Fair Value Measurement

9 Months Ended

Sep. 30, 2025

Fair Value Disclosures [Abstract]

Fair Value Measurement

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three level hierarchy has been established for valuing assets and liabilities based on how transparent (observable) the inputs are that are used to determine fair value, with the inputs considered most observable categorized as Level 1 and those that are the least observable categorized as Level 3. Hierarchy levels are defined as follows:

Level 1: quoted (unadjusted) market prices in active markets for identical assets and liabilities. For ProAssurance, Level 1 inputs are generally quotes for securities actively traded in exchange or over-the-counter markets.

Level 2: market data obtained from sources independent of the reporting entity (observable inputs). For ProAssurance, Level 2 inputs generally include quoted prices in markets that are not active, quoted prices for similar assets or liabilities, and results from pricing models that use observable inputs such as interest rates and yield curves that are generally available at commonly quoted intervals.

Level 3: the reporting entity’s own assumptions about market participant assumptions based on the best information available in the circumstances (non-observable inputs). For ProAssurance, Level 3 inputs are used in situations where little or no Level 1 or 2 inputs are available or are inappropriate given the particular circumstances. Level 3 inputs include results from pricing models for which some or all of the inputs are not observable, discounted cash flow methodologies, single non-binding broker quotes and adjustments to externally quoted prices that are based on management judgment or estimation.

Fair values of assets measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 are shown in the following tables. Where applicable, the tables also indicate the fair value hierarchy of the valuation techniques utilized to determine those fair values. For some assets, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When this is the case, the asset is categorized based on the level of the most significant input to the fair value measurement. Assessments of the significance of a particular input to the fair value measurement require judgment and consideration of factors specific to the assets being valued.

	September 30, 2025
	Fair Value Measurements Using						Total
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Assets:
Fixed maturities, available-for-sale
U.S. Treasury obligations	$	—	$	248,450	$	—	$	248,450
U.S. Government-sponsored enterprise obligations	—		10,026		—		10,026
State and municipal bonds	—		451,391		—		451,391
Corporate debt, multiple observable inputs	—		1,666,329		—		1,666,329
Corporate debt, limited observable inputs	—		—		77,906		77,906
Residential mortgage-backed securities	—		552,081		—		552,081
Agency commercial mortgage-backed securities	—		5,230		—		5,230
Other commercial mortgage-backed securities	—		205,798				205,798
Other asset-backed securities	—		453,736		8,235		461,971
Fixed maturities, trading	—		12,390		—		12,390
Equity investments
Financial	9,532		2,358		—		11,890
Utilities/Energy	1,030		—		—		1,030
Industrial	—		—		4,526		4,526
Bond funds	81,215		—		—		81,215
All other	11,537		—		—		11,537
Short-term investments	223,597		67,748		—		291,345
Other investments	—		1,616		521		2,137
Other assets	—		734		—		734
Total assets categorized within the fair value hierarchy	$	326,911	$	3,677,887	$	91,188	4,095,986
Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of:
Investment in unconsolidated subsidiaries							220,532
Total assets at fair value							$	4,316,518
Liabilities:
Other liabilities	$	1,650	$	1,540	$	—	$	3,190
Total liabilities categorized within the fair value hierarchy	$	1,650	$	1,540	$	—	$	3,190

	December 31, 2024
	Fair Value Measurements Using						Total
(In thousands)	Level 1		Level 2		Level 3		Fair Value
Assets:
Fixed maturities, available-for-sale
U.S. Treasury obligations	$	—	$	243,903	$	—	$	243,903
U.S. Government-sponsored enterprise obligations	—		14,894		—		14,894
State and municipal bonds	—		446,601		—		446,601
Corporate debt, multiple observable inputs	—		1,646,713		—		1,646,713
Corporate debt, limited observable inputs	—		—		81,062		81,062
Residential mortgage-backed securities	—		478,799		—		478,799
Agency commercial mortgage-backed securities	—		6,727		—		6,727
Other commercial mortgage-backed securities	—		201,786		—		201,786
Other asset-backed securities	—		457,948		3,774		461,722
Fixed maturities, trading	—		53,157		—		53,157
Equity investments
Financial	9,006		2,310		273		11,589
Utilities/Energy	724		—		—		724
Industrial	—		—		5,233		5,233
Bond funds	101,243		—		—		101,243
All other	11,369		—		—		11,369
Short-term investments	185,492		69,430		—		254,922
Other investments	—		1,577		500		2,077
Other assets	—		6,094		—		6,094
Total assets categorized within the fair value hierarchy	$	307,834	$	3,629,939	$	90,842	4,028,615
Assets carried at NAV, which approximates fair value and which are not categorized within the fair value hierarchy, reported as a part of:
Investment in unconsolidated subsidiaries							226,269
Total assets at fair value							$	4,254,884
Liabilities:
Other liabilities	$	6,680	$	—	$	—	$	6,680
Total liabilities categorized within the fair value hierarchy	$	6,680	$	—	$	—	$	6,680

Level 2 Valuations

Other than as described below, see Note 2 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2024 report on Form 10-K for a summary description of the valuation methodologies used regarding securities in the Level 2 category, by security type.

Level 2 Valuation Methodologies

Other liabilities consisted of foreign currency forward contract derivative instruments, which are discussed in Note 8, valued using a model which considers the forward yield curves and volatilities from other instruments with similar maturities, strike prices and durations.

Level 3 Valuations

See Note 2 of the Notes to Consolidated Financial Statements in ProAssurance’s December 31, 2024 report on Form 10-K for a summary description of the valuation methodologies used regarding securities in the Level 3 category, by security type.

Quantitative Information Regarding Level 3 Valuations

Below is quantitative information regarding securities in the Level 3 category, by security type:

	Fair Value at
($ in thousands)	September 30, 2025	December 31, 2024	Valuation Technique	Unobservable Input	Range (Weighted Average)
Assets:
Corporate debt, limited observable inputs	$77,906	$81,062	Market Comparable Securities	Comparability Adjustment	0% - 5% (2.5%)
			Discounted Cash Flows	Comparability Adjustment	0% - 5% (2.5%)
Other asset-backed securities	$8,235	$3,774	Market Comparable Securities	Comparability Adjustment	0% - 5% (2.5%)
			Discounted Cash Flows	Comparability Adjustment	0% - 5% (2.5%)
Equity investments	$4,526	$5,506	Discounted Cash Flows	Comparability Adjustment	0% - 10% (5%)
Other investments	$521	$500	Discounted Cash Flows	Comparability Adjustment	0% - 10% (5%)

The significant unobservable inputs used in the fair value measurement of the above listed securities were the valuations of comparable securities with similar issuers, credit quality and maturity. Changes in the availability of comparable securities could result in changes in the fair value measurements.

Fair Value Measurements - Level 3 Assets & Liabilities

The following tables present summary information regarding changes in the fair value of assets and liabilities measured using Level 3 inputs.

	September 30, 2025
	Level 3 Fair Value Measurements – Assets
(In thousands)	Corporate Debt		Asset-backed Securities		Equity Investments		Other Investments		Total
Balance, June 30, 2025	$	80,344	$	9,449	$	4,526	$	1,021	$	95,340
Total gains (losses) realized and unrealized:
Included in earnings, as a part of:
Net investment income (loss)	24		3		—		—		27
Net investment gains (losses)	—		—		(590)		—		(590)
Included in other comprehensive income (loss)	224		98		—		—		322
Purchases	2,734		3,500		590		—		6,824
Sales	(5,444)		(49)		—		(500)		(5,993)
Transfers in	901		—		—		—		901
Transfers out	(877)		(4,766)		—		—		(5,643)
Balance, September 30, 2025	$	77,906	$	8,235	$	4,526	$	521	$	91,188
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end	$	—	$	—	$	(590)	$	—	$	(590)

	September 30, 2025
	Level 3 Fair Value Measurements - Assets
(In thousands)	Corporate Debt		Asset-backed Securities		Equity Investments		Other Investments		Total Assets
Balance, December 31, 2024	$	81,062	$	3,774	$	5,506	$	500	$	90,842
Total gains (losses) realized and unrealized:
Included in earnings, as a part of:
Net investment income (loss)	24		3		—		—		27
Net investment gains (losses)	(1,727)		—		(1,570)		—		(3,297)
Included in other comprehensive income (loss)	692		69		—		—		761
Purchases	12,533		8,321		590		521		21,965
Sales	(9,831)		(316)		—		(500)		(10,647)
Transfers in	6,968		2,198		—		—		9,166
Transfers out	(11,815)		(5,814)		—		—		(17,629)
Balance, September 30, 2025	$	77,906	$	8,235	$	4,526	$	521	$	91,188
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets held at period-end	$	—	$	—	$	(1,278)	$	—	$	(1,278)

	September 30, 2024
	Level 3 Fair Value Measurements – Assets
(In thousands)	Corporate Debt		Asset-backed Securities		Equity Investments		Other Investments		Total Assets
Balance, June 30, 2024	$	66,951	$	724	$	4,238	$	500	$	72,413
Total gains (losses) realized and unrealized:
Included in earnings, as a part of:
Net investment income	—		2		—		—		2
Net investment gains (losses)	—		—		(68)		—		(68)
Included in other comprehensive income (loss)	95		—		—		—		95
Purchases	5,133		1,998		319		—		7,450
Sales	(958)		—		—		—		(958)
Transfers in	3,587		—		—		—		3,587
Balance, September 30, 2024	$	74,808	$	2,724	$	4,489	$	500	$	82,521
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end	$	—	$	—	$	(68)	$	—	$	(68)

	September 30, 2024
	Level 3 Fair Value Measurements
	Assets										Liabilities
(In thousands)	Corporate Debt		Asset-backed Securities		Equity Investments		Other Investments		Total Assets		Other Liabilities		Total Liabilities
Balance, December 31, 2023	$	82,377	$	4,414	$	5,237	$	5,126	$	97,154	$	(6,500)	$	(6,500)
Total gains (losses) realized and unrealized:
Included in earnings, as a part of:
Net investment income (loss)	—		2		—		—		2		—		—
Net investment gains (losses)	—		—		(1,067)		98		(969)		6,500		6,500
Included in other comprehensive income (loss)	(49)		(22)		—		—		(71)		—		—
Purchases	11,901		3,198		319		—		15,418		—		—
Sales	(2,497)		(217)		—		(252)		(2,966)		—		—
Transfers in	3,587		—		—		—		3,587		—		—
Transfers out	(20,511)		(4,651)		—		(4,472)		(29,634)		—		—
Balance, September 30, 2024	$	74,808	$	2,724	$	4,489	$	500	$	82,521	$	—	$	—
Change in unrealized gains (losses) included in earnings for the above period for Level 3 assets and liabilities held at period-end	$	—	$	—	$	(1,067)	$	88	$	(979)	$	—	$	—

Transfers

Transfers shown in the preceding Level 3 tables were as of the end of the period in which the transfer occurred. All transfers were to or from Level 2.

All transfers in and out of Level 3 during the three and nine months ended September 30, 2025 and 2024 related to securities held for which the level of market activity for identical or nearly identical securities varies from period to period. The securities were valued using multiple observable inputs when those inputs were available; otherwise the securities were valued using limited observable inputs.

Fair Values Not Categorized

At September 30, 2025 and December 31, 2024, certain LPs/LLCs and investment funds measure fund assets at fair value on a recurring basis and provide a NAV for ProAssurance's interest. The carrying value of these interests is based on the NAV provided and was considered to approximate the fair value of the interests. For investment in unconsolidated subsidiaries, ProAssurance recognizes any changes in the NAV of its interests in equity in earnings (loss) of unconsolidated subsidiaries during the period of change. In accordance with GAAP, the fair value of these investments was not classified within the fair value hierarchy. The amount of ProAssurance's unfunded contractual commitments related to these investments as of September 30, 2025 and fair values of these investments as of September 30, 2025 and December 31, 2024 were as follows:

	Unfunded Contractual Commitments	Fair Value
(In thousands)	September 30, 2025	September 30, 2025		December 31, 2024
Investment in unconsolidated subsidiaries:
Private debt funds (1)	$3,799	$	11,823	$	14,190
Long/short equity funds (2)	None	—		4,246
Non-public equity funds (3)	$30,413	104,488		111,441
Credit funds (4)	$55,793	52,696		45,134
Strategy focused funds (5)	$62,270	51,525		51,258
Total investments carried at NAV		$	220,532	$	226,269

Below is additional information regarding each of the investments listed in the table above as of September 30, 2025.

(1)This investment is comprised of interests in two unrelated LP funds that are structured to provide interest distributions primarily through diversified portfolios of private debt instruments. One LP allows redemption by special consent, while the other does not permit redemption. Income and capital are to be periodically distributed at the discretion of the LPs over an anticipated time frame that spans from three to eight years.

(2)This investment is comprised of one LP fund, which holds long and short publicly traded securities that will passively generate income. This fund was fully redeemed in the third quarter of 2025.

(3)This investment is comprised of interests in multiple unrelated LP funds, each structured to provide capital appreciation through diversified investments in private equity, which can include investments in buyout, venture capital, debt including senior, second lien and mezzanine, distressed debt, collateralized loan obligations and other private equity-oriented LPs. Two of the LPs allow redemption by terms set forth in the LP agreements; the others do not permit redemption. Income and capital are to be periodically distributed at the discretion of the LP over time frames that are anticipated to span up to ten years.

(4)This investment is comprised of multiple unrelated LP funds. Three funds seek to obtain superior risk-adjusted absolute returns through a diversified portfolio of debt securities, including bonds, loans and other asset-backed instruments. The remaining funds focus on private middle market company mezzanine and senior secured loans, opportunities across the credit spectrum, mortgage backed-loans, as well as various types of loan-backed investments. One fund allows redemptions at any quarter-end with prior notice requirements of 180 days, while another fund allows for redemptions with consent of the General Partner. The remaining funds do not allow redemptions. For the funds that do not allow redemptions, income and capital are to be periodically distributed at the discretion of the LP over time frames throughout the remaining life of the funds.

(5)This investment is comprised of multiple unrelated LPs/LLCs funds. One fund is an LLC focused on investing in North American consumer products companies, comprised of equity and equity-related securities, as well as debt instruments. A second fund is focused on aircraft investments, along with components and assets related to aircraft. A third fund is an LLC focused on acquiring ownership stakes in insurance agencies. For all three funds, redemptions are not permitted. The remaining funds are real estate focused LPs, three of which allow for redemption with prior notice.

ProAssurance may not sell, transfer or assign its interest in any of the above LPs/LLCs without special consent from the LPs/LLCs.

Nonrecurring Fair Value Measurement

ProAssurance did not have any assets or liabilities that were measured at fair value on a nonrecurring basis at September 30, 2025 or December 31, 2024.

Financial Instruments - Methodologies Other Than Fair Value

The following table provides the estimated fair value of the Company's financial instruments that, in accordance with GAAP for the type of investment, are measured using a methodology other than fair value. Fair values provided primarily fall within the Level 3 fair value category.

	September 30, 2025				December 31, 2024
(In thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
BOLI	$	82,346	$	82,346	$	80,179	$	80,179
Other investments	$	7,172	$	7,172	$	5,189	$	5,189
Other assets	$	23,151	$	23,151	$	34,793	$	34,793
Financial liabilities:
Revolving Credit Agreement*	$	125,000	$	125,000	$	125,000	$	125,000
Term Loan*	$	115,625	$	115,625	$	120,313	$	120,313
Contribution Certificates	$	182,158	$	165,112	$	181,163	$	152,564
Other liabilities	$	28,955	$	28,955	$	33,793	$	33,793
* Carrying value excludes unamortized debt issuance costs.

The fair value of the BOLI was equal to the cash surrender value associated with the policies on the valuation date.

Other investments listed in the table above include FHLB common stock carried at cost and an annuity investment carried at amortized cost. Two of ProAssurance's insurance subsidiaries are members of an FHLB. The estimated fair value of the FHLB common stock was based on the amount the subsidiaries would receive if their memberships were canceled, as the memberships cannot be sold. The fair value of the annuity represents the present value of the expected future cash flows discounted using a rate available in active markets for similarly structured instruments.

Other assets and other liabilities primarily consisted of related investment assets and liabilities associated with funded deferred compensation agreements. The fair value of the funded deferred compensation assets was based upon quoted market prices, which is categorized as a Level 1 valuation, and had a fair value of $23.1 million and $34.1 million at September 30, 2025 and December 31, 2024, respectively. Other assets also included an unsecured note receivable. The fair value of the note receivable was based on the present value of expected cash flows from the note receivable, discounted at market rates on the valuation date for receivables with similar credit standings and similar payment structures. Other liabilities consisted of liabilities associated with funded deferred compensation agreements. The reported balance is determined based on the amount of elective deferrals and employer contributions adjusted for periodic changes in the fair value of the participant balances based on the performance of the funds selected by the participants and had a fair value of $29.0 million and $33.8 million at September 30, 2025 and December 31, 2024, respectively.

The fair value of the debt was estimated based on the present value of expected future cash outflows, discounted at rates available on the valuation date for similar debt issued by entities with a similar credit standing to ProAssurance.