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ProAssurance Corporation’s (PRA - Free Report) fourth-quarter 2018 operating earnings per share of 18 cents were in line with the Zacks Consensus Estimate. Meanwhile, the bottom line plunged 67.3% year over year, mainly due to decrease in total revenues.
Quarterly operating revenues of ProAssurance reduced 14.2% to $179.5 million from the prior-year quarter’s level due to net realized investment losses. The top line missed the Zacks Consensus Estimate by 22.3%.
Quarterly Operational Update
Gross premiums written increased 10.4% year over year to $211.6 million, primarily banking on higher premiums across Segregated Portfolio Cell Reinsurance plus Lloyd's Syndicates and Workers' Compensation segments. Moreover, net premiums earned rose 10.4% year over year.
Net investment income declined nearly 7% year over year to $24.2 million.
Net realized investment losses of the company were $46.1 million, wider than the prior-year quarter’s figure of $2.4 million.
Total expenses escalated 24.7% year over year to $218 million. This rise in costs mainly stemmed from higher net loss and loss adjustment expenses.
ProAssurance Corporation Price, Consensus and EPS Surprise
Total revenues of $115 million inched up 0.9% year over year.
Gross premiums written were $121 million, dipping 0.2% from the year-ago quarter’s figure.
Total expenses of $120 million mounted 23.9% year over year, primarily due to net loss and loss adjustment expenses.
Workers' Compensation Segment
Total revenues of $51.4 million rose 24.1% year over year, courtesy of higher premiums.
Gross premiums written were $65 million, up 7.7% from the year-earlier period’s number.
Total expenses of $44.8 million came in at an elevation of 23.3% year over year.
Lloyd's Syndicate Segment
Total revenues of $19.1 million soared 52.1% year over year.
Gross premiums written were $25.7 million, up 95% from the figure acquired in the comparable quarter last year.
Total expenses of $28.5 million skyrocketed 166.8% year over year.
Corporate Segment
The company reported revenues of ($22) million against the year-ago quarter's revenues of $22.1 million.
Operating expenses of $3.4 million decreased 58.4% from the prior-year quarter’s level. Interest expense of $4.8 million increased 9.3% year over year.
Financial Position
As of Dec 31, 2018, ProAssurance’s total investments were $3.3 billion, down 9.1% from the number registered at year-end 2017.
At fourth-quarter end, the company’s total assets were $4.6 billion, down 6.7% from the count at 2017 end.
As of Dec 31, 2018, the insurer’s shareholder equity slipped 4.5% to $1.5 billion from the tally as of Dec 31, 2017.
Share Repurchase & Dividend Update
The company’s board of directors approved a special dividend of 50 cents per share in addition to the regular dividend of 31 cents, payable Jan 9, 2019.
Full-Year Highlights
For 2018, consolidated gross premiums written totaled $957.3 million, up 9.4% year over year. Net premiums earned were $818.9 million, up 10.9% year over year.
For the full year, net realized investment losses were $43.5 million versus the net realized investments gains of $16.4 million, reflecting market volatility.
Among other players from the insurance industry, having already posted fourth-quarter earnings, the bottom-line results of RLI Corp. (RLI - Free Report) , Arch Capital Group Ltd. (ACGL - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) surpassed the respective Zacks Consensus Estimate.
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ProAssurance (PRA) Q4 Earnings Meet Estimates, Tumble Y/Y
ProAssurance Corporation’s (PRA - Free Report) fourth-quarter 2018 operating earnings per share of 18 cents were in line with the Zacks Consensus Estimate. Meanwhile, the bottom line plunged 67.3% year over year, mainly due to decrease in total revenues.
Quarterly operating revenues of ProAssurance reduced 14.2% to $179.5 million from the prior-year quarter’s level due to net realized investment losses. The top line missed the Zacks Consensus Estimate by 22.3%.
Quarterly Operational Update
Gross premiums written increased 10.4% year over year to $211.6 million, primarily banking on higher premiums across Segregated Portfolio Cell Reinsurance plus Lloyd's Syndicates and Workers' Compensation segments. Moreover, net premiums earned rose 10.4% year over year.
Net investment income declined nearly 7% year over year to $24.2 million.
Net realized investment losses of the company were $46.1 million, wider than the prior-year quarter’s figure of $2.4 million.
Total expenses escalated 24.7% year over year to $218 million. This rise in costs mainly stemmed from higher net loss and loss adjustment expenses.
ProAssurance Corporation Price, Consensus and EPS Surprise
ProAssurance Corporation Price, Consensus and EPS Surprise | ProAssurance Corporation Quote
Quarterly Segmental Results
Specialty P&C Insurance Segment
Total revenues of $115 million inched up 0.9% year over year.
Gross premiums written were $121 million, dipping 0.2% from the year-ago quarter’s figure.
Total expenses of $120 million mounted 23.9% year over year, primarily due to net loss and loss adjustment expenses.
Workers' Compensation Segment
Total revenues of $51.4 million rose 24.1% year over year, courtesy of higher premiums.
Gross premiums written were $65 million, up 7.7% from the year-earlier period’s number.
Total expenses of $44.8 million came in at an elevation of 23.3% year over year.
Lloyd's Syndicate Segment
Total revenues of $19.1 million soared 52.1% year over year.
Gross premiums written were $25.7 million, up 95% from the figure acquired in the comparable quarter last year.
Total expenses of $28.5 million skyrocketed 166.8% year over year.
Corporate Segment
The company reported revenues of ($22) million against the year-ago quarter's revenues of $22.1 million.
Operating expenses of $3.4 million decreased 58.4% from the prior-year quarter’s level. Interest expense of $4.8 million increased 9.3% year over year.
Financial Position
As of Dec 31, 2018, ProAssurance’s total investments were $3.3 billion, down 9.1% from the number registered at year-end 2017.
At fourth-quarter end, the company’s total assets were $4.6 billion, down 6.7% from the count at 2017 end.
As of Dec 31, 2018, the insurer’s shareholder equity slipped 4.5% to $1.5 billion from the tally as of Dec 31, 2017.
Share Repurchase & Dividend Update
The company’s board of directors approved a special dividend of 50 cents per share in addition to the regular dividend of 31 cents, payable Jan 9, 2019.
Full-Year Highlights
For 2018, consolidated gross premiums written totaled $957.3 million, up 9.4% year over year. Net premiums earned were $818.9 million, up 10.9% year over year.
For the full year, net realized investment losses were $43.5 million versus the net realized investments gains of $16.4 million, reflecting market volatility.
Zacks Rank
ProAssurance carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Among other players from the insurance industry, having already posted fourth-quarter earnings, the bottom-line results of RLI Corp. (RLI - Free Report) , Arch Capital Group Ltd. (ACGL - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) surpassed the respective Zacks Consensus Estimate.
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Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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