Proassurance Corporation · NYSE:PRA
Proassurance — 2016 Insurance Conference
22 slides from Proassurance's conference presentation, Mar 16, 2015
Slide 1: 2016 Insurance Conference Investor Presentation
March 16, 2015 2016 Insurance Conference Investor Presentation W. Stancil Starnes Chairman & Chief Executive Officer Edward L. Rand, Jr . Executive Vice President & Chief Financial Officer
Slide 2: Forward Looking Statements; Non-GAAP Measures
F ORWARD L OOKING S TATEMENTS 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 p
Slide 3: ProAssurance Corporate Profile
ProAssurance Corporate Profile Healthcare - centric specialty liability insurance writer Healthcare Professional Liability (HCPL) Only public company writing predominately HCPL Workers' Compensation Life sciences and medical devices Attorney’s professional liability Market Cap: ~$2.9 billion Shareho
Slide 4: ProAssurance Corporate Profile: offices in three countries
ProAssurance Corporate Profile 35 offices in three countries Writing in 50 states & DC Emerging international business Employees: 960 Legal entities: 32 Corporate Headquarters Claims Offices Claims / Underwriting Offices Underwriting Offices Lloyds Business Unit # of Offices # of Employees (approx.)
Slide 5: 2014 Income Statement Highlights
2014 Income Statement Highlights Solid profitability in a challenging market in millions, except per share data December 31, Y - OVER - Y Change 2014 2013 Gross Premiums Written $ 780 $ 568 +37% Net Investment Result $ 130 $ 137 - 5% Total Revenues $ 852 $ 740 +15% Total Expenses (Includes Loss Cost
Slide 6: 2014 Balance Sheet Highlights
2014 Balance Sheet Highlights Split adjusted, in billions, except Book Value per share Shareholders’ Equity $ 2.2 $ 2.4 - 10 % Total Investments 4.0 3.9 + 2 % Total Assets 5.2 5.2 ̶ Policy Liabilities 2.4 2.4 + 2 % 2014 2013 CHANGE $ 1.15 $1.42 $1.70 $1.86 $2.16 $2.27 $ 2.39 $2.16 2007 2008 2009 201
Slide 7: Demonstrated Commitment to Capital Management
Demonstrated Commitment to Capital Management Capital return at historic levels – $443 million in 2014 Dividends Declared YTD: $15.2 mln 2014: $220.5 mln Quarterly dividend: $0.31/share Yield: Approximately 2.6% YTD Buyback: $46 mln 1.0 mln shares $ 136 mln authorized (3/15/15) 2014 Buyback: $222.4
Slide 8: Key Strategies
Key Strategies We provide insight into our strategies to succeed
Slide 9: We Are Responding to:
We Are Responding to: The evolution of healthcare How does consolidation into larger entities affect our ability to compete? Will the Affordable Care Act change the medical professional liability landscape? Our acquisition of Eastern Insurance Alliance Why workers’ compensation and why this workers’
Slide 10: The Evolution of Healthcare
The Evolution of Healthcare American healthcare is wrestling with the question of cost vs. care W e can deliver more care than we can afford Changes were certain even without the Affordable Care Act (ACA) Restructuring is producing profound changes in healthcare Larger entities are forming to harves
Slide 11: The ProAssurance Response
The ProAssurance Response 11 Our long - term focus on financial strength is central to our overall strategy and success ProAssurance has thrived across all insurance cycles We are building the platform that will allow us to serve the broad spectrum of healthcare Prudently leveraging our success and
Slide 12: The ProAssurance Response: Leveraging our reach, expertise and financial strength
The P roAssurance Response Leveraging our reach, expertise and financial strength $26 mln in annualized premium in the Certitude tm program in partnership with Ascension Health Insuring Ascension - affiliated physicians through coordinated, jointly insured programs Adding Ascension - employed physic
Slide 13: The ProAssurance Response: Alternative risk and self-insurance opportunities
The ProAssurance Response 13 Alternative risk and self - insurance opportunities Captive insurance programs allow large, sophisticated healthcare customers to control their own insurance programs for both professional liability and workers’ compensation Eastern Re brings proven experience and expert
Slide 14: The ProAssurance Response: New Products and Services
The ProAssurance Response 14 New Products and Services ProAssurance Risk Solutions sm Newly formed unit brings proven expertise to address complex risk financing challenges in both healthcare liability and workers’ compensation ProAssurance Complex Medicine ( ProCxM ) Targets larger entities with se
Slide 15: The Workers Compensation Question
The Workers Compensation Question The Eastern acquisition cements our commitment to medical professional liability We now can provide a single source for the two most difficult coverages bought by healthcare institutions This transaction is part of our push to become a larger force with the broker c
Slide 16: Consistent Profitability in Workers' Comp
Consistent Profitability in Workers' Comp 16 Historical Combined Ratio (1) excluding fair value adjustment and intangible asset amortization, transaction - related and other one - time charges ( 1 ) 79.1% 65.6% 80.2% 87.7% 96.0 % 89.7% 91.8% 93.0 % 96.0% 91.8% 2006 2007 2008 2009 2010 2011 2012 2013
Slide 17: Eastern Differentiates in Workers' Compensation
Eastern Differentiates in Workers’ Compensation 17 Disciplined individual account underwriting with focus on rate adequacy in rural territories Dedicated to effective claims management and returning injured workers to wellness Understands market dynamics and regulatory concerns Use of local knowledg
Slide 18: Eastern Differentiates in Workers' Compensation
Eastern Differentiates in Workers’ Compensation Extensive medical cost containment strategies Average five - year medical cost inflation of 0.6 % Use of a proactive, unique claims approach that has always differentiated ProAssurance Proactive claims management Use of Compromise & Release where permi
Slide 19: The Capital Question
The Capital Question Capital is a precious resource for us and our investors Highest use is investing in the business through M&A or strategic initiatives We have demonstrated our commitment to effective capital management 19
Slide 20: Capital Growth and Total Capital Return
Capital Growth and Total Capital Return 20 A superb track record under the current senior management team ( Q2 2007 to Q4 2014) Shareholders Equity grown from $1.15 billion to $ 2.16 billion (87%) Additionally, $1.1 billion returned to shareholders in the form of share repurchase and dividends Addit
Slide 21: Key Points
Key Points 21 ProAssurance has always evolved ahead of the curve in our industry — we continue that trend We have proven our ability to thrive across insurance cycles and produce significant returns for long - term shareholders Our long - term focus on financial strength and sustained value creation
Slide 22: 2016 Insurance Conference Investor Presentation
March 16, 2015 2016 Insurance Conference Investor Presentation W. Stancil Starnes Chairman & Chief Executive Officer Edward L. Rand, Jr . Executive Vice President & Chief Financial Officer