Proassurance Corporation · NYSE:PRA
Proassurance — NYSSA 2013 Insurance Conference
21 slides from Proassurance's conference presentation, Mar 18, 2013
Slide 1: NYSSA 2013 Insurance Conference
Investor Presentation NYSSA 2013 Insurance Conference New York Society of Security Analysts March 4, 2013 Investor Presentation NYSSA 2013 Insurance Conference W. Stancil Starnes Chairman and Chief Executive Officer Edward L. Rand, Jr. Chief Financial Officer Frank B. O’Neil Investor Relations Offic
Slide 2: Forward Looking Statements and Non-GAAP Measures
This presentation contains Forward Looking Statements and other information designed to convey our projections and expectations regarding future results. There are a number of factors which could cause our actual results to vary materially from those projected in this presentation. The principal ris
Slide 3: ProAssurance Financial & Strategy Overview
ProAssurance Financial & Strategy Overview Edward L. Rand, Jr. Chief Financial Officer
Slide 4: ProAssurance Corporate Profile
ProAssurance Corporate Profile Specialty liability insurance writer Healthcare Professional Liability (HCPL) Only “pure play” public company writing predominately HCPL Life sciences and medical devices Attorney’s professional liability Market Cap: ~$2.8 billion Shareholders’ Equity: $2.3 billion Tot
Slide 5: 2012 Highlights
2012 Highlights ROE of 12.4% Total Return of 13.5% Increased Book Value per Share for the 21 st straight year Significant capital management actions $2.50 per share Special Dividend, post 2:1 split Dividend payout ratio doubled, now ~2.1% 1 Two transactions that extend our insurance scope and deepen
Slide 6: 2012 Income Statement Highlights
2012 Income Statement Highlights in millions, except per share data Gross Premiums Written $ 536 $ 566 -5% December 31, Y-OVER-Y 2012 2011 CHANGE
Slide 7: Five year Premium History
Five year Premium History Disciplined Underwriting Consistently writing profitable business to ensure long-term success Premium decline driven by competition and a benign loss environment that is unprecedented in our line of business Gross Premiums Written Net Premiums Earned
Slide 8: 2012 Income Statement Highlights
2012 Income Statement Highlights in millions, except per share data Gross Premiums Written $ 536 $ 566 -5% Net Investment Result 129 132 -2% December 31, Y-OVER-Y 2012 2011 CHANGE
Slide 9: $3.9 Billion Portfolio
$3.9 Billion Portfolio Fixed Income: 88% Short Term: 2% Equity and Equity Substitutes: 9% BOLI: 1% Seeking Increased Yield But Balancing Risk We continue to focus on maintaining a high quality well diversified fixed income portfolio We are making incremental changes to obtain higher yields in blue c
Slide 10: 2012 Balance Sheet Highlights
Shareholders’ Equity 2012 Balance Sheet Highlights Split adjusted, in billions, except per share Shareholders’ Equity $ 2.3 $ 2.2 +5% Total Investments 3.9 4.1 -4% Total Assets 4.9 5.0 -2% Policy Liabilities 2.3 2.6 -10% December 31, Y-OVER-Y 2012 2011 CHANGE 81% increase since 2007 Book Value per S
Slide 11: 2012 Income Statement Highlights
2012 Income Statement Highlights in millions, except per share data Gross Premiums Written $ 536 $ 566 -5% Net Investment Result 129 132 -2% Total Expenses (Includes Loss Costs) 320 302 +6% Operating Income $ 257 $ 279 - 8% Net Income (Includes Realized Investment Gain & Losses) $ 275 $ 287 - 4% Dec
Slide 12: Reserve Development Drove Our Results
Reserve Development Drove Our Results Our 2012 loss ratio was again decreased by favorable reserve development Calendar Year Combined Ratio Calendar Year Combined Ratio 57.1%
Slide 13: Historical Financial Performance
Net Income Operating Income 1 Historical Financial Performance Our disciplined, long-term approach drives consistent profitability $ in millions. Excludes discontinued operations 1 Excludes the after-tax effects of net realized gains or losses in all periods, the effect of confidential settlements t
Slide 14: Share Repurchase History
Share Repurchase History Capital Management Priorities Preferred use is to support growth through M&A or new business We balance future needs with current market reality Regular dividend is $1.00/share ~2.1% yield based on 2/26/13 closing price Prudent share repurchase program $321 million spent to
Slide 15: The Payoff: Consistent Book Value Growth
Captures our focus on long-term excellence Increased every year we have been public The Payoff: Consistent Book Value Growth Inception to 12/31/12 CAGR: 16% Cumulative: 2,092% 10 Year Summary (2002 -2012) CAGR: 17% Cumulative: 360% Historical Book Value Per Share Split Adjusted Dividends Shown in th
Slide 16: The Payoff: Steady Share Price Increase
Share price reflects investor confidence in our business decisions and long-term strategy The Payoff: Steady Share Price Increase Historical Share Price Reflects all stock splits 2012 excludes $2.50/share special dividend Inception to 12/31/12 CAGR: 14% Cumulative: 1,510% 10 Year Summary (2002 -2012
Slide 17: Strategies for Future Success
Strategies for Future Success W. Stancil Starnes Chairman Chief Executive Officer
Slide 18: Building a Bridge to the Future
Building a Bridge to the Future Our core business is at a pivot point We are uniquely positioned to succeed by serving the emerging market and remaining legacy business Smaller competitors with less experience and capacity have decisions to make Legacy business is largely single-state, solo and smal
Slide 19: Building a Bridge to the Future
Building a Bridge to the Future Larger risks will demand sophisticated coverages that span the continuum of healthcare Broad healthcare liability experience is our foundation We added capacity & capability through M&A Example: Medmarc, PICA and Mid-Continent Home Healthcare Non-Traditional Delivery
Slide 20: ProAssurance Will Grow Prudently
ProAssurance Will Grow Prudently ProAssurance is a demonstrated leader in M&A We will broaden our lines of coverage as needed Healthcare-related Through prudent leverage of our expertise and the addition of specialized expertise The market will firm and we are prepared to grow organically Past histo
Slide 21: ProAssurance Will Perform
ProAssurance Will Perform Our core business requires the long-term focus that is our hallmark Execution of a disciplined but nimble approach to a demanding business builds value for shareholders and insureds Our ability to respond to new business and evolving opportunities is unmatched in our indust