Cuộc họp công bố kết quả kinh doanh quý 3 năm 2026 của AMERISAFE (AMSF): Tăng trưởng phí bảo hiểm, áp lực giá

Kết quả kinh doanh quý 3/2026 của AMERISAFE cho thấy phí bảo hiểm đã hưởng và thu nhập từ đầu tư tăng lên, nhưng lợi nhuận ròng giảm do chi phí gia tăng và cạnh tranh gay gắt trên thị trường bảo hiểm bồi thường cho người lao động.

Điểm tin chính

• Lợi nhuận ròng đạt 7,2 triệu USD, tương đương 0,39 USD trên mỗi cổ phiếu pha loãng, so với 13,8 triệu USD, hay 0,72 USD trên mỗi cổ phiếu pha loãng trong quý 3/2025. Lợi nhuận ròng hoạt động giảm xuống 7,4 triệu USD từ mức 10,6 triệu USD.
• Phí bảo hiểm thuần đã hưởng tăng 3% so với cùng kỳ năm ngoái lên 73,3 triệu USD, nhờ tăng trưởng doanh số phí bảo hiểm gần đây, số lượng hợp đồng gia tăng và tỷ lệ duy trì hợp đồng cao. Số lượng hợp đồng đang có hiệu lực tăng 4%.
• Tổng phí bảo hiểm gốc giảm 4,5% xuống 76,7 triệu USD. Các khoản kiểm toán quỹ lương và điều chỉnh liên quan đã làm giảm 1,6 triệu USD phí bảo hiểm trong quý, so với mức tăng 2,5 triệu USD của cùng kỳ năm trước.
• Tỷ lệ tổn thất năm sự cố hiện tại duy trì ở mức 72%. AMERISAFE đã ghi nhận 6,9 triệu USD phát triển dự phòng thuận lợi, chủ yếu từ các năm sự cố 2023 trở về trước.
• Ban quản lý mô tả sự cạnh tranh là rất gay gắt và cho biết một số đối thủ đang ưu tiên tăng trưởng phí bảo hiểm hơn là lợi nhuận khai thác bảo hiểm. Công ty tiếp tục tập trung vào việc lựa chọn rủi ro và kỷ luật định giá.
• Thu nhập thuần từ đầu tư tăng 0,6 triệu USD lên 6,6 triệu USD, trong khi tỷ suất lợi nhuận sổ sách tương đương thuế tăng 9 điểm cơ bản lên 4%.

Dữ liệu tài chính cốt lõi

Kết quả hoạt động kinh doanh và vận hành

Phí bảo hiểm tự nguyện đối với các hợp đồng được khai thác trong quý tăng 0,8%. AMERISAFE đã tái tục 92,3% số hợp đồng được đề nghị gia hạn, trong khi số lượng hợp đồng đang có hiệu lực tăng 4% so với cùng kỳ năm ngoái. Quy mô tài khoản trung bình tương đối đi ngang.

Ban quản lý cho biết tăng trưởng phí bảo hiểm mới đã chậm lại do cạnh tranh gia tăng tại một số bang được chọn. Công ty ghi nhận mức định giá, cấu trúc hoa hồng và chia cổ tức cho chủ hợp đồng bảo hiểm mang tính cạnh tranh gay gắt hơn. Ban quản lý mô tả một số hành vi của đối thủ cạnh tranh là "phi lý", nhưng khẳng định AMERISAFE sẽ không theo đuổi các hợp đồng không mang lại lợi nhuận khi khai thác.

Tần suất và mức độ nghiêm trọng của yêu cầu bồi thường trong năm sự cố hiện tại tương đương với năm sự cố trước đó. Tuy nhiên, số lượng yêu cầu bồi thường báo cáo tuyệt đối đã tăng lên và mức tăng trưởng yêu cầu bồi thường vượt quá mức tăng trưởng phí bảo hiểm. Trong 9 tháng đầu năm 2026, AMERISAFE ghi nhận 18 yêu cầu bồi thường vượt quá 1 triệu USD, so với 17 yêu cầu cùng kỳ năm 2025 và 25 yêu cầu cho cả năm 2025.

Phí bảo hiểm từ kiểm toán quỹ lương vẫn ở mức dương, có nghĩa là quỹ lương được bảo hiểm cao hơn ước tính ban đầu, nhưng thấp hơn đáng kể so với quý 3/2025. Ban quản lý dẫn lý do là tăng trưởng tiền lương chậm lại, một số vụ kiểm toán âm lớn bất thường và phí bảo hiểm hủy bỏ hợp đồng tăng mạnh. Không có sự thay đổi đáng kể nào được ghi nhận trong mô hình kiểm toán ở bất kỳ ngành cụ thể nào.

Vào cuối quý, AMERISAFE nắm giữ khoảng 753 triệu USD tiền đầu tư, tiền mặt và các khoản tương đương tiền. Danh mục đầu tư đạt xếp hạng tín dụng trung bình AA- và có thời lượng (duration) là 4,7 năm. Tỷ suất lợi nhuận đầu tư mới vượt tỷ suất lợi nhuận của các khoản đầu tư đáo hạn trong danh mục khoảng 146 điểm cơ bản.

Danh mục đầu tư bao gồm 58% trái phiếu chính quyền địa phương, 25% trái phiếu doanh nghiệp, 3% trái phiếu Kho bạc Mỹ và cơ quan chính phủ, 9% chứng khoán vốn, và 5% tiền mặt và các khoản tương đương tiền. Khoảng 41% được phân loại là giữ đến ngày đáo hạn, với lỗ thuần chưa thực hiện là 23,8 triệu USD không được phản ánh trong giá trị sổ sách đã báo cáo.

Triển vọng của ban quản lý

Ban quản lý vẫn duy trì kỳ vọng tăng trưởng ở mức giữa một chữ số cho năm 2026, bất chấp sự sụt giảm tăng trưởng phí bảo hiểm tự nguyện trong quý 3.

Đối với năm phí bảo hiểm 2027, công ty dự kiến chi phí tổn thất trung bình của bảo hiểm bồi thường cho người lao động sẽ giảm khoảng 5% đến 6%. Ban quản lý cho biết tốc độ giảm chi phí tổn thất đã ổn định chứ không chậm lại như dự kiến trước đó.

AMERISAFE cho biết công ty sẽ tiếp tục ưu tiên lợi nhuận khai thác bảo hiểm, hiệu quả vận hành và quản lý vốn thận trọng thay vì chạy theo các đối thủ cạnh tranh đang theo đuổi tăng trưởng phí bảo hiểm với hiệu quả kinh tế kém hấp dẫn hơn.

Rủi ro và các lĩnh vực cần theo dõi

• Định giá cạnh tranh: Ban quản lý đã báo cáo sự gia tăng rõ rệt về mức định giá, hoa hồng và cấu trúc cổ tức cạnh tranh gay gắt trong quý 3.
• Chi phí tổn thất giảm: Việc chi phí tổn thất tiếp tục giảm ở mức giữa một chữ số có thể gây áp lực lên tăng trưởng phí bảo hiểm và mẫu số tần suất.
• Xu hướng yêu cầu bồi thường: Số lượng yêu cầu bồi thường tuyệt đối tăng lên, mặc dù sự tăng trưởng hợp đồng bảo hiểm đã đóng góp vào mức tăng này.
• Lạm phát y tế: Nhập viện, chi phí bệnh viện và chăm sóc sức khỏe tại nhà được xác định là những lĩnh vực chịu áp lực lớn nhất.
• Tỷ lệ chi phí: Tỷ lệ này tăng lên 32,5% do mẫu số phí bảo hiểm đã hưởng nhỏ hơn, các khoản đánh giá liên quan đến bảo hiểm, chi phí thù lao và hoa hồng cao hơn. Delaware chiếm khoản đánh giá cấp bang lớn nhất.
• Tăng trưởng tiền lương và biên lợi nhuận của khách hàng: Ban quản lý ghi nhận tăng trưởng tiền lương chậm hơn ở các người sử dụng lao động được bảo hiểm và dẫn chứng áp lực biên lợi nhuận từ các yếu tố bao gồm giá dầu, dầu diesel và xăng.

Tóm tắt phần Hỏi & Đáp với chuyên gia phân tích

Ban quản lý giải thích rằng số lượng yêu cầu bồi thường cao hơn không chỉ do phí bảo hiểm thấp hơn. Số lượng bồi thường tuyệt đối tăng, nhưng AMERISAFE cũng có thêm 4% hợp đồng có hiệu lực. Tần suất và mức độ nghiêm trọng vẫn tương đương với năm sự cố trước.

Về vấn đề định giá, ban quản lý cho biết hầu hết các hồ sơ trình chi phí tổn thất tại các bang tiếp tục cho thấy xu hướng giảm. Bắc Carolina giảm 10,8%, trong khi Oregon, California và Nevada ghi nhận mức tăng; sự thay đổi tại Nevada được mô tả là mang tính hành chính.

Liên quan đến chi phí y tế, AMERISAFE xác định việc nhập viện và chi phí bệnh viện là nguồn áp lực lớn nhất, cùng với chi phí chăm sóc sức khỏe tại nhà liên quan đến rủi ro chấn thương nặng của công ty.

Ban quản lý cũng thảo luận về lý do tại sao các công ty bảo hiểm trọn gói có thể chấp nhận kinh doanh bảo hiểm bồi thường cho người lao động ở mức hòa vốn khai thác. Công ty lưu ý rằng bảo hiểm bồi thường cho người lao động là mảng nghiệp vụ có thời gian bồi thường kéo dài và lãi suất cao hơn có thể làm cho dòng tiền liên quan trở nên có giá trị hơn. AMERISAFE nhắc lại rằng họ sẽ không đi theo các đối thủ cạnh tranh chỉ để giành lấy phí bảo hiểm.

Toàn văn biên bản cuộc họp báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good day, and welcome to the AMERISAFE Third Quarter 2026 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Kathryn Shirley, Chief Administrative Officer. Please go ahead.

Kathryn Shirley

Thank you, operator, and good morning, everyone. Welcome to the AMERISAFE 2026 Third Quarter Investor Call. If you have not received the earnings release, it is available on our website at amerisafe.com. This call is being recorded. A replay of today's call will be available. Details on how to access the replay are in the earnings release.

During this call, we will be making forward-looking statements intended to fall within the safe harbor provided under the securities laws. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Actual results may differ materially from the results expressed or implied in these statements if the underlying assumptions prove to be incorrect or as the result of risks, uncertainties and other factors, including factors discussed in the earnings release, in the comments made during today's call and in the Risk Factors section of our Form 10-K, Form 10-Q and other reports and filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statements.

I will now turn the call over to Janelle Frost, AMERISAFE's President and CEO.

G. Frost

Thank you, Kathryn, and good morning, everyone. Joining me today are Guillermo Ramos, our Chief Financial Officer; and Vincent Gagliano, our Chief Risk Officer. AMERISAFE continues to demonstrate the disciplined underwriting, reserve strength and capital management that we've defined our company throughout multiple market cycles. While competitive pressures in workers' compensation were elevated, the quarter reinforced several key strengths of our franchise. We grew policy count, we achieved strong renewal retention, we generated favorable reserve development and maintained exceptional balance sheet strength. These results reflect both the resilience of our business model and the value of our specialized approach to serving hazardous industries.

Our strategy emphasizes risk selection, pricing discipline and long-term profitability. The workers' compensation marketplace is increasingly competitive with some carriers prioritizing premium growth over underwriting returns. Our approach remains unchanged, preserve underwriting integrity through the cycle to create superior value for our shareholders. We believe this positions AMERISAFE exceptionally well to capitalize on opportunities as market conditions evolve.

During the quarter, net premiums earned increased 3% year-over-year, supported by continued growth in policy count, strong retention of existing accounts. Voluntary premium on policies written in the quarter grew 0.8%, led by continued strong pricing. We renewed 92.3% of the policies for which we offered renewal. However, competition intensified in the quarter in select states, which slowed our new premium growth.

Turning to losses. Our current accident year loss ratio remains at 72%. We continue to monitor frequency, severity and medical trends closely. As we've discussed in previous quarters, medical inflation remains an area of focus for the workers' compensation industry. Throughout the third -- through the third quarter, both frequency and severity for the current accident year were in line with the prior accident year, with growth in claims reported exceeding premium growth.

Our claims team continues to demonstrate their expertise in actively managing claims and finding opportunities to resolve them effectively and efficiently. We experienced $6.9 million of favorable reserve development during the quarter, primarily from accident years 2023 and prior. We attribute that favorable development to our proactive claims handling and the consistent approach our team takes from time a claim is reported through resolution. Our ability and experience in handling severe claims and our reserve strength continue to be distinguishing characteristics for AMERISAFE.

We remain confident in our long-term outlook for our business and our ability to create sustainable value for shareholders through disciplined underwriting, prudent capital management and operational excellence.

And with that, I'll turn the call over to Guillermo.

Guillermo Ramos

Thank you, Janelle. Good morning, everyone. For the third quarter of 2026, AMERISAFE reported net income of $7.2 million or $0.39 per diluted share and operating net income of $7.4 million or $0.40 per diluted share. For reference, in the third quarter of 2025, net income was $13.8 million or $0.72 per diluted share and operating net income was $10.6 million or $0.55 per diluted share.

Turning to premiums. Gross written premiums decreased 4.5% to $76.7 million from $80.3 million in the third quarter of 2025. Payroll audit and related adjustments reduced premiums by $1.6 million this quarter compared with a $2.5 million increase in the prior year quarter -- prior year quarter, excuse me. Despite the unfavorable audit and related premium adjustments during the quarter, net premiums earned increased 3% to $73.3 million from $71.2 million, supported by strong premium production in recent quarters. Total underwriting and other expenses were $23.8 million compared to $22.1 million in the third quarter of 2025, resulting in an expense ratio of 32.5% compared with 31.1% a year ago. The increase was driven by increased insurance-related assessments, higher compensation costs and higher commission expense. Our effective tax rate for the quarter was 20% compared to 21% in the prior year quarter. The decrease was due to a higher proportion of income from tax-exempt investments.

Turning to investments. Net investment income was $6.6 million in the quarter, an increase of $0.6 million from the third quarter of 2025. The reinvestment rate environment remained favorable with yields on new investments exceeding portfolio roll-off yields by approximately 146 basis points. As a result, the tax equivalent book yield increased to 4%, up 9 basis points from the third quarter of 2025. Our portfolio remains conservatively positioned, carrying an average AA- credit rating and a duration of 4.7 years. At quarter end, we held approximately $753 million in investments, cash and cash equivalents. The portfolio was comprised of 58% municipal bonds, 25% corporate bonds, 3% U.S. treasuries and agencies, 9% equity securities and 5% cash and cash equivalents. Approximately 41% of the portfolio was classified as held to maturity and carry a net unrealized loss position of $23.8 million. As a reminder, these securities are carried at amortized costs, and therefore, unrealized gains and losses are not reflected in reported book value.

Our diversified equity holdings recorded a modest unrealized loss of $0.2 million compared to $4.1 million unrealized gain in the prior year quarter. Statutory surplus was $208.4 million at quarter end compared to $217.8 million at year-end 2025. Book value per share decreased to $12.8 million, down 4.8% year-to-date. During the quarter, we repurchased approximately 5,000 shares at an average price of $30.18 per share, representing $0.2 million return to shareholders. Overall, the quarter reflected growth in earned premiums and continued improvement in portfolio yields, partially offset by unfavorable audit premium adjustments and higher expenses. We remain focused on disciplined underwriting, profitable premium production and improving operating leverage while maintaining a conservative investment portfolio and a prudent approach to capital management. Lastly, we will file our Form 10-Q with the SEC tomorrow, October 30, 2026, after the market close.

With that, I would like to turn the call over to the operator for the questions.

Operator

[Operator Instructions] We will now take our first question from Mark Hughes with Truist Securities.

Phần hỏi đáp

Mark Hughes

Janelle, I think you talked on the last call about frequency being up through the six months. I think you said on the call just a second ago that growth in claims reported is exceeding premium growth. Have you seen any change in that trajectory? Is it accelerating as you go through the year? Is that a function of premiums being down rather than claims being up, I guess, measured against headcount or payroll or something like that? Just a little more on what's going on with frequency would be great.

G. Frost

Mark, let me start with absolute reported claim counts are up. So I would love to say, it's really all premium related, but that is not true. However, at the same time, our reported claims are up. We've written more policies, right? We have more policies in force. Our in-force policies have grown 4% year-over-year from an in-force basis.

So yes, absolute claim counts are up. I think you'll see that when we file the 10-Q later today, but you'll also keep in mind, we have more policies in force. That being said, there's certainly pressure on that denominator in terms of premium. As you know, we came into this year expecting mid- to high single-digit rate declines. That has been the experience. The rate filings that are now in force that are going to be, I guess, for now and for 2027, more of the same. So we were -- I think everybody in the industry was thinking the rate of decline would slow, but that really hasn't necessarily been the case. So that puts pressure on frequency.

Mark Hughes

When you talk about the rate filings, any specific numbers there? I think sometimes you talked about kind of the recent trend. It sounds like you're seeing -- you say more of the same. Is that mid- to upper single digits? Is that what I heard you say?

G. Frost

If you look at the latest charts that are out there, the lowest decline is North Carolina down 10.8%. And I think there are three states that have increases, Oregon, California and Nevada. Nevada was an administrative change, so I wouldn't really count that one as much. But everyone else is a decline. I think on average, we're still looking in that 5% to 6% range for loss cost declines going into 2027, into the 2027 premium year.

Mark Hughes

Yes. And in your judgment, you are saying that the industry was hoping for better or thought it would do better?

G. Frost

I think we said early on this year that we thought we were expecting the rate of the declines to slow, and when I talk about the declines, the loss costs. They did not slow. They more stabilized, would be probably the better term.

Mark Hughes

Is that because NCCI is looking in the rearview mirror, or it is because that is what is happening in the marketplace?

G. Frost

Well, NCCI using the data that companies are reporting in. So yes, that data is 18 months out, but they apply trend factors to that as well. I think it depends on individual company experience and what we're going to see in terms of what companies are experiencing in the here and now in terms of frequency, severity and reserve development from more recent accident years.

Mark Hughes

Yes. And when you say you have more policies, I think your policy size, correct me if I'm wrong, has shrunk a little bit with the competitive dynamic in the market. If you look at it on a headcount or payroll basis, is it still up?

G. Frost

No, from the average account size, if that's what you're referring to, I would say it's relatively flat.

Mark Hughes

Okay. Yes. Okay. And how about the audit premium? This was the first negative result in a while. What's driving that? Are there any particular industries, end markets where you're seeing more influence?

G. Frost

Yes, I'll give some color, and then I'll pass it off to Vince to give you a little bit more detail. The audit in the quarter -- let me be very clear, even though I know we talked about the decrease compared to the prior year quarter. Audit premiums themselves remain positive, meaning our insured base, their expected payrolls were higher than what they were when they originally estimated for that premium year or that policy year. So I want to be very clear that they remain positive. They were lower, considerably lower than third quarter of last year.

So when I read into that, I think about what does that mean for the economy of our insured base? And is there something happening there? We have seen a slowing of the wage growth itself. I think for the quarter, we saw -- Vince will give more detail, but I think it's like 4.1% in total. And that really wasn't new employee count.

So I think -- and I don't think this comes as a surprise to anyone. I think employers, small to midsized employers are experiencing the pressures on wages given the margin compression they're experienced with things that are happening. I still believe that there is a positive economic outlook for the people that we insure. There is definitely a labor shortage. So that speaks to potential higher wages. But at the same time, there's margin compression. Obviously, things happening with oil prices and diesel and gasoline are impactful to our industry.

So I think employers are being cautious about wage growth. But I believe, as we've talked about before, particularly during the COVID years, we talked about, is the next job there? I believe the next job is there. We haven't seen or heard of project delays and those types of things. So I still like that's economically a positive for AMERISAFE going forward.

Vince can talk about the quarter specifically and industries.

Vincent Gagliano

Yes, Mark, I'll start with industries. We do not see any material change in any specific industry audit premium patterns. The color I would add to the quarter is more about just the mechanics of premium audit. Keep in mind, we're auditing policies that were written over a year ago. We also don't control the timing necessarily of when those audits come through or whether they'll be bigger or smaller than usual.

I can tell you, we did have a couple unusually large negative audits in the quarter that on a small audit premium base does move the number significantly. We also had cancellation premium that while it wasn't out of the norm, it was robust, I'd say, and coming in on top of low audit premium, it really just created a pretty negative look for audit and adjustments for the quarter. We were a little surprised in general, but I will also say that our Q3 audit and adjustment premium is typically our lowest of the year if we look back over about 10 years of history.

Mark Hughes

Is that cancellation premium, is that a little more shopping around?

Vincent Gagliano

Yes. Yes, certainly. Competition is intensifying. We're having to battle more and more to keep the accounts we have much less writing new business.

Mark Hughes

As you said last quarter, you saw maybe some of the package carriers are getting a little more aggressive in the market. Any observations about what is -- what's happening this quarter, the intensity versus 3 or 6 months ago? And then whether is it the same players doing the same thing?

Vincent Gagliano

It is the same players. I think we've reached a point where we're comfortable saying we're seeing some irrational behavior.

G. Frost

And we haven't used that term in a while.

Vincent Gagliano

No, we kind of debated who say it first. Yes, competition is intense. Some days, Mark, I feel like we're fighting for every single account. It's not quite that bad, but we see some really bizarre things happening out there where it's apparent to us that some competitors are just chasing premium over profitability. So that's where we draw the line, and it's tough for us to walk away. But sometimes we just think if we can't write it profitable, that's what we're going to do.

Mark Hughes

Yes. I've got a few more. I'm happy to drop off if that makes sense. So I put myself in the queue if there's not much more of a queue, then feel free to call on me before I come back.

G. Frost

I believe there is a queue.

Mark Hughes

I'm dominating I apologize.

G. Frost

We will speak soon.

Operator

[Operator Instructions] We will go next to David Samar with Citizens.

David Samar

This is David on for Matt. So just on large losses, are you able to kind of let us know where you stand versus last year, just a year ago?

G. Frost

At quarter end, we would -- for the year, we had 18 claims over $1 million. Last year, we -- third quarter, we were at 17, and we ended the year with 25. So we're at 18 through the first 9 months.

David Samar

And on the expense ratio, obviously, it was a little bit higher this quarter, driven by those assessments. Were there any states or areas with outsized assessments that you can kind of point out for us?

Mark Hughes

Yes. Well, first of all, what I would like just to mention is that, yes, the expense ratio was higher, but it has to do as well with the earned premium. So we need to take a look at the denominator, okay? And there were three states that had those assessments. The biggest one was Delaware.

David Samar

And then I guess, lastly, just kind of digging a little further on the competitive environment. Voluntary growth slowed just a bit. Is this kind of the new normal that we should expect? Or is there anything else to comment on there?

G. Frost

No, I don't expect that to be a new normal. Vince was talking about, certainly, we saw the level of competition notch up a bit, if that's the right term to use in the third quarter, but we compete every day. My expectation is, as we started this year, we said we were shooting for mid-single-digit growth for the year. That outlook or that expectation for me has not changed.

Operator

[Operator Instructions] We will return to Mark Hughes with Truist Securities.

G. Frost

Welcome back, Mark.

Mark Hughes

How about the medical inflation? Anything there? One theory on a little higher frequency was maybe just overall pressure on medical costs, more people with high deductible plans that may find it more convenient to work through the comp system with health issues rather than their health plans. What do you think about that?

G. Frost

It's a really interesting point, Mark, because when we talk about medical inflation and we look at our book and even if we look across industry data, a lot of companies have talked about the inflation increase in hospitalization and hospital costs. I think that's a direct correlation to what -- exactly what you're talking about, just the experience that everyone in the country is experiencing on the health care -- the health care front.

What hospitals are experiencing with lower reimbursement rates, what employers are experiencing in terms of their own health insurance cost and benefits. I mean it's all interconnected. It's all related. And that's probably where -- other than home health because I will continue to beat that drum for AMERISAFE because I do think it's not unique to us, but given the severity of our injuries, that's certainly important to us. Hospitalization and hospital costs are probably where we're seeing the greatest pressure.

Mark Hughes

Yes. Okay. Yes, I think that was it for me.

G. Frost

Okay. I'm sorry I cut you off. Maybe you just had one more question. We could have done another.

Mark Hughes

No, I had my whole list. As I was reviewing my list, I thought, oh, my gosh. We've already gone through them.

G. Frost

Well, David beat you to the punch on the large losses, so we'll give him credit. You'll get credit for that.

Mark Hughes

Yes. Well, let me ask you this. You mentioned the point about irrational and kind of contemplating whether to use that word. What are the ramifications of that if somebody said, gosh, people are starting to be irrational. What does that make you think about as you're running the business?

G. Frost

Yes. We really internally talked about do we use the word or not because we've seen -- and I've talked about this on prior calls, we've seen anecdotally on different accounts where we thought how are they charging that? When we lose something to a competitor, how are they charging that? And sometimes if it's a multiline carrier, it's a little bit hard for us to compare apples and apples, granted, that is true.

But I would say the anecdotes were more principle this quarter than in the past. And so that's why we -- I feel comfortable using the word irrational. There definitely was a shift in the -- that we saw in the quarter. It's the best way for me to say it. And I shouldn't say -- I should also say this, and I don't think we commented on this earlier. It wasn't just pricing, right? And we saw what I would call irrational commission structures and in states where you compete on dividends.

So it was all related to how you win the account from a pricing perspective, whether it's commission, the rate itself or dividends. We saw -- we just saw an uptick in that in the third quarter and so that's why I would say irrational. And compare and contrast that to AMERISAFE because, again, we compete every day. So I don't want to make this all about the competition. This is how AMERISAFE behaves in the marketplace. We're not -- as Vincent said, we're not chasing that price. We want to win the account. We want to win the account under AMERISAFE value proposition, what we offer the policyholder, what we offer the agent, but more importantly, what's going to produce long-term profitable growth for AMERISAFE. So we -- it's a balance of all of those things. Guillermo was talking about the expense ratio.

And if you look at -- and I know this isn't information that's anywhere published, but you look at our expense ratio, and again, certainly, the audit premium hurt the expense ratio this particular quarter. But even if I look at it on a year-to-date basis, we're gaining operational efficiencies in what I would call fixed costs or nonvariable costs. So that's something we've really been focused on as we try to find ways to create ease of doing business. At the same time, are we managing that expense ratio. And we're definitely making progress there on a year-to-date basis. I feel comfortable about that.

But going to the variable costs, if I look at our commission expense on a year-to-date basis, we're 10 basis points higher than we were last year at this point in time. So we're not I mean, I think we're trying to find creative ways and rewarding those agencies and those policyholders that do bring us profitable business, at the same time, not using it as a premium grab.

Mark Hughes

Yes. I had a question. This is a general question we've been thinking about is that when you look at some of the package writers, you'll see the profitability, say, in their property, the commercial multi-peril property or nonliability will be very high. And at the same time, the profitability in the liability portion of it is abysmal. And I wonder the extent to which the same thing happening here in comp that everybody is pursuing the package, but the profit allocation is subject to a lot of discretion. We're just -- you try to figure out why would you write package business where you get the property at 50 and the GL at 120 combined if you look at that on a direct under any basis, it doesn't make sense or maybe it does. We're trying to figure out why that happens, but I wonder if you have any comments on that.

G. Frost

Yes. I don't know that I have the why behind that. I can say from a workers' comp perspective and a package carrier why write the comp at maybe something that breaks even is because it's a long tail line, right? And where the interest rates are, where interest rates are now, you can make money off of the cash flow portion of that. So maybe that $100 million combined in workers' comp is still more profitable than that $100 million combined in property to your point. If that gives you any color. But I can only -- again, I can only really speak about it in terms of what it means to the workers' comp.

Operator

Ladies and gentlemen, with no other questions holding, I'd like to turn the call back to CEO, Janelle Frost, for any additional or closing remarks.

G. Frost

AMERISAFE has successfully navigated workers' compensation cycles for decades by remaining disciplined when markets become increasingly competitive. That discipline continues today. Our recent A.M. Best rating affirmation reflects our underwriting discipline, prudent reserving, strong capitalization and long-term focus on execution, the same fundamentals that continue to drive our performance. We believe these strengths position us well to serve our policyholders, create sustainable value for shareholders and navigate current market conditions. We are operating from a position of strength with a team that remains intensely focused on underwriting profitability. Thank you for your continued support of AMERISAFE.

Operator

Thank you. Ladies and gentlemen, that will conclude today's call. We thank you for your participation. You may disconnect at this time.