Slide 1: March 22, 2016 Investor Conference Presentation
March 22, 2016 Investor Conference 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: 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: locations in three countries
ProAssurance Corporate Profile 40 locations in three countries Writing in 50 states & DC Emerging international business Employees: 960 Corporate Headquarters Claims Offices Claims / Underwriting Offices Underwriting Offices Lloyds Cayman Islands 3 Business Unit Principal Offices Employees Lines of
Slide 5: ProAssurance Brand Profile
ProAssurance Brand Profile 4 Specialty P&C Workers’ Comp Healthcare Professional Liability Medical Technology & Life Sciences Products Liability Legal Professional Liability Alternative Risk Transfer
Slide 6: Mission, Vision and Values
Mission, Vision and Values 5 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 7: Strategic Review
Strategic Review <a
Slide 8: Key High-Level Strategies
Key High - Level Strategies We have built a platform to address the challenges of the evolution of healthcare The creation of new delivery systems and entities is changing the competitive landscape in healthcare professional liability Financial strength and broad geographic reach are now simply “tab
Slide 9: The Reality of Healthcare
The Reality of Healthcare Healthcare cost is the main event. The Affordable Care Act is a side show America 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 U.S. spends a greater pr
Slide 10: The Reality of Insurance
The Reality of Insurance 9 Insurance companies are awash in capital Pressure is mounting to “do something” with it Chase market share with low prices but disastrous long - term consequences Appease investors or policyholders with unwise capital - return strategies M&A will emerge, but may be more cr
Slide 11: Establishing our Platform
Establishing our Platform 10 Early M&A built out our medical professional liability business by building scope and size We added capabilities through subsequent M&A PICA: podiatric and related specialties Medmarc: life sciences and medical technology ProAssurance Mid - Continent Underwriters: ancill
Slide 12: ProAssurance is Positioned to Succeed in HCPL
ProAssurance is Positioned to Succeed in HCPL 11 ProAssurance has the right combination of geographic scope, broad experience, and financial strength for success in the new world of healthcare liability Medical Protective (Main Berkshire HCPL) National Recent Hospital Experience $570 Doctors Co Nati
Slide 13: 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 ~ 1,800 insured risks $14.5 NPW in 2015 Active in Alabama, Connecticut , D.C ., Florida, Illinois, Indiana, Mich
Slide 14: Strategic Successes in an Evolving Market
Strategic Successes in an Evolving Market 13 Cross - selling / Cross - licensing is working Approximately $5.5 million of new business in 2015 $ 1 million in 2014 Alternative risk and self - insurance opportunities Allows large, sophisticated healthcare and workers’ compensation customers to control
Slide 15: Additional Strategic Opportunities
Additional Strategic Opportunities 14 Internal product expansion for insureds only — not available as a standalone product Cyber liability D&O — primarily for larger organizations Provider excess for entities accepting population - based payments ProAssurance Risk Solutions sm Proven expertise to ad
Slide 16: Strategic Opportunities for Workers Compensation
Strategic Opportunities for Workers Compensation 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 wi
Slide 17: Strategic Opportunities Through Lloyd's
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 18: 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 19: 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 20: Capital Management Strategies
Capital Management Strategies We focus on the creation of meaningful shareholder value through a disciplined approach to capital management
Slide 21: Our View of Capital and Our Commitment
Our View of Capital and Our Commitment Capital is a scarce resource to be managed with upmost care on behalf of those who entrust that capital to us A superb track record under the current senior management team ( Q2 2007 to 2015) Shareholders Equity grown from $1.2 billion to $2.0 billion (56%) $1.
Slide 22: How We Make Capital Decisions
Share repurchase at prices with a reasonable payback period Options for deploying remaining capital How We Make Capital Decisions 21 All decisions must recognize that we hold significant capital at the subsidiary level to maintain operating company ratings and satisfy regulatory requirements. Divide