v3.26.1
Segment Information
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
Segment Information 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 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.
The Company operates in four segments: Specialty P&C, Workers' Compensation Insurance, Segregated Portfolio Cell Reinsurance and Corporate. Additional information regarding ProAssurance's segments is included in Note 15 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2025 report on Form 10-K. A description of each of ProAssurance's four operating and reportable segments follows.
•Specialty P&C includes medical professional liability insurance and medical technology liability insurance. 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.
•Workers' Compensation Insurance includes workers' compensation insurance products which are provided primarily to employers with 1,000 or fewer employees.
•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.
•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 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2025 report on Form 10-K. 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 Condensed 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:
Three Months Ended March 31, 2026
(In thousands)Specialty P&CWorkers' Compensation InsuranceSegregated Portfolio Cell Reinsurance CorporateInter-segment EliminationsConsolidated
Net premiums earned
$172,081 $40,665 $10,759 $— $— $223,505 
Net investment income
— — 961 39,011 — 39,972 
Equity in earnings (loss) of unconsolidated subsidiaries
— — — 2,938 — 2,938 
Net investment gains (losses)— — (569)(2,856)— (3,425)
Other income (expense)(1)
915 362 1 (1,046)(588)(356)
Net losses and loss adjustment expenses(2)
(137,586)(31,309)(5,299)— — (174,194)
Operating expenses(1)(2)(3)
(20,425)(10,725)(363)(8,337)336 (39,514)
Deferred policy acquisition costs amortization(2)
(24,115)(4,351)(3,378)— 252 (31,592)
SPC U.S. federal income tax benefit (expense)(4)
— — (549)— — (549)
SPC dividend (expense) income
— — (1,079)— — (1,079)
Interest expense
— — — (5,090)— (5,090)
Income tax benefit (expense)
— — — (732)— (732)
Segment results
$(9,130)$(5,358)$484 $23,888 $— 9,884 
Reconciliation of segments to consolidated results:
Transaction-related costs, net(5)
(1,423)
Net income (loss)$8,461 
Significant non-cash items:
Depreciation and amortization, net of accretion$1,298 $1,262 $(511)$863 $— $2,912 
Three Months Ended March 31, 2025
(In thousands)Specialty P&CWorkers' Compensation InsuranceSegregated Portfolio Cell Reinsurance CorporateInter-segment EliminationsConsolidated
Net premiums earned$183,254 $41,524 $11,497 $— $— $236,275 
Net investment income— — 816 36,135 — 36,951 
Equity in earnings (loss) of unconsolidated subsidiaries— — — 4,015 — 4,015 
Net investment gains (losses)— — (335)(1,358)— (1,693)
Other income (expense)(1)
3,766 390 (1)(7,283)(341)(3,469)
Net losses and loss adjustment expenses(2)
(152,247)(30,153)(7,560)— — (189,960)
Operating expenses(1)(2)(3)
(24,102)(11,081)(531)(8,102)63 (43,753)
Deferred policy acquisition costs amortization(2)
(24,533)(4,522)(3,604)— 278 (32,381)
SPC U.S. federal income tax benefit (expense)(4)
— — (348)— — (348)
SPC dividend (expense) income
— — 248 — — 248 
Interest expense
— — — (5,160)— (5,160)
Income tax benefit (expense)
— — — (229)— (229)
Segment results
$(13,862)$(3,842)$182 $18,018 $— 496 
Reconciliation of segments to consolidated results:
Transaction-related costs, net(5)
(6,318)
Net income (loss)$(5,822)
Significant non-cash items:
Depreciation and amortization, net of accretion$2,168 $1,271 $(450)$833 $— $3,822 
(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 three months ended March 31, 2026 and 2025, pre-tax transaction-related costs of approximately $1.4 million and $7.1 million, respectively, were included as a component of consolidated operating expenses. The associated income tax benefit for the deductible professional fees paid related to the transaction was approximately $0.7 million for the three months ended March 31, 2025 and was included as a component of consolidated income tax benefit (expense) on the Condensed Consolidated Statements of Income and Comprehensive Income. The majority of transaction‑related costs incurred during the three months ended March 31, 2026 had not yet been paid as of period end; accordingly, the associated income tax benefit was deferred, resulting in no impact on total income tax expense.
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.
Three Months Ended March 31
(In thousands)20262025
Specialty P&C Segment
Gross premiums earned:
MPL$175,552 $184,671 
Medical Technology Liability10,514 10,763 
Lloyd's Syndicates133 1,084 
Other3,464 4,408 
Ceded premiums earned(17,582)(17,672)
Segment net premiums earned172,081 183,254 
Workers' Compensation Insurance Segment
Gross premiums earned:
Traditional business43,894 43,627 
Alternative market business13,076 14,349 
Ceded premiums earned(16,305)(16,452)
Segment net premiums earned40,665 41,524 
Segregated Portfolio Cell Reinsurance Segment
Gross premiums earned:
Workers' compensation(1)
11,775 12,694 
MPL(2)
715 649 
Ceded premiums earned(1,731)(1,846)
Segment net premiums earned10,759 11,497 
Consolidated net premiums earned$223,505 $236,275 
(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.