ProAssurance Corp 2024年度报告

Financial Highlights Dear Shareholders, In late February, we shared financial results for 2024 that clearly demonstrated theprogress ProAssurance has made over the past year to keep us on track toward our long-term financial and operational objectives in the face of continuing headwinds in the cyclicalmarkets we serve. Net income for the year was $52.7 million, or $1.03 per diluted share,and Non-GAAP operating income was $48.6 million, or $0.95 per diluted share, comparedwith losses in 2023. We are successfully executing on our strategic priorities and reachingkey performance milestones, while continuing to provide our insureds and distributionpartners the insurance protection and service excellence they know they should expect. In March, we announced that ProAssurance has agreed to be acquired by The DoctorsCompany, the nation’s largest physician-owned medical malpractice insurer, for $25 pershare in cash. The transaction delivers significant value to our shareholders and affirms theprogress we have made over the past several years. We believe it reflects recognition by afellow medical professional liability industry leader - with a history very similar to ours - ofthe long-term value that we are creating. Combined strengths of ProAssuranceand The Doctors Company will create apremier medical malpractice company Both ProAssurance and The Doctors Company were founded by physicians in responseto the medical liability crisis of the 1970s. Both companies have grown over the years bybringing together other physician-founded companies. This shared history has helped bothcompanies fulfill our shared mission to protect others and has given us similar operatingphilosophies and cultures. If consummated, the transaction will solidify the combined organization as the second-largest medical malpractice insurance company in the country and the largest physician-owned carrier. Our combined strengths will position us to be the preferred choice of ourdistribution partners and healthcare clients. Together, we will have the depth of products,defense expertise, risk management and service to compete even more effectively acrossthe country. This annual report accompanies the proxy statement for our annual stockholder meeting.At that meeting shareholders will elect three directors to the board, ratify the appointmentof our independent auditors, and offer an advisory vote on compensation for our namedexecutive officers. We will be scheduling a special meeting of ProAssurance stockholders to approve thetransaction with The Doctors Company. Additional information about that meeting will beavailable in a separate proxy statement that we intend to file with the SEC and distribute toshareholders in the coming weeks. In addition to shareholder approval, the transactionrequires regulatory approval, including approvals from insurance regulators in a number ofstates, and antitrust clearance. Subject to the receipt of those approvals and othercustomary closing conditions, the transaction is expected to close in the first half of 2026. Non-GAAP operating earnings improved sequentially each quarter in 2024 andour confidence continues to grow that actions we have taken over the pastseveral years have us on track to achieve our objectives In a sign that our multi-year effort to respond to rising medical professional liability severity isgenerating positive results, our Specialty P&C segment delivered a full-year combined ratio of104.5%, including net favorable prior accident year reserve development of 5.0 points. This segment,which is largely made up of our Medical Professional Liability line of business, represents more than75% of total earned premium. Continuing social inflation and eroding tort reform mean we are still facing a challengingenvironment, exacerbated by legal system abuse. We believe we have stayed ahead of many in thespace in achieving rate levels in medical professional liability that outpace the resulting severitytrends. We have achieved more than 20 points of improvement in the accident year loss and lossadjustment expense ratio since 2019, due to renewal premium increases as well as the impact of ourre-underwriting efforts and other strategic initiatives. Even with the progress of this past year, work remains. We continue to forgo renewal and newbusiness opportunities that we believe do not meet our expectation of rate adequacy in the currentloss environment. Renewal premium increases in 2024 were 10% for our standard medicalprofessional liability business and 13% for the specialty portion of our business. This brings renewalpremium increases since 2018 within this line of business to almost 70 percent cumulatively. Exclusive of rate changes, retention of our existing premiums was a solid 84%, including strongretention in the standard book. As expected, new business continues to be impacted by our focus onrate adequacy and was below the prior year’s level. Complementing our focus on pricing is our commitment