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ProAssurance's (PRA) Q2 Earnings Beat Mark, Increase Y/Y

ProAssurance Corporation  PRA reported second-quarter 2021 operating earnings of 49 cents per share, beating the Zacks Consensus Estimate of 6 cents by 716.7%. The company’s bottom line rebounded from the year-ago quarter’s loss of 60 cents per share, mainly on the back of higher premiums and solid segmental contributions.

Quarterly operating revenues of ProAssurance increased 14.1% to $259 million from the prior-year quarter’s level, mainly owing to improved premiums. The top line also beat the Zacks Consensus Estimate by 7.9%.

ProAssurance Corporation Price, Consensus and EPS Surprise

ProAssurance Corporation price-consensus-eps-surprise-chart | ProAssurance Corporation Quote

Quarterly Operational Update

Gross premiums written were up 12.7% year over year to $208.5 million mainly on the back of Specialty P&C Segment. Moreover, net premiums earned were up 15.3    % year over year to $238 million.

Net investment income fell 3.9% year over year to $17.4 million.

Net realized investment gains of the company were $10.8 million, which decreased 45.8% from the year-ago period’s level.

Total expenses declined 3.9% year over year to $267.5 million on the back of lower net losses and loss adjustment expenses, and SPC dividend income.

Combined ratio contracted 2170 basis points (bps) year over year to 108.4%.

Quarterly Segmental Results

Specialty P&C Insurance Segment

Total revenues of $170 million were up 32.7% from the prior-year quarter’s figure.

Gross premiums written rose 32.7% year over year to $142 million, mainly owing to the addition of NORCAL’s premium written.

Total expenses of $169 million decreased 8.5% year over year owing to lower net losses and loss adjustment expenses.

Combined ratio contracted 4520 basis points year over year to 100.2%.

Workers' Compensation Segment

Total revenues of $41.5 million were down 3.3% year over year.

Gross premiums written were $57.8 million, up 1.1% from the year-earlier period’s number, mainly owing to the change in retrospectively-rated policy adjustments and an increase in new business.

Total expenses of $40.4 million were down 3.4% year over year.

Combined ratio expanded 90 basis points year over year to 99.6%.

Lloyd's Syndicate Segment

Gross premiums written were $8.6 million, down 58.3% from the figure acquired in the comparable quarter of last year due to lower participation in Syndicates 1729 and 6131 for the 2021 underwriting year.

Combined ratio contracted 3210 basis points year over year to 75.5%.

Segregated Portfolio Cell Reinsurance Segment

Gross premiums written were $16 million, up 7.1% from the year-earlier quarter’s number, mainly owing to new business and a hike in payroll exposure on renewal business.

Combined ratio expanded 650 basis points year over year to 84.4%.

Corporate Segment

Net investment income of $16 million was flat year over year due to lower yields on short-term investments and corporate debt securities amid the low interest rate environment.

Operating expenses of $5.9 million decreased 23.6% from the prior-year quarter’s level. Interest expense of $5.1 million rose 39.4% year over year.

Financial Position (as of Jun 30, 2021)

ProAssurance’s total investments were $4.8 billion, up 43.7% from the number registered at 2020 end.

At second-quarter end, the company’s total assets were $6.3 billion, up 36.6% from the figure at 2020 end.

The insurer’s shareholder equity rose 5.6% to $1.4 billion from the figure as of Dec 31, 2020.

Return on equity was 9% against the year-ago quarter’s return on equity of (5%).

Book value was $26.38 per share, up 5.4% from the figure as of Dec 31, 2020.

Zacks Rank and Performance of Other Insurers

ProAssurance currently carries a Zacks Rank #3 (Hold). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other insurance industry players, which have reported second-quarter earnings so far, the bottom-line results of The Progressive Corporation PGR, RLI Corp. RLI and The Travelers Companies, Inc. TRV beat the respective Zacks Consensus Estimate.

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