As an underwriter of workers comp insurance for small employers, the pandemic has been particularly tough on Employers Holdings (NYSE:EIG). Lower employment levels sent demand plunging in 2020 and the situation hasn’t been helped by increased competition driving a multiyear decline in rates. Even with improved claims frequency, Employers is earning a lot less now than they used to before the pandemic.
I do believe Employers has seen the worst, but I don’t necessarily expect a V-shaped recovery given competition in the market and challenges to hiring in Employers’ core addressed markets. Longer term, though, I do think the company can get back to double-digit ROE and mid-single-digit long-term core growth, supporting a fair value in the mid-$40’s that is relatively attractive compared to today’s price.
Click here to continue:
Employers Holdings Leveraged To Improving Employment And Rates
No comments:
Post a Comment