Exhibit 99.1
ProAssurance Reports First Quarter 2007 Results
SUMMARY
In the first quarter of 2007 ProAssurance Corporation's Income
from Continuing Operations rose 30% compared to the year-ago quarter,
to $36.1 million or $1.02 per diluted share. Gross Premiums Written
were 2% higher than the same quarter a year ago. Net Investment Income
continued to emerge as a driving force in ProAssurance's results,
growing 29% compared to the first quarter of 2006.
BIRMINGHAM, Ala.--(BUSINESS WIRE)--May 9, 2007--ProAssurance
(NYSE: PRA) reports the following results for the first quarter of
2007:
Unaudited Consolidated Financial Summary:
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(in thousands, except per share data)
Continuing Operations
Three Months Ended
March 31,
2007 2006
---------- ----------
Gross Premiums Written $ 185,302 $ 182,187
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Net Premiums Written $ 171,459 $ 172,632
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Net Premiums Earned $ 137,177 $ 142,430
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Net Investment Income $ 42,571 $ 32,881
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Net Realized Investment Gains (Losses) $ (3,162) $ 144
========== ==========
Total Revenues $ 178,877 $ 178,191
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Guaranty Fund Assessments (Recoveries) $ (45) $ 65
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Interest Expense $ 2,959 $ 2,556
========== ==========
Total Expenses $ 128,833 $ 140,141
========== ==========
Tax Expense $ 13,954 $ 10,215
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Income From Continuing Operations(1) $ 36,090 $ 27,835
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Net Cash Provided by Operating Activities $ 87,022 $ 115,796
========== ==========
Discontinued Operations(1)
Income From Discontinued Operations $ - $ 109,441
========== ==========
Net Income
Net Income $ 36,090 $ 137,276
========== ==========
(1) Our personal lines operations were sold effective January 1, 2006.
Income from discontinued operations consists solely of the gain
recognized on that sale, net of taxes.
Earnings Per Share
Three Months Ended
March 31,
2007 2006
---------- ----------
Weighted average number of common shares
outstanding
Basic 33,294 31,155
Diluted 36,157 34,050
Earnings per share (Basic)
Income from Continuing Operations $ 1.08 $ 0.89
Income from Discontinued Operations - 3.51
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Net Income per share (Basic) $ 1.08 $ 4.40
========== ==========
Earnings per share (Diluted)
Income from Continuing Operations $ 1.02 $ 0.84
Income from Discontinued Operations - 3.21
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Net Income per share (Diluted) $ 1.02 $ 4.05
========== ==========
Key Ratios
Three Months Ended
March 31,
2007 2006
---------- ----------
Net Loss Ratio 72.2% 78.0%
Expense Ratio 19.6% 18.6%
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Combined Ratio 91.8% 96.6%
========== ==========
Operating Ratio 60.8% 73.5%
========== ==========
Return on Equity 12.6% 13.4%
========== ==========
-- Additional premiums attributable to PIC Wisconsin enabled us
to increase Gross Written Premiums compared to the same
quarter in 2006. Premiums in our non-PIC business were lower
than a year ago, reflecting increased price-based competition.
-- Despite the price-based competition in the general market, our
renewing polices had premiums that were, on average, equal to
those in the same period a year ago. We continue to believe
our policies are priced at levels that are adequate to
maintain our margins.
-- Policyholder retention in the quarter was 85%, which is up
from last quarter.
-- We recognized favorable net loss reserve development of
approximately $15.6 million in the quarter. This favorable
development reflects reductions in our estimates of claim
severity in accident years 2003 through 2005, and the regular
quarterly evaluation of our reserves for excess loss
exposures.
Balance Sheet Highlights
March 31, December 31,
2007 2006
-------------- --------------
Stockholders' Equity $ 1,163,974 $ 1,118,547
Total Investments $ 3,614,284 $ 3,492,098
Total Assets $ 4,457,456 $ 4,342,853
Policy Liabilities $ 3,032,973 $ 2,967,097
Accumulated Other Comprehensive Income $ 1,605 $ 111
Goodwill $ 72,213 $ 72,213
Book Value per Share $ 34.92 $ 33.61
Capital Management
After the end of the first quarter we announced that our Board of
Directors authorized the expenditure of up to $150 million to
repurchase our shares or debt securities. As of April 27, 2007 we had
repurchased approximately 155,000 shares with a total cost of $8.1
million.
Conference Call Information
-- Live: Wednesday, May 9, 2007, 10:00 AM ET. Dial (800) 474-8920
or (719) 457-2727 outside North America. The call will also be
webcast on our website, ProAssurance.com, and on
StreetEvents.com.
-- Replay: By telephone, through May 18, 2007 at (888) 203-1112
or (719) 457-0820, using access code 4501723. Via Internet,
through May 31, 2007 at ProAssurance.com and StreetEvents.com.
-- Podcast: Available on a free subscription basis through a link
on the home page of the ProAssurance website.
About ProAssurance
ProAssurance Corporation is the nation's fourth largest writer of
medical professional liability insurance through our principal
subsidiaries The Medical Assurance Company, Inc., ProNational
Insurance Company, NCRIC, Inc., Physicians Insurance Company of
Wisconsin, Inc., and Red Mountain Casualty Insurance Company, Inc. We
also write professional liability coverage through Woodbrook Casualty
Insurance, Inc.
Caution Regarding Forward-Looking Statements
Any statements in this News Release that are not historical facts
are specifically identified as forward-looking statements. These
statements are based upon our estimates and anticipation of future
events and are subject to certain risks and uncertainties that could
cause actual results to vary materially from the expected results
described in the forward-looking statements. Forward-looking
statements are identified by words such as, but not limited to,
"anticipate," "believe," "estimate," "expect," "hope," "hopeful,"
"intend," "may," "optimistic," "potential," "preliminary," "project,"
"should," "will," and other analogous expressions. There are numerous
important factors that could cause our actual results to differ
materially from those in the forward-looking statements. Thus,
sentences and phrases that we use to convey our view of future events
and trends are expressly designated as forward-looking statements as
are sections of this news release clearly identified as giving our
outlook on future business.
Forward-looking statements relating to our business include among
other things: statements concerning liquidity and capital
requirements, return on equity, financial ratios, net income,
premiums, losses and loss reserves, premium rates and retention of
current business, competition and market conditions, the expansion of
product lines, the development or acquisition of business in new
geographical areas, the availability of acceptable reinsurance,
actions by regulators and rating agencies, court judgment, legislative
actions, payment or performance of obligations under indebtedness,
payment of dividends, and other matters.
These forward-looking statements highlight significant risks,
assumptions and uncertainties, including, among other things, the
following important factors that could affect the actual outcome of
future events:
-- general economic conditions, either nationally or in our
market area, that are worse than anticipated;
-- regulatory and legislative actions or decisions that adversely
affect our business plans or operations;
-- inflation and changes in the interest rate environment;
-- performance of financial markets and/or changes in the
securities markets that adversely affect the fair value of our
investments or operations;
-- changes in laws or government regulations affecting medical
professional liability insurance;
-- changes to our ratings assigned by rating agencies;
-- the effects of health care changes, including managed care;
-- uncertainties inherent in the estimate of loss and loss
adjustment expense reserves and reinsurance, and changes in
the availability, cost, quality, or collectibility of
reinsurance;
-- bad faith litigation which may arise from our involvement in
the settlement of claims;
-- post-trial motions which may produce rulings adverse to us
and/or appeals we undertake that may be unsuccessful;
-- significantly increased competition among insurance providers
and related pricing weaknesses in some markets;
-- our ability to achieve continued growth through expansion into
other states or through acquisitions or business combinations;
-- the expected benefits from acquisitions may not be achieved or
may be delayed longer than expected due to, among other
reasons, business disruption, loss of customers and employees,
increased operating costs or inability to achieve cost
savings, and assumption of greater than expected liabilities;
-- changes in accounting policies and practices that may be
adopted by our regulatory agencies and the Financial
Accounting Standards Board; and
-- changes in our organization, compensation and benefit plans.
You should not place undue reliance on any such forward-looking
statements, which speak only as of the date made. The factors listed
above could affect our financial performance and could cause actual
results for future periods to differ materially from any opinions or
statements expressed with respect to future periods in any current
statements. Except as required by law or regulations, we do not
undertake and specifically decline any obligation to publicly release
the result of any revisions that may be made to any forward-looking
statements to reflect events or circumstances after the date of such
statements or to reflect the occurrence of anticipated or
unanticipated events.
Our results may differ materially from those we expect and discuss
in any forward-looking statements. The principal risk factors that may
cause these differences are described in various documents we file
with the Securities and Exchange Commission, such as our current
reports on Form 8-K, and our regular reports on Forms 10-Q and 10-K,
particularly in "Item 1A, Risk Factors."
CONTACT: ProAssurance Corporation
Frank B. O'Neil, 800-282-6242 or 205-877-4461
Sr. Vice President,
Corporate Communications & Investor Relations
foneil@ProAssurance.com