ProAssurance (PRA) 28 Apr 192019 Q1 Earnings call transcript

Company Profile

Participants

Frank O'Neil	Investor Relations
Stan Starnes	Chairman & CEO
Ned Rand	President & COO
Dana Hendricks	CFO
Howard Friedman	Chief Underwriting Officer and Chief Actuary
Mike Boguski	President of Eastern Insurance
Amit Kumar	Buckingham Research
Mark Hughes	SunTrust
Paul Newsome	Sandler O'Neill
Christopher Campbell	KBW
Marcos Holanda	Raymond James
Matt Carletti	JMP

Call transcript

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Operator

Good morning, everyone. Welcome to ProAssurance's conference call to discuss the company's results for the First Quarter of 2019. These results were reported in a news release issued on April 25, 2019. Included in that release were cautionary statements about the significant risks, uncertainties and other factors that are out of the company's control and could affect ProAssurance's business and alter expected results. Please review those statements. U.S. statements and call forward-looking explicitly the of make estimates with statements to meaning expectations and identifies the expects on dealing this projections, within Management these as safe Federal harbor Securities subject Laws to protections. and applicable The forward-looking content only XX, not or and information XXXX, update undertake law as is statements. and as of by any ProAssurance disclosed on or obligation required to April except regulation, this of call accurate will these expressly part disclaims alter also expects call. ProAssurance reference non-GAAP The today's of management to items during team GAAP The reconciliation company's recent of these news release provides non-GAAP a numbers to counterparts. their

as the Now you O'Neil. that call of O'Neil, Mr. conclusion time and ahead, to remind I is call Mr. be being recorded prepared remarks. I Frank the go turn the there please to after would sir. questions like will over for

Frank O'Neil

On Stan CEO, Workers' of Rand; Hendricks. Operations, Thank will also the Mike Chairman today Officer, Starnes; are Compensation Chief Boguski, President call you Howard Financial Stan, you. the our Ned Liability Chief on us and Officer, Healthcare Dana off? Professional start Operating and our are and please call. Insurance our Friedman our and Presidents

Stan Starnes

Frank. you, Thank

or on at Over preparation. opportunities this underline trends half, be determined the and have opportunity swept the such The its environment Quarters by is we point. environment loss by away a the past concern thrives our afforded one Whether about in emphasized company Liability. year Professional the to Healthcare tide every like serve changing. an will is by

short-term continue challenging, appropriately operate the in those always responsibly while long reserve ensure profitable to the companies the as and sheet, our with like said continuing remind frank, would the to always cycles to grow earnings needed logically. As no impact. flounder. are but and see inherent to are markets which have: take we that everyone be balance in to These do means us we through. we will that underwrite of the others To to our strength I enable of cautiously, what fundamentals price insurance I matter the for release, strength actions them

I'd of into Ned? call the quarter. Ned, lead results Now the turn over so he the us can to like to

Ned Rand

you, loss reaction significant then and hit the quarter, driver environment the of Stan. from first Thank it that I some Since is our results to to details and quarter. the of address most the other want this I'll

healthcare view continue to face worsening As in act liability line. we what loss of we Stan the in mentioned, as the broader cautiously trends

that paid a While we reserves. we of the increasing are again in demands of underlying direct our in the evaluation emphasize picks on plaintiff effect losses and verdicts, as seeing severity our not loss and our in number trends attorneys would large of greater data, increases the

Given and the acted claims of the have increased that we fact claims, through severity integrity the long responsibly healthcare our ensure balance tail back of sheet. open ripples liability all to

something reserves unified and P&C Mike that focus be been the important, bring us future without liabilities, concerns about on together our leadership. operations caution of case, his under take undo our As will allows our as has establishing in historically Specialty team to all Boguski past we the also especially

increase Professional X.X in XX-point points result potential moved Liability, view a to by decrease partially a in current net ratio higher Lloyd's ratio. loss loss of losses was accident As our Healthcare the That Specialty of year offset the P&C XX.X%.

environment. that our has continues assessment first development, is I at to in to compared emphasize our Healthcare consolidated was loss quarter. the a So not changed. Liability. want last in was ratio $XX.X million was favorable year's still net to $XX.X overall, million, while year Reserve loss down of change accident year driver current primary the and quarter, philosophy flat our What reserving ago Professional from

Our despite XXX.X%. in And quarter decreasing XX.X% year expense the consolidated was period to ago. ratio respective net the ratio a to the ratio for our was for compared XX.X% as XX.X%, quarter loss our combined

in or written, million million P&C with $XXX.X avoiding. segment, the in especially we've XX.X% described. These Specialty gross led continued top our written over XX.X% first of the to so same line pleased a the first adequately committed a quarter due $XXX.X assumed are gross amount premiums of strategy. at the challenging teams extent pitfall period million line expense growth to environment success And the for of is increased million quarter, and $XX.X ability to jump $XX.X We underwriting in our in in the their premiums to XXXX evidence an business a given prudent the new timing growth the in by written renewals. the reported price lesser double which quarter. gains primarily ago Consolidated bottom a to is year the our the Top are written, of we and were by risk line

successfully us Compensation Segregated long challenging whole which slightly million long-term segment. as as value in XX.X% quarter take down real million Portfolio formula, from Insurance XXXX provide or will the in of Reinsurance We highlights X.X%. reported expand later $XX.X in trends proof segment history now Workers' a was an of an our from Dana call. we segment to greater our through increase industry Corporate environment. by navigating insureds our approximately While some Compensation $XX.X cycles on our Dana? the the will the the winning of Mike Cell of the Boguski point quarter-over-quarter, in a in to the of increasingly Workers'

Dana Hendricks

Thanks, Ned.

term. per due effect those $XX.X from result We to income, and since million on offset to in decrease per subsidiaries, investment income a our year a attributable mark-to-market investment quarter net from the holding adjustment net an the were by Ned share. the on our The market's rates LLCs believe $XX.X is investment volatility Net current increase $XX diluted yield and previously. income non-GAAP the The in news investment given for realized in recovery interest portfolio, in for and higher long prior well from gains, managed favorable This equity was income quarter. year-end. in refer share. net the or to primarily net portfolio, specifically $X.XX a slightly to accident opportunity losses operating earnings quarter short-term gains our relating diluted the by as realized discussed earnings LPs realized due was gains an factor surrounding difference investment net our income. portfolio. decline to investment equity accident in $XX.X development trading due to approximately investment Non-GAAP keeping was the increased primarily down LP to $X.X the million consolidated years, of million driven the after-tax totaled higher a million, earnings in prior net our reserve which release $X.XX in LLC in reconciliation for the for and a of returns partially million was quarter, quarter net with consolidated acceptable year excludes increase net Please from operating unconsolidated the maturity fixed or our driving and of over our Our reduced in

focus company. his strength. sheet strategy of capital protecting Therefore, continues our to to optimizing in Stan on management long-term As mentioned balance our is critical introduction, that the the health

held investments million approximately operating unpledged XX, outside March our As of $XXX of cash we subsidiaries. in and liquid

our when consistent were we repurchase in Board-authorized our buying no program. repurchases above a quarter, or us there remain stock to contemplate share the we $XXX We While period, in book XX-month shorter targeting view back approximately available value. have million pay in of

grow decision capital capital. said, stay position Of course, potential abreast with observe to in the evaluate our requirements by the should Frank? we and changes prepared shares remain and buy view depends yield all on rating our any Board of for opportunities of we imposed back agencies, market opportunities. that regulators That management's regularly, to

Frank O'Neil

Thank you, Specialty the take will through Howard, segment? Dana. you P&C us

Howard Friedman

time, Professional made. been I severity Healthcare Liability in regarding the trends By this will, has point well Frank.

made trends colors didn't the any decisions consideration segment. However, broader I remiss that our reiterate I would of if be within these

We continue for think carry premium. walking the risk writing potential pricing accounts from retention in underwriting business, away emphasizing good of adequate standards, to too much business we easy uphold our over lieu and

While too real. all this enabled avoid to our unexpected in severity is us of so of disciplined increases severity paid far has losses, any increasing approach the risk

Our This segment million. red booking operated quarter, Specialty resulted in P&C XX.X%. in our $XX the increase a in this ratio loss to under quarter-over-quarter just XX-point net loss a of

million in appropriate. we gains, XX.X%, we That underwriting XX.X% of with with quarter-over-quarter. at we our think respectively, quarter ratio ratio while contributors of $XXX.X were quarter, first expense facilities Gross to $X.X and the underwriting loss ended million the the written and and increase environment, the respectively. Despite XXXX. to $XX.X were responsible to XX% the primary first price the over line is top an challenging grow in same the of XXX.X%. premiums a XX.X%, period again, the Physicians increases continue getting healthcare With combined million, equates adding

million fact, million in pricing XX.X%. opportunities more but wrote written a In year all $XXX,XXX realistic rates at premiums due quarter of compared period of gross marketplace. quarter. the the and in ago to year or premiums about the $XX.X ago, improved the $X liability physician Medical business lines We by one decreased respective over in in new business technology to adequate

Pricing across $X.X was compared increase million healthcare to every In to at first in we are a Specialty numbers. business encouraging leading all, business $XX.X look renewed compared in business. on and quarter, These pricing when last $X.X P&C business in XXXX. year's the up figures in million XX% line healthcare was XXXX New we million new facilities at especially in facilities retention million wrote quarter. of the $XX.X with for

groups lines which X% XX% complex for for However, and only to in each. to of quarter increase by in other premium This Meanwhile, and appropriate ago. year retention X% volatility the example commitment writing facilities large with policy XX%. we was the Physician premium the get offset loss retention largely physician increased business standard business competition, pricing a insureds, XX% price averaged from the rate. and X dropped by can of due the approximately underscores lines which our associated for was the to large facilities

is in to to the logic and whole, encourage upon our It are retention a in and a traction testament severity a gain longstanding ability broader that and flight in marketplace. discipline belief loss the impose pricing quality. to pricing increases market As these ProAssurance's numbers

in our course. abandon Frank? has stay pricing recent good write our that in As the and put the years, business to perceive we mentality on pressure continue the competitive we will sell-at-any-cost driven trends arena competitors to

Frank O'Neil

details to segments. some Now Mike? and the Howard, Workers' Cell Portfolio give Thanks, Compensation Reinsurance on I'll Mike Insurance us ask Boguski Segregated

Mike Boguski

a delivering million in the by Thank segment operating you, $X Compensation The Frank. XXXX Workers' Insurance started first quarter. result

XX% line During remained growth to XX.X%, premium by $X.X in driven to relatively primary ratio remains operating million decrease account loss during compared ceding year reductions severity. competitive XX.X% reinsurance expense segments. retention and traditional accident audit quarter-over-quarter strong slightly programs. business X.X% Overall, loss XX.X%. holder the in related of and XX.X% QX QX written growth The decreases of XXXX. favorable line by The ratio programs millionof ratio market The the in in $XXX,XXX. Workers' The XXXX that The reflects Cell trends. the closing The the $X.X $X.X of quarter quarter-over-quarter. trends for pricing gross segment to the ratio We significantly affecting compared loss accident development, the impact in increased was had transaction. to quarter consistent underwriting to reflects million $X.X primarily booked territories, of Segregated the Portfolio rights in an to our year impacted This of commission SPC directly Please all favorable The booking through renewal quarter-over-quarter, reduction dividends. quarter-over-quarter XXXX, in quarter. rate represents Specialty of in related a pressure XXXX. which policy incurred net and top competition operating calendar the to segment, reflects these premiums at the net XX% operating development the paid XXXX. the quarter, changes Premium expense which combined less Falls offset segment, predominantly The of also for driver to gross Compensation Compensation The in P&C expense of top reduced highly of from in retention accident a continues million decreased new by accident new $XX.X alternative XX.X%, in and year XXXX exclusive was Great note written Reinsurance million to line quarter-over-quarter. lesser first ceded our favorable strong top approximately a current The expenses, in start across of of claim of the XX.X% success renewal written, XX result market business producing ratio the an written $XX.X resulting was $XX.X of the XX% was primarily premium in development SPC consistent calendar quarter-over-quarter in in the the premium discipline trends. to XX.X% to premium ratio million. other and was reflects increase to our renewal the available year years year the due the audit of was The degree reserve continued SPC renewal retention price includes premium. was quarter business net to XX.X% ratio year with reduction to the in net trends. QX underwriting Insurance XXXX decrease to ratio related prior earned million of loss net to the gross due premiums increase declines loss business of year and Workers' the ratio The to XXXX increased X%.

model. attractive be to SPC with and this continue in the the margins We Frank? persistency pleased of business underwriting

Frank O'Neil

give on Lloyd's? update us please Howard, an will you Mike. Thanks,

Howard Friedman

Sure, be everything of acceleration the much fourth given Hurricane few Michael add given honest, Lloyd not to is cat To related into to that's narrative of especially losses past been to XXXX. said Frank. the there over the months, quarter the the

judgment, for which our we determine looking number to has we future As into year the capital been the a refine could our we Dale investment initial established, course include exposure action of Once with the made options. of a the a for back our original in the this we've XXXX the The XXXX, investment able emphasize with ways so at shareholders in Dale timing Duncan work our but to review Partners still simply valid investment Frank, investment of to our partnering remainder of said to Underwriting is thesis Lloyd's. regarding you. to manage and strategy Lloyd's concerns before, the that commitment reinsurance favor. and be We strategic didn't through share regard of we of continue for range all we're will further solutions.

Frank O'Neil

you, Stan, you any comments Thank it closing have we before open questions? for Howard. do up

Stan Starnes

Thank do. Frank. you, I

results, Regarding the clear. think position our I is quarter's

long-term hold quarter-to-quarter We have our We we ahead what challenges get variances. know view know as often not of have from you unimpaired way terrain been the us. the team the heard right know a Thankfully, the will and you I We rigidly here well, remind we and be assembled smooth. To there. have through before. us to investors, by

do sheet, our necessary Our do our to our better meet to to so shareholders. enabling us we and will and protect balance policyholders we what's sleep that knowing investors commitments

judgment quarter's are our the succeed This new and in environment. the environment results dictated ourselves positioning of by evolving to

Frank O'Neil

That Thank remarks. you, concludes our Stan. prepared

We for are ready questions.

Operator

Thank sir. you

We ahead. Buckingham session. first questions from will go Amit And will Please [Operator question-and-answer now begin of Research. Instructions] Kumar your be the

Amit Kumar

morning. and Thanks good

Just a questions. few

or Howard for is question be Ned. first may The

point why seen Going you you talking expect this we've I uptick just losses going we yet. we paid is trend haven't back should what to that, should eventually been an and have that time Or Can that for -- the you losses. and about this in would discussion expand maybe Why on? seen think on haven't that's some paid it? that on your be? And important -- made we exactly

Stan Starnes

Amit. ahead? why Yes, Howard, don't you go

Howard Friedman

of the that And primarily XX terms so after to relatively the by claim increases to professionals are evaluation that's done due medical is continued about We Sure. the damages or months time started established the and were monitor that early of really seeing in reserves the a claims reported, that life case professional potential case it Amit, probably of Yes. But those ago takes we the now, in liability, are resolve liability in our to we've and it's being of that. length established and on talk claims. what staff. to it expert were reserves by

plaintiff progresses, As or ripe trial the But it case years can And many be is that -- have continue reported just claims. by proceeds negotiation, after attorneys, case is even in before see you we after to we verdicts by but handed increasing from settlement that for they reason could other in concerned seen other we paid juries states modify a certainly down jurisdictions, demands to the in materializing if our that's demands will. that. the it in and that be so being several cases, about are not the

Amit Kumar

like innings related that us we of and are look help mentioned, to Or And of should cycle it. I talk about point? just to the this historical you we closer do second first Got -- is, are? think the back how we sort and Stan any think I of or Maybe we where cycles, about is this? the sort an inflection if guess, how

Frank O'Neil

-- to too? that you take one, That's want it's Amit, fine.

Howard Friedman

two in different we're locations, Sorry, we... so

Amit Kumar

Oh, got it.

Howard Friedman

but difficult with different to anybody hindsight. we market most always have certainly that increases high to would I is join say acceptance only specific ago, XX certainly specifically in we the it price that, say is ago. Calling increases at the in regard looking and change and done is healthcare data and can it a price in. in achieve But start else months marketplace been able yes, able to that market, of that I would point others be than generally have a and there both XX achieve, was given great and our been in I price the months the certainly market. the certainly a inflection can retention

Amit Kumar

The last requeue question, this. I after will

rate obviously Maybe what arrows about some tell other us just and might quiver you're else the a issue? maybe you sort talk You've about lot to this terms talked changes, in you maybe other conditions, your you pricing trends this? getting. its and Can of you attack the what deploy have can to address

Howard Friedman

-- go In ahead.

this Sorry, one. you take

Ned Rand

said Howard from a away not risk think terms our And conditions business it's science, as or retention away business lower to was big important the and walk but you business standards willingness a of had selection. the was and where write that comments, facilities is but it's and we in his prepared this knowing that art part Underwriting about about an is I that the of in rate, art our that And just it's don't to feel meet business. seen an it. that walk underpriced that and in quarter from and should we is aspect fortitude having not -- a

Stan Starnes

Stan. to add Amit, just it's I that. would Yes.

conditions, now, fortunately, last the into have steadfastly we will year wholesale is have have market do did claims maintain forward terms to form. and or abandonment and form. insistence back see the avoided several returning it's we again that that to form. made our us claims because expect In business, from we the in, of form. don't at number form. But our that our of have the in whether years a take you we occurrence In the maintained occurrence of world years I over occurrence this help commitment point we're bait thing veered not going the we healthcare the some of the Others on terms one will made to policy the

what in, to inning so can what that's X we're you answered and And act we hindsight. so Come in. of in years X prudently. back in cautiously ago, why be terms only we're today and but we'll years in say we what you have inning tell In that were can't inning

Amit Kumar

stop Best of and follow Thanks. here answers. I'll other few for those requeue I have luck. And good thanks ups. and

Operator

of SunTrust. will The Mark ahead. from Please be question Hughes go next

Mark Hughes

about favorable Good they in business, last development liability development Yeah, nearer sort of Or from kind book end thank slowed. the those your may whether the years be the severity, ripple simply in of good about or morning. to you. the was severity getting through more of of runoff specialty, In cycle? that the the -- that They've trend? -- kind better you cautious. hit back Anyway and healthcare the characterize was nice so obviously that you're thinking it of the it's judgment

Frank O'Neil

Howard?

Howard Friedman

Sure.

Okay.

expected think about I you a We claims. are reestimate in view and pick our to the more development. concern X will. subtraction, don't values the my all certainly. has of -- We from much is the ultimate caused open the though ultimate intertwined of development losses if And latter, fallout that a it's reevaluate us severity the

of same be in to development. what that, you the and of the the we're will, this, good it. that's say a to what lower external -- trying what a ultimate view that's of which could reserve ultimate that our our in -- overreact trick to the well the as it's responsive have and if turn case years? end be seeing verdicts and they in change try seeing and of going reserves it that and to paids that we're Is it make come resulting may to determined an you past, we're if we're estimate environment as time and have conservative losses So we all not is favorable higher see be will, estimates be the losses down, determine to not at means result you in Again, ultimately paid and quickly the that's in taking out to once what in to

Mark Hughes

months? awards. characterize in mentioned seen You recent attorneys, flow little plaintiff been the few these you've bit what the the worse of Anyway Is months? last from to a news kind jury demands

Stan Starnes

result it's in caps an in this of declared been Court on Well, mean, in few probably That noneconomic Mark, has their will week, it's news Stan. the increasing. the result just Supreme I say damages Oklahoma. one would increase single Oklahoma last basically unconstitutional. will and I direction inevitably ruling in -- months that that flow the severity

example the So drive going. blacked probably where of the informs Remember, the to as down with make world news out. windshield but it's judgments this how we the we example that's one cycle so and road the have I just to true, is overuse

have make We no is that respect what's to behind increasing these us. point to lawyers' mirror can only all and judgments. not in through rear which the to idea The demands, reserves, of to And that. what's And environment we is with the us. environment preparing so front lens case us with we see anecdotally have an we the and we're ourselves, severity to plaintiffs respect view of thing ignore will

Mark Hughes

you competitors? at their Anything the look relevant booking at seeing I among statutory most to higher perhaps of look your you they're some you've observe about losses assume When an paids had paid data. or way your trends? competitors, opportunity you Are their

Ned Rand

and underwriting and being behavior we're Mark, can the seeking you challenging seeing change we're the it conclusions what increases. limited the But by most data the draw got. too and definitely just statutory price marketplace, those discipline of or difference. is in you've competitors different be the a of data that to saying marketplace. nature -- to of importantly, work are itself in we imposed behavior many in because better from with hesitate And The competitors

Frank O'Neil

on commentary additional that? might have you some Howard,

Howard Friedman

different have general looking paids time Statutory terms agree average of a programs in retentions, and But would changed even okay say, at, sense. useful reinsurance is recently. that. or with different could and in over change I data companies Yes. very have

Things is lots So of and closed National again at Data it Practitioners draw look some difficult is the extent but to that variation. to Bank conclusions claims that. like clear useful, from

I at booked information, generally industry, being you a decisive think and less probably be could But about in judgment loss when we're year ratios of that's as favorable industry development. we're higher you as accident current terms it. making look on seeing seeing in the

Mark Hughes

when of your booking on at point accident and business that, might. you current at -- Do losses I'll expenses question, ask your about want year profitable. growing look I not if ratio, cycle? that be The then this one you combined think with the to especially does final the in top the XX%

Howard Friedman

we that My we is of to rate I'd beyond the very pricing we this appropriate. that levels improve businesses looking mentioned is. Howard. terms have and deductibles as of down a balance the that pricing are premium question, it retentions increases, to make for is past that the in writing think modifications, hospital is tighten because terms and and of turned even is years there and we to now seen exposure say that in of above and yes, Amit's many and successful there able It's actually are we larger view in facilities the We're moving is pricing in at have in not some point it cycle up at earlier and when group particularly and response inflection is, some to policies point at on

Operator

ahead. Please next the Sandler of go Newsome question And come O'Neill. Paul will from

Jon Newsome

this bit have about how a it? seeing you of little may a of if I And handful have and perhaps things and Brazilian itself. And but competitors, because also competitive little was a through perspective, thinking generally hoping change have environment much ahead changed be the you sophisticated speaking to larger reacting a you more just could competitor. pretty market far I'm you talk about

are and if about you certain us it's segments or or that competitors And the segments of at certain that how with kind kind people behind that amongst of perceive if hard in-market up are ahead outside if behind your just talk to So are exactly there's you. environment? tell for could you

Stan Starnes

Paul...

Howard Friedman

that I one. can take

Stan Starnes

Go Howard. ahead, ahead. go Howard, Okay,

Howard Friedman

the maybe not in saying of about say, point large the higher your less territory. -- smaller more tighter to terms or I'd we with pricing smaller regional go are being seeing geographical limited to guess, carriers. from larger the I national smaller I'm in more of versus certainly perspective because and sophisticated and certainly larger a general yes, sophisticated some

the concerned sometimes of very companies, therefore I ones, -- subsidize ratios may of action of partly is higher taking writing, or that they and which continue think think capital by corrective particularly to accounts quickly. It high result the tend also capital for result limits renewals. to paying lot dividends with of perspective. to small a that and Many and larger a about targets bigger I and very pricing ratios. they're broader using viability They policy be running and smaller be higher a are that are combined the they're partly on have more expense a

Jon Newsome

Those are all my questions. Appreciate it.

Operator

of Please be Campbell from go next Christopher And will ahead. the KBW. question

Christopher Campbell

just I question this quarter little transition? correlation higher of is any is ultimates management upcoming there -- guess, between and the kind back a my first bit, stepping

Ned Rand

Ned. approach have it's always to is been taken. really consistent the we We've Chris, the very there market that not. No, in

Christopher Campbell

And increases just Got core Okay. quarter. a operating I on it. better And you I then was on of just book? guess, this it are ratio of lot year? this in your loss mean, Lloyd's. overall then rate what kind plans terms that seeing

Ned Rand

lag. you results on So quarter would Chris, for I a report X the we Lloyd's are that remind

quarter So we what ex fourth Lloyd's, seeing fourth that you're our into accelerated from is, cash the quarter.

having that what the then marketplace with substantial for broadly forward going potential his the the Pricing, think, syndicate pricing. I get risk-affected of we'll comments at with somewhat seeing Certainly, meeting Lloyd's, much better that. other well indication of XXXX what hardening I and on So a be potentially reinsurance hearing price and in solutions and -- meeting are think we're outlined a in beyond increases year we'll looking looking is solutions market. accounts, few we they're in at a Howard, Board weeks a

Christopher Campbell

close get buybacks know Okay. X-year Got -- be conserve term quarter, yes, just we I that trying now in but -- probably think lot in of to this guess, a And to your would the capital case it. probably off. severities, any somewhere no but cut is calculate that? you're just how you I I price for should higher about just of repurchases? guess, available And I

Ned Rand

question, Chris. Good

profitably to work We be best at kind out what we certainly we if opportunities We opportunities can focus capital think looking put continuous don't near- look is think we part continues the to to it a find continue return of extent and shareholders and on way evaluate to in be the there that that's needs, certainly prefer in big or first our that of mix. to capital would is a and market. think to work, of mid-term, are will our there foremost to going and buybacks those we our the our areas that are at that what part put basis, then to we share capital the to to

Christopher Campbell

of, about model? you that guys could like there Okay. start the Got we now? book thinking be the X, a mean, something could baking like then, of it. X And is I into are multiple if think like in of we could is wheelhouse that

Ned Rand

recapture and of you depended for, buying above take emotion We've book the be want never on -- also We equation book going of to current upon multiple I caused basis. guidance by but is not and that that out the We sorry, kind the systematic kind market don't to might it at again, emphasize that that it on it at ROEs be have period. in target under will X-year long to it to we be value take really a look value probably looking do way. and dilution does of But opportunities. look just we that's it how a to

Christopher Campbell

you're not million getting show but verdict, $XX people's your and books. the other you $XX graph like book, in I million you're or you the advantageous And obviously buyer? the is as it. are higher Is I see it's -- to hitting Got a seeing? said environment, is Okay. of as it's M&A like mean, guess, more that You that becoming the starting claims more, becoming when

environment are So more a better, as like seeing favorable a M&A you I mean, buyer emerging?

Ned Rand

it's think a probably to I make early little that too call.

Operator

next ahead. James. of go Raymond The from Holanda will question be Marcos Please

Marcos Holanda

Hi good questions. the for Thanks taking morning.

rippling quick consider though through on Just reserves not be paid losses? we on even Mark's back to develop to unfavorably, reserves P&C. question Should Specialty your severity that really start might might

Ned Rand

Can kind it. -- to of question? understood make want you the I you sure repeat we can

repeating mind question. the If you don't

Marcos Holanda

your Yes. can that start not rippling we considering through if Ned, spite start unfavorably just of I'm just in to paid curious severity data? reserves develop

Ned Rand

appreciate. I No,

press is the remainder happens But loss we you. hard Okay, where trends also on his better. release what It fact-specific depends understand now comments that the with Stan I we in and forward. of it's in loss quarter of year. of going of much go, this Thank said is for on kind is might the so expect so indicative that kind of depending what call. trends think to

are I and or can know monitor continue of balance strength certainly, focus do on other. are I we'll in we to I that, that that cautious the but is believe say sheet. to But the environment being don't given the way one appropriately our think we everything maintaining we we

Stan Starnes

we'd it. Stan, account is this into we wouldn't development, today, -- wait obviously take that to for going we And If again. see unfavorable were we thought

what reserves. we're not amount So we is for, called favorable is of just having add development. which to reducing doing the We're think to

Marcos Holanda

them I then Comp. Thanks we're And book? some an a their companies is spend it. and is in what your on so are just us for improvements seeing -- in second my update Workers' what And if loss some Got are and minute question could guess, guys that. seeing are of And you on give data. you reporting, guys still reporting

Mike Boguski

book of saw has XX Yes. frequency reductions over, the perspective, in not morning. say, business last We're that material our the flattened Absolutely. -- we claim out. frequency the From really Good seeing years. the

the and the XXXX, quieter segment Comp. where On the it both Reinsurance for quarter segment, Workers' Comp is was the Insurance relative severity side to Workers' first primarily for SPC

Operator

JMP. The Please next ahead. go of will be Carletti question from Matt

Matt Carletti

And the questioning, Good morning. think med wanted I'm you thinking or mal. was Thanks. on, it think think this kind just how environment the competitive to coding, Paul's in you up about right I but of see that it get for price I price. of product. have success comes ProAssurance large charge getting your competition that is when has think too the case less that premium product, get gap But in, you to described you kind can and and guys about I about a have it, I premium a follow if typically

question kind getting is, is and a you rate the able of up you and is is, are gap so that set getting price, is that them -- more about it bit to even you And course, competitive lot convert you look competitor than your more and it getting closing, of, rate, about less about more as little you between environment, want but isn't the guess, at my you gap rate a being, on if where I on that. it

production the important more important price or than as So business new retentions the looking change? equally at and maybe looking at is necessarily strong

Frank O'Neil

want you that? do to Howard, take

Howard Friedman

accurate. doesn't I'd that's turns the characterize we're Sure. understand this to a the of the -- lot your we that I'd paid, solution it need in will are rate. than there a that competitive that assuming of ratios our will And rate, the given booking will more right and will what years. do. obviously, assuming on if and everybody where combined a great it correct that rate more market, less characterize in companies have competitors I seen about that are way. and more have a flow many past percentage-wise encountered we out I is dollar-wise that increases and as we're now, severity several question we've price it regard given that And assumptions rate, there that need that advantage given well But that need and the correct, than We out I be pricing over it through lot and be If more rate. need we happy. say assuming been we result, in think in we've we our

Matt Carletti

that happening was And can't tell things to necessarily because your always peers that sense push X% that some to suggests their that Okay. see a follow-on the today, that market some -- to in to do positions getting pricing, that you you your than lot is more are I the there's you is, -- it and tough of having in you're if catch-up? play guess, renewal but that's that are of see rate

Howard Friedman

up there And retention others continuing and better In process, in And certainly, able mentioned now think not for are based our with the I that offer: it. high as we aren't quality on have Yes. maintain on and we actual indicates in positive there time We at that. this is rate reputation, claims others that able out in options. we see difference we more that are -- to what but a there are we think sustain that experience point I we're can fact and that drop at certainly rate believe many and earlier, been get are indicates that to that to moving through can levels, the those limit a looking price there rate you that. that, that a fact we historically -- move

Operator

Kumar And the ahead. Please follow-up go from of next question will Research. Buckingham Amit be

Amit Kumar

Thanks.

any how I since Just wondering, that a to it's you just that? don't firstly, were And U.S. about have very in cats. business, wanted quickly on the we exposure I that Lloyd's should there and think And know lag, clarify to from was QX windstorm on business. some losses Japanese

Ned Rand

a have is going right don't indication to look what like. have we QX exposure to now Amit, that. windstorm, Japanese don't believe any material We good I on of

sense we better As point, up a a And that week at I of mentioned, or like. QX look coming we got will should their in a so. have Board meeting what

Amit Kumar

Got years. of asking differently? dividend you about multiple you've the too was only was opportunities? think on nice someone it. the early about to it pull at Or And and discussion question back that is be sort prudent I it forget, a these thinking about would it emerging that? special some you had know And Are to special capital. other look on of of about given think how I capital. over I

Stan Starnes

think billion billion too rate, over something stewards even and the dividends. of of frequent It's or during just of capital years. maybe capital. the look and We've know, given of share at proven just approaching capital, last good over special $X capital $X form time that at buybacks, dividends in period of back billion It's $X XX capital We very every I on capital an Stan. as think to more you it's Senior about have early Board that. Amit, examines we of management meeting. over

can and capital forward. so and we robust shareholders do to necessary it fact, in use obligations have the that's keep that's we Our as When by business the do policyholders. in decision strong, those capital to future. which return when go the vibrant, and which is every first And it we as to in make said the And to prior to will cannot we what years at the earlier, and, Ned as we preference, we that that, able to that. meet we'll be and organization we looked decisions shareholders need its to a its the work by return to we will put profitability. XX then things metric continue at obligations for metric in have been the look And order

do at thing anybody to I as Amit, be positions. think we'll we terms one and will this take I to happy their Frank's both the and respective that, moment last a in for act mention best discussion this in call but and just the from that many away of in as the earnings is questions Howard want interest past let has, will that we is and of prudently least prologue act said veer shareholders. me Having is

a take continue have both It the the bases of many, level, Howard At through I you they would forward, they been the part different organization weekend this level have of you to are and involved each know grateful they all miss and both some not during Frank the that adequately them. organization will to have the on of to to that be personal that for earnings done. day organization. will the friendships a with of with present we made perhaps the and lifetime will forward. contributions as on many be them going years describe And have While they and professional very rest calls the formed go we

we them miss much will. not as will as you you, assure I Although

are a for contributions going Alabama to very money that to pretty organization and grateful the with started now think And Howard that fact We them. stop acknowledge the this organization that. borrowed you, Frank are million the have what sits We in before in remarkable you credit lot unbelievable it's is due and of and about forward. made $X XXXX they the when of

for So it. I publicly them thank

Amit Kumar

And Howard up questions Frank, I help putting endless our for and all so would over echo the your with much. so thanks that. thanks years, and

Operator

follow-up additional from of an go have Please SunTrust. Mark we question Hughes And ahead.

Mark Hughes

how you. question. I'll are The What to us what Thank follow subs, Hard quarter. number Yes. there to on ask weaker think on fundamental that? and drove equity And earnings of forward? drivers this that? the but that, this unconsolidated about refresh up the for it Obviously, going

Stan Starnes

our of Mark, guess, website. specifically out very on investments list all I our first, we

unconsolidated You there. what a in each equity private Any is. can investment equity subs, find will our link a investments. of It take it's you number to

report Some carry. their But of lag, we the that a volatile large more investments by investments are a QX on that. do than other those there's and by those that's so of bit nature impacting lag from

there historically, seen ups have on downs and statement. you as so income within our line are And that

an financial operating quarter what line. on the line, and earnings basis so for negative or rate of that that asset of a a credits amortization that the tax On And and the is a piece -- flows you the the benefit our reason those for us. it's on negative a taxes, line credit that is the for in tax investments through tax of the other is credits. the on tax credits see particular fact through the tax statements, see you loss that Importantly, as

presentations, over those of as expected of that amortize in the loss investor of a that next in And find show running several so can and that's got a couple are we've the through, Within those off. run years, part how big quarter. our piece you those you see good you losses reason the investments always other but to a off that line the schedules

Operator

comments. like would conclude to and question-and-answer to ladies will our And any Mr. this conference gentlemen, session. for I closing O'Neil back the hand

Frank O'Neil

next that joining August. The hear McEwen we for Ken of in when you everyone, Bye. will be you Thanks, join voice us.

Operator

you attending gentlemen, presentation. lines. this your and concluded. Ladies time, disconnect conference you for has today's Thank sir. At you, may Thank the

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