ProAssurance Corp (PRA) Reports Mixed Fourth Quarter 2023 Results
Net Income: $6.4 million, a 54.3% decrease from the same quarter last year.
Gross Premiums Written: $209 million, a 7% decrease year-over-year.
Net Investment Income: Increased by 17% to $34 million.
Book Value Per Share: Increased by 7% to $21.82.
Combined Ratio: Deteriorated to 112.0% from 104.2% in the prior year.
New Business Written: More than doubled to $24 million.
On February 27, 2024, ProAssurance Corp (NYSE:PRA), a leading provider of professional liability insurance, released its 8-K filing, detailing the financial results for the fourth quarter ended December 31, 2023. The company reported a net income of $6.4 million, or $0.12 per diluted share, representing a significant decrease from the $13.9 million reported in the same period last year. This decline was partly offset by a robust increase in net investment income, which rose by 17% to $34 million.
ProAssurance Corp's gross premiums written for the quarter were $209 million, a 7% decrease compared to the fourth quarter of 2022. However, the company saw a substantial increase in new business written, which more than doubled to $24 million, reflecting confidence in ProAssurance's underwriting capabilities and service delivery.
The company's book value per share improved to $21.82, up 7% from the previous year, driven by after-tax unrealized holding gains from the fixed maturity portfolio. This increase in book value is a positive indicator of the company's financial health and its ability to create shareholder value.
Despite these gains, ProAssurance faced challenges, including a consolidated combined ratio that worsened to 112.0%, up from 104.2% in the prior year's quarter. This deterioration was primarily due to an increase in the current accident year net loss ratio in the Workers Compensation Insurance segment, reflecting rising average claim costs.
Financial Highlights and Segment Performance
ProAssurance's Specialty P&C segment experienced a decline in gross written premium, primarily due to competitive market conditions and a challenging loss environment. The Workers' Compensation Insurance segment also reported a decrease in gross premiums, attributed to lower renewal and audit premium. However, the company's strategic focus on rate adequacy and risk selection has positioned it for future profitability.
The company's balance sheet remains strong, with total investments of $4.35 billion and total assets of $5.63 billion. Shareholders' equity stood at $1.11 billion, with a book value per share of $21.82.
President and CEO Ned Rand commented on the results, stating, "We continue to manage our business with a focus on returning to underwriting profitability. We are drawing on our decades of successful underwriting, effective claims management, and superior service delivery to counter the twin effects of challenging market conditions and worsening litigation trends."
Our experience in medical professional liability and workers' compensation, the two highly cyclical lines of insurance in which we operate, has shown that our operating discipline and the long-term strategic improvements weve been implementing will ultimately ensure our success," added Rand.
ProAssurance's commitment to disciplined underwriting and strategic improvements is essential for navigating the cyclical nature of the insurance industry and maintaining long-term success.
Looking Ahead
ProAssurance continues to adapt to the competitive landscape and litigation trends, focusing on underwriting profitability and strategic growth. The company's ability to retain significant business despite higher renewal premiums is a testament to its value proposition and market position.
Investors and stakeholders can expect ProAssurance to leverage its expertise in professional liability and workers' compensation insurance to navigate the current market challenges and capitalize on opportunities for growth and profitability.
For more detailed information on ProAssurance Corp's financial results, interested parties are encouraged to review the full earnings report and join the upcoming conference call scheduled for February 28, 2024.
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Explore the complete 8-K earnings release (here) from ProAssurance Corp for further details.
This article first appeared on GuruFocus.
