Employers Holdings Inc.EIG

Morningstar Rating

Stock Research and Analysis

by Morningstar Analysts

Former mutual insurance company Employers Holdings converted to a stock corporation through an IPO in January 2007. It is a workers' compensation insurer that derived the vast majority of its premium revenue from California and Nevada. But Employers Read more

Bulls Say

Employers' demutualization allows the firm to pursue acquisitions, joint ventures, geographic expansion, and new product offerings.

Employers is an expert in workers' compensation insurance. It is the largest and seventh-largest nongovernmental writer of workers' compensation insurance in Nevada and California, respectively.

Merging with AmCOMP spreads the regulatory risk from one geographic area to multiple states. Employers won't be so reliant on the whims of the California insurance commissioner for premium adequacy. Read more

Bears Say

Workers' compensation rates are cyclical, margins are thin, and legislation at the state level makes for a tough environment.

Integration risk from the AmCOMP acquisition is a wild card that could backfire on national expansion plans.

Employers is not a mutual insurance company anymore; the distractions of being a public company could take their toll on management. Read more

Strategy

Employers Holdings concentrates on niche marketing and joint ventures with strategic partners. The monoline insurer seeks to bundle products with other established entities pursuing similar customers. Read more

Management

Employers Holdings has experienced managers who have worked for the company for many years. CEO Douglas Dirks has been president and CEO since the company's takeover of the State of Nevada Fund in January 2000 and was CEO of the fund from 1995 to 1999. Read more

Profile

Employers Holdings is a monoline workers' compensation insurance company embarking on a national expansion. The company demutualized in 2007 and intends to expand its current Read more

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