Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, announces that a class action lawsuit has been filed in the United States District Court for the Northern District of Alabama on behalf of investors that purchased ProAssurance Corporation (NYSE: PRA) common stock between April 26, 2019 and May 7, 2020 (the "Class Period"). Investors have until August 17, 2020 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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On January 22, 2020, ProAssurance announced that because of a deteriorating loss experience related mainly to one large healthcare account underwritten in 2016, the Company was estimating a $37 million adverse development in its Specialty Property and Casualty ("Specialty P&C") loss reserves for the fourth quarter of 2019. Additionally, the Company stated that since mid-2019 it had been executing a "comprehensive underwriting strategy in response to emerging trends and changing conditions in healthcare professional liability."
In response to these disclosures, ProAssurance’s stock price fell $4.18 per share, or 11%, to close at $33.40 per share on January 23, 2020.
On February 20, 2020, ProAssurance announced its 2019 fourth quarter and full year results. The Company revealed that the adverse development from this one large national healthcare account was actually $51.5 million, much larger than the initial estimate of $37 million only a month prior. The Company discussed that "[i]n the span of twelve months, we restructured the majority of our executive team [and] consolidated our Specialty P&C operations" under new leadership.
Then, on May 8, 2020, ProAssurance announced that the large healthcare client would likely not renew its policy and instead would likely exercise an option for tail coverage that would result in an additional $50 million in losses in the second quarter of 2020. This loss, when combined with the $51.5 adverse development, meant that the Company would suffer over $100 million in losses from a single account.
In response to these disclosures, ProAssurance’s stock price fell $4.38 per share, or 22%, to close at $15.95 per share on May 8, 2020.
The complaint, filed on June 16, 2020, alleges that throughout the Class Period defendants misrepresented the Company’s underwriting and reserve standards, and failed to adequately reserve for losses. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) ProAssurance lacked adequate underwriting process and risk management controls necessary to set appropriate loss reserves in its Specialty P&C segment; (ii) ProAssurance failed to properly assess a large national healthcare account that experienced losses far exceeding the assumptions made when the account was underwritten; and (iii) as a result, ProAssurance was subject to materially heightened risk of financial loss and reserve charges.
If you purchased ProAssurance common stock during the Class Period, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Melissa Fortunato or Marion Passmore by email at email@example.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
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