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Segment Information
 9 Months Ended
Sep. 30, 2025
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.
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. Additional information regarding ProAssurance's segments is included in Note 16 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2024 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 non-premium revenues generated outside of the Company's insurance entities and the underwriting results from ProAssurance's previous participation in Lloyd's of London Syndicate 1729 and Syndicate 6131, which is currently in runoff.
•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, 2024 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 September 30, 2025
(In thousands)Specialty P&CWorkers' Compensation InsuranceSegregated Portfolio Cell ReinsuranceCorporateInter-segment EliminationsConsolidated
Net premiums earned$180,787 $40,972 $11,645 $— $— $233,404 
Net investment income— — 1,100 39,342 — 40,442 
Equity in earnings (loss) of unconsolidated subsidiaries— — — 4,731 — 4,731 
Net investment gains (losses)— — 796 45 — 841 
Other income (expense)(1)
996 414 1 (1,003)(272)136 
Net losses and loss adjustment expenses(2)
(149,343)(30,727)(6,129)— — (186,199)
Operating expenses(1)(2)(3)
(24,082)(11,481)(430)(7,835)(6)(43,834)
Deferred policy acquisition costs(2)
(26,839)(4,313)(3,727)— 278 (34,601)
SPC U.S. federal income tax benefit (expense)(4)
— — (658)— — (658)
SPC dividend (expense) income— — (1,674)— — (1,674)
Interest expense— — — (5,236)— (5,236)
Income tax benefit (expense)— — — (2,928)— (2,928)
Segment results$(18,481)$(5,135)$924 $27,116 $— 4,424 
Reconciliation of segments to consolidated results:
Transaction-related costs, net(5)
(2,978)
Net income (loss)$1,446 
Significant non-cash items:
Depreciation and amortization, net of accretion$2,001 $1,261 $(630)$676 $— $3,308 
Nine Months Ended September 30, 2025
(In thousands)Specialty P&CWorkers' Compensation InsuranceSegregated Portfolio Cell Reinsurance CorporateInter-segment EliminationsConsolidated
Net premiums earned
$543,351 $124,038 $34,697 $— $— $702,086 
Net investment income
— — 2,818 113,508 — 116,326 
Equity in earnings (loss) of unconsolidated subsidiaries
— — — 13,330 — 13,330 
Net investment gains (losses)— — 1,779 (2,405)— (626)
Other income (expense)(1)
6,904 1,237 18 (10,040)(850)(2,731)
Net losses and loss adjustment expenses(2)
(425,338)(92,027)(18,732)— — (536,097)
Operating expenses(1)(2)(3)
(72,811)(33,312)(1,323)(24,806)58 (132,194)
Deferred policy acquisition costs amortization(2)
(73,753)(14,872)(10,916)— 792 (98,749)
SPC U.S. federal income tax benefit (expense)(4)
— — (1,913)— — (1,913)
SPC dividend (expense) income
— — (3,762)— — (3,762)
Interest expense
— — — (15,620)— (15,620)
Income tax benefit (expense)
— — — (9,001)— (9,001)
Segment results
$(21,647)$(14,936)$2,666 $64,966 $— 31,049 
Reconciliation of segments to consolidated results:
Transaction-related costs, net(5)
(13,504)
Net income (loss)$17,545 
Significant non-cash items:
Depreciation and amortization, net of accretion$6,231 $3,794 $(1,534)$2,180 $— $10,671 
Three Months Ended September 30, 2024
(In thousands)Specialty P&CWorkers' Compensation InsuranceSegregated Portfolio Cell Reinsurance CorporateInter-segment EliminationsConsolidated
Net premiums earned$188,704 $41,829 $12,627 $— $— $243,160 
Net investment income— — 1,009 36,263 — 37,272 
Equity in earnings (loss) of unconsolidated subsidiaries— — — 4,767 — 4,767 
Net investment gains (losses)— — 599 1,653 — 2,252 
Other income (expense)(1)
1,395 537 1 (3,850)(281)(2,198)
Net losses and loss adjustment expenses(2)
(136,337)(32,193)(7,801)— — (176,331)
Operating expenses(1)(2)(3)
(26,616)(10,915)(222)(10,290)7 (48,036)
Deferred policy acquisition costs(2)
(25,238)(3,468)(3,921)— 274 (32,353)
SPC U.S. federal income tax benefit (expense)(4)
— — (377)— — (377)
SPC dividend (expense) income— — (1,360)— — (1,360)
Interest expense— — — (5,698)— (5,698)
Income tax benefit (expense)— — — (4,657)— (4,657)
Segment results$1,908 $(4,210)$555 $18,188 $— 16,441 
Net income (loss)$16,441 
Significant non-cash items:
Depreciation and amortization, net of accretion$2,065 $1,270 $(671)$1,216 $— $3,880 
Nine Months Ended September 30, 2024
(In thousands)Specialty P&CWorkers' Compensation InsuranceSegregated Portfolio Cell Reinsurance CorporateInter-segment EliminationsConsolidated
Net premiums earned$562,137 $124,692 $40,347 $— $— $727,176 
Net investment income— — 2,687 105,040 — 107,727 
Equity in earnings (loss) of unconsolidated subsidiaries— — — 16,383 — 16,383 
Net investment gains (losses)— — 2,327 (3,921)— (1,594)
Other income (expense)(1)
4,984 1,483 1 (1,340)(1,256)3,872 
Net losses and loss adjustment expenses(2)
(434,564)(95,980)(26,481)— — (557,025)
Operating expenses(1)(2)(3)
(77,308)(32,586)(1,588)(27,084)342 (138,224)
Deferred policy acquisition costs amortization(2)
(76,839)(11,422)(12,517)— 914 (99,864)
SPC U.S. federal income tax benefit (expense)(4)
— — (1,043)— — (1,043)
SPC dividend (expense) income
— — (2,479)— — (2,479)
Interest expense
— — — (17,004)— (17,004)
Income tax benefit (expense)
— — — (7,837)— (7,837)
Segment results
$(21,590)$(13,813)$1,254 $64,237 $— 30,088 
Reconciliation of segments to consolidated results:
Transaction-related costs, net(5)
(253)
Contingent Consideration(6)
6,740 
Net income (loss)$36,575 
Significant non-cash items:
Depreciation and amortization, net of accretion$6,784 $3,747 $(1,661)$4,775 $— $13,645 
(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 and nine months ended September 30, 2025 and actuarial consulting fees paid during the second quarter of 2024 in connection with the final determination of contingent consideration associated with the acquisition of NORCAL. For the three and nine months ended September 30, 2025, pre-tax transaction-related costs of approximately $3.0 million and $14.6 million, respectively, were included as a component of consolidated operating expenses as compared to $0.3 million for the 2024 nine-month period. The associated income tax benefit was nominal for the three months ended September 30, 2025 and approximately $1.1 million for the nine months ended September 30, 2025 and was included as a component of consolidated income tax benefit (expense) on the Condensed Consolidated Statements of Income and Comprehensive Income as compared to a nominal amount for the 2024 nine-month period.
(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 Condensed Consolidated Statements of Income and Comprehensive Income for the nine months ended September 30, 2024. See further discussion on the contingent consideration in Note 2 of the Notes to Consolidated Financial Statements in ProAssurance's December 31, 2024 report on Form 10-K.
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 September 30Nine Months Ended September 30
(In thousands)2025202420252024
Specialty P&C Segment
Gross premiums earned:
MPL
$183,523 $186,376 $548,176 $551,791 
Medical Technology Liability
10,689 11,262 32,360 33,196 
Lloyd's Syndicates
508 2,897 1,918 12,256 
Other3,674 5,373 12,038 16,986 
Ceded premiums earned(17,607)(17,204)(51,141)(52,092)
Segment net premiums earned180,787 188,704 543,351 562,137 
Workers' Compensation Insurance Segment
Gross premiums earned:
Traditional business44,783 46,148 133,890 136,310 
Alternative market business
14,478 15,674 43,213 49,130 
Ceded premiums earned(18,289)(19,993)(53,065)(60,748)
Segment net premiums earned40,972 41,829 124,038 124,692 
Segregated Portfolio Cell Reinsurance Segment
Gross premiums earned:
Workers' compensation(1)
12,840 14,095 38,333 44,767 
MPL(2)
676 518 2,009 1,881 
Ceded premiums earned(1,871)(1,986)(5,645)(6,301)
Segment net premiums earned11,645 12,627 34,697 40,347 
Consolidated net premiums earned$233,404 $243,160 $702,086 $727,176 
(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.