Slide 1: ProAssurance Treated Fairly
> PROASSURANCE. Treated Fairly
Slide 2: Table of Contents
1 ProAssurance Investor Briefing, March 2018 Table of Contents TOPIC PAGES Background For New Investors Key themes & topics ...................................... 2-5 Corporate profile & structure ......................... 6-10 Corporate history ........................................... 11 Executi
Slide 3: Key Themes and Topics of Importance
Key Themes and Topics of Importance March 2018
Slide 4: 2017 Highlights: Profitability
3 ProAssurance Investor Briefing, March 2018 2017 Highlights: Profitability Premium Growth in all operating segments Solid New Business Writing s Includes $16.3 million of new business from our coordinated sales & marketing efforts Broker submissions up 22% over 2016 — we are penetrating that target
Slide 5: Key Themes
4 ProAssurance Investor Briefing, March 2018 Key Themes Long Term Success Consistent & disciplined focus on profitability Demonstrated track record of value creation for shareholders Proven Strategy World class knowledge & expertise Superior brand identity and reputation in the market Broad range of
Slide 6: Key Topics and Reasons for Our Optimism
5 ProAssurance Investor Briefing, March 2018 Key Topics and Reasons for Our Optimism Capital Discussion Commitment to effective capital management continues to focus on enhancing shareholder value • Pages 14 - 17 Optimizing our capital to increase efficiency • Page : 19 Return on equity • Page
Slide 7: Corporate Update March 2018
Corporate Update March 2018
Slide 8: ProAssurance Corporate Profile
7 ProAssurance Investor Briefing, March 2018 ProAssurance Corporate Profile Healthcare - centric specialty insurance writer Healthcare Professional Liability (HCPL) • Only public company writing predominantly HCPL Life sciences and medical device liability Workers' compensation Legal profess
Slide 9: 2017 Premiums, Policyholders & Distribution
8 ProAssurance Investor Briefing, March 2018 2017 Premiums, Policyholders & Distribution All Data as of 12/31/2017 YTD Policyholder Count: ~ 73,500 201 7 Gross Premium: $ 875 mln Physicians & Dentists 46% Ancillary Healthcare 3% Life Sciences/ Medical Tech 4% Hospitals & Facilities 6% Attorneys 3% W
Slide 10: Our Four Reporting Segments
9 ProAssurance Investor Briefing, March 2018 Our Four Reporting Segments ProAssurance Consolidated Specialty P&C Workers’ Compensation Lloyd’s Corporate / Other Healthcare Professional Liability Products Liability Lawyers’ Professional Liability Traditional Captive Market Facility Syndicate 1729 (58
Slide 11: ProAssurance Brand Profile
10 ProAssurance Investor Briefing, March 2018 ProAssurance Brand Profile Specialty P&C Healthcare Professional Liability Workers’ Comp Alternative Risk Transfer Medical Technology & Life Sciences Products Liability Legal Professional Liability
Slide 12: ProAssurance's Path to Success
11 ProAssurance Investor Briefing, March 2018 ProAssurance’s Path to Success 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 traditional HCPL
Slide 13: Management is Experienced & Invested
12 ProAssurance Investor Briefing, March 2018 Management is Experienced & Invested Proven e xecutive management remains in place Officer/SVP: 16 years average tenure / 30 years average total industry experience VP level: 16 years average experience /29 years average total industry experience Per
Slide 14: Capital Management Discussion
Capital Management Discussion March 2018
Slide 15: Key Updates: Capital Management
14 ProAssurance Investor Briefing, March 2018 Key Updates: Capital Management Regular quarterly dividends of $0.31/per common share Special dividend of $4.69/per common share paid on January 10, 2018. Following an identical special dividend paid in January 2017. Dividends declared in 2017 returned $
Slide 16: Superb Track Record of Capital Management
15 ProAssurance Investor Briefing, March 2018 Superb Track Record of Capital Management Current Management Team’s Tenure Began Q2 2007 At 12/31/17 | $ in 000’s Year Dividends Declared Share Repurchase Strategic Acquisitions Total* Special Regular 2007 ࡳ ࡳ $54,201 ࡳ $54,201 2008 ࡳ ࡳ 87,561 ࡳ 87,561 2
Slide 17: Capital and Liquidity Decisions
16 ProAssurance Investor Briefing, March 2018 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. Dividends from subsidiaries to the holding company are our pr
Slide 18: Key Source of Capital: Subsidiary Dividends to Corporate
17 ProAssurance Investor Briefing, March 2018 $160 $144 $149 $229 $200 $150 $162 $56 $360 $294 $311 $285 2017 2016 2015 2014 Ordinary Extraordinary Key Source of Capital: Subsidiary Dividends to Corporate Subsidiary Dividend History (in Millions) 2018 ORDINARY Dividend Capacity $137 Million Ordinary
Slide 19: Capital Management Priorities
18 ProAssurance Investor Briefing, March 2018 Capital Management Priorities Conceptual Model of Projected A. M. Best BCAR Scores if Increase Premium Reduce Surplus “A+” Rating Threshold The manner in which capital is used has an effect on financial ratings Excess Capital vs. Excess Capacity
Slide 20: Strong Capital Position and Reasonable Debt Level
19 ProAssurance Investor Briefing, March 2018 $385 million debt at 2/28/18 $ 250.0 million 10 - year notes due 11/15/2023 5.30 % Coupon $95.0 million drawn on revolver (Fully Collateralized) at 2/28/18 $40.5 in office building mortgages Strong Capital Position and Reasonable Debt Level Ten -
Slide 21: Return on Equity Discussion
Return on Equity Discussion March 2018
Slide 22: Key Updates: Return on Equity & Future Goals
21 ProAssurance Investor Briefing, March 2018 Key Updates : Return on Equity & Future Goals Revising ROE target to seven points above the ten - year Treasury rate (risk - free rate ) Prior long - term return target of 12% - 14% is unrealistic in the current interest rate environment Ten year treasur
Slide 23: Components of Return on Equity
22 ProAssurance Investor Briefing, March 2018 Ten Year Average ROE (2008 - 2017) 10.7% Five Year Average ROE (2013 - 2017) 8.0% Components of Return on Equity 3.0% 6.1% 0.8% - 1.3% - 2.3% Pre-Tax Underwriting Profit $50 Pre-Tax Investment Result $104 Non-Operating Gains (Losses) $13 Taxes ($21) Inte
Slide 24: Stock Performance & Total Return
Stock Performance & Total Return March 2018
Slide 25: Consistent Value Creation
24 ProAssurance Investor Briefing, March 2018 Consistent Value Creation Reflects all stock splits and includes all dividends in the year declared. Source: SNL 52% 88% 160% 521% 229% 534% 862% 983% 959% 1484% 2012% 2987% 2/28/18: 2718% 91 93 95 97 99 01 03 05 07 09 11 13 15 17 Scorecard at 2/28/18 To
Slide 26: Consolidated Financial & Operational Highlights
Consolidated Financial & Operational Highlights March 2018
Slide 27: 2017 Income Statement Highlights
26 ProAssurance Investor Briefing, March 2018 2017 Income Statement Highlights Strong results from a focused strategy Three - Months Ended Year Ended December 31 2017 2016 2017 2016 Gross Premiums Written $191.8 $187.5 $874.9 $835.0 Net Investment Result $25.6 $ 25.6 $103.7 $94.3 Total Revenues $ 20
Slide 28: Balance Sheet Highlights
27 ProAssurance Investor Briefing, March 2018 Balance Sheet Highlights Maintaining the financial strength required to keep our insurance promise while continuing to create value for our shareholders 2017 2016 2015 2014 2013 Shareholders’ Equity $1.6 $1.8 $2.0 $2.2 $2.4 Total Investments $ 3.7 $ 3.9
Slide 29: Book Value per Share History
28 ProAssurance Investor Briefing, March 2018 $21.35 $26.30 $30.17 $35.42 $36.85 $39.13 $38.17 $36.88 $33.78 $29.83 $20.80 $23.13 $25.29 $29.80 $30.98 $34.67 $31.63 $30.72 $27.91 $24.06 $20.26 $24.04 $26.58 $31.93 $33.34 $35.64 $32.66 $31.17 $28.24 $24.34 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12
Slide 30: Book Value per Share History Components
29 ProAssurance Investor Briefing, March 2018 Book Value per Share History Components 12/31/17 12/31/16 Change Total Book Value $29.83 $33.78 $(3.95) Less: Goodwill & Intangible Assets 5.49 5.54 ( 0.05) Tangible Book Value $24.34 $28.24 $(3.90) Less: Unrealized Gain / Loss 0.28 0.33 $(0.05) Tang
Slide 31: Strong Operational Results / Consistent Profitability
30 ProAssurance Investor Briefing, March 2018 Strong Operational Results / Consistent Profitability Combined ratio average 2009 - 2017: 75.2% Operating ratio average 2009 - 2017: 53.8% Combined Ratio and Operating Ratio History 69.1% 68.0% 52.5% 57.3% 70.6% 82.1% 90.5% 91.4% 95.4% 38.8% 39.8% 27.6%
Slide 32: Disciplined Approach to Reserves
31 ProAssurance Investor Briefing, March 2018 $16 $20 $19 $25 $40 $48 $53 $48 $34 $29 $29 $20 $31 $37 $38 $50 $60 $39 $42 $35 $37 $29 $25 $30 $43 $33 $52 $50 $49 $43 $36 $29 $32 $44 $104 $108 $138 $184 $114 $82 $49 $56 $49 $44 $11 $17 $23 $36 $105 $185 $207 $234 $326 $272 $223 $182 $161 $144 $134 20
Slide 33: Effects of Tax Reform
Effects of Tax Reform At March 5, 2018
Slide 34: How the Tax Changes Affect ProAssurance
33 ProAssurance Investor Briefing, March 2018 How the Tax Changes Affect ProAssurance New Corporate Tax Rate 21% 100% Bonus Depreciation Base Erosion & Anti - Abuse Tax “BEAT” Limits on Deductibility of Certain Compensation Elimination of Entertainment Expense Deductions Reduces Deductions for Divid
Slide 35: Segment Financial Highlights Specialty P&C
Segment Financial Highlights Specialty P & C, March 2018
Slide 36: Q4 2017 Specialty P&C Financial Highlights
35 ProAssurance Investor Briefing, March 2018 Q4 2017 Specialty P&C Financial Highlights Three Months Ended Year Ended December 31 December 31 2017 2016 2017 2016 Gross Premiums Written $121.3 $125.5 $549.3 $535.7 Net Premiums Earned $113.5 $122.7 $453.9 $457.8 Total Revenues $115.3 $124.0 $459.6 $4
Slide 37: Q4 2017 Specialty P&C Gross Written Premium
36 ProAssurance Investor Briefing, March 2018 Total Gross Written Premiums were $121.3 mil — decrease of 3.4% Q - o - Q. Comparison affected largely by the $11.8 million one - time premium in Q4 2016 New business of $17.6 million. Physician new business: $13.7 mil Facilities decrease is comparison -
Slide 38: 2017 Specialty P&C Gross Written Premium
37 ProAssurance Investor Briefing, March 2018 Total Gross Written Premiums were $549.3 mil — increase of 2.5% Y - o - Y Physician increase is due to timing of new business in 2016 & renewals in 2017. Retention: 90%. Physician new business: $31.6 mil Facilities decrease is comparison - related due to
Slide 39: Retention Remains Strong
38 ProAssurance Investor Briefing, March 2018 Retention remains strong Continued underwriting vigilance is being used today to ensure future success Market share is important, but NOT as important as profitability Strong Retention Despite Competition Year - over - Year Premium Retention – Physicia
Slide 40: Physician Liability Pricing Trend
39 ProAssurance Investor Briefing, March 2018 Physician Liability Pricing Trend PICA excluded to facilitate accurate comparisons over time | December 31, 2017 Current accident year loss ratio adjustments have been minor — in either direction Minimal changes on renewed business MD/DO Charged Rate His
Slide 41: State Rate Comparison
40 ProAssurance Investor Briefing, March 2018 Annual Premium for a $1M / $3M Policy Filed or Approved at 1/01/17 Key State Rate Comparison Birmingham Indianapolis Denver Louisville Dallas St Louis Cleveland New York, NY Washington Miami Detroit Chicago Family Practice (No Surgery) $7,484 $8,461 $11,
Slide 42: Thorough Claims Defense Remains Important
41 ProAssurance Investor Briefing, March 2018 Strong defense still matters to individual physicians, even if they are in a hospital - owned practice or in a large group — it’s their reputation on the line We leverage our financial strength to give our insureds the opportunity for an uncompromising d
Slide 43: The Bottom Line: Benefits of Strong Defense
42 ProAssurance Investor Briefing, March 2018 Source: 2012 - 2016, Statutory Basis, A.M. Best Aggregates & Averages The Bottom Line Benefits of Strong Defense Our ability and willingness to defend claims allows us to achieve better results ProAssurance Stand Alone Five - Year Average Loss Ratio ( 20
Slide 44: ProAssurance Outperforms in Insurance
43 ProAssurance Investor Briefing, March 2018 Source: A.M. Best Aggregates and Averages for Each Line of Business ( 1991 - 2016) ProAssurance Outperforms in Insurance Average Combined Ratio 103.8% 100.6% 99.1% 106.7% 90.7% 98.8% 87.2% 67.0% 69.9% 88.3% 70.5% 74.4% 1991-2016 10-Year 2007-2016 5-Year
Slide 45: ProAssurance Outperforms in HCPL
44 ProAssurance Investor Briefing, March 2018 Source: 1991 - 2016 A.M. Best Aggregates and Averages, Medical Malpractice Lines of Business. Policyholder Dividends Included. ProAssurance Outperforms in HCPL ProAssurance consistently outperforms in a volatile line of business Calendar Year Combined Ra
Slide 46: Segment Strategic Review Specialty P&C
Segment Strategic Review Specialty P & C, March 2018
Slide 47: Strategy Update: Healthcare Costs are the Real Issue
46 ProAssurance Investor Briefing, March 2018 The question is cost vs. care — we can deliver more care than we can afford Restructuring is producing profound changes in healthcare The U.S. spends a greater proportion of GDP on healthcare and the percentage is increasing Strategy Update: Healthcare
Slide 48: The Future of Healthcare Costs
47 ProAssurance Investor Briefing, March 2018 The Future of Healthcare Costs Adapted from HBR: The Strategy that Will Fix Healthcare Greater reliance on a value - based payment system Providers shouldering more of the risk of costs • Drives the need for efficiency in order to optimize limited reso
Slide 49: Strategy Update: Traditional Practices are Fading
48 ProAssurance Investor Briefing, March 2018 The fork in the road for traditional HCPL companies Their core markets are disappearing and they do not have the financial size and capability to insure large, more complex risks Strategy Update: Traditional Practices are Fading Source: 2016 Physicians
Slide 50: Strategy Update: ProAssurance Can Meet the Challenges
49 ProAssurance Investor Briefing, March 2018 The HCPL Industry Traditional practices are fading Excess capital is being used to try to maintain market share at the expense of a sustainable future Capital & geographic constraints challenge many small insurers Few companies are able to respond to new
Slide 51: Emerging Issues in Healthcare
50 ProAssurance Investor Briefing, March 2018 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 pur
Slide 52: ProAssurance is Positioned to Succeed in HCPL
51 ProAssurance Investor Briefing, March 2018 Berkshire Hathaway Specialty MPL Carriers Only $865 Doctor’s Company $673 ProAssurance Size, Scope & Experience $453 MLMIC NY Only $392 Coverys $390 NORCAL $330 MCIC $288 PRI NY Only Negative Surplus $288 MAG Mutual $288 Hospitals Insurance $189 ISMIE $1
Slide 53: ProAssurance is Positioned to Succeed in HCPL
52 ProAssurance Investor Briefing, March 2018 ProAssurance is Positioned to Succeed in HCPL Our long - term focus on financial strength is central to our overall strategy and success We have proven our ability to thrive across insurance cycles We have an unmatched combination of financial strength a
Slide 54: Broad Experience Across the Healthcare Market
53 ProAssurance Investor Briefing, March 2018 More than 30 year of experience insuring hospitals and other healthcare facilities Experience ranges from community - based hospitals to major medical centers Enhanced coverages (ProControl) and existing programs respond to today’s emerging trends Broad
Slide 55: Strategy Update: Successes in the Evolving Market
54 ProAssurance Investor Briefing, March 2018 The Certitude tm program in partnership with Ascension Health Shared risk through quota share participation by Ascension’s captive on first $1M ~ 2,600 insured physicians ~$ 29.6 mln inforce Certitude direct premium YTD (12/31/17) Active in AL, C
Slide 56: Addressing a Wide Spectrum of Risk Appetites
55 ProAssurance Investor Briefing, March 2018 Addressing a Wide Spectrum of Risk Appetites Traditional Policies Primarily agent - sold or direct Remains the majority of our business Proven performance supports discipline pricing Transitional Risk sharing/high deductible programs control cost and bui
Slide 57: Emerging Strategic Opportunities
56 ProAssurance Investor Briefing, March 2018 Emerging Strategic Opportunities 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 liabilitie
Slide 58: Leveraging Existing Expertise in New Ways
57 ProAssurance Investor Briefing, March 2018 Leveraging Existing Expertise in New Ways 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 Primar
Slide 59: Segment Financial Highlights & Strategic Review Workers' Compensation
Segment Financial Highlights & Strategic Review Workers’ Compensation, March 2018
Slide 60: 2017: Expansion Completed — Opportunities Ahead
59 ProAssurance Investor Briefing, March 2018 2017: Expansion Completed — Opportunities Ahead Eastern Alliance Insurance Group has acquired the renewal rights to the workers’ compensation book of Great Falls Insurance Company Great Falls is headquartered in Auburn, Maine Transaction adds Maine and
Slide 61: Eastern Specialty Risk: Higher Risk But NOT High Risk
60 ProAssurance Investor Briefing, March 2018 Eastern Specialty Risk: Higher Risk But NOT High Risk Business Overview Focusing on the next level of risk: higher hazard but not typical “high hazard” • Some classes previous written by Eastern in High Modification programs • $5.2 million in direct pr
Slide 62: Q4 2017 Workers' Compensation Financial Highlights
61 ProAssurance Investor Briefing, March 2018 Q4 2017 Workers’ Compensation Financial Highlights Three Months Ended Year Ended December 31 December 31 2017 2016 2017 2016 Gross Premiums Written $60.2 $53.5 $263.4 $247.9 Net Premiums Earned $57.6 $56.8 $227.4 $220.8 Total Revenues $57.8 $57.0 $228.1
Slide 63: Consistent Profitability in Workers' Comp
62 ProAssurance Investor Briefing, March 2018 79.1% 65.6% 80.2% 87.7% 96.0% 89.7% 91.8% 93.0% 96.0% 95.9% 95.5% 91.1% 92.7% 94.3% 93.7% 89.1% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 GAAP GAAP (excluding fair value adjustments, intangible asset amortization, transaction-related an
Slide 64: Eastern Outperforms in Workers' Compensation
63 ProAssurance Investor Briefing, March 2018 Source: 1996 - 2016 A.M. Best Aggregates and Averages, Workers’ Compensation. Policyholder Dividends Included. Eastern Outperforms in Workers’ Compensation Eastern consistently outperforms in a volatile line of business Calendar Year Combined Ratio 1996
Slide 65: Segment Strategic Review Workers' Compensation
Segment Strategic Review Worker’s Compensation, March 2018
Slide 66: Strategy Update: How Eastern Differentiates
65 ProAssurance Investor Briefing, March 2018 Strategy Update: How Eastern Differentiates Understands market dynamics and regulatory concerns Use of local knowledge that has always differentiated ProAssurance Disciplined individual account underwriting with focus on rate adequacy in rural territor
Slide 67: Eastern Alliance Insurance Group
66 ProAssurance Investor Briefing, March 2018 Eastern Alliance Insurance Group Best - in - Class Claims, Risk Management and Underwriting Business Model Broad Product Spectrum 43 State/DC Licenses – Core Operations in 19 States Select Agency Partnerships 231 Contracts / 669 Locations Workers’ Comp
Slide 68: Broad Workers' Compensation Product Spectrum
67 ProAssurance Investor Briefing, March 2018 Guaranteed Cost Policies Loss - Sensitive Dividend Plans Deductible Plans Retrospective Rating Plans Alternative Market Programs ParallelPay – “Pay as you Go” TPA Services Claims Administration and Risk Management Broad Workers’ Compensation Product Sp
Slide 69: Diversified Book of Business
68 ProAssurance Investor Briefing, March 2018 Wide diversification by class code and market segment 8,466 active policies in Traditional Programs • Over 600 class codes actively written in Traditional business 2,781 active policies in Inova Alternative Market Programs • Over 400 actively written
Slide 70: Significant Healthcare Profile
69 ProAssurance Investor Briefing, March 2018 Healthcare as a Percentage of Overall Workers’ Compensation Writings Direct Written Premium at 12/31/17 Significant Healthcare Profile Non - Healthcare 77% Healthcare 23% $27.5 $23.9 $32.3 $29.5 $59.8 $53.4 2017 2016 Inova Traditional Q4 2017 Healthcare
Slide 71: Workers' Comp Claim Closing Pattern: Traditional
70 ProAssurance Investor Briefing, March 2018 Eastern’s proactive claim - closing strategies are key to being recognized as a short - tail writer of workers’ compensation No claims open from 2002 and earlier 35 net claims open from 2012 and prior Workers’ Comp Claim Closing Pattern: Traditional 12
Slide 72: Strategy Update: Alternative Market Overview
71 ProAssurance Investor Briefing, March 2018 Strategy Update: Alternative Market Overview Inova® is our alternative insurance brand Alternative insurance s tructure u tilizes a segregated p ortfolio c ompany (Eastern Re) with segregated p ortfolio c ells housing captives Alternative market solution
Slide 73: Strategy Update: How Eastern RE Differentiates
72 ProAssurance Investor Briefing, March 2018 Strategy Update: How Eastern RE Differentiates Captive insurance solutions provided through Eastern Re Value - added risk management services cements brand loyalty Strategic partnerships with select independent agencies that share philosophies on control
Slide 74: How Inova Benefits Insureds
73 ProAssurance Investor Briefing, March 2018 How Inova ® Benefits Insureds “A” Rated Paper – WC / “A+” Rated Paper – MPL / GL Stable Off - Shore Facility Eastern Re Ltd, S.P.C. established in 1987 Cayman Islands Monetary Authority regulation Segregated portfolio cells statutorily protected fr
Slide 75: Workers' Comp Claim Closing Pattern: Alternative
74 ProAssurance Investor Briefing, March 2018 Workers’ Comp Claim Closing Pattern: Alternative 12/31/2017 66 103 175 267 407 422 310 325 336 385 404 502 500 571 624 641 598 0 0 0 0 0 0 0 1 0 0 2 2 1 1 12 34 92 0 100 200 300 400 500 600 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 76: Inova: Direct Written Premium Trends
75 ProAssurance Investor Briefing, March 2018 Inova: Direct Written Premium Trends DPW in 000’s $847 $2,451 $5,082 $12,159 $17,257 $25,786 $28,512 $27,032 $26,912 $29,113 $28,790 $31,139 $38,157 $42,733 $51,125 $59,359 $70,631 $75,915 $80,544 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20
Slide 77: Segment Financial Highlights & Strategic Review Lloyd's
Segment Financial Highlights & Strategic Review Lloyd’s, March 2018
Slide 78: Q4 2017 Lloyd's Segment Financial Highlights
77 ProAssurance Investor Briefing, March 2018 Q4 2017 Lloyd’s Segment Financial Highlights Three Months Ended Year Ended December 31 December 31 2017 2016 2017 2016 Gross Premiums Written $13.2 $14.3 $70.2 $65.2 Net Premiums Earned $11.8 $14.1 $57.2 $54.7 Total Revenues $12.5 $14.8 $57.6 $57.6 Net L
Slide 79: Lloyd's Syndicate 1729: 2017 Business Detail
78 ProAssurance Investor Briefing, March 2018 2018 Underwriting capacity: $178.4 million ProAssurance’s 62% share is $110.8 million Lloyd’s Syndicate 1729: 2017 Business Detail † † For the trailing twelve months as of September30, 2017 and reported December 31, 2017. $ in millions and based on exc
Slide 80: Lloyd's Strategy Review
79 ProAssurance Investor Briefing, March 2018 Lloyd’s Strategy Review ProAssurance provides 62% of capital to Syndicate 1729 (increased from 58% at 1/1/18) Small ownership interest in the underlying underwriting arm, Dale Underwriting Partners $200 million capital commitment is best viewed as an inv
Slide 81: Key Lloyd's Opportunities
80 ProAssurance Investor Briefing, March 2018 Key Lloyd’s Opportunities Special Purpose Arrangement (SPA) within Syndicate 1729 will begin writing business in 2018 Syndicate 6131 Four experienced underwriters with established books of business prior to joining Planned premium is $22 million Business
Slide 82: Syndicate 1729 Outlook for 2018
81 ProAssurance Investor Briefing, March 2018 Syndicate 1729 Outlook for 2018 Little or no exposure to Brexit and related issues Few UK risks written Improving market conditions Growth in a more profitable market More catastrophe risk, gross & net Remaining disciplines and focused on core products
Slide 83: Segment Financial Highlights & Strategic Review Corporate & Investments
Segment Financial Highlights & Strategic Review Corporate & Investments, March 2018
Slide 84: Q4 2017 Corporate Segment Financial Highlights
83 ProAssurance Investor Briefing, March 2018 Segment operating results for Q3 2017 were higher than Q3 2016 primarily as a result of a $ 7.5 million increase in earnings from unconsolidated subsidiaries due to higher reported earnings from our investments in LPs/LLCs and the effect of a smaller inc
Slide 85: Investment Strategy and Detailed Holdings
Investment Strategy and Detailed Holdings
Slide 86: 2018 Investment Strategy
85 ProAssurance Investor Briefing, March 2018 Proactively managing allocations for better risk - adjusted returns Reducing municipals due to changes in tax rates 20187 Investment Strategy Continuing capital management activities are reducing the size of the portfolio Duration management remains para
Slide 87: Q4 2017 Consolidated Net Investment Result
86 ProAssurance Investor Briefing, March 2018 Q4 2017 Consolidated Net Investment Result 12/31/17 12/31/16 Change Net Investment Income Fixed maturities $ 17,784 $ 21,011 $ ( 3 , 227 ) Equities 4 , 762 3, 904 858 Short - term and Other investments 4,867 851 4,016 BOLI 461 471 (10 ) Investment fees a
Slide 88: 2017 Consolidated Net Investment Result
87 ProAssurance Investor Briefing, March 2018 2017 Consolidated Net Investment Result $ in thousands Fixed income is down due to ~7% lower average balances and low er yields Excluding Capital Gains / (Losses) 12/31/17 12/31/16 Change Net Investment Income Fixed maturities $ 75,669 $ 85,818 $ ( 10 ,
Slide 89: ProAssurance Investment Profile
88 ProAssurance Investor Briefing, March 2018 ProAssurance Investment Profile $ 2.3 Billion Fixed Income Portfolio (62% of Invested Assets) $ 3.7 Billion Overall Portfolio Sources of Liquidity State & Muni 28% Corporate 51% Asset Backed 14% Govt & Agency 7% Short Term (incl cash) 12% Equities & Equi
Slide 90: ProAssurance Recent Investment Performance
89 ProAssurance Investor Briefing, March 2018 ProAssurance Recent Investment Performance As of December 31, 2017 Management reporting item which is ‘tax equivalent,’ unaudited, and non GIPS, may not equal 100% due to rounding Contribution to Returns 2013 - 2017 / PRA vs Benchmarks 2017 2016 2015 201
Slide 91: Portfolio Detail: Asset Backed
90 ProAssurance Investor Briefing, March 2018 12/31/17 ProAssurance Portfolio Detail: Asset Backed $326 Million ( 14% of Fixed Income / 9% of Invested Assets) RMBS 61% Other (Primarily Auto & Credit … CMBS 8% Weighted Average Rating: “AAA”
Slide 92: Portfolio Detail: Corporate
91 ProAssurance Investor Briefing, March 2018 ProAssurance Portfolio Detail: Corporate Corporates: $ 1.2 Billion (51% of Fixed Assets / 31% of Invested Assets) Top 20 Banks/Financials: $179 million in millions J. P. Morgan $24 Key Bank $7 Goldman Sachs $16 Athene $7 PNC $13 B ank of America $7 Docto
Slide 93: Portfolio Detail: Municipals
92 ProAssurance Investor Briefing, March 2018 12/31/17 ProAssurance Portfolio Detail: Municipals Municipals: $632 Million (28% of Fixed Income / 17% Invested Assets) General Obligation 17% Prerefunded 11% Special Revenue 72% Weighted Average Rating: AA Top 10 Municipal Holdings in millions Connectic
Slide 94: Portfolio: Equities & Other
93 ProAssurance Investor Briefing, March 2018 12/31/17 Subject to Rounding ProAssurance Portfolio: Equities & Other Equities & Other: $912 Million ( 25% of Invested Assets) Equities 28% Alternative Equity & Debt 16% Private Equity 14% BDC Stocks 4% Real Estate LP 5% MLPs 3% Convertible Bonds 4% Bond
Slide 95: Additional Financial Detail
Additional Financial Detail March 2018
Slide 96: Tax Credit Impact on Operating Results
95 ProAssurance Investor Briefing, March 2018 Tax Credit Impact on Operating Results Substantial tax benefits and amortization expenses - $0.8 - $5.6 - $6.2 - $10.0 - $10.7 - $10.3 - $24.8 - $20.7 - $24.9 - $21.3 - $20.6 - $15.5 - $6.8 - $3.0 - $1.5 - $0.8 - $0.4 - $0.1 $1.2 $7.7 $12.3 $20.8 $21.7 $
Slide 97: Combined Tax Credits Portfolio Detail & Projections
96 ProAssurance Investor Briefing, March 2018 Combined Tax Credits Portfolio Detail & Projections Year Capital Contributions GAAP Income/(Loss) from Operations, Disposition & Impairment Total Credits (Source IRR Schedule) Tax Provision after Impairment Impact on Earnings 2016 $ 8,701,852 $ (24,817,2
Slide 98: Capital Growth: 2008-2017
97 ProAssurance Investor Briefing, March 2018 Capital Growth: 2008‒2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Beginning Equity* $ 1,255 $ 1,424 $ 1,705 $ 1,856 $ 2,164 $ 2,271 $ 2,394 $ 2,158 $ 1,958 $ 1,799 Cumulative - effect adjustment: ASU 2016 - 09 adoptio n - - - - - - - - - $ 149
Slide 99: 2017 Ceded Premiums Written
98 ProAssurance Investor Briefing, March 2018 2017 Ceded Premiums Written HCPL including Podiatry Products Lawyers Workers’ Compensation Lloyd’s Traditional Alternative Markets 12/31/17 12/31/16 12/31/17 12/31/16 12/31/17 12/31/16 12/31/17 12/31/16 12/31/17 12/31/16 12/31/17 12/31/16 Gross written p
Slide 100: Q4 2017 Condensed Results by Segment
99 ProAssurance Investor Briefing, March 2018 Q4 2017 Condensed Results by Segment Fourth Quarter 2017 Specialty P&C Workers' Comp Lloyd's Syndicate Corporate / Other Elimination Q4 201 7 Q4 201 6 Gross premiums written $ 121,291 $ 60 , 154 $ 13 , 229 $ — $ ( 2 , 930 ) $ 191 , 744 $ 187 , 450 Net pr
Slide 101: 2017 Condensed Results by Segment
100 ProAssurance Investor Briefing, March 2018 2017 Condensed Results by Segment 2017 Specialty P&C Workers' Comp Lloyd's Syndicate Corporate / Other Elimination 201 7 201 6 Gross premiums written $ 549,323 $ 263,391 $ 70 , 224 $ — $ ( 8 , 062 ) $ 874 , 876 $ 835 , 014 Net premiums written 470,535 2
Slide 102: 2016 Condensed Results by Segment
101 ProAssurance Investor Briefing, March 2018 2016 Condensed Results by Segment Year Ended 12/31/16 Specialty P&C Workers' Comp Lloyd's Syndicate Corporate / Other Elimination Total YTD 2016 Total YTD 2015 Gross premiums written $ 535,725 $ 247,940 $ 65,157 $ — $ (13,808 ) $ 835,014 $ 812,218 Net p
Slide 103: Inside ProAssurance's Income Statement: 2017
102 ProAssurance Investor Briefing, March 2018 Inside ProAssurance’s Income Statement: 2017 Net Premiums Earned 85.3% Net Investment Income 11.0% Net Realized Investment Gains 1.9% Other 1.8% Net Losses and Loss Adjustment Expenses 54.2% Underwriting, Policy Acquisitions, Operating, SPC Dividend, an
Slide 104: Inside ProAssurance's Balance Sheet: Q4 2017
103 ProAssurance Investor Briefing, March 2018 Cash & Investments 77.5% Insurance Receivables 12.6% Goodwill & Intangible Assets 6.0% Other Assets 3.9% Retained Earnings 32.7% Loss Reserves 41.6% Reinsurance Payable & Other Liabilities 18.0% Unearned Premiums 8.1% Other Equity - 0.4% Assets: $4.9 bl
Slide 105: Forward Looking Statements Non-GAAP Measures
104 ProAssurance Investor Briefing, March 2018 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