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Dec 31, 2020
ProAssurance Q4 2020 Earnings Report
ProAssurance reported a net income of $14.3 million and a Non-GAAP operating income of $3.3 million for Q4 2020.
Key Takeaways
ProAssurance Corporation reported a net income of $14.3 million, or $0.27 per share, and Non-GAAP operating income of approximately $3.3 million, or $0.06 per share, for the quarter ended December 31, 2020. The results reflect improvements in underwriting results and strong performance from investments in LPs/LLCs.
Reported net income of approximately $14.3 million, or $0.27 per share, and Non-GAAP operating income of approximately $3.3 million, or $0.06 per share.
Non-GAAP operating income included strong performance from investments in LPs/LLCs and improvement in underwriting results from the re-underwriting and rate strengthening efforts in the Specialty Property & Casualty segment, and the restructuring efforts in the Specialty P&C and Workers’ Compensation Insurance segments.
Quarter-over-quarter improvement in consolidated results is also attributable to a lower net loss ratio in the Segregated Portfolio Cell Reinsurance segment, partially offset by a higher combined ratio in the Lloyd’s Syndicates segment driven by adverse prior year reserve development related to certain natural catastrophe losses.
Consolidated gross premiums written in the current quarter decreased due to strategy to strengthen rate levels in the Specialty P&C segment, decreased participation in Syndicate 1729, and competitive market conditions in the Workers’ Compensation Insurance and SPCR segments.
Forward Guidance
Management expects to close the NORCAL transaction in the second quarter of 2021, assuming all conditions are met.
Positive Outlook
- Anticipating to close the transaction in the second quarter of 2021.
- California Department of Insurance completed its review of NORCAL’s conversion documents.
- NORCAL will begin solicitation of policyholders to vote on the plan to convert from a mutual company to a stock company and to elect the form of payment they wish to receive if the conversion occurs.
- Policyholders who choose to take stock in the converted NORCAL company will then decide whether to sell their shares to ProAssurance pursuant to tender offer to acquire the company.
- Management is pleased with the work accomplished in the last twelve months.
Challenges Ahead
- Closing the transaction remains subject to an affirmative vote of the policyholders.
- Closing the transaction remains subject to final approval from the CDI after a public hearing scheduled for April 1.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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