Proassurance Corporation · NYSE:PRA
Proassurance — Investor Presentation (March 2017)
88 slides from Proassurance's investor presentation, Mar 6, 2017
Slide 1: ProAssurance Materials, March 2017
March 2017 ProAssurance Materials Filed as Exhibit 99.1 to Form 8K on March 6, 2017
Slide 2: Forward Looking Statements and Non-GAAP Measures
1 ProAssurance Investor Update Forward Looking Statements 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 t
Slide 3: Key Updates – March 2017
Key Updates – March 2017
Slide 4: Key Update: Strong Operational Results
3 ProAssurance Investor Update Key Update: Strong Operational Results Premium GROWTH of 2.8 % , despite a highly competitive marketplace Specialty P&C: +1.8% Workers' Compensation +1.8% Lloyd's Syndicate: +14.5 % New Business : $96 million (Specialty P&C + Workers' Compensation) Coordinated Sales Su
Slide 5: 2016 Return on Equity & Future Goals
4 ProAssurance Investor Update Key Updates: 2016 Return on Equity & Future Goals Revising ROE target to seven points above the ten - year Treasury rate (risk - free rate ) Prior long - term return target of 12% - 14% is unrealistic in the current interest rate environment Ten year treasury rate was
Slide 6: Components of Return on Equity
5 ProAssurance Investor Update Components of Return on Equity 6.0% 10.0% 11.5 9.2% 4.3% 5.0% 1.7% - 1.3% - 1.7% Pre-Tax Underwriting Profit $81 Pre-Tax Investment Income $94 Non-Operating Gains $33 Taxes $(25) Interest & Intangibles $(32) 2016 Return on Equity: 8.0% 3.9% 5.5% - 2.0% - 0.6% - 1.2% Pr
Slide 7: Key Updates: Capital Management
6 ProAssurance Investor Update Key Updates: Capital Management Special dividend of $4.69/per common share paid on January 9, 2017, alongside a regular dividend of $0.31/per common share for Q4 2016 Dividends declared in 2016 returned $315 million of capital to shareholders Underscores our commitment
Slide 8: Superb Track Record of Capital Management
7 ProAssurance Investor Update Superb Track Record of Capital Management Current Management Team's Tenure Began Q2 2007 At 3/1/17 | $ in 000's Year Dividends Declared* Share Repurchase Strategic Acquisitions Total* Special Regular 2007 ̶ ̶ $54,201 ̶ $54,201 2008 ̶ ̶ 87,561 ̶ 87,561 2009 ̶ ̶ 52,045 $
Slide 9: Capital and Liquidity Decisions
8 ProAssurance Investor Update Capital and Liquidity Decisions All decisions must recognize that we hold significant capital at the subsidiary level to maintain operating company ratings and satisfy regulatory requirements. Dividends from subsidiaries to the holding company are our primary source of
Slide 10: Subsidiary Dividends to Corporate
9 ProAssurance Investor Update $144 $149 $229 $150 $162 $56 $294 $311 $285 2016 2015 2014 Ordinary Extraordinary Subsidiary Dividends to Corporate Subsidiary Dividend History (in Millions) 2017 ORDINARY Dividend Capacity is $174 Million Ordinary dividends permitted without regulatory approval Amount
Slide 11: Long-Term Debt and Strong Capital Position
10 ProAssurance Investor Update $450 million long - term debt $250 million 10 - year notes due 11/15/2023 @ 5.30% Coupon Additional $100 million in secured borrowing from credit facility in December to fund dividend • Additional borrowing will be paid off as collateral matures • Collateral earning a
Slide 12: Capital Management Priorities
11 ProAssurance Investor Update Capital Management Priorities Conceptual Model of Projected A. M. Best BCAR Scores if Increase Premium Reduce Surplus “A+” Rating Threshold The manner in which capital is used has an effect on financial ratings Excess Capital vs. Excess Capacity
Slide 13: Corporate Profile
Corporate Profile
Slide 14: ProAssurance Corporate Profile
13 ProAssurance Investor Update ProAssurance Corporate Profile Healthcare - centric specialty insurance writer Healthcare Professional Liability (HCPL) • Only public company writing predominantly HCPL Life sciences and medical device liability Workers' compensation Legal professional liability Alter
Slide 15: ProAssurance Brand Profile
14 ProAssurance Investor Update ProAssurance Brand Profile Specialty P&C Healthcare Professional Liability Workers' Comp Alternative Risk Transfer Medical Technology & Life Sciences Products Liability Legal Professional Liability
Slide 16: Mission, Vision and Values
15 ProAssurance Investor Update Mission, Vision and Values Mission We exist to protect others. Vision We will be the best in the world at understanding and providing solutions for the risks our customers encounter as healers, innovators, employers, and professionals. Through an integrated family of
Slide 17: Consolidated Financial Highlights
Consolidated Financial Highlights Our commentary on consolidated operational results
Slide 18: 2016 Income Statement Highlights
17 ProAssurance Investor Update 2016 Income Statement Highlights Strong results from a focused strategy Three - Months Ended Year Ended December 31 2016 2015 2016 2015 Gross Premiums Written $187.5 $160.9 $835.0 $812.2 Net Investment Result $25.6 $ 26.3 $94.3 $112.3 Total Revenues $ 237.7 $ 185.9 $
Slide 19: Balance Sheet Highlights
18 ProAssurance Investor Update Balance Sheet Highlights Maintaining the financial strength required to keep our insurance promise while continuing to create value for our shareholders 2016 2015 2014 2013 Shareholders' Equity $1.8 $2.0 $2.2 $2.4 Total Investments $ 3.9 $3.7 $4.0 $3.9 Total Assets $
Slide 20: The Payoff: Consistent Value Creation
19 ProAssurance Investor Update The Payoff: Consistent Value Creation Reflects all stock splits and includes all dividends in the year declared. Source: SNL 52% 88% 160% 521% 229% 314% 671% 884% 941% 1095% 1698% 2040% 3052% 91 96 01 06 11 16 Scorecard at 2/28/17 Total Return CAGR Since Inception (Se
Slide 21: Consolidated Operational Highlights
Consolidated Operational Highlights Our commentary on our markets and strategy
Slide 22: Combined Ratio and Operating Ratio History
21 ProAssurance Investor Update Combined ratio average 2009 - 2016: 72.7% Operating ratio average 2009 - 2016: 50.2% Strong Operational Results / Consistent Profitability Combined Ratio and Operating Ratio History 69.1% 68.0% 52.5% 57.3% 70.6% 82.1% 90.5% 91.4% 38.8% 39.8% 27.6% 32.6% 46.1% 64.2% 74
Slide 23: Disciplined Approach to Reserves
22 ProAssurance Investor Update Recognizing loss trends as they appear No change in reserving philosophy or process Disciplined Approach to Reserves $ in millions Reserve Development History by Quarter by Year $16 $20 $19 $25 $40 $48 $53 $48 $34 $29 $20 $31 $37 $38 $50 $60 $39 $42 $35 $37 $25 $30 $4
Slide 24: 2016 Premiums, Policyholders & Distribution
23 ProAssurance Investor Update 2016 Premiums, Policyholders & Distribution All Data as of 12/31/2016 YTD Policyholder Count: ~ 77,000 2016 Gross Premium: $ 835 mln Physicians & Dentists 45% Ancillary Healthcare 3% Life Sciences/ Medical Tech 4% Hospitals & Facilities 8% Attorneys 3% Workers' Compen
Slide 25: Reinsurance Programs
24 ProAssurance Investor Update Reinsurance Programs Professional Liability Medical Technology & Life Sciences Workers' Compensation Retention Reinsured Coverage Offered up to $25 million -------- 5% to 12.5% retained based on layer Coverage Offered up to $9 million -------- 10% Retention s Coverage
Slide 26: Strategic Review
Strategic Review
Slide 27: Healthcare Costs are the Real Issue
26 ProAssurance Investor Update The question is cost vs. care — we can deliver more care than we can afford Restructuring is producing profound changes in healthcare The U.S. spends a greater proportion of GDP on healthcare and the percentage is increasing Reality: Healthcare Costs are the Real Issu
Slide 28: Traditional Practices are Fading
27 ProAssurance Investor Update The fork in the road for traditional HCPL companies Their core markets are disappearing and they do not have the financial size and capability to insure large, more complex risks Reality: Traditional Practices are Fading Source: 2016 Physicians Foundation Survey of Am
Slide 29: ProAssurance Can Meet the Challenges
28 ProAssurance Investor Update Reality: ProAssurance Can Meet the Challenges Healthcare Cost control remains the real driver of change in the delivery of care Care being pushed down to lower cost providers Current spending levels are unsustainable The Affordable Care Act is a sideshow that does not
Slide 30: Emerging Issues in Healthcare
29 ProAssurance Investor Update Emerging Issues in Healthcare Consolidation of providers into larger groups or within facilities/systems Evolution of new delivery systems to address cost pressures Multi - state expansion to achieve scale Challenges for HCPL Insurers Broker - driven purchasing requir
Slide 31: ProAssurance is Positioned to Succeed in HCPL
30 ProAssurance Investor Update ProAssurance has the right combination of geographic scope, broad experience, and financial strength for success in the new world of healthcare liability ProAssurance is Positioned to Succeed in HCPL Size & Scope of Top HCPL Writers SNL 2015 Statutory Data, >50% HCPL,
Slide 32: ProAssurance is Positioned to Succeed in HCPL
31 ProAssurance Investor Update ProAssurance is Positioned to Succeed in HCPL Our long - term focus on financial strength is central to our overall strategy and success We have proven our ability to thrive across insurance cycles We have an unmatched combination of financial strength and deep experi
Slide 33: Certitude Program with Ascension Health
32 ProAssurance Investor Update The Certitude tm program in partnership with Ascension Health Shared risk through quota share participation by Ascension's captive on first $1M ~ 2,400 insured physicians ~$25.6 million inforce Certitude direct premium Active in AL, CT, D.C., FL, IL, IN, KS, MD, MI, N
Slide 34: Addressing a Wide Spectrum of Risk Appetites
33 ProAssurance Investor Update Addressing a Wide Spectrum of Risk Appetites Traditional Policies Primarily agent - sold or direct Remains the majority of our business Proven performance supports discipline pricing Transitional Risk sharing/high deductible programs control cost and build “sticky” bu
Slide 35: Emerging Strategic Opportunities
34 ProAssurance Investor Update Emerging Strategic Opportunities ProAssurance Risk Solutions sm Proven expertise to address complex risk financing challenges in both healthcare and workers' compensation Run - off liabilities in M&A transactions Assumption of existing reserve liabilities for large or
Slide 36: Leveraging Existing Expertise in New Ways
35 ProAssurance Investor Update Leveraging Existing Expertise in New Ways Syndicate 1729 at Lloyds Our 58% participation provides potential access to international medical professional liability opportunities Increases flexibility for ProAssurance when working with complex risks Primary and excess b
Slide 37: Broad Experience Across the Healthcare Market
36 ProAssurance Investor Update More than 30 year of experience insuring hospitals and other healthcare facilities Experience ranges from community - based hospitals to major medical centers Enhanced coverages (ProControl) and existing programs respond to today's emerging trends Broad Experience Acr
Slide 38: Segment Highlights
Segment Highlights We report results in three operational segments: Specialty Property Casualty Insurance Workers' Compensation Insurance Lloyd's Syndicate 1729
Slide 39: 2016 Specialty P&C Financial Highlights
38 ProAssurance Investor Update 2016 Specialty P&C Financial Highlights Three - Months Ended Year Ended December 31 2016 2015 2016 2015 Gross Premiums Written $125.5 $109.6 $535.7 $526.3 Net Premiums Earned $ 122.7 $100.2 $457.8 $443.3 Total Revenues $ 124.0 $ 100.3 $463.1 $447.9 Net Losses & Loss A
Slide 40: 2016 Specialty P&C Gross Written Premium
39 ProAssurance Investor Update Total Gross Written Premiums increased $9.4M (1.8%) from $ 526.3 mln to $ 535.7 mln Physician new business of $32.8 mln, retention of 88% Facilities increase is due to new business of $17.4 mln; and an $11.8 mln one - time premium Legal professional liability decrease
Slide 41: Retention Remains Strong
40 ProAssurance Investor Update Retention remains strong Continued underwriting vigilance is being used today to ensure future success Market share is important, but NOT as important as profitability Strong Retention Despite Competition Year - over - Year Premium Retention – Physicians Trailing Four
Slide 42: No Overall Change in HCPL Loss Trends
41 ProAssurance Investor Update No Overall Change in HCPL Loss Trends PICA excluded to facilitate accurate comparisons over time Current accident year loss ratio adjustments have been minor — in either direction Minimal changes on renewed business MD/DO Charged Rate History 2001 2002 2003 2004 2005
Slide 43: Differentiate Through Claims Defense
42 ProAssurance Investor Update We leverage our financial strength to give our insureds the opportunity for an uncompromising defense of each claim Differentiates our product Provides long - term financial and marketing advantages Retains business and deters future lawsuits Increasingly important as
Slide 44: The Ohio Example: Claims Outcomes
43 ProAssurance Investor Update Comprehensive, reliable data provided by the Ohio Department of Insurance Broad range of competitors and business approaches The Ohio Example: 2005 – 2014 Data www.insurance.ohio.gov/Legal/Reports/Documents/Ohio2013MedicalProfessionalLiabilityClosedClaimReport.pdf Mor
Slide 45: Benefits of Strong Defense
44 ProAssurance Investor Update Source: 2008 - 2015, Statutory Basis, A.M. Best Aggregates & Averages 2014: Preliminary data from SNL The Bottom Line Benefits of Strong Defense Our ability and willingness to defend claims allows us to achieve better results ProAssurance Stand Alone Loss Ratio (2008
Slide 46: ProAssurance Outperforms in HCPL
45 ProAssurance Investor Update Source: 1991 - 2015 A.M. Best Aggregates and Averages, Medical Malpractice Lines of Business. Policyholder Dividends Included. ProAssurance Outperforms in HCPL ProAssurance consistently outperforms in a volatile line of business Calendar Year Combined Ratio 1991 - 201
Slide 47: ProAssurance Outperforms in Insurance
46 ProAssurance Investor Update Source: A.M. Best Aggregates and Averages for Each Line of Business (1991 - 2015) ProAssurance Outperforms in Insurance Average Combined Ratio 103.9% 99.7% 100.5% 106.7% 89.2% 95.0% 87.5% 68.3% 63.2% 88.5% 71.5% 67.2% 1991-2015 10-Year 2005-2015 5-Year 2010-2015 Overa
Slide 48: Segment Highlights
Segment Highlights We report results in three operational segments: Specialty Property Casualty Insurance Workers' Compensation Insurance Lloyd's Syndicate 1729
Slide 49: 2016 Workers' Compensation Financial Highlights
48 ProAssurance Investor Update 2016 Workers' Compensation Financial Highlights Three - Months Ended Year Ended December 31 2016 2015 2016 2015 Gross Premiums Written $53.5 $47.6 $247.9 $243.6 Net Premiums Earned $ 56.8 $53.7 $220.8 $213.2 Total Revenues $ 57.0 $ 53.9 $221.7 $213.7 Net Losses & Loss
Slide 50: Consistent Profitability in Workers' Comp
49 ProAssurance Investor Update (1) Excluding fair value adjustments, intangible asset amortization, transaction - related and other one - time charges. Consistent Profitability in Workers' Comp Historical Combined Ratio Average 88% since 2006 79.1% 65.6% 80.2% 87.7% 96.0% 89.7% 91.8% 93.0% 96.0% 95
Slide 51: How Eastern Differentiates
50 ProAssurance Investor Update How Eastern Differentiates Understands market dynamics and regulatory concerns Use of local knowledge that has always differentiated ProAssurance Disciplined individual account underwriting with focus on rate adequacy in rural territories Dedicated to effective claims
Slide 52: Eastern Business Profile
51 ProAssurance Investor Update Eastern Business Profile Licensed in 30 states Avoiding high - hazard states within the Eastern footprint Offices Licensed and actively seeking business Licensed, accepting “border” business Eastern Re (Cayman)
Slide 53: Workers' Compensation Risk Diversification: Traditional
52 ProAssurance Investor Update Wide diversification by class code and market segment Approximately 7,000 active policies in Traditional Programs Over 600 class codes actively written Workers' Compensation Risk Diversification Top 10 Classes (Traditional) Payroll Exposure as of December 31, 2016 Exp
Slide 54: Workers' Compensation Risk Diversification: Alternative
53 ProAssurance Investor Update These are self - insured, segregated portfolio cells within Eastern's alternative markets facility 2,800 active Inova ® policies Over 400 class codes actively written Workers' Compensation Risk Diversification Top 10 Classes (Alternative) Payroll Exposure as of Decemb
Slide 55: Broad Product Spectrum
54 ProAssurance Investor Update Guaranteed Cost Policies Loss - Sensitive Dividend Plans Deductible Plans Retrospective Rating Plans Alternative Market Programs ParallelPay – “Pay as you Go” TPA Services Claims Administration and Risk Management Broad Product Spectrum $248 Mln Gross Written Premium
Slide 56: How Eastern Differentiates
55 ProAssurance Investor Update How Eastern Differentiates Extensive medical cost containment strategies consistently updated and implemented as new trends emerge Ten - year weighted average implied medical inflation is 1.5 percent on an incurred basis Strategic use of return - to - wellness initiat
Slide 57: Workers' Comp Claim Closing Pattern: Traditional
56 ProAssurance Investor Update No claims open from 2002 and earlier Few claims remain open from other, older accident years Recognized as a short - tail writer of workers' compensation Workers' Comp Claim Closing Pattern: Traditional 12/31/16 364 536 590 570 687 591 717 778 890 953 1,076 1,181 1,24
Slide 58: Workers' Comp Claim Closing Pattern: Alternative
57 ProAssurance Investor Update No claims open from 2006 and earlier Few claims remain open from other, older accident years Recognized as a short - tail writer of workers' compensation Workers' Comp Claim Closing Pattern: Alternative 12/31/16 66 103 175 267 407 423 310 325 336 385 404 503 502 569 6
Slide 59: How Eastern Differentiates: Captives
58 ProAssurance Investor Update How Eastern Differentiates Captive insurance solutions provided through Eastern Re Value - added risk management services cements brand loyalty Strategic partnerships with select independent agencies that share philosophies on controlling workers' compensation costs S
Slide 60: Segment Highlights
Segment Highlights We report results in three operational segments: Specialty Property Casualty Insurance Workers' Compensation Insurance Lloyd's Syndicate 1729
Slide 61: Lloyd's Segment Highlights
60 ProAssurance Investor Update Lloyd's Segment Highlights Operations maturing as the Syndicate is more fully staffed Extensive experience in Canada, Australia, South America and Middle East A highly - experienced healthcare professional liability underwriting team joined Syndicate 1729 in March 201
Slide 62: 2016 Lloyd's Segment Financial Highlights
61 ProAssurance Investor Update 2016 Lloyd's Segment Financial Highlights Three - Months Ended Year Ended December 31 2016 2015 2016 2015 Gross Premiums Written $ 14.3 $ 10.0 $65.2 $56.9 Net Premiums Earned $ 14.1 $ 10.9 $54.7 $37.7 Total Revenues $ 14.8 $ 11.7 $57.6 $39.3 Net Losses & Loss Adjustme
Slide 63: Lloyd's Syndicate 1729: Business Detail
62 ProAssurance Investor Update Total 2016 Underwriting capacity: $111 million ProAssurance 57.6% share is $63.9 million Syndicate 1729 Gross Written Premium is $113.2 million ProAssurance 57.6% Share is $65.2 million Lloyd's Syndicate 1729: Business Detail For the twelve months reported December 31
Slide 64: Segment Highlights: Corporate
Segment Highlights Corporate U.S. investing activities Non - premium revenues Corporate expenses U.S. taxes
Slide 65: 2016 Corporate Segment Financial Highlights
64 ProAssurance Investor Update The decline in earnings from unconsolidated subsidiaries was primarily the result of an acceleration in the recognition of estimated partnership losses related to tax credit investments (see slides 74 & 75) Investment income continues to decline due to lower average b
Slide 66: Investment Portfolio Detail
Investment Portfolio Detail ProAssurance remains conservatively invested to ensure our ability to keep our long - term promise of insurance protection
Slide 67: 2016 Investment Review and 2017 Strategy
66 ProAssurance Investor Update Seeking better risk - adjusted returns Remaining sensitive to potential changes in tax rates 2016 Investment Review Duration management We will not extend duration in search of incremental yield Optimizing our allocation E nsures non - correlation of returns Continuin
Slide 68: ProAssurance Investment Profile
67 ProAssurance Investor Update 12/31/16 Full portfolio disclosure on our website: investor.proassurance.com/CustomPage/Index'KeyGenPage=305596 ProAssurance Investment Profile $ 2.6 Billion Fixed Income Portfolio (67% of Invested Assets) $ 3.9 Billion Overall Portfolio Sources of Liquidity State & M
Slide 69: Portfolio Detail: Asset Backed
68 ProAssurance Investor Update 12/31/16 Subject to Rounding ProAssurance Portfolio Detail: Asset Backed $357 Million ( 14% of Fixed Income/9% of Invested Assets) RMBS 61% Other (Primarily Auto & Credit Card) 30% CMBS 9% Weighted Average Rating: “AAA”
Slide 70: Portfolio Detail: Corporate
69 ProAssurance Investor Update 12/31/16 ProAssurance Portfolio Detail: Corporate Corporates: $1.3 Billion (49% of Fixed Assets/33% of Invested Assets) Top 20 Banks/Financials: $188 million in millions JPM $22 NRUC $9 Goldman $15 Simon Property $9 Bank of America $15 HCP $7 PNC Bank $12 Digital Real
Slide 71: Portfolio Detail: Energy Exposure
70 ProAssurance Investor Update Total energy exposure is 5% of invested assets $106 million is investment grade 3.0% of invested assets $25 million of below investment grade bonds <1% of invested assets ProAssurance Portfolio Detail: Energy Exposure 12/31/16 Energy Related Exposure: $195 Million LP
Slide 72: Portfolio Detail: Municipals
71 ProAssurance Investor Update 12/31/16 ProAssurance Portfolio Detail: Municipals Municipals: $800 Million ( 31% of Fixed Income / 20% Invested Assets) General Obligation 20% Prerefunded 10% Special Revenue 70% Weighted Average Rating: AA Top 10 Municipal Holdings in millions Connecticut State Hous
Slide 73: Portfolio: Equities & Other
72 ProAssurance Investor Update 12/31/16 ProAssurance Portfolio: Equities & Other Equities & Other: $810 Million ( 21% of Invested Assets) Equities 36% Alternative Equity & Debt 16% Real Estate LP 5% Private Equity 14% Convertible Bonds 4% Other 2% Inflation Focused Bond Fund 9% Tax Credits 14%
Slide 74: Additional Financial Detail
Additional Financial Detail
Slide 75: Tax Credit Impact on Operating Results
74 ProAssurance Investor Update Tax Credit Impact on Operating Results Substantial tax benefits and amortization expenses - $0.8 - $5.6 - $6.2 - $10.0 - $10.7 - $10.3 - $24.8 - $23.1 - $20.0 - $21.3 - $21.1 - $15.7 - $7.3 - $3.2 - $1.3 $1.2 $7.7 $12.3 $20.8 $21.7 $26.0 $36.2 $33.8 $25.6 $25.7 $24.8
Slide 76: Combined Tax Credits Portfolio Detail & Projections
75 ProAssurance Investor Update Combined Tax Credits Portfolio Detail & Projections Year Capital Contributions GAAP Income/(Loss) from Operations, Disposition & Impairment Total Credits (Source IRR Schedule) Tax Provision after Impairment Impact on Earnings 2016 $ 8,701,852 $ (24,817,214) $ 27,549,1
Slide 77: Capital Growth: 2008–2016
76 ProAssurance Investor Update Capital Growth: 2008‒2016 2008 2009 2010 2011 2012 2013 2014 2015 2016 Stock Issued $ 112,478 ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ Employee Stock Transactions $ 11,673 $ 7,205 $ 6,147 $ 6,167 $ 7,780 $ 9,261 $ 11,246 $ 8,221 $ 12,857 Earnings $ 177,725 $ 222,026 $ 231,598 $ 287,096 $ 275,
Slide 78: Inside ProAssurance's Balance Sheet
77 ProAssurance Investor Update 12/31/16 Inside ProAssurance's Balance Sheet Cash & Investments 79.8% Insurance Receivables 10.7% Goodwill & Intangible Assets 5.8% Other Assets 3.7% Loss Reserves 39.4% Retained Earnings 36.0% Reinsurance Payable & Other Liabilities 17.7% Unearned Premiums 7.4 % Othe
Slide 79: Inside ProAssurance's Income Statement
78 ProAssurance Investor Update Inside ProAssurance's Income Statement Net Premiums Earned 84.3% Net Investment Income 11.5% Net Realized Investment Gains (Losses) 4.0% Other: 0.2% Net Losses and Loss Adjustment Expenses 50.9% Underwriting, Policy Acquisitions, Operating and Interest Expenses 28.8%
Slide 80: Book Value per Share History
79 ProAssurance Investor Update Book Value per Share History $21.35 $26.30 $30.17 $35.42 $36.85 $39.13 $38.17 $36.88 $33.78 $20.26 $24.04 $26.58 $31.93 $33.34 $35.64 $32.66 $31.17 $28.24 $20.80 $23.13 $25.29 $29.80 $30.98 $34.67 $31.63 $30.72 $27.91 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31
Slide 81: Book Value per Share Components
80 ProAssurance Investor Update Book Value per Share Components 12/31/16 12/31/15 Change Total Book Value $33.78 $36.88 $(3.10) Less: Goodwill & Intangible Assets 5.54 5.71 ( 0.17) Tangible Book Value $28.24 $31.17 $(2.93) Less: Unrealized Gain / Loss 0.33 0.45 $(0.12) Tangible Book Value excl Unrea
Slide 82: Ceded Premiums Written
81 ProAssurance Investor Update Ceded Premiums Written Year Ended 12/31/16 HCPL, incl Podiatry Products Lawyers 2016 2015 2016 2015 2016 2015 Gross written premium $ 476.8 $ 464.6 $ 33.3 $ 33.4 $ 25.6 $ 28.3 Ceded premiums 63.9 70.3 11.1 11.4 2.0 2.5 Net written premium 412.9 394.3 22.2 22.0 23.6 25
Slide 83: Net Investment Result
82 ProAssurance Investor Update Net Investment Result Excluding Capital Gains / (Losses) 12/31/16 12/31/15 Change Net Investment Income Fixed maturities $ 84,386 $ 96,315 $ (11,929 ) Equities 14,887 13,317 1,570 Short - term and Other investments 3,353 2,035 1,318 BOLI 2,008 2,053 (45 ) Investment f
Slide 84: Our Four Reporting Segments
83 ProAssurance Investor Update Our Four Reporting Segments ProAssurance Consolidated Specialty P&C Workers' Compensation Lloyd's Corporate / Other Healthcare Professional Liability Products Liability Lawyers' Professional Liability Traditional Captive Market Facility Syndicate 1729 (58%) (including
Slide 85: Q4 2016 Condensed Results by Segment
84 ProAssurance Investor Update Q4 2016 Condensed Results by Segment Fourth Quarter 2016 Specialty P&C Workers' Comp Lloyd's Syndicate Corporate / Other Elimination Q4 2016 Q4 2015 Gross premiums written $ 125,523 $ 53,520 $ 14,287 $ — $ (5,880 ) $ 187,450 $ 160,876 Net premiums written 104,172 47,5
Slide 86: 2016 Condensed Results by Segment
85 ProAssurance Investor Update 2016 Condensed Results by Segment Year Ended 12/31/16 Specialty P&C Workers' Comp Lloyd's Syndicate Corporate / Other Elimination Total YTD 2016 Total YTD 2015 Gross premiums written $ 535,725 $ 247,940 $ 65,157 $ — $ (13,808 ) $ 835,014 $ 812,218 Net premiums written
Slide 87: 2015 Condensed Results by Segment
86 ProAssurance Investor Update 2015 Condensed Results by Segment Specialty P&C Workers' Comp Lloyd' s Syndicate Corporate / Other Elimination Total for 2015 Total for 2014 Gross premiums written $ 526,296 $ 243,608 $ 56,929 $ — $ (14,615 ) $ 812,218 $ 779,609 Net premiums written 442,126 218,338 48
Slide 88: ProAssurance's Path to Success
87 ProAssurance Investor Update ProAssurance's Path to Success 1976 - 1991 Building financial strength Establishing a brand reputation for superior service Demutualized in 2001 1991 - 2012 Scope & size addressed by expansion through careful M&A and de novo expansion in traditional HCPL 2012 - 2016 A