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ProAssurance (PRA) Earnings Beat, Revenues Miss in Q2

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ProAssurance Corporation’s(PRA - Free Report) first-quarter 2016 operating earnings per share of 67 cents surpassed the Zacks Consensus Estimate of 56 cents by 19.6%.

Proassurance Corporation (PRA - Free Report) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany

 The bottom line also improved 4.6% year over year on higher net premiums earned.
Operational Update

ProAssurance’s operating revenues decreased 0.6% year over year to $203.5 million on lower net investment income. The top line also missed the Zacks Consensus Estimate of $205 million. However, total revenue rose 5.6% from the year-ago quarter due to a significant increase in net realized investment gains.

Gross premiums written by ProAssurance grew 0.5% year over year to $195 million.

Specialty Property and Casualty segment witnessed 3.1% year-over-year increase in premiums. However, premiums in both Workers' Compensation and Lloyd's segments, declined 3.2%.

Net investment income of ProAssurance was $24.6 million, down 12.1% year over year.

Total expense increased 2.4% year over year to $166.3 million. The rise in costs mainly stemmed from a 2.8% increase in net losses and loss adjustment expenses as well as marginally higher underwriting, policy acquisition and operating charges.

Financial Ratios

ProAssurance’s net loss ratio deteriorated 120 basis points (bps) to 60.5% compared with 59.3% in the prior-year quarter.

Expense ratio deteriorated 10 bps to 30.6% from 30.5% in the year-ago quarter.

Combined ratio deteriorated 130 bps to 91.1% from 89.8% in the prior-year quarter.

Operating ratio improved 330 bps year over year to 77.2%.

Return on equity was 8.6% as against 6.3% in the year-ago quarter.

Financial Position

ProAssurance’s total assets were $4.98 billion as of Jun 30, 2016, up 1.4% from $4.91 billion as of Dec 31, 2015.

The insurer’s shareholder equity was $2.03 billion as of Jun 30, 2016, up 3.6% from $1.96 billion as of Dec 31, 2015.

Book value per share increased approximately 3.4% to $38.12 as of Jun 30, 2016 from $36.88 as of Dec 31, 2015.

Share Repurchase Update

ProAssurance bought back about 0.02million shares worth around $0.8 million in the second quarter. As of Jul 31, 2016, the insurer has repurchased approximately 0.04 millionshares for $2.1 million.  The company has $109.6 million remaining under its  authorization.

Zacks Rank Performances of Other P&C Insurers

ProAssurance carries a Zacks Rank #3 (Hold).

PROASSURANCE CP Price, Consensus and EPS Surprise

PROASSURANCE CP Price, Consensus and EPS Surprise | PROASSURANCE CP Quote

Performances of Other P&C Insurers

Among other P&C insurers that reported their second-quarter results so far, the bottom line at The Travelers Companies Inc. (TRV - Free Report) and Cincinnati Financial Corp. (CINF - Free Report) beat their respective Zacks Consensus Estimate, whereas Chubb Ltd.’s (CB - Free Report) earnings missed the same in the second quarter.

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