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Segment Information (Tables)
 6 Months Ended
Jun. 30, 2021
Segment Reporting [Abstract]  
Schedule of Segment Reporting Information, by Segment 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. ProAssurance does not consider goodwill or intangible asset impairments, a gain on bargain purchase or transaction-related costs for 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 June 30, 2021
(In thousands)Specialty P&CWorkers' Compensation InsuranceSegregated Portfolio Cell Reinsurance Lloyd's SyndicatesCorporateInter-segment EliminationsConsolidated
Net premiums earned$168,635 $40,626 $16,272 $13,460 $— $— $238,993 
Net investment income— — 206 518 16,693 — 17,417 
Equity in earnings (loss) of unconsolidated subsidiaries— — — — 11,927 — 11,927 
Net realized gains (losses)— — 1,580 89 9,164 — 10,833 
Other income (loss)(1)
1,471 900 1 361 351 (626)2,458 
Net losses and loss adjustment expenses(140,214)(27,751)(8,443)(5,444)— — (181,852)
Underwriting, policy acquisition and operating expenses(1)
(28,877)(12,712)(5,293)(4,721)(5,929)626 (56,906)
SPC U.S. federal income taxes(2)
— — (504)— — — (504)
SPC dividend (expense) income— — (2,864)— — — (2,864)
Interest expense— — — — (5,176)— (5,176)
Income tax benefit (expense)— — — — (220)— (220)
Segment results$1,015 $1,063 $955 $4,263 $26,810 $— 34,106 
Reconciliation of segments to consolidated results:
Gain on bargain purchase74,408 
Transaction-related costs, net(3)
(16,464)
Net income (loss)$92,050 
Significant non-cash items:
Gain on bargain purchase$74,408 
Depreciation and amortization, net of accretion$3,134 $903 $361 $16 $5,183 $— $9,597 
Six Months Ended June 30, 2021
(In thousands)Specialty P&CWorkers' Compensation InsuranceSegregated Portfolio Cell Reinsurance Lloyd's SyndicatesCorporateInter-segment EliminationsConsolidated
Net premiums earned
$284,249 $80,636 $32,156 $29,310 $— $— $426,351 
Net investment income
— — 427 1,246 30,761 — 32,434 
Equity in earnings (loss) of unconsolidated subsidiaries
— — — — 18,715 — 18,715 
Net realized gains (losses)
— — 2,568 (26)17,140 — 19,682 
Other income (expense)(1)
1,939 1,293 2 582 2,245 (1,599)4,462 
Net losses and loss adjustment expenses
(241,400)(53,958)(17,867)(18,411)— — (331,636)
Underwriting, policy acquisition and operating expenses(1)
(55,223)(24,998)(10,320)(11,311)(12,177)1,599 (112,430)
SPC U.S. federal income tax expense(2)
— — (860)— — — (860)
SPC dividend (expense) income
— — (4,606)— — — (4,606)
Interest expense
— — — — (8,389)— (8,389)
Income tax benefit (expense)
— — — — (1,151)— (1,151)
Segment results
$(10,435)$2,973 $1,500 $1,390 $47,144 $— 42,572 
Reconciliation of segments to consolidated results:
Gain on bargain purchase74,408 
Transaction-related costs, net(3)
(17,195)
Net income (loss)$99,785 
Significant non-cash items:
Gain on bargain purchase$74,408 
Depreciation and amortization, net of accretion$5,305 $1,806 $677 $32 $8,500 $— $16,320 
Three Months Ended June 30, 2020
(In thousands)Specialty P&CWorkers' Compensation InsuranceSegregated Portfolio Cell Reinsurance Lloyd's SyndicatesCorporateInter-segment EliminationsConsolidated
Net premiums earned
$127,096 $42,406 $16,748 $21,043 $— $— $207,293 
Net investment income
— — 305 1,126 16,693 — 18,124 
Equity in earnings (loss) of unconsolidated subsidiaries
— — — — (25,355)— (25,355)
Net realized gains (losses)
— — 2,606 529 16,850 — 19,985 
Other income (expense)(1)
1,092 519 55 40 404 (415)1,695 
Net losses and loss adjustment expenses
(159,559)(28,425)(7,680)(15,335)— — (210,999)
Underwriting, policy acquisition and operating expenses(1)
(25,234)(13,456)(5,360)(7,293)(7,764)415 (58,692)
SPC U.S. federal income tax expense(2)
— — (480)— — — (480)
SPC dividend (expense) income
— — (4,642)— — — (4,642)
Interest expense
— — — — (3,714)— (3,714)
Income tax benefit (expense)
— — — — 38,686 — 38,686 
Segment results
$(56,605)$1,044 $1,552 $110 $35,800 $— (18,099)
Net income (loss)$(18,099)
Significant non-cash items:
Depreciation and amortization, net of accretion$1,680 $922 $91 $14 $2,378 $— $5,085 
Six Months Ended June 30, 2020
(In thousands)Specialty P&CWorkers' Compensation InsuranceSegregated Portfolio Cell Reinsurance Lloyd's SyndicatesCorporateInter-segment EliminationsConsolidated
Net premiums earned$247,456 $86,921 $33,728 $43,044 $— $— $411,149 
Net investment income— — 559 2,285 36,110 — 38,954 
Equity in earnings (loss) of unconsolidated subsidiaries— — — — (26,917)— (26,917)
Net realized gains (losses)— — (601)611 (8,698)— (8,688)
Other income (expense)(1)
2,788 1,276 191 (192)1,038 (1,156)3,945 
Net losses and loss adjustment expenses
(270,491)(58,192)(17,032)(30,116)— — (375,831)
Underwriting, policy acquisition and operating expenses(1)
(54,818)(27,622)(10,439)(16,434)(12,589)1,156 (120,746)
SPC U.S. federal income tax expense(2)
— — (702)— — — (702)
SPC dividend (expense) income
— — (4,134)— — — (4,134)
Interest expense
— — — — (7,844)— (7,844)
Income tax benefit (expense)
— — — 29 50,732 — 50,761 
Segment results
$(75,065)$2,383 $1,570 $(773)$31,832 $— (40,053)
Net income (loss)$(40,053)
Significant non-cash items:
Depreciation and amortization, net of accretion$3,260 $1,848 $160 $23 $4,533 $— $9,824 
(1) Certain fees for services provided to the SPCs at Inova Re and Eastern Re 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) 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.
(3) Represents the transaction-related costs, after-tax, associated with the acquisition of NORCAL. Pre-tax transaction-related costs of $20.3 million and $21.2 million were included as a component of consolidated operating expense and the associated income tax benefit of $3.8 million and $4.0 million were included as a component of consolidated income tax benefit (expense) on the Condensed Consolidated Statements of Income and Comprehensive Income for the three and six months ended June 30, 2021, respectively.
Schedule of Gross Premiums by Product
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 June 30Six Months Ended June 30
(In thousands)2021202020212020
Specialty P&C Segment
Gross premiums earned:
HCPL$150,784 $111,836 $247,829 $215,304 
Small Business Unit
25,905 24,915 51,831 51,565 
Medical Technology Liability
9,613 8,641 18,551 17,169 
Other172 155 323 532 
Ceded premiums earned(17,839)(18,451)(34,285)(37,114)
Segment net premiums earned168,635 127,096 284,249 247,456 
Workers' Compensation Insurance Segment
Gross premiums earned:
Traditional business43,693 45,524 85,436 93,008 
Alternative market business
17,017 17,906 33,906 36,034 
Ceded premiums earned(20,084)(21,024)(38,706)(42,121)
Segment net premiums earned40,626 42,406 80,636 86,921 
Segregated Portfolio Cell Reinsurance Segment
Gross premiums earned:
Workers' compensation(1)
16,254 17,189 32,368 34,702 
HCPL(2)
2,173 1,723 4,026 3,400 
Ceded premiums earned(2,155)(2,164)(4,238)(4,374)
Segment net premiums earned16,272 16,748 32,156 33,728 
Lloyd's Syndicates Segment
Gross premiums earned:
Property and casualty16,635 26,336 37,020 54,532 
Ceded premiums earned(3,175)(5,293)(7,710)(11,488)
Segment net premiums earned13,460 21,043 29,310 43,044 
Consolidated net premiums earned$238,993 $207,293 $426,351 $411,149 
(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.