ProAssurance Corporation

ProAssurance said fourth-quarter operating earnings improved again, contributing to full-year operating earnings of $0.95 per share and a full-year operating ratio of 94.5%. Dana Hendricks said accelerated reporting of Lloyd’s aviation reserve losses reduced fourth-quarter net income by $5.3 million, or about $0.10 per share, and added about three points to the reported Specialty P&C combined ratio. In Specialty P&C, the segment reported a 101% combined ratio for the quarter and 104% for the full year, with a net loss ratio of 76.9% for the full-year core ongoing operations. In workers’ compensation, the full-year combined ratio was 114% and the current net loss ratio was 77%. Net investment income rose 9% in the quarter and 12% for the year; new purchase yields were approximately 5.8% versus an average book yield of 3.5%. Book value per share rose $1.67 from year-end 2023 to $23.49, and adjusted book value per share increased to $26.86. Management did not provide explicit next-quarter or full-year quantitative guidance, but said 2025 should look a lot like 2024 in terms of pushing rate and maintaining underwriting discipline.

Ned Rand said the company is seeing tangible progress from its multiyear effort to respond to medical professional liability severity, pointing to more than 20 points of improvement in the accident-year loss and LAE ratio since 2019. He emphasized that the company will keep favoring profitability over growth, continuing to reject business that does not meet rate-adequacy standards. His tone was confident but cautious: encouraged by progress, but clear that “work remains” and that long-term underwriting profitability is still the goal.

Dana Hendricks explained that Lloyd’s runoff results were accelerated into the quarter, cutting net income by $5.3 million, or about $0.10 per share, and affecting the Specialty P&C combined ratio by about three points. She noted Specialty P&C’s full-year core ongoing net loss ratio was 76.9%, while workers’ comp finished with a 114% combined ratio and a 77% current net loss ratio. She also highlighted solid investment performance, including 9% quarterly and 12% annual growth in net investment income, 5.8% new money yields, 93% of the fixed-maturity portfolio in investment-grade bonds, and book value per share of $23.49 versus adjusted book value of $26.86. On capital, she said the company is balancing subsidiary needs, maintaining A.M. Best A rating and stable RBC, while considering portfolio diversification and repurchases in the context of debt and operating-company needs.

Analysts focused on competition, reserve development, workers’ compensation rate trends, expense ratios, and capital management. Management said competition in Specialty P&C did not change meaningfully in Q4 and expected 2025 to resemble 2024, with rate discipline and willingness to give up retention still a priority. On workers’ comp, Ned Rand said loss cost indications are still drifting down despite severity concerns, and the company is trying to push rate in a market where bureau data may be stale. On expenses, Dana Hendricks said the 2024 ratio was pressured by incentive compensation and other unusual items, and that the ratio will likely remain pressured as risk selection affects earned premium. On capital, Dana said repurchases remain an option, but only alongside operating-company needs, debt levels, and preserving capital efficiency.