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ProAssurance Q2 Earnings Beat Estimates on Declining Expenses
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Key Takeaways
PRA's Q2 adjusted operating income rose to $0.52, topping the $0.19 consensus estimate.
Higher investment income and reduced expenses drove results despite lower premiums.
Combined ratio improved to 103.6% from 110.9% a year earlier.
ProAssurance Corporation (PRA - Free Report) reported a second-quarter 2025 adjusted operating income of 52 cents per share, which beat the Zacks Consensus Estimate of 19 cents. The bottom line also rose from 21 cents in the year-ago period.
Operating revenues fell 2.4% year over year to $271.9 million. However, the top line beat the consensus mark by 2%.
The better-than-expected quarterly results were driven by rising investment income and a decline in expenses. However, the upside was partially offset due to lower premiums, especially in the Specialty P&C segment and the Segregated Portfolio Cell Reinsurance unit.
ProAssurance Corporation Price, Consensus and EPS Surprise
Gross premiums written of $216.9 million declined 3.1% year over year. Net premiums earned decreased 3.1% year over year to $232.4 million due to the cessation of involvement in Syndicate 1729 and strategic actions like the non-renewal of SPCs. The reported figure beat the Zacks Consensus Estimate of $225.2 million.
Net investment income was $38.9 million, which rose 6.5% year over year, aided by higher book yields on PRA’s investments. The metric beat the consensus mark and our estimate of $37.5 million.
Total expenses of $249.3 million decreased 8.5% year over year and came lower than our estimate of $260.3 million. The year-over-year decrease resulted from a decline in net losses and loss adjustment expenses.
ProAssurance reported a net income of $21.9 million for the second quarter of 2025, which rose 41.4% year over year. The combined ratio of 103.6% improved from 110.9% in the prior-year quarter.
ProAssurance’s Segmental Update
Specialty P&C Segment
Revenues from the segment declined 2.4% year over year to $181.4 million, but came in higher than the Zacks Consensus Estimate of $178.7 million and our estimate of $174.1 million. Net premiums earned of $179.3 million declined 2.8% year over year due to PRA’s decision to discontinue participation in Syndicate 1729. The metric missed the consensus mark of $180.3 million.
Total expenses dipped 13% year over year to $170.8 million. The unit reported a profit of $10.7 million, against the year-ago loss of $10.2 million. The combined ratio of 95.2% improved from 106.8% in the prior-year quarter.
Workers' Compensation Insurance Segment
The segment’s revenues of $42 million declined 0.6% year over year and came lower than the Zacks Consensus Estimate and our estimate of $42.3 million. Net premiums earned decreased 0.5% year over year to $41.5 million, which missed the consensus mark of $41.6 million and our estimate of $41.9 million.
Total expenses rose 1.4% year over year to $47.9 million. The unit incurred a loss of $6 million, wider than the prior-year quarter’s loss of $5 million. The combined ratio of 115.4% deteriorated from 113.2% in the prior-year quarter.
Segregated Portfolio Cell Reinsurance Segment
Gross premiums written amounted to $13 million, which declined 18% year over year and missed our estimate of $13.4 million. Net premiums earned declined 14.7% year over year to $11.6 million, which missed the Zacks Consensus Estimate of $12.1 million and our estimate of $12.4 million.
Underwriting, policy acquisition and operating expenses dropped 24.8% year over year to $3.9 million. The unit reported a quarterly profit of $1.6 billion, which rose significantly from the figure of $167 million a year ago. The combined ratio improved to 77.8% from 102.3% in the prior-year quarter.
Corporate Segment
The segment’s net investment income rose 6.9% year over year to $38 million and beat our estimate of $36.7 million. The metric gained on improved average book yields from PRA’s fixed maturity investments.
Operating expenses rose 2.6% year over year to $8.9 million. The unit’s profit of $19.8 million decreased 17.8% year over year. Interest expenses declined 7.5% year over year to $5.2 million.
PRA’s Financial Position (As of June 30, 2025)
ProAssurance exited the second quarter with cash and cash equivalents of $41.6 million, which declined from $54.9 million as of Dec. 31, 2024. Total investments were $4.4 billion, which rose 0.3% from the figure at the end of 2024.
Total assets of $5.5 billion decreased from the 2024-end level of $5.6 billion.
Debtless unamortized debt issuance costs amounted to $422.6 million, which reflects a decrease from $424.9 million as of Dec. 31, 2024.
Total shareholders’ equity of $1.3 billion rose 6.1% from the level at 2024-end.
Net cash used in operating activities amounted to $39.7 million in the first half of 2025, which is 61.9% wider than the prior-year quarter.
Book value per share was $24.80 as of June 30, 2025, up from $23.49 as of 2024-end. Adjusted operating return on equity was 8.5%, which improved from 3.9% a year ago.
ProAssurance’s Share Repurchase Update
ProAssurance did not repurchase any common shares in the second quarter of 2025. A leftover capacity of $55.9 million remained in place to be utilized for common share repurchases or retirement of outstanding debt as of June 30, 2025.
The Zacks Consensus Estimate for Lazard’s current-year earnings of $2.47 per share has witnessed two upward revisions in the past 30 days against none in the opposite direction. Lazard beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 43.9%. The consensus estimate for current-year revenues is pegged at $3.1 billion, implying 5.6% year-over-year growth.
The Zacks Consensus Estimate for Evercore’s current-year earnings of $12.41 per share has witnessed two upward revisions in the past 30 days against no movement in the opposite direction. Evercore beat earnings estimates in each of the trailing four quarters, with the average surprise being 44.1%. The consensus estimate for current-year revenues is pegged at $3.5 billion, calling for 15.9% year-over-year growth.
The Zacks Consensus Estimate for Acadian Asset Management’s current-year earnings is pegged at $3.72 per share, implying 34.8% year-over-year growth. In the past 30 days, Acadian Asset Management has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for the current-year revenues is pegged at $620.9 million, calling for 22.8% year-over-year growth.
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ProAssurance Q2 Earnings Beat Estimates on Declining Expenses
Key Takeaways
ProAssurance Corporation (PRA - Free Report) reported a second-quarter 2025 adjusted operating income of 52 cents per share, which beat the Zacks Consensus Estimate of 19 cents. The bottom line also rose from 21 cents in the year-ago period.
Operating revenues fell 2.4% year over year to $271.9 million. However, the top line beat the consensus mark by 2%.
The better-than-expected quarterly results were driven by rising investment income and a decline in expenses. However, the upside was partially offset due to lower premiums, especially in the Specialty P&C segment and the Segregated Portfolio Cell Reinsurance unit.
ProAssurance Corporation Price, Consensus and EPS Surprise
ProAssurance Corporation price-consensus-eps-surprise-chart | ProAssurance Corporation Quote
PRA’s Q2 Operational Update
Gross premiums written of $216.9 million declined 3.1% year over year. Net premiums earned decreased 3.1% year over year to $232.4 million due to the cessation of involvement in Syndicate 1729 and strategic actions like the non-renewal of SPCs. The reported figure beat the Zacks Consensus Estimate of $225.2 million.
Net investment income was $38.9 million, which rose 6.5% year over year, aided by higher book yields on PRA’s investments. The metric beat the consensus mark and our estimate of $37.5 million.
Total expenses of $249.3 million decreased 8.5% year over year and came lower than our estimate of $260.3 million. The year-over-year decrease resulted from a decline in net losses and loss adjustment expenses.
ProAssurance reported a net income of $21.9 million for the second quarter of 2025, which rose 41.4% year over year. The combined ratio of 103.6% improved from 110.9% in the prior-year quarter.
ProAssurance’s Segmental Update
Specialty P&C Segment
Revenues from the segment declined 2.4% year over year to $181.4 million, but came in higher than the Zacks Consensus Estimate of $178.7 million and our estimate of $174.1 million. Net premiums earned of $179.3 million declined 2.8% year over year due to PRA’s decision to discontinue participation in Syndicate 1729. The metric missed the consensus mark of $180.3 million.
Total expenses dipped 13% year over year to $170.8 million. The unit reported a profit of $10.7 million, against the year-ago loss of $10.2 million. The combined ratio of 95.2% improved from 106.8% in the prior-year quarter.
Workers' Compensation Insurance Segment
The segment’s revenues of $42 million declined 0.6% year over year and came lower than the Zacks Consensus Estimate and our estimate of $42.3 million. Net premiums earned decreased 0.5% year over year to $41.5 million, which missed the consensus mark of $41.6 million and our estimate of $41.9 million.
Total expenses rose 1.4% year over year to $47.9 million. The unit incurred a loss of $6 million, wider than the prior-year quarter’s loss of $5 million. The combined ratio of 115.4% deteriorated from 113.2% in the prior-year quarter.
Segregated Portfolio Cell Reinsurance Segment
Gross premiums written amounted to $13 million, which declined 18% year over year and missed our estimate of $13.4 million. Net premiums earned declined 14.7% year over year to $11.6 million, which missed the Zacks Consensus Estimate of $12.1 million and our estimate of $12.4 million.
Underwriting, policy acquisition and operating expenses dropped 24.8% year over year to $3.9 million. The unit reported a quarterly profit of $1.6 billion, which rose significantly from the figure of $167 million a year ago. The combined ratio improved to 77.8% from 102.3% in the prior-year quarter.
Corporate Segment
The segment’s net investment income rose 6.9% year over year to $38 million and beat our estimate of $36.7 million. The metric gained on improved average book yields from PRA’s fixed maturity investments.
Operating expenses rose 2.6% year over year to $8.9 million. The unit’s profit of $19.8 million decreased 17.8% year over year. Interest expenses declined 7.5% year over year to $5.2 million.
PRA’s Financial Position (As of June 30, 2025)
ProAssurance exited the second quarter with cash and cash equivalents of $41.6 million, which declined from $54.9 million as of Dec. 31, 2024. Total investments were $4.4 billion, which rose 0.3% from the figure at the end of 2024.
Total assets of $5.5 billion decreased from the 2024-end level of $5.6 billion.
Debtless unamortized debt issuance costs amounted to $422.6 million, which reflects a decrease from $424.9 million as of Dec. 31, 2024.
Total shareholders’ equity of $1.3 billion rose 6.1% from the level at 2024-end.
Net cash used in operating activities amounted to $39.7 million in the first half of 2025, which is 61.9% wider than the prior-year quarter.
Book value per share was $24.80 as of June 30, 2025, up from $23.49 as of 2024-end. Adjusted operating return on equity was 8.5%, which improved from 3.9% a year ago.
ProAssurance’s Share Repurchase Update
ProAssurance did not repurchase any common shares in the second quarter of 2025. A leftover capacity of $55.9 million remained in place to be utilized for common share repurchases or retirement of outstanding debt as of June 30, 2025.
PRA’s Zacks Rank & Key Picks
PRA currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader finance space are Lazard, Inc. (LAZ - Free Report) , Evercore Inc. (EVR - Free Report) and Acadian Asset Management Inc. (AAMI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lazard’s current-year earnings of $2.47 per share has witnessed two upward revisions in the past 30 days against none in the opposite direction. Lazard beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 43.9%. The consensus estimate for current-year revenues is pegged at $3.1 billion, implying 5.6% year-over-year growth.
The Zacks Consensus Estimate for Evercore’s current-year earnings of $12.41 per share has witnessed two upward revisions in the past 30 days against no movement in the opposite direction. Evercore beat earnings estimates in each of the trailing four quarters, with the average surprise being 44.1%. The consensus estimate for current-year revenues is pegged at $3.5 billion, calling for 15.9% year-over-year growth.
The Zacks Consensus Estimate for Acadian Asset Management’s current-year earnings is pegged at $3.72 per share, implying 34.8% year-over-year growth. In the past 30 days, Acadian Asset Management has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for the current-year revenues is pegged at $620.9 million, calling for 22.8% year-over-year growth.