ProAssurance (PRA) Prelim. Q3 EPS Tops Views

ProAssurance Corporation (NYSE: PRA) announced preliminary per share results for the third quarter of 2016. We expect to report net income of between $0.61 and $0.65 per diluted share and operating earnings of between $0.43 and $0.47 per diluted share when we release final third quarter results on November 2, 2016. We believe gross premiums written in the quarter will be approximately $230 million and net earned premium for the quarter will be approximately $185 million. We expect our consolidated combined ratio to be in a range between 92% and 94% for the quarter.

*** The Street sees Q3 EPS of $0.60.

Our current year insurance operations continue to produce results in line with prior quarters. We anticipate favorable loss development will be in the range of $28.5 million to $30.0 million.

Our investment in unconsolidated subsidiaries will report a loss expected to be in the range of $3.2 to $3.4 million, primarily due to the accelerated recognition of our estimate of partnership operating losses related to our tax credit investments.

Our Workers' Compensation subsidiary paid $1.3 million in assessments based on prior period loss severity primarily in two southeastern states, which represents an increase of $700,000 over the same period last year.

Additionally, we expect our Lloyd's segment to report a pre-tax operating loss of between $1.7 and $1.9 million in the quarter. These results are reported on a one-quarter lag and are unrelated to recent storms.

ProAssurance Chairman and Chief Executive Officer W. Stancil Starnes noted, "Given the long tailed nature of the business we write and the inherent uncertainties of ultimate reserve development, we do not forecast earnings on a quarterly basis. However, we recognize that our expected operating results will not reach the projections of some in the investment community. Those projections necessarily include estimates that are difficult to predict with any precision on a quarterly basis, which is why we take such a long-term view of our business. We see nothing in these events to suggest that there are fundamental issues with our business. ProAssurance remains solidly profitable and our long-term strategy continues to allow us to both retain existing business and write new business in a rapidly evolving healthcare delivery environment. We remain confident in the future of our business."

Announcement of Final Third Quarter Results and Conference Call Information

ProAssurance will release final third quarter 2016 results, as previously announced, after the close of normal New York Stock Exchange trading on Wednesday, November 2, 2016. Management will be discussing the results and the Company's strategic direction during a conference call at 10:00 AM ET on Thursday, November 3, 2016 to discuss the results, and other items of interest to investors participating in the call. Investors are invited to participate by phone by dialing 888-349-0134 (toll free) or 412-317-5145. The conference call will also be webcast through the Investor Relations section of ProAssurance.com.

A telephone replay of the call will be available through December 3, 2016 at (877) 344-7529 (toll free) or (412) 317-0088, using access code 10094092. A replay will be available on the internet through November 19, 2016 at ProAssurance.com. ProAssurance will make a podcast of the call available on its website and on iTunes.

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