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Section 1: 8-K (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): March 4, 2019

 

 

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:

 

o                Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o                Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)

 

o                Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))

 

o                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 o

 

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. o

 

 

 


 

Item 7.01                               Regulation FD Disclosure

 

In this Current Report on Form 8K we are furnishing materials which will we began using during meetings and presentations starting after the close of normal trading on March 4, 2019. These materials are presented in Exhibit 99.1.

 

Item 9.01                               Financial Statements and Exhibits

 

99.1

 

Materials which will we began using during meetings and presentations starting March 4, 2019.

 

We are furnishing Exhibits 99.1 and 99.2 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: March 4, 2019

 

 

PROASSURANCE CORPORATION

 

 

 

By:

/s/ Frank B. O’Neil

 

 

Frank B. O’Neil

 

 

Senior Vice President

 

2


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Section 2: EX-99.1 (EX-99.1)

Exhibit 99.1

March, 2019 Q1 2019 Investor Update

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Table of Contents The Latest News Investments Key Themes & Topics (w/ Capital Management) 2-8 Investment Strategy 94 Management Changes 9-11 2018 Net Investment Result 95 Corporate Update / Overview 12-15 PRA Performance vs. Benchmark 96 Capital Management (Expanded) 16-21 Detailed Breakout of Investments 97-102 Operating & Financial Performance 22-30 Tax Credits 103 ROE, Leverage, & Stock Performance 31-35 Safe Harbor & Non-GAAP Notices 104 Segment-Specific Discussion Specialty P&C Operating Highlights 36-46 Specialty P&C Strategic Update 47-61 Workers' Compensation Operating Highlights 62-71 Workers' Compensation Strategic Update 72-74 Segregated Portfolio Cell Operating Highlights 75-81 Segregated Portfolio Cell Strategic Update 82-86 Lloyd's Operating Highlights 87-89 Lloyd's Investment Thesis & Strategic Review 90-92

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Topics of Importance and Key Themes March 2019

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Key Update: Dividends and Capital Management Special dividend of $0.50/share paid on January 9, 2019 Special dividend of $4.69/per common share paid in 2018 and 2017 Regular quarterly dividends of $0.31/per common share Dividends declared in 2018 and 2017 returned $317 million of capital to shareholders in each year Balancing our proven dedication to effective capital management with the desire to retain capital to pursue business opportunities and potential transactions that may emerge

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Key Update: Positives in 2018 *Some InovaRe business included in HCPL †Includes alternative markets Continued Operating Profitability Non-GAPP Operating Income: $79.5 million, $1.48 per share Renewal Pricing Momentum Continues in Specialty P&C Despite Competition Facilities up 7%, Physicians up 3% Other Healthcare providers up 4%, Medical technology up 3% 13% Net Premium Growth in Workers’ Comp Ins. Strong Renewal Retention Physicians: 90% Workers’ Comp Ins: 86.2% Segregated Portfolio Cell Reinsurance (SPCR): 91% Almost $100 Million New Business Written $47.9 million in Specialty Property & Casualty* $51.5 million in Workers’ Compensation Insurance† Investment Income of $91.9 Million (+10.4% over 2017)

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Key Update: Major Topics for Q4 2018 Net Loss for the Quarter Net Loss: $24.5 million, $0.46 per share Realized Net Investment Losses of $46.1 Million Due to Equity Market Performance $36.7 million were unrealized losses carried as trading Investments portfolio recovered $30 million as of February 15th Lloyd’s Operating Loss of $9.5 Million Apprx. $6.8 million loss from Hurricane Michael Apprx. $3.2 million loss from Hurricane Florence and volcanic eruptions in Hawaii $1.7 million of unfavorable development Combined Ratio of 105.9% Net loss ratio: 76.3% Underwriting expense ratio: 29.6%

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Key Update: Confronting the Challenges Ahead Strategic review of our Lloyd’s Investment Increase profitability Reduce volatility Asses our degree of participation Profitable growth Increasing market discipline allows us to add new HCPL business at higher rates Specialization is profitable markets and businesses provides an avenue for growth in Workers’ Compensation Maintaining caution as loss trends worsen in HCPL Trends are not yet evident in our paid losses, but prompted by the general industry outlook Increasing current accident year loss picks to protect insureds, investors and our balance sheet for the long-term Balancing competing capital needs Emerging business opportunities could allow us to deploy capital profitably in the markets Developing loss trends could require us to hold more capital

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Key Update: The Current State of the Markets We Serve Healthcare Professional Liability: Signs of increasing severity and greater scrutiny from regulators and rating agencies should bring rationality back to the market Likely to provide new growth opportunities as weakness among smaller, less capable/experienced competitors produces a flight to quality Workers’ Compensation Insurance: Expending economy and specialization fueling business gains and offsetting business lost to price competition Increased claims severity and frequency as strong economy results in the hiring of less experienced workers Pricing pressure will cause multi-line carriers to scale back results Lloyd’s Syndicates: Regulators are focused on excess capital and prudent business plans Some signs of pricing improvement in recent renewal rounds

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Key Themes Long Term Success Consistent & disciplined focus on profitability Demonstrated track record of value creation for shareholders 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 Strong claims advocacy continues to differentiate Forward Thinking Successfully adapting to serve evolving risks through new distribution partners Coverages that span the broad spectrum of healthcare and related risks Dedicated to creating future value

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Management Changes March 2019

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Changes in Leadership Howard Friedman is retiring from his role as President of Healthcare Professional Liability Will remain with ProAssurance focusing on the actuarial function Mike Boguski will become President of ProAssurance Specialty P&C Will include all professional and product liability operations Kevin Shook will become President of Eastern Alliance All effective May 13th

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Corporate Leadership Structure as of May 13th

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Corporate Update March 2019

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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: $2.4 billion Shareholders’ Equity: $1.5 billion Total Assets: $4.6 billion Claims-Paying Ratings A. M. Best: “A+” (Superior) Fitch: “A” (Strong) 40 locations in three countries 991 employees Writing in 50 states & DC Emerging international business Business Unit Principal Offices Employees Lines of Business HCPL 18 451 Healthcare Professional Liability PRA Corporate 1 116 Corporate functions (Accounting, Legal, etc.) PICA 1 90 Professional Liability for Podiatry & Chiropractic Eastern 7 272 Workers’ Compensation Captive Facilities (all lines) Medmarc 2 59 Products Liability Legal Professional Liability PRA Risk Solutions 1 3 Alternative Risk Transfer Corporate Headquarters Claims Offices Claims/Underwriting Offices Underwriting Offices Cayman Islands Lloyds Data as of 12/31/18 except market cap which is 2/15/19

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Premiums, Policyholders & Distribution for 2018 All Data as of 12/31/2018 YTD Policyholder Count: ~75,508 YTD 2018 Gross Premium: $957.3 mln Premium Allocated by Line Does Not Reflect Inter-Segment Eliminations Subject to Rounding Our Distribution Sources HCPL LPL Life Sciences Workers’ Comp Agent/Broker 77% 100% 100% 100% Direct 23% -- -- -- Specialty P&C 82% Workers' Comp 18% Specialty P&C 66% Workers' Comp 43% Physicians & Dentists 61% Ancillary Healthcare 9% Life Sciences & Medical Tech 2% Hospitals & Facilities 2% Attorneys 8% Segregated Portfolio Cells Reinsurance 4% Workers' Compensation 15% Physicians & Dentists 42% Ancillary 3% Life Sciences 4% Hospitals & Facilities 8% Attorneys 3% Retroactive 2% Segregated Portfolio Cell Reinsurance 10% Workers' Compensation 22% Lloyd's 10% Other <1%

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ProAssurance Brand Profile Specialty P&C Healthcare Professional Liability Workers’ Comp Alternative Risk Transfer Medical Technology & Life Sciences Products Liability Legal Professional Liability

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Additional Capital Management Discussion Points March 2019

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Superb Track Record of Capital Management Current Management Team’s Tenure Began Q2 2007 At 12/31/18 $ in 000’s Year Dividends Declared Share Repurchase Strategic Acquisitions Total Special Regular 2007 ̶ ̶ $ 54,201 ̶ $ 54,201 2008 ̶ ̶ 87,561 ̶ 87,561 2009 ̶ ̶ 52,045 $ 137,800 189,845 2010 ̶ ̶ 106,347 233,000 339,347 2011 ̶ $ 15,269 21,013 ̶ 36,282 2012 $ 154,055 38,411 ̶ 24,000 216,466 2013 ̶ 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 ̶ 289,649 2016 249,188 65,841 2,106 ̶ 317,135 2017 250,720 66,170 ̶ ̶ 316,890 2018 26,819 67,495 ̶ ̶ 94,314 $ 884,480 $ 454,585 $ 747,880 $ 753,744 $ 2,840,689 $2,086,945 21% increase in Shareholders Equity To $1.52 billion from $1.26 billion $2.1 billion returned to shareholders through share repurchase and dividends since 2007 Share repurchase balances share price vs. book value/share $110 mln authorized for buybacks at 12/31/2018 Regular quarterly dividend is $0.31/share Special dividend of $0.50 paid 1/9/19 $754 million deployed in transformative strategic acquisitions

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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

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Key Source of Capital: Subsidiary Dividends to Corporate Subsidiary Dividend History (in Millions) 2019 ORDINARY Dividend Capacity $128.4 Million Ordinary dividends are permitted without regulatory pre-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 $130 $160 $144 $149 $229 $48 $200 $150 $162 $56 $178 $360 $294 $311 $285 2018 2017 2016 2015 2014 Ordinary Extraordinary

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Capital Management Priorities “A+” Rating Threshold The manner in which capital is used has an effect on financial ratings Excess Capital vs. Excess Capacity Conceptual Model of Projected A. M. Best BCAR Scores if Increase Premium Reduce Surplus

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Capital Growth: 2009-2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Beginning Equity* $ 1,424 $ 1,705 $ 1,856 $ 2,164 $ 2,271 $ 2,394 $ 2,158 $ 1,958 $ 1,799 $ 1,595 Cumulative-effect adjustments ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ $ 149 $ 8,334 Stock Issued ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ ̶ Employee Stock Transactions $ 7,205 $ 6,147 $ 6,167 $ 7,780 $ 9,261 $ 11,246 $ 8,221 $ 12,857 $ 8,058 $ 2,368 Earnings $ 222,026 $ 231,598 $ 287,096 $ 275,470 $ 297,523 $ 196,565 $ 116,197 $ 151,081 $ 107,264 $ 47,057 Dividends ̶ ̶ $ (15,269) $ (192,466) $ (64,777) $ (220,464) $ (119,866) $ (315,028) $ (316,890) $ (94,314) Treasury Stock $ (46,884) $ (106,347) $ (20,317) ̶ $ (32,054) $ (222,360) $ (169,793) $ (2,106) ̶ ̶ Unrealized G/L $ 98,663 $ 19,870 $ 50,913 $ 15,343 $ (85,719) $ (1,457) $ (34,349) $ (6,456) $ (2,488) $ (35,238) Total Equity* $ 1,705 $ 1,856 $ 2,164 $ 2,271 $ 2,394 $ 2,158 $ 1,958 $ 1,799 $ 1,595 $ 1,523 * Equity shown in millions; all other data shown in thousands

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Financial / Operating Performance March 2019

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Income Statement Highlights (12/31/18) Strong results from a focused strategy Three Months Ended Twelve Months Ended December 31 2018 2017 2018 2017 Gross Premiums Written $ 211.7 $ 191.7 $ 957.3 $ 874.9 Net Investment Result $ 20.9 $ 25.6 $ 100.8 $ 103.7 Total Revenues $ 179.5 $ 209.1 $ 886.0 $ 866.1 Net Losses and LAE $ 154.1 $ 105.1 $ 593.2 $ 469.2 Underwriting, Policy Acquisition & Operating Expenses $ 59.7 $ 63.6 $ 238.6 $ 235.8 Net Income (Loss) (Includes Realized Investment Gains & Losses) $ (24.5) $ 17.3 $ 47.1 $ 107.3 Non-GAAP Operating Income $ 9.7 $ 29.5 $ 79.5 $ 108.5 Non-GAAP Operating Income per Diluted Share $ 0.18 $ 0.55 $ 1.48 $ 2.02 In millions, except per share data

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Corporate Segment Financial Highlights (12/31/18) Three Months Ended Twelve Months Ended December 31 2018 2017 2018 2017 Net investment income $ 22.8 $ 25.2 $ 87.0 $ 92.9 Equity in earnings (loss) of unconsolidated subsidiaries $ (3.3) $ (0.5) $ 8.9 $ 8.0 Net realized investment gains (losses) $ (42.5) $ (3.6) $ (39.9) $ 12.4 Operating expenses $ 3.4 $ 8.2 $ 18.8 $ 29.3 Interest expense $ 4.9 $ 4.4 $ 16.2 $ 16.8 Income tax (benefit) / expense $ (14.1) $ 17.0 $ (17.7) $ 21.9 Segment operating result $ (16.4) $ (7.6) $ 42.3 $ 48.1 In millions

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Strong Operational Results / Long-Term Profitability Combined ratio average 2009-2018: 77.8% Operating ratio average 2009-2018: 57.4% Combined Ratio and Operating Ratio History 69.1% 68.0% 52.5% 57.3% 70.6% 82.1% 90.5% 91.4% 95.4% 101.5% 38.8% 39.8% 27.6% 32.6% 46.1% 64.2% 74.8% 77.8% 82.4% 90.3% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Combined Ratio Operating Ratio

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Recognizing loss trends as they appear No change in reserving philosophy or process Disciplined Approach to Reserves $ in millions *Subject to rounding 15-Year Reserve Development History by Quarter by Year HCPL Predominating 2004—2018 $20 $19 $25 $40 $48 $53 $48 $34 $29 $29 $23 $31 $37 $38 $50 $60 $39 $42 $35 $37 $29 $23 $30 $43 $33 $52 $50 $49 $43 $36 $29 $32 $22 $104 $108 $138 $184 $114 $82 $49 $56 $49 $44 $25 $17 $23 $36 $105 $185 $207 $234 $326 $272 $223 $182 $161 $144 $134 $92* 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q4 Q3 Q2 Q1

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Inside ProAssurance’s Income Statement (12/31/18) 12/31/18 Subject to Rounding Net Premiums Earned 92.4% Net Investment Income 10.4% Net Realized Investment Gains (Losses) (4.9%) Other 2.1% Net Losses and Loss Adjustment Expenses 67.0% Underwriting, Policy Acquisitions, Operating, SPC Dividend, and Interest Expenses 29.7% Net Income 5.3% Provision for Income Taxes (2.0%) Revenues: $886 mln Expenses: $857 mln Tax Benefit: $18 mln Net Income: $47.1 mln

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Ceded Premiums Written (Year Ended 12/31/18) Specialty P&C Workers’ Compensation Insurance (1) Segregated Portfolio Cell Reinsurance Lloyd’s (3) HCPL(2) including Podiatry Products Lawyers 12/31/18 12/31/17 12/31/18 12/31/17 12/31/18 12/31/17 12/31/18 12/31/17 12/31/18 12/31/17 12/31/18 12/31/17 Gross written premium $ 515.9 $ 489.0 $ 34.8 $ 34.4 $ 26.5 $ 26.0 $ 293.2 $ 264.0 $ 85.1 $ 77.7 $ 88.7 $ 70.2 Ceded premiums 68.6 68.1 12.0 12.3 2.5 2.2 97.9 90.5 9.5 8.8 18.9 15.3 Net written premium $447.3 $420.9 $22.8 $22.1 $24.0 $23.8 $195.3 $173.5 $75.6 $68.9 $69.8 $54.9 Ceded Premium Components Primary reinsurance arrangement, current accident year $22.6 $18.9 $12.0 $12.3 $2.5 $0.4 $13.5 $9.8 $9.5 $8.8 $— $— All other reinsurance arrangements 40.5 50.5 — — — 1.8 84.5 80.6 — — 18.9 15.3 Ceded premiums, current accident year 63.1 69.4 12.0 12.3 2.5 2.2 98.0 90.4 9.5 8.8 18.9 15.3 Reduction in premiums owed under reinsurance agreements 5.5 (1.3 ) — — — — (0.1) 0.1 — — — — Total ceded premiums $ 68.6 $ 68.1 $ 12.0 $ 12.3 $ 2.5 $ 2.2 $ 97.9 $ 90.5 $ 9.5 $ 8.8 $ 18.9 $ 15.3 Ceded premiums ratio, current accident year 12.2 % 14.2 % 34.4 % 35.9% n/a 9.3% n/a 8.6 % 33.4 % 34.2 % 11.2 % 11.3 % 21.3 % 21.8 % Subject to rounding (1) All other reinsurance arrangements primarily represent alternative market business ceded under a 100% quota share reinsurance agreement, net of a ceding commission, to SPCs in our Segregated Portfolio Cell Reinsurance segment. (2) All other reinsurance arrangements includes alternative market premium, net of reinsurance, which all or a portion of the premium is ceded to certain SPCs in our Segregated Portfolio Cell Reinsurance segment. (3) All Lloyd’s reinsurance premium is shown in the “all other reinsurance arrangements” line.

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Balance Sheet Highlights Maintaining the financial strength required to keep our insurance promise and creating value for our shareholders Dec 31, 2018 2017 2016 2015 2014 Shareholders’ Equity $1.5 $1.6 $1.8 $2.0 $2.2 Total Investments $3.3 $3.7 $3.9 $3.7 $4.0 Total Assets $4.6 $4.9 $5.1 $4.9 $5.2 Total Policy Liabilities $2.6 $2.5 $2.4 $2.4 $2.4 Book Value per Share $28.39 $29.83 $33.78 $36.88 $38.17 In billions, except Book Value per share 2014 – 2018 $1.5 bln Returned to Shareholders Through Dividends and Share Repurchase We have paid a total of $24.13/share in regular and special dividends since 2011. Extensive capital management activities have reduced book vale per share while increasing shareholder return Shareholders’ Equity: 21% Increase (2007 - Q4 2018) $1.26 $1.42 $1.70 $1.86 $2.16 $2.27 $2.39 $2.16 $1.96 $1.80 $1.59 $1.52 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q4 2018

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Inside ProAssurance’s Balance Sheet: (12/31/18) Cash & Investments 74.6% Insurance Receivables 14.3% Goodwill & Intangible Assets 6.2% Other Assets 4.9% Retained Earnings 34.2% Loss Reserves 46.1% Reinsurance Payable & Other Liabilities 11.8% Unearned Premiums 9.0% Other Equity - 1.1% Assets: $4.6 bln Liabilities: $3.1 bln Equity: $1.5 bln 12/31/18 Subject to Rounding

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Shareholder Return & ROE March 2019

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Book Value per Share History to December 31, 2018 Growth in Book Value + Dividends Since Inception (Sep 1991) Cumulative: 2,754% / CAGR: 13% Initial dividend declared in Q4 2011 $51.67 $1.84 $3.14 $4.28 $5.79 $6.96 $8.01 $9.39 $12.30 $19.35 $26.30 $35.67 $43.56 $47.41 $ 52.52 $36.85 $38.17 $33.78 $28.39 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 17 18 BV + Dividends Book Value 2016 and 2017 each includes a $4.69/share special dividend 2018 includes a $0.50/share dividend

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$289 million debt at 12/31/18 $250.0 million 10-year notes due 11/15/2023 5.30% Coupon $39 million in office building mortgages $250 million revolving credit facility No outstanding borrowings ProAssurance Leverage Update Ten-Year Premiums to Equity Ten-Year Debt to Capital 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 Financial Leverage Operating Leverage 3% 3% 2% 5% 9% 10% 15% 20% 21% 16% $- $0.8 $1.6 $2.4 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 $ in billions Debt Capital Debt to Capital 0.3 0.3 0.3 0.2 0.2 0.4 0.4 0.5 0.5 0.5 $- $0.8 $1.6 $2.4 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 $ in billions Premiums Equity Premiums to Surplus

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Return on Equity & Future Goals ROE target is seven points above the ten-year Treasury rate (risk-free rate) Ten year treasury rate was 2.69% at 12/31/18*, implying a revised ROE Target of approximately 9.7% Prior long-term return target of 12%-14% is unrealistic in the current interest rate environment Decrease in 2018 due primarily to decline in equity trading portfolio, in line with broader market performance Each line of business retains a pricing target of 13% ROE on allocated capital 2017 Return on Equity: 6.3% 2018 Return on Equity: 3.0% *https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield

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Total Return and Stock Price Reflects all stock splits and includes all dividends in the year declared. Source: SNL Scorecard at 2/15/19 Total Return CAGR Since Inception (Sep 1991) 2646% 13% Ten Year (2/15/09 – 2/15/19) 190% 11% Five Year (2/15/14 – 2/15/19) 37% 7% YTD 2019 10% Stock Price Total Return Scorecard at 2/15/19 Price Change CAGR Since Inception (Sep 1991) 1607% 11% Ten Year (2/15/09 – 2/15/19) 80% 6% Five Year (2/15/14 – 2/15/19) -6% -1% YTD 2019 10% $2.62 $4.77 $6.59 $15.74 $8.79 $16.08 $24.32 $27.46 $26.86 $39.91 $48.48 $57.05 $57.15 2/15/19: $44.63 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 17 18 52% 88% 160% 521% 236% 534% 884% 983% 959% 1484% 2012% 2987% 3270% 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 17 18 2/15/19: 2646%

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Segment Highlights Specialty P & C, March 2019

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Current Accident Year Net Loss Ratio 100.3% 93.4% 93.8% 89.9% Effect of Prior Accident Year Reserve Development (19.5%) (33.2%) (15.6%) (26.5%) Net Loss Ratio 80.8% 60.2% 78.2% 63.4% Underwriting Expense Ratio 25.2% 26.1% 22.9% 24.0% Combined Ratio 106.0% 86.3% 101.1% 87.4% Specialty P&C Financial Highlights (12/31/18) Three Months Ended Twelve Months Ended December 31 2018 2017 2018 2017 Gross Premiums Written $ 121.1 $ 121.3 $ 577.2 $ 549.3 Net Premiums Earned $ 113.4 $ 112.5 $ 491.8 $ 449.8 Total Revenues $ 115.3 $ 114.3 $ 497.6 $ 455.5 Net Losses & Loss Adjustment Expenses $ 91.7 $ 67.7 $ 384.4 $ 285.3 Underwriting, Policy Acquisition & Operating Expenses $ 28.6 $ 29.4 $ 112.4 $ 108.0 Segregated Portfolio Cell Dividend (Income)/Expense $ - $ - $ - $ 5.2 Segment Operating Result $ (4.9) $ 17.2 $ 0.8 $ 57.1 In millions, except ratios

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Total Gross Written Premiums decreased $0.2M (0.2%) from $121.3M to $121.1M Physician decrease is due to retention losses (88%) and timing differences, partially offset by new business of $4.8M Facilities increase is due to new business of $6.6M and timing differences, partially offset by retention losses (88%) Other healthcare providers slight decrease is due to retention losses (87%) largely offset by new business of $0.4M Lawyers increase is due to new business of $0.5M largely offset by retention losses (89%) Medical & life sciences products liability is down due to retention losses (77%) partially offset by new business of $0.7M and higher premium rates on renewal business Q4 2018 Specialty P&C Gross Written Premium $ in millions $15.7 $6.4 $5.0 $4.0 $7.6 $10.9 $7.2 $4.8 $3.7 $8.8 Healthcare facilities Other healthcare providers Legal professionals Tail & other professional liability Medical Technology Q4 2018 Q4 2017 $77.8 $82.2 $4.5 $3.6 $82.2 $85.9 Q4 2018 Q4 2017 Physician 12-mo Physician 24-mo Total

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Total Gross Written Premiums increased $27.9M (5.1%) from $549.3M to $577.2M Physician decrease is due to decrease in twenty-four month policies, retention losses (90%) and timing differences largely offset by new business of $19.8M Facilities increase is due to new business of $19.8M and timing differences partially offset by retention losses (87%) Other healthcare providers decrease is due to retention losses (87%) partially offset by new business of $2.5M, which includes a $1M multi-state dental policy Lawyers increase is due to new business of $2.8M largely offset by retention losses (86%) Medical & life sciences products liability is up due to new business of $3.0M and higher premium rates on renewal business, partially offset by retention losses (87%) Retroactive coverages increased as we entered into a loss portfolio transfer agreement in the second quarter of 2018, which resulted in $18.7M of one-time premium written. Additionally, tail increased due to this agreement, resulting in $7.9M of one-time premium written. YTD 2018 Specialty P&C Gross Written Premium $ in millions $352.3 $360.2 $22.2 $27.4 $ 374.5 $ 387.6 YTD 2018 YTD 2017 Physician 12-mo Physician 24-mo $65.0 $32.2 $26.2 $26.1 $18.7 $34.5 $47.7 $32.6 $25.6 $21.6 $0.0 $34.2 Healthcare facilities Other healthcare providers Legal professionals Tail & other, professional liability Retroactive Coverage Medical Technology 2018 YTD 2017 YTD

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Retention gains are holding 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 90% 90% 89% 90% 89% 89% 89% 88% 90% 90% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 91% 90% 89% 88% Q1 18 Q2 18 Q3 18 Q4 18

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Physician Liability Pricing Trend PICA excluded to facilitate accurate comparisons over time December 31, 2018 Current accident year loss ratio adjustments typically 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 2017 2018 Annual 23% 28% 28% 19% 11% 3% -2% -6% -4% -2% -2% 0% -1% 0% 0% 0% 1% 3% Cumulative 23% 57% 101% 139% 165% 173% 168% 152% 142% 137% 132% 132% 130% 131% 131% 131% 132% 135% -10% 30% 70% 110% 150%

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Annual Premium for a $1M / $3M Policy Filed or Approved at 9/30/18 Key State Rate Comparison Birmingham Indianapolis Denver Dallas St Louis Atlanta Cleveland Detroit New York, NY Miami Washington Chicago Family Practice (No Surgery) $7,484 $9,351 $11,100 $11,345 $17,960 $19,320 $20,593 $28,263 $23,216 $24,480 $24,010 $40,865 Anesthesiology 17,422 12,706 14,948 14,024 20,087 34,072 29,864 28,263 $31,703 30,422 30,402 50,621 Plastic Surgery 26,774 32,961 29,057 22,059 51,996 65,419 57,676 83,268 $68,481 54,189 83,672 118,909 General Surgery 30,515 39,351 36,752 35,452 60,505 65,419 62,311 108,020 $85,456 83,898 73,018 118,909 Orthopedic Surgery w/Spine 37,997 41,349 41,883 40,809 64,759 74,638 76,218 97,019 $91,114 83,898 99,652 157,930 Obstetrics 41,737 51,459 49,578 38,131 86,032 93,078 94,759 108,020 $113,747 119,549 147,595 177,441 $0 $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 $175,000

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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%

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Source: 2013-2017, 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 (2013-2017 / Calendar Year) ProAssurance vs. Industry Five-Year Average Loss Ratio (2013-2017) subject to rounding On average, 18 points better than the industry TOTAL LOSS RATIO Incurred Loss Adjustment Expenses as a Percentage of Premium Incurred Losses as a Percentage of Premium 10.7% 21.9% 21.6% 24.0% 32.1% 28.0% 27.3% 35.0% 36.3% 34.6% 38.7% 49.2% 56.6% 60.3% 66.7% 2013 2014 2015 2016 2017 21.6% 44.1% 31.9% 27.5% 53.5% 71.6% PRA Industry

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Source: A.M. Best Aggregates and Averages for Each Line of Business (1991-2017) ProAssurance Outperforms in Insurance Average Combined Ratio 103.8% 101.4% 99.2% 106.5% 92.4% 100.6% 87.2% 67.4% 76.6% 88.3% 70.7% 80.0% 1991-2017 10-Year 2008-2017 5-Year 2013-2017 Overall P&C Overall HCPL PRA - MPL Only PRA - All Lines

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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 - 2017 Avg Since Inception 1991-2017 10 Yr Avg 2008-2017 5 Yr Avg 2013-2017 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 17 ProAssurance HCPL HCPL P&C 87.2% 107.1% PRA HCPL 76.6% 101.9% PRA HCPL 67.4% 93.9% PRA HCPL

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Segment Strategic Review Specialty P & C, March 2019

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New Market Conditions Emerging Greater uncertainty in the market creates an environment where ProAssurance outperforms due to superior financial strength and operational expertise Perceived trends have led two commercial carriers to exit all or part of their healthcare professional liability business The state of Iowa has banned one price-focused healthcare professional liability insurer from selling new policies or renewing existing policies due to poor financial condition. Downgrades from A. M. Best on two smaller mutual companies signal growing concern over financial strength after years of 100+ combined ratios At least one larger mutual is already on a negative watch With severity a growing concern, smaller companies may have to make a choice between maintaining ratings or maintaining market share ProAssurance has achieved consistently higher pricing and strong retention as the market changes

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New Market Conditions Emerging Data Source: TransRe Unmistakable trend to higher severity evident in the broader industry Not evident in ProAssurance paid losses Prompting greater conservatism in ProAssurance reserves on larger risks where deeper pockets may have been created by consolidation Greater conservatism also translates into higher current year loss picks Four consecutive years of increases in number of $10M+ and $25M+ verdicts Higher severity has invariably led to higher frequency which contributes to a cycle turn in healthcare professional liability 11 9 8 11 5 8 13 8 7 3 6 9 11 4 7 8 13 17 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 2018 Verdicts At or Above $25 Million Exceeded the Levels of the Last Crisis 23 30 34 23 20 28 29 31 29 20 21 33 35 18 26 30 38 44 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 2018 Verdicts At or Above $10 Million Were the Highest This Century

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Mega Verdicts at Record Highs in 2018 Data Source: TransRe 0 5 10 15 20 25 30 35 40 45 50 02 04 06 08 10 12 14 16 18 $ Millions Year Largest (10 th /25 th /50 th ) Verdicts, 2001 - 2018 10th 25th 50th

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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 almost 18% of GDP on healthcare and the percentage is increasing How Healthcare Costs Will Force Changes in Our Market 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 Source: Kaiser Family Foundation analysis of National Health Expenditure (NHE) data from Centers for Medicare and Medicaid Services. Office of the Actuary. National Health Statistics Group. US Healthcare Spending as a Percent of GDP, 1970-2016 17.9% of GDP in 2016 Expected to reach ~20% of GDP by 2025

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We Are Approaching a Tipping Point Average Annual Healthcare Spending per Working Household Includes Out-of-Pocket Expenses and Insurance Premiums Median Compensation (Wages + Health Benefits) $68,600 $105,800 $149,000 Health Spending as a Percentage of Compensation 13.4% 24.4% 33.9% $9,200 $ 25,800 $50,500 2002 2016 2030 4.9% Per U.S. Office of Actuary

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How Healthcare Costs Will Force Changes in Our Market 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

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More physicians than ever are employees 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: 2018 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% 31% 35% 44% 53% 58% 49% 3% 8% 13% 9% 20% 2008 2012 2014 2016 2018 Small Group & Solo Practices Employed Physicians Other

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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) Access to international markets through Lloyd’s syndicates Partnerships such as Certitude with Ascension Health ($162 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

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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 2017 Statutory Data, >50% HCPL, Direct Written Premiums >$80 million Berkshire Hathaway (Specialty MPL Carriers Only) $1.27B $4.9B

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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

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The Certitudetm program in partnership with Ascension Health Shared risk through quota share participation by Ascension’s captive on first $1M ~1,600 insured physicians ~$31.3 mln inforce Certitude direct premium in year-ended 12/31/18 Active in AL, D.C., FL, IL, IN, KS, MD, MI, NY, OK, PA, TN, TX, and WI $41.9 mln total direct premium from Ascension-related risks in year-ended 12/31/18 CAPAssurance Partnered with California-based CAP-MPT Risk sharing by CAP through variable quota share participation on first $1 mln ~$10.6 mln of inforce gross written premium (12/31/18) 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

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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

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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

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Leveraging Existing Expertise in New Ways Syndicate 1729 at Lloyds Our 61% 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 Segregated Portfolio Cell Reinsurance Allows any organization to control their own risk High ROE product with significant retention ProAssurance Mid-Continent Underwriters Focuses on ancillary healthcare market which is exploding as care is being pushed down to lower cost providers

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Segment Highlights Workers’ Compensation, March 2019

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Workers’ Compensation Financial Highlights (12/31/18) Three Months Ended Twelve Months Ended December 31 2018 2017 2018 2017 Gross Premiums Written $ 65.0 $ 60.3 $ 293.2 $ 264.0 Net Premiums Earned $ 50.8 $ 41.1 $ 186.1 $ 163.3 Total Revenues $ 51.4 $ 41.4 $ 188.5 $ 165.4 Net Losses & Loss Adjustment Expenses $ 30.7 $ 22.7 $ 118.5 $ 102.2 Underwriting, Policy Acquisition & Operating Expenses $ 14.1 $ 13.7 $ 55.7 $ 52.6 Segment Operating Results $ 6.6 $ 5.1 $ 14.3 $ 10.6 Current Accident Year Net Loss Ratio 68.0% 66.5% 68.0% 66.1% Effect of Prior Accident Year Reserve Development (7.6%) (11.2%) (4.3%) (3.5%) Net Loss Ratio 60.4% 55.3% 63.7% 62.6% Underwriting Expense Ratio 27.8% 33.3% 29.9% 32.2% Combined Ratio 88.2% 88.6% 93.6% 94.8% In millions, except ratios

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Traditional Markets Guaranteed Cost Policies Loss-Sensitive Dividend Plans Deductible Plans Retrospective Rating Plans ParallelPay–“Pay as you Go” Eastern Specialty Risk (high hazard) TPA Services Claims Administration and Risk Management 11,067 active policies as of 12/31/2018 Broad Workers’ Compensation Product Spectrum Traditional Business $208.8 mln Gross Written Premium in 2018 (+21.8 mil / 11.7% vs 2017) Guaranteed Cost 78% Policyholder Dividend 10% Deductible Plans 4% Retrospective Rating 3% Assumed , 4% EPLI <1 %

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Eastern Alliance Insurance Group Best-in-Class Claims, Risk Management and Underwriting Business Model Broad Product Spectrum 43 State/DC Licenses – Core Operations in 19 States Select Agency Partnerships 378 Contracts / 915 Locations Workers’ Compensation Business Profile & Overview 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) New England Region Auburn, ME

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Opportunities in Workers’ Compensation $51.5 million in new business written in 2018 Traditional: $43.2 million Alternative Market: $8.3 Launched Eastern Specialty Risk in 2017 High Hazard product offering Construction, Forestry, and Transportation markets As of 12/31/2018, DWP of $8.2 million and undeveloped loss ratio of 68.5% High potential for opportunistic growth in markets outside of PA Continued growth from Great Falls renewal rights transaction $15 million of direct premiums written in 2018 12/31/18 Subject to Rounding PA 45.7% IN , 9.4% NJ , 5.4% DE 5.4% NC 4.1% ME 4.0% GA 3.9% SC 3.3% TN 2.6% NH 2.9% VA 2.4% MS 2.5% MI 2.2% LA 1.6% AL 1.4% Other 3.3% Traditional Business Premium Distribution

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Wide diversification by class code and market segment 11,067 active policies in Traditional Programs Over 600 class codes actively written in Traditional business Diversified Book of Business Top 10 Classes of Business by Payroll Exposure as of December 31, 2018 Healthcare Related Non-Healthcare Physicians & Dentists 10% Hospitals , 4% Clerical / Office 15% Colleges / Schools 12% Auto Dealers 4% Outside Sales 4% Restaurants 4% Fast Food 2% Banks 2% Auto Service Centers 2% Traditional Business

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Healthcare as a Percentage of Traditional Workers’ Compensation Writings Direct Written Premium YTD at 12/31/18 Significant Healthcare Profile - Traditional 2018 Healthcare premiums grew 2.2% vs. 2017 $ = DPW in millions Non - Healthcare 83% Healthcare 17% $35.4 $34.7 2018 2017 Healthcare Premiums

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Consistent Profitability in Workers' Comp Historical Combined Ratio Average 89% 2006 - 2018 *2018 ratios include Workers’ Compensation Insurance segment only. 79.1% 65.6% 80.2% 87.7% 96.0% 89.7% 91.8% 93.0% 96.0% 95.9% 95.5% 91.1% 93.6%* 92.7% 94.3% 93.7% 89.1% 93.1%* 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 GAAP GAAP (excluding fair value adjustments, intangible asset amortization, transaction-related and other one-time charges)

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Source: 1996-2017 A.M. Best Aggregates and Averages, Workers’ Compensation. Policyholder Dividends Included. Data is inclusive of Segregated Portfolio Cell Reinsurance results as of 12/31/2017. Eastern Outperforms in Workers’ Compensation Eastern consistently outperforms in a volatile line of business Calendar Year Combined Ratio 1996 - 2017 '96-'17 Avg 10 Yr Avg 2008-2017 5 Yr Avg 2013-2017 55% 65% 75% 85% 95% 105% 115% 125% 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Eastern Industry P&C 90.1% 106.1% Eastern WC 92.5% 97.4% Eastern WC 90.7% 104.4% Eastern WC

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Eastern’s proactive claim-closing strategies are key to being recognized as a short-tail writer of workers’ compensation No claims open from 2004 and earlier 56 net claims open from 2014 and prior Workers’ Comp Claim Closing Pattern: Traditional 12/31/2018 536 590 573 687 590 717 778 890 957 1,078 1,187 1,260 1,315 1,216 1,159 1,027 1,023 0 0 0 0 2 2 1 2 3 2 6 7 12 19 57 78 201 0 150 300 450 600 750 900 1,050 1,200 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Accident Years Closed Claims Open Claims

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Segment Strategic Review Workers’ Compensation, March 2019

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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

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Eastern Specialty Risk: Higher Risk But NOT High Risk Business Overview Focusing on the next level of risk: higher hazard but not typical “high hazard” Some classes previous written by Eastern in High Modification programs $5.2 million in direct premiums in 2017—includes $4.6 million of new business Loss trends are favorable Initial submission quantity and quality are solid, largely construction-related and regional transportation risks Business profile aligns with expected growth in payroll/premium in the US, especially in infrastructure-focused industries 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 Expected Loss Profile Loss are expected to be less frequent, but more severe, although mitigated by an excellent reinsurance structure Full support of reinsurance partners Retentions remain the same as in existing business Deepens the reinsurance relationship by providing additional rate for new exposures 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

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Segment Highlights Segregated Portfolio Cell Reinsurance, March 2019

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Segregated Portfolio Cell Program Structure Inova Re Underwriting Claims Administration Risk Management Reinsurance Tax Audit Asset Management Services + Cell Rental Expenses + Participates in profits/losses of carefully selected cells Fee Income to ProAssurance ProAssurance/Eastern participates in select cells Individually-capitalized cells (companies) exist within the Inova Re structure. Assets of each are segregated from others Agency Group or Association Establishes/Funds A Cell Services Fronting Arrangement

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Segregated Portfolio Cell Reinsurance Financial Highlights (12/31/18) Three Months Ended Twelve Months Ended December 31 2018 2017 2018 2017 Gross Premiums Written $ 16.8 $ 16.2 $ 85.1 $ 77.7 Net Premiums Earned $ 19.7 $ 17.5 $ 73.9 $ 68.2 Net Investment Income $ 0.5 $ 0.3 $ 1.6 $ 1.1 Net Realized Gains (Losses) $ (3.6) $ 1.2 $ (3.1) $ 3.9 Net Losses & Loss Adjustment Expenses $ 11.2 $ 11.1 $ 38.7 $ 37.5 Underwriting, Policy Acquisition & Operating Expenses $ 6.4 $ 5.5 $ 22.4 $ 20.7 Segregated Portfolio Cell Dividend (Income)/Expense $ (0.7) $ 1.7 $ 9.1 $ 10.6 Segment Operating Results $ (0.3) $ 0.7 $ 2.3 $ 4.5 In millions, except ratios Current Accident Year Net Loss Ratio 60.3% 75.4% 64.5% 67.4% Effect of Prior Accident Year Reserve Development (3.6%) (11.9%) (12.1%) (12.5%) Net Loss Ratio 56.7% 63.5% 52.4% 54.9% Underwriting Expense Ratio 32.3% 31.5% 30.3% 30.4% Combined Ratio 89.0% 95.0% 82.7% 85.3%

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Segregated Portfolio Cell Direct Written Premium Trends DPW in 000’s 20 year track record of growth and profitability 2018 DWP = $84.4 million Year-over-year growth of 4.8%

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Wide diversification by class code and market segment 2,699 active policies in Segregated Portfolio Cell Market Programs Over 400 actively written in Segregated Portfolio Cell Programs Segregated Portfolio Cell Diversified Book of Business Top 10 Classes of Business by Payroll Exposure as of December 31, 2018 Healthcare Related Non-Healthcare Skilled Nursing Homes , 5% Physicians & Dentists 7% Home Healthcare 3% Social Rehab Facility 2% Retirement Community 3% Clerical / Office 14% Colleges / Schools 10% Outside Sales 5% Auto Dealers 5% Restaurants 3% Alternative Markets Business

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Healthcare as a Percentage of SPCR Workers’ Compensation Writings Direct Written Premium YTD at 12/31/18 Significant Healthcare Profile – Segregated Portfolio Cell 2018 Healthcare premiums grew 6.9% vs. 2017 $ = DPW in millions Non - Healthcare 68% Healthcare 32% $27 $25 2018 2017 Healthcare Premiums

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Claim Closing Pattern: Segregated Portfolio Cells 12/31/2018 Eastern’s proactive claim-closing strategies are key to being recognized as a short-tail writer of workers’ compensation No claims open from 2009 and earlier 29 net claims open from 2015 and prior 103 175 267 407 422 310 326 336 385 405 503 500 574 627 658 658 626 0 0 0 0 0 0 0 0 0 1 1 1 0 9 17 35 121 0 100 200 300 400 500 600 700 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Accident Years Closed Claims Open Claims

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Segment Strategic Review Segregated Portfolio Cell Reinsurance, March 2019

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Strategy Update: How The SPC Segment Differentiates Captive insurance solutions provided through Inova Re Value-added risk management services and claims/underwriting expertise 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

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How Segregated Portfolio Cells Benefit ProAssurance Alternative market solutions are in high demand Fast growing sector of the Property and Casualty marketplace Segregated Portfolio Cells are a high ROE product with significant retention Low capital requirement by not assuming risk Fee-based revenue diversifies earnings that are largely based on underwriting Jointly-owned SPC’s Inova brand launched in Q1 of 2014 Unique product offering differentiates Eastern & ProAssurance HCPL / 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

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How Segregated Portfolio Cells Benefit Insureds Highly rated paper Stable Off-Shore Facility Over 30 years in operation (since 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 Opportunities to Participate in Profit Dedicated Service Team Account management, underwriting, claims, risk management, marketing, accounting, premium audit

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Advantages of the Cayman Islands Domicile Second Largest captive domicile in the world Largest healthcare captive domicile in the world 90% of business from North America Healthcare captives represent 32% of all captives Medical professional liability is the largest primary line followed by workers’ compensation $14.2 billion in premium written $68.7 billion in total assets under management CIMA: Cayman Islands Monetary Authority Strong regulatory structure SPC Legislation

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Segment Highlights Lloyd’s of London, March 2019

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Lloyd’s Segment Financial Highlights (12/31/18) Three Months Ended Twelve Months Ended December 31 2018 2017 2018 2017 Gross Premiums Written $ 25.8 $ 13.2 $ 88.7 $ 70.2 Net Premiums Earned $ 18.1 $ 11.8 $ 67.0 $ 57.2 Total Revenues $ 19.1 $ 12.5 $ 70.3 $ 57.6 Net Losses & Loss Adjustment Expenses $ 20.5 $ 3.5 $ 51.6 $ 44.2 Underwriting, Policy Acquisition & Operating Expenses $ 7.9 $ 7.2 $ 31.7 $ 27.0 Operating Result $ (9.5) $ 1.9 $ (12.7) $ (13.0) Current Accident Year Net Loss Ratio 104.5% 31.6% 74.0% 78.7% Effect of Prior Accident Year Reserve Development 9.3% (2.0)% 2.9% (1.4%) Net Loss Ratio 113.8% 29.6% 76.9% 77.3% Underwriting Expense Ratio 44.0% 60.7% 47.3% 47.1% In millions, except ratios

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Syndicate 1729 2019 maximum underwriting capacity: $163.3 million ProAssurance’s 62% share is $99.5 million Syndicate 6131 2018 underwriting capacity: $15.3 million ProAssurance is the 100% capital provider Lloyd’s Syndicates Business Detail* *$ in millions and based on exchange rates at 12/31/2018 Broad spread of risk Property is primarily US Property Insurance (Mainly US) 16% Casualty (US) 21% Catastrophe Reinsurance - XS of Loss (non US) 2% Catastrophe Reinsurance - XS of Loss (US) 30% Facility (US) 14% General Liability (US) 7% All Other Reinsurance (Mainly US) 4% Specialty (all other) 6%

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Segment Investment Thesis & Strategic Review Lloyd’s of London, March 2019

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Why Lloyd’s? Our Investment Thesis Universal distribution & licensure Particularly appealing to Medmarc with Medical Technology & Life Sciences developing and testing expands globally Westernization of international healthcare professional liability Many countries are moving towards a contingency fee tort system ProAssurance’s expertise is adaptable Opportunity to invest alongside a recognized leader in Duncan Dale Visibility into potential international expansion through investment or M&A

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The Future of Our Lloyd’s Investment Review of strategic options Improve profitability Reduce volatility Assess capital use and degree of participation Operational goals Refining the book of business to move beyond 2017 and 2018 significant CAT losses Mitigating risk through reinsurance Remaining disciplined and focused on core products Trimming away lower margin business Maintaining vigilance on expenses Little or no exposure to Brexit and related issues Few UK risks written

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Investment Strategy & Detailed Holdings March 2019

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Investment Strategy and 2019 Outlook Duration management remains paramount We will not extend duration in search of incremental yield Optimizing our allocations for better risk-adjusted returns Ensures non-correlation of returns Effective stewardship of capital ensures a position of financial strength through turbulent market cycles Ongoing analysis of holdings to ensure lasting quality and profitability Portfolio outperformance of 0.99% YTD 2018

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2018 Net Investment Result (12/31/18) 12/31/2018 12/31/2017 Change Net Investment Income Fixed maturities $ 64,523 $ 72,665 $ (8,142 ) Equities 21,418 17,198 4,220 Short-term investments including Other 5,351 7,643 (2,292) BOLI 1,983 1,979 4 Investment fees and expenses (6,315 ) (6,618 ) 303 Net investment income $ 86,960 $ 92,867 $ (5,907 ) Equity in Earnings (Loss) of Unconsolidated Subsidiaries All other investments, primarily investment fund LPs/LLCs $ 33,270 $ 28,685 $ 4,585 Tax credit partnerships (24,322 ) (20,652 ) (3,670 ) Equity in earnings (loss) $ 8,948 $ 8,033 $ 915 Net investment result $ 95,908 $ 100,900 $ (4,992) $ in thousands Fixed income is down due to ~16% lower average balances primarily due to sale of municipals Income yield is 3.3% (3.4% tax equivalent) for 2018 and 3.1% (3.5% tax equivalent) for 2017 Excludes Lloyd’s Syndicates investment income of $3.4M for 2018 and $1.7M for 2017, and Segregated Portfolio Cells Reinsurance income of $1.6 million for 2018 and $1.1 million for 2017. Excluding Capital Gains / (Losses)

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ProAssurance Recent Investment Performance As of December 31, 2018. Management reporting item which is ‘tax equivalent,’ unaudited, and non GIPS, may not equal 100% due to rounding Contribution to Returns 2014-2018 / PRA vs Benchmarks 2018 2017 2016 2015 2014 % of Assets PRA Benchmark % of Assets PRA Benchmark % of Assets PRA Benchmark % of Assets PRA Benchmark % of Assets PRA Benchmark Core Fixed 67% 1.08% 0.75% 72% 2.33% 2.24% 72% 1.95% 1.32% 73% 1.86% 1.58% 72% 3.24% 3.04% Alternative Fixed 12% 0.09% 0.02% 11% 0.58% 0.46% 8% 0.93% 0.59% 6% -0.19% -0.14% 7% 0.25% 0.19% Tax Credits 3% 0.16% 0.03% 3% 0.09% 0.09% 4% 0.45% 0.45% 4% 0.56% 0.56% 4% 0.45% 0.45% Private Equity 3% 0.55% 0.48% 3% 0.59% 0.59% 3% 0.33% 0.33% 2% 0.07% 0.07% 1% 0.31% 0.31% Equity 9% -0.50% -0.65% 9% 0.96% 1.01% 9% 1.36% 1.13% 8% -0.15% -0.62% 9% 0.72% 0.85% Real Estate 1% 0.19% 0.09% 1% 0.07% 0.07% 1% 0.08% 0.09% 1% 0.09% 0.08% 1% 0.05% 0.04% Other 5% 0.08% -0.07% 1% 0.31% 0.25% 3% 0.03% 0.03% 6% -0.01% -0.01% 7% 0.00% 0.00% Total 1.64% 0.65% 4.95% 4.72% 5.13% 3.95% 2.23% 1.53% 5.02% 4.88% Total Portfolio Outperformance 0.99% 0.23% 1.18% 0.70% 0.14% 0% 2% 4% 6% 2018 2017 2016 2015 2014 PRA Performance Over Benchmark PRA Benchmark

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12/31/18 Full portfolio disclosure on our website: investor.proassurance.com/CustomPage/Index?KeyGenPage=305596 ProAssurance Investment Profile $2.1 Billion Fixed Income Portfolio (64% of Invested Assets) $3.3 Billion Overall Portfolio Sources of Liquidity Average duration: 3.0 years Average tax-equivalent income yield: 3.4% Investment grade: 94% Weighted average: A+ State & Muni 14% Corporate 57% Fixed - Trading 2% Asset Backed 20% Govt & Agency 7% Short Term (excluding cash) 9% Equities & Equity Substitutes 25% BOLI 2% Fixed Income 64% MONTHS (Negotiated) LPs (Secondary Liquidity) 8% 30 - 90 DAYS HFs/Privates 6% NOT LIQUID Statutory Deposits 1% SIX MONTHS BOLI 2% DAILY Cash Equities Bonds 83%

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ProAssurance Portfolio Detail: Corporate Corporates: $1.2 Billion (58% of Fixed Assets / 37% of Invested Assets) Top 20 Banks/Financials: $223 million in millions Citi $21 Simon Properties $8 J.P. Morgan $20 MUFG $8 Goldman Sachs $19 Barclays $7 Bank of America $16 Huntington Bank $7 Wells Fargo $16 Berkshire Hath $7 Morgan Stanley $14 Athene $7 American Express $13 BONY $6 PNC $12 NRUC $6 US Bank $12 Regions $6 Doctor’s Co $12 Key Banc $6 Weighted Average Rating: A- 12/31/18 Utilities & Energy 11% Other 8% Basic Materials 1% Technology 4% Communications 6% Consumer Oriented 22% Financials 39% Industrials 10%

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12/31/18 ProAssurance Portfolio Detail: Asset Backed Weighted Average Rating: “AAA” $421 Million (20% of Fixed Income / 13% of Invested Assets) RMBS 43% Other (Primarily Auto & Credit Card) 46% CMBS , 11%

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12/31/18 ProAssurance Portfolio Detail: Fixed-Trading Weighted Average Rating: “AA” $38 Million (2% of Fixed Income / 1% of Invested Assets) Represents securities held in Syndicate 1729 ABS & Other 5% Consumer Oriented 2% Financial 18% Government 57% Industrial 11% Technology 5% Utilities 2%

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12/31/18 ProAssurance Portfolio Detail: Municipals Municipals: $294 Million (14% of Fixed Income / 9% Invested Assets) Weighted Average Rating: AA Top 10 Municipal Holdings in millions North Carolina State Capital Improvement $10 New York State Urban Development $10 New York, NY $9 Connecticut State Housing $7 Omaha Public Power $7 Utah State $7 Oregon State $7 Iowa State University Student Loan $6 New York City Transitional $6 NY St Dorm Authority $6 General Obligation 17% Prerefunded 11% Special Revenue 72%

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12/31/18 Subject to Rounding ProAssurance Portfolio: Equities & Other Equities & Other: $845 Million (25% of Invested Assets) Common Equities 24% Private Equity 14% Hedge Funds 8% BDC Stocks 4% Private Credit/Structured Credit 9% Real Estate LP 5% MLPs 4% Convertible Bonds 3% Bond Funds 16% Inflation Focused Bond Fund 5% Tax Credits 8%

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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 $ (20,651,723) $ 23,133,259 $ (30,361,364) $ 9,709,641 2018 $ 151,992 $ (25,437,545) $ 21,527,585 $ (26,973,557) $ 1,536,013 2019 $ 150,596 $ (20,613,346) $ 18,304,095 $ (22,632,900) $ 2,019,554 2020 $ 136,251 $ (20,689,015) $ 17,476,574 $ (21,821,267) $ 1,132,251 2021 $ 120,658 $ (15,618,414) $ 13,294,107 $ (16,573,975) $ 955,561 2022 $ 311,047 $ (8,316,265) $ 4,806,959 $ (6,553,376) $ (1,762,890) 2023 $ 51,338 $ (3,323,989) $ 170,496 $ (868,534) $ (2,455,455) 2024 $ 51,338 $ (1,080,964) $ 29,471 $ (256,473) $ (824,491) 2025 $ 41,159 $ (150,287) $ 22,111 $ (53,670) $ (96,616) 2026 $ 25,734 $ (61,897) $ 3,054 $ (16,053) $ (45,844) 2027 $ - $ - $ 79 $ (79) $ 79 2028 $ - $ - $ - $ - $ - $ 14,146,702 $ (140,760,659) $ 126,316,948 $ (162,346,430) $ 21,585,771

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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 Non-GAAP operating income, a Non-GAAP financial measure that is widely used to evaluate performance within the insurance sector. In calculating Non-GAAP 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 Non-GAAP 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

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