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ProAssurance (PRA) Q2 Earnings Beat Estimates, Improve Y/Y

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ProAssurance Corporation’s (PRA - Free Report) second-quarter 2018 operating earnings per share of 48 cents beat the Zacks Consensus Estimate by 26.3%. Moreover, the bottom line improved 20% year over year, mainly driven by growth in its three operating segments along with overall renewal pricing.

ProAssurance’s quarterly operating revenues grew 21% to $248 million from the prior-year quarter’s level on the back of higher premiums. Also, the top line surpassed the Zacks Consensus Estimate by 12.7%.

Quarterly Operational Update

Gross premiums written increased 17.8% year over year to $242 million, primarily banking on higher premiums across Specialty P&C Insurance, Lloyd's Syndicates and Workers' Compensation segments. Also, net premiums earned rose 18.3% year over year.

Net investment income dipped nearly 1.3% year over year to $22 million.

Total expenses escalated 22.4% year over year to $228.1 million. This rise in costs mainly stemmed from higher net loss and loss adjustment expenses as well as underwriting, policy acquisition and operating expenses.

Quarterly Segment Results

Specialty P&C Insurance Segment


Total revenues of $140 million surged 31.4% year over year.

Gross premiums written were $147 million, up 18.5% from the year-ago quarter’s figure.

Total expenses of $140 million mounted 36.4% year over year, primarily due to net loss and loss adjustment expenses.

Workers' Compensation Segment

Total revenues of $62 million rose 9.5% year over year courtesy of gross premiums written as well as net premiums earned.

Gross premiums written were $70 million, up 19.2% over the year-earlier period’s number.

Total expenses of $58 million increased 9.1 % year over year.

Lloyd's Syndicate Segment

Total revenues of $17 million declined 19.2% year over year.

Gross premiums written were $24 million, up 3.8% from the figure acquired in comparable quarter last year.

Total expenses of $20 million rose 16.7% year over year.

Corporate Segment

Total revenues of $31 million increased 33.4% year over year.

Operating expenses of $5.6 million decreased 27.5% over the year-ago quarter’s level. Interest expense of $3.9 million declined 4.5% year over year.

Financial Position

As of Jun 30, 2018, ProAssurance’s total investments were $3.3 billion, down 9% from the number registered at year-end 2017.

At second-quarter end, the company’s total assets were $4.5 billion, down 7% from the count at 2017 end.

As of Jun 30, 2018, the insurer’s shareholder equity dipped 1.3% to $1.5 billion from the tally as of Dec 31, 2017.

Share Repurchase & Dividend Update

The company did not buy back any shares in the reported quarter. As of Jul 31, 2018, it had approximately $110 million of shares available under its board-authorized stock repurchase program.

In May, the company’s board members approved a regular dividend of 31 cents, paid in July.

Notably, within a span of almost 11 years, the company has been able to return more than $2 billion to its shareholders through regular and special dividends.

Zacks Rank

ProAssurance carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Among other players from the insurance industry having already reported second-quarter earnings, the bottom line of The Progressive Corporation (PGR - Free Report) , MGIC Investment Corporation (MTG - Free Report) and RLI Corp. (RLI - Free Report) surpassed the respective Zacks Consensus Estimate.

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