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Section 1: 8-K (FORM 8-K)

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K 

CURRENT REPORT

 

 

Pursuant to Section 13 or 15(d) of the Securities

Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 12, 2017

 

Copy of ProAssurance Logo

 

ProAssurance Corporation

(Exact name of registrant as specified in its charter)

 

Delaware 001-16533 63-1261433
(State of Incorporation) (Commission File No.) (IRS Employer I.D. No.)

 

100 Brookwood Place, Birmingham, Alabama 35209
(Address of Principal Executive Office ) (Zip code)

 

Registrant’s telephone number, including area code: (205) 877-4400

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-(c) under the Exchange Act (17CFR 240.13e-(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

Item 7.01Regulation FD Disclosure

 

In this Current Report on Form 8K we are furnishing materials which will we will use during meetings and presentations starting October 12, 2017. These materials are presented in Exhibit 99.1.

 

Item 9.01Financial Statements and Exhibits

 

99.1Materials which will we will use during investor meetings and presentations starting October 12, 2017.

 

We are furnishing Exhibit 99.1 to this Current Report on Form 8-K in accordance with Item 7.01, Regulation FD Disclosure. These exhibits shall not be deemed to be “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: October 12, 2017

 

  PROASSURANCE CORPORATION  
     
 

By:

/s/ Frank B. O’Neil

 
  Frank B. O’Neil  
  Senior Vice President  

 

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

 

Exhibit 99.1

 

 

October, 2017 Investor Update

 
 

1 ProAssurance Investor Briefing, October 12 - 13, 2017 Forward Looking Statements Non - GAAP Measures This presentation contains Forward Looking Statements and other information designed to convey our projections and expectations regarding future results. There are a number of factors which could cause our actual results to vary materially from those projected in this presentation. The principal risk factors that may cause these differences 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.” Please review this presentation in conjunction with a thorough reading and understanding of these risk factors. This presentation contains Non - GAAP measures, and we may reference Non - GAAP measures in our remarks and discussions with investors. The primary Non - GAAP measure we reference is operating income, a non - GAAP financial measure that is widely used to evaluate performance within the insurance sector. In calculating operating income, we have excluded the after - tax effects of net realized investment gains or losses and guaranty fund assessments or recoupments that do not reflect normal operating results. We believe operating income presents a useful view of the performance of our insurance operations, but should be considered in conjunction with net income computed in accordance with GAAP. A reconciliation of these measures to GAAP measures is available in our regular reports on Forms 10 - Q and 10 - K and in our latest quarterly news release, all of which are available in the Investor Relations section of our website, Investor.ProAssurance.com. IMPORTANT SAFE HARBOR & NON - GAAP NOTICES

 
 

2 ProAssurance Investor Briefing, October 12 - 13, 2017 Key Topics for Investorrs Long Term Success Demonstrated track record of value creation for shareholders Consistent & disciplined focus on profitability Proven Strategy World class knowledge & expertise Superior brand identity and reputation in the market Broad range of coverages address every significant need in our target markets Forward Thinking Successfully adapting to serve evolving risks through new distribution partners Dedicated to creating future value

 
 

Corporate Financial Updates October 2017

 
 

4 ProAssurance Investor Briefing, October 12 - 13, 2017 Q2 2017 Recap: Looking Beyond the Noise PREMIUMS GREW 6% Overall Specialty P&C: +7.6% Workers’ Compensation +5.1% FAVORABLE DEVELOPMENT : $29 million Substantial PROFITABILITY Net Income: $19.5 Million or $0.36/share Operating Income : $21.4 Million or $ 0.40/share Combined Ratio: 96.2% qtr / 96.3% ytd EXCELLENT PREMIUM RETENTION NEW BUSINESS WAS STRONG Specialty P&C: $9.4 million Workers’ Compensation $9.5 million

 
 

5 ProAssurance Investor Briefing, October 12 - 13, 2017 Q2 2017 Recap: So What Was the Noise? Analysts’ ESTIMATES vs. REPORTED Wall Street Consensus: $0.54/share ProAssurance Reported: $0.40/share Accounting CHARGE $5.2 million pre - tax charge to true - up accounting for a reinsurance facility in Bermuda LAWSUIT Settlement Confidential amount Resulted in additional premium paid to reinsurers which hurt Specialty P&C results Other Normal Course of Business Items Level of Reserve Development — To Be Expected Required Adjustments to Investments — ”Mark - to - Market”

 
 

6 ProAssurance Investor Briefing, October 12 - 13, 2017 YTD 2017 Recap: Strong Fundamentals PREMIUM GROWTH 5.3% Overall Specialty P&C: +2.9% Workers’ Compensation +6.7% Lloyd’s Syndicate: +12.9% FAVORABLE DEVELOPMENT : $58 million Sustained PROFITABILITY Net Income: $61.0 Million or $1.14/share Operating Income : $54.8 Million or $1.02/share Combined Ratio: 96.3% EXCELLENT PREMIUM RETENTION Adding Well - Underwritten NEW BUSINESS Despite Challenging Market Conditions Specialty P&C: $19.6 million Workers’ Compensation $23.6 million

 
 

7 ProAssurance Investor Briefing, October 12 - 13, 2017 Key Updates : Return on Equity & Future Goals Revising ROE target to seven points above the ten - year Treasury rate (risk - free rate ) Prior long - term return target of 12% - 14% is unrealistic in the current interest rate environment Ten year treasury rate was 2.30% at 7/31/17 * , implying a revised ROE Target of approximately 9.3% Each line of business retains a pricing target of 13% ROE on allocated capital YTD 2017 Return on Equity: 6.7% *https ://www.treasury.gov/resource - center/data - chart - center/interest - rates/Pages/TextView.aspx?data=yield

 
 

8 ProAssurance Investor Briefing, October 12 - 13, 2017 Components of Return on Equity 11.5% 9.2% 2.4% 5.5% 1.1% 0.2% - 2.5% Pre-Tax Underwriting Profit $22 Pre-Tax Investment Result $50 Non-Operating Gains $10 Taxes $2 Interest, SPC Dividend, & Intangibles $(23) Q2 2017 YTD Return on Equity: 6.7% 3.4% 4.7% 0.3% - 0.7% - 1.4% Pre-Tax Underwriting Profit $34 Pre-Tax Investment Result $47 Non-Operating Gains (Losses) $3 Taxes ($7) Interest, SPC Dividend, & Intangibles ($15) Q2 2016 YTD Return on Equity: 6.3% Ten year Average ROE ( 2007 - 2016) Five Year Average ROE ( 2012 - 2016)

 
 

9 ProAssurance Investor Briefing, October 12 - 13, 2017 $76 $144 $149 $229 $99 $150 $162 $56 $175 $294 $311 $285 YTD 17 2016 2015 2014 Ordinary Extraordinary Subsidiary Dividends to Corporate Subsidiary Dividend History (in Millions) 2017 ORDINARY Dividend Capacity is $174 Million Ordinary dividends are permitted without regulatory approval Amounts and criteria vary by domiciliary state Extraordinary dividends require regulatory approval Subsidiary capital requirements play a major role Subsidiary dividends are our primary source of liquidity

 
 

10 ProAssurance Investor Briefing, October 12 - 13, 2017 Capital and Liquidity Decisions All decisions must recognize that we hold significant capital at the subsidiary level to maintain operating company ratings and satisfy regulatory requirements. Dividends from subsidiaries to the holding company are our primary source of liquidity and are paid as allowed given rating and regulatory constraints. Starting Point & Capital Required capital for operating subsidiaries Liquidity Accepted operating expenses Add & Capital Potential opportunities for organic growth and strategic M&A Liquidity Amounts needed for quarterly dividends and debt service Share repurchase at prices with a reasonable payback period Special dividend Decreasing tax efficiency Options for deploying remaining capital Recurring regular dividend

 
 

11 ProAssurance Investor Briefing, October 12 - 13, 2017 Key Updates: Capital Management Regular quarterly dividends of $0.31/per common share Special dividend of $4.69/per common share paid on January 9, 2017 Dividends declared through June 30, 2017 have returned $33 million of capital to shareholders Dividends declared in 2016 returned $315 million of capital to shareholders Underscores our commitment to effective capital management Preserves flexibility to pursue business opportunities and potential transactions that may emerge

 
 

12 ProAssurance Investor Briefing, October 12 - 13, 2017 Superb Track Record of Capital Management Current Management Team’s Tenure Began Q2 2007 At 10/10/17 | $ in 000’s Year Dividends Declared* Share Repurchase Strategic Acquisitions Total* Special Regular 2007 ࡳ ࡳ $54,201 ࡳ $54,201 2008 ࡳ ࡳ 87,561 ࡳ 87,561 2009 ࡳ ࡳ 52,045 $137,800 189,845 2010 ࡳ ࡳ 106,347 233,000 339,347 2011 ࡳ $15,269 21,013 ࡳ 36,282 2012 $154,055 38,411 ࡳ 24,000 216,466 2013 ࡳ 64,777 32,454 153,700 250,931 2014 150,685 69,779 222,360 205,244 648,068 2015 53,013 66,843 169,793 ࡳ 289,649 2016 249,188 65,841 2,106 ࡳ 317,135 YTD 17* ࡳ 49,714 ࡳ ࡳ 49,598 $ 606,941 $370,634 $747,880 $753,744 $ 2,479,199 $ 1,725,455 46% increase in Shareholders Equity To $1.8 billion from $1.3 billion $1.7 billion † returned to shareholders through share repurchase and dividends since 2007 Share repurchase balances share price vs. book value/share $110 million authorized for buybacks at 9/30/2017 Regular quarterly dividend is $0.31/share $754 million deployed in transformative strategic acquisitions † Capital Returned is all declared dividends + share buybacks * 2017 YTD Information is through September 30, 2017

 
 

13 ProAssurance Investor Briefing, October 12 - 13, 2017 Capital Growth: 2008‒Q2 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q2 2017 Beginning Equity* $ 1,255 $ 1,424 $ 1,705 $ 1,856 $ 2,164 $ 2,271 $ 2,394 $ 2,158 $ 1,958 $ 1,799 Cumulative - effect adjustment: ASU 2016 - 09 adoptio n - - - - - - - - - $ 149 Stock Issued $ 112,478 - - - - - - - - - Employee Stock Transactions $ 11,673 $ 7,205 $ 6,147 $ 6,167 $ 7,780 $ 9,261 $ 11,246 $ 8,221 $ 12,857 $ 2,647 Earnings $ 177,725 $ 222,026 $ 231,598 $ 287,096 $ 275,470 $ 297,523 $ 196,565 $ 116,197 $ 151,081 $ 60,973 Dividends ࡳ ࡳ ࡳ $ (15,269) $ (192,466) $ (64,777) $ (220,464) $ (119,866) $ (315,028) $ (33,040) Treasury Stock $ (87,561) $ (46,884) $ (106,347) $ (20,317) ࡳ $ (32,054) $ (222,360) $ (169,793) $ (2,106) ࡳ Unrealized G/L $ (45,800) $ 98,663 $ 19,870 $ 50,913 $ 15,343 $ (85,719) $ (1,457) $ (34,349) $ (6,456) $ 8,665 Total Equity* $ 1,424 $ 1,705 $ 1,856 $ 2,164 $ 2,271 $ 2,394 $ 2,158 $ 1,958 $ 1,799 $ 1,838 * Equity shown in millions; all other data shown in thousands

 
 

14 ProAssurance Investor Briefing, October 12 - 13, 2017 $407 million debt at 8/31/17 $250 million 10 - year notes due 11/15/2023 @ 5.30% Coupon $157 million drawn on revolver (Fully Collateralized) Strong Capital Position and Minimal Debt Ten - Year Premiums to Equity Ten - Year Debt to Capital 2% 3% 3% 2% 5% 9% 10% 15% 20% 18% $- $0.8 $1.6 $2.4 Q2 17 2016 2015 2014 2013 2012 2011 2010 2009 2008 $ in billions Debt Capital Debt to Capital 0.3 0.3 0.3 0.3 0.2 0.2 0.4 0.4 0.5 0.5 $- $0.8 $1.6 $2.4 Q2 17* 2016 2015 2014 2013 2012 2011 2010 2009 2008 $ in billions Premiums Equity Premiums to Surplus Moving closer to our minimum target of 0.75:1 Committed to enhancing shareholder value through effective capital management Retaining capital needed for an eventual market turn and M&A *Annualized

 
 

15 ProAssurance Investor Briefing, October 12 - 13, 2017 Capital Management Priorities Conceptual Model of Projected A. M. Best BCAR Scores if Increase Premium Reduce Surplus “A+” Rating Threshold The manner in which capital is used has an effect on financial ratings Excess Capital vs. Excess Capacity

 
 

16 ProAssurance Investor Briefing, October 12 - 13, 2017 Consistent Value Creation Reflects all stock splits and includes all dividends in the year declared. Source: SNL 52% 88% 160% 521% 229% 534% 862% 983% 959% 1484% 2012% 2987% 2861% 1991 1996 2001 2006 2011 2016 Scorecard at 9/30/17 Total Return CAGR Since Inception (Sep 1991) 2861% 14% Ten Year (9/30/07 – 9/30/17 ) 174% 11% Five Year (9/30/12 – 9/30/17 ) 68% 11% YTD 2017 - 1% Scorecard at 9/30/17 Price Change CAGR Since Inception (Sep 1991) 1990% 13% Ten Year (9/30/07 – 9/30/17 ) 94% 7% Five Year (9/30/12 – 9/30/17 ) 20% 4% YTD 2017 - 3% Stock Price Scorecard at 9/30/17* BV + Dividends CAGR Since Inception (Sep 1991) 2715% 14% $40.23 $43.56 $51.80 $1.84 $3.14 $4.91 $6.62 $8.01 $10.46 $16.81 $21.35 $30.17 $36.85 $39.13 $34.41 1991 1996 2001 2006 2011 2016 Book Value + Dividends Declared Total Return * Book Value Per Share at 6/30/17 + cumulative dividends declared as of 9/30/17 $2.69 $3.85 $4.77 $6.59 $15.74 $8.79 $16.08 $24.32 $27.46 $26.86 $39.91 $48.48 $57.05 $54.65 1991 1996 2001 2006 2011 2016

 
 

Consolidated Financial & Operational Highlights

 
 

18 ProAssurance Investor Briefing, October 12 - 13, 2017 Q2 2017 Income Statement Highlights Strong results from a focused strategy Three Months Ended Six Months Ended June 30 June 30 2017 2016 2017 2016 Gross Premiums Written $206.2 $195.0 $437.6 $415.5 Net Investment Result $25.2 $25.0 $50.2 $46.8 Total Revenues $205.6 $214.8 $428.6 $408.2 Net Losses and LAE $115.6 $106.9 $234.7 $217.9 Underwriting & Operating Expenses $57.9 $54.0 $115.0 $110.9 Net Income (Includes Realized Investment Gains & Losses) $19.5 $43.1 $61.0 $62.4 Operating Income $21.4 $36.0 $54.8 $61.0 Operating Income per Diluted Share $0.40 $0.67 $1.02 $1.14 In millions, except per share data

 
 

19 ProAssurance Investor Briefing, October 12 - 13, 2017 $1.26 $1.42 $1.70 $1.86 $2.16 $2.27 $2.39 $2.16 $1.96 $1.80 $1.84 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q2 2017 Balance Sheet Highlights Maintaining the financial strength required to keep our insurance promise while continuing to create value for our shareholders 2017 2016 2015 2014 2013 Shareholders’ Equity $1.8 $1.8 $2.0 $2.2 $2.4 Total Investments $ 3.7 $ 3.9 $3.7 $4.0 $3.9 Total Assets $4.9 $ 5.1 $4.9 $5.2 $5.2 Total Policy Liabilities $2.4 $2.4 $2.4 $2.4 $2.4 Book Value per Share $34.41 $33.78 $36.88 $38.17 $39.13 In billions, except Book Value per share From 2013 - 2016, Book Value per share was affected by our purchase of common stock at prices above Book Value per Share Shareholders’ Equity: 46% Increase (2007 - 2017) $1.7 bln Returned to Shareholders Through Dividends and Share Repurchase Over This Period

 
 

20 ProAssurance Investor Briefing, October 12 - 13, 2017 Q2 2017 $21.35 $26.30 $30.17 $35.42 $36.85 $39.13 $38.17 $36.88 $33.78 $34.41 $20.80 $23.13 $25.29 $29.80 $30.98 $34.67 $31.63 $30.72 $27.91 $28.45 $20.26 $24.04 $26.58 $31.93 $33.34 $35.64 $32.66 $31.17 $28.24 $28.94 12/31/08 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 Book Value per Share Tangible Book Value per Share excl. Unrealized Gains / Losses Tangible Book Value per Share 2016 Includes $4.69/share Special Dividend Book Value per Share History

 
 

21 ProAssurance Investor Briefing, October 12 - 13, 2017 Book Value per Share History Components 6/30/17 12/31/16 Change Total Book Value $34.41 $33.78 $(0.63) Less: Goodwill & Intangible Assets 5.47 5.54 ( 0.07) Tangible Book Value $28.94 $28.24 $(0.70) Less: Unrealized Gain / Loss 0.49 0.33 $(0.16) Tangible Book Value excl Unreal G/L $28.451 $27.91 $(0.54) Estimated Effect of Treasury Shares $(1.53) $(1.63) $(0.10) Outstanding Shares (000s) 53,413 53,251 162 Treasury Shares (000s) 9,409 9,409 —

 
 

22 ProAssurance Investor Briefing, October 12 - 13, 2017 Combined ratio average 2009 - 2016: 72.7% Operating ratio average 2009 - 2016: 50.2% Strong Operational Results / Consistent Profitability Combined Ratio and Operating Ratio History 69.1% 68.0% 52.5% 57.3% 70.6% 82.1% 90.5% 91.4% 96.3% 38.8% 39.8% 27.6% 32.6% 46.1% 64.2% 74.8% 77.8% 83.7% 2009 2010 2011 2012 2013 2014 2015 2016 Q2 2017 Combined Ratio Operating Ratio

 
 

23 ProAssurance Investor Briefing, October 12 - 13, 2017 $16 $20 $19 $25 $40 $48 $53 $48 $34 $29 $29 $20 $31 $37 $38 $50 $60 $39 $42 $35 $37 $29 $25 $30 $43 $33 $52 $50 $49 $43 $36 $29 $44 $104 $108 $138 $184 $114 $82 $49 $56 $49 $11 $17 $23 $36 $105 $185 $207 $234 $326 $272 $223 $182 $161 $144 $58 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q4 Q3 Q2 Q1 Recognizing loss trends as they appear No change in reserving philosophy or process Disciplined Approach to Reserves $ in millions 15 - Year Reserve Development History by Quarter by Year HCPL Predominating 2003 — 2017

 
 

24 ProAssurance Investor Briefing, October 12 - 13, 2017 Reinsurance Programs Professional Liability Medical Technology & Life Sciences Workers' Compensation Retention Reinsured Coverage Offered up to $25 million -------- 5% to 12.5% retained based on layer Coverage Offered up to $9 million -------- 10% Retention s Coverage up to $ 119.5 million per loss event -------- 0% Retention 100% Retained up to $1 million 100% Retained up to $1 million 100% Retained up to $500,000

 
 

Segment Financial Highlights Specialty P & C

 
 

26 ProAssurance Investor Briefing, October 12 - 13, 2017 Q2 2017 Specialty P&C Financial Highlights Three Months Ended Six Months Ended June 30 June 30 2017 2016 2017 2016 Gross Premiums Written $124.9 $116.1 $261.7 $254.4 Net Premiums Earned $109.0 $108.1 $222.1 $218.9 Total Revenues $110.5 $109.9 $224.7 $221.9 Net Losses & Loss Adjustment Expenses $71.3 $62.3 $146.3 $133.5 Underwriting & Operating Expenses $26.2 $25.9 $52.2 $51.0 Operating Result $7.8 $21.7 $21.1 $37.5 Current Accident Year Net Loss Ratio 89.7% 88.1% 89.2% 88.5% Effect of Prior Accident Year Reserve Development (24.3%) (30.5%) (23.3%) (27.5%) Net Loss Ratio 65.4% 57.6% 65.9% 61.0% Underwriting Expense Ratio 24.1% 24.0% 23.5% 23.3% Combined Ratio 89.5% 81.6% 89.4% 84.3% In millions, except ratios

 
 

27 ProAssurance Investor Briefing, October 12 - 13, 2017 Total Gross Written Premiums were $124.9 mil — increase of 7.6% Q - o - Q Physician increase is due to normal cycle of 24 - month policy renewals. Retention: 90% Physician new business: $4.5 mil Facilities decrease is due to renewal timing. Retention: 90 %. Facilities new business: $2.1 mil Lawyers’ professional liability is essentially flat. Retention: 84 %. LPL new business of approximately $900,000 Medical technology nominally up due to new business of $1.4 mil offsetting retention of 89% Q2 2017 Specialty P&C Gross Written Premium Two - year policies adversely affect premiums in odd years due to renewal patterns $75.3 $74.3 $9.6 $4.5 $84.9 $78.8 Q2 2017 Q2 2016 Physician 12-mo Physician 24-mo $13.4 $6.8 $6.5 $3.5 $9.8 $11.1 $7.1 $6.5 $3.3 $9.3 Healthcare facilities Other healthcare providers Legal professionals Tail & other professional liability Medical Technology Q2 2017 Q2 2016 $ in millions

 
 

28 ProAssurance Investor Briefing, October 12 - 13, 2017 Total Gross Written Premiums were $261.7 mil — increase of 2.9% Y - o - Y Physician increase is due to normal cycle of 24 - month policy renewals. Retention: 90%. Physician new business: $10.9 mil Facilities decrease is due to renewal timing. Retention: 90 %. Facilities new business: $3.1 mil Lawyers’ professional liability is flat. Retention: 84 %. LPL new business of $1.8 mil Medical technology nominally up due to new business of $2.7 mil offsetting retention of 85% Q2 2017 YTD Specialty P&C Gross Written Premium Two - year policies adversely affect premiums in odd years due to renewal patterns $165.0 $162.9 $15.5 $13.1 $180.5 $176.0 Q2 2017 Q2 2016 Physician 12-mo Physician 24-mo $25.6 $15.6 $14.4 $8.3 $17.3 $23.8 $15.3 $14.4 $8.2 $16.7 Healthcare facilities Other healthcare providers Legal professionals Tail & other, professional liability Medical Technology Q2 2017 YTD Q2 2016 YTD $ in millions

 
 

29 ProAssurance Investor Briefing, October 12 - 13, 2017 Retention remains strong Continued underwriting vigilance is being used today to ensure future success Market share is important, but NOT as important as profitability Strong Retention Despite Competition Year - over - Year Premium Retention – Physicians Trailing Four Quarters’ Premium Retention – Physicians 87% 90% 90% 89% 90% 89% 89% 89% 88% 90% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q2 17 89% 87% 90% 90% Q3 16 Q4 16 Q1 17 Q2 17

 
 

30 ProAssurance Investor Briefing, October 12 - 13, 2017 No Overall Change in HCPL Loss Trends PICA excluded to facilitate accurate comparisons over time Current accident year loss ratio adjustments have been minor — in either direction Minimal changes on renewed business MD/DO Charged Rate History 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q2 2017 Annual 23% 28% 28% 19% 11% 3% -2% -6% -4% -2% -2% 0% -1% 0% 0% 0% 1% Cumulative 23% 57% 101% 139% 165% 173% 168% 152% 142% 137% 132% 132% 130% 131% 131% 131% 132% -10% 30% 70% 110% 150%

 
 

31 ProAssurance Investor Briefing, October 12 - 13, 2017 Annual Premium for a $1M / $3M Policy Filed or Approved at 1/01/17 Key State Rate Comparison Birmingham Indianapolis Denver Louisville Dallas St Louis Cleveland New York, NY Washington Miami Detroit Chicago Family Practice (No Surgery) $7,484 $8,461 $11,100 $12,066 $13,595 $17,960 $22,455 $23,216 $24,010 $24,480 $28,263 $40,865 Anesthesiology 17,422 13,076 14,948 21,042 15,226 20,087 32,668 $31,703 30,402 30,422 28,263 50,621 Plastic Surgery 26,774 30,216 29,057 40,118 27,556 51,996 63,309 $68,481 83,672 54,189 83,268 118,909 General Surgery 30,515 34,769 36,752 45,728 39,952 60,505 73,523 $85,456 73,018 83,898 108,020 118,909 Orthopedic Surgery w/Spine 37,997 39,899 41,883 45,728 49,477 64,759 83,736 $91,114 99,652 83,898 97,019 157,930 Obstetrics 41,737 48,898 49,578 68,170 42,092 86,032 104,163 $113,747 147,595 119,549 108,020 177,441 $0 $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 $175,000

 
 

32 ProAssurance Investor Briefing, October 12 - 13, 2017 Strong defense still matters to individual physicians, even if they are in a hospital - owned practice or in a large group — it’s their reputation on the line We leverage our financial strength to give our insureds the opportunity for an uncompromising defense of each claim Differentiates our product Provides long - term financial and marketing advantages Retains business and deters future lawsuits Claims outcomes are now public in more than half of the states and will be increasingly important as consumers go online to do research to control more of their medical spending Thorough Claims Defense Remains Important Industry: 73% No Paid Losses ProAssurance: 76% No Paid Losses Source: ProAssurance, as reported to PIAA Source: PIAA 2015 Claim Trend Analysis, ProAssurance Excluded Ten Year Average 2006 - 2015 Dropped or Dismissed 64% Defense Verdict 12% Plaintiff Verdict 4% Settled/ADR/ Other 19% Dropped or Dismissed 66% Settled/ADR / Other 26% Plaintiff Verdict 1% Defense Verdict 7%

 
 

33 ProAssurance Investor Briefing, October 12 - 13, 2017 Comprehensive, reliable data provided by the Ohio Department of Insurance Broad range of competitors and business approaches The Ohio Example: 2005 – 2014 Data www.insurance.ohio.gov/Legal/Reports/Documents/Ohio2013MedicalProfessionalLiabilityClosedClaimReport.pdf More Claims Defended in Court More Claims Closed With No Indemnity EXTRAORDINARY OUTCOMES: 2.2x Lower Average Indemnity Payment per Closed Claim 92% 75% 8% 25% ProAssurance All Others With Indemnity NO Indemnity 87% 96% 13% 4% ProAssurance All Others Closed With Trial Closed by Settlement, ADR or Without Trial $32,389 $71,806 ProAssurance All Others

 
 

34 ProAssurance Investor Briefing, October 12 - 13, 2017 Source: 2012 - 2016, Statutory Basis, A.M. Best Aggregates & Averages The Bottom Line Benefits of Strong Defense Our ability and willingness to defend claims allows us to achieve better results ProAssurance Stand Alone Five - Year Average Loss Ratio ( 2012 - 2016 / Calendar Year) ProAssurance vs. Industry Five - Year Average Loss Ratio ( 2012 - 2016) subject to rounding 14.0% 10.7% 21.9% 21.6% 24.0% 17.1% 28.0% 27.3% 35.0% 36.3% 31.1% 38.7% 49.2% 56.6% 60.3% 2012 2013 2014 2015 2016 18.4% 42.9% 28.7% 27.4% 47.2% 70.2% PRA Industry On average, 23 points better than the industry TOTAL LOSS RATIO Incurred Loss Adjustment Expenses as a Percentage of Premium Incurred Losses as a Percentage of Premium

 
 

35 ProAssurance Investor Briefing, October 12 - 13, 2017 Source: A.M. Best Aggregates and Averages for Each Line of Business ( 1991 - 2016) ProAssurance Outperforms in Insurance Average Combined Ratio 103.8% 100.6% 99.1% 106.7% 90.7% 98.8% 87.2% 67.0% 69.9% 88.3% 70.5% 74.4% 1991-2016 10-Year 2007-2016 5-Year 2012-2016 Overall P&C MPL PRA - MPL Only PRA - All Lines

 
 

36 ProAssurance Investor Briefing, October 12 - 13, 2017 Source: 1991 - 2016 A.M. Best Aggregates and Averages, Medical Malpractice Lines of Business. Policyholder Dividends Included. ProAssurance Outperforms in HCPL ProAssurance consistently outperforms in a volatile line of business Calendar Year Combined Ratio 1991 - 2016 '91 - '16 Avg 10 Yr Avg 2007 - 2016 5 Yr Avg 2012 - 2016 40% 60% 80% 100% 120% 140% 160% 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 ProAssurance HCPL HCPL P&C 87.2% 106.7% PRA HCPL 69.9% 98.8% PRA HCPL 67.0% 90.7% PRA HCPL

 
 

Segment Strategic Review Specialty P & C

 
 

38 ProAssurance Investor Briefing, October 12 - 13, 2017 The question is cost vs. care — we can deliver more care than we can afford Restructuring is producing profound changes in healthcare The U.S. spends a greater proportion of GDP on healthcare and the percentage is increasing Strategy Update: Healthcare Costs are the Real Issue Healthcare Spending as a Percentage of GDP ( 1995 - 2014) 6% 8% 10% 12% 14% 16% 18% 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 United States France Germany Canada Japan EU Global Australia UK Healthcare Cost control remains the real driver of change in the delivery of care Care being pushed down to lower cost providers Current spending levels are unsustainable The Affordable Care Act is a sideshow that does not address rising costs No perfect model for healthcare delivery has emerged http://data.worldbank.org/indicator/SH.XPD.TOTL.ZS

 
 

39 ProAssurance Investor Briefing, October 12 - 13, 2017 The Future of Healthcare Costs Adapted from HBR: The Strategy that Will Fix Healthcare Greater reliance on a value - based payment system Providers shouldering more of the risk of costs • Drives the need for efficiency in order to optimize limited resources Changing models of reimbursement Greater reliance on technology Increasing focus on efficiency to maximize care - per - spend OVERARCHING TRENDS Larger groups/systems will have more leverage with payers Financial pressures are eliminating small groups and solo practitioners Patients will be forced to make choices as they shoulder more costs Payment for Volume (Fee - for - Service) Payment for Value & Outcome (Value - Based Care) Provider Centric Patient Centric Physician/Specialty - Driven Coordination of Care

 
 

40 ProAssurance Investor Briefing, October 12 - 13, 2017 The fork in the road for traditional HCPL companies Their core markets are disappearing and they do not have the financial size and capability to insure large, more complex risks Strategy Update: Traditional Practices are Fading Source: 2016 Physicians Foundation Survey of America’s Physicians, and prior editions The HCPL Industry Traditional practices are fading Excess capital is being used to try to maintain market share at the expense of a sustainable future Capital & geographic constraints challenge many small insurers Few companies are able to respond to new coverage demands from emerging delivery models 62% 49% 35% 33% 35% 44% 53% 58% 2008 2012 2014 2016 Small Group & Solo Practices Employed Physicians

 
 

41 ProAssurance Investor Briefing, October 12 - 13, 2017 The HCPL Industry Traditional practices are fading Excess capital is being used to try to maintain market share at the expense of a sustainable future Capital & geographic constraints challenge many small insurers Few companies are able to respond to new coverage demands from emerging delivery models Strategy Update: ProAssurance Can Meet the Challenges Healthcare Cost control remains the real driver of change in the delivery of care Care being pushed down to lower cost providers Current spending levels are unsustainable The Affordable Care Act is a sideshow that does not address rising costs No perfect model for healthcare delivery has emerged ProAssurance Maintaining discipline & profitability Expanding product lines through strategic M&A and internal innovation Covering the full spectrum of healthcare Addressing all avenues of distribution Created a sustainable competitive advantage Managing capital effectively The Fork in the Road For traditional HCPL companies, there can be no status quo given the inevitable evolution of their customer base

 
 

42 ProAssurance Investor Briefing, October 12 - 13, 2017 Emerging Issues in Healthcare Consolidation of providers into larger groups or within facilities/systems Evolution of new delivery systems to address cost pressures Multi - state expansion to achieve scale Challenges for HCPL Insurers Broker - driven purchasing requires new approaches to the market Larger balance sheets required to respond to greater financial risk Multi - state risks require broad scope Evolving risk profiles require flexible coverage options and alternative markets presence ProAssurance Responds with Strategies & Solutions Broker outreach and National Healthcare Team are driving higher submissions. Chosen by a large multi - state risk — single largest premium in PRA history (Q2 2016) 50 - state capability in place since 2007 Partnerships such as Certitude with Ascension Health ($131 million in DPW since inception) Alternative market expertise through Inova® captives, E&S capabilities and a dedicated risk retention group Sophisticated Work Comp solution creates a solid competitive advantage ProAssurance is Positioned to Succeed in HCPL

 
 

43 ProAssurance Investor Briefing, October 12 - 13, 2017 Berkshire Hathaway Specialty MPL Carriers Only $865 Doctor’s Company $673 ProAssurance Size, Scope & Experience $453 MLMIC NY Only $392 Coverys $390 NORCAL $330 MCIC $288 PRI NY Only Negative Surplus $288 MAG Mutual $288 Hospitals Insurance $189 ISMIE $175 MMIC $155 MM - NC $149 Controlled Risk $145 SVMIC $130 MM - MD $123 MICA $110 Allied World $95 OMSNIC Dental & Related $93 COPIC $81 -$0.5 $0.0 $0.5 $1.0 $1.5 $2.0 0 10 20 30 40 50 Surplus billions Bubble Size = 2016 Direct Premiums Written in millions Active States ProAssurance has the right combination of geographic scope, broad experience, and financial strength for success in the new world of healthcare liability ProAssurance is Positioned to Succeed in HCPL Size & Scope of Top HCPL Writers SNL 2016 Statutory Data, >50% HCPL, Direct Written Premiums >$80 million

 
 

44 ProAssurance Investor Briefing, October 12 - 13, 2017 ProAssurance is Positioned to Succeed in HCPL Our long - term focus on financial strength is central to our overall strategy and success We have proven our ability to thrive across insurance cycles We have an unmatched combination of financial strength and deep experience ProAssurance has always evolved ahead of the curve We have built the platform that allows us to serve the broad spectrum of healthcare Prudently leveraging our success and experience with the addition of specialized expertise Broad capabilities to meet evolving demands Eastern, Medmarc, PICA & Mid - Continent Traditional HCPL companies deepen our capabilities

 
 

45 ProAssurance Investor Briefing, October 12 - 13, 2017 More than 30 year of experience insuring hospitals and other healthcare facilities Experience ranges from community - based hospitals to major medical centers Enhanced coverages (ProControl) and existing programs respond to today’s emerging trends Broad Experience Across the Healthcare Market Other Healthcare Facilities: 349 Hospitals: 13 3 1 2 1 2 6 2 19 2 9 11 39 1 3 1 1 DE: 1 MD: 1 1 1 16 3 3 1 1 3 2 19 2 35 3 6 1 35 DE: 7 DC: 1 MD: 2 NJ: 1 28 11 8 7 3 1 47 7 4 8 11 1 1 5 1 24 47 7 3 3 5 1 1 1 1 1

 
 

46 ProAssurance Investor Briefing, October 12 - 13, 2017 The Certitude tm program in partnership with Ascension Health Shared risk through quota share participation by Ascension’s captive on first $1M ~ 2,500 insured physicians ~$ 18.2 million inforce Certitude direct premium YTD Active in AL, CT, D.C., FL, IL, IN, KS, MD, MI, NY, OK, SC, TN, TX, WI $35.4 million total direct premium from Ascension - related risks in 2016 CAPAssurance Partnered with California - based CAP - MPT Risk sharing by CAP through variable quota share participation on first $1M ~$8.0M of inforce premium, including three hospitals and various facilities Strategy Update: Successes in the Evolving Market *http://ascension.org/our - work/ascension - health/sites - of - care States with Active Certitude Programs Non - Certitude States where Ascension Health Ministries are based* States with Active CAPAssurance Policies

 
 

47 ProAssurance Investor Briefing, October 12 - 13, 2017 Addressing a Wide Spectrum of Risk Appetites Traditional Policies Primarily agent - sold or direct Remains the majority of our business Proven performance supports discipline pricing Transitional Risk sharing/high deductible programs control cost and build “sticky” business Risk purchasing groups target specific specialties or program business Joint physician/hospital policies (ProControl®) address unique risk tolerance and claims expectations of each class of insured Alternative Risk Captive insurance programs allow large, sophisticated healthcare and workers’ compensation customers to control their own insurance programs Two joint healthcare professional and workers’ compensation programs are already in place Eastern Re brings proven experience and expertise in establishing and operating captives through segregated cells Coordinated sales & marketing efforts target insureds in these classes for additional products and services

 
 

48 ProAssurance Investor Briefing, October 12 - 13, 2017 Emerging Strategic Opportunities ProAssurance Risk Solutions sm Proven expertise to address complex risk financing challenges in both healthcare and workers’ compensation Run - off liabilities in M&A transactions Assumption of existing reserve liabilities for large organizations seeking to repurpose capital resources Specialized self - insurance plans Offers financial flexibility through more efficient securitization/collateralization of self - funded risks ProAssurance Complex Medicine Program for larger entities with self - insured retentions allows us to participate in markets we have not previously addressed Proprietary analytics provides advanced underwriting & pricing capabilities in conjunction with Pro - Praxis, an underwriting agency capitalized by Cooper Gay

 
 

49 ProAssurance Investor Briefing, October 12 - 13, 2017 Leveraging Existing Expertise in New Ways Syndicate 1729 at Lloyds Our 58% participation provides potential access to international medical professional liability opportunities Increases flexibility for ProAssurance when working with complex risks Primary and excess business can be written We expect to leverage Medmarc’s expertise in the future to underwrite international medical technology and life sciences risks Medmarc Larger healthcare organizations present greater opportunities to insure activities focused on device and drug development Provides ProAssurance and our distribution partners with additional capabilities at the complex end of the healthcare delivery continuum Increasing globalization of testing and development efforts are a natural fit with Lloyd’s Syndicate 1729 ProAssurance Mid - Continent Underwriters Focuses on ancillary healthcare market which is exploding as care is being pushed down to lower cost providers

 
 

Segment Financial Highlights & Strategic Review Workers’ Compensation

 
 

51 ProAssurance Investor Briefing, October 12 - 13, 2017 Workers’ Compensation Expansion Eastern Alliance Insurance Group has acquired the renewal rights to the workers’ compensation book of Great Falls Insurance Company Great Falls is headquartered in Auburn, Maine Transaction will add Maine and New Hampshire to Eastern’s footprint Sets the stage for expansion into other New England states $13.3 million of direct written premium in 2016 No assurance that Eastern can renew 100% of expiring Eastern also acquired all of Great Falls’ agency contracts Many long - term relationships Management and employees are now part of Eastern forming the New England regional office Fifth operating region within Eastern Great Falls’ president is leading this new region Strong operational and cultural fit with Eastern Southeast Region • Charlotte, NC • Richmond, VA Gulf South Region • Madison, MS • Nashville, TN • Austin, TX New England Region • Auburn, ME Mid - Atlantic Region • Lancaster, PA • Wexford, PA Eastern Re (Cayman) Midwest Region • Indianapolis, IN • Grandville, MI

 
 

52 ProAssurance Investor Briefing, October 12 - 13, 2017 Eastern Specialty Risk: Higher Risk But NOT High Risk Focusing on the next level of risk: higher hazard but not typical “high hazard” Some classes previous written by Eastern in High Modification programs $2.3 million in direct premiums through June 30, 2017 • Loss trends are favorable Loss are expected to be less frequent, but more severe Loss profile means higher premiums and greater margins Eastern will apply its innovative claims and risk management strategies to shorten the tail, reduce the incidence and severity of claims and enhance workplace safety Broad acceptance from existing agents that have deep relationships with Eastern Many have one or two accounts with competitors and look to move those to Eastern with this option Full support of reinsurance partners Retentions remain the same as in existing business Deepens the reinsurance relationship by providing additional rate for new exposures

 
 

53 ProAssurance Investor Briefing, October 12 - 13, 2017 Q2 2017 Workers’ Compensation Financial Highlights Three Months Ended Six Months Ended June 30 June 30 2017 2016 2017 2016 Gross Premiums Written $59.3 $56.5 $143.6 $134.5 Net Premiums Earned $56.9 $55.1 $112.1 $109.5 Total Revenues $57.1 $55.2 $112.5 $110.1 Net Losses & Loss Adjustment Expenses $33.5 $34.7 $68.1 $69.7 Underwriting & Operating Expenses $17.1 $16.3 $33.8 $34.2 Operating Result $3.8 $3.0 $6.7 $4.2 Current Accident Year Net Loss Ratio 64.1% 64.8% 65.5% 65.6% Effect of Prior Accident Year Reserve Development (5.2%) (1.9%) (4.7%) (1.9%) Net Loss Ratio 58.9% 62.9% 60.8% 63.7% Underwriting Expense Ratio 30.1% 29.6% 30.1% 31.2% Combined Ratio 89.0% 92.5% 90.9% 94.9% In millions, except ratios

 
 

54 ProAssurance Investor Briefing, October 12 - 13, 2017 79.1% 65.6% 80.2% 87.7% 96.0% 89.7% 91.8% 93.0% 96.0% 95.9% 95.5% 90.9% 92.7% 94.3% 93.7% 90.3% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 17 GAAP GAAP (excluding fair value adjustments, intangible asset amortization, transaction-related and other one-time charges) Consistent Profitability in Workers' Comp Historical Combined Ratio Average 88.5% 2006 - Q2 2017

 
 

55 ProAssurance Investor Briefing, October 12 - 13, 2017 Source: 1996 - 2016 A.M. Best Aggregates and Averages, Workers’ Compensation. Policyholder Dividends Included. Eastern Outperforms in Workers’ Compensation Eastern consistently outperforms in a volatile line of business Calendar Year Combined Ratio 1996 - 2016 '96 - '16 Avg 10 Yr Avg 2007 - 2016 5 Yr Avg 2012 - 2016 40% 60% 80% 100% 120% 140% 160% 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Eastern Industry P&C 90.1% 103.8% Eastern WC 92.5% 99.1% Eastern WC 88.1% 100.6% Eastern WC

 
 

56 ProAssurance Investor Briefing, October 12 - 13, 2017 Strategy Update: How Eastern Differentiates Understands market dynamics and regulatory concerns Use of local knowledge that has always differentiated ProAssurance Disciplined individual account underwriting with focus on rate adequacy in rural territories Dedicated to effective claims management and returning injured workers to wellness

 
 

57 ProAssurance Investor Briefing, October 12 - 13, 2017 Eastern Alliance Insurance Group Best - in - Class Claims, Risk Management and Underwriting Business Model Broad Product Spectrum 41 State Licenses – Core Operations in 16 States Select Agency Partnerships 231 Contracts / 669 Locations Workers’ Compensation Business Profile & Overview YTD, June 30, 2017 Southeast Region • Charlotte, NC • Richmond, VA Gulf South Region • Madison, MS • Nashville, TN • Austin, TX Midwest Region • Indianapolis, IN • Grandville, MI Mid - Atlantic Region • Lancaster, PA • Wexford, PA Offices Licensed and actively seeking business Licensed, accepting ancillary “border” business Eastern Re (Cayman) PA 52% IN 9% NC 6% NJ 5% SC 4% DE 4% VA 3% MS 3% GA 3% TN 3% MI 2% OTH 6% Premium Distribution New England Region • Auburn, ME

 
 

58 ProAssurance Investor Briefing, October 12 - 13, 2017 Guaranteed Cost Policies Loss - Sensitive Dividend Plans Deductible Plans Retrospective Rating Plans Alternative Market Programs ParallelPay – “Pay as you Go” TPA Services Claims Administration and Risk Management Broad Workers’ Compensation Product Spectrum $144 Mln YTD Gross Written Premium at 6/30/2017 Guaranteed Cost 51% INOVA (Alternative Markets) 32% Policyholder Dividend 9% Deductible Plans 4% Retrospective Rating 2% Assumed 3% Active Policies at 6/30/17 Traditional WC Programs 7,532 Alternative Markets 2,819 10,351

 
 

59 ProAssurance Investor Briefing, October 12 - 13, 2017 Wide diversification by class code and market segment Over 600 class codes actively written Approximately 7,000 active policies in Traditional Programs Approximately 2,800 active policies in Alternative Market Programs Diversified Book of Business Top 10 Classes of Business by Payroll Exposure as of June 30, 2017 Physicians & Dentists 11% Hospitals 6% Skilled Nursing Homes 2% Clerical / Office 15% Colleges / Schools 10% Auto Dealers 5% Outside Sales 4% Restaurants 3% Fast Food 2% Banks 2% Traditional Business Skilled Nursing Homes 6% Physicians & Dentists 5% Home Healthcare 3% Social Rehab Facility 2% Retirement Community 3% Clerical / Office 16% Colleges / Schools 7% Outside Sales 6% Auto Dealers 5% Restaurants 2% Alternative Markets Business Healthcare Related Non - Healthcare

 
 

60 ProAssurance Investor Briefing, October 12 - 13, 2017 Healthcare as a Percentage of Overall Workers’ Compensation Writings Significant Healthcare Profile Non - Healthcare 79% Healthcare 21% $16.7 $16.9 $14.2 $11.2 2017 2016 Inova Traditional Healthcare premiums up 9.9% over YTD 2016 YTD 6/30/17 The Primary Growth in Healthcare is in Alternative Markets YTD 6/30 Each Year / $ in millions

 
 

61 ProAssurance Investor Briefing, October 12 - 13, 2017 No claims open from 2002 and earlier 31 net claims open 2011 and prior Recognized as a short - tail writer of workers’ compensation Workers’ Comp Claim Closing Pattern: Traditional 6/30/2017 364 536 590 570 687 590 717 778 890 954 1,076 1,185 1,247 1,287 1,215 1,082 766 0 0 0 3 0 2 2 1 3 6 3 11 17 35 63 132 339 0 150 300 450 600 750 900 1,050 1,200 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Accident Years Closed Claims Open Claims

 
 

62 ProAssurance Investor Briefing, October 12 - 13, 2017 Strategy Update: Alternative Market Overview Inova® is our alternative insurance brand Alternative insurance s tructure u tilizes a segregated p ortfolio c ompany (Eastern Re) with segregated p ortfolio c ells housing captives Alternative market solutions are in high demand Fast growing sector of the Property and Casualty marketplace Inova is a high ROE product with significant retention Fee - based revenue diversifies earnings that are largely based on underwriting Jointly - owned SPC’s Capital efficient Unique product offering for healthcare organizations differentiates Eastern & ProAssurance MPL / WC lines in a single SPC Leverage “mono - line” expertise for both With the uncertainty created by healthcare reform, it is more important than ever for healthcare organizations to manage “controllable” expenses Enhances agency partnerships Risk sharing (joint ownership) educates agents on principles of underwriting, risk management and claims administration Certain programs assist in Eastern’s geographic expansion / diversification efforts

 
 

63 ProAssurance Investor Briefing, October 12 - 13, 2017 Strategy Update: How Eastern RE Differentiates Captive insurance solutions provided through Eastern Re Value - added risk management services cements brand loyalty Strategic partnerships with select independent agencies that share philosophies on controlling workers’ compensation costs Segregated cell company based in Cayman Successfully driving new business opportunities for healthcare professional liability business

 
 

64 ProAssurance Investor Briefing, October 12 - 13, 2017 How Inova ® Benefits Insureds “A” Rated Paper – WC / “A+” Rated Paper – MPL / GL Stable Off - Shore Facility Eastern Re Ltd, S.P.C. established in 1987 Cayman Islands Monetary Authority regulation Segregated portfolio cells statutorily protected from each other Multi - State Coverage “Fully - Bundled” Approach No need for separate service agreements or providers Access to ProAssurance / Eastern Reinsurance Markets Reinsurance Program Protection “Turn - key” Operation Provides simple and easy transition from start to finish Minimal start - up capitalization Flexible ownership Monthly and Annual Reporting Package Detailed monthly reporting package Quarterly actuarial reviews and financials Potential Shareholder Dividends Dedicated Service Team Account management, underwriting, claims, risk management, marketing, accounting, premium audit Annual Off - Shore Meeting with Senior Management Team

 
 

65 ProAssurance Investor Briefing, October 12 - 13, 2017 No claims open from 2006 and earlier Nine open claims from 2013 and prior Recognized as a short - tail writer of workers’ compensation Workers’ Comp Claim Closing Pattern: Alternative 6/30/2017 66 103 175 267 407 422 310 325 336 385 404 503 500 569 617 604 480 0 0 0 0 0 0 0 1 0 0 2 1 1 4 17 69 208 0 100 200 300 400 500 600 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Accident Years Closed Claims Open Claims

 
 

66 ProAssurance Investor Briefing, October 12 - 13, 2017 Inova: Direct Written Premium Trends DPW in 000’s 18 year track record of growth and profitability 2016 DWP = $75.9 million Year - over - year growth of 7.4% $847 $2,451 $5,082 $12,159 $17,257 $25,786 $28,512 $27,032 $26,912 $29,113 $28,790 $31,139 $38,157 $42,733 $51,125 $59,350 $70,631 $75,915 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

 
 

67 ProAssurance Investor Briefing, October 12 - 13, 2017 PROASSURANCE EASTERN Re Ltd., S.P.C. Cayman Domicile Founded in 1987 Segregated Portfolio Cell (SPC) Segregated Portfolio Cell (SPC) Segregated Portfolio Cell (SPC) Individual Segregated Portfolio Cell Loss Fund * Commission Front (Underwriting) Claims Administration Risk Management Cell Rental Reinsurance Tax/Excise Claims Payments Potential Shareholder Dividend Expenses * Loss Fund managed off shore through Deutsche Bank with individual investment portfolio. EASTERN ALLIANCE INSURANCE GROUP Inova® Program Structure

 
 

Segment Financial Highlights & Strategic Review Lloyd’s

 
 

69 ProAssurance Investor Briefing, October 12 - 13, 2017 Q2 2017 Lloyd’s Segment Financial Highlights Three Months Ended Six Months Ended June 30 June 30 2017 2016 2017 2016 Gross Premiums Written $23.3 $25.0 $36.0 $31.9 Net Premiums Earned $14.5 $13.5 $29.1 $26.0 Total Revenues $14.8 $14.1 $30.2 $27.1 Net Losses & Loss Adjustment Expenses $10.8 $8.5 $20.3 $14.7 Underwriting & Operating Expenses $6.9 $5.2 $ 13.1 $10.4 Operating Result $(2.3) $(0.5) $(2.6) $1.1 Current Accident Year Net Loss Ratio 71.4% 83.5% 72.1% 68.9% Effect of Prior Accident Year Reserve Development 2.9% (20.6%) (2.3%) (12.3%) Net Loss Ratio 74.3% 62.9% 69.8% 56.6% Underwriting Expense Ratio 47.3% 38.8% 45.0% 40.1% In millions, except ratios Expense ratio growth is moderating as premiums build and start - up expenses transition to operating expenses

 
 

70 ProAssurance Investor Briefing, October 12 - 13, 2017 Lloyd’s Strategy Review ProAssurance provides 58% of capital to Syndicate 1729 Small ownership interest in the underlying underwriting arm, Dale Underwriting Partners $200 million capital commitment is best viewed as an investment Early stage costs elevated but in - line with expectations Expenses leveling as operations mature Provides potential exposure to global professional liability opportunities Also relevant to Medmarc for medical technology and products liability as more testing and development moves offshore First underwriting year (2014) closed profitably

 
 

71 ProAssurance Investor Briefing, October 12 - 13, 2017 Lloyd’s Strategy Update Special Purpose Arrangement (SPA) within Syndicate 1729 will begin writing business in 2018 Four experienced underwriters with established books of business joining Planned premium is $22 million Business focus is contingency & specialty property Continuing success in international healthcare professional liability from the highly - experienced underwriting team that joined Syndicate 1729 in March 2016 Extensive experience in Canada, Australia, South America & Middle East

 
 

72 ProAssurance Investor Briefing, October 12 - 13, 2017 Current Underwriting capacity: $130 million ProAssurance 57.6% share is $75.0 million 2016 Syndicate 1729 Gross Written Premium was $113.2 million ProAssurance 57.6% Share was $65.2 million Lloyd’s Syndicate 1729: Business Detail For the trailing twelve months as of March 31, 2017 and reported June 30, 2017. $ in millions and based on exchange rates at 6/30/2017 Property Insurance (Mainly US) 26% Casualty (US) 27% Medical Professional Liability (PICA) 8% Catastrophe Reinsurance - XS of Loss (non US) 1% Catastrophe Reinsurance - XS of Loss (US) 14% Facility (US) 6% General Liability (US) 13% All Other Reinsurance (Mainly US) 5% Broad spread of risk Property is primarily US

 
 

Segment Financial Highlights & Strategic Review Corporate & Investments

 
 

74 ProAssurance Investor Briefing, October 12 - 13, 2017 Segment operating results for Q2 2017 were lower than Q2 2016 due to net realized investment losses in Q2 2017 caused by mark - to - market adjustments Investment income continues to decline due to lower average balances and the low interest rate environment Q2 2017 Corporate Segment Financial Highlights Three Months Ended Six Months Ended June 30 June 30 2017 2016 2017 2016 Net Investment income $ 22.3 $24.2 $45.1 $49.4 Equity in earnings (loss) of unconsolidated subsidiaries $2.5 $0.4 $4.3 $(3.3) Net realized investment gains (losses) $(2.3) $10.9 $ 11.0 $2.6 Operating expenses $7.8 $8.2 $16.1 $15.7 Interest expense $4.1 $ 3.9 $8.3 $7.5 Income tax (benefit) / expense $0.2 $4.6 $(1.0) $5.9 Segment Operating Result $10.2 $19.0 $35.8 $19.6 In millions

 
 

75 ProAssurance Investor Briefing, October 12 - 13, 2017 Seeking better risk - adjusted returns Remaining sensitive to potential changes in tax rates 2017 Investment Strategy Optimizing our allocation E nsures non - correlation of returns Continuing capital management activities reduced the size of the portfolio Duration management remains paramount We will not extend duration in search of incremental yield

 
 

76 ProAssurance Investor Briefing, October 12 - 13, 2017 Q2 2017 Consolidated Net Investment Result 6/30/17 6/30/16 Change Net Investment Income Fixed maturities $ 18,427 $ 20 , 853 $ ( 2, 426 ) Equities 4 , 298 3, 561 737 Short - term and Other investments 958 673 285 BOLI 4 42 4 39 3 Investment fees and expenses ( 1 ,858 ) ( 1, 280 ) ( 578 ) Net investment income $ 2 2,267 $ 2 4 , 246 $ ( 1 , 979 ) Equity in Earnings (Loss) of Unconsolidated Subsidiaries Investment LPs/LLCs $ 8,830 $ 3,539 $ 5,291 Tax credit partnerships ( 6,314 ) ( 3,163 ) (3,151 ) Equity in earnings (loss) $ 2,516 $ 376 $ 2,140 622 Net investment result $ 24,783 $ 24,622 $ 161 $ in thousands Fixed income is down due to ~6% lower average balances and lower yields Excluding Capital Gains / (Losses)

 
 

77 ProAssurance Investor Briefing, October 12 - 13, 2017 Q2 2017 YTD Consolidated Net Investment Result 6/30/17 6/30/16 Change Net Investment Income Fixed maturities $ 38,152 $ 43,099 $ ( 4,947 ) Equities 7,942 7,204 738 Short - term and Other investments 1,736 1,068 668 BOLI 897 899 (2 ) Investment fees and expenses ( 3,646 ) (2,900 ) ( 746 ) Net investment income $ 45,081 $ 49 , 370 $ ( 4 , 289 ) Equity in Earnings (Loss) of Unconsolidated Subsidiaries Investment LPs/LLCs $ 14,363 $ 5,343 $ 9,020 Tax credit partnerships ( 10,039 ) ( 8,602 ) (1,437 ) Equity in earnings (loss) $ 4,324 $ (3,259 ) $ 7,583 622 Net investment result $ 49,405 $ 46,111 $ 3,294 $ in thousands Fixed income is down due to ~5% lower average balances and lower yields Excluding Capital Gains / (Losses)

 
 

78 ProAssurance Investor Briefing, October 12 - 13, 2017 06/30/17 Full portfolio disclosure on our website: investor.proassurance.com/CustomPage/Index?KeyGenPage=305596 ProAssurance Investment Profile $ 2.5 Billion Fixed Income Portfolio (69% of Invested Assets) $ 3.7 Billion Overall Portfolio Sources of Liquidity State & Muni 28% Corporate 52% Asset Backed 14% Govt & Agency 6% Short Term (incl cash) 7% Equities & Equity Substitutes 22% BOLI 2% Fixed Income 69% MONTHS (Negotiated)LPs (Secondary Liquidity) 8% 30 - 90 DAYS HFs/Privates 4% NOT LIQUID Statutory Deposits 1% SIX MONTHS BOLI 2% DAILY Cash Equities Bonds 85% Average duration: 3.4 years Average tax - equivalent income yield: 3.4% Investment grade: 93% Weighted average: A+

 
 

79 ProAssurance Investor Briefing, October 12 - 13, 2017 ProAssurance Recent Investment Performance Management reporting item which is ‘tax equivalent,’ unaudited, and non GIPS Contribution to Returns 2013 - 2017 / PRA vs Benchmarks 2017 YTD 2016 2015 2014 2013 % of Assets PRA Benchmark % of Assets PRA Benchmark % of Assets PRA Benchmark % of Assets PRA Benchmark % of Assets PRA Benchmark Core Fixed 72 % 1.61% 1.69% 72 % 1.95 % 1.32 % 73 % 1.86 % 1.58 % 72 % 3.24 % 3.04 % 77 % 0.57 % - 0.10% Alternative Fixed 11% 0.33% 0.28% 8 % 0.93 % 0.59 % 6 % - 0.19% - 0.14% 7 % 0.25 % 0.19 % 11 % 0.30 % 0.28 % Tax Credits 3% 0.11% 0.11% 4 % 0.45 % 0.45 % 4 % 0.56 % 0.56 % 4 % 0.45 % 0.45 % 4 % 0.51 % 0.51 % Private Equity 3 % 0.18% 0.18% 3 % 0.33 % 0.33 % 2 % 0.07 % 0.07 % 1 % 0.31 % 0.31 % 1 % 0.32 % 0.32 % Equity 9 % 0.42% 0.46% 9 % 1.36 % 1.13 % 8 % - 0.15% - 0.62% 9 % 0.72 % 0.85 % 7 % 2.01 % 2.03 % Real Estate 1 % 0.04% 0.04% 1 % 0.08 % 0.09 % 1 % 0.09 % 0.08 % 1 % 0.05 % 0.04 % 0 % 0.00 % 0.00 % Other 1% 0.16% 0.03 % 3 % 0.03 % 0.03 % 6 % - 0.01% - 0.01% 7 % 0.00 % 0.00 % 0 % 0.00 % 0.00 % Total 2.85% 2.79% 5.13 % 3.95 % 2.23 % 1.53 % 5.02 % 4.88 % 3.70 % 3.05 % Total Portfolio Outperformance 0.06% 1.18% 0.70% 0.14% 0.66%

 
 

80 ProAssurance Investor Briefing, October 12 - 13, 2017 06/30/17 Subject to Rounding ProAssurance Portfolio Detail: Asset Backed $348 Million ( 14% of Fixed Income/9% of Invested Assets) RMBS 59% Other (Primarily Auto & Credit Card) … CMBS 9% Weighted Average Rating: “AAA”

 
 

81 ProAssurance Investor Briefing, October 12 - 13, 2017 06/30/17 ProAssurance Portfolio Detail: Corporate Corporates: $1.3 Billion (52% of Fixed Assets/36% of Invested Assets) Top 20 Banks/Financials: $222 million in millions JPM $27 BBT $10 PNC $18 Simon Property $9 Goldman $17 Athene $9 Wells Fargo $15 US Bank $8 Citi $13 RBC $7 Amex $13 HCP $7 NRUC $13 HSBC $6 The Doctor’s Co $12 Berkshire Hath $6 Morgan Stanley $11 Digital Realty $5 B of A $11 Key Bank $5 Utilities & Energy … Other 1% Basic Materials 3% Technology 6% Communications 6% Consumer Oriented 23% Financials 33% Industrials 12% Weighted Average Rating: A

 
 

82 ProAssurance Investor Briefing, October 12 - 13, 2017 06/30/17 ProAssurance Portfolio Detail: Municipals Municipals: $722 Million (28% of Fixed Income / 20% Invested Assets) General Obligation 19% Prerefunded 9% Special Revenue 72% Weighted Average Rating: AA Top 10 Municipal Holdings in millions Connecticut State Housing Authority $14 Omaha Public Power $13 North Carolina State Capital Improvement $10 Colorado Springs, CO Utilities $10 Missouri St Highway & Transit $10 University of Al Gen Rev $10 Port Authority of NY & NJ $9 McAllister Academic Village AZ $8 Dallas, TX Waterworks & Sewer $8 Triborough Bridge & Tunnel $8

 
 

83 ProAssurance Investor Briefing, October 12 - 13, 2017 06/30/17 ProAssurance Portfolio: Equities & Other Equities & Other: $822 Million ( 22% of Invested Assets) Equities 36% Alternative Equity & Debt 15% Real Estate LP 5% Private Equity 13% Convertible Bonds 4% Bond Funds 6% Inflation Focused Bond Fund 8% Tax Credits 13%

 
 

Additional Financial Detail

 
 

85 ProAssurance Investor Briefing, October 12 - 13, 2017 Inside ProAssurance’s Income Statement: YTD 2017 Net Premiums Earned 84.8% Net Investment Income 10.7% Net Realized Investment Gains (Losses) 2.6% Other: 1.9% Net Losses and Loss Adjustment Expenses 54.8% Underwriting, Policy Acquisitions, Operating, SPC Dividend, and Interest Expenses 31.4% Net Income 14.2% Provision for Income Taxes - 0.4% Revenues: $429 mln Expenses: $430 mln Tax (Benefit): ($1.6 mln) Net Income: $61 mln 6/30/17

 
 

86 ProAssurance Investor Briefing, October 12 - 13, 2017 Cash & Investments 78.4% Insurance Receivables 11.7% Goodwill & Intangible Assets 6.0% Other Assets 3.9% Retained Earnings 38.1% Loss Reserves 41.0% Reinsurance Payable & Other Liabilities 13.0% Unearned Premiums 8.2% Other Equity - 0.3% Assets: $4.9 bln Liabilities: $3.1 bln Equity: $1.8 bln 6/30/17 Inside ProAssurance’s Balance Sheet: Q2 2017

 
 

87 ProAssurance Investor Briefing, October 12 - 13, 2017 Tax Credit Impact on Operating Results Substantial tax benefits and amortization expenses - $0.8 - $5.6 - $6.2 - $10.0 - $10.7 - $10.3 - $24.8 - $23.1 - $20.0 - $21.3 - $21.1 - $15.7 - $7.3 - $3.2 - $1.3 $1.2 $7.7 $12.3 $20.8 $21.7 $26.0 $36.2 $33.8 $25.6 $25.7 $24.8 $18.8 $7.4 $1.2 $0.5 0.4 2.1 6.1 10.8 11.0 15.7 11.4 10.7 5.6 4.4 3.7 3.1 0.1 - 1.9 - 0.8 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Pre-Tax Losses Including Impairment Tax Credit Provision Impact on Earnings Actual Projected (Reduces PRE TAX Net Investment Income) (Reduces Taxes Due) (Net Effect)

 
 

88 ProAssurance Investor Briefing, October 12 - 13, 2017 Combined Tax Credits Portfolio Detail & Projections Year Capital Contributions GAAP Income/(Loss) from Operations, Disposition & Impairment Total Credits (Source IRR Schedule) Tax Provision after Impairment Impact on Earnings 2016 $ 8,701,852 $ (24,817,214) $ 27,549,158 $ (36,235,182) $ 11,417,968 2017 $ 4,404,737 $ ( 23,140,092) $ 25,669,586 $ (33,768,617) $ 10,628,527 2018 $ 151,992 $ ( 19,997,206) $ 18,636,522 $ (25,635,545) $ 5,638,338 2019 $ 150,596 $ ( 21,305,183) $ 18,195,091 $ (25,651,905) $ 4,346,722 2020 $ 136,251 $ ( 21,071,738) $ 17,451,316 $ (24,826,427) $ 3,754,686 2021 $ 120,658 $ ( 15,660,973) $ 13,273,285 $ (18,754,622) $ 3,093,652 2022 $ 311,047 $ ( 7,277,340) $ 4,805,453 $ (7,352,522) $ 75,183 2023 $ 51,338 $ ( 3,243,791) $ 168,433 $ (1,303,762) $ ( 1,940,031) 2024 $ 51,338 $ (1,264,550) $ 24,099 $ (466,692) $ (797,858) 2025 $ 41,159 $ - $ 7,719 $ (7,719) $ 7,719 2026 $ 25,734 $ - $ 2,994 $ (2,994) $ 2,994 2027 $ - $ - $ 86 $ (86) $ 86 2028 $ - $ - $ - $ - $ - $ 14,146,702 $ ( 137,778,086) $ 125,783,742 $ (174,006,073) $ 36,227,987

 
 

89 ProAssurance Investor Briefing, October 12 - 13, 2017 2017 YTD Ceded Premiums Written HCPL including Podiatry Products Lawyers Workers’ Compensation Lloyd’s Traditional Alternative Markets 6/30/17 6/30/16 6/30/17 6/30/16 6/30/17 6/30/16 6/30/17 6/30/16 6/30/17 6/30/16 6/30/17 6/30/16 Gross written premium $ 229.7 $ 223.0 $ 17.4 $ 16.8 $ 14.6 $ 14.6 $ 97.0 $ 93.2 $ 46.5 $ 41.3 $ 36.0 $ 31.9 Ceded premiums 30.4 28.2 6.1 5.5 1.4 1.2 3.8 4.3 9.5 8.7 10.2 5.7 Net written premium 199.3 194.8 11.3 11.3 13.2 13.4 93.2 88.9 37.0 32.6 25.8 26.2 Ceded Premium Components Primary reinsurance arrangement, current accident year 10.3 8.1 6.1 5.6 1.4 0.5 4.4 4.6 4.6 3.9 — — All other reinsurance arrangements 22.1 26.2 — — — - 0.7 — — 4.9 4.8 10.2 5.7 Ceded premiums, current accident year 32.4 32.9 6.1 5.6 1.4 1.2 4.4 9.5 8.7 10.2 5.7 Reduction in premiums owed under reinsurance agreements ( 2.0 ) ( 4.9 ) — — — — (0.6 ) (0.3 ) — — — — Total ceded premiums $ 30.4 $ 28.0 $ 6.1 $ 5.6 $ 1.4 $ 1.2 $ 3.8 $ 4.3 $ 9.5 $ 8.7 $ 10.2 $ 5.7 Ceded premiums ratio, current accident year 14.1 % 14.8 % 35.1 % 33.3% 9.6% 8.2 % 4.5 % 4.9 % 20.4 % 21.1 % 28.3 % 17.9 % All other reinsurance arrangements primarily represent shared risk and quota share programs including premiums ceded 100% to an unaffiliated captive insurer for the Workers' Compensation alternative market business All Lloyd's reinsurance premium is shown in the "All other reinsurance arrangements" line

 
 

90 ProAssurance Investor Briefing, October 12 - 13, 2017 Q2 2017 Condensed Results by Segment Second Quarter 2017 Specialty P&C Workers' Comp Lloyd's Syndicate Corporate / Other Elimination Q2 201 7 Q2 201 6 Gross premiums written $ 124 , 887 $ 59 , 325 $ 2 3 , 311 $ — $ ( 1 , 283 ) $ 2 06 , 240 $ 195,014 Net premiums written 1 06 , 529 54 , 700 1 4 , 422 — — 175 , 651 1 71 , 469 Net premiums earned 1 09,005 56 , 854 14, 494 — — 18 0 , 353 17 6 , 732 Net losses and LAE 7 1 , 296 33 , 486 10 , 768 — — 11 5 , 550 1 06 , 899 Underwriting, policy acquisition & operating expenses 26 , 239 1 7 , 093 6, 85 1 7 , 757 ( 55 ) 57, 885 5 4 , 034 Underwriting Result $ 1 1 , 470 $ 6 , 275 $ ( 3 , 125 ) $ ( 7 , 757 ) $ 55 $ 6, 918 $ 15 , 799 % of total 1 65.8 % 90.7 % ( 45 . 2 )% ( 1 12 . 1 )% 0 . 8 % 100.0 % Net investment result — — 410 24, 783 — 2 5 , 193 2 4 , 959 Net realized inv gains / (losses) — — 47 ( 2 , 266 ) — ( 2 , 219 ) 10 , 929 Other income 1, 469 209 ( 151 ) 778 ( 55 ) 2 , 250 2, 181 SPC dividend expense / (income) 5,119 2 , 698 — 9 94 — 8 , 811 1, 523 Interest expense — — — 4,1 45 — 4,1 45 3,8 51 Income tax expense / (benefit) ( 548 ) 21 6 ( 33 2 ) 5,413 Segment operating result $ 7 , 820 $ 3 , 786 $ ( 2,271 ) $ 10 , 183 $ — $ 1 9 , 518 $ 43 , 081 Net loss ratio 6 5 . 4 % 58.9 % 74. 3 % n/a n/a 6 4 .1 % 6 0 .5 % Expense ratio 2 4 . 1 % 30. 1 % 4 7.3 % n/a n/a 3 2 . 1 % 3 0 . 6 % Combined ratio 89. 5 % 89 . 0 % 1 21.6 % n/a n/a 96. 2 % 9 1 . 1 %

 
 

91 ProAssurance Investor Briefing, October 12 - 13, 2017 Q2 2017 YTD Condensed Results by Segment Second Quarter 2017 Year to Date Specialty P&C Workers' Comp Lloyd's Syndicate Corporate / Other Elimination Q2 201 7 Q2 201 6 Gross premiums written $ 261,748 $ 143,554 $ 36,023 $ — $ ( 3 , 740 ) $ 437,585 $ 415,548 Net premiums written 223,826 130,270 25,782 — — 379,878 367,297 Net premiums earned 222,063 112,137 29,056 — — 363,256 354,312 Net losses and LAE 146,291 68,136 20,274 — — 234,701 217,854 Underwriting, policy acquisition & operating expenses 52,217 33,784 13,062 16 , 073 ( 142 ) 114,994 110,923 Underwriting Result $ 23,555 $ 10,217 $ ( 4 , 280 ) $ ( 16 , 073 ) $ 142 $ 13,561 $ 25,535 % of total 1 73.8 % 75.3 % ( 31.6 )% ( 1 18 . 5 )% 1. 0 % 100.0 % Net investment result — — 782 49,405 — 50,187 46,764 Net realized inv gains / (losses) — — 74 1 0,987 — 11,061 2,578 Other income 2,668 354 240 951 ( 142 ) 4,071 4,535 SPC dividend expense / (income) 5,091 3,872 — 2,223 — 11,186 2,699 Interest expense — — — 8,278 — 8,278 7,537 Income tax expense ( 555 ) ( 1, 002 ) ( 1, 557 ) 6,777 Segment operating result $ 21 , 132 $ 6,699 $ ( 2,629 ) $ 3 5 ,771 $ — $ 60 , 973 $ 62,399 Net loss ratio 6 5.9 % 6 0.8 % 6 9.8 % n/a n/a 6 4.6 % 6 1 .5 % Expense ratio 23. 5 % 30. 1 % 4 5.0 % n/a n/a 31. 7 % 3 1.3 % Combined ratio 89. 4 % 9 0 .9 % 1 14.8 % n/a n/a 96.3 % 9 2.8 %

 
 

92 ProAssurance Investor Briefing, October 12 - 13, 2017 2016 Condensed Results by Segment Year Ended 12/31/16 Specialty P&C Workers' Comp Lloyd's Syndicate Corporate / Other Elimination Total YTD 2016 Total YTD 2015 Gross premiums written $ 535,725 $ 247,940 $ 65,157 $ — $ (13,808 ) $ 835,014 $ 812,218 Net premiums written 458,681 223,578 56,274 — — 738,533 709,285 Net premiums earned 457,816 220,815 54,650 — — 733,281 694,149 Net losses and LAE 268,579 140,534 34,116 — — 443,229 410,711 Underwriting, policy acquisition & operating expenses 104,333 70,464 22,832 30,807 (826 ) 227,610 217,064 Underwriting Result $ 84,904 $ 9,817 $ (2,298 ) $ (30,807 ) $ 826 $ 62,442 $ 66,374 % of total 136.0 % 15.7 % (3.7 )% (49.3 )% 1.3 % 100.0 % Net investment result — — 1,410 92,840 — 94,250 112,342 Net realized inv gains / (losses) — — 76 34,799 — 34,875 (41,639 ) Other income 5,306 844 1,415 1,069 (826 ) 7,808 7,227 SPC dividend expense / (income) 144 7,998 — — — 8,142 853 Interest expense — — — 15,032 — 15,032 14,596 Income tax expense 384 24,736 25,120 12,658 Segment operating result $ 90,066 $ 2,663 $ 219 $ 58,133 $ — $ 151,081 $ 116,197 Net loss ratio 58.7 % 63.6 % 62.4 % n/a n/a 60.4 % 59.2 % Expense ratio 22.8 % 31.9 % 41.8 % n/a n/a 31.0 % 31.3 % Combined ratio 81.5 % 95.5 % 104.2 % n/a n/a 91.4 % 90.5 %

 
 

Corporate Profile

 
 

94 ProAssurance Investor Briefing, October 12 - 13, 2017 As of 6/30/17 , except Market Cap which is 9/30/2017 ProAssurance Corporate Profile Healthcare - centric specialty insurance writer Healthcare Professional Liability (HCPL) • Only public company writing predominantly HCPL Life sciences and medical device liability Workers' compensation Legal professional liability Alternative risk transfer (ART) Market Cap: $2.9 billion Shareholders’ Equity: $1.8 billion Total Assets: $4.9 billion Claims - Paying Ratings A. M. Best: “A+” (Superior) Fitch: “A” (Strong) 40 locations in three countries 969 employees Writing in 50 states & DC Emerging international business Business Unit Principal Offices Employees Lines of Business HCPL 18 458 Healthcare Professional Liability PRA Corporate 1 106 Corporate functions (Accounting, Legal, etc.) PICA 1 94 Professional Liability for Podiatry & Chiropractic Eastern 7 255 Workers’ Compensation Captive Facilities (all lines) Medmarc 2 67 Products Liability Legal Professional Liability PRA Risk Solutions 1 3 Alternative Risk Transfer Corporate Headquarters Claims Offices Claims/Underwriting Offices Underwriting Offices Cayman Islands Primary Capital Source for Lloyds Syndicate 1729

 
 

95 ProAssurance Investor Briefing, October 12 - 13, 2017 YTD 2017 Premiums, Policyholders & Distribution 6/30/17 YTD Policyholder Count: ~ 72,500 YTD 2017 Gross Premium: $ 438 mln Physicians & Dentists 44% Ancillary Healthcare 3% Life Sciences/ Medical Tech 4% Hospitals & Facilities 6% Attorneys 3% Workers' Compensation 33% Lloyd's 7% Specialty P&C: 60% Physicians & Dentists 62% Ancillary Healthcare 11% Life Sciences/ Medical Tech 2% Hospitals & Facilities 2% Attorneys 9% Workers' Compensation 14% Premium Allocated by Line Does Not Reflect Inter - Segment Eliminations Subject to Rounding Our Distribution Sources HCPL LPL Life Sciences Workers’ Comp Agent/Broker 76% 100% 100% 100% Direct 24% -- -- --

 
 

96 ProAssurance Investor Briefing, October 12 - 13, 2017 Our Four Reporting Segments ProAssurance Consolidated Specialty P&C Workers’ Compensation Lloyd’s Corporate / Other Healthcare Professional Liability Products Liability Lawyers’ Professional Liability Traditional Captive Market Facility Syndicate 1729 (58%) (including investments & taxes) PRA Corp – Parent Company Internal Agency Operations Investments, except Lloyd’s Taxes, Except Lloyd’s Debt Operating Segments

 
 

97 ProAssurance Investor Briefing, October 12 - 13, 2017 ProAssurance Brand Profile Specialty P&C Healthcare Professional Liability Workers’ Comp Alternative Risk Transfer Medical Technology & Life Sciences Products Liability Legal Professional Liability

 
 

98 ProAssurance Investor Briefing, October 12 - 13, 2017 ProAssurance’s Path to Success 1976 - 1991 Building financial strength Establishing a brand reputation for superior service Demutualized in 2001 1991 - 2012 Scope & size addressed by expansion through careful M&A and de novo expansion in traditional HCPL 2012 - 2016 Additional capabilities added in Life Sciences and Workers Compensation The only specialty offering HCPL and Workers Compensation Instrumental in the formation of Lloyd’s Syndicate 1729 Providing 58% of the Syndicate’s underwriting capacity New options available ranging from captives to Lloyds Corporate / Other Looking for further M&A opportunities in HCPL International opportunities can be created through Lloyds We expect to remain healthcare - centric

 
 

99 ProAssurance Investor Briefing, October 12 - 13, 2017 Management is Experienced & Invested Proven e xecutive management remains in place Officer/SVP: 16 years average tenure / 29 years average total industry experience VP level: 15 years average experience /28 years average total industry experience Performance over our history demonstrates our understanding of cycle management and the need to remain disciplined Board, management and employees are invested, owning ~2 % of ProAssurance stock SVP and above subject to ownership guidelines Executive Committee Experience/Bios W. Stancil Starnes, JD Chairman & Chief Executive Officer Company Tenure: 10 Years Prior MPL Experience: 29 Years Total Industry & Related Experience: 39 Years Formerly in the private practice of law in HCPL defense and complex corporate litigation Jeffrey P. Lisenby, JD Executive Vice - President, General Counsel & Secretary Company Tenure : 16 Years Prior MPL Experience: - Total Industry & Related Experience: 16 Years Formerly in the private practice of law Edward L. Rand, Jr., CPA Executive Vice - President & Chief Financial Officer Company Tenure : 12 Years Prior MPL Experience: - Total Industry & Related Experience: 24 Years Career - long experience in insurance finance and accounting. Prior to ProAssurance: Chief Accounting Officer for Partner Re Howard H. Friedman, ACAS President HCPL Group & Chief Underwriting Officer Company Tenure: 21 Years Prior MPL Experience: 16 Years Total Industry & Related Experience: 37 Years Career - long experience in MPL company operations and management. Former ProAssurance CFO Michael L. Boguski, CPCU President, Eastern Alliance Insurance Group Company tenure: 21 Years (Co - founder/First employee) Prior Property & Casualty experience: 11 Years Total Industry & related experience: 32 Years Career long experience in Property and Casualty Underwriting, Operations and Executive Management. Ross E. Taubman, DPM President of PICA Company Tenure: 6 Years Prior MPL Experience: - Total Industry & Related Experience: 32 Years Formerly in the private practice of podiatry. Leader in organized podiatric medicine; former President and Trustee of the American Podiatric Medical Association

 

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