ProAssurance Corporation’s (NYSE:PRA) third-quarter 2016 operating earnings per share of 46 cents surpassed the Zacks Consensus Estimate of 45 cents by 2.2%. However, the bottom line declined 24.6% year over year due to higher expenses.
Operational Update
ProAssurance’s operating revenues inched up 0.1% year over year to $211.9 million on higher net premiums earned. The top line also surpassed the Zacks Consensus Estimate of $208 million.
Gross premiums written dipped 1.3% year over year to $232 million.
Net investment income was $25.3 million, down 6.2% year over year.
Total expense increased 10.4% year over year to $180.80 million. The rise in costs mainly stemmed from a 9.3% increase in net losses and loss adjustment expenses along with 4% higher underwriting, policy acquisition and operating expenses, both on a year-over-year basis.
PROASSURANCE CP Price, Consensus and EPS Surprise
Financial Ratios
Net loss ratio deteriorated 390 basis points (bps) to 63.7% from 59.8% in the prior-year quarter.
Expense ratio deteriorated 100 bps to 30.1% from 29.1% in the year-ago quarter.
Combined ratio deteriorated 490 bps to 93.8% from 88.9% in the prior-year quarter.
Operating ratio improved 330 bps to 80.2% from 74.1% in the year-earlier quarter
Return on equity displayed a significant improvement of 460 bps to 6.6% from 2% in the year-ago quarter.
Financial Position
As of Sep 30, 2016, ProAssurance’s total assets were $5 billion, up 2% from $4.9 billion as of Dec 31, 2015.
As of Sep 30, 2016, the insurer’s shareholder equity was $2 billion, up 5.3% from $1.9 billion as of Dec 31, 2015.
Book value per share increased approximately 5.5% to $38.38 as of Sep 30, 2016 from $36.88 as of Dec 31, 2015.
Share Repurchase Update
The company did not repurchase any share during the third quarter.
As of Oct 31, 2016 the company had repurchased a total of 44,500 shares worth $2.1 million with $110 million remaining under authorization.
Zacks Rank Performances of Other P&C Insurers
ProAssurance carries a Zacks Rank #4 (Sell).
Among the other insurers that have reported their third-quarter earnings so far, the bottom line at Progressive Corp. (NYSE:PGR) and The Travelers Companies Inc. (NYSE:TRV) beat their respective Zacks Consensus Estimate, while earnings of RLI Corp. (NYSE:RLI) missed the same.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
RLI CORP (RLI): Free Stock Analysis Report
TRAVELERS COS (TRV): Free Stock Analysis Report
PROASSURANCE CP (PRA): Free Stock Analysis Report
PROGRESSIVE COR (PGR): Free Stock Analysis Report
Original post
Zacks Investment Research