Slide 1: Q3 2016 Investor Presentation
Q3 2016 Investor Presentation
Slide 2: 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 3: Key Discussion Points for Second Quarter 2016
Key Discussion Points for Second Quarter 2016 2 Overall premium growth Specialty P&C led the way ($116 mil, up 3.1% from Q2 2015) Growth in large physician groups, hospitals & facilities showcases our ability to succeed in an evolving environment $2.8 mil direct premium from cross - selling/licensin
Slide 4: Corporate Profile
Corporate Profile PROASSURANCE.
Slide 5: 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: ~$3.0 billion Shareho
Slide 6: ProAssurance Corporate Profile
ProAssurance Corporate Profile 5 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 Alternative r isk transfer (ART) Mark
Slide 7: ProAssurance Brand Profile
ProAssurance Brand Profile 6 Specialty P&C Workers’ Comp Healthcare Professional Liability Medical Technology & Life Sciences Products Liability Legal Professional Liability Alternative Risk Transfer
Slide 8: Mission, Vision and Values
Mission, Vision and Values 7 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 specialty companies, products,
Slide 9: Strategic Review
Strategic Review PROASSURANCE.
Slide 10: Key High-Level Strategies
Key High - Level Strategies 9 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
Slide 11: The Realities
The Realities 10 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 address rising costs No perfect model for healthcare deliver
Slide 12: ProAssurance's Path to Success
ProAssurance’s Path to Success 11 1976 - 1991 Building the Financial Foundation 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 tradi
Slide 13: ProAssurance is Positioned to Succeed in HCPL
ProAssurance is Positioned to Succeed in HCPL 12 ProAssurance has the right combination of geographic scope, broad experience, and financial strength for success in the new world of healthcare liability SNL 2015 Statutory Data, >50% HCPL, Direct Written Premiums >$80 million Doctors Co National Limi
Slide 14: Strategic Successes in the Evolving Market
Strategic Successes in the Evolving Market The Certitude tm program in partnership with Ascension Health Shared risk through quota share participation by Ascension’s captive on first $ 1M ~2,150 insured physicians ~$22.3 million inforce premium Active in AL, CT, D.C ., FL, IL, IN, KS, MD, MI, NY, OK
Slide 15: Addressing a Wide Spectrum of Risk Appetites
Addressing a Wide Spectrum of Risk Appetites 14 Cross - selling / Cross - licensing targets insureds in these classes for additional products and services Traditional Policies • Primarily agent - sold • Remains the majority of our business • Proven performance supports discipline pricing Transitiona
Slide 16: Emerging Strategic Opportunities
Emerging Strategic Opportunities 15 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 organizations seeking to
Slide 17: Leveraging Existing Expertise in New Ways
Leveraging Existing Expertise in New Ways 16 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 business can be written
Slide 18: YTD 2016 Income Statement Highlights
YTD 2016 Income Statement Highlights Strong results from a focused strategy in millions, except per share data Quarter Ended Six - Months Ended June 30, 2016 2015 2016 2015 Gross Premiums Written $ 195 $ 194 $ 416 $ 415 Net Investment Result $ 25 $ 30 $ 47 $ 59 Total Revenues $ 215 $ 203 $ 408 $ 411
Slide 19: Balance Sheet Highlights
Balance Sheet Highlights $1.26 $1.42 $1.70 $1.86 $2.16 $2.27 $2.39 $2.16 $1.96 $2.03 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q2 16 Shareholders’ Equity: 61% Increase Since 2007 Maintaining the financial strength required to keep our insurance promise 18 Book Value per share is affected by our c
Slide 20: The Payoff: Consistent Value Creation
BOOK VALUE + DIVIDENDS DECLARED Scorecard at 8/31/16 BV + Dividends CAGR Since Inception (Sep 1991) 2585% 14% Reflects all stock splits and includes all dividends in the year declared. Source: SNL The Payoff: Consistent Value Creation 19 3% 50% 146% 521% 247% 862% 983% 1484% 2012% 2500% 91 92 93 94
Slide 21: Capital Discussion
Capital Discussion We focus on the creation of meaningful shareholder value through a disciplined approach to capital management
Slide 22: Demonstrated Commitment to Capital Management
Demonstrated Commitment to Capital Management $35 million returned YTD 2016 $290 million capital returned in 2015 Buybacks balance share price vs. book value/share YTD 16: $2.1 mln / 44,500 shares 2015: $170 mln / 3.7 mln shares 2014: $ 222 mln / 4.9 mln shares Since 2007: $748 mln / 15.4 mln shares
Slide 23: Capital Growth and Total Capital Return
Capital Growth and Total Capital Return 22 A superb track record under the current senior management team ( Q2 2007 to Q2 2016) Shareholders Equity grown from $1.2 billion to $2.0 billion (61%) $1.4 billion returned to shareholders through share repurchase and dividends Additionally, $754 million de
Slide 24: Capital and Liquidity Decisions
Share repurchase at prices with a reasonable payback period Options for deploying remaining capital 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. Dividen
Slide 25: Subsidiary Dividends to Corporate
Subsidiary Dividends to Corporate 24 Primary source of liquidity Ordinary dividends permitted without regulatory approval Generally once per year/ subsidiary Amounts and criteria vary by domiciliary state Extraordinary dividends require regulatory approval Subsidiary capital requirements play a majo
Slide 26: Strong Capital Position and Minimal Debt
Strong Capital Position and Minimal Debt Committed to enhancing shareholder value through effective capital management R etaining capital needed for the market turn and M&A No Debt Prior to 2001 17% 18% 12% 10% 6% 2% 3% 3% 2% 13% $- $0.5 $1.0 $1.5 $2.0 $2.5 Q2 16 2015 2014 2013 2012 2011 2010 2009 2
Slide 27: Capital Management Priorities
Capital Management Priorities 26 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 28: Consolidated Operational Highlights
Consolidated Operational Highlights Our commentary on operational results and updates on recent transactions and strategy
Slide 29: Strong Operational Results
Strong Operational Results Lowest combined ratio of the top 100 Property & Casualty writers 2011 through 2014 * Second in 2009 and fourth in 2010 Combined ratio average 2009 - 2015: 70.0% Operating ratio average 2009 - 2015: 46.3% 69.1% 68.0% 52.5% 57.3% 70.6% 82.1% 90.5% 92.8% 38.8% 39.8% 27.6% 32.
Slide 30: Consistent Approach to Reserves
Consistent Approach to Reserves Recognizing loss trends as they appear No change in reserving philosophy or process 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 $43 $33 $52 $50 $49 $43 $36 $44 $104 $108 $138 $1
Slide 31: 2016 Premiums, Policyholders & Distribution
1 2 Physician & Dental 44.7% Ancillary Healthcare 3.1% Life Sciences & Med Tech 4.0% Hospitals & Facilities 5.8% Attorneys 3.5% Workers' Comp 31.1% Other 0.1% Lloyd's 7.7% Specialty P&C: 61% Policyholders at June 30, 2016: ~78,000 Physician & Dental 58.3% Ancillary Healthcare 10.9% Life Sciences & M
Slide 32: Reinsurance Programs
Reinsurance Programs Professional Liability Medical Technology & Life Sciences Workers' Compensation Reinsured Retention Coverage Offered up to Maximum Standard Policy Limits -------- 5% to 10% retained based on layer Coverage Offered up to Maximum Standard Policy Limits -------- 20% Retention s Cov
Slide 33: Eastern Insurance Update
Eastern Insurance Update 32 Challenging market — competition intensifying from large multi - line carriers Gross premiums down in the quarter Maintaining underwriting discipline Leading the charge in cross selling/licensing opportunities Claims success Just 23 claims open claims dating from 2008 and
Slide 34: Lloyd's Syndicate 1729 Update
Lloyd’s Syndicate 1729 Update 33 Meeting expectations for profitable underwriting No pressure to increase top line solely for the sake of growth Gross premiums essentially level with Q2 2015 Likely due to timing not a business issue Earned premiums grew 48% year - over - year Some premiums are earne
Slide 35: The ProAssurance Response
The ProAssurance Response 34 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 expe
Slide 36: Segment Highlights
Segment Highlights We report results in three operational segments Specialty Property Casualty Insurance Workers’ Compensation Insurance Lloyd’s Syndicate 1729
Slide 37: YTD 2016 Specialty P&C Financial Highlights
Quarter Ended Six Months Ended June 30 2016 2015 2016 2015 Gross Premiums Written $ 116 $ 113 $ 254 $ 256 Net Premiums Earned $ 108 $ 113 $ 219 $ 227 Total Revenues $ 110 $ 114 $ 222 $ 230 Net Losses & Loss Adjustment Expenses $ 62 $ 64 $ 133 $ 133 Underwriting & Operating Expenses $ 26 $ 27 $ 51 $
Slide 38: YTD 2016 Specialty P&C Gross Written Premium
YTD 2016 Specialty P&C Gross Written Premium 37 $24 $15 $14 $8 $17 $21 $15 $17 $10 $16 Healthcare facilities Other healthcare providers Legal professionals Tail & other, professional liability Products liability 2016 2015 $163 $159 $13 $17 $176 $176 YTD 16 YTD 15 Physician 12-mo Physician 24-mo $ in
Slide 39: Strong Retention Despite Competition
Strong Retention Despite Competition Retention remains strong Continued underwriting vigilance is being used today to ensure future success Market share is important, but NOT as important as profitability 85% 87% 90% 90% 89% 90% 89% 89% 89% 88% 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD 16 Yea
Slide 40: 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 2014 2015 YTD 16 Annual 23% 28% 28% 19% 11% 3% -2% -6% -4% -2% -2% 0% -1% 0% 0
Slide 41: Differentiate Through Claims Defense
Differentiate Through Claims Defense 40 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 42: The Ohio Example: 2006–2013 Data
The Ohio Example: 2006 – 2013 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/Ohio2013MedicalProfessionalLiabilityClosedClaimReport.pdf 92% 75% 8% 25% ProAssurance All Oth
Slide 43: The Bottom Line: Benefits of Strong Defense
On average, 29 points better than the industry The Bottom Line Benefits of Strong Defense Our ability and willingness to defend claims allows us to achieve better results 20.6% 21.1% 17.6% 16.2% 4.6% 14.0% 10.7% 21.9% 43.7% 23.1% 24.0% 20.6% 20.1% 17.1% 28.0% 27.3% 64.3% 44.2% 41.6% 36.8% 24.6% 31.1
Slide 44: ProAssurance Outperforms in HCPL
ProAssurance Outperforms in HCPL ProAssurance consistently outperforms in a volatile line of business 40% 60% 80% 100% 120% 140% 160% 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 Calendar Year Combined Ratio 1991 - 2014 ProAssurance MPL Source: 1991 - 2013 A.M. Best Aggreg
Slide 45: 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 46: YTD 2016 Workers' Compensation Financial Highlights
Quarter Ended Six - Months Ended June 30, 2016 2015 2016 2015 Gross Premiums Written $ 56.5 $ 58.3 $ 134.5 $ 134.2 Net Premiums Earned $ 55.1 $ 53.6 $ 109.5 $ 104.9 Total Revenues $ 55.2 $ 53.7 $ 110.1 $ 105.2 Net Losses & Loss Adjustment Expenses $ 34.7 $ 34.3 $ 69.7 $ 66.4 Underwriting & Operating
Slide 47: Consistent Profitability in Workers' Comp
79.1% 65.6% 80.2% 87.7% 96.0% 89.7% 91.8% 93.0% 96.0% 95.9% 94.9% 91.6% 94.3% 92.6% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD 16 Consistent Profitability in Workers' Comp 46 Historical Combined Ratio Average 88% since 2006 (1) excluding fair value adjustments, intangible asset amortizati
Slide 48: How Eastern Differentiates
How Eastern Differentiates 47 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 knowledge that has always dif
Slide 49: Eastern Business Profile
Eastern Business Profile 48 Offices Licensed and actively seeking business Licensed, accepting “border” business Eastern Re (Cayman) Licensed in 30 states Avoiding high - hazard states within the Eastern footprint
Slide 50: Workers' Compensation Risk Diversification
Workers' Compensation Risk Diversification Wide diversification by class code and market segment Almost 7,000 active policies in Traditional Programs Over 600 class c odes a ctively written 49 Physcians/Dentists 10.7% Nursing Homes Skilled 2.5% Hospital 6.3% Clerical / Office 15.7% Colleges/Schools
Slide 51: Workers' Compensation Risk Diversification
Physician / Dentists 3.6% Nursing Homes Skilled 4.0% Social Rehab Facilities 2.9% Retirement/Life Care Community 2.7% Clerical / Office 17.0% Colleges/Schools 6.9% Auto Dealers 6.3% Salesmen - Outside 5.8% Grocery Store - Retail 2.0% Restaurant 2.8% 13.2% Healthcare and Related Risks These are self
Slide 52: Broad Product Spectrum
Broad Product Spectrum Guaranteed Cost 50% INOVA (Alternative Markets) 31% Policyholder Dividend 10% Deductible Plans 4% Retrospective Rating 2% Assumed 3% Guaranteed Cost Policies Loss - Sensitive Dividend Plans Deductible Plans Retrospective Rating Plans Alternative Market Programs ParallelPay – “
Slide 53: How Eastern Differentiates
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 Proactive claims management Use of Compromise & Release where permitted by law
Slide 54: Workers' Comp Claim Closing Pattern: Traditional
Workers’ Comp Claim Closing Pattern: Traditional 53 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 364 536 590 570 687 591 717 776 889 953 1,076 1,177 1,231 1,254 1,126 806 0 0 0 3 0 2 2 3 4 7
Slide 55: Workers' Comp Claim Closing Pattern: Alternative
Workers’ Comp Claim Closing Pattern: Alternative 54 66 103 175 267 407 423 310 325 336 385 404 502 494 554 572 461 0 0 0 0 0 0 0 1 0 0 2 2 6 22 64 198 0 100 200 300 400 500 600 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Accident Years 2000 2001 2002 2003 2004 200
Slide 56: How Eastern Differentiates
How Eastern Differentiates Captive insurance solutions provided through Eastern Re Segregated cell company based in Cayman Successfully driving new business opportunities for healthcare professional liability business Strategic partnerships with select independent agencies that share philosophies on
Slide 57: Segment Highlights
Segment Highlights We repo rt results in three operational segments Specialty Property Casualty Insurance Workers’ Compensation Insurance Lloyd’s Syndicate 1729
Slide 58: Lloyd's Segment Highlights
Lloyd’s Segment Highlights Operations maturing as the Syndicate is fully staffed A highly - experienced healthcare professional liability underwriting team joined Syndicate 1729 in March 2016 Extensive experience in Canada, Australia, South America and Middle East 57
Slide 59: YTD 2016 Lloyd's Segment Financial Highlights
Quarter Ended Six - Months Ended June 30 2016 2015 2016 2015 Gross Premiums Written $ 25.0 $ 25.8 $ 31.9 $ 30.5 Net Premiums Earned $ 13.5 $ 9.1 $ 26 $ 14.9 Total Revenues $ 14.1 $ 9.3 $ 27 $ 15.8 Net Losses & Loss Adjustment Expenses $ 8.5 $ 5.6 $ 15 $ 9.6 Underwriting & Operating Expenses $ 5.2 $
Slide 60: Lloyd's Syndicate 1729: Business Detail
Lloyd’s Syndicate 1729: Business Detail Broad spread of risk Property is primarily US Full year casualty premium includes $13.8 million ceded by PRA/PICA (Podiatry) 59 For the six months reported June 30, 2016 $ in millions YTD 2016 Syndicate 1729 Gross Written Premium is $55.4 million ProAssurance
Slide 61: Segment Highlights: Corporate
Segment Highlights Corporate U.S. investing activities Non - premium revenues Corporate expenses U. S. taxes
Slide 62: YTD 2016 Corporate Segment Financial Highlights
Quarter Ended Six Months Ended March 31, 2016 2015 2016 2015 Investment income $ 24.2 $ 27.8 $ 49.4 $ 54.9 Equity in earnings (loss) of unconsolidated subsidiaries $ 0.4 $ 2.4 $ (3.3) $ 4.0 Net realized investment gains (losses) $ 10.9 $ (3.8) $ 2.6 $ 1.0 Operating expenses $ 8.2 $ 7.24 $ 15.7 $ 12.
Slide 63: Investment Portfolio Detail
Investment Portfolio Detail ProAssurance remains conservatively invested to ensure our ability to keep our long - term promise of insurance protection
Slide 64: 2016 Investment Strategy & Outlook
2016 Investment Strategy & Outlook 63 Continuing capital management activities are expected to reduce the size of the portfolio Maintaining optimum allocation remains paramount Requires ongoing re - allocation Ensures non - correlation of returns Duration management is also important We will not ext
Slide 65: ProAssurance Investment Profile
All as of 6/30/16 ProAssurance Investment Profile Fixed Income 73% Short Term (incl cash) 5% Equities & Equity Substitutes 20% BOLI 2% $3.8 Billion Overall Portfolio State & Muni 32% Corporate 48% Asset Backed 14% Govt & Agency 6% $2.8 Billion Fixed Income Portfolio (73% of Invested Assets) Average
Slide 66: Portfolio Detail: Asset Backed
Other (Primarily Auto & Credit Card) 26% CMBS 10% RMBS 64% ProAssurance Portfolio Detail: Asset Backed 6/30/16 Subject to Rounding $378 Million (14% of Fixed Income / 9% of Invested Assets) Weighted Average Rating: “ AAA” 65
Slide 67: Portfolio Detail: Corporate
Financials 30% Industrials 17% Utilities/ Energy 16% Other 1% Basic Materials 4% Technology 4% Communications 6% Consumer Oriented 22% ProAssurance Portfolio Detail: Corporate Corporates: $ 1.3 Billion (48% of Fixed Assets / 34 % of Invested Assets) Weighted Average Rating: A - Top 20 Banks/Financia
Slide 68: Portfolio Detail: Energy Exposure
Fixed Income $150 71% LP $24 11% Equities & Other $37 18% ProAssurance Portfolio Detail: Energy Exposure Energy Related Exposure: $212 Million 6/30/16 67 Total energy exposure is 6% of invested assets $ 123 million is investment grade 3.2% of invested assets $ 27 million of below investment grade bo
Slide 69: Portfolio Detail: Municipals
General Obligation 24% Special Revenue 64% Prerefunded 12% ProAssurance Portfolio Detail: Municipals Municipals: $912 Million (33% of Fixed Income / 24 % Invested Assets) Top 10 Municipal Holdings in millions Connecticut State Housing Authority $14 Omaha Public Power $13 San Antonio, Texas Electric
Slide 70: Portfolio: Equities & Other
Equities 35% Alternative Equity & Debt 15% Real Estate LP 4% Private Equity 14% Convertible Bonds 4% Other 1% Inflation Focused Bond Fund 11% Tax Credits 16% ProAssurance Portfolio: Equities & Other 6/30/2016 Equities & Other: $764 Million (20% of Invested Assets) 69
Slide 71: Additional Financial Detail
Additional Financial Detail
Slide 72: Tax Credit Impact on Operating Results
- $0.6 - $5.2 - $5.7 - $10.9 - $11.6 - $8.9 - $10.4 - $14.1 - $18.8 - $22.2 - $21.9 - $18.3 - $19.0 $1.0 $6.9 $12.0 $21.0 $22.0 $25.5 $30.7 $27.8 $25.3 $26.0 $25.1 $19.7 $11.5 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Pre-Tax Losses Including Impairment Tax Credit Provision (R
Slide 73: Capital Growth: 2008–Q2 2016
Capital Growth: 2008‒Q2 2016 72 2008 2009 2010 2011 2012 2013 2014 2015 YTD '16* Stock Issued $ 112,478 ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ Employee Stock Transactions $ 11,673 $ 7,205 $ 6,147 $ 6,167 $ 7,780 $ 9,261 $ 11,246 $ 8,221 $ 5,027 Earnings $ 177,725 $ 222,026 $ 231,598 $ 287,096 $ 275,470 $ 297,523 $ 196,565
Slide 74: Inside ProAssurance's Balance Sheet
Inside ProAssurance’s Balance Sheet Cash & Investments: 79.6% Insurance Receivables 10.8% Goodwill & Intangible Assets: 6.0% Other Assets: 3.6% Retained Earnings: 40.5% Other Equity: 0.2% Reinsurance Payable & Other Liabilities: 11.6% Unearned Premiums: 7.7% Loss Reserves: 40.0% Assets: $5.0 bln Lia
Slide 75: Inside ProAssurance's Income Statement
Inside ProAssurance’s Income Statement 74 Net Premiums Earned: 86.8% Net Realized Investment Gains (Losses): 0.6% Net Investment Income: 12.3% Other: 0.3% Net Income: 15.3% Provision for Income Taxes: 1.7% Underwriting, Policy Acquisitions, Operating and Interest Expenses: 29.6% Net Losses and Loss
Slide 76: Book Value per Share History
Book Value per Share History 75 $21.35 $26.30 $30.17 $35.42 $36.85 $39.13 $38.17 $36.88 $38.12 $20.26 $24.04 $26.58 $31.93 $33.34 $35.64 $32.66 $31.17 $32.50 $20.80 $23.13 $25.29 $29.80 $30.98 $34.67 $31.63 $30.72 $31.35 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 Book Va
Slide 77: Book Value per Share Components
Book Value per Share 76 Components 6/30/16 12/31/15 Change Total Book Value $ 38.12 $ 36.88 $ 1.24 Less: Goodwill & Intangible Assets 5.62 5.71 (0.09) Tangible Book Value $ 32.50 $ 31.17 $ 1.33 Less: Unrealized Gain / Loss 1.15 0.45 0.70 Tangible Book Value excl Unreal G/L $ 31.35 $ 30.72 $ 0.63 Est
Slide 78: Components of Return on Equity
3.4% 4.7% 0.3% - 0.7% - 1.4% Pre-Tax Underwriting Profit $34 Pre-Tax Investment Income $47 Non-Operating Gains $3 Taxes $(7) Interest & Intangibles $(15) 3.9% 5.6% 0.1% - 1.5% - 1.4% Pre-Tax Underwriting Profit $41 Pre-Tax Investment Income $59 Non-Operating Gains $1 Taxes $(16) Interest & Intangibl
Slide 79: Now Reporting in Four Segments
Now Reporting in Four Segments 78 • 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 80: Q2 2016 Condensed Results by Segment
Q2 2016 Condensed Results by Segment 79 Specialty P&C Workers' Comp Lloyd's Syndicate Corporate / Other Elimination 2016 2015 Gross premiums written $ 116,117 $ 56,463 $ 25,018 $ — $ (2,584 ) $ 195,014 $ 194,097 Net premiums written 99,860 51,991 19,618 — — 171,469 171,133 Net premiums earned 108,12
Slide 81: YTD 2016 Condensed Results by Segment
YTD 2016 Condensed Results by Segment 80 Specialty P&C Workers' Comp Lloyd's Syndicate Corporate / Other Elimination 2016 2015 Gross premiums written $ 254,363 $ 134,510 $ 31,914 $ — $ (5,239 ) $ 415,548 $ 415,438 Net premiums written 219,522 121,542 26,233 — — 367,297 368,746 Net premiums earned 21
Slide 82: 2015 Condensed Results by Segment
2015 Condensed Results by Segment 81 Specialty P&C Workers' Comp Lloyd' s Syndicate Corporate / Other Elimination 2015 2014 Gross premiums written $ 526,296 $ 243,608 $ 56,929 $ — $ (14,615 ) $ 812,218 $ 779,609 Net premiums written 442,126 218,338 48,821 — — 709,285 701,849 Net premiums earned 443,