BIRMINGHAM, Ala., Feb. 24 /PRNewswire-FirstCall/ -- ProAssurance
(NYSE: PRA) Corporation's Operating Income for 2009 was $215
million or $6.49 per diluted share. Net Income for 2009 was $222
million or $6.70 per diluted share. For the fourth quarter of 2009,
ProAssurance reports Operating Income of $79 million, or $2.42 per
diluted share and Net Income of $85 million, or $2.58 per diluted
share. (Logo:
http://www.newscom.com/cgi-bin/prnh/20081024/PROASSURANCELOGO )
Gross Premiums Written in 2009 increased 17% over the prior year,
to $554 million, and were $119 million in the fourth quarter, 23%
higher than the year-ago quarter. Book Value per share is $52.59,
an increase of 23% during 2009. Unaudited Consolidated Financial
Summary (in thousands, except per share data) Three Months Ended
Year Ended December 31, December 31, 2009 2008 2009 2008 Gross
Premiums Written $119,208 $97,089 $553,922 $471,482 Net Premiums
Written $112,408 $85,398 $514,043 $429,007 Net Premiums Earned
$133,952 $109,484 $497,543 $459,278 Net Investment Income $38,106
$36,166 $150,945 $158,384 Equity in Earnings (Loss) of
Unconsolidated Subsidiaries $1,110 $(4,082) $1,438 $(7,997) Net
Realized Investment Gains (Losses) $7,970 $(9,903) $12,792
$(50,913) Total Revenues $183,880 $136,383 $672,683 $567,162
Guaranty Fund Assessments (Recoupments) $97 $(340) $(533) $(1,334)
Interest Expense $838 $1,037 $3,477 $6,892 Total Expenses $58,841
$24,418 $353,921 $318,776 Tax Expense $40,462 $35,673 $96,736
$70,661 Net Income $84,577 $76,292 $222,026 $177,725 Operating
Income $79,460 $79,537 $215,210 $206,980 Net Cash Provided by
Operating Activities $59,648 $22,996 $75,409 $167,883 Earnings per
Share Three Months Ended Year Ended December 31, December 31, 2009
2008 2009 2008 Weighted average number of common shares outstanding
Basic 32,432 33,439 32,848 32,750 Diluted 32,805 33,758 33,150
34,362 Operating Income per share (Basic) $2.45 $2.38 $6.55 $6.32
Operating Income per share (Diluted) $2.42 $2.36 $6.49 $6.07 Net
Income per share (Basic) $2.61 $2.28 $6.76 $5.43 Net Income per
share (Diluted) $2.58 $2.26 $6.70 $5.22 Key Ratios Three Months
Ended Year Ended December 31, December 31, 2009 2008 2009 2008
Current Accident Year Loss Ratio 100.5% 94.0% 88.1% 86.4% Prior
Accident Year Loss Ratio (81.6%) (95.0%) (41.7%) (40.3%) Net Loss
Ratio 18.9% (1.0%) 46.4% 46.1% Expense Ratio 23.3% 22.2% 22.7%
21.7% Combined Ratio 42.2% 21.2% 69.1% 67.8% Operating Ratio 13.8%
(11.8%) 38.8% 33.3% Return on Equity 20.2% 22.1% 14.2% 13.3%
ProAssurance's Chief Executive Officer, W. Stancil Starnes, said,
"Our resolute commitment to the fundamentals of financial strength,
underwriting discipline and claims defense, all executed through
our dedication to Treated Fairly, propelled us to some of the best
results in the history of ProAssurance. The value we deliver is
allowing us to retain existing customers in a challenging
environment, while adding new insureds and new premium, through
organic growth and M&A." Non-GAAP Financial Measures Operating
Income is a "Non-GAAP" financial measure that is widely used in our
industry to evaluate the performance of underwriting operations.
Operating Income excludes the after-tax effects of realized gains
or losses, guaranty fund assessments and debt retirement losses,
and we believe it presents a more appropriate view of the
performance of our insurance operations. While we believe
disclosure of certain Non-GAAP information is appropriate, you
should not consider this information without also considering the
information we present in accordance with GAAP, which includes the
effect of net realized gains and losses, guaranty fund assessments
and debt retirement losses incurred during the quarter and year
ended December 31, 2009. The following table reconciles Net Income
to Operating Income. Reconciliation of Net Income to Operating
Income (in thousands, except per share data) Three Months Ended
Year Ended December 31, December 31, 2009 2008 2009 2008 Net Income
$84,577 $76,292 $222,026 $177,725 Items excluded in the calculation
of operating income: (Gain) loss on the extinguishment of debt $-
$(4,571) $2,839 $(4,571) Net realized investment (gains) losses
$(7,970) $9,903 $(12,792) $50,913 Guaranty Fund (recoupments)
assessments $97 $(340) $(533) $(1,334) Pre-tax effect of exclusions
$(7,873) $4,992 $(10,486) $45,008 Tax effect at 35% $2,756 $(1,747)
$3,670 $(15,753) Operating Income $79,460 $79,537 $215,210 $206,980
Per diluted common share: Net Income $2.58 $2.26 $6.70 $5.22 Effect
of adjustments $(0.16) $0.10 $(0.21) $0.85 Operating Income per
diluted common share $2.42 $2.36 $6.49 $6.07 Business Commentary --
Our retention of existing business in our historical medical
liability book increased from 88% in 2008 to 89% in 2009. The PICA
Group's (PICA) retention rate for their medical professional
liability business remained steady at 93% for full year 2009. --
The premium rate on policies we renewed in our historical medical
liability book declined an average of four percent in 2009, as our
pricing reflects the overall improvement in loss trends for the
past few years. Premium rates on renewing business at PICA were
essentially unchanged in 2009. -- We wrote $28 million of new
premium, not attributable to acquisitions, in our historical book
of professional liability business in 2009. Acquisitions accounted
for a total of $95 million of new business, led by The PICA Group,
which contributed $77 million of new premium to ProAssurance after
PICA became part of the company on April 1, 2009. -- We had
favorable net loss reserve development of $109.3 million in the
fourth quarter, bringing year-to-date favorable net loss reserve
development to $207.3 million, compared to $185.3 million in 2008.
The favorable development in 2009 is principally the result of a
reduction in expected loss costs, primarily from accident years
2003 through 2007. Investment Commentary -- Our overall investment
result for 2009, excluding realized gains and losses, was higher by
$2.0 million, reflecting improved results from our investment in
unconsolidated subsidiaries. This offset a 5% decline in Net
Investment Income, which was down primarily due to lower interest
rates on short term securities. -- We realized $12.8 million in
gains in our portfolio during 2009, which compares to net realized
investment losses of $50.9 million in 2008. -- We have updated the
online disclosure of our investment portfolio to provide details of
our holdings at December 31, 2009. The disclosure is available
under Supplemental Investor Information in the Investor Relations
section of our website, http://www.proassurance.com/. Balance Sheet
Highlights December 31, 2009 December 31, 2008 Shareholders' Equity
$1,704,595 $1,423,585 Total Investments $3,838,222 $3,575,942 Total
Assets $4,647,414 $4,280,938 Policy Liabilities $2,780,436
$2,693,101 Accumulated Other Comprehensive Income (Loss) $59,254
$(35,898) Goodwill $122,317 $72,213 Book Value per Share $52.59
$42.69 Capital Management -- During 2009 we purchased approximately
1.1 million shares of our common stock, at a cost of approximately
$52.0 million. Our purchases in the fourth quarter were
approximately 268,000 shares at a cost of approximately $13.9
million. We have approximately $115.4 million left in the
outstanding authorization granted by our Board in September, 2009.
About ProAssurance ProAssurance Corporation is the nation's largest
independently traded specialty writer of medical professional
liability insurance. ProAssurance is recognized as one of the top
performing insurance companies in America by virtue of its
inclusion in the Ward's 50 for the past three years. ProAssurance
is rated "A" by Fitch Ratings, which affirmed the rating in
January, 2010 and the ProAssurance Group is rated "A" (Excellent)
by A.M. Best. Conference Call Information -- Live: Thursday,
February 25, 2010, 9:00 am et. Investors may dial (877) 675-4753
(toll free) or (719) 325-4874. The call will also be webcast on our
website, http://www.proassurance.com/, and on StreetEvents.com. --
Replay: By telephone, through March 10, 2010 at (888) 203-1112 or
(719) 457-0820, using access code 4871246. The replay will also be
available through March 26, 2010 on our website,
http://www.proassurance.com/, and on StreetEvents.com. -- Podcast:
A replay, and other information about ProAssurance, is available on
a free subscription basis through a link on the ProAssurance
website or through Apple's iTunes. Caution Regarding
Forward-Looking Statements Statements in this news release that are
not historical fact or that convey our view of future business,
events or trends are specifically identified as forward-looking
statements. Forward-looking statements are based upon our estimates
and anticipation of future events and highlight certain risks and
uncertainties that could cause actual results to vary materially
from our expected results. We expressly claim the safe harbor
provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, for any forward-looking statements in this news release.
Forward-looking statements represent our outlook only as of the
date of this news release. Except as required by law or regulation,
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. Forward-looking statements are
generally 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. When
we address topics such as liquidity and capital requirements, the
value of our investments, 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
actions, legislative actions, payment or performance of obligations
under indebtedness, payment of dividends, and other, similar
matters, we are making forward-looking statements. The following
important factors are among those that could affect the actual
outcome of future events: -- general economic conditions, either
nationally or in our market areas, that are different than
anticipated; -- regulatory, legislative and judicial actions or
decisions that could affect our business plans or operations; --
the enactment or repeal of tort reforms; -- formation or
dissolution of state-sponsored malpractice insurance entities that
could remove or add sizable groups of physicians from the private
insurance market; -- the impact of deflation or inflation; --
changes in the interest rate environment; -- the effect that
changes in laws or government regulations affecting the U.S.
economy or financial institutions, including the Emergency Economic
Stabilization Act of 2008 and the American Recovery and
Reinvestment Act of 2009, may have on the U.S. economy and our
business; -- performance of financial markets affecting the fair
value of our investments or making it difficult to determine the
value of our investments; -- changes in accounting policies and
practices that may be adopted by our regulatory agencies and the
Financial Accounting Standards Board, or the Securities and
Exchange Commission; -- changes in laws or government regulations
affecting medical professional liability insurance or the financial
community; -- the effects of changes in the health care delivery
system; -- uncertainties inherent in the estimate of loss and loss
adjustment expense reserves and reinsurance, and changes in the
availability, cost, quality, or collectability of
insurance/reinsurance; -- the results of litigation, including
pre-or-post-trial motions, trials and/or appeals we undertake; --
bad faith litigation which may arise from our handling of any
particular claim, including failure to settle; -- loss of
independent agents; -- changes in our organization, compensation
and benefit plans; -- our ability to retain and recruit senior
management; -- our ability to purchase reinsurance and collect
payments from our reinsurers; -- increases in guaranty fund
assessments; -- our ability to achieve continued growth through
expansion into other states or through acquisitions or business
combinations; -- changes to the ratings assigned by rating agencies
to our insurance subsidiaries, individually or as a group; --
changes in competition among insurance providers and related
pricing weaknesses in our markets; and -- the expected benefits
from completed and proposed acquisitions may not be achieved or may
be delayed longer than expected due to business disruption, loss of
customers and employees, increased operating costs or inability to
achieve cost savings, and assumption of greater than expected
liabilities, among other reasons. Additional risk factors that may
cause outcomes that differ from our expectations or projections 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."
http://www.newscom.com/cgi-bin/prnh/20081024/PROASSURANCELOGO
DATASOURCE: ProAssurance CONTACT: Frank B. O'Neil, Sr. Vice
President, Corporate Communications & Investor Relations of
ProAssurance, +1-800-282-6242, or +1-205-877-4461, Web Site:
http://www.proassurance.com/
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