ProAssurance Surpasses Q4 Earnings Expectations as Costs Decrease

ProAssurance Corporation Surpasses Q4 2025 Earnings Expectations

ProAssurance Corporation (PRA) posted adjusted operating earnings of $0.82 per share for the fourth quarter of 2025, significantly exceeding the Zacks Consensus Estimate of $0.22. This result marks a 115.8% increase compared to the same period last year.

Operating revenue for the quarter reached $271.6 million, reflecting a 5.6% decrease year over year, but still outperformed consensus projections by 3.9%.

The company’s strong quarterly performance was driven by higher investment income and reduced expenses. However, these gains were partially offset by a decline in premiums, particularly within the Specialty Property & Casualty, Workers' Compensation Insurance, and Segregated Portfolio Cell Reinsurance divisions.

Q4 2025 Financial Highlights

• Gross premiums written dropped 3% year over year to $201.5 million.
• Net premiums earned totaled $232.1 million, down 3.7% from the prior year, but slightly above the consensus estimate of $231.5 million.
• Net investment income rose 9.1% to $40.2 million, surpassing the expected $39.3 million, thanks to improved average book yields.
• Total expenses decreased 17.8% to $223 million, mainly due to lower net losses and loss adjustment costs.
• Net income soared 106.4% to $33.4 million, and the combined ratio improved to 92.3% from 109.3% a year ago.

Segment Performance Overview

Specialty Property & Casualty

• Revenue for the segment was $180.3 million, a 3.8% decrease year over year, but ahead of the $175.2 million consensus estimate.
• Net premiums earned fell 2.7% to $180.8 million, still beating the consensus of $174.2 million.
• Total expenses dropped 23.7% to $147.9 million.
• The segment reported a profit of $32.4 million, reversing a $6.5 million loss from the previous year.
• The combined ratio improved to 79.9% from 99.9%.

Workers' Compensation Insurance

• Segment revenue declined 5.1% to $41.1 million, missing the $41.7 million estimate.
• Net premiums earned were $40.3 million, down 6.1% and below the $41.3 million consensus.
• Total expenses decreased 7.2% to $46.9 million.
• The segment reported a loss of $5.7 million, an improvement from the $7.2 million loss a year earlier.
• The combined ratio improved by 130 basis points to 116.3%.

Segregated Portfolio Cell Reinsurance

• Gross premiums written fell 11.1% to $11.1 million.
• Net premiums earned dropped 11% to $11 million, slightly above the consensus by 0.2%.
• Underwriting, policy acquisition, and operating expenses totaled $3.9 million, a 1.8% decrease.
• The segment posted a profit of $1.5 million, up 114.8% year over year.
• The combined ratio improved to 67.4% from 80.5%.

Corporate Segment

• Net investment income increased 9% to $39.1 million.
• Operating expenses rose 10% to $10.5 million.
• Segment profit fell 75.9% to $7 million.
• Interest expenses decreased 2.3% to $5.2 million.

Financial Position as of December 31, 2025

• Cash and cash equivalents stood at $36.5 million, a 33.5% decrease from the end of 2024.
• Total investments reached $4.4 billion, up 1.4% year over year.
• Total assets were $5.4 billion, down 2.3% from the previous year-end.
• Debt, net of unamortized issuance costs, was $420.4 million, a 1% decrease.
• Shareholders’ equity rose 12.3% to $1.3 billion.
• Net cash used in operating activities was $25.6 million, compared to $10.5 million used in the prior year.
• Book value per share increased 11.7% to $26.24.
• Adjusted operating return on equity improved by 630 basis points to 12.8%.

Share Repurchase Activity

ProAssurance did not buy back any common shares in 2025. As of year-end, $55.9 million remained available for share repurchases or debt retirement.

Full-Year 2025 Results

• Adjusted operating income per share climbed 65.3% to $1.62.
• Total revenue declined 4.6% to $1.1 billion.

PRA’s Zacks Rank

PRA currently holds a Zacks Rank #1 (Strong Buy).

How Did Other Insurance Companies Perform?

• RenaissanceRe Holdings Ltd. (RNR): Fourth-quarter 2025 operating income was $13.34 per share, beating estimates by 26% and up 65.5% year over year. Results were boosted by higher net investment income and strong underwriting, while lower premiums in certain lines limited gains.
• MetLife, Inc. (MET): Adjusted operating earnings per share reached $2.58, exceeding estimates by 9.3% and rising 24% from the prior year. Growth was driven by strong results in Asia, Group Benefits, RIS, and EMEA, though a VAT charge in Mexico weighed on Latin America earnings.
• Everest Group, Ltd. (EG): Reported Q4 operating income of $13.26 per share, just below estimates, but a significant turnaround from a loss of $18.39 a year ago. The Reinsurance segment and fixed-income investments performed well, but insurance operations and higher costs offset some gains.

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