Slide 1: Forward Looking Statements
Forward Looking Statements 1 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 pr
Slide 2: ProAssurance Corporate Profile
ProAssurance Corporate Profile Healthcare - centric specialty insurance writer Healthcare Professional Liability (HCPL) Only public company writing predominately HCPL Life sciences and medical device liability Workers' compensation Legal professional liability ProAssurance Mission Statement We Exist
Slide 3: Financial Results YTD
Financial Results YTD Our commentary on YTD 2014 results and updates on recent transactions and strategy
Slide 4: Strong Financial Results YTD in 2014
Strong Financial Results YTD in 2014 4 Gross Written Premiums up 42% year - over - year Driven by new workers’ compensation premium resulting from the acquisition of Eastern Alliance Insurance Group Return on Equity: 8.1% Shareholders’ Equity: $2.4 billion Up 66% since 2008 Book Value: $40.23 YTD in
Slide 5: YTD 2014 Income Statement Highlights
YTD 2014 Income Statement Highlights in millions, except per share data June 30 , Y - OVER - Y Change 2014 2013 Gross Premiums Written $ 405 $ 286 +42% Net Premiums Earned $ 348 $ 265 +31% Total Revenues $ 430 $ 366 +18% Net Losses & Loss Adjustment Expenses $ 188 $ 128 +47% Underwriting & Operating
Slide 6: YTD 2014 Balance Sheet Highlights
YTD 2014 Balance Sheet Highlights Split adjusted, in billions, except Book Value per share Shareholders’ Equity $ 2.4 $ 2.4 - 1% Total Investments 4.1 3.9 +5% Total Assets 5.4 5.2 +5% Policy Liabilities 2.6 2.4 +9% 6/30/14 12/31/13 CHANGE $1.42 $1.70 $1.86 $2.16 $2.27 $2.39 $2.36 2008 2009 2010 2011
Slide 7: Capital Discussion
Capital Discussion We focus on the creation of meaningful shareholder value through a disciplined approach to capital management
Slide 8: Strong Commitment to Capital Management
Strong Commitment to Capital Management Capital return at historic levels $53 mln in declared dividends in 2014 Quarterly dividend at $0.30/share Yield: Approximately 2.6% $157 mln spent YTD in 2014 to repurchase 3.5 mln shares $510 mln spent since 2007 $146 mln remaining in current authorization $1
Slide 9: Strong Capital Position and Minimal Debt
Strong Capital Position and Minimal Debt Committed to capital management R etaining capital needed for the market turn and M&A 11% 10% 6% 2% 3% 3% 2% 13% 16% 22% 25% 19% 14% 20% $- $0.5 $1.0 $1.5 $2.0 $2.5 YTD 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 $ in billions Debt E
Slide 10: The Payoff: Consistent Book Value Growth
$2.62 $3.85 $4.77 $6.24 $11.60 $15.75 $10.09 $8.34 $10.50 $16.08 $19.56 $24.32 $24.96 $27.46 $26.39 $30.30 $39.91 $42.19 $48.48 $45. 48 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 YTD '14 $1.84 $3.14 $4.28 $5.79 $6.96 $8.01 $9.39 $10.46 $12.30 $16.81 $19.35 $21.35 $26.30 $30
Slide 11: Focused on Shareholder Value
Focused on Shareholder Value Maintaining profitability and bottom line focus Continuing to grow book value per share Producing sustainable shareholder value 0.00 0.50 1.00 1.50 2.00 2.50 $- $10.00 $20.00 $30.00 $40.00 $50.00 Sep-91 Sep-92 Sep-93 Sep-94 Sep-95 Sep-96 Sep-97 Sep-98 Sep-99 Sep-00 Sep-0
Slide 12: Consolidated Operational Highlights
Consolidated Operational Highlights Our commentary on YTD 2014 results and updates on recent transactions and strategy
Slide 13: 2014 Acquired Eastern Insurance; Lloyd's Syndicate 1729 began
2014 Corporate Update 13 Acquired Eastern Insurance effective 1/1/14 Integration into ProAssurance well underway Significant contributions to Q1 results Lloyd’s Syndicate 1729 began operations on 1/1/14 Business on the books as planned All senior staffing arrangement complete Medmarc and IND well in
Slide 14: Strong Operational Results YTD in 2014
Strong Operational Results YTD in 2014 Combined Ratio: 84.2% (Avg Since 2009: 67.0%) Operating Ratio: 67.0% (Avg Since 2009: 42.0%) 69.1% 68.0% 52.5% 57.3% 70.6% 84.2% 38.8% 39.8% 27.6% 32.6% 46.1% 67.0% 2009 2010 2011 2012 2013 YTD 2014 Combined Ratio and Operating Ratio History Combined Ratio Oper
Slide 15: Consistent Approach to Reserves
Consistent Approach to Reserves Recognizing loss trends as they appear No change in long - term results No change in reserving philosophy or process Reserve Development History by Quarter by Year $16 $20 $19 $25 $40 $47 $53 $47 $20 $31 $37 $38 $50 $60 $39 $42 $25 $30 $43 $33 $52 $50 $49 44 104 109 1
Slide 16: Premium Distribution at June 30, 2014
Premium Distribution at June 30, 2014 2013 ProForma Premium: $726 mln YTD 2014 Premium: $405 mln Tail Premium Allocated by Line Physician & Dental 60.7% Ancillary Healthcare 5.1% Life Sciences & Med Tech 4.7% Hospitals & Facilities 3.6% Attorneys 3.8% Workers' Comp 21.8% Other 0.3% Physician & Denta
Slide 17: Eastern Insurance Transaction Update
Eastern Insurance Transaction Update Significant contributor to top line growth and bottom line profitability Expected cross selling opportunities are emerging Continues building the platform to serve the needs of larger integrated health systems and healthcare delivery organizations Workers’ compen
Slide 18: Lloyd's Syndicate Update
Lloyd’s Syndicate Update First policies underwritten January 1, 2014 $21 mln in gross premium written reported to date (reporting on a one - quarter lag) ProAssurance is providing 58% of underwriting capital Remaining capital from other corporates and private names ProAssurance has committed $77 mln
Slide 19: Opportunities and Strategies
Opportunities and Strategies ProAssurance is Evolving to Anticipate the Risks Facing an Increasingly Complex healthcare Delivery System
Slide 20: Healthcare Realities
Healthcare Realities American healthcare is wrestling with the question of cost vs. care — we can deliver more care than we can afford Restructuring is producing profound changes in healthcare Healthcare delivery is being pushed down to lower cost providers The Affordable Care Act (ACA) is creating
Slide 21: Insurance Marketplace Realities
Insurance Marketplace Realities 21 Insurance companies are awash in capital Pressure is mounting to “do something” with it M&A — the hunter vs. the hunted Chase market share with low prices but disastrous long - term consequences Appease investors with unwise capital - return strategies
Slide 22: The ProAssurance Realities
The ProAssurance Realities 22 Our long - term focus on financial strength is central to our overall strategy and success ProAssurance has always evolved ahead of the curve We have proven our ability to thrive across insurance cycles We have an unmatched combination of financial strength and deep exp
Slide 23: Positioned to Succeed
Positioned to Succeed 23 ProAssurance has the right combination of geographic scope, broad experience, and financial strength for success in the new world of healthcare liability Medical Protective National Recent Hospital Experience $780 Doctors Co National Limited Hospital Experience $736 MLMIC NY
Slide 24: Continuing Emphasis on Strategic M&A
Continuing Emphasis on Strategic M&A 24 Well known, seasoned acquirer with a successful track record 1. Purchased Company 2. Demutualization Original Companies OHIC HOSPITALS ONLY 2 1 1 1 1 1 1 1 1 1 1 3 4 4 1 4 3. Renewal Rights 4. Assumed Business 2 2 † 2 3 1 3 3 1 SERTA 2 PROFESSIONAL PROTECTIVE
Slide 25: Strategic Successes
Strategic Successes Leveraging our reach, expertise and financial strength $17 mln in annualized premium in the Certitude tm program in partnership with Ascension Health Active in Alabama, Florida , DC, Illinois, Indiana, Kansas, Maryland, Michigan, Texas and Wisconsin Insuring Ascension - affiliate
Slide 26: Strategic Opportunities: Alternative Risk
Strategic Opportunities 26 Alternative risk and self - insurance opportunities Captive insurance programs allow large, sophisticated healthcare and workers’ compensation customers to control their own insurance programs Eastern Re brings proven experience and expertise in establishing and operating
Slide 27: Strategic Opportunities: ProAssurance Risk Solutions
Strategic Opportunities 27 ProAssurance Risk Solutions sm Newly formed unit brings 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 organizations s
Slide 28: Strategic Opportunities Through Lloyd's Syndicate 1729
Strategic Opportunities Through Lloyd’s Syndicate 1729 is an investment opportunity with significant insurance benefits Potentially provides access to international medical professional liability opportunities Leverage Medmarc’s expertise to underwrite international medical technology and life scien
Slide 29: Strategic Opportunities Through Medmarc
Strategic Opportunities Through Medmarc Medmarc is a market - leader in medical products and life sciences liability Increasing presence in device and drug development by larger healthcare organizations Increasing globalization of testing and development efforts are a natural fit with Lloyd’s Syndic
Slide 30: Strategic Opportunities Through Mid-Continent
Strategic Opportunities Through Mid - Continent ProAssurance Mid - Continent Underwriters addresses the needs of ancillary healthcare providers This market is increasing rapidly as the push to reduce healthcare costs drives care through lower cost providers who are an important part of the healthcar
Slide 31: Key Investor Points
Key Investor Points 31 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
Slide 32: Segment Highlights
Segment Highlights We report results in three operational segments Specialty Property Casualty Insurance Workers’ Compensation Insurance Lloyd’s Syndicate 1729
Slide 33: Specialty P&C Financial Highlights
June 31, Y - OVER - Y Change 2014 2013 Gross Premiums Written $ 267 $ 286 - 7% Net Premiums Earned $ 251 $ 265 - 5% Total Revenues $ 254 $ 268 - 5% Net Losses & Loss Adjustment Expenses $ 128 $ 128 – Underwriting & Operating Expenses $ 67 $ 65 +3% Operating Result $ 59 $ 74 - 20% Specialty P&C Finan
Slide 34: Specialty P&C Gross Written Premium - YTD
Specialty P&C Gross Written Premium - YTD 34 $15.5 $20.9 $15.2 $11.5 $15.3 $16.3 $19.6 $16.0 $11.4 $17.1 Other healthcare providers Healthcare facilities Legal professionals Tail & other, professional liability Products liability 2013 2014 $193 $174 $208 $186 2013 2014 Physician 12-mo Physician 24-m
Slide 35: Strong Retention Despite Competition
Strong Retention Despite Competition Retention remains in line with recent quarters Continued underwriting vigilance is being used today to ensure future success Market share is important, but NOT as important as profitability 84% 85% 87% 90% 90% 89% 90% 88% 88% 2006 2007 2008 2009 2010 2011 2012 20
Slide 36: No Overall Change in HCPL Loss Trends
No Overall Change in HCPL Loss Trends Current accident year loss ratio adjustments have been minor — in either direction Minimal changes on renewed business 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 YTD 6/30/14 Annual 23% 28% 28% 19% 11% 3% -2% -6% -4% -2% -2% 0% -1% -1% Cumul
Slide 37: The Bottom Line Benefits of Strong Defense
The Bottom Line Benefits of Strong Defense Our ability and willingness to defend claims allows us to achieve better results 21% 32% 48% 42% 44% 18% 45% 28% 79% 68% 52% 58% 56% 82% 55% 72% 2006 2007 2008 2009 2010 2011 2012 2013 PRA Industry 63% 42% 37% 58% Source: Statutory Basis, A.M. Best Aggregat
Slide 38: ProAssurance Outperforms in HCPL
ProAssurance Outperforms in HCPL ProAssurance consistently outperforms in a volatile line of business 40% 60% 80% 100% 120% 140% 160% 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Calendar Year Combined Ratio 1991 - 2013 ProAssurance MPL Source: 1991 - 2012 A.M. Best Aggregates and Ave
Slide 39: Segment Highlights
Segment Highlights We repo rt results in three operational segments Specialty Property Casualty Insurance Workers’ Compensation In surance Lloyd’s Syndicate 1729
Slide 40: Workers' Compensation Highlights - YTD
June 30, Y - OVER - Y Change 2014 2013 Gross Premiums Written $ 121 ‒ - 7% Net Premiums Earned $ 94 ‒ - 6% Total Revenues $ 94 ‒ - 6% Net Losses & Loss Adjustment Expenses $ 59 Underwriting & Operating Expenses $ 31 ‒ +4% Segregated Cell Dividend Expense $ 3 ‒ Operating Results $ 2 ‒ - 27% Workers’
Slide 41: Consistent Profitability in Workers' Comp
Consistent Profitability in Workers' Comp 41 Historical Combined Ratio (1) 90.4% excluding intangible asset amortization and transaction - related and other one - time charges (1) 79.1% 65.6% 80.2% 87.7% 96.0% 89.7% 91.8% 93.0% 95.1% 90.4% 2006 2007 2008 2009 2010 2011 2012 2013 Q1 2014 2006 – 2013
Slide 42: How Eastern Differentiates
How Eastern Differentiates 42 Disciplined individual account underwriting with focus on rate adequacy in rural territories Understands market dynamics and regulatory concerns Use of local knowledge that has always differentiated ProAssurance
Slide 43: Eastern Business Profile
Eastern Business Profile 43 • Direct Written Premium of $198.7 Million for the Year Ended 12.31.13, and $182.9 Million for the Year Ended 12.31.12 • Direct Written Premium of $117.0 Million for the Six Months Ended 6.30.14 and $109.2 Million for the Six Months Ended 6.30.13 • Licensed – 30 states Of
Slide 44: Workers' Compensation Risk Diversification
Top 10 Classes (Traditional) Payroll Exposure as June 30, 2014 Exposure Base: PA, DE, MD, VA, NC, SC Workers' Compensation Risk Diversification Wide diversification by class code and market segment Over 600 Class Codes Actively Written 44 Retirement / Life Care Community 2.3% Physician / Dentists 9.
Slide 45: Broad Product Spectrum
Broad Product Spectrum 45 Guaranteed Cost 57.7% Alternative Markets 26.4% Policyholder Dividend 8.6% Deductible Plans 3.6% Retrospective Rating 3.7% Guaranteed Cost Policies Loss - Sensitive Dividend Plans Deductible Plans Retrospective Rating Plans Alternative Market Programs ParallelPay – “ Pay as
Slide 46: How Eastern Differentiates: Medical Cost Containment
How Eastern Differentiates Extensive medical cost containment strategies Average five - year medical cost inflation of 0.6% Proactive claims management Use of Compromise & Release where permitted by law Strategic use of return - to - wellness initiatives Use of a proactive, unique claims approach th
Slide 47: Workers' Comp Claim Closing Pattern: Traditional
Workers’ Comp Claim Closing Pattern: Traditional 47 Few claims remain open from older accident years Eastern is recognized as a short - tail writer of workers’ compensation insurance 63 201 364 535 590 570 684 591 716 774 884 947 1,061 1,146 1,142 846 1 3 3 2 3 5 9 16 24 75 139 463 0 200 400 600 800
Slide 48: Workers' Comp Claim Closing Pattern: Alternative
Workers’ Comp Claim Closing Pattern: Alternative 48 Few claims remain open from older accident years Eastern is recognized as a short - tail writer of workers’ compensation insurance 35 66 103 175 267 407 423 310 324 334 384 396 485 456 397 1 2 2 3 11 17 47 175 0 100 200 300 400 500 600 1999 2000 20
Slide 49: How Eastern Differentiates: Captive Solutions
How Eastern Differentiates Captive insurance solutions provided through Eastern Re Segregated cell company based in Cayman Opens additional business opportunities for healthcare professional liability business Strategic partnerships with select independent agencies that share philosophies on control
Slide 50: Segment Highlights
Segment Highlights We repo rt results in three operational segments Specialty Property Casualty Insurance Workers’ Compensation Insurance Lloyd’s Syndicate 1729
Slide 51: Lloyd's Syndicate 1729 - YTD
March 31, Y - OVER - Y Change 2014 2013 Gross Premiums Written $ 21 ‒ - 7% Net Premiums Earned $ 3 ‒ - 6% Total Revenues $ 3 ‒ - 6% Net Losses & Loss Adjustment Expenses $ 2 Underwriting & Operating Expenses $ 3 ‒ +4% Operating Results $ - 2 ‒ - 27% Lloyd’s Syndicate 1729 – YTD in millions, except r
Slide 52: Segment Highlights: Corporate
Segment Highlights Corporate U.S. investing activities Non - premium revenues Corporate expenses U. S. taxes
Slide 53: Corporate Segment Highlights - YTD
June 30, Y - OVER - Y Change 2014 2013 Investment income $ 59.8 $ 65.4 - 9% Equity in earnings (loss) of unconsolidated subsidiaries 2.5 - 3.2 >100% Net realized investment gains (losses) 15.8 35.2 - 55% Other income 1.0 0.8 +24% Operating expenses 3.6 7.1 - 48% Interest expense 7.1 0.8 >100% Income
Slide 54: Corporate Segment Financial Highlights - YTD
Corporate Segment Financial Highlights – YTD No change in overall investment result $5.7 million increase in Equity in Unconsolidated Subsidiaries $5.6 million reduction in investment income, primarily due to lower average balances on fixed income investments Net realized investment gains decreased
Slide 55: Additional Financial Detail
Additional Financial Detail
Slide 56: Capital Growth: 2008 - Q2 2014
Capital Growth: 2008 - Q21 2014 2008 2009 2010 2011 2012 2013 Q2 2014 Dividends (15,269) (192,466) (64,777) (35,534) Earnings 177,725 222,026 231,598 287,096 275,470 297,523 96,673 Employee Stock Transactions 11,673 7,205 6,147 6,855 7,780 9,261 5,507 Stock Issued 112,478 - - - - - - Treasury Stock
Slide 57: Inside ProAssurance's Balance Sheet
Inside ProAssurance’s Balance Sheet Cash & Investments: 80.6% Insurance Receivables 8.8% Goodwill & Intangible Assets: 5.9% Other Assets: 4.7% Retained Earnings: 38.5% Other Equity: 5.2% Reinsurance Payable & Other Liabilities: 9.3% Unearned Premiums: 6.7% Loss Reserves: 40.3% Assets: $5.4 bln Liabi
Slide 58: Inside ProAssurance's Income Statement - YTD
Inside ProAssurance’s Income Statement - YTD 58 Net Premiums Earned: 80.8% Net Realized Investment Gains: 3.7% Net Investment Income: 13.9% Other: 1.6% Net Income: 22.5% Provision for Income Taxes: 7.2% Underwriting, Policy Acquisitions, Operating and Interest Expenses: 26.5% Net Losses and Loss Adj
Slide 59: Book Value per Share History
Book Value per Share History 59 $21.35 $26.30 $30.17 $35.42 $36.85 $39.13 $40.23 $20.26 $24.04 $26.58 $31.93 $33.34 $35.64 $34.84 $20.80 $23.13 $25.29 $29.80 $30.98 $34.67 $33.44 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00 Book Value per Share Tangible Book Value per Share Tangible Book
Slide 60: Book Value per Share Components
Book Value per Share 60 Components June 30, 2014 December 31, 2013 Change Total Book Value $ 40.23 $ 39.13 $ 1.10 Less: Goodwill & Intangible Assets 5.39 3.49 1.90 Tangible Book Value $ 34.84 $ 35.64 $ (0.80) Less: Unrealized Gain / Loss 1.40 0.97 0.43 Tangible Book Value excl Unreal G/L $ 33.44 $ 3
Slide 61: Components of Return on Equity
6.1% 5.4% 3.1% - 3.2% - 0.3% Pre-Tax Underwriting Profit $71 Pre-Tax Investment Income $62 Non-Operating Gains $35 Taxes $(37) Interest & Intangibles $(3) 2013 Return on Equity: 11.1% YTD (excludes gain on acquisition) Components of Return on Equity 61 L ong - term ROE target: 12% - 14% 5.3% 5.3% 1.
Slide 62: Investment Portfolio Detail
Investment Portfolio Detail ProAssurance remains conservatively invested to ensure our ability to keep our long - term promise of insurance protection
Slide 63: 2014 Investment Developments
2014 Investment Developments Maintaining duration of approximately four years Book yield has stabilized 4.3% tax effective on a QTD and YTD basis Overall credit quality is stable at A+ 63 2014 Investment Strategy & Outlook Focusing on integration of Eastern Managing duration
Slide 64: ProAssurance: Q2 2014 Investment Profile
ProAssurance: Q2 2014 Investment Profile Fixed Income 79% Short Term (incl cash) 4% Equities & Equity Substitutes 16% BOLI 1% $4.1 Billion Overall Portfolio State & Muni 34% Corporate 45% Asset Backed 14% Govt & Agency 7% $ 3.3 Billion Fixed Income Portfolio Average duration: 3.6 years, down slightl
Slide 65: Portfolio Detail: Asset Backed
Other 10% Auto 10% Non Agency MBS 1% Agency MBS/CMBS 65% Non Agency CMBS 14% ProAssurance Portfolio Detail: Asset Backed 6/30/14 Subject to Rounding Asset Backed: $473 Million Weighted Average Rating: “ AAA” 65
Slide 66: Portfolio Detail: Corporate
Financials 30% Industrials 29% Utilities/ Energy 20% Other 1% Consumer Oriented 20% ProAssurance Portfolio Detail: Corporate Corporates: $ 1.5 Billion Weighted Average Rating: BBB+ Top 20 Banks/Financials: $ 211 million in millions JPM Chase $25 National Bank of Canada $10 GECC $17 NRUC $10 Goldman
Slide 67: Portfolio Detail: Municipals
General Obligation 27% Special Revenue 58% Prerefunded 15% ProAssurance Portfolio Detail: Municipals Municipals: $ 1.1 Billion Investment policy has always required investment grade rating prior to applying the effect of insurance Top 10 Municipal Holdings in millions State of Texas $14 Por t Author
Slide 68: Portfolio: Equities & Other
Equities 41% Alternative Equity & Debt 11% Real Estate LP 3% Private Equity 11% Convertible Bonds 5% Investment Grade Bond Fund 6% FHLB Stock 1% Tax Credits 22% ProAssurance Portfolio: Equities & Other 6/30/14 Equities & Other: $637 Million 5.5% TE Book Yield 13% TE IRR 68
Slide 69: Portfolio Detail: Various
ProAssurance Portfolio Detail: Various Govt MMF 87% Lloyd's 7% Prime MMF (Bermuda) 3% Treasury Bills 2% Other 1% Best Rating: A 7% Best Rating: A+ 58% Best Rating: A++ 35% Rated A1/P1 or better Money Markets: Moody’s: Aaa S&P: AAA Weighted average rating Moody’s: AA3 S&P: AA - A. M. Best: A+ Treasur
Slide 70: Additional Details
Additional Details Py PROASSURANCE,
Slide 71: Now Reporting in Four Segments
Now Reporting in Four Segments 71 • Healthcare Professional Liability • Products Liability • Lawyers’ Professional Liability Specialty P&C • Traditional • Captive Market Facility Workers’ Compensation • Syndicate 1729 (58%) (including investments & taxes) Lloyd’s • PRA Corp – parent company • Intern
Slide 72: Condensed Results by Segment YTD 2014
Condensed Results by Segment YTD 2014 72 Specialty P&C Workers' Comp Lloyd's Syndicate Corporate / Other Elimination 2014 Consol. 2013 Gross premiums written $ 266,597 $ 120,822 $ 20,707 $ - $ (2,802) $ 405,324 $ 286,025 Net premiums written $ 236,696 $ 110,697 $ 20,272 $ - $ - $ 367,665 $ 260,172 N
Slide 73: Condensed Results by Segment Q2 2014
Condensed Results by Segment Q2 2014 73 Specialty P&C Workers' Comp Lloyd's Syndicate Corporate / Other Elimination Q2 2014 Consol. Q2 2013 Gross premiums written $ 114,253 $ 54,893 $ 20,707 $ - $ (2,802) $ 187,051 $ 122,816 Net premiums written $ 98,245 $ 50,107 $ 20,272 $ - $ - $ 168,624 $ 110,120
Slide 74: Capital Management Priorities
Capital Management Priorities 74 The manner in which capital is used has an effect on financial ratings Conceptual Model of Projected A. M. Best BCAR Scores if Premiums Increase Surplus is Reduced Excess Capital vs. Excess Capacity “A+” Rating Threshold
Slide 75: ProAssurance Outperforms in Insurance
ProAssurance Outperforms in Insurance Source: A.M . Best Aggregates and Averages for Each Lines of Business and Period Selected 104.5% 100.2% 102.1% 107.1% 89.7% 86.6% 88.5% 72.8% 57.6% 89.2% 74.8% 61.5% 1991-2013 10-Year 5-Year Average Combined Ratio Overall P&C MPL PRA - MPL Only PRA - All Lines 7
Slide 76: Differentiate Through Claims Defense
Differentiate Through Claims Defense 76 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 impo
Slide 77: The Ohio Example: 2006 – 2012 Data
The Ohio Example: 2006 – 2012 Data Comprehensive, reliable data provided by the Ohio Department of Insurance Broad range of competitors and business approaches www.insurance.ohio.gov/Legal/Reports/Documents/Ohio2012MedicalProfessionalLiabilityClosedClaimReport.pdf 92% 75% 8% 25% ProAssurance All Oth
Slide 78: ProAssurance by the Numbers
ProAssurance by the Numbers 78 YTD 2014 Policyholders: 78,500 Physicians & Dentists 56.8% Ancillary Healthcare 12.6% Life Sciences/Medical Tech 1.5% Hospitals & Facilities 0.7% Attorneys 15.9% Workers' Compensation 11.5% Other 1.0% June 30, 2014
Slide 79: Proven management remains in place
Proven management remains in place — 13 years average tenure Average ProAssurance tenure through the VP level is 16 years; 25 years average industry experience Management and employees are invested, owning ~4 % of ProAssurance stock VP and above subject to ownership guidelines W. Stancil Starnes, JD