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ProAssurance Corporation’s (PRA - Free Report) third-quarter 2017 operating earnings per share of 45 cents surpassed the Zacks Consensus Estimate by 25%. The bottom line however, declined 2.2% year over year
QuarterlyOperational Update
ProAssurance’s third-quarter operating revenues rose 2% to $16.5 million from the prior-year quarter driven by higher premiums. The top line also surpassed the Zacks Consensus Estimate by 1.6%.
Gross premiums written grew 5.8% year over year to $245.5 million, primarily driven by the timing of certain policy renewals in Specialty P&C segment and by overall premium growth in Lloyd's Syndicate segment. Net premiums earned increased 3.8% from the prior-year quarter to $192.3 million.
Net investment income, however, decreased 6% year over year to $23.7 million.
Total expenses increased 7% year over year to $193 million. The rise in costs mainly stemmed from net losses and loss adjustment expenses as well as underwriting, policy acquisition and operating expenses.
Segment Results
Specialty P&C Insurance Segment
Total revenues of $119.6 million rose 2% year over year on the back of higher net premiums earned.
Gross premiums written were $166.3 million, up 6.7% from the year-ago quarter, primarily due to increased physician premiums.
Total expenses of $100.8 million jumped 1.9% year over year.
Workers' Compensation Segment
Total revenues of $57.8 million rose 5.9% year over year on the back of higher net premiums earned.
Gross premiums written were $59.7 million, 0.4% lower than the year-ago quarter, primarily due to a decrease in renewal pricing and audit premium.
Total expenses of $55.2 million rose 1.8% year over year.
Lloyd's Syndicate Segment
Total revenues of $14.9 million declined 5.3% year over year.
Gross premiums written were $21 million, up 10.6% from the year-ago quarter.
Total expenses of $27.2 million increased 54.8% year over year.
Corporate Segment
Total revenues of $36.2 million declined 2.8% year over year due to lower net investment income.
Interest expenses of $4.1 million jumped 10% year over year.
ProAssurance Corporation Price, Consensus and EPS Surprise
Net loss ratio remained flat year over year at 67.3%.
Expense ratio improved 40 basis points (bps) year over year to 29.7%.
Combined ratio deteriorated 320 bps from the year-ago quarter to 97%.
Operating ratio also deteriorated 450 bps to 84.7% from the year-earlier quarter.
Return on equity deteriorated 30 bps to 6.3% from the year-ago quarter.
Financial Position
As of Sep 30, 2017, ProAssurance’s total investments were $3.7 billion, down 5.1% from year-end 2016.
As of Sep 30, 2017, the company’s total assets were $4.9 billion, down 3% from year-end 2016.
As of Sep 30, 2017, the insurer’s shareholder equity was $1.8 billion, up 3% from Dec 31, 2016.
Book value per share increased 2.5% to $34.65 as of Sep 30, 2017 from $33.78 as of Dec 31, 2016.
Share Repurchase & Dividend Update
The company did not repurchase any shares during the first nine months of 2017. As of Oct 31, 2017, it had approximately $110 million available in its board-authorized stock repurchase program.
The company paid a dividend of 31 cents per share to its shareholders in October.
Zacks Rank
ProAssurance currently carries a Zacks Rank #4 (Sell).
Among other insurers that have reported their third-quarter earnings so far, Brown & Brown, Inc. (BRO - Free Report) , RLI Corp. (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) beat their respective Zacks Consensus Estimate.
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ProAssurance (PRA) Q3 Earnings & Revenues Beat Estimates
ProAssurance Corporation’s (PRA - Free Report) third-quarter 2017 operating earnings per share of 45 cents surpassed the Zacks Consensus Estimate by 25%. The bottom line however, declined 2.2% year over year
Quarterly Operational Update
ProAssurance’s third-quarter operating revenues rose 2% to $16.5 million from the prior-year quarter driven by higher premiums. The top line also surpassed the Zacks Consensus Estimate by 1.6%.
Gross premiums written grew 5.8% year over year to $245.5 million, primarily driven by the timing of certain policy renewals in Specialty P&C segment and by overall premium growth in Lloyd's Syndicate segment. Net premiums earned increased 3.8% from the prior-year quarter to $192.3 million.
Net investment income, however, decreased 6% year over year to $23.7 million.
Total expenses increased 7% year over year to $193 million. The rise in costs mainly stemmed from net losses and loss adjustment expenses as well as underwriting, policy acquisition and operating expenses.
Segment Results
Specialty P&C Insurance Segment
Total revenues of $119.6 million rose 2% year over year on the back of higher net premiums earned.
Gross premiums written were $166.3 million, up 6.7% from the year-ago quarter, primarily due to increased physician premiums.
Total expenses of $100.8 million jumped 1.9% year over year.
Workers' Compensation Segment
Total revenues of $57.8 million rose 5.9% year over year on the back of higher net premiums earned.
Gross premiums written were $59.7 million, 0.4% lower than the year-ago quarter, primarily due to a decrease in renewal pricing and audit premium.
Total expenses of $55.2 million rose 1.8% year over year.
Lloyd's Syndicate Segment
Total revenues of $14.9 million declined 5.3% year over year.
Gross premiums written were $21 million, up 10.6% from the year-ago quarter.
Total expenses of $27.2 million increased 54.8% year over year.
Corporate Segment
Total revenues of $36.2 million declined 2.8% year over year due to lower net investment income.
Interest expenses of $4.1 million jumped 10% year over year.
ProAssurance Corporation Price, Consensus and EPS Surprise
ProAssurance Corporation Price, Consensus and EPS Surprise | ProAssurance Corporation Quote
Financial Ratios
Net loss ratio remained flat year over year at 67.3%.
Expense ratio improved 40 basis points (bps) year over year to 29.7%.
Combined ratio deteriorated 320 bps from the year-ago quarter to 97%.
Operating ratio also deteriorated 450 bps to 84.7% from the year-earlier quarter.
Return on equity deteriorated 30 bps to 6.3% from the year-ago quarter.
Financial Position
As of Sep 30, 2017, ProAssurance’s total investments were $3.7 billion, down 5.1% from year-end 2016.
As of Sep 30, 2017, the company’s total assets were $4.9 billion, down 3% from year-end 2016.
As of Sep 30, 2017, the insurer’s shareholder equity was $1.8 billion, up 3% from Dec 31, 2016.
Book value per share increased 2.5% to $34.65 as of Sep 30, 2017 from $33.78 as of Dec 31, 2016.
Share Repurchase & Dividend Update
The company did not repurchase any shares during the first nine months of 2017. As of Oct 31, 2017, it had approximately $110 million available in its board-authorized stock repurchase program.
The company paid a dividend of 31 cents per share to its shareholders in October.
Zacks Rank
ProAssurance currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Performance of Other Insurers
Among other insurers that have reported their third-quarter earnings so far, Brown & Brown, Inc. (BRO - Free Report) , RLI Corp. (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) beat their respective Zacks Consensus Estimate.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>