ProAssurance Corporation (PRA): Zacks Rank Buy

• By Tracey Ryniec
• On 1:00 am EDT, Friday October 2, 2009

ProAssurance Corporation (NYSE: PRA - News) saw revenues rise 14.4% in the second quarter as premiums increased. The company has surprised on estimates 3 out of 4 quarters by an average of 34.28%. PRA is trading with a forward P/E of 13.96.

Company Description

ProAssurance is the fifth largest writer of medical professional liability insurance in the United States. The company insures physicians, dentists, podiatrists, allied health professionals, health care facilities, and lawyers.

ProAssurance Surprised by 43.40% in the Second Quarter

On Aug 3, ProAssurance reported second quarter results that easily beat the Zacks Consensus Estimate. Earnings per share were $1.52 compared to Zacks Consensus Estimate of $1.06.

Revenues climbed 14.4% to $175.2 million from $153.1 million in the year ago period.

Gross Written Premiums increased 27% from the second quarter of 2008. The gain was mainly due to recent acquisitions. The recently acquired PICA Group represented $13.7 million of new business in the quarter.

The quarter was also boosted by the contributions of the Mid-Continent General Agency which produced $3.6 million of new premium.

Book Value per share rose 9% to $46.72 from the end of 2008.

Zacks Consensus Estimates Rise

With the better than expected second quarter, covering analysts have been raising estimates on the third quarter and the full year.

The third quarter Zacks Consensus Estimate rose nearly 13% to $1.22 from $1.08 in the last 60 days.

One analyst out of 6 covering analysts also raised the full year estimate in the last 30 days to $4.93 from $4.87 per share.

Value Fundamentals

ProAssurance is a Zacks #1 Rank (strong buy) stock. It is trading with a price-to-book ratio of 1.13.

PROASSURANCE CP (PRA): Free Stock Analysis Report

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