ProAssurance Reports $5.8 Million Net Loss in Q1 2025 Amid Revenue Decline

ProAssurance Corporation reported a net loss of $5.8 million for the first quarter of 2025, a significant decline from a net income of $4.6 million in the same period of 2024. The company's total revenues decreased to $272.1 million, down from $284.7 million year-over-year, primarily due to a drop in net premiums earned, which fell by $7.9 million to $236.3 million. This decline was attributed to reduced premium volumes in the Specialty Property & Casualty (P&C) segment, particularly following the company's exit from Syndicate 1729 at Lloyd's of London, and a decrease in the volume of written premiums in certain lines of business.

In terms of operational metrics, ProAssurance's net loss ratio increased to 80.4% from 79.7% in the prior year, while the combined ratio rose to 115.6% from 111.6%. The underwriting expense ratio also saw an uptick, reaching 35.2%, compared to 31.9% in the previous year. The increase in expenses was driven by higher operating costs, including transaction-related expenses associated with the proposed merger with The Doctors Company, which amounted to approximately $7.1 million during the quarter.

ProAssurance's investment income improved, with net investment income rising to $36.9 million from $33.9 million, reflecting higher average book yields and increased investment balances. However, the company recorded net investment losses of $1.7 million, compared to losses of $0.3 million in the prior year, primarily due to realized losses from the sale of certain fixed maturities. The company’s equity in earnings from unconsolidated subsidiaries also increased, contributing positively to the overall investment results.

Strategically, ProAssurance is in the process of merging with The Doctors Company, a transaction expected to close in the first half of 2026, pending regulatory approvals and shareholder consent. The merger is anticipated to enhance ProAssurance's market position and operational capabilities. As of May 1, 2025, the company had 51,292,333 shares of common stock outstanding and continues to maintain a robust capital structure, with approximately $125 million available under its revolving credit agreement.

Looking ahead, ProAssurance anticipates challenges in the competitive insurance market, particularly in the medical professional liability sector, which may impact premium growth and retention. The company is focused on improving profitability through strategic underwriting actions and cost management initiatives, while also navigating the complexities associated with the merger and its implications for future operations.