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ProAssurance (PRA) Down 0.4% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for ProAssurance (PRA - Free Report) . Shares have lost about 0.4% 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? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for ProAssurance Corporation before we dive into how investors and analysts have reacted as of late.
ProAssurance Q3 Earnings Miss Estimates on Weak Specialty P&C Unit
ProAssurance PRA reported a third-quarter 2025 adjusted operating income of 15 cents per share, which lagged the Zacks Consensus Estimate by 46.4%. The bottom line dropped 53.1% year over year.
Operating revenues of $274 million dipped 1.4% year over year. The top line missed the consensus mark by 0.7%.
The quarterly results were hurt by weaker underwriting performance, declining gross premiums written and an elevated expense level. Combined ratio deteriorated across key segments, such as Specialty P&C and Workers' Compensation Insurance segments. Nevertheless, the downside was partly offset by strong investment income growth and the robust performance of the Segregated Portfolio Cell Reinsurance segment.
PRA’s Q3 Operational Update
Gross premiums written fell 5.7% year over year to $290.4 million, which fell short of our estimate of $301.9 million. Net premiums earned of $233.4 million tumbled 4% year over year. Yet, the reported figure outpaced the Zacks Consensus Estimate of $225 million but missed our estimate of $236.3 million.
Net investment income advanced 8.5% year over year to $40.4 million in the quarter under review on the back of improved average book yields. The metric beat the consensus mark of $39.2 million and our estimate of $39.3 million.
Total expenses came in at $275.2 million, which increased 4.2% year over year and came higher than our estimate of $261.5 million. The year-over-year increase was due to higher net losses and loss adjustment expenses, and underwriting, policy acquisition and operating costs.
ProAssurance’s net income plunged 91.2% year over year to $1.4 million. The combined ratio of 114.7% deteriorated 910 bps year over year.
ProAssurance’s Segmental Update
Specialty P&C Segment
The segment recorded revenues of $181.8 million in the third quarter, which slipped 4.4% year over year. The metric marginally missed the Zacks Consensus Estimate of $183 million and our estimate of $184.6 million. Net premiums earned decreased 4.2% year over year to $180.8 million, lower than the consensus mark of $182 million.
Total expenses came in at $200.3 million, which escalated 6.4% year over year. The unit incurred a loss of $18.5 million against the year-ago profit of $1.9 million. The combined ratio deteriorated 910 bps year over year to 109.1%.
Workers' Compensation Insurance Segment
Revenues in the segment fell 2.3% year over year to $41.4 million in the quarter under review. The metric marginally missed the Zacks Consensus Estimate of $42.5 million and our estimate of $42.8 million. Net premiums earned of $41 million declined 2% year over year, lower than the consensus mark of $42 million.
Total expenses dipped 0.1% year over year to $46.5 million. The unit incurred a loss of $5.1 million, wider than the prior-year quarter’s loss of $4.2 million. The combined ratio deteriorated 210 bps year over year to 113.5%.
Segregated Portfolio Cell Reinsurance Segment
The segment’s gross premiums written of $14.2 million improved 4.2% year over year and beat our estimate of $12.9 million. However, net premiums earned tumbled 7.8% year over year to $11.7 million, which beat the Zacks Consensus Estimate of $11.2 million and our estimate of $11.5 million.
Underwriting, policy acquisition and operating expenses amounted to $4.2 million in the third quarter, which inched up 0.3% year over year. The unit reported a quarterly profit of $924 million, which surged 66.5% year over year. The combined ratio improved 630 bps year over year to 88.3%.
Corporate Segment
Net investment income of the unit grew 8.5% year over year to $39.3 million and beat our estimate of $38.4 million.
Operating expenses of $7.8 million dropped 23.9% year over year. The unit’s profit climbed 49.1% year over year to $27.1 million. Interest expenses fell 8.1% year over year to $5.2 million.
PRA’s Financial Position (As of Sept. 30, 2025)
ProAssurance exited the third quarter with cash and cash equivalents of $54.5 million, which dipped 0.8% from the 2024-end level. Total investments were $4.4 billion, up 1.6% from the figure at 2024-end.
Total assets of $5.6 billion dipped 0.4% from the 2024-end level.
Debt less unamortized debt issuance costs amounted to $421.5 million, down 0.8% from the figure as of Dec. 31, 2024.
Total shareholders’ equity of $1.3 billion advanced 8.5% from the level at 2024-end.
Net cash used in operating activities amounted to $12.4 million for the first nine months of 2025, while the company used $10.5 million of net cash in operations in the prior-year comparable period.
Book value per share was $25.37 as of Sept. 30, 2025, which grew 8% from the 2024-end figure. Adjusted operating return on equity deteriorated 320 bps year over year to 2.4% in the quarter under review.
ProAssurance’s Share Repurchase Update
ProAssurance did not repurchase any common shares in the third 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 Sept. 30, 2025.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -10.2% due to these changes.
VGM Scores
Currently, ProAssurance has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. 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. It's no surprise ProAssurance has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
ProAssurance is part of the Zacks Insurance - Property and Casualty industry. Over the past month, CNA Financial (CNA - Free Report) , a stock from the same industry, has gained 3%. The company reported its results for the quarter ended September 2025 more than a month ago.
CNA Financial reported revenues of $3.43 billion in the last reported quarter, representing a year-over-year change of +6.3%. EPS of $1.50 for the same period compares with $1.08 a year ago.
CNA Financial is expected to post earnings of $1.10 per share for the current quarter, representing a year-over-year change of -12%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for CNA Financial. Also, the stock has a VGM Score of B.
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ProAssurance (PRA) Down 0.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for ProAssurance (PRA - Free Report) . Shares have lost about 0.4% 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? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for ProAssurance Corporation before we dive into how investors and analysts have reacted as of late.
ProAssurance Q3 Earnings Miss Estimates on Weak Specialty P&C Unit
ProAssurance PRA reported a third-quarter 2025 adjusted operating income of 15 cents per share, which lagged the Zacks Consensus Estimate by 46.4%. The bottom line dropped 53.1% year over year.
Operating revenues of $274 million dipped 1.4% year over year. The top line missed the consensus mark by 0.7%.
The quarterly results were hurt by weaker underwriting performance, declining gross premiums written and an elevated expense level. Combined ratio deteriorated across key segments, such as Specialty P&C and Workers' Compensation Insurance segments. Nevertheless, the downside was partly offset by strong investment income growth and the robust performance of the Segregated Portfolio Cell Reinsurance segment.
PRA’s Q3 Operational Update
Gross premiums written fell 5.7% year over year to $290.4 million, which fell short of our estimate of $301.9 million. Net premiums earned of $233.4 million tumbled 4% year over year. Yet, the reported figure outpaced the Zacks Consensus Estimate of $225 million but missed our estimate of $236.3 million.
Net investment income advanced 8.5% year over year to $40.4 million in the quarter under review on the back of improved average book yields. The metric beat the consensus mark of $39.2 million and our estimate of $39.3 million.
Total expenses came in at $275.2 million, which increased 4.2% year over year and came higher than our estimate of $261.5 million. The year-over-year increase was due to higher net losses and loss adjustment expenses, and underwriting, policy acquisition and operating costs.
ProAssurance’s net income plunged 91.2% year over year to $1.4 million. The combined ratio of 114.7% deteriorated 910 bps year over year.
ProAssurance’s Segmental Update
Specialty P&C Segment
The segment recorded revenues of $181.8 million in the third quarter, which slipped 4.4% year over year. The metric marginally missed the Zacks Consensus Estimate of $183 million and our estimate of $184.6 million. Net premiums earned decreased 4.2% year over year to $180.8 million, lower than the consensus mark of $182 million.
Total expenses came in at $200.3 million, which escalated 6.4% year over year. The unit incurred a loss of $18.5 million against the year-ago profit of $1.9 million. The combined ratio deteriorated 910 bps year over year to 109.1%.
Workers' Compensation Insurance Segment
Revenues in the segment fell 2.3% year over year to $41.4 million in the quarter under review. The metric marginally missed the Zacks Consensus Estimate of $42.5 million and our estimate of $42.8 million. Net premiums earned of $41 million declined 2% year over year, lower than the consensus mark of $42 million.
Total expenses dipped 0.1% year over year to $46.5 million. The unit incurred a loss of $5.1 million, wider than the prior-year quarter’s loss of $4.2 million. The combined ratio deteriorated 210 bps year over year to 113.5%.
Segregated Portfolio Cell Reinsurance Segment
The segment’s gross premiums written of $14.2 million improved 4.2% year over year and beat our estimate of $12.9 million. However, net premiums earned tumbled 7.8% year over year to $11.7 million, which beat the Zacks Consensus Estimate of $11.2 million and our estimate of $11.5 million.
Underwriting, policy acquisition and operating expenses amounted to $4.2 million in the third quarter, which inched up 0.3% year over year. The unit reported a quarterly profit of $924 million, which surged 66.5% year over year. The combined ratio improved 630 bps year over year to 88.3%.
Corporate Segment
Net investment income of the unit grew 8.5% year over year to $39.3 million and beat our estimate of $38.4 million.
Operating expenses of $7.8 million dropped 23.9% year over year. The unit’s profit climbed 49.1% year over year to $27.1 million. Interest expenses fell 8.1% year over year to $5.2 million.
PRA’s Financial Position (As of Sept. 30, 2025)
ProAssurance exited the third quarter with cash and cash equivalents of $54.5 million, which dipped 0.8% from the 2024-end level. Total investments were $4.4 billion, up 1.6% from the figure at 2024-end.
Total assets of $5.6 billion dipped 0.4% from the 2024-end level.
Debt less unamortized debt issuance costs amounted to $421.5 million, down 0.8% from the figure as of Dec. 31, 2024.
Total shareholders’ equity of $1.3 billion advanced 8.5% from the level at 2024-end.
Net cash used in operating activities amounted to $12.4 million for the first nine months of 2025, while the company used $10.5 million of net cash in operations in the prior-year comparable period.
Book value per share was $25.37 as of Sept. 30, 2025, which grew 8% from the 2024-end figure. Adjusted operating return on equity deteriorated 320 bps year over year to 2.4% in the quarter under review.
ProAssurance’s Share Repurchase Update
ProAssurance did not repurchase any common shares in the third 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 Sept. 30, 2025.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -10.2% due to these changes.
VGM Scores
Currently, ProAssurance has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. 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. It's no surprise ProAssurance has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
ProAssurance is part of the Zacks Insurance - Property and Casualty industry. Over the past month, CNA Financial (CNA - Free Report) , a stock from the same industry, has gained 3%. The company reported its results for the quarter ended September 2025 more than a month ago.
CNA Financial reported revenues of $3.43 billion in the last reported quarter, representing a year-over-year change of +6.3%. EPS of $1.50 for the same period compares with $1.08 a year ago.
CNA Financial is expected to post earnings of $1.10 per share for the current quarter, representing a year-over-year change of -12%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for CNA Financial. Also, the stock has a VGM Score of B.