Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 22, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-16533 | ||
Entity Registrant Name | ProAssurance Corporation | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 63-1261433 | ||
Entity Address, Address Line One | 100 Brookwood Place, | ||
Entity Address, City or Town | Birmingham, | ||
Entity Address, State or Province | AL | ||
Entity Address, Postal Zip Code | 35209 | ||
City Area Code | (205) | ||
Local Phone Number | 877-4400 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | PRA | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,261,668,461 | ||
Entity Common Stock, Shares Outstanding (in shares) | 53,964,169 | ||
Documents Incorporated by Reference | The definitive proxy statement for the 2023 Annual Meeting of the Stockholders of ProAssurance Corporation (File No. 001-16533) is incorporated by reference into Part III of this report. | ||
Entity Central Index Key | 0001127703 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Birmingham, Alabama |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Investments | ||
Fixed maturities, available-for-sale, at fair value (amortized cost, $3,852,411 and $3,814,847, respectively; allowance for expected credit losses, $427 as of December 31, 2022 and none as of December 31, 2021) | $ 3,472,472 | $ 3,833,722 |
Fixed maturities, trading, at fair value (cost, $45,048 and $43,914, respectively) | 43,434 | 43,670 |
Equity investments, at fair value (cost, $162,429 and $211,356, respectively) | 143,738 | 214,807 |
Short-term investments | 245,313 | 216,987 |
Business owned life insurance | 81,746 | 81,767 |
Investment in unconsolidated subsidiaries | 305,210 | 335,576 |
Other investments (at fair value, $92,447 and $98,611, respectively, otherwise at cost or amortized cost) | 95,770 | 101,794 |
Total Investments | 4,387,683 | 4,828,323 |
Cash and cash equivalents | 29,959 | 143,602 |
Premiums receivable, net (allowance for expected credit losses, $7,658 as of December 31, 2022 and $7,436 as of December 31, 2021) | 246,094 | 241,095 |
Receivable from reinsurers on paid losses and loss adjustment expenses | 15,313 | 14,599 |
Receivable from reinsurers on unpaid losses and loss adjustment expenses | 431,889 | 451,741 |
Prepaid reinsurance premiums | 29,120 | 24,571 |
Deferred policy acquisition costs | 58,148 | 58,940 |
Deferred tax asset, net | 209,535 | 117,613 |
Real estate, net | 29,968 | 30,342 |
Operating lease ROU assets | 18,987 | 19,595 |
Intangible assets, net | 66,835 | 73,336 |
Goodwill | 49,610 | 49,610 |
Other assets | 126,858 | 138,110 |
Total Assets | 5,699,999 | 6,191,477 |
Policy liabilities and accruals | ||
Reserve for losses and loss adjustment expenses | 3,471,147 | 3,579,940 |
Unearned premiums | 422,950 | 433,961 |
Reinsurance premiums payable | 28,514 | 22,627 |
Total Policy Liabilities and Accruals | 3,922,611 | 4,036,528 |
Operating lease liabilities | 20,008 | 20,844 |
Other liabilities | 226,379 | 280,732 |
Debt less unamortized debt issuance costs | 426,983 | 424,986 |
Total Liabilities | 4,595,981 | 4,763,090 |
Shareholders' Equity | ||
Common shares (par value $0.01 per share, 100,000,000 shares authorized, 63,427,796 and 63,308,741 shares issued, respectively) | 634 | 633 |
Additional paid-in capital | 397,919 | 392,941 |
Accumulated other comprehensive income (loss) (net of deferred tax expense (benefit) of ($80,810) and $4,423, respectively) | (298,607) | 16,284 |
Retained earnings | 1,423,286 | 1,434,491 |
Treasury shares, at cost (9,464,160 and 9,325,180 shares, respectively) | (419,214) | (415,962) |
Total Shareholders' Equity | 1,104,018 | 1,428,387 |
Total Liabilities and Shareholders' Equity | $ 5,699,999 | $ 6,191,477 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, available for sale, at fair value; amortized cost | $ 3,852,411,000 | $ 3,814,847,000 |
Allowance for Expected Credit Losses | 427,000 | 0 |
Fixed maturities, trading, at fair value; cost | 45,048,000 | 43,914,000 |
Equity investments, fair value, cost | 162,429,000 | 211,356,000 |
Other investments, fair value disclosure | 92,447,000 | 98,611,000 |
Net of related allowance for expected credit losses | $ 7,658,000 | $ 7,436,000 |
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common shares, shares issued (in shares) | 63,427,796 | 63,308,741 |
Deferred tax expense (benefit) on accumulated other comprehensive income (loss) | $ (80,810,000) | $ 4,423,000 |
Treasury shares (in shares) | 9,464,160 | 9,325,180 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Capital - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning balance | $ 1,428,387 | $ 1,349,210 | $ 1,511,913 | |
Common Shares reacquired | (3,252) | |||
Common shares issued for compensation | 1,078 | 700 | 691 | |
Share-based compensation | 4,828 | 4,379 | 3,845 | |
Net effect of restricted and performance shares issued | (927) | (287) | (936) | |
Dividends to shareholders | (10,803) | (10,796) | (24,772) | |
Other comprehensive income (loss) | (314,891) | (58,943) | 38,272 | |
Net income (loss) | (402) | 144,124 | (175,727) | |
Ending balance | 1,104,018 | 1,428,387 | 1,349,210 | $ 1,511,913 |
Accounting Standards Update [Extensible List] | Accounting Standards Update 2018-07 [Member] | |||
Cumulative Effect, Period of Adoption, Adjustment | ||||
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning balance | (4,076) | |||
Ending balance | $ (4,076) | |||
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning balance | 633 | 632 | 631 | |
Net effect of restricted and performance shares issued | 1 | 1 | 1 | |
Ending balance | 634 | 633 | 632 | 631 |
Additional Paid-in Capital | ||||
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning balance | 392,941 | 388,150 | 384,551 | |
Common shares issued for compensation | 1,078 | 700 | 691 | |
Share-based compensation | 4,828 | 4,379 | 3,845 | |
Net effect of restricted and performance shares issued | (928) | (288) | (937) | |
Ending balance | 397,919 | 392,941 | 388,150 | 384,551 |
Accumulated Other Comprehensive Income (Loss) | ||||
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning balance | 16,284 | 75,227 | 36,955 | |
Other comprehensive income (loss) | (314,891) | (58,943) | 38,272 | |
Ending balance | (298,607) | 16,284 | 75,227 | 36,955 |
Retained Earnings | ||||
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning balance | 1,434,491 | 1,301,163 | 1,505,738 | |
Dividends to shareholders | (10,803) | (10,796) | (24,772) | |
Net income (loss) | (402) | 144,124 | (175,727) | |
Ending balance | 1,423,286 | 1,434,491 | 1,301,163 | 1,505,738 |
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | ||||
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning balance | (4,076) | |||
Ending balance | (4,076) | |||
Treasury Stock | ||||
Increase (Decrease) in Stockholders' Equity: | ||||
Beginning balance | (415,962) | (415,962) | (415,962) | |
Common Shares reacquired | (3,252) | |||
Common shares issued for compensation | 0 | 0 | ||
Ending balance | $ (419,214) | $ (415,962) | $ (415,962) | $ (415,962) |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | |||
Net premiums earned | $ 1,029,581,000 | $ 971,668,000 | $ 792,715,000 |
Net investment income | 95,972,000 | 70,522,000 | 71,998,000 |
Equity in earnings (loss) of unconsolidated subsidiaries | 4,888,000 | 48,974,000 | (11,921,000) |
Net investment gains (losses): | |||
Impairment losses | (1,772,000) | 0 | (1,745,000) |
Portion of impairment losses recognized in other comprehensive income (loss) before taxes | 14,000 | 0 | 237,000 |
Net impairment losses recognized in earnings | (1,758,000) | 0 | (1,508,000) |
Other net investment gains (losses) | (31,399,000) | 24,310,000 | 17,186,000 |
Total net investment gains (losses) | (33,157,000) | 24,310,000 | 15,678,000 |
Other income | 9,404,000 | 8,936,000 | 6,470,000 |
Total revenues | 1,106,688,000 | 1,124,410,000 | 874,940,000 |
Expenses | |||
Net losses and loss adjustment expenses | 776,762,000 | 752,249,000 | 661,447,000 |
Underwriting, policy acquisition and operating expenses: | |||
Operating expense | 174,163,000 | 157,641,000 | 127,316,000 |
DPAC amortization | 133,175,000 | 110,605,000 | 110,565,000 |
SPC U.S. federal income tax expense | 1,759,000 | 1,947,000 | 1,746,000 |
SPC dividend expense (income) | 6,673,000 | 10,050,000 | 14,304,000 |
Interest expense | 20,372,000 | 19,719,000 | 15,503,000 |
Goodwill impairment | 0 | 0 | 161,115,000 |
Total expenses | 1,112,904,000 | 1,052,211,000 | 1,091,996,000 |
Gain on bargain purchase | 0 | 74,408,000 | 0 |
Income (loss) before income taxes | (6,216,000) | 146,607,000 | (217,056,000) |
Provision for income taxes: | |||
Current expense (benefit) | 807,000 | 1,164,000 | (20,181,000) |
Deferred expense (benefit) | (6,621,000) | 1,319,000 | (21,148,000) |
Total income tax expense (benefit) | (5,814,000) | 2,483,000 | (41,329,000) |
Net income (loss) | (402,000) | 144,124,000 | (175,727,000) |
Other comprehensive income (loss), after tax, net of reclassification adjustments | (314,891,000) | (58,943,000) | 38,272,000 |
Comprehensive income (loss) | $ (315,293,000) | $ 85,181,000 | $ (137,455,000) |
Earnings (loss) per share: | |||
Basic (in dollars per share) | $ (0.01) | $ 2.67 | $ (3.26) |
Diluted (in dollars per share) | $ (0.01) | $ 2.67 | $ (3.26) |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 54,008 | 53,962 | 53,863 |
Diluted (in shares) | 54,140 | 54,058 | 53,906 |
Cash dividends declared per common share (in dollars per share) | $ 0.20 | $ 0.20 | $ 0.46 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Activities | |||
Net income (loss) | $ (402,000) | $ 144,124,000 | $ (175,727,000) |
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: | |||
Goodwill impairment | 0 | 0 | 161,115,000 |
Gain on bargain purchase | 0 | (74,408,000) | 0 |
Depreciation and amortization, net of accretion | 38,063,000 | 37,247,000 | 21,375,000 |
(Increase) decrease in cash surrender value of BOLI | 21,000 | (1,339,000) | (1,735,000) |
Net investment (gains) losses | 33,157,000 | (24,310,000) | (15,678,000) |
Share-based compensation | 4,829,000 | 4,390,000 | 3,840,000 |
Deferred income tax expense (benefit) | (6,621,000) | 1,319,000 | (21,148,000) |
Policy acquisition costs, net of amortization (net deferral) | 792,000 | (11,744,000) | 8,371,000 |
Equity in (earnings) loss of unconsolidated subsidiaries | (4,888,000) | (48,974,000) | 11,921,000 |
Distributed earnings from unconsolidated subsidiaries | 30,278,000 | 35,164,000 | 36,672,000 |
Other, net | (571,000) | (401,000) | 2,409,000 |
Change in: | |||
Premiums receivable | (4,999,000) | 71,205,000 | 42,985,000 |
Reinsurance related assets and liabilities | 20,476,000 | 16,925,000 | (2,047,000) |
Other assets | 12,076,000 | 12,713,000 | (13,721,000) |
Reserve for losses and loss adjustment expenses | (108,793,000) | (19,684,000) | 70,653,000 |
Unearned premiums | (11,011,000) | (105,986,000) | (51,539,000) |
Other liabilities | (32,248,000) | 37,729,000 | 14,597,000 |
Net cash provided (used) by operating activities | (29,841,000) | 73,970,000 | 92,343,000 |
Purchases of: | |||
Fixed maturities, available-for-sale | (607,790,000) | (1,438,169,000) | (917,037,000) |
Equity investments | (34,907,000) | (156,747,000) | (69,406,000) |
Other investments | (38,873,000) | (73,957,000) | (35,616,000) |
Investment in unconsolidated subsidiaries | (39,488,000) | (49,650,000) | (40,093,000) |
Proceeds from sales or maturities of: | |||
Fixed maturities, available-for-sale | 542,855,000 | 1,077,379,000 | 801,580,000 |
Equity investments | 78,550,000 | 440,921,000 | 196,762,000 |
Other investments | 34,794,000 | 59,055,000 | 35,524,000 |
Net sales or (purchases) of fixed maturities, trading | (499,000) | 4,236,000 | (383,000) |
Return of invested capital from unconsolidated subsidiaries | 44,464,000 | 65,362,000 | 40,068,000 |
Net sales or maturities (purchases) of short-term investments | (27,789,000) | 181,619,000 | 2,361,000 |
Unsettled security transactions, net change | (6,302,000) | 29,841,000 | (12,756,000) |
Purchases of capital assets | (4,353,000) | (3,840,000) | (7,478,000) |
Cash paid for acquisitions, net of cash acquired | 0 | (221,576,000) | 0 |
Other | (2,659,000) | 0 | (2,010,000) |
Net cash provided (used) by investing activities | (61,997,000) | (85,526,000) | (8,484,000) |
Financing Activities | |||
Repayments of Mortgage Loans | 0 | (36,113,000) | (1,502,000) |
Repurchase of common stock | (3,252,000) | 0 | 0 |
Dividends to shareholders | (10,768,000) | (10,758,000) | (38,664,000) |
Capital contribution received from (return of capital to) external segregated portfolio cell participants | (8,928,000) | (10,376,000) | (2,345,000) |
Purchase of non-controlling interest | 0 | (3,089,000) | 0 |
Other | 1,143,000 | (288,000) | (935,000) |
Net cash provided (used) by financing activities | (21,805,000) | (60,624,000) | (43,446,000) |
Increase (decrease) in cash and cash equivalents | (113,643,000) | (72,180,000) | 40,413,000 |
Cash and cash equivalents at beginning of period | 143,602,000 | 215,782,000 | 175,369,000 |
Cash and cash equivalents at end of period | 29,959,000 | 143,602,000 | 215,782,000 |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid (refunded) during the year for income taxes, net | 2,340,000 | (9,512,000) | (8,832,000) |
Cash paid during the year for interest | 19,679,000 | 14,502,000 | 14,712,000 |
Significant Non-Cash Transactions | |||
Operating ROU assets obtained in exchange for operating lease liabilities | 3,133,000 | 5,687,000 | 1,351,000 |
Dividends declared and not yet paid | 2,698,000 | 2,698,000 | 2,694,000 |
Fair value of Contribution Certificates issued in NORCAL acquisition | 0 | 174,999,000 | 0 |
Fair value of contingent consideration in NORCAL acquisition | 15,000,000 | 24,000,000 | 0 |
Increase (decrease) in fair value of contingent consideration issued in NORCAL acquisition | $ (9,000,000) | $ 0 | $ 0 |
Accounting Policies
Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Organization and Nature of Business ProAssurance Corporation (ProAssurance, PRA or the Company), a Delaware corporation, is an insurance holding company primarily for wholly owned specialty property and casualty and workers' compensation insurance entities including an entity that provides capital to Syndicate 1729 at Lloyd's. Risks insured are primarily liability risks located within the U.S. ProAssurance operates in five reportable segments as follows: Specialty P&C, Workers' Compensation Insurance, Segregated Portfolio Cell Reinsurance, Lloyd's Syndicates and Corporate. For more information on the Company's segment reporting, including the nature of products and services provided and financial information by segment, refer to Note 16. Principles of Consolidation The accompanying consolidated financial statements include the accounts of ProAssurance Corporation, its wholly owned subsidiaries and VIEs in which ProAssurance is the primary beneficiary. See Note 14 for more information on ProAssurance's VIE interests. Investments in entities where ProAssurance holds a greater than minor interest but does not hold a controlling interest are accounted for using the equity method. All significant intercompany accounts and transactions are eliminated in consolidation. ProAssurance subsidiaries located in the U.K. are normally reported on a quarter lag due to timing issues regarding the availability of information, except when information is available that is material to the current period. Furthermore, investment results associated with ProAssurance's FAL investments and certain U.S. paid administrative expenses are reported concurrently as that information is available on an earlier time frame. Basis of Presentation The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosures related to these amounts at the date of the financial statements. Change in Accounting Estimate Beginning in 2022, ProAssurance revised its process for estimating ULAE as a result of substantially integrating NORCAL into the Specialty P&C segment operations. ULAE are costs that cannot be attributed to processing a specific claim and are allocated to net losses and loss adjustment expenses on the Consolidated Statement of Income and Comprehensive Income. ProAssurance accounted for this change prospectively as a change in accounting estimate. Changes in accounting estimate are reflected prospectively beginning in the period the change in estimate occurs. For the year ended December 31, 2022, the change in the Company's estimate of ULAE resulted in an increase of $25.4 million to underwriting, policy acquisition and operating expenses with an offsetting decrease of $25.4 million to net losses and loss adjustment expenses when compared to amounts that would have been estimated as ULAE under the Company's previous methodology. There was no impact on total expenses or net income (loss) in the Company's Consolidated Statement of Income and Comprehensive Income for the year ended December 31, 2022 as a result of this change in the estimate. Accounting Policies The significant accounting policies followed by ProAssurance in making estimates that materially affect financial reporting are summarized in these Notes to Consolidated Financial Statements. The Company evaluates these estimates and assumptions on an ongoing basis based on current and historical developments, market conditions, industry trends and other information that the Company believes to be reasonable under the circumstances. The Company can make no assurance that actual results will conform to its estimates and assumptions; reported results of operations may be materially affected by changes in these estimates and assumptions. Recognition of Revenues Insurance premiums are recognized as revenues pro rata over the terms of the policies, which are principally one year in duration. Losses and Loss Adjustment Expenses ProAssurance establishes its reserve for losses and LAE ("reserve for losses" or "reserve") based on estimates of the future amounts necessary to pay claims and expenses associated with the investigation and settlement of claims. The reserve for losses is determined on the basis of individual claims and payments thereon as well as actuarially determined estimates of future losses based on past loss experience, available industry data and projections as to future claims frequency, severity, inflationary trends, judicial trends, legislative changes and settlement patterns. Management establishes the reserve for losses after taking into consideration a variety of factors including premium rates, historical paid and incurred loss development trends, and management's evaluation of the current loss environment including frequency, severity, expected effect of inflation, general economic and social trends, and the legal and political environment. Management also takes into consideration the conclusions reached by internal and consulting actuaries. Management updates and reviews the data underlying the estimation of the reserve for losses each reporting period and makes adjustments to loss estimation assumptions that best reflect emerging data. Both internal and consulting actuaries perform an in-depth review of the reserve for losses on at least a semi-annual basis using the loss and exposure data of ProAssurance's subsidiaries. Consulting actuaries provide reports to management regarding the adequacy of reserves. Estimating casualty insurance reserves, and particularly long-tailed insurance reserves, is a complex process. Long-tailed insurance is characterized by the extended period of time typically required both to assess the viability of a claim and potential damages, if any, and to reach a resolution of the claim. For a high proportion of the risks insured or reinsured by ProAssurance, the period of time required to resolve a claim is often five years or more, and claims may be subject to litigation. Estimating losses for these long-tailed claims requires ProAssurance to make and revise judgments and assessments regarding multiple uncertainties over an extended period of time. As a result, reserve estimates may vary significantly from the eventual outcome. Reserve estimates and the assumptions on which these estimates are predicated are regularly reviewed and updated as new information becomes available. Any adjustments necessary are reflected in current operations. Due to the size of ProAssurance’s reserve for losses, even a small percentage adjustment to these estimates could have a material effect on earnings in the period in which the adjustment is made, as was the case in 2022, 2021 and 2020. See Note 8 for additional information on ProAssurance's reserve for losses and LAE. The effect of adjustments made to reinsured losses is mitigated by the corresponding adjustment that is made to reinsurance recoveries. Thus, in any given year, ProAssurance may make significant adjustments to gross losses that have little effect on its net losses. Reinsurance Receivables ProAssurance enters into reinsurance agreements whereby other insurance entities agree to assume a portion of the risk associated with certain policies issued by ProAssurance. In return, ProAssurance agrees to pay a premium to the reinsurer. ProAssurance uses reinsurance to provide capacity to write larger limits of liability, to provide reimbursement for losses incurred under the higher limit coverages the Company offers, to provide protection against losses in excess of policy limits, and, in the case of risk sharing arrangements, to align the Company's objectives with those of its strategic business partners and to provide custom insurance solutions for large customer groups. Receivable from reinsurers on paid losses and LAE is the estimated amount of losses already paid that will be recoverable from reinsurers. Receivable from reinsurers on unpaid losses and LAE is the estimated amount of future loss payments that will be recoverable from reinsurers. Reinsurance recoveries are the portion of losses incurred during the period that are estimated to be allocable to reinsurers. Premiums ceded are the estimated premiums that will be due to reinsurers with respect to premiums earned and losses incurred during the period. These estimates are based upon management’s estimates of ultimate losses and the portion of those losses that are allocable to reinsurers under the terms of the related reinsurance agreements. Given the uncertainty inherent in management's estimate of the ultimate amounts of losses, these estimates may vary significantly from the ultimate outcome. Management regularly reviews these estimates and any adjustments necessary are reflected in the period in which the estimate is changed. Due to the size of the receivable from reinsurers, an adjustment to these estimates could have a material effect on ProAssurance's results of operations for the period in which the adjustment is made. Reinsurance contracts do not relieve ProAssurance from its obligations to policyholders. ProAssurance continually monitors its reinsurers to minimize its exposure to significant credit losses from reinsurer insolvencies (see additional discussion below under the heading "Credit Losses"). Any amount determined to be uncollectible is written off in the period in which the uncollectible amount is identified. See Note 5 for further information. Credit Losses ProAssurance's premiums receivable and reinsurance receivables are exposed to credit losses, but to-date have not experienced any significant amount of credit losses. ProAssurance measures expected credit losses on its premiums receivables and reinsurance receivables on a collective (pool) basis when similar risk characteristics exist, and the Company will reassess its pools each reporting period to ensure all receivables within the pool continue to share similar risk characteristics. If the Company determines that a receivable does not share risk characteristics with its other receivables within a pool, it will evaluate that receivable for expected credit losses on an individual basis. ProAssurance measures expected credit losses associated with its premium receivables at the segment level as each segment’s premium receivables share similar risk characteristics including term, type of financial asset and similar historical and expected credit loss patterns. ProAssurance measures expected credit losses associated with its reinsurance receivables (related to both paid and unpaid losses) at the consolidated level as its reinsurance receivables share similar risk characteristics including type of financial asset, type of industry and similar historical and expected credit loss patterns. ProAssurance measures expected credit losses over the contractual term of each pool utilizing a loss rate method. Historical internal credit loss experience for each pool is the basis for the Company’s assessment of expected credit losses; however, the Company may also consider historical credit loss information from external sources. In addition to historical credit loss data, the Company also considers reasonable and supportable forecasts of future economic conditions in its estimate of expected credit losses by utilizing industry and macroeconomic factors that it believes most relevant to the collectability of each pool. ProAssurance's available-for-sale fixed maturity investments are also exposed to credit losses. See Note 4 for information on ProAssurance's allowance for expected credit losses on its available-for-sale fixed maturities. ProAssurance's premiums receivable on its Consolidated Balance Sheet as of December 31, 2022 and 2021 is reported net of the related allowance for expected credit losses of $7.7 million and $7.4 million, respectively. The following tables present a roll forward of the allowance for expected credit losses related to the Company's premiums receivable for the years ended December 31, 2022 and 2021. (In thousands) Premiums Receivable, Net Allowance for Expected Credit Losses Balance, December 31, 2021 $ 241,095 $ 7,436 Provision for expected credit losses 564 Write offs charged against the allowance (674) Recoveries of amounts previously written off 332 Balance, December 31, 2022 $ 246,094 $ 7,658 (In thousands) Premiums Allowance for Expected Credit Losses Balance, December 31, 2020 $ 201,395 $ 6,131 Initial allowance recognized in the period for NORCAL premiums receivable (1) 2,137 Provision for expected credit losses 439 Write offs charged against the allowance (1,533) Recoveries of amounts previously written off 262 Balance, December 31, 2021 $ 241,095 $ 7,436 (1) Represents an initial allowance for expected credit losses recognized during the second quarter of 2021 for NORCAL's premiums receivable to conform NORCAL to ProAssurance's accounting policies. ProAssurance's expected credit losses associated with its reinsurance receivables (related to both paid and unpaid losses) were nominal in amount as of December 31, 2022 and 2021. ProAssurance has other financial assets and off-balance-sheet commitments that are exposed to credit losses; however, expected credit losses associated with these assets and commitments were nominal in amount as of December 31, 2022 and 2021. Retroactive Insurance Contracts In certain instances, ProAssurance’s insurance contracts cover losses both on a prospective basis and retroactive basis, and accordingly, ProAssurance bifurcates the prospective and retroactive provisions of these contracts and accounts for each component separately, where practicable. Under the retroactive provisions of a contract, all premiums received and losses assumed are recognized immediately in earnings at the inception of the contract as all of the underlying loss events occurred in the past. If the estimated losses assumed differ from the premium received related to the retroactive provision of a contract, the resulting difference is deferred and recognized over the estimated claim payment period with the periodic amortization reflected in earnings as a component of net losses and LAE. Deferred gains are included as a component of the reserve for losses and LAE, and deferred losses are included as a component of other assets on the Consolidated Balance Sheets. Subsequent changes to the estimated timing or amount of future loss payments in relation to the losses assumed under retroactive provisions also produce changes in deferred balances. Changes in such estimates are applied retrospectively, and the resulting changes in deferred balances, together with periodic amortization, are included in earnings in the period of change. Investments Recurring Fair Value Measurements Fair values of investment securities are primarily provided by independent pricing services. The pricing services provide an exchange-traded price, if available, or provide an estimated price determined using multiple observable inputs, including exchange-traded prices for similar assets. Management reviews valuations of securities obtained from the pricing services for accuracy based upon the specifics of the security, including class, maturity, credit rating, durations, collateral and comparable markets for similar securities. Multiple observable inputs are not available for certain of the Company's investments, including corporate debt not actively traded, certain asset-backed securities and investments in LPs/LLCs. Management values the corporate debt not actively traded and the other asset-backed securities either using dealer quotes for similar securities or discounted cash flow models using yields currently available for similar securities. Management values certain investment funds, primarily LPs/LLCs, based on the NAV of the interest held, as provided by the fund. Nonrecurring Fair Value Measurements Management measures the fair value of certain assets on a nonrecurring basis when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. These assets include investments carried principally at cost, investments in tax credit partnerships, fixed assets, goodwill and other intangible assets. These assets would also include any equity method investments that do not provide a NAV. Fixed Maturities Fixed maturities are considered as either available-for-sale or trading securities. Available-for-sale securities are carried at fair value, determined as described above and in Note 3. Exclusive of impairment losses, discussed in a separate section that follows, unrealized holding gains and losses on available-for-sale securities are included, net of related tax effects, as a component of OCI in the Consolidated Statement of Income and Comprehensive Income during the period of change and as a component of AOCI in shareholders' equity on the Consolidated Balance Sheet. Investment income includes amortization of premium and accretion of discount related to available-for-sale debt securities acquired at other than par value. Debt securities and mandatorily redeemable preferred stock with maturities beyond one year when purchased are classified as fixed maturities. Trading securities are carried at fair value, determined as described above, with the unrealized holding gains and losses included as a component of net investment gains (losses) in the Consolidated Statement of Income and Comprehensive Income during the period of change. Equity Investments Equity investments are carried at fair value, as described above, with the holding gains and losses included as a component of net investment gains (losses) in the Consolidated Statement of Income and Comprehensive Income during the period of change. Equity investments are primarily comprised of bond funds, stocks, and investment funds. Short-term Investments Short-term investments, which have a maturity at purchase of one year or less, are primarily comprised of investments in U.S. Treasury obligations, commercial paper and money market funds. All balances are carried at fair value which approximates the cost of the securities due to their short-term nature. Other Investments Investments in convertible bond securities are carried at fair value as permitted by the accounting guidance for hybrid financial instruments, with changes in fair value recognized in earnings as a component of net investment gains (losses) during the period of change. Interest on convertible bond securities is recorded on an accrual basis based on contractual interest rates and is included in net investment income. Investment in Unconsolidated Subsidiaries Equity investments, primarily investments in LPs/LLCs, where ProAssurance is deemed to have influence because it holds a greater than a minor interest are accounted for using the equity method. Under the equity method, the recorded basis of the investment is adjusted each period for the investor’s pro rata share of the investee’s income or loss. Investments in unconsolidated subsidiaries include tax credit partnerships accounted for using the equity method, whereby ProAssurance’s proportionate share of income or loss is included in equity in earnings (loss) of unconsolidated subsidiaries. Tax credits received from the partnerships are recognized in the period received in the Consolidated Statements of Income and Comprehensive Income as either a reduction to current tax expense or as a component of deferred tax expense if they cannot be utilized in the period received. Business Owned Life Insurance ProAssurance owns life insurance contracts on certain management employees, which includes policies acquired from NORCAL. The life insurance contracts are carried at their current cash surrender value. Changes in the cash surrender value are included in earnings in the current period as investment income. Death benefit proceeds from the contracts are recorded when the proceeds become payable under the policy terms. Realized Gains and Losses Realized investment gains and losses are recognized on the first-in, first-out basis for GAAP purposes and on the specific identification basis for tax purposes. Impairments ProAssurance evaluates its available-for-sale investment securities, which at December 31, 2022 and 2021 consisted entirely of fixed maturity securities, on at least a quarterly basis for the purpose of determining whether declines in fair value below recorded cost basis represent a credit loss. The Company considers a credit loss to have occurred: • if there is intent to sell the security; • if it is more likely than not that the security will be required to be sold before full recovery of its amortized cost basis; or • if the entire amortized basis of the security is not expected to be recovered. The assessment of whether the amortized cost basis of a security is expected to be recovered requires the Company to make assumptions regarding various matters affecting future cash flows. The choice of assumptions is subjective and requires the use of judgment. Actual credit losses experienced in future periods may differ from the Company’s current estimates of those credit losses. Methodologies used to estimate the present value of expected cash flows are: The estimate of expected cash flows is determined by projecting a recovery value and a recovery time frame and assessing whether further principal and interest will be received. ProAssurance considers various factors in projecting recovery values and recovery time frames, including the following: • third-party research and credit rating reports; • the current credit standing of the issuer, including credit rating downgrades, whether before or after the balance sheet date; • the extent to which the decline in fair value is attributable to credit risk specifically associated with the security or its issuer; • internal assessments and the assessments of external portfolio managers regarding specific circumstances surrounding an investment, which indicate the investment is more or less likely to recover its amortized cost than other investments with a similar structure; • for asset-backed securities, the origination date of the underlying loans, the remaining average life, the probability that credit performance of the underlying loans will deteriorate in the future and ProAssurance's assessment of the quality of the collateral underlying the loan; • failure of the issuer of the security to make scheduled interest or principal payments; • any changes to the rating of the security by a rating agency; • recoveries or additional declines in fair value subsequent to the balance sheet date; • adverse legal or regulatory events; • significant deterioration in the market environment that may affect the value of collateral (e.g., decline in real estate prices); • significant deterioration in economic conditions; and • disruption in the business model resulting from changes in technology or new entrants to the industry. If deemed appropriate and necessary, a discounted cash flow analysis is performed to confirm whether a credit loss exists and, if so, the amount of the credit loss. ProAssurance uses the single best estimate approach for available-for-sale debt securities and considers all reasonably available data points, including industry analyses, credit ratings, expected defaults and the remaining payment terms of the debt security. For fixed rate available-for-sale debt securities, cash flows are discounted at the security's effective interest rate implicit in the security at the date of acquisition. If the available-for-sale debt security’s contractual interest rate varies based on subsequent changes in an independent factor, such as an index or rate, for example, the prime rate, the LIBOR, or the U.S. Treasury bill weekly average, that security’s effective interest rate is calculated based on the factor as it changes over the life of the security. If ProAssurance intends to sell a debt security or believes it will more likely than not be required to sell a debt security before the amortized cost basis is recovered, any existing allowance will be written off against the security's amortized cost basis, with any remaining difference between the debt security's amortized cost basis and fair value recognized as an impairment loss in earnings. Exclusive of securities where there is an intent to sell or where it is not more likely than not that the security will be required to be sold before recovery of its amortized cost basis, impairment for debt securities is separated into a credit component and a non-credit component. The credit component of an impairment is the difference between the security’s amortized cost basis and the present value of its expected future cash flows, while the non-credit component is the remaining difference between the security’s fair value and the present value of expected future cash flows. An allowance for expected credit losses will be recorded for the expected credit losses through income and the non-credit component is recognized in OCI. The amount of impairment recognized is limited to the excess of the amortized cost over the fair value of the available-for-sale debt security. Cash and Cash Equivalents For purposes of the Consolidated Balance Sheets and Consolidated Statements of Cash Flows, ProAssurance considers all demand deposits and overnight investments to be cash equivalents. Foreign Currency The functional currency of all ProAssurance foreign subsidiaries is the U.S. dollar. In recording foreign currency transactions, revenue and expense items are converted to U.S. dollars at the exchange rate prevailing at the transaction date. Monetary assets and liabilities originating in currencies other than the U.S. dollar are remeasured to U.S. dollars at the rates of exchange in effect as of the balance sheet date. The resulting foreign currency gains or losses are recognized in the Consolidated Statements of Income and Comprehensive Income as a component of other income. Monetary assets and liabilities include investments, cash and cash equivalents, accrued expenses and other liabilities. In addition, monetary assets and liabilities include certain premiums receivable and reserve for losses and LAE as a result of reinsurance transactions conducted with foreign cedents denominated in their local functional currencies. Pension As a result of the NORCAL acquisition, the Company sponsors a frozen qualified defined benefit pension plan which covers substantially all NORCAL employees (except those that were previous employees of Medicus Insurance Company and FD Insurance Company, employees of PPM RRG as well as new hires after December 31, 2013). Accounting for pension benefits requires the use of assumptions for the valuation of the PBO and the expected performance of the plan assets. The Company uses December 31 as the measurement date for calculating its obligation related to this defined benefit pension plan and for estimating net periodic benefit cost (income) for the subsequent year. The PBO for pension benefits represents the present value of all future benefits earned as of the measurement date for vested and non-vested employees. At each measurement date, the Company reviews the various assumptions impacting the amounts recorded for the pension plan including the discount rates, which impacts the recorded value of the PBO and interest costs, and the expected return on plan assets. To estimate the discount rate at the measurement date, the Company uses a bond yield curve model, developed based on pricing and yield information for high quality corporate bonds. The assumption for the expected return on plan assets is based on the anticipated returns that will be earned by the portfolio over the long term. The expected return is influenced, but not determined, by historical portfolio performance. Accounting standards provide for the delayed recognition of differences between actual results and expected or estimated results. This delayed recognition of the differences is amortized into earnings over time. The differences between actual results and expected or estimated results are recognized in full in AOCI. Amounts recognized in AOCI are reclassified to earnings in a systematic manner over the average future service period of participants. Deferred Policy Acquisition Costs; Ceding Commission Income Costs that vary with and are directly related to the successful production of new and renewal premiums (primarily premium taxes, commissions and underwriting salaries) are deferred to the extent they are recoverable against unearned premiums and are amortized as related premiums are earned. Unearned ceding commission income is reported as an offset to DPAC, and ceding commission earned is reported as an offset to DPAC amortization. ProAssurance evaluates the recoverability of DPAC typically at the segment level each reporting period, or in a manner that is consistent with the way the Company manages its business. Any amounts estimated to be unrecoverable are charged to expense in the current period. As part of the evaluation of the recoverability of DPAC, ProAssurance also evaluates unearned premium for premium deficiencies. A premium deficiency is recognized if the sum of anticipated losses and loss adjustment expenses, unamortized DPAC and maintenance costs, net of anticipated investment income, exceeds the related unearned premium. If a premium deficiency is identified, the associated DPAC is written off, and a PDR is recorded for the excess deficiency as a component of net losses and loss adjustment expenses in the Consolidated Statements of Income and Comprehensive Income and as a component of the reserve for losses on the Consolidated Balance Sheets. Income Taxes/Deferred Taxes ProAssurance files a consolidated federal income tax return. Tax-related interest and penalties are recognized as components of tax expense. ProAssurance evaluates tax positions taken on tax returns and recognizes positions in the financial statements when it is more likely than not that the position will be sustained upon resolution with a taxing authority. If recognized, the benefit is measured as the largest amount of benefit that has a greater than fifty percent probability of being realized. Uncertain tax positions are reviewed each period by considering changes in facts and circumstances, such as changes in tax law, interactions with taxing authorities and developments in case law, and adjustments would be made if considered necessary. Adjustments to unrecognized tax benefits may affect income tax expense, and the settlement of uncertain tax positions may require the use of cash. Other than differences related to timing, no significant adjustments were considered necessary during the years ended December 31, 2022 or 2021. Deferred federal income taxes arise from the recognition of temporary differences between the basis of assets and liabilities determined for financial reporting purposes and the basis determined for income tax purposes. ProAssurance’s temporary differences principally relate to loss reserves, unearned and advanced premiums, DPAC, NOL and tax credit carryforwards, compensation related items, unrealized investment gains (losses) and basis differentials in fixed assets, intangible assets and operating leases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to be in effect when such benefits are realized. ProAssurance reviews its deferred tax assets quarterly for impairment. If management determines that it is more likely than not that some or all of a deferred tax asset will not be realized, a valuation allowance is recorded to reduce the carrying value of the asset. In assessing the need for a valuation allowance, management is required to make certain judgments and assumptions about the future operations of ProAssurance based on historical experience and information as of the measurement period regarding reversal of existing temporary differences, carryback capacity, future taxable income of the appropriate character (including its capital and operating characteristics) and tax planning strategies. Goodwill/Intangibles Intangible Assets Intangible assets with definite lives are amortized over the estimated useful life of the asset. Amortizable intangible assets primarily consist of policyholder relationships, renewal rights and trade names. Intangible assets with an indefinite life, primarily state licenses, are not amortized. Indefinite lived intangible assets are evaluated for impairment on an annual basis or upon the |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | Business Combination On May 5, 2021, ProAssurance completed its acquisition of NORCAL by purchasing 98.8% of its stock in exchange for total consideration transferred of $448.8 million. On September 16, 2021, ProAssurance acquired the remaining 1.2% interest in NORCAL for $3.1 million of cash. ProAssurance accounted for its acquisition of NORCAL in accordance with GAAP relating to business combinations. No entities were acquired during 2022. The NORCAL transaction provides strategic and financial benefits including additional scale and geographic diversification in the physician professional liability market. On May 5, 2021, ProAssurance funded the acquisition with $248.0 million of cash on hand, and NORCAL paid $1.8 million to policyholders who elected to receive a discounted cash option for their allocated share of the converted company's equity. Additional consideration transferred, with a principal amount of $191.0 million and a fair value of $175.0 million, was in the form of Contribution Certificates issued to certain NORCAL policyholders in the conversion, and those instruments are an obligation of NORCAL Insurance Company, the successor of NORCAL Mutual Insurance Company (see Note 11 for further discussion of the terms of the Contribution Certificates). Policyholders who tendered NORCAL stock to ProAssurance are also eligible for a share of contingent consideration in an amount of up to approximately $84.0 million depending upon the after-tax development of NORCAL's ultimate net losses between December 31, 2020 and December 31, 2023. During the fourth quarter of 2022, the Company recorded a gain of $9.0 million related to the change in fair value of this contingent consideration as a component of net investment gains (losses) in ProAssurance's Consolidated Statements of Income and Comprehensive Income. The estimated fair value of this contingent consideration was $15.0 million as of December 31, 2022 and $24.0 million as of May 5, 2021 and December 31, 2021 carried as a component of other liabilities on ProAssurance's Consolidated Balance Sheet (see Note 3). ProAssurance's results for the years ended December 31, 2022 and 2021 included NORCAL's results (revenue of $299.1 million and $230.3 million, respectively, and net income of $12.6 million and $9.7 million, respectively). ProAssurance incurred expenses related to the acquisition of approximately $1.9 million, $25.0 million, and $1.8 million during the years ended December 31, 2022, 2021 and 2020, respectively. These expenses were included as a component of operating expenses in the period incurred in ProAssurance's Consolidated Statements of Income and Comprehensive Income. A $74.4 million gain on bargain purchase was recognized on the date of the acquisition as the fair value of the consideration transferred was less than the fair value of the net assets acquired. This gain is presented as a separate line item in ProAssurance's Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2021. ProAssurance believes it was able to acquire NORCAL for less than the fair value of its net assets due to several contributing factors including the soft medical professional liability market at the time the transaction was initially announced and the value attributed to certain assets. The fair value of the reserve for losses and loss adjustment expenses and related reinsurance recoverables was based on three components: an actuarial estimate of the expected future net cash flows, a reduction to those cash flows for the time value of money determined utilizing the U.S. Treasury Yield Curve and a risk margin adjustment to reflect the net present value of profit that an investor would demand in return for the assumption of the development risk associated with the reserve. The fair value of the net reserve, including the risk margin adjustment and related reinsurance receivables, exceeded the actuarial estimate of NORCAL’s undiscounted loss reserve as of May 5, 2021. On May 5, 2021, the fair value adjustment on the gross reserve of approximately $42.2 million was recorded to the reserve for losses and loss adjustment expenses and the fair value adjustment on the related reinsurance recoverables of approximately $3.5 million was recorded to the receivable from reinsurers on unpaid losses and loss adjustment expenses on the Consolidated Balance Sheets. These net fair value adjustments of $38.7 million will be amortized over a period utilizing loss payment patterns as a net reduction to prior accident year net losses and loss adjustment expenses. The fair values of intangible assets were determined based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Intangible assets were identified that met either the separability criterion or the contractual-legal criterion under the acquisition method of accounting. Intangible assets acquired included the following: (In thousands) Fair Value on Acquisition Date Useful Life Trade name $ 1,000 3 Licenses 13,000 Indefinite Total $ 14,000 The fair value of VOBA was determined based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date estimated using the income approach. The estimated negative VOBA recorded on the assumed unearned premium of $12.4 million was recorded to the reserve for losses and loss adjustment expenses and the fair value adjustment on the related reinsurance recoverables of $0.7 million was recorded to receivable from reinsurers on unpaid losses and loss adjustment expenses on the Consolidated Balance Sheets. The net VOBA on unearned premium of $11.7 million will be amortized over a period in proportion to the earn-out of the premium as a reduction to current accident year net losses and loss adjustment expenses. The negative VOBA recorded on the assumed DDR reserve totaling $3.5 million was also recorded to the reserve for losses and loss adjustment expenses on the Consolidated Balance Sheets and will be amortized over a period in proportion to the approximate consumption of losses as a reduction to prior accident year net losses and loss adjustment expenses. ProAssurance recognized a total of approximately $15.8 million and $14.6 million during the years ended December 31, 2022 and 2021, respectively, related to the amortization of the fair value adjustment on the net reserve for losses and loss adjustment expenses, the negative net VOBA recorded on the assumed unearned premium and negative VOBA recorded on the DDR reserve. The following table details the amortization of the fair value adjustments recognized for the year ended December 31, 2022 and the remaining expected amortization of these adjustments for the three years following December 31, 2022 and thereafter. (In thousands) Amount at May 5, 2021 Amortization period (years) 2022 Remaining expected pre-tax amortization 2023 2024 2025 Thereafter Fair value adjustment on reserves, net (1) $ 38,701 7 $ 10,595 $ 8,090 $ 5,083 $ 3,107 $ 4,058 Unearned premium VOBA, net (2) 11,676 1 4,939 — — — — DDR reserve VOBA (1) 3,467 15 224 243 243 243 2,375 Total $ 53,844 $ 15,758 $ 8,333 $ 5,326 $ 3,350 $ 6,433 (1) Amortization will be recorded as a reduction to prior accident year net losses and loss adjustment expenses. (2) Amortization was recorded as a reduction to current accident year net losses and loss adjustment expenses. As of June 30, 2022, the negative VOBA was fully amortized. Unaudited Supplemental Pro Forma Information The following table provides Pro Forma Consolidated Results and Actual Consolidated Results for the years ended December 31, 2021 and 2020 as if the NORCAL transaction had occurred on January 1, 2020. The pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the operating results that may have actually occurred had the acquisition of NORCAL been completed on January 1, 2020. In addition, the unaudited pro forma financial information does not give effect to any anticipated cost savings, operating efficiencies or other synergies that may be associated with the acquisition, or any estimated costs that have been or will be incurred to integrate the assets and operations of NORCAL. Year Ended December 31 (In thousands) 2021 2020 Revenue: ProAssurance Pro Forma Consolidated Results $ 1,247,272 $ 1,275,459 ProAssurance Actual Consolidated Results $ 1,124,410 $ 874,940 Net income (loss): ProAssurance Pro Forma Consolidated Results $ 88,223 $ (113,557) ProAssurance Actual Consolidated Results $ 144,124 $ (175,727) The ProAssurance Pro Forma Consolidated Results reflect pro forma adjustments, net of related tax effects, to give effect to certain events that are directly attributable to the acquisition. These pro forma adjustments primarily include: • The addition of NORCAL's operating results prior to the acquisition to ProAssurance's Actual Consolidated Results in all periods shown. • A reduction in expenses for the year ended December 31, 2021 and a corresponding increase for the year ended December 31, 2020 for transaction-related costs, including other costs associated with the acquisition such as compensation costs related to change in control payments. • The effect of the amortization of intangible assets, VOBA and the fair value adjustment on the reserve. See previous amortization schedules for reference. • The non-taxable gain on bargain purchase of $74.4 million that was included in ProAssurance's Actual Consolidated Results for the year ended December 31, 2021 has been reported in the Pro Forma Consolidated Results as being recognized during the year ended December 31, 2020. • An adjustment to net investment income for the amortization of the fair value adjustment to NORCAL's investments. • An increase to interest expense for the interest on the Contribution Certificates (see Note 11 for further discussion of the terms of the Contribution Certificates). |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three level hierarchy has been established for valuing assets and liabilities based on how transparent (observable) the inputs are that are used to determine fair value, with the inputs considered most observable categorized as Level 1 and those that are the least observable categorized as Level 3. Hierarchy levels are defined as follows: Level 1: quoted (unadjusted) market prices in active markets for identical assets and liabilities. For ProAssurance, Level 1 inputs are generally quotes for securities actively traded in exchange or over-the-counter markets. Level 2: market data obtained from sources independent of the reporting entity (observable inputs). For ProAssurance, Level 2 inputs generally include quoted prices in markets that are not active, quoted prices for similar assets or liabilities, and results from pricing models that use observable inputs such as interest rates and yield curves that are generally available at commonly quoted intervals. Level 3: the reporting entity’s own assumptions about market participant assumptions based on the best information available in the circumstances (non-observable inputs). For ProAssurance, Level 3 inputs are used in situations where little or no Level 1 or 2 inputs are available or are inappropriate given the particular circumstances. Level 3 inputs include results from pricing models for which some or all of the inputs are not observable, discounted cash flow methodologies, single non-binding broker quotes and adjustments to externally quoted prices that are based on management judgment or estimation. Fair values of assets measured at fair value on a recurring basis as of December 31, 2022 and December 31, 2021 are shown in the following tables. Where applicable, the tables also indicate the fair value hierarchy of the valuation techniques utilized to determine those fair values. For some assets, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When this is the case, the asset is categorized based on the level of the most significant input to the fair value measurement. Assessments of the significance of a particular input to the fair value measurement require judgment and consideration of factors specific to the assets being valued. December 31, 2022 Fair Value Measurements Using Total (In thousands) Level 1 Level 2 Level 3 Fair Value Assets: Fixed maturities, available-for-sale U.S. Treasury obligations $ — $ 221,608 $ — $ 221,608 U.S. Government-sponsored enterprise obligations — 19,934 — 19,934 State and municipal bonds — 439,450 — 439,450 Corporate debt, multiple observable inputs — 1,717,479 — 1,717,479 Corporate debt, limited observable inputs — — 63,973 63,973 Residential mortgage-backed securities — 389,291 249 389,540 Agency commercial mortgage-backed securities — 9,704 — 9,704 Other commercial mortgage-backed securities — 194,090 — 194,090 Other asset-backed securities — 413,989 2,705 416,694 Fixed maturities, trading — 43,434 — 43,434 Equity investments Financial 9,850 2,219 303 12,372 Utilities/Energy 854 — — 854 Industrial — — 2,500 2,500 Bond funds 112,136 — — 112,136 All other 15,876 — — 15,876 Short-term investments 181,937 63,376 — 245,313 Other investments 1,881 88,783 1,783 92,447 Total assets categorized within the fair value hierarchy $ 322,534 $ 3,603,357 $ 71,513 3,997,404 Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of: Investment in unconsolidated subsidiaries 262,485 Total assets at fair value $ 4,259,889 Liabilities: Other liabilities $ — $ — $ 15,000 $ 15,000 Total liabilities categorized within the fair value hierarchy $ — $ — $ 15,000 $ 15,000 December 31, 2021 Fair Value Measurements Using Total (In thousands) Level 1 Level 2 Level 3 Fair Value Assets: Fixed maturities, available-for-sale U.S. Treasury obligations $ — $ 238,507 $ — $ 238,507 U.S. Government-sponsored enterprise obligations — 20,234 — 20,234 State and municipal bonds — 519,196 — 519,196 Corporate debt, multiple observable inputs — 1,851,427 — 1,851,427 Corporate debt, limited observable inputs — — 47,129 47,129 Residential mortgage-backed securities — 453,644 297 453,941 Agency commercial mortgage-backed securities — 14,141 — 14,141 Other commercial mortgage-backed securities — 231,483 — 231,483 Other asset-backed securities — 451,459 6,205 457,664 Fixed maturities, trading — 43,670 — 43,670 Equity investments Financial 6,615 855 — 7,470 Industrial — — 2,500 2,500 Bond funds 187,059 — — 187,059 All other 17,778 — — 17,778 Short-term investments 174,944 42,043 — 216,987 Other investments 1,889 95,288 1,434 98,611 Other assets — 649 — 649 Total assets categorized within the fair value hierarchy $ 388,285 $ 3,962,596 $ 57,565 4,408,446 Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of: Investment in unconsolidated subsidiaries 270,816 Total assets at fair value $ 4,679,262 Liabilities: Other liabilities $ — $ — $ 24,000 $ 24,000 Total liabilities categorized within the fair value hierarchy $ — $ — $ 24,000 $ 24,000 The fair values for securities included in the Level 2 category, with the few exceptions described below, were developed by one of several third-party, nationally recognized pricing services, including services that price only certain types of securities. Each service uses complex methodologies to determine values for securities and subject the values they develop to quality control reviews. Management selected a primary source for each type of security in the portfolio and reviewed the values provided for reasonableness by comparing data to alternate pricing services and to available market and trade data. Values that appeared inconsistent were further reviewed for appropriateness. Any value that did not appear reasonable was discussed with the service that provided the value and adjusted, if necessary. There were no material changes to the values supplied by the pricing services during the years ended December 31, 2022 and 2021. Level 2 Valuations Below is a summary description of the valuation methodologies primarily used by the pricing services for securities in the Level 2 category, by security type: U.S. Treasury obligations were valued based on quoted prices for identical assets, or, in markets that are not active, quotes for similar assets, taking into consideration adjustments for variations in contractual cash flows and yields to maturity. U.S. Government-sponsored enterprise obligations were valued using pricing models that consider current and historical market data, normal trading conventions, credit ratings and the particular structure and characteristics of the security being valued, such as yield to maturity, redemption options, and contractual cash flows. Adjustments to model inputs or model results were included in the valuation process when necessary to reflect recent regulatory, government or corporate actions or significant economic, industry or geographic events affecting the security’s fair value. State and municipal bonds were valued using a series of matrices that considered credit ratings, the structure of the security, the sector in which the security falls, yields and contractual cash flows. Valuations were further adjusted, when necessary, to reflect the expected effect on fair value of recent significant economic or geographic events or ratings changes. Corporate debt, multiple observable inputs consisted primarily of corporate bonds. The methodology used to value Level 2 corporate bonds was the same as the methodology previously described for U.S. Government-sponsored enterprise obligations. Bank loans were valued based on an average of broker quotes for the loans in question, if available. If quotes were not available, the loans were valued based on quoted prices for comparable loans or, if the loan was newly issued, by comparison to similar seasoned issues. Broker quotes were compared to actual trade prices to permit assessment of the reliability of the quotes; unreliable quotes were not considered in quoted averages. Residential and commercial mortgage-backed securities were valued using a pricing matrix which considers the issuer type, coupon rate and longest cash flows outstanding. The matrix used was based on the most recently available market information. Agency and non-agency collateralized mortgage obligations were both valued using models that consider the structure of the security, current and historical information regarding prepayment speeds, ratings and ratings updates, and current and historical interest rate and interest rate spread data. Other asset-backed securities were valued using models that consider the structure of the security, monthly payment information, current and historical information regarding prepayment speeds, ratings and ratings updates, and current and historical interest rate and interest rate spread data. Spreads and prepayment speeds consider collateral type. Fixed maturities, trading are held by the Lloyd's Syndicates segment and include U.S. Treasury obligations, corporate debt with multiple observable inputs and other asset-backed securities. These securities were valued using the respective valuation methodologies discussed above for each security type. Equity investments were securities not traded on an exchange on the valuation date. The securities were valued using the most recently available quotes for the securities. Short-term investments were securities maturing within one year, carried at fair value which approximated the cost of the securities due to their short-term nature. Other investments consisted primarily of convertible bonds valued using a pricing model that incorporated selected dealer quotes as well as current market data regarding equity prices and risk free rates. If dealer quotes were unavailable for the security being valued, quotes for securities with similar terms and credit status were used in the pricing model. Dealer quotes selected for use were those considered most accurate based on parameters such as underwriter status and historical reliability. Other assets consisted of an interest rate cap derivative instrument valued using a model which considers the volatilities from other instruments with similar maturities, strike prices, durations and forward yield curves. Under the terms of the interest rate cap agreement, ProAssurance paid a premium of $2 million for the right to receive cash payments based upon a notional amount of $35 million if and when the three-month LIBOR exceeded 2.35%. In April 2022, ProAssurance terminated its interest rate cap agreement. Level 3 Valuations Below is a summary description of the valuation methodologies used as well as quantitative information regarding securities in the Level 3 category, by security type: Level 3 Valuation Methodologies Corporate debt, limited observable inputs consisted of corporate bonds valued using dealer quotes for similar securities or discounted cash flow models using yields currently available for similar securities. Similar securities are defined as securities of comparable credit quality that have like terms and payment features. Assessments of credit quality were based on NRSRO ratings, if available, or were determined by management if not available. At December 31, 2022, 100% of the securities were rated and the average rating was BBB+. At December 31, 2021, 100% of the securities were rated and the average rating was BBB. Residential mortgage-backed and other asset-backed securities consisted of securitizations of receivables valued using dealer quotes for similar securities or discounted cash flow models using yields currently available for similar securities. Similar securities are defined as securities of comparable credit quality that have like terms and payment features. Assessments of credit quality were based on NRSRO ratings, if available, or were subjectively determined by management if not available. At December 31, 2022, 100% of the securities were rated and the average rating was BBB-. At December 31, 2021, 100% of the securities were rated and the average rating was BBB+. Equity investments consisted of preferred stock for which limited observable inputs were available at December 31, 2022 and December 31, 2021. The equity securities were primarily priced using broker/dealer quotes and internal models with some inputs that are unobservable. Other investments consisted of convertible securities for which limited observable inputs were available at December 31, 2022 and December 31, 2021. The securities were valued internally based on expected cash flows, including the expected final recovery, discounted at a yield that considered the lack of liquidity and the financial status of the issuer. Other liabilities consisted of contingent consideration associated with the NORCAL acquisition and is recorded at fair value each reporting period. The ultimate payout under the contingent consideration is dependent on the after-tax development of NORCAL's ultimate net losses over a three-year period beginning December 31, 2021 and may total up to $84 million. See further discussion around the contingent consideration in Note 2 and Note 9. Quantitative Information Regarding Level 3 Valuations Fair Value at ($ in thousands) December 31, 2022 December 31, 2021 Valuation Technique Unobservable Input Range Assets: Corporate debt, limited observable inputs $63,973 $47,129 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) Residential mortgage-backed securities $249 $297 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) Other asset-backed securities $2,705 $6,205 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) Equity investments $2,803 $2,500 Discounted Cash Flows Comparability Adjustment 0% - 10% (5%) Other investments $1,783 $1,434 Discounted Cash Flows Comparability Adjustment 0% - 10% (5%) Liabilities: Other liabilities $15,000 $24,000 Stochastic Model/Discounted Cash Flows Weighted Average Cost of Capital 0% - 10% (9%) The significant unobservable inputs used in the fair value measurement of the above listed securities were the valuations of comparable securities with similar issuers, credit quality and maturity. Changes in the availability of comparable securities could result in changes in the fair value measurements. Fair Value Measurements - Level 3 Assets & Liabilities The following tables present summary information regarding changes in the fair value of assets and liabilities measured using Level 3 inputs. December 31, 2022 Level 3 Fair Value Measurements Assets Liabilities (In thousands) State and Municipal Bonds Corporate Debt Asset-backed Securities Equity Investments Other Investments Total Assets Other Liabilities Total Liabilities Balance, December 31, 2021 $ — $ 47,129 $ 6,502 $ 2,500 $ 1,434 $ 57,565 $ (24,000) $ (24,000) Total gains (losses) realized and unrealized: Included in earnings, as a part of: Net investment income (loss) — (1) 8 — — 7 — — Net investment gains (losses) — — — 102 (553) (451) 9,000 9,000 Included in other comprehensive income (loss) (19) (4,324) (601) — — (4,944) — — Purchases 750 34,805 10,907 17 3,292 49,771 — — Sales — (5,153) (287) — (1,167) (6,607) — — Transfers in — 18,828 570 2,377 529 22,304 — — Transfers out (731) (27,311) (14,145) (2,193) (1,752) (46,132) — — Balance, December 31, 2022 $ — $ 63,973 $ 2,954 $ 2,803 $ 1,783 $ 71,513 $ (15,000) $ (15,000) Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end $ — $ — $ — $ 101 $ (822) $ (721) $ — $ — December 31, 2021 Level 3 Fair Value Measurements Assets Liabilities (In thousands) Corporate Debt Asset-backed Securities Equity Investments Other Investments Total Assets Other Liabilities Total Liabilities Balance, December 31, 2020 $ 3,265 $ 8,693 $ — $ — $ 11,958 $ — $ — Total gains (losses) realized and unrealized: Included in earnings, as a part of: Net investment income (loss) 1 (3) — — (2) — — Net investment gains (losses) (14) (11) 15 (774) (784) — — Included in other comprehensive income (loss) 27 (403) — — (376) — — Purchases 57,586 31,204 9,083 205 98,078 — — Sales (3,277) (800) (5,799) — (9,876) — — Transfers in 858 — 69 3,586 4,513 — — Transfers out (11,317) (32,178) (868) (1,583) (45,946) — — Business Combination (See Note 2) — — — — — (24,000) (24,000) Balance, December 31, 2021 $ 47,129 $ 6,502 $ 2,500 $ 1,434 $ 57,565 $ (24,000) $ (24,000) Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end $ — $ — $ 10 $ (774) $ (764) $ — $ — Transfers Transfers shown in the preceding Level 3 tables were as of the end of the period in which the transfer occurred. All transfers were to or from Level 2. All transfers in and out of Level 3 during 2022 and 2021 related to securities held for which the level of market activity for identical or nearly identical securities varies from period to period. The securities were valued using multiple observable inputs when those inputs were available; otherwise the securities were valued using limited observable inputs. Fair Values Not Categorized At December 31, 2022 and 2021, certain LPs/LLCs and investment funds measure fund assets at fair value on a recurring basis and provide a NAV for ProAssurance's interest. The carrying value of these interests is based on the NAV provided and was considered to approximate the fair value of the interests. For investment in unconsolidated subsidiaries, ProAssurance recognizes any changes in the NAV of its interests in equity in earnings (loss) of unconsolidated subsidiaries during the period of change. In accordance with GAAP, the fair value of these investments was not classified within the fair value hierarchy. The amount of ProAssurance's unfunded commitments related to these investments as of December 31, 2022 and fair values of these investments as of December 31, 2022 and 2021 were as follows: Unfunded Fair Value (In thousands) December 31, 2022 December 31, 2022 December 31, 2021 Investment in unconsolidated subsidiaries: Private debt funds (1) $2,125 $ 19,620 $ 18,465 Long/short equity funds (2) None 5,089 655 Non-public equity funds (3) $50,856 144,560 160,219 Credit funds (4) $36,460 49,245 47,300 Strategy focused funds (5) $14,500 43,971 44,177 Total investments carried at NAV $ 262,485 $ 270,816 Below is additional information regarding each of the investments listed in the table above as of December 31, 2022. (1) This investment is comprised of interests in two unrelated LP funds that are structured to provide interest distributions primarily through diversified portfolios of private debt instruments. One LP allows redemption by special consent, while the other does not permit redemption. Income and capital are to be periodically distributed at the discretion of the LPs over an anticipated time frame that spans from three (2) This investment is comprised of interests in two unrelated LP funds. One LP fund holds primarily long and short North American equities and targets absolute returns using strategies designed to take advantage of market opportunities. The other LP holds long and short publicly traded securities that will passively generate income. Redemptions are permitted; one with 30 days written notice if outside of a lock-up period and the other above specified thresholds (lowest threshold is 90%) which may be only partially payable until after a fund audit is completed and are then payable within 30 days. (3) This investment is comprised of interests in multiple unrelated LP funds, each structured to provide capital appreciation through diversified investments in private equity, which can include investments in buyout, venture capital, debt including senior, second lien and mezzanine, distressed debt, collateralized loan obligations and other private equity-oriented LPs. Two of the LPs allow redemption by terms set forth in the LP agreements; the others do not permit redemption. Income and capital are to be periodically distributed at the discretion of the LP over time frames that are anticipated to span up to ten years. (4) This investment is comprised of multiple unrelated LP funds. Two funds seek to obtain superior risk-adjusted absolute returns through a diversified portfolio of debt securities, including bonds, loans and other asset-backed instruments. The remaining funds focus on private middle market company mezzanine and senior secured loans, opportunities across the credit spectrum, mortgage backed-loans, as well as various types of loan-backed investments. One fund allows redemptions at any quarter-end with prior notice requirements of 180 days, while two other funds allow for redemptions with consent of the General Partner. The remaining funds do not allow redemptions. For the funds that do not allow redemptions, income and capital are to be periodically distributed at the discretion of the LP over time frames throughout the remaining life of the funds. (5) This investment is comprised of multiple unrelated LPs/LLCs funds. One fund is an LLC focused on investing in North American consumer products companies, comprised of equity and equity-related securities, as well as debt instruments. A second fund is focused on aircraft investments, along with components and assets related to aircrafts. For both funds, redemptions are not permitted. Another fund is an LP focused on North American energy infrastructure assets that allows redemption with consent of the General Partner. The remaining funds are real estate focused LPs, one of which allows for redemption with prior notice. ProAssurance may not sell, transfer or assign its interest in any of the above LPs/LLCs without special consent from the LPs/LLCs. Nonrecurring Fair Value Measurement ProAssurance did not have any assets or liabilities that were measured at fair value on a nonrecurring basis at December 31, 2022 or 2021. Financial Instruments - Methodologies Other Than Fair Value The following table provides the estimated fair value of the Company's financial instruments that, in accordance with GAAP for the type of investment, are measured using a methodology other than fair value. Fair values provided primarily fall within the Level 3 fair value category. December 31, 2022 December 31, 2021 (In thousands) Carrying Fair Carrying Fair Financial assets: BOLI $ 81,746 $ 81,746 $ 81,767 $ 81,767 Other investments $ 3,322 $ 3,322 $ 3,183 $ 3,183 Other assets $ 28,819 $ 28,790 $ 40,581 $ 40,583 Financial liabilities: Senior notes due 2023* $ 250,000 $ 248,153 $ 250,000 $ 264,000 Contribution Certificates $ 177,525 $ 134,479 $ 175,900 $ 179,892 Other liabilities $ 27,905 $ 27,905 $ 52,332 $ 52,332 * Carrying value excludes unamortized debt issuance costs. The fair value of the BOLI was equal to the cash surrender value associated with the policies on the valuation date. Other investments listed in the table above include FHLB common stock carried at cost and an annuity investment carried at amortized cost. Three of ProAssurance's insurance subsidiaries are members of an FHLB. The estimated fair value of the FHLB common stock was based on the amount the subsidiaries would receive if their memberships were canceled, as the memberships cannot be sold. The fair value of the annuity represents the present value of the expected future cash flows discounted using a rate available in active markets for similarly structured instruments. Other assets and other liabilities primarily consisted of related investment assets and liabilities associated with funded deferred compensation agreements. The fair value of the funded deferred compensation assets was based upon quoted market prices, which is categorized as a Level 1 valuation, and had a fair value of $27.9 million and $39.5 million at December 31, 2022 and 2021, respectively. The fair value of the funded deferred compensation assets at December 31, 2021 included assets from a rabbi trust acquired in the NORCAL acquisition that was terminated during the first quarter of 2022. The rabbi trust assets consisted entirely of cash equivalents and mutual funds and had a total fair value of $5.2 million as of December 31, 2021 (see Note 2 for additional information on the NORCAL acquisition). Other assets also included an unsecured note receivable. The fair value of the note receivable was based on the present value of expected cash flows from the note receivable, discounted at market rates on the valuation date for receivables with similar credit standings and similar payment structures. Other liabilities primarily consisted of liabilities associated with funded deferred compensation agreements. The reported balance is determined based on the amount of elective deferrals and employer contributions adjusted for periodic changes in the fair value of the participant balances based on the performance of the funds selected by the participants and had a fair value of $27.9 million and $52.3 million at December 31, 2022 and December 31, 2021, respectively. The fair value of the funded deferred compensation liabilities at December 31, 2021 included liabilities from deferred compensation arrangements assumed in the NORCAL acquisition that were terminated during the first quarter of 2022 using the associated rabbi trust assets and cash; the termination of these deferred compensation arrangements did not result in a gain or loss during the year ended December 31, 2022. The NORCAL funded deferred compensation liabilities had a total fair value of $18.4 million as of December 31, 2021 (see Note 2 for additional information on the NORCAL acquisition). The fair value of the debt, excluding the Contribution Certificates, was estimated based on the present value of expected future cash outflows, discounted at rates available on the valuation date for similar debt issued by entities with a similar credit standing to ProAssurance. The fair value of the Contribution Certificates was estimated based on a binomial option pricing model. The Contribution Certificates were a portion of the purchase consideration for the NORCAL acquisition and were issued to certain NORCAL policyholders in the conversion, and those instruments are an obligation of NORCAL Insurance Company, the successor of NORCAL Mutual Insurance Company (see Note 2 and 9 for further discussion of the terms of the Contribution Certificates). |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Available-for-sale fixed maturities at December 31, 2022 and December 31, 2021 included the following: December 31, 2022 (In thousands) Amortized Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities, available-for-sale U.S. Treasury obligations $ 243,999 $ — $ 8 $ 22,399 $ 221,608 U.S. Government-sponsored enterprise obligations 21,562 — — 1,628 19,934 State and municipal bonds 483,584 — 177 44,311 439,450 Corporate debt 1,980,579 — 735 199,862 1,781,452 Residential mortgage-backed securities 450,870 229 555 61,656 389,540 Agency commercial mortgage-backed securities 10,576 — — 872 9,704 Other commercial mortgage-backed securities 217,021 — 63 22,994 194,090 Other asset-backed securities 444,220 198 289 27,617 416,694 $ 3,852,411 $ 427 $ 1,827 $ 381,339 $ 3,472,472 December 31, 2021 (In thousands) Amortized Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities, available-for-sale U.S. Treasury obligations $ 239,765 $ 1,166 $ 2,424 $ 238,507 U.S. Government-sponsored enterprise obligations 20,467 29 262 20,234 State and municipal bonds 511,750 9,620 2,174 519,196 Corporate debt 1,884,455 29,050 14,949 1,898,556 Residential mortgage-backed securities 455,438 4,254 5,751 453,941 Agency commercial mortgage-backed securities 13,909 294 62 14,141 Other commercial mortgage-backed securities 231,226 2,530 2,273 231,483 Other asset-backed securities 457,837 2,747 2,920 457,664 $ 3,814,847 $ 49,690 $ 30,815 $ 3,833,722 The recorded cost basis and estimated fair value of available-for-sale fixed maturities at December 31, 2022, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. (In thousands) Amortized Due in one Due after Due after Due after Total Fair Fixed maturities, available-for-sale U.S. Treasury obligations $ 243,999 $ 23,523 $ 139,958 $ 56,909 $ 1,218 $ 221,608 U.S. Government-sponsored enterprise obligations 21,562 2,195 13,790 3,949 — 19,934 State and municipal bonds 483,584 37,427 144,161 151,294 106,568 439,450 Corporate debt 1,980,579 174,542 854,788 654,558 97,564 1,781,452 Residential mortgage-backed securities 450,870 389,540 Agency commercial mortgage-backed securities 10,576 9,704 Other commercial mortgage-backed securities 217,021 194,090 Other asset-backed securities 444,220 416,694 $ 3,852,411 $ 3,472,472 Excluding obligations of the U.S. Government, U.S. Government-sponsored enterprises and a U.S. Government obligations money market fund, no investment in any entity or its affiliates exceeded 10% of shareholders’ equity at December 31, 2022. Cash and securities with a carrying value of $51.6 million at December 31, 2022 were on deposit with various state insurance departments to meet regulatory requirements. ProAssurance also held securities with a carrying value of $31.3 million at December 31, 2022 that are pledged as collateral security for advances under the Company's borrowing relationships with FHLBs. As a member of Lloyd's, ProAssurance is required to maintain capital at Lloyd's, referred to as FAL, to support underwriting by Syndicate 1729. At December 31, 2022, ProAssurance's FAL investments were comprised of available-for-sale fixed maturities with a fair value of $23.8 million and cash and cash equivalents of $1.0 million on deposit with Lloyd's in order to satisfy these FAL requirements. During the second quarter of 2022, ProAssurance received a return of approximately $5.5 million of cash from its FAL balances given Syndicate 6131 ceased underwriting on a quota share basis with Syndicate 1729 as Syndicate 6131's business is retained within Syndicate 1729 beginning with the 2022 underwriting year. The return of FAL during the second quarter of 2022 also related to the settlement of the Company's participation in the results of Syndicate 1729 and Syndicate 6131 for the 2019 underwriting year. Further, during the fourth quarter of 2022, ProAssurance received a return of approximately $5.6 million of cash from its FAL balances due to lower capital requirements for the 2023 underwriting year following Lloyd's of London's review of Syndicate 1729's 2023 business plan. Investments Held in a Loss Position The following tables provide summarized information with respect to investments held in an unrealized loss position at December 31, 2022 and December 31, 2021, including the length of time the investment had been held in a continuous unrealized loss position. December 31, 2022 Total Less than 12 months 12 months or longer Fair Unrealized Fair Unrealized Fair Unrealized (In thousands) Value Loss Value Loss Value Loss Fixed maturities, available-for-sale U.S. Treasury obligations $ 220,991 $ 22,399 $ 53,199 $ 2,393 $ 167,792 $ 20,006 U.S. Government-sponsored enterprise obligations 19,934 1,628 8,082 663 11,852 965 State and municipal bonds 421,769 44,311 177,393 12,352 244,376 31,959 Corporate debt 1,708,529 199,862 687,947 42,977 1,020,582 156,885 Residential mortgage-backed securities 363,945 61,656 155,212 15,275 208,733 46,381 Agency commercial mortgage-backed securities 9,704 872 3,086 110 6,618 762 Other commercial mortgage-backed securities 192,359 22,994 53,270 4,087 139,089 18,907 Other asset-backed securities 396,452 27,617 162,192 7,050 234,260 20,567 $ 3,333,683 $ 381,339 $ 1,300,381 $ 84,907 $ 2,033,302 $ 296,432 December 31, 2021 Total Less than 12 months 12 months or longer Fair Unrealized Fair Unrealized Fair Unrealized (In thousands) Value Loss Value Loss Value Loss Fixed maturities, available-for-sale U.S. Treasury obligations $ 190,054 $ 2,424 $ 181,689 $ 2,206 $ 8,365 $ 218 U.S. Government-sponsored enterprise obligations 16,287 262 16,287 262 — — State and municipal bonds 175,442 2,174 171,930 2,039 3,512 135 Corporate debt 945,196 14,949 866,731 11,828 78,465 3,121 Residential mortgage-backed securities 326,248 5,751 290,019 4,320 36,229 1,431 Agency commercial mortgage-backed securities 4,529 62 4,355 54 174 8 Other commercial mortgage-backed securities 151,827 2,273 145,467 1,884 6,360 389 Other asset-backed securities 278,915 2,920 271,463 2,796 7,452 124 $ 2,088,498 $ 30,815 $ 1,947,941 $ 25,389 $ 140,557 $ 5,426 As of December 31, 2022, excluding U.S. Government or U.S. Government-sponsored enterprise obligations, there were 2,901 debt securities (74.4% of all available-for-sale fixed maturity securities held) in an unrealized loss position representing 1,433 issuers. The greatest and second greatest unrealized loss positions among those securities were approximately $5.7 million and $4.1 million, respectively. The securities were evaluated for impairment as of December 31, 2022. As of December 31, 2021, excluding U.S. Government or U.S. Government-sponsored enterprise obligations, there were 1,766 debt securities (45.8% of all available-for-sale fixed maturity securities held) in an unrealized loss position representing 998 issuers. The greatest and second greatest unrealized loss positions among those securities were each approximately $0.4 million. The securities were evaluated for impairment as of December 31, 2021. Each quarter, ProAssurance performs a detailed analysis for the purpose of assessing whether any of the securities it holds in an unrealized loss position has suffered an impairment due to credit or non-credit factors. A detailed discussion of the factors considered in the assessment is included in Note 1. Fixed maturity securities held in an unrealized loss position at December 31, 2022, excluding asset-backed securities, have paid all scheduled contractual payments and are expected to continue. Expected future cash flows of asset-backed securities, excluding those issued by GNMA, FNMA and FHLMC, held in an unrealized loss position were estimated as part of the December 31, 2022 impairment evaluation using the most recently available six-month historical performance data for the collateral (loans) underlying the security or, if historical data was not available, sector based assumptions, and equaled or exceeded the current amortized cost basis of the security. The following tables present a roll forward of the allowance for expected credit losses on available-for-sale fixed maturities for the years ended December 31, 2022 and 2021. Year Ended December 31, 2022 (In thousands) Corporate Debt Residential mortgage-backed securities Other asset-backed securities Total Balance, at December 31, 2021 $ — $ — $ — $ — Additional credit losses related to securities for which: No allowance for credit losses has been previously recognized 553 229 198 980 Reductions related to: Securities for which there is an intent to sell or will more likely than not be sold before recovery of its amortized cost (553) — — (553) Balance, at December 31, 2022 $ — $ 229 $ 198 $ 427 Year Ended December 31, 2021 (In thousands) Corporate Debt Total Balance, at December 31, 2020 $ 552 $ 552 Reductions related to: Securities sold during the period (552) (552) Balance, at December 31, 2021 $ — $ — Other information regarding sales and purchases of fixed maturity available-for-sale securities is as follows: Year Ended December 31 (In millions) 2022 2021 2020 Proceeds from sales (exclusive of maturities and paydowns) $ 131.0 $ 504.0 $ 354.4 Purchases $ 607.8 $ 1,438.2 $ 917.0 Equity Investments ProAssurance's equity investments are carried at fair value with changes in fair value recognized in income as a component of net investment gains (losses) during the period of change. Equity investments on the Consolidated Balance Sheets as of December 31, 2022 and 2021 primarily included bond funds and, to a lesser degree, stocks and investment funds. Short-term Investments ProAssurance's short-term investments, which have a maturity at purchase of one year or less, are primarily comprised of investments in U.S. treasury obligations, commercial paper and money market funds. Short-term investments are carried at fair value which approximates the cost of the securities due to their short-term nature. BOLI ProAssurance holds BOLI policies that are carried at the current cash surrender value of the policies (original cost $42 million), which includes the BOLI policies acquired from NORCAL (original cost $10 million). All insured individuals were members of ProAssurance or NORCAL management at the time the policies were acquired. The primary purpose of the program is to offset future employee benefit expenses through earnings on the cash value of the policies. ProAssurance is the owner and beneficiary of these policies. Net Investment Income Net investment income by investment category was as follows: Year Ended December 31 (In thousands) 2022 2021 2020 Fixed maturities $ 93,736 $ 74,437 $ 69,308 Equities 3,706 2,539 4,369 Short-term investments, including Other 5,681 1,969 2,683 BOLI 1,141 2,698 2,023 Investment fees and expenses (8,292) (11,121) (6,385) Net investment income $ 95,972 $ 70,522 $ 71,998 Investment in Unconsolidated Subsidiaries ProAssurance's investment in unconsolidated subsidiaries were as follows: December 31, 2022 Carrying Value (In thousands) Percentage December 31, December 31, Qualified affordable housing project tax credit partnerships See below $ 4,088 $ 12,424 All other investments, primarily investment fund LPs/LLCs See below 301,122 323,152 $ 305,210 $ 335,576 Qualified affordable housing project tax credit partnership interests held by ProAssurance generate investment returns by providing tax benefits to fund investors in the form of tax credits and project operating losses. The carrying value of these investments reflects ProAssurance's total commitments (both funded and unfunded) to the partnerships, less any amortization. At December 31, 2022, ProAssurance did not have an ownership percentage greater than 20% in any tax credit partnership interests. At December 31, 2021, ProAssurance's ownership percentage relative to two of the tax credit partnership interests was almost 100%; these interests had a carrying value of $3.2 million at December 31, 2021. ProAssurance's ownership percentage relative to the remaining tax credit partnership interests is less than 20%; these interests had a carrying value of $4.1 million and $9.2 million at December 31, 2022 and 2021, respectively. Since ProAssurance has the ability to exert influence over the partnerships but does not control them, all are accounted for using the equity method. See further discussion of the entities in which ProAssurance holds passive interests in Note 14. ProAssurance holds interests in investment fund LPs/LLCs and other equity method investments and LPs/LLCs which are not considered to be investment funds. ProAssurance's ownership percentage relative to three of the LPs/LLCs is greater than 25%, which is expected to be reduced as the funds mature and other investors participate in the funds; these investments had a carrying value of $36.0 million and $49.0 million at December 31, 2022 and 2021, respectively. ProAssurance's ownership percentage relative to the remaining investments and LPs/LLCs is less than 25%; these interests had a carrying value of $265.1 million and $274.2 million at December 31, 2022 and 2021, respectively. ProAssurance does not have the ability to exert control over any of these funds. Equity in Earnings (Loss) of Unconsolidated Subsidiaries Equity in earnings (loss) of unconsolidated subsidiaries included losses from qualified affordable housing project tax credit partnerships and a historic tax credit partnership. Investment results recorded reflect ProAssurance's allocable portion of partnership operating results. Tax credits reduce income tax expense in the period they are utilized. The results recorded and tax credits recognized related to ProAssurance's tax credit partnership investments were as follows: Year Ended December 31 (In thousands) 2022 2021 2020 Qualified affordable housing project tax credit partnerships Losses recorded $ 8,278 $ 15,239 $ 18,684 Tax credits recognized $ 4,805 $ 13,160 $ 17,465 Historic tax credit partnership* Losses (gains) recorded $ (1,212) $ (182) $ 1,092 Tax credits recognized $ — $ — $ 412 *ProAssurance holds a historic tax credit partnership which was fully amortized in 2020. This partnership generated investment returns by providing benefits to partnership investors in the form of tax credits, tax deductible project operating losses and distributions resulting from positive cash flows. ProAssurance received a distribution associated with this investment during the second quarter of 2022 and the first quarter of 2021, as a result of positive cash flows from a completed project, which was recognized as an operating gain in each respective period. The tax credits generated from the Company's tax credit partnership investments of $4.8 million, $13.2 million and $17.9 million for the years ended December 31, 2022, 2021 and 2020, respectively, were deferred and are expected to be utilized in future periods. Not included in the table above is $0.5 million of tax credits recaptured from the 2019 tax year during the year ended December 31, 2022 due to the carryback of the Company's estimated NOL for the year ended December 31, 2022 to the 2021 tax year. The recaptured tax credits were earned in 2019 but not utilized until 2021 due to NOL's generated in both 2019 and 2020. As of December 31, 2022, the Company had approximately $51.2 million of available tax credit carryforwards generated from its investments in tax credit partnerships which they expect to utilize in future periods (see further discussion in Note 6). Tax credits provided by the underlying projects of the Company's historic tax credit partnership are typically available in the tax year in which the project is put into active service, whereas the tax credits provided by qualified affordable housing project tax credit partnerships are provided over approximately a ten year period. Equity Method Investees As previously discussed, ProAssurance holds certain investments that are measured using the equity method of accounting, primarily investments in LPs/LLCs, which are carried as a part of investment in unconsolidated subsidiaries on the Consolidated Balance Sheets. As of December 31, 2022, the following equity method investees represent the largest funds on an absolute basis contributing to ProAssurance's equity in earnings (loss) of unconsolidated subsidiaries: • NB Co Investment Fund II, LP is a private equity fund that is a co-investor in small and mid-cap companies. • NB Real Estate Secondary Opportunities Fund, LP is an equity fund that invests in real estate private equity investments. • NB Private Equity Credit Opportunities Fund II makes credit and equity investments in private equity owned companies. • Prime Storage Fund II, LP primarily invests in self-storage real estate. • Sageview Capital Partners II, LP is a private equity fund that primarily invests in technology, financial services and business services mid-cap companies. • USB LIHTC is a fund that invests in tax credit entities in low-income residential rental properties. The following tables presents aggregated gross summarized financial information for the funds as of December 31, 2022, including the portion not attributable to ProAssurance, derived from the funds' financial statements which are prepared in accordance with GAAP. As the majority of ProAssurance's equity method investments report their results to the Company on a one quarter lag, the majority of the summarized financial information below is for the twelve months ended September 30, 2022 and 2021. Balance Sheet Information (In thousands) September 30, 2022 September 30, 2021 Total assets $ 2,727,876 $ 3,544,866 Total liabilities $ 140,157 $ 230,133 Total partners' capital $ 2,587,719 $ 3,314,733 Income Statement Information (In thousands) Year Ended September 30 2022 2021 2020 Net investment income (loss) $ 13,009 $ 2,506 $ (16,557) Net investment gains (losses) 47,824 219,089 655 Net change in unrealized appreciation (depreciation) 135,218 490,761 123,942 Operating Expenses 4,870 6,527 7,528 Net gain (loss) $ 191,181 $ 705,829 $ 100,512 Net gain (loss) attributable to ProAssurance (1) $ (375) $ 10,171 $ (8,296) (1) Represents ProAssurance's share of the funds' aggregate income or loss, which is included as a component of equity in earnings (loss) of unconsolidated subsidiaries in its Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2022 and 2021. Net Investment Gains (Losses) Realized investment gains and losses are recognized on the first-in, first-out basis. The following table provides detailed information regarding net investment gains (losses): Year Ended December 31 (In thousands) 2022 2021 2020 Total impairment losses: Corporate debt $ (1,331) $ — $ (1,745) Asset-backed securities (441) — — Portion of impairment losses recognized in other comprehensive income before taxes: Corporate debt — — 237 Asset-backed securities 14 — — Net impairment losses recognized in earnings (1,758) — (1,508) Gross realized gains, available-for-sale fixed maturities 1,740 14,311 13,855 Gross realized (losses), available-for-sale fixed maturities (3,387) (1,218) (2,501) Net realized gains (losses), trading fixed maturities (155) (20) 288 Net realized gains (losses), equity investments (5,252) 7,337 13,192 Net realized gains (losses), other investments (222) 8,660 3,883 Change in unrealized holding gains (losses), trading fixed maturities (613) (529) 501 Change in unrealized holding gains (losses), equity investments (22,166) (2,941) (16,287) Change in unrealized holding gains (losses), convertible securities, carried at fair value (10,557) (1,701) 3,850 Other (1) 9,213 411 405 Net investment gains (losses) $ (33,157) $ 24,310 $ 15,678 (1) Includes a gain of $9.0 million recognized during the fourth quarter of 2022 reflecting the change in the fair value of contingent consideration issued in connection with the NORCAL acquisition. See further discussion on the contingent consideration in Note 2 and Note 3. For the year ended December 31, 2022, ProAssurance recognized credit-related impairment losses in earnings of $1.8 million and a nominal amount of non-credit impairment losses in OCI. The credit-related impairment losses recognized in 2022 related to a corporate bond in the consumer sector as well as certain mortgage-backed and other asset backed securities. For the year ended December 31, 2021, ProAssurance did not recognize any credit-related impairment losses in earnings or non-credit impairment losses in OCI. For the year ended December 31, 2020, ProAssurance recognized credit-related impairment losses in earnings of $1.5 million and nominal amount of non-credit impairment losses in OCI. The credit-related impairment losses recognized in 2020 primarily related to corporate bonds in the energy and consumer sectors. Additionally, 2020 included credit-related impairment losses related to four corporate bonds in various sectors, which were sold during 2020. The non-credit impairment losses recognized in 2020 related to three corporate bonds in the energy and consumer sectors. The following table presents a roll forward of cumulative credit losses recorded in earnings related to impaired debt securities for which a portion of the impairment was recorded in OCI. Year Ended December 31 (In thousands) 2022 2021 2020 Balance beginning of period $ — $ 552 $ 470 Additional credit losses recognized during the period, related to securities for which: No impairment has been previously recognized 610 — 1,064 Impairment has been previously recognized — — 258 Reductions due to: Securities sold during the period (realized) — (552) (1,240) Securities for which there is an intent to sell or will more likely than not be sold before recovery of amortized cost (553) — — Balance December 31 $ 57 $ — $ 552 |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Reinsurance | Reinsurance ProAssurance purchases reinsurance from third-party reinsurers and insurance enterprises in order to reduce its net exposure to losses, to provide capacity to write larger limits of liability, to provide reimbursement for losses incurred under the higher limit coverages the Company offers and as a mechanism for providing custom insurance solutions. ProAssurance also uses reinsurance arrangements as a mechanism for sharing risk with insureds or their affiliates. The effects of reinsurance for the years ended December 31, 2022, 2021 and 2020 were as follows: Year Ended December 31 (In thousands) 2022 2021 2020 Direct $ 1,048,690 $ 912,387 $ 814,298 Assumed 55,304 47,637 40,124 Ceded (89,857) (77,303) (106,721) Net premiums written $ 1,014,137 $ 882,721 $ 747,701 Direct $ 1,058,263 $ 1,020,107 $ 862,742 Assumed 56,175 45,559 43,555 Ceded (84,857) (93,998) (113,582) Net premiums earned $ 1,029,581 $ 971,668 $ 792,715 Losses and loss adjustment expenses $ 839,717 $ 798,893 $ 741,719 Reinsurance recoveries (62,955) (46,644) (80,272) Net losses and loss adjustment expenses $ 776,762 $ 752,249 $ 661,447 The receivable from reinsurers on unpaid losses and LAE represents management’s estimated amount of future loss payments that will be recoverable under ProAssurance reinsurance agreements. Certain of the Company's reinsurance agreements base the amount of premium that is due to the reinsurer in part on losses reimbursed or to be reimbursed under the agreement, and terms may also include minimum and maximum amounts of ceded premium. Ceded premium amounts are estimated based on management’s expectation of ultimate losses and the portion of those losses that are allocable to reinsurers according to the terms of the agreements, including any minimums or maximums. Given the uncertainty of the ultimate amounts of losses, management’s estimates of losses and related amounts recoverable may vary significantly from the eventual outcome. Due to changes in management’s estimates of amounts due to reinsurers related to prior accident year loss recoveries, ProAssurance decreased premiums ceded in its Specialty P&C segment by $2.8 million and $3.9 million during the years ended December 31, 2022 and 2021, respectively, and increased premiums ceded by $0.7 million during the year ended December 31, 2020. Reinsurance contracts do not relieve ProAssurance from its obligations to policyholders, and ProAssurance remains liable to its policyholders whether or not reinsurers honor their contractual obligations. ProAssurance continually monitors its reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. At December 31, 2022, the net total amounts due from reinsurers was $447.8 million (receivables related to paid and unpaid losses and LAE and prepaid reinsurance premiums, less reinsurance premiums payable). No single reinsurer had an individual balance which exceeded $54.8 million. At December 31, 2022 reinsurance recoverables totaling approximately $90.6 million were collateralized by letters of credit or funds withheld. Expected credit losses associated with the Company's reinsurance receivables (related to both paid and unpaid losses) were nominal in amount as of December 31, 2022, 2021 and 2020. During the years ended December 31, 2022, 2021 or 2020, no reinsurance balances were written off for credit reasons. For further information on the Company's allowance for expected credit losses related to its receivables from reinsurers see Note 1. During the fourth quarter of 2020, ProAssurance commuted a quota share reinsurance agreement with one of its reinsurers which resulted in a net cash receipt of approximately $6.8 million and reduced its receivable from reinsurers on unpaid losses and LAE by approximately $7.0 million. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of ProAssurance’s deferred tax assets and liabilities were as follows: December 31 (In thousands) 2022 2021 Deferred tax assets Unpaid loss discount $ 48,735 $ 51,562 Unearned premium adjustment 22,188 22,846 Compensation related 12,285 18,575 Unrealized losses on investments, net 80,422 — Basis differentials-investments 2,962 — Intangibles 9,681 13,915 Operating lease liabilities 4,124 4,290 Tax credit carryforward 53,240 48,701 Net operating loss carryforward 27,891 18,596 Other 815 909 Total gross deferred tax assets 262,343 179,394 Valuation allowance (18,384) (8,945) Total deferred tax assets, net of valuation allowance 243,959 170,449 Deferred tax liabilities Deferred policy acquisition costs (12,511) (12,284) Unpaid loss discount-transition (5,270) (7,276) Unrealized gains on investments, net — (4,100) Fixed assets (3,865) (4,013) Operating lease ROU assets (3,911) (4,030) Basis differentials-investments — (11,277) Basis differentials-foreign operations (928) (828) Intangibles (7,939) (9,028) Total deferred tax liabilities (34,424) (52,836) Net deferred tax assets (liabilities) $ 209,535 $ 117,613 As of December 31, 2022, ProAssurance had U.S. Federal, U.S. state and U.K. income tax NOL carryforwards of approximately $65.1 million, $126.8 million and $27.7 million, respectively. The U.K. NOL carryforwards do not expire while the U.S. Federal and state NOL carryforwards will begin to expire in 2035 and 2031, respectively. As a result of the NORCAL acquisition, the Company has U.S. federal NOL carryforwards which as of December 31, 2022 were approximately $36.1 million. These NOL carryforwards are subject to limitation by Internal Revenue Code Section 382 and will begin to expire in 2035. ProAssurance had $51.2 million of available tax credit carryforwards generated from the Company's investments in tax credit partnerships all of which may be carried forward until they begin to expire in December 31, 2039. These tax credits have been deferred and carried forward due to the Company's expected consolidated loss calculated on a tax basis. The available tax credit carryforwards include $0.5 million of tax credits recaptured from the 2019 tax year during the year ended December 31, 2022 due to the carryback of the Company's estimated NOL for the year ended December 31, 2022 to the 2021 tax year. The recaptured tax credits were earned in 2019 but not utilized until 2021 due to NOL's generated in both 2019 and 2020. The Company's total valuation allowance increased by $9.4 million and $0.4 million for the years ended December 31, 2022 and 2021, respectively. In 2022 and 2021, management evaluated the realizability of the deferred tax assets related to the NOL carryforwards of the Company's Lloyd's corporate member subsidiary and concluded that it was more likely than not that the deferred tax assets will not be realized; therefore, a valuation allowance was recorded against the full value of the deferred tax assets related to the U.S. Federal and U.K. NOL carryforwards in 2022 and 2021 of $11.9 million and $5.0 million, respectively. The increase in the valuation allowance related to the U.S. Federal and U.K. NOL carryforwards in 2022 as compared to 2021 was partially due to current year activity and an increase in the U.K. corporate income tax rate. In 2022 and 2021, management evaluated the realizability of the deferred tax asset related to the U.S. state NOL carryforwards and concluded that it was more likely than not that a portion of the deferred tax asset will not be realized; therefore, a valuation allowance was recorded against a portion of the deferred tax asset related to the U.S. state NOL carryforwards in 2022 and 2021 of $5.8 million and $3.2 million, respectively. The increase in the valuation allowance related to the U.S. state NOL carryforwards in 2022 as compared to 2021 was primarily due to current year activity. Deferred tax assets and liabilities include SPCs the Company participates in at Inova Re, net of a valuation allowance $0.5 million and $0.6 million at December 31, 2022 and 2021, respectively. Due to the limited operations of these SPCs as of December 31, 2022 and 2021, management concluded that a valuation allowance was required against the DTAs of certain SPCs. In 2022 and 2021, management evaluated the realizability of the deferred tax assets of ProAssurance American Mutual, a Risk Retention Group, and concluded that it was more likely than not that the net deferred tax assets will not be realized; therefore a nominal valuation allowance was recorded in 2022 and 2021. ProAssurance American Mutual, a Risk Retention Group, is a taxpayer separate from the consolidated group and this entity has experienced cumulative losses in recent years. ProAssurance files income tax returns in various states, the U.S. federal jurisdiction and the U.K. ProAssurance had a receivable for U.S. federal and U.K. income taxes of $8.0 million at December 31, 2022 and $7.9 million at December 31, 2021, both carried as a part of other assets. The statute of limitations is now closed for all tax years prior to 2019. A reconciliation of the beginning and ending amounts of unrecognized tax benefits for 2022, 2021 and 2020, were as follows: (In thousands) 2022 2021 2020 Balance at January 1 $ 3,020 $ 5,199 $ 5,070 Decreases for tax positions taken during the current year (99) (1,630) (4,853) Increases for tax positions taken during prior years 1,839 — 5,342 Decreases relating to a lapse of the applicable statute of limitations (1,137) (549) (360) Balance at December 31 $ 3,623 $ 3,020 $ 5,199 At December 31, 2022 and 2021, approximately $0.3 million of ProAssurance's uncertain tax positions in each period, if recognized, would affect the effective tax rate. As with any uncertain tax position, there is a possibility that the ultimate benefit realized could differ from the estimate management has established. Management believes that it is reasonably possible that a portion of unrecognized tax benefits at December 31, 2022 may change during the next twelve months. However, an estimate of the change cannot be made at this time. ProAssurance recognizes interest and/or penalties related to income tax matters as a component of income tax expense. Interest and penalties recognized in the Consolidated Statements of Income and Comprehensive Income were nominal for each of the years ended December 31, 2022, 2021 and 2020. The accrued liability for interest was approximately $0.5 million and $0.4 million at December 31, 2022 and 2021, respectively. Income tax expense (benefit) for each of the years ended December 31, 2022, 2021 and 2020 consisted of the following: (In thousands) 2022 2021 2020 Provision for income taxes: Current expense (benefit) Federal and foreign $ 793 $ 885 $ (19,885) State 14 279 (296) Total current expense (benefit) 807 1,164 (20,181) Deferred expense (benefit) Federal and foreign (6,826) 1,290 (20,476) State 205 29 (672) Total deferred expense (benefit) (6,621) 1,319 (21,148) Total income tax expense (benefit) $ (5,814) $ 2,483 $ (41,329) A reconciliation of “expected” federal income tax expense (benefit) to actual income tax expense (benefit) for each of the years ended December 31, 2022, 2021 and 2020 were as follows: (In thousands) 2022 2021 2020 Computed “expected” tax expense (benefit) $ (1,305) $ 30,787 $ (45,582) Tax-exempt income (1) (1,072) (1,298) (976) Tax credits (4,805) (13,160) (17,876) Non-U.S. operating results (411) (1,322) (1,307) Tax deficiency (excess tax benefit) on share-based compensation 309 286 457 Tax rate differential on loss carryback (2) — — (7,758) Goodwill impairment (3) — — 31,413 Change in limitation of future deductibility of certain executive compensation 708 303 75 Non-taxable gain on bargain purchase (4) — (15,626) — Non-taxable contingent consideration (5) (1,890) — — GILTI and subpart F income 556 721 800 Provision-to-return and other differences 1,112 3,574 1,217 Change in uncertain tax positions 780 (1,909) (1,674) State income taxes 105 460 (561) Other 99 (333) 443 Total income tax expense (benefit) $ (5,814) $ 2,483 $ (41,329) (1) Includes tax-exempt interest, dividends received deduction and change in cash surrender value of BOLI. (2) The tax rate differential on loss carryback for the year ended December 31, 2020 represents the additional tax rate differential of 14% on the carryback of the 2020 and 2019 NOLs to the 2015 and 2014 tax years, respectively, as a result of changes made by the CARES Act to the NOL provisions of the tax law (see further discussion in this section under the heading "Coronavirus Aid, Relief and Economic Security Act"). (3) Represents the tax impact of the impairment of non-deductible goodwill in relation to the Specialty P&C reporting unit during the third quarter of 2020. Of the $161.1 million goodwill impairment, $149.6 million was non-deductible for which no tax benefit was recognized while the remaining $11.5 million was deductible for which a 21% tax benefit was recognized on the related tax amortization (see further discussion on the impairment charge in Note 7). (4) Represents the tax impact of the non-taxable gain on bargain purchase as a result of the Company's acquisition of NORCAL on May 5, 2021. See further discussion on the gain on bargain purchase in Note 2. (5) Represents the tax impact of the change in the fair value of contingent consideration issued in connection with the NORCAL acquisition, all of which is non-taxable. See further discussion on the contingent consideration in Note 2 and Note 3 of the Notes to Consolidated Financial Statements. Coronavirus Aid, Relief and Economic Security Act In response to COVID-19, the CARES Act was signed into law on March 27, 2020 and contains several provisions for corporations and eased certain deduction limitations originally imposed by the TCJA. The CARES Act, among other things, includes temporary changes regarding the prior and future utilization of NOLs, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes and the creation of certain refundable employee retention credits. As a result of the CARES Act, ProAssurance was permitted to carryback NOLs generated in tax years 2019 and 2020 for up to five years. ProAssurance generated an NOL of approximately $33.3 million from the 2020 tax year that was carried back to the 2015 tax year which resulted in a tax refund of approximately $11.7 million received in February 2023. Additionally, ProAssurance had an NOL of approximately $25.6 million from the 2019 tax year that was carried back to the 2014 tax year which resulted in a tax refund of approximately $9.0 million received in February 2021. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill is recognized in conjunction with business acquisitions as the excess of the purchase consideration for the business acquisition over the fair value of identifiable assets acquired and liabilities assumed. The fair value of identifiable assets acquired and liabilities assumed, and thus goodwill, is subject to redetermination within a measurement period of up to one year following completion of a business acquisition. Goodwill is tested for impairment annually or more frequently if circumstances indicate an impairment may have occurred. The date of the Company's annual goodwill impairment test is October 1. Impairment of goodwill is tested at the reporting unit level, which is consistent with the Company's reportable segments identified in Note 16. Of the Company's five reporting units, two have net goodwill: Workers' Compensation Insurance and Segregated Portfolio Cell Reinsurance. Interim Impairment Assessments During the third quarter of 2020, management performed interim impairment assessments of the goodwill in the Company's Specialty P&C, Workers' Compensation Insurance and Segregated Portfolio Cell Reinsurance reporting units due to the significant market volatility impacting its actual and projected results along with a decline in its stock price. The goodwill analysis indicated an impairment of the goodwill associated with the Company's Specialty P&C reporting unit and accordingly it recorded a $161.1 million charge to goodwill. Annual Impairment Assessments Subsequent to performing the interim impairment assessments, the Company performed its annual goodwill impairment assessment on October 1, 2020. As of the goodwill impairment test performed on October 1, 2020, the Company elected to perform a qualitative goodwill impairment test for its Workers' Compensation Insurance and Segregated Portfolio Cell Reinsurance reporting units. These reporting units have historically had an excess of fair value over book value and based on current operations are expected to continue to do so; therefore, the Company's annual impairment test for these reporting units was performed qualitatively. In applying the qualitative approach, management considered macroeconomic factors, industry and market conditions, cost factors that could have a negative impact on the reporting units, actual financial performance of the reporting units versus expectations and management's future business expectations. As a result of the qualitative assessments, management concluded that it was not more likely than not that the fair value of each of the Company's two reporting units that have net goodwill was less than the carrying value of each reporting unit as of the testing date; therefore, no further impairment testing was required. Management performed a quantitative impairment test for both the Workers' Compensation Insurance and Segregated Portfolio Cell Reinsurance reporting units on October 1, 2022 and October 1, 2021. In applying the quantitative approach, management estimated the fair value of the Workers' Compensation Insurance and Segregated Portfolio Cell Reinsurance reporting units using both an income approach and market approach based on the valuation methodologies and process for developing assumptions described in Note 1. To corroborate the reporting units’ valuation, a reconciliation of the estimate of the aggregate fair value of the reporting units to ProAssurance's market capitalization was performed, including consideration of a control premium. As a result of the quantitative assessments, management concluded that the fair value of each of the Workers' Compensation Insurance and Segregated Portfolio Cell Reinsurance reporting units exceeded the carrying value as of the testing date; therefore, goodwill was not impaired and no further goodwill impairment testing was required. No goodwill impairment was recorded during the years ended December 31, 2022 or 2021. See Note 1 for further information on how the Company tests goodwill for impairment. The table below presents the carrying amount of goodwill and accumulated impairment losses by reporting unit at December 31, 2022 and 2021: Reporting Unit (In thousands) Specialty P&C Workers' Compensation Insurance Segregated Portfolio Cell Reinsurance Total Goodwill, gross as of January 1, 2021 $ — $ 44,110 $ 5,500 $ 49,610 Accumulated impairment losses — — — — Goodwill, net as of December 31, 2021 $ — $ 44,110 $ 5,500 $ 49,610 Accumulated impairment losses — — — — Goodwill, net as of December 31, 2022 $ — $ 44,110 $ 5,500 $ 49,610 |
Reserve for Losses and Loss Adj
Reserve for Losses and Loss Adjustment Expenses | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Reserve for Losses and Loss Adjustment Expenses | Reserve for Losses and Loss Adjustment Expenses The reserve for losses is established based on estimates of individual claims and actuarially determined estimates of future losses based on ProAssurance’s past loss experience, available industry data and projections as to future claims frequency, severity, inflationary trends and settlement patterns. Estimating the reserve, particularly the reserve appropriate for liability exposures, is a complex process. For a high proportion of the risks insured or reinsured by ProAssurance, claims may be resolved over an extended period of time, often five years or more, and may be subject to litigation. Estimating losses requires ProAssurance to make and revise judgments and assessments regarding multiple uncertainties over an extended period of time. As a result, the reserve estimate may vary considerably from the eventual outcome. The assumptions used in establishing ProAssurance’s reserve are regularly reviewed and updated by management as new data becomes available. Changes to estimates of previously established reserves are included in earnings in the period in which the estimate is changed. ProAssurance believes that the methods it uses to establish reserves are reasonable and appropriate. Each year, ProAssurance uses internal actuaries to review the reserve for losses of each insurance subsidiary. ProAssurance also engages consulting actuaries to review ProAssurance claims data and provide observations regarding cost trends, rate adequacy and ultimate loss costs. The statutory filings of each insurance company with the insurance regulators must be accompanied by a consulting actuary's certification as to their respective reserves. ProAssurance considers the views of the actuaries as well as other factors, such as premium rates, historical paid and incurred loss development trends and an evaluation of the current loss environment including frequency, severity, expected effect of inflation, general economic and social trends, and the legal and political environment in establishing the amount of its reserve for losses. The effect of COVID-19 on recent historical trends regarding timing and severity of claims may also impact certain of these factors and the Company's ultimate estimation of losses (see "Item 1A, Risk Factors" included in this report for additional information). As a result of COVID-19, the industry has experienced new conditions, including the postponement of court cases and changes in settlement trends. ProAssurance's booked reserves as of December 31, 2022 include consideration of these factors, but the duration and degree to which these issues persist, along with potential legislative, regulatory or judicial actions, could result in significant changes to the Company's reserve estimates in future periods. ProAssurance partitions its reserve by accident year, which is the year in which the claim becomes its liability. For claims-made policies, the insured event generally becomes a liability when the event is first reported to the Company. For occurrence policies, the insured event becomes a liability when the event takes place. For retroactive coverages, the insured event becomes a liability at inception of the underlying contract. As claims are incurred (reported) and claim payments are made, they are aggregated by accident year for analysis purposes. ProAssurance also partitions its reserve by reserve type: case reserves and IBNR reserves. Case reserves are established by the claims department based upon the particular circumstances of each reported claim and represent ProAssurance’s estimate of the future loss costs (often referred to as expected losses) that will be paid on reported claims. Case reserves are decremented as claim payments are made and are periodically adjusted upward or downward as estimates regarding the amount of future losses are revised; a reported loss for an individual claim equates to the case reserve at any point in time plus the claim payments that have been made to date. IBNR reserves represent an estimate, in the aggregate, of future development on losses that have been reported to ProAssurance plus an estimate of losses that have been incurred but not reported. Acquired Reserve The acquisition of NORCAL increased ProAssurance's net reserves by $1.1 billion which represented the fair value of NORCAL's reserve, net of the fair value of related reinsurance recoverables, at the time of acquisition including a fair value adjustment on the reserve as well as negative VOBA recorded on NORCAL's unearned premium and DDR reserve. The reserve fair value adjustment will be amortized utilizing loss payment patterns and the negative VOBAs will be amortized over a period in proportion to the earn-out of the premium or in-line with the approximate consumption of losses. Such amortization is recorded as a reduction to net losses and loss adjustment expenses. Development of Prior Accident Years In addition to setting the initial reserve for the current accident year, each period ProAssurance reassesses the amount of reserve required for prior accident years. The foundation of ProAssurance’s reserve re-estimation process is an actuarial analysis that is performed by both the internal and consulting actuaries. This detailed analysis projects ultimate losses based on partitions which include line of business, geography, coverage layer and accident year. The procedure uses the most representative data for each partition, capturing its unique patterns of development and trends. ProAssurance believes that the use of consulting actuaries provides an independent view of the loss data as well as a broader perspective on industry loss trends. Reserving Methodologies For the HCPL, Medical Technology Liability and Workers’ Compensation lines of business, the analysis performed by the consulting actuaries analyzes each partition of the business in a variety of ways and uses multiple actuarial methodologies in performing these analyses, including: Bornhuetter-Ferguson (Paid and Reported) Method, Paid Development Method, Reported (Incurred) Development Method, Average Paid Value Method and Average Reported Value Method. Generally, methods such as the Bornhuetter-Ferguson Method are used on more recent accident years where there is less data available on which to base the analysis. As time progresses and an increased amount of data is available for a given accident year, management gives more confidence to the development and average methods, as these methods typically rely more heavily on ProAssurance's own historical data. These methods emphasize different aspects of loss reserve estimation and provide a variety of perspectives for ProAssurance's decisions. For the Workers’ Compensation line of business in both the Workers' Compensation Insurance and Segregated Portfolio Cell Reinsurance segments, ProAssurance utilizes the Reported (Incurred) Development Method, Paid Loss Development Method and Bornhuetter-Ferguson Method, to develop the reserve for each accident year. The actuarial review includes the stratification of claims data (lost time claims and medical only claims) using different variations that allow for identification of trends that may not be readily identifiable if the data was evaluated only in the aggregate. Reported and paid loss development factors are key assumptions in the reserve estimation process and are based on ProAssurance’s historical reported and paid loss development patterns. As accident years mature, the various actuarial methodologies produce more consistent loss estimates. For the Lloyd’s Syndicates segment business, losses are initially estimated using the loss assumptions by risk category incorporated into the business plan submitted to Lloyd’s with consideration given to loss experience incurred to date. These assumptions were influenced by loss results reflected in Lloyd’s historical data for similar risks. As losses are reported and resolved and loss experience becomes more credible from a statistical perspective, actual loss experience is incorporated into the estimates. Certain of the methodologies utilized to estimate the ultimate losses for each partition of the reserve consider the actual amounts paid. Paid data is particularly influential when a large portion of known claims have been closed, as is the case for older accident years. In selecting a point estimate for each partition, management considers the extent to which trends are emerging consistently for all partitions and known industry trends. Thus, actual, rather than estimated severity trends are given more consideration. If actual severity trends are lower than those estimated at the time that reserves were previously established, the recognition of favorable development is indicated. This is particularly true for older accident years where actuarial methodologies give more weight to actual loss costs (severity). The various actuarial methods discussed above are applied in a consistent manner from period to period. In addition, ProAssurance performs statistical reviews of claims data such as claim counts, average settlement costs and severity trends when establishing the reserve. Selected point estimates of ultimate losses are utilized to develop estimates of ultimate losses recoverable from reinsurers, based on the terms and conditions of ProAssurance’s reinsurance agreements. An overall estimate of the amount receivable from reinsurers is determined by combining the individual estimates. ProAssurance’s net reserve estimate is the gross reserve point estimate less the estimated reinsurance recovery. Activity in the reserve for losses and loss adjustment expenses is summarized as follows: (In thousands) 2022 2021 2020 Balance, beginning of year $ 3,579,940 $ 2,417,179 $ 2,346,526 Less reinsurance recoverables on unpaid losses and loss adjustment expenses 451,741 385,087 390,708 Net balance, beginning of year 3,128,199 2,032,092 1,955,818 Net reserves acquired from acquisitions — 1,089,103 — Net losses: Current year (1)(3) 813,515 797,732 711,846 Favorable development of reserves established in prior years, net (2) (36,753) (45,483) (50,399) Total 776,762 752,249 661,447 Paid related to: Current year (4) (108,139) (109,925) (83,204) Prior years (4) (757,564) (635,320) (501,969) Total paid (865,703) (745,245) (585,173) Net balance, end of year 3,039,258 3,128,199 2,032,092 Plus reinsurance recoverables on unpaid losses and loss adjustment expenses 431,889 451,741 385,087 Balance, end of year $ 3,471,147 $ 3,579,940 $ 2,417,179 (1) Current year net losses for the years ended December 31, 2022 and 2021 included $4.9 million and $6.7 million, respectively, of purchase accounting amortization of the negative VOBA associated with NORCAL's assumed unearned premium, which was amortized over a period in proportion to the earn-out of the associated premium as a reduction to current accident year net losses (see Note 2). As of June 30, 2022, the negative VOBA was fully amortized. (2) Net favorable prior year reserve development recognized for the years ended December 31, 2022 and 2021 included $10.8 million and $7.9 million, respectively, of amortization of the purchase accounting fair value adjustment on NORCAL's assumed net reserve and amortization of the negative VOBA associated with NORCAL's DDR reserve which is recorded as a reduction to prior accident year net losses and loss adjustment expenses (see Note 2). Net favorable prior accident year reserve development recognized in 2022 included favorable development related to NORCAL's 2021 accident year. ProAssurance has not recognized any development related to NORCAL's accident years 2020 or prior since the date of acquisition on May 5, 2021. (3) During 2020, a large national healthcare account did not renew on terms offered by the Company and exercised its contractual option to purchase extended reporting endorsement or "tail" coverage. As a result, ProAssurance recognized total current year losses of $60.0 million (assumes a full limit loss) within the Specialty P&C segment for the year ended December 31, 2020. (4) Paid losses for the years ended December 31, 2022 and 2021 included prior year paid losses of $262.5 million and $136.0 million, respectively, and current year paid losses of $16.6 million and $22.3 million, respectively, related to reserves acquired from NORCAL since May 5, 2021. As discussed in Note 1, estimating liability reserves is complex and requires the use of many assumptions. As time passes and ultimate losses for prior years are either known or become subject to a more precise estimation, ProAssurance increases or decreases the reserve estimates established in prior periods. The consolidated net favorable loss development recognized for the year ended December 31, 2022 primarily reflected lower than anticipated loss emergence in the Specialty P&C segment related to the 2017, 2020 and 2021 accident years, primarily attributable to NORCAL's 2021 accident year, and, to a lesser extent, the Medical Technology Liability line of business. The net favorable development recognized in the Specialty P&C segment also included a $9.0 million reduction in the Company's prior accident year IBNR reserve for COVID-19 as early first notices of potential claims related to anticipated COVID losses have not turned into claims. Further, the net favorable development recognized in the Specialty P&C segment was partially offset by higher than anticipated loss severity trends in select jurisdictions in the HCPL line of business, which emerged primarily in the fourth quarter of 2022. The net favorable development also reflected overall favorable trends in claim closing patterns in the Workers' Compensation Insurance and Segregated Portfolio Cell Reinsurance segments. The net favorable loss development recognized in the Workers' Compensation Insurance segment is primarily related to the 2017 through 2020 accident years. The net favorable loss development recognized in the Segregated Portfolio Cell Reinsurance segment is primarily related to the 2016 through 2021 accident years. Consolidated net favorable loss development recognized in 2022 was partially offset by unfavorable reserve development recognized in the Lloyd's Syndicates segment driven by higher than expected loss development on certain large claims, primarily catastrophe related losses. The net favorable loss development recognized for the year ended December 31, 2021 primarily reflected a lower than anticipated loss emergence in the Specialty P&C segment, primarily related to the 2015 through 2020 accident years. Net favorable prior accident year reserve development recognized in the Specialty P&C segment also included a $1.0 million reduction in the Company's IBNR reserve for COVID-19 during the third quarter of 2021. The net favorable development also reflected overall favorable trends in claim closing patterns in the Workers' Compensation Insurance and Segregated Portfolio Cell Reinsurance segments. The net favorable loss development recognized in the Workers' Compensation Insurance segment is primarily related to the 2012 through 2017 accident years. The net favorable loss development recognized in the Segregated Portfolio Cell Reinsurance segment is primarily related to accident year 2015 and accident years 2018 through 2020. Consolidated net favorable loss development recognized in 2021 was partially offset by unfavorable reserve development recognized in the Lloyd's Syndicates segment driven by certain catastrophe related losses. The net favorable loss development recognized for the year ended December 31, 2020 primarily reflected a lower than anticipated claims severity trend (i.e., the average size of a claim) in the Specialty P&C segment, primarily related to the 2014 through 2017 accident years. The net favorable development also reflected overall favorable trends in claim closing patterns in the Segregated Portfolio Cell Reinsurance and Workers' Compensation Insurance segments. The net favorable loss development recognized in the Segregated Portfolio Cell Reinsurance segment primarily related to the 2014 through 2019 accident years and the net favorable loss development recognized in the Workers' Compensation Insurance segment primarily related to the 2014 through 2017 accident years. Claims Development ProAssurance establishes its reserve and manages claims activity by coverage, product or line of business and various categories of reserves have similar characteristics. Therefore, ProAssurance has aggregated these reserve categories into several reserve groups in the following disclosures and tables that provide a more meaningful view of the amount, timing and uncertainty of cash flows arising from the liability. At the same time, these reserve groups present a disaggregated view of the major elements of the overall loss reserve liability. The reserve groups include HCPL claims-made reserve, HCPL occurrence reserve, Medical Technology Liability claims-made reserve, Workers’ Compensation Insurance reserve and Segregated Portfolio Cell Reinsurance - workers' compensation reserve. All other loss reserve categories are deemed to be less homogeneous or relatively small on a standalone basis and are included in other short-duration lines in the claims development reconciliation. The composition of the reserve groups is based on similar characteristics with respect to the risks being insured and the reporting and payout pattern of the underlying claims. In most instances the groups follow the coverage categorizations used in statutory financial reporting for U.S.-domiciled property-casualty insurance companies. HCPL claims are disaggregated into those claims covered by claims-made policies and those claims covered by occurrence policies. For claims-made policies, the insured event generally becomes a liability when the event is first reported to the insurer. For occurrence policies, the insured event becomes a liability when the event takes place, even if unknown at that time. Claims-made coverage has a short reporting pattern, with virtually all claims known shortly after the end of the policy period. Occurrence coverage claims can have an extended reporting pattern, with the time from the loss event until the filing of the claim often measured in years, at which point the claims resolution process begins. Although the resolution process and time frame is similar once a claim is reported, combining claims from claims-made and occurrence coverage types would result in distortion due to the difference in reporting lag. Medical Technology Liability reserves are grouped separately due to the nature of the risk, including the potential for mass torts and multiple claims arising out of the same product or service. The small amount of Medical Technology Liability occurrence reserves are included in other short-duration lines. Workers' compensation reserves in the Workers' Compensation Insurance and the Segregated Portfolio Cell Reinsurance segments are each grouped separately due to the difference in the type of coverage provided and the differences in the claims resolution process as compared to other liability insurance. The small amount of HCPL reserves in the Segregated Portfolio Cell Reinsurance segment are included in other short-duration lines. ProAssurance has elected to present reserve history for acquired entities in all periods shown in the tables below, including periods prior to acquisition. With the exception of the Workers' Compensation Insurance and Segregated Portfolio Cell Reinsurance - workers' compensation lines of business, virtually all other acquired entities are captured within the HCPL line of business. All information prior to 2022 disclosed in the Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance, Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance and Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance tables that follow is presented as supplementary information. The “Cumulative Number of Reported Claims” in the tables that follow includes the combined number of claims for an accident year and excludes projected unreported IBNR claims. A claim is considered reported when ProAssurance becomes aware of and accepts it for coverage under the terms of the Company's insurance contracts. Healthcare Professional Liability Reserve HCPL loss costs are impacted by many factors, including but not limited to the nature of the claim, including whether or not the claim is an individual or a mass tort claim, the personal situation of the claimant or the claimant's family, the outcome of jury trials, the legislative and judicial climate where any potential litigation may occur, general economic and social conditions and, for claims involving bodily injury, the trend of healthcare costs. ProAssurance sets an initial reserve based upon the evaluation of the current loss environment including frequency, severity, the expected effect of inflation, general economic and social trends, and the legal and political environment. The initial loss ratio for HCPL business has ranged from 83% to 106% in the past five years. ProAssurance has elected to present reserve history for NORCAL in all periods shown in the Healthcare Professional Liability tables below, including periods prior to acquisition. Healthcare Professional Liability Claims-Made Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2022 ($ in thousands) Year Ended December 31, 2022 IBNR* Cumulative Number of Reported Claims 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 527,520 $ 513,937 $ 501,580 $ 489,378 $ 480,036 $ 466,798 $ 451,182 $ 455,346 $ 457,038 $ 455,583 $ (29) 7,699 2014 — $ 509,774 $ 494,024 $ 491,403 $ 488,185 $ 474,317 $ 468,153 $ 470,189 $ 466,554 464,976 $ 566 7,523 2015 — — $ 503,412 $ 486,760 $ 492,824 $ 491,180 $ 500,336 $ 500,550 $ 503,600 503,628 $ (4,337) 7,409 2016 — — — $ 484,153 $ 488,349 $ 507,586 $ 555,416 $ 554,395 $ 560,840 557,097 $ (542) 7,986 2017 — — — — $ 508,072 $ 506,207 $ 577,401 $ 569,737 $ 573,570 557,620 $ (14,294) 8,067 2018 — — — — — $ 544,617 $ 643,864 $ 630,169 $ 636,023 642,948 $ (62,313) 8,478 2019 — — — — — — $ 670,958 $ 664,934 $ 642,370 646,676 $ (22,209) 8,452 2020 — — — — — — — $ 593,994 $ 574,274 557,651 $ (21,795) 6,689 2021 — — — — — — — — $ 527,718 524,468 $ 78,103 5,289 2022 — — — — — — — — — 464,069 $ 269,309 4,626 Total $ 5,374,716 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 30,214 $ 142,759 $ 255,605 $ 328,982 $ 376,930 $ 398,549 $ 415,012 $ 430,916 $ 435,158 $ 439,029 2014 — $ 30,483 $ 125,078 $ 246,510 $ 325,782 $ 389,983 $ 416,150 $ 434,540 $ 439,575 446,402 2015 — — $ 26,664 $ 125,234 $ 256,791 $ 351,703 $ 410,506 $ 446,069 $ 463,224 476,664 2016 — — — $ 27,442 $ 137,338 $ 276,548 $ 378,828 $ 440,163 $ 472,441 499,431 2017 — — — — $ 32,342 $ 147,515 $ 288,695 $ 351,548 $ 419,180 467,423 2018 — — — — — $ 34,238 $ 159,657 $ 279,204 $ 367,522 450,952 2019 — — — — — — $ 37,755 $ 144,225 $ 259,889 364,411 2020 — — — — — — — $ 32,270 $ 117,153 234,804 2021 — — — — — — — — $ 23,494 110,483 2022 — — — — — — — — — 24,792 Total 3,514,391 All outstanding liabilities before 2013, net of reinsurance 19,514 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 1,879,839 Healthcare Professional Liability Occurrence Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2022 ($ in thousands) Year Ended December 31, 2022 IBNR* Cumulative Number of Reported Claims 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 51,996 $ 54,143 $ 49,970 $ 53,905 $ 56,640 $ 50,632 $ 49,270 $ 47,550 $ 48,116 $ 47,144 $ 998 640 2014 — $ 45,975 $ 43,606 $ 44,075 $ 40,699 $ 37,653 $ 34,428 $ 33,353 $ 35,139 35,839 $ 1,179 543 2015 — — $ 52,531 $ 54,890 $ 56,621 $ 57,606 $ 52,455 $ 51,276 $ 56,468 61,198 $ 391 615 2016 — — — $ 56,089 $ 49,795 $ 53,358 $ 56,345 $ 66,886 $ 64,122 68,674 $ 2,300 710 2017 — — — — $ 45,463 $ 42,338 $ 40,983 $ 44,449 $ 46,865 50,652 $ 4,283 743 2018 — — — — — $ 59,351 $ 61,880 $ 63,576 $ 73,599 74,419 $ 1,388 709 2019 — — — — — — $ 63,548 $ 58,555 $ 70,926 86,543 $ 6,155 827 2020 — — — — — — — $ 165,955 $ 178,804 181,643 $ 79,785 1,641 2021 — — — — — — — — $ 82,590 81,254 $ 47,133 422 2022 — — — — — — — — — 82,436 $ 78,046 135 Total $ 769,802 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 539 $ 4,620 $ 12,130 $ 25,131 $ 30,474 $ 37,778 $ 40,775 $ 42,455 $ 43,254 $ 44,419 2014 — $ 512 $ 4,674 $ 11,192 $ 17,349 $ 22,649 $ 25,671 $ 27,753 $ 30,407 31,285 2015 — — $ (180) $ 2,617 $ 9,953 $ 20,627 $ 28,482 $ 36,413 $ 41,800 52,017 2016 — — — $ 44 $ 2,750 $ 15,433 $ 28,362 $ 40,766 $ 48,691 54,324 2017 — — — — $ (6,631) $ (3,385) $ 3,592 $ 11,051 $ 19,696 30,489 2018 — — — — — $ 444 $ 6,193 $ 15,229 $ 26,932 37,828 2019 — — — — — — $ 628 $ 4,575 $ 10,399 26,359 2020 — — — — — — — $ 397 $ 6,194 21,100 2021 — — — — — — — — $ 762 4,335 2022 — — — — — — — — — 675 Total 302,831 All outstanding liabilities before 2013, net of reinsurance 5,095 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 472,066 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Unaudited Healthcare Professional Liability Claims-Made 5.6% 19.2% 23.1% 15.9% 12.0% 6.4% 4.0% 2.4% 1.2% 0.8% Healthcare Professional Liability Occurrence (0.7%) 6.1% 13.2% 18.6% 14.8% 13.9% 7.3% 9.2% 2.1% 2.5% Medical Technology Liability Reserve The risks insured in the Medical Technology Liability line of business are more varied, and policies are individually priced based on the risk characteristics of the policy and the account. These policies often have substantial deductibles or self-insured retentions, and the insured risks range from startup operations to large multinational entities. Premiums are established using the most recently developed actuarial estimates of losses expected to be incurred based on factors which include: results from prior analysis of similar business, industry indications, observed trends and judgment. Claims in this line of business primarily involve bodily injury to individuals and are affected by factors similar to those of the HCPL line of business. For the Medical Technology Liability line of business, ProAssurance also establishes an initial reserve using a loss ratio approach, including a provision in consideration of historical loss volatility that this line of business has exhibited. Medical Technology Liability Claims-Made Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2022 ($ in thousands) Year Ended December 31, 2022 IBNR* Cumulative Number of Reported Claims 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 9,807 $ 9,955 $ 9,536 $ 7,226 $ 4,697 $ 3,566 $ 3,504 $ 3,305 $ 3,199 $ 3,164 $ 60 218 2014 — $ 9,989 $ 10,306 $ 9,012 $ 8,984 $ 7,679 $ 6,194 $ 5,888 $ 5,636 5,472 $ 242 272 2015 — — $ 9,376 $ 8,757 $ 7,193 $ 5,929 $ 5,081 $ 4,664 $ 4,192 3,499 $ 75 156 2016 — — — $ 9,200 $ 8,467 $ 7,413 $ 6,422 $ 6,241 $ 4,491 5,145 $ 689 182 2017 — — — — $ 11,049 $ 10,143 $ 8,306 $ 4,919 $ 3,381 5,351 $ 1,278 98 2018 — — — — — $ 10,141 $ 8,108 $ 7,506 $ 4,961 4,646 $ 794 218 2019 — — — — — — $ 10,072 $ 8,324 $ 9,588 7,658 $ 1,272 361 2020 — — — — — — — $ 11,082 $ 10,671 9,150 $ 6,637 178 2021 — — — — — — — — $ 13,914 11,909 $ 9,562 174 2022 — — — — — — — — — 15,014 $ 14,733 159 Total $ 71,008 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 102 $ 1,029 $ 1,967 $ 2,599 $ 3,092 $ 3,102 $ 3,102 $ 3,102 $ 3,101 $ 3,102 2014 — $ 388 $ 1,527 $ 2,564 $ 3,046 $ 3,724 $ 3,776 $ 4,074 $ 4,076 4,076 2015 — — $ 25 $ 440 $ 1,625 $ 2,097 $ 2,567 $ 2,911 $ 2,987 2,989 2016 — — — $ 53 $ 1,690 $ 2,365 $ 2,959 $ 4,295 $ 4,342 4,383 2017 — — — — $ 56 $ 1,681 $ 2,017 $ 2,360 $ 2,867 4,073 2018 — — — — — $ 6 $ 191 $ 1,850 $ 2,651 3,065 2019 — — — — — — $ 584 $ 2,552 $ 3,902 5,321 2020 — — — — — — — $ 40 $ 526 1,034 2021 — — — — — — — — $ 4 384 2022 — — — — — — — — — 24 Total 28,451 All outstanding liabilities before 2013, net of reinsurance 36 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 42,593 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Unaudited Medical Technology Liability 2.1 % 18.0 % 20.1 % 13.7 % 14.3 % 6.9 % 2.1 % — % — % — % Workers' Compensation Insurance Reserve Many factors affect the ultimate losses incurred for the workers' compensation coverages in the Workers' Compensation Insurance segment including, but not limited to, the type and severity of the injury, the age and occupation of the injured worker, the estimated length of disability, medical treatment and related costs, and the jurisdiction and workers' compensation laws of the injury occurrence. ProAssurance uses various actuarial methodologies in developing the workers’ compensation reserve combined with a review of the exposure base generally based upon payroll of the insured. For the current accident year, given the lack of seasoned information, the different actuarial methodologies produce results with considerable variability; therefore, more emphasis is placed on supplementing results from the actuarial methodologies with trends in exposure base, medical expense inflation, general inflation, severity, and claim counts, among other things, to select an expected loss ratio. Workers' Compensation Insurance Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2022 ($ in thousands) Year Ended December 31, 2022 IBNR* Cumulative Number of Reported Claims 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 86,973 $ 85,935 $ 86,928 $ 88,010 $ 87,260 $ 87,260 $ 89,760 $ 89,560 $ 88,930 $ 88,557 $ — 16,429 2014 — $ 93,019 $ 93,529 $ 93,029 $ 93,029 $ 93,029 $ 93,029 $ 91,329 $ 90,532 89,639 $ — 16,210 2015 — — $ 100,101 $ 100,454 $ 98,454 $ 97,654 $ 96,354 $ 93,054 $ 91,840 90,547 $ — 16,551 2016 — — — $ 101,348 $ 97,348 $ 92,148 $ 84,799 $ 82,799 $ 80,751 78,808 $ — 15,979 2017 — — — — $ 99,874 $ 99,874 $ 99,874 $ 97,874 $ 95,674 92,715 $ 311 16,085 2018 — — — — — $ 118,095 $ 118,095 $ 120,095 $ 120,095 120,056 $ 1,567 18,016 2019 — — — — — — $ 115,852 $ 115,852 $ 115,352 112,534 $ 1,481 17,527 2020 — — — — — — — $ 102,475 $ 102,475 101,621 $ 2,785 14,526 2021 — — — — — — — — $ 105,722 108,722 $ 4,913 15,479 2022 — — — — — — — — — 104,675 $ 29,086 14,763 Total $ 987,874 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 30,554 $ 63,825 $ 76,813 $ 82,369 $ 85,689 $ 86,783 $ 87,466 $ 87,772 $ 88,033 $ 88,074 2014 — $ 30,368 $ 65,922 $ 77,631 $ 85,022 $ 87,314 $ 87,998 $ 88,487 $ 88,977 89,081 2015 — — $ 32,078 $ 65,070 $ 78,947 $ 83,483 $ 86,528 $ 87,884 $ 88,476 89,089 2016 — — — $ 28,377 $ 58,192 $ 69,237 $ 74,886 $ 76,954 $ 77,546 77,265 2017 — — — — $ 31,586 $ 70,333 $ 82,289 $ 87,129 $ 88,504 88,953 2018 — — — — — $ 41,619 $ 86,063 $ 104,216 $ 110,928 114,525 2019 — — — — — — $ 40,994 $ 84,108 $ 100,373 105,724 2020 — — — — — — — $ 32,447 $ 74,532 90,174 2021 — — — — — — — — $ 39,634 81,499 2022 — — — — — — — — — 38,734 Total 863,118 All outstanding liabilities before 2013, net of reinsurance 12,558 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 137,314 Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Unaudited Workers' Compensation Insurance 35.0 % 38.7 % 14.4 % 6.0 % 2.8 % 0.9 % 0.4 % 0.5 % 0.2 % — % Segregated Portfolio Cell Reinsurance - Workers' Compensation Reserve The Company estimates and reserves for the workers' compensation business assumed by the Segregated Portfolio Cell Reinsu |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies ProAssurance is involved in various legal actions related to insurance policies and claims handling including, but not limited to, claims asserted by policyholders. These types of legal actions arise in the Company's ordinary course of business and, in accordance with GAAP for insurance entities, are considered as a part of the Company's loss reserving process, which is described in detail under the heading "Losses and Loss Adjustment Expenses" in the Accounting Policies section in Note 1. ProAssurance also has other direct actions against the Company unrelated to its claims activity which are evaluated and accounted for as a part of other liabilities. For these corporate legal actions, the Company evaluates each case separately and establishes what it believes is an appropriate reserve based on GAAP guidance related to contingent liabilities. As of December 31, 2022, there were no material reserves established for corporate legal actions. As a member of Lloyd's, ProAssurance has obligations to Syndicate 1729 including a Syndicate Credit Agreement and FAL requirements. The Syndicate Credit Agreement is an unconditional revolving credit agreement to the Premium Trust Fund of Syndicate 1729 for the purpose of providing working capital. At December 31, 2022, the maximum permitted borrowings under the Syndicate Credit Agreement were approximately £15.0 million (approximately $18.1 million at December 31, 2022). Effective July 1, 2022, maximum permitted borrowings were reduced to £15.0 million from £30.0 million (approximately $36.2 million at December 31, 2022) under an amended Syndicate Credit Agreement executed in January 2022. The amended Syndicate Credit Agreement has a maturity date of June 30, 2023 and contains an annual auto-renewal feature which allows for ProAssurance to elect to non-renew if notice is given at least 30 days prior to the next auto-renewal date, which is one year prior to the maturity date. On May 23, 2022, ProAssurance provided such notice of termination of the Syndicate Credit Agreements. As a result, the Syndicate Credit Agreements will expire on June 30, 2023. Under the Syndicate Credit Agreement, advances bear interest at 3.8% annually and may be repaid at any time. As of December 31, 2022, there were no outstanding borrowings under the Syndicate Credit Agreement. ProAssurance provides FAL to support underwriting by Syndicate 1729 which is comprised of investment securities and cash and cash equivalents deposited with Lloyd's with a total fair value of approximately $24.8 million at December 31, 2022 (see Note 4). During the second quarter of 2022, ProAssurance received a return of approximately $5.5 million of cash from its FAL balances given Syndicate 6131 ceased underwriting on a quota share basis with Syndicate 1729 (see Note 16 for additional information). In addition, the return of FAL during the second quarter of 2022 related to the settlement of the Company's participation in the results of Syndicate 1729 and Syndicate 6131 for the 2019 underwriting year. Further, during the fourth quarter of 2022, ProAssurance received a return of approximately $5.6 million of cash from its FAL balances due to lower capital requirements for the 2023 underwriting year following Lloyd's of London's review of Syndicate 1729's 2023 business plan. ProAssurance has entered into financial instrument transactions that may present off-balance sheet credit risk or market risk. These transactions include a short-term loan commitment and commitments to provide funding to non-public investment entities. Of these total funding commitments, a nominal amount is related to qualified affordable housing project tax credit investments. Under the short-term loan commitment, ProAssurance has agreed to advance funds on a 30 day basis to a counterparty provided there is no violation of any condition established in the contract. As of December 31, 2022, ProAssurance had total funding commitments related to non-public investment entities as well as the short-term loan commitment of approximately $189.5 million which included the amount at risk if the full short-term loan is extended and the counterparties default. However, the credit risk associated with the short-term loan commitment is minimal as the counterparties to the contract are highly rated commercial institutions and to-date have been performing in accordance with their contractual obligations. As such, ProAssurance’s expected credit losses associated with this short-term loan commitment were nominal in amount as of December 31, 2022. ProAssurance has previously entered into a services agreement with a company to provide data analytics services for certain product lines within the Company's HCPL book of business. In November 2021, ProAssurance executed an amendment to this services agreement which extended the Company's commitment an additional three years for an annual fee of approximately $3.5 million. In addition, the amended services agreement contains an annual one-year auto-extension feature unless either party elects to non-renew the services agreement by providing notice at least six-months prior to the end of the contract. ProAssurance incurred operating expenses associated with this services agreement of $3.6 million, $2.6 million and $4.3 million for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, the remaining commitment under this agreement was estimated to be approximately $6.3 million. The purchase consideration in the NORCAL acquisition included contingent consideration. NORCAL policyholders who elected to receive NORCAL stock and tender it to ProAssurance are eligible for a share of contingent consideration in an amount of up to approximately $84 million depending upon the after-tax development of NORCAL's ultimate net losses between December 31, 2020 and December 31, 2023. As of December 31, 2022 and December 31, 2021, the contingent consideration liability was $15.0 million and $24.0 million, respectively, carried at fair value utilizing a stochastic model. This estimate does not guarantee that contingent consideration will ultimately be paid. Depending on NORCAL's actual ultimate net loss development between December 31, 2020 and December 31, 2023, the actual amount due to eligible policyholders may be greater than or less than the $15.0 million current fair value estimate. See further discussion around the contingent consideration in Note 2 and Note 3. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases ProAssurance is involved in a number of operating leases that are primarily for office facilities. Office facility leases have remaining lease terms ranging from one year to nine years; some of which include options to extend the leases for up to ten years, and some of which include an option to terminate the lease within one year. ProAssurance subleases certain office facilities to third parties and classifies these leases as operating leases. The following table provides a summary of the components of net lease expense as well as the reporting location in the Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2022, 2021 and 2020. (In thousands) Location in the Consolidated Statements of Income and Comprehensive Income Year Ended December 31 2022 2021 2020 Operating lease expense (1) Operating expense $ 5,395 $ 5,047 $ 4,355 Sublease income (2) Other income (469) (263) (143) Net lease expense $ 4,926 $ 4,784 $ 4,212 (1) Includes short-term lease costs and variable lease costs, if applicable. For the years ended December 31, 2022, 2021 and 2020, no short-term lease costs were recognized and variable lease costs were nominal in amount. (2) Sublease income excludes rental income from owned properties of $2.6 million during the year ended December 31, 2022 and $2.5 million during each of the years ended December 31, 2021 and 2020 which is included in other income. See “Item 2. Properties” for a listing of currently owned properties. The following table provides supplemental lease information for operating leases on the Consolidated Balance Sheet as of December 31, 2022 and December 31, 2021. Year Ended December 31 ($ in thousands) 2022 2021 Operating lease ROU assets $ 18,987 $ 19,595 Operating lease liabilities $ 20,008 $ 20,844 Weighted-average remaining lease term 7.37 years 7.05 years Weighted-average discount rate 3.22 % 2.84 % The following table provides supplemental lease information for the Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020. Year Ended December 31 (In thousands) 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,574 $ 5,775 $ 4,221 The following table is a schedule of remaining future minimum lease payments for operating leases that had an initial or remaining non-cancellable lease term in excess of one year as of December 31, 2022. (In thousands) 2023 $ 4,573 2024 3,127 2025 2,577 2026 2,310 2027 2,314 Thereafter 7,613 Total future minimum lease payments 22,514 Less: Imputed interest 2,506 Total operating lease liabilities $ 20,008 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt ProAssurance’s outstanding debt consisted of the following: ($ in thousands) December 31, December 31, Senior Notes due 2023, unsecured, interest at 5.3% annually $ 250,000 $ 250,000 Contribution Certificates due 2031, interest at 3.0% (effective interest rate at 4.35%) paid annually beginning April 2022 177,525 175,900 Total principal 427,525 425,900 Less unamortized debt issuance costs 542 914 Debt less unamortized debt issuance costs $ 426,983 $ 424,986 Senior Notes due 2023 (the Senior Notes) The Senior Notes are the unsecured obligations of ProAssurance Corporation, due in full in November 2023, unless redeemed sooner, with interest payable semiannually. Redemptions may be made prior to maturity, in whole or part, at the greater of par or the sum of the present values of the outstanding principal and remaining interest payments calculated at 0.4% above the then current rate for U.S. Treasury Notes with a term comparable to the remaining term of the Senior Notes. There are no financial covenants associated with the Senior Notes. Contribution Certificates On May 5, 2021, NORCAL Insurance Company, successor to NORCAL Mutual Insurance Company, issued Contribution Certificates, which are due in 2031, to certain NORCAL policyholders in the conversion. The Contribution Certificates have a principal amount of $191 million and were recorded at their fair value of $175 million at the date of the NORCAL acquisition. The difference of $16 million between the recorded acquisition date fair value and the principal balance of the Contribution Certificates will be accreted utilizing the effective interest method over the term of the certificates of ten years as an increase to interest expense. In addition, interest payments are subject to deferral if ProAssurance does not receive permission from the California Department of Insurance prior to payment. ProAssurance received permission from the California Department of Insurance to pay the first annual interest payment which was paid in April 2022. There are no financial covenants associated with the Contribution Certificates. See Note 2 for additional information on the Contribution Certificates assumed in the NORCAL acquisition. Revolving Credit Agreement ProAssurance has a Revolving Credit Agreement with seven participating lenders. The Revolving Credit Agreement, which expires November 2024, may be used for general corporate purposes, including, but not limited to, short-term working capital, share repurchases as authorized by the Board and support for other activities. ProAssurance's Revolving Credit Agreement permits borrowings up to $250 million, and has available a $50 million accordion feature which, if successfully subscribed, would expand the permitted borrowings to a maximum of $300 million. As of December 31, 2022 and 2021, there were no outstanding borrowings on the Revolving Credit Agreement. The Revolving Credit Agreement permits ProAssurance to borrow, repay and reborrow from the lenders during the term of the Revolving Credit Agreement. All borrowings are required to be repaid prior to the expiration date of the Revolving Credit Agreement. ProAssurance is required to pay a commitment fee, ranging from 0.15% to 0.30% based on ProAssurance’s credit ratings, on the average unused portion of the credit line during the term of the Revolving Credit Agreement. Borrowings under the Revolving Credit Agreement may be secured or unsecured and accrue interest at a selected base rate, adjusted by a margin, which can vary from 0% to 1.88%, based on ProAssurance’s credit ratings and whether the borrowing is secured or unsecured. The base rate selected may either be the current one-, three- or six-month LIBOR, with the LIBOR term selected fixing the interest period for which the rate is effective. If no selection is made, the base rate defaults to the highest of (1) the Prime rate, (2) the Federal Funds rate plus 0.5% or (3) the one-month LIBOR plus 1.0%, determined daily. Rates are reset each successive interest period until the borrowing is repaid. The Revolving Credit Agreement contains customary representations, covenants and events constituting default, and remedies for default. Additionally, the Revolving Credit Agreement carries the following financial covenants: (1) In April 2021, ProAssurance amended and restated its Revolving Credit Agreement to allow for additional indebtedness of a subsidiary in preparation of the close of the NORCAL acquisition. ProAssurance is not permitted to have a leverage ratio of consolidated funded indebtedness (principally, obligations for borrowed money, obligations evidenced by instruments such as notes or acceptances, standby and commercial letters of credit, and contingent obligations) to consolidated total capitalization (principally, total non-trade liabilities on a consolidated basis plus consolidated shareholders’ equity, exclusive of AOCI) greater than 0.35 to 1.0, determined at the end of each fiscal quarter. (2) ProAssurance is required to maintain a minimum net worth, excluding AOCI, of at least $1.0 billion. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity At December 31, 2022 and 2021, ProAssurance had 100 million shares of authorized common stock and 50 million shares of authorized preferred stock. The Board has the authority to determine provisions for the issuance of preferred shares, including the number of shares to be issued, the designations, powers, preferences and rights, and the qualifications, limitations or restrictions of such shares. The following is a summary of changes in common shares issued and outstanding during the years ended December 31, 2022, 2021 and 2020: (In thousands) 2022 2021 2020 Issued and outstanding shares - January 1 53,984 53,893 53,792 Repurchase of shares, at cost of $3.3 million for 2022 (139) — — Shares issued due to vesting of share-based compensation awards 66 46 54 Other shares issued for compensation * 53 45 47 Issued and outstanding shares - December 31 53,964 53,984 53,893 * Shares issued were valued at fair value (the market price of a ProAssurance common share on the date of issue). As of December 31, 2022, approximately 1.0 million of ProAssurance's authorized common shares were reserved by the Board for award or issuance under the incentive compensation plans described in Note 13 and an additional 0.9 million of authorized common shares were reserved for the issuance of currently outstanding restricted share and performance share unit awards. ProAssurance declared cash dividends during 2022, 2021 and 2020 as follows: Cash Dividends Declared, per Share 2022 2021 2020 First Quarter $ 0.05 $ 0.05 $ 0.31 Second Quarter $ 0.05 $ 0.05 $ 0.05 Third Quarter $ 0.05 $ 0.05 $ 0.05 Fourth Quarter $ 0.05 $ 0.05 $ 0.05 Quarterly dividends were paid in the month following the quarter in which they were declared. Dividends declared during 2022 and 2021 each totaled $10.8 million and 2020 totaled $24.8 million. ProAssurance's ability to pay dividends to its shareholders is limited by its holding company structure, to the extent of the net assets held by its insurance subsidiaries, as discussed in Note 18. Otherwise, there are no other regulatory restrictions on ProAssurance's retained earnings or net income that materially impact its ability to pay dividends. Based on shareholders' equity at December 31, 2022, total equity of $395.2 million was free of debt covenant restrictions regarding the payment of dividends. However, any decision to pay future cash dividends is subject to the Board’s final determination after a comprehensive review of financial performance, future expectations and other factors deemed relevant by the Board. As of December 31, 2022, Board authorizations for the repurchase of common shares or the retirement of outstanding debt of $106.4 million remained available for use. The timing and quantity of purchases depends upon market conditions and changes in ProAssurance's capital requirements and is subject to limitations that may be imposed on such purchases by applicable securities laws and regulations as well as the rules of the NYSE. Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) The following tables provide a detailed breakout of the components of AOCI and the amounts reclassified from AOCI to net income (loss). The tax effects of all amounts in the tables below, except for an immaterial amount of unrealized gains and losses on available-for-sale securities held at the Company's U.K. subsidiary, were computed using the enacted U.S. federal corporate tax rate of 21%. OCI included a deferred tax benefit of $85.2 million and $15.0 million for the years ended December 31, 2022 and 2021, respectively, and deferred tax expense of $9.6 million for the year ended December 31, 2020. The changes in the balance of each component of AOCI for the years ended December 31, 2022, 2021 and 2020 were as follows: (In thousands) Unrealized Investment Gains (Losses) Non-credit Impairments Unrecognized Change in Defined Benefit Plan Liabilities (1) Accumulated Other Comprehensive Income (Loss) Balance, December 31, 2021 $ 14,929 $ — $ 1,355 $ 16,284 OCI, before reclassifications, net of tax (314,822) (342) (2,746) (317,910) Amounts reclassified from AOCI, net of tax 2,751 331 (63) 3,019 Net OCI, current period (312,071) (11) (2,809) (314,891) Balance, December 31, 2022 $ (297,142) $ (11) $ (1,454) $ (298,607) (In thousands) Unrealized Investment Gains (Losses) Non-credit Impairments Unrecognized Change in Defined Benefit Plan Liabilities (1)(2) Accumulated Other Comprehensive Income (Loss) Balance, December 31, 2020 $ 75,388 $ (57) $ (104) $ 75,227 OCI, before reclassifications, net of tax (50,242) — 1,406 (48,836) Amounts reclassified from AOCI, net of tax (10,217) 57 53 (10,107) Net OCI, current period (60,459) 57 1,459 (58,943) Balance, December 31, 2021 $ 14,929 $ — $ 1,355 $ 16,284 (In thousands) Unrealized Investment Gains (Losses) Non-credit Impairments Unrecognized Change in Defined Benefit Plan Liabilities (2) Accumulated Other Comprehensive Income (Loss) Balance, December 31, 2019 $ 37,333 $ (300) $ (78) $ 36,955 OCI, before reclassifications, net of tax 46,383 (187) (26) 46,170 Amounts reclassified from AOCI, net of tax (8,328) 430 — (7,898) Net OCI, current period 38,055 243 (26) 38,272 Balance, December 31, 2020 $ 75,388 $ (57) $ (104) $ 75,227 (1) As a result of the NORCAL acquisition, the Company sponsors another frozen defined benefit plan and recorded a nominal net actuarial gain, net of tax, included in AOCI as of December 31, 2022 as compared to a net actuarial gain of $0.2 million, net of tax, included in AOCI as of December 31, 2021. (2) The Company terminated Eastern's defined benefit plan, effective September 30, 2021, resulting in a settlement of the liabilities under the plan and the net loss previously reflected in AOCI being recognized in earnings for the year ended December 31, 2021. For the year ended December 31, 2020, the unrecognized change in defined benefit plan liabilities represents the reestimation of the defined benefit plan liability assumed in the Eastern acquisition. The defined benefit plan was frozen as to the earnings of additional benefits and the benefit plan liability was reestimated annually. |
Share-Based Payments
Share-Based Payments | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Payments | Share-Based Payments Share-based compensation costs are primarily classified as a component of operating expense. During 2022, 2021 and 2020, ProAssurance provided share-based compensation to employees utilizing two types of awards: restricted share units and performance share units. The restricted share and performance share awards were made under either the ProAssurance Corporation Amended and Restated 2014 Equity Incentive Plan or the ProAssurance Corporation 2008 Equity Incentive Plan. The Compensation Committee of the Board is responsible for the administration of both plans. The following table provides a summary of compensation expense and the total related tax benefit recognized during each period as well as estimated compensation cost that will be charged to expense in future periods. Share-Based Unrecognized Compensation Cost Year Ended December 31 December 31, 2022 ($ in millions, except remaining recognition period) 2022 2021 2020 Amount Weighted Average Remaining Total share-based compensation expense $ 4.8 $ 4.4 $ 3.8 $ 6.5 1.7 Tax benefit recognized $ 1.0 $ 0.9 $ 0.8 The majority of awards are equity classified awards and are charged to expense as an increase to additional paid-in capital over the service period (generally the vesting period) associated with the award. However, a nominal amount of awards are liability classified awards and are recorded as a liability as they are structured to be settled in cash. As of December 31, 2022, the majority of share-based compensation expense related to restricted share units. Restricted share and performance share units vest in their entirety generally at the end of a three-year period, except for certain restricted share units granted in 2019 which will vest at the end of a five-year period, following the grant date based on a continuous service requirement and, for performance share units, achievement of a performance objective. Partial vesting is permitted for retirees. For the restricted share and purchase match units, a single share of ProAssurance common stock is issued per vested unit. For performance share units, the number of shares of ProAssurance common stock issued per vested unit varies based on performance goals achieved. For equity classified awards, units sufficient to satisfy required tax withholdings are paid in cash rather than in shares of ProAssurance common stock. Liability classified awards, which are nominal in amount, are settled in cash at the end of the vesting period. Restricted Share Units Activity for restricted share units during 2022, 2021 and 2020 is summarized below. Grant date fair values are based on the market value of a share of ProAssurance common stock on the date of grant less the estimated net present value of expected dividends during the vesting period. 2022 2021 2020 Units Weighted Units Weighted Units Weighted Beginning non-vested balance 387,182 $ 30.78 339,804 $ 36.09 320,625 $ 43.99 Granted 195,941 $ 24.19 131,521 $ 24.16 111,758 $ 29.18 Forfeited (12,238) $ 25.13 (11,131) $ 35.49 (9,054) $ 40.13 Vested and released (105,682) $ 39.36 (73,012) $ 44.45 (83,525) $ 56.74 Ending non-vested balance 465,203 $ 26.21 387,182 $ 30.78 339,804 $ 36.09 The aggregate grant date fair value of restricted share units vested and released in 2022, 2021 and 2020 totaled $4.2 million, $3.2 million and $4.7 million, respectively. The aggregate intrinsic value of restricted share units vested and released in 2022, 2021 and 2020 (including units paid in cash to cover tax withholdings) totaled $2.6 million, $1.8 million and $2.6 million, respectively. Performance Share Units Performance share units vest only if minimum performance objectives are met, and the number of units earned varies from 50% to 200% of a base award depending upon the degree to which stated performance objectives are achieved. Performance share unit activity for 2022, 2021 and 2020 is summarized below. The table reflects the base number of units; actual awards that vest depend upon the extent to which performance objectives are achieved. Grant date fair values are based on the market value of a share of ProAssurance common stock on the date of grant less the estimated net present value of expected dividends during the vesting period. 2022 2021 2020 Base Units Weighted Base Units Weighted Base Units Weighted Beginning non-vested balance 137,781 $ 28.43 90,979 $ 36.87 100,370 $ 50.10 Granted 109,542 $ 24.19 74,004 $ 24.04 38,609 $ 29.18 Forfeited — $ — — $ — — $ — Expired* (25,168) $ 40.18 (27,202) $ 44.73 (48,000) $ 58.35 Ending non-vested balance 222,155 $ 25.01 137,781 $ 28.43 90,979 $ 36.87 *Represents performance share units that did not vest as minimum performance objectives were not achieved. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2022 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Variable Interest Entities ProAssurance holds passive interests in a number of entities that are considered to be VIEs under GAAP guidance. ProAssurance's VIE interests principally consist of interests in LPs/LLCs formed for the purpose of achieving diversified equity and debt returns. ProAssurance's VIE interests, carried as a part of investment in unconsolidated subsidiaries, totaled $277.5 million at December 31, 2022 and $303.7 million at December 31, 2021. ProAssurance does not have power over the activities that most significantly impact the economic performance of these VIEs and thus is not the primary beneficiary. Investments in entities where ProAssurance holds a greater than minor interest but does not hold a controlling interest are accounted for using the equity method. Therefore, ProAssurance has not consolidated these VIEs. ProAssurance’s involvement with each of these VIEs is limited to its direct ownership interest in the VIE. Except for the funding commitments disclosed in Note 9, ProAssurance has no arrangements with any of these VIEs to provide other financial support to or on behalf of the VIE. At December 31, 2022, ProAssurance’s maximum loss exposure relative to these investments was limited to the carrying value of ProAssurance’s investment in the VIE. As a result of the Company's acquisition of NORCAL (see Note 2), ProAssurance is the primary beneficiary of PPM RRG. While there is no direct ownership of PPM RRG by ProAssurance, it manages the business operations of PPM RRG through its management services agreement and has effective control of the PPM RRG's Board of Directors through an irrevocable voting proxy. The management services agreement allows ProAssurance to provide management and oversight services to the RRG, which includes the ability to make business decisions impacting the operations of PPM RRG. PPM RRG has a $5 million surplus note to NORCAL which is its only source of capital. ProAssurance has consolidated the account balances and transactions of PPM RRG beginning on the NORCAL acquisition date of May 5, 2021. At December 31, 2022 and December 31, 2021, approximately $154 million and $140 million of ProAssurance's assets, respectively, and approximately $154 million and $140 million of its liabilities, respectively, included on the Consolidated Balance Sheet were related to PPM RRG. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Diluted weighted average shares is calculated as basic weighted average shares plus the effect, calculated using the treasury stock method, of assuming that restricted share units and performance share units have vested. The following table provides a reconciliation between the Company's basic weighted average number of common shares outstanding to its diluted weighted average number of common shares outstanding: (In thousands, except per share data) Year Ended December 31 2022 2021 2020 Weighted average number of common shares outstanding, basic 54,008 53,962 53,863 Dilutive effect of securities: Restricted Share Units 115 92 42 Performance Share Units 17 4 1 Weighted average number of common shares outstanding, diluted 54,140 54,058 53,906 Effect of dilutive shares on earnings (loss) per share $ — $ — $ — The diluted weighted average number of common shares outstanding for the years ended December 31, 2022, 2021 and 2020 excludes approximately 2,000, 28,000 and 114,000, respectively, of common share equivalents issuable under the Company's stock compensation plans, as their effect would have been antidilutive. Dilutive common share equivalents are reflected in the earnings (loss) per share calculation while antidilutive common share equivalents are not reflected in the earnings (loss) per share calculation. For the years ended December 31, 2022 and 2020, all incremental common share equivalents were not included in the computation of diluted earnings (loss) per share because to do so would have been antidilutive for each period. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information ProAssurance's segments are based on the Company's internal management reporting structure for which financial results are regularly evaluated by the Company's CODM to determine resource allocation and assess operating performance. The Company continually assesses its internal management reporting structure and information evaluated by its CODM to determine whether any changes have occurred that would impact its segment reporting structure. The Company operates in five segments that are organized around the nature of the products and services provided: Specialty P&C, Workers' Compensation Insurance, Segregated Portfolio Cell Reinsurance, Lloyd's Syndicates and Corporate. A description of each of ProAssurance's five operating and reportable segments follows. Specialty P&C includes professional liability insurance and medical technology liability insurance. Professional liability insurance is primarily comprised of medical professional liability products offered to healthcare providers and institutions. The Specialty P&C segment's professional liability insurance also includes the business acquired through the NORCAL transaction that closed on May 5, 2021. The Company also offers, to a lesser extent, professional liability insurance to attorneys and their firms. Medical technology liability insurance is offered to medical technology and life sciences companies that manufacture or distribute products including entities conducting human clinical trials. In addition, the Company also offers custom alternative risk solutions including assumed reinsurance, loss portfolio transfers and captive cell programs for healthcare professional liability insureds. For the alternative market captive cell programs, the Specialty P&C segment cedes either all or a portion of the premium to certain SPCs in the Company's Segregated Portfolio Cell Reinsurance segment. Workers' Compensation Insurance includes workers' compensation insurance products which are provided primarily to employers with 1,000 or fewer employees. The segment's products include guaranteed cost policies, policyholder dividend policies, retrospectively-rated policies, deductible policies and alternative market solutions. Alternative market program premiums include program design, fronting, claims administration, risk management, SPC rental, asset management and SPC management services. Alternative market program premiums are 100% ceded to either SPCs in the Company's Segregated Portfolio Cell Reinsurance segment or captive insurers unaffiliated with ProAssurance for two programs. Segregated Portfolio Cell Reinsurance includes the results (underwriting profit or loss, plus investment results, net of U.S. federal income taxes) of SPCs at Inova Re and Eastern Re, the Company's Cayman Islands SPC operations. Each SPC is owned, fully or in part, by an individual company, agency, group or association, and the results of the SPCs are attributable to the participants of that cell. ProAssurance participates to a varying degree in the results of selected SPCs. SPC results attributable to external cell participants are reported as an SPC dividend expense (income) in the Segregated Portfolio Cell Reinsurance segment and in ProAssurance's Consolidated Statements of Income and Comprehensive Income. In addition, the Segregated Portfolio Cell Reinsurance segment includes the investment results of the SPCs as the investments are solely for the benefit of the cell participants, and investment results attributable to external cell participants are reflected in SPC dividend expense (income). The SPCs assume workers' compensation insurance, healthcare professional liability insurance or a combination of the two from the Company's Workers' Compensation Insurance and Specialty P&C segments. Lloyd's Syndicates includes the results from ProAssurance's participation in Lloyd's of London Syndicate 1729 and Syndicate 6131. The results of this segment are normally reported on a quarter lag, except when information is available that is material to the current period. Furthermore, investment results associated with the majority of investment assets solely allocated to Lloyd's Syndicate operations and certain U.S. paid administrative expenses are reported concurrently as that information is available on an earlier time frame. Syndicate 1729 underwrites risks over a wide range of property and casualty insurance and reinsurance lines in both the U.S. and international markets. ProAssurance's participation in the results of Syndicate 1729 for the 2022 underwriting year was unchanged from the 2021 underwriting year at 5%. Effective January 1, 2022, Syndicate 6131 ceased underwriting on a quota share basis with Syndicate 1729 as Syndicate 6131's business is retained within Syndicate 1729 beginning with the 2022 year of account. Due to the quarter lag, the Company's ceased participation in Syndicates 6131 was not reflected in the Company's results until the second quarter of 2022. Corporate includes ProAssurance's investment operations excluding those reported in the Company's Segregated Portfolio Cell Reinsurance and Lloyd's Syndicates segments. In addition, this segment includes corporate expenses, interest expense, U.S. income taxes and non-premium revenues generated outside of the Company's insurance entities. The accounting policies of the segments are described in Note 1. ProAssurance evaluates the performance of its Specialty P&C and Workers' Compensation Insurance segments based on before tax underwriting profit or loss. ProAssurance evaluates the performance of its Segregated Portfolio Cell Reinsurance segment based on operating profit or loss, which includes investment results of investment assets solely allocated to SPC operations, net of U.S. federal income taxes. Performance of the Lloyd's Syndicates segment is evaluated based on operating profit or loss, which includes investment results of investment assets solely allocated to Lloyd's Syndicate operations, net of U.K. income tax expense. Performance of the Corporate segment is evaluated based on the contribution made to consolidated after-tax results. ProAssurance accounts for inter-segment transactions as if the transactions were to third parties at current market prices. Assets are not allocated to segments because investments, other than the investments discussed above that are solely allocated to the Segregated Portfolio Cell Reinsurance and Lloyd's Syndicates segments, and other assets are not managed at the segment level. The tabular information that follows shows the financial results of the Company's reportable segments reconciled to results reflected in the Consolidated Statements of Income and Comprehensive Income. ProAssurance does not consider goodwill or intangible asset impairments, a gain on bargain purchase, changes in the fair value of contingent consideration or transaction-related costs for completed business combinations, including any related tax impacts, in assessing the financial performance of its operating and reportable segments, and thus are included in the reconciliation of segment results to consolidated results. Financial results by segment were as follows: Year Ended December 31, 2022 (In thousands) Specialty P&C Workers' Compensation Insurance Segregated Portfolio Cell Reinsurance Lloyd's Syndicates Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 769,773 $ 166,371 $ 69,810 $ 23,627 $ — $ — $ 1,029,581 Net investment income — — 1,029 568 94,375 — 95,972 Equity in earnings (loss) of unconsolidated subsidiaries — — — — 4,888 — 4,888 Net investment gains (losses) — — (3,067) (964) (38,126) — (42,157) Other income (expense) (1) 5,003 2,201 2 119 6,198 (4,119) 9,404 Net losses and loss adjustment expenses (2) (609,915) (111,407) (39,310) (16,130) — — (776,762) Underwriting, policy acquisition and operating expenses (1)(2) (192,397) (54,737) (20,316) (7,412) (34,733) 4,119 (305,476) SPC U.S. federal income tax expense (3) — — (1,759) — — — (1,759) SPC dividend (expense) income — — (6,673) — — — (6,673) Interest expense — — — — (20,372) — (20,372) Income tax benefit (expense) — — — — 5,423 — 5,423 Segment results $ (27,536) $ 2,428 $ (284) $ (192) $ 17,653 $ — $ (7,931) Reconciliation of segments to consolidated results: Contingent consideration (4) 9,000 Transaction-related costs, net (5) (1,471) Net income (loss) $ (402) Significant non-cash items: Contingent consideration $ 9,000 Depreciation and amortization, net of accretion $ 10,473 $ 3,491 $ 1,186 $ 41 $ 22,872 $ — $ 38,063 Year Ended December 31, 2021 (In thousands) Specialty P&C Workers' Compensation Insurance Segregated Portfolio Cell Reinsurance Lloyd's Syndicates Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 695,008 $ 164,600 $ 63,688 $ 48,372 $ — $ — $ 971,668 Net investment income — — 814 1,961 67,747 — 70,522 Equity in earnings (loss) of unconsolidated subsidiaries — — — — 48,974 — 48,974 Net investment gains (losses) — — 4,080 249 19,981 — 24,310 Other income (expense) (1) 3,370 2,211 3 912 5,531 (3,091) 8,936 Net losses and loss adjustment expenses (575,164) (114,704) (32,569) (29,812) — — (752,249) Underwriting, policy acquisition and operating expenses (1) (127,709) (52,418) (21,635) (17,957) (26,641) 3,091 (243,269) SPC U.S. federal income tax expense (3) — — (1,947) — — — (1,947) SPC dividend (expense) income — — (10,050) — — — (10,050) Interest expense — — — — (19,719) — (19,719) Income tax benefit (expense) — — — — (4,651) — (4,651) Segment results $ (4,495) $ (311) $ 2,384 $ 3,725 $ 91,222 $ — $ 92,525 Reconciliation of segments to consolidated results: Gain on bargain purchase 74,408 Transaction-related costs (5) (22,809) Net income (loss) $ 144,124 Significant non-cash items: Gain on bargain purchase $ 74,408 Depreciation and amortization, net of accretion $ 9,915 $ 3,583 $ 1,475 $ 66 $ 22,208 $ — $ 37,247 Year Ended December 31, 2020 (In thousands) Specialty P&C Workers' Compensation Insurance Segregated Portfolio Cell Reinsurance Lloyd's Syndicates Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 477,365 $ 171,772 $ 66,352 $ 77,226 $ — $ — $ 792,715 Net investment income — — 1,084 4,128 66,786 — 71,998 Equity in earnings (loss) of unconsolidated subsidiaries — — — — (11,921) — (11,921) Net investment gains (losses) — — 3,085 988 11,605 — 15,678 Other income (expense) (1) 3,908 2,216 205 51 2,531 (2,441) 6,470 Net losses and loss adjustment expenses (470,074) (111,552) (29,605) (50,216) — — (661,447) Underwriting, policy acquisition and operating expenses (1) (109,599) (56,449) (20,709) (30,136) (23,429) 2,441 (237,881) SPC U.S. federal income tax expense (3) — — (1,746) — — — (1,746) SPC dividend (expense) income — — (14,304) — — — (14,304) Interest expense — — — — (15,503) — (15,503) Income tax benefit (expense) — — — 29 41,300 — 41,329 Segment results $ (98,400) $ 5,987 $ 4,362 $ 2,070 $ 71,369 $ — (14,612) Reconciliation of segments to consolidated results: Goodwill impairment (161,115) Net income (loss) $ (175,727) Significant non-cash items: Goodwill impairment $ 161,115 Depreciation and amortization, net of accretion $ 7,747 $ 3,690 $ 676 $ (4) $ 9,266 $ — $ 21,375 (1) Includes certain fees for services provided by the Workers' Compensation Insurance segment to the SPCs at Inova Re and Eastern Re which are recorded as expenses within the Segregated Portfolio Cell Reinsurance segment and as other income within the Workers' Compensation Insurance segment. These fees are primarily SPC rental fees and are eliminated between segments in consolidation. (2) Beginning in 2022, ProAssurance revised its process for estimating ULAE as a result of substantially integrating NORCAL into the Specialty P&C segment operations. The change in the Company's estimate of ULAE increased underwriting, policy acquisition and operating expenses with an offsetting decrease to net losses and loss adjustment expenses in the Specialty P&C segment; there was no impact on segment results for the year ended December 31, 2022. See further discussion on this change in estimate in Note 1. (3) Represents the provision for U.S. federal income taxes for SPCs at Inova Re, which have elected to be taxed as a U.S. corporation under Section 953(d) of the Internal Revenue Code. U.S. federal income taxes are included in the total SPC net results and are paid by the individual SPCs. (4) Represents the change in the fair value of contingent consideration issued in connection with the NORCAL acquisition included as a component of consolidated net investment gains (losses) on the Consolidated Statements of Income and Comprehensive Income. (5) Represents the transaction-related costs, after-tax, associated with the acquisition of NORCAL. For the years ended December 31, 2022 and 2021, pre-tax transaction-related costs of $1.9 million and $25.0 million, respectively, were included as a component of consolidated operating expense and the associated income tax benefit of $0.4 million and $2.2 million for the years ended December 31, 2022 and 2021, respectively, was included as a component of consolidated income tax benefit (expense) on the Consolidated Statements of Income and Comprehensive Income. The following table provides detailed information regarding ProAssurance's gross premiums earned by product as well as a reconciliation to net premiums earned. All gross premiums earned are from external customers except as noted. ProAssurance's insured risks are primarily within the U.S. Year Ended December 31 (In thousands) 2022 2021 2020 Specialty P&C Segment Gross premiums earned: HCPL $ 684,514 $ 616,614 $ 411,716 Small Business Unit 107,382 105,605 104,376 Medical Technology Liability 41,323 38,508 34,909 Other 1,281 684 821 Ceded premiums earned (64,727) (66,403) (74,457) Segment net premiums earned 769,773 695,008 477,365 Workers' Compensation Insurance Segment Gross premiums earned: Traditional business 179,558 175,459 184,204 Alternative market business 72,894 68,206 71,280 Ceded premiums earned (86,081) (79,065) (83,712) Segment net premiums earned 166,371 164,600 171,772 Segregated Portfolio Cell Reinsurance Segment Gross premiums earned: Workers' compensation (1) 68,548 65,023 68,518 HCPL (2) 10,799 7,336 6,594 Ceded premiums earned (9,537) (8,671) (8,760) Segment net premiums earned 69,810 63,688 66,352 Lloyd's Syndicates Segment Gross premiums earned: Property and casualty 27,486 60,590 98,990 Ceded premiums earned (3,859) (12,218) (21,764) Segment net premiums earned 23,627 48,372 77,226 Consolidated net premiums earned $ 1,029,581 $ 971,668 $ 792,715 (1) Premium for all periods is assumed from the Workers' Compensation Insurance segment. (2) Premium for all periods is assumed from the Specialty P&C segment. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Benefit Plans | Benefit Plans ProAssurance maintains the ProAssurance Savings Plan that provides a vehicle for eligible employees to build retirement income. For the years ended December 31, 2022 and 2021 as well as for the second half of 2020, ProAssurance provided employer contributions to the plan of up to 5% of eligible contributions for qualified employees. For the first half of 2020, ProAssurance provided employer contributions to the plan of up to 10% of eligible contributions for qualified employees. ProAssurance also maintained a similar plan as a result of its acquisition of NORCAL on May 5, 2021 (see Note 2 for additional information), which was merged into the ProAssurance Savings Plan effective January 1, 2022. ProAssurance incurred expenses related to these savings plans of $4.3 million, $4.1 million and $5.5 million during the years ended December 31, 2022, 2021 and 2020, respectively. ProAssurance also maintains the ProAssurance Plan that allows eligible management employees to defer a portion of their current salary. ProAssurance incurred nominal expense related to the ProAssurance Plan in each of the years ended December 31, 2022, 2021 and 2020. ProAssurance's deferred compensation liabilities totaled $27.9 million and $52.3 million at December 31, 2022 and 2021, respectively. The Company's deferred compensation liabilities at December 31, 2021 included the NORCAL Non-Qualified Deferred Compensation Plan, which was terminated during the first quarter of 2022 (see Note 3 for additional information); the Company incurred nominal expense related to this plan for the year ended December 31, 2021. The liabilities included amounts due under the ProAssurance Plan and amounts due under individual agreements with current or former employees. Pension ProAssurance assumed a frozen defined benefit pension plan on May 5, 2021 as a result of its acquisition of NORCAL, which covers substantially all NORCAL employees (except those that were previous employees of Medicus Insurance Company and FD Insurance Company, employees of PPM RRG as well as new hires after December 31, 2013). Benefits are based on years of service and the employee’s average of the highest five years of annual compensation. Annual contributions to the defined benefit pension plan are above the minimum funding standards outlined in the Employee Retirement Income Security Act of 1974, as amended. ProAssurance makes contributions to the defined benefit pension plan with the goal of ensuring that it is adequately funded to meet its future obligations. ProAssurance did not make any contributions to NORCAL's defined benefit pension plan during the year ended December 31, 2022 and does not anticipate making any contributions in 2023. The defined benefit pension plan no longer has future service accruals or compensation increases because this plan was frozen effective December 31, 2015. The PBO for pension benefits represents the present value of benefits earned as of December 31 for vested and non-vested employees. The following table provides a reconciliation of the changes in the PBO and fair value of plan assets for the years ended December 31, 2022 and 2021: Year Ended December 31 (In thousands) 2022 2021 Change in benefit obligation: PBO at beginning of period $ 106,899 $ — Acquired PBO from NORCAL acquisition — 107,895 Interest cost 2,885 2,030 Actuarial (gain) loss (1) (25,735) 2,872 Benefits paid (3,251) (1,149) Settlement payments (6,568) (4,749) PBO at December 31 $ 74,230 $ 106,899 Change in fair value of plan assets: Fair value of plan assets beginning of period $ 110,444 $ — Fair value of plan assets acquired from NORCAL — 109,443 Actual return on plan assets (25,198) 6,899 Benefits paid (3,251) (1,149) Settlement payments (6,568) (4,749) Fair value of plan assets at December 31 $ 75,427 $ 110,444 Funded (underfunded) status of the plan $ 1,197 $ 3,545 Amount recognized in Consolidated Balance Sheets at December 31 (2) $ 1,197 $ 3,545 Net actuarial (gain) loss recognized in AOCI and not yet reflected in net periodic benefit cost (income) $ 1,845 $ (1,468) (1) The actuarial gain experienced in 2022 was largely driven by the increase in the discount rate from the prior year that was used to determine the projected benefit obligation at December 31, 2022. (2) The funded balance is included as a component of other assets on the Consolidated Balance Sheets for the years ended December 31, 2022 and 2021. As of December 31, 2022 and 2021, the pension plan was remeasured to reflect settlement accounting primarily due to lump sum payments elected by covered employees that were terminated. The components of the net periodic benefit cost (income) for the years ended December 31, 2022 and 2021 were as follows: (In thousands) Year Ended December 31 2022 2021 Components of net periodic benefit cost (income): Interest cost $ 2,885 $ 2,030 Expected return on plan assets (4,013) (2,494) Gain on settlement 163 (65) Total net periodic benefit cost (income)* (965) (529) Other changes recognized in OCI: Net actuarial (gain) loss 3,476 (1,533) Reclassification of gain on settlement (163) 65 (Gain) loss recognized in OCI 3,313 (1,468) Total recognized in net periodic benefit cost (income) and OCI $ 2,348 $ (1,997) *Net periodic benefit cost (income) is included as a component of operating expense on the Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2022 and 2021. The components of the change in amounts not yet recognized as components of the net periodic benefit cost (income) were as follows: Year Ended December 31 (In thousands) 2022 2021 Items not yet recognized as a component of net periodic benefit cost (income) at beginning of period $ (1,468) $ — Net actuarial (gain) loss 3,476 (1,533) Reclassification of gain (loss) on settlement (163) 65 Items not yet recognized as a component of net periodic benefit cost (income) at December 31 $ 1,845 $ (1,468) Amounts recognized in AOCI $ 1,845 $ (1,468) The weighted average discount rate used to determine the projected benefit obligation of the defined benefit pension plan for the years ended December 31, 2022 and 2021 were as follows: December 31, 2022 December 31, 2021 Weighted average discount rate 5.13 % 2.78 % The weighted average discount rate and the weighted average expected return on plan assets used to determine net periodic benefit cost (income) for the years ended December 31, 2022 and 2021 were as follows: December 31, 2022 December 31, 2021 Weighted average discount rate 2.78 % 2.95 % Weighted average expected return on plan assets 4.00 % 3.75 % The long-term rate of return is based on the anticipated returns that will be earned by the portfolio over the long term. The weighted average expected return on plan assets is influenced, but not determined, by historical portfolio performance. ProAssurance has engaged a certified investment adviser to manage the defined benefit pension plan’s assets. The investment strategy is to build an efficient, well diversified portfolio based on a long-term strategic outlook of the investment markets. The investment markets outlook utilizes both historically based and forward-looking return forecasts to establish future return expectations for various asset classes. These return expectations are used to develop a core asset allocation based on the specific needs of the pension plan. The core asset allocation utilizes investment portfolios of various asset classes and multiple investment managers to help maximize the defined benefit pension plan’s return, while providing multiple layers of diversification to help minimize risk. The defined benefit pension plan’s target allocations, by asset category as of December 31, 2022 and 2021, were as follows: December 31, 2022 December 31, 2021 Fixed maturities 90 % 79 % Equity investments 10 % 18 % Real estate — % 3 % 100 % 100 % The pension plan's assets consist of investments in pooled separate accounts that invest in mutual funds, equity investments, debt securities or real estate investments. The fair values of the assets in the defined benefit pension plan, by asset category as of December 31, 2022 and 2021, were as follows: December 31, 2022 (In thousands) Level 1 Level 2 Level 3 Total* Pooled separate account investments: Large cap equity investments (1) $ 5,341 $ — $ — $ 5,341 International equity investments (2) — 2,410 — 2,410 Corporate and government debt (3) 67,676 — — 67,676 Total $ 73,017 $ 2,410 $ — $ 75,427 December 31, 2021 (In thousands) Level 1 Level 2 Level 3 Total* Pooled separate account investments: Large cap equity investments (1) $ 13,703 $ — $ — $ 13,703 Mid cap equity investments (1) 586 — — 586 Small cap equity investments (1) 229 — — 229 International equity investments (2) — 5,581 — 5,581 Corporate and government debt (3) — 86,728 — 86,728 Real estate (4) — — 3,617 3,617 Total $ 14,518 $ 92,309 $ 3,617 $ 110,444 *For some assets, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When this is the case, the asset is categorized based on the level of the most significant input to the fair value measurement. Assessments of the significance of a particular input to the fair value measurement require judgement and consideration of factors specific to the assets being valued. Management has determined that the NAV of the pooled separate accounts represents fair value because the NAV is published and available to current investors and is the basis for current transactions. Consequently, the pooled separate accounts are classified in the fair value hierarchy discussed in Note 3 based upon the ending NAV. The fair values of the underlying investments used to determine the NAV of the pooled separate accounts are primarily publicly quoted prices or quoted prices for similar assets in active or non-active markets, however other inputs may also be used as described below. Below is a description of the inputs and valuation methodologies used to determine the fair value of the Company's defined benefit pension plan assets: (1) The portfolios invest primarily in publicly traded equity securities of large, mid-sized and small U.S. companies that are priced using the closing price of the applicable U.S. nationally recognized stock exchange. (2) The portfolios invest primarily in publicly traded equity securities of non-U.S. companies that are priced using the closing price of the applicable foreign stock exchange, which may require certain liquidity adjustments for non-active markets. (3) The portfolios invest in various fixed income securities, primarily of U.S. origin. These include, but are not limited to corporate bonds and U.S. Treasury obligations. In 2021, the majority of underlying securities were priced by industry standards vendors, using inputs such as benchmark yields, reported trades, broker/dealer quotes or issuer spreads. In 2022, the majority of underlying securities were priced using the closing price of the applicable U.S. nationally recognized exchanges. (4) The portfolios invest primarily in commercial real estate and includes mortgage loans which are collateralized by the associated properties. Real estate values are determined based upon annual appraisals with daily updates that are based on changes in factors such as occupancy levels, lease rates, overall market conditions and capital changes, among others. The following tables present summary information regarding changes in the fair value of the defined benefit pension plan assets measured using Level 3 inputs: Level 3 Fair Value Measurements (In thousands) Real Estate Total Balance, January 1, 2022 $ 3,617 $ 3,617 Actual return on plan assets: Relating to assets still held at the reporting date: Investment return 6 6 Transfers out (3,623) (3,623) Balance, December 31, 2022 $ — $ — Level 3 Fair Value Measurements (In thousands) Real Estate Total Balance, January 1, 2021 $ — $ — Acquired balance, May 5, 2021 3,383 3,383 Actual return on plan assets: Relating to assets still held at the reporting date: Investment return 613 613 Transfers out (379) (379) Balance, December 31, 2021 $ 3,617 $ 3,617 Based on current data and assumptions as of December 31, 2022, the following benefit payments are expected to be paid in future periods: 2023 $ 5,540 2024 4,420 2025 4,580 2026 5,040 2027 4,910 Thereafter 28,870 Total $ 53,360 |
Statutory Accounting and Divide
Statutory Accounting and Dividend Restrictions | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Statutory Accounting and Dividend Restrictions | Statutory Accounting and Dividend Restrictions ProAssurance’s domestic U.S. insurance subsidiaries are required to file statutory financial statements with state insurance regulatory authorities, prepared based upon SAP prescribed or permitted by regulatory authorities. ProAssurance did not use any prescribed or permitted SAP that differed from the NAIC's SAP at December 31, 2022, 2021 or 2020. The most significant differences between net income (loss) prepared in accordance with GAAP and statutory net income (loss) are generally due to: (a) policy acquisition and certain software and equipment costs which are deferred under GAAP but expensed for statutory purposes, (b) certain deferred income taxes which are recognized under GAAP but are not recognized for statutory purposes, (c) net unrealized gains or losses which are included in shareholders' equity related to available-for-sale fixed maturity securities carried at fair value under GAAP but are principally carried at amortized cost for statutory purposes and (d) accounting for goodwill and intangible assets. The NAIC specifies risk-based capital requirements for property and casualty insurance providers. At December 31, 2022, the Company estimates that actual statutory capital and surplus for each of ProAssurance’s insurance subsidiaries will exceed the minimum regulatory requirements. Statutory net income (loss) and capital and surplus of ProAssurance’s insurance subsidiaries are estimates and could differ from actual results upon completion and filing of statutory financial statements with state insurance regulatory authorities subsequent to filing this report on Form 10-K. Net income (loss) and capital and surplus of ProAssurance’s insurance subsidiaries on a statutory basis are shown in the following table. (In millions) Statutory Net Income (Loss) Statutory Capital and Surplus 2022 2021 2020 2022 2021 $69 $83 $81 $1,392 $1,463 At December 31, 2022, $1.2 billion of ProAssurance's consolidated net assets were held at its domestic insurance subsidiaries, of which approximately $133 million are permitted to be paid as dividends over the course of 2023 without prior approval of state insurance regulators. However, the payment of any dividend requires prior notice to the insurance regulator in the state of domicile and the regulator may prevent the dividend if, in its judgment, payment of the dividend would have an adverse effect on the capital and surplus of the insurance subsidiary. In addition, ProAssurance makes the decision to pay dividends from an insurance subsidiary based on the capital needs of that subsidiary and may pay less than the permitted dividend or may also request permission to pay an additional amount (an extraordinary dividend). |
Schedule I - Summary of Investm
Schedule I - Summary of Investments - Other Than Investments In Related Parties | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Schedule I - Summary of Investments Other than Investments in Related Parties | December 31, 2022 Type of Investment Recorded Fair Amount Which is Fixed maturities Bonds: U.S. Government or government agencies and authorities $ 284,759 $ 260,113 $ 260,113 States, municipalities and political subdivisions 483,584 439,450 439,450 Foreign governments 31,259 29,597 29,597 Public utilities 98,891 90,106 90,106 All other corporate bonds 1,876,190 1,686,524 1,686,524 Asset-backed securities 1,122,777 1,010,116 1,010,116 Total Fixed Maturities 3,897,460 3,515,906 3,515,906 Equity Securities Common Stocks: Public utilities 604 527 527 Banks, trusts and insurance companies 15,813 12,372 12,372 Industrial, miscellaneous and all other 146,012 130,839 130,839 Total Equity Securities, trading 162,429 143,738 143,738 Other long-term investments 451,269 482,726 482,726 Short-term investments 245,515 245,313 245,313 Total Investments $ 4,756,673 $ 4,387,683 $ 4,387,683 |
Schedule II - Condensed Financi
Schedule II - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule II - Condensed Financial Information of Registrant | December 31, December 31, Assets Investment in subsidiaries, at equity $ 1,265,389 $ 1,605,892 Fixed maturities available for sale, at fair value 25,681 — Short-term investments 39,119 43,270 Investment in unconsolidated subsidiaries 915 915 Cash and cash equivalents 6,122 18,115 Due from subsidiaries 3,267 2,166 Other assets 17,161 14,584 Total Assets $ 1,357,654 $ 1,684,942 Liabilities and Shareholders’ Equity Liabilities: Dividends payable $ 2,698 $ 2,698 Other liabilities 1,480 4,771 Debt less debt issuance costs 249,458 249,086 Total Liabilities 253,636 256,555 Shareholders’ Equity: Common stock 634 633 Other shareholders’ equity, including unrealized gains (losses) on securities of subsidiaries 1,103,384 1,427,754 Total Shareholders’ Equity 1,104,018 1,428,387 Total Liabilities and Shareholders’ Equity $ 1,357,654 $ 1,684,942 Year Ended December 31 2022 2021 2020 Revenues Net investment income (loss) $ (663) $ (1,470) $ 331 Net investment gains (losses) — 1,159 2,194 Other income (loss) 1,970 2,359 12 Total revenues 1,307 2,048 2,537 Expenses Interest expense 14,445 14,549 14,260 Other expenses 32,513 29,094 21,458 Total expenses 46,958 43,643 35,718 Income (loss) before income tax expense (benefit) and equity in net income (loss) of consolidated subsidiaries (45,651) (41,595) (33,181) Income tax expense (benefit) (7,994) (9,833) 11,404 Income (loss) before equity in net income (loss) of consolidated subsidiaries (37,657) (31,762) (44,585) Equity in net income (loss) of consolidated subsidiaries 37,255 175,886 (131,142) Net income (loss) (402) 144,124 (175,727) Other comprehensive income (loss) (314,891) (58,943) 38,272 Comprehensive income (loss) $ (315,293) $ 85,181 $ (137,455) Year Ended December 31 2022 2021 2020 Net cash provided (used) by operating activities $ (25,862) $ 2,589 $ (21,450) Investing activities Proceeds from sales or maturities of: Fixed maturities, available for sale 5,800 33,443 87,101 Net decrease (increase) in short-term investments 4,151 71,928 (51,206) Return of invested capital from subsidiaries 8,756 21,464 79,486 Contribution of capital to subsidiaries (58) (214,237) (97,541) Funds (advanced) repaid for Lloyd's FAL deposit 11,131 59,012 32,256 Other 14 (151) (2,206) Net cash provided (used) by investing activities 29,794 (28,541) 47,890 Financing activities Repurchase of common stock (3,252) — — Subsidiary payments for common shares and share-based compensation awarded to subsidiary employees (928) (307) 2,846 Dividends to shareholders (10,768) (10,758) (38,664) Other (977) (337) (1,109) Net cash provided (used) by financing activities (15,925) (11,402) (36,927) Increase (decrease) in cash and cash equivalents (11,993) (37,354) (10,487) Cash and cash equivalents at beginning of period 18,115 55,469 65,956 Cash and cash equivalents at end of period $ 6,122 $ 18,115 $ 55,469 Supplemental disclosure of cash flow information: Cash paid (refunded) during the year for income taxes, net $ (6,081) $ (7,943) $ (9,117) Cash paid during the year for interest $ 14,071 $ 14,176 $ 13,888 Significant non-cash transactions: Dividends declared and not yet paid $ 2,698 $ 2,698 $ 2,694 Securities transferred at fair value as dividends from subsidiaries $ 32,512 $ — $ 34,915 Operating ROU assets obtained in exchange for operating lease liabilities $ 3,133 $ 412 $ — Basis of Presentation The registrant-only financial statements should be read in conjunction with ProAssurance Corporation’s Consolidated Financial Statements and Notes thereto. At December 31, 2022 and 2021, PRA investment in subsidiaries is stated at the initial consolidation value plus equity in the undistributed earnings of subsidiaries since the date of acquisition. ProAssurance Corporation has a management agreement with several of its insurance subsidiaries whereby ProAssurance Corporation charges the subsidiaries a management fee for various management services provided to the subsidiary. Under the arrangement, the expenses associated with such services remain as expenses of ProAssurance Corporation and the management fee charged is reported as an offset to ProAssurance Corporation expenses. |
Schedule III - Supplementary In
Schedule III - Supplementary Insurance Information | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Abstract] | |
Schedule III - Supplementary Insurance Information | 2022 2021 2020 Net premiums earned Specialty P&C $ 769,773 $ 695,008 $ 477,365 Workers' Compensation Insurance 166,371 164,600 171,772 Segregated Portfolio Cell Reinsurance 69,810 63,688 66,352 Lloyd's Syndicates 23,627 48,372 77,226 Consolidated $ 1,029,581 $ 971,668 $ 792,715 Net investment income (1) Segregated Portfolio Cell Reinsurance $ 1,029 $ 814 $ 1,084 Lloyd's Syndicates 568 1,961 4,128 Corporate 94,375 67,747 66,786 Consolidated $ 95,972 $ 70,522 $ 71,998 Losses and loss adjustment expenses incurred related to current year, net of reinsurance Specialty P&C $ 639,734 $ 608,106 $ 497,554 Workers' Compensation Insurance 119,407 121,804 118,523 Segregated Portfolio Cell Reinsurance 45,577 42,721 46,200 Lloyd's Syndicates 8,797 25,101 49,569 Consolidated $ 813,515 $ 797,732 $ 711,846 Losses and loss adjustment expenses incurred related to prior year, net of reinsurance Specialty P&C $ (29,819) $ (32,942) $ (27,480) Workers' Compensation Insurance (8,000) (7,100) (6,971) Segregated Portfolio Cell Reinsurance (6,267) (10,152) (16,595) Lloyd's Syndicates 7,333 4,711 647 Consolidated $ (36,753) $ (45,483) $ (50,399) Paid losses and loss adjustment expenses, net of reinsurance Specialty P&C (2) $ 685,696 $ 538,885 $ 379,656 Workers' Compensation Insurance 123,098 121,302 118,496 Segregated Portfolio Cell Reinsurance 38,007 37,127 46,267 Lloyd's Syndicates 18,939 47,931 40,897 Inter-segment eliminations (37) — (143) Consolidated $ 865,703 $ 745,245 $ 585,173 Amortization of DPAC Specialty P&C $ 91,660 $ 61,662 $ 53,562 Workers' Compensation Insurance 14,836 15,100 15,895 Segregated Portfolio Cell Reinsurance 20,068 18,730 19,636 Lloyd's Syndicate 6,097 14,973 21,597 Inter-segment eliminations 514 140 (125) Consolidated $ 133,175 $ 110,605 $ 110,565 Continued on the following page. 2022 2021 2020 Continued from previous page Other underwriting, policy acquisition and operating expenses Specialty P&C $ 100,737 $ 66,047 $ 56,037 Workers' Compensation Insurance 39,901 37,318 40,554 Segregated Portfolio Cell Reinsurance 248 2,905 1,073 Lloyd's Syndicates 1,315 2,984 8,539 Corporate 34,733 26,641 23,429 Non-segmented items (3) 1,862 24,977 — Inter-segment eliminations (4,633) (3,231) (2,316) Consolidated $ 174,163 $ 157,641 $ 127,316 Net premiums written Specialty P&C $ 765,444 $ 626,147 $ 451,019 Workers' Compensation Insurance 160,760 161,865 164,871 Segregated Portfolio Cell Reinsurance 69,357 63,042 64,159 Lloyd's Syndicates 18,576 31,667 67,652 Consolidated $ 1,014,137 $ 882,721 $ 747,701 Deferred policy acquisition costs (1) $ 58,148 $ 58,940 $ 47,196 Reserve for losses and loss adjustment expenses (1) $ 3,471,147 $ 3,579,940 $ 2,417,179 Unearned premiums (1) $ 422,950 $ 433,961 $ 361,547 (1) Assets are not allocated to segments because investments, other than the investments that are solely allocated to the Segregated Portfolio Cell Reinsurance and Lloyd's Syndicates segments, and other assets are not managed at the segment level. See Note 16 of the Notes to Consolidated Financial Statements for additional information. (2) See Note 8 of the Notes to Consolidated Financial Statements for additional information on paid losses related to reserves acquired from NORCAL. (3) Represents pre-tax transaction-related costs associated with the acquisition of NORCAL that are not included in a segment as ProAssurance does not consider these costs in assessing the financial performance of any of its operating or reportable segments. See Note 16 of the Notes to Consolidated Financial Statements for a reconciliation of the Company's segment results to its consolidated results. |
Schedule IV - Reinsurance
Schedule IV - Reinsurance | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Abstract] | |
Schedule IV - Reinsurance | 2022 2021 2020 Property and Liability * Premiums earned $ 1,058,263 $ 1,020,107 $ 862,742 Premiums ceded (84,857) (93,998) (113,582) Premiums assumed 56,175 45,559 43,555 Net premiums earned $ 1,029,581 $ 971,668 $ 792,715 Percentage of amount assumed to net 5.46% 4.69% 5.49% * All of ProAssurance’s premiums are related to property and liability coverages. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization and Nature of Business | Organization and Nature of Business ProAssurance Corporation (ProAssurance, PRA or the Company), a Delaware corporation, is an insurance holding company primarily for wholly owned specialty property and casualty and workers' compensation insurance entities including an entity that provides capital to Syndicate 1729 at Lloyd's. Risks insured are primarily liability risks located within the U.S. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of ProAssurance Corporation, its wholly owned subsidiaries and VIEs in which ProAssurance is the primary beneficiary. See Note 14 for more information on ProAssurance's VIE interests. Investments in entities where ProAssurance holds a greater than minor interest but does not hold a controlling interest are accounted for using the equity method. All significant intercompany accounts and transactions are eliminated in consolidation. ProAssurance subsidiaries located in the U.K. are normally reported on a quarter lag due to timing issues regarding the availability of information, except when information is available that is material to the current period. Furthermore, investment results associated with ProAssurance's FAL investments and certain U.S. paid administrative expenses are reported concurrently as that information is available on an earlier time frame. |
Basis of Presentation | Basis of Presentation The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosures related to these amounts at the date of the financial statements. |
Accounting Policies | Accounting Policies The significant accounting policies followed by ProAssurance in making estimates that materially affect financial reporting are summarized in these Notes to Consolidated Financial Statements. The Company evaluates these estimates and assumptions on an ongoing basis based on current and historical developments, market conditions, industry trends and other information that the Company believes to be reasonable under the circumstances. The Company can make no assurance that actual results will conform to its estimates and assumptions; reported results of operations may be materially affected by changes in these estimates and assumptions. |
Recognition of Revenues, Credit Losses, Earned But Unbilled Premiums and Lloyd's Premium Estimates | Recognition of Revenues Insurance premiums are recognized as revenues pro rata over the terms of the policies, which are principally one year in duration. Losses and Loss Adjustment Expenses ProAssurance establishes its reserve for losses and LAE ("reserve for losses" or "reserve") based on estimates of the future amounts necessary to pay claims and expenses associated with the investigation and settlement of claims. The reserve for losses is determined on the basis of individual claims and payments thereon as well as actuarially determined estimates of future losses based on past loss experience, available industry data and projections as to future claims frequency, severity, inflationary trends, judicial trends, legislative changes and settlement patterns. Management establishes the reserve for losses after taking into consideration a variety of factors including premium rates, historical paid and incurred loss development trends, and management's evaluation of the current loss environment including frequency, severity, expected effect of inflation, general economic and social trends, and the legal and political environment. Management also takes into consideration the conclusions reached by internal and consulting actuaries. Management updates and reviews the data underlying the estimation of the reserve for losses each reporting period and makes adjustments to loss estimation assumptions that best reflect emerging data. Both internal and consulting actuaries perform an in-depth review of the reserve for losses on at least a semi-annual basis using the loss and exposure data of ProAssurance's subsidiaries. Consulting actuaries provide reports to management regarding the adequacy of reserves. Estimating casualty insurance reserves, and particularly long-tailed insurance reserves, is a complex process. Long-tailed insurance is characterized by the extended period of time typically required both to assess the viability of a claim and potential damages, if any, and to reach a resolution of the claim. For a high proportion of the risks insured or reinsured by ProAssurance, the period of time required to resolve a claim is often five years or more, and claims may be subject to litigation. Estimating losses for these long-tailed claims requires ProAssurance to make and revise judgments and assessments regarding multiple uncertainties over an extended period of time. As a result, reserve estimates may vary significantly from the eventual outcome. Reserve estimates and the assumptions on which these estimates are predicated are regularly reviewed and updated as new information becomes available. Any adjustments necessary are reflected in current operations. Due to the size of ProAssurance’s reserve for losses, even a small percentage adjustment to these estimates could have a material effect on earnings in the period in which the adjustment is made, as was the case in 2022, 2021 and 2020. See Note 8 for additional information on ProAssurance's reserve for losses and LAE. The effect of adjustments made to reinsured losses is mitigated by the corresponding adjustment that is made to reinsurance recoveries. Thus, in any given year, ProAssurance may make significant adjustments to gross losses that have little effect on its net losses. Credit Losses ProAssurance's premiums receivable and reinsurance receivables are exposed to credit losses, but to-date have not experienced any significant amount of credit losses. ProAssurance measures expected credit losses on its premiums receivables and reinsurance receivables on a collective (pool) basis when similar risk characteristics exist, and the Company will reassess its pools each reporting period to ensure all receivables within the pool continue to share similar risk characteristics. If the Company determines that a receivable does not share risk characteristics with its other receivables within a pool, it will evaluate that receivable for expected credit losses on an individual basis. ProAssurance measures expected credit losses associated with its premium receivables at the segment level as each segment’s premium receivables share similar risk characteristics including term, type of financial asset and similar historical and expected credit loss patterns. ProAssurance measures expected credit losses associated with its reinsurance receivables (related to both paid and unpaid losses) at the consolidated level as its reinsurance receivables share similar risk characteristics including type of financial asset, type of industry and similar historical and expected credit loss patterns. ProAssurance measures expected credit losses over the contractual term of each pool utilizing a loss rate method. Historical internal credit loss experience for each pool is the basis for the Company’s assessment of expected credit losses; however, the Company may also consider historical credit loss information from external sources. In addition to historical credit loss data, the Company also considers reasonable and supportable forecasts of future economic conditions in its estimate of expected credit losses by utilizing industry and macroeconomic factors that it believes most relevant to the collectability of each pool. Earned But Unbilled Premiums Workers’ compensation premiums are determined based upon the payroll of the insured, the applicable premium rates and an experience-based modification factor, where applicable. An audit of the policyholders’ records is conducted after policy expiration to make a final determination of applicable premiums. Audit premium due from or due to a policyholder as a result of an audit is reflected in net premiums written and earned when billed. ProAssurance tracks, by policy, the amount of additional premium billed in final audit invoices as a percentage of payroll exposure and uses this information to estimate the probable additional amount of EBUB as of the balance sheet date. Changes to the EBUB estimate are included in net premiums written and earned in the period recognized. As of December 31, 2022 and 2021, ProAssurance carried EBUB of $3.3 million and $1.8 million, respectively, as a part of premiums receivable. ProAssurance will continue to monitor and adjust the estimate, if necessary, based on changes in insured payrolls and economic conditions, as experience develops or new information becomes known; however, the length and magnitude of such changes depends on future developments, which are highly uncertain and cannot be predicted. Lloyd’s Premium Estimates For certain insurance policies and reinsurance contracts written in the Lloyd’s Syndicates segment, premiums are initially recognized based upon estimates of ultimate premium. Estimated ultimate premium consists primarily of premium written under delegated underwriting authority arrangements, which consist primarily of binding authorities, and certain assumed reinsurance agreements. These estimates of ultimate premium are judgmental and are dependent upon certain assumptions, including historical premium trends for similar agreements. As reports are received from programs, ultimate premium estimates are revised, if necessary, with changes reflected in current operations. |
Reinsurance Receivables | Reinsurance Receivables ProAssurance enters into reinsurance agreements whereby other insurance entities agree to assume a portion of the risk associated with certain policies issued by ProAssurance. In return, ProAssurance agrees to pay a premium to the reinsurer. ProAssurance uses reinsurance to provide capacity to write larger limits of liability, to provide reimbursement for losses incurred under the higher limit coverages the Company offers, to provide protection against losses in excess of policy limits, and, in the case of risk sharing arrangements, to align the Company's objectives with those of its strategic business partners and to provide custom insurance solutions for large customer groups. Receivable from reinsurers on paid losses and LAE is the estimated amount of losses already paid that will be recoverable from reinsurers. Receivable from reinsurers on unpaid losses and LAE is the estimated amount of future loss payments that will be recoverable from reinsurers. Reinsurance recoveries are the portion of losses incurred during the period that are estimated to be allocable to reinsurers. Premiums ceded are the estimated premiums that will be due to reinsurers with respect to premiums earned and losses incurred during the period. These estimates are based upon management’s estimates of ultimate losses and the portion of those losses that are allocable to reinsurers under the terms of the related reinsurance agreements. Given the uncertainty inherent in management's estimate of the ultimate amounts of losses, these estimates may vary significantly from the ultimate outcome. Management regularly reviews these estimates and any adjustments necessary are reflected in the period in which the estimate is changed. Due to the size of the receivable from reinsurers, an adjustment to these estimates could have a material effect on ProAssurance's results of operations for the period in which the adjustment is made. Reinsurance contracts do not relieve ProAssurance from its obligations to policyholders. ProAssurance continually monitors its reinsurers to minimize its exposure to significant credit losses from reinsurer insolvencies (see additional discussion below under the heading "Credit Losses"). Any amount determined to be uncollectible is written off in the period in which the uncollectible amount is identified. See Note 5 for further information. |
Retroactive Insurance Contracts | Retroactive Insurance Contracts In certain instances, ProAssurance’s insurance contracts cover losses both on a prospective basis and retroactive basis, and accordingly, ProAssurance bifurcates the prospective and retroactive provisions of these contracts and accounts for each component separately, where practicable. |
Investments | Investments Recurring Fair Value Measurements Fair values of investment securities are primarily provided by independent pricing services. The pricing services provide an exchange-traded price, if available, or provide an estimated price determined using multiple observable inputs, including exchange-traded prices for similar assets. Management reviews valuations of securities obtained from the pricing services for accuracy based upon the specifics of the security, including class, maturity, credit rating, durations, collateral and comparable markets for similar securities. Multiple observable inputs are not available for certain of the Company's investments, including corporate debt not actively traded, certain asset-backed securities and investments in LPs/LLCs. Management values the corporate debt not actively traded and the other asset-backed securities either using dealer quotes for similar securities or discounted cash flow models using yields currently available for similar securities. Management values certain investment funds, primarily LPs/LLCs, based on the NAV of the interest held, as provided by the fund. Nonrecurring Fair Value Measurements Management measures the fair value of certain assets on a nonrecurring basis when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. These assets include investments carried principally at cost, investments in tax credit partnerships, fixed assets, goodwill and other intangible assets. These assets would also include any equity method investments that do not provide a NAV. Fixed Maturities Fixed maturities are considered as either available-for-sale or trading securities. Available-for-sale securities are carried at fair value, determined as described above and in Note 3. Exclusive of impairment losses, discussed in a separate section that follows, unrealized holding gains and losses on available-for-sale securities are included, net of related tax effects, as a component of OCI in the Consolidated Statement of Income and Comprehensive Income during the period of change and as a component of AOCI in shareholders' equity on the Consolidated Balance Sheet. Investment income includes amortization of premium and accretion of discount related to available-for-sale debt securities acquired at other than par value. Debt securities and mandatorily redeemable preferred stock with maturities beyond one year when purchased are classified as fixed maturities. Trading securities are carried at fair value, determined as described above, with the unrealized holding gains and losses included as a component of net investment gains (losses) in the Consolidated Statement of Income and Comprehensive Income during the period of change. Equity Investments Equity investments are carried at fair value, as described above, with the holding gains and losses included as a component of net investment gains (losses) in the Consolidated Statement of Income and Comprehensive Income during the period of change. Equity investments are primarily comprised of bond funds, stocks, and investment funds. Short-term Investments Short-term investments, which have a maturity at purchase of one year or less, are primarily comprised of investments in U.S. Treasury obligations, commercial paper and money market funds. All balances are carried at fair value which approximates the cost of the securities due to their short-term nature. Other Investments Investments in convertible bond securities are carried at fair value as permitted by the accounting guidance for hybrid financial instruments, with changes in fair value recognized in earnings as a component of net investment gains (losses) during the period of change. Interest on convertible bond securities is recorded on an accrual basis based on contractual interest rates and is included in net investment income. Investment in Unconsolidated Subsidiaries Equity investments, primarily investments in LPs/LLCs, where ProAssurance is deemed to have influence because it holds a greater than a minor interest are accounted for using the equity method. Under the equity method, the recorded basis of the investment is adjusted each period for the investor’s pro rata share of the investee’s income or loss. Investments in unconsolidated subsidiaries include tax credit partnerships accounted for using the equity method, whereby ProAssurance’s proportionate share of income or loss is included in equity in earnings (loss) of unconsolidated subsidiaries. Tax credits received from the partnerships are recognized in the period received in the Consolidated Statements of Income and Comprehensive Income as either a reduction to current tax expense or as a component of deferred tax expense if they cannot be utilized in the period received. Business Owned Life Insurance ProAssurance owns life insurance contracts on certain management employees, which includes policies acquired from NORCAL. The life insurance contracts are carried at their current cash surrender value. Changes in the cash surrender value are included in earnings in the current period as investment income. Death benefit proceeds from the contracts are recorded when the proceeds become payable under the policy terms. Realized Gains and Losses Realized investment gains and losses are recognized on the first-in, first-out basis for GAAP purposes and on the specific identification basis for tax purposes. Impairments ProAssurance evaluates its available-for-sale investment securities, which at December 31, 2022 and 2021 consisted entirely of fixed maturity securities, on at least a quarterly basis for the purpose of determining whether declines in fair value below recorded cost basis represent a credit loss. The Company considers a credit loss to have occurred: • if there is intent to sell the security; • if it is more likely than not that the security will be required to be sold before full recovery of its amortized cost basis; or • if the entire amortized basis of the security is not expected to be recovered. The assessment of whether the amortized cost basis of a security is expected to be recovered requires the Company to make assumptions regarding various matters affecting future cash flows. The choice of assumptions is subjective and requires the use of judgment. Actual credit losses experienced in future periods may differ from the Company’s current estimates of those credit losses. Methodologies used to estimate the present value of expected cash flows are: The estimate of expected cash flows is determined by projecting a recovery value and a recovery time frame and assessing whether further principal and interest will be received. ProAssurance considers various factors in projecting recovery values and recovery time frames, including the following: • third-party research and credit rating reports; • the current credit standing of the issuer, including credit rating downgrades, whether before or after the balance sheet date; • the extent to which the decline in fair value is attributable to credit risk specifically associated with the security or its issuer; • internal assessments and the assessments of external portfolio managers regarding specific circumstances surrounding an investment, which indicate the investment is more or less likely to recover its amortized cost than other investments with a similar structure; • for asset-backed securities, the origination date of the underlying loans, the remaining average life, the probability that credit performance of the underlying loans will deteriorate in the future and ProAssurance's assessment of the quality of the collateral underlying the loan; • failure of the issuer of the security to make scheduled interest or principal payments; • any changes to the rating of the security by a rating agency; • recoveries or additional declines in fair value subsequent to the balance sheet date; • adverse legal or regulatory events; • significant deterioration in the market environment that may affect the value of collateral (e.g., decline in real estate prices); • significant deterioration in economic conditions; and • disruption in the business model resulting from changes in technology or new entrants to the industry. If deemed appropriate and necessary, a discounted cash flow analysis is performed to confirm whether a credit loss exists and, if so, the amount of the credit loss. ProAssurance uses the single best estimate approach for available-for-sale debt securities and considers all reasonably available data points, including industry analyses, credit ratings, expected defaults and the remaining payment terms of the debt security. For fixed rate available-for-sale debt securities, cash flows are discounted at the security's effective interest rate implicit in the security at the date of acquisition. If the available-for-sale debt security’s contractual interest rate varies based on subsequent changes in an independent factor, such as an index or rate, for example, the prime rate, the LIBOR, or the U.S. Treasury bill weekly average, that security’s effective interest rate is calculated based on the factor as it changes over the life of the security. If ProAssurance intends to sell a debt security or believes it will more likely than not be required to sell a debt security before the amortized cost basis is recovered, any existing allowance will be written off against the security's amortized cost basis, with any remaining difference between the debt security's amortized cost basis and fair value recognized as an impairment loss in earnings. Exclusive of securities where there is an intent to sell or where it is not more likely than not that the security will be required to be sold before recovery of its amortized cost basis, impairment for debt securities is separated into a credit component and a non-credit component. The credit component of an impairment is the difference between the security’s amortized cost basis and the present value of its expected future cash flows, while the non-credit component is the remaining difference between the security’s fair value and the present value of expected future cash flows. An allowance for expected credit losses will be recorded for the expected credit losses through income and the non-credit component is recognized in OCI. The amount of impairment recognized is limited to the excess of the amortized cost over the fair value of the available-for-sale debt security. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the Consolidated Balance Sheets and Consolidated Statements of Cash Flows, ProAssurance considers all demand deposits and overnight investments to be cash equivalents. |
Foreign Currency | Foreign Currency The functional currency of all ProAssurance foreign subsidiaries is the U.S. dollar. In recording foreign currency transactions, revenue and expense items are converted to U.S. dollars at the exchange rate prevailing at the transaction date. Monetary assets and liabilities originating in currencies other than the U.S. dollar are remeasured to U.S. dollars at the rates of exchange in effect as of the balance sheet date. The resulting foreign currency gains or losses are recognized in the Consolidated Statements of Income and Comprehensive Income as a component of other income. Monetary assets and liabilities include investments, cash and cash equivalents, accrued expenses and other liabilities. In addition, monetary assets and liabilities include certain premiums receivable and reserve for losses and LAE as a result of reinsurance transactions conducted with foreign cedents denominated in their local functional currencies. |
Other Assets and Liabilities | Pension As a result of the NORCAL acquisition, the Company sponsors a frozen qualified defined benefit pension plan which covers substantially all NORCAL employees (except those that were previous employees of Medicus Insurance Company and FD Insurance Company, employees of PPM RRG as well as new hires after December 31, 2013). Accounting for pension benefits requires the use of assumptions for the valuation of the PBO and the expected performance of the plan assets. The Company uses December 31 as the measurement date for calculating its obligation related to this defined benefit pension plan and for estimating net periodic benefit cost (income) for the subsequent year. The PBO for pension benefits represents the present value of all future benefits earned as of the measurement date for vested and non-vested employees. At each measurement date, the Company reviews the various assumptions impacting the amounts recorded for the pension plan including the discount rates, which impacts the recorded value of the PBO and interest costs, and the expected return on plan assets. To estimate the discount rate at the measurement date, the Company uses a bond yield curve model, developed based on pricing and yield information for high quality corporate bonds. The assumption for the expected return on plan assets is based on the anticipated returns that will be earned by the portfolio over the long term. The expected return is influenced, but not determined, by historical portfolio performance. Accounting standards provide for the delayed recognition of differences between actual results and expected or estimated results. This delayed recognition of the differences is amortized into earnings over time. The differences between actual results and expected or estimated results are recognized in full in AOCI. Amounts recognized in AOCI are reclassified to earnings in a systematic manner over the average future service period of participants. Other Assets and Liabilities Other assets in 2021 included investments in a deferred compensation rabbi trust which were carried at fair value. These rabbi trust assets were related to other liabilities associated with funded deferred compensation agreements with NORCAL employees and previous members of NORCAL's Board of Directors. The deferred compensation assets and liabilities were terminated during the first quarter of 2022. The reported balance of the liability was determined based on the amount of elective deferrals and employer contributions adjusted for periodic changes in fair value of the participant balances based on the performance of the funds selected by the participants. See additional information on the deferred compensation assets and liabilities in Note 3. ProAssurance recognized the net change in the fair value of the rabbi trust assets and associated deferred compensation liabilities as a component of net investment income during the period of change. |
Deferred Policy Acquisition Costs; Ceding Commission Income | Deferred Policy Acquisition Costs; Ceding Commission Income Costs that vary with and are directly related to the successful production of new and renewal premiums (primarily premium taxes, commissions and underwriting salaries) are deferred to the extent they are recoverable against unearned premiums and are amortized as related premiums are earned. Unearned ceding commission income is reported as an offset to DPAC, and ceding commission earned is reported as an offset to DPAC amortization. ProAssurance evaluates the recoverability of DPAC typically at the segment level each reporting period, or in a manner that is consistent with the way the Company manages its business. Any amounts estimated to be unrecoverable are charged to expense in the current period. As part of the evaluation of the recoverability of DPAC, ProAssurance also evaluates unearned premium for premium deficiencies. A premium deficiency is recognized if the sum of anticipated losses and loss adjustment expenses, unamortized DPAC and maintenance costs, net of anticipated investment income, exceeds the related unearned premium. If a premium deficiency is identified, the associated DPAC is written off, and a PDR is recorded for the excess deficiency as a component of net losses and loss adjustment expenses in the Consolidated Statements of Income and Comprehensive Income and as a component of the reserve for losses on the Consolidated Balance Sheets. |
Income Taxes/Deferred Taxes | Income Taxes/Deferred Taxes ProAssurance files a consolidated federal income tax return. Tax-related interest and penalties are recognized as components of tax expense. ProAssurance evaluates tax positions taken on tax returns and recognizes positions in the financial statements when it is more likely than not that the position will be sustained upon resolution with a taxing authority. If recognized, the benefit is measured as the largest amount of benefit that has a greater than fifty percent probability of being realized. Uncertain tax positions are reviewed each period by considering changes in facts and circumstances, such as changes in tax law, interactions with taxing authorities and developments in case law, and adjustments would be made if considered necessary. Adjustments to unrecognized tax benefits may affect income tax expense, and the settlement of uncertain tax positions may require the use of cash. Other than differences related to timing, no significant adjustments were considered necessary during the years ended December 31, 2022 or 2021. Deferred federal income taxes arise from the recognition of temporary differences between the basis of assets and liabilities determined for financial reporting purposes and the basis determined for income tax purposes. ProAssurance’s temporary differences principally relate to loss reserves, unearned and advanced premiums, DPAC, NOL and tax credit carryforwards, compensation related items, unrealized investment gains (losses) and basis differentials in fixed assets, intangible assets and operating leases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to be in effect when such benefits are realized. ProAssurance reviews its deferred tax assets quarterly for impairment. If management determines that it is more likely than not that some or all of a deferred tax asset will not be realized, a valuation allowance is recorded to reduce the carrying value of the asset. In assessing the need for a valuation allowance, management is required to make certain judgments and assumptions about the future operations of ProAssurance based on historical experience and information as of the measurement period regarding reversal of existing temporary differences, carryback capacity, future taxable income of the appropriate character (including its capital and operating characteristics) and tax planning strategies. |
Intangible Assets | Intangible AssetsIntangible assets with definite lives are amortized over the estimated useful life of the asset. Amortizable intangible assets primarily consist of policyholder relationships, renewal rights and trade names. Intangible assets with an indefinite life, primarily state licenses, are not amortized. Indefinite lived intangible assets are evaluated for impairment on an annual basis or upon the occurrence of certain triggering events or substantive changes in circumstances that indicate the intangible asset may be impaired. Amortizable intangible assets and other long-lived assets are tested for impairment at the asset group level upon the occurrence of certain triggering events or substantive changes in circumstances that indicate the carrying amount of the asset group may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset group are less than the carrying amounts of the related asset group. Impairment losses are measured as the amount by which the carrying amount of the asset groups exceed their fair values. The Company's asset groups generally correspond to the same level at which goodwill is tested for impairment. |
Goodwill | Goodwill Goodwill is tested for impairment annually or more frequently if circumstances indicate an impairment may have occurred. The date of the Company's annual goodwill impairment testing is October 1. Impairment of goodwill is tested at the reporting unit level, which is consistent with the Company's reportable segments identified in Note 16. Of the Company's five reporting units, two have net goodwill: Workers' Compensation Insurance and Segregated Portfolio Cell Reinsurance. See Note 7 for additional information about the Company's assessment of goodwill. Annual Impairment Assessment When testing goodwill for impairment on the Company's annual test date, it has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of a reporting unit is less than its carrying amount. If the Company elects to perform a qualitative assessment and determine that an impairment is more likely than not, the Company is then required to perform a quantitative impairment test; otherwise, no further analysis is required. The Company also may elect not to perform the qualitative assessment and, instead, proceed directly to the quantitative impairment test. Performance of the qualitative goodwill impairment assessment requires judgment in identifying and considering the significance of relevant key factors, events, and circumstances that affect the fair values of the Company's reporting units. This requires consideration and assessment of external factors such as macroeconomic, industry, and market conditions, as well as entity-specific factors, such as the Company's actual and planned financial performance. The Company also gives consideration to the difference between each reporting unit's fair value and carrying value as of the most recent date that a fair value measurement was performed. If the results of the qualitative assessment conclude that it is not more likely than not that the fair value of a reporting unit exceeds its carrying value, additional quantitative impairment testing is performed. The quantitative goodwill impairment test involves comparing the fair value of a reporting unit with its carrying value including goodwill. If the fair value of a reporting unit exceeds its carrying value, the reporting unit's goodwill is considered not to be impaired. However, if the carrying value of a reporting unit exceeds its fair value, an impairment loss is recorded in an amount equal to that excess. Any impairment charge recognized is limited to the amount of the respective reporting unit's allocated goodwill. |
Business Combination, Contingent Consideration | Business Combinations The Company accounted for its acquisition of NORCAL in accordance with GAAP relating to business combinations which required management to make certain estimates and assumptions including determining the fair value of the non-cash components of the acquisition consideration and the acquisition date fair values of the acquired tangible and identifiable intangible assets and assumed liabilities of NORCAL. Contingent Consideration Contingent consideration in a business combination that is classified as a liability carried as a component of other liabilities on ProAssurance's Consolidated Balance Sheet. Contingent consideration is measured at fair value on the date of acquisition and remeasured at fair value each subsequent reporting period. Given the contingent consideration associated with the NORCAL acquisition is dependent upon the after-tax development of NORCAL's ultimate net losses between December 31, 2020 and December 31, 2023, the Company will bifurcate changes in the contingent consideration each period between fair value changes and, if applicable, changes in estimates of NORCAL's ultimate net losses for accident years 2020 and prior. Changes in fair value are recognized in earnings as a component of net investment gains (losses) and changes in estimates of NORCAL's ultimate net losses for accident years 2020 and prior are recognized in earnings as component of operating expenses. |
VOBA | VOBAVOBA is based on actuarially determined projections and reflects the estimated fair value of in-force contracts acquired in a business combination. VOBA is recorded as an asset when the in-force contracts acquired are expected to generate underwriting income and is recorded as a liability when the in-force contracts acquired are expected to generate an underwriting loss. VOBA liabilities (negative VOBA) are recorded as a component of the reserve for losses and loss adjustment expenses on the Consolidated Balance Sheets. To the extent negative VOBA relates to unearned premium, it is amortized over a period in proportion to the earn-out of the premium as a reduction to current accident year net losses and loss adjustment expenses. To the extent negative VOBA relates to the DDR reserve, it is amortized over a period in proportion to the approximate consumption of losses as a reduction to prior accident year net losses and loss adjustment expenses. |
Leases | Leases ProAssurance is involved in a number of leases, primarily for office facilities. The Company determines if an arrangement is a lease at the inception date of the contract and classifies all leases as either financing or operating. Operating leases are included in operating lease ROU assets and operating lease liabilities on the Consolidated Balance Sheets. The ROU asset represents the right to use the underlying asset for the lease term. As of December 31, 2022, ProAssurance has no leases that are classified as financing leases. Operating ROU assets and operating lease liabilities are initially recognized as of the lease commencement date based on the present value of the remaining lease payments, discounted over the term of the lease using a discount rate determined based on information available as of the commencement date. As the majority of ProAssurance's lessors do not provide an implicit discount rate, the Company uses its collateralized incremental borrowing rate in determining the present value of remaining lease payments. Due to the adoption of ASU 2016-02, the Company used its collateralized incremental borrowing rate as of January 1, 2019 for operating leases that commenced prior to that date. Subsequent to the initial recognition, the operating ROU asset and operating lease liability are amortized and accreted, respectively, over the lease term in a manner that results in a straight-line operating lease expense. Operating lease expense is included as a component of operating expense on the Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2022, 2021 and 2020. Leases with an initial term of twelve months or less are considered short-term and are not recorded on the Consolidated Balance Sheet; lease expense for these leases is also recognized on a straight-line basis over the lease term. Additionally, for leases entered into or reassessed after the adoption of ASU 2016-02 on January 1, 2019, ProAssurance accounts for lease and non-lease components of a contract as a single lease component. Operating lease ROU assets are evaluated for impairment at the asset group level whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. The carrying amount of an asset group, which includes the operating lease ROU asset and the related operating lease liability, is not recoverable if the carrying amount exceeds the sum of the undiscounted cash flows expected to result from the use of the asset group over the life of the primary asset in the asset group. That assessment is based on the carrying amount of the asset group, including the operating lease ROU asset and the related operating lease liability, at the date it is tested for recoverability and an impairment loss is measured and recognized as the amount by which the carrying amount of the asset group exceeds its fair value. Any impairment loss is allocated to each asset in the asset group, including the operating ROU asset. When a lease of an office facility is to be abandoned and will not be subleased, the Company first evaluates whether or not the operating lease ROU asset’s inclusion in an existing asset group continues to be appropriate and if the commitment to abandon the lease constitutes a change in circumstances requiring the operating lease ROU asset, or the larger asset group, to be tested for impairment. If an impairment test is required, it is performed in the same manner as discussed above. Any remaining carrying value of the operating lease ROU asset is amortized from the date the Company commits to a plan to abandon the lease to the expected date that the Company will cease to use the leased property. Leases to be abandoned in which the Company has the intent or practical ability to sublease continue to be accounted for under a held and use model, with no change to the amortization period of the operating lease ROU asset, and are evaluated for impairment as a separate asset group at the date the sublease is executed. |
Real Estate | Real Estate Real Estate balances are reported at cost or, for properties acquired in business combinations, estimated fair value on the date of acquisition, less accumulated depreciation. Real estate principally consists of properties in use as corporate offices. Depreciation is computed over the estimated useful lives of the related property using the straight-line method. Excess office capacity is leased or made available for lease; rental income is included in other income, and real estate expenses are included in operating expense. |
Treasury Shares | Treasury Shares Treasury shares are reported at cost and are reflected on the Consolidated Balance Sheets as an unallocated reduction of total equity. |
Share-Based Payments | Share-Based Payments Compensation cost for share-based payments is measured based on the grant-date fair value of the award, recognized over the period in which the employee is required to provide service in exchange for the award. Excess tax benefits (tax deductions realized in excess of the compensation costs recognized for the exercise of the awards, multiplied by the incremental tax rate) are reported as operating cash inflows. |
Subsequent Events | Subsequent Events ProAssurance evaluates events that occurred subsequent to December 31, 2022 for recognition or disclosure in its Consolidated Financial Statements. |
Accounting Changes Adopted and Accounting Changes Not Yet Adopted | Accounting Changes Adopted ProAssurance has not adopted any accounting changes during the year ended December 31, 2022 that had a material effect on its results of operations, financial position or cash flows. Accounting Changes Not Yet Adopted Reference Rate Reform - Deferral of LIBOR Sunset Date (ASU 2022-06) Effective for fiscal years beginning after December 31, 2022 and interim periods within those fiscal years, the FASB amended guidance which defers the LIBOR transition date from December 31, 2022 to December 31, 2024. ProAssurance has exposure to LIBOR in its available-for-sale fixed maturities portfolio which represented approximately 6% of total investments, |
Fair Value Measurement | The fair values for securities included in the Level 2 category, with the few exceptions described below, were developed by one of several third-party, nationally recognized pricing services, including services that price only certain types of securities. Each service uses complex methodologies to determine values for securities and subject the values they develop to quality control reviews. Management selected a primary source for each type of security in the portfolio and reviewed the values provided for reasonableness by comparing data to alternate pricing services and to available market and trade data. Values that appeared inconsistent were further reviewed for appropriateness. Any value that did not appear reasonable was discussed with the service that provided the value and adjusted, if necessary. There were no material changes to the values supplied by the pricing services during the years ended December 31, 2022 and 2021. Level 2 Valuations Below is a summary description of the valuation methodologies primarily used by the pricing services for securities in the Level 2 category, by security type: U.S. Treasury obligations were valued based on quoted prices for identical assets, or, in markets that are not active, quotes for similar assets, taking into consideration adjustments for variations in contractual cash flows and yields to maturity. U.S. Government-sponsored enterprise obligations were valued using pricing models that consider current and historical market data, normal trading conventions, credit ratings and the particular structure and characteristics of the security being valued, such as yield to maturity, redemption options, and contractual cash flows. Adjustments to model inputs or model results were included in the valuation process when necessary to reflect recent regulatory, government or corporate actions or significant economic, industry or geographic events affecting the security’s fair value. State and municipal bonds were valued using a series of matrices that considered credit ratings, the structure of the security, the sector in which the security falls, yields and contractual cash flows. Valuations were further adjusted, when necessary, to reflect the expected effect on fair value of recent significant economic or geographic events or ratings changes. Corporate debt, multiple observable inputs consisted primarily of corporate bonds. The methodology used to value Level 2 corporate bonds was the same as the methodology previously described for U.S. Government-sponsored enterprise obligations. Bank loans were valued based on an average of broker quotes for the loans in question, if available. If quotes were not available, the loans were valued based on quoted prices for comparable loans or, if the loan was newly issued, by comparison to similar seasoned issues. Broker quotes were compared to actual trade prices to permit assessment of the reliability of the quotes; unreliable quotes were not considered in quoted averages. Residential and commercial mortgage-backed securities were valued using a pricing matrix which considers the issuer type, coupon rate and longest cash flows outstanding. The matrix used was based on the most recently available market information. Agency and non-agency collateralized mortgage obligations were both valued using models that consider the structure of the security, current and historical information regarding prepayment speeds, ratings and ratings updates, and current and historical interest rate and interest rate spread data. Other asset-backed securities were valued using models that consider the structure of the security, monthly payment information, current and historical information regarding prepayment speeds, ratings and ratings updates, and current and historical interest rate and interest rate spread data. Spreads and prepayment speeds consider collateral type. Fixed maturities, trading are held by the Lloyd's Syndicates segment and include U.S. Treasury obligations, corporate debt with multiple observable inputs and other asset-backed securities. These securities were valued using the respective valuation methodologies discussed above for each security type. Equity investments were securities not traded on an exchange on the valuation date. The securities were valued using the most recently available quotes for the securities. Short-term investments were securities maturing within one year, carried at fair value which approximated the cost of the securities due to their short-term nature. Other investments consisted primarily of convertible bonds valued using a pricing model that incorporated selected dealer quotes as well as current market data regarding equity prices and risk free rates. If dealer quotes were unavailable for the security being valued, quotes for securities with similar terms and credit status were used in the pricing model. Dealer quotes selected for use were those considered most accurate based on parameters such as underwriter status and historical reliability. Other assets consisted of an interest rate cap derivative instrument valued using a model which considers the volatilities from other instruments with similar maturities, strike prices, durations and forward yield curves. Under the terms of the interest rate cap agreement, ProAssurance paid a premium of $2 million for the right to receive cash payments based upon a notional amount of $35 million if and when the three-month LIBOR exceeded 2.35%. In April 2022, ProAssurance terminated its interest rate cap agreement. Level 3 Valuations Below is a summary description of the valuation methodologies used as well as quantitative information regarding securities in the Level 3 category, by security type: Level 3 Valuation Methodologies Corporate debt, limited observable inputs consisted of corporate bonds valued using dealer quotes for similar securities or discounted cash flow models using yields currently available for similar securities. Similar securities are defined as securities of comparable credit quality that have like terms and payment features. Assessments of credit quality were based on NRSRO ratings, if available, or were determined by management if not available. At December 31, 2022, 100% of the securities were rated and the average rating was BBB+. At December 31, 2021, 100% of the securities were rated and the average rating was BBB. Residential mortgage-backed and other asset-backed securities consisted of securitizations of receivables valued using dealer quotes for similar securities or discounted cash flow models using yields currently available for similar securities. Similar securities are defined as securities of comparable credit quality that have like terms and payment features. Assessments of credit quality were based on NRSRO ratings, if available, or were subjectively determined by management if not available. At December 31, 2022, 100% of the securities were rated and the average rating was BBB-. At December 31, 2021, 100% of the securities were rated and the average rating was BBB+. Equity investments consisted of preferred stock for which limited observable inputs were available at December 31, 2022 and December 31, 2021. The equity securities were primarily priced using broker/dealer quotes and internal models with some inputs that are unobservable. Other investments consisted of convertible securities for which limited observable inputs were available at December 31, 2022 and December 31, 2021. The securities were valued internally based on expected cash flows, including the expected final recovery, discounted at a yield that considered the lack of liquidity and the financial status of the issuer. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Rollforward of the Allowance for Expected Credit Losses Related to Premiums Receivable | The following tables present a roll forward of the allowance for expected credit losses related to the Company's premiums receivable for the years ended December 31, 2022 and 2021. (In thousands) Premiums Receivable, Net Allowance for Expected Credit Losses Balance, December 31, 2021 $ 241,095 $ 7,436 Provision for expected credit losses 564 Write offs charged against the allowance (674) Recoveries of amounts previously written off 332 Balance, December 31, 2022 $ 246,094 $ 7,658 (In thousands) Premiums Allowance for Expected Credit Losses Balance, December 31, 2020 $ 201,395 $ 6,131 Initial allowance recognized in the period for NORCAL premiums receivable (1) 2,137 Provision for expected credit losses 439 Write offs charged against the allowance (1,533) Recoveries of amounts previously written off 262 Balance, December 31, 2021 $ 241,095 $ 7,436 (1) Represents an initial allowance for expected credit losses recognized during the second quarter of 2021 for NORCAL's premiums receivable to conform NORCAL to ProAssurance's accounting policies. |
Schedule of Non-Amortizable Intangible Assets | The following table provides additional information regarding ProAssurance's intangible assets. Gross Carrying Value Accumulated Amortization Amortization Expense December 31 December 31 Year Ended December 31 (In millions) 2022 2021 2022 2021 2022 2021 2020 Intangible Assets Non-amortizable $ 38.2 $ 38.2 Amortizable 100.3 100.3 $ 71.7 $ 65.2 $ 6.5 $ 6.4 $ 6.2 Total Intangible Assets $ 138.5 $ 138.5 |
Schedule of Amortizable Intangible Assets | The following table provides additional information regarding ProAssurance's intangible assets. Gross Carrying Value Accumulated Amortization Amortization Expense December 31 December 31 Year Ended December 31 (In millions) 2022 2021 2022 2021 2022 2021 2020 Intangible Assets Non-amortizable $ 38.2 $ 38.2 Amortizable 100.3 100.3 $ 71.7 $ 65.2 $ 6.5 $ 6.4 $ 6.2 Total Intangible Assets $ 138.5 $ 138.5 |
Schedule of Other Liabilities | Other liabilities at December 31, 2022 and 2021 consisted of the following: (In thousands) 2022 2021 SPC dividends payable $ 59,901 $ 66,456 Deferred compensation liabilities 27,905 52,332 Contingent consideration 15,000 24,000 All other 123,573 137,944 Total other liabilities $ 226,379 $ 280,732 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of intangible assets acquired | Intangible assets acquired included the following: (In thousands) Fair Value on Acquisition Date Useful Life Trade name $ 1,000 3 Licenses 13,000 Indefinite Total $ 14,000 |
Schedule of present value of future insurance profits, expected amortization | The following table details the amortization of the fair value adjustments recognized for the year ended December 31, 2022 and the remaining expected amortization of these adjustments for the three years following December 31, 2022 and thereafter. (In thousands) Amount at May 5, 2021 Amortization period (years) 2022 Remaining expected pre-tax amortization 2023 2024 2025 Thereafter Fair value adjustment on reserves, net (1) $ 38,701 7 $ 10,595 $ 8,090 $ 5,083 $ 3,107 $ 4,058 Unearned premium VOBA, net (2) 11,676 1 4,939 — — — — DDR reserve VOBA (1) 3,467 15 224 243 243 243 2,375 Total $ 53,844 $ 15,758 $ 8,333 $ 5,326 $ 3,350 $ 6,433 (1) Amortization will be recorded as a reduction to prior accident year net losses and loss adjustment expenses. (2) Amortization was recorded as a reduction to current accident year net losses and loss adjustment expenses. As of June 30, 2022, the negative VOBA was fully amortized. |
Schedule of Pro Forma Information | The following table provides Pro Forma Consolidated Results and Actual Consolidated Results for the years ended December 31, 2021 and 2020 as if the NORCAL transaction had occurred on January 1, 2020. The pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the operating results that may have actually occurred had the acquisition of NORCAL been completed on January 1, 2020. In addition, the unaudited pro forma financial information does not give effect to any anticipated cost savings, operating efficiencies or other synergies that may be associated with the acquisition, or any estimated costs that have been or will be incurred to integrate the assets and operations of NORCAL. Year Ended December 31 (In thousands) 2021 2020 Revenue: ProAssurance Pro Forma Consolidated Results $ 1,247,272 $ 1,275,459 ProAssurance Actual Consolidated Results $ 1,124,410 $ 874,940 Net income (loss): ProAssurance Pro Forma Consolidated Results $ 88,223 $ (113,557) ProAssurance Actual Consolidated Results $ 144,124 $ (175,727) |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Assets | Fair values of assets measured at fair value on a recurring basis as of December 31, 2022 and December 31, 2021 are shown in the following tables. Where applicable, the tables also indicate the fair value hierarchy of the valuation techniques utilized to determine those fair values. For some assets, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When this is the case, the asset is categorized based on the level of the most significant input to the fair value measurement. Assessments of the significance of a particular input to the fair value measurement require judgment and consideration of factors specific to the assets being valued. December 31, 2022 Fair Value Measurements Using Total (In thousands) Level 1 Level 2 Level 3 Fair Value Assets: Fixed maturities, available-for-sale U.S. Treasury obligations $ — $ 221,608 $ — $ 221,608 U.S. Government-sponsored enterprise obligations — 19,934 — 19,934 State and municipal bonds — 439,450 — 439,450 Corporate debt, multiple observable inputs — 1,717,479 — 1,717,479 Corporate debt, limited observable inputs — — 63,973 63,973 Residential mortgage-backed securities — 389,291 249 389,540 Agency commercial mortgage-backed securities — 9,704 — 9,704 Other commercial mortgage-backed securities — 194,090 — 194,090 Other asset-backed securities — 413,989 2,705 416,694 Fixed maturities, trading — 43,434 — 43,434 Equity investments Financial 9,850 2,219 303 12,372 Utilities/Energy 854 — — 854 Industrial — — 2,500 2,500 Bond funds 112,136 — — 112,136 All other 15,876 — — 15,876 Short-term investments 181,937 63,376 — 245,313 Other investments 1,881 88,783 1,783 92,447 Total assets categorized within the fair value hierarchy $ 322,534 $ 3,603,357 $ 71,513 3,997,404 Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of: Investment in unconsolidated subsidiaries 262,485 Total assets at fair value $ 4,259,889 Liabilities: Other liabilities $ — $ — $ 15,000 $ 15,000 Total liabilities categorized within the fair value hierarchy $ — $ — $ 15,000 $ 15,000 December 31, 2021 Fair Value Measurements Using Total (In thousands) Level 1 Level 2 Level 3 Fair Value Assets: Fixed maturities, available-for-sale U.S. Treasury obligations $ — $ 238,507 $ — $ 238,507 U.S. Government-sponsored enterprise obligations — 20,234 — 20,234 State and municipal bonds — 519,196 — 519,196 Corporate debt, multiple observable inputs — 1,851,427 — 1,851,427 Corporate debt, limited observable inputs — — 47,129 47,129 Residential mortgage-backed securities — 453,644 297 453,941 Agency commercial mortgage-backed securities — 14,141 — 14,141 Other commercial mortgage-backed securities — 231,483 — 231,483 Other asset-backed securities — 451,459 6,205 457,664 Fixed maturities, trading — 43,670 — 43,670 Equity investments Financial 6,615 855 — 7,470 Industrial — — 2,500 2,500 Bond funds 187,059 — — 187,059 All other 17,778 — — 17,778 Short-term investments 174,944 42,043 — 216,987 Other investments 1,889 95,288 1,434 98,611 Other assets — 649 — 649 Total assets categorized within the fair value hierarchy $ 388,285 $ 3,962,596 $ 57,565 4,408,446 Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of: Investment in unconsolidated subsidiaries 270,816 Total assets at fair value $ 4,679,262 Liabilities: Other liabilities $ — $ — $ 24,000 $ 24,000 Total liabilities categorized within the fair value hierarchy $ — $ — $ 24,000 $ 24,000 |
Schedule of Quantitative Information about Level 3 Fair Value Measurements | Quantitative Information Regarding Level 3 Valuations Fair Value at ($ in thousands) December 31, 2022 December 31, 2021 Valuation Technique Unobservable Input Range Assets: Corporate debt, limited observable inputs $63,973 $47,129 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) Residential mortgage-backed securities $249 $297 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) Other asset-backed securities $2,705 $6,205 Market Comparable Comparability Adjustment 0% - 5% (2.5%) Discounted Cash Flows Comparability Adjustment 0% - 5% (2.5%) Equity investments $2,803 $2,500 Discounted Cash Flows Comparability Adjustment 0% - 10% (5%) Other investments $1,783 $1,434 Discounted Cash Flows Comparability Adjustment 0% - 10% (5%) Liabilities: Other liabilities $15,000 $24,000 Stochastic Model/Discounted Cash Flows Weighted Average Cost of Capital 0% - 10% (9%) |
Schedule of Changes in the Fair Value of Assets Measured at Fair Value | The following tables present summary information regarding changes in the fair value of assets and liabilities measured using Level 3 inputs. December 31, 2022 Level 3 Fair Value Measurements Assets Liabilities (In thousands) State and Municipal Bonds Corporate Debt Asset-backed Securities Equity Investments Other Investments Total Assets Other Liabilities Total Liabilities Balance, December 31, 2021 $ — $ 47,129 $ 6,502 $ 2,500 $ 1,434 $ 57,565 $ (24,000) $ (24,000) Total gains (losses) realized and unrealized: Included in earnings, as a part of: Net investment income (loss) — (1) 8 — — 7 — — Net investment gains (losses) — — — 102 (553) (451) 9,000 9,000 Included in other comprehensive income (loss) (19) (4,324) (601) — — (4,944) — — Purchases 750 34,805 10,907 17 3,292 49,771 — — Sales — (5,153) (287) — (1,167) (6,607) — — Transfers in — 18,828 570 2,377 529 22,304 — — Transfers out (731) (27,311) (14,145) (2,193) (1,752) (46,132) — — Balance, December 31, 2022 $ — $ 63,973 $ 2,954 $ 2,803 $ 1,783 $ 71,513 $ (15,000) $ (15,000) Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end $ — $ — $ — $ 101 $ (822) $ (721) $ — $ — December 31, 2021 Level 3 Fair Value Measurements Assets Liabilities (In thousands) Corporate Debt Asset-backed Securities Equity Investments Other Investments Total Assets Other Liabilities Total Liabilities Balance, December 31, 2020 $ 3,265 $ 8,693 $ — $ — $ 11,958 $ — $ — Total gains (losses) realized and unrealized: Included in earnings, as a part of: Net investment income (loss) 1 (3) — — (2) — — Net investment gains (losses) (14) (11) 15 (774) (784) — — Included in other comprehensive income (loss) 27 (403) — — (376) — — Purchases 57,586 31,204 9,083 205 98,078 — — Sales (3,277) (800) (5,799) — (9,876) — — Transfers in 858 — 69 3,586 4,513 — — Transfers out (11,317) (32,178) (868) (1,583) (45,946) — — Business Combination (See Note 2) — — — — — (24,000) (24,000) Balance, December 31, 2021 $ 47,129 $ 6,502 $ 2,500 $ 1,434 $ 57,565 $ (24,000) $ (24,000) Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end $ — $ — $ 10 $ (774) $ (764) $ — $ — |
Schedule of Investments in LLCs and Limited Partnerships | The amount of ProAssurance's unfunded commitments related to these investments as of December 31, 2022 and fair values of these investments as of December 31, 2022 and 2021 were as follows: Unfunded Fair Value (In thousands) December 31, 2022 December 31, 2022 December 31, 2021 Investment in unconsolidated subsidiaries: Private debt funds (1) $2,125 $ 19,620 $ 18,465 Long/short equity funds (2) None 5,089 655 Non-public equity funds (3) $50,856 144,560 160,219 Credit funds (4) $36,460 49,245 47,300 Strategy focused funds (5) $14,500 43,971 44,177 Total investments carried at NAV $ 262,485 $ 270,816 Below is additional information regarding each of the investments listed in the table above as of December 31, 2022. (1) This investment is comprised of interests in two unrelated LP funds that are structured to provide interest distributions primarily through diversified portfolios of private debt instruments. One LP allows redemption by special consent, while the other does not permit redemption. Income and capital are to be periodically distributed at the discretion of the LPs over an anticipated time frame that spans from three (2) This investment is comprised of interests in two unrelated LP funds. One LP fund holds primarily long and short North American equities and targets absolute returns using strategies designed to take advantage of market opportunities. The other LP holds long and short publicly traded securities that will passively generate income. Redemptions are permitted; one with 30 days written notice if outside of a lock-up period and the other above specified thresholds (lowest threshold is 90%) which may be only partially payable until after a fund audit is completed and are then payable within 30 days. (3) This investment is comprised of interests in multiple unrelated LP funds, each structured to provide capital appreciation through diversified investments in private equity, which can include investments in buyout, venture capital, debt including senior, second lien and mezzanine, distressed debt, collateralized loan obligations and other private equity-oriented LPs. Two of the LPs allow redemption by terms set forth in the LP agreements; the others do not permit redemption. Income and capital are to be periodically distributed at the discretion of the LP over time frames that are anticipated to span up to ten years. (4) This investment is comprised of multiple unrelated LP funds. Two funds seek to obtain superior risk-adjusted absolute returns through a diversified portfolio of debt securities, including bonds, loans and other asset-backed instruments. The remaining funds focus on private middle market company mezzanine and senior secured loans, opportunities across the credit spectrum, mortgage backed-loans, as well as various types of loan-backed investments. One fund allows redemptions at any quarter-end with prior notice requirements of 180 days, while two other funds allow for redemptions with consent of the General Partner. The remaining funds do not allow redemptions. For the funds that do not allow redemptions, income and capital are to be periodically distributed at the discretion of the LP over time frames throughout the remaining life of the funds. (5) This investment is comprised of multiple unrelated LPs/LLCs funds. One fund is an LLC focused on investing in North American consumer products companies, comprised of equity and equity-related securities, as well as debt instruments. A second fund is focused on aircraft investments, along with components and assets related to aircrafts. For both funds, redemptions are not permitted. Another fund is an LP focused on North American energy infrastructure assets that allows redemption with consent of the General Partner. The remaining funds are real estate focused LPs, one of which allows for redemption with prior notice. |
Schedule of Financial Instruments not Measured at Fair Value | The following table provides the estimated fair value of the Company's financial instruments that, in accordance with GAAP for the type of investment, are measured using a methodology other than fair value. Fair values provided primarily fall within the Level 3 fair value category. December 31, 2022 December 31, 2021 (In thousands) Carrying Fair Carrying Fair Financial assets: BOLI $ 81,746 $ 81,746 $ 81,767 $ 81,767 Other investments $ 3,322 $ 3,322 $ 3,183 $ 3,183 Other assets $ 28,819 $ 28,790 $ 40,581 $ 40,583 Financial liabilities: Senior notes due 2023* $ 250,000 $ 248,153 $ 250,000 $ 264,000 Contribution Certificates $ 177,525 $ 134,479 $ 175,900 $ 179,892 Other liabilities $ 27,905 $ 27,905 $ 52,332 $ 52,332 * Carrying value excludes unamortized debt issuance costs. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-For-Sale Fixed Maturities | Available-for-sale fixed maturities at December 31, 2022 and December 31, 2021 included the following: December 31, 2022 (In thousands) Amortized Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities, available-for-sale U.S. Treasury obligations $ 243,999 $ — $ 8 $ 22,399 $ 221,608 U.S. Government-sponsored enterprise obligations 21,562 — — 1,628 19,934 State and municipal bonds 483,584 — 177 44,311 439,450 Corporate debt 1,980,579 — 735 199,862 1,781,452 Residential mortgage-backed securities 450,870 229 555 61,656 389,540 Agency commercial mortgage-backed securities 10,576 — — 872 9,704 Other commercial mortgage-backed securities 217,021 — 63 22,994 194,090 Other asset-backed securities 444,220 198 289 27,617 416,694 $ 3,852,411 $ 427 $ 1,827 $ 381,339 $ 3,472,472 December 31, 2021 (In thousands) Amortized Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Fixed maturities, available-for-sale U.S. Treasury obligations $ 239,765 $ 1,166 $ 2,424 $ 238,507 U.S. Government-sponsored enterprise obligations 20,467 29 262 20,234 State and municipal bonds 511,750 9,620 2,174 519,196 Corporate debt 1,884,455 29,050 14,949 1,898,556 Residential mortgage-backed securities 455,438 4,254 5,751 453,941 Agency commercial mortgage-backed securities 13,909 294 62 14,141 Other commercial mortgage-backed securities 231,226 2,530 2,273 231,483 Other asset-backed securities 457,837 2,747 2,920 457,664 $ 3,814,847 $ 49,690 $ 30,815 $ 3,833,722 |
Schedule of Available-For-Sale Securities by Contractual Maturity | The recorded cost basis and estimated fair value of available-for-sale fixed maturities at December 31, 2022, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. (In thousands) Amortized Due in one Due after Due after Due after Total Fair Fixed maturities, available-for-sale U.S. Treasury obligations $ 243,999 $ 23,523 $ 139,958 $ 56,909 $ 1,218 $ 221,608 U.S. Government-sponsored enterprise obligations 21,562 2,195 13,790 3,949 — 19,934 State and municipal bonds 483,584 37,427 144,161 151,294 106,568 439,450 Corporate debt 1,980,579 174,542 854,788 654,558 97,564 1,781,452 Residential mortgage-backed securities 450,870 389,540 Agency commercial mortgage-backed securities 10,576 9,704 Other commercial mortgage-backed securities 217,021 194,090 Other asset-backed securities 444,220 416,694 $ 3,852,411 $ 3,472,472 |
Schedule of Investments Held in an Unrealized Loss Position | The following tables provide summarized information with respect to investments held in an unrealized loss position at December 31, 2022 and December 31, 2021, including the length of time the investment had been held in a continuous unrealized loss position. December 31, 2022 Total Less than 12 months 12 months or longer Fair Unrealized Fair Unrealized Fair Unrealized (In thousands) Value Loss Value Loss Value Loss Fixed maturities, available-for-sale U.S. Treasury obligations $ 220,991 $ 22,399 $ 53,199 $ 2,393 $ 167,792 $ 20,006 U.S. Government-sponsored enterprise obligations 19,934 1,628 8,082 663 11,852 965 State and municipal bonds 421,769 44,311 177,393 12,352 244,376 31,959 Corporate debt 1,708,529 199,862 687,947 42,977 1,020,582 156,885 Residential mortgage-backed securities 363,945 61,656 155,212 15,275 208,733 46,381 Agency commercial mortgage-backed securities 9,704 872 3,086 110 6,618 762 Other commercial mortgage-backed securities 192,359 22,994 53,270 4,087 139,089 18,907 Other asset-backed securities 396,452 27,617 162,192 7,050 234,260 20,567 $ 3,333,683 $ 381,339 $ 1,300,381 $ 84,907 $ 2,033,302 $ 296,432 December 31, 2021 Total Less than 12 months 12 months or longer Fair Unrealized Fair Unrealized Fair Unrealized (In thousands) Value Loss Value Loss Value Loss Fixed maturities, available-for-sale U.S. Treasury obligations $ 190,054 $ 2,424 $ 181,689 $ 2,206 $ 8,365 $ 218 U.S. Government-sponsored enterprise obligations 16,287 262 16,287 262 — — State and municipal bonds 175,442 2,174 171,930 2,039 3,512 135 Corporate debt 945,196 14,949 866,731 11,828 78,465 3,121 Residential mortgage-backed securities 326,248 5,751 290,019 4,320 36,229 1,431 Agency commercial mortgage-backed securities 4,529 62 4,355 54 174 8 Other commercial mortgage-backed securities 151,827 2,273 145,467 1,884 6,360 389 Other asset-backed securities 278,915 2,920 271,463 2,796 7,452 124 $ 2,088,498 $ 30,815 $ 1,947,941 $ 25,389 $ 140,557 $ 5,426 |
Schedule of a Roll Forward of Cumulative Credit Losses Recorded in Earnings Related to Impaired Debt Securities | The following tables present a roll forward of the allowance for expected credit losses on available-for-sale fixed maturities for the years ended December 31, 2022 and 2021. Year Ended December 31, 2022 (In thousands) Corporate Debt Residential mortgage-backed securities Other asset-backed securities Total Balance, at December 31, 2021 $ — $ — $ — $ — Additional credit losses related to securities for which: No allowance for credit losses has been previously recognized 553 229 198 980 Reductions related to: Securities for which there is an intent to sell or will more likely than not be sold before recovery of its amortized cost (553) — — (553) Balance, at December 31, 2022 $ — $ 229 $ 198 $ 427 Year Ended December 31, 2021 (In thousands) Corporate Debt Total Balance, at December 31, 2020 $ 552 $ 552 Reductions related to: Securities sold during the period (552) (552) Balance, at December 31, 2021 $ — $ — The following table presents a roll forward of cumulative credit losses recorded in earnings related to impaired debt securities for which a portion of the impairment was recorded in OCI. Year Ended December 31 (In thousands) 2022 2021 2020 Balance beginning of period $ — $ 552 $ 470 Additional credit losses recognized during the period, related to securities for which: No impairment has been previously recognized 610 — 1,064 Impairment has been previously recognized — — 258 Reductions due to: Securities sold during the period (realized) — (552) (1,240) Securities for which there is an intent to sell or will more likely than not be sold before recovery of amortized cost (553) — — Balance December 31 $ 57 $ — $ 552 |
Schedule of Other Information Regarding Available-For-Sale Securities | Other information regarding sales and purchases of fixed maturity available-for-sale securities is as follows: Year Ended December 31 (In millions) 2022 2021 2020 Proceeds from sales (exclusive of maturities and paydowns) $ 131.0 $ 504.0 $ 354.4 Purchases $ 607.8 $ 1,438.2 $ 917.0 |
Schedule of Net Investment Income | Net investment income by investment category was as follows: Year Ended December 31 (In thousands) 2022 2021 2020 Fixed maturities $ 93,736 $ 74,437 $ 69,308 Equities 3,706 2,539 4,369 Short-term investments, including Other 5,681 1,969 2,683 BOLI 1,141 2,698 2,023 Investment fees and expenses (8,292) (11,121) (6,385) Net investment income $ 95,972 $ 70,522 $ 71,998 |
Schedule of Investment in Unconsolidated Subsidiaries | ProAssurance's investment in unconsolidated subsidiaries were as follows: December 31, 2022 Carrying Value (In thousands) Percentage December 31, December 31, Qualified affordable housing project tax credit partnerships See below $ 4,088 $ 12,424 All other investments, primarily investment fund LPs/LLCs See below 301,122 323,152 $ 305,210 $ 335,576 |
Schedule of Equity Method Investments | The results recorded and tax credits recognized related to ProAssurance's tax credit partnership investments were as follows: Year Ended December 31 (In thousands) 2022 2021 2020 Qualified affordable housing project tax credit partnerships Losses recorded $ 8,278 $ 15,239 $ 18,684 Tax credits recognized $ 4,805 $ 13,160 $ 17,465 Historic tax credit partnership* Losses (gains) recorded $ (1,212) $ (182) $ 1,092 Tax credits recognized $ — $ — $ 412 *ProAssurance holds a historic tax credit partnership which was fully amortized in 2020. This partnership generated investment returns by providing benefits to partnership investors in the form of tax credits, tax deductible project operating losses and distributions resulting from positive cash flows. ProAssurance received a distribution associated with this investment during the second quarter of 2022 and the first quarter of 2021, as a result of positive cash flows from a completed project, which was recognized as an operating gain in each respective period. Balance Sheet Information (In thousands) September 30, 2022 September 30, 2021 Total assets $ 2,727,876 $ 3,544,866 Total liabilities $ 140,157 $ 230,133 Total partners' capital $ 2,587,719 $ 3,314,733 Income Statement Information (In thousands) Year Ended September 30 2022 2021 2020 Net investment income (loss) $ 13,009 $ 2,506 $ (16,557) Net investment gains (losses) 47,824 219,089 655 Net change in unrealized appreciation (depreciation) 135,218 490,761 123,942 Operating Expenses 4,870 6,527 7,528 Net gain (loss) $ 191,181 $ 705,829 $ 100,512 Net gain (loss) attributable to ProAssurance (1) $ (375) $ 10,171 $ (8,296) (1) Represents ProAssurance's share of the funds' aggregate income or loss, which is included as a component of equity in earnings (loss) of unconsolidated subsidiaries in its Consolidated Statements of Income and Comprehensive Income for the year ended December 31, 2022 and 2021. |
Schedule of Net Realized Investment Gains (Losses) | The following table provides detailed information regarding net investment gains (losses): Year Ended December 31 (In thousands) 2022 2021 2020 Total impairment losses: Corporate debt $ (1,331) $ — $ (1,745) Asset-backed securities (441) — — Portion of impairment losses recognized in other comprehensive income before taxes: Corporate debt — — 237 Asset-backed securities 14 — — Net impairment losses recognized in earnings (1,758) — (1,508) Gross realized gains, available-for-sale fixed maturities 1,740 14,311 13,855 Gross realized (losses), available-for-sale fixed maturities (3,387) (1,218) (2,501) Net realized gains (losses), trading fixed maturities (155) (20) 288 Net realized gains (losses), equity investments (5,252) 7,337 13,192 Net realized gains (losses), other investments (222) 8,660 3,883 Change in unrealized holding gains (losses), trading fixed maturities (613) (529) 501 Change in unrealized holding gains (losses), equity investments (22,166) (2,941) (16,287) Change in unrealized holding gains (losses), convertible securities, carried at fair value (10,557) (1,701) 3,850 Other (1) 9,213 411 405 Net investment gains (losses) $ (33,157) $ 24,310 $ 15,678 (1) Includes a gain of $9.0 million recognized during the fourth quarter of 2022 reflecting the change in the fair value of contingent consideration issued in connection with the NORCAL acquisition. See further discussion on the contingent consideration in Note 2 and Note 3. |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Schedule of the Effect of Reinsurance on Premiums Written and Earned | The effects of reinsurance for the years ended December 31, 2022, 2021 and 2020 were as follows: Year Ended December 31 (In thousands) 2022 2021 2020 Direct $ 1,048,690 $ 912,387 $ 814,298 Assumed 55,304 47,637 40,124 Ceded (89,857) (77,303) (106,721) Net premiums written $ 1,014,137 $ 882,721 $ 747,701 Direct $ 1,058,263 $ 1,020,107 $ 862,742 Assumed 56,175 45,559 43,555 Ceded (84,857) (93,998) (113,582) Net premiums earned $ 1,029,581 $ 971,668 $ 792,715 Losses and loss adjustment expenses $ 839,717 $ 798,893 $ 741,719 Reinsurance recoveries (62,955) (46,644) (80,272) Net losses and loss adjustment expenses $ 776,762 $ 752,249 $ 661,447 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Tax Assets and Liabilities | Significant components of ProAssurance’s deferred tax assets and liabilities were as follows: December 31 (In thousands) 2022 2021 Deferred tax assets Unpaid loss discount $ 48,735 $ 51,562 Unearned premium adjustment 22,188 22,846 Compensation related 12,285 18,575 Unrealized losses on investments, net 80,422 — Basis differentials-investments 2,962 — Intangibles 9,681 13,915 Operating lease liabilities 4,124 4,290 Tax credit carryforward 53,240 48,701 Net operating loss carryforward 27,891 18,596 Other 815 909 Total gross deferred tax assets 262,343 179,394 Valuation allowance (18,384) (8,945) Total deferred tax assets, net of valuation allowance 243,959 170,449 Deferred tax liabilities Deferred policy acquisition costs (12,511) (12,284) Unpaid loss discount-transition (5,270) (7,276) Unrealized gains on investments, net — (4,100) Fixed assets (3,865) (4,013) Operating lease ROU assets (3,911) (4,030) Basis differentials-investments — (11,277) Basis differentials-foreign operations (928) (828) Intangibles (7,939) (9,028) Total deferred tax liabilities (34,424) (52,836) Net deferred tax assets (liabilities) $ 209,535 $ 117,613 |
Schedule of Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits for 2022, 2021 and 2020, were as follows: (In thousands) 2022 2021 2020 Balance at January 1 $ 3,020 $ 5,199 $ 5,070 Decreases for tax positions taken during the current year (99) (1,630) (4,853) Increases for tax positions taken during prior years 1,839 — 5,342 Decreases relating to a lapse of the applicable statute of limitations (1,137) (549) (360) Balance at December 31 $ 3,623 $ 3,020 $ 5,199 |
Schedule of Components of Tax Expense | Income tax expense (benefit) for each of the years ended December 31, 2022, 2021 and 2020 consisted of the following: (In thousands) 2022 2021 2020 Provision for income taxes: Current expense (benefit) Federal and foreign $ 793 $ 885 $ (19,885) State 14 279 (296) Total current expense (benefit) 807 1,164 (20,181) Deferred expense (benefit) Federal and foreign (6,826) 1,290 (20,476) State 205 29 (672) Total deferred expense (benefit) (6,621) 1,319 (21,148) Total income tax expense (benefit) $ (5,814) $ 2,483 $ (41,329) |
Schedule of Reconciliation of Expected Income Tax Expense to Actual Income Tax Expense | A reconciliation of “expected” federal income tax expense (benefit) to actual income tax expense (benefit) for each of the years ended December 31, 2022, 2021 and 2020 were as follows: (In thousands) 2022 2021 2020 Computed “expected” tax expense (benefit) $ (1,305) $ 30,787 $ (45,582) Tax-exempt income (1) (1,072) (1,298) (976) Tax credits (4,805) (13,160) (17,876) Non-U.S. operating results (411) (1,322) (1,307) Tax deficiency (excess tax benefit) on share-based compensation 309 286 457 Tax rate differential on loss carryback (2) — — (7,758) Goodwill impairment (3) — — 31,413 Change in limitation of future deductibility of certain executive compensation 708 303 75 Non-taxable gain on bargain purchase (4) — (15,626) — Non-taxable contingent consideration (5) (1,890) — — GILTI and subpart F income 556 721 800 Provision-to-return and other differences 1,112 3,574 1,217 Change in uncertain tax positions 780 (1,909) (1,674) State income taxes 105 460 (561) Other 99 (333) 443 Total income tax expense (benefit) $ (5,814) $ 2,483 $ (41,329) (1) Includes tax-exempt interest, dividends received deduction and change in cash surrender value of BOLI. (2) The tax rate differential on loss carryback for the year ended December 31, 2020 represents the additional tax rate differential of 14% on the carryback of the 2020 and 2019 NOLs to the 2015 and 2014 tax years, respectively, as a result of changes made by the CARES Act to the NOL provisions of the tax law (see further discussion in this section under the heading "Coronavirus Aid, Relief and Economic Security Act"). (3) Represents the tax impact of the impairment of non-deductible goodwill in relation to the Specialty P&C reporting unit during the third quarter of 2020. Of the $161.1 million goodwill impairment, $149.6 million was non-deductible for which no tax benefit was recognized while the remaining $11.5 million was deductible for which a 21% tax benefit was recognized on the related tax amortization (see further discussion on the impairment charge in Note 7). (4) Represents the tax impact of the non-taxable gain on bargain purchase as a result of the Company's acquisition of NORCAL on May 5, 2021. See further discussion on the gain on bargain purchase in Note 2. (5) Represents the tax impact of the change in the fair value of contingent consideration issued in connection with the NORCAL acquisition, all of which is non-taxable. See further discussion on the contingent consideration in Note 2 and Note 3 of the Notes to Consolidated Financial Statements. |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The table below presents the carrying amount of goodwill and accumulated impairment losses by reporting unit at December 31, 2022 and 2021: Reporting Unit (In thousands) Specialty P&C Workers' Compensation Insurance Segregated Portfolio Cell Reinsurance Total Goodwill, gross as of January 1, 2021 $ — $ 44,110 $ 5,500 $ 49,610 Accumulated impairment losses — — — — Goodwill, net as of December 31, 2021 $ — $ 44,110 $ 5,500 $ 49,610 Accumulated impairment losses — — — — Goodwill, net as of December 31, 2022 $ — $ 44,110 $ 5,500 $ 49,610 |
Reserve for Losses and Loss A_2
Reserve for Losses and Loss Adjustment Expenses (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Schedule of Reserve for Losses and Loss Adjustment Expenses | Activity in the reserve for losses and loss adjustment expenses is summarized as follows: (In thousands) 2022 2021 2020 Balance, beginning of year $ 3,579,940 $ 2,417,179 $ 2,346,526 Less reinsurance recoverables on unpaid losses and loss adjustment expenses 451,741 385,087 390,708 Net balance, beginning of year 3,128,199 2,032,092 1,955,818 Net reserves acquired from acquisitions — 1,089,103 — Net losses: Current year (1)(3) 813,515 797,732 711,846 Favorable development of reserves established in prior years, net (2) (36,753) (45,483) (50,399) Total 776,762 752,249 661,447 Paid related to: Current year (4) (108,139) (109,925) (83,204) Prior years (4) (757,564) (635,320) (501,969) Total paid (865,703) (745,245) (585,173) Net balance, end of year 3,039,258 3,128,199 2,032,092 Plus reinsurance recoverables on unpaid losses and loss adjustment expenses 431,889 451,741 385,087 Balance, end of year $ 3,471,147 $ 3,579,940 $ 2,417,179 (1) Current year net losses for the years ended December 31, 2022 and 2021 included $4.9 million and $6.7 million, respectively, of purchase accounting amortization of the negative VOBA associated with NORCAL's assumed unearned premium, which was amortized over a period in proportion to the earn-out of the associated premium as a reduction to current accident year net losses (see Note 2). As of June 30, 2022, the negative VOBA was fully amortized. (2) Net favorable prior year reserve development recognized for the years ended December 31, 2022 and 2021 included $10.8 million and $7.9 million, respectively, of amortization of the purchase accounting fair value adjustment on NORCAL's assumed net reserve and amortization of the negative VOBA associated with NORCAL's DDR reserve which is recorded as a reduction to prior accident year net losses and loss adjustment expenses (see Note 2). Net favorable prior accident year reserve development recognized in 2022 included favorable development related to NORCAL's 2021 accident year. ProAssurance has not recognized any development related to NORCAL's accident years 2020 or prior since the date of acquisition on May 5, 2021. (3) During 2020, a large national healthcare account did not renew on terms offered by the Company and exercised its contractual option to purchase extended reporting endorsement or "tail" coverage. As a result, ProAssurance recognized total current year losses of $60.0 million (assumes a full limit loss) within the Specialty P&C segment for the year ended December 31, 2020. (4) Paid losses for the years ended December 31, 2022 and 2021 included prior year paid losses of $262.5 million and $136.0 million, respectively, and current year paid losses of $16.6 million and $22.3 million, respectively, related to reserves acquired from NORCAL since May 5, 2021. |
Schedule of Short-Duration Insurance Contracts Claims Development | ProAssurance has elected to present reserve history for NORCAL in all periods shown in the Healthcare Professional Liability tables below, including periods prior to acquisition. Healthcare Professional Liability Claims-Made Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2022 ($ in thousands) Year Ended December 31, 2022 IBNR* Cumulative Number of Reported Claims 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 527,520 $ 513,937 $ 501,580 $ 489,378 $ 480,036 $ 466,798 $ 451,182 $ 455,346 $ 457,038 $ 455,583 $ (29) 7,699 2014 — $ 509,774 $ 494,024 $ 491,403 $ 488,185 $ 474,317 $ 468,153 $ 470,189 $ 466,554 464,976 $ 566 7,523 2015 — — $ 503,412 $ 486,760 $ 492,824 $ 491,180 $ 500,336 $ 500,550 $ 503,600 503,628 $ (4,337) 7,409 2016 — — — $ 484,153 $ 488,349 $ 507,586 $ 555,416 $ 554,395 $ 560,840 557,097 $ (542) 7,986 2017 — — — — $ 508,072 $ 506,207 $ 577,401 $ 569,737 $ 573,570 557,620 $ (14,294) 8,067 2018 — — — — — $ 544,617 $ 643,864 $ 630,169 $ 636,023 642,948 $ (62,313) 8,478 2019 — — — — — — $ 670,958 $ 664,934 $ 642,370 646,676 $ (22,209) 8,452 2020 — — — — — — — $ 593,994 $ 574,274 557,651 $ (21,795) 6,689 2021 — — — — — — — — $ 527,718 524,468 $ 78,103 5,289 2022 — — — — — — — — — 464,069 $ 269,309 4,626 Total $ 5,374,716 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 30,214 $ 142,759 $ 255,605 $ 328,982 $ 376,930 $ 398,549 $ 415,012 $ 430,916 $ 435,158 $ 439,029 2014 — $ 30,483 $ 125,078 $ 246,510 $ 325,782 $ 389,983 $ 416,150 $ 434,540 $ 439,575 446,402 2015 — — $ 26,664 $ 125,234 $ 256,791 $ 351,703 $ 410,506 $ 446,069 $ 463,224 476,664 2016 — — — $ 27,442 $ 137,338 $ 276,548 $ 378,828 $ 440,163 $ 472,441 499,431 2017 — — — — $ 32,342 $ 147,515 $ 288,695 $ 351,548 $ 419,180 467,423 2018 — — — — — $ 34,238 $ 159,657 $ 279,204 $ 367,522 450,952 2019 — — — — — — $ 37,755 $ 144,225 $ 259,889 364,411 2020 — — — — — — — $ 32,270 $ 117,153 234,804 2021 — — — — — — — — $ 23,494 110,483 2022 — — — — — — — — — 24,792 Total 3,514,391 All outstanding liabilities before 2013, net of reinsurance 19,514 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 1,879,839 Healthcare Professional Liability Occurrence Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2022 ($ in thousands) Year Ended December 31, 2022 IBNR* Cumulative Number of Reported Claims 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 51,996 $ 54,143 $ 49,970 $ 53,905 $ 56,640 $ 50,632 $ 49,270 $ 47,550 $ 48,116 $ 47,144 $ 998 640 2014 — $ 45,975 $ 43,606 $ 44,075 $ 40,699 $ 37,653 $ 34,428 $ 33,353 $ 35,139 35,839 $ 1,179 543 2015 — — $ 52,531 $ 54,890 $ 56,621 $ 57,606 $ 52,455 $ 51,276 $ 56,468 61,198 $ 391 615 2016 — — — $ 56,089 $ 49,795 $ 53,358 $ 56,345 $ 66,886 $ 64,122 68,674 $ 2,300 710 2017 — — — — $ 45,463 $ 42,338 $ 40,983 $ 44,449 $ 46,865 50,652 $ 4,283 743 2018 — — — — — $ 59,351 $ 61,880 $ 63,576 $ 73,599 74,419 $ 1,388 709 2019 — — — — — — $ 63,548 $ 58,555 $ 70,926 86,543 $ 6,155 827 2020 — — — — — — — $ 165,955 $ 178,804 181,643 $ 79,785 1,641 2021 — — — — — — — — $ 82,590 81,254 $ 47,133 422 2022 — — — — — — — — — 82,436 $ 78,046 135 Total $ 769,802 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 539 $ 4,620 $ 12,130 $ 25,131 $ 30,474 $ 37,778 $ 40,775 $ 42,455 $ 43,254 $ 44,419 2014 — $ 512 $ 4,674 $ 11,192 $ 17,349 $ 22,649 $ 25,671 $ 27,753 $ 30,407 31,285 2015 — — $ (180) $ 2,617 $ 9,953 $ 20,627 $ 28,482 $ 36,413 $ 41,800 52,017 2016 — — — $ 44 $ 2,750 $ 15,433 $ 28,362 $ 40,766 $ 48,691 54,324 2017 — — — — $ (6,631) $ (3,385) $ 3,592 $ 11,051 $ 19,696 30,489 2018 — — — — — $ 444 $ 6,193 $ 15,229 $ 26,932 37,828 2019 — — — — — — $ 628 $ 4,575 $ 10,399 26,359 2020 — — — — — — — $ 397 $ 6,194 21,100 2021 — — — — — — — — $ 762 4,335 2022 — — — — — — — — — 675 Total 302,831 All outstanding liabilities before 2013, net of reinsurance 5,095 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 472,066 Medical Technology Liability Claims-Made Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2022 ($ in thousands) Year Ended December 31, 2022 IBNR* Cumulative Number of Reported Claims 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 9,807 $ 9,955 $ 9,536 $ 7,226 $ 4,697 $ 3,566 $ 3,504 $ 3,305 $ 3,199 $ 3,164 $ 60 218 2014 — $ 9,989 $ 10,306 $ 9,012 $ 8,984 $ 7,679 $ 6,194 $ 5,888 $ 5,636 5,472 $ 242 272 2015 — — $ 9,376 $ 8,757 $ 7,193 $ 5,929 $ 5,081 $ 4,664 $ 4,192 3,499 $ 75 156 2016 — — — $ 9,200 $ 8,467 $ 7,413 $ 6,422 $ 6,241 $ 4,491 5,145 $ 689 182 2017 — — — — $ 11,049 $ 10,143 $ 8,306 $ 4,919 $ 3,381 5,351 $ 1,278 98 2018 — — — — — $ 10,141 $ 8,108 $ 7,506 $ 4,961 4,646 $ 794 218 2019 — — — — — — $ 10,072 $ 8,324 $ 9,588 7,658 $ 1,272 361 2020 — — — — — — — $ 11,082 $ 10,671 9,150 $ 6,637 178 2021 — — — — — — — — $ 13,914 11,909 $ 9,562 174 2022 — — — — — — — — — 15,014 $ 14,733 159 Total $ 71,008 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 102 $ 1,029 $ 1,967 $ 2,599 $ 3,092 $ 3,102 $ 3,102 $ 3,102 $ 3,101 $ 3,102 2014 — $ 388 $ 1,527 $ 2,564 $ 3,046 $ 3,724 $ 3,776 $ 4,074 $ 4,076 4,076 2015 — — $ 25 $ 440 $ 1,625 $ 2,097 $ 2,567 $ 2,911 $ 2,987 2,989 2016 — — — $ 53 $ 1,690 $ 2,365 $ 2,959 $ 4,295 $ 4,342 4,383 2017 — — — — $ 56 $ 1,681 $ 2,017 $ 2,360 $ 2,867 4,073 2018 — — — — — $ 6 $ 191 $ 1,850 $ 2,651 3,065 2019 — — — — — — $ 584 $ 2,552 $ 3,902 5,321 2020 — — — — — — — $ 40 $ 526 1,034 2021 — — — — — — — — $ 4 384 2022 — — — — — — — — — 24 Total 28,451 All outstanding liabilities before 2013, net of reinsurance 36 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 42,593 Workers' Compensation Insurance Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2022 ($ in thousands) Year Ended December 31, 2022 IBNR* Cumulative Number of Reported Claims 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 86,973 $ 85,935 $ 86,928 $ 88,010 $ 87,260 $ 87,260 $ 89,760 $ 89,560 $ 88,930 $ 88,557 $ — 16,429 2014 — $ 93,019 $ 93,529 $ 93,029 $ 93,029 $ 93,029 $ 93,029 $ 91,329 $ 90,532 89,639 $ — 16,210 2015 — — $ 100,101 $ 100,454 $ 98,454 $ 97,654 $ 96,354 $ 93,054 $ 91,840 90,547 $ — 16,551 2016 — — — $ 101,348 $ 97,348 $ 92,148 $ 84,799 $ 82,799 $ 80,751 78,808 $ — 15,979 2017 — — — — $ 99,874 $ 99,874 $ 99,874 $ 97,874 $ 95,674 92,715 $ 311 16,085 2018 — — — — — $ 118,095 $ 118,095 $ 120,095 $ 120,095 120,056 $ 1,567 18,016 2019 — — — — — — $ 115,852 $ 115,852 $ 115,352 112,534 $ 1,481 17,527 2020 — — — — — — — $ 102,475 $ 102,475 101,621 $ 2,785 14,526 2021 — — — — — — — — $ 105,722 108,722 $ 4,913 15,479 2022 — — — — — — — — — 104,675 $ 29,086 14,763 Total $ 987,874 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 30,554 $ 63,825 $ 76,813 $ 82,369 $ 85,689 $ 86,783 $ 87,466 $ 87,772 $ 88,033 $ 88,074 2014 — $ 30,368 $ 65,922 $ 77,631 $ 85,022 $ 87,314 $ 87,998 $ 88,487 $ 88,977 89,081 2015 — — $ 32,078 $ 65,070 $ 78,947 $ 83,483 $ 86,528 $ 87,884 $ 88,476 89,089 2016 — — — $ 28,377 $ 58,192 $ 69,237 $ 74,886 $ 76,954 $ 77,546 77,265 2017 — — — — $ 31,586 $ 70,333 $ 82,289 $ 87,129 $ 88,504 88,953 2018 — — — — — $ 41,619 $ 86,063 $ 104,216 $ 110,928 114,525 2019 — — — — — — $ 40,994 $ 84,108 $ 100,373 105,724 2020 — — — — — — — $ 32,447 $ 74,532 90,174 2021 — — — — — — — — $ 39,634 81,499 2022 — — — — — — — — — 38,734 Total 863,118 All outstanding liabilities before 2013, net of reinsurance 12,558 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 137,314 Segregated Portfolio Cell Reinsurance - Workers' Compensation Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance December 31, 2022 ($ in thousands) Year Ended December 31, 2022 IBNR* Cumulative Number of Reported Claims 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 23,809 $ 25,310 $ 26,758 $ 26,619 $ 26,260 $ 26,033 $ 25,938 $ 25,546 $ 25,450 $ 25,445 $ 3 3,723 2014 — $ 28,248 $ 28,423 $ 29,000 $ 28,373 $ 28,281 $ 27,919 $ 27,482 $ 27,360 27,361 $ 69 4,433 2015 — — $ 36,423 $ 32,519 $ 28,746 $ 27,548 $ 26,720 $ 26,121 $ 25,566 25,575 $ 130 4,949 2016 — — — $ 37,601 $ 34,055 $ 30,998 $ 29,424 $ 28,437 $ 28,411 28,175 $ 304 5,327 2017 — — — — $ 42,725 $ 38,594 $ 34,246 $ 32,879 $ 32,763 32,514 $ 290 5,707 2018 — — — — — $ 43,654 $ 41,283 $ 40,017 $ 38,569 38,197 $ 1,145 6,341 2019 — — — — — — $ 48,505 $ 42,345 $ 38,815 37,490 $ 1,271 6,155 2020 — — — — — — — $ 40,094 $ 38,602 36,107 $ 1,923 5,795 2021 — — — — — — — — $ 39,510 37,185 $ 4,937 5,181 2022 — — — — — — — — — 37,978 $ 13,599 4,621 Total $ 326,027 * Includes expected development on reported claims Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance (In thousands) Year Ended December 31, 2022 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Accident Year Unaudited 2013 $ 8,131 $ 19,054 $ 24,268 $ 25,209 $ 25,366 $ 25,489 $ 25,440 $ 25,442 $ 25,442 $ 25,442 2014 — $ 9,933 $ 21,880 $ 26,173 $ 26,810 $ 26,959 $ 27,083 $ 27,110 $ 27,119 27,127 2015 — — $ 11,257 $ 21,706 $ 23,977 $ 24,781 $ 25,033 $ 25,125 $ 25,144 25,266 2016 — — — $ 10,980 $ 23,003 $ 26,285 $ 27,162 $ 27,211 $ 27,585 27,583 2017 — — — — $ 12,404 $ 24,791 $ 28,853 $ 31,140 $ 31,631 31,875 2018 — — — — — $ 12,517 $ 27,501 $ 33,236 $ 35,575 36,010 2019 — — — — — — $ 15,100 $ 29,604 $ 33,314 34,829 2020 — — — — — — — $ 11,238 $ 26,626 30,680 2021 — — — — — — — — $ 12,465 26,495 2022 — — — — — — — — — 13,420 Total 278,727 All outstanding liabilities before 2013, net of reinsurance 480 Liabilities for losses and loss adjustment expenses, net of reinsurance $ 47,780 |
Schedule of Historical Claims Duration | Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Unaudited Healthcare Professional Liability Claims-Made 5.6% 19.2% 23.1% 15.9% 12.0% 6.4% 4.0% 2.4% 1.2% 0.8% Healthcare Professional Liability Occurrence (0.7%) 6.1% 13.2% 18.6% 14.8% 13.9% 7.3% 9.2% 2.1% 2.5% Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Unaudited Medical Technology Liability 2.1 % 18.0 % 20.1 % 13.7 % 14.3 % 6.9 % 2.1 % — % — % — % Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Unaudited Workers' Compensation Insurance 35.0 % 38.7 % 14.4 % 6.0 % 2.8 % 0.9 % 0.4 % 0.5 % 0.2 % — % Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Unaudited Segregated Portfolio Cell Reinsurance - workers' compensation 36.2 % 40.7 % 13.2 % 4.3 % 0.7 % 0.7 % — % 0.2 % — % — % |
Schedule of Reconciliation of Claims Development to Liability | Below is a reconciliation of the claims development information to the Consolidated Balance Sheet: (In thousands) December 31, 2022 Net outstanding liabilities Healthcare Professional Liability claims-made $ 1,879,839 Healthcare Professional Liability occurrence 472,066 Medical Technology Liability claims-made 42,593 Workers' Compensation Insurance 137,314 Segregated Portfolio Cell Reinsurance - workers' compensation 47,780 Other short-duration lines 177,382 Liabilities for losses and loss adjustment expenses, net of reinsurance 2,756,974 Reinsurance recoverable on unpaid losses Healthcare Professional Liability claims-made 251,223 Healthcare Professional Liability occurrence 38,299 Medical Technology Liability claims-made 33,625 Workers' Compensation Insurance 38,733 Segregated Portfolio Cell Reinsurance - Workers' Compensation 24,946 Other short-duration lines 45,063 Total reinsurance recoverable on unpaid losses and loss adjustment expenses 431,889 Reserve for the future utilization of the DDR benefit 110,496 Unallocated loss adjustment expenses 143,026 Loss portfolio transfer (1) 5,423 Purchase accounting adjustments (2) 23,442 Other (103) 282,284 Gross liability for losses and loss adjustment expenses $ 3,471,147 (1) Represents the reserve for retroactive coverages, net of any applicable deferred gains, related to the loss portfolio transfer entered into during 2019. (2) Represents the remaining unamortized fair value adjustment on the net reserve for losses and loss adjustment expenses, the negative net VOBA recorded on the assumed unearned premium and negative VOBA recorded on the DDR reserve associated with the Company's acquisition of NORCAL (see Note 2 for additional information). |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Lease Cost | The following table provides a summary of the components of net lease expense as well as the reporting location in the Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2022, 2021 and 2020. (In thousands) Location in the Consolidated Statements of Income and Comprehensive Income Year Ended December 31 2022 2021 2020 Operating lease expense (1) Operating expense $ 5,395 $ 5,047 $ 4,355 Sublease income (2) Other income (469) (263) (143) Net lease expense $ 4,926 $ 4,784 $ 4,212 (1) Includes short-term lease costs and variable lease costs, if applicable. For the years ended December 31, 2022, 2021 and 2020, no short-term lease costs were recognized and variable lease costs were nominal in amount. (2) Sublease income excludes rental income from owned properties of $2.6 million during the year ended December 31, 2022 and $2.5 million during each of the years ended December 31, 2021 and 2020 which is included in other income. See “Item 2. Properties” for a listing of currently owned properties. The following table provides supplemental lease information for operating leases on the Consolidated Balance Sheet as of December 31, 2022 and December 31, 2021. Year Ended December 31 ($ in thousands) 2022 2021 Operating lease ROU assets $ 18,987 $ 19,595 Operating lease liabilities $ 20,008 $ 20,844 Weighted-average remaining lease term 7.37 years 7.05 years Weighted-average discount rate 3.22 % 2.84 % The following table provides supplemental lease information for the Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020. Year Ended December 31 (In thousands) 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,574 $ 5,775 $ 4,221 |
Schedule of Lease Liability | The following table is a schedule of remaining future minimum lease payments for operating leases that had an initial or remaining non-cancellable lease term in excess of one year as of December 31, 2022. (In thousands) 2023 $ 4,573 2024 3,127 2025 2,577 2026 2,310 2027 2,314 Thereafter 7,613 Total future minimum lease payments 22,514 Less: Imputed interest 2,506 Total operating lease liabilities $ 20,008 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | ProAssurance’s outstanding debt consisted of the following: ($ in thousands) December 31, December 31, Senior Notes due 2023, unsecured, interest at 5.3% annually $ 250,000 $ 250,000 Contribution Certificates due 2031, interest at 3.0% (effective interest rate at 4.35%) paid annually beginning April 2022 177,525 175,900 Total principal 427,525 425,900 Less unamortized debt issuance costs 542 914 Debt less unamortized debt issuance costs $ 426,983 $ 424,986 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Common Stock Outstanding | The following is a summary of changes in common shares issued and outstanding during the years ended December 31, 2022, 2021 and 2020: (In thousands) 2022 2021 2020 Issued and outstanding shares - January 1 53,984 53,893 53,792 Repurchase of shares, at cost of $3.3 million for 2022 (139) — — Shares issued due to vesting of share-based compensation awards 66 46 54 Other shares issued for compensation * 53 45 47 Issued and outstanding shares - December 31 53,964 53,984 53,893 * Shares issued were valued at fair value (the market price of a ProAssurance common share on the date of issue). |
Schedule of Dividends Declared | ProAssurance declared cash dividends during 2022, 2021 and 2020 as follows: Cash Dividends Declared, per Share 2022 2021 2020 First Quarter $ 0.05 $ 0.05 $ 0.31 Second Quarter $ 0.05 $ 0.05 $ 0.05 Third Quarter $ 0.05 $ 0.05 $ 0.05 Fourth Quarter $ 0.05 $ 0.05 $ 0.05 |
Schedule of AOCI, Net of Tax | or the year ended December 31, 2020. The changes in the balance of each component of AOCI for the years ended December 31, 2022, 2021 and 2020 were as follows: (In thousands) Unrealized Investment Gains (Losses) Non-credit Impairments Unrecognized Change in Defined Benefit Plan Liabilities (1) Accumulated Other Comprehensive Income (Loss) Balance, December 31, 2021 $ 14,929 $ — $ 1,355 $ 16,284 OCI, before reclassifications, net of tax (314,822) (342) (2,746) (317,910) Amounts reclassified from AOCI, net of tax 2,751 331 (63) 3,019 Net OCI, current period (312,071) (11) (2,809) (314,891) Balance, December 31, 2022 $ (297,142) $ (11) $ (1,454) $ (298,607) (In thousands) Unrealized Investment Gains (Losses) Non-credit Impairments Unrecognized Change in Defined Benefit Plan Liabilities (1)(2) Accumulated Other Comprehensive Income (Loss) Balance, December 31, 2020 $ 75,388 $ (57) $ (104) $ 75,227 OCI, before reclassifications, net of tax (50,242) — 1,406 (48,836) Amounts reclassified from AOCI, net of tax (10,217) 57 53 (10,107) Net OCI, current period (60,459) 57 1,459 (58,943) Balance, December 31, 2021 $ 14,929 $ — $ 1,355 $ 16,284 (In thousands) Unrealized Investment Gains (Losses) Non-credit Impairments Unrecognized Change in Defined Benefit Plan Liabilities (2) Accumulated Other Comprehensive Income (Loss) Balance, December 31, 2019 $ 37,333 $ (300) $ (78) $ 36,955 OCI, before reclassifications, net of tax 46,383 (187) (26) 46,170 Amounts reclassified from AOCI, net of tax (8,328) 430 — (7,898) Net OCI, current period 38,055 243 (26) 38,272 Balance, December 31, 2020 $ 75,388 $ (57) $ (104) $ 75,227 (1) As a result of the NORCAL acquisition, the Company sponsors another frozen defined benefit plan and recorded a nominal net actuarial gain, net of tax, included in AOCI as of December 31, 2022 as compared to a net actuarial gain of $0.2 million, net of tax, included in AOCI as of December 31, 2021. (2) The Company terminated Eastern's defined benefit plan, effective September 30, 2021, resulting in a settlement of the liabilities under the plan and the net loss previously reflected in AOCI being recognized in earnings for the year ended December 31, 2021. For the year ended December 31, 2020, the unrecognized change in defined benefit plan liabilities represents the reestimation of the defined benefit plan liability assumed in the Eastern acquisition. The defined benefit plan was frozen as to the earnings of additional benefits and the benefit plan liability was reestimated annually. |
Share-Based Payments (Tables)
Share-Based Payments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Compensation Expense and Related Tax Benefit Recognized During Each Period, and Compensation Cost Expense in Future Periods | The following table provides a summary of compensation expense and the total related tax benefit recognized during each period as well as estimated compensation cost that will be charged to expense in future periods. Share-Based Unrecognized Compensation Cost Year Ended December 31 December 31, 2022 ($ in millions, except remaining recognition period) 2022 2021 2020 Amount Weighted Average Remaining Total share-based compensation expense $ 4.8 $ 4.4 $ 3.8 $ 6.5 1.7 Tax benefit recognized $ 1.0 $ 0.9 $ 0.8 |
Schedule of Activity for Restricted Share Units | Activity for restricted share units during 2022, 2021 and 2020 is summarized below. Grant date fair values are based on the market value of a share of ProAssurance common stock on the date of grant less the estimated net present value of expected dividends during the vesting period. 2022 2021 2020 Units Weighted Units Weighted Units Weighted Beginning non-vested balance 387,182 $ 30.78 339,804 $ 36.09 320,625 $ 43.99 Granted 195,941 $ 24.19 131,521 $ 24.16 111,758 $ 29.18 Forfeited (12,238) $ 25.13 (11,131) $ 35.49 (9,054) $ 40.13 Vested and released (105,682) $ 39.36 (73,012) $ 44.45 (83,525) $ 56.74 Ending non-vested balance 465,203 $ 26.21 387,182 $ 30.78 339,804 $ 36.09 |
Schedule of Activity for Performance Share Awards | The table reflects the base number of units; actual awards that vest depend upon the extent to which performance objectives are achieved. Grant date fair values are based on the market value of a share of ProAssurance common stock on the date of grant less the estimated net present value of expected dividends during the vesting period. 2022 2021 2020 Base Units Weighted Base Units Weighted Base Units Weighted Beginning non-vested balance 137,781 $ 28.43 90,979 $ 36.87 100,370 $ 50.10 Granted 109,542 $ 24.19 74,004 $ 24.04 38,609 $ 29.18 Forfeited — $ — — $ — — $ — Expired* (25,168) $ 40.18 (27,202) $ 44.73 (48,000) $ 58.35 Ending non-vested balance 222,155 $ 25.01 137,781 $ 28.43 90,979 $ 36.87 *Represents performance share units that did not vest as minimum performance objectives were not achieved. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table provides a reconciliation between the Company's basic weighted average number of common shares outstanding to its diluted weighted average number of common shares outstanding: (In thousands, except per share data) Year Ended December 31 2022 2021 2020 Weighted average number of common shares outstanding, basic 54,008 53,962 53,863 Dilutive effect of securities: Restricted Share Units 115 92 42 Performance Share Units 17 4 1 Weighted average number of common shares outstanding, diluted 54,140 54,058 53,906 Effect of dilutive shares on earnings (loss) per share $ — $ — $ — |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | The tabular information that follows shows the financial results of the Company's reportable segments reconciled to results reflected in the Consolidated Statements of Income and Comprehensive Income. ProAssurance does not consider goodwill or intangible asset impairments, a gain on bargain purchase, changes in the fair value of contingent consideration or transaction-related costs for completed business combinations, including any related tax impacts, in assessing the financial performance of its operating and reportable segments, and thus are included in the reconciliation of segment results to consolidated results. Financial results by segment were as follows: Year Ended December 31, 2022 (In thousands) Specialty P&C Workers' Compensation Insurance Segregated Portfolio Cell Reinsurance Lloyd's Syndicates Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 769,773 $ 166,371 $ 69,810 $ 23,627 $ — $ — $ 1,029,581 Net investment income — — 1,029 568 94,375 — 95,972 Equity in earnings (loss) of unconsolidated subsidiaries — — — — 4,888 — 4,888 Net investment gains (losses) — — (3,067) (964) (38,126) — (42,157) Other income (expense) (1) 5,003 2,201 2 119 6,198 (4,119) 9,404 Net losses and loss adjustment expenses (2) (609,915) (111,407) (39,310) (16,130) — — (776,762) Underwriting, policy acquisition and operating expenses (1)(2) (192,397) (54,737) (20,316) (7,412) (34,733) 4,119 (305,476) SPC U.S. federal income tax expense (3) — — (1,759) — — — (1,759) SPC dividend (expense) income — — (6,673) — — — (6,673) Interest expense — — — — (20,372) — (20,372) Income tax benefit (expense) — — — — 5,423 — 5,423 Segment results $ (27,536) $ 2,428 $ (284) $ (192) $ 17,653 $ — $ (7,931) Reconciliation of segments to consolidated results: Contingent consideration (4) 9,000 Transaction-related costs, net (5) (1,471) Net income (loss) $ (402) Significant non-cash items: Contingent consideration $ 9,000 Depreciation and amortization, net of accretion $ 10,473 $ 3,491 $ 1,186 $ 41 $ 22,872 $ — $ 38,063 Year Ended December 31, 2021 (In thousands) Specialty P&C Workers' Compensation Insurance Segregated Portfolio Cell Reinsurance Lloyd's Syndicates Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 695,008 $ 164,600 $ 63,688 $ 48,372 $ — $ — $ 971,668 Net investment income — — 814 1,961 67,747 — 70,522 Equity in earnings (loss) of unconsolidated subsidiaries — — — — 48,974 — 48,974 Net investment gains (losses) — — 4,080 249 19,981 — 24,310 Other income (expense) (1) 3,370 2,211 3 912 5,531 (3,091) 8,936 Net losses and loss adjustment expenses (575,164) (114,704) (32,569) (29,812) — — (752,249) Underwriting, policy acquisition and operating expenses (1) (127,709) (52,418) (21,635) (17,957) (26,641) 3,091 (243,269) SPC U.S. federal income tax expense (3) — — (1,947) — — — (1,947) SPC dividend (expense) income — — (10,050) — — — (10,050) Interest expense — — — — (19,719) — (19,719) Income tax benefit (expense) — — — — (4,651) — (4,651) Segment results $ (4,495) $ (311) $ 2,384 $ 3,725 $ 91,222 $ — $ 92,525 Reconciliation of segments to consolidated results: Gain on bargain purchase 74,408 Transaction-related costs (5) (22,809) Net income (loss) $ 144,124 Significant non-cash items: Gain on bargain purchase $ 74,408 Depreciation and amortization, net of accretion $ 9,915 $ 3,583 $ 1,475 $ 66 $ 22,208 $ — $ 37,247 Year Ended December 31, 2020 (In thousands) Specialty P&C Workers' Compensation Insurance Segregated Portfolio Cell Reinsurance Lloyd's Syndicates Corporate Inter-segment Eliminations Consolidated Net premiums earned $ 477,365 $ 171,772 $ 66,352 $ 77,226 $ — $ — $ 792,715 Net investment income — — 1,084 4,128 66,786 — 71,998 Equity in earnings (loss) of unconsolidated subsidiaries — — — — (11,921) — (11,921) Net investment gains (losses) — — 3,085 988 11,605 — 15,678 Other income (expense) (1) 3,908 2,216 205 51 2,531 (2,441) 6,470 Net losses and loss adjustment expenses (470,074) (111,552) (29,605) (50,216) — — (661,447) Underwriting, policy acquisition and operating expenses (1) (109,599) (56,449) (20,709) (30,136) (23,429) 2,441 (237,881) SPC U.S. federal income tax expense (3) — — (1,746) — — — (1,746) SPC dividend (expense) income — — (14,304) — — — (14,304) Interest expense — — — — (15,503) — (15,503) Income tax benefit (expense) — — — 29 41,300 — 41,329 Segment results $ (98,400) $ 5,987 $ 4,362 $ 2,070 $ 71,369 $ — (14,612) Reconciliation of segments to consolidated results: Goodwill impairment (161,115) Net income (loss) $ (175,727) Significant non-cash items: Goodwill impairment $ 161,115 Depreciation and amortization, net of accretion $ 7,747 $ 3,690 $ 676 $ (4) $ 9,266 $ — $ 21,375 (1) Includes certain fees for services provided by the Workers' Compensation Insurance segment to the SPCs at Inova Re and Eastern Re which are recorded as expenses within the Segregated Portfolio Cell Reinsurance segment and as other income within the Workers' Compensation Insurance segment. These fees are primarily SPC rental fees and are eliminated between segments in consolidation. (2) Beginning in 2022, ProAssurance revised its process for estimating ULAE as a result of substantially integrating NORCAL into the Specialty P&C segment operations. The change in the Company's estimate of ULAE increased underwriting, policy acquisition and operating expenses with an offsetting decrease to net losses and loss adjustment expenses in the Specialty P&C segment; there was no impact on segment results for the year ended December 31, 2022. See further discussion on this change in estimate in Note 1. (3) Represents the provision for U.S. federal income taxes for SPCs at Inova Re, which have elected to be taxed as a U.S. corporation under Section 953(d) of the Internal Revenue Code. U.S. federal income taxes are included in the total SPC net results and are paid by the individual SPCs. (4) Represents the change in the fair value of contingent consideration issued in connection with the NORCAL acquisition included as a component of consolidated net investment gains (losses) on the Consolidated Statements of Income and Comprehensive Income. (5) Represents the transaction-related costs, after-tax, associated with the acquisition of NORCAL. For the years ended December 31, 2022 and 2021, pre-tax transaction-related costs of $1.9 million and $25.0 million, respectively, were included as a component of consolidated operating expense and the associated income tax benefit of $0.4 million and $2.2 million for the years ended December 31, 2022 and 2021, respectively, was included as a component of consolidated income tax benefit (expense) on the Consolidated Statements of Income and Comprehensive Income. |
Schedule of Gross Premiums by Product | The following table provides detailed information regarding ProAssurance's gross premiums earned by product as well as a reconciliation to net premiums earned. All gross premiums earned are from external customers except as noted. ProAssurance's insured risks are primarily within the U.S. Year Ended December 31 (In thousands) 2022 2021 2020 Specialty P&C Segment Gross premiums earned: HCPL $ 684,514 $ 616,614 $ 411,716 Small Business Unit 107,382 105,605 104,376 Medical Technology Liability 41,323 38,508 34,909 Other 1,281 684 821 Ceded premiums earned (64,727) (66,403) (74,457) Segment net premiums earned 769,773 695,008 477,365 Workers' Compensation Insurance Segment Gross premiums earned: Traditional business 179,558 175,459 184,204 Alternative market business 72,894 68,206 71,280 Ceded premiums earned (86,081) (79,065) (83,712) Segment net premiums earned 166,371 164,600 171,772 Segregated Portfolio Cell Reinsurance Segment Gross premiums earned: Workers' compensation (1) 68,548 65,023 68,518 HCPL (2) 10,799 7,336 6,594 Ceded premiums earned (9,537) (8,671) (8,760) Segment net premiums earned 69,810 63,688 66,352 Lloyd's Syndicates Segment Gross premiums earned: Property and casualty 27,486 60,590 98,990 Ceded premiums earned (3,859) (12,218) (21,764) Segment net premiums earned 23,627 48,372 77,226 Consolidated net premiums earned $ 1,029,581 $ 971,668 $ 792,715 (1) Premium for all periods is assumed from the Workers' Compensation Insurance segment. (2) Premium for all periods is assumed from the Specialty P&C segment. |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan | The following table provides a reconciliation of the changes in the PBO and fair value of plan assets for the years ended December 31, 2022 and 2021: Year Ended December 31 (In thousands) 2022 2021 Change in benefit obligation: PBO at beginning of period $ 106,899 $ — Acquired PBO from NORCAL acquisition — 107,895 Interest cost 2,885 2,030 Actuarial (gain) loss (1) (25,735) 2,872 Benefits paid (3,251) (1,149) Settlement payments (6,568) (4,749) PBO at December 31 $ 74,230 $ 106,899 Change in fair value of plan assets: Fair value of plan assets beginning of period $ 110,444 $ — Fair value of plan assets acquired from NORCAL — 109,443 Actual return on plan assets (25,198) 6,899 Benefits paid (3,251) (1,149) Settlement payments (6,568) (4,749) Fair value of plan assets at December 31 $ 75,427 $ 110,444 Funded (underfunded) status of the plan $ 1,197 $ 3,545 Amount recognized in Consolidated Balance Sheets at December 31 (2) $ 1,197 $ 3,545 Net actuarial (gain) loss recognized in AOCI and not yet reflected in net periodic benefit cost (income) $ 1,845 $ (1,468) (1) The actuarial gain experienced in 2022 was largely driven by the increase in the discount rate from the prior year that was used to determine the projected benefit obligation at December 31, 2022. (2) The funded balance is included as a component of other assets on the Consolidated Balance Sheets for the years ended December 31, 2022 and 2021. |
Schedule of Net Benefit Costs | The components of the net periodic benefit cost (income) for the years ended December 31, 2022 and 2021 were as follows: (In thousands) Year Ended December 31 2022 2021 Components of net periodic benefit cost (income): Interest cost $ 2,885 $ 2,030 Expected return on plan assets (4,013) (2,494) Gain on settlement 163 (65) Total net periodic benefit cost (income)* (965) (529) Other changes recognized in OCI: Net actuarial (gain) loss 3,476 (1,533) Reclassification of gain on settlement (163) 65 (Gain) loss recognized in OCI 3,313 (1,468) Total recognized in net periodic benefit cost (income) and OCI $ 2,348 $ (1,997) *Net periodic benefit cost (income) is included as a component of operating expense on the Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2022 and 2021. |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | The components of the net periodic benefit cost (income) for the years ended December 31, 2022 and 2021 were as follows: (In thousands) Year Ended December 31 2022 2021 Components of net periodic benefit cost (income): Interest cost $ 2,885 $ 2,030 Expected return on plan assets (4,013) (2,494) Gain on settlement 163 (65) Total net periodic benefit cost (income)* (965) (529) Other changes recognized in OCI: Net actuarial (gain) loss 3,476 (1,533) Reclassification of gain on settlement (163) 65 (Gain) loss recognized in OCI 3,313 (1,468) Total recognized in net periodic benefit cost (income) and OCI $ 2,348 $ (1,997) *Net periodic benefit cost (income) is included as a component of operating expense on the Consolidated Statements of Income and Comprehensive Income for the years ended December 31, 2022 and 2021. |
Schedule of Net Periodic Benefit Cost Not yet Recognized | The components of the change in amounts not yet recognized as components of the net periodic benefit cost (income) were as follows: Year Ended December 31 (In thousands) 2022 2021 Items not yet recognized as a component of net periodic benefit cost (income) at beginning of period $ (1,468) $ — Net actuarial (gain) loss 3,476 (1,533) Reclassification of gain (loss) on settlement (163) 65 Items not yet recognized as a component of net periodic benefit cost (income) at December 31 $ 1,845 $ (1,468) Amounts recognized in AOCI $ 1,845 $ (1,468) |
Schedule of Weighted Average Discount Rate on Defined Benefit Plan | The weighted average discount rate used to determine the projected benefit obligation of the defined benefit pension plan for the years ended December 31, 2022 and 2021 were as follows: December 31, 2022 December 31, 2021 Weighted average discount rate 5.13 % 2.78 % The weighted average discount rate and the weighted average expected return on plan assets used to determine net periodic benefit cost (income) for the years ended December 31, 2022 and 2021 were as follows: December 31, 2022 December 31, 2021 Weighted average discount rate 2.78 % 2.95 % Weighted average expected return on plan assets 4.00 % 3.75 % |
Schedule of Allocation of Plan Assets | The defined benefit pension plan’s target allocations, by asset category as of December 31, 2022 and 2021, were as follows: December 31, 2022 December 31, 2021 Fixed maturities 90 % 79 % Equity investments 10 % 18 % Real estate — % 3 % 100 % 100 % December 31, 2022 (In thousands) Level 1 Level 2 Level 3 Total* Pooled separate account investments: Large cap equity investments (1) $ 5,341 $ — $ — $ 5,341 International equity investments (2) — 2,410 — 2,410 Corporate and government debt (3) 67,676 — — 67,676 Total $ 73,017 $ 2,410 $ — $ 75,427 December 31, 2021 (In thousands) Level 1 Level 2 Level 3 Total* Pooled separate account investments: Large cap equity investments (1) $ 13,703 $ — $ — $ 13,703 Mid cap equity investments (1) 586 — — 586 Small cap equity investments (1) 229 — — 229 International equity investments (2) — 5,581 — 5,581 Corporate and government debt (3) — 86,728 — 86,728 Real estate (4) — — 3,617 3,617 Total $ 14,518 $ 92,309 $ 3,617 $ 110,444 *For some assets, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When this is the case, the asset is categorized based on the level of the most significant input to the fair value measurement. Assessments of the significance of a particular input to the fair value measurement require judgement and consideration of factors specific to the assets being valued. |
Schedule of Changes in the Fair Value of Asset | The following tables present summary information regarding changes in the fair value of the defined benefit pension plan assets measured using Level 3 inputs: Level 3 Fair Value Measurements (In thousands) Real Estate Total Balance, January 1, 2022 $ 3,617 $ 3,617 Actual return on plan assets: Relating to assets still held at the reporting date: Investment return 6 6 Transfers out (3,623) (3,623) Balance, December 31, 2022 $ — $ — Level 3 Fair Value Measurements (In thousands) Real Estate Total Balance, January 1, 2021 $ — $ — Acquired balance, May 5, 2021 3,383 3,383 Actual return on plan assets: Relating to assets still held at the reporting date: Investment return 613 613 Transfers out (379) (379) Balance, December 31, 2021 $ 3,617 $ 3,617 |
Schedule of Expected Benefit Payments | Based on current data and assumptions as of December 31, 2022, the following benefit payments are expected to be paid in future periods: 2023 $ 5,540 2024 4,420 2025 4,580 2026 5,040 2027 4,910 Thereafter 28,870 Total $ 53,360 |
Statutory Accounting and Divi_2
Statutory Accounting and Dividend Restrictions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Schedule of Net Income (Loss) and Capital Surplus | Net income (loss) and capital and surplus of ProAssurance’s insurance subsidiaries on a statutory basis are shown in the following table. (In millions) Statutory Net Income (Loss) Statutory Capital and Surplus 2022 2021 2020 2022 2021 $69 $83 $81 $1,392 $1,463 |
Accounting Policies - Narrative
Accounting Policies - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) reporting_unit segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Number of reportable segments | segment | 5 | ||
Benefits, losses and expenses | $ 1,112,904 | $ 1,052,211 | $ 1,091,996 |
Net losses and loss adjustment expenses | $ (776,762) | (752,249) | (661,447) |
Insurance policy duration (years) | 1 year | ||
Minimum period for claims resolution (years) | 5 years | ||
Net of related allowance for expected credit losses | $ 7,658 | 7,436 | $ 6,131 |
Estimated aggregate amortization of intangible assets for 2023 | 6,500 | ||
Estimated aggregate amortization of intangible assets for 2024 | 6,100 | ||
Estimated aggregate amortization of intangible assets for 2025 | 5,700 | ||
Estimated aggregate amortization of intangible assets for 2026 | 3,700 | ||
Estimated aggregate amortization of intangible assets for 2027 | $ 3,400 | ||
Number of reporting units | reporting_unit | 2 | ||
Earned but unbilled premiums | $ 3,300 | 1,800 | |
Investments with exposure to LIBOR | 6% | ||
Investments with exposure to LIBOR | $ 255,000 | ||
Investments with exposure to LIBOR, with provision for alternative benchmark rate | 63% | ||
Building and Building Improvements | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Real estate accumulated depreciation | 28,300 | 27,400 | |
Depreciation | 900 | $ 900 | $ 900 |
NORCAL Group | Change in Accounting Method Accounted for as Change in Estimate | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Benefits, losses and expenses | 25,400 | ||
Net losses and loss adjustment expenses | $ 25,400 |
Accounting Policies - Premium R
Accounting Policies - Premium Receivable Expected Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Premiums Receivable, Net | $ 246,094 | $ 241,095 | $ 201,395 |
Premium Receivable, Allowance for Credit Loss [Roll Forward] | |||
Premium receivable, allowance for credit loss, beginning balance | 7,436 | 6,131 | |
Initial allowance recognized in the period for NORCAL premium receivable | 2,137 | ||
Provision for expected credit losses | 564 | 439 | |
Write offs charged against the allowance | (674) | (1,533) | |
Recoveries of amounts previously written off | 332 | 262 | |
Premium receivable, allowance for credit loss, ending balance | $ 7,658 | $ 7,436 |
Accounting Policies - Intangibl
Accounting Policies - Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Gross carrying value non-amortizable | $ 38.2 | $ 38.2 | |
Gross carrying value amortizable | 100.3 | 100.3 | |
Total Intangible Assets | 138.5 | 138.5 | |
Accumulated amortization of intangible assets | 71.7 | 65.2 | |
Amortization expense of intangible assets | $ 6.5 | $ 6.4 | $ 6.2 |
Accounting Policies - Other Lia
Accounting Policies - Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | |||
SPC dividends payable | $ 59,901 | $ 66,456 | |
Deferred compensation liabilities | 27,905 | 52,332 | |
Contingent consideration | 15,000 | 24,000 | $ 0 |
All other | 123,573 | 137,944 | |
Total other liabilities | $ 226,379 | $ 280,732 |
Business Combination - Narrativ
Business Combination - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Sep. 16, 2021 | May 05, 2021 | Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||||||
Fair value of contingent consideration | $ (9,000,000) | $ 0 | $ 0 | |||
Contingent consideration | $ 15,000,000 | 15,000,000 | 24,000,000 | 0 | ||
Gain on bargain purchase | 0 | 74,408,000 | 0 | |||
NORCAL Group | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of interest acquired | 120% | 98.80% | ||||
Business combination, consideration transferred | $ 3,100,000 | $ 448,800,000 | ||||
Payments to acquire businesses | 248,000,000 | |||||
Business combination, consideration transferred, equity interests issued and issuable | 1,800,000 | |||||
Contingent consideration, maximum estimate | 84,000,000 | |||||
Fair value of contingent consideration | 9,000,000 | |||||
Contingent consideration | 24,000,000 | 15,000,000 | 15,000,000 | 24,000,000 | ||
Proassurance actual revenue consolidation results | 299,100,000 | 230,300,000 | ||||
Proassurance actual net income consolidated results | 12,600,000 | 9,700,000 | ||||
Acquisition related costs | 1,900,000 | 25,000,000 | $ 1,800,000 | |||
Gain on bargain purchase | 74,400,000 | |||||
Business combination, fair values adjustments on gross reserve | 42,200,000 | |||||
Business combination, fair values adjustments on reinsurance recoverables | 3,500,000 | |||||
Present value of future insurance profits, expected amortization | 53,844,000 | |||||
Expected amortization | 15,758,000 | 15,758,000 | $ 14,600,000 | |||
NORCAL Group | Fair value adjustment on reserves, net | ||||||
Business Acquisition [Line Items] | ||||||
Present value of future insurance profits, expected amortization | 38,701,000 | |||||
Expected amortization | 10,595,000 | 10,595,000 | ||||
NORCAL Group | Unearned premium VOBA, net | ||||||
Business Acquisition [Line Items] | ||||||
Business combination, fair values adjustments on reinsurance recoverables | 700,000 | |||||
Present value of future insurance profits, expected amortization | 11,676,000 | |||||
Estimated negative VOBA | 12,400,000 | |||||
Expected amortization | 4,939,000 | 4,939,000 | ||||
NORCAL Group | DDR reserve VOBA | ||||||
Business Acquisition [Line Items] | ||||||
Present value of future insurance profits, expected amortization | 3,467,000 | |||||
Expected amortization | $ 224,000 | $ 224,000 | ||||
NORCAL Group | Contribution Certificates | ||||||
Business Acquisition [Line Items] | ||||||
Principal amount | 191,000,000 | |||||
Debt instruments | $ 175,000,000 |
Business Combination - Summary
Business Combination - Summary of Intangible Assets Acquired (Details) - NORCAL Group $ in Thousands | May 05, 2021 USD ($) |
Business Acquisition [Line Items] | |
Total | $ 14,000 |
Acquired intangible assets useful life (in years) | 3 years |
Licenses | |
Business Acquisition [Line Items] | |
Indefinite-lived intangible assets acquired | $ 13,000 |
Trade name | |
Business Acquisition [Line Items] | |
Finite-lived intangible assets acquired | $ 1,000 |
Business Combination - Schedule
Business Combination - Schedule of Present Value Of Future Insurance Profits Expected Amortization (Details) - NORCAL Group - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | May 05, 2021 | |
Business Acquisition [Line Items] | |||
Amortization, total | $ 53,844 | ||
2022 | $ 15,758 | $ 14,600 | |
2023 | 8,333 | ||
2024 | 5,326 | ||
2025 | 3,350 | ||
Thereafter | $ 6,433 | ||
Fair value adjustment on reserves, net | |||
Business Acquisition [Line Items] | |||
Amortization, total | 38,701 | ||
Amortization period (years) | 7 years | ||
2022 | $ 10,595 | ||
2023 | 8,090 | ||
2024 | 5,083 | ||
2025 | 3,107 | ||
Thereafter | $ 4,058 | ||
Unearned premium VOBA, net | |||
Business Acquisition [Line Items] | |||
Amortization, total | 11,676 | ||
Amortization period (years) | 1 year | ||
2022 | $ 4,939 | ||
2023 | 0 | ||
2024 | 0 | ||
2025 | 0 | ||
Thereafter | $ 0 | ||
DDR reserve VOBA | |||
Business Acquisition [Line Items] | |||
Amortization, total | $ 3,467 | ||
Amortization period (years) | 15 years | ||
2022 | $ 224 | ||
2023 | 243 | ||
2024 | 243 | ||
2025 | 243 | ||
Thereafter | $ 2,375 |
Business Combination - Pro Form
Business Combination - Pro Forma and Actual Consolidated Results (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue: | |||
ProAssurance Actual Consolidated Results | $ 1,106,688 | $ 1,124,410 | $ 874,940 |
Net income (loss): | |||
ProAssurance Actual Consolidated Results | $ (402) | 144,124 | (175,727) |
NORCAL Group | |||
Revenue: | |||
ProAssurance Pro Forma Consolidated Results | 1,247,272 | 1,275,459 | |
Net income (loss): | |||
ProAssurance Pro Forma Consolidated Results | $ 88,223 | $ (113,557) |
Fair Value Measurement - Assets
Fair Value Measurement - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets: | ||
Fixed maturities available for sale, at fair value | $ 3,472,472 | $ 3,833,722 |
Fixed maturities, trading | 43,434 | 43,670 |
Equity investments | 143,738 | 214,807 |
U.S. Treasury obligations | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 221,608 | 238,507 |
U.S. Government-sponsored enterprise obligations | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 19,934 | 20,234 |
State and municipal bonds | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 439,450 | 519,196 |
Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 389,540 | 453,941 |
Agency commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 9,704 | 14,141 |
Other commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 194,090 | 231,483 |
Other asset-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 416,694 | 457,664 |
Level 3 | ||
Liabilities: | ||
Other liabilities | 15,000 | 24,000 |
Level 3 | Corporate debt, limited observable inputs | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 63,973 | 47,129 |
Recurring fair value measurements | ||
Assets: | ||
Total assets categorized within the fair value hierarchy | 4,259,889 | 4,679,262 |
Recurring fair value measurements | Level 1 | ||
Assets: | ||
Fixed maturities, trading | 0 | 0 |
Other assets | 0 | |
Total assets categorized within the fair value hierarchy | 322,534 | 388,285 |
Liabilities: | ||
Other liabilities | 0 | 0 |
Total liabilities categorized within the fair value hierarchy | 0 | 0 |
Recurring fair value measurements | Level 1 | U.S. Treasury obligations | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 1 | U.S. Government-sponsored enterprise obligations | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 1 | State and municipal bonds | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 1 | Corporate debt, multiple observable inputs | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 1 | Corporate debt, limited observable inputs | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 1 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 1 | Agency commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 1 | Other commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 1 | Other asset-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 1 | Financial | ||
Assets: | ||
Equity investments | 9,850 | 6,615 |
Recurring fair value measurements | Level 1 | Utilities/Energy | ||
Assets: | ||
Equity investments | 854 | |
Recurring fair value measurements | Level 1 | Industrial | ||
Assets: | ||
Equity investments | 0 | 0 |
Recurring fair value measurements | Level 1 | Bond funds | ||
Assets: | ||
Equity investments | 112,136 | 187,059 |
Recurring fair value measurements | Level 1 | All other | ||
Assets: | ||
Equity investments | 15,876 | 17,778 |
Recurring fair value measurements | Level 1 | Short-term investments | ||
Assets: | ||
Short-term investments | 181,937 | 174,944 |
Recurring fair value measurements | Level 1 | Other investments | ||
Assets: | ||
Short-term investments | 1,881 | 1,889 |
Recurring fair value measurements | Level 2 | ||
Assets: | ||
Fixed maturities, trading | 43,434 | 43,670 |
Other assets | 649 | |
Total assets categorized within the fair value hierarchy | 3,603,357 | 3,962,596 |
Liabilities: | ||
Other liabilities | 0 | 0 |
Total liabilities categorized within the fair value hierarchy | 0 | 0 |
Recurring fair value measurements | Level 2 | U.S. Treasury obligations | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 221,608 | 238,507 |
Recurring fair value measurements | Level 2 | U.S. Government-sponsored enterprise obligations | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 19,934 | 20,234 |
Recurring fair value measurements | Level 2 | State and municipal bonds | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 439,450 | 519,196 |
Recurring fair value measurements | Level 2 | Corporate debt, multiple observable inputs | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 1,717,479 | 1,851,427 |
Recurring fair value measurements | Level 2 | Corporate debt, limited observable inputs | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 2 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 389,291 | 453,644 |
Recurring fair value measurements | Level 2 | Agency commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 9,704 | 14,141 |
Recurring fair value measurements | Level 2 | Other commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 194,090 | 231,483 |
Recurring fair value measurements | Level 2 | Other asset-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 413,989 | 451,459 |
Recurring fair value measurements | Level 2 | Financial | ||
Assets: | ||
Equity investments | 2,219 | 855 |
Recurring fair value measurements | Level 2 | Utilities/Energy | ||
Assets: | ||
Equity investments | 0 | |
Recurring fair value measurements | Level 2 | Industrial | ||
Assets: | ||
Equity investments | 0 | 0 |
Recurring fair value measurements | Level 2 | Bond funds | ||
Assets: | ||
Equity investments | 0 | 0 |
Recurring fair value measurements | Level 2 | All other | ||
Assets: | ||
Equity investments | 0 | 0 |
Recurring fair value measurements | Level 2 | Short-term investments | ||
Assets: | ||
Short-term investments | 63,376 | 42,043 |
Recurring fair value measurements | Level 2 | Other investments | ||
Assets: | ||
Short-term investments | 88,783 | 95,288 |
Recurring fair value measurements | Level 3 | ||
Assets: | ||
Fixed maturities, trading | 0 | 0 |
Other assets | 0 | |
Total assets categorized within the fair value hierarchy | 71,513 | 57,565 |
Liabilities: | ||
Other liabilities | 15,000 | 24,000 |
Total liabilities categorized within the fair value hierarchy | 15,000 | 24,000 |
Recurring fair value measurements | Level 3 | U.S. Treasury obligations | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 3 | U.S. Government-sponsored enterprise obligations | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 3 | State and municipal bonds | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 3 | Corporate debt, multiple observable inputs | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 3 | Corporate debt, limited observable inputs | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 63,973 | 47,129 |
Recurring fair value measurements | Level 3 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 249 | 297 |
Recurring fair value measurements | Level 3 | Agency commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 3 | Other commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 0 | 0 |
Recurring fair value measurements | Level 3 | Other asset-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 2,705 | 6,205 |
Recurring fair value measurements | Level 3 | Financial | ||
Assets: | ||
Equity investments | 303 | 0 |
Recurring fair value measurements | Level 3 | Utilities/Energy | ||
Assets: | ||
Equity investments | 0 | |
Recurring fair value measurements | Level 3 | Industrial | ||
Assets: | ||
Equity investments | 2,500 | 2,500 |
Recurring fair value measurements | Level 3 | Bond funds | ||
Assets: | ||
Equity investments | 0 | 0 |
Recurring fair value measurements | Level 3 | All other | ||
Assets: | ||
Equity investments | 0 | 0 |
Recurring fair value measurements | Level 3 | Short-term investments | ||
Assets: | ||
Short-term investments | 0 | 0 |
Recurring fair value measurements | Level 3 | Other investments | ||
Assets: | ||
Short-term investments | 1,783 | 1,434 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | ||
Assets: | ||
Fixed maturities, trading | 43,434 | 43,670 |
Other assets | 649 | |
Total assets categorized within the fair value hierarchy | 3,997,404 | 4,408,446 |
Liabilities: | ||
Other liabilities | 15,000 | 24,000 |
Total liabilities categorized within the fair value hierarchy | 15,000 | 24,000 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | U.S. Treasury obligations | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 221,608 | 238,507 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | U.S. Government-sponsored enterprise obligations | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 19,934 | 20,234 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | State and municipal bonds | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 439,450 | 519,196 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | Corporate debt, multiple observable inputs | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 1,717,479 | 1,851,427 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | Corporate debt, limited observable inputs | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 63,973 | 47,129 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | Residential mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 389,540 | 453,941 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | Agency commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 9,704 | 14,141 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | Other commercial mortgage-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 194,090 | 231,483 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | Other asset-backed securities | ||
Assets: | ||
Fixed maturities available for sale, at fair value | 416,694 | 457,664 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | Financial | ||
Assets: | ||
Equity investments | 12,372 | 7,470 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | Utilities/Energy | ||
Assets: | ||
Equity investments | 854 | |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | Industrial | ||
Assets: | ||
Equity investments | 2,500 | 2,500 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | Bond funds | ||
Assets: | ||
Equity investments | 112,136 | 187,059 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | All other | ||
Assets: | ||
Equity investments | 15,876 | 17,778 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | Short-term investments | ||
Assets: | ||
Short-term investments | 245,313 | 216,987 |
Recurring fair value measurements | Fair Value, Inputs, Level 1, 2 and 3 | Other investments | ||
Assets: | ||
Short-term investments | 92,447 | 98,611 |
Recurring fair value measurements | Fair Value Measured at Net Asset Value Per Share | Equity investments | Investment in unconsolidated subsidiaries | ||
Assets: | ||
Total assets categorized within the fair value hierarchy | $ 262,485 | $ 270,816 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) subsidiary | Dec. 31, 2021 USD ($) | May 05, 2021 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Deferred compensation plan assets | $ 27,900,000 | $ 39,500,000 | |
Deferred compensation liabilities | 27,905,000 | 52,332,000 | |
Fair Value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Deferred compensation liabilities | $ 27,900,000 | 52,300,000 | |
NORCAL Group | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration period | 3 years | ||
Contingent consideration, maximum estimate | $ 84,000,000 | ||
Deferred compensation plan assets | 5,200,000 | ||
NORCAL Group | Fair Value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Deferred compensation liabilities | 18,400,000 | ||
Federal Home Loan Bank Certificates and Obligations (FHLB) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of insurance subsidiaries | subsidiary | 3 | ||
Fair Value, Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value, net asset (liability) | $ 0 | $ 0 | |
Corporate debt, limited observable inputs | BBB Plus | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Credit quality percentage | 100% | ||
Corporate debt, limited observable inputs | Rating BBB | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Credit quality percentage | 100% | ||
Other asset-backed securities | BBB Plus | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Credit quality percentage | 100% | ||
Other asset-backed securities | B B B Minus | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Credit quality percentage | 100% | ||
Interest Rate Cap | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Premium paid on derivative for right to receive cash payments | $ 2,000,000 | ||
Floor interest rate on derivative | 2.35% | ||
Interest Rate Cap | Other Assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Notional amount | $ 35,000,000 |
Fair Value Measurement - Quanti
Fair Value Measurement - Quantitative Information Regarding Level 3 Valuations (Details) $ in Thousands | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Assets: | ||
Estimated Fair Value | $ 3,472,472 | $ 3,833,722 |
Other investments | 262,485 | 270,816 |
Fair Value, Inputs, Level 3 | ||
Assets: | ||
Equity investments | 2,803 | 2,500 |
Other investments | 1,783 | 1,434 |
Liabilities: | ||
Other liabilities | $ 15,000 | 24,000 |
Fair Value, Inputs, Level 3 | Discounted Cash Flows | Comparability Adjustment | Minimum | ||
Assets: | ||
Equity securities measured at fair value | 0 | |
Other investments, measurement input | 0 | |
Fair Value, Inputs, Level 3 | Discounted Cash Flows | Comparability Adjustment | Maximum | ||
Assets: | ||
Equity securities measured at fair value | 0.10 | |
Other investments, measurement input | 0.10 | |
Fair Value, Inputs, Level 3 | Discounted Cash Flows | Comparability Adjustment | Weighted Average | ||
Assets: | ||
Equity securities measured at fair value | 0.05 | |
Other investments, measurement input | 0.05 | |
Fair Value, Inputs, Level 3 | Stochastic Model/Discounted Cash Flows | Weighted Average Cost of Capital | Minimum | ||
Liabilities: | ||
Other liabilities, measurement input | 0% | |
Fair Value, Inputs, Level 3 | Stochastic Model/Discounted Cash Flows | Weighted Average Cost of Capital | Maximum | ||
Liabilities: | ||
Other liabilities, measurement input | 10% | |
Fair Value, Inputs, Level 3 | Stochastic Model/Discounted Cash Flows | Weighted Average Cost of Capital | Weighted Average | ||
Liabilities: | ||
Other liabilities, measurement input | 9% | |
Fair Value, Inputs, Level 3 | Corporate debt, limited observable inputs | ||
Assets: | ||
Estimated Fair Value | $ 63,973 | 47,129 |
Fair Value, Inputs, Level 3 | Corporate debt, limited observable inputs | Market Comparable Securities | Comparability Adjustment | Minimum | ||
Assets: | ||
Assets measured at fair value | 0 | |
Fair Value, Inputs, Level 3 | Corporate debt, limited observable inputs | Market Comparable Securities | Comparability Adjustment | Maximum | ||
Assets: | ||
Assets measured at fair value | 0.05 | |
Fair Value, Inputs, Level 3 | Corporate debt, limited observable inputs | Market Comparable Securities | Comparability Adjustment | Weighted Average | ||
Assets: | ||
Assets measured at fair value | 0.025 | |
Fair Value, Inputs, Level 3 | Corporate debt, limited observable inputs | Discounted Cash Flows | Comparability Adjustment | Minimum | ||
Assets: | ||
Assets measured at fair value | 0 | |
Fair Value, Inputs, Level 3 | Corporate debt, limited observable inputs | Discounted Cash Flows | Comparability Adjustment | Maximum | ||
Assets: | ||
Assets measured at fair value | 0.05 | |
Fair Value, Inputs, Level 3 | Corporate debt, limited observable inputs | Discounted Cash Flows | Comparability Adjustment | Weighted Average | ||
Assets: | ||
Assets measured at fair value | 0.025 | |
Fair Value, Inputs, Level 3 | Residential mortgage-backed securities | ||
Assets: | ||
Estimated Fair Value | $ 249 | 297 |
Fair Value, Inputs, Level 3 | Residential mortgage-backed securities | Market Comparable Securities | Comparability Adjustment | Minimum | ||
Assets: | ||
Assets measured at fair value | 0 | |
Fair Value, Inputs, Level 3 | Residential mortgage-backed securities | Market Comparable Securities | Comparability Adjustment | Maximum | ||
Assets: | ||
Assets measured at fair value | 0.05 | |
Fair Value, Inputs, Level 3 | Residential mortgage-backed securities | Market Comparable Securities | Comparability Adjustment | Weighted Average | ||
Assets: | ||
Assets measured at fair value | 0.025 | |
Fair Value, Inputs, Level 3 | Residential mortgage-backed securities | Discounted Cash Flows | Comparability Adjustment | Minimum | ||
Assets: | ||
Assets measured at fair value | 0 | |
Fair Value, Inputs, Level 3 | Residential mortgage-backed securities | Discounted Cash Flows | Comparability Adjustment | Maximum | ||
Assets: | ||
Assets measured at fair value | 0.05 | |
Fair Value, Inputs, Level 3 | Residential mortgage-backed securities | Discounted Cash Flows | Comparability Adjustment | Weighted Average | ||
Assets: | ||
Assets measured at fair value | 0.025 | |
Fair Value, Inputs, Level 3 | Other asset-backed securities | ||
Assets: | ||
Estimated Fair Value | $ 2,705 | $ 6,205 |
Fair Value, Inputs, Level 3 | Other asset-backed securities | Market Comparable Securities | Comparability Adjustment | Minimum | ||
Assets: | ||
Assets measured at fair value | 0 | |
Fair Value, Inputs, Level 3 | Other asset-backed securities | Market Comparable Securities | Comparability Adjustment | Maximum | ||
Assets: | ||
Assets measured at fair value | 0.05 | |
Fair Value, Inputs, Level 3 | Other asset-backed securities | Market Comparable Securities | Comparability Adjustment | Weighted Average | ||
Assets: | ||
Assets measured at fair value | 0.025 | |
Fair Value, Inputs, Level 3 | Other asset-backed securities | Discounted Cash Flows | Comparability Adjustment | Minimum | ||
Assets: | ||
Assets measured at fair value | 0 | |
Fair Value, Inputs, Level 3 | Other asset-backed securities | Discounted Cash Flows | Comparability Adjustment | Maximum | ||
Assets: | ||
Assets measured at fair value | 0.05 | |
Fair Value, Inputs, Level 3 | Other asset-backed securities | Discounted Cash Flows | Comparability Adjustment | Weighted Average | ||
Assets: | ||
Assets measured at fair value | 0.025 |
Fair Value Measurement - Level
Fair Value Measurement - Level 3 Assets & Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | $ 57,565 | $ 11,958 |
Total gains (losses) realized and unrealized: | ||
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Investments | Gain (Loss) on Investments |
Included in other comprehensive income (loss) | $ (4,944) | $ (376) |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Asset, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Other comprehensive income (loss), after tax, net of reclassification adjustments | Other comprehensive income (loss), after tax, net of reclassification adjustments |
Purchases | $ 49,771 | $ 98,078 |
Sales | (6,607) | (9,876) |
Transfers in | 22,304 | 4,513 |
Transfers out | (46,132) | (45,946) |
Ending Balance | 71,513 | 57,565 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end | $ (721) | $ (764) |
Fair Value Asset Recurring Basis Still Held Unrealized Gain Loss Statement Of Income Extensible List Not Disclosed Flag | Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end | Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 24,000 | $ 0 |
Total gains (losses) realized and unrealized: | ||
Included in earnings | 9,000 | 0 |
Purchases | 0 | (24,000) |
Sales | 0 | 0 |
Transfers in | 0 | 0 |
Transfers out | 0 | 0 |
Ending balance | 15,000 | 24,000 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end | 0 | 0 |
Net investment income (loss) | ||
Total gains (losses) realized and unrealized: | ||
Included in earnings | $ 7 | $ (2) |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Net investment income | Net investment income |
Net investment gains (losses) | ||
Total gains (losses) realized and unrealized: | ||
Included in earnings | $ (451) | $ (784) |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gain (Loss) on Investments | Gain (Loss) on Investments |
State and municipal bonds | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | $ 0 | |
Total gains (losses) realized and unrealized: | ||
Included in other comprehensive income (loss) | (19) | |
Purchases | 750 | |
Sales | 0 | |
Transfers in | 0 | |
Transfers out | (731) | |
Ending Balance | 0 | $ 0 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end | 0 | |
Corporate debt | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 47,129 | 3,265 |
Total gains (losses) realized and unrealized: | ||
Included in earnings | (1) | |
Included in other comprehensive income (loss) | (4,324) | 27 |
Purchases | 34,805 | 57,586 |
Sales | (5,153) | (3,277) |
Transfers in | 18,828 | 858 |
Transfers out | (27,311) | (11,317) |
Ending Balance | 63,973 | 47,129 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end | 0 | 0 |
Corporate debt | Net investment income (loss) | ||
Total gains (losses) realized and unrealized: | ||
Included in earnings | 1 | |
Corporate debt | Net investment gains (losses) | ||
Total gains (losses) realized and unrealized: | ||
Included in earnings | (14) | |
Asset-backed Securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 6,502 | 8,693 |
Total gains (losses) realized and unrealized: | ||
Included in earnings | 8 | |
Included in other comprehensive income (loss) | (601) | (403) |
Purchases | 10,907 | 31,204 |
Sales | (287) | (800) |
Transfers in | 570 | 0 |
Transfers out | (14,145) | (32,178) |
Ending Balance | 2,954 | 6,502 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end | 0 | 0 |
Asset-backed Securities | Net investment income (loss) | ||
Total gains (losses) realized and unrealized: | ||
Included in earnings | (3) | |
Asset-backed Securities | Net investment gains (losses) | ||
Total gains (losses) realized and unrealized: | ||
Included in earnings | (11) | |
Equity Investments | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 2,500 | 0 |
Total gains (losses) realized and unrealized: | ||
Included in earnings | 102 | 15 |
Purchases | 17 | 9,083 |
Sales | 0 | (5,799) |
Transfers in | 2,377 | 69 |
Transfers out | (2,193) | (868) |
Ending Balance | 2,803 | 2,500 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end | 101 | 10 |
Other Investments | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation: | ||
Beginning Balance | 1,434 | 0 |
Total gains (losses) realized and unrealized: | ||
Included in earnings | (553) | (774) |
Purchases | 3,292 | 205 |
Sales | (1,167) | 0 |
Transfers in | 529 | 3,586 |
Transfers out | (1,752) | (1,583) |
Ending Balance | 1,783 | 1,434 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end | (822) | (774) |
Other Liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 24,000 | 0 |
Total gains (losses) realized and unrealized: | ||
Included in earnings | 9,000 | 0 |
Purchases | 0 | (24,000) |
Sales | 0 | 0 |
Transfers in | 0 | 0 |
Transfers out | 0 | 0 |
Ending balance | 15,000 | 24,000 |
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end | $ 0 | $ 0 |
Fair Value Measurement - Invest
Fair Value Measurement - Investments in LLCs and Limited Partnerships (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) fund | Dec. 31, 2021 USD ($) | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Other investments | $ 262,485 | $ 270,816 |
Private debt funds | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Number of limited partners in investment | fund | 2 | |
Number of LPs to allow redemption by special consent (in funds) | fund | 1 | |
Private debt funds | Minimum | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Anticipated time frame for distribution at the discretion of the LP (years) | 3 years | |
Private debt funds | Maximum | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Anticipated time frame for distribution at the discretion of the LP (years) | 8 years | |
Long/short equity funds | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Payment period for redemption of LP valued at NAV (years) | 30 days | |
Redemption percentage of LP at NAV for which initial payment is limited (percent) | 90% | |
Non-public equity funds | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Anticipated time frame for distribution at the discretion of the LP (years) | 10 years | |
Structured credit fund | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Prior notice requirement notice for one funds | 180 days | |
Investment in unconsolidated subsidiaries | Private debt funds | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | $ 2,125 | |
Other investments | 19,620 | 18,465 |
Investment in unconsolidated subsidiaries | Long/short equity funds | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | 0 | |
Other investments | 5,089 | 655 |
Investment in unconsolidated subsidiaries | Non-public equity funds | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | 50,856 | |
Other investments | 144,560 | 160,219 |
Investment in unconsolidated subsidiaries | Structured credit fund | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | 36,460 | |
Other investments | 49,245 | 47,300 |
Investment in unconsolidated subsidiaries | Strategy focused fund | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Unfunded Commitments | 14,500 | |
Other investments | $ 43,971 | $ 44,177 |
Fair Value Measurement - Method
Fair Value Measurement - Methodologies Other Than Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Financial assets: | ||
Other assets | $ 28,819 | $ 40,581 |
Financial liabilities: | ||
Other liabilities | 27,905 | 52,332 |
Carrying Value | Senior Notes | ||
Financial liabilities: | ||
Debt instruments | 250,000 | 250,000 |
Carrying Value | Contribution Certificates | ||
Financial liabilities: | ||
Debt instruments | 177,525 | 175,900 |
Fair Value | ||
Financial assets: | ||
Other assets | 28,790 | 40,583 |
Financial liabilities: | ||
Other liabilities | 27,905 | 52,332 |
Fair Value | Senior Notes | ||
Financial liabilities: | ||
Debt instruments | 248,153 | 264,000 |
Fair Value | Contribution Certificates | ||
Financial liabilities: | ||
Debt instruments | 134,479 | 179,892 |
BOLI | Carrying Value | ||
Financial assets: | ||
Other investments | 81,746 | 81,767 |
BOLI | Fair Value | ||
Financial assets: | ||
Other investments | 81,746 | 81,767 |
Other Investments | Carrying Value | ||
Financial assets: | ||
Other investments | 3,322 | 3,183 |
Other Investments | Fair Value | ||
Financial assets: | ||
Other investments | $ 3,322 | $ 3,183 |
Investments - Available-For-Sal
Investments - Available-For-Sale Fixed Maturities (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | $ 3,852,411,000 | $ 3,814,847,000 | |
Allowance for Expected Credit Losses | 427,000 | 0 | $ 552,000 |
Gross Unrealized Gains | 1,827,000 | 49,690,000 | |
Gross Unrealized Losses | 381,339,000 | 30,815,000 | |
Estimated Fair Value | 3,472,472,000 | 3,833,722,000 | |
U.S. Treasury obligations | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 243,999,000 | 239,765,000 | |
Allowance for Expected Credit Losses | 0 | ||
Gross Unrealized Gains | 8,000 | 1,166,000 | |
Gross Unrealized Losses | 22,399,000 | 2,424,000 | |
Estimated Fair Value | 221,608,000 | 238,507,000 | |
U.S. Government-sponsored enterprise obligations | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 21,562,000 | 20,467,000 | |
Allowance for Expected Credit Losses | 0 | ||
Gross Unrealized Gains | 0 | 29,000 | |
Gross Unrealized Losses | 1,628,000 | 262,000 | |
Estimated Fair Value | 19,934,000 | 20,234,000 | |
State and municipal bonds | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 483,584,000 | 511,750,000 | |
Allowance for Expected Credit Losses | 0 | ||
Gross Unrealized Gains | 177,000 | 9,620,000 | |
Gross Unrealized Losses | 44,311,000 | 2,174,000 | |
Estimated Fair Value | 439,450,000 | 519,196,000 | |
Corporate debt | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 1,980,579,000 | 1,884,455,000 | |
Allowance for Expected Credit Losses | 0 | 0 | $ 552,000 |
Gross Unrealized Gains | 735,000 | 29,050,000 | |
Gross Unrealized Losses | 199,862,000 | 14,949,000 | |
Estimated Fair Value | 1,781,452,000 | 1,898,556,000 | |
Residential mortgage-backed securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 450,870,000 | 455,438,000 | |
Allowance for Expected Credit Losses | 229,000 | 0 | |
Gross Unrealized Gains | 555,000 | 4,254,000 | |
Gross Unrealized Losses | 61,656,000 | 5,751,000 | |
Estimated Fair Value | 389,540,000 | 453,941,000 | |
Agency commercial mortgage-backed securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 10,576,000 | 13,909,000 | |
Allowance for Expected Credit Losses | 0 | ||
Gross Unrealized Gains | 0 | 294,000 | |
Gross Unrealized Losses | 872,000 | 62,000 | |
Estimated Fair Value | 9,704,000 | 14,141,000 | |
Other commercial mortgage-backed securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 217,021,000 | 231,226,000 | |
Allowance for Expected Credit Losses | 0 | ||
Gross Unrealized Gains | 63,000 | 2,530,000 | |
Gross Unrealized Losses | 22,994,000 | 2,273,000 | |
Estimated Fair Value | 194,090,000 | 231,483,000 | |
Other asset-backed securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 444,220,000 | 457,837,000 | |
Allowance for Expected Credit Losses | 198,000 | ||
Gross Unrealized Gains | 289,000 | 2,747,000 | |
Gross Unrealized Losses | 27,617,000 | 2,920,000 | |
Estimated Fair Value | $ 416,694,000 | $ 457,664,000 |
Investments - Available-For-S_2
Investments - Available-For-Sale Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fixed maturities, available-for-sale | ||
Amortized Cost | $ 3,852,411 | $ 3,814,847 |
Total Fair Value | 3,472,472 | 3,833,722 |
U.S. Treasury obligations | ||
Fixed maturities, available-for-sale | ||
Amortized Cost | 243,999 | 239,765 |
Due in one year or less | 23,523 | |
Due after one year through five years | 139,958 | |
Due after five years through ten years | 56,909 | |
Due after ten years | 1,218 | |
Total Fair Value | 221,608 | 238,507 |
U.S. Government-sponsored enterprise obligations | ||
Fixed maturities, available-for-sale | ||
Amortized Cost | 21,562 | 20,467 |
Due in one year or less | 2,195 | |
Due after one year through five years | 13,790 | |
Due after five years through ten years | 3,949 | |
Due after ten years | 0 | |
Total Fair Value | 19,934 | 20,234 |
State and municipal bonds | ||
Fixed maturities, available-for-sale | ||
Amortized Cost | 483,584 | 511,750 |
Due in one year or less | 37,427 | |
Due after one year through five years | 144,161 | |
Due after five years through ten years | 151,294 | |
Due after ten years | 106,568 | |
Total Fair Value | 439,450 | 519,196 |
Corporate debt | ||
Fixed maturities, available-for-sale | ||
Amortized Cost | 1,980,579 | 1,884,455 |
Due in one year or less | 174,542 | |
Due after one year through five years | 854,788 | |
Due after five years through ten years | 654,558 | |
Due after ten years | 97,564 | |
Total Fair Value | 1,781,452 | 1,898,556 |
Residential mortgage-backed securities | ||
Fixed maturities, available-for-sale | ||
Amortized Cost | 450,870 | 455,438 |
Total Fair Value | 389,540 | 453,941 |
Agency commercial mortgage-backed securities | ||
Fixed maturities, available-for-sale | ||
Amortized Cost | 10,576 | 13,909 |
Total Fair Value | 9,704 | 14,141 |
Other commercial mortgage-backed securities | ||
Fixed maturities, available-for-sale | ||
Amortized Cost | 217,021 | 231,226 |
Total Fair Value | 194,090 | 231,483 |
Other asset-backed securities | ||
Fixed maturities, available-for-sale | ||
Amortized Cost | 444,220 | 457,837 |
Total Fair Value | $ 416,694 | $ 457,664 |
Investments - Available-For-S_3
Investments - Available-For-Sale Securities Narrative (Details) $ in Millions | Dec. 31, 2022 USD ($) investment | Jun. 30, 2022 USD ($) |
Debt Securities, Available-for-sale [Line Items] | ||
Number of investment in any entity or affiliates greater than 10% of stockholders' equity | investment | 0 | |
Threshold limit of investments based on shareholders' equity (percent) | 10% | |
Securities on deposit with state insurance departments | $ 51.6 | |
FAL Deposit return by cash | 5.6 | $ 5.5 |
Fixed maturities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Required FAL deposit | 23.8 | |
Cash and Cash Equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Required FAL deposit | 1 | |
Asset Pledged as Collateral | ||
Debt Securities, Available-for-sale [Line Items] | ||
Securities on deposit with state insurance departments | $ 31.3 |
Investments - Investments Held
Investments - Investments Held in a Loss Position (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair value | ||
Fair value, total | $ 3,333,683 | $ 2,088,498 |
Fair value, less than 12 months | 1,300,381 | 1,947,941 |
Fair value, 12 months or longer | 2,033,302 | 140,557 |
Unrealized Loss | ||
Unrealized loss, total | 381,339 | 30,815 |
Unrealized loss, less than 12 months | 84,907 | 25,389 |
Unrealized loss, 12 months or longer | 296,432 | 5,426 |
U.S. Treasury obligations | ||
Fair value | ||
Fair value, total | 220,991 | 190,054 |
Fair value, less than 12 months | 53,199 | 181,689 |
Fair value, 12 months or longer | 167,792 | 8,365 |
Unrealized Loss | ||
Unrealized loss, total | 22,399 | 2,424 |
Unrealized loss, less than 12 months | 2,393 | 2,206 |
Unrealized loss, 12 months or longer | 20,006 | 218 |
U.S. Government-sponsored enterprise obligations | ||
Fair value | ||
Fair value, total | 19,934 | 16,287 |
Fair value, less than 12 months | 8,082 | 16,287 |
Fair value, 12 months or longer | 11,852 | 0 |
Unrealized Loss | ||
Unrealized loss, total | 1,628 | 262 |
Unrealized loss, less than 12 months | 663 | 262 |
Unrealized loss, 12 months or longer | 965 | 0 |
State and municipal bonds | ||
Fair value | ||
Fair value, total | 421,769 | 175,442 |
Fair value, less than 12 months | 177,393 | 171,930 |
Fair value, 12 months or longer | 244,376 | 3,512 |
Unrealized Loss | ||
Unrealized loss, total | 44,311 | 2,174 |
Unrealized loss, less than 12 months | 12,352 | 2,039 |
Unrealized loss, 12 months or longer | 31,959 | 135 |
Corporate debt | ||
Fair value | ||
Fair value, total | 1,708,529 | 945,196 |
Fair value, less than 12 months | 687,947 | 866,731 |
Fair value, 12 months or longer | 1,020,582 | 78,465 |
Unrealized Loss | ||
Unrealized loss, total | 199,862 | 14,949 |
Unrealized loss, less than 12 months | 42,977 | 11,828 |
Unrealized loss, 12 months or longer | 156,885 | 3,121 |
Residential mortgage-backed securities | ||
Fair value | ||
Fair value, total | 363,945 | 326,248 |
Fair value, less than 12 months | 155,212 | 290,019 |
Fair value, 12 months or longer | 208,733 | 36,229 |
Unrealized Loss | ||
Unrealized loss, total | 61,656 | 5,751 |
Unrealized loss, less than 12 months | 15,275 | 4,320 |
Unrealized loss, 12 months or longer | 46,381 | 1,431 |
Agency commercial mortgage-backed securities | ||
Fair value | ||
Fair value, total | 9,704 | 4,529 |
Fair value, less than 12 months | 3,086 | 4,355 |
Fair value, 12 months or longer | 6,618 | 174 |
Unrealized Loss | ||
Unrealized loss, total | 872 | 62 |
Unrealized loss, less than 12 months | 110 | 54 |
Unrealized loss, 12 months or longer | 762 | 8 |
Other commercial mortgage-backed securities | ||
Fair value | ||
Fair value, total | 192,359 | 151,827 |
Fair value, less than 12 months | 53,270 | 145,467 |
Fair value, 12 months or longer | 139,089 | 6,360 |
Unrealized Loss | ||
Unrealized loss, total | 22,994 | 2,273 |
Unrealized loss, less than 12 months | 4,087 | 1,884 |
Unrealized loss, 12 months or longer | 18,907 | 389 |
Other asset-backed securities | ||
Fair value | ||
Fair value, total | 396,452 | 278,915 |
Fair value, less than 12 months | 162,192 | 271,463 |
Fair value, 12 months or longer | 234,260 | 7,452 |
Unrealized Loss | ||
Unrealized loss, total | 27,617 | 2,920 |
Unrealized loss, less than 12 months | 7,050 | 2,796 |
Unrealized loss, 12 months or longer | $ 20,567 | $ 124 |
Investments - Investments Hel_2
Investments - Investments Held in a Loss Position Narrative (Details) $ in Millions | Dec. 31, 2022 USD ($) issuer security | Dec. 31, 2021 USD ($) issuer security |
Debt Securities, Available-for-sale [Line Items] | ||
Business owned life insurance cost | $ 42 | |
NORCAL Group | ||
Debt Securities, Available-for-sale [Line Items] | ||
Business owned life insurance cost | $ 10 | |
Non Government-Backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities in unrealized loss position (in securities) | security | 2,901 | 1,766 |
Debt securities in unrealized loss position as percentage of total debt securities held (percent) | 74.40% | 45.80% |
Issuers in unrealized loss position (in issuers) | issuer | 1,433 | 998 |
Single greatest unrealized loss position | $ 5.7 | $ 0.4 |
Second greatest unrealized loss position | $ 4.1 | $ 0.4 |
Investments - Credit Losses Rel
Investments - Credit Losses Related to Debt Securities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | |||
Allowance for credit loss beginning balance | $ 0 | $ 552,000 | |
No allowance for credit losses has been previously recognized | 980,000 | ||
Securities for which there is an intent to sell or will more likely than not be sold before recovery of amortized cost | (553,000) | 0 | $ 0 |
Securities sold during the period | (552,000) | ||
Allowance for credit loss ending balance | 427,000 | 0 | 552,000 |
Corporate debt | |||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | |||
Allowance for credit loss beginning balance | 0 | 552,000 | |
No allowance for credit losses has been previously recognized | 553,000 | ||
Securities for which there is an intent to sell or will more likely than not be sold before recovery of amortized cost | (553,000) | ||
Securities sold during the period | (552,000) | ||
Allowance for credit loss ending balance | 0 | 0 | $ 552,000 |
Residential mortgage-backed securities | |||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | |||
Allowance for credit loss beginning balance | 0 | ||
No allowance for credit losses has been previously recognized | 229,000 | ||
Securities for which there is an intent to sell or will more likely than not be sold before recovery of amortized cost | 0 | ||
Allowance for credit loss ending balance | 229,000 | 0 | |
Other asset-backed securities | |||
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | |||
Allowance for credit loss beginning balance | 0 | ||
No allowance for credit losses has been previously recognized | 198,000 | ||
Securities for which there is an intent to sell or will more likely than not be sold before recovery of amortized cost | 0 | ||
Allowance for credit loss ending balance | $ 198,000 | $ 0 |
Investments - Sales and Purchas
Investments - Sales and Purchases of Available-for-Sale Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |||
Proceeds from sales (exclusive of maturities and paydowns) | $ 131,000 | $ 504,000 | $ 354,400 |
Purchases | $ 607,790 | $ 1,438,169 | $ 917,037 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Securities, Available-for-sale [Line Items] | |||
Investment fees and expenses | $ (8,292) | $ (11,121) | $ (6,385) |
Net investment income | 95,972 | 70,522 | 71,998 |
Fixed maturities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Net investment income (loss) | 93,736 | 74,437 | 69,308 |
Equities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Net investment income (loss) | 3,706 | 2,539 | 4,369 |
Short-term investments, including Other | |||
Debt Securities, Available-for-sale [Line Items] | |||
Net investment income (loss) | 5,681 | 1,969 | 2,683 |
BOLI | |||
Debt Securities, Available-for-sale [Line Items] | |||
BOLI | $ 1,141 | $ 2,698 | $ 2,023 |
Investments - Investments in Un
Investments - Investments in Unconsolidated Subsidiaries (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Schedule of Equity Method Investments [Line Items] | ||
Investment in unconsolidated subsidiaries | $ 305,210 | $ 335,576 |
Qualified affordable housing project tax credit partnerships | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in unconsolidated subsidiaries | 4,088 | 12,424 |
All other investments, primarily investment fund LPs/LLCs | ||
Schedule of Equity Method Investments [Line Items] | ||
Investment in unconsolidated subsidiaries | $ 301,122 | $ 323,152 |
Investments - Investments in _2
Investments - Investments in Unconsolidated Subsidiaries Narrative (Details) $ in Thousands | Dec. 31, 2022 USD ($) business | Dec. 31, 2021 USD ($) partnership |
Debt Securities, Available-for-sale [Line Items] | ||
Investment in unconsolidated subsidiaries | $ 305,210 | $ 335,576 |
Number of LPs / LLCs with investment ownership percent over 25% (in businesses) | business | 3 | |
Tax Credit Partnerships Almost 100% Ownership | ||
Debt Securities, Available-for-sale [Line Items] | ||
Number of tax credit partnerships almost 100% ownership percentage (in investment interest) | partnership | 2 | |
Investment in unconsolidated subsidiaries | $ 3,200 | |
Tax Credit Partnerships Less Than 20% Ownership | ||
Debt Securities, Available-for-sale [Line Items] | ||
Investment in unconsolidated subsidiaries | $ 4,100 | 9,200 |
Other Limited Partnerships and Limited Liability Company, Greater Than 25 Percent Ownership | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage ownership | 25% | |
Investment in unconsolidated subsidiaries | $ 36,000 | 49,000 |
Other Limited Partnerships and Limited Liability Company Less than 25% Ownership | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage ownership | 25% | |
Investment in unconsolidated subsidiaries | $ 265,100 | $ 274,200 |
Maximum | Tax Credit Partnerships Almost 100% Ownership | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage ownership | 100% | |
Maximum | Tax Credit Partnerships Less Than 20% Ownership | ||
Debt Securities, Available-for-sale [Line Items] | ||
Percentage ownership | 20% |
Investments - Equity in Earning
Investments - Equity in Earnings (Loss) of Unconsolidated Subsidiaries (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |||
Losses recorded | $ 8,278 | $ 15,239 | $ 18,684 |
Tax credits recognized | 4,805 | 13,160 | 17,465 |
Losses (gains) recorded | (1,212) | (182) | 1,092 |
Tax credits recognized | $ 0 | $ 0 | $ 412 |
Investments - Equity in Earni_2
Investments - Equity in Earnings (Loss) of Unconsolidated Subsidiaries Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards | $ 51.2 | ||
Tax Year 2019 | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards | 0.5 | ||
Tax Year 2039 | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit carryforwards | 51.2 | ||
Tax Credit from Tax Credit Partnership Investments | Tax Year 2020 | |||
Tax Credit Carryforward [Line Items] | |||
Tax credit partnership investments | $ 4.8 | $ 13.2 | $ 17.9 |
Investments - Financial Informa
Investments - Financial Information for Significant Investment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||||||
Total assets | $ 5,699,999 | $ 6,191,477 | |||||
Total liabilities | 4,595,981 | 4,763,090 | |||||
Total Shareholders’ Equity | 1,104,018 | 1,428,387 | $ 1,349,210 | $ 1,511,913 | |||
Net investment income (loss) | 95,972 | 70,522 | 71,998 | ||||
Total net investment gains (losses) | (33,157) | 24,310 | 15,678 | ||||
Net gain (loss) attributable to ProAssurance | $ (402) | $ 144,124 | $ (175,727) | ||||
Significant Equity Method Investees | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Total assets | $ 2,727,876 | $ 3,544,866 | |||||
Total liabilities | 140,157 | 230,133 | |||||
Total Shareholders’ Equity | 2,587,719 | 3,314,733 | |||||
Net investment income (loss) | 13,009 | 2,506 | $ (16,557) | ||||
Net investment gains (losses) | 47,824 | 219,089 | 655 | ||||
Net change in unrealized appreciation (depreciation) | 135,218 | 490,761 | 123,942 | ||||
Operating Expenses | 4,870 | 6,527 | 7,528 | ||||
Total net investment gains (losses) | 191,181 | 705,829 | 100,512 | ||||
Net gain (loss) attributable to ProAssurance | $ (375) | $ 10,171 | $ (8,296) |
Investments - Net Realized Inve
Investments - Net Realized Investment Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Securities, Available-for-sale [Line Items] | ||||
Total impairment losses: | $ (1,772) | $ 0 | $ (1,745) | |
Portion of impairment losses recognized in other comprehensive income before taxes: | 14 | 0 | 237 | |
Net impairment losses recognized in earnings | (1,758) | 0 | (1,508) | |
Gross realized gains, available-for-sale fixed maturities | 1,740 | 14,311 | 13,855 | |
Gross realized (losses), available-for-sale fixed maturities | (3,387) | (1,218) | (2,501) | |
Net realized gains (losses), trading fixed maturities | (155) | (20) | 288 | |
Net realized gains (losses), equity investments | (5,252) | 7,337 | 13,192 | |
Net realized gains (losses), other investments | (222) | 8,660 | 3,883 | |
Change in unrealized holding gains (losses), trading fixed maturities | (613) | (529) | 501 | |
Change in unrealized holding gains (losses), equity investments | (22,166) | (2,941) | (16,287) | |
Change in unrealized holding gains (losses), convertible securities, carried at fair value | (10,557) | (1,701) | 3,850 | |
Other | 9,213 | 411 | 405 | |
Total net investment gains (losses) | (33,157) | 24,310 | 15,678 | |
NORCAL Group | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Gain on fair value of contingent consideration | $ 9,000 | |||
Corporate debt | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Total impairment losses: | (1,331) | 0 | (1,745) | |
Portion of impairment losses recognized in other comprehensive income before taxes: | 0 | 0 | 237 | |
Asset-backed securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Total impairment losses: | (441) | 0 | 0 | |
Portion of impairment losses recognized in other comprehensive income before taxes: | $ 14 | $ 0 | $ 0 |
Investments - Net Realized In_2
Investments - Net Realized Investment Gains (Losses) Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) bond | |
Investments, Debt and Equity Securities [Abstract] | |||
Net impairment losses recognized in earning | $ | $ 1,758 | $ 0 | $ 1,508 |
Portion of impairment losses recognized in other comprehensive income (loss) before taxes | $ | $ 14 | $ 0 | $ 237 |
Corporate Bonds With Credit Related Impairment Losses | bond | 4 | ||
Number of corporate bonds | bond | 3 |
Investments - Roll Forward of C
Investments - Roll Forward of Cumulative Credit Losses Recorded in Earnings (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Securities, Available-for-sale, Allowance for Credit Loss [Roll Forward] | |||
Allowance for credit loss beginning balance | $ 0 | $ 552 | $ 470 |
No impairment has been previously recognized | 610 | 0 | 1,064 |
Impairment has been previously recognized | 0 | 0 | 258 |
Securities sold during the period (realized) | 0 | (552) | (1,240) |
Securities for which there is an intent to sell or will more likely than not be sold before recovery of amortized cost | (553) | 0 | 0 |
Allowance for credit loss ending balance | $ 57 | $ 0 | $ 552 |
Reinsurance - Premiums Written
Reinsurance - Premiums Written and Earned (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of the effect of reinsurance on premiums written and earned | |||
Direct premiums written | $ 1,048,690 | $ 912,387 | $ 814,298 |
Assumed premiums written | 55,304 | 47,637 | 40,124 |
Ceded premiums written | (89,857) | (77,303) | (106,721) |
Net premiums written | 1,014,137 | 882,721 | 747,701 |
Direct premiums earned | 1,058,263 | 1,020,107 | 862,742 |
Assumed premiums earned | 56,175 | 45,559 | 43,555 |
Ceded premiums earned | (84,857) | (93,998) | (113,582) |
Net premiums earned | 1,029,581 | 971,668 | 792,715 |
Losses and loss adjustment expenses | 839,717 | 798,893 | 741,719 |
Reinsurance recoveries | (62,955) | (46,644) | (80,272) |
Net losses and loss adjustment expenses | $ 776,762 | $ 752,249 | $ 661,447 |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) reinsurer | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Ceded Credit Risk [Line Items] | |||
Premium ceded increase (reduction) amount | $ (2,800,000) | $ (3,900,000) | $ 700,000 |
Amount due from reinsurers total | $ 447,800,000 | ||
Number of major reinsurers | reinsurer | 0 | ||
Amount of reinsurance recoverables collateralized by letters of credit | $ 90,600,000 | ||
Allowance for created losses related to reinsurance receivables | 0 | 0 | |
Loss on uncollectible accounts in the period | 0 | 0 | 0 |
Cash receipt for reinsurance commutations | 15,313,000 | $ 14,599,000 | |
Specialty P&C | |||
Ceded Credit Risk [Line Items] | |||
Amount of reinsurance recoverables collateralized by letters of credit | 7,000,000 | ||
Cash receipt for reinsurance commutations | $ 6,800,000 | ||
Minimum | |||
Ceded Credit Risk [Line Items] | |||
Major reinsurer threshold | $ 54,800,000 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets | ||
Unpaid loss discount | $ 48,735 | $ 51,562 |
Unearned premium adjustment | 22,188 | 22,846 |
Compensation related | 12,285 | 18,575 |
Unrealized losses on investments, net | 80,422 | 0 |
Basis differentials-investments | 2,962 | 0 |
Intangibles | 9,681 | 13,915 |
Operating lease liabilities | 4,124 | 4,290 |
Tax credit carryforward | 53,240 | 48,701 |
Net operating loss carryforward | 27,891 | 18,596 |
Other | 815 | 909 |
Total gross deferred tax assets | 262,343 | 179,394 |
Valuation allowance | (18,384) | (8,945) |
Total deferred tax assets, net of valuation allowance | 243,959 | 170,449 |
Deferred tax liabilities | ||
Deferred policy acquisition costs | (12,511) | (12,284) |
Unpaid loss discount-transition | (5,270) | (7,276) |
Unrealized gains on investments, net | 0 | (4,100) |
Fixed assets | (3,865) | (4,013) |
Operating lease ROU assets | (3,911) | (4,030) |
Basis differentials-investments | 0 | (11,277) |
Basis differentials-foreign operations | (928) | (828) |
Intangibles | (7,939) | (9,028) |
Total deferred tax liabilities | (34,424) | (52,836) |
Net deferred tax assets (liabilities) | $ 209,535 | $ 117,613 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Contingency [Line Items] | ||||
Tax credit carryforwards | $ 51,200,000 | |||
Increase (decrease) in valuation allowance | 9,400,000 | $ 400,000 | ||
Deferred tax asset, net | 209,535,000 | 117,613,000 | ||
Income tax receivable | 8,000,000 | 7,900,000 | ||
Uncertain tax positions that would impact effective tax rate | 300,000 | 300,000 | ||
Goodwill impairment | $ 161,100,000 | 0 | 0 | $ 161,115,000 |
Non-deductible goodwill impairment loss | 149,600,000 | |||
Deductible goodwill impairment losses | $ 11,500,000 | |||
NORCAL Group | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards | 36,100,000 | |||
Interest Expense | ||||
Income Tax Contingency [Line Items] | ||||
Accrued liability for interest | 500,000 | 400,000 | ||
Inova Re | ||||
Income Tax Contingency [Line Items] | ||||
Deferred tax asset, net | 500,000 | 600,000 | ||
Tax Year 2019 | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards | 25,600,000 | |||
Tax credit carryforwards | 500,000 | |||
Income tax refund, CARES Act | 9,000,000 | |||
Tax Year 2020 | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards | 33,300,000 | |||
Income tax refund, CARES Act | 11,700,000 | |||
Federal | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards | 65,100,000 | |||
State | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards | 126,800,000 | |||
Valuation allowance related to NOL carryforwards | 5,800,000 | 3,200,000 | ||
Foreign | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards | 27,700,000 | |||
Valuation allowance related to NOL carryforwards | $ 11,900,000 | $ 5,000,000 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of unrecognized tax benefits | |||
Balance at January 1 | $ 3,020 | $ 5,199 | $ 5,070 |
Decreases for tax positions taken during the current year | (99) | (1,630) | (4,853) |
Increases for tax positions taken during prior years | 1,839 | 0 | 5,342 |
Decreases relating to a lapse of the applicable statute of limitations | (1,137) | (549) | (360) |
Balance at December 31 | $ 3,623 | $ 3,020 | $ 5,199 |
Income Taxes - Components of Ta
Income Taxes - Components of Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current expense (benefit) | |||
Federal and foreign | $ 793 | $ 885 | $ (19,885) |
State | 14 | 279 | (296) |
Total current expense (benefit) | 807 | 1,164 | (20,181) |
Deferred expense (benefit) | |||
Federal and foreign | (6,826) | 1,290 | (20,476) |
State | 205 | 29 | (672) |
Total deferred expense (benefit) | (6,621) | 1,319 | (21,148) |
Total income tax expense (benefit) | $ (5,814) | $ 2,483 | $ (41,329) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Tax Expense (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of expected income tax expense to actual income tax expense | ||||
Computed “expected” tax expense (benefit) | $ (1,305,000) | $ 30,787,000 | $ (45,582,000) | |
Tax-exempt income | (1,072,000) | (1,298,000) | (976,000) | |
Tax credits | (4,805,000) | (13,160,000) | (17,876,000) | |
Non-U.S. operating results | (411,000) | (1,322,000) | (1,307,000) | |
Tax deficiency (excess tax benefit) on share-based compensation | 309,000 | 286,000 | 457,000 | |
Tax rate differential on loss carryback | 0 | 0 | (7,758,000) | |
Goodwill impairment | 0 | 0 | 31,413,000 | |
Change in limitation of future deductibility of certain executive compensation | 708,000 | 303,000 | 75,000 | |
Non-taxable gain on bargain purchase | 0 | (15,626,000) | 0 | |
Non-taxable contingent consideration | (1,890,000) | 0 | 0 | |
GILTI and subpart F income | 556,000 | 721,000 | 800,000 | |
Provision-to-return and other differences | 1,112,000 | 3,574,000 | 1,217,000 | |
Change in uncertain tax positions | 780,000 | (1,909,000) | (1,674,000) | |
State income taxes | 105,000 | 460,000 | (561,000) | |
Other | 99,000 | (333,000) | 443,000 | |
Total income tax expense (benefit) | (5,814,000) | 2,483,000 | (41,329,000) | |
Goodwill impairment | $ (161,100,000) | $ 0 | $ 0 | $ (161,115,000) |
Non-deductible goodwill impairment loss | 149,600,000 | |||
Deductible goodwill impairment losses | $ 11,500,000 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 USD ($) | Dec. 31, 2022 USD ($) reporting_unit segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Goodwill [Line Items] | ||||
Number of reportable segments | segment | 5 | |||
Number of reporting units | reporting_unit | 2 | |||
Goodwill impairment | $ | $ 161,100,000 | $ 0 | $ 0 | $ 161,115,000 |
Number of reporting units with goodwill less than carrying amount | reporting_unit | 2 | |||
Specialty P&C | ||||
Goodwill [Line Items] | ||||
Goodwill impairment | $ | $ 161,100,000 | $ 0 | $ 0 |
Goodwill - Carrying Amount of G
Goodwill - Carrying Amount of Goodwill (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | $ 49,610,000 | $ 49,610,000 | ||
Accumulated impairment losses | $ (161,100,000) | 0 | 0 | $ (161,115,000) |
Goodwill, ending balance | 49,610,000 | 49,610,000 | 49,610,000 | |
Specialty P&C | ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | 0 | 0 | ||
Accumulated impairment losses | $ (161,100,000) | 0 | 0 | |
Goodwill, ending balance | 0 | 0 | 0 | |
Workers' Compensation Insurance | ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | 44,110,000 | 44,110,000 | ||
Accumulated impairment losses | 0 | 0 | ||
Goodwill, ending balance | 44,110,000 | 44,110,000 | 44,110,000 | |
Segregated Portfolio Cell Reinsurance | ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance | 5,500,000 | 5,500,000 | ||
Accumulated impairment losses | 0 | 0 | ||
Goodwill, ending balance | $ 5,500,000 | $ 5,500,000 | $ 5,500,000 |
Reserve for Losses and Loss A_3
Reserve for Losses and Loss Adjustment Expenses - Narrative and Activity in the Reserve (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Loss Contingencies [Line Items] | ||||
Minimum period for claims resolution (years) | 5 years | |||
Summary of reserve for losses and loss adjustment expenses | ||||
Balance, beginning of year | $ 3,579,940 | $ 2,417,179 | $ 2,346,526 | |
Less reinsurance recoverables on unpaid losses and loss adjustment expenses | 451,741 | 385,087 | 390,708 | |
Net balance, beginning of year | 3,128,199 | 2,032,092 | 1,955,818 | |
Net reserves acquired from acquisitions | 0 | 1,089,103 | 0 | |
Net losses: | ||||
Current year | 813,515 | 797,732 | 711,846 | |
Favorable development of reserves established in prior years, net | (36,753) | (45,483) | (50,399) | |
Total | 776,762 | 752,249 | 661,447 | |
Paid related to: | ||||
Current year | (108,139) | (109,925) | (83,204) | |
Prior years | (757,564) | (635,320) | (501,969) | |
Total paid | (865,703) | (745,245) | (585,173) | |
Net balance, end of year | 3,039,258 | 3,128,199 | 2,032,092 | |
Plus reinsurance recoverables on unpaid losses and loss adjustment expenses | 431,889 | 451,741 | 385,087 | |
Balance, end of year | 3,471,147 | 3,579,940 | 2,417,179 | |
Specialty P&C | ||||
Loss Contingencies [Line Items] | ||||
Prior year claims and claims adjustment expense, from covid 19 | $ 1,000 | 9,000 | ||
Net losses: | ||||
Current year | 639,734 | 608,106 | 497,554 | |
Favorable development of reserves established in prior years, net | (29,819) | (32,942) | (27,480) | |
Specialty P&C | Retroactive insurance contract | ||||
Net losses: | ||||
Current year | $ 60,000 | |||
NORCAL Group | ||||
Summary of reserve for losses and loss adjustment expenses | ||||
Net reserves acquired from acquisitions | 1,100,000 | |||
Net losses: | ||||
Current year | 4,900 | 6,700 | ||
Favorable development of reserves established in prior years, net | 10,800 | 7,900 | ||
Paid related to: | ||||
Current year | (16,600) | (22,300) | ||
Prior years | $ (262,500) | $ (136,000) |
Reserve for Losses and Loss A_4
Reserve for Losses and Loss Adjustment Expenses - Claim Development (Details) $ in Thousands | 12 Months Ended | |||||||||
Dec. 31, 2022 USD ($) claim | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2018 USD ($) | Dec. 31, 2017 USD ($) | Dec. 31, 2016 USD ($) | Dec. 31, 2015 USD ($) | Dec. 31, 2014 USD ($) | Dec. 31, 2013 USD ($) | |
Claims Development [Line Items] | ||||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | $ 2,756,974 | |||||||||
Healthcare Professional Liability claims-made | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 5,374,716 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 3,514,391 | |||||||||
All outstanding liabilities before 2013, net of reinsurance | 19,514 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 1,879,839 | |||||||||
Healthcare Professional Liability claims-made | 2013 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 455,583 | $ 457,038 | $ 455,346 | $ 451,182 | $ 466,798 | $ 480,036 | $ 489,378 | $ 501,580 | $ 513,937 | $ 527,520 |
Incurred but Not Reported Liabilities (IBNR) | $ (29) | |||||||||
Cumulative Number of Reported Claims | claim | 7,699 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 439,029 | 435,158 | 430,916 | 415,012 | 398,549 | 376,930 | 328,982 | 255,605 | 142,759 | 30,214 |
Healthcare Professional Liability claims-made | 2014 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 464,976 | 466,554 | 470,189 | 468,153 | 474,317 | 488,185 | 491,403 | 494,024 | 509,774 | |
Incurred but Not Reported Liabilities (IBNR) | $ 566 | |||||||||
Cumulative Number of Reported Claims | claim | 7,523 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 446,402 | 439,575 | 434,540 | 416,150 | 389,983 | 325,782 | 246,510 | 125,078 | 30,483 | |
Healthcare Professional Liability claims-made | 2015 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 503,628 | 503,600 | 500,550 | 500,336 | 491,180 | 492,824 | 486,760 | 503,412 | ||
Incurred but Not Reported Liabilities (IBNR) | $ (4,337) | |||||||||
Cumulative Number of Reported Claims | claim | 7,409 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 476,664 | 463,224 | 446,069 | 410,506 | 351,703 | 256,791 | 125,234 | 26,664 | ||
Healthcare Professional Liability claims-made | 2016 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 557,097 | 560,840 | 554,395 | 555,416 | 507,586 | 488,349 | 484,153 | |||
Incurred but Not Reported Liabilities (IBNR) | $ (542) | |||||||||
Cumulative Number of Reported Claims | claim | 7,986 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 499,431 | 472,441 | 440,163 | 378,828 | 276,548 | 137,338 | 27,442 | |||
Healthcare Professional Liability claims-made | 2017 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 557,620 | 573,570 | 569,737 | 577,401 | 506,207 | 508,072 | ||||
Incurred but Not Reported Liabilities (IBNR) | $ (14,294) | |||||||||
Cumulative Number of Reported Claims | claim | 8,067 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 467,423 | 419,180 | 351,548 | 288,695 | 147,515 | 32,342 | ||||
Healthcare Professional Liability claims-made | 2018 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 642,948 | 636,023 | 630,169 | 643,864 | 544,617 | |||||
Incurred but Not Reported Liabilities (IBNR) | $ (62,313) | |||||||||
Cumulative Number of Reported Claims | claim | 8,478 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 450,952 | 367,522 | 279,204 | 159,657 | 34,238 | |||||
Healthcare Professional Liability claims-made | 2019 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 646,676 | 642,370 | 664,934 | 670,958 | ||||||
Incurred but Not Reported Liabilities (IBNR) | $ (22,209) | |||||||||
Cumulative Number of Reported Claims | claim | 8,452 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 364,411 | 259,889 | 144,225 | 37,755 | ||||||
Healthcare Professional Liability claims-made | 2020 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 557,651 | 574,274 | 593,994 | |||||||
Incurred but Not Reported Liabilities (IBNR) | $ (21,795) | |||||||||
Cumulative Number of Reported Claims | claim | 6,689 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 234,804 | 117,153 | 32,270 | |||||||
Healthcare Professional Liability claims-made | 2021 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 524,468 | 527,718 | ||||||||
Incurred but Not Reported Liabilities (IBNR) | $ 78,103 | |||||||||
Cumulative Number of Reported Claims | claim | 5,289 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 110,483 | 23,494 | ||||||||
Healthcare Professional Liability claims-made | 2022 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 464,069 | |||||||||
Incurred but Not Reported Liabilities (IBNR) | $ 269,309 | |||||||||
Cumulative Number of Reported Claims | claim | 4,626 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 24,792 | |||||||||
Healthcare Professional Liability occurrence | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 769,802 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 302,831 | |||||||||
All outstanding liabilities before 2013, net of reinsurance | 5,095 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 472,066 | |||||||||
Healthcare Professional Liability occurrence | 2013 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 47,144 | 48,116 | 47,550 | 49,270 | 50,632 | 56,640 | 53,905 | 49,970 | 54,143 | 51,996 |
Incurred but Not Reported Liabilities (IBNR) | $ 998 | |||||||||
Cumulative Number of Reported Claims | claim | 640 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 44,419 | 43,254 | 42,455 | 40,775 | 37,778 | 30,474 | 25,131 | 12,130 | 4,620 | 539 |
Healthcare Professional Liability occurrence | 2014 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 35,839 | 35,139 | 33,353 | 34,428 | 37,653 | 40,699 | 44,075 | 43,606 | 45,975 | |
Incurred but Not Reported Liabilities (IBNR) | $ 1,179 | |||||||||
Cumulative Number of Reported Claims | claim | 543 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 31,285 | 30,407 | 27,753 | 25,671 | 22,649 | 17,349 | 11,192 | 4,674 | 512 | |
Healthcare Professional Liability occurrence | 2015 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 61,198 | 56,468 | 51,276 | 52,455 | 57,606 | 56,621 | 54,890 | 52,531 | ||
Incurred but Not Reported Liabilities (IBNR) | $ 391 | |||||||||
Cumulative Number of Reported Claims | claim | 615 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 52,017 | 41,800 | 36,413 | 28,482 | 20,627 | 9,953 | 2,617 | (180) | ||
Healthcare Professional Liability occurrence | 2016 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 68,674 | 64,122 | 66,886 | 56,345 | 53,358 | 49,795 | 56,089 | |||
Incurred but Not Reported Liabilities (IBNR) | $ 2,300 | |||||||||
Cumulative Number of Reported Claims | claim | 710 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 54,324 | 48,691 | 40,766 | 28,362 | 15,433 | 2,750 | 44 | |||
Healthcare Professional Liability occurrence | 2017 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 50,652 | 46,865 | 44,449 | 40,983 | 42,338 | 45,463 | ||||
Incurred but Not Reported Liabilities (IBNR) | $ 4,283 | |||||||||
Cumulative Number of Reported Claims | claim | 743 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 30,489 | 19,696 | 11,051 | 3,592 | (3,385) | (6,631) | ||||
Healthcare Professional Liability occurrence | 2018 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 74,419 | 73,599 | 63,576 | 61,880 | 59,351 | |||||
Incurred but Not Reported Liabilities (IBNR) | $ 1,388 | |||||||||
Cumulative Number of Reported Claims | claim | 709 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 37,828 | 26,932 | 15,229 | 6,193 | 444 | |||||
Healthcare Professional Liability occurrence | 2019 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 86,543 | 70,926 | 58,555 | 63,548 | ||||||
Incurred but Not Reported Liabilities (IBNR) | $ 6,155 | |||||||||
Cumulative Number of Reported Claims | claim | 827 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 26,359 | 10,399 | 4,575 | 628 | ||||||
Healthcare Professional Liability occurrence | 2020 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 181,643 | 178,804 | 165,955 | |||||||
Incurred but Not Reported Liabilities (IBNR) | $ 79,785 | |||||||||
Cumulative Number of Reported Claims | claim | 1,641 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 21,100 | 6,194 | 397 | |||||||
Healthcare Professional Liability occurrence | 2021 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 81,254 | 82,590 | ||||||||
Incurred but Not Reported Liabilities (IBNR) | $ 47,133 | |||||||||
Cumulative Number of Reported Claims | claim | 422 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 4,335 | 762 | ||||||||
Healthcare Professional Liability occurrence | 2022 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 82,436 | |||||||||
Incurred but Not Reported Liabilities (IBNR) | $ 78,046 | |||||||||
Cumulative Number of Reported Claims | claim | 135 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 675 | |||||||||
Medical Technology Liability claims-made | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 71,008 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 28,451 | |||||||||
All outstanding liabilities before 2013, net of reinsurance | 36 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 42,593 | |||||||||
Medical Technology Liability claims-made | 2013 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 3,164 | 3,199 | 3,305 | 3,504 | 3,566 | 4,697 | 7,226 | 9,536 | 9,955 | 9,807 |
Incurred but Not Reported Liabilities (IBNR) | $ 60 | |||||||||
Cumulative Number of Reported Claims | claim | 218 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 3,102 | 3,101 | 3,102 | 3,102 | 3,102 | 3,092 | 2,599 | 1,967 | 1,029 | 102 |
Medical Technology Liability claims-made | 2014 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 5,472 | 5,636 | 5,888 | 6,194 | 7,679 | 8,984 | 9,012 | 10,306 | 9,989 | |
Incurred but Not Reported Liabilities (IBNR) | $ 242 | |||||||||
Cumulative Number of Reported Claims | claim | 272 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 4,076 | 4,076 | 4,074 | 3,776 | 3,724 | 3,046 | 2,564 | 1,527 | 388 | |
Medical Technology Liability claims-made | 2015 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 3,499 | 4,192 | 4,664 | 5,081 | 5,929 | 7,193 | 8,757 | 9,376 | ||
Incurred but Not Reported Liabilities (IBNR) | $ 75 | |||||||||
Cumulative Number of Reported Claims | claim | 156 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 2,989 | 2,987 | 2,911 | 2,567 | 2,097 | 1,625 | 440 | 25 | ||
Medical Technology Liability claims-made | 2016 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 5,145 | 4,491 | 6,241 | 6,422 | 7,413 | 8,467 | 9,200 | |||
Incurred but Not Reported Liabilities (IBNR) | $ 689 | |||||||||
Cumulative Number of Reported Claims | claim | 182 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 4,383 | 4,342 | 4,295 | 2,959 | 2,365 | 1,690 | 53 | |||
Medical Technology Liability claims-made | 2017 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 5,351 | 3,381 | 4,919 | 8,306 | 10,143 | 11,049 | ||||
Incurred but Not Reported Liabilities (IBNR) | $ 1,278 | |||||||||
Cumulative Number of Reported Claims | claim | 98 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 4,073 | 2,867 | 2,360 | 2,017 | 1,681 | 56 | ||||
Medical Technology Liability claims-made | 2018 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 4,646 | 4,961 | 7,506 | 8,108 | 10,141 | |||||
Incurred but Not Reported Liabilities (IBNR) | $ 794 | |||||||||
Cumulative Number of Reported Claims | claim | 218 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 3,065 | 2,651 | 1,850 | 191 | 6 | |||||
Medical Technology Liability claims-made | 2019 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 7,658 | 9,588 | 8,324 | 10,072 | ||||||
Incurred but Not Reported Liabilities (IBNR) | $ 1,272 | |||||||||
Cumulative Number of Reported Claims | claim | 361 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 5,321 | 3,902 | 2,552 | 584 | ||||||
Medical Technology Liability claims-made | 2020 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 9,150 | 10,671 | 11,082 | |||||||
Incurred but Not Reported Liabilities (IBNR) | $ 6,637 | |||||||||
Cumulative Number of Reported Claims | claim | 178 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 1,034 | 526 | 40 | |||||||
Medical Technology Liability claims-made | 2021 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 11,909 | 13,914 | ||||||||
Incurred but Not Reported Liabilities (IBNR) | $ 9,562 | |||||||||
Cumulative Number of Reported Claims | claim | 174 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 384 | 4 | ||||||||
Medical Technology Liability claims-made | 2022 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 15,014 | |||||||||
Incurred but Not Reported Liabilities (IBNR) | $ 14,733 | |||||||||
Cumulative Number of Reported Claims | claim | 159 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 24 | |||||||||
Workers' Compensation Insurance | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 987,874 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 863,118 | |||||||||
All outstanding liabilities before 2013, net of reinsurance | 12,558 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 137,314 | |||||||||
Workers' Compensation Insurance | 2013 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 88,557 | 88,930 | 89,560 | 89,760 | 87,260 | 87,260 | 88,010 | 86,928 | 85,935 | 86,973 |
Incurred but Not Reported Liabilities (IBNR) | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 16,429 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 88,074 | 88,033 | 87,772 | 87,466 | 86,783 | 85,689 | 82,369 | 76,813 | 63,825 | 30,554 |
Workers' Compensation Insurance | 2014 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 89,639 | 90,532 | 91,329 | 93,029 | 93,029 | 93,029 | 93,029 | 93,529 | 93,019 | |
Incurred but Not Reported Liabilities (IBNR) | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 16,210 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 89,081 | 88,977 | 88,487 | 87,998 | 87,314 | 85,022 | 77,631 | 65,922 | 30,368 | |
Workers' Compensation Insurance | 2015 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 90,547 | 91,840 | 93,054 | 96,354 | 97,654 | 98,454 | 100,454 | 100,101 | ||
Incurred but Not Reported Liabilities (IBNR) | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 16,551 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 89,089 | 88,476 | 87,884 | 86,528 | 83,483 | 78,947 | 65,070 | 32,078 | ||
Workers' Compensation Insurance | 2016 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 78,808 | 80,751 | 82,799 | 84,799 | 92,148 | 97,348 | 101,348 | |||
Incurred but Not Reported Liabilities (IBNR) | $ 0 | |||||||||
Cumulative Number of Reported Claims | claim | 15,979 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 77,265 | 77,546 | 76,954 | 74,886 | 69,237 | 58,192 | 28,377 | |||
Workers' Compensation Insurance | 2017 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 92,715 | 95,674 | 97,874 | 99,874 | 99,874 | 99,874 | ||||
Incurred but Not Reported Liabilities (IBNR) | $ 311 | |||||||||
Cumulative Number of Reported Claims | claim | 16,085 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 88,953 | 88,504 | 87,129 | 82,289 | 70,333 | 31,586 | ||||
Workers' Compensation Insurance | 2018 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 120,056 | 120,095 | 120,095 | 118,095 | 118,095 | |||||
Incurred but Not Reported Liabilities (IBNR) | $ 1,567 | |||||||||
Cumulative Number of Reported Claims | claim | 18,016 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 114,525 | 110,928 | 104,216 | 86,063 | 41,619 | |||||
Workers' Compensation Insurance | 2019 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 112,534 | 115,352 | 115,852 | 115,852 | ||||||
Incurred but Not Reported Liabilities (IBNR) | $ 1,481 | |||||||||
Cumulative Number of Reported Claims | claim | 17,527 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 105,724 | 100,373 | 84,108 | 40,994 | ||||||
Workers' Compensation Insurance | 2020 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 101,621 | 102,475 | 102,475 | |||||||
Incurred but Not Reported Liabilities (IBNR) | $ 2,785 | |||||||||
Cumulative Number of Reported Claims | claim | 14,526 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 90,174 | 74,532 | 32,447 | |||||||
Workers' Compensation Insurance | 2021 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 108,722 | 105,722 | ||||||||
Incurred but Not Reported Liabilities (IBNR) | $ 4,913 | |||||||||
Cumulative Number of Reported Claims | claim | 15,479 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 81,499 | 39,634 | ||||||||
Workers' Compensation Insurance | 2022 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 104,675 | |||||||||
Incurred but Not Reported Liabilities (IBNR) | $ 29,086 | |||||||||
Cumulative Number of Reported Claims | claim | 14,763 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 38,734 | |||||||||
Segregated Portfolio Cell Reinsurance | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 326,027 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 278,727 | |||||||||
All outstanding liabilities before 2013, net of reinsurance | 480 | |||||||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 47,780 | |||||||||
Segregated Portfolio Cell Reinsurance | 2013 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 25,445 | 25,450 | 25,546 | 25,938 | 26,033 | 26,260 | 26,619 | 26,758 | 25,310 | 23,809 |
Incurred but Not Reported Liabilities (IBNR) | $ 3 | |||||||||
Cumulative Number of Reported Claims | claim | 3,723 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 25,442 | 25,442 | 25,442 | 25,440 | 25,489 | 25,366 | 25,209 | 24,268 | 19,054 | $ 8,131 |
Segregated Portfolio Cell Reinsurance | 2014 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 27,361 | 27,360 | 27,482 | 27,919 | 28,281 | 28,373 | 29,000 | 28,423 | 28,248 | |
Incurred but Not Reported Liabilities (IBNR) | $ 69 | |||||||||
Cumulative Number of Reported Claims | claim | 4,433 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 27,127 | 27,119 | 27,110 | 27,083 | 26,959 | 26,810 | 26,173 | 21,880 | $ 9,933 | |
Segregated Portfolio Cell Reinsurance | 2015 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 25,575 | 25,566 | 26,121 | 26,720 | 27,548 | 28,746 | 32,519 | 36,423 | ||
Incurred but Not Reported Liabilities (IBNR) | $ 130 | |||||||||
Cumulative Number of Reported Claims | claim | 4,949 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 25,266 | 25,144 | 25,125 | 25,033 | 24,781 | 23,977 | 21,706 | $ 11,257 | ||
Segregated Portfolio Cell Reinsurance | 2016 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 28,175 | 28,411 | 28,437 | 29,424 | 30,998 | 34,055 | 37,601 | |||
Incurred but Not Reported Liabilities (IBNR) | $ 304 | |||||||||
Cumulative Number of Reported Claims | claim | 5,327 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 27,583 | 27,585 | 27,211 | 27,162 | 26,285 | 23,003 | $ 10,980 | |||
Segregated Portfolio Cell Reinsurance | 2017 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 32,514 | 32,763 | 32,879 | 34,246 | 38,594 | 42,725 | ||||
Incurred but Not Reported Liabilities (IBNR) | $ 290 | |||||||||
Cumulative Number of Reported Claims | claim | 5,707 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 31,875 | 31,631 | 31,140 | 28,853 | 24,791 | $ 12,404 | ||||
Segregated Portfolio Cell Reinsurance | 2018 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 38,197 | 38,569 | 40,017 | 41,283 | 43,654 | |||||
Incurred but Not Reported Liabilities (IBNR) | $ 1,145 | |||||||||
Cumulative Number of Reported Claims | claim | 6,341 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 36,010 | 35,575 | 33,236 | 27,501 | $ 12,517 | |||||
Segregated Portfolio Cell Reinsurance | 2019 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 37,490 | 38,815 | 42,345 | 48,505 | ||||||
Incurred but Not Reported Liabilities (IBNR) | $ 1,271 | |||||||||
Cumulative Number of Reported Claims | claim | 6,155 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 34,829 | 33,314 | 29,604 | $ 15,100 | ||||||
Segregated Portfolio Cell Reinsurance | 2020 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 36,107 | 38,602 | 40,094 | |||||||
Incurred but Not Reported Liabilities (IBNR) | $ 1,923 | |||||||||
Cumulative Number of Reported Claims | claim | 5,795 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 30,680 | 26,626 | $ 11,238 | |||||||
Segregated Portfolio Cell Reinsurance | 2021 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 37,185 | 39,510 | ||||||||
Incurred but Not Reported Liabilities (IBNR) | $ 4,937 | |||||||||
Cumulative Number of Reported Claims | claim | 5,181 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 26,495 | $ 12,465 | ||||||||
Segregated Portfolio Cell Reinsurance | 2022 | ||||||||||
Claims Development [Line Items] | ||||||||||
Incurred Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | 37,978 | |||||||||
Incurred but Not Reported Liabilities (IBNR) | $ 13,599 | |||||||||
Cumulative Number of Reported Claims | claim | 4,621 | |||||||||
Cumulative Paid Claims and Allocated Claim Adjustment Expenses, Net of Reinsurance | $ 13,420 | |||||||||
Minimum | Healthcare Professional Liability claims-made | ||||||||||
Claims Development [Line Items] | ||||||||||
Initial loss ratio | 83% | |||||||||
Maximum | Healthcare Professional Liability claims-made | ||||||||||
Claims Development [Line Items] | ||||||||||
Initial loss ratio | 106% |
Reserve for Losses and Loss A_5
Reserve for Losses and Loss Adjustment Expenses - Historical Claims Duration (Details) | Dec. 31, 2022 |
Healthcare Professional Liability claims-made | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Historical claims duration, year 1 (percent) | 5.60% |
Historical claims duration, year 2 (percent) | 19.20% |
Historical claims duration, year 3 (percent) | 23.10% |
Historical claims duration, year 4 (percent) | 15.90% |
Historical claims duration, year 5 (percent) | 12% |
Historical claims duration, year 6 (percent) | 6.40% |
Historical claims duration, year 7 (percent) | 4% |
Historical claims duration, year 8 (percent) | 2.40% |
Historical claims duration, year 9 (percent) | 1.20% |
Historical claims duration, year 10 (percent) | 0.80% |
Healthcare Professional Liability occurrence | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Historical claims duration, year 1 (percent) | (0.70%) |
Historical claims duration, year 2 (percent) | 6.10% |
Historical claims duration, year 3 (percent) | 13.20% |
Historical claims duration, year 4 (percent) | 18.60% |
Historical claims duration, year 5 (percent) | 14.80% |
Historical claims duration, year 6 (percent) | 13.90% |
Historical claims duration, year 7 (percent) | 7.30% |
Historical claims duration, year 8 (percent) | 9.20% |
Historical claims duration, year 9 (percent) | 2.10% |
Historical claims duration, year 10 (percent) | 2.50% |
Medical Technology Liability | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Historical claims duration, year 1 (percent) | 2.10% |
Historical claims duration, year 2 (percent) | 18% |
Historical claims duration, year 3 (percent) | 20.10% |
Historical claims duration, year 4 (percent) | 13.70% |
Historical claims duration, year 5 (percent) | 14.30% |
Historical claims duration, year 6 (percent) | 6.90% |
Historical claims duration, year 7 (percent) | 2.10% |
Historical claims duration, year 8 (percent) | 0% |
Historical claims duration, year 9 (percent) | 0% |
Historical claims duration, year 10 (percent) | 0% |
Workers' Compensation Insurance | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Historical claims duration, year 1 (percent) | 35% |
Historical claims duration, year 2 (percent) | 38.70% |
Historical claims duration, year 3 (percent) | 14.40% |
Historical claims duration, year 4 (percent) | 6% |
Historical claims duration, year 5 (percent) | 2.80% |
Historical claims duration, year 6 (percent) | 0.90% |
Historical claims duration, year 7 (percent) | 0.40% |
Historical claims duration, year 8 (percent) | 0.50% |
Historical claims duration, year 9 (percent) | 0.20% |
Historical claims duration, year 10 (percent) | 0% |
Segregated Portfolio Cell Reinsurance | |
Short-duration Insurance Contracts, Historical Claims Duration [Line Items] | |
Historical claims duration, year 1 (percent) | 36.20% |
Historical claims duration, year 2 (percent) | 40.70% |
Historical claims duration, year 3 (percent) | 13.20% |
Historical claims duration, year 4 (percent) | 4.30% |
Historical claims duration, year 5 (percent) | 0.70% |
Historical claims duration, year 6 (percent) | 0.70% |
Historical claims duration, year 7 (percent) | 0% |
Historical claims duration, year 8 (percent) | 0.20% |
Historical claims duration, year 9 (percent) | 0% |
Historical claims duration, year 10 (percent) | 0% |
Reserve for Losses and Loss A_6
Reserve for Losses and Loss Adjustment Expenses - Reconciliation of Claims Development (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | $ 2,756,974 | |||
Total reinsurance recoverable on unpaid losses and loss adjustment expenses | 431,889 | $ 451,741 | $ 385,087 | $ 390,708 |
Reserve for the future utilization of the DDR benefit | 110,496 | |||
Unallocated loss adjustment expenses | 143,026 | |||
Loss portfolio transfers | 5,423 | |||
Purchase accounting adjustments | 23,442 | |||
Other | (103) | |||
Liability for unpaid claims and claim adjustment expense | 282,284 | |||
Gross liability for losses and loss adjustment expenses | 3,471,147 | $ 3,579,940 | $ 2,417,179 | $ 2,346,526 |
Healthcare Professional Liability claims-made | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 1,879,839 | |||
Total reinsurance recoverable on unpaid losses and loss adjustment expenses | 251,223 | |||
Healthcare Professional Liability occurrence | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 472,066 | |||
Total reinsurance recoverable on unpaid losses and loss adjustment expenses | 38,299 | |||
Medical Technology Liability | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 42,593 | |||
Total reinsurance recoverable on unpaid losses and loss adjustment expenses | 33,625 | |||
Workers' Compensation Insurance | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 137,314 | |||
Total reinsurance recoverable on unpaid losses and loss adjustment expenses | 38,733 | |||
Segregated Portfolio Cell Reinsurance | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 47,780 | |||
Total reinsurance recoverable on unpaid losses and loss adjustment expenses | 24,946 | |||
Other short-duration lines | ||||
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items] | ||||
Liabilities for losses and loss adjustment expenses, net of reinsurance | 177,382 | |||
Total reinsurance recoverable on unpaid losses and loss adjustment expenses | $ 45,063 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) £ in Millions | 1 Months Ended | 12 Months Ended | ||||||
Nov. 30, 2021 | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2022 GBP (£) | Jul. 01, 2022 GBP (£) | Jun. 30, 2022 USD ($) | May 05, 2021 USD ($) | |
Other Commitments [Line Items] | ||||||||
Outstanding borrowings | $ 0 | |||||||
FAL Deposit return by cash | 5,600,000 | $ 5,500,000 | ||||||
Contingent consideration | 15,000,000 | $ 24,000,000 | $ 0 | |||||
NORCAL Group | ||||||||
Other Commitments [Line Items] | ||||||||
Contingent consideration, maximum estimate | $ 84,000,000 | |||||||
Contingent consideration | $ 15,000,000 | 24,000,000 | $ 24,000,000 | |||||
Data analytics services | ||||||||
Other Commitments [Line Items] | ||||||||
Non-renew notice, period | 6 months | |||||||
Period of long-term purchase commitment | 3 years | |||||||
Contractual obligation, due in next year | $ 3,500,000 | |||||||
Extension period for long-term purchase commitment | 1 year | |||||||
Operating expense | $ 3,600,000 | $ 2,600,000 | $ 4,300,000 | |||||
Contractual obligation | 6,300,000 | |||||||
Funding commitments | ||||||||
Other Commitments [Line Items] | ||||||||
Funding commitments related to non-public investment entities | 189,500,000 | |||||||
Lloyd's Syndicates | ||||||||
Other Commitments [Line Items] | ||||||||
Current lending capacity under revolving credit agreement | 18,100,000 | £ 15 | £ 15 | |||||
Unused commitments | $ 36,200,000 | £ 30 | ||||||
Non-renew notice, period | 30 days | |||||||
Auto-renewal period prior to maturity date | 1 year | |||||||
Interest rate on revolving credit agreement (percent) | 3.80% | 3.80% | ||||||
Required FAL deposit | $ 24,800,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Lessee, Lease, Description [Line Items] | |
Renewal term | 10 years |
Option to terminate period | 1 year |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lease terms | 9 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Operating lease expense | $ 5,395,000 | $ 5,047,000 | $ 4,355,000 |
Sublease income | (469,000) | (263,000) | (143,000) |
Net lease expense | 4,926,000 | 4,784,000 | 4,212,000 |
Short-term lease, cost | 0 | 0 | 0 |
Rental income | $ 2,600,000 | $ 2,500,000 | $ 2,500,000 |
Leases - Supplemental Lease Inf
Leases - Supplemental Lease Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | |||
Operating lease ROU assets | $ 18,987 | $ 19,595 | |
Operating lease liabilities | $ 20,008 | $ 20,844 | |
Weighted-average remaining lease term | 7 years 4 months 13 days | 7 years 18 days | |
Weighted-average discount rate | 3.22% | 2.84% | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 5,574 | $ 5,775 | $ 4,221 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 4,573 | |
2024 | 3,127 | |
2025 | 2,577 | |
2026 | 2,310 | |
2027 | 2,314 | |
Thereafter | 7,613 | |
Total future minimum lease payments | 22,514 | |
Less: Imputed interest | 2,506 | |
Total operating lease liabilities | $ 20,008 | $ 20,844 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total principal | $ 427,525 | $ 425,900 |
Less unamortized debt issuance costs | 542 | 914 |
Debt less unamortized debt issuance costs | 426,983 | 424,986 |
Contribution Certificates | ||
Debt Instrument [Line Items] | ||
Total principal | $ 177,525 | 175,900 |
Interest rate | 3% | |
Effective interest rate | 4.35% | |
Senior Notes | Senior notes due 2023 | ||
Debt Instrument [Line Items] | ||
Total principal | $ 250,000 | $ 250,000 |
Interest rate | 5.30% |
Debt - Narrative (Details)
Debt - Narrative (Details) | 12 Months Ended | |||
May 05, 2021 USD ($) | Dec. 31, 2022 USD ($) lender | Dec. 31, 2021 USD ($) | Dec. 01, 2019 USD ($) | |
Contribution Certificates | NORCAL Group | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 191,000,000 | |||
Debt instruments | 175,000,000 | |||
Premium paid on derivative for right to receive cash payments | $ 16,000,000 | |||
Debt instrument term | 10 years | |||
Senior Notes | Base Rate | Senior notes due 2023 | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate for debt | 0.40% | |||
Line of Credit | Revolving Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Number of participating lenders | lender | 7 | |||
Line of credit facility, maximum borrowing | $ 250,000,000 | |||
Additional borrowing capacity | $ 50,000,000 | |||
Line of credit, borrowing capacity including accordion feature | 300,000,000 | |||
Long-Term Line of Credit | $ 0 | $ 0 | ||
Maximum allowable consolidated funded indebtedness ratio (percent) | 0.35 | |||
Minimum net worth required | $ 1,000,000,000 | |||
Line of Credit | Revolving Credit Agreement | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate for debt | 0% | |||
Commitment fee percentages (percent) | 0.15% | |||
Line of Credit | Revolving Credit Agreement | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate for debt | 1.88% | |||
Commitment fee percentages (percent) | 0.30% | |||
Line of Credit | Federal Funds Rate | Revolving Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate for debt | 0.50% | |||
Line of Credit | One month LIBOR | Revolving Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate for debt | 1% |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common shares authorized (in shares) | 100,000,000 | 100,000,000 | ||
Authorized preferred stock (in shares) | 50,000,000 | 50,000,000 | ||
Authorization common shares for the issuance under incentive compensation plans (in shares) | 1,000,000 | |||
Number of shares available for grant (in shares) | 900,000 | |||
Dividends declared | $ 10,800 | $ 10,800 | $ 24,800 | |
Total Shareholders’ Equity | 1,104,018 | 1,428,387 | 1,349,210 | $ 1,511,913 |
Total authorizations which remain available for use | 106,400 | |||
Deferred tax (benefit) expense included in OCI | (85,200) | $ (15,000) | $ 9,600 | |
Retained Earnings, Unappropriated | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total Shareholders’ Equity | $ 395,200 |
Shareholders' Equity - Changes
Shareholders' Equity - Changes in Common Shares (Details) - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Common Stock Outstanding Rollforward [Roll Forward] | ||||
Beginning Balance (in shares) | 53,984 | 53,893 | 53,792 | |
Repurchase of shares (in shares) | (139) | 0 | 0 | |
Repurchase of shares, at cost | $ 3.3 | |||
Shares issued due to vesting of share-based compensation awards (in shares) | 66 | 46 | 54 | |
Other shares issued for compensation (in shares) | 53 | 45 | 47 | |
Common Stock, Shares, Issued, Excluding Treasury Stock | 53,964 | 53,984 | 53,893 | 53,792 |
Ending Balance (in shares) | 53,964 | 53,984 | 53,893 |
Shareholders' Equity - Cash Div
Shareholders' Equity - Cash Dividends Declared (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | |||||||||||||||
Cash dividends declared, per common share (in dollars per share) | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.05 | $ 0.31 | $ 0.20 | $ 0.20 | $ 0.46 |
Shareholders' Equity - Roll For
Shareholders' Equity - Roll Forward of AOCI (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,428,387 | $ 1,349,210 | $ 1,511,913 |
OCI, before reclassifications, net of tax | (317,910) | (48,836) | 46,170 |
Amounts reclassified from AOCI, net of tax | 3,019 | (10,107) | (7,898) |
Net OCI, current period | (314,891) | (58,943) | 38,272 |
Ending balance | 1,104,018 | 1,428,387 | 1,349,210 |
Unrealized Investment Gains (Losses) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 14,929 | 75,388 | 37,333 |
OCI, before reclassifications, net of tax | (314,822) | (50,242) | 46,383 |
Amounts reclassified from AOCI, net of tax | 2,751 | (10,217) | (8,328) |
Net OCI, current period | (312,071) | (60,459) | 38,055 |
Ending balance | (297,142) | 14,929 | 75,388 |
Non-credit Impairments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 0 | (57) | (300) |
OCI, before reclassifications, net of tax | (342) | 0 | (187) |
Amounts reclassified from AOCI, net of tax | 331 | 57 | 430 |
Net OCI, current period | (11) | 57 | 243 |
Ending balance | (11) | 0 | (57) |
Unrecognized Change in Defined Benefit Plan Liabilities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 1,355 | (104) | (78) |
OCI, before reclassifications, net of tax | (2,746) | 1,406 | (26) |
Amounts reclassified from AOCI, net of tax | (63) | 53 | 0 |
Net OCI, current period | (2,809) | 1,459 | (26) |
Ending balance | (1,454) | 1,355 | (104) |
Unrecognized Change in Defined Benefit Plan Liabilities | NORCAL Group | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Net actuarial gain | 200 | ||
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 16,284 | 75,227 | 36,955 |
Ending balance | $ (298,607) | $ 16,284 | $ 75,227 |
Share-Based Payments - Narrativ
Share-Based Payments - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 USD ($) award shares | Dec. 31, 2021 USD ($) award shares | Dec. 31, 2020 USD ($) award shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of award types (in award types) | award | 2 | 2 | 2 |
Restricted Stock and Performance Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected average period (years) | 3 years | ||
Restricted Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected average period (years) | 5 years | ||
Aggregate grant date fair value | $ | $ 4.2 | $ 3.2 | $ 4.7 |
Aggregate intrinsic value | $ | $ 2.6 | $ 1.8 | $ 2.6 |
Vested and released (in shares) | shares | 105,682 | 73,012 | 83,525 |
Performance Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vested and released (in shares) | shares | 0 | 0 | 0 |
Performance Share Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
The percentage of award vest (percent) | 50% | ||
Performance Share Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
The percentage of award vest (percent) | 200% |
Share-Based Payments - Compensa
Share-Based Payments - Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of compensation expense and related tax benefit recognized during each period and compensation cost expense in future periods | |||
Total share-based compensation expense | $ 4,829 | $ 4,390 | $ 3,840 |
Tax benefit recognized | 1,000 | $ 900 | $ 800 |
Unrecognized Compensation Cost, amount | $ 6,500 | ||
Weighted Average Remaining Recognition Period | 1 year 8 months 12 days |
Share-Based Payments - Restrict
Share-Based Payments - Restricted Share Units (Details) - Restricted Share Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary Activity for restricted share units, number of shares | |||
Beginning balance (in shares) | 387,182 | 339,804 | 320,625 |
Granted (in shares) | 195,941 | 131,521 | 111,758 |
Forfeited (in shares) | (12,238) | (11,131) | (9,054) |
Vested and released (in shares) | (105,682) | (73,012) | (83,525) |
Ending balance (in shares) | 465,203 | 387,182 | 339,804 |
Summary Activity for restricted share units, weighted average grant date fair value | |||
Beginning balance (in dollars per share) | $ 30.78 | $ 36.09 | $ 43.99 |
Granted (in dollars per share) | 24.19 | 24.16 | 29.18 |
Forfeited (in dollars per share) | 25.13 | 35.49 | 40.13 |
Vested and released (in dollars per share) | 39.36 | 44.45 | 56.74 |
Ending balance (in dollars per share) | $ 26.21 | $ 30.78 | $ 36.09 |
Share-Based Payments - Performa
Share-Based Payments - Performance Share Units (Details) - Performance Share Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary Activity for restricted share units, number of shares | |||
Beginning balance (in shares) | 137,781 | 90,979 | 100,370 |
Granted (in shares) | 109,542 | 74,004 | 38,609 |
Forfeited (in shares) | 0 | 0 | 0 |
Expired (in shares) | (25,168) | (27,202) | (48,000) |
Ending balance (in shares) | 222,155 | 137,781 | 90,979 |
Summary Activity for restricted share units, weighted average grant date fair value | |||
Beginning balance (in dollars per share) | $ 28.43 | $ 36.87 | $ 50.10 |
Granted (in dollars per share) | 24.19 | 24.04 | 29.18 |
Forfeited (in dollars per share) | 0 | 0 | 0 |
Expired (in dollars per share) | 40.18 | 44.73 | 58.35 |
Ending balance (in dollars per share) | $ 25.01 | $ 28.43 | $ 36.87 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Variable Interest Entity [Line Items] | ||
Total assets | $ 5,699,999 | $ 6,191,477 |
Total liabilities | 4,595,981 | 4,763,090 |
Variable Interest Entity, Primary Beneficiary | PPM RRG | ||
Variable Interest Entity [Line Items] | ||
Total assets | 154,000 | 140,000 |
Surplus notes | 5,000 | |
Total liabilities | 154,000 | 140,000 |
Investment in unconsolidated subsidiaries | Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Total assets | $ 277,500 | $ 303,700 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average number of common shares outstanding, basic (in shares) | 54,008 | 53,962 | 53,863 |
Weighted average number of common shares outstanding, diluted (in shares) | 54,140 | 54,058 | 53,906 |
Effect of dilutive shares on earnings per share (in dollars per share) | $ 0 | $ 0 | $ 0 |
Antidilutive shares excluded from computation of earnings per share (in shares) | 2 | 28 | 114 |
Restricted Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dilutive securities (in shares) | 115 | 92 | 42 |
Performance Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dilutive securities (in shares) | 17 | 4 | 1 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 12 Months Ended |
Dec. 31, 2022 employee segment program | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 5 |
Number of operating segments | 5 |
Workers' Compensation Insurance | |
Segment Reporting Information [Line Items] | |
Number of employees | employee | 1,000 |
Number of programs | program | 2 |
Alternative market solutions percentage ceded | 100% |
Syndicate 1729 | |
Segment Reporting Information [Line Items] | |
Proportion of capital provided to support Lloyd's syndicate (percent) | 5% |
Segment Information - Financial
Segment Information - Financial Data by Segment (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
May 05, 2021 | Dec. 31, 2022 | Sep. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||||||
Net premiums earned | $ 1,029,581,000 | $ 971,668,000 | $ 792,715,000 | |||
Net investment income | 95,972,000 | 70,522,000 | 71,998,000 | |||
Equity in earnings (loss) of unconsolidated subsidiaries | 4,888,000 | 48,974,000 | (11,921,000) | |||
Net investment gains (losses) | (42,157,000) | 24,310,000 | 15,678,000 | |||
Other income (expense) | 9,404,000 | 8,936,000 | 6,470,000 | |||
Net losses and loss adjustment expenses | (776,762,000) | (752,249,000) | (661,447,000) | |||
Underwriting, policy acquisition and operating expenses | (305,476,000) | (243,269,000) | (237,881,000) | |||
SPC U.S. federal income tax expense | (1,759,000) | (1,947,000) | (1,746,000) | |||
SPC dividend (expense) income | (6,673,000) | (10,050,000) | (14,304,000) | |||
Interest expense | (20,372,000) | (19,719,000) | (15,503,000) | |||
Income tax benefit (expense) | 5,423,000 | (4,651,000) | 41,329,000 | |||
Segment results | (7,931,000) | 92,525,000 | (14,612,000) | |||
Contingent consideration | 9,000,000 | 0 | 0 | |||
Gain on bargain purchase | 0 | 74,408,000 | 0 | |||
Goodwill impairment | $ (161,100,000) | 0 | 0 | (161,115,000) | ||
Net income (loss) | (402,000) | 144,124,000 | (175,727,000) | |||
Depreciation and amortization, net of accretion | 38,063,000 | 37,247,000 | 21,375,000 | |||
Total income tax expense (benefit) | (5,814,000) | 2,483,000 | (41,329,000) | |||
NORCAL Group | ||||||
Segment Reporting Information [Line Items] | ||||||
Contingent consideration | $ (9,000,000) | |||||
Gain on bargain purchase | $ 74,400,000 | |||||
Transaction-related costs, net | (1,900,000) | (25,000,000) | (1,800,000) | |||
Total income tax expense (benefit) | (400,000) | 2,200,000 | ||||
Specialty P&C | ||||||
Segment Reporting Information [Line Items] | ||||||
Net premiums earned | 769,773,000 | 695,008,000 | 477,365,000 | |||
Workers' Compensation Insurance | ||||||
Segment Reporting Information [Line Items] | ||||||
Net premiums earned | 166,371,000 | 164,600,000 | 171,772,000 | |||
Segregated Portfolio Cell Reinsurance | ||||||
Segment Reporting Information [Line Items] | ||||||
Net premiums earned | 69,810,000 | 63,688,000 | 66,352,000 | |||
Lloyd's Syndicates | ||||||
Segment Reporting Information [Line Items] | ||||||
Net premiums earned | 23,627,000 | 48,372,000 | 77,226,000 | |||
Operating segments | Specialty P&C | ||||||
Segment Reporting Information [Line Items] | ||||||
Net premiums earned | 769,773,000 | 695,008,000 | 477,365,000 | |||
Net investment income | 0 | 0 | 0 | |||
Equity in earnings (loss) of unconsolidated subsidiaries | 0 | 0 | 0 | |||
Net investment gains (losses) | 0 | 0 | 0 | |||
Other income (expense) | 5,003,000 | 3,370,000 | 3,908,000 | |||
Net losses and loss adjustment expenses | (609,915,000) | (575,164,000) | (470,074,000) | |||
Underwriting, policy acquisition and operating expenses | (192,397,000) | (127,709,000) | (109,599,000) | |||
SPC U.S. federal income tax expense | 0 | 0 | 0 | |||
SPC dividend (expense) income | 0 | 0 | 0 | |||
Interest expense | 0 | 0 | 0 | |||
Income tax benefit (expense) | 0 | 0 | 0 | |||
Segment results | (27,536,000) | (4,495,000) | (98,400,000) | |||
Depreciation and amortization, net of accretion | 10,473,000 | 9,915,000 | 7,747,000 | |||
Operating segments | Workers' Compensation Insurance | ||||||
Segment Reporting Information [Line Items] | ||||||
Net premiums earned | 166,371,000 | 164,600,000 | 171,772,000 | |||
Net investment income | 0 | 0 | 0 | |||
Equity in earnings (loss) of unconsolidated subsidiaries | 0 | 0 | 0 | |||
Net investment gains (losses) | 0 | 0 | 0 | |||
Other income (expense) | 2,201,000 | 2,211,000 | 2,216,000 | |||
Net losses and loss adjustment expenses | (111,407,000) | (114,704,000) | (111,552,000) | |||
Underwriting, policy acquisition and operating expenses | (54,737,000) | (52,418,000) | (56,449,000) | |||
SPC U.S. federal income tax expense | 0 | 0 | 0 | |||
SPC dividend (expense) income | 0 | 0 | 0 | |||
Interest expense | 0 | 0 | 0 | |||
Income tax benefit (expense) | 0 | 0 | 0 | |||
Segment results | 2,428,000 | (311,000) | 5,987,000 | |||
Depreciation and amortization, net of accretion | 3,491,000 | 3,583,000 | 3,690,000 | |||
Operating segments | Segregated Portfolio Cell Reinsurance | ||||||
Segment Reporting Information [Line Items] | ||||||
Net premiums earned | 69,810,000 | 63,688,000 | 66,352,000 | |||
Net investment income | 1,029,000 | 814,000 | 1,084,000 | |||
Equity in earnings (loss) of unconsolidated subsidiaries | 0 | 0 | 0 | |||
Net investment gains (losses) | (3,067,000) | 4,080,000 | 3,085,000 | |||
Other income (expense) | 2,000 | 3,000 | 205,000 | |||
Net losses and loss adjustment expenses | (39,310,000) | (32,569,000) | (29,605,000) | |||
Underwriting, policy acquisition and operating expenses | (20,316,000) | (21,635,000) | (20,709,000) | |||
SPC U.S. federal income tax expense | (1,759,000) | (1,947,000) | (1,746,000) | |||
SPC dividend (expense) income | (6,673,000) | (10,050,000) | (14,304,000) | |||
Interest expense | 0 | 0 | 0 | |||
Income tax benefit (expense) | 0 | 0 | 0 | |||
Segment results | (284,000) | 2,384,000 | 4,362,000 | |||
Depreciation and amortization, net of accretion | 1,186,000 | 1,475,000 | 676,000 | |||
Operating segments | Lloyd's Syndicates | ||||||
Segment Reporting Information [Line Items] | ||||||
Net premiums earned | 23,627,000 | 48,372,000 | 77,226,000 | |||
Net investment income | 568,000 | 1,961,000 | 4,128,000 | |||
Equity in earnings (loss) of unconsolidated subsidiaries | 0 | 0 | 0 | |||
Net investment gains (losses) | (964,000) | 249,000 | 988,000 | |||
Other income (expense) | 119,000 | 912,000 | 51,000 | |||
Net losses and loss adjustment expenses | (16,130,000) | (29,812,000) | (50,216,000) | |||
Underwriting, policy acquisition and operating expenses | (7,412,000) | (17,957,000) | (30,136,000) | |||
SPC U.S. federal income tax expense | 0 | 0 | 0 | |||
SPC dividend (expense) income | 0 | 0 | 0 | |||
Interest expense | 0 | 0 | 0 | |||
Income tax benefit (expense) | 0 | 0 | 29,000 | |||
Segment results | (192,000) | 3,725,000 | 2,070,000 | |||
Depreciation and amortization, net of accretion | 41,000 | 66,000 | (4,000) | |||
Operating segments | Corporate | ||||||
Segment Reporting Information [Line Items] | ||||||
Net premiums earned | 0 | 0 | 0 | |||
Net investment income | 94,375,000 | 67,747,000 | 66,786,000 | |||
Equity in earnings (loss) of unconsolidated subsidiaries | 4,888,000 | 48,974,000 | (11,921,000) | |||
Net investment gains (losses) | (38,126,000) | 19,981,000 | 11,605,000 | |||
Other income (expense) | 6,198,000 | 5,531,000 | 2,531,000 | |||
Net losses and loss adjustment expenses | 0 | 0 | 0 | |||
Underwriting, policy acquisition and operating expenses | (34,733,000) | (26,641,000) | (23,429,000) | |||
SPC U.S. federal income tax expense | 0 | 0 | 0 | |||
SPC dividend (expense) income | 0 | 0 | 0 | |||
Interest expense | (20,372,000) | (19,719,000) | (15,503,000) | |||
Income tax benefit (expense) | 5,423,000 | (4,651,000) | 41,300,000 | |||
Segment results | 17,653,000 | 91,222,000 | 71,369,000 | |||
Depreciation and amortization, net of accretion | 22,872,000 | 22,208,000 | 9,266,000 | |||
Inter-segment Eliminations | ||||||
Segment Reporting Information [Line Items] | ||||||
Net premiums earned | 0 | 0 | 0 | |||
Net investment income | 0 | 0 | 0 | |||
Equity in earnings (loss) of unconsolidated subsidiaries | 0 | 0 | 0 | |||
Net investment gains (losses) | 0 | 0 | 0 | |||
Other income (expense) | (4,119,000) | (3,091,000) | (2,441,000) | |||
Net losses and loss adjustment expenses | 0 | 0 | 0 | |||
Underwriting, policy acquisition and operating expenses | 4,119,000 | 3,091,000 | 2,441,000 | |||
SPC U.S. federal income tax expense | 0 | 0 | 0 | |||
SPC dividend (expense) income | 0 | 0 | 0 | |||
Interest expense | 0 | 0 | 0 | |||
Income tax benefit (expense) | 0 | 0 | 0 | |||
Segment results | 0 | 0 | 0 | |||
Depreciation and amortization, net of accretion | 0 | 0 | 0 | |||
Segment Reconciling Items | ||||||
Segment Reporting Information [Line Items] | ||||||
Contingent consideration | (9,000,000) | |||||
Gain on bargain purchase | 74,408,000 | |||||
Goodwill impairment | $ (161,115,000) | |||||
Transaction-related costs, net | $ (1,471,000) | $ (22,809,000) |
Segment Information - Gross Pre
Segment Information - Gross Premiums Earned by Product (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Ceded premiums earned | $ (84,857) | $ (93,998) | $ (113,582) |
Net premiums earned | 1,029,581 | 971,668 | 792,715 |
Specialty P&C Segment | |||
Segment Reporting Information [Line Items] | |||
Ceded premiums earned | (64,727) | (66,403) | (74,457) |
Net premiums earned | 769,773 | 695,008 | 477,365 |
Specialty P&C Segment | HCPL | |||
Segment Reporting Information [Line Items] | |||
Gross premiums earned | 684,514 | 616,614 | 411,716 |
Specialty P&C Segment | Small Business Unit | |||
Segment Reporting Information [Line Items] | |||
Gross premiums earned | 107,382 | 105,605 | 104,376 |
Specialty P&C Segment | Medical Technology Liability | |||
Segment Reporting Information [Line Items] | |||
Gross premiums earned | 41,323 | 38,508 | 34,909 |
Specialty P&C Segment | Other | |||
Segment Reporting Information [Line Items] | |||
Gross premiums earned | 1,281 | 684 | 821 |
Workers' Compensation Insurance Segment | |||
Segment Reporting Information [Line Items] | |||
Ceded premiums earned | (86,081) | (79,065) | (83,712) |
Net premiums earned | 166,371 | 164,600 | 171,772 |
Workers' Compensation Insurance Segment | Traditional business | |||
Segment Reporting Information [Line Items] | |||
Gross premiums earned | 179,558 | 175,459 | 184,204 |
Workers' Compensation Insurance Segment | Alternative market business | |||
Segment Reporting Information [Line Items] | |||
Gross premiums earned | 72,894 | 68,206 | 71,280 |
Segregated Portfolio Cell Reinsurance Segment | |||
Segment Reporting Information [Line Items] | |||
Ceded premiums earned | (9,537) | (8,671) | (8,760) |
Net premiums earned | 69,810 | 63,688 | 66,352 |
Segregated Portfolio Cell Reinsurance Segment | HCPL | |||
Segment Reporting Information [Line Items] | |||
Gross premiums earned | 10,799 | 7,336 | 6,594 |
Segregated Portfolio Cell Reinsurance Segment | Workers' compensation | |||
Segment Reporting Information [Line Items] | |||
Gross premiums earned | 68,548 | 65,023 | 68,518 |
Lloyd's Syndicates Segment | |||
Segment Reporting Information [Line Items] | |||
Gross premiums earned | 27,486 | 60,590 | 98,990 |
Ceded premiums earned | (3,859) | (12,218) | (21,764) |
Net premiums earned | $ 23,627 | $ 48,372 | $ 77,226 |
Benefit Plans - Narrative (Deta
Benefit Plans - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
May 05, 2021 | Jun. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Contribution Plan Disclosure [Line Items] | ||||||
Incurred expense related to savings and retirement plans | $ 4,300 | $ 4,100 | $ 5,500 | |||
ProAssurance deferred compensation liabilities total | $ 27,905 | $ 52,332 | ||||
Defined benefit pension plan for annual compensation | 5 years | |||||
Maximum | ||||||
Defined Contribution Plan Disclosure [Line Items] | ||||||
Percentage of benefit plan contribution by employer (percent) | 10% | 5% | 5% | 10% |
Benefit Plans - Changes in PBO
Benefit Plans - Changes in PBO and Fair Value of Plan Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Change in benefit obligation: | |||
Defined benefit plan, benefit obligation, beginning balance | $ 106,899 | $ 0 | |
Acquired PBO from NORCAL acquisition | 0 | 107,895 | |
Interest cost | $ 2,885 | $ 2,030 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest expense | Interest expense | |
Actuarial (gain) loss | $ (25,735) | $ 2,872 | |
Benefits paid | (3,251) | (1,149) | |
Settlement payments | (6,568) | (4,749) | |
Defined benefit plan, benefit obligation, ending balance | 74,230 | 106,899 | |
Change in fair value of plan assets: | |||
Defined benefit plan beginning balance | 110,444 | 0 | |
Fair value of plan assets acquired from NORCAL | 0 | 109,443 | |
Actual return on plan assets | (25,198) | 6,899 | |
Benefits paid | (3,251) | (1,149) | |
Settlement payments | (6,568) | (4,749) | |
Defined benefit plan ending balance | 75,427 | 110,444 | |
Funded (underfunded) status of the plan | 1,197 | 3,545 | |
Amount recognized in Consolidated Balance Sheets at December 31 | 1,197 | 3,545 | |
Net actuarial (gain) loss recognized in AOCI and not yet reflected in net periodic benefit cost (income) | $ 1,845 | $ (1,468) | $ 0 |
Benefit Plans - Net Periodic Be
Benefit Plans - Net Periodic Benefit Cost Credit (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Components of net periodic benefit cost (income): | ||
Interest cost | $ 2,885 | $ 2,030 |
Gain on settlement | 163 | (65) |
Pension Plan | ||
Components of net periodic benefit cost (income): | ||
Interest cost | 2,885 | 2,030 |
Expected return on plan assets | (4,013) | (2,494) |
Gain on settlement | 163 | (65) |
Total net periodic benefit cost (income) | (965) | (529) |
Other changes recognized in OCI: | ||
Net actuarial (gain) loss | 3,476 | (1,533) |
Reclassification of gain on settlement | (163) | 65 |
(Gain) loss recognized in OCI | 3,313 | (1,468) |
Total recognized in net periodic benefit cost (income) and OCI | $ 2,348 | $ (1,997) |
Benefit Plans - Recognized Comp
Benefit Plans - Recognized Components (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Change In Amounts Not Yet Recognized As Components Of Net Periodic Benefit Cost (Income) [Roll Forward] | ||
Items not yet recognized as a component of net periodic benefit cost (income), beginning balance | $ (1,468) | $ 0 |
Net actuarial (gain) loss | 3,476 | (1,533) |
Reclassification of gain (loss) on settlement | $ (163) | $ 65 |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Settlement Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other comprehensive income (loss), after tax, net of reclassification adjustments | Other comprehensive income (loss), after tax, net of reclassification adjustments |
Items not yet recognized as a component of net periodic benefit cost (income), ending balance | $ 1,845 | $ (1,468) |
Amounts recognized in AOCI | $ 1,845 | $ (1,468) |
Benefit Plans - Weighted Averag
Benefit Plans - Weighted Average Discount Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | May 05, 2021 | |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Benefit Obligation [Abstract] | |||
Weighted average discount rate | 5.13% | 2.78% | 2.95% |
Defined Benefit Plan, Weighted Average Assumptions Used in Calculating Net Periodic Benefit Cost [Abstract] | |||
Weighted average discount rate | 5.13% | 2.95% | |
Weighted average expected return on plan assets | 4% | 3.75% |
Benefit Plans - Pension Plan_s
Benefit Plans - Pension Plan’s Target Allocations (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation | 100% | 100% |
Fixed maturities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation | 90% | 79% |
Equity investments | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation | 10% | 18% |
Real estate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Target allocation | 0% | 3% |
Benefit Plans - Fair Values of
Benefit Plans - Fair Values of the Assets in the Pension Plan (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | $ 75,427 | $ 110,444 | $ 0 |
Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | 3,617 | 0 |
Level 3 | Real estate | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | 3,617 | $ 0 |
Fair Value, Recurring | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 75,427 | 110,444 | |
Fair Value, Recurring | Large cap equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 5,341 | 13,703 | |
Fair Value, Recurring | Mid cap equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 586 | ||
Fair Value, Recurring | Small cap equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 229 | ||
Fair Value, Recurring | International equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 2,410 | 5,581 | |
Fair Value, Recurring | Corporate and government debt | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 67,676 | 86,728 | |
Fair Value, Recurring | Real estate | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 3,617 | ||
Fair Value, Recurring | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 73,017 | 14,518 | |
Fair Value, Recurring | Level 1 | Large cap equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 5,341 | 13,703 | |
Fair Value, Recurring | Level 1 | Mid cap equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 586 | ||
Fair Value, Recurring | Level 1 | Small cap equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 229 | ||
Fair Value, Recurring | Level 1 | International equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | 0 | |
Fair Value, Recurring | Level 1 | Corporate and government debt | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 67,676 | 0 | |
Fair Value, Recurring | Level 1 | Real estate | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | ||
Fair Value, Recurring | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 2,410 | 92,309 | |
Fair Value, Recurring | Level 2 | Large cap equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | 0 | |
Fair Value, Recurring | Level 2 | Mid cap equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | ||
Fair Value, Recurring | Level 2 | Small cap equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | ||
Fair Value, Recurring | Level 2 | International equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 2,410 | 5,581 | |
Fair Value, Recurring | Level 2 | Corporate and government debt | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | 86,728 | |
Fair Value, Recurring | Level 2 | Real estate | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | ||
Fair Value, Recurring | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | 3,617 | |
Fair Value, Recurring | Level 3 | Large cap equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | 0 | |
Fair Value, Recurring | Level 3 | Mid cap equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | ||
Fair Value, Recurring | Level 3 | Small cap equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | ||
Fair Value, Recurring | Level 3 | International equity investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | 0 | 0 | |
Fair Value, Recurring | Level 3 | Corporate and government debt | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | $ 0 | 0 | |
Fair Value, Recurring | Level 3 | Real estate | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Plan assets | $ 3,617 |
Benefit Plans - Changes in the
Benefit Plans - Changes in the Fair Value of Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Defined benefit plan beginning balance | $ 110,444 | $ 0 |
Defined benefit plan ending balance | 75,427 | 110,444 |
Level 3 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Defined benefit plan beginning balance | 3,617 | 0 |
Relating to assets still held at the reporting date: | ||
Investment return | 6 | 613 |
Transfers out | (3,623) | (379) |
Defined benefit plan ending balance | 0 | 3,617 |
Level 3 | NORCAL Group | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Acquired balance, May 5, 2021 | 3,383 | |
Real estate | Level 3 | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Defined benefit plan beginning balance | 3,617 | 0 |
Relating to assets still held at the reporting date: | ||
Investment return | 6 | 613 |
Transfers out | (3,623) | (379) |
Defined benefit plan ending balance | $ 0 | 3,617 |
Real estate | Level 3 | NORCAL Group | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | ||
Acquired balance, May 5, 2021 | $ 3,383 |
Benefit Plans - Paid in Future
Benefit Plans - Paid in Future Periods (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Retirement Benefits [Abstract] | |
2023 | $ 5,540 |
2024 | 4,420 |
2025 | 4,580 |
2026 | 5,040 |
2027 | 4,910 |
Thereafter | 28,870 |
Total | $ 53,360 |
Statutory Accounting and Divi_3
Statutory Accounting and Dividend Restrictions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Insurance [Abstract] | |||
Statutory Net Income (Loss) | $ 69 | $ 83 | $ 81 |
Statutory Capital and Surplus | 1,392 | $ 1,463 | |
Net assets held at domestic insurance subsidiaries | 1,200 | ||
Statutory dividend payments permitted from insurance subsidiaries | $ 133 |
Schedule I - Summary of Inves_2
Schedule I - Summary of Investments - Other Than Investments In Related Parties (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | $ 4,756,673 |
Fair Value | 4,387,683 |
Amount Which is Presented in the Balance Sheet | 4,387,683 |
U.S. Government or government agencies and authorities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | 284,759 |
Fair Value | 260,113 |
Amount Which is Presented in the Balance Sheet | 260,113 |
States, municipalities and political subdivisions | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | 483,584 |
Fair Value | 439,450 |
Amount Which is Presented in the Balance Sheet | 439,450 |
Foreign governments | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | 31,259 |
Fair Value | 29,597 |
Amount Which is Presented in the Balance Sheet | 29,597 |
Public utilities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | 98,891 |
Fair Value | 90,106 |
Amount Which is Presented in the Balance Sheet | 90,106 |
All other corporate bonds | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | 1,876,190 |
Fair Value | 1,686,524 |
Amount Which is Presented in the Balance Sheet | 1,686,524 |
Asset-backed securities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | 1,122,777 |
Fair Value | 1,010,116 |
Amount Which is Presented in the Balance Sheet | 1,010,116 |
Total Fixed Maturities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | 3,897,460 |
Fair Value | 3,515,906 |
Amount Which is Presented in the Balance Sheet | 3,515,906 |
Public utilities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | 604 |
Fair Value | 527 |
Amount Which is Presented in the Balance Sheet | 527 |
Banks, trusts and insurance companies | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | 15,813 |
Fair Value | 12,372 |
Amount Which is Presented in the Balance Sheet | 12,372 |
Industrial, miscellaneous and all other | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | 146,012 |
Fair Value | 130,839 |
Amount Which is Presented in the Balance Sheet | 130,839 |
Equities | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | 162,429 |
Fair Value | 143,738 |
Amount Which is Presented in the Balance Sheet | 143,738 |
Other long-term investments | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | 451,269 |
Fair Value | 482,726 |
Amount Which is Presented in the Balance Sheet | 482,726 |
Short-term investments | |
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Line Items] | |
Recorded Cost Basis | 245,515 |
Fair Value | 245,313 |
Amount Which is Presented in the Balance Sheet | $ 245,313 |
Schedule II - Condensed Finan_2
Schedule II - Condensed Financial Information of Registrant - Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||||
Fixed maturities available for sale, at fair value | $ 3,472,472 | $ 3,833,722 | ||
Short-term investments | 245,313 | 216,987 | ||
Investment in unconsolidated subsidiaries | 305,210 | 335,576 | ||
Cash and cash equivalents | 29,959 | 143,602 | ||
Other assets | 126,858 | 138,110 | ||
Total Assets | 5,699,999 | 6,191,477 | ||
Liabilities | ||||
Dividends payable | 2,698 | 2,698 | $ 2,694 | |
Other liabilities | 226,379 | 280,732 | ||
Debt less debt issuance costs | 426,983 | 424,986 | ||
Total Liabilities | 4,595,981 | 4,763,090 | ||
Shareholders’ Equity: | ||||
Common stock | 634 | 633 | ||
Total Shareholders' Equity | 1,104,018 | 1,428,387 | 1,349,210 | $ 1,511,913 |
Total Liabilities and Shareholders' Equity | 5,699,999 | 6,191,477 | ||
Parent Company | ||||
Assets | ||||
Investment in subsidiaries, at equity | 1,265,389 | 1,605,892 | ||
Fixed maturities available for sale, at fair value | 25,681 | 0 | ||
Short-term investments | 39,119 | 43,270 | ||
Investment in unconsolidated subsidiaries | 915 | 915 | ||
Cash and cash equivalents | 6,122 | 18,115 | ||
Due from subsidiaries | 3,267 | 2,166 | ||
Other assets | 17,161 | 14,584 | ||
Total Assets | 1,357,654 | 1,684,942 | ||
Liabilities | ||||
Dividends payable | 2,698 | 2,698 | $ 2,694 | |
Other liabilities | 1,480 | 4,771 | ||
Debt less debt issuance costs | 249,458 | 249,086 | ||
Total Liabilities | 253,636 | 256,555 | ||
Shareholders’ Equity: | ||||
Common stock | 634 | 633 | ||
Other shareholders’ equity, including unrealized gains (losses) on securities of subsidiaries | 1,103,384 | 1,427,754 | ||
Total Shareholders' Equity | 1,104,018 | 1,428,387 | ||
Total Liabilities and Shareholders' Equity | $ 1,357,654 | $ 1,684,942 |
Schedule II - Condensed Finan_3
Schedule II - Condensed Financial Information of Registrant - Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | |||
Net investment income (loss) | $ 95,972 | $ 70,522 | $ 71,998 |
Other income (loss) | 9,404 | 8,936 | 6,470 |
Total revenues | 1,106,688 | 1,124,410 | 874,940 |
Expenses | |||
Interest expense | 20,372 | 19,719 | 15,503 |
Total expenses | 1,112,904 | 1,052,211 | 1,091,996 |
Income tax expense (benefit) | (5,814) | 2,483 | (41,329) |
Net income (loss) | (402) | 144,124 | (175,727) |
Other comprehensive income (loss) | (314,891) | (58,943) | 38,272 |
Comprehensive income (loss) | (315,293) | 85,181 | (137,455) |
Parent Company | |||
Revenues | |||
Net investment income (loss) | (663) | (1,470) | 331 |
Net investment gains (losses) | 0 | 1,159 | 2,194 |
Other income (loss) | 1,970 | 2,359 | 12 |
Total revenues | 1,307 | 2,048 | 2,537 |
Expenses | |||
Interest expense | 14,445 | 14,549 | 14,260 |
Other expenses | 32,513 | 29,094 | 21,458 |
Total expenses | 46,958 | 43,643 | 35,718 |
Income (loss) before income tax expense (benefit) and equity in net income (loss) of consolidated subsidiaries | (45,651) | (41,595) | (33,181) |
Income tax expense (benefit) | (7,994) | (9,833) | 11,404 |
Income (loss) before equity in net income (loss) of consolidated subsidiaries | (37,657) | (31,762) | (44,585) |
Equity in net income (loss) of consolidated subsidiaries | 37,255 | 175,886 | (131,142) |
Net income (loss) | (402) | 144,124 | (175,727) |
Other comprehensive income (loss) | (314,891) | (58,943) | 38,272 |
Comprehensive income (loss) | $ (315,293) | $ 85,181 | $ (137,455) |
Schedule II - Condensed Finan_4
Schedule II - Condensed Financial Information of Registrant - Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net cash provided (used) by operating activities | $ (29,841) | $ 73,970 | $ 92,343 |
Proceeds from sales or maturities of: | |||
Fixed maturities, available for sale | 542,855 | 1,077,379 | 801,580 |
Net decrease (increase) in short-term investments | (27,789) | 181,619 | 2,361 |
Contribution of capital to subsidiaries | (58) | (214,237) | (97,541) |
Other | (2,659) | 0 | (2,010) |
Net cash provided (used) by investing activities | (61,997) | (85,526) | (8,484) |
Financing Activities | |||
Repurchase of common stock | (3,252) | 0 | 0 |
Dividends to shareholders | (10,768) | (10,758) | (38,664) |
Other | 1,143 | (288) | (935) |
Net cash provided (used) by financing activities | (21,805) | (60,624) | (43,446) |
Increase (decrease) in cash and cash equivalents | (113,643) | (72,180) | 40,413 |
Cash and cash equivalents at beginning of period | 143,602 | 215,782 | 175,369 |
Cash and cash equivalents at end of period | 29,959 | 143,602 | 215,782 |
Supplemental disclosure of cash flow information: | |||
Cash paid (refunded) during the year for income taxes, net | 2,340 | (9,512) | (8,832) |
Cash paid during the year for interest | 19,679 | 14,502 | 14,712 |
Significant non-cash transactions: | |||
Dividends declared and not yet paid | 2,698 | 2,698 | 2,694 |
Operating ROU assets obtained in exchange for operating lease liabilities | 3,133 | 5,687 | 1,351 |
Parent Company | |||
Condensed Cash Flow Statements, Captions [Line Items] | |||
Net cash provided (used) by operating activities | (25,862) | 2,589 | (21,450) |
Proceeds from sales or maturities of: | |||
Fixed maturities, available for sale | 5,800 | 33,443 | 87,101 |
Net decrease (increase) in short-term investments | 4,151 | 71,928 | (51,206) |
Return of invested capital from subsidiaries | 8,756 | 21,464 | 79,486 |
Funds (advanced) repaid for Lloyd's FAL deposit | 11,131 | 59,012 | 32,256 |
Other | 14 | (151) | (2,206) |
Net cash provided (used) by investing activities | 29,794 | (28,541) | 47,890 |
Financing Activities | |||
Repurchase of common stock | (3,252) | 0 | 0 |
Subsidiary payments for common shares and share-based compensation awarded to subsidiary employees | (928) | (307) | 2,846 |
Dividends to shareholders | (10,768) | (10,758) | (38,664) |
Other | (977) | (337) | (1,109) |
Net cash provided (used) by financing activities | (15,925) | (11,402) | (36,927) |
Increase (decrease) in cash and cash equivalents | (11,993) | (37,354) | (10,487) |
Cash and cash equivalents at beginning of period | 18,115 | 55,469 | 65,956 |
Cash and cash equivalents at end of period | 6,122 | 18,115 | 55,469 |
Supplemental disclosure of cash flow information: | |||
Cash paid (refunded) during the year for income taxes, net | (6,081) | (7,943) | (9,117) |
Cash paid during the year for interest | 14,071 | 14,176 | 13,888 |
Significant non-cash transactions: | |||
Dividends declared and not yet paid | 2,698 | 2,698 | 2,694 |
Securities transferred at fair value as dividends from subsidiaries | 32,512 | 0 | 34,915 |
Operating ROU assets obtained in exchange for operating lease liabilities | $ 3,133 | $ 412 | $ 0 |
Schedule III - Supplementary _2
Schedule III - Supplementary Insurance Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Net premiums earned | $ 1,029,581 | $ 971,668 | $ 792,715 |
Net investment income | 95,972 | 70,522 | 71,998 |
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | 813,515 | 797,732 | 711,846 |
Losses and loss adjustment expenses incurred related to prior year, net of reinsurance | (36,753) | (45,483) | (50,399) |
Paid losses and loss adjustment expenses, net of reinsurance | 865,703 | 745,245 | 585,173 |
Amortization of DPAC | 133,175 | 110,605 | 110,565 |
Other underwriting, policy acquisition and operating expenses | 174,163 | 157,641 | 127,316 |
Net premiums written | 1,014,137 | 882,721 | 747,701 |
Deferred policy acquisition costs | 58,148 | 58,940 | 47,196 |
Reserve for losses and loss adjustment expenses | 3,471,147 | 3,579,940 | 2,417,179 |
Unearned premiums | 422,950 | 433,961 | 361,547 |
Non-segmented items | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Other underwriting, policy acquisition and operating expenses | 1,862 | 24,977 | 0 |
Inter-segment Eliminations | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Paid losses and loss adjustment expenses, net of reinsurance | (37) | 0 | (143) |
Amortization of DPAC | 514 | 140 | (125) |
Other underwriting, policy acquisition and operating expenses | (4,633) | (3,231) | (2,316) |
Specialty P&C | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Net premiums earned | 769,773 | 695,008 | 477,365 |
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | 639,734 | 608,106 | 497,554 |
Losses and loss adjustment expenses incurred related to prior year, net of reinsurance | (29,819) | (32,942) | (27,480) |
Net premiums written | 765,444 | 626,147 | 451,019 |
Specialty P&C | Operating segments | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Paid losses and loss adjustment expenses, net of reinsurance | 685,696 | 538,885 | 379,656 |
Amortization of DPAC | 91,660 | 61,662 | 53,562 |
Other underwriting, policy acquisition and operating expenses | 100,737 | 66,047 | 56,037 |
Workers' Compensation Insurance | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Net premiums earned | 166,371 | 164,600 | 171,772 |
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | 119,407 | 121,804 | 118,523 |
Losses and loss adjustment expenses incurred related to prior year, net of reinsurance | (8,000) | (7,100) | (6,971) |
Net premiums written | 160,760 | 161,865 | 164,871 |
Workers' Compensation Insurance | Operating segments | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Paid losses and loss adjustment expenses, net of reinsurance | 123,098 | 121,302 | 118,496 |
Amortization of DPAC | 14,836 | 15,100 | 15,895 |
Other underwriting, policy acquisition and operating expenses | 39,901 | 37,318 | 40,554 |
Segregated Portfolio Cell Reinsurance | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Net premiums earned | 69,810 | 63,688 | 66,352 |
Net investment income | 1,029 | 814 | 1,084 |
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | 45,577 | 42,721 | 46,200 |
Losses and loss adjustment expenses incurred related to prior year, net of reinsurance | (6,267) | (10,152) | (16,595) |
Net premiums written | 69,357 | 63,042 | 64,159 |
Segregated Portfolio Cell Reinsurance | Operating segments | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Paid losses and loss adjustment expenses, net of reinsurance | 38,007 | 37,127 | 46,267 |
Amortization of DPAC | 20,068 | 18,730 | 19,636 |
Other underwriting, policy acquisition and operating expenses | 248 | 2,905 | 1,073 |
Lloyd's Syndicates | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Net premiums earned | 23,627 | 48,372 | 77,226 |
Net investment income | 568 | 1,961 | 4,128 |
Losses and loss adjustment expenses incurred related to current year, net of reinsurance | 8,797 | 25,101 | 49,569 |
Losses and loss adjustment expenses incurred related to prior year, net of reinsurance | 7,333 | 4,711 | 647 |
Net premiums written | 18,576 | 31,667 | 67,652 |
Lloyd's Syndicates | Operating segments | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Paid losses and loss adjustment expenses, net of reinsurance | 18,939 | 47,931 | 40,897 |
Amortization of DPAC | 6,097 | 14,973 | 21,597 |
Other underwriting, policy acquisition and operating expenses | 1,315 | 2,984 | 8,539 |
Corporate | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Net investment income | 94,375 | 67,747 | 66,786 |
Corporate | Operating segments | |||
SEC Schedule, 12-16, Insurance Companies, Supplementary Insurance Information [Line Items] | |||
Other underwriting, policy acquisition and operating expenses | $ 34,733 | $ 26,641 | $ 23,429 |
Schedule IV - Reinsurance (Deta
Schedule IV - Reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property and Liability | |||
Premiums earned | $ 1,058,263 | $ 1,020,107 | $ 862,742 |
Premiums ceded | (84,857) | (93,998) | (113,582) |
Premiums assumed | 56,175 | 45,559 | 43,555 |
Net premiums earned | $ 1,029,581 | $ 971,668 | $ 792,715 |
Percentage of amount assumed to net | 5.46% | 4.69% | 5.49% |