Company Announcements

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Aug. 5, 2025-- ProAssurance Corporation (NYSE: PRA), an industry-leading specialty insurer with extensive expertise in medical professional liability, today reported net income of $21.9 million, or $0.42 per diluted share, and operating income⁽¹⁾ of $26.8 million, or $0.52 per diluted share, for the three months ended June 30, 2025. For the six months ended June 30, 2025, net income was $16.1 million, or $0.31 per diluted share, and operating income was $33.6 million, or $0.65 per diluted share.

Second Quarter Highlights⁽²⁾

• Second-quarter operating performance continues to demonstrate our continued progress toward premium rate levels appropriate for the challenging conditions in the medical professional liability and workers’ compensation markets. Net results were impacted by non-operating items totaling $4.8 million, which are discussed under “Reconciliation of Net Income (Loss) to Non-GAAP Operating Income (Loss)” on page 7.
• Stable net premiums written of $135.9 million for our Medical Professional Liability business, which makes up over 95% of the Specialty P&C segment, were offset by declines in the other business lines in the segment. Net premiums written for the Workers’ Compensation Insurance segment were up $1.4 million.
• Specialty P&C renewal premium increases of 10% this quarter are part of the cumulative premium change of more than 70% we have accomplished since 2018 in the medical professional liability market. Retention for the Specialty P&C segment was 81% for the second quarter of 2025, including 82% for our standard physicians Medical Professional Liability book of business. We continue to forgo renewal and new business opportunities when we believe they do not meet our expectation of rate adequacy in the current medical professional liability loss environment.
• Consolidated Non-GAAP combined ratio⁽¹⁾ improved 9.5 percentage points over the second quarter of 2024 as the Specialty P&C segment’s Non-GAAP combined ratio⁽¹⁾ improved 11.6 percentage points over the prior year, largely due to the effect of favorable prior year reserve development.
• Consolidated net investment income increased 6%, reflecting higher average book yields as well as an increase in average investment balances. Earnings from limited partnership investments (reported as equity in earnings of unconsolidated subsidiaries) reflected lower market valuations during the fourth quarter of 2024 and first quarter of 2025.
• Book value per share was $24.80 at June 30, 2025, up $1.31 from $23.49 at year-end 2024; Non-GAAP adjusted book value per share⁽¹⁾ was $27.07 compared with $26.86 at year end.

“Our history in medical professional liability has taught us that our focused efforts will be successful over the long-term in this cyclical market,” said Ned Rand, President and Chief Executive Officer of ProAssurance. “The quarter again illustrated benefits from our focus on ongoing actions to achieve sustained profitability, including price adequacy, disciplined underwriting and cost management, and we expect to see further progress in coming quarters.

“Joining forces with The Doctors Company through the transaction we announced in March will allow our organizations to continue to serve today’s healthcare providers with the necessary scale and breadth of capabilities. On June 24, ProAssurance stockholders overwhelmingly approved the transaction, and on July 2 the Federal Trade Commission granted the transaction early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction remains subject to regulatory approvals by the insurance regulators in the domicile states (and District of Columbia) of ProAssurance’s insurance subsidiaries as well as other customary closing conditions, and is expected to close in the first half of 2026,” Rand said.

NON-GAAP FINANCIAL MEASURES
Non-GAAP Operating Income (Loss)
Non-GAAP operating income (loss) is a financial measure that is widely used to evaluate performance within the insurance sector. In calculating Non-GAAP operating income (loss), we have excluded the effects of the items listed in the following table that do not reflect normal results. We believe Non-GAAP operating income (loss) presents a useful view of the performance of our ongoing core insurance operations; however, it should be considered in conjunction with net income (loss) computed in accordance with GAAP. The following table is a reconciliation of net income (loss) to Non-GAAP operating income (loss):

Non-GAAP Adjusted Key Ratios
Certain key performance ratios include the impact of certain before-tax effects of items that do not reflect normal operating results, as discussed in the previous table. We believe adjusting our key ratios for these items presents a useful view of the performance of our ongoing core insurance operations; however, it should be considered in conjunction with ratios computed in accordance with GAAP.

Our consolidated key ratios for the three and six months ended June 30, 2025 and 2024 include the impact of net underwriting results related to non-core operations, guaranty fund assessments and transaction-related costs (see previous discussion on these items in the previous table). Non-core operations include $0.1 million of underwriting income in the 2025 three-month period and an underwriting loss of $1.2 million in the 2025 six-month period associated with our Lloyd's Syndicates operations as compared to underwriting income of $0.3 million and $1.1 million for the same respective periods of 2024. Also included in non-core operations are the underwriting results associated with our legal professional liability book of business which were nominal in amount for all periods presented.

The following table is a reconciliation of our consolidated key ratios to Non-GAAP adjusted key ratios for the three and six months ended June 30, 2025 and 2024:

Our Specialty P&C segment key ratios for the three and six months ended June 30, 2025 and 2024 include the impact of net underwriting results related to non-core operations, as previously discussed, and guaranty fund assessments.

The following table is a reconciliation of our Specialty P&C segment key ratios to Non-GAAP adjusted key ratios for the three and six months ended June 30, 2025 and 2024:

Non-GAAP Operating ROE
The following table is a reconciliation of ROE to Non-GAAP operating ROE for the three and six months ended June 30, 2025 and 2024:

Non-GAAP Adjusted Book Value per Share
The following table is a reconciliation of our book value per share to Non-GAAP adjusted book value per share at June 30, 2025 and December 31, 2024:

About ProAssurance

ProAssurance Corporation is an industry-leading specialty insurer with extensive expertise in medical professional liability and products liability for medical technology and life sciences. The Company also is a provider of workers’ compensation insurance in the eastern U.S. ProAssurance Group is rated “A” (Excellent) by AM Best.

For the latest on ProAssurance and its industry-leading suite of products and services, cutting-edge risk management and practice enhancement programs, visit our website at https://ProAssuranceGroup.com with investor content available at https://Investor.ProAssurance.com. Our YouTube channel regularly presents insightful videos that communicate effective practice management, patient safety and risk management strategies.

Forward-Looking Statements

The foregoing contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “hope,” “hopeful,” “likely,” "may," "optimistic," "possible," "potential," "preliminary," "project," "should," "will," “would” or the negative or plural of these words or similar expressions or variations. Forward-looking statements are made based upon management’s current expectations and beliefs and are not guarantees of future performance. Such forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. These factors include, among others: (i) the completion of the proposed transaction on the anticipated terms and timing, (ii) the satisfaction of other conditions to the completion of the proposed transaction, including obtaining required shareholder and regulatory approvals; (iii) the risk that ProAssurance Corporation’s stock price may fluctuate during the pendency of the proposed transaction and may decline if the proposed transaction is not completed; (iv) potential litigation relating to the proposed transaction that could be instituted against ProAssurance Corporation or its directors, managers or officers, including the effects of any outcomes related thereto; (v) the risk that disruptions from the proposed transaction will harm ProAssurance Corporation’s business, including current plans and operations, including during the pendency of the proposed transaction; (vi) the ability of ProAssurance Corporation to retain and hire key personnel; (vii) the diversion of management’s time and attention from ordinary course business operations to completion of the proposed transaction and integration matters; (viii) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed transaction; (ix) legislative, regulatory and economic developments; (x) potential business uncertainty, including changes to existing business relationships, during the pendency of the proposed transaction that could affect ProAssurance Corporation’s financial performance; (xi) certain restrictions during the pendency of the proposed transaction that may impact ProAssurance Corporation’s ability to pursue certain business opportunities or strategic transactions; (xii) unpredictability and severity of catastrophic events, including but not limited to acts of terrorism, outbreaks of war or hostilities or global pandemics, as well as management’s response to any of the aforementioned factors; (xiii) the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; (xiv) unexpected costs, liabilities or delays associated with the transaction; (xv) the response of competitors to the transaction; (xvi) the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction, including in circumstances requiring ProAssurance Corporation to pay a termination fee ; and (xvii) other risks set forth under the heading “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2024 and in our subsequent filings with the Securities and Exchange Commission. You should not rely upon forward-looking statements as predictions of future events. Our actual results could differ materially from the results described in or implied by such forward looking statements. Forward-looking statements speak only as of the date hereof, and, except as required by law, we undertake no obligation to update or revise these forward-looking statements.

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For More Information:
Heather J. Wietzel • SVP, Investor Relations
800-282-6242 • 205-776-3028 • InvestorRelations@ProAssurance.com

Source: ProAssurance Corporation