ProAssurance sees Q3 boost from recent acquisitions

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Related Companies Georgia Lawyers Insurance Co. Mid-Continent General Agency ProAssurance Corp. (PRA)

Related Documents Earnings Release (ER) ProAssurance Corp. 9/30/2009, filed on 11/2/2009

Related Articles 11/2/2009 ProAssurance sees Q3 operating income climb YOY

Related Deals ProAssurance Corporation/Georgia Lawyers Insurance Company ProAssurance Corporation/PICA Group ProAssurance Corporation/Mid-Continent General Agency, Inc.

ProAssurance Corp. has added significant new premium as a result of acquisitions it completed earlier in the year, CFO Edward Rand Jr. told analysts Nov. 3.

PICA Group, which writes about half its yearly premium in the third quarter, contributed $43 million of new premium to ProAssurance in the third quarter, Rand said on the company's third-quarter earnings conference call.

Mid-Continent General Agency Inc. and Georgia Lawyers Insurance Co. contributed $5 million in the period, the CFO added.

"Very simply, this was another superb quarter," said Chairman and CEO W. Stancil Starnes.

Rand said the company has $116 million left in its share repurchase authorization. "We will be buying all we can when our stock is at or below book value and purchasing appropriate amounts above book value," he said.

ProAssurance continues to evaluate the best use of its capital, Rand said. "The primary challenge is simply lower returns on the new money we're investing," the CFO said. "But we believe the ability to access the capital markets, should we need to do so, is improving."

Loss trends continue at moderate levels, said Howard Friedman, chief underwriting officer and chief actuary.

While the company is prepared for a return to higher frequency, Friedman said, "we don't see anything on the horizon that portends a major shift in loss trends."

In response to an analyst's question about growth strategy, Starnes pointed to the state-to-state nature of the business. "Literally, you have 50 different businesses," he said.

"The growth strategy will vary from state to state," Starnes said. "Part of our growth strategy will be continued activities in the M&A world."

In certain states, there will be opportunities for organic growth, the CEO added. "It's really not realistic to say we have one overarching growth strategy."