ProAssurance Corporation, a specialty insurer focused on medical professional liability, reported a significant increase in net income for Q2 2025, reaching $21.9 million, or $0.42 per diluted share, compared to $15.5 million, or $0.30 per diluted share, in Q2 2024. Operating income also rose to $26.8 million, or $0.52 per diluted share, reflecting a 144% increase from the prior year. This growth was driven by stronger underwriting performance, particularly in the Specialty Property & Casualty (P&C) segment, which accounts for over 95% of the segment’s business and more than 75% of total earned premiums.
Key factors contributing to the improved results include:
- Improved Underwriting: The Specialty P&C segment saw a 9.5-point improvement in the combined ratio, reaching 99.5%, supported by favorable prior accident year reserve development of $6.2 million, which reduced the net loss ratio by 3.3 points. The current accident year net loss ratio improved by 1.4 points year-over-year, reflecting disciplined underwriting and pricing adjustments, with renewal pricing up 9% in Q2 2025 (compared to 7% in Q1).
- Investment Income Growth: Net investment income increased by 6.7%, driven by higher average book yields on fixed maturity investments and a new money rate of approximately 6%, surpassing the maturing assets’ yield of 3.5%.
- Strategic Focus: CEO Ned Rand emphasized disciplined underwriting, price adequacy, and cost management, alongside a cautious approach to new business ($5.0 million in Q2, down from prior levels) to prioritize profitability. The company’s retention rate in the Specialty P&C segment was 84%.
However, challenges persisted:
- The Segregated Portfolio Cell Reinsurance segment saw profits drop to $167,000 from $797,000 in Q2 2024, due to higher reported loss activity, lower favorable prior accident year development, and an increased allowance for credit losses.
- The Workers’ Compensation Insurance segment reported a higher combined ratio than Q2 2024, driven by rising medical costs per claim, though new business was $4.5 million.
The company’s focus on long-term profitability, bolstered by its pending transaction with The Doctors Company (approved by shareholders on June 24, 2025, and granted early termination by the FTC on July 2), positions it to navigate the cyclical challenges of the medical professional liability and workers’ compensation markets.