Medical professional liability (MPL) specialist ProAssurance Corporation reported third-quarter net income of $16.4 million, or $0.32 per diluted share, with operating income reaching $17.3 million, or $0.34 per diluted share, for the period ending September 30, 2024.
In the specialty property & casualty (P&C) segment, the company achieved a combined ratio of 99.5%. Renewal pricing remained firm at 13%, with an 84% retention rate.
New business, however, was lower year-over-year at $8.3 million, as the company focused on maintaining rate adequacy. The segment saw a net favorable prior accident year reserve development of $19.7 million, which improved the net loss ratio by 10.5 percentage points.
Book value per share rose to $24.07, a $2.25 increase from the end of 2023, boosted by $37 million in net income and $77 million in after-tax unrealized gains on fixed maturity holdings.
The workers’ compensation insurance segment reported a 10-point improvement in its combined ratio for the quarter, driven by a lower calendar year net loss ratio. Retention remained steady at 82%, with net written premiums rising due to increased audit premiums.
New business totaled $3.3 million, down from $5.4 million in the same quarter last year. The segment’s current accident year net loss ratio of 77.0% marked a 4.3-point improvement from 2023’s full-year ratio. No prior accident year reserve adjustments were made this quarter, contrasting with significant reserve strengthening in the prior year due to unexpected loss trends.
In the segregated portfolio cell reinsurance segment, ProAssurance reported a profit of $0.6 million, down from $0.9 million in the prior year’s third quarter. The segment’s results reflected higher reported loss activity offset by favorable development on prior accident years.
The corporate segment contributed $18.2 million to quarterly earnings, with investment income benefiting from the current interest rate environment. Net investment income rose as reinvestments were made at an average rate of 5.2%, surpassing the consolidated average book yield of 3.6%. Investments in limited partnerships, reported with a one-quarter lag, also delivered strong returns.
Read More: ProAssurance adds two new directors to board
Ned Rand (pictured above), president and CEO, noted that the quarter’s operating results reflected the “impact of the actions we have taken over the past several years,” highlighting the specialty P&C segment’s combined ratio and reserve development.
He attributed the 13% renewal premium increases to cumulative gains of 65% since 2018, part of ProAssurance’s strategy to outpace severity trends in the medical professional liability space.
“Our long history in the insurance markets we serve makes us confident that these cyclical lines will respond to our focused efforts. However, current market conditions continue to be a headwind that make it prudent to shrink in some markets to help us reach our target for long-term sustained profitability across all business segments, before turning our focus to growth,” Rand said.
What are your thoughts on this story? Please feel free to share your comments below.
