Amerisafe (AMSF) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01The workers’ compensation insurance industry is cyclical in nature, which may affect our overall financial performance
2. 02We operate in a highly competitive industry and may lack the financial resources to compete effectively
3. 03If we do not appropriately establish our premium rates, our results of operations will be adversely affected
4. 04project both frequency and severity of losses with reasonable accuracy
5. 05unanticipated court decisions, legislation or regulatory action
6. 06If we cannot sustain our relationships with independent agencies, we may be unable to operate profitably
7. 07If we are unable to realize our investment objectives, our financial condition and results of operations may be adversely affected
8. 08A decline in the level of business activity of our policyholders, particularly those engaged in the construction, trucking, logging and lumber, agriculture, manufacturing, maritime, and telecommunications industries, could negatively affect our earnings and profitability
9. 09Our loss reserves are based on estimates and may be inadequate to cover our actual losses
10. 10The effects of emerging claims and coverage issues on our business are uncertain
11. 11Changes in accounting standards or new standards, as well as assumptions, estimates and judgments by management related to complex accounting issues could have a material adverse effect on our capital levels and our results of operations
12. 12As an insurance holding company, we are dependent on the results of operations of our insurance subsidiaries, and our ability to pay dividends and repurchase shares depends on the regulatory and financial capacity of our subsidiaries to pay dividends to us
13. 13A downgrade in our A.M. Best rating would likely reduce the amount of business we are able to write

Risks Related to Regulation and Litigation

1. 14Because we are subject to extensive state and federal regulation, legislative changes may negatively impact our business
2. 15potential assessments for state guaranty funds, second injury funds and other mandatory pooling arrangements
3. 16Assessments and premium surcharges for state guaranty funds, second injury funds and other mandatory pooling arrangements may reduce our profitability
4. 17Legal or other administrative proceedings could have a material adverse effect on our operations or results of operations
5. 18We may have exposure to losses from terrorism for which we are required by law to provide coverage

Risks Related to Our Reinsurers

1. 19If we are unable to obtain reinsurance on favorable terms, our ability to write policies could be adversely affected
2. 20A downgrade in the A.M. Best rating of one or more of our significant reinsurers could adversely affect our financial condition
3. 21If any of our current reinsurers were to terminate participation in our reinsurance treaty program, we could be exposed to an increased risk of loss
4. 22We may not be able to recover amounts due from our reinsurers, which would adversely affect our financial condition

Risks Related to Our Common Stock

1. 23Our revenues and results of operations may fluctuate as a result of factors beyond our control, which fluctuation may cause the price of our common stock to be volatile
2. 24Provisions of our articles of incorporation and bylaws and the laws of the states of Texas and Nebraska could impede an attempt to replace or remove our directors or otherwise effect a change of control of our Company, which could diminish the value of our common stock
3. 25our board of directors may authorize the issuance of preferred stock with such rights, preferences and privileges as our board of directors deems appropriate
4. 26We are incorporated in Texas. Under the Texas Business Organizations Code, our ability to enter into a business combination with an affiliated shareholder is limited
5. 27The trading price of our common stock may decline
6. 28Securities analysts may discontinue coverage of our common stock or may issue negative reports, which may adversely affect the trading price of our common stock
7. 29Future sales of our common stock may affect the trading price of our common stock
8. 30Technology breaches or failures, including those resulting from a malicious cyber attack on us, or our policyholders or service providers, could disrupt or otherwise negatively impact our business
9. 31The expertise, wellbeing and resiliency of our workforce is necessary to maintain our competitive advantages in the high hazard workers’ compensation industry
10. 32Our business is dependent on the efforts of our executive officers because of their industry expertise, knowledge of our markets and relationships with the independent agencies that sell our insurance
11. 33Economic conditions could adversely affect our financial condition and results of operations
12. 34An inability to effectively manage our operations could make it difficult for us to compete and could affect our ability to operate profitably
13. 35We may require additional capital in the future, which may not be available to us or may be available only on unfavorable terms