ProAssurance Corporation PRA reported a fourth-quarter 2024 adjusted operating income of 36 cents per share, which surpassed the Zacks Consensus Estimate of 15 cents. The bottom line rose significantly from a loss of five cents per share in the year-ago period.

See the Zacks Earnings Calendar to stay ahead of market-making news.

Operating revenues rose 0.9% year over year to $287.5 million. The top line beat the consensus mark by 5.7%.

The strong quarterly earnings benefited from improving profitability in the Segregated Portfolio Cell Reinsurance unit, rising investment income and a decline in expenses. Lower premiums in the Specialty P&C segment and the Segregated Portfolio Cell Reinsurance unit acted as a partial offset.

ProAssurance Corporation Price, Consensus and EPS Surprise

ProAssurance Corporation price-consensus-eps-surprise-chart | ProAssurance Corporation Quote

PRA’s Quarterly Operational Update

Gross premiums written of $207.7 million slipped 0.5% year over year. Net premiums earned declined 2.5% year over year to $241.1 million, due to ceased involvement in Syndicate 1729 and strategic actions like reducing exposure to underperforming areas. The reported figure outpaced the Zacks Consensus Estimate of $231.2 million and our estimate of $231.6 million.

Net investment income was $36.8 million, which rose 9.2% year over year, aided by higher book yields on PRA’s fixed maturity investments. The metric missed the consensus mark of $37.7 million and our estimate of $37.9 million.

Total expenses of $271.4 million decreased 5.5% year over year but came higher than our estimate of $267 million. The year-over-year decrease resulted from a decline in net losses and loss adjustment expenses. 

ProAssurance’s net income soared 153.6% year over year to $16.2 million. The combined ratio of 109.3% improved 270 basis points (bps) year over year.

ProAssurance’s Segmental Update

Specialty P&C Segment

Revenues from the segment declined 4.3% year over year to $186.8 million but came in higher than the Zacks Consensus Estimate of $184.1 million and our estimate of $180.9 million. Net premiums earned of $185.8 million declined 4% year over year due to PRA’s decision to discontinue participation in Syndicate 1729. The metric outpaced the consensus mark of $183.4 million and our estimate of $180 million.

Total expenses dipped 4.6% year over year to $193.7 million. The unit reported a loss of $6.9 million, which improved 11.3% year over year. The combined ratio of 100.9% improved 390 bps year over year.

Workers' Compensation Insurance Segment

The segment’s revenues of $43.3 million rose 12.2% year over year and came higher than Zacks Consensus Estimate of $40.3 million and our estimate of $39.3 million. Net premiums earned increased 12% year over year to $42.9 million, which beat the consensus mark of $39.9 million and our estimate of $38.7 million.

Total expenses declined 2.2% year over year to $50.5 million. The unit incurred a loss of $7.2 million, narrower than the prior-year quarter’s loss of $13 million. The combined ratio of 117.6% improved 1,720 bps year over year.

Segregated Portfolio Cell Reinsurance Segment

Gross premiums written amounted to $12.4 million, which declined 13.2% year over year and missed our estimate of $15.6 million. Net premiums earned declined 19.7% year over year to $12.4 million, which missed the Zacks Consensus Estimate of $12.9 million and our estimate of $13 million.

Underwriting, policy acquisition and operating expenses declined 24.1% year over year to $4 million. The unit reported a quarterly profit of $701 million, which surged 203.5% year over year due to increased loss activity in the prior-year quarter. The combined ratio improved 1,270 bps year over year to 80.5%.

Corporate Segment

The segment’s net investment income improved 8.6% year over year to $35.9 million but missed our estimate of $36.9 million. The metric gained on improved average book yields from PRA’s fixed maturity investments. 

Operating expenses increased 11% year over year to $10.2 million. The unit’s profit of $29.5 million improved 11.7% year over year. Interest expenses decreased 20% year over year to $5.3 million.

PRA’s Financial Position (as of Dec. 31, 2024)

ProAssurance exited the fourth quarter with cash and cash equivalents of $54.9 million, which dropped 16.7% from the 2023-end level. Total investments were $4.4 billion, which rose 0.4% from the figure at 2023-end. 

Total assets of $5.6 billion decreased 1% from the 2023-end level.

Debt-less unamortized debt issuance costs amounted to $424.9 million, which reflects a slight decrease from the figure as of Dec. 31, 2023.

Total shareholders’ equity of $1.2 billion rose 8.1% from the level at 2023-end.

Net cash used in operating activities amounted to $10.7 million in 2024 compared with $49.9 million in the prior year.

Book value per share was $23.49 as of Dec. 31, 2024, up 7.7% from the 2023-end level. Adjusted operating return on equity was 4.2%, which improved 500 bps year over year.

ProAssurance’s Share Repurchase Update

ProAssurance did not repurchase any common shares in 2024. A leftover capacity of $55.9 million remained in place to be utilized for common share repurchases or retirement of outstanding debt as of Dec. 31, 2024.

PRA’s Zacks Rank

ProAssurance currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

How Did Other Finance Stocks Perform?

Here are some other stocks in the broader Finance space that have already reported earnings for this quarter: Capital One COF, Golub Capital BDC, Inc. GBDC and Ares Capital Corporation ARCC.

Capital One’s fourth-quarter 2024 adjusted earnings of $3.09 per share surpassed the Zacks Consensus Estimate of $2.66 thanks to higher net interest income and non-interest income and a rise in loans and deposits. Also, provisions declined during the quarter. However, the positives were partially offset by increased expenses.

Golub Capital reported first-quarter fiscal 2025 adjusted earnings per share of 39 cents, which missed the Zacks Consensus Estimate by 9.3% and declined sequentially from 47 cents. Over the past four quarters, the company beat the consensus estimate for earnings just once. Total investment income of $220.7 million missed the consensus mark by 2.5%. The figure also fell sequentially from $224.4 million.

Ares Capital’s fourth-quarter 2024 core earnings of 55 cents per share missed the Zacks Consensus Estimate of 58 cents due to an increase in expenses. However, an improvement in the total investment income and the company’s robust portfolio activities supported the results to some extent.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Capital One Financial Corporation (COF) : Free Stock Analysis Report

Ares Capital Corporation (ARCC) : Free Stock Analysis Report

ProAssurance Corporation (PRA) : Free Stock Analysis Report

Golub Capital BDC, Inc. (GBDC) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research