What Happened?

Shares of workers' compensation insurer Employers Holdings (NYSE: EIG) fell 8.6% in the afternoon session after the company reported third-quarter results that widely missed Wall Street's profit expectations. The company posted an adjusted loss of $0.41 per share, a significant shortfall compared to analyst forecasts for a $0.60 profit. While revenue of $239.3 million grew 6.8% year-on-year and beat estimates, investors focused on the deteriorating profitability. A key reason for the loss was the company's combined ratio, a measure of an insurer's underwriting profitability where a figure over 100% indicates a loss. Employers Holdings' combined ratio came in at 130%, significantly worse than the same quarter last year and well above analysts' estimates of 105%, signaling that claim costs and expenses substantially outpaced the premiums earned.

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What Is The Market Telling Us

Employers Holdings’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Employers Holdings is down 25.7% since the beginning of the year, and at $37.49 per share, it is trading 30.4% below its 52-week high of $53.89 from November 2024. Investors who bought $1,000 worth of Employers Holdings’s shares 5 years ago would now be looking at an investment worth $1,148.

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