ProAssurance(PRA) - 2023 Q4 - Annual Results

Financial Performance - ProAssurance reported a net income of $6.4 million, or $0.12 per diluted share, for Q4 2023, compared to a net income of $13.9 million, or $0.26 per diluted share, in Q4 2022, reflecting a 54.3% decrease [2][7]. - Total revenues for Q4 2023 were $297 million, a slight increase of 0.8% compared to $295 million in Q4 2022 [7]. - The total liabilities decreased to $4.52 billion as of December 31, 2023, from $4.60 billion a year earlier [9]. - Non-GAAP operating loss for Q4 2023 was $2,548,000 compared to an operating income of $7,617,000 in Q4 2022 [41]. - The effective tax rate for the corporate segment was 34.5% in Q4 2023, compared to 5.5% in Q4 2022, reflecting significant changes in tax expenses [35]. - The statutory tax rate applied to taxable items was 21%, affecting net income calculations [43]. Underwriting Performance - The consolidated combined ratio increased to 112.0% in Q4 2023, up 7.8 points from 104.2% in Q4 2022, primarily due to rising average claim costs in the Workers Compensation Insurance segment [3][10]. - The current accident year net loss ratio for Q4 2023 was 80.0%, up from 76.2% in Q4 2022, indicating worsening claims experience [10]. - The combined ratio for the Specialty P&C segment increased to 104.9% in Q4 2023 from 104.0% in Q4 2022, indicating a deterioration in underwriting performance [13]. - The Workers' Compensation Insurance segment reported a net loss ratio of 97.9% in Q4 2023, significantly up from 67.0% in Q4 2022, reflecting higher average claim costs [23]. - The total expenses for the Workers' Compensation Insurance segment increased by 22.9% to $51.65 million in Q4 2023, compared to $42.03 million in Q4 2022 [22]. Premiums and Business Growth - Gross premiums written decreased by 7% to $209 million in Q4 2023, while new business written surged by 103% to $24 million [5][7]. - Gross premiums written in the Specialty P&C segment decreased by $14.9 million or 8.4% year-over-year in Q4 2023, totaling $161.77 million [12]. - Net premiums earned in the Specialty P&C segment declined by 3.1% to $193.61 million in Q4 2023, compared to $199.86 million in Q4 2022 [12]. - New business written in the Specialty P&C segment improved to $18.1 million in Q4 2023, compared to $9.9 million in the same quarter last year [14]. - Premium retention in the Specialty P&C segment was 83% in Q4 2023, down two points from the same quarter in 2022 [14]. Investment Performance - Net investment income rose by 17% to $34 million in Q4 2023, compared to $28.8 million in Q4 2022 [5][7]. - Net investment income increased by 61.2% to $664,000 in Q4 2023, and for the year, it rose by 122.4% to $2,289,000 from $1,029,000 [29]. - Net investment gains for the corporate segment were $8,322,000 in Q4 2023, a 256.3% increase from $2,336,000 in Q4 2022 [35]. Shareholder Value - Book value per share increased by 7% to $21.82 as of December 31, 2023, driven by $88 million in after-tax unrealized holding gains [5][9]. - Book value per share at December 31, 2023, was $21.82, an increase from $20.46 at December 31, 2022 [44]. - Non-GAAP adjusted book value per share decreased to $25.83 at December 31, 2023, from $25.99 at December 31, 2022 [44]. - The company repurchased 3.1 million common shares during 2023, contributing $0.59 to adjusted book value per share [44]. Segment Reporting and Restructuring - ProAssurance reorganized its segment reporting, reducing the number of operating segments from five to four, aligning with current operational oversight [11]. - The company recognized net favorable prior accident year reserve development of $1.4 million in Q4 2023, compared to $0.8 million in Q4 2022 [17]. - The company experienced a favorable prior accident year reserve development of $3 million, primarily from the Segregated Portfolio Cell Reinsurance segment [5]. Market Outlook - The company anticipates continued market expansion and product development in the healthcare professional liability sector [48]. - Foreign currency exchange rate movements have led to greater volatility in operating results due to increased participation in international programs [42].