Workers' compensation insurer Employers Holdings (NYSE: EIG) missed Wall Street’s revenue expectations in Q3 2026, with revenue falling 20.9% year on year to $189.3 million. Its non-GAAP profit of $0.71 per share was 23.8% above analysts’ consensus estimates.

For more on Employers Holdings, read the full research report for free.

Revenue growth

Insurance companies earn revenue from three primary sources: 1) The core insurance business itself, often called underwriting and represented in the income statement as premiums 2) Income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities 3) Fees from various sources such as policy administration, annuities or other value-added services. Employers Holdings’s revenue grew at a sluggish 2.6% annualized rate over the last five years, falling short of our benchmarks.

Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Employers Holdings’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 5.9% annually.

Note: Quarters not shown were determined to be outliers because they were impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Employers Holdings missed Wall Street’s consensus estimates and reported an uninspiring 20.9% year-on-year revenue decline, generating $189.3 million of revenue.

Net premiums earned made up 86.9% of the company’s total revenue during the last five years, meaning Employers Holdings barely relies on non-insurance activities to drive its overall growth.

The market focuses primarily on an insurer’s net premiums earned growth as investment and fee income are considered more susceptible to market volatility and economic cycles.

Book value per share (BVPS)

Insurers are balance sheet businesses, collecting premiums upfront and paying out claims over time. Premiums collected but not yet paid out, often referred to as the float, are invested and create an asset base supported by a liability structure. Book value per share (BVPS) captures this dynamic by measuring these assets (investment portfolio, cash and reinsurance recoverables) less liabilities (claim reserves, debt and future policy benefits). BVPS is essentially the residual value for shareholders.

BVPS is therefore an important metric to track for insurers and sheds light on business quality. While other (and more commonly known) per-share metrics like EPS can sometimes be lumpy due to reserve releases or one-time items and can be managed or skewed while still following accounting rules, BVPS reflects long-term capital growth and is harder to manipulate.

Employers Holdings’s BVPS was flat over the last five years. The last two years show a similar pattern, with BVPS roughly flat at $44.66 per share.

Over the next 12 months, consensus estimates call for Employers Holdings’s BVPS to grow by 21.9% to $52.99, a strong growth rate.

Key takeaways from Employers Holdings’s Q3 results

Employers Holdings’ quarter left room for improvement: sales and net premiums earned fell short of Wall Street’s consensus estimates. EPS provided a positive, topping analysts’ consensus estimates. Shares remained flat at $50.95 immediately after the release.

Employers Holdings’s latest earnings report disappointed. One quarter doesn’t define a company’s quality, so assessing whether the stock is a buy at the current price requires a broader view. It’s important to consider its valuation and business quality as well as what happened in the latest quarter. For more on Employers Holdings, read the full research report here (it’s free).