ProAssurance Reports Results for Fourth Quarter 2016
Consolidated Income Statement Highlights ($ in thousands, except per share data) |
|||||||||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||||||||
2016 |
2015 |
% Change |
2016 |
2015 |
% Change |
||||||||||||||||
Revenues |
|||||||||||||||||||||
Gross premiums written* |
$ |
187,450 |
$ |
160,876 |
16.5 |
% |
$ |
835,014 |
$ |
812,218 |
2.8 |
% |
|||||||||
Net premiums written |
$ |
165,462 |
$ |
127,431 |
29.8 |
% |
$ |
738,533 |
$ |
709,285 |
4.1 |
% |
|||||||||
Net premiums earned |
$ |
193,694 |
$ |
164,874 |
17.5 |
% |
$ |
733,281 |
$ |
694,149 |
5.6 |
% |
|||||||||
Net investment income |
$ |
24,727 |
$ |
26,459 |
(6.5) |
% |
$ |
100,012 |
$ |
108,660 |
(8.0) |
% |
|||||||||
Equity in earnings of unconsolidated subsidiaries |
$ |
845 |
$ |
(139) |
707.9 |
% |
$ |
(5,762) |
$ |
3,682 |
(256.5) |
% |
|||||||||
Net realized investment gains (losses) |
$ |
16,561 |
$ |
(6,018) |
375.2 |
% |
$ |
34,875 |
$ |
(41,639) |
183.8 |
% |
|||||||||
Other income* |
$ |
1,845 |
$ |
723 |
155.2 |
% |
$ |
7,808 |
$ |
7,227 |
8.0 |
% |
|||||||||
Total revenues* |
$ |
237,672 |
$ |
185,899 |
27.9 |
% |
$ |
870,214 |
$ |
772,079 |
12.7 |
% |
|||||||||
Expenses |
|||||||||||||||||||||
Net losses and loss adjustment expenses* |
$ |
107,293 |
$ |
92,827 |
15.6 |
% |
$ |
443,229 |
$ |
410,711 |
7.9 |
% |
|||||||||
Underwriting, policy acquisition and operating expenses* |
$ |
60,874 |
$ |
59,160 |
2.9 |
% |
$ |
227,610 |
$ |
217,064 |
4.9 |
% |
|||||||||
Total expenses* |
$ |
174,161 |
$ |
154,976 |
12.4 |
% |
$ |
694,013 |
$ |
643,224 |
7.9 |
% |
|||||||||
Income tax expense (benefit) |
$ |
8,663 |
$ |
(4,025) |
315.2 |
% |
$ |
25,120 |
$ |
12,658 |
98.5 |
% |
|||||||||
Net income |
$ |
54,848 |
$ |
34,948 |
56.9 |
% |
$ |
151,081 |
$ |
116,197 |
30.0 |
% |
|||||||||
Operating income |
$ |
44,446 |
$ |
38,839 |
14.4 |
% |
$ |
129,844 |
$ |
142,629 |
(9.0) |
% |
|||||||||
Weighted average number of common shares outstanding |
|||||||||||||||||||||
Diluted |
53,533 |
53,426 |
0.2 |
% |
53,448 |
55,017 |
(2.9) |
% |
|||||||||||||
Earnings per share |
|||||||||||||||||||||
Net income per diluted share |
$ |
1.02 |
$ |
0.65 |
56.9 |
% |
$ |
2.83 |
$ |
2.11 |
34.1 |
% |
|||||||||
Operating income per diluted share |
$ |
0.83 |
$ |
0.73 |
13.7 |
% |
$ |
2.43 |
$ |
2.59 |
(6.2) |
% |
|||||||||
*Consolidated totals include inter-segment eliminations. The eliminations affect individual line items only and have no effect on net income. See Note 15 of the Notes to Consolidated Financial Statements in the |
Consolidated Key Ratios |
||||||||||||||||||||||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||||||||||||||||||||
2016 |
2015 |
2016 |
2015 |
|||||||||||||||||||||||||||||
Current accident year loss ratio |
80.8 |
% |
90.5 |
% |
80.1 |
% |
82.4 |
% |
||||||||||||||||||||||||
Effect of prior accident years' reserve development |
(25.4) |
% |
(34.2) |
% |
(19.7) |
% |
(23.2) |
% |
||||||||||||||||||||||||
Net loss ratio |
55.4 |
% |
56.3 |
% |
60.4 |
% |
59.2 |
% |
||||||||||||||||||||||||
Expense ratio |
31.4 |
% |
35.9 |
% |
31.0 |
% |
31.3 |
% |
||||||||||||||||||||||||
Combined ratio |
86.8 |
% |
92.2 |
% |
91.4 |
% |
90.5 |
% |
||||||||||||||||||||||||
Operating ratio |
74.0 |
% |
76.2 |
% |
77.8 |
% |
74.8 |
% |
||||||||||||||||||||||||
Return on equity |
11.4 |
% |
7.1 |
% |
8.0 |
% |
5.6 |
% |
||||||||||||||||||||||||
Management Commentary
"Our fourth quarter results reflect the solid execution of our strategic initiatives with each segment achieving profitability gains over last year. Further, premiums were higher in all segments in the quarter, and indeed for the year, as we added new business that meets our underwriting and pricing objectives while maintaining solid retention of our existing insureds. We deepened our penetration of the market created by evolving, complex healthcare delivery systems and added additional insureds through our coordinated marketing efforts in healthcare and workers' compensation. Accomplishing this success in such a competitive environment validates the vision we have for
Fourth Quarter 2016 Highlights
- The 16.5% quarter-over-quarter increase in gross premiums written was driven by success in all segments. Specialty P&C increased 14.5%, primarily due to an
$11.8 million single premium policy written throughProAssurance Risk Solutions (PRS). This is the first risk written by PRS, our unit dedicated to providing sophisticated risk financing solutions for complex organizations. Workers' Compensation premiums increased$5.9 million or 12.3% driven primarily by new business, which was the same reason premiums in our Lloyd's segment increased$4.2 million , or 42.3%. - Net premiums earned also increased in all segments, increasing 17.5% quarter-over-quarter. Within Specialty P&C, 100% of the premium from the PRS policy was earned in the fourth quarter of 2016. In our Lloyd's segment, the increase in net premiums earned was due to higher premiums written in prior periods and premium adjustments based on the loss experience on that business. Net premiums earned in our Workers' Compensation segment were 5.8% higher in the quarter than in 2015.
- We produced
$4.0 million of direct premium in the quarter through our coordinated sales and marketing efforts targeting risks served by ourSpecialty P&C and Workers' Compensation segments. This is another example of our ability to successfully market additional insurance solutions to our customers across lines of business. - Net realized investment gains were
$16.6 million in the fourth quarter, which is a$22.6 million increase from the prior-year quarter. - Net investment income declined quarter-over-quarter primarily due to a
$2.2 million reduction in earnings from our fixed income portfolio. This was partially offset by an increase of$1.0 million in the equity in earnings of unconsolidated subsidiaries. - Net favorable development was
$49.3 million in the quarter, compared to$56.3 million in the year-ago period. There was$46.9 million of favorable development in our Specialty P&C segment, reflecting a continuation of better than expected loss severity trends. Our Workers' Compensation segment saw$2.2 million of favorable development, primarily in our segregated portfolio cell programs. Net favorable development in our Lloyd's segment was approximately$137,000 . - The consolidated current accident year net loss ratio declined by 9.7 points quarter-over-quarter, primarily due to a reduction in expected loss costs related to mass tort litigation in our Specialty P&C segment.
- Our consolidated expense ratio declined 4.5 points compared to the prior year quarter, primarily due an increase in net premiums earned in our Specialty P&C segment, partially offset by a higher expense ratio in our Corporate segment. Additionally, there was a
$5.4 million decrease in our consolidated underwriting expenses that reflected a current year change in how the management fee was considered and allocated to ULAE. The change had a$5.4 million offsetting effect on consolidated losses and thus did not affect consolidated Net income. Likewise, the change resulted in a 3.3 point decrease to the consolidated expense ratio, which was completely offset by a 3.3 point increase to our consolidated net loss ratio.
Non-GAAP Financial Measures
Operating income is a non-GAAP financial measure that is widely used to evaluate performance within the insurance sector. In calculating operating income, we have excluded the after-tax effects of the items listed in the following table that do not reflect normal operating results. We believe operating income presents a useful view of the performance of our insurance operations, but should be considered in conjunction with Net income computed in accordance with GAAP. The following table reconciles net income to operating income:
Reconciliation of Net Income to Operating Income (In thousands, except per share data) |
||||||||||||||
Three Months Ended |
Year Ended |
|||||||||||||
2016 |
2015 |
2016 |
2015 |
|||||||||||
Net income |
$ |
54,848 |
$ |
34,948 |
$ |
151,081 |
$ |
116,197 |
||||||
Items excluded in the calculation of operating income: |
||||||||||||||
Net realized investment (gains) losses |
(16,561) |
6,018 |
(34,875) |
41,639 |
||||||||||
Net realized gains (losses) attributable to SPCs |
547 |
(16) |
2,049 |
(1,192) |
||||||||||
Guaranty fund assessments (recoupments) |
11 |
(16) |
153 |
218 |
||||||||||
Pre-tax effect of exclusions |
(16,003) |
5,986 |
(32,673) |
40,665 |
||||||||||
Tax effect at 35% |
5,601 |
(2,095) |
11,436 |
(14,233) |
||||||||||
Operating income |
$ |
44,446 |
$ |
38,839 |
$ |
129,844 |
$ |
142,629 |
||||||
Per diluted common share |
||||||||||||||
Net income |
$ |
1.02 |
$ |
0.65 |
$ |
2.83 |
$ |
2.11 |
||||||
Effect of exclusions |
$ |
(0.19) |
$ |
0.08 |
$ |
(0.40) |
$ |
0.48 |
||||||
Operating income per diluted common share |
$ |
0.83 |
$ |
0.73 |
$ |
2.43 |
$ |
2.59 |
* Net realized investment gains or losses on investments held by our |
Capital Management
We did not purchase any shares of our common stock during the fourth quarter of 2016 and no purchases have been made as of
Balance Sheet Highlights (in thousands, except per share data) |
|||||||
|
|
||||||
Total investments |
$ |
3,925,696 |
$ |
3,650,130 |
|||
Total assets |
$ |
5,065,181 |
$ |
4,906,021 |
|||
Total liabilities |
$ |
3,266,479 |
$ |
2,947,667 |
|||
Common shares (par value |
$ |
627 |
$ |
625 |
|||
Retained earnings |
$ |
1,824,088 |
$ |
1,988,035 |
|||
|
$ |
(419,930) |
$ |
(419,560) |
|||
Shareholders' equity |
$ |
1,798,702 |
$ |
1,958,354 |
|||
Book value per share |
$ |
33.78 |
$ |
36.88 |
Conference Call Information
About
Segment Results
Specialty P&C Insurance Segment ($ in thousands) |
|||||||||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||||||||
2016 |
2015 |
% Change |
2016 |
2015 |
% Change |
||||||||||||||||
Gross premiums written |
$ |
125,523 |
$ |
109,641 |
14.5 |
% |
$ |
535,725 |
$ |
526,296 |
1.8 |
% |
|||||||||
Net premiums written |
$ |
104,172 |
$ |
80,562 |
29.3 |
% |
$ |
458,681 |
$ |
442,126 |
3.7 |
% |
|||||||||
Net premiums earned |
$ |
122,736 |
$ |
100,249 |
22.4 |
% |
$ |
457,816 |
$ |
443,313 |
3.3 |
% |
|||||||||
Total revenues |
$ |
124,022 |
$ |
100,277 |
23.7 |
% |
$ |
463,122 |
$ |
447,874 |
3.4 |
% |
|||||||||
Net losses and loss adjustment expenses |
$ |
62,793 |
$ |
53,112 |
18.2 |
% |
$ |
268,579 |
$ |
250,168 |
7.4 |
% |
|||||||||
Underwriting, policy acquisition and |
$ |
26,812 |
$ |
25,519 |
5.1 |
% |
$ |
104,333 |
$ |
105,574 |
(1.2) |
% |
|||||||||
Total expenses |
$ |
89,656 |
$ |
78,631 |
14.0 |
% |
$ |
373,056 |
$ |
355,742 |
4.9 |
% |
|||||||||
Segment operating results |
$ |
34,366 |
$ |
21,646 |
58.8 |
% |
$ |
90,066 |
$ |
92,132 |
(2.2) |
% |
Specialty P&C Insurance Segment Key Ratios |
|||||||||||
Three Months Ended |
Year Ended |
||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||
Current accident year loss ratio |
89.4 |
% |
111.4 |
% |
88.6 |
% |
92.3 |
% |
|||
Effect of prior accident years' reserve development |
(38.2) |
% |
(58.4) |
% |
(29.9) |
% |
(35.9) |
% |
|||
Net loss ratio |
51.2 |
% |
53.0 |
% |
58.7 |
% |
56.4 |
% |
|||
Underwriting expense ratio |
21.8 |
% |
25.5 |
% |
22.8 |
% |
23.8 |
% |
|||
Combined ratio |
73.0 |
% |
78.5 |
% |
81.5 |
% |
80.2 |
% |
Gross premiums written in our Specialty P&C segment increased
We wrote
The same qualities that allowed us to attract new business also helped us retain business. Premium retention in physician professional liability was 87% in the quarter and renewal pricing on physician business was unchanged from the year-ago quarter.
Net favorable loss development was
Workers' Compensation Segment ($ in thousands) |
|||||||||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||||||||
2016 |
2015 |
% Change |
2016 |
2015 |
% Change |
||||||||||||||||
Gross premiums written |
$ |
53,520 |
$ |
47,644 |
12.3 |
% |
$ |
247,940 |
$ |
243,608 |
1.8 |
% |
|||||||||
Net premiums written |
$ |
47,591 |
$ |
40,279 |
18.2 |
% |
$ |
223,578 |
$ |
218,338 |
2.4 |
% |
|||||||||
Net premiums earned |
$ |
56,841 |
$ |
53,726 |
5.8 |
% |
$ |
220,815 |
$ |
213,161 |
3.6 |
% |
|||||||||
Total revenues |
$ |
56,989 |
$ |
53,857 |
5.8 |
% |
$ |
221,659 |
$ |
213,653 |
3.7 |
% |
|||||||||
Net losses and loss adjustment expenses |
$ |
36,374 |
$ |
38,198 |
(4.8) |
% |
$ |
140,534 |
$ |
140,744 |
(0.1) |
% |
|||||||||
Underwriting, policy acquisition and operating |
$ |
17,971 |
$ |
16,235 |
10.7 |
% |
$ |
70,464 |
$ |
63,653 |
10.7 |
% |
|||||||||
Segregated portfolio cell dividend expense |
$ |
2,196 |
$ |
(629) |
449.1 |
% |
$ |
7,998 |
$ |
853 |
837.6 |
% |
|||||||||
Total expenses |
$ |
56,541 |
$ |
53,804 |
5.1 |
% |
$ |
218,996 |
$ |
205,250 |
6.7 |
% |
|||||||||
Segment operating results |
$ |
448 |
$ |
53 |
745.3 |
% |
$ |
2,663 |
$ |
8,403 |
(68.3) |
% |
Workers' Compensation Segment Key Ratios |
|||||||||||
Three Months Ended |
Year Ended |
||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||
Current accident year loss ratio |
67.9 |
% |
67.0 |
% |
66.4 |
% |
67.1 |
% |
|||
Effect of prior accident years' reserve development |
(3.9) |
% |
4.1 |
% |
(2.8) |
% |
(1.1) |
% |
|||
Net loss ratio |
64.0 |
% |
71.1 |
% |
63.6 |
% |
66.0 |
% |
|||
Underwriting expense ratio |
31.6 |
% |
30.2 |
% |
31.9 |
% |
29.9 |
% |
|||
Combined ratio |
95.6 |
% |
101.3 |
% |
95.5 |
% |
95.9 |
% |
The quarter-over-quarter increase in the Workers' Compensation operating results was primarily due to improved operating results in our segregated portfolio cell (SPC) business and higher net premiums earned, although those increases were partially offset by increased underwriting expenses.
Within our SPC business, the quarter-over-quarter increase in the dividend expense reflected both the underwriting and investments results of our alternative market business ceded to the SPCs at Eastern Re, net of our participation. The SPC investment results, which include net investment income and net realized gains or losses attributable to the SPCs, are reflected in the results of the Corporate segment but also are included in the calculation of the SPC dividend expense in the Workers' Compensation segment. The SPC investment results included income of
Gross premiums written increased 12.3% in the fourth quarter of 2016, driven primarily by
The decrease in the net loss ratio for the three months ended
The increase in the underwriting expense ratio for the three months ended
Lloyd's Syndicate Segment ($ in thousands) |
|||||||||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||||||||
2016 |
2015 |
% Change |
2016 |
2015 |
% Change |
||||||||||||||||
Gross premiums written |
$ |
14,287 |
$ |
10,043 |
42.3 |
% |
$ |
65,157 |
$ |
56,929 |
14.5 |
% |
|||||||||
Net premiums written |
$ |
13,699 |
$ |
6,590 |
107.9 |
% |
$ |
56,274 |
$ |
48,821 |
15.3 |
% |
|||||||||
Net premiums earned |
$ |
14,117 |
$ |
10,899 |
29.5 |
% |
$ |
54,650 |
$ |
37,675 |
45.1 |
% |
|||||||||
Net investment income |
$ |
406 |
$ |
275 |
47.6 |
% |
$ |
1,410 |
$ |
928 |
51.9 |
% |
|||||||||
Other gains (losses) |
$ |
258 |
$ |
488 |
(47.1) |
% |
$ |
1,491 |
$ |
722 |
106.5 |
% |
|||||||||
Total revenues |
$ |
14,781 |
$ |
11,662 |
26.7 |
% |
$ |
57,551 |
$ |
39,325 |
46.3 |
% |
|||||||||
Net losses and loss adjustment |
$ |
8,126 |
$ |
6,898 |
17.8 |
% |
$ |
34,116 |
$ |
25,181 |
35.5 |
% |
|||||||||
Underwriting, policy acquisition and |
$ |
6,173 |
$ |
5,332 |
15.8 |
% |
$ |
22,832 |
$ |
18,518 |
23.3 |
% |
|||||||||
Total expenses |
$ |
14,299 |
$ |
12,230 |
16.9 |
% |
$ |
56,948 |
$ |
43,699 |
30.3 |
% |
|||||||||
Total income tax expense (benefit) |
$ |
(1,864) |
$ |
487 |
(482.8) |
% |
$ |
384 |
$ |
1,240 |
(69.0) |
% |
|||||||||
Segment operating results |
$ |
2,346 |
$ |
(1,055) |
322.4 |
% |
$ |
219 |
$ |
(5,614) |
103.9 |
% |
Lloyd's Syndicate Segment Key Ratios |
|||||||||||
Three Months Ended |
Year Ended |
||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||
Current accident year loss ratio |
58.5 |
% |
63.3 |
% |
63.3 |
% |
66.8 |
% |
|||
Effect of prior accident years' reserve development |
(0.9) |
% |
— |
% |
(0.9) |
% |
— |
% |
|||
Net loss ratio |
57.6 |
% |
63.3 |
% |
62.4 |
% |
66.8 |
% |
|||
Underwriting expense ratio |
43.7 |
% |
48.9 |
% |
41.8 |
% |
49.2 |
% |
Results of our Lloyd's Syndicate segment, which represents our 58% participation in the results of Lloyd's Syndicate 1729, are reported on a one-quarter lag, except that investments and certain administrative expenses paid in
Syndicate 1729's gross premiums written were
The net loss ratio in our Lloyd's Syndicate segment was 5.7 points lower than the fourth quarter of 2015. We believe that loss ratios will continue to fluctuate from quarter to quarter as Syndicate 1729 writes new business and the existing book matures. Until we judge the book of business to be sufficiently mature, we will continue relying heavily on loss assumptions derived from Lloyd's historical data for similar risks as we factor in more of the Syndicate's actual loss experience.
Underwriting expenses continued to increase, as expected, and are commensurate with the Syndicate's growth. As we noted last quarter, the rate of increase has moderated as the operations of the business have become better matched, and more fully supported, by the business being written.
We recognized a
The business written by Syndicate 1729 remains mostly US-based. Casualty coverages represent 53% of total gross written premium, property constitutes 28% of its risk, catastrophe reinsurance is 15%, and property reinsurance coverages are 4% of the premiums.
Syndicate 1729 has a maximum underwriting capacity of approximately
Corporate Segment ($ in thousands) |
|||||||||||||||||||||
Three Months Ended |
Year Ended |
||||||||||||||||||||
2016 |
2015 |
% Change |
2016 |
2015 |
% Change |
||||||||||||||||
Net investment income |
$ |
24,321 |
$ |
26,184 |
(7.1) |
% |
$ |
98,602 |
$ |
107,732 |
(8.5) |
% |
|||||||||
Equity in earnings (loss) of |
$ |
845 |
$ |
(139) |
707.9 |
% |
$ |
(5,762) |
$ |
3,682 |
(256.5) |
% |
|||||||||
Net realized investment gains (losses) |
$ |
16,544 |
$ |
(6,017) |
375.0 |
% |
$ |
34,799 |
$ |
(41,663) |
183.5 |
% |
|||||||||
Total revenues |
$ |
42,020 |
$ |
20,257 |
107.4 |
% |
$ |
128,708 |
$ |
71,808 |
79.2 |
% |
|||||||||
Operating expenses |
$ |
10,058 |
$ |
6,847 |
46.9 |
% |
$ |
30,807 |
$ |
24,518 |
25.7 |
% |
|||||||||
Interest expense |
$ |
3,747 |
$ |
3,618 |
3.6 |
% |
$ |
15,032 |
$ |
14,596 |
3.0 |
% |
|||||||||
Income taxes |
$ |
10,527 |
$ |
(4,512) |
333.3 |
% |
$ |
24,736 |
$ |
11,418 |
116.6 |
% |
|||||||||
Segment operating results |
$ |
17,688 |
$ |
14,304 |
23.7 |
% |
$ |
58,133 |
$ |
21,276 |
173.2 |
% |
Segment operating results were higher than in fourth quarter 2015, due to a
Net investment income was lower, quarter-over-quarter, as a result of lower earnings from our fixed income portfolio, which has declined in recent years, primarily due to capital management activity since 2007. Returns from our fixed-income investments have also been affected by the prolonged low-interest rate environment.
Taxes increased
Caution Regarding Forward-Looking Statements
Statements in this news release that are not historical fact or that convey our view of future business, events or trends are specifically identified as forward-looking statements. Forward-looking statements are based upon our estimates and anticipation of future events and highlight certain risks and uncertainties that could cause actual results to vary materially from our expected results. We expressly claim the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, for any forward-looking statements in this news release. Forward-looking statements represent our outlook only as of the date of this news release. Except as required by law or regulation, we do not undertake and specifically decline any obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Forward-looking statements are generally identified by words such as, but not limited to, "anticipate," "believe," "estimate," "expect," "hope," "hopeful," "intend," "likely," "may," "optimistic," "possible," "potential," "preliminary," "project," "should," "will," and other analogous expressions. When we address topics such as liquidity and capital requirements, the value of our investments, return on equity, financial ratios, net income, premiums, losses and loss reserves, premium rates and retention of current business, competition and market conditions, the expansion of product lines, the development or acquisition of business, the availability of acceptable reinsurance, actions by regulators and rating agencies, court actions, legislative actions, payment or performance of obligations under indebtedness, payment of dividends, and other similar matters, we are making forward-looking statements.
These forward-looking statements are subject to significant risks, assumptions, and uncertainties, including, among other things, the following factors that could affect the actual outcome of future events:
- changes in general economic conditions, including the impact of inflation or deflation and unemployment;
- our ability to maintain our dividend payments;
- regulatory, legislative and judicial actions or decisions that could affect our business plans or operations;
- the enactment or repeal of tort reforms;
- formation or dissolution of state-sponsored insurance entities providing coverages now offered by
ProAssurance which could remove or add sizable numbers of insureds from or to the private insurance market; - changes in the interest and tax rate environment;
- changes in
U.S. laws or government regulations regarding financial markets or market activity that may affect theU.S. economy and our business; - changes in the ability of the
U.S. government to meet its obligations that may affect theU.S. economy and our business; - performance of financial markets affecting the fair value of our investments or making it difficult to determine the value of our investments;
- changes in requirements or accounting policies and practices that may be adopted by our regulatory agencies, the
Financial Accounting Standards Board , theSecurities and Exchange Commission , thePublic Company Accounting Oversight Board , or theNew York Stock Exchange and that may affect our business; - changes in laws or government regulations affecting the financial services industry, the property and casualty insurance industry or particular insurance lines underwritten by our subsidiaries;
- the effect on our insureds, particularly the insurance needs of our insureds, and our loss costs, of changes in the healthcare delivery system and/or changes in the
U.S. political climate that may affect healthcare policy or our business; - consolidation of our insureds into or under larger entities which may be insured by competitors, or may not have a risk profile that meets our underwriting criteria or which may not use external providers for insuring or otherwise managing substantial portions of their liability risk;
- uncertainties inherent in the estimate of our loss and loss adjustment expense reserve and reinsurance recoverable;
- changes in the availability, cost, quality or collectability of insurance/reinsurance;
- the results of litigation, including pre- or post-trial motions, trials and/or appeals we undertake;
- effects on our claims costs from mass tort litigation that are different from that anticipated by us;
- allegations of bad faith which may arise from our handling of any particular claim, including failure to settle;
- loss or consolidation of independent agents, agencies, brokers or brokerage firms;
- changes in our organization, compensation and benefit plans;
- changes in the business or competitive environment may limit the effectiveness of our business strategy and impact our revenues;
- our ability to retain and recruit senior management;
- the availability, integrity and security of our technology infrastructure or that of our third-party providers of technology infrastructure, including any susceptibility to cyber-attacks which might result in a loss of information or operating capability;
- the impact of a catastrophic event, as it relates to both our operations and our insured risks;
- the impact of acts of terrorism and acts of war;
- the effects of terrorism-related insurance legislation and laws;
- guaranty funds and other state assessments;
- our ability to achieve continued growth through expansion into new markets or through acquisitions or business combinations;
- changes to the ratings assigned by rating agencies to our insurance subsidiaries, individually or as a group;
- provisions in our charter documents,
Delaware law and state insurance laws may impede attempts to replace or remove management or may impede a takeover; - state insurance restrictions may prohibit assets held by our insurance subsidiaries, including cash and investment securities, from being used for general corporate purposes;
- taxing authorities can take exception to our tax positions and cause us to incur significant amounts of legal and accounting costs and, if our defense is not successful, additional tax costs, including interest and penalties; and
- expected benefits from completed and proposed acquisitions may not be achieved or may be delayed longer than expected due to business disruption; loss of customers, employees or key agents; increased operating costs or inability to achieve cost savings; and assumption of greater than expected liabilities, among other reasons.
Additional risks, assumptions and uncertainties that could arise from our membership in the
- members of Lloyd's are subject to levies by the
Council of Lloyd's based on a percentage of the member's underwriting capacity, currently a maximum of 3%, but can be increased by Lloyd's; - Syndicate operating results can be affected by decisions made by the
Council of Lloyd's which the management of Syndicate 1729 has little ability to control, such as a decision to not approve the business plan of Syndicate 1729, or a decision to increase the capital required to continue operations, and by our obligation to pay levies to Lloyd's; - Lloyd's insurance and reinsurance relationships and distribution channels could be disrupted or Lloyd's trading licenses could be revoked making it more difficult for Syndicate 1729 to distribute and market its products;
- rating agencies could downgrade their ratings of Lloyd's as a whole; and
- Syndicate 1729 operations are dependent on a small, specialized management team and the loss of their services could adversely affect the Syndicate's business. The inability to identify, hire and retain other highly qualified personnel in the future, could adversely affect the quality and profitability of Syndicate 1729's business.
Our results may differ materially from those we expect and discuss in any forward-looking statements. The principal risk factors that may cause these differences are described in "Item 1A, Risk Factors" in our Form 10-K and other documents we file with the
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/proassurance-reports-results-for-fourth-quarter-2016-300411704.html
SOURCE
Ashford Prime Reports Fourth Quarter And Year End 2016 Results
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