Birmingham, AL – ProAssurance Corporation (NYSE: PRA) reports a net loss of $3.6 million, or $0.07 per diluted share, and operating income1 of $7.7 million, or $0.14 per diluted share, for the three months ended March 31, 2022.
Higher operating income in the first quarter of 2022 was driven primarily by improved underwriting results in our Specialty Property & Casualty (“Specialty P&C”) and Lloyd’s Syndicates segments. Net investment income increased as well, as the addition of the NORCAL portfolio brought our consolidated invested assets to $4.7 billion.
Consolidated gross premiums written increased for the first quarter due to top line growth in our Specialty P&C segment through the NORCAL acquisition. Premiums were higher in the Segregated Portfolio Cell Reinsurance segment, remained consistent with the prior year in the Workers’ Compensation Insurance segment, and our reduced participation at Lloyd’s of London led to a decrease.
Our consolidated combined ratio, excluding transaction-related costs, was 105.4 percent, a year-over-year decrease of 4.2 points, as we improved underwriting results in the Specialty P&C, Segregated Portfolio Cell Reinsurance, and Lloyd’s Syndicates segments compared to the first quarter of 2021.
“The improved operating result is a testament to the determined efforts provided by our strong team over the past year,” said Ned Rand, President and Chief Executive Officer of ProAssurance. “Keeping our focus on the fundamentals of our business are of key importance as we look ahead to reaching our 2022 goals, and every improvement that we make in the business will deliver positive effects for the long haul.”
Our book value per share of $23.72 declined approximately 10% during the current quarter, adversely impacted by $141 million of after-tax unrealized losses from our fixed maturity portfolio (which directly impacts equity through AOCI) and $14 million of pre-tax unrealized losses from our equity and convertible securities (which are reflected on the income statement) due to rising interest rates.
Mr. Rand continued, “While developments in the investment markets may result in short-term movements in asset values, higher current market yields will provide an opportunity for our investment portfolio yield to be increased over time.”
This month marks the one-year anniversary of the largest acquisition in ProAssurance history. The integration of NORCAL into the ProAssurance family of companies has brought a broader, nationwide footprint, a wealth of talent and experience from the team members that joined our organization, greater scale and efficiency, and a history and reputation recognized by many physicians around the country. We look forward to the continued benefits the combination of these two companies will bring to ProAssurance competitiveness and capabilities.
Highlights – First Quarter 20222
- Gross premiums written increased to $335.6 million (+49.3%) and net premiums earned increased to $265.7 million (+41.8%), driven by the addition of NORCAL premiums to the Specialty Property & Casualty segment
- Targeted application of pricing increases and judicious underwriting led to an average increase of 10% in Standard Physician pricing
- Consolidated combined ratio, excluding transaction-related costs, improved to 105.4% (-4.2 points)
- Net investment income increased to $20.4 million (+36.1%) due to the addition of the NORCAL invested assets
The complete results release is available here: ProAssurance Results for First Quarter 2022
1Operating income is a Non-GAAP financial measure. See a reconciliation of the net loss to Non-GAAP operating income under the heading “Non-GAAP Financial Measures” that follows.
2Comparisons are to the first quarter of 2021