ProAssurance Corporation (NYSE:PRA) Q2 2023 Earnings Conference Call August 9, 2023 10:00 AM ET Company Participants Ned Rand - President and CEO Dana Hendricks - CFO Rob Francis - President, Healthcare Professional Liability Kevin Shook - President, Eastern Alliance Conference Call Participants Mark Hughes - Truist Paul Newsome - Piper Sandler Robert Farnam - Janney Matt Carletti - JMP Operator Good morning, everyone, and welcome to ProAssurance's Conference Call to discuss the company's Second Quarter 202 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) Commission File Number: 0-16533 ProAssurance Corporation (Exact name of registrant as specified in its charter) (State or other jurisdiction of Delaware 63-1261433 incorporation or organization) (I.R.S. Employer Identification No.) 100 Brookwood Place, Birmingham, AL 35209 (Address of principal executive offices) (Zip Code) (205) 877-4400 (Registrant's telephone number, including area code) (Former ...

ProAssurance Corporation (NYSE:PRA) Q1 2023 Earnings Conference Call May 10, 2023 10:00 AM ET Company Participants Jason Gingerich - Investor Relations Ned Rand - President and Chief Executive Officer Dana Hendricks - Chief Financial Officer Conference Call Participants Greg Peters - Raymond James Mark Hughes - Truist Paul Newsome - Piper Sandler Jason Gingerich Welcome to ProAssurance’s Conference Call to discuss the company’s First Quarter 2023 Results. These results were reported in a news release issued ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) Commission File Number: 0-16533 ProAssurance Corporation (Exact name of registrant as specified in its charter) (State or other jurisdiction of Delaware 63-1261433 (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | --- ...

ProAssurance Corporation (NYSE:PRA) Q4 2022 Results Conference Call February 28, 2023 10:00 AM ET Company Participants Jason Gingerich - VP of IR Ned Rand - CEO, President & Director Dana Hendricks - Chief Financial Officer Mike Boguski - President of Specialty Property & Casualty Segment Kevin Shook - President of Workers Compensation Insurance Conference Call Participants Mark Hughes - Truist Securities Operator Good morning, all. I would like to welcome you to ProAssurance Q4 2022 Earnings Conference Cal ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022, or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . 100 Brookwood Place, Birmingham, AL 35209 (Address of principal executive offices) (Zip Code) (205) 877-4400 (Registrant's telephone number ...

ProAssurance Corporation (NYSE:PRA) Q3 2022 Earnings Conference Call November 10, 2022 10:00 AM ET Company Participants Jason Gingerich - VP, IR Ned Rand - President and CEO Dana Hendricks - CFO Michael Boguski - President, Specialty, Property and Casualty Lines Kevin Shook - President, Worker’s Compensation Insurance Conference Call Participants Paul Newsome - Piper Sandler Operator Ladies and gentlemen, good morning and thank you for attending today ProAssurance Third Quarter 2022 Earnings call. My name i ...

Preliminary Information [Glossary of Terms and Acronyms](index=2&type=section&id=Glossary%20of%20Terms%20and%20Acronyms) This section defines key financial, insurance, and regulatory terms and acronyms for clarity throughout the report - The report includes a comprehensive glossary defining key terms such as **HCPL** (Healthcare professional liability), **IBNR** (Incurred but not reported), and **FAL** (Funds at Lloyd's), which are essential for understanding the company's business[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) [Caution Regarding Forward-Looking Statements](index=4&type=section&id=Caution%20Regarding%20Forward-Looking%20Statements) This section warns that forward-looking statements are based on current estimates and actual results may differ due to various risks and uncertainties - Forward-looking statements cover aspects like liquidity, capital requirements, investment performance, premiums, and loss reserves[13](index=13&type=chunk) - Key risk factors that could cause actual results to differ include changes in economic conditions, regulatory actions, tort reforms, interest and tax rate changes, market performance, and uncertainties in loss reserve estimates[14](index=14&type=chunk) - Specific risks related to the company's participation in the Lloyd's market are also highlighted, such as levies by the Council of Lloyd's, rating agency downgrades of Lloyd's, and dependence on a specialized management team[16](index=16&type=chunk) PART I. FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents ProAssurance Corporation's unaudited condensed consolidated financial statements for Q3 2022, including balance sheets, income statements, and cash flows, with explanatory notes [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased from **$6.19 billion** to **$5.78 billion**, primarily due to reduced fixed maturity investments, while shareholders' equity declined significantly Condensed Consolidated Balance Sheet Data (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Investments** | $4,385,507 | $4,828,323 | | **Total Assets** | $5,783,319 | $6,191,477 | | **Total Liabilities** | $4,717,323 | $4,763,090 | | **Total Shareholders' Equity** | $1,065,996 | $1,428,387 | [Condensed Consolidated Statements of Income and Comprehensive Income](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) The company reported a **net loss of $14.3 million** for the nine months ended September 30, 2022, a reversal from prior-year net income, primarily due to net investment losses Income Statement Highlights (in thousands, except per share data) | Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net Premiums Earned | $771,337 | $698,598 | | Total Revenues | $811,980 | $811,344 | | Total Expenses | $832,947 | $776,900 | | Gain on Bargain Purchase | $0 | $74,408 | | **Net Income (Loss)** | **($14,344)** | **$111,984** | | **Comprehensive Income (Loss)** | **($354,869)** | **$78,264** | | Diluted EPS | ($0.27) | $2.07 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly decreased to **$6.7 million**, while overall cash and cash equivalents declined by **$102.2 million** for the nine months ended September 30, 2022 Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $6,673 | $69,363 | | Net Cash from Investing Activities | ($91,749) | ($25,531) | | Net Cash from Financing Activities | ($17,154) | ($56,661) | | **Decrease in Cash & Cash Equivalents** | **($102,230)** | **($12,829)** | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of accounting policies and financial data, covering fair value measurements, investments, loss reserves, and segment information - Beginning in 2022, the company revised its process for estimating Unallocated Loss Adjustment Expenses (ULAE) due to the integration of NORCAL, prospectively increasing operating expenses by **$21.8 million** and decreasing net losses by the same amount, with no impact on total expenses or net income[37](index=37&type=chunk) - The company holds passive interests in various Variable Interest Entities (VIEs), primarily LPs/LLCs, totaling **$276.2 million** at Sep 30, 2022, and has consolidated PPM RRG, acquired with NORCAL, as its primary beneficiary[148](index=148&type=chunk)[149](index=149&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's analysis of financial condition and operations, covering critical accounting estimates, liquidity, and detailed results across five business segments [Overview](index=44&type=section&id=MD%26A_Overview) ProAssurance operates across five segments, with critical accounting estimates including loss reserves and investment valuation, and a key 2022 change in ULAE estimation - The company operates in five segments: Specialty P&C, Workers' Compensation Insurance, Segregated Portfolio Reinsurance, Lloyd's Syndicates, and Corporate[174](index=174&type=chunk) - A change in the estimation of ULAE was implemented in 2022, reclassifying costs from 'net losses and loss adjustment expenses' to 'underwriting, policy acquisition and operating expenses' with no impact on total expenses or net income[179](index=179&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=MD%26A_Liquidity%20and%20Capital%20Resources) ProAssurance's liquidity, primarily from investment revenues, included **$86 million** in cash and liquid investments, while operating cash flow significantly decreased due to higher paid losses and expenses - The holding company held approximately **$86 million** in cash and liquid investments outside of its insurance subsidiaries as of September 30, 2022[181](index=181&type=chunk) - Operating cash flow for the nine months ended Sep 30, 2022, decreased by **$62.7 million** compared to the prior year, mainly due to a **$204.6 million** increase in paid losses and a **$96.9 million** increase in cash paid for operating expenses, largely related to the NORCAL acquisition[195](index=195&type=chunk) - The company has **$250 million** available under its Revolving Credit Agreement, with a potential **$50 million** accordion feature, and no borrowings were outstanding as of November 2, 2022[181](index=181&type=chunk) [Results of Operations](index=54&type=section&id=MD%26A_Results%20of%20Operations) The company reported a **net loss of $14.3 million** for the nine months ended September 30, 2022, with a combined ratio of **105.7%**, influenced by the NORCAL acquisition and investment valuations Consolidated Financial Highlights (in thousands) | Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net Premiums Written | $803,055 | $677,527 | | Net Premiums Earned | $771,337 | $698,598 | | Net Losses and LAE | $585,166 | $555,030 | | **Net Income (Loss)** | **($14,344)** | **$111,984** | | Combined Ratio | 105.7% | 108.1% | - Non-GAAP operating income for the nine months ended Sep 30, 2022 was **$21.0 million**, down from **$42.5 million** in the prior year, excluding net investment gains/losses and other non-recurring items like the 2021 gain on bargain purchase[242](index=242&type=chunk) - Book value per share decreased to **$19.75** at Sep 30, 2022 from **$26.46** at year-end 2021, primarily due to a **$6.00 per share** negative impact from Accumulated Other Comprehensive Income (AOCI) driven by unrealized investment losses[247](index=247&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=100&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks are interest rate and credit risk, with a **100 bps interest rate increase** projected to decrease fixed maturities fair value from **$3.43 billion** to **$3.31 billion** - The company's primary market risks are identified as **interest rate risk** and **credit risk**[359](index=359&type=chunk) Interest Rate Sensitivity of Available-for-Sale Fixed Maturities (in millions) | Interest Rate Shift | Fair Value at Sep 30, 2022 | | :--- | :--- | | -100 bps | $3,558 | | **Current** | **$3,431** | | +100 bps | $3,309 | | +200 bps | $3,193 | - As of September 30, 2022, **92%** of the company's fixed maturity securities were rated investment grade, which helps mitigate credit risk[369](index=369&type=chunk) [Controls and Procedures](index=103&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2022, with no significant changes in internal controls during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2022[372](index=372&type=chunk) - No significant changes were made to internal controls over financial reporting during the third quarter of 2022[373](index=373&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=103&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 6 for details on legal proceedings, noting that no material reserves were established for corporate legal actions - For information on legal proceedings, the report directs readers to Note 6 of the financial statements[374](index=374&type=chunk) [Risk Factors](index=103&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section states no material changes to risk factors previously disclosed in the company's 2021 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the company's 2021 Form 10-K[375](index=375&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=103&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company repurchased **138,980 shares** in July 2022 at **$23.38 per share**, with **$106.4 million** remaining authorized for future repurchases Share Repurchase Activity (Q3 2022) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2022 | 138,980 | $23.38 | | August 2022 | — | N/A | | September 2022 | — | N/A | | **Total** | **138,980** | **$23.38** | - As of September 30, 2022, approximately **$106.4 million** remained authorized for share or debt repurchases under the company's plan, which has no expiration date[376](index=376&type=chunk) [Exhibits](index=104&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including officer certifications and XBRL Interactive Data Files - Filed exhibits include officer certifications pursuant to SEC Rules 13a-14(a) and 13a-14(b), and XBRL data files[378](index=378&type=chunk)

ProAssurance Corp. (NYSE:PRA) Q2 2022 Earnings Conference Call August 9, 2022 10:00 AM ET Company Participants Jason Gingerich - VP, IR Ned Rand - President and CEO Dana Hendricks - CFO Michael Boguski - President, Specialty, Property and Casualty Lines Kevin Shook - President, Worker’s Compensation Insurance Conference Call Participants Matthew Carletti - JMP Securities Paul Newsome - Piper Sandler Mark Hughes - Truist Securities Gary Ransom - Dowling & Partners Operator Good morning. Thank you for atten ...

Preliminary Information [Glossary of Terms and Acronyms](index=2&type=section&id=Glossary%20of%20Terms%20and%20Acronyms) This section provides definitions for various terms and acronyms used throughout the report to ensure clarity and understanding for the reader. It covers financial, regulatory, and company-specific terminology - The glossary defines key acronyms such as GAAP (Generally accepted accounting principles), HCPL (Healthcare professional liability), IBNR (Incurred but not reported), and defines company-specific entities like NORCAL (NORCAL Insurance Company) and Syndicate 1729[9](index=9&type=chunk) [Caution Regarding Forward-Looking Statements](index=4&type=section&id=Caution%20Regarding%20Forward-Looking%20Statements) The company cautions readers that this report contains forward-looking statements based on current estimates and expectations, which are subject to significant risks and uncertainties. These statements are not guarantees of future performance, and actual results could differ materially. The company identifies numerous risk factors, including economic conditions, regulatory changes, market performance, and risks associated with its participation in the Lloyd's market - Forward-looking statements pertain to future liquidity, investment performance, premiums, losses, and market conditions[13](index=13&type=chunk) - Key risks include changes in economic conditions, regulatory actions, performance of financial markets, consolidation of insureds, and uncertainties in estimating loss reserves[14](index=14&type=chunk) - Specific risks related to Lloyd's Syndicates include potential levies by the Council of Lloyd's, dependence on a specialized management team, and potential rating downgrades of Lloyd's as a whole[17](index=17&type=chunk) PART I. FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for ProAssurance Corporation as of June 30, 2022, and for the three and six-month periods then ended. It includes the balance sheets, statements of income, changes in capital, and cash flows, along with detailed notes explaining the accounting policies and financial details [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a decrease in total assets from $6.19 billion at year-end 2021 to $5.89 billion at June 30, 2022. This was primarily driven by a decline in the fair value of investments. Total shareholders' equity saw a significant reduction from $1.43 billion to $1.17 billion over the same period, largely due to a substantial increase in accumulated other comprehensive loss Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Investments** | $4,548,977 | $4,828,323 | | **Total Assets** | $5,891,190 | $6,191,477 | | **Total Liabilities** | $4,721,301 | $4,763,090 | | **Total Shareholders' Equity** | $1,169,889 | $1,428,387 | [Condensed Consolidated Statements of Income and Comprehensive Income](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) For the six months ended June 30, 2022, the company reported a net loss of $5.2 million, a stark contrast to the $99.8 million net income in the same period of 2021. The 2022 results were impacted by significant net investment losses of $37.4 million, compared to gains of $19.7 million in 2021. The prior year's income was also boosted by a $74.4 million gain on bargain purchase. Comprehensive loss was $255.7 million, driven by a large other comprehensive loss from investment portfolio valuation changes Financial Performance Summary (in thousands, except per share data) | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net premiums earned | $512,982 | $426,351 | | Total revenues | $538,897 | $501,644 | | Net investment gains (losses) | ($37,390) | $19,682 | | Gain on bargain purchase | $0 | $74,408 | | **Net income (loss)** | **($5,219)** | **$99,785** | | **Diluted EPS** | **($0.10)** | **$1.85** | | Other comprehensive income (loss) | ($250,472) | ($22,155) | | **Comprehensive income (loss)** | **($255,691)** | **$77,630** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2022, net cash used by operating activities was $3.7 million, a significant downturn from the $31.0 million provided in the same period of 2021. Net cash used in investing activities increased to $91.1 million from $70.9 million. These factors led to a $108.8 million decrease in cash and cash equivalents, ending the period at $34.8 million Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash provided (used) by operating activities | ($3,671) | $31,015 | | Net cash provided (used) by investing activities | ($91,113) | ($70,929) | | Net cash provided (used) by financing activities | ($13,986) | ($15,072) | | **Increase (decrease) in cash and cash equivalents** | **($108,770)** | **($54,986)** | | Cash and cash equivalents at end of period | $34,832 | $160,796 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide essential context to the financial statements, detailing accounting policies, segment information, and specifics on key accounts like investments, loss reserves, debt, and equity. Notable disclosures include a change in estimating ULAE, details on fair value measurements, significant unrealized losses in the investment portfolio, and the financial impact of the NORCAL acquisition - A change in accounting estimate for Unallocated Loss Adjustment Expenses (ULAE) was made in 2022, reclassifying $13.6 million from 'net losses' to 'operating expenses' for the six months ended June 30, 2022, with no impact on total expenses or net income[37](index=37&type=chunk) - The company holds a $24 million contingent consideration liability related to the NORCAL acquisition, which is measured at fair value using Level 3 inputs[47](index=47&type=chunk)[61](index=61&type=chunk) - The available-for-sale fixed maturities portfolio had gross unrealized losses of $302.4 million as of June 30, 2022, a significant increase from $30.8 million at year-end 2021, primarily due to rising interest rates[79](index=79&type=chunk) - For the six months ended June 30, 2022, the company recognized net favorable prior year loss reserve development of $24.3 million[120](index=120&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management provides a detailed narrative on the company's financial condition and results of operations. The discussion covers liquidity and capital resources, an in-depth analysis of operating results by segment, and an explanation of critical accounting estimates. Key themes include the integration of NORCAL, the impact of rising interest rates on the investment portfolio, and performance trends within the Specialty P&C and other insurance segments [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains liquidity through investment revenues, dividends from subsidiaries, and management fees. As of June 30, 2022, the holding company held $55 million in cash and liquid investments. Operating cash flow decreased by $34.7 million year-over-year for the first six months, primarily due to higher paid losses and operating expenses following the NORCAL acquisition. The investment portfolio is primarily high-quality fixed income, but its value has declined due to interest rate increases. Debt consists mainly of $250 million in senior notes and $176.6 million in Contribution Certificates - Operating cash flow for the six months ended June 30, 2022, was negative $3.7 million, a decrease of $34.7 million from the prior year, mainly due to a $137.4 million increase in paid losses and a $59.1 million increase in cash paid for operating expenses, largely related to the NORCAL acquisition[187](index=187&type=chunk)[188](index=188&type=chunk) - The investment portfolio is 78% in available-for-sale fixed maturities, with an average rating of A+. The weighted average effective duration of the fixed maturity portfolio was 3.74 years at June 30, 2022[193](index=193&type=chunk)[197](index=197&type=chunk) - In July 2022, the company repurchased approximately 139,000 common shares for $3.2 million, with $106.4 million remaining under the Board's authorization as of August 3, 2022[199](index=199&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) Consolidated results for the first six months of 2022 show a net loss of $5.2 million compared to a $99.8 million net income in 2021. The decline is primarily due to significant net investment losses and the absence of the prior year's one-time gain on the NORCAL acquisition. Net premiums earned grew 20.3% to $513.0 million, driven by the NORCAL acquisition. The consolidated combined ratio improved to 104.6% from 109.1%. Non-GAAP operating income was $24.0 million, down from $28.7 million in the prior year Consolidated Results Summary (Six Months Ended June 30) | Metric (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Net premiums earned | $512,982 | $426,351 | | Net income (loss) | ($5,219) | $99,785 | | Non-GAAP operating income | $24,008 | $28,688 | - The consolidated combined ratio for the six months ended June 30, 2022, improved to 104.6% from 109.1% in 2021. Excluding transaction-related costs, the ratio was relatively flat at 104.3% vs 104.2%[229](index=229&type=chunk) - The Specialty P&C segment's net premiums earned grew 34.2% year-over-year for the six-month period, driven by the NORCAL acquisition. The Lloyd's Syndicates segment saw a 53.8% decrease due to reduced participation[210](index=210&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=98&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks are identified as interest rate risk and credit risk, with limited exposure to foreign currency risk. The fixed maturities portfolio is exposed to interest rate fluctuations, which directly impact its market valuation. Credit risk is managed by focusing on investment-grade securities. As of June 30, 2022, 92% of the fixed maturity portfolio was rated investment grade - The company is principally exposed to interest rate risk and credit risk[352](index=352&type=chunk) Interest Rate Sensitivity of AFS Fixed Maturity Securities (June 30, 2022) | Interest Rate Shift | Estimated Fair Value (in millions) | | :--- | :--- | | -100 bps | $3,664 | | **Current** | **$3,532** | | +100 bps | $3,562 | - Credit risk is controlled by emphasizing high-quality investments; 92% of the fixed maturity portfolio was rated investment grade as of June 30, 2022[361](index=361&type=chunk) [Controls and Procedures](index=101&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the principal executive and financial officers, evaluated the company's disclosure controls and procedures as of June 30, 2022. They concluded that these controls are effective. The report also states that there have been no significant changes in internal controls over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2022[365](index=365&type=chunk) - No significant changes in internal controls over financial reporting occurred during the quarter ended June 30, 2022[366](index=366&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=101&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section refers the reader to Note 6 of the Notes to Condensed Consolidated Financial Statements for information regarding legal proceedings. Note 6 states the company is involved in various legal actions in the ordinary course of business, which are considered in the loss reserving process, and that no material reserves were established for corporate legal actions as of June 30, 2022 - For information on legal proceedings, the report refers to Note 6 of the financial statements[367](index=367&type=chunk) [Risk Factors](index=101&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company states that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2021 - There have been no material changes to the risk factors disclosed in the company's December 31, 2021 Form 10-K[368](index=368&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=101&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECU%20RITIES%20AND%20USE%20OF%20PROCEEDS) This section details the company's share repurchase activity. During the second quarter of 2022 (April 1 to June 30), the company did not repurchase any of its common shares. The remaining authorization for share repurchases or debt retirement under the current plan was approximately $109.6 million at the end of the quarter Issuer Purchases of Equity Securities (Q2 2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - April 30, 2022 | 0 | N/A | | May 1 - May 31, 2022 | 0 | N/A | | June 1 - June 30, 2022 | 0 | N/A | - As of June 30, 2022, approximately $109.6 million remained available for share repurchases or debt retirement under the Board's authorization[369](index=369&type=chunk) [Exhibits](index=102&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including an amendment to a facility agreement, certifications by the CEO and CFO as required by SEC rules, and XBRL data files - Filed exhibits include officer certifications (31.1, 31.2, 32.1, 32.2) and XBRL interactive data files[371](index=371&type=chunk) Signature [Signature Details](index=103&type=section&id=Signature%20Details) The report is duly signed on August 8, 2022, by Dana S. Hendricks, the Chief Financial Officer of ProAssurance Corporation, acting as the duly authorized officer and principal financial officer - The Form 10-Q was signed on August 8, 2022, by Dana S. Hendricks, Chief Financial Officer[373](index=373&type=chunk)