Birmingham, AL – ProAssurance Corporation (NYSE: PRA) recently reported results for the three and six months ended June 30, 2020.
Management Commentary
The second quarter of 2020 was unique in that, for the first time in many of our lives, we began and ended a quarter in the midst of global crisis that dramatically changes the rhythms of daily life. The COVID-19 pandemic represents a multifaceted challenge, on a scale that even after five months we are still just beginning to understand. Each day, our customers and the many millions of people they serve here in the United States and abroad face uncertainty in their personal and professional lives as they struggle to achieve some semblance of normalcy. I am incredibly proud of our employees’ efforts to help reduce that uncertainty in what ways we can. Their flexibility in responding to this pandemic and their continued commitment to our customers amid the disruption to their own lives has been exemplary.
The health and safety of our employees remains our highest priority – they are the heart of our company, providing the security and peace of mind upon which our customers rely. With that in mind, we have developed a “Return to Office” strategy that provides employees the opportunity to return to their offices on a voluntary basis while allowing the flexibility to continue working from home. While the majority of ProAssurance employees continue to work from home, approximately 35% have returned to the office, on a part-time basis as part of the controlled re-opening of our facilities.
Meanwhile, we continue to see the effects of the pandemic in each of our lines of business, materializing as premium credits and deferrals, a reduction in claims frequency, and delays in jury trials while the courts remain shuttered. As has always been our policy, we will proceed through this shifting landscape with care, prudent in our response to unfavorable trends and cautious in recognizing favorable ones.
As was disclosed and discussed in detail in our previous period’s report, the large national healthcare account that we’ve referenced and disclosed over the past two quarters did not renew on our offered terms, and we issued a tail policy in accordance with contractual terms. The writing of this tail policy marks the end of a stretch of road we will be glad to leave behind us as we focus on the future and various challenges that lie ahead.
This backdrop can obscure underlying improvement in our core businesses. Since this executive leadership team was formed in July of last year, we have made progress toward our goal of becoming a more effective and efficient organization. We have spent the past twelve months executing a comprehensive strategy to improve our expense model, tighten underwriting criteria, and foster a culture of empowerment and accountability. Meanwhile, signs of a firming market continue to emerge in our Healthcare Professional Liability Specialty business in the form of rate gains and improved terms, conditions, and structures. In our Workers’ Compensation Insurance segment, we continue to operate profitably and execute our rural underwriting strategy to great effect. As we proceed into the second year of our managing tenure, I am excited to see the early fruits of our labor manifest as benefits to our customers and shareholders.
The NORCAL Group transaction continues to progress despite the many challenges 2020 has presented. We look forward to working with the exceptional people at NORCAL, adding profitable business in attractive territories, and achieving strategic gains in scope and scale that are ever more important as the healthcare professional liability market continues to evolve.
The complete results release is available here: ProAssurance Reports Results for Second Quarter 2020
Source: ProAssurance