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 Employers Direct Announces First Quarter 2006 Results AGOURA HILLS, CA – July 5, 2006 – Employers Direct Insurance Company, California’s only investor-owned direct writer of workers’ compensation insurance, posted a 14.9% rise in revenues for the first quarter of 2006 in spite of advisory pure premium rate decreases totaling 33.3% in July 2005 and January 2006. “With the just announced additional 16.4% advisory rate decrease, we have now come through two-year period in which California workers’ comp rates were in a near free-fall,” stated James E. Little, Chairman/President & CEO of Employers Direct. “We expect that rates will now flatten out as the savings from workers’ comp reform have worked their way through the system.” Little noted that the first quarter results were encouraging because Employers Direct sustained both its net income and growth of in-force premiums during the period. He attributed the results to stronger-than-planned new policy sales and a continued high policy persistency ratio SUSTAINABLE PRICING AND SERVICE ADVANTAGE “As a result of our low-cost, direct-to-consumer approach, our expense ratio is about 10 points lower than our principal competitors,” Little explained, “and that gives Employers Direct a significant and sustainable competitive advantage that California business owners have come to appreciate in our lower pricing and better and more helpful services. With premiums now cut in half, the compensation impact on independent agents and brokers is significant. Many of them have announced cut backs on important policyholder services, such as, loss control and claims consulting. But we see this environment as a unique opportunity to partner more closely with our policyholders and are strengthening every level of customer-focused services rather than cutting back.” Net income for Employers Direct was $4.4 million for the first three months of 2006, approximately the same as the same period for 2005, when rates were substantially higher. Other highlights from Employers Direct’s first quarter financial statements:
About EMPLOYERS DIRECT INSURANCE COMPANY Employers Direct Insurance Company is California's only investor-owned direct writer of workers' compensation insurance - with no independent agent or broker affiliation. Founded in 2002, Employers Direct has been widely accepted by business owners throughout California as a result of providing highly competitive rates, claims services designed to fight fraud and abuse, and loss prevention services that assist employers to create safe work environments. As a newer company, Employers Direct is unburdened by legacy systems and takes advantage of the latest technology to provide its customers with 24/7 access to all policy and claims information via a secure Internet portal. Employers Direct is proud that a growing number of California’s best-run privately-held companies count themselves as policyholders. Niche industries include hotels, restaurants, golf and country clubs, new car dealers, food processors, manufacturing companies, specialty supermarket chains, and retailers. At the end of 2005, Employers Direct Insurance Company had more than $150 million in written workers' compensation premiums. Visit Employers Direct online at www.employersdirect.com Contact: Employers Direct Insurance Company Debbie Laskey 818-575-2709 (Day) dlaskey@employersdirect.com |
