PROASSURANCE CORPPRA
PROASSURANCE CORP Segments Disclosure
Segment Information
ProAssurance's segments are based on the Company's internal management reporting structure for which financial results are regularly evaluated by the Company's CODM, its Chief Executive Officer, to determine resource allocation and assess operating performance. The Company continually assesses its internal management reporting structure and information evaluated by its CODM to determine whether any changes have occurred that would impact its segment reporting structure.
Segment Reorganization
During the first quarter of 2025, ProAssurance altered its internal management reporting structure and the financial results evaluated by its CODM; therefore, ProAssurance changed the composition of its operating and reportable segments to align with how the CODM currently oversees the business, allocates resources and evaluates operating performance. As a result, ProAssurance now reports the financial results of its subsidiary IAO, Inc. d/b/a ProAssurance Agency in the Specialty P&C segment which were previously reported in the Corporate segment. All prior period segment information has been recast to conform to the current period presentation. The change in presentation had no impact on previously reported consolidated financial results.
The Company operates in four segments: Specialty P&C, Workers' Compensation Insurance, Segregated Portfolio Cell Reinsurance and Corporate. A description of each of ProAssurance's four operating and reportable segments follows.
•Specialty P&C focuses on medical professional liability insurance and medical technology liability insurance. Medical professional liability insurance is primarily comprised of medical professional liability products offered to healthcare providers and institutions. Medical technology liability insurance is offered to medical technology and life sciences companies that manufacture or distribute products including entities conducting human clinical trials. In addition, the Company also offers custom alternative risk solutions including assumed reinsurance and captive cell programs for medical professional liability insureds. For the alternative market captive cell programs, the Specialty P&C segment cedes either all or a portion of the premium to certain SPCs in the Company's Segregated Portfolio Cell Reinsurance segment. The Specialty P&C segment also includes the underwriting results from its Lloyd's Syndicates business and its legal professional book of business, both of which are currently in run off, as well as non-premium revenues generated by the Company's subsidiary IAO, Inc. d/b/a ProAssurance Agency. Effective September 2023,
ProAssurance elected to discontinue its participation in the results of Syndicate 1729 beginning with the 2024 underwriting year which, due to the quarter lag, was not reflected in its results until the second quarter of 2024.
•Workers' Compensation Insurance includes workers' compensation insurance products which are provided primarily to employers with 1,000 or fewer employees. The segment's products include guaranteed cost policies, policyholder dividend policies, retrospectively-rated policies, deductible policies and alternative market solutions. Alternative market program premiums include program design, fronting, claims administration, risk management, SPC rental, asset management and SPC management services. Alternative market program premiums are 100% ceded to either SPCs in the Company's Segregated Portfolio Cell Reinsurance segment or captive insurers unaffiliated with ProAssurance for two programs.
•Segregated Portfolio Cell Reinsurance includes the results (underwriting profit or loss, plus investment results, net of U.S. federal income taxes) of SPCs at Inova Re and Eastern Re, the Company's Cayman Islands SPC operations. Each SPC is owned, fully or in part, by an individual company, agency, group or association, and the results of the SPCs are attributable to the participants of that cell. ProAssurance participates to a varying degree in the results of selected SPCs. SPC results attributable to external cell participants are reported as an SPC dividend expense (income) in the Segregated Portfolio Cell Reinsurance segment and in ProAssurance's Consolidated Statements of Income and Comprehensive Income. In addition, the Segregated Portfolio Cell Reinsurance segment includes the investment results of the SPCs as the investments are solely for the benefit of the cell participants, and investment results attributable to external cell participants are reflected in SPC dividend expense (income). The SPCs assume workers' compensation insurance, medical professional liability insurance or a combination of the two from the Company's Workers' Compensation Insurance and Specialty P&C segments.
•Corporate includes ProAssurance's investment operations excluding those reported in the Company's Segregated Portfolio Cell Reinsurance segment. In addition, this segment includes corporate expenses, interest expense, U.S. and U.K. income taxes and foreign currency exchange rate gains and losses.
The accounting policies of the segments are described in Note 1. The CODM evaluates the performance of the Specialty P&C and Workers' Compensation Insurance segments based on before tax underwriting profit or loss. The CODM also evaluates the Specialty P&C and Workers' Compensation Insurance segment's net loss and underwriting expense ratios in assessing each segment's financial performance. The net loss ratio is calculated as the segment's net losses and loss adjustment expenses incurred divided by net premiums earned. The underwriting expense ratio is calculated as the segment's underwriting, policy acquisition and operating expenses incurred divided by net premiums earned. The CODM evaluates the performance of the Segregated Portfolio Cell Reinsurance segment based on operating profit or loss, which includes investment results of investment assets solely allocated to SPC operations, net of U.S. federal income taxes. Performance of the Corporate segment is evaluated by the CODM based on its contribution to consolidated after-tax results. The CODM also evaluates the contribution of the Corporate segment to the consolidated underwriting expense ratio (Corporate operating expenses divided by consolidated net premiums earned) in assessing the segment's financial performance. ProAssurance accounts for inter-segment transactions as if the transactions were to third parties at current market prices. Assets are not allocated to segments because investments, other than the investments discussed above that are solely allocated to the Segregated Portfolio Cell Reinsurance segment, and other assets are not managed at the segment level.
The tabular information that follows shows the financial results of the Company's reportable segments reconciled to results reflected in the Consolidated Statements of Income and Comprehensive Income. The CODM does not consider goodwill or intangible asset impairments, changes in the fair value of contingent consideration or transaction-related costs for proposed or completed business combinations, including any related tax impacts, in assessing the financial performance of its operating and reportable segments, and thus are included in the reconciliation of segment results to consolidated results.
Financial results by segment were as follows:
| Year Ended December 31, 2025 | |||||||||||||||||||||||||||||||||||
| (In thousands) | Specialty P&C | Workers' Compensation Insurance | Segregated Portfolio Cell Reinsurance | Corporate | Inter-segment Eliminations | Consolidated | |||||||||||||||||||||||||||||
| Net premiums earned | $ | 724,198 | $ | 164,351 | $ | 45,687 | $ | — | $ | — | $ | 934,236 | |||||||||||||||||||||||
| Net investment income | — | — | 3,864 | 152,634 | — | 156,498 | |||||||||||||||||||||||||||||
| Equity in earnings (loss) of unconsolidated subsidiaries | — | — | — | 16,276 | — | 16,276 | |||||||||||||||||||||||||||||
| Net investment gains (losses) | — | — | 2,259 | (7,745) | — | (5,486) | |||||||||||||||||||||||||||||
Other income (expense)(1) | 6,321 | 2,056 | 25 | (10,813) | (1,085) | (3,496) | |||||||||||||||||||||||||||||
Net losses and loss adjustment expenses(2) | (519,375) | (123,795) | (22,248) | — | — | (665,418) | |||||||||||||||||||||||||||||
Operating expenses(1)(2)(3) | (102,612) | (43,109) | (1,796) | (35,292) | 61 | (182,748) | |||||||||||||||||||||||||||||
Deferred policy acquisition costs amortization(2) | (97,824) | (20,186) | (14,332) | — | 1,024 | (131,318) | |||||||||||||||||||||||||||||
SPC U.S. federal income tax benefit (expense)(4) | — | — | (2,413) | — | — | (2,413) | |||||||||||||||||||||||||||||
| SPC dividend (expense) income | — | — | (6,873) | — | — | (6,873) | |||||||||||||||||||||||||||||
| Interest expense | — | — | — | (20,838) | — | (20,838) | |||||||||||||||||||||||||||||
| Income tax benefit (expense) | — | — | — | (22,229) | — | (22,229) | |||||||||||||||||||||||||||||
| Segment results | $ | 10,708 | $ | (20,683) | $ | 4,173 | $ | 71,993 | $ | — | 66,191 | ||||||||||||||||||||||||
| Reconciliation of segments to consolidated results: | |||||||||||||||||||||||||||||||||||
Transaction-related costs, net(5) | (15,276) | ||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 50,915 | |||||||||||||||||||||||||||||||||
| Significant non-cash items: | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization, net of accretion | $ | 8,020 | $ | 5,056 | $ | (2,100) | $ | 2,713 | $ | — | $ | 13,689 | |||||||||||||||||||||||
| Year Ended December 31, 2024 | |||||||||||||||||||||||||||||||||||
| (In thousands) | Specialty P&C | Workers' Compensation Insurance | Segregated Portfolio Cell Reinsurance | Corporate | Inter-segment Eliminations | Consolidated | |||||||||||||||||||||||||||||
| Net premiums earned | $ | 747,942 | $ | 167,610 | $ | 52,698 | $ | — | $ | — | $ | 968,250 | |||||||||||||||||||||||
| Net investment income | — | — | 3,608 | 140,930 | — | 144,538 | |||||||||||||||||||||||||||||
| Equity in earnings (loss) of unconsolidated subsidiaries | — | — | — | 22,203 | — | 22,203 | |||||||||||||||||||||||||||||
| Net investment gains (losses) | — | — | 2,369 | (7,206) | — | (4,837) | |||||||||||||||||||||||||||||
Other income (expense)(1) | 6,588 | 1,887 | 19 | 6,820 | (1,804) | 13,510 | |||||||||||||||||||||||||||||
Net losses and loss adjustment expenses(2) | (578,486) | (128,483) | (32,466) | — | — | (739,435) | |||||||||||||||||||||||||||||
Operating expenses(1)(2)(3) | (102,017) | (43,875) | (1,709) | (36,619) | 631 | (183,589) | |||||||||||||||||||||||||||||
Deferred policy acquisition costs amortization(2) | (102,125) | (18,124) | (16,354) | — | 1,173 | (135,430) | |||||||||||||||||||||||||||||
SPC U.S. federal income tax benefit (expense)(4) | — | — | (1,766) | — | — | (1,766) | |||||||||||||||||||||||||||||
| SPC dividend (expense) income | — | — | (4,444) | — | — | (4,444) | |||||||||||||||||||||||||||||
| Interest expense | — | — | — | (22,342) | — | (22,342) | |||||||||||||||||||||||||||||
| Income tax benefit (expense) | — | — | — | (10,401) | — | (10,401) | |||||||||||||||||||||||||||||
| Segment results | $ | (28,098) | $ | (20,985) | $ | 1,955 | $ | 93,385 | $ | — | 46,257 | ||||||||||||||||||||||||
| Reconciliation of segments to consolidated results: | |||||||||||||||||||||||||||||||||||
Transaction-related costs(5) | (253) | ||||||||||||||||||||||||||||||||||
Contingent consideration(6) | 6,740 | ||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 52,744 | |||||||||||||||||||||||||||||||||
| Significant non-cash items: | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization, net of accretion | $ | 8,919 | $ | 5,020 | $ | (2,129) | $ | 5,941 | $ | — | $ | 17,751 | |||||||||||||||||||||||
| Year Ended December 31, 2023 | |||||||||||||||||||||||||||||||||||
| (In thousands) | Specialty P&C | Workers' Compensation Insurance | Segregated Portfolio Cell Reinsurance | Corporate | Inter-segment Eliminations | Consolidated | |||||||||||||||||||||||||||||
| Net premiums earned | $ | 755,817 | $ | 160,034 | $ | 61,546 | $ | — | $ | — | $ | 977,397 | |||||||||||||||||||||||
| Net investment income | — | — | 2,289 | 126,130 | — | 128,419 | |||||||||||||||||||||||||||||
| Equity in earnings (loss) of unconsolidated subsidiaries | — | — | — | 6,791 | — | 6,791 | |||||||||||||||||||||||||||||
| Net investment gains (losses) | — | — | 3,680 | 5,148 | — | 8,828 | |||||||||||||||||||||||||||||
Other income (expense)(1) | 6,433 | 1,854 | 5 | 3,961 | (1,476) | 10,777 | |||||||||||||||||||||||||||||
Net losses and loss adjustment expenses(2) | (624,809) | (139,322) | (36,363) | — | — | (800,494) | |||||||||||||||||||||||||||||
Operating expenses(1)(2)(3) | (94,284) | (39,860) | (2,086) | (30,727) | 1,026 | (165,931) | |||||||||||||||||||||||||||||
Deferred policy acquisition costs amortization(2) | (101,691) | (15,201) | (18,371) | — | 450 | (134,813) | |||||||||||||||||||||||||||||
SPC U.S. federal income tax benefit (expense)(4) | — | — | (1,629) | — | — | (1,629) | |||||||||||||||||||||||||||||
| SPC dividend (expense) income | — | — | (6,234) | — | — | (6,234) | |||||||||||||||||||||||||||||
| Interest expense | — | — | — | (23,150) | — | (23,150) | |||||||||||||||||||||||||||||
| Income tax benefit (expense) | — | — | — | 545 | — | 545 | |||||||||||||||||||||||||||||
| Segment results | $ | (58,534) | $ | (32,495) | $ | 2,837 | $ | 88,698 | $ | — | 506 | ||||||||||||||||||||||||
| Reconciliation of segments to consolidated results: | |||||||||||||||||||||||||||||||||||
Contingent consideration(6) | 5,000 | ||||||||||||||||||||||||||||||||||
Goodwill impairment | (44,110) | ||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (38,604) | |||||||||||||||||||||||||||||||||
| Significant non-cash items: | |||||||||||||||||||||||||||||||||||
Goodwill impairment | $ | 44,110 | |||||||||||||||||||||||||||||||||
| Depreciation and amortization, net of accretion | $ | 10,581 | $ | 3,424 | $ | (436) | $ | 12,446 | $ | — | $ | 26,015 | |||||||||||||||||||||||
(1) Includes certain fees for services provided by the Workers' Compensation Insurance segment to the SPCs at Inova Re and Eastern Re which are recorded as expenses within the Segregated Portfolio Cell Reinsurance segment and as other income within the Workers' Compensation Insurance segment. These fees are primarily SPC rental fees and are eliminated between segments in consolidation. | |||||||||||||||||||||||||||||||||||
(2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. | |||||||||||||||||||||||||||||||||||
(3) Primarily includes compensation-related costs, professional fees, software and equipment costs and management fees in the Specialty P&C, Workers' Compensation Insurance and Corporate segments. Operating expenses in the Segregated Portfolio Cell Reinsurance segment primarily include bank fees, professional fees, changes in the allowance for expected credit losses and policyholder dividend expense. The remaining operating expenses were comprised of individually insignificant components. | |||||||||||||||||||||||||||||||||||
(4) Represents the provision for U.S. federal income taxes for SPCs at Inova Re, which have elected to be taxed as a U.S. corporation under Section 953(d) of the Internal Revenue Code. U.S. federal income taxes are included in the total SPC net results and are paid by the individual SPCs. | |||||||||||||||||||||||||||||||||||
(5) Represents the transaction-related costs, after-tax, associated with the proposed merger transaction between ProAssurance and The Doctors Company for the year ended December 31, 2025 and actuarial consulting fees paid during 2024 in connection with the final determination of contingent consideration associated with the acquisition of NORCAL. For the year ended December 31, 2025, pre-tax transaction-related costs of approximately $16.4 million were included as a component of consolidated operating expenses as compared to $0.3 million for 2024. The associated income tax benefit was approximately $1.1 million for the year ended December 31, 2025 and was included as a component of consolidated income tax benefit (expense) on the Consolidated Statements of Income and Comprehensive Income as compared to a nominal amount for 2024. | |||||||||||||||||||||||||||||||||||
(6) Represents the change in the fair value of contingent consideration issued in connection with the NORCAL acquisition and the reversal of a nominal amount of associated contingent investment banker fees accrued during purchase accounting, all of which were included as a component of consolidated net investment gains (losses) on the Consolidated Statements of Income and Comprehensive Income. See further discussion on the contingent consideration in Note 1. | |||||||||||||||||||||||||||||||||||
The following table provides detailed information regarding ProAssurance's gross premiums earned by product as well as a reconciliation to net premiums earned. All gross premiums earned are from external customers except as noted. ProAssurance's insured risks are primarily within the U.S.
| Year Ended December 31 | ||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Specialty P&C Segment | ||||||||||||||||||||
| Gross premiums earned: | ||||||||||||||||||||
MPL | $ | 732,048 | $ | 738,422 | $ | 738,496 | ||||||||||||||
| Medical Technology Liability | 42,936 | 44,432 | 43,387 | |||||||||||||||||
Lloyd's Syndicates | 2,131 | 13,875 | 19,310 | |||||||||||||||||
| Other | 15,638 | 22,022 | 25,714 | |||||||||||||||||
| Ceded premiums earned | (68,555) | (70,809) | (71,090) | |||||||||||||||||
| Segment net premiums earned | 724,198 | 747,942 | 755,817 | |||||||||||||||||
| Workers' Compensation Insurance Segment | ||||||||||||||||||||
| Gross premiums earned: | ||||||||||||||||||||
| Traditional business | 178,077 | 183,520 | 174,743 | |||||||||||||||||
| Alternative market business | 56,779 | 64,225 | 70,130 | |||||||||||||||||
| Ceded premiums earned | (70,505) | (80,135) | (84,839) | |||||||||||||||||
| Segment net premiums earned | 164,351 | 167,610 | 160,034 | |||||||||||||||||
| Segregated Portfolio Cell Reinsurance Segment | ||||||||||||||||||||
| Gross premiums earned: | ||||||||||||||||||||
Workers' compensation(1) | 50,389 | 58,419 | 65,001 | |||||||||||||||||
MPL(2) | 2,727 | 2,540 | 5,705 | |||||||||||||||||
| Ceded premiums earned | (7,429) | (8,261) | (9,160) | |||||||||||||||||
| Segment net premiums earned | 45,687 | 52,698 | 61,546 | |||||||||||||||||
| Consolidated net premiums earned | $ | 934,236 | $ | 968,250 | $ | 977,397 | ||||||||||||||
(1) Premium for all periods is assumed from the Workers' Compensation Insurance segment.
(2) Premium for all periods is assumed from the Specialty P&C segment.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 21, 2018 | |
| 2016 | Feb 23, 2017 | |
| 2015 | Feb 23, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.