31, 2021 were largely consistent with the performance of U.S. equity markets. The net unrealized losses on our fixed maturity securities during the three months ended March 31, 2021 were largely the result of increases in market interest rates during the period. The net investment losses on our fixed maturity securities for the three months ended March 31, 2021 included a $0.5 million decrease to our allowance for CECL.

Additional information regarding our Investments is set forth under “—Liquidity and Capital Resources—Investments.”

Other Income

Other income consists of net gains and losses on fixed assets, non-investment interest, installment fee revenue, and other miscellaneous income. Beginning in 2022, installment fee revenue was allocated to net investment income.

Losses and LAE

Losses and LAE represents our largest expense item and includes claim payments made, amortization of the Deferred Gain, LPT Reserve Adjustments, LPT Contingent Commission Adjustments, estimates for future claim payments and changes in those estimates for current and prior periods, and costs associated with investigating, defending, and adjusting claims. The quality of our financial reporting depends in large part on accurately predicting our losses and LAE, which are inherently uncertain as they are estimates of the ultimate cost of individual claims based on actuarial estimation techniques.

Our current accident year loss estimate considered overall declines in the frequency of compensable indemnity claims versus those generally experienced before the COVID-19 pandemic while recognizing the impacts of the COVID-19 pandemic, including the potential for further expansions or permanent extensions of presumed compensability for COVID-19 in certain jurisdictions. Total claims costs have also been reduced by cost savings associated with increased claims settlement activity that has continued into the first quarter of 2022. We believe that our current accident year loss estimate is adequate; however, ultimate losses will not be known with any certainty for many years. See "—Summary of Financial Results by Segment —Employers".

Commission Expenses

Commission expenses include direct commissions to our agents and brokers, including our partnerships and alliances, for the premiums that they produce for us, as well as incentive payments, other marketing costs, and fees. See "—Summary of Financial Results by Segment —Employers".

Underwriting and General and Administrative Expenses

Underwriting expenses represent those costs that we incur to underwrite and maintain the insurance policies we issue, excluding commissions. Direct underwriting expenses, such as premium taxes, policyholder dividends, and those expenses that vary directly with the production of new or renewal business, are recognized as the associated premiums are earned. Indirect underwriting expenses, such as the operating expenses of each of the Company's subsidiaries, do not vary directly with the production of new or renewal business and are recognized as incurred.

General and administrative expenses of the holding company are excluded in determining the underwriting expense ratios of our reportable segments.

27

Interest and Financing Expenses

Interest and financing expenses include credit facility fees and interest, letter of credit fees, finance lease interest, and other financing fees.

Other Expenses

During the three months ended March 31, 2021, we recorded charges of $2.9 million of employee severance costs resulting from a first quarter 2021 reduction-in-force. This action was taken to better align our expenses with our revenues.

Income Tax (Benefit) Expense

Income tax (benefit) expense was $(0.2) million for the three months ended March 31, 2022, compared to $4.5 million for the corresponding period of 2021. The effective tax rates were 8.0% for the three months ended March 31, 2022, compared to 16.3% for the corresponding period of 2021. 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.

Summary of Financial Results by Segment

EMPLOYERS

The components of Employers' net income before income taxes are set forth in the following table:

	Three Months Ended
	March 31,
	2022			2021
	(dollars in millions)
Gross premiums written	$	171.2		$	148.0
Net premiums written	$	169.2		$	146.6
Net premiums earned	$	149.6		$	133.9
Net investment income	17.6			17.6
Net realized and unrealized (losses) gains on investments	(15.6)			10.8
Other income	—			0.4
Total revenues	151.6			162.7
Losses and LAE	95.9			71.7
Commission expense	20.9			16.8
Underwriting expenses	32.8			37.3
Other expenses	—			2.9
Total expenses	149.6			128.7
Net income before income taxes	$	2.0		$	34.0
Underwriting income	$	—		$	8.1
Combined ratio	100.0		%	93.9		%

Underwriting Results

Gross Premiums Written

Gross premiums written were $171.2 million for the three months ended March 31, 2022, compared to $148.0 million for the corresponding period of 2021. The year-over-year increase was primarily driven by increases in new business premiums and final audit premiums, partially offset by declines in average policy size. We also increased our final audit premium accruals by a further $1.0 million during the three months ended March 31, 2022, as our payroll exposure improved with the labor market strengthening. We have experienced year-over-year increases in new business submissions, quotes and binds in the majority of the states in which we operate. In addition, our retention rate has remained strong throughout the first quarter of 2022.

Net premiums written were $169.2 million for the three months ended March 31, 2022, compared to $146.6 million for the corresponding period of 2021. Reinsurance premiums ceded were $2.0 million for the three months ended March 31, 2022, compared to $1.4 million for the corresponding period of 2021.

28

Net Premiums Earned

Net premiums earned were $149.6 million for the three months ended March 31, 2022, compared to $133.9 million for the corresponding period of 2021.

The following table shows the percentage change in Employers' in-force premiums, policy count, average policy size, and payroll exposure upon which our premiums are based, overall, for California, where 45% of our premiums were generated, and for all other states, excluding California:

	As of March 31, 2022
	Year-to-Date Change						Year-Over-Year Change
	Overall		California		All Other States		Overall		California		All Other States
In-force premiums	1.1	%	0.5	%	1.6	%	4.3	%	3.4	%	5.0	%
In-force policy count	2.5		1.6		3.0		8.3		5.5		10.0
Average in-force policy size	(1.3)		(1.0)		(1.4)		(3.7)		(2.0)		(4.5)
In-force payroll exposure	3.0		2.4		3.4		12.6		13.7		12.1

In-force premiums represent the estimated annual premium on all policies that are active and in-force on such date. More specifically, in-force premiums include policy endorsements but exclude estimated final audit premiums. We focus on in-force premium because it represents premium that is available for renewal in the future. The following table shows Employers' in-force premiums and number of policies in-force for each of our largest states and all other states combined for the periods presented:

	March 31, 2022			December 31, 2021			March 31, 2021			December 31, 2020
State	In-force Premiums		Policies In-force	In-force Premiums		Policies In-force	In-force Premiums		Policies In-force	In-force Premiums		Policies In-force
	(dollars in millions)
California	$	259.8	41,349	$	258.4	40,704	$	251.2	39,199	$	262.0	39,610
Florida	40.9		8,159	41.1		7,989	38.5		7,255	37.9		6,898
New York	24.7		7,215	24.5		7,307	25.5		6,681	26.7		6,657
Other (43 states and D.C.)	251.0		56,199	245.9		54,164	237.5		51,155	251.1		50,124
Total in-force	$	576.4	112,922	$	569.9	110,164	$	552.7	104,290	$	577.7	103,289
Final audit premium	15.6		—	13.1		—	6.5		—	(5.8)		—
Total in-force, including final audit premium	$	592.0	112,922	$	583.0	110,164	$	559.2	104,290	$	571.9	103,289

We continue to actively seek new partnerships and alliances to foster organic growth within our target classes of business. Alternative distribution channels generated $163.9 million and $147.6 million, or 28.4% and 26.7%, of our in-force premiums as of March 31, 2022 and 2021, respectively. We believe that offering payroll-related products and services through these relationships contributes to higher retention rates than business generated by our independent agents. These relationships also allow us to access new customers that we may not have access to through our independent agent distribution channel. We continue to actively seek new partnerships and alliances.

Losses and LAE, Commission Expenses, and Underwriting Expenses

The following table presents calendar year combined ratios for our Employers segment.

	Three Months Ended
	March 31,
	2022		2021
Loss and LAE ratio	64.1	%	53.5	%
Commission expense ratio	14.0		12.5
Underwriting expense ratio	21.9		27.9
Combined Ratio	100.0	%	93.9	%

Loss and LAE Ratio. We analyze our loss and LAE ratios on both a calendar year and accident year basis.

The calendar year loss and LAE ratio is calculated by dividing the losses and LAE recorded during the calendar year, regardless of when the underlying insured event occurred, by the net premiums earned during that calendar year. The calendar year loss and LAE ratio includes changes made during the calendar year in reserves for losses and LAE established for insured events

29

occurring in the current and prior years. The calendar year loss and LAE ratio for a particular year will not change in future periods.

The accident year loss and LAE ratio is calculated by dividing cumulative losses and LAE for reported events that occurred during a particular year by the net premiums earned for that year. The accident year loss and LAE ratio for a particular year can decrease or increase when recalculated in subsequent periods as the reserves established for insured events occurring during that year develop favorably or unfavorably. The accident year loss and LAE ratio is based on our statutory financial statements and is not derived from our GAAP financial information.

We analyze our calendar year loss and LAE ratio to measure our profitability in a particular year and to evaluate the adequacy of our premium rates charged in a particular year to cover expected losses and LAE from all periods, including development (whether favorable or unfavorable) of reserves established in prior periods. In contrast, we analyze our accident year loss and LAE ratios to evaluate our underwriting performance and the adequacy of the premium rates we charged in a particular year in relation to ultimate losses and LAE from insured events occurring during that year. The loss and LAE ratios provided in this report are on a calendar year basis, except where they are expressly identified as accident year loss and LAE ratios.

The table below reflects prior accident year loss and LAE reserve adjustments and the impact to loss ratio.

	Three Months Ended
	March 31,
	2022			2021
	(dollars in millions)
Losses and LAE	$	95.9		$	71.7
Prior accident year favorable development, net	—			13.9
Current accident year losses and LAE	$	95.9		$	85.6
Current accident year loss and LAE ratio	64.1		%	63.9		%

The increase in our total losses and LAE during the three months ended March 31, 2022, as compared to the same period of 2021, was primarily due to higher earned premium and this amount was not impacted by any prior year loss reserve development. Favorable prior year accident loss reserve development totaled $13.9 million during the three months ended March 31, 2021, which included $0.5 million of unfavorable development on our assigned risk business.

The favorable prior accident year loss development recognized during the three months ended March 31, 2021 was primarily the result of observed favorable paid loss cost trends across related primarily to accident years 2017 and prior.

Our current accident year loss and LAE ratio was 64.1% for the three months ended March 31, 2022, compared to 63.9% for the corresponding period of 2021. The increase in our current accident year ratio during the three months ended March 31, 2022 was primarily due to a slight decrease in our rate on voluntary business. However, our current accident year loss and LAE ratio continues to reflect the impact of our key business initiatives: an emphasis on the accelerated settlement of open claims; diversifying our risk exposure across geographic markets; and leveraging data-driven strategies to target, underwrite, and price profitable classes of business across all of our markets.

Commission Expense Ratio. The commission expense ratio was 14.0% for the three months ended March 31, 2022, compared to 12.5% for the corresponding period of 2021. Our commission expenses were $20.9 million for the three months ended March 31, 2022, compared to $16.8 million for the corresponding period of 2021. Our commission expense ratio increased 1.5 percentage points, or 12.0%, for the three months ended March 31, 2022, compared to the same period of 2021, resulting from: (i) a higher concentration of partnership and alliance business, which is subject to a higher commission rate, higher agency incentives and increased commission expense on new business writings; and (ii) a reversal of commissions relating to non-compliant and uncollectible premium recorded in the first quarter of 2021.

Underwriting Expenses Ratio. The underwriting expense ratio was 21.9% for the three months ended March 31, 2022, compared to 27.9% for the corresponding period of 2021. Our underwriting expenses were $32.8 million for the three months ended March 31, 2022, compared to $37.3 million for the corresponding period of 2021.

During the three months ended March 31, 2022, our compensation-related expenses decreased $3.1 million and our professional fees decreased $0.5 million, each compared to the same period of 2021. These decreases in our fixed underwriting expenses resulted from continued targeted expense reductions and employee reductions and departures that occurred in 2021.

Underwriting Income

Underwriting income for our Employers segment was zero for the three months ended March 31, 2022, compared to $8.1 million for the corresponding period of 2021. Underwriting income or loss is determined by deducting losses and LAE, commission expense, and underwriting expenses from net premiums earned.

30

Non-Underwriting Income and Expenses

For a further discussion of non-underwriting related income and expenses, including Net Investment Income and Net Realized and Unrealized Gains and Losses on Investments, Other Income, Interest and Financing Expenses and Other Expenses see "—Results of Operations —Summary of Consolidated Financial Results".

CERITY

The components of Cerity's net loss before income taxes are set forth in the following table:

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Gross premiums written	$	1.2	$	0.3
Net premiums written	$	1.2	$	0.3
Net premiums earned	$	0.6	$	—
Net investment income	0.7		0.7
Net realized and unrealized (losses) gains on investments	(0.4)		0.1
Total revenues	0.9		0.8
Losses and LAE	0.4		—
Underwriting expenses	3.2		3.7
Total expenses	3.6		3.7
Net loss before income taxes	$	(2.7)	$	(2.9)
Underwriting loss	$	(3.0)	$	(3.7)
Combined ratio	n/m		n/m
n/m - not meaningful

Underwriting Results

Gross Premiums Written and Net Premiums Written

Gross premiums written and net premiums written were $1.2 million for the three months ended March 31, 2022, compared to $0.3 million for the corresponding period of 2021.

Net Premiums Earned

Net premiums earned were $0.6 million for the three months ended March 31, 2022, compared to less than $0.1 million for the corresponding period of 2021.

Underwriting Expenses

Underwriting expenses for our Cerity segment were $3.2 million for the three months ended March 31, 2022, compared to $3.7 million for the corresponding period of 2021. During the three months ended March 31, 2022, our compensation-related expenses decreased $0.5 million, compared to the corresponding period of 2021.

Underwriting Loss

Underwriting losses for our Cerity segment were $3.0 million for the three months ended March 31, 2022, compared to $3.7 million for the corresponding period of 2021. Underwriting income or loss is determined by deducting losses and LAE, commission expense, and underwriting expenses from net premiums earned.

Non-Underwriting Income

For a further discussion of non-underwriting related income, including Net Investment Income and Net Realized and Unrealized Gains and Losses on Investments, see "–Results of Operations –Summary of Consolidated Financial Results Consolidated."

31

CORPORATE AND OTHER

The components of Corporate and Other's net loss before income taxes are set forth in the following table:

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Net investment income	0.8		0.1
Net realized and unrealized losses on investments	(1.3)		—
Total (losses) revenues	(0.5)		0.1
Losses and LAE - LPT	(2.1)		(2.1)
General and administrative expenses	3.3		5.6
Interest and financing expenses	0.1		0.1
Total expenses	1.3		3.6
Net loss before income taxes	$	(1.8)	$	(3.5)

Losses and LAE - LPT

The table below reflects the impact of the LPT on Losses and LAE, which are recorded as a reduction to Losses and LAE incurred on our Consolidated Statements of Comprehensive (Loss) Income.

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Amortization of the Deferred Gain related to losses	$	1.7	$	1.7
Amortization of the Deferred Gain related to contingent commission	0.4		0.4
Total impact of the LPT	$	2.1	$	2.1

General and Administrative Expenses

General and administrative expenses primarily consist of compensation related expenses, professional fees, and other corporate expenses at the holding company. General and administrative expenses were $3.3 million for the three months ended March 31, 2022, compared to $5.6 million for the corresponding period of 2021.

During the three months ended March 31, 2022, compensation-related expenses decreased $2.3 million compared to the same period of 2021. This decrease related primarily to the acceleration of share-based awards in connection with the retirement of our prior Chief Executive Officer, which served to increase our compensation-related expenses during the three months ended March 31, 2021.

Non-Underwriting Income and Expenses

For a further discussion of non-underwriting related income and expenses, including Net Investment Income and Net Realized and Unrealized Gains and Losses on Investments, and Interest and Financing Expenses see "—Results of Operations —Summary of Consolidated Financial Results".

Liquidity and Capital Resources

The COVID-19 pandemic disruptions on the U.S. economy, our current operations and our investment portfolio have, at times, been significant. Nonetheless we believe that the liquidity available to our holding company and its operating subsidiaries remains adequate and we do not currently foresee a need to: (i) suspend ordinary dividends or forego repurchases of our common stock; (ii) seek a capital infusion; or (iii) seek any material non-investment asset sales. Furthermore, the holding company has no outstanding debt obligations and its operating subsidiaries have minimal interest-bearing debt obligations.

Holding Company Liquidity

We are a holding company and our ability to fund our operations is contingent upon existing capital and the ability of our subsidiaries to pay dividends up to the holding company. Payment of dividends by our insurance subsidiaries is restricted by state insurance laws and regulations, including laws establishing minimum solvency and liquidity thresholds. We require cash

32

to pay stockholder dividends, repurchase common stock, provide additional surplus to our insurance subsidiaries, and fund our operating expenses.

Our insurance subsidiaries’ ability to pay dividends and distributions to their parent is based on reported capital, surplus, and dividends paid within the prior twelve months.

During the first quarter of 2022, ECIC made a $120.0 million return of capital payment to its parent company, who in turn distributed that amount to the holding company. As a result of that distribution, ECIC cannot pay dividends through February 15, 2023, without prior regulatory approval.

During the first quarter of 2022, EICN made a $9.7 million dividend payment to its parent company, who in turn distributed that amount to the holding company. As a result of that payment, EICN cannot pay any dividends for the remainder of 2022 without prior regulatory approval.

Total cash and investments at the holding company were $149.7 million at March 31, 2022, consisting of $81.6 million of cash and cash equivalents, $9.4 million of fixed maturity securities, and $58.7 million of equity securities.

On December 15, 2020, EHI entered into a Credit Agreement (the Credit Agreement) with a syndicate of financial institutions. The Credit Agreement provides EHI with a $75.0 million three-year revolving credit facility. Borrowings under the Credit Agreement may be used for working capital and general corporate purposes. Pursuant to the Credit Agreement, EHI has the option to request an increase of the credit available under the facility, up to a maximum facility amount of $125.0 million, subject to the consent of lenders and the satisfaction of certain conditions. EHI had no outstanding advances under the Credit Agreement at March 31, 2022.

The interest rates applicable to loans under the Credit Agreement are generally based on a base rate plus a specified margin, ranging from 0.25% to 1.25%, or the Eurodollar rate (which will convert to an alternative reference rate once LIBOR is discontinued) plus a specified margin, ranging from 1.25% to 2.25%. Total interest paid and fees incurred pursuant to the Credit Agreement during the three months ended March 31, 2022 totaled $0.1 million.

The Credit Agreement contains covenants that require us to maintain: (i) a minimum consolidated net worth of no less than 70% of our stockholders’ equity as of September 30, 2020, plus 50% of our aggregate net income thereafter; and (ii) a debt to total capitalization ratio of no more than 35%, in each case as determined in accordance with the Credit Agreement. At March 31, 2022, we were in compliance with all debt covenants.

Operating Subsidiaries’ Liquidity

The primary sources of cash for our operating subsidiaries, which include our insurance and other operating subsidiaries, are premium collections, investment income, sales and maturities of investments, proceeds from FHLB advances, and reinsurance recoveries. The primary uses of cash for our operating subsidiaries are payments of losses and LAE, commission expenses, underwriting and general and administrative expenses, ceded reinsurance, repayments of FHLB advances, investment purchases and dividends paid to their parent.

Total cash and investments held by our operating subsidiaries was $2,598.0 million at March 31, 2022, consisting of $49.1 million of cash and cash equivalents, $2,261.6 million of fixed maturity securities, $243.7 million of equity securities, $40.4 million of other invested assets, and $3.2 million of short-term investments. Sources of immediate and unencumbered liquidity at our operating subsidiaries as of March 31, 2022 consisted of $48.9 million of cash and cash equivalents, $221.4 million of publicly traded equity securities whose proceeds are available within three business days, $791.0 million of highly liquid fixed maturity securities whose proceeds are available within three business days, and $3.2 million of short-term investments whose proceeds are available within three business days. We believe that our subsidiaries’ liquidity needs over the next 24 months will be met with cash from operations, investment income, and maturing investments.

EICN, ECIC, EPIC, and EAC are members of the FHLB. Membership allows our subsidiaries access to collateralized advances, which may be used to support and enhance liquidity management. The amount of advances that may be taken is dependent on statutory admitted assets on a per company basis.

During the first quarter of 2022, our insurance subsidiaries received advances of $60.0 million under the FHLB Standard Credit Program. These advances are collateralized by eligible investment securities. The interest rate on these advances is adjusted daily per the Secure Overnight Funding Rate (SOFR), published by the Federal Reserve. As of March 31, 2022, the Company's weighted average daily interest rate on these advances was 0.33%. Interest paid during the three months ended March 31, 2022 was less than $0.1 million. Furthermore, these advances can be repaid at any time without prepayment penalties or additional fees.

During the second quarter of 2020, the FHLB announced its Zero Interest Recovery Advance Program (the FHLB Advance Program). The FHLB Advance Program is a zero percent interest, six-month or one-year credit product that members can use to provide immediate relief to property owners, businesses, and other customers struggling with the financial impacts of the COVID-19 pandemic. Each member was allocated up to $10.0 million in advances under the FHLB Advance Program.

33

On May 11, 2020, our insurance subsidiaries received a total of $35.0 million of advances under the FHLB Advance Program. The advances were secured by collateral previously pledged to the FHLB by our insurance subsidiaries in support of our existing collateralized advance facility, which has been reduced by the amount of these outstanding advances. Our insurance subsidiaries repaid $15.0 million of such advances on November 4, 2020, $5.0 million on March 31, 2021, and $15.0 million on May 4, 2021. As of March 31, 2022, we have no outstanding advances.

FHLB membership also allows our insurance subsidiaries access to standby Letter of Credit Agreements. On January 26, 2021, EPIC chose to amend its existing Letter of Credit Agreement to decrease its credit amount to $10.0 million. On August 13, 2021, EAC and ECIC chose to amend their existing Letter of Credit Agreements to decrease their respective credit amounts to $25.0 million and $35.0 million. The amended Letter of Credit Agreements will expire on March 31, 2023. The Letter of Credit Agreements may only be used to satisfy, in whole or in part, insurance deposit requirements with the State of California and are fully secured with eligible collateral at all times (See Note 10).

We purchase reinsurance to protect us against the costs of severe claims and catastrophic events, including pandemics. On July 1, 2021, we entered into a new reinsurance program that is effective through June 30, 2022. The reinsurance program consists of one treaty covering excess of loss and catastrophic loss events in four layers of coverage. Our reinsurance coverage is $190.0 million in excess of our $10.0 million retention on a per occurrence basis, subject to certain exclusions. We believe that our reinsurance program meets our needs and that we are sufficiently capitalized. We further believe that we will not trigger a recovery under our current excess of loss reinsurance program in connection with the COVID-19 pandemic.

Various state laws and regulations require us to hold investment securities or letters of credit on deposit with certain states in which we do business. Securities having a fair value of $819.9 million and $861.4 million were on deposit at March 31, 2022 and December 31, 2021, respectively. These laws and regulations govern both the amount and types of investment securities that are eligible for deposit. Additionally, standby letters of credit from the FHLB have been issued in lieu of $70.0 million securities on deposit at both March 31, 2022 and December 31, 2021.

Certain reinsurance contracts require company funds to be held in trust for the benefit of the ceding reinsurer to secure the outstanding liabilities we assumed. The fair value of fixed maturity securities held in trust for the benefit of our ceding reinsurers was $3.0 million and $3.1 million at March 31, 2022 and December 31, 2021, respectively.

Sources of Liquidity

We monitor the cash flows of each of our subsidiaries individually, as well as collectively as a consolidated group. We use trend and variance analyses to project future cash needs, making adjustments to our forecasts as appropriate.

The table below shows our net cash flows for the three months ended:

	March 31,
	2022		2021
	(in millions)
Cash, cash equivalents, and restricted cash provided by (used in):
Operating activities	$	16.8	$	(10.8)
Investing activities	(6.1)		(39.8)
Financing activities	44.7		(24.4)
Increase (decrease) in cash, cash equivalents, and restricted cash	$	55.4	$	(75.0)

For additional information regarding our cash flows, see Item 1, Consolidated Statements of Cash Flows.

Operating Activities

Net cash provided by operating activities for the three months ended March 31, 2022 included net premiums received of $157.3 million and investment income received of $16.7 million. These operating cash inflows were partially offset by net claims payments of $90.4 million, underwriting and general and administrative expenses paid of $45.8 million, and commissions paid of $20.9 million.

Net cash used in operating activities for the three months ended March 31, 2021 included net premiums received of $135.7 million and investment income received of $18.0 million. These operating cash inflows were more than offset by net claims payments of $101.9 million, underwriting and general and administrative expenses paid of $44.1 million, and commissions paid of $19.0 million.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2022 and March 31, 2021 was primarily related to the investment of premiums received and reinvestment of funds from investment sales, maturities, redemptions, and interest income. These investing cash outflows were partially offset by investment sales, maturities and redemptions whose proceeds

34

were used to fund claims payments, underwriting and general and administrative expenses, stockholder dividend payments, and common stock repurchases.

Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2022 was primarily related to FHLB advances received partially offset by common stock repurchases and stockholder dividend payments. During the three months ended March 31, 2022, we also borrowed and subsequently repaid $10.0 million under the Credit Agreement.

Net cash used in financing activities for the three months ended March 31, 2021 was primarily related to common stock repurchases, stockholder dividend payments, and repayments of FHLB advances. During the three months ended March 31, 2021, we also borrowed and subsequently repaid $12.0 million under the Credit Agreement.

Dividends

We paid $7.4 million and $7.7 million in dividends to our stockholders for the three months ended March 31, 2022 and 2021, respectively. The declaration and payment of future dividends to common stockholders will be at the discretion of our Board of Directors and will depend upon many factors including our financial position, capital requirements of our operating subsidiaries, legal and regulatory requirements, and any other factors our Board of Directors deem relevant. On April 27, 2022, the Board of Directors declared a $0.26 dividend per share, payable May 25, 2022, to stockholders of record on May 11, 2022. On April 27, 2022, the Board of Directors also declared a special dividend of $1.00 per share. The dividend is payable on June 15, 2022 to stockholders of record as of June 1, 2022.

Share Repurchases

We repurchased 174,172 shares of our common stock for $6.7 million during the three months ended March 31, 2022. Future repurchases of our common stock will be at the discretion of our Board of Directors and will depend upon many factors, including our financial position, capital requirements of our operating subsidiaries, general business and social economic conditions, legal, tax, regulatory, and/or contractual restrictions, and any other factors our Board of Directors deems relevant.

Capital Resources

As of March 31, 2022, the capital resources available to us consisted of $1,109.3 million of stockholders’ equity and the $112.3 million Deferred Gain.

Contractual Obligations and Commitments

Other than operating expenses, current and long-term cash requirements include the following contractual obligations and commitments as of March 31, 2022:

Leases

We have entered into lease arrangements for certain equipment and facilities. As of March 31, 2022, we had lease payment obligations of $18.1 million, with $3.4 million payable within 12 months.

Other Purchase Obligations

We have other purchase obligations that primarily consist of non-cancellable obligations to acquire capital assets, commitments for information technology and related services, software acquisition and license commitments and other legally binding agreements to purchase services that are to be used in our operations. As of March 31, 2022, we had other purchase obligations of $19.7 million, with $10.3 million payable within 12 months.

Unfunded Investment Commitments

We have investments in private equity limited partnerships that require capital distributions to fund the investments and can be called at any time deemed necessary. As of March 31, 2022, we had unfunded investment commitments of $44.7 million. In April 2022, we entered into an additional investment in a private equity limited partnership with an unfunded commitment amount totaling $15.0 million.

FHLB Advances

We received advances of $60.0 million under the FHLB Standard Credit Program and these advances can be repaid at any time without prepayment penalties or additional fees.

Unpaid Losses and LAE Expenses

We have developed unpaid losses and LAE expense payment patterns that are computed based on historical information. Our calculation of loss and LAE expense payments by period is subject to the same uncertainties associated with determining the level of reserves and to the additional uncertainties arising from the difficulty of predicting when claims (including claims that have not yet been reported to us) will be paid. Actual payments of losses and LAE by period will vary, perhaps materially, to

35

the extent that current estimates of losses and LAE expense vary from actual ultimate claims amounts due to variations between expected and actual payout patterns. As of March 31, 2022, we had unpaid losses and LAE expense payments patterns of $1,981.9 million, with $304.6 million payable within 12 months.

The unpaid losses and LAE expense payments patterns are gross of reinsurance recoverables for unpaid losses. As of March 31, 2022, we had reinsurance recoverables on unpaid losses and LAE of $471.7 million, with recoveries of $31.2 million within 12 months.

Investments

Our investment portfolio is structured to support our need for: (i) optimizing our risk-adjusted total returns; (ii) providing adequate liquidity; (iii) facilitating financial strength and stability; and (iv) ensuring regulatory and legal compliance. These investments provide a steady source of income, which may fluctuate with changes in interest rates and our current investment strategies.

As of March 31, 2022, our investment portfolio consisted of 87% fixed maturity securities. We strive to limit the interest rate risk associated with fixed maturity investments by managing the duration of these securities. Our fixed maturity securities (excluding cash and cash equivalents) had a duration of 3.8 at March 31, 2022. To minimize interest rate risk, our portfolio is weighted toward short-term and intermediate-term bonds; however, our investment strategy balances consideration of duration, yield, and credit risk. Our investment guidelines require that the minimum weighted average quality of our fixed maturity securities portfolio be “A+,” using ratings assigned by Standard & Poor’s (S&P) or an equivalent rating assigned by another nationally recognized statistical rating agency. Our fixed maturity securities portfolio had a weighted average quality of “A+” as of March 31, 2022. Other securities within fixed maturity securities consist of bank loans, which are classified as AFS and are reported at fair value.

Our investment portfolio also contains equity securities. We strive to limit the exposure to equity price risk associated with publicly traded equity securities by diversifying our holdings across several industry sectors. These equity securities had a fair value of $296.8 million at March 31, 2022, which represented 11.5% of our investment portfolio at that time. We also have a $5.6 million investment in FHLB stock which we record at cost. We receive periodic dividends from the FHLB for this investment, when declared, which can vary from period to period.

Our Other invested assets made up 2% of our investment portfolio as of March 31, 2022 and include private equity limited partnerships. Our investments in private equity limited partnerships totaled $40.4 million at March 31, 2022 and are generally not redeemable by the investees and cannot be sold without prior approval of the general partner. These investments have a fund term of 10 to 12 years, subject to two or three one-year extensions at the general partner’s discretion. We expect to receive distributions of proceeds from dividends and interest from fund investments, as well as from the disposition of a fund investment or portion thereof, from time-to-time during the full course of the fund term. As of March 31, 2022, we had unfunded commitments to these private equity limited partnerships totaling $44.7 million.

We believe that our current asset allocation meets our strategy to preserve capital for claims and policy liabilities and to provide sufficient capital resources to support and grow our ongoing insurance operations.

The following table shows the estimated fair value, the percentage of the fair value to total invested assets, and the average ending book yield, (each based on the book value of each category of invested assets) as of March 31, 2022.

Category	Estimated Fair Value		Percentage of Total		Book Yield
	(in millions, except percentages)
U.S. Treasuries	$	63.2	2.5	%	1.8	%
U.S. Agencies	2.3		0.1		2.9
States and municipalities	372.9		14.5		2.9
Corporate securities	1,045.1		40.6		3.3
Residential mortgage-backed securities	289.4		11.3		2.3
Commercial mortgage-backed securities	66.5		2.6		3.2
Asset-backed securities	67.5		2.6		3.7
Collateralized loan obligations	183.3		7.1		1.8
Foreign government securities	11.6		0.5		2.9
Other securities	169.2		6.6		3.8
Equity securities	296.8		11.5		2.4
Short-term investments	3.2		0.1		0.1
Total investments at fair value	$	2,571.0	100.0	%
Weighted average yield					3.0	%

36

The following table shows the percentage of total estimated fair value of our fixed maturity securities as of March 31, 2022 by credit rating category, using the lower of the ratings assigned by Moody’s Investors Service or S&P.

Rating	Percentage of Total Estimated Fair Value
“AAA”	9.7	%
“AA”	33.8
“A”	30.0
“BBB”	14.5
Below Investment Grade	12.0
Total	100.0	%

Investments that we currently own could be subject to credit risk and subsequent default by the issuer. We regularly assess individual securities as part of our ongoing portfolio management, including the identification of credit related losses. Our assessment includes reviewing the extent of declines in fair value of investments below amortized cost, historical and projected financial performance and near-term prospects of the issuer, the outlook for industry sectors, credit rating, and macro-economic changes, including those caused by the COVID-19 pandemic. We also make a determination as to whether it is not more likely than not that we will be required to sell the security before its fair value recovers to above cost, or maturity.

In addition to recognizing realized gains and losses upon the disposition of an investment security, we also recognize realized gains or losses on AFS debt securities for changes in CECL. As of March 31, 2022, we have a $2.2 million allowance for CECL on AFS debt securities. During the three months ended March 31, 2022, we recognized a $2.0 million increase to our allowance for CECL on AFS debt securities. The remaining fixed maturity securities whose total fair value was less than amortized cost at March 31, 2022, were those in which we had no intent, need, or requirement to sell at an amount less than their amortized cost.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Estimates

The unaudited interim consolidated financial statements included in this quarterly report include amounts based on the use of estimates and judgments of management for those transactions that are not yet complete. We believe that the estimates and judgments that were most critical to the preparation of the consolidated financial statements involved the reserves for losses and LAE and reinsurance recoverables. These estimates and judgments require the use of assumptions about matters that are highly uncertain and therefore are subject to change as facts and circumstances develop. Our accounting policies are discussed under "Critical Accounting Estimates" in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of potential economic loss principally arising from adverse changes in the fair value of financial instruments. The major components of market risk affecting us are credit risk, interest rate risk, and equity price risk.

Credit Risk

Our fixed maturity securities, equity securities, other invested assets and cash equivalents are exposed to credit risk, which we attempt to manage through issuer and industry diversification. Our investment guidelines include limitations on the minimum rating of fixed maturity securities and concentrations of a single issuer.

We also bear credit risk with respect to the reinsurers, which can be significant considering that some loss reserves remain outstanding for an extended period of time. We are required to pay losses even if a reinsurer refuses or fails to meet its obligations to us under the applicable reinsurance agreement(s). We continually monitor the financial condition and financial strength ratings of our reinsurers. Additionally, we bear credit risk with respect to premiums receivable, which is generally diversified due to the large number of entities comprising our policyholder base and their dispersion across many different industries and geographies.

The economic disruptions caused by the COVID-19 pandemic have impacted the credit risk associated with certain of our investment holdings, reinsurance recoverables and premiums receivable. As of March 31, 2022, we have a $2.2 million allowance for CECL on our fixed maturity portfolio. See Note 5 to the consolidated financial statements.

37

Interest Rate Risk

Investments

The fair value of our fixed maturity portfolio is exposed to interest rate risk, which is the risk of a change in fair value resulting from changes in prevailing interest rates, which we strive to limit by managing duration. Our fixed maturity investments (excluding cash and cash equivalents) had a duration of 3.8 at March 31, 2022. To minimize interest rate risk, our portfolio is weighted toward short-term and intermediate-term bonds; however, our investment strategy balances consideration of duration, yield and credit risk. We continually monitor the changes in interest rates and the impact on our liquidity and ability to meet our obligations.

Sensitivity Analysis

The fair values or cash flows of market sensitive instruments are subject to potential losses in future earnings resulting from changes in interest rates and other market conditions. Our sensitivity analysis applies a hypothetical parallel shift in market rates and reflects what we believe are reasonably possible near-term changes in those rates (covering a period of time going forward up to one year from the date of the consolidated financial statements). Actual results may differ from the hypothetical change in market rates assumed in this disclosure. This sensitivity analysis does not reflect the results of any action that we may take to mitigate such hypothetical losses in fair value.

We use fair values to measure our potential loss in this model, which includes fixed maturity securities and short-term investments. For invested assets, we use modified duration modeling to calculate changes in fair values. Durations on invested assets are adjusted for call, put, and interest rate reset features. Invested asset portfolio durations are calculated on a market value weighted basis, excluding accrued investment income, using holdings as of March 31, 2022. The estimated changes in fair values on our fixed maturity securities and short-term investments, which had an aggregate value of $2,274.2 million as of March 31, 2022, based on specific changes in interest rates are as follows:

Hypothetical Changes in Interest Rates	Estimated Pre-tax Increase (Decrease) in Fair Value
	(in millions, except percentages)
300 basis point rise	$	(235.3)	(10.3)	%
200 basis point rise	(159.1)		(7.0)
100 basis point rise	(80.4)		(3.5)
50 basis point decline	40.6		1.8
100 basis point decline	81.3		3.6

The most significant assessment of the effects of hypothetical changes in interest rates on investment income would be based on GAAP guidance related to "Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases," which requires amortization adjustments for mortgage-backed securities. The rates at which the mortgages underlying mortgage-backed securities are prepaid, and therefore the average life of mortgage-backed securities, can vary depending on changes in interest rates (for example, mortgages are prepaid faster and the average life of mortgage-backed securities falls when interest rates decline). Adjustments for changes in amortization are based on revised average life assumptions and would have an impact on investment income if a significant portion of our commercial and residential mortgage-backed securities were purchased at significant discounts or premiums to par value. As of March 31, 2022, the par value of our commercial and residential mortgage-backed securities holdings was $359.2 million, and the amortized cost was 103.5% of par value. Since a majority of our mortgage-backed securities were purchased at a premium or discount that is significant as a percentage of par, an adjustment could have a significant effect on investment income. The commercial and residential mortgage-backed securities portion of the portfolio represented 13.9% of our total investments as of March 31, 2022. Agency-backed residential mortgage pass-throughs represented 88.3%, of the residential mortgage-backed securities portion of the portfolio as of March 31, 2022.

For reference, from December 31, 2021 to March 31, 2022, the 5-year U.S. Treasury yield increased by 116 basis points, and our resulting pre-tax unrealized losses on fixed maturity securities totaled $111.8 million.

Equity Price Risk

Equity price risk is the risk that we may incur losses in the fair value of the equity securities we hold in our investment portfolio. Adverse changes in the market prices of the equity securities we hold in our investment portfolio would result in decreases in the fair value of our total assets on our Consolidated Balance Sheets and in net realized and unrealized gains and losses on our Consolidated Statements of Comprehensive Income. Economic and market disruptions caused by the COVID-19 pandemic have resulted in volatility in the fair value of our equity securities. We minimize our exposure to equity price risk by investing primarily in the equity securities of mid-to-large capitalization issuers and by diversifying our equity holdings across several industry sectors.

38

The table below shows the sensitivity of our equity securities at fair value to price changes as of March 31, 2022:

(in millions)	Cost		Fair Value		10% Fair Value Decrease		Pre-tax Impact on Total Equity Securities		10% Fair Value Increase		Pre-tax Impact on Total Equity Securities
Equity securities	$	206.4	$	296.8	$	267.1	$	(29.7)	$	326.5	$	29.7

Effects of Inflation

The COVID-19 pandemic has created increased uncertainty about the path of the U.S. economy, consumer behavior, and workplace norms for the years ahead. Recent supply and demand shocks and dramatic changes in fiscal policy have led to higher levels of inflation and may continue to lead to elevated levels of inflation in future periods.

Higher levels of inflation could significantly impact our financial statements and results of operations. Our estimates for losses and LAE include assumptions about the timing of closure and future payment of claims and claims handling expenses, such as medical treatments and litigation costs. To the extent that inflation causes these costs to increase above established reserves, we will be required to increase those reserves for losses and LAE, reducing our earnings in the period in which the deficiency is identified.

Inflation is incorporated in the reserving process through projections supported by historical loss emergence. Additionally, we consider an estimate of increased costs in determining the adequacy of our rates, particularly as it relates to medical and hospital trends where historical loss trends have exceeded general inflation rates.

Higher levels of wage inflation can specifically impact the payrolls of our insureds, which is the basis for the premiums we charge, as well as amount of future indemnity losses we may incur.

Higher levels of inflation could also impact our operating expenses and, in the case of wage inflation, could impact our payroll expenses.

Fluctuations in rates of inflation also influence interest rates, which in turn may impact the market value of our investment portfolio, particularly our fixed maturity investments, and yields on new investments.

Item 4.  Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

There have not been any changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

39

PART II – OTHER INFORMATION

Item 1.  Legal Proceedings

From time-to-time, the Company is involved in pending and threatened litigation in the normal course of business in which claims for monetary damages are asserted. In the opinion of management, the ultimate liability, if any, arising from such pending or threatened litigation is not expected to have a material effect on our results of operations, liquidity, or financial position.

Item 1A.  Risk Factors

We have disclosed in our Annual Report the most significant risk factors that can impact year-to-year comparisons and that may affect the future performance of the Company's business. On a quarterly basis, we review these disclosures and update the risk factors, as appropriate. As of the date of this report, there have been no material changes to the risk factors contained in our Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

The following table provides information with respect to the Company’s repurchases of its common stock during the first quarter of 2022:

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet be Purchased Under the Program
					(in millions)
January 1 - January 31	39,126	$	38.24	39,126	$	26.4
February 1 - February 28	100,865	38.80		100,865	22.5
March 1 - March 31	34,181	39.30		34,181	21.1
	174,172	$	38.77	174,172

On July 21, 2021, the Board of Directors authorized a new share repurchase program for repurchases of up to $50.0 million of our common stock from July 27, 2021 through December 31, 2022 (the 2021 Program). On April 27, 2022, the Board of Directors authorized a $50.0 million expansion of the 2021 Program, to $100.0 million and extended the program’s expiration to December 31, 2023. The 2021 Program replaces the 2018 Program, which expired on June 30, 2021. The 2021 Program provides that shares may be purchased at prevailing market prices through a variety of methods, including open market or private transactions, in accordance with applicable laws and regulations and as determined by management. The timing and actual number of shares that may be repurchased will depend on a variety of factors, including the share price, corporate and regulatory requirements, and other market and economic conditions. Repurchases under the 2021 Program may be commenced, modified, or suspended from time to time without prior notice, and the program may be suspended or discontinued at any time.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None.

40

Item 6.  Exhibits

			Incorporated by Reference Herein
Exhibit No.	Description of Exhibit	Included Herewith	Form	File No.	Exhibit	Filing Date
*10.1	Employers Holdings, Inc. Equity and Incentive Plan Form of Performance Share Agreement	X
*10.2	Employers Holdings, Inc. Equity and Incentive Plan Form of Restricted Stock Unit Agreement	X
31.1	Certification of Katherine H. Antonello Pursuant to Section 302	X
31.2	Certification of Michael S. Paquette Pursuant to Section 302	X
32.1	Certification of Katherine H. Antonello Pursuant to Section 906	X
32.2	Certification of Michael S. Paquette Pursuant to Section 906	X
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded with the Inline XBRL document.	X
101.SCH	XBRL Taxonomy Extension Schema Document	X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	X
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	X

————

*Represents management contracts and compensatory plans or arrangements.

41

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

EMPLOYERS HOLDINGS, INC.

Date:	April 29, 2022	/s/ Michael S. Paquette
		Michael S. Paquette
		Executive Vice President and Chief Financial Officer
		Employers Holdings, Inc.
		(Principal Financial and Accounting Officer)

42

EX-10.1

Exhibit 10.1

Form of Agreement

EMPLOYERS HOLDINGS, INC.

EQUITY AND INCENTIVE PLAN

PERFORMANCE SHARE AGREEMENT

[_______ _____] (the “Grantee”) is hereby granted, effective as of the DATE1 (the “Date of Grant”), an award (the “Performance Share Award”) of the number of performance shares (the "Performance Shares") that are specified herein pursuant to the Equity and Incentive Plan (the “Plan”) of Employers Holdings, Inc. (the “Company”), as amended from time to time. The Performance Share Award is subject to the terms and conditions set forth below in this Performance Share Agreement (this “Agreement”) and of the Plan, which is a part of this Agreement. To the extent that there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall govern. Any term not defined herein shall have the meaning assigned to such term in the Plan.

1.    Performance and Vesting Periods: DATE2 (the “Performance Period Start Date”) to DATE3 (the “Performance Period End Date,” and the period from the Performance Period Start Date to the Performance Period End Date, the “Performance Period”); DATE4 (the “Vesting Start Date”) until DATE5 (the “Vesting End Date”) is referred to as the “Vesting Period.”

2.    Award Term: The Performance Period and the Vesting Period together comprise the “Award Term.”

3.    Number of Performance Shares: The number of Performance Shares that the Grantee may earn hereunder will be determined in accordance with the provisions of Exhibit A, which is attached to and forms a part of this Agreement.

4.    Performance Goals: The Performance Shares will become payable only upon the achievement of certain Performance Goals (as defined in Exhibit A) and the satisfaction of such other terms and conditions as are set forth herein and in the Plan.

5.    Performance Certification Date: The date following the Performance Period End Date that the Compensation Committee of the Board of Directors of the Company (the “Committee”) certifies that the Performance Goals have been achieved, but no later than 75 days following the Performance Period End Date.

6.    Vesting and Payment of Performance Shares: To the extent Performance Shares are payable pursuant to this Agreement, then, except as otherwise provided in Sections 7 and 8 of this Agreement, payment of one share of common stock, par value $.01, of the Company (“Stock”) for each Performance Share that becomes payable under this Agreement will be made only (a) following certification by the Committee that the Performance Goals have been achieved (as described in Section 5 of this Agreement), and (b) so long as the Grantee has remained continuously employed during the entire Award Term, but payment shall be made no later than two and one-half months after the Vesting End Date (the “Payment Date”).

7.    Termination:

(a)    General. In the event the Grantee's employment terminates prior to the Vesting End Date, payment of the Performance Shares shall be made to the extent provided in subsections (b) through (e) of this Section 7.

(b)    Death or Disability. If the Grantee's employment terminates prior to the Vesting End Date by reason of the Grantee’s total and permanent disability (as defined in any agreement between the Grantee and the Company or, if no such agreement is in effect, as determined by the Committee in its good faith discretion, in accordance with the definition used by the Company’s then current Long Term Disability insurance carrier) or death, then a portion (or all) of the Performance Shares shall be deemed earned as of the date of such termination of employment equal to the product of (i) the total number of Performance Shares granted pursuant to this Agreement and (ii) a fraction, the numerator of which is the number of full months elapsed from the Performance Period Start Date until the earlier of (A) the date of the Grantee’s termination of employment and (B) the Performance Period End Date, and the denominator of which is 24, and shall become payable within 30 days following the later of the Performance Certification Date and the date the Grantee’s

employment terminates, based on, and to the extent of, the actual achievement of the Performance Goals, as determined by the Committee.

(c)    Retirement. If the Grantee's employment terminates prior to the Vesting End Date by reason of the Grantee’s Retirement (as defined below), then a portion (or all) of the Performance Shares shall be deemed earned as of the date of such termination of employment equal to the product of (i) the total number of Performance Shares granted pursuant to this Agreement and (ii) a fraction, the numerator of which is the number of full months elapsed from the Performance Period Start Date until the earlier of (A) the date of the Grantee’s termination of employment and (B) the Performance Period End Date, and the denominator of which is 24, and shall become payable within 30 days following the later of the Performance Certification Date and the date the Grantee’s employment terminates, based on, and to the extent of, the actual achievement of the Performance Goals, as determined by the Committee, so long as the Grantee refrains from engaging in Harmful Conduct. For purposes of this Agreement, “Retirement” shall mean the Grantee’s termination of employment after attaining age 55 and completing 10 years of continuous service with the Company (or any Subsidiary thereof), and provided that the Grantee has given written notice of the Grantee’s intent to retire to the Company (or its designate), no fewer than six months prior to the date that the Grantee terminates employment, in a form satisfactory to the Company (or its designate).

(d)    Involuntary Termination. If the Grantee’s employment is terminated prior to the Vesting End Date other than for any of the reasons described in subsections (b), (c) or (e) of this Section 7, then a portion (or all) of the Performance Shares shall be deemed earned as of the date of such termination of employment equal to the product of (i) the total number of Performance Shares granted pursuant to this Agreement and (ii) a fraction, the numerator of which is the number of full months elapsed from the Performance Period Start Date until the earlier of (A) the date of the Grantee’s termination of employment and (B) the Vesting End Date, and the denominator of which is 36, and shall become payable within 30 days following the later of the Performance Certification Date and the date the Grantee’s employment terminates, based on, and to the extent of, the actual achievement of the Performance Goals, as determined by the Committee, so long as the Grantee refrains from engaging in Harmful Conduct.

(e)    For Cause; Voluntary Termination. If the Grantee’s employment terminates prior to the Vesting End Date for Cause or the Grantee voluntarily terminates his/her employment for any reason other than for any of the reasons described in subsections (b) or (c), above, the Performance Shares, and any rights thereto, shall terminate immediately and the Grantee shall have no right thereafter to payment of any portion of the Performance Shares.

8.    Change in Control Provisions: The following provisions shall apply in the event of a Change in Control that constitutes a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company within the meaning of Section 409A of the Code (a “Section 409A Change in Control”):

(a)    Acceleration of Performance Shares. Upon the occurrence of a Section 409A Change in Control, (i) if the Section 409A Change in Control occurs before the Performance Period End Date, the number of Performance Shares that would have been earned at target level of achievement shall be deemed earned as of the date of such Section 409A Change in Control, and shall become payable upon (or within 15 days following) the date of the Section 409A Change in Control and any other performance conditions or vesting requirements imposed with respect to such shares shall be deemed to have been fully achieved and satisfied, and (ii) if the Section 409A Change in Control occurs on or after the Performance Period End Date, the number of Performance Shares earned as of that date, and shall become payable upon (or within 15 days following) the date of the Section 409A Change in Control and any vesting conditions imposed with respect to such shares shall be deemed to have been fully satisfied.

(b)    Discretionary Cashout. Notwithstanding any other provision of the Plan or this Agreement, in the event of a Section 409A Change in Control, the Committee may, in its discretion, provide that upon the occurrence of the Section 409A Change in Control, in lieu of the treatment described in Section 8(a) above, the Performance Shares shall be cancelled in exchange for a payment made upon (or within 15 days following) the date of the Section 409A Change in Control in an amount equal to the value (as determined by the Committee) of the consideration paid per share of Stock in the Section 409A Change in Control multiplied by the number of Performance Shares that would have been payable pursuant to the preceding paragraph, and any other performance

conditions or vesting requirements imposed with respect to such shares shall be deemed to have been fully achieved and satisfied.

9.    Tax Withholding: The Company shall have the power and the right to deduct or withhold, or require the Grantee or beneficiary to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Agreement. Without limiting the foregoing, the Company shall be entitled to require, as a condition of delivery of the shares of Stock (or, if applicable, cash or other consideration) in settlement of the Performance Shares, that the Grantee agree to remit an amount in cash sufficient to satisfy all then current and/or estimated future federal, state and local withholding, and other taxes relating thereto. Payment of any dividend equivalents will be net of such federal, state, and local withholding taxes.

10.    Legend on Certificates: The certificates representing the shares of Stock issued in respect of the Performance Shares that are delivered to the Grantee pursuant to this Agreement shall be subject to such stop transfer orders and other restrictions as the Committee may determine are required by the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such shares of Stock are listed, any applicable federal or state laws or the Company's Certificate of Incorporation and Bylaws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

11.    Transferability: The Performance Shares may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Grantee otherwise than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Subsidiary thereof; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

12.    Repayment Upon Restatement; Clawbacks Generally: In the event that the Company is required to restate any of its financial statements applicable to the Performance Period, the Company may require the Grantee to repay to the Company the aggregate Fair Market Value of any Performance Shares and any dividend equivalents that became payable upon the achievement of the Performance Goals, to the extent such Performance Goals would not have been achieved had such restatement not been required. In addition, the Performance Shares and any dividend equivalents shall be subject to such other repayment, clawback or similar provisions as may be required by the terms of the Plan or applicable law or applicable policy in effect from time to time.

13.    Securities Laws: Upon the acquisition of any shares of Stock pursuant to the settlement of the Performance Shares, the Grantee will make or enter into such written representations, warranties and agreements as the Committee may reasonably request in order to comply with applicable securities laws or with this Agreement.

14.    No Right to Continued Employment: Neither the Plan nor this Agreement shall be construed as giving the Grantee the right to continue in the employ or service of the Company or any Subsidiary thereof or to be entitled to any remuneration or benefits not set forth in the Plan, this Agreement or other agreement or to interfere with or limit in any way the right of the Company or any such Subsidiary to terminate such Grantee's employment. Nor does this Agreement constitute an employment contract.

15.    Notices: Any notice under this Agreement shall be addressed to the Company in care of the Chief Legal Officer, addressed to the principal executive office of the Company and to the Grantee at the address last appearing in the records of the Company for the Grantee or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.

16.    Acknowledgement: By entering into this Agreement the Grantee agrees and acknowledges that the Grantee has received and read a copy of the Plan.

17.    No Stockholders Rights: Subject to Section 18 below, the Grantee shall have no rights of a stockholder of the Company with respect to the Performance Shares, including, but not limited to, the rights to vote until the date of issuance of a stock certificate for such shares of Stock.

18.    Dividend Equivalents: Upon achievement of the applicable Performance Goals, the Grantee shall be credited with a dividend equivalent with respect to the Performance Shares that are earned thereon (such

Performance Shares, the “Earned Performance Shares”) (such credit, the “Initial Credit”). The amount of the Initial Credit shall be equal to the dividends or distributions made on or before the Performance Certification Date. In addition, the Grantee shall be credited with a dividend equivalent for each dividend or distribution made following the Performance Certification Date with respect to the shares of Stock covered by the then-outstanding Earned Performance Shares, with the amount of each such dividend equivalent equal to the amount of the applicable dividend or distribution. The dividend equivalents shall be subject to the same terms and conditions, and shall be payable in cash (without interest) when the underlying Performance Share becomes payable. If the underlying Performance Share does not become payable or is forfeited, any dividend equivalents with respect to the underlying Performance Share will also fail to become payable and be forfeited.

19.    Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to the conflicts of laws provisions thereof.

20.    Amendment: This Agreement may not be amended, terminated, suspended or otherwise modified except in a written instrument duly executed by both parties.

21.    Electronic Signature and Delivery: This Agreement may be accepted by return signature or by electronic signature or confirmation. By accepting this Agreement, the Grantee consents to any electronic form of signature or confirmation, and to the electronic delivery of prospectuses, annual reports and other information required to be delivered by U.S. Securities and Exchange Commission rules.

22.    Entire Agreement: This Agreement (and the other writings incorporated by reference herein) constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior written or oral negotiations, commitments, representations and agreements with respect thereto.

23.    Signature in Counterparts: This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

EMPLOYERS HOLDINGS, INC.	GRANTEE
By:	By:
Katherine Antonello
Employers Holdings, Inc.

EX-10.2

Exhibit 10.2

Form of Agreement

EMPLOYERS HOLDINGS, INC.
EQUITY AND INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

THIS RESTRICTED STOCK UNIT AGREEMENT (this "Agreement"), is made effective as of DATE1 (the "Date of Grant"), between Employers Holdings, Inc. (the "Company") and the individual named as the grantee on the signature page hereto (the "Grantee"), pursuant to the Company Equity and Incentive Plan, as amended from time to time (the "Plan"), which is a part of this Agreement. Capitalized terms not defined herein will have the meanings ascribed to such terms in the Plan. To the extent that there is a conflict between the terms of the Plan and this Agreement, the terms of the Plan will govern.

1.Grant of Restricted Stock Units. The Company hereby grants to the Grantee, ________ Restricted Stock Units (the "RSUs"). The RSUs shall be subject to the terms and conditions set forth herein and, to the extent applicable, the Plan.

2.Vesting of Restricted Stock Units.

(a)Subject to subsections 2(b), (c) and (d) below, the RSUs shall become vested as to 25% of the RSUs on DATE2, and as to an additional 25% of the RSUs on each of the first three anniversaries of the first vesting date, provided that the Grantee has been continuously employed by the Company or any Subsidiary thereof through the relevant vesting dates and subject to accelerated vesting as set forth in Section 3 below and Section 7 of the Plan.

(b)Termination of Employment by Reason of Death or Disability. If the Grantee's employment terminates by reason of death or the Grantee's total and permanent disability (as defined in any agreement between the Grantee and the Company or, if no such agreement is in effect, as determined by the Committee (or its delegate) in its good faith discretion, in accordance with the definition used by the Company’s then current Long Term Disability insurance carrier), then the RSUs shall become fully vested as of such date of termination.

(c)Termination by Reason of Retirement. If the Grantee’s employment terminates by reason of the Grantee’s Retirement (as defined below), then the RSUs shall become fully vested as of the date of such termination. For purposes of this Agreement, “Retirement” shall mean the Grantee’s termination of employment after attaining age 55 and completing 10 years of continuous service with the Company (or any Subsidiary thereof), and provided (i) that the Grantee has given written notice of the Grantee’s intent to retire to the Company (or its designate), no fewer than six months prior to the date that the Grantee terminates employment, in a form satisfactory to the Company (or its designate); and (ii) that such termination of employment constitutes a “separation of employment” within the meaning of Section 409A of the Code (a “Separation of Service”).

(d)Termination of Employment other than by Reason of Death, Retirement or Disability. Subject to Section 3 below, if the Grantee's employment terminates for any reason other than by reason of death, Retirement or the Grantee's total and permanent disability, then all of the Grantee's unvested RSUs shall immediately be forfeited and canceled as of such date without consideration.

3.Change in Control Provisions. In the event of a Change of Control:

(a)If RSUs Are Assumed. If the RSUs are assumed or substituted for in connection with a Change in Control, then, upon the termination of the Grantee’s employment without Cause during the 24-month period following such Change in Control, (i) such RSUs shall become fully vested, (ii) any restrictions, payment conditions, and forfeiture conditions applicable to such RSUs shall lapse, and (iii) any performance conditions imposed with respect to such RSUs shall be deemed to be fully achieved.

(b)If RSUs Are Not Assumed. With respect to outstanding RSUs that are not assumed or substituted in connection with a Change in Control, upon the occurrence of the Change in Control (i) such RSUs shall become fully vested, (ii) any restrictions, payment conditions, and forfeiture conditions applicable to any such RSUs shall lapse, and (iii) any performance conditions imposed with respect to such RSUs shall be deemed to be fully achieved. Notwithstanding the foregoing, no settlement or distribution under this Agreement that constitutes an item of “deferred compensation” under Section 409A of the Code, and that becomes payable by reason of such Change in Control shall be made to the Grantee until a termination of the Grantee’s employment that

constitutes a Separation from Service or, if earlier, the death of the Grantee, and no such settlement or distribution of deferred compensation shall be made to the Grantee prior to the earlier of (a) the expiration of the six month period measured from the date of the Grantee’s Separation from Service, and (b) the date of the Grantee’s death, if (i) the Grantee is deemed at the time of such Separation from Service to be a “specified employee” within the meaning of that term under Section 409A of the Code and (ii) such delayed commencement is otherwise required to avoid an “additional tax” under Section 409A of the Code.

(c)Definition of Assumed or Substituted For. For purposes of this Section 3, RSUs shall be considered assumed or substituted for if, following the Change in Control, such RSUs remain subject to the same terms and conditions that were applicable to such units immediately prior to the Change in Control, except that such units confer the right to receive, for each such unit the consideration (whether stock, cash or other securities or property) received in the Change in Control by holders of shares of Stock for each share of Stock held on the effective date of the Change in Control (and if holders were offered a choice of consideration, the type of consideration chosen by the greatest number of holders of the outstanding shares). Such assumption or substitution shall comply with the applicable provisions of Section 409A of the Code.

(d)Discretionary Cashout. Notwithstanding any other provision of the Plan or this Agreement, in the event of a Change in Control that constitutes a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company within the meaning of Section 409A of the Code, the Committee may, in its discretion, provide that upon the occurrence of such Change in Control, the RSUs shall be cancelled in exchange for a payment in an amount equal to the consideration paid per share of Stock in such Change in Control multiplied by the number of RSUs granted hereunder that had not been settled as of such date. Such payment shall be made within 30 days following such Change in Control; provided, however, that if such payment constitutes an item of “deferred compensation” under Section 409A of the Code, no settlement or distribution under this Agreement that constitutes an item of “deferred compensation” under Section 409A of the Code, and that becomes payable by reason of such Change in Control shall be made to the Grantee until a termination of the Grantee’s employment that constitutes a Separation from Service or, if earlier, the death of the Grantee, and no such settlement or distribution of deferred compensation shall be made to the Grantee prior to the earlier of (a) the expiration of the six month period measured from the date of the Grantee’s Separation from Service, and (b) the date of the Grantee’s death, if (i) the Grantee is deemed at the time of such Separation from Service to be a “specified employee” within the meaning of that term under Section 409A of the Code and (ii) such delayed commencement is otherwise required to avoid an “additional tax” under Section 409A of the Code.

4.Settlement of RSUs and Section 409A Provisions. Unless otherwise provided in Section 3 above or in the Plan, including, without limitation, by reason of a Change in Control, the RSUs shall be settled in whole shares of Stock (i.e., the Grantee shall receive one share of Stock for each RSU) within 30 days following the date such RSUs become vested, subject to any provision of this Agreement or the Plan that may delay such settlement by reason of Section 409A of the Code. Consistent with the foregoing, no settlement or distribution under this Agreement that constitutes an item of “deferred compensation” under Section 409A of the Code, and that becomes payable by reason of the termination of the Grantee’s employment hereunder shall be made to the Grantee unless and until the termination of the Grantee’s employment constitutes a Separation from Service, and no such settlement or distribution of deferred compensation shall be made to the Grantee prior to the earlier of (a) the expiration of the six month period measured from the date of the Grantee’s Separation from Service, and (b) the date of the Grantee’s death, if (i) the Grantee is deemed at the time of such Separation from Service to be a “specified employee” within the meaning of that term under Section 409A of the Code and (ii) such delayed commencement is otherwise required to avoid an “additional tax” under Section 409A of the Code. All settlements and payments that are delayed pursuant to the immediately preceding sentence shall be paid to the Grantee upon expiration of such six month period (or if earlier, upon the Grantee’s death). Each individual settlement or payment under this Agreement shall be a “separate payment” for purposes of Section 409A of the Code, and notwithstanding the foregoing provisions of this Agreement, to the extent permitted under Section 409A of the Code, any separate settlement or payment under this Agreement shall not be “deferred compensation” subject to Section 409A and the six month delay described above, to the extent provided or permitted in any applicable exception or provision under Section 409A of the Code.

5.No Right to Continued Employment. Neither the Plan nor this Agreement shall be construed as giving the Grantee the right to continue in the employ or service of the Company or any Subsidiary thereof or to be entitled to any remuneration or benefits not set forth in the Plan, this Agreement or other agreement or to interfere with or limit in any way the right of the Company or any such Subsidiary to terminate such Grantee's employment. Nor does this Agreement constitute an employment contract.

6.Legend on Certificates. The certificates representing the whole shares of Stock issued in settlement of the RSUs that are delivered to the Grantee pursuant to Section 4 of this Agreement shall be subject to such stop transfer orders and other restrictions as the Committee may determine is required by the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such shares of

Stock are listed, any applicable federal or state laws or the Company's Certificate of Incorporation and Bylaws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

7.Transferability. An RSU may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Grantee otherwise than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Subsidiary thereof; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

8.Tax Withholding. The Company shall have the power and the right to deduct or withhold from the grant of RSUs, or require the Grantee or beneficiary to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Agreement. Without limiting the foregoing, the Company shall be entitled to require, as a condition of delivery of the shares of Stock in settlement of the RSUs, that the Grantee agree to remit an amount in cash sufficient to satisfy all then current and/or estimated future federal, state and local withholding, and other taxes relating thereto. Payment of any dividend equivalents will be net of such federal, state, and local withholding taxes.

9.Securities Laws. Upon the acquisition of any shares of Stock pursuant to the settlement of the RSUs, the Grantee will make or enter into such written representations, warranties and agreements as the Committee may reasonably request in order to comply with applicable securities laws or with this Agreement.

10.Notices. Any notice under this Agreement shall be addressed to the Company in care of the Chief Legal Officer, addressed to the principal executive office of the Company and to the Grantee at the address last appearing in the records of the Company for the Grantee or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.

11.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, without regard to the conflicts of laws provisions thereof.

12.Acknowledgement. By entering into this Agreement the Grantee agrees and acknowledges that the Grantee has received and read a copy of the Plan.

13.No Stockholder Rights. Subject to Section 14 below, the Grantee shall have no rights of a stockholder of the Company with respect to the RSUs, including, but not limited to, the rights to vote until the date of issuance of a stock certificate for such shares of Stock.

14.Dividend Equivalents. The Grantee shall be credited with a dividend equivalent for each dividend or distribution made prior to each vesting date with respect to the shares of Stock covered by then-outstanding RSUs. The amount of each dividend equivalent shall be equal to the amount of the applicable dividend or distribution. The dividend equivalents shall be subject to the same terms and conditions, and shall be payable in cash (without interest) when the underlying RSU becomes payable. If the underlying RSU does not vest or is forfeited, any dividend equivalents with respect to the underlying RSU will also fail to vest and be forfeited.

15.Repayment Upon Restatement; Clawbacks Generally. In the event the Company is required to restate any of its financial statements, the Company may (i) require the Grantee to repay to the Company the aggregate Fair Market Value of any RSUs that were settled or any dividend equivalents that were paid or (ii) cancel any outstanding RSUs or any dividend equivalents. In addition, the RSUs shall be subject to such other repayment, clawback or similar provisions as may be required by the terms of the Plan or applicable law or applicable policy in effect from time to time.

16. Section 409A Compliance. It is intended that this Agreement shall comply with the provisions of section 409A of the Code so as not to subject the Grantee to the payment of additional taxes or interest under section 409A of the Code. In furtherance of this intent, this Agreement shall be interpreted, operated, and administered in a manner consistent with these intentions, and to the extent that any regulations or other guidance issued under section 409A of the Code would result in the Grantee being subject to payment of additional income taxes or interest under section 409A of the Code, the Grantee and the Company agree to amend this Agreement to the extent feasible to avoid the application of such taxes or interest under section 409A of the Code.

17.Amendment. This Agreement may not be amended, terminated, suspended or otherwise modified except in a written instrument duly executed by both parties.

18.Electronic Signature and Delivery: This Agreement may be accepted by return signature or by electronic signature or confirmation. By accepting this Agreement, the Grantee consents to any electronic form of signature or confirmation, and to the electronic delivery of prospectuses, annual reports and other information required to be delivered by U.S. Securities and Exchange Commission rules.

19.Entire Agreement. This Agreement (and the other writings incorporated by reference herein) constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior written or oral negotiations, commitments, representations and agreements with respect thereto.

20.Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto.

EMPLOYERS HOLDINGS, INC.	GRANTEE
By:	By:
Katherine Antonello
Employers Holdings, Inc.

EX-31.1

41Exhibit 31.1

CERTIFICATIONS

I, Katherine H. Antonello, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Employers Holdings, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	April 29, 2022	/s/ Katherine H. Antonello
		Katherine H. Antonello
		President and Chief Executive Officer
		Employers Holdings, Inc.

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Michael S. Paquette, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Employers Holdings, Inc.;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	April 29, 2022	/s/ Michael S. Paquette
		Michael S. Paquette
		Executive Vice President and Chief Financial Officer
		Employers Holdings, Inc.
		(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Form 10-Q of Employers Holdings, Inc. (the Company) for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned hereby, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	April 29, 2022	/s/ Katherine H. Antonello
		Katherine H. Antonello
		President and Chief Executive Officer
		Employers Holdings, Inc.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Form 10-Q of Employers Holdings, Inc. (the Company) for the quarter ended March 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned hereby, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	April 29, 2022	/s/ Michael S. Paquette
		Michael S. Paquette
		Executive Vice President and Chief Financial Officer
		Employers Holdings, Inc.
		(Principal Financial and Accounting Officer)

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2022	Apr. 22, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	001-33245
Entity Registrant Name	EMPLOYERS HOLDINGS, INC.
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	04-3850065
Entity Address, Address Line One	10375 Professional Circle
Entity Address, City or Town	Reno,
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89521
City Area Code	888
Local Phone Number	682-6671
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	EIG
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		27,738,429
Entity Central Index Key	0001379041
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Investments:
Fixed maturity securities at fair value (amortized cost $2,305.9 at March 31, 2022 and $2,266.1 at December 31, 2021, net of CECL allowance of $2.2 at March 31, 2022 and $0.2 at December 31, 2021)	$ 2,271.0	$ 2,342.7
Equity securities at fair value (cost $206.4 at March 31, 2022 and $212.6 at December 31, 2021)	296.8	338.8
Equity securities at cost	5.6	5.6
Other invested assets (cost $35.9 at March 31, 2022 and $34.1 at December 31, 2021)	40.4	38.4
Short-term investments at fair value (amortized cost $3.2 at March 31, 2022 and $10.5 at December 31, 2021)	3.2	10.5
Total investments	2,617.0	2,736.0
Cash and cash equivalents	130.5	75.1
Restricted cash and cash equivalents	0.2	0.2
Accrued investment income	17.9	14.5
Premiums receivable (less CECL allowance of $10.0 at March 31, 2022 and $10.3 at December 31, 2021)	258.2	244.7
Reinsurance recoverable for:
Paid losses	7.5	7.5
Unpaid losses (less CECL allowance of $0.6 at March 31, 2022 and $0.6 at December 31, 2021)	471.1	476.3
Deferred policy acquisition costs	46.4	43.7
Deferred income taxes, net	22.5	0.0
Property and equipment, net	14.0	14.7
Operating lease right-of-use assets	13.5	14.2
Intangible assets, net	13.6	13.6
Goodwill	36.2	36.2
Contingent commission receivable—LPT Agreement	13.9	13.9
Cloud computing arrangements	39.4	43.9
Other assets	51.4	48.7
Total assets	3,753.3	3,783.2
Liabilities and stockholders’ equity
Unpaid losses and loss adjustment expenses	1,981.9	1,981.2
Unearned premiums	325.1	304.7
Commissions and premium taxes payable	41.9	42.1
Accounts payable and accrued expenses	21.7	24.1
Deferred reinsurance gain—LPT Agreement	112.3	114.4
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Amount of Advances	60.0	0.0
Deferred Tax Liabilities, Tax Deferred Income	0.0	7.7
Operating lease liability	15.7	16.6
Non-cancellable obligations	19.7	21.7
Other liabilities	65.7	57.6
Total liabilities	2,644.0	2,570.1
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value; 150,000,000 shares authorized; 57,861,455 and 57,690,254 shares issued and 27,738,429 and 27,741,400 shares outstanding at March 31, 2022 and December 31, 2021, respectively	0.6	0.6
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued	0.0	0.0
Additional paid-in capital	411.1	410.7
Retained earnings	1,329.2	1,338.5
Accumulated other comprehensive (loss) income, net of tax	(27.6)	60.6
Treasury stock, at cost (30,123,026 shares at March 31, 2022 and 29,948,854 shares at December 31, 2021)	(604.0)	(597.3)
Total stockholders’ equity	1,109.3	1,213.1
Total liabilities and stockholders’ equity	$ 3,753.3	$ 3,783.2

XML

Consolidated Balance Sheets Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Available for sale:
Debt securities, available-for-sale, amortized cost	$ 2,305.9	$ 2,266.1
Equity Securities, FV-NI, Cost	206.4	212.6
Other Investments and Securities, at Cost	35.9	34.1
Available for sale, short-term investments, at amortized cost	3.2	10.5
Debt Securities, Available-for-sale, Allowance for Credit Loss	2.2	0.2
Accounts Receivable, Allowance for Credit Loss, Current	10.0	10.3
Reinsurance recoverables on unpaid losses, allowance	$ 0.6	$ 0.6
Stockholders' equity
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	57,861,455	57,690,254
Common stock, shares outstanding (in shares)	27,738,429	27,741,400
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	25,000,000	25,000,000
Preferred stock, shares issued (in shares)	0	0
Treasury stock, at cost (in shares)	30,123,026	29,948,854

XML

Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues
Net premiums earned	$ 150.2	$ 133.9
Net investment income	19.1	18.4
Net realized and unrealized (losses) gains on investments	(17.3)	10.9
Other income	0.0	0.4
Total revenues	152.0	163.6
Expenses
Losses and loss adjustment expenses	94.2	69.6
Commission expense	20.9	16.8
Underwriting and general and administrative expenses	39.3	46.6
Interest and financing expenses	0.1	0.1
Other Expenses	0.0	2.9
Total expenses	154.5	136.0
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest	(2.5)	27.6
Income tax (benefit) expense	(0.2)	4.5
Net (loss) income	(2.3)	23.1
Comprehensive loss
Unrealized AFS investment losses arising during the period, net of tax benefit of $23.4 and $9.4 for the three months ended March 31, 2022 and 2021, respectively)	(88.4)	(35.5)
Reclassification adjustment for realized AFS investment losses (gains) in net income, net of tax expense of $0.2 for the three months ended March 31, 2021	0.2	(0.6)
Other comprehensive loss, net of tax	(88.2)	(36.1)
Total comprehensive loss	(90.5)	(13.0)
Marketable Securities, Gain (Loss), Excluding Other-than-temporary Impairment Loss	(17.3)
Net realized and unrealized (losses) gains on investments before impairments		10.9
Net realized and unrealized (losses) gains on investments
Net realized and unrealized (losses) gains on investments	$ (17.3)	$ 10.9
Earnings (loss) per common share (Note 13):
Basic	$ (0.08)	$ 0.81
Diluted	(0.08)	0.80
Cash dividends declared per common share and eligible equity plan holders	$ 0.25	$ 0.25

XML

Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Statement Parenthetical [Abstract]
Other comprehensive income (loss), unrealized holding gain (loss) on securities arising during period, tax	$ 23.4	$ 9.4
Other comprehensive income (loss), reclassification adjustment for sale of securities included in net income, tax	$ 0.0	$ 0.2

XML

Consolidated Statements of Stockholders Equity Statement - USD ($) $ in Millions	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income, Net	Treasury Stock [Member]
Stockholders' equity, shares at Dec. 31, 2020		57,413,806
Stockholders' equity, value at Dec. 31, 2020	$ 1,212.8	$ 0.6	$ 404.3	$ 1,247.9	$ 115.1	$ (555.1)
Stock-based obligations, shares		0
Stock-based obligations, value	$ 5.2	$ 0.0	5.2	0.0	0.0	0.0
Stock-options exercised, shares	41,851	41,851
Stock-options exercised, value	$ 0.9	$ 0.0	0.9	0.0	0.0	0.0
Vesting of RSUs and PSUs, net of shares withheld to satisfy minimum tax withholding, shares		170,151
Vesting of RSUs and PSUs, net of shares withheld to satisfy minimum tax withholding, value	(2.5)	$ 0.0	(2.5)	0.0	0.0	0.0
Acquisition of common stock, shares		0
Acquisition of common stock, value	(9.6)	$ 0.0	0.0		0.0	(9.6)
Dividends declared, shares		0
Dividends declared, value	(7.1)	$ 0.0	0.0	(7.1)	0.0	0.0
Net income	23.1	0.0	0.0	23.1	0.0	0.0
Change in net unrealized gains in investments, net of tax	(36.1)	$ 0.0	0.0	0.0	(36.1)	0.0
Stockholders' equity, shares at Mar. 31, 2021		57,625,808
Stockholders' equity, value at Mar. 31, 2021	1,186.6	$ 0.6	407.9	1,263.8	79.0	(564.7)
Stockholders' equity, shares at Dec. 31, 2020		57,413,806
Stockholders' equity, value at Dec. 31, 2020	$ 1,212.8	$ 0.6	404.3	1,247.9	115.1	(555.1)
Stock-options exercised, shares	48,051
Stockholders' equity, shares at Dec. 31, 2021	57,690,254	57,690,254
Stockholders' equity, value at Dec. 31, 2021	$ 1,213.1	$ 0.6	410.7	1,338.5	60.6	(597.3)
Stock-based obligations, shares		0
Stock-based obligations, value	$ 1.6	$ 0.0	1.6	0.0	0.0	0.0
Stock-options exercised, shares	41,665	41,665
Stock-options exercised, value	$ 1.0	$ 0.0	1.0	0.0	0.0	0.0
Vesting of RSUs and PSUs, net of shares withheld to satisfy minimum tax withholding, shares		129,536
Vesting of RSUs and PSUs, net of shares withheld to satisfy minimum tax withholding, value	(2.2)	$ 0.0	(2.2)	0.0	0.0	0.0
Acquisition of common stock, shares		0
Acquisition of common stock, value	(6.7)	$ 0.0	0.0	0.0	0.0	(6.7)
Dividends declared, shares		0
Dividends declared, value	(7.0)	$ 0.0	0.0	(7.0)	0.0	0.0
Net income	(2.3)	0.0	0.0	(2.3)	0.0	0.0
Change in net unrealized gains in investments, net of tax	$ (88.2)	$ 0.0	0.0	0.0	(88.2)	0.0
Stockholders' equity, shares at Mar. 31, 2022	57,861,455	57,861,455
Stockholders' equity, value at Mar. 31, 2022	$ 1,109.3	$ 0.6	$ 411.1	$ 1,329.2	$ (27.6)	$ (604.0)

XML

Consolidated Statements of Stockholders Equity (Parentheticals) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Stockholders' Equity [Abstract]
Change in net unrealized (losses) gains on investments, net of tax	$ 23.4	$ 9.6

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended			12 Months Ended
	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Operating activities
Net income	$ (2.3)		$ 23.1
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization	1.5		1.9
Stock-based compensation	1.6		5.2
Amortization of cloud computing arrangements	4.0		3.1	$ 14.2
Amortization of premium on investments, net	1.0		1.5
Allowance for expected credit losses	(0.3)		1.4
Deferred income tax (benefit) expense	(6.8)		9.5
Net realized and unrealized losses (gains) on investments	17.3		(10.9)
Change in operating assets and liabilities:
Premiums receivable	(13.2)		(13.0)
Reinsurance recoverable on paid and unpaid losses	5.2		5.1
Cloud computing arrangements	0.5		(2.6)
Operating lease right-of-use-assets	0.7		1.0
Current federal income taxes	6.5		(5.3)
Unpaid losses and loss adjustment expenses	(0.7)		35.3
Unearned premiums	20.4		14.7
Accounts payable, accrued expenses and other liabilities	(1.0)		3.7
Deferred reinsurance gain—LPT Agreement	(2.1)		(2.1)
Operating lease liabilities	(0.9)		(0.8)
Non-cancellable obligations	(2.0)		0.1
Other	(14.0)		(11.1)
Net cash provided by (used in) operating activities	16.8		(10.8)
Investing activities
Purchases of fixed maturity securities	(196.8)		(243.6)
Payments to Acquire Equity Securities, FV-NI	(46.4)		(19.3)
Purchases of short-term investments	(9.6)		0.0
Purchases of other invested assets	(1.8)		(5.6)
Proceeds from sale of fixed maturity securities	92.0		74.0
Proceeds from Sale of Equity Securities, FV-NI	71.4
Proceeds from sale of equity securities			8.0
Proceeds from maturities and redemptions of fixed maturity securities	63.6		116.7
Proceeds from maturities of short-term investments	16.8		25.5
Net change in unsettled investment purchases and sales	5.5		5.6
Capital expenditures and other	(0.8)		(1.1)
Net cash used in investing activities	(6.1)		(39.8)
Financing activities
Acquisition of common stock	(6.7)		(10.0)
Cash transactions related to stock-based compensation	(1.2)		(1.7)
Dividends paid to stockholders	(7.4)		(7.7)
Proceeds from FHLBank Borrowings, Financing Activities	60.0		0.0
Repayments of FHLBank Advance, Investing Activities	0.0	$ 15.0	5.0		$ 15.0
Proceeds from Lines of Credit	10.0		12.0
Repayments on line of credit advances	10.0		12.0
Financing cash flows from finance leases	0.0		0.0
Net cash provided by (used in) financing activities	44.7		(24.4)
Net increase (decrease) in cash, cash equivalents and restricted cash	55.4		(75.0)
Cash, cash equivalents, restricted cash and restricted cash equivalents at the beginning of the period	75.3	$ 85.6	160.6	160.6
Cash, cash equivalents, restricted cash and restricted cash equivalents at the end of the period	130.7		85.6	75.3	160.6
Cash and cash equivalents	130.5			75.1
Restricted cash and cash equivalents	0.2			0.2
Total cash, cash equivalents, restricted cash	$ 130.7		$ 85.6	$ 75.3	$ 160.6

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Description and Basis of Presentation

Basis of Presentation and Summary of Operations

Employers Holdings, Inc. (EHI) is a Nevada holding company. Through its wholly owned insurance subsidiaries, Employers Insurance Company of Nevada (EICN), Employers Compensation Insurance Company (ECIC), Employers Preferred Insurance Company (EPIC), Employers Assurance Company (EAC), and Cerity Insurance Company (CIC), EHI is engaged in the commercial property and casualty insurance industry, specializing in workers’ compensation products and services. Unless otherwise indicated, all references to the “Company” refer to EHI, together with its subsidiaries.

In 1999, the Nevada State Industrial Insurance System (the Fund) entered into a retroactive 100% quota share reinsurance agreement (the LPT Agreement) through a loss portfolio transfer transaction with third party reinsurers. The LPT Agreement commenced on June 30, 1999 and will remain in effect until: (i) all claims under the covered policies have closed; (ii) the LPT Agreement is commuted or terminated, upon the mutual agreement of the parties; or (iii) the reinsurers’ aggregate maximum limit of liability is exhausted, whichever occurs first. The LPT Agreement does not provide for any additional termination terms. On January 1, 2000, EICN assumed all of the assets, liabilities and operations of the Fund, including the Fund’s rights and obligations associated with the LPT Agreement (See Note 9).

The Company accounts for the LPT Agreement as retroactive reinsurance. Upon entry into the LPT Agreement, an initial deferred reinsurance gain (the Deferred Gain) was recorded as a liability on the Company’s Consolidated Balance Sheets. The Company is entitled to receive a contingent profit commission under the LPT Agreement. The contingent profit commission is estimated based on both actual paid results to date and projections of expected paid losses under the LPT Agreement and is recorded as an asset on the Company’s Consolidated Balance Sheets.

The accompanying consolidated financial statements have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal, recurring adjustments) necessary for a fair presentation of the Company’s consolidated financial position and results of operations for the periods presented have been included. The results of operations for an interim period are not necessarily indicative of the results for an entire year. These financial statements have been prepared consistent with the accounting policies described in the Company’s Form 10-K for the year ended December 31, 2021 (Annual Report).

The Company operates through two reportable segments: Employers and Cerity. Each of the segments represents a separate and distinct underwriting platform through which the Company conducts insurance business. This presentation allows the reader, as well as the Company's chief operating decision makers, to objectively analyze the business originated through each of the Company's underwriting platforms. Detailed financial information about the Company's operating segments is presented in Note 14.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. As a result, actual results could differ from these estimates. The most significant areas that require management judgment are the estimate of unpaid losses and loss adjustment expenses (LAE), evaluation of reinsurance recoverables, recognition of premium revenue, recoverability of deferred income taxes, and valuation of investments.

Reclassifications

Certain prior period information has been reclassified to conform to the current period presentation.

XML

New Accounting Standards

3 Months Ended

Mar. 31, 2022

New Accounting Standards [Abstract]

New Accounting Standards

New Accounting Standards

Recently Issued Accounting Standards

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848). This update provides optional transition guidance to ease the potential accounting burden associated with transitioning away from the London Interbank Offered Rate (LIBOR), with optional expedients and exceptions related to the application of US GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. Companies can apply this ASU at any time, but early adoption is only available through December 31, 2022 when this ASU becomes effective. The Company has and will continue to evaluate the impact of LIBOR on its existing contracts and

investments, but does not expect that this update will have a material impact on its consolidated financial condition or results of operations.

Recently Adopted Accounting Standards

None

XML

Valuation of Financial Instruments

3 Months Ended

Mar. 31, 2022

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

Valuation of Financial Instruments

Financial Instruments Carried at Fair Value

The carrying value and the estimated fair value of the Company’s financial instruments at fair value were as follows:

	March 31, 2022				December 31, 2021
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
	(in millions)
Financial assets
Total investments at fair value	$	2,571.0	$	2,571.0	$	2,692.0	$	2,692.0
Cash and cash equivalents	130.5		130.5		75.1		75.1
Restricted cash and cash equivalents	0.2		0.2		0.2		0.2

Assets and liabilities recorded at fair value on the Company’s Consolidated Balance Sheets are categorized based upon the levels of judgment associated with the inputs used to measure their fair value. Level inputs are defined as follows:

•Level 1 - Inputs are unadjusted quoted market prices for identical assets or liabilities in active markets at the measurement date.

•Level 2 - Inputs other than Level 1 prices that are observable for similar assets or liabilities through corroboration with market data at the measurement date.

•Level 3 - Inputs that are unobservable that reflect management’s best estimate of what willing market participants would use in pricing the assets or liabilities at the measurement date.

The Company uses third party pricing services to assist with its investment accounting function. The ultimate pricing source varies depending on the investment security and pricing service used, but investment securities valued on the basis of observable inputs (Levels 1 and 2) are generally assigned values on the basis of actual transactions. Securities valued on the basis of pricing models with significant unobservable inputs or non-binding broker quotes are classified as Level 3. The Company performs quarterly analyses on the prices it receives from third parties to determine whether the prices are reasonable estimates of fair value, including confirming the fair values of these securities through observable market prices using an alternative pricing source, as it is ultimately management’s responsibility to ensure that the fair values reflected in the Company’s consolidated financial statements are appropriate. If differences are noted in these analyses, the Company may obtain additional information from other pricing services to validate the quoted price.

The Company bases all of its estimates of fair value for assets on the bid prices, when available, as they represent what a third-party market participant would be willing to pay in an arm’s length transaction.

For securities not actively traded, third party pricing services may use quoted market prices of similar instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include, but are not limited to, broker quotes, benchmark yields, credit spreads, default rates, and prepayment speed assumptions. There were no material adjustments to the valuation methodology utilized by third party pricing services as of March 31, 2022 and December 31, 2021.

These methods of valuation only produce an estimate of fair value if there is objectively verifiable information to produce a valuation. If objectively verifiable information is not available, the Company would be required to produce an estimate of fair value using some of the same methodologies, making assumptions for market-based inputs that are unavailable.

The following table presents the Company’s investments at fair value and the corresponding fair value measurements.

	March 31, 2022						December 31, 2021
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
	(in millions)
Fixed maturity securities:
U.S. Treasuries	$	—	$	63.2	$	—	$	—	$	65.7	$	—
U.S. Agencies	—		2.3		—		—		2.4		—
States and municipalities	—		372.9		—		—		436.1		—
Corporate securities	—		1,045.1		—		—		1,080.3		—
Residential mortgage-backed securities	—		289.4		—		—		321.8		—
Commercial mortgage-backed securities	—		66.5		—		—		92.3		—
Asset-backed securities	—		67.5		—		—		68.5		—
Collateralized loan obligations	—		183.3		—		—		85.4		—
Foreign government securities	—		11.6		—		—		12.5		—
Other securities	—		169.2		—		—		177.7		—
Total fixed maturity securities	$	—	$	2,271.0	$	—	$	—	$	2,342.7	$	—
Equity securities at fair value:
Industrial and miscellaneous	$	248.3	$	—	$	—	$	283.1	$	—	$	—
Other	48.5		—		—		55.7		—		—
Total equity securities at fair value	$	296.8	$	—	$	—	$	338.8	$	—	$	—
Short-term investments	$	1.0	$	2.2	$	—	$	—	$	10.5	$	—
Total investments at fair value	$	297.8	$	2,273.2	$	—	$	338.8	$	2,353.2	$	—

Financial Instruments Carried at Cost

EICN, ECIC, EPIC, and EAC are members of the Federal Home Loan Bank of San Francisco (FHLB). Members are required to purchase stock in the FHLB in addition to maintaining collateral deposits that back any funds advanced. The Company’s investment in FHLB stock is recorded at cost, which approximates fair value, as purchases and sales of these securities are at par value with the issuer. FHLB stock is considered a restricted security and is periodically evaluated by the Company for impairment based on the ultimate recovery of par value.

Financial Instruments Carried at Net Asset Value

The Company has investments in private equity limited partnership interests that are included in Other invested assets on the Company’s Consolidated Balance Sheets. These investments do not have readily determinable fair values and are carried at net asset value (NAV) and therefore are excluded from the fair value hierarchy. The Company initially estimates the value of these investments using the transaction price. In subsequent periods, the Company measures these investments using NAV per share provided quarterly by the general partner, based on financial statements that are audited annually. These investments are generally not redeemable by the investees and cannot be sold without approval of the general partner. These investments have a fund term of 10 to 12 years, subject to two or three one-year extensions at the general partner’s discretion. The Company will receive distributions of proceeds from dividends and interest from fund investments, as well as from the disposition of a fund investment, or portion thereof. The Company expects these distributions from time-to-time during the full course of the fund term. As of March 31, 2022, the Company had unfunded commitments to these private equity limited partnerships totaling $44.7 million. In April 2022, the Company entered into an additional investment in a private equity limited partnership with an unfunded commitment amount totaling $15.0 million.

Additionally, certain cash equivalents, principally money market securities, are measured using NAV, which approximates fair value.

The following table presents cash and investments carried at NAV on the Company’s Consolidated Balance Sheets.

	March 31, 2022		December 31, 2021
	(in millions)
Cash equivalents carried at NAV	$	41.0	$	29.5
Other invested assets carried at NAV	40.4		38.4

XML

Investments

3 Months Ended

Mar. 31, 2022

Investments [Abstract]

Investments

Investments

The amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company’s available-for-sale (AFS) investments were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(in millions)
At March 31, 2022
Fixed maturity securities
U.S. Treasuries	$	64.4	$	0.4	$	(1.6)	$	63.2
U.S. Agencies	2.2		0.1		—		2.3
States and municipalities	368.6		6.2		(1.9)		372.9
Corporate securities	1,061.1		11.1		(27.1)		1,045.1
Residential mortgage-backed securities	303.9		1.0		(15.5)		289.4
Commercial mortgage-backed securities	67.8		0.3		(1.6)		66.5
Asset-backed securities	71.0		0.1		(3.6)		67.5
Collateralized loan obligations	184.4		—		(1.1)		183.3
Foreign government securities	12.7		—		(1.1)		11.6
Other securities(1)	169.8		0.7		(1.3)		169.2
Total fixed maturity securities	$	2,305.9	$	19.9	$	(54.8)	$	2,271.0
Short-term investments	3.2		—		—		3.2
Total AFS investments	$	2,309.1	$	19.9	$	(54.8)	$	2,274.2

At December 31, 2021
Fixed maturity securities
U.S. Treasuries	$	64.3	$	1.6	$	(0.2)	$	65.7
U.S. Agencies	2.2		0.2		—		2.4
States and municipalities	413.8		22.4		(0.1)		436.1
Corporate securities	1,035.1		47.0		(1.8)		1,080.3
Residential mortgage-backed securities	319.0		7.0		(4.2)		321.8
Commercial mortgage-backed securities	87.9		4.5		(0.1)		92.3
Asset-backed securities	68.6		0.4		(0.5)		68.5
Collateralized loan obligations	85.5		—		(0.1)		85.4
Foreign government securities	12.7		—		(0.2)		12.5
Other securities(1)	177.0		1.2		(0.5)		177.7
Total fixed maturity securities	$	2,266.1	$	84.3	$	(7.7)	$	2,342.7
Short-term investments	10.5		—		—		10.5
Total AFS investments	$	2,276.6	$	84.3	$	(7.7)	$	2,353.2

(1)Other securities within fixed maturity securities consist of bank loans, which are classified as AFS and reported at fair value.

The cost and estimated fair value of the Company’s equity securities recorded at fair value at March 31, 2022 and December 31, 2021 were as follows:

	Cost		Estimated Fair Value
	(in millions)
At March 31, 2022
Equity securities at fair value
Industrial and miscellaneous	$	167.7	$	248.3
Other	38.7		48.5
Total equity securities at fair value	$	206.4	$	296.8

At December 31, 2021
Equity securities at fair value
Industrial and miscellaneous	$	170.5	$	283.1
Other	42.1		55.7
Total equity securities at fair value	$	212.6	$	338.8

The Company had Other invested assets totaling $40.4 million and $38.4 million (initial cost of $35.9 million and $34.1 million) at March 31, 2022 and December 31, 2021, respectively, consisting of private equity limited partnerships, which are carried at NAV based on information provided by the general partner. These investments are non-redeemable until conversion and are periodically evaluated by the Company for impairment based on the ultimate recovery of the investment. Changes in the value of these investments are recorded through Net realized and unrealized gains and losses on the Company’s Consolidated Statements of Comprehensive (Loss) Income.

The amortized cost and estimated fair value of the Company’s fixed maturity securities at March 31, 2022, by contractual maturity, are shown below. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Estimated Fair Value
	(in millions)
Due in one year or less	$	87.9	$	88.6
Due after one year through five years	745.7		749.6
Due after five years through ten years	733.2		718.8
Due after ten years	112.0		107.3
Mortgage and asset-backed securities	627.1		606.7
Total	$	2,305.9	$	2,271.0

The following is a summary of AFS investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or greater as of March 31, 2022 and December 31, 2021.

	March 31, 2022					December 31, 2021
	Estimated Fair Value		Gross Unrealized Losses		Number of Issues	Estimated Fair Value		Gross Unrealized Losses		Number of Issues
	(dollars in millions)
Less than 12 months:
Fixed maturity securities
U.S. Treasuries	$	36.8	$	(1.5)	11	$	12.8	$	(0.2)	4
States and municipalities	51.3		(1.9)		21	$	7.7	(0.1)		4
Corporate securities	495.7		(25.5)		278	$	113.0	(1.8)		87
Residential mortgage-backed securities	166.6		(7.2)		143	146.3		(3.9)		65
Commercial mortgage-backed securities	47.8		(1.3)		20	—		—		—
Asset-backed securities	47.0		(3.2)		20	50.1		(0.5)		14
Collateralized loan obligations	148.9		(0.9)		28	24.4		(0.1)		10
Foreign government securities	4.3		(0.4)		1	12.5		(0.2)		2
Other securities	105.0		(1.0)		258	66.3		(0.4)		176
Total fixed maturity securities	1,103.4		(42.9)		780	433.1		(7.2)		362
Total less than 12 months	$	1,103.4	$	(42.9)	780	$	433.1	$	(7.2)	362
12 months or greater:
Fixed maturity securities
Corporate securities	$	14.8	$	(1.7)	17	$	—	$	—	—
Residential mortgage-backed securities	78.0		(8.4)		25	4.9		(0.3)		3
Commercial mortgage-backed securities	2.3		(0.2)		2	2.4		(0.1)		2
Asset-backed securities	5.9		(0.3)		2	—		—		—
Collateralized loan obligations	22.5		(0.3)		4	—		—		—
Foreign government securities	7.6		(0.6)		2	—		—		—
Other securities	27.7		(0.4)		85	8.0		(0.1)		29
Total fixed maturity securities	158.8		(11.9)		137	15.3		(0.5)		34
Total 12 months or greater	$	158.8	$	(11.9)	137	$	15.3	$	(0.5)	34

As of March 31, 2022 and December 31, 2021, the Company had an allowance for current expected credit losses (CECL) on AFS debt securities of $2.2 million and $0.2 million, respectively (See Note 5). Those fixed maturity securities whose total fair value was less than amortized cost at March 31, 2022 and December 31, 2021, were those in which the Company had no intent, need or requirement to sell at an amount less than their amortized cost.

Realized gains and losses on investments include the gain or loss on a security at the time of sale compared to its original or adjusted cost (equity securities and other invested assets) or amortized cost (fixed maturity securities). Realized losses on fixed maturity securities are also recognized when securities are written down as a result of an other-than-temporary impairment or for changes in the expected credit loss allowance.

Net realized gains and losses on investments and the change in unrealized gains and losses on the Company’s investments recorded at fair value are determined on a specific-identification basis and were as follows:

	Gross Realized Gains		Gross Realized Losses		Net (Increase) Decrease in CECL Allowance		Change in Net Unrealized Gains (Losses)		Changes in Fair Value Reflected in Earnings		Changes in Fair Value Reflected in AOCI, before tax
	(in millions)
Three Months Ended March 31, 2022
Fixed maturity securities	$	1.9	$	(0.2)	$	(2.0)	$	(111.6)	$	(0.3)	$	(111.6)
Equity securities	20.6		(2.0)		—		(35.7)		(17.1)		—
Other invested assets	—		—		—		0.1		0.1		—
Total investments	$	22.5	$	(2.2)	$	(2.0)	$	(147.2)	$	(17.3)	$	(111.6)

Three Months Ended March 31, 2021
Fixed maturity securities	$	0.7	$	(0.4)	$	0.5	$	(45.6)	$	0.8	$	(45.6)
Equity securities	0.9		(0.3)		—		8.8		9.4		—
Other invested assets	—		—		—		0.7		0.7		—
Short-term investments	—		—		—		(0.1)		—		(0.1)
Total investments	$	1.6	$	(0.7)	$	0.5	$	(36.2)	$	10.9	$	(45.7)

Proceeds from the sales of fixed maturity securities were $92.0 million for the three months ended March 31, 2022, compared to $74.0 million for the three months ended March 31, 2021.

Net investment income was as follows:

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Fixed maturity securities	$	18.7	$	18.2
Equity securities	1.6		0.9
Other invested assets	0.4		0.2
Short-term investments	—		0.2
Gross investment income	20.7		19.5
Investment expenses	(1.6)		(1.1)
Net investment income	$	19.1	$	18.4

The Company is required by various state laws and regulations to support, through securities on deposit or otherwise, its outstanding loss reserves in certain states in which it does business. These laws and regulations govern not only the amount but also the types of securities that are eligible for deposit. As of March 31, 2022 and December 31, 2021, securities having a fair value of $819.9 million and $861.4 million, respectively, were on deposit. Additionally, standby letters of credit from the FHLB were in place in lieu of $70.0 million of securities on deposit as of March 31, 2022 and December 31, 2021 (See Note 10).

Certain reinsurance contracts require the Company’s funds to be held in trust for the benefit of the ceding reinsurer to secure the outstanding liabilities assumed by the Company. The fair value of fixed maturity securities and restricted cash and cash equivalents held in trust for the benefit of ceding reinsurers at March 31, 2022 and December 31, 2021 was $3.0 million and $3.1 million, respectively.

XML

Current Expected Credit Losses

3 Months Ended

Mar. 31, 2022

Credit Loss [Abstract]

Credit Losses

Current Expected Credit Losses

Premiums Receivable

Premiums receivable balances are all due within one year or less. The Company currently determines the allowance for premiums receivable based on an internal aging schedule using collectability and historical payment patterns, as well as current and expected future market conditions to determine the appropriateness of the allowance. Historical payment patterns and future market conditions provide the basis for the estimation along with similar risk characteristics and the Company's business strategy, which have not changed significantly over time. The Company will continually assess the historical payment patterns and aging schedule to reflect the differences in our current conditions and future forecasted changes, including any impact from

the COVID-19 pandemic and related economic stability, including recent inflationary pressures. Changes in the allowance for CECL are recorded through underwriting and general and administrative expenses.

The table below shows the changes in CECL on premiums receivable.

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Beginning balance of CECL on premiums receivable	$	10.3	$	10.8
Current period provision for CECL	3.2		3.3
Write-offs charged against CECL	(0.9)		(0.1)
Recoveries collected	(2.6)		(1.8)
Ending balance of CECL on premiums receivable	$	10.0	$	12.2

Reinsurance Recoverable

In assessing an allowance for reinsurance assets, which includes reinsurance recoverables and contingent commission receivables, the Company considers historical information, financial strength of reinsurers, collateralization amounts, and ratings to determine the appropriateness of the allowance. Historically, the Company has not experienced a credit loss from reinsurance transactions. In assessing future default, the Company evaluated the allowance for CECL under the ratings-based method using the A.M. Best Average Cumulative Net Impairment Rates. Reinsurer ratings are also assessed through this process. Changes in CECL are recorded through underwriting and general and administrative expenses.

The table below shows the changes in CECL on reinsurance recoverables.

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Beginning balance of CECL on reinsurance recoverables	$	0.6	$	0.4
Current period provision for CECL	—		—
Ending balance of CECL on reinsurance recoverables	$	0.6	$	0.4

Investments

The Company assesses all AFS debt securities in an unrealized loss position for CECL. The Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria is met, the security's amortized cost basis is written down to its fair value. For AFS debt securities that do not meet either criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. Any impairment that has not been recorded through CECL is recognized in Accumulated other comprehensive (loss) income on the Company's Consolidated Balance Sheets. Changes in CECL are recorded through realized capital losses.

As of March 31, 2022, the Company established an aggregate allowance for CECL in the amount of $2.2 million. For the Company’s investments in fixed-income debt securities, the allowance for CECL was determined by: (i) observing the credit characteristics of those debt securities that may have demonstrated a credit loss as of that date and by comparing the present value of cash flows expected to be collected to its amortized cost basis; and (ii) observing the credit characteristics of those debt securities that are expected to demonstrate a credit loss in the future by comparing the present value of cash flows expected to be collected to its amortized cost basis. The expected present value of cash flows are calculated using scenario based credit loss models derived from the discounted cash flows under the Comprehensive Capital Analysis Review (CCAR) framework, which is adopted by the Federal Reserve.

As of March 31, 2022, the Company did not intend to sell any of its AFS debt securities in which its amortized cost exceeded its fair value.

Accrued interest receivable on AFS debt securities totaled $17.9 million at March 31, 2022 and is excluded from the estimate of CECL based on historically timely payments.

The table below shows the changes in the allowance for CECL on available-for-sale securities.

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Beginning balance of CECL on AFS securities	$	0.2	$	0.7
Current period provision for CECL	2.2		—
Reductions in allowance from disposals	—		(0.2)
Recoveries of amounts previously written off	(0.2)		(0.3)
Ending balance of CECL on AFS securities	$	2.2	$	0.2

XML

Property and Equipment

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

Property and Equipment

Property and equipment consists of the following:

	As of March 31,		As of December 31,
	2022		2021
	(in millions)
Furniture and equipment	$	3.4	$	3.3
Leasehold improvements	5.0		5.0
Computers and software	46.8		46.8
Automobiles	0.8		0.8
Property and equipment, gross	56.0		55.9
Accumulated depreciation	(42.0)		(41.2)
Property and equipment, net	$	14.0	$	14.7

Depreciation expenses related to property and equipment for the three months ended March 31, 2022 were $1.5 million and $7.4 million for the year ended December 31, 2021. Internally developed software costs of $0.5 million were capitalized during the three months ended March 31, 2022, and $2.3 million in internally developed software costs were capitalized during the year ended December 31, 2021.

Cloud Computing Arrangements

The Company’s capitalized costs associated with cloud computing arrangements totaled $39.4 million and $43.9 million, which were comprised of service contract fees and implementation costs associated with hosting arrangements as of March 31, 2022 and December 31, 2021, respectively. Total amortization for hosting arrangements was $4.0 million for the three months ended March 31, 2022, and $14.2 million for the year ended December 31, 2021.

Leases

The Company determines if an arrangement is a lease at the inception of the transaction. Operating leases for offices are presented as a right-of-use asset (ROU asset) and lease liability on the Company’s Consolidated Balance Sheets. Financing leases for automobiles are included in property and equipment and other liabilities on the Company’s Consolidated Balance Sheets.

ROU assets represent the right to use an underlying asset for the lease term and the lease liability represents the obligation to make lease payments arising from the lease transaction. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term. The Company uses collateralized incremental borrowing rates to determine the present value of lease payments. The ROU assets also include lease payments less any lease incentives within a lease agreement. The Company’s lease terms may include options to extend or terminate a lease. Lease expense for lease payments is recognized on a straight-line basis over the lease term. As of March 31, 2022, the Company’s operating leases have remaining terms of 1 year to 7 years, with options to extend up to 9 years with no termination provision. The Company’s finance leases have an option to terminate after 1 year.

Components of lease expense were as follows:

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Operating lease expense	$	0.9	$	1.1
Finance lease expense	—		—
Total lease expense	$	0.9	$	1.1

As of March 31, 2022, the weighted average remaining lease term for operating leases was 5.1 years and for finance leases was 3.5 years. The weighted average discount rate was 2.2% and 7.7% for operating and finance leases, respectively.

Maturities of lease liabilities were as follows:

	As of March 31, 2022
	Operating Leases		Finance Leases
	(in millions)
2022	$	3.3	$	0.1
2023	3.3		0.2
2024	3.2		0.2
2025	3.1		0.1
2026	2.8		—
Thereafter	1.8		—
Total lease payments	17.5		0.6
Less: imputed interest	(1.8)		—
Total	$	15.7	$	0.6

Supplemental balance sheet information related to leases was as follows:

	As of March 31,		As of December 31,
	2022		2021
	(in millions)
Operating leases:
Operating lease right-of-use asset	$	13.5	$	14.2
Operating lease liability	15.7		16.6
Finance leases:
Property and equipment, gross	0.8		0.8
Accumulated depreciation	(0.3)		(0.3)
Property and equipment, net	0.5		0.5
Other liabilities	$	0.6	$	0.5

Supplemental cash flow information related to leases was as follows:

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	0.9	$	1.1
Financing cash flows used for finance leases	—		—

XML

Income Taxes	3 Months Ended
	Mar. 31, 2022
Income Taxes [Abstract]
Income Taxes	Income TaxesThe Company’s effective tax rate was 8.0% for the three months ended March 31, 2022, compared to 16.3% for the corresponding period of 2021. 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.

XML

Liability for Unpaid Losses and Loss Adjustment Expenses

3 Months Ended

Mar. 31, 2022

Liability for Unpaid Losses and Loss Adjustment Expenses [Abstract]

Liability for Unpaid Losses and Loss Adjustment Expenses

Liability for Unpaid Losses and Loss Adjustment Expenses 

The following table represents a reconciliation of changes in the liability for unpaid losses and LAE.

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Unpaid losses and LAE at beginning of period	$	1,981.2	$	2,069.4
Less reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE	476.9		497.0
Net unpaid losses and LAE at beginning of period	1,504.3		1,572.4
Losses and LAE, net of reinsurance, incurred during the period related to:
Current period	96.3		85.6
Prior periods	—		(13.9)
Total net losses and LAE incurred during the period	96.3		71.7
Paid losses and LAE, net of reinsurance, related to:
Current period	4.6		4.7
Prior periods	85.8		97.6
Total net paid losses and LAE during the period	90.4		102.3
Ending unpaid losses and LAE, net of reinsurance	1,510.2		1,541.8
Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE	471.7		492.3
Unpaid losses and LAE at end of period	$	1,981.9	$	2,034.1

Total net losses and LAE included in the above table exclude amortization of the deferred reinsurance gain—LPT Agreement, which totaled $2.1 million for each of the three months ended March 31, 2022 and 2021 (See Note 9).

The change in incurred losses and LAE attributable to prior periods for the three months ended March 31, 2022, as compared to March 31, 2021, was primarily due to the absence of prior accident year loss reserve development, as ultimate incurred losses for prior periods did not change during the three months ended March 31, 2022. Favorable prior accident loss reserve development totaled $13.9 million for the three months ended March 31, 2021, which included $0.5 million of unfavorable development on the Company’s assigned risk business.

The favorable prior accident year loss development recognized during the three months ended March 31, 2021 was primarily the result of observed favorable paid loss cost trends primarily for accident years 2017 and prior.

XML

LPT Agreement

3 Months Ended

Mar. 31, 2022

LPT Agreement [Abstract]

LPT Agreement

LPT Agreement

The Company is party to the LPT Agreement under which $1.5 billion in liabilities for losses and LAE related to claims incurred by the Fund prior to July 1, 1995 were reinsured for consideration of $775.0 million. The LPT Agreement provides coverage up to $2.0 billion. The Company records its estimate of contingent profit commission in the accompanying Consolidated Balance Sheets as Contingent commission receivable–LPT Agreement and a corresponding liability is recorded in the accompanying Consolidated Balance Sheets in Deferred reinsurance gain–LPT Agreement. The Deferred Gain is being amortized using the recovery method. Amortization is determined by the proportion of actual reinsurance recoveries to total estimated recoveries over the life of the LPT Agreement, except for the contingent profit commission, which is amortized through June 30, 2024, the date through which the Company is entitled to receive a contingent profit commission under the LPT Agreement. The amortization is recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive (loss) income. Any adjustments to the Deferred Gain are recorded in losses and LAE incurred in the accompanying consolidated statements of comprehensive (loss) income.

The Company amortized $2.1 million of the Deferred Gain for each of the three months ended March 31, 2022 and 2021. The remaining Deferred Gain was $112.3 million and $114.4 million as of March 31, 2022 and December 31, 2021, respectively. The estimated remaining liabilities subject to the LPT Agreement were $323.6 million and $328.7 million as of March 31, 2022 and December 31, 2021, respectively. Losses and LAE paid with respect to the LPT Agreement totaled $843.9 million and $838.8 million from inception through March 31, 2022 and December 31, 2021, respectively.

XML

Notes Payable

3 Months Ended

Mar. 31, 2022

Notes Payable [Abstract]

Debt Disclosure [Text Block]

FHLB Advances, Notes Payable and Other Financing Arrangements

On December 15, 2020, the Company entered into a Credit Agreement (the Credit Agreement) with a syndicate of financial institutions. The Credit Agreement provides for a $75.0 million three-year revolving credit facility and is guaranteed by certain of the Company’s wholly owned subsidiaries (Employers Group, Inc. and Cerity Group, Inc.). Borrowings under the Credit Agreement may be used for working capital and general corporate purposes of the Company and its subsidiaries. Pursuant to the Credit Agreement, the Company also has an option to request an increase of the credit available under the facility up to a maximum facility amount of $125.0 million, subject to the consent of lenders and the satisfaction of certain conditions.

The interest rates applicable to loans under the Credit Agreement are generally based on a base rate plus a specified margin, ranging from 0.25% to 1.25%, or the Eurodollar rate (which will convert to an alternative reference rate once LIBOR is discontinued), plus a specified margin, ranging from 1.25% to 2.25%. In addition, the Company will pay a fee on each lender’s commitment, ranging from 0.20% to 0.50%, irrespective of usage. The applicable margin and the amount of such commitment fee vary based upon the financial strength rating of the Company’s insurance subsidiaries as most recently announced by A.M. Best or the Company’s debt to total capitalization ratio if such financial strength rating is not available. Interest paid and fees incurred pursuant to the Credit Agreement during the three months ended March 31, 2022 totaled $0.1 million.

The Credit Agreement contains covenants that require the Company and its consolidated subsidiaries to maintain: (i) a minimum consolidated net worth of no less than 70% of the Company’s stockholders’ equity as of September 30, 2020, plus 50% of the Company’s aggregate net income thereafter; and (ii) a debt to total capitalization ratio of no more than 35%, in each case as determined in accordance with the Credit Agreement. At March 31, 2022, the Company was in compliance with all debt covenants.

The Company incurred $0.7 million in debt issuance costs in connection with the Credit Agreement, which are being amortized over the three-year life of the facility in Interest and Financing expenses. The annual commitment and administrative fee on the unused portion of the facility is 0.30%, for a maximum of $225,000, and an annual agency fee of $25,000. Advances can be repaid at any time without prepayment penalties or additional fees. The Company borrowed and subsequently repaid $10.0 million under the credit facility during the three months ended March 31, 2022. As of March 31, 2022, the Company had no outstanding borrowings on the credit facility.

Other financing arrangements are comprised of the following:

EICN, ECIC, EPIC, and EAC are members of the FHLB. Membership allows the insurance subsidiaries access to collateralized advances, which may be used to support and enhance liquidity management. The amount of advances that may be taken is dependent on statutory admitted assets on a per company basis.

During the first quarter of 2022, the Company's insurance subsidiaries received advances of $60.0 million under the FHLB Standard Credit Program. These advances are collateralized by eligible investment securities. The interest rate on these advances is adjusted daily per the Secure Overnight Funding Rate (SOFR), published by the Federal Reserve. As of March 31, 2022, the Company's weighted average daily interest rate on these advances was 0.33%. Interest paid during the three months ended March 31, 2022 was less than $0.1 million. Furthermore, these advances can be repaid at any time without prepayment penalties or additional fees.

During the second quarter of 2020, the FHLB announced its Zero Interest Recovery Advance program (the FHLB Advance Program). The FHLB Advance Program is a zero percent interest, six-month or one-year credit product that members can use to provide immediate relief to property owners, businesses, and other customers from the effects of the COVID-19 pandemic. Each member was allocated up to $10.0 million in advances under the FHLB Advance Program.

On May 11, 2020, the Company's insurance subsidiaries received a total of $35.0 million of advances under the FHLB Advance Program. These advances were secured by collateral previously pledged to the FHLB by the Company’s insurance subsidiaries in support of their existing collateralized advance facility, which has been reduced by the amount of these outstanding advances. The Company repaid $15.0 million of its advances on November 4, 2020, $5.0 million on March 31, 2021, and the remaining $15.0 million on May 4, 2021. As of March 31, 2022, the Company has no outstanding advances.

FHLB membership also allows the Company’s insurance subsidiaries access to standby letters of credit (Letter of Credit Agreements). On January 26, 2021, EPIC chose to amend its existing Letter of Credit Agreement to decrease its credit amount to $10.0 million. On August 13, 2021, EAC and ECIC chose to amend their existing Letter of Credit Agreements to decrease their respective credit amounts to $25.0 million and $35.0 million. The amended Letter of Credit Agreements will expire on March 31, 2023, and will remain evergreen with automatic one-year extensions unless the FHLB notifies the beneficiary at least 60 days prior to the then applicable expiration date of its election not to renew. The Letter of Credit Agreements may only be used to satisfy, in whole or in part, insurance deposit requirements with the State of California and are fully secured with eligible collateral at all times. The Letter of Credit Agreements are subject to annual maintenance charges and a fee of 15 basis points on issued amounts. As of both March 31, 2022 and December 31, 2021, letters of credit totaling $70.0 million, were issued in lieu of securities on deposit with the State of California under these Letter of Credit Agreements.

As of March 31, 2022 and December 31, 2021, investment securities having a fair value of $237.0 million and $385.6 million, respectively, were pledged to the FHLB by the Company’s insurance subsidiaries in support of the collateralized advance facility and the Letter of Credit Agreements.

XML

Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2022

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income, Net

Accumulated Other Comprehensive (Loss) Income

Accumulated other comprehensive (loss) income is comprised of unrealized gains and losses on investments classified as AFS, net of deferred taxes. The following table summarizes the components of accumulated other comprehensive (loss) income:

	March 31, 2022		December 31, 2021
	(in millions)
Net unrealized (losses) gains on investments, before taxes	$	(34.9)	$	76.7
Deferred tax benefit (expense) on net unrealized gains and losses	7.3		(16.1)
Total accumulated other comprehensive (loss) income	$	(27.6)	$	60.6

XML

Stock-Based Compensation

3 Months Ended

Mar. 31, 2022

Stock-Based Compensation [Abstract]

Stock-Based compensation

Stock-Based Compensation

The Company awarded restricted stock units (RSUs) and performance share units (PSUs) to certain employees and non-employee Directors of the Company as follows:

	Number Awarded	Weighted Average Fair Value on Date of Grant	Aggregate Fair Value on Date of Grant
			(in millions)
March 2022
RSUs(1)	23,296	38.16	$	0.9
RSUs(1)	63,120	40.54	2.6
PSUs(2)	73,120	40.54	3.0

(1)The RSUs awarded in March 2022 were awarded to certain employees of the Company and vest 25% on March 15, 2023, and each of the subsequent three anniversaries of that date. The RSUs are subject to accelerated vesting in certain circumstances, including but not limited to: death, disability, retirement, or in connection with a change of control of the Company.

(2)The PSUs awarded in March 2022 were awarded to certain employees of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 250% of the target awards. The value shown in the table represents the aggregate number of PSUs awarded at the target level.

Employees who were awarded RSUs and PSUs are entitled to receive dividend equivalents for eligible awards, payable in cash, when and if, the underlying award vests and becomes payable. If the underlying award does not vest or is forfeited, dividend equivalents with respect to the underlying award fail to become payable and are forfeited.

Stock options exercised totaled 41,665 for the three months ended March 31, 2022, 41,851 for the three months ended March 31, 2021, and 48,051 for the year ended December 31, 2021.

As of March 31, 2022, the Company had 23,500 stock options, 241,204 RSUs, and 184,393 PSUs (based on target number awarded) outstanding.

XML

Earnings Per Share

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Earnings Per Share

Earnings (Loss) Per Common Share

Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilutive impact of all common stock equivalents on earnings per share. Diluted earnings per share includes common shares assumed issued under the “treasury stock method,” which reflects the potential dilution that would occur if outstanding RSUs and PSUs vested and stock options were to be exercised.

Outstanding RSUs and PSUs awarded to employees are entitled to receive dividend equivalents when and if, the underlying award vests or becomes payable. Therefore, these awards are not considered participating securities for the purposes of determining earnings per share.

The following table presents the net income (loss) and the weighted average number of shares outstanding used in the earnings (loss) per common share calculations.

	Three Months Ended
	March 31,
	2022		2021
	(in millions, except share data)
Net (loss) income	$	(2.3)	$	23.1
Weighted average number of shares outstanding—basic	27,802,972		28,516,731
Effect of dilutive securities:
PSUs	204,029		344,615
Stock options	22,877		34,530
RSUs	47,730		72,463
Dilutive potential shares	274,636		451,608
Weighted average number of shares outstanding—diluted	28,077,608		28,968,339

XML

Segment Reporting

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Segment Reporting

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 the Company's strategic partnerships and alliances.

The Cerity segment represents the business offered under the Cerity brand name, which includes the Company's direct-to-customer business.

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 business assumed and ceded by CIC. These expenses are not considered to be part of a reportable segment and are not otherwise allocated to a reportable segment.

The Company has determined that it is not practicable to report identifiable assets by segment since certain assets are used interchangeably among the segments.

The following table summarizes the Company's written premium and components of net income (loss) before income taxes by reportable segment.

	Employers		Cerity		Corporate and Other		Total
	(in millions)
Three Months Ended March 31, 2022
Gross premiums written	$	171.2	$	1.2	$	—	$	172.4
Net premiums written	169.2		1.2		—		170.4
Net premiums earned	149.6		0.6		—		150.2
Net investment income	17.6		0.7		0.8		19.1
Net realized and unrealized losses on investments	(15.6)		(0.4)		(1.3)		(17.3)
Total revenues	151.6		0.9		(0.5)		152.0
Losses and loss adjustment expenses	95.9		0.4		(2.1)		94.2
Commission expense	20.9		—		—		20.9
Underwriting and general and administrative expenses	32.8		3.2		3.3		39.3
Interest and financing expenses	—		—		0.1		0.1
Total expenses	149.6		3.6		1.3		154.5
Net income (loss) before income taxes	$	2.0	$	(2.7)	$	(1.8)	$	(2.5)
Three Months Ended March 31, 2021
Gross premiums written	$	148.0	$	0.3	$	—	$	148.3
Net premiums written	146.6		0.3		—		146.9
Net premiums earned	133.9		—		—		133.9
Net investment income	17.6		0.7		0.1		18.4
Net realized and unrealized gains on investments	10.8		0.1		—		10.9
Other income	0.4		—		—		0.4
Total revenues	162.7		0.8		0.1		163.6
Losses and loss adjustment expenses	71.7		—		(2.1)		69.6
Commission expense	16.8		—		—		16.8
Underwriting and general and administrative expenses	37.3		3.7		5.6		46.6
Interest and financing expenses	—		—		0.1		0.1
Other expenses	2.9		—		—		2.9
Total expenses	128.7		3.7		3.6		136.0
Net income (loss) before income taxes	$	34.0	$	(2.9)	$	(3.5)	$	27.6

XML

Valuation of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value of Financial Instruments [Abstract]

Estimated fair value of financial instruments table

The carrying value and the estimated fair value of the Company’s financial instruments at fair value were as follows:

	March 31, 2022				December 31, 2021
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
	(in millions)
Financial assets
Total investments at fair value	$	2,571.0	$	2,571.0	$	2,692.0	$	2,692.0
Cash and cash equivalents	130.5		130.5		75.1		75.1
Restricted cash and cash equivalents	0.2		0.2		0.2		0.2

Fair value, assets and liabilities measured on recurring basis table

The following table presents the Company’s investments at fair value and the corresponding fair value measurements.

	March 31, 2022						December 31, 2021
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
	(in millions)
Fixed maturity securities:
U.S. Treasuries	$	—	$	63.2	$	—	$	—	$	65.7	$	—
U.S. Agencies	—		2.3		—		—		2.4		—
States and municipalities	—		372.9		—		—		436.1		—
Corporate securities	—		1,045.1		—		—		1,080.3		—
Residential mortgage-backed securities	—		289.4		—		—		321.8		—
Commercial mortgage-backed securities	—		66.5		—		—		92.3		—
Asset-backed securities	—		67.5		—		—		68.5		—
Collateralized loan obligations	—		183.3		—		—		85.4		—
Foreign government securities	—		11.6		—		—		12.5		—
Other securities	—		169.2		—		—		177.7		—
Total fixed maturity securities	$	—	$	2,271.0	$	—	$	—	$	2,342.7	$	—
Equity securities at fair value:
Industrial and miscellaneous	$	248.3	$	—	$	—	$	283.1	$	—	$	—
Other	48.5		—		—		55.7		—		—
Total equity securities at fair value	$	296.8	$	—	$	—	$	338.8	$	—	$	—
Short-term investments	$	1.0	$	2.2	$	—	$	—	$	10.5	$	—
Total investments at fair value	$	297.8	$	2,273.2	$	—	$	338.8	$	2,353.2	$	—

Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Table Text Block]

Financial Instruments Carried at Net Asset Value

The Company has investments in private equity limited partnership interests that are included in Other invested assets on the Company’s Consolidated Balance Sheets. These investments do not have readily determinable fair values and are carried at net asset value (NAV) and therefore are excluded from the fair value hierarchy. The Company initially estimates the value of these investments using the transaction price. In subsequent periods, the Company measures these investments using NAV per share provided quarterly by the general partner, based on financial statements that are audited annually. These investments are generally not redeemable by the investees and cannot be sold without approval of the general partner. These investments have a fund term of 10 to 12 years, subject to two or three one-year extensions at the general partner’s discretion. The Company will receive distributions of proceeds from dividends and interest from fund investments, as well as from the disposition of a fund investment, or portion thereof. The Company expects these distributions from time-to-time during the full course of the fund term. As of March 31, 2022, the Company had unfunded commitments to these private equity limited partnerships totaling $44.7 million. In April 2022, the Company entered into an additional investment in a private equity limited partnership with an unfunded commitment amount totaling $15.0 million.

Additionally, certain cash equivalents, principally money market securities, are measured using NAV, which approximates fair value.

The following table presents cash and investments carried at NAV on the Company’s Consolidated Balance Sheets.

	March 31, 2022		December 31, 2021
	(in millions)
Cash equivalents carried at NAV	$	41.0	$	29.5
Other invested assets carried at NAV	40.4		38.4

XML

Investments (Tables)

3 Months Ended

Mar. 31, 2022

Investments [Abstract]

Debt Securities, Available-for-sale

The amortized cost, gross unrealized gains, gross unrealized losses, and estimated fair value of the Company’s available-for-sale (AFS) investments were as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(in millions)
At March 31, 2022
Fixed maturity securities
U.S. Treasuries	$	64.4	$	0.4	$	(1.6)	$	63.2
U.S. Agencies	2.2		0.1		—		2.3
States and municipalities	368.6		6.2		(1.9)		372.9
Corporate securities	1,061.1		11.1		(27.1)		1,045.1
Residential mortgage-backed securities	303.9		1.0		(15.5)		289.4
Commercial mortgage-backed securities	67.8		0.3		(1.6)		66.5
Asset-backed securities	71.0		0.1		(3.6)		67.5
Collateralized loan obligations	184.4		—		(1.1)		183.3
Foreign government securities	12.7		—		(1.1)		11.6
Other securities(1)	169.8		0.7		(1.3)		169.2
Total fixed maturity securities	$	2,305.9	$	19.9	$	(54.8)	$	2,271.0
Short-term investments	3.2		—		—		3.2
Total AFS investments	$	2,309.1	$	19.9	$	(54.8)	$	2,274.2

At December 31, 2021
Fixed maturity securities
U.S. Treasuries	$	64.3	$	1.6	$	(0.2)	$	65.7
U.S. Agencies	2.2		0.2		—		2.4
States and municipalities	413.8		22.4		(0.1)		436.1
Corporate securities	1,035.1		47.0		(1.8)		1,080.3
Residential mortgage-backed securities	319.0		7.0		(4.2)		321.8
Commercial mortgage-backed securities	87.9		4.5		(0.1)		92.3
Asset-backed securities	68.6		0.4		(0.5)		68.5
Collateralized loan obligations	85.5		—		(0.1)		85.4
Foreign government securities	12.7		—		(0.2)		12.5
Other securities(1)	177.0		1.2		(0.5)		177.7
Total fixed maturity securities	$	2,266.1	$	84.3	$	(7.7)	$	2,342.7
Short-term investments	10.5		—		—		10.5
Total AFS investments	$	2,276.6	$	84.3	$	(7.7)	$	2,353.2

(1)Other securities within fixed maturity securities consist of bank loans, which are classified as AFS and reported at fair value.

Equity securities table

The cost and estimated fair value of the Company’s equity securities recorded at fair value at March 31, 2022 and December 31, 2021 were as follows:

	Cost		Estimated Fair Value
	(in millions)
At March 31, 2022
Equity securities at fair value
Industrial and miscellaneous	$	167.7	$	248.3
Other	38.7		48.5
Total equity securities at fair value	$	206.4	$	296.8

At December 31, 2021
Equity securities at fair value
Industrial and miscellaneous	$	170.5	$	283.1
Other	42.1		55.7
Total equity securities at fair value	$	212.6	$	338.8

Other invested assets

The Company had Other invested assets totaling $40.4 million and $38.4 million (initial cost of $35.9 million and $34.1 million) at March 31, 2022 and December 31, 2021, respectively, consisting of private equity limited partnerships, which are carried at NAV based on information provided by the general partner. These investments are non-redeemable until conversion and are periodically evaluated by the Company for impairment based on the ultimate recovery of the investment. Changes in the value of these investments are recorded through Net realized and unrealized gains and losses on the Company’s Consolidated Statements of Comprehensive (Loss) Income.

Investments classified by contractual maturity date table

The amortized cost and estimated fair value of the Company’s fixed maturity securities at March 31, 2022, by contractual maturity, are shown below. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Estimated Fair Value
	(in millions)
Due in one year or less	$	87.9	$	88.6
Due after one year through five years	745.7		749.6
Due after five years through ten years	733.2		718.8
Due after ten years	112.0		107.3
Mortgage and asset-backed securities	627.1		606.7
Total	$	2,305.9	$	2,271.0

Unrealized loss on investments table

The following is a summary of AFS investments that have been in a continuous unrealized loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 months or greater as of March 31, 2022 and December 31, 2021.

	March 31, 2022					December 31, 2021
	Estimated Fair Value		Gross Unrealized Losses		Number of Issues	Estimated Fair Value		Gross Unrealized Losses		Number of Issues
	(dollars in millions)
Less than 12 months:
Fixed maturity securities
U.S. Treasuries	$	36.8	$	(1.5)	11	$	12.8	$	(0.2)	4
States and municipalities	51.3		(1.9)		21	$	7.7	(0.1)		4
Corporate securities	495.7		(25.5)		278	$	113.0	(1.8)		87
Residential mortgage-backed securities	166.6		(7.2)		143	146.3		(3.9)		65
Commercial mortgage-backed securities	47.8		(1.3)		20	—		—		—
Asset-backed securities	47.0		(3.2)		20	50.1		(0.5)		14
Collateralized loan obligations	148.9		(0.9)		28	24.4		(0.1)		10
Foreign government securities	4.3		(0.4)		1	12.5		(0.2)		2
Other securities	105.0		(1.0)		258	66.3		(0.4)		176
Total fixed maturity securities	1,103.4		(42.9)		780	433.1		(7.2)		362
Total less than 12 months	$	1,103.4	$	(42.9)	780	$	433.1	$	(7.2)	362
12 months or greater:
Fixed maturity securities
Corporate securities	$	14.8	$	(1.7)	17	$	—	$	—	—
Residential mortgage-backed securities	78.0		(8.4)		25	4.9		(0.3)		3
Commercial mortgage-backed securities	2.3		(0.2)		2	2.4		(0.1)		2
Asset-backed securities	5.9		(0.3)		2	—		—		—
Collateralized loan obligations	22.5		(0.3)		4	—		—		—
Foreign government securities	7.6		(0.6)		2	—		—		—
Other securities	27.7		(0.4)		85	8.0		(0.1)		29
Total fixed maturity securities	158.8		(11.9)		137	15.3		(0.5)		34
Total 12 months or greater	$	158.8	$	(11.9)	137	$	15.3	$	(0.5)	34

Unrealized gain (loss) on investments

Net realized gains and losses on investments and the change in unrealized gains and losses on the Company’s investments recorded at fair value are determined on a specific-identification basis and were as follows:

	Gross Realized Gains		Gross Realized Losses		Net (Increase) Decrease in CECL Allowance		Change in Net Unrealized Gains (Losses)		Changes in Fair Value Reflected in Earnings		Changes in Fair Value Reflected in AOCI, before tax
	(in millions)
Three Months Ended March 31, 2022
Fixed maturity securities	$	1.9	$	(0.2)	$	(2.0)	$	(111.6)	$	(0.3)	$	(111.6)
Equity securities	20.6		(2.0)		—		(35.7)		(17.1)		—
Other invested assets	—		—		—		0.1		0.1		—
Total investments	$	22.5	$	(2.2)	$	(2.0)	$	(147.2)	$	(17.3)	$	(111.6)

Three Months Ended March 31, 2021
Fixed maturity securities	$	0.7	$	(0.4)	$	0.5	$	(45.6)	$	0.8	$	(45.6)
Equity securities	0.9		(0.3)		—		8.8		9.4		—
Other invested assets	—		—		—		0.7		0.7		—
Short-term investments	—		—		—		(0.1)		—		(0.1)
Total investments	$	1.6	$	(0.7)	$	0.5	$	(36.2)	$	10.9	$	(45.7)

Investment income table

Net investment income was as follows:

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Fixed maturity securities	$	18.7	$	18.2
Equity securities	1.6		0.9
Other invested assets	0.4		0.2
Short-term investments	—		0.2
Gross investment income	20.7		19.5
Investment expenses	(1.6)		(1.1)
Net investment income	$	19.1	$	18.4

XML

Current Expected Credit Losses (Tables)

3 Months Ended

Mar. 31, 2022

Credit Loss [Abstract]

Premium Receivable, Allowance for Credit Loss [Table Text Block]

The table below shows the changes in CECL on premiums receivable.

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Beginning balance of CECL on premiums receivable	$	10.3	$	10.8
Current period provision for CECL	3.2		3.3
Write-offs charged against CECL	(0.9)		(0.1)
Recoveries collected	(2.6)		(1.8)
Ending balance of CECL on premiums receivable	$	10.0	$	12.2

Reinsurance Recoverable, Allowance for Credit Loss [Table Text Block]

The table below shows the changes in CECL on reinsurance recoverables.

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Beginning balance of CECL on reinsurance recoverables	$	0.6	$	0.4
Current period provision for CECL	—		—
Ending balance of CECL on reinsurance recoverables	$	0.6	$	0.4

Debt Securities, Available-for-sale, Allowance for Credit Loss [Table Text Block]

The table below shows the changes in the allowance for CECL on available-for-sale securities.

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Beginning balance of CECL on AFS securities	$	0.2	$	0.7
Current period provision for CECL	2.2		—
Reductions in allowance from disposals	—		(0.2)
Recoveries of amounts previously written off	(0.2)		(0.3)
Ending balance of CECL on AFS securities	$	2.2	$	0.2

XML

Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment [Table Text Block]

Property and equipment consists of the following:

	As of March 31,		As of December 31,
	2022		2021
	(in millions)
Furniture and equipment	$	3.4	$	3.3
Leasehold improvements	5.0		5.0
Computers and software	46.8		46.8
Automobiles	0.8		0.8
Property and equipment, gross	56.0		55.9
Accumulated depreciation	(42.0)		(41.2)
Property and equipment, net	$	14.0	$	14.7

Lease, Cost [Table Text Block]

Components of lease expense were as follows:

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Operating lease expense	$	0.9	$	1.1
Finance lease expense	—		—
Total lease expense	$	0.9	$	1.1

Lessee, Operating and Finance Lease Liability Maturity [Table Text Block]

Maturities of lease liabilities were as follows:

	As of March 31, 2022
	Operating Leases		Finance Leases
	(in millions)
2022	$	3.3	$	0.1
2023	3.3		0.2
2024	3.2		0.2
2025	3.1		0.1
2026	2.8		—
Thereafter	1.8		—
Total lease payments	17.5		0.6
Less: imputed interest	(1.8)		—
Total	$	15.7	$	0.6

Supplemental Balance Sheet Information related to Leases [Table Text Block]

Supplemental balance sheet information related to leases was as follows:

	As of March 31,		As of December 31,
	2022		2021
	(in millions)
Operating leases:
Operating lease right-of-use asset	$	13.5	$	14.2
Operating lease liability	15.7		16.6
Finance leases:
Property and equipment, gross	0.8		0.8
Accumulated depreciation	(0.3)		(0.3)
Property and equipment, net	0.5		0.5
Other liabilities	$	0.6	$	0.5

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

Supplemental cash flow information related to leases was as follows:

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	0.9	$	1.1
Financing cash flows used for finance leases	—		—

XML

Liability for Unpaid Losses and Loss Adjustment Expenses (Tables)

3 Months Ended

Mar. 31, 2022

Liability for Unpaid Losses and Loss Adjustment Expenses [Abstract]

Changes in the liability for unpaid losses and LAE table

The following table represents a reconciliation of changes in the liability for unpaid losses and LAE.

	Three Months Ended
	March 31,
	2022		2021
	(in millions)
Unpaid losses and LAE at beginning of period	$	1,981.2	$	2,069.4
Less reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE	476.9		497.0
Net unpaid losses and LAE at beginning of period	1,504.3		1,572.4
Losses and LAE, net of reinsurance, incurred during the period related to:
Current period	96.3		85.6
Prior periods	—		(13.9)
Total net losses and LAE incurred during the period	96.3		71.7
Paid losses and LAE, net of reinsurance, related to:
Current period	4.6		4.7
Prior periods	85.8		97.6
Total net paid losses and LAE during the period	90.4		102.3
Ending unpaid losses and LAE, net of reinsurance	1,510.2		1,541.8
Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE	471.7		492.3
Unpaid losses and LAE at end of period	$	1,981.9	$	2,034.1

XML

Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2022

Accumulated Other Comprehensive Income [Abstract]

Schedule of accumulated other comprehensive income (loss) table

The following table summarizes the components of accumulated other comprehensive (loss) income:

	March 31, 2022		December 31, 2021
	(in millions)
Net unrealized (losses) gains on investments, before taxes	$	(34.9)	$	76.7
Deferred tax benefit (expense) on net unrealized gains and losses	7.3		(16.1)
Total accumulated other comprehensive (loss) income	$	(27.6)	$	60.6

XML

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2022

Stock-Based Compensation [Abstract]

Share-based compensation arrangements by share-based payment award table

The Company awarded restricted stock units (RSUs) and performance share units (PSUs) to certain employees and non-employee Directors of the Company as follows:

	Number Awarded	Weighted Average Fair Value on Date of Grant	Aggregate Fair Value on Date of Grant
			(in millions)
March 2022
RSUs(1)	23,296	38.16	$	0.9
RSUs(1)	63,120	40.54	2.6
PSUs(2)	73,120	40.54	3.0

(1)The RSUs awarded in March 2022 were awarded to certain employees of the Company and vest 25% on March 15, 2023, and each of the subsequent three anniversaries of that date. The RSUs are subject to accelerated vesting in certain circumstances, including but not limited to: death, disability, retirement, or in connection with a change of control of the Company.

(2)The PSUs awarded in March 2022 were awarded to certain employees of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 250% of the target awards. The value shown in the table represents the aggregate number of PSUs awarded at the target level.

XML

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Net income and weighted average common shares outstanding used in earnings per share calculations table

The following table presents the net income (loss) and the weighted average number of shares outstanding used in the earnings (loss) per common share calculations.

	Three Months Ended
	March 31,
	2022		2021
	(in millions, except share data)
Net (loss) income	$	(2.3)	$	23.1
Weighted average number of shares outstanding—basic	27,802,972		28,516,731
Effect of dilutive securities:
PSUs	204,029		344,615
Stock options	22,877		34,530
RSUs	47,730		72,463
Dilutive potential shares	274,636		451,608
Weighted average number of shares outstanding—diluted	28,077,608		28,968,339

XML

Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2022

Net Income before income taxes by segment [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Employers		Cerity		Corporate and Other		Total
	(in millions)
Three Months Ended March 31, 2022
Gross premiums written	$	171.2	$	1.2	$	—	$	172.4
Net premiums written	169.2		1.2		—		170.4
Net premiums earned	149.6		0.6		—		150.2
Net investment income	17.6		0.7		0.8		19.1
Net realized and unrealized losses on investments	(15.6)		(0.4)		(1.3)		(17.3)
Total revenues	151.6		0.9		(0.5)		152.0
Losses and loss adjustment expenses	95.9		0.4		(2.1)		94.2
Commission expense	20.9		—		—		20.9
Underwriting and general and administrative expenses	32.8		3.2		3.3		39.3
Interest and financing expenses	—		—		0.1		0.1
Total expenses	149.6		3.6		1.3		154.5
Net income (loss) before income taxes	$	2.0	$	(2.7)	$	(1.8)	$	(2.5)
Three Months Ended March 31, 2021
Gross premiums written	$	148.0	$	0.3	$	—	$	148.3
Net premiums written	146.6		0.3		—		146.9
Net premiums earned	133.9		—		—		133.9
Net investment income	17.6		0.7		0.1		18.4
Net realized and unrealized gains on investments	10.8		0.1		—		10.9
Other income	0.4		—		—		0.4
Total revenues	162.7		0.8		0.1		163.6
Losses and loss adjustment expenses	71.7		—		(2.1)		69.6
Commission expense	16.8		—		—		16.8
Underwriting and general and administrative expenses	37.3		3.7		5.6		46.6
Interest and financing expenses	—		—		0.1		0.1
Other expenses	2.9		—		—		2.9
Total expenses	128.7		3.7		3.6		136.0
Net income (loss) before income taxes	$	34.0	$	(2.9)	$	(3.5)	$	27.6

Revenue from External Customers by Geographic Areas [Table Text Block]

	March 31, 2022			December 31, 2021			March 31, 2021			December 31, 2020
State	In-force Premiums		Policies In-force	In-force Premiums		Policies In-force	In-force Premiums		Policies In-force	In-force Premiums		Policies In-force
	(dollars in millions)
California	$	260.4	41,588	$	258.4	40,704	$	251.4	39,264	$	262.0	39,610
Florida	41.1		8,275	41.1		7,989	38.6		7,303	37.9		6,898
New York	25.0		7,382	24.5		7,307	25.6		6,724	26.7		6,657
Other (43 states and D.C.)	252.1		57,216	247.4		55,350	237.7		51,481	251.3		50,341
Total in-force	$	578.6	114,461	$	571.4	111,350	$	553.3	104,772	$	577.9	103,506
Final audit premium	15.6		—	13.1		—	6.5		—	(5.8)		—
Total in-force, including final audit premium	$	594.2	114,461	$	584.5	111,350	$	559.8	104,772	$	572.1	103,506

XML

Basis of Presentation (Details)	3 Months Ended
	Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of Reportable Segments	2

XML

Fair Value of Financial Instruments (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total investments at fair value	$ 2,571.0	$ 2,692.0
Total Investments at fair value, estimated fair value	2,571.0	2,692.0
Cash and cash equivalents	130.5	75.1
Cash and cash equivalents, estimated fair value	130.5	75.1
Restricted cash and cash equivalents	0.2	0.2
Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Restricted cash and cash equivalents	$ 0.2	$ 0.2

XML

Fair Value of Financial Instruments, Fair Value Inputs (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	$ 2,271.0	$ 2,342.7
Equity Securities, FV-NI	296.8	338.8
Short-term investments at fair value (amortized cost $3.2 at March 31, 2022 and $10.5 at December 31, 2021)	3.2	10.5
Investments	2,617.0	2,736.0
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities, FV-NI	296.8	338.8
Short-term investments at fair value (amortized cost $3.2 at March 31, 2022 and $10.5 at December 31, 2021)	1.0	0.0
Investments	297.8	338.8
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities, FV-NI	0.0	0.0
Short-term investments at fair value (amortized cost $3.2 at March 31, 2022 and $10.5 at December 31, 2021)	2.2	10.5
Investments	2,273.2	2,353.2
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities, FV-NI	0.0	0.0
Short-term investments at fair value (amortized cost $3.2 at March 31, 2022 and $10.5 at December 31, 2021)	0.0	0.0
Investments	0.0	0.0
Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	2,271.0	2,342.7
Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
US Treasury Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	63.2	65.7
US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	63.2	65.7
US Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
US Government Agencies Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	2.3	2.4
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	2.3	2.4
US Government Agencies Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
US States and Political Subdivisions Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	372.9	436.1
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	372.9	436.1
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Corporate Debt Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	1,045.1	1,080.3
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	1,045.1	1,080.3
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Residential Mortgage Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	289.4	321.8
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	289.4	321.8
Residential Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Commercial Mortgage Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	66.5	92.3
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	66.5	92.3
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Asset-backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	67.5	68.5
Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	67.5	68.5
Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Foreign Government Debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	11.6	12.5
Foreign Government Debt | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Foreign Government Debt | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	11.6	12.5
Foreign Government Debt | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Collateralized Loan Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	183.3	85.4
Collateralized Loan Obligations [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Collateralized Loan Obligations [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	183.3	85.4
Collateralized Loan Obligations [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Other Debt Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	169.2	177.7
Other Debt Obligations [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Other Debt Obligations [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	169.2	177.7
Other Debt Obligations [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturity securities, fair value	0.0	0.0
Industrial and Miscellaneous [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities, FV-NI	248.3	283.1
Industrial and Miscellaneous [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities, FV-NI	248.3	283.1
Industrial and Miscellaneous [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities, FV-NI	0.0	0.0
Industrial and Miscellaneous [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities, FV-NI	0.0	0.0
Other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities, FV-NI	48.5	55.7
Other [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities, FV-NI	48.5	55.7
Other [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities, FV-NI	0.0	0.0
Other [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities, FV-NI	$ 0.0	$ 0.0

XML

Valuation of Financial Instruments Investments at NAV (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Investments at NAV [Abstract]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Unfunded Commitments	$ 44.7
Cash Equivalents Measured at Net Asset Value	41.0	$ 29.5
Other invested assets at NAV	40.4	$ 38.4
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other Commitment	$ 15.0
Maximum [Member]
Investments at NAV [Abstract]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Liquidating Investment, Remaining Period	12 years
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Liquidating Investment, Remaining Period	12 years
Minimum [Member]
Investments at NAV [Abstract]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Liquidating Investment, Remaining Period	10 years
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share, Liquidating Investment, Remaining Period	10 years

XML

Investments Available for Sale Securities (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	$ 2,305.9	$ 2,266.1
Debt securities, available-for-sale, gross unrealized gain	19.9	84.3
Debt securities, available-for-sale, gross unrealized loss	(54.8)	(7.7)
Fixed maturity securities, fair value	2,271.0	2,342.7
Total AFS, amortized cost	2,309.1	2,276.6
Total AFS, gross unrealized gain	19.9	84.3
Total AFS, gross unrealized loss	54.8	7.7
Short-term investments at fair value (amortized cost $3.2 at March 31, 2022 and $10.5 at December 31, 2021)	3.2	10.5
Total AFS investments	2,274.2	2,353.2
Other invested assets (cost $35.9 at March 31, 2022 and $34.1 at December 31, 2021)	40.4	38.4
Other invested assets at NAV	40.4	38.4
Investment Owned, at Cost	35.9	34.1
Debt Securities, Available-for-sale, Allowance for Credit Loss	2.2	0.2	$ 0.2	$ 0.7
US Treasury Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	64.4	64.3
Debt securities, available-for-sale, gross unrealized gain	0.4	1.6
Debt securities, available-for-sale, gross unrealized loss	(1.6)	(0.2)
Fixed maturity securities, fair value	63.2	65.7
US Government Agencies Debt Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	2.2	2.2
Debt securities, available-for-sale, gross unrealized gain	0.1	0.2
Debt securities, available-for-sale, gross unrealized loss	0.0	0.0
Fixed maturity securities, fair value	2.3	2.4
US States and Political Subdivisions Debt Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	368.6	413.8
Debt securities, available-for-sale, gross unrealized gain	6.2	22.4
Debt securities, available-for-sale, gross unrealized loss	(1.9)	(0.1)
Fixed maturity securities, fair value	372.9	436.1
Corporate Debt Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	1,061.1	1,035.1
Debt securities, available-for-sale, gross unrealized gain	11.1	47.0
Debt securities, available-for-sale, gross unrealized loss	(27.1)	(1.8)
Fixed maturity securities, fair value	1,045.1	1,080.3
Residential Mortgage Backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	303.9	319.0
Debt securities, available-for-sale, gross unrealized gain	1.0	7.0
Debt securities, available-for-sale, gross unrealized loss	(15.5)	(4.2)
Fixed maturity securities, fair value	289.4	321.8
Commercial Mortgage Backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	67.8	87.9
Debt securities, available-for-sale, gross unrealized gain	0.3	4.5
Debt securities, available-for-sale, gross unrealized loss	(1.6)	(0.1)
Fixed maturity securities, fair value	66.5	92.3
Asset-backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	71.0	68.6
Debt securities, available-for-sale, gross unrealized gain	0.1	0.4
Debt securities, available-for-sale, gross unrealized loss	(3.6)	(0.5)
Fixed maturity securities, fair value	67.5	68.5
Foreign Government Debt
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	12.7	12.7
Debt securities, available-for-sale, gross unrealized gain	0.0	0.0
Debt securities, available-for-sale, gross unrealized loss	(1.1)	(0.2)
Fixed maturity securities, fair value	11.6	12.5
Collateralized Loan Obligations [Member]
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	184.4	85.5
Debt securities, available-for-sale, gross unrealized gain	0.0	0.0
Debt securities, available-for-sale, gross unrealized loss	(1.1)	(0.1)
Fixed maturity securities, fair value	183.3	85.4
Other Debt Obligations [Member]
Debt Securities, Available-for-sale [Line Items]
Debt securities, available-for-sale, amortized cost	169.8	177.0
Debt securities, available-for-sale, gross unrealized gain	0.7	1.2
Debt securities, available-for-sale, gross unrealized loss	(1.3)	(0.5)
Fixed maturity securities, fair value	169.2	177.7
Short-term Investments [Member]
Debt Securities, Available-for-sale [Line Items]
Total AFS, amortized cost	3.2	10.5
Total AFS, gross unrealized gain	0.0	0.0
Total AFS, gross unrealized loss	$ 0.0	$ 0.0

XML

Investments Equity Securities (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Schedule of Equity Securities and Other [Line Items]
Equity Securities, FV-NI, Cost	$ 206.4	$ 212.6
Equity Securities, FV-NI	296.8	338.8
Industrial and Miscellaneous [Member]
Schedule of Equity Securities and Other [Line Items]
Equity Securities, FV-NI, Cost	167.7	170.5
Equity Securities, FV-NI	248.3	283.1
Other [Member]
Schedule of Equity Securities and Other [Line Items]
Equity Securities, FV-NI, Cost	38.7	42.1
Equity Securities, FV-NI	$ 48.5	$ 55.7

XML

Investments Other Invested Assets (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Other Invest Assets [Abstract]
Other invested assets at NAV	$ 40.4	$ 38.4
Investment Owned, at Cost	35.9	34.1
Total other invested assets	$ 40.4	$ 38.4

XML

Investments, Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Amortized Cost
Due in one year or less, amortized cost	$ 87.9
Due after one year through five years, amortized cost	745.7
Due after five years through ten years, amortized cost	733.2
Due after ten years, amortized cost	112.0
Mortgage and asset-backed securities, amortized cost	627.1
Total, amortized cost	2,305.9	$ 2,266.1
Estimated Fair Value
Due in one year or less, fair value	88.6
Due after one year through five years, fair value	749.6
Due after five years through ten years, fair value	718.8
Due after ten years, fair value	107.3
Mortgage and asset-backed securities, fair value	606.7
Total, fair value	$ 2,271.0	$ 2,342.7

XML

Investments, Continuous Loss Position (Details) $ in Millions	Mar. 31, 2022 USD ($) shares shares	Dec. 31, 2021 USD ($) shares
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ (1,103.4)	$ (433.1)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	158.8	15.3
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(42.9)	(7.2)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	$ (11.9)	$ (0.5)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract]
Debt Securities, number of issues in loss position, less than 12 months | shares	780	362
Debt Securities, number of issues in loss position, 12 months or greater	137	34
Debt Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ (1,103.4)	$ (433.1)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	158.8	15.3
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(42.9)	(7.2)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	$ (11.9)	$ (0.5)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract]
Debt Securities, number of issues in loss position, less than 12 months | shares	780	362
Debt Securities, number of issues in loss position, 12 months or greater | shares	137	34
US Treasury Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ (36.8)	$ (12.8)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	$ (1.5)	$ (0.2)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract]
Debt Securities, number of issues in loss position, less than 12 months | shares	11	4
US States and Political Subdivisions Debt Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ (51.3)	$ (7.7)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	$ (1.9)	$ (0.1)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract]
Debt Securities, number of issues in loss position, less than 12 months | shares	21	4
Corporate Debt Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ (495.7)	$ (113.0)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	14.8	0.0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(25.5)	(1.8)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	$ (1.7)	$ 0.0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract]
Debt Securities, number of issues in loss position, less than 12 months | shares	278	87
Debt Securities, number of issues in loss position, 12 months or greater	17	0
Residential Mortgage Backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ (166.6)	$ (146.3)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	78.0	4.9
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(7.2)	(3.9)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	$ (8.4)	$ (0.3)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract]
Debt Securities, number of issues in loss position, less than 12 months | shares	143	65
Debt Securities, number of issues in loss position, 12 months or greater	25	3
Commercial Mortgage Backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ (47.8)	$ 0.0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	2.3	2.4
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(1.3)	0.0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	$ (0.2)	$ (0.1)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract]
Debt Securities, number of issues in loss position, less than 12 months | shares	20	0
Debt Securities, number of issues in loss position, 12 months or greater	2	2
Asset-backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ (47.0)	$ (50.1)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	5.9	0.0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(3.2)	(0.5)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	$ (0.3)	$ 0.0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract]
Debt Securities, number of issues in loss position, less than 12 months | shares	20	14
Debt Securities, number of issues in loss position, 12 months or greater	2	0
Collateralized Loan Obligations [Member]
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ (148.9)	$ (24.4)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	22.5	0.0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(0.9)	(0.1)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	$ (0.3)	$ 0.0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract]
Debt Securities, number of issues in loss position, less than 12 months | shares	28	10
Debt Securities, number of issues in loss position, 12 months or greater | shares	4	0
Other Debt Obligations [Member]
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ (105.0)	$ (66.3)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	27.7	8.0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	(1.0)	(0.4)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	$ (0.4)	$ (0.1)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract]
Debt Securities, number of issues in loss position, less than 12 months | shares	258	176
Debt Securities, number of issues in loss position, 12 months or greater | shares	85	29
Foreign Government Debt
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months	$ (4.3)	$ (12.5)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	$ (0.4)	$ (0.2)
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract]
Debt Securities, number of issues in loss position, less than 12 months | shares	1	2
Sovereign Debt Securities
Debt Securities, Available-for-sale [Line Items]
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer	$ 7.6	$ 0.0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	$ (0.6)	$ 0.0
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Number of Positions [Abstract]
Debt Securities, number of issues in loss position, 12 months or greater | shares	2	0

XML

Investments Investments, Net Realized Gains and Losses (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Equity securities:
Equity Securities, FV-NI, Realized Gain	$ 20.6	$ 0.9
Equity Securities, FV-NI, Realized Loss	2.0	0.3
AFS, change in unrealized gains (losses)
AFS, change unrealized gains (losses) on fixed maturity and equity securities reflected in AOCI	(111.6)	(45.7)
AFS, net realized gains (losses)
Net realized and unrealized (losses) gains on investments	(17.3)	10.9
Total gross realized gains	22.5	1.6
Investments, Gross Realized Losses	(2.2)	(0.7)
Total change in net unrealized gains (losses)	(147.2)	(36.2)
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Equity Securities, FV-NI, Unrealized Gain (Loss)	(35.7)	8.8
Proceeds from sale of fixed maturity securities	92.0	74.0
Debt Securities, Available-for-sale, Allowance for Credit Loss, Period Increase (Decrease)	(2.0)	0.5
Debt Securities [Member]
AFS, change in unrealized gains (losses)
AFS, change unrealized gains (losses) on fixed maturity and equity securities reflected in AOCI	(111.6)	(45.6)
AFS, net realized gains (losses)
Net realized and unrealized (losses) gains on investments	(0.3)	0.8
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Debt Securities, Available-for-sale, Allowance for Credit Loss, Period Increase (Decrease)	(2.0)	0.5
Debt Securities, Available-for-sale, Realized Loss	0.2	0.4
Debt Securities, Available-for-sale, Realized Gain	1.9	0.7
Equity Securities [Member]
AFS, change in unrealized gains (losses)
AFS, change unrealized gains (losses) on fixed maturity and equity securities reflected in AOCI	0.0	0.0
AFS, net realized gains (losses)
Net realized and unrealized (losses) gains on investments	(17.1)	9.4
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Debt Securities, Available-for-sale, Allowance for Credit Loss, Period Increase (Decrease)	0.0	0.0
Other Investments [Member]
AFS, change in unrealized gains (losses)
AFS, change unrealized gains (losses) on fixed maturity and equity securities reflected in AOCI	0.0	0.0
AFS, net realized gains (losses)
Net realized and unrealized (losses) gains on investments	0.1	0.7
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Trading Securities, Realized Gain		0.0
Trading Securities, Realized Loss		0.0
Trading Securities, Change in Unrealized Holding Gain (Loss)		0.7
Debt Securities, Available-for-sale, Allowance for Credit Loss, Period Increase (Decrease)	0.0	0.0
Gain on Sale of Investments	0.0
Loss on Sale of Investments	0.0
Unrealized Gain (Loss) on Investments	$ 0.1
Short-term investments at fair value (amortized cost $3.2 at March 31, 2022 and $10.5 at December 31, 2021)
AFS, change in unrealized gains (losses)
AFS, change unrealized gains (losses) on fixed maturity and equity securities reflected in AOCI		(0.1)
AFS, net realized gains (losses)
Net realized and unrealized (losses) gains on investments		0.0
Debt Securities, Available-for-sale, Unrealized Gain (Loss) [Abstract]
Trading Securities, Realized Gain		0.0
Trading Securities, Realized Loss		0.0
Trading Securities, Change in Unrealized Holding Gain (Loss)		(0.1)
Debt Securities, Available-for-sale, Allowance for Credit Loss, Period Increase (Decrease)		$ 0.0

XML

Net Investment Income (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 20.7	$ 19.5
Investment expenses	1.6	1.1
Net investment income	19.1	18.4
Debt Securities [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	18.7	18.2
Equity Securities [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	1.6	0.9
Other Investments [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	0.4	0.2
Short-term Investments [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	$ 0.0	$ 0.2

XML

Investments Investments, Held in Trust or on Deposit (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Line of Credit Facility [Line Items]
Other invested assets (cost $35.9 at March 31, 2022 and $34.1 at December 31, 2021)	$ 40.4	$ 38.4
Deposit Assets [Abstract]
Investments	2,617.0	2,736.0
Assets Held-in-trust [Abstract]
Funds Held under Reinsurance Agreements, Asset	3.0	3.1
Federal Home Loan Bank [Member]
Deposit Assets [Abstract]
Line of Credit Facility, Maximum Borrowing Capacity	70.0	70.0
Required by various state laws and regulations to hold securities or letters of credit in depository account [Member]
Deposit Assets [Abstract]
Investments	$ 819.9	$ 861.4

XML

Current Expected Credit Losses (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Current Expected Credit Losses [Abstract]
Premium Receivable, Allowance for Credit Loss	$ 10.0	$ 12.2	$ 10.3	$ 10.8
Premium Receivable, Allowance for Credit Loss, Period Increase (Decrease)	3.2	3.3
Premium Receivable, Allowance for Credit Loss, Writeoff	0.9	0.1
Premium Receivable, Allowance for Credit Loss, Recovery	2.6	1.8
Debt Securities, Available-for-sale, Allowance for Credit Loss	2.2	0.2	0.2	0.7
Reinsurance recoverables on unpaid losses, allowance	0.6	0.4	0.6	$ 0.4
Reinsurance Recoverable, Allowance for Credit Loss, Period Increase (Decrease)	0.0	0.0
Accrued investment income	17.9		$ 14.5
Debt Securities, Available-for-sale, Allowance for Credit Loss, Securities Sold	0.0	(0.2)
Debt Securities, Available-for-sale, Allowance for Credit Loss, Recovery	(0.2)	(0.3)
Debt Securities, Available-for-sale, Allowance for Credit Loss, Writeoff	$ 2.2	$ 0.0

XML

Property and Equipment Property and Equipment (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Property and Equipment [Line Items]
Property and equipment, gross	$ 56.0		$ 55.9
Accumulated depreciation, depletion and amortization, property and equipment	(42.0)		(41.2)
Property and equipment, net	14.0		14.7
Utilities operating expense, depreciation and amortization	1.5		7.4
Payments to develop software	0.5		2.3
Cloud computing arrangements	39.4		43.9
Amortization of cloud computing arrangements	4.0	$ 3.1	14.2
Furniture and equipment
Property and Equipment [Line Items]
Property and equipment, gross	3.4		3.3
Leasehold improvements
Property and Equipment [Line Items]
Property and equipment, gross	5.0		5.0
Computer and software
Property and Equipment [Line Items]
Property and equipment, gross	46.8		46.8
Automobiles
Property and Equipment [Line Items]
Property and equipment, gross	$ 0.8		$ 0.8

XML

Property and Equipment Leases (Details)	Mar. 31, 2022
Minimum [Member]
Lessee, Lease, Description [Line Items]
Lessee, operating lease, remaining lease term	1 year
Lessee, Finance Lease, Term of Contract	1 year
Maximum [Member]
Lessee, Lease, Description [Line Items]
Lessee, operating lease, remaining lease term	7 years
Lessee, operating lease, renewal term	9 years

XML

Property and Equipment Leases, Components of Lease Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Components of Lease Expense [Abstract]
Operating lease expense	$ 0.9	$ 1.1
Finance lease expense	0.0	0.0
Total lease expense	$ 0.9	$ 1.1

XML

Property and Equipment Leases, Maturities of Lease Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Lessee, operating lease liabilities due
Operating lease liabilities due next twelve months	$ 3.3
Operating lease liabilities due year two	3.3
Operating lease liabilities due year three	3.2
Operating lease liabilities due year four	3.1
Operating lease liabilities due year five	2.8
Operating lease liabilities due after year five	1.8
Operating lease liabilities due	17.5
Less: inputed interest, Operating lease liability	(1.8)
Operating lease liability	$ 15.7	$ 16.6
Operating lease, weighted average remaining lease term	5 years 1 month 6 days
Operating lease, weighted average discount rate, percent	2.20%
Lessee, finance lease liabilities due
Finance lease liabilities due next twelve months	$ 0.1
Finance lease liabilities due year two	0.2
Finance lease liabilities due year three	0.2
Finance lease liabilities due year four	0.1
Finance lease liabilities due year five	0.0
Finance lease liabilities due after year five	0.0
Finance lease liabilities due	0.6
Less: inputed interest, finance lease	0.0
Finance lease, liability	$ 0.6	$ 0.5
Finance lease, weighted average remaining lease term	3 years 6 months
Finance lease, weighted average discount rate, percent	7.70%

XML

Property and Equipment Leases, Supplement Balance Sheet Information (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Lessee, Lease, Description [Line Items]
Operating lease right-of-use assets	$ 13.5	$ 14.2
Operating lease liability	15.7	16.6
Property and equipment, gross	56.0	55.9
Accumulated depreciation, depletion and amortization, property and equipment	(42.0)	(41.2)
Property and equipment, net	14.0	14.7
Other liabilities	65.7	57.6
Property, Plant, and Equipment and Finance Lease Right-of-Use Asset, before Accumulated Depreciation and Amortization	0.8	0.8
Finance Lease, Right-of-Use Asset, Accumulated Amortization	0.3	0.3
Finance Lease, Right-of-Use Asset, after Accumulated Amortization	0.5	0.5
Finance lease, liability	$ 0.6	$ 0.5

XML

Property and Equipment Leases, Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Leases, Supplement Balance Sheet Information [Abstract]
Operating cash flows from operating leases	$ 0.9	$ 1.1
Financing cash flows from finance leases	$ 0.0	$ 0.0

XML

Income Taxes (Details)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract]
Effective tax rate	8.00%	16.30%

XML

Liability for Unpaid Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Unpaid losses and LAE at beginning of period	$ 1,981.2	$ 2,069.4
Less reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE	476.9	497.0
Net unpaid losses and LAE at beginning of period	1,504.3	1,572.4
Losses and LAE, net of reinsurance, incurred during the period related to:
Current period	96.3	85.6
Prior periods	0.0	(13.9)
Total net losses and LAE incurred during the period	96.3	71.7
Deduct payments for losses and LAE, net of reinsurance, related to:
Current period	4.6	4.7
Prior periods	85.8	97.6
Total net paid losses and LAE during the period	90.4	102.3
Ending unpaid losses and LAE, net of reinsurance	1,510.2	1,541.8
Reinsurance recoverable, excluding CECL allowance, on unpaid losses and LAE	471.7	492.3
Unpaid losses and LAE at end of period	1,981.9	2,034.1
Impact of the LPT Agreement	$ 2.1	2.1
Involuntary Assigned Risk Business [Member]
Losses and LAE, net of reinsurance, incurred during the period related to:
Prior periods		$ (0.5)

XML

LPT Agreement (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Reinsurance Agreement [Line Items]
Liabilities for the incurred but unpaid losses and LAE related to claims prior to July 1, 1995	$ 1,500.0
Ceded premiums written	775.0
Amortization of deferred gain	2.1	$ 2.1
Net income	(2.3)	23.1
Deferred reinsurance gain—LPT Agreement	112.3		$ 114.4
Estimated remaining liabilities - LPT Agreement	323.6		328.7
Paid losses and LAE claims related to LPT	843.9		$ 838.8
Impact of the LPT Agreement	2.1	$ 2.1
Indemnification Agreement [Member]
Reinsurance Agreement [Line Items]
Coverage provided under LPT Agreement	$ 2,000.0

XML

Notes Payable Letters of Credit (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended	12 Months Ended
	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2021	Dec. 31, 2020	Dec. 31, 2021
Letters of Credit Facilities [Line Items]
Letters of credit, unused capacity, commitment fee percentage	15.00%
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Amount of Advances	$ 60,000					$ 0
Federal Home Loan Bank, Advances, General Debt Obligations, Maximum Amount Available	10,000
Line of Credit Facility, Current Borrowing Capacity	$ 75,000
Line of Credit Facility, Commitment Fee Percentage	0.30%
Repayments on line of credit advances	$ 10,000		$ 12,000
Interest and financing expenses	100		100
Line of Credit Facility, Commitment Fee Amount	25
Debt Issuance Costs, Gross	$ 700
Debt Instrument, Covenant Description	a minimum consolidated net worth of no less than 70% of the Company’s stockholders’ equity as of September 30, 2020, plus 50% of the Company’s aggregate net income thereafter
Line of Credit Facility, Covenant Terms	a debt to total capitalization ratio of no more than 35%, in each case as determined in accordance with the Credit Agreement
Proceeds from FHLBank Advance, Investing Activities				$ 35,000
Repayments of FHLBank Advance, Investing Activities	$ 0	$ 15,000	5,000		$ 15,000
Line of Credit Facility, Fair Value of Amount Outstanding	0
Proceeds from Lines of Credit	10,000		$ 12,000
Line of Credit Facility, Periodic Payment, Interest	100
Interest Expense, Loans from Other Federal Home Loan Banks	$ 100
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate	0.33%
Maximum [Member]
Letters of Credit Facilities [Line Items]
Line of Credit Facility, Current Borrowing Capacity	$ 125,000
Line of Credit Facility, Interest Rate at Period End	1.25%
Debt Instrument, Interest Rate, Stated Percentage	2.25%
Line of Credit Facility, Commitment Fee Percentage	0.50%
Line of Credit Facility, Commitment Fee Amount	$ 225
Minimum [Member]
Letters of Credit Facilities [Line Items]
Line of Credit Facility, Interest Rate at Period End	0.25%
Debt Instrument, Interest Rate, Stated Percentage	1.25%
Line of Credit Facility, Commitment Fee Percentage	0.20%
Federal Home Loan Bank [Member]
Letters of Credit Facilities [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 70,000					70,000
Letters of credit collateral amount	237,000					$ 385,600
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Amount of Advances	0
Federal Home Loan Bank [Member] | EAC
Letters of Credit Facilities [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	25,000
Federal Home Loan Bank [Member] | ECIC
Letters of Credit Facilities [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	35,000
Federal Home Loan Bank [Member] | EPIC
Letters of Credit Facilities [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 10,000

XML

Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Accumulated Other Comprehensive Income [Abstract]
Net unrealized (losses) gains on investments, before taxes	$ (34.9)	$ 76.7
Deferred tax benefit (expense) on net unrealized gains and losses	7.3	(16.1)
Total accumulated other comprehensive (loss) income	$ (27.6)	$ 60.6

XML

Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		12 Months Ended
		Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-options exercised		41,665	41,851	48,051
Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of outstanding options or share units		23,500
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of outstanding options or share units		241,204
Restricted Stock Units (RSUs) [Member] | Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation award, shares issued	[1]	63,120
Share-based compensation options, exercise price on grant date	[1]	$ 40.54
Fair value of awards awarded on grant date		$ 2.6
Vesting rights for RSUs awarded		vest 25% on March 15, 2023, and each of the subsequent three anniversaries of that date
Restricted Stock Units (RSUs) [Member] | Management
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation award, shares issued	[2]	23,296
Share-based compensation options, exercise price on grant date	[2]	$ 38.16
Fair value of awards awarded on grant date	[2]	$ 0.9
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of outstanding options or share units		184,393
Performance Shares [Member] | Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation award, shares issued	[1]	73,120
Fair value of awards awarded on grant date	[1]	$ 3.0
Performance share awards performance period		two years
Share-based compensation arrangement by share-based payment award, award vesting period		1 year
Performance share awards, minimum payout		0.00%
Performance share awards, maximum payout		250.00%

[1] The PSUs awarded in March 2022 were awarded to certain employees of the Company and have a performance period of two years followed by an additional one year vesting period. The PSU awards are subject to certain performance goals with payouts that range from 0% to 250% of the target awards. The value shown in the table represents the aggregate number of PSUs awarded at the target level.

[2] The RSUs awarded in March 2022 were awarded to certain employees of the Company and vest 25% on March 15, 2023, and each of the subsequent three anniversaries of that date. The RSUs are subject to accelerated vesting in certain circumstances, including but not limited to: death, disability, retirement, or in connection with a change of control of the Company.

XML

Earnings Per Share (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Earnings Per Share, Basic and Diluted, by Common Class [Line Items]
Net income available to stockholders - basic and diluted	$ (2.3)	$ 23.1
Weighted average number of shares outstanding - basic	27,802,972	28,516,731
Effect of dilutive securities:
Dilutive securities	274,636	451,608
Weighted average number of shares outstanding - diluted	28,077,608	28,968,339
Performance Shares [Member]
Effect of dilutive securities:
Dilutive securities	204,029	344,615
Stock Option [Member]
Effect of dilutive securities:
Dilutive securities	22,877	34,530
Restricted Stock Units (RSUs) [Member]
Effect of dilutive securities:
Dilutive securities	47,730	72,463

XML

Segment Reporting Segment Net Income Before Taxes (Details) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)
Segment Reporting Information [Line Items]
Number of Reportable Segments	2
Premiums Written, Gross	$ 172.4	$ 148.3
Premiums Written, Net	170.4	146.9
Net premiums earned	150.2	133.9
Net investment income	19.1	18.4
Net realized and unrealized (losses) gains on investments	(17.3)	10.9
Other income	0.0	0.4
Revenues	152.0	163.6
Losses and loss adjustment expenses	94.2	69.6
Commission expense	20.9	16.8
Underwriting and general and administrative expenses	39.3	46.6
Interest and financing expenses	0.1	0.1
Other Expenses	0.0	2.9
Operating Expenses	154.5	136.0
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest	(2.5)	27.6
Employers Segment [Member]
Segment Reporting Information [Line Items]
Premiums Written, Gross	171.2	148.0
Premiums Written, Net	169.2	146.6
Net premiums earned	149.6	133.9
Net investment income	17.6	17.6
Net realized and unrealized (losses) gains on investments	(15.6)	10.8
Other income		0.4
Revenues	151.6	162.7
Losses and loss adjustment expenses	95.9	71.7
Commission expense	20.9	16.8
Underwriting and general and administrative expenses	32.8	37.3
Interest and financing expenses	0.0	0.0
Other Expenses		2.9
Operating Expenses	149.6	128.7
Net (loss) income before income taxes	2.0	34.0
Cerity Segment [Member]
Segment Reporting Information [Line Items]
Premiums Written, Gross	1.2	0.3
Premiums Written, Net	1.2	0.3
Net premiums earned	0.6	0.0
Net investment income	0.7	0.7
Net realized and unrealized (losses) gains on investments	(0.4)	0.1
Other income		0.0
Revenues	0.9	0.8
Losses and loss adjustment expenses	0.4	0.0
Commission expense	0.0	0.0
Underwriting and general and administrative expenses	3.2	3.7
Interest and financing expenses	0.0	0.0
Other Expenses		0.0
Operating Expenses	3.6	3.7
Net (loss) income before income taxes	(2.7)	(2.9)
Corporate Segment
Segment Reporting Information [Line Items]
Premiums Written, Gross	0.0	0.0
Premiums Written, Net	0.0	0.0
Net premiums earned	0.0	0.0
Net investment income	0.8	0.1
Net realized and unrealized (losses) gains on investments	(1.3)	0.0
Other income		0.0
Revenues	(0.5)	0.1
Losses and loss adjustment expenses	(2.1)	(2.1)
Commission expense	0.0	0.0
Underwriting and general and administrative expenses	3.3	5.6
Interest and financing expenses	0.1	0.1
Other Expenses		0.0
Operating Expenses	1.3	3.6
Net (loss) income before income taxes	$ (1.8)	$ (3.5)

XML

Segment Reporting Geographic Information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Revenue, Major Customer [Line Items]
Segment Reporting, Disclosure of Major Customers	10
CALIFORNIA
Revenue, Major Customer [Line Items]
Premiums In Force	$ 260.4	$ 258.4	$ 251.4	$ 262.0
Policies In force	41,588	40,704	39,264	39,610
FLORIDA
Revenue, Major Customer [Line Items]
Premiums In Force	$ 41.1	$ 41.1	$ 38.6	$ 37.9
Policies In force	8,275	7,989	7,303	6,898
NEW YORK
Revenue, Major Customer [Line Items]
Premiums In Force	$ 25.0	$ 24.5	$ 25.6	$ 26.7
Policies In force	7,382	7,307	6,724	6,657
AllOtherStates [Member]
Revenue, Major Customer [Line Items]
Premiums In Force	$ 252.1	$ 247.4	$ 237.7	$ 251.3
Policies In force	57,216	55,350	51,481	50,341
UNITED STATES
Revenue, Major Customer [Line Items]
Premiums In Force	$ 578.6	$ 571.4	$ 553.3	$ 577.9
Policies In force	114,461	111,350	104,772	103,506
Final audit policies in-force	0	0	0	0
Final audit premium	$ 15.6	$ 13.1	$ 6.5	$ (5.8)
Total in-force policies, includingfinal audit	114,461	111,350	104,772	103,506
Total in-force, including final audit premium	$ 594.2	$ 584.5	$ 559.8	$ 572.1