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Business Combination (Tables)
 6 Months Ended
Jun. 30, 2021
Business Combination and Asset Acquisition [Abstract]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The preliminary allocation of acquisition consideration is shown in the table below.
(In thousands)
Fixed maturities, available for sale$1,100,058 
Equity investments, available for sale374,484 
Short-term investments61,289 
Business owned life insurance12,581 
Investment in unconsolidated subsidiaries26,948 
Other investments32,461 
Cash and cash equivalents28,233 
Premiums receivable110,905 
Receivable from reinsurers on paid losses and loss adjustment expenses266 
Receivable from reinsurers on unpaid losses and loss adjustment expenses 93,342 
Prepaid reinsurance premiums9,238 
Deferred tax asset, net46,759 
Operating lease ROU assets4,385 
Intangible assets14,000 
Other assets38,648 
Reserve for losses and loss adjustment expenses(1,182,445)
Unearned premiums(178,400)
Reinsurance premiums payable(12,981)
Operating lease liabilities(5,275)
Other liabilities(51,279)
Total identifiable net assets acquired$523,217 
Gain on bargain purchase(74,408)
Total acquisition consideration$448,809 
Schedule of Pro Forma Results
The following table provides Pro Forma Consolidated Results and Actual Consolidated Results for the three and six months ended June 30, 2021 and 2020 as if the NORCAL transaction had occurred on January 1, 2020.
The pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the operating results that may have actually occurred had the acquisition of NORCAL been completed on January 1, 2020. In addition, the unaudited pro forma financial information does not give effect to any anticipated cost savings, operating efficiencies or other synergies that may be associated with the acquisition, or any estimated costs that have been or will be incurred to integrate the assets and operations of NORCAL.
Three Months Ended June 30Six Months Ended June 30
(In thousands)2021202020212020
Revenue:
ProAssurance Pro Forma Consolidated Results$315,947 $305,326 $624,423 $602,840 
ProAssurance Actual Consolidated Results$281,628 $221,742 $501,644 $418,443 
Net income (loss):
ProAssurance Pro Forma Consolidated Results$32,926 $(15,647)$45,326 $40,714 
ProAssurance Actual Consolidated Results$92,050 $(18,099)$99,785 $(40,053)
Schedule of Intangible Assets Acquired Intangible assets acquired included the following:
(In thousands)Estimated Fair Value on Acquisition DateEstimated Useful Life
Trade name$1,000 3
Licenses13,000 Indefinite
Total$14,000 
Schedule of Present Value of Future Insurance Profits, Expected Amortization
The following table reflects the fair value adjustment on the net reserve for losses and loss adjustment expenses, the negative net VOBA recorded on the assumed unearned premium and negative VOBA recorded on the DDR reserve, as well as the expected amortization of each for the five years following the acquisition.
(In thousands)Amount at May 5, 2021Estimated amortization period (years)Expected pre-tax amortization for year following the acquisition
20212022202320242025Thereafter
Fair value adjustment on reserves, net (1)
$38,701 7$7,768 $10,595 $8,090 $5,083 $3,107 $4,058 
Unearned premium VOBA, net (2)
11,676 16,737 4,939 — — — — 
DDR reserve VOBA (1)
3,467 15139 224 243 243 243 2,375 
Total$53,844 $14,644 $15,758 $8,333 $5,326 $3,350 $6,433 
(1) Amortization will be recorded as a reduction to prior accident year net losses and loss adjustment expenses.
(2) Amortization will be recorded as a reduction to current accident year net losses and loss adjustment expenses