We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ProAssurance (PRA) Down 20.6% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for ProAssurance (PRA - Free Report) . Shares have lost about 20.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ProAssurance due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
ProAssurance reported first-quarter 2020 operating loss per share of 2 cents against the Zacks Consensus Estimate of operating income of 5 cents. In the year-ago quarter, operating income was 8 cents. Quarterly operating revenues of ProAssurance were down 2.6% to $227 million from the prior-year quarter’s level, mainly due to lower premiums. The top line also missed the Zacks Consensus Estimate by 3.4%.
Quarterly Operational Update
Gross premiums written were down 6.2% year over year to $262 million, primarily due to lower premiums across the Specialty P&C segment, Workers’ Compensation Insurance segment and Segregated Portfolio Cell Reinsurance segments. Moreover, net premiums earned were down 2.1% year over year to $204 million. Net investment income decreased 8.7% year over year to $20.8 million.
Total expenses inched up 0.2% year over year to $230.7 million. Combined ratio deteriorated 500 basis points (bps) year over year to 111.3% due to increase in consolidated underwriting expense and net loss ratios.
Quarterly Segmental Results
Specialty P&C Insurance Segment
Total revenues of $122 million decreased 2.6% from the prior-year quarter figure due to lower premiums earned. Gross premiums written declined 6.6% year over year to $155.4 million, indicating the company’s strategy to strengthen rate levels in the physician’s book of business and continued re-underwriting efforts related to their national accounts, excess and surplus lines and healthcare facilities business.Total expenses of $140 million increased 2.4% year over year, primarily due to net loss and loss adjustment expenses.Combined ratio deteriorated 610 basis points year over year to 116.8%.
Workers' Compensation Segment
Total revenues of $45.3 million decreased 3% year over year, mainly due to lower premiums earned. Gross premiums written were $79.2 million, down 11.3% from the year-earlier period’s number, mainly due to reduction in renewal pricing and premium retention of 83%, partially offset by an increase in new business written.Total expenses of $43.9 million were down 1.6% year over year. Combined ratio deteriorated 150 basis points year over year to 98.7%.
Lloyd's Syndicate Segment
Total revenues of $23 million increased 16.9% year over year on the back of higher premiums and net investment income. Gross premiums written were $27.9 million, up 18.1% from the figure acquired in the comparable quarter last year, primarily driven by volume increases on renewal business and renewal pricing increases, primarily property insurance coverage as well as new business written, primarily casualty coverage. Total expenses of $23.9 million rose 23.4% year over year due to higher net losses and loss adjustment expenses and underwriting, policy acquisition and operating expenses. Combined ratio deteriorated 490 basis points year over year to 108.8%.
Segregated Portfolio Cell Reinsurance segment
Total revenues of $68 million decreased 23.1% year over year mainly due to lower premiums earned and net investment income. Gross premiums written were $27.1 million, down 25.4% the year-earlier period’s number, mainly due to the reduction in premium funding for a large workers’ compensation alternative market program. Combined ratio deteriorated 310 basis points year over year to 85%.
Corporate Segment
The company reported negative revenues of $7.1 million against year-ago quarter revenues of $55 million. Operating expenses of $4.8 million increased 5.6% from the prior-year quarter’s level. Interest expense of $4.1 million decreased 4.6% year over year.
Financial Position
As of Mar 31, 2020, ProAssurance’s total investments were $3.2 billion, down 4.4% from the number registered at year-end 2019. At first-quarter end, the company’s total assets were $4.7 billion, down 1.6% from the count at 2019 end.As of Mar 31, 2020, the insurer’s shareholder equity decreased 5.6% to $1.4 billion from the figure as of Dec 31, 2019. Return on equity was (6%) against the year-ago quarter return on equity of 8%. Book value was $26.51 per share as of Mar 31, 2020, down 5.7% from the figure as of Dec 31, 2019.
Share Repurchase & Dividend Update
The board of directors declared a regular dividend of 5 cents per share, which will be paid out to its shareholders on Jul 8, 2020. This dividend reflects reduction from 31 cents paid earlier given uncertainties introduced bythe COVID-19 pandemic. The company has not repurchased any shares of the stock in 2020 and 2019. As of May 1, 2020, it has $110 million remaining under its Board-authorized stock repurchase program.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -1352% due to these changes.
VGM Scores
Currently, ProAssurance has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, ProAssurance has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
ProAssurance (PRA) Down 20.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for ProAssurance (PRA - Free Report) . Shares have lost about 20.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is ProAssurance due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
ProAssurance Misses Q1 Earnings & Revenue Estimates
ProAssurance reported first-quarter 2020 operating loss per share of 2 cents against the Zacks Consensus Estimate of operating income of 5 cents. In the year-ago quarter, operating income was 8 cents. Quarterly operating revenues of ProAssurance were down 2.6% to $227 million from the prior-year quarter’s level, mainly due to lower premiums. The top line also missed the Zacks Consensus Estimate by 3.4%.
Quarterly Operational Update
Gross premiums written were down 6.2% year over year to $262 million, primarily due to lower premiums across the Specialty P&C segment, Workers’ Compensation Insurance segment and Segregated Portfolio Cell Reinsurance segments. Moreover, net premiums earned were down 2.1% year over year to $204 million. Net investment income decreased 8.7% year over year to $20.8 million.
Total expenses inched up 0.2% year over year to $230.7 million. Combined ratio deteriorated 500 basis points (bps) year over year to 111.3% due to increase in consolidated underwriting expense and net loss ratios.
Quarterly Segmental Results
Specialty P&C Insurance Segment
Total revenues of $122 million decreased 2.6% from the prior-year quarter figure due to lower premiums earned. Gross premiums written declined 6.6% year over year to $155.4 million, indicating the company’s strategy to strengthen rate levels in the physician’s book of business and continued re-underwriting efforts related to their national accounts, excess and surplus lines and healthcare facilities business.Total expenses of $140 million increased 2.4% year over year, primarily due to net loss and loss adjustment expenses.Combined ratio deteriorated 610 basis points year over year to 116.8%.
Workers' Compensation Segment
Total revenues of $45.3 million decreased 3% year over year, mainly due to lower premiums earned. Gross premiums written were $79.2 million, down 11.3% from the year-earlier period’s number, mainly due to reduction in renewal pricing and premium retention of 83%, partially offset by an increase in new business written.Total expenses of $43.9 million were down 1.6% year over year. Combined ratio deteriorated 150 basis points year over year to 98.7%.
Lloyd's Syndicate Segment
Total revenues of $23 million increased 16.9% year over year on the back of higher premiums and net investment income. Gross premiums written were $27.9 million, up 18.1% from the figure acquired in the comparable quarter last year, primarily driven by volume increases on renewal business and renewal pricing increases, primarily property insurance coverage as well as new business written, primarily casualty coverage. Total expenses of $23.9 million rose 23.4% year over year due to higher net losses and loss adjustment expenses and underwriting, policy acquisition and operating expenses. Combined ratio deteriorated 490 basis points year over year to 108.8%.
Segregated Portfolio Cell Reinsurance segment
Total revenues of $68 million decreased 23.1% year over year mainly due to lower premiums earned and net investment income. Gross premiums written were $27.1 million, down 25.4% the year-earlier period’s number, mainly due to the reduction in premium funding for a large workers’ compensation alternative market program. Combined ratio deteriorated 310 basis points year over year to 85%.
Corporate Segment
The company reported negative revenues of $7.1 million against year-ago quarter revenues of $55 million. Operating expenses of $4.8 million increased 5.6% from the prior-year quarter’s level. Interest expense of $4.1 million decreased 4.6% year over year.
Financial Position
As of Mar 31, 2020, ProAssurance’s total investments were $3.2 billion, down 4.4% from the number registered at year-end 2019. At first-quarter end, the company’s total assets were $4.7 billion, down 1.6% from the count at 2019 end.As of Mar 31, 2020, the insurer’s shareholder equity decreased 5.6% to $1.4 billion from the figure as of Dec 31, 2019. Return on equity was (6%) against the year-ago quarter return on equity of 8%. Book value was $26.51 per share as of Mar 31, 2020, down 5.7% from the figure as of Dec 31, 2019.
Share Repurchase & Dividend Update
The board of directors declared a regular dividend of 5 cents per share, which will be paid out to its shareholders on Jul 8, 2020. This dividend reflects reduction from 31 cents paid earlier given uncertainties introduced bythe COVID-19 pandemic. The company has not repurchased any shares of the stock in 2020 and 2019. As of May 1, 2020, it has $110 million remaining under its Board-authorized stock repurchase program.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -1352% due to these changes.
VGM Scores
Currently, ProAssurance has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, ProAssurance has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.