Proassurance Corporation Intrinsic Stock Value – ProAssurance Reports Third Quarter Loss Due to Low Underwriting Profits
November 17, 2023
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PROASSURANCE ($NYSE:PRA): This marks the second consecutive quarter that ProAssurance has reported a net loss. ProAssurance Corporation is a property and casualty insurance holding company and provides a wide range of specialty insurance products, including professional liability insurance for healthcare professionals, attorneys, and other professionals; professional liability insurance for healthcare facilities; workers’ compensation insurance; and other commercial insurance products. The company also provides reinsurance products, such as catastrophe property and casualty reinsurance and excess and surplus lines reinsurance. ProAssurance operates in the U.S., the U.K., Canada, and Australia. The company’s poor underwriting results were mainly due to an increase in the company’s medical professional liability reserves.
ProAssurance’s earnings were also impacted by an increase in the frequency and severity of medical professional liability claims, as well as an increase in their corporate expenses. Despite the overall losses, ProAssurance’s investment portfolio performed well over the quarter. Going forward, ProAssurance will continue to focus on improving its underwriting operations while also continuing to benefit from its strong investment portfolio.
Stock Price
On Friday, PROASSURANCE CORPORATION reported its third-quarter results, showing a loss due to low underwriting profits. The stock opened at $13.8 and closed at $13.0, resulting in a 6.3% decrease from the prior closing price of 13.9. This was a marked contrast to the positive financial results the company reported for the same quarter last year. The underwriting profit of PROASSURANCE CORPORATION decreased significantly in the third quarter, leading to the overall loss. This was in part due to a higher cost of reinsurance, which limited the company’s ability to generate earnings on its underwriting business. Despite the lower profits, the company managed to maintain a strong balance sheet and remains a key player in the insurance sector. The impact of the lower underwriting profits was also felt in other areas of PROASSURANCE CORPORATION’s financials.
The company reported a decrease in net premiums written, as well as a drop in total revenues for the quarter. Despite this, the company has managed to maintain its strong capital position and remains well-positioned to take advantage of future market opportunities. Overall, PROASSURANCE CORPORATION reported a loss for its third quarter, primarily driven by lower underwriting profits. The company’s balance sheet and capital position remain strong, providing a foundation for long-term growth and success. Although the decrease in profits may be alarming to some investors, PROASSURANCE CORPORATION is likely to rebound in upcoming quarters as it takes advantage of opportunities in the sector. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Proassurance Corporation. More…
| Total Revenues | Net Income | Net Margin |
| 1.13k | 9.27 | 0.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Proassurance Corporation. More…
| Operations | Investing | Financing |
| -88.01 | 135.04 | -35.83 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Proassurance Corporation. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 5.66k | 4.54k | 21.24 |
Key Ratios Snapshot
Some of the financial key ratios for Proassurance Corporation are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 6.4% | – | 2.7% |
| FCF Margin | ROE | ROA |
| -8.1% | 1.7% | 0.3% |
Analysis – Proassurance Corporation Intrinsic Stock Value
At GoodWhale, we recently performed an analysis of PROASSURANCE CORPORATION‘s wellbeing. Our proprietary Valuation Line calculation revealed the fair value of PROASSURANCE CORPORATION’s share to be around $11.1. This could be an opportunity for investors to benefit from the current market situation. We advise investors to make an informed decision before investing in this stock. More…
Peers
It offers professional liability, surety, products liability, and other lines of insurance services. Its competitors include Kinsale Capital Group Inc, Horace Mann Educators Corp, and Meritz Fire & Marine Insurance Co Ltd, all of which are also engaged in the property and casualty insurance sector.
– Kinsale Capital Group Inc ($NYSE:KNSL)
Kinsale Capital Group Inc is a specialty insurance and reinsurance provider that operates in both the U.S. and Bermuda markets. As of 2022, the company had a market capitalization of 6.48 billion dollars, reflecting its size and value in the industry. Kinsale Capital Group Inc’s Return on Equity (ROE) of 17.1% is also favorable, indicating that the company is managing its resources efficiently and returning a good amount of value to its shareholders. In addition, Kinsale Capital Group Inc is actively engaged in risk management and provides innovative solutions tailored to its clients’ needs.
– Horace Mann Educators Corp ($NYSE:HMN)
Horace Mann Educators Corporation is a publicly traded insurance company that specializes in providing a range of insurance and financial products to teachers and educators. The company has a market capitalization of 1.55 billion as of 2022, indicating that it is one of the larger companies in the insurance sector. In addition, the company has a Return on Equity of 4.11%, which is lower than the industry average of 7.19%, but still indicates that the company is making money. This suggests that the company is successfully managing its assets and investments and is fairly successful in terms of returns on investments.
– Meritz Fire & Marine Insurance Co Ltd ($KOSE:000060)
Meritz Fire & Marine Insurance Co Ltd is a leading provider of property and casualty insurance in South Korea. As of 2022, the company has a market capitalization of 5T and a Return on Equity of 23.55%. Meritz Fire & Marine Insurance provides comprehensive insurance solutions to individuals, businesses, and governmental agencies. The company offers a wide range of products including personal and commercial property insurance, fire insurance, marine insurance, and other liability insurance coverage. Meritz Fire & Marine Insurance’s strong market capitalization and high Return on Equity provides investors with confidence in the company’s ability to generate returns.
Summary
ProAssurance Corporation is a specialty provider of professional liability insurance for medical professionals and related healthcare organizations. The company recently posted a third-quarter loss due to weak underwriting results, which had a direct impact on their stock price. Investors will need to carefully consider the fundamentals of ProAssurance Corporation’s business model before investing. The company’s financials should be thoroughly analyzed to evaluate the profitability of its insurance underwriting and investments, as well as its liquidity position.
Furthermore, investors should pay close attention to any changes in the competitive landscape and assess the impacts on ProAssurance Corporation’s financial performance. Finally, investors should review the company’s dividend policy and consider any changes in the dividend amount to determine if the stock is a good long-term investment.
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