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ProAssurance (PRA) Q4 Earnings & Revenues Miss Estimates

Zacks Equity Research
Updated

ProAssurance Corporation’s PRA fourth-quarter 2017 operating earnings per share of 55 cents missed the Zacks Consensus Estimate by 11%. Also, the bottom line declined 33.7% year over year due to lower revenues.

ProAssurance’s fourth-quarter operating revenues decreased 3.6% to $212 million from the prior-year quarter on lower premiums. Moreover, the top line missed the Zacks Consensus Estimate by 1.4%.

Quarterly Operational Update

Gross premiums written grew 2.3% year over year to $191.7 million, primarily driven by higher premiums in Workers' Compensation segment. Net premiums earned, however, decreased 5.5% year over year.

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Net investment income increased 5.4% year over year to $26.1 million.

Total expenses inched up 0.4% year over year to $175 million. This rise in costs mainly stemmed from higher underwriting, policy acquisition and operating expenses.

Full-Year Updates

For 2017, the company reported adjusted earnings of $2.02, deteriorating 17% year over year.

For 2017, ProAssurance’s operating revenues came in at $841.7 million, down 0.1% year over year.

Quarterly Segment Results

Specialty P&C Insurance Segment

Total revenues of $115.3 million fell 7.1% year over year.

Gross premiums written were $121.3 million, down 3.4% from the year-ago quarter.

Total expenses of $98.1 million climbed 9.4% year over year.

Workers' Compensation Segment

Total revenues of $57.8 million rose 1.4% year over year on the back of higher net premiums earned.

Gross premiums written were $60.1 million, up 12.4% over the prior-year period.

Total expenses of $52 million, declined 6.6% year over year.

Lloyd's Syndicate Segment

Total revenues of $12.5 million declined 15.2% year over year.

Gross premiums written were $13.2 million, down 7.4% from the year-earlier quarter.

Total expenses of $10.7 million lowered 25.3% year over year.

Corporate Segment

Total revenues of $23.6 million slumped 44% year over year.

Operating expenses of $8.2 million reduced 18.3% over the year-ago quarter. While interest expenses of $4.4 million jumped 18.5% year over year.

ProAssurance Corporation Price, Consensus and EPS Surprise

ProAssurance Corporation Price, Consensus and EPS Surprise | ProAssurance Corporation Quote

 

Financial Position

As of Dec 31, 2017, ProAssurance’s total investments were $3.7 billion, down 6% from the number registered at year-end 2016.

As of Dec 31, 2017, the company’s total assets were $4.9 billion, down 2.7% from the level at year-end 2016.

As of Dec 31, 2017, the insurer’s shareholder equity was $1.6 billion, down 11% from Dec 31, 2016.

Share Repurchase & Dividend Update

The company did not buy back any shares during 2017. As of Feb 16, 2018, it had approximately $110 million of shares available under its board-authorized stock repurchase program.

The company’s board approved a special dividend of $4.69 per share in November 2017 in addition to a regular dividend of 31 cents, both paid in January 2018.

Zacks Rank

ProAssurance carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

Performance of Other Insurers

Among other insurers that have reported fourth-quarter earnings so far, Brown & Brown, Inc. BRO, MGIC Investment Corporation MTG and The Progressive Corporation PGR beat the respective Zacks Consensus Estimate.

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