Proassurance Corporation · NYSE:PRA
Proassurance — Investor Presentation (May 2022)
39 slides from Proassurance's investor presentation, May 20, 2022
Slide 1: Investor Update First Quarter 2022
PROASSURANCE. Treated Fairly Investor Update First Quarter 2022 May
Slide 2: ProAssurance Overview
ProAssurance Overview
Slide 3: Mission, Vision, & Values
ProAssurance Investor Briefing | May 2022 3 Mission, Vision, & Values The ProAssurance Mission We exist to Protect Others. Corporate Values Integrity | Leadership | Relationships | Enthusiasm Our Brand Promise We will honor these values in the execution of treated fairly to perform our mission and r
Slide 4: At a Glance
ProAssurance Investor Briefing | May 2022 4 At a Glance All employee and financial data as of 3/31/22. Office locations and employee counts include NORCAL. Business Unit Principal Offices Employees Lines of Business HCPL 6 523 Healthcare professional liability Medmarc 1 29 Medical technology liabili
Slide 5: ProAssurance Executive Leadership
ProAssurance Investor Briefing | May 2022 5 ProAssurance Executive Leadership Ned Rand - President & Chief Executive Officer Mr. Rand became President and CEO in 2019, after serving as COO, CFO, Executive VP, and Senior VP of Finance at ProAssurance since joining the company in 2004. Prior to joinin
Slide 6: ProAssurance Board of Directors
ProAssurance Investor Briefing | May 2022 6 ProAssurance Board of Directors Director bios available on our website at Investor.ProAssurance.com/OD Maye Head Frei C M. James Gorrie N/C Ziad R. Haydar, MD C Edward L. Rand, Jr E Frank A. Spinosa, DPM N/C Katisha T. Vance, MD N/C A - Audit Committee C -
Slide 7: ProAssurance Brand Profile
ProAssurance Investor Briefing | May 2022 7 ProAssurance Brand Profile Specialty P&C Healthcare Professional Liability Workers’ Comp Alternative Risk Transfer Medical Technology & Life Sciences Products Liability Legal Professional Liability
Slide 8: ProAssurance business lines overview
ProAssurance Investor Briefing | May 2022 8 ProAssurance Specialty Property & Casualty • Healthcare Professional Liability (HCPL) insures healthcare providers and facilities, including E&S coverages • Innovative Specialty Team (IST) insures podiatrists, chiropractors, dentists, and lawyers • Medmarc
Slide 9: Specialty Property & Casualty
ProAssurance Investor Briefing | May 2022 9 ProAssurance Specialty Property & Casualty Specialty Healthcare Life Sciences Innovative Specialty Team Standard Physicians Healthcare Professional Liability Insurance $210M $218M $42M$103M$130M $41M Each block represents $5 million of premium, rounded up
Slide 10: Workers' Compensation Insurance
ProAssurance Investor Briefing | May 2022 10 Disciplined individual account underwriting with focus on rate adequacy in rural territories • Guaranteed Cost Policies • Loss-Sensitive Dividend Plans • Deductible Plans • Retrospective Rating Plans • ParallelPay–“Pay as you Go” • Specialty Risk (high ha
Slide 11: Segregated Portfolio Cell Reinsurance
ProAssurance Investor Briefing | May 2022 11 Segregated Portfolio Cell Reinsurance ProAssurance Fronting Arrangement Agency Group or Association establishes a cell Underwriting Claims Administration Risk Management Reinsurance Audit Asset Management Services + Cell Rental Fees + Participation in pro
Slide 12: Lloyd's of London Syndicates
ProAssurance Investor Briefing | May 2022 12 Lloyd’s of London Syndicates ProAssurance Funds at Lloyd’s (FAL) $37.8 Million 1 Property Insurance (All Other - Mainly US) 29% Casualty (Mainly US) 25% Catastrophe Reinsurance (Excess of Loss) 13% Specialty 13% Facility (US) 7% General Liability (US) 4%
Slide 13: Financial Ratings & Balance Sheet Highlights
ProAssurance Investor Briefing | May 2022 13 • ProAssurance is recognized for our financial strength by top rating agencies • We maintain a balance sheet that ensures stability and security for our customers • Our conservative reserving philosophy enables success over the insurance cycles Financial
Slide 14: ProAssurance Leverage Update
ProAssurance Investor Briefing | May 2022 14 • $426 million debt at 3/31/2022 o $176M of Contribution Certificates from NORCAL acquisition o $250m 5.3% 10-year notes due 11/15/2023 • $250 million revolving credit facility, $50 million "accordion" option, no outstanding borrowing ProAssurance Leverag
Slide 15: Success in Competitive Markets
Success in Competitive Markets
Slide 16: A Foundation in Excellence
ProAssurance Investor Briefing | May 2022 16 A Foundation in Excellence “From our earliest days, we have operated with a strategy both responsive to near-term challenges and proactive to long-term opportunity.” -Ned Rand President & CEO Superior brand identity and reputation in the market Specializa
Slide 17: Executing our Strategy: 2021 Accomplishments
ProAssurance Investor Briefing | May 2022 17 Ex ec u ti n g o u r St ra te gy *NAIC Data †NAIC before purchase accounting All data as of 12/31/2021 Specialty Property & Casualty ➢ Closed our acquisition of the NORCAL Group ▪ Added ~$300 million* of business to our Standard Physicians line ▪ Added ~$
Slide 18: ProAssurance and NORCAL Group
@ PROASSURANCE =F NORCAL *) GROUP
Slide 19: Acquisition Created the #3 HCPL Insurer in the U.S.
ProAssurance Investor Briefing | May 2022 19 Physicians $647.3M Other HCP $98.3M Hospitals $46.2M Facilities $4.3M Physicians $299.5M Other HCP $89.4M Hospitals $45.8M Facilities $1.5M Physicians $347.8M Other HCP $8.9M Hospitals $0.4M Facilities $2.8M Source: 2020 NAIC filings for all MPL lines, fi
Slide 20: ProAssurance + NORCAL Competitive Position
ProAssurance Investor Briefing | May 2022 20 MPL Market Position Ranked in Top 3 (17 States, 7 new) Alabama Alaska Arizona California Delaware Illinois Indiana Kentucky Maryland Michigan Nevada Pennsylvania Tennessee Texas West Virginia Wisconsin Washington DC Ranked in Top Ten (29 states) Arkansas
Slide 21: ProAssurance's Proven History of Successful Acquisitions
ProAssurance Investor Briefing | May 2022 21 ProAssurance’s Proven History of Successful Acquisitions & 1995 Acquisition 1996 Acquisition OHiC 1994 Acquisition 1998 Demutualization/Merger Forms ProNational 1995 Acquisitions 1996 Acquisition 1999 Acquisition 2004 Hospital Renewal Rights Purchase 2005
Slide 22: Appendix
Appendix
Slide 23: Income Statement Highlights (3/31/22)
ProAssurance Investor Briefing | May 2022 23 Income Statement Highlights (3/31/22) Three Months Ended March 31 2022 2021 Gross Premiums Written $ 335.6 $ 224.7 Net Premiums Earned $ 265.7 $ 187.4 Net Investment Result $ 28.1 $ 21.8 Net Investment Gains (Losses) $ (13.5) $ 8.8 Total Revenues $ 283.1
Slide 24: Change in Capital + Net Investment Income Result
ProAssurance Investor Briefing | May 2022 24 Data shown in thousands YTD March 2022: Change in Capital + Net Investment Income Result 2022 Beginning Equity $1,428,387 Cumulative-effect adjustments — Employee Stock Transactions 493 Earnings (3,560) Dividends (2,702) Treasury Stock — Unrealized G/L (1
Slide 25: Specialty P&C Financial Highlights (3/31/22)
ProAssurance Investor Briefing | May 2022 25 Current Accident Year Net Loss Ratio 85.8 % 89.8 % Effect of Prior Accident Year Reserve Development (2.0%) (2.3%) Net Loss Ratio 83.8 % 87.5 % Underwriting Expense Ratio 21.7 % 22.8 % Combined Ratio 105.5 % 110.3 % Specialty P&C Financial Highlights (3/3
Slide 26: Workers' Compensation Insurance Financial Highlights
ProAssurance Investor Briefing | May 2022 26 Current Accident Year Net Loss Ratio 71.8 % 71.0 % Effect of Prior Accident Year Reserve Development (4.9%) (5.5%) Net Loss Ratio 66.9 % 65.5 % Underwriting Expense Ratio 32.0 % 30.7 % Combined Ratio 98.9 % 96.2 % Workers’ Compensation Insurance Financial
Slide 27: Segregated Portfolio Cell Reinsurance Financial Highlights
ProAssurance Investor Briefing | May 2022 27 Segregated Portfolio Cell Reinsurance Financial Highlights (3/31/22) Three Months Ended March 31 2022 2021 Gross Premiums Written $ 28,369 $ 25,151 Net Premiums Earned $ 19,314 $ 15,884 Net Investment Income $ 112 $ 221 Net Gains (Losses) $ (711) $ 987 Ot
Slide 28: Lloyd's Segment Financial Highlights
ProAssurance Investor Briefing | May 2022 28 Lloyd’s Segment Financial Highlights (3/31/22) Three Months Ended March 31 2022 2021 Gross Premiums Written $ 5.8 $ 14.1 Net Premiums Earned $ 7.7 $ 15.9 Total Revenues $ 7.7 $ 16.7 Net Losses & Loss Adjustment Expenses $ (4.8) $ (13.0) Underwriting, Poli
Slide 29: Corporate Segment Financial Highlights
ProAssurance Investor Briefing | May 2022 29 Corporate Segment Financial Highlights (3/31/22) Three Months Ended March 31 2022 2021 Net investment income $ 20.1 $ 14.1 Equity in earnings (loss) of unconsolidated subsidiaries $ 7.6 $ 6.8 Net investment gains (losses) $ (12.4) $ 8.0 Other Income $ 2.1
Slide 30: Investment Philosophy & Portfolio
ProAssurance Investor Briefing | May 2022 30 Corporate 50% Asset Backed 29% State & Muni 13% Govt & Agency 7% Fixed Trading 1% • We maintain a conservative, highly-liquid investment philosophy • Effective stewardship of capital ensures a position of financial strength through turbulent market cycles
Slide 31: Investment Strategy and 2022 Outlook
ProAssurance Investor Briefing | May 2022 31 Investment Strategy and 2022 Outlook • Duration management remains paramount ◦ We will not extend duration in search of incremental yield • Optimizing our allocations for better risk-adjusted returns ◦ Ensures non-correlation of returns • Effective stewar
Slide 32: Recent Investment Performance
ProAssurance Investor Briefing | May 2022 32 ProAssurance Recent Investment Performance Contribution to Returns 2018-2022 / PRA vs Benchmarks 2022 2021 2020 2019 2018 % of Assets PRA Benchmark % of Assets PRA Benchmark % of Assets PRA Benchmark % of Assets PRA Benchmark % of Assets PRA Benchmark Cor
Slide 33: Portfolio Detail: Asset Backed
ProAssurance Investor Briefing | May 2022 33 3/31/2022 Subject to rounding ProAssurance Portfolio Detail: Asset Backed Weighted Average Rating: “AA” Asset-Backed Securities: $1.1 Billion (29% of Fixed Income / 23% of Invested Assets) RMBS 38% Student Loans 1% Auto 10% Credit Cards 1% CLOs 2% Other 3
Slide 34: Portfolio Detail: Fixed-Trading
ProAssurance Investor Briefing | May 2022 34 3/31/2022 Subject to rounding ProAssurance Portfolio Detail: Fixed-Trading Weighted Average Rating: “AA” Fixed Maturities, Trading: $49 Million (1% of Fixed Income / 1% of Invested Assets) All Fixed Trading Securities are owned by Lloyd’s Syndicate 1729 A
Slide 35: Portfolio Detail: Municipals
ProAssurance Investor Briefing | May 2022 35 General Obligation 16% Pre-refunded 6% Special Revenue 78% 3/31/2022 Subject to rounding ProAssurance Portfolio Detail: Municipals Municipals: $492 Million (13% of Fixed Income / 10% Invested Assets) Weighted Average Rating: AA Top 10 Municipal Holdings i
Slide 36: Portfolio: Equities & Other
ProAssurance Investor Briefing | May 2022 36 3/31/2022 Subject to Rounding ProAssurance Portfolio: Equities & Other Common Equities 4% Private Equity 28% Private Credit 15% Real Estate LP 7% Other 1% Bond Funds 30% Convertible Bonds 15% Tax Credits 2% <1 Equities & Other: $629 Million (13% of Invest
Slide 37: Combined Tax Credits Portfolio Detail & Projections
ProAssurance Investor Briefing | May 2022 37 Combined Tax Credits Portfolio Detail & Projections Year Capital Contributions GAAP Income/(Loss) from Operations, Disposition & Impairment Total Credits Tax Provision after Operating Losses/Impairments and Tax Credits Impact on Earnings 2022 $ 283,415 (8
Slide 38: Forward Looking Statements Non-GAAP Measures
ProAssurance Investor Briefing | May 2022 38 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 actu
Slide 39: Contact
© ProAssurance Corporation. All rights reserved. MAILING ADDRESS: ProAssurance Corporation 100 Brookwood Place Birmingham, AL 35209 CONTACT: Jason Gingerich VP of Investor Relations 512.879.5101 JasonGingerich@ProAssurance.com