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ProAssurance's (PRA) Q3 Earnings Beat Mark, Improve Y/Y

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ProAssurance Corporation (PRA - Free Report) reported third-quarter 2021 operating earnings of 25 cents per share, beating the Zacks Consensus Estimate of 15 cents by 66.7%. The company’s bottom line surged 400% year over year, mainly on the back of higher premiums, decline in expenses and a solid contribution from the Specialty P&C Insurance and Corporate segments.

Quarterly operating revenues of ProAssurance increased 38% to $294 million from the prior-year quarter’s level, mainly owing to improved premiums. The top line also beat the Zacks Consensus Estimate by 8.9%.

Quarterly Operational Update

Gross premiums written were up 25.9% year over year to $308.6 million, mainly on the back of the Specialty P&C Segment and growth in the Workers’ Compensation Insurance segment. Moreover, net premiums earned were up 34.6% year over year to $287 million.

Net investment income rose 13.9% year over year to $19.2 million.

Net realized investment gains of the company were $0.53 million, which decreased 94% from the year-ago period’s level.

Total expenses declined 20.5% year over year to $297.7 million on the back of a lower SPC U.S. federal income tax expense, SPC dividend expense, etc.
Combined ratio expanded 130 basis points (bps) year over year to 106.6%.

ProAssurance Corporation Price, Consensus and EPS Surprise ProAssurance Corporation Price, Consensus and EPS Surprise

ProAssurance Corporation price-consensus-eps-surprise-chart | ProAssurance Corporation Quote

Quarterly Segmental Results

Specialty P&C Insurance Segment

Total revenues of $204.5 million were up 72.5% from the prior-year quarter’s figure.

Gross premiums written rose 48.6% year over year to $235 million, mainly owing to the addition of NORCAL’s premium written along with disciplined underwriting and a focus on operational excellence.

Total expenses of $212.6 million surged 62.3% year over year.

Combined ratio contracted 690 basis points year over year to 104.3%.

Workers' Compensation Segment

Total revenues of $42.6 million were down 0.7% year over year.

Gross premiums written were $64.5 million, up 2.5% from the year-earlier period’s number, mainly owing to the change in retrospectively-rated policy adjustments and an increase in new business.

Total expenses of $44.9 million were up 8.3% year over year.

Lloyd's Syndicate Segment

Gross premiums written were $8.9 million, down 62.4% from the figure acquired in the comparable quarter of last year due to lower participation in Syndicates 1729 and 6131 for the 2021 underwriting year.

Combined ratio expanded 860 basis points year over year to 98.2%.

Segregated Portfolio Cell Reinsurance Segment

Gross premiums written were $15.2 million, down 4.3% from the year-earlier quarter’s number due to the competitive workers’ compensation market and retention losses in the healthcare professional liability programs.

Combined ratio expanded 1360 basis points year over year to 87.7%.

Corporate Segment

Net investment income of $18.6 million was up 18.8% year over year.

Operating expenses of $6.8 million increased 36.2% from the prior-year quarter’s level. Interest expense of $5.8 million rose 49.8% year over year.

Financial Position (as of Sep 30, 2021)

ProAssurance’s total investments were $4.8 billion, up 42.3% from the number registered at 2020 end.

At the third-quarter end, the company’s total assets were $6.3 billion, up 35.9% from the figure at 2020 end.

The insurer’s shareholder equity rose 5.5% to $1.4 billion from the figure as of Dec 31, 2020.

Return on equity was 4% against the year-ago quarter’s return on equity of (8.8%).

Book value was $26.36 per share, up 5.3% from the figure as of Dec 31, 2020.

Zacks Rank and Performance of Other Insurers

ProAssurance currently carries a Zacks Rank #3 (Hold). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Of the insurance industry players that have reported third-quarter results so far, the bottom-line results of Old Republic International Corporation (ORI - Free Report) , Assurant, Inc. (AIZ - Free Report) and CNO Financial Group, Inc. (CNO - Free Report) beat the respective Zacks Consensus Estimate.