ProAssurance (PRA) Prelim. Q4 EPS Misses Consensus

ProAssurance Corporation (NYSE: PRA) today announced preliminary per share results for the fourth quarter of 2018. We expect to report a net loss of between $0.45 and $0.47 per basic and diluted share and positive Non-GAAP operating earnings of between $0.17 and $0.19 per diluted share when we release final fourth quarter results on February 21, 2019.

(**Street sees Q4 EPS of $0.44)

Net income in the quarter will be adversely impacted by mark-to-market losses on our equity trading portfolio which resulted in net realized losses of approximately $46 million, in line with the broader performance of the equity markets in the last quarter of the year. The performance of the financial markets in the quarter will also contribute to a decline in our equity in earnings of unconsolidated subsidiaries which we estimate will be approximately $3.3 million.

Our Lloyd’s Syndicates segment is expected to report a net loss in a range of between $9 million to $10.5 million. We forecast losses of approximately $3.2 million during our third quarter conference call; however, we recently received loss estimates in connection with Hurricane Michael. We estimate our share of these net pre-tax losses will be approximately $6.8 million, net of reinstatement premiums. These losses would normally be reported in our first quarter 2019 results due to the quarter lag. However, given the availability and materiality of these estimated catastrophe losses, we are accelerating our reporting of these losses into the fourth quarter of 2018, consistent with our policy of disclosing significant losses in the quarter in which they become known to us.

ProAssurance’s Chairman and Chief Executive Officer Stan Starnes said, “We are deeply disappointed in the performance of our investment at Lloyd’s and we will be reviewing all our strategic options regarding this investment in the coming months.”

Gross premiums written in the quarter will be in the range of $210 to $212 million and net earned premium for the quarter is expected to range from $201 million to $203 million.

We anticipate favorable loss development for the quarter will be in the range of $24 million to $26 million. We believe our consolidated net loss ratio will be between 76.0% and 77.0% for the quarter and our consolidated combined ratio is expected to be in a range between 105.5% and 106.5% for the quarter.

Announcement of Final Fourth Quarter Results and Conference Call Information
ProAssurance will release final fourth quarter 2018 results, as previously announced, after the close of normal New York Stock Exchange trading on Thursday, February 21, 2019. ProAssurance will conduct a conference call at 9:30 AM ET on Friday, February 22, 2019 to discuss the results, and other items of interest to investors participating in the call. US-based investors are invited to participate by phone by dialing (888) 349-0134 (toll free), Canadian investors may dial (855) 669-9657 (toll free), and international investors may dial (412) 317-5145. The conference call will also be webcast through the Investor Relations section of ProAssurance.com. A telephone replay of the call will be available through at least December 31, 2019 using access code 10128025. Investors in the United States may dial (877) 344-7529 (toll free), Canadian investors may dial (855) 669-9658 (toll free), and international investors may dial (412) 317-0088. A replay will be available on the internet through at least December 31, 2019 at ProAssurance.com. ProAssurance will make a podcast of the call available on its website and on iTunes.

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