Exhibit 99.1
ProAssurance Reports 2007 Second Quarter and Six-Month Results
BIRMINGHAM, Ala.--(BUSINESS WIRE)--Aug. 8, 2007--ProAssurance
(NYSE: PRA):
SUMMARY
ProAssurance announced another quarter of strong increases in
Income from Continuing Operations, up 25% over the second quarter and
27% over the six month period a year ago. Income from Continuing
Operations was $37.6 million in the quarter, or $1.06 per diluted
share, and $73.7 million, or $2.08 per diluted share, for the year's
first six months. Net Investment Income continued to be a significant
contributor to the bottom line, growing 26% for the quarter and 28%
for the year-to-date.
ProAssurance (NYSE: PRA) reports the following results for the
periods ending June 30, 2007:
Unaudited Consolidated Financial Summary:
(in thousands, except per share data)
Continuing Operations
Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006
------------------------------------
Gross Premiums Written $105,747 $106,805 $291,049 $288,991
====================================
Net Premiums Written $ 90,867 $ 96,381 $262,326 $268,962
====================================
Net Premiums Earned $132,663 $137,420 $269,840 $279,850
====================================
Net Investment Income $ 44,548 $ 35,432 $ 87,119 $ 68,313
====================================
Net Realized Investment Gains
(Losses) $ 277 $ (754)$ (2,885)$ (610)
====================================
Total Revenues $180,134 $173,792 $359,012 $351,983
====================================
Guaranty Fund Assessments
(Recoveries) $ (90)$ 995 $ (134)$ 1,060
====================================
Interest Expense $ 2,984 $ 2,632 $ 5,944 $ 5,188
====================================
Total Expenses $127,425 $131,656 $256,259 $271,797
====================================
Tax Expense $ 15,088 $ 12,145 $ 29,042 $ 22,360
====================================
Income From Continuing
Operations(1) $ 37,621 $ 29,991 $ 73,111 $ 57,826
====================================
Net Cash Provided by Operating
Activities $ 7,702 $(73,614)$ 94,724 $ 42,182
====================================
Discontinued Operations(1)
Income From Discontinued
Operations $ - $ - $ - $109,441
====================================
Net Income
Net Income $ 37,621 $ 29,991 $ 73,711 $167,267
====================================
(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 Six Months
Ended Ended
June 30, June 30,
2007 2006 2007 2006
------- ------- ------- -------
Weighted average number of common
shares outstanding
Basic 33,178 31,195 33,236 31,175
Diluted 36,093 34,065 36,125 34,060
Earnings per share (Basic)
Income from Continuing Operations $ 1.13 $ 0.96 $ 2.22 $ 1.86
Income from Discontinued Operations - - - 3.51
------- ------- ------- -------
Net Income per share (Basic) $ 1.13 $ 0.96 $ 2.22 $ 5.37
======= ======= ======= =======
Earnings per share (Diluted)
Income from Continuing Operations $ 1.06 $ 0.90 $ 2.08 $ 1.74
Income from Discontinued Operations - - - 3.21
------- ------- ------- -------
Net Income per share (Diluted) $ 1.06 $ 0.90 $ 2.08 $ 4.95
======= ======= ======= =======
Key Ratios
Three
Months Six Months
Ended Ended
June 30, June 30,
2007 2006 2007 2006
----- ----- ----- -----
Net Loss Ratio 74.5% 75.0% 73.3% 76.6%
Expense Ratio 19.3% 18.9% 19.4% 18.7%
----- ----- ----- -----
Combined Ratio 93.8% 93.9% 92.7% 95.3%
===== ===== ===== =====
Operating Ratio 60.2% 68.1% 60.4% 70.9%
===== ===== ===== =====
Return on Equity 13.0% 13.3% 13.0% 13.8%
===== ===== ===== =====
-- Additional premiums from PIC Wisconsin have enabled us to
limit the downturn in premiums in the quarter and continue to
show modest year-over-year growth.
-- Price-based competition remains a factor; however, policy
terms and conditions are largely holding. We have been able to
renew business at prices that are, on average, equal to the
premiums charged in 2006.
-- For the quarter and for the year-to-date our policyholder
retention in our non-PIC book was 85%; PIC's retention was 89%
in the quarter and 90% for the year-to-date. We believe our
overall renewal success is a vote of confidence from insureds
who recognize the value that ProAssurance delivers.
-- We recognized $20.0 million of favorable net loss reserve
development in the quarter, bringing the total favorable
development for the year to $35.6 million. The favorable
development continues to stem from our estimates of reduced
claim severity in accident years 2003 through 2005.
ProAssurance's Chief Executive Officer, W. Stancil Starnes, said,
"Our strong results in a very competitive environment show that our
disciplined approach can deliver value to our shareholders while
building the type of company our policyholders demand. We're
evaluating every facet of our operations to ensure that we can
continue to deliver superior value and service."
Balance Sheet Highlights
June 30, December
2007 31, 2006
----------- ----------
Stockholders' Equity $1,154,254 $1,118,547
Total Investments $3,559,431 $3,492,098
Total Assets $4,393,908 $4,342,853
Policy Liabilities $2,973,141 $2,967,097
Accumulated Other Comprehensive Income $ (28,182) $ 111
Goodwill $ 72,213 $ 72,213
Book Value per Share $ 34.91 $ 33.61
Capital Management
As of July 15, 2007 we had repurchased approximately 560,900
shares of our stock with a total cost of $30.7 million, leaving $119.3
million in our current share repurchase authorization.
Conference Call Information
-- Live: Wednesday, August 8, 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 August 17, 2007 at (888)
203-1112 or (719) 457-0820, using access code 2518460. Via
internet, through August 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. ProAssurance is recognized as one of the top
performing insurance companies in America by virtue of its inclusion
in the Ward's 50 for 2007 and is one of the 100 largest
property-casualty insurance groups in the nation, based on Net Written
Premium.
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 judgments,
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 and/or insurance;
-- 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
-- changes in our, organization, compensation and benefit plans;
and
-- our ability to recruit and retain senior management.
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
Frank B. O'Neil, 800-282-6242 or 205-877-4461
Sr. Vice President, Corporate Communications &
Investor Relations
foneil@ProAssurance.com